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[2016] ZASCA 79
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Roering NO and Another v Mahlangu and Others (581/2015) [2016] ZASCA 79; [2016] 3 All SA 466 (SCA); 2016 (5) SA 455 (SCA) (30 May 2016)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
no:581/2015
DATE:
30 MAY 2016
Reportable
In
the matter between:
LEIGH
WILLIAM ROERING
NO
................................................................................
First
Appellant
MABATHO
SHIRLEY MOTIMELE
NO
.................................................................
Second
Appellant
And
QEDANI
MAHLANGU
...............................................................................................
First
Respondent
THE
MASTER OF THE SOUTH
GAUTENG
HIGH
COURT
.....................................................................................
Second
Respondent
COMMISSIONER
ADVOCATE
CHARLES
SCOTT
STEWART
.................................................................................
Third
Respondent
Neutral
citation:
Roering and Another NNO v
Mahlangu
(581/2015)
[2016] ZASCA 79
(30
May 2016)
Coram:
WALLIS, WILLIS, SALDULKER and ZONDI JJA and TSOKA
AJA
Heard
:
20 May 2016
Delivered
:
30 May 2016
Summary:
Company law – Enquiry in terms of
ss 417 and 418 of the Companies Act 61 of 1973 – summons to
attend – application
to set aside summons – abuse of
process – what constitutes – fact that the issues
canvassed may overlap with
issues in pending or contemplated civil
litigation not as such a ground for inferring abuse
ORDER
On
appeal from:
Gauteng Local Division,
Johannesburg of the High Court (Mosikatsana AJ sitting as court of
first instance):
1
The appeal is upheld with costs.
2
The order of the High Court is altered to
read as follows:
‘
The
application is dismissed with costs.’
JUDGMENT
Wallis
JA (Willis, Saldulker and Zondi JJA and Tsoka AJA concurring)
Introduction
[1]
In June 2007 the Department of Health,
Gauteng (the Department) concluded a service level agreement with 3P
Consulting (Pty) Ltd
(3P Consulting) in terms of which 3P Consulting
was obliged to establish a Project Management Unit for the
Department. On 23 March
2009 the agreement was extended for a further
three years. After the April 2009 general election, the first
respondent, Ms Qedani
Mahlangu, was appointed as the member of the
executive council (MEC) for health in Gauteng. Shortly thereafter a
review of projects
occurred and on 1 July 2009 the Department wrote a
letter to 3P Consulting stating that it would no longer perform in
terms of
the extended agreement. According to Ms Mahlangu’s
affidavit this was ‘due to serious allegations of impropriety
as
well as irregularities in the award as well as the extension of
the agreement’.
[2]
After that there was extensive litigation
between the parties. On 18 February 2010 the South Gauteng High Court
(Lamont J) granted
a declaration that the services agreement between
3P Consulting and the Department was validly concluded and extended.
However,
he refused to grant judgment for payment of certain invoices
that 3P Consulting alleged were due, owing and payable and remained
unpaid. He held that it was disputed that these amounts were in fact
payable. However, he made it clear that this was no more than
a
finding of absolution from the instance, leaving 3P Consulting free
to pursue the claim in other proceedings.
[3]
The
Department’s appeal to this court against that decision
failed
[1]
and on 7 February 2011
the Constitutional Court refused leave for a further appeal. On 13
October 2011, 3P Consulting instituted
application proceedings
against the Department claiming payment of some R99 million.
It is not apparent from the notice
of motion whether this related
only to amounts allegedly due to it prior to 1 July 2009, or whether
it included amounts said to
have become due thereafter. Counsel was
not in a position to enlighten us in that regard. If they were the
same claims as had been
advanced before Lamont J, it was unclear on
what basis proceedings were again pursued by way of application
instead of action.
Be that as it may, the Department defended the
application. According to Ms Mahlangu, its grounds for doing so were
that ‘it
received no value, the contract documents and other
related documents are irregular and that the entire action is tainted
by fraud’.
Not surprisingly in the circumstances the
application was referred to trial, but, before the trial could
proceed, 3P Consulting
was placed in provisional and then final
liquidation. The present appellants are its duly appointed
liquidators.
[4]
The
only significant asset of 3P Consulting was its claim against the
Department. The liquidators obviously had no personal knowledge
of
that claim or of the grounds for its defence. They accordingly sought
and obtained leave from the Master of the South Gauteng
High Court
[2]
for an enquiry to be convened pursuant to the provisions of ss 417
and 418 of the Companies Act 61 of 1973 (the Act).
[3]
Their purpose in doing so was to gather information and make an
informed decision on whether or not to continue the litigation.
After
hearing the evidence of a number of witnesses the liquidators formed
the view that Ms Mahlangu would be able to provide important
information relating to 3P Consulting’s dealings with the
Department. They accordingly asked the commissioner
[4]
to authorise and issue a summons for Ms Mahlangu to appear before the
commissioner and give evidence as part of the enquiry.
[5]
The present litigation arises from the
commissioner’s decision to accede to that request. I will deal
with Ms Mahlangu’s
response to the summons in greater detail
later in this judgment. It suffices for present purposes to record
that she applied to
the Gauteng Local Division, Johannesburg of the
High Court for an order setting it aside as an abuse of process. That
application
was granted by Mosikatsana AJ. This appeal is with his
leave.
Proceedings
at the commission
[6]
An odd feature of this case is that, when
she was initially summoned to give evidence to the commission, Ms
Mahlangu did not regard
the summons as an abuse and indicated that
she wished to be as helpful as possible. She appeared on
29 July 2013, together
with Mr Lekabe, the State
Attorney, South Gauteng, and asked for a brief postponement in order
to enable her to be properly
prepared. She explained that she had
moved on from the Department of Health and had filled two other
offices as a member of the
executive council in the Gauteng
administration since then, including her current position as the MEC
for Infrastructural Development.
Accordingly, she was not in
possession of any files from her former department and wanted the
opportunity to refresh her memory
before testifying. Mr Lekabe
explained that it ‘would make no sense for her to come here and
sit here and keep on saying:
“I can’t remember. I can’t
remember.” It will defeat the purpose of the enquiry.’
[7]
At one stage in the proceedings Ms Mahlangu
herself intervened to plead for a postponement. She asked the
commissioner to give her
the benefit of the doubt that she came
before him ‘with good intentions’. She explained her
position as follows:
‘
So
all I’m simply asking for is to let me just go through all the
necessary things that will help me to remember what would
have
happened in the meetings that I would have presided over. As in all
the management meetings I’ve had, and on the basis
of that and
any other thing that I would remember, so that I come here prepared
and I will be able to answer you diligently and
honestly.’
She
asked for a few days so that she could go back and prepare. Mr Lekabe
chimed in and told the commissioner that:
‘
Ms
Mahlangu wants to come here and assist this enquiry. That is what she
wants to do, but provided she is prepared to do so.’
[8]
In response to these pleas the enquiry was
adjourned to 27 August 2013. On that day Ms Mahlangu did
not appear and a medical
certificate was tendered on her behalf. But
five people appeared to represent her. Two were officials, one a
legal adviser in the
Department of Infrastructure Development and the
other a legal adviser in the Department of Health. Two were from the
firm of attorneys
that represented her in this appeal and one was an
advocate. Two other people were present from the anti-corruption task
team although
their role was obscure. On this occasion the enquiry
was adjourned to 15 October 2013. Although the merits of the
summons
were not discussed, it was indicated that it was unnecessary
to issue a fresh summons. There was no suggestion that summoning Ms
Mahlangu was an abuse.
[9]
In the circumstances, it must have come as
something of a surprise to the commissioner and the liquidators when,
shortly before
15 October 2013, they were confronted with an
urgent application for an order that Ms Mahlangu be excused from
attending the
enquiry pending an application to set aside the summons
as an abuse, joined with an application for a penal costs order
against
anyone opposing the application. An interim order was granted
on 15 October 2013 and, as noted above, a final order setting aside
the summons was made on 26 January 2015.
[10]
There is nothing in the papers to indicate
what caused this change of heart on the part of Ms Mahlangu. Counsel
endeavoured to explain
it from the bar on the basis that between the
first and the second sessions of the enquiry she changed legal
advisers. There are
two obstacles to accepting that contention. The
first is that it nowhere appears in the affidavits where one would
have expected
to find an explanation. While there is reference to her
changing legal advisers, she does not say that the advice she
obtained
from her new advisers was different from that of her
original legal team. The second is that the new legal team gave no
indication
to the commissioner and the liquidators that there was any
problem with or objection to the summons. As matters stand it is
unexplained.
That does not mean that she cannot contend that the
issue of the summons was an abuse. But, in the light of her original
co-operative
attitude, it does indicate that her allegations of abuse
must be scrutinised with care, as they may have been raised purely in
an endeavour to avoid being examined and not because the allegations
of abuse are genuine.
The
claim of abuse
[11]
Ms Mahlangu claimed in her founding
affidavit that the liquidators wished to use the enquiry proceedings
‘to obtain information
from me to bolster its case against the
Gauteng Province’. She went on to contend that it was
‘unfair, prejudicial
and detrimental to fair play in any
litigation process’ to permit one of the parties to use the
mechanism of an enquiry under
the Act ‘to gather information
from a representative of the other party (and against the wishes of
the other party) to build
or better its case in civil litigation’.
This she characterised as an abuse.
[12]
Although at points in the affidavits there
are hints that Ms Mahlangu did not possess any information relevant
to the dealings between
the department and 3P Consulting, these hints
were belied by statements from her own mouth. One cannot gather
information
from someone who does not possess information. Indeed,
had that been the case one cannot see why she would have been
reluctant
to testify. When asked she could simply have told the
commissioner that she had no information regarding the issues under
investigation.
No doubt she might have been able to point to relevant
officials who might have had knowledge, but beyond that the whole
matter
could have been disposed of relatively quickly and painlessly.
[13]
In fact that was not the position. It
emerged that she was concerned that the information she had, or her
lack of information on
important issues, might bolster the
liquidators’ case. The statements in her affidavits quoted
earlier in paragraphs 1 and
3, dealing with the reasons for the
Department attempting to avoid the contract and the defence to the
monetary claims, supported
the conclusion that she had knowledge of
these matters. So did her statements when she first appeared before
the enquiry. In her
capacity as MEC she chaired the meetings at which
these matters were discussed and decisions were taken. Counsel
accepted that
she had knowledge of matters relevant to the
Department’s dealings with 3P Consulting in regard to this
contract and this
claim. He went so far as to say that she was a
central witness for the Department’s case.
[14]
In regard to the liquidators’ purpose
in asking for Ms Mahlangu to be summoned to the enquiry, Mr Leigh
Roering, the first
appellant, deposed to the affidavit on behalf of
the liquidators. He explained that the reason for 3P Consulting going
into liquidation
was its non-receipt of the money claimed in the
pending litigation, which resulted in it being unable to pay its
creditors. In
the light of the evidence of the witnesses who had
testified thus far in the commission, he said that the liquidators
had obtained
insight into the affairs of 3P Consulting, which
had led them to the conclusion that Ms Mahlangu could give them
important
information in regard to its relationship with the
Department. While the nature of that information was not specified,
the commissioner
filed a report in which he said that he was at all
times of the opinion that Ms Mahlangu was a person capable of giving
information
concerning the trade, dealings, affairs and property of
the company in liquidation. That information must have related to the
company’s
dealings with the Department.
[15]
In her replying affidavit Ms Mahlangu did
not challenge these statements by Mr Roering and the commissioner.
She complained of the
failure to include a copy of the application
made to the Master before the commission was established, although,
as her challenge
was to the summons addressed to her and not the
decision of the Master to establish the commission in the first
place, that was
hardly relevant. She said that the application was
necessary in order to determine whether the commissioner was
justified in issuing
the summons, but failed to explain why this was
so. She said that there was no evidence that the former directors of
3P Consulting
were unwilling to assist the liquidators. But that
did not meet the point that the liquidators and the commissioner had
formed
the view that she was in possession of relevant information.
As regards the commissioner’s report she complained that it did
not take the form of an affidavit. That ignored the well-established
practice of functionaries such as the Master or the Registrar
of
Deeds, or persons conducting enquiries, such as commissioners or
arbitrators, placing information before a court by way of a
report
rather than an affidavit. It is only if the contents of the report
become controversial that an affidavit is called for.
Had Ms Mahlangu
brought review proceedings, a matter with which I deal at the
conclusion of this judgment, the commissioner might
have been obliged
to act differently.
[16]
On the face of it the liquidators had every
reason to think that Ms Mahlangu was in a position to give
information to the commissioner
about the alleged irregularities in
the award and extension of the contract that led to the attempt to
cancel it. She would be
able to say on what factual basis the
Department claimed that it received no value in respect of the
invoices that are the subject
of the claim in the application that
has been referred to trial. As the political head of the Department
at that time she would
be best placed to given an overview of the
information on the basis of which the relevant decisions were taken.
These were obviously
relevant to the liquidators’ task. They
needed to know the foundation for the contention that the documents
were irregular
and the claim tainted by fraud before they advised
creditors whether to proceed with the trial and incur the expense of
doing so.
[17]
Essentially, Ms Mahlangu contended that
obtaining information on those matters was an abuse of process in the
light of the application
claiming the sum of R99 million from
the Department. In argument both of her counsel repeatedly returned
to the proposition
that, because there was pending litigation in
which she would be a central witness for the Department, it was an
abuse of process
to require her to give evidence at the enquiry. They
claimed that it would confer an improper advantage on the liquidators
in pursuing
the litigation. This argument was advanced without any
reference to the facts or any evidence that, in the particular
circumstances
of this case, requiring Ms Mahlangu to give evidence
would cause any special or particular harm to her or to the
Department in
the conduct of its case, assuming that the litigation
proceeds. There was no evidence to show that the liquidators were
already
in possession of the information they wished to obtain from
her, or that this could be obtained from the former officers of 3P
Consulting. We were told that there was evidence available to the
liquidators in the form of the affidavits filed in the application,
but those were not placed before us to illustrate the proposition
that summoning her to the enquiry was an abuse.
[18]
Stripped of the emotive language in which
the argument was couched, it amounted to no more than this: In any
situation where litigation
by the liquidators is underway or
contemplated it would be an abuse for a potential witness for the
other party to that litigation
to be summoned to an enquiry in terms
of ss 417 and 418 of the Act to be questioned about matters
bearing upon that litigation.
The proposition is extreme. It would
mean that in any situation where liquidators were considering whether
to pursue a claim instituted
by the company before its liquidation,
whether they came on the scene after litigation had commenced or
whether they were contemplating
instituting such litigation, it would
constitute an abuse were they to seek to examine a potential witness
for the other party
at an enquiry under the Act.
[19]
If correct, the ramifications of this would
be significant for the task of liquidators of companies and trustees
of insolvents.
If it were an abuse in this instance to summon Ms
Mahlangu and examine her, merely because she was a potential witness
in the pending
litigation, then, by parity of reasoning, it would be
an abuse in any other similar case. There is no reason to distinguish
Ms
Mahlangu’s position and this litigation from any other
possible witness and any other litigation. And it is not apparent
that the position would be altered if the litigation were not actual
but merely potential. Once the spectre of future litigation
arose it
would be an abuse to seek to bring a potential party or a witness for
the other side to an enquiry and examine them in
regard to issues
bearing upon that litigation. Against that background I turn to
consider the law on this topic.
The
law
[20]
The necessity in bankruptcy proceedings for
a means whereby liquidators or trustees can investigate the financial
position of the
insolvent or insolvent company has long been
recognised. It can be traced back to s 117 of the Bankrupt Law
Consolidation
Act 1849 (12 & 13 Vict c 106), which provided that
a bankrupt could be examined by the court:
‘
touching
all matters relating to his trade, dealings, or estate or which may
tend to disclose any secret grant, conveyance or concealment
of his
lads, tenements, goods, money or debts …’
Such
enquiries were made available in the case of companies in 1862 and
were first imported into South African legislation in 1868.
They have
remained part of our law ever since.
[5]
The Constitutional Court has affirmed the constitutional legitimacy
of such provisions.
[6]
[21]
Section 418, read with s 417, of the
Act provides that, where a company in liquidation is unable to pay
its debts, an application
may be made to the Master for an
examination or enquiry relating to the affairs of the company.
Section 417(1) sets out the permissible
scope of the enquiry. Any
person who is known or suspected to have in their possession any
property of the company, or is believed
to be indebted to the
company, or any person deemed capable of giving information
concerning the trade, dealings, affairs, or property
of the company
may be summoned to give evidence or produce documents. The potential
scope of such an enquiry is extremely wide.
In the present case it
would encompass all the issues surrounding the claim by 3P Consulting
against the Department. After all,
that claim was the main, if not
the sole, asset of the company and an enquiry into it would be one
related to the dealings, affairs
and property of the company. An
initial submission that the validity of the claim did not come within
the permissible scope of
an enquiry in terms of s 417(1) was
abandoned when counsel accepted that the claim was an asset of 3P
Consulting and that
it was therefore legitimate to enquire into its
validity.
[22]
The
Master is entitled to appoint a commissioner to conduct the enquiry.
That is what the Master did in this case when he appointed
Mr Stewart
as the commissioner. Once appointed the commissioner may summon
witnesses and require the production of documents. The
liquidators,
creditors, members and contributories may be present and represented
at the enquiry and are entitled to interrogate
any witness, provided
the scope of the interrogation is restricted to matters falling
within s 417(1). It would be impermissible,
for example, for a
member to examine a witness with a view to establishing that they had
a claim for defamation against that witness.
A person summoned to an
enquiry is entitled to legal representation and to be furnished with
a copy of their evidence. A witness
is obliged to answer any question
put to them, but incriminating answers are not admissible in evidence
against them in later criminal
proceedings.
[7]
[23]
In
Ferreira
Justice
Ackermann spelt out the purposes of an enquiry.
[8]
One of those purposes is to investigate the validity of claims by the
company and to determine whether they should be pursued.
It is
‘obviously in the interest of creditors that doubtful claims
which the company may have against outsiders be properly
investigated
before being pursued’.
[9]
The enquiry is the mechanism by which liquidators can properly
investigate ‘doubtful claims against outsiders before pursuing
them’.
[10]
Importantly:
‘
It
is permissible for the interrogation to be directed exclusively at
the general credibility of an examinee, where the testing
of such
person's veracity is necessary in order to decide whether to embark
on a trial to obtain what is due to the company being
wound up.’
[11]
[24]
Had
it not been for the form the argument took, the statement of
principle set out above would have sufficed for the purposes of
this
case. But counsel seized upon a passage from an English case in the
Court of Appeal in regard to the purpose of an enquiry
and deployed
it in support of an argument that the ambit of the enquiry is more
limited than that which might be indicated by these
statements of
principle. The passage comes from the judgment of Browne-Wilkinson
V-C in
Cloverbay
,
[12]
and reads as follows:
‘
(T)he
reason for the inquisitorial jurisdiction contained in s 236 is that
a liquidator or administrator comes into the company
with no previous
knowledge and frequently finds that the company's records are missing
or defective.
The purpose of s 236 is to
enable him to get sufficient information to reconstitute the state of
knowledge that the company should
possess.
’
(Emphasis added.)
[25]
In
referring to that passage in
Bernstein
,
[13]
in the context of the decision to convene an enquiry, Justice
Ackermann said the following:
‘
The
first consideration is that the purpose of the provisions is to
enable the liquidator to reconstitute the state of knowledge
of the
company in order to make informed decisions. The purpose is not to
place the company in a stronger position in civil litigation
than it
would have enjoyed in the absence of liquidation.’
Using
this as his foundation, counsel contended that the information that
might be obtained by examining Ms Mahlangu would go beyond
reconstituting the state of knowledge of the company as at the date
of liquidation, and would place the company in a stronger position
in
the pending litigation than would otherwise be the case. That was the
basis for his contention that summoning Ms Mahlangu to
the hearing
would be an abuse. He relied on the judgment in
Kebble
[14]
in support of this, although he overlooked the fact that in that case
the court declined to set aside a summons.
[26]
There is a twofold fallacy in this
argument. The first is that it treats Browne-Wilkinson V-C’s
statement of the statutory
purpose as if it reflected the only
purpose for an enquiry. The second is that it treats the obtaining of
an advantage in civil
litigation as a bar to the issue of a summons.
Neither is correct as a survey of authorities from various
jurisdictions reveals.
[27]
As
to the first of these propositions counsel found himself in good
company in that Hoffmann J (later Lord Hoffmann) had construed
the
same passage in
Cloverbay
as
imposing a constraint on the purposes for which an enquiry could be
ordered in England.
[15]
He
held that its effect was to limit the purposes of an enquiry to
obtaining the information ‘to which the company was entitled
from its officers and servants, past or present, as a matter of
contract or fiduciary duty.’ But that view was held to be
incorrect by the House of Lords in
Spicer
& Oppenheim
.
[16]
Speaking for the House, Lord Slynn of Hadley said:
[17]
‘
I
do not think that reading the judgment overall such a limitation to
“reconstituting the company’s knowledge”
was
intended to be laid down in the
Cloverbay
case.
In
any event for my part I do not think that such a limitation exists.’
[28]
That
conclusion was justified when regard was had to the history of
provisions of this ilk and the construction they have been given
down
the years by the courts. In
Re
Gold Co
[18]
it was said:
‘’
(T)he
whole object of the section is to … enable assignees, who are
now called trustees, in bankruptcy to find out facts
before they
brought an action, so as to avoid incurring the expense of some
hundreds of pounds in bringing an unsuccessful action,
when they
might, by examining a witness or two, have discovered at a trifling
expense that an action could not succeed.’
Buckley
J (as he then was), said in
Re
Rolls Razor Ltd
:
[19]
‘
It
is, therefore, appropriate for the liquidator, when he thinks that he
may be under a duty to try to recover something from some
officer or
employee of a company, or some other person who is, in some way,
concerned with the company's affairs, to be able to
discover, with as
little expense as possible and with as much ease as possible, the
facts surrounding any such possible claim.’
[29]
A
similar approach to the purpose for which the section may be used is
to be found in other jurisdictions having similar legislation
flowing
from the same legislative history. In Hong Kong it has been said:
[20]
‘…
it
is now settled that while one of the purposes … is to enable
the company’s knowledge to be reconstituted, it is
not the sole
purpose of the provision … The provision may be used to
discover facts and documents relating to specific claims
against
specific persons which the applicant has in contemplation and
it
is in itself no bar that the applicant may have commenced or may be
about to commence proceedings against the proposed witness
or someone
connected with him
…’
(Emphasis added.)
[30]
The
position in New Zealand is the same. In
Carrow
Holdings
,
[21]
Heath J said:
‘
Generally
speaking, a liquidator will not be prevented by the Court from
convening an examination simply because a firm decision
to issue
proceedings against the proposed examinee has been made or, indeed,
in circumstances where the proceedings have, in fact,
been issued.’
In
Re
Smith (A Bankrupt)
[22]
the New Zealand Court of Appeal dismissed an application by the wife
of the bankrupt to set aside a summons where the purpose of
the
enquiry was to determine whether there was a claim against her
personally. It held that the purpose was to determine whether
to
continue with existing proceedings against the wife with the same
knowledge that the wife had.
[23]
[31]
In
Australia the problem of a liquidator using an enquiry to ascertain
information about actual or potential litigation was dealt
with by
Street J in the following terms:
[24]
‘
A
liquidator needs information concerning his company just as much in
connection with current or contemplated litigation as in connection
with other aspects of its affairs. In using the statutory machinery
of private examination he will in many cases be gathering evidence
as
an ordinary and legitimate use of this procedure. ... In my judgment
it is immaterial in basic substance whether the private
examination
is sought to be used by a liquidator to gather information in
connection with proceedings he believes he might be able
to bring,
proceedings he contemplates bringing, proceedings he has decided to
bring, and proceedings he has already brought. There
is no presently
relevant distinction in substance between gathering information
referable to commencing proceedings and gathering
information
referable to continuing proceedings.’
[32]
The
same approach to similar powers of enquiry is adopted in Singapore.
In
W
& P Piling
[25]
Rajah
V-C said:
‘
Section 285
is couched in extremely generous terms. It should not therefore be
interpreted in a constricted manner by reference
to any apocryphal
purposes. It clearly cannot be used for any collateral purpose that
affords no benefit to the company. Other
than that, it may be invoked
for any proper purpose that can benefit the company and which is
within the statutory powers of the
liquidator and the scheme of the
companies legislation. … Furthermore, a liquidator has no
mandate to commence litigation
which has no real prospect of
succeeding.’
The
learned judge went on to say that:
‘
Information
may be sought and facts and documents discovered in relation to a
specific claim that the liquidator contemplates against
the examinee
or a related entity. There is no rule that precludes the ordering of
information against a proposed witness or someone
connected with him
…’
[33]
I
have no doubt that this approach correctly reflects the law in South
Africa. In
Ferreira
,
[26]
Justice Ackermann cited Lord Slynn’s conclusion in
Spicer
& Oppenheim
with
approval. In
Bernstein
,
[27]
he specifically rejected the narrow understanding of
Cloverbay
that the purpose of an enquiry was limited to reconstituting the
state of knowledge that the company should possess. It would be
a
work of supererogation on my part to cite the countless cases in
South Africa, of which
Bernstein
was
one, where the clear purpose of an enquiry was to determine whether
the company in liquidation had a sound claim against a third
party.
The proposition by counsel that the purpose of the enquiry must be so
limited must be rejected.
[34]
The second aspect of counsel’s
proposition is more directly connected to the issue of abuse. There
is no doubt that courts
have the power, and indeed the obligation, to
restrain the use of the power of enquiry where it would constitute an
abuse. The
more difficult issue lies in determining what constitutes
an abuse. Counsel’s argument was that it is an abuse when the
person
sought to be examined is a potential witness in future
proceedings and as a result of the examination of that witness the
liquidators
acquire insight into what the witness may say if called
at the trial. Unspoken, but lurking behind this submission, was a
fear
of the potential risk that interrogation might extract valuable
admissions from the witness, or the witness might be shown to be
flawed or unreliable.
[35]
While
the Constitutional Court in both
Ferreira
and
Bernstein
said
that our courts must be astute to prevent enquiries in terms of
ss 417 and 418 from being used as an instrument of abuse,
it did
not seek to expand on the meaning of that expression. But it did
refer to Australian cases as a helpful guide to the approach
to be
adopted by South African courts. Thus it quoted with approval the
following statement by Gleason CJ in
Hong
Kong Bank
:
[28]
‘
(w)hile
the Court would not permit a liquidator, or other eligible person, to
abuse its process by using an examination solely for
the purpose of
obtaining a forensic advantage not available from ordinary pre-trial
procedures, such as discovery or inspection,
on the other hand, the
possibility that a forensic advantage will be gained does not mean
that the making of an order will not
advance a purpose intended to be
secured by the legislation.’
Immediately
after this Justice Ackermann added the following far-reaching
comment:
‘
The
liquidator is entitled to obtain information, not only to ascertain
whether she/he has a cause of action, but also in order
to assess
whether the case is sufficiently strong to justify spending the
creditors' money in pursuit of it, and, conversely, whether
there is
an adequate defence to a claim against the company.’
[29]
[36]
What
constitutes an improper forensic advantage will depend upon the
circumstances of each case. Summoning a witness in order to
benefit a
third party, such as a creditor, in pursuing proceedings against that
witness or an entity that they represent, would
be such a case. In
Hong
Kong Bank
the example was given of an attempt to summon a witness with a view
to destroying their credit as a witness or to ‘enable
a dress
rehearsal of the cross-examination’. Another example mentioned
in
Excel
Finance
[30]
was of a summons directed at obtaining pre-trial discovery when a
discovery order had been refused in proceedings already on foot.
In
Re
Sasea Finance
[31]
the court refused to consent to an enquiry where its sole purpose was
to extract ‘damaging admissions and unconvincing
justifications’
for the purpose of a possible negligence claim
against auditors. Engineering an enquiry shortly before a trial in
which the liquidator
is the plaintiff in order to obtain ammunition
to attack the defendant in the trial has been described as ‘a
classic example
of harassment’.
[32]
[37]
Where
the evidential material is available to the liquidators from an
alternative source, or it can be obtained simply and expeditiously
without resort to the process of an enquiry, that will tend to show
that the liquidators have an ulterior motive in seeking to
examine
the witness and that the commissioner should not have acceded to the
request to summon that witness. But the fundamental
issue in
determining whether there is abuse is whether the enquiry is being
used for a purpose not contemplated by the Act. As
it was put in
Excel
Finance
:
[33]
‘
Whether
there will be, in a particular case, a use of the process or an abuse
of it will depend upon purpose rather than result.
The consequence of
an examination may well be that the examiner has conducted a “dress
rehearsal” of cross-examination
which may take place at a
subsequent trial. The fact that the trial has commenced, or is
contemplated, may throw light upon the
purpose. But merely because
other proceedings had been commenced, or are contemplated, would not
involve, of itself, an abuse of
process.’
[38]
Once it is accepted that a permissible
purpose in causing a witness to be summoned to an enquiry is to
enable the liquidator to
make an informed assessment of the merits of
a potential claim or defence to a claim, it must follow that the fact
that the individual
concerned is a potential witness in other civil
litigation, actual or contemplated, is neutral in determining whether
the summons
is an abuse. Something more must be identified as
constituting the abuse. It is inherent in the process of such an
enquiry that
there is a possibility that the examination of the
witness will be advantageous in future litigation. It may generate
information
that proves valuable in that litigation or helpful lines
of enquiry. It may demonstrate that a witness is a poor witness who
is
unlikely to withstand cross-examination. Admissions may be made
that are of assistance. The inability of a witness to provide a
credible explanation for a transaction may be extremely helpful. As
any experienced practitioner knows, often what is important
is not
what the witness can say, but what they are unable to say. Provided
the underlying purpose remains the proper one of assessing
the merits
of a claim or a defence on an informed basis, if these advantages
accrue to the liquidator along the way they are not
illegitimate.
[39]
Before
leaving this topic there are two other factors that I should mention
as bearing upon an investigation into whether an enquiry,
or a
summons to attend an enquiry, is an abuse. Hoffmann J (as he then
was), pointed out in
Re
J T Rhodes Ltd
[34]
that the cases that describe the powers of examination as redolent of
the Inquisition or Star Chamber were drawn from an era where
the
notion of personal privacy in regard to business dealings was more
stringent than it is today and the powers of inspection
and
examination that we now regard as normal in our modern highly
regulated commercial environment would have been regarded as
anathema. By contrast, our society is deeply concerned at the public
level with the consequences of corporate collapses, especially
where
that has a broad social impact on employees and vulnerable
investors.
[35]
The general
public has a legitimate interest in knowing that, when companies are
liquidated, those who have warranted the reliability
of financial
reports and those who promoted these public ventures will have to
explain why things went wrong. That suggests that
courts should not
too readily infer that a summons to attend an enquiry is an abuse.
[40]
The
second factor is that the evidence obtained from a witness at an
enquiry will, in many instances, be inadmissible in later civil
proceedings. That will not necessarily be so where those proceedings
are brought against the witness personally, as may be the
case in a
claim against a former director, but where those proceedings are
brought against an entity such as a company, a close
corporation or a
trust the evidence given at an enquiry will usually be inadmissible
against them.
[36]
That is a
considerable safeguard against abuse where the use to which the
evidence may be put is limited to assisting the liquidator
to form a
picture of what occurred and investigating a possible claim.
Was
the summons addressed to Ms Mahlangu an abuse?
[41]
I
have already summarised the contentions advanced on Ms Mahlangu’s
behalf. They were unsupported by any evidence at all that
pointed to
the summons being an abuse. At the outset she and the State Attorney,
South Gauteng, did not regard it as an abuse.
She did not indicate,
even in broad terms, what evidence she was capable of giving in
regard to the dealings between 3P Consulting
and the Department. It
was contended that the nature of that evidence emerged from the
affidavits filed by the Department in opposing
the claim for
judgment, but as those affidavits were not placed before the court in
these proceedings we do not even know whether
Ms Mahlangu was one of
the deponents. Nor can we know whether the areas that she can
traverse in her testimony could be adequately
or better dealt with by
others.
[37]
[42]
It was also suggested that this material
would emerge in the course of the trial, but that misses the point.
The liquidators were
seeking to explore the matter, in order to
determine what advice they should give the creditors in regard to
continuing the present
litigation. They could not do that properly,
expeditiously or inexpensively by following the often laborious
processes of preparing
for trial. Additionally, they did not have the
benefit, as they would in many other jurisdictions, of witness
statements furnished
in advance of trial. Lastly, there was no
guarantee that Ms Mahlangu would testify at the trial, in which event
the liquidators
would be compelled to litigate without knowing what
light she could cast on the dispute.
[43]
The suggested prejudice to the Department
was not established. Ms Mahlangu’s evidence at the enquiry
would, for the reasons
dealt with above, not be admissible against
the Department. If, as she said, the purpose was to obtain
information from her to
bolster the case against the Department, she
neither indicated what that information might be nor gave any good
reason why it should
not be disclosed to the liquidators. She said
that she did not wish the liquidators ‘to gain inside knowledge
I have of my
employer’s business’. Her perception that
she is a mere employee is curious. She is in fact an elected public
representative,
appointed by the Premier of the province to hold the
office of an MEC in the province. That aside, she has not taken the
court
into her confidence in regard to the nature of her knowledge,
or why it may affect the outcome of the litigation, or why it should
remain confidential.
[44]
In short, there was no evidence at all to
support Ms Mahlangu’s allegations that the summons addressed to
her constituted
an abuse. Her contention that this was so was based
on an erroneous understanding of the circumstances in which a person
may be
summoned to attend and give evidence at an enquiry under
ss 417 and 418 of the Act. The liquidators had clear and
justifiable
reasons for seeking her testimony. The commissioner
properly summoned her to attend. No abuse was involved.
[45]
The court below was asked by Ms Mahlangu to
approach the matter on the basis that the liquidators had already
decided to press ahead
with the litigation against the Department;
that all the information it could obtain from Ms Mahlangu was already
to be found in
the affidavits delivered in those proceedings and that
the purpose of summoning Ms Mahlangu to the enquiry was to use it as
a ‘trial
run or “pre-hearing” of the evidence to be
led’ in that litigation. Somewhat contradictorily, it was also
argued
that she could not state definitively whether the work
contracted for had been performed and that she could not advance the
Department’s
case in regard to other irregularities. No finding
was made in regard to these submissions but none of them had any
support in
the application papers before the court. What was before
the court and undisputed was the evidence of the liquidators that
they
had still to take a decision on whether to proceed with the
litigation and that the enquiry, including calling Ms Mahlangu as a
witness, was directed at giving informed advice to creditors in this
regard.
[46]
Notwithstanding this the judge in the high
court said that Ms Mahlangu’s relationship with 3P Consulting
was at arm’s
length and inherently adversarial. She accordingly
‘hardly qualifies as a person who can shed light on the
operations of
3P Consulting’. Needless to say that was
factually incorrect and involved the wrong approach to the issue of
abuse. Equally
incorrect was the view that ‘the enquiry may be
abused to gain pre-trial forensic advantages not permitted by rules
of court
to elicit information that may be used to uncover the
inherent strengths and weaknesses in 3P Consulting’s civil
lawsuit
against the Department’. It was not the potential for
abuse, which should in any event be prevented by the commissioner,
but the existence of actual abuse that was relevant.
[47]
As far as can be ascertained from the
judgment the reason the judge upheld Ms Mahlangu’s application
was his view that if
the enquiry proceeded ‘it will provide
them with a pre-trial forensic tool not provided by the rules of
court such as discovery
and inspection to weigh their chances of
success at trial’. That involved a fundamental misunderstanding
of the purpose of
an enquiry under ss 417 and 418. It was not a
proper basis for a finding of abuse. It follows that the appeal must
succeed,
but before finishing this judgment it is appropriate for me
to make some remarks about the form of the proceedings in this case.
Form
of proceedings
[48]
Ms Mahlangu claimed an interdict preventing
the commissioner from compelling her to give evidence and an order
setting aside the
summons. Her case was then argued on the
basis that it was a straightforward application in which, provided
she established
the abuse of which she complained, she was entitled
to relief. The position of the Master and the commissioner was
disregarded.
I am not satisfied that this approach was correct. While
courts have a power to intervene in such proceedings and prevent them
from being abused, that power cannot be divorced from the provisions
of the statute or the principles of our law that apply to challenging
decisions made in the exercise of statutory powers.
[49]
Ms
Mahlangu’s legal advisers may have been misled by the reliance
that has been placed on foreign cases, especially those
from England,
in our own jurisprudence relating to such enquiries. As Justice
Kriegler warned in
Bernstein
[38]
too facile a reading of foreign legal material is to be eschewed,
because, when removed from their own environment, they may mislead.
In England and in several of the other jurisdictions to which I have
referred an enquiry of this type can only be convened by order
of
court, as was formerly the position in this country. As a result, the
English cases, of which
Cloverbay
is
a prime example, are concerned with the question of when such an
enquiry should be convened. They are not dealing with the
circumstances
in which the court should overturn a decision to
convene an enquiry on the grounds that it is an abuse. In South
Africa the Master
is empowered by s 417(1) to conduct such an
enquiry or to appoint, in terms of s 418(1)
(b)
,
a commissioner to conduct an enquiry. Experience teaches us that this
is now the normal way in which such enquiries are convened.
[39]
The conduct of the enquiry is then delegated to the commissioner who
exercises the statutory powers set out in s 418 of which
one is
the power to summon witnesses to the enquiry and another of which is
to regulate the questioning of witnesses.
[40]
[50]
In
the light of these provisions, where the Master has exercised the
power to convene an enquiry and appoint a commissioner to conduct
it,
the position may be that such a decision can only be challenged by
way of judicial review.
[41]
In
any event, it is not simply a matter of the court substituting its
decision for that of the Master. As the cases demonstrate
some weight
is to be attached to the decision of the Master and it may not be
overturned simply because the court disagrees with
it. It can only be
set aside on limited grounds of which the one most likely to be
relevant here would be that it was unreasonable
in the sense of being
a decision that a reasonable decision-maker could not reach.
[42]
In this case the Master’s decision is not challenged. It must
be taken therefore that the convening of an enquiry into the
affairs
of 3P Consulting and the appointment of Mr Stewart to act as
commissioner was entirely justified. There was nothing in
the record
to gainsay that conclusion.
[51]
The
attack was instead directed at the decision by the commissioner to
summon Ms Mahlangu to attend and give evidence. But that
was not
directly addressed in the papers. Instead it was attacked obliquely
on the basis that the motives of the liquidators in
seeking to have
her summoned to the enquiry were improper. This is not a permissible
approach, because it is the commissioner who
decides that a witness
is to be summoned, not the liquidators, although they may ask the
commissioner to do so. The position of
the commissioner must be
distinguished from that of the liquidators and their motives. As
Harms JA pointed out in
Jeeva
:
[43]
‘
The
Commissioner, against whom no complaint has been laid, is the person
who conducts the inquiry. It is he who has to act in a
quasi-judicial
capacity. He has the main duty to examine the witnesses. He has to
regulate and control the interrogation. Should
he fail in his duty to
apply the procedural fairness appropriate to this forum, an aggrieved
party may approach the Court for suitable
relief …
…
[t]he
position of the liquidator is quite different. He, in this context,
acts in neither an administrative nor quasi-judicial capacity.
He is
not in a position of authority vis-à-vis the witness. He does
not determine or affect any of his rights. He simply
represents the
company in liquidation at the inquiry. He is, or may be, an adversary
of the witness. As adversary he can have no
higher duty towards his
opponent than any other litigant has.’
Where
there is no foundation for the commissioner to issue a summons
compelling a witness to attend an enquiry the commissioner’s
decision may be challenged.
[52]
An
enquiry under these sections of the Act has been said to be a
‘complex administrative proceeding’.
[44]
Whether that is a correct description is debatable.
[45]
If there is to be a challenge to the conduct of an enquiry that must
either be a review falling under PAJA
[46]
or a residual category of review derived from the common law. In
either event, the proper way in which to challenge the summoning
of a
witness is by way of review proceedings and the decision that falls
to be attacked is that of the commissioner not the liquidators.
[47]
Any attack on the commissioner’s decision to summon a witness
must give weight to the considered view of the commissioner
as to the
necessity for that particular individual to be summoned.
[48]
[53]
Furthermore when an allegation is made, as
was made here, that the examination by the liquidators would involve
an improper ‘fishing
expedition’ the primary issue is
whether the commissioner would permit that. Here there was no
suggestion that, had Ms Mahlangu
given evidence, the commissioner
would not have exercised his powers to prevent any abuse by the
liquidators. Of course, instances
may arise where liquidators
interrogating a witness at an enquiry may overstep the permissible
bounds of the enquiry and abuse
their statutory rights. But an
aggrieved person, who is entitled to be legally represented, is
entitled to complain and it is then
for the commissioner to prevent
any abuse. If the witness is dissatisfied with the commissioner’s
approach that may be the
subject of a review, but one cannot start
from the perspective that the commissioner will not discharge their
duties properly and
prevent abuse from occurring.
[54]
Although, therefore, I have proceeded in
this judgment to deal with the issues raised on the footing that they
fell exclusively
within the court’s domain and that no weight
should be given to the commissioner’s views, I do not think
that this
is a correct approach. As it is the one most favourable to
Ms Mahlangu it does not affect the result.
Conclusion
[55]
In the result the appeal is upheld with
costs and the order of the High Court is altered to read:
‘
The
application is dismissed with costs.’
Justice
M J D Wallis
Judge
of Appeal
Appearances
For
appellant: G D Wickins
Instructed
by: Brooks & Braadvedt Inc, Johannesburg,
E
G Cooper Majiedt Inc, Bloemfontein
For
first respondent: E M Masombuka (with him M H Mhambi)
Instructed
by: Ngcebetsha Madlanga Inc, Sandton.
Matsepes
Inc, Attorneys, Bloemfontein.
[1]
MEC
for Health, Gauteng v 3P Consulting (Pty) Ltd
[2010]
ZASCA 156; 2012 (2) SA 542 (SCA).
[2]
The Master is the Second Respondent in this appeal but has played no
part in the proceedings either here or in the High Court.
[3]
Although this Act was repealed by the
Companies Act 71 of 2008
the
provisions of Chapter 14 of the old Act, which includes ss 417
and 418, remain in force by virtue of Item 9(10 of Schedule
5 to the
new Act.
[4]
The Commissioner is the third respondent in this appeal but, like
the Master, has played no role in the proceedings in either
this
court or the High Court.
[5]
The history is traced in
Ferreira
v Levin NO and Others; Vryenhoek and Others v Powell NO and
Others
[1995]
ZACC 13
;
1996 (1) SA 984
(CC) (
Ferreira
)
paras 115 to 119. It is possible that the first enactment of such
provisions was even earlier than the Victorian era. See
Re
Excel Finance Corporation Ltd John Frederick Worthley v Richard
Anthony Fountayne England
[1994]
FCA 1251
;
(1994) 124 ALR 281
, para 27 (
Excel
Finance
).
[6]
Bernstein
and Others v Bester and Others NNO
[1996]
ZACC 2
;
1996 (2) SA 751
(CC) (
Bernstein
).
[7]
See
para 1 of the order in
Ferreira
para
157. The section has since been amended. See s 417(2)
(c)
of
the Act. It excludes the use in criminal, but not civil, proceedings
of incriminating answers and incriminating derivative
evidence
obtained in consequence of those answers.
[8]
Ferreira
paras
122 to 124. See also the summary in
Bernstein
para
16.
[9]
Moolman
v Builders & Developers (Pty) Ltd (in Provisional Liquidation):
Jooste Intervening
1990
(1) SA 954
(A) at 960G-I quoted with approval in
Ferreira
para
123.
[10]
Bernstein
para
16(e)(ii).
[11]
Bernstein
para
16(f).
[12]
Cloverbay
Ltd (Joint Administrators) v Bank of Credit and Commerce
International SA
[1991] Ch 90
(CA) at 102;
[1991] 1 All ER 894
at 900, para 58.
[13]
Bernstein
para
20.
[14]
Kebble
v Gainsford and Others NNO
2010
(1) SA 561
(GSJ) paras 57 and 58.
[15]
British
and Commonwealth Holdings plc (joint administrators) v Spicer &
Oppenheim (a firm)
[1992]
BCLC 314
at 320.
[16]
British
and Commonwealth Holdings plc (joint administrators) v Spicer &
Oppenheim (a firm)
[1992]
4 All ER 876
(HL)(
Spicer
& Oppenheim
).
[17]
At 876a-b.
[18]
Re
Gold Co
(1879)
12 ChD 77
at 82. Quoted with approval in
Bernstein
para
22.
[19]
Re
Rolls Razor Ltd
[1968] 3 All ER 698
(Ch) at 700 approved in
In
Re Esal (Commodities) Ltd
[1989] BCLC 59
(CA) at 64 and cited with approval in
Spicer
& Oppenheim
883c-884d
and
Ferreira
para
124.
[20]
The
Joint and Several Liquidators of the New China Hong Kong Group Ltd
and Others v Ernst & Young & Others
2003]
HKCFI 903
;
[2003] 3 HKLRD 799
;
[2003] 3 HKC 252
para 23. See also
The
Joint Liquidators of Chark Fung Securities Co Ltd and Others v Chan
Kwong Hung
[2001]
2 HKC 335
at 339B.
[21]
Carrow
Holdings Limited (in liquidation) v Sadiq HC
[2008]
NZHC 825
para 27
[22]
Re
Smith (A Bankrupt)
[1992]
NZFLR 241
(CA) at 244-245.
[23]
Re
Ex Ced Foods (formerly Cedenco Foods)(in liquidation) and Cedenco
Ohakune (in liquidation)
[2012]
NZHC 3037
,
para
66.
[24]
Re
Hugh J Roberts Pty Limited (In Liquidation)
(1970)
2 NSWR 582
at 585, in a passage quoted with approval by the
Court of Appeal in
Hong
Kong Bank of Australia Ltd v Murphy
(1992)
28 NSWLR 512
at 518 (
Hong
Kong Bank
)
and by Mason CJ in
Hamilton
v Oades
[1989] HCA 21
;
(1988-89) 166 CLR 486
at 497.
[25]
Liquidator
of W & P Piling Pte Ltd v Chew Yin What and Others
[2004]
3 SLR 164
;
[2004] SGHC 108
para 27. See also
Pricewaterhousecoopers
LLP and Others v Celestial Nutrifoods Ltd (in compulsory
liquidation)
[2015]
SGCA 20
paras 42 and 57.
[26]
Ferreira
para
125.
[27]
Bernstein
para
21.
[28]
Hong
Kong Bank of Australia Ltd v Murphy
(1992)
28 NSWLR 512
at 519.
[29]
Bernstein
para 33.
[30]
Excel
Finance
para 76.
[31]
Re
Sasea Finance Ltd
[1998]
1 BCLC 559.
[32]
Botha
v Strydom and Others
1992
(2) SA 155
(N) at 160C-E.
[33]
Excel
Finance
para
77.
[34]
Re
J T Rhodes Ltd
[1987]
BCLC 77
at 80. In
Botha
v Strydom
supra
at 159G-I they were described as ‘Draconian’. See also
Jeeva
and Others v Receiver of Revenue, Port Elizabeth and Others
1995
(2) SA 433
(SE) at 443A-D.
[35]
Bernstein
para
23.
[36]
Simmons
NO v Gilbert Hamer & Co Ltd
1963
(1) SA 897
(N) and
O’
Shea NO v Van Zyl and Others NNO
[2011]
ZASCA 156
;
2012 (1) SA 90
(SCA) paras 19 to 25.
[37]
In argument there were suggestions that evidence might be better
forthcoming from people such as the Director-General of the
Department, but no foundation was laid for this. There was a
complaint in the affidavit against a ‘senior representative
of
the other party to the litigation’ being required to give
evidence. Enquiries as to whether it was permissible for ‘junior
representatives’ to do so and whether Ms Mahlangu was standing
upon her dignity attracted a hasty withdrawal. For a public
representative to adopt the stance that they were too important, or
too busy, to attend at an enquiry, would be to deny the legacy
of
our first president, the late President Mandela, who gave evidence
and submitted to cross-examination in the SARFU case, even
though
the decision to require him to do so was unfounded.
President
of the Republic of South Africa and Others v South African Rugby
Football Union and Others
2000
(1) SA 1
(CC) paras 20-22 and 240-245.
[38]
Bernstein
para
133.
[39]
Meskin
Henochsberg
on the
Companies Act
>
(5
ed, 1994, looseleaf, current ed
K
unst,
Delport and Vorster) Vol 1, p 888 (Service Issue 32).
[40]
Section 418(1)
(c)
of
the Act.
[41]
Leech
and Others v Farber NO and Others
2000
(2) SA 444
(W) at 448F-H.
The
position appears to be the same in Australia where a Commissioner of
the Australian Securities Commission and not a court
that makes
orders for the convening of an enquiry. See
Excel
Finance
.
[42]
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Tourism and Others
[2004]
ZACC 15
;
2004 (4) SA 490
(CC) para 44.
[43]
Receiver
of Revenue, Port Elizabeth v Jeeva and Others; Klerck and Others NNO
v Jeeva and Others
[1996]
ZASCA 5
;
1996 (2) SA 573
(A) at 579H–580B.
[44]
Schulte
v Van der Berg and Others NNO
1991
(3) SA 717
(C) at 721A-B.
[45]
In
Bernstein
Ackermann
J said that there was difficulty in seeing how such an enquiry can
be characterized as administrative action, (paras
96-98) although
ultimately the question was left open (para 99). The judgments of
Kriegler J (para 131) and O’Regan J (para
155) specifically
refrained from endorsing those doubts. There can be little doubt
that the Master and the commissioner are exercising
public powers,
but the debate is whether they are engaged in making decisions of an
administrative nature. See also
Mitchell
and Another v Hodes and Others NNO
2003
(3) SA 176
(C) at 185E-189C.
[46]
The
Promotion of Administrative Justice Act 3 of 2000
.
[47]
Without directly referring to the problem the judgments in both
Gumede
and Others v Subel SC, Arnold and Others
[2006]
3 All SA 411
(SCA) and
Miller
and Others v Nafcoc Investment Holdigs Company Ltd and Others
[2010]
4 All SA 44
(SCA) proceed as if the court was concerned with a
review of the Master’s decision or the commissioner’s
decision.
[48]
See
Bato
Star
supra
paras 46 – 48.
Leech
v Farber NO
supra at 448I-449C.