Nasionale Aartappelkoöperasie Bpk v PricewaterhouseCoopers Ingelyf and Others

The appellant, Nasionale Aartappelkoöperasie Bpk (NAK), instituted a long-running damages claim of approximately R500 million against the respondents, collectively PricewaterhouseCoopers (PWC), alleging negligent auditing of its finances between 1984 and 1998. During the litigation, PWC twice obtained security for costs from NAK by agreement, amounting to about R1.4–1.5 million. After the trial had already run for over 100 court days, and amid NAK’s failure to provide up-to-date audited financial statements, PWC applied in terms of section 13 of the Companies Act 61 of 1973 for further security for costs. NAK opposed the application, conceding that it was in severe financial difficulty, but arguing that the application was brought too late, would stifle its claim, was inequitable given PWC’s insurance cover, and that its financial distress was attributable to PWC’s alleged wrongdoing. The High Court granted the order for security, and NAK appealed to the Supreme Court of Appeal.

The appeal was dismissed, and the High Court’s order directing NAK to furnish security for PWC’s costs was upheld.

The case confirms and applies the post-Constitutional approach to security for costs under section 13 of the Companies Act, emphasizing the balancing exercise between fairness to defendants and the constitutional right of access to courts. It reinforces that such decisions involve a discretion in the strict sense, which appellate courts will not interfere with absent a material misdirection.