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THERESA ALICE HODGETTS Eight Applicant
ELIZABETH CARYL HENRICO Ninth Applicant
NICOLE GURTSCHMANN Tenth Applicant
ESTHER MARIE ROUSSEAU Eleventh Applicant
CHRISTINA JACOBA HELENA LAUBSCHER Twelfth Applicant
and
NICOLAS GEORGIO First Respondent
MICHAEL GEORGIO Second Respondent
GEORGE NICOLAS GEORGIOUS Third Respondent
JOHANNES FREDERICK KLOPPER N.O. Fourth Respondent
JOHANNES FREDERICK KLOPPER Fifth Respondent
CORNELIUS FOURIE MYBURGH Sixth Respondent
PANOGIOTIS KLEOVOULOU Seventh Respondent
ZEPHAN PROPERTIES (PTY) LTD Eight Respondent
ORTHOTOUCH LIMITED Ninth Respondent
ORTHOTOUCH (PTY) LIMITED Tenth Respondent
NICOLAS GEORGIOU N.O Eleventh Respondent
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MAUREEN LYNETTE GEORGIOU N.O. Twelfth Respondent
JUDGMENT
___________________________________________________________________
JANSE VAN NIEUWENHUIZEN J:
Introduction
[1] This judgment is in respect of two applications that served before me on 6
March 2025. I will deal with the applicants accordingly.
AD: Applicants’ application for postponement
[2] The respondent s did not oppose the application for a postponement of the
matter. The third respondent does, however, oppose the terms of the
postponement. Prayer 2 contains the relief opposed by the third respondent,
namely:
“2. That the hearing of the matter be postponed, alternatively stayed, pending the
final adjudication of the so -called setting aside application in respect of the
Scheme of Arrangement in respect of Orthotouch Ltd (case number 42332/14
in the Gauteng Division of th e High Court) and in respect of which judgment
has been reserved by the honourable Mrs Justic Mali on 14 November 2024.”
[3] In order to adjudicate the r elief claimed in prayer 2 , it is apposite to have regard
to the litigation history between the parties. The applicants were shareholders
in the fifteenth to twenty -second respondents collectively referred to as the
Highveld Companies . The companies were placed under business rescue and
the fourth respondent was appointed as business rescue practitioner in 2011.
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[4] In terms of the business rescue plan Orthotouch Ltd (“Orthotouch”) would take
transfer of and grow the property portfolio of the Highveld Companies.
Orthotouch could not fulfil its obligations in terms of the business rescue plan,
which in turn led to a Scheme of Arrangement being entered into between
Orthotouch and the investors. According to the applicants the Scheme was
adopted by a small minority of investors and entailed that investors would
receive less income and virtually no security for their i nvestments.
[5] The Scheme of Arrangement was sanctioned by the Gauteng Local Division
(Johannesburg High Court) on 25 November 2014. Some investors, including
the applicants, were opposed to the Scheme and during March 2015 a certain
Jurie Johannes Geldenhuys togeth er with seven other investors launched an
application for the rescission of the order in the Johannesburg High Court.
[6] Some four years later and o n or about 12 December 2019 the applicants
launched this application to obtain inter alia leave to institute a derivative action
on behalf of the Highveld Companies against Orthotouch and certain individuals
involved in the affairs of Orthotouch.
[7] The respondents oppose the relief claimed by the applicants on inter alia the
ground that the existence of the Scheme of Arrangement precludes the
applicants from obtaining the relief sought herein.
[8] The outcome of the rescission application in the Johannesburg High Court,
therefore, has a direct implication on the relief claimed by the applicants herein.
For various reasons that are not relevant for present purposes, the rescission
application was only heard during November 2024 . The application served
before Mali J and judgment was reserved on 14 November 20 24. At the time of
the hearing of this application, judgment had not been handed down.
[9] In the result and according to the applicants, it will not be in the interest of justice
to proceed with this application whilst the judgment in the rescission of the
Scheme of Arrangement application is pending.
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[10] In opposition to the relief claimed in prayer 2 of the notice of motion, the third
respondent points out that should the relief be granted, the application will most
probably not be heard for another two to three years , thus nine years or more
after the application was launched.
[11] The third respondent, furthermore, points out that;
11.1 he is not a party to the rescission application;
11.2 the rescission application was launched by persons other than those
who feature as the applicants herein;
11.3 there is not a substantial or any overlap between the issues in the
rescission application and those in this application;
11.4 should the unsuccessful party appeal the order in the rescission
application, the appeal will in all probability only be heard in the Full
Court in 2027, a further appeal to the Supreme Court of Appeal will only
be heard in 2029 and a final appeal to the Constitutional Court in 2031.
Such a scenario will constitute an instance of justice being denied
11.5 the applicants make serious unsubstantiated allegations of fraudulent
conduct against him and his inability to address these serious allegations
has caused and continues to cause enormous emotion stress and
frustration.
[12] Although the applicants only apply for a stay of proceedings in the alternative,
the reasons provided for the relief fall squarely within the realm of an application
for the stay proceedings and I will proceed to adjudicate the matter accordingly.
[13] In Mokone v Tassos Properties CC and Another 2017 (5) SA 456 (CC), the
court confirmed that a stay of proceedings may be granted in terms of the
powers bestowed on the court to regulate its own proceedings as envisaged in
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section 173 of the Constitution. The court might exercise this power if it in the
interests of justice to do so.
[14] In casu the issue to be determined in the Johannesburg High Court, to wit the
validity of the Scheme of Arrangement forms the subject matter of one of the
grounds of defence raised by the respondents in this application. In
circumstances where the Johannesburg Hig h Court is in the process of
pronouncing on the issue, it will in my view be in the interests of justice to stay
the proceedings herein until the issue has been finally determined.
[15] The rehearing of the issue will take up valuable court time and might result in
different findings on the same issue. This will self -evidently not be in the
interests of justice. I am mindful that an order staying these proceedings is
prejudicial to t he third respondent’s right to have the dispute determined
speedily. The interests of justice in casu ¸ however, outweighs the prejudice that
the third respondent will suffer if the order is granted.
Costs
[16] By agreement between the applicants and the remaining respondents, the
costs of the application will be costs in the main application. The applicants
have, however, sought costs against any of the respondent that opposes the
relief claimed herein. In view of the history of the matter and the fact that the
applicants seek an indulgence, I am not prepared to saddle the third respondent
with a cost order. The matter has been dragging on for five years due to no fault
on the part of the third respondent. T he third respondent was, in my view, well
within his right to insist on the speedy resolution of the matter. In the result,
costs will be costs in the main application.
ORDER
[17] In the result, I grant the following order:
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1. The application is postponed until the final adjudication of the application
under ca se number 42332/14 in the Gauteng Local Division of the High
Court of South Africa.
2. Costs is costs in the cause.
AD: Second and Third respondents’ rule 41(1)(c) applications
[18] On 17 November 2022, t he applicants launched an application in this court for
the transfer of the review application from the Johannesburg High Court. This
court does not have jurisdiction to entertain a matter pending in the
Johannesburg High Court and having been made aware of the jurisdictional
obstacle, the applicants issued a further transfer application in the
Johannesburg High Court in December 2022. Notwithstanding the aforesaid,
the application in this court was only withdrawn on 15 June 2023 at the
insistence of the resp ondents. The applicants did not tender costs in the notice
of withdrawal.
[19] In the result, t he second and third respondents, each launched an application
in terms of the provisions of rule 41(1)(c) of the Uniform rules court for an order
for costs. The applicants opposed the application and submitted that they
should not saddled with a cost order.
[20] In considering the appropriate cost order, if any, it is apposite to have regard to
the test applicable to costs orders in withdrawal applications. The test was
succinctly summarised by Boruchowitz J in ABSA Bank and Others v Robb
2013 (3) SA 619 (GSJ), namely:
‘[8] It is trite that a party who withdraws an action or application or who abandons a
defence is in the same position as an unsuccessful litigant, and therefore the other
party is ordinarily entitled to costs. A departure from the principle, that costs mu st be
awarded to the party which has been put to the expense of defending withdrawn
proceedings, is only warranted in exceptional circumstances.”
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[21] In opposing the second and third respondents’ respective applications for a cost
order, the applican ts advanced the following main reasons in support of their
contention that a cost order should not be granted against them;
21.1 the application was issued on the strength of two directives, one by
Weiner J in the Johannesburg High Court and one by the Deputy Judge
President, Ledwaba J in this division. Both directives stated , according
to the applicants, that the applicants need to apply for a transfer of the
review application in this court;
21.2 the re -issuing of the transfer application in the Johannesburg High Court
involved the use of the same founding affidavit than the affidavit filed in
the abortive transfer application in this division;
21.3 the applicants are effectively representative or notional applicants,
representing the investors in class action type litigation and a cost order
against them personally would probably scupper not only the review
application, but also the class action claims of the investors;
[22] The question then arises whether any of the grounds advanced on behalf of the
applicants constitute “exceptional circumstances”. In respect of the first ground,
directives issued during the case management of a matter do not exempt a
party from complying with the provisions of the Superior Courts Act. Any notion
to the contrary is ill -conceived and opportunistic to say the least.
[23] Secondly, the fact that the same founding affidavit was used in the
Johannesburg High Court transfer application is of no relevance when a cost
order in an application issued in this division is considered. This ground is
similarly devoid of any merit.
[24] Lastly, the applicants point out that they represent 18 300 investors who do not
have the means to litigate in their personal capacities. Any cost order made at
this stage will in essence deprive the applicants from any chance to recover
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their hard -earned money that they in good faith invested in the Highveld
Companies. Although I have sympathy for the unfortunate fate that has befallen
the applicants, the launching of ill -fated applications cannot be countenanced
by the court.
[25] Furthermore, the mere fact that th e applicants are not in a position to finance
the litigation is in itself not a bar against the issuing a cost order against them.
[See: Affordable Medicines Trust and Others v Minister of Health and Others
2006 (3) SA 247 CC at para 139 and Biowatch Trust v Registrar, Genetic
Resources and Others 2009 (6) SA 232 (CC) at para 18.] As such, this ground
of opposition does not constitute exceptional circumstances insofar as a cost
order in terms of rule 41(1)(c) is concerned .
[26] In the result, the second and third respondents is entitled to their respective
cost orders. I do not deem the applicants’ conduct as deserving of a punitive
cost order.
ORDER
The following order is granted:
1. The applicants are ordered to pay the second respondent’s costs in the Urgent
application for removal dated 17 November 2022, jointly and severally, the one
paying the other to be absolved, such costs to include the costs consequent
upon the employment of two counsel.
2. The applicants are ordered to pay the third respondent’s costs in the Urgent
application for removal dated 17 November 2022, jointly and severally, the one
paying the other to be absolved.
3. Costs of counsel on scale B.