Stoner Trading (Proprietary) Limited v Riozim Limited

In 2005, the plaintiff and defendant entered into an agreement for the sale of chemicals on a cash and delivery basis, which was terminated in 2009. In 2009, the parties entered into a new agreement whereby the plaintiff would supply chemicals to the defendant on credit, with payment due within 30-120 days. In 2010, the plaintiff supplied products worth ZAR 992,907.20 to the defendant's subsidiary Renco Mine on credit, but the defendant failed to pay. Between 2011 and 2012, there were negotiations to pay the debt. In 2013, following a complete change in the defendant's management, the parties entered into another agreement whereby the plaintiff would resume supplying sulphuric acid on a cash-on-delivery basis while the defendant would pay portions of the old debt. The defendant paid for nine consignments but failed to pay for three consignments and the old debt. The plaintiff instituted legal proceedings on 18 February 2015 claiming ZAR 992,907.20.

• Whether the plaintiff's claim had prescribed in terms of the Prescription Act [Chapter 8.11]
• Whether the running of prescription was interrupted by the defendant's acknowledgment of liability
• Whether the 2013 agreement between the parties constituted a tacit acknowledgment of the debt that interrupted prescription

The Special Plea of prescription was dismissed. The defendant was ordered to pay costs on an attorney-client scale.

The running of prescription under the Prescription Act [Chapter 8.11] is interrupted by tacit acknowledgment of liability by the debtor as provided in s 18 of the Act. A tacit acknowledgment can be inferred from the debtor's conduct, including entering into a new commercial agreement that contemplates servicing the old debt. When prescription is interrupted by acknowledgment of liability, prescription commences to run afresh from the date of interruption. The debtor's words and conduct must be taken into account when determining whether there has been an acknowledgment of liability.

The court observed that it would have made no economic sense for the plaintiff to enter into a new agreement with the defendant without assurances that the old debt was being serviced. The court also noted that the defendant had failed to meet its obligations under the new 2013 agreement, leading to separate litigation in HC 1463/15, though that case was not before the court.

This case is significant in Zimbabwean commercial law as it clarifies the application of sections 15, 16, and 18 of the Prescription Act [Chapter 8.11]. It establishes that tacit acknowledgment of liability through conduct (such as entering into a new agreement involving payment of the old debt) can interrupt the running of prescription. The case demonstrates that courts will look beyond mere words and consider the parties' conduct and commercial context when determining whether there has been an acknowledgment of debt that interrupts prescription. It reinforces the principle that prescription begins anew from the date of interruption, protecting creditors who have received acknowledgments of liability from their debtors.