BACKGROUND
This matter was heard by a full bench of the Supreme Court of Appeal with leave of the court a quo, being the High Court of South Africa, Gauteng Division, Pretoria. In the main action, Tusk Construction (Pty) Ltd (“the First Appellant”) and Joint Equity Investments (Pty) Ltd (“the Second Appellant”) sued the Independent Development Trust (“the Respondent”) for payment of a sum of R2.5 million.
In its combined summons, the Appellants cited the Respondent as follows:
The defendant is the INDEPENDENT DEVELOPMENT TRUST; (Registration Number 669/91) a Schedule 2 Public Entity in terms of the Public Finance Management Act 1 of 1999; as amended with its head office situated at Glenwood Office Park, Cnr Oberon and Sprite Streets, Faerie Glen, Pretoria.
At trial, counsel for the Respondent argued that its citation as a defendant was irregular and impermissible and that its trustees should instead have been cited in their representative capacity. In order to remedy this defect, 2 (two) interlocutory applications were brought by the Appellants, the first of which was for leave to amend the combined summons (since the Respondent objected to the Appellants’ rule 28(1) notice). This was opposed by the Respondent, on the basis that the proposed amendment was manifestly doomed to failure because the action instituted against it was a nullity, due to its defective citation of the Respondent.
Another action was instituted by the First Appellant, which was based on the same cause of action as the pending proceedings, although only the First Appellant and not the Second Appellant featured herein. The second interlocutory application was for leave to consolidate the main action with the abovementioned action, which had been instituted against the trustees of the Respondent in their representative capacity. This application was conditional upon the application for amendment being successful.
The court a quo dismissed both interlocutory applications finding that there was merit in the contention that the action was a nullity, due to the defective citation of the Respondent. It was further held that the Appellants appreciated the impossibility of reviving a still born action by virtue of its nullity ab initio, and that they attempted to circumvent such difficulty by bringing the second action. For that reason, the second interlocutory application to consolidate the actions was therefore mala fide and vexatious.
HELD
On appeal, the legal question before the court was whether the summons issued against the Respondent was a nullity, purely based on the citation of the trust as a defendant instead of the trustees in their representative capacity, that could not be cured by way of amendment.
The court considered the status of trusts within South African law and noted that whilst a trust lacks legal personality, it is nevertheless a legal entity sui generis. The court further confirmed that it is trite law that in legal proceedings by or against a trust the trustees must be cited in their representative capacity and not in their private capacity.
The court further noted that in the absence of any prejudice to the other party, which cannot be compensated by a costs order or some other suitable order such as a postponement, an application for amendment of pleadings, unless it is brought in bad faith, should ordinarily be granted. It was held that what the proposed amendment sought to achieve was purely the substitution of the trustees in their representative capacity for the Respondent. In these circumstances, the substance of the claim would not be affected, as the amendment would simply give linguistic effect to the legal rule that a trust lacks legal personality.
The court finally held that none of the grounds upon which the application for amendment was opposed by the Respondent were likely to succeed, especially due to the fact that the desired amendment sought to rectify the misdescription of the trust to the extent that it had to be represented by its trustees in legal proceedings. The court emphasised that we no longer live in the Justinian era when, if a mistake was made by a litigant, a claim or defence would be forfeited. The object of the court is to do justice between the parties, therefore it will not look to technicalities, but will see what the real position is between the parties.
The Appellants were granted leave to amend their combined summons, by substituting the name of the trust for the names of the trustees in their representative capacity, where applicable; and the Respondent was held liable for the costs, occasioned by its opposition to the application for amendment.
VALUE
The citation of a trust as a party to legal proceedings does not render a summons null and void simply because the trust lacks juristic personality. Such a summons is capable of amendment, to reflect the trustees as parties in their representative capacity, to the extent that such amendment does not affect the substance of the claim.
Written by Kirsten Chetty and Elani Vogel
