REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA,
GAUTENG DIVISION, PRETORIA
Case No: 044096 / 2024
Reportab le: No
0 • ~ -----.: ther Judges: No
SIGNATURE
Date: 17 February ~ ,.'2~
In the matt er between:
THE SOUTH AFRICAN RESERVE BANK
and
TRIO JEWELLS LLC
RAPPA RESOURCES (PTYJ LTD
ACCESS BANK SOUTH AFRICA LTD
In re:
Trio Jewells LLC
Ap plicant
1st Respondent
znct Respondent
3rd Respondent
Applicant
and
THE SOUTH AFRICAN RESERVE BANK
RAPPA RESOURCES (PTY) LTD
ACCESS BANK SOUTH AFRICA LTD
JUDGEMENT
MOOK! J
1st Respondent
z nct Respondent
3rd Respondent
1 There are two applications before court. The first application, by Trio
Jewells LLC (Trio Jewells) , is to compel the first respondent (the Reserve
Bank) to produce a record in terms of Rule 53. The record is in connection
with review proceedings instituted by Trio Jewells. The second ap plication
is by the Reserve Bank, in which the bank seeks an order that Trio Jewells
be ordered to furnish security for costs in the review proceedings.
2 Trio Jewells did not appear in court when the matter was called. Its
attorneys of record withdrew. Attorneys for the Reserve Bank wrote to Trio
Jewells, essentially saying that the matter was on the roll and that the
Reserve Bank would resist the matter being postponed.
3 Counsel for the Reserve Bank sought to impr ess on the court to hear and
dismiss Trio Jewells ' application to compel. The court pointed out that Trio
Jewells were dominu s in the application to compel, and that the court could
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not consider that application in the absence of Trio Jewells. The court
struck the application to compel from the roll. The court then considered
the application to compel the furnishing of security for costs.
4 The Reserve Bank seeks an order that Trio Jewells be ordered to furnish
security in the amount of Rl 200 000 .00, and that review proceedings be
stayed pending the furnishing of security. The Reserve Bank seeks further
relief that the bank be granted leave, should security not be paid, to
approach the court, seeking dismissal of the review application.
5 The Reserve Bank says the furnishing of security is said to protect the bank
against being forced to litigate on an at "at-risk" basis, against a litigant who
is a foreign peregrinus and owns no substantial assets in the Republic. Trio
Jewells is domiciled in the United Arab Emirates.
6 The Reserve Bank says that Trio Jewells is a foreign peregrinus with no
known assets within the Republic, "save for the funds which are presently
subject to the blocking order ... ". The "blocking order" is reference to the
Reserve Bank having alleged that the second respondent (Rappa)
contravened exchange control regulations, which resulted in the Reserve
Bank placing "a block" on Rappa's bank account.
7 The following occurred before a block was placed on Rappa's bank account.
Trio Jewells and Rappa concluded an agreement that appears to require
Rappa to supply Trio Jewells with gold. Trio Jewells, as part of this
agreement, transferred funds to Rappa's bank account in South Africa. The
funds were transferred to Rappa from outside the Republic.
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8 Trio Jewells says Rappa breached its obligations by not delivering the
agreed quantity of gold. This led to Trio Jewells cancelling its agreement
with Rappa, with Trio Jewells demanding repayment of USD 4 166 174.69,
being the balance due to Trio Jewells. The Reserve Bank placed a block on
Rappa's bank account. This appears to be the bank account that received
funds transferred at the instance of Trio Jewells .
9 The Reserve Bank contends that the review application is a fishing
exped ition, being an attempt by a foreign peregrinus to obtain the benefits
of advance notice of details of the Reserve Bank's ongoing investigation
into what the bank says is Rappa's contraventions of exchange control
regulat ions. The Reserve Bank also contends that Trio Jewells seeks an
order for the export of funds from the Republic before the Reserve Bank
had completed its investigation into Rappa.
10 The Reserve Bank, in further justification for the grant of an order for
securi ty for costs , says the costs are warrant ed before Trio Jewells' review
application is "stillborn". The Reserve Bank raised several considerations in
this regard, including that the review application was brought late and that
Trio Jewells lacked standing. Trio Jewells denies the assertions by the
Reserve Bank.
11 Trio Jewells refused _the request to furnish security, giving the following
justification. It contends that the amount sought is excessive in the
extreme, and that the Reserve Ban k can have recourse to funds that have
been subjected to the blocking order. Trio Jewells stated that it pledged to
the Reserve Bank the maximum amount required for sec urity . Trio Jewells
4
replied to the Reserve Bank's statement that Trio Jewells has no interest in
the funds by stating that Rappa had ceded its interests in the bank account
to Trio Jewells.
12 The Reserve Bank denies that Trio Jewells has a legal entitlement to offer
funds that are subject to a blocking order. That was because Rappa would,
"in law", be legally entitled to the funds absent a blocking order. On the
other hand, the State would become entitled to the funds should the
forfeiture order be found to be justified.
13 The Reserve Bank reversed course in its replying affidavit, contending that
Rappa had no right to the funds because funds deposited into Rappa's bank
account became the property of the bank that keeps the account, because of
the principle of commixio.
14 The Reserve Bank disputes the existence of a cession, and that such cession
would, in any event, be incompetent in law. The Reserve Bank denied that
the amount of the security prayed for was a "total thumb suck." It
contended that the amount of Rl.2 million is appropriate "Given the nature
of the present application and the procedure to be followed under Rule 53
of the Rules, [ ... ]". The Reserve Bank says that it has been forced to incur
additional and unnecessary legal costs due to Trio Jewells ' own "deplorable
conduct" by opposing Trio Jewells' "fishing expedition in the Rule 30A
application" and having to bring an application for security for costs.
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Analysis:
15 The onus is on the party seeking security to persuade a court that security
should be ordered. 1 A court considering an application for security for costs
embarks on a two-stage enquiry. The first stage is to establish whether a
plaintiff would be unable to meet an adverse cost order. "If the applicant
fails to meet this threshold requirement, that is the end of the matter. The
application is bound to be refused." 2 The second stage is embarked upon
where the court is satisfied that there is reason to believe that a plaintiff
would be unable to meet an adverse cost order. This stage entails a court
exercising the discretion whether to compel the giving of security.3
16 The law as stated above was in relation to section 13 of the old companies
act.4 This section is no longer part of the new companies act.5 There is
nothing to suggest that the absence in the new companies act of an
equivalent provision to the old section 13, renders the above scheme no
longer applicable in considering whether a case has been made that a
litigant be ordered to furnish security for costs. It is a sound approach that
an application be refused where it is not shown that a plaintiff would be
unable to meet an adverse cost order. A contrary position would run the
real risk of preventing a party from prosecuting a claim in a court of law,
thus infringing the right of access to the courts.
1 Boost Sports Africa (Pty) Ltd v South African Brewerie s (Pty) Ltd 2015 (5) SA 38 (SCA),
at para 14
2 MTN Service Provider v Afro Call [2007] SCA 97 (RSA), para 7
3 MTN Service Provider, para 7
4 Companies Act 61 of 1973
5 Companies Act 71 of 2008
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17 The Reserve Bank does not allege that Trio Jewells will be unable to satisfy
an adverse costs order in the review proceed ings. On the contrary , the
banks says that Trio Jewells is not impecunious. The Reserve Bank does not
say that Trio Jewells has no assets in the Republic - it contends that Trio
Jewells "owns no substantial assets" in the Republic. This was a general
statement by the Reserve Bank, with no indication of what assets are
available and why such assets are said to be insubstantial. This lack of
particularity is to be contrasted with the Reserve Bank's other statement
that Trio Jewells is not impecunious.
18 The application for security for costs fails at the first stage of the enquiry.
The Reserve Bank has not established that Trio Jewells will be unable to
satisfy an adverse cost order. The substance to the Bank's justification for
the grant of an order for security for costs is that Trio Jewells' review
application is "still born", with the Bank pointing to several considerations
which, according to the Bank, show the review application being "still
born." Those considerations include Trio Jewells being said to lack standing
to bring the review proceedings, and that those proceedings were brought
hopelessly late. The merits of the review application are not before this
court.
19 There is no proper justification for the grant of security for costs in the
amount of Rl.2 million, should the court be wrong in holding that the
Reserve Bank did not satisfy the first stage of the enquiry. Counsel for the
Reserve Bank had no satisfactory answer when the court enquired why the
Reserve Bank required security in the claimed amount.
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20 The court cannot determine the appropriate security absent the Reserve
Bank having laid a proper basis for the grant of security in a specified
amount. Trio Jewells says it seeks to review the decision by the Reserve
Bank to block Rappa's account. The Reserve Bank has not shown that the
litigation warrants security for costs in the amount of Rl.2 million.
21 The Reserve Bank refers variously in its application to Trio Jewells' review
proceedings being vexatious, and that this is said to be a further basis for
Trio Jewells being ordered to furnish security for costs . The Supreme Court
of Appeal approved the following meaning of 'vexatious ' in legal
proceedings: 6
[F]rivolous, improper: instituted without sufficient
ground, to serve solely as an annoyance to the
defendant" (Shorter Oxford English Dictionary).
Vexatious proceedings would also no doubt include
proceedings which, although properly instituted, are
continued with the sole purpose of causing annoyance to
the defendant; "abuse " connotes a mis-use, an improper
use, a use ma/a.fide, a use for an ulterior motive .
22 I am not persuaded that the review application was instituted to annoy the
Reserve Bank. Trio Jewells claims an entitlement to funds that have been
blocked at the direction of the Reserve Bank. The Reserve Bank does not
dispute that the funds are sourced from offshore, and that the funds were
deposited into Rappa's bank account at the instance of Trio Jewells. Trio
6 Boost Sports Africa (Pty) Ltd, para 17 (internal citations omitted)
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Jewells further claims that the funds were deposited into Rappa's bank
account in consequence of an agreement between Trio Jewells and Rappa
and that Trio Jewells has since cancelled the agreement.
23 I make the following order:
(1) The application to compel the Reserve Bank to produce the Rule 53 record
is struck from the roll, with Trio Jewells paying the wasted costs.
(2) The application to compel Trio Jewells to furnish security is dismissed, with
the Reserve Bank ordered to pay costs.
0 MOOK!
JUDGE OF THE HIGH COURT
Counsel for the applicant: MD Stubbs
Instructed by: Gildenhuys Malatji Inc.
No appearance for Trio Jewells LLC
Date heard: 10 November 2025
Date of judgment: 17 February 2026
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