Meynell Investments Limited v Azarenka (Pty) Ltd (3706/2024) [2024] ZAWCHC 216 (22 August 2024)

Key Facts

Transaction Type

Issues

• The court considered Azarenka's breach of the 25 March 2024 order by filing its answering affidavit and heads of argument three months late. This caused procedural delays and was deemed vexatious conduct. Azarenka was ordered to pay wasted costs on an attorney-and-client scale, and the winding-up application was postponed to a semi-urgent roll date.
• The court addressed Azarenka's interlocutory application seeking security for costs (R500,000) and a postponement of the winding-up hearing. It ruled that Azarenka's common-law right to set off its debt to Meynell against any costs order provided sufficient protection, rendering the security claim unnecessary. The application was dismissed with costs on a party-and-party scale, including counsel's costs on scale B.

Holdings

• The winding-up application was postponed for hearing on a date on the semi-urgent roll to be arranged by the parties. This postponement followed the dismissal of Azarenka's interlocutory application and its non-compliance with procedural timelines.
• Azarenka was granted condonation for the late filing of its answering affidavit in the winding-up application. However, the court emphasized that this non-compliance with the 25 March 2024 court order constituted vexatious conduct and an abuse of process.
• Azarenka is ordered to pay the wasted costs arising from its late filing of the answering affidavit and heads of argument in the winding-up application. These costs are to be awarded on an attorney and client scale due to the breach of the court order.
• The interlocutory application brought by Azarenka was dismissed with costs on a party and party scale. This dismissal included the costs of the postponement of the interlocutory application on 7 August 2024 and counsel's costs on scale B. The court found that Azarenka's claims for security and discovery were without merit, particularly as it could set off any costs order against its substantial debt to Meynell.

Remedies

• The interlocutory application of Azarenka is dismissed with costs on a party and party scale, including the costs of the postponement and counsel's costs on scale B.
• The winding-up application is postponed for hearing on a date on the semi-urgent roll to be arranged by the parties with the Court.
• Azarenka is granted condonation for the late filing of its answering affidavit in the winding-up application, without requiring further condonation evaluation.
• Azarenka is ordered to pay the wasted costs occasioned by its late filing of the answering affidavit and heads of argument in the winding-up application, and the resultant postponement, on an attorney and client scale.

Legal Principles

• The court ruled on costs principles, dismissing Azarenka's interlocutory application and ordering costs on a party and party basis, with certain components on an attorney and client scale due to procedural breaches and vexatious conduct.
• The court assessed the application of Uniform Rules 35(12), 35(14), and 47, determining that Azarenka's discovery requests under these rules were without merit and that the security for costs request was not timely.
• The court applied the common law principle of set-off (compensatio), determining that Azarenka could set off any costs order against its substantial indebtedness to Meynell, thus providing sufficient protection without needing additional security.

Precedent Name

• The MV Urgup: Owners of the MV Urgup v Western Bulk Carriers (Australia) (Pty) Ltd and others
• Moulded Components and Rotomoulding South Africa (Pty) Ltd v Coucourakis
• Reuben Rosenblum Family Investments (Pty) Ltd and Another v Marsubar (Pty) Ltd
• Mystic River Investments 45 (Pty) Ltd and Another v Zayeed Paruk Inc. and Others
• Capricorn Makelaars (Edms) Bpk and others v EB Shell Investment No. 79 (Pty) Ltd and others
• Lewis Group Ltd v Woollam and others
• Magida v Minister of Police
• Premier Freight (Pty) Ltd v Breathetex Corporation (Pty) Ltd
• Wildlife & Environmental Society of South Africa v MEC for Economic Affairs, Environment and Tourism, Eastern Cape and Others
• Loretz v MacKenzie
• Bovenzer v Bovenzer
• Silvercraft Helicopters (Switzerland) Ltd and Another v Zonnekus Mansions (Pty) Ltd and others
• Democratic Alliance and Others v Mkhwebane and Another

Cited Statute

• Uniform Rules of Court
• Reciprocal Enforcement of Judgments Act

Judge Name

Passage Text

• Under the common law, set-off (or compensatio) is possible where debts owed by two entities are (i) of the same nature (e.g., in money), (ii) liquidated (i.e., when the exact money value is certain); (iii) fully due; and (iv) payable by and to the same persons in the same capacities.
• Azarenka's only response on affidavit to Meynell's submission that Azarenka's interests were sufficiently protected by its common-law right to set off a money debt owed by Meynell to Azarenka against Azarenka's own payment obligations to Meynell was that: 'Sett [sic] off is denied as no indebtedness is admitted at all'.
• Azarenka must pay the wasted costs occasioned by its breaches of the court order on an attorney and client scale.

Damages / Relief Type