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[2021] ZAGPJHC 428
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N and Another v D In re: D v N and Another (2018/16715) [2021] ZAGPJHC 428 (17 September 2021)
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REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
JOHANNESBURG
CASE NO: 2018/16715
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED:
YES
[17 SEPTEMBER 2021]
In the matter between:
STN
First Applicant
HN
Second Applicant
and
MRMD
Respondent
In re:
MRMD
Applicant
and
STN
First Respondent
HN
Second Respondent
JUDGMENT
MUDAU, J:
[1]
This is an opposed
interlocutory application in terms of Rule 47(3) of the Uniform Rules
of Court calling upon the respondent (“D[....]”)
to
furnish security for the applicants’ costs. Accordingly, having
reason to believe that the respondent would be unable
to pay their
costs if successful in the pending application, the applicants ("the
N[....]s") seek an order that security
be given by D[....] in
the amount of R70 000,00 as demanded, and that the proceedings
launched by D[....] in respect of which they
are respondents, be
stayed until such order is complied with, failing which the N[....]s
be entitled to apply for a dismissal of
the proceedings. After
hearing arguments on the merits I reserved judgment, but subsequently
granted an order on 13 September 2021
with costs for the relief
sought with reasons to follow consistent with the notice of motion.
These are my reasons.
[2]
Rule 47(3) relied upon
states the following: "
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.
"
[3]
The context is the
following. Mr D[....] and the N[....]s are all Zimbabweans. Ms
N[....] and Mr D[....] were once married. Their
marriage was
terminated pursuant to a decreed of divorce in the High Court of
Zimbabwe (Bulawayo) dated 17 January 2019. The backdrop
to the
current dispute arises out of the division of immovable property
situated in Johannesburg at [….] C[....] Hills Private
Estate,
C[....] Road ("the Property"); by the Cowen AJ order dated
22 January 2019 instituted in terms of the
actio
communi dividundo
. The
Property was jointly owned by the first applicant and the respondent
in the present application, Ms N[....] and Mr D[....]
respectively.
[4]
On
20 September 2019 and utilising that part of the Cowen AJ order which
enabled the parties to approach the Court for a variation
[1]
,
Mr D[....] brought what he describes as a "variation
application". At para 8 the Cowen AJ order reads: “
Should
either party be aggrieved that in all the circumstances there is an
unreasonable delay in the finalization of case number
2017/252710
(including any appeal), such party may approach the Court on the same
papers supplemented where necessary, to (request
the immediate
distribution of the remaining proceeds on a just and equitable basis
but neither party may so approach the Court
for a period of 15 months
from the date of this order
”.
[5]
In his variation
application, Mr D[....] seeks the following relief: that paragraphs 7
and 8 of the Cowen AJ order be "disposed
with" and that the
order be varied so as to provide that paragraph 3.10.3 will as
amended provide that the "
After
collection of conveyancing fees, the remaining proceeds shall be
immediately distributed, in equal proportion between Mr D[....]
and
Ms N[....]
". The
N[....]s are opposing to the variation application and in addition
launched a counter application to declare the respondent
a vexatious
litigant. They point out,
inter
alia
, that D[....]
ignored the 15 months’ moratorium in launching the variation
application.
[6]
As Rome AJ pointed out
elsewhere in a judgment between the same parties, since the launch of
the variation application, the N[....]s
have racked up several costs
orders as against Mr D[....]. In order to give some context to these
orders, it is necessary to fill
in more piece of the chronicle
background. The Cowen AJ order links the release of the sale proceeds
to the finalisation of case
number 2017/252717. This case number
pertains to a trial action between Mr N[....] and Mr D[....]. Mr
N[....] is Ms N[....]'s father
and Mr D[....]'s ex-father-in-law. In
the trial action, Mr N[....] seeks the recovery of a loan which he
alleges he advanced to
his daughter and his then son-in-law to enable
them to purchase the Property. The impact of the dispute on the
proceeds accruing
from the sale of the Property is reflected in the
judgment of Cowen AJ and paragraph 8 of the Cowen AJ order.
[7]
I turn to the facts of the
current application. The applicants allege as a basis for the relief
sought in paragraph 9 of the founding
affidavit that: the respondent
is not domiciled in the Republic of South Africa; does not have
residence of some permanent or settled
nature in the Republic of
South Africa; and therefore is a
peregrinus
;
does not own an unmortgaged immovable property in the Republic of
South Africa; does not carry on business in the Republic of
South
Africa; and that he has no assets or income of his own. The
allegations are founded upon the respondent’s own founding
affidavit (“FA 4”) in the variation application in which
he stated that he is "
functionally
bankrupt"; his "business endeavours have come to a
standstill such that he is) unemployed and (has no access
to any
other financial means"; he is a "destitute foreign
national; and he is unable to afford accommodation
”.
[8]
In addition, the applicant
attached as annexure 5, a judgment of 5 February 2019 in the High
Court of Zimbabwe pursuant to the first
applicant and the
respondent's divorce in which the respondent stated under oath that
he does not have a permit to reside and work
in South Africa and
resides here unlawfully (last paragraph on page 12 and first
paragraph on page 13 of the judgment); and he
is not in full time of
employment, has no accommodation (in Johannesburg) in view of the
impending sale of the matrimonial home,
and was financially dependent
on the first applicant up until the divorce. The respondent has at
least 10 courts orders against
him, nine of which have since been
taxed to a total of R169,740-24 and subsequently presented to him for
payment but remain unsettled.
On the applicants’ version, the
respondent is a vexatious litigant which is borne out by the numerous
court judgments and
most against him involving the same parties.
[9]
In the answering
affidavit, the respondent admits the contents of paragraph 9 of the
applicants’ founding affidavit referred
to above inter alia
that he is a
peregrinus
without financial resources. He confirms that he has always been
financially dependent on his previous wife, Ms N[....]. Boldly,
the
respondent astonishingly denies the contents of his affidavit, “FA4”
without more. The thrust of his complaint
being that the variation
application was launched first, and thus pending before the court and
should be dealt with first. In addition,
that the relief sought forms
part of the prayers that the applicants seek. He is of the view, that
the first applicant has no business
in launching these proceedings as
she too, is a Zimbabwean citizen with no permanent residency in the
Republic. As for the second
applicant, he decries his
locus
standi.
[10]
In
terms of Rule 47 of the Uniform Rules, a
peregrinus
plaintiff (or applicant) who does not own unburdened immovable
property in the country, may be ordered to give security for the
costs of his action. The objective of the rule is to ensure that if
the peregrine plaintiff is unsuccessful, payment of the incola
defendant’s costs is secured.
The
court has a discretion to grant an order for security for costs where
both parties are
peregrini
.
The court must be satisfied that the main application is vexatious or
reckless or amounted to an abuse of the process of the court
[2]
.
A
peregrinus
who
is plaintiff (or applicant) and who does not own unmortgaged
immovable property in the Republic may be ordered to give
security
for the costs of his action
[3]
or as in this instance an opposition to the pending application.
[11]
The
starting point is that an incola is not generally compelled to
furnish security for costs except where there is an abuse of
the
process of court, namely where the claim is vexatious
[4]
.
An action is vexatious if it is obviously unsustainable, frivolous,
improper, instituted without sufficient ground, to serve solely
as an
annoyance to the defendant
[5]
.
[12]
In
an application for security for costs a court does not have to be
convinced as a matter of certainty that the matter is incapable
of
succeeding but rather as a probability. The test whether an action is
vexatious on the grounds that it is unsustainable can
therefore be
summarised as follows: the applicant does not have to establish this
as a certainty; a court should not undertake
a detailed investigation
of the case nor attempt to resolve the dispute between the parties.
This would be tantamount to pre-empting
the trial court, in this case
the court seized with the variation application. Rather, the court in
a security for costs application
brought upon these grounds, should
merely decide on a preponderance of probabilities whether there are
any prospects of success
[6]
.“
The
court must carry out a balancing exercise. On the one hand it must
weigh the injustice to the plaintiff if prevented from pursuing
a
proper claim by an order for security. Against that, it must weigh
the injustice to the defendant if no security is ordered and
at the
trial the plaintiff’s claim fails and the defendant finds
himself unable to recover from the plaintiff the costs which
have
been incurred by him in his defence of the claim.”
[13]
This
approach was subsequently endorsed by the Constitutional Court in
Giddey
NO v JC Barnard and Partners
[7]
,
which concerned the correct constitutional approach to a court’s
discretion as whether to require a litigant to furnish
security for
costs. There the Constitutional Court stated as follows in relation
to the balancing exercise: ‘
To
do this balancing exercise correctly, a court needs to be apprised of
all the relevant information. An application for security
will
therefore need to show that there is a probability that the plaintiff
company will be unable to pay costs. The respondent
company, on the
other hand, must establish that the order for costs might well result
in it being unable to pursue the litigation
and should indicate the
nature and importance of the litigation to rebut a suggestion that it
may be vexatious or without prospect
of success. Equipped with this
information, a court will need to balance the interest of the
plaintiff in pursuing the litigation
against the risks to the
defendant of an unrealisable costs order
.’
[14]
However, free or
unburdened assets, whether movable or immovable, which can readily be
liquidated may constitute a basis for a court
to refuse to order a
peregrinus
to furnish security for the
incola
applicant’s costs.
[15]
The
fact that the respondent in this matter has not paid numerous taxed
bills upon presentation and as ordered by the court is a
relevant
consideration. It matters not that the application was launched after
the pending variation application. As for the second
applicant’s
standing in these proceedings, he is directly affected by the relief
that the respondent seeks which flows from
the
order
by Cowen AJ. If D[....] is successful in obtaining an immediate
release of the funds, Mr N[....]’s rights in terms of
Cowen
AJ's order will be prejudiced, and any order or award in his favour
in the civil trial will be a hollow victory. Mr N[....]
has
substantial interest in preventing the incurrence of further costs in
these proceedings as he is directly affected in the pending
civil
action. The respondent’s complaint in this regard is therefore
of no moment and meritless. It is trite that the court
has an
inherent jurisdiction to stop or prevent a vexatious action as being
an abuse of the process of the court, and one of the
ways of doing so
is by ordering the vexatious litigant to furnish security for the
costs of the opposing side
[8]
.
An action is vexatious if it is clearly unsustainable.
[16]
Accordingly, I conclude
that considerations of fairness and equity favour the granting of
security as borne out by the totality
of the facts. In the current
matter from the papers, the respondent quite clearly the owns no
significant movable and by his admission
no immovable assets in South
Africa and has failed to disclose what assets he owns in Zimbabwe if
any, making execution of any
costs order abroad more onerous. So
although in this age of globalisation, suing a
peregrinus
in his own jurisdiction to recover costs may be less arduous, the
extra burden of costs and delay in enforcing a judgment abroad
is an
obvious reality that cannot be ignored.
[17]
The first applicant
maintains she has permanent residency in the Republic and gave an
address where she currently resides. There
is no reason why she
cannot pursue a claim against the respondent. Even if the N[....]s
were to bring proceedings in Zimbabwe to
recover their costs, the
respondent’s reticence to make any disclosure of his assets and
liabilities in will preclude, hinder
or add to the burden of
enforcement against any such assets that do exist abroad. This, in my
view, is a further factor that weighs
in favour of granting an order
for security for the N[....]s’ costs in the pending
application. Without pre-empting the end
result of the variation
application, on the probabilities, the chance of success seems deem.
[18]
The prospects of the
applicants recouping all their costs from Dhlodlo, who as indicated,
confirmed that he is impecunious are slim,
regard being had to his
conduct in this matter. This is one prime example of a matter which
calls out for a security for costs
order. To refuse the applicants
right to claim security for costs could in these instance may lead to
great injustice. There is
no reason why the question costs should not
follow the result. It is for these reasons that I granted order.
T
P MUDAU
[Judge
of the High Court]
Date of Hearing
: 05 August 2021
Date of Judgment
: 17 September 2021
APPEARANCES
For the Applicant
: Adv H Viljoen
Instructed by
: Ramsay Webber Inc
For the Respondent: Mr M
Dlodlo
(In Person)
[1]
The order by Cowen AJ in part read: “
Should
any party to these proceedings encounter any practical impediment
implementing this order or a change in circumstances
warrant it,
such party may approach the Court for further directions or a
variation of the order
”
at para 9
[2]
Ramsamy
NO v Maarman
2002
(6) SA 159
(C) at 172I;
Boost
Sports Africa (Pty) Ltd v South Africa Breweries (Pty) Ltd
2015
(5) SA 38
(SCA) at 50C–I.).
[3]
Brearley
v Faure, Van Eyk and Moore
(1905)
22 SC 2
;
Lowndes
v Rothschild
1908
TH 49
;
Kachelnik
v Afrimeric Distributors (Pty) Ltd
1948
(4) SA 279 (C).
[4]
.Ecker
v Dean
1938
AD 102
; Zietsman v Electronic Media Network Ltd
2008
(4) SA 1
(SCA), para 4
[5]
See
Fisheries
Development Corporation of SA Ltd v Jorgenson and Another
1979
(3) SA 1331
(W);
Golden
International Navigation SA v Zeba Maritime Co Ltd; Zeba Maritime v
MV Visvliet
2008
(3) SA 10
(C) para 9).
[6]
Zietsman
(supra)
at para 21.
[7]
[2006] ZACC 13
;
2007 (5) SA 525
(CC) at para 8.
[8]
Zietman, supra at 4E.