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[2021] ZAGPPHC 336
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First 3D (Pty) Ltd v Coleman and Another (39217/18) [2021] ZAGPPHC 336 (1 June 2021)
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IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE
NUMBER: 39217/18
REPORTABLE:
YES / NO
OF
INTEREST TO OTHER JUDGES: YES / NO
REVISED
DATE:
1 June 2021
FIRST
3D (PTY)
LTD
Plaintiff
/
Applicant
V
CLEM
COLEMAN
First Defendant/Respondent
VISION
SCREENER (PTY) LTD
Second Defendant/Respondent
JUDGMENT
MABUSE
J
[1]
This is an interlocutory application by the Plaintiff to amend its
particulars of claim (“POC”).
This application
follows upon an objection raised by the Defendants against such
contemplated amendments. For ease of reference,
I shall refer
to the parties herein by the names they chose to call themselves in
the main application.
[2]
THE
PARTIES
2.1 The Plaintiff,
First 3D (Pty) Ltd, is a company with limited liability registered as
such in accordance with
the company statutes of this country, having
its registered office at […], […], […], […],
C[…],
Gauteng.
2.2 The First
Defendant, Clem Coleman (“Mr Coleman”) is an adult
businessman and the sole director
of the Second Defendant, who
resides at […], […], Extension […], C[…],
Gauteng.
2.3
The Second Defendant, Vision Screener (Pty) Ltd (“Vision
Screener”), is a company duly registered
in terms of the
provisions of the company laws of the Republic of South Africa, with
its registered address located at […],
[…], Extension
[…], C[…], Gauteng.
[3]
The Plaintiff has issued out summons against the Defendants in which
it claims, among others, payment
of a sum of R1,418,937.22. The
Plaintiff’s claim against the Defendants is based on an oral,
alternatively tacit agreement
with express terms, alternatively
tacit, further alternatively with implied terms.
PARAGRAPH 4
[4] In its
POC, the Plaintiff has, in paragraphs 4 and 11, which are the
paragraphs it intends amending,
pleaded its case as follows:
“
4.
On or about June 2012 and at or near JETPARK, Centurion, Gauteng
Province, the Plaintiff, represented
by its sole director, Nicky
Smith, and the First Defendant, representing the Second Defendant,
entered into an oral, alternatively
tacit agreement, with the salient
express, alternatively tacit, alternatively implied terms of which
were, inter alia, as follows:
4.1 That the
Plaintiff and the Second Defendant would procure the services of
EFLEX Technologies (Pty) Ltd to
develop and manufacture Vision
Screeners;
4.2 That the
First Defendant would attend to service all of the Vision Screeners
sold (the aforementioned being
the status quo which had developed
prior to the pleaded agreement);
4.3 That, for
every Vision Screener sold, after the deduction of the manufacturing
cost owing to EFLEX, the Second
Defendant would be entitled to 63% of
the profit and the Plaintiff would receive 37% of the profit;
4.4 For all
Vision Screeners sold, the purchaser would pay the full purchase
price of the Vision Screeners to
the Second Defendant and the Second
Defendant would, in turn, transfer 37% of the profit directly to the
Plaintiff;
4.5 That the
Second Defendant has 30 days from the date of invoice to pay the
amount as stipulated on said invoice
to the Plaintiffs;
4.6 That any
amount not paid by the Defendant shall bear interest up to the
maximum permissible rate, from time
to time; and
4.7
That should the Second Defendant be in default with payment of any
amount due, the total amount due to the
Plaintiff by the Second
Defendant would become immediately due and payable.”
PARAGRAPH 11
“
11.
THE
FIRST DEFENDANT’S LIABILITY JOINTLY AND SEVERALLY
11.1
The First Defendant is the sole director of the Second Defendant;
11.2 The First Defendant, as
the sole director of the Second Defendant, was knowingly a party to
the conduct of the Second
Defendant’s business as pleaded
above; and
11.3 In
the premise, First Defendant is personally liable to the Plaintiff in
the amount of
R1,488,937.22
(ONE
MILLION FOUR HUNDRED AND EIGHTY-EIGHT THOUSAND NINE HUNDRED AND
THIRTY SEVEN RAND AND TWENTY TWO CENTS)
.”
[5] The
purpose of the Plaintiff’s contemplated amendment is to make
the said paragraph of the POC
to now read as follows:
PARAGRAPH 4
“
4.
During or about June 2012, and at or near Centurion, the Plaintiff
duly represented by Nicky Smith and
the Defendant duly represented by
the First Defendant as its duly authorised representative entered
into an oral agreement the
relevant terms of which were:
4.1 That the
Plaintiff and the Second Defendant would procure the services of
EFLEX Technology (Pty) Ltd to develop
and manufacture Vision
Screeners;
4.2 That the
Second Defendant would be utilised to sell the Vision Screeners so
obtained;
4.3 That, for
every vision screener sold, after the deduction of manufacturing
costs owed to EFLEX, the Second
Defendant would be entitled to 63% of
the profits and the Plaintiff would receive 37% of the profits;
4.4 For all
Visions Screeners sold, the purchaser would pay the full purchase
price of the Vision Screeners to
the Second Defendant, who would in
turn transfer the 37% of the profits to the Plaintiff;
4.5 The Plaintiff
would invoice the Second Defendant per vision screener sold;
4.6 The Second
Defendant would pay the Plaintiff its 37% share of the profits within
30 (thirty) days from the
date of invoice of the Plaintiff;
4.7
That should the Second Defendant fail to make payment to the
Plaintiff of any amount due per invoice then
all amounts owed to the
Plaintiff would become immediately due and payable in full.
2.
BY THE DELETION OF PARAGRAPH 11 AND REPLACEMENT THEREOF WITH THE
FOLLOWING
:
11.
11.1
The First Defendant is the sole director of the Second Defendant;
11.2 The First Defendant, as
the sole director of the Second Defendant, was knowingly a party to
the contract in agreeing
the Second Defendant would make payment to
the Plaintiff and was complicit and a party to the conduct of the
Second Defendant in
breaching the agreement between the parties and
the Second Defendant’s refusal and/or failure to pay the
Plaintiff;
11.3 Such conduct of the
First Defendant constitutes a breach of his fiduciary duties as
director in acting recklessly and/or
negligently in conducting the
business of the Second Defendant at the time when services and goods
were rendered in terms of the
agreement in paragraph 4 supra.
11.3 In
the premises, the First Defendant is personally liable to the
Plaintiff, jointly and severally, with the Second Defendant,
in terms
of
s 218(2)
of the
Companies Act 71 of 2008
, in the sum of R1,488,
937.22 (ONE MILLION FOUR HUNDRED AND EIGHTY-EIGHT THOUAND NINE
HUNDRED AND THIRTY SEVENR AND AND TWENTY-TWO
CENTS).”
[6] In one
paragraph the Defendants have raised the following objection against
the aforementioned contemplated
amendments:
“
1.
The Plaintiff’s intended amendments to the particulars of claim
will, if amended, cause the particulars
of claim to be vague and
expiable (sic) (it should be excipiable) and we object to the
amendment made specifically with reference
to paragraph 11.3 as it
introduces a new cause of action.”
[7]
The Defendants’ opposing affidavit, deposed to by Attorney
Armand de Kock (“Mr de Kock”),
contains, as its ground of
objection to the intended amendments, the said single paragraph.
[8] At close
perusal of the objection shows that there are two grounds upon which
the ground of objection
is based:
8.1
the first ground, presumably raised against the whole intended
amendment; and
8.2
the second ground, that the amendment introduces a new cause of
action, is only against paragraph 11.3 of
the contemplated amendment.
EXPANSION OF THE GROUNDS OF
OBJECTION
[9]
In their opposing affidavit, the Defendants state that the Plaintiff
filed its first notice of intention
to amend (“the first notice
to amend”) on or about March 2020. The Defendants raised
an objection against that
notice of intention to amend. Later
during December 2020, the Plaintiff filed another notice of intention
to amend (“the
second notice of intention to amend”).
The purpose of the Plaintiff’s second notice to amend was an
attempt to
amend additional parts of the POC as compared to the first
notice of intention to amend. Again the Defendants objected to
the second notice to amend.
[10] It
is the Defendants’ case in the said opposing affidavit, that
quite clearly from the launch of the action,
the Plaintiff was
uncertain of the facts of the said verbal agreement between the
parties. According to the Defendants, that this
is so, is manifested
by the two notices to amend.
[11]
Furthermore, it is argued on behalf of the Defendants, that the
second notice to amend, was an attempt to amend
paragraph 4.2 of the
POC by
now
averring that according to the verbal agreement, the Second Defendant
did in fact not “service all of the vision screeners
sold”
but rather the Second Defendant would be “utilised to sell the
vision screeners so obtained”. The
Defendants’
complaint is that this creates a confusion as to the role and
responsibilities of the Second Defendant as a party
to the alleged
agreement and the nature of the agreement itself.
[12]
Before Court Adv LK van der Merwe (“Mr van der Merwe”),
for the Defendants, argued that when you compare
the current
paragraph 4 of the POC with the proposed amendment to paragraph 4,
one immediately realises that the current paragraph
4 of the
Plaintiff’s POC dealt with “service” and that the
proposed amendment to the POC deals with “sale”.
His further argument is that what the Plaintiff does by the amendment
of paragraph 4 is to replace one agreement with another.
The
debt that is owed and arising from “services” is
different from the debt that is owed and arising from “sales”.
[13] Finally, it was
argued on behalf of the Defendants that there exists a “bar”
to the introduction of
a new cause of action through paragraph 11.3
of the new amendment. In support of this argument, Mr van der
Merwe referred
the Court in his heads of argument to the unreported
judgment of
Papesch v Spanholtz (19183/2007)
[2017] ZAWCHC 121
in which the Court had the following to say:
“
37.
The suggestion by the Defendant that the claim in respect of the
water is not a new cause of action as it does not
raise a new cause
of action, but “merely alleges further acts of negligence”
upon which the Defendant intends to rely,
is unconvincing. The
alleged breach relied upon by the Defendant is clearly a separate
breach, and a separate and new cause
of action, with separate facts,
and separate damages. Moreover, the existing claims for damages
against the Plaintiff are
all premised on a breach of warranty,
whereas the current proposed claim is premised upon a negligent
misrepresentation and accordingly
a claim in delict and not upon a
breach of contract. Furthermore, the suggestion by the
Defendant that it relies on a further
act of negligence by the
Plaintiff for the proposed amendment is also unconvincing, as the
Defendant in the existing claim in the
reconvention does not rely
upon any claim based upon an “act of negligence”.”
[14] Adv van der Merwe
argued furthermore that the allegation that there was a breach of
fiduciary duty by the First
Defendant does not in itself find
application on any agreement upon which the Plaintiff relies but in
fact represents an alleged
judicial liability of the duty.
According to his argument, the allegations to be dealt with to
sustain a new cause of action
represent, in fact, “a separate
and new cause of action, with separate facts, and separate damages”.
He contends
that in this regard
s 77
of the
Companies Act 71 of 2008
would apply to the First Defendant in his capacity as the director of
the Second Defendant as follows:
“
2.
A director of a company may be held liable –
(a) in
accordance with the principles of the common law relating to breach
of a fiduciary duty, for any
loss, damages or costs sustained by the
company as a consequence of any breach by the director of a duty
contemplated in
s 75
,
76
(2) or
76
(3)(a) or (b); or
(b) in
accordance with the principles of the common
law relating to
delict for any loss, damages or costs sustained by the company as a
consequence of any breach by the director of
–
(i) a duty
contemplated in
s 76(3)(c)
;
(ii) any provision of
this act not otherwise mentioned in this section; or
(iii)
any provision of the company’s Memorandum of Incorporation.”
[15] He
then concluded by arguing that the aforegoing is sufficient proof
that the allegation put forward in the amendment
of paragraph 11.3 of
the POC constitutes an entirely new cause of action that will need to
be proven in a separate matter.
Furthermore, so argued Mr van
der Merwe, it also establishes a new claim for which the First
Defendant would be liable as the “breach
of fiduciary duty”
will constitute a piercing of the corporate veil, which represents a
totally separate cause of action
with its separate requirements.
[16]
Adv BD Stevens argument is that the proposed amendment to the POC
would not be prejudicial to the Defendants and
they will not be vague
and excipiable. I agree with this argument that a proposed
amendment will not in any way prejudice
the Defendants. This
Court has, in the first place, not been told that such an amendment
will prejudice the Defendants.
Secondly, this Court has not
been told that the Defendants have already pleaded to the POC of the
Plaintiff. Therefore, the
Defendants still have an opportunity
to plead to the Plaintiff’s POC. There exists for the
Defendants an opportunity
to answer to the Plaintiff’s amended
POC. They can, in their plea, either admit or deny or confess
and avoid all the
material allegations contained in the combined
summons including the contemplated amendment. In my view, the
Defendants can
therefore not be prejudiced by such an amendment.
He has argued furthermore that there is no “bar” under
the
present circumstances for the Plaintiff to seek to introduce a
new cause of action. It is correct.
[17] In order to succeed
with its application to amend its POC, the Plaintiff must satisfy the
following requirements:
17.1 that
the application for amendment is not
mala
fide
;
17.2 that such an amendment
would not cause an injustice to the Defendants which cannot be
compensated by an order of costs
in respect of such an amendment, in
other words, unless the parties cannot be put back, for the purposes
of justice, in the same
position as they were when the pleading which
is sought to be amended, was filed;
17.3 the
primary object of allowing an amendment is to obtain proper
ventilation of the dispute between the parties, to determine
the real
issues between them so that justice may be done.
[18] It is important to
note that according to the authors Herbstein & van Winsen, p.
290-292:
“
An
amendment cannot be had for the mere asking. Some explanation
must be offered as to why the amendment is required and if
the
application for amendment is timeously made some reasonably
satisfactory account must be given for the delay. Of course
if
the application to amend is mala fide or if the amendment causes an
injustice to the other side which cannot be compensated
by costs, or
in other words, if the parties cannot be put back for the purposes of
justice in the same position as they were in
when the pleading it is
sought to amend was filed, the application would not be granted.”
“
In
equal measures an objection to an amendment will most likely be
upheld if the objector or in casu, the Defendants, can prove
that:
1. the
amendment is mala fide;
2.
the amendment causes an injustice to them, that cannot be compensated
by an appropriate order of
costs; and
3.
the primary purpose of the amendment is not to obtain a proper
ventilation of the issues.”
[19]
Now, in his founding affidavit, David Craig Thompson, an attorney
employed and practising at Thompsons Attorneys
deposed to the
founding affidavit in the application for amendment. The said
attorneys have not offered any explanation why
it is necessary to
amend the particulars of claim. He has furnished no explanation
in the said affidavit why he has failed
to take the Court into its
confidence and to explain to the Court what actually necessitated the
need to amend the particulars
of claim. As long as the
Plaintiff satisfies the requirements for obtaining the order to
amend, the Court can condone failure
by the Plaintiff’s
attorneys to give a reasonable account for the need to amend its
particulars of claim or any pleading.
Accordingly, if the Court
is satisfied that the application for amendment is not mala fide;
that the other party will not be prejudiced
by the granting of the
order to amend, or if such an order can be counterbalanced by an
appropriate order of costs and if the Court
is satisfied with the
genuineness of the amendment, the Court may condone the failure by
the Applicant to explain the need for
the amendment.
[20]
20.1 In the first place, the
rules of Court contain the elementary principles of pleading.
Wessels J, as he then was,
explained these general principles of
pleading in
Benson and Simpson v Robinson
1917 WLD 126
at p. 130
:
“
The
plaintiff must not set out the evidence upon which he relies, but he
must state clearly and concisely on what facts he bases
his claim and
he must do so with such exactness that the defendant will know the
nature of the facts which are to be proved against
him so that he may
adequately meet him in Court and tender evidence to disprove the
plaintiff’s allegations.”
20.2 Rule 18(4) of the Uniform
Rules of Court provides that:
“
Every
pleading shall contain a clear and concise statement of the material
facts upon which the pleader relies for his claim, defence
or answer
to any pleading, as the case may be, with sufficient particularity to
enable the opposite party to reply thereto.”
20.3 The
Plaintiff’s claim must therefore be framed in such a manner as
to enable the Defendant to know the exact case
he has to meet.
[21]
Accordingly, the primary purpose of the Plaintiff’s amendment
is to set out the real issues between the Plaintiff
and the Defendant
so that justice may be done. In other words, the purpose of amending
paragraph 4 of the POC is to establish the
real issues in dispute
between the parties to purify the case so as to enable the Defendant
to identify the actual point in dispute.
An amendment should be
granted if its purpose leads to a proper ventilation of the issues.
See
Kasper
v André Kemp Boerdery CC
2012 (3) SA 20
WCC
.
A Court should, where the aim of the amendment is to put the parties
on an even keel as far as the grasping of the issues in dispute
is
concerned, be slow to refuse the application for amendment.
[22] It
is not the Defendant’s case that the Plaintiff’s intended
amendment is mala fide nor is it not designed
to clarify the issues
in dispute between the parties. It is furthermore not the Defendants’
case that, if granted, the amendment
will prejudice the Defendants.
The Defendants case is that, if granted, the amendment will be
excipiable.
[23] On
the other hand, Adv Stevens argued that the contemplated amendments
constitute the terms of the oral agreement
between the parties. He
contended that, in the circumstances, the Defendants have no valid
reason to object to the amendments.
In amending the POC, so argued Mr
Stevens, the Plaintiff is merely expanding what is already before the
Court.
[24]
Finally, on this point Adv Stevens argued strongly that the
Defendants’ objection is unsubstantiated in that
the Defendants
have not furnished any reason why they contend that the introduction
of an amendment will be excipiable and that
it will introduce a new
cause of action. For this reason, the objection should be dismissed,
so he argued. According to Adv Stevens,
the duty is on whoever
objects to a contemplated amendment, not only to raise an objection
but also to furnish reasons for such
an objection.
In
casu
,
the Defendants’ only have raised an objection but have failed
to support it with reasons. In the circumstances, the
objection
cannot be upheld.
[25] In the preceding
paragraph, I pointed out that Adv Stevens argued that the Defendants’
objection that the
amendment will establish a new cause of action has
no merit. His approach was that it did not matter whether it was a
new cause
of action or not. If the Defendants want to raise a
special plea they can do so. Adv Stevens seemed to overlook the fact
that if the grounds of objections are appropriate to an exception,
which in my view they are, the application is dealt with as if
it is
an exception. The reason for doing so is that to allow an amendment
with the full knowledge that the Defendant will meet
it with an
exception does not make much sense. See in this regard
Manyatshe v South African Post Office Ltd
[2008] ZAGPHC 253
;
[2008] (4) ALL SA 458
(T)
. In
De Klerk & Another v Du Plessis & Others
1995 (2) SA 40
(TPD)
the Court had the following to say in this
regard:
“
Whether
a pleading would or would not be excipiable is a matter of law which
should be decided by the Court hearing the application
for
amendment. It would be incorrect, in my view, to hold that it
is arguable that the amendment would not render the pleading
excipiable, allow it, and send the parties away to prepare another
battle on exception on the same point.”
[26]
His view is that the amendment of paragraph 11.3 of the POC does not
introduce a new cause of action. It
is merely an expansion of
what is already before the Court. I am of the view that the
position is different here, that there
is no introduction of a new
cause of action, and that the amendment of paragraph 11.3 merely
amounts to a clarification of a step
in the proceedings which has
insufficiently or ineffectively set out the cause of action that
throughout has been relied on by
the Plaintiff.
[27]
Counsel for the Plaintiff argued that at any rate there is no “bar”
under the present circumstances
for the Plaintiff to seek to
introduce a new cause of action. According to him, there can be no
prejudice to the Defendant in this
regard because the Defendants
still have an opportunity to plead to the amendment and to defend
their plea at trial. I agree with
him in this regard.
[28] I would follow the
general approach of the Courts in this country which has always been
to allow amendments where
this could be done without prejudice to the
other party. The judgment of
Moolman v Estate Moolman &
Another
1927 CPD 27
by Watermeyer J sets out the said general
approach 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 is sought to be amended
was filed.”
In this Division, which at a time was
called the Transvaal Provincial Division, Wessels J, as he then was,
adopted the same approach
in the judgment of
McDuff and Co (in
liquidation) v Johannesburg Consolidated Investments Co Ltd
1923 TPD
309
. He stated as follows:
“
My
practice has always been to give leave to amend unless I have been
satisfy that the party applying was acting mala fide, so that
by his
blunder he had done some injury to his opponent which could not be
compensated for by costs or otherwise.”
And he continued as follows at p. 310:
“
However,
a neglectful or careless may have been the first omission and however
late the proposed amendment, the amendment should
be allowed if it
can be made without injustice to the other side; there is no
injustice if the other side can be compensated by
costs.”
[29] In the premises, the
objection is overruled and the following order is hereby made:
1.
The application for amendment is hereby granted.
2.
The Applicant is hereby granted leave to amend its particulars of
claim in accordance with the
Notice Of Intention To Amend dated 2
December 2019.
3.
The Respondents are hereby ordered to pay the costs of this
application.
PM
MABUSE
JUDGE
OF THE HIGH COURT
Appearances
:
Counsel
for the Plaintiff/Applicant:
Adv BD Stevens
Instructed
by:
Thompson Attorneys
c/o Hack Stupel &
Ross
Counsel
for the First and Second Defendants/Respondents: Adv LK van der Merwe
Instructed
by:
Cawood Attorneys
Date
on the opposed roll before Mabuse J:
26 May 2021
Date
of Judgment:
1 June 2021