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[2015] ZAGPPHC 206
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Sentrachem Ltd v Terreblanche (47159/2011) [2015] ZAGPPHC 206 (25 February 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION. PRETORIA
CASE
NUMBER:47159/2011
DATE: 25 FEBRUARY
2015
NOT REPORTABLE
OF INTEREST TO
OTHER JUDGES
In the matter
between:
SENTRACHEM
LTD
.....................................................................................................
Applicant
and
A L
TERREBLANCHE
...............................................................................................
Respondent
JUDGMENT
VAN DER BERG AJ
[1]
This is an application to amend the plaintiffs particulars of claim.
The applicant (the plaintiff in the main action) filed
a notice of
intention to amend in terms of rule 28(1) of the Uniform Rules of
Court (
“the
proposed amendments
”
),
whereafter the respondent objected in terms of rule 28(3)
(“the
respondent’s objection
”
).
The applicant then brought this application to amend in terms of rule
28(4) of the Uniform Rules of Court. The applicant filed
an affidavit
in support of its application, and the respondent filed an answering
affidavit.
PARTICULARS OF
CLAIM AND TRIAL ISSUES
[2]
The action was initially instituted by a pension fund
(“the
Fund')
which
was duly registered under the provisions of the Pension Funds Act,
1956
(“the
PFA
”
).
Subsequently, the Fund was substituted as plaintiff by the liquidator
of the Fund in terms of rule 15 pursuant to the liquidation
of the
Fund. In terms of a court order handed down on 22 November 2013, the
liquidator in turn was substituted as plaintiff by
the present
applicant after a cession and assignment concluded between him and
the applicant. All this appears from paragraph 1
of the applicant’s
particulars of claim (as currently constituted), and which is
admitted in the plea.
[3] The plaintiffs
claim (as appears from the current particulars of claim) can be
summarised as follows:
[3.1] The respondent
was a member of the Fund.
[3.2] A surplus
apportionment scheme had been approved by the Registrar of Pension
Funds on 13 July 2010.
[3.3] The respondent
is a former member of the Fund, and in terms of the surplus
apportionment scheme the respondent was entitled
to payment of an
amount of R94 614.99 which was paid to him.
[3.4] However, on or
about 6 October 2010, a further amount of R453 872.31 was also paid
to the respondent by Fund.
[3.5]
It is alleged that the payment of R453 872.31 was paid in the
bona
fide
and
reasonable, but mistaken belief that the said amount was due to the
respondent.
[3.6] The Fund’s
claim against the respondent based on unjust enrichment has been
ceded to the applicant by the liquidator.
[4] The respondent
admits receipt of the amount of R453 872.31.
[5] The following is
thus common cause on the pleadings:
[5.1] The Fund paid
an amount of R453 872.31 to the respondent; and
[5.2] The Fund has
ceded its claim against the respondent for payment of the amount of
R453 872.31 to the applicant.
[6] The applicant
must of course still prove that the Fund had a valid claim against
the respondent based on unjustified enrichment
which could be ceded
to the applicant.
[7] There had also
been other amendments to the particulars of claim which had been duly
effected.
APPLICANT’S
PROPOSED AMENDMENTS
[8]
The applicant seeks in a number of paragraphs to add before the word
“
scheme
”
the
words “
surplus
apportionment
”
.
No objection is taken to this, and these amendments must be allowed.
[9]
In paragraph 1 of the rule 28(1) notice, two other amendments are
proposed to paragraph 7 of the particulars of claim. Firstly,
the
reference to “
the
plaintiff”
as
being a former member was clearly an error, and should have read “
the
defendant
”
.
The other amendment is simply to state that the surplus apportionment
scheme also provided for the apportionment of actuarial
surplus. This
is consistent with the provisions of section 15B(9) of the PFA (in
terms of which the surplus apportionment scheme
was approved) and is
not even a necessary allegation. These amendments must be allowed.
[10]
The amendments in paragraphs 2.3 and 3.2 of the rule 28(1) notice
simply repeat that the amount R453 872.31 was paid to the
respondent
“
by the
Fund\
an
allegation that already appears in paragraph 10 of particulars of
claim and which has been admitted by the respondent in his
plea. This
is therefore not a new averment.
[11]
In terms of paragraph 2.3 of the rule 28(1) notice, the applicant
wants to amend particulars of claim to indicate that the
amount of
R94 614.99 was paid “
by
the Fund".
This
payment does not form part of the applicant’s cause of action
and is therefore not a necessary averment. It is also not
in dispute.
There can be no prejudice in allowing this amendment.
[12]
The amendment sought in paragraph 3.1 replacing the words “a
further
”
with
“
another
”
before
“
the amount
of R453 8 72,3V'
is
cosmetic and should be allowed.
[13] The applicant
also seeks to add a new paragraph to read as follows:
“
The
amount ofR453 872.31 was not due to the defendant in terms of surplus
apportionment scheme or in terms of any other obligation
by the Fund
to the defendant.
”
[13.1] This is
hardly a novel allegation, as it is implied in the current paragraph
10 which reads:
“
The
sum of R453 972.31 was paid to the defendant by the Fund in the bona
fide and reasonable, but mistaken belief that the said
amount was due
to the defendant. ”
[13.2]
The respondent objected on the basis that the addition of the words
“
in terms of
any other obligation ”
constituted
a new and extended cause of action. This is clearly without merit.
There can be no prejudice in allowing the introduction
of this new
paragraph into particulars of claim.
[14]
In paragraph 11 of the current particulars of claim it is alleged
that the defendant has been unjustly enriched at the expense
of “
the
plaintiff
who has
been impoverished..
.’’(own
emphasis). This is incorrect, and possibly due to the fact that the
applicant omitted to amend this paragraph
when it was substituted as
plaintiff pursuant to the cession and assignment agreement. This is a
mere formality, and there can
be no objection to allow the word
“
plaintiff”
to
be substituted with the words “
Fund
(duly substituted with the plaintiff as cessionary as set out
above)”.
This
is especially so as the cession and the
locus
standi
of
the current plaintiff (i.e. the applicant) have been admitted by the
respondent in its plea.
DEFENDANT’S
NOTICE OF AMENDMENT
[15] On 31 March
2014 (whilst the trial set down for 28 March 2014 but which never
commenced stood down) the respondent served a
notice of intention to
amend his plea. It was met with an objection and the respondent did
not proceed with this notice of amendment,
but seemingly still relied
on it in his notice of objection. It included the following:
[15.1] A “first
special plea” that the plaintiffs claim had become prescribed.
This is based on the fact that the plaintiff
was only substituted by
court order on 22 November 2013, but the payment to the defendant had
taken place on 6 October 2010.
[15.2] A “second
special plea”, which avers that the plaintiffs particulars of
claim refer to the Fund making payment
to the defendant in numerous
paragraphs, whilst there is no reference to any payment being made by
the plaintiff to the defendant.
RESPONDENT’S
OPPOSITION TO AMENDMENT
[16]
The respondent raised a number of objections in its rule 28(3)
notice, and in his answering affidavit raised further issues
together
with two points
in
limine.
I
shall deal with the submissions presented on behalf of the respondent
by
Mr Pienaar.
He
also made certain concessions.
Points in limine:
challenge to founding affidavit
[17]
The respondent raises two points
in
limine
directed
at the applicant’s founding affidavit.
[18] Firstly, he
challenges the authority of the deponent to the founding affidavit,
Ms Spies, to depose to the affidavit. Ms Spies
is the applicant’s
attorney of record.
[19]
It is surprising that litigants still take this point more than 20
years after Flemming DJP in
Eskom
v
Soweto
City Council
held
that a party’s attorney could legitimately use any witness who
in his opinion advances the application, even if the witness
has no
authority to bring, withdraw or otherwise deal with the application
itself.
1
Flemming DJP found “
the
regularity of arguments about the authority of a deponent unnecessary
and wasteful”.
The
Supreme Court of Appeal followed
Eskom
on
two occasions
2
.
[20]
Mr Pienaar
attempted
to distinguish
Eskom
as
follows: Ms Spies made a bald allegation that she had authority to
depose to the affidavit. The respondent specifically denied
in his
answering affidavit that she had such authority, and according to
Plascon-Evans
the
respondent’s point has not been rebutted.
[21] The situation
still falls within the ambit of Eskom where Flemming DJP said:
“
A
witness, also when a deponent, may testify even if he has no
authority to bring, withdraw or otherwise deal with the application
itself ”
[22] Streicher JA
said the following in the Supreme Court of Appeal:
3
“
I
n
my view, it is
irrelevant whether Hanke had been authorised to depose to the
founding affidavit. The deponent to an affidavit in
motion
proceedings need not be authorised by the party concerned to depose
to the affidavit. It is the institution of the proceedings
and the
prosecution thereof which must be authorised
[23]
The second point
in
limine
is
that the deponent does not have personal knowledge of the facts of
the matter. The deponent is the applicant’s attorney
of record.
Her affidavit deals mostly with the history of the litigation and the
pleadings. I have not been referred to a single
fact (as opposed to
inferences or submissions or arguments or opinions) in the
applicant’s founding affidavit which is contested
by the
respondent. The respondent’s remedy, if the founding affidavit
did contain inadmissible hearsay, was to have brought
an application
to strike out inadmissible portions in terms of rule 6(15) of the
Uniform Rules of Court and/or in terms of the
common law. It failed
to do so. This point is equally without any merit.
[24]
Both the points
in
limine
are
dismissed.
Defence of
prescription
[25] In the
respondent’s heads, the following was pointed out: the court
order allowing the applicant to be substituted as
plaintiff was only
handed down on 22 November 2013, the actual substitution was effected
on 4 December 2013, and the payment by
the Fund to the defendant had
taken place on 6 October 2010.
[26] It is then
submitted that from the date of payment to date of substitution more
than three years had lapsed, and the submission
is then made that the
applicant’s claim against the respondent had become prescribed
in terms of the provisions of section
10(1) and 11(d) of the
Prescription Act, and that therefore the amendment should not be
allowed.
[27] It cannot be
accepted as a valid objection to the proposed amendments.
[28]
In the first place, the substitution of the applicant was effected
months before the rule 28(1) notice forming the current
application
was served.
4
If the respondent’s arguments are sound, any objection based on
prescription should have been raised at the time when the
court
considered the substitution of the applicant as the plaintiff.
Alternatively, the respondent should have filed a consequential
plea
after the substitution order. Further alternatively, the respondent
should (and possibly still can) have amended his plea
to introduce a
special plea of prescription.
[29]
Mr Pienaar
accepted
that the proposed amendments do not introduce a new cause of action.
He argued, however, that once the applicant has brought
an
application for amendment, it is open for the respondent to challenge
the proposed new particulars of claim on any ground, even
grounds
that existed before the proposed amendments were filed. He did not
cite any authority for the proposition, and I am not
aware of any.
The proposition is not in accordance with the provisions of rule
28(3) which refers to an “objection
to
a proposed amendment
.”
[30]
The respondent in its rule 28(3) notice raised the objection that the
proposed amendments would meet or counter (“
ondervang
”
)
his special plea of prescription. This was presumably a reference to
the respondent’s earlier notice of amendment which
was not
followed through.
Mr
Pienaar
did
not continue with the objection coached in that form.
[31]
Secondly, as
Mr
de Villiers
(who
appeared for the applicant) pointed out, prescription was raised in a
defective manner. The onus on a plea for prescription
rests on the
defendant. A defendant relying on prescription has to
allege
and prove
the
date on which the plaintiff had actual or constructive knowledge of
the debt.
5
[32]
The respondents did not in his answering affidavit or in his
objection allege a date when the applicant had actual or constructive
knowledge of the debt. It follows that the issue of prescription was
not properly raised in these proceedings, and cannot form
the basis
of a valid objection
6
.
(Mr
Pienaar
based
his argument solely on the assumption that prescription commenced on
the date of payment of the amount of R453 872.31.)
“
Unjustified
enrichment not at expense of the applicant (the plaintiff) ”
[33] The following
argument is raised in the respondent’s heads of argument:
[33.1]
“(5.7
It is
trite law that the unjustified enrichment should be at the expense of
the Applicant, the Plaintiff, whilst the alleged unjustified
enrichment on which the Applicant’s action is founded, is at
the expense of the said Pension Fund, a third party. ”
[33.2]
“(5.2
It is
trite law that in order to found a claim for having being unjustly
enriched, payment of the amount involved should have been
effected by
Applicant... ”
[33.3]
The submission is then made that no
nexus
exists
between the applicant and the respondent, and that the applicant
lacks the required
locus
standi.
[33.4] The argument
concludes that the further amendment of particulars of claim is
“fatally defective”, and would cause
the applicant’s
claim to be excipiable
[34] In my view
these submissions cannot be accepted.
[35] The argument
does not take the cession of the Fund’s claim into account. The
applicant’s case is that the Fund
was impoverished, had a valid
enrichment claim against the respondent, and ceded this claim to the
applicant. No authority was
advanced that an enrichment claim cannot
be ceded, and no reason presents itself why it would not be possible.
[36] If the argument
is sound (and in my view it is not), it does not arise from the
proposed amendment, but from the previous substitution
allowed by the
court. This “defence” was raised as a special plea in the
respondent’s notice to amend which was
not followed through.
Other objections
contained in the rule 28(3) notice
[37]
Mr Pienaar
conceded
that other objections contained in the rule 28(3) objection were not
sound. This concession was correctly made, as these
objections were
frivolous in the extreme. I return to this aspect later in the
judgment.
PREJUDICE
[38]
Mr de Villiers
pointed
out that the principle is that an amendment ought to be allowed,
where this can be done without prejudice to the other party.
A court
has a wide discretion to achieve justice between the parties.
7
[39] The respondent
avers in his answering affidavit that the amendments increased the
number of consultations with his attorneys,
thereby increasing his
legal expenses. No authority has been offered that this constitutes
prejudice which justifies the refusal
of an amendment. The proposed
amendments do not introduce new facts or allegations, and no further
consultations will be required.
In any event, the applicant tendered
the wasted costs of the amendment in its rule 28(1) notice (save in
the event of the proposed
amendments being opposed) and in terms of
rule 28(9) the applicant would have been liable for the costs had
there been on opposition.
COSTS AND
CONLCUSION
[40] It is clear
that the amendments must be allowed. That leaves the issue of costs.
[41]
It was submitted on behalf of the respondent that the applicant
sought an indulgence and should pay the costs of the application.
It
was also submitted that a founding affidavit in an application to
amend is only required in special circumstances, and was not
necessary in this case
8
.
(This submission makes the
in
limine
challenges
to the founding affidavit somewhat puzzling.) It was argued that the
filing of the founding affidavit caused the respondent
to file an
answering affidavit, and he should therefore not be mulcted in costs.
It was further submitted that the founding affidavit
was unduly
prolix.
[42]
In my view circumstances justified the filing of a founding
affidavit. In his rule 28(3) objection, the respondent complained
that the proposed amendment would meet or counter (“
ondervang
”
)
his two special pleas. The defendant’s plea contains no special
pleas. The court dealing with the application to amend would
not have
understood the rule 28(3) objection without being informed of the
history of the matter, and in particular the defendant’s
previous aborted attempt at amendment. It was likewise necessary to
inform the court how and when the substitution of the plaintiffs
came
about.
[43] The founding
affidavit is not unduly prolix. It runs to 16 A4 pages, printed in
double spacing. It sets out the important facts
with little or no
elaboration.
[44] Although the
applicant seeks an indulgence, the respondent had no real grounds for
objecting, and accordingly he must bear
the costs of the
application
9
.
[45]
Mr de Villiers
submitted
that the respondent should pay such costs on a punitive scale as his
opposition was vexatious and frivolous. I agree.
[46]
In developing his argument that a founding affidavit was unnecessary,
Mr Pienaar
submitted
(correctly) that only two amendments were strictly necessary:
firstly, by substituting
“
defendant”
with
“
plaintiff”
in
one paragraph (a typographical error), and secondly, by substituting
“
plaintiff
with
the words “
Fund
(duly substituted with the plaintiff as cessionary as set out above)”
(an
error caused by the substitution of plaintiffs). The other proposed
amendments were superfluous. This begs the question: why
was
objection taken to the proposed amendments, and why did the
respondent persist in opposing the application?
[47] The objections
were unreasonable, frivolous, unmeritorious and even downright
embarrassing. By way of illustration: The applicant
posed the
question in its founding affidavit whether one of the objections was
really based on the fact that “plaintiff’
differs from
“Plaintiff’, and submitted that, if so, this in itself
would justify a penalising cost order. The respondent
chose not to
explain itself.
[48] Rule 28 creates
a mechanism to amend pleadings in a cost effective manner without the
intervention of the court. The rule is
certainly not designed to
allow a party to obstruct the granting of formal and innocuous
amendments.
[49]
In the circumstances, a special cost order is justified.
10
[50] I accordingly
make the following order:
1. The applicant is
granted leave to amend its particulars of claim in accordance with
his notice of amendment in terms of rule
28(1) dated 14 April 2014.
2. The applicant is
to effect the amendment within ten days from the date of this order
by the service of amended pages.
3. The respondent is
allowed to effect consequential amendments to its plea within fifteen
days from the date of service of the
amended pages.
4. The respondent is
ordered to pay the costs of the application on the attorney and
client scale.
VAN DER BERG AJ
Acting Judge of the
High Court
APPEARANCES
For
the Applicant:
Adv.
D.P de Villiers
Instructed
by
:
Fasken Martineau Attorneys
For
the Respondent:
Adv.
W.F Pienaar
Instructed
by
:
Cremer & Strydom attorneys
Date
of hearing:
23
February 2015
Date
of judgment:
25
February 2015
1
Eskom
v Soweto City Council
1992 (2) SA 703
(W) at 706 A
2
Ganes and Anpther v Telecom Namibia Ltd
2004
(3) SA 615
(SCA) at paragraphs [18] – [19] , p 624B –
625A;
Unlawful Occupiers, School Site v City of
Johannesburg
2005 (4) SA 199
(SCA) at paragraphs [13] - [16]
3
Ganes and Anpther v Telecom Namibia Ltd (supra) at 624 G- H
4
It
was served and filed on 14 April 2014.
5
Gericke
v
Sack
1978(1)
SA 821 (A) at 828 A-D;
Macleod
v
Kweyiya
2013(6)
SA 1 (SCA), paragraph [10] at 6F-G
6
In
Union
Finance Holdings (Pty) Ltd
v
Bonguli
2013
(2) SA 42013
(2) SA 449 (GSJ) at paragraph [6] Van Oosten J held
that prescription can be raised in an application to amend, but it
is clear
from the judgment that it must be “properly”
raised. See cases in the previous footnote.
7
See inter alia Embling and Another v Two Oceans Aquarium CC
2000
(3) SA 691
(C) at 694 I to 695 G;
Luxavia (Pty) Ltd v Gray
Security Services (Pty) Ltd
2001
(4) SA 211
(W) at paragraphs [10] – [12];
Randa v
Radopile Projects CC
2012 (6)
SA 128
(GSJ) at paragraphs [7] and [12] - [15]
8
Respondent
inter alia
relied
on:
Sentrachem Ltd v Prinsloo
1997(1)
SA (A);
Swartz v Van Der Walt t/a Sentraten
1998 (1) SA 53
(W)
9
Gcanga v AA Mutual Inc Association Ltd
1979(3) SA 320 (E) at 330
10
SA
Droevrugtekodperaasie Bpk
v
SA
Raisins (Edms) Bpk
[1999]
3 All SA 245
(NC) at 255i and 255a-b