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[2023] ZAKZPHC 137
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Bright Idea Projects 66 (Pty) Ltd t/a All Fuels v Former Way Trade and Invest (Pty) Ltd t/a Premier Service and Others (283/2018P) [2023] ZAKZPHC 137; 2023 (6) SA 214 (KZP) (27 June 2023)
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IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
no:
283/2018P
In
the matter between:
BRIGHT
IDEA PROJECTS 66 (PTY) LTD t/a ALL FUELS
APPLICANT
and
FORMER
WAY TRADE AND INVEST (PTY) LTD
FIRST RESPONDENT
t/a
PREMIER SERVICE
LEE
BENTZ
SECOND RESPONDENT
STEPHANIE
JEAN VAN NIEKERK
THIRD RESPONDENT
K
SWART AND COMPANY
FOURTH RESPONDENT
FIRSTRAND
BANK LIMITED
FIFTH RESPONDENT
ROWAN
ASHLEY LONG N.O.
SIXTH RESPONDENT
ZAHEER
CASIM
N.O.
SEVENTH RESPONDENT
Coram:
Mossop J
Heard:
12 May 2023
Delivered:
27 June 2023
ORDER
The
following order is granted:
1.
The applicant’s application premised upon the mandament
van
spolie is dismissed with no order as to costs.
2.
The applicant’s alternative claim based upon the
condictio
furtiva
is adjourned sine die and the costs are reserved.
3.
The first respondent’s counter application is adjourned
sine
die and the costs are reserved.
4.
The sixth and seventh respondent’s counter application
is
granted and:
(a)
The fourth and fifth respondents are directed to pay all monies held
by them
in favour of the first respondent to the estate account of
the first respondent controlled by the sixth and seventh respondents
within 72 hours of the date of this order;
(b)
There shall be no order as to costs.
JUDGMENT
Mossop
J
:
[1]
As its trading name, ‘All Fuels’, suggests, the applicant
is a wholesaler and supplier of all fuels, including petrol and
diesel (individually referred to by their respective names and
collectively referred to as ‘fuel’). It is also a
property owner. On its property located at 2[...] C[...] A[...]
L[...]
Street, Pietermaritzburg it constructed a service station. It
leased that service station (the leased premises) to the first
respondent
from where it operated a Caltex service station. From the
leased premises, the first respondent sold fuel to the public, that
fuel
having been purchased by it from the applicant in terms of an
agreement between the parties (the agreement).
[2]
At its inglorious end, the relationship between the applicant on the
one
hand and the first respondent and its guiding minds, the second
and third respondents, on the other could, perhaps, be described
as
being antagonistic. It appears that it was not initially so, but the
relationship spoiled and decayed over time. This was ultimately
manifested in multiple and protracted legal proceedings between them.
A brief narration of this litigious history will assist in
understanding the later conduct of the first to third respondents of
which complaint is made by the applicant.
[3]
It appears that a dispute first arose regarding the first
respondent’s
obligation to purchase all its fuel from the
applicant, as required in terms of the agreement. On 22 January 2018,
Poyo-Dlwati
J of this division resolved that issue in favour of the
applicant, when she granted an order against the first respondent in
terms
of which she directed that it was to regard the agreement as
being binding upon it and the first respondent was consequently
obligated
to purchase its fuel from the applicant who, in turn, was
obligated to supply the same to the first respondent.
[4]
A dispute
then arose over the first respondent’s occupation of the leased
premises and the applicant instituted eviction proceedings
against
it, which were opposed. On 10 July 2018, D Pillay J of this division
(Pillay J) found in favour of the applicant and ordered
the first
respondent to vacate the leased premises.
[1]
Three years then passed while the first respondent sought to appeal
the decision of Pillay J to a succession of courts:
(a)
The first appeal was to a full court of this division. It failed;
(b)
Two
attempts were then made to secure leave to appeal from the Supreme
Court of Appeal. Both failed;
[2]
and
(c)
The
Constitutional Court was then also approached, but after hearing
argument on 9 March 2021, this application also failed when
leave to
appeal was finally refused on 28 September 2021.
[3]
[5]
While these attempts by the first respondent to revisit the judgment
of
Pillay J were ongoing, during 2019 the applicant and the first
respondent also referred certain issues between them to arbitration
in terms of the
Petroleum Products Act 120 of 1977
. The arbitration
was before Advocate Michael Kuper SC (Kuper SC) of the Johannesburg
Bar. It is not necessary to explore these
proceedings in any detail
save to record that in those proceedings, the applicant, which was
the respondent, identified 32 separate
complaints about the way in
which the first respondent had framed its statement of claim. When
asked to consider these objections,
Kuper SC upheld 18 of them and
directed the first respondent to cure them by a specified date. By
virtue of the events that thereafter
occurred, of which more shortly,
it appears that the arbitration proceedings in toto were abandoned by
the first respondent and
were never taken further and none of the
complaints which were upheld by Kuper SC were cured by the first
respondent.
[6]
Finally,
the applicant contended that the first respondent had defied the
order granted by Poyo-Dlwati J and consequently brought
contempt
proceedings against it. This resulted, ultimately, in Govender AJ, on
22 April 2020, sustaining the applicant’s
complaint and finding
the first respondent to be in contempt of the order. An application
for leave to appeal this order was granted
by Govender AJ and was set
down for argument before the Supreme Court of Appeal on 16 November
2021. On 14 December 2021, this
appeal went the same way as the first
respondent’s other appeals and was dismissed with costs.
[4]
[7]
During the interregnum between the granting of Pillay J’s order
and the attempts by the first respondent to appeal that order, and as
a consequence of the order granted by Poyo-Dlwati J, it was
more or
less business as usual between the applicant and the first
respondent. Fuel was ordered by the first respondent from the
applicant and paid for by it utilising the payment mechanism agreed
on between the parties. This mechanism was payment by way of
debit
order. Throughout the duration of their business relationship,
spanning approximately six years, it appears that the first
respondent permitted a debit order to operate in favour of the
applicant on its bank account, held with the fifth respondent, to
make payment of the various amounts for which it became indebted to
the applicant for from month to month.
[8]
Over the five-week period commencing on 30
August 2021 and terminating on 2 October 2021 (the period), the first
respondent ordered
on 11 separate dates some 228 244 litres of petrol
from the applicant with a value of R3 686 597.20 and on eight dates
it ordered
some 130 275 litres of diesel with a value of R1 588
289.60 from
the applicant.
[9]
The orders for fuel were placed in writing with the applicant by the
first
respondent and electronically submitted to it by the first
respondent. Before delivery occurred, the applicant would generate a
written tax invoice in respect of each order received, recording the
quantity of fuel ordered and the cost thereof. When the fuel
was
delivered, a written delivery note would be completed stating the
quantity of fuel actually pumped into the first respondent’s
holding tanks and would be signed for by a representative of the
first respondent.
[10]
Invoices were also delivered to the first respondent by the applicant
over the period for
the monthly rental charges raised by it in
respect of the leased premises. Over the period, the first respondent
paid an amount
of R340 229.85 to the applicant in respect of its
rental obligations.
[11]
Over the period, the first respondent consequently paid to the
applicant the total amount
of R5 615 116.65, made up of the
following amounts:
(a)
Petrol -
R3 686 597.20;
(b)
Diesel -
R1 588 289.60; and
(c)
Rental - R340 229.85.
[12]
These amounts were all paid electronically by the first respondent
making use of the debit
order system in place and, in due course, all
of the payments made by the first respondent cleared in the
applicant’s bank
account held at the Standard Bank of South
Africa Limited (Standard Bank).
[13]
As stated previously, the first respondent’s attempts to appeal
Pillay J’s
judgment came to an end with the Constitutional
Court’s refusal of leave to appeal on 28 September 2021. The
consequence
of such refusal was that Pillay J’s judgment
remained preserved and undisturbed and the first respondent was
obliged to comply
with its terms. This, finally, was acknowledged and
accepted by the first respondent and it therefore agreed to vacate
the leased
premises by close of business on Tuesday, 5 October 2021.
The first respondent adhered to this deadline and duly vacated the
leased
premises.
[14]
Eleven days after the Constitutional Court dismissed its application
for leave to appeal,
and four days after vacating the leased
premises, on Saturday, 9 October 2021, the first respondent caused
the amount of R5 389
148.01 to be extracted from the applicant’s
bank account with Standard Bank (the first reversal) and five days
later, on
Thursday, 14 October 2021, it extracted a further amount of
R225 968.64 from the same bank account (the second reversal). The sum
of these two amounts was R5 615 116.65, the precise amount of the
payments made by the first respondent to the applicant over the
period for its purchases of fuel and its rental payments.
[15]
When the applicant discovered the fact of the first reversal on 9
October 2021, its attorneys
wrote to the fourth respondent on the
first working day following the discovery and demanded that the money
taken from its bank
account be preserved by the fourth respondent
pending the bringing of an application to the high court. At the date
of this letter
the second reversal had not yet occurred. Five days
later, the applicant’s attorneys sought similar undertakings in
respect
of the second reversal. The fourth respondent subsequently,
and not without some additional posturing by both the second
respondent
and the fourth respondent itself, placed the amount of
R5 389 148.01 in an interest bearing trust account with the
fourth
respondent pending the determination of these proceedings. The
balance of the funds in the amount of R225 968.64 remain in the first
respondent’s bank account with the fifth respondent and have
also been preserved by the fifth respondent. The position was
not
ideal as far as the applicant was concerned, but the situation was
thus stabilised in a reasonably tolerable fashion.
[16]
The applicant then launched this application as an urgent application
on Monday, 18 October
2021. It was opposed by the first, second,
third and fourth respondents. On Wednesday, 20 October 2021, the
matter came before
Henriques J, who issued an order that, inter alia,
required the fourth and fifth respondents to preserve the funds that
they respectively
held on behalf of the first respondent. The first,
second and third respondents delivered their answering affidavit to
the application
on Monday, 25 October 2021. The answering affidavit
served both to refute the applicant’s claim and as the basis
for a counter
application brought by the first respondent.
[17]
Three months later, on Monday, 24 January 2022, the second and third
respondents then effected
a creditor’s voluntary winding up of
the first respondent. The necessary documentation was completed and
forwarded to the
Companies and Intellectual Property Commission
(CIPC). The voluntary liquidation was registered by CIPC on Monday,
31 January 2022.
One of the documents that was completed by the first
respondent to bring about this state of affairs was a CM100 document,
being
the statement of affairs of the first respondent. In that
document, tellingly, the first respondent recorded that it had no
cash
in the bank and had no cash in hand. The CM100 document
accordingly made no attempt to account for the R5 615 116.65 held
nominally
for the first respondent’s benefit collectively by
the fourth and fifth respondents at the time of the voluntary
liquidation.
[18]
As a consequence of the winding up of the first respondent, the sixth
and seventh respondents
were appointed as provisional, and then
final, liquidators of the first respondent.
[19]
The final act in the drama was then revealed: the second and third
respondents upped sticks
and left South Africa. Their current
whereabouts are uncertain, but it appears that they may be in the
United Kingdom. This is
apparently the reason why the arbitration
proceedings before Kuper SC have not proceed further: the second and
third respondents
are simply not here anymore to give instructions to
their legal representatives and to conduct such proceedings to
finality. On
Wednesday, 3 May 2023, just over a week before this
matter was argued, the fourth respondent withdrew as the legal
representative
of the second and third respondents for want of
instructions and undertook to abide the decision of the court insofar
as it was
also a respondent in the matter. There was, accordingly, no
appearance for the second and third respondents when the matter was
called on Friday, 12 May 2023.
[20]
Those then are the facts. There are now three applications before me
arising out of those
facts:
(a)
The applicant’s application principally seeks relief in terms
of the mandament
van spolie (the mandament). What is alleged to have
been despoiled is the money extracted from its bank account by the
first respondent.
In the alternative, the applicant seeks a judgment
against the first respondent based upon the
condictio furtiva
in the same amount in respect of which the despoilment is claimed,
and it seeks an order against the fourth and fifth respondents
that
they pay over the funds that they hold on behalf of the first
respondent to the applicant;
(b)
The first respondent in its counter application (the first counter
application)
seeks judgment against the applicant in the amount of:
(i)
approximately R3,2 million, being the amount by which it alleges
that
it was overcharged by the applicant in respect of the purchase of
various quantities of petrol and diesel;
(ii)
approximately R690 000 in respect of ‘wrongful rental charges’
charged by the applicant to the first respondent; and
(iii)
approximately R620 000 in respect of ‘wrongful invoicing which
failed
to adjust literage for temperature compensation’ charged
for by the applicant;
The
first counter application is opposed by the applicant; and
(c)
The sixth and seventh respondents have brought their own counter
application
(the second counter application) in which they allege
that the funds extracted from the applicant’s bank account and
which
are now held by the fourth and fifth respondents are, in fact,
assets that belong to the first respondent’s insolvent estate.
They therefore claim that they are entitled, indeed obliged, to take
possession and control of those funds and they seek an order
that the
fourth and fifth respondents pay all monies held by them on behalf of
the first respondent to them. The applicant is then
invited to prove
its claim to those funds.
[21]
Before considering each of
these applications it would be prudent to dwell for a moment on
certain banking concepts. A proper understanding
of these concepts
may significantly affect the outcome of the various applications.
[22]
I
consider first the concept of a debit order. A debit order is
constituted by a debtor giving a creditor a mandate to present an
amount for payment due to it by the debtor to the debtor’s
bankers and to receive payment of the amount so presented. The
debtor
thus does not have to do anything, other than to give the creditor
permission to present its claim for payment to the debtor’s
bankers.
[5]
[23]
The
second concept to consider is who owns money in a bank account.
It
is now, and has been for some time, settled law that once money is
paid into a bank account, that money belongs to the bank and
is
possessed by it. The English case of
Foley
v Hill
,
[6]
is one of the earliest cases to consider the nature of the
relationship between a bank and its client. Specifically, on the
issue
of the ownership of money deposited with a bank, the House of
Lords stated as follows:
‘
Money,
when paid into a bank, ceases altogether to be the money of the
principal; it is then the money of the banker, who is bound
to return
an equivalent by paying a similar sum to that deposited with him when
he is asked for it. The money paid into the banker's,
is money known
by the principal to be placed there for the purpose of being under
the control of the banker; it is then the banker's
money; he is known
to deal with it as his own; he makes what profit of it he can, which
profit he retains to himself, paying back
only the principal,
according to the custom of bankers in some places, or the principal
and a small rate of interest, according
to the custom of bankers in
other places. The money placed in the custody of a banker is, to
all intents and purposes, the
money of the banker, to do with it
as he pleases; he is guilty of no breach of trust in employing it; he
is not answerable to the
principal if he puts it into jeopardy, if he
engages in a hazardous speculation; he is not bound to keep it or
deal with it as
the property of his principal, but he is of course
answerable on the amount, because he has contracted, having received
that money,
to repay to the principal, when demanded, a sum
equivalent to that paid into his hands
.’
[7]
(References and footnotes omitted.)
[24]
In a South
African context, in
Trustees,
Estate
Whitehead v Dumas
,
[8]
Cachalia JA stated that:
‘
Generally,
where money is deposited into a bank account of an account-holder it
mixes with other money and, by virtue of commixtio,
becomes the
property of the bank regardless of the circumstances in which
the deposit was made or by whom it was made. The
account-holder has
no real right of ownership of the money standing to his credit but
acquires a personal right to payment
of that amount from the
bank, arising from their bank-customer relationship. This is also so
where, as in this case, no money
in its physical form is in issue,
and the payment by one bank to another, on a client's instruction, is
no more than an entry in
the receiving bank's account. The
bank's obligation, as owner of the funds credited to the
customer's account, is to
honour the customer's payment
instructions. Where the depositor is not the account-holder he
relinquishes any right to the
money and cannot reverse the transfer
without the account-holder's concurrence
.’ (Footnotes
omitted.)
[25]
With that understanding of these concepts in mind, I turn now to
consider each of the applications.
[26]
The applicant submits that it was in peaceful and undisturbed
possession of the funds paid
to it by the first respondent after
those funds had cleared and before the first respondent caused them
to be reversed out of its
bank account. It therefore requires the
repayment to it of the amount extracted by the first respondent from
its bank account,
ante omnia
.
[27]
Two
requirements must be met in order to obtain the remedy offered by the
mandament. Firstly, ‘the party seeking the remedy
must, at the
time of the dispossession, have been in possession of the property’.
Secondly, ‘the dispossessor must
have wrongfully deprived [the
party seeking the remedy of possession] without their consent’.
[9]
[28]
The first consideration must therefore be whether the applicant
possessed the funds allegedly
despoiled. Mr Ramdhani SC, who appears
for the applicant, appeared to adopt the view that it was beyond
question that this was
the case. The matter is, I fear, not that
simple and not that certain.
[29]
The
mandament is in its very essence a possessory remedy: indeed, it is
the
only possessory remedy in our law
.
[10]
Possession
may be considered as being a ‘combination of a factual
situation and of a mental state consisting in the factual
control or
detention of a thing
(corpus)
coupled
with the will to possess the thing’.
[11]
The
mandament
is:
‘
not
concerned with the protection or restoration of
rights
at all. Its aim is to restore the factual possession of which the
spoliatus has been unlawfully deprived.’
[12]
[30]
In assessing whether the mandament applies to
the facts of a given situation, the concepts of possession and the
right to ownership,
or any other right to the property in question,
are detached one from the other and only the question of possession
is considered.
The mandament thus:
‘…
decides no rights of
ownership; it secures only that if such decision be required, it
shall be given by a court of law, and not
affected by violence. If
before the spoliation either party needed a legal decision to
establish his rights, he requires it just
as much after, as before,
the order. He is in no better, and no worse position than he was in
before the spoliation.’
[13]
[31]
The
mandament in its purest form initially applied only to the
dispossession of corporeal assets, whether moveable or immovable.
The
restriction of the mandament only applying to corporeal assets no
longer prevails, as it is now accepted that the deprivation
of
so-called ‘quasi possession’ of some forms of incorporeal
rights also has a home in
the
mandament.
Incorporeal
things are things which can neither be handled nor touched, and
consist in a right, such as inheritances, servitudes,
debts, actions,
and revenues.
[14]
A bank account is a further example of such an incorporeal asset.
[15]
[32]
How
incorporeal assets came to be included in the mandament is explained
by Jones AJA in
Telkom
SA Ltd v Xsinet (Pty) Ltd
,
[16]
where he noted that:
‘
Originally,
the mandament only protected the physical possession of movable or
immovable property. But in the course of centuries
of development,
the law entered the world of metaphysics. A need was felt to protect
certain rights (tautologically called incorporeal
rights) from being
violated. The mandament was extended to provide a remedy in some
cases. Because rights cannot be possessed,
it was said that the
holder of a right has “quasi-possession” of it, when he
has exercised such right. Many theoretical
and
methodological objections can be raised against this
construct,
inter
alia
, that
it confuses contractual remedies and remedies designed for protecting
real rights. However, be that as it may, the semantics
of
“quasi-possession” has passed into our law. This is all
firmly established
.’
[33]
As
incorporeal rights cannot be physically
possessed, possession thereof is assessed by reference to the
exercising of the right attached
to quasi possession of the
incorporeal property.
A
refusal to allow
a person to exercise the right will consequently amount to a
dispossession of such right. However, in spoliation
proceedings the
applicant need not prove that he has the right: what is relevant is
whether or not the applicant has exercised,
rather than owned,
the right.
[34]
The
inclusion of incorporeal rights in the mandament does not apply,
however, to quasi possession of all incorporeal rights.
In
FirstRand
Ltd t/a Rand Merchant Bank v Scholtz NO
,
[17]
Malan AJA stated that:
‘
The
mandement van spolie does not have a “catch-all function”
to protect the
quasi-possessio
of
all kinds of rights irrespective of their nature. In cases such as
where a purported servitude is concerned the mandement
is
obviously the appropriate remedy, but not where contractual rights
are in dispute or specific performance of contractual obligations
is
claimed: its purpose is the protection of
quasi-possessio
of
certain rights. It follows that the nature of the professed right,
even if it need not be proved, must be determined or
the right
characterised to establish whether its
quasi-possessio
is
deserving of protection by the mandement . . . That
explains why possession of “mere” personal rights
(or
their exercise) is not protected by the mandament. The right held in
quasi-possessio
must
be a “gebruiksreg” or an incident of the possession or
control of the property.
’
(Footnotes omitted.)
[35]
In my view,
the applicant never possessed the money taken from its bank account.
The money standing to its credit in its bank account
belonged to its
bankers and was possessed by those bankers, not the applicant. All
that the applicant possessed was a personal
right to the money
deposited in its bank account. As was stated in
Firstrand
,
mere personal rights are not protected by the mandament and only
rights to use or occupy property or incidents of occupation will
warrant protection by a spoliation order.
[18]
That its right is a personal right is acknowledged, perhaps
unwittingly, by the applicant itself. In its full heads of argument,
the applicant makes reference to a work
[19]
in which a chapter dealing with payment systems was partially
referred to as follows:
‘
In
the case of a credit transfer it is said that the debtor (originator)
“pushes” the funds from his account to the
account of the
creditor (beneficiary) resulting in the debiting of the originator’s
account and the beneficiary obtaining
a personal right against his
bank to credit his account.’
[36]
A further
difficulty for the applicant is that it appears to me that what is
claimed by it is specific performance of its contractual
rights with
the first respondent. In
Wille’s
Principles of South African Law
,
[20]
the
following is stated:
‘
Protection
for non-servitutal rights appears to be confined to those rights that
flow from or are incidental to possession of corporeal
property. . .
Where the non-servitutal right of use is separate from applicant’s
possession of corporeal property it is almost
inevitably a
contractual right which is not protected by the mandament van
spolie.’ (Footnotes omitted.)
[37]
This
is clearly not an instance where servitutal rights are of
application.
At
the centre of the dispute is the agreement for the supply of fuel in
which there is a formula to be applied to determine the
costs of
those products. As we shall see, the first respondent claims in the
first counter application that the applicant did not
adhere to the
agreement and the formula, and it therefore reversed the payments
that it had made to the applicant over the period
as it had allegedly
been over charged. The payments that the applicant received, and
which were subsequently reversed, therefore
had their origin in a
contract between the applicant and the first respondent.
[21]
The applicant, in turn, claims that it has complied with its
contractual obligations in that it supplied substantial quantities
of
fuel to the first respondent and requires the funds already paid to
it for such fuel to be reinstated. That seems to me to be
a demand
for specific performance of its contract with the first respondent.
[38]
The
mandament is an ancient remedy. Yet there is a scarcity of cases that
relate to it applying to monies held in a bank account.
That in
itself is significant. None were referred to in either counsel’s
heads of argument. I have found but a single case
that deals with the
issue. There may be more but I have not found them. The case that I
found is
Corporate
Premium Cleaning CC v Van Baalen
.
[22]
In that matter, a member of a close corporation had withdrawn an
amount of money from the close corporation’s bank account
without permission, claiming that it was due to him. The judgment is
brief, covering only some two pages, and the learned judge
appears to
have approached the matter on the basis that the member was not in
possession of the funds before he withdrew them from
the bank
account, therefore the close corporation must have possessed them.
There was no consideration of whether the close corporation
actually
possessed the funds held to its credit in its bank account that were
withdrawn. Had such an investigation been conducted
by the learned
judge, he may well have concluded that the holder of a bank account
does not, in fact, possess the funds standing
to its credit. I am
accordingly not persuaded that this decision should be followed by
me.
[39]
The applicant’s principal relief based on the mandament must
accordingly be refused.
[40]
Considering
the applicant’s alternative claim based upon the
condictio
furtiva
,
it is so that such a claim may be brought to vindicate stolen
money.
[23]
The
condicitio
furtiva
may, for example, be used to vindicate the proceeds of a stolen
cheque.
[24]
It is a remedy
that the owner of a thing, or someone with an interest in it,
[25]
has against a thief and his or her heirs for damages.
[26]
It does not lie ‘against a subsequent possessor, whether
his or her possession is bona fide or mala fide, or
against an
accomplice’.
[27]
It
is generally regarded as being a delictual action and the
rei
vindicatio
and
the
condictio
furtiva
are
viewed as being alternative remedies to each other.
[28]
[41]
Whilst the applicant has claimed principally to have been
despoiled, it goes further and strongly and forcefully submits that
the
first respondent and its guiding minds have committed theft,
alternatively fraud, against it. This is denied by the first
respondent
and it refutes those allegations with reference to facts
that it alleges in the first counter application. I can, however,
only
share that view once I have heard the first counter application
as the first respondent contends that there is a reasonable and
lawful reason for its conduct. As will appear hereafter, I have not
heard argument on the first counter application and I am therefore
constrained in the circumstances to adjourn the applicant’s
alternative relief sine die and reserve all questions of costs.
[42]
As regards the first counter claim, it was instituted by the first
respondent prior to
the commencement of its voluntary liquidation.
Section 359 of the Companies Act 61 of 1973 (the Act) reads as
follows:
‘
(1)
When the Court has made an order for the winding-up of a company or a
special resolution for the voluntary winding-up of a company
has been
registered in terms of section 200 –
(a
)
all civil proceedings by or against the
company concerned shall be suspended until the appointment
of a
liquidator; and
(b
)
any attachment or execution put in force
against the estate or assets of the company after the
commencement of
the winding-up shall be void.
(2)
(a)
Every person who, having instituted legal proceedings
against a company which were suspended by a winding-up, intends to
continue
the same, and every person who intends to institute legal
proceedings for the purpose of enforcing any claim against the
company
which arose before the commencement of the winding-up, shall
within four weeks after the appointment of the liquidator give the
liquidator not less than three weeks' notice in writing before
continuing or commencing the proceedings.
(b)
If notice is not so given the proceedings shall be considered to
be abandoned unless the Court otherwise directs.’
[43]
Thus, upon
registration of a special resolution by a company that it be wound up
voluntarily, all civil proceedings against the
company are suspended
until the appointment of a liquidator. The reference in this section
to a ‘liquidator’ is a reference
to a final
liquidator.
[29]
It has been
held that:
‘
The
purpose of this section is to prevent a newly-appointed liquidator
from being embarrassed by an action before he has had an
opportunity
of considering the matter, and to prevent costs being incurred by the
institution of proceedings between the time when
the winding-up order
has been made and the liquidator has been appointed.’
[30]
The
liquidator is thus given a window of opportunity to consider and
assess the nature and validity of the claim and whether to
dispute or
settle or acknowledge it.
[31]
[44]
The sixth and seventh respondents have fairly and correctly
acknowledged that the applicant
has complied with its obligations in
terms of section 359(2)
(a)
of the Act and has given them the
required notice. However, they have said nothing about the first
counter application brought
at the instance of the first respondent.
The sixth respondent states in his replying affidavit in the second
counter application
that at the time of deposing to that affidavit,
he and the seventh respondent were still in the process of
investigating the affairs
of the first respondent and, further, that:
‘
I
must categorically state that I accept neither the Applicant’s
version (as it has failed to furnish me with the mandate
forms) nor,
at this stage, do I accept the First to Third Respondent’s
version as it is quite clearly hotly disputed by the
Applicant.’
And
then the sixth respondent states:
‘
Again,
I emphasise that I do not contend that the dispute is valid or not, I
am simply not in a position to make that election at
this time.’
[45]
The wording of the Act appears to place no obligation on a liquidator
to make an election
to continue with litigation commenced by the
company in liquidation within any specified time period after
assuming office. The
first counter application is thus still alive
and is not to be regarded as having been abandoned. But I heard no
argument on it
from counsel for the first respondent in liquidation.
It is now the counter application of the insolvent estate following
the voluntary
liquidation of the first respondent.
[46]
The first counter application is set out in some detail by the first
respondent and is
replete with numerous annexures upon which reliance
is placed. The thrust of the first counter application is that it is
alleged
that the applicant itself took payment in the amount of R5
615 116.65 out of the first respondent’s bank account without
the permission of the first respondent. The first respondent thus
lawfully countermanded the payment of that amount and obtained
the
repayment of that amount. The basis for this countermanding was that
the amounts that the applicant helped itself to from the
first
respondent’s bank account were in inflated amounts. The first
respondent appears, however, to concede that the applicant
could use
the debit order payment system to obtain payment of amounts in
respect of which the first respondent was lawfully and
correctly
invoiced. Because the invoicing was incorrect, the applicant was not
entitled to payment in the total amount of R5 615
116.65. The
explanation why the applicant’s invoicing is incorrect then is
set out in dense, complicated reasoning.
[47]
In setting out the basis for the first counter application I
obviously express no views
as to its merits by virtue of the fact
that I heard no argument on it at all, primarily because of the
position adopted by the
sixth and seventh respondents. It would, in
my view, be wise in the circumstances, to also simply adjourn the
first counter application
sine die and reserve costs until the sixth
and seventh respondents have come to a firm view on its merits.
[48]
That brings me to the second counter application. Given the nature of
bank transactions
as previously discussed, the essential question to
be addressed here is whether the first respondent acquired a personal
right
to the funds when they were retransferred into its bank
account. If it did, then those funds accrued to the first
respondent’s
estate upon its liquidation. If the first
respondent did not acquire such a personal right, then neither did
its estate and the
funds remain the property of the bank and the
counter application must perish.
[49]
Cachalia JA dealt with this issue in
Whitehead
where he stated
the following:
‘
Where,
as in this case, A causes the transfer of money from his bank account
to the account of B, no personal rights are transferred
from A to B;
what occurs is that A's personal claim to the funds that he held
against his bank is extinguished upon the transfer
and a new personal
right is created between B and his bank. Ownership of the money -
insofar as money in specie is involved - is
transferred from the
transferring bank to the collecting bank, which must account to
B in accordance with their bank-customer
contractual
relationship. This is so even where A was induced to enter into
an agreement through B's fraudulent misrepresentation.
In that case A
will have a claim for delictual damages against B to compensate him
for his loss but will not be able to claim
a retransfer of the
credit from the bank. And if B is subsequently sequestrated the claim
will lie against B's estate because
an insolvent's personal right to
credit falls into his estate upon sequestration.
’
[32]
(Footnotes omitted.)
[50]
It may very
well be that the first respondent committed fraud or theft in
extracting the funds from the applicant’s bank account.
It is
also possible that the first respondent made some form of
misrepresentation to motivate for the reversal of its payments.
I am
not able to find that as a fact presently, given the fact that the
first counter application has not been argued. In any event,
it is
worth acknowledging that fraud is not lightly to be inferred.
[33]
With the assistance of its bankers, the fifth respondent, the first
respondent invoked a procedure to reverse its prior payments
to the
applicant. The retransferred money thus became the property of the
fifth respondent when it was paid into the first respondent’s
account held with it. While the first respondent’s conduct may
be suspicious, and subject to criticism, I cannot conceive
of the
fifth respondent in those circumstances not acquiring an obligation
to account to the first respondent.
[51]
In
Nissan
South Africa (Pty) Ltd v Marnitz
[34]
and
Commissioner
of Customs and Excise v Bank of Lisbon International Ltd and
others
,
[35]
it was held that payments made in error and moneys taken in
circumstances that were nothing short of theft respectively, deprived
such payment to the receiving bank of any legal effect. The bank
nonetheless acquired ownership of the funds but not the obligation
to
account to its client. But the distinguishing feature of both those
cases from the present one is that they dealt with theft
or fraud
outside a contractual context. In this matter, the obverse is true:
the reversed payment was entirely contractual in its
origin. A fraud
may have been perpetrated to acquire its reversal, but the causa for
the payment was contractual in its nature.
As Cachalia JA noted in
Whitehead
:
‘
.
. . it is immaterial that the payment was solicited through
Whitehead’s misrepresentation and fraud.’
[36]
[52]
The first respondent acquired a personal right to the countermanded
funds when they were
received by the fifth respondent. A large
portion of the funds extracted from the applicant’s bank
account was then transferred
to the trust account of the fourth
respondent, leaving a small balance, relatively speaking, in the
first respondent’s bank
account. There was thus a credit
balance in the first respondent’s favour with the fifth
respondent and a credit balance
in its favour in the trust account of
the fourth respondent. Cachalia JA stated in
Whitehead
that
the right to credit is an asset that falls within an insolvent
estate. I see no reason why that reasoning should be departed
from in
this instance.
[53]
I accordingly uphold the second counter application, but not without
some degree of sympathy
for the applicant in so doing. This will be
reflected in the costs orders that I intend making as it seems to me
that this is an
instance where the old idiom concerning someone being
played like a fiddle is properly of application. The decision that I
have
come to does not mean the end of the road for the applicant: on
the contrary, it is now entitled to prove its claim against the
insolvent estate of the first respondent to the satisfaction of the
sixth and seventh respondents.
[54]
I accordingly grant the following order:
1.
The applicant’s application premised upon the mandament
van
spolie is dismissed with no order as to costs.
2.
The applicant’s alternative claim based upon the
condictio
furtiva
is adjourned sine die and the costs are reserved.
3.
The first respondent’s counter application is adjourned
sine
die and the costs are reserved.
4.
The sixth and seventh respondent’s counter application
is
granted and:
(a)
The fourth and fifth respondents are directed to pay all monies held
by them
in favour of the first respondent to the estate account of
the first respondent controlled by the sixth and seventh respondents
within 72 hours of the date of this order;
(b)
There shall be no order as to costs.
MOSSOP
J
APPEARANCES
Counsel
for the applicant:
Mr D
Ramdhani SC
Instructed
by:
Norton
Rose Fulbright
Umhlanga
Locally
represented by:
Tatham
Wilkes Attorneys
200
Hoosen Haffejee Street
Pietermaritzburg
Counsel
for the first respondent:
Mr G
Harrison
(in
liquidation), sixth and seventh respondents
Instructed
by:
Minnie
and Du Preez Attorneys
Care
of:
Shepstone
and Wylie
1
st
Floor, ABSA House
15
Chatterton Road
Pietermaritzburg
Date
of Hearing:
12
May 2023
Date
of Judgment:
27
June 2023
[1]
Reported as
Bright
Idea Projects 66 (Pty) Ltd v Former Way Trade and Invest (Pty) Ltd
[2018]
ZAKZPHC 29;
2018
(6) SA 86
(KZP).
[2]
Reported
as
Former
Way Trade and Invest (Pty) Ltd v Bright Idea Projects 66 (Pty) Ltd
[2020]
ZASCA 118
.
[3]
Reported
as
Former
Way Trade and Invest (Pty) Limited v Bright Idea Projects 66 (Pty)
Limited and another
[2021]
ZACC 33; 2021 (12) BCLR 1388 (CC).
[4]
Reported
as
Former
Way Trade and Invest (Pty) Ltd t/a Premier Service Station and
another v Bright Idea Projects 66 (Pty) Ltd t/a All Fuels
[2021] ZASCA 175.
[5]
Spar
Group Limited v Absa Bank Limited
[2020]
ZAGPJHC 259 para 51.
[6]
Foley
v Hill
1843-60
All ER Reprint 16; 9 ER 1002; (1848) 2 HLC 28.
[7]
Ibid at 36-37.
Followed
in South Africa in amongst others
R
v Stanbridge
1959 (3) SA 274 (C).
[8]
Trustees,
Estate
Whitehead v Dumas and another
[2013]
ZASCA 19
;
2013 (3) SA 331
(SCA) para 13.
[9]
Monteiro
and another v Diedricks
[2021] ZASCA 15
;
2021 (3) SA 482
(SCA) para 17.
[10]
Mans v
Marais
1932
CPD 352
at 356;
Bon
Quelle (Edms) Bpk v Munisipaliteit van Otavi
1989
(1) SA 508 (A)
.
[11]
Blendrite
(Pty) Ltd and another v Moonisami and Another
[2021] ZASCA 77
;
2021 (5) SA 61
(SCA) para 5, quoting with approval
from 27
Lawsa
2
ed para 70.
[12]
Zulu v
Minister of Works, KwaZulu, and others
1992
(1) SA 181
(D)
at
187G-H.
[13]
Mans
v Marie
1932
CPD 352
at
356. Followed in amongst others
Jigger
Properties CC v Maynard NO and others
[2017]
ZAKZPHC 9; 2017 (4) SA 569 (KZP).
[14]
Ex
Parte the Master of the Supreme Court
1906 TS 563
at 566.
[15]
Ormerod
v Deputy Sheriff, Durban
1965 (4) SA 670
(D) at 673D-G.
[16]
Telkom
SA Ltd v Xsinet (Pty) Ltd
2003
(5) SA 309
(SCA)
para 9.
[17]
FirstRand
Ltd t/a Rand Merchant Bank and another v Scholtz NO and others
[2006]
ZASCA 99
;
2008 (2) SA 503
(SCA) para 13.
[18]
See also
ATM
Solutions (Pty) Ltd v Olkru Handelaars CC and another
[2008]
ZASCA 153
;
2009 (4) SA 337
(SCA) para 9;
Microsure
(Pty) Ltd and others v Net 1 Applied Technologies South Africa Ltd
2010 (2) SA 59
(N); and
Telkom
SA Ltd v Xsinet (Pty) Ltd
2003 (5) SA 309 (SCA).
[19]
R
Sharrock
(managing editor)
The
Law of Banking and Payment in South Africa
(2016) para 7.3.2.
[20]
F
du Bois (general editor)
Wille’s
Principles of South African Law
9
ed (2007) at
458-459.
[21]
Vital
Sales Cape Town (Pty) Ltd v Vital Engineering (Pty) Ltd and others
2021 (6) SA 309
(WCC) para 26.
[22]
Corporate
Premium Cleaning CC v Van Baalen
[2014]
ZAGPPHC 774.
[23]
Commercial
Industrial Domestic Electrical Contractors (Pty) Ltd v Van der Merwe
and another
[2017]
ZAGPPHC 1096 para 4.
[24]
LTC
Harms
Amler’s
Precedents
of Pleadings
9 ed (2018) at 88.
[25]
Clifford
v Farinha
1988
(4) SA 315
(W).
[26]
Krueger
v Navratil
1952
(4) SA 405
(SWA) at 408;
John
Bell & Co Ltd v Esselen
1954
(1) SA 147
(A) at 151E-152B;
Minister
van Verdediging v Van Wyk en andere
1976
(1) SA 397
(T) at 400C;
Crots
v Pretorius
[2010]
ZASCA 107
;
2010 (6) SA 512
(SCA) para 3.
[27]
Crane
Route Municipality v Claasen and others
[2009]
ZAECGHC 19 para 23. See also
Minister
van Verdediging v Van Wyk en andere
1976
(1) SA 397 (T) at 400E-F and 402A-G.
[28]
Conradie
v Jones
1917
OPD 112
at 119.
[29]
S
trydom
NO v MGN Construction (Pty) Ltd and another: In re Haljen (Pty) Ltd
(in liquidation)
1983
(1) SA 799
(D) at 806B-807H;
Ronbel
108 (Pty) Ltd v Sublime Investments (Pty) Ltd (in liquidation)
[2009] ZASCA 103
;
2010 (2) SA 517
(SCA) para 2.
[30]
Baskin
v Levey and others, NNO
1967
(3) SA 121
(W) at 123G-H.
[31]
Umbogintwini
Land and Investment Co (Pty) Ltd (in liquidation) v Barclays
National Bank Ltd and another
1987
(4) SA 894
(A) at 910H-I.
[32]
Trustees,
Estate Whitehead v Dumas and another
[2013]
ZASCA 19
;
2013 (3) SA 331
(SCA) para 15.
[33]
Loomcraft
Fabrics CC v Nedbank Ltd and another
[1995] ZASCA 127
;
1996 (1) SA 812
(A) at 817G.
[34]
Nissan
South Africa (Pty) Ltd v Marnitz NO
and
others (Stand 186 Aeroport (Pty) Ltd Intervening)
2005
(1) SA 441 (SCA).
[35]
Commissioner
of Customs and Excise v Bank of Lisbon International Ltd and another
1994
(1) SA 205 (N).
[36]
Trustees,
Estate
Whitehead v Dumas and another
[2013]
ZASCA 19
;
2013 (3) SA 331
(SCA) para 23.