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[2016] ZASCA 54
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Foxlake Investments (Pty) Ltd t/a Foxway Developments (Pty) Ltd v Ultimate Raft Foundation Design Solutions CC t/a Ultimate Raft Design and Another (144/2015) [2016] ZASCA 54 (1 April 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not reportable
Case
No: 144/2015
In
the matter between:
FOXLAKE
INVESTMENTS (PTY) LTD t/a
FOXWAY
DEVELOPMENTS (PTY) LTD
APPELLANT
and
ULTIMATE RAFT
FOUNDATION DESIGN
SOLUTIONS CC t/a
ULTIMATE RAFT
DESIGN
FIRST RESPONDENT
JT
PIDGEON
SECOND RESPONDENT
Neutral
Citation:
Foxlake
Investments v Ultimate Raft Foundation Design
(144/15)
[2016] ZASCA 54
(01 April 2016)
Coram:
Maya
AP, Seriti, Pillay and Willis JJA and Victor AJA
Heard:
17
March 2016
Delivered:
01
April 2016
Summary
:
Civil Procedure and Practice – an order amending the incorrect
description of a defendant in a summons does not amount to
a
substitution of the defendant where the summons was served at the
offices and on the director shared by the incorrectly cited
party and
the true defendant who was clearly recognisable from the original
summons – original summons complied with the
requirements of s
15(1) of the Prescription Act 68 of 1969 and service thereof
interrupted running of prescription.
ORDER
On
appeal from:
Gauteng
Division of the High Court, Pretoria (Strydom AJ sitting as court of
first instance).
The
appeal is dismissed with costs.
JUDGMENT
Seriti
JA (Maya AP, Pillay and Willis JJA and Victor AJA concurring)
[1]
The respondents (plaintiffs in the court a quo) instituted an action
against the appellant (defendant in the court a quo) in
the Gauteng
Division, Pretoria, claiming, inter alia, a certain amount of money
based on an alleged breach of contract alternatively
unlawful
competition and unauthorised use of the respondents’
confidential proprietary information.
After
a number of procedural skirmishes challenging the respondents’
pleadings set out hereunder,
the
respondents filed a notice to amend the citation of the appellant and
the appellant opposed the proposed amendment. The application
came
before Strydom AJ and he granted the order sought by the respondents.
It is to that order that the appeal to this Court is
directed with
leave of the court a quo.
[2]
The main issues in this appeal are whether (a) the amendment to the
citation of the appellant amounted to a substitution of
a defendant
or the correction of a misnomer and (b) the service of the original
summons served to interrupt prescription. The respondents
however
took issue with the appealability of the order of the court a quo in
light of
Zweni
v Minister of Law and Order
[1993]
1 All SA 365
A at 365 (A) at 369-370…. Because of the view I
take of the merits of this appeal, I will assume for purposes of this
judgment,
without making any decision, that the order is appealable.
[3]
The factual background of the appeal is briefly as follows. Foxway
Developments (Pty) Ltd (Foxway) and Foxlake Investments (Pty)
Ltd
(Foxlake) share the same registered address, principal place of
business, contact details, receptionist and managing director,
namely
Mr R Henry. The respondents instituted the action against the
appellant on 13 July 2012. In the particulars of claim the
respondents cited the appellant as follows:
‘
4.
Foxlake Investments (Pty) Ltd t/a Foxway Developments (Pty) Ltd, a
company duly registered and incorporated in terms of the company
laws
of the Republic of South Africa under registration number
1970/012838/07 with its principal place of business. . . .’
The
particulars of claim further alleges that Foxlake Investments (Pty)
Ltd t/a Foxway Developments (Pty) Ltd entered into an agreement
with
the respondents in terms of which the appellant appointed the first
respondent as a consulting engineer on the Boitekong project.
[4]
The copy of the agreement between the parties was attached to the
particulars of claim. The agreement indicates that the first
respondent entered into an agreement with Foxway. The street address,
fax number and name of the managing director of Foxway are
indicated
on the agreement.
[5]
On 31 August 2012, the appellant raised an exception to the
particulars of claim. The notice of exception the relevant part
of
which reads as follows:
‘
2.
Ex facie the contents of the agreement, attached to the plaintiff’s
particulars of claim . . . the first defendant is not
a party to the
agreement as alleged.
3.
Accordingly, no cause of action lies against the first defendant in
that:
3.1
the contracting parties are reflected as the first plaintiff and
Foxway Developments (Pty) Ltd;
3.2
Foxlake Investments (Pty) Ltd with registration number 1970/012838/07
is a separate legal entity that does not trade as Foxway
Developments
(Pty) Ltd.
3.3
Foxway Developments (Pty) Ltd with registration number 1968/006089/07
is a separate legal entity and is not a trading Division
of Foxlake
Investments (Pty) Ltd.’
[6]
Upon receipt of the notice of exception the respondents elected to
amend the citation of the appellant as reflected in paragraph
4 of
the particulars of claim by substituting the word ‘trading as’
with the word ‘alternatively’ and by
deleting the words
‘under registration number 1970/012838/07.’ Once this was
effected paragraph 4 of the particulars
of claim would have read as
follows:
‘
The
first defendant is Foxlake Investments (Pty) Ltd alternatively Foxway
Developments (Pty) Ltd a company duly registered and incorporated
in
terms of the company laws of the Republic of South Africa with its
principal place of business. . . .’
[7]
After the amended pages were served on the appellants, they filed
another notice of exception which reads in relevant part as
follows:
‘
7.
The plaintiffs alleged in their particulars of claim that the first
defendant ie, Foxlake Investments (Pty) Ltd alternatively
Foxway
Developments (Pty) Ltd entered into an agreement with the first
plaintiff in terms of which the first defendant has appointed
the
first plaintiff as consulting engineer on their Boitekong Project. .
. .
8.
Ex facie the contents of the agreement attached to the plaintiffs’
particulars of claim. . . Foxlake Investments
(Pty) Ltd is not
a party to the agreement.’
[8]
On 20 August 2013 the respondents filed a notice of amendment
seeking to amend paragraph 4 of their particulars of claim
which, at
that stage, cited the first defendant as Foxlake alternatively
Foxway. The amendments sought by the respondents were
directed at the
deletion of the words ‘Foxlake Investments (Pty) Ltd
alternatively’ from their particulars of claim
thereby citing
Foxway as the first defendant. The appellants did not oppose the
proposed amendment.
[9]
In argument before us the appellant’s counsel submitted that
the amendment which the respondents sought in the court below
was
directed at the deletion of the words ‘Foxlake Investments
(Pty) Ltd alternatively’ from the summons and the particulars
of claim, that it sought to introduce Foxway – a separate legal
entity – as the first defendant and that the summons
were never
served on Foxway. He further submitted that the proposed amendment
sought to introduce Foxway as a party to the action
in
circumstances where the alleged claim against Foxway had, in terms of
s 15 of the Prescription Act 68 of 1969 (the Act)
prescribed.
[10]
On the other hand, the respondents’ counsel in this court
submitted that Foxway appeared on the initial summons and particulars
of claim, and that the amendment only sought the deletion of Foxlake
so as to leave Foxway as the sole first defendant. He further
argued
that the proposed amendment did not seek to introduce a new legal
entity and that the amendment was in the nature of correcting
a
misnomer rather than a substitution.
[11]
In
Blaauwberg Meat Wholesalers CC v Anglo Dutch Meats (Exports)
Ltd
[2003] ZASCA 144
;
2004 (3) SA 160
(SCA) para 12
.
Heher
JA said:
‘
Amendments
are regulated by a wide and generous discretion which leans towards
the proper ventilation of disputes and are granted
according to a
body of rules developed in that context.’
In
Affordable Medicines Trust & others v Minister of Health &
another
[2005] ZACC 3
;
2006 (3) SA 247
(CC) para 9, Ngcobo J
said:
‘
The
principles governing the granting or a refusal of an amendment have
been set out in a number of cases. There is a useful collection
of
these cases and the governing principles in
Commercial
Union Assurance Co Ltd v Waymark NO
[1995
(2) SA 73
(Tk) at 76D-I]. The practical rule that emerges from these
cases is that amendments will always be allowed unless the amendment
is
mala
fide
(made in bad faith) or unless the amendment will cause an injustice
to the other side which cannot be cured by an appropriate order
for
cost, or “unless the parties cannot be put back for the
purposes of justice in the same position as they were when the
pleading which it is sought to amend was filed.”’
(Footnotes omitted.)
[12]
The appellants have not alleged that the amendment sought, is made in
bad faith although they allege that they will suffer
prejudice if the
amendment is granted because there was no compliance with the
provisions of s 15(1) of the Act as payment of the
debt was not
claimed from the debtor Foxway. Section 15(1) of the Act provides
that for the interruption of prescription there
must be a process,
the process must be served on the debtor and the creditor must claim
payment of the debt.
[13]
In
Blaauwberg
para 18, while dealing with s 15(1) of the Act,
Heher JA said:
‘
While
the entitlement of the debtor to know it is the object of the process
is clear, in its case the criterion fixed in s 15(1)
is not the
citation in the process but that there should be service on the true
debtor (not necessarily the named defendant) of
process in which the
creditor claims payment of the debt. The section does not say
‘. . . claims payment of the debt
from
the
debtor’
.
Presumably this is so because the true debtor will invariably
recognise its own connection with a claim if details of the creditor
and its claim are furnished to it, notwithstanding any error in its
own citation.’
[14]
As stated earlier, Foxway and Foxlake share the same registered
address, receptionist and managing director. The copy of the
agreement on which the claim is based was attached to the original
summons. In my view when the summons was served on the registered
address of both Foxway and Foxlake, Foxway recognised its connection
with the claim notwithstanding the error in its description.
The
amendment sought by the respondents in the court a quo did not seek
to introduce a new legal entity as the first defendant.
It merely
sought to correct the incorrect description of the defendant and
encourage the proper ventilation of the real disputes
between the
creditor (the respondents) and the debtor (appellant). The question
of prejudice to the appellants does not arise.
The summons was served
on the true debtor in which summons the creditor was claiming payment
of the debt from the debtor. It is
clear that the provisions of s
15(1) mentioned above were complied with.
[15]
In the result:
The
appeal is dismissed with costs.
____________
W L Seriti
Judge of Appeal
APPEARANCES:
For
Appellant:
HJ Smith
Instructed
by:
Cliffe
Dekker Hofmeyr Inc., Johannesburg
Webbers
Attorneys, Bloemfontein
For
Respondent:
Y Alli
Instructed
by:
DM
Kisch Inc., Pretoria
Phatshoane
Henney Inc., Bloemfontein