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[2020] ZAGPJHC 211
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Bray v Boshoff NO and Others, In Re: Boshoff NO and Others v Bray (2017/1627) [2020] ZAGPJHC 211 (28 August 2020)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 2017/16274
In
the matter between:
MICHAEL GEOFFRY
BRAY
Applicant
And
CHRISTOFFEL
HENDRIK BOSHOFF N.O.
First
Respondent
MARIA
BOSHOFF N.O.
Second
Respondent
ISOBEL
MC ALEENAN N.O.
Third
Respondent
In
re:
CHRISTOFFEL
HENDRIK BOSHOFF N.O.
First
Plaintiff
MARIA
BOSHOFF N.O.
Second
Plaintiff
ISOBEL
MC ALEENAN N.O.
Third
Plaintiff
And
MICHAEL
GEOFFRY BRAY
Defendant
JUDGMENT
SIWENDU J
INTRODUCTION
[1]
The Applicant, Mr. Michael Geoffry Bray is the defendant in an action
instituted by the Trustees for the time being of the Mc
Bosh Family
Trust (Trust Number: IT 2929/99), a trust duly registered under
the Trust Property Control Act. For convenience,
I refer to the
plaintiffs/respondents as the Trustees and the Applicant/ Defendant,
Mr. Michael Geoffry Bray as the Applicant.
The Applicant seeks the
leave of the Court to amend his counterclaim in terms of the notice
of amendment dated 18 December 2019.
The Trustees object to
the amendment in terms of a notice delivered on 17 January 2020.
[2]
The
background to the action and application is that during or about
March 2013, at Edenvale, the Trust (duly represented and the
Applicant) entered into a written agreement in terms of which the
Applicant sold to the Trust immovable property described as Erf
416 &
417 Eden Glen (‘the property’).
[1]
The Trustees claim that the agreement lapsed on account of
non-fulfilment of suspensive conditions.
[3]
It is alleged that during the intervening period, between the date of
the agreement in March 2013 and the lapse, with the knowledge
and
agreement of the Applicant, the Trustees renovated and effected
certain necessary and useful improvements on the property.
As a
result, the value of the property appreciated by R1 200 000,
from R2 400 000 to R3 600 000.
[4]
The Trustees claim that on or about 13 March 2015, again,
at Edenvale, they entered into another written agreement
(‘the
second written agreement’) in terms of which the Applicant sold
the property to the Trust. The agreement was
subject to certain
suspensive conditions which, once again, were not fulfilled by the
agreed date. The second agreement lapsed
on account of
non-fulfilment.
[5]
The Trustees claim payment of R777 035.21 from the Applicant in
respect of the improvements to the property as Claim A.
As Claim B,
they claim the payment of the deposit of R400 000; and as Claim
C, they seek an order for an interdict preventing
their eviction on
account of the improvement lien they state they have over the
property.
[6]
The Applicant defended the action and filed a counterclaim. In the
counterclaim, he states that during the subsistence of the
first
agreement, he agreed to a reduction of the rental due from R20 000
to R10 000, to accommodate the costs of improvements
made.
Thereafter, and during the duration of the second agreement, the
occupational rental increased to R22 500.
[7]
The Applicant claims that as a result of the Trust’s failure to
vacate the property, he has suffered a loss in respect
of holding
over damages in the amount of R697 500. The amount is what the
Applicant would have received from a paying tenant,
calculated based
on the rental amount of R22 500 per month for June 2016 to
December 2018. He claims the amount is the equivalent
of a reasonable
and market-related rental for the occupation of the property.
[8]
Also, he claims that the Trustees failed and/or refused and/or
neglected to make payment of the municipal charges for the months
the
Trust remained in occupation of the property.
[9]
Despite due and proper demand, alternatively, demand in terms of the
summons, the Trust has failed and/or refused and/or neglected
to
vacate the property, and therefore the Applicant has suffered damages
in the amount of R744 280.40.
[10]
To this counterclaim, the Trustees alleged a material non-joinder and
also claim the Applicant lacks
locus standi
. They assert the
property in question is subject to a mortgage bond in favour of Absa
Bank Ltd (‘Absa’). The Applicant
ceded the right to claim
rental from the Trustees as well as the right to eject the Trustees
irrevocably to Absa. Accordingly,
he lacks
locus standi
to
proceed with the counterclaim. The application for amendment is in
response to this averment.
THE
AMENDMENT
[11]
It is a common cause that on 6 December 2019, Absa entered into a
Deed of Recession with the Applicant. The applicant now seeks
to
amend his counterclaim as follows:
[12]
By adding the following sentences to paragraph 4 of the counterclaim:
‘
On 6 December
2019, the Defendant obtained from ABSA Bank Limited a Notice of
Re-Cession in terms of which ABSA Bank re-ceded back
to the defendant
the right, title and interest in and to all rent and revenues which
may accrue from the mortgaged property and
all other rights referred
to in clause 7 of the standard mortgage conditions applicable to all
mortgage bonds registered in favour
of ABSA Bank Limited concluded
between the defendant and ABSA Bank Limited (“the standard
mortgage conditions”). A
copy or the deed of re-cession is
attached hereto marked “MB1A”. The defendant has complied
with all the terms and
conditions of the deed of re-cession. The
claim for damages arising from the holding over does not constitute
such rent or revenue
which may accrue from the mortgaged property as
referred to in clause 7 of the standard mortgage conditions and
therefore
such claim was never ceded by the defendant to ABSA Bank
Limited and the defendant always retained the right to institute a
claim
for holding over damages. Insofar as the claim for holding over
damages constitutes rent or revenue as referred to in clause 7 of
the
standard mortgage conditions, such has been re-ceded to the defendant
in terms of the deed of re-cession.’
[13]
By deleting the contents of paragraph 27 of the counterclaim in its
entirety and replacing such with the following:
‘
As a result of
the Plaintiff Trust failure to vacate the property the Defendant has
suffered damages as a result of the Plaintiff
Trust holding over in
the amount of R 967 500.00 (NINE HUNDRED AND SIXTY SEVEN
THOUSAND FIVE HUNDRED RAND) being the
amount the defendant would have
received from a paying tenant in the amount of R 22 500.00
(TWENTY-TWO THOUSAND FIVE
HUNDRED RAND) per month for the months of
June 2016 to December 2019, which amount is the equivalent of a
reasonable and market
related rental for the occupation of the
property.’
[14]
By deleting the contents of paragraph 30 of the counterclaim in its
entirety and replacing such with the following:
‘
Despite due and
proper demand, alternatively summons constitutes demand, the
Plaintiff Trust has failed and/or refused and/or neglected
to vacate
the property and therefore the Defendant has suffered damages in the
amount of R 1 014 280.40 (ONE MILLION
FOURTEEN
THOUSAND TWO HUNDRED AND EIGHTY RAND AND FORTY CENTS), which amount
is due, owing and payable to the Defendant.’
[15]
By deleting the contents of the prayer contained in of the
Counterclaim in its entirety and replacing such with the following:
‘
1. The
Plaintiff Trust be ordered to make payment to the Defendant of the
amount of R 1 014 280.40;
2. The Plaintiff Trust
be ordered to make payment of interest a tempore more on the
aforesaid at the rate prescribed rate of interest
of 10% per annum
calculated from 1 June 2016 to date of payment in full;
3. Costs of suit on a
scale as between attorney and client;
4. Such further and/or
alternative relief as the Honourable Court may deem fit.’
THE
OBJECTION
[16]
The objection to the amendment, which the Trustees contend is
interlinked and must be considered as one, is that:
16.1. Since the Applicant
had ceded his right, title, and interest in and to all ‘rents
and other revenues’ in
securitatem debiti
to Absa, he
did not have the right to institute the action for holding over
damages. The Applicant cannot rely on the Deed of Recession
executed
after
litis contestatio
to found a claim against the Trustees,
as it constitutes a new cause of action which did not exist at the
time the counterclaim
was instituted.
16.2. The amendment would
be retrospective in effect, and, would allow the Applicant to claim
amounts that would, but for the amendment,
have become prescribed.
Allowing the amendment would prevent the Trustees from raising the
defence of prescription.
[17]
It was a common cause on the papers that the Deed of Recession the
Applicant seeks to introduce by way of amendment was only
entered
into on 6 December 2019, after the special plea of a lack of
locus
standi
was raised by the Trustees. Mr. Campbell for the Trustees
argued that at
litis contestatio
the Applicant lacked
locus
standi
. The question that the Court needs to consider is whether
this can be cured
ex post facto
and allow the amendment.
LEGAL
PRINCIPLES
[18]
It is by now trite that the court is vested with wide discretion to
determine whether to grant or refuse an application for
leave to
amend. The nub of the issue, in this case, is whether it is
permissible for a court to grant the amendment, thereby
retrospectively
clothing the Applicant with a cause of action he did
not have at commencement of the action. Interlinked with this, is
whether
on the facts, the Trustees will be prejudiced by the
amendment.
[19]
Mr.
Campbell for the Trustees contended the Court must follow the
decision in
Philotex
(Pty) Ltd and Others v Snyman and Others.
[2]
The court in
Philotex
considered
the question of amendments that seek to cure a lack of
locus
standi
and/or cause of action, and found (after referencing substantial
precedent) that such amendments are permissible only in exceptional
or special circumstances. The court, after considering the approach
in
African
Diamond Exporters
[3]
and the case of
Simonsig
Landgoed and Coastal Wines (Edms) Bpk v Theron, Van der Poel, Brink,
Roos
,
[4]
noted as follows:
‘
On the other hand,
practical considerations have in the past dictated that causes of
action which arose after issue of summons be
joined to the existing
ones in the same action (see
OK Motors v Van Niekerk
(
supra
);
Pullen v Pullen
1928 WLD 133
;
Ritch v Bhyat
(supra at
592);
Van Deventer v Van Deventer and Another
1962 (3) SA 969
(N); and see also
Du Toit v Vermeulen
1972 (3) SA 848
(A) at
856G-857A).
This is not the
ex
post facto
introduction of a fresh cause of action to an action
between parties who are properly before Court, because there is no
objection
to the
locus standi
of some plaintiffs. The effect
of this amendment is that it seeks to introduce parties to an
existing action with causes of action
which arose after the issue of
summons.
Without expressing an
opinion on the correctness of the approach in the African
Diamond
Exporters and Simonsig Landgoed
cases, even on the basis of their reasoning, the plaintiffs fail.
Exceptional circumstances are required by these cases. These
are
absent in the present case. There is nothing exceptional in a
plaintiff who jumps onto the bandwagon without his trumpet, even
though it might be classified as rather unusual. There are no
compelling reasons of convenience for making him welcome in this
case. The indications are that the proceedings will be shortened by
the absence of these plaintiffs. The probabilities are that
once
liability or the absence thereof is established, the matters of these
particular plaintiffs will follow the overall result,
as the Credit
Guarantee Insurance Corporation of Africa Ltd by subrogation is in
fact the real plaintiff in the case of all plaintiffs.
There is no
compelling reason to deviate from the general rule that a cause of
action is required for institution of action.’
[5]
[20]
To this,
Mr. Kairinos, on the other hand, contended that the Court should
follow the decision in
Marigold
Ice Cream Co (Pty) Ltd v National Co-operative Dairies Ltd
,
[6]
where Wunsh J held that a plaintiff who has no
locus
standi
at the institution of an action can nevertheless obtain
locus
standi
by re-cession even after
litis
contestatio
.
[21]
The court in
Marigold
, citing various other decisions, went on
to hold that:
‘
The reference to
litis contestatio
is to fix not the time before which the
substitution of the correct plaintiff must be effected but the time
after which
res litigiosae
cannot be alienated without the
consent of the Court. Even after
litis contestatio
a cession
by the plaintiff would effectively transfer the right in question to
the cessionary if the Court allowed the cessionary
to be substituted
for the cedent as the plaintiff and thereby gave its seal of approval
to the transfer….
…
. There can be no
difference in principle where the plaintiff remains the same and the
cessionary of first instance, by revesting
the right of action in the
plaintiff, steps out of the picture.’
[7]
[22]
A similar
approach to
Marigold
was adopted by the court in
Luxavia
(Pty) Ltd v Gray Security Services (Pty) Ltd
,
[8]
a case involving a substitution of a plaintiff. Even though Mr
Campbell for the Trustees argues that
Marigold
is distinguishable from the current case because there had been no
objection to the amendment, he conceded the criticism levelled
at the
Philotex
case he
sought to persuade the Court to follow
.
[23]
In
Erasmus: Superior Court Practice
, the issue is approached
as follows:
‘
The vital
consideration is that an amendment will not be allowed in
circumstances which will cause the other party such prejudice
as
cannot be cured by an order for costs and, where appropriate, a
postponement. The following statement by Watermeyer J in
Moolman v
Estate Moolman
[1927 CPD 27
at 29] has frequently been relied
upon:
“
[T]he practical
rule adopted seems to be that amendments will always be allowed
unless the application to amend is mala fide or
unless such amendment
would cause an injustice to the other side which cannot be
compensated by costs, or in other words 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.”
The power of the court to
allow material amendments is, accordingly, limited only by
considerations of prejudice or injustice to
the opponent.’
[9]
[24]
I favour an approach that grants latitude towards an application for
an amendment, more so where there are triable issues between
the
parties. Further, I take account of the accessory nature of the
cession, including that it could be discharged at any time
when the
underlying obligation is extinguished. Practical and commercial
exigencies may favour this flexible approach, because
there may be a
lapse of time between the date of the extinction of the principal
debt (giving rise to a cession) and the execution
of a deed of
recession, unduly depriving a creditor of a right and cause of
action. Besides, on the facts of this case, the parties
remain the
same, and, the Trust would have raised the same defences regardless
of who between the Applicant and Absa exercised
the right of action.
The long-standing position that prejudice is the litmus test for the
latitude to allow an amendment must apply.
I align with the decision
in
Marigold
and find in favour of allowing the amendment
without the need to establish special circumstances.
[25]
That finding does not put the end to the matter. Mr Campbell pressed
further that even if the Court finds that the
Marigold
created
a new precedent and that special or exceptional circumstances are not
required, it is clear that the question of prejudice
must be
considered before such amendments should be allowed. It is argued
that a portion of the claim by the Applicant from October 2016
to 6 December 2016 has prescribed. On this score, he argued the
Trustees will be denied the right to raise the defence of
prescription to a portion of the claim since amendments act
retrospectively.
[26]
The
question of whether and which part of the right to enforce the claim
has been extinguished through a lapsed time is an important
consideration to determine the prejudice. The wording of the cession
refers to ‘rent or other revenues’. Mr Kairinos
argued
that the claim the Applicant seeks to introduce is in respect of
holding over damages and not ‘rent or other revenues’
derived from the property. Based on the decision in
Hyprop
Investments Ltd v NCS Carriers and Forwarding CC
,
holding over damages are not rent or revenue.
[10]
[27]
Harms’
Civil Procedure in the Superior Courts
describes
the approach toward amendments as follows:
‘
Applications for
amendments should not deteriorate into minitrials since amendment
proceedings are not intended or designed to determine
factual issues
such as whether the claim has become prescribed. Likewise, an
amendment to a plea will not be allowed if the particulars
of claim
do not disclose a cause of action; it would be an exercise in
futility.’
[11]
[28]
Even though Mr Kairinos contends there is no prejudice to the
Trustees because: (a) regardless of the identity of the creditor,
they face the same cause of action; and (b) the objection on account
of prescription could be raised in a special plea, since the
plaintiff may have a replication thereto, this question of
prescription and prejudice loomed large during the argument. The
argument
by Mr Kairinos misses the vital question of the
retrospective effect of the amendment.
[29]
Once more
the law is clear that ‘
An
amendment which introduces a new claim will not be allowed if it
would resuscitate a prescribed claim or defeat a statutory limitation
as to time.
’
[12]
However, the principle must surely apply in cases where a claim or
part thereof is ‘
known
to have prescribed
’
.
[30]
The majority of the
Applicant's claim is formulated thus:
‘
27. As a result of
the Plaintiff Trust failure to vacate the property the Defendant has
suffered damages as a result of the Plaintiff
Trust holding over in
the amount of R697 500.00 (SIX HUNDRED AND NINETY SEVEN THOUSAND
FIVE HUNDRED RAND) being the amount
the Defendant would have received
from a paying tenant in the amount of R22 500.00 (TWENTY-TWO
THOUSAND FIVE HUNDRED RAND)
per month for the months of June 2016 to
December 2018, which amount is the equivalent of a reasonable and
market related rental
for the occupation of the property.’
[31]
Even though the cession and re-cession are a common cause, the
dispute about whether the right to claim ‘rent and other
revenue’ includes the holding over damages claimed or vice
versa, and, what of these had been ceded to Absa and/or has
prescribed
remains. That, as well as in respect of which portion of
the claim is known to have prescribed, is a matter for the trial
court.
Regardless, the Court agrees with Mr Campbell about the
potential for prejudice if the Trustees are met with a claim that has
prescribed,
given the retrospective effect of the amendment. That
dispute is not one capable of resolution at this stage. Accordingly,
it befits
this Court to fashion an order that allows the amendment,
but equally limits the potential prejudice alleged.
[32]
In so far as the order for costs, I observe that the case raises a
genuine triable issue between the parties. The objection
is not one
made mala fide nor is it superfluous or opportunistic.
[33]
Both parties have successfully persuaded the Court, therefore, it is
appropriate that the costs of the application are costs
in the cause.
In
the result, I make the following order:
ORDER
1.
The applicant is granted leave to amend its
counterclaim in terms of the notice of amendment dated 18 December
2019 and is directed
to perfect its amendment within ten days of the
granting of this order.
2.
If the trial court finds that the damages
claim referred to in the counterclaim was the subject of the cession
to Absa Bank Limited
contained in clause 7 of the standard
mortgage conditions and re-cession from Absa Bank Limited dated
6 December 2019,
then any damages claim for the period
before the recession date up to the date when action proceedings were
instituted, shall have
prescribed.
3.
The cost of the application will be costs
in the cause.
_____________________________
T
SIWENDU
JUDGE
OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
This
judgment was handed down electronically by circulation to the
parties’ and/or parties’ representatives by email
and by
being uploaded to CaseLines. The date and time for hand-down is
deemed to be 10h00 on 28 August 2020.
Date
of hearing:
17 August 2020
Date
of judgment:
28 August 2020
Appearances:
Counsel
for the applicant:
Adv. G Kairinos SC
Attorney
for the applicant:
Jurgens Bekker Attorneys
Counsel
for the respondents:
Adv. A Campbell
Attorney
for the respondents:
Bennett McNaughton Attorneys
[1]
Although the Particulars of Claim refer to ‘Erf 216 & 217
Edenglen’, the Offer to Purchase describes the property
as
‘Erf 416 + 417 Eden Glen’.
[2]
Philotex
(Pty) Ltd and Others v Snyman and Others; Textilaties (Pty) Ltd and
Others v Snyman and Others
1994
(2) SA 710
(T).
[3]
Barclays
Bank International Ltd v African Diamond Exporters (Pty) Ltd
(1) 1976 (1) SA 93 (W).
[4]
Decided by Howie J on 26 August 1991 in the Cape Provincial
Division, Case No. 14131/89.
[5]
Philotex
(note
2 above) at 716F-717B.
[6]
Marigold
Ice Cream Co (Pty) Ltd v National Co-operative Dairies Ltd
1997 (2) SA 671 (W)
[7]
Ibid at 678E-F and 678I.
[8]
Luxavia
(Pty) Ltd v Gray Security Services (Pty) Ltd
2001
(4) SA 211 (W).
[9]
D E van Loggerenberg
Erasmus:
Superior Court Practice
2 ed (2015) Vol. 2 (RS 11, 2019, D1-332) (footnotes omitted).
[10]
Hyprop
Investments Ltd and Another v NCS Carriers and Forwarding CC and
Another
2013 (4) SA 607
(GSJ) para 42.
[11]
D Harms
Civil
Procedure in the Superior Courts
SI 67
at B28.18, citing De Klerk v Du Plessis
1995 (2) SA 40
(T);
Nxumalo
v First Link Insurance Brokers
(Pty) Ltd
2003 (2) SA 620
(T). Harms further cites
Cordier
v Cordier
1984 (4) SA 524
(C);
Stroud
v Steel Engineering Co Ltd
1996 (4) SA 1139
(W), stating that it may be otherwise if, for
example, the issue of prescription is conceded. According to Harms,
the issue to
be introduced must be a triable issue.
[12]
Erasmus (note 9 above) at D1-336, citing the following cases:
Trans-African
Insurance Co Ltd v Maluleka
1956
(2) SA 273
(A) at 279B;
Miller
v H L Shippel & Co (Pty) Ltd
1969 (3) SA 447
(T);
Dumasi
v Commissioner, Venda Police
1990 (1) SA 1068
(V) at 1071C–D;
Minister
of Safety and Security v Molutsi
1996
(4) SA 72
(A) at 84H–85C, 87C–D, 95C–D and 99D–E;
Sentrachem
Ltd v Prinsloo
1997 (2) SA 1
(A) at 15H–16C;
Associated
Paint & Chemical Industries (Pty) Ltd t/a Albestra Paint and
Lacquers v Smit
2000 (2) SA 789
(SCA) at 794C–G;
Embling
v Two Oceans Aquarium
CC
2000 (3) SA 691
(C) at 697J–698A;
Malinga
v Road Accident Fund
2012 (5) SA 120
(GNP) at 124C–G. See also
Blaauwberg
Meat Wholesalers CC v Anglo Dutch Meats (Exports) Ltd
[2004] 1 All SA 129
(SCA) at 133g–134h.