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[2013] ZASCA 86
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Arendsnes Sweefspoor CC v Botha (471/12) [2013] ZASCA 86; [2013] 3 All SA 605 (SCA); 2013 (5) SA 399 (SCA) (31 May 2013)
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THE SUPREME COURT OF
APPEAL OF SOUTH AFRICA
JUDGMENT
REPORTABLE
Case no: 471/12
In the matter between:
ARENDSNES SWEEFSPOOR
CC
..................................................................
Appellant
and
DALIA MARCELLE BOTHA
........................................................................
Respondent
Neutral citation:
Arendsnes Sweefspoor CC v Dalia Marcelle Botha
(471/12)
[2013] ZASCA 86
(31 May 2013)
Coram: MTHIYANE DP,
SHONGWE, LEACH, PILLAY and PETSE JJA
Heard: 10 May 2013
Delivered 31 May 2013
Summary: Civil
Procedure – service of summons – Rule 4 (1) (a) (v)
(Uniform Rules) – when sufficient to interrupt
prescription in
terms of section 15 (1) of the Prescription Act – service in
substantial compliance with the rule.
________________________________________________________________
ORDER
________________________________________________________________
On appeal from:
North
Gauteng High Court, Pretoria (Stockwell AJ sitting as court of first
instance):
In the result the appeal
is dismissed with costs.
________________________________________________________________
JUDGMENT
________________________________________________________________
SHONGWE JA (MTHIYANE
DP, LEACH, PILLAY and PETSE JJA concurring):
Introduction
[1] On 2 January 2004 the
respondent, (Dalia Marcelle Botha) (to whom I shall refer as the
plaintiff) sustained bodily injuries
while being transported in a
cable car system operated by the appellant, (Arendsnes Sweefspoor CC)
(to whom I shall refer as the
defendant). She allegedly fell from the
cable car when the clamps attaching the cable car to the cable became
undone resulting
in the cable car flipping over and the plaintiff
falling about 30 metres to the ground. The plaintiff instituted a
claim for damages
against the defendant. The defendant, inter alia,
raised a special plea to the effect that the plaintiff’s claim
has prescribed
in terms of the provisions of s 12 of the Prescription
Act 68 of 1969 (the Act). By agreement between the parties the
special plea
was dealt with by the court a quo as a separate issue in
terms of rule 33(4) of the Uniform Rules of Court. The question to be
decided by the court a quo was whether or not the plaintiff’s
claim against the defendant had prescribed in terms of the provisions
of s 12 of the Act. The defendant contended that the plaintiff’s
claim is based on an incident which occurred on 2 January
2004 and
that the plaintiff had to serve the summons by midnight on 1 January
2007. The defendant therefore contended that the
plaintiff’s
claim against it be dismissed with costs. The court a quo dismissed
the defendant’s special plea of prescription.
This appeal is
against that ruling with the leave of the court a quo.
[2]
The
question raised in this appeal is whether the service of the summons
on the defendant on 14 December 2006 was good and served
to interrupt
the running of prescription against the plaintiff.
[3] The facts are briefly
the following. During January 2004, the defendant, a close
corporation, operated the well-known Hartebeespoort
Cable car system
from which the plaintiff fell and injured herself, during one of the
transportation trips. The premises, which
was the registered office
of the defendant, comprised of one building housing a ticket office,
on the one wing, and a restaurant
on the other. The restaurant was
operated by someone else and not the defendant. The cable car
business was permanently closed
down by the Department of Labour, on
3 October 2005. Since that date the defendant ceased all its trading
activities and had no
presence there.
[4]
When
the sheriff attempted service on 12 December 2006, (first attempt) he
was told that the defendant had ceased trading on the
premises, only
the restaurant which was operated by a Mr Vermaak, the son in-law of
Mrs Moller, the sole member of the defendant,
remained. However, when
the defendant ceased trading, it never deregistered the corporation
and therefore its registered office
remained the premises as
described in the return of service. After being informed that the
cable way business had been closed the
sheriff consulted the
plaintiff’s attorneys telephonically, and was instructed to
serve the summons at the premises because
the property remained the
registered office of the defendant. Hence on14 December 2006 (second
attempt) the summons was served
on a Mr Pretorius, an employee of the
restaurant on the premises. It is common cause that Mr Pretorius
never handed the summons
over to the defendant and that he was not
employed by the defendant. The defendant contended that it never
received a copy of the
summons from the sheriff or Mr Pretorius and
therefore contested that the summons was properly served.
[5]
The plaintiff contended as follows. The summons was properly served
at the defendant’s registered office and registered
address.
The registered office and the registered address were those of the
defendant at all material times. The corporation (Moller
CC) which
owned the property and the restaurant business that was carried on
during December 2006 were essentially family businesses.
Although no
responsible employee of the defendant was present at the registered
address, the defendant
‘intentionally
rendered impossible’
the
strict compliance with Rule 4 by not changing its registered office
or address with the office of the Registrar of Companies.
The legal framework
[6] Service of processes
in the high court is regulated by Rule 4 of the Uniform Rules. The
relevant parts read as follows:
“
4 Service
(1)
(A)
Service of any process of the court directed to
the sheriff and subject to the provisions of paragraph
(a)
any document initiating application proceedings
shall be effected by the sheriff in one or other of the following
manners:
(I)…
(ii)…
(iii)…
(iv)…
(v) in the case of a corporation
or company, by delivering a copy to a responsible employee thereof at
its registered office
or its principal place of business within the
court's jurisdiction, or if there be no such employee willing to
accept service,
by affixing a copy to the main door of such office or
place of business, or in any manner provided by law.”
[7]
The
relevant subsection in this case is 4(1)
(a)(v)
which deals with service on a corporation. As
we know the defendant is a corporation which is obliged by
s 25
(1)
of the
Close Corporations Act 69 of 1984
to have a postal address and
an office to which all notices may be addressed.
Section 25(2)
reads:
‘
(a) any
notice , order, communication or other documents which in terms of
this Act required or permitted to be served upon any
corporation or
member thereof, shall be deemed to have been served if it has been
delivered at the registered office, or has been
send by registered
post to the registered office or postal address, of the corporation;
and
(b) process which is required to be
served upon any corporation or member thereof shall, subject to
applicable provisions in respect
of such service in any law, be
served by so delivering or sending it.’
[8]
Section
15
of the
Prescription Act 68 of 1969
is also relevant as it forms
the core of the defendant’s defence. It reads:
‘
(1) The
running of prescription shall, subject to the provisions of
subsection (2), be interrupted by the service on the debtor
of any
process whereby the creditor claims payment of the debt.
(2) Unless the debtor acknowledges
liability, the interruption of prescription in terms of subsection
(1) shall lapse, and the running
of prescription shall not be deemed
to have been interrupted, if the creditor does not successfully
prosecute his claim under the
process in question to final judgment
or if he does so prosecute his claim but abandons the judgment or the
judgment is set aside’.
[9]
The
picture of the legal framework is completed by reference to the
provisions of
s 170
(1)
(b)
of
the companies Act 61 of 1973 and s 23(3), read with
s 220
of the
Companies Act, 71 of 2008
. In terms thereof companies are obliged to
have a postal address and to have a registered office to which all
notices may be addressed
and at which all process may be served.
Discussion
[10] The service of a
summons commencing action serves to interrupt the running of
prescription. (see
AC Cilliers, C Loots
and
HC Nel
Herbstein
and
Van Winsen
The Civil Practice of the High
Court and The Supreme Court of Appeal of South Africa 50d (2009) at
354-355; also at 503 citing
Re Hartley
v
Umkanganyeki
(1889)10 NLR 49). For prescription to be interrupted three
requirements must be present;
(a) There must be a
process.
(b) The process must be
served on the debtor.
(c) By that process, the
creditor must claim payment of the debt. (See
J
Saner
Prescription in South African Law
(1996) at 3-112 (3). It is thus clear that the process must be served
on the debtor, which service
must necessarily be legally and properly
effected consistent with the Uniform Rules. It is the actual service
of the summons and
not merely the issuing thereof that serves to
interrupt the running of prescription.
[11] In the present case,
it is common cause that the deputy sheriff served the summons on 14
December 2006 at the registered office
on a Mr Pretorius, an employee
of the restaurant on the premises, a person not less than 16 years of
age, by exhibiting to him
the original and handing him a copy thereof
and by explaining the nature and exigency thereof. (In terms of s
36(2) of the Supreme
Court Act 59 of 1959 the return of service
presented by the deputy sheriff constitutes prima facie evidence of
the matters therein
stated).
[12] Counsel for the
defendant submitted that the service was not in terms of Rule 4
(1)
(a)(v)
because first Mr Pretorius was not an employee of
the defendant, second that in the absence of such employee a copy of
the summons
should have been affixed to the main door of the
registered office. He further contended that because these two
requirements were
absent, the service was not a good and legally
recognized one. And that the law must be consequent by declaring that
the running
of prescription could not have been interrupted. He
contended further that the defendant had closed down the business a
year before
and no longer had any presence on the premises
[13] Counsel for the
defendant urged this court not to create a precedent by placing form
above substance which might bring about
a differentiation between
cases dealing with default judgments and those dealing with
liquidation of companies or interruption
of prescription. I do not
agree. We were not referred to any authority, or practical example in
support of this proposition. Service
of a court process must
substantially comply with the relevant rules. In my view, it does not
matter whether one is dealing with
a default judgment, a liquidation
case or a case dealing with the interruption of prescription. It is
trite that each case must
be dealt with on its own particular facts
and merit. There is no differentiation or exception. The court, if
service is contested,
must determine whether service was good and
legally recognized or substantially compliant with the rules of
service. The cause
of action and the consequences resulting from the
process served are irrelevant to the question whether proper service
took place.
[14] In
Brangus
Ranching (Pty) Ltd v Plaaskem (Pty) Ltd
2011
(3) SA 477
at 481 (KZP) Van Zyl J, (writing for the full court) in
para [15] said:
‘
Service at
the registered office of a company, in the absence of a responsible
employee thereof, by delivery of the document to
be served to a
person at such address (not being an employee of the company) willing
to accept such service, has been recognised
as a good and proper
service which is preferable to merely attaching the process, for
instance, to the outer principal door of
the premises’,
Van
Zyl J also referred with approval to
Chris
Mulder Genote Ing v Louis Meintjies Konstruksie (Edms) Bpk
1988
(2) SA 433
(T).
Brangus
is
the most recent high court judgment which,
in
my view, is authority for the proposition that effectiveness of the
service of a court process or substantial compliance should
trump the
form. In other words by reason of the fact that a copy of the summons
was served at the registered office of the defendant
there had been
substantial compliance with the requirement of
Rule
4(1)
(a)(v).
Even
though the service did not strictly comply with the Rule. I was
unable to unearth any decision of this court dealing specifically
with Rule 4(1)
(a)(v).
[15] It would not be a
proper exercise of a court’s discretion to uphold the special
plea in circumstances where there was
substantial compliance with the
rules. In this case the defendant had not changed its registered
office with the Registrar of companies..
where else could the
plaintiff have served the summons? De Waal JP in
Geldenhuis
Deep Ltd v Superior Trading Co (Pty) Limited
1934
WLD 117
at 119 said:
‘
Until
notification of change of address is given to the Registrar of
companies, the office as originally registered remains the
registered
office of the company for practical purposes.’(see also
Hardroad
(Pty) Ltd
v
Oribi
Onctors (Pty) Ltd
1977 (2) SA 576
(W) at 578H-579G.
[16] In
Dawson
& Fraser v Havenga Construction
1993 (3)
SA 397
(BGD) at 401 B-C, Hendler J said:
‘
The failure
of Dawson & Fraser (Bophuthatswana) to change the address of the
registered office can in no way be a factor which
could be construed
prejudicial to it’.
I agree in this regard
with the reasoning of the court a quo where it reasoned that
corporations should not be permitted to register
an office address
where it has no purpose or business and by so doing, frustrate
services of summons and other court process upon
it.
[17]
Mr
Mullins, for the defendant, conceded that it was enough to serve, for
example, on a secretary employed by an auditor’s
firm, where
the corporation gave the auditors firm’s address as its
registered office, even though the secretary was not
employed by the
corporation. But he contended that in the present case the sheriff
should have affixed the summons on the main
door of the premises as
provided by Rule 4
(i)(a)(v).
Hartzenberg J in
Chris Mulder
(supra)
reasoned that it was preferable to
serve on a person who identifies himself or herself and accept
service rather than by merely
affixing the document to a door. And if
no ‘
one is prepared to accept service, in that case,
service
may
be effected by attaching it to a door as sub rule
(v) of Rule 4(i) (a)….allows the deputy- sheriff to do’
(my emphasis).
Hartzenberg J
does not suggest that service ‘must’ but said ‘may’
be effected.
[18] It is trite that the
rules exist for the courts, and not the courts for the rules (see
Republikeinse Publikasie (Edms) Beperk v Afrikaanse Pers
Publikasie (Edms) Bpk
1972 (1) SA 773
(A) 783 A-B;
Mynhardt v
Mynhardt
[1986] 3 All SA 197
; 1986 (1) 456 (T) also
Ncoweni v
Bezuidenhout,
1927 CPD 130)
, where it was pertinently observed
that:
‘
the rules of
procedure of this court are devised for the purpose of administering
justice and not of hampering it, and where the
Rules are deficient I
shall go as far as I can in granting orders which would help to
further the administration of justice. Of
course if one is absolutely
prohibited by the Rule one is bound to follow this Rule, but if there
is a construction which can assist
the administration of justice I
shall be disposed to adopt that construction.’
Courts should not be
bound inflexibly by rules of procedure unless the language clearly
necessitates this- see S
imons
v
Gibert Harner & Co Ltd
1963
(1) SA 897
(N) at 906. Courts have a discretion, which must be
exercised judicially on a consideration of the facts of each case, in
essence
it is a matter of fairness to both parties (see
Federated
Employers Fire & General Insurance Co Ltd
v
Mckenzie
[1969] 3 ALL
SA 424
;
1969 (3) SA 360
(A) at 363 G-H).
[19] With the advent of
the constitutional dispensation, it has become a constitutional
imperative to view the object of the rule
as ensuring a fair trial or
hearing. ‘
rules of court are delegated legislation,
having statutory force, and are binding on the court, subject to the
court’s power
to prevent abuse of its process.’
And
rules are provided to secure the inexpensive and expeditious
completion of litigation and are devised to further the
administration
of justice (see LAWSA, third Edition Volume 4 –
paragraph 8-10 page 10 et sec) (see also
Kgobane
& another v Minister of Justice & another
[1969]
3 ALL SA 379
or
1969 (3) SA 365
(A) at 369 F-H). Considerations of
justice and fairness are of prime importance in the interpretation of
procedural rules (see
Highfield Milling Co
(Pty) Ltd
v
A E
Wormald & Sons
[1966] 3 ALL SA 27
;
1966
(2) SA 463
(E) at 465 F-G).
Conclusion
[20] In the circumstances
I conclude that the approach adopted by the KwaZulu Natal High Court
in the
Brangus
case (s
upra
) is correct. I also consider
the service of the summons on the defendant on 14 December 2006 to be
good and served to interrupt
the running of prescription. The service
of the summons complied in substance with the provisions of Rule
4(1)
(a)(v).
In my view the plaintiff had by midnight on 1
January 2007 served the summons upon the defendant claiming payment
of the debt in
terms of s 15(1) read together with s 15
(b)
of
the Act. Therefore the plaintiff’s claim had not prescribed in
terms of section 12 of the Act. Accordingly the court a
quo correctly
dismissed the special plea with costs.
[21] In the result the
appeal is dismissed with costs.
________________________
J B Z SHONGWE
JUDGE OF APPEAL
LEACH JA:
[22] I have read the
judgment of my colleague Shongwe JA, but although I agree with his
final conclusion that the appeal should
be dismissed I have reached
that conclusion by a somewhat different and more direct route.
[23] It is common cause
that the summons was served on 14 December 2006 at Portion 64, plot
3, Melodie Farm, Hartebeespoort district.
This was the registered
address of the appellant, a close corporation. The sheriff recorded
in his return that he had served the
summons on ‘Mr Pretorius .
. . a person not less than sixteen years of age, by exhibiting to him
the original, by handing
him a copy thereof and by explaining to him
the nature and exigency thereof.’ The allegations set out in
the return were
not disputed and, as s 36(2) of the Supreme Court Act
59 of 1959 provides that a sheriff’s return ‘of what has
been
done upon any process of the court, shall be prima facie
evidence of the matters therein stated’, the return can be
accepted
as an accurate account of what occurred.
[24] This appeal turns
solely on whether service as reflected in the return is to be
construed as valid service upon the appellant.
If it is, the
appellant’s special plea of prescription is without merit and
was correctly dismissed by the court a quo. If
it was not, it did not
interrupt the running of prescription and the appeal must succeed. On
this the parties were
ad idem
.
[25] Uniform rule of
Court 4(1)(
a
)(v) provides that any service of process may be
effected on a corporation company ‘by delivering a copy to a
responsible
employee thereof at its registered office or its
principal place of business within the court’s jurisdiction, or
if there
be no such employee willing to accept service, by affixing a
copy to the main door of such office or place of business, or in any
manner provided by law’.
[26] Although the
appellant had earlier conducted business at its registered address,
by the time service took place it had long
since ceased all business
activities, was dormant and had no employees or representatives on
the premises. Mr Pretorius, upon whom
service was effected, was
employed not by the appellant but by a different enterprise. The
appellant therefore argued that as there
was no employee of the
appellant upon whom service could be effected at its registered
office, service on Mr Pretorius was ineffective
and the sheriff ought
to have affixed the summons to the main door – and, as it was
not so affixed, the service was invalid.
[27] In considering this
argument, it must be remembered that even where peremptory
formalities are prescribed by statute, not every
deviation from the
literal prescription results in nullity. The question always remains
whether, in spite of the defect, the object
of the statutory
provision has been achieved ─ see
Unlawful Occupiers, School
Site v City of Johannesburg
2005 (4) SA 199
(SCA) para 22. In
this regard, it is important to note that
s 25
of the
Close
Corporations Act 69 of 1984
obliges a close corporation to have a
reregistered address while
s 25(2)(
b)
provides that ‘subject
to applicable provisions in respect of such service in any law’,
process which is required to
be served upon a corporation may be
served by being delivered to the corporation’s registered
office or by being sent by
registered post to the registered office
or postal address of the corporation. The clear intention of the
legislature in providing
for this was to ensure that a close
corporation would have a known address at which process could be
served, inter alia, to ensure
that a third party who might wish to
sue it knows where to serve and does not have to end up chasing
ghosts in a situation such
as this where the corporation has become
dormant.
[28] Essentially service
at the registered address of a corporation is sufficient to amount to
service on the corporation. As was
correctly conceded by counsel for
the appellant, as a regular practice the courts accept as effective
the service of a summons
upon an employee of a firm of accountants or
auditors whose office is used as a corporation’s registered
address, but sought
to distinguish those cases from the present on
the basis of a link between the accountants or auditors and the
corporation which
is missing in the present case. In my view this
misses the point. The importance is the fact that service at the
registered address
of the corporation, even if not on one of its
employees, is regarded as substantial compliance with the rules.
[29] In the present case
the summons was delivered to a responsible person at the registered
address of the appellant. If no-one
had been present on the premises,
there would have been strict compliance with the rule had the summons
been affixed to the door.
In my view the action of handing it to a
responsible person at the premises, after explaining the exigencies
of the matter, amounted
to substantial compliance with the rule. It
resulted in the summons being delivered to the registered address of
the appellant,
that being the purpose not only of the rule which
authorises the fixing of a summons to the door of the premises, but
also of
s 25
of the
Close Corporations Act.
[30
] The court a quo
expressed the view, with which I agree, that a corporation ‘which
fails to ensure that there is a responsible
person present at the
premises appointed as its registered address, does so at its peril
and should not be allowed to bemoan its
lot should the process not
come to its attention’. Be that as it may, there was
substantial compliance with the rule relating
to service upon a
corporation, and the high court correctly dismissed the special plea.
[31] For these reasons I
agree the appeal should be dismissed with costs.
____________________
L E LEACH
JUDGE OF APPEAL
APPEARANCES
For Appellant: JF Mullins
SC
Instructed by:
Savage Jooste &
Adams, Pretoria;
Webbers, Bloemfontein
For Respondent: B Joseph
Instructed by:
Ronald Bobroff &
Partners Inc, Johannesburg;
Matsepe Inc, Bloemfontein