FirstRand Bank Limited v Nedbank (Swaziland) Limited

The respondent (Nedbank Swaziland) sued the appellant (FirstRand Bank) initially as a cessionary of Swaziland Timber Products Limited's claim based on unjust enrichment. The original claim alleged that Swazi Timber operated an account with the respondent, and that a Mr Cawood, an employee of Swazi Timber, fraudulently removed blank signed cheques, made them payable to himself and Diamond Laser Bureau, and deposited them at the appellant's Birnam branch. The proceeds were applied to reduce Cawood's and Diamond Laser's overdrawn accounts with the appellant. Despite a stop payment instruction, Nedcor paid the proceeds to the appellant and debited the respondent's account, which in turn debited Swazi Timber's account. The summons was served on 20 July 2000. After the prescriptive period had elapsed (26 June 2001 and 2 October 2001), the respondent amended its particulars of claim to delete all reference to suing as cessionary and instead alleged that it was suing in its own right. The amended claim alleged that cheques were intercepted in transit between Nedcor and the respondent, preventing the respondent from debiting Swazi Timber's account or dishonouring the cheques. The appellant filed a special plea of prescription, arguing that the amended claim relied on a different debt/right of action that had prescribed.

• Whether an amendment to particulars of claim delivered after the prescriptive period had elapsed interrupted prescription in respect of the amended claim
• Whether the right of action disclosed in the amended particulars of claim was the same or substantially the same as that disclosed in the original summons
• Whether service of a summons claiming one right of action interrupts prescription in respect of a different right of action subsequently relied upon after amendment

The appeal succeeded with costs, including costs of two counsel. The order of the court a quo was set aside. The defendant's (appellant's) special plea of prescription was upheld and the plaintiff's (respondent's) claim was dismissed with costs.

Service of a summons only interrupts the running of prescription in respect of the specific right of action disclosed in that summons. An amendment to particulars of claim delivered after the prescriptive period has elapsed will only relate back to the original service if the right of action disclosed in the amended claim is recognizable as the same or substantially the same as that disclosed in the original summons. Where the essential elements of the claim change - such as the identity of the impoverished party in an enrichment action - the rights of action are different, and the original service does not interrupt prescription in respect of the amended claim. The fact that some factual allegations overlap or that the enriched party (defendant) remains the same is insufficient if the fundamental basis of the right of action has changed. In an enrichment action, the impoverishment of a specific party is an essential element; a change in the identity of the impoverished party (from a third party cedent to the plaintiff itself) constitutes a different right of action.

The court noted Trollip JA's reservation in Neon and Cold Cathode Illuminations (Pty) Ltd v Ephron about the correctness of Park Finance Corporation (Pty) Ltd v Van Niekerk on its facts, but found it unnecessary to decide whether Park Finance was correctly decided. The court observed that even if Park Finance was incorrectly decided, it was distinguishable because in that case the underlying contractual right remained the same, with only the identity of the contracting party being corrected. Similarly, the court found it unnecessary to decide the correctness of Grindrod (Pty) Ltd v Seaman, noting that case was also distinguishable on its facts. The court emphasized that 'debt' and its correlative 'right of action' bear a wide and general meaning, distinct from the technical meaning of 'cause of action' which describes the set of material facts relied upon to establish the right of action.

This case is significant in South African law for clarifying the principles governing when an amendment to particulars of claim will interrupt prescription. It establishes that for prescription to be interrupted by service of a summons, the right of action (not merely the cause of action) disclosed in amended pleadings must be recognizable as the same or substantially the same as that in the original summons. The case demonstrates that where essential elements of a claim change (such as the identity of the impoverished party in an enrichment action), these constitute different rights of action, and the original service does not interrupt prescription for the new claim. The judgment reinforces the technical requirements of prescription law and the importance of correctly identifying the creditor and essential elements of a claim from the outset. It provides important guidance on the application of section 15(1) of the Prescription Act 68 of 1969 in the context of amendments to pleadings.