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[2021] ZAGPJHC 37
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Botha t/a Tax Consulting SA v Renwick (2019/35217) [2021] ZAGPJHC 37 (13 April 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
number: 2019/35217
In
the matter between:
CHRISTOFFEL
BOTHA t/a TAX CONSULTING SA
Applicant / Plaintiff
and
CHRISTOPHER
JAMES MCLURE RENWICK
Respondent / Defendant
JUDGMENT
[1]
This is an opposed belated application for
security under rule 47 and an opposed application for condonation of
the lateness. For
the sake of convenience, the parties are referred
to as they are cited in the action under the above case number. Thus,
the Applicant
is referred to as the Plaintiff and the Respondent is
referred to as the Defendant. Where documents are quoted in which the
parties
are referred to differently, such references are changed to
the Plaintiff and the Defendant respectively.
The relevant history
of the litigation between the parties
[2]
The litigation between the parties that is
relevant to this application started with an application by the
Plaintiff for leave to
sue the Defendant by edictal citation. That
application was granted on 29 January 2020.
[3]
The Plaintiff served a summons on the
Defendant by email on 12 February 2020. The Defendant filed a notice
of intention to defend
and a plea on 25 February 2020.
[4]
The Plaintiff launched a summary judgment
application and alleges that it was served on the Defendant on 16
March 2020. The Plaintiff
also alleges that the set down in respect
of the hearing of the summary judgment application was served on the
Defendant by email
on 20 March 2020 and on 28 April 2020. The
Defendant admits that the Plaintiff’s attorney sent the summary
judgment application
to him by email during March 2020. He denies,
however, having received any of the notices of set down in respect of
that application.
Summary judgment was granted against the Defendant
on 18 May 2020 on an unopposed basis.
[5]
On 10 July 2020, the Defendant served an
application for rescission of the judgment granted against him. The
parties’ legal
representatives confirmed at the hearing of the
present applications that the Plaintiff filed his answering affidavit
in the rescission
application on 11 August 2020 and the Defendant his
replying affidavit on 19 August 2020. The rescission application is
still pending.
[6]
On 4 August 2020, the Plaintiff’s
attorney addressed a letter of demand to the Defendant’s
attorney. The purpose of
that letter was to demand from the Defendant
security for the Plaintiff’s costs in respect of the rescission
application
as well as all future litigation. It reads as follows in
relevant part:
“
2.
We address this letter to you in terms of Rule 47(1) of the Uniform
Rules of the High Court.
3.
We confirm that as per [the Defendant’s] founding
affidavit he
is residing overseas.
4.
We are advised that [the Defendant] does not own immovable
property
in South Africa. We are further advised that [the Plaintiff] has been
receiving letters from various creditors of [the
Defendant], which we
enclose hereto. We are of the view that this is indicative of the
fact that [the Defendant] does not intend
to honour his debts
incurred in South Africa.
5.
Given [the Defendant’s] financial position in South
Africa, any
costs granted by the court in favour of [the Plaintiff] in respect of
the application for rescission or any future
litigation will be
difficult as well as costly for [the Plaintiff] to recover.
6.
In the circumstances, [the Plaintiff] demands that [the
Defendant]
furnishes security for [the Plaintiff’s] costs in respect of
the rescission application as well as all future
litigation. In this
regard, we estimate that the costs for the rescission application
alone will amount to R100 000.00.
7.
We demand that [the Defendant] make payment of the amount
of R100
000.00 into our trust account within 7 days from delivery hereof,
failing which we intend to apply to court for an order
that security
in the aforementioned amount be given and that all proceedings be
stayed until such order is complied with.”
[7]
The Defendant’s attorney replied to
the letter of demand on 18 August 2020. The reply reads as follows in
relevant part:
“
3.
Kindly note that we have consulted with [the Defendant] in respect
of
your request
to furnish security, and have obtained instructions in the
following:
3.1.
That [the Defendant] shall not furnish security for [the Plaintiff’s]
costs in respect of the application;
3.2.
That in the event [the Plaintiff] launches an application in respect
of security
for costs, such an application shall be opposed.”
[8]
The Plaintiff served the security
application and the condonation application on 27 August 2020.
The condonation
application
[9]
Rules 47(1) and (3) provide as follows:
“
(1)
A party entitled and desiring to demand security for costs from
another
shall, as soon as practicable after the commencement of
proceedings, deliver a notice setting forth the grounds upon which
security
is claimed, and the amount demanded.
(2)
…
(3)
If the party from whom security is demanded contests his liability
to
give security or if he fails or refuses to furnish security in the
amount demanded or the amount fixed by the registrar within
ten days
of the demand or the registrar’s decision, the other party may
apply to court on notice for an order that such security
be given and
that the proceedings be stayed until such order is complied with.”
[10]
Rule
47 does not prescribe a specific period within which an application
for security is to be brought.
[1]
The jurisprudence developed in respect of applications for security
under rule 47 serves as a useful guide in this regard. In
Magida
v Minister of Police
1987
(1) SA 1
(A) the Appellate Division held that normally an application
for the furnishing of security for costs should be brought against
a
peregrinus
before
litis
contestatio
.
[2]
The Supreme Court of Appeal held in
Exploitatie-
en Beleggingsmaatschappij Argonauten 11 BV and Another v Honig
2012
(1) SA 247
(SCA) that, as a general rule, a party is expected to
apply expeditiously for security under rule 47.
[3]
[11]
The
language employed in rule 47(1) is peremptory. That is clear from the
use of the word “shall”. Thus, the contemplated
notice
must be delivered as soon as practicable after the commencement of
proceedings. In
Agro
Dip (Pty) Ltd v Fedgen Insurance Co Ltd
1998 (1) SA 182
(W) it was submitted on behalf of the plaintiff that
there were special circumstances in the light of which the plaintiff
should
not be ordered to furnish security.
[4]
One of the alleged special circumstances
[5]
was the bringing of the application for security at a late stage of
the proceedings.
[6]
It was held
that –
“
[t]he
failure of an applicant to bring an application for security as soon
as practicable after commencement of proceedings may
… in
appropriate circumstances constitute a special circumstance in the
light of which a court may refuse to exercise its
discretion to
require security …”
[7]
[12]
It is clear from the
dicta
in the
Magida
,
Honig
and
Agro Dip
cases that the failure of an applicant to bring an application for
security as soon as practicable after the commencement of proceedings
is a relevant feature that is to be considered by a court when
exercising its judicial discretion in deciding an application for
security under rule 47. The presence of this feature is, however, not
to be regarded as a special circumstance that justifies a
decision
not to order security. The Supreme Court of Appeal held as follows in
Shepstone & Wylie and Others v
Geyser NO
1998 (3) SA 1036
(SCA):
“
The
reason why Hugo J refused to grant an order appear at 364B–E of
his judgment. A convenient starting point for discussion
is the
reference towards the end of the passage to ‘special
circumstances that justify a decision not to order security’.
The learned Judge probably had in mind a line of cases commencing
with
Fraser v Lampert NO
(
supra
)
in which a Full Court of the Transvaal held that
‘
a
defendant or respondent should not be deprived of this benefit unless
special circumstances exist’
(
per
Malan J at
115B).
(See, for example, also
Trust Bank van Afrika Bpk v Lief and Another
1963 (4) SA 752
(T) at 754H
ad fin
;
Cometal-Mometal SARL v Corliana
Enterprises (Pty) Ltd
1981 (4) SA 662
(W) at 663F–G).
In
my judgment, this is not how an application for security should be
approached. Because a Court should not fetter its own discretion
in
any manner and particularly not by adopting an approach which brooks
of no departure except in special circumstances, it must
decide each
case upon a consideration of all the relevant features, without
adopting a predisposition either in favour of or against
granting
security. (Compare
Lappeman
Diamond Cutting Works (Pty) Ltd v MIB Group (Pty) Ltd (No 1)
1997
(4) SA 908
(W) at 919G–H;
Wallace
NO v Rooibos Tea Control Board
1989
(1) SA 137
(C) at 144B–D.)”
[8]
[13]
The letter of demand was delivered on 4
August 2020, more than three weeks after the Defendant had served the
rescission application
on 10 July 2020. In addition, the Plaintiff
brought the security application after
litis
contestatio
in the rescission
application.
Litis contestatio
in
the rescission application occurred on 19 August 2020. The security
application was brought on 27 August 2020. The Plaintiff
admits in
his founding affidavit that he delayed bringing the security
application. That is why he applies for condonation. It
is therefore
not necessary for a finding that the Plaintiff did not bring the
security application as soon as practicable after
the commencement of
the rescission application.
[14]
The Plaintiff seeks condonation of his
delay bringing the security application. With reference to the letter
of demand, the Plaintiff
contends that his attorney demanded security
in writing in terms of rule 47(1) from the Defendant’s attorney
on 4 August
2020. I assume, without making a finding in this regard,
that the letter of demand constituted delivery by the Plaintiff of a
notice
as contemplated in rule 47(1). The founding affidavit reads as
follows in relevant part:
“
29.
[My attorney] initially received a response [to the letter of demand]
from the
[Defendant’s] attorney on 11 August 2020 that they
were seeking instructions in respect of the aspect of security from
the
[Defendant]. … As alluded to above, it was only on 18
August 2020 that I received the [Defendant’s] response refusing
security.
30.
Upon receipt of the [Defendant’s] refusal to provide security
[my
attorney] was immediately instructed to prepare this application.
31.
Furthermore, I am frequently travelling to and from George where my
family
lives and from where I operate a satellite office. It is
extremely difficult for me while travelling to provide my attorney of
record with instructions and to find a commissioner of oaths to sign
the founding affidavit.
32.
In light of the above, I submit that the delay in launching this
application
is not … unnecessarily lengthy and furthermore was
not wilful.
33.
I am advised that a delay in launching this application is not
necessarily
fatal, more so in light of there not being any prejudice
occasioned to the [Defendant].
34.
In light of the above, I respectfully seek condonation for the late
filing
of this application.”
[15]
The
Plaintiff does not indicate whether he applies for condonation under
rule 27 or if he is relying upon this court’s inherent
power to
regulate its own process. It is submitted by the author of
Erasmus
Superior Court Practice
that
rule 27 does not affect the inherent power of the High Court to
protect and regulate its own process.
[9]
This creates the impression that it would be competent for this court
to decide the condonation application under rule 27 or by
invoking
its inherent power to regulate its own process. However, a court may
exercise inherent jurisdiction to regulate its own
process only when
faced with inadequate procedures and rules in the sense that they do
not provide a mechanism to deal with a particular
scenario. In
Systems
Applications Consultants (Pty) Ltd t/a Securinfo v Systems
Applications Products AG and Others
[2020]
ZASCA 81
(2 July 2020) the appellant, with reference to rule 47,
argued that where there is a
lacuna
in
the rules of court, section 173 of the Constitution should be invoked
so as to ensure that proceedings are fair. The Supreme
Court of
Appeal held that –
“
[s]ection
173 recognises the
inherent power that superior courts have to regulate their own
processes. The Constitutional Court in
Molaudzi
v The State
[10]
stated as follows in relation to the application of s 173 of the
Constitution:
‘
... This inherent
power to regulate process, does not apply to substantive rights but
rather to adjectival or procedural rights.
A court may exercise
inherent jurisdiction to regulate its own process only when faced
with inadequate procedures and rules in
the sense that they do not
provide a mechanism to deal with a particular scenario. A court will,
in appropriate cases, be entitled
to fashion a remedy to enable it to
do justice between the parties. ...’
Although the foregoing
dicta
were expressed in a criminal law context, they are unquestionably
equally apposite in the context of civil proceedings, given
that
the Constitution, as the supreme law, applies to all areas of the
law.”
[11]
[16]
Rule 27 provides a mechanism with adequate
procedures to deal with the condonation application. There is no need
in the circumstances
of this case to invoke this court’s
inherent power to regulate its own process.
[17]
Rule 27 provides as follows in relevant
part:
“
(1)
In the absence of agreement between the parties, the court may upon
application
on notice and on good cause shown, make an order
extending or abridging any time prescribed by these Rules or by an
order of court
or fixed by an order extending or abridging any time
for doing any act or taking any step in connection with any
proceedings of
any nature whatsoever upon such terms as to it seems
meet.
(2)
Any such extension may be ordered although the application therefor
is not made until after expiry of the time prescribed or fixed, and
the court ordering any such extension may make such order as
to it
seems meet as to the recalling, varying or cancelling of the results
of the expiry of any time so prescribed or fixed, whether
such
results flow from the terms of any order or from these Rules.
(3)
The court may, on good cause shown, condone any non-compliance with
these Rules.”
[18]
The courts have consistently refrained from
framing an exhaustive definition of what would constitute “good
cause”.
The Appellate Division held in
Cairn’s
Executors v Gaarn
1912 AD 181
that –
“
[a]ny
attempt to do so would merely hamper the exercise of a discretion
which the rules have purposely made very extensive, and
which it is
highly desirable not to abridge.”
[12]
[19]
In
Silber v
Ozen Wholesalers (Pty) Ltd
1954 (2) SA
345
(A) the Appellate Division held as follows with reference to the
case of
Cairn’s Executors
:
“
The
meaning of ‘good cause’ in the present sub-rule, like
that of the practically synonymous expression ‘sufficient
cause’ which was considered by this Court in
Cairn’s
Executors v. Gaarn
,
1912 A.D. 181
, should not lightly be made the subject of further
definition. For to do so may inconveniently interfere with the
application of
the provision to cases not at present in
contemplation. There are many decisions in which the same or similar
expressions have
been applied in the granting or refusal of different
kinds of procedural relief. It is enough for present purposes to say
that
the defendant must at least furnish an explanation of his
default sufficiently full to enable the Court to understand how it
really
came about, and to assess his conduct and motives.”
[13]
[20]
Evander
Caterers (Pty) Ltd v Potgieter
1970
(3) SA 312
(T) was an appeal against the judgment of a magistrate
refusing to extend the period within which the defendant may have
applied
for the rescission of a default judgment obtained against him
by the plaintiff.
[14]
The
court referred to the judgment in
Silber
and
held that –
“
[g]ood
cause has actually to be proved as opposed to being alleged, such
good cause including, but not being limited to, …
that a
defendant must at least furnish an explanation of his default
sufficiently full to enable the court to understand how it
really
came about and to assess his conduct and motives”.
[15]
[21]
The
dictum
in
the
Silber
case
was more recently referred to in this Division in
Buckle
v Kotze
2000
(1) SA 453
(W), which was an appeal against the order of a magistrate
in an application for rescission of judgment:
[16]
“
In
order to satisfy the requirement of good cause ‘the defendant
must at least furnish an explanation of his default sufficiently
full
to enable the court to understand how it really came about and to
assess his conduct and motives’”.
[17]
[22]
A further requirement for “good
cause” was described in
Nedcor
Investment Bank Ltd v Visser NO and Others
2002
(4) SA 588
(T):
“
The
plaintiff is seeking an indulgence to condone its lack of compliance
with the time period of ten days stipulated in Rule 28(4).
Rule 27(3)
requires ‘good cause’ to be shown by the plaintiff. This
gives the Court wide discretion. (
Du
Plooy v Anwes Motors (Edms) Bpk
1983
(4) SA 212
(O) at 216H–217A.) The requirements are, first, that
the plaintiff should at least tender an explanation for its default
to enable the Court to understand how it occurred. (
Silber
v Ozen Wholesalers (Pty) Ltd
1954
(2) SA 345
(A) at 353A.) Secondly, it is for the plaintiff to satisfy
the Court that its explanation is
bona
fide
and
not patently unfounded.”
[18]
[23]
The
Constitutional Court considered an application for condonation of the
late filing of an application for leave to appeal
[19]
in
Van
Wyk v Unitas Hospital and Another (Open Democratic Advice Centre as
Amicus Curiae)
[2007] ZACC 24
;
2008 (2) SA 472
(CC). The court held as follows in respect of the
explanation that must be given by an applicant for condonation:
“
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.”
[20]
[24]
The
requirements that must be met by an applicant in an application for
condonation under rule 27 were considered in
Ford
v Groenewald
1977 (4) SA 224
(T). The Court held as follows:
[21]
“
Under
rule 27 a court may lift a bar where an applicant shows good cause.
Our Courts have refused to lay down an all-encompassing
definition of
what would constitute ‘good cause’. (
Silber
v.
Ozen
Wholesalers
(
Pty.
)
Ltd.
,
1954
(2) S.A. 345
(A.D.) at p. 352-3;
Saraiva
Construction
(
Pty.
)
Ltd.
v.
Zululand Electrical and Engineering
Wholesalers
(
Pty.
)
Ltd.
,
1975
(1) S.A. 612
(D) at p. 614.) Further, as remarked by Steyn, J. in
Van
Aswegen
v.
Kruger
,
1974 (3) S.A. 204
(O) at p. 205, where the Court must exercise a
discretion it is neither appropriate nor wise to lay down strict and
rigid requirements
that must be complied with and that would
unnecessarily limit the Court’s discretion to lift a bar. It
does, however, seem
from the authorities (and I again rely on the
last mentioned judgment) that two main requirements exist that must
be complied with
in this type of application. First, an applicant
that applies to a Court for such an indulgence must provide a
reasonable explanation
under oath for his non-compliance with the
Court Rules. Second, the applicant’s affidavit must show that
he has a
bona fide
defence
in the action. As far as the first requirement is concerned, an
explanation must be furnished that is sufficiently full
to enable the
Court to understand how the default really came about, and to assess
the applicant’s conduct and motives. (
Silber
v.
Ozen
Wholesalers
(
Pty.
)
Ltd.
,
supra
.) As
far as the second requirement is concerned, … it is expected
of an applicant for the lifting of a bar that he should
set out facts
or make allegations that, if proved, would constitute a defence.
(
Textile House
(
Pty.
)
Ltd.
v.
Silvestri
,
1960 (4) S.A. 800
(W);
Dalhouzie
v.
Bruwer
,
1970 (4) S.A. 566
(C) at p. 572-575;
Broadley
,
N.O.
v.
Stevenson
,
1973 (1) S.A. 585
(R);
Van Aswegen
v.
Kruger
,
supra
.)
That defence does not, however, have to be set out in detail in the
supporting affidavit; it would be sufficient to set it out
briefly.
In my opinion, the following principles as laid down by Colman, J. in
Breytenbach
v.
Fiat S.A.
(
Pty.
)
Ltd.
,
1976
(2) S.A. 226
(T), regarding what must be proved by a defendant
against whom an application for summary judgment is brought, are also
applicable
in this matter:
‘
It
will suffice, it seems to me, if the defendant swears to a defence,
valid in law, in a manner which is not inherently and seriously
unconvincing . . . (T)he statement of material facts (must) be
sufficiently full to persuade the Court that what the defendant
has
alleged, if it is proved at the trial, will constitute a defence to
the plaintiff’s claim . . . (I)f the defence is averred
in a
manner which appears in all the circumstances to be needlessly bald,
vague or sketchy, that will constitute material for the
Court to
consider in relation to the requirement of
bona
fides
. . . All that is required is
that the defendant’s defence be not set out so baldly, vaguely
or laconically that the Court,
with due regard to all the
circumstances, receives the impression that the defendant has, or may
have, dishonestly sought to avoid
the dangers inherent in the
presentation of a fuller or clearer version of the defence which he
claims to have.’
(At p. 228-229.) In
Broadley
,
N.O.
v.
Stevenson
,
supra
,
Davies, J. (at p. 587) stated the position regarding the Rhodesian
Rule on the lifting of a bar, which rule requires ‘an
affidavit
of merits and other sufficient grounds’, as follows:
‘
(W)hat
is required is that the defendant should set out briefly his defence
and the facts on which he relies for that defence, so
that the Court
can form some opinion of its merits. In my view, it is not sufficient
for a defendant to state simply what his defence
is; he must also set
out briefly the facts on which he relies for his defence. It is
obviously unnecessary for him to go into the
matter in detail. As was
pointed out by Young, J., in
Gordon
’s
case,
supra
,
it is open to the plaintiff to dispute the fact alleged, in which
event it may be necessary for the defendant, in a replying affidavit,
to deal in more detail with his allegations of fact.’
”
[22]
[25]
In
Marais
v Aldridge and Others
1976
(1) SA 746
(T) the court, with reference to
The
Master v Zick
1958
(2) SA 539
(T), held that there was no prejudice to the applicant by
virtue of the non-compliance with the relevant rule.
[23]
In
Zick
’s
case, the court held as follows:
“
The
present case is, in my opinion, one where the
dictum
in
Foster
v.
Carlis
and Houthakker
,
1924 T.P.D. 247
at p.
252, is properly applicable:
‘
.
. . the Court is entitled to overlook in proper cases an irregularity
in procedure which does not work any substantial prejudice
to the
other party.’
”
[24]
[26]
Condonation of the non-compliance with the
rules of this court is not a mere formality. This principle was
stated in the following
terms in
Chasen
v Ritter
1992 (4) SA 323
(SE):
“
There
is, of course, always the safeguard that the applicant must show good
cause, because condonation is not automatic but in the
discretion of
the Court.”
[25]
[27]
The following guiding principles can be
distilled from the judgments quoted above in respect of applications
under rule 27 for condonation
of non-compliance with the rules of
this court:
[a]
The court has a discretion in considering applications for
condonation.
[b]
Condonation of the non-compliance with a rule is not a mere
formality.
[c]
The applicant must show good cause. Good cause has been held to
entail five requirements:
[i]
The applicant must furnish an explanation of the default sufficiently
full to
enable the court to understand how it really came about, and
to assess the applicant’s conduct and motives.
[ii]
The applicant must satisfy the court that the explanation of the
default is
reasonable,
bona fide
and not patently unfounded.
[iii]
The applicant’s explanation of the default must cover the
entire period of
the delay.
[iv]
The applicant’s claim or defence, as the case may be, and the
facts upon which the
applicant relies for such claim or defence must
be set out briefly, yet sufficiently full to persuade the Court that
what is alleged,
if proved, will constitute a well-founded claim or
bona fide
defence.
[v]
The court is entitled to overlook, in proper cases, non-compliance
with its rules
which does not work any substantial prejudice to the
other party.
[28]
When the Plaintiff’s evidence is
analysed, the explanation he furnishes of his delay bringing the
security application is
vague, superficial and unconvincing. He
states that his attorney only received the Defendant’s response
refusing security
on 18 August 2020. He adds that his travelling to
and from George made it extremely difficult for him to provide his
attorney with
instructions and to find a commissioner of oaths to
sign the founding affidavit. These bald and vague statements do not
furnish
an explanation of the Plaintiff’s delay that is
sufficiently full to enable this court to understand how it really
came about,
and to assess the Plaintiff’s conduct and motives.
[29]
In pointing out that his attorney only
received the Defendant’s response refusing security on 18
August 2020, the Plaintiff
does not mention his delay in delivering
the letter of demand. There was a delay of more than three weeks
between the service of
the rescission application on 10 July 2020 and
the delivery of the letter of demand on 4 August 2020. The only
explanation furnished
of that delay is that the Plaintiff’s
travelling to and from George made it extremely difficult for him to
provide his attorney
with instructions and to find a commissioner of
oaths to sign the founding affidavit.
[30]
The Plaintiff does not explain why his
travelling to and from George allegedly made it extremely difficult
for him to provide his
attorney with instructions. The Plaintiff
furnishes no explanation of when, during the period relevant to the
bringing of the security
application, he was in George and when he
was elsewhere. No explanation is furnished by the Plaintiff as to why
he could not, for
example, provide instructions to his attorney
telephonically, by email or in a virtual meeting.
[31]
The Plaintiff also does not explain why his
travelling to and from George allegedly made it extremely difficult
for him to find
a commissioner of oaths to sign the founding
affidavit. No reasons are furnished for the Plaintiff’s alleged
difficulty.
The Plaintiff furnishes no explanation of any attempts he
might have made to find a commissioner of oaths, either in George or
anywhere else, and why such attempts were unsuccessful.
[32]
The Plaintiff has not taken this court into
his confidence regarding his allegations that his travelling to and
from George made
it extremely difficult for him to provide his
attorney with instructions and to find a commissioner of oaths to
sign the founding
affidavit. This makes it impossible for this court
to understand how the Plaintiff’s default really came about,
and to assess
the Plaintiff’s conduct and motives. This court
is left with the impression that the Plaintiff has dishonestly sought
to
avoid the dangers inherent in the presentation of a fuller or
clearer version of his allegations.
[33]
The Defendant served the rescission
application on 10 July 2020 and the Plaintiff filed his answering
affidavit in that application
on 11 August 2020. When these facts are
considered carefully, it raises questions about the reasonableness
and
bona fides
of
the Plaintiff’s explanation that his travelling to and from
George made it extremely difficult for him to provide his attorney
with instructions and to find a commissioner of oaths to sign the
founding affidavit. Taking into account what is set out below,
the
Plaintiff has failed to prove that his explanation has any basis in
fact. To that extent, I am not satisfied that the Plaintiff’s
explanation is reasonable,
bona fide
and
not patently unfounded.
[34]
The Plaintiff’s answering affidavit
in the rescission application is an elaborate document. In it, the
Plaintiff raises two
points
in limine
and deals with the history of the matter in twelve paragraphs. He
also provides comprehensive
ad seriatim
answers to the allegations contained in
the Defendant’s founding affidavit in the rescission
application. These answers include
detailed allegations under
separate headings, namely “Willful Default & Lack of
Bona
Fides
”, “No Reasonable
Explanation for the Default”, “No
Bona
Fide
Defence” and “The
Common Law”.
[35]
The first point
in
limine
raised by the Plaintiff in his
answering affidavit in the rescission application is that that
application should be dismissed on
the basis that the Defendant’s
founding affidavit was not sufficiently authenticated as contemplated
in rule 63. The second
point
in limine
is that the rescission application
should be dismissed because it was not brought within twenty days
after the Defendant had obtained
knowledge of the judgment granted
against him as contemplated in rule 31(2)(
b
).
The Plaintiff states at the outset of his answering affidavit in the
rescission application that, where he makes submissions
of law, he
does so on the advice of his legal representatives. This statement,
in conjunction with the specific references to rules
31(2)(
b
)
and 63, prove that the Plaintiff probably consulted his legal
representatives, including his attorney, for purposes of raising
the
two points
in limine
in
his answering affidavit in the rescission application. As stated,
that affidavit was filed on 11 August 2020. Thus, it would
have been
drafted between the service of the rescission application on 10 July
2020 and 11 August 2020. This leads to the conclusion
on a balance of
probabilities that the Plaintiff, contrary to what he states, was
able to give instructions to his attorney without
difficulty during
the period relevant to the bringing of the security application.
[36]
It seems improbable that the Plaintiff
would have arranged allegations in his answering affidavit in the
rescission application
under headings such as “Willful Default
& Lack of
Bona Fides
”,
“No Reasonable Explanation for the Default”, “No
Bona Fide
Defence”
and “The Common Law” without having consulted his legal
representatives, including his attorney. This
fortifies the
conclusion that the Plaintiff, on a balance of probabilities, was
able to give instructions to his attorney without
difficulty during
the period relevant to the bringing of the security application. Upon
considering the probabilities as they emerge
from the above analysis
of the evidence, the Plaintiff has failed to satisfy this court that
the explanation of his delay bringing
the security application is
reasonable,
bona fide
and not patently unfounded.
[37]
The Plaintiff sets out his claim for
security in the notice of motion and his founding affidavit. He also
sets out the facts upon
which he relies in his claim for security
sufficiently full to persuade this Court that what is alleged, if
proved, would constitute
a well-founded claim. The Plaintiff’s
good prospects of success, however, are not sufficient to show good
cause. It is apposite
to apply the weighting principle laid down by
the Appellate Division in considering an application for condonation
of non-compliance
with one of its rules in
United
Plant Hire (Pty) Ltd v Hills and Others
1976 (1) SA 717
(A):
“
These
factors are not individually decisive but are interrelated and must
be weighed one against the other; thus a slight delay
and a good
explanation may help to compensate for prospects of success which are
not strong.”
[26]
[38]
Applying
the weighting principle, this court may not consider any of the
requirements for good cause, set out above, in isolation
in deciding
an application under rule 27 for condonation of non-compliance with
its rules. The Plaintiff’s prospects of success
in the security
application is but one of the factors relevant to the exercise of the
court’s discretion. Those factors include
whether or not the
Plaintiff has furnished a sufficiently full explanation of his delay
bringing the security application. The
Plaintiff has not. In
addition, the Plaintiff has failed to satisfy this court that the
explanation of his delay bringing the security
application is
reasonable,
bona
fide
and not patently unfounded. In
United
Plant Hire
’s
case the court stated, as an example of the application of the
weighting principle, that a slight delay and a good explanation
may
help to compensate for prospects of success which are not strong.
[27]
It seems to me, along similar lines, that the Plaintiff’s
failure to furnish a sufficiently full explanation of his default
in
conjunction with his failure to satisfy this court that his
explanation is reasonable,
bona
fide
and not patently unfounded, militate against condonation on the basis
of the Plaintiff’s good prospects of success.
[39]
The
Plaintiff states that his delay bringing the security application is
not fatal because it has not resulted in prejudice to the
Defendant.
As held in
Foster
’s
case, this court is entitled to overlook, in proper cases,
non-compliance with its rules which does not work any substantial
prejudice to the other party.
[28]
The Defendant denies the Plaintiff’s allegation that the delay
bringing the security application did not work any prejudice
to the
Defendant. The Defendant does not, however, allege any prejudice
suffered by him. I am satisfied that the Plaintiff’s
delay
bringing the security application has not worked any substantial
prejudice to the Defendant. Yet, the question remains whether
this is
a proper case to overlook the Plaintiff’s non-compliance on the
basis that it does not work any substantial prejudice
to the
Defendant. The weighting principle should also be applied to
determine this question. As with his good prospects of success,
it
seems to me that the Plaintiff’s failure to furnish a
sufficiently full explanation of his default in conjunction with
his
failure to satisfy this court that his explanation is reasonable,
bona
fide
and not patently unfounded, militate against condonation on the basis
of the delay not having worked substantial prejudice to the
Defendant.
[40]
Does a combination of the Plaintiff’s
good prospects of success and the absence of substantial prejudice to
the Defendant
compensate for the Plaintiff’s failure to furnish
a sufficiently full explanation of his default and the Plaintiff’s
failure to satisfy this court that his explanation is reasonable,
bona fide
and not patently unfounded? In my view, they do not in the
circumstances of this case. This court places a high premium on the
honesty of litigants. It is also important to this court that
litigants should take the court into their confidence. The Plaintiff
has failed in both these respects. With regard to the Plaintiff’s
honesty, this court cannot, in the exercise of its discretion,
disregard its impression that the Plaintiff has dishonestly sought to
avoid the dangers inherent in the presentation of a fuller
or clearer
version of his allegations. The Plaintiff has also failed to satisfy
this court that the explanation of his delay bringing
the security
application is reasonable,
bona fide
and not patently unfounded. As far as the Plaintiff’s failure
to take this court into his confidence is concerned, the exercise
of
this court’s discretion is influenced negatively by the
Plaintiff’s furnishing of an insufficient explanation of
his
delay bringing the security application. Therefore, in applying the
weighting principle in the exercise of this court’s
discretion,
the Plaintiff’s good prospects of success and the absence of
substantial prejudice to the Defendant do not compensate
for the
Plaintiff’s failure to furnish a sufficiently full explanation
of his default and the Plaintiff’s failure to
satisfy this
court that his explanation is reasonable,
bona
fide
and not patently unfounded.
[41]
Counsel for the Plaintiff argued that there
had not been an inordinate delay by the Plaintiff. Rule 27 requires
an applicant for
condonation to show good cause. The Plaintiff has
failed to show good cause, which includes his failure to furnish a
sufficiently
full explanation of his delay bringing the security
application. Applying the weighting principle, I find that the
Plaintiff’s
failure to furnish a sufficiently full explanation
of his delay bringing the security application militates against
condonation
on the basis that there had not been an inordinate delay.
In any event, I am not convinced that the delay of more than three
weeks
between the service of the rescission application on 10 July
2020 and the delivery of the letter of demand on 4 August 2020 was
not inordinate. The Plaintiff knew that the Defendant is a
peregrinus
as long ago as January 2020 when he was
granted leave to sue the Defendant by edictal citation. In addition,
the Defendant’s
status as a
peregrinus
is clear from the first paragraph of
his founding affidavit in the rescission application. This means that
the Plaintiff was in
a position to deliver a notice contemplated in
rule 47(1) immediately after the commencement of proceedings in the
rescission application.
In the absence of a sufficiently full
explanation of his delay by the Plaintiff, this delay of more than
three weeks is, in the
view I take of the circumstances of this
matter, inordinate.
[42]
I was referred by counsel for the Plaintiff
to the judgment in
Francis & Graham
Ltd v East African Disposal Co Ltd
1950
(3) SA 502
(N). It was argued on behalf of the Plaintiff that the
delay should not operate as a bar to this application. The matter of
Francis & Graham
was
decided under a previous rule that governed the provision of security
for costs, namely Order XIV, Rule 1 of the Natal Rules
of Court. That
rule, in terms similar to rule 47(1), provided for the service of a
notice “as soon as practicable after the
commencement of
proceedings”. The court held,
inter
alia
, as follows:
“
In
the case of
The British America
Assurance Co v Moretti
(1)
(1936,
C.P.D. 497)
CENTLIVRES, J., considered a contention that because a
long time had elapsed since the defendant could have made an
application
for security for costs, he was therefore out of Court. He
said:
‘
In
the case of
Lagesen
v Electric Lamps Regenerators Limited
(1914,
W.L.D. 76)
it
was laid down that although it is desirable that an application by a
defendant for security as to costs should be made promptly,
promptness is not essential. In that matter Mr. Justice CURLEWIS
dealt with the case of
Oaten
v Bentwich and Lichtenstein
, which
had been decided by Mr. Justice MASON, and which suggested that,
unless a defendant asked the Court promptly for an
order for security
as to costs, the Court should not grant such an order. Mr.
Justice CURLEWIS said this: ‘Though there
is much to be said
for the suggestion that a defendant must demand security for his
costs promptly, I am not disposed to hold that
because the applicant
did not demand security for his claim in reconvention at the same
time as he demanded security for his costs,
he is thereby debarred
from making the present application. If the applicant has a
right to demand security for his claim
in reconvention, I do not see
how a delay on his part can deprive him of his right, unless the
circumstances are such that the
Court comes to the conclusion that he
has waived that right.’ That principle seems to be applicable
to a case like this one
where the defendant asks for security when he
is sued by a person who he alleges to be a
peregrinus
.’
With
respect, I agree with this reasoning, for it seems to me that to
insist in every case upon immediate demand for security for
costs,
and to regard delay as necessarily fatal, regardless of whether or
not the circumstances indicate a waiver by the applicant,
or give
rise to an estoppel against him, is to erect a supposed rule of
practice into an empty fetish divorced from the realities
of the
situation and from principle. Nor does it seem to me that Order
XIV, Rule 1 of the Rules of this Court, when properly
construed,
sanctions any such practice. It may be, I would suppose, that a
waiver is possibly to be spelled out of delay in
demanding security,
or that circumstances give rise to an estoppel. But nothing like
this is shown to exist here …”
[29]
[43]
Besides
the obvious observation that the case of
Francis
& Graham
was
decided before rule 47 came into effect, it also predates the cases
of
Magida
and
Honig
.
As set out above, it was held in the latter cases that normally an
application for the furnishing of security for costs should
be
brought against a
peregrinus
before
litis
contestatio
[30]
and, as a general rule, a party is expected to apply expeditiously
for security under rule 47.
[31]
[44]
It is clear from the judgment in
Francis
& Graham
and the cases referred to
there that circumstances could arise in which delay to demand
security or to apply for it could cause
a court to refuse granting an
order for security. This is in line with the purpose of an
application for condonation under rule
27. A court considers whether
good cause has been shown to justify an order condoning
non-compliance with rule 47. If good cause
is not shown, the court
may refuse to grant condonation. If condonation is not granted, the
court may also refuse granting an order
for security.
[45]
Delay in demanding or applying for security
is not necessarily fatal regardless of the circumstances. Rule 27(3)
provides that a
court may, on good cause shown, condone any
non-compliance with its rules. If the applicant shows good cause, the
court may grant
condonation for non-compliance with its rules. The
delay in demanding or applying for security will then not be fatal to
the application
for security. Accordingly, by insisting on the
Plaintiff showing good cause for his delay bringing the security
application, this
court is not, to use the words of Selke J in
Francis & Graham
’s
case, erecting “a supposed rule of practice into an empty
fetish divorced from the realities of the situation and
from
principle”.
[46]
The Plaintiff has failed to show good cause
as contemplated in rule 27. The Plaintiff has failed to furnish an
explanation of his
delay bringing the security application that is
sufficiently full to enable this court to understand how it really
came about,
and to assess the Plaintiff’s conduct and motives.
The Plaintiff has also failed to satisfy this court that his
explanation
is reasonable,
bona fide
and
not patently unfounded. In exercising my discretion, I have had due
regard to all the factors mentioned in this judgment. Applying
the
weighting principle, I have come to the conclusion that, in all the
circumstances, the condonation application should not succeed.
[47]
With reference to the
dicta
in the cases of
Magida
,
Shepstone & Wylie
and
Honig
,
the failure of an applicant to bring an application for security as
soon as practicable after the commencement of proceedings
is but one
of the factors relevant to the exercise of a court’s judicial
discretion in deciding an application for security
under rule 47. In
light of this it might be argued that, despite dismissing the
condonation application, this court ought to consider
the merits of
the security application. Without making a finding as to whether or
not it is necessary for this court to consider
the merits of the
security application despite dismissing the condonation application,
I now deal with the merits of the security
application.
[48]
In the case of
Magida
,
the Appellate Division set out the preferred approach to an
application for security:
“
[I]t
must be left to the judicial discretion of the Court by having due
regard to the particular circumstances of the case as well
as
considerations of equity and fairness to both the
incola
and
the
peregrinus
to
decide whether the latter should be compelled to furnish, or be
absolved from furnishing, security for costs.”
[32]
[49]
The same approach was adopted by the
Supreme Court of Appeal in the case of
Shepstone
& Wylie
:
“
Because
a Court should not fetter its own discretion in any manner and
particularly not by adopting an approach which brooks of
no departure
except in special circumstances, it must decide each case upon a
consideration of all the relevant features, without
adopting a
predisposition either in favour of or against granting security.
(Compare
Lappeman
Diamond Cutting Works (Pty) Ltd v MIB Group (Pty) Ltd (No 1)
1997
(4) SA 908
(W) at 919G–H;
Wallace
NO v Rooibos Tea Control Board
1989
(1) SA 137
(C) at 144B–D.)”
[33]
[50]
It is clear from the
dicta
in the cases of
Magida
and
Shepstone
& Wylie
that this court has a
judicial discretion to decide whether a
peregrinus
should be compelled to furnish, or be
absolved from furnishing, security for costs. This court must
exercise its judicial discretion
by having due regard to the
particular circumstances of each case as well as considerations of
equity and fairness to both the
incola
and the
peregrinus
.
[51]
The
Plaintiff has good prospects of success in the security application.
Those prospects must be considered against the backdrop
of the
Plaintiff’s delay in bringing the security application. It was
only brought after
litis
contestatio
in
the rescission application. The
dicta
in
the cases of
Magida
and
Honig
stand
firm that normally an application for the furnishing of security for
costs should be brought against a
peregrinus
before
litis
contestatio
[34]
and, as a general rule, a party is expected to apply expeditiously
for security under rule 47.
[35]
The question is whether the Plaintiff has made out a case for this
court to deviate from the norm and general rule expressed in
Magida
’s
and
Honig
’s
cases.
[52]
In deciding this question, this court has
regard thereto that the Plaintiff has good prospects of success in
the security application
and that his delay in bringing that
application did not work substantial prejudice to the Defendant. This
court also has regard
to the Plaintiff’s failure to furnish an
explanation of his delay bringing the security application that is
sufficiently
full to enable this court to understand how it really
came about, and to assess the Plaintiff’s conduct and motives.
A further
factor this court takes in consideration is the Plaintiff’s
failure to satisfy this court that his explanation is reasonable,
bona fide
and
not patently unfounded.
[53]
In
exercising my judicial discretion to decide whether the Defendant
should be compelled to furnish, or be absolved from furnishing,
security for costs, I have had due regard to the particular
circumstances of this case as set out in this judgment. I have come
to the conclusion that, in all the circumstances, the security
application should not succeed. This conclusion is supported by
my
consideration of equity and fairness in this case. It may be argued
that the Plaintiff will suffer injustice if no security
is ordered
and he is ultimately unable to recover his costs from the Defendant
in the event of the latter being unsuccessful in
the litigation
between the parties.
[36]
Compelling as this argument might seem, it is not persuasive. The
Plaintiff was the author of his own misfortune when he failed
to
furnish a sufficiently full explanation of his delay bringing the
security application and failed to satisfy this court that
his
explanation is reasonable,
bona
fide
and
not patently unfounded.
[54]
In the result the following order is made:
1.
The condonation application is dismissed.
2.
The security application is dismissed.
3.
The Plaintiff is to pay the Defendant’s
costs.
This
judgment is handed down electronically by uploading it on CaseLines.
_______________________
L.J. du Bruyn
Acting Judge of the High
Court of South Africa
Gauteng
Local Division, Johannesburg
Date heard:
11 February 2021
Judgment
delivered:
13 April 2021
For the Applicant /
Plaintiff:
C. Gibson
briefed
by Joshua Apfel Attorneys
For the Respondent /
Defendant: J. Moorcroft (Attorney)
of
Burger Huyser Attorneys
[1]
South
African Iron and Steel Corporation Ltd v Abdulnabi
1989
(2) SA 224
(T) at 236D.
[2]
Magida
v Minister of Police
1987
(1) SA 1
(A) at 13J to 14A.
[3]
Exploitatie-
en Beleggingsmaatschappij Argonauten 11 BV and Another v Honig
2012
(1) SA 247
(SCA) at paragraph [14].
[4]
Agro
Dip (Pty) Ltd v Fedgen Insurance Co Ltd
1998 (1) SA 182
(W) at 186G.
[5]
Agro
Dip supra
at
187C.
[6]
Agro
Dip supra
at
189E.
[7]
Agro
Dip supra
at
189H–I.
[8]
Shepstone
& Wylie and Others v Geyser NO
1998
(3) SA 1036
(SCA) at 1045G–1046A.
[9]
D.E.
van Loggerenberg.
Erasmus
Superior Court Practice
.
Second edition. Volume 1, A1–49 (service issue 13, 2020).
[10]
Molaudzi
v The State
[2015]
ZACC 20
;
2015 (2) SACR 341
(CC) at paragraph
[33]
.
[11]
Systems
Applications Consultants (Pty) Ltd t/a Securinfo v Systems
Applications Products AG and Others
[2020]
ZASCA 81
(2 July 2020) at paragraph [21].
[12]
Cairn’s
Executors v Gaarn
1912
AD 181
at 186.
[13]
Silber
v Ozen Wholesalers (Pty) Ltd
1954
(2) SA 345
(A) at 352H–353A.
[14]
Evander
Caterers (Pty) Ltd v Potgieter
1970
(3) SA 312
(T) at 312E–F.
[15]
Evander
Caterers supra
at
315D.
[16]
Buckle
v Kotze
2000
(1) SA 453
(W) at 455I–J.
[17]
Buckle
supra
at
457C.
[18]
Nedcor
Investment Bank Ltd v Visser NO and Others
2002
(4) SA 588
(T) at 591G–H.
[19]
Van
Wyk v Unitas Hospital and Another (Open Democratic Advice Centre as
Amicus Curiae)
[2007] ZACC 24
;
2008 (2) SA 472
(CC) at paragraph
[1]
.
[20]
Van
Wyk supra
at
paragraph [22].
[21]
I
translated the Afrikaans portions of the judgment.
[22]
Ford
v Groenewald
1977 (4) SA 224
(T) at 225E–226H.
[23]
Marais
v Aldridge and Others
1976
(1) SA 746
(T) at 752C.
[24]
Master
v Zick
1958
(2) SA 539
(T) at 543A.
[25]
Chasen
v Ritter
1992
(4) SA 323
(SE) at 329I.
[26]
United
Plant Hire (Pty) Ltd v Hills and Others
1976
(1) SA 717
(A) at 720G.
[27]
United
Plant Hire supra
at
720G.
[28]
Foster
v Carlis and Houthakker
1924
TPD 247
at 252.
[29]
Francis
& Graham Ltd v East African Disposal Co Ltd
1950
(3) SA 502
(N) at 505E–506A.
[30]
Magida
supra
at
13J to 14A.
[31]
Honig
supra
at
paragraph [14].
[32]
Magida
supra
at
14E.
[33]
Shepstone
& Wylie supra
at
1045G–1046A.
[34]
Magida
supra
at
13J to 14A.
[35]
Honig
supra
at
paragraph [14].
[36]
Shepstone
& Wylie supra
at
1046A–D.