Tieties v ABSA Insurance Company (Pty) Ltd and Another (3343/04) [2009] ZAECPEHC 34 (21 July 2009)

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[2009] ZAECPEHC 34
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Tieties v ABSA Insurance Company (Pty) Ltd and Another (3343/04) [2009] ZAECPEHC 34 (21 July 2009)

FORM
A
FILING
SHEET FOR EASTERN CAPE HIGH COURT, POR ELIZABETH JUDGMENT
PARTIES
:
Registrar:
Magistrate:
High
Court:
EASTERN
CAPE HIGH COURT, PORT ELIZABTH
DATE
HEARD:
14
MAY 2009
DATE
DELIVERED:
21
JULY 2009
JUDGE(S):
DAMBUZA
J
LEGAL
REPRESENTATIVES –
Appearances:
for
the Plaintiff(s)/Applicant(s)/ Appellant(s):
Adv
J.D. Huisamen
for
the Defendant(s)/Respondent(s):
Adv
J. Nepgen (1
st
)
Adv
P.W.
A.
Scott (2
ND
)
Instructing
attorneys:
Plaintiff(s)/
Applicant(s)/
Appellant(s):
GP
VAN RHYN MINAAR & CO INC
C/o
UNGERER STRUWIG HATTINGH & PEO
Defendant(s)/Respondent(s):
1
st
Respondent 2
nd
Respondent
LINDSAY
KELLER & PARTNERS DE VILLIERS & PARTNERS
C/O
GOLDBERG & DE VILLIERS INC
CASE
INFORMATION -
Nature
of proceedings
:
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT ELIZABETH)
Case No.: 3343/04
Date
delivered:
21
July 2009
In the matter between:
JIMMY
CECIL TI
ETIES
Applicant
and
ABSA
INSURANCE COMPANY (PTY) LTD
First Respondent
(Defendant
in the main action)
ABSA
LIFE LTD
Second Respondent
JUDGMENT
ON APPLICATION TO AMMEND SUMMONS
DAMBUZA,
J
:
On 12 October 2004 the applicant
issued summons in this matter, citing the defendant is cited as:
“
ABSA
VERSEKERINGSMAATSKAPPY BPK
”.
The description of the defendant in
paragraph 2 of the particulars of claim appears as:
“
Die Verweerder is
ABSA
VERSEKERINGSMAATSKAPPY BEPERK,
‘n
maatskappy met beperkte aanspreeklikheid ingevolge die Wette van die
Republiek van Suid-Afrika met geregistreerde kantore te
2de
Verdieping Kruisstraat 21, Johannesburg en wie ook sake doen binne
die jurisdiksiegebied van bogemelde Agbare Hof te First
Bowring Huis,
Ringweg, Greenacres, Port Elizabeth”.
According to the return of service
the summons was served on Mrs B Plaatjies “
‘n
verantwoordelike werknemer ouer as 16 jaar
”
at First Bowring House, Ring Road, Greenacres, on 12 October 2004.
In the summons the applicant claims benefits which he alleges
are
due to him in terms of an insurance cover taken by the applicant
with the “defendant”. The written agreement is attached
to the
summons together with a letter dated 19 October 2001 in which his
claim to the benefits was repudiated by the second respondent.
The applicant now seeks to amend the
citation of the defendant to:
“
ABSA LIFE LIMITED”
and its description in the particulars
of claim to:
“
Die Verweerder is ABSA
LEWENS Beperk (Reg. Nr 92/01738/06), ’n maatskappy met beperkte
aanspreeklikheid ingevolge die wette van
die Republiek van
Suid-Afrika met geregistreerde kantore te 3de Vloer, ABSA Towers
(East), Mainstraat 170, Johannesburg, en wie
ook sake doen binne die
jurisdikse gebied van bovermelde Agbare Hof te First Bowring Huis,
Ringweg, Greenacres, Port Elizabeth.”
It is common cause that ABSA
INSURANCE COMPANY (PTY) LTD and ABSA LIFE LIMITED are separate legal
entities, both being registered
companies and both being wholly
subsidiaries of ABSA FINACIAL SERVICES LIMITED which is, in turn, a
wholly owned subsidiary of
ABSA GROUP LIMITED.
The application is opposed by ABSA
INSURANCE COMPANY (PTY) LTD (the defendant/first respondent) and
ABSA LIFE LIMITED (the second
respondent). The basis for the
objection to the proposed amendment is, in the main, that, in
reality what the applicant seeks
is substitution of the second
respondent in the place of the first respondent rather than a mere
correction of a misnomer. The
respondents argue that the proposed
amendment is a device by the applicant to circumvent the issue of
his claim against the second
respondent having prescribed. They also
contend that the delay in bringing the application is an indication
of the applicant’s
bad faith. It appears that the applicant was
first alerted to the fact that he has sued the wrong defendant by
the first respondent’s
attorneys in a letter dated 26 October
2004. The applicant’s notice of intention to amend is dated 4 May
2006. It is common
cause that the applicant’s claim against the
second respondent prescribed in October 2004.
In its plea filed on 6 December 2004,
the first respondent denies liability for the applicant’s claim;
it pleads that the correct
defendant is in fact ABSA LIFE LIMITED
and that it (the defendant/first respondent) never concluded an
agreement with the plaintiff.
It is trite law that a court hearing
an application for an amendment has a wide discretion whether or not
to grant the application;
such discretion must be exercised
judicially.
1
The
primary object of allowing amendments is to obtain proper
determination and ventilation of the real issues between the
parties.
Considerations applicable in applications for amendments
have been stated numerous cases. An amendment will not be allowed in
circumstances where it will cause the other party such prejudice as
cannot be cured by an order of costs and where appropriate,
a
postponement.
2
Formal amendments are generally allowed unless precluded by some
rule of court. It is in this context that amendments have
been
allowed to rectify misdescriptions of parties.
3
The courts have, by way of amendments under Rule 28(4) of the
Rules of this Court, allowed the substitution of one entity as

plaintiff by another entity in order to ensure that the true
plaintiff is before the court.
4
The test to be applied in such cases is whether the applicant is
bona fide
and whether any prejudice may be occasioned to the defendant as a
result of the amendment.
5
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.
6
Mr Scott
who appeared on behalf of the first respondent submitted that
although the citation of the first respondent was an error as
contended by the applicant, it did not result in a misdescription or
a misnomer of the defendant as the applicant made it out
to be; it
resulted in the wrong (existing) defendant being cited. That, so it
was submitted, can only be properly cured by substitution
of the
wrong defendant by the correct one rather than by an amendment of
the summons.
Mr Nepgen
submitted, on behalf of the second respondent that the
distinguishing factor between this and cases in which an amendment
was
allowed to substitute a party, is that in this case the
applicant cited an existing party whereas in the comparative cases,
the
wrong party was non existent.
7
Further, so the argument on behalf of the second respondent went,
in the comparative cases, the summons was served on the correct

defendant who responded to the summons; in this case the correct
defendant never responded to the summons.
I do not agree that the factual
differences referred by the respondents justify a refusal of the
amendment sought. In the
Embling
case
(supra)
the plaintiffs had
described the defendant as “
Two
Oceans Aquarium, a close corporation…..having its place of
business at Dock Road, Waterfront, Cape Town”.
The
return of service pointed out that the defendant business was not
trading as a close corporation
.
A Notice of Intention
to Defend was filed by the “
Two
Oceans Aquarium Trust”.
In
its plea the defendant denied that it was the Two Oceans Aquarium CC
and pleaded that it was the Two Oceans Aquarium Trust
and that any
claim the applicants might have had against the trust had
prescribed. The applicants then sought to amend their
summons and
particulars of claim by substituting the Two Oceans Aquarium Trust
in the place of the original defendant.
The court held that the
correct inquiry is whether the plaintiff’s case against the
defendant has in fact prescribed or whether
the running of
prescription has been interrupted in terms of section 15 (1) of the
Prescription Act
8
;
that in considering whether the relevant provisions of the
Prescription Act have been complied with, it is the substance rather

than merely the form of a process which has to be examined and that
if the defendant described in the amended summons was clearly

recognizable from the original summons, the amendment sought by the
applicant was only a “
clarification
of a defective pleading
”.
Van Heerden J, as she then was, found in
Embling’s
case that the entity
sought to be held liable was the legal entity owning or controlling
or administering the Two Oceans Aquarium
at Dock Road, Waterfront,
Cape Town. The Learned Judge held further that as the trust or its
representatives had known from
the time of service that the summons
had been intended for it and that it was the true defendant, the
argument founded on prescription
could not succeed.
In
Associated
Paint and Chemical Industries (Pty) Ltd t/a Albestra Paint and
Lacquers v Smit
9
an amendment was refused
where it was sought to substitute the name of the correct company
for an existing (but wrong) plaintiff
company and the claim had
become prescribed. The court held that the service of summons on the
defendant had not interrupted
prescription as there had never been a
debtor-creditor relationship between the original plaintiff and the
defendant as required
by the prescription act.
In this case it is not in dispute
that the summons was served at the address occupied by the second
respondent. The first respondent
did not conduct business at this
address at the time. It is also not in dispute that both respondents
share the same legal department;
the record reveals that the
standing instruction to any branch of any ABSA entity, is that when
a summons is served on it, the
summons is to be relayed to the ABSA
Group Legal Department in Johannesburg who will then ensure that the
summons is forwarded
to the company sued in the summons. It is not
in dispute that the same procedure must have been followed in this
case. It seems
to me that on receipt of summons the personnel in the
respondents’ (or ABSA GROUP) legal department must have realized
that
the second respondent was the intended defendant. The following
appears in the particulars of claim:
“
Gedurende Augustus
1998 en te Uitenhage binne die jurisdiksiegebied van die bogemelde
Agbare Hof het die Eiser persoonlik en die
Verweerder verteenwoording
deur behoorlik gevolmagtige persone ‘n oorenkoms van versekering
gesluit (hierna die polis genoem)
in terme waarvan die Verweerder
onderneem het om die Eiser te verseker teen onder andere die volgende
gebeure….”.
As I have stated the insurance
agreement and the letter of repudiation form part of the summons.
It is clear from the annexures
to the summons that the agreement was
concluded with the second respondent. Contrary to the submission on
behalf of the respondents,
whoever dealt with the summons at the
respondents’ legal department must have perused the summons in its
entirety, including
the annexures thereto, in order to properly
consider what the appropriate response would be. In the
circumstances I can only
conclude that, as
Mr
Huisamen
submitted on
behalf of the applicant, the second respondent chose to exploit the
situation caused by the incorrect citation by
ignoring the summons
by refraining from defending the matter, although it was aware that
it was the intended defendant.
This matter is, in my view
distinguishable from the
Associated
Paint
case in that in this
case when the summons was served a creditor – debtor relationship
existed between the applicant and the
second respondent. The
summons in this case was issued by the “creditor” as required by
section 15(1) of the Prescription
Act. Consequently the running of
prescription was, in my view, interrupted.
My view is that it would be unfair,
unjust and contrary to the Constitution of South Africa Act (Act 106
of 1996)
10
(the Constitution) to unsuit the applicant simply because the second
respondent, despite having received the summons, and having
realized
that it is the intended defendant, chose not to
“come
to the party
”.
11
The fact that the wrong defendant happens to be an existing party
is in my view irrelevant. It may even be coincidental that
the
wrong party sued happens to be an existing party. Where the
factors set out in
Embling
and other cases
12
have been established, i.e the
bona
fides
of the applicant,
prescription having been interrupted by service of the summons on
the debtor, the intended defendant being determinable
from the
original summons (including the creditor – debtor relationship
between the correct parties having been in existence
when the
summons was served) I find no reason why the amendment should not be
allowed; even where the correct defendant, has,
such as in this
case, chosen not to respond to the summons.
Van Heerden J, at 702 C-G, of her
judgement in the
Embling
case
,
refers to the following
dictum of Marais J in
Du
Toit v Highway Carriers and Another
1999
(4) SA 564
(W) at 569J-570D:
“
The point that a wrong
defendant has been cited not infrequently rears its head when the
defendant pleads, often after prescription
has run. It is often the
case that the intention of the plaintiff
is to
cite an entity conducting a specific business at a
specific address
and the defendant served with the summons is in no doubt that it is
indeed the intended defendant. In such cases
courts should lean
towards allowing amendments which would correct inadvertent incorrect
descriptions and should not be astute
to refuse such amendments
involving the description of the defendant on pure semantic and
legalistic grounds which ignore the realities
of the situation as
perceived by the parties themselves to an exercise in formalism, the
object of which is to enable a defendant
to escape a summons which it
knows is directed to it, and often to wholly defeat a claim which has
by then prescribed.
Courts
should not formalistically ignore the fact, if such it be, that the
party now sought to accurately described was the party
whom the
plaintiff intended to sue, even thought the defendant had only a
vague or fuzzy idea of the correct description of the
defendant, and
the defendant itself knew very well that the summons was directed to
it when it was served
.”
These remarks are particularly
relevant in the present case.
Much was made in the papers, the
Heads of Argument and during argument, of the fact that the
applicant does not explain how the
error occurred. In all fairness
it is the responsibility of the applicant who seeks indulgence to
explain to the court how the
error occurred and to explain the cause
for the delay in bringing the application. But in this case I am
satisfied from the papers
that that a
bona
fide
mistake occurred due
to carelessness on the part of the applicant or his attorneys. It is
common cause that the respondents both
conduct business as insurers;
the first respondent in short term insurance and the second
respondent in long term insurance.
I have already explained the
further relationship between them. Nowhere in the citation and
description of the defendant is
the registration number of the first
respondent quoted. If careful consideration had been given to the
citation of the defendant
a registration number, being part of the
description of both respondents, would also form part of the
description of the defendant.
The registration number of the second
respondent, clearly appears on the first page of the agreement
attached to the summons.
But in the end I am persuaded that
the application must succeed.
On the question of costs I can find
no justification for the opposition mounted by the first respondent.
It stands to suffer no
prejudice as a result of the amendment. The
applicant has however, tendered the costs incurred by the first
respondent in the
action and in opposing the application up to 17
May 2006 when the applicant filed its notice of intention to amend
the summons.
Regarding the second respondent, I cannot find that its
opposition to the application was unjustified. The issues are not
simple
and I can only assume that the matter is of significant
importance to it insofar as its consideration of similar matters in
the
future. And as I have stated, the error which necessitated the
amendment can only be explained as carelessness on the part of
the
applicant.
I accordingly make the following
order:
Leave is granted to the applicant to
amend the citation of the defendant in its summons and particulars
of claim in accordance
with its notice dated 4 May 2006;
The applicant is to pay the second
respondent’s costs of this application;
The applicant is ordered to pay the
first respondent’s wasted costs incurred in the action, as well as
in opposing the application
to amend up to 17 May 2006;
The first respondent is ordered to
pay the applicant’s costs incurred after 17 May 2006.
_________________________
N
DAMBUZA
JUDGE
OF THE HIGH COURT
1
Embling
and Another v Two Oceans Aquarium CC
2000 (3) SA 691
(C) at 694 H and the authorities quoted therein.
2
Trans-Drakensberg
Bank Ltd v Combined Engineering (Pty) Ltd
1967 (3) SA 632
(D) at 638H – 639C.
3
Samente
v Minister of Police
1978 (4) SA 632
(E);
Golden
Harvest (Pty) Ltd v Zen- Don CC
2002 (2) SA 653
(O);
Yukwam
v President Insurance Company Limited
1963 (1) SA 66
(T).
4
Luxavia
(Pty) Ltd v Gray Security Services (Pty) Ltd
2001 (4) SA 211
(W);
Golden
Harvest (Pty) Ltd v Zen-Don CC
2002
(2) SA 653
(O)
5
Air-Conditioning
& Design & Development (Pty) Ltd v Minister of Public
Works
,
Gauteng
2005 (4) SA 740
(C ) at 744 I-J, 745H-I
6
Sentrachem
Ltd v Prinsloo
1997 (2) SA 1
(A) at 15B – 16C.
7
See for
example the
Embling
and
Air-Conditioning Design
cases (
supra)
8
Act 69 of
1969.
9
2000 (2) SA 789
(SCA)
10
Ss 34 and
39
11
O’
Sullivan v Heads Model Agency CC
1995 (4) SA 253
(W).
12
For example
Associated
Paint
and
Chemical
Industries
(supra)