CIVIL PRACTICE – PRESCRIPTION – DISTINCTION BETWEEN ‘COMING INTO EXISTENCE OF A DEBT’ AND ‘RECOVERABILITY THEREOF’

CIVIL PRACTICE – PRESCRIPTION – DISTINCTION BETWEEN ‘COMING INTO EXISTENCE OF A DEBT’ AND ‘RECOVERABILITY THEREOF’

The plaintiffs were awarded a tender by the first and fourth defendants in terms of which the plaintiffs were tasked to carry out an interim valuation of ratable properties within the newly extended boundaries at a contract price of N$848 700. The conditions of the tender awarded to the plaintiff was as follows:

1. That the tender be paid according to the number of properties valued.
2. That 25% of the tender amount be paid only after the valuation court is finalized.
3. That the tenderer completes the provisional valuation roll before the end of August 2012.

The plaintiffs pleaded that they complied with their obligations in terms of the tender agreement, however, during the execution of the tender agreement it became clear that some of the properties to be valuated were subdivided into new and smaller properties which resulted in the increase of the properties to be evaluated by 305 properties. The plaintiffs pleaded that the valuation of the additional properties resulting in an increase of costs, with an additional N$1 830 000, which the defendants, despite demand, refuses to pay. The plaintiffs instituted action for payment of that amount.

The defendants raised a special plea of prescription wherein they pleaded that the plaintiffs’ claim was based on a contract concluded on 1 June 2012 alternatively 10 September 2013, when the plaintiffs demanded payment from the defendants. The defendants further pleaded that summons was served on them on 24 April 2017, which was three years after the claim arose and therefore the plaintiffs’ claim had prescribed. The plaintiffs denied that their claim prescribed as the parties were engaged in amicable settlement negotiations up until April 2017 when the summons was issued. The defendant countered that engaging in settlement negotiations is not a defence to prescription.

After considering the legal principles, the court held that:

1. Debt is defined as, a) something owed or due: something (as money, goods, or service) which one person is under an obligation to pay or render to another, b) a liability or obligation to pay or render something; the condition of being so obligated.
2. A debt (which includes a delictual debt) begins to running when the debt becomes due and payable and that is when the creditor acquires knowledge of the facts from which the debt arises.
3. There is a distinction between ‘coming into existence of a debt’ and ‘recoverability thereof’. A debt must be immediately enforceable before it can be claimed.
4. On the papers the date when the creditor acquired a complete cause of action for the recovery of the debt is not clear. Therefore, the defendants did not discharge the onus resting on it as the party invoking prescription.

In the result, the special plea for prescription was dismissed.

APB Property Services v Municipal Council of Windhoek NAHCMD 22 August 2022