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[1993] ZASCA 54
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Trope and Others v South African Reserve Bank (641/91) [1993] ZASCA 54; 1993 (3) SA 264 (AD); [1993] 2 All SA 278 (A) (31 March 1993)
Case Nr 641/91
E du Plooy
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
In the
matter between:
LIONEL NORMAN TROPE
ZOONDEL BRENNER
AARON
BRENNER
Appellants
and
THE SOUTH AFRICAN RESERVE BANK
Respondent
Coram
: JOUBERT ACJ, KUMLEBEN, F H GROSSKOPF JJA, HOWIE
et KRIEGLER AJJA
Heard:
Delivered
:
9 March 1993 31 March 1993.
2
JUDGMENT
F H GROSSKOPF JA:
This is an appeal against the judgment of
McCreath J, sitting in the Transvaal Provincial Division (reported
sub nom
Trope v South African Reserve Bank and Another and Two Other Cases
1992(3)
SA 208 (T)). The court
a quo
upheld an exception taken by the respondent
to the appellants' amended particulars of claim on the ground that they were
vague and
embarrassing. The present appeals relate to three of 38 virtually
identical actions, brought by various plaintiffs against the respondent
as first
defendant and Volkskas Bank Ltd ("Volkskas") as second defendant, claiming
damages from them jointly and severally. These
are delictual actions for the
recovery of pure economic or financial loss, based on the alleged wrongful and
negligent conduct of
the respondent and Volkskas. (Cf
Administrateur, Natal v
Trust Bank van Afrika Bpk
1979(3) SA 824 (A) at 829H-
3 830B;
Lillicrap, Wassenaar and Partners v Pilkinqton
Brothers (SA) (Pty) Ltd
1985(1) SA 475 (A) at 498C-E.)
Before the
merits of the appeal can be considered the
appellants must first show that
the order of the court a
quo
is appealable. The court
a quo
granted the
appellants leave to appeal to this court on a number of
grounds set forth in their notice of application for
leave to appeal. Thereafter this court granted the
appellants further leave to appeal on certain additional
grounds set out in the said notice, but subject to the
respondent's right to argue that the order of the court a
quo
is not appealable.
Leave to appeal is of course only one of the
jurisdictional requirements for a civil appeal from a
provincial or local division sitting as a court of first
instance. The other is that the decision appealed
against must be a "judgment or order" within the meaning
of those words in the context of s 20(1) of the Supreme
Court Act 59 of 1959
(Zweni v Minister of Law and Order
4 1993(1)
SA 523 (A) at 531B-D). The question whether a
decision is an appealable "judgment or order" is not
always easy to
determine, as appears from a number of
authorities referred to in the
Zweni
judgment. It will
serve no purpose to re-examine those authorities. It has
been held in
Zweni's
case,
supra
, at 532J-533B:
"A 'judgment or order' is a decision which, as a general principle, has three
attributes, first, the decision must be final in effect
and not susceptible of
alteration by the Court of first instance; second, it must be definitive of the
rights of the parties; and,
third, it must have the effect of disposing of at
least a substantial portion of the relief claimed in the main proceedings
(
Van Streepen & Germs (Pty) Ltd
case
supra
[1987(4) SA 569
(A)] at 586I-587B;
Marsay v Dilley
[1992] ZASCA 114
;
1992 (3) SA 944
(A) at 962C-F). The
second is the same as the oft-stated requirement that a decision, in order to
qualify as a judgment or order,
must grant definite and distinct relief
(Willis Faber Enthoven (Pty) Ltd v Receiver of Revenue and Another
1992(4) SA 202 (A) at 214D-G)."
The decision of the court
a
quo
, and its effect, must therefore be considered in order to determine
whether it qualifies as an appealable "judgment or order".
Before I deal with the facts of the present
5 case I should first make a few general observations
relating to exceptions, and more particularly exceptions
on the ground
that a pleading is vague and embarrassing.
Rule 18(4) of the Uniform Rules of Court
provides as follows:
"Every pleading shall contain a clear and concise statement of the material
facts upon which the pleader relies for his claim, defence
or answer to any
pleading, as the case may be, with sufficient
particularity to enable the opposite party to reply
thereto."
(And see Rule 18(12).) Previously "minor blemishes
in,
and unradical embarrassments caused by, a pleading" could
be cured by further particulars (
Purdon v Muller
1961(2)
SA 211 (A) at 215F), but requests for further particulars
to pleadings are no longer competent. Exceptions that
pleadings are vague and embarrassing have been allowed in
the past even though the embarrassment might have been
removed by the furnishing of particulars in response to a
request. (See
Osman v Jhavary & Others
1939 AD 351
at
365-366, a case which dealt with the practice at that
6
time pertaining in Natal.) The position is now
regulated by Rule
23(1) of the Uniform Rules of Court, which provides that where a party intends
taking an exception that a pleading
is vague and embarrassing, he shall first
afford his opponent an opportunity of removing the cause of complaint. The
embarrassment
and consequent prejudice complained of can indeed often be removed
by an appropriate amendment providing further and better particularity.
No such
preliminary step is required, on the other hand, where the exception is taken on
the ground that the pleading lacks averments
necessary to sustain an action or
defence.
The respondent in the present matter duly gave the appellants notice in terms
of Rule 23(1) that unless they removed the cause of
complaint set out in the
notice it intended taking an exception to their particulars of claim on the
ground that they were vague
and embarrassing. The appellants thereupon amended
their particulars of claim, but the respondent was still not
7 satisfied and
gave them notice once again that it
intended taking an exception that their amended
particulars of claim were vague and embarrassing. Their
response to this request was that they did not intend
amending their particulars of claim, which they averred
were in order. The
respondent then took an exception in
terms of Rule 23(1) on the ground that the appellants'
amended particulars of claim were vague and embarrassing.
There was never any suggestion that the respondent also
objected to the particulars of claim on the ground that
they did not disclose a cause of action. The exception
was nothing more than it purported to be, i.e. an
exception that the amended particulars of claim were
vague and embarrassing. Both in substance and in form
the notice of exception unequivocally assails the manner
in which the particulars of claim were formulated and not
the validity of the causes of action sought to be alleged
therein. That is how the parties treated the exception
throughout and how the learned judge
a quo
viewed it and
8
dealt with it in his judgment. The following statement
appears in the
judgment of the court a
quo
,
supra
, at 217
H-I, immediately
preceding the order:
"Finally, I should state that I have not considered it necessary to deal with
certain aspects of the law raised in the very comprehensive
arguments advanced
on behalf of the plaintiffs. Those aspects are, in my judgment, apposite in the
case of an exception on the grounds
that no cause of action is disclosed by the
pleadings, but are not appropriate for purposes of the present
exception."
It appears, therefore, that the learned judge a
quo
was
under no misapprehension as to the true nature of the
exception he was dealing with in this case.
However,
Mr Puckrin
, who appeared for the
appellants, maintaining that substance and not form
should prevail, submitted that the true nature of the
exception was that the particulars of claim disclosed no
cause of action, and not that they were merely vague and
embarrassing. A similar argument had been advanced, for
the first time, when counsel for the appellants sought
leave to appeal in the court
a quo
, and it appears from
9 the
following extract from the judgment granting leave
that counsel managed to persuade the learned judge
a quo
that there was substance in his argument:
"Although the decision of this court was directed at the question as to whether
it was incumbent upon the plaintiff to allege additional
facts in order to
clarify what was meant by the status of the bank and the position of the
registrar respectively and that there
was vagueness and embarrassment by virtue
of the fact that no such further allegations had been made, I have come to the
conclusion
that the decision of this court has a further effect. If the Reserve
Bank and the registrar of banks, occupying as they do a particular
statutory
position, have a common law duty of care towards persons such as the plaintiffs
which goes further or transcends specific
statutory duties then a cause of
action may lie without the necessity for any further averments to be made.
Moreover the plaintiffs
may not wish, and indeed may not be able, to make any
further averments in regard to this particular aspect. If that be so, this
court's decision in regard to that aspect of the matter strikes at the
plaintiff's cause of action and to that extent does have a
final effect on the
main action as such. It would in effect deprive the plaintiffs of a possible
cause of action."
I cannot, with respect, agree
with the remarks
of the learned judge that the decision of the court
a quo
"has a further effect", that it "strikes at the
10 plaintiff's cause of
action", or that "it would in effect
deprive the plaintiffs of a possible cause of action". I
do not believe
that the appellants are unable to amplify
their particulars of claim in the relevant respects.
Their refusal to do so may have a detrimental effect on
material aspects of their case, but cannot in my view
affect or change the true nature of the order of the
court a
quo
. I shall revert to this aspect in due
course.
The appealability of the order of the court a
quo
depends,
inter alia
on whether it has a final
and definitive effect. The effect of an order upholding
an exception has recently been considered by this court
in
Group Five Building Ltd v The Government of the
Republic of South Africa, represented by the Minister of
Public Works and Land Affairs
. (The judgment, which has
not yet been reported, was delivered on 18 February 1993
in case no 400/91.) The particulars of claim in that
case were held to be excipiable on the ground that they
11
disclosed no cause of action. One of the issues which
arose on
appeal was whether the trial judge, upon
granting the exception, was correct
in dismissing the
action at the same time. In the course of his
judgment
Corbett CJ
pointed out (at p 26 of the typed
judgment)
that in cases where an exception has successfully been
taken to a plaintiff's initial pleading on the ground
that it discloses no
cause of action,
"the invariable practice of our Courts has been to order that the pleading be
set aside and that the plaintiff be given leave, if
so advised, to file an
amended pleading within a certain period of time".
This practice
would apply
a fortiori
where an exception
has been granted on the
ground that the pleading is vague
and embarrassing, a ground which strikes at the
formulation of the cause of - action and not its legal
validity.
The following extract from the judgment of
Bristowe J
in
Johannesburg Municipality v Kerr
1915 WLD
35, at 37, was quoted with approval in the
Group Five
12 .
Building Ltd
case,
supra
(at p 31-32 of the typed
judgment):
"As was said by INNES, C.J., in
Coronel v Gordon Estate Gold Mine
(1902,
T.S., at p. 115) 'the effect of a successful exception is that the entire
declaration is quashed,' meaning as I understand
that it is an absolute bar to
any relief being obtained on that declaration. But it does not take the
declaration off the file or
place the case in the same position as though no
declaration had been delivered. Otherwise the proper order when an exception is
upheld would be to extend the time for filling a declaration, not to give leave
to amend. Leave to amend presupposes that there is
something which can be
amended. Still less can it be said that a successful exception destroys the
action. If this were so then the
case of
Currey v Germiston Municipality
(1910, L.L.R. 191), where an order for absolution under rule 41 was granted
after a declaration had been successfully excepted to
and had not been amended,
would have been wrongly decided. It seems to me therefore that the action in the
present case is still
on foot and that there is a declaration in
existence."
This court held in the
Group Five
Building Ltd
case,
supra
, that the judge of first instance had erred
in dismissing the action, and the learned Chief Justice
remarked as follows in this regard (at p 28-29 of the
typed judgment):
"An order dismissing an action puts an end to the
13
proceedings and means that if the plaintiff wishes to pursue his claim on a
different pleading he must start
de novo
. This may have drastic
consequences for the plaintiff, particularly where it results in the
prescription of the claim. In my opinion,
it would be contrary to the general
policy of the law to attach such drastic consequences to a finding that the
plaintiff's pleading
discloses no cause of action."
In the
present matter the respondent in its notice of
exception actually asked for
an order dismissing the
claims, but the court
a quo
instead granted
the
appellants leave to amend their particulars of claim.
Where an exception is granted on the ground
that a plaintiff's particulars of claim fail to disclose
a cause of action, the order is fatal to the claim
as
pleaded
and therefore final in its effect.
(
Liquidators.
Myburqh, Krone & Co. Ltd. v Standard Bank of South Africa
Ltd and Another
1924 AD 226
, at 229, 230.) Leave to
amend will be of no avail to a plaintiff in such a case
unless he is able to amend his particulars of claim in
such a way as to disclose a cause of action. On the
other hand, where an exception is properly taken on the
14 ground that the
particulars of claim are vague and
embarrassing, by its very nature the order would not be
final in its
effect. All that a plaintiff would be
required to do in such a case would be
to set out his
cause of action more clearly in order to remove the
source of embarrassment.
Mr Puckrin
told us that the appellants are not
able to amplify or amend their particulars of claim in
certain respects, and added that they do not intend, in
any event, to do so. He stated that they would rely on
their particulars of claim as pleaded. But a party
cannot, by adopting such an attitude, effectively change
an order which is not final in its effect, and therefore
not appealable, into one which is. A similar argument
was rejected by this court in
South African Motor
Industry Employers' Association v South African Bank of
Athens Ltd
1980(3) SA 91 (A). In that case the court of
first instance upheld an exception that the plaintiff's
particulars of claim were vague and embarrassing. On
15 appeal this court,
mero motu
, raised the question whether
the order was appealable. It concluded that it was not.
In the course of his judgment Miller JA held as follows
at 98 C-F:
"Appellant's counsel's further contention that the action is 'at an end' because
'in the absence of an amendment', the action cannot
be continued, is, I think,
fully met by what was said by SCHREINER JA in the
Pretoria Garrison
case
[1948(1) 8A 839 (A) ], that is that
'...regard
should be had not to whether the one
party or the other has by the order
suffered an
inconvenience or disadvantage in the litigation
which nothing
but an appeal could put right,
but to whether the order bears directly
upon
and in that way affects the decision in the
main suit'.
(At 870.)
In a case decided in the Federal Supreme
Court in Salisbury, CLAYDEN FJ, when
considering
whether an order striking out a paragraph in the
plaintiff's
declaration was interlocutory, held
that
'the decision on the application
to strike out,
based as it was not on the contention that the
claim was
unjustified in law but on the manner
in which it was pleaded, was an
interlocutory
order'.
(See
Harper v Webster
1956 (2) SA 495
(FC) at
504.)
Notwithstanding that we are now concerned not with
an application to
strike out but with an exception,
those words are, as
Mr Kentridqe
,
for the
defendant, contends, of equal application to this
case."
16 It was also held in the
S.A. Motor
Industry
Employers' Association,
case,
supra
, at 96 H, (and cited
with approval in
Zweni's
case,
supra
, at 532 I) that in
determining the true effect of an order
"not merely the form of the order must be considered but also, and
predominantly, its effect".
The court further concluded at 97 B-C
that
"determination of the effect of the order made therefore requires examination of
the true nature of the exception which the Court
upheld".
Counsel
for the appellants relied on these
dicta
in
support of his submission that the order of the court a
quo
is
final in its effect and therefore appealable.
The submission was that the
respondent's exception in the
present case was an attack on the appellant's
cause of
action. Counsel further contended that by allowing the
exception the court
a quo
effectively erased material
averments in support of the appellants' cause of action,
leaving truncated and defective particulars of claim. In
short, counsel contended that, though
in form
the
17 exception was
based on vagueness and embarrassment,
in
substance
it was one directed at the absence of a cause
of action.
To determine the validity of this submission
one must examine the appellant's amended particulars of
claim, the respondent's exception thereto and the
judgment of the court
a quo
.
In the particulars of claim it is alleged that
the appellants invested money with one W A Vermaas
("Vermaas") and certain companies controlled by Vermaas
("the Vermaas companies"). The estate of Vermaas was
subsequently sequestrated, while the Vermaas companies
were liquidated, resulting in financial loss to the
appellants. The appellants' claims against the
respondent are based, in the first place,- on certain
unlawful foreign exchange transactions of Vermaas or the
Vermaas companies. The appellants allege,
inter alia
,
that the respondent, "by virtue of its status [or its
position] as central bank", had a common law legal duty
towards the appellants to prevent the occurrence of
18
financial loss to them as a result of such transactions.
The
appellants' claims against the respondent are based, in the second place, on the
allegation that Vermaas and the Vermaas companies
unlawfully conducted the
business of a banking institution. The particulars of claim state that the
Registrar of Banks ("the Registrar")
was an employee of the respondent and that
he performed his duties under the control of the respondent. The appellants
allege,
inter alia
, that the Registrar "by virtue of his position as
such", and the respondent, "by virtue of its position as central bank", had a
common
law legal duty towards the appellants to prevent Vermaas and the Vermaas
companies from unlawfully conducting the business of a banking
institution..
Whether the exception was indeed well founded is not relevant to this enquiry
and need not be considered. For present purposes the
exception can conveniently
be divided into the following three categories:
19
1. T
he exception set forth in paras 1.2 and 2.1 of the
respondent's notice of exception (ad paras 6 and 8 of the particulars of
claim
):
The appellants conceded that the order of the court
a quo
upholding the exception taken in these paragraphs is not appealable. In my view
this concession was correctly made.
2.
The exception set forth in paras 22, 3.1, 3.2,
3.4,
3.5, 4.2, 4.3, 4.4, 4.5, 4.6, 6.1, 6.2, 7.1, 7.2,
9.1,
9.2 and 9.3 of the respondent's notice of exception
(ad
paras 8, 9, 10, 22.6, 22.7 and 23.1 of the particulars
of
claim
):
The main complaint of the respondent, as set out in these paragraphs of the
notice of exception, is that it is not clear what the
appellants intend to
convey by the expression "by virtue of its status [or its position] as central
bank", particularly in relation
to the alleged legal duties of the respondent.
The same
20
applies to the expression "by virtue of his position as
such" in
relation to the Registrar's alleged legal
duties.
It was contended on behalf of the appellants in the court
a quo
and in
this court that the concept "status as central bank" is a notorious one. The
court a
quo
did not agree with that submission and held (at 213B-G) that
the respondent was prejudiced by this expression because it was not
possible for
the respondent to determine from this bald allegation the case it had to meet.
In my judgment this finding did not have
the effect of depriving the appellants
of any cause of action; it merely required them to clarify, the expression, and
thus their
cause of action. I cannot, therefore, agree with the submission that
the effect of the court
a quo
upholding the exception in this regard, was
to deny the appellants the right to rely on the status of the respondent as
central bank.
21
It is trite that a party has to plead - with
sufficient clarity and particularity - the material facts upon which he
relies for the conclusion of law he wishes the court to draw
from those facts
(Mabaso v Felix
1981(3) SA 865 (A) at 875 A-H; Rule 18(4)). It is not
sufficient, therefore, to plead a conclusion of law without pleading the
material
facts giving rise to it.
(Radebe and Others v Eastern Transvaal
Development Board
1988(2) SA 785(A) at 792J-793G).
The appellants brought delictual actions based on the wrongful and negligent
conduct of the respondent. The appellants accepted that
they had to plead
material facts which would justify the conclusion that the respondent owed them
a legal duty, i.e. that the respondent's
conduct was wrongful. The appellants
submitted that this had in fact been done adequately, and if the respondent
wished to contend
to the contrary, the proper course would have been to take an
exception that the particulars of claim did not disclose a cause of
22
action. No such exception was in fact taken by the
respondent; it
never contended that the particulars of claim failed to disclose a cause of
action; its objection was that it was not
clear what the appellants intended to
convey by the allegation that the respondent owed them a legal duty "by virtue
of its status
[or position] as central bank". It was not the respondent's
contention that the facts pleaded by the appellants could not in law
justify the
conclusion that a legal duty existed; its objection was that it was not clear
from the particulars of claim on which
facts the appellants were actually
relying for their legal conclusion, and the respondent therefore maintained that
the appellants
were obliged to clarify the position.
That is indeed what the court a
quo
decided (at 214D) in holding that
it was incumbent on a plaintiff to plead with greater clarity the facts on which
he wished to rely
for his conclusion of law. The court a
quo
concluded
(at 214E):
23
"And if the pleadings lack sufficient clarity to enable the defendant to
determine those facts and hence the case he has to meet,
the pleadings are vague
and embarrassing."
In the case of
S.A. Motor Industry
Employers' Association, supra
, this court likewise had to determine the true
nature of an exception to a plaintiff's particulars of claim. The exception
taken
in that case was that the plaintiff had not "pleaded the material facts"
on which it relied for a particular averment and, because
of such failure, the
defendant did not know "on what basis" the plaintiff relied. The court concluded
at 97C-D that the true nature
of the exception in that case was "that the
defendant was embarrassed by the vagueness or insufficiency of the facts
averred". In
my judgment the true nature and effect of the exception taken in
the instant case is no different.
The exception set out in para 4.2 of the notice of exception led the court
a quo
to find (at 215E) that para 10.2 of the particulars of claim was
also
24
"inherently contradictory and accordingly vague and
embarrassing". It cannot be said, in my opinion, that the exception taken in
this particular paragraph of the notice is anything but
an exception that the
pleading is vague and embarrassing.
3.
The exception set forth in paras 5.1, 5.2, 5.3, 12.1, 12.2, 12.3 and
12.4 of the respondent's notice of exception (ad paras 4, 19,
20, 27, 38 and 45
of the particulars of claim):
In paragraph 19 of the particulars of claim the appellants averred that "but
for" the respondent's negligent conduct the appellants
would not have suffered
any damage, while in paragraph 20, read with paragraph 4, it was averred that
"but for" the negligent conduct
of Volkskas the appellants would not have
suffered any damage. The respondent contended in its exception to these
paragraphs that
the averments contained in paragraph 19 were in conflict with
those contained in
25
paragraphs 4 and 20, and were accordingly vague and
embarrassing. A
similar objection was set out in
paragraph 12 of the notice of exception as
regards
paragraph 27 and 20 of the particulars of claim, read
with
paragraphs 4, 38 and 45.
The court
a quo
dealt with this aspect of the
matter as follows in its judgment,
supra
, at 2151-216C:
"On behalf of the excipient it is argued that the allegations in para 19 are in
conflict with those in paras 4 and 20. The plaintiffs
counter this by submitting
that what is being alleged is a multiple causation of plaintiffs' damages. The
argument overlooks the
fact that para 4 qualifies all the plaintiffs' claims and
paras 19 and 20 are not in the alternative. The words 'but for' used in
para 4,
together with the further allegation in para 20 that the plaintiff would not
have suffered damage but for the second defendant's
negligent conduct, are
therefore open to the interpretation that the first defendant's conduct was not
a cause of the damages sustained.
There is, on that interpretation, also no
basis for the allegation in para 21 of the particulars of claim that the first
and second
defendants are jointly and severally liable to the plaintiff.
In my view the question as to whether there is embarrassment of a nature which
prejudices the first defendant is conceivably arguable.
Had this been the only
basis on which an exception had been taken, it may very well not have warranted
earnest consideration. However,
as, in my view, the
26
plaintiff's particulars of claim require correction in the other respects
referred to in this judgment, I consider that the vagueness
in this paragraph
should also be cured."
The court
a quo
further held (at
217F-G) that the same
ambiguity arose in respect of the other
paragraphs
referred to above and that it should also be cured.
The
appellants did not agree with the above conclusion of the court
a quo
and
submitted that it had misconceived the principles of causality. Be that as it
may, the true nature of the exception in this respect
was that the pleadings
were vague and embarrassing. That is also how the court
a quo
viewed the
matter.
It should be borne in mind that the court
a quo
did not dismiss the
actions, but gave the appellants leave to amend their particulars of claim. By
availing themselves of that opportunity
the appellants can, in my view, cure the
deficiencies found by the court
a quo
in their particulars of claim. The
finding was not that the claim was unjustified in law, but that it had been
27
pleaded in a manner lacking the degree of clarity
required by Rule 18(4).
For the reasons set out above I therefore conclude that the order of the
court
a quo
does not meet
the requirements of appealability set out in
Zweni's
case,
supra
. It follows that the appeal is not properly before this
court and must be struck off the roll. It also follows, one should perhaps
add,
that the time period afforded the appellants in the court
a quo
to amend
their particulars of claim is to run from the date of delivery of this
judgment.
The respondent asked that the costs of three counsel be allowed. I do not
think that the difficulty or complexity of the case before
us was so
extraordinary as to warrant the employment of three counsel
(Fisheries
Development Corporation of SA Ltd v Jorgensen and Another
1980(4) SA 156 (W)
at 172C-H).
28
The appeal is accordingly struck off the roll
with costs, which shall include the costs consequent upon the employment of
two counsel.
F H GROSSKOPF JA
JOUBERT ACJ)
KUMLEBEN JA)
HOWIE AJA) Concur.
KRIEGLER AJA)