Prescription is one of those terms in practice which has struck fear into every attorney at some or other stage during their career. That fear of knowing that if you don’t issue summons timeously, your client’s claim will be extinguished forever. Various attorneys have ended up on the wrong side of prescription, having had their client’s claim prescribed either as a result of their own wrongdoing or their client’s negligence.
Every person who claims that they have a legal right or remedy against another party who has done them wrong will have a certain amount of time to institute legal proceedings against said party in order to claim either the outstanding monies, damages or a specific performance, just to name a few.
In terms of the Prescription Act1, a claim will have become prescribed if a summons, or a statement of claim in arbitration proceedings, has not been issued and served on a defendant within a stipulated period. Section 11 of the Act stipulates the various time periods for various claims, but the most common period is three years for most types of debts. It is important to note that serving a letter of demand does not constitute initiating legal proceedings.
For example, if a client owes you money for services which you have duly rendered and said amounts have become due and payable, the claim will prescribe within three years from the date which the amount become due and payable. In the event that formal legal proceedings are not instituted within the prescribed period, the claim will have prescribed and the right to claim said debt will also be extinguished forever.
The aforementioned is very important in law as it brings the necessary certainty to it. The certainty is important as it will oblige possible litigants to commence proceedings timeously as it is fatal to the certainty of law if a person has an infinite amount of time to institute legal proceedings against his/her wrongdoer.
What would the position be if a person commences legal proceedings but then sits back and does nothing? Can a claim prescribe if summons has been issued but is not executed?
This issue arose in the matter of Cadac v Weber-Stephen2 which was finally decided in the Supreme Court of Appeal. This matter started out in January 2005 in the South Gauteng High Court (Johannesburg) when an urgent application was brought before Court by Cadac seeking relief as a result of Weber’s unlawful warrant ordering that certain goods be removed from Cadac’s distributors. Weber alleged that these goods were counterfeit goods.
The goods were removed during the Christmas period of 2004 and as such Cadac suffered damages as a result thereof. The Court held that the warrant was indeed unlawfully obtained and ordered that the goods be returned to Cadac’s distributors. The Court also ordered that damages should be paid to Cadac as a result of Weber’s unlawful conduct as soon as same can be quantified. The prayer for damages was postponed sine die.
Cadac did not pursue the claim of damages until 2008 where it brought an interlocutory application seeking a declaratory order as to how the damages should be quantified.
Weber’s contention was that Cadac’s claim had prescribed since they did not do anything for a period of 3 years and two days. Weber said that the claim for damages cannot be brought by way of motion proceedings. Cadac’s contention was that it only sought directions from Court as to how to quantify the damages and as such did not need to present the claim to another forum.
The Court held that Cadac was within its rights to bring the application but did not condone their lacklustre way of pursuing the claim within a reasonable time.
The Court further confirmed the provisions of Section 15(1) of the Act3, stating that prescription was indeed interrupted when the process was issued and served on Weber and such prescription will only start running again if Cadac cannot execute their claim successfully.
The significance of the Court’s statement as well as the provisions of Section 15(1) is that if a plaintiff cannot successfully execute his/her claim, Section 15(2) states that the running of prescription will be deemed to have never been interrupted and the claim will then have become prescribed within the time period as provided for in Section 11, from the date when the debt arose.
Some would say that it is unfair to a debtor that a claim will never prescribe if legal process has been served on him/her and the plaintiff sits back and does nothing thereafter.
The justification of the above is that, when a defendant enters an appearance to defend the matter, there are certain remedies to his/her disposal to force a plaintiff to bring the matter before court and as such the provisions of the Act is not unfair.
The fact of the matter cannot be stressed enough, you have to ensure that a claim is timeously instituted prior to its prescription date to avoid any further damages and prejudice to your client.
Candidate Attorney – Dyason Attorneys
1 Act 68 of 1969;
2 Cadac v Weber-Stephen (530/09)  ZASCA 105 (16 September 2010)
3 Supra fn1;