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South Africa Judgment

Free State High Court, Bloemfontein

Hennie Lambrechts Architects v Bombaneiro Investments (Pty) Ltd, In re: Bombaneiro Investments (Pty) Ltd v Hennie Lambrechts Architects (3032/2012) [2013] ZAFSHC 8; 2013 (2) SA 477 (FB) (14 February 2013)

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Professional case brief

Research organized from the available case record

Source document

01

Holding and result

The court held that, while the applicant raised concerns regarding vexatious litigation and the respondent's financial standing, the principles established in relevant case law indicate that an incola company is not ordinarily required to provide security for costs. The absence of section 13 of the Companies Act does not automatically invoke common law requirements for security. Given that leave to appeal should not be refused unless the case is hopeless, and considering the possibility that another court may reach a different conclusion, leave to appeal is granted to the Full Bench of the Free State High Court.

Court disposition

Leave to appeal granted to the Full Bench of the Free State High Court; costs of the application to be costs in the appeal.

Orders

  • Leave to appeal is granted to the Full Bench of the Free State High Court.
  • Costs of this application shall be costs in the appeal.

02

Material facts

Parties

Hennie Lambrechts Architects

Applicant Counsel: Adv N. Snellenburg

Bombaneiro Investments (Pty) Ltd

Respondent Counsel: Adv J. Els

Bombaneiro Investments (Pty) Ltd

Plaintiff

Hennie Lambrechts Architects

Defendant

03

Procedural history

  1. Posture

    Leave to Appeal / Application for Leave to Appeal Following Judgment on Security for Costs

04

Questions and positions

Legal issues

Party arguments

Applicant
The applicant contends that the court erred by not properly considering the potential for vexatious litigation, the respondent's status as a man of straw litigating in a nominal capacity, and the relevance of the principles established under the old section 13 of the Companies Act. The applicant argues that these factors warrant the provision of security for costs by the respondent, and that the judgment failed to address these concerns adequately.
Respondent
The respondent opposes the application for leave to appeal, relying on the precedent set in SIEMENS TELECOMMUNICATIONS v DATAGENICS 2013 (1) SA 65 (GNP), which supports the position that an incola company is not required to provide security for costs. The respondent maintains that the court's decision was correct and that the applicant's grounds for appeal lack merit.

05

Court’s reasoning

  1. 01

    SHOPRITE CHECKERS (PTY) LTD v BUMPERS SCHWARMAS CC AND OTHERS 2003 (5) SA 354 (SCA)

    Courts should not refuse leave to appeal unless the case is hopeless; a different court may reach a different conclusion.

  2. 02

    SIEMENS TELECOMMUNICATIONS v DATAGENICS 2013 (1) SA 65 (GNP)

    An incola company is generally not required to provide security for costs unless exceptional circumstances exist.

06

Ratio, limits and disposition

Ratio decidendi

The court held that, while the applicant raised concerns regarding vexatious litigation and the respondent's financial standing, the principles established in relevant case law indicate that an incola company is not ordinarily required to provide security for costs. The absence of section 13 of the Companies Act does not automatically invoke common law requirements for security. Given that leave to appeal should not be refused unless the case is hopeless, and considering the possibility that another court may reach a different conclusion, leave to appeal is granted to the Full Bench of the Free State High Court.

Obiter and limits

  • Courts must exercise caution when considering applications for leave to appeal, ensuring that potentially arguable cases are not prematurely dismissed.
  • The evolution of statutory provisions, such as the repeal of section 13 of the Companies Act, requires careful consideration of the interplay between statutory and common law principles.

Court disposition

Leave to appeal granted to the Full Bench of the Free State High Court; costs of the application to be costs in the appeal.

  • Leave to appeal is granted to the Full Bench of the Free State High Court.
  • Costs of this application shall be costs in the appeal.

Source and reliance status

Free State High Court, Bloemfontein

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Judgment reading view

Judgment text

The complete available source text.

Source document

Free State High Court, Bloemfontein

Judgment

[2013] ZAFSHC 8

FREE STATE HIGH COURT, BLOEMFONTEIN

REPUBLIC OF SOUTH

AFRICA

Application No: 3032/2012

In the matter between:-

HENNIE

LAMBRECHTS ARCHITECTS ..................................Applicant

and

BOMBANEIRO INVESTMENTS (PTY) LTD ........................Respondent

In re:

BOMBANEIRO INVESTMENTS (PTY) LTD ................................Plaintiff

HENNIE

LAMBRECHTS ARCHITECTS .................................Defendant

_____________

HEARD ON: 11 FEBRUARY 2013

JUDGMENT BY: THAMAGE, AJ

DELIVERED ON: 14 FEBRUARY 2013

[1] This is an application for leave to appeal to either the Full Bench of the Free State High Court or the Supreme Court of Appeal.

[2] Leave to appeal is on judgment delivered by this court on 15 November 2012 regarding the provision of security for costs by the plaintiff being an incola company.

[3] Inter alia application is based on the following:

3.1 That the court erred in the consideration of vexatious litigation;

3.2 That the court erred in not considering that the respondent is a man of straw and litigate in nominal capacity;

3.3 That the court erred in not considering the principles laid down in the old section 13 of the Companies Act.

[4] Respondent is opposing the application and indicated that the case of SIEMENS TELECOMMUNICATIONS v DATAGENICS 2013 (1) SA 65 (GNP) supports the decision of this court that the incola company does not have to provide security for costs.

[5] Primary issues are that whether in the absence of section 13 of the Companies Act, common law should apply and if so to what extent.

[6] I am of the view that the courts sitting on application for leave to appeal, should be careful not to refuse leave to appeal unless it is a hopeless case. In the circumstances a different court may, and not will, come to a different conclusion.

[7] Having the principles laid down in SHOPRITE CHECKERS (PTY) LTD v BUMPERS SCHWARMAS CC AND OTHERS 2003 (5) SA 354 (SCA) in mind, I come to the conclusion that this matter be referred to the Full Bench of the Free State High Court.

[8] Consequently the following order is made:

8.1 Leave to appeal is granted to the Full Bench of the Free State High Court.

8.2 Costs of this application be costs in the appeal.

____

S.J. THAMAGE, AJ

On behalf of applicant: Adv N. Snellenburg

Instructed by:

Lovius Block

BLOEMFONTEIN

On behalf of respondent: Adv J. Els

Neuhoff Attorneys

/spieterse

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Authorities

Authorities used by the court

Cases, legislation, regulations, and constitutional provisions identified in the available record.

SIEMENS TELECOMMUNICATIONS v DATAGENICS 2013 (1) SA 65 (GNP)

Case cited

SHOPRITE CHECKERS (PTY) LTD v BUMPERS SCHWARMAS CC AND OTHERS 2003 (5) SA 354 (SCA)

Case cited

Companies Act

Legislation

Legislation referenced in the available case record.

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