Van Reenen v Santam Ltd (623/12) [2013] ZASCA 74; 2013 (5) SA 595 (SCA) (29 May 2013)
- Citation
- [2013] ZASCA 74
- Status
- Judgment
- Jurisdiction
- South Africa
- Court
- Supreme Court of Appeal
- Panel
- Maya, Leach, Theron, Willis, Meyer
- Case number
- 623/12
More details
- Court
- Supreme Court of Appeal
- Panel
- Maya, Leach, Theron, Willis, Meyer
- Case number
- 623/12
On this page
Professional case brief
Research organized from the available case record
01
Holding and result
The court held that the debt claimed under section 156 of the Insolvency Act becomes due when the cause of action arises, not when liability is established. The insurer's opposition to the third party action did not amount to an acknowledgement of liability as contemplated by section 14(1) of the Prescription Act, and therefore did not interrupt the running of prescription. The appeal was dismissed, confirming that prescription had run its course and the claim was time-barred.
Court disposition
Appeal dismissed; prescription not interrupted.
Orders
- The appeal is dismissed with costs.
- The claim is declared to have prescribed.
02
Material facts
Parties
Lourens Wepener Van Reenen
AppellantSantam Limited
Respondent03
Procedural history
Posture
Civil Appeal / Appeal From Lower Court Judgment
04
Questions and positions
Legal issues
- 01
When does a 'debt' claimed under section 156 of the Insolvency Act become due for purposes of section 12(1) and (3) of the Prescription Act?
- 02
Does an insurer's opposition to a third party's action against a liquidated insured constitute an acknowledgement of liability and interrupt prescription under section 14(1) of the Prescription Act?
Party arguments
- Applicant
- The appellant argued that the debt claimed in terms of section 156 of the Insolvency Act became due only when the insurer's liability was established, and that Santam's conduct in opposing the third party action amounted to an acknowledgement of liability, thereby interrupting prescription under section 14(1) of the Prescription Act.
- Respondent
- Santam contended that the debt became due when the cause of action arose, not when liability was established, and that its opposition to the third party action did not constitute an acknowledgement of liability for the purposes of interrupting prescription under section 14(1) of the Prescription Act.
05
Court’s reasoning
Legal principles
- 01
Gericke v Sack 1978 (1) SA 821 (A) at 828B
Prescription begins to run when the debt becomes due, which is when the creditor acquires the right to claim payment, not when the claim is established.
- 02
Deloitte Haskins & Sells Consultants (Pty) Ltd v Bowthorpe Hellerman Deutsch (Pty) Ltd [1990] ZASCA 136; 1991 (1) SA 525 (A) at 532G-I
An acknowledgement of liability that interrupts prescription must be clear and unequivocal.
- 03
Insolvency Act 24 of 1936; Supermarket Leaseback (Elsburg) (Pty) Ltd v Santam Insurance Ltd [1990] ZASCA 131; 1991 (1) SA 410 (A) at 411H
In winding-up proceedings, the provisions of insolvency law apply mutatis mutandis unless otherwise provided.
06
Ratio, limits and disposition
Ratio decidendi
The court held that the debt claimed under section 156 of the Insolvency Act becomes due when the cause of action arises, not when liability is established. The insurer's opposition to the third party action did not amount to an acknowledgement of liability as contemplated by section 14(1) of the Prescription Act, and therefore did not interrupt the running of prescription. The appeal was dismissed, confirming that prescription had run its course and the claim was time-barred.
Obiter and limits
- The court noted that the relevant insurance policy clause allows the insurer to conduct proceedings in the name of the insured without incurring liability or prejudice to its rights.
- The court observed that the mere conduct of a defence by an insurer does not constitute an unequivocal acknowledgement of liability for prescription purposes.
Court disposition
Appeal dismissed; prescription not interrupted.
- The appeal is dismissed with costs.
- The claim is declared to have prescribed.
Source and reliance status
Supreme Court of Appeal
This page organises the available record for research. Confirm quotations, current status, and subsequent treatment against the official source before relying on the case.
Judgment reading view
Judgment text
The complete available source text.
Supreme Court of Appeal
Judgment
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
REPORTABLE
Case No: 623/12
In the matter between:
LOURENS WEPENER VAN REENEN .................................................Appellant
and
SANTAM LIMITED .............................................................................Respondent
Neutral citation: Van Reenen v Santam Ltd (623/12) [2012] ZASCA 74 (29 May 2013)
Coram: MAYA, LEACH, THERON, WILLIS JJA and MEYER AJA
Heard: 21 May 2013
Delivered: 29 May 2013
Summary: Prescription Act 68 of 1969 – when ‘debt’ claimed in terms of 156 of the Insolvency Act 24 of 1936 becomes due under s 12(1) and (3) of the Prescription Act – whether insurer’s opposition of third party’s action against liquidated insured constitutes acknowledgement of liability and interrupts running of prescription in terms of s 14(1) of the Prescription Act.
1Gericke v Sack 1978 (1) SA 821 (A) at 828B.
2The Master v I L Back & Co Ltd and others 1983 (1) SA 986 (A) at 1004G.
3Ibid at 1004; Deloitte Haskins & Sells Consultants (Pty) Ltd v Bowthorpe Hellerman Deutsch (Pty) Ltd [1990] ZASCA 136; 1991 (1) SA 525 (A) at 532G-I; Benson and another v Walters and others 1984 (1) SA 73 (A) at 82.
4The section reads: ‘In the winding-up of a company unable to pay its debts the provisions of the law relating to insolvency shall, in so far as they are applicable, be applied mutatis mutandis in respect of any matter not specially provided for by this Act.’ See Supermarket Leaseback (Elsburg) (Pty) Ltd v Santam Insurance Ltd [1990] ZASCA 131; 1991 (1) SA 410 (A) at 411H.
5Coetzee v Attorneys’ Insurance Indemnity Fund 2003 (1) SA 1 (SCA) paras 19-20.
6See also Unitrans Freight (Pty) Ltd v Santam Ltd 2004 (6) SA 21 (SCA) paras 7 and 8; Le Roux v Standard General Versekeringsmaatskappy Bpk 2000 (4) SA 1035 (SCA) at 1046J-1047G; Canadian Superior Oil Ltd v Concord Insurance Co Ltd (formerly INA Insurance Co Ltd 1992 (4) SA 263 (W) at 273H-274B; Woodley v Guardian Assurance Co of SA Ltd 1976 (1) SA 758 (W) at 759E-H.
7Gypsum Industries Ltd v Standard General Insurance Co Ltd 1991 (1) SA 718 (W) at 722D.
8David Trust and others v Aegis Insurance Co Ltd and others [2000] ZASCA 108; 2000 (3) SA 289 (SCA) para 2.
9Deloitte Haskins & Sells Consultants (Pty) Ltd v Bowthorpe Hellerman Deutsch (Pty) Ltd [1990] ZASCA 136; 1991 (1) SA 525 (A) at 532G-I.
10Markham v South African Finance & Industrial Co. Ltd 1962 (3) SA 669 (A) atb676F; Pentz v Government of the RSA 1983 (3) SA 584 (A) at 594A-D.
11The relevant part of the clause, loosely translated from Afrikaans, provides:
‘(a) If any event takes place in respect of which a claim in terms of this policy was or is being instituted, the company and every person authorised by it may, without incurring any liability and without prejudice to the company’s right to rely on any condition of this policy
. . .
Take over and conduct in the name of the insured the defence or settlement of any claim and conduct for own benefit in the name of the insured any claim for indemnity or damages or otherwise and has full authority over the conduct of any legal proceedings and over the settlement of any claim. No admission, statement, offer, promise, payment or indemnity may be made by the insured without the written consent of the company.’
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