Burley Appliances Limited v Grobbelaar N.O. and Others (3029/2001) [2003] ZAWCHC 31; [2003] 3 All SA 505 (C); 2004 (1) SA 602 (C) (14 July 2003)

Burley Appliances Limited v Grobbelaar N.O. and Others (3029/2001) [2003] ZAWCHC 31; [2003] 3 All SA 505 (C); 2004 (1) SA 602 (C) (14 July 2003)

The court held that the statutory remedies created by sections 64 and 65 of the Close Corporation Act are subject to the ordinary rules of prescription under the Prescription Act. The debt arises when the conduct giving rise to liability occurs and the creditor has knowledge of the debtor and the facts, not only when a court declaration is made. The arguments that prescription only commences upon a court order were rejected, as this would allow creditors to indefinitely postpone prescription by inaction. The exception to the special plea of prescription was dismissed, confirming that the claims are subject to prescription and that the period runs from the accrual of the cause of action.

Citation
[2003] ZAWCHC 31
Parties
Plaintiff: Burley Appliances Limited; Defendant: Patricia Anne Grobbelaar N.O.; Defendant: Futek Systems CC; Defendant: Duncan Swinburne Bain Marshall
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
14 July 2003
Case Number
3029/2001
Procedural Posture
Civil Trial / Exception to Special Plea of Prescription
Outcome
Exceptions to the special plea of prescription are dismissed with costs.
Judges
H C Nel, Potgieter AJ
Legal Topics
Close Corporation Act Section 64, Close Corporation Act Section 65, Prescription Act Section 10 11 12, Insolvency Act Section 34, Piercing Corporate Veil, Reckless Trading
Commercial and Corporate Civil Procedure Close Corporation Act Section 64 Close Corporation Act Section 65 Prescription Act Section 10 11 12 Insolvency Act Section 34 Piercing Corporate Veil Reckless Trading

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 23 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Burley Appliances Limited

Plaintiff

Patricia Anne Grobbelaar N.O.

Defendant

Futek Systems CC

Defendant

Duncan Swinburne Bain Marshall

Defendant

Procedural Posture

Civil Trial / Exception to Special Plea of Prescription

Legal Issues

  1. 1 Whether the claims under sections 64 and 65 of the Close Corporation Act and section 34(3) of the Insolvency Act are subject to prescription under the Prescription Act.
  2. 2 Whether the debt arises only upon a court declaration or from the conduct giving rise to liability under the Close Corporation Act.
  3. 3 Whether the exception to the special plea of prescription should be upheld.

Ratio Decidendi

The court held that the statutory remedies created by sections 64 and 65 of the Close Corporation Act are subject to the ordinary rules of prescription under the Prescription Act. The debt arises when the conduct giving rise to liability occurs and the creditor has knowledge of the debtor and the facts, not only when a court declaration is made. The arguments that prescription only commences upon a court order were rejected, as this would allow creditors to indefinitely postpone prescription by inaction. The exception to the special plea of prescription was dismissed, confirming that the claims are subject to prescription and that the period runs from the accrual of the cause of action.

Court Disposition

Exceptions to the special plea of prescription are dismissed with costs.

Orders

  • The exceptions are dismissed with costs.