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[2021] ZAKZDHC 29
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Consolidated Aone Trade and Invest 6 (Pty) Ltd (In Liquidation) v Gearwise Properties CC and Others (D3200/2020) [2021] ZAKZDHC 29 (30 July 2021)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, DURBAN
CASE
NO: D3200/2020
In
the matter between:
Consolidated
Aone Trade and Invest 6 (Pty) Ltd
(In
Liquidation) Intervening
applicant
and
Gearwise
Properties
CC First
respondent
The Master of the High
Court, Durban Second
respondent
Imperial Crown 176
Trading (Pty) Ltd (In liquidation) Third
respondent
Fathima Cassim
NO Fourth
respondent
Mandla Professor Madlala
NO Fifth
respondent
Neil
David Button
NO Sixth
respondent
JUDGMENT
Lopes
J
[1] This
is an application by Consolidated Aone Trade & Investment (Pty)
Ltd (in liquidation) (‘Aone’)
for leave to intervene in
what I shall refer to as ‘the main application’. The
application is opposed by Gearwise Properties
CC (‘Gearwise’).
This is the latest skirmish in the protracted litigation between the
various parties.
[2] The
history of the litigation may be summarised as follows:
(a)
Aone was the registered owner of certain immovable property (‘the
property’) at one Link Road,
Ballito, KwaZulu-Natal.
(b)
The property was sold by Aone to Imperial Crown Trading 176 (Pty) Ltd
(in liquidation), the third respondent
in the main application
(‘ICT’).
(c)
ICT employed Gearwise to construct the Ballito Bay Shopping Mall
(‘the Mall’) on the property.
Gearwise subcontracted TBP
Buildings (‘TBP’) to carry out the construction.
(d)
Gearwise and TBP parted ways, and Gearwise completed the construction
of the Mall.
(e)
ICT failed to pay Gearwise, and was liquidated on the 17
th
January 2014. The sale of the property by Aone to ICT collapsed, and
Aone was liquidated on the 20
th
March 2014.
(f)
At the first meeting of creditors in the liquidated estate of ICT on
the 9
th
April 2014 (the meeting having been adjourned from the 2
nd
April 2014), seven creditors proved claims. Guardrisk Insurance
(‘Guardrisk’) sought to prove a claim based upon a
cession by Gearwise of its claims against ICT. The claim was
accepted, but later expunged by the Master on the 29
th
October 2015 in terms of s 45(3) of the Insolvency Act, 1936 (‘the
Act’). Aone proved two claims, which were similarly
expunged by
the Master on the 12
th
May 2016.
(h)
At the second meeting of creditors on the 14
th
June 2017, Gearwise applied in its name to prove the claim which had
previously been submitted by Guardrisk. The claim was rejected.
(i)
Gearwise then sought to review the decision to reject its claim. This
court (per Kruger J) directed
the Master to hold a further special
meeting of creditors, solely to consider the claim of Gearwise. That
meeting was held on the
17
th
October 2019, and ended in some confusion. Gearwise alleged that the
Master (who presided at the special meeting) had accepted
its claim,
but Aone alleged that she had not done so. The point of issue was
that it was alleged at the meeting that the liquidators
had
compromised the claim of Gearwise. The Master was clearly unhappy at
making a decision when the liquidators had purported to
have done so.
However, one of the liquidators, Mr Button (the sixth respondent),
protested at the meeting that the claim had not
been compromised by
them.
(j)
On the 29
th
May 2020, Gearwise brought the main application to review the
decision of the Master, and to vary her decision to read that she
had
accepted the claim of Gearwise in the sum of R213 120 795.10, and
that she accepted that the claim had been compromised by
the
liquidators.
(k)
Aone now seeks leave to intervene in the review application, on the
basis that it is a creditor of ICT, and
has a direct and substantial
interest in the outcome of the main application.
[3] The
problem which faced Mr
Lotz
SC, who appeared for Aone, was that both the claims of Aone, which
had initially been accepted, had subsequently been expunged
by the
Master. Aone then brought an application on the 23
rd
November 2016 to review the Master’s decision to expunge its
claims. That review has not yet been heard.
[4] Mr
Manikum
,
who appeared for Gearwise, submitted that;
(a)
Because the claims of Aone were expunged, Aone was no longer a
creditor of ICT, and accordingly, had no ‘real
and substantial’
interest in the main application.
(b)
The review application brought by Aone could not assist it because it
was brought two days after the 180-day
period referred to in s 7(1)
of the Promotion of Administrative Justice Act, 2000 (‘PAJA’)
had expired.
(c)
Aone had not, as yet, brought an application to condone the late
filing of its review application, and it
was too late to do so now.
In the event of the review failing, which is inevitable because it
was out of time, Aone had no basis
for seeking leave to intervene.
(d)
Even if Aone was granted condonation, its claims would have expired
by the effluxion of time. Prescription
is not halted by the review
application.
(e)
Notwithstanding that the condonation may be granted, I must decide
the application on the basis that, as Aone
has not yet applied for
condonation, it cannot succeed in the review.
[5] The
procedure for judicial review is set out in s 7 of PAJA, and
provides, inter alia:
‘
(1)
Any proceedings for judicial review in terms of section 6(1) must be
instituted without unreasonable delay and not
later than 180 days
after the date –
(a)
subject
to subsection 2(
c
),
on which any proceedings instituted in terms of internal remedies as
contemplated in subsection 2(
a
)
have been concluded; or
(b)
where
no such remedies exist, on which the person concerned was informed of
the administrative action, became aware of the action
and the reasons
for it or might reasonably have been expected to have become aware of
the action and the reasons.’
[6] In
Aone’s founding affidavit in this application, the deponent
states that Aone received notification
of the expungement on the 25
th
May 2016. The notification (annexure ‘EN1’ to the
affidavit) gives no reasons for the expungement, save to refer to
s
45(3) of the Act and regulation 18 of the Companies Act, 1973. The
deponent to the answering affidavit of Gearwise alleges that
the
180-day period expired on the 21
st
November 2016. That appeared to be common cause. The issue of Aone’s
review application was therefore two days’ out
of time. It was
not suggested that any internal remedies were applicable to the
review proceedings, and I shall assume that there
were none.
[7] Mr
Lotz
submitted that Aone could apply for condonation of the two-day late
filing of the review at any time before the hearing of the
review. In
the alternative, he submitted that notwithstanding the expungement of
Aone’s claim, it still retained the right
to prove its claims
by way of action, should the review fail because of a failure to
comply with the 180-day time limit.
[8] The
first issue to be decided then, is whether Aone is able to apply for
condonation of its late filing of
its review application. Mr
Manikum
submits that the cases, properly read, imply that the application for
condonation must accompany the review application, or at
least, be
brought as soon as an applicant becomes aware that it will be
required.
[9] The
starting point in determining the first issue is PAJA itself. Section
9 provides:
‘
Variation
of time
. –
(1)
The period of –
(a)
90
days referred to in section 5 may be reduced; or
(b)
90
days or 180 days referred to in sections 5 and 7 may be extended for
a fixed period,
by agreement between the
parties or, failing such agreement, by a court or tribunal on
application by the person or administrator
concerned.
(2) The
court or tribunal may grant an application in terms of subsection (1)
where the interests of justice so
require.’
[10] Mr
Manikum
relied upon the statement by Ploos van Amstel AJA in
Mostert
NO v Registrar of Pension Funds and Others
2018 (2) SA 53
(SCA) paras 34 -36:
‘
[34]
The approach under PAJA to a delay is not the same as under the
common law. Under the common law a court may refuse to
hear a review
if there has been an unreasonable delay in instituting the
proceedings. What would constitute an unreasonable delay
would depend
on the circumstances. See in this regard
South
African National Roads Agency Ltd v Cape Town City
2017
(1) SA 468
(SCA)
para 79. Section 7(1) of PAJA provides that proceedings for judicial
review must be instituted without unreasonable
delay and not later
than 180 days after the dates specified in subsections (a) and (b).
In
Opposition
to Urban Tolling Alliance
Brand
JA said (para 26):
“
At
common law application of the undue delay rule required a two stage
enquiry. First, whether there was an unreasonable delay and,
second,
if so, whether the delay should in all the circumstances be condoned…
Up to a point, I think, s 7(1) of PAJA requires
the same two stage
approach. The difference lies, as I see it, in the legislature’s
determination of a delay exceeding 180
days as
per
se
unreasonable. Before the
effluxion of 180 days, the first enquiry in applying s 7(1) is still
whether the delay (if any) was
unreasonable. But after the 180 day
period the issue of unreasonableness is pre-determined by the
legislature; it is unreasonable
per
se
. It follows that the court is only
empowered to entertain the review application if the interest of
justice dictates an extension
in terms of s 9. Absent such extension
the court has no authority to entertain the review application at
all.”
[35]
It follows in my view that where it appears to the court on the
papers that there has been a manifest delay and that
the proceedings
may not have been instituted within the period of 180 days, it will
be entitled to raise the point itself as such
a delay will be
unreasonable per se and the court will not have the power to
entertain the review. As was said in
Camps
Bay Ratepayers and Residents’ Association,
the
applicant should then be given an opportunity to deliver a further
affidavit to explain the apparent delay, or apply for an
extension in
terms of s 9. It will, of course, be entitled not to do so and to
argue the matter on the papers as they stand.
[36]
This brings me to the question whether the court a quo erred in
allowing the Minister to raise the point when he had
not done so in
his papers. Where it appears from the applicant’s papers that
there had been a delay of more than 180 days,
and there is no
application for an extension of the period, a respondent is in my
view entitled to raise the point in argument
that the court has no
power to hear the review. This is not raising a defence – it is
a submission that, on the applicant’s
own papers, the court has
no power to entertain the review. If the court is entitled to raise
the point
mero
motu
then
there can be no reason why the respondent should not be allowed to
raise it. It was in any event dealt with by both parties
in their
heads of argument, and the appellant elected not to seek leave to
file a further affidavit.
[37]
I do not agree with the submission that the time bar in s 7(1) is the
same as a special defence of prescription.
Section
17(1)
of
the
Prescription Act 68 of 1969
provides that a court shall
not of its own motion take notice of prescription. Subsection (2)
provides that a party to litigation
who invokes prescription shall do
so in the relevant document filed of record. There is no similar
provision in PAJA. Where the
proceedings were not instituted within
the periods specified in
s
7(1)
a
court has no power to hear the review.’
[11] For
the sake of completeness, I have set out paragraph 37 in addition to
the paragraphs referred to. I do
not understand the court to be
saying that it is peremptory that;
(a)
the application for condonation must be launched at the time that the
review papers are issued; nor that
(b)
the condonation must be launched as soon as the
applicant for review becomes aware that condonation will be required;
and
that a failure to do so would be fatal to the application.
The
court stated that the lack of jurisdiction could be raised in
argument. It is the election of the applicant whether or not to
apply
for condonation, and, in general, a party should be given an
opportunity to do so.
[12] The
parties agree that the decision of the Master expunging the claims of
Aone or Gearwise are subject to
PAJA. Mr
Lotz
submits that Aone is entitled to bring an application for condonation
to demonstrate that the
per
se
determination that the delay is unreasonable, should not be applied.
Although Aone has not, as yet, brought a substantive application
for
condonation, on the authorities it should be allowed to deliver an
affidavit dealing with this aspect in the review. (See:
Mamabolo
v
Rustenburg Regional Local Council
[2000] ZASCA 133
;
2001
(1) SA 135
(SCA)).
I
do not believe that I am able, in this application, to decide whether
such an application would be successful or not. That is
up to Aone
and the court hearing the review.
[13] Mr
Manikum
relied on the authority of Asla Construction (Pty) L
td
v Buffalo City Metropolitan Municipality
2017 (6) SA 360
(SCA) para
8, which states:
‘
[
8] The
respondent therefore required an extension of the period fixed by
PAJA within which to bring the application for
review.
Section 9
contemplates a substantive application to the relevant court or
tribunal, by the person or administrator concerned. That application
ought to have been made by the respondent when it first approached
the court for relief. It did not do so. Once the appellant had
raised
the issue of compliance with PAJA, the respondent was obliged to
launch an application in terms of this section for an extension
of
the fixed period. This application could thereafter have been
consolidated with the review application. The correct procedure
would
have ensured that the relevant facts were placed before the court a
quo, to enable it to exercise its discretion properly.’
Mr
Manikum
drew
attention to the fact that Aone had been informed of its need to seek
condonation in the Gearwise review application, as early
as 2017. He
emphasised that the review application had been issued some four
years’ ago, and had not been prosecuted by Aone.
[14] I
do not understand the Supreme Court of Appeal to state in
Asla
that a failure to apply for condonation at the time of issuing a
review application would be fatal to the application. Clearly
it
would be prudent and sensible to do so at that time. The fact that
Gearwise drew Aone’s attention to the need for condonation
is
not alleged to have been done in the application itself, but in the
application brought by Gearwise to compel the Master to
consider its
own claim. I drew to the attention of the parties that I had
endeavoured to draw Aone’s review application from
the
Registrar’s office, but the staff could not locate the file.
Possibly, that was because it is in off-site storage.
[15] I
was also informed by Mr
Manikum
that Gearwise had sought to obtain leave to intervene in the Aone
review application, but that had initially been opposed by Aone.
At
some stage, Aone withdrew its opposition to the application of
Gearwise for leave to intervene. However, the parties could not
agree
on the matter of costs, and, as I understand the position, the
joinder application has not been finalised. There is no explanation
from Gearwise as to why it has not sought to finalise its application
for leave to intervene. Either party was in a position to
have caused
the application to be finalised. Whatever their reasons are, it is
not for me to speculate.
[16] As
to the point raised that Aone’s claims against ICT will have
prescribed by the time the review application
is heard, and
accordingly that its application to intervene has no merit, I refer
to
s 13(1)
(g)
,
and
s 15
of the
Prescription Act, 1969
.
Section 15
provides:
‘
15.
Judicial interruption of prescription.
–
(1) The
running of prescription shall, subject to the provisions of
subsection (2), be interrupted by the service on the debtor
of any
process whereby the creditor claims payment of the debt.
(2)
Unless the debtor acknowledges liability, the interruption of
prescription under subsection (1) shall lapse,
and the running of
prescription shall not be deemed to have been interrupted, if the
creditor does not successfully prosecute his
claim under the process
in question to final judgment or if he does so prosecute his claim
but abandons the judgment or the judgment
is set aside.
. .
.
(4)
If the running of prescription is interrupted as contemplated in
subsection (1) and the creditor successfully
prosecutes his claim
under the process in question to final judgment and the interruption
does not lapse in terms of subsection
(2), prescription shall
commence to run afresh from the day on which the judgment of the
court becomes executable.
. .
.
(6)
For the purposes of this section, “process” includes a
petition, a notice of motion, a rule
nisi,
a pleading in
reconvention, a third party notice referred to in any rule of court,
and any document whereby legal proceedings are
commenced.’
[17] The
point raised accordingly has no merit. The claim accepted by the
Master against the insolvent estate of
ICT, the subsequent
expungement by the Master and Aone’s as yet unheard review
application of the Master’s decision
must be viewed together in
this regard. The review application brought by Aone, alone
demonstrates that it does not accept that
it has no claim against
ICT. The fact that there is presently no bar to it amending its
review application demonstrates,
prima
facie
, at least, that it has a real and
substantial interest in the main application.
[18] In
Snyders and others v De Jager
(joinder)
2017 (5) BCLR 604
(CC);
[2016] ZACC 54
, ‘a direct and
substantial interest’ was explained as follows:
‘
[9]
A person has a direct and substantial interest in an order that is
sought in proceedings if the order would
directly affect such a
person’s rights or interest. In that case the person should be
joined in the proceedings. If the person
is not joined in
circumstances in which his or her rights or interests will be
prejudicially affected by the ultimate judgment
that may result from
the proceedings, then that will mean that a judgment affecting that
person’s rights or interests has
been given without affording
that person an opportunity to be heard. That goes against one of the
most fundamental principles of
our legal system. That is that, as a
general rule, no court may make an order against anyone without
giving that person the opportunity
to be heard.’
[19] It
is accordingly unnecessary for me to decide whether, on the basis
that the review application must be decided
against Aone now, Aone is
a creditor (albeit an unproven one) of ICT.
The
failure of Aone to apply for condonation is not, in my view, a reason
to dismiss its application for leave to intervene. It
has satisfied
the test for intervention.
[20] With
regard to the question of costs in this application, Mr
Manikum
submitted that they should be reserved for the decision of the court
hearing the main application. As that court should not be
burdened
with dealing with the merits of this application which deals only
with leave to intervene, the successful party should
be entitled to
its costs. It was appropriate, in my view, for senior counsel to be
engaged by Aone.
[21] A
final matter with which I need to deal is an application contained in
the replying papers by Gearwise, seeking
an order to strike out a
number of paragraphs in the answering affidavit of Aone. The
application was not raised by either counsel
in argument, and I
accordingly assume that Gearwise did not intend me to deal with it.
My
prima
facie
view is that the application to strike out had no merit. I shall
therefore make no order in relation to it, and it is not to form
any
part of the costs order I make.[22] I accordingly
grant the following order:
(a)
The
intervening applicant, Consolidated Aone Trade and Invest 6 (Pty) Ltd
(in liquidation), is granted leave to intervene in the
application
issued by Gearwise Properties CC under Case No: D3200/2020 on the
29
th
May 2020 (‘the main application’).
(b)
The
intervening applicant’s affidavit deposed to on the 17
th
July 2020 is to serve as its founding affidavit in the application
for leave to intervene and as its answering affidavit in the
main
application, and the headings of all future documents delivered in
the main application shall refer to the intervening applicant
as
such.
(c)
Gearwise
is directed to pay the costs of Aone’s application for leave to
intervene, such costs to include those costs consequent
upon the
employment of senior counsel.
Lopes
J
Date
of hearing: 23
rd
July 2021.
Date
of judgment: 30
th
July
2021.
For
the applicant: GME Lotz SC
(instructed by Edward Nathan Sonnenbergs Inc).
For
the respondent:
M
Manikum (instructed by Nirvan Kawulesar & Company).