Glencore Africa Oil Investments (Pty) Ltd v Ramano and Others

JurisdictionSouth Africa
Citation2020 (3) SA 419 (GJ)

Glencore Africa Oil Investments (Pty) Ltd v Ramano and Others
2020 (3) SA 419 (GJ)

2020 (3) SA p419


Citation

2020 (3) SA 419 (GJ)

Case No

010321/2019

Court

Gauteng Local Division, Johannesburg

Judge

Levenberg AJ

Heard

September 30, 2019

Judgment

September 30, 2019

Counsel

RM Pearse SC (with ALS Msimang) for the applicant.
PG Seleka SC
(with K Pillay) for the respondents.

Flynote : Sleutelwoorde

Costs — Liability for — Matter unopposed — No principle that costs order against respondent cannot be made — Court's discretion.

Headnote : Kopnota

There is no principle that a costs order cannot be made against a respondent in an unopposed matter. While there might be sound policy considerations why, for example, the respondent in a review application (who may be a public body, a magistrate, a Master, or an arbitrator) would not be required to pay the costs of the application, save in the event of opposition, the same considerations do not apply to applications for relief against ordinary commercial entities. The statement in Cilliers Law of Costs that 'where there is a complete lack of opposition in litigation, there is no need for a costs order — and, except perhaps in exceptional circumstances, perhaps even no scope' is not supported by the cases there cited and does not reflect current practice in the Johannesburg High Court. (See [47] – [49], [56].)

Cases cited

Da Cruz and Another v Cape Town City and Another 2017 (4) SA 107 (WCC): distinguished

De Villiers v Kapela Holdings (Pty) Ltd 2016 JDR 1942 (GJ) ([2016] JOL 36191): referred to

Fripp v Gibbon & Co 1913 AD 354: dictum at 357 applied

Groenewald v Mokgethi [2016] JOL 34589 (LC): distinguished

Maccsand CC v Macassar Land Claims Committee and Others [2005] 2 All SA 469 (SCA): referred to

Nedbank Ltd v Jones [2017] JOL 38025 (WCC): compared

Nedbank Ltd v Steyn and Others 2016 (2) SA 416 (SCA): applied

Pelser v Levy 1905 TS 466: dictum at 469 applied

Pretoria Garrison Institutes v Danish Variety Products (Pty) Ltd 1948 (1) SA 839 (A): dictum at 863 applied

Setlogelo v Setlogelo 1914 AD 221: dictum at 227 applied

Shatterprufe (Pty) Ltd v Sesani NO [2016] JOL 35676 (LAC): distinguished.

Case Information

RM Pearse SC (with ALS Msimang) for the applicant.

PG Seleka SC (with K Pillay) for the respondents.

An application for the determination of costs in an interdict granted in the urgent court.

Order

1.

The first respondent is to pay the costs of the application, which costs include all costs relating to the hearing and order obtained on 2 April 2019 (as amended) and the costs relating to the hearing on 11 September 2019.

2.

The costs include the costs of two counsel.

2020 (3) SA p420

Judgment

Levenberg AJ:

1. The court orders

[1] This matter was set down to determine the issue of costs as between the applicant and the first respondent in the wake of an interdict granted in the urgent court. Both parties were represented by senior and junior counsel. Mr Pearse SC appeared for the applicant and Mr Seleka SC appeared for the respondents. I want to thank all counsel for the extensive heads of argument that they provided and the professional manner in which they dealt with the application.

[2] This matter started out as a successful urgent application ('the application') launched by the applicant ('the applicant' or 'Glencore') on 19 March 2019. The application arose out of the failure of the first to eighth respondents (collectively 'the shareholder respondents') to give an undertaking that they would honour certain prior irrevocable undertakings relating to their shareholdings in African Legend Investments (Pty) Ltd ('ALI'), the tenth respondent in the application.

[3] There was no formal opposition to the application and an order was granted by Dippenaar J on 2 April 2019 as follows:

'1.

The Tenth Respondent is directed to hold a shareholders meeting called in terms of the notice attached to the founding affidavit marked FA16 ("the Notice") at 9h30 on 4 April 2019 at the Maslow Hotel, Auditorium Room, cnr of Grayston Drive and Rivonia Road ("the Meeting"), for the purpose of the shareholders voting on Special Resolution 1 referred to in the Notice.

2.

The First to Eighth Respondents are directed to attend the meeting, in person or by proxy, to vote such shares as they own or control in favour of Special Resolution 1 (relating to the transactions set out in the two Sale and Purchase of Shares Agreements between the applicant and the Ninth Respondent on 6 October 2017) in compliance with irrevocable undertakings given by the First to Eighth Respondents during September 2017, and the Sheriff of the High Court, Sandton, or his deputy is authorised, in the stead of the First to Eighth Respondents, to attend the meeting and vote in favour of Special Resolution 1 in the event that the First to Eighth Respondents are not present at the meeting and/or do not vote in accordance with the irrevocable undertakings given by the First to Eighth Respondents during September 2017.

3.

The costs of this application, including the costs of two counsel, are to be paid by the first respondent.'

[4] As soon as he became aware of the order, the first respondent, Mashudu Ramano ('first respondent' or 'Ramano'), instructed his attorneys, Herold Gie Attorneys ('Gie'), to address a letter to the applicant's attorney on 3 April 2019 (erroneously dated 12 March 2019).

[5] In that letter he maintained that, as none of the respondents had opposed the application, it was improper to make an adverse costs order against the first respondent.

[6] He referred specifically to prayer 4 of the notice of motion which provides:

2020 (3) SA p421

Levenberg AJ

'Directing the first respondent and such respondent(s) as may oppose the relief sought in this application to pay the costs of this application, including the costs of two counsel, jointly and severally, the one paying the other to be absolved.' [Emphasis added.]

[7] The letter then went on to state:

'4.

The Notice of Motion accordingly only provides for costs orders to be sought against Respondents who oppose this application.

5.

None of the Respondents opposed the application and accordingly no costs order should have been granted.

6.

We confirm that had you sought a costs order against any of the Respondents regardless of whether or not they opposed the application, such prayer/relief would have been opposed by our client/s. In this regard we point out that we were not provided with a draft order and that the first respondent who was in fact present at court on 2 April for a related matter would not have consented to a costs order against him under any circumstances.

. . .

8.

In light of the above, we ask that you consent to the amendment of the court order by replacing paragraph 3 herewith with:

8.1

"No order as to costs" or, alternatively,

8.2

"Costs to stand over for later determination".'

[8] The applicant's attorneys responded by letter in which they agreed to amend the court order. In the result, an amended order was entered by agreement which provided that 'Costs to stand over for determination'.

[9] After the amended order was entered, the parties' attorneys exchanged various correspondence in an attempt to avoid having to set the matter down specifically to argue the issue of costs. Both parties claimed that they were reasonable in the positions they took with regard to the costs. It is not necessary for me to decide this issue.

[10] As the attempt to resolve the issue of costs failed, the matter was set down in the motion court for the argument on costs. At the hearing, both parties were represented by senior and junior counsel. The hearing took nearly a full day of argument.

[11] It is regrettable that a matter of this size and magnitude had to be set down for lengthy argument simply over an issue of costs. One would have hoped that the parties could have come to some reasonable accommodation to avoid this eventuality. However, be that as it may, the parties were entitled to have the issue of costs (which could be substantial in this case) properly argued and ventilated and this is exactly what occurred.

2. Background to the urgent application [1]

[12] During 2015 an opportunity arose for the applicant to acquire from a US oil company, Chevron, a 75% shareholding in Caltex SA (which also holds 100% of the shares in Caltex Botswana). This opportunity

2020 (3) SA p422

Levenberg AJ

arose through Off The Shelf Investments 56 (RF) (Pty) Ltd, the ninth respondent in these proceedings ('OT56'). OT56 had a right of pre-emption to acquire Chevron's 75% shareholding in Caltex SA but lacked the funds to implement the transaction.

[13] Chevron insisted that the terms of the right pre-emption be strictly observed, with the result that the shares were transferred by Chevron to OT56. The applicant loaned OT56 an amount of USD 1,165 billion (approximately R17 billion on current exchange rates) to OT56 in order to enable it to exercise the right of pre-emption and to pay the purchase price.

[14] A two-stage transaction was envisaged, pursuant to which OT56 initially acquired the shareholding from Chevron on the strength of the loan made by the applicant. Thereafter, pursuant to certain side agreements concluded between the applicant and the respondents, OT56 was to on sell the shares to the applicant's nominee, Luxanio Trading 180 (Pty) Ltd (JVIV), for the amount of USD 1,156 billion (the amount initially advanced by the applicant to OT56).

[15] The controlling shareholder in OT56 was ALI. In order to complete the transaction, it was necessary for the shareholders of ALI to attend a general meeting to approve of the disposal by OT56 to Glencore of all of the shares in the Caltex entities in terms of ss 112 and 115 of the Companies Act...

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1 practice notes
  • Civil Procedure
    • South Africa
    • Juta Yearbook of South African Law No. , March 2021
    • 10 March 2021
    ...be 52 Para [26].53 Maguru v Road Accident Fund 2020 (3) SA 225 (LT) paras 17–18.54 Glencore Africa Oil Investments (Pty) Ltd v Ramano 2020 (3) SA 419 (GJ) paras 47–49 and 56.© Juta and Company (Pty) YeArBooK oF SouTH AFriCAN lAW138https://doi.org/10.47348/YSAL/v1/i1a3produced under rule 35(......
1 books & journal articles
  • Civil Procedure
    • South Africa
    • Juta Yearbook of South African Law No. , March 2021
    • 10 March 2021
    ...be 52 Para [26].53 Maguru v Road Accident Fund 2020 (3) SA 225 (LT) paras 17–18.54 Glencore Africa Oil Investments (Pty) Ltd v Ramano 2020 (3) SA 419 (GJ) paras 47–49 and 56.© Juta and Company (Pty) YeArBooK oF SouTH AFriCAN lAW138https://doi.org/10.47348/YSAL/v1/i1a3produced under rule 35(......

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