Did the service of the summons on the defendant close corporation at its registered office, through an employee of a different entity, constitute substantial compliance with rule 4(1)(a)(v) of the Uniform Rules of Court, thereby interrupting the running of prescription?
The case involves a delictual claim initiated by the plaintiff, Dalia Marcelle Botha, against the defendant, Arendsnes Sweefspoor CC, following an incident that occurred on 2 January 2004. On that day, the plaintiff sustained serious bodily injuries while being transported in a cable car operated by the defendant. The incident occurred when the clamps attaching the cable car to the cable became undone, causing the cable car to flip over and resulting in the plaintiff falling approximately 30 meters to the ground.
In the aftermath of the incident, the plaintiff sought to claim damages from the defendant. The defendant, however, raised a special plea asserting that the plaintiff's claim had prescribed under section 12 of the Prescription Act 68 of 1969. This plea was based on the argument that the plaintiff was required to serve the summons by midnight on 1 January 2007, three years after the incident.
The plaintiff's attorneys instructed the sheriff to serve the summons at the defendant's registered office. However, by the time of the attempted service, the defendant had ceased all business activities at that location. The registered office, which was also the address where the summons was to be served, was a building that housed a ticket office for the cable car operation and a restaurant operated by a different entity. The cable car business had been permanently closed by the Department of Labour on 3 October 2005, and since that date, the defendant had no presence or employees at the registered office.
On 12 December 2006, the sheriff made an initial attempt to serve the summons but was informed that the defendant had ceased trading and that only the restaurant remained operational. Following this, the sheriff consulted with the plaintiff's attorneys, who instructed him to proceed with serving the summons at the registered office, as it was still the official registered address of the defendant.
On 14 December 2006, during a second attempt, the sheriff served the summons on one Mr. Pretorius, an employee of the restaurant located at the premises. It was undisputed that Mr. Pretorius was not an employee of the defendant and did not pass the summons on to the defendant. The defendant contended that it had never received the summons and argued that the service was invalid because it did not comply with the requirements of rule 4(1)(a)(v) of the Uniform Rules of Court, which stipulates that service on a corporation must be made to a responsible employee at its registered office or, if no such employee is available, by affixing the summons to the main door of the office.
The plaintiff countered that the service was valid, asserting that the summons was served at the registered office of the defendant, which had not been deregistered despite the cessation of its business activities. The legal dispute centered on whether the service of the summons on Mr. Pretorius constituted substantial compliance with the rules governing service, thereby interrupting the running of prescription on the plaintiff's claim.
The ratio decidendi of the case is that service of a summons on a corporation at its registered office, even if delivered to an employee of a different entity, can constitute substantial compliance with the requirements of rule 4(1)(a)(v) of the Uniform Rules of Court. This substantial compliance is sufficient to interrupt the running of prescription under the Prescription Act, provided that the service effectively achieves the purpose of notifying the corporation of the legal proceedings against it.
The court emphasised that strict adherence to procedural rules should not undermine the administration of justice. It held that a corporation that fails to ensure the presence of a responsible employee at its registered office does so at its own peril and cannot later claim that the service was invalid. The decision reinforced the principle that the effectiveness of service, rather than mere technical compliance, is paramount in determining whether the service of process is valid.
The court relied on several cases in its reasoning process, including:
- Brangus Ranching (Pty) Ltd v Plaaskem (Pty) Ltd 2011 (3) SA 477 (KZP)
- Chris Mulder Genote Ing v Louis Meintjies Konstruksie (Edms) Bpk 1988 (2) SA 433 (T)
- Dawson and Fraser (Pty) Ltd v Havenga Construction (Pty) Ltd 1993 (3) SA 397 (B)
- Geldenhuis Deep Ltd v Superior Trading Co (Pty) Ltd 1934 WLD 117
- Hardroad (Pty) Ltd v Oribi Motors (Pty) Ltd 1977 (2) SA 576 (W)
- Hartley v Umkanganyeki 10 NLR 49
- Highfield Milling Co (Pty) Ltd v AE Wormald & Sons 1966 (2) SA 463 (E)
- Kgobane and Another v Minister of Justice and Another 1969 (3) SA 365 (A)
- Mynhardt v Mynhardt 1986 (1) SA 456 (T)
- Ncoweni v Bezuidenhout 1927 CPD 130
- Republikeinse Publikasies (Edms) Bpk v Afrikaanse Pers Publikasies (Edms) Bpk 1972 (1) SA 773 (A)
- Simmons NO v Gilbert Hamer & Co Ltd 1963 (1) SA 897 (N)
- Unlawful Occupiers, School Site v City of Johannesburg 2005 (4) SA 199 (SCA)
"Service of a court process must substantially comply with the relevant rules. In my view it does not matter whether one is dealing with a default judgment, a liquidation case or a case dealing with the interruption of prescription. It is trite that each case must be dealt with on its own particular facts and merits."
In the case of Arendsnes Sweefspoor CC v Botha, there was no formal minority judgment presented, as the decision was unanimous in dismissing the appeal. However, the reasoning of Leach JA, while agreeing with the conclusion of Shongwe JA, provided a more direct approach to the issue of service.
Leach JA's reasoning focused on the interpretation of the service of the summons as valid based on the established principles of substantial compliance. He emphasised that the summons was served at the registered address of the corporation, which is a critical factor in determining the validity of service. He noted that even though Mr. Pretorius was not an employee of the defendant, the service at the registered office was sufficient to meet the requirements of the rules.
In contrast, Shongwe JA's reasoning delved deeper into the broader implications of the rules and the necessity for corporations to maintain a responsible presence at their registered offices. He underscored that a corporation that fails to ensure that a responsible employee is present at its registered address does so at its own risk and should not be allowed to claim that service was invalid due to its own inaction.
The key difference in reasoning lies in the emphasis: Leach JA concentrated on the technical aspects of service and its compliance with the rules, while Shongwe JA highlighted the responsibilities of corporations in maintaining their registered offices and the implications of their failure to do so. Both judges ultimately agreed on the outcome, but their approaches to the reasoning reflected different facets of the legal principles at play.