Introduction
The prescription of debts in Zimbabwe is governed by the Prescription Act (Chapter 8:11), hereinafter called the Prescription Act or the Act. Prescription of a debt can be explained as the extinction of a debt or the loss of right by a creditor to claim a debt after the lapse a certain time allowed at law.
Types of prescription
Based on the laws of the Roman empire there are two types of prescription, namely acquisitive prescription and extinctive prescription. Acquisitive prescription is the acquisition of a right by lapse of time. On the other hand extinctive prescription, commonly referred to as prescription, is the extinction of a right by lapse of time.
Application of the Prescription Act
Part IV of the Prescription Act which covers sections 13 to 19, is quite important. According to section 14(1) a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant enactment (law) applies in respect of the prescription of such debt. In terms of section 2 of the Act, debt includes anything which may be sued for or claimed by reason of an obligation arising from statute, contract, delict or otherwise.
According to section 14(3) of the Act:
- Payment by the debtor of a debt after it has been extinguished by prescription in terms of this section shall be deemed to be payment of the debt.
- An agreement made by a debtor to pay a debt after the debt has been extinguished by prescription shall be enforceable.
Periods of prescription
Section 15 of the Prescription Act governs the periods of prescription of debts. Some of the prescription periods are as follows:
- Three (3) years in the case of debts unless they are covered under other categories which may be taken to be exceptions.
- Six (6) years in the case of a debt arising from a bill of exchange or other negotiable instruments or from a notarial contract or a debt owed to the State.
- Fifteen (15) years in the case of debt owed to the State and arising out of an advance or loan money or a sale or lease of land by the State to the debtor unless a longer period applies.
- Thirty (30) years in respect of a debt secured by mortgage bond, a judgment debt, a debt in respect of taxation imposed or levied by or under any enactment, a debt owed to the State in respect of any tax, royalty, tribute, share of the profits or other similar charge or consideration payable in connection with the exploitation of or the right to win minerals or other substances.
When prescription begins to run
According to section 16 of the Prescription Act:
- Prescription shall commence to run as soon as a debt is due.
- If a debtor wilfully prevents his creditor from becoming aware of the existence of a debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt.
- A debt shall not be deemed to be due until the creditor becomes aware of the identity of the debtor and of the facts from which the debt arises.
When completion of prescription is delayed
Section 17 of the Prescription Act applies and some of the situations include the following:
- Where the creditor is incapacitated to act at law.
- Where the creditor and debtor are married to each other and are partners and the debt arose from the partnership relationship.
- The debtor is outside Zimbabwe.
- The debt is a dispute under arbitration.
- The debt is a subject matter of a claim against a deceased or insolvent estate.
Interruption of prescription
According to section 18 the running of prescription shall be interrupted by an express or tacit acknowledgement of liability by the debtor. According to section 19 the running of prescription shall be interrupted by the service on the debtor of any (legal) process whereby the creditor is claiming payment of the debt.
Raising prescription in pleadings
According to section 20 of the Prescription Act no court shall of its own motion take notice of prescription. It is a party that invokes prescription. Many defendants in civil legal proceedings raise prescription as a special plea, point in lime or preliminary point so that it acts as a roadblock against the matter being heard on the merits.
Conclusion
An understanding of prescription is quite essential in disputes involving debts.
Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.
Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, registered tax accountant and advises on deals and transactions. He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He writes in his personal capacity. He can be contacted on +263 772 246 900 or ghofisi@hofisilaw.com or gohofisi@gmail.com. Visit www//:hofisilaw.com for more articles.
