SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO: 32482/2020
DOH: 29 APRIL 2025
DOJ: 08 SEPTEMBER 2025
In the matter of:
W
ABEGAIL NTOMBIKHONA BOIKHUTSO Applicant/ Second Defendant
And
PGC GROUP (PTY) LTD First respondent / Plaintiff
WORKERS LIFE MANAGEMENT
SERVICES (PTY) LTD
Second Respondent / Plaintiff
1. REPORTABLE: NO/YES
2. OF INTEREST TO OTHER JUDGES:
NO/YES
3. REVISED.
…………..…………............. 08 September 2025
SIGNATURE DATE
Page 2
W
PGC INVESTMENT HOLDINGS (PTY)
LTD
Third Respondent / Plaintiff
WORKERS LIFE DIRECT (PTY) LTD Fourth Respondent/Plaintiff
In Re:
In the matter between
PGC GROUP (PTY) LTD First Plaintiff
WORKERS LIFE MANAGEMENT
SERVICES (PTY) LTD
Second Plaintiff
PGC INVESTMENT HOLDINGS (PTY)
LTD
Third Plaintiff
WORKERS LIFE DIRECT (PTY) LTD Fourth Plaintiff
This Judgment has been handed down remotely and shall be circulated to the parties by way of
email / uploading on Caselines. The date of hand down shall be deemed to be 08 September
2025
———————————————————————————————————————
ORDER
———————————————————————————————————————
1. The application succeeds.
Page 3
2. The respondents, jointly and severally, must furnish security to the applicant in the form of a
bank guarantee, payable on demand, in the amount of R2 000 000.
3. The respondents must pay the applicant’s costs, with counsel’s fees on scale B.
———————————————————————————————————————
JUDGMENT
———————————————————————————————————————
Bam J
Introduction
1. This is an interlocutory application, brought by the applicant, for an order directing
the respondents jointly and severally to furnish security for costs in the amount of R 2
000 000.00 (Two Million Rand). The applicant is the second defendant in an action
brought by the respondents, (plaintiffs). The applicant’s case for security is set out in
her founding papers. She makes the point that the action instituted against her by the
respondents is vexatious and or frivolous and amounts to abuse of the process of
this court and is hopelessly flawed. This conclusion appears to be drawn primarily
from two main grounds, namely, (a) the respondents’ refusal to join interested and
necessary parties to the litigation and (b) the respondents’ failure to plead the
common law fiduciary duties allegedly breached by the applicant. In this judgment, I
use second defendant interchangeably with applicant. Likewise, I use respondents
and plaintiffs to refer to the same persons. The full details of the parties are set out in
the plaintiffs’ particulars of claim, PoC.
Page 4
Background
2. The background to the present application may be stated thus: On 27 July 2020, the
respondents instituted an action against two defendants. The pleadings setting out
the plaintiffs’ case read in the relevant parts:
[10] The Second Defendant:
Was at all times a director of the first and fourth plaintiffs;
During the period 1 December 2016 until 31 March 2019, was the Deputy Group Finance
Director of the first plaintiff, and, as such, performed the same functions in respect of the first
plaintiff’s subsidiaries, including the second to the fourth plaintiffs.
[11] The first and second defendants, in their capacity as directors, in the case of the first
defendant, of the first, second, and third plaintiffs, and in the case of the second defendant,
of the first and fourth plaintiffs, owed the plaintiff the fiduciary and other duties set out in
Sections 76(2) and (3) of the Companies Act, 71 of 2008, (the Companies Act).
[12] The first defendant, in his capacity as Chief Executive Officer as aforesaid, and the
second defendant, in her capacity as Deputy Group Finance Director as aforesaid, owed, in
terms of the common law, a fiduciary duty to the first plaintiff and its subsidiaries, including
the second to the fourth plaintiffs.
[13] At all material times, the first and second defendants, in their capacity as directors and
employees, as aforesaid, each owed fiduciary duties to the plaintiffs, whether under common
law and/or Sections 76(2) and (3) of the Companies Act, including:
13.1 To act in the best interests of the plaintiffs;
13.2 To act honestly, diligently and ethically in all their dealings in relation to the plaintiffs;
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13.3 Not to use their position of director to gain advantage for themselves or for another
person other than the plaintiffs;
13.4 Not to knowingly cause harm to the plaintiffs.
13.5 To exercise their powers and perform their functions in good faith, for a proper purpose
and in the best interests of the plaintiffs; and
13.6 To act with a degree of care, skill and diligence that may reasonably be expected of a
person-
- carrying out the same functions in relation to the plaintiffs as those carried out by that
director;
- having the general knowledge, skill and experience in that director;
[14] The first and second defendants are liable for their dishonest acts, misconduct and
breaches as set out under Claims 1 to 8 and the first defendant is further liable…..
[15] The first and second defendants are held liable jointly and severally in respect of Claims
1 to 8 below under the common law and/or Section 77(6) of the Companies Act.
Claim 1
[16] On or about 14 July 2017, the Board of the first plaintiff approved a loan of R7 million to
Pan Africa Asset Management (PAAM).
[17] By 26 March 2019. It appeared that the loan amount exceeded the authorised amount of
R7 million by the amount of R 3 071 053, 70.
Page 6
[18] The first and second defendants, absent any authority, purported to authorise further
payments to be paid to PAAM, thereby causing the authorised amount to be exceeded.
[19] The first and second defendants’ actions in regard to the excessive loan were
intentional, [wrongful], unlawful, and amounted to a breach of their aforesaid fiduciary duties.
[20] The first and second defendants’ actions in respect of the excessive loan caused the first
plaintiff to suffer damages in the amount of R 3 071 053,70.
[21] In the premises, the first and second defendants are jointly and severally liable to the
first plaintiff for payment of R 3 071 053,70, in terms of the common law, breach of common
law fiduciary duties and/or
Claim 2:
22. The first and second defendants permitted and/or authorised non-executive directors of
PAAM to invoice the second plaintiff for so-called ‘consulting fees’. Same comprises of four
payments in the total amount of R 80 000,00, as set out int he table below. It [the table
below] reflects the amount of each payment, the name of he non-executive PAAM director,
the date on which payment was made, and the name of the person or entity who invoiced the
second plaintiff.
R 20 000,00: Mr Makhubalo Ndaba: 4/01/2019: Invoiced by Diamond Holdings
R 20 000,00 Ms Tembakazi Z Mnyaka: 4/01/2019: Invoiced by Obagystix (Pty) Ltd
R 20 000, 00 Ms Ntshekiwa Molefe: 1/03/2019: Ms Ntshekiwa Molefe
R 20 000,00 Mr Calvin Hanford Maseko: 13/03/2019: Seraph Investments (Pty) Ltd
Page 7
[23] The actions of first and second defendants, by authorising the issuing of the above
invoices and by allowing the various payments to be made by the second plaintiff to to the
respective recipients, were intentional, wrongful, unlawful, and amounted to a breach of their
aforesaid fiduciary duties.
[24] As a result of the first and second defendants’ actions, the second plaintiff suffered
damages in the amount of R 80 000,00.
[25] In the premises, the first and second defendants are jointly and severally liable to the
second plaintiff for payment of the amount of R 80 000,00, in terms of the common law,
breach of common law fiduciary duties and /or breach of their statutory duties under Sections
76(2) and (3) of the Companies Act.
Claim 3:
[26] The first and second defendants authorised and permitted payment in the total amount
of R 20 000 to be made by the third plaintiff for the so called ‘Board fees’ to persons who
were not directors of the third plaintiff as set out in the table below. It reflects the amount of
each payment, the name of the recipient, the date on which the payment was made, and the
party who invoiced the third plaintiff.
R 10 000,00: Philani Godfrey Mavundla: 4/03/2019: Invoiced by Mr Mavundla to PGC Inv
Holdings;
R 10 000,00: AFrozulu Ventura (Pty) Ltd: 29/03/2019: Mr B Zulu to PGC Inv Holding
[27] The actions of first and second defendants, by authorising the issuing of the above
invoices and by allowing the various payments to be made by the third plaintiff to to the
respective recipients, were intentional, wrongful, unlawful, and amounted to a breach of their
aforesaid fiduciary duties.
Page 8
[28] As a result of the first and second defendants’ actions, the second plaintiff suffered
damages in the amount of R 20 000,00.
[29] In the premises, the first and second defendants are jointly and severally liable to the
third plaintiff for payment of the amount of R 20 000,00, in terms of the common law, breach
of common law fiduciary duties and /or breach of their statutory duties under Sections 76(2)
and (3) of the Companies Act.
Claim 4:
[30] On or about 5 November 2018, the first and second defendants approved the lease of a
BMW X5 motor vehicle, Registration No. HS6[…] (BMW X5), at a monthly cost of R 25
227,45, and a company fuel card (which was approved on 7 November 2018) for use by one
Mr Abel Mphile Sibande (Mr Sibande), at the expense of the fourth plaintiff. Mr Sibande was
the Chief Executive Officer of PAAM, and was not employed by the Fourth Plaintiff at the
time.
[31] The costs incurred at the expense of the fourth plaintiff during the period 30 November
2018 to 18 May 2019, in respect of the BMW X5, was R 213 953,47, which costs included
the lease of the vehicle, insurance, fuel, oil, toll fees, Tracker, repairs, maintenance and other
related costs.
[32] The approval of the lease and the fuel card, and the purported authorisation given by the
first and the second defendants for the aforesaid expenses to be incurred, were not
authorised.
[33] The aforesaid actions of the first and second defendants in respect of the BMW X5 were
intentional, wrongful, unlawful and in breach of the aforesaid fiduciary duties.
[34] As a result of the first and second defendants’ actions, the fourth plaintiff suffered
damages in the amount of R 213 953,47.
Page 9
[29] In the premises, the first and second defendants are jointly and severally liable to the
fourth plaintiff for payment of the amount of R 213 953,47, in terms of the common law,
breach of common law fiduciary duties and /or breach of their statutory duties under Sections
76(2) and (3) of the Companies Act.
Claim 5:
[36] On or about 14 November 2018, the first and second defendants purported to authorise
the purchase by the fourth plaintiff of a BMW X3 motor vehicle, registration No. HT 3[….]
(BMW M3) for an amount of R 1 360 000,00, which amount was invoiced to and paid by the
fourth plaintiff for use by one Mr Muziwabafana, Aaron Masina (Mr Masina). Mr Masina was,
at the time, the Chief Investment Officer of PAAM, and was not employed by the fourth
plaintiff.
[37] The acquisition of the BMW M3 for the use by Mr Masina was unauthorised.
[38] Mr Masina used the BMW M3 from 13 December 2018 to 8 May 2019, at a total cost to
th fourth plaintiff in the amount of R 189 245,74, which amount includes the value of th use of
the BMW M3 and insurance.
[39] The aforesaid actions of the first and second defendants were intentional, wrongful,
unlawful and in breach of the aforesaid fiduciary duties.
[40] As a result of the first and second defendants’ aforesaid actions, the fourth plaintiff
suffered damages in the amount of R 189 245,74
[41] In the premises, the first and second defendants are jointly and severally liable to the
fourth plaintiff for payment of the amount of R 189 245,74 in terms of the common law,
breach of common law fiduciary duties and /or breach of their statutory duties under Sections
76(2) and (3) of the Companies Act.
Claim 6
Page 10
[42] By virtue of her position as director of the first plaintiff and as Deputy Group Finance
Director, the second defendant was entitled to the use of a company vehicle. Such vehicle
would be available for a period of 36 months or up to the date when it reaches mileage of
140, 000 kilometres, whichever is earlier.
[43] The second defendant would, in terms of her conditions of employment, become entitled
to purchase the vehicle at a full settlement cost to the company at the end of the three year
period, or when the mileage of 140 000 kilometres is reached.
[44] The second defendant, in terms of the above conditions, was given the use of a Land
Rover Discovery 4, SD V6 3.0 litre motor vehicle, Registration No. FP 0[…] (the Discovery),
when she commenced her employment as Deputy Group Finance Director on 1 December
2016.
[45] On 23 November 2018, before the expiry of the three year period, and when the mileage
of the Discovery was only 58,300 kilometres, the Discovery was replaced by a BMW X5
Facelift M5.OD Sport Steptronic, Registration No. HT 0[…] (the BMW).
[46] The first and second defendants purported to authorise the premature replacement of
the Discovery with the BMW, and the second defendant accepted the replacement vehicle.
Notwithstanding the replacement of the Discovery with the BMW, the second defendant
retained both vehicles for her own benefit and use, with the knowledge and consent of the
first defendant.
[47] On 19 March 2019, the second defendant entered into a written agreement with the
second plaintiff, purportedly represented by the first defendant, in terms of which the
Discovery was sold to the second defendant at a purchase price of R639 376,10. (A copy of
the agreement is attached hereto marked Annexure A)
[48] The Discovery was financed by Absa Bank. On 20 March 2019, first defendant purported
to authorise the second defendant to settle the amount of R 735 282,52, which was owing to
Absa Bank in respect of the Discovery.
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[49] In terms of the conditions applicable to company vehicles, the second defendant would
be entitled to purchase the Discovery at an amount equal to the settlement amount payable
to the finance house. However, in terms of the aforesaid written agreement, the second
defendant purchased the Discovery in the amount of R 95 906, 42 less than the settlement
amount.
[50] On March 2019, the second defendant, with the knowledge and consent of the first
defendant, caused the second plaintiff to extend the maintenance plan in respect of the
Discovery at the second plaintiff’s cost for an amount of R 118, 869, 59. The extension was
for a period of two years, or for a further R 60 000 kilometre.
[51] To the knowledge of the first and second defendants, the second defendant was not
entitled to have the Discovery replaced with the BMW on 23 November 2018, and was
supposed to use the Discovery as her company vehicle until 30 November 2019.
[52] As a result of the premature and irregular replacement of the Discovery with the BMW,
the second plaintiff incurred expenses in relation to the BMW over the period of 23 November
2018 to 26 November 2019, when the BMW was returned to the second plaintiff. The
expenses amounted to a total of R 441 761,41 over the period, which expenses include lease
costs, insurance fuel, oil, toll fees, Tracker, and related costs.
[53] The aforesaid actions of the first and second defendants, in relation to the premature
replacement of the Discovery with the BMW, the sale of the Discovery to the second
defendant at a reduced amount, the extension of the Discovery’s maintenance plan, and the
costs associated with the BMW were intentional, wrongful, unlawful and in breach of their
fiduciary duties as aforesaid.
[54] As a result of the first and second defendant’s aforesaid actions, the second plaintiff has
suffered damages in the total amount of R 656 537,42, made up as follows:
54.1 R 95 906,42; 54.2 R 118 869,59; and 54.3 R 441 761, 41.
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[55] In the premises, the first and second defendants are liable, jointly and severally, to the
second plaintiff for payment of the amount of R 657 537, 42, in terms of the common law,
breach of common law fiduciary duties and/breach of their statutory duties under Sections
76(2) and (3) of the Companies Act.
[56-64] Claim 7 is premised the allegation that the second defendant made available a
company mobile phone to her husband, which was meant for her use personally, and for her
work and official duties, in breach of the company conditions under which the mobile phone
was provided to her. It is said that the phone was used by the second defendant’s husband
from 1 December 2016 to 30 November 2019, which cost the second plaintiff an amount of R
2 199,00 monthly. The phone was made available to the husband with the knowledge of the
first defendant. The actions of the first and second defendant are said to have been
intentional, wrongful, unlawful, and/or in breach of the aforesaid fiduciary duties. In the
premises, the first and second defendant are held liable, jointly and severally, to the second
plaintiff for payment of the sum of R 79 164,00, in terms of the common law, breach of
common law fiduciary duties and/ore breach of their statutory duties under Section 76(2) and
(3) of the Companies Act.
Claim 8
[65] On or about 31 October 2018, the first and second defendants, absent any authority,
purported to authorise a payment to be made for purported ‘professional fees’ to an entity,
Phakama Investment Holding Proprietary Limited.
[66] The first and second defendants’ actions aforesaid, caused the second plaintiff to make
payment of the sum of R 1 500 000,00 to Phakama Investment Holdings Proprietary Limited.
[67] Phakama Investment is an unknown entity and no professional services were rendered
by it to the second plaintiff.
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[68] The first and second defendants’ actions in regard to the unauthorised payment in
aforesaid were intentional, wrongful, unlawful, and amounted to a breach of their fiduciary
duties.
[69] The first and second defendants’ actions caused the second plaintiff to suffer damages
in the amount of R 1 500 000.
[70] In the premises, the first and second defendants are jointly and severally liable to the
second plaintiff for payment of the amount of R 1 500 000,00, in terms of the common law,
breach of common law fiduciary duties and/or breach of their statutory duties under Sections
76(2) and (3) of the Companies Act.
Second Defendant’s Plea
3. In her plea of 28 September 2020, the second defendant raised six special pleas and
further pleaded over. In terms of the special pleas, the applicant pleaded that a
number of parties whom are mentioned in the plaintiff’s PoC ought to be joined as
co-defendants along with her as second defendant. The plaintiffs replicated alleging
that none of the parties the applicant seeks to have joined have any direct and
substantial interest in the action and that there is no legal interest which may be
affected prejudicially by any judgment granted in the action.
4. On 23 March, the applicant filed a notice to amend, as provided for in Rule 28 of the
Uniform Rules, to introduce three further special pleas, bringing the number of
special pleas to nine. She further amended her plea stating, inter alia, that the
plaintiffs’ particulars do not disclose the fiduciary duties she allegedly breached. The
notice to amend was met with an objection to the effect that the parties named in the
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special pleas have no direct and substantial interest and they have no legal interest
that may be affected prejudicially by any judgment this court may make. The
following parties according to the applicant ought to be joined as co-defendants in
the action with her as second defendant:
(i) Pan African Asset Management, PAAM, the entity referred to in claim 1 and 2 of the
plaintiff’s PoC;
(ii) Mr Philani Godfrey Mavundla, referred to in claim 3;
(iii) AfroZulu, referred to in claim 3;
(iv) Mr Abel Sibande, referred to in claim 4;
(v) Makhubalo Ndaba, referred to in claim 2;
(vi) Thembakazi Mnyaka, referred to in claim 2;
(vii) Ms Ntshekwa Molefe, referred to in claim 2;
(viii) Mr Calvin Hanford Maseko, referred to in claim 2;
(ix) Diamond Holdings (Pty) Ltd, referred to in claim 2;
(x) Obagystix (Pty) Ltd, referred to in claim 2;
(xi) Seraph Investments Investments (Pty) Ltd, an entity referred to in claim 2;
(xii) Legacy Auto (Pty) Ltd t/a Zambezi Auto, referred to in claim 4;
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(xiii) Mpho Dipela, who was, at the time of concluding the aforesaid lease, the respondents’
Group Director for Finance and a shareholder of Legacy Auto (Pty) Ltd t/a Zambezi Auto.
(xiv) Mr Makhubalo Ndaba, the respondents’ Group Legal and Company Secretary, who
approved payment of the amounts claimed from the applicant in claims 2 and 3.
5. In addition to the respondents’ refusal to join the individuals mentioned in paragraph
4(i) to (xiv), the applicant submits that in paragraph 13.5 of the particulars of claim
the respondents alleged that she owed them a fiduciary duty ‘to exercise …powers
and perform…functions in good faith, for a proper purpose and in the best interests
of the plaintiffs’. The allegation in paragraph 13.5, according to the applicant, mirror
what is stated in 76(3) (a) and (b) of the Companies Act, Act 71 of 2008. However,
the particulars of claim do not mention the powers and functions of a director that the
applicant exercised or performed in bad faith, for an improper purpose and not in the
best interests of the respondents.
6. In paragraph 13.6 of the PoC, the respondents allege that the applicant owed them a
fiduciary duty to ’act with a degree of care, skill and diligence that may be reasonably
expected of a director in such position. The allegation mirrors what is stated in
section 76 (3) (c) of the Companies Act. The applicant submits that the standard in
section 76 (3) (c) arises when ‘acting in the capacity of a director and exercising the
’powers’ and performing the functions of a director’.
Applicable legal principles
7. Rule 47 of the Uniform Rules reads, in the relevant parts:
Page 16
‘(1) A party entitled and desiring to demand security for costs from another shall, as soon as
practicable after the commencement of proceedings, deliver a notice setting forth the
grounds upon which such security is claimed, and the amount demanded.
(4) The court may, if security be not given within a reasonable time, dismiss any proceedings
instituted or strike out any pleadings filed by the party in default, or make such other order as
to it may seem meet.’
8. It is trite that, a court entertaining an application for security for costs is not required
to attempt to resolve the dispute between the parties. In Boost Sports Africa (Pty) Ltd
v The South Africa Breweries (Pty) Ltd1, it was said:
‘It is not envisaged, it seems to us, that a detailed investigation of the merits of the case
should be undertaken. Nor, is it contemplated that there should be a close investigation of
the facts in issue in the action.
9. The focus when evaluating applications for security is no longer centred on the
question whether an incola company may be able to satisfy a costs order. As
suggested in Boost:
‘[I]n terms of the common law mere inability by an incola to satisfy a potential costs order
is insufficient to justify an order for security, something more is required (Ramsamy NO v
Maarman NO 2002 (6) SA 159 (C) 172I-J). As Thring J put it (Ramsamy NO at 172J-
173A):
‘[w]hat this something is has been variously described in a number of decisions. Thus in
Ecker v Dean . . . it was said that the basis of granting an order for security was that the
1 (20156/2014) [2015] ZASCA 93 (1 June 2015), paragraph 19
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action was ‘reckless and vexatious’.’ In Ecker v Dean 1937 AD 254 at 259, Curlewis CJ
stated:
‘In Western Assurance Co. v Caldwell’s Trustee (1918, A.D. 262) this Court laid down
that a Court of law had inherent jurisdiction to stop or prevent a vexatious action as
being an abuse of the process of the Court; one of the ways of doing so is by ordering
the vexatious litigant to give security for the costs of the other side, and I know of no
reason why the Court below should not have [exercised] such an inherent jurisdiction.’
10. Courts are alive to the significant damage that may be caused to others were
measures such as ordering security to be forgone, as noted in this passage in Boost
‘[27] In the language of Lombard (at 877), when a company has everything to gain and
nothing to lose, it would be putting a premium upon vexatious and speculative actions if
such practice (namely, compelling security) were not adopted.’
Standards of directors as provided for in the Companies Act [2008 Act]
11. Section 76 (2) and (3) of the Companies reads:
‘A director of a company must:-
(a) not use the position of director, or any information obtained while acting in the capacity
of a director-
(i) to gain an advantage for the director, or for another person other than the company or
a wholly-owned subsidiary of the company; or
(ii) to knowingly cause harm to the company or a subsidiary of the company; and
(b) communicate to the board at the earliest practicable opportunity any information
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that comes to the director‟s attention, unless the director-
(i) reasonably believes that the information is-
(aa) immaterial to the company; or
(bb) generally available to the public, or known to the other directors; or
(ii) is bound not to disclose that information by a legal or ethical obligation of
confidentiality.
(3) Subject to subsections (4) and (5), a director of a company, when acting in that
capacity, must exercise the powers and perform the functions of director-
(a) in good faith and for a proper purpose;
(b) in the best interests of the company; and
(c) with the degree of care, skill and diligence that may reasonably be expected of a
person-
(i) carrying out the same functions in relation to the company as those carried out by that
director; and
(ii) having the general knowledge, skill and experience of that director.
12. Section 77(6) provides:
(6) The liability of a person in terms of this section is joint and several with any other
person who is or may be held liable for the same act.
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Discussion
13. As I see it, the complaint raised by the applicant against the respondents’ reliance
on the broad claim of ‘breach of fiduciary duties’ means that the applicant cannot
effectively respond or defend herself against these allegations. There are many
examples one can raise but for purposes of this judgment, bearing in mind that this
court is not called upon to resolve the dispute between the parties, few but striking
examples will suffice to make the point. In paragraph 13 of the PoC, the applicants
set out conclusions of law about what constitutes fiduciary duties. But what is
pleaded in claims 1 to 8 bears no relationship with the conclusions of law. Consider
for example what is pleaded in claim 1, that the Board had approved a loan of R7
million to PAAM, a subsidiary of one of the plaintiffs, in 2017. Two years later, the
plaintiffs find that the loan payments made to the subsidiary were in excess of the
amount approved by the Board. The question raised by the applicant is whether this
is a breach of a statutory or common law fiduciary duty? More importantly, does the
payment to a subsidiary of amounts more than that approved by the board constitute
a breach of the duty to act in the best interests of the plaintiffs, or a breach of the
duty to act honestly, or a breach of the duty to act diligently, or a breach of the duty
to act ethically or that the applicant used the payment to take advantage for herself?
14. On this very claim, there is a follow up question based on the manner the
respondents have chosen to plead their case. That question is, what are the
circumstances that led to the subsidiary not repaying the loan, given the claim for
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damages. Further questions relate to the joinder. I save them for now until I get to the
joinder point.
15. A further question arises from the respondents’ reliance on the statutory fiduciary
duties premised on Section 76(2) for their claims for damages. Save for claim 1
virtually all the claims rely on this section for liability, including Section 76(3). Broadly
stated, the section proscribes the use of a director’s position or information obtained
while acting in the capacity of a director, to gain advantage for the director, or for
another person other than the company or a wholly-owned subsidiary of the
company. For example, conduct such as insider trading would fall squarely within the
parameters of section 76(2). However, nothing resembling insider trading or the use
of company information to make gain for herself or another person is pleaded in any
of the claims. Given the respondents’ reliance on the section, the question remains,
what information as envisaged in Section 76(2) came to the attention of the applicant
as director that she is said to have used in breach of the section.
16. There is more. Section 77 deals with liability of directors and prescribed officers and
it reads:
(1) In this section, “director” includes an alternate director, and-
(a) a prescribed officer; or
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(b) a person who is a member of a committee of a board of a company, or of the audit
committee of a company, irrespective of whether or not the person is also a member of the
company‟s board.
17. In terms of Section 77(6) liability of a person in terms of this section is joint and
several with any other person who is or may be held liable for the same act. In the
majority of the charges, several entities and or individuals supposedly benefitted from
the applicant’s alleged breach of her fiduciary duties. When the applicant pleaded
non-joinder alleging that the individuals mentioned in the claims ought to have been
joined as co-defendants, the plaintiffs replicated stating that none of these individuals
have any direct and substantial interest in the matters raised. This reasoning goes
contrary to the established legal position. In Breetzke and Others NNO v Alexander
NO and Others), Mr Alexander, a trustee, cited as the first respondent, was alleged
to have made a secret profit in disposing of the trust’s property by selling it to a
company he had nominated and which he owned and controlled, Ziningi Properties
(Pty) Ltd, the second respondent. The question arose,
‘[I]f an independent third party knows of a trustee's breach of the fiduciary duty owed to a
trust and acts in a manner that aids the trustee's wrongful conduct, or enables or
facilitates the breach of trust to occur, is it liable to either the trust or the beneficiaries of a
trust for the losses they have suffered arising from the breach of trust?
18. The first and second respondents, defending themselves argued, inter alia, that
Ziningi was not a trustee of the Trust; that it owed no fiduciary duty to the Trust, its
trustees or its beneficiaries; that mere knowledge on Ziningi’s part that Mr Alexander
was engaged in breaching the fiduciary duties that he owed to the Trust and the
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beneficiaries of the Trust, did not impose upon Ziningi the same or similar fiduciary
duties. The court pointed to the established principle that,
‘[17]A person assisting a trustee in the perpetration of a breach of trust is jointly liable with
him or her.’
19. The court went on to hold:
‘[37] Where the execution of a breach of fiduciary duty involves or requires the
involvement or participation of a third party, and that third party has knowledge that the
transaction in question involves a breach of a fiduciary duty, it seems to me clear that the
legal convictions of the community demand that the third party share the liability of the
person breaching the fiduciary duty. That is not because they owe a similar duty to the
injured party, but because by aiding, enabling or facilitating the breach they are
themselves equally responsible for the injury caused to, or the loss suffered by, the injured
party. I can think of no good reason why the principal perpetrator would be liable, but the
enabler should escape liability,..’
The proposed amendment
20. I mention in passing that there is currently an impasse between the parties
pertaining to an an amendment proposed by the applicant. The respondents, as
mentioned early on in this judgment objected to the amendment, forcing the applicant
to come to court for leave to amend. The principles pertaining to the amendment of
pleadings are set out in Affordable Medicines Trust and Others v Minister of Health
and Another. Here the court stated:
‘The principles governing the granting or refusal of an amendment have been set out in a
number of cases. There is a useful collection of these cases and the governing principles
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in Commercial Union Assurance Co Ltd v Waymark NO. The practical rule that emerges
from these cases is that amendments will always be allowed unless the amendment is
mala fide (made in bad faith) or unless the amendment will cause an injustice to the other
side which cannot be cured by an appropriate order for costs, or “unless the parties
cannot be put back for the purposes of justice in the same position as they were when the
pleading which it is sought to amend was filed.” These principles apply equally to a Notice
of Motion. The question in each case, therefore, is what do the interests of justice
demand.’2
21. The extract I have set out in paragraph 19 demonstrates that a party seeking to
successfully oppose a proposed amendment must demonstrate that allowing the
amendment would be detrimental to the interests of justice. I need not answer
whether the respondents have or are likely to overcome that requirement because
the application for leave to amend is not before me. Having said, the matters
canvassed in this judgment appear point to one conclusion, and that is, there may
well be substance to the applicant’s complaints. The plaintiffs’ refusal or neglect to
properly plead their claims against the applicant and their refusal to join individuals
who must by law be joined serve to bolster the applicant’s conclusion that the
litigation is vexatious and frivolous, while the applicant is being put through the
unnecessary burden of funding such litigation in the High Court. The respondents
must be called upon to furnish security to the applicant.
Conclusion on costs
2 (CCT27/04) [2005] ZACC 3; 2006 (3) SA 247 (CC); 2005 (6) BCLR 529 (CC) (11 March 2005), paragraph 9
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22. The applicant seeks costs on a punitive scale. I have no basis to grant costs on a
punitive scale and so costs will be paid at ordinary scale.
Order
1. The application succeeds.
2. The respondents, jointly and severally, must furnish security to the applicant in the
form of a bank guarantee, payable on demand, in the amount of R2 000 000.
3. The respondents must pay the applicant’s costs, with counsel’s fees on scale B.
__________________________
N.N BAM
JUDGE OF THE HIGH COURT,
GAUTENG DIVISION,
PRETORIA
Date of Hearing: 29 April 2025
Date of Judgment: 08 September 2025
Page 25
Appearances:
Counsel for Applicant / Second Defendant Adv P Mbana
Instructed by: Fenyane & Associates Inc
c/o TIDK Attorneys Inc
Centurion, Pretoria
Counsel for Respondents / Plaintiffs: Adv L Hollander
Instructed by: LDA Attorneys
℅ Hills Incorporated Attorneys,
Brooklyn, Pretoria