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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
Case Number: 2023-118418
In the matter between:
In the matter between:
MAVHUNGU TRACY NELWAMONDO First Plaintiff
NDIVHUWO ADELAIDE DLAMINI Second Plaintiff
and
FINANCIAL JUNCTION INVESTMENTS (PTY) LTD First Defendant
HUBERT THOMAS SHERRATT Second Defendant
RODNEY DANIEL GILCHRIST Third Defendant
JUDGMENT
WENTZEL-THOMPSON J
Introduction
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: YES
______________ _________________________
DATE SIGNATURE
[1] This matter concerns an opposed application for leave to amend the plaintiffs’
particulars of claim after the respondents delivered a Rule 23 notice and thereafter an
exception on the basis that the particulars of claim were vague and embarrassing and
lacked averments necessary to sustain a cause of action . The principal issues are
whether the proposed amendments cure the defects identified by the respondents,
whether further clarification is still required in certain respects, and whether the
plaintiffs’ case is properly formulated in contract, in delict, or in some combination of
the two.
[2] The litigation also raises a further and more fundamental question of classification. The
plaintiffs seek to recover pure economic loss arising from an alleged financial -advisory
and investment mandate; the respondents contend that the pleading is incoherent and
that the plaintiffs impermissibly blur contractual and delictual concepts. That question
must be approached in light of the principles stated in Lillicrap, Wassenaar and
Partners v Pilkington Brothers (SA) (Pty) Ltd,
1 namely that where the source of the
duty relied upon is contractual, an Aquilian claim for pure economic loss is not lightly
superimposed upon that contractual relationship. This is an issue I raised with the
plaintiffs’ counsel at the outset.
Background
[3] The plaintiffs instituted action by combined summons issued on 13 November 2023
under case number 2023-118418. The particulars of claim alleged that during the
period February to April 2011 the plaintiffs entered into an oral agreement with the
defendants, represented by the second defendant, in terms of which the first
defendant, through the second defendant, would provide financial advice and
intermediary services, act as the plaintiffs’ financial services provider, and procure the
investment of the plaintiffs’ funds for improved returns.
[4] The pleaded case was that, acting on the defendants’ advice, the plaintiffs withdrew
[4] The pleaded case was that, acting on the defendants’ advice, the plaintiffs withdrew
funds from Momentum and paid R1 566 694.97 and R570 000.00 respectively into
RMB account number 6[…] , which it was stated to be the account into which the funds
should be paid for re- investment. This was an account held by the third defendant that
the plaintiffs were led to believe was an account held on behalf of the first defendant.
[5] The plaintiffs further alleged that the funds were never invested, that the second
defendant later acknowledged his failure and indebtedness in 2020, and that the
1 1985 (1) SA 475 (A)
defendants were in breach both of the oral agreement and of duties arising under the
Financial Advisory and Intermediary Services Act 37 of 2002 (“the FAIS Act”) and the
relevant Codes of Conduct.
[6] On 27 November 2023 the respondents served a notice to remove cause of complaint
in terms of Rule 23. On 15 January 2024 the respondents delivered their exception,
maintaining that the particulars of claim were vague and embarrassing and, in certain
respects, did not disclose a cause of action.
[7] On 16 January 2024 the plaintiffs served a notice of intention to amend in terms of
Rule 28, and when that notice was objected to on 30 January 2024, the plaintiffs
brought an application for leave to amend under Rule 28(4).
The original particulars of claim
[8] The original particulars of claim advanced, in substance, three overlapping theories of
liability.
a. First, they pleaded an oral contract concluded in Johannesburg in or between
February and April 2011 under which the first defendant, represented by the
second defendant, undertook to provide financial advice and services, to act in
the plaintiffs’ best interests, not to misrepresent material facts, and to reinvest
the plaintiffs’ withdrawn Momentum monies on the basis that improved returns
would be received on such investments.
b. Second, the particulars invoked duties arising from the FAIS Act and the
applicable General and Discretionary Codes of Conduct, alleging that the
defendants failed to comply with those obligations in the course of rendering
financial services.
c. Thirdly, the particulars used language suggestive of delict, including allegations
that the defendants acted unlawfully, in bad faith and dishonestly, and in a
grossly negligent manner.
[9] The respondents’ complaint was that this blended formulation obscured rather than
clarified the case they were required to meet. They submitted that the pleading did not
identify with sufficient precision the contract relied upon, the obligations resting on
identify with sufficient precision the contract relied upon, the obligations resting on
each defendant, the basis of the first defendant’s liability for the conduct of the second
and third defendants, the role of the third defendant personally, or the proper juridical
basis of the damages claimed.
The Rule 23 notice and exception
[10] The Rule 23 notice and the subsequent exception identified a series of specific alleged
defects.
a. The first was a timing inconsistency in that paragraph 9 alleged that the
agreement was concluded during the period February to April 2011, whereas
paragraph 11 alleged that in February 2011, “pursuant to the Agreement”, advice
was already given to transfer the funds, thereby suggesting performance before
the contract had fully come into existence.
b. The second broad class of objection concerned insufficient particularity under
Rule 18(4) and Rule 18(6). The respondents complained that the plaintiffs had
not stated whether the advice in paragraph 11 was oral or written; had not
pleaded who would specify the accounts mentioned in paragraph 11.4 or
whether any such directions were ever given; and had made a bald allegation in
paragraph 13 that they had performed all obligations, without identifying what
those obligations were.
c. The third set of objections went to the legal characterisation of the claim . The
respondents contended that no contractual basis had been pleaded for personal
liability on the part of the third defendant; that paragraph 28’s reliance on
“vicarious liability” was conceptually unsound in the context of a contractual claim
as it was the terminology of delict; that the allegation of dishonesty lacked the
necessary particularity; and that the damages claim was not pleaded in
accordance with the proper measure of contractual damages. They also pointed
to an inconsistency between paragraph 11.1, which alleged that the plaintiffs
were advised that the RMB account was owned by the third defendant, and
paragraph 32.2, which alleged a failure to inform them that the account was
owned by the third defendant personally.
d. Finally, the respondents took issue with the prayer for mora interest from “ the
date of the letter of demand”, pointing out that the particulars referred to more
than one demand.
than one demand.
The first set of proposed amendments and the amendment application
[11] The plaintiffs’ notice of intention to amend sought, among other things, to alter
paragraph 9 so as to allege that the oral agreement was concluded “ on or about
February 2011” and that its terms were amended between February and April 2011 to
accommodate the transactions. The amendment further sought to identify the second
defendant’s 11 December 2020 written acknowledgement as annexure POC4B, to
clarify that the RMB account was owned by the third defendant in his personal and not
his professional capacity, to reformulate paragraph 28 to allege that the second
defendant represented orally and through his conduct that he was acting within the
scope of his employment and expertise, and to fix 6 October 2023 as the date from
which mora interest was claimed.
[12] The plaintiffs’ founding affidavit contended that the respondents’ objections were
overly technical; that particulars of claim are required to plead material facts, not
evidence; and that the proposed amendments would enable the real dispute between
the parties to be ventilated without causing prejudice to the respondents. The plaintiffs’
heads of argument emphasised the permissive approach to amendments reflected in
authorities such as Moolman v Estate Moolman,
2 Affordable Medicines Trust v Minister
of Health, 3 and Villa Crop Protection (Pty) Ltd v Bayer Intellectual Property GmbH ,4
and argued that the respondents’ objections amounted to a delay tactic.
[13] The respondents’ heads of argument, by contrast, maintained that the amendment did
not cure the original excipiability because it left intact, or in some instances introduced
afresh, uncertainty as to the content of the oral agreement, who specified the
destination accounts, the conceptual basis of the first defendant’s liability, the pleaded
role of the third defendant, the allegations of dishonesty, and the measure of damages.
The respondents also argued that the court considering the application to amend is
entitled to refuse leave where the amended pleading would remain excipiable.
Whether the current amendments cure the objections
a. Paragraph 9: Conclusion and amendment of the oral agreement
a. Paragraph 9: Conclusion and amendment of the oral agreement
[14] The amendment to paragraph 9 materially improves the pleading in one respect; it
removes the most obvious inconsistency by alleging that the oral agreement was
concluded “ on or about February 2011” and only thereafter amended between
February and April 2011. In that limited sense, the amendment cures the first objection
raised in the Rule 23 notice.
2 Moolman v Estate Moolman 1927 CPD 27
3 Affordable Medicines Trust v Minister of Health 2006 (3) SA 247 (CC)
4 Villa Crop Protection (Pty) Limited v Bayer Intellectual Property GmbH 2022 JDR 3648 (CC)
[15] That said, the respondents are correct that the amended paragraph still lacks some
precision. Once reliance is placed on an oral agreement as later orally amended, Rule
18(6) requires, at minimum, sufficient particularity as to when, where and by whom the
contract relied upon was concluded. The amended paragraph adequately identifies the
conclusion of the original oral agreement in February 2011 at Johannesburg, but the
additional allegation that the “ terms of the oral agreement were amended” between
February and April 2011 would ideally identify, at least in broad terms, by whom those
amendments were agreed and what feature of the original agreement those
amendments were intended to amend. Further clarification on that point is therefore be
warranted.
b. Paragraph 11 and paragraph 11.4: the advice, the directions, and the specified accounts
[16] The amendments do not fully cure the objections directed at paragraph 11. The respondents
complained that the plaintiffs had failed to plead whether the advice was oral or written and,
more importantly, that paragraph 11.4 made the duty to execute withdrawals conditional
upon directions by the plaintiffs and transfer to accounts “ specified” by them, without any
allegation that such directions were ever given or accounts were ever specified.
[17] The alteration from “specified by the Plaintiffs” to “specified to the Plaintiffs” entirely changes
the meaning of the paragraph and creates more confusion verbal. It is not clear whether the
plaintiffs are referring to the third defendant’s account that the plaintiffs were directed to
transfer their savings from Momentum into (which is what the amendment would suggest) or
whether reference is made to the subsequent obligation on the first defendant to withdraw
the funds from the third defendant’s account and transfer them to an account specified by the
plaintiffs as the previous pleading had suggested.
plaintiffs as the previous pleading had suggested.
[18] The proposed amendment also does not answer the real complaint, namely that the pleading
leaves unclear who was to specify the accounts and whether the giving of such directions
was a precondition to the defendants’ performance.
[19] If the plaintiffs’ true case is that the defendants’ primary breach was the failure to invest the
funds upon receipt, then that ought to be pleaded as an unconditional obligation distinct from
the later, instruction-based duty to effect withdrawals.
[20] If, on the other hand, the plaintiffs rely on a failure to pay out on demand, then the giving of
instructions and the nomination of destination accounts should be alleged expressly. In this
respect the amendment does not cure the objection and further clarification is required.
c. Paragraph 13: performance by the plaintiffs
[21] The objection to paragraph 13 also remains substantially valid.n A bare assertion that the
plaintiffs “ duly performed their obligations ” is not sufficiently informative where the
respondents are entitled to know what obligations are said to have been performed in order
to plead properly under Rule 18(5). The subsequent allegations of de-investment from
Momentum and payment into the RMB account do indicate performance of the plaintiffs’
primary obligations but the pleading would be clearer and less vulnerable if paragraph 13
were reformulated to identify those acts expressly as the plaintiffs’ contractual performance.
d. Paragraphs 27 and 32.2: the RMB account and dishonesty
[22] The amendment to paragraph 27 goes some way toward curing the inconsistency between
paragraph 11.1 and paragraph 32.2. The amended allegation makes clear that the account
was in the third defendant’s personal name and not held by him in a professional capacity on
behalf of the first defendant.
[23] Read with the particulars as a whole, the plaintiffs’ complaint is not that they knew nothing of
the third defendant’s connection to the account, but that they were not told the true juridical
character of the account, namely that it was his personal account and not an account
maintained on behalf of the first defendant for the plaintiffs’ investment purposes. To that
extent the amendment substantially cures the eleventh objection.
[24] However, the objection concerning the bald allegation of dishonesty remains only partially
cured. A pleading that alleges bad faith or dishonesty should ordinarily set out the factual
basis for that conclusion with greater precision than appears in the present draft. The
particulars should identify the specific misrepresentation, who made it, when it was made,
why it was false, and how the plaintiffs relied upon it. That does not mean that the claim
why it was false, and how the plaintiffs relied upon it. That does not mean that the claim
should be struck out at this stage, but it does mean that further particularity would be
warranted if dishonesty is to remain part of the pleaded case.
[25] There is, however, a further difficulty with the plaintiffs’ pleading of dishonesty: Whose
dishonesty is relied upon-the second or third defendant? And what is the legal basis of the
claim based upon dishonesty-is it contractual or delictual?
e. Paragraph 28: first defendant’s liability
[26] The amendment to paragraph 28 does not, in the present form, satisfactorily resolve the
conceptual difficulty identified by the defendants. To allege that the second defendant
represented himself to be acting within the scope of his employment and expertise does not,
by itself, explain how the first defendant is bound in contract. In contract, the relevant
concept is agency or representation in the conclusion and performance of the contract,
whereas “vicarious liability” is ordinarily the language of delict.
[27] That said, the substance of the plaintiffs’ case is sufficiently clear: they contend that the first
defendant acted through the second defendant as its authorised representative in advising
the plaintiffs, procuring the transfer of their funds, and undertaking to invest them. However,
the difficulty of Lillicrap looms large as the plaintiffs cannot pursue both a claim in contract
and in delict where the breach of the contract creates the basis of the duty of care in delict
and pure economic loss is claimed.
[28] Paragraph 28 should accordingly be reformulated to state directly that the first defendant
concluded the agreement through the second defendant acting as its authorised
representative and is bound by the contractual undertakings so made. To the extent the
plaintiffs intend also to rely on delict, that should be pleaded separately and without
conceptual overlap breaching Lillicrap. This is an aspect to which I will return below.
f. The third defendant and the sixth ground of objection
[29] The respondents’ sixth ground of objection remains well founded on the particulars as
presently framed. The pleading does not allege with adequate clarity that the third defendant
personally undertook any contractual obligations to the plaintiffs , particularly as it is pleaded
that their dealings were with the second defendant acting on behalf of the first defendant.
The fact that he was a director of the first defendant and the holder of the RMB account into
The fact that he was a director of the first defendant and the holder of the RMB account into
which they were directed to transfer their savi ngs does not, without more, make him a
contracting party liable in contract to the plaintiffs.
[30] If the plaintiffs wish to pursue a contractual claim against the third defendant, they would
need to plead explicitly that he personally undertook to receive, hold, segregate, preserve
and invest the plaintiffs’ funds in terms of the mandate. As the particulars stand, however,
the more natural inference is that the third defendant’s alleged liability arises from his
participation in the deception concerning the account into which the second defendant
instructed the plaintiffs to transfer their Momentum sav ings and in the misuse or diversion of
the plaintiffs’ funds to an unauthorised account.
[31] That, however, is a delictual, not a contractual, basis of liability, despite the plaintiffs’ counsel
repeatedly emphasising that the plaintiffs’ claim was based entirely upon a breach of
contract.
g. Paragraph 32.5 and the damages claim
[32] The respondents’ complaint regarding paragraph 32.5 also remains substantially
unanswered. The particulars allege that the second defendant withdrew and invested the
funds “in the manner that he did”, but do not plead what was withdrawn, how the funds were
dealt with, or where they went. Given that much of that information may lie peculiarly within
the defendants’ knowledge, exhaustive detail cannot be demanded at pleading stage, but the
plaintiffs should at least plead in broad terms that the funds were not invested as agreed and
were instead withdrawn or diverted for purposes inconsistent with the mandate.
[33] The objection to the damages formulation is more serious. A contractual claim requires the
plaintiffs to plead the loss flowing from breach in accordance with the prescribed measure of
contractual damages (entirely distinct from that in delict) , namely the position the plaintiffs
would have been in had the contract been properly performed.
[34] The present particulars plead the plaintiffs’ entitlement to return of the capital that was
supposed to have been invested, plus a conservative return of 3 per cent per annum by
reference to deposit rates, but do not expressly link that methodology to the contractual
positive interest or allege that such loss flowed naturally from the breach or was within the
contemplation of the parties.
[35] Any damages claim based on delict would need to be framed in the negative- what the
position would have been had the delict not been committed.
[36] It is apparent to me from reading the proposed amendment that what is intended is that the
plaintiffs be compensated for the loss in increment in the capital sum transferred to the first
defendant (and in fact the third defendant personally) had it been invested as intended and
agreed with the second defendant acting on behalf of the first defendant.
[37] It may be that the way the particulars are framed at this stage is sufficient and the probable
return on investment will have to await discovery and expert evidence as to the return on
similar RMB client’s investments over the relevant period.
h. The prayer for mora interest
[38] The proposed amendment identifying 6 October 2023 as the date of demand cures the
objection to the uncertainty in the prayer for mora interest.
The juridical character of the claim against the first respondent
[39] The first defendant’s alleged liability is, in the view of this court, properly rooted in contract.
[40] The pleaded relationship is not one between strangers in which the law must decide whether
to recognise a duty of care to avoid pure economic loss. It is a professional financial -advisory
and investment relationship consciously created by agreement, in terms of which the first
respondent, acting through the second respondent, undertook to advise the plaintiffs, receive
and manage their money, invest it for improved returns, and act in their best interests in
accordance with the FAIS Act and the applicable Codes.
[41] In such circumstances the source of the relevant duties lies in the mandate and advisory
contract itself. The duties to exercise care and skill, to avoid conflicts of interest, to disclose
material information, to act in the clients’ interests, and not to misuse client funds are either
express terms of the agreement as pleaded or terms implied by law by virtue of the statutory
regime governing authorised financial services providers. The FAIS Act and its subordinate
codes do not merely supply a background regulatory atmosphere; they inform the legal
content of the contractual relationship and, where applicable, are read into that relationship
as incidents of the services the first respondent undertook to render.
[42] The plaintiffs’ loss is pure economic loss. It consists of capital entrusted for investment and
the returns which that capital ought to have earned had the mandate been properly
performed. This is precisely the setting in which the principle in Lillicrap assumes
importance.
[43] In Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty) Ltd 5 the Appellate
[43] In Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty) Ltd 5 the Appellate
Division held that where the negligence alleged consists in the failure to perform professional
obligations arising from contract, the law does not, without more, superimpose an Aquilian
action for pure economic loss upon that contractual matrix. The point is not that contract and
delict can never coexist, but that in cases of this kind the contract ordinarily remains the
primary and appropriate juridical source of the claim unless some independent basis for
delictual wrongfulness is established.
5 supra
[44] In the present matter, the first respondent’s alleged wrong is the very failure to do that which
it contractually undertook to do: advise competently, invest the plaintiffs’ funds, preserve
those funds, disclose material facts, and pay out on instruction.
[45] Those duties do not arise independently of the contract; they arise from and are governed
by it, supplemented by statutory incidents imposed upon an authorised financial services
provider. The correct formulation of the claim against the first respondent is therefore
contractual, not delictual.
The place of FAIS-implied terms in the contract
[46] The plaintiffs’ pleading clearly seeks to incorporate the obligations on financial advisors in
terms of the FAIS Act and the applicable Codes of Conduct as terms implied by law into the
contract they allege has b een breached by the first and second defendants . Those implied
terms include, at least, a duty to render financial services honestly, fairly, with due skill, care
and diligence, in the interests of the client and the integrity of the financial services industry,
to avoid or disclose conflicts of interest, to keep client funds separate and properly
administered, and not to make material misrepresentations. Where the first respondent
accepted appointment as the plaintiffs’ financial services provider, it did so within a statutory
environment that attached these legal incidents to the services undertaken.
[47] It follows that breach of those statutory standards may simultaneously constitute breach of
contract, without requiring the plaintiffs to resort to a free-standing Aquilian claim for
negligence. The FAIS Act thus informs both the standard of performance and the content of
the implied terms of the mandate relied upon against the first respondent.
[48] This is not to say that the FAIS Act and the Codes of Conduct do not form a self- standing
cause of action and basis of relief for the loss suffered by the plaintiffs.
cause of action and basis of relief for the loss suffered by the plaintiffs.
The proper characterisation of the claim against the third defendant
[49] The position of the third defendant is different. As presently pleaded, the third defendant is
not shown to have concluded the mandate with the plaintiffs or to have assumed the primary
advisory and investment obligations resting on the first respondent. The particulars instead
allege that his personal bank account was used as the receptacle for the plaintiffs’ funds, that
the true holder of that account was not disclosed. It has not in fact been pleaded and that he
participated in the dishonest or bad-faith handling of the plaintiffs’ monies or their
misappropriation, although this may be a necessary implication of the facts as pleaded.
[50] What is known from the facts pleaded that demand was made that he acknowledged that the
funds were not invested as intended and has fai led to return the amounts paid into his
account despite repeated demand by the plaintiffs.
[51] Despite the plaintiffs’ counsel insisting that the plaintiffs’ claims are formulated solely in
contract, the only claim appropriately directed against the third defendant on the pleaded
facts set out above, is a claim in delict founded on intentional misconduct, namely
dishonesty, fraudulent misrepresentation and/or knowing participation in the misappropriation
of the plaintiffs’ funds.
[52] Such a claim does not offend the principle in Lillicrap because it is not based merely on
negligent performance of contractual duties resulting in pure economic loss. It is based,
rather, on intentional wrongdoing said to be independent in character , namely the knowing
presentation of a personal bank account as though it were an account held on behalf of the
first respondent for the plaintiffs’ benefit, the receipt of the plaintiffs’ funds on that basis, and
the dishonest failure to preserve and apply those funds as represented.
[53] To succeed on such a delictual formulation, the plaintiffs would need to plead the elements
of that intentional delict with proper particularity, including the representations made, the
knowledge of falsity, the intention to induce reliance, the plaintiffs’ reliance, the misuse of the
funds, and the resulting loss. This they have not done. This further supports the defendants’
objection that it is not apparent from the original particulars of claim or the amendments what
the legal basis of the relief against the third defendant is.
Conclusion
[54] The amendments presently sought cure some, but not all, of the objections raised in the Rule
23 notice and exception.
[55] They satisfactorily address the temporal inconsistency in paragraph 9, clarify the date from
which mora interest is sought, and materially reduce the inconsistency concerning the true
nature of the RMB account.
[56] They do not, however, adequately cure the uncertainty in paragraph 11.4, the bald allegation
of full performance in paragraph 13, the conceptual confusion in paragraph 28 concerning
the first respondent’s contractual liability, the absence of a proper contractual basis for
liability on the part of the third defendant, the limited particularity regarding dishonesty, or the
deficiencies in the formulation of damages.
[57] The plaintiffs’ claim against the first respondent is properly contractual in character, with the
FAIS Act and the applicable Codes informing and implying terms into that contract by law.
[58] The claim against the third defendant, by contrast, is not appropriately contractual on the
pleadings as they stand, but is capable of formulation as a delictual claim based on
intentional dishonesty or fraud, which would not infringe the principle in Lillicrap.
Ruling
[59] In the exercise of the court’s discretion under Rule 28, the appropriate course would be to
permit amendment, but to require that the particulars be further clarified along those lines so
that the respondents may plead to a coherent and properly pleaded case.
[60] Having regard to what has been set out fully above and having considered the application for
leave to amend, the respondents’ objection in terms of Rule 28(3), the Rule 23 notice, the
exception, the affidavits filed of record, and the parties’ heads of argument and the argument
advanced at the hearing, I propose to make an order in the following terms:
a. The plaintiffs are granted leave to amend their particulars of claim.
b. The defendants objections to the proposed amendments dismissed are as
follows:
i. The first objection to the proposed amendment of paragraph 9 is dismissed
to the extent that the proposed amendment cures the temporal
inconsistency between the conclusion of the oral agreement and the
advice allegedly given pursuant thereto.
ii. The objection relating to the prayer for interest is dismissed, and the
applicants are granted leave to amend prayer 2 so as to identify 6 October
2023 as the date of the letter of demand from which mora interest is
claimed.
iii. The objection directed at the inconsistency between paragraphs 11.1 and
32.2 is dismissed to the extent that the proposed amendment to paragraph
27 sufficiently clarifies that the complaint is that the RMB account was held
27 sufficiently clarifies that the complaint is that the RMB account was held
in the third respondent’s personal name and not, as represented, for and
on behalf of the first respondent.
c. The objections upheld are as follows:
i. The second objection to the proposed amendment of paragraph 11.4 is
upheld.
ii. The objection to paragraph 13 is upheld.
iii. The objection to paragraph 28 is upheld.
iv. The sixth ground of objection concerning the claim against the third
respondent in contract is upheld.
v. The ninth ground of objection concerning the allegation of dishonesty is
upheld to the extent that greater particularity is required.
vi. The twelfth ground of objection concerning paragraph 32.5 is upheld.
vii. The thirteenth ground of objection concerning the formulation of damages
is upheld.
Costs
[61] The defendants have enjoyed substantial success in their objection, although some of
the objections have been cured or substantially narrowed by the proposed
amendments.
[62] The costs of the Rule 28 objection and the application for leave to amend are therefore
awarded in favour of the defendants, but only on the ordinary party and party scale.
[63] The respondents’ request for costs of two counsel is refused as the employment of
senior counsel was not justified at this stage of the proceedings.
Order
[64] In the result, the following order is made:
1. The plaintiffs’ application to amend their particulars of claim on the basis of
their proposed amendment as per paragraph 60. b above is granted.
2. The plaintiffs’ application to amend their particulars of claim on the basis set
out in paragraph 60.c above is refused.
3. The plaintiffs are granted leave to further amend their particulars of claim in
line with this judgment or on such further basis as they deem fit within 10
days of delivery of this judgment.
4. The plaintiffs are ordered to pay the costs of this application for amendment
on the party and party scale B.
5. The aforementioned costs are not to include the costs of senior counsel.
_________________________
WENTZEL-THOMPSON J
JUDGE OF THE HIGH COURT
JOHANNESBURG
For the plaintiffs: Y.S Ntloko instructed by Mapongwana Attorneys
For the defendants: P van der Berg SC with A C Roestorf instructed by Thyne Jacobs
Sundström Inc.
Date of the hearing: 4 May 2026
Date of the judgment: 5 May 2026