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[2012] ZAGPJHC 292
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Antonie v Noble Land (Pty) Ltd (2011/33953) [2012] ZAGPJHC 292; 2014 (5) SA 307 (GJ) (21 September 2012)
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REPORTABLE
SOUTH
GAUTENG HIGH COURT
(JOHANNESBURG)
CASE NO: 2011/33953
DATE:21/09/2012
In
the matter between:
MALGORZATA
JOLANTA ANTONIE
….........................................................
Applicant
And
NOBLE
LAND (PTY)
LTD
.............................................................................
Respondent
JUDGMENT
C.
J. CLAASSEN J:
[1]
The applicant in this application (Antonie) seeks an order that she
be substituted as the applicant in proceedings instituted
by Gert
Hendrik Johan Venter N.O. (Venter). On 20 September 2011 the latter,
in his capacity as the duly appointed trustee of the
insolvent estate
of Alida Maria Kamffer (Kamffer), instituted motion proceedings
against the respondent (Noble). That application
will be referred to
in this judgment as the “main application”.
[2]
In the main application, which is still pending, Venter seeks payment
of an amount of R180 000.00 plus interest and costs
from Noble.
Venter alleges that this amount is due and owing to the insolvent
estate of Kamffer arising from a settlement agreement
concluded
between the estate, Noble, Kamffer and two other parties.
[3]
Subsequent to the institution of the main application, and in January
2012, Noble applied for security for costs in the amount
of
R50 000.00 to be provided by Venter on the basis that the estate
was insolvent. On 14 March 2012 Kgomo J granted such an
order. The
effect of the order is to stay the proceedings until it has been
complied with.
1
It is unclear from the papers whether Venter complied with this
order.
[4]
The current application for substitution was launched on 19 April
2012. The need for such substitution arose after Venter and
Antonie
concluded a written agreement in terms whereof Venter ceded to
Antonie all entitlement to the main claim against Noble.
It is clear
from this agreement that the claim which is ceded refers to “…a
claim for R180 000-00 plus interest
and costs (which) has
already been instituted against” Noble in this court.
[5]
Noble does not dispute the existence and/or validity of the cession
although it is common cause that it was concluded without
Noble’s
consent or approval. It is further common cause that the agreement
was concluded after the main application had reached
the stage of
litis contestatio. As such a res litigiosa was ceded.
[6]
Noble’s opposition to the substitution is premised exclusively
on the potential prejudice it may suffer if the substitution
is
granted without an additional costs order particularly in regard to
those costs already incurred in the various legal proceedings
instituted prior to this application. In this regard, Noble relies on
a letter dated 10 May 2012 addressed to Antonnie’s
attorneys of
record and written by its own attorneys of record, wherein the
following is stated:
“
Our
client will consent to the substitution being made an order of court
on the following conditions:
3.1 We
receive, a written undertaking from Antonie, duly signed by her and
the original delivered to us, that she shall, in the
event that she
does not obtain an order as prayed for in the Notice of Motion under
the above-mentioned case number, by all the
costs arising from such
application from inception, including all the costs in connection
with the security for costs immediately
same become due and payable;
and
3.2 As
part of the order to substitute Antonie as the applicant in the above
matter, it is recorded that ‘Antonie shall in
the event that
she does not obtain an order as prayed for in the Notice of Motion
under the above-mentioned case number, be liable
for all the costs
arising from such application from inception, including all the costs
in connection with the security for costs,
and she shall pay same
immediately same become due and payable’;
3.3 Your
client, Antonie, by the costs of the application for substitution on
the basis that same was served at the 11th hour and
had we received
more appropriate notice thereof, enabling us to give proper
consideration thereto, we would have replied on the
same basis as set
out herein, without the need for delivering formal Notice to Oppose…”
(Emphasis added)
[7]
Antonie was not willing to supply the above-mentioned undertaking
which prompted the continuation of the present application.
Noble
filed its answering affidavit and Antonie her replying affidavit.
APPLICABLE
LEGAL PRINCIPLES
[8]
The substitution of a party to litigation by another is a procedural
matter.
2
It can either occur by virtue of an amendment to the pleadings, or an
application under Rule 15 of the Uniform Rules of Court or
in terms
of the common-law. Rule 15 applies where the substitution of a party
has become necessary due to a change of status of
such party. Where,
however, there is no change in status of a party involved, the court
will, under its common-law power, grant
an application for
substitution involving the introduction of a new persona on being
satisfied that no prejudice will be caused
to the opposite parties
which cannot be remedied by an order for costs or some other suitable
order, such as a postponement.
3
[9]
The substitution sought in the present application does not involve a
change in status. Rule 15 therefore does not apply. The
substitution
must accordingly be decided on the common-law principles applicable
where a party is obliged to obtain the leave of
the court to be
substituted for another party involved in pending proceedings.
[10]
Antonie’s application to be substituted, as I have alluded to,
arises from the cession agreement concluded between her
and Venter
after litis contestatio. In this regard, Leach J (as he then was) in
Van Rensburg v Condoprops 42 (Pty) Ltd
2009 (6) SA 539
(ECD) held as
follows:
4
“
It
is accepted by both sides, correctly, that where a cession of a claim
takes place after litis contestatio, the cessionary cedes
not his or
her interest in the claim, but in the result of the litigation, and
that, as the subject-matter of the cession is res
litigiosa, the
cession itself does not transfer the right to prosecute the action to
the cessionary. That right only accrues when
the court substitutes
the cessionary as plaintiff, the requirement that the substitution be
approved by the court being designed
to ensure that the defendant is
not prejudiced.” (Emphasis added)
[11]
The court exercises a discretion when adjudicating upon the question
whether or not it should grant such substitution. In exercising
such
discretion judiciously, the court will have to take into account
whether any party will suffer real or potential prejudice
if the
order is granted. As stated earlier, in the present case, Noble does
not oppose the granting of the substitution provided
an appropriate
costs order is included making Antonie liable for all costs incurred
since the inception of the main application,
should it ultimately be
dismissed.
EVALUATION
[12]
Under common-law there is no provision for the automatic backdating
of a party’s liability for costs incurred prior to
the order
for substitution, as is provided for in Rule 15. The question to be
decided in this instance is whether or not the mere
granting of the
order of substitution will render Antonie liable for all costs since
the inception of the main application.
[13]
As stated earlier, the causa for the substitution results from the
cession agreement. Due to the absence of any prior or subsequent
consent to the cession agreement by Noble, no privity of contract
exists as between Antonie and Noble arising from it. The costs
incurred in the legal proceedings prior to this application were as
between Venter, acting on behalf of the insolvent estate, and
Noble.
Should Noble ultimately be the successful party, it would, as a
creditor of the insolvent estate, be entitled to lodge a
claim
against the insolvent estate for payment of the costs incurred prior
to the substitution. This would, of course, have been
the position
even if there had been no substitution. On what basis then can the
possible prejudice Noble may suffer pursuant to
the proposed
substitution be cured?
[14]
This is not a case where the new debtor “stepped into the
shoes” of the old debtor by operation of law such as
would
occur in the case of the debtor merging with another.
5
The legal effect of a cession after litis contestatio is that it
terminates the proceedings instituted by the cedent, with the
corollary that the substitution of the cessionary, as the new
plaintiff or applicant, must be regarded as the institution of new
proceedings.
6
Applied to the facts of the present case it would in effect result in
a bad debtor (the insolvent estate) to be substituted by
a
potentially more credit worthy debtor (Antonie, assuming she is not
insolvent). The substitution will, for all intents and purposes,
benefit rather than prejudice Noble with regard to any future costs
order granted in its favour. As from the date of the order
of
substitution, Noble can look to a potentially credit worthier debtor
rather than an insolvent estate, for its costs if successful.
This
benefit does not, however, apply to the pre-substitution costs
incurred by Noble.
[15]
The order for security for costs I have referred to still stands.
However, should the substitution be ordered, the benefit
to Noble of
that order suspending litigation until security has been provided, is
rendered nugatory: Venter is no longer a party
in the main
application. To the extent that Venter has not yet provided such
security, the substitution will result in a loss of
the benefit Noble
derives from the order for security for costs. On the assumption that
the amount of R50 000.00 had been
paid, a stale mate position
would arise: the Registrar will not be able to release it to either
Noble or the estate in the absence
of any costs order issued by this
court entitling anyone such funds. Whichever way one looks at the
current position, the hands
of this court are tied while the security
for costs order is in force. I am unable to issue an order that is
irreconcilable with
the order of Kgomo J.
CONCLUSION
[16]
For the reasons set out above I find myself unable to further
adjudicate this application while the order granted by Kgomo
J is
still valid and enforceable. It follows that Antonie cannot succeed.
[17]
In the result:
a.
No order is made on the application.
b.
The applicant is ordered to pay the costs of this application.
THUS
DATED AND SIGNED ON 21 SEPTEMBER 2012 AT JOHANNESBURG
____________________
C.
J. CLAASSEN
JUDGE
OF THE HIGH COURT
Counsel
for the Applicant: Adv R. Shepstone
Counsel
for the Respondent: Adv L. Hollander
Attorney
for the Applicant: Michael Popper & Associates Inc
Attorney
for the Respondent: Rapeport Inc
Date
of Argument: 2 August 2012
1
See Rule 47(3) of the Uniform Rules of Court
2
See
Brummer v Gorfil Brothers Investments (Pty) Ltd en Andere
1999 (3) SA 389
(SCA) 410E – F
3
See Erasmus
Superior Court Practice
, B1-118, and also the
cases cited in footnotes 5 and 6 below
4
Paragraph [3]
5
See
Tecmed (Pty) Ltd and Others v Nissho Iwai Corporation and
Another
2011 (1) SA 35
(SCA)
6
See
Silhouette Investments Ltd v Virgin Hotels Group Ltd
2009
(4) SA 617
(SCA), as explained by Brand JA in
Tecmed
, supra,
at para 20