Malgas v North-West Star Transport Investments and Another (188/1999) [2006] ZANWHC 32 (11 May 2006)

IN THE HIGH COURT

OF SOUTH AFRICA

(BOPHUTHATSWANA PROVINCIAL DIVISION)

Case No: 188/1999

In the matter between:

MARGERY

MALGAS Applicant

and

NORTH

WEST STAR TRANSPORT 1st Respondent

INVESTMENTS

PATRICK

MOGALE 2nd Respondent

CIVIL

MATTER

DATE OF HEARING : 04 MAY 2006

DATE OF JUDGMENT : 11 MAY 2006

COUNSEL

FOR THE APPLICANT : ADV N GUTTA

COUNSEL FOR THE RESPONDENTS:

ADV H LEVER SC

JUDGMENT

HENDRICKS J:

[1] In the Notice of Motion filed in this Court on 14 July 2005 the Applicant, under case number 188/99, applies for an order in the following terms:-

“Granting the Applicant leave to sue the Respondents for bodily injury damages suffered as a result of an accident involving the vehicle owned by the First Respondent and driven by the Second Respondent as an employee of the First Respondent acting within the course and scope of his duties.”

[2] As to why the case number 188/99 is allocated to this application is not clear, seeing that the same case number was allocated to a case in which the First Respondent was placed under judicial management on 12 August 1999.

[3] I do not think that the Applicant in this application can be held accountable for this because it is the office of the Registrar who allocated case numbers and not an Applicant or his/her legal representative. Be that as it may, the present application is one in which the Applicant applies for leave from this Court to institute an action against Respondent, albeit the First Respondent.

A. Background:

[4] In an order granted on 12 August 1999, the First Respondent was placed under Judicial Management. The relevant portion of the order placing the First Respondent under judicial management read thus:-

“2.4 THAT: While the Respondent is under judicial management all actions, proceedings, the execution of writs, summonses and other processes against the Respondent be stayed and be not proceeded with without the leave of this Court being had and obtained;”

[5] The Applicant instituted an action for damages in the Transvaal Provincial Division of the High Court (T.P.D.) on 06 February 2004 under case number 3214/04.

[6] In the summons it is alleged that the accident giving rise to the cause of action happened on 07 February 2001. In that case, the present Respondent is the First Defendant and the Second Defendant is Patrick Mogale, (the Second Respondent in this application) who is a natural person.

[7] Mr Lever SC, who appears on behalf of the Respondent submitted that there is no ostensible reason why the Applicant is seeking leave to sue the Second Respondent who is a natural person.

[8] I am also of the view that it is indeed strange that the Second Respondent is cited in this application because there is no reason why leave should be asked from this Court to institute an action against him.

[9] More so, if regard is had to the manner in which the particulars of claim to the summons is drafted, in particular paragraphs 6 and 7 thereof, it is undoubtedly clear from those averments that it is intended that action be instituted against First Respondent and not so much against the Second Respondent. It is alleged that First Respondent was at all material times vicariously liable for the acts of the Second Respondent who, as an employee of the First Respondent, acted under the scope and course of his employment with First Respondent.

[10] This explains why the prayers are coached the way it is, in that it prays for judgment against the Defendant (and not Defendants). It also does not state that both Defendants are jointly and severely held liable.

[11] I cannot ignore the summons as it forms part of the documents presented to this Court.

[12] In my view, there is no reason why leave to sue the Second Respondent is applied for or why he is cited as a party in these proceedings.

[13] Leave to sue is required in the case of a company such as the First Respondent which has been placed under judicial management.

See:- Section 428 of the Companies Act, Act 61 of 1973, as amended;

Henochsberg, The Company Act, Volume 2 on page 760.

[14] It is contended on behalf of the First Respondent that the claim had prescribed when the proceedings in this Court were instituted.

[15] It is common cause that the accident occurred on the 07th February 2001 and that the Notice of Motion in this application was filed on 14 July 2005.

[16] The fact that the First Respondent is placed under judicial management does not prevent the running of prescription. The claim prescribed three (3) years after the cause of action arose, i.e. 6th February 2004. In my view, Applicant’s claim had already prescribed when this application was launched.

[17] Mrs Gutta, on behalf of the Applicant, contended that Applicant’s claim had not prescribed because the Applicant had instituted his claim on 06 February 2004 in the Transvaal Provincial Division.

[18] Mrs Gutta also submitted that the institution of the action in the Transvaal Provincial Division stopped the running of prescription and that proceedings are stayed pending the application to this Court for leave to institute the action.

[19] I find myself unable to agree with this submission.

[20] In my view, the court order placing the First Respondent under judicial management stayed proceedings already instituted against it at that time, and not be proceeded with without the leave of the Court been had and obtained. The rationale behind this is that actions pending or to be instituted against the company whilst under judicial management be regulated and controlled by the judicial managers.

[21] In my view future proceedings not already instituted at the time when a company is placed under judicial management cannot be proceeded with without the leave of the Court been obtained at first.

[22] The issuing and filing of a summons in my view amounts to the institution of an action. A summons commencing an action cannot at first be issued and filed and thereafter an application be made to a Court for leave in order to institute the action that had already been instituted.

[23] It defies all logic that the Applicant commenced her action against the First Respondent in the Transvaal Provincial Division of the High Court by issuing and filing a summons on the 06th February 2004 and only on the 14th July 2005 applies for leave in order to do so.

[24] The granting of leave to institute an action in my view does not operate retrospectively. Leave should at first be granted before an action is instituted. I am of the view that the Applicant acted wrongly by instituting her action and thereafter apply for leave from the Court to institute the action that is already instituted. With the greatest of respect, it doesn’t make sense.

[25] Not only had Applicant’s claim already prescribed when this application to apply for leave from this Court to institute the action was launched, but in my view the wrong procedure was also followed by first instituting an action and then thereafter seek leave to do so.

[26] Mr Lever SC also raised the point that the Transvaal Provincial Division of the High Court lack jurisdiction to tried this matter. He contended that the accident (cause of action) occurred within the area of jurisdiction of this Court and not within the area of jurisdiction of the Transvaal Provincial Division. Furthermore, the First Respondent’s principal place of business is within the area of jurisdiction of this Court and not the Transvaal Provincial Division.

[27] In answer to this submission Mrs Gutta, on behalf of the Applicant, submitted that the Second Respondent is resident within the area of jurisdiction of the Transvaal Provincial Division and therefore confers jurisdiction on the Transvaal Provincial Division.

[28] I have already alluded to the fact that because the Second Respondent is a natural person, there is not need to apply to this Court for leave in order to institute an action against him in any Court. Due to the fact that the First Respondent ‘s principal place of business is situated in the area of jurisdiction of this Court and also because the cause of action arose within the jurisdiction of this Court, I am of the view that this Court has jurisdiction to entertain the action against the First Respondent and not the Transvaal Provincial Division.

[29] In my view, this Court cannot accede to the request by the Applicant. The action had already prescribed and the Transvaal Provincial Division lacks the necessary jurisdiction to entertain the matter against the First Respondent.

[30] In my view, the application must fail.

[31] Consequently, I make the following order:-

The application is dismissed with costs.

R D HENDRICKS

JUDGE OF THE HIGH COURT

Attorneys for the Applicant: DENEYS REITZ ATTORNEYS, c/o KGOMO, MOKHETLE & TLOU ATTORNEYS.