Badenhorst N O v Manyatta Properties Close Corporation and Others

The dispute concerned the sale and transfer of Portion 33 of the Farm Rietfontein by Manyatta Properties Close Corporation to Nikifon (Pty) Ltd in September–October 2014. The deed of sale and transfer documents were signed by Phillip Cornelius de Witt, who held 50% of the members’ interest in Manyatta. The remaining 50% belonged to his cousin, who had died in 2010, leaving his interest to his son. The executrix and heir of the deceased estate did not participate in or consent to the sale. Almost six years after transfer, the applicant, newly appointed as executor of the deceased estate, sought to set aside the sale and transfer, alleging lack of authority, statutory non-compliance under the Close Corporations Act 69 of 1984, and initially extensive fraud and collusion by the purchaser and conveyancing attorneys. The High Court dismissed the application for lack of locus standi and made punitive costs orders de bonis propriis against the applicant. The full court dismissed an appeal, primarily on prescription grounds, but did not address the costs appeal. The applicant sought special leave to appeal to the Supreme Court of Appeal.

Special leave to appeal was granted only in respect of the costs de bonis propriis orders. The appeal on costs was dismissed, subject to an amendment of the full court’s order. The full court’s order was set aside and substituted to clarify that the applicant was personally liable, on an attorney-and-client scale de bonis propriis, for the costs of specified respondents. The applicant was ordered to pay the costs of the appeal, including the costs of two counsel where employed.

The case is significant for reaffirming the stringent approach of the Supreme Court of Appeal to shifting causes of action and unfounded allegations of fraud in motion proceedings. It underscores the circumstances in which punitive costs orders de bonis propriis may be justified against legal practitioners acting as litigants, and clarifies the limited scope of special leave to appeal where only costs issues warrant appellate intervention.