Leipsig v Bankorp Ltd. (377/92) [1993] ZASCA 198; 1994 (2) SA 128 (AD); [1994] 2 All SA 150 (A) (1 December 1993)

Leipsig v Bankorp Ltd. (377/92) [1993] ZASCA 198; 1994 (2) SA 128 (AD); [1994] 2 All SA 150 (A) (1 December 1993)

The court held that the filing of a claim against a company in liquidation creates an impediment to the running of prescription under section 13(1)(g) of the Prescription Act. However, this impediment ceases to exist upon the Master's confirmation of the final liquidation and distribution account, which brings finality to the claim. After this confirmation, prescription resumes and will be completed one year thereafter. In this case, the final account was confirmed on 16 March 1989, so prescription was completed on 16 March 1990. The respondent's summons was served after this date, and the claim was therefore prescribed. The appeal was upheld and the respondent's claim dismissed.

Citation
[1993] ZASCA 198
Parties
Appellant: Ronald Conrad Leipsig; Respondent: Bankorp Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
1 December 1993
Case Number
377/92
Procedural Posture
Civil Appeal / Appeal From the Witwatersrand Local Division
Outcome
Appeal upheld; respondent's claim dismissed with costs.
Judges
Hoexter, Nestadt, Eksteen, Nicholas, Harms
Legal Topics
Extinctive Prescription, Suretyship, Liquidation Claims, Prescription Act Section 13
Civil Procedure Extinctive Prescription Suretyship Liquidation Claims Prescription Act Section 13

Case Brief

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Parties

Ronald Conrad Leipsig

Appellant

Bankorp Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From the Witwatersrand Local Division

Legal Issues

  1. 1 Whether the respondent's claim against the appellant as surety was prescribed under section 13 of the Prescription Act.
  2. 2 When does the impediment to prescription created by filing a claim against a company in liquidation cease to exist under section 13(1)(g) and (i)?

Ratio Decidendi

The court held that the filing of a claim against a company in liquidation creates an impediment to the running of prescription under section 13(1)(g) of the Prescription Act. However, this impediment ceases to exist upon the Master's confirmation of the final liquidation and distribution account, which brings finality to the claim. After this confirmation, prescription resumes and will be completed one year thereafter. In this case, the final account was confirmed on 16 March 1989, so prescription was completed on 16 March 1990. The respondent's summons was served after this date, and the claim was therefore prescribed. The appeal was upheld and the respondent's claim dismissed.

Court Disposition

Appeal upheld; respondent's claim dismissed with costs.

Orders

  • Plaintiff's claim is dismissed with costs.