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IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

 

(1)      NOT REPORTABLE

(2)      NOT OF INTEREST TO OTHER JUDGES

(3)      REVISED

 

CASE NO: 10711/2018

DATE DELIVERED: 14/09/2018

 

IN THE MATTER BETWEEN

BULLION FARMING ENTERPRISES (PTY) LTD                                    APPLICANT

 

AND

 
JACOBUS CORNELIUS VAN TONDER                                                      RESPONDENT

JUDGMENT

 

ERASMUS,AJ

INTRODUCTION:

[1]        Applicant is sued in the main action by Respondent in respect of a written sale concluded on 10 June 2014. Applicant maintains that such claim is vexatious or unsustainable and therefore seeks security ofR350 000.00 before the action proceeds.

 

CASE LAW:

[2]        The common law was restated in the decision of Boost Sports Africa (Pty) Ltd v South African Breweries (Pty) Ltd. 2015 (5) SA 38 (SCA) insofar as natural persons are concerned, namely that "security will only be granted if his or her action can be found to be reckless and vexatious" and that the power to order security against an incola is derived from the court's inherent jurisdiction to prevent abuse of its own process.[1]

[3]        The term "vexatious" has been described as "frivolous, improper or instituted without sufficient ground" or as "obviously unsustainable".

[4]        It appears from the same decision that the current yardstick is a preponderance of probability.[2]

[5]        It is also trite that this court has a discretion to order security, which discretion should be exercised sparingly and only in exceptional circumstances.[3]

 

ASSESSMENT OF THE ASPECTS RAISED IN THE AFFIDAVITS:

[6]        In the main action Respondent relies on the conclusion of a written sale with Applicant; a breach on Applicant's part regarding payment of instalments towards the purchase price; a consequent cancellation and damages. Respondent therefore claims a retransfer of the immovable property and payment of Rl,025 000.00 as damages.

[7]        In the current application in terms of Rule 47(3), Applicant relies on the following factors for its allegation that the main action is unsustainable, vexatious and reckless:

[7.1]    The Respondent’s claim has seemingly prescribed (this point was not pursued in argument).

[7.2]    Respondent signed a document in which he explicitly confirmed that he had no claim against Applicant (Annexure "X2").

[7.3]    Respondent furthermore signed an acknowledgment of debt in favour of another entity named "Bullion Capital (Pty) Ltd" and such entity ceded such claim to Applicant. The acknowledgment is in a sum of R3,323 987.00, which entails that Applicant will have a counterclaim exceeding Respondent's claim in the main action.

[8]       In his Opposing Affidavit Respondent essentially raised the following aspects:

[8.1]    He first signed the acknowledgment of debt (Annexure "X3" to the application) on 1 September 2015 "after he had been lured into a grand scheme of fraud" resulting in him signing the acknowledgment of debt "und r false pretences." Applicant's previous director had the intention of defrauding Respondent and the Receiver of Revenue according to Respondent.

[8.2]    Thereafter Respondent signed Annexure "X2" (confirmation that he has no claim against Applicant) on 20 May· 2016 and he "will gladly tender comprehensive and full evidence on the document as and when the trial commences".

[8.3]     He also alluded to the fact that when the Rule 47(1) Notice was served on 2 March 2018, the cession of the Acknowledgment of Debt had not been concluded since Applicant only accepted the cession on 14 March 2018.

[9]        Applicant's counsel stressed the fact that Respondent does not dispute signing the letter (X2) and the acknowledgment and that his allegations pertaining to fraud committed against him are bald, vague and sketchy. Also, that when the Plascon­ Evans rule is applied, Applicant's allegations should be accepted as the truth.

[10]      The criticism against Respondent's lack of detail is indeed warranted. However, Applicant's version is not beyond criticism either:

[10.1]  Obviously Annexure "X2" (the letter of 20 May 2016) was not written out of the blue and must have had some or other context. It was also apparently signed a considerable period prior to the institution of the main action (on 16 February 2018). When asked about this, counsel for Applicant conceded that such context is not provided on the papers.

[10.2]  The least one would have expected Applicant to say is that it had performed properly in terms of the sale agreement (referred to in the main action) or that for some reason it is excused from doing so. No such allegation is made and the court is left with a one line letter to prove Applicant's performance in terms of the Deed of Sale.

[10.3]  As far as the Acknowledgment of Debt is concerned, Applicant also fails to provide the necessary context. Although the acknowledgment refers to monies lent and advanced, the court is not informed for what purpose the loan was incurred. More pertinently, the court is left in the dark as to the relationship between the creditor in the acknowledgment (Bullion Capital) and Applicant (Bullion Farming Enterprises).

 

CONCLUSION:

[11]       From the authorities quoted at the beginning of the judgment, it is evident that not only does Applicant carry the onus as far as security is concerned, but it is also an onus that is not easily discharged. Although Respondent was certainly not very forthcoming in explaining why he signed the two documents in question, Applicant ought to have gone further in showing Respondent's claim to be vexatious by providing sufficient background facts. The court should not be left guessing as to what exactly transpired between the parties and why the various documents were drafted.

[12]     In the premises I make the following order:

 

Applicant's application in terms of Rule 47(3) - dated 22^nd March 2018 - is dismissed with costs.

 

 

FJ ERASMUS

ACTING JUDGE OF THE GAUTENG DIVISION, PRETORIA

 

HEARD ON: 12 September 2018

FOR THE APPLICANT: Adv Stevens

INSTRUCTED BY: Johan Nysschens Attorney

FOR THE RESPONDENT: Adv Dubek

INSTRUCTED BY: Van der Merwe & Associates

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