Case summary written by Courtney Altmuner and checked by Danmari Duguid
The plaintiff, as mother and natural guardian of her minor son (“ERH”), instituted an action in delict against the defendants, Schindler Lifts SA (Pty) Ltd (“Schindler Lifts”) and Old Mutual Limited (“Old Mutual”) for damages in the amount of R7 250 000.00.
On or about 21 July 2015, an incident occurred at the Gateway shopping centre, which is allegedly owned by Old Mutual, wherein ERH’s foot became trapped between the step of an escalator and the fixed adjacent side wall, and ERH sustained serious injuries. The escalator was allegedly operated and/or managed by either or both of the defendants.
The plaintiff and ERH are permanent residents of the United Kingdom and do not own any property within South Africa. Consequently, and in terms of Rule 47(3) of the Uniform Rules of Court, both Defendants, separately represented, demanded security for costs in the sum of R600 000.00 each (“the security”), to be paid in cash into the trust accounts of the defendants’ respective attorneys.
The plaintiff opposed her liability to pay the security on the basis that, (i) she was acting in a representative capacity and that the minor would be non-suited if she was ordered to pay the security, and (ii) she sought protection in terms of the provisions of section 28 of the Constitution, in that ERH would be denied his constitutional rights if forced to furnish the security. As such, the plaintiff’s opposition resulted in the conjoined application before the High Court of South Africa, KwaZulu Natal Division, Durban (“the Court”) where the defendants, as applicants, sought an order that the plaintiff (as respondent) furnish the security.
Acting on the advice of her attorneys, the plaintiff tendered an offer for security in the amount of R150 000.00 for both defendants’ legal costs. By the time the matter came before the Court on the opposed motion roll, the issue as to the security had been settled with Old Mutual. As such, on 05 August 2020, the Court made an order to the effect that the plaintiff pay Old Mutual R75 000.00, as agreed. The matter was then adjourned in order that the plaintiff and Schindler Lifts deliver full written argument in relation to the issue of the security, which Schindler Lifts requested from the plaintiff.
The Court thoroughly considered the case of Magida v Minister of Police. The Court held that, in line with the Magida case and related common law, an incola (being a local litigant domiciled within the jurisdiction of the court) has no right which entitles him/her as a matter of course to the furnishing of security for costs by a peregrinus (being a foreign litigant that is not domiciled within the jurisdiction of the court). A court has a broad discretion to exercise as to whether an incola is entitled to the furnishing of security for costs by a peregrinus, and the fact that one party is a peregrinus will feature heavily in the exercise of that discretion, as it stems from the well-known origin of local courts, inter alia, the protection of incolae.
The plaintiff also contended that the matter had to be decided on what was referred to as “case-specific features”, such as, inter alia, the fact that any adverse order for costs that may ultimately be awarded, would be one borne by the minor and not by the plaintiff, as she was not acting mala fide. The Court held that some of the factors as put forward by the plaintiff may be relevant, but that it was also significant to consider the case from the Schindler lifts’ perspective in that there is an inconvenience to be taken into account, when one has to recover costs abroad.
The Court held that when assessing the ability to furnish security, it must be borne in mind that a court may look at what the minor’s parents or family can provide. The Court further held that the merits of the case are, in the ordinary course, irrelevant, unless it can illustrated that there is a high chance of success or failure. In accordance with this principle, the Court was of the view that neither Schindler Lifts or the plaintiff, persuasively contends for a high degree of success or failure, and therefore, the merits of the plaintiff’s case, could not be weighed into consideration of the Court’s discretion as to the security demanded.
The Court held that there were two simple questions that could dispose of the current case, firstly, absent security – would Schindler Lifts be able to satisfy a court order through local execution? The second question was whether the plaintiff established, with cogent admissible evidence, that neither she nor her family can manage to provide security? The court held that the answer to both questions were in the negative.
The Court directed the plaintiff to provide security for Schindler Lifts’ legal costs in the amount of R350 000.00, to be held in Schindler Lifts’ attorney’s trust account, pending the final determination of the action. The Court held further that, in the event that the plaintiff failed to make payment of the aforementioned security within 15 days from the date of the order, Schindler Lifts was given leave to apply, on the same papers, duly supplemented, as may be necessary for an order: dismissing the plaintiff’s action and directing the plaintiff pay the costs of the action.
Finally, the plaintiff was ordered to pay the costs of the application at hand.
An incola does not have a right which entitles him/her as a matter of course to the furnishing of security for costs by a peregrinus. The court has a judicial discretion in this regard. The fact that one party is a peregrinus will feature heavily in the exercise of that discretion, as it stems from the well-known origin of local courts, inter alia to protect an incola.
The Court was tasked with determining whether a foreign peregrinus plaintiff should pay an incola defendant, security for its legal costs, after the plaintiff had instituted damages against the defendants on behalf of her minor child.
Action, security for costs, incola, peregrinus, court’s discretion, damages.