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[2014] ZAGPJHC 390
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Dynamic Sports Marine Products CC v Gutteridge and Others (30320/13) [2014] ZAGPJHC 390 (25 July 2014)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG LOCAL DIVISION
JOHANNESBURG)
Case No: 30320/13
DATE: 25 JULY 2014
In the matter between:
DYNAMIC SPORTS MARINE PRODUCTS
CC
.............................................
Plaintiff/Applicant
And
GRAIG
GUTTERIDGE
............................................................
First
Defendant/First Respondent
H20 DYNAMICS
CC
.......................................................
Second
Defendant/Second Respondent
A RUTHERFORD MARINE PTY
LTD
..................................
Third
Defendant/Third Respondent
JUDGMENT
FRANCIS J
1. The plaintiff brought an application
to join Hudaco Trading (Pty) Ltd (Hudaco) as the third defendant in
the place of A Rutherford
Marine (Pty) Ltd ( Rutherford Marine), the
presently cited third defendant in the action instituted by the
plaintiff in this court
under case number 30320/2013. It also
sought to amend its particulars of claim as contained in its notice
to amend dated 6 October
2013. It appears that the defendants do not
oppose the granting of the application to amend save for that
relating to the joining
of Hudaco as a third defendant.
2. The plaintiff instituted an action
for damages against the three defendants, jointly and severally,
arising from the alleged
diversion of business by the first
defendant, a former employee of the plaintiff to the second
defendant, a close corporation established
by the first defendant, to
the third defendant. The claim is for unlawful competition claim
and the passing of claim. The plaintiff
also claims payment of
certain amounts from the first
defendant in respect of monies allegedly received by the first
defendant for which he failed to account
to the plaintiff.
3. The plaintiff alleges inter alia in
its particulars of claim that it had concluded an agreement with the
first defendant on 7
September 2006 in terms of which the first
defendant was employed by it with effect from18 September 2006 in the
capacity as a
business development manager, South Africa. As an
employee of the plaintiff, the first defendant owed the plaintiff a
duty of
loyalty which included the duty to act in the best interest
of the plaintiff; the duty not to act adversely to the best interest
of the plaintiff and the duty to avoid a conflict of interest between
the advancement of the plaintiff’s interests and the
first
defendant’s personal interests. The first defendant’s
employment by the plaintiff was terminated with effect
from 31
October 2010 pursuant to notice of termination given to the first
defendant by plaintiff on 26 October 2010.
4. It is further alleged in the
particulars of claim that prior to the receipt of termination of
employment on 26 October 2010 the
first defendant breached the duty
of loyalty which he owed to the plaintiff in that he inter alia
caused to be registered the second
defendant with the object of
competing with the plaintiff in the business of
importation and distribution of marine
sports products including a Personal Floatation Device (PFD); he
initiated contact with
the third defendant and subsequently took
employment with the third defendant as a sales representative to
market and sell sports
marine products including PFDs and other
sports marine products in direct competition with the plaintiff; he
made contact with
the plaintiff’s Chinese suppliers of product
and placed orders with such suppliers through the second defendant.
5. It is further alleged that on 6
September 2010, and after the first defendant had already sourced the
plaintiff’s Chinese
suppliers of product and made arrangements
with the third defendant to supply the third defendant with PFDs
(through the second
defendant and to act as the selling agent for the
third defendant), the first defendant, without disclosing to the said
Marks the
aforesaid facts, informed Marks that he wished to himself
take the risk of using the funds and knowledge which he had to reap
personal
reward by independently taking on the challenge of funding,
sourcing and approving his own range of PFDs with the NRCS and then
importing and selling them unto the South African market. The first
defendant acted in collusion with the third defendant which
had
knowledge of the fact that the first defendant’s conduct
towards the plaintiff was unlawful act but nevertheless engaged
with
the first defendant to divert business and custom form the plaintiff
to the second defendant and the third defendant.
6. The plaintiff is seeking certain
relief against the defendants which is contained in its prayers in
the particulars of claim.
It seeks a full statement of account,
supported by vouchers of all sales effected by the defendants of PFDs
during the period
1 August
2010 to date of judgment; a debatement
of such statement of account; payments by the defendants of the
profits derived from the
sale of such PFD’s during the said
period and an interdict restraining the defendants from utilising, in
the marketing of
their PFD etc.
7. The first and second defendants in
their plea denied that the first defendant is employed by A
Rutherford but that he is employed
by Hudaco in its Rutherford Marine
Division. It is pleaded further that there is no company registered
under the name A Rutherford
Marine (Pty) Ltd and that Hudaco has a
trading division known as Rutherford Marine. It is further admitted
that that the first
defendant caused the second defendant to be
registered and that he took up employment with Hudaco in its
Rutherford Marine Division
as a sales representative to market and
sell sports marine products including PFDs.
8. As a result of the plea, the
plaintiff brought an application to amend to substitute Rutherford
with Hudcaco as a third respondent
in the proceedings.
9.The application to amend was opposed
by Hudaco. The opposing affidavit was deposed to by Arusa Asari who
described herself as
the financial director of the Rutherford Marine
Division of Hudcao Trading (Pty) Ltd. The application was opposed on
the grounds
that the defendant has failed to provide any meaningful
explanation as to why or how the erroneous citation of Rutherford
Marine
as the third
defendant had occurred. The second
ground of opposition is that Hudaco would be materially and
irreparably be prejudiced if it
were to be allowed to be substituted
in
the place of Rutherford Marine as the
third defendant because the alleged unlawful conduct on which the
plaintiff’s proposed
claims against Hudaco are founded occurred
prior to the end of October 2010. The claims which the plaintiff
seeks to pursue against
Hudaco arose not later than the end October
2010. If the actions in respect of those claims were now to be
instituted by the plaintiff
against Hudaco, such claims will have
become prescribed and not enforceable. If Hudaco were to be
substituted as the third defendant
in the action, the effect of such
substitution would be deprive Hudcao of its defence of prescription.
10. It is trite that the general
approach of our courts when dealing with an amendment of a pleading
is that it should be allowed,
unless the application to amend is mala
fide or unless the amendment would cause such injustice to the other
side as cannot be
compensated by an order of costs. In this regard
see Embling and another v Two Oceans Aquarium CC
2000 (2) ALL SA 355
(C).
11. The objection raised by Hudaco in
this matter is that if the amendment is allowed it would be deprived
of its defence of prescription.
The following was stated in
Blaauwberg Meat Wholseslaers v Anglo Dutch Meats (Exports)
2004 (3)
SA 160
SCA at paragraph 17 and 18:
“[17]There are, no doubt, a great
variety of factual possibilities which may arise in the context of
deciding whether s15
(1) has been complied with. It is, however,
unnecessary to go beyond the facts of this appeal in order to decide
its fate.
[18] It is, nevertheless, desirable,
because of the approach adopted by the Court a quo, to allude to
certain considerations. The
first is that, in the context of s15(1),
though not necessarily in relation to
the amendment of pleadings, the existence of another entity which
bears the same name as that
wrongly attributed to a creditor in a
process is irrelevant. That is not the creditor’s concern or
responsibility. Secondly,
an incorrectly named debtor falls to be
treated somewhat differently for the purpose of s 15(1). That that
should be so is not
surprising: the precise citation of the debtor
is not, like the creditor’s own name, a matter always within
the knowledge
of or
available to the creditor. 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 errors in its own citation.
Proof
of service on a person other than the one named in the process
may thus be sufficient to interrupt prescription if it should
afterwards
appear that the person was the true debtor. This may
explain the decision in Embling (supra), where the defendant was
cited in
the summons of Acquarium Trust CC whereas the true debtors
were the trustees of the Acquarium Trust. Services were effected at
the place of business of the trust and came to the knowledge of the
trustees. In the light of what I have said such service was
relevant
to proof that s 15(1) had been satisfied and was found to be so by
Van Heerden J (at 700D, 701D)”.
12.It is clear from the aforementioned
matter that Hudaco is a true debtor in this matter. Although Hudaco
was not cited in the
exact terms, it knew of the action instituted by
the plaintiff. Hudaco has employed the first defendant as its
employee in its
Rutherford Marine division. There is a close nexus
between Rutherford Marine and Hudaco. It is also to be noted that
the opposing
affidavit was filed by one Arusa Asari who has described
herself as the financial director of Rutherford Marine Division which
is for all and intents and purposes the same creditor. It would
appear that prescription in this instance will not arise and if
it
were to arise, it will not succeed based on the Blaauwberg Meat
decision but that is a decision that I leave to be determined
by
another court should Hudaco want to raise the issue of prescription.
13.The failure by the plaintiff to have
given an explanation about how it came about that it had cited
Rutherford Marine as the
third defendant and not Hudaco is not fatal
to
this application. The explanation is
obvious.
14. Hudaco has failed to demonstrate
that it will suffer an injustice if the application was not allowed.
In my view a greater
injustice will be suffered by the plaintiff if
the application to amend was not allowed.
15. I do not believe that this is a
matter where costs should follow the result. An appropriate order
would be that costs are costs
in the cause.
16. In the circumstances I make the
following order:
16.1 Leave to join Hudaco Trading (Pty)
Ltd as the third defendant in the place of A Rutherford Marine (Pty)
Ltd, the presently
cited third defendant, in the action instituted by
the plaintiff under case number 2013/30320 is granted.
16.2 The plaintiff is granted leave to
amend the combined summons and particulars of claim in the action in
terms of the notice
of intention to amend, annexed hereto and marked
“A”.
16.3 The defendant is granted leave to
deliver the amended pages consequent upon the said amendment on the
first and second defendants
and on Hudaco Trading (Pty) Ltd within 10
days of the granting of this order.
16.4 The costs of this application are
costs in the cause of the action.
FRANCIS J
HIGH COURT JUDGE
FOR APPLICANT : H PRETORIUS
INSTRUCTED BY SHEPSTONE &
WYLIE ATTORNEYS INC
FOR RESPONDENT : PT ROOD SC
INSTRUCTED BY FLUXMANS INC
DATE OF HEARING : 21 JULY 2014
DATE OF JUDGMENT : 25 JULY 2014