REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
Case Number: 2023/116075
In the matter between:
PIETER ADRIAAN KOEGELENBERG Applicant
and
NEW GENERATION RIGGING (PTY) LTD First Respondent
STEFANUS TOLMAY Second Respondent
STANLEY NAUDE Third Respondent
CELE MAI TRADING (PTY) LTD Fourth Respondent
CALOUZEL TRADING (PTY) LTD Fifth Respondent
JUDGMENT
READ A.J
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: NO
______________ _
DATE SIGNATURE
04 Sept 2025
Introduction
[1] This matter concerns the determination of an appropriate costs order following
the withdrawal of an application by the Applicant, Mr Pieter Adriaan Koegelenberg,
against the Respondents. The issue before this Court is whether the Applicant
should be ordered to pay the costs of the abortive proceedings, and if so, on what
scale, or whether exceptional circumstances warrant a departure from the general
rule that costs follow the event.
Factual Matrix
[2] The Applicant launched the original application under case number
116075/2023 on the premise that he was a registered shareholder of the First
Respondent, New Generation Rigging (Pty) Ltd. This premise formed the bedrock
of his claim for relief under section 163 of the Companies Act, which provides
remedies specifically available to shareholders.
[3] Within one week of the application being issued, and before service had been
completed on all Respondents, the Respondents' attorneys addressed
correspondence to the Applicant's attorneys on 22 November 2023, informing them
that the Applicant was not, in fact, a registered shareholder of the Fir st
Respondent. The Applicant was invited at this early stage to reconsider the
application.
[4] Notwithstanding this indication of a defect in his case, the Applicant's attorneys
insisted on 24 November 2023 that the Respondents should file an answering
affidavit. Subsequently, an inspection of the share register was conducted on 13
December 2023, which established that the Applicant was not a registered
shareholder.
[5] The Applicant eventually withdrew the application and filed a replying affidavit
that dealt exclusively with the issue of costs rather than the merits of the underlying
dispute. No tender for costs accompanied the withdrawal.
Legal Framework
[6] The legal principles governing the award of costs in South African law are well-
established and require consideration of both the general rule and the
circumstances that may warrant departure therefrom. The fundamental principle is
that the award of costs lies within the judicial discretion of the court, which
discretion must be exercised judicially upon consideration of all relevant factors.
[7] The general rule, as consistently applied by our courts, is that costs follow the
event, meaning that the unsuccessful party bears the costs of the successful party.
However, this rule is subject to the over riding principle that the court retains
ultimate discretion to make such order as to costs as would be fair and just between
the parties in all the circumstances.
[8] Where an application has been withdrawn, the position of the withdrawing party
is analogous to that of an unsuccessful litigant, as the claim or application has
proven futile. The authorities establish that sound reasons must exist before a
defendant or respondent who has been put to the expense of opposing withdrawn
proceedings should be deprived of costs.
Respondents' Arguments
[9] The Respondents contend that the general rule should apply without
modification, given that they successfully resisted the application and the Applicant
has withdrawn the proceedings. They emphasise that the Applic ant was provided
with clear and early notice of the fundamental defect in his case but chose to persist
nonetheless.
[10] The Respondents further assert that the Applicant's conduct in insisting upon
the filing of an answering affidavit, despite being aware of the shortcomings in his
application, constituted an abuse of the court's processes. They contend that this
was done merely to obtain the Respondents' version on oath, which assertion finds
some support in the Applicant's subsequent launching of a fresh application under
case number 2024-057296.
[11] Additionally, the Respondents point to allegations of harassment and pressure
tactics employed during the investigative phase, which allegations were not denied
in the Applicant's replying affidavit. They a lso raise concerns regarding the
Applicant's financial capacity to meet any costs order, suggesting that the failure
to tender costs upon withdrawal reflects an inability to pay.
Applicant's Arguments
[12] The Applicant's defence rests upon the argument th at exceptional
circumstances exist which justify a departure from the general rule. Central to this
argument is the contention that the Respondents' conduct induced the bona fide
belief that he was indeed a registered shareholder of the First Respondent.
[13] The Applicant points to several factors that, he argues, reasonably led to this
belief: the existence of formal agreements styled as "Shareholders Agreement"
and "Agreement of Sale of Shares"; his treatment as a shareholder through
attendance at purported shareholders' meetings; receipt of what he believed to be
dividend payments; and representations by the Second Respondent that both he
and the Applicant were shareholders of the First Respondent.
[14] The Applicant further contends that the Respondent s have failed to provide
any adequate explanation for why the formal agreements were not implemented
and why he was not registered as a shareholder despite the contractual provisions
that appeared to require such registration. This silence, he argues, supp orts the
inference that the Respondents were complicit in creating the confusion that led to
the abortive application.
Assessment
[15] Having considered the totality of the evidence and the arguments advanced
by both parties, this Court must determine whether the circumstances of this case
justify a departure from the well-established general rule that costs follow the event,
particularly in the context of withdrawn proceedings.
[16] While the Court acknowledges that the Applicant may have held a genuine
[16] While the Court acknowledges that the Applicant may have held a genuine
belief that he was a shareholder based on certain documentary and circumstantial
evidence, this belief, however genuinely held, was ultimately incorrect. The law
places the risk of launching proceedings upon the party who institutes such
proceedings, and goo d faith alone does not absolve a litigant from the
consequences of an unsuccessful action.
[17] The fact that the Respondents provided early and clear notice of the
fundamental defect in the Applicant's case significantly undermines any argument
that the subsequent costs were unavoidably incurred. The Applicant was afforded
a reasonable opportunity to reconsider his position but chose instead to persist
with proceedings that were doomed to failure.
[18] The Applicant's insistence upon the filing of an answering affidavit after being
notified of the absence of registered shareholding suggests that the continuation
of the proceedings was motivated not by a reasonable prospect of success but
rather by a desire to obtain information through the litigation process, which would
constitute an improper use of the court's procedures.
[19] The subsequent launching of fresh proceedings under case number 2024 -
057296, which appears to traverse much the same factual territory but on a
different legal basis, tends to suppor t the inference that the Applicant was aware
that his original application was fundamentally flawed yet chose to persist with it
nonetheless.
[20] While the Court has considered the Applicant's argument regarding the
Respondents' alleged failure to explain the non-implementation of the agreements,
this factor alone cannot justify the departure from established principle that would
be required to absolve the Applicant of liability for costs. The burden remained
upon the Applicant to establish his locus stand i before instituting proceedings,
regardless of any perceived shortcomings in the Respondents' explanations.
Order
1. The Applicant is ordered to pay the Respondents' costs of the application on a
party and party basis and on scale C.
_____ _______
C. READ
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION, JOHANNESBURG
Heard on: 10 June 2025
Delivered on: September 2025
For the Applicant: Adv. G. Kairinos SC
Instructed by: Jurgens Bekker Attorneys
For the Respondent: Adv. D T R v Duplessis SC
Instructed by: HJ Van Rensburg Inc.
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