Stockdale and Another v Stockdale (A63/2002) [2002] ZAWCHC 67; [2003] 3 All SA 358 (C); 2004 (1) SA 68 (C) (22 November 2002)

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[2002] ZAWCHC 67
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Stockdale and Another v Stockdale (A63/2002) [2002] ZAWCHC 67; [2003] 3 All SA 358 (C); 2004 (1) SA 68 (C) (22 November 2002)

IN THE HIGH COURT OF
SOUTH AFRICA
(CAPE OF GOOD HOPE
PROVINCIAL DIVISION)
CASE
NO:A63/2002
In
the matter between:
MAURICE STOCKDALE
First Appellant
MARIANNE STOCKDALE
Second Appellant
and
RENE
STOCKDALE
Respondent
JUDGMENT DELIVERED ON
THE 22 NOVEMBER 2002
TRAVERSO,
AJP :
[1]
The Appellants in this matter were the Plaintiffs in the Court
a
quo
.
The Respondent was the Defendant. For the sake of convenience I
will refer to the parties as in the Court
a
quo
.
[2]
The Plaintiffs’ claims in the Magistrates’ Court were based
on two acknowledgements of debt that were both signed by the
Defendant on 1 February 1991. In both acknowledgements of debt the
Defendant acknowledged herself indebted to the Plaintiffs in
the sum
of R41 397,07.
Against this claim the
Defendant raised a special plea of prescription.
[3]
The
only issue in this appeal is whether the Magistrate was correct to
dismiss the Plaintiffs’ claims on the basis that their claims
against the Defendant had prescribed.
[4]
To decide this issue regard must be had,
inter
alia
,
to the background circumstances and the wording of the two
acknowledgements of debt. The relevant background circumstances are
the following:
4.1 In 1986 the
Plaintffs’ son, Michael John Stockdale, and the Defendant were
married to each other and were living at their family
home at 7 Dorp
Street, Malmesbury. At that stage the house was owned by Mr.
Stockdale.
4.2 In 1987, Mr.
Stockdale and the Defendant agreed that the house should be
transferred into Defendant’s name on account of the
fact that by
doing so Mr. Stockdale would qualify for favourable financing
arrangements from a finance house, Syfrets Bank.
4.3 In
1987 or 1988 the house was transferred to the Defendant.
4.4 Mr. Michael Stockdale
was at that stage employed at Atlantis Diesel Engines (“ADE”), an
enterprise based in Atlantis near
Malmesbury. He was employed there
until 15 September 1990, when he and the Defendant were still living
in the house at 7 Dorp Street,
Malmesbury.
4.5 When Mr. Stockdale
left the employ of ADE, he lost the entitlement to preferential
arrangements in respect of the bond registered
over the property.
While working for ADE he received a 100% bond, and also a subsidy in
respect of the bond repayments. To this
he was no longer entitled.
4.6 Mr. Stockdale and the
Defendant could not afford a bond from another financial institution
on the open market.
4.7 As a result of this
the Plaintiffs offered to lend the money to settle the existing bond
with Syfrets Bank. Mr de Haan, who appeared
for Defendant submitted
that – “in reality no money was lent by the Plaintiff’s to the
Defendant– it was lent to their son
the witness”. While that may
be so, Plaintiffs treated Defendant as a debtor(she was after all
the owner and mortgagor) and she
signed Acknowledgements of Debt.
4.8 Mr.
Stockdale, after leaving the employ of ADE, took up employment with
the Plaintiffs’ company.
4.9 In these
circumstances, the Plaintiffs agreed to lend to their son and his
wife a sum equivalent to the amount necessary to settle
the
indebtedness on the bond over the house at Dorp Street, Malmesbury.
The Plaintiffs each lent half of the sum necessary, i.e.
R41 397,07.
4.10 In addition Mr.
Stockdale described the understanding regarding the loan from his
parents as follows:
“
There
was an understanding that while I lived in the house or worked for
them or was married that the money was available.”
“
Well
the money was loaned for while I was living at Malmesbury and
employed in the company basically. And my relationship with my
parents was good. I mean, if my relationship fell flat with them,
yes they would be entitled to ask the money back.”
4.11 The two
acknowledgements of debt are in similar terms describing the debt as
in respect of “monies advanced by the creditor
to me on 31 January
1991(to enable me to repay my bond with Syfrets Bank)”. Two
further clauses in particular are relevant:
4.11.1 In terms of clause
2:
“
I
undertake to repay the capital amount outstanding and interest (refer
clause 3) within 30 days from the date notice is given by
the
creditors.”
4.11.2 In terms of clause
4:
“
I
will at any time be entitled to repay the balance outstanding,
together with interest thereon, in one amount without being obliged
to give the creditor prior notice of such repayment.”
[5]
It was common cause that neither Mr. Stockdale nor the Defendant
could afford to repay the loan immediately or within 30 days
of an
immediate demand.
[6]
In my view the only reasonable inference to be drawn from the
evidence is that nobody regarded the loan as immediately repayable.

Repayment would only become due if certain changes in the living
arrangements, marriage status, or employment situation occurred.

Notice to repay the loan would then be have to be made before
recovery could take place.
[7]
In
addition there are two subsequent events which, in my view
corroborate the events described by Mr. Stockdale.
7.1 In 2001 Mr. Stockdale
and the Defendant were divorced. As part of the divorce settlement,
Mr. Stockdale indemnified the Defendant
in respect of one-half of the
claim that is the subject of this appeal. The existence of this
clause corroborates the version of
events described by Mr. Stockdale
in his evidence.
7.2 Later, when the house
was sold, the proceeds were divided equally between Mr. Stockdale and
the Defendant. The Defendant has
thus received, indirectly, her
share of the financial benefit of the loans that were made in 1991 by
the Plaintiffs, as well as being
indemnified by Mr. Stockdale in
respect of one half of the present claim against her.
[8]
The question on appeal is accordingly whether, in the light of
these terms, and the relevant background circumstances, prescription
began running on the debts immediately (i.e. with effect from 1
February 1991) or not. It is common cause that if prescription
did
so begin running from that date, the debts became prescribed prior to
the institution of action. Conversely, if “notice”had
to be
given before the running of prescription would commence then such
“notice” was given only by way of the letter dated 24
October
2000.
[9]
Section 12(1) of the Prescription Act, 68 of 1969 (‘the Act”),
provides:
“
Subject
to the provisions of subsection (2) and (3), prescription shall
commence to run as soon as the debt is due.”
[10]
Did the debt created by the acknowledgements become due upon
signature or was notice to repay necessary to render it due?
[11]
There has been much controversy on this issue in our
jurisprudence.
[12]
Section 12(1) of the Act expressly requires that a debt be “
due
”
before prescription begins to run. When a debt becomes due should,
on the one hand be determined by the intention of the parties.
There
are dicta, referred to by
Mohamed,
CJ in Uitenhage Municipality v. Molloy,
1998(2) SA 735 (SCA)at 741A which suggests that a debt becomes “due”
when the creditor acquires the right to institute action
or when the
creditor has a “complete cause of action” in respect of such
debt.
On
the other hand there is a policy consideration underlying the Act
that a creditor should not be able to rely on its own inaction
in
order to delay the running of prescription against him.
Uitenhage
Municipality v. Molloy
,supra,
at 742A-D, but see the later remarks of the same Court in
Santam
v. Ethwar
1999(2) SA 244(SCA) at 252A – 256H.
[13]
It is clear that in determining when a debt arises and when it
becomes due (“
opeisbaar
”)
different concepts are concerned. A distinction needs to be made
between “
the
coming into existence of the debt on the one hand and recoverability
thereof on the other
”
(
List
v. Jungers
,1979(3)
SA 106 (A) at 121 C-D.) The stage when a debt become recoverable,
and therefore due in the sense in which the Act speaks
of it, has
been described as follows in
Deloitte
Haskins & Sells Consultants (Pty) Ltd v. Bowthorpe Hellerman
Deutsch (Pty) Ltd.
,
1991(1) SA 525 (A) at 532 H:
“
There
has to be a debt immediately claimable by the creditor or stated in
another way, that there has to be a debt in respect of which
the
debtor is under an obligation to perform immediately.
”
Clearly
then it is essential to determine the intention of the parties as
regards “
immediate
”
payment of the debt.
[14]
The facts of this case and the wording and structure of the
acknowledgements of debt reveal that there was no immediate
expectation
or obligation placed upon the Defendant by the Plaintiffs
in respect of payment of the loan. It is clear that no specific date
for
demand was fixed in the document and no condition was linked to
the demand. It is however also abundantly clear that it was never
contemplated that the “
notice
”
to repay could or would be given within 30 days of the date of the
acknowledgements.
[15]
It is a general rule of law that in all obligations in which a
time for payment has not been agreed the debt is due forthwith.

However, it is also clear that this may be qualified in the light of
the particular circumstances of the case. Voet 12.1.19 says
that in
the case of a loan for consumption, where no time for repayment has
been fixed, the money must be repaid,
“
not
forthwith, but after the passage of a moderate time, so that in the
meantime the borrower will have been able to enjoy at least
some
advantages out of the loan and the use of the money.”
This
sentiment was echoed by Mason, J. in the case of
Mackay
v. Naylor
,
1917 TPD 533
at 538, where the Court held that a reasonable time must
be allowed to the borrower to enable him to have some “
real
benefit from the transaction
.”
The Court found that “
the
same rule is applied in the case of a loan whether of money or
articles of consumption
.”
[16]
In a contract in which no date of fulfilment has been fixed, the
creditor can sue for fulfilment without having “to show that
a
reasonable time had elapsed when he issued summons” (
Fluxman
v. Brittain
,
1941 AD 273
at 274.) But when was “fulfilment” due? A debt is
due “when it is payable, when it is immediately claimable, when
payment
of it can be compelled by legal action[“per Nicholas, J in
Big Rock (Pty) Ltd v. Hoffman, 1983(1) S.A. 534 (T) at 539, quoting
several earlier authorities]. Clearly the parties in this case
intended repayment to be made within 30 days of notice by the
Plaintiffs.
If, as the Defendant alleges, the prescription period
began to run upon her signing the acknowledgements of debt, then the
Plaintiffs
could properly have demanded payment on 4 March 1991 but
it is quite clear that the Defendant would have been unable to
perform.
The Plaintiffs, cognizant of the circumstances in which the
Defendant found herself obviously afforded her a reasonable time, in
the circumstances, to make the repayment of the loan. The intention
of the parties that the loan would not be immediately repayable
is
further reinforced by clause 4 of the acknowledgements of debt which
provides that the Defendant would:
“
at
any time
be entitled to repay the balance outstanding, together with the
interest thereon, in one amount without being obliged to give the
creditor prior notice of such repayment.
”
(Emphasis supplied)
[17]
It is evident that considerations of policy require that a
creditor is not by his or her own conduct able to postpone the
commencement
of prescription, (
Benson
& Another v. Walters & Others
,
1981(4) SA 42 at 49 G). This is expanded upon by the Court in
Uitenhage
Municipality v. Molloy
,
(supra)
at 742E - 743A. Mahomed, CJ stated that one of the main purposes of
the Act is to protect a debtor from old claims against which
it
cannot effectively defend itself, because of loss of old records or
witnesses, caused by the lapse of time:
“
If
creditors are allowed by their deliberate or negligent acts to delay
the pursuit of their claims without incurring the consequences
of
prescription, that purpose would be subverted
.”
In
this instance it is difficult to see how the lapse of time could in
any way hinder the Defendant in the manner described. Nor
would it
be appropriate to classify the Plaintiffs’ delay in requesting
payment as a “
deliberate
or negligent act
”.
The parties entered an arrangement based on a certain set of
circumstances. For as long as those circumstances prevailed, it
was
understood that notice would not be given. These circumstances
changed with the Defendant’s divorce from the Plaintiffs’
son,
and the consequent sale of the property for which the loan was
originally extended. In other words:
“
What
may and should be considered a reasonable time for performance ...
can only be decided by reference to the nature of the contract
entered into by the parties and the interrelationship of the
obligations undertaken by both of them.
”
(
Phasha
v. Southern Metropolitan Local Council of the Greater Johannesburg
Metropolitan Council
,
2000(2) SA 455 (W) at 466 B-C).
[18]
This
was certainly not a situation where the day on which the debt became
due could be unilaterally determined by the creditor(ie.Plaintiffs)
The personal factors relevant to the Plaintiffs’ failure to enforce
their right in what may be considered a timeous manner and
the clear
intention of the parties as manifested in the acknowledgements of
debt must be taken into account. In the words of Pothier,
which were
referred to in the case of
Fluxman
v. Brittain
,
(
supra
)
at 294, when dealing with a loan in which no term is mentioned for
repayment:
“
The
lender ought to grant a time more or less according to the
circumstances.”
[19]
To adopt a different approach would in my view turn prescription
into a “
blunt
instrument for achieving finality in the relationship between parties
to an obligation
.”
(MM Loubser: “
Towards
a theory of extinctive prescription
”
(1988) 105 SALJ 34
at 53.) The peculiar circumstances of this matter
are such that notice was in fact necessary for the running of
prescription to
commence; this was made only by way of letter dated
24 October 2000.
[20]
Accordingly, I am of the view that the Magistrate’s findings
that the Plaintiffs’ claims had prescribed was wrong and that
the
appeal should succeed.
[21]
I
accordingly make the following order.
The appeal succeeds with
costs and the Magistrate’s order is set aside and substituted by
the following:
First Plaintiff:
(a) Defendant is ordered to pay
the First Plaintiff the sum of R41 397,07;
(b) Interest on the
aforementioned sum is to be calculated at the rate of the prime
overdraft rate of First National Bank from time
to time;
(c) Defendant is ordered to pay
First Plaintiff’s costs of suit.
(2)
Second
Plaintiff:
(a) Defendant is ordered to pay
the Second Plaintiff the sum of R41 397,07;
(b) Interest on the
aforementioned sum is to be calculated at the rate of the prime
overdraft rate of First National Bank from time
to time;
(c) Defendant is ordered to pay
Second Plaintiff’s costs of suit.
________________________
TRAVERSO, AJP
I
agree:
________________________
FOXCROFT,
J