Mystic River Investments 45 (Pty) Ltd and Another v Zayeed Paruk Incorporated and Others

Mystic River Investments 45 (Pty) Ltd (an incola company) and its sole director, Mr Karim Issa Mawji (a peregrinus with no assets in South Africa), brought an application in the KwaZulu-Natal High Court against the respondents, alleging that they had unlawfully hijacked and looted Mystic River. The relief sought included interdictory relief, repayment of misappropriated funds, and accounting and debatement. The respondents demanded that Mawji furnish security for costs under Uniform Rule 47 on the basis that he was a peregrinus unable to satisfy an adverse costs order. The High Court ordered Mawji to provide security for costs and ordered both appellants to pay the costs of the security applications, including wasted costs of a hearing set down for 14 May 2021. Mawji and Mystic River appealed against that order.

The appeal was dismissed except in respect of the costs order. The order making Mystic River jointly liable for the costs of the security applications was set aside and replaced with an order directing only the second appellant, Mr Mawji, to pay those costs, including the costs of 14 May 2021. The second appellant was ordered to pay the costs of the appeal.

The case reaffirms the settled South African principles governing security for costs against peregrinus litigants, emphasizing that there is no general rule obliging a peregrinus to furnish security. It clarifies the proper exercise of judicial discretion under Rule 47, the circumstances justifying appellate interference, and reinforces the balancing approach articulated in Magida and Shepstone & Wylie. The judgment also highlights that personal involvement and benefit by a peregrinus director can justify an order for security despite the presence of an incola co-litigant.