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[2016] ZAGPPHC 165
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Jeewan v Transnet Ltd and Another (6258/2015) [2016] ZAGPPHC 165 (29 March 2016)
IN
THE HIGH
COURT OF SOUTH AFRICA
GAUTENG
DIVISION,
PRETORIA
DATE:
29/3/2016
CASE
NO:
6258/2015
DATE
OF
HEARING: DECEMBER 2015
Not
reportable
Not
of interest to other judges
In
the matter between:
SANOJ
JEEWAN
Applicant/Plaintiff
and
TRANSNET
LTD
First Respondent/First Defendant
ERNST
&
YOUNG
Second Respondent/Second Defendant
J
U D
G M E N
T
OLIVIER,
AJ
[1]
This is an application by the plaintiff in the main action for leave
to amend his particulars of claim in terms of Rule 28 of
the Uniform
Rules of Court. The first defendant has no objection, but the second
defendant raises six grounds of exception against
the notice of
amendment.
[2]
The plaintiff is Sanoj (a k a Mark) Jeewan, an adult male person. The
first defendant is Transnet Limited, a public company.
The second
defendant is Ernst & Young, a professional services firm that
provides a range of services in different industries.
[3]
The plaintiff appeared in person. The second defendant was
represented by counsel. The first defendant did not participate in
the proceedings, but the proceedings were observed by its counsel.
[4]
The plaintiff is a former employee of the first defendant. He was
found guilty of misconduct, resulting in his dismissal from
the first
defendant. The plaintiff then referred the matter to the Transnet
Bargaining Council, but he was unsuccessful. The second
defendant had
been retained by first defendant to conduct a forensic investigation
of the alleged misconduct of the plaintiff.
[5]
The plaintiff subsequently instituted action against the defendants,
claiming damages.
The
legal principles
relating to amendments
and exceptions
[6]
The general principles in respect of amendments are well established.
Rule 28 of the Uniform Rules of Court allows amendments
to be made.
They can be made with the consent of the opposing parties. However,
when an opposing party notes a proper objection,
the party wanting to
make the amendment must approach the court for leave to amend.
[7]
It will suffice if the Plaintiff demonstrates that the proposed
amendment is deserving of consideration and introduces a triable
issue. In the words of Carvey J in
Trans-Drakensberg
Bank
Ltd (Under Judicial
Management)
v Combined
Engineering
(Pty) Ltd and Another
1967
(3)
SA
632
(D)
at 641A:
Having
already made his case in his pleadings, 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 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."
[8]
The court has a discretion to refuse or grant the amendment, which
must be exercised judicially. Applications for amendments
are
generally granted, with the exception where the opposing party will
be prejudiced or where the amendment is mala tides. A court
must not
adopt an over-technical approach. Telemetric v Advertising Standards
Authority South Africa
2006 (1) SA 461
(SCA):
Exceptions
should be dealt with sensibly. They provide a useful mechanism, to
weed out cases without legal merit. An over-technical
approach
destroys their utility.
[9]
If an amendment is excipiable, it will not be allowed unless
exceptional circumstances exist. See
Cross
v
Ferreira
1950
(3)
SA
443
(C):
[S]ave
in exceptional cases where the balance of convenience or some such
reason might render another course desirable, an amendment
ought not
to be allowed where its introduction into the pleading would render
such pleading excepiable. Indeed these cases appear
to me to
constitute specific illustrations of the general rule that amendments
which would prejudice the opposing party ought not
to be allowed."
[10]
Herbstein & Van Winsen in
Civil Practice of the High Court
5th
Edition at page 683 write as follows on the aspect of excipiability
of the amendment:
An
amendment should be refused on the ground of excipiability only if it
is clear that the amended pleading will (not may) be excipiable
(see
Krische v Road Accident Fund
2004 (4) SA 358
(W). If the
excipiability of the pleading is merely arguable or can be cured by
the furnishing of particulars then it is
proper to grant the
amendment where the other considerations are favourable. It will be
left to the aggrieved party to nfile exception
if he so wishes.
[11]
Any party seeking an amendment must provide the court with a
reasonable explanation for the proposed amendment. The party wanting
to make the amendment bears an onus to show that the opposing party
will not suffer prejudice as a result of the amendment. Prejudice
would essentially result where the opposing party cannot be put in
the same position he was in before the amendments were made.
Sometimes prejudice can be cured by an appropriate cost order or a
postponement.
[12]
An exception that a pleading is vague and embarrassing can only be
taken when the vagueness and embarrassment strikes at the
root of the
cause of action as pleaded. It is a general rule that an exception on
the basis that a pleading is vague and embarrassing
will not be
allowed unless the excipient will be seriously prejudiced if the
offending allegation will not be expunged. The onus
is on the
excipient to the show both vagueness amounting to embarrassment and
embarrassment amounting to prejudice. There are two
considerations:
does the pleading lack sufficient particularity to the extent that it
is vague; and does this vagueness cause embarrassment
of such a
nature as would cause prejudice to the excipient?
[13]
The reason given by the plaintiff for the amendment is that his main
pleadings were poorly drafted as he had no legal assistance.
He made
the amendments in order to comply with rule 18(4) by removing
opinions and so on. The essence of his case is that there
is
sufficient information available to the second defendant to allow it
to plead.
[14]
The second defendant attacks the whole of the amendment, arguing that
it is excipiable on six grounds. I will deal first with
the two
exceptions which raise issues of law - grounds 3 and 6.
Ground
3: The existence of a fiduciary duty
[15]
The plaintiff claims the existence of a fiduciary relationship
between himself and the second defendant. He argues that he
was a
stakeholder in the function performed by the second defendant and
that he had placed trust and confidence in it, and that
the second
defendant had undertaken to uphold his confidence and trust. He
refers to the Global Code of Conduct of the second defendant
to
support further his argument:
EY
is committed to doing its part in building a better world. Our global
Code of Conduct and our values underpin this purpose. They
represent
our commitment to all our stakeholders that we understand the
confidence that they place in us to deliver quality in
everything we
do.
He
refers to other codes of conduct and ethics too, as well as the most
recent King report on corporate governance (King Ill), which
refers
to an employee as a stakeholder. The plaintiff contends that this
applied to him, especially during the conduct of the investigation.
[16]
He argues that by extension the second defendant owed him a fiduciary
duty. The internal auditing function of the first defendant
had been
outsourced to the second defendant. Had it remained 'in house' the
first defendant would have owed the plaintiff a fiduciary
duty or at
least a duty of care during the forensic investigation. The transfer
of this function did not erase this duty.
[17]
The plaintiff argues that this is a matter to be decided at the trial
but second defendant disagrees. The second defendant
asserts that the
plaintiff's claim is bad in law, alternatively vague as no material
facts on which the plaintiff bases his contention
that a fiduciary
duty exists, have been pleaded.
[18]
The second defendant argues that no relationship exists between the
plaintiff and the second defendant which could give rise
to a
fiduciary duty. There exists no contractual relationship between the
plaintiff and the second defendant. On the plaintiff's
own version
the second defendant is an independent third party. The second
defendant was retained by the first defendant to conduct
a forensic
investigation of the alleged misconduct of the plaintiff. Under such
circumstances, how could it be said to owe a fiduciary
duty to the
plaintiff? The existence of such a duty would mean that the second
defendant is subordinate to the plaintiff. There
is no identity of
interest between the two parties. In fact the investigator's interest
is possibly in conflict with that of the
party being investigated.
[19]
The nature of a fiduciary relationship was described as follows in
the classic case of
Robinson
v
Randfontein
Estates
Gold
Mining
Co Ltd
1921
AD 168
(at 177-8):
Where
one man stands to another in a position of confidence involving a
duty to protect the interests of that other, he is not allowed
to
make a secret profit at the other's expense or place himself in a
position where his interests conflict with his duty. The principle
underlies an extensive field of legal relationship. A guardian
to his ward, a solicitor to his client, an agent to his principal,
afford examples of persons occupying such a position.
From
this the element of trust emerges as a primary consideration. There
also needs to be a legal relationship present.
[20]
There is no closed list of fiduciary relationships and the court
needs to consider the circumstances of a particular case to
determine
whether a fiduciary relationship exists. See
Volvo (Southern
Africa)
(Pty) Ltd v Yssel
2009 (6) SA 531
(SCA)
at par 16.
[21]
There are principles and guidelines to assist the court in making
this determination - for example, although agency is not
a necessary
element of a fiduciary relationship, the fact that agency exists will
almost always give an indication of such a relationship.
See
Phillips
v
Fieldstone
Africa
(Pty)
Ltd and Another
2004
(3)
SA 465
(SCA)
par 27.
[22]
However, there can be no single test. In
Volvo
par 17 the SCA quoted with approval from the Australian case
of
Hospital Products Limited v
United
States Surgical Corporation
[1984] HCA 64
;
(1984) 156 CLR
41
(HC of
A)
69:
I
doubt if it is fruitful to attempt to make a general statement of the
circumstances in which a fiduciary relationship will be
found to
exist. Fiduciary relations are of different types, carrying different
obligations
...
and a test which might seem appropriate to determine whether a
fiduciary relationship existed for one purpose might be quite
inappropriate for another purpose.
[23]
In my view the essence of a fiduciary relationship lies in the
element of trust and reliance of one party on the other in some
or
other way. One party puts the interests of the other party above his
own whenever conflict or the possibility of conflict arose.
See
generally
Phillips paras 37-8.
[24]
The plaintiff and the second defendant were not in any relationship
of confidence, or trust where it could be said that there
was
reliance of the one on the other. In fact there was no contract or
legal relationship of any kind between the plaintiff and
the second
defendant. The only connection between the plaintiff and the second
defendant was that the first defendant had contracted
the second
defendant to investigate the plaintiff's alleged misconduct.
[25]
The second defendant's primary duty was to the first defendant in
terms of its contract with the first defendant. The second
defendant
stood in no position of trust towards the plaintiff and was under no
specific obligation to act in the interests of the
plaintiff. In
fact, such a duty would be in conflict with the second defendant's
contractual obligations towards the first defendant.
[26]
The fact that the plaintiff cooperated with the investigation or
presented him with his bank statements does not establish
a fiduciary
relationship between them. Therefore, in my view no fiduciary
relationship existed between the plaintiff and the second
defendant.
The amendment is bad in law. The exception succeeds.
Ground
6:
The existence of
a legitimate
expectation
[27]
The plaintiff argues that he had a legitimate expectation that the
second defendant would act lawfully, with professional integrity
and
objectively. He argues that the second defendant had a duty to
conduct the investigation in accordance with all applicable
laws,
regulations and standards. According to the King Ill report, an
interest or expectation of a stakeholder is considered to
be
legitimate if a reasonable and informed outsider would conclude it to
be valid and justifiable on a legal, moral or ethical
basis in the
circumstances.
[28]
The second defendant argues that the plaintiff's claim is bad in law
because a legitimate expectation only relates to a hearing
before an
adverse decision is taken, as determined in
Duncan
v
Minister
of
Environmental
Affairs
and
Tourism and Another
2010 (6) SA 374
(SCA).
In other
words, there can only be a legitimate expectation of procedural
fairness - not of a substantive right.
[29]
It is correct that in performing its investigations the second
defendant must act in accordance with its Global Code of Conduct.
But
whether this code creates a legitimate expectation founded in law is
doubtful.
[30]
However, I cannot say so with absolute certainty. I am of the view
that this particular point needs to be argued at trial,
where the
judge would have the benefit of full argument.
Ground
1: invalid and
unlawful
appointment
of chairperson
[31]
The plaintiff contends that the appointment of the chairperson of the
disciplinary proceedings against him was unlawful and
invalid. He
relies on the Transnet Disciplinary Code and Procedures, specifically
clauses 4.2 and 5.1. The plaintiff contends that
this point is at
least arguable and should be left to the trial court to decide.
[32]
The second defendant argues that the Code does not support the
plaintitrs claim. There is an incompatibility between the amendment
and the Code, as the Code does not disallow the appointment of an
external chairperson. Therefore, there is no basis for the
allegation.
[33]
The plaintiff argues that this amendment relates solely to the first
defendant, and that it is not central to his case. As
a result, the
second defendant is not required to plead thereto "with any
degree of substance".
[34]
The second defendant claims that it cannot plead. The amendment is
vague as the second defendant has to speculate about the
basis of
para 3.8.2 and how it is supported by the Code. Pleading to it would
cause embarrassment. Alternatively, it fails to disclose
a cause of
action.
[35]
I do not consider this amendment to be vague. The second defendant is
in a position to plead. The exception on this ground
is dismissed.
Ground
2: exculpatory
evidence
withheld
[36]
The plaintiff alleges that exculpatory evidence was withheld from him
by the second defendant. The second defendant argues
that the
plaintiff has failed to disclose the material facts on which his
claims and allegations are based. For example, what is
the nature of
the evidence; where does this evidence emanate from; who on behalf of
the second defendant had withheld the evidence?
It therefore objects
on the basis that the amendment is vague and embarrassing.
[37]
In his replying affidavit the plaintiff gave more detail on this. He
says that this has removed the cause of the complaint.
This, second
defendant argues, constitutes a concession by the plaintiff that his
amendment lacked particularity and that the objection
raised by the
second defendant was valid. This makes the objections common cause
and should result in the refusal of the objection.
However, the
particularity was provided in a replying affidavit and not in the
pleadings.
[38]
Despite the greater particularity provided subsequently, the second
respondent maintains that the amendment is vague.
[39]
The argument above applies equally to the fifth ground on the quantum
of damages, says the second defendant.
[40]
Despite the clarification being given only in the replying affidavit,
I consider the additional information to have removed
any possible
vagueness. As explained above, an over-technical approach should not
be adopted. I do not think the second respondent
will suffer any
serious prejudice.
Ground
4:
allegations
against
Du
Toit
[41]
Serious allegations of tampering with meeting transcripts, failure to
give the plaintiff an opportunity to respond to the preliminary
findings, and attempting to extort payment are made by the plaintiff.
The second defendant questions how any actions of Du Toit
are
causally linked to the dismissal of the plaintiff, considering the
allegations made against the first defendant. The second
defendant
argues that this amendment is excipiable on the basis that no cause
of action is disclosed.
[42]
The plaintiff argues that the allegations against Du Toit are
statements of material fact with sufficient particulars to allow
the
second defendant to understand the case it has to meet, and to plead.
He says that he has listed the different ways in which
the fiduciary
duty was breached by the second defendant, and has disclosed a cause
of action.
[43]
The plaintiff bases this amendment on his claim that the second
defendant owed him a fiduciary duty. Based on my earlier finding
on
this point, the exception against this amendment succeeds.
Ground
5: the
quantum
of damages
[44]
According to plaintiff, sufficient information was provided to allow
the second defendant to plead. He based his quantum on
his contract
of employment. He has removed the cause of the complaint in a
replying affidavit.
[45]
The second defendant claims that insufficient information has been
provided on how damages have been calculated to allow it
to plead. It
cannot reasonably assess the quantum. For example, how were the
amounts claimed for loss of earnings, loss of future
earning, loss of
incentive bonuses, loss of pension benefits and so on calculated? The
amendment is vague and the second defendant
would be embarrassed if
required to plead. It amounts to a proverbial "thumb suck".
[46]
Again, despite the clarification being given only in the replying
affidavit, I consider the additional information to have
removed any
possible vagueness. As explained above, an over-technical approach
should not be adopted. I do not think the second
respondent will
suffer any serious prejudice by the amendment.
[47]
As referred to earlier, only in exceptional circumstances will
amendment be granted when it is excipiable. The court's discretion
must be exercised judicially taking into consideration the
circumstances of the case. I have exercised this discretion, taking
into account various factors, including that the court must not adopt
an over-technical approach to the matter.
COSTS
[48]
Both parties are partially successful. In all the circumstances I
regard an order that the costs be costs in the action to
be the most
just.
ORDER
[49]
I therefore make the following order.
1.
The second defendant's exception to the amendments under grounds 3
and 4 are upheld. The plaintiff's application for leave
to amend its
particulars of claim in respect of the amendments challenged on these
grounds is refused and dismissed.
2.
The second defendant's exception to the amendments under grounds 1,
2, 5 and 6 are dismissed. The plaintiff's application
for leave to
amend its particulars of claim in respect of the amendments
challenged on these grounds is granted.
3.
Costs are to be costs in the action.
______________________________
OLIVIER
AJ
ACTING
JUDGE
OF THE
HIGH COURT
OF
SOUTH
AFRICA
Representation
for the Plaintiff: In person
Representation
for Second Defendant
Counsel:
Adv Govender
Instructed
by: Norton Rose Fulbright South Africa