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[2021] ZAGPPHC 307
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Leloko Hartbeespoort Dam v Peppermans (838/2013) [2021] ZAGPPHC 307 (3 May 2021)
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG
DIVISION PRETORIA
Case
Number: 838/2013
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
LELOKO
HARTBEESPOORT DAM
Applicant
/ Second Defendant
ASSOCIATION
AND
PHILLIP
PEPPERMANS
Respondent
/ Plaintiff
JUDGMENT
H
G A SNYMAN AJ
INTRODUCTION
[1]
This is an application by the applicant /
second defendant (“
Leloko
”)
against the respondent / plaintiff (“
Mr
Peppermans
”) in terms of rule 47
of the Uniform Rules of Court (“
the
rules
”) for security of costs. It
is common cause that Mr Peppermans is a
peregrinus
of this court in that he approximately a month before the action to
which this application is incidental was instituted, namely
on
25 December 2012, relocated to Australia. Mr Peppermans
owns no immovable property in the Republic of South Africa
(“
the
Republic
”).
[2]
I am not called upon to fix the amount for
any security to be put. According to the parties, in the event of
Leloko being successful,
this aspect would be referred to the
Registrar of this court for a determination.
BACKGROUND
[3]
On 31 December 2011 Mr Peppermans
accompanied by his two minor children, at the time respectively aged
5 and 7 years, attended a
New Year’s Eve party at Leloko Estate
Hartbeespoort dam (“
the estate
”).
On that occasion Mr Peppermans fell into a manhole on the
property and sustained injuries as a result thereof. Mr
Peppermans
instituted the action during January 2013 against Project Prop (Pty)
Ltd (“
Project Prop
”)
as first defendant. Project Prop is the developer of the estate.
Leloko, the homeowners association of the estate, was
cited as the
second defendant.
[4]
Mr Peppermans’ claim is for damages
in the amount of R1,235,000. The amount claimed constitutes alleged
damages suffered by
Mr Peppermans, made up of past hospital and
medical expenses, estimated future hospital and medical expenses,
past loss of
earnings, future loss of earnings and general damages.
[5]
Mr Peppermans’ cause of action
is based upon a duty of care as, according to Mr Peppermans, Leloko
and Project Prop negligently
failed to cover the open manhole and to
ensure that the manhole was fenced off. They also failed to issue a
warning to members
of the public of the danger posed by the open
manhole.
[6]
Pleadings closed prior to 10 October
2014. The issue of liability was separated from the remaining issues
and the trial in
respect of the liability was heard from 10 to 24
October 2014. On 24 November 2014, the trial court per Janse van
Nieuwenhuizen
J held that Project Prop and Leloko were liable to
compensate Mr Peppermans for 100% of his proven damages. This court
was provided
with a copy of the Janse van Nieuwenhuizen J judgment.
[7]
In terms of prayer 2 of the order, Leloko
and Project Prop were ordered to pay the costs of suit, which costs
included the costs
of a Mr Vallance and Dr Badenhorst as contemplated
in paragraph 2 of the “
tariff of
allowances payable to witnesses in a civil case
”
(GNR397 of April 2008 published in GG30953). Mr Vallance is a friend
of Mr Peppermans and he was an eyewitness and assisted
Mr Peppermans
at the time of the incident by for instance taking him to the
consulting rooms of Dr Badenhorst who attended to Mr
Peppermans’
injuries. On 25 February 2015 Leloko’s application for leave to
appeal against Janse van Nieuwenhuizen
J’s judgment and orders
was dismissed with costs.
[8]
Mr Peppermans has since been assessed by
medical experts who prepared medico-legal reports and an actuary who
prepared an actuarial
calculation, which reports and actuarial
calculation were served on Leloko’s attorney of record during
November and December
2016. Leloko has not yet delivered any expert
reports.
[9]
In December 2016 Mr Peppermans’
attorney of record made a proposal to Leloko on behalf of Mr
Peppermans in an endeavour to
settle the quantum of Mr Peppermans’
claim. The fact that there was a settlement initiative is disclosed
in the papers and
also cited by the parties’ counsel in their
joint practice note. Eventually, Leloko did not make any settlement
offer and
the initiative failed.
[10]
The parties each blame the other for the
fact that the quantum trial has not yet been set down for hearing.
[11]
According to Mr Peppermans his legal
representatives have been calling on Leloko’s legal
representatives since 24 August 2017
to attend a pre-trial
conference, but they have refused to do so. Leloko admits that it did
not assist Mr Peppermans in attempting
to arrange a pre-trial.
However, Leloko contends that it is premature to hold a pre-trial
conference as it has not yet filed its
expert reports.
[12]
On 19 September 2019, being in excess of
six years after the institution of the action and nearly five years
after the Janse van
Nieuwenhuizen J judgment, Leloko caused a notice
to be served upon Mr Peppermans in terms of rule 47(1) of the rules
calling upon
him to put up security for costs in the amount of
R400,000. This is on the basis that Mr Peppermans is a
peregrinus
of this court. Project Prop did not ask for security of costs. Mr
Peppermans refused and Leloko launched the present application
for
security of costs on 22 November 2019.
[13]
The case on behalf of Leloko is that Mr
Peppermans will not be able to pay the costs of the quantum trial
should it be decided in
favour of Leloko and Mr Peppermans be
ordered to pay the costs.
[14]
The deponent to Leloko’s founding and
replying affidavits is Mr Clifford Ashley Crutchfield (“
Mr
Crutchfield”
). Mr Crutchfield
only identifies himself as a director of Leloko and member of
Leloko’s management. No attempt is made to
qualify Mr
Crutchfield as an expert. Leloko’s case is that when the matter
proceeds it will be proceeding for a number of
days, as both parties
would be calling their experts to testify at the trial. Leloko
estimates in this regard that the trial will
last approximately four
to five days as Leloko intends to call at least two or three experts.
Mr Peppermans intends to call at
least four experts. It is stated in
the founding affidavit on behalf of Leloko that the quantum aspect of
the trail will be particularly
expensive as various experts will be
reserved to testify and will testify in accordance with the contents
of their expert reports.
[15]
According to Mr Crutchfield having regard
to the reports of Mr Peppermans’ experts it seems to him
that they disagree
on the extent of the loss suffered by
Mr Peppermans. He states that in view of the fact that
Mr Peppermans’ actuary
based her entire report on what he
refers to as assumptions, Mr Peppermans will not succeed in
proving the damages allegedly
suffered by him. Mr Crutchfield’s
statements are, however, not supported by any supporting affidavits
by experts suitably
qualified to express opinions like these. In
fact, it is apparent that Leloko has not even at this stage appointed
its own experts.
[16]
According to Leloko Mr Peppermans’
delay in applying for a trial date and in taking steps to bring the
matter to finalisation
is an indication that Mr Peppermans has
no case as regards the damages he claimed and knows it.
[17]
It is stated that the amount of R400,000
security claimed is reasonable in that the matter is a trial matter
in the High Court,
where damages are claimed. Various experts need to
prepare supplementary reports and will have to testify at the trial.
It is stated
that the pre-trial proceedings are also of importance,
in particular the fact that the request for further particulars for
trial
in respect of damages claimed will have to be settled and
served and the convening of a pre-trial and possibly more than one
pre-trial.
It is stated that Mr Peppermans is
dominus
litis
, but delayed the finalisation of
the claim for a considerable period of time.
[18]
Mr Peppermans opposes the application for
security for costs and the answering affidavit on his behalf was
deposed to by his attorney
on 16 January 2020. It was stated in the
answering affidavit that a confirmatory affidavit deposed to by
Mr Peppermans confirming
the content of the answering affidavit
in so far as it relates to him, would be served “
in
due course
”. Such a “
confirmatory
affidavit by Mr Peppermans
”
was served and filed three weeks later, i.e. on 6 February 2020. The
confirmatory affidavit was on the face of it deposed
to by
Mr Peppermans and signed on 23 January 2020 in Australia before
Ernest David Whitehorst, 19 Wexcombe Way, Aveley
WA6069, in his
capacity as a Commissioner of Oaths.
[19]
Mr Peppermans opposes the application on
the basis that although he is permanently residing in Australia, he
retained his business
in South Africa and earns an income from this
business. According to the answering affidavit, “
in
the unlikely event
” of
Mr Peppermans being directed to pay Leloko’s costs of suit
in the trial pertaining to the quantum of Mr Peppermans’
damages, Leloko is sufficiently safeguarded, in that it will be in a
position to recover the costs by attaching Mr Peppermans’
income stream from his business in South Africa. It is stated that Mr
Peppermans returns to South Africa every six months to check
on his
business. It appears from the answering affidavit that the business
is situated in Sandton and that Mr Peppermans employs
a manager who
conducts the business on his behalf. The manager is paid a percentage
of the earnings of the business.
[20]
It is also stated that since September
2013, Mr Peppermans has been the co-owner of a business in
Australia, which manufactures
cleaning products. It is pointed out in
the answering affidavit that according to the actuary, Ms Mary
Cartwright, Mary Cartwright
Consult CC, Mr Peppermans’ future
loss of earnings is R5,621,800. The costs of assistive devices
required by Mr Peppermans
is R16,300. It is stated that Leloko has no
prospects of obtaining a cost order against Mr Peppermans as part of
the quantum trial.
[21]
Reliance is also made on the fact that
Leloko did not seek any security for costs prior to the trial on the
merits despite the fact
that Mr Peppermans had by then relocated
to Australia. Moreover that in view of the lengthy delay of more than
seven years,
and Leloko’s failure to provide any explanation
for its failure to apply for security for costs as soon as possible
after
Mr Peppermans relocated to Australia, the application
should be dismissed with costs for this reason alone.
[22]
In Leloko’s replying affidavit, which
was served and filed on 22 June 2020, the point was raised that the
deponent to Mr Peppermans’
answering affidavit, i.e. his
attorney, cannot be seen to be a person who is in a position to
furnish anything but hearsay evidence.
The evidence tendered by her
is according to the replying affidavit not common cause, but remains
in dispute between the parties.
The content of the supplementary
affidavit was also criticised. It was stated that only Mr Peppermans
can depose to an affidavit,
regarding his damages, in addition to the
reports by his experts. Mr Peppermans’ confirmatory
affidavit is criticised
since it only refers to him confirming
“
same
”.
[23]
In the replying affidavit it is further
stated that Leloko only at a later stage, i.e. subsequent to 25
December 2012, ascertained
that Mr Peppermans immigrated to
Australia. However, no detail is given of exactly when this was found
out. The lapse of time
is left entirely unexplained.
[24]
On 22 February 2021, a day before this
application was heard, Mr Peppermans’ attorney of record filed
a supplementary affidavit.
Attached to this affidavit was a special
power of attorney. Mr Peppermans’ attorney stated that Mr
Peppermans signed the
power of attorney and that the signature as
appears from this power of attorney is the same signature as on his
confirmatory affidavit.
It was not explained why the supplementary
affidavit was only filed now.
STATUS OF THE ANSWERING
AFFIDAVIT
[25]
In terms of rule 63 of the rules, read with
the Justices of Peace and Commissioners of Oath Act, Act 16 of 1963,
certain procedures
have to be followed for the authentication of
documentation executed outside the Republic for use within the
Republic. This for
instance includes that rule 63(2)(a) of the rules
provides that any document executed in any place outside the Republic
shall be
deemed to be sufficiently authenticated for the purpose of
use in the Republic, if it is duly authenticated at such foreign
place
by the signature and seal of office of the head of the South
African diplomatic or consular mission, or a person in the
administration
or professional division of the public service serving
at a South African diplomatic consulate or trade office abroad. It is
common
cause that these procedures were not followed in this matter
in so far as Mr Peppermans’ confirmatory affidavit is
concerned.
[26]
It was argued by counsel for Leloko at the
commencement of the hearing that Mr Peppermans’ confirmatory
affidavit should therefore
not be admitted into evidence and that
what is stated in the answering affidavit, to the extent that it
relies on Mr Peppermans’
supplementary affidavit, should be
regarded as hearsay evidence.
[27]
It was argued by counsel on behalf of Mr
Peppermans, however, that in terms of rule 63(4) this Court may
accept as sufficiently
authenticated any document which is shown to
the satisfaction of this Court to have actually been signed by the
person purporting
to have signed the document. Reliance was in this
regard made on the supplementary affidavit by the attorney for Mr
Peppermans
confirming that the signature of Mr Peppermans on his
confirmatory affidavit was indeed that of Mr Peppermans. It was also
pointed
out by counsel for Mr Peppermans that Leloko relied as part
of its application on the medico-legal reports filed by Mr
Peppermans,
and has annexed those to the founding affidavit and has
not disputed the contents of those reports, and has not filed any
opposing
reports and any expert report of its own. The expert reports
confirm that Mr Peppermans has a business in the Republic and that
he
still conducts business in South Africa.
[28]
It was also argued by counsel on behalf of
Mr Peppermans that should I be inclined not to accept Mr Peppermans’
confirmatory
affidavit as sufficiently authenticated, this would lead
to an application for postponement in order to have the said
“
affidavit authenticated in terms
of the rules and that this will take some time
”.
It was submitted in this regard that due to the worldwide lockdown it
takes in excess of three months to obtain an appointment
at the South
African consulate in Australia. It was also submitted that the South
African consulate is quite far from where Mr
Peppermans resides.
Counsel for Mr Peppermans therefore asked me, in the exercise of my
discretion in terms of rule 63(4), to accept
that Mr Peppermans’
confirmatory affidavit is compliant and adequate.
[29]
Counsel on behalf of Leloko cautioned me in
reply that should I exercise my discretion to admit the confirmatory
affidavit of Mr
Peppermans at this stage, I must nevertheless bear in
mind the probative value of such evidence during the course of any
argument
submitted on the evidence thus confirmed.
[30]
I proceeded at the hearing to provisionally
allow the confirmatory affidavit of Mr Peppermans as duly
authenticated. As I see it,
based on the supplementary affidavit
filed by Mr Peppermans’ attorney, a case was made out that the
confirmatory affidavit
was indeed signed by Mr Peppermans.
[31]
In view of the caution I was called upon to
exercise by counsel on behalf of Leloko, I requested him to refer me
during the course
of his argument to the specific facts I ought to
regard as hearsay. Eventually, counsel for Mr Peppermans conceded
that the only
“
fact”
which qualified for this was the amount of income that Mr Peppermans’
business is earning in the Republic. The fact that
he had such a
business is common cause.
THE DELAY IN BRINGING THE
APPLICATION
[32]
Rule 47(1) of the rules provides than an
application for security of costs have to be brought “
as
soon as practicable after the commencement of proceedings
”.
There is no indication in the rule exactly what this means. It is
also not clear from the rule what fate awaits an applicant
who does
not bring such an application as soon as practicable after the
commencement of proceedings.
[33]
I have not
been referred to any authority, neither am I aware of any, where an
applicant for security like Leloko was the losing
party in the merits
part of the action, subsequently seeks security for cost for the
quantum part of the action. As I see it, however,
the mere fact that
Leloko was the losing party in the merits part of the action, does
not preclude it from bringing this application
for security.
[34]
In
Holfeld,
HR, (Africa) Ltd v Karl Walter & Co GmbH (2)
1987 (4) SA 861
(W)
at 867F
the court held that security of costs may only be sought and granted
by the Court under its inherent jurisdiction while a
lis
is
pending or after judgment while an appeal is pending, but not after
final judgment.
[35]
In the present
matter there is clearly still a
lis
pending between Leloko and Mr Peppermans and Leloko and the
application for security of costs is therefore competent. Moreover,
it follows in my view based on the above authority that an applicant
is not barred to institute such an application merely because
it did
not do so when the action was instituted. It can even do so at the
appeal stage and be successful, if a case for that is
made out.
[36]
In
the matter of
ICC
Car Importers (Pty) Ltd v A Hartrodt SA (Pty) Ltd
2004
(4) SA 607
(W)
,
a judgment of Marais J a case relied upon by both parties, it was
held that a
failure
to demand or apply for security at the early stages is not fatal, but
merely a factor to be taken into account in the exercise
of the
Court’s discretion. Counsel for Mr Peppermans pointed out that
in the
ICC
Car Importers
matter the court went on to hold that because the delay in that
matter was considerable, substantial trial costs had been run up
and
the application was heard on the day of the trial, the delay was so
substantial that security should not be ordered and the
application
was dismissed. She also invited my attention to the fact that the
judgment was then followed by the full bench decision
in the matter
of
B
& W Industrial Technology (Pty) Ltd v Baroutsos
[2005] ZAGPHC 93
;
2006 (5) SA 135
(W)
,
also a Witwatersrand decision where Marais J was one of the judges of
the full bench. In this matter the delay had been 25 months
and His
Lordship Mr Justice Goldblatt in the Court
a
quo
held that that was a substantial delay and took that fact into
account in determining to exercise his discretion against the
ordering
of security. On appeal the full bench refused to overturn
the court a quo’s judgment.
[37]
I will proceed to adjudicate this matter on
this basis, i.e. that delay does not present a bar against an
application for security
of costs being brought, but that I may take
it into account in exercising my discretion.
TEST TO BE APPLIED
[38]
In the matter of
Magida
v Minister of Police
1987
(1) SA 1
(A)
, also a judgment referred
to and relied upon by both parties in their respective heads of
argument and in argument, it was held
at
14C
to G
that:
“
Notwithstanding
the obsolescence of the
cautio
juratoria
as
security on oath we must bear in mind that our common law principles
which underlie its granting are still applicable in
our modern
practice when a
peregrinus
in
his answering affidavit deposes to his inability to furnish security
for costs owing to his impecuniosity, since it
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. Nor is there
any
justification for requiring the Court to exercise its discretion
in favour of a
peregrinus
only
sparingly. It follows that the following
dictum
in
Saker
& Co Ltd v Grainger
1937
AD 223
per
De
Wet JA at 227, viz: 'The principle underlying this practice is that
in proceedings initiated by a
peregrinus
the
Court is entitled to protect an
incola
to
the fullest extent,' should be read subject to the qualification that
it is only applicable
after
the
Court, in the exercise of its judicial discretion in accordance with
the principles hereinbefore stated, had come to the
conclusion that
the
peregrinus
should
not be absolved from furnishing security for costs.”
[39]
This court is accordingly afforded a wide
judicial discretion in considering whether or not an application for
security of costs
ought to be granted.
[40]
It is stated in this regard by the author
in
Van Loggerenberg,
Erasmus:
Superior Court Practice
Revision
Service 11, 2020 at D1-635
that:
“
The
factors which the court will consider in the exercise of its
discretion to determine an application for security for costs are
case-specific. No list of factors to be rigidly followed exists
indicating which factors weigh more heavily than others. Some
guidelines exist that may influence the court in the exercise of its
discretion. These include whether the plaintiff’s claim
is made
in good faith or whether it is
mala
fide
, whether it can be concluded that
plaintiff has a reasonable prospect of success and whether the
application for security was used
to stifle a genuine claim. A
respondent resisting an application for security for costs has to
provide documentation to support
allegations of impecuniosity, and a
failure to do so might lead to the inference that the allegations are
unfounded and that undisclosed
documentation might contradict them.”
THE EXERCISE OF THIS
COURT’S DISCRETION
[41]
It is common
cause that Mr Peppermans does have a business in South Africa and
that he has means to pay. The application is therefore
not opposed on
the basis that Mr Peppermans cannot afford to pay the security
sought. What is not common cause is what amount of
income Mr
Peppermans earns from this business in the Republic.
[42]
Counsel on behalf of Mr Peppermans
also submitted, with reference to the papers that I should take into
account that Mr Peppermans
owns an aircraft in the Republic and that
he owns immovable property in Perth. He is therefore not a man whose
address one does
not know, who one will not be able to locate. She
submitted that even if it may be more expensive to execute against
him in Australia,
one could execute against him in Australia at the
end of the day if necessary. I agree with this submission.
[43]
The fact that the Minister of Police
was able in the
Magida
matter to execute any costs order in the former Ciskei, was
inter
alia
taken into account by that Court
in not ordering Mr Magida to put up security for costs. Counsel for
Mr Peppermans argued that
the present situation can be distinguished
in that it is much more difficult to execute in Australia than it was
in those years
to execute in the Ciskei. In my view this is not a
valid argument. The fact remains that in the unlikely event of Leloko
obtaining
a cost order against Mr Peppermans, to use the words of Mr
Peppermans’ deponent, such an order is capable of being
executed
in Australia if needs be. That is if Leloko is not cable of
executing against the income stream of Mr Peppermans’ business
in the Republic.
[44]
In my view it
is not decisive that detailed information regarding the profitability
of that business is not before court. This is
according to me at
best, something that the Registrar ought to take into account if it
is called upon to fix an amount for any
security to be put up.
[45]
It was agued
on behalf of Leloko that it is not a foregone conclusion that Mr
Peppermans would eventually be successful in proving
his damages. In
my view, however, it cannot be said on the papers that Mr Peppermans’
claim is anything but made in good
faith and that he has no
reasonable prospect of success. Mr Peppermans may eventually not be
able to prove all of his claims, but
no case is made out that he will
not be able to prove any damages. On a mere reading of the expert
reports, it is clear that Mr
Peppermans suffered considerable
damages. In any event, Leloko make out no case that Mr Peppermans’
claims are mala fide
and that it will under the circumstances
eventually be able to obtain a costs order against Mr Peppermans. The
opinions of
Mr Crutchfield do not
suffice to cast doubt on Mr Peppermans’ claims. No attempt is
even made on the papers to qualify Mr
Crutchfield as an expert
capable to express opinions such as these.
[46]
I also take the unexplained considerable
delay in excess of six years in bringing the application into account
in exercising my
discretion against Leloko. Leloko does not even
disclose when it became aware that Mr Peppermans relocated to
Australia. On the
papers before court, further alluded to on behalf
of Leloko in the heads of argument and in argument before this Court,
the main
reason for Leloko only bringing the application at this late
stage, appears to be Leloko’s frustration with Mr Peppermans
that he is not taking steps to further the quantum trial. It was in
this regard submitted on behalf of Leloko at the hearing of
this
matter that an order for security of costs will “
light
a proverbial fire under Mr Peppermans as dominus litis to proceed
with the matter to finality”
.
[47]
Further to this is the stated reason in the
founding affidavit that Leloko is under the impression that Mr
Peppermans has no case
and knows it. (I pause to mention in this
regard that the submission made in the heads of argument on behalf of
Leloko that in
view of Mr Peppermans’ conduct it is clear that
he cannot afford the litigation and that he presumably abandoned his
action
against the applicant and has no intention of proceeding with
the trial, was correctly in my view not persisted with in argument
before me). As I see it, the application is obviously brought at this
late stage in an attempt by Leloko to bring this matter to
a head.
[48]
The above are no valid reasons in bringing
an application for security of costs. These are in my view akin to
bringing an application
for security of costs in order to
stifle
a genuine claim.
[49]
As I see the matter
having due regard to the particular circumstances of the case as well
as considerations of equity and fairness
to both Leloko and Mr
Peppermans, Mr Peppermans ought to be absolved from furnishing
security for costs.
COSTS
[50]
Counsel for Leloko requested that if I in
the exercise of my discretion determine that Leloko should pay the
costs of this application,
I should nevertheless disallow the costs
occasioned by the late filing of the supplementary affidavit, filed a
day before the hearing.
In my view the request is validly made.
[51]
For the remainder, there is in my view no
reason for costs not to follow the event.
[52]
In the result, I make the following orders.
ORDER
1.
The application for security for costs is
dismissed.
2.
The applicant is ordered to pay the
respondent’s costs, excluding the costs occasions be the late
filing of the supplementary
affidavit.
H G A SNYMAN
Acting Judge of the
Gauteng High Court
Pretoria
Virtually
heard: 23 February 2021
Electronically
delivered: 3 May 2021
Appearances:
For
the applicant/second defendant: Adv JL Verwey instructed by AJ
van Rensburg Inc.
For the respondent:
Adv S Georgiou instructed by Malcom Lyons & Brivik Inc.