Stols v Garlicke & Bousfield Inc and Others (10146/2010, 10142/10, 10144/2010, 10145/2010, 10186/2010, 858/2011, 1340/2011) [2011] ZAKZPHC 54; 2012 (4) SA 415 (KZP) (22 December 2011)

Stols v Garlicke & Bousfield Inc and Others (10146/2010, 10142/10, 10144/2010, 10145/2010, 10186/2010, 858/2011, 1340/2011) [2011] ZAKZPHC 54; 2012 (4) SA 415 (KZP) (22 December 2011)

The court held that the annexure to the third party notice, when read as a whole and accepting the pleaded facts as true, prima facie supports the existence of a legal duty on the part of the third party to inform the defendant of Cowan's irregular conduct. The third party believed itself to be in a relationship...

Source-derived case information.

Citation
[2011] ZAKZPHC 54
Parties
Plaintiff: Merlin Stuart Stols; Defendant: Garlicke & Bousfield Inc.; Respondent: PKF (Durban) Incorporated; Respondent: Patrick Robert; Respondent: Nerak Financial Services (Pty) Ltd; Plaintiff: David Jaffit; Plaintiff: Erroll James Watt; Plaintiff: Neil Douglas Rodseth; Plaintiff: Tower Bridge South Africa (Pty) Limited; Plaintiff: Dycomber (Pty) Ltd; Plaintiff: Cotton King Manufacturing (Pty) Ltd
Court
Kwazulu-Natal High Court, Pietermaritzburg
Jurisdiction
South Africa
Judgment Date
22 December 2011
Case Number
10146/2010
Procedural Posture
Civil Procedure / Exception to Third Party Notice
Outcome
Exception dismissed; matter to proceed to trial.
Judges
Gorven
Legal Topics
Third Party Procedure, Pure Economic Loss, Legal Duty to Speak, Wrongfulness, Exception Procedure
Civil Procedure Delict Third Party Procedure Pure Economic Loss Legal Duty to Speak Wrongfulness Exception Procedure

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Summary, issues, holding and outcome

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Parties

Merlin Stuart Stols

Plaintiff

Garlicke & Bousfield Inc.

Defendant

PKF (Durban) Incorporated

Respondent

Patrick Robert

Respondent

Nerak Financial Services (Pty) Ltd

Respondent

David Jaffit

Plaintiff

Erroll James Watt

Plaintiff

Neil Douglas Rodseth

Plaintiff

Tower Bridge South Africa (Pty) Limited

Plaintiff

Dycomber (Pty) Ltd

Plaintiff

Cotton King Manufacturing (Pty) Ltd

Plaintiff

Procedural Posture

Civil Procedure / Exception to Third Party Notice

Legal Issues

  1. 1 Whether the annexure to the third party notice discloses a cause of action against the third party.
  2. 2 Whether the pleaded facts prima facie support the existence of a legal duty on the part of the third party to inform the defendant of Cowan's conduct.
  3. 3 Whether the exception should be upheld on the basis of vagueness, embarrassment, or lack of legal duty.

Ratio Decidendi

The court held that the annexure to the third party notice, when read as a whole and accepting the pleaded facts as true, prima facie supports the existence of a legal duty on the part of the third party to inform the defendant of Cowan's irregular conduct. The third party believed itself to be in a relationship with the defendant, enabled Cowan to operate accounts irregularly, and knew or ought to have known that the defendant's procedures were being circumvented. Public policy considerations, including the need for vigilance in financial transactions and the values of the Constitution, support the imposition of a legal duty to speak in these circumstances. The exception was therefore...

Court Disposition

Exception dismissed; matter to proceed to trial.

Orders

  • The first third party’s exception to the annexure to the third party notice is dismissed with costs, save for the costs dealt with in paragraph 2.
  • The plaintiff is directed to pay the costs of the defendant and the first third party arising from the participation of the plaintiff in the exception.