Boost Sports Africa (Pty) Ltd v The South Africa Breweries (Pty) Ltd

Boost Sports Africa (Pty) Ltd, a South African (incola) company, instituted an action in the Gauteng Division of the High Court against The South Africa Breweries (Pty) Ltd (SAB) for alleged breach of a confidentiality agreement relating to an advertising concept known as the 'fans challenge concept'. After discovery, SAB became concerned that Boost would be unable to satisfy an adverse costs order if unsuccessful. SAB applied in terms of Uniform Rule 47 for security for costs, alleging that Boost had never traded, had no immovable assets, minimal apparent business infrastructure, and refused to disclose financial statements. Boost conceded it had never traded and that its shareholders lacked sufficient means to provide the security demanded, contending that the advertising concept constituted a valuable intangible asset and that ordering security would effectively terminate its claim. The High Court ordered Boost to furnish security for costs. Boost appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel, and the High Court’s order compelling the appellant to furnish security for costs was set aside.

This decision authoritatively clarified that, following the repeal of section 13 of the Companies Act 1973, South African courts lack the power to order an incola company to provide security for costs. The case resolved conflicting High Court decisions and reaffirmed the distinction between procedural rules and substantive rights. It also underscored constitutional limits on judicial development of the common law where legislative intent indicates a deliberate policy choice.