Brief Summary

Costs — Attorney-client costs — Appeal against de bonis propriis costs orders against liquidators and their attorney in interlocutory applications. The court ruled that costs orders can be made without formal joinder, provided that the affected parties are given notice and an opportunity to be heard. The appeal was partially upheld, modifying certain costs orders.

Comprehensive Summary

Summary of Judgment

Introduction

This judgment concerns an appeal against two interlocutory costs orders made in the Western Cape Division of the High Court. The orders were punitive in two respects: they were made on the attorney-and-client scale and were directed de bonis propriis (personally), against office-bearers who had litigated in a representative capacity and, in one instance, against their attorney.

The appellants were the co-liquidators of Cygne Bleu (Pty) Ltd (in liquidation), cited as the first and second appellants, together with the attorney who acted for them (the fourth appellant). The first respondent was The Standard Bank of South Africa Ltd, together with certain of its employees (cited as the second to fourth respondents in the appeal). Other respondents included the Master of the High Court (Cape Town), a commissioner appointed in related enquiry proceedings, and other entities connected to the broader liquidation and trading disputes.

The appeal arose out of procedural events in a principal application launched in September 2022 by Standard Bank and its employees. In that main application, they sought orders declaring a companies enquiry convened under sections 417–418 of the Companies Act 61 of 1973 to be an irregular proceeding and sought to have evidence given in a specified period “set aside”. The liquidators opposed the main application and later launched an interlocutory application seeking leave to file a supplementary answering affidavit, together with other ancillary relief. Standard Bank then brought its own interlocutory strike-out application directed at paragraphs in that supplementary affidavit. The court a quo (De Waal AJ) ultimately dismissed the liquidators’ attempt to admit the supplementary affidavit, upheld Standard Bank’s strike-out application, and made punitive personal costs orders in relation to those interlocutory steps.

Leave to appeal was granted by the Supreme Court of Appeal, and the appeal was heard by a full court of the Western Cape Division (Erasmus, Sher and Ralarala JJ). The appeal was directed at the propriety of the interlocutory orders insofar as they (i) struck out portions of a supplementary affidavit before deciding whether that affidavit was admissible, and (ii) imposed de bonis propriis costs without a prior personal joinder of the affected liquidators and attorney.

Material Facts

The litigation was rooted in complex background circumstances involving alleged fraudulent or unlawful activity connected to the trading, clearing, and settlement of derivative instruments through a clearing house (Cratos Capital (Pty) Ltd). Although the full court treated those background allegations as not necessary to determine the appeal, it accepted that they provided the context for the subsequent liquidation and enquiry proceedings.

It was common cause that an enquiry into the affairs of the company in liquidation (Cygne Bleu (Pty) Ltd) was convened under sections 417–418 of the Companies Act 61 of 1973, with evidence taken across 2021 and 2022 before a commissioner appointed by the Master. Standard Bank and its employees later launched the main application seeking to declare the enquiry irregular and to set aside evidence given in July 2022, on the basis that they should not have been involved in the enquiry because they were allegedly not concerned with the affairs of the company.

The procedural facts material to the appeal concerned the interlocutory steps shortly before the hearing of the main application. After answering and replying affidavits had closed and the matter had been set down for hearing, the liquidators filed an interlocutory application on 18 October 2023 seeking leave to file a supplementary answering affidavit, together with relief directed at the replying affidavit and condonation to use the entire enquiry record. The supplementary affidavit sought to place before the court the entire transcript of the section 417–418 enquiry (over 3000 pages), on the basis that it was “imperative” for the court to read it to gain a “full and clear picture” of what was alleged to have occurred.

In response, Standard Bank and its employees brought a further interlocutory application to strike out multiple paragraphs from the supplementary answering affidavit as scandalous, vexatious, and irrelevant. They contended that the paragraphs amounted to a personal attack on their senior counsel and attorney. A conditional application was also launched seeking leave for their legal representatives to intervene in a personal capacity. Standard Bank further opposed the liquidators’ attempt to admit the supplementary affidavit, contending that the affidavit and the enquiry record were wholly irrelevant.

At a pre-hearing meeting it was agreed that the main application could not proceed on the allocated date, and that the hearing day would instead be used to argue the interlocutory applications and address liability for wasted costs occasioned by the postponement.

At the hearing, the liquidators withdrew their own strike-out application, leaving only costs relating to that withdrawn step. The court a quo nevertheless proceeded to decide the remaining interlocutory issues. It (i) upheld Standard Bank’s strike-out application against portions of the supplementary answering affidavit, and (ii) dismissed the liquidators’ application to admit that supplementary affidavit. It then made de bonis propriis attorney-and-client costs orders in relation to those interlocutory proceedings: one order against the first liquidator and the liquidators’ attorney jointly and severally (connected to the strike-out application), and another order against both liquidators personally (connected to the failed application to admit the supplementary affidavit).

On appeal, it was not in dispute that the application to admit the supplementary answering affidavit had been correctly dismissed. The appellants’ primary contention was that the punitive personal costs orders were flawed in law and procedure, particularly because the court a quo had entertained and granted a strike-out application directed at a “further affidavit” before deciding whether to admit that affidavit into the record.

Legal Issues

The appeal required determination of several interrelated legal questions, principally concerning the proper interpretation and sequencing of Uniform Rule 6 procedures, and the fairness requirements applicable to punitive costs orders.

A central issue was a question of law and procedural competence: whether the power under Uniform Rule 6(15) to strike out scandalous, vexatious, or irrelevant matter “from any affidavit” may be exercised in relation to a supplementary answering affidavit that has not yet been admitted by the court under Uniform Rule 6(5)(e). Closely connected was whether it was procedurally permissible to uphold a strike-out application and make costs orders in relation to an affidavit that the court later rules inadmissible in its entirety.

A further legal issue concerned procedural fairness and the relationship between joinder and audi alteram partem: whether a court may make de bonis propriis costs orders (including against legal practitioners) without formally joining the affected liquidators and attorney in their personal capacities, or whether it suffices that they are given notice and an opportunity to be heard.

A fact-sensitive application-of-law question arose regarding the second liquidator’s personal liability: whether the court a quo misdirected itself in mulcting the second liquidator in costs de bonis propriis, given her role was limited to a confirmatory affidavit and she was not the deponent to the supplementary answering affidavit containing the offensive matter.

Finally, the appeal implicated the well-established principle that costs are generally discretionary and that appellate interference is limited to instances of material misdirection or reliance on a wrong principle.

Court’s Reasoning

De bonis propriis and punitive costs: governing approach

The full court reaffirmed that attorney-and-client costs and de bonis propriis costs are each punitive and extraordinary measures, not to be granted routinely but only in exceptional circumstances. It emphasised that these are conceptually distinct: a personal costs order does not necessarily entail attorney-and-client costs, and the imposition of attorney-and-client costs in a personal costs order may constitute an additional punitive element that has been described as a form of “double punishment”. The court noted that, although the tests for the two forms of costs may overlap, they require independent consideration.

The court further restated that the award of costs falls within the trial court’s discretion and that appellate interference is limited. An appeal court may intervene only where the discretion was not exercised judicially, including where the court a quo acted under a wrong principle, materially misdirected itself on the facts or law, or reached a decision that could not reasonably have been made on a proper application of the relevant principles.

Interpretation of Rule 6(15) and the sequencing problem

The full court’s main legal analysis concerned the interpretation of Uniform Rule 6(15) in its context within Uniform Rule 6 as a whole. Applying the interpretive approach associated with Natal Joint Municipal Pension Fund v Endumeni Municipality and Capitec Bank Holdings Ltd v Coral Lagoon Investments 194 (Pty) Ltd, the court examined the language of Rule 6(15), its placement within Rule 6, and the purpose served by affidavits in application proceedings.

The court reasoned that motion proceedings are structured around three principal affidavits—founding, answering, and replying—which serve an evidentiary and issue-defining function. Rule 6(5)(e) allows a court, in its discretion, to permit “further affidavits” beyond those primary sets. The court relied on authority to the effect that a party has no right to “simply slip” a further affidavit into the record: absent leave, such an affidavit may be treated as pro non scripto. On that basis, the court concluded that a “further affidavit” is not properly part of the record until the court grants leave for its admission.

Against that background, the court held that the phrase “any affidavit” in Rule 6(15) could not sensibly be read to include an affidavit that is not yet properly before the court. The strike-out power, on this analysis, is exercisable only in respect of affidavits that are part of the record by right (founding, answering, replying) or have become part of the record because the court has permitted their filing as “further affidavits” under Rule 6(5)(e). The court considered it illogical and inefficient to strike material from an affidavit that might immediately thereafter be refused admission in its entirety, and it identified the risk of unfairness through duplicative costs consequences.

The court also treated the approach adopted by the court a quo as producing an additional anomaly in the present case. Having first struck out portions of the supplementary affidavit and then refused admission of the entire affidavit, the court a quo nevertheless had regard to the supplementary affidavit “in its unexpurgated state” when determining costs. The full court characterised this as a further material misdirection.

The respondents had argued that Rule 6(15) does not prescribe when a strike-out application must be heard and that the High Court is empowered under section 173 of the Constitution to regulate its own process. The full court did not accept that this justified entertaining a strike-out application in respect of a further affidavit that had not yet been admitted. It also addressed Rule 6(11) and Rule 6(12), noting that interlocutory and urgent applications typically follow the same basic affidavit sequence, and that those provisions did not undermine the principle that an affidavit must be properly before the court before strike-out relief can competently be granted.

On this basis, the full court held that the order upholding Standard Bank’s strike-out application could not stand, because the supplementary answering affidavit had ultimately been ruled inadmissible and was therefore not properly part of the record for the purposes of Rule 6(15) when the strike-out relief was granted.

Non-joinder versus audi alteram partem for personal costs orders

The appellants contended that the costs orders were invalid because they had not been joined in their personal capacities, relying on Black Sash Trust v Minister of Social Development (Freedom Under Law NPC Intervening) and Ex parte Minister of Home Affairs; In re: Lawyers for Human Rights v Minister of Home Affairs. The full court approached this by carefully distinguishing between joinder (based on a “direct and substantial interest” that is legally cognisable in the outcome of the substantive relief) and the audi alteram partem requirement (the right to be heard before a prejudicial order is made).

The court held that the liquidators’ direct and substantial interest in the proceedings was their representative interest as liquidators in opposing the main application and seeking to place evidence before court. Their exposure to personal costs liability arose as a secondary matter connected to their conduct in interlocutory steps, and amounted to a financial interest incidental to the main relief. The court considered that any order on the merits of the principal application could be sustained without necessarily prejudicing their personal interests. Consequently, the court concluded that personal joinder was not required for a de bonis propriis costs order; it sufficed that the affected persons were given notice and a proper opportunity to make representations.

In relation to Black Sash Trust and Ex parte Minister of Home Affairs, the full court read those decisions as reflecting a procedural mechanism adopted to ensure audi alteram partem—formal joinder being described there as “one way” (and “the safest” way) to achieve that end—rather than establishing a universal requirement that representative litigants must always be joined personally before personal costs orders can be made.

The court reached a similar conclusion regarding the attorney. It stated that, as far as it was aware, it had never been held that a legal practitioner must be formally joined to proceedings before a de bonis propriis costs order may be made against them, provided that the practitioner is afforded a proper opportunity to be heard. It also rejected the submission that joinder was necessary to secure standing to appeal, noting that appellate courts have accepted that legal practitioners against whom such orders are made may seek leave to appeal and prosecute the appeal in their own names.

The second liquidator’s personal liability

The full court rejected the argument that the second liquidator should not have been held personally liable because she was not the author of the supplementary answering affidavit. It emphasised that liquidators occupy a position of trust and must exercise a high standard of care and diligence. In the court’s view, the application to admit the supplementary affidavit was brought on behalf of both liquidators in their capacity as joint liquidators, and the second liquidator’s confirmatory affidavit indicated that she had authorised the first liquidator to attend to the administration and litigation for the estate.

The court reasoned that, given her fiduciary responsibilities, she had an obligation to ensure that litigation pursued on behalf of the insolvent estate was not frivolous or ill-conceived, and did not expose the estate to unnecessary risk and costs. On the court’s account, if she read the supplementary affidavit—as she must have in order to confirm it insofar as it related to her—she would have seen both the personal attacks on the Bank’s legal representatives and the attempt to introduce the entire 3000-page enquiry record without identifying relevant portions. The court considered that a reasonable and prudent liquidator should have appreciated the irregular and risky nature of that approach. The absence of any explanation for her failure to intervene or prevent the application from proceeding in that form supported the conclusion that she failed to meet required standards and was grossly negligent. The court therefore found no basis to interfere with the de bonis propriis costs order made against her.

Appeal record and abuse of process

Although the appeal substantially concerned interlocutory costs orders, the full court also addressed the manner in which the appeal was prosecuted. It held that the inclusion of the entire enquiry record (over 3000 pages) in the appeal record—despite only limited portions being relevant to the appeal—constituted an abuse of process warranting censure. As a remedial measure, the court limited the extent to which the appellants’ legal representatives could recover fees from the insolvent estate for record-related work.

Outcome and Relief

The full court dismissed the appeal save for limited relief related to the order upholding Standard Bank’s strike-out application. It held that the court a quo had erred in granting strike-out relief in respect of a supplementary answering affidavit before deciding whether that affidavit was admissible and, in circumstances where the affidavit was ultimately ruled inadmissible, the strike-out order could not stand.

The court therefore set aside paragraph (b) of the court a quo’s order (the portion upholding the Bank’s strike-out application) and replaced it with an order dismissing that strike-out application, with no order as to costs. The court nonetheless indicated that Standard Bank acted appropriately and prudently in bringing the strike-out application as a protective measure, in case the supplementary affidavit were admitted.

The appeal failed in respect of the punitive costs order linked to the liquidators’ unsuccessful attempt to admit the supplementary answering affidavit. The court accepted that the affidavit had been tendered extremely late without satisfactory explanation, and that its contents were scandalous, vexatious, and wholly irrelevant; in those circumstances a de bonis propriis order was regarded as warranted. The court also declined to interfere with the de bonis propriis order made against the second liquidator.

As to the costs of the appeal itself, the court made no order as to costs, reasoning that both sides achieved a measure of success.

Finally, as a sanction related to the excessive appeal record, the court ordered that the appellants’ legal representatives were entitled to charge or recover from the insolvent estate of the company in liquidation no more than 10% of the fees incurred for copying, preparing, and perusing the appeal record.

Cases Cited

The judgment referenced, amongst others, the following authorities: Cratos Capital (Pty) Ltd v Zimri Investments CC & Another [2022] ZAWCHC 87; Ex parte Minister of Home Affairs & Others; In re: Lawyers for Human Rights v Minister of Home Affairs & Others [2023] ZACC 34; 2024 (2) SA 58 (CC); Black Sash Trust v Minister of Social Development (Freedom Under Law NPC Intervening) [2017] ZACC 20; 2017 (9) BCLR 1089 (CC); Public Protector v South African Reserve Bank [2019] ZACC 29; 2019 (6) SA 253 (CC); Public Protector v Commissioner, South African Revenue Services & Others [2020] ZACC 28; 2022 (1) SA 340 (CC); Road Accident Fund v Hlatshwayo & Others [2025] ZASCA 17; CB & Another v HB [2020] ZASCA 178; 2021 (6) SA 332 (SCA); Chithi & Others; In re: Luhlwini Mchunu Community v Hancock & Others [2021] ZASCA 123; Kgoro Consortium (Pty) Ltd & Another v Cedar Park Properties 39 (Pty) Ltd & Others [2022] ZASCA 65; City of Ekurhuleni Metropolitan Municipality v Takubiga Trading & Projects CC & Others [2022] ZASCA 82; 2023 (1) SA 44 (SCA); MEG for Health, Gauteng v Lushaba [2016] ZACC 16; 2017 (1) SA 106 (CC); Pheko v Ekurhuleni Metropolitan Municipality (No. 2) [2015] ZACC 10; 2015 (5) SA 600 (CC); South African Liquor Traders Association & Others v Chairperson, Gauteng Liquor Board & Others [2006] ZACC 7; 2009 (1) SA 565 (CC); Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593 (SCA); Capitec Bank Holdings Ltd & Another v Coral Lagoon Investments 194 (Pty) Ltd & Others [2021] ZASCA 99; 2022 (1) SA 100 (SCA); International Exports (Pty) Ltd v Fowles 1999 (2) SA 1045 (SCA); Florence v Government of the Republic of South Africa [2014] ZACC 22; 2014 (6) SA 456 (CC); Standard Bank of South Africa Ltd v Sewpersadh 2005 (4) SA 148 (C); Hano Trading CC v JR 209 Investments (Pty) Ltd 2013 (4) SA 161 (SCA); Snyders & Others v De Jager & Others [2016] ZACC 54; 2017 (5) BCLR 606 (CC); Gordon v Department of Health, KwaZulu-Natal [2008] ZASCA 99; 2008 (6) SA 522 (SCA); De Beer NO v North-Central Local Council & South-Central Local Council [2001] ZACC 9; 2002 (1) SA 429 (CC); Selective Empowerment Investments Ltd v Companies and Intellectual Property Commission [2025] ZASCA 71; 2025 (3) All SA 365 (SCA).

Legislation Cited

The judgment referred to the Constitution of the Republic of South Africa, 1996, particularly section 173 (the inherent power of superior courts to regulate their own process). It also referenced the Companies Act 61 of 1973, specifically sections 417–418 (enquiry procedures) and section 417(7) (privacy and confidentiality of enquiry proceedings, subject to direction otherwise).

Rules of Court Cited

The judgment cited provisions of the Uniform Rules of Court, including Rule 6(15) (strike-out of scandalous, vexatious, or irrelevant matter from affidavits), Rule 6(5)(e) (further affidavits only with the court’s permission), Rule 6(11) (interlocutory and incidental applications supported by such affidavits as the case may require), Rule 6(12) (urgent applications and departure from forms, as far as practicable in terms of the rules), and Rule 10 (joinder, referenced in discussing joinder principles).

Held

The full court held that the strike-out power in Uniform Rule 6(15) is exercisable only in relation to affidavits that are properly part of the record in application proceedings, namely the founding, answering, and replying affidavits, or a further affidavit that has been admitted under Uniform Rule 6(5)(e). An affidavit tendered as a “further affidavit” is not properly before court until the court grants leave to file it; accordingly, an application to strike out parts of such an affidavit can only properly be entertained after admission has been permitted.

The court further held that de bonis propriis costs orders may be made against liquidators and legal practitioners without personal joinder, provided that the affected persons are afforded audi alteram partem, namely notice that such an order is sought and an adequate opportunity to be heard. It distinguished the legal requirements for joinder (a direct and substantial legally cognisable interest in the outcome of the substantive relief) from the fairness requirement of audi alteram partem when a prejudicial order is contemplated.

Applying these principles, the court set aside the order upholding Standard Bank’s strike-out application (because the supplementary answering affidavit was not admitted and was therefore not properly part of the record for Rule 6(15) purposes), and replaced it with a dismissal of that application without costs. It otherwise upheld the punitive personal costs consequences related to the unsuccessful attempt to admit the supplementary answering affidavit, including as against the second liquidator, and imposed a further sanction limiting recoverable fees from the insolvent estate for the unnecessary inclusion of an excessive appeal record.

LEGAL PRINCIPLES

A court’s discretion on costs is a “true” discretion exercised judicially, and an appellate court will interfere only where there is reliance on a wrong principle, a material misdirection on law or fact, or an outcome that could not reasonably have been reached on proper direction.

De bonis propriis costs and attorney-and-client costs are each punitive and extraordinary. Their imposition requires caution and justification on the facts, and they are analytically distinct; the award of attorney-and-client costs as part of a personal costs order can constitute an additional punitive layer that requires separate justification.

In motion proceedings, affidavits serve both an evidentiary function and define the issues. Under Uniform Rule 6, parties are ordinarily confined to founding, answering, and replying affidavits. A “further affidavit” may be filed only if the court grants leave under Rule 6(5)(e); absent such leave, a further affidavit is not properly part of the record and may be treated as pro non scripto.

The power under Uniform Rule 6(15) to strike scandalous, vexatious, or irrelevant matter “from any affidavit” is properly understood, in context, as extending only to affidavits properly before court as part of the application record (including further affidavits admitted with leave). It is procedurally unsound to strike material from an affidavit that has not yet been admitted under Rule 6(5)(e).

A personal costs order may be imposed on an office-bearer litigating in a representative capacity, or on a legal practitioner, without formal personal joinder, provided the affected person is given notice and a fair opportunity to make representations (audi alteram partem). Joinder is concerned with a direct and substantial legally cognisable interest in the substantive outcome; exposure to incidental financial prejudice through a costs order does not, without more, require joinder where audi has been satisfied.

Liquidators are required to act with a high standard of care and diligence in litigation affecting an insolvent estate. Where they authorise or participate in ill-conceived or improper litigation steps that expose the estate to unnecessary risk and costs, personal costs consequences may follow, including where a co-liquidator confirms and authorises the conduct rather than being the primary deponent.

Du Plessis NO and Others v Standard Bank of SA Ltd and Others (Appeal) (A262/2025) [2026] ZAWCHC 10 (20 January 2026)