Macsteel Tube and Pipe , A Division of Macsteel Service Centres SA (Pty) Ltd v Vowles Properties (Pty) Ltd (A3005/2019) [2020] ZAGPJHC 118 (20 April 2020)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA,

GAUTENG DIVISION, JOHANNESBURG

CASE NO: A3005/2019

In the matter between:

MACSTEEL TUBE AND PIPE, A DIVISION OF

Appellant

MACSTEEL SERVICE CENTRES SA (PTY) LTD

and

VOWLES PROPERTIES (PTY) LTD

Respondent

JUDGMENT

MIA, J

[1] This is an appeal against the judgment and order granted by the Regional Magistrate Kempton Park, Gauteng Province against the relief granted in an interlocutory application for an amendment of the particulars of claim to which the appellant raised several objections.

[2] The appellant is (defendant/respondent in the court a quo) Macsteel Tube and Pipe, a division of MacSteel Service Centres SA (Pty) Ltd, a registered company with its physical address in

Boksburg. The respondent (plaintiff/applicant in the court a quo) is Vowles Properties (Pty) Ltd a registered company situated in Benoni, Gauteng Province. The appellant concluded a lease agreement

with the respondent on the 24th of July 2009 at Benoni, Gauteng Province. The initial lease was for a period of 41 months with a renewal of 4 years and 11 months. The appellant was required to maintain the premises in good order and could not sublet the leased premises without the written consent of the respondent which would not be unreasonably withheld.

[3] The appellant failed to return the premises in the same condition it was originally leased, fair wear and tear excepted. The respondent instituted a claim against MacSteel Tube and Pipe as the first defendant and Reclamation Holdings (Pty) Ltd., to whom the property had been sublet, as the second defendant in the Regional Court, Kempton Park, Gauteng Province on 11 December 2015.

[4] The appellant filed an exception to the respondent’s particulars of claim. The court granted an order by agreement between the parties on 15 July 2016 which afforded the respondent an opportunity to amend its particulars of claim within twenty days of the order. The respondent made several attempts to amend its particulars of claim and each attempt was successfully defeated by the appellant. After terminating the mandate of its attorney of record on 30 January 2018, a further application was made on 2 February 2018 to amend the particulars of claim. There was no appearance for the respondent on 2 February 2018. The Court issued an order which read as follows:

“After having heard counsel and considered the papers, it is ordered that the application in terms of Rule 55A is dismissed with costs which include all costs to date including costs of counsel to be taxable and payable immediately. The action in this matter is stayed until these costs have been paid in full stop.”

[5] The respondent paid the taxed costs and brought a further substantial application for leave to amend its particulars of claim. The respondent further sought condonation for the application to amend as it had not brought the application to amend within twenty days in terms of the July 2016 order. The Magistrate considered the application as well as the objections raised by the appellant and granted the amendment furnishing reasons for the order. The appellant appeals against this order. The respondent opposes the appeal.

[6] Mr McKenzie, appearing for the appellant, argued that Rule 55A set out the procedure to be followed by the respondent in effecting amendments. The power to grant an amendment was conferred upon the Magistrate by section 111 of the Act. The relief sought by the respondent thus turned on whether the amendment should be granted under section 111 and the legal principles governing amendments. In exercising its discretion to grant an amendment the Court should consider whether it would cause prejudice to the other party.

[7] He argued further that the appellant was prejudiced by the granting of the amendment. In amplification hereof, he argued the respondent sought to amend the name of the appellant which would introduce a new party to a matter where the claim had prescribed. He further argued that the most recent amendment sought to:

7.1 introduce a claim which was not within the jurisdiction of the court a quo, and is therefore still excipiable;

7.2 introduce a claim against a person that is not a party to the respondent’s action and that has not been cited in the summons;

7.3 if allowed would introduce prescribed claims;

7.4 is contrary to the order granted in July 2016.

[8] Mr McKenzie submitted moreover that the application for an amendment where judgment was granted on 24 October 2018 was not an interlocutory order in the ordinary sense. It was a judgment which was final in effect in view of the objections raised by the appellant being dismissed. The Magistrate made findings on the four grounds of objection which are final and cannot be altered by that court and are definitive of the rights of the appellant and will prejudice the appellant in its defences in the action. He referred to the matter of Zweni v Minister of Law and Order [1993] 1 All SA 365 (A) at para [8] where the Appeal Court noted regarding the following in respect of orders:

“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”

[9] He contended that the order granted by the Magistrate which permitted the respondent to amend its particulars of claim and dismissed the appellant’s objections fell squarely within the three categories above and the appellant was prejudiced in the further conduct of the matter even though it had not pleaded as yet as final decisions had been made on relief that the appellant would have claimed in the main proceedings.

[10] Mr McKenzie submitted that the Magistrate had already decided on the issue of consent and whether the parties consented to the Magistrates Court. This was a final decision which could not be reversed. It was final in its effect and was thus appealable. The Regional Court’s monetary jurisdiction was limited to four hundred thousand rands(R400 000.00). The respondents proposed amended claim was R2 086 049.00, substantially above the Regional Court’s jurisdiction. He conceded that the respondent’s address fell within the court’s jurisdiction at the time the claim was instituted. He argued however that the consent to the court’s jurisdiction was only enforceable if it was lawful in terms of section 45 of the Act and argued that the parties could not lawfully consent to the Magistrates Court where its jurisdictional limit was

R400 000.00.

[11] He argued that the second and third grounds of objection related to the particulars of claim which incorrectly cited the company as MacSteel Tube and Pipe a division of MacSteel Service Centres SA (Pty) Ltd. The claim which the respondent preferred against the appellant prescribed three years after the summons had been issued on 11 December 2015. Further he argued a division of a company was not a legal persona which could be sued. The respondent referred to the appellant as it was described in the lease agreement, and this was not a sufficient explanation for the incorrect citation. The amendment was incapable of curing the respondent’s obligation to comply with the law regarding citation of parties in legal proceedings. The amendment introduced a new defendant namely Macsteel Services Centres (Pty) Ltd trading as a division of MacSteel Tube and Pipe, in place of a non-existent one in circumstances where the claim against the new defendant would have prescribed almost three years ago.

[12] Finally on the issue of condonation, he submitted that the respondent had failed to explain the entire period of their delay in complying with the order dated 15 July 2016 let alone a full explanation for the period of the delay, or their absence at the hearing for an amendment on 2 February 2019 and the failure to file the pleadings timeously. He argued that no good cause exists and the Magistrate erred in granting the respondent the amendment at this late date.

[13] Mr Bruwer, appearing for, the respondent, argued that on 24 October 2018 the Magistrate issued an order that the respondent could amend its papers and it was noteworthy that at that stage the appellant had not pleaded as yet and has to date not indicated to the Court what its defence is on the merits of the action instituted.

[14] He submitted that the Magistrate had not decided on any issues that arose on the particulars of claim whilst there is no plea filed by the appellant at the time of the amendment. Mr Bruwer argued further that the general principle was to permit an amendment unless it was an application brought mala fide which was not the case in the present matter or where prejudice would ensue which could not be cured by a costs order. He argued that the order granting the amendment was not appealable because it is not final and not definitive of the rights of any party and did not dispose of a substantial part of the relief which is claimed especially because the appellant has not pleaded in the matter. Once the appellant pleaded the respondent had the right to file a replication to the plea. There was nothing which prevented the appellant from filing a plea raising jurisdiction and or prescription or any other defence it considered appropriate in the matter.

[15] With regard to jurisdiction, he submitted that the respondent’s claim is based on a written agreement and the parties are situated in Boksburg and Benoni respectively whilst the agreement was concluded in Benoni. Paragraph 20 of the lease agreement found jurisdiction in the Regional Court Kempton Park as the parties consented to the Magistrates Court for the district which was Kempton Park at that particular point in time and further section 45 of the Act permitted such consent irrespective of the amount.

[16] On the issue of jurisdiction, the Magistrate found that the lease agreement provided that both parties consented to the jurisdiction of the Magistrate’s Court for the district having physical jurisdiction over the person of the landlord in respect of all proceedings arising out of the lease agreement, notwithstanding the amount of the claim or the nature of the claim. On the second issue the Magistrate found that the claim was based on the lease agreement and damages flowing therefrom and was merely a quantification of the amount. The appellant was the same company as referred to in the lease agreement and it was clear that the citation was incorrect. The citation of the appellant may have been incorrect in the initial summons, the parties were however clear that the party cited referred to the appellant.

[17] The third ground was prescription and on this issue the Magistrate held that the claim after the amendment evinced the same cause of action as the summons issued in 2015 and was merely a re-quantification of the claim and therefore the matter had not prescribed. On the fourth ground, that it was contrary to the order of July 2016, and the issue of condonation, the Magistrate noted that the order allowed the respondent 20 twenty days to amend it particulars of claim and was intended to give the parties directives and would have entitled the appellant to seek a dismissal of the action after the twenty days if the respondent failed to seek the amendment in terms of the order.

[18] In this court, the issues for determination as set out in the notice of appeal are essentially:

18.1 Whether the trial court erred in finding that the parties consented to the jurisdiction of the Kempton Park Regional Magistrates Court in terms of section 45(1) of the Magistrates Court Act 32 of 1944 (the Act) and whether such consent was valid;

18.2 Whether the trial court erred in finding that the cause of action introduced by the amendment is the same as the initial cause of action and that the debt sought to be recovered under the proposed particulars of claim has not prescribed under section 11 (d) of the Prescription Act 68 of 1969;

18.3 Whether the trial court erred in finding that the appellant is the same entity as MacSteel Services Centre SA (Pty) Ltd;

18.4 Whether the trial court erred in granting the amendment sought by the respondent under section 111 (1) of the Act and the rule 55 A (10) of the Rules of the Act.

[19] Section 111 of the Act provides as follows:

“(1) In any civil proceedings, the court may, at any time before judgment, amend any summons or other document forming part of the record: Provided that no amendment shall be made by which any party other than the party applying for such amendment may (notwithstanding adjournment) be prejudiced in the conduct of his action or defence.

(2) In civil proceedings an amendment may be made upon such terms as to costs and otherwise as the court may judge reasonable.”

[20] In dealing with the amendment it is necessary to consider whether the order granted was final in effect and whether any party and specifically the appellant is prejudiced. In the matter of Grancy Property Ltd and another v Seena Mareena Investment (Pty) Ltd and Others [2014] 3 All SA 123 SCA it was held:

“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. An order may not possess all three attributes, but will nonetheless be appealable if it has final jurisdictional effect or is such as to dispose of any issue or any portion of the issue in the main action. The respondents in this case submitted that the judgment and orders were not appealable in that they related to interlocutory applications;

did not dispose of a substantial portion of the relief in the main application and were not final in effect.” (my emphasis)

[21] In Grancy supra the Court held that despite it dealing with four interlocutory applications, once the relief sought was denied, it was not open to the appellants to seek it again, thereby depriving them of a remedy. The appellants would thus be prejudiced if the judgment and order of the court below were allowed to stand. As the order effectively precluded the appellants from contesting the adequacy of the accounts, it was final in effect. Therefore, the order was appealable.

[22] Maya JA (as she then was) in Jacobs and others v Baumann NO and others [2009] 3 All SA 398 (SCA) said:

". . . [A] court determining whether or not an order is final considers not only its form but also, and predominantly, its effect. An order may not possess all three attributes, but will nonetheless be appealable if it has final jurisdictional effect or is 'such as to "dispose of any issue or any portion of the issue in the main action or suit" or . . .' irreparably anticipates or precludes some of the relief which would or might be given at the hearing".

[23] The Magistrate was entitled to consider the application for an amendment even at that late stage as section 111 of the Act permits the Court to consider such application prior to judgment and no judgment had been given in the matter. Moving on to the issue whether the matter is appealable, the case of Zweni supra, Jacobs supra and Grancy supra all shed light on this issue whether the order was final, capable of alteration and definitive of the rights of the parties. The Magistrates dismissal of each of the four grounds raised by the appellant suggest that the decision is final and definitive of the appellant’s rights with regard to those grounds. Thus even if the grounds were raised by way of a plea the Court has already pronounced on those issues and the Court could not reverse its decision on those issues. I proceed now to consider the Magistrates reasons.

[24] The first objection raised of lack of jurisdiction. Paragraph 20 of the lease agreement provides:

“Both parties hereby consent to the jurisdiction of the magistrate’s court for the district have physical jurisdiction over the person of the landlord in respect of all proceedings arising out of the agreement of lease notwithstanding the amount claimed or the nature of the claim. In no way derogating therefrom the landlord shall be entitled to institute any action arising out of this agreement in any other court of competent jurisdiction “

[25] Section 45 of the Act permits parties to consent to the Magistrates Court and provides:

“ Subject to the provisions of section 46, the parties may consent in writing to the jurisdiction of either the court for the district or the court for the regional division to determine any action or proceedings otherwise beyond its jurisdiction in terms of section 29 (1).

The matters excluded by section 46 include dissolution of a marriage, validity of a will, status of a person in respect of mental capacity, specific performance without the alternative of damages, delivery of property exceeding a certain value, decree of perpetual silence. None of the aforesaid matters apply to the respondent’s claim for damages. The Magistrate was thus correct in her finding that the Kempton Park Magistrates Court had jurisdiction with regard to the amount because of the parties consent in the lease agreement and section 45 of the Act which provides for such consent to jurisdiction. The Act refers to a district as well as a regional court.

[26] On the finding that the respondent sought to introduce a new cause of action and a new party, namely first defendant, I am of the view the Magistrate was correct in permitting the amendment on 24 October 2018 as the summons issued in December 2015 had not as yet prescribed in October 2018. The party responsible in terms of the lease agreement for the damages was nevertheless the same. The amount claimed was not based on a new claim but was based on the quantification or recalculation of the amount of the damages where the Magistrate referred to commentary in section 111 of Jones and Buckle in respect of the Magistrate’s Court Act as follows:

“where the plaintiff seeks by way of amendment to augment his claim for damages, you will be precluded from doing so by prescription if the new claim is based upon a new cause of action and the relative prescriptive period has the run, but not if it was part and parcel of the original cause of action and merely represents a fresh quantification of the original claim or the addition of a further item damages.”

[27] On the question of the substitution of the appellant and introduction of a new non-existent party, I am of the view that the answer is found in the Jacobs matter supra where the litigant challenged the appointment of the executor and the matter Two Sixty Four Investments (Pty) Ltd v Trust Bank [1993] 4 All SA 147 W where the defendant was described as “Trust Bank,’n Divisie van Bankorp Beperk ‘n Maatskappy met Beperkte Aanspreeklikheid”, the court found that the respondent was the same entity despite the description. In the present matter the appellant cannot dispute that the substituted party is not the same entity that is responsible for the damages despite the incorrect citation. As in Jacobs supra the effect of the substitution was not to introduce a new party, but merely to correct the name of an incorrectly cited party with the correct one. The Magistrate correctly came to the same conclusion on the citation of the parties as well as the quantification of the claim.

[28] On the issue of prescription the Magistrate held that the claim was the same as cause of action as the summons issued in 2015 and merely a re-quantification and therefore the matter had not prescribed. This is correct in addition the application for the amendment was brought before the three years period had elapsed. There is no merit in this ground of appeal.

[29] The appellant did not seek a dismissal after the respondent failed to amend after twenty days hence the Magistrate was required to consider the application in terms of section 111 of the Act. It appears that the appellant has failed to demonstrate any real prejudice in the matter.

[30] For the reasons above, I grant the following order:

ORDER

1. The appeal is dismissed.

2. The appellant to pay the costs on a party and party scale.

_________________________________

S C MIA

JUDGE OF THE HIGH COURT

GAUTENG LOCAL DIVISION, JOHANNESBURG

I agree.

PH MALUNGANA

ACTING JUDGE OF THE HIGH COURT

Appearances:

On behalf of the applicant :Adv AC McKenzie

Instructed by :

Webber Wentzel Attorneys

Vlad.movshovich@webberwentzel.com

On behalf of the respondent :Adv A.P. Bruwer

Instructed by :

Schalk Britz Inc.

schalk@schalkbritz.co.za

Date of hearing :

22 February 2020

Date of judgment :

20 April 2020