This is an appeal against the whole of the judgment of the High
Court handed down on 22 May 2013. This was a matter in which the court
granted the respondent leave to further amend its declaration.
The background to the matter may be summarised as follows:
On
6 July 2004, the respondent issued summons against the appellant and
Saturn Trading and Investments Limited (“Saturn Trading”) jointly and
severally and in solidum for payment of US$900,000 [Nine Hundred
Thousand United States Dollars]. The respondent alleged, that, this
amount represented overpayment of a loan advanced to Saturn Trading for
onward lending to third parties.
In terms of their alleged
agreement, the respondent purported that Saturn Trading would receive
repayments directly from the third parties concerned, and, if any
over-payment occurred, such would be refunded to the respondent.
Allegedly, in breach of the parties agreement, Saturn Trading failed to refund money which had been overpaid to it.
The
respondent then sued Saturn Trading in the High Court, claiming, in its
declaration, that, it had been unjustly enriched by the overpayment at
the respondent's expense. Further in that suit, the respondent sued the
appellant on the grounds that as director, agent, or alter ego of Saturn
Trading, he was fully aware of the transactions in question, and,
hence, had a duty of care towards the respondent. In breach of that
duty, the respondent charged that the appellant had carried out Saturn
Trading's business negligently, recklessly, fraudulently and without due
care resulting in the respondent suffering loss in the amount claimed.
It
is common cause that both Saturn Trading and the appellant defended the
suit, disputing the existence and terms of the alleged loan agreement,
the alleged over-payment, and any duty of care whatsoever towards the
respondent, on the part of the appellant.
At the pre-trial
conference which was held on 26 September 2006, the respondent obtained
leave, with the consent of the appellant, to amend its declaration by
the deletion of a certain paragraph and its substitution with another.
After
the pretrial conference, the matter was set down for trial on 29
January 2007, but, for reasons which are not apparent from the papers,
it was postponed sine die.
Some ten months later, on 30 November
2007, the respondent's legal practitioners wrote to the appellant's
legal practitioners requesting their consent to further amend its
declaration.
The appellant's legal practitioners did not accede to the request.
This
prompted the respondent to file an application for leave to amend its
declaration in terms of Order 20 Rule 132 of the High Court of Zimbabwe
Rules 1971. According to the respondent, this was in order to clarify
the existing causes of action.
The appellant opposed the
application on the basis, that, the amendment had come late in the day,
since it was being made four (4) years after the action was originally
instituted, and, as such, the new causes of action which the amendment
sought to bring had prescribed.
The court a quo granted the
respondent leave to amend its declaration, and any other pleadings which
they wished to have amended.
The appellant was aggrieved by this decision and filed this appeal.
Before
I turn to address the issues raised by the appeal, it is important to
note, that, in this appeal, the Court is being called upon to interfere
with the exercise of a discretion by the judge a quo.
The judge correctly stated as follows in this respect:
“In our law, granting or refusal of leave to amend is a matter entirely in the discretion of the court.”
That
the court has this discretion is evident in Rule 132 of Order 20 of the
High Court Rules. The Rule provides, that, the court may allow a party, at any stage of the proceedings, to amend his pleadings and that:
“..,
all such amendments shall be made as may be necessary for purposes of
determining the real question in controversy between the parties.”
While
Rule 132 of the High Court Rules is made subject to Rule 134, I do not
find the latter Rule to be applicable to the circumstances of this case,
since it specifically deals with an amendment to the pleadings that has
the effect of including or substituting a cause of action arising after the issue of summons.
This has not been claimed in casu.
This
court, however, has the power to interfere with the exercise of the
court a quo's discretion in appropriate circumstances, as aptly
explained as follows in HERBSTEIN & Van WINSEN, 5th ed…,.;
“The
court, on appeal, will interfere where the exercise of the discretion
has not been proper, or has been based upon a wrong principle, or upon a
wrong view of the facts; where the court has purported to exercise its
discretion without sufficient legal grounds for doing so….,.”
See also Barrows & Anor v Chimphonda 1999 (1) ZLR 58 (S)…,.
The
appellant contends, that, the court a quo improperly exercised its
discretion in granting the respondent leave to amend its declaration.
This is because, he further contends, the court relied not only on wrong
principles of the law, it also failed to take into account a crucial
and relevant factor, that is, the issue of prescription.
As is
evident from the appellant's grounds of appeal, the two issues on the
basis of which it is alleged that the court a quo improperly excercised
its discretion relate to the question of whether or not the proposed
amendment raised new causes of action, and, if so, whether, in the
circumstances of the case, the new causes of action had prescribed.
Whether or not the amendment brings about new causes of action
Counsel
for the appellant argued, that, the court a quo should not have granted
leave to amend the declaration for the reason that the amendment has
the effect of introducing unjust enrichment, fraudulent
misrepresentation, and theft, as new causes of action.
Counsel
for the respondent, on the other hand, contends that leave to amend was
correctly granted by the court a quo in terms of Rule 132 of the High
Court Rules, which permits amendments in respect of any cause of action.
Despite
his initial submission that all the allegations had been pleaded in the
original declaration and that the amendment merely sought to clarify
these allegations, counsel for the respondent, during the hearing,
conceded that theft was indeed sought to be introduced as a new cause of
action....,.
One does not 'expand' on what is not already in existence...,.
Theft
I turn now to deal with the allegation of theft levelled against the appellant.
I
have indicated already, that, counsel for the respondent conceded that
this indeed constituted a new cause of action, sought to be introduced
for the first time through the amendment applied for by the respondent.
The allegation of theft, direct or indirect, is conspicuous by its absence from the respondent's original declaration.
The
question that arises now, is, whether the introduction of a new cause
of action, in circumstances such as these, is allowed in terms of the
rules of the High Court.
The respondent contends, that, Rule 132
of the High Court Rules (already cited) did not rule out the
introduction of a new cause of action in the circumstances stipulated
therein.
Counsel for the appellant, correctly, contends that the
provisions of Rule 132 of the High Court Rules are subservient to those
of Rule 134 of the High Court Rules, which provides as follows:
“A
summons or declaration may, with the leave of the court or a judge, be
amended to substitute or to include a cause of action arising after the issue of summons.
Provided
that in the opinion of the court or judge, such an amendment does not
change the action into, or add to it, an action of a substantially
different character which would more conveniently be the subject of
fresh action.”
My reading of the two
provisions, together, suggests that while Rule 132 of the High Court
Rules relates to proposed amendments generally, Rule 134 of the High
Court Rules refers specifically to proposed amendments seeking to
substitute causes of action arising after the issue of the summons in question.
It
would thus appear, as correctly contended for the respondent, that,
there is no provision that specifically prohibits or qualifies proposed
amendments that seek to introduce a new cause of action that would have
arisen before the summons were issued.
In casu, the fact that the alleged theft occurred before the summons in question was issued, is not disputed.
The issue, rather, is that the claim had, as of the date of the filing of the application to amend the declaration, prescribed.
One
can envisage a cause of action which, albeit arising before the summons
in question are issued, has nevertheless not prescribed at the time an
amendment is sought to include it in the same summons.
This, in my view, is the type of amendment that may appropriately be considered in terms of Rule 132 of the High Court Rules.
Different
considerations come into play, however, where the new cause of action
sought to be introduced, has prescribed as of the date of the filing of
the application.
Rule 132 of the High Court Rules is not to be
read as allowing a court to order amendments to pleadings in a manner
that would effectively resuscitate a cause of action that has, by law,
prescribed.
Clearly, subsidiary legislation cannot undermine or alter substantive law.
Counsel
for the appellant, in this respect, correctly cites the following
apposite dictum from the case of In Coutts & Co. v Ford & Anor
1997 (1) ZLR 444 (H)…, where CHIDYAUSIKU J…, stated as follows:
“Thus,
the clear intention of the legislature, as expressed in the above
provision, is to make prescription a matter of substantive law as
opposed to procedural law. The above provision clearly extinguishes the
debt as opposed to merely barring the remedy.”
The same point was
aptly articulated by the court as follows in the case of Evins v Shield
Insurance Co. Ltd 1980 (2) SA 814 (A)…,.;
”Where the plaintiff
seeks, by way of amendment, to augment his claim for damages, he will be
precluded from doing so by prescription if the new claim is based upon a
new cause of action and the relevant prescriptive period has run….,.”
On
the basis of the law and authorities on prescription, it was clearly
not open to the respondent in casu to seek an amendment to its
declaration, whose effect would have been to introduce a prescribed
cause of action - that is theft.
It follows, that, the judge a quo misdirected himself in disregarding this relevant fact and ordering the amendment in question.
This court can, therefore, properly interfere with the judge's discretion in this respect....,.
1....,.
2. Paragraph 1 of the order of the court a quo is amended by the addition of the following:
“Provided that all reference to the claim of theft against the second defendant personally is expunged from the said annexure 'D'.”
