Concrete 2000 (Pty) Ltd v Lorenzo Builders CC t/a Creative Designs and Others (12337/2009) [2014] ZAKZDHC 4; [2014] 2 All SA 81 (KZD) (14 February 2014)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

KWAZULU-NATAL LOCAL DIVISION,

DURBAN

REPORTABLE

CASE NO.: 12337/2009

In the matter between:

CONCRETE 2000 (PTY) LTD

Plaintiff

and

LORENZO BUILDERS CC

t/a CREATIVE DESIGNS

First Defendant

LORENZO WESSELS

Second Defendant

CRAIG LOEVE

Third Defendant

JUDGMENT

Heard on: 11 February 2014

Delivered on: 14 February 2014

JEFFREY AJ:

[1] This is an application brought by the third defendant in terms of Rule 30 of the Uniform Rules of Court to set aside the service of a combined summons on him as an irregular step.

[2] The plaintiff instituted action against the defendants on 31 August 2009 claiming the sum of R283 340.47 for goods sold and delivered to the first defendant during the period May to October 2008. The second and third defendants were cited in their capacities as sureties and co-principal debtors.

[3] The third defendant was described in the particulars of claim as:

“4.1 CRAIG LOEVE, […..], businessman, whose full and further particulars are to the Plaintiff unknown;

4.2 resident at and has chosen his domicilium citandi et executandi at […….]

[4] On or about 7 October 2009 the plaintiff attorneys incorrectly applied to the Registrar of this Court for default judgment to be entered against the third defendant.

[5] Humour often contains many fundamental truths. An apt remark found in one of the South African Quaint Cases, Pancreas Motors v Flute (1973) 90 SALJ 181, is :

‘A lawsuit, no less than a game of tennis, requires service to get it properly started.’

There was no service of the combined summons on the third defendant when the plaintiff’s attorneys applied to the Registrar for default judgment. According to an endorsement on the cover of the court file, the Registrar requested the plaintiff’s attorneys to file a return of service. No return of service was filed by them. The inescapable inference is that there was no service on the third defendant and, therefore, no return to file. It is a cornerstone of our legal system that a person is entitled to notice of legal proceedings instituted against him or her: see Steinberg v Cosmopolitan National Bank of Chicago 1973 (3) SA 885 (R AD) 892C. This fundamental principle is axiomatic. The plaintiff’s attorneys being officers of the Court should have known this. They should not have requested the Registrar to enter default judgment against the third defendant where there was no service of the combined summons on the third defendant.

[6] It seems, however, that this spur from the Registrar must have prompted the plaintiff’s attorneys to instruct the sheriff to attempt service the combined summons on the third defendant.

[7] According to the sheriff’s return of service, on 20 October 2009 ‘at […….], which address is the chosen domicilium citandi et executandi of the 3rd defendant’, he served a copy of the combined summons ‘upon the within named 3rd defendant by placing same in the post box at the given address. At the time of delivery I found the said premises to be locked.

No bell or intercom there.’

[8] Some eight months later, on or about 25 June 2010, the plaintiff’s attorneys, then armed with the sheriff’s aforementioned return of service, again applied to the Registrar for default judgment to be entered against the third defendant. On this occasion, according to another endorsement on the cover of the court file, the Registrar requested the plaintiff’s attorneys to file proof that the third defendant had chosen the […..] address as his domicilium citandi et executandi. There was, of course, no such proof that the third defendant had chosen that address as his domicilium citandi et executandi. All the documents annexed to the particulars of claim were silent in this regard. No mention was made of any chosen domicilium citandi et executandi in the application for credit facilities form purportedly signed inter alia by the third defendant. There was not a murmur of this in the conditions of sale that were also annexed; and it was nowhere to be found in the tersely worded form styled ‘Suretyship if the customer is a company/close corporation’ also purportedly

signed by the third defendant. And there is no record that such proof was filed by the plaintiff’s attorneys.

[9] I pause to observe that the Registrar’s endorsement dated 25 June 2010 on the court file that she required proof of the third

defendant’s chosen domicilium citandi et executandi ought to have reasonably drawn the plaintiff’s attorneys’ attention to the fact that there was a fundamental difficulty with the sheriff’s purported service of the combined summons on the third defendant’s chosen domicilium citandi et executandi.

[10] Yet, undeterred by this set back, the plaintiff’s attorneys apparently elected not take any further steps to locate the third

defendant’s whereabouts in order to effect proper service of the combined summons on him; but, instead, they simply proceeded to have the action set down on the trial roll for hearing.

[11] The action was eventually set down for trial on 12 August 2013.

[12] At this stage, however, the third defendant was domiciled and living permanently in Auckland, New Zealand. He had emigrated to that country during or about 2007 some two years before 31 August 2009 when the plaintiff instituted its action.

[13] The third defendant alleged that on 16 July 2013 he received an e-mail from the second defendant. A notice of set down was attached to this e-mail together with a filing notice and the plaintiff’s discovery affidavit. The third defendant went on to allege that this was the first time that he became aware of the plaintiff’s action against him and that it was set down for trial on 12 August 2013. He says he immediately instructed his Durban attorneys to investigate this and to obtain a copy of the court file. The contents of the court file were made available to his attorney on 24 July 2013.

[14] On the same day, 24 July 2013, the third defendant’s attorney addressed a letter to the plaintiff’s attorneys drawing their attention to the defective purported return of service. They called for urgent confirmation that the plaintiff would not attempt to take any order against the third defendant or any judgment by default or otherwise and that the action would be withdrawn against the third defendant on or before 31 July 2013. The plaintiff’s attorneys were informed that if such confirmation was not forthcoming they would have no option but to ‘enter into this action and proceed with a substantive application, in which we will be claiming punitive costs …’. It is apparent that no confirmation as sought by the third defendant’s attorneys was forthcoming from the plaintiff’s attorneys.

[15] In his founding affidavit the third respondent referred to the sheriff’s return of service where it was stated that the [….] address was his chosen domicilium citandi et executanti. He alleged that he had left South Africa by 20 September 2009, the date when the sheriff purportedly served the summons, and added that he had not lived at the [……] address for 28 years. This address, he said, was where his father had resided until he died in 2008. He stressed that he had never nominated the […..] address ‘as a domicilium address for the acceptance of summons or legal process.’ Finally, he alleged that he had not taken a further step in the action save for delivering an appearance to defend which, he said, was done solely for the purpose of preventing the plaintiff from applying for default judgment against him.

[16] These allegations were not disputed by the plaintiff.

[17] The plaintiff’s counter to this application was the following.

[18] The plaintiff raised two so-called points in limine.

[19] First, the plaintiff alleged that the third defendant’s founding affidavit was not properly before the Court because it was not authenticated as required by Rule 63(2) of the Uniform Rules of Court. This deficiency, so it went on to allege, rendered the application fatally defective.

[20] Second, somewhat mysteriously, the plaintiff alleged that ‘the filing of a return of service is not a step in furtherance of the finalization of a matter’ and that this ‘cannot be regarded as an irregular step or irregular proceedings’.

As far as this allegation may have been intended to suggest that the delivery by the third defendant of a notice of intention to defend was a further step in the proceedings that may have precluded him from invoking the provisions of Rule 30, Mr Maharaj who appeared for the plaintiff, correctly conceded that the delivery of a notice of intention to defend was not a further step in the proceedings. He also correctly abandoned the plaintiff’s second point in limine.

[21] The first point in limine concerning the lack of authentication of the founding affidavit has substance because ex facie the founding affidavit it was deposed to in New Zealand by the third defendant before Mr Peter Richard King, who described himself as a Justice of the Peace for New Zealand, and neither signature had been authenticated. Clearly, this did not comply with the provisions of Rule 63 which provide, generally, that a document executed outside the Republic of South Africa has to be authenticated for use within the Republic. In terms of Rule 63(1) a document includes an affidavit and authentication when applied to a document means "the verification of any signature thereon". In terms of Rule 63(2) any document executed in any place outside the Republic is deemed to be sufficiently authenticated for the purpose of use in the Republic if it is duly authenticated at such foreign place by the signature and seal of office of a number of office bearers specified in sub-rules (a) to (f). Sub-rule (a) is relevant to this application. The office bearers listed in that sub-rule are - ‘the head of a South African diplomatic or consular mission or a person in the administrative or professional division of the public service serving at a South African diplomatic, consular or trade office abroad’.

[22] As I have said, the signatures of the third defendant and Mr King were not authenticated ex facie the founding affidavit. But Rule 63(4) provides that notwithstanding anything in the rule contained, a document may be accepted as sufficiently authenticated if it is shown to the satisfaction of the Court that it was actually signed by the person

or persons purporting to have signed such document.

[23] I mention in passing that the Convention Abolishing the Requirement of Legislation for Foreign Public Documents ("the Convention")

was acceded to by the Republic of South Africa and is currently in force. But New Zealand was not one of the countries listed in Notice No. 773 of 1995 published in the Government Gazette on 18 August 1995, where notice was given that the convention had entered into force on 30 April 1995 between the Republic of South

Africa and various states mentioned therein. Accordingly nothing further needs to be said about the relationship between this convention and the provisions of Rule 63. I am satisfied that the provisions of Rule 63 alone are applicable for the purposes of this application.

[24] As I have said, the founding affidavit was deposed to in New Zealand by the third respondent was not duly authenticated as required by the provisions of Rule 63. The third defendant has attempted to rectify this difficulty in his replying affidavit. The replying affidavit was deposed to by him before Mr Irvine who described himself as the Honorary Consul, Republic of South Africa,

in Auckland New Zealand and he placed his seal of office on that affidavit.

[25] The third defendant attached his founding affidavit as an annexure to the replying affidavit and confirmed that the founding affidavit had been duly authenticated by Mr Irving in his capacity as the South African Honorary Counsul in Auckland, New Zealand.

[26] I have also said above that Rule 63(4) provides for a document to be received if it is shown to have been actually signed by the person purporting to sign it. In Chopra v Sparks Cinemas (Pty) Ltd 1973 (2) SA 352 (D) 358B Henning J said:

‘For the Court to accept a document in terms of Rule 63 (4) it must be satisfied that the document was actually signed by the person whose signature it purports to bear. This may be proved either by direct or circumstantial evidence, or both, and the strength of proof required is on a preponderance of probabilities.’

In essence, I must be satisfied that the document is genuine. It was not placed in issue by the plaintiff that the third defendant had not deposed to the founding affidavit before Mr King or that they had not placed their signatures on that document. On the contrary, the point taken by the plaintiff was that there had not been due authentication as required by Rule 63. The objective facts show that the third defendant and Mr King did in fact sign the founding affidavit. I am satisfied, and I accordingly find, that it has been established on a balance of probability that the founding affidavit was actually signed by the persons purporting to have signed that document, namely the third defendant and Mr King; that it is genuine and sufficiently authenticated; and that it can be accepted as such in terms of Rule 63(4).

[27] Mr Maharaj argued that the service was effective in that the combined summons had actually come to the attention of the third defendant – albeit nearly four years after the sheriff’s purported service on his domicilium citandi et executandi. The combined summons has come to the third defendant’s attention, so the plaintiff alleged, because the defendant entered an appearance to defend the action and he referred to several paragraphs of the particulars of claim in this application. This, accordingly to the plaintiff, ‘can only mean that the third defendant has had sight of the summons and the particulars of claim.’ The plaintiff reasoned that the manner of service of the summons was no longer relevant and it stressed that what was important was that the combined summons has come to the third defendant’s attention. The plaintiff submitted that it was therefore irrelevant that the [……] address had been ‘nominated as a domicilium address’. I do not agree.

[28] It is correct that the existence of the combined summons eventually came to the third defendant’s attention … fortuitously, as it so happened, after the second defendant sent the third defendant the notice of set down and plaintiff’s discovery affidavit by e-mail some four years after the combined summons had been issued and less than a month prior to the date when the matter had been set down for trial. But this does not mean that the service was effective. It was not effective at all. It was not as a consequence of the service (irregular as it clearly was on the facts of this matter since there was no domicilium citandi et executandi ever chosen by the third defendant) that the combined summons came to the third defendant’s attention. The facts in this application are distinguishable from the facts in cases like Prism Payment Technologies (Pty) Ltd v Altech Information Technologies (Pty) Ltd (t/a Altech Card Solutions) and Others 2012 (5) SA 267 (GSJ) where it was held that the service was not irregular because the locality of the fourth defendant’s place of business was sufficiently close to that of his employer, the first defendant, to render the latter place as being the fourth defendant’s

place of business. See also Scott and Another v Ninzi 1999 (4) SA 820 (E) where it was held that service at the headquarters of the applicant’s employer, not far from where the applicant was physically stationed was irregular but that it could be condoned because the applicant had not suffered any prejudice as a result of the method of service. But in the application now before this Court, had it not been for the second defendant’s e-mail – which was unrelated to the purported service on the third defendant - the third defendant would never have known about the plaintiff’s action.

[29] The purported service on the third defendant was, in my view, “patently bad” - to borrow a description employed by Bekker J in Greathead v Slabbert 1964 (2) SA 771 (T) 772E – since the evidence before me establishes that the purported service of the combined summons would never have reached the attention of the third defendant. The ‘chosen domicilium citandi et executandi’ was not chosen by the third defendant at all. It was a fabrication. Whether an irregularity can be so bad that

it can be characterized as a nullity is, as Nestadt J said in Krugel v Minister of Police 1981 (1) SA 765 (T) 768, really ‘a question of degree.’ In my view, the purported service is precisely that - patently bad.

Expressed as a question of degree, the irregularity was of the worst kind because it violated the very essence of a fair trial and this was exacerbated by the actions of the plaintiff’s attorneys that I have described above. It is irredeemable. It is not just ‘a less than perfect procedural step’ and the third defendant’s complaint is not ‘merely a technical objection’ that, in the ordinary course and in the absence of prejudice, should not be allowed to interfere with the expeditious and, if possible, inexpensive decision of cases on their real merits: see Mynhardt v Mynhardt 1986 (2) SA 456 (T).

[30] The purported service on the third defendant is a nullity. And I find accordingly.

[31] The issue of whether or not, having made this finding, I can condone the irregular service does not arise in this application. Such condonation was neither requested in the plaintiff’s answering affidavit nor argued before me. Mr Maharaj did argue, however, that the plaintiff would be prejudiced if the application was granted because its claim against the third defendant

probably would have prescribed. But this argument, as I understood it, was couched in the context of the plaintiff’s

allegations in its answering affidavit where the issue of prejudice was raised in support of the plaintiff’s submission that the application should be dismissed out of hand. Even if I misunderstood Mr Maharaj’s argument, if the purported service is a nullity I cannot, by way of condonation, rectify such a nullity: see for instance Greathead v. Slabbert 1964 (2) S.A. 771 (T); O’Donoghue v Human 1969 (4) SA 35 (E) and SA Instrumentation (Pty) Ltd v Smithchem (Pty) Ltd 1977 (2) SA 703 (D).

[32] In any event, even if I am wrong in this regard, I would not have granted condonation of the irregular service. If the argument

was that the plaintiff will suffer prejudice if the application is granted because its claim against the third defendant may have

prescribed, then this argument is contrived. As I have said above, the plaintiff’s attorneys should have been aware on or about 25 June 2010, when the Registrar endorsed the Court file requesting that proof that the third defendant chose the Ridgeside

Road address as his domicilium citandi et executandi, that there was a fundamental difficulty with the service on the third defendant. The plaintiff’s claim had probably not prescribed at that stage. The plaintiff’s attorneys could have taken steps there and then to locate the third defendant’s

whereabouts. They did not do so; or, if they did do so, they did nothing to ensure that proper service was effected on the third defendant thereby interrupting prescription. If the plaintiff’s claim against the third defendant has prescribed – and I make no finding on the issue of prescription – then the plaintiff will be the author of its own misfortune.

[33] Conversely, if I did condone the irregular service or if I did not grant this application, the third defendant may be prejudiced in not being able to establish prescription, should he be advised to raise this issue, because of the irregular service which I have already ruled is a nullity.

[34] On the issue of prejudice the third defendant has also alleged in his founding affidavit that he would suffer prejudice if this application is not granted because the plaintiff insistence that the action proceeds to trial. This trial has been set down to commence on 24 February 2014. He averred that due to the passage of time much of the documentary evidence necessary for his defence is no longer available to him. He also averred that he has been unable to properly consider his defence in the limited period of time before the date of the trial and that he still has to deliver a plea. He has not been able to do so because that would have jeopardized this application.

[35] In its answering affidavit the plaintiff dismissed the third defendant’s alleged prejudice as ‘flimsy’ because, so it averred, there is nothing to prevent the third defendant from raising the issue of prescription; such documentary evidence as the third defendant may require can be made available to him by the second defendant; the third defendant has been aware of the matter since 16 July 2013; the matter was initially set down for trial on 12 August 2013 and the third defendant was represented by an attorney and counsel; and the third defendant has had ‘more than adequate time even from 12 August 2013 to prepare his defence’.

[36] I do not agree that that third defendant’s alleged prejudice is ‘flimsy’. The third defendant confirmed in his founding affidavit that the second defendant and he were former members of the first defendant close corporation. During 2007 he ceased to be a member because he was preparing to emigrate to New Zealand. He believed that after he ceased to be member of the first defendant it was converted to the company and that this company has subsequently been liquidated. He alleged that he was never involved in the business of the company nor did he have a financial interest in it. These allegations were not disputed by the plaintiff. The plaintiff’s cause of action as pleaded arose during the period May 2008 to October 2008. This was after the third defendant had ceased to be a member of the former close corporation. On the balance of probabilities it is probable that in these circumstances due to the passage of time much of the relevant documentation may not be available to the third defendant. This real prejudice cannot be waived aside as the plaintiff has done by somewhat arrogantly suggesting that the third defendant can obtain whatever documentation he requires from his former co-member, the second defendant. There is nothing before me to suggest that this can in fact be done. I accept that the third defendant will indeed be prejudiced in his preparation for trial due to the passage of time since the plaintiff’s cause of action arose and due to the events concerning the close corporation subsequent to his emigration to New Zealand in 2007.

[37] In my view sufficient prejudice on the part of the third defendant has been established to justify this application. I find

accordingly.

[38] Finally, the third defendant has requested me to condone the late delivery of his notice contemplated in Rule 30(2)(b) and the late delivery of this application in terms of Rule 30(2)(c). During the course of argument both counsel were ad idem that there was a delay of 23 days in respect of the delivery of the notice and a delay of 8 days in respect of the delivery of this

application. I am of the view that condonation in the exercise of my discretion condonation should be granted because (a) there is no prejudice to the plaintiff; (b) the periods of delay were not excessive and are reasonable if the distance and time zone differences between New Zealand and South Africa are taken into account despite the plaintiff’s contention that modern communication methods for example e-mails, faxes and scans have accelerated communication causing this to be expediously effected; and (c) since the third defendant became aware of the plaintiff’s action on 16 July 2013 his attorneys had to scramble to obtain details of the action and consider the third defendant’s position. In my view, the delays were not excessive and, to do justice between the parties and to facilitate a fair trial for both parties to which they are both constitutionally entitled, I am disposed to grant the condonation as sought by the third defendant.

[39] In the result, I grant the following order:

1. THAT the late delivery by the third defendant of his notice and of this application in terms of Rule 30(2)(b) and Rule 30(2)(c) respectively are condoned.

2. THAT the purported service of the plaintiff’s combined summons on 20 October 2009 on the third defendant is declared to be irregular and it is set aside.

3. THAT the plaintiff is given leave to cause proper service of the combined summons to be effected on the third defendant by edictal citation or otherwise by agreement.

4. THAT the plaintiff shall pay the costs of this application including the costs that were reserved on 7 January 2014 and 21 January 2014.

__________________

JEFFREY AJ

Appearances: //

APPEARANCES

Counsel for the third defendant : Ms

Askew

Third defendant’s attorneys

: Campbell

Attorneys

Ref. PC/nn/LOE3/0003

Counsel for the plaintiff

: Mr

M Maharaj

Plaintiff’s attorneys

: Naidoo

and Company Inc

Ref. R Naidoo/C071

Date of hearing

: 11

February 2014

Date of judgment

: 14

February 2014