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[2012] ZAKZDHC 102
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Bell Estates (Pty) Ltd v Renasa Insurance Company Ltd and Another (2012 (3) SA 296 (KZD); [2012] 3 All SA 86 (KZD)) [2012] ZAKZDHC 102; [2012] ZAKZDHC 9 (2 March 2012)
KWAZULU-NATAL HIGH COURT,
DURBAN
REPUBLIC OF SOUTH AFRICA
REPORTABLE
Case no: 5004/2007
In the matter between:
BELL ESTATES (PTY) LIMITED
….................................................
Applicant/Plaintiff
And
RENASA INSURANCE COMPANY LIMITED
…...............
1
st
Respondent/Defendant
PETER TAYLOR AND ASSOCIATES CC
…..................
2
nd
Respondent/ Defendant
JUDGMENT
MADONDO J
Introduction
[1] The crisp issue for determination
in this matter, is whether or not a Notice of Joinder issued in terms
of Rule 10(3) of the
Uniform Rules of Court constitutes a process as
contemplated in section 15(1) of the Prescription Act, 68 of 1969
(the Act) and
the service whereof interrupts the running of the
prescription period of a claim.
Background
[2] The applicant has issued a notice
in terms of Rule 10(3) for the joinder of the second respondent as a
party to the action the
applicant instituted against the first
respondent. The claim against both the first and second respondents
arose as follows: On
8 May 2007 the applicant instituted an action
against the first respondent for the payment of the sum of R222 000
as damages arising
out of the breach of the contract of insurance
entered into between the applicant and the first respondent on 17
October 2004 in
terms of which the applicant caused a 2005 model
Toyota Hilux 2.7 litre double cab Raider to be insured against loss,
damage and
theft.
[3] During the conclusion of the
aforesaid agreement the applicant was represented by Peter Taylor of
Peter Taylor and Associates
CC (the second respondent) and the first
respondent by a duly appointed employee of Monitor Administrators
(Pty) Limited. The vehicle
was insured for the sum of R240.000.
[4] On 6 July 2006 at Umhlali the
vehicle was stolen and it was not recovered. The value of the vehicle
at the time was R240 000.
The applicant then caused a combined
summons to be issued and served on the first respondent. In its plea
to the particulars of
claim the first respondent averred that it was
a term of the contract of insurance that no cover would exist for
vehicles not fitted
with a Vesa/vss – approved or Orbitech
tracking device or Nestar tracking device where the sum insured
exceeded R150 000.
[5] In amplification of its averment,
the first respondent stated that the vehicle in question was not
fitted with any of the tracking
devices referred to above and that
accordingly the applicant was not entitled to any indemnity in
respect of the theft of such
vehicle. The first respondent was
therefore on the said basis entitled to repudiate the applicant’s
claim for compensation.
[6] On 21 July 2009 the applicant
lodged an application for joinder of the second respondent to the
action on the grounds that the
second respondent, being the
applicant’s insurance broker dealing directly with the first
respondent, was privy to the security
requirements necessary in
respect of the applicant’s vehicle under the insurance policy.
Therefore, the second respondent
owed the applicant a duty to clearly
convey the first respondent’s security requirements in respect
of the vehicle in question
to the applicant in order that the
aforesaid vehicle was covered under the insurance policy.
[7] The applicants’ claim
against the second respondent arises from the second respondent’s
failure to notify the applicant
of the security requirements on the
basis of which the first respondent validly repudiated the
applicant’s claim. The applicant
avers that it has therefore
recourse against the second respondent.
[8] In the event of the court allowing
the joinder of the second respondent, consequential amendments will
have to be made to the
particulars of claim to make provisions for
the applicant’s claim against the second respondent.
[9] The notice was served on the
second respondent on 30 September 2009. On 2 October 2009 the second
respondent gave notice of
his intention to oppose the application for
joinder. On 30 November 2011 the matter was adjourned on the opposed
roll to 31 January
2012.
[10] The second respondent opposes the
application for joinder on the basis that any claim which the
applicant may have had against
the second respondent has prescribed
and there will be no purpose in joining the second respondent to the
action which the applicant
has instituted against the first
respondent.
[11] The second respondent contends
that Notice in terms of Rule 10(3) the applicant has served on the
second respondent does not
constitute a process as contemplated by
the provisions of the Act. According to the second respondent the
date upon which the applicant
became aware that it had not complied
with the policy provisions is the date the prescription started
running in respect of any
claim against the second respondent.
[12] In a letter dated 24 January 2007
which the applicant’s attorneys addressed to the second
respondent the applicant’s
attorneys alleged that the
inescapable conclusion was that the second respondent failed in its
duty and that he was therefore liable
for damages the applicant
suffered. The second respondent therefore avers that the claim
against him became prescribed three years
after the 24
th
of January 2007, Further, that any claim which the applicant seeks to
enforce against the second respondent has prescribed and
the joinder
would therefore be a fruitless exercise.
[13] The applicant contends that the
prescription of the applicant’s claim against the respondent
was interrupted upon receipt
of the Rule 10(3) application papers.
The applicant submits that the notice in terms of Rule 10(3) is
indeed a process as contemplated
by the provisions of the Act and
that prescription of any claim is interrupted on service or receipt
of such notice.
[14] Rule 10 (3) reads as follows:
“
Several
defendants may be sued in one action either jointly, jointly and
severally, separately or in the alternative, whenever the
question
arising between them or any of them and the plaintiff or any of the
plaintiffs depends upon the determination of substantially
the same
question of law or fact which, if such defendants were sued
separately, would arise in each separate action.”
Legal position
[15] The sub sections of section 15 of
the Act which are relevant for the determination of the issue before
me are; subsections
(1), (2) and (6).
Section 15(1) reads as follows:
“
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 the debt.”
In terms of this sub section three
requirements must be met for the prescription to be interrupted:
there must be a process;
the process must be served on the
debtor;
by that process, the creditor must
claim payment of the debt.
[16] Section 15(2) provides:
“
unless
the debtor acknowledges liability, the interruption of prescription
in terms of sub section (1) shall lapse, and the running
of
prescription shall not be deemed to have been interrupted, if the
creditor does not successfully prosecute his claim under the
process
in question to final judgment or if he does so prosecute his claim
but abandons the judgment or the judgment is set aside.”
[17] Section 15(6) reads as follows:
“
For
the purposes of this section, ‘process’ includes
petition, a notice of motion, a rule nisi, a pleading in
reconvention,
a third party notice referred to in any rule of court,
and any document whereby legal proceedings are commenced.”
The section does not containing a
definition of the word “process” but it merely lists
certain documents which will
be regarded as “processes”
for the purpose of the section. However, what worth noting is that
the documents listed
therein are all examples of documents “whereby
legal proceedings are commenced”.
[18] In Garrett v Lea Hobbs Milton and
Co. 1979(4) at 924H the word ‘process of court’, in its
limited sense was held
to connote ‘a mandate, summons or writ
by which a person or thing, is brought into court for litigation’.
However,
the court held that in its wider sense, it may connote any
document employed in the process of litigation. In its view the term
process should be understood in its wide sense. That the term or word
“process” may bear the wide meaning also appears
from an
Australian case of Boilermakers’ Society of Australia v
Brisbane Welding Works
(1965) QdR 598
[19] Georges CJ in the case of
Mountain Lodge Hotel (1979) (Pty) Ltd v McLouglin and another 1984(2)
SA 567 (ZSC) at 570H –
571A when commenting upon a similar
section in the Zimbabwean
Prescription Act said
the following:
“
The
definition of ‘process’ in ss (6) is not exclusive in its
scope. The section merely enumerates some documents which
fall within
the ambit of the word. It clearly contemplates that other documents
may fall within that ambit. Indeed the fact that
‘process’
includes ‘ any document whereby legal proceedings are
commenced’ would indicate that it encompasses
something wider
than that category of document and could include a document which
does not commence legal proceedings. If the intention
had been
otherwise the draughtsman would have said that ‘process’
meant any document whereby legal proceedings were
commenced and
included the specific documents listed in (a) to (e).”
[20] In Mias De Klerk Boerdery
(EDMS)Bpk v Cole 1986(2) SA 284(N) at 286-287A-B, The court
subscribed to the view shared by courts
in Mountain Lodge Hotel and
Garrett cases,
supra,
and concluded that the word “process”
in
section 15(1)
bears the wide meaning referred to in the aforesaid
cases. The court in Mias case held that a notice of intention to
amend in terms
of
Rule 28
interrupted the running of the prescription
and that its service was sufficient for the purposes of
section 15(1)
if the means of service employed for this was a proper or legally
recognised means of service and that it was not necessary for
such
notice to be served by the deputy-sheriff.
[21] This court is asked to determine
whether the service of Notice of Joinder on the second respondent
interrupted the running
of prescription in terms of the provisions of
section 15(1).
Holmes JA delivering the majority judgment in Southern
Insurance Co. Ltd v Vilakasi 1967(1) SA 246(A) at 253H said:
“
In
my opinion it is clear that the service referred to in
section 6(1)
(b) must be a service whereby action is instituted as a step in the
enforcement of the claim or right. The underlying reason why
such a
service interrupts prescription is that the creditor has thereby
formally involved his debtor in court proceedings for the
enforcement
of his claim.”
[22] A notice of joinder by its nature
and content constitutes a first step in the effectively commencement
of the legal proceedings
for enforcement of the claim for debt or
compensation. I therefore fully subscribe to the view expressed by
Grosskopf AJA in the
case of Murray and Roberts (Cape) v Upington
Municipality 1984(1) SA 571(A) at 578H when he said:
“
Where
creditor takes judicial steps to recover the debt and thereby to
remove all uncertainly about its existence, prescription
should
obviously not continue running while the law takes it course (515) of
the Act.”
[23] In Waverly Blankets Ltd v
Shoprite Checkers (Pty) Ltd and Another 2002(4) SA 166 (C), where the
plaintiff had applied to join
an additional defendant in action, the
service of notice of motion seeking joinder was held to be
undoubtedly a process whereby
the plaintiff claimed the payment of
debt and therefore interrupting the running of prescription in terms
of section 15(1) of Act
68 of 1969.
[24] In Naidoo and another v Lane and
another 1997(2) SA 913(D), Meskin J held that service of an
application for joinder did not
interrupt prescription since the said
application was not a “process” whereby the creditor
claims payment of the debt
“in terms of section15(1)”. In
grounding his conclusion in this regard at 919J- 920A-E the learned
judge said:
“
It
is true that the application clearly informed the proposed second
defendant of the existence of the obligations allegedly owed
to the
plaintiffs and therefore of the existence of the rights co-relative
thereto. It also clearly informed him of the plaintiff’s
intention to ‘claim (performance)of’ such obligations and
therefore of the intention to enforce the rights co-relative
thereto
by means of the substitution of the amended summons and the amended
particulars of claim and the service of theses documents
on the
proposed second defendant. But, in the light of my interpretation of
s 15(1) of the Act, a process which is merely informative,
and which
is not one by which per se the creditor purports at all to enforce
the right co-relative to the relevant obligation,
is not a process
for the purposes of such section.
Indeed,
the application, given its content, necessarily informed the proposed
second defendant that it was not by means of the application
per se
that the plaintiffs were purporting to enforce the rights co-relative
to the relevant obligations, but that it would by
means of the
substitution of the amended summons and amended particulars of claim
and the service of such documents on the proposed
second defendant
that they would purport to enforce such rights. The proposed second
defendant, therefore, was informed that, notwithstanding
the
intention to join him as a second defendant, he need do nothing until
the amended summons and amended particulars of claim
were served upon
him. In my opinion, a process which is informative in this way is not
one, `whereby payment is claimed` within
the meaning of s15 (1) of
the Act.”
[25] Section 14 of the Act provides
that the running of prescription is interrupted by an express or
tacit acknowledgment of liability
by the debtor. In Murray &
Roberts case,
supra
, at 579A and 578F, it was stated that the
reason is clear, if the debtor acknowledges liability there is no
uncertainty about the
debt. The main practical purpose is to promote
certainty in the ordinary affairs of people. It appears from above
that what matters
most is the communication of the existence of the
debt to the debtor. The court in Naidoo cases seemed to have adopted
a too legalistic
approach to the issue at hand. Giving the word
“process” liberal interpretation a notice of motion
seeking joinder
is undoubtedly a process. It should also be regarded
as a document whereby legal proceedings are commenced against the
second respondent.
In Waverly case,
supra,
at 174 E-G and
175D, it was held that the application for joinder was the first step
whereby the plaintiff (as creditor) claimed
payment of the debt from
the second defendant. The joinder application leads to joinder order
which in turns leads to further pleadings
and eventually to trial.
But for prescription, it is open to the plaintiff to prove its case
on the merits and to secure a final
judgment if he or she succeeds on
merits.
[26] In Cape Town Municipality and
another v Allianz Insurance Co. 1990(1) SA 311 (C) at 334H, Howie J
said:
“
It
is sufficient for the purposes of interrupting prescription if the
process to be served is one whereby the proceedings begun
there under
are instituted as a step in the enforcement of claim for payment of
debt.”
[27] In Chauke v President Insurance
Co. Ltd 1978(2) SA 947(W) at 950 Theron J said the following:
“
As die
dagvaarding (proses) nie verder gevoer word nie, verval sy stuitende
kraag met betrekig tot verjaring ”
In the said case at 950G it was held
that the use of the word “under the process in question”
in section 15(2) meant
in terms of the Rules of Court governing the
process.
[28] In the present case the
applicant’s claim against the second respondent would have
arisen on receipt of the letter of
repudiation dated 11 November
2006. However, it is common cause that the notice of joinder was
served on the second respondent
before the applicant’s claim
against the second respondent prescribed.
[29] It has been contended on behalf
of the second respondent that the interruption of the prescription
period only takes place
on the order of joinder, for it is only when
a party to be joined becomes party to a process which can be
prosecuted to judgment
as envisaged in section 15(2) of the Act.
[30] To the contrary, it has been
argued on behalf of the applicant that the person upon whom notice in
terms of Rule 10(3) is served
becomes party to the process when the
notice of motion is served upon him or her. In other words, the
moment the debtor becomes
aware of his or her debt.
[31] The notice of joinder commences
an action against a person who is sought to be joined in the action
almost in the same way
the third party notice in terms of Rule 13
does. The only difference is that the third party notice states the
nature and grounds
of the claim of the party issuing it, the question
or issue to be determined, and any relief or remedy claimed (Rule
13(2)).
[32] As shown above, the notice of
joinder serves almost the same purpose as the third party notice
specified in section 15(6) as
constituting the process. The notice of
motion is also listed therein. It has been argued on behalf of the
second respondent that
on the plain wording of section 15(1) the
process that interrupts prescription must be a claim for payment of
debt that is capable
of being prosecuted to obtain a final judgment.
On proper construction that does not mean that a particular document
in question
must be the only document in the process right up to the
stage a final judgment is obtained (see Chauke case,
supra,
at
950 G). A simple summons, for instance, a document initiating action
against the defendant does not contain all the details
pertaining to
a claim. Such details are contained in a declaration which follows a
simple summons.
[
33]
Similarly, a notice of joinder initiates an action against the party
to be joined. Therefore, it follows that being a document
which
initiates an action against a person to be joined as a party; it
constitutes a process whereby the plaintiff claims payment
of its
debt. In the circumstances, a notice of motion for an application for
joinder is a first step in the enforcement of a claim
sounding in
money against the person sought to be joined as a party to the
existing action, aimed at finally obtaining a judgment
against the
debtor. On granting a joinder order the plaintiff is only granted
leave to amend its particulars of claim to make provisions
for the
inclusion of the party joined to the action. From there, the claim is
prosecuted to a final judgment.
[34] In the circumstances, I fully
agree with Comrie J in Waverly case,
supra,
at 175 D-E where
he says that “there is a sufficient link between the joinder
application and a final judgment sounding in
money in the plaintiff’s
favour, if such is granted on merits. The joinder application leads
to the joinder order which in
turn leads to further pleadings and
eventually to trial. If it can be said that the joinder application
does not interrupt the
prescription that will be artificial and
unjust outcome tending to defeat the purpose of the statute.”
Conclusion
[35] In the premises, I respectfully
come to the conclusion that the learned judge, Meskin, in Naidoo
case,
supra,
was clearly wrong when he held that an
application for joinder was not a process contemplated in section
15(1) of the Act. It therefore
follows that I am not bound by such
decision. Accordingly, I hold that a notice of joinder in terms of
Rule 10(3) for the joinder
of the second responded as a party to the
action the applicant instituted against the second respondent,
constitutes a process
as contemplated in the provisions of section
15(1) and its service on the second respondent interrupted the
running of the prescription
period of its claim against the second
respondent. It is common cause that the debt had not extinguished at
the time the notice
was served and accordingly the claim had not
elapsed.
Order
[36] In the result, the question
raised in this case is decided in favour of the applicant with costs.
Date reserved on: 31January 2012
Date delivered on: 2 March 2012
Counsel for applicant: Adv Camp
Instructed by: Truter James De Ridder
inc
c/o Uys Matyeka Schwart Inc
REF : TRU1/0034/ CJ
Tel:031-3046067/65/63
Counsel for 2
nd
respondent:
Adv Boulle
Instructed by: Norton Rose South
Africa(inc of Deneys Reitz Inc)
c/o Regus Management Group
REF: MR C WOOLLEY
.cw/STH/635