Hennie Lambrechts Architects v Bombenero Investments (Pty) Ltd (A49/2013) [2014] ZAFSHC 15; 2015 (6) SA 375 (FB) (20 February 2014)

Hennie Lambrechts Architects v Bombenero Investments (Pty) Ltd (A49/2013) [2014] ZAFSHC 15; 2015 (6) SA 375 (FB) (20 February 2014)

The majority held that, despite the omission of section 13 in the new Companies Act, the High Court retains the inherent power to order an incola company to furnish security for costs where the circumstances justify such an order. The court found that the respondent failed to provide credible evidence of its ability to pay costs and did not act bona fide in refusing to disclose financial statements or prove ownership of assets. The court determined that the common law should be developed to allow for judicial discretion in ordering security for costs against incola companies, aligning with the spirit and objects of the Constitution and commercial realities. The appeal was upheld, and the...

Citation
[2014] ZAFSHC 15
Parties
Appellant: Hennie Lambrechts Architects; Respondent: Bombenero Investments (Pty) Ltd
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
20 February 2014
Case Number
A49/2013
Procedural Posture
Civil Appeal / Appeal Against Dismissal of Application for Security for Costs Under Rule 47(1)
Outcome
Appeal upheld by majority; respondent ordered to furnish security for costs. Dissenting judgment would have dismissed the appeal.
Judges
Mocumie, Lekale, Moloi
Legal Topics
Security for Costs, Companies Act 1973 Section 13, Companies Act 2008, Development of Common Law, Access to Court, Rule 47 Application
Civil Procedure Commercial and Corporate Security for Costs Companies Act 1973 Section 13 Companies Act 2008 Development of Common Law Access to Court Rule 47 Application

Case Brief

Summary, issues, holding and outcome

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Parties

Hennie Lambrechts Architects

Appellant

Bombenero Investments (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal Against Dismissal of Application for Security for Costs Under Rule 47(1)

Legal Issues

  1. 1 Whether the High Court retains the power to order an incola company to furnish security for costs in the absence of section 13 of the old Companies Act.
  2. 2 Whether the common law should be developed to allow courts discretion to order security for costs from incola companies under the new Companies Act.
  3. 3 Whether the respondent's financial position and conduct justify an order for security for costs.

Ratio Decidendi

The majority held that, despite the omission of section 13 in the new Companies Act, the High Court retains the inherent power to order an incola company to furnish security for costs where the circumstances justify such an order. The court found that the respondent failed to provide credible evidence of its ability to pay costs and did not act bona fide in refusing to disclose financial statements or prove ownership of assets. The court determined that the common law should be developed to allow for judicial discretion in ordering security for costs against incola companies, aligning with the spirit and objects of the Constitution and commercial realities. The appeal was upheld, and the...

Court Disposition

Appeal upheld by majority; respondent ordered to furnish security for costs. Dissenting judgment would have dismissed the appeal.

Orders

  • The order of the court a quo is set aside and replaced with an order that the respondent furnish security for the applicant's costs of the main action in an amount to be fixed by the Registrar, such security to be furnished within 10 days from the date on which security is fixed.
  • The respondent is ordered to pay the costs of the application.