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2023
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[2023] ZAFSHC 335
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Knipe v Cooper N.O and Another (2673/2022) [2023] ZAFSHC 335 (22 August 2023)
IN THE HIGH COURT
OF SOUTH AFRICA
FREE STATE
DIVISION, BLOEMFONTEIN
Case
no: 2673/2022
REPORTABLE: NO
OF
INTEREST TO OTHER JUDGES: NO
CIRCULATE TO MAGISTRATES:
NO
In
the matter between:
JOHN
DOUGLAS JANSEN KNIPE
Applicant
and
CHAVONNNES
BADENHORST ST CLAIRE COOPER N.O.
1
st
Respondent
SIMON
MALEBO RAMPORORO N.O.
2
nd
Respondent
In
re:
JOHN
DOUGLAS JANSEN KNIPE
Plaintiff
and
CHAVONNNES
BADENHORST ST CLAIRE COOPER N.O.
1
st
Defendant
SIMON
MALEBO RAMPORORO N.O.
2
nd
Defendant
FREDERICK
JACOBUS SENEKAL
3
rd
Defendant
TMS
AUCTIONEERS
4
th
Defendant
CAROL
JESSIE KATHLEEN LOTS N.O.
5
th
Defendant
ROBERT
PETRUS JANSEN KNIPE
6
th
Defendant
ANDRE
BAZZET JANSEN KNIPE
7
th
Defendant
JAQUELINE
MOIRA DEBORA VIGNE
8
th
Defendant
THE
MASTER OF THE HIGH COURT, BLOEMFONTEIN
9
th
Defendant
STANDARD
BANK OF SOUTH AFRICA LTD
10
th
Defendant
KRAMER
WEIHMANN INC
11
th
Defendant
HEARD
ON:
27 July 2023
REASONS
BY:
MTHIMUNYE,
AJ
DELIVERED
ON
:
Delivered
by email to the parties’ legal representatives and by release
on SAFLII. The reasons shall be deemed to have been
handed down at
11:00 on 22 August 2023
[1]
The applicant, John Knipe, is the plaintiff
in the main action which he instituted against the eleven defendants
listed above on
09 June 2022 seeking a number of orders. The first
and second respondents (‘the respondents”) are first and
second
defendants in the main action and joint liquidators of
Kameelhoek (Pty) Ltd (in liquidation), Master Reference Number
B111/2012(“Kameelhoek”)
and Schaapplaats 978 (Pty) Ltd
(in liquidation) Master Reference Number B110/2012 (“Schaapplaats”).
On 10 August 2022,
the first and second defendants filed an exception
on the basis that the plaintiff’s particulars of claim did not
disclose
any cause of action. On 23 September 2022, the applicant
filed a notice of intention to amend his particulars of claim to
which
the respondents objected. It is that objection that prompted
this application for leave to amend particulars of claim. The other
9
defendants are not part of this application and will be referred to,
if need be, as the defendants in the chronology in which
they are
cited in the main action.
[2]
The Applicant and the 5
th
to 8
th
Defendants are each 20% shareholders of Kameelhoek and Schaapplaats,
the two companies in liquidation for which the first and second
defendants are joint liquidators. The dispute between the Plaintiff
and the eleven Defendants arises mainly out of an alleged fraudulent
appointment of the First Defendant as a final liquidator of the above
companies. The setting aside of this appointment is one of
the orders
the Plaintiff seeks in the main action, which setting aside will then
have a spiralling effect as articulated in the
subsequent prayers,
one of which will be the nullification of the arbitration agreement
between the Plaintiff and the Defendants,
which agreement came as a
result of the said alleged fraudulent appointment of the First
Respondent. This court is however
not called upon to determine
that dispute and for that reason, I will not go into further details
thereon.
[3]
What is before this court to determine is
whether the Plaintiff has made out a case to be granted leave to
amend its particulars.
The core of the Respondents’ objection
is that the Applicant’s proposed amendment does not cure the
exception, does
not disclose any cause of action and does not raise
any triable issues and as such remains excipiable. The Plaintiff
avers that
the amendment was not done on the basis of the exception
having any merit but only to amplify the particulars of claim in
certain
respects even though, if granted, it will render the
exception moot. The exception was, on 4
th
November 2022, removed from the roll by agreement between the
parties.
[4]
The paragraphs in the particulars of claim
that the plaintiff seeks to amend read as follows:
“
CLAIM
1
13.
…
14.
The Plaintiff and the
5
th
to 8
th
Defendants are each 20% shareholders
of Kameelhoek and Schaapplaats.
15.
Due to various
litigious matters between the Shareholders of Kameelhoek and
Schaapplaats, and the First and Second Defendants, the
first meeting
of the creditors was only convened for 26 July 2017”
16.
Ms Lotz, as an alleged
creditor of Kameelhoek and Schaapplaats, both in her personal
capacity and in her capacity as the duly appointed
executrix of the
estate of the Late HBLJ Knipe, Masters reference 1728/2007, and of
the late Moira Elizabeth Knipe, Master’s
reference 6165/2015,
instructed Mr Senekal to prepare claims on her behalf and on behalf
of the two deceased estates, to be proven
at the first meeting of
creditors against the estates of Kameelhoek and Schaapplaats.
17.
Mr Senekal advised Ms
Lotz to provide a power of attorney to one Chris Edeling, to prove
her claims at the first meeting of creditors
of Kameelhoek and
Schaapplaats.
18.
In Appointing Mr Chris
Edeling as her agent to attend the first meeting of creditors and to
prove her claims, Ms Lotz was unaware
that the proven claims will be
utilised to nominate or requisite the First Defendant as a final
liquidator of Kameelhoek and Schaapplaats.
19.
Mr Senekal Instructed
Mr Edeling, to nominate or requisite the First Defendant as final
liquidator with the power of attorney provided
by Ms Lotz.
20.
The said instruction
and actions of Mr Senekal was fraudulent in sofar as it was made
without the knowledge and consent and/or authority
of Ms Lotz to
nominate or requisite the First Defendant as final liquidator of
Kameelhoek and Schaapplaats.
21.
The said fraudulent
conduct of Mr Senekal in collaboration with the First and Second
Defendants only came to knowledge of the Plaintiff
or about 13 July
2020 when the said Ms Lotz testified during the arbitration
proceedings between the Plaintiff and Defendants.
22.
The said fraudulent
conduct of Mr Senekal and the liquidators was to the detriment of the
Plaintiff, in that the Plaintiff was induced
to believe that the
nomination and appointment of the First Defendant was valid.
23.
At the time when Mr
Senekal prepared the claims on behalf of Ms Lotz and on behalf of the
two deceased estate supra, Mr Senekal
was aware that the claims were
false in that any such claims that may have existed, have already
become prescribed in terms of
section 11(d) of the Prescription Act,
Act 68 of 1969, and that the said claims will be expunged in terms of
section 45 of the
Insolvency Act, Act 24 of 1936.
24.
Mr Senekal instructed
Mr Edeling to prove the false claims of Ms Lotz and the estate of the
late HBLJ Knipe at the First Meeting
of creditors of Kameelhoek and
Schaapplaats on 26 July 2017 and to utilise the false claims to
nominate the First and Second Defendants
as final liquidators of
Kameelhoek and Schaapplaats, and they were appointed as final
liquidators of Kameelhoek and Schaapplaats
on 28 August 2017.
25.
The Second Defendant
did not participate actively in the administration of the estate of
Kameelhoek and Schaapplaats, but delegated
all his powers as
provisional liquidator to Mr Luke Bernard Saffy, of Honey Inc.,
Bloemfontein, on 6 September 2012, and as final
liquidator, from 28
August 2017, who made all decisions and took all steps in the
administration of the estates, in the collaboration
with First
Defendant.
26.
The First Defendant,
instructed Mr Chris Edeling to investigate the false claims of Ms
Lotz, which were proven at the first meeting
of creditors, and Mr
Edeling’s expungement report dated 24 May 2018 and 8 August
2018 were submitted to the Master by the
First Defendant on 29 August
2018.
27.
As a result of the
reports of Mr Edeling, as submitted to the Master, the Master
expunged the false claims of Ms Lotz and the estates
of the late HBLJ
Knipe and the Late ME Knipe on 29 August 2019.
28.
As a result of the
fraudulent nomination and appointment of the First Defendant the
Plaintiff is entitled to an order declaring
the nomination and
appointment of the First Defendant as final Liquidator of Kameelhoek
and Schaapplaats null and void ab initio
and an order that the First
Defendant’s nomination and appointment to be set aside.
29.
WHEREFORE the
plaintiff prays for the following order:
29.1
That the nomination and appointment of the First
Defendant as final
liquidator of Kameelhoek be declared null and void ab initio and be
set aside;
29.2
That the nomination and appointment of the First Defendant
as final
liquidator of Schaapplaats be declared null and void ab initio and be
set aside;
29.3
That the costs of the action be paid by the First and
Third
Defendants, jointly and severally, the one paying the other to be
absolved;
29.4
Further and/or
alternative relief.
CLAIM 2:
30.
As a result of the
fraudulent nomination and appointment of the First Defendant,
Plaintiff and the 5th to 8th Defendant were induced
by the First and
Second Defendants to enter into an arbitration agreement on or about
19 September 2019, which is annexed hereto
as Annexure “JDJ1”.
31.
If the Plaintiff was
aware of the fraudulent appointment of the First Defendant, the
Plaintiff and the 5th to 8th Defendants would
not have entered into
the arbitration agreement with the First and Second Defendants and is
therefore entitled to an order declaring
that the arbitration
agreement is null and void ab initio and an order setting aside the
arbitration agreement.
32.
WHEREFORE the
Plaintiff prays for the following order:
32.1
That the
Arbitration agreement annexed as annexure “JDJ1”
entered into between the Plaintiff and the Defendants be
declared null and void ab initio be set aside;
32.2
That the costs of the action be paid by the First
and Third
Defendants, jointly and severally, the one paying the other to be
absolved;
32.3
Further and/or alternative relief.
CLAIM 3:
33.
The Second Defendant,
as co-liquidator with First Defendant, was aware, alternatively
should have been aware, that the First Defendant’s
nomination
was a result of the fraudulent misrepresentation by the First and
Third Defendants, and that the arbitration proceedings
that was
conducted in terms of the arbitration agreement and the awards made
in terms thereof stands to be declared null and void
and be set
aside.
34.
WHEREFORE the
Plaintiff prays for the following order:
34.1
That the Arbitration agreement between the parties be declared null
and void and be set aside;
34.2
That the arbitration proceedings and all awards made by the presiding
officer be declared null and void and
be set aside;
34.3 That
the costs of the action be paid by the First and Third Defendants,
jointly and severally, the one paying
the other to be absolved;
34.4
Further and/or alternative relief.”
[5]
The proposed amendments in terms of the
notice of intention to amend reads as follows:
14.
The plaintiff and the
Fifth to Eighth Defendants are each 20% shareholders of Kameelhoek
and Schaapplaats ans as such have a real
and substantial interest in
the liquidation proceedings of Kameelhoek and Schaapplaats, in so far
as they have a residual interest
in the free residue of the estates.
15.
At all material times
the Third Defendant acted as attorney of record on behalf of the
First and Second Defendants, in their official
capacities as
liquidators of Kameelhoek and Schaapplaats.
16.
At all material times
the Third Defendant also acted as attorney of record on behalf of the
Fifth Defendant, in her personal capacity
as shareholder of
Kameelhoek and Schaapplaats, as well as in her official capacity as
executrix of the Estates of the late ME Knipe
and HBLJ Knipe.
17.
During August 2017 the
Fifth Defendant instructed the Third Defendant, on advice from her
counsel, Adv Leon Halgryn SC, to take
the necessary steps to remove
the First Defendant, Second Defendant and Mr Noordman as Provisional
Liquidators of Kameelhoek and
Schaapplaats.
18.
The Third Defendant at
all material times was aware that the Fifth Defendant did not support
the First and Second Defendants as
liquidators and would not exercise
any right vesting in her as a creditor to nominate them for
appointment as liquidators, or vote
for their appointment as final
liquidators at a Meeting of Creditors of Kameelhoek and Schaapplaats.
CLAIM 1:
19.
Due to various
litigious matters between the Shareholders of Kameelhoek and
Schaapplaats, and the First and Second Defendants, the
first meeting
of creditors was only convened for
26 July 2017.
20.
Fifth Defendant was
advised by Third Defendant that Fifth Defendant, as an alleged
creditor of Kameelhoek and Schaapplaats, both
in her personal
capacity and in her capacity as the duly appointed executrix of the
estate of the Late HBLJ Knipe, Master’s
reference 1728/2007,
and the estate of the Late Moira Elizabeth Knipe, Master’s
reference 6165/2015, must submit claims as
a creditor in the
liquidation process of Kameelhoek and Schaapplaats, and Fifth
Defendant instructed the Third Defendant to prepare
claims on her
behalf and on behalf of the two deceased estates, to be proven at the
first meeting of creditors in the liquidation
process of Kameelhoek
and Schaapplaats.
21.
When Fifth Defendant
instructed the Third Defendant to prepare the claims against
Kameelhoek and Schaapplaats, both the Third Defendant
and the Fifth
Defendant knew that the claims were unsustainable, due to the fact
that the alleged claims had become prescribed
before the date of
liquidation of Kameelhoek and Schaapplaats, in terms of section 11(d)
of the Prescription Act, Act 68 of 1969,
and that the said claims
will be expunged in terms of section 45 of the Insolvency Act, Act 24
of 1936.
22.
Fifth Defendant
instructed Third Defendant to drat the Powers of Attorney, and Third
Defendant advised Fifth Defendant to sign the
Powers of Attorney, in
terms whereof Chris Edeling would be authorized to prove her
Purported claims at the first meeting of creditors
of Kameelhoek and
Schaapplaats.
23.
Third Defendant knew
when he prepared the Powers of Attorney that the Fifth Defendant was
opposed to the appointment of the First
Defendant as final liquidator
and that she did not intend to authorize anyone to exercise such vote
as she might purportedly have
as a creditor, in favour of his
appointment. The Third Defendant was accordingly aware that
such Powers of Attorney would
not entitle him to instruct Chris
Edeling, and could not be relied upon to nominate and vote for the
appointment of First Defendant
as a final Liquidator at the First
Meeting of Creditors, or at any subsequent Meeting of Creditors.
24.
Third Defendant
Proceeded to instruct Chris Edeling to prove the said claims, and to
nominate and vote for the appointment of the
First Defendant as final
liquidator, despite the fact that he knew that Fifth Defendant did
not intend to authorize anyone to vote
in favour of the First
Defendant’s appointment as final liquidator, and would never
have signed the Powers of Attorney had
she known that Chris Edeling
would use them to vote on her behalf as purported creditor, to
nominate and appoint the First Defendant
as final liquidator.
25.
The Fifth Defendant
was induced to sign the said Powers of Attorney by the fraudulent
misrepresentation by the Third Defendant that
the purpose for which
the Powers of Attorney were required was only for the proof of her
purported claims as a creditor, and the
fraudulent non-disclosure
that the Powers of Attorney would be used by Chris Edeling to
exercise her vote as proven creditor to
appoint the First Defendant
as final Liquidator of both Kameelhoek and Schaapplaats.
26.
The said instruction
and actions of Third Defendant were fraudulent in sofar as they were
given and made without the knowledge and
consent and/or authority of
Fifth Defendant to nominate or requisition the First Defendant as
final liquidator of Kameelhoek and
Schaapplaats.
27.
The First Defendant at
all material times was aware that the Fifth Defendant on advice from
Adv Halgryn, had instructed the Third
Defendant to initiate a process
of removing the provisional liquidators, and First Defendant knew
that the Fifth Defendant would
not exercise a vote as a creditor in
favour of their appointment as final liquidators at the Meeting of
Creditors.
28.
In accepting the
appointment as final liquidator of the two companies, the First
Defendant knew, or ought to have known, that the
Powers of Attorney
signed by the Fifth Defendant, and which were relied upon to nominate
and vote for the First Defendant as final
liquidator, could not
properly and validly be relied upon by Chris Edeling to vote in
favour of then appointment of the First Defendant
as final liquidator
of the two companies, and that the purported exercise of the First
Defendant’s vote as creditor was invalid,
and the First
Defendant should accordingly have declined the appointment.
29.
The said fraudulent
conduct of Third Defendant in collaboration with the First Defendant
in causing the First Defendant to be appointed
as final liquidator on
the purported proof and exercise of a vote on the Fifth Defendant’s
proven claims only came to the
knowledge of the Plaintiff during or
about
13 July 2020
when the Fifth Defendant testified during
the arbitration proceedings between the Plaintiff and Defendants.
30.
The said fraudulent
conduct of Fifth Defendant and the First Defendant was to the
detriment of the Plaintiff, in that the Plaintiff
was induced to
believe that the nomination and appointment of the First Defendant
was valid.
31.
Third Defendant
instructed Chris Edeling to prove the claims of Ms Lotz and the
estate of the Late HBLJ Knipe at the First Meeting
of creditors of
Kameelhoek and Schaapplaats on
26 July 2017
and to utilise the
unsustainable claims to nominate the First Defendant as final
liquidator of Kameelhoek and Schaapplaats, and
First Defendant was
appointed with Second Defendant as final liquidators of Kameelhoek
and Schaapplaats on
28 August 2017.
32.
The Second defendant
was appointed by the Master, but did not participate actively in the
administration of the estates of Kameelhoek
and Schaapplaats, but
delegated all his powers as provisional liquidator to Mr Luke Bernard
Saffy, of Honey Inc., Bloemfontein,
on
06 September 2012,
and
as final liquidator, from
28 August 2017,
who made all
decisions and took all steps in the administration of the estates, in
collaboration with First Defendant.
33.
The First and Second
Defendant instructed Chris Edeling to investigate the claims of Fifth
Defendant, which were proven at the first
meeting of creditors, and
Chris Edeling’s expungement reports dated
24 May 2018
and
8 August 2018
were submitted to the Master by the First
Defendant on
29 August 2018.
34.
As a result of the
reports of Chris Edeling, as submitted to the Master, the Master
expunged the unsustainable claims of Fifth Defendant
and the estates
of the Late HBLJ Knipe and the Late ME Knipe on
29 August 2019.
35.
At the time of his
nomination and appointment as final liquidators of Kameelhoek and
Schaaplaats the First Defendant knew that the
claims of Fifth
Defendant and the estates of HBLJ Knipe and the Late ME Knipe were
unsustainable, and will be utilised to nominate
and appoint him as
final liquidator of the said estates, but that the said claims will
be expunged, in terms of section 45 of the
Insolvency Act, Act 24 of
1936.
36.
Under circumstances
where the First Defendant knew that his appointment was done on the
unsustainable claims of Fifth Defendant,
in her personal as well as
her official capacities, and that the said claims will be expunged,
the First Defendant should not have
accepted the appointment as final
liquidator of Kameelhoek and Schaapplaats.
37.
As a result of the
aforesaid conduct of Fifth Defendant, First Defendant, Third
Defendant and Edeling, the Plaintiff is entitled
to an order
declaring the nomination and appointment of the First Defendant as
final liquidator of Kameelhoek and Schaapplaats
null and void ab
initio, alternatively an order that First Defendant’s
appointment to be set aside.
38.
WHEREFORE
the Plaintiff prays for the following order:
38.1
That the nomination and appointment of the First Defendant as final
liquidator
of Kameelhoek be declared null and void ab initio and be
set aside;
38.2
That the nomination and appointment of the First Defendant as final
liquidator
of Schaapplaats be declared null and void ab initio and be
set aside;
38.3
That the costs of the action be paid by the First and Third
Defendants,
and Fifth Defendants, jointly and severally, the one
paying the other to be absolved;
38.4
Further and/or alternative relief.
CLAIM 2:
39.
The Plaintiff,
believing that the final liquidators had been properly nominated and
voted for at a meeting of creditors and were
validly and properly
appointed, entered into an arbitration agreement on or about
19
September 2019,
which is annexed hereto as Annexure “
JDJ1”.
40.
The First Defendant
and Third Defendant were under a legal duty to have disclosed to the
Plaintiff the aforesaid irregularities
in the voting for and
appointment of the First Defendant as final liquidator before the
arbitration agreement was entered into,
but wrongfully and
intentionally alternatively negligently, failed to do so.
41.
Had the Plaintiff been
aware of the true facts and the aforesaid irregularities in the
voting in favour of the appointment of the
First Defendant, and in
his appointment as final liquidator, the Plaintiff would not have
entered into the arbitration agreement.
42.
The Plaintiff is
therefore entitled to repudiate the Arbitration Agreement, which he
hereby does, alternatively Plaintiff is entitled
to an order
declaring the arbitration agreement to be null and void ab initio,
and is entitled to an order setting aside the Arbitration
agreement.
43.
WHEREFORE
the Plaintiff prays for the
following order:
43.1
That the Arbitration agreement annexed as annexure “
JDJ1”
entered I into between the Plaintiff and the
Defendants is unenforceable, alternatively be declared null and void
ab
initio, and be set aside;
43.2
That the costs of the action be paid by the First and Third
Defendants,
jointly and severally, the one paying the other to be
absolved;
43.3
Further and/or alternative relief.
CLAIM 3:
44.
Having regard to what
is set out under claim 2 supra, and if the Arbitration agreement is
set aside, the appointment of the First
Defendant and Second
Defendant emanated from a vote by Edeling, on claims of Fifth
Defendant which were not valid.
45.
The First Defendant
and Second Defendants, as co-liquidators of Kameelhoek and
Schaapplaats, were aware, alternatively should have
been aware, that
the First Defendant nomination was a result of the fraudulent
misrepresentation by the Third and Fifth Defendants,
and that the
arbitration agreement and the awards made in terms thereof stand to
be declared null and void and be set aside.
46.
As a result of the
irregular appointment of First Defendant and the Second Defendant
could not act alone as liquidator of Kameelhoek
and Schaapplaats in
contravention of section 382 of the Companies Act, Act 61 of 1973,
and rely on the Arbitration Agreement or
the awards made pursuant
thereto.
47.
WHEREFORE
the Plaintiff prays for the
following order:
47.1
That the arbitration proceedings and all awards made
by the presiding
officer be declared and void and be set aside;
47.2
That the costs of the action be paid by the First and Third
Defendants and Fifth Defendants, jointly and severally, the one
paying the other to be absolved;
47.3
Further and/or
alternative relief.
CLAIM 4:
48.
The First Defendant
and Second Defendants made the Arbitration Award and Settlement an
order of the Free State High Court under
Case number 3933/2021;
49.
The order of Court was
made iustus error, and pursuant to what is stated supra, and in the
event that the Court grants the relief
sought in Claim 1 to claim 3
supra, the Plaintiff is entitled to an order setting aside the Court
order dated 24 June 2021.
50.
WHEREFORE
the Plaintiff prays for the
following order:
50.1
That the arbitration proceedings and all awards made
by the
presiding officer be declared and void and be set aside;
50.2
That the costs of the action be paid by the First and
Third
Defendants and Fifth Defendants, jointly and severally, the one
paying the other to be absolved;
50.3
Further and/or
alternative relief.
By replacing Annexure
“
JDJ1”
with the document marked “
JDJ1”
attached hereto.”
[6]
The First and Second Defendants objects to
the amendments on the following basis:
(a)
That, in respect of all the 3 claims from
the particulars of the claim sought to be amended, the conduct that
is the basis of the
Plaintiff’s claims, is fraudulent only
towards the fifth defendant and not the Plaintiff and the respondents
have raised
this in an exception raised against the Plaintiff’s
particulars of claim. Further, that the fifth defendant elected not
to
act on the alleged fraudulent conduct.
(b)
That the sought amendment does not remove
the cause of complaint as set out in the exception.
(c)
The entire basis of the amendment is still
rooted in a misrepresentation i.e. the breach of mandate made by the
third defendant
to the fifth defendant, and not to the plaintiff.
(d)
That the plaintiff has pleaded no facts in
respect of claim 4 in the intended amendments.
[7]
The Applicant has first raised a point
in
limine
to the respondents’
Answering affidavit that there was no confirmatory affidavit from the
second respondent as a joint liquidator
and this is in violation of
section 382 of the Companies Act 61 of 1973 which stipulates that
liquidators must act and take decisions
jointly. For this reason, the
applicants submit that the Answering affidavit is not properly before
court and must be disallowed.
The Respondents argue firstly that
section 382 only requires joint action in respect of liquidation
matters whereas in litigation
and does not require one or others to
depose to confirmatory affidavits in legal proceedings. Secondly, the
Respondents argued,
that this is an issue of the Power of Attorney
validly appointed the first respondent to act herein. Secondly that
administrative
actions are valid until set aside by an order of
court. I am inclined in this respect, to agree with the Respondents
in this regard
and the contention by the Applicant stands to be
rejected.
[8]
The amendment of pleadings is governed by
Rule 28 of the Uniform Rules of Court
which reads:
“
28
Amendment of Pleadings and Documents
(1)
Any party desiring to amend a pleading or
document other than a sworn statement, filed in connection with any
proceedings, shall
notify all other parties of his intention to
amend and shall furnish particulars of the amendment.
(2) The
notice referred to in subrule (1) shall state that unless written
objection to the proposed amendment
is delivered within 10 days of
delivery of the notice, the amendment will be effected.
(3) An
objection to a proposed amendment shall clearly and concisely state
the grounds upon which the objection
is founded.
(4) If an
objection which complies with subrule (3) is delivered within the
period referred to in subrule (2), the
party wishing to amend may,
within 10 days, lodge an application for leave to amend.
[9]
It
is trite that a party may seek to amend its pleadings any time before
judgement is granted. It is also trite that a court hearing
an
application for an amendment has a wide discretion, which discretion
should be exercised judicially
(Embling
v Two Oceans Aquarium CC
[1]
).
In exercising this discretion, the court should lean in favour of
granting an amendment to ensure that justice is done
between the
parties by deciding the real issue between them
(Commercial
Union Assurance v Waymark
[2]
).
Although Rule 28 does not stipulate the circumstance under which an
amendment should be allowed, the approach was laid down in
the
locus
classicus
of
Moolman
v Estate Moolman
[3]
as follows:
“
The
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 purpose of justice in the same position as they were
when the pleading which it is sought to amend was
filed”
[10]
It follows therefore that the test for whether or not leave to amend
should be granted is consideration of
mala fide on the part of the
applicant or consequential prejudice or injustice to the respondent,
which injustice cannot be remedied
by a cost order. The onus lies on
the party seeking the amendment. The Respondents have, for the most
part in their papers gone
to town to address the merits of the main
dispute which in my view, are not relevant for purposes of this
application. They have
also argued that the sought amendment raises
no triable issue. The Applicant argued, correctly so, that the
requirement of a triable
issue only applies to a party who seek
amendments at a late stage of the proceeding, and not at the onset
when no one has pleaded
as is the case with the Applicant. See
Caxton
Ltd and Others v Reeva Forman (Pty) Ltd an Another
[4]
.
It follows then that what is to be determined herein is whether there
is any
mala
fides
on the part of the applicant and whether the granting of this
application will result in any prejudice against the respondents,
which prejudice cannot be remedied by an appropriate cost order.
[11]
Other than arguing the merits of the main action between the parties,
the Respondents raised no prejudice
that it stands to suffer in the
application is granted. In the main, the Respondents’
opposition to this application is that
the applicant’s claim is
still based on the alleged fraudulent conduct of the third defendant
and misrepresentation to the
fifth defendant and that the sought
amendments do not address the exception. In my view, the issue of the
alleged fraudulent conduct
of the third defendant is exactly a matter
to be ventilated on trial and not in these proceedings. The exception
was removed from
the roll and is not before this court to determine.
[12]
In my view, this application has been brought early enough in the
proceedings to cause any kind of prejudice
that cannot be remedied by
a cost order – see the
Caxton
case as cited above. As stated above, a party can at any stage before
judgement is granted seek leave to amend its pleadings and,
to ensure
proper ventilation of issues, courts should lean in favour of
granting the amendment. Guided by the principles laid out
above, I
find no mala fides on the part of the Applicant neither there is in
my view, any prejudice to be suffered by the Respondents
in this
applicant being granted. Instead, I hold the view that granting this
application will ensure a proper ventilation of the
real issues
between the parties. That is the primary object of amendments as
articulated in
Cross
v Ferreira
[5]
.
Consequently, I make the following Order:
Order
1.
The Applicant is granted leave to amend its
particulars of claim in accordance with its notice of intention to
amend dated 23 September
2022.
2.
The Applicant is directed to file the
amended particulars of claim within ten (10) days from the date of
this order.
3.
Costs shall be costs in the cause.
D.P. MTHIMUNYE, AJ
Appearances:
For
the Applicant:
Adv
N.G.D. Maritz SC
Pretoria
Society of Advocates
Adv
F.G Janse Van Rensburg
Bloemfontein
Society of Advocates
Instructed
by:
Cawood
Attorneys Inc.
c/o
LM Attorneys
Bloemfontein
For
the Respondent:
Adv
D.M. Leathern SC
Adv
A Craucamp
Pretoria
Society of Advocates
Instructed
by:
Tingtingers
Inc
c/o
Honey Attorneys
[1]
2000
(3) SA 691
(C) 694G-H
[2]
1995
(2) SA 73
(TkGD) at para 77 F-I
[3]
1927
CPD 27
at 29
[4]
1990
(3) SA 547
[5]
1950
(3) SA 443
(CPD at para 447