Van Zyl NO v Nedbank Limited (13878/05) [2008] ZAGPHC 47 (26 February 2008)

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IN THE HIGH COURT OF SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

CASE NO: 13878/05

JUDGMENT DELIVERED: 26 FEBRUARY 2008

REPORTABLE

IN THE MATTER BETWEEN:

CHRISTOPHER PETER VAN ZYL N.O. APPLICANT

AND

NEDBANK

LIMITED RESPONDENT

JUDGMENT

POSWA, J

[1] The applicant as the liquidator of Valuefin (Propriety) Limited (in liquidation) (“Valuefin”), applies in terms of section 26(1) of the Insolvency Act, No 24 of 1936 (“the Act”) for an order setting aside certain transactions concluded between the Respondent and Valuefin prior to the liquidation of Valuefin.

[2] The applicant applies to have set aside three transactions, collectively referred to as “the impinged transactions”. They are:

a guarantee dated 19 September 2000, in terms whereof Valuefin bound itself, jointly as well as severally, as surety and co-principal debtor in solidum for the payment on demand of all or any sum or any sums of money which Paradigm Capital Holdings Limited (“Paradigm Holdings”), then or from time to time thereafter might owe to the respondent, in respect of, inter alia, any indebtedness of Paradigm Holdings arising from money already advanced or thereafter to be advanced or by virtue of any individual or joint suretyship, guarantee or bond or otherwise (“the September 2000 suretyship”);

a deed of pledge and cession dated 5 October 2000, in terms whereof, inter alia, Valuefin ceded, assigned and made over to the respondent in securitatem debiti all its right(s), title and interest in and to and pledged and delivered to the respondent, inter alia, all and any claims which then existed or may thereafter come into existence in favour of Valuefin, in respect of all debts then owing or which thereafter may become owing to Valuefin (“the October 2000 pledge”);

a reversionary cession and pledge, dated 26 February 2001, in terms whereof, inter alia, Valuefin ceded, pledged and delivered to the respondent all reversionary rights and all remaining right(s), title and interest in and on the proceeds, the subject matter and the remedies in case of breach of any rental and/or subscription agreement concluded between Valuefin and third parties and in terms of which rental and/or a subscription fee of any nature is payable and which had been pledged and/or a subscription fee of any nature is payable and which had been pledged and/or ceded previously as security for the debts of Valuefin (“the February 2001 pledge”).

The two securities (of 5 October, 2000 and 26 February, 2001, respectively) are ancillary to the guarantee of 19 September, 2000.

[3] Valuefin was placed under a provisional winding-up order on 15 June 2001 and under a final winding-up order on 24 July 2001. On 24 July 2001 the applicant was appointed as the provisional liquidator of Valuefin. On 17 October 2001 the applicant was appointed as the liquidator of Valuefin.

POINTS IN LIMINE

[4] In its answering affidavit the respondent raises the following three points in limine, viz.

Any claim which the applicant may have had to set aside any impugned transaction(s) as claimed in the notice of motion has become prescribed in terms of the Prescription Act, No 68 of 1969 (“the Prescription Act”);

The basis upon which the applicant bring this application, i.e. that each of the impugned transactions constituted a disposition of property not made for value within s 26 of the Act, is incorrect;

There are material disputes of fact in regard to a number of issues that are, in themselves, material to the determination of the relief claimed by the applicant; such disputes were known by the applicant at the time of the launching of the application or were reasonably foreseeable and rendered motion proceedings inappropriate.

[5] Regarding disputes of fact, the respondent submits that they render the relief claimed incapable of determination in motion proceedings. The very facts necessary to determine whether or not the respective dispositions were not for value are in dispute, so the respondent submits.

[6] The applicant deals with all three points in limine, in turn, as I shall more fully discuss.

HISTORY OF THE APPLICATION:

[7] The following dates, which are common cause, are of particular relevance with regard to prescription:

On 15 June 2001 Valuefin was placed under provisional winding-up order;

On 18 June 2001 the applicant was appointed the provisional liquidator of Valuefin;

On 24 July 2001 Valuefin was placed under a final winding-up order;

On 5 September 2001 an enquiry into the affairs of Valuefin was convened in terms of section 417 of the Companies Act, 1973 (“the Companies Act”), [“the enquiry”]. The enquiry continued on 6 and 7 September 2001,

On 17 October 2001 the applicant was appointed the liquidator of Valuefin;

On 15 November 2001 the second meeting of creditors of Valuefin was held before the Magistrate Wynberg. At this meeting the respondent submitted four claims, all of which were duly proved and admitted;

On 15 November 2001 documents recording the impugned transactions, i.e;

the September, 2000 suretyship;

the October, 2000 pledge; and

the February, 2001 pledge 2001, he made the respondent, who was to be subpoenaed, to produce relevant documents.

were all submitted by the respondent to the applicant in support of its aforesaid claims.

On 20 November 2001 the applicant addressed letters to the respondent advising the respondent that each of its aforesaid claims had been proved and that any dividend accruing on such claims would be paid to the respondent only after a liquidation and distribution account had been confirmed by the Master;

On 15 November, 2001, the second granting of creditors was postponed to 21 November. It is common cause that, the respondent produced such documents at the hearing on 21 November, 2001. Thus equally, the applicant was in possession of the respondent’s claims, documents recording the impugned transactions, and the respondent’s documentation containing full and detailed information in regard to the respondent’s dealings with Valuefin and the Paradigm Group.

The present application was issued on 29 April 2005, three years, five and a half months after the date on which the respondent’s claims were lodged, and three years, ten and a half months from the date of the provisional winding-up of Valuefin

On 15 November 2001, at the latest, the applicant was placed in possession of the documents relating to the impugned transactions as well as a range of documentation providing full and detailed information in regard to the respondent’s dealings with Valuefin and the Paradigm Group.

PRESCRIPTION

[8] The applicant denies that the claims he seeks to pursue have prescribed, notwithstanding the expiration of a period in excess of three years, before the launching of the present application, from the date of the liquidation of Valuefin. (He submits that the present application does not constitute a claim for a “debt”, as envisaged in the Prescription Act. It is the exercise of a specific power granted to a liquidator and, accordingly, is not susceptible to the provisions of the prescription Act. The applicant’s contention in this regard is evidently founded on the judgment in Barnard and Lynn NNO v Schoeman and Another, in which Nicholson, J held that a debt, as envisaged in s 29 of the Act, read with s 340(1) of the Companies Act, No. 61 of 1973 (the Companies Act), is not a debt, in the normal sense, but a specialised right of action bestowed on a liquidator, arising out of the statutory functions of a liquidator, and that such debt only comes into being once a court pronounces upon the disposition. The applicant further submits that it relies on the remedy provided by s 32 of the Act, for setting aside a disposition of property under s 26 thereof, which is a right vested in the applicant by virtue and upon his appointment.

PRESCRIPTION ACT, NO 68 OF 1969

The relevant sections of s15 of the Prescription Act read:

“15(1) The running of prescription shall, subject to the provisions of subsection (2), be interrupted by the service on the debtor of any process whereby the creditor claims payment of the debt.

15(2) Unless the debtor acknowledges liability, the interruption of prescription in terms of subsection (1) shall lapse, and the running of prescription shall not be deemed to have been interrupted, if the creditor does not successfully prosecute his claim under the process in question to final judgment or if he does so prosecute his claim but abandons the judgment or the judgment is set aside.

15(3) If the running of prescription is interrupted as contemplated in subsection (1) and the debtor acknowledges liability, and the creditor does not prosecute his claim to final judgment, prescription shall commence to run afresh from the day on which the debt acknowledges liability or, if at the time when the debtor acknowledges liability or at any time thereafter the parties postpone the due date of the debt, from the day upon which the debt again becomes due.

16(6) For the purposes of this section, “process” includes a petition, a notice of motion, a rule nisi, a pleading in reconvention, a third party notice referred to in any rule of court, and any document whereby legal proceedings are commenced.”

[9] Although the applicant suggests that he relies on the interpretation given by Nicholson, J, only in passing, there is no doubt in my mind that that interpretation plays a major role in the applicant’s adoption of his stance in this application. He, for instance, understandably, vigorously opposes any attempts by the respondent to demonstrate that the applicant is, in respect of this application, in the position of a creditor vis a vis the respondent. He similarly spent a lot of time and effort around the question of what is or is not a “debt”. He does not merely content himself with his submission that he, by virtue of being Valuefin’s liquidator, is the respondent’s debtor. It does appear to me, therefore, that the applicant relies on both his assertions that, for instance I have stated, he is merely the respondent’s debtor, on the one hand, and, on the other hand, that, as a matter of law, a liquidator who operates in terms of section 26(1) of the Act, is not subject to the provisions of the Prescription Act.

[11] Apart from resisting the prescription aspect of the respondents point in limine, the applicant spends a lot of time demonstrating that the impugned securities are dispositions without value. With regard to the respondent’s submission that there are disputes of fact, the applicant submits that there are, in fact, no material disputes of fact, such as would preclude him from obtaining the relief he seeks. [Page 4 of the AA]

[12] I find it convenient, at this stage, to set out the various statutory provisions which are relied upon by one party or the other in these proceedings or which, in my view, are relevant in determining what the correct decision should be.

That disposition without value.

Section 26(1) of the Act reads:

“26. Disposition without value; -

Every disposition of property would made for value may be set aside by the court if such disposition was made by an insolvent –

more than two years before the sequestration of his estate, and it is proved that, immediately after the disposition was made, the liabilities of the insolvent exceeded his assets.

within two years of the sequestration of his estate, and the person claiming under or benefited by the disposition is unable to prove that, immediately after the disposition was made, the assets of the insolvent exceeded his liabilities;

Provided that if it is proved that the liabilities of the insolvent at any time after the making of a disposition exceeded his assets by less than the value of the property disposed of, it may be set aside only to the extent of such excess.”

Voidable Preferences

Although it is common cause between the parties that the applicable section of the Act is section 26(1), I find it convenient to include section 29 of the Act, as it was the operative section in Bernard Lynn NO (supra). It reads:

“29. Voidable Preferences –

Every disposition of his property mark by a debtor not more than six months before the sequestration of his estate or, if he is deceased and his estate is insolvent, before his death, which has had the effect of preferring one of this creditors above another, may be set aside by the Court if immediately after the making of such disposition the liabilities of the debtor exceeded the value of his assets, unless the person in whose favour the disposition was made proves that the disposition was made in the ordinary course of business and that it was not intended thereby to prefer one creditor above another.”

Proceedings to Set Aside Improper Dispositions

The procedure for setting aside of an improper disposition, by a liquidator, is set out in section 32 of the Act, which reads:

“32. Proceedings to set aside improper disposition –

(1) (a) Proceedings to recover the value of property are arrived in terms of section 25(4), to set aside any disposition of property under section 26, 29, 30 or 31, of the recovery of compensation or a penalty under section 31, will be taken by the trustee.

(b) If the trustee fails to take any such proceedings then it will be taken by any creditor in the name of the trustee upon his indemnifying the trustee against all costs thereof.

(2) In any such proceedings the insolvent may be compelled to give evidence on a subpoena issued on the application of any party to the proceedings or he may be called by the court. When giving such evidence he may not refuse to answer any question on the ground that the answer may tend to incriminate him or on the ground that he is to be tried on the criminal charge and may be prejudiced at such a trial by his answer.

When the Court sets aside any disposition of property under any of the said sections, it shall declare the trustee entitled to recover any property eliminated under the said disposition or in default of any such property the value thereof at the date of the disposition or on the date on which its disposition is set aside, whichever is higher.” (Emphasis added.)

Section 35 of the Insolvency Act reads:

Section 45 of the Insolvency Act reads partly as follows, in respect of the duties of a trustee:

“25. Trustee to examine claims-

After a meeting of creditors the officer who presided thereat shall deliver to the trustee every claim against the insolvent estate at that meeting and every document submitted in support of the claim.

The trustee shall examine all available books and documents relating the insolvent estate for the purpose of ascertaining whether the estate in fact owes the claimant the amount claimed.

If the trustee disputes a claim after it has been proved against the estate at a meeting of creditors, he shall report the fact in writing to the master and shall state in his report his reasons for disputing the claim. Thereupon, the Master may confirm the claim, or he may, after having afforded the claimant an opportunity to substantiate his claim, reduce of disallow the claim, and if he has done so, he shall forthwith notify the claimant in writing: Provided that such deduction or disallowance shall not debar the claimant from establishing his claim by an action at law, but subject to the provisions of section 75.”

It is common cause between the parties that, to the extent that prescription is or may be applicable, it is governed by the provisions of the Prescription Act and that the relevant provision is section 11(d), where prescription grounds after the expiration of a period of three years. As already stated in this judgment, it is also common cause amongst the parties that the current application was brought long after the period of three years.

(6) For the purposes of this section, ‘process’ includes a petition, a notice of motion, a rule nisi, a pleading in reconvention, a third party notice referred to in any Rule of Court and any document whereby their proceedings are commenced.”

(Emphasis added.)

What is a ‘debt’?

[13] In paragraph 7 of his Heads of Argument, Mr Loxton, on the applicant’s behalf, states the following:

“7. Applicant’s response in his replying affidavit is twofold. He denies in the first instance that the present application constitutes ‘a debt’ as envisaged in the Prescription Act. Secondly and in any event, he disputes that he could reasonably have brought this application immediately after the second meeting of creditors (i.e. in November 2001), and thus that prescription should be regarded as having comments running at that time.”

[14] It is true that, in his replying affidavit, the applicant justifies his failure to bring the application earlier (paragraph 17-40 of the replying affidavit). Whilst I am aware that, in his justification of his failure to bring the application within three years of his appointment, the applicant is responding to the respondent’s point in limine, it seems to me that the applicant’s stance in the replying affidavit, in this regard, is a significant departure from his attitude in the founding affidavit.

It seems appropriate to have the following in mind, when dealing with the stance adopted by the applicant in his replying affidavit;

At the second meeting of creditors of Valuefin, on 15 November 2001, the respondent submitted, against Valuefin, the following claims a claim for R995,67 (in respect of monies loaned and advanced by the respondent to Valuefin (“CVZ7”); a claim for R7 825 252,10 (“CVZ8”); a claim for R3 017 069,30 (“CVZ29”); and a claim for R6 522 583,29 (“CVZ10”). [Paras 12.1-12.4 FA, PP7-8.]

The claim for R995,67 is described by the applicant as being “non-contentious” [Para 10, FA] and is, as such, not contested.

In not resisting the claim for R995,67, the applicant drew a distinction between it and the impugned transactions on the basis that the former “was based on a direct liability on the part of Valuefin to the respondent for monies loaned and advanced to it”, whereas “the three remaining claims were ancillary obligations allegedly predicated on the ‘Guarantee (incorporating session of slow funds)’, dated 19 September 2000 … The said guarantee … annexure ‘CVZ3’, contained a recordal to the effect that it was given by Valuefin in consideration of the respondent: ‘allowing Paradigm Capital Holdings Limited … banking facilities subject to the terms and conditions hereinafter set out.’

In paragraphs 14-21 of the founding affidavit, the applicant deals with the alleged session, in detail and attacks its validity. He points out, inter alia, that, whereas the applicant attacks the validity of all three impound transactions the validity of the February 2001 pledge (“CVZ10”) ‘is even more remote to Valuefin than the other two’ (Para 16 FA), in that it is not in favour of Paradigm Capital Holdings but is, instead, in favour of Aerial Empire and was concluded before Valuefin, whose operations commenced only on 28 March 1998, came into existence. (Paras 16 and 21 FA).

Whilst the applicant’s submissions in this regard are not without substance, the respondent’s submissions in response thereto are, in my view, equally not without substance. This forms part of the area of disputed facts that are part of the applicant’s problem in this matter. If annexure “CVZ3”, the guarantee purporting to incorporate the session of all loan funds (Para 13 FA) is valid and it truly covers all three impugned transactions, the impugned transactions should stand or fall on the basis as to whether it is one made without value or not. In this regard the respondent responds as follows:

’49.2 As appears from annexure ‘CVZ3’ Valuefin bound itself to the respondent jointly as well as severally as surety and competence by the debtor, for the payment of all or any sums of money which Pam Holdings owed to the respondent, whether such indebtedness be incurred by Paradigm Holdings in its own name and whether solely or jointly with another or others or in partnership or otherwise, and whether such indebtedness should arise from money already advanced or thereafter to be advanced by the respondent to Paradigm Holdings or by virtue of any individual or joint suretyship, guarantee or bond or purchase to any session or assignment from third parties or otherwise howsoever.

The applicant’s response, in his replying affidavit, endorses, in my view, the question of the existence of the disputed facts. It states:

‘75.1 In the first place, while the benefit provided for Valuefin in guaranteeing the indebtedness of Paradigm Capital Holdings to the respondent is difficult in itself comprehend, it is impossible to conceive of any value accruing to Valuefin in its guaranteeing a debt of a company other than Paradigm Capital Holdings to the respondent and which debt proceeded Valuefin’s very existence.”

From my view of the facts, that dispute cannot be resolved on the papers. Mr Loxton did not, during his address, suggest that Mr Burger’s summary of the effect of “CVZ3”, if it is valid, is similar in the answering affidavit.

I also am of the view that the following response by the applicant, in his replying affidavit, does not help resolve the question as to whether annexure “CVZ3” is valid and the extent to which it affects the determination of the question whether or not, in this specific regard, the February 2001 pledge is in favour of also Paradigm Capital Holdings and not just Aerial Empire,:

“75.2 In the second place the authority necessary in order for Valuefin to incur the liability to the respondent on which ‘CVZ10’ is based (i.e. the guarantee in respect of the debts of Arial Empire (Pty) Ltd) simply does not appear from the resolution on which the respondent relies (i.e. annexure ‘CVZ11’.) I submit that in fact the antitheses is clear on any reading of the resolution, restrictive or otherwise.”

Without seeking to make a decision on this aspect, I am of the prima facie view that, if annexure ‘CVZ3’ is valid, it is not necessary that Aerial Empire, for instance, be mentioned in annexure ‘CVZ 11’.

Having admitted the claim for R995.67, the applicant “had misgivings regarding the remainder of the respondent’s claims paid on the official guarantee of 19 September 2004 (it is common cause that that should be 2000) as well as the securities ancillary to such guarantee) (Para 27 FA) and ‘decided to treat such claims for the time being as concurrent – no dividend being payable in terms of the fifth account to concurrent creditors. He points out that the respondent did not object to the treatment of these suretyship claims “as concurrent claims” (Para 28 FA).

The following account of the applicant’s process of reasoning, regarding the impugned transactions and the question of prescription, is important;

“29. I have, however, now reached a state in the winding up of Valuefin where;

I have paid all those creditors whom I consider to be secured and preferred creditors.

I presently have at my disposal free resialue you in the amount of approximately R6 million for the purpose of declaring a dividend to concurrent creditors.

In addition, I expect to collect further substantial amounts (of some R6 million to R8 million) over time which will also become available for distribution to concurrent creditor (less the usual realisation costs.)

It is in this context that I have applied my mind as to how to treat the remaining claims of the respondent, and, in particular, whether:

to treat them as secured claims in which case the entire free residue (both presently in my possession and still to be collected), less realisation and other costs, will be awarded to the respondent.

to treat the claims as concurrent claims in which case the respondent will share in the aforesaid concurrent dividents pro rata with other concurrent creditors.

to dispute the said claims in their entirety

31. On consideration of the said claims, I have reached the conclusion that neither the claims nor the securities they relied upon by the respondent in respect thereof should be included in the next i.e. (sixth) Liquidation and Distribution Account in the light of the following facts and circumstances:

The transactions (as referred to above) on which the claims alleged by Valuefin (in the amounts of R7 824 252,10; R30 187 069,30 and R6 522 583,20, respectively) are predicated – as well as the aforementioned securities on which the respondent relies in respect of such claims – fall to be set aside as dispositions without value in terms of section 26(1) of the Insolvency Act, 24 of 1906 (as amended).

The respondent appears to have justified its alleged entitlement to obtain the aforesaid guarantees as securities from Valuefin on the basis that they were concluded by Valuefin at the time when the latter was a wholly owned subsidiary of Paradigm Capital Holdings. In truth and in fact, however, this was – at no stage – the case.”

In subparagraph 31.3 of the founding affidavit, the applicant elaborates on its attack on the resolution, annexure “CVZ 11”, which I have already dealt with.

[14] In paragraphs 32 and 33 of the founding affidavit the applicant says the following:

“32. I have been advised and accordingly submit that it is insufficient for me, in the present case, merely to object to the inclusion of the aforesaid claims in the proposed sixth Liquidation and Distribution Account. Instead – so I am advised – I am obliged to apply substantively to the above Honourable Court for an order setting aside the guarantees and securities referred to above on which its claims “being annexures ‘CVZ 8’ ‘CVZ 29’ and ‘CVZ 10’ predicated, in terms of sections (sic) 26(1) of the Insolvency Act as dispositions made without value.

34. In the event, I seek an order setting aside the aforesaid guarantee dated 19 September 2000, on which the respondent’s claims are based, as well as the securities (dated 5 October 2000 and 26 February 2001), given pursuant to such guarantees in terms of section 26(1) of the Insolvency Act on the basis that: -

34.1 the said guarantee and securities were concluded by Valuefin within two years of its liquidation of Valuefin as contemplated in section 26(1)(b) of the Insolvency Act;

(a) in order for an action to interrupt prescription, the process must be one whereby payment of the debt is claimed;

(b) because the only way in which the defendant’s debt could be discharged was for it to pay money, and thus interrupt prescription, the claim had to sound in money;

(c) the plaintiffs had not claimed money but had merely sued for a declarator;

(e) if the plaintiffs succeed in claiming their relief, the declarator could never “become executable”, as required by section 15(4) of the Prescription Act; therefore

(f) the summonses in question were not for “payment of the debt” within the meaning of section 15(1) of the Prescription Act.

(a) the current action was one to enforce fulfilment of the defendant’s obligation,

(b) an order in the plaintiff’s favour and binding on all the parties and the issue of liability would therefore by res judicata;

(c) the plaintiffs were seeking to enforce the same or substantially the same right as the defendant alleged had prescribed, i.e. “the right to an indemnity is the same or substantially the same right as the right to be paid pursuant to the indemnity” (Emphasis added). (328B);

(d) section 15(1) of the Prescription Act is wide enough to include a process in which the creditor claims performance of an obligation; consequently;

(e) a declaratory order, if granted, will be final and will compel the defendant to perform by paying; and therefore,

(f) the order “will be executable”, as required by s 15(4) of the Prescription Act.

“However, that is not the end of the matter. Section 15 of the Prescription Act must be interpreted having regard to the purpose of the institution of prescription and in the light of the legal provisions regarding interruption as they have developed until now. In this regard, I draw upon the explanation by professor JC De Wet in his 1967 memorandum on the ‘Law of Prescription’ contained in his ‘Opuscula Miscellanea’, a collection of lectures and opinions published in 1979”. (328I-J)

He pointed out that Professor De Wet was the author and draftsman of the present Prescription Act. Professor De Wet writes, inter alia, the following in respect of prescription: ‘Die hele doel van verjaring is om ‘n einde te maak aan ‘n toestand van onsekerheid wat deur tydsverloop meegebring word.” (329D).

I understand that to mean that the whole purpose of prescription is to make an end to the state of uncertainty that is created by passage of time, which reasoning found approval, as pointed out by Howie J, in Murray and Roberts (Cape) (Pty) Ltd v Uppington Municipality 1984 (1) SA 571 (A), at 578F-H. The learned judge then points out that the following, at 329D/E:

“It has been said that prescription wasn’t reduced, not an order to assist the debtor, but in disapproval of negligence; Wessels Law of Contract (op cit para 28378.) Or, put another way, it is there to penalise inaction: Mazibuko v Singer 1979 (3) SA 258 (W) at 266 (A)”

[39] Having regard to the fact that professor De Wet had remarked that the legislature cannot, when enacting a statute, legislate for every eventuality but will merely give guidelines, Howie, J pointed out that, in keeping with that approach, the present Prescription Act does not have a definitions section. Consequently so points the learned judge out, a word like “debt” has different shades of meaning in, for example sections 10, 12(1), 12(3) and 15(1) respectively. In s 10, which lays down that a debt is extinguished by lapse of the prescriptive period, ‘debt’ means the obligation in terms of which the debt is due. In s 12(1) the expression ‘debt is due’ means performance of the debt is due. In s 12(3) ‘debt arises’ means the obligation to pay or perform comes into existence. In 315(1) the word ‘debt’ taken literally means money. However, where ‘debt’ is something else other than money the word must mean that which is due i.e. the product of performance. The provisions of the Act and section 15 in particular, are clearly not confined to monetary debts Benson and Another v Walters and Another 1984 (1) SA 73 (A) at 22D-E). Consequently, ‘debt’ in the present context must bear a wide and general meaning: (Evins v Shield Insurance Co Ltd 1979 (3) SA on 1136 (W) at 1141F-G; Oertel en Andere NNO v Direkteur van Plaaslike Bestuur en Andere 1983 (1) SA 354 (A) at 370B.” The learned judge further says:

The learned Judge goes on to say:

‘What is important, however, is that the wide and general meaning of ‘debt’ is a pointer to the appropriate interpretative approach to section 15 in the context of the Act as a whole. Once it is clear that ‘debt’ has this loose connotation, it follows that the same applies to the word ‘payment’. Accordingly, one starting point is that the language to be interpreted has an inherent elasticity. To be taken together with that is the consideration already mentioned that the legislative draftsman has not attempted in this particular statute to legislate exhaustively for all eventualities.” (330H-G)

[40] With regard to “a proper construction of section 15(1) of the Prescription Act,” Howie J points out that s 6(1)(b) of the 1943 Prescription Act: