Smith v Snyman and Others In re Smith v Snyman and Others (4199/2013) [2022] ZAFSHC 208 (22 August 2022)

78 Reportability

Civil Procedure

Brief Summary

Civil Procedure — Joinder of parties — Application for joinder of executor in estate matter — Plaintiff seeking to join himself as executor of deceased estate to pursue claims arising from sale of estate property — Opposing party asserting prescription of claims due to delay in joinder — Court held that claims based on fraudulent sale are not subject to prescription as ownership did not pass — Joinder granted to allow proper adjudication of claims.

Comprehensive Summary

Summary of Judgment

Introduction

The proceedings concerned two interlocutory applications arising in long-running civil action proceedings in the Free State Division, Bloemfontein, under case number 4199/2013. The main action was instituted in 2013 by Barend Francis Smith (as plaintiff) against Diederik Arnoldus Snyman (first defendant) and Gerhardus Phillipus Mills N.O. (second defendant, in an official capacity connected to the deceased estate), with the Master of the High Court, Pretoria (third defendant) and the Registrar of Deeds, Bloemfontein (fourth defendant) also cited. During the course of the litigation, Beatrice Linda Mills N.O. was joined as fifth defendant in her capacity as executor of the deceased estate of Gerhardus Phillipus Mills.

The two applications before the court were, first, an application in terms of Uniform Rule 10 for the plaintiff’s joinder in an official capacity (as executor of the estate of the late Johanna Catharina Smith and as trustee of the relevant testamentary trust), and second, an application for leave to amend the particulars of claim in terms of Uniform Rule 28(4).

The underlying dispute in the main action concerned the sale and transfer of immovable property (a portion of the farm O[....] [....]) from the deceased estate of the plaintiff’s late mother, alleged to have occurred without proper consent and under fraudulent circumstances, and the plaintiff’s attempt to obtain relief including a declaration of invalidity, re-transfer, or alternatively damages and an account of benefits derived from occupation.

Material Facts

The court proceeded from the pleaded cause of action as it stood prior to the proposed amendment. The plaintiff alleged that his mother, Anna Johanna Catharina Smith, died on 25 April 2004, that Gerhardus Phillipus Mills N.O. became executor of her estate, and that the plaintiff was a beneficiary under the deceased’s will. An asset of the estate, described as Section 9 of the Farm O[....] number [....], was sold to Diederik Arnoldus Snyman for R150,000.00, allegedly substantially below market value.

It was pleaded that the sale was null and void for reasons including the alleged absence of written consent by heirs as contemplated in section 47 of the Administration of Estates Act 66 of 1965, that the plaintiff did not consent, and that the Master’s consent under section 42(2) was obtained on the basis of a forged consent form. It was further alleged that the sale was presented as necessary due to insolvency, though the estate was allegedly not insolvent and did not need to sell the farm to pay debts. The plaintiff also pleaded that the purchaser was not a bona fide purchaser for value and that he had occupied the farm and derived income from it.

In response to the summons, a plea was filed raising two special pleas. First, the defendants pleaded lack of locus standi, alleging the plaintiff was a beneficiary in a trust and not an heir of the deceased, and accordingly lacked standing. Second, the defendants pleaded prescription, alleging the farm was sold on 24 July 2006 and transferred on 15 November 2007, while summons was served on 4 November 2013, with the result that any claim had prescribed. The court noted that no replication was filed to these special pleas.

In relation to the joinder application, it was common cause on the papers (as accepted by the court) that the plaintiff in an official capacity (the proposed second applicant/second plaintiff) had been appointed as executor on 6 July 2015. The fifth respondent opposed the joinder on the basis that, at the latest, any claim accruing to the estate became due by 6 July 2015, and that prescription would accordingly have been completed by 6 July 2018, before the joinder application was delivered on 25 February 2019.

The plaintiff’s reply in the joinder application relied on the contention that because the transfer was procured by fraud/forgery, the title deed was void ab initio, ownership never passed, and prescription could not be relied upon.

In relation to the amendment application, it was effectively common cause that the fifth defendant had already been joined by a prior court order. The amendments sought were directed at aligning the pleadings with that joinder, including substituting the fifth defendant (as representative of the Mills estate) in place of the deceased second defendant for portions of the relief, and inserting allegations that the second defendant had been liable in a personal capacity for damages arising from maladministration.

Legal Issues

The central legal questions were whether the joinder sought under Uniform Rule 10 should be granted despite the defence that the claims of the estate (advanced through the proposed official-capacity plaintiff) had prescribed, and whether the plaintiff should be granted leave to amend his summons and particulars of claim under Uniform Rule 28(4).

The dispute in the joinder application primarily concerned the application of law to facts, namely the application of the Prescription Act principles (including when a debt becomes due, and whether fraud affects prescription) to the timing of the proposed official-capacity claim and the date of the executor’s appointment. The amendment application concerned the exercise of a procedural discretion guided by established principles: whether the amendment was sought bona fide and whether it would cause prejudice not remediable by a costs order.

Court’s Reasoning

On the joinder application, the court treated the opposition as turning decisively on prescription. The court referred to Leketi v Tladi NO and Others [2010] 3 All SA 519 (SCA), which addressed prescription in a context involving fraud and the restoration of property. The court highlighted the approach that, for prescription purposes, an obligation to restore property (or compensate for its improper appropriation) constitutes a “debt” subject to the ordinary prescription period, and that the statutory framework includes provisions on when a debt becomes due, including the creditor’s knowledge of the debtor and the facts giving rise to the debt (as articulated in the cited extract dealing with section 12(3) of the Prescription Act).

The court also relied on the principle from Leketi that a fraud-based cause of action does not constitute a “continuing wrong” merely because the consequences of the fraud persist; rather, the fraudulent act leading to transfer and registration is treated as a single completed event for purposes of prescription. In that light, the court considered the applicant’s contention—that forged documents rendered the title deed void and thus defeated prescription—and concluded that, on the applicant’s own version, this raised no factual or legal defence to the prescription point as advanced against the official-capacity claim.

Proceeding from what it regarded as uncontested timing, the court accepted that the proposed second applicant was appointed executor on 6 July 2015 and had not instituted action in that capacity on or before 6 July 2018. Even on what the court described as “the best scenario” for the estate, any claim that the estate (through the official-capacity plaintiff) might have had was therefore held to have prescribed, with the consequence that the joinder application could not succeed.

On the amendment application, the court approached the matter on the basis that the fifth defendant had already been joined as a party by court order, and that the proposed amendments were largely directed at bringing the pleadings into line with that procedural reality and redirecting aspects of the claim previously aimed at the second defendant to the fifth defendant in her representative capacity. The court referred to the principle that amendments should generally be allowed unless there is good cause to refuse them, particularly where the amendment is mala fide or would cause injustice not remediable by an appropriate costs order, citing Ascendis Animal Health (Pty) Ltd v Merck Sharp Dohme Corporation and Others 2020 (1) SA 327 (CC).

Applying those principles, the court reasoned that the fifth defendant, already joined, was able to consider and exercise all pleading options and that, from that perspective, there was no prejudice sufficient to justify refusing the amendment. Leave to amend was therefore granted.

In relation to costs, the court treated the amendment as an indulgence sought by the plaintiff and considered the fifth respondent’s opposition to have been reasonable in the circumstances. It therefore ordered the applicant to pay the costs of the application(s), notwithstanding that leave to amend was granted. The court also considered it prudent, given the age of the matter, to direct that it be case-managed and postponed to the pre-trial roll, notwithstanding that case management typically follows close of pleadings.

Outcome and Relief

The joinder application was dismissed, and the applicant was ordered to pay the costs of that application.

Leave was granted to amend the combined summons and particulars of claim in accordance with the notice of application for leave to amend dated 13 April 2021, with the amendment to be effected within five days of the order.

The applicant was ordered to pay the costs of the amendment application. The main action under case number 4199/2013 was postponed to the Pre-trial roll of Monday, 19 September 2022, with compliance directed in terms of Practice Direction 2/2019.

Cases Cited

Leketi v Tladi NO and Others [2010] 3 All SA 519 (SCA)

Ascendis Animal Health (Pty) Ltd v Merck Sharp Dohme Corporation and Others 2020 (1) SA 327 (CC)

Legislation Cited

Administration of Estates Act 66 of 1965 (sections 42(2) and 47)

Prescription Act 68 of 1969 (sections 11(d) and 12(3))

Rules of Court Cited

Uniform Rules of Court, Rule 10

Uniform Rules of Court, Rule 28(4)

Uniform Rules of Court, Rule 15(3)

Practice Direction 2/2019 (Free State Division) (as referenced in the postponement and compliance direction)

Held

The court held that the proposed joinder of the plaintiff in an official capacity as executor and trustee could not be granted because, on the facts accepted by the court, any claim which the estate might have pursued through that official-capacity litigant had prescribed, at the latest running from the date of the executor’s appointment on 6 July 2015 and completing by 6 July 2018, before the joinder application was brought.

The court further held that leave to amend should be granted because amendments are generally allowed unless mala fide or productive of irremediable prejudice, and the fifth defendant—already joined—would not be prejudiced in a manner that could not be addressed in pleading and by appropriate procedural steps.

LEGAL PRINCIPLES

The judgment applied the principle that, for purposes of extinctive prescription, an obligation to restore property (or provide a remedy arising from wrongful appropriation or maladministration) constitutes a “debt” subject to the ordinary prescription period, and that the date a debt becomes due is informed by statutory rules concerning the creditor’s knowledge of the debtor and material facts, including deemed knowledge where the creditor could have acquired it by reasonable care.

It further applied the principle that fraud in the procurement of transfer and registration does not, for prescription purposes, constitute a continuing wrong merely because the consequences remain in place; the actionable wrong is treated as a completed event connected to the impugned transfer/registration, and the mere ongoing registration does not keep the claim perpetually alive.

On pleading amendments, the judgment applied the established discretionary approach that amendments should generally be permitted unless sought mala fide or unless they cause prejudice or injustice that cannot be cured by a costs order or other procedural remedies, and that where a party is already joined and has not yet pleaded, the risk of prejudice is reduced because the party can still raise all available defences in due course.