Mpumalanga Economic Growth Agency v Roadspan Surfaces (Pty) Ltd (2548/2020) [2023] ZAMPMBHC 69 (9 November 2023)

IN THE HIGH COURT OF

SOUTH AFRICA

MPUMALANGA DIVISION, MBOMBELA (MAIN SEAT)

CASE NUMBER: 2548/2020

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED.

DATE: 09 November 2023

SIGNATURE

In the first (MEGA’S) Rule 30 application between:-

MPUMALANGA

ECONOMIC GROWTH AGENCY

Applicant

and

ROADSPAN SURFACES (PTY)

LTD

Respondent

In the second (Roadspan’s) Rule 30 application between:-

ROADSPAN SURFACES (PTY) LTD

Applicant

MPUMALANGA

ECONOMIC GROWTH AGENCY

Respondent

In re:-

In the matter between:-

ROADSPAN SURFACES (PTY) LTD

Plaintiff

MPUMALANGA

ECONOMIC GROWTH AGENCY

First Defendant

LIVIERO CIVILS (PTY)

LTD

Second Defendant

JUDGMENT

GREYLING-COETZER AJ

Introduction

[1] This matter concerns two interlocutory applications in terms of Uniform Rule 30. The first Rule 30 application was launched by Mpumalanga Economic Growth Agency (“MEGA”) and the second Rule 30 application was launched by Roadspan Surfaces (Pty) Ltd (“Roadspan”) in response to the first Rule 30 application.

Background facts

[2] Roadspan instituted action against MEGA and the second defendant (“Liviero”) during 2020. Judgment was obtained against both MEGA and Liviero.

[3] MEGA successfully applied for a rescission of judgment granted against it, consequentially to which, and on 17 August 2022, MEGA caused a notice of intention to defend the action to be served. Liviero did seek to rescind the judgment and the judgment against Liviero remains.

[4] On 8 September 2022, MEGA served a Rule 30(2)(b) notice, calling upon Roadspan to remove the cause of complaint within 10 (ten) days thereof. On 23 September 2022, Roadspan served a notice of intention to amend its particulars of claim in terms of Rule 28. No objection as contemplated by Rule 28(3) was delivered by MEGA. Roadspan gave effect to its amendment by filing its amended pages on 14 October 2022.

[5] On 7 November 2022, MEGA served its Rule 30(1) application (“MEGA’s Rule 30 application”). On 21 November 2022, Roadspan served its Rule 30(2)(b) notice, calling upon MEGA to remove the cause of complaint within 10 (ten) days, being MEGA’s Rule 30 application. On 15 December 2022, Roadspan launched its Rule 30 application (“Roadspan’s

Rule 30 application”).

MEGA’s Rule 30 application

[6] MEGA alleges that Roadspan’s action proceedings against MEGA constitutes an irregular step on the follow basis: -

(a) As at the time of instituting the action proceedings against MEGA and Liviero, Liviero had been placed under provisional liquidation.

(b) Per Section 359(2)(a) of the Companies Act of 1973, if any person wishes to continue with legal proceedings against a company that has been wound-up, such person shall within 4 (four) weeks after the appointment of the liquidator(s), give the liquidator(s) notice in writing before commencing any proceeding.

(c) Section 359(2)(b) further provides that if such notice is not given, the pleadings shall be considered to be abandoned unless the court otherwise directs.

(d) Roadspan has not averred that such a notice was given. Therefore the proceedings should be considered to have been abandoned.

(e) Notwithstanding the amendment by Roadspan of its particulars of claim, said pleading does not make an averment to the effect that the notice required in terms of Section 359(2)(a) was delivered to the liquidators of Liviero.

[7] In opposition, Roadspan avers that MEGA became aware of the action at a dated and time prior to the launching of its rescission of judgment application. Discounting the fact that MEGA was already in possession of the summons for a substantial period of time prior to rescission of the judgment, and it best for MEGA, it had until 31 August 2022 (being 10 days from its notice of intention to defend) to file a Rule 30(2)(b) notice. MEGA’s Rule 30(2)(b) notice was only served on 8 September 2022.

[8] It is further contended that in terms of Rule 30(2)(c), MEGA’s Rule 30 application had to be served no later than 30 October 2022. MEGA’s Rule 30(1) application was served on 7 November 2022, therefore according to Roadspan, 17 (seventeen) court days out of time.

[9] Roadspan contends that MEGA’s reliance on the provision of Section 359(2)(a) of the Companies Act of 1973 was misplaced, as Section 359(2)(a) operates in the insistence and for the benefit of a liquidator of a company which had been wound up. Therefore, no notice as contemplated in Section 359(2)(a) was required to be given to any other party, such as MEGA, MEGA not being a company under liquidation.

[10] No replying affidavit was filed by MEGA.

Roadspan’s Rule 30 application

[11] The grounds upon which it is alleged that MEGA’s Rule 30 application constitutes an irregular step are essentially foretold in its opposition to MEGA’s Rule 30 application. It can be summarized as follows: -

(a) After rescission of the judgement against MEGA, and MEGA entering an appearance to defend, MEGA failed to file a plea, but elected to proceed with a Rule 30(2)(b) notice.

(b) The Rule 30(2)(b) notice by MEGA was 8 September 2022. According to Roadspan’s computation, the Rule 30(2)(b) notice of MEGA was to be served on 31 August 2022, which date already discounts the fact that MEGA was already in possession of the summons for a substantial period of time, since 2020. Calculating from the date of the notice of intention to defend being served pursuant to the rescission of judgment application, it amounted to the Rule 30(2)(b) notice being 6 (six) court days late.

(c) Notwithstanding above, on 23 September 2022, Roadspan served a notice of intention to amend. The intention to amend include an averment that notice of the claim and subsequent judgment was given to Liviero’s liquidator. Roadspan filed its amended pages on 14 October 2022.

(d) MEGA’s Rule 30 application was served on 7 November 2022, therefore 42 (forty-two) court days after service of its Rule 30(2)(b) notice and not in compliance with Rule 30(2)(c). The Rule 30 application was to be served within 15 (fifteen) court days after the period of 10 (ten) days afforded to Roadspan to remove the cause of complaint, therefore same was due on 13 October 2022

(e) In response, Roadspan served its Rule 30(2)(b) notice on 21 November 2022. Pursuant to the cause of complaint not being removed, its Rule 30 application was launched within the period allowed in terms of Rule 30(2)(c). In doing so MEGA’s attention was drawn to the ill-fated nature of its rule 30 Application through correspondence.

(f) As there was no agreement between the parties as foreshadowed in Rule 27(1), condonation was required for the late filing of the application, yet no case was made out in the founding affidavit to MEGA’s Rule 30 application, for the court to condone the late filing of the application.

[12] As in the opposition to MEGA’s Rule 30 application, it was reiterated that the alleged non-compliance with the Companies Act of 1973 is only available to a liquidator and not to MEGA.

[13] In opposition, MEGA contends that as Roadspan did not object to MEGA’s Rule 30(2)(b) notice, the Rule 30(2)(b) notice therefor remains valid. Further, that as Roadspan delivered a notice of intention to amend its particulars of claim, MEGA could not proceed with its Rule 30 application until the amendment had been effected. Therefore, the 15 (fifteen) day period within which MEGA was required to institute its Rule 30 application started to run after the perfection of Roadspan’s amendment. In this respect MEGA relied on the provision of Rule 28(8), which states that any party affected by an amendment may within 15 (fifteen) days after the amendment had been effected, or within such other period as the court may determine, make any consequential adjustment to the

documents filed by him, and my also take the steps contemplated in Rules 23 and 30.

[14] MEGA averred that for as far as it was wrong in its interpretation of Rule 28, it prays that the late institution of the Rule 30 application be condoned.

[15] MEGA reiterated its position in respect of Sections 359(2)(a) and (b) of the Companies Act of 1973. It alleges that the provisions are wide enough and do not exclude any party from relying on it.

[16] Apart from joining issue in its replying affidavit, Roadspan contends that Rule 28, as relied on by MEGA, relates to fresh proceedings and does not find application in the current matter.

Applicable rules of court

[17] The relevant provision of Rule 30 provides that:-

“(1) A party to a cause in which an irregular step has been taken by any other party may apply to court to set it aside;

(2) An application in terms of such rule (1) shall be on notice to all parties specifying particulars of the irregularity or impropriety alleged, and may be made only if: -

(a) the applicant has not himself taken a further step in the cause with knowledge of the irregularity;

(b) the applicant has, within 10 (ten) days of becoming aware of the step, by written notice afforded his opponent an opportunity of removing the cause of complaint within 10 (ten) days;

(c) the application is delivered within 15 (fifteen) days after the expiry of the second period mentioned in paragraph (b) and sub-rule (2).

(3) If at the hearing of such application the court is of opinion that the proceeding or step is irregular or improper, it may set it aside in whole or in part, either as against all the parties or as against some of them, and grant leave to amend or make any such order as to it seems meet.

(4) Until a party has complied with any order of court made against him in terms of this rule, he shall not take any further step in the cause, save to apply for an extension of time within which to comply

with such order.”

[18] The jurisdictional requirements pertaining to a valid Rule 30 application are that:

18.1 the applicant must not have taken a further step in the cause while aware of the irregularity;

18.2 the notice in terms of Rule 30(2)(b) must be given within 10 (ten) days of becoming aware of the alleged irregularity;

18.3 in terms of Rule 30(2)(c) the application is to be delivered within 15 (fifteen) days after expiration of the 10 (ten) day period afforded to the offending party to remove the cause of complaint;

18.4 Rule 30 applies only to irregularities of form and not to matter of substance.[1]

18.5 Prejudice is a pre-requisite in succeeding with an application in terms of Rule 30.[2]

Evaluation

[19] I consider it appropriate to commence with the Rule 30 application by Roadspan. The following is common cause alternatively not seriously disputed:-

19.1 Roadspan took no further step in the cause, whilst being aware of the irregularity of the step (the Rule 30 application by MEGA) taken by MEGA;

19.2 Roadspan’s notice in terms of Rule 30(2)(b), calling upon MEGA to remove the cause of complaint, was given within 10 (ten) days of becoming aware of MEGA’s Rule 30 application;

19.3 Roadspan served its application in terms of Rule 30(2)(c) within 15 (fifteen) days after the expiry of the 10 (ten) day period afforded to MEGA to remove the cause of complaint.

19.4 Roadspan’s complaint related to form and not substance;

MEGA’s Rule 30(2)(b) notice

[20] It is not disputed by MEGA that it had been aware of the action proceedings for a substantial period and since 2020. It is common cause that MEGA’s Rule 30(2)(b) notice was served outside the prerequisite 10 (ten) court day period prescribed. This is so even ignoring the fact that MEGA had been aware of the action proceedings for a substantial period of time as set out above.

[21] The knowledge of the action proceedings, prior to rescission of the judgment ought to be disregarded. In light of the judgment MEGA was unable to invoke Rule 30 until such time as they had successfully rescinded the judgment granted. It would have been justified to regard the date on which the rescission order was granted to be the date upon which MEGA obtained actionable knowledge of the ‘irregularity’ of the action proceedings, this was however not contended for my Roadspan.

[22] In the circumstances it is befitting to compute the 10 (ten) day prerequisite period for a valid Rule 30 as from the date on which MEGA served its notice of intention to defend, having successfully rescinded the judgment against it.

[23] Calculating from 16 August 2022 the day upon which MEGA served its notice of intention to defend the action, MEGA’s Rule 30(2)(b) notice was served outside the prerequisite 10 (ten) day period.

[24] It was argued on behalf of MEGA that said Rule 30(2)(b) notice, notwithstanding being served outside the 10 (ten) day period remained valid, as Roadspan did not object to same. Therefore, nothing turns on the late filing. It was further argued that Roadspan acted on MEGA’s Rule 30(2)(b) notice, therefore it accepted its validity, and in response Roadspan amended its particulars of claim. MEGA did not draw this court’s attention to any authority relied on for aforesaid propositions.

[25] That notice as contemplated in Rule 30(2)(b) should be given within 10 (ten) days of becoming aware of the alleged irregularity, is on a plain reading of Rule 30 an unavoidable prerequisite for a valid Rule 30 application.

[26] The argument advanced by MEGA in this respect suggests that where a Rule 30(2)(b) notice has been served outside the 10 (ten) day prerequisite time period, there is a positive obligation on the other party to object to same, and if not done and a party such as MEGA proceeds with a Rule 30 application, the other party is precluded from raising non-compliance with Rule 30(2)(b) as defense to the Rule 30 application. I do not agree, as it is open to a party such as MEGA to seek condonation for its failure to comply with Rule 30(2)(b). MEGA in its application has not sought condonation in this respect.

Has Roadspan removed the cause of complaint?

[27] It is common cause that subsequent to MEGA’s Rule 30(2)(b) notice, Roadspan served a notice of intention to amend its particulars of claim. In doing so, Roadspan included the following averment at paragraph 24 of its particulars of claim:-

“The plaintiff notified the joint liquidators of the second defendant of the claim and subsequent judgment.”

[28] It was argued on behalf of MEGA that this amendment did not address its complaint, as the amendment does not make an averment to the effect that the notice required in terms of Section 359(2)(a) was given to the liquidators of Liviero.

[29] Section 359(2) of the Companies Act of 1973 reads as follows: -

“(a) Every person who, having instituted legal proceedings against a company which were suspended by a winding up, intends to continue the same and every person who intends to institute legal proceedings for the purpose of enforcing any claim against the company which arose before the commencement of the winding up, shall within four weeks after the appointment of the liquidator give the liquidator not less than three weeks’ notice in writing before continuing or commencing the proceedings.

(b) If notice is not so given the proceedings shall be considered to be abandoned unless the court otherwise directs.”

[30] Roadspan argued that the amendment foreshadowed evidence as to the notice given to Liviero’s liquidator. I find myself in agreement with the contention by Roadspan. The amended pleaded case by Roadspan foreshadows evidence that notice has been provided to the liquidators of Liviero of the claim and the subsequent judgment. The absence of a specific averment that said notice was given in compliance with Section 359 of the Companies Act, 1973 cannot be regarded as proof that it was not notice in terms of said Section. The averment of ‘notice’ is sufficient to enable Roadspan to lead evidence on how, when, to whom and in terms of what the notice was given.

[31] When the liquidators of Liviero was appointed is unknown. As such I am not in a position to assess whether the notice foreshadowed in the pleaded case by Roadspan was given within the time period provided for in Section 359 of the Companies Act of 1973.

Was MEGA’s Rule 30 application delivered within 15 (fifteen) days as required by Rule 30(2)(c)?

[32] MEGA’s Rule 30 application was launched on 7 November 2022. It is alleged that in doing so, MEGA failed to comply with Rule 30(2)(c) in that it was served out of the prescribed time period. According to Roadspan, MEGA’s Rule 30 application had to be served by 13 October 2022 being 15 (fifteen) court days after the expiry of the initial 10 (ten) days per Rule 30(2)(b).

[33] MEGA argues that as Roadspan’s indicating that it was of the intention to amend it particulars of claim, MEGA was not in a position to launch its Rule 30 application until such time as the intended amendment by Roadspan had been perfected. As such MEGA was only able to deliver its Rule 30 application after 14 October 2022, when Roadspan filed its amended pages.

[34] According to MEGA this is reinforced by the provision of Rule 28(8), which reads that “any party affected by an amendment may, within 15 (fifteen) days after the amendment has been effected or within such other period as the court may determine, make any subsequent adjustment to the documents filed by him, and may also take the steps contemplated in Rules 23 and 30.”

[35] Lastly, it is contended on behalf of MEGA that for as far as the interpretation of Rule 28(2) is incorrect, the court is authorized to condone same and extend the period laid down by the rules, and it on that basis seeks condonation in this respect. The request for condonation is dealt with in the answering affidavit to Roadspan’s Rule 30, and was not echoed or dealt with at all in MEGA’s Rule 30 application, nor was it sought formally in a Notice of Motion or by inclusion of a prayer to that extent in its Rule 30 application.

[36] It was argued on behalf of Roadspan that its amendment in no way suspended any time periods in respect of Rule 30, and MEGA’s reliance on Rule 28(2) is equally misplaced. The entitlement expressed in Rule 28(8) that a party affected by an amendment can take steps contemplated in Rule 30 deals with new irregularities alleges to exist as a result of the amendment. Differently put that the amendment amounts to an irregular step.

[37] I am in agreement with aforesaid, in that Rule 28(8) finds application in circumstances where a party wishes to either except or raise an irregular step against the amendment effected, and does not find application in circumstances of the present matter where the purported irregular step had already been taken and Rule 30 has already been employed.

[38] Upon receipt of the notice of intention to amend, MEGA was in a position to assess whether the intended amendment would cure that complained about in terms of Rule 30(2)(b). MEGA was at that stage in the position to assess and form a view whether the intended amendment would address their complaint. In the event that, like in the present instance, said intended amendment did not address the cause of complaint raised according to a party, it was obliged to deliver its Rule 30 application within 15 (fifteen) days after expiry of the initial time period of 10 (ten) days set out in Rule 30(2)(b).

MEGA’s condonation for the belated launching of the Rule 30 application

[39] It is trite law that a party seeking condonation must provide a full and acceptable explanation for every period in respect of which the default exists. In Van Wyk v Unitas Hospital and Another (Open Democratic Advice Centre as amicus curiae)[3] the Constitutional Court held that:

“an applicant for condonation must give a full explanation for the delay. In addition, the explanation must cover the entire period of delay. And, what is more, the explanation given must be reasonable.”

[40] The condonation was sought by MEGA in the answering affidavit to Roadspan’s Rule 30 application. No condonation was sought or case made out in MEGA’s founding affidavit to its Rule 30 application. Its explanation is essentially that if MEGA is found to be wrong in its interpretation of Rule 28(8) then it sought failure to adhere to Rule 30(2)(c) should be excused on the basis of the misinterpretation. The explanation is not reasonable in the circumstances. Rule 30(2) is explicit on what is required of a litigant to successfully rely thereon.

[41] Said condonation is also sought only in respect of the non-compliance with Rule 30(2)(c), without condonation being sought for the initial non-compliance in respect of service of the Rule 30(2)(b) notice being given outside of the 10 (ten) day period, which renders the latter condonation futile. As held by Mashile J in the unreported matter of Lekwa Local Municipality and Another v Afri-Infra Group (Pty) Ltd[4] “in the sense the Rule 30(2)(c) application is unsustainable as it has no anchor. Thus, an order condoning its late service will be meaningless.”

Conclusion

[42] MEGA’s Rule 30 application lacks merit for want of compliance with Rules 30(2)(b) and (c), and it has not having made out a case for condonation. Accordingly, it is unnecessary to deal with whether Section 359(2) of the Companies Act, 1973 is available to MEGA. This is an issue which can be properly ventilated in the main action.

[43] I therefore find that Roadspan’s Rule 30 application ought to succeed, having established all the jurisdictional requirements for the irregular step. Roadspan has adequately displayed prejudice, in the circumstances of the matter. The approach adopted by MEGA was overly technical, in persisting with the predestined Rule 30 application, not yet having filed a plea, and consequentially hindering the advancement of the litigation, and avoiding the full ventilation of the issues.

Costs

[44] Roadspan has been successful. There is no reason why the cost should not follow the result. Roadspan has however sought an order that the cost be on an attorney-and-client scale jointly and severally against MEGA and its legal representative. In this respect MEGA was duly notified of Roadspan’s intention to seek said cost order.

[45] The Rule 30 application by MEGA has been ill-conceived. MEGA has in my view persisted with its Rule 30 application in circumstances where its non-compliance with Rule 30(2)(b) was evident, its basis questionable having regard to the applicable authorities dealing with whether or not Section 359(2) is available to a party who is not a liquidator, such as the matter of Nedcor Bank Ltd v Samuel and Another[5] which was enclosed to the initial correspondence directed to MEGA’s legal representatives as far back as 21 November 2022, and the appeal court authority referred to therein.

[46] MEGA’s Rule 30 application and the necessity of Roadspan’s Rule 30 application have caused a delay of approximately one year in the proper ventilation of the action between the parties. Within such action the issue in respect of the applicability of Section 359(2) could have been ventilated. So too Roadspan’s claim will attract interest. In my view aforementioned justifies the granting of attorney and client costs. That said I don’t agree that the costs should be granted jointly and severally against MEGA and its legal representative.

Order

[47] In the result, the following order is made: -

1. MEGA’s Rule 30 application dated 4 November 2022 amounts to an irregular step.

2. MEGA’s Rule 30 application dated 4 November 2022 is dismissed.

3. MEGA is ordered to pay the cost of the application on an attorney-and-client scale.

DATE OF HEARING:

10 August 2023

DATE OF JUDGMENT:

09 November 2023

For ROADSPAN, the Applicant in its Rule 30 application & Respondent in MEGA’s Rule 30 application: ADV I.L. POSTHUMUS Instructed by Pagel Schulenburc Inc c/o Swanepoel and Partners lombard@law.co.za E-mail: ngp1@swanven.co.za & For MEGA, the Applicant in its Rule 30 application & Respondent in Roadspan’s Rule 30 application: ADV V.S. NOTSHE SC Instructed by Obert Ntuli Attorneys E-mail: jan@ntuliinc.co.za

[1]

Nyaniso v Head of Department of Sports, Recreation, Arts and Culture, Eastern Cape Province (unreported, ECB case no: 643/2014) dated 27 September 2016 at par [11]; Odendaal v De Jager 1961 (4) SA 307 (O) at 310F-G

[2] Van Heerden NO v Potgieter NO 2022 (6) SA 315 (FB) at par [23]-[26]

[3] [2007] ZACC 24; 2008 (2) SA 472 (CC) at par [22]. See also SA Express Ltd v Bagport (Pty) Ltd 2020 (5) SA 404 (SCA) at par [34]

[4] (2597/2018) [2022] ZAMPMBHC 65 (8 August 2022)

[5] 2005 (2) SA 439 (W)