Tayob v Lifestyle Furnishers CC (14835/2020) [2024] ZAGPPHC 1132 (4 November 2024)

Tayob v Lifestyle Furnishers CC (14835/2020) [2024] ZAGPPHC 1132 (4 November 2024)

The court found that Lifestyle Furnishers CC is in liquidation and, as confirmed by the Kets report, is unable to pay adverse costs if its claim fails. The litigation is funded by a creditor, which offends statutory provisions prohibiting such arrangements where the funder is not liable for costs. The application for security for costs was not out of time, as section 8 of the Close Corporations Act allows such a demand at any stage of proceedings. The supplementary affidavit introducing the Kets report was admitted in the interests of justice, given its relevance to the core issues. The court concluded that the circumstances—Lifestyle's liquidation, impecuniosity, and the nature of the...

Citation
[2024] ZAGPPHC 1132
Parties
Applicant: Mahomed Mahier Tayob; Respondent: Lifestyle Furnishers CC (in Liquidation); Respondent: Shirishkumar Jivan Kalianjee N.O.; Respondent: Tracy Hill N.O.; Respondent: Nurjehan Abdool Gafaar Omar N.O.; Respondent: Chetan Kumar Venilal Tanna N.O.; Respondent: Muhamed Riswan Aboobaker; Respondent: Mark Gregory Laros; Respondent: Muhamed Ziaan Hoosen; Respondent: Zaheer Cassim N.O.; Respondent: Narotam Govind Patel N.O.; Respondent: Master of the High Court; Respondent: Companies and Intellectual Property Commission
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
4 November 2024
Case Number
14835/2020
Procedural Posture
Interlocutory Application / Application for Security for Costs Under Rule 47
Outcome
Application granted. Lifestyle Furnishers CC is ordered to provide security for costs in the action against Tayob.
Judges
Mbongwe
Legal Topics
Security for Costs, Close Corporation Liability, Reckless Trading, Business Rescue, Liquidation Procedure
Civil Procedure Commercial and Corporate Security for Costs Close Corporation Liability Reckless Trading Business Rescue Liquidation Procedure

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Parties

Mahomed Mahier Tayob

Applicant

Lifestyle Furnishers CC (in Liquidation)

Respondent

Shirishkumar Jivan Kalianjee N.O.

Respondent

Tracy Hill N.O.

Respondent

Nurjehan Abdool Gafaar Omar N.O.

Respondent

Chetan Kumar Venilal Tanna N.O.

Respondent

Muhamed Riswan Aboobaker

Respondent

Mark Gregory Laros

Respondent

Muhamed Ziaan Hoosen

Respondent

Zaheer Cassim N.O.

Respondent

Narotam Govind Patel N.O.

Respondent

Master of the High Court

Respondent

Companies and Intellectual Property Commission

Respondent

Procedural Posture

Interlocutory Application / Application for Security for Costs Under Rule 47

Legal Issues

  1. 1 Whether Lifestyle Furnishers CC, as plaintiff in liquidation, should be ordered to provide security for costs in terms of Rule 47.
  2. 2 Whether the claim against Tayob is vexatious, reckless, or unsustainable, justifying security for costs.
  3. 3 Whether the supplementary affidavit and Kets report should be admitted in evidence.

Ratio Decidendi

The court found that Lifestyle Furnishers CC is in liquidation and, as confirmed by the Kets report, is unable to pay adverse costs if its claim fails. The litigation is funded by a creditor, which offends statutory provisions prohibiting such arrangements where the funder is not liable for costs. The application for security for costs was not out of time, as section 8 of the Close Corporations Act allows such a demand at any stage of proceedings. The supplementary affidavit introducing the Kets report was admitted in the interests of justice, given its relevance to the core issues. The court concluded that the circumstances—Lifestyle's liquidation, impecuniosity, and the nature of the...

Court Disposition

Application granted. Lifestyle Furnishers CC is ordered to provide security for costs in the action against Tayob.

Orders

  • The respondent is ordered to provide security for the costs of the applicant in the action instituted under case number 14835/2020 in an amount to be determined by the registrar.
  • The respondent is ordered to pay the costs of this application.