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[2016] ZAGPJHC 40
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BASF Construction Chemicals South Africa (Pty) Ltd v CLF Concrete Laser Flooring (Pty) Ltd; In re: CLF Concrete Laser Flooring (Pty) Ltd v Urochem Trading (Pty) Ltd (38287/2012) [2016] ZAGPJHC 40 (11 March 2016)
IN THE HIGH COURT OF SOUTH
AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
Case no. 38287/2012
DATE: 11 MARCH 2016
In the matter between
BASF Construction Chemicals South Africa (Pty)
Ltd
.........................................................
Applicant
And
CLF Concrete Laser Flooring (Pty)
Ltd
..............................................................................
Respondent
In re
BASF Construction Chemicals South Africa (Pty)
Ltd
............................................................
Plaintiff
And
CLF Concrete Laser Flooring (Pty)
Ltd
.................................................................................
Defendant
And
Urochem Trading (Pty)
Ltd
..................................................................................................
Third
Party
JUDGMENT
Van der Linde, J
[1]
The
applicant, called the plaintiff, applies for leave to serve a rule 13
notice on the proposed third party after the close of
pleadings
between it and the defendant. The defendant does not object but the
proposed third party does. So the plaintiff needs
the leave of the
court under rule 13(3)(b). The parties are agreed that the discretion
of the court is wide, meaning that it may
take into account a wide
range of factors in arriving at its decision, and that what the
plaintiff seeks is an indulgence. But
that is where the agreement
ends.
[2]
As
the submissions unfolded, five issues remain to be addressed. They
are standing, delay, prescription, commonality, and costs.
This
shorthand way of describing the issues will be expanded upon below,
and in this sequence. But first it is necessary to explain
what the
case is about.
[3]
The
plaintiff sues the defendant for R1130831.55 for goods sold and
delivered. The goods are a joint filler which the plaintiff
calls
Masterflex 310 which is used in flooring. The defendant counterclaims
that the product was defective; it was supposed to
be a semi-rigid
joint filler, but was too hard, causing cracking, spalling and
crazing in the cement slabs adjacent to the joints
filled with it.
That meant that the defendant had to repair joint fillers and floor
slabs at a total cost of R16705150.80, and
it was counterclaiming
against the plaintiff for this amount.
[4]
The
plaintiff’s intended cause of action against the proposed third
party is this. The plaintiff had bought the product from
the proposed
third party. If the plaintiff should be held liable to the defendant,
then it followed, according to the plaintiff,
that the proposed third
party should be liable to it, because in the sale between them, the
proposed third party agreed that the
Masterflex would have a certain
hardness, and warranted against latent defects.
[5]
The
first point taken by the plaintiff in the present application is that
the proposed third party has no right to be heard in opposition
to
the plaintiff’s application under rule 13(3)(b). The argument
was that that followed from the fact that the proposed third
party
was, in fact, not a party to the litigation. This was an issue,
according to the submission, only between the plaintiff
and the
defendant.
[6]
I
do not think that is right. To begin with, the fact that the proposed
third party is not a party to the litigation is of course
the very
issue, so that fact cannot serve of itself to exclude it from being
heard. Second, it is difficult to see why, if the
joinder of the
proposed third party should legitimately be the business of the
defendant, it should not also legitimately be the
business of the
proposed third party. After all, it is the same litigation to
which the proposed third is sought to be joined.
The court could do
with assistance from all the potential participants in deciding
whether the anticipated litigation was manageable.
[7]
But third, at the level of principle, our
law generally decrees that interested parties should be afforded an
opportunity to be
heard in matters in which they have a direct and
substantial interest.
[1]
By
this principle parties are joined for reasons of convenience, even
where their joinder is not essential, to avoid multiplicity
of
actions. And there is no doubt that in applications for their
joinder, the proposed parties are entitled to be heard.
[8]
The
argument against this is that the plaintiff is entitled, as of right,
to issue a third party notice before the close of pleadings,
and the
proposed third party cannot stop it. That is a valid proposition, but
only because the rule allows it. In any matter where
there is already
a pending suit, the joinder of another party to it, meaning a party
who was not joined from the outset, requires
service on the proposed
new party, and that party is entitled to be heard to resist its
joinder.
[9]
It
makes perfect sense why that should be so. The proposed new
party may want to explain to the court that there is good reason
why
it should not be joined to litigation between others; after all, it
was not joined from the outset, and there may have been
good reason
for it.
[10]So viewed, the entitlement to
serve a rule 13 notice before close of pleadings without first
affording the proposed third party
an opportunity of resisting
joinder, should be regarded as the exception, and not the rule. The
rule is rather that whenever an
outsider to pending litigation is
sought to be joined to it, that outsider has the right to be heard on
whether it is appropriate
that such a joinder should take place.
[11]The
plaintiff submitted that it was the practice in this division not to
permit the proposed third party any standing to oppose
its joinder.
But in Mercantile Bank Ltd v Carlisle and Another
[2]
this court laid it down as a rule that in applications under this
sub-rule, the proposed cause of action against the proposed third
party must be examined, and if the cause of action were excipiable,
the joinder should be refused. In that matter it was, like
here, the
proposed third party who resisted the joinder. The practice to
which the plaintiff refers was thus not followed.
[12]It follows that in my view
the proposed third party has standing to oppose the plaintiff’s
application.
[13]The
proposed third party argued that the delay in bringing the
application has not been satisfactorily explained. This has been
proposed as a requirement,
[3]
and the authors of Erasmus, Superior Court Practice,
[4]
have
not noted any dissent. The delay is from the beginning of March 2013
when the pleadings closed to July 2014 when the application
was
launched.
[14]This long. The explanation is
that throughout 2013 and during the early months of 2014, thus
covering the entire period of delay,
the plaintiff has been obtaining
advice in regard to its case. It consulted experts, and it has made
enquiries regarding other
floors laid by the defendant where failures
have occurred but Masterflex had not been used. In December 2013
counsel advised this
joinder, but this application was in the event
only brought mid-2014.
[15]The plaintiff argues that the
dots of events, connect the entire period of the delay. That is true,
but only because time moves
forward, and events occur in a forward
direction, not backwards. There is also much merit in the submission
by the proposed third
party that the explanation is lacking in
material detail. Where does it all go though?
[16]The proposed third party
cannot really contend for meaningful prejudice. There is the
prejudice of the passage of time, and
what does to witnesses, their
availability and their memories. But this is not real prejudice,
because the plaintiff is free with
impunity to issue summons afresh
against the proposed third party without the latter being able to
stop it.
[17]In my view the concern is
with the administration of justice, respect for the law, and the rule
of law, all very relevant in
a democratic state based on a
constitution, and where the law and its supremacy has become central
to our state order. If courts
are viewed as places that will permit
lax conduct and laissez-faire attitudes to rules, the fear of the
chilling effect on our
order is not fanciful.
[18]In the scheme of litigation
delays this one is however not criminally long. And the defendant
does not appear to have been overly
anxious to accelerate its pace.
The alternative, that of the plaintiff suing the proposed defendant
afresh, is worse. Also, the
delay has not been deliberate or male
fide.
[19]In these circumstances I
would excuse the delay, but its extent is relevant to the costs of
this application.
[20]
The
next point is prescription, the proposed third party contending that
the plaintiff’s proposed claim against it has long
prescribed.
This argument is founded on the May 2010 enquiries made by the
plaintiff of the batch number of the Masterflex supplied
by the
proposed third party to the plaintiff. At a meeting just after that,
the plaintiff told the proposed third party about the
defendant’s
intended action against the plaintiff for damages arising from a
complaint about the Masterflex.
[21]The plaintiff’s
response was that its cause of action was conditional upon the court
awarding damages against it in favour
of the defendant. Since that
has not occurred, prescription could not yet have begun to run.
[22]I am not persuaded that that
submission is correct. The liability of the defendant to the
plaintiff will arise from the breach
of contract between the
plaintiff and the defendant, and not the court order. The debt
is due when the
facta probanda
supporting that cause of action are known or could by the exercise of
reasonable care have become known. It may be that it is only
when the
court fixes the quantum by order that the precise extent of the
liability is known. But the court order is as little a
peg in the
cause of action of the plaintiff against the proposed third party as
it is a peg in the cause of action of the defendant
against the
plaintiff.
[23]Having said that, however, I
cannot on these relatively thin papers find that prescription has
been shown. The proposed
third party, who bears the onus, has
not determined a date when its debt to the plaintiff was due; to the
contrary, it has said
(my emphasis): “
The
plaintiff accordingly knew that if the defendant had a claim against
the plaintiff, the plaintiff had a claim against Urochem,
irrespective of the merits
of such claim.”
[24]The merits of the potential
claim against the proposed third party are, of course, what it is all
about. The plaintiff
must know the facts supporting its cause
of action, and these include the facts concerning the question
whether the Masterflex
was defective. That is an expert issue,
and I cannot say, nor does the proposed third party say, that the
plaintiff could
reasonably have obtained their views any earlier than
say March 2013.
[25]In my view prescription of
the proposed claim has not been established.
[26]Commonality is concerned with
rule 13(1)(b) and the requirement that “
any
question or issue in the action is substantially the same as a
question or issue which has arisen or will arise between such
party
and the third party, and should properly be determined not only as
between any parties to the action but also as between
such parties
and the third party.”
[27]It is in this area where to
my mind the proposed third party’s true objection to joinder
may potentially lie. Such a party
may be able to say, if the facts
bear it out, that it is being joined to an action in which its
interests are only marginal or
peripheral. If joined, it may thus be
forced to sit by and expend legal costs and management time in a
court which debates issues
that does not concern it. That would make
for disastrous judicial economy, so the argument may go.
[28]But there are answers to
this. The first is that the rule does not require that there be
a complete overlap. It requires
only an overlap of “
any
question or issue”
. That
was intended to leave it to the application court to assess whether
judicial economy will be flouted or enhanced. Some
crystal ball
gazing is necessary to be able to do that, which brings me to the
second answer.
[29]It seems to me, from my
present vantage point, that the three major issues in the two sets of
lites
will
be whether the Masterflex was defective, whether the defective (if
so) Masterflex caused the failure of which the defendant
complained
or whether it was the defendant’s own remissness, and the
computation of the defendant’s damages.
In all three of
these issues the proposed third party is centrally involved.
[30]Although it is impossible now
to make an accurate assessment of the time that will be taken up by
the issues that will arise,
because some of them may actually settle
along the way, as matters presently stand there appear to me to be
sufficient reason to
converge the two sets of disputes into a single
litigation process.
[31]That leaves costs. Plaintiff
seeks an indulgence and has additionally been culpably dilatory.
The proposed third party
has not been unreasonable in its opposition.
My concern about the extent of the delay is reflected in the costs
order against the
plaintiff.
[32]In the result I make the
following order:
(a)
Leave
is granted to the applicant to serve the third party notice attached
to the founding affidavit as annexure “A1”
on Urochem
(Pty) Ltd within (10) ten days of this order.
(b)
The
applicant is to pay the costs of the application, including any costs
associated with the previous appearance in the matter
in 2015 when it
was crowded out.
WHG van der
Linde
Judge, High
Court
Johannesburg
For the
applicant: Adv. IP Green, SC (0834622536)
Instructed
by Markram Inc
Upper Floor,
Brooklyn Design Square
Cnr Middel & Veale
Streets
Brooklyn Pretoria
0123461278
Ref: 26/BAS2/1
For the proposed third
party: Adv. N Segal (0823553181)
Instructed by Norman
Barling
44 Victoria Avenue
Sandringham
0114833844
Ref: U12
Date argued: 10 March
2016
Date judgement:
11 March 2016
[1]
Herbstein & Van Winsen, The Civil Practice of
the High Courts of South Africa, 5
th
ed, Cilliers, Loots & Nel, vol 1, p208.
[2]
2002(4)SA886(WLD)
[3]
Wapnick v Durban City Garage, 1984(2)SA414(D)
[4]
Second ed by DE van Loggerenberg, vol 2, pD1-147