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[2021] ZAGPJHC 496
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Africa Wide Investments Holdings (Pty) Ltd v Migan Investments Holdings (Pty) Ltd (8279/2019) [2021] ZAGPJHC 496 (5 October 2021)
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 8279/2019
REPORTABLE:
YES
/ NO
OF
INTEREST TO OTHER JUDGES:
YES
/NO
REVISED.
05.10.2021
In
the matter between:
AFRICA
WIDE INVESTMENTS HOLDINGS (PTY) LTD
Plaintiff
and
MIGAN
INVESTMENTS HOLDINGS (PTY)
LTD
Defendant
JUDGMENT
CRUTCHFIELD
AJ:
[1]
The plaintiff, Africa Wide Investment
Holdings (Pty) Ltd, sought leave to amend its replication.
[2]
The defendant, Miganu Investment Holdings
(Pty) Ltd, objected to the plaintiff’s notice of intention to
amend dated 14 July
2020, and opposed this application for leave
to amend.
[3]
The defendant pleaded prescription to the
plaintiff’s claim. The plaintiff replicated and sought, in
terms of this application,
to amend that replication. The purpose of
the proposed amendment was to avoid the defendant’s plea of
prescription.
[4]
The defendant opposed the application for
leave to amend on the basis that if granted, the amended replication
would be excipiable.
[5]
Whilst the defendant’s notice of
objection did not record objections to paragraphs 1 to 4 and
paragraphs 5.1 to 5.6 of the
plaintiff’s notice of intention to
amend, the defendant argued that it objected to the amendment in its
entirety.
[6]
The
applicant relied on the test for leave to amend referred to in
Trans-Drakensberg
Bank Limited v Combined Engineering (Pty) Ltd,
[1]
to the effect that:
6.1
‘
The primary principle appears to be
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’.
[7]
In
general, amendments will be allowed unless the application to amend
is
mala
fide
or the amendment will cause an injustice to the opposing party that
cannot be compensated for by way of costs, or the parties cannot
be
returned to the position that they occupied when the pleading sought
to be amended was filed.
[2]
[8]
Stated
differently, a court’s power to allow material amendments is
limited only by considerations of prejudice or injustice
to the
opponent.
[3]
[9]
There was no suggestion in this matter that
the applicant was mala fide in pursuing the amendment or that the
parties could not
be returned to the positions they occupied prior to
delivery pf the notice of intention to amend.
[1]
The replication was delivered in June 2020,
notice of intention to amend on 14 July 2020 and a trial date
has not yet been
allocated. Thus, the notice of intention to amend
has not caused any material delay in the matter.
[2]
The
defendant objected to the amendment on the basis that if the
amendment was granted it would render the replication excipiable.
[4]
The defendant raised two broad grounds of objection.
[3]
Firstly,
that the plaintiff’s interpretation of the word ‘debtor’
conflicted with the plain meaning thereof and
could not be brought
within any reasonable interpretation of the word ‘debtor’
in section 13(1)(e) of the Prescription
Act;
[5]
3.1
That the amendment sought to pierce the
corporate veil; and
3.2
The amendment would require the court
hearing the trial to engage in an enquiry as to who controlled the
defendant’s board.
[4]
Secondly, the defendant alleged that the
plaintiff’s interpretation or reliance on the concepts of
fairness, justice and reasonableness
was incorrect in that:
4.1
Reliance thereon overlooked the plain
meaning of the text of the Prescription Act, and the word ‘debtor’
did not require
extraneous considerations of justice in respect of
determining its meaning;
4.2
The interests of justice could not override
Parliament’s express intention in terms of the statute;
4.3
The language of the statute conveyed what
the legislature considered in the circumstances and the courts could
not supplant parliament’s
intention by way of interpretation of
the statute; and
4.4
The interests of justice did not constitute
a defence to a plea of prescription when the meaning of the statute
is clear from the
text.
[5]
The plaintiff sought pursuant to s
13(1)(e) of the Prescription Act, (‘s 13(1)(e)’), to
plead an interruption of prescription.
Accordingly, the
interpretation of ‘debtor’ in the context of s 13(1)(e)
became relevant.
[6]
In short, s 13(1)(e) provides for the
interruption of prescription where the creditor, is a juristic
person, and the debtor is a
member of the governing body of the
juristic person. In the context of this matter, the plaintiff is the
creditor and the debtor
is the defendant.
[7]
The plaintiff, in terms of the proposed
amendment, seeks to allege that the defendant does not act
independently of one Mr M G Diliza
(‘Mr Diliza’), the
beneficiary of the plaintiff’s BEE scheme. Mr Diliza ia a
member of the plaintiff’s
governing body, and, according to the
plaintiff the controlling mind of the defendant.
[8]
The plaintiff relies for its interpretation
of ‘debtor’ in s 13(1)(e), to section 2 of the Companies
Act, 71 of 2008
(‘
Companies Act&rsquo
;),
section 2(1)(b)
of
which provides that:
(1)
‘for all purposes of this Act –
(b)
an individual is related to a juristic person if the individual
directly or indirectly controls the
juristic person, as determined in
accordance with subsection (2); …’
[9]
Section 2(2) provides that a person
controls a juristic person if inter alia, the juristic person is a
subsidiary of the first person,
or the first person together with a
related or interrelated person, is directly or indirectly in control
of the exercise of a majority
of the voting rights associated with
securities of the company, or is in control of the board.
[10]
Thus, the plaintiff argued that regard
being had to the relevant circumstances, the context and correct
facts of this matter and
on a proper interpretation of s 13(1)(e),
the word ‘debtor’ stands to be read so as to include ‘the
person who
directly and/or indirectly controls the debtor’ in
terms of
s 2(2)
of the
Companies Act.
[11
]
Furthermore, the plaintiff contended that
it would be contrary to public policy to permit the defendant to rely
on the statutory
prescript, prescription, to avoid the consequences
of his conduct and the relief sought by the plaintiff, whilst
simultaneously
refusing the plaintiff an opportunity to plead an
amendment that would, if proved at trial, permit of a defence to the
plea of
prescription.
[12]
In addition, that it would defeat the
purpose of
s 13(1)(e)
to permit the defendant to succeed on the
defence of prescription.
[13]
The defendant argued, with reference
to
s 2(2)
of the
Companies Act, that
the defendant was the ‘debtor’,
a corporate entity that was not a member of the plaintiff’s
board. Mr Deliza
was not the ‘debtor’ and
s 13(1)(e)
did
not apply to the plaintiff’s proposed pleaded facts.
Accordingly, the defendant contended that the amendment was
excipiable.
[14]
Moreover, the ‘reading in’
relied on by the plaintiff was contrary, according to the defendant,
to the plain language
of the statutory provision, expanded the
meaning thereof and was contrary to a contextual interpretation of
the provision.
[15]
The
defendant referred to the
National
Coalition
[6]
where the Constitutional Court held that:
‘
In
deciding to read words into a statute, a court should also bear in
mind that it will not be appropriate to read words in, unless
in so
doing a court can define with sufficient precision how a statute
ought to be extended in order to comply with the Constitution.’
[16]
As
regards the plaintiff’s reliance on the constitutional values
of fairness, justice and reasonableness and the defendant’s
opposition thereto, the Constitutional Court in
Links
[7]
stated in respect of s 12(3) of the Prescription Act, the following:
‘
The
provisions of section 12 seek to strike a fair balance between, on
the one hand, the need for a cut-off point beyond which a
person who
has a claim to pursue against another may not do so after the lapse
of a certain period of time if he or she has failed
to act diligently
and on the other the need to ensure fairness in those cases in which
a rigid application of prescription legislation
would result in
injustice as already stated, in interpreting section 12(3) the
injunction in section 39(2) of the Constitution
must be borne in
mind’.
[17]
Section
39(2) of the Constitution
[8]
directs that when legislation is interpreted, the result must be a
construction that promotes ‘the spirit, purport and object
of
the Bill of Rights’. Accordingly, our courts must seek when
interpreting legislation, to afford an interpretation that
is
consistent with the Bill of Rights.
[9]
[18]
Akin to
Links,
the focus of this matter falls on the
right in terms of s 34 of the Constitution, the right of access to
courts.
[19]
The
interpretation and meaning that this Court applies to the word
‘debtor’ in s 13(1)(e) may have the effect of preventing
the plaintiff from raising the dispute in a court and thereby prevent
the parties from resolving the issues before a court. Such
an outcome
would serve to limit the plaintiff’s right of access in terms
of s 34 of the Constitution
[10]
and violate the injunction in s 39(2).
[20]
The plaintiff contends for an extended
meaning of ‘debtor’ in terms of
s 2(2)
of the
Companies
Act.
[21
]
The Prescription Act predates the
Constitution. The legislature did not provide for a definition of the
word ‘debtor’
in terms of the Prescription Act.
[22]
The interpretation of statutes under our
constitutional dispensation is purposive and not literal as contended
for by the defendant.
[23]
The
defendant’s approach to the proposed amendment constrained it
to avoid the recent cases dealing with the interpretation
of
documents be they statutes, contracts or other documentary forms,
commencing with
Natal
Joint Municipal Pension Fund v Endumeni Municipality.
[11]
[24]
The
interpretation of statutes turns on the language used in the
provision regard being had to the rules of grammar and syntax,
the
context of the provision, the purpose to which it is directed and the
material known to those responsible for its production.
[12]
[25]
The
context of a statute or a provision in a statute may be relevant.
[13]
The nature of the concern sought to be addressed in a statute, the
areas to which the statute relates, thus providing the context
for
the legislation, mean that context is important in construing
statutes. The context of section 13(1)(e) in relation to section
34
and section 39(2) of the Constitution, is an important factor in this
matter.
[14]
[26]
The purpose of section 13(1)(e) is to delay
the completion of prescription in the circumstances provided for in
the section. Accordingly,
the purpose of the provision is to limit
the operation of prescription by carving out circumstances to which
prescription will
not apply.
[27]
An approach that focuses on the
parties s 34 rights will seek to afford the plaintiff, in fact both
parties, an opportunity to invoke
the carve out in s 13(1)(e), by way
of permitting the amendment.
[28]
The relevant material facts, in the main,
are pleaded in the existing pleadings. These include that the
defendant’s chairman,
Mr Diliza, is a director of the plaintiff
and the chairman of the defendant
inter
alia
.
[29]
The plaintiff, in terms of the proposed
amendment, seeks to include facts that will demonstrate that Mr
Diliza controls the defendant
as envisaged in terms of
s 2(2)
of the
Companies Act, namely
, controls the defendant’s board, the
voting rights and shares of the defendant to the extent that the
defendant does not
function independently of Mr Diliza, a member of
the plaintiff’s board.
[30]
The
fact that the amendment, if allowed, will serve to enlarge the issues
for purposes of the trial action, is not a reason to refuse
the
amendment.
[15]
[31]
Whilst the amendment will not serve to
pierce the corporate veil as alleged by the defendant in its
objection, that would not be
a basis upon which to deny the
amendment.
[32]
The Constitutional Court gave meaning to
the words of section 12(3) of the Prescription Act, with reference to
constitutional values.
It follows that an approach to section
13(1)(e) that refers to Constitutional values should ensue,
notwithstanding the literal
meaning of the text.
[33]
In the circumstances, the parties’ s
34 rights should be considered, if not prevail, and ‘debtor’
ought to be
interpreted in a manner that serves to give effect to the
rights enshrined in s 34. That entails permitting the amendment in
order
for the parties to proceed to trial in respect of the true
dispute between them.
[34]
Section
13(1)(e) entails a delay in the commencement of prescription. In
giving effect to the provision, a court thereby gives effect
to s 34
of the Constitution. Insofar as a confined interpretation of ‘debtor’
as sought by the defendant would exclude
the operation of section
13(1)(e) and confine the parties or limit their s 34 rights, contrary
to the injunction in s 39(2), such
an interpretation should not
prevail. An interpretation that is the ‘least intrusive’
should prevail.
[16]
[35]
An approach that permits the amendment will
afford the trial court an opportunity to consider the interpretation
and application
of ‘debtor’ in the context of s 13(1)(e)
and the facts and circumstances relied upon by the plaintiff.
Furthermore,
the amendment will permit the ventilation of the true
dispute between the parties.
[36]
Considerations of prejudice or injustice to
the defendant do not arise in this matter.
[37]
Accordingly, the interests of justice will
be served by the granting of the amendment and I intend to grant an
order in those terms.
[38]
There is no reason for the costs of this
application not to follow the outcome in respect of the merits.
[39]
By virtue of the abovementioned, I grant
the following order:
1.
The plaintiff is granted leave to amend its
replication in terms of the plaintiff’s notice of intention to
amend: replication
dated 14 July 2020.
2.
The defendant is ordered to pay the costs
of the application for leave to amend.
A
A CRUTCHFIELD SC
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION
JOHANNESBURG
Electronically
submitted therefore unsigned
Delivered:
This judgment was prepared and authored by the Acting Judge whose
name is reflected and is handed down electronically
by circulation to
the Parties / their legal representatives by email and by uploading
it to the electronic file of this matter
on CaseLines. The date of
the judgment is deemed to be 5 October 2021.
COUNSEL
FOR THE PLAINTIFF:
Mr P C Carstensen SC
INSTRUCTED
BY: Tshisevhe Gwina Ratshimbilani Inc
COUNSEL
FOR DEFENDANT: Mr L J Morison SC & Mr G Ngcangisa
INSTRUCTED
BY: Glen Marais Inc
DATE
OF THE HEARING: 26 July 2021
DATE
OF JUDGMENT: 5 October 2021
[1]
Trans-Drakensberg
Bank Limited v Combined Engineering (Pty) Ltd
1967
(3) SA 632
(D) 638A;
Commercial
Union Assurance Co Ltd v Waymark NO
1995
(2) SA 73
(TK) at 77;
Affordable
Medicines Trust v Minister of Health
[2005] ZACC 3
;
2006
(3) SA 247
(CC) at 261;
Blaauwberg
Meat Wholesalers CC v Anglo Dutch Meats (Exports) Ltd
[2004]
1 All SA 129
(SCA) at 133.
[2]
Moolman
v Estate Moolman
1927
CPD 27
at 29.
[3]
Devonia
Shipping Ltd v MV Luis (Yeoman Shipping Co Ltd intervening
)
1994 (2) SA 363
(C) at 369G.
[4]
Ilima
Project (Pty) Ltd (in liquidation) v MEC: Public Transport, Roads
and Works & Another
(25981/2011)
[2019] ZAGPJHC 71 (12 March 2019) para 10.
[5]
Prescription
Act, 68 of 1969 (‘the
Prescription Act&rsquo
;)
[6]
National
Coalition for Gay and Lesbian Equality v Minister of Home Affairs
2000
[2] SA1 (CC) para 75 (‘
National
Coalition’
).
[7]
Links
v Department of Health, Northern [Cape] Province
2016
(4) SA 414
(CC) para 26 (‘
Links
’).
[8]
The
Constitution of the Republic of South Africa, 1996.
[9]
Independent
Institute of Education (Pty) Ltd v KwaZulu-Natal Law Society &
Others
[2019]
ZACC 47.
[10]
Links
note
7 above para 22.
[11]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA) para 18.
[12]
Motloung
& Another v Sheriff, Pretoria East & Others
2020
(5) SA 123
(SCA);
Telkom
SA SOC Ltd v Commissioner, South African Revenue Service
2020
(4) SA 480 (SCA).
[13]
Telkom
footnote
14.
[14]
Commissioner,
South African Revenue Services v United Manganese With Kalahari
(Pty) Ltd
2020
(4) SA 428 (SCA).
[15]
Trans-Drakensberg
note
1 above 638A;
Myers
v Abrahamson
1951
(3) SA 438
(C) 450A.
[16]
Makate
v Vodacom (Pty) Ltd
2016
(4) SA 121
(CC);
Off-beat
Holiday Club & Another v Sanboni Holiday Spa Shareblock Limited
& Others
2017
(5) SA 9
(CC).