# Regulatory Compliance Category > General Regulatory Compliance Forum >  Debt: How to claim prescription in practice and how to enter a special plea

## Citizen X

*Hi Guys,*
*1. I have resolved to make one post that is not theoretical but rather very practical and that will answer every single question you could possibly have on the Prescription Act 68 of 1969, claiming prescription in practice, entering a special plea of prescription and proving that you’ve claimed prescription*
*2. Find attached 5 documents, a FAQ doc, an example of a prescription claim letter, an example of a summons, an example of a special plea for prescription; and an affidavit(to prove that you’ve claimed prescription). In all cases modify these documents to cater for your individual case and details etc;*
*3. Let’s assume that a creditor/debt collector/ attorney contacts you to demand payment for a debt that is indeed prescribed(this letter is for debts that prescribe after 3 years! See FAQ for more information!), then do the following:-*
*3.1. Modify the attached prescription claim letter to include your individual details, send this letter as an email attachment to the creditor/attorney or debt collector, also send this letter by registered post(keep the slip!!);*
*3.2. If the creditor refuses to acknowledge the prescription claim, complete an affidavit to that effect and keep for your records. This will prove beneficial if the creditor still pursues the matter to court*
*How to enter a special plea of Prescription*


*
1. Regardless of whether you receive an ordinary summons or combined summons you still need to enter a notice of intention to defend with the clerk of courts and the plaintiff’s attorney;
*
*2.  A special plea is called  “a plea in abatement” which quite essentially destroys the entire action, here you not denying that the debt existed and that you did once upon a time in fairy land owed that money but merely that the debt is prescribed, the plaintiff has no cause of action! So use the attached ‘precedant,’(form) and modify it to your individual circumstances. You file this with the clerk of courts and the plaintiff’s attorneys*

*The magistrates court rules has undergone some major revamping in the past 3 years so be very careful about what you “google”. What I am providing you with is accurate and up to date as at today’s date.*
*The plaintiff can either sue out combined summons or summons in respect of debt claims. In either case you still need to file a notice of intention to defend!*
*What was previously known as , “summons commencing ordinary action,” has been replaced by “summons: claims in respect of debt or liquidated demand.*


*
Happy hunting! Take on Steve from XYZ bank, enforce your rights, the fact is that when the law is on Steve from xyz bank’s side Steve pursues you vigorously and without mercy. Steve from xyz bank don’t care whether you live or die!! So don’t let your rights be infringed and remember: “The biggest man you ever gonna see was once a baby!” Bob Marley
*
*Steve from xyz bank may be a very, very big tree BUT, “ If you are a big, big tree, we are a small axe, ready to cut you down, sharpened to cut you down!” Bob Marley*

*Steve from xyz bank may be a giant BUT David slew Goliath with a sling and a stone. Steve from xyz bank may be a huge army BUT Samson slew the philistines with a donkey’s jaw bone!! He said, Today, I made a donkey of you with a donkey’s jaw bone.”*

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Sadness (20-May-14)

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## Modise

Hi Vanash,
What is your personal email?

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## Citizen X

Hi Modise,

terribly sorry for the late reply. I sent you a private message with my email address...

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## Citizen X

*Steve from abc mobile company!*
*I stand to be corrected but I was really under the impression that there is only a Steve from XYZ bank. It seems Steve from xyz bank has left xyz bank and is now working for a mobile company.*
*Brief synopsis. Mr X takes out phone contract in 2007, he diligently pays for about 5 months and then looses his job after which he never pays again. He doesn’t acknowledge debt and there are no other events to interrupt prescription. A prescription claim is served in January 2012. Steve from abc mobile company argues that the contract was signed on 23 february 2008 and that it’s a 24 month contract and that as such the contract ends on 23 February 2010. And furthermore in light of this the debt will only prescribe on 23 February 2013!!! Now, I’m speechless. Well, I’d never is the sigh! The Act is very specific about when prescription begins to run and furthermore there has been about 25 Supreme Court of Appeal cases which confirm when prescription begins to run. Prescription begins to run when the debt becomes due, the debt becomes due when the debtor fails to make payment, I.e in this specific case the debt became due on 30 July 2008, prescription runs from this date and not the date when the contract ends. So in practice this debtor becomes eligible for prescription on 30 July 2011.*
*When Steve from xyz mobile gives you such layman’s perspective on prescription, don’t be discouraged and certainly don’t give up! You go back with rebuttal or replication!!!*
*Happy hunting!!!*

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## Citizen X

How to challenge listing on credit bureaus, on what grounds to challenge such listings and the new retention periods
Dear Rocktheboat ,
I think the email I sent you earlier today clarifies your legal position adequately! I think many other people may face a similar predicament to post the following.
But, FIRST, I like the name ‘Rocktheboat!’ One of my favourite songs, ‘satisfy my soul: Bob Marley articulates how he doesn’t like his boat to be rocked! "Satisfy My Soul"Oh, please don't you rock my boat (don't rock my boat) 'Cause I don't want my boat to be rockin' (don't rock my boat)I'm telling you that, oh, oh-ooh, wo-o-wo! I like it - like it this (I like it like this, I like it like this) -So keep it steady, like this. For every little action there's a reaction.”
Now, for this current matter:
1. Your argument does indeed have merit! Let me explain as follows:
2. If you had not paid that personal loan debt, I would have been able to successfully claim extinctive prescription for you and have that debt completely extinguished. This simply means that had extinctive prescription been claimed, the debt would have been completely written off. The creditor then would have been obligated to update all systems including credit bureaus accordingly on the simple basis that derogatory remarks cannot exist for a debt that does not exist in law. If there’s no debt then it follows logically that there should be no derogatory remarks. This however, naturally, doesn’t apply to your individual situation as by your own admission you have in effect paid a debt which would have been eligible for an extinctive prescription claim;
3. For the sake of clarity i deem it necessary to distinguish between a payment profile and a listing, a payment profile stay on the credit bureau for 5 years where listings have varying periods of retention from 1 year to 10 years after which it must be automatically removed(the period of listing will depend on the type of listing). The only exception is where you have been liquidated in which case the listing can stay on the credit bureaus literally for an unlimited period of time!!!
4. Your main issue in dispute now is when was the debt listed on the credit bureaus and perhaps more importantly why it was not automatically expunged;
5. There are two pieces of law that applies in your individual case: 1: The National Credit Act 34 of 2005 and more relevant to your current predicament 2: National Credit Regulations 2006;
6. The National Credit Regulations of 2006 is called enabling legislation, it’s purpose is to give effect to the National Credit Act 34 of 2005;
7. We now need to identify the type of listing. The listing in your individual case is called a bank default listing and falls under the category of ‘adverse listing,’
8. Allow me to impress upon you that even a judgment debt listing can only be retailed on credit bureaus for 5 years after which it must be automatically expunged. Failure to do so would otherwise constituted an irregularity!
9. One of the reasons why there is often confusion as to the interpretation of a statute is simply because one person will be referring to a repealed section of the same act and another person will rightfully be referring to the new amended section of that same act. The secret in law is simply to keep updated with the latest amendments and proper interpretations thereof! 
10. In the past the default listing of personal loan banking default adverse listing could only be retained on a credit bureau for 1 year from date of listing, this was found in chapter 3 of the National Credit Regulations 2006, section 17. There has however been an amendment! This amendment is referred to as “Amendment of the Regulations made in terms of the National Credit Act, 2005 (Act No. 34 of 2005) as published in Government Gazette No. 28864 Vol 491 on 31 May 2006”. In practice what this simply done was to add a new classification:”Adverse classifications of enforcement action Classifications related to enforcement action taken by the credit provide 2 years.” In practice to be listed for this 2 years the creditor must have handed over the account to an attorney or debt collector, so it will say:’handed over,’ I do know for a fact however that certain creditors don’t hand over the account at all but to punish you for the maximum period they inform the credit bureaus that it was handed over so that the listing can stand for 2 years.;
11. What to do now? You now essentially want to assert your rights
12. To do so you need to essentially formally complain to the National Creditor regulator about the listing itself, the circumstances surrounding the listing and further insist that your challenge to the listing must also be included on all credit bureaus so that anyone who lawfully makes an enquiry on your name gets both sides of the story, instead of just seeing the creditors adverse version of events.
13. What many consumers unfortunately are unaware of is that a financial institution has not complied with the NCA regulations if they don’t give you prior notice of their intention to list with the credit bureau and/or give you an opportunity to make arrangements to pay. You can rightfully complain about xyz bank on this ground and also put them to the proof of having given you such prior notice!
14. Here’s where it gets interesting! There is a body called the Consumer Credit Association. All there members have agreed not to remove a default listing even when you as the debtor have come forward and paid them in full!!!!! In general in this case you must first ask the creditor if they are a member of the CCA, and if they inform you that they are, you simply tell them that you want a signed letterhead stating that should you pay them in ful and final settlement they will give instructions to the credit bureau to remove the default listing. This is called a suspensive condition, it suspends certain rights and obligations until the fulfilment of an uncertain future event. If you get the signed letter, you then pay, upon paying the creditor then sends out instructions to the credit bureau 
15. How do you do this: Firstly you can visit the NCR website, which is very informative, at www.ncr.org.za, their contact details are *0860 627 627 and the email address that you sent your complain to is* complaints@ncr.org.za
16. How to phrase your complaint:


In subject box of your email: Complaint: ID No:0000000000

Body of your email

Dear Sir/Madam,

1. I refer to the above matter;
2. I hereby formally complain against the listing made by xyz bank against me regarding a personal loan account no:00000, listed on 10/05/2009;
3. My complaint is in terms of section 72 of the National Crefit Act of 2005 read in conjunction with the National Credit Regulations of 2006, section 20(1), (2) 7 (3)
4. The basis of my complaint is as follows:
4.1 Firstly, the credit provider xyz bank did not inform me beforehand of their intention to list the default. Thet are lawfully bound by section 72(1) of the NCA to inform me beforehand of this intention which they failed, alternatively neglected, alternatively refused to do. Section 72(1) reads as follows: “72 (1) Every person has a right to-_(a)_ be advised by a credit provider within the prescribed time before any 30prescribed adverse information concerning the person is reported by it to a credit bureau, and to receive a copy of that information upon request.” I hereby complain that xyz bank has committed an irregularity;
4.2 Secondly, in terms of section 72(c) of the NCA I hereby challenge the listing by XYZ on the following grounds, it should have been expunged after 2 years from the date on which it had been listed. Section 72(c) reads as follows:”(c) challenge the accuracy of any information concerning that person-(i) that is the subject of a proposed report contemplated in paragraph _(a);_ or(ii) that is held by the credit bureau or national credit register, as the case may be, and require the credit bureau or National Credit Regulator, as the case may be,to investigate the accuracy of any challenged information, without charge to the consumer; and_(d)_ be compensated by any person who reported incorrect information to a registered credit bureau or to the National Credit Register for the cost of correcting that information.”
4.3 Thirdly I also want my challenge to be included on all credit bureaus.
Kindly revert and pleas advise accordingly.
Kind regards,
xyz 

*For a more detailed explanation with the actual retention period tables(before and after) see attached PDF*

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Sadness (20-May-14)

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## Citizen X

The covering letter and prescription claim precedent/template(as an email attachment)


Okay, so I’m being presumptuous! You now understand how extinctive prescription works, you also understand what will preclude you from successfully claiming extinctive prescription. You confident that none of the events that interrupt prescription apply to your case. The type of debt is one that becomes eligible for extinctive after a period of 3 years has elapsed from the date of your last payment. Section 11(d) is applicable for such debts. This is by and large: personal loans, credit cards, clothing accounts, vehicle finance,, cell phone accounts etc. You’ve made a quality decision to assert your rights, you good to go!

You need a covering letter and preferably two methods of service on the creditor and/or their attorney. I advocate email and personal service but email and registered mail will also work. Even though emails are classified as ‘data message,’ by the ECT and is admissible as evidence. A potential problem with an email is simply this, it will reflect in your sent items but the recipient can claim that it went directly to spam or that someone may have deleted. This is the rationale for two modes of service.

The covering letter(email)(You attach the modified extinctive prescription claim precedent/template)

Subject box: XYZ bank: Account number 123456: Id number: 0000000000

“Without prejudice and all rights reserved.”

1.      I  refer to the above matter and further to my attached extinctive prescription claim;
2.      I hereby serve my  extinctive “PRESCRIPTION CLAIM” on you with regards to a XYZ Bank account ,
3.      In keeping with legislative requirements, industry generally accepted norms and good corporate governance, kindly process my extinctive prescription claim and confirm to writing on your signed letterhead that this debt is indeed prescribed and that your computer systems and credit bureaus have/will be updated accordingly with regards to this prescription claim.
4.      I  submit that the standard manner in which a prescription claim is processed is as follows: The creditor establishes when the last payment was made. The debt then becomes due and payable a month later. Should a period of 3 years elapse from the date of the last payment the debtor becomes eligible for prescription. The creditor ascertains if the debtor is listed on XDS, Experian and Transunion ITC. The credit establishes whether any events to interrupt prescription has transpired such as actual payments or acknowledgement of debt. Should these exceptions not apply, the creditor then confirms in writing on their signed letterhead that the debt is indeed prescribed, that they have/will update all credit bureaus and furthermore that they abandon their claim on this matter;
5.      The last payment made on this account was on 30 July 2007, This debt became eligible for extinctive prescription on 30 July 2010 which I now formally claim.
Kindly revert and please advise accordingly
Kind regards,
Jack The Ripper
“Without prejudice and all rights reserved.”

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Sadness (20-May-14)

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## Citizen X

*Food for thought!*
The concept of prescription is not new at all. It originates from Roman law. It dates back to what is commonly referred to as The era of early Roman Law(753 BC  250 BC). The earliest manifestation of prescription dates back to 450 BC to what is known as the Twelve tables. The law was literally written on metal plates and placed in the central business district of that day. Anyone could go and inspect this written law. In 448 BC extinctive prescription was not distinguished from acquisitive prescription. It noteworthy that the concept that one could obtain rights merely by the passage of time can be traced to The Law of the Twelve Tables. The Twelve tables were written on twelve bronze tablets which were strategically placed in the central business district of that day so that all could read its contents. Table six, law six reads as follows: Immovable property shall be acquired by usucaption after the lapse of two years; other property after the lapse of one year. So there it was for everyone to see, the simple passage of time could allow you obtain rights today, which as early as yesterday you did not enjoy!
I have conducted quantitative as well as qualitative research with regards to extinctive prescription claims. My focus is strictly and only debts that prescribe in 3 years provided that there was no payment and acknowledgement of debt during this time. This by and large includes personal loans, credit cards, retail apparel account etc. At this juncture I just want to highlight findings of my quantitative research conducted via a questionnaire of some 30 questions and 3086 respondents. 2653 , 86% provided that they learnt about extinctive prescription via the internet. 2356, 76% provided that they were contacted regarding a debt that was more than 5 years old. 788, 25% provided that after the fact of making a payment they realised that they essentially changed their own legal position to their own detriment by causing prescription to run afresh. They provide that they feel robbed and cheated!
Must we reinvent the wheel? Must we revert to the Twelve Tables style of law? *Naturally the following is just for satirical gesture but* if the following sign was posted at every bank, financial institution and major retailer. The aforementioned will either ensure that they sue out actual summons during this period or accommodate extinctive prescription claims which they are lawfully obliged to do!

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Dave A (01-Aug-12), kleva (05-Aug-12)

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## Mark101

Hi Vanash Naick, I stumbled on to your thread and I must say thank you very much I am in the same predicament as most people who asked questions about Prescription and this has been a revelation. Thank you for your advice and the time you take to answer all the questions.

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## Citizen X

> Hi Vanash Naick, I stumbled on to your thread and I must say thank you very much I am in the same predicament as most people who asked questions about Prescription and this has been a revelation. Thank you for your advice and the time you take to answer all the questions.


Mark, it is truly I who am thankful that I'm in a position to help! I thank you for your very kind feedback, we need to start getting involved in public comments phases of all Bills. This is one way, you and I as ordinary South Africans can take ownership of our Country. All South Africans should become more involved, especially when there's a new Bill and the public is invited to comment. That's your chance to make a difference!!!

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Sadness (20-May-14)

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## Candice F

Hi Vanash,

Just wanted to publicly thank you for the excellent work you did to get all my matters sorted out, *all 9 of them*! You have been fantastic and kept me in the loop at all times, I appreciate it and gladly will recommend your services to anyone needing them. 

I have a great sense of relief and can move on with my life without feeling threatend any longer!  

Thank you very much once again!

Kind regards,
Candice

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## Citizen X

A reintroduction to extinctive prescription
The case for extinctive prescription claims in South Africa
I have resolved to reintroduce extinctive prescription in an academically acceptable manner. To do so , one would have to have a source of references and some form of table of contents.
References: I will cite a full source of references at the end of this topic, it won’t be anything soon! In the interim, I’ve resolved to using footnotes to cite references.
Table of contents: I do have a table of contents, but it won’t be possible to include page numbers for the purpose of these posts, but you may accept that posts will follow the table of contents. 
Posts in stages: I will make posts in stages, and number them i.e. Post 1
*TABLE OF CONTENTS*

*Number*
*Item*
*Page*

*1*
*Introduction*


*2*
*Hypothesis*


*3*
*An Outrageous Question*


*4*
*The Prescription Act as a Statute*


*4.1*
*A Statute remains an active Statute until repealed*


*4.2*
*The National Credit Act and a sense of urgency, The Prescription Act 68 of 1969 and no sense of urgency*


*4.3*
*No definitional clause in 1969 Act*


*5.*
*Historical Framework*


*5.1*
*Prescription dates back centuries*


*5.2*
*Extinctive prescription forms part of South African Private Law*


*6*
*Interpretation of the 1969 Act*


*6.1*
*Statutory interpretation*


*6.2*
*Stages of interpretation of the 1969 Act*


*6.3*
*The concept of extinctive prescription*


*6.4*
*The common law position of extinctive prescription*


*6.5*
*Extinctive prescription in practice*


*6.5.1*
*Meaning of as soon as the debt is due*


*6.5.2*
*Meaning of debt*


*6.5.3*
*Debtor’s wilfully preventing creditor from becoming aware of the knowledge of the debt*


*6.5.4*
*Knowledge of the debtor*


*6.5.5*
*Corporate South Africa is by and large an exception to section 13 of the 1969 Act*


*7*
*The difference between an extinctive prescription claim and a special plea of prescription*


*7.1* 
*Example of Plaintiff’s particulars of claim*


*8*
*The need to invoke extinctive prescription when claiming prescription directly from a creditor*


*8.1*
*A case in point*


*8.2*
*Remedy in cases where the creditor refuses to process an extinctive prescription claim*


*8.3*
*Debt review and extinctive prescription*


*9*
*A parallel between Public Law and Private Law*


*10*
*Professional ethics and an attorney providing a debt collector function*


*10.1*
*Estoppel*


*10.2*
*Law and a crisis of an ethical nature*


*11*
*Choice of research framework*


*11.1*
*Research design and methods*


*11.2*
*Quantitative research*


*11.3*
*Post mortem Questionnaire*


*12*
*Qualitative research*


*12.1* 
*Background*


*12.2*
*The pre-determined approach*


*12.2.1*
*Mr A*


*12.2.2*
*Mr B*


*13*
*An investigative journalism approach*


*13.1*
*A gross abuse of the section 57 and 58 procedures of the Magistrates Court Act 32 of 1944*


*13.1.1*
*Mr F and an eighteen year old debt*


*13.1.2*
*The document Mr F signed*


*14*
*A theory as to why a potent statute can become diluted over time*


*14.1*
*Distortion of communication*


*14.2*
*A case in point*


*15*
*Findings*


*16*
*Recommendations*


*17*
*Conclusion*


*18*
*References*



*Annexure A: Questionnaire*

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## Citizen X

Post 1 1. Introduction
This work will address the practical position of extinctive prescription claims in South Africa today. It will address the ease alternatively the difficult of claiming extinctive prescription in terms of section 11(d) of the Prescription Act 68 of 1969. It will reveal shortcomings in industry and the Prescription Act itself and perhaps more importantly it will make recommendations for the amendment of the 1969 Act. This work in and of itself is an impassioned plea to the South African Law reform commission to initiate the amendment of the 1969 Act. The purpose of such recommended amendments is to make the Act more meaningful and applicable to a debtor who is eligible for an extinctive prescription claim and simply wants to claim extinctive prescription. The finished product of this work includes: An extinctive prescription precedent, a recommended covering letter, a recommendation of how the Act should be amended, a recommended schedule where such a schedule would be preferred to an amendment, a recommendation for enabling legislation where enabling legislation would be preferred to an actual amendment of The Act or an addition of a schedule to the Act and a recommendation for a training program on extinctive prescription with specific learning outcomes. This essay will address debts which become eligible for an extinctive prescription claim after a period of 3 years has elapsed from the date of the debt becoming due without any events that interrupt prescription. For classification purposes the natures of these debts are: 1. personal loans, credits cards and vehicle finance providers by registered financial service providers, 2: Retail apparel and accessories provided by registered retail credit providers, 3: Furniture and household goods and appliances provided by registered retail credit providers and 4: Telecommunication goods, service and accessories provided by registered credit providers. My reference to creditor is by and large corporate South African banks, financial institutions and major retailers. This reference is not only essential but rather quite vital as I will demonstrate in this essay that by and large the provisions of sections 12(2), (3) and section 13[with the exception of section 13(b)] will not be applicable to these organisations alternatively will not find reference to any meaningful dispute where such organisations are the creditor. For the purposes of extinction of debt by the passage of time, sections 10 up to and including section 18 of the 1969 Act apply. What I’m about to postulate is at immediate odds with ‘SLRC Discussion Paper 126, Project 125, Scope of Review’(2011:5) where it is provided that, _‘__The review is limited to harmonisation of prescription periods, and does not include a general review of prescription in general, or the extinction of debts by prescription in particular.’_



2. Hypothesis

The Prescription Act 68 of 1969 appears to be an unproblematic South African Statute. This inference is drawn because the Act itself is fairly straightforward and the requirements for extinctive prescription are reasonably clear. The Act in and of itself does not answer many pertinent questions such as: How does one claim extinctive prescription? How does a creditor process an extinctive prescription claim? How does the finality and legal certainty which extinctive prescription is designed to promote get implemented? Does the creditor merely access the debtor’s account and add a note, “This debt is prescribed, the debtor has claimed extinctive prescription,” or does the creditor confirm to signed letterhead that a debtor has claimed extinctive prescription; the prescription claim has been processed, that the debt is prescribed, that the creditor abandons his claim and that all credit bureaus have or will be updated accordingly? The ultimate problem statement is: How does a debt, regardless of its monetary amount, which is eligible for extinctive prescription, becomes extinguished by prescription in practice to a point where a debtor legally owed a certain amount of money to a creditor yesterday to a point where after the fact of an extinctive prescription claim the debtor no longer owes the creditors any money whatsoever and there is certainty about this fact both to the creditor and to the debtor.

Given the overall aims set out above and for the sake of a clearly defined hypothesis, I have chosen a slight deviation from conventional hypothesis by dissecting my hypothesis into six problem statements.
1. Many financial institutions and major retailers don’t have rules, regulations, policy and procedure in place to process extinctive prescription claims;
2. Many financial institutions and major retailers cannot appreciate the difference between an extinctive prescription claim and a special plea of prescription;
3. Many debt collectors and attorneys acting on instruction of financial institutions and major retailers intentionally preclude a debtor from claiming extinctive prescription and engage in unethical conduct to get a debtor to unwittingly make a payment on a debt that would otherwise be eligible for an extinctive prescription claim. The debtor then unwittingly acts to his/her own prejudice by causing the prescription period to run afresh
4. Many debt collectors and attorneys acting on instruction of financial institutions and major retailers intentionally preclude a debtor from claiming extinctive prescription and engage in unethical conduct to get a debtor to unwittingly acknowledge debt that would otherwise be eligible for an extinctive prescription claim. The debtor then unwittingly acts to his/her own prejudice by causing the prescription period to run afresh
5. There is a training and development need for extinctive prescription in banks, financial institutions and major retailers. Many financial institutions and major retailers don’t know how to process an extinctive prescription claim. It’s not a case where they don’t want to process such an extinctive prescription claimbut more a case that they don’t know how to process an extinctive prescription claim simply because they received no adequate training on extinctive prescription.
6. Many financial institutions and major retailers are used to a situation where they enforce their rights to collect a debt either by using their own internal special collections department, a debt collector or an attorney. Consequently they are used to a situation where they sue out summons for a debt and in many cases easily obtain judgment as the debtor does not file a notice of intention to defend. The aforementioned are simply not used to a situation where a debtor attempts to enforce his/her rights with regards to extinctive prescription. An analysis of these presuppositions will highlight the plight of a debtor who merely wants his/her debt obligation to be extinguished by extinctive prescription based on what the law itself says.
*Gilmore S (2011:1) states that, the art of practising law is not to know all the answers, but to know where to find the answers. In order to find the answers, the practitioner must know what to look for. In order to know what to look for the practitioner must be able to sift the facts at hand and to define the problem he or she is dealing with’ (V Tunkel & A de W Horak xi). Academic study should teach one the requisite skills to ‘sift the facts at hand’. However, one is still left with the problem of finding the authority that you need to substantiate your case or finding the written law that will back up whatever case you are making. The information lies in all the physical (both print and electronic) sources of our law — the common law; the legislation; the law reports; the books and the encyclopaedias.* 
I intend to substantiate my case.
3. An outrageous question
Reason with me! Is it necessary for us to reinvent the wheel by using the concept of the ‘Twelve Tables,’ to articulate that certain debts become eligible for an extinctive prescription claim alternatively prescribe after the passage of a certain period of time? In order to give full effect to this outrageous question alternatively satirical gesture, a Twelve Table equivalent would be a large notice board in every bank, financial institution and major retailer’s various branches stating that certain debts prescribe after 3 years has elapsed from the date which the debt became due alternatively the month after the date of the last payment, provided that no payments have been made within this 3 year period, no acknowledgement of debt has taken place and no summons has been sued out! There you have it! Our problem statement glaring at us from this page namely most debtors are unaware of their rights with regards to extinctive prescription and the actual procedure of processing an extinctive prescription claim are widely varied in Banks, Financial Institutions and major retailers. What we require here is simple standardization. Allow me to reason with you to a point where we all draw the same conclusions. To reason means to be able to identify and follow the arguments presented by specific thinkers (i.e. what claims are made or conclusions drawn and how they are substantiated [the premises]) and to be able to assess the quality and validity. UNISA(2012: vii). All reasoning is thinking, but not all thinking is reasoning. Copi (1969:4). Since valid inferences are inferences where the conclusion is logically entailed by the premises, interest in logic is focused on the study of logical entailment or consequence. All wood et al(1997:16). _Reason with me!_ 







4. The Prescription Act as a Statute

The Prescription Act 68 of 1969 is classified as a statute, alternatively legislation, alternatively an Act of Parliament, alternatively enacted law texts.*[1]* It may also be classified as original legislation. This Act was assented to on 23 May 1969 and commenced on 1 December 1970. It was gazette on 4 June 1969; Government Gazette number 2421 Volume 48, as at this time one could buy the Government gazette from any Post Office for 10 cents.*[2]* There is no doubt whatsoever that it is an authoritative source of South African Law by mere virtue of its classification as an Act. The 1969 Act is not an academic opinion neither is it an article in a law journal. It is for all practical intents and purposes the law.

4.1 A Statute remains an active Statute until repealed
Regardless of how the implications of its provisions may be accepted by creditors and debtors, it remains the law. The notion that corporate South Africa may find it to be unjust in so far as it brings about the extinction of a right to claim a debt after the passage of time, either by the debtor claiming extinctive prescription from the creditor or by the debtor filing a special plea of prescription in court, does not negate the fact that the Prescription Act is law and remains law. A law, an Act of parliament need not be just, reasonable or fair to be law. In fact we have a number of Acts which are perceived to be unjust, unreasonable or unfair. The Choice of Termination of Pregnancy Act 92 of 1996 is just one example. Many religious organizations have expressed outrage of the practical implications of this Act which allow for a woman regardless of her age to have an abortion legally. The outrage expressed is of no consequence to the Act itself nor does it change its status as Legislation. The 1969 Act should be understood from this perspective. It is a legitimate statute in much the same way as: The Criminal Procedure Act 51 of 1977, The Divorce Act 7 of 1979, The Wills Act 7 of 1953, The National Credit Act 34 of 2005 and the Consumer Protection Act 68 of 2008, to name a few. If one were to ask a simple question: What do the aforementioned have in common? The simple answer would be they are all statutes.

*[1]* Vide Prescription Act 68 of 1969 http://0-discover.sabinet.co.za.oasi...ument/NTL12110

*[2]* Vide http://0-discover.sabinet.co.za.oasi...Gov/gg2421.pdf. Date of use 3 July 2012

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## Citizen X

Post 2
4.2 The National Credit Act and a sense of urgency, The prescription Act 68 of 1969 and no sense of urgency
The National Credit 34 of 2005 and its resulting regulations have impacted directly on litigation. A creditor must first send a letter of demand which is delivered to a consumer at his address before suing out summons. The Plaintiff’s Particulars of Claim will invariably contain the following or similar assertion_ (Particulars of claim will never start with this paragraph! It’s included here to demonstrate that the NCA is held in such high regard that even obligatory paragraphs need to be included in the Plaintiff’s particulars of claim)_:


5 The Plaintiff is entitled to approach the Court for an Order as contemplated in Section 30 of the National Credit Act of 2005 in that:

5.1 The Plaintiff issued a Notice to the Defendant in terms of Section 129 of the Act and delivered such Notice in the prescribed manner,
5.2Notwithstanding the above, the Defendant has not responded to the Notice, alternatively has responded to the Notice by rejecting the Plaintiff’s proposals;
5.3The time periods, as prescribed in Section 130 of the Act has lapsed;
5.4The Plaintiff has no knowledge of any debt review proceedings instituted by the Defendant as provided for in section 86 of the aforesaid Act.
With the commencement of the National Credit Act 34 of 2005, we have seen changes to Court Rules, changes to the how litigation should commence, a body which one can complain to for non- compliance by the creditor and Corporate South Africa developing policy documents and training programs to be compliant. This is in stark contrast to The Prescription Act. 

4.3 No Definitional Clause in 1969 Act

On conducting a post mortem of this Statute with the precision of a surgeon about to conduct surgery, it was alarming to find that the 1969 Act does not include a definitional clause section nor does it have a preamble. A preamble is necessary to clarify the underlying philosophy of the Act. The next enquiry is then: What is the purpose of the 1969 Act? The purpose is found in the long title. In this case it simply states ‘*To consolidate and amend the laws relating to prescription’.**[1]*The 1969 Act does have practical importance.*[2]* It should be the subject of greater theoretical analysis and it should not be seen as a technical and theoretically unrewarding aspect of statute law.*[3]* If it is accepted that the 1969 Act is a rule of law and further that there is some degree of uncertainty as to its interpretations by both creditors and debtors and further that there is uncertainty as to the difference between an extinctive prescription claim and a special plea of prescription, then it should at the very least be also accepted that some form of procedural-law mechanisms are required to give proper effect to the 1969 Act. Law means any law, proclamation, ordinance, Act of Parliament or other enactment having the force of law.*[4]*


5. Historical framework

5.1 Prescription dates back centuries
The concept of prescription is not new at all. It originates from Roman law. It dates back to what is commonly referred to as ’The era of early Roman Law(753 BC – 250 BC).’*[5]*The earliest manifestation of prescription dates back to 450 BC to what is known as the ‘Twelve tables.’ The law was literally written on metal plates and placed in the central business district of that day. Anyone could go and inspect this written law.*[6]* In 448 BC extinctive prescription was not distinguished from acquisitive prescription. It noteworthy that the concept, that one could obtain rights, merely by the passage of time can be traced to The Law of the Twelve Tables. The Twelve tables were written on twelve bronze tablets which were strategically placed in the central business district of that day so that all could read its contents. Table six, law six reads as follows: ‘Immovable property shall be acquired by usucaption after the lapse of two years; other property after the lapse of one year.’*[7]* So there it was for everyone to see, the simple passage of time could allow you obtain rights today, which as early as yesterday you did not enjoy!*[8]*
The nature and effect of prescription will always remain the essential point of departure. The first prescription time period was introduced by emperor Theodosius in AD 424. It was referred to as _praescriptio longi temporis._*[9]* Roman Dutch writers were largely unanimous in postulating that prescription has a strong effect, extinguishing the obligation itself as well as the remedy.*[10]*
5.2 Extinctive prescription forms part of South African Private Law
The 1969 Act rightfully belongs to South African Private Law. The accepted wisdom is that South African Private Law was influenced by Roman Dutch Law which originated in Roman law itself. Extinctive Prescription as a lawful concept found its way into statute by way of The Prescription Act of 1943.*[11]* Before the commencement of the 1969 Act, Professor J C de Wet was given a mandate by the Law Reform Commission to prepare a paper in which recommendations were provided for amendment of the 1943 Act.*[12]* It was apparent that interpretation of the 1943 Act was problematic. Prof de Wet recommended a system of prescription where the actual debt would automatically become extinct when the complete prescription period had run its course.*[13]* Interestingly the predecessor the 1943 Act does have a definitional clause whereas the 1969 Act has none. In section 3(1) of the 1943 Act Extinctive prescription is defined as the rendering unenforceable of a right by the lapse of time.*[14]* Section 10(1)(d) of the 1969 Act is entitled ‘Extinction of debts by prescription.’ This section states that subject to the provisions of this Chapter and of Chapter IV, a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt.*[15]* Section 11(d) of the 1969 Act is entitled *Periods of prescription of debts* and states ‘The periods of prescription of debts shall be the following: save where an Act of Parliament provides otherwise, three years in respect of any other debt.*[16]*’ 

*[1]* Loc cit n 4

*[2]* Loc cit n 4

*[3]* Vide MM Loubster. Extinctive Prescription. 1996. 1

*[4]* Loc cit n 4 Prescription Act 68 of 1969 & Vide s 2 Interpretation Act 33 of 1957. http://0-discover.sabinet.co.za.unisa.ac.za/document. Date of use 3 July 2012

*[5]* Vide Origins of South African Law Studyguide.2008. 44

*[6]* Op cit 49

*[7]* Vide The Law of the Twelve Tables http://www.constitution.org/sps/sps01_1.htm. Date of use 3 July 2012 et seq Law of the Twelve Tables http://www.britanica.com/ebchecked/t...-Twelve-Tables

*[8]* Confer Van Oven JC. Leerboek van Romeinsch Privaatrecht. (3rd ed 1948). 82

*[9]* Op cit page 4 MM Loubster

*[10]* Ibid page 5, confer De Wet Opuscula Miscellanea page 104

*[11]** Vide Prescription Act 18 of 1943* *http://0-discover.sabinet.co.za.oasis.unisa.ac.za/document**. Date of use 3 July 2012*

*[12]** Infra n 18 Page 6*

*[13]** Confer n 8 MM Loubster Page 7*

*[14]** Supra n 16 s 3(1)* 

*[15]** Op cit n 4 s 10(1)*

*[16]** Op cit n 4 s 11(d)*

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## Citizen X

Post 3 Ps if footnotes don't make complete sense in the previous two posts it's becuase the preface was not included and I copied cut and paste from the word document that had the preface, to resolve this problem, I have deleted the preface from the document I am currently copying, cutting and pasting from, it should make sense from here!
6. Interpretation of the 1969 Act
Its common cause, that one of the tasks of the Judiciary, is to interpret legislation. The accepted wisdom is that we look to the Supreme Court of Appeals for guidance when interpreting legislation. It’s furthermore accepted that words in legislation may not bear their ordinary dictionary meaning. This is why it’s not only essential but rather quite vital for a Statute to have a definitional clause. A mere definitional clause may well be part of the solution to easing an already burdened court roll in South Africa.
Section 165(1) of the Constitution of South Africa, states that the judicial authority of the Republic is vested in the courts.*[1]* The Judiciary performs an adjudicatory function. In order to perform this task satisfactorily, the judiciary is tasked with interpreting legislation and applying legal rules to any legal dispute which may be brought before it with the objective of imposing a sanction if it finds that a legal rule has been breached, enforcing a right or discharging an obligation. It is accepted that when one summarises a case four components prevail.1: Facts of the case, 2: The issues to be decided, 3: The findings of the court and 4: The reasons for the courts decision.*[2]*
6.1 Statutory interpretation
Statutory interpretation refers to the process of interpreting any Statute as well as the actual rules and principles that regulate such interpretation. The 1969 Act is still in operation, as such, it can therefore be interpreted. The legal authority of the 1969 Act has not changed neither has its effects been diminished by any Supreme Court of Appeals case. It should actually have more potency today as debt is in the public interest and we now living in the aftermath of the global economic meltdown. This economic meltdown had knock off effects on many countries including South Africa. Debt and all aspects of debt should be taken very seriously! The legal position is that all Legislation remains in force until either one of two things happen: the legislation is amended and repealed by the Legislature, or the Legislation is amended and declared unconstitutional by the court.*[3]* Statutory interpretation lacked a meaningful process before 1994. The result was the inevitable application of conflicting rules, principles and methods.*[4]*


6.2 Stages of Interpretation of the 1969 Act

I support the contextualist method of interpreting a Statute. This is an interpretative method that focuses on the broader context of legislation. This will always be subject to guidance from the SCA on interpretation of a specific section. Confer: UNISA:IOS(2010:10). The primary rule of interpretation is therefore to determine the purpose of legislation and to give effect to that purpose.
6.3 The concept of extinctive prescription
 A debt will be extinguished by the simple passage of time provided that a period of three years has elapsed from the date that the debt became due and no events to interrupt prescription have transpired. The most notable and detrimental events that cause the prescription period to run afresh from the date that such an event occurred is payment by the debtor and acknowledgement of debt by the debtor.
According to SALRC, project 125(2011:2), Prescription is a means of acquiring or losing rights, or of freeing oneself from obligations, by the passage of time under conditions
prescribed by law. It derived from classical Roman law and further developed under Justinian.
According to Loubser (1996:8), extinctive prescription simply concerns questions of fact, namely whether a particular period of time, prescribed by statute in respect of a particular obligation, has passed, and whether other conditions prescribed by statute for reliance on prescription have been met. If so, and if the debtor chooses to rely on it, prescription takes effect.
The intention of the legislators with specific regards to section 11(d) of the 1969 Act is clear. Extinctive prescription is to have a strong and effective effect.*[5]*


6.4 The Common Law position of Extinctive Prescription

Roman-Dutch Law as influenced by English Law became the Common Law of South Africa. The sources of Roman-Dutch Law are: The old writers, Legislation, Case Law, Collections of opinions and Custom.*[6]*
The South African Law Reform Commission was established in 1973. Section 4 of South African Law Reform Commission Act 19 of 1973 stipulates the objectives of SALRC are to do research with reference to all branches of the law of the Republic and to study and to investigate all such branches of the law in order to make recommendations for the development, improvement, modernization or reform thereof, including-
_(a)_ the repeal of obsolete or unnecessary provisions;
_(b)_ the removal of anomalies;
_(c)_ the bringing about of uniformity in the law in force in the various parts of
the Republic;
_(d)_ the consolidation or codification of any branch of the law; and
_(e)_ steps aimed at making the common law more readily available.*[7]*
The Law Reform Commission has achieved much in the harmonisation of (Western) Common Law and Indigenous Law in South Africa.*[8]*



According to SALRC, the reasons given in common law for prescription of debts are the following: 
(a) After a specified period of time the fault of a creditor (claimant) in taking care of his or her claim should be visited by certain penalties, namely, the extinction or rendering unenforceable of the claim; 
(b) Prescription relieves the debtor of having to defend a claim long after the event; 
(c) A state of affairs which has existed for a considerable period of time ought to be legally formalised in the interests of certainty in legal affairs.
(d) In general the courts seem to favour the idea that the primary purpose of prescription is to punish the slovenly creditor, although fault on the creditor’s part is not, and never has been, a requirement for prescription. 
(e) Creditors (claimants) and debtors (defendants) have competing interests. It is unfair that a debtor should be subject to an indefinite threat of being sued. It is in the interest of creditors to have as possible to institute a claim.*[9]*
According to Loubser(1996: 22), the main object of extinctive prescription is to create certainty and finality in the relationship between creditor and debtor after the lapse of a period of time, and the emphasis is on protection of the debtor against a stale claim that existed for such a long time that it becomes unfair to require the debtor to defend himself against it. The primary consideration is therefore one of fairness to the debtor.
*In De Jager and others v ABSA Bank Bpk,**[10]** on 29 September 2000, the court examined the underpinnings of extinctive prescription. The court accepted that its ultimate purpose was to promote certainty in the affairs of people. Its purpose is to promote fairness towards a debtor.*
_In Uitenhage Municipality v Molloy 1998_*[11]** 1 All SA 146 (A) the court provided that* the rationale in the cases which have held that a creditor cannot “by his own conduct postpone the commencement of prescription” by refraining from satisfying the condition which would render a debt due and payable, apply equally where the creditor has failed to take or initiate the steps which fall within his or her power to make it possible for such a condition to be satisfied. One of the main purposes of the Prescription Act is to protect a debtor from old claims against which it cannot effectively defend itself because of loss of records or witnesses caused by the lapse of time. If creditors areallowed by their deliberate or negligent acts to delay the pursuit of their claims without incurring the consequences of prescription that purpose would be subverted. In the headnote of this case, at page 140, the editor’s summary articulated that o_ne of the main purposes of the Prescription Act_ _68 of 1969__ was to protect the debtor from old claims against which he could not effectively defend himself – If creditors were allowed by their deliberate or negligent act to delay the pursuit of a claim without incurring the consequences of the prescription, that purpose would be subverted._
_Loubser(1996:22), eloquently states that the policy objectives of extinctive prescription have been justified in glowing terms by story: ‘ laws, thus limitating suits, are found in the noblest policy. They are statutes of repose, to quite titles, to suppress frauds, and to supply the defiency of proofs arising from the ambiguity and obscurity or the antiquity of transactions. They proceed upon the presumption that claims are extinguished, or ought to be held extinguished, whenever they are not litigated in the proper forum within the prescribed period. The quicken diligence by making it, in some measure, equivalent to right. They discourage litigation by bringing in one common receptacle all the accumulations of past times which are unexplained, and have now, from lapse of time, become inapplicable. It has been said by John Voet with singular felicity that controversies are limited to a fixed period of time lest they should be immortal while men are mortal-ne autem lites immrtales essent, dum litigantes mortals sunt.’_

*[1]** Vide Constitutional Law Study Guide. 2008. Muckleneuk. Pretoria. UNISA. Page189*

*[2]** Supra n 22: confer: page 11*

*[3]* Vide Interpretation of Statutes Study Guide. 2010*. Muckleneuk. Pretoria. UNISA. Page 20*

*[4]* Op cit n 24 page 32

*[5]* Vide Standard General Insurance Co Ltd v Verdun Estates (Pty) Ltd 1990 2 SA  693 A ; Cape Town Municipality v Allianz Insurance Co Ltd 1990 1 SA 30 (C); Protea International (Pty) Ltd v Peat Marwick Mitchell & Co 1990 2  SA 199 (A)

*[6]* Vide The origins of South African Law Study Guide.2008. Muckleneuk. Pretoria. UNISA. Page 124

*[7]* Vide South African Law Reform Commission Act 19 of 1973. http://www.salawreform.justice.gov.za.Date of use 4 July 2012

*[8]* Supra n 27 Page 157

*[9]* Vide Discussion paper 126. Project 125. Prescription Periods. 2011. Page 11.(taken verbatim) http://www.salawreform.justice.gov.za.Date of use 4 July 2012

*[10]*  Vide De Jager and others v ABSA Bank Bpk 2000 4 All SA 481 (A)

*[11]* Vide In Uitenhage Municipality v Molloy 1998 1 All SA 146 (A)

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## Citizen X

_6.5 Extinctive prescription in practice_
_6.5.1 Meaning of as soon as the debt is due_
_Section 12(1) of the 1969 Act provides that_ prescription shall commenceto run as soon as the debt is due. _In Deloitte Haskins & Sells Consultants (PTY) LTD v Bowthorpe Hellerman Deutsch (PTY) LTD_ at page 527,*[1]* the court held that s 12(1) of the Prescription Act, which provided that 'prescription shall commence to run as soon as the debt is due', meant that there had to be a debt immediately claimable by the debtor or, stated another way, that there had to be a debt in respect of which the debtor was under obligation to perform immediately: prescription could not begin to run against a creditor before his cause of action was fully accrued, i.e. before he was able to pursue his claim.
Qualitative research revealed that in Mr A, B, C and Miss C’s case, the debt became due when they failed to make payments on their accounts.*[2]* Mr A’s ... account became due when he failed to make a payment in January 2007. The last payment he made was in December 2006. Mr B’s ....account became due when he failed to make a payment in March 2008, his last payment was made in February 2008. Mr C’s .... Personal Loan account became due in January 2008. The last payment he made was in December 2007. Miss C’s ....., Vehicle finance account became due in May 2007. The last payment was made in April 2007.


In all of these cases, the creditor did not sue out summons despite the facts that their telephonic and letter demands were been ignored. The creditor should have sued out summons at the earliest instance but within three years from the date of the debt becoming due.

According to SALRC, The Prescription Act, contains no definition of the term “due” and the courts have held that the term must therefore be given a wide and general meaning, namely that of a debt “owing and already payable” or “immediately claimable”, or “immediately exigible at the will of the of the creditor”, or a debt “in respect of which the debtor is under an obligation to perform immediately”, or not to do something.*[3]*
6.5.2 Meaning of a debt
Qualitative research revealed that Mr A, B, C and Miss D were all debtors by virtue of the fact that they owed money to a bank, financial institution or major retailer. Collectively they owed money to ...........*[4]*
A debt is a noun and is defined as a sum of money that somebody owes. A debtor is a person, country, or an organisation that owes money.*[5]* A debtor cannot exist in a vacuum, there has to be a creditor. Creditor is a noun and is a person, company etc. that somebody owes money to.*[6]* According to Berry et al (2007: 197) a credit transaction arises from a purchase or sale, or the lending or borrowing of money which results in a debt payable at a later stage.*[7]* Section 55 of The magistrates Court Act 32 of 1944 defines debt as any liquidated sum of money due.*[8]*
_In Electricity Supply Commission v Stewards and Lloyds of SA (PTY) LTD_,*[9]* at page 341, HOLMES AJA stated the finding of the Judge a quo that the 1969 Act applies is undoubtedly correct. See s 16 of Act 68 of 1969. Although the 1969 Act views prescription from the point of view of the debtor in providing that a "debt" shall be extinguished by prescription after the lapse of a period of time, a "debt" is necessarily the correlative of a right of action vested in the creditor, which likewise becomes extinguished simultaneously with the debt…the date on which a debt "arises" is not necessarily the same date as that on which the debt becomes "due", although these two dates usually coincide.
It was common cause in this Court that a debt is ‘that which is owed or due; anything as money, goods or services, which one person is under obligation to pay or render to another.
Loubser(1996: 29) qualifies the meaning of debt as interpreted _in Master v IL Back LTD._*[10]* The court stated ‘In considering the words, ‘debt,’ one considers their ordinary meaning and the context in which they appear and the general intention of the Legislature. The ordinary meaning of debt is ‘that which is owed and due; anything as money, goods and services which one person is under obligation to pay or render to another. It seems to me that in ordinary parlance, a debt is a firm obligation to pay, whether now or later. The notion of a possible conditional obligation to pay is at variance with this.’

*[1]* Vide Deloitte Haskins & Sells Consultants (PTY) LTD v Bowthorpe Hellerman Deutsch (PTY) LTD 1991 (1) SA 525 (A) at page 527

*[2]* Qualitative research. The full and further particulars of Mr A, B, C, D and Miss E have been disclosed to SALRC to prove integrity of the research.

*[3]* Loc cit n 30 page 18.

*[4]* Supra n 34

*[5]* Vide Oxford Advanced learner’s Dictionary. Eight Addition. Oxford University Press. 2010. Page 376

*[6]* Supra n 37 page 344

*[7]* Vide Berry PR et al. About Financial Accounting. 2nd edition. Lexis Nexis Durban. Page 197

*[8]* Vide s 55 Magistrates Courts Act 32 of 1944. http://0-discover.sabinet.co.za.unisa.ac.za/document. Date of use 3 July 2012

*[9]* Vide Electricity Supply Commission v Stewarts and Lloyds of SA 1981 (3) SA 341 (A), confer Loubser(1996:29, para 4

*[10]* Loc cit n 8. Page 29

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## Blurock

What about when a debtor makes a written promise say after 6 months and he then does not keep that promise?

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## Citizen X

> What about when a debtor makes a written promise say after 6 months and he then does not keep that promise?


A written promise is very detrimental to the debtor in many ways, firstly, it will be classified legally as a bill of exchange which prescribes in 6 years from the date it was signed, secondly, the creditor can use the 'provisional sentence,' procedure which is very similiar to summary judgement, evidence by both parties via affidavit, the provisional sentence summons is reserved for liquid documents such as cheques and promisory notes, thirdly, the creditor can go the summary judgement route, again, affidavit and the defendant must come to court strictly and only to state that he/she has a defence, where the magistrate/judge can see that their is no defence i.e. just delaying tactics, summary judgement will be granted immediately without trial!!!

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Blurock (01-Oct-12), Dave A (02-Oct-12)

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## Citizen X

6.5.3 Debtor’s wilfully preventing creditor from becoming aware of knowledge of the debt
Section 12(2) of the 1969 Act reads if the debtor wilfully prevents the creditor from coming to know of the existence of the debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt.*[1]*
Quantitative research revealed that Banks, Financial Institutions and major retailers do have sufficient knowledge of such debt due to their information technology infrastructure.*[2]* They have computer systems in place as well as support staff to immediately act on the existence of a debt that is due. 2542 respondents to a questionnaire, out of 3086 that responded, stated that they either had an account with a bank, major retailer or telecom/cell-phone provider. This is 82%. In all these cases their creditor had adequate information technology in place to inform them when a debtor stops paying.
6.5.4 Knowledge of the debtor
Section 12(3) of the 1969 Act reads, a debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.
In _Harold Gunase v Ramesh Anirudh_*[3]* 2011 ZA SCA 231, at paragraph 14 the court said section 12(3) imposes a duty on the creditor to exercise reasonable care to obtain knowledge of the identity of the debtor and the facts from which the debt arises. A creditor is not allowed to postpone the commencement of the running of prescription by his failure to take necessary steps.
Quantitative research revealed that 2976(96%) of the respondents provided that they have been contacted by the creditor or the creditor’s agent several years after making the last payment on their account(s). This in and of itself is _prima facie_ evidence that if a creditor can contact you telephonically then there is no wilful conceal of a debtor’s identity. Creditors have adequate debtor information on their computer systems and are subscribers to either ITC Transunion, XDS or Experian. A simple trace alert will reveal the debtor’s current contact information.
In _GERICKE v SACK_ 1978*[4]* at page 830. DIEMONT JA, provided inter alia that, in order to establish the identity of the person on whom service is to be effected the sheriff will require the name and address of the debtor…. Our South African Law is not constant and enduring and is subject to amendment. The Magistrates Court Rules have been amended. Rule 9(3) accommodates various methods in which service of summons can take place. This includes:
1.To the said person personally or to his or her duly authorised agent: Provided that where such person isa minor or a person under legal disability, service shall be effected upon the guardian, tutor, curator orthe like of such minor or person under disability;
2. At the residence or place of business of the said person, guardian, tutor, curator or the like to some person apparently not less than 16 years of age and apparently residing or employed there: Provided that for the purpose of this paragraph, when a building, other than an hotel, boarding house, hostel or similar residential building, is occupied by more than one person or family, "residence" or "place of business" means that portion of the building occupied by the person upon whom service is to be effected;
3. At the place of employment of the said person, guardian, tutor, curator or the like to some person
apparently not less than 16 years of age and apparently in authority over him or her or, in the absence of such person in authority, to a person apparently not less than 16 years of age and apparently in charge at his or her place of employment;
4. If the person so to be served has chosen a _domicilium citandi,_ by delivering or leaving a copy thereof at the _domicilium_ so chosen;
5. If the plaintiff or his or her authorised agent has given instructions in writing to the sheriff to serve by registered post, the process shall be so served: Provided that a debt counsellor who makes a referral to court in terms of section 86(7) (c) or 86(8)(b) of the National Credit Act may cause the referral to be served by registered post or by hand.
6. Where the person to be served with any document initiating application proceedings is already
represented by an attorney of record such document may be served upon such attorney by the party initiating the proceedings.*[5]*
It can never be successfully argued that Corporate South Africa is unable to reach a debtor by means of judicial service of summons.
*In Minister of Trade & Industry of RSA v Farocean Marine (Pty) Ltd* *[6]** at paragraph 35, the court stated that* Section 12(3) thus aims to achieve a balance between these two opposing interests, and ensures that negligent, rather than innocent, inaction is penalised. Accordingly, the yardstick to be used in determining the standard of care required of the creditor is:“. . . to do no more than that what could be expected, in the circumstances, of a reasonable man. _Jacobs v Adonis_ 1996 (4) SA 246 (C) at 253B.
*According to Loubser(1996:102), section 12(3) applies where the creditor is ignorant of either the identity of the debtor or the facts from which the debt arises, or of both, and where the creditor could not have acquired the requisite knowledge by exercising reasonable care. The onus is on the debtor to show when the creditor knew or was deemed to know of the debtor’s identity and the incidence of this burden of proof does not alter merely because the facts happen to be within the knowledge of the creditor. Loubser correctly adds that the court will take cognizance of the handicap under which the debtor may labour where the facts concerning the creditor’s awareness are within the creditor’s exclusive knowledge, and in these circumstances less evidence will be required of the debtor to establish a prima facie case. Loubser(1996:103)*


6.5.5 Corporate South Africa is by and large an exception to section 13 of the 1969 Act.

Banks, financial institutions and major retailers are juristic persons. They have natural persons in their employ. To this end the aforementioned can never be a minor, insane and it’s very rare that such corporate companies will be under curatorship. A juristic person can never be married to a natural person. It may however occur that a senior manager working for a juristic person is married to a natural person. It is unlikely that Banks, Financial Institutions and major retailers will have a partnership agreement with an unemployed person that is in debt. Quantitative research revealed that 90% of all respondents were unemployed when contacted by the creditor.

*[1]* Loc cit n 4.

*[2]* Vide research analysis page of this essay and vide annexure 

*[3]* Harold Gunase v Ramesh Anirudh 2011 ZA SCA 231

*[4]* In _GERICKE v SACK_ 1978 (1) SA 821 (A) Page 830


*[5]* Vide Faris JA and Hurter E. The Students Handbook for Civil Procedure. 5th Ed. Lexis Nexis. Durban. 2010. Page 160

*[6]**Minister of Trade & Industry of RSA v Farocean Marine (Pty) Ltd [2006] 1 All SA 644 (C)
To be continued*

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## Citizen X

*To learn more about LAWfully challenging credit bureau listing follow this link:-
* http://www.theforumsa.co.za/forums/a...9&d=1339823165

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## Citizen X

*To be continued..not near done!*

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## Citizen X

Post 5
6.5.3 Debtor’s wilfully preventing creditor from becoming aware of knowledge of the debt
Section 12(2) of the 1969 Act reads if the debtor wilfully prevents the creditor from coming to know of the existence of the debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt.[1]
Quantitative research revealed that Banks, Financial Institutions and major retailers do have sufficient knowledge of such debt due to their information technology infrastructure.[2] They have computer systems in place as well as support staff to immediately act on the existence of a debt that is due. 2542 respondents to a questionnaire, out of 3086 that responded, stated that they either had an account with a bank, major retailer or telecom/cell-phone provider. This is 82%. In all these cases their creditor had adequate information technology in place to inform them when a debtor stops paying.
6.5.4 Knowledge of the debtor
Section 12(3) of the 1969 Act reads, a debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.
In _Harold Gunase v Ramesh Anirudh__[3]_ 2011 ZA SCA 231, at paragraph 14 the court said section 12(3) imposes a duty on the creditor to exercise reasonable care to obtain knowledge of the identity of the debtor and the facts from which the debt arises. A creditor is not allowed to postpone the commencement of the running of prescription by his failure to take necessary steps.
Quantitative research revealed that 2976(96%) of the respondents provided that they have been contacted by the creditor or the creditor’s agent several years after making the last payment on their account(s). This in and of itself is _prima facie_ evidence that if a creditor can contact you telephonically then there is no wilful conceal of a debtor’s identity. Creditors have adequate debtor information on their computer systems and are subscribers to either ITC Transunion, XDS or Experian. A simple trace alert will reveal the debtor’s current contact information.
In _GERICKE v SACK_ 1978[4] at page 830. DIEMONT JA, provided inter alia that, in order to establish the identity of the person on whom service is to be effected the sheriff will require the name and address of the debtor…. Our South African Law is not constant and enduring and is subject to amendment. The Magistrates Court Rules have been amended. Rule 9(3) accommodates various methods in which service of summons can take place. This includes:
1.To the said person personally or to his or her duly authorised agent: Provided that where such person isa minor or a person under legal disability, service shall be effected upon the guardian, tutor, curator orthe like of such minor or person under disability;
2. At the residence or place of business of the said person, guardian, tutor, curator or the like to some person apparently not less than 16 years of age and apparently residing or employed there: Provided that for the purpose of this paragraph, when a building, other than an hotel, boarding house, hostel or similar residential building, is occupied by more than one person or family, "residence" or "place of business" means that portion of the building occupied by the person upon whom service is to be effected;
3. At the place of employment of the said person, guardian, tutor, curator or the like to some person
apparently not less than 16 years of age and apparently in authority over him or her or, in the absence of such person in authority, to a person apparently not less than 16 years of age and apparently in charge at his or her place of employment;
4. If the person so to be served has chosen a _domicilium citandi,_ by delivering or leaving a copy thereof at the _domicilium_ so chosen;
5. If the plaintiff or his or her authorised agent has given instructions in writing to the sheriff to serve by registered post, the process shall be so served: Provided that a debt counsellor who makes a referral to court in terms of section 86(7) (c) or 86(8)(b) of the National Credit Act may cause the referral to be served by registered post or by hand.
6. Where the person to be served with any document initiating application proceedings is already
represented by an attorney of record such document may be served upon such attorney by the party initiating the proceedings.[5]
It can never be successfully argued that Corporate South Africa is unable to reach a debtor by means of judicial service of summons.
In _Minister of Trade & Industry of RSA v Farocean Marine (Pty) Ltd_ [6] at paragraph 35, the court stated that Section 12(3) thus aims to achieve a balance between these two opposing interests, and ensures that negligent, rather than innocent, inaction is penalised. Accordingly, the yardstick to be used in determining the standard of care required of the creditor is:“. . . to do no more than that what could be expected, in the circumstances, of a reasonable man. _Jacobs v Adonis_ 1996 (4) SA 246 (C) at 253B.
According to Loubser(1996:102), section 12(3) applies where the creditor is ignorant of either the identity of the debtor or the facts from which the debt arises, or of both, and where the creditor could not have acquired the requisite knowledge by exercising reasonable care. The onus is on the debtor to show when the creditor knew or was deemed to know of the debtor’s identity and the incidence of this burden of proof does not alter merely because the facts happen to be within the knowledge of the creditor. Loubser correctly adds that the court will take cognizance of the handicap under which the debtor may labour where the facts concerning the creditor’s awareness are within the creditor’s exclusive knowledge, and in these circumstances less evidence will be required of the debtor to establish a prima facie case. Loubser(1996:103)


6.5.5 Corporate South Africa is by and large an exception to section 13 of the 1969 Act.

Banks, financial institutions and major retailers are juristic persons. They have natural persons in their employ. To this end the aforementioned can never be a minor, insane and it’s very rare that such corporate companies will be under curatorship. A juristic person can never be married to a natural person. It may however occur that a senior manager working for a juristic person is married to a natural person. It is unlikely that Banks, Financial Institutions and major retailers will have a partnership agreement with an unemployed person that is in debt. Quantitative research revealed that 90% of all respondents were unemployed when contacted by the creditor.

[1] Loc cit n 4.

[2] Vide research analysis page of this work and vide annexure A

[3] Harold Gunase v Ramesh Anirudh 2011 ZA SCA 231

[4] In _GERICKE v SACK_ 1978 (1) SA 821 (A) Page 830


[5] Vide Faris JA and Hurter E. The Students Handbook for Civil Procedure. 5th Ed. Lexis Nexis. Durban. 2010. Page 160

[6]Minister of Trade & Industry of RSA v Farocean Marine_ (Pty) Ltd_ [2006] 1 All SA 644 (C)

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## Citizen X

My single most important point in post 5 is this: If a debt collector or the creditor contacted you; then this is sufficient evidence that they have all your contact details!How else would they argue that they contacted you?
So section 12(3) of the 1969 Act can never be said to be really applicable to corporate South Africa as they do contact you to demand payment, they can conduct a trace alert and they also have all your personal information on their computer systems. If your details have changed , a simple trace alert will reveal all your latest details

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## Citizen X

> Post 5
> 6.5.3 Debtors wilfully preventing creditor from becoming aware of knowledge of the debt
> Section 12(2) of the 1969 Act reads if the debtor wilfully prevents the creditor from coming to know of the existence of the debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt.[1]
> Quantitative research revealed that Banks, Financial Institutions and major retailers do have sufficient knowledge of such debt due to their information technology infrastructure.[2] They have computer systems in place as well as support staff to immediately act on the existence of a debt that is due. 2542 respondents to a questionnaire, out of 3086 that responded, stated that they either had an account with a bank, major retailer or telecom/cell-phone provider. This is 82%. In all these cases their creditor had adequate information technology in place to inform them when a debtor stops paying.
> 6.5.4 Knowledge of the debtor
> Section 12(3) of the 1969 Act reads, a debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.
> In _Harold Gunase v Ramesh Anirudh__[3]_ 2011 ZA SCA 231, at paragraph 14 the court said section 12(3) imposes a duty on the creditor to exercise reasonable care to obtain knowledge of the identity of the debtor and the facts from which the debt arises. A creditor is not allowed to postpone the commencement of the running of prescription by his failure to take necessary steps.
> Quantitative research revealed that 2976(96%) of the respondents provided that they have been contacted by the creditor or the creditors agent several years after making the last payment on their account(s). This in and of itself is _prima facie_ evidence that if a creditor can contact you telephonically then there is no wilful conceal of a debtors identity. Creditors have adequate debtor information on their computer systems and are subscribers to either ITC Transunion, XDS or Experian. A simple trace alert will reveal the debtors current contact information.
> In _GERICKE v SACK_ 1978[4] at page 830. DIEMONT JA, provided inter alia that, in order to establish the identity of the person on whom service is to be effected the sheriff will require the name and address of the debtor. Our South African Law is not constant and enduring and is subject to amendment. The Magistrates Court Rules have been amended. Rule 9(3) accommodates various methods in which service of summons can take place. This includes:
> ...


With the benefit of hindsight, I now realise that I could have clarified far more than I actually did about section 13 of the 1969 Act! This work was subject to deadlines! I never had the complete benefit of time, I will tell you more about that later! *Let me resolve as follows: Section 13 states*:
*"13 Completion of prescription delayed in certain circumstances*
(1) If-
_(a)_ the creditor is a minor or is insane or is a person under curatorship or is prevented by superior force including any law or any order of court from interrupting the running of prescription as contemplated in section 15 (1); or
_(b)_ the debtor is outside the Republic; or
_(c)_ the creditor and debtor are married to each other; or
_(d)_ the creditor and debtor are partners and the debt is a debt which arose out of the
partnership relationship; or
_(e)_ the creditor is a juristic person and the debtor is a member of the governing body
of such juristic person; or
_(f)_ the debt is the object of a dispute subjected to arbitration; or
_(g)_ the debt is the object of a claim filed against the estate of a debtor who is deceased or against the insolvent estate of the debtor or against a company in liquidation or against an applicant under the Agricultural Credit Act, 1966; 
_(h)_ the creditor or the debtor is deceased and an executor of the estate in question has not yet been appointed; and
_(i)_ the relevant period of prescription would, but for the provisions of this subsection, be completed before or on, or within one year after, the day on which the relevant impediment referred to in paragraph _(a)_, _(b)_, _(c)_, _(d)_, _(e)_, _(f)_, _(g)_ or _(h)_ has ceasedto exist,
the period of prescription shall not be completed before a year has elapsed after the day referred
to in paragraph _(i)_.
(2) A debt which arises from a contract and which would, but for the provisions of this subsection, become prescribed before a reciprocal debt which arises from the same contract becomes prescribed, shall not become prescribed before the reciprocal debt becomes prescribed."

*So, now you can see very clearly the point I'm trying to make*, this section 13 may apply to very small creditors but it can never be said to apply to banks and major retailers. There are notable exceptions i.e. the debtor is outside the country overseas. This time spent overseas will not be included in the prescription period!

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## Citizen X

Post 6
7. The difference between an extinctive prescription claim and a special plea of prescription.
_In Standard General Insurance Co Ltd v Verdun Estates_ _(Pty) Ltd[1]_ the court endorsed the concept of strong prescription. The inference being that the simple passage of time will extinguish a debt just as the 1969 Act says it will. 
There is a material difference in raising a special plea of prescription and claiming extinctive prescription. The former is claimed directly from the creditor by the debtor whereas the latter is raised as a special plea in Court. In law we use precedents, such as the notice of intention to defend, precedent. To this practical end, to promote certainty and finality, I developed a precedent which can be used to claim extinctive prescription directly from the creditor. I made such precedent freely available for use on the internet.[2]
The result could never have been anticipated; literally hundreds of South Africans from many different provinces successfully claimed extinctive prescription using this precedent and received a signed letterhead from the creditor confirming the same in writing.
I submit that a creditor who still sues out summons after the fact of an extinctive prescription claim with such a precedent should be visited with severe penalties in terms of costs of suit and damages. I qualify this by stating that such a creditor knows it does not have a cause of action, as the precedent invoked the Prescription Act and made it very clear that if summons is still sued out, a notice of intention to defend will be filed, a special plea of prescription will be raised and they will be a counter claim. As at todays date, the court rolls at all our civil courts are already burdened. The Court should take a strict view where a debtor has claimed extinctive prescription from the creditor in writing and the creditor still sues out summons for a matter that has no prospects of success. The court should dismiss the claim, uphold the special plea, grant costs to the defendant as well as grant a defendants counter claim for damages for inconvenience of litigation on a matter that has no prospects of success.
Section 17(1) of the Prescription Act makes provision for extinctive prescription to be invoked by any party to litigation and section 17(2) makes provision for the court to allow prescription to be raised at any stage of court proceedings.[3]
This is where the concept of a special plea of prescription alternatively raising extinctive prescription as a defence has its proper place.
According to UNISA(2011:61, 62), a plea on the merits deals with the merits of the plaintiffs claim as set out in his or her declaration or particulars of claim, as the case may be. A special plea on the other hand, is a means of raising an objection on the basis of certain facts which do not appear in the plaintiffs declaration or particulars of claim and has the effect of destroying or postponing the action. [4]

The special plea can include the plea on merits as well as the special plea of extinctive prescription .A special plea of extinctive prescription is known as a plea in abatement. This is so because it will have the effect of destroying the plaintiffs action.[5]


[1] 1990 2 SA 693 A

[2] Vide: http://www.theforumsa.co.za/blogs/entry.php/35-Debt-How-to-claim-prescription-in-practice-and-how-to-enter-a-special-plea; http://www.theforumsa.co.za/forums/showthread.php/10369-Debt-Legally-cancelling-a-debt-over-3-years-old; http://www.theforumsa.co.za/forums/showthread.php/11094-Summons-what-you-need-to-do? & http://www.theforumsa.co.za/forums/showthread.php/11428-Summons-notice-of-intention-to-defend-and-plea-in-practice?highlight=

[3] Supra n 4: Section 17(1) & (2)

[4] Supra n 47. Page 61 & 62.

[5] Confer n 47. Page 62, para 5.

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## Citizen X

Footnotes won't make any meaningful sense as I've resolved to break up a document into posts! That being said, A full list of references will be provided at the end of this work. I will then resolve to submit the entire PDF file as an attachment. This will be to prove research integrity and cite the relevant sources in a chronological manner

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## Dave A

It's unfortunate that the footnote referencing doesn't do well in a clickable sense, but they certainly do the job from a referencing point of view.   :Smile:

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## Citizen X

> It's unfortunate that the footnote referencing doesn't do well in a clickable sense, but they certainly do the job from a referencing point of view.


A very good morning to you Dave,

The challenge I'm having is that I'm starting a new individual post by copying, cutting and pasting from an existing word document where the footnotes are automatically synchronized. The problem is that when you simply cut out a section as I have been doing in these preceding posts, they won’t always make sense especially when you say refer to n 4, when the person refers tries to do this, note 4 cannot be reconciled to what has been said. That said, when I make the final post which will be the full PDF doc, it will make sense. I chose to do it like this stages, so if there’s any question and/or queries, then it can be dealt with in a meaningful way  :Cool:

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## Citizen X

7.1 Example of Plaintiff’s particulars of claim(Annexed to simple summons)


*ANNEXURE “A”* 
1. The Plaintiff and Defendant are the parties cited on the face of the summons to which these particulars of claim are attached. The defendant has chosen the address reflected on the face of the summons as domicilium citandi et executandi for the purpose of this action. 
2. In terms of a written Agreement concluded between the Plaintiff and Defendant, the Plaintiff at the Defendant’s instance and request, issued a credit card to the Defendant and afforded credit card facilities to the Defendant subject to the Plaintiff’s terms and conditions of use thereof, in terms whereof the Plaintiff lent, advanced and disbursed money to, and on behalf of the defendant. 

3.The material, expressed and/or implied alternatively tacit terms of the agreement are the following. 
3.1 The Defendant authorised the Plaintiff to make payment on the Defendant’s behalf in respect of all purchases of goods and/or services made and cash advances obtained by the defendant through the use of the credit card, or in respect of any other charges or disbursements arising from the use of the credit card and Defendant would be liable to the Plaintiff for such amounts: 
3.2 Any amounts due by the Plaintiff to the Defendant and the Defendant would be obliged to pay the Defendant at its card division, the amount stipulated on the monthly statement. In the event of the Defendant failing to deny his liability or raising a query regarding any debit on the account in writing within thirty (30) days of the date indicated on the statement as the payment due date, the defendant would deemed to have admitted his liability to the Plaintiff in respect of such a debt. 
3.3 In the event of the Defendant’s account reflecting a debit balance after the processing of any transaction referred to in paragraph 3.1 above, the defendant would be liable to the Plaintiff for interest thereon, capitalised monthly in arrears, on the daily balance outstanding from time to time. 
3.4 In the event of the Defendant breaching the terms and conditions of the Credit Card facility, the full amount, of the Defendant’s indebtedness to the Plaintiff, would immediately become due and payable to the Plaintiff; 
3.5 A certificate signed by any authorised employee of the Plaintiff, whose appointment and authority shall not be necessary to prove shall constitute prima facie evidence of the outstanding balance being due and payable by the Defendant to the Plaintiff; 
3.6 All payments made by the defendant will only be deemed to have been made when credited to the Defendant’s credit card account 
3.7 The Defendant agreed not to utilize the card in any manner which would result in the total amount owing on the account exceeding the credit limit which the Plaintiff which the Plaintiff had granted him in respect of the credit card. 
3.8 In the event of the Defendant failing to comply with any of the conditions of use of the Credit Card the full amount of the Defendant’s indebtedness to the Plaintiff would immediately become due and payable 
4. The agreement between the parties is subject both to the Usury Act 73 of 1968 and the National Credit Act 34 of 2005 
5. The Plaintiff has complied with all its obligations in terms of the agreement. 
6. The Defendant utilized the abovementioned credit card and in consequence thereof became indebted to the Plaintiff in the sum of R21 000 together with interest of 16% from 30/06/2005 to date of final payment, which amount is due and payable and which amount despite demand, the Defendant has failed, alternatively refused, alternatively neglected to pay. 
7. The Plaintiff is entitled to approach the court for an order as envisaged in section 130 of the National Credit Act 34 of 2005 in that 
7.1 The Plaintiff issued a notice to the Defendant in terms of section 129 and delivered the same in the prescribed manner; 
7.2 Despite this the Defendant has not responded to the notice alternatively has responded to the notice by rejecting the Plaintiff’s proposal 
7.3 The time periods stipulated in section 130 has lapsed 
7.4 The Plaintiff has no knowledge of any debt review proceedings instituted by the Defendant as provided for in section 86 of the national Credit Act 34 of 2005 


WHEREFOR the Plaintiff prays for judgement against the Defendant for: 
1. Payment of the sum of R21000 
2. Interest thereon at a rate of 16% from 30/06/2005 
3. Costs of suit 
4. Further and/or alternative relief 






7.2 Example of special plea

IN THE MAGISTRATES COURT FOR THE DISTRICT OF *JOHANNESBURG*
HELD AT *JOHANNESBURG*

CASE NO: 6003/5103
In the matter between:

*Bank A* PLAINTIFF

and

*MR B* DEFENDANT


*DEFENDANT’S SPECIAL PLEA*










*The defendant pleads as follows to the Plaintiff’s summons and particulars of claim*

*AD SPECIAL PLEA: PLEA IN ABATEMENT*
*KINDLY TAKE NOTICE* that Defendant pleads that the debt for which summons was sued out is prescribed in terms of section 11(d) of the Prescription Act 68 of 1969 and further that the Defendant has claimed extinctive prescription from the Plaintiff

*The Defendant raises the defence of extinctive prescription. The Defendant pleads to this Honourable court that on this ground alone the Plaintiff’s action ought to be dismissed with costs.*

The Plaintiff’s claim is based on a credit card contract which was concluded on 20 January 2005. The defendant made monthly payments for the months of January, February, March, April and May of 2005. The defendant lost his job on 30 June 2005. On the 30 July 2005, the plaintiff’s claim fell due;The Plaintiff had three(3) years from the date on which the debt fell due( 30 July 2005) to legally collect the debt from the defendant which the plaintiff failed, alternatively refused, alternatively neglected to do;The debt prescribed on 30 July 2008. The defendant claimed extinctive prescription from the plaintiff on 10 August 2008 which the plaintiff either failed, alternatively neglected alternatively refused to acknowledge and/or process the defendants claim for extinctive prescription;The was no wilful concealment of the defendant’s identity and/or contact details from the plaintiff in terms of section 12(2) of the Prescription Act 68 of 1969Plaintiff’s summons was served on defendant on 15 February 2012 , which is more than three years after the date on which the claim arose, which such claim arose on 30 June 2005In the premises, the plaintiff’s claim is prescribed in terms of section 11(d) of the Prescription Act 68 of 1969.*AD MERITS*
*AD PARAGRAPH* *1 THEREOF*
The defendant admits the contents of this paragraph
*AD PARAGRAPH* *1 THEREOF*
The defendant admits the contents of this paragraph
*AD PARAGRAPH* *1 THEREOF*

The defendant denies the contents of this paragraph and puts the plaintiff to the proof thereof. The defendant states his defence as extinctive prescription in terms of section 11(d) of the Prescription Act 68 of 1969. The defendant states and confirms for the record that he did claim extinctive prescription from the Plaintiff on 10 August 2008 which the plaintiff either failed, alternatively neglected alternatively refused to acknowledge and/or process the defendants claim for extinctive prescription

*Therefore the Defendant prays that the Plaintiff’s claim be dismissed with costs*

*COUNTERCLAIM*




1.
_Brevitas causa_ the parties are referred to as in convention.

2.
Paragraphs 1 and 2 of plaintiff's particulars of claim are referred to as if specifically incorporated herein.
3.
The Defendant claimed extinctive prescription from the Plaintiff to attain the finality, alternatively closure, alternatively certainty, alternatively the extinguishing of the debt. The Defendant’s intention, by virtue of his extinctive prescription claim, was to create such certainty as to the status of the debt, that there could be no reasonable doubt whatsoever after the fact of the extinctive prescription claim that the debt is extinguished and is no longer collectable. 
4.
The Defendant claimed extinctive prescription from the Plaintiff via registered mail, electronic mail and personal service. The intention was, that by invoking section 11(d) of the Act, the defendant would not have to contend with a situation where there remains uncertainty as to the existence of a debt.
5.
The Defendant claimed extinctive prescription from the Plaintiff to avoid a situation where in the absence of an extinctive prescription claim that can be proved, the Plaintiff sues out summons and the Defendant cannot prove that he claimed extinctive prescription. The Defendant claimed extinctive prescription from the Plaintiff to avoid a situation where he would have to file a notice of intention to defend, file a plea and appear in court.
6.
The Defendant has suffered damages in the form of injury to personality.

7.
7.1 Infringement of Defendant’s personality: The Plaintiff’s incessant telephonic and letter demands for payment after the fact of the Defendant invoking the Prescription Act and claiming extinctive prescription from the Plaintiff is an intentional infringement of the Defendant’s personality. The Plaintiff infringed the Defendant’s personality by continually alleging that Defendant owes the Plaintiff money. The Plaintiff is morally blameworthy for such personality infringement;
7.2 Pain and suffering(Mental integrity): The Plaintiff’s incessant telephonic and letter demands for payment after the fact of the Defendant invoking the Prescription Act and claiming extinctive prescription from the Plaintiff is a negligent infringement of the Mental Integrity. The Plaintiff infringed the Defendant’s Mental Integrity by continually demanding payment. Such demands have placed unnecessary stress on the Defendant. 
7.3 Delictual liability of causing the Defendant to suffer inconvenience. The Plaintiff suing out summons after the fact of the Defendant invoking the Prescription Act and claiming extinctive prescription from the Plaintiff has caused the Defendant inconvenience. Such inconvenience, manifest in the Defendant taking off from work. The Defendant had to take off from work in order to consult with an attorney.

Wherefore Defendant prays for judgment against Plaintiff for:
a) Payment of R30 000
b) Interest on the above amount at 15,5% a _tempore morae_
c) Cost of suit.
d) Further and/or alternative relief.



Signed at Johannesburg on this _______________day of June 2012

_____________________________
Attorneys for Defendant
XYZ
10 Fictitious Street
Soweto
1820
TO: The Clerk of the Court
Johannesburg
TO: Mr Shark
ATTORNEYS FOR PLAINTIFF
ADDRESS: XYZ Made up Street, Johannesburg, 2000

Received copy hereof on this the
_____ day of *2012*

_________________________________
ATTORNEYS FOR PLAINTIFF

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## Citizen X

Post 8
8. The need to invoke extinctive prescription when claiming prescription directly from a creditor
Should we conclude that the 1969 Act has a strong extinctive prescription effect then it begs a simple question; why does a debtor need to claim extinctive prescription from the creditor? Alternatively, why does a debtor need to invoke section 11(d) of the 1969 Act?
The answer can be found in the simple fact that there is no law precluding a creditor from demanding payment on a debt several years after such a debt has become eligible for extinctive prescription. Two more specific answers can be formulated from section 10(3) of the 1969 Act. In the first place, Section 10(3) reads, notwithstanding the provisions of subsections (1) and (2), payment by the debtor of a debt after it has been extinguished by prescription in terms of either of the said subsections, shall be regarded as payment of a debt. The immediate inference is that the only logical way to bring about the legal certainty that the 1969 Act is designed to bring about is for the debtor is claim extinctive prescription. I submit that the preferred manner of claiming extinctive prescription is in writing along with the ability to prove service on the creditor. To appreciate fully what section 10(3) is in essence saying one simply has to be cognisant of the provisions it names namely subsection 1 and subsection 2 and in particular subsection one. Subsection one reads, a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt. Logical inference will have to dictate that if a debt will become prescribed after three years but that payment of debt will be regarded as payment and thus have the effect of causing prescription to run afresh that the debtor must do something to bring about certainty. This is claiming extinctive prescription.
In the second instance, section 17(1) and (2) provides that, A court shall not of its own motion take notice of prescription and further that A party to litigation who invokes prescription, shall do so in the relevant document filed of record in the proceedings: Provided that a court may allow prescription to be raised at any stage of the proceedings. The court is not going to take judicial notice of extinctive prescription, should the defendant not raise prescription as a defence that the matter will simply commence on the merits of the particulars of claim. It is this provision of this Statute that allows me to conclude without any doubt that despite the strong effect of extinctive prescription, it needs to be claimed from a creditor and where a creditor sues out summons, it needs to be raised as a special plea. The following will demonstrate that a reputable debt collecting agency perceives extinctive prescription from this perspective. 
Mr D had an …. credit card account. He signed an acknowledgement of debt on 31 August 2005; this caused prescription to run a-fresh from that date. In effect he became eligible for extinctive prescription on 31 August 2008. His debt was bought by ……. and handed over to……. They started demanded payment from Mr D. They were well within their rights to do so. Mr D was unaware of his rights. He came across my internet posts and requested my personal intervention. A limited power of attorney was drawn up. My mandate was as follows:

To obtain any and all statements pertaining to bank accounts where there is a direct or indirect dispute of the actual amount owing;Complete any and all Prescription Claim documents in terms of the Prescription Act 68 of 1969 on my behalf;Serve any and all Prescription Claim documents in terms of the Prescription Act 68 of 1969 on my behalf, to any creditor, attorney, debt collector, any bank, any financial institution, any company, business, natural person or juristic person whatsoeverTo claim prescription, on my behalf, from any creditor, attorney, debt collector, any bank, any financial institution, any company or business, juristic person and/or natural person.To state my case and/or argue any dispute(s) with regards to such extinctive prescription claim on my behalf.To escalate any relevant matter to the Banking Ombudsman on my behalf, and state my case if and where necessary and only after consultation with me;To file written complaints with any law society(where an attorney is involved) and unethical behavior is alleged only after consultation with meTo file any written complaint with the NCA regarding any non- compliance of any creditor that I have dealt with only after consultation with me


I subsequently served the extinctive prescription claim on ………. Their final response on a signed letterhead was as follows:-



“ Dear Sir,

We refer to above complaint received from your office. In terms of section 10(3) read with the provisions of section 17 of the Prescription Act 68 of 1969, a creditor is entitled to collect debts until such time as a debtor claims prescription. Your claim of prescription has been investigated and found to be valid. In consequence thereof we have now closed our file.”





My point of departure will always remain one of claiming extinctive prescription directly from a creditor. I reason as such because it is in essence the debtor and creditor which have a contractual relationship and not the debtor and the court, furthermore, if we accept that our courts are over- burdened, then this is one way of easing that burden as a creditor who after the fact of extinctive prescription being claimed by the debtor still sues out summons then they do so with the knowledge that they don’t have a cause of action. 

This action of suing out summons should be visited by further penalties on the creditor such as a counter claim for damages which the courts should grant. This would be in the interest of justice!
8.1 A case in point
In civil proceedings the benchmark measure is on a balance of probability alternatively a balance of preponderance. In criminal proceedings the benchmark measure is proof beyond a reasonable doubt. On the assertion that a debtor can claim extinctive prescription directly from a creditor short of going to court, I would like to be subject to proof beyond a reasonable doubt.
Such proof will emerge by way of simple inference. Analysis of quantitative results showed that 96% of respondents were contacted by the creditor and/or debt collector regarding a debt that was eligible for extinctive prescription. These creditors did not go to court to enforce their rights i.e. Send the final demand letter to the debtor in terms of section 129(1)(b)(i) of the National Credit Act 34 of 2005*[1]*; they did not sue out summons(depending on the amount claimed) either in terms of rule 5 and 6 of the Magistrates Court Rules;*[2]* neither did they sue out summons in terms of Rule 17 of the Uniform rules of court.*[3]*
*In essence they utilising measures to collect the debt short of going to court, no litigation is involved in their debt collecting techniques. Simple logic will have to dictate that if they not going to court then; why should a debtor go to court to relieve him/her of his obligation in terms of extinctive prescription? The debtor too can use techniques, short of going to court, to claim extinctive prescription in writing directly from the creditor.

*


*[1]* Vide National Credit Act 34 of 2005. http://0-discover.sabinet.co.za.oasi...ac.za/document.

*[2]* Vide Faris J and Hurter E. The Student Handbook for Civil Procedure. Lexis Nexis. 2010. Page 157 & 158

*[3]* Supra n 55.Page 75 & 76

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## Citizen X

Post 9
*8. The need to invoke extinctive prescription when claiming prescription directly from a creditor
*Should we conclude that the 1969 Act has a strong extinctive prescription effect then it begs a simple question; why does a debtor need to claim extinctive prescription from the creditor? Alternatively, why does a debtor need to invoke section 11(d) of the 1969 Act?
The answer can be found in the simple fact that there is no law precluding a creditor from demanding payment on a debt several years after such a debt has become eligible for extinctive prescription. Two more specific answers can be formulated from section 10(3) of the 1969 Act. In the first place, Section 10(3) reads, notwithstanding the provisions of subsections (1) and (2), payment by the debtor of a debt after it has been extinguished by prescription in terms of either of the said subsections, shall be regarded as payment of a debt. The immediate inference is that the only logical way to bring about the legal certainty that the 1969 Act is designed to bring about is for the debtor is claim extinctive prescription. I submit that the preferred manner of claiming extinctive prescription is in writing along with the ability to prove service on the creditor. To appreciate fully what section 10(3) is in essence saying one simply has to be cognisant of the provisions it names namely subsection 1 and subsection 2 and in particular subsection one. Subsection one reads, a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt. Logical inference will have to dictate that if a debt will become prescribed after three years but that payment of debt will be regarded as payment and thus have the effect of causing prescription to run afresh that the debtor must do something to bring about certainty. This is claiming extinctive prescription.
In the second instance, section 17(1) and (2) provides that, A court shall not of its own motion take notice of prescription and further that A party to litigation who invokes prescription, shall do so in the relevant document filed of record in the proceedings: Provided that a court may allow prescription to be raised at any stage of the proceedings. The court is not going to take judicial notice of extinctive prescription, should the defendant not raise prescription as a defence that the matter will simply commence on the merits of the particulars of claim. It is this provision of this Statute that allows me to conclude without any doubt that despite the strong effect of extinctive prescription, it needs to be claimed from a creditor and where a creditor sues out summons, it needs to be raised as a special plea. The following will demonstrate that a reputable debt collecting agency perceives extinctive prescription from this perspective. 
Mr D had an …. credit card account. He signed an acknowledgement of debt on 31 August 2005; this caused prescription to run a-fresh from that date. In effect he became eligible for extinctive prescription on 31 August 2008. His debt was bought by ……. and handed over to……. They started demanded payment from Mr D. They were well within their rights to do so. Mr D was unaware of his rights. He came across my internet posts and requested my personal intervention. A limited power of attorney was drawn up. My mandate was as follows:
1. To obtain any and all statements pertaining to bank accounts where there is a direct or indirect dispute of the actual amount owing;
2. Complete any and all Prescription Claim documents in terms of the Prescription Act 68 of 1969 on my behalf;
3. Serve any and all Prescription Claim documents in terms of the Prescription Act 68 of 1969 on my behalf, to any creditor, attorney, debt collector, any bank, any financial institution, any company, business, natural person or juristic person whatsoever
4. To claim prescription, on my behalf, from any creditor, attorney, debt collector, any bank, any financial institution, any company or business, juristic person and/or natural person.
5. To state my case and/or argue any dispute(s) with regards to such extinctive prescription claim on my behalf.
6. To escalate any relevant matter to the Banking Ombudsman on my behalf, and state my case if and where necessary and only after consultation with me;
7. To file written complaints with any law society(where an attorney is involved) and unethical behavior is alleged only after consultation with me
8. To file any written complaint with the NCA regarding any non- compliance of any creditor that I have dealt with only after consultation with me

I subsequently served the extinctive prescription claim on ………. Their final response on a signed letterhead was as follows:-

“ Dear Sir,
We refer to above complaint received from your office. In terms of section 10(3) read with the provisions of section 17 of the Prescription Act 68 of 1969, a creditor is entitled to collect debts until such time as a debtor claims prescription. Your claim of prescription has been investigated and found to be valid. In consequence thereof we have now closed our file.”


My point of departure will always remain one of claiming extinctive prescription directly from a creditor. I reason as such because it is in essence the debtor and creditor which have a contractual relationship and not the debtor and the court, furthermore, if we accept that our courts are over- burdened, then this is one way of easing that burden as a creditor who after the fact of extinctive prescription being claimed by the debtor still sues out summons then they do so with the knowledge that they don’t have a cause of action. 
This action of suing out summons should be visited by further penalties on the creditor such as a counter claim for damages which the courts should grant. This would be in the interest of justice!
8.1 A case in point
In civil proceedings the benchmark measure is on a balance of probability alternatively a balance of preponderance. In criminal proceedings the benchmark measure is proof beyond a reasonable doubt. On the assertion that a debtor can claim extinctive prescription directly from a creditor short of going to court, I would like to be subject to proof beyond a reasonable doubt.
Such proof will emerge by way of simple inference. Analysis of quantitative results showed that 96% of respondents were contacted by the creditor and/or debt collector regarding a debt that was eligible for extinctive prescription. These creditors did not go to court to enforce their rights i.e. Send the final demand letter to the debtor in terms of section 129(1)(b)(i) of the National Credit Act 34 of 2005 ; they did not sue out summons(depending on the amount claimed) either in terms of rule 5 and 6 of the Magistrates Court Rules; neither did they sue out summons in terms of Rule 17 of the Uniform rules of court. 
In essence they utilising measures to collect the debt short of going to court, no litigation is involved in their debt collecting techniques. Simple logic will have to dictate that if they not going to court then; why should a debtor go to court to relieve him/her of his obligation in terms of extinctive prescription? The debtor too can use techniques, short of going to court, to claim extinctive prescription in writing directly from the creditor.


8.2 Remedy in cases where the creditor refuses to process an extinctive prescription claim
Several debtors who visited my internet site complained about situations where despite the fact of having claimed extinctive prescription directly from the creditor the creditor refused to process the extinctive prescription claim. This indifference clearly doesn’t bring about the legal certainty which extinctive prescription is designed to bring about.
Being cognizant of the fact that many debtors who approached me for advice were unemployed, the best remedy that I could prescribe was an affidavit in which the debtor attested to the fact that an extinctive prescription claim was served on the creditor and the creditor failed, alternatively refused alternatively neglected to process the bona fide extinctive prescription claim.



AFFIDAVIT


I, the undersigned
Mr A

States under oath in English that:

1.

I am an adult male of 33 years of age with identity number 0000000000, residing at 400 Fictitious Street, Eldorado Park, 2180. 
2.

The facts contained herein, save where indicated otherwise, are within my own personal knowledge and are to the best of my knowledge and belief both true and correct.

3.
On 10 August 2008 I claimed extinctive prescription from XYX bank. I done so by email, telephone and by registered post. I sent a prescription claim letter via email to Steve Steve at the following email address: Stevefromxyz.bank@xyz.co.za and by registered post to: Steve Steve, XYZ Bank, Po Box 700, Johannesburg, 2000. I also telephonically claimed prescription from Steve at XYZ bank which Steve failed, alternatively neglected alternatively refused to acknowledge and/or process my bona fide extinctive prescription claim.




I know and understand the contents of this declaration.
I have no objection to taking the prescribed oath.
I consider the prescribed oath as binding on my conscience.



Mr A


It is hereby certified that the aforesaid declaration was signed and sworn in my presence 
on this the ___ day of _______________ 2012, at ________________, the deponent having confirmed and acknowledged:-

a) That he knows and understands the contents of this declaration;
b) that he has no objection to taking the prescribed oath;
c) and that he considers the prescribed oath as binding on his conscience.


___________________________
COMMISSIONER OF OATHS

Full names: __________________________________________________  __________
Address: __________________________________________________  __________
Rank/office held: __________________________________________________  ____
Area for which appointed: ________________________________________________

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## Citizen X

Post 10
*8.3 Debt review and extinctive prescription*
Qualitative research in the form of preparing, signing , serving an extinctive prescription claim on a creditor and arguing disputes around extinctive prescription will inevitably reveal difference in opinion and poorly formulated opinion. It does not necessarily mean that corporate retail apparel providers have a thorough understanding of extinctive prescription.
Miss E, had a clothing account with a major retailer. *She entered debt review process in early 2006, never seen the process through to completion, never allowed the debt counsellor to make any payment on her behalf and paid the debt counsellor nothing. The last payment made to the creditor was on or about August 2005. The debt became eligible for extinctive prescription on or about August 2008. Payment demands were made on or about April 2012.*
*In early August 2012, I claimed extinctive prescription on her behalf from the creditor. This is the official response I received from the head of the legal department of that major retailer.*


_“Dear Mr Naick,_ 

_I wish to confirm with you whether your client advised you that this account was stagnant, and therefore moved into the prescribed time environment, due to the fact that it had been held over as a Debt Review account?_ 


_In terms of the NCA an account that is under Debt Review may not be collected or acted upon by the credit grantor._”




*I naturally had an immediate rebuttal. I responded as follows:-
*“Dear Madam



1. I refer to the above matter 

2. I deem it necessary to respond as follows:
2.1 The written power of attorney authorises us to argue disputes surrounding the extinctive prescription claim
2.2 It’s common cause that the NCA has impacted the Magistrates Court and creditors;
2.3 Judicial process: Only judicial process by way of suing out summons can interrupt prescription. A debt counsellor is meant to pay the creditor all be it in small payments. It cannot be said that Judicial process has interrupted prescription in this individual case;
2.4 We submit that the prescription period should be calculated when the debt counsellor made the last payment to ……, i.e. when was this last payment made
2.5 *We further submit that section 86(10) of the NCA requires you to provide notice of termination of debt review especially when payments were not been received. It reads as follows:-(10) If a consumer is in default under a credit agreement that is being reviewed in terms of this section, the credit provider in respect of that credit agreement may give notice to terminate the review in the prescribed manner to(a) the consumer;(b) the debt counsellor; and (c) the National Credit Regulator, at any time at least 60 business days after the date on which the consumer applied for the debt review.”*
*2.6 I submit that the rationale of point 2.5 is to prevent a situation such as the one we are currently in!*
*2.7 I therefore submit that the fact of Miss E, having once been under debt review does not preclude her from claiming extinctive prescription from …….*; *In your summons you could have indicated that the time periods in terms of section 130 NCA has lapsed!*
2.8 The central idea of extinctive prescription is that a creditor should sue out summons at the earliest opportunity, in my opinion, this earliest opportunity is ideally within 3 months of the debtor not paying, the further brain child of extinctive prescription is that it’s there to promote certainty, finality and closure. It’s unfair for a debtor to have the possibility of summons hanging over his/her head for the rest of their lives.
2.9 I therefore submit that despite the fact of debt review, Miss Fraser’s extinctive prescription claim should be processed. We further submit that Miss Fraser was listed on ITC; the listing was automatically expunged after its lawful listing period. This was sufficient punishment for the lack of a better phrase.
Kindly revert”
My position can be reconciled with the always as I always look to the Supreme Court of Appeals for guidance in formulation of legal opinion. 


In Sally Ann Collett v First Rand Bank Limited & Another. 766/2010.SCA; the court provided, that when the time period stipulated in section 86(10), the creditor may give notice to terminate the debt review process. This time limit is 60 days of continued default i.e. no payments received



*The response to my submission was actually one that I had anticipated!* It was as follows:-


_“Dear Mr Naick_

_Kindly accept the attached e-mails, on which I had confirmed the account to have been moved into a prescribed status on our system, as the full and final communication confirming that it has indeed been prescribed. There is no further intention of performing collections activities on this account and it is permanently closed._



_At the very bottom of the e-mail audit trail is the …… disclaimer, identifying the source of the e-mail.”[1]_

*According to Loubser(1996:127), legally effective service of process on the debtor is required for interruption of prescription: Mere issue of such process out of court is not sufficient. The service of process on the debtor must furthermore commence proceedings against the debtor in a legally effective manner.

*






*[1]* Should SALRC require these actual emails to prove integrity of research, they will gladly be made available!

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## Citizen X

Post 11
9. A parallel between public law and private law
At the outset I submit that there is no valid comparison between public law and private law. I will however draw a parallel and demonstrate that the private law relationship is not always equal alternatively on equal grounds.

Public law is concerned with the exercise of authority by the government and deals with relationships where one of the parties is always the state as bearer of state authority. The public-law relationship is a vertical relationship, and therefore a relationship between someone in authority the subordinate (lower-ranking) individual whereas Private law is concerned with relationships between individuals who are on an equal footing.*[1]* 
Corporate South Africa in the form of Banks, financial Institutions and Major retailers that offer goods and/or services on credit are not on equal footing with a potential debtor. If one assesses all these organisations Income Statements and Balance Sheets, one will have to conclude that the vast majority of them are in a sound financial position. Their profitability is on a constant year by year increase. The potential debtor however has a future which is less certain as he/she may be in sound financial position today by virtue of income from a good job. This current positive state of affairs need not necessarily be a permanent one. A debtor may lose his/her job or become ill to a point where he/she can no longer work. When the creditor/debtor relationship commences, it’s on the terms and conditions of the creditor and not the debtor. The debtor doesn’t have the real opportunity of bringing his own terms and conditions along with him when he signs the contract for a personal loan. The debtor doesn’t even get an opportunity to raise concerns about a creditor’s terms and conditions. In fact if the debtor doesn’t accept the creditor’s terms and conditions by signing the contract, he/she will not even be considered for finance. Many debtors don’t even read the terms and conditions of the creditor before signing. In many cases they consent to the jurisdiction of a court which is not even in his/her Province. The creditor has resources to engage in litigation whereas many debtors are unemployed as at the time summons is sued out against them. If ones weigh things on this basis, then one would have to conclude that creditors should be compelled to sue out summons within 3 years of the date of the debt becoming due failing which a debtor becomes eligible for extinctive prescription. When a debtor claims extinctive prescription from the creditor, the creditor should process such extinctive prescription claim and finalize abandoning their claim in writing on a signed letterhead.
According to SALRC(2011:11) Creditors (claimants) and debtors (defendants) have competing interests. It is unfair that a debtor should be subject to an indefinite threat of being sued. It is in the interest of creditors to have as long as possible to institute a claim.
In principle this is exactly right, that being said, a creditor has far more resources in terms of financial and human resources and established infrastructure to collect a debt by lawful demand before a debt becomes eligible for extinctive prescription or to sue out summons.
Quantitative research clearly demonstrated 90% of the respondents were unemployed when they were contacted and further that 96% were contacted regarding a debt in which more than four years had elapsed from the date of that debt becoming due. 

*[1]* Administrative Law study Guide. Muckleneuk, Pretoria.UNISA.2008. Page 25(taken verbatim)

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## Citizen X

Post 12
10. Professional Ethics and an attorney providing a debt collector function

Mr B lost his job in late 2007. He did not default on payment to his creditors for dishonest, malicious or culpable reasons(_The full and further particulars of Mr B have been made available to the SALRC)._ He defaulted on payment because he no longer had the means to pay his account. He stops paying all his accounts in early 2008. Despite consistent telephonic and written demands for payments from these creditors and/or their attorneys he made no payment whatsoever and never acknowledged debt in writing or tacitly. In fact, he requested my assistance, for claiming extinctive prescription, such assistance subsequently was provided to him and extinctive prescription was successfully claimed for five accounts. In early April 2011, however, a debt collector or attorney contacted Mr B and threatened him with warrant of arrest should he not make payment. This person identified himself as an attorney and said, ‘If you don’t make a payment of a Hundred Rand (R100), a warrant of arrest will be issued and you will be arrested at your place of work in front of your employer and colleagues or at your home in front of your family.’ Mr B is a layperson to the law. He believed the representation which turned out to be a misrepresentation and made a payment of a Hundred Rand (R100) at the end of May 2011. He continued to believe this misrepresentation until March 2012 when he happened upon my internet posts on extinctive prescription. This debt was eligible for an extinctive prescription claim in early 2011. Section 10(3) of the 1969 Act provides that notwithstanding the provisions of subsections (1) and (2), payment by the debtor of a debt after it has been extinguished by prescription in terms of either of the said subsections, shall be regarded as payment of a debt. In the quantitative research I’ve conducted 1745 respondents out 3086(56%) answered ‘Yes,’ to the question: ‘I have been threatened with ‘warrant of arrest,’ unless I make payment.’ (Refer to page for complete findings and analysis) This is a textbook example of unethical behaviour by a legal practitioner. Mr B effectively altered his own legal position to his detriment by acting on the strength of a representation which is a misrepresentation. The legal question is should section 10(3) of the Act be disregarded under these circumstances? I submit that it should indeed be disregarded and his extinctive prescription claim should be processed as if no payments had been made. In this instance I submit that Mr B should escalate the matter to the Banking Ombudsman and do two things*1: raising alternatively pleading estoppel short of going to court 2: Claiming extinctive prescription despite section 10(3).*

*10.1 Estoppel* 
*Estoppel is a doctrine which operates in the following circumstance: where one person(call center agent calling under the auspices of an attorney) represents to another person(**Mr B**) that a certain set of facts exist(if you don’t pay you will be arrested) and the other person(**Mr B**) alters his legal position to his detriment on the strength of the representation(The debt was prescribed or near to prescription,* *Mr B* *altered his legal position to her detriment by making a payment on 26 May 2011, the person making the representation is precluded alternatively estopped from asserting that a different set of facts actually exist.* *Mr B* *pleads estoppel against the agent who represented himself to be an attorney and threatened* *Mr B* *to make a payment on an account that he knew was prescribed with the threat of warrant of arrest.* *Mr B* *acted on the strength of a representation which was a misrepresentation. He feared being arrested at his place of work and made a payment on an account that he knew was prescribed to prevent himself from being arrested. He made the payment under duress and threat. It was always* *Mr B’s* *intention to claim extinctive prescription which he done telephonically, A threat of arrest which is a misrepresentation caused him to alter his legal position to her detriment.* *Mr B* *should be placed in the position he would have been in had no misrepresentation been made; the position that he would have been in had no misrepresentation would be that the debt would be prescribed and his extinctive prescription claim should be considered as if no payment was made on 26 May 2011 and as such* *Mr B’s** extinctive prescription claim should be processed without further delay.**[1]*




*[1]* *Confer* *Unjustified Enrichment, Liability and Estoppel Study Guide 2.(2011).* *Muckleneuk, Pretoria.UNISA. Page 4*

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## Citizen X

Post 13

10.2 Law and a crisis of an ethical natureLaw is an honourable profession that dates back centuries. Law practitioners should conduct themselves in a manner that is respectful of the law. Honesty, integrity, credibility and high moral and ethical standards are key attributes for a legal practitioner. I accept the following assumptions*[1]*:


*(**1**) The legal profession is in a crisis and this crisis is of an ethical nature*.

*(2) The crisis in the legal profession cannot be addressed successfully by expecting lawyers to follow the rules of an ethical code or by teaching prospective legal* 
*pra**ctitioners the rules of professional conduct*.
Indeed, the traditional, legalistic pre-occupation with rules may, ironically enough, be one of the factors contributing to the crisis in the legal profession.
*(3) The crisis in the legal profession can be addressed only if:*
*(i) a more philosophical and critical approach to the ethics and ethical conduct of legal practitioners is followed, as was traditionally the case;*
*(ii) the professional nature of the legal profession is again critically scrutinized and reconstructed; and*
*(iii) a virtue-oriented approach is followed*.*[2]*




























*[1]* Vide Professional Ethics Study Guide(2012) Muckleneuk, Pretoria.UNISA.* Page vi(taken verbatim)*

*[2]* Vide Professional Ethics Study Guide(2012) Muckleneuk, Pretoria.UNISA. *Page vi(taken verbatim)*

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## Citizen X

Post 14

11. Choice of research frameworkI opted to use an integrated approach, i.e., both quantitative and qualitative research. Quantitative research in the form of a questionnaire and qualitative research in the form of the actual extinctive prescription claims of four subjects was used for this study.
11.1 Research Design and Methods
A researcher’s task actually begins before the actual research itself is carried out. It starts with a problem statement. I had six such problem statements. Research design is the master plan that the researcher has formulated in order to lend credibility to his/her problem statements. A research design is a researcher’s compass as it will direct the planning, organising and actual implementation of the entire research process. All research has some value, once a researcher has properly formulated assumptions; it is these assumptions that will guide all thinking and activities involved in the research process.*[1]* Gilmore S (2011:1) states that research in law requires one to use a great many information sources.
Prof Denscombe (2002:25) articulates research objectives must be clear and concise. Research objectives can only meet these requirements if they are realistic, attainable and measurable.*[2]*
According to van der Walt and Nienaber(2007:238), Quantitative studies in human sciences usually emulate the methods of the natural sciences by using, among others, questionnaires, surveys and statistics. Such studies are cross-disciplinary both in terms of the methods used and the sources from which data are obtained. Qualitative studies depend on structured and unstructured group and individual interviews and on observation studies. Such a study is cross-disciplinary because the student should have a sound grounding in linguistics and knowledge of all the languages and qualitative research methods concerned.
According to Kok et al(2008:42) research does not only entail the location and analysis of material, but also the presentation of research results in a relevant format that professes academic integrity.








When one conducts a litmus test of a present situation, this can be seen as a descriptive type of research. When one employs this technique the objective is simply reporting on a situation as it current exists.*[3]*

It is against this framework that I embarked on both quantitative and qualitative research with the objective of presenting my finding in a manner that professes academic integrity.*[4]*
11.2 Quantitative research
A questionnaire which is essentially a survey research technique, was utilised to gain an understanding into the perceptions of respondents regarding debt, debt collecting and extinctive prescription(Kerlinger 1988: 377). Respondents were solicited from the internet on a popular South African business and information forum: The Forum SA*(TFSA remains the internet site where I solicited the vast majority of my respondents; 3086 processed; 2598 unprocessed).* The brainchild was that there were no actual costs, only individuals affected by debt would visit that particular thread. My actual target audience was reached in a very scientific manner in that respondents who had no interest alternatively immediate information need would not have visited that thread and would also not have heeded the call to request the questionnaire via email, complete the questionnaire, save it and return the finished product via electronic mail.
Three Thousand and eighty six respondents (3086) respondents heeded my call to take part in a questionnaire. I solicited them at : http://www.theforumsa.co.za/blogs/entry.php/35-Debt-How-to-claim-prescription-in-practice-and-how-to-enter-a-special-plea; http://www.theforumsa.co.za/forums/showthread.php/10369-Debt-Legally-cancelling-a-debt-over-3-years-old; http://www.theforumsa.co.za/forums/showthread.php/11094-Summons-what-you-need-to-do? & http://www.theforumsa.co.za/forums/showthread.php/11428-Summons-notice-of-intention-to-defend-and-plea-in-practice?highlight=

*[1]* Confer Botes A.The Operationalisation of a Research Model in Qualitative Methodology. 1995. Page 6

*[2]* Vide Denscombe M. Ground research for Good Research: A 10 Point Guide for Social Researchers. Open University Press. 2002. Page 25(my interpretation)

*[3]* Confer Creswell J W. Research design: Qualitative and Quantitative Approaches. 1994

*[4]* Confer Kok et al. Skills workbook for law students. Juta & Co. ltd. Cape Town. 2008. Page 42.

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## Citizen X

11.3 Post Mortem Questionnaire
The results and analysis are includes in one table for ease of reference. In the results section, where findings alternatively conclusions were forged they were given reference under the heading ‘conclusions.’ The following are the results, analysis and conclusions of such quantitative research.

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## Citizen X

Post Mortem QuestionnaireThree Thousand and eighty six(3086) people responded*Number of respondent’s example 1*. Yes 2800 Respondents 91 % of a total of 3086; No 286 respondents 9 % of a total of 3086 respondents

Question/Statement
Question/Statement type
Results

1.    I have more than one debt

Yes.                                            No.
Single select Yes/No
 Yes 2800 91 %  No 286 9%

2.    How did you find out about extinctive prescription?


a.  Internet


b.  Attorney/Legal advisor


c.  Other

Single select Multiple Choice
Internet 2653 86% 
Attorney/Legal advisor 167 5%
Other 266 9%

*Conclusion: Most South Africans are unaware of extinctive prescription*


3.    Are you employed?


Yes.                                              No.
Single select Yes/No
Yes 2041 66% No 1045 34%

4.    This debt is more than 3 years old(No payment was made on my account for 3 years from the date of the last payment)

Yes.                     No.                     NA
Single select Yes/No/NA
Yes  2 936 95% No 150 5%
*Conclusion: Creditors do pursue old debts in the hope that debtors will be ignorant of extinctive prescription and make a payment or acknowledge debt*

5.    This debt is more than 4 years old(No payment was made on my account for 3 years from the date of the last payment)

Yes.                     No.                     NA
Single select Yes/No/NA
Yes 2936 95% No 150 5%
*Conclusion: Creditors do pursue old debts in the hope that debtors will be ignorant of extinctive prescription and make a payment or acknowledge debt*

6. This debt is very old(No payment was made on my account for many years: Between 5 years and 10 years) 

Yes.                     No.                     NA
Single select Yes/No/NA
Yes 2356 76% No 580 19% NA 150 5%
*Conclusion: Creditors do pursue old debts in the hope that debtors will be ignorant of extinctive prescription and make a payment or acknowledge debt*

7.     What was your reason for not paying your account

a.     Unemployed     b. Retrenched      c. Other

Single select Multiple Choice
a. Unemployed     1762 57%
b. Retrenched        754  24%
c. Other                570   19%






8.     Have you received a letter from the creditor demanding money?

Yes.                     No.                     NA
Single select Yes/No/NA
Yes 653 21% No 1860 NA 573 18%
*Conclusion: Creditors do pursue old debts in the hope that debtors will be ignorant of extinctive prescription and make a payment or acknowledge debt*

9.     Have you received a summons?

Yes.                     No.                     NA.
Single select Yes/No/NA
Yes 212 7% No 2874 93% NA 0

10.   I am aware that where that I have a defence that I can use in court in the following circumstance: The amount claimed is for a personal loan. An uninterrupted period of 3 years has passed by from the date of the last payment. In this period, I have made no payments, I have not acknowledged debt in writing or telephonically and I have not been overseas during this 3 year period.
1.Strongly disagree   2. Agree    3. Disagree 4. Strongly agree




Rate items on a scale
1.Strongly disagree     :2567 83%
2. Agree                    :   58    2%
3. Disagree                :   73    2%
4. Strongly agree        : 388
*Conclusion: Most South Africans are unaware that despite the fact of summons on a prescribed debt, they can successfully raise a special plea of extinctive prescription in court*

11.   I am aware that a judgement debt is listed on credit bureaus for 5 years before it is automatically expunged

Yes.                                              No.


Single select Yes/No
Yes 1380 45 % No 1706 55%

Question/Statement
Question/Statement type
Results

12.   I am aware that a default listing remains on ITC for 2 years before it is automatically expunged

Yes.                                              No.


Single select Yes/No
Yes 2800 91 % No 286 9%

13.   I am aware that a poor payment profile reflects on ITC for 5 years

Yes.                                              No.
Single select Yes/No
Yes 2800 91% No 286 9%

14.   I have been contacted by the creditor/debt collector or attorney who demanded payment for an account or debt that is more than 4 years old(This account was not paid at all for a period of 4 years and in these 4 years I have not been contacted at all until fairly recently)
Yes.                                              No.

Single select Yes/No
Yes 2976 96% No 110 4%
*Conclusion: Creditors do pursue old debts in the hope that debtors will be ignorant of extinctive prescription and make a payment or acknowledge debt*

15.   I have been threatened with ‘warrant of execution,’ unless I make payment

Yes.                                              No.
Single select Yes/No
Yes 435 14% No 2651 86%

16.   I have been threatened with ‘warrant of arrest,’ unless I make payment

Yes.                                              No.
Single select Yes/No
Yes 1745 56% No 1341 44 %
*Conclusion: Certain Creditors do use unethical means to cause prescription to run afresh* 




17.   I understand the difference between a warrant of arrest and a warrant of execution

Yes.                                              No.

Single select Yes/No
Yes 348 11% No 2738 89%
*Conclusion: Many South Africans believe everything the debt collector tells them*

18.   I am unemployed and informed the individual demanding payment of this. The individual demanding payment asked me to complete and affidavit and send it to them either by post, email or fax

Yes.                                              No.
Single select Yes/No
Yes 1603 52% No 1483 48%
*Conclusion: Many  Debtors act to their own prejudice by causing prescription to run a-fresh from the date of acknowledgement of debt*

19.   I am unemployed and informed the individual demanding payment of this. The individual demanding payment asked if anyone in my family could help me make small monthly payments

Yes.                                              No.

Single select Yes/No
Yes 2763 90% No 323 10%
*Conclusion: Many  Debtors act to their own prejudice by causing prescription to run a-fresh from the date of acknowledgement of debt*

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## Citizen X

19.   I am unemployed and informed the individual demanding payment of this. The individual demanding payment asked if anyone in my family could help me make small monthly payments

Yes.                                              No.
Single select Yes/No
Yes 2763 90% No 323 10%
*Conclusion: Many  Debtors act to their own prejudice by causing prescription to run a-fresh from the date of acknowledgement of debt*

20.   I am unemployed and informed the individual demanding payment of this. The individual demanding payment asked if I could manage to pay any amount of money between R10 – R150 per month

Yes.                                              No.




Single select Yes/No
Yes 2763 90% No 323 10%
*Conclusion: Many  Debtors act to their own prejudice by causing prescription to run a-fresh from the date of acknowledgement of debt*

Question/Statement
Question/Statement type
Results

21.   After the fact of making arrangements to pay, even a small amount, acknowledging debt in writing or having an affidavit commissioned and sent to the creditor/attorney or debt collector, I now realise that I have changed my legal position to my own prejudice by causing prescription to run afresh from the date that I made the payment, the date I sent the affidavit to the creditor or the date that acknowledged debt

Strongly disagree   2. Agree    3. Disagree 4. Strongly agree
Rate items on a scale
1.Strongly disagree     :120 45%
2. Agree                    :437  14%
3. Disagree                :231  7%   
4. Strongly agree        :788 25%
*Conclusion: After making payment or acknowledging debt debtors made a concerted effort via the internet to find out about their rights*

22.   I feel robbed now that I’m aware that had it not been for my payment or acknowledgement of debt, I could have claimed extinctive prescription and the debt would have been completely written off

Strongly disagree   2. Agree    3. Disagree 4. Strongly agree
Rate items on a scale
1.Strongly disagree     : 73 2%
2. Agree                    :
3. Disagree                : 
4. Strongly agree        :3013 98%
*Conclusion: After making payment or acknowledging debt debtors made a concerted effort via the internet to find out about their rights*





23.   The creditor/debt collector or attorney used unethical means and methods to get me to make a payment or acknowledge debt

Strongly disagree   2. Agree    3. Disagree 4. Strongly agree

Rate items on a scale
1.Strongly disagree     :120 5%
2. Agree                    :1065 34%
3. Disagree                :231  7%   
4. Strongly agree        :1670 54%
*Conclusion: Certain Creditors do use unethical means to cause prescription to run afresh* 





24.   Extinctive prescription can only be claimed in a court of law

Strongly disagree   2. Agree    3. Disagree 4. Strongly agree
Rate items on a scale
1.Strongly disagree     :  446 14 %
2. Agree                    :   
3. Disagree                :   
4. Strongly agree        : 2640 86%
*Conclusion: Most South Africans are unaware of extinctive prescription*


25.   Extinctive prescription can be claimed directly from the creditor

Strongly disagree   2. Agree    3. Disagree 4. Strongly agree

Rate items on a scale
1.Strongly disagree     : 2640 86% 
2. Agree                    :   
3. Disagree                :   
4. Strongly agree        : 446 14 %
*Conclusion: Most South Africans are unaware of extinctive prescription*

26.   After having studied the posts on extinctive prescription on TheForumSa I feel confident that I do have other debts that I can have extinguished by invoking the Prescription Act
Strongly disagree   2. Agree    3. Disagree 4. Strongly agree
Rate items on a scale
1.Strongly disagree     : 126 4%
2. Agree                    :   
3. Disagree                :   
4. Strongly agree        : 2960 96%
*Conclusion: The internet in particular online forums, especially The Forum Sa, is a powerful tool for helping people in real time* 

27.   I have used your precedent/template and covering letter*(that you have made freely available on TFSA)* and served this on the creditor and/or his attorney by email and registered mail or by email and personal service

Yes.                                              No.
Single select Yes/No
Yes 2543 82% No 543 18%
*Conclusion: The internet in particular online forums, especially The Forum Sa, is a powerful tool for helping people in real time* 

28.   The individual I dealt with at the bank, financial institution or creditor understood the nature of my claim, processed my claim and confirmed this on a signed letterhead

Strongly disagree   2. Agree    3. Disagree 4. Strongly agree















Rate items on a scale
1.Strongly disagree     : 1341 44%
2. Agree                    :   
3. Disagree                :   
4. Strongly agree        : 1745 56%

*Conclusion:* *Many financial institutions and major retailers don’t have rules, regulations, policy and procedure in place to process extinctive prescription claims*

----------


## Citizen X

29.   What do you understand by the following(please select one option, a, b, or c)
“Extinction of debts by prescription a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt. The periods of prescription of debts shall be the following:save where an Act of Parliament provides otherwise, three years in respect of any other debt.”

a.     Extinctive prescription takes place automatically


b.     I have to claim extinctive prescription from the creditor


c.      I can only raise prescription as a defence in a court of law

Single select Multiple-choice
a.Extinctive prescription takes place automatically 54 2%


b.I have to claim extinctive prescription from the creditor 1800 58%


c.I can only raise prescription as a defence in a court of law 1232 40%

*Conclusion: Despite the strong effect of extinctive prescription creditors are not precluded lawfully from collecting the debt, the only real way a debtor can get legal certainty is to invoke extinctive prescription*


30.   There should be laws in place which force creditors to have policy documents on extinctive prescription claims

Strongly disagree   2. Agree    3. Disagree 4. Strongly agree
Rate items on a scale
1.Strongly disagree     : 126 4%
2. Agree                    :   
3. Disagree                :   
4. Strongly agree        : 2960 96%

The following statements apply to a debt which you have. You are now aware that this debt is eligible for extinctive prescription. This type of debt becomes eligible for extinctive prescription after an uninterrupted period of 3 years has elapsed from the date of your last payment on this account. These debts include: Credit card debts, personal loan debts, vehicle finance debts, clothing account debts, furniture account debts. The creditors are banks, financial institutions and major creditors that sell goods on credit or offer finance. *To agree with the following statements, this must not be a judgement debt, you must not have made any payment for a full 3 years from the date of the last payment and you must not have acknowledged debt in writing or telephonically* 

31.   I have a debt that is eligible for extinctive prescription with a bank

Strongly disagree   2. Agree    3. Disagree 4. Strongly agree
Rate items on a scale
1.Strongly disagree     : 766 25%
2. Agree                    :   
3. Disagree                :   
4. Strongly agree        : 2320 75%




32.   I have a debt that is eligible for extinctive prescription with a major retailer

Strongly disagree   2. Agree    3. Disagree 4. Strongly agree

Rate items on a scale
1.Strongly disagree     : 2506 81%
2. Agree                    :   
3. Disagree                :   
4. Strongly agree        : 580 19%

33.   I have a debt that is eligible for extinctive prescription with a major telecom or cell phone provider
Strongly disagree   2. Agree    3. Disagree 4. Strongly agree

Rate items on a scale
1.Strongly disagree     : 1890 61%
2. Agree                    :   
3. Disagree                :   
4. Strongly agree        : 1196 39%

----------

Dave A (25-Nov-12)

----------


## Quintus

hi Vanash can you please sent me you email, need some urgent advise
Q

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## Citizen X

Post 14

Qualitative researchBackgroundConfidentiality between an attorney and client will always be held in high regard. Confidentiality is vital but _so is the integrity of research_. Mr A, B, C, D and Miss E are actual persons. Their full and further particulars including the accounts for which I successfully claimed extinctive prescription for has been are not for publication_! Aliases are utilized throughout this work in reference to an actual person who had one or more debts eligible for extinctive prescription and were contacted either by the creditor, the creditors attorney performing a debt collection function or a debt collector._ They were contacted after a considerable period had elapsed from the date that the debt became eligible for extinctive prescription. They sought some form of legal remedy. They chose the internet as a medium of information. They were not looking for general advice; they were looking for very specific answers. *They happened upon a business and information online forum called The Forum SA.[1]* I consider myselfprivileged to have made even one post on The Forum Sa. I too had learned a great deal from members on this business and information online forum.Mr A, B, C, D and Miss came across my posts on extinctive prescription. My posts were, and still is a living work as the idea is not only to provide a sound legal explanation, but in essence to assist people in real time as soon as possible after they posted a question, query, concern or dispute. The further idea is to equip fellow members to such an extent that they too can answer any question on extinctive prescription and assist whoever may happen upon such posts. This is the ultimate challenge! My posts includes usable attachments an extinctive prescription claim precedent or template (to be served on the creditor and/or their attorney), a covering letter for the creditor and/or their attorney, an affidavit (to be used where the debtor claimed extinctive prescription), insight into litigation surrounding a scenario where a creditor still sues out summons after the fact of an extinctive prescription claim, an example of a special plea and an example of a potential summons that they may receive regarding such a debt. I made it clear that my advice was not to substitute for the services of an attorney should the matter indeed proceed to court, but much rather, that should they follow my directives there would be no reasonable justification for a creditor failing to process their extinctive prescription claim and confirming the same in writing on a signed letterhead. I stated on a public forum that their extinctive prescription claim would be processed by the creditor should my directive be followed. This is where we separate theory from practice. Quantitative research revealed that 82% of the respondents have follow up on my directives and used my precedent with success. There were however a few individuals who were not successful and sought my individual intervention. This reinforced a simple notion in me: The law is inaccessible to the vast majority of South Africans1 You may have such a problem today, you need assistance now and not in four months time!This was an opportunity to get practical insight into extinctive prescription claims in South Africa. I was equal to the task. *A limited power of attorney was prepared and** Mr A, B, C, D and Miss E empowered me as agent.*The predetermined approach
My work is a live work in that the posts that I made on the internet are still active as at todays date and still receives visitors. Throughout this work, even before I analysed the results of the quantitative research I was assisting people from all over South Africa with responses to their questions and resolutions to the practical problems their individual cases presented. I concluded early on that many creditors dont have systems in place to process extinctive prescription claims, that many creditors dont appreciate the distinctive between an extinctive prescription claim and a special plea of prescription and further they believe that a debtor can only raise prescription as a defence in a court; despite the fact that they pursuing the debt short of going to court.
*I was presumptuous*; I wanted a successful result in a maximum of two weeks from the date of serving the extinctive prescription claim. The result I was determined to obtain was complete legal certainty that the debt is prescribed as per the extinctive prescription claim. I wanted a signed letterhead in which the creditor and or their attorney confirmed in writing that the debtor claimed extinctive prescription; that the claim was processed; that the creditor acknowledges that the debt is prescribed, that the creditor has/will update all credit bureaus accordingly and that the creditor has abandoned their claim.
I therefore postulated a covering letter as well as several attachments including the extinctive prescription claim. I was intent on avoiding unnecessary delay due to a lack of understanding of extinctive prescription on the part of a creditor.

To be continued...



*[1]* Vide http://www.theforumsa.co.za

----------


## Citizen X

The Financial Services Board Levy?

Its apparent that this work on extinctive prescription claims in South Africa is a live one in that South Africans keep coming forward with new problem areas in their extinctive prescription claims.
1. I submit that the Financial Services Board Levy(FSB Levy) is not a government tax subject to a 30 year prescription period but rather its your typical debt subject to the 3 year prescription period;
2. Someone out there please prove me wrong!

My personal intervention was requested for a demand being made on a Financial Service Board Levy. The last payment was made on or about 2007. This debt therefore became eligible for extinctive prescription in early 2010.

The initial letter of demand my client received is as follows:


Dear Sir / Madam, 

RE: OUTSTANDING ACCOUNT - FINANCIAL SERVICES BOARD 

1. We hereby confirm that we act on behalf of FINANCIAL SERVICES BOARD.

2. You have been handed over to us due to your failure to pay your outstanding account with our client.

3. Our instructions are that you are indebted to our client in the amount of R.,. An immediate payment of no less than R is required to avoid further action.

4. Additional costs and/or penalties may have accumulated on your outstanding account, for which you are liable for. Contact us urgently in order to set up an affordable repayment agreement. 

5. Should you fail to adhere to the above, the following may occur: 
Further legal costs/penalties may accumulate on your account; 

Legal action may be initiated; 

Details of the non-payment of the account may be reported to the CREDIT BUREAUS by our client, which can adversely affect your credit rating

Comment: The usual was done: Power of attorney drawn up and extinctive prescription claimed.

I was somewhat surprised by the response of the attorney of instruction:


Dear Mr Naik,
1. Your correspondence dated .. November 2012 has reference.

2. Section 11(a)(iii) of the Prescription Act, No. 68 of 1969 provides that _the periods of prescription of debts shall be thirty years in respect of any debt in respect of any taxation imposed or levied by or under any law_. 
3. The FSB imposes levies on financial institutions in terms of section 15A of the Financial Services Board Act, No. 97 of 1990 (the FSB Act) which provides that: _The board may impose by notice in the Gazette levies on financial institutions and may, subject to the provisions of this section, at any time in similar manner amend, substitute or withdraw any such notice_.
4. Any debt in the form of a levy imposed by the FSB on a financial institution therefore prescribes after thirty years (and not three) as it (the debt) is levied under a law and such law is the FSB Act.
5. Having regard to the aforementioned your clients prescription claim has been decline and is thus still liable for the outstanding balance on this account.
6. Enclosed please find an updated statement with banking details for ease of reference.
7. We await your clients urgent confirmation of payment.
Kind Regards
Comment: I simply could not accept this state of affairs, I responded as follows:-

Continues next page.....

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## Citizen X

Dear Madam,

1. I refer to your electronic mail dated ..November 2012, the contents of which have been duly noted;
2. I have written power of attorney to act on this matter and am therefore duly authorised to respond hereto;
2.1 Though in civil matters the benchmark measure is always balance of preponderance also known as balance of probability, I’m confident that by the last averment herein I will have proved Cecil James case beyond reasonable doubt. Let’s use the criminal benchmark measure, shall we?
3. I would firstly like to vest your attention on what section 11(a)(iii) states before I clarify my client’s position and instructions:
3.1. The periods of prescription of debts shall be the followingthirty years in respect of any debt in respect of any taxation imposed or levied by or under any law;
3.2 The context is really quite clear any taxation that is either imposed or any taxation that is levied.  Let’s look at this enacted text, alternatively Statute alternatively Act of Parliament in a different way. The main idea in paragraph iii is taxation; so the idea is that such taxation can be imposed or levied by or under any law. The inference is clear: another law such as the Customs Act can levy or impose this tax to be paid to the state as just that tax. The point of departure is the noun taxation. This taxation can be imposed or levied. I will turn to the Interpretation Act and the Income Tax Act in due course. I firstly would like to direct your attention to the ordinary dictionary meaning of taxation. Taxation is defined as money that has to be paid as taxes.[1]
3.3. I now would like to vest your attention on ‘taxes,’ tax is a noun: money that you have to pay to the government so that it can pay for public services.[2]
3.4 I now direct your attention to section 1 of The Income Tax Act 58 of 1962(as amended), entitled interpretation:*'tax'* _or 'the tax' or 'taxation'_*means any levy or tax leviable under this Act*; and for the purposes of Part IV of Chapter III includes any levy or tax leviable under any previous Income Tax Act;[Definition of 'tax' or 'the tax' or 'taxation' amended by s. 1 _(c)_ of Act 6 of 1963 and substituted by s. 19 (1)_(m)_ of Act 30 of 1998.]
3.5* I now  vest your attention to the Interpretation Act 33 of 1957(as amended) section 2[definitions]: “law”* means any law, proclamation, ordinance, Act of Parliament or other enactment having
the force of law. The point will become apparent when we refer to your averments 2,3 and 4 in which you imply that the levy in [this] case is taxation leviable by any law and section 15A of the Financial Services Board Act 97 of 1990 finds reference in your averment .
*“*2. Section 11(a)(iii) of the Prescription Act, No. 68 of 1969 provides that “_the periods of prescription of debts shall be thirty years in respect of any debt in respect of any taxation imposed or levied by or under any law_”. 
3. The FSB imposes levies on financial institutions in terms of section 15A of the Financial Services Board Act, No. 97 of 1990 (the FSB Act) which provides that: “_The board may impose by notice in the Gazette levies on financial institutions and may, subject to the provisions of this section, at any time in similar manner amend, substitute or withdraw any such notice_”.
4. Any debt in the form of a levy imposed by the FSB on a financial institution therefore prescribes after thirty years (and not three) as it (the debt) is levied under a law and such law is the FSB Act.*”*
5. I now choose to do the unexpected by firstly turning to a common sense example:
Even ‘Body Corporates,’ i.e. the management of Town House Complex,’ charge levies, they sometimes simply refer to this as levy. In this context this levy they charge is for repairs and maintenance, cleaning the pool, paying the security guards etc. It is not a levy that will manifest in taxation that would ultimately go to the State as tax!
continues next page...
[1] Vide: Oxford Dictionary. Oxford University Press. Page 1530

[2] Op Cit para 17

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## Citizen X

6. The same actually holds true for section 15A of the Statute that you cite, this money, alternatively this levy will not find its way to SARS in terms of taxation for redistribution for many things such as our infrastructure etc.
7. I’m acutely aware that academic text are not an authoritative source of law, they nonetheless do have persuasive value: Let’s turn to the leading authority on extinctive prescription in South Africa MM Loubser and his book ‘Extinctive prescription;
8. According to Loubser, a tax which may be so called or referred to by a similar term such as ‘levy,’ or ‘duty,’ constitutes a pecuniary charge imposed by a public authority upon persons or property for public purposes. A charge by a public authority for the rendering of services or performing its functions is often referred to as a ‘fee,’ and in deciding whether a charge constitutes a fee or a tax the fact that services are rendered in exchange for payment is an important factor characterizing such a charge as a fee rather than a tax.[1]
9. The point Loubser makes so clearly is that with typical tax, the Government simply takes tax to which it sometimes also refers to as levy, in its correct context of course, This is the 30 year prescription period, now a fee, just like the Body Corporate fee is in exchange for something very specific, the Body Corporate Town house fee or levy is for garden services, pool cleaning, repairs and maintenance: This is the service the render in exchange for a fee or for a levy, this fee or this levy doesn’t go to SARS, it goes straight to the coffers of the town house complex Body Corporate;
10. I now direct your attention to section15A of the Financial Services Board Act, No. 97 of 1990(as amended):-
*“**15A. Levies*
(1) The board may impose by notice in the _Gazette_ levies on financial institutions and may,
subject to the provisions of this section, at any time in similar manner amend, substitute or withdraw any such notice.
(1A)
(a) Before imposing levies referred to in subsection (1), the board must publish the proposed levies in such manner as it considers appropriate in order to bring the proposed levies to the attention of the financial institutions in question and the users of financial services rendered by these institutions, together with a statement that representations about the proposed levies may be made to the board within a
specified time.
(b) Before imposing levies the board must have regard to any representations made in pursuance of the statement referred to in paragraph (a).
(c) Paragraphs (a) and (b) do not apply where the board, with the approval of the
Minister, is of the opinion that the delay involved in complying with those
paragraphs would be prejudicial to the functions of the board in terms of section 3
(a) and (c).
 (2)
(a) The board shall in any such notice determine -
(i) the amounts of the levies or the bases or manners of calculation or
determination of the amounts;
(ii) the periods in respect of which levies are imposed, the dates on which levies
or the periods within which they are payable, and the manners of payment;
(iii) the rates of interest and manner of calculation of interest contemplated in
subsection (3);
(iv) the manner in which applications for exemptions contemplated in
subsection (4) shall be made; and
(v) the manner in which a notice contemplated in subsection (4) (b) (ii) shall be
served.
(b) The board may in any such notice -
(i) impose different levies referred to in subsection (1); and
(ii) determine different amounts, bases or manners of calculation or determination, periods, dates, manners of payment, rates of interest and manners of calculation of interest, manners of making application or of service referred to in paragraph (a), in respect of different financial institutions, different categories of financial institutions and different sub-categories of a specific type of financial institution.
(3)
(a) A financial institution which is under such notice liable for payment of a levy, and
which fails to pay the levy in full within the period for payment as determined in
the notice or on the date so determined, shall, at the rate and calculated in the
manner determined in the notice, pay interest on the balance of the levy
outstanding and on the interest so payable but unpaid.
(b) A levy imposed by any such notice, and interest owed in respect thereof, shall be
deemed to be a debt due to the board and may be recovered by the board by way of
judicial process in a competent court.
(4)
(a) The board may upon the application of a financial institution, and if the board is of
the opinion that there are sound reasons therefor, grant exemption to the financial
institution from a provision of the notice to the extent and subject to the conditions
determined by the board.
(b) An exemption contemplated in paragraph (a) shall lapse when -
(i) the board on the ground of facts and information at its disposal finds that the
financial institution concerned has contravened a provision of a condition
imposed as contemplated in paragraph (a), or has failed to comply therewith,
or has otherwise acted contrary to the exemption; and
(ii) the board has served a written notice to that effect in accordance with the
provisions of a notice referred to in subsection (1) on the institution.
(c) The board shall before taking a decision contemplated in paragraph (b) (i), grant
the financial institution concerned the opportunity deemed fit by the board to be
heard.*”*
10.1 One can clearly see that the levy referred to in section 15 of the aforesaid Act is not a tax or taxation or taxes that go to the government for tax purposes.The Board and not the government will use it for whatever legitimate purpose they have, sending members brochures, rendering information just to name a few;
10.2 In Peter Davis v SARS. CASE NO: 14551/2009, Local Division, we se the context of section 11(a)(ii) very, very clearly, this is how the 30 year prescription argument goes in that case:
“Regarding the issue of prescription the respondent averred that the debt of the applicant
fell into the category of “a debt in respect of any taxation imposed or levied by or under
any law” in terms of the provisions of section 11(a) (iii) of the Prescription Act and as
such the aforesaid debt in terms of section 11 (a) of the Prescription Act, would prescribe
after 30 years.
A good starting point is to set out paragraph 28 (1) (a) and (b) of the fourth schedule of
the Act the relevance will become apparent later in the judgment.
“28(1) (a) and (b)-
28(1) There shall be set off against the liability of the taxpayer in respect of any taxes (as
defined in subparagraph (8) due by the taxpayer, the amounts of employees tax deducted
or withheld by the taxpayer’s employer during any year of assessment for which the
taxpayer’s liability for normal tax has been assessed by the Commissioner and the
amount of provisional tax paid by the taxpayer in respect of any such year, and if-
(a) The sum of the said amounts of employ tax and provisional tax exceeds the
amount of the taxpayer’s total liability for the said taxes, the excess amount shall
be refunded to the taxpayer; or
(b) The taxpayer’s total liability for the aforesaid taxes exceeds the sum of the said
amounts of employees tax and provisional tax, the amount of the excess shall be
payable by the taxpayer to the Commissioner.”
The crisp issue in this matter, is to establish whether the amount owed by the applicant
amounts to a tax debt or an ordinary debt.
The starting point therefore is to establish if the amount owed falls within that defined in
paragraph 28 above. If it does fall within paragraph 28, the respondent may invoke
paragraph 28 (7) to recover from the applicant the amount owed. Obviously if the
amount owed falls within that defined in paragraph 28, the amounts can only be regarded
as a tax debt that is ‘a debt in respect of any taxation imposed or levied by or under any
law’ and therefore as such, the applicant’s indebtedness to the respondent would not have
prescribed. However, if the amount owed is an ordinary debt then the respondents claim
against the applicant would indeed have prescribed.
I set out paragraph 28(7) below for easy reference:
Section 28(7) reads as follows:
“If the Commissioner, _purporting to act_ under the provisions of this paragraph, _pays to_
_any person by way of a refund any amount which was not properly payable to that person_
_under those provisions or which was in excess of the amount due to such a person by way_
_of a refund under those provisions,_ such amount or the excess, as the case may be, shall
forthwith be repaid by the person concerned to the Commissioner and _shall be_
_recoverable by the Commissioner_ under this Act as if it were a tax.” [My emphasis in
italics]
On analysing the evidence it is important to establish what meaning is given to the word
purport [ing] as a verb. In the Oxford Shorter Dictionary the word _purport_ denotes:
“*1*._trans_...; to convey to the mind; to mean, imply. *b*. Const. inf.: to profess or to claim by
its tenor ...”
Turning to deal with the various affidavits filed, it is noted that as at paragraph 6 of the
applicant’s replying affidavit, the applicant admits that his employer deducted the tax
from the lump sum payment portion of the provident fund due to him and paid it over to
the respondent in terms of the provisions of the fourth schedule of the Act and thus the
said payment fell into the category of employees tax or as commonly known, “pay as you
earn” (PAYE) tax.
In paragraph 8 of the respondents answering affidavit, the respondent states that the
PAYE payments received emanated from the employer of the applicant and as such
should have been credited to the employer’s account, however in error, was credited to
the applicant’s account instead….”
10.3 Para 10.2 was just to demonstrate how the tax/levy 30 year prescription argument goes!

Madam, I could well cite more caselaw; I don’t believe that this is necessary! Please process my client’s extinctive prescription claim and confirm the same to writing on a signed letterhead.

I would like to hear of similar experiences regarding a misunderstanding of whether the FSB levy is a government tax which goes to the Government or a levy or fee charged for certain services rendered.


[1] Vide MM Loubster. Extinctive Prescription. 1996. Page 39 and 40. 
Confer Master v Il Back & Co LTD 1981 (4) SA 763 (c), 1983 (1) SA 986 (A)
Contra: A fee payable to any company or body is not a tax and the general 3 year period applies!

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## Dave A

> 4. Any debt *in the form of a levy* imposed by the FSB on a financial institution therefore prescribes after thirty years (and not three) as it (the debt) is levied under a law and such law is the FSB Act.


I suggest that's the point that you need to break down, and I regret I'm not convinced you've succeeded.

The subject of the position of Body Corporate levies looks pretty interesting.

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## Citizen X

A very good afternoon to you Dave :Big Grin: ,

I understand your position! I think here I’m blameworthy for having an inability to articulate clearly enough or rather in as few words as possible that the FSB levy is not a government tax but rather a typical debt subject to the 3 year prescription period.

It’s so very important to dissect a problem area such as this and then articulate it clearly and very concisely.


Your directive of dissecting section 11(a)(3) alternatively starting with it is now my point of departure. :Stick Out Tongue: 


1. Section 11 is entitled, ‘Periods of Prescription of Debts,’. Section 11 has 4 sub sections. Section 11(a) has 4 paragraphs. Section 11(a)(iii) therefore reads as follows: The periods of prescription of debts shall be the following: thirty years in respect of-any debt in respect of any taxation imposed or levied by or under any law;

2. I submit that the word ‘levied,’ is actually what causes the confusion here and that this can easily be put to rest by asking a reverse question: what is it here that is levied? Taxation either imposed or levied by a law or under a law. So, yes, it does indeed mention by or under a law, but what is it exactly that is been imposed or levied under any law that prescribes in 30 years? The answer again is taxation!
3. We must now appreciate that taxation in such contexts go to the Government via SARS. This taxation is then used to develop our infrastructure, pay public servants, run public departments etc.
4. To further place levy and levied in context here, we can ask another simple question: What is the fuel levy and to whom does it go to? The fuel levy is a tax, a portion of the amount we pay for a litre of petrol is levied and goes to the Government for redistribution;
5. If the fuel levy in the same category as the FSB levy? I say definitely not! My reasoning, the fuel levy goes to government whereas the FSB levy doesn’t go to government at all but is used by the FSB itself.
6. This is a tell-tale sign of the difference between a fee and a levy. According to Loubser, a tax which may be so called or referred to by a similar term such as ‘levy,’ or ‘duty,’ constitutes a pecuniary charge imposed by a public authority upon persons or property for public purposes. A charge by a public authority for the rendering of services or performing its functions is often referred to as a ‘fee,’ and in deciding whether a charge constitutes a fee or a tax the fact that services are rendered in exchange for payment is an important factor characterizing such a charge as a fee rather than a tax.[1]
7. Based on this the FSB charges a fee for among other things printing brochures, information sheets etc. for the members. This therefore cannot rightfully be said to be a tax.
8. This is what SARS have to say on their website about exercise duties and levies



> EXCISE DUTIES AND LEVIES





> The basis for the imposition of Excise duties and levies is primarily fiscal by nature, meaning that it is levied to provide the State with an easy collectable and constant stream of revenue. For this reason, the criteria used to select a product suitable for this purpose (excisable product) is basically that it should be fast-moving, high-volume, daily consumables and, in addition to this, mostly non-essential products (e.g. alcohol and tobacco products); hence the popular name “_Sin Taxes”._A secondary function of these duties and levies is to influence consumer behavior, meaning that Government may manipulate Excise duties and levies to discourage the consumption of certain harmful products; i.e. harmful to human health (tobacco products) as well as harmful to the environment (plastic bags and electricity production from non-renewable sources).


[2]
9. *I now go back to my example of the Body Corporate Levy*. They also use the words ‘levy’ and ‘levied.’ This levy refers to costs for repairs and maintenance, cleaning the pool, the gardening service, the security and such other things. It’s a fee that goes directly to the Body Corporate but not to the Government as tax…


Boss, I rest my case :Bananadance:  :Bananadance: [1] Vide MM Loubster. Extinctive Prescription. 1996. Page 39 and 40. 
Confer Master v Il Back & Co LTD 1981 (4) SA 763 (c), 1983 (1) SA 986 (A)
Contra: A fee payable to any company or body is not a tax and the general 3 year period applies!

[2]Vide http://www.sars.gov.za/home.asp?pid=54522

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## Dave A

Where in the law on prescription does it say the "taxation" has to go to government?

I'll come back to Body Corporate levies once we've resolved your exceptionally narrow definition of "taxation."  :Wink:

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## Citizen X

> Where in the law on prescription does it say the "taxation" has to go to government?
> 
> I'll come back to Body Corporate levies once we've resolved your exceptionally narrow definition of "taxation."


A very good morning to you Dave,
*I think we should attempt to get at the entire crux of this matter here together*. That being said, a more detailed narrative of what you find to be issue or dispute is really required :Confused: 
*Okay, let’s resolve as follows* (I love intellectual curiosity, it gives me a high! It’s actually a problem):-
The underpinnings of my response is simply: *Please prove me wrong!(* Nothing wrong with this stance right :Embarrassment: !). I have already stated my position and justified my position! If there's a more credible position, it's welcomed!
On balance of probability, I sincerely believe that my position as reflected on pages #42,43,44,46 is far more probable than what was I challenged with by the jurist in question(in their letter of response that is!). I further sincerely believe that my position is objectively justifiable. _I don’t see that I’m sincerely wrong in my proposition_If it’s balanced view that we want here alternatively another position, then my stance is very simple: I have already stated my position. The questions are asked and answered.
You have for the lack of a better expression raised a notice of exception or in pursuit of a better explanation placed my proposition in issue. *The onus now shifts!* The burden of proof shifts! It’s now upon you articulate this alternative position in sufficient detail(quality wise) proportionate to the detail I have provided(quality wise). 
This is the only way I will be able to understand where on any of my averments regarding this individual matter you find incorrect reasoning, alternatively incorrect inference alternatively misinterpretation of section 11(a)(iii) i.e. I can then see the sum total of your indifference(nothing wrong with indifference) and then respond to it on merits
A narrow view or definition in law is sometimes not only essential but rather quite vital to exclude rather than to include. 

*If I may be so bold*, allow me to ask you a few questions *please*(in pursuit of a balanced view)?

1. Do you believe that the FSB levy is taxation which prescribes in 30 years? Do you belive that the FSB levy is the same as the fuel levy? If so, why?2. What do you base your belief upon?
3. What technique of statutory interpretation have you utilized to arrive at your understanding of section 11(a)(iii). Eg. I utilize a contextual approach, with an emphasis on guidance from academia and case-law
4. *I close with the following*(already stated in #’s 42, 43, 44, and 46) :-
5. section 1 of The Income Tax Act 58 of 1962(as amended), entitled interpretation:*'tax'* _or 'the tax' or 'taxation'_*means any levy or tax leviable under this Act*; and for the purposes of Part IV of Chapter III includes any levy or tax leviable under any previous Income Tax Act;[Definition of 'tax' or 'the tax' or 'taxation' amended by s. 1 _(c)_ of Act 6 of 1963 and substituted by s. 19 (1)_(m)_ of Act 30 of 1998.]
6. The ‘This Act,’ in point 4 refers to The Income Tax Act 58 of 1962
7. In Peter Davis v SARS. CASE NO: 14551/2009, Local Division, we see the context of section 11(a)(ii) very, very clearly. The crisp issue in this matter, is to establish whether the amount owed by the applicantamounts to a tax debt or an ordinary debt. The reason for the issue is to establish whether it prescribes in 30 years or in 3 years!
....

8. Here we look to case law, the locus classic us is The Master v IL Back & Co LTD 1983(1) SA 986 (A) at 1000h, an important differentiation was made between a fee of a public authority where such a fee is for a specific service or rendering a service in exchange for a fee or subscription and then a tax which is also called by similar names such as ‘levy,’ or ‘duty,’ which in essence is a pecuniary charge imposed by a public authority on either property or individuals for public purposes; The idea is to differentiate between a tax and a fee
9. In the context of section 11(a)(iii), levy can reasonably be taken to mean Fuel Levy, Environmental levy Diamond Export Levy etc. The idea is to distinguish between the use of the word 'levy,' 'levied,' but using a narrow approach to exclude 'levy,' in general and to include levy such as fuel levy etc.

The real questions, I think are: whether or not the FSB levy is the equivalent or in the same category as the fuel levy? What does the fuel levy and FSB levy have in common? What is the FSB levy not included with the other levies on the SARS website? 
http://www.sars.gov.za/home.asp?pid=54522


*Any alternative credible view or position is welcomed by anyone really! Any additional clarification is welcomed!*
 :Wink:

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## Dave A

Hi Vanash,

Not being schooled in the methods of legal debate, I regret I must rely on classical debating methods and logic in exploring the issue. This does not mean I can't follow your arguments and I suggest the difference is more in method and style than material content.

In support of my position:

1. I suggest that the definition of taxation in the Income Tax Act is legally applicable to the Income Tax Act only.

My foundation in suggestion this is that there are other forms of taxation that are not defined by the definition of taxation (or tax, the tax _et al_) in the Income Tax Act. Specific examples would be VAT (The Value-Added Tax Act, 1991 (Act No. 89 of 1991)), import duties (The Customs and Excise Act, 1964 (Act No. 91 of 1964))
and transfer duties, to name but a few that fall under the administration of SARS.

To reinforce the point, if I look at the Value-Added Tax Act, the defintion of tax is as follows:



> "tax" means the tax chargeable in terms of this Act;


2. SARS is not the only authority administering taxes.

As example, I point to property taxes known as "rates" which are levied by municipalities on property owners.
In the days of the Joint Services Board there was a JSB levy, also a form of taxation.
I'm also tempted to add Workmans Compensation and a few others to the list, but I trust the point is already made - SARS is not the only public authority collecting taxes.

So I trust we now agree that The Income Tax Act does not define taxation for *all* law, and that SARS does not administer all taxes.

3. So what is taxation as intended by the laws of prescription?

I suggest that without a definition by statutory law or common law jurisprudence on prescription to hand, I must point you to what you raised earlier: 




> 8. According to Loubser, a tax which may be so called or referred to by a similar term such as ‘levy,’ or ‘duty,’ constitutes a pecuniary charge imposed by a public authority upon persons or property for public purposes. A charge by a public authority for the rendering of services or performing its functions is often referred to as a ‘fee,’ and in deciding whether a charge constitutes a fee or a tax the fact that services are rendered in exchange for payment is an important factor characterizing such a charge as a fee rather than a tax.


The relationship between the calculation of the fee raised and the service(s) rendered (or should that be the *lack* of a relationship) is critical to determining whether a charge is a "fee" or a "tax".

The FSB levy has the form and substance of taxation according to this definition.
The Financial Services Board is a public authority, empowered by legislation to administer the affairs of the Financial Services Industry.
The levy and the manner in which it is to be calculated has been promulgated by Government Gazette and in accordance with the Financial Services Board Act and the regulations made thereunder.


Accordingly on the evidence to hand I can only conclude that requirements for a 30 year prescription period have been met.

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## Citizen X

> Hi Vanash,
> 
> Not being schooled in the methods of legal debate, I regret I must rely on classical debating methods and logic in exploring the issue. This does not mean I can't follow your arguments and I suggest the difference is more in method and style than material content.
> 
> In support of my position:
> 
> 1. I suggest that the definition of taxation in the Income Tax Act is legally applicable to the Income Tax Act only.
> 
> My foundation in suggestion this is that there are other forms of taxation that are not defined by the definition of taxation (or tax, the tax _et al_) in the Income Tax Act. Specific examples would be VAT (The Value-Added Tax Act, 1991 (Act No. 89 of 1991)), import duties (The Customs and Excise Act, 1964 (Act No. 91 of 1964))
> ...


Noted Boss, Noted!! 


> I regret I must rely on classical debating methods and logic in exploring the issue.


 Classical debating techniques and logic in exploring an issue remain the best technique. It is this very technique used in one case in particular proves my point. I will revert in due course. Let's resolve as follows: I'll give my final thoughts on this matter based on both academia as well as case law.. Just on the note of inference, inference of a primary fact gives rise to a secondary fact which then is the subject of further inference! That said, Justinian and company share your view on exploring issues!! :Big Grin: 
No offence intended :Big Grin: 
*Ironically* it's actually 2 things you said in this thread that will ultimately assist me to prove this matter beyond any reasonable doubt(we going to use the criminal court standard here not balance of probability as should be used in civil court or civil matters, I knew I was on to something the very first time this matter came before me, there was just so much research involved and I needed to respond in real time to the writer of that letter, I assured them that I would respond in 24 hours, that letter I drafted was a product of 1 day's research and resulting work!.. _There are cases!_ It just takes a great deal of time to summarise them. I'll focus on 'ratio decidendi,' courts reason for decision largely..will revert, just need time..'It's just a question of time'(Depeche Mode 1987)

No stress Boss, I'm easy like a Sunday morning! :Wink:

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## Citizen X

Due to word count, I’ll split this post into two:-
The question to be decided, I think, is whether the FSB levy is a fee and therefore just like any other debt, which prescribes in 3 years *or* whether it is a levy or the equivalent of taxation subject to a 30 year extinctive prescription period in terms of section 11(a)(iii)
Okay, as a starting point, to lay foundation, I’ll actually start with:-




> As example, I point to property taxes known as "rates" which are levied by municipalities on property owners.
> In the days of the Joint Services Board there was a JSB levy, also a form of taxation.
> I'm also tempted to add Workmans Compensation and a few others to the list, but I trust the point is already made - SARS is not the only public authority collecting taxes



The way I’m actually starting is simply to finish what Loubser said at(Loubser:1996:41) in a paragraph entitled ‘Debt in respect of any taxation imposed or levied by or under any law.’
To do so effectively, that is, finish what Loubser said, I’ll start with the parts I first included:
According to Loubser, a tax which may be so called or referred to by a similar term such as ‘levy,’ or ‘duty,’ constitutes a pecuniary charge imposed by a public authority upon persons or property for public purposes. A charge by a public authority for the rendering of services or performing its functions is often referred to as a ‘fee,’ and in deciding whether a charge constitutes a fee or a tax the fact that services are rendered in exchange for payment is an important factor characterizing such a charge as a fee rather than a tax.
Municipal rates are a form of taxation within the meaning of s(11)(a)(iii) are therefore subject to a thirty-year prescription period.’
He goes on to describe fees payable by companies in which he states that such fees are not a tax and the general three year prescription period therefore applies to a debt for the payment of such a fee.
So, it’s common cause that municipal rates and taxes prescribe in 30 years. I agree! I don’t however agree that the FSB levy is in the same category as Municipal rates and taxes.
Case-law
Maize Board v Epol (Pty) Ltd (9874/2007) [2008] ZAKZHC 99; 2009 (3) SA 110 (D) (18 December 2008)
This case actually speaks for itself so I’m just going to copy, cut and paste the relevant paragraphs in quotation
In this case the Plaintiff the Maize Board initiated proceedings to recover *levies* from the Defendant Epol to the amount of about 1.5 million. The levies in this case is reference to levies mentioned in an Act which does not exist today.
‘The levies in question are a general levy referred to in section 41 of the now repealed Marketing Act 59 of 1968 (the “Act”) and section 23 of the Maize Marketing Scheme (the “Scheme”), and a special levy in terms of section 44 of the Act and section 24 of the Scheme. The Plaintiff is a control board contemplated in section 25 of the Marketing Act charged with the responsibility of administering the Scheme.
It is common cause that summons was issued by the plaintiff *more than three years after its claim arose but less than thirty years.* The defendant raised a special plea of prescription to the claim and alleged that a three year prescription period in terms of section 11(d) of the Prescription Act was applicable in this matter resulting in the plaintiff’s claim having prescribed. *Plaintiff, on the other hand, argued that the levy and special levy constituted “a debt in respect of any taxation imposed or levied” within the meaning of section 11 (a) (iii) of the Prescription Act and that a thirty year prescription period accordingly applied.’*
*PLAINTIFF’S CASE*‘Counsel for the plaintiff argued that the ordinary meaning of the word “tax” must be firstly ascertained in the context of the Act and the Scheme. Reference can also be had to dictionary meanings. Counsel referred to a number of cases, including *The Master v IL Back & Co Ltd and Others* 1983 (1) SA 986 (A), _Commissioner of Customs and Excise v Tayob and Others_ 2002 (6) SA 86 (T) and _City Treasurer and Rates Collector, Newcastle Town Council v Shaikjee and Others_ 1983 (1) SA 506 (N). I do not consider it necessary to focus on all the case law that was referred to. Counsel for the plaintiff settled that the meaning to be ascribed to the word tax should be “a pecuniary charge imposed by the legislator or other public authority on a person or property for a public purpose.
It was submitted that the levies imposed were for public purposes. Some of the factors that would assist one in reaching this conclusion were
8.1 the structure of the Act is to control and regulate the production and sale of agricultural products throughout the Republic for the purpose of benefiting the public by stabilising the production and prices of agricultural products with a view of ensuring stability in the marketplace;
8.2 the failure to pay the levies results in a criminal sanction. Offences of this type are enacted to give effect to some government policy that is thought to be in the public interest or to advance public welfare or some favoured economic, social or political programme;
8.3 the Act has wide ranging implications for the public since maize is the staple diet of our country’s population;
8.4 the implementation of the Act falls under the control of the Minister of Agriculture who acts on behalf of the government, which is only able to act in the public interest ;
8.5 on discontinuance of the Scheme all assets of the Board shall be handed to the Minister to be utilised by the Minister at his discretion for the advancement of the maize industry;
8.6 the objects of the Board display a public character and are for public purposes; 
8.7 the Board is entitled, with the approval of the Minister, to assist financially with various public objectives;
8.8 the Act and Scheme apply throughout the Republic; and
8.9 the accounts of the Board are audited by the Auditor-General which emphasizes the public character of the Act;

[9] Plaintiff submitted that the decision in _Maize Board v Tiger Oats_(“Tiger Oats”)was firstly wrong and secondly that it was distinguishable from the matter at hand.The distinguishing factor between the two cases is that there is a difference in the type of scheme applicable to each case. In 1995 there was a drastic amendment to the scheme which resulted in a change from a controlled marketing scheme to a ‘free market scheme’ which applied in the _Tiger Oats_ case. Thus what follows is that the test to be employed in this case will be different as compared to the one adopted in _Tiger Oats_.

It was further argued that the _Tiger Oats_ decision was wrong for the following reasons:
1. The court incorrectly applied the requirements of a tax as set out in _Nyambirai v National Social Security Authority and Another_ 1996 (1) SA 636 (ZS); (1995 (9) BCLR 1221). The third and fourth requirements in that test are in dispute.
2. There is no requirement in the definition of ‘tax’ that it be imposed on the public or a substantial sector of the public. However the sellers and buyers of maize could be said to constitute the public in the requisite sense as the question of who the public is must be viewed in context. Spoelstra J was wrong in stating that only a few farmers were affected by the levy. Furthermore it is for the benefit of the public at large to have an orderly market system.
3. The revenue obtained was to be utilised for public purposes. There is a difference between “public purposes” and “in the public benefit and to provide a service in the public interest” as found to be a requirement in _Nyambirai._ The fact that part of the levy could be used to enable the plaintiff to perform its functions does not mean that the levy does not qualify as revenue utilised for public purposes. The levies were to fund the system established for public purposes.

[ 10] Finally counsel for the plaintiff submitted that each case must be determined in accordance with its facts. When one looks at the facts of this case and the purpose of the levies, it would indicate that the levies constituted a tax.’
*DEFENDANT’S CASE*
*‘The starting point in establishing the meaning of taxation would be to consider the man on the street and his understanding of whether the levies constitute a tax.* Thereafter one can look at dictionary definitions which say that tax is an “impost to raise revenue for government”. The dictionary definition does not support the notion that these levies are a tax. Foreign cases are important to consider, and such an approach is supported by the constitution which reminds us that foreign law may be considered. In this instance it was necessary to look at foreign case law since none of the South African cases dealt directly with the charges in this case. Also, the foreign cases referred to provide support for the _Tiger Oats_ decision. It was also submitted that although the _Tiger Oats_ decision emanates from a different division it still holds persuasive authority.


After a review of all the case law (both national and foreign), counsel for the defendant submitted that the following relevant factors can be used to ascertain what constitutes a tax:
(a) *the charge must be compulsory and not voluntary or optional*;
(b) the charge must be imposed by the legislature or other competent authority
(c) The charge must be levied upon the public as a whole or a substantial sector thereof;
(d) The purpose of the charge must ordinarily be the raising of public revenue;
(e) The revenue accruing from the charge must be used for the public benefit and to provide a service in the public interest;
(f) The charge must not be either a service charge or fee payable in respect of the provision of specific charges;
(g) The charge must not be a regulatory charge raised as part of the administration of a regulatory scheme

[13] *It was concluded by the defendant that the levies in issue did not satisfy the requirements of a tax because*
13.1 they are not imposed upon the public as a whole or in a substantial sector thereof;
*13.2 the revenues collected are not utilized for the public benefit;
13.3 the levies are not intended to raise public revenue; and
13.4 the levies are imposed as part of a regulatory scheme. 
*
[14] Another argument raised by counsel during argument was that one does not pay VAT on taxes. A person pays VAT according to the Value Added Tax Act 89, specifically section 7 (1) which reads as follows:
“(1) Subject to the exemptions, exceptions, deductions and adjustments provided for in this Act, there shall be levied and paid for the benefit of the National Revenue Fund a tax, to be known as the value-added tax-
(a) on the supply by any vendor of goods or services supplied by him on or after the commencement date in the course or furtherance of any enterprise carried on by him...”

Case source http://www.saflii.org.za/za/cases/ZAKZHC/2008/99.html
Continues next page....

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## Citizen X

Continued….
“Counsel argued that VAT is only payable on a supply of goods or services and taxes do not involve the supply of goods and services. Supply is defined in section 1 of the Vat Act as follows: “'supply' includes performance in terms of a sale, rental agreement, instalment credit agreement and all other forms of supply...”


Services means “anything done or to be done, including the granting, assignment, cession or surrender of any right or the making available of any facility or advantage...”

*It was argued that the plaintiff was supplying a service to the people who, in turn, paid the levy.* The service that was supplied was making an advantage available to them. Vat is not payable on rates, transfer duty, income tax or even other taxes. If you have Vat on tax it would mean that you are having tax on tax. In this case Vat was payable thereby indicating that it could not be a tax but simply services for which a fee was paid.

[15] In its papers counsel for the defendant attempted to bring into play a constitutional dimension to its case. The argument went as follows: at the time that the scheme was in operation the interim constitution was in force. The power to impose taxation was strictly restricted to the legislature. The Scheme was not a part of the legislature and the Minister of Agriculture is a part of the executive, not the legislature. Counsel submitted that the levies were imposed by a statutory body made up of private individuals. It was further submitted that if the levies constitute taxation, then the Marketing Act and the Scheme would be in conflict with the constitution. The issue would be one of legality.

[16] *To surmise, defendant submitted that the levies were not taxation and accordingly a three year prescription period applied.*
*Courts Finding*

[21] Since there is no definition of the word ‘taxation’ in the Prescription Act one would have to look up its possible meaning. Both parties referred this Court to case law, both local and foreign. Cases do provide assistance when trying to interpret specific legislation. I am in agreement with both parties that to consider whether the levies are taxation the levies must be given its ordinary meaning and must be considered in the context of the legislation in which it appears. Our Courts have held that the context in which the words are used is of paramount importance, and must be taken into account (see _Jaga v Donges, Bhana v Donges_ 1950 (4) SA 653 (1).
In _Poswa v Member of the Executive Council for Economic Affairs, Environment and Tourism, Eastern Cape_ 2001 (3) SA 582 (SCA) at para 10, Schutz JA quoted with approval the dictum of _Bhyat v Commissioner for Immigration_ 1932 AD 125 where it was held:
'The cardinal rule of construction of a statute is to endeavour to arrive at the intention of the lawgiver from the language employed in the enactment . . . in construing a provision of an Act of Parliament the plain meaning of its language must be adopted unless it leads to some absurdity, inconsistency, hardship or anomaly which from a consideration of the enactment as a whole a court of law is satisfied the Legislature could not have intended.' (Per Stratford JA at 129)

The Shorter Oxford Dictionary describes ‘tax’ as a compulsory contribution to the support of government, levied on persons, property, income, commodities, transaction etc

[22] In _Nyambirai v National Social Security Authority and Another_ 1996 (1) SA 636 (ZS) at 643C-D it was held that the following characteristics of a tax emerged: 
(i) it was a compulsory and not an optional contribution, 
(ii) imposed by the Legislature or other competent public authority, 
(iii) upon the public as a whole or a substantial sector thereof, 
the revenue from which was to be utilised for the public benefit and to provide a service in the public interest.”

The question remains should the abovementioned test be applied? Plaintiff argued that it should not be applied as the third and fourth requirements are in dispute. I do not think that this Court is bound by the test but it can be used to assist the Court. The Courts approach should not be dismissed because it formulated the test after having regard to all authorities, both local and foreign.

[23] This case is on all fours with the decision of _Tiger Oats_, a judgment delivered in the Transvaal Provincial Division. The brief facts of the case are as follows: The Plaintiff (Maize Board) sued Tiger Oats (the Defendant) for payment of levies. Defendant took a special plea of prescription, with the Plaintiff alleging that the levies sought to be recovered constituted taxation under section 11(a) (iii) of the Prescription Act. Spoelstra J held that the levies did not constitute taxation and the special plea of prescription accordingly succeeded. 

This Court is not bound by the decision since it is from a different province and the general rule is that a single judge is not bound by a decision of another single judge in another High Court.[9] However it can be considered to be persuasive. It is fair to say that each case would depend on its facts. 

However, I think the manner in which one should deal with this case would be the manner in which Spoelstra J decided the _Tiger Oats_ case, and that is as follows:
“It seems to me that, in order to constitute a tax, the nature of the payment must be determined according to the applicable canons of construction...The question of whether or not the plea is a good plea therefore simply hinges on the interpretation of the nature of levies which the board is entitled to impose”.( page 6 of judgment)

[24] It is necessary to consider the various provisions of the Act and the Scheme to determine the actual nature of the levies. 

The purpose of the Act is to consolidate the laws providing for the regulation of the production and sale of agricultural products; for the establishment of certain boards in connection therewith; for the establishment of a national mark; for the grading and standardization of agricultural products and for matters connected thereto. Section 2 makes provision for the establishment of a National Marketing Council. One of its core functions appears to be the control of a scheme. In terms of section 8 any proposed scheme may be submitted to the Minister by any association of producers or any agricultural co-operative or special farmers’ co-operative or any control board. The final decision to either accept or reject a scheme lies with the Minister and therefore the Minister has wide ranging powers in regard to schemes.
*ORDER*
This Court agrees with the conclusion reached by Spoelstra J in _Tiger Oats_. Plaintiff has not submitted good enough reasons as to why this Court should not follow that case. *It is this Courts conclusion that the levies imposed by the Plaintiff were not tax. Accordingly the claim has prescribed. 
*
It is ordered that:
30.1. *Defendant’s special plea is upheld*.
30.2. Plaintiff’s claim is dismissed with costs, such costs to include those consequent upon the employment of two counsel.”

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## Citizen X

> Continued….
> “Counsel argued that VAT is only payable on a supply of goods or services and taxes do not involve the supply of goods and services. Supply is defined in section 1 of the Vat Act as follows: “'supply' includes performance in terms of a sale, rental agreement, instalment credit agreement and all other forms of supply...”
> 
> 
> Services means “anything done or to be done, including the granting, assignment, cession or surrender of any right or the making available of any facility or advantage...”
> 
> *It was argued that the plaintiff was supplying a service to the people who, in turn, paid the levy.* The service that was supplied was making an advantage available to them. Vat is not payable on rates, transfer duty, income tax or even other taxes. If you have Vat on tax it would mean that you are having tax on tax. In this case Vat was payable thereby indicating that it could not be a tax but simply services for which a fee was paid.
> 
> [15] In its papers counsel for the defendant attempted to bring into play a constitutional dimension to its case. The argument went as follows: at the time that the scheme was in operation the interim constitution was in force. The power to impose taxation was strictly restricted to the legislature. The Scheme was not a part of the legislature and the Minister of Agriculture is a part of the executive, not the legislature. Counsel submitted that the levies were imposed by a statutory body made up of private individuals. It was further submitted that if the levies constitute taxation, then the Marketing Act and the Scheme would be in conflict with the constitution. The issue would be one of legality.
> ...


What I really want to demonstrate with just this one case is simply that if one carefully studies #42,43,44 and 46, you will find similiarities though I argued it diffrently. It would have taken me some 3 days to properly summarise this one case! Alot of time and effort! I didn't do so initially, here, I simply now chose to use actual portions of the case itself verbatim and placed in quotation. Had I chose to summarise, you would have received a summaried response in about two weeks time! Not that it would have taken me two weeks but rather that I would have had to sit with it at least 1 to 2 hours per day..This case, I like becuase it speaks for itself, it gets straight to the point and it's very conclusive.
*Based on the finding of this case I submit that the FSA levy is not a tax but rather a fee charged for certain services rendered and further that the FSB levy is subject to a 3 year prescription period and not a 30 year prescription period!


*

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## Citizen X

> What I really want to demonstrate with just this one case is simply that if one carefully studies #42,43,44 and 46, you will find similiarities though I argued it diffrently. It would have taken me some 3 days to properly summarise this one case! Alot of time and effort! I didn't do so initially, here, I simply now chose to use actual portions of the case itself verbatim and placed in quotation. Had I chose to summarise, you would have received a summaried response in about two weeks time! Not that it would have taken me two weeks but rather that I would have had to sit with it at least 1 to 2 hours per day..This case, I like becuase it speaks for itself, it gets straight to the point and it's very conclusive.
> *Based on the finding of this case I submit that the FSA levy is not a tax but rather a fee charged for certain services rendered and further that the FSB levy is subject to a 3 year prescription period and not a 30 year prescription period!
> 
> 
> *


On page # I4 stated the following:-

4.3 No Definitional Clause in 1969 Act

On conducting a post mortem of this Statute with the precision of a surgeon about to conduct surgery, it was alarming to find that the 1969 Act does not include a definitional clause section nor does it have a preamble. A preamble is necessary to clarify the underlying philosophy of the Act. The next enquiry is then: What is the purpose of the 1969 Act? The purpose is found in the long title. In this case it simply states ‘*To consolidate and amend the laws relating to prescription’.**[1]*The 1969 Act does have practical importance.*[2]* It should be the subject of greater theoretical analysis and it should not be seen as a technical and theoretically unrewarding aspect of statute law.*[3]* If it is accepted that the 1969 Act is a rule of law and further that there is some degree of uncertainty as to its interpretations by both creditors and debtors and further that there is uncertainty as to the difference between an extinctive prescription claim and a special plea of prescription, then it should at the very least be also accepted that some form of procedural-law mechanisms are required to give proper effect to the 1969 Act. Law means any law, proclamation, ordinance, Act of Parliament or other enactment having the force of law.*[4]*

One must never lose sight of the fact that section 228 and section 229 of the Constitution of 1996 mentions taxes, duties and levies as separate and distinct entities.
To put things in context:
To join issue with this curent FSB levy matter I now surmise with what I actually stated in pages # 42,43, 44,and 46 here:

S 11(a)(iii):The periods of prescription of debts shall be the followingthirty years in respect of any debt in respect of any taxation imposed or levied by or under any law
The context is really quite clear any taxation that is either imposed or any taxation that is levied. 

I submit again based on the sumtotal of pages # 42 up to and including page # 53 here that
The FSB levy is a fee and not a tax, it prescribes in 3 years and not in 30 years. 
_I humbly invite_ anyone with a more credible position to please state it here[To do so please consider the sum total of everything stated from page # 42 up to and including page # 53 in this thread PLEASE :Big Grin:  :Roll Eyes (Sarcastic):

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## Dave A

Now that makes a much stronger argument in support of your position, Vanash.  :Big Grin: 

You have now established that current jurisprudence requires the determination of taxation must go beyond form and substance and the fact that the charge is legislated, but must also also examine the nature of the authority, its range in imposing the levy, and for what purpose the funds generated are applied. 

You have also established that each particular situation must be examined on its own specific merits and the position in respect of the FSB levy will likely only be finalised by a court of law making a determination thereon.

I believe you have also made it abundantly clear that law of prescription is in urgent need of legislative review.

I commend you for your efforts and trust that this debate has not been in vain for you.  :Smile:

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Citizen X (04-Jan-13)

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## Citizen X

> I commend you for your efforts and trust that this debate has not been in vain for you.


A very good morning to you Dave :Wink: 

The debate has been very useful, it just was not scripted or rather not according to the initial table of contents. This is one of those matter that just happened!

I just feel that small amendments to the 1969 Act willl make a very big difference. This Act involves debt which is in the public interest, so the clearer the Act itself could be, the better!
I get those those recommendations according to the table of contents, would like to bring finality to it!

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## Citizen X

Research on extinctive prescription will be an *on-going task*. Please continue to send your completed questionnaires to
vanash.naick@gmail.com

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## rickym18

Hi Vanash. My name is Ricky and I'm new to The Forum. I stumbled upon your thread on debt prescription as I'm looking for more information on the topic. Is it possible that you could please give me your direct email address so I could communicate directly with you regarding help I need with debt prescription?

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## Citizen X

> Hi Vanash. My name is Ricky and I'm new to The Forum. I stumbled upon your thread on debt prescription as I'm looking for more information on the topic. Is it possible that you could please give me your direct email address so I could communicate directly with you regarding help I need with debt prescription?


Hi Ricky,

Welcome to TFSA :Thumbup: 

I have sent you a private message with my details...

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## Citizen X

*Frequently asked question(In a scenario):

*I have just received a summons, this after having received a final letter of demand. The summons calls upon me to either appearance an appearance or consent to judgment . This matter related to a prescribed debt, a debt which is order than three(3) years, calculated as such from the date of the last payment. For whatever reason you ignored the demand letter, but summons has just been served, you have a deadline within which to file certain documents(pleadings). 

You can do one of three things:

1. Defend your-self on the matter by entering a notice of intention to defend, drafting a plea on merits as well as a special plea of prescription in the prescribed manner. This entails serving these documents to both the plaintiff and the clerk of courts. With this pleading(plea on merits and special plea of prescription), your pleading has the intense power of destroying the entire action!(If you just ignore this, you give the creditor an opportunity to obtain default judgment upon yourself
2. Instruct an attorney either privately recruited, at a University Law Clinic or at the Legal Aid Board to enter an appearance, plea, and special plea on your behalf;
3. *If you don’t want to go this route but are really serious about your matter*, then, you can simply instruct an attorney to specifically draw up your pleadings(both plea on merits and special plea of prescription), you then only have to serve it on the plaintiff and clerk of courts;
4. Once you get a ‘notice of set down(date of trial),’even though in the vast majority of cases the plaintiff withdraws immediately upon seeing your pleadings!!!! So you save this way

*Quantitative research Extinctive prescription invite:

*If you care to take part in a survey, please send a blank email to vanash.naick@gmail.com

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## martin67

yesterday my wife received a summons for an apparant unpaid credit card debt, going back to approximately 2007. to the best of her memory she paid this in full but seeing as it is so far back she cannot find her reciept and since then she had moved her accounts to another bank. the summons was received from jhb magistrates court, we reside in cape town. attached to summons was copy of said banks terms and conditions, a letter of demand that laywer sent via registered post that she never received. being a bust woman running her own business she was just going to pay this so that she would not have to deal with the hassle, but i cautioned her against it. it is 7k. also i must mention that even though the courts stamp is on summons there is no case number that i can make out.

my immediate thoughts are to send laywers an email advising them that debt has prescribed and requesting statement reflecting last payment but after reading some of this info i am unsure of how to proceed.

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## Citizen X

> yesterday my wife received a summons for an apparant unpaid credit card debt, going back to approximately 2007. to the best of her memory she paid this in full but seeing as it is so far back she cannot find her reciept and since then she had moved her accounts to another bank. the summons was received from jhb magistrates court, we reside in cape town. attached to summons was copy of said banks terms and conditions, a letter of demand that laywer sent via registered post that she never received. being a bust woman running her own business she was just going to pay this so that she would not have to deal with the hassle, but i cautioned her against it. it is 7k. also i must mention that even though the courts stamp is on summons there is no case number that i can make out.
> 
> my immediate thoughts are to send laywers an email advising them that debt has prescribed and requesting statement reflecting last payment but after reading some of this info i am unsure of how to proceed.


Hi Martin,
1. The first thing to note is the court from which summons was sued out, this is the court where you will file all relevant documentation;
2. Since this involves a prescribed debt, you need to file a notice of intention to defend, both a plea on merits as well as a special plea of prescription. This must be first served on the plaintiff or their attorneys, ideally you should have 3 copies of everything. For instance when you serve the documents on the plaintiff, you need them to sign or stamp your spare copy to prove that you have served the documents on them. In fact they may stamp the documents you going to file on the clerk of courts as well as your spare copy for your own records. When you go to the clerk of courts, they will ask you for proof that you first served the documents on the plaintiff;
 3. Some rules have changed, you now required to include both your residential address as well as postal address as well as contact details.
4. Since time is of the essence and you don’t want a case of default judgment, you should ideally instruct an attorney in Johannesburg or get someone you know and trust in Johannesburg to have the documents served for you

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## martin67

with the costs of lawyers etc, it might just be easier to pay the 7k and get on with life even though we know we are in the right. this summons was done in such a clever way that it hasnt really left us with many options but to pay. thanks for the help

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## Dave A

> with the costs of lawyers etc, it might just be easier to pay the 7k and get on with life even though we know we are in the right.


Having a lawyer do this for you should come in well under R7k!

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## Caroldb

Hi there. Please I need to find out if I have a fighting chance here! Could I ask advice? In 2003 I enrolled for studies. End of that year we fell into trouble amd couldnt pay the last R440. In 2005 transunion sent us a letter stating we owe the money and they have been appointed to collect. Sl we phoned them and they gave us bank details and fax nr for proof of payments. Now mdb is hounding me saying I owe R7000+ on this debt. I scratched around found some deposit slips where we paid the money. I wrote a letter stating that here is proof of payment in 2005. (Only short one slip I couldnt find of R70) amd stated in the letter what happened and that I feel I do not owe anything anymore as the payment was done then. Now they keep phoning and smsing me. Just got one stating they issued a section 129 letter regarding this debt. What am I to do? I paid this money those years but can they claim it again?

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## Citizen X

> Hi there. Please I need to find out if I have a fighting chance here! Could I ask advice? In 2003 I enrolled for studies. End of that year we fell into trouble amd couldnt pay the last R440. In 2005 transunion sent us a letter stating we owe the money and they have been appointed to collect. Sl we phoned them and they gave us bank details and fax nr for proof of payments. Now mdb is hounding me saying I owe R7000+ on this debt. I scratched around found some deposit slips where we paid the money. I wrote a letter stating that here is proof of payment in 2005. (Only short one slip I couldnt find of R70) amd stated in the letter what happened and that I feel I do not owe anything anymore as the payment was done then. Now they keep phoning and smsing me. Just got one stating they issued a section 129 letter regarding this debt. What am I to do? I paid this money those years but can they claim it again?


Hi Carol,
The section 129 letter is to show compliance with the National Credit Act that a final demand was issued. So it’s a mandatory letter that must be sent before a summons is sued out. In fact in the particulars of claim, they need to state that they have served this section 129 letter.
From what I can deduce, the debt is indeed prescribed. Be careful for taking too much time to act as once they sue out summons, judicial process interrupts prescription in which case the matter must be decided in court. On the bright side even if it proceeds to this stage you do have a valid defence of prescription

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AndyD (27-Oct-13)

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## Caroldb

Phew! That is good to hear as I was stressing over this so much even though I know im not in the wrong! I replied to your email before I read this so I am awaiting your reply! Thank you very very much!

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## anon

Good Morning,

I have claimed prescription (via e-mail) with receipt and acknowledgement from the Attorney, in respect of a FNB Credit Card Debt where last payment was made around July 2007. Despite the attorneys acknowledging my claim to prescription, the attorneys have went ahead a couple of months later and obtained a judgment against me. I reside in the Western Cape, and this matter arose in Johannesburg.

Surely this goes against the precedents set in the Prescription Act.

Please advise on the way forward.

Thank You in advance

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## sterne.law@gmail.com

Prescription and legal ethics aside, which court? Magistrates or high court?

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## anon

Johannesburg Magistrates Court

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## sterne.law@gmail.com

I thought so.
In addition to the prescription issue, the mag court  seldom has jurisdiction.
To have jurisdiction over a contract issue, the entire contract and breach must be in that courts area. The court where you reside would also have jurisdiction.

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## anon

GM Anthony,

Thatnk you for your response. I am a not a member of the legal fraternity, so if you would kindly explain your post it would be appreciated.

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## sterne.law@gmail.com

The JHB mag court was not actually authorised to rule on the matter (or most unlikely). It is another common 'trick' used to prevent people defending a case.
Jurisdiction (authority to hear a case), like prescription must be raised as a defence.

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## anon

Forwarded message 
From: CCCCCCC<ccccc@gla.co.za>
Date: Mon, Jun 10, 2013 at 2:20 PM
Subject: Re: First National Bank Card - Your ref: Ref
To: X

Hello Mr X.
Thank you for your email, contents of which have been noted.
I will forward this to our client and close the account on our side.
Kind regards,
C
Original Message From: naidooyogin@gmanil.com

Sent: Monday, June 10, 2013 2:02 PM
To: cccccc@gla.co.za
Cc: X
Subject: First National Bank Card - Your ref: Ref

“Without prejudice, and all rights reserved.”

1. I refer to the above matter and further to my attached extinctive prescription claim;
2. I hereby serve my extinctive “PRESCRIPTION CLAIM” on you with regards to a First National Bank account ,
3. In keeping with legislative requirements, industry generally accepted norms and good corporate governance, kindly process my extinctive prescription claim and confirm to writing on your signed letterhead that this debt is indeed prescribed and that your computer systems and credit bureaus have/will be updated accordingly with regards to this prescription claim.
4. I submit that the standard manner in which a prescription claim is processed is as follows: The creditor establishes when the last payment was made. The debt then becomes due and payable a month later. Should a period of 3 years elapse from the date of the last payment the debtor becomes eligible for prescription. The creditor ascertains if the debtor is listed on XDS, Experian and Transunion ITC. The creditor establishes whether any events to interrupt prescription has transpired such as actual payments or acknowledgement of debt. Should these exceptions not apply, the creditor then confirms in writing on their signed letterhead that the debt is indeed prescribed, that they have/will update all credit bureaus and furthermore that they abandon their claim on this matter;
5. The last payment made on this account was on around 01 January 2007, This debt became eligible for extinctive prescription on January 2010 which I now formally claim.
Kindly revert and please advise accordingly
Kind regards,
X
“Without prejudice and all rights reserved.”

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## sterne.law@gmail.com

To return to the original issue of if they could proceed.

Even though you raised the issue, it does not preclude them form starting a legal process. Once a summons is received then prescription is raised as a defence.
Of course, if a matter goes to court, and prescription is succesfully raised, and there was a prior communication, the court may award punitive costs as they will not be happy with the matter having come to court.

You are not clear if you received summons for this matter.

You need to apply for a recission of the judgement, either because you did not get any notice of proceedinsg or you got notice, sent the email and thought it was resolved (and received no furtehr communications.)

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Citizen X (16-Dec-13)

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## anon

Forwarded message 
From: C<C@gla.co.za>
Date: Mon, Jun 10, 2013 at 2:20 PM
Subject: Re: First National Bank Card - Your ref: Ref
To: X


Hello Mr X.
Thank you for your email, contents of which have been noted.
I will forward this to our client and close the account on our side.
Kind regards,
C
Original Message From: X

Sent: Monday, June 10, 2013 2:02 PM
To: c@gla.co.za
Cc: X
Subject: First National Bank Card - Your ref: Ref


“Without prejudice, and all rights reserved.”

1. I refer to the above matter and further to my attached extinctive prescription claim;
2. I hereby serve my extinctive “PRESCRIPTION CLAIM” on you with regards to a First National Bank account ,
3. In keeping with legislative requirements, industry generally accepted norms and good corporate governance, kindly process my extinctive prescription claim and confirm to writing on your signed letterhead that this debt is indeed prescribed and that your computer systems and credit bureaus have/will be updated accordingly with regards to this prescription claim.
4. I submit that the standard manner in which a prescription claim is processed is as follows: The creditor establishes when the last payment was made. The debt then becomes due and payable a month later. Should a period of 3 years elapse from the date of the last payment the debtor becomes eligible for prescription. The creditor ascertains if the debtor is listed on XDS, Experian and Transunion ITC. The creditor establishes whether any events to interrupt prescription has transpired such as actual payments or acknowledgement of debt. Should these exceptions not apply, the creditor then confirms in writing on their signed letterhead that the debt is indeed prescribed, that they have/will update all credit bureaus and furthermore that they abandon their claim on this matter;
5. The last payment made on this account was on around 01 January 2007, This debt became eligible for extinctive prescription on January 2010 which I now formally claim.
Kindly revert and please advise accordingly
Kind regards,
X
“Without prejudice and all rights reserved.”

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## anon

As explained previously, I have moved to the Western Cape from GP, in Feb this year.

1) in early June this year, I had received a CALL (and I think that she emailed me Demand via Email) from Ms C who stated that I owed FNB Card and her company was acting on behalf of FNB. 
2) I had requested her email address, and responded by claiming prescription on the debt.
3) I did receive confirmation to that effect: - "Thank you for your email, contents of which have been noted.
I will forward this to our client and close the account on our side"
4) Ms C (acting on behalf of the company had my Cell Number AND Email address (to which she had responded)

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## anon

No summons was delivered to me in the Western Cape/emailed to me etc... - I assume that the original domicilim address was used (for all intents and purposes, was in Roodepoort). IIRC, FNB Card has a clause to the effect that I consent to any Magistrates Court being used

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## anon

> To return to the original issue of if they could proceed.
> 
> Even though you raised the issue, it does not preclude them form starting a legal process. Once a summons is received then prescription is raised as a defence.
> Of course, if a matter goes to court, and prescription is succesfully raised, and there was a prior communication, the court may award punitive costs as they will not be happy with the matter having come to court.
> 
> You are not clear if you received summons for this matter. You need to apply for a recission of the judgement, either because you did not get any notice of proceedinsg or you got notice, sent the email and thought it was resolved (and received no furtehr communications.)


I have not received the summons personally, here in the Western Cape, or any notice of informing me otherwise of my prescription claim - Can I apply for a rescission here in the Western Cape ?

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## Citizen X

*LegalWise assists you with drafting a letter in which prescription is claimed. So, if you have a LegalWise policy, it will prove to be very beneficial to you with matters regarding prescription
*
*How can LegalWise assist you?
*
LegalWise can assist you with the following:
· write a letter to your creditor stating that prescription has lapsed, been delayed or interrupted; and
· calculate your prescription period for you.[1]


[1] LegalWise: http://www.legalwise.co.za/index.php?cID=170. Accessed 20 January 2014

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## Citizen X

_ “de boniis propriss”_ 


I recently had to study two very lengthy cases for academic purposes. 



Little did I know that I would _import an explosive idea_ from these two cases. An idea that could and should assist the unrepresented defendant in a case where summons is sued out for a prescribed debt in a case where the debtor has in writing prior to judicial process informed the creditor and/or their attorney that the debt is prescribed.



The foregoing does require a word of explanation [time permitting]…I’ll put something together and make a post in due course.

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## Citizen X

*Sale of prescribed debt prohibited; collection of prescribed debt prohibited

*

The National Credit Amendment Bill 19 of 2014 has been signed into law.
Seeing that I don’t ‘google’ my Legislation or Bill[I obtain them from official sites], I’m confident that the following is highly accurate:

*126B.Application of prescription on debt*
(1)
(a) *No person* may sell a debt under a credit agreement to which this Act applies and that has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969).
(b) *No person* may continue the collection of, or re-activate a debt under a credit agreement to which this Act applies-
(i) which debt has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969); and
(ii) where the consumer raises the defence of prescription, or would reasonably have raised the defence of prescription had the consumer been aware of such a defence, in response to a demand, whether as part of legal proceedings or otherwise.
_[Proposed amendment: S. 126B to be inserted by s. 31 of Act 19/2014 w.e.f. a date to be proclaimed]_

It’s this last part of section 126B that I need to look into:

_[Proposed amendment: S. 126B to be inserted by s. 31 of Act 19/2014 w.e.f. a date to be proclaimed]_

It's the 'with effect from a date to be proclaimed,' that I'm looking into. Has section 126B taken effect? If so when? If not when?

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## Citizen X

I would like to take this opportunity to commend the Nimble Group, a debt collecting group, among other services rendered, for their stance that they have officially taken on prescribed debts.

I obtained the following from their website:

http://www.nimblegroup.co.za/news/prescription-and-the-changes-in-the-national-credit-amendments-act/

**Prescription relates to the extinguishing of an obligation (a debt) due to the passing of time.

To most South Africans, prescription refers to some medical document your doctor uses to authorise the dispensing of medicine by a pharmacy or clinic. Few South Africans are aware of the Prescription Act 68 of 1969 which relates to the extinguishment of a debt after a prescribed period of time. There are various rules which dictate the time period over which a debt may be considered extinguished or prescribed. There are also various actions which may interrupt or delay the period of prescription and cause a new period to start running afresh. Once one is aware of prescription, it is easy to find numerous articles and documents summarising, explaining and providing examples of the prescription of a debt.

The onus is on the consumer to claim the defence of prescription. Therefore, credit providers are legally entitled to collect a debt, even after the debt owing has technically prescribed (i.e. become extinguished), provided that the debtor has not raised the defence of prescription.

In May 2014, the President signed into law the National Credit Amendments Act (NCAB). S126B of the NCAB specifically relates to debt which has prescribed in terms of the Prescription Act. S126B requires the credit provider to cease collecting on prescribed (extinguished) accounts where the debtor raised prescription as a defence or where the debtor would have raised prescription as a defence had he/she been aware of this defence.

Nimble Group believes that we have the responsibility to educate our debtors on prescription and creating an awareness of this defence to assist our debtors in protecting and exercising their rights.  Our website provides visitors with full access to the Prescription Act 68 of 1969, the National Credit Act and specifically S126B of the National Credit Amendments Act (refer to our Resources page). We have sent our debtors SMSs requesting that they visit our website to gain an understanding of S126B, prescription and the effects this amendment may have on their accounts. Should a debtor consider that his/her account may be prescribed, we have provided an easy to complete prescription claim form on our Accounts Enquiry page where debtors can submit their claim. These claims will be assessed and feedback provided to the debtors.

It is our goal to continue to ensure that our debtors are made aware of the defence of prescription. We encourage our debtors to acquaint themselves with their rights in respect of the Prescription Act and the National Credit Act, seek advice from debt counsellors, legal or financial experts and fully understand the nature of prescription and the effect this may have on their accounts.**[1]



Well done NimbleGroup! This is ethical practice! This is in keeping with the term profession which in latin is _professio_  and means to make a public promise  or statement. :Clap: 


 [1] Nimble Group _prescription news_ http://www.nimblegroup.co.za/news/pr...mendments-act/ date of use 11 November 2014

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## Citizen X

I’m not one to bask in my own glory and I’m not doing so right now! 

[*“*I don’t need to have NO ambition, you know, I only have one thing that I’d really like to see happen, I’d like to see mankind live together Black, White, Chinese and anyone!*”*]


I’m merely reflecting with the benefit of hindsight. When I posted my first thread on extinctive prescription I was acutely aware that prescription *strictly and only* could be raised as a defence in court by way of a special plea.



I coined the phrase ‘extinctive prescription claim'*(I need to qualify this before my detractors take a bite at me.*)When I say I coined the phrase I mean claiming prescription directly from the creditor and/or their attorney as opposed to raising it as a special plea in court,’ 

I went through a process of literally arguing this concept with many CEO’s of banks and other financial institutions(have tons of emails to prove this). My premise was simply that if you demanding payment and if one has a comprehensive answer such as ‘the debt is prescribed and even if you do sue out summons, your action will dismally fail and you will be wasting the court’s time.’ It was the idea of completely resolving a matter before it even reaches the judicial process.

If one looks at the internet record, there were very few articles or writing on extinctive prescription and its *benefits to debtors* before 2011. In stark contrast the internet is literally saturated with articles on extinctive prescription today.
The power of TFSA created great awareness about extinctive prescription.
Shortly after 2011, I made written submissions to the South African Law Reform Commission about the amendment of the Prescription Act in favour of debtors, for the recognition of an ‘extinctive prescription claim,’ that day has arrived. I just didn’t apply my mind properly to which Act should be amended. As it were the NCA was amended




> Originally posted by Vanash Naick 26 September 2012
> This work will address the practical position of extinctive prescription claims in South Africa today. It will address the ease alternatively the difficult of claiming extinctive prescription in terms of section 11(d) of the Prescription Act 68 of 1969. It will reveal shortcomings in industry and the Prescription Act itself *and perhaps more importantly it will make recommendations for the amendment of the 1969 Act.* This work in and of itself is an impassioned plea to the South African Law reform commission to initiate the amendment of the 1969 Act. The purpose of such recommended amendments is to make the Act more meaningful and applicable to a debtor who is eligible for an extinctive prescription claim and simply wants to claim extinctive prescription.





> 26 September 2012 http://www.theforumsa.co.za/forums/s...ial-plea/page2 #12


 


> Originally posted by Vanash Naick 26 September 2012
>  1. Many financial institutions and major retailers don’t have rules, regulations, policy and procedure in place to process extinctive prescription claims;
> 2. Many financial institutions and major retailers cannot appreciate the difference between an extinctive prescription claim and a special plea of prescription;
> 3. Many debt collectors and attorneys acting on instruction of financial institutions and major retailers intentionally preclude a debtor from claiming extinctive prescription and engage in unethical conduct to get a debtor to unwittingly make a payment on a debt that would otherwise be eligible for an extinctive prescription claim. The debtor then unwittingly acts to his/her own prejudice by causing the prescription period to run afresh
> 4. Many debt collectors and attorneys acting on instruction of financial institutions and major retailers intentionally preclude a debtor from claiming extinctive prescription and engage in unethical conduct to get a debtor to unwittingly acknowledge debt that would otherwise be eligible for an extinctive prescription claim. The debtor then unwittingly acts to his/her own prejudice by causing the prescription period to run afresh
> 26 September 2012 http://www.theforumsa.co.za/forums/s...ial-plea/page2 #12






I feel vindicated that section 126B has been inserted to the NCA by way of amendment:



*Sale of prescribed debt prohibited; collection of prescribed debt prohibited

*

The National Credit Amendment Bill 19 of 2014 has been signed into law.
Seeing that I don’t ‘google’ my Legislation or Bill[I obtain them from official sites], I’m confident that the following is highly accurate:

*126B.Application of prescription on debt*
(1)
(a) *No person* may sell a debt under a credit agreement to which this Act applies and that has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969).
(b) *No person* may continue the collection of, or re-activate a debt under a credit agreement to which this Act applies-
(i) which debt has been extinguished by prescription under the Prescription Act, 1969 (Act No. 68 of 1969); and
(ii) where the consumer raises the defence of prescription, or would reasonably have raised the defence of prescription had the consumer been aware of such a defence, in response to a demand, whether as part of legal proceedings or otherwise.
_[Proposed amendment: S. 126B to be inserted by s. 31 of Act 19/2014 w.e.f. a date to be proclaimed]_

It’s this last part of section 126B that I need to look into:

_[Proposed amendment: S. 126B to be inserted by s. 31 of Act 19/2014 w.e.f. a date to be proclaimed]_

It's the 'with effect from a date to be proclaimed,' that I'm looking into. Has section 126B taken effect? If so when? If not when?

The credit goes to TFSA* (and rightfully so)*, without which none of this would have even had been possible. 

I therefore owe a debt of gratitude to Dave for giving autonomy with this thread.

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## IanF

Well done m'lud you have achieved greatness

----------

Citizen X (12-Nov-14)

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## Citizen X

> Well done m'lud you have achieved greatness


Ian, *WE* TFSA have achieved something here :Big Grin: 

Ian, I admire your use of classic English i.e "m'lud" many are striving for this title and _many_ are obsessed with titles. A title has never meant anything to me, I merely want to be of useful service to my fellow South Africans.

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## Blurock

Well done Vanash.

I have not followed the thread and may be therefore totally stupid as to what has gone before.
What I don't understand is that if someone owes me money and I eventually get summons against him, he can duck and dive until the debt is prescribed and then be resolved of all debt? Am I coming to the wrong conclusion here?

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## Citizen X

> Well done Vanash.
> 
> I have not followed the thread and may be therefore totally stupid as to what has gone before.
> What I don't understand is that if someone owes me money and I eventually get summons against him, he can duck and dive until the debt is prescribed and then be resolved of all debt? Am I coming to the wrong conclusion here?


Afternoon Blurock. Absolutely not! The events that interrupt prescription still exist. Judicial process is one of them, provided that you sue out summons on time, prescription stops running completely once summons is sued out. It is also still interrupted by an acknowledgement of debt and a payment within that 3 year period. Have a look at the National Credit forum, you'll see an interesting new thread!!!

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Blurock (14-Nov-14)

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## overmyhead

Hi,

I received a summons a few days ago for a debt from a vehicle tracking company. This is from a 36 month contract entered into in December 2008, on which no payments were made from June 2009, as I had sold the vehicle. I honestly thought the policy had been ceded to the new buyer, as I contacted them about it at the time. In the summons, they state that I "repudiated the contract, which repudiation they accepted" on 1 October 2010. To my mind, this means that this is when they consider the debt as having fallen due? The contract contained a clause saying that on cancellation I will be liable for the entire 36 months fees, so would that also fall due immediately on this acceptance of repudiation?


In any case, I am entering my notice of intention to defend tomorrow, and intend to raise a special plea of prescription of the debt. My concern is this -- There is a clause in the contract stating that the debt will not prescribe for a period of 6 years: 

*"The customer expressly agrees that no debt owed to ** by the customer shall become prescribed before the passing of a period of 6 (six) years from the date the debt falls due".*

 WHAT? Is that allowed? Surely then all contracts will contain a little clause that no one notices saying that the debt can't prescribe for however long they please??! Can I still claim prescription?

Any advice will be greatly appreciated!

Thanks, Fi

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## Citizen X

The short answer is prescription does apply. It must work if your pleadings are correct. You say you received a summons a few days ago. I’m not sure if you received a combined summons or the most likely one given the description of the debt a simple summons aka summons claim in respect of debt or liquidated demand. It calls on you only to enter your notice of intention to defend within a certain time which you have done. The Plaintiff must then file what is called a declaration(the very same things as a particulars of claim).

The further specific thing you mention is the unlawful clause. The short answer is that one of the requirements of any valid contract is that it’s very purpose, objectives and conclusion must be unlawful. It also can’t go against public policy or the ethos of other specific legislation created to cater for certain debts[National credit Act 34 of 2005(NCA)]. It also cannot mandate what a specific piece of legislation should be subject to. The Prescription Act 68 of 1969 is not subject to their clause. It speaks with legislative authority. Your case is further strengthened by the fact that the debt is prescribed, a new section has been inserted into the National Credit Act(among many others) to cater specifically for the prescription of debts and all matters incidental to it to such an extent that it says that no person can collect a prescribed debt or sell a prescribed debt.
Hope this helps

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## Citizen X

Section 126(B) of the National Credit Act is in effect, it applies retrospectively from 13 march 2015

[S. 126B inserted by s. 31 of Act 19/2014 w.e.f. *13 March 2015*]

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## DDVILJOEN

Hi Vanash, I stumbled over your thread here and need some advice. I have had no dealings Nedbank since 2008. In January 2016 I opened a new account with them and was abruptly and with out warning debit over R8000 for an account that they claim I overdrew. At first they agreed to pay the money back. Then I was told to send them an email, which I did, claiming prescription and refusing to acknowledge any debt without proof, Nedbank then claimed that I agreed to a debit order for which I again asked for proof of, instead of sending proof they called me and informed me that they would not be paying anything back unless I signed a debit order. I get the sneaky suspicion that they are trying to force a prescription into lapsing. What recourse do I have?

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## Citizen X

> Hi Vanash, I stumbled over your thread here and need some advice. I have had no dealings Nedbank since 2008. In January 2016 I opened a new account with them and was abruptly and with out warning debit over R8000 for an account that they claim I overdrew. At first they agreed to pay the money back. Then I was told to send them an email, which I did, claiming prescription and refusing to acknowledge any debt without proof, Nedbank then claimed that I agreed to a debit order for which I again asked for proof of, instead of sending proof they called me and informed me that they would not be paying anything back unless I signed a debit order. I get the sneaky suspicion that they are trying to force a prescription into lapsing. What recourse do I have?


Hi DD Viljoen,

Off the cuff and in my opinion, regarding the first account[the one that the bank abandoned in 2008] according to current NCA provisions, the bank was to have regarded the debt as prescribed and not reactivate the prescribed debt(Section 126 B). That said, regarding your opening of a new account, this was a complete separate transaction, a different account. A bank shouldn’t, especially when it is a prescribed debt, take  money unilaterally without your knowledge, consent, approval[this debit came as a surprise to you I presume]. In any event if a Bank argues that a unilateral debit is to be regarded as a payment by a debtor, then this is a simulated transaction as it was not made by the debtor himself/herself, in fact it was taken by the bank. I think that the bank ought to give you back that money.[Remember to ensure that all the elements/requirement of prescription apply]

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## DDVILJOEN

Yes the debit came as a complete surprise and after initially agreeing to pay it back the bank is now holding on to the funds until I agree to enter into a debit order agreement with them. I refuse to let them force a lapse in the prescription! After I asked them to provide me with proof of where I acknowledged the alledged debt or agreed to make a payment of any kind I was contacted by a debt collecter who sent me a breakdown of a bill but still with out proof of any alledged agreement. I am sorely tempted of laying a charge of blackmail against the bank.

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## Citizen X

> Yes the debit came as a complete surprise and after initially agreeing to pay it back the bank is now holding on to the funds until I agree to enter into a debit order agreement with them. I refuse to let them force a lapse in the prescription! After I asked them to provide me with proof of where I acknowledged the alledged debt or agreed to make a payment of any kind I was contacted by a debt collecter who sent me a breakdown of a bill but still with out proof of any alledged agreement. I am sorely tempted of laying a charge of blackmail against the bank.


Good morning DDViljoen,

Indeed, unilateral payments(according to case law), can never be seen as 'payment,' in terms of the prescription Act. That said, should you require my personal intervention, please send me a private message

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## Citizen X

If you have received a summons for a prescribed debt, I can assist. Send me an email at vnaik@thenaikgroup.co.za

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