SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy


IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)

Reportable
CASE NO : 17111/2021

In the matter between :-

LE BONHEUR WINE ESTATE (PTY) LTD PLAINTIFF

and

STELLENBOSCH VINEYARDS (PTY) LTD DEFENDANT

STEPHANUS JACOBUS NEETHLING FIRST THIRD PARTY

FANIE NEETHLING BEDRYSINGINEUR SECOND THIRD PARTY

Coram : MOOSA AJ
Heard : 2, 4 JUNE 2025
Delivered : 20 JUNE 2025 (delivered electronically to the parties )
Summary : Insurance law – disclosure of subrog ated claims – subrogation
as a separate cause of action – meaning and effect of insurer
stepping into the shoes of an indemnified insured – nature and
extent of the transfer of rights from an indemnified insured to an
insurer – effect o f insurer electing to litigate in an insured ’s name
~ Drc,
'-;• 1~ .,_
- , ,:,:
– indemnified insured terminating the mandate of attorney s
acting for the subrogated insurer’s benefit – insurer disputing the
validity of the termination – rule 16 interpreted and rule 30
discussed
___________________________________________________________________
ORDER
___________________________________________________________________
1. The application by Hollard Insurance Company Ltd (Hollard) is dismissed with
costs, such costs for Plaintiff’s counsel shall be on tariff Scale C .
2. Hollard is, with immediate effect, joined as a co -Plaintiff to the main action.
Hollard will be the ‘Second Plaintiff’ and Le Bonheur Wine Estate the ‘First Plaintiff’.
3. Hollard is granted 30 court days from date of this order to file a notice to
amend the Combined Summons and Particulars of Claim in all necessary respects .
4. Before the lapse of the period referred to in (3) above and pending the
effecting of the amendments envisaged in (3) if notice thereof is given, the main
action may not be withdrawn by La Bonheur or anyone acting on its behalf , nor may
the defendant’s dismissal appli cation and the trial in th e main action be enrolled for
hearing.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
Introduction

[1] This judgment relates to an application by Hollard Insurance Co Ltd ,
registration no. 1952/003004/06 , t/a Hollar Insure (Hollard) represented by Clyde &
Co Inc (Clyde & Co) . The application is against Le Bonheur Wine Estate (Pty) Ltd
(Le Bonheur) . The application raises significant legal questions regarding the inner
workings of the doctrine of subrogation in indemnity insurance litigation .

[2] The trial in the action (the main action) was scheduled to commence on 2
June 2025. On the eve of the trial, the defendant served a substanti al urgent
application . It compris ed 129 pages. Within 24 hours, after opposing and replying
papers were filed, th e pleadings in the urgent application ballooned to more than 200
pages. The defendant , in its notice of motion, sought, inter alia, an order to dismiss
the main action (the dismissal application) . The petition indicated that the defendant
intend ed to enrol the application for hearing immediately before the trial was
scheduled to start on 2 June . Within half an hour of the court’s scheduled
commencement time, a last -minute development occurred. Werksmans Attorneys
(Werksmans) delivered a notice indi cating that it was the plaintiff’s new attorneys of
record (the substitution notice). Hollard and its attorneys, Clyde & Co , objected to
this substitution of attorneys .

[3] Attached to the substitution notice was a resolution signed by Le Bonheur ’s
directors (the directors’ resolution) . Owing to its importance for what happened next
in this matter , I quote its contents in full:

‘RESOLUTION OF THE BOARD OF DIRECTORS OF LE BONHEUR (PTY)
LTD
Adopted on 30 May 2025.

WHEREAS Le Bonheur (Pty) Ltd (“the Company”) is a subsidiary of Advini
South Africa (Pty) Ltd (“Advini SA”) and is currently cited as the plaintiff in
High Court case number 17111/2021 against Stellenbosch Vineyar ds (Pty)
Ltd, the defendant, (“Stellenbosch Vineyards”) also a subsidiary of Advini SA;

AND WHEREAS the Board of Directors of the Company is unanimously of the
view that the claim against Stellenbosch Vineyards has no found ation in law,
and that it should not have been instituted, and that it is contrary to the
interests of the Company, Stellenbosch Vineyards, and the group and of the
companies involved, and in conflict with the agreements concluded between
the parties prior to the fire and currently appli cable, and inconsistent with the
governance and operational principles of Advini SA;

NOW THEREFORE IT IS RESOLVED THAT:
1. The legal proceedings instituted under case number 17111/2021 are
not authorised or supported by the Company, and shall be immediately
withdrawn.
2. Any power of attorney, mandate and/or instruction given to
Clyde & Co Attorney y Hollard Insurance Company Limited (“Hollard”),
purportedly on behalf of the Company, or any other legal
representatives involved in such litigation as i nstructed by Hollard, is
hereby revoked and terminated with immediate effect.
3. Ms Naretha Smit, in her capacity as a director of the Company, is
hereby authorised and mandated to:
3.1 notify Clyde & Co of the Company’s decision recorded in paragraph 2
above;
3.2 appoint Werksmans Attorneys to represent the Company in the action
going forward, and to instruct them to withdraw the action on the basis that
each party shall bear its own costs ;
3.3 do all things necessary to give effect to this resolution.
4. The Board of Dir ectors further resolves that no future intra -group
litigation shall be instituted without the prior written approval of the Board. ’

[4] The directors’ resolution and the substitution notice set the proverbial ‘cat
among the pigeons ’. Needless to say, my court’s start time on 2 June was delayed
as Le Bonheur ’s legal team, Hollard’s l egal team, the defendant’s legal team, and
the third parties’ legal team assessed the situation and attempt ed to reach
consensus on the way forward. Unsurprisingly, th at was a bridge too far for them .
And so , amidst all this, the case was finally called in open court .

[5] At the start of proceedings , Mr Lamplough SC informed me that he appears
for Hollard , acting on instructions from Clyde & Co. He informed me that Hollard ’s
position is that it is the ‘true plaintiff ’ in the main action by virtue of subrogation ,
having fully indemnified Le Bonheur for its damages arising from an insurable event
pursuant to th e terms of an insurance contract. Mr Lamplough further informed me
that Hollard challenges the validity of the termination of Clyde & Co’s mandate and
the appointment of Werksmans by way of the substitution notice . A notice
challenging the latter had, by then, been served on Werksmans in terms of rule 30.
Mr Lamplough also informed me that Hollard oppos es the dismissal application .
Thus, it sought the trial ’s postponement and a hearing of the dismissal application on
the semi -urgent roll of this Division .

[6] Mr de Beer then addressed me . He informed me that he acts for the plaintiff
cited in the pleadings to the main action , namely, Le Bonheur, and that he is acting
on the instruct ions of Werksmans. He further informed me that Le Bonheur
terminat ed Clyde & Co’s mandate to act in the main action in accordance with its
rights in law , and that Werksmans was appointed in its stead . As a result of this , so
he proceeded to say , neither Clyde & Co nor its appointed counsel, namely, Mr
Lamplough, have any authority to appear in the main action any longer . Mr de Beer
stated that Le Bonheur oppose s the trial’s postponement but does not oppose the
dismissal application.

[7] Mr Seale SC , (with A Walters) then addressed me. He confirmed that h e acts
for Stellenbosch Vineyards (Pty) Ltd (Stellenbosch Vineyards) who wishes to
proceed with the dismissal application forthwith . He submitted that the postponement
sought by Mr Lamplough would be costly for all parties and ought to be refused. Mr
Tyler then placed himself on record and informed me that he ha d no further
comments to make .

[8] I expressed my concern to the above cast of advocates that a postponement
of everything , as sought by Hollard , would not only be costly for all parties concerned
but also uneconomical use of scarce judicial resources allocated to a trial scheduled
to proceed over five days . I ruled that the dismissal application would proceed. I also
encouraged Mr Lamplough and Mr de Beer to work together with a view to possibly
enrolling the rule 30 application for hearing on any of the scheduled trial days.

[9] The Court extends its gratitude to all the legal practitioners involved. By
agreement, the hearing of the dismissal application and the rule 30 application were
scheduled for 4 June. Court papers, including heads of argum ent, were filed by 3
June .

[10] I express my thanks to all counsel for their detailed head s. Their submissions
were helpful in its travers ing of key question s arising from the doctrine of
subrogation .

[11] On 4 June, and b y further agreement between the protagonists , the dismissal
application and the trial were postponed sine die with all cost issues being reserved
for later determination . Hence, this judgment only relates to Hollard’s application.

Hollard’s challeng e to the substitution notice

[12] Hollard is not cited as a litigant in the pleadings to the main action . Despite Mr
de Beer’s submission that Hollard lacks standing, I directed that its counsel is
entitled to present Hollard’s application for relief based on Hollard’s contention that,
as a matter of fact and law, it is the ‘true plaintiff ’ in the main action (not Le Bonheur).
As support for my position regarding the procedure and the relaxation of any relevant
court rules in the interests of justice, I rely on the following instructive dicta from Eke
v Parsons 2016 (3) SA 37 (CC) :

‘[39] … Where the interests of justice so dictate, courts may depart from a
strict observance of the rules. That, even where one of the litigants is insistent
that there be adherence to the rules. Not surprisingly, courts have often said
“[i]t is trite that the rules exist for the courts, and not the courts for the rules”.
[40] U nder our constitutional dispensation, the object of court rules is twofold.
The first is to ensure a fair trial or hearing. The second is to “secure the
inexpensive and expeditious completion of litigation and … to further the
administration of justice”. I have already touched on the inherent jurisdiction
vested in the superior courts in South Africa. In terms of this power, the High
Court has always been able to regulate its own proceedings for a number of
reasons, including catering for circumstances no t adequately covered by the
Uniform Rules, and generally ensuring the efficient administration of the
courts’ judicial functions.’ (Footnotes omitted)

[13] In relevant part, Hollard’s notice of motion reads:

‘KINDLY TAKE NOTICE THAT the plaintiff intends to apply on Wednesday 4
June 2025 at 11h00, for the following order:
1 The notice of substitution as attorney of record filed by Werksmans
Attorneys
on 2 June 2025, by means of which Werksmans Attorneys purport to
substitute themselves for Clyde & Co as attorneys of record for the
plaintiff, is set aside as irregular.
2 Additionally or alternatively to the order in 1 above, the notice of
substitution as attorney of record filed by Werksmans Atto rneys on 2
June 2025, by means of which Werksmans Attorneys purport to
substitute themselves for Clyde & Co as attorney for the plaintiff, is
declared to be legally ineffective and to have no juristic force or
consequence.
3 It is declared that Clyde & Co i s the appointed attorney of record for the
plaintiff, and is entitled to prosecute the action under this case number
on the instructions of and for the benefit of Hollard Insurance Company
Limited in the name of the plaintiff.’

[14] Hollard seeks relief under rule 30, alternatively it seeks declaratory relief in its
alleged capacity qua plaintiff suing in Le Bonheur’s name. In support of its
application , Hollard relies , inter alia, on the facts pleaded in its answering affidavit in
the dismissal application. Since Hollard’s petition was opposed by Le Bonheur on
points of law only, no answering papers were filed . Therefore, the facts averred in
Hollard ’s affidavit used in support of its application are common cause as between it
and Le Bonheur .

[15] Although Stellenbosch Vineyards had no direct interest in Hollard’s
application, Mr Seale sought my indulgence . He requested an opportunity to make
submissions which he believed may be helpful to the Court . In keeping with the best
traditions of the Bar and the collegial spirit in which th e matter before me was
argued , both Mr Lamplough and Mr de Beer had no objection to Mr Seale being
indulge d. As a result, Mr Seale made submissions which elicited a short reply from
Mr Lamplough.

Issues arising for adjudication

[16] The application by Hollard raises the following issues for determination:

(a) First, w hether the substitution notice constitutes an irregular step under
rule 30 and falls to be set aside in terms thereof ;
(b) Secondly, and regardless of the outcome in (a) , whether Le Bonheur is, in
law, entitled to file the substitution notice under rule 16 . This depends on
whether Le Bonheur (or Hollard) is the plaintiff ‘party’ in the main action ;
and
(c) Thirdly, and only if the issue in (b) is decided in Le Bonheur’s favour, then
the issue arises whether any substitution of attorneys would be ineffective
by virtue of the common law doctrine of subrogation . This issue requires a
determination of whether that doctrine results in Hollard t aking transfer of
Le Bonheur’s procedural rights in its claim against Stellenbosch Vineyards ,
thereby granting only Hollard ( not Le Bonheur ) the authority to appoint
attorneys to act in the main action and to terminate their mandate to act .

[17] Each of these issues is discussed below. To do so requires a narration of the
salient common cause facts . These are distilled from Le Bonheur’s summons in the
main action and from Hollard’s answering affidavit in the dismissal application.

Relevant facts for adjudication of Hollard’s challenge to the substitution notice

[18] On or about 11 January 2017, a written warehousing storage and services
agreement (the warehousing agreement) was concluded between Le Bonheur and
Stelle nbosch Vineyards . In accordance with th at agreement, Le Bonheur took
occupation of certain commercial p remises owned by Stellenbosch Vineyards
located at Welmoed Winery, R310 Lynedoch/Baden Powell Drive in the district of
Stellenbosch. On 23 October 2018, and while Le Bonheur’s goods were being stored
at these premises for reward , a fire broke out which caused Le Bonheur to suffer a
loss of its inventory. The value of its loss es caused by , and/or associated with , the
fire was quantified to be R12 643 936,05. These damages form the subject of the
lawsuit in the main action against Stellenbosch Vineyards .

[19] At all material times to the fire occurring at the defendant’s warehouse, a
contract of insurance existed between Le Bonheur and Hollard with policy no. S[...]
(the insurance policy). Pursuant to its loss of inventory in the fire, which loss was
covered by the insurance policy, Le Bonheur lodged an insurance claim with
reference S[...]2 . Hollard indemnified Le Bonheur fully for its losses.

[20] In 2020, Clyde & Co were appointed by Hollard for purposes of investigating
the merits of a claim against the third -party wrongdoer . To that end, on 20 October
2020, Clyde & Co sent an email to Le Bonheur requesting some information. These
were provided by Le Bonheur. In that email, the following was written by Clyde & Co :

‘We confirm that we act on behalf of your insurer, Hollard Insurance Company
Ltd ( our client ) in considering a potential recovery in the names of L’ Avenir
Wine Estate and Le Bonheur Wine Estate ( you) against Stellenbosch
Vineyards (Pty) Ltd ( Stellenbosch Vineyards ) and/or Quality Bottling
Services ( QBS) in respect of a devastating fire that occurred at Stellenbosch
Vineyards’ premises on the morning of the 23 October 2018 ( the fire ).
You lodged claims with our client for losses under your respective insurance
policy and ou r client, in terms of an agreement of loss, indemnified you in the
amounts of R4 681 194.00 and R12 643 936.05 respectively.
Our client now seeks to recover these amounts from Stellenbosch Vineyards
and/or QBS by virtue of the doctrine of subrogation. In a n insurance context,
an insurer who has indemnified an insured is entitled to claim, in the name of
the insured (i.e. you), from the wrongdoer (i.e. Stellenbosch Vineyards or
QBS) and in essence entails the insurer stepping into the shoes of the insured
against the wrongdoer. …’ (Emphasis added)

[21] On 2 3 June 2021, and following the conclusion of its inquiry, Clyde & Co
issued a letter of demand to Stellenbosch Vineyards demanding payment of
R12 643 936,05 to ‘compensate our client for its loss’ . The letter of demand inform ed
the addressee in paragraph 1 that Clyde & Co ‘act for Le Bonheur Wine Estate (Pty)
Ltd ( our client )’. Paragraph 12 read: ‘Our client holds you liable for the loss it
sustained.’ The final paragraph read: ‘Our client’s rights are reserved.’ Accordingly , I
find that, at that time, Clyde & Co acted for two principals with aligned interests :
Hollard and Le Bonheur.

[22] I pause to mention that, despite paragraph 16 of the letter of demand calling
upon Stellenbosch Vineyards to forward the letter to its insurers ‘if you are insured’,
the letter of demand (and the subsequen t summons) made no mention of the
following : (i) Le Bonheur was insured for the losses suffered ; (ii) Le Bonheur had
been indemnified by its insurer ; (iii) Le Bonheur’s claim was subrogated in favour of
its insurer ; and (iv) the insurer of Le Bonheur is seeking a re imbursement pursuant to
its right of subrogation and that the claim against Stellenbosch Vineyards is being
pursued in Le Bonheur ’s name as the insured . I revert later to the non -disclosure
aspect when discussing how this practice is inconsistent with the constitutional value
of openness and ‘the requirement of transparency that underlies all litigation’ ( Rand
Mutual Assurance Co (Pty) Ltd v RAF 2008 (6) SA 511 (SCA) para 23) . In my view,
the practice of non -disclosure of the foregoing material facts ought not to be
tolerated .

[23] Pursuant to Stellenbosch Vineyards’ failure to comply with the demand, an
action was launched as foreshadowed in Le Bonheur’s letter of demand . Its citation
in the particulars of claim (the POC), which follows the citation in the summons,
reads:

‘The Plai ntiff is LE BONHEUR WINE ESTATE (PTY) LTD , a company
incorporated in accordance with the laws of South Africa, with registration
number 2016/320022/07 and having its registered address and principal place
of business at L’ Avenir Wine Estate, R44 Klapmuts Road, Stellenbosch,
Western Cape.’

[24] As with the letter of demand, the POC makes no reference to the insurance
policy, nor to the compensation paid to Le Bonheur, nor to the fact that the claim is
subrogated and being pursued by Hollard in the cited plaintiff’s name. Instead, after
pleading its causes of action, Le Bonheur (not Hollard ) alleges and claims :

’10. The defendant is liable to pay the plaintiff the value of the said wine in
an amount of R12 452 637.00. …
14. In the premises the defendant is liable to pay the plaintiff the amount of
these additional costs as damages.
15. The defendant’s total liability to the plaintiff is for payment of
R12 643 936.05.
16. Despite demand made on 23 June 2021, the defendant has failed
and/or refused to pay the sum of R12 643 936.05 to the plaintiff . …

WHEREFORE the plaintiff claims:
1. Judgment against the defendant for payment of R12 643 936.05. …’
(Emphasis added)

[25] The summons and the POC is signed by Clyde & Co in its capacity as
‘Attorneys for the Plaintiff’. Accordingly, ex facie the summons and the POC, Clyde &
Co represented to th is Court and its Registrar , and to the defendant (and the public
at large) that it is Le Bonheur’s attorney and sues on its behalf and for its benefit . All
other notices filed by Clyde & Co in the main action is to the same legal and factual
effect.

[26] The first time that Clyde & Co reference d the subrogation and that it acts on
instructions of Hollard is in the notice delivered under rule 30(2)( b) dated 2 June
2025 in response to the substitution notice. The relevant part of the rule 30(2) notice
reads:

‘BE PLEASED TO TAKE NOTICE THAT the notice of substitution, served via
email on Monday 2 June 2025 at 09:16 by Werksman Attorneys, constitutes
an irregular step by reason of the plaintiff, being represented by Clyde & Co
on instructions of Hollard Insurance Company Limited, consequent o n the
principle of subrogation, as contractually entitled to in the relevant insurance
policy and common law .
Such purported substitution is impermissible and irregular, which this
Honourable court should set aside.’ (Emphasis added)

[27] Hollard’s reliance on the principle of subrogation was then amplified in its
notice of application filed in support of the application before me (i.e., the rule 30
irregular step application , alternatively for declaratory relief ). The relevant part of
Hollard’s notice reads:

‘TAKE NOTICE THAT the plaintiff will rely, in support of the application, on:
i. The fact that The Hollard Insurance Company Limited, the insurer of Le
Bonheur, has indemnified Le Bonheur for the loss described in the
particulars of claim in this action;
ii. The fact that Hollard has not authorised Werksmans Attorneys to file
the notice of substitution as attorneys of record dated 2 June 2025 and
does not authorise Werksmans to represent the plaintiff or to prosecut e
the further conduct of the action;
iii. The fact that The Hollard Insurance Company Limited has authorised,
and continues to authorise, Clyde & Co to prosecute the action under
this case number in the name of Le Bonheur for the benefit of The
Hollard Insuranc e Company Limited; …’

[28] It is common cause that t he claim of Le Bonheur against Stellenbosch
Vineyards for damages s uffered by the former as a result of the fire is capable of
being subrogated in terms of the insurance policy . The rule 30(2)( b) notice quoted
above in paragraph [2 6] records that Hollard seeks a setting aside of the substitution
notice by virtue of its right s flowing ex lege pursuant to the operation of the principle
of subrogati on as it is ‘contractually entitled to’ . This is a reference to general
condition no. 9 in the insurance policy . That clause is headed ‘COMPANY’S RIGHTS
AFTER AN EVENT’. In this context, ‘Company’ means Hollard. The clause in
question reads:

‘(a) On the happening of any event in respect of which a claim is or may be
made under this Policy, the Company and every person a uthorised by
them may, without thereby incurring any liability and without
diminishing the right of the Company to rely upon any conditions of this
Policy
(i) …
(ii) take over and conduct in the name of the Insured the defence or
settlement of any claim and prosecute in the name of the Insured
for their own benefit any claim for indemnity or damages or
otherwise and shall have full discretion in the conduct of any
proceedings and in the settlement of any claim. No admission,
statement, offer, promise, payment or indemnity shall be made
by the Insured without the written consent of the Company.
(b) The Insured shall, at the expense of the Company, do and permit to be
done all such things as may be necessary or reasonably required by
the Company for the purpose of enforcing any rights to which the
Company shall be, or would become, subrogated upon indemnification
of the Insured whether such things shall be required before or after
such indemnification …’ (Emphasis added)

[29] As is evident from the ground s averred in support of Hollard’s application, it is
launched as a response to the substitution notice delivered by Werksmans . That
notice was merely an implementation of the directors’ resolution quoted above in
paragraph [3]. The latter development requi res some context . In recent years , Le
Bonheur and Stellenbosch Vineyards became wholly owned subsidiaries of Advini
South Africa (Pty) Ltd. As a result, Le Bonheur and Stellenbosch Vineyards share
common directors , as well as share common commercial interests and objectives.

[30] The directors’ resolution reveals that the main action between sister
companies is viewed as being detrimental to the group’s best interest. Therefore , Le
Bonheur’s directors resolved to end the main action . Acting on Hollard’s instructions,
Clyde & Co refused to comply with Le Bonheur ’s instructions, despite being the
latter’s attorney and agent . Hence, its mandate was revoked. Werksmans was
appointed so that Le Bonheur c ould control the levers of the litigation and withdraw
the main action . Nothing precludes Hollard from pursuing its subrogated claim
through any other way permitted by law. Therefore , Hollard is not without remedy if
the substitution notice is held to be valid. At the hearing, Mr Lamplough accepted th is
as the correct legal position .

Issue 1: Is the substitution notice an i rregular step under rule 30 ?

[31] Rule 30(3) empowers a high court to set aside a ‘proceeding or step’ which, in
the court’s opinion, is ‘irregular or improper’. It is trite law that rule 30 may only be
invoked whe n a complaint relates to an irregularity in the form of a proceeding or
step taken, rather than in rela tion to a matter of substance. See Singh v Vorkel 1947
(3) SA 400 (C) at 406; Odendaal v De Jager 1961 (4) SA 307 (O) at 310F -G.

[32] For the reasons that follow, I find that Hollard’s complaint regarding the
subst itution notice served pursuant to rule 16 fails to meet the threshold
requirements for a legally effective invocation of rule 30.

[33] A notice appoint ing a new firm of attorneys could potentially be the focus of a
rule 30 complaint. Such a notice advances an action and, a s this case shows , may
bring the action one step closer to finality. See Cyril Smiedt (Pty) Ltd v Lourens 1966
(1) SA 150 (O) at 152E; Market Dynamics (Pty) Ltd t/a Brian Ferris v Grögor 1984 (1)
SA 152 (W) at 153C. Undoubtedly, the substitution of Clyde & Co with Werksmans
will lead to the main action being withdrawn - this is expressly resolved in the
directors’ resolution . Werksmans has been appointed to ensure that a notice of
withdrawal of the main action is delivered .

[34] Hollard ’s complain t is not that the substitution notice is defective in form or
content. Rather, t he grounds of its complaint traversed in its rule 30(2)( b) notice (see
above in paragraph [26] ) is that the substitution notice constitutes an irregular step
as it allegedly infringes upon Hollard’s rights ‘ consequent on the principle of
subrogation, as contractually entitled to in the relevant insurance policy and common
law’. Put differently, Hollard ’s complaint is that the substitution notice violates its right
to mandate the attorney of its choice to prosecute its subrogated claim against
Stellenbosch Vineyards .

[35] Quite evidently , Hollard’s complaint does not fall within the purview of rule 30.
Consequently, the relief it seeks in terms of rule 30 is unsustainable and is refused.

Issue 2: Is Le Bonheur or Hollard the plaintiff ‘party’ in the main action ?

[36] This question holds significan ce as it will determin e whether Le Bonheur was
entitled to cancel Clyde & Co’s mandate in the main action , subsequently leading to
Werksmans deliver ing the substitution notice pursuant to rule 16(2) .
--
[37] Mr Lamplough advanced the core thesis underpinning his argument as
follows : He submitted that it matters not an iota that Hollard’s name does not appear
anywhere in the pleadings , or on any of the notices filed pursuant to the rules of
court . He submitted that, by virt ue of subrogation, Hollard is the real plaintiff ex lege ,
regardless of how the plaintiff is described in the combined summons and the POC,
and regardless that Hollard’s name is wholly absent from the pleadings. He argued
that Hollard ’s details must be read into all court documents by necessary implication.

[38] This is a novel perspective . I engage d Mr Lamplough on the implications of
Hollard being recognised as the ‘plaintiff ’ despite not being joined as a ‘party ’. I
enquired whether this extends to a court order in Le Bonheur’s favour. In other
words, assuming judgment is granted in favour of Le Bonheur as the cited plaintiff,
and the trial court directs the defendant to pay La Bonheur the amount claimed, then
would the court order be a judgment in favour of Hollard, even though its name
would not appear anywhere in the court ’s order as judgment creditor ? Mr
Lamplough’s answer is ‘yes’. He submitted that this is how subrogated claims work
when an insurer steps into the shoes of an indemnified insured. He argued that the
usual rules appli cable to interpreting court orders (see Eke v Parsons supra ) do not
preclude s uch an interpretive result . I disagree. I can find n o legal basis for this , and
none were cited by Mr Lamplough either . This is unsurprising in view of the trite legal
position regulating the interpretation of documents , such as, pleadings , notices , and
court orders.

[39] Mr Lamplough’s aforementioned argument is to the effect that the legal
consequences flowing from Le Bonheur’s claim being subrogated are , to some
extent , interwoven with the basis for the submission that Le Bonheur lacks the right
to terminate Clyde & Co’s mandate . Consequently, his argument also implies that Le
Bonheur does not possess the procedural right under rule 16(2) to issue a notice of
substitution in favour of Werksmans . I now proceed to deal with this issue.

[40] Under the next heading, I focus on the issue of whether a transfer of
procedural rights ensues when subrogat ion occurs . In the present context , I deal
only with those aspects of Mr Lamplough’s submissions which are germane to the
application of rule 16 (2) and a determination of whether the cancella tion of Clyde &
Co’s mandate , along with the subsequent filing of the substitution notice , is valid and
legally effective .

[41] This necessitates a discussion of rule s 16(1) and (2), and their application to
the facts of this case . For present purposes, the relevant extracts of rule 16 reads:

‘(1) If an attorney acts on behalf of any party in any proceedings, such
attorney shall notify all other parties of this fact and shall supply an address
where documents in the proceedings may be served.
(2)(a) Any party represented by an attorney in any proceedings may at any
time, subject to the prov isions of rule 40, terminate such attorney’s authority to
act, and may thereafter act in person or appoint another attorney to act in the
proceedings, whereupon such party or the newly appointed attorney on behalf
of such party shall forthwith give notice to the registrar and to all other parties
of the termination of the former attorney’s authority , and if such party has
appointed a further attorney to act in the proceedings, such party or the newly
appointed attorney on behalf of such party shall give the name and address of
the attorney so appointed. …’ (Emphasis added)

[42] Mr de Beer argu es that rule 16 (1) and (2) appl ies to a litigant who is cited as a
‘party ’ in the pleadings . He contends that , based on the facts of this matter , rule
16(1) and (2) appl y to Le Bonheur (not Hollard ). Mr Lamplough , on the other hand,
contends that, in the context of insurance litigation involving subrogation, the concept
of ‘party’ in rule s 16(1) and (2) encompass an insurer (i .e., Hollard) who sues in an
indemnified insured’s name (i .e., Le Bonheur) because , in the eyes of the law, the
former steps into the shoes of the latter . Resolving this dispute requires an
interpretation of the term ‘party’ as it appears in rule 16(2).

[43] There is scant case law reported on rule 16(2) . Neither I nor any of the
parties’ counsel were able to find any precedent which is on all fours with the facts
and circumstances in casu . The issues arising here are novel and are significan t in
the area of indemnity insurance litigation which occur daily in courts nationally . This
situation necessitates judicial scrutiny of the relevant law and its practical
implications.

[44] As a point of departure, the legal status of t he Uniform Rules require re cital.
They are framed by the Rules Board for Courts of Law pursuant to powers granted
by Parliament in the Rules Board for Courts of Law Act 107 of 1985. The Uniform
Rules, along with any amendment thereto, have the force of law by promulgat ion
through publication in the Government Gazette . This occur s after the rules are
approv ed by the relevant Cabinet Minister for Justice. A s such, the Uniform Rule s
(like all other rules of court ) constitute delegated legislation - they are subordinate
legislation with statutory force . See Computer Brilliance CC v Swanepoel 2005 (4)
SA 433 (T) at 442.

[45] Section 8(1) of the Interpretation Act 33 of 1957 (Interpretation Act) states that
the rules of court regulate the ‘practice and procedure of that court’ to which the rules
relate. In CT v MT and Others 2020 (3) SA 409 (WCC) para 19, Rogers J affirmed
that ‘rules of court … do not lay down substantive law’ . They confer procedural rights
only. See Mukaddam v Pioneer Foods (Pty) Ltd 2013 (5) SA 89 (CC) para 31.

[46] Corbett JA, in Universal City Studios Inc and Others v Network Video (Pty)
Ltd 1986 (2) SA 734 (A) at 754H -I remarked that ‘the dividing line between
substantive and adjectival law is not always an easy one to draw’. Corbett JA then
embraced the following distinction composed by Salmond in Jurisprudence 11th ed
at 504:

'Substantive law is concerned with the ends which the administration of justice
seeks; procedural law deals with the means and instruments by which those
ends are to be attained.'


[47] Since the Uniform Rules form part of procedural (i .e., adjectival ) law, none of
its provisions can be interpreted as conferring on Hollard a substantive right to claim
payment from Stellenbosch Vineyards . Moreover, nor can any court rule be
interpreted as conferring a right on Hollard to be recognised as a litigant who stand s
in Le Bonheur’s legal shoes; nor can any court rule be interpreted in a way that
confer s a claim or entitlement to Hollard for damages awarded to Le Bonheur in any
court order. See Fair v SA Eagle I nsurance Co Ltd 1995 (4) SA 96 (E) at 99.

[48] When interpreting court rules, the process and the legal principles which apply
are the same as that used when legislation are generally construed . Interpretation is
an objective exercise in a unitary process . In other words, it does not occur in
stages. Interpre tation entails a cohesive analysis of a text, having regard to its
language and context ( both internal and external context), and its purpose viewed
within its specific context ual environment and surrounds . Court rules are also to be
interpreted through the prism of the Constitution and its values. See Social Justice
Coalition and Others v Minister of Police and Others 2022 (10) BCLR 1267 (CC)
paras 51 - 65.

[49] The term ‘party’ is used multiple times in rules 16(1) and (2). Rule 1 provides
definitions f or terms used in the Uniform Rules. The meanings assigned in rule 1
apply whenever any term defined therein is used in a court rule, ‘unless the context
otherwise indicates’. Rule 1 provides that ‘“party” or any reference to a plaintiff or
other litigant in terms, includes such party’s attorney with or without an advocate, as
the context may require’. This definition applies to the term ‘party ’ in the context of
rules 16(1) and (2) .

[50] The heading of rule 16 is ‘Representation of parties’. The heading is a
legitimate aide in the interpret ation of a court rule. See Standard Bank of South
Africa Ltd v Friedman 2024 (3) SA 171 (WCC) para 44 (and the authorities cited at
footnote 15). Quite evidently from its heading and the contents of its body , rules
16(1) and (2) deal with the representation of litigants in ‘any proceeding’ before a
high court. In other words, their provisions are designed to regulate the
representation of p ersons involved in an action or application as plaintiff/applicant or
as defendant/respondent .

[51] Rule 16 functions within the broader scheme of the Uniform Rules. Under
rules 18(1) and 17(3)( a), if a ‘party’ sues and is represented by an attorney when the
summons is issued , the summons must be signed by the litigating party or its
attorney. Consistent with the letter of demand which had indicated that Clyde & Co
acts for Le Bonheur, Clyde & Co signed the summons and the POC in its capacity as
the attorneys acting for Le Bon heur as plaintiff . Clyde & Co did not sign this pleading
for Hollard .

[52] In terms of rule 7, an attorney can only act for a ‘party’ who is properly before
court if the attorney is duly authorised to act by virtue of a valid power of attorney in
its favour . Although rule 7(1) does not make it obligatory for the power of attorney to
be filed at court, the document must nevertheless exist because a cited defendant
may, within prescribed time limits, call on the attorney to prove his/her authority to
act.

[53] Rule 7 read with rule 16(2) make it plain that a firm of attorney s (such as,
Clyde & Co for Le Bonheur) must have a mandate from the cited plaintiff in order to
continue to act while the proceedings are ongoing . If not, then the attorney must
cease to act.

[54] An attorney’s mandate may be terminated at any time . See Pugin v Pugin
1963 (1) SA 791 (W) at 793F. This is consistent with the common law position - an
agent ’s authority to act for a principal may be terminated (revoked) by the latter
whenever a principal deems it fit to do so . When that eventuality materialises , then
an attorney , acting as agent of his/her client as principal is, by operation of law, no
longer empowered to carry out any function (s) ordinarily performed by an attorney
with authority . This includes, but is not limited to, an attorney not being entitled to
accept service of process in the pending litigation , nor to appear in court on behalf of
a client who has cancelled the attorney’s authority to act . See Pugin supra at 794A -
795F.

[55] The importance of an attorney having a n authority to act cannot be
overstated. The question of authority has been litigated repeatedly , especially
regarding the power of an attorney to validly settle or compromise a lawsuit. See , for
e.g., MEC for Economic Affairs, Environment & Tourism : Eastern Cape v Kruizenga
and Another 2010 (4) SA 122 (SCA) ; and Cloete v Van Zyl (3384/2017) [2024]
ZAECMKHC 48 (2 May 2024) .

[56] This is pertinent in casu because the directors’ resolution expressly authorise
Werksmans to withdraw the main action where Le Bonheur is the cited ‘plaintiff ’,
provided the withdrawal occurs ‘on the basis that each party shall bear its own
costs’. To give effect to this intention will involve negotiations between the attorneys
for Le Bonheur and Stellenbosch Vineyards. That, in turn, requires a valid mandate
to settle the case on th e basis indicated . Clyde & Co does not have such a mandate.

[57] It is un dispute d that Le Bonheur greenlighted th e main action . However, it has
withdra wn its consent to litigate and revoked Clyde & Co’s authority to continue
acting on its behalf. Usually , this would be the end of the matter. But Hollard reject s
this.

[58] Hollard’s counsel argues that, under the rules of court properly interpreted ,
Hollard is the ‘true plaintiff ’ in the main action . For the further reasons enumerated in
the succeeding paragraphs (i.e., over and above those discussed above) , I disagree.

[59] In terms of rule 17(1), ‘[e]very person making a claim against any other
person may … sue out a summons or a combined summons’. In this context, the
term ‘person’ bears its broad meaning as defined in s 2 of the Interpretation Act. That
definition includes within its ambit the following categories of jur istic entities :

‘(b) any company incorporated or registered as such under any law;
(c) any body of person s, corporate or unincorporate’.

[60] Rule 18(2) provides that in an action proceeding, the ‘party’ suing and the
‘party’ being sued must be ‘described’ in the summons or combined summons (as
the case may be) . Rule 18(10) states that ‘[a] plaintiff suing for damages shall set
them out in such manner as will enable the defendant reasonably to assess the
quantu m thereof’.

[61] An application of the provisions in rule s 17 and 18 when properly interpreted
leads me to the ineluctable conclusion that the ‘party’ suing Stellenbosch Vineyards
for damages is the private company ‘described ’ in the combined summons and the
POC as the plaintiff, namely, Le Bonheur. See above in paragraphs [23] and [24].

[62] Rule 15 prescribes a procedure by which the iden tity of a litigat ing ‘party’
before court may be altered owing to a material change in his/her/its legal status
(such as, through death or insolvency or liquidation; or a minor reaching the age of
majority who wishes to substitute a guardian that, in terms of a recognised rule of
procedure, sued in the guardian’s name for the benefit of a disclosed (i .e., named)
minor child).

[63] There is no rule of procedure which allows one registered company (i.e.,
Hollard) to sue a defendant (i.e., Stellenbosch Vineyard s) for damages in the name
of another registered company (i .e., Le Bonheur) . The absence of such a procedural
rule is consistent with the principle that, under our law, every registered company
possess its own corporate identity and separate juristic personality. See Ex parte
Gore NO and Others NNO (in their capacities as the liquidators of 41 companies
comprising King Financial Holdings Ltd (in liquidation) and its subsidiaries) [2013] 2
All SA 437 (WCC ).

[64] In Venator Africa (Pty) Ltd v Watts and Another 2024 (4) SA 539 (SCA) para
24, Mabindla -Boqwana JA reaffirmed the long -standing principles that a ‘company’s
legal persona cannot be ignored at the choosing of a party ’. She held that ‘ the
separate personality is “no mere technicality ”. It is foundational to company law. A
party cannot simply disregard the ‘corporate veil’; it must be permitted by law to do
so.’ These principles are apposite in the present context as well – they reinforce my
view that Hollard cannot, without more , plant itself into th e main action as plaintiff
and, effect ively, supplant Le Bonheur . Hollard must follow the rules of court .

[65] The something ‘more ’ envisaged in the preceding paragraph entails Hollard
making use of the relevant court procedure to join issue with the defendant. By virtue
of the doctrine of subrogation, Hollard has an interest in the outcome of the main
action . If it wishes to protect that interest as a litigant with procedural rights , it must
formally become a ‘party’ in its own name pursuant to , for e.g., rule 10 (joinder of
parties and causes of action), or rule 12 (intervention as plaintiff). What Hollard may
not do is to li tigate in the shadows and then, when things go awry, emerge and stand
in the light , then proclaim itself to be the ‘true plaintiff’ with procedural rights under
the rules of court . Those rights are reserved for a ‘party’ properly before court who is
joined in the pleadings as a litiga nt (i.e, ‘party’) . Hollard is not a ‘party ’ as statutorily
defined .

[66] Our law permits insurers (and other well -resourced third parties ), to fund
litigation for the benefit of a litigat ing party . The phenomenon of funded litigation is
increasing. Often, funders control the levers of litigation . What is not allowed under
our court rules is for an insurer (or other third -party funder ) who litigat es in the name
of someone else to assert that he/she/it is the true ‘party’ before court and is entitled
to the suite of procedural rights reserved for litigants cited in the pleadings . The fact
that an insurer (or other third party ) is funding the litigation ; and/or is allowed to
select the lawyers appointed to deal with the case ; and/or has a financial interest in
the successful prosecution of the litigation (whether due to subrogation or on some
other basis ), is of no moment under our court rules . Hollard seeks to ignore all this.

[67] On its own version, Hollard has been litigating anonymously in this Court.
When consideration is given to the contents of rule s 10, 12, 15, 17 , and 18, it
becomes evident that the Uniform Rules do not permit anyone to litigate
anonymously. Put differently, a ‘party’ (as defined) is a litigant described in the
pleadings and who litigates openly and transparently before a court . Litigating in the
long shadow of a nother is antithetical to our constitutional values which must infuse
litigation. This is underscored in Arendsnes Sweefspoor CC v Botha 2013 (5) SA 399
(SCA) para 19 as follows :

‘With the advent of the constitutional dispensation, it has become a
constitutional imperative to view the object of the rule as ensuring a fair trial or
hearing. … And rules are provided to secure the inexpensive and expeditious
completion of litigation and are devised to further the administr ation of justice
… Considerations of justice and fairness are of prime importance in the
interpretation of procedural rules.’ (Authorities omitted)

[68] Our courts permit insurers to pursue subrogated claim s in an insured’s name
as if t hey were the insured , despite this being described as ‘a less than desirable
practice ’ and fraught with ‘anomalies’ . See Rand Mutual Assurance Co supra para s
23 - 24. This does not imply that insurers have a license to sue anonymously. Doing
so is contrary to the spirit and, as discussed above, the letter of our court rules. Mr
Lamplough submitted that Goodwin Stable Trust v Duohex (Pty) Ltd 1998 (4) SA 606
(C) and Smith v Banjo 2011 (2) SA 518 (KZP) are authority for the proposition that
Hollard can litigate anonymously . He argued that these cases affirm that there is no
duty on Hollard to disclose the fact of subrogation. For the ensuing reasons, I
disagree.

[69] Goodwin Stable Trust supra serves as clear authority that insurers who litigate
in an insured’s name without disclosing the existence of subrogation imp erils the
integrity of the lawsuit . The consequence s of non -disclosure , with which I align
myself, was explained by Selikowitz J as follow s, albeit in the context of arbitration
(at 624) :

‘Litigation in the name of another without disclosure of that fact whether it
arises by agency or otherwise raises the spectre of champert y. … Natural
justice and in particular the idea of fairness requires that such a party should
know precisely against whom the arbitration is being conducted. Many
decisions in regard to both litigation and arbitration, including whether to
proceed or not a s also whether to compromise and settle are made in the light
of the identity of the opposing parties and their relationships to one another .
Their existing and possible future relationships through circumstances such
as a continuing or potential business relationship are just some of the factors
which may influence their actions. The known ability of an opposing party to
perform in terms of an award is also a factor which determines the conduct of
proceedings, which in turn involves the expenditure of mone ys.’ (Emphasis
added)

[70] Contrary to Mr Lamplough’s contention, Smith v Banjo supra also does not
assist Hollard . In that case, Patel DJP ( et Nkosi AJ concurring) held :

‘The involvement of the insurer in a lawsuit is irrelevant and therefore it is not
necessary to plead such involvement. … I agree with the plaintiff’s submission
that from a practical perspective the insurer’s involvement in the suit is
irrelevant. For thi s reason it is clearly not necessary for the plaintiff to plead
the insurer’s involvement in the suit.’ (para 12)

[71] In this extract, Patel DJP merely state s that ‘the involvement’ of an insurer in a
lawsuit need not be pleaded. In the context of the extract read as a whole, th e court
held that it is not necessary to plead the practical aspects of an insurer funded
lawsuit , (such as, the fact that an insurer pays the legal costs ; or that the insurer has
appointed an attorney). This decision does not imply that disclosure s of the kind
envisaged in Goodwin Stable Trust supra at 624 and in Nkosi v Mbatha (AR20/10)
[2010] ZAKZPHC 38 (6 July 2010) para 18 (see below in paragraph [ 75]) ‘is
irrelevant’. Moreover, disclosure promot es adherence to constitutional grundnorms
(basic norms) during judicial proceedings involving the recover y of subrogated
insurance claims .

[72] Patel DJP’s quoted statement at para 12 is, at best, obiter. This is because
the dispute in th e appeal was resolved without the court needing to engag e the issue
of subrogation. This is clear from the following extract:

‘It is in my view unnecessary to consider the question as to whether or not the
present matter involves a subrogated claim. Subrogation is at best a collateral
fact which is not capable of affording any reasonable presumption or
inference as to the principal matter in dispute.’ (para 10)

[73] To the extent that Patel DJP’s statement in para 12 aligns with Mr
Lamplough ’s contention , which I do not consider to be the position, then I am
constrained not to follow it . I consider it to be incorrect. The contrary view articulated
in Goodwin Stable Trust supra and Nkosi v Mbatha supra is, in my view, the correct
one. To the extent that the latter judgment holds (at para 18) that subrogation must
be proved when an insure r sues in an insured’s name , I express no view thereon
(this is a matter for the trial court to decide ). I merely hold that when insurer s pursue
subrogated claims in an insured ’s name as permitted by law , then disclosure of facts
of the kind envisaged above in paragraph s [22] and [24] ought to appear in the
pleadings of the party suing .

[74] In my view, there is no justification in logic or l aw for exempting an insured
and an insurer from the obligation to disclose the fact of indemnification and the
presence of a subrogated insurance claim. Meanwhile, victims of motor vehicle
accidents who pursue claims against the Road Accident Fund (RAF) are obliged to
disclose to the RAF, during the litigation process , the fact that a medical insurance
scheme indemnified the claimant for past medical expenses , which monies are
sought to be recovered from the RAF for reimbursement to the insur er. See
Discovery Health (Pty) Ltd v RAF and Another 2025 (3) SA 225 (GP). The promotion
of equality among litigants suing for damages to reimburse insurers favour the
imposition of a similar duty on an indemnified insured an d its insurer to disclose the
existence of subrogation.

[75] Public policy also favour s disclosure. Non-disclosure en courages a practice
that promotes unfairness through secrecy in litigation, rather than frankness and
transparency. To protect the integrity of a n action proceeding require s that the
pertinent fact s identified above be disclosed . By courts not obliging disclosure gives
judicial cover to litigants seek ing to conceal the subrogation and avert potential
defences to a claim based on subrogation . As was submitted by Mr Seale , defences
may include the incurrence of double compensation to an insured owing to a prior
liquidation or de -registration of an insurer . The dangers inherent in courts not
obliging disclosure was exposed by Madondo J (et Mnguni J concurring) in Nkosi v
Mbatha supra para 18:

‘In the request for further particulars the plaintiff was specifically asked
whether her motor vehicle was at the time of the collision insured, and
whether she had personally paid for the repairs. The plaintiff refused to
answer the questions posed to her on the ground that the information
requested was not required for pleading. In my view, the plaintiff had thereby
misled the defendant as to the time and correct state of events and as to the
nature of her claim. ’ (Emphasis added)

[76] The SCA, in Rand Mutua l Assurance Co supra para 19, discussed English
law which compels insurers with subrogated claims to sue in an insured’s name. The
SCA held that ‘[t]his requirement gives rise to a number of procedural anomalies’.
The SCA then posed the question whether th is requirement ‘is consonant with our
constitutional values and our law of procedure’ (para 23). It answered ‘no’ for the
following reasons:

‘To require a party to litigate in the name of another appears to me to fly in the
face of the requirement of tran sparency that underlies all litigation. The rule
serves no public interest in modern times, as appears from the position in the
USA. It is formalistic and creates anomalies. It enables the insurer to litigate in
the name of the insured without taking any r isks as far as litigation costs are
concerned. The supposed advantage, namely that the insurance company
may be able to retain its anonymity, is clearly not to the advantage of the
wrongdoer and also probably not to that of the insured. ’ (Authorities omitt ed)
(Emphasis added)

[77] Harms ADP held that the practice of suing in an insured’s name is ‘less than
desirable’ (para 24) – it is inconsistent with our normative value system.
However, he held that this long-standing practice ought not be abolished by
judicial fiat . This decision was taken in the interests of promoting legal
certainty, a basic tenet of the rule of law entrenched as a foundational value in
s 1( c) of the Constitution of the Republic of South Africa, 1996 (the
Constitution) . Harms ADP wrote:

‘This court is reluctant to interfere with settled legal principles even when they
have their origin in an incorrect interpretation of the law because members of
the public may have arranged their affairs on the assumption that they were
settled.’ (para 24)

[78] The kernel of the SCA’s decision on the procedural issue is encapsulated in
the following extract :

‘Consequently, t his judgment does not hold that the insurer must litigate in its
own name and may not litigate in the name of the insured. What it does hold
is that the English rule in its stark form cannot be justified and that, unless the
wrongdoer will be prejudiced in a procedural sense, courts may permit the
insurer to proceed in its own name. It might be necessary to adapt other
procedural rules in such an event as requiring, by analogy with Uniform rule
35(5)(b), discovery by the insured.’ (para 24)

[79] Accordingly, Rand Mutual Assurance Co supra adopts the position in
American and Continental law, namely, that an insurer can sue in its own name for
recovery of monies under a subrogated claim. This is geared ‘to avoid confusion
over the identity of the real plaintiff’ (para 19). However, unlike other legal systems,
ours provide s an insurer with an el ection: it can choose to sue in its own name ; or it
can litigate through the persona (i.e., identity) of its insured. In cases where the latter
option is selected , the indemnified insured exist s as a legal person with its own legal
personality . That juridical fact cannot be ignored. In the lawsui t which is instituted ,
the insured (not the insurer) is the real plaintiff suing for judgment (as is the position
of Le Bonheur and countless other insured whose identities are used in insurance
related litigation ).

[80] Mr Lamplough argued that the two options have the same effect in law. I find
that logic dictates that when the SCA held that insurers may choose between
different procedur es to pursue the same subrogated claim, it must have envisaged
that the legal consequences for each procedural regime would differ . If not, then why
have t wo processes? For all these reasons (as amplified under the next he ading), I
find that when Hollard elected to litigate in Le Bonheur’s name, the former did not
supplant the latter as litigant. Therefore, Le Bonheur’s procedural rights did not vest
in Hollard.

[81] My conclusion that Hollard did not become a ‘party’ in the main action is
buttressed by the decision in Cloete v Van Zyl supra . This case involv ed Hollard.
Van Zyl was sued for R1 398 132.00 in damages suffered by Cloete ’s property in a
fire allegedly caused by Van Zyl. After Hollard repudiated Cloete ’s claim , the latter
sued Van Zyl . It was common cause t hat Hollard appointed an attorney , Mr Buchner,
to defend Van Zyl and that Hollard paid his fees by virtue of the principle of
subrogation.1

1 Cloete v Van Zyl supra para 19.

[82] Van Zyl , duly represented by Mr Buchner , concluded a settlement with Cloete
on the merits (i.e., as to liability for the fire) . Before receiving Hollar d’s response ,
Mr Buchner informed Cloete’s attorney that Van Zyl accepted the settlement terms .
Problems emerged when Hollard re jected the settlement.

[83] When Hollard’s re fusal to agree to the settlement became known to Van Zyl ,
he sought to revoke the settlement . He realised that he would be personally liable for
the quantum of damages , as he conceded the merits of Cloete’s claim . Cloete
refused to accept Van Zyl’s purported cancellation of the settlement . Cloete then
applied to court for an order confirm ing the settlement on the issue of merits . Cloete
prevailed.

[84] In the course of upholding the validity of the settlement and making it an order
of court binding on Van Zyl (not Hollard), the high court held that ‘ Hollard Insurance
is not a party to the proceedings, therefore, whether it later denied liability or
repud iated the defendant’s claim is irrelevant’ (para 28). This was held to be the
position , despite the application of the principle of subrogation in that case . The high
court h eld further that Mr Buchner, who was appointed by Hollard, was duly
authorized to act for Van Zyl in the litigation . This was based on the fact that Hollard
was not a party to the litigation , despite Hollard paying the legal fees . The high court
also held that when Mr Buchner communicated to Cloete ’s attorney that settlement
had been reached with Van Zyl , Mr Buchner was duly authorized to act for Van Zyl
and to bind him to the terms of settlement. For this reason, Hollard was free to reject
settlement.

[85] The guiding principles emerging from Cloete v Van Zyl supra affirm that the
conclusions I reached are consistent with a proper interpretation of the relevant
Uniform R ules and their application to the facts before me . A final hook used by
Hollard to hang its challenge to the substitution notice filed by Werksmans is its
contention that Le Bonheur cannot terminate Clyde & Co’s mandate because Hollard
appointed the law firm in the exercis e of its common law rights under the principle of
subro gation .

[86] As will become evident from my discussion under the next heading, the
principle of subrogation does not involve the transfer from, or surrender by, an
insured to an insurer of the right to select and appoint an attorney who will conduct
the litigation on behalf of the insured . That right remains vested with the insured in
whose name the litigation is conducted. This legal position is accepted by Hollard in
its standard terms and conditions of insurance. In accor dance with Rand Mutual
Assurance Co Ltd supra para 18, c lause 9 of the insurance policy deals with
subrogation. The source of Hollard’s entitlement to participate in the selection and
appointment of an attorney for the recovery of monies under its subrogated claim is
found in clause 9(b) quoted above in paragraph [28] .

[87] In terms of clause 9(b), Le Bonheur is obliged to, ‘at the expense of the
Company [i .e., Hollard], do and permit to be done all such things as may be
necessary or reasonably required by the Company for the purpose of enforcing any
rights to which the Company shall be, or would become, subrogated upon
indemnification of the Insured ’. It goes without saying that this includes the
appointment of an attorne y.

[88] Consequently, Clyde & Co’s appointment occurred with Le Bonheur ’s
consent , whether express ly or implied ly by conduct. That consent was necessary in
law. By virtue of rule 7 (discussed earlier in this judgment ), without Le Bonheur’s
consent as plai ntiff, Clyde & Co could not lawfully institute th e main action against
the defendant .

[89] In these circumstances, owing to Clyde & Co’s refusal to carry out the
instructions of Le Bonheur ’s directors, they acted lawfully by revok ing Clyde & Co’s
authority to continue to act as agent on behalf of Le Bonheur in th e main action
conducted in its name. I ndeed, I find that, owing to Clyde & Co’s conflicted position
by reason that it was serving two masters ( or principals) whose interests were no
longer aligned, it was prudent for Le Bonheur’s directors to terminate Clyde & Co’s
mandate when they did . The situation was simply untenable.

[90] For all the se reasons, I conclude that the substitution notice delivered by
Werksmans is valid and legally effective for all purposes arising under rule 16 (2).

Issue 3: Does subrogation vest Hollard with Le Bonheur ’s rights ?

[91] I now deal with an alternative argument advanced by Mr Lamplough . He
argued that even if Hollard is not a ‘party’ in the technical sense defined in the rules
of court (as I held above) , then that i s not dispositive of the dispute . He argued that
Hollard ’s position as the de facto and de jure plaintiff also arises from the common
law of subrogation. He argued that once Hollard compensated Le Bonheur the
R12, 6m, Hollard stepped into the insured’s shoes for all purposes in law as regards
the subrogated claim . He argue s that t his implies the following : (i) At common law,
Hollard does not have a claim against Le Bonheur but rather a claim against the
wrongdoer. Le Bonheur’s substantive right to be compensated is transferred , ex
lege, to Hollard ; (ii) At common law, t his leads to all procedural rights to enforce the
substantive right being vested in Hollard (not Le Bonheur ); and (iii) The procedural
rights include: (a) to appoint and to remove an attorney; and ( b) to issue summons in
Hollard’s own name or in Le Bonheur’s name (as recognised in Rand Mutual
Assurance Co supra ).

[92] Flowing from this argument, I enquired of Mr. Lamplough regarding his
perspective on Le Bonheur’s legal status in the main action where it is d escribed as
the ‘plaintiff ’? His response was straightforward (yet drastic) : He said that, i n law, b y
reason that Le Bonheur was fully indemnified by Hollard , all Le Bonheur’s erstwhile
procedural rights vest in Hollard. Therefore , so his argument went, Le Bonheur has
no rights of such a nature vested in it any longer . The use of its name in the main
action is, so it was argued, a right enjoyed by Hollard by virtue of the decision in
Rand Mutual Assurance Co supra. Mr Seale described th ese proposition s as
‘absurd’ . He submitted that this argument would , if endorsed, lead to several
anomalies . I agree.

[93] When properly understood, Mr Lamplough’s argument creates ‘anomalies’ of
the kind envisioned by Harms ADP in Rand Mutual Assurance Co supra para 23 .
See above in paragraph [76]. Anomalies are to be averted. It cannot be that our
common law of subrogation relegates Le Bonheur (and other similar ly positioned
indemnified insured whose identities are used in litigat ion) to being a litigant in name
only. Le Bonheur cannot hold mere spectator status in a lawsuit conducted in its
name and through its legal identity with all the associated litigation risks (such as,
exposure to an adverse cost order) , but in which action Le Bonheur is helpless as a
non-paying spectator imbued wi th no procedural rights as all these rights vest in
Hollard . In my view, t his is untenable as a matter of law - it breeds unfairness and
fosters injustice during litigation .

[94] Mr Lamplough’s proposition referred to above in paragraph [92] erodes to
nothingness the procedural rights of Le Bonheur as a plaintiff ‘party’ under the rules
of court . Such a result cannot be countenanced because it is incongruous with the
spirit and objects of the Un iform Rules which is, in turn, underpinned and informed
by the content s of s 34 in the Constitution.2 See Social Justice Coalition supra paras
48 - 52.

[95] Le Bonheur asserts its procedural rights as a litigant in the main action . Le
Bonheur calls on this Court to safeguard its position as a plaintiff (and, in effect,
protect the position of all similarly placed indemnified insured whose identities are
used daily in civil litigation for the recovery of subrogated insurance claims) . For the
reasons given above a nd amplified further below, I find that the arguments advanced
for Hollard’s benefit as regards the transfer of all procedural rights from Le Bonheur
as the indemnified insured to Hollard when subrogation occurs , is unsustainable in
law.

[96] If our common law of subrogation has the effect of rendering hollow an
insured’s procedural rights in litigation , as envisioned by Mr Lamplough ’s argument ,
then that position was changed through legislation in the form of the rules of court .
On the basis outlined above in paragraph [44], the Uniform R ules constitute
subordinate legislation with statutory force. As legislation, they can a lter the common
law.


2 Section 34 of the Constitution reads: ‘Everyone has the right to have any dispute that can be
resolved by the application of law decided in a fair public hearing before a court or, where appropriate,
another independent and impartial tribunal or forum. ’
[97] The r ules of court confer procedural rights. See Social Justice Coalition supra
para 55. For the reasons outlined in this judgment pertaining to issue no. 2, Le
Bonheur qualif ies as a ‘party’ within the meaning of th at term in rule 16 and the
Uniform Rule s read as a whole. If the common law of subrogation took away the
procedural litigation rights enjoyed by Le Bonheur as an indemnified insured in
whose name and identity a civil litigation claim is pursued , then those procedural
rights were restored by the Uniform Rules . It amended the common law position
(assuming , for present purposes, that the position sketch ed by Mr Lamplough indeed
prevails at common law). The amended position contemplated here would a pply
from the moment that the summons in the main action was issued and Le Bonheur
became a plaintiff ‘party’ there in.

[98] The rights -based interpretation of the rules of court advanced here aligns with
the value -based interpretive methodology which this Court is enjoined to promote by
virtue of s 39(2) of the Constitution.3 See Social Justice Coalition supra paras 65, 85.
The Uniform Rules qualify as ‘legislation’ within its context. All rule s of court are
enactments having the force of law. Th erefore , the court rules qualify as ‘law’ within
the defin ition of this term in the Interpretation Act.4

[99] To sum up : The preceding discussion shows that, on a proper understanding
of our prevailing jurisprudence, there is no transfer of rights at common law of the
nature advocated for the benefit of Hollard. This raises the next sub -question arising
for adjudication in this matter : what is the nature and extent of the rights of an insurer
(such as, Hollard) who has fully indemnified an insured (such as, Le Bonheur) ? I will
now address this legal issue , but only to the extent necessary for present purposes .

[100] As a starting point, it bears stating that t here is a concept ual issue which
appears to bedevil the subject of subrogation in insurance law . Mr de Beer points out
that the notion of an insurer stepping into an insured’s shoes as creditor is , as Mr
Lamplough’s arguments show, mistakenly understood in a literal sense rather than in

3 Section 39(2) of the Constitution reads: ‘ When interpreting any legislation, and when
developing the common law or customary law, every court, tribunal or forum must promote the spirit,
purport and objects of the Bill of Rights.’
4 Section 2 of the Interpretation Act defines ‘law’ to mean ‘ any law, proclamation, ordinance, Act
of Parliament or other enactment having the force of law’.
its intended metaphorical sense. I agree. The following extract in Joubert (ed) The
Law of South Africa vol 12 (first re -issue) para 373 (quoted with approval in Rand
Mutual Assurance Co supra para 12) shows clearly that subrogation in the context of
insurance was never intended to imply a substitu tion of the insured by the insurer :

‘In its literal sense , the word “subrogation” means the substitution of one party
for another as creditor. In the context of insurance, however, the word is used
in a metaphorical sense. Subrogation as a doctrine of insurance law
embraces a set of rules providing for the reimbursement of an insurer which
has indemnified its insured under a contract of indemnity insurance. The gist
of the doctrine is the insurer’s personal right of recours e against its insured, in
terms of which it is entitled to reimburse itself out of the proceeds of any
claims that the insured may have against third parties in respect of the loss. ’
(Emphasis added)

[101] This locus classicus statement reveals that, unde r the subrogation doctrine, a
‘personal right’ is acquired by an insurer against an indemnified insured for a
reimburse ment ‘out of the proceeds of any claims that the insured may have against
third parties in respect of the loss ’. In other words, when subrogation applies, an
insurer ’s claim lies against an indemnified insured who, in turn, has a claim against
the third -party wrongdoer for compensation in respect of any damages caused . This
probably explains, at least in part, why , in practice, insurers assume the insured’s
identity and then sue the wrongdoer in the insured’s name.

[102] Our case law makes it clear t hat subrogation does not bring about a transfer
of substantive or procedural rights from an insured to an insurer result ing in an
insurer substituting an insured as creditor . I list a few illustrative examples only. The
following was stated in Rand Mutual Assurance Co supra para 9:

‘I accordingly agree with the respondent’s counsel who argued that … a
mutual association is nothing other than an insurer; and that once the mutual
association has indemnified the employer by paying compensation in full to
the employee, the association may exercise the right of recourse against a
third party by either obtaining a cession from the employer or by bringing a
subrogated claim for recovery under s 36(1)(b).’ (Emphasis added)

[103] In Goodwin Stable Trust supra at 623, Selikowitz J referred to Joubert (ed)
LAWSA vol 12 paras 222 - 226 as authority for his conclusion that, as a matter of
law, ‘[s]ubrogation does not involve a cession or a transfer of the insured's rights
against the third person’. Smith v B anjo supra is another example of the point being
made here . There , Patel DJP held that when an insurer sues in an insured’s name,
then the parties to that suit, namely, the insured and the third -party wrongdoer, ‘have
the same rights and duties as they wou ld have had had the matter not been a
subrogated claim’ (para 12). In other words, the rights and duties of the litigants
remain unchanged by the subrogation . The litigation continues between the parties
as though subrogation did not exist. This makes sens e owing to the fact that, as this
judgment holds, an insurer with a subrogated claim is not a ‘party ’ to the action , nor
has any procedural rights under the court rules . It is the insured who sues for
judgment (not the insurer) .

[104] A further indicator of the absence of any transfer of rights from an indemnified
insured to an insurer appears from Nkosi v Mbatha supra. In that case, Madondo J
described the insured as a ‘trustee for any compensation paid to him or her by the
wrongdoer an d is bound to hand over to the insurer whatever money he or she
receives from the wrongdoer’ (para 1 3). Madondo J affirmed that when an insurer
sues in an insured’s name in relation to a subrogated claim, it is the insured who, as
plaintiff , becomes the judgment creditor if the claim succeeds. It is also the insured
who, in accordance with a court order, recovers the judgment debt with costs and
‘would be obliged to hand the recovered amount over to the insurer’ (para 15) .

[105] All th ese considerations destroy the substratum of Hollard’s case that, at
common law, subrogation results in a transfer of rights (both substantive and
procedural) from Le Bonheur to Hollard by virtue that the latter indemnifi ed the
former in fulfilment of its obli gations under an insurance contract. Thus , the issue s
crystall ised above in paragraph [ 16(c) ] are decided against Hollard and in Le
Bonheur ’s favour .

Hollard joined as co -plaintiff in its own name: subrogation as a cause of action

[106] My conclusions regarding issue nos. 1, 2, and 3 paves the way for
Werksmans to deliver the notice of withdrawal intended by Le Bonheur ’s directors in
their resolution quoted above in paragraph [3] .

[107] A withdrawal of the main action would place Hollard in an invidious position. It
would have to commence a new action against Stellenbosch Vineyards and in its
own name by reason that Le Bonheur re voked its consent for a lawsuit in its name . [I
do not engage the question whether Le Bonheur ’s conduct constitutes a breach of
the insurance policy. That issue may yet be a cause for further litigation and may
come before this Court at a future date.]

[108] Litigation de novo would be time-consuming and at substantial additional cost
to Hollard ( i.e., over and above the costs it already incurred to fund the main action ).
I agree with Mr Lamplough that these considerations ought not to be overlooked and
that Hollard ought to have an effective remedy in these circumstances . It is with this
in mind that I consider how the main action ought to be conducted further.

[109] Fairness , although engrained into the rule of law, is, on its own, a bedrock
value which must infuse all forms of dispute resolution regulated by s 34 of the
Constitution quote above in footnote 2 . See Lufuno Mphaphuli & Associates (Pty) Ltd
v Andrews and Another 2009 (4) SA 529 (CC) paras 69 - 79. Section 34
encompasses a right to brin g a dispute to court, a right to have it litigated to finality,
and a right to have it decided. See Social Justice Coalition supra paras 60, 134 -
137. The rules of court set out the forms and processes involved in giving practical
expression to these righ ts in an efficient and expeditious way. See Social Justice
Coalition supra paras 57 - 58.

[110] Fairness must permeate every facet of a judicial proceeding so that fairness
protects the parties involved and those with an interest therein , to the extent required
by context . As already recorded earlier, Hollard has an interest in the outcome of the
main action. This is common cause. By allowing fairness to play an equitable role in
maintaining a healthy balance between the various interests at play in the main
action , fairness promotes justice for all and protect s judicial i ntegrity in the
administration of justice in the main action for all affected parties and interested
persons . This, in turn, promotes the public’s confidence in th e judiciary which is
essential for its efficacy.

[111] Hollard believed it instituted its subrogated claim via the main action. That
action was certified to be trial ready. Withdrawal thereof is imminent. Once effected,
Hollard would not be able to proceed to trial. It would have to institute legal action
afresh, a costly result that would substantially and unreasonably delay Hollard’s
pursuit of its claim . All this threatens with infringement Hollard’s right of access to the
court under s 34 of the Constitution . See Social Justice Coalition supra para 134.

[112] In Social Justice Coalition supra para 137, it was held:

‘By reason of the fact that judicial officers preside over the courts to which
they are appointed, they bear the principal, but not exclusive, duty to ensure
that the disputes that come before their courts are decided fairly, in public
hearings, and within a reasonable time . That duty is plainly owed to the
judiciary, as an institution. But it is also owed to everyone who looks to the
courts to secure justice and enjoys the right of access to the courts that
section 34 provides. ’ (Emphasis added)

[113] Given the peculiar circumstances of this case , it is incumbent that I ‘“forge
new tools ” and shape innovative remedies’ ( Fose v Minister of Safety and
Security 1997 (3) SA 786 (CC) para 69). When a constitutional right is infringed or at
risk of possible infringement , ‘it is for courts to craft effective, just and equitable
remedies’ (Mwelase v Director -General, Department of Rural Development and Land
Reform 2019 (6) SA 597 (CC) para 69). A superior court can do so as part of its
inherent power s conferred in s 173 of the Constitution , namely, to regulate its own
process es.

[114] In S v Molaudzi 2015 (2) SACR 341 (CC) para 33, it was held:

‘This inherent power to regulate process does not apply to substantive rights
but rather to adjectival or procedural rights. A court may exercise inherent
jurisdiction to regulate its own process only when faced with inadequate
procedures and rules in the sense that they do not provide a mechanism to
deal with a particular scenario. A court will, in appropriate cases, be entitled to
fashion a remedy to enable it to do justice between the parties. ’ (Emphasis
added)

[115] On this basis , I will grant an order that Hollard is joined as the ‘Second
Plaintiff’ to the main action. Le Bonheur will forthwith be the ‘First Plaintiff’. Hollard
will be afforded an opportunity to use rule 28 for purposes of amending the
Combined Summons and the POC by adding the details of its description. It may
have to effect further amendments to the POC as may be contextually required
including , but not necessarily limited to, pleading subrogation and an appropriate
remedy. Pending these amendments, Le Bonheur will be precluded from
withdrawing the main action.

[116] In view of the anomalies alluded to in Rand Mutual Assurance Co supra para
23 and the risks associated with insurers suing in an insured’s name (as this
judgment illustrates ), it remains unclear as to why insurers approach their election as
an ‘either or’ choice : either sue in their own name or sue in an insured’s name . There
are benefits to pursuing a subrogate d claim as a joint action. For e.g., it avoids (or
substantially reduces) the potential ‘anomalies’ alluded to in Rand Mutual Assurance
Co supra para 23; both the insured and the insurer have procedural rights; insurers
may still control the litigation if its interests align with that of the insured; and, if the
claim succeeds, a court order is issued in which an insurer is a judgment creditor
with enforce able rights .

[117] Despite the English law origins of the doctrine of subrogation , our
constitutional order impel led recognition of an insurer’s right to institute legal action
in its own name for purposes of recover ing from a wrongdoer a sum which is re-
imbursive compensation arising from the same factual circumstance(s) which led to
the insurer indemnifying its insured in the first place under the terms of an insurance
contract.

[118] In our constitutional era, the common law of subrogation was developed by
judicial fiat in Rand Mutual Assurance Co supra from th e mould incorporated into our
law of insurance in pre -constitutional times. By recognising that insurers have a right
to sue in their own names, the SCA, by necessary implication, recognised that a
subrogated claim in the hands of an insurer gives rise to a separate cause which can
sustain an action. This is affirmed, correctly so in my view, in Nkosi v Mbatha supra.
The contrary view expressed by certain writers is misdirected.5

[119] When an insurer is joined as a co -plaintiff with an indemnified insured , as I will
direct in relation to the main action , then, in my view, an insurer ought to seek at
least the following twin remedies : (i) first, an order confirm ing the validity of the
insurer’s subrogated claim; and (ii) secondly, an order which , flowing from the case
pleaded by the insured and/or insurer as co -plaintiffs (as the case may be) , directing
that a fixed sum (or such other sum as may be determined by the trial court) be paid
to the insurer by the cited defendant as a reimbursement pursuant to the insurer’s
rights under the terms of subrogation agreed to with the insured co-plaintiff .

[120] The formulation of the relief envisaged in the preceding paragraph is based ,
partly, on the requirements for a valid claim predicated on subrogation (see Nkosi v
Mbatha supra para 16 ) and, part ly, on the underlying purpose of an insurer’s claim .

Costs

[121] There is no reason why costs should not follow success. Le Bonheur was
successful in resisting Hollard’s application. The joinder of Hollard as a litigant does
not detract from this fact. C ounsel’s fees will be granted on scale C of the tariff.

[122] In exercising my d iscretion on costs , I took into consideration the factors listed
in Uniform Rule 67A(2) and (3)( b). Importantly, Hollard appointed a silk to argue its
application . This is an indication that the issues involved had complexity which

5 See, for e.g., A Smith ‘Does s ubrogation constitute a new cause of action to be pleaded?’
2021 (May ed) De Rebus 18.
warran ted an advanced level of knowledge and technical expertise of senior
practitioners . This is further borne out by the contents of this judgment.

Order

[123] In the result, the following orders are made:

(a) The application by Hollard is dismissed with costs, such costs for Le
Bonheur’s counsel shall be on tariff Scale C;

(b) Hollard is , with immediate effect, joined as co -plaintiff to the main
action. Hollard will be the ‘Second Plaintiff’ and Le Bonheur the ‘F irst
Plaintiff’;

(c) Hollard is granted 30 court days from date of this order to file a notice
of intention to amend the Combined Summons and the Particulars of Claim
in all necessary respects ; and

(d) Prior to the lapse of the 30-day period referred to in ( c) above and
pending the effecting of the amendments envisaged in ( c) if notice thereof is
given, the main action in this matter may not be withdrawn by La Bonheur or
anyone else acting on its behalf , nor may the defendant’s dismissal
application or the trial in th e main action be enrolled for hearing.


_____________________
FAREED MOOSA
ACTING JUDGE OF THE HIGH COURT


Appearances

For Plaintiff : M de Beer
Instructed by : Werksmans Attorneys

For Hollard : A J Lamplough SC
Instructed by: Clyde & Co Inc Attorneys

For Defendant : M Seale SC and A Walters
Instructed by: Mellows & De Swardt Inc Attorneys

For First & Second
Third Party: Mr Tyler
Instructed by: Dicks van der Merwe Attorneys