There are prescribed instances where one of the parties may be obliged or requested to furnish security for costs. In instances where it is not peremptory to do so, should any party desire the other to furnish security for costs, such a party would have to apply to the court to order the other party to furnish such security. On the one hand, r 49(13) of the Uniform Rules of Court, which regulates the procedure of all the Divisions of the High Court, makes it mandatory for any party granted leave to appeal to the Full Court of the High Court to furnish security for costs. On the other hand, when leave to appeal is refused by a single judge of the High Court and the Supreme Court of Appeal (SCA) is petitioned for leave to appeal, r 9 of the SCA Rules empowers the SCA when so requested to order the party that applied for leave to appeal to furnish security for costs.
The challenge arises when leave to appeal is refused by a single judge of the High Court and granted by the SCA to the Full Court of the High Court. There is controversy as to whether the party that has been granted leave to appeal to the SCA should furnish security for costs in terms of r 49(13). In other words, when the SCA granted leave to appeal to the Full Court, the operation of r 49(13) was revived even though this rule ceased to apply when a single judge of the High Court refused leave to appeal before the SCA was petitioned. In this article, we evaluate whether the party granted leave to appeal to the Full Court by the SCA is obliged to furnish security for costs, as such a party would have been expected to had leave to appeal been granted by a single judge of the High Court.
An unsuccessful party can approach a single judge in the High Court who dismissed the case, to grant leave to appeal to the Full Court. Such an application may only be granted when there is a reasonable prospect of success in terms of s 17(1)(a) of the Superior Courts Act 10 of 2013 or there is some other compelling reason why the appeal should be heard. The procedure for the payment of costs by the party seeking leave to appeal is regulated by Uniform Rule 49(13) when leave to appeal is requested from a single judge of the High Court who dismissed the original application. Uniform Rule 49(13)(a) requires an appellant to furnish security for the respondent’s costs following a successful leave for appeal unless such costs are waived by the respondent or the court releases the appellant from furnishing such costs. It is irregular for an appellant to obtain a date for the hearing of an appeal without furnishing security for costs.
The proper reading of r 49(13) suggests that this rule ceases to operate when leave to appeal is refused. In circumstances where leave to appeal is refused by a single judge of the High Court, the unsuccessful party may petition the SCA in terms of s 17(2)(b) of the Superior Courts Act. The SCA is governed by its own rules, which determine, among others, how the issue of costs should be dealt with. Rule 9 of the SCA Rules gives the SCA the authority to order the party granted leave to appeal to furnish security for costs. Unlike in the High Court, if the respondent desires costs to be furnished, that respondent must request the SCA to order the appellant to furnish security for costs. Put differently, the petitioning party is not obliged to furnish security for costs as is the case in terms under Uniform Rule 49(13), unless the opposing party requests that security for costs should be furnished.
If the respondent did not request security for costs and the applicant did not furnish such security, the two judges of appeal who will consider leave to appeal at the SCA will not be prevented from determining that application. Should they grant leave to appeal, the appellant will not be barred from obtaining a hearing date because security for costs was not furnished. If, however, the appellant was ordered to furnish security for costs, a hearing date will not be obtained without furnishing security for costs. Rule 9 of the SCA Rules specifically obliges the registrar of that court to deal with the issue of costs. Given the fact that when the SCA is approached for leave to appeal, the idea is to appeal to the SCA, when the SCA decides not to hear the appeal but instructs the Full Court to do so, the word ‘registrar’ in the SCA Rules must be understood to mean the registrar of the High Court.
We submit that this effectively means that Uniform Rule 49(13) cannot be resurrected. This rule only applies when leave to appeal is requested, not after leave to appeal has been considered and ultimately ordered. The implication here is that an unsuccessful party in the High Court is thus not obliged to comply with r 49(13) when leave to appeal is granted by the SCA to the Full Court of the High Court. If the SCA decides to hear the appeal, there is no controversy because its rules would be applicable. The controversy results when the SCA decides to grant leave to appeal to the Full Court of the High Court. We submit that Uniform Rule 49(13) is not applicable when the SCA grants leave to appeal either to the High Court or the SCA. The applicant is not obliged to furnish security for costs where the SCA did not order such costs to be furnished. We reiterate that Uniform r 49(13) is not triggered when the SCA grants an appeal to the Full Court of the High Court. Uniform Rule 49(13) refers to the term ‘court’ and Uniform Rule 1 defines and limits the term ‘court’ to the High Court as referred to in s 6 of the Superior Courts Act. Therefore, the orders of the SCA cannot be determined in terms of Uniform Rule 49(13), which refers to the High Court.
There are contrasting decisions on this matter. First, in Strouthos v Shear 2003 (4) SA 137 (T), leave to appeal was refused by the single judge of the High Court and eventually granted by the SCA to the Full Court of the High Court. Without any engagement with the text of r 49(13) of the Uniform Rules of Court and r 9 of the SCA Rules, Daniels J held that:
‘In granting leave the Chief Justice did not release the respondent wholly or partially from his obligation to furnish security for the applicant’s costs of appeal as contemplated in rule 49(13)(a) of the Uniform Rules of Court’ (at 138).
The court was of the view that when leave to appeal is granted by the SCA, it is only the SCA that has the power to release the petitioner from his obligation to provide security (at 140). We are of the view that the extent to which the court suggests that when leave to appeal was refused in the High Court, an obligation arose to furnish security for costs, the court erred. In our view, the obligation imposed by r 49(13) only arises when the single judge who dismissed the original application grants leave to appeal. This incorrect legal position, which is not substantiated in the judgment was followed in LG v JG (GJ) (unreported case no 32377/2012, 28-4-2023) (Windell J).
In this case, without providing any useful assessment and engaging with the contrary decision, which will be discussed below, the court opined that if the SCA grants leave to appeal to the Full Court, the Uniform Rules of Court are applicable and r 49(13) must, therefore, be given effect to. In other words, the successful party at the SCA must furnish security for costs. With respect, this approach is fundamentally flawed. The correct approach is provided in a well-researched and reasoned judgment of Allem Incorporated v Baard; In re: Baard v Allem Incorporated [2022] 1 All SA 680 (GJ); 2022 (3) SA 207 (GJ). In this case, leave to appeal to the Full Court of the High Court was also granted by the SCA without ordering the successful party at that court to furnish security for costs. The court convincingly stated that rule 9(1) of the SCA Rules:
‘… suggests that, in cases where leave to appeal is granted by the SCA under its rules, the precondition for a demand that security be given must be an order by the SCA that it be done. I am of the view that rule 49(13) does not find application, because the order is one made by the SCA. And under that order there is no entitlement that must be waived and the order granting leave to appeal by implication absolved the respondent from any duty to furnish costs’ (para 61).
Most importantly, the court engaged with the reasoning and approach adopted in Strouthos and illustrated why this decision was wrongly decided. In particular, the court reasoned that it is for the respondent to request the SCA to order the petitioner to furnish security for costs (para 67). The reasoning of this court is to the effect that where the respondent failed to request the SCA to order the petitioner to furnish security for costs, it is not irregular to proceed with the filing of the record in the absence of security before applying for a hearing date of the appeal. We respectfully submit that this is the correct legal position. If the legislature or the drafters of the SCA Rules and the Uniform Rules of Court intended to burden petitioners with security for costs, they would have explicitly done so.
In conclusion, we submit that petitioners who apply for leave to appeal and are granted leave by the SCA to appeal to the Full Bench of the High Court are not obliged to comply with r 49(13) of the Uniform Rules of Court because this rule specifically deals with applications for leave to appeal, and not the position when leave to appeal has been granted. We plead with courts to be vigilant and guard against abuse by parties that unnecessarily delay appeals with frivolous interlocutory applications for security for costs with the sole aim of preventing appeals from proceeding, particularly against opponents who do not have the financial means to sustain expensive litigation.
Clement Marumoagae LLB LLM (Wits) LLM (NWU) Dip Insolvency Practice (UP) PhD (UCT) is a legal practitioner at Marumoagae Attorneys and a Professor at the University of Witwatersrand in Johannesburg. Palesa Lebitse LLB (Unisa) LLM (Wits) is a fulltime PhD Law Candidate at the University of Witwatersrand.
This article was first published in De Rebus in 2024 (Aug) DR 34.
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