Masilo v Betterbridge (Pty) Ltd

The respondent company filed a claim against a company in liquidation. The claim related to delay in completion of work. The claim was admitted to proof under section 44 of the Insolvency Act 24 of 1936. The claim was subsequently withdrawn before the presiding officer at the meeting of creditors made a final decision on whether to admit or reject the claim. The appellants later raised a special plea of prescription, arguing that the respondent's claim had prescribed. The respondent contended that prescription was delayed in terms of section 13(1)(g) of the Prescription Act 68 of 1969.

• Whether a claim withdrawn before final adjudication by the presiding officer at a meeting of creditors qualifies as the 'object of a claim filed' for purposes of section 13(1)(g) of the Prescription Act 68 of 1969
• Whether the completion of prescription was delayed when the claim was admitted to proof under section 44 of the Insolvency Act before being withdrawn
• At what point does the impediment to prescription become operative under section 13(1)(g) of the Prescription Act

The appeal was dismissed with costs.

The binding legal principle is that under section 13(1)(g) of the Prescription Act 68 of 1969, the impediment to the completion of prescription becomes operative as soon as a claim is 'admitted to proof' - which occurs when the presiding officer at the meeting of creditors accepts the claim as filed. The adjudication process under section 44 of the Insolvency Act 24 of 1936 need not be completed for the delay in prescription to take effect. A claim that has been admitted to proof and subsequently withdrawn still qualifies as the 'object of a claim filed' for purposes of section 13(1)(g), thereby delaying prescription.

The Court observed that the appellants' new argument raised on appeal - that a creditor must participate in the section 44 process until completion to benefit from delayed prescription - was not pleaded in the rejoinder. The Court also noted that counsel for the appellants (Mr Pye) properly conceded that if the High Court was correct in its interpretation of when the impediment becomes operative, the appeal could not succeed. While not necessary for the decision, the Court's brief engagement with these procedural and concession aspects provides additional context for understanding the weakness of the appellants' case.

This case clarifies the interpretation of section 13(1)(g) of the Prescription Act 68 of 1969 in relation to claims filed against companies in liquidation. It establishes that for purposes of delaying prescription, the operative moment is when a claim is 'admitted to proof' by the presiding officer at a creditors' meeting under section 44 of the Insolvency Act, not when the adjudication process is completed. The judgment confirms that a creditor who files a claim that is admitted to proof benefits from the delay in prescription even if the claim is subsequently withdrawn before final adjudication. This provides important guidance on the interaction between insolvency proceedings and prescription rules in South African commercial law.