Anderson v Batley (3095/09) [2010] ZAECGHC 20 (12 March 2010)

16

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE – GRAHAMSTOWN)

CASE NO. 3095/09

DATE HEARD: 11/2/10

DATE DELIVERED: 12/3/10

NOT REPORTABLE

In the matter between:

MARK GREGORY ANDERSON

APPLICANT

and

MARGARET LOUIS BATLEY

RESPONDENT

In an application to amend the plaintiff’s particulars of claim, it was argued by the defendant that the proposed amendments rendered the particulars of claim excipiable and that the proposed amendments should therefore not be granted. After considering the particulars of claim against the terms of a written agreement containing a sole memorial and non-variation clause, the court held that the amendments should not be allowed. The application was dismissed with costs.

JUDGMENT

PLASKET, J:

[1] The applicant, as plaintiff, instituted an action against the respondent, as defendant, in which he sought damages based on breach of contract and, in the alternative, on unjust enrichment. The respondent filed a notice of intention to except to the particulars of claim, to which the applicant responded by filing a notice of intention to amend his particulars of claim. The respondent objected to the proposed amended particulars of claim on the basis that they did not address, and in fact compounded, the excipiable nature of the original pleading. I am called upon to determine whether or not leave to amend ought to be granted. The amendments are: an additional sentence in paragraph 3 of the particulars of claim, as well as paragraphs 10, 11, 12 and 13 of the proposed particulars of claim. The details of these proposed amendments will be dealt with in detail below.

[A] AMENDMENT OF PLEADINGS: THE

PRINCIPLES

[2] The principles that apply to applications for amendments are well known. Rule 28 of the Uniform Rules regulates the procedure to be followed when a party seeks to amend a pleading. The application of the rule involves the exercise of discretion by the court to which an application to amend has been made. That discretion must obviously be exercised judicially.1 In Moolman v Estate Moolman and another2 Watermeyer J held that the ‘practical rule adopted seems to be that amendments will always be allowed unless the application to amend is mala fide or unless such amendment would cause an injustice to the other side which cannot be compensated by costs, or in other words, unless the parties cannot be put back for the purposes of justice in the same position as they were when the pleading which it is sought to amend was filed’.

[3] Why this is the correct approach to applications to amend is crisply stated by Wessels J in Whittaker v Roos and another; Morant v Roos and another:3

'This Court has the greatest latitude in granting amendments, and it is very necessary that it should have. 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. We are here for the purpose of seeing that we have a true account of what actually took place, and we are not going to give a decision upon what we know to be wrong facts. It is presumed that when a defendant pleads to a declaration he knows what he is doing, and that, when there is a certain allegation in the declaration, he knows that he ought to deny it, and that, if he does not do so, he is taken to admit it. But we all know, at the same time, that mistakes are made in pleadings, and it would be a very grave injustice, if for a slip of the pen, or error of judgment, or the misreading of a paragraph in pleadings by counsel, litigants were to be mulcted in heavy costs. That would be a gross scandal. Therefore, the Court will not look to technicalities, but will see what the real position is between the parties.'

The same approach is evident in Rosenberg v Bitcom4 in which Greenberg J referred to the fact that, although the granting of an amendment amounts to the granting of an indulgence, ‘the modern tendency of the Courts lies in favour of an amendment whenever such an amendment facilitates the proper ventilation of the dispute between the parties’.

[4] Caney J, in Trans-Drakensberg Bank Ltd (Under Judicial Management) v Combined Engineering (Pty) Ltd and another5 undertook a comprehensive review of the case law on amending pleadings. Having done so, he held:6

‘These observations, in all four Provinces, make it clear, I consider, that the aim should be to do justice between the parties by deciding the real issues between them. The mistake or neglect of one of them in the process of placing the issues on record is not to stand in the way of this; his punishment is in his being mulcted in the wasted costs. The amendment will be refused only if to allow it would cause prejudice to the other party not remediable by an order for costs and, where appropriate, a postponement. It is only in this relation, it seems to me, that the applicant for the amendment is required to show it is bona fide and to explain any delay there may have been in making the application, for he must show that his opponent will not suffer prejudice in the sense I have indicated. He does not come as a suppliant, cap in hand, seeking mercy for his mistake or neglect. Having already made his case in his pleading, if he wishes to change or add to this, he must explain the reason and show prima facie that he has something deserving of consideration, a triable issue; he cannot be allowed to harass his opponent by an amendment which has no foundation. He cannot place on the record an issue for which he has no supporting evidence, where evidence is required, or, save perhaps in exceptional circumstances, introduce an amendment which would make the pleading excipiable … or deliberately refrain until a late stage from bringing forward his amendment with the purpose of catching his opponent unawares … or of obtaining a tactical advantage or of avoiding a special order as to costs … .’

[5] An amendment that would render a pleading excipiable should not, generally speaking, be allowed. In the Trans-Drakensberg Bank case,7 Caney J stated that a party may not ‘save perhaps in exceptional circumstances, introduce an amendment which would make the pleading excipiable’. And in Du Plessis and another v De Klerk and others8 Van Dijkhorst J set out the position thus:

‘An amendment which would render a pleading excipiable should not be allowed. Whether a pleading would or would not become excipiable is a matter of law which should be decided by the Court hearing the application for amendment. It would be incorrect, in my view, to hold that it is arguable that the amendment would not render the pleading excipiable, allow it, and send the parties away to prepare for another battle on exception on the same point.’

The test is whether the amended pleading ‘will (not may) be excipiable’.9

[B]

THE PARTICULARS OF CLAIM AND THE AGREEMENT

(a) The Particulars of Claim

[6] The particulars of claim in the form in which the plaintiff wishes them to be amended allege that a partly written, partly oral agreement was entered into by the plaintiff and the defendant in terms of which the plaintiff would project- manage work to be done on the defendant’s property at Hogsback. It is then alleged – and this is the first amendment sought -- that the parties did not sign ‘the written part of the agreement but the plaintiff was entitled to assume from the conduct of the defendant that she intended to bind herself to the material terms contained therein’.

[7] The particulars of claim proceed to list what are described as the material terms of the agreement, express, tacit and implied, as that: (a) the plaintiff would project-manage work to be done on the defendant’s property; (b) the defendant would periodically furnish the plaintiff with directives in respect of the work to be done; (c) the defendant would grant the plaintiff a right of first refusal to purchase the property and in exchange the plaintiff would waive his project management fee; and (d) the plaintiff would forward his invoices to the defendant who would pay the plaintiff on presentation of the invoices.

[8] It is then alleged that from February 2007 to July 2008, the defendant gave the plaintiff directives and he carried out the work that had to be done, fulfilling all his obligations in terms of the agreement. Despite presenting his invoices to the defendant, and notwithstanding demand, she failed to pay all of them and she has also failed to grant the plaintiff a right of first refusal to purchase the property.

[9] The plaintiff alleges that the defendant has repudiated or materially breached the agreement and that he has, as a result, elected to cancel it. He claims damages in the amount of R504 829.56, made up of a project management fee of R54 000.00, estimated cost of water of R13 000.00 and estimated cost of work of R437 829.56.

[10] In paragraph 10 of the proposed particulars of claim, the plaintiff details the nature of the project management fee as being ‘the monetary value of the right of first refusal to purchase the property, and the monetary value of the labour expended by the plaintiff on the improvement of the property alternatively the income forfeited by the plaintiff as a result of expending his labour on the improvement of the property’. In paragraph 11, the claim for the estimated cost of water is described as ‘an estimate of the sum expended by the plaintiff on water for the property, which the defendant was liable to pay on presentation of the plaintiff’s invoice in respect thereof’. In paragraphs 12 and 13, the estimated cost of the work is described as ‘the sums that were invoiced by the plaintiff but to date remain unpaid by the defendant and/or the fair and reasonable market value of the work carried out by the plaintiff at the property’. Reference is also made to the report of a quantity surveyor who made an estimate of the cost of certain work allegedly performed by the plaintiff. These four paragraphs were inserted into the proposed particulars of claim and are objected to by the defendant.

[11] It is pleaded in the alternative that if no valid agreement is found to have existed, the plaintiff was ‘in the position of a bona fide possessor/occupier of the property’ and the defendant was unjustifiably enriched at his expense. The damages claimed on this basis are the same as those claimed on the basis of contract.

(b) The Written Agreement

[12] The preamble to the agreement -- clause 2 -- states that the client -- defined as the defendant – ‘is desirous of undertaking the project but is unable to do so due to absenteeism’. The project manger – defined as the plaintiff – ‘is agreeable to undertake the project on behalf of the client at no charge but on the basis that the client shall be liable for all disbursements in respect of the project’.

[13] Clause 3 deals with the project manager’s responsibilities to the client. Clause 3.1 describes the project manger as the client’s agent and states that his mandate is to ‘undertake the project including the administration and management thereof’. Clause 3.3 imposes an obligation on the project manger to ‘keep the client informed of the progress of the project’ and clause 3.4 states that the project manager ‘shall not incur any debts on behalf of the client without the client’s prior written approval’.

[14] Clause 4.1 imposes an obligation on the client to provide the project manager expeditiously ‘with all information and/or directives as are required by the project manager in the performance of his obligations in terms of this agreement’.

[15] Clause 4.2 grants the project manager, his wife and children the right to occupy a cottage on the property free of charge, but he is obliged to pay for water and electricity that is consumed and to pay for refuse removal. Clause 4.3 creates a right of first refusal. It provides:

‘Whilst this agreement subsists the client grants a right of first refusal to the project manager to purchase the property or any portion thereof for such purchase price and upon such terms and conditions as the client may stipulate on the following terms and conditions, namely, that within 7 (seven) days after receipt of a written advice of the purchase price and the terms and conditions of the sale the project manager shall advise the client in writing delivered to the client of his election whether or not to purchase the property or any portion thereof for such purchase price and on such terms and conditions. Provided that in the event of the project manager electing not to purchase or failing to advise the client of his election within the stipulated time then the client shall have the right to sell the property or any portion thereof to any third party provided that she shall not be entitled to do so at a lower price or upon less onerous terms and conditions as those originally offered to the project manager without again offering the land to the project manager at such lower price or upon such less onerous terms and conditions, in which event the project manager shall again advise the client in writing within 7 (seven) days of his election in accordance with the above provisions.’

[16] Clause 5 deals with the execution of the project, providing in clause 5.1 that the project commences on the commencement date (being the date of the last signature of the agreement) and ends on the completion date (being a date within two years of the commencement date). Clause 5.3 provides that the client ‘shall not have the right to issue instructions to or interfere with, hinder or obstruct any of the project manager’s contractors employed in respect of the project’. Clause 5.7 provides that the project is at the risk of the project manager who indemnifies the client against ‘any liability, loss, claim or proceeding whatsoever arising out of damages caused thereto and undertakes to insure against such loss’.

[17] Clause 6 allows for the termination of the agreement by either party and clause 7 provides for arbitration for the settling of any dispute between the parties ‘in regard to any matter arising out of this agreement or its interpretation or rectification…’.

[18] Finally clause 10.2 contains a sole memorial and non-variation clause. It provides as follows:

‘This agreement constitutes the entire agreement between the parties and no terms or conditions not contained herein shall be of any force or effect. No agreement purporting to vary any of such terms and conditions shall be of any force or effect unless reduced to writing and signed by the parties.’

[C] THE OBJECTIONS

(a) The Grounds of Objection

[19] The first objection raised by the defendant is that the written agreement contains a sole memorial and non-variation clause and that this creates a conflict with the allegation that the agreement was partly written and partly oral -- and results in the particulars of claim being excipiable.

[20] The second ground relates to the damages claimed. The defendant argues that the written agreement makes no provision for a project management fee, and that in any event the damages claimed under this head do not constitute a project management fee; that the written agreement does not postulate a claim for the estimated cost of water in the circumstances set out in the particulars of claim; and that the claim for the estimated cost of the work flies in the face of the written agreement which prohibits the plaintiff from incurring debts on behalf of the defendant without prior written approval when the particulars of claim make no allegation that such approval had been obtained.

(b) The First Ground of Objection

[21] It will be recalled that paragraph 3 of the proposed particulars of claim alleges that the agreement was partly written and partly oral, and that, although the written part was not signed by the parties, ‘the plaintiff was entitled to assume from the conduct of the defendant that she had intended to bind herself to the material terms contained therein’.

[22] Clause 10.2 of the written agreement provides that ‘[t]his agreement constitutes the entire agreement between the parties and no terms or conditions not contained herein shall be of any force or effect’ and that ‘[n]o agreement purporting to vary any of such terms and conditions shall be of any force or effect unless reduced to writing and signed by the parties’.

[23] The defendant argues that clause 10.2 is a material term of the agreement. In my view this is correct: it is difficult to conceive of a situation in which a sole memorial and non-variation clause will not be a material term. That being so, it is a clause of the written contract to which, according to paragraph 3 of the particulars of claim, the defendant bound herself, as did the plaintiff.

[24] The effect of such a clause was definitively dealt with in SA Sentrale Ko-op Graanmaatskappy Bpk v Shifren en andere,10 Steyn CJ holding as follows:

‘Waar partye so 'n bepaling in hul kontrak ingelyf het, d.w.s. 'n bepaling wat nie slegs ander bedinge nie, maar ook homself teen mondelinge wysiging heet te beveilig, kan ek geen rede vind waarom die een party nie die ander daaraan gebonde kan hou nie. Hul klaarblyklike doel met so 'n bepaling is om te waak teen die geskille en bewysmoeilikhede wat by mondelinge ooreenkomste kan ontstaan. Om albei daarteen te beskerm kom hulle uitdruklik ooreen dat mondelinge wysigende ooreenkomste, ook wat die verskansende beding self betref, al word hul animo contrahendi aangegaan, tussen hul van nul en gener waarde sal wees. Indien 'n party, uit hoofde juis van 'n mondelinge wysiging, belet sou word om hom op so 'n beding te beroep, sou ons hier met 'n soort kontrak te doen hê wat sonder meer nie deur 'n hof afgedwing word nie. Dit sou 'n opvallende afwyking wees van die elementêre en grondliggende algemene beginsel dat kontrakte wat vryelik en in alle erns deur bevoegde partye aangegaan is, in die openbare belang afgedwing word. (Wells v SA Alumenite Co., 1927 AD 69 op bl. A 73; Marlin v Durban Turf Club and Others , 1942 AD 112 op bl. 131). Dit is geen antwoord hierop om aan te voer dat dieselfde van die latere mondelinge ooreenkoms gesê kan word nie. Dit staan op 'n ander voet, want die partye het self hul eie bevoegdheid aan bande gelê deur hulle aan 'n formele vereiste

te bind, en vooruit bepaal dat so 'n ooreenkoms nie afgedwing kan word nie. Deur so 'n ooreenkoms ten spyte daarvan in stand te hou, sou die Hof aan die party wat hom op ongeldigheid beroep, juis dié voordeel ontneem wat hy met die verskansende bepaling vir homself wou verseker en waarop hy luidens daardie bepaling geregtig is. Dit gaan ook nie op om te beweer dat dit strydig met die openbare belang sou wees om so 'n beperking te erken nie. Die beperking sluit nie kontraktuele vryheid uit nie. Die partye sou hul kontrak nog na willekeur kan wysig, mits hulle aan die self-opgelegde formele vereiste voldoen.’

[25] Shifren was revisited, in the light of the Constitution, in Brisley v Drotsky.11 The conclusion of the majority was that Shifren remained good law. The position was encapsulated thus by Cameron JA in a separate concurring judgment:12

‘The appellant's attack invites us to reconsider that decision. We are obliged to do so in the light of the Constitution and of our 'general obligation', which is not purely discretionary, to develop the common law in the light of fundamental constitutional values. For the reasons the joint judgment gives, I do not consider that the attack can or should succeed. The Shifren decision represented a doctrinal and policy choice which, on balance, was sound. Apart from the fact of precedent and weighty considerations of commercial reliance and social certainty, that choice in itself remains sound four decades later. Constitutional considerations of equality do not detract from it. On the contrary, they seem to me to enhance it. As the joint judgment observes (para [7]), it is fallacious to suggest that insistence on only written alterations to a contractual regimen necessarily protects the strong at the expense of the weak. In many situations the reverse is likely to be true. And where a contracting party, strong or weak, seeks to invoke the writing-only requirement in deceit or to attain fraud, the courts will not permit it to do so.’

[26] He, like the majority he concurred with, expressed the view that ‘neither the Constitution nor the value system it embodies give the courts a general jurisdiction to invalidate contracts on the basis of judicially perceived notions of unjustness or to determine their enforceability on the basis of imprecise notions of good faith’.13

[27] On the basis of Shifren and Brisley, I conclude that clause 10.2 of the agreement is inconsistent with the allegation in paragraph 3 of the particulars of claim that the agreement was partly written and partly oral, to the extent that the plaintiff relies on terms other than those contained in the written agreement. This is so either because this purported oral expansion of the written agreement conflicts with the sole memorial aspect of clause 10.2 or the non-variation aspect. The amendment to paragraph 3 sought by the plaintiff does not remedy the defect: paragraph 3 remains excipiable. No exceptional circumstances have been suggested that would allow for the amendment to be granted nonetheless.

(c) The Second Ground of Objection.

[28] The second ground of objection goes to the three heads of damages set out in paragraph 9, and, in particular, expanded on in paragraphs 10, 11, 12 and 13 of the particulars of claim.

(i) The Project Management Fee.

[29] The claim for the project management fee is based on paragraph 4.3 of the particulars of claim which states that it was a material term of the agreement that the defendant would grant the plaintiff ‘a right of first refusal to purchase the property and in exchange the plaintiff would waive his project management fee’.

[30] This averment is, however, inconsistent with the terms of the written agreement. It says, in clause 2.2, that the plaintiff is ‘agreeable to undertake the project on behalf of the client at no charge but on the basis that the client shall be liable for all disbursements in respect of the project’. The right of first refusal, set out in clause 4.3, is not conditional at all.

[31] In explanation of the claim, paragraph 10 of the particulars of claim states that the project management fee is ‘the monetary value of the right of first refusal to purchase the property, and the monetary value of the labour expended by the plaintiff on the improvement of the property alternatively the income forfeited by the plaintiff as a result of expending his labour on the improvement of the property’.

[32] All three of these explanations for the project management fee are at odds with clause 2.2 that stipulates that the plaintiff would undertake the work ‘at no charge’, the defendant only being responsible for the payment of his disbursements.

[33] I am of the view, accordingly, that the proposed paragraph 10 of the particulars of claim is excipiable and that, no exceptional circumstance being present, the application to amend the particulars of claim to include it must fail.

(ii) The Estimated Cost of Water.

[34] The second head of damages is described as the estimated cost of water. Paragraph 11 of the proposed particulars of claim explains that this is ‘an estimate of the sum expended by the plaintiff on water for the property, which the defendant was liable to pay on presentation of the plaintiff’s invoice in respect thereof’.

[35] It is not clear from paragraph 11 whether the water referred to is water consumed by the plaintiff and his family while in occupation of the cottage on the property. If it is, then clause 4.2 provides that the plaintiff is liable to pay for it and no cause of action against the defendant arises. If, however, it is a disbursement for which the defendant is liable, then clause 3.4 places an obligation on the plaintiff to refrain from incurring debts on the defendant’s behalf without her prior written approval. No averment is made in the particulars of claim that approval in terms of clause 3.4 was obtained and neither is it alleged that an invoice in respect of the cost of water was ever presented to the defendant.

[36] I am accordingly of the view that the proposed paragraph 11 is excipiable and that, no exceptional circumstances being present, the application to amend the particulars of claim to include it must fail.

(iii) The Estimated Cost of Work.

[37] Paragraph 12 of the proposed particulars of claim states that the estimated cost of work is ‘the sums that were invoiced by the plaintiff but to date remain unpaid by the defendant and/or the fair and reasonable market value of the work carried out by the plaintiff at the property’. Paragraph 13 refers to particulars in respect of the estimated cost of work compiled by a quantity surveyor, whose report is attached. Paragraph 12 would appear to postulate a claim for payment for work done by the plaintiff, as well, perhaps as disbursements, when the term ‘and/or the fair and reasonable market value of the work carried out by the plaintiff’ is borne in mind. This view is strengthened by the fact that the quantity surveyor’s report includes in it the cost of labour although it is not clear whether this is the cost of the plaintiff’s labour or that of others engaged by him.

[38] No allegation is made in paragraphs 12 or 13 that the amounts that were allegedly invoiced to the defendant were for disbursements in respect of which she had, in terms of clause 3.4, given her prior written approval. In the absence of such an allegation, paragraphs 12 and 13 are excipiable. As no exceptional circumstances are present, the application to amend the particulars of claim to include these paragraphs must fail.

[D] CONCLUSION

[39] For the reasons set out above, the application to amend the particulars of claim cannot succeed. The application is dismissed with costs.

______

C. PLASKET

JUDGE OF THE HIGH COURT

APPEARANCES:

For the applicant/plaintiff: Mr S.C. Clark, instructed by Nettletons, Grahamstown.

For the respondent/defendant: Mr B. Boswell, instructed by Whitesides, Grahamstown.

1 Cilliers, Loots and Nel Herbstein and Van Winsen: The Civil Practice of the High Courts of South Africa (5 ed) (Vol 1) Cape Town, Juta and Co: 2009, 678. See too Robinson v Randfontein Estates Gold Mining Co Ltd 1921 AD 168, 243; Caxton Ltd and others v Reeva Forman (Pty) Ltd and another [1990] ZASCA 47; 1990 (3) SA 547 (A), 569G.

2 1927 CPD 27, 29. See too Affordable Medicines Trust and others v Minister of Health and others [2005] ZACC 3; 2006 (3) SA 247 (CC); 2005 (6) BCLR 529 (CC), para 9.

3 1911 TPD 1092, 1102.

4 1935 WLD 115, 117.

5 1967 (3) SA 632 (D).

6 At 640H-641B. References in the quote have been omitted. See too Zarug v Parvathee NO 1962 (3) SA 872 (D), 875H-876E.

7 Note 5, 641A-B.

8 1995 (2) SA 40 (T), 43I-44A.

9 Cilliers, Loots and Nel (note 1), 683. See too Krischke v Road Accident Fund 2004 (4) SA 358 (W), para 9.

10 1964 (4) SA 760 (A), 766G-767C.

11 2002 (4) SA 1 (SCA).

12 At para 90.

13 At para 93. See too the majority judgment of Harms JA, Streicher JA and Brand JA at para 24.