A RACE AGAINST PRESCRIPTION AND TIME LIMITATION STATUTES

It has become quite evident that many South African’s are unaware of, or poorly informed about their legal rights and what they should do in order to enforce those rights. This lack of knowledge can have detrimental effects to one’s case, with specific regards to the time limits imposed by the law. Therefore, in an attempt to shed light on this aspect of the law, the following article will provide a clear and concise analysis on the concept of prescription and the time-limitation statutes.

Now in simple, ‘the principle of extinctive prescription means that certain types of obligations (or debts) may prescribe or become unenforceable if not exercised within the prescribed time-limits’. This essentially means that the law places certain time limits on which one has to institute a claim. Upon lapse of this time-period, a person’s claim will become unenforceable, thereby losing one’s claim.

South African prescription laws are governed by two Prescription Acts, these are: The Prescription Act 1943 and the current Prescription Act of 1969 (hereinafter referred to as the ‘Act’). The important distinction between these two is that the 1969 Act will predominantly regulate the majority of cases of extinctive prescription, whereas the 1943 Act applies only to debts arising before 1 December 1970, being the date on which the 1969 Act came into force.

Prescription has been justified as a tool of providing legal certainty in the ordinary affairs of people as it helps to maintain peace in society by ensuring that disputes do not drag on indefinitely. Therefore, the imposition of prescription periods has been further justified on the basis of fairness and public policy.

It must be noted that prescription must be pleaded specially. This means that a court will not take notice of prescription out of mere impulse. Therefore, a judgment may still be granted even where a claim has prescribed, if prescription is not formally raised by the defendant. Thus, an undertaking not to raise prescription as a defence is not against the public interest or in conflict with the Act.

In terms of the Act, various debts have different prescription periods set by law. Section 11 of the Act provides:
(a)    ‘Thirty (30) years in respect of:
-          A debt secured by a mortgage bond;
-          A judgment debt;
-          Any debt in respect of tax levied in terms of any statute;
-          Any debt owing to the State regarding the prospecting for and mining of minerals or other substances.
 
(b)   Fifteen (15) years in respect of a debt owing to the state arising from a loan of money or the sale or lease of land, unless a longer period applies under (a) above.
 
(c)    Six (6) years in respect of a debt arising from:
-          A bill of exchange or any other negotiable instrument (i.e. a cheque or promissory note);
-          A notarial contract unless a longer period applies under (a) or (b) above;
 
(d)   Three (3) years in respect of any other debt, unless specifically provided for by statute.’

One should note that the time periods set out above may be interrupted by means of an acknowledgment by the debtor to the creditor of a liability to pay the debt, or by the service on the debtor by the creditor of any process (i.e. summons) whereby the creditor claims payment of the debt. This interruption of the time period in essence resets the clock of prescription.

It is further important to note that in certain circumstances, the Act provides for the suspension of prescription for a period of one year from the date on which the impediment ceases to exist. This important provision is set out in section 13 (1) of the Act, which provides for suspension to be applied in cases where the creditor is a minor, insane or under curatorship.

Thus, in conclusion, it is of paramount importance for people to do all they can in pursuit of a claim as soon as it arises in order to evade the application of prescription which will render their claim unenforceable. The prescription periods are dependent on the type of debt, or in some cases the type of debtor, therefore it is important for one to know their case and to seek legal assistance immediately. Anyone seeking to rely on prescription must remember that it must be pleaded specially, as the court will not take notice of the prescription out of mere impulse. This is a race against time, where failure to comply will result in a lost claim.
 

DIFFERENT MATRIMONIAL PROPERTY OPTIONS (FORMS OF A MARRIAGE)
 
Marriage in community of property
When the parties do not enter into an antenuptial contract prior to marriage they will be automatically married in community of property. In this form of marriage, the property, assets and liabilities belonging to both parties at the time of marriage or acquired any time thereafter become part of the joint estate. The parties own the assets and liabilities in equal undivided shares and they are joint administrators of the joint estate.
 
There are some advantages of a marriage in community of property

• This system rests on old time values that marriage is a partnership and as such can be conducive to a harmonious marriage relationship.
• It promotes both legal and economic equality of the spouses.

 
There are also some disadvantages of a marriage in community of property

• Insolvency of one of the spouses affects the total communal property. Where a risk of insolvency exists, it is not a desired system. This marriage regime cannot be recommended where one of the spouses owns a business or is exposed to financial risk.
• The system of equal powers could in cases where the temperament of one or both marriage partners is not collaborative, lead to conflict in the marriage.
• If the marriage is dissolved by death of one of the spouses the joint estate is administered which may cause financial stress on the other spouse.

 
Marriage out of community of property
 
There are two forms of a marriage out of community of property, with the accrual or without the accrual, but regardless of which one parties choose to enter into, the parties must conclude an antenuptial contract prior to their marriage. This contract needs to be executed (signed) by a notary who will also then register it at the deeds office. Just remember the only thing you need to do is sign the contract BEFORE you get married.
 
WHY CONSIDER THE REGISTRATION OF AN ANTENUPTIAL CONTRACT
 

• So that one spouse is not held liable for any debts that the other spouse may have incurred prior to the marriage or may incur during the marriage;
• So that’s spouses may protect assets, for example a house, from creditors, particularly if one of the spouses has a business of his or her own, and they would therefore want to be able to register the house in the name of the other spouse;
• One or both spouses have assets at the time of the marriage that they don't want to become part of a joint estate;
• So that parties are able to enter into transactions without having to obtain the consent of the other spouse;
• So that during the marriage each spouse retains control of his or her own property, builds up his or her own estate and each is responsible for his or her own debts.

 

 
MYTHS REGARDING ANTENUPTIAL CONTRACTS AND SOME IMPORTANT INFORMATION
 
An antenuptial agreement always favours one spouse
An antenuptial contract must be fair and equitable in the eyes of the law. It can protect a spouse where the couple decides to sacrifice one spouses career to raise a family without incurring the risks of a marriage in community of property.
 
An antenuptial contract does not mean that you don’t trust each other
An antenuptial agreement can only be created in a trusting atmosphere where both parties feel free to offer “full disclosure” regarding their assets and debts. These “intimate” revelations often open the door to resolving other important issues.
 
“An antenuptial contract is not needed as if we get divorced, it will be amicable”.
Some people feel that it is not necessary as even if they get divorced, the divorce will be amicable but in reality even the most loving marriages can end badly. There’s just no way to know. A well-drafted antenuptial agreement will help ensure that there are no emotionally and financially draining court battles in the future on the issues covered in the antenuptial contract.
 
An antenuptial contract is not just for the possibility of a divorce, it can protect spouses during a marriage as well.
An antenuptial contract doesn’t only protect a spouse in the event of a divorce it also protects spouses during the marriage from creditors of the other spouse. They can also be a useful estate planning tools. Without a antenuptial contract, your spouse may be able to invalidate your carefully thought out estate plan. An antenuptial contract can be especially helpful if you have children from a previous marriage or have family heirlooms that you want to keep in the family.
 
“Neither of us have a lot of assets now”
Hopefully, your future will be filled with success — individually and collectively. An antenuptial contract can ensure a fair division of the assets. Further if one spouse incorporates a business an antenuptial can help protect the assets of the marriage.

 
Antenuptial contracts are not only for the wealthy.
Antenuptial contracts are for ordinary people. Given the high legal fees and stress involved in a divorce, the frequency with which relationships end nowadays, as well as peoples  increasing financial sophistication and independence, a antenuptial  agreement can benefit just about everyone.
 
Antenuptial contracts seem to be unromantic
This may seem to be the situation but being able to sit down and discuss with your partner both of your future financial plans and expectations for the relationship will lead to a more solid foundation for your relationship than simply expecting your love to take care of everything.
 
Antenuptial contracts are not that expensive
Compared to the cost of an average wedding or an average divorce, antenuptial contacts represents value for money a bargain. The best way to think about it is like buying insurance at small one-time cost for something you never hope to use, but if you ever need it, you will be glad you have it, and it will save you a lot of money.

 
A slight warning and recommendation
 
PENSION INTERESTS
If parties are married in community of property or out of community of property with the inclusion of the accrual, upon a divorce, spouses have the right to claim half of the surrender value of the other spouses pension funds, retirement annuity funds, provident preservation fund or pension preservation fund.
HOWEVER to avoid this becoming a major dispute, should the instance arise, parties can exclude this claim in their antenuptial contract should they chose to marry out of community of property with the inclusion of the accrual.
 
PRIVACY AND YOUR ANTE NUPTIAL CONTRACT

 
Marrying with an ante nuptial contract with accrual requires that you declare your Net worth. Your antenuptial contract is a public document and is filed at the deeds office. Anyone who has your registered deeds number can access a copy of your antenuptial contract – HOWEVER we very seldom see this done (if even at all).
If you are concerned that you will need to declare an inception value (if you choose to marry with the accrual system) that will be available for all to see and you don’t want this, we have a legal solution that will protect your privacy and your estate.
In terms of Section 6 of the Matrimonial Property Act, the parties to an antenuptial contract may exclude a declaration of their inception (starting) values in their antenuptial contract. This would mean that the contract would not show the respective Net worth of each partner at the inception of your marriage.
To achieve this benefit though, the parties would sign an additional Section 6 statement, declaring the inception values of their respective estates, this document is not filed at the deeds but has to be kept only in the Notaries file. We can provide this service at an additional cost.

 
COSTING
Our office provides various different options for you when drafting your antenuptial contract but each includes a basic consultation to clear up any questions you may have. Please contact our offices via telephone or email for cost options. We offer the following options:

• Antenuptial contract consult and drafting during work hours at our offices
• Antenuptial contract consult and drafting after work hours / weekends at our offices
• Section 6 statement

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