IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
JUDGMENT
Not Reportable
Case no: 1 7470 /2014
In the matter between:
TECHNICAL SYSTEMS (PTY) LTD First Applicant
LAVIRCO BELEGGINGS (PTY) LTD Second Applicant
and
RTS INDUSTRIES First Respondent
C QUIPTECH (PTY) LTD Second Respondent
CGC INDUSTRIES (PTY) LTD Third Respondent
CHRISTIAAN ARNOLDUS KURTZ Fourth Respondent
CARL WILLIAM RICHTER Fifth Respondent
Neutral citation: Technical Systems (Pty) Ltd and Another v RTS Industries and
Others (Case no 17470/2014) [202 5] ZAWCHC 287 (14-07-2025 )
Coram: NUKU J
Heard : 17 April 2025
Delivered : 14 July 2025
Summary: Costs – Generally - application was settled on a basis that disposed of the
merits except for costs - court should not have to hear evidence to decide the disputed
facts in order to decide who is liable for costs, but it must make a proper allocation as to
costs based on the material at its disposal – respondents ordered to pay costs on a
party and party scale.
ORDER
1. The respondents are ordered to pay, jointly and severally, the costs of:
1.1 the preparation and completion of the joint report, which costs shall
include the q ualifying expenses of the applicants’ expert , Mr Nick
Broekhuizen;
1.2 the costs of the hearing set down for 14 April 2025, which costs shall
include the qualifying fees of the experts , Mr Nick Broekhuizen and Mr
Andries Daniel Du Plessis, in respect of whom a Rule 36(9) notice had
been filed;
1.3 the applicants’ costs relating to the respondents’ application filed in March
2025.
2. The above costs shall be paid on a party and party sc ale and include, where
applicable, the costs of two counsel, on Scale C as contemplated in Rule 69.
JUDGMENT
Nuku J
[1] The parties to this matter are involved in the man ufacturing of flat wire as well as
auger. Alleging that the first, third, fourth and f ifth respondents had engaged in unlawful
use of their confidential information in the manufacturing process , the applicants
instituted interdictory proceedings which culminated in order that was taken by
agreemen t during 2015 (2015 order). The second respondent who was not a party to
that application agreed to be bound by the terms of the 2015 order.
[2] The 2015 order restrained the respondents from manufacturing any flat wire or
auger for a period of 3 years . After the expiry of the 3-year period, the respondents
could set up a manufacturing plant on condition that it does not infringe on the
applicants’ confidential information and copyright. To this end , any manufacturing plant
that was to be set up by the respondents was to be inspected prior to it being put into
production. This was to ensure that it does not infringe on the applicants’ confidential
information and copyright.
[3] In the event of disputes between the parties on whether the manufacturing plant
infringes on the applicants’ confidential information and copyright, the 2015 agreement
provides for a mechanism by which those disputes must be resolved prior to the said
manufacturing plant being put into production.
[4] During 2018, the respondents advised of their intention to commence with the
production of flat wire and auger . This necessitated the inspection of the respondents ’
manufacturing plant to ensure that it does not infringe on the applicants’ confidential
information and copyright. In this regard , the applicants engaged the services of Mr
Nicolaas Theo dorus Broekhuizen (“Mr Broekhuizen ”) to conduct the inspection. For their
part, the respondents engaged the services of Mr Hell mut Bowles ( “Mr Bowles ”).
[5] Mr Broekhuizen and Mr Bowles delivered the final report during November 2021
(“final report ”). The final report recorded their disagreement with Mr Broekhuizen , on the
one hand, holding the view that some of the constituent parts of the respondents’
manufacturing plant infringed on the applicants’ confidential information and copyright
and Mr Bowles, on the other hand, holding the view that none of the constituent parts of
the respondents ’ manufacturing plant infringed on the applicants’ confidential
information and copyright.
[6] The disagreement led to the applicants approaching this court during November
2021 , seeking procedural relief to determine the process of resolving the aforesaid
differences of opinion (“November 20 21 application ”). The application was opposed by
the respondent . In addition, the respondents launched an interlocutory application,
during November 2023, for leave to file a further affidavit in which they alleged that it
was no longer necessary to resolve the disputes between Mr Broekhuizen and Mr
Bowles because they no longer intended to use the manufacturing plant .
[7] The November 2021 application came before Bishop AJ , who made an order
referring the disputes and differences of opinion , as set out in the final report , to oral
evidence. By agreement between the parties , which was made an order of the court by
Mabindla -Boqwana JP on 27 January 2025, the matter was then set down for hearing to
commence on 14 April 202 5.
[8] On 26 March 2025, the respondents launched an interlocutory application
seeking, in the main, the applicants’ co-operation in respect of the preparation of a fresh
report in respect of another manufacturing plant that the respondents had
commissioned in the place of the one which had been the subject of inspection by Mr
Broekhuizen and Mr Bowles (March 2025 interlocutory application) . The application was
opposed by the applicants.
[9] The parties ultimately reach ed agreement , except for costs, regarding both the
November 2021 application and the March 2025 interlocutory application. That
agreement was made an order of the court on 15 April 2025 . I heard argument in
relation to costs on 17 April 2025 , pursuant to w hich the parties filed post hearing notes ,
the last of which was delivered on behalf of the applicants on 6 May 2025.
[10] Both parties accept that the ordinary rule, when the court determines the issue of
costs, is that costs follow the event . Their difference, on the main, was on whether there
is a party that can be regarded as having been successful in the present matter.
[11] It was submitted o n behalf of the respondents that the appropriate order as to
costs in the cir cumstances is to order each party to bear its own costs . This was
because determination of the main dispute has been rendered moot in circumstances
where it is not possible to det ermine which party has achieved substantial success.
[12] It was submitted on behalf of the applicants that the respondents should be
ordered to pay the applicants’ costs on an attorney and client scale , jointly and
severally , one paying the other to be absolved . These costs should include : (a) the
costs for the compilation of the joint expert report, including qualifying expe nses of Mr
Broekhuizen, (b) the costs of proceedings relating to the hearing set down to commence
on 14 April 2025, including the qualifying expenses of the experts Mr Broekhuizen and
Mr Du Plessis (for whom a Rule 36 (9) notice had been filed in these proceedings) and
(c) the costs relating to the March 2025 interlocutory application.
[13] The gist of the applicants ’ submissions w as summarised in the heads of
argument filed on their behalf as follows:
13.1 The compilation of the final report was necessitated by the respondents’
transgressions which gave rise to the 2015 order, and further, the
respondents’ announcement in 2018 that they wished to start
manufacturing flat wire and auger ;
13.2 Compiling the f inal report, and referring it to oral evidenc e, were
necessary steps that the respondents required to enable them to start
manufacturing lawfully ;
13.3 Steps taken after the delivery of the judgment by Bishop AJ to prepare for
the hearing and set the matter down were all necessary because the
respondents had failed to take the steps that Bishop AJ had stipulated as
requirements to avoid having to proceed to a hearing ;
13.4 Only at the very last minute, on 14 April 2015, did the respondents finally
capitulate , which gave rise to the settlement; and
13.5 The March 2025 interlocutory application was (1) not necessary , (2) ill-
conceived and (3) respondents sought to amend the relief they sought at
the 11th hour.
[14] Having r egard to the order that was taken by agreement between the parties on
15 April 2025, it was further submitted that the applicants have achieved substantial
success , when one has regard to the fact that the respondents effectively conceded that
they are not entitled to put their manufacturing plant into production . That concession ,
the argument goes, implies that the respondents’ manufacturing plant contained
constituent parts that infringed on the applicants’ confidential information and copyright .
Thus, effectively, the respondents have abandoned their defence and on the basis of
the trite principle s, the respondents are in the same position as an unsuccessful litigant.
There being no exceptional circumstances warranting departure from the principle that
costs should be awarded to the party which has been put to the expense of defending
withdrawn pro ceedings, it was submitted that the respondents should be ordered to pay
the applicants’ costs.
[15] Regarding the scale at which the costs should be recoverable, it was submitted
on the applicants’ behalf that these should be on an attorney and client sc ale because
(a) the applicants have been put through unnecessary trouble and expense which they
ought not to bear , and they should not be left out of pocket, (b) the respondents’
conduct in continuing to manufacture and sell flat wire and auger prior to the compilation
of the final report warrants this court’s rebuke, and (c) the respondents had it in their
hands to avoid further litigation after the judgment that was delivered by Bishop AJ.
[16] This application was settled on a basis that disposed of the merits and on the
authority of Jenkins1 this court should not have to hear evidence to decide the disputed
facts in order to decide who is liable for costs, but it must make a proper allocation as to
costs based on the material at its disposal.
[17] The material a t the court’s disposal i s that (a) the respondents announced their
intention to put their manufacturing plant into operation , which necessitated an
inspection, (b) the inspection culminated in a disagreement between the parties’
respective experts on whether regarding the infringement of the applicants’ confidential
information and copyright , and (c) such dispute had to be resol ved before the
respondents’ manufacturing plant could be put into production . As such , despite the
respondents’ contestation to the contrary, the main application was necessary .
[18] The respondents opposed the application on the basis that the manufactu ring
plant that they had commissioned did not infringe on the applicants’ confidential
information and copyright. During the course of the litigation, however, the respondents
advised of their intention to abandon that manufacturing plant in favour of anot her one
that they intended to commission. It was submitted on behalf of the applicants, correctly
so in my view, that the respondents’ abandonment of the manufacturing plant is akin to
1 Jenkins v SA Boilermakers, Iron & Steel & Ship Builders Society 1946 WLD 15
abandonment of proceedings or withdrawal of the application. The result, in my view , is
that the respondents should be liable for costs.
[19] The applicants were forced to incur the costs in relation to the inspection of the
respondents’ manufacturing pla nt and there is no reason why the respondents should
not be held liable for these costs.
[20] There is a part of the application that was determined by Bishop AJ , in respect of
which he made a cost order . The costs that are a subject of this judgment exc ludes any
of those costs that are covered by the order made by Bishop AJ.
[21] The applicants should also pay the costs relating to the March 2025 interlocutory
application . This is because the March 2025 interlocutory application was unnecessary
and unrelated to the issue that brought about the main application, namely the
difference of opinion between Mr Broekhuizen and Mr Bowles.
[22] As to the scale of the c osts, I am not persuaded that the costs on an attorney and
client scale are warranted. It was as early as prior to the hearing of the matter by Bishop
AJ, that the respondents indicated their intention to abandon the manufacturing plant, a
fact that should have result ed in the discontinuation of the application. That the litigati on
continued beyond that point is a matter that cannot be laid at the doorsteps of only the
respondents.
[23] The complexity of the application justified the costs of two counsel where so
employed , as well as costs of counsel on scale C.
Order
[24] In the result I make the following order:
24.1 The respondents are ordered to pay, jointly and severally, the costs of:
24.1.1 the preparation and completion of the joint report, which costs shall
include the qualifying expenses of the applicants’ expert , Mr Nick
Broekhuizen;
24.1.2 the costs of the hearing set down for 14 April 2025, which costs
shall include the qualifying fees of the experts , Mr Nick Broekhuizen
and Mr Andries Daniel Du Plessis, in respect of whom a Rule 36(9)
notice had been filed;
24.1.3 the applicants’ costs relating to the respondents’ application filed in
March 2025 .
24.2 The above costs shall be paid on a party and party scale and include,
where applicable, the costs of two counsel, on Scale C as contemplated in
Rule 69.
_____________________________
L G NUKU
JUDGE OF THE HIGH COURT
Appearances
For applicant s: J A Van Der Merwe SC and M de Wet
Instructed by: D Swart and Associates Inc t/a
Swart Attorneys , Stellenbosch
Care of: De Klerk & Van Gend Inc t/a
DKVG Attorneys, Cape Town
For respondent s: G Myburg SC
Instructed by: Faure and Faure Inc ,
Care of: Michalowsky, Geldenhuys and Humphries, Cape Town