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[2021] ZAWCHC 204
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Bester N.O and Others v Massyn (9530/2021) [2021] ZAWCHC 204 (15 October 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case Number: 9530 /
2021
In
the matter between:
LAMBERTUS
VON WIELLIGH BESTER N O
First Applicant
JOHNNY
BASSON N O
Second Applicant
(The
joint provisional
liquidators
of the third applicant)
OCTOX
(PTY) LTD
Third Applicant
(In
final liquidation)
and
MARA-LI
MASSYN
Respondent
Coram:
Wille, J
Heard:
14
th
of September 2021
Delivered:
15
th
of October 2021
JUDGMENT
WILLE,
J:
INTRODUCTION
[1]
This
is an opposed application for a judgment sounding in money. The
applicants are the joint provisional liquidators of the
third
applicant
[1]
. The
applicants initially sought payment from the respondent (on motion),
in the sum of R903 327,00. The applicants
now seek an amendment
to increase this claim against the respondent, to the sum of R1
195,382.00.
[2]
[2]
The
cause of action piloted by the applicants against the respondent for
the money judgment is primarily based on an action for
unjust
enrichment
sine
causa
.
This, because they contend no valid causa existed for certain
payments made by the third applicant
[3]
,
to the respondent. In the alternative, the liquidators seek
reliance on the provisions of certain sections of the Insolvency
Act
[4]
, which provide, inter
alia, for voidable dispositions.
PRE-LIMINARY
ISSUES
LOCUS
STANDI
[3]
The
respondent contends for the position that the applicants are not
possessed of the necessary
locus
standi
to
pursue any money judgment against the respondent. The complaint
by the respondent is that the liquidators are not vested
with the
necessary authority to pursue this application against her.
[4]
This
shield falls to be dealt with swiftly. The third applicant is
now in final liquidation and the first and second applicants
have
subsequently been appointed as the final liquidators. Besides,
the applicants (as the then provisional liquidators),
in any event,
obtained the requisite power to proceed with this application in
terms of sections 386(4) and 386(5) of the Companies
Act
[5]
.
THE
AMENDMENT
[5]
At the
commencement of the hearing the applicants sought leave to amend the
monetary amount of the relief against the respondent,
by way of an
increase in quantum. This from R903 327, 00 to R1 195 382, 00.
Coupled with this application for an amendment
was the request for
the introduction of a further affidavit, dealing with and in support
of the amendment.
[6]
This
amendment application is buttressed by a professional report compiled
by Mr Fourie.
[6]
He was
appointed by the ‘Financial Sector Conduct Authority’ to
investigate certain of the affairs of the third applicant.
The
report confirms,
inter
alia,
the
following: that the sum of R903 325, 00 was indeed paid to the
respondent from the third applicant during the period of
the 1
st
of January 2018 to the 6
th
of August 2020
[7]
and, that a
total amount of R1 195 382,00 was indeed paid by the third applicant
to the respondent,
sine
causa
.
PRESCRIPTION
[7]
The
respondent contends and puts up a shield to the effect that any
portion of the applicant’s claim, which related to payments
that were made to her, prior to the 4
th
of June 2018, have since prescribed due to the effluxion of time
[8]
.
[8]
The
application for the liquidation of the third applicant was presented
to court on the 30
th
of November 2020. It is further trite in terms of the Companies
Act
[9]
, once a court has made an
order for the winding-up of a company, all civil proceedings by the
company remain in abeyance and suspended
until the appointment of the
liquidators of the company, so liquidated.
[9]
Moreover,
in terms of the Prescription Act
[10]
,
a debt shall not be deemed to be due until the creditor has knowledge
of the identity of the debtor and of the facts from which
the debt
arises. It is trite law that prescription in respect of
statutory claims in liquidation can only start running from
the date
of the appointment of the liquidators and once the liquidators are
appraised of all the facts of the claim, or could reasonably
have
been expected to have known such facts.
[10]
The
liquidators were provisionally appointed on the 16
th
of October 2020 and finally on the 3
rd
of June 2021. This application was launched and served on the
4
th
June 2021. The prescription defences are accordingly
euthanized.
THE
RELEVANT BACKROUND AND FACTUAL MATRIX
THE
LIQUIDATION OF THE THIRD APPLICANT
[11]
Imagina
FX (Pty) Ltd
[11]
, conducted,
inter
alia
,
the business of ‘fund managers’ trading in foreign
currency. This ‘business’ was in contravention
of
certain financial services legislation.
Imagina
was provisionally liquidated on the 7
th
of October 2020 and finally liquidated on the 9
th
of November 2020.
[12]
In
turn, the third applicant was provisionally liquidated on the 9
th
of December 2020 and finally liquidated on the 22
nd
of January 2021. This, by the liquidators of
Imagina.
It is common cause that the third applicant was a conduit utilised by
Imagina
and
was as an integral part of the irregular investment scheme by
Imagina
.
In this connection, many ‘investors’ paid billions
[12]
into the bank account of the third applicant, which funds are now
mostly unaccounted for. It is alleged that the mastermind
of
the scheme conducted through the vehicle of
Imagina
and the third applicant, was Mr Massyn.
[13]
COMMON
CAUSE FACTS
[13]
It is
common cause: that this ‘forex scheme’ conducted
through the third applicant was unlawful: that Mr
Massyn was
the only person in ‘control’ of both of the bank accounts
utilised for this forex scheme: that Mr
Massyn controlled and
dictated how the funds from the investors would be utilized: that
Mr Massyn misappropriated certain
of these funds: that the
respondent was never employed by either
Imagina
or
the third applicant: that the third applicant caused to be paid
to the respondent the sum of R903 327,00
[14]
:
that the respondent appeared at an insolvency enquiry on the 7
th
of May 2021 and that the full record of her evidence appears from
certain annexures to the papers that presented before me.
THE
INSOLVENCY ENQUIRY
[14]
The
respondent conceded that she bore no knowledge of the existence of
the third applicant. She had no knowledge of the link
between
the third applicant and
Imagina
(if any). She conceded that she indeed received certain
payments. She says these payments, were from
Imagina.
She avers that she also made certain payments to
Imagina
.
[15]
However,
the respondent admitted also having received certain payments from
the third applicant during the relevant period.
Her reason
being that these payments were to cover her expenses as she was
unemployed at the time. Moreover, she conceded
that she
received an amount of R557 489,00 (during 2019), from a discrete
company called Praesidium
[15]
.
This ostensibly for decorating services rendered by
Benz
Massyn Interiors
[16]
,
for and on behalf of Praesidium.
[16]
In
addition, the respondent
also
testified that she personally paid the sum of R100 000,00 to the
third applicant. The
causa
for this payment was to repay a loan that was advanced so as to
decorate the offices of Praesidium.
THE
APPLICANTS’ CASE
[17]
The
applicants contend for the position that the sum of R903 327,00 that
was paid from the bank account of the third applicant to
the
respondent is not the subject of a dispute. On this, I agree.
The respondent personally received these funds from
the third
applicant’s bank account.
[18]
The
liquidators say there is no justifiable reason for these payments
for,
inter
alia
,
the following reasons: that the respondent was neither employed
by the third applicant, nor by
Imagina
:
that neither of these entities were indebted to the respondent: that
the third applicant had no lawful authority to
make any of these
payments to the respondent: that the third applicant never
owed any money to the respondent and that
the third applicant did not
have any obligation to make any payment to or for and on behalf of
the respondent. On this, I
again agree.
THE
RESPONDENT’S CASE
[19]
The
respondent’s case now advanced is that there were indeed
certain payments made to her account, by the third applicant,
this
because of the following, namely: that at least R250 000,00 was
due to her by Praesidium for interior decorating services
rendered by
BMI to Praesidium: that the third applicant had assumed
liability for this payment and that this was,
inter
alia,
because
her husband was entitled to receive remuneration from the third
applicant and
Imagina.
DISCUSSION
[20]
The
respondent’s contention that she was entitled to these payments
from the third applicant is highly improbable and patently
untenable. It is also irreconcilable with the common cause
facts. I say this because,
inter
alia
,
the BMI agreement was with Praesidium. Nothing more and nothing
less. This agreement was also purportedly signed by
the
respondent on behalf of Praesidium. This agreement contained
the standard ‘vanilla’ non-variation clause.
The
third applicant was never a party to, or part of, this agreement and
no goods or services were ever rendered to the third applicant
under
and in terms of this purported agreement.
[21]
Most
significantly, the BMI agreement was concluded on the 10
th
May 2019. The payments to the respondent commenced flowing from
the third applicant already in the November of 2018.
There is
not an iota of evidence in support of the bald allegation that the
third applicant, conveniently and by the process of
‘osmosis’
assumed the liability to make payment of the alleged services
rendered and goods supplied, by BMI to Praesidium.
[22]
Payment
is a bilateral act requiring the co-operation of the payer and the
payee
[17]
. This requires
an agreement as between the parties as to the debt. This
notwithstanding, the funds paid into the bank
account of the third
applicant were designated as ‘investor funds’ and could
never be utilized to discharge third party
debts. This much is
absent any doubt.
[23]
In
addition, this ‘shield’ was never raised by the
respondent during the course of the insolvency proceedings.
Besides, she acknowledged the existence of the separate agreement
between BMI and Praesidium. Praesidium paid her in full
for the
services rendered to them. No plausible explanation is provided
as to why these payments were made into her personal
bank account and
not into the account of BMI.
[24]
It is
common cause that the respondent personally received the amounts in
question and that these payments were made from the bank
account of
the third applicant. As a matter of logic, if no valid
causa
existed for the receipt of these funds, the respondent was enriched
at the expense of the third applicant and by implication, the
creditors of the third applicant. Accordingly, I find on these
facts that the respondent is indebted to the third applicant
in the
sum of R903 327,00. This must be so because there was and is no
lawful, justifiable or valid
causa
for these admitted payments by the third applicant to the respondent.
[25]
What
remains is for me to deal with the issue of the alleged repayments to
the sum of R200 000,00. The respondent avers that
she
personally, alternatively BMI, made two payments to the third
applicant. These were ‘categorized’ as loan
repayments of R100 000,00 each into the bank account of the third
applicant on the 30
th
of May 2019. The respondent avers that these payments fall to
be deducted from the sum of R903 327,00.
[26]
The
applicants’ acknowledge a single credit of R100 000,00 made by
respondent on 30
th
May of 2019 into the bank account of the third applicant. The
applicants say that any such payments that were allegedly made,
do
not fall to be deducted from the sums claimed by them, but rather
form the subject of a concurrent claim against the liquidated
estate
of the third applicant. In short they say, set-off does not
apply and no preference should be afforded to these payments
to the
detriment of the general body of creditors.
[27]
The
difference in value between the initial claim and the now advanced
amended claim is the sum of R292 055,00. The facts
pleaded
supporting the amendment support the increased amount contended for,
albeit for an earlier period in time, being from the
22
nd
of March 2016 to the 30
th
of December 2017.
[28]
I am
inclined to grant the amendment. The respondent in any event
does not oppose the grant of the amendment. Further,
the
respondent’s counsel indicated at the hearing of the matter
that no additional point of prescription will be raised by
the
respondent in connection with the new increased amended claim and the
time periods relating thereto.
[29]
The
only remaining arguments advanced by the respondent are the
following, namely: that the monies that were paid into the
bank
account
[18]
by the investors,
cannot be categorized as the ‘property’ of the third
applicant and that in any event, the third applicant
had no ‘control’
over these monies. This because, this ‘control’
vested solely in the hands of Mr
Massyn who was not a director of the
third respondent during the relevant period. This is a highly
technical legal argument.
In my view, this argument cannot be
chartered in isolation and without due reference to the facts and
documents in this matter,
which are, as I have stated, mostly common
cause.
[30]
The
investment mandate agreement records an agreement between
Imagina
[19]
,
which seemingly has an address in both Pretoria and in Mauritius.
This mandate agreement however has a number of anomalies
which cannot
be ignored. The mandate records that the potential client has
cash available for investment and seeks to mandate
Imagina
to
manage a ‘Forex Trading account’ that has been
established for that purpose at the Mauritius Commercial Bank
Limited.
[31]
The
actual
Imagina
account is however
held with the FNB in South Africa. In addition, it is recorded
that
Imagina
shall provide the
‘services’ of the opening of a ‘Trade-Sub
Account’. The bank statements for the
account held at FNB
exhibit the designated account holder to be the third applicant and
the individual assigned thereto is designated
as Mr Massyn.
This, together with an address in South Africa, in
‘Silverlakes’ situated in Pretoria.
[32]
The
‘Appointment of Sole Administrator’ form completed with
FNB for the third applicant for this account is Mr Massyn
in his
capacity as a director of the third applicant, This form was
signed on the 14
th
of March 2019. It is common cause: that the third
applicant was incorporated on the 30
th
of
June 2008: that Mr Massyn was the sole director of the third
applicant until he resigned on the 16
th
of April 2009: that Mr Massyn was a director on the 14
th
of March 2019 and that it was because he held this position of a
director at that time, that he was given these powers of control
by
FNB over the subject investment account in the name of the third
applicant.
[33]
Most
significantly, in my view, at the time when the investor mandates
were signed, the account into which the investors were, by
mutual
agreement, mandated to pay their investor funds into, was indeed the
FNB account and not the bank account held at the Mauritius
Commercial
Bank Limited.
[34]
The
respondent contends for the position that the ownership of the
‘investors’ money did not pass to the third applicant.
Accordingly, it is argued that the third applicant did not have a
valid claim to the money standing to the credit in the bank account
of FNB. The argument being that the third applicant accordingly
could not be said to have been impoverished when certain
payments
were made to the respondent.
[35]
I
disagree. I say this for the following reasons, namely: that
the monies were paid directly by the investors into the
bank account
held at FNB in terms of the investment mandate agreement: that the
actual name of the account on the investment mandate
matters not:
that when the sole administrator form was signed Mr Massyn was a
director of the third applicant and the third
applicant and Mr Massyn
were in ‘control’ of the bank account held at FNB into
which the investor funds were paid.
[36]
As a
matter of logic, it must be so that the payments made by the
investors into the FNB bank account were made with the intention
that
the money so paid and received into that account, would be controlled
by the third applicant. This despite that the
investment scheme
was a ‘sham’. Put in another way, the bank account
held at FNB was undoubtedly the account
used for the deposits made by
the investors irrespective of the name of the account that appeared
on the mandate agreement.
[37]
The
investors in this matter, under and in terms of the investment
mandate, paid certain funds into a bank account, which funds
in turn,
were under the effective control of the third applicant. In my
view, the funds therefore became the property of
the third applicant
within the wide and broad definition of ‘property’ in
terms of the Insolvency Act
[20]
.
[38]
This
must be so, because the unlawfulness of the investment scheme piloted
by Mr Massyn did not nullify the effect of the transactions
undertaken in the course of the operation of the ‘sham’
investment scheme.
[21]
[39]
By
contrast, in my view, the
Maxprop
[22]
case, does not support the arguments advanced by the respondent on
this score. This because in
Maxprop
,
it was not alleged that the ‘fraudster’ had control over
the account into which the funds were paid by the ‘clients’
who had been duped. Undoubtedly, in this case, the third
applicant controlled the bank account held at FNB. The full
and
actual rights of disposal of these monies, in turn, vested in and
with Mr Massyn.
[40]
The
property and control argument is by its very nature inextricably
linked with the unjust enrichment argument. The monies
received
by the respondent from the account of the third applicant, did not
occur because of a gift, the payment of discharging
a debt, or in
terms of a promise, or any other obligation or any other lawful
ground justifying the enrichment. Put in another
way, there was
no valid entitlement to these funds by the respondent. The
respondent did not render any ‘performance’
that was
validly causally connected to the receipt of the funds by her.
The third applicant’s bank account was accordingly
impoverished
by these payments to the respondent which were made
sine
causa.
Unjust
enrichment now having been clearly established, brings me to the
final issue to be adjudicated upon, namely the repayment
‘set-off’
arguments advanced on behalf of the respondent.
[41]
The
bank statements of the third applicant reflect two ‘re-payments’
both made on the 30
th
of May 2019 into the account of the third applicant. The first
payment is labelled with the description ‘BMI Interiors’
and the second payment is labelled with the description ‘Mara-Li
Loan Account’.
[42]
The
respondent’s case on this score, is the following: that
BMI had an agreement with Praesidium: that BMI had
rendered
interior design services to Praesidium: that the third
applicant paid these BMI invoices on behalf of Praesidium:
that
these payments were made into the bank account of the respondent and
that the respondent, who was an employee of BMI,
accepted these
payments on behalf of Praesidium.
[43]
The
respondent admits and concedes that she bore no independent knowledge
of the existence or otherwise, of the third applicant.
Despite
this, she ‘repays’ the third applicant. Not
surprisingly, she now admits having received certain payments
from
the third applicant during the relevant period. These payments
were made into her bank account to cover her ‘expenses’
while she was unemployed and received no income.
[44]
The
BMI agreement contended for by the respondent exhibits some
interesting features, which are
inter
alia,
the
following: that the agreement was only concluded on the 10
th
May 2019
[23]
: that this
agreement was signed by the respondent on behalf of both BMI and
Praesidium and that the agreement contained the
usual ‘vanilla’
non-variation clause.
[45]
Of
equal importance is the fact that the third applicant was never a
party to this agreement. Praesidium and the third applicant
were two completely discrete companies with no business relationship
and there was in existence no legal or factual nexus for the
third
applicant to assume and pay any of the debts of Praesidium.
[46]
Other
than the ‘labels’ that appear on the two re-payments
allegedly made by the respondent, the record is absent any
‘evidential material’ that these payments were made by
the respondent from any of her own funds. The one label
describes the re-payment of a loan. This, in the circumstances
where the actual terms and conditions of this loan are not
pleaded
and are absent the papers.
[47]
Accordingly,
in the event that the respondent enjoys a claim for the sum of R200
000,00 as contended for, this claim, in my view,
in these
circumstances, falls to be pursued via the claim process as a
concurrent claim against the liquidated estate of the third
applicant. All the documentation in ‘support’ of these
claims will of necessity be required to be attached to the claim
forms filed with the first and second applicant in their capacities
as the liquidators of the third applicant,
ORDER
AND COSTS
[48]
In the
result, the following order is granted, namely:
1.
That
the amendment sought at the instance of the applicants is hereby
granted.
2.
That
the respondent is accordingly hereby ordered to repay to the
applicants, the sum of R1 195 382,00 within (10) days of the grant
of
this order.
3.
That
the respondent shall pay to the applicants mora interest at the legal
rate, as determined from time to time, on the said sum
of R1 195
382, 00.
4.
That
the respondent shall be liable for the costs of and incidental to
this application (including the costs of (2) counsel), on
the scale
as between party and party, as taxed or agreed.
E.D. WILLE
Judge
of the High Court
Western
Cape Division
[1]
The
third applicant
was
placed into final liquidation on the 22
nd
of January 2021.
[2]
More
about this amendment later.
[3]
By
the company in liquidation.
[4]
This
in terms of sections 26, 29,30 and 31,
read
with section 32(1) (b)
of
Act,
24 of 36.
[5]
The
Companies
Act,
71of 2008
, read with the transitional arrangements and the previous
Companies Act, 61of 1973.
[6]
From
Accountants @ Law.
[7]
The
relevant period.
[8]
This
being the period (3) years prior to the launching of the
application.
[9]
Section
359 of the
the
Companies Act, 61 of 1973.
[10]
Section
12 (3)
the
Prescription Act, 68 of 1969
.
[11]
Imagina.
[12]
South
African Rands (ZAR).
[13]
The
respondent’s husband.
[14]
This
during the period 1
st
January 2018 to 21
st
October 2020.
[15]
Praesidium
Wealth (Pty) Ltd.
[16]
BMI
means Christine Benz t/a Benz Massyn Interiors.
[17]
Volksas
Bank Bpk v Bankers Bpk (H/A Trust Bank)
[1991] ZASCA 57
;
1991
(3) SA 605
(A) at 612 C to D.
[18]
Held
at First National Bank Ltd (‘FNB’).
[19]
Trading
International Ltd (Registration Number: C11102 888)
[20]
Section
2 of the Insolvency
Act
indicates that property ‘…
includes
contingent interests in property ….’
[21]
MP
Finance Group v Commissioner for the South African Revenue Services
2007
(5) SA 521
(SCA) at para [12].
[22]
Khan
NO v Maxprop Holdings (Pty) Ltd
(5419/2012)
2017 ZAKZDHC 32 (18 August 2017) at para [21].
[23]
This after
funds were paid out by the third applicant to the respondent as
early as November 2018.