MN Campbell N.O. & others v F Fourie & others (879/2019) [2021] ZAFSHC 134 (17 May 2021)

IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Case number: 879/2019 In the matter between:

MALCOLM NEIL CAMPBELL N.O 1st

PLAINTIFF

VRYSTAAT

MUNISIPALE 2nd PLAINTIFF

PENSIOENFONDS and

FRITZ

FOURIE 1st

DEFENDANT

ELANA STEENKAMP 2nd

DEFENDANT

EURIKA

POOLMAN 3rd

DEFENDANT

CORAM:

NAIDOO, J

HEARD ON:

28 January 2021

JUDGMENT DELIVERED ON: 17 May 2021

[1] This is an application by the plaintiffs for the amendment of their Replications to the pleas of the first defendant (Fourie) and that of the second and third defendants (Steenkamp and Poolman, respectively). The plaintiffs sought an order in the following terms:

“1. That the late filing of this application be condoned.

2. That the Plaintiffs’ Replication to the First Defendant’s Plea and the Plaintiffs’ Replication to the Second and Third Defendants’ Plea be amended in accordance with:

2.1 the Plaintiffs’ Notices of Amendment dated 25 September 2020; and

2.2. the Plaintiffs’ Notices of Further Amendment dated 22 October 2020.

3. Costs of this this action.”

Adv C Joubert SC appeared for the plaintiffs and Adv N Snellenburg SC, with Adv SG Janse Van Rensburg appeared for the first defendant

[2] The plaintiffs issued summons against the three defendants. The first plaintiff (the curator) is a chartered accountant and also the curator appointed on behalf of the second plaintiff (the Fund). Fourie was the Principal Officer and member of the Board of Trustees of the Fund. He was also a member of the Executive Committee of the Fund. Steenkamp and Poolman are Fourie’s daughters. In summary, the allegations against Fourie are that in breach of his legal duties as the Principal Officer of the Fund, he authorised certain irregular monthly payments to an employee of the Fund, on condition that she channelled such amounts to Steenkamp and Poolman, via her bank account. Over a three-year period, Steenkamp received an amount R336 000.00 and Poolman received an amount of R371 000.00, causing the Fund to suffer financial damage in the total amount of R707 000.00.

[3] The plaintiffs alleged that as a result of Fourie’s unjustified actions, which were ultra vires his authority, Steenkamp and Poolman were unjustly enriched and the plaintiffs impoverished in the amounts I have mentioned above. The plaintiffs accordingly sought, inter alia, an order against Fourie and Steenkamp for the payment of R336 000.00 (Claim A) and against Fourie and Poolman for the payment of R371 000,00 (Claim B). The defendants, for their part, deny the allegations of the plaintiff. I pause to mention that there is an acrimonious litigious history between these parties, with a number applications and the action from which the present application and a previous application emanate. This is, therefore, not the first time that they bring their disputes before court.

[4] Fourie raised amongst other defences, two special pleas alleging that the plaintiffs’ claim has prescribed. Similarly, the second and third defendants also raised a special plea, in similar terms to Fourie’s second special plea. For convenience, I set out Fourie’s special pleas:

“SPECIAL

PLEA

1,1 Plaintiffs’ claim is based on a decision, taken by the Executive Committee, of the Second Plaintiff, on 5 June 2013.

1.2 On that date, 5 June 2013, Plaintiffs’ claim fell due.

1.3 The Plaintiffs’ summons was served on the First Defendant on 1 March 2019 which is more than three years after the date on which the claim arose.

1.4 In the premises, The Plaintiffs’ claim is prescribed in terms of Act 68 of

1969 (as amended).

2.

SPECIAL

PLEA

2.1 Plaintiffs’ claim is based on alleged irregular payments, authorised by the First Defendant, paid during the period July 2014 to July 2017 .

2.2 Plaintiffs’ claim fell due on the dates the alleged unlawfully paid payments were made.

2.3 Plaintiffs’ summons was served on the First Defendant on 1st March 2019, which is more than three years after the date on which the alleged irregular payments were made”.

[5] Steenkamp’s and Poolman’s special plea reads as follows:

1.1 Plaintiffs’ claim is based on alleged unlawful, irregular and wrongfully made payments to the Second and Third Defendants from July 2014 to July 2017. The Plaintiffs’ claim fell due on the date that the payments were made.

1.2 The Plaintiffs’ summons was served on the Second Defendant on 4 March 2019 and on the Third Defendant on 8 March 2019, which is more than three years after the dates on which the bulk of the payments were made, and the Plaintiffs’ claim arose.

1.3 In the premises the Plaintiffs’ claim against the Defendants is prescribed on all payments made before 3 March 2016 in respect of the Second Defendant and before 8 March 2016 in respect of the Third Defendant respectively in terms of then Prescription Act 68 of 1969.”

[6] The plaintiffs then filed and served Replications to the special pleas of Fourie as well as Steenkamp and Poolman on 31 July 2019. Other steps in the litigation process were also taken by the parties but, for the purposes of this judgment, it is not necessary to detail those. On 25 September 2020, plaintiffs’ filed Notices to Amend their Replications to the special pleas of the three defendants. On 22 October 2020, the plaintiffs filed Notices of Further Amendment of the Replications to the pleas of the three defendants. The latter objected to the proposed amendments, necessitating the current application. The plaintiff served this application about three days outside the 10-day period prescribed in the Rules of Court, and accordingly sought an order condoning such late filing. I will deal further with this later.

[7] For convenience, I quote the relevant replications as well as the proposed amendments thereto, in order to understand the defendants’ objections thereto, which I will deal with thereafter. The plaintiff’s Replications to the special plea of the first defendant and that of the second and third defendant were couched in identical terms as follows:

“1. The first plaintiff only acquired knowledge of the identity of the debtors and of the facts from which the debts arose as claimed in this action, at various stages after his appointment as curator for the second plaintiff on 8 September 2017, and could not have reasonably acquired knowledge thereof earlier than such date.

2. Accordingly, in terms of section 12(3) of the Prescription Act 68 of 1969, the debts claimed in this action only became due after 8 September 2017.

3 In the premises, the plaintiff respectfully requests that the special plea prescription be dismissed with costs.”

[8] The plaintiffs’ Notices of Amendment, in terms of Rule 28(1), of its replications to the plea of the first defendant and that of the second and third defendant dated 25 September 2020, are also couched in identical terms, save that in paragraph 1, reference is made to the first defendant and to the second and third defendants respectively, in the Notice of Amendment relevant to each. I will, therefore only quote the proposed amendment in respect of the first defendant’s plea. It reads as follows:

“1. By deleting the entire paragraph 1 and substituting same with the following:

“The first defendant wilfully prevented plaintiffs from coming to know of the existence of the debt and the first plaintiff only acquired knowledge of the existence of the debt after his appointment in 2017.

2. By deleting the entire paragraph 2 and substituting same with the following:

“Accordingly, in terms of section 12(2) of the Prescription Act 68 of 1969, the debts claimed in this action only became due after 7 September 2017”.

[9] The further amendments of the Replications sought by Notice of Further Amendment dated 22 October 2020 are also couched in identical, terms in both notices Again, I will quote only from one notice:

“1. By inserting, after paragraph 2, the following:

“2A. Further, and in any event, the plaintiffs only acquired knowledge of the identity of the debtor and the fact facts from which the debts claimed in this action arise, after the appointment of the First Plaintiff during 2017 and the debts claimed in this action accordingly became due after September 2017 in terms of section 12(3) of the Prescription Act, 68 of 1969.”

[10] The defendants each objected to both proposed amendments by the plaintiffs on essentially the same the ground, namely, that the amendments amount to a withdrawal of an admission, alternatively that facts previously admitted are now placed in dispute and that the amendments are mala fide. This ground of objection has its genesis in a previous application brought by Fourie for the separation of the special plea of prescription from the merits of the matter and for the special plea to be adjudicated first (the separation application). The application was opposed by the plaintiffs, and their attorney, deposed to the Answering Affidavit. In his objection, Fourie cited, as evidence of the “admission” made by the plaintiffs, a paragraph from the Answering Affidavit, where the plaintiffs’ attorney, Mr Driman, ostensibly said that:

“The debts became due on the date that they were paid and, the summons having been served on 1 March 2019, it is accordingly only claims in respect of payments made before 28 February 2016 that would notionally have prescribed. The special plea of prescription does not affect payments made thereafter.”(sic) and the plaintiffs’ claim is not based on the decision taken by the Executive Committee of 5 June 2023. The wrongful conduct on which the claim is based, is the fact that the first defendant authorised and instructed payment of moneys (sic) to the erstwhile Manager: Administration, Susanna Maria Schutte (“Schutte”} on condition that the moneys (sic) be channelled to his daughters, the Second and Third Defendants, through Schutte’s bank account, despite the fact that they were not even employed by the Second Plaintiff.”

Fourie further alleged that the intended amendment would be prejudicial to him. The objection by Steenkamp and Poolman was based on the same alleged admission made by the plaintiffs.

[11] Fourie filed an Answering Affidavit to the plaintiffs’ Founding Affidavit, while Steenkamp and Poolman did not. Subsequently, Steenkamp and Poolman filed a Notice to Abide by the court’s decision in respect of the application to amend the plaintiffs’ Replication, indicating that the issues, merits and disputes to be decided upon in respect of the first defendant, also apply to them. I pause to mention that neither party placed, before this court, the papers in the separation application, given that statements made in that application form the crux of the defendants’ objections in this matter. The furthest the plaintiffs went was to explain the context in which those statements were made and to attach a copy of counsel’s Heads of Argument relevant to that application, in support of their assertions. I will deal with this later.

[12] For convenience, I set out the provisions of section 12(2) and 12(3) of the Prescription Act:

(3) A debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.

[13] A court will be slow to close the door of the court to a litigant. The court will ensure that each party has a fair opportunity to have his/her matter presented in court. In considering an application for an amendment to pleadings, the court has a wide discretion, which must be judiciously exercised. One of the key factors that the court takes into account is whether any prejudice would be occasioned to the other party by such amendment, which cannot be cured by an appropriate order for costs. Fourie has alleged, without elaborating, that he would suffer prejudice.

[14] On examining the Replications to the pleas of all three defendants, it appears that the plaintiffs placed reliance on section 12(3) of the Prescription Act. The amendment sought by way of the Notice of Amendment in September 2020 seeks to substitute this with reliance on section 12(2), and the Notice of Further Amendment filed in October 2020 seeks to re-introduce section 12(3), so that the plaintiffs now seek to rely on both provisions.

[15] Although the defendants have not specified the prejudice they would suffer if the amendments are granted, they rely very heavily on the statements made by the plaintiffs in the Answering Affidavit in the separation application, which I have detailed above, to support their contention that the plaintiffs admitted that prescription applies to its claims. The amendments would amount to a withdrawal of such an admission. The defendants failed to deal with the context in which those statements were made, in spite of the plaintiffs’ explanation of such. They also failed to respond to the plaintiffs’ contentions in this regard. To borrow Mr Snellenburg’s words, context is everything. It is indeed so in this case.

[16] The plaintiffs submit that in the first instance, the use of the word “notionally” in the paragraph relied upon by the defendants, read with the remainder of the answering, indicates that the statement does not amount to an admission. The plaintiffs further assert that the statement was made in the context of illustrating that it would make no sense to order a separation and adjudicate the special pleas of prescription separately, because even if the plaintiffs’ reliance on section 12(2) and 12(3) were not upheld, the entire matter between the parties would not have been disposed of. The plaintiffs attached the Heads of Argument to the Founding Affidavit, which reiterated and clarified this point by asserting that the special plea would require a great deal of evidence to be heard and still not be dispositive of the entire matter. As I indicated, the defendants did not grapple with this point or indeed any of the other points raised in the founding affidavit.

[17] The first defendant, in his Answering Affidavit, simply repeated the grounds of his objection to the proposed amendments to the plaintiffs’ Replications, and did not answer each of the points raised by the plaintiffs. If the defendants’ objections to the amendments are considered in the light of their interpretation of Mr Driman’s statements in the Answering Affidavit in the separation application, then such objections are baseless and cannot be sustained. The context provided by the plaintiff’s place those statements within the realms of logic and increase the probability of such context being correct. This court did not have the benefit of perusing the papers relevant to the separation application, and was obliged to rely on the submissions of the parties.

[18] The defendant’s request the court to dismiss the plaintiffs’ application for the amendments they seek and thus effectively prevent them from properly presenting their case to court. The court also keeps in mind that the monies being claimed belong to members of the second plaintiff and are, in effect, public funds. As such, the court is cognisant of the fact that a number of members of the public may have been prejudiced in this matter, and that their right need to be protected. This court is constrained to accede to the request of the defendants for the reasons I have set out. It is also my view that the defendants’ objections were unfounded and that this application ought not to have been opposed.

[19] I turn to the application for condonation by the plaintiffs for the late filing of this application. The defendants do not oppose the grant of condonation. Their complaint is that the plaintiffs did not tender their costs for considering the issue of condonation. In my view, such costs would be negligible and the failure to tender such can hardly be said to occasion any prejudice to the defendants. In any event both parties acknowledge that the award of costs is within the discretion of the court. To the extent necessary, therefore, the late filing of this application by the plaintiffs is condoned.

[20] With regard to the costs of the application, the plaintiffs would ordinarily be expected to bear these costs, which would include, in this case, the costs of the condonation application. I have expressed the view that the opposition in this matter was unnecessary and the objections to the proposed amendments cannot be sustained. In my view, the most equitable order would be for each party to pay their own costs.

[21] In the circumstances, the following order is made:

21.1 The late filing of this application is condoned;

21.2 The Plaintiffs’ Replication to the First Defendant’s plea and the Plaintiffs’ Replication to the Second and Third Defendants’ plea, be amended in accordance with:

21.2.1 the Plaintiffs’ Notices of Amendment dated 25 September 2020;

21.2.2 the Plaintiffs’ Notices of Further Amendment dated 22 October 2020;

21.3 Each party to pay their own costs.

S

NAIDOO J

On behalf of the Plaintiff: Adv Con Joubert SC

Instructed by: Werksmans Attorneys

c/o Symington De Kok

169B Nelson Mandela Drive

Bloemfontein

(Ref: J Donnelly/FMF0028)

On behalf of the 1st Defendant: Adv N Snellenburg SC with

Adv SG Janse Van Rensburg

Instructed by: EG Cooper Majiedt Inc

77 Kellner Street

Westdene

(Ref: NO/rn/SA1669)

Attorney on behalf of 2nd &

3rd Defendants Wessels and Smith

1A York Road

Waverley

(Ref: FJ Kapp)