Wiesenhof Management Services (Pty) Ltd v Wiesenhof Ellisras and Others (19068/2012) [2015] ZAGPPHC 719 (8 October 2015)

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

Case number: 19068/2012

8/10/2015

In the matter between:

WIESENHOF MANAGEMENT SERVICES (PTY) LIMITED

APPLICANT

And

WIESENHOF ELLISRAS

1st RESPONDENT

PANSERGROUW, GERHARDUS STEPHANUS

2nd RESPONDENT

PANSERGROUW, ELSIE CATHARINA 3rd RESPONDENT

WELMAN, FWP

4th RESPONDENT

JUDGMENT

DE KLERK (AJ)

Introduction:

[1] The Applicant (who is the Plaintiff in this action) seeks leave from this Court to amend the citation of the First Respondent (who is the First Defendant in the action) in the Particulars of Claim.

[2] The Respondents' object to the proposed amendment on the basis that the Applicant, with the proposed amendment, seeks to substitute an unincorporated entity with an incorporated entity in circumstances where any claim against the latter has already prescribed.

[3] The Applicant issued summons against the Respondents citing the First Respondent as: "Wiesenhof Ellisras a partnership alternatively a firm or other unincorporated entity", being the trade name of the business.

[4] The Applicant now seeks to amend the citation of the First Respondent by deleting the phrase "a partnership alternatively" and substituting it with the following - "an incorporated legal entity the full particulars of which are to the Plaintiff unknown, alternatively, a partnership".

Common cause facts:

[5] The cause of action is a franchise agreement entered into between the Applicant and the Respondents during or about August 2009.

[6] In terms of the said agreement the Applicant granted to the Respondents an exclusive license to operate the licensed business

from a certain premises in Ellisras. In consideration for the right granted to the Respondents in terms of the said agreement the

Respondents would pay to the Applicant monthly royalties.

[7] 'Licensed business' is defined in the said agreement as 'the franchised business being a Wiesenhof franchise, operated by the

franchisee and further in terms of this agreement from the premises'.

[8] On or about the 1st of November 2009 the Respondents commenced trading from the said premises.

[9] The Applicant alleged that the Respondents breached the terms of the agreement as a consequence of which the Applicant cancelled

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the agreement on or about the 18th of August 2011 and claimed arrear royalties as well as damages from the Respondents.

[10] The summons was served at the Respondents chosen domicilium to wit Beyers & Day Attorneys in Pretoria, whereupon the latter entered appearance to defend on behalf of the Respondents.

[11] The Respondents further served a Notice to remove a cause of complaint and thereafter an exception to the Applicant's Particulars

of Claim.

[12] The Respondents excepted to the Applicant's Particulars of Claim on seven grounds. The Respondents exception was dismissed on all but one ground.

[13] The Applicant's Notice of intention to amend was served on 6 November 2014.

[14] The proposed amendment was occasioned by information obtained from the Respondents' attorneys to the effect that the proprietor of the First Respondent might be a close corporation.

[15] The Respondents have to date not pleaded and positively stated who they contend traded as the First Respondent.

Submissions:

[16] Counsel for the Applicant's argument was that the original citation of the First Respondent was a mere misnomer which could be corrected by the amendment sought.

[17] Counsel for the Respondents argued in turn that the amendment now sought by the Applicant amounted to an attempt to substitute an unincorporated entity with an incorporated entity in circumstances where any claim against the latter has already prescribed.

[18] Both Counsel are however correctly ad idem that the Applicant cannot introduce a new party if the Applicant's claim against any such entity has already prescribed.

Issue:

[19] The issue for adjudication is therefore whether the proposed amendment should be allowed or not.

Legal position:

Amendments:

[20] In Whittaker v Roos and Another 1911 TPD 1092 at 1102 it was held that: "This Court has the greatest latitude in granting amendments, and it is very necessary that it should have. The object of the Court is to do justice between the parties. It is not a game we are playing, in which, if some mistake is made, the forfeit is claimed. We are here for the purpose of seeing that we have a true account of what actually took place, and we are not going to give a decision upon what we know to be wrong facts. It is presumed that when a Defendant pleads to a declaration he knows what he is doing, and that, when there is a certain allegation in the declaration, he knows that he ought to deny it, and that, if he does not do so, he is taken to admit it. But we all know, at the same time that mistakes are made in pleadings, and it would be a very grave injustice, if for a slip of the pen, or error of judgment or the misreading of a paragraph in pleadings, by Counsel, litigants were to be mulcted in heavy costs. That would be a gross scandal. Therefore, the Court will not look to technicalities, but will see what the real position is between the parties."

[21] Overall, however is the vital consideration that no amendment will be allowed in circumstances which will cause the other party such prejudice as cannot be cured by an order for costs and, where appropriate, a postponement (see Robinson v Randfontein Estates Gold Mining Co. Ltd 1925 AD 173 at p178).

Rule 14 of the Uniform Rules of Court:

[22] Rule 14 of the Uniform Rules of Court reads as follows:

"14 Proceedings by and against partnerships, firm and associations:

(1) In this rule-

'Association' means any unincorporated body of persons, not being a partnership.

'Firm' means a business including a business carried on by a body corporate, carried on by the sole proprietor thereof under a name other than his own..."

(2) A partnership, a firm or an association may sue or be sued in its name."

[23] The object of Rule 14 is to simplify the method of citation in respect of a number of situations where a business was being

conducted or bore a name which was descriptive of it and to eliminate technical difficulties when citing parties involved in civil

litigation (see Cupido v Kings Lodge Hotel 1999 (4) SA 257 (E)).

[24] The business name is really the alias of its sole proprietor the identity of which is unknown or uncertain.

[25] The sole proprietor may be a company that carries on business under a trade name in which case the trading name may be used in litigation without reference to the company. (see Durban City Council v Jai/ani Care 1978 (1) SA 151 (D))

[26] In Durban City Council v Jailani Cafe supra at 159 it was held as follows in this regard:

"The comment in Nathan, Barnett & Brink p 82 that:

"It would appear, therefore that if 'X' Company Ltd. conducts a business under the name of say 'Supreme Bazaars' this 'firm' may be sued in such name without reference to the company appears not only to be a proper construction of the Rule but to be in accordance with the practice of this Court as I have known it for the past 25 years."

[27] In Embling and Another v Two Oceans Aquarium CC 2000 (3) SA 691 (C) at 701 it was held that:

"In so far as the Hip Hop case might go further to decide that, as a general rule, the amendment of a pleading to change the description of the Defendant as a firm to a description of the Defendant as a company always amount to the substitution of one party for another. I respectfully disagree...

In O'Sullivan v Heads Model Agency CC 1995 (4) SA 253 (lN,I... the Applicant sough to amend the citation of the third party in a third party notice from 'Heads Model Agency a firm to Heads Model Agency CC. In allowing the amendment Flemming DJP made the following cogent remarks 'when a party realises that a pleading is addressed to him and responds accordingly, the situation seems to come within the scope of Mutsi v Santam Versekerings Maatskappy Bpk en 'n Ander 1963 (3) SA 11(0). Whether or not it is a situation of a mere misnomer the amendment then does not seek to change parties but to describe with accuracy the party which was successfully ... brought before Court...

In considering the facts before me, I am mindful of the following dictum of Marais J in the du Toit case supra at 569J - 570D: "The point that a "wrong" Defendant has been cited not infrequently rears its head when the defendant pleads often after prescription has ran. It is often the case that the intention of the plaintiff is to cite the entity conducting a specific business at a specific address and the defendant served with the summons is in no doubt that it is indeed the intended defendant. In such a case courts should lean towards allowing amendments which would correct inadvertent incorrect descriptions and should not be astute to refuse such amendments involving the description of the Defendant on pure semantic and legalistic grounds which ignore the realities of the situation as perceived by the parties, themselves. By so refusing an amendment at the instance of the Defendant the Court lend themselves to an exercise in formalism, the object of which is to enable a Defendant to escape a summons which it knows is directed to it and often to wholly defeat a claim which has by then prescribed. Courts should not formalistically ignore the fact, if such it be, that the party now sought to be accurately described was the party whom the Plaintiff intend to sue, even though the Plaintiff had only a vague or fuzzy idea of the correct description of the Defendant, and the Defendant itself knew very well that the summons was directed to it when it was served ...'

In the original summons and Particulars of Claim the Defendant was described as 'the Two Oceans Aquarium CC'... Notice of intention to defend was filed on behalf of an entity described as the 'Two Oceans Aquarium Trusf ... Subsequently, a special plea was filed whereby the Defendant denied that it was Two Oceans Aquarium CC, pleaded that is was the Two Oceans Aquarium Trust and averred that any claim which the Plaintiffs may have had for damages against the trust. .. had prescribed.

Mr. Saner, who appeared for the Plaintiffs and Mr. Goddard who appeared for the Defendant agreed that, if the Plaintiffs claim against the trust had indeed already prescribed, then the amendment should not be granted as this would ..... cause serious prejudice to the trust which could not be cured by an order as to costs...

The crisp question is therefore whether the Plaintiffs claim against the trust has indeed prescribed or whether the running of the period of prescription was interrupted by the service of the un-amended summons.

Mr Goddard's argument was, however, that the original combined summons is a nullity as the defendant, as described therein... did not exist at the date of issue of the summons ...

I am not convinced by this argument. It has been held in several cases that a summons may interrupt the running of prescription even if it discloses no cause of action provided that it is capable of amendment. Thus, in the recent case of Sentrachem Ltd v Prinsloo 1997 (2) SA 1 (A) the Appellant Division stated the following: "Vir die doeleindes van die stuiting van verjaring is di!dus nie nodig dat die dagvaarding, waardeur die skuldeiser poog om betaling van sy skuld af te dwing, 'n skuldoorsaak hoef te openbaar nie... Die enigste voorbehoud is dat die dagvaarding nie so gebrekkig meet wees dat dit 'n nulliteit is in die sin dat dit nie vatbaar is vir wysiging om die gebreke aan te suiwer nie.... So 'n wysiging sal uiteraard nie 'n ander vorderingsreg naas die oorspronklike kan inbring nie, ... of .... 'n nuwe party tot die geding kan voeg nie.

.....An application of the test formulated by Eksteen JA in the Sentrachem case leads me to the conclusion that provided that the Defendant as described in the amended summons is clearly recognisable from the original summons, the amendment sought by the Plaintiff amounts to no more than the "clarification of a defective pleading and not the introduction of a new legal entity as the Defendant...

The facts of this case are in my view analogous to the facts in the Mutsi case, outlined in the headnote of the reported judgement as follows: ... Applicant was insured with the first respondent but by mistake had issued summons against the second respondent. He now applied to amend his summons in order to substitute the name of the first respondent for that of the second respondent. ..

First and Second Respondents, insurance companies, carried on business at the same address and under the same abbreviated name...

The Mutsi case pertinently raised the question as to whether the running of the period of prescription of the applicants claim against the First Respondent had been interrupted by the service of the summons issued against the Second Respondent. Hofmeyer J answered this question in the affirmative and granted the application for amendment."

Conclusion:

[28] The factual position is, as appears form the papers.that the entity which the Applicant intended to sue was the legal entity conducting business as Wiesenhof Ellisras (whether unincorporated or incorporated) at the specific address.

[29] The Respondents knew that the summons was directed to them when it was served and that they were the intended Respondents and responded accordingly.

[30] The First Respondent as described in the Applicant's Notice of intention to amend is clearly recognisable from the original summons.

[31] Consequently the amendment does not amount to the introduction of a new legal entity as the First Respondent.

Order:

[32] In the light of the aforesaid I am allowing the amendment involving the description of the First Respondent. No order as to costs.

Dated at Pretoria on the 8th day of October 2015.

______________________

DE KLERK

ACTING JUDGE OF THE GAUTENG DIVISION HIGH COURT, PRETORIA

APPLICANTS REPRESENTATIVES

ADVOCATE: E Kromhout

INSTRUCTING ATTORNEY: T Van Straten

Gary Janks Attorneys c/o

Friedland Hart Solomon & Niccolson

RESPONDENTS REPRESENTATIVES

ADVOCATE: G.F Heyns

INSTRUCTING ATTORNEY: M Day from Day Incorporated