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[2020] ZASCA 22
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Tusk Construction Support Services (Pty) Ltd and Another v Independent Development Trust (364/2019) [2020] ZASCA 22 (25 March 2020)
THE SUPREME COURT OF
APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
no: 364/2019
In
the matter between:
TUSK CONSTRUCTION
SUPPORT
SERVICES
(PTY)
LTD
FIRST APPELLANT
JOINT
EQUITY INVESTMENTS IN
HOUSING
(PTY)
LTD
SECOND APPELLANT
and
INDEPENDENT
DEVELOPMENT
TRUST
RESPONDENT
Neutral
citation:
Tusk Construction Support Services (Pty) Ltd and
Another v Independent Development Trust
(Case no 364/2019)
[2020]
ZASCA 22
(25 March 2020)
Coram:
PETSE DP, ZONDI, DLODLO and MBATHA JJA and GORVEN AJA
Heard
:
26 February 2020
Delivered
:
25 March 2020
Summary:
Practice and procedure – citation of a trust as a party to
legal proceedings does not render the summons a nullity simply
because the trust lacks juristic personality – such summons
capable of amendment to reflect the trustees as parties in their
representative capacity.
ORDER
On
appeal from:
Gauteng Division of the High Court, Pretoria
(Mavundla J, sitting as court of first instance):
1 The appeal is
upheld with costs.
2 The order of the
court a quo is set aside and in its place is substituted the
following:
‘
1 The
applicants are granted leave to amend their combined summons by
substituting the names of the trustees for the time being
in their
representative capacity for the Independent Development Trust
wherever the name ‘Independent Development Trust’
appears.
2 The costs
occasioned by the respondent’s opposition to the application
for amendment shall be borne by the respondent.’
JUDGMENT
Petse
DP (Zondi, Dlodlo and Mbatha JJA and Gorven AJA concurring)
[1]
The facts of this appeal are uncontroversial. But the legal question
for determination arising from those facts is remarkable.
It is this:
is a summons that cited a trust rather than the trust’s
trustees in their representative capacity a nullity that
cannot be
cured by way of an amendment substituting the trustees for the trust?
[2]
The
appellants, Tusk Construction Support Services (Pty) Ltd (Tusk
Construction) and Joint Equity Investments in Housing (Pty) Ltd
(Joint Equity Investments), who share a commonality of interests in
this appeal, say that this cannot be. For its part, the respondent,
Independent Development Trust (IDT),
[1]
answers this question in the affirmative. In elaboration, IDT
contends that because it lacks juristic personality the summons
issued against it is a nullity and thus irredeemable. Hence, says
IDT, one cannot breathe life to a summons that was stillborn.
And
that the only avenue open to Tusk Construction and Joint Equity
Investments, if still minded to pursue their claim, is to withdraw
their action and institute fresh proceedings citing IDT’s
trustees in their representative capacity. Determining the two
divergent contentions is what confronts us in this appeal.
[3]
This appeal has its origin in two interlocutory applications that
were, for convenience, heard together and decided in a composite
judgment of Mavundla J in the North Gauteng Division of the High
Court, Pretoria (the High Court). In the main action Tusk
Construction
and Joint Equity Investments jointly sued IDT for
payment of the total sum of about R2,5 million. The first of the two
interlocutory
applications was for leave to amend the summons. The
second was for leave to consolidate the main action with another
action instituted
against the trustees of IDT in their representative
capacity in which identical relief was claimed. In the latter action
Tusk Construction
was joined by Nurcha Management Services (Pty) Ltd
and National Urban Reconstruction Housing Agency as co-plaintiffs.
The latter
action is not germane to this appeal. Thus, nothing more
need be said about it.
[4]
The main action to which this appeal relates was instituted on 16 May
2012. In this action the defendant was the IDT. It was
described in
the particulars of claim thus:
‘
The defendant
is the INDEPENDENT DEVELOPMENT TRUST; (Registration Number 669/91) a
Schedule 2 Public Entity in terms of the
Public Finance Management
Act 1 of 1999
; as amended with its head office situated at Glenwood
Office Park, Cnr Oberon and Sprite Streets, Faerie Glen, Pretoria.’
IDT
admitted this averment in its plea.
[5]
In due course, the action was enrolled for trial on 17 October 2013.
A few days preceding the trial, there was an unexpected
new turn of
events. For the first time, counsel for IDT took the point that the
citation of IDT as a defendant was irregular and
impermissible and
that IDT’s trustees should instead have been cited in their
representative capacity. Consequently, the
trial was adjourned with
Tusk Construction and Joint Equity Investments ordered to pay the
wasted costs occasioned by the adjournment.
[6]
In
order to meet the objection raised to IDT’s legal standing,
Tusk Construction and Joint Equity Investments delivered a
notice
under
rule 28(1)
[2]
of the
Uniform Rules of Court in terms of which they sought leave to amend
the combined summons by substituting all references
to IDT with a
reference to its trustees for the time being in their representative
capacity. To their chagrin, IDT (and by extension
the trustees)
baulked at this. IDT contended that the proposed amendment was
manifestly doomed to failure because the action instituted
against it
was a nullity. Thus, contended IDT, it could not be cured by the
proposed amendment. By now the battle lines had been
drawn. It became
necessary for Tusk Construction and Joint Equity Investments to bring
a substantive application in pursuit of
their quest to amend their
combined summons in accordance with rule 28(4).
[3]
[7]
Whilst the application for leave to amend was pending (and which IDT
opposed) the second action alluded to in para 3 above was
instituted.
As already indicated, this action was based on the same cause of
action as the pending proceedings, although only Tusk
Construction –
but not Joint Equity Investments – and two other different
entities featured in it.
[8]
With two actions now pending, it appears that as a tactical manoeuvre
a change of tack was called for. Tusk Construction and
Joint Equity
Investments brought an application in the High Court for the
consolidation of the two actions. This was conditional
upon its
application for amendment being unsuccessful.
[9]
On 29 May 2014 the two applications were heard together in the High
Court by Mavundla J. The learned Judge dismissed both applications
in
a composite judgment delivered on the same day.
[10]
Although the High Court did not furnish reasons for the dismissal of
the application for leave to amend – an aspect to
which I shall
return – it is nevertheless possible to gain an insight into
what motivated it to dismiss this application.
As it is apparent from
what it said in para 11 of its judgment, it approached the matter on
the basis that:
‘
The
application for amendment was refused principally because the court
was of the view that there is merit in the contention that
the action
was a nullity, without deciding the issue. In this regard, the very
fact that the first applicant proceeded to commence
another action
for substantially the same relief as in the first action,
demonstrates that by implication it conceded the correctness,
the
strength and prospect of the defence of nullity raised by the trust.
It is my considered view that the applicants in bringing
the
application for consolidation were trying to circumvent the need to
withdraw the action and tender the costs. The applicants
appreciated
the impossibility of reviving a still born action by virtue of its
nullity ab initio. To circumvent this difficulty
they then brought
the second action. I am of the view that, the action for
consolidation was not brought
bona fide
but was vexatious.
This conduct on the part of the applicants, in the total conspectus
of this application should weigh heavily
against the grant of the
consolidation and attracts the court’s strongest opprobrium to
be demonstrated by granting an attorney
and client costs order.’
The
appeal against the dismissal of the application for amendment in this
Court is with the leave of the High Court.
[11]
Before dealing with the contentions of the parties I consider that it
would conduce to clarity if I deal first with the law
relating to the
status of a trust. There have been numerous decisions of our courts
that grappled with the status of a trust. I
shall, however, not cite
them all in this judgment, still less analyse them. The concept of a
trust has its origins in English
law. It was analysed by this Court
more than six decades ago in
Crookes NO and Another v Watson and
Others
1965 (1) SA 277
(A);
[1965] 1 All SA 277
(A) at 297E where
the position was stated by Van den Heever JA as follows:
‘
In his
valuable monograph “
Trust en Stigting
” p. 25 Prof.
W. M. R. Malherbe says:
“
Watter reëls
aangaande die trust geld by ons? Seker nie die van die Engelse trust
nie. Met die resepsie van die Engelse terme
trust
en
trustee
het ons die Engelse trustreg nie oorgeneem nie. Reeds is ‘n
begin gemaak met die ontwikkeling van ‘n eie trustreg,
ooreenkomstig
die grondbeginsels van ons eie regstelsel.”
With that
observation I agree.’
[4]
[12]
In his judgment in
Braun v Blann & Botha NNO and Another
[1984] ZASCA 19
;
1984
(2) SA 850
(A);
[1984] 2 All SA 197
(A) Joubert JA said the following
at 859D-G:
‘
The trust of
English law forms an integral part of all common law legal systems,
including American law. In its strictly technical
sense the trust is
a legal institution
sui generis
. In South Africa, which has a
civil law legal system, the trust was introduced in practice during
the 19th century by usage without
the intervention of the Legislature
but the English law of trusts with its dichotomy of legal and
equitable ownership (or “dual
ownership” according to the
American law of trusts) was not received into our law. Our Courts
have evolved and are still
in the process of evolving our own law of
trusts by adapting the trust idea to the principles of our own law.
See
Crooks NO and Another v Watson and Others
1956 (1) SA 277
(A) at 297E-F and Coertze [Coertze in his doctoral thesis
Die
Trust in die Romeins-Hollandse Reg
(1948) at 133]:
“
Die wasdom en
ontwikkeling van die Treuhandidee in ons reg het plaasgevind onder
die invloed van die Engelse reg. Die Engelse terme
trust
en
trustee
is adopter maar nie die Engelse trustreg nie. ‘n
Eie trustreg is deur ons regspraktyg en deur ons Howe ontwikkel; maar
dis
nog ver van voltooi.”’
[13]
In
Commissioner for Inland Revenue v Friedman and Others NNO
[1992] ZASCA 190
;
1993
(1) SA 353
(A);
[1993] 1 All SA 306
(A);
55 SATC 39(A)
the same
learned Judge of Appeal said (at 370 E-I):
‘
Is a trust a
legal persona? According to the Anglo-American law of trusts a trust
has no legal personality. P W Duff
Personality in Roman Private
Law
Cambridge University Press (1938) at 206:
“
Maitland
showed [Collected Papers vol 3 (1911) 321-404)] that by vesting
property in trustees, rather than in corporations or associations,
English lawyers evaded many questions that have caused difficulty
abroad.”
See R W Ryan in his
unpublished Cambridge doctoral thesis entitled “The Reception
of the Trust in the Civil Law” (1959)
at 11: “A trust is
certainly not a legal person”. The position is the same in our
law of trusts. See
Commissioner for Inland Revenue v MacNeillie’s
Estate
1961 (3) SA 833
(A) at 840G-H:
“
Neither our
authorities nor our Courts have recognised it as a
persona
or
entity. It is trite law that the assets and liabilities in a trust
vest in the trustee.” Consult also
Braun v Blann and Botha
NNO and Another
[1984] ZASCA 19
;
1984 (2) SA 850
(A) at 859E-H: “In its
strictly technical sense the trust is a legal institution s
ui
generis
. . .The trustee is the owner of the trust property for
purposes of administration of the trust but
qua
trustee he has
no beneficial interest therein.”
It is clear
therefore that a trust is not an incorporated company. Nor is a trust
a body of persons unincorporate whose common funds
are the collective
property of all its members. There is also no basis for a submission
that because the statutory definition of
“person” in s 1
of the 1962 Act was extended to include a deceased estate, it should
by analogy be further extended
to include a trust. The conclusion is
inescapable that a trust is not a “person” within the
meaning of that word in
the 1962 Act.’
[14]
This principle was restated by Nugent JA in
Lupacchini NO and
Another v Minister of Safety and Security
2010 (6) SA 457
(SCA);
[2011] 2 All SA 138
(SCA) who said (para 1):
‘
A trust that
is established by a trust deed is not a legal person – it is a
legal relationship of a special kind that is described
by the authors
of
Honoré’s South African Law of Trusts
as “a
legal institution in which a person, the trustee, subject to public
supervision, holds or administers property separately
from his or her
own, for the benefit of another person or persons or for the
furtherance of a charitable or other purpose”.
In
Land and
Agricultural Bank of South Africa v Parker
Cameron JA elaborated:
“
[A trust] is
an accumulation of assets and liabilities. These constitute the trust
estate, which is a separate entity. But though
separate, the
accumulation of rights and obligations comprising the trust estate
does not have legal personality. It vests in the
trustees, and must
be administered by them – and it is only through the trustees,
specified as in the trust instrument, that
the trust can act . . . .
It follows that a
provision requiring that a specified minimum number of trustees must
hold office is a capacity-defining condition.
It lays down a
prerequisite that must be fulfilled before the trust estate can be
bound. When fewer trustees than the number specified
are in office,
the trust suffers from an incapacity that precludes action on its
behalf.”’
[15]
It should by now be self-evident from the analysis of the decisions
referred to in the preceding paragraphs that whilst a trust
lacks
legal personality it is nevertheless a legal entity
sui generis
(see, for example,
Land and Agricultural Bank of South Africa
v Parker and Others
2005 (2) SA 77
(SCA);
[2004] 4 All SA 596
(SCA) para 10;
Standard Bank of South Africa Ltd v Swanepoel NO
[2015] ZASCA 71
;
2015 (5) SA 77
(SCA); para 8).
[16]
It is trite that in legal proceedings by or against a trust the
trustees must be cited in their representative capacity and
not in
their private capacity. (See
Goolam Ally Family Trust t/a Textile,
Curtaining and Trimming v Textile, Curtaining and Trimming (Pty) Ltd
1989 (4) SA 985
(C) at 988 D-E;
Mariola and Others v
Kaye-Eddie NO and Others
1995 (2) SA 728
(W);
[1995] 3 All SA 287
(W) at 731 C-F;
Van der Westhuizen v Van Sandwyk
1996 (2) SA
490
(W);
Rosner v Lydia Swanepoel Trust
1998 (2) SA 123
(W) at
126H). Nonetheless, instances in which the trust was cited as such in
legal proceedings are not unknown (see, in this regard,
Rosner v
Lydia Swanepoel Trust
already referred to in this para at 127I;
BOE Bank Ltd (formerly NBS Boland Bank Ltd) v Trustee, Knox
Property Trust
[1999] 1 All SA 425
(D);
First National Bank of
South Africa Ltd v Strachan Family Trust
[2000] 3 All SA 379
(T)). And this practice has happened with more frequency lately.
[17]
The time is now opportune to immediately turn focus to what is at the
core of this appeal. It will be recalled that what lies
at the heart
of this case is the question whether the summons issued against IDT
as such is a nullity by reason only that the trust
was cited as a
defendant instead of the trustees in their representative capacity.
On this score, as already indicated, the contentions
of the parties
are diametrically opposed.
[18]
But first, a word needs to be said in relation to the well-entrenched
approach that courts are enjoined to adopt in matters
of this kind.
Stated in general terms it is that in the absence of any prejudice to
the other party, which cannot be compensated
by a costs order or some
other suitable order such as a postponement, an application for
amendment, unless it is brought in bad
faith, should ordinarily be
granted (see, for example,
Devonia Shipping Ltd v MV Luis (Yeoman
Shipping Co Ltd Intervening)
1994 (2) SA 363
(C);
[1994] 1 All SA
1
(C)
at 369F-370B;
Rosner v Lydia Swanepoel Trust
at 127D-H;
Imperial Bank Ltd v Barnard NO and Others
(349/12)
[2013]
ZASCA 42
;
2013 (5) SA 612
(SCA) (para 8 and the authorities therein
cited)).
[19]
It bears emphasising that the fact that the amendment sought might
lead to the defeat of the opposing party is not the sort
of prejudice
that is contemplated. Where the parties can be put back in the same
position as they were when the pleading which
is sought to be amended
was initially filed the amendment should be granted (see
Moolman v
Estate Moolman
1927 CPD 27
at 29). It is not without significance
that initially IDT resisted the claim on an acceptance that there was
no dispute as to the
identity of the true defendant. In opposing
summary judgment, Mr Hlanganani Mtshali, who described himself as a
legal advisor employed
by IDT, confirmed under oath that he was ‘duly
authorised to oppose the ... application for summary judgment.’
In making
this categorical averment the inference is inescapable that
Mr Mtshali did so at the behest of IDT’s trustees. Moreover,
the affidavit filed on behalf of IDT, opposing summary judgment,
comprehensively set out the basis upon which the claim was being
resisted. Yet not a single word was said about IDT’s lack of
legal personality.
[20]
Even more telling is the fact that the pre-trial minute signed by the
parties’ legal representatives on 10 September
2013 explicitly
recorded that: ‘Defendant did not record any prejudice save to
point out that the matter may not, in view
of the Defendant’s
recent amendment to its plea, be ripe for hearing’. There was,
at that stage, no allusion to nor
complaint about the fact that the
status of IDT as a defendant was called into question.
[21]
In
support of his contention that the summons in this case was not a
nullity, counsel for the appellants cited
Rosner
v Lydia Swanepoel Trust
.
[5]
There the respondent, being a trust, sued in its name and did not
cite the trustees in their representative capacity. The defendant’s
argument that the summons was a nullity and thus could not be amended
was resoundingly rejected by the court on the ground that
what
obtained was a case of misdescription. Goldstein J had this to say
(at 128D-E):
‘
In
casu
the situation is quite different. The trust exists as a discrete
legal institution. Indeed, cases in the name of a trust are not
unknown, the
Goolam Ally Family Trust
case being an example
(cf 987D-E). Had the citation remained unchanged and unnoticed, the
effect of any judgment granted in the
proceedings would be no
different from what it will be now that the amendment has been
granted. Any amount to be payable by or
to the trustees will remain
payable out of or into the same fund as it would otherwise have been.
In these circumstances nothing
of the substance has changed and all
that the amendment does is to give linguistic effect to the legal
rule that a trust lacks
legal personality.’
[22]
In
Imperial Bank Ltd v Barnard and Others
(referred to in para
18 above) Mpati P writing for the unanimous court, albeit in a
different context, had no difficulty in confirming
the decision of
the court a quo which had allowed an amendment of a summons to
substitute a close corporation (under liquidation)
for its
liquidators who had instituted action in their representative
capacity whose citation was not sanctioned by s 386(4)
(a)
of
the Companies Act 61 of 1973. Similarly, as in this case, the
defendant in
Imperial Bank
had contended that the plaintiffs’
attempt to substitute the liquidators with the close corporation (in
liquidation) amounted
to the introduction of a new plaintiff and that
the corporation’s claim had by then become prescribed. In
rejecting this
argument this Court held that the amendment granted by
the court a quo did not have the effect of substituting the
plaintiff, but
merely corrected the misnomer in the particulars of
claim. And that the claim sought to be enforced in the original
summons and
particulars of claim remained the same after the
amendment. Consequently the appeal against the grant of the amendment
was dismissed.
Pretty much the same situation obtains in this appeal.
What the proposed amendment sought to achieve was purely the
substitution
of the trustees in their representative capacity for
IDT. The claim and everything else relating thereto remained the
same.
[23]
In
this regard the remarks of McCall J in
BOE
Bank
[6]
are particularly apposite. The learned Judge said (at 436f-g):
‘
It may well
be that it would have been more correct to describe the principal
debtor as the named Trustees, in their capacity as
Trustees of the
Trust or as the Trustees for the time being of the Trust. Certainly,
as appears from
Rosner
’s case (
supra
), where
there is litigation against a trust, the trustees in their
representative capacity and not the trust, as such, ought to
be
cited.
That however, is not
the end of the matter because it is clear that, notwithstanding the
requirement of the provisions of section
6 of Act 50 of 1956 that the
identity of the creditor, the surety and the principal debtor must be
capable of ascertainment by
reference to the provisions of the Deed
of Trust, extrinsic evidence, other than the evidence of the parties
as to their negotiations
and consensus may be led in order to
identify one of those parties.’
[24]
The principle to which McCall J referred in
BOE Bank
has been
confirmed by this Court in several cases (see, for example,
Sapirstein and Others v Anglo African Shipping Co (SA) Ltd
1978
(4) SA 1
(A);
[1978] 4 All SA 474
(A) at 12B-E;
Kohlberg v Burnett
NO and Others
[1986] ZASCA 32
;
1986 (3) SA 12
(A);
[1986] 2 All SA 283
(A) at
25F-26B).
[25]
In
Hyde Construction CC v The Deuchar Family Trust and Another
[2014] ZAWCHC 118
;
2015 (5) SA 388
(WCC) the full court of the
Western Cape Division of the High Court was called upon to determine,
amongst other things, whether
the Deuchar Family Trust which had sued
in its own name was properly before the court as a litigant. After
analysing several judgments
of our courts dealing with the legal
standing of a trust, Rogers J, writing for a unanimous court, had
this to say (para 47):
‘
[T]he
applicant was cited as the Deuchar Family Trust. Of course, a trust
is not a juristic entity. Whether it is procedurally acceptable
to
cite a trust by name as a litigant, and whether in that regard rule
14 is applicable to trusts (as to which, see
Cupido v Kings Lodge
Hotel
1999 (4) SA 257
(E) at 265B-C), need not be decided,
because no objection was ever taken in the court
a quo
or for
that matter on appeal to this mode of citation. One commonly refers
to a trust by name even though it is not a juristic entity.
Given the
legal character of a trust, the citation of a trust by name in
litigation must, I think, be understood as a reference
to the
trustees for the time being of the trust, whoever they may be.’
I
fully endorse that observation. To the extent that it can be said to
be a departure from existing authority, it is appropriate
that our
law of trusts, as it has been evolving over the years, is developed
along these lines.
[26]
At the
hearing of this appeal counsel for IDT was asked as to what would
have happened if the belated point relating to IDT’s
status as
a defendant had not been raised. And whether in those circumstances
it would have been open to IDT to impugn the validity
of the ensuing
judgment purely because IDT lacked legal personality. Understandably
so, counsel did not embrace such a proposition.
The reason therefor
is not far to seek. It is so because where a trust has been cited in
its name (in line with the burgeoning
trend mentioned earlier) such
citation is generally understood as a reference to the trustees. This
is, however, not to say that
a trust as such is possessed of legal
personality. It does not, but remains ‘a legal institution sui
generis.’
[7]
Consequently,
a trust’s citation as such in legal proceedings does no more
than take cognisance of its existence as a legal
institution sui
generis.
[27]
Counsel for IDT, however, had another string to his bow. He submitted
that to allow the amendment sought would occasion IDT
substantial
prejudice. This was so, continued the argument, because IDT would be
deprived of its right to raise prescription to
the claim sought to be
enforced by Tusk Construction and Joint Equity Investments, which
would otherwise be available to it.
[28]
In
considering a similar argument, this Court in
Imperial
Bank
–
referred to in para 18 above – with reference to two of its
previous decisions
[8]
said:
‘
...a
plaintiff is not precluded by prescription from amending his or her
claim, “provided the debt which is claimed in the
amendment is
the same or substantially the same debt as originally claimed, and
provided, of course, that prescription of the debt
originally claimed
has been duly interrupted.”’
[9]
(Citations omitted.) This is precisely what obtains in this case.
[29]
In the middle of para 9 of the judgment, the court continued:
‘
[T]hus, when
faced with an opposed application for an amendment to a summons the
fundamental question a court should consider is
“whether or not
the service of the summons in the previous action on the respondent
interrupted the running of prescription
of the applicant’s
rights against the respondent”. And in considering whether or
not prescription was interrupted by
service of the previous summons
the right sought to be enforced by means of the amendment must be the
same or substantially the
same right as originally sought to be
enforced, “(f)or the substance rather than the form of the
previous process must be
considered in determining whether or not it
interrupted prescription”.’ (Citations omitted.)
[30]
In this case, as already indicated, all that Tusk Construction and
Joint Equity Investments sought to remedy was to insert
the proper
citation of a defendant, in this instance by citing the IDT’s
trustees in their representative capacity. Nothing
more and nothing
less. Accordingly, had the amendment been granted, the right sought
to be enforced would have remained exactly
the same. Faced with this
insurmountable hurdle, counsel for IDT was constrained to accept
that, as the notice of amendment was
filed before the period of
prescription had run its course, prescription would not have availed
IDT.
[31]
In these circumstances it follows that the conclusion of the High
Court was erroneous. It therefore falls to be set aside given
that
the amendment sought ought to have been granted. This conclusion
inevitably calls for a reconsideration of the question of
costs
associated with the application for amendment. The general rule is
that an applicant for an amendment essentially seeks an
indulgence.
This entails that such applicant must ordinarily bear all costs
occasioned by the application barring instances where
the opposition
was unreasonable.
[32]
It was submitted on behalf of Tusk Construction and Joint Equity
Investments that IDT’s opposition was grossly unreasonable
and
verging on vexatiousness. Not the slightest attempt was made in IDT’s
heads of argument to counter this submission. In
all the
circumstances I am satisfied that there is merit in the submission
that the costs occasioned by the amendment must be for
IDT’s
account both in this Court and the High Court.
[33]
Accordingly, the costs occasioned by IDT’s opposition to the
amendment sought should be for its account. None of the
bases upon
which the application for amendment was opposed had a realistic
prospect of succeeding. This is particularly so given
that all that
the desired amendment sought to achieve was to rectify a
misdescription of the trust to the extent that it had to
be
represented by its trustees in legal proceedings. It must be
emphasised that we no longer live in the Justinian era when, if
a
mistake was made by a litigant, a claim or defence would be
forfeited. That courts have to eschew undue formalism was aptly
explained by Wessels J more than a century ago in
Whitaker v Roos
and Bateman
1911 TPD 1092
at 1102-3 in these terms:
‘
The object of
the Court is to do justice between the parties. It is not a game we
are playing in which, if some mistake is made,
the forfeit is
claimed...[W]e all know...that mistakes are made in pleadings, and it
would be a grave injustice, if for a slip
of the pen, or error of
judgment...litigants are to be mulcted in heavy costs...Therefore the
Court will not look to technicalities,
but will see what the real
position is between the parties.’
This
principle has been applied consistently ever since.
[34]
It remains to address one final aspect relating to the absence of
reasons in support of the High Court’s decision to
dismiss the
application for amendment.
[35]
Earlier, I mentioned that despite the fact that the amendment sought
was opposed, the High Court did not furnish its reasons
as to why the
application had to fail. The importance of giving reasons for court
decisions has been underscored in various decisions
of this Court.
And the failure to do so was described as unacceptable in
Botes
and Another v Nedbank Ltd
1983 (3) SA 22
(A);
[1983] 2 All SA 153
(A). There, this Court went on to say that ‘where the matter is
opposed and the issues have been argued, litigants are entitled
to be
informed of the reasons for the Judge’s decision’. And
that ‘a reasoned judgment may well discourage an
appeal by the
loser’.
[36]
In his article published in (1998) 115 The
South African Law
Journal
at 116-28, the former Chief Justice M M Corbett explained
the rationale for this salutary practice in these terms:
‘
In addition,
should the matter be taken on appeal, the Court of appeal has a
similar interest in knowing why the Judge who heard
the matter made
the order which he did. But there are broader considerations as well.
In my view, it is in the interests of the
open and proper
administration of justice that the courts state publicly the reasons
for their decisions. Whether or not members
of the general public are
interested in a particular case – and quite often they are –
a statement of reasons gives
some assurance that the court gave due
consideration to the matter and did not act arbitrarily. This is
important in the maintenance
of public confidence in the
administration of justice.’
[10]
[37]
In similar vein the former Chief Justice of the High Court of
Australia, the Rt Hon Harry Gibbs, writing in The
Australian Law
Journal
(vol 67A 1993) said the following:
‘
The citizens
of a modern democracy – at any rate in Australia – are
not prepared to accept a decision simply because
it has been
pronounced, but rather are inclined to question and criticise any
exercise of authority, judicial or otherwise. In
such a society it is
of particular importance that the parties to litigation – and
the public – should be convinced
that justice has been done, or
at least that an honest, careful and conscientious effort has been
made to do justice, in any particular
case, and the delivery of
reasons is part of the process which has that end in view.’
[11]
That the High Court determined a hotly contested legal question in
this case on the basis of assumptions without a reasoned judgment
must be deprecated.
[38]
In the result the following order is made:
1 The appeal is
upheld with costs.
2 The order of the
court a quo is set aside and in its place is substituted the
following:
‘
1 The
applicants are granted leave to amend their combined summons by
substituting the names of the trustees for the time being
in their
representative capacity for the Independent Development Trust
wherever the name ‘Independent Development Trust’
appears.
2 The costs
occasioned by the respondent’s opposition to the application
for amendment shall be borne by the respondent.’
______________________
X
M PETSE
DEPUTY
PRESIDENT
Appearances
For
appellant: B C Stoop SC
Instructed
by: Coetzer & Partners, Pretoria
Honey
Attorneys, Bloemfontein
For
respondent: K Tsatsawane SC
Instructed
by: Gildenhuys Malatji Inc., Pretoria
Webbers
Inc., Bloemfontein.
[1]
The Independent Development Trust was registered in 1991 under Deed
of Trust No 669/91. It was established by the government
of the
Republic of South Africa to, inter alia, enhance the standard of
living of South Africans, especially of disadvantaged
communities
through the facilitation of equal opportunities through investment
in socio-economic development including education
and training and
provision of basic services supportive of rapid human development
and is subject to the strictures of the
Public Finance Management
Act 1 of 1999
.
[2]
Rule 28(1)
reads:
‘
Any party
desiring to amend a pleading or document other than a sworn
statement, filed in connection with any proceedings, shall
notify
all other parties of his intention to amend and shall furnish
particulars of the amendment.’
[3]
Rule 28(4)
reads:
‘
If an
objection which complies with subrule (3) is delivered within the
period referred to in subrule (2), the party wishing to
amend may,
within 10 days, lodge an application for leave to amend.’
Compare:
Rule 15
which empowers courts to grant a substitution of parties on
substantive application. See further: D Harms Civil Procedure in the
Supreme Court (2019) B-15.1; D E Van Loggerenberg and E Bertelsmann
Erasmus Superior Court Practice (2015) D1-159.
[4]
‘What rules of trust are applicable with us? Certainly not
that of the English trust. With the reception of the English
terms
trust and trustee, we did not take over the English trust law.
Already a start has been made in developing our own trust
law, in
accordance with the principles of our own legal system.’
[5]
Referred to in para 17 above.
[6]
Para 17 above.
[7]
See Braun in para 13 above at 859E-H.
[8]
Neon and Cold Cathode Illuminations (Pty) Ltd v Ephron
1978 (1) SA
463
(A);
[1978] 2 All SA 1
(A) at 474A; Sentrachem Ltd v Prinsloo
1997 (2) SA 1
(A) at 15J-16D.
[9]
Para 8.
[10]
M M Corbett ‘Writing a judgment: address at the first
orientation course for new judges’
(1998) 115 SALJ, 116
at
117.
[11]
H Gibbs ‘Judgment writing’ (1993) 67A Australian Journal
494 at 494.