UDC Limited v Dorba Dorba Transport (Private) Limited & Others

On 28 September 1993, the first respondent entered into a hire purchase agreement with Turnpan Zimbabwe Limited for two tractors, with the last instalment due on 27 September 1995. This agreement was ceded to the appellant. On 14 March 1994, the first respondent entered into another hire purchase agreement with Goya Enterprises (Private) Limited for two caterpillar dozers, with the last instalment due on 13 March 1997. This agreement was also ceded to the appellant. The second, third and fourth respondents stood as sureties and co-principal debtors. The first respondent defaulted on payments under both agreements. On 4 September 2000, the appellant issued a summons claiming outstanding amounts under both agreements, which was served on 20 September 2000. On 15 November 2000, the respondents filed a special plea of prescription.

• Whether the appellant's claims were prescribed under section 27 of the Hire-Purchase Act read with section 2 of the Hire-Purchase (Limitation of Time) (Variation) Notice, 1984
• Whether the appropriate period referred to in section 27(3) of the Act is the maximum period of sixty months specified in the Schedule or the actual period within which the full purchase price is payable in terms of the agreement
• When does the prescription period commence to run in hire-purchase agreements

The appeal was dismissed with costs.

For purposes of calculating prescription under section 27 of the Hire-Purchase Act read with section 2 of the Hire-Purchase (Limitation of Time) (Variation) Notice, 1984, the 'appropriate period within which this Act requires the full purchase price to be paid' refers to the actual period within which the full purchase price is payable in terms of the specific agreement concluded between the parties, and not the maximum period specified in the Schedule to the Act. The prescription period of 730 days commences from the end of the contractual payment period agreed by the parties, provided that period does not exceed the statutory maximum.

Sandura JA endorsed the general principle articulated by Professor Loubser in 'Extinctive Prescription' that certainty requires the prescription period should begin to run as soon as there is a completed cause of action with a plaintiff who can sue and a defendant who can be sued, subject to certain qualifications, most importantly the requirement of knowledge on the part of the creditor. The court stated that these comments apply to Zimbabwean law.

This case provides authoritative interpretation of the prescription provisions in the Hire-Purchase Act, clarifying that the prescription period runs from the end of the actual contractual payment period agreed between parties, not from the maximum statutory period. It establishes an important principle for calculating prescription in hire-purchase disputes in Zimbabwean law. The case also affirms the general principle that the prescription period begins to run as soon as there is a complete cause of action with a plaintiff who can sue and a defendant who can be sued.