The National Credit Act does not apply to a loan granted to a company. Each of Kruger Ranch’s arguments that attempted to stop its own liquidation have been systematically dismantled by the Johannesburg High Court, including that Absa was negligent in loaning it money. It was the very debt to Absa that caused its liquidation in the first place, as it was overdue.
Judge Wilson alsoslammed the company’s lawyers: “The fundamental problem in this case is the manner in which Kruger Ranch’s legal representatives have allowed themselves to abet an application which transparently lacks merit, and which has been slovenly pursued.” Then, Kruger Ranch was found lacking in its argument that a loan Absa Bank had granted it in 2019 was a case of “reckless lending”. “This overlooks the fact that the [National Credit] Act does not apply to the loan, because Kruger Ranch is a juristic entity, whose turnover exceeds the relevant amount the Act prescribes.” The company’s bid to escape being wound up – a winding-up order was granted in February 2025 – also relied in its claim that its debt to Absa Bank, for an undisclosed value, had prescribed. The court rejected this, finding that the debt – defaulted on in April 2024 – is clearly enforceable.
“Thefull outstanding amount repayableon the loan fell due when Absa called the loan up on default. This could only have happened after the default occurred, on 16 April 2024,” wrote the judge. Assuming that the amount due under the loan agreement was an ordinary debt, Absa’s claim for it would have prescribed on 17 April 2027 at the earliest, read the judgment.
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Under South African law, prescription sets time limits on when debts can be enforced. In most cases, a creditor has three years from the date a debt becomes due to take legal action, failing which the claim becomes unenforceable. Prescription can be interruptedif the debtor acknowledges the debt or if legal proceedings are started. Some debts, including those secured by a mortgage bond, prescribe over longer periods.
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