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Summary: Rule 18(1) of the Uniform Rules of Court - Attorney bestowed with Right of
Appearance in the High Court is not required to sign the pleadings twice – Previous
Judgment s not followed.
JUDGMENT
NOKO, J
Introduction
[1] There are several applications between the parties . The parties agreed that the following
applications1 should be co mmenced with, first, the adjudication of the status of the plaintiffs’
action under the above case number. Second ly, plaintiffs’ application in terms of Rule 30 of
the Uniform Rule of Court . Thirdly, two applications for leave to amend the defendants’ plea.
For ease of reference the parties are referred to as they are in the main action.
[2] The parties sought an audience with the Deputy Judge President to refer the matter to
the Commercial Court, which referral was permitted and the matter accordingly allocated. A
meeting was scheduled with all the parties during which it was stated that seve ral dates had
been allocated for different applications launched by the parties. Having identified the
applications to be adjudicated first (as stated above) I then issued a directive that heads of
argument must be filed on 13 December 2024.
[3] In addition to their heads of argument, the defendants delivered a rectified plea2 which
is signed twice by their attorney and condonation for the late filing thereof. The defendants
further delivered a replying affidavit in respect of the second application for the amendment of
the plea.
1 Other applications excluding those serving before me include application for summary judgment, exception and
application for consolidation of two actions instituted by the plaintiffs.
2 The plaintiffs have stated in their Rule 30 Notice that the plea delivered by the Defendants w as defective as it
was not signed twice by the attorney who only signed once as an attorney having right of Appearance in the High
Court and not also as attorney of record as contemplated in terms of Rule 18 of the Uniform Rules of Court.
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[4] The plaintiffs , in turn , delivered an application to strike out the application for
amendment , arguing that the original plea was pro non scripto , as the service of a rectified plea
constituted an admission or acknowledgement by the defendants that the ir initial plea was
defective. Further more, the plaintiffs contended that, since the defendants were under bar when
the defective plea was delivered , the service of the rectified plea had to be preceded by an
application for the upliftment of the bar in terms of Rule 27 of t he Uniform Rules of Court .
The p laintiff s also sought condonation for the short service of the application to strike out.
Background
[5] The background set out below is largely common cause between the parties . The said
background has not been comprehensively chronic led in this judgment instead it h as been
truncated for the purposes of the interlocutory applications serving before me .
[6] At all relevant times , the second plaintiff was the sole director of KNS Construction
(Pty) Ltd (“KNS ”), which was appointed as the main contractor for a development project by
a partnership called Genesis on Fairmont Joint Venture Partnership (“Genesis”) . A dispute
arose between KNS and Genesis , which was referred to arbitration. Genesis required KNS to
provide security for costs before proceedings with arbitration and then approached the Court
and obtained an orde r to that effect which was granted on 28 November 2 012.
[7] In the meantime , KNS was placed under liquidation , with the liquidation order taking
effect from 8 October 2013. Mr CF De Wet was appointed as a liquidator , together with the
second and third defendants . Following, Mr CF De Wet ’s passing in 2017 , Gert Louwrens
Steyn De Wet was appointed in his stead on 30 January 2018.
[8] The second plaintiff undertook to provide the requisite security in the sum of
R1 million , which w ould be paid and be held in a trust account3 held by the liquidators’
attorneys, Senekal Simmonds Inc (fourth defendant) . A separate interest -bearing account
would be opened to hold these funds . The attorneys would issue a guarantee for the arbitration
costs , which would be payable only once the arbitration proceedings had been completed and
3 The decision to pay the funds into a trust account followed the rejection of a Nedbank Guarantee by the attorneys
acting for Genesis.
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the costs taxed. The remaining balance would be refunded to the plaintiffs.4 To this end , an
agreement titled “Agreement as to Security for Costs”5 was entered into on 8 November 2013
between plaintiffs and the first to third defendant s.
[9] The fourth defendant accepted the mandate to represent the liquidators in the arbitra tion
proceedings on a contingency basis and entered into a contingency fee agreement with the m
on 26 November 2013 . The liquidators and the plaintiffs entered into a further agreement , titled
“Bridging Finance Agreement ”, on 14 June 2014 , to provide funding for expenses incurred by
the fourth defendant for services to be rendered . The refund of the payment s made under the
Bridging Finance Agreement was to be effected from the sum collected by the liquidators from
the debtors of the estate of KNS ( in liquidation ).
[10] In 2016 , the parties agreed on repayment conditions , which were confirmed in t he
plaintiffs ’ email dated 12 January 2016 , attached to the plaintiffs ’ particulars of claim and
marked PoC 24 -1. The email specifically stated that “…loan and costs will be returned either
through the attainment of a successful lodgement of the Mutual and Federal matter (aqua)
and/or by the release of the guarantee of fees if successful in the Genesis matter whichever is
the soonest.”6
[11] The arbitration process was sta yed as a result of the dissolution of the Genesis on
Fairmont partnership . Vestacor Limited (“Vestacor”) was a partner in Genesis and appears to
have taken over the obligations of the partnership. The liquidators then instituted an action
against Vestacor and judgment by default was granted on 10 October 2019 in the sum of
R27 million . The liquidators also obtained judgment against Mutual and Federal , which was
subsequently set aside on appeal.
[12] The plaintiffs construed the judgment obtained against Vestacor as a success in
arbitration and proceeded to cancel the agreement as to security for costs . The plaintiffs, in
addition, contend that in view of th at judgment , the condition s for the refund , as set out in POC
24-1, have been met and the refund is due and payable. A demand for refund ensued which
4 There is a dispute as to whether such balance may have to be applied elsewhere by the attorneys.
5 The parties subsequently entered into variations which are not relevant for the purposes of this judgment.
6 See plaintiffs’ particulars of claim at CL12 -693.
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was followed by summons being issued against the defendant s. The plaintiffs ’ suit consists of
13 claims against the defendant s, divided into two parts , each having at least three sub-parts.
Part A , predicated on the breach of the Agreement as to Security for Costs, is divided into :
12.1 Part A1 , a claim based on breach of contract and/or success before arbitration ;
12.2 Part A2 , based on delict , alleg ing that the first to third defendants failed to
exercise a duty of care in executing t he agreement with the plaintiffs ;
12.3 Part A3, concerning the misappropriation of tru st funds by the fourth to the
seven th defendants and the inducement of the plaintiffs to enter into a n
agreement .
[13] The claim under Part B related to the Bridging Finance Agreement was also divided
into three sub-parts.
13.1 Part B1 was for the breach of the Bridging Finance Agreement .
13.2 Part B2 is founded on delict emanating from allegations of inducement to
contract . In this regard, it is alleged that the defendants induced the plaintiffs to
provide funding with the promise that they would be refunded from monies
received from debt collect ion.
13.3 Part B3 is based on damages suffered as a result of fourth to seventh defendants ,
while acting for the first to third defendants, breaching a duty of care owed to
the second plaintiff .
[14] The defendants failed to deliver the plea timeously and were served with a notice of bar
by the plaintiffs . The defendants then served a plea dated 22 September 2022 , and in response ,
the plaintiffs delivered an application for summary judgment , which was set down for 13 March
2023 . The defendants filed an affidavit i n opposition to the summary judgment on 3 March
2023 , stating that payment to the plaintiffs would be effected upon a successful judgment in
the Mutual and Federal matter (aqua) and/or by the release of the guarantee for fee s if
successful in the Genesis matter , whichever occurs first . The successful judgment obtained
against Mutual and Federal by the defendants was set aside on appeal ; therefore, no successful
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judgment would ever be attained.7 The arbitration was stayed due to the dissolution of the
Genesis partnership . The judgment obtained by default against Vestacor was rescinded , and
the legal proceedings against Vestacor were dismissed.8
[15] On 6 July 2023 , just before the hearing date for the summary judgment , the defendants
delivered a notice of intention to amend their plea , in which i t was indicated that the cond itions
set out for payment had not been met and would never be met , as the default judgment granted
against Vestacor was rescinded and the appeal in the Mutual and Federal matter had been
dismissed.
[16] The plaintiffs then launched t he second action under case number 2023/132503 based
on the new information discovered in July 2023 after the permission to access the documents
under case number 30238/2019 . The defendants lodged a further notice of intention to amend
their plea on 11 April 202 4, adding a special plea of waiver , contending that some paragraphs
in the second action cannot co -exist with those set out in the first action , and that the first action
should be considered or deemed abandoned .
[17] The plaintiffs opposed both notices of intention to amend , and the defendants launched
application s for leave to amend , which are now serving before me .
[18] In view of the foregoing , the issues to be adjudicated upon would be as follows:
18.1 The defendants' application for the condonation for the late delivery of the
rectified plea ;
18.2 The defendants’ delivery of the replying affidavit in the second application to
amend ;
18.3 The plaintiffs’ application to strike out ;
18.4 The application to determine the status/waiver of the first action ; and lastly
18.5 The defendants’ application s for the amendment.
7 See CL 12 -694.
8 See CL 12 -694 at para 47.
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Submissions by the parties
Condonation for the late delivery of the rectified plea
[19] The defendants contended that the application for condonation is provisional and must
be determined if the court conclude s that the defendants’ plea, dated 26 September 2022 , is
indeed defective due to the failure to have it si gned twice by the attorney as required by Rule
18(1) of the Uniform Ru les of Court . The defendants contended that they only became aware
on 11 November 2024 that the plaintiffs were asserting the plea to be defective for this reason .
The defendants submitted that Fortune ,9 as referred to by the plaintiff s, is not applicable in this
Division , and that the binding authority is the judgment in Forensic Data Analys ts (Pty) (Ltd),10
where the Court held that the rules do not require the attorney to sign twice .
[20] In the alternative , the argument continued, the plaintiffs should be deemed to have
condoned the non -compliance with Rule 18(1) since they took further steps after the plea was
served.
[21] The plaintiffs submitted that the judgment in Forensic Data Analys ts (Pty) Ltd is
distinguishable as the summons in that case was signed by an advocate , not the attorney . The
plaintiffs’ counsel persisted that the Court should , therefore , follow the judgment in Fortune .
[22] Furthermore , the steps take n in instituting the summary judgment application including
the notice to oppose the application for leave to amend and the subsequent pleadings exchanged
should not be construed as step s forward .
[23] I had regard to the provisions of Rule 18(1) and it requires that pleading s be signed by
the party alternatively by the advocate and the attorney , or an attorney bestowed with a Right
of Appearance in the High Court as contemplated in section 25(3) of the Legal Practice Act 28
of 2014 .11 Non-compliance may be considered irregular ,12 and the guilty party may approach
9 Fortune v Fortune 1996 (2) SA 550 (C). This judgment was also referred to with approval in Mzontsundu
Trading (Pty) Ltd and Another v Lavelikhwezi Investments (Pty) Ltd and Another [2021] ZAECMHC 44.
10 State Information Technology Agency SOC Ltd v Forensic Data Analysts (Pty) (Ltd) [2023] ZAGPPHC 1159.
11 A combined summons must be signed by an advocate and attorney, alternatively in the case of an attorney with
right of appearance in the High Court, (S upreme Court of Appeal or the Constitutional Court), only by such
attorney .
12 See Rule 18(12) of the Uniform Rules of Court.
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the Court in terms of R ule 27(3) for condonation , while the innocent party may bring an
application in terms of Rule 30.
[24] It is noted that t he essence of the provision s of Rule 18(1) is to ensure that , where a
litigant is represented in the High Court , the pleadings must be signed by an advocate and an
attorney in instances where the latter has no Right of Appearance in the High Court. However,
where such an attorney has the Right of Appearance in the High Court , only the attorney s hould
sign. There is no requirement for two signatures if the attorney has Right of Appearance. Th e
decision in Fortune , which was quoted with approval in Mzontsundu Trading (Pty) Ltd ,13
appear not to derive its foundation from Rule 18(1) of the Uniform Rules of Court , as the latter
is specific that two signatures are required only where the attorney has no Right of Appearance
in the High Court , in which case the attorney must sign t ogether with an advocate .
[25] In this case, the attorney who has the Right of Appearance has signed the pleadings on
behalf of the defendants. Deferring to the findings in Fortune would be to place undue emphasis
on formality over substance. The converse would be true if the attorney acting for the party is
not the same attorney who is signing in terms of his/her Right of Appearance in the High Court.
To the exten t that Fortune insinuates that the requirement for two signatures may be derive d
from Rule 18(1) , appears to be incorrect.14 Accordingly, the contention that the absence of the
second signature is a fatal defect is unsustainable and is bound to fail.
[26] Even if the above finding is found wanting , the defendants correctly contended that the
plaintiffs ’ conduct — namely , launching an application for summary judgment — constitutes
a step that advances the matter to ward finality. “A further step in the cause is some act which
advances the proceedings one stage near completion”. Once application for summary judgment
13 n 10 above.
14 In any event the decision in Fortune was delivered before the amendment of the subrule which took effect from
1 July 1996. See commentary in Erasmus, Superior Court Practice , at D1 Rule 18 -6. See also Harms, Civil
Procedure in the Superior Court s, “Rule 18 as amended as from 1 July 1996. This amendment supersedes Fortune
v Fortuine 1996 (2) SA 550 (C), [1996] 2 All SA 128 (C) which sets out the Cape Practice”. See also Binns -Ward J
in Absa Bank Ltd v Barinor New Business Venture (Pty) Ltd 2011 (6) SA 225 at para 13 where he stated that :
“Prior to the substitution of rule 18(1) of the Uniform Rules that gave rise to the oddity that attorneys exercising
the rights conferred by s 3(4) of the Act had to sign the pleading twice , once in discharge of the prescribed function
of the advocate and again in discharge of the prescribed function of the attorney – see Fortune v Fortune 1996 (2)
SA 550 (C); [1996] 2 All 128 ”.
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is adjudicated and an order is granted , the litigation effectively conclude d, with the issuance of
the application for summary judgment marking a further step toward finality.
[27] Conversely , a summary judgement application can only be launched where a n effective
plea has been delivered . The plaintiffs accepted and condoned the alleged defect in the plea
and instituted the summary judgment application. Accordingly, the contention that the plea is
defective remains unsustainable.
[28] In the premises , I conclude that the plea was not defective ; consequently, the defendants
were not required to have filed the plea signed twice by the attorney , nor was the application
for condonation required.
Application to s trike out .
[29] The plaintiffs ’ application to strike out is based on the contention that the plea served
on 26 December 20 24 should be struck out . Further , that the application for condonation for
non-compliance with Rule 28(4) served on 20 December 2024 be struck out .
[30] The plaintiffs contend that the directive I issued expressly set out the documents to be
delivered on 20 December 2024 , as indicated in the case management directi ve of
26 November 2024 and during the subsequent meeting on 13 December 2024 . The directive
referred specifically to the heads of argument for (i) the application for leave to ame nd dated
31 March 2023 , (ii) the application for leave to amend dated 11 April 2024 , and (iii) the point
of law concerning the status of the first action under case number 009661/2022 .
[31] The p laintiffs contend that the defendants ’ affidavit , delivered without a request for
condonation , and the accompanying documents, which were served in breach of the
Commercial Court’s directives, should be struck out.
[32] The purpose s of referring matters to the C ommercial Court includes the expeditious
finalisation of disputes . The presiding judge has the power to make decisions with due regard
to speed, cost -effectiveness, fairness, and legal acuity , without blind allegiance to formalis m.
The non -compliance with the directives did not prejudice any of the parties , particularly since
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both parties requested condonation for non -compli ance with the rules. To this end , the
application to strike out is bound to fail .
[33] The plaintiffs’ second reason for the application to strike out is based on the contention
that the delivery of a rectified plea by the defendants constitutes an acknowledgment that the
plea delivered on 26 September 20 22 was defective and therefore pro non scripto . Accordingly,
since that plea was delivered after the notice of bar was served , the defendants were under bar
and had to apply for the upliftment of the bar before serving a rectified plea. In view of my
finding above , the plea served on 26 September 2022 is not defective and the defendants did
not need to serve a rectified plea and/or seek condonation.
[34] The plaintiffs further contend that the request for con donation for serving the
application for leave to amend on 4 April 2023 should be dismissed . In this regard, the
defendant s submit ted that the last day to serve the application for leave to amend was 31 March
2023. The application was finalised and uploaded on CaseLines on that date, and proof thereof
was attached. However, i t only became apparent to them on 4 April 2024 that the application
had not been served on the plaintiffs , whereupon the defendants immediately proceeded to
serve it. The defendants further submitted that, once documents are uploaded to CaseLines, all
participating parties receive notification. Since the plaintiffs had been invited to CaseLines,
they would have received notification of the uploaded notice. Accordingly, no prejudice was
suffered by the plaintiffs . Moreover, t he delay and any attendant prejudice , if any , were never
raised as an irregular step by the plaintiffs , who proceeded to serve their answering affidavit .
[35] The delay was not inordinate , and no prejudice was suffered by the plaintiffs. I therefore
concluded that t he delay should be condoned.
[36] The plaintiffs further conten d that condonation for the late service of the replying
affidavit in relation to the second application for leave to amend should be struck . I have found
below that the first action is partly abandoned , accordingly, t his issue attracts a debate of no
practical value .
[37] In view of my finding above , the application to strike out is incompetent.
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Status/waiver /abandon ment
[38] The parties raised a point of law by agreement requiring the Court to determine the
status of the first action . The defendants contend ed that, after the plaintiffs launched the second
action under case number 2023 -123503 , it became apparent that both actions could not co-
exist . Reference was made to certain paragraphs in the second action , in which the plaintiffs
indirectly acknowledged that the first action had been abandoned.
[39] The plaintiffs assert that it was never their intention to withdraw or abandon the first
action. However, they concede that of the 13 claims filed against the defendants , only 5 are
affected by the non-payment and cancellation of the agreement or the success in arbitration.
The remaining claims do not depend on the rescission of the judgment obtained by the
liquidators against Vestacor and can be adjudicated independently. These claims are based on
misappropriation of trust funds , delict and inducement to enter into the contract . The claims
linked to the success or conditions of arbitration remain ex tant solely for the purpose of costs.
[40] The plaintiffs stated in the heads of argument that “… claims in the causes of actions
to Parts A1, A2, B1 and B2 of the particulars of claim are now stillborn as they relate to breach
for non -payment…”.15 Further that t he claim s which are based on the misappropriation of
funds , delict and inducement to enter into the agreement , should remain intact and will proceed.
[41] The defendants did not vigorously contest the assertion that not all claims were
abandoned when the Court inquired whether defendants accept the plaintiffs’ concession that
only limited claims are implicated meant that those would not be proceeded with. Accordingly,
I conclude that the claims based on non-payment and/or success o f arbitration have been
abandoned , as stated by the plaintiffs , except that the parties will argue costs at a later stage.
[42] Accordingly, the contention that all the claims have been waived is unsustainable , as
the claims based on delict, misappropriation of funds , and inducement to contract can co -exist
with claims under the plaintiffs’ second action .
15 See para 197.2 of the plaintiffs’ heads of argument. The plaintiffs further stated at para 197.3 that “… the prayers
2 to 7 and 9, with those of 3 and 4 only in part, are now moot, as they relate to the claims for non -payment to the
security as to costs ag reement…”.
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Leave to Amend
[43] It is trite that any party may amend a pleading or document at any stage before the
judgment,16 and a party may object by clearly and concisely setting out the grounds upon which
the objection is based.17
[44] The defendant s contended that they have noted some aspects in their plea requiring
clarification of confusion or conflict and have therefore delivered a notice to amend. The
defendants ’ counsel submitted that there were no withdrawals of admissions , as alleged by the
plaintiffs. These were clearly explained , argument continued, in a letter forwarded to the
opponents , which was attached to the founding affidavit supporting the application s for leave
to amend , marked FA 3.
[45] In opposing the application for amendment , the plaintiffs contended that the propose d
amendment s fall foul of the law , as it include s the withdrawal of admissions . They further argue
that, once the amendments are allowed , the plea would be susceptible to exception and that
contradictions would arise .
[46] It should be noted that since the claims premised on non -payment and success in
arbitration (abandoned claims) are abandoned , any proposed amendment by the defendant s or
any objection to the amendment which I find to be linked to the abandoned claims deserves no
further attention or consideration . Such that e ven if leave is granted or the objection is
sustained , no purpose would be served in giving effect thereto , except that it may be relevant
for arguments reg arding the costs of the abandoned claims .
[47] The bases of the plaintiffs’ objections are addressed hereunder , ad seriatim . It is noted
that the defendants , upon realising that their notice to amend did not include an offer for costs
occasioned by the intended amendment , proceed ed to tender same. As such , where the
objection was based on the lack of an offer for costs in the notice of the inten tion to amend , it
will not be considered .
16 Rule 28(1) of the Uniform Rules of Court.
17 Id.
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[48] Paragraph 13.5.6 of the plea reads as follows :
“[A]ny funds of t he securities remaining after the taxation of costs were to be returned with the
taxed amount being held in trust. ”
The intended amendment reads as follows:
“Repayment of the security funds advanced as well as any loans advanced were subject to the
following: ‘we confirm that the loans and costs will be returned either th rough the attainment
of a successful judgment of the Mutual and Federal matter (aq ua) and /or part by the release of
the guarantee for fees if successful in the Genesis matter, whichever is the soonest. ’”
[49] The proposed amendment aligns with the plaintiffs’ email marked POC 24 (“the
email”) which set s out the conditions for repayment . Accordingly, the objection is
unsustainable. To the extent that these conditions are not correctly interpreted , that would be a
matter for evidence.
[50] The second reason for the objection was that the amendment would cause an injustice
that cannot be remedied by an order for costs. However, t he basis of this objection is unclear
and may only be fully developed during evidence . Ex facie the proposed amendment , there is
no apparent prejudice , and as mentioned above , its essence aligns with the plaintiffs’ email
referred to above . Since the amendment does not cause any prejudice to the plaintiff s, this
objection need not be entertained further.
[51] A further contention that the intended amendment would prejudice the plaintiffs in their
summary judgment application is unsustainable , as the plaintiff s would not ordinarily be
precluded from supplement ing the summary judgment application18 or withdraw ing and
submit ting a fresh application in light of the amended plea. Furthermore, the costs associated
with the amendment have been tendered .
18 The defendants stated that, at the time the summary judgment application was postponed, it was their
understanding that the plaintiffs would be entitled to supplement their papers.
14
[52] The contention that the defendant s were aware of the facts at the time of the plea cannot
constitute a valid objection absent cogent su bstantiation. A party may amend its papers at any
time before judgment, pr ovided there is proper motivation and a tender for costs .
[53] The tenor of the proposed amendment and the accompanying objection is undermined
by the concession that claims based on non -payment and success in arbitration will not be
pursued .
[54] Paragraph 13.5.7 of the plea reads as follows:
“[O]n the ruling of the arbitrat or in the arbitration in respect of cost s, the security funds will
either be used for t axed costs orders to the extent that the finding was in favour of Genesis or
returned if the finding was in favour of KNS. ”
The intended amendment reads as follows:
“A successful judgement whether in the Mutual and Federal matter or in the Genesis matter
was not and cannot be attained. In the circumstances, the amounts advanced by the plaintiffs
are not payable. ”
[55] In their letter (marked FA3) , the defendant s stated that clarification was necessary,
rendering the objection unsustainable . In any event , it is common knowledge among all parties
that the KNS arbitration was not successful ly completed . There is , therefore , no prejudice to
the plaintiff s. The other reasons I set out regarding the objection to the amendment of para
13.5.6 remain applicable.
[56] The objection is also unsusta inable when considered alongside the plaintiffs’ email,
which clearly sets out the conditions precedent to the payments due to them . In any event , both
the p roposed amendment and the objection are affected by the concession that certain claims
will no longer be pursued.
[57] Paragraph 13.8 of the plea states that:
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“The defendants deny that any funds provided to KNS as securities by the plaintiffs have
become repa yable in th at the funds s ecurities have to be utilised to pay tax ed cost orders given
against KNS in the arbitration. In such an event only any balance left in respect of the funds
advanced (if any ) would become repayable. ”
The intended amendment reads as follows:
“The defendants deny that any funds provided to K NS whether as security or loans, have
become repayable. ”
[58] The defendants have denied that the fu nds are refundable and provided reason s for this
in the ir plea whereas the proposed amendment does not include any such reason . According to
the conditions set out in the letter , the defendants appear to suggest that these condition s have
not been met.
[59] The objection is unsustainable , as the proposed amendment seek s to clarify that the
conditions for repayment have not been met. Furthermore, the proposed amendment is affected
by the abandonment of certain claims.
[60] Paragraph 14.3 of the plea provides:
“Despite a successful judgement having been obtained as suggested in this paragraph, all tax ed
costs incurred an d all payment s to be made in terms of suretyships provided by the directors of
the fourth defendant , had to be covered before repayment of the security funds. ”
The intended amendment reads as follows:
“KNS failed to obtain successful judgement as suggested in this paragraph , KNS obtained a
judgement by default against an entity known as Vest acor Limited (in liquidation ) in the above
Honourable Court and not in an arbitration . This judgement was , however , rescinded and it is
not ext ant.”
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[61] The explanation provided was that the amendment aimed to correct an error , namely
the statement that a successful judgment had been obtained , which was inaccurate since the
judgment was ultimately rescinded . There appears to be no prejudic e to the plaintiffs.
[62] Additionally, both parties are aware that the default judgment was rescinded , and the
plaintiffs have conceded that claims based on the existence of the default judgment are bad in
law as the judgment was rescinded .
[63] Paragraph 15.1 of the plea states that:
“The defendants deny that a successful judgement was issued , whether in the arbitration or by
the High Court of South Africa, Gauteng Division, Johannesburg. ”
The intended amendment reads as follows:
“The defendants deny that a successful judgement was issued, whether in the arbitration or by
the High Court of South Africa, Gauteng Division, Johannesburg . The defendants repeat the
allegations set out in paragraph 14.3 above .” (Own emphasis.)
[64] There is no prejudice in this proposed amendment , considering I have already found
nothing untoward in the suggested amendment. Furthermore, the concession regarding the
waiver of claims based on non-payment renders the related contentions academic.
[65] Paragraph 15.4 of the provides:
“The defendants den y that they repudiated the security for costs agreement and that the
plaintiffs were entitled to cancel the a greement .”
The intended amendment reads as follows:
“The first to third defendants deny that they rep udiated the security for costs agreement and
that the plaintiffs were entitled to cancel the agreement with KNS. ”
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[66] There appears to be no admission being withdrawn , and no prejudice to the plaintiffs is
apparent. The amendment seeks to clarify the parties to the agreement . It should be easy to
prove whether the fourth defendant concluded the agreement , unless the plaintiffs contend
otherwise . There is n othing specific in the notice of objection. A concession on the waiver of
other claims may be applicable here.
[67] The defendants seek to add the following paragraph as paragraph 15.5:
“The defendants deny that the plaintiffs concluded any funding agreement with the fourth
defendant. ”
[68] As with paragraph 15.4, the defendants contend that the fourth defendant did not
contract with the plaintiffs. There is no evidence of prejudice that cannot be addressed by an
order of costs .
[69] The defendants seek to add the following paragraph as paragraph 15.6:
“The defendants plead that the plaintiffs acted in breach of the security funding agreement with
KNS in that it failed to continue to fund or provide security for costs of the arbitration between
KNS and Genesis. ”
[70] The addition causes no harm , and the other reasons advanced in the proposed
amendment are applicable here . This has been rejected by the plaintiffs and will therefore be a
matter for evidence.
[71] The defendants seek to insert the following paragraph as a new paragraph 16.2 with the
existing paragraphs being renumbered accordingly:
“The defendants deny that the amount of R500 000.00 was to be kept in trust by the fourth
defendant and plead that this aggregate amount was paid over by the plaintiffs and by the fourth
defendant to defray costs in the arbitration. ”
[72] There are no clear reasons for the objection , and the reasons set out above apply . The
defendants stated that all payment s were made in consultation with the plaintiffs , and this will
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be a matter for evidence to be led at trial. Additionally , the defendants aver that since the
plaintiffs cancelled the agreements , further costs were to be defrayed from available funds in
trust.
[73] The defendants also seek to add the following new paragraph after 16.4, to be numbered
16.5:
“The defendants plead that the amounts of money made available and referred to in
paragraphs 66.4, 66.5 and 66.7 were made available for the purposes of defraying costs in the
arbitration and not to provide security funding. ”
[74] There are no persuasive reason s for objecting to t his proposed amendment , and the
reasons set out above apply . The amount intended for security for the costs was ring-fenced
and totalled R1 million. The fact that this amendment introduces a dispute of facts is not a valid
reason to re fuse the leave to amend.
[75] The defendants seek to add the following new paragraph after 26.1, to be numbered
26.2:
“At all times material hereto the first to third defendants acted in accordance with the
agreements concluded by K NS with the plaintiffs. ”
[76] No persuasive reasons have been provided to object to this intended amendment.
[77] The defendants seek to add the following new paragraph after 27.1, to be numbered
27.2:
“At all material times hereto the first to third defendants acted in accordance with the
agreements concluded by KNS with the plaintiffs. ”
[78] No persuasive reasons have been provided to justify t he objection to this proposed
amendment. The suggested amendment is also related to the concession of waiver regarding
claims based on non -payment and success in arbitration.
19
[79] The defendants seek to add the following new paragraph after 29.2, to be numbered
29.3:
“At all times material hereto, KNS, and not the plaintiffs, was the client of the fourth
respondent. ”
[80] No persuasive reasons have been provided to object to this intended amendment.
[81] The defendants seek to add the following new paragraph s after 3 0.13 and 33.1, to be
numbered 30.14 and 33.2 , respectively:
“The defendants deny, specifically, that annexure “POC29 ” constitute s a correct reconciliation
and put the plaintiffs to the proof thereof. ”
…
“The defendants deny that any amount related to the funding provided by the plaintiffs is due,
owing and payable to the plaintiffs. ”
[82] No specific reasons have been provided to object t o this intended amendment. The
defendants ’ case appe ars to be that the refund to the plaintiffs was subject to conditions that
have not been met . This understanding of the conditions aligns with the email from the
plaintiffs outlining when payments would be made.
[83] The defendants seek to add the following new paragraph after 36.2, to be numbered
36.3:
“The defendants plead that the conditions stipulated in the agreement of 12 /13 January 2016
are applicable to the bridging finance agreement. Accordingly, no repayment is due or owing
without compliance with those conditions.”
20
[84] The effect of the amendment is not intended t o frustrate the object of the claim based
on the misappropriation of funds of the section 86(4) trust account. This may not be a valid
ground for objecti on, as the defendants may raise any defence and will be required to prove
same at the hearing of the matter . The fact that the plaintiffs may lose the case if the ame ndment
is allowed is of no moment , as the defendants ’ defence is any way aimed at defeat ing the
plaintiffs’ claim .
[85] Other aspects of the plaintiffs’ heads of argument refer to the following as grounds for
their contention that the proposed amendments should not be granted :
Excipiab ility of the plea
[86] The amendments would be excipiable as they introduce contradictions and vagueness
if leave to amend is granted. No basis has been pleaded to support the contention that
contradictions would arise if the amendment were allowed. In any event , an exception will be
upheld where it disposes of the whole or part of the pleading. As mentioned above , the
concession of waiver permeates most of the plaintiffs’ objections , and these objections would
become academic in claims based on the agreements between the parties.
Trust account
[87] The amendment , which allows the funds in trust to be applied to arbitrators ’ fees
without proper authority , it is argued, is intended to frustrate the claim based on the
misappropriation of trust funds , now part of the summary judgment application . If allowed,
this amendment would be excipiable on the grounds of being vague , embarra ssing, and
contradictory to the existing plea , where such terms were acknowledged. The objection is
undermined by defendants’ allegations that payment s were made after consul tations with the
plaintiffs and as a result of breach es of the agreement between the parties . Therefore, the matter
would be one for evidence to prove.
21
Contradictions.
[88] The plaintiffs further contend that a contradiction would arise if the amendment
regarding the correct date of rescission is allowed. This argument is based on the assertion that
the defendants have failed to amend para graph 15.2 of the plea , which still refers to the alleged
incorrect date of 14 January 2022 , instead of 21 July 2021. However, a s stated above , the
plaintiffs have acknowledged the correct date and conceded that the claims are bad in law ,
meaning that the issues concerning the rescission date and its impact on specific claims are no
longer live issues . Therefore, this contention serves no purpose , and in any event, it is not linked
to any averments in the plea targeted by the not ice of intention to amend .
Prejudice not capable to compensa tion by costs order.
[89] The defend ants have stated that success was achieved , and as explained in the affidavit
resisting summary judgment and in the annexures to the notice of amend ment, the position has
changed in light of the court orders in the Genesis and Mutual and Federal matter s. The
defendants aver that the case s had reached their conclusion, and that litigation came to an end.
If this is indeed the case, it will need to be proved at trial, and it may serve as a valid defence
to the plaintiffs’ claim.
[90] The plaintiffs should be entitled to the costs associated with the amendments and any
prejudice suffered as a result of the amendment s, once liability is prove n and quantified. The
amendment cannot be rejected on the basis that it would defeat the plaintiffs’ claim , including
the possible success in the summary judgment application .19 Any damages arising from the
amendment that cannot be compensated by an order of costs should be eligible for
compensation once liability and quantum are prove n. This should also cover damages resulting
from the cancellation of the agreement concerning security for costs , following the defendants ’
19 The plaintiff averred that defendant’s assertion that the success resulting from the judgment against Vestacor
does not constitute success for the purposes of the Genesis arbitration raises a dispute of fact , which may frustrate
the granting of a summary judgment against the defendant. Further more, the cancellation of the agreement on
15 August 20 21, prior to the rescission on 14 January 2022 , should be considered valid . If this is altered through
the amendment, no cost order would sufficiently compensate for the prejudice suffered or to be suffered by the
plaintiffs.
22
misstatement that the judgment meant to trigger payment had been rescinded. In any event , the
plaintiffs have already sought a declaratory order for the loss suffered due to the misstatement.
Hearsay evidence
[91] The plaintiffs contend that Annexure FA3, attached to the application for leave to
amend , constitute s hearsay evidence due to the lack of confirmation from the author . However,
the content of the email is intended to explain the essence of the proposed amendment in
response to the plaintiffs’ notice of object ion. The email’s contents do not, in and of
themselves, ser ve as evidence for the amendment , but are included solely to elaborate on the
objection s.
[92] The defendants referred to the Constitutional C ourt judgment in Tjiroze v Appeal Board
of the Financial Services Board ,20 where it was stated that prejudice does not refer solely to
the denial of a procedural advantage , but may also include the prospects of success in a matter :
“The sub text is that an amendment will result in him losing that advantage; and that is what
would cause him ‘prejudice ’. That, of course, has never been our law on what constitutes
prejudice of the nature that may result in an amendment being denied . Prejudice that may lead
to the refusal of an amendment is not about the mere loss of procedural advantage or even the
possibility of losing the case itself as a result of the grant of the amendment. The norm is always
to grant an amendment if it will not cause the other si de an injustice that is incapable of being
compensated by an appropriate award of costs .”21
[93] Having addressed the issues in the above paragraphs , any other issue raised is peripheral
and would not tilt the scale in the plaintiffs ’ favour . They therefore deserve not to detain this
Court any further .
20 [2020] ZACC 18; 2021 (1) BCLR 59 (CC).
21 Id at para 26.
23
Conclusion
[94] It follows that the status of the first action is that the claims predicated on
misappro priation of funds , inducement to contract , and delictual claims remain extant , whereas
claims relating to non -payment and the success of arbitration will not be pursued , except for
cost.
[95] The alleged defect in the defendants’ plea dated 26 September 20 22 is unsustainable .
The plea remain s effective , and there was no need to deliver a rectified plea signed twice by
the defendants’ attorney , nor was condonation required for the late filing thereof .
[96] The second application for leave to amend does not merit further attention , as the
finding on the point of law addresses the matter .
Costs
[97] The parties have agreed that the costs should be reserved.
Order
1. It is declared that claims in the first action are abandoned , except for the claim for costs
related thereto and claims predicated on misappropriation of funds, delict , and
inducement to ente r into a contract.
2. It is declared that the defendants’ plea dated 26 September 20 22 is valid and effective.
3. The application for condonation of the defendants’ non-compliance with Rule 28(4) of
the Uniform Rules of Court is granted .
4. Leave to amend the plea dated 31 March 2023 is granted.
5. Leave to amend the plea dated 11 April 202 4 is struck off the roll.
6. The a pplication for condonation for the short service of the application to strike out is
granted.
7. The p laintiffs’ application to strike out is dismissed.
8. Costs are reserved.