Brandenburg Partners Limited v Honigwachs and Others

Brandenburg Partners Limited (plaintiff) instituted action against several defendants, including Felix Honigwachs, Ricardo Paolo Spagni, Bloqtech Solutions (Pty) Ltd, Techno Ponies (Pty) Ltd, Visa Inc., and Mastercard Inc. The plaintiff originally sought payment of US$159,938.11 from the first to fifth defendants, jointly and severally. The 2022 particulars of claim were excepted to. The plaintiff sought to amend its particulars, first in December 2023 (which sought to remove one defendant and add eight new foreign defendants) and later in June 2024 (which sought the same amendments but removed defendants not originally cited). The claims arose from two written agreements: a clearing and settlement services agreement with Gooney Payment Technologies Limited (governed by English law), and a subsequent agreement with Venn Business Solutions Nig Limited (governed by Nigerian law) to process transactions at a discounted rate to repay outstanding amounts. The plaintiff alleged that Gooney misappropriated funds held on its behalf, that Venn failed to pay the agreed amount, and that Honigwachs and Spagni (as directing minds and controllers of the corporate entities) orchestrated a fraudulent scheme to misappropriate the plaintiff's funds. The plaintiff also sought to pierce the corporate veil under Irish, Nigerian, and Swiss law, and alternatively relied on Aquilian liability under South African law against the South African defendants.

• Whether the plaintiff should be granted leave to amend its particulars of claim in terms of the June 2024 amendment.
• Whether the court has jurisdiction to entertain the claim against the defendants.
• Whether the plaintiff's claim has prescribed.
• Whether the plaintiff is required to plead the content of foreign law (English, Nigerian, Irish, and Swiss law) in its particulars of claim.
• Whether it is permissible to join new defendants by way of a rule 28 notice of amendment.

1. The plaintiff is granted leave to amend its particulars of claim in accordance with the June 2024 amendment. 2. The first, second, and fourth defendants are ordered to pay the plaintiff's costs of the June 2024 amendment opposition on a party and party scale, including costs of two counsel, taxed on Scale C. 3. The plaintiff is granted leave to institute joinder proceedings against Gooney, Venn, Coin Ex24, and Fireblocks by way of a notice of motion, with the offshore entities granted one month to enter appearance and deliver opposing affidavits. 4. The first, second, and fourth defendants are ordered to pay the costs of the edictal citation application opposition, jointly and severally, on a party and party scale, including costs of two counsel on Scale C. 5. Altcoin Trader, Nedbank, and FNB are joined as fifth, sixth, and seventh defendants respectively.

Where a plaintiff pleads breach of contractual duties arising from agreements governed by foreign law, it is not necessary at the pleading stage to set out in the particulars of claim a synopsis of how a foreign court would interpret the contract or what the content of the foreign law is. Evidence of foreign law is a matter for trial. This is distinguishable from cases where a party relies directly on specific provisions of foreign law to establish a right (such as locus standi) — in those cases, the foreign law relied on must be pleaded with particularity. Furthermore, objections based on prescription and jurisdiction that are triable issues cannot properly serve as a basis for disallowing an amendment; they should be ventilated at trial.

The court noted that while there was some difficulty in understanding the basis of the complaint regarding the failure to plead foreign law, it was not necessary for a plaintiff, at the amendment stage, to plead a synopsis of expert evidence on how an English or Nigerian court would interpret the relevant contracts. The South African court would require evidence from relevant experts at trial to apprise it of the applicable foreign law.

This judgment provides important guidance on the pleading requirements in South African courts when a claim involves contracts governed by foreign law. It distinguishes between situations where foreign law forms the factual matrix for interpreting a contract (where pleading the content of foreign law is not required at the particulars stage) and situations where foreign law is directly relied upon to establish a right or status (where the specific provisions must be pleaded). It also reaffirms that objections to amendments on grounds that raise triable issues (such as prescription and jurisdiction) are not proper grounds for refusing an amendment.