About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, Makhanda
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, Makhanda
>>
2023
>>
[2023] ZAECMKHC 88
|
|
Ijeoma and Another v University of Fort Hare (2174.2021) [2023] ZAECMKHC 88 (17 August 2023)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE
DIVISION, MAKHANDA)
NOT REPORTABLE
Case no: 2174/2021
In
the matter between:
EDWIN
OKEY CHIKATA IJEOMA
First
Applicant
CENTRE
FOR SCIENTIFIC RESEARCH
AND
INNOVATION (PTY) LTD
Second
Applicant
and
UNIVERSITY
OF FORT HARE
Respondent
In
re:
UNIVERSITY
OF FORT HARE
Plaintiff
and
EDWIN
OKEY CHIKATA IJEOMA
First
Defendant
CENTRE
FOR SCIENTIFIC RESEARCH AND
INNOVATION
(PTY) LTD
Second
Defendant
JUDGMENT
Govindjee J
[1]
The
defendants seek leave to amend their plea (‘the proposed
amendment’). Following a previous attempt to do so, this
court
(per Rugunanan J) issued an order on 30 August 2022 (‘the first
judgment’) granting leave to amend to a limited
extent. The
first judgment includes a useful summary of the background to the
matter, which need not be repeated.
[1]
In essence, the plaintiff issued summons against the defendants for
payment of approximately R4,7 million, alleging that the first
defendant failed to disclose his interest in and his exclusive
control of the second defendant (‘the CSRI’), which
entered various contracts for the supply of services to the
plaintiff. The claim is that the first defendant committed misconduct
and breached his employment contract in doing so. The first
alternative basis for the claim is a disgorgement of profits for the
sum claimed and earned at the expense of the plaintiff during the
first defendant’s period of employment. The second alternative
basis for the claim is the CSRI’s alleged failure to render its
corresponding performance under contracts with the plaintiff,
so that
the plaintiff seeks restitution of its own performance and recovery
of the amount claimed.
[2]
As
was previously the case, the defendants seek to introduce a special
plea of prescription. The defendants further seek to introduce
additional special pleas and to amend certain paragraphs of their
pleaded defence. The plaintiff opposes the application, also
on the
basis that it is not borne in good faith.
[2]
[3]
Various
principles inform a court’s discretion whether to grant or
refuse an amendment. These have been summarised comprehensively
in
the first judgment, and include the following:
[3]
i.
The
court has a discretion whether to grant or refuse an amendment.
[4]
ii.
The court will allow an amendment, even
though drastic, if it raises a new question that the other party
should be prepared to meet.
iii.
With its large powers of allowing
amendments, the court will always allow a defendant, even up to the
last moment, to raise a defence,
such as prescription, which might
bar the action.
iv.
No matter how negligent or careless the
mistake or omission may have been and no matter how late the
application for amendment may
be made, the application can be granted
if the necessity for the amendment has arisen through some reasonable
cause, even though
it be only a bona fide mistake.
v.
Bona
fide amendments that facilitate a fair trial should typically be
allowed, unless the amendments cause an injustice that cannot
be
remedied by way of a costs order, or ‘unless the parties cannot
be put back for the purposes of justice in the same position
as they
were when the pleading which it is sought to amend was filed’.
[5]
vi.
An
amendment requires some explanation, including a reasonably
satisfactory account for any delay, and should not be refused simply
to punish the applicant for neglect.
[6]
vii.
The
applicant must show that prima facie the amendment ‘has
something deserving of consideration, a triable issue’.
[7]
viii.
The
modern tendency is in favour of an amendment if this will facilitate
the proper ventilation of the dispute between the parties.
[8]
[4]
It
is worth emphasising that these principles, and the relevant rules of
procedure,
[9]
must be
interpreted and applied in a manner that gives effect to the
constitutional right to have disputes that can be resolved
by the
application of law decided in a fair public hearing, and in the
interests of justice.
[10]
The
primary principle is that an amendment will be allowed in order to
obtain a proper ventilation of the dispute between the parties,
to
determine the real issues between them, so that justice may be
done.
[11]
As Caney J held in
Trans-Drakensburg
Bank Ltd (Under Judicial Management) v Combined Engineering (Pty) Ltd
and Another
:
[12]
‘…
the
aim should be to do justice between the parties by deciding the real
issues between them. The mistake or neglect of one of them
in the
process of placing the issues on record is not to stand in the way of
this; his punishment is in his being mulcted in the
wasted costs. The
amendment will be refused only if to allow it would cause prejudice
to the other party not remediable by an order
for costs and, where
appropriate, a postponement. It is only in this relation …
that the applicant for the amendment is
required to show it is
bona
fide
and to explain any delay there may
have been in making the application, for he must show that his
opponent will not suffer prejudice
in the sense I have indicated. He
does not come as a suppliant, cap in hand, seeking mercy for his
mistake or neglect. Having already
made his case in his pleading, if
he wishes to change or add to this, he must explain the reason and
show
prima facie
that he has something deserving of consideration, a triable issue; he
cannot be allowed to harass his opponent by an amendment
which has no
foundation. He cannot place on the record an issue for which he has
no supporting evidence, where evidence is required,
or, save perhaps
in exceptional circumstances, introduce an amendment which would make
the pleading excipiable … or deliberately
refrain until a late
stage from bringing forward his amendment with the purpose of
catching his opponent unawares … or of
obtaining a tactical
advantage …’ (references omitted).
[5]
Recent
authority confirms that it is for the plaintiff to show that the
amendments have been requested mala fide.
[13]
The plaintiff did not base its objection on prejudice that would be
suffered by it that cannot be cured by an appropriate costs
order.
Instead, specific objections were raised to certain paragraphs of the
amended plea that accompanied the defendants’
notice of
intention to amend. It is convenient to consider the various special
pleas and amendments that have been objected to
before considering
the overarching complaints of bad faith and delay.
The special pleas of
prescription
[6]
The particulars of claim allege various
forms of misconduct on the part of the first defendant which resulted
in losses to the plaintiff
in the amount of R4,7 million. The case is
that the first defendant’s misconduct comprised a series of
material breaches
of his contract of employment. In the
alternative, an alleged violation of the duty of good faith resulted
in the obligation
to disgorge secret profits received to the tune of
R4,7 million. In the further alternative, the plaintiff claims
entitlement to
restitution of its performance (in the same amount)
based on the CSRI’s failure to perform in terms of its
contractual obligations.
[7]
The
plaintiff pleads that it only became aware of the first defendant’s
interest in the CSRI during December 2020, the first
defendant having
not disclosed this during the period of his employment. The proposed
amendment introduces various facts suggestive
of the plaintiff’s
deemed knowledge of the facts from which the debt arose, and identity
of the first defendant as debtor,
‘between May 2012 and May
2015
alternatively
2016’.
[14]
This is based on the allegation that three senior employees of the
plaintiff, exercising reasonable care, would have ‘conducted
an
enquiry or investigation into the factual and legal basis for
payments made … each time they were paid by the plaintiff
or a
year thereafter’. Such an investigation would have illuminated
the facts from which the debt arose and identity of the
defendants
more than three years before the institution of the claim, so that it
had prescribed when issued.
[8]
The
plaintiff’s first argument, that the amended plea fails to
address the issues identified in the first judgment regarding
the
special plea of prescription, is without merit. There the court
considered the inference that ‘the plaintiff knew of
the
breaches of conduct upon which it bases its claims as such conduct
occurred in 2015’ and decided that ‘the defendants
ought
to have pleaded facts to support the inference, or pleaded facts
which indicate that the plaintiff knew of the said conduct
at any
time during the specified period’, so that the special plea was
excipiable. The relevant portion of the amended plea
is based
squarely on the s 12(3) proviso and sufficient facts have been
pleaded in support to raise, prima facie, a triable issue.
While
specific dates upon which the plaintiff allegedly obtained
constructive knowledge may not have been identified, this is not
fatal to the proposed amendment.
[15]
[9]
The next argument, that the remaining
special pleas of prescription fail to make a true distinction in
respect of the alternative
claims, is unfounded considering the
similar underpinning facts for these causes of action, as evinced by
the cross-reference in
the particulars of claim to facts contained in
the primary cause of action. To illustrate the point, the claim
against the CSRI
is connected to failure to render performance ‘in
terms of each of the contracts with the plaintiff set out in
paragraph
20’. Those contracts are dated between May 2012 and
May 2015, the plaintiff claiming entitlement to restitution. The
special
plea of prescription, properly read, encapsulates the various
causes of action and adequately distinguishes between the debts
allegedly
owed by the first defendant and the CSRI.
[10]
The
third argument is that the defendants have failed to plead any facts
supportive of the conclusion that any of the three employees
mentioned ‘bore the responsibility or had the capacity and
skills to conduct such enquiries or investigations, by reason
of
their respective job descriptions’. As
Mr
Mabuza
argued, that argument fails to draw a distinction between
facta
probanda
and
facta
probantia
.
[16]
The pleading contains sufficient particularity of the material facts
relied upon to substantiate the point in question, and to
enable the
plaintiff to reply.
[17]
[11]
The
remaining grounds of objection to the special plea of prescription
may be rejected on the basis that they ignore the statutory
distinction between actual knowledge, and the first judgment’s
determination in that respect, and deemed knowledge.
[18]
While it has been said that special pleas of prescription are rarely
pleaded elegantly,
[19]
the
defendants in this instance clearly set their stall with reference to
the s 12(3) proviso. It is open to the plaintiff to replicate,
also
with reference to s 12(2) if appropriate. It is furthermore not
unusual for defendants raising prescription to plead an outer
limit,
‘and then for the evidence to reveal some sort of give or take
in this respect’.
[20]
The second special
plea: failure to disclose a cause of action
[12]
The defendants seek to amend the plea by
introducing the defence that the plaintiff’s particulars of
claim do not disclose
a cause of action in respect of its claim for
contractual damages. The basis for this is that the damages allegedly
suffered by
the plaintiff ‘do not flow naturally and generally
from the alleged breaches’ and are thus too remote.
[13]
The objection to the proposed amendment is
that no explanation is provided for the assertion that the nature of
the breaches precludes
the presumption of law that the damages fell
within the contemplation of the parties and are therefore not
regarded as being too
remote.
[14]
The
criticism that there is insufficient detail in the proposed amendment
to raise a peremptory special plea is unfounded. The second
special
plea, prima facie, raises a triable issue in the form of a defence to
the claim for damages and should be allowed.
[21]
The suggestions that the point should have been raised by way of
exception, or amounts to an irregular step, appear to be without
merit. From the authorities provided, and the limited argument
presented on the point, the accepted position appears to be that
it
is of no concern to the other party if the defence is raised by way
of exception or as a special plea.
[22]
There has additionally been no demonstrated prejudice, so that the
proposed amendment must be granted.
Third special plea:
failure to disclose a cause of action for alternative claim for
disgorgement of profits
[15]
The crux of this special plea is that a
claim for disgorgement requires an allegation that the first
defendant appropriated the
plaintiff’s corporate opportunity to
make the alleged secret profits. The plaintiff objects to the
proposed amendment on
the basis that no such allegation is necessary,
so that the third special plea is excipiable and should be
disallowed.
[16]
The
requirements of a claim for disgorgement of profits have been
summarised as follows in
Sime
Darby Hudson and Knight (Pty) Ltd v Lerena
:
[23]
‘
In
order to succeed in its claim for a disgorgement of profits the
plaintiff must establish that the defendant owed it a fiduciary
obligation; that in breach of that obligation the defendant placed
himself in a position where his duty and his personal interest
were
in conflict and, finally that the defendant made a secret profit out
of corporate opportunities belonging to the plaintiff.
I deal with
these requirements in turn …’
[17]
The
object of pleading is to define the issues. Within certain limits, it
is accepted that the court is afforded a wide discretion
on the basis
that the pleadings are made for the court, not vice versa:
[24]
‘
And
where a party has had every facility to place all the facts before
the trial court … there is no justification for interference
by an appellate tribunal, merely because the pleading of the opponent
has not been as explicit as it might have been.’
[18]
In
my view it would be over-technical to uphold the defendants’
arguments in this respect. The plaintiff has defined its alternative
cause of action sufficiently clearly to enable the defendants to
appreciate the case they should be prepared to meet in respect
of
allegations of secret profits and disgorgement.
[25]
This includes the averment that secret profits were made ‘at
the expense of the plaintiff’. This is not an instance
of the
defendants possibly being misled by the wording of the alternative
claim.
[26]
The pleadings,
properly interpreted, explain the alternative basis of the
plaintiff’s claim.
[27]
The plaintiff has set out, in concise terms but with sufficient
particularity, the material facts it intends to rely upon in the
alternative. While pleadings must be drawn carefully, the rules do
not require drafting perfection and courts have been enjoined
not to
read them pedantically.
[28]
In
this instance, and as argued by
Ms
Gordon-Turner
,
the plaintiff’s allegations are clearly cognisable and the
amendment is disallowed.
Fourth special plea:
The alternative claim for restitution
[19]
The question raised by this amendment is
whether the particulars of claim disclose a cause of action in
respect of the restitution
claim. The defendants aver that the
plaintiff has not alleged cancellation of a contract and tendered any
performance it has received,
alternatively has failed to plead a
legally competent cause of action to support the claim.
[20]
The
defendants rely upon
Drummond
Cable Concepts v Advancenet (Pty) Ltd
,
[29]
a case dealing with an exception, in support of the amendment. That
judgment draws a clear distinction between claims for contractual
damages and claims for restitution, adding the following in respect
of pleadings:
‘
For
a claim of restitution (or rescission as it is sometimes referred to)
to succeed the plaintiff must in her pleadings tender
return of
whatever she has received from the bargain. If she received no
benefit at all as had occurred in
Probert
,
she must plead this fact … None of this is in the pleadings of
the plaintiff in this case. Absent averments to this effect,
the
cause of action relied upon cannot be sustained …’
[21]
The
plaintiff has failed to deal with this authority, suggesting only
that ‘the claim for restitution is one for unjustified
enrichment’, so that it is unnecessary to allege and prove
cancellation of the contracts and to tender return of any performance
received. That suggestion is not borne out by the contents of the
particulars, which fails to follow the recommended approach of
formulating the claim in terms of either a general enrichment action
or one or other of the various
condictiones
.
[30]
[22]
The only other objection repeats the
plaintiff’s issue that an exception is being raised by way of
special plea. In these
circumstances, and in the absence of authority
to the contrary, the amendment should be allowed.
Paragraphs 39 and 41
[23]
The defendants seek to amend the plea as
follows:
‘
Ad
paragraph 6:
39.
The defendants admit that the first defendant was additionally
appointed by the plaintiff to several
other projects, including the
IDAM project P722, P290 and P595. The defendants deny that these
appointments for externally funded
projects were subject to the
plaintiff’s Supply Chain Management Policy and Procedure as
each of those projects has its own
agreed terms and conditions
between the parties involved.
Ad paragraphs 7, 8, 9, 10
and 11
40.
…
41.
The defendants deny that annexure “UFH3” is applicable to
the Externally Funded Projects.’
[24]
The
amendments in question seek to raise a defence based on a distinction
with ‘externally funded projects’. The first
judgment
considered and allowed this, even though this involved the withdrawal
of an admission.
[31]
I have no
difficulty in following that judgment on the point, also on the basis
that the amendments, prima facie, raise a triable
issue and in the
absence of any demonstratable prejudice to the plaintiff. The
amendments are allowed.
Paragraphs 42, 43 and
75
[25]
The objection to paragraph 75 was based on
a typographical error contained in the notice of amendment. The
intention was to admit
the contents of sub-paragraph 23.1, which
relate to the first defendant’s duty of good faith, and deny
the remainder of the
allegations in paragraph 23. Leave to amend the
typographical error is not opposed and is granted.
[26]
What remains are the following objections:
‘
7.6
At paragraph 23.3 of the particulars of
claim … the plaintiff alleges that the first defendant
is
obliged to disgorge the secret profits of no less than R4 773 199.05
in favour of the plaintiff.
7.7
In paragraph 75 of the proposed amended plea, the defendants baldly
deny this allegation. The
defendants’ denial is inconsistent
with and contradicts the admissions made in paragraphs 42, 43 and 75
of the proposed amended
plea, referred to in paragraphs 7.1, 7.2 and
7.5 above, and as such the denial is embarrassing, and absent any
cogent explanation,
tends to show bad faith, is without merit, and
does not make out a defence.’
[27]
The defendants admit that the first
defendant owed the plaintiff a duty of good faith, by virtue of his
employment, which entailed
that the first defendant was:
a)
obliged not to work against the plaintiff’s
interests;
b)
obliged not to place himself in a position
where his interests conflicted with that of the plaintiff;
c)
obliged not to make a secret profit at the
expense of the plaintiff; and
d)
obliged not to receive any bribe, secret
profit or commission in the course of or by means of his position as
employee of the plaintiff.
[28]
The defendants deny that, in breach of the
admitted duty of good faith, and by way of misconduct, the first
defendant:
a)
worked against the plaintiff’s
interests;
b)
placed himself in a position where his
interests conflicted with that of the plaintiff;
c)
made secret profits at the expense of the
plaintiff; and
d)
received the secret profits by virtue of
his employment, so that the first defendant is obliged to disgorge
the secret profits.
[29]
The distinction between admitting a duty of
good faith, on the one hand, and misconduct culminating in an
obligation to disgorge
secret profits, on the other, is immediately
apparent. The defendants’ denial of an obligation to disgorge
secret profits
must be construed together with the defences raised by
the plea, including the introduction of special pleas which, if
successful,
will result in the avoidance of liability. In these
circumstances, a prima facie triable issue is raised and the
amendment is allowed.
Paragraphs 47 to 50
[30]
The proposed amendments seek to deny the
assertion that the first defendant failed to disclose to the
plaintiff his interest in
and exclusive control of the CSRI. It is a
sequel to the defendants’ previous assertion that the plaintiff
had known of the
first defendant’s interest and role in the
CSRI since 2011. The first judgment refused an attempt to introduce
this allegation
on the basis of non-specificity. The proposed
amendments are based on an alleged oral understanding between the
first defendant
and two senior university figures, during 2010, that
CSRI would be established by the first defendant as a vehicle for
externally
funded projects. The plaintiff would remunerate the CSRI
for services rendered, and the first defendant and / or other
employees
of the plaintiff ‘and other third parties’
would be remunerated by CSRI. The amendment continues as follows:
‘
49.
The above was known at all material times (2010 – 2016) by the
plaintiff’s then Vice
Chancellor, Prof Mvuyo Tom, Chief
Financial Officer Mr Robin Stone, project finance manager Mr Adrian
Runganathan and other employees
from the project finance office.
Accordingly, through these employees the plaintiff acquired knowledge
that the first defendant
would pre-incorporation of the second
defendant be a director of the latter and was a director of second
respondent post incorporation.
50.
The defendants deny the allegations contained in this paragraph. The
first defendant disclosed
that he would have an interest in the
second defendant when he agreed to form the second defendant as per
the above. Alternatively,
the duty to disclose did not arise as the
plaintiff … and other employees from the project finance
office had knowledge
… of the first defendant’s interest
(potential and actual) in the second defendant).’
[31]
Two grounds of objection are raised.
Firstly:
‘
8.3.9
However, the defendants have failed to plead in terms that post
incorporation of the second defendant, the first
defendant advise any
one or more of the persons listed … that he was and is a
director of the second defendant, and if so,
on what date, where and
in what form he did so (written or oral).
8.3.10 In short,
the defendants have failed to allege any facts to show that the first
defendant discharged the positive duty
upon him …’
[32]
The objection is directed to a failure to
allege a disclosure of interest after incorporation of CSRI. There is
no objection, seemingly,
to the amendment alleging that
pre-incorporation disclosure occurred. The objection appears to
overlook the averments as to the
2010 oral arrangements involving
senior personnel and the allegation that the Vice Chancellor, chief
financial officer, project
finance manager and other employees from
the project finance office knew of these arrangements so that ‘…the
plaintiff
acquired knowledge that the first defendant would
pre-incorporation of the second defendant be a director of the latter
and was a director of second respondent
post incorporation
’.
[33]
I agree with
Mr
Mabuza
that upholding the objection
would place form over substance and that, even if the time of
disclosure is at issue, a triable issue
has been raised. Absent any
prejudice to the plaintiff, the objection fails.
[34]
The second objection claims inconsistency
between paragraph 46 of the proposed amended plea, on the one hand,
and paragraphs 47
to 50, on the other, so that the amendment
occasions embarrassment. In paragraph 46, the defendants aver that
they have no knowledge
of the plaintiff’s allegation that it
only became aware of the first defendant’s interest in CSRI on
or about 1 December
2020. That allegation is accordingly not
admitted. There is no inconsistency between that position and the
defendants amended plea
that the plaintiff, through its employees,
had knowledge of the interest much sooner (2010 to 2016). The
objection is without merit
and the proposed amendments are allowed.
Paragraph 51
[35]
The plaintiff details the first defendant’s
alleged misconduct in paragraph 19.2 of the particulars of claim, on
the basis
that the first defendant caused the CSRI to contract with
the plaintiff, inter alia, by falsifying quotations from fictional
entities
and abusing his position of authority. The defendants seek
to amend their plea to this as follows:
‘
Save
to admit that the plaintiff contracted with the second defendant on
several occasions to perform work for it relating to externally
funded projects that had been secured on behalf of the plaintiff. The
rest of the allegations in these paragraphs are denied.’
[36]
The crux of the objection is that, in
effect, the first admits participation in contracts awarded by the
plaintiff to CSRI, and
thereby breach of a material term of the
contract of employment. That argument is premised on an erroneous
reading of the proposed
amended plea, which does not amount to an
admission that the first defendant participated in contracts awarded
by the plaintiff
to the CSRI.
[37]
An added basis for objection is that the
defendants fail to allege any facts demonstrating that the first
defendant discharged the
positive duty to disclose his interest in
any contract to be awarded by the plaintiff to the CSRI. The
difficulty with this objection
is that the related paragraphs of the
particulars of claim do not address the first defendant’s
positive duty to disclose.
That was dealt with in paragraph 19.1 of
the particulars of claim and has been pleaded to separately. It is
unclear why the defendants
should nonetheless have added reference to
this in pleading to paragraph 19.2. The amendment is accordingly
allowed.
Paragraph 52
[38]
The proposed amendment denies that the
first defendant received payment on behalf of CSRI of invoices paid
by the plaintiff to its
business banking account, to which the first
defendant is the registered authorised representative. The plaintiff
objects on the
basis that this amounts to a bald denial that
contradicts a subsequent admission that CSRI received approximately
R4,7 million
as payment for invoices for the 2013, 2014 and 2015
financial years, and that the proposed plea avoids the point of
substance and
contravenes Uniform Rule 18(5).
[39]
I disagree. The defendants have
unequivocally denied both allegations pleaded by the plaintiff and
put the plaintiff to proof thereof.
There is no suggestion of
prejudice and any further clarification required may be sought by way
of a request for further particulars.
I am also of the view that the
denial does not contradict the subsequent admission, which relates to
receipt of an amount of money
by CSRI for services rendered by the
first defendant and other third parties including the plaintiff’s
employees. The proposed
amendment is therefore allowed.
Paragraph 58
[40]
The
defendants admit that all university policies, including the
plaintiff’s Supply Chain Management Policy and Procedure,
are
binding upon all employees of the plaintiff. The proposed amendment
seeks to rely on a condition precedent contained in the
Supply Chain
Management Policy and Procedure, arguing that the University
Council’s non-fulfilment of the condition resulted
in the
suspension of the operation of the policy. Considering the available
authorities, there is no inconsistency warranting rejection
of the
proposed amendment.
[32]
While
the earlier admission appears to create a direct contradiction, the
proposed defence is clear when the plea is read in its
entirety. It
would be unnecessarily formalistic, in my view, to require amendment
to the earlier admission in order to align its
contents more
accurately with the plea in this paragraph. A proper ventilation of
the dispute requires the exercise of a discretion
to allow the
amendment in the circumstances.
Paragraphs 60, 61 and
70
[41]
The issue at hand relates to the
defendants’ denial of a conflict of interest, and plea to the
effect that there was therefore
no need to recognise or disclose any
conflict of interest. The objection is based on the submission that a
conflict of interest
is self-evident, and inherent, given the
defendants’ version that the first defendant represented both
the plaintiff and
CSRI when contracting for services in relation to
externally funded projects.
[42]
The objection amounts to legal argument.
The proposed amendments are capable of replication and whether any
conflict of interest
existed or was inherent and required recognition
or disclosure is prima facie a triable issue. Absent any discernible
prejudice,
the amendments are allowed.
Paragraphs 62 to 64
[43]
The particulars of claim allege that the
first defendant was a role player in the plaintiff’s supply
chain and that he failed
to disclose his interest in the contracts to
be awarded to the CSRI and failed to withdraw from participation in
the process relating
to those contracts.
[44]
The proposed amendments deny these
allegations on the basis that the first defendant’s interest in
the CSRI was known to the
plaintiff prior to it contracting with the
CSRI. The defendants plead that the first defendant did not have to
withdraw from supply
chain management process participation in
relation to those contracts ‘because the first defendant was
never part of those
processes’.
[45]
The
crux of the plaintiff’s objection relates to allegedly
contradictory pleas to other paragraphs of the particulars of claim.
The plaintiff does not explain the suggested contradictions with
reference to provisions of the applicable policy. In any event,
upholding that objection may require interpretation of the word
‘processes’ as it is used in the applicable policy.
It is
inappropriate to do so at this stage.
[33]
It suffices to note that the proposed amendment does not cause
embarrassment and that the plaintiff may plead to the impugned
paragraphs so that the issues related to whether the first defendant
was a role player in the plaintiff’s supply chain, and
ought to
have withdrawn from processes relating to CSRI contracts, are prima
facie triable. The amendments are allowed.
Paragraphs 65 to 67
[46]
The plaintiff alleges that the first
defendant conducted himself in a manner expressly prohibited by
clauses of the Supply Chain
Management Policy and Procedures.
According to the plaintiff, he did so by failing to protect its
interests in various ways, also
by failing to procure performance by
the CSRI of its contractual obligations and by not ensuring that the
plaintiff received value
for the payments it made to CSRI. It is also
alleged that the first defendant sought and accepted financial gain
in interacting
with the CSRI on behalf of the plaintiff and that he
simultaneously acted on behalf of the CSRI in those interactions,
disregarding
a patent conflict of interest.
[47]
The proposed amendments deny these
allegations. This is on the basis that all the CSRI’s
contractual obligations to the plaintiff
were fulfilled so that the
plaintiff received value for the payments it made to the CSRI. The
defendants also aver that the first
defendant could not have acted in
breach of clauses of the Supply Chain Management Policy and
Procedures given that it was the
CSRI that conducted business on
behalf of the plaintiff and received a benefit or gain from the
plaintiff.
[48]
The objection is that the last-mentioned
averment is irreconcilable with the admissions that the first
defendant had an interest
in the CSRI and was in control, either
jointly or solely thereof, and would be remunerated by the CSRI after
it received remuneration
from the plaintiff for services rendered.
[49]
Determining
the real issue at hand requires interpretation of clauses of the
plaintiff’s Supply Chain Management Policy and
Procedures.
[34]
That the CSRI was a separate juristic person will also require
consideration. As was the case with the previous objection, it would
be premature to interpret the relevant clauses at this juncture and
the amendment is allowed.
Delay and bad faith
[50]
The plaintiff’s objections to the
proposed amendments based on undue delay and bad faith must be
construed by considering
the accepted principles governing pleadings.
In respect of tardiness, delay in bringing forth an amendment is
generally, in the
absence of prejudice, not a sound basis for
refusing an amendment. Leave to amend may be granted ‘at any
stage’, even
where mistakes and omissions have been careless,
and the application is particularly late.
[51]
The amendments that have been allowed will
facilitate a proper ventilation of the dispute between the parties
and a fair trial.
The delays detailed in the papers, when considered
together with the explanations offered for this and the chronology of
events,
are not of the kind that cause irremediable prejudice to the
plaintiff and which should, without more, warrant refusal. A
reasonably
satisfactory account for the delay has been proffered.
Linked to this, and as is apparent when considering the reasons
for
allowing many of the proposed amendments, it cannot be said that
the application amounts to a delaying tactic or has been brought
in
bad faith.
[52]
In instances where there are no objections
to paragraphs of the amended plea, the amendments are also allowed.
Costs
[53]
I
have considered the issue of costs in the light of counsels’
submissions. These are usually borne by an applicant seeking
leave to
amend, on the basis that an indulgence is being sought. In my view,
the opposition to the intended amendments was not
unreasonable. It
certainly cannot be said that none of the bases upon which the
application was opposed had a realistic prospect
of succeeding, and
in one respect the ground of objection has been held to be valid.
[35]
In many of the instances where an amendment has been permitted, this
was only following scrutiny and detailed consideration of
the wording
of the proposed amendments, the grounds of objection and the
applicable principles. I am satisfied that there is therefore
no
reason to depart from the usual position.
Order
[54]
The following order is made:
1.
The defendants are granted leave to amend
their plea to the extent set out in this judgment within ten days.
2.
The defendants are jointly and severally
liable to pay the costs of the application.
A GOVINDJEE
JUDGE OF THE HIGH
COURT
Heard
:
01 June 2023
Delivered
:
17 August 2023
Appearances:
Counsel
for the Applicants:
Adv
V Mabuza
Brooklyn
Chambers, Pretoria
Instructed
by:
MWIM
& Associates Inc.
Attorneys
for the Defendants
Van
Erkom Building
217
Pretorius Street
Pretoria
Email:edenhpaul@mwimlaw.co.za
C/O:
De
Jager & Lordan Inc.
2
Allen Street
Makhanda
Email:stuart@djlaw.co.za
Counsel
for the Respondent:
Adv
F Gordon-Turner
Instructed
by:
Bradley
Conradie Halton Cheadle
Attorneys
for the Plaintiff
G04,The
Gatehouse
Century
Way
Century
City
Cape
Town
Email:liezl@bchc.co.za
C/O:
Huxtable
Attorneys
26
New Street
Makhanda
Email:owen@huxattorneys.co.za
[1]
Unreported
case no. 2174/2021 (Eastern Cape Division, Makhanda).
[2]
The plaintiff argues that the defendants’ explanation for
failing to amend their plea subsequent to the first judgment
is
unconvincing, and that their failure to do so is significant in
determining whether a further indulgence should be permitted.
They
highlight the following subsequent events: the defendants delivered
an amended plea on 22 February 2023 in contravention
of the rules,
and without raising a special plea of prescription. That amendment
was withdrawn on 23 March 2023, without any
tender of costs,
following the plaintiff’s notice in terms of Rule 30(2)
(b)
.
This was accompanied by a (second) notice to amend, which was
withdrawn on 5 April 2023 after delivery of the plaintiff’s
notice of objection on 30 March 2023. Again, the defendants failed
to tender the plaintiff’s costs. That notice had been
couched
in similar terms to the present (third) notice to amend.
[3]
Zarug v
Parvathie NO
1962
(3) SA 872
(D) at 876A – D;
Commercial
Union Assurance Co Ltd v Waymark NO
1995 (2) SA 73
(TK) (‘
Waymark
NO
’)
at 77F – I;
Media
24 (Pty) Ltd v Nhleko & Another
[2023] ZASCA 77
(‘
Media
24
’)
paras 16 – 19.
[4]
Robinson
v Randfontein Estates Gold Mining Co. Ltd
1921 AD 168
at 243.
[5]
Moolman
v Estate Moolman and Another
1927 CPD 27
at 29 as confirmed in
Affordable
Medicines Trust and Others v Minister of Health and Others
[2005] ZACC 3
;
2006 (3) SA 247
(CC) paras 9, 10.
[6]
See
GMF
Kontrakteurs (Edms) Bpk and Another v Pretoria City Council
1978 (2) SA 219
(T) at 222E – F;
Waymark
NO
at
77F – I.
[7]
Ibid.
[8]
Ibid.
[9]
In terms of Uniform Rule 28(10), the court may, notwithstanding
anything to the contrary in this rule, at any stage before judgment
grant leave to amend any pleading or document on such other terms as
to costs or other matters as it deems fit.
[10]
S 34 of the Constitution of the Republic of South Africa, 1996. See
SASOL
South Africa t/a SASOL Chemicals v Gavin J Penkin
[2023]
ZAGPJHC 329; Also see
TN
obo BN v Member of the Executive Council for Health, Eastern Cape
[2021] 1 All SA 561
(ECB) para 34.
[11]
See
Trans-Drakensburg
Bank Ltd (Under Judicial Management) v Combined Engineering (Pty)
Ltd and Another
1967 (3) SA 632
(D) at 637H – 638B, and the authorities cited
thereafter.
[12]
Ibid at 640H – 641B.
[13]
See
Ascendis
Animal Health (Pty) Ltd v Merck Sharpe Dohme Corporation and Others
[2019] ZACC 41
para 90.
[14]
S 12 of the Prescription Act, 1969 (Act 68 of 1969) deals with ‘when
prescription begins to run’, as follows:
(1)
Subject to the provisions of subsections (2), (3) and (4),
prescription shall commence to run as soon as
the debt is due.
(2) If
the debtor wilfully prevents the creditor from coming to know of the
existence of the debt, prescription
shall not commence to run until
the creditor becomes aware of the existence of the debt.
(3) A
debt shall not be deemed to be due until the creditor has knowledge
of the identity of the debtor and
of the facts from which the debt
arises: Provided that a creditor shall be deemed to have such
knowledge if he could have acquired
it by exercising reasonable
care.
(4) …
[15]
For a special plea worded with even less detail, see the judgment of
Goldstein J in
Ditedu
v Tayob
2006 (2) SA 176
(W) para 2. Also see
Gunase
v Anirudh
2012
(2) SA 398
(SCA). It is well established that the defendants bear
the onus of proving when the plaintiff acquired, or should
reasonably
be deemed to have acquired, the knowledge in question,
and that the s 12(3) exception to the general rule is separate from
the
s 12(2) exception:
Mtokonya
v Minister of Police
2018
(5) SA 22
(CC) paras 32 and following.
[16]
See
McKenzie
v Farmers’ Co-operative Meat Industries Ltd
1922 AD 16
at 23 and
JSS
Industrial Coatings CC v Inyatsi Construction (South Africa) (Pty)
Ltd
[2017] JOL 37193 (GSJ).
[17]
See
Nasionale
Aartappel Koöperasie Bpk v Price Waterhouse Coopers Ing
2001 (2) SA 790
(T) at 798.
[18]
See
Leketi
v Tladi NO and Others
[2010] ZASCA 38
;
[2010] 3 All SA 519
(SCA) paras 10, 11 and 18.
[19]
Diko v
MEC for Health
[2022] ZAECBHC 11 (‘
Diko
’)
para 68.
[20]
Ibid para 70.
[21]
Shatz
Investments (Pty) Ltd v Kalovyrnas
1976 (2) SA 545
(A) at 550B – E.
[22]
See LTC Harms
Amler’s
Precedents of Pleadings
(9
th
Ed) (2018) part A IV p 6;
Sanan
v Eskom Holdings Ltd
2010 (6) SA 638
(GSJ) para 18;
AS
v Neotel
(Pty)
Ltd
2019
(1) SA 622
(GJ) fn 2;
Medihelp
v Minister of Finance NO
[2020] ZASCA 29
para 12.
[23]
Sime
Darby Hudson and Knight (Pty) Ltd v Lerena
[2018] 4 All SA 446
(WCC) para 95.
[24]
Robinson
v Randfontein Estates GM Co Ltd
1925 AD 173.
[25]
See
South
African Police Service v Solidarity obo Barnard
2014
(6) SA 123
(CC) para 202.
[26]
See
Stead
v Conradie en Andere
[1994] ZASCA 147
;
1995 (2) SA 111
(A) at 122.
[27]
See
Gcaba
v Minister for Safety and Security
[2009]
ZACC 26
para 75.
[28]
H Daniels
Beck’s
Theory and Principles of Pleadings in Civil Actions
(6
th
Ed) (2002) at 46.
[29]
Drummond
Cable Concepts v Advancenet (Pty) Ltd
2020
(1) SA 546
(GJ) para 24.
[30]
LTC Harms
Amler’s
Precedents of pleadings
(9
th
Ed) (2018) (LexisNexis) at 187.
[31]
The first judgment: paras 20, 27. An attachment to the replying
affidavit demonstrates that the plaintiff had raised the same
objections before Rugunanan J.
[32]
See the judgment of Wallis AJA in
Mia
v Verimark Holdings (Pty) Ltd
[2010] 1 All SA 280
(SCA) para 1: the conclusion of a contract
subject to a suspensive condition creates “a very real and
definite contractual
relationship” between the parties.
Pending fulfilment of the suspensive condition the exigible content
of the contract
is suspended.
[33]
See
Media
24
above
n 3 para 15.
[34]
Clause 49 addresses ‘compliance with ethical standards &
conflict of interest, as follows:
‘
49.1
In line with the code of conduct of the University of Fort Hare, all
staff members of the University are
expected to adhere to the
following:
(a)
Every employee has a fiduciary relationship with the University and
as such is obliged to protect the interests
and wellbeing of the
University. Therefore the employee will neither seek nor accept
financial gain in any interaction on behalf
of the University.
Conflict of interest may arise as a result of activities in which
employees engage as private individuals.
Employees must refrain from
allowing their dealings on behalf of the University to be influenced
by personal or family interests,
or the interests of friends or
associates. Competition with the University is prohibited.
(b)
Employees may not accept any form of benefit or payment through the
transaction of business on behalf of
the University;’
[35]
See
Tusk
Construction Support Services (Pty) Ltd and Another v Independent
Development Trust
[2020] ZASCA 22
para 31.