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[2018] ZAGPPHC 30
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Matthews N.O and Others v Thyne N.O and Others (20714/17) [2018] ZAGPPHC 30 (16 February 2018)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
[REPUBLIC
OF SOUTH AFRICA]
CASE
NUMBER:20714/17
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
DATE:16
FEBRUARY 2018
In
the matter between:
ROWAN
WAUCHOPE
MATTHEWS
N.O.
1
ST
PLAINTIFF
MATTHEWS:
ROWAN WAUCHOPE
2
ND
PLAINTIFF
MATTHEWS:
LYNN DELENE KILGOUR
3
RD
PLAINTIFF
MATTHEWS
: MARK ROWAN
4
TH
PLAINTIFF
MATTHEWS:
BIANCA ROSE
5
TH
PLAINTIFF
MATTHEWS:
ELIZABETH TALLULAH
6
TH
PLAINTIFF
And
WILLIAM
HERBERT HUNTER
THYNE
N.O.
1
St
DEFENDANT
PSG
WEALTH FINANCIAL PLANNING (PTY) LTD
2
ND
DEFENDANT
RONALD
NORMAN KING N.O.
3
RD
DEFENDANT
MICHAEL
BRIAN MATTHEW N. O.
4
TH
DEFENDANT
KING:
RONALD NORMAN
5
TH
DEFENDANT
MATTHEW:
MICHAEL BRIAN
6
TH
DEFENDANT
WARD:
HELEN.
7
TH
DEFENDANT
THE
MASTER OF THE HIGH COURT: PRETORIA.
8
TH
DEFENDANT
JUDGMENT
MAVUND
LA,
J.
[1]
The sixth defendant, as the applicant brought an application for
security for costs against the first, third,
fourth, fifth and sixth
plaintiffs, as the respondents, in terms of Rule 47(3), and claiming
that pending the filing of such security
for costs the main action of
the plaintiffs' be stayed. Needless to state that, he also seeks a
costs order against the aforesaid
plaintiffs. For ease of reference
the parties are referred to as cited in the main claim.
[2]
The sixth defendant, as applicant, claims the amount of R500 000. 00
(five hundred thousand rand) in respect
of security for costs, which
amount he believes to be reasonable for the following reasons:
2.1
the nature and complexity of the main action involves several legal
disputes and will necessitate protracted litigation; and
2.2
the quantum of the main action, being R1, 886, 779. 62 (One Million,
Eight Hundred and Eighty Six Thousand, Seven Hundred
and Seventy Nine
Rand and Sixty Two cents) justifies the legal expenses.
[3]
This application for security for costs, is in my view a "breeder
twis", it reveals the strained relations between
two brothers,
namely the second plaintiff and the sixth defendant, over a golden-
nest their late father left them, in the form
of a family trust known
as Brian Mathews Trust. Both the second plaintiff and the sixth
defendant are trustees and beneficiaries
of the aforesaid trust. The
sixth defendant, has directed his anger not only towards his brother,
but also the latter's wife (third
plaintiff), their son (fourth
plaintiff) their two daughters (fifth and sixth plaintiffs). What
raised the sixth defendant's ire,
is their temerity to accuse him of
having dipped his hand in the golden-nest and removed one of the
golden-eggs in the amount of
approximately R2 million and demanding
that he returns it to the nest (unauthorised disposition of the
trust's assets).
[4]
The sixth respondent, embarrassed on being discovered, he denied the
accusations, with tongue in cheek tendered to return to
the nest an
amount of R40 000. 00 (paragraph 30.2 of his plea). Still fuming, he
unleashed in terms of rule 47(3) this application
for security for
costs contending that the third, fourth, fifth and sixth respondents
are peregrines of Australia, as such they
must deposit an amount of
R500 000. 00 before they proceed further with the action. In the
event of their action being unsuccessful,
he would not have to follow
them off-shore,·to unknown territory to recover his costs. In
this demand for security for costs,
the sixth defendant has
difficulty in making the same demand against the second plaintiff,
for the reason which will follow, but
still insisting that the first
plaintiff should also pay security.
[5]
Section
34 of the Bill of Rights of the Constitution of the Republic of South
Africa, Act 108 of 1996, guarantees everyone the right
to access the
courts to have their disputes adjudicated by the courts,
inter
a/ia.
Section
9(1) of the Constitution provides that: "Everyone is equal
before the law and has the right to equal protection and
benefit of
the law." In the matter of
Tshwane
City v Link Africa
[1]
the
Constitutional Court held that: "The objects of the Bill of
Rights are to be found in the rights guaranteed by it and the
values
underlying those rights. This means, in the process of interpreting
s22 of the Act, we must pay regard to rights in the
Bill of Rights
"which may be affected by the meaning assigned to the section
and settle for a construction that advances those
rights."
[6]
The general rule, with regard to security for costs, in terms of
common law is that an
incola
plaintiff cannot furnish security
before he can litigate,
vide Alexender v Joki and Others
1948
(3) SA 269
at 272-273. The right to access to court is not absolute.
It can be limited or tempered with if it is just and reasonable and
equitable.
Indeed section 36 of the Constitution provides for
limitation of rights enshrined in the Bill of Rights.
[7]
Rule
47(3) of the Rules of the High Court afford a litigant the right to
approach the Court for an order that security be furnished.
The Court
has discretion to grant such an order. In the exercise of its
discretion the Court must have regard to the circumstances
of that
particular case, and without pre-judging the relevant main case,
determine the nature and extent of the security and the
need to
protect the applicant and also guard against an injustice committed
and ensure that justice is not denied,
vide
Africair (Rhodesia) Ltd v lnterocean Airway
[2]
where
Buchanan J in
Schunke
v Taylor
&
Symans,
8
SC at 103 is cited. The Court must balance the respective interest of
the parties having regard to the consideration of equity
and fairness
when deciding whether security for costs must be furnished;
vide
Klerk NO SA v SA Metal
&
Machinery
Co (Pty) Ltd .
[3]
[8]
In
the matter of
Siemens
Telecommunications v Dataenics
[4]
Fabricius
J after a thorough research, with respect, on the genesis of
'security for costs' held as follows:
"[5]
It is clear that rule 47 does not create any rights for an applicant
for security for costs. It is solely and purely procedural
in kind.
It only provides for the procedure to be adopted if a party is
'entitled' to security for costs. ...
{6]...
Under the common law an
incola
company could not be compelled
to give security for costs at all. In
Witham v Vendables
(1828)
1 Menzies 291
the following was said:
'(N)o
person, who is either
civis municeps or incola
of tis colony,
can as plaintiff, be compelled to give security for costs, whether he
be rich or poor, solvent or insolvent; and
on the other hand, that
every person, who is neither
civis municeps, nee incola,
may,
as plaintiff be called on to give security for costs, unless he prove
that he is possessed of immovable property situated within
the
colony.'
This
dictum clearly indicates that
incolae
cannot
be compelled to give security for costs.
A
perigrinus
could
under certain circumstances, however, be so called upon."
[5]
[9]
In the matter of
5harenisa
and Others v Minister of Safety and Security and Another
[6]
Matlapeng
AJ held as follows:
"The
law is settled that a
perigrinus
may be called upon to give
security for costs. Where there is a dispute regarding a person's
status, a two stage approach is taken
to resolve it. The first stage
is to determine whether a person is a
perigrinus
or
incola.
If it is found that such.a person is a
perigrinus,
the
next stage is whether the court will exercise the discretion which it
has to absolve him or her from the obligation to give
security."
[10]
In
exercising its discretion, the court should be extremely wary in
closing the door of the courts to any litigant entitled to approach
a
particular court;
vide
Standard Credit Corporation Ltd v Betser and Others
[7]
The
court shall have regard to all the circumstances and consideration of
equity and fairness to both parties, and decide whether
the
peregrines should or should not be absolved in furnishing security.
Vide
Magida v Minister of Police
[8]
[11]
I now consider the respective plaintiffs from whom security for costs
is demanded:
8.1
Starting with the second plaintiff: It is common cause that he is
resident in Perth, Australia; a 50% shareholder,
via
his
nominee company (Wauchope and Kilgour (Pty) Limited, an entity by the
name of
MERB {Pt y) Ltd
("MERB") which is a South
African registered and located company; He from time to time comes to
South Africa;
8.2
MERB
in turn is a 100% shareholder of, and in effect a holding
company for the shares in,
Douglasdale Dairy (Pty) Ltd
("Douglasdale Dairy" situated in Douglasdale, Sandton,
South Africa. The second plaintiff is a director of both MERB and
Douglas Dairy, and indirectly a 50% shareholder of these entities.
8.3
It is not disputed that the sixth respondent tried to exit MERB and
in turn Douglasdale and valued his 50 % interest in
both these two
entities to be R65, 000, 000, 00 (sixty-five million rand), and by
parity of reasoning so too is the value of the
second plaintiff's 50%
interest in both the aforesaid entities;
8.4
The second plaintiff also has un-mortgaged immovable property
situated at Douglasdale Farm
valued at R7.4 million;
8.5
From time to time he comes to South Africa to attend to his business
interest;
8.6.
He is, suing also as the first plaintiff in his capacity as the
trustee of the family trust.
[12]
The third plaintiff and adult female, is married to the second
plaintiff and resides in Australia. The fourth plaintiff, an
adult
male, fifth and sixth plaintiffs, both adult females are receptively
the son and daughters of the second and third plaintiffs.
It is
common cause that all the aforesaid plaintiffs reside in Australia
and are therefore peregrines.
[13]
All the plaintiffs have sued Jointly and severally. This means that
in the event any adverse costs order is made against them,
they shall
be jointly and severally liable for such costs order. The sixth
respondent contended nonetheless, that the question
of the
locus
standi
of
the third to sixth plaintiffs is still an issue; were it to be found
that they do not have any
locus
stand/
then
they shall be held liable, not jointly and severally but in their
individually capacity and therefore they must be ordered
to pay
security for costs. Without prejudging the issue of
locus
standi
of
the other plaintiffs, suffice to point out, it is trite, that
trustees are duty bound to protect the interest of the family trust
which can only speak through its trustees and take action against a
delinquent trustee, such as the sixth defendant
in
casu,
to
demand restoration of the trust's assets;
vide
Bafokeng Tribe v Impala Platinum Ltd and Others;
[9]
Graham
v Park Mews Body Corpo rate.
[10]
[14]
The
onus
of
persuading the court that security should be provided, rest with the
applicant. It is not necessary that a detailed investigation
of the
merits of the main action should be undertaken, but the court
nonetheless should have regard to the essential and salient
averments
therein;
vide
Zietsman v Electronic Media Network Ltd and Others.
[11]
[15]
In the matter of
Northbank
Diamonds Ltd v FTK Holland BV and Others
[12]
it
was held that where one or more of applicants are able to pay order
of costs made jointly and severally, any possible prejudice
to
respondent of not being compensated for its costs is removed. The
Court is entitled to consider the overall financial posit
ion of the
applicants and their pulled resources of all the applicants.
[16]
The second plaintiff although he is a
perigrinus,
is
undoubtedly possessed of substantially means and interests which are
situated in this country. The other plaintiffs are his wife
and
children also
perlgrines
of Austrialia. The second plaintiff
from time to time comes to South Africa to attend to his business
interest. The sixth defendant
is very much aware of the means and
interests of the second plaintiff in this country, and can easily lay
his hands through the
hands of the law, upon such interest. It is
unlikely that such interest can be spirited out of this country by
the second plaintiff
without the sixth defendant not becoming aware
thereof. Besides, some of the other plaintiffs are beneficiaries in
the family trust.
In the event of the costs having to be paid, not
jointly and severally by those beneficiaries to the trust, their
respective
beneficiary
Interest can be attached. But the second respondent says whatever
costs awarded against the other plaintiffs can be
retrieved from him,
although he has not offered to stand security in that regard.
[17]
There is a serious allegation levelled against the sixth defendant by
the plaintiffs, namely that he has dipped his hands in
the family
trust. In this regard I only need to bear in mind the fact that the
sixth defendant has offered to pay R40, 000. 00
(forty thousand rand
to the family trust, although he denied the rest of the accusations
as contained in main application. This
olive branch he waived is
enough to persuade me that the action brought by the plaintiffs
cannot be said to· have been vexatious
or reckless and amounts
to abuse of the court process. On the contrary, in my view,
the action was not vexatious but
bona
fide
brought
to retrieve what is believed to have been syphoned out of the family
trust by the sixth defendant;
vide
Ramsay NO and
Others
v Maarman NO and Another
[13]
.
To demand of the plaintiffs to deposit security for costs, in the
light of serious allegations of pilfering by the sixth defendant,
would do injustice to the family trust, which, its interest as
trustees and beneficiaries, they are duty bound to strive to protect;
vide Harris v Rees
[14]
These
factors outweigh the interest of the sixth defendant, who, if a costs
order is awarded in his favour, can still attach such
interest of the
second plaintiff to be found in the country; vide Shepstone &
Wylie v Geyser N.O
[15]
[18]
In the premises, in the exercise of my discretion, I come to the
conclusion that the plaintiffs should be
absolved from paying any
security for costs and that the sixth defendant's application should
be dismissed with costs.
[19]
I do not agree with the submission made on behalf of the sixth
defendant, which went against his own motivation
for the security for
costs,
(vide
para [2] supra) that the matter was not complex,
did not warrant the employment of senior counsel and a junior. It is
not the complexity
of the matter that decides the employment of the
stature of counsel, but the importance and value of the interest
sought to protect.
There are various beneficiaries to the family
trust which is by all account substantial, to all parties concerned.
I am of the
view that the plaintiffs were justified in employing the
services of two counsels and accordingly entitled to the concomitant
costs
thereof as well.
[20]
In the result the application for security for costs by the sixth
defendant is dismissed with costs inclusive
the costs of employing
the services of two counsel.
N.M
MAVUNDLA
JUDGE
OF THE HIGH COURT
HEARD
ON THE
06 FEBRUARY 2018.
DATE
OF JUDGMENT
16 FEBRUARY 2018.
PLAINTIFFS'
ADV
M, NOWITZ S.C.
INSTRUCTED
BY
STEVE MERCHAK ATTORNEY
6
TH
RESPONEDNT'S ADV
MICHAEL R MELLENS SC, with
ADV
GR GORY W. AMM
INSTRUCTED
BY
SCHINDURS ATTORNEYS
[1]
2015 (6) SA 440
(CC) at 453.
[2]
SA
1964 (3) SA 114
at l 18 D- E
[3]
[2001] ALL SA 266E.
[4]
2013 (I) SA 65 (GNP ) at 69.
[5]
Vide
Van Zyl v Euodia Trust (Pty) Lid
1983
(3) SA 394
(TPA) at 396 D-E
[6]
92394/ 2009) [2010) ZAFSI-JC 149 (25 November 2010),
[7]
1987 (I) SA 812 (WLD) at 820J.
[8]
1987 (1) SA 1
(AD) at 1
SD.
[9]
1999(3) SA 517 (BHC) at 548 A, 549C-J.
[10]
2012 (I) SA 355 (WCC) at 360C-G.
[11]
2008 (4) SA I (SCA) at para21.
[12]
2003 (1) SA 189 (NmS).
[13]
2002
(6)
SA
159
(CPD) at 173 H-J.
[14]
2011 (2) SA 294
(OSJ) at 294 at 294 at 297 F-J.
[15]
1998 93) SA 1036
(SCA) at 1046B