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[2018] ZAFSHC 48
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Cem Brick Manufactures CC v HOD: Department of Human Settlements Free State Province and Another (3362/2013) [2018] ZAFSHC 48 (3 May 2018)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 3362/2013
In
the matter between:
CEM
BRICK MANUFATURES CC
Plaintiff
and
THE
HOD: DEPARTMENT OF HUMAN SETTLEMENTS
1
ST
Defendant
FREE
STATE PROVINCE
ZIMVO
TRADING CC
2
ND
Defendant
CORAM:
MHLAMBI J,
HEARD
ON:
19 APRIL 2018
DELIVERED
ON:
03
MAY 2018
MHLAMBI,
J
[1]
The plaintiff, as cessionary of certain claims based on contracts
entered into between the second defendant and the first defendant
and
which were ceded to it by the second defendant, instituted
action against the first defendant. In terms of these contracts,
the
second defendant had to construct a number of houses for certain
municipalities under the jurisdiction of the first defendant.
The
plaintiff supplied the bricks and building material.
[2]
The initial summons was amended to replace the HOD (head of the
department) with the MEC (member of the executive council) as
required by the provisions of the State Liability Act (SLA). The
first defendant filed a special plea to the plaintiff’s
amended
summons alleging that the plaintiff’s claim had prescribed due
to the effluxion of time. The centre piece of the
determination of
the Special Plea hinges on the interpretation of the provisions of
section 2(1) of the SLA and section 15(1) of
the Prescription Act.
[3]
The first defendant, relying on section 2 of the SLA, contended that
the said section was obligatory and required that any proceedings
taken against any department, must be instituted against the
executive authority of such department and the executive authority
of
such department must be cited as the nominal defendant.
Non-compliance with an obligatory statutory prescript is a nullity or
legally ineffective. In elucidation and expansion of this submission,
the counsel orally argued that the fact that the MEC and
the HOD
shared the same wing (though opposite to each other) in the same
building occupied by the Department of Human Settlement,
Free State
Province, was very important as an indication of the two positions
being separate entities, occupied by two individuals
with separate
identities. Consequently, this differentiation affected the validity
of any process/ proceedings against the department
if the service was
effected on the department citing the HOD as nominal defendant and
not the MEC.
[4]
As no legislation empowered the HOD of a department to institute
proceedings or that the proceedings could be instituted against
an
HOD on behalf of the department, the amended summons, substituting
the HOD with the MEC three years after the debt arose and
was due,
was legally ineffective and did not interrupt prescription as set out
in
section 15(1)
of the
Prescription Act, 68 of 1969
. Any amendment
should have been done before prescription occurred.
[5]
In the light of the above reasoning and the conclusions arrived at by
the first defendant hereunder by the first defendant,
it was
submitted on its behalf that the plaintiff’s claim
had prescribed in terms of
section 11(d)
of the
Prescription Act:
“
5.1 Citing
the HOD of the Department, as defendant, contrary to the obligation
prescription of
section 2(1)
and
2
(2) of the
State Liability Act, 20
of 1957
is an effective legal process for purposes of the
Prescription Act, 68 of 1969
;
5.2 Nor
was the said process served on the MEC: Department of Human
Settlement, Free State Province;
5.3
Nor was there any contractual nexus or a debtor/creditor relationship
between plaintiff and the HOD: Department
of Human Settlement;
5.4
All the documents relied on indicated the HOD as a representative and
agent, not as principal. The action
could not be instituted against
an agent.
[6]
The plaintiff’s counsel urged me to follow the decision by
Jordaan, J in the application for the amendment of the pleadings
and
that all the issues raised by the first defendant were dealt with
therein. The mandatory thrust of
section 2
of the SLA was aimed at
the citation of the nominal defendant and did not affect the status
of the defendant as a debtor as required
by
section 15(1)
of the
Prescription Act. If
the HOD was a different party, neither a notice
of withdrawal was filed by the HOD nor a substitution by the MEC. I
was urged to
follow this decision unless I was convinced that it was
wrong.
[7]
The original summons was served on the HOD on 26 August 2013. The
amended particulars of claim were delivered on 6 February
2017 and
the first defendant’s amended plea was filed on 12 April 2017.
The first defendant submitted in its heads that according
to
paragraph 7 of the particulars of claim, the first debt of the first
claim arose in December 2011 and the debt of the second
claim arose
on 11 November 2011. Any amendment should have been done before
prescription occurred.
[8]
In granting the application for the amendment of the pleadings,
Jordaan, J said the following on page 11 of the judgment:
“
The
crux of the question is therefore, whether the intended amendment
seeks to introduce a new entity as defendant or merely seeks
to
introduced a new entity as defendant or merely seeks to rectify an
incorrect citation of the same entity and defendant.
1.
To
my mind, it is clear that the claim was not instituted against the
HOD in his personal capacity, but as representative of the
relevant
department.
2.
It
was understood as such, by the first respondent, as appears from the
allegations in the plea that I have referred to.
3.
It
is not disputed that the service was effected at the address of the
relevant department, although referring to the HOD instead
of the
MEC.
4.
Both
the first and third respondents are represented by the same State
attorney.
5.
The
Department was aware of all the substantial elements of the claim
from the outset.
I
am convinced that the amendments do not constitute a substitution of
one entity with another. It only seeks to rectify an incorrect
citation of the same department. In the result the service of the
summons was effective in interrupting prescription and allowing
the
amendments will not be prejudicial to the first and third
respondent.”
[9]
I was referred to various decisions in support of the granting of the
special plea, most of which were dealt with in the application
for
the amendment as having been irrelevant to the matter at hand. In
conclusion I was referred by Mr Claassen, on behalf of the
first
defendant, to a quotation (by Mageza AJ in an earlier application in
the same matter) in paragraph 3 of the unreported decision
by Beshe J
in
THABO
MTHEMBU and MEMBER OF THE EXECUTIVE COUNCIL FOR EDUCATION, EASTERN
CAPE AND BUYISILE ZOKO CASE NUMBER 943/2007
which reads as follows:
“
It
is not difficult to imagine the position the Plaintiff must have
found itself in once it dawned on it that it no longer had recourse
as against the Minister of Education and prescription had possibly
set in. Undeterred by this development and in the best tradition
of
astute legal practitioner’s ability to find ways within the
Rules of Court, as opposed to commencing new proceeding against
the
correct organ of State- the MEC, an election to ‘substitute’
rather than to issue an serve new Summonses was made.”
[10]
The facts in that case are distinguishable from the present one. In
that case the Minister of Education was erroneously sued
instead of
the Member of the Executive Council for Education. The court did not
deal with the special plea of prescription but
upheld the special
plea relating to non-compliance with
section 3
of the Institution of
Legal Proceedings Against Certain Organs of State.
[11]
Section 15
of the
Prescription Act states
the following:
JUDICIAL
INTERRUPTION OF PRESCRIPTION.
(
1)
The running of prescription shall, subject to the provisions of
subsection (2), be interrupted by the service on the debtor of
any
process whereby the creditor claims payment of debt.
(2)
Unless the debtor acknowledges liability, the interruption of
prescription in terms of subsection (1) shall lapse, and the running
of prescription shall not be deemed to have judgment or the judgment
is set aside.
(
3)…………
(4)
…………
(5)
…………..
(6)
……….”
It
is common cause that the plaintiff is the creditor and the Department
of Human Settlements is the debtor. The written agreement
between the
department and the second defendant defines the department
as
“
the
Department of Human Settlements or any person authorised by Head of
the Department to act on its behalf”.
The
second defendant then ceded its right, title and interest in its
payment to the plaintiff. As correctly pointed out by Jordaan,
J that
the service of the summons was effected on the debtor and effectively
interrupted prescription.
[12]
The same argument raised in the previous application for amendment
was presented in this case as regards costs. No plausible
reason
exists in my view not to grant a similar order. I agree with the
reasons advanced that, even though the application
did
not involve complicated issues, the case in its entirety
justified the use of two counsel as it was obviously of
paramount
importance to the parties. I accede to the request that that the
costs of two counsel be allowed. I cannot find fault
with Jordaan,
J’s judgment more in particular in the conclusions arrived at
in respect of the authorities cited and that
prescription was
interrupted. I therefore agree with the decision made.
[13]
In the result, the following order is made:
The special plea is
dismissed with costs which costs shall include the employment of two
counsels.
_____________
MHLAMBI,
J
Counsel
for Applicant:
Adv Zietsman SC
Instructed
by:
Rossouws Attorney
119 Pres Reitz Avenue
Westdene
BLOEMFONTEIN
Counsel
for Respondents:
Adv JY Claasen SC
Adv Tsangarakis
Instructed
by:
Office of the State
Attorney
Fedsure Building
49 Charlotte Maxeke
Street
BLOEMFONTIEN