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[2012] ZAWCHC 260
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RMB Unit Trust Ltd v Madikiza (10998/2011) [2012] ZAWCHC 260 (26 April 2012)
Republic
of South Africa
IN
THE HIGH COURT OF SOUTHE AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case
No: 10998/2011
In
the matter between:
RMB
UNIT TRUSTS LIMITED
..................................................................................................
Applicant
And
DR
C F MADIKIZA
................................................................................................................
Respondent
And
FIRSTRAND
BANK LIMITED t/a FIRST NATIONAL BANK
.................................................
Third
Party
JUDGMENT
DELIVERED: THURSDAY, 26 APRIL 2012
SABA,
AJ
INTRODUCTION
[1]
This is an application in terms of Rule 30 of the Uniform Rules of
Court. The applicant seeks an order in the following terms:
1.1.
Condoning the late delivery of applicant’s notice in terms of
Rule 30; and
1.2.
Setting aside the respondent’s third party notice and third
party annexure;
1.3.
..........
1.4.
Costs.
The
applicant is represented by Mr Joubert and the respondent is
represented by Mr Kantor.
THE
PARTIES
[2]
The applicant is RMB Unit Trusts limited trading as RMB Asset
Management, a public company with limited liability registered
and
incorporated in terms of the laws of the Republic of South having its
principal place of business at 268 West Avenue, Centurion,
Gauteng.
The respondent is a major female doctor residing at 32 Ayeshire
Street, Montana, Western Cape,
[3]
The applicant seeks the setting aside of the third party notice on
the ground that it is an irregular step, further, that -
3.1.
Convenience is not a basis for invoking Rule 13;
3.2.
There is no overlap of issues between the applicant’s claim
against: respondent and the respondent’s claim against
the
third party and the facts in the two matters are not similar;
3.3.
The respondent has no right to claim indemnity or contribution if his
claim is for damages,
[4]
It is contended that the delay of two months in delivering a notice
in terms of Rule 30 was caused by the applicant’s
attempt to
attack the respondent’s pleadings by filing an exception. It is
contended further that the withdrawal of the exception
was as a
result; of the following advice the applicant received from the
respondent’s attorneys in correspondence dated 25
October 2011;
the step you have taken is highly
irregular as in Cape Town exceptions are not heard in Third Division
but must be set down for
hearing in the ordinary cause and in the
Fourth Division’.
[5]
Respondent opposes the condonation for the late delivery of the
notice in terms of Rule 30 on the following grounds:
5.1.
the applicant is precluded from employing Rule 30 since it had taken
a further step by raising an exception to the respondent’s
third party notice;
5.2.
the delay in delivering the Rule 30 application has prejudiced her as
she would have launched a claim against the third party
more than 8
months ago.
On
the merits, respondent opposes the application on the basis that the
lis
between RMB and herself and the
lis
between hersef and FNB overlap therefore it would be convenient if
the claims are heard simultaneously. Furthermore, that a contribution
by the third party towards her liability to applicant (if
established) is the basis for a third party joinder.
The
following facts are in the main common cause
[6]
On 7 February 2009 the applicant and the respondent entered into a
written agreement in terms of which respondent invested R1
million
with the applicant in an investment product called RMB Money Market
Unit Trusts. The relevant clause (clause : 6 at page
7) of the
agreement reads as follows:
“
Without
prejudice to any other rights which RMB AM may have in terms hereof
or at law
,
the
investor agrees that RMBAM shall be entitled to recover from the
investor any amount of money paid to the investor
;
which
the investor is not entitled to for whatsoever reason, including
interest thereon”.
[7]
On 19 June 2009 the respondent repurchased her units valued at R290
000-00. Instead of making one single payment of R290 000
to the
respondent, two further payments of R290 000-00 and R294 300-00 (R584
300, 00) were paid into respondent’s account
held by Firstrand
Bank Limited t/a First National bank (“third party”) in
error caused by the applicant’s employee.
[8]
On being sued by the applicant for the repayment of R584 300-00 which
was paid to her in error, the respondent issued out a
third party
notice and a third party annexure to the third party in terms of Rule
13 of the Uniform Rules of Court, claiming the
following:
“
4.1.
An indemnification against, alternatively contribution in respect of,
applicant claim against respondent, to the extent established.
4.2.
In the alternative to paragraph 4.1 above payment of the sum of R584
300 and in respect of the other relief for which respondent
may be
found to be liable to applicant in the application under the above ,
case number, alternatively payment of whatever amount
and in respect
of other relief in respect of which, respondent may be found to be
liable to applicant in the application under
the above case number.
4.3.
Payment of the sum of R1 100 100, 00 and interest thereon are tempore
rriorae to date of payment.
4.4.
Costs of suit.
4.5.
Further
/
alternative relief’.
[9]
She based her claim on the fact that she, on the advice of one Mooi
an employee of the third party who was acting within the
course of
his employment, had drawn a cheque for R570 000, 00 in favour of FNB
attorneys, Randall Titus and Associates who were
to pay the money
over to the applicant. She also drew other cheques in respect of
investments which are not related to this matter.
She only realized
that she had been defrauded by Mooi on discovering that the monies
were never paid over to the intended payees.
[10]
On 12 October 2011 applicant filed an exception in terms of Rule 23
of the Uniform Rules of Court based on the fact the respondent’s
use of Rule 13 was irregular. On 25 October 2011 the applicant
withdrew the exception and thereafter brought the present application
on 8 December 2011.
[11]
The issues for determination are whether the applicant has succeeded
in showing a good cause for its delay in filing the notice
in terms
of Rule 30 and whether the third party procedure amounts to an
irregular step in the circumstances of this case.
Legal
Position
[12]
Van Reenen J in Gumede v Road Accident Fund 2007 (b) SA 304 at 307 D
said the following:
“
Condonation
of the non-observance of the court orders and rules is not a mere
formality. A party seeking condonation must satisfy
the Court that
there is sufficient cause for excusing the non-compliance. Whether
condonation should be granted or not is a matter
of discretion that
has to be exercised having regard to all the circumstances of the
particular case”.
Rule
13 (1) (Uniform Rules of Court) provides:
(1)
Where a party in any action claims –
(a)
as against any other person not a party to the action (in this rule
called ‘a third party’) that such party is entitled,
in
respect of any relief claimed against him, to a contribution or
indemnification from such third party, or
(b)
any question or issue in the action is substantially the same as a
question or issue which has arisen or will arise between
such party
and the third party, and should be properly determined not only as
between parties to the action but also between such
parties and the
third party or between any of them, such party may issue a notice,
hereinafter referred to as a third party notice,
as near as may be in
accordance with Form 7 of the First Schedule, which notice shall be
served by the Sheriff.
Rule
30 (Uniform Rules of Court) provides:
(1)
A party to a cause in which an irregular step has been taken by any
other party may apply to court to set it aside.
(2)
An application in terms of subrule (i) shall be on notice to all
parties specifying, particulars of the irregularity or impropriety
alleged, and may be made only if-
(a)
the applicant has not himself taken a further step in the cause with
knowledge of the irregularity;
(b)
the applicant has, within ten days of becoming aware of the step, by
written notice afforded his opponent an opportunity of
removing the
cause of complaint within ten days.
(c)
the application is delivered within fifteen days after the expiry of
the second penod mentioned in paragraph (b) of subrule
(2),
(3)
If at the hearing of such application the court is of opinion that
the proceeding or step is irregular or improper, it may set
it aside
in whole or in part, either as against all the parties or against
some of them, and grant leave to amend or make any such
order as to
it seems meet
(4)
..........................
[13]
Mr Joubert submitted
1
that the applicant has fully explained; the delay; for the late
delivery of a notice in terms of section 30. He submitted further
that the exception which was taken and later withdrawn does not
amount to a further step and does not preclude the applicant from
relying on Rule 30. He relied for this proposition on a passage in a
Erasmus Superior Court Practice
(commentary on rule 30) at B1-192
(“Erasmus”),
where
the following is stated:
It
has previously been held that a notice of exception amounts to a
further step as contemplated in this rule. This approach has
been
rejected and it has been held
1
that an excipient is concerned merely to make full use of the
remedies that the rules provide, for an attack on a defective
pleading.
Where the grounds for the exception and the rule 30
application were the same, it was held that it could not be said the
filling
of the exception either (a) advanced the proceedings one step
nearer completion or (b) manifested an intention to pursue the cause
despite the irregularity”.
[14]
In Jowel v Bramwell-Jones and Others 905 WLD at 604F-H:
“
A
further step in the proceedings is one which advances the proceedings
one stage nearer completion and which, objectively viewed,
manifests
an intention to pursue the cause despite the irregularity. Seen in
that light, the filing of a notice of exception, which
contains as an
alternative application to set pleadings aside under the provisions
of Rule 18(2) read with Rule 30, does not constitute
the taking of a
further step within the meaning of Rule 30(2). Such an excipient is
concerned merely to make full use of the remedies
which the Rules
provide for an attack on a defective pleading
”
.
[15]
Based on the passage from .Erasmus and the dictum in Jowell supra, I
am persuaded by Mr Joubert’s submission that the
applicant is
not precluded from relying on Rule 30. I am satisfied that the
applicant’s reason for filing the exception was
justified. I
find the respondent’s contention that it has suffered prejudice
as a result of the late delivery of the notice
to be misplaced. There
was nothing stopping the respondent from instituting a claim, against
the third party long before the applicant
brought a claim against
her. In the circumstances, I find that there is sufficient cause for
excusing the late filing of the notice
in terms of Rule 30. !t
follows therefore that the application for condonation ought to
succeed.
[16]
Mr Joubert submitted that the respondent’s averment that it
would be convenient
:
for the respondent’s claim against the third party to be heard
together with the claim of: the applicant against the respondent,
can
never be the basis for invoking the third party procedure. He
contended that the respondent’s claim against the third
party
is based on the alleged fraud committed by an employee of the third
party against her and that is not \ relevant to the applicant’s
claim against her. Further that her entitlement to relief do not
depend on the same or similar questions of law or fact applicable
in
applicant’s claim
1
against her. He argued that the respondent cannot invoke the
provisions of Rule 13 for a claim based on damages. He relied for
this proposition on Erasmus’s commentary to rule 13 (1) (a)
which is as follows:
“
It
was held in Eimsco (SA) (Pty) Ltd v P Mattioda’s Construction
Co (SA) (Pty) Ltd
2
that
a right to indemnity arises only from contract, express or implied,
or by statute or where it is implied by law. A party who
invokes the
rule must, therefore
,
show
that there is a right
,
arising
from a contract or by statute or by law, to an indemnity in respect
of, or a contribution towards, the claim of the plaintiff.
A claim
for the payment of damages cannot be equated with a right to claim
indemnity; it is the converse of such right'’.
I
agree that Eimsco is authority for the applicant’s proposition
on this issue.
[17]
Mr Kantor submitted that the existence of the current disputes
between the parties was caused by the applicant’s negligent
overpayment of funds into respondent’s account with the third
party. That this negligence created an opportunity for an
:
employee of the third party to misappropriate the said funds. He
submitted further that the resolution of this matter depends on
the
circumstances surrounding the negligent over-payment to respondent.
Evaluation
[18]
It is not clear from the papers on what basis the respondent claims
indemnity in respect of or a contribution towards the applicant’s
claim. Her claim against the third party is based on the fact that
FNB is vicariously liable for Mooi’s alleged wrongdoing
within
the scope of his employment. This is a delictual claim, a fact which
explains Mr Kantor’s reference to factual causation
in his
submissions. On the other hand, the dictum in Eimsco supra is clear
that ‘
a right of indemnity
arises
only from contract,
express or implied, or by statute or where it is implied by
law
(emphasis added). That is not
the case with the respondent, I am therefore persuaded by Mr
Joubert's submission that the respondent
is precluded from relying on
section 13.
[19]
It is my view that respondent has not placed any facts to
substantiate his claim that the negligence on the part of the
applicant
created an opportunity for Mooi to defraud her. It is also
not clear how a claim based on fraud involving an employee of the
third
party, the third party, the attorneys of the third party
(Randall and Titus) as well as Delway Clothing CC can be said to
overlap
with the applicant’s claim against her based only on an
overpayment of funds. I mention all these names because they form
part of the respondent’s application in terms of rule 13. It is
my view that if the situation (with the third party procedure)
would
be allowed to stand, that would cause substantial prejudice to the
applicant. I am also in full agreement with Mr Joubert’s
submission that convenience is not a basis for invoking Rule 13,
especially in the circumstances of this case.
[20]
It is also my view that the respondent’s claim for R1 100 000,
00 against the; third : party is another indication that
her claim
against the third party does not overlap; wjth applicant’s
claim against her. It is therefore my judgment that
if the situation
(with the third party procedure) would be allowed to stand, that
would cause substantial prejudice to the applicant.
I find that there
is merit in the submission that the two claims (applicant against
respondent and respondent against the third
party) cannot be
determined on the same or similar questions of law or fact.
[21]
For the reasons stated above, it is my opinion that the respondent’s
step in issuing a third party notice and a third
party annexure was
irregular.
[22]
In the result, the following order is made:
“
The
application is granted in terms of prayers 1, 2 and 4 of the notice
of motion.”
N
SABA
(Acting
Judge of the High Court)
1
Jowell
v Bramwell-Jones
1998 (1) SA 836
(W) at 904
2
1967
(1) SA 326
(N) at 332H-333A