In debt collection matters, the main issues to be decided usually include whether or not the debtor is truly indebted to the creditor in the amount claimed. These issues can be difficult to prove without proceeding to trial even where the parties signed a contract documenting their agreement. Therefore, a party may save him/herself time and money by having a debtor sign an acknowledgment of debt in which the debtor unequivocally accepts liability in a certain amount. An acknowledgment of debt should ideally be executed when the debt arises or is due and provide for payment of the capital sum that is owed by the debtor, the interest to be levied on the outstanding amount and provision may be made for any other costs such as legal costs and collection commission that will be due from the debtor in the event of default. A debtor may also submit to the jurisdiction of the Magistrate’s Court in an acknowledgment of debt. If a person is signing on behalf of another legal person such as a company then that person must warrant that s/he has the relevant authority to execute the acknowledgement of debt and ideally the signatory should bind him/herself as a surety and co-principal debtor. Once executed, an acknowledgement of debt becomes what is called a liquid document.
Our law provides for the curtailment or the fast-tracking of proceedings where a litigant is in possession of a liquid document. The Courts have held that an acknowledgement of debt must be a clear, unequivocal and unambiguous written promise to pay a debt (See Sibanda v Mushapaidze HH-56-10). An acknowledgment of debt or any other liquid document is prima facie evidence of indebtedness. A debtor can only deny his/her signature or dispute the quantum by producing proof of payment after the execution of the acknowledgement of debt.
An application for summary judgment where the Plaintiff is in possession of an acknowledgment of debt is made in accordance with Order 15 of the Magistrate’s Court Rules, 1980. The procedure is as follows: after the plaintiff has issued summons and the defendant enters an appearance to defend, the plaintiff is entitled to make an application for summary judgment on the premise that the plaintiff possesses a liquid document and believes that the defendant does not have a bona fide defence to the action and that appearance has been entered solely for the purpose of delay. The application must be made within seven days of entry of appearance to defend.
In the High Court, a party in possession of an acknowledgment of debt is entitled to issue summons for provisional sentence in terms of Order 4 of the High Court Rules, 1971. Provisional sentence claims are supposed to be dealt with faster than regular summons claims on the unopposed roll. If provisional sentence is granted the Plaintiff may then cause a writ of execution to be issued after putting up security. In terms of Rule 28 of the High Court Rules the Defendant will then have one month to enter an appearance to defend the action, if s/he fails to do so the Plaintiff can apply for final judgment.
Acknowledgments of debts should be regularly updated to ensure that the liquid document does not prescribe. Generally claims prescribe three years after the debt arose or after the debt was admitted.
Harare, 16 March 2018
Rudo S Ncube
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