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[2010] ZAGPJHC 16
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Guardforce International Transportation Limited v Khulani Fidelity Services Group (Pty) Limited (2006/21173) [2010] ZAGPJHC 16 (26 March 2010)
REPUBLIC OF SOUTH AFRICA
SOUTH GAUTENG HIGH COURT, JOHANNESBURG
CASE NO: 2006/21173
In the matter between:
GUARDFORCE
INTERNATIONAL
TRANSPORTATION
LIMITED
Appellant/Plaintiff
and
KHULANI
FIDELITY SERVICES GROUP
(PTY)
LIMITED
Respondent/Defendant
J
U D G M E N T
The Court
INTRODUCTION
[1] The
question to be decided on appeal by this Court is whether the court
a
quo
(Snyders J – as she then was) was correct in refusing the
appellant (referred to as the “
plaintiff
”)
leave to amend its particulars of claim (The respondent is referred
to as the “
defendant
”).
HISTORY OF THE MATTER
[2] On 25
March 2006 an armed robbery took place at O R Tambo International
Airport. At the time of the robbery guards deployed
by the plaintiff
were attending to certain security duties in relation to the transfer
of a container containing valuable cargo.
The robbers successfully
committed the robbery and escaped with a substantial amount of money.
One of the security personnel was
deployed in terms of the contract
between the plaintiff and the defendant. He was employed by the
defendant. His services were
at the disposal of the plaintiff.
[3] On 22
September 2006 the plaintiff instituted action against the defendant
arising out of the armed robbery. One of the claims
made in the
original Particulars of claim was that the court issue “
an
order declaring The defendant to be liable to indemnify The plaintiff
against any claim or claims brought against The plaintiff
by any
third party arising from the loss of the US$ 12,5 million stolen from
the Plaintiff at O R Tambo International Airport on
25 March 2006
”.
Exception was taken to that claim on the basis that it disclosed no
cause of action alternatively that it contained insufficient
factual
foundations to support a cause of action against the defendant.
[4] On 15 May
2007 the exception was argued and on 26 May 2008 the exception was
upheld by Foulkes-Jones, AJ.
[5] On 30
July 2008 the plaintiff
delivered a Notice of Amendment. The amendment was objected to by
the defendant. On 5 September 2008 the plaintiff launched an
application for leave to amend. The application was based on the
allegation that an entity known as G4S International UK Limited
(“
G4S
”)
sued the plaintiff for losses that it alleged it suffered arising
from the theft of the moneys during the robbery. The
plaintiff
referred in its proposed amendment to its Particulars of Claim to
allegations made by G4S in a summons issued by G4S
inter
alia
against it (and also against the defendant) under Case No. 07/12735
(“
the
G4S case
”).
The Summons was issued in May 2007.
[6] The
defendant opposed the plaintiff’s application for leave to
amend on
inter
alia
the following basis: both the plaintiff and the defendant had been
sued in the G4S matter by G4S arising out of the robbery; the
claim
instituted by G4S against the plaintiff in May 2007 cannot give the
plaintiff a cause of action against the defendant when
the plaintiff
issued summons against the defendant on 22 September 2006 in the
present action; the plaintiff should have followed
the provisions of
Rule 13 of the Rules of this Court and could have joined the
defendant as a third party to the G4S action in
terms of Rule
13(1)(a) and/or 13(1)(b).
PRESENT POSITION
[7] The
plaintiff claims that at the time of issuing the original Summons in
2006, it was faced with at least three exceptional
circumstances.
These included: it had every reason to expect to be sued by the
owners of the stolen money but did not and could
not know who would
sue it or on what cause of action it would be sued nor for how much;
there is a time bar clause in its contract
with the defendant which,
on the plaintiff’s interpretation meant that a summons had to
be served “
within
6 (six) months from the date of occurrence of the loss
”;
and at the time the 6 month period was about to lapse, the plaintiff
had not yet been sued by anyone for the loss and it
was accordingly,
unable to claim from the defendant.
[8] The
defendant disputed the fact that the 6 month time bar clause
constituted an exceptional circumstance. It further contended
that
the parties entered into a binding contractual Agreement containing a
time bar clause of 6 months. At the time of the entering
into the
contract it must have been within the contemplation of the parties
that either party might be in a position where a loss
occurs but it
is unable to identify the person who may claim against one or the
other.
[9] It is
clear that at
the time of the original summons, the plaintiff was faced with at
least three exceptional circumstances: Firstly: It had every
reason
to expect to be sued by the owners of the stolen money, but did not
and could not know who would sue it, on what cause of
action it would
be sued, nor for how much. Several causes of action might be
available to several interested parties, including
claims in
contract, claims in delict, and claims under the Warsaw Convention
relating to the loss of goods carried by air; Secondly:
There was a
time bar clause in its contract with the defendant which, on the
plaintiff’s interpretation of the clause, meant
that a summons
had to be served “
within
6 (six) months from the date of the occurrence of
”
the loss; Thirdly: At the time the six month period was about to
lapse, the plaintiff had not yet been sued by anyone for
the loss,
and it was accordingly unable to claim from the defendant.
[10
]
The plaintiff therefore followed the route of section 19(1) (i) (a)
(iii) of Act 59 of 1959 (“the Act”) by claiming,
in the
alternative, a declaratory order.
[11
]
The defendant directed two exceptions to the original claim. The
first was directed at the contractual claim and was dismissed.
The
second was directed at paragraphs 16 and 17 of the claim wherein a
declaratory order was sought. That exception was upheld.
The court
gave the plaintiff leave to amend the claim. The plaintiff filed
amended particulars of claim (the “
Amended
Claim
”).
[13
]
By this time, a second action had been instituted (by G4S) in which
the plaintiff and the defendant are both parties (defendants).
Each
has served third party notices on the other, relying on delict and
claiming contributions from each other.
[14
]
The Amended Claim took account of those events and sought to
withdraw the delictual claim and further sought to bring the claim
in
this matter in line with the subsequent events (the identity of the
claimant, as G4S as well as the nature and grounds for its
claims,
now being known).
[15
]
The defendant opposed the amendments and a formal application for
leave to amend had to be launched. The defendant’s opposition
was directed at three aspects of proposed amendments. The first two
objections were subsequently withdrawn. The defendant’s
remaining objection to the proposed amendment relates to the claim
for a declaratory order and is to the effect that, at the time
the
original summons was issued against the defendant; the cause of
action reflected in the proposed amendment did not exist (or
had not
been completed).
[16
]
The court
a
quo
ruled in the defendant’s favour on that point. The court
a
quo
did not consider or rule on the plaintiff’s argument that the
claim fell under the provisions of section 19(1)(a)(iii) of
Act 59 of
1959. The plaintiff’s main argument in this appeal is based on
that section and the court
a
quo’s
failure to consider and apply it.
THE PRINCIPLES RELATING TO AMENDMENTS
[19
]
The principles governing the granting or 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-76I. See also
Caxton
Ltd and Others v Reeva Forman (Pty) Ltd and Another
[1990] ZASCA 47
;
1990 (3) SA 547
(A) at 565G-566A;
Trans-Drakensberg
Bank Ltd v Combined Engineering
1967 (3) SA 632
(D) at 638A, 640A-G and 643A-C. 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
costs, 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:
Moolman
v Estate Moolman and Another
1927 CPD 27
at 29. The question in each case therefore, is what do
the interests of justice demand?
Affordable
Medicines Trust v Minister of Health
[2005] ZACC 3
;
2006 (3) SA 247
(CC).
SECTION 19(1)(a)(iii) OF ACT 59 OF 1959
[20
]
The learned judge in the court below did not deal with this section
in her judgment. We were informed by counsel that she was
addressed
on this point in great detail. We are not sure why she did not deal
with this legal point. In any event we are not
prohibited on appeal
to apply our minds afresh on this particular legal point.
[21
]
The section reads as follows:
“
A
provincial or local division shall
have jurisdiction over all persons residing or being and in relation
to all causes arising and all offences triable within its
area of
jurisdiction and all other matters of which it may according to law
take cognizance, and shall, subject to the provisions
of subsection
(2), in addition to any powers or jurisdiction which may be vested in
it by law,
have power
–
…
…
In its discretion, and at the instance of any
interested person, to enquire into and determine any existing,
future or contingent
right or obligation, notwithstanding that such
person cannot claim any relief consequential upon the determination
.
(our underlining)
[22
]
A proper reflection of the plaintiff’s claim indicates that
the amended claim falls squarely within the provisions of this
section and the principles set out in
Cordiant
Trading CC v Daimler Chrysler Financial Services
2005
(6) SA 205
(SCA). Jafta JA set out the following in the
Cordiant
matter:
“
[16]
Although the existence of a dispute between the parties is not a
prerequisite for the exercise of the power conferred upon
the High
Court by the subsection, at least there must be interested parties on
whom the declaratory order would be binding. The
applicant in a case
such as the present must satisfy the Court that he/she is a person
interested in an 'existing, future or contingent
right or obligation'
and nothing more is required (
Shoba
v Officer Commanding, Temporary Police Camp, Wagendrif Dam, and
Another; Maphanga v Officer Commanding, South African Police
Murder
and Robbery Unit, Pietermaritzburg, and Others
1995
(4) SA 1 (A)
at
14F). In
Durban
City Council v Association of Building Societies
1942
AD 27
Watermeyer JA, with reference to a section worded in identical
terms, said at 32:
'The
question whether or not an order should be made under this section
has to be examined in two stages. First the Court must be
satisfied
that the applicant is a person interested in an ''existing,
future
or contingent right or obligation'', and then, if satisfied on that
point, the Court must decide whether the case is a proper
one for the
exercise of the discretion conferred on it.'
[17] It seems to me that
once the applicant has satisfied the Court that he/she is interested
in an 'existing, future or contingent
right or obligation', the Court
is obliged by the subsection to exercise its discretion. This does
not, however, mean that the
Court is bound to grant a declarator, but
that it must consider and decide whether it should refuse or grant
the order, following
an examination of all relevant factors. In my
view, the statement in the above
dictum
,
to the effect that, once satisfied that the applicant is an
interested person, 'the Court must decide whether the
case is a
proper one for the exercise of the discretion' should be read in its
proper context. Watermeyer JA could not have meant
that in spite of
the applicant establishing, to the satisfaction of the Court, the
prerequisite factors for the exercise of the
discretion, the Court
could still be required to determine whether it was competent to
exercise it. What the learned Judge meant
is further clarified by the
opening words in the
dictum
which indicate
clearly that the enquiry was directed at determining whether to grant
a declaratory order or not, something which
would constitute the
exercise of a discretion as envisaged in the subsection (cf
Reinecke
v Incorporated General Insurances Ltd
1974
(2) SA 84
(A)
at
93A-E).
[18] Put differently, the
two-stage approach under the subsection consists of the following.
During the first leg of the enquiry
the Court must be satisfied that
the applicant has an interest in an 'existing, future or contingent
right or obligation'. At this
stage the focus is only upon
establishing that the necessary conditions precedent for the exercise
of the Court's discretion exist.
If the
Court is
satisfied that the existence of such conditions has been proved, it
has to exercise the discretion by deciding either to
refuse or grant
the order sought. The consideration of whether or not to grant the
order constitutes the second leg of the enquiry.
”
[23
]
In the present matter the plaintiff is clearly a person interested
in an existing, future as well as a contingent right. The
future
right or obligation concerned is the plaintiff’s right to
recover from the defendant such amount as the plaintiff
may be held
to have to pay to the parties suing the plaintiff for the loss of the
money taken during the robbery. Conversely,
the defendant’s
concomitant obligation falls within the terms of the section.
[24
]
The defendant’s contention that the plaintiff ought to have
waited to be sued by G4S first, before instituting an action
against
the defendant is defeated by the court’s reasoning in the
Cordiant
matter at paragraph [19] of that decision where the court said the
following:
“
However,
counsel argued that, instead of launching the present proceedings,
the appellant should have waited for its buyers to institute
proceedings against it. I do not agree. It is clear from what is said
above, including the concession by the respondent’s
counsel,
that the appellant had interest
(
sic
)
in the current proceedings. I can conceive of no basis on which such
interest could be suspended until the appellant’s buyers
institute proceedings against it. Section 19(11)(a)(iii) certainly
does not require that as a preliminary step
.”
[25
]
The section referred to read with the
Cordiant
matter,
is perhaps decisive and the court
a
quo
should have granted leave to amend on this point alone.
ALTERNATIVE ARGUMENT: NEW CAUSE OF ACTION
[26
]
The defendant argued that the amendment sought to introduce a new
cause of action which had not existed at the time the summons
was
issued or served, and that particulars of claim or a declaration
could not be amended to include “
new
causes of action
”.
[27
]
The plaintiff disputes the contention that the claim as proposed to
be amended amounts to a new claim or one which had not been
completed
at the time of the issue and service of the summons. The argument
that it is a new claim is based on a misunderstanding
of the effect
of section 19(1)(a)(iii) of Act 59 of 1959. But even if there were
substance in the “
new
claim
”
argument, the court has discretion to allow such an amendment unless
the plaintiff was guilty of an abuse of the process
of the court.
Bankorp
Ltd v Anderson-Morshead
[1996] 3 All SA 597
(W).
[28
]
It was further argued that the court
a
quo
should have applied the principles set out in
Bankorp
Ltd v Anderson-Morshead, supra
,
and allowed the amendment concerned even if the plaintiff’s
claim were to be regarded as one which did not exist at the
date of
summons.
[29
]
The authorities relied on by the defendant are distinguishable from
the present case. None of them dealt with the court’s
jurisdiction in terms of section 19(1)(i)(a)(iii) of Act 59 of 1959
to grant a declaratory order to determine any existing, future
or
contingent right or obligation in which the claimant had an interest.
[30
]
In any event, the authorities relied upon by the defendant make it
plain that the court has a discretion to grant an amendment
(where
the cause of action was incomplete or did not exist at the time of
summons) where there are special circumstances present.
[31
]
There are, in our view, special circumstances why the amendment
should be granted. It would further advance the interests of
justice
in allowing the amendment.
[32
]
The concept of cause of action must bear a wide and general meaning,
and not the technical meaning given to cause of action,
being the
phrase ordinarily used to describe the set of material facts relied
upon to establish the right of action. Here, the
cause of action
sought to be enforced in the summons subsequent to its amendment is
recognisable as the same or substantially the
same cause of action as
that disclosed in the original summons:
Sentrachem
Ltd v Prinsloo
1997 (2) SA 1
(A) at 15H-16B;
Churchill
v Standard General Insurance Co Ltd
1977
(1) SA 506
(A) at 517B-C;
Mntambo
v Road Accident Fund
[2007] ZAGPHC 151
;
2008 (1) SA 313
(W) at paras [14] and [15].
[33
]
In other words, the question to be asked and ultimately determined
in this matter is whether the cause of action relied upon
in the
particulars of claim as amended is recognisable as the same or
substantially the same as that relied upon in the particulars
of
claim in their original form. The answer to that is emphatic yes.
The single wrongful act (if this is proved ultimately) of
the
defendant vested in the plaintiff a single right to damages, to sue
for all loss or damage caused to the plaintiff by such
wrongful act,
whether such loss or damage resulted from its claim that related to
contractual or delictual damage. Here there
is simply no
justification for distinguishing between the right to recover for
damages in respect of the claims set out in the
initial summons, and
the claim as set out in the amended summons.
APPLICATION OF THE COURT’S DISCRETION
[34
]
In the
Bankorp
Ltd
matter above, Flemming DJP set out the following:
“
Our
practice has seen various instances of that which was thought to be
axiomatic, if not a rule of law, losing its absoluteness.
An observer
may view those instances as distinct exceptions or aberrations, or
when approved of, developments and refinements.
But when viewed
collectively an underlying explanation is exposed insofar as
pleadings are concerned: the increased realisation
that Court Rules,
procedural principles and pleadings are not there for their own sake
or for any other reason than to advance
the good order and the
administration of justice. Accordingly the stream has turned away
from regarding a document or procedural
step as a 'nullity' and has
come to manage that which previously was thought to be unworkable or
even unthinkable. I mention a
few examples. Many cases of a summons
being a 'nullity' have been discarded. Conditional claims and
conditional counterclaims are
managed. Conflicting alternative claims
are often tolerated. Arguments that amendments are to be refused only
because of delay
in seeking amendment repeatedly fail. The overall
pattern is ever firmer that, also in provisional sentence cases, an
amendment
is granted if a party deems it necessary to bring his real
case before the Court. The exceptions are really limited once the
party
is
bona fide
and is not
attempting to gain time. An amendment is refused when it is certain
that the new view is untenable and will not assist
the party or
because of prejudice to another party or to the administration of
justice which cannot be adequately averted by, for
example, standing
a case down, postponing it, reimbursing wasted costs.
It is necessary to
recognise that the trend which thus broke through a multiplicity of
trammellings to amendment has also surfaced
in regard to the
introduction of causes of action which arose after the issue of
summons.
”
[35
]
The learned judge went on to set out the following in the
Bankorp
matter at page 254H-J:
“
Refusal
of the amendment brings the parties no closer to the resolution of
their dispute. It can achieve nothing positive. It
will have
negative results in terms of loss of time for the plaintiff and
wasted costs. A rule which produces harm for the sake
of no
discernible advantage can hardly be supported. I need, however, not
consider the crucial question whether stare decisis
or the spirit
underlying it does force me into a corner. That crucial choice can
be avoided because another reason exists for
holding against the
defendant.
”
In having
determined that the plaintiff did not have a cause of action at the
time that summons was issued, the learned judge in
the court
a
quo
erred. In this regard, the learned judge in the court
a
quo
did not exercise her judicial discretion correctly. A combination of
the various factors referred to in the contemplated amendment
read
together with section 19(1)(a)(iii) of the Act leaves one in no doubt
that the plaintiff did establish a cause of action.
In any event it
is trite that in the attainment of justice between the parties courts
should not be obstructed by a very rigid
adherence to the pleadings:
Shill
v Milner
1937 AD 101
,
Trans-Drakensberg
Bank Ltd supra
at 637,
Robinson
v Randfontein Estates Goldmining Co Ltd
1925 AD 173
at 198 where Innes CJ set out the following:
“
The
object of pleading is to define the issues: the parties will be kept
strictly to their pleas where any departure would cause
prejudice or
would prevent full enquiry. But within those limits the court has a
wide discretion. For pleadings are made for the
court, not the court
for pleadings.
”
CONCLUSION
[36
]
Having regard to all of the above circumstances, we believe that it
would be in the interests of justice to allow the amendment
as set
out by the plaintiff.
ORDER
[37
]
37
.1
The appeal is allowed with costs, including the costs of two
counsel;
37
.2
The order of the court
a
quo
is set aside and substituted with the following order:
“
The
application for leave to amend is granted with costs, including the
costs of two counsel.
”
______________________________
M
JAJBHAY
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
I agree
______________________________
D
S S MOSHIDI
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
I agree
_____________________________
R
MATHOPO
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
DATE OF
HEARING 9
MARCH 2010
DATE OF
JUDGMENT 26 MARCH 2010
COUNSEL FOR APPELLANT ADV C G MARNEWICK SC
WITH ADV J WILSON
INSTRUCTED BY WOODHEAD BIGBY AND IRVING
COUNSEL FOR RESPONDENT ADV ODENDAAL SC
WITH ADV MOOIJ
INSTRUCTED BY BLAKE BESTER