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[2023] ZAECMKHC 11
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Joubert N.O v Soleil Kommadagga (Pty) Ltd and Others (1817/2020) [2023] ZAECMKHC 11 (26 January 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE DIVISION, MAKHANDA
CASE
NO. 1817/2020
In
the matter between:
DEBORAH
JOUBERT N.O.
Applicant
and
SOLEIL
KOMMADAGGA (PTY) LTD
First Respondent
MARIA
JOHANNA GROENEWALD
Second
Respondent
FIRSTRAND
BANK LIMITED
Third Respondent
THE
REGISTRAR OF DEEDS
Fourth Respondent
H.
BADENHORST
Fifth Respondent
JACOBUS
FREDERICK VILJOEN
Sixth
Respondent
M.
KROG
Seventh Respondent
ABSA
BANK LIMITED
Eighth Respondent
CONRAD
ALEXANDER STARBUCK N.O.
(in
his capacity as liquidator of F & J Consultants CC
(in
liquidation))
Ninth Respondent
JUDGMENT
Rugunanan
J
[1]
The heart of this application concerns the
sale of four adjoining farm properties (they are collectively
referred to as ‘the
subject properties’ or where
contextually appropriate, ‘the farm properties’ or ‘the
properties), namely:
(i)
Farm Rhenosterfontein, remaining
extent Farm 306;
(ii)
Farm Rhenosterfontein, Portion 1 of
Farm 306;
(iii)
Farm Rhenosterfontein, Portion 2 of
Farm 307; and
(iv)
Farm Rhenosterfontein, Portion 0 of
449.
[2]
The subject properties are situated in the
Blue Crane Route Municipality between Somerset East and Paterson
within the area of jurisdiction
of this court.
[3]
The present
application was launched on 1 September 2020. The deponent to the
founding affidavit is Deborah Joubert N.O. She acts
in her official
capacity as ‘duly appointed final trustee for and in respect of
the Smangaliso Trust’ (‘the Trust’).
On 22 February
2022, and by order of this court, Nareshviran Vandayar N.O. was
granted leave in his position as the jointly appointed
final
insolvency co-trustee of the Trust to intervene in the matter as
second applicant. His joinder as co-applicant or second
applicant is
not reflected in the indices and filing notices giving cover to the
papers in this application.
[4]
In the circumstances
dealt with later in this judgment the Trust was sequestrated on 6
November 2018. Of the all the respondents
cited in this application
the relief claimed by the applicants is primarily aimed at the first,
second, third and sixth respondents.
[5]
In clarification of
their status:
(i)
The first
respondent is Soleil Kommadagga (Pty) Ltd (‘Soleil’), a
private company duly registered in accordance with
the company laws
of the Republic of South Africa;
(ii)
The second
respondent is Maria Johanna Groenewald (‘Ms Groenewald’),
a resident of Gauteng who has since 22 July 2020
been the sole
director of Soleil;
(iii)
The third
respondent is Firstrand Bank Ltd (‘FRB’), a commercial
entity that conducts the business of a bank;
(iv)
The sixth
respondent is Jacobus Frederick Viljoen (‘Viljoen Snr’),
a resident of Gqeberha (formerly Port Elizabeth),
and a brother of
the second respondent. Viljoen Snr is an erstwhile trustee of the
Trust. He conducted a game farming enterprise
on the subject
properties and on a fifth property known as Farm Rhenosterfontein,
Portion 3 of Farm 304 (‘the Farm’).
[6]
Of the abovementioned respondents, only FRB
opposes these proceedings.
[7]
It does so in defence of a registered bond
that it holds over the subject properties.
[8]
Shorn of
inconsequential matter the notice of motion indicates that the
applicants seek the following relief in addition to which
they seek
attorney and client costs against any opposing party or parties:
8.1
A declaration
that the Trust is the lawful owner of the subject properties;
8.2
An order that
the registrar of deeds be directed to amend the title deeds to
reflect the Trust as the true owner of the subject
properties;
Alternatively to the above,
8.3.1
That the sale and transfer of the subject properties by the Trust to
Soleil be set aside in terms of section 31
of the Insolvency Act
[1]
and that Soleil be ordered to retransfer the subject properties to
the Trust;
8.3.2
That Soleil as well as the second and sixth respondents be declared
to have forfeited any claim that they may
have had against the Trust;
and that they be ordered to sign and execute all documents to give
effect to any of the above orders
failing which the sheriff be
authorised to do so on their behalf;
8.3
That Soleil be deemed not to be a
juristic person and be collapsed into the Trust and its assets be
declared to form part of the
assets of the Trust;
8.4
That the mortgage bonds registered
over the subject properties in favour of FRB be cancelled (‘bond
cancellation’).
Background
[9]
On 13 July 2017, summary judgment was
granted by this court, per Beshe J, against the Trust in favour of
Griewakwaland Wes Korporatief
Limited (‘GWK’), a
creditor, for the amount of R7.5 million.
[10]
GWK also sought relief that the Farm be
declared specially executable and that the issue of a writ of
execution be authorised.
[11]
The Trust was provisionally sequestrated on
18 September 2018.
[12]
A final order issued on 6 November 2018.
[13]
The sequestration ensued at the instance of
GWK.
[14]
In the course of events set out below FRB
caused Soleil to be provisionally liquidated on 8 September 2020 –
a final order
followed on 9 December 2020.
[15]
The events and circumstances that preceded
the sequestration and liquidation are detailed hereunder only insofar
as is considered
relevant for present purposes.
[16]
To begin with, the Trust’s
indebtedness to GWK arose essentially from a security bond registered
in favour of GWK over the
Farm, and a credit agreement between itself
and GWK, as also agreements of suretyship in which it, including
Viljoen Snr and his
spouse, bound themselves jointly and severally
with an entity known as KNB Farming (Pty) Ltd in favour of GWK for
the due and punctual
payment of all financial obligations owed to the
latter by KNB.
[17]
Subsequent to the grant of summary
judgment, an agreement concluded between the Trust and Soleil on
6 February 2018 initiated
the sale of the subject properties to
Soleil for the amount of R4 million. In the founding affidavit it is
asserted that the amount
was never paid by Soleil to the Trust, that
Soleil did not apply for finance as it was obliged to do, nor did it
secure the purchase
price by way of bank guarantees which it failed
to put up, but that the subject properties were notwithstanding
transferred from
the Trust to Soleil on 31 July 2018. To the
contrary, the version by FRB is that the amount of R4 million was
paid by it by means
of the honouring of guarantees, one of which was
in favour of ABSA Bank for the credit of the account of the Trust for
the amount
of R1.1 million. This amount was paid to cancel the bond
over the subject properties in favour of ABSA.
[18]
Although
there is a dispute about the payment of the purchase price to the
Trust, upon transfer of the subject properties a bond
was
simultaneously registered over the properties in favour of FRB. I add
that the dispute regarding payment of the purchase price
is resolved
in favour of FRB on the basis of the well-known
Plascon-Evans
rule.
[2]
It is stated elsewhere
in the founding affidavit that the bond secured FRB in respect of a
loan of R4 million to Soleil and an
overdraft facility of R500 000
extended to Soleil.
[19]
In pursuance of its judgment GWK instructed
the sheriff to sell the Farm. A sale in execution was scheduled to
take place on 3 August
2018 but on 30 July 2018 the Trust launched an
(urgent) application in which it sought an order to stay the sale in
execution of
the Farm. That application was dismissed. The sale in
execution proceeded, though the highest offer made for the Farm
approximated
to 20% of GWK’s claim.
[20]
In the application for the stay of the
execution of the judgment, Viljoen Snr – at the time a trustee
of the Trust –
deposed to an affidavit. That affidavit together
with its annexures is attached to the founding affidavit to the
present application.
Extracts from Viljoen Snr’s affidavit
which are quoted in the founding affidavit are reproduced herein,
omitting of course
irrelevant wording:
‘
10.
The Trust had previously been represented by … an attorney …
in an ongoing transaction
wherein the Trust property was to be sold.
The Trust property comprise five farms … with a total value in
excess of R100 000
…
…
22.
As the Trust required money to ensure that it continued to be a going
concern, it entered
into an agreement of sale of the remaining 4
farms with Soleil … of which my sister Maria Johanna
Groenewald, is the only
shareholder and director, for a very low
price of R4 000 000 …
23.
The seller and the purchaser entered into an agreement that the Trust
or another entity
or person nominated by the Trust is entitled to
repurchase the property at R4 000 000. Thus enabling the
Trust to sell
all the farms as a unit when a purchaser is found.
24.
These favourable terms were given to the Trust because of the close
relationship I have
with my sister.
25.
The Trust received a deposit of R1 000 000 from Soleil on
16 June 2018, and a
portion thereof was provided to our attorney to
cover his prior expenses that had yet to be paid.’
[21]
Whereas Viljoen Snr suggested that the
subject properties together with the Farm are valued in excess of at
R100 million, a valuation
proffered by FRB came in at R20.1 million.
That valuation is attached to the founding affidavit in the stay
application.
[22]
After the transfer to Soleil, Viljoen Snr
carried on farming operations on the subject properties just as he
had done before.
[23]
Against this background the applicants
contend that the circumstances in which the subject properties were
transferred to Soleil
bear the hallmarks of a simulated transaction –
the properties were sold below value – there was no genuine
intention
for Soleil to assume ownership of the subject properties,
it being the Trust’s and Soleil’s true intention to
create
the appearance that Soleil was the owner thereof. It is
Evident from the affidavit by Viljoen Snr that the Trust and Soleil
agreed
that the Trust or another entity or person nominated by it
would be entitled to repurchase the subject properties together with
the Farm for the same purchase consideration that Soleil had acquired
it. Hence, it is contended in the founding affidavit that
the
intention was clearly that Soleil did not intend, nor was it intended
by the true protagonists (Viljoen Snr and Ms Groenewald),
that
Soleil permanently assumes ownership of the subject properties. As
the sale of the subject properties occurred after the summary
judgment proceedings and in the midst of GWK’s efforts to
pursue with execution of its judgment, the Trust and Soleil did
so to
thwart GWK’s efforts to extract payment of a debt.
[24]
Whereas the present application was
launched on 1 September 2020, winding-up proceedings against Soleil
commenced on 10 June 2020
at instance of FRB. A provisional
liquidation order ensued on 8 September 2020. A final
liquidation order issued on 9 December
2020.
[25]
While this chronology assumes relevance
elsewhere in this judgment, it only suffices to mention that the
liquidators of Soleil have
not entered the dispute in these
proceedings and abide this court’s pronouncement in the matter.
[26]
FRB’s
liquidation of Soleil was founded on the latter’s indebtedness
to FRB for the loan amount of R4 million and the
overdraft of
R500 000. The liquidation proceedings were pillared on section
344 of the Companies Act
[3]
on the basis of Soleil’s inability to pay its debts and that
its liquidation would be just and equitable. The motivation
in the
latter regard appears to have been that the collective value of the
properties is more than 20 million which substantially
exceeds the
purchase price of R4 million. It may be added that the liquidation
proceedings occurred while an agreement (envisaged
in paragraph 23 of
Viljoen Snr’s affidavit
supra
)
was in the making between Ms Groenewald and various
complainants/investors and creditors of an entity known as F & J
Consultants
CC (the ninth respondent, also in liquidation) whereby
each would be granted shares in a new company into which the subject
properties
would be transferred.
The arguments
[27]
In
support of the relief claimed in 8.1 and 8.2 hereinabove the
applicants contend that the sale of the subject properties was a
simulated transaction
[4]
. This
categorisation was raised for the first time in argument and is
nowhere mentioned in the founding affidavit.
[28]
In relation to the relief sought 8.3.1 and
8.3.2 reliance is placed on section 31 of the Insolvency Act.
[29]
Relevant
to the relief claimed in 8.4 further reliance is placed on section
20(9) of the Companies Act
[5]
.
[30]
Before turning to address these arguments,
FRB’s opposition commenced with two issues
in
limine
.
Failure to include
co-trustee as co-applicant
[31]
At the time of this
application being launched it was not brought by both the duly
appointed insolvency trustees notwithstanding
the fact that their
joint appointment as trustees was made final by way of a certificate
of appointment issued by the Master of
the high court on 8 April
2019.
[32]
The
founding affidavit to which Ms Joubert had deposed makes no mention,
express or otherwise, that she had been authorised by her
co-trustee
Mr Vandayar to bring the application and that he has consented to the
institution of these proceedings.
[6]
[33]
Joint
trustees are one persona.
[7]
They must act jointly – they are the channel through which the
insolvent estate can sue.
[8]
Where Mr Vandayar had not been before this court as co-trustee at the
time of the institution of these proceedings, the defect
cannot be
regarded as anything formal which is capable of being condoned.
[9]
[34]
Accordingly, the
institution of this application by Ms Joubert ostensibly as sole
trustee, is a nullity.
‘
Vested
rights’
[35]
It is not in dispute
that Soleil was placed under provisional liquidation by this court on
8 September 2020 on the basis of its
inability to pay its debts, nor
is it disputed that the application for the winding up of Soleil was
lodged and issued on 10 June
2020.
[36]
For
purposes of section 348 of the Companies Act of 1973
[10]
a winding-up of a company by the court shall be deemed to commence at
the time of the presentation to the court of the application
for the
winding-up. This means that the winding up commences when the
application has been duly lodged with the registrar of the
court.
[37]
Under section 341(2)
of the Act aforementioned every disposition of its property by a
company being wound-up and unable to pay its
debts made after the
commencement of the winding-up shall be void unless the court
otherwise orders.
[38]
It
has been held that the effect of section 348 is to establish the
concursus
creditorum
at the time when the application for winding-up is lodged. It has
been held further that section 341(2) of the 1973 Act proscribes
the
disposition of a company’s assets after the lodging of an
application to wind-up and that such disposition is void unless
the
court otherwise orders.
[11]
The legislation retrospectively avoids transactions that may have
been legitimate when they were entered into. Relief, however,
cannot
be granted to compel performance by an insolvent company after
commencement of a winding-up for the reason that such an
order would
create rights and obligations and render valid what had become
void.
[12]
[39]
Upon
the grant of a provisional order a
concursus
creditorum
is
established – the effect whereof is that the claim of each
creditor falls to be dealt with as it existed at the time when
the
provisional order was granted.
[13]
Put otherwise, once the
concursus
creditorum
is established the rights of creditors become vested and complete
[14]
which means that the power a court has under section 342(2) is only
exercisable in relation to dispositions made between the lodging
of
an application for winding-up and the grant of a provisional
order.
[15]
[40]
It is on the basis of
the aforementioned analyses that counsel for FRB submitted that it is
not competent for a trustee to assume
that a completed disposition be
treated as a nullity. He submitted that a trustee should accept the
legal position as he finds
it and must give effect thereto, unless
the trustee succeeds on motion brought in the proper manner to have
the disposition set
aside. The proceedings for the winding-up of
Soleil commenced on 10 June 2020 well before the present application
was launched
on 1 September 2020. Soleil therefore had the right and
the authority, prior to its liquidation, to bond the subject
properties.
[41]
At the date of the
commencement of the winding-up proceedings against Soleil the
position is that Soleil was the registered owner
of the subject
properties that were bonded in favour of FRB, the latter a secured
creditor whose rights are vested and complete.
[42]
The submission by FRB
that this court does not have the power to grant any relief to the
applicants that would constitute a disposition
of Soleil’s
property is not without merit. A transfer of the subject properties
as prayed for would amount to such a disposition.
[43]
I shall however
consider the further arguments on the basis that I may be mistaken in
regard to the conclusions arrived at as regards
the
in
limine
issues.
A simulated
transaction?
[44]
Against the background of the facts
summarised hereinabove applicants’ counsel submitted that the
circumstances in which the
subject properties were transferred to
Soleil bear the hallmarks of a simulated transaction in which the
intention to transfer
ownership was lacking. The simulation, he
contended, was to produce a title deed reflecting Soleil as the owner
of the subject
properties. The Trust and Soleil did so to thwart
pending execution proceedings.
[45]
Relying
on
CSARS v NWK Ltd
[16]
counsel submitted that the test for simulation is not solely limited
to intention – it goes further and requires an examination
of
the commercial sense of the transaction. On this leg of the test, he
contended that because Soleil was not in the business of
conducting
farming operations, it made no commercial sense for Soleil to have
acquired the properties. Indications elsewhere in
the applicants’
papers are that the Trust received no payment of the purchase price
for the reason that more than half was
paid directly to Viljoen Snr.
I pause to state that the latter consideration constitutes new matter
that surfaced in the replying
affidavit – this being contrary
to the prescript that the foundation of an applicant’s case
must be laid out in its
founding papers.
[46]
Two points need to be made about this
argument:
[47]
First,
the production of a title deed reflecting Soleil as the owner of the
subject properties could only have materialised if the
Trust and
Soleil consciously intended for ownership in the properties to be
transferred. On the material before this court, the
present is not a
case in which the participating parties were misled into changing
ownership – in which event the transfer
will be of no
effect.
[17]
The present is a
situation in which they acted in accordance with the intention to
give and receive and in doing so, to transfer
ownership. On this leg
of the test, the simulation argument fails.
[48]
Second, the applicants’ case in the
founding affidavit is based squarely on an asserted ‘fraudulent
and contrived stratagem’
employed by the protagonists of the
Trust and Soleil to asset-strip the Trust.
[49]
On this aspect the applicants are bound by
the case put forward in the founding affidavit and from what follows,
the simulation
argument fails.
[50]
The Applicants’ papers convey that
the Trust and Soleil fraudulently represented that Soleil would and
did assume ownership
of the subject properties and that this false
representation was made to FRB who acted thereupon to its own
detriment when it advanced
funds under security of a bond that would
be invalid.
[51]
It is trite that a party – in this
instance, the Trust – cannot rely on its own fraudulent conduct
to obtain relief.
[52]
In
ABSA
Bank Ltd v Moore and Another
[18]
,
Cameron J stated:
‘
Fraud
unravels all directly within its compass, but only between victim and
perpetrator, at the instance of the victim. Whether
fraud
unravels a contract depends on its victim, not the fraudster or third
parties.’
[53]
On the applicants’ version, the Trust
is not a victim but a perpetrator; and FRB (on their construction) is
a victim.
[54]
FRB correctly asserts that it does not rely
on any fraud.
Section
31
[19]
of the Insolvency Act
[55]
The section essentially provides for the
payment of a penalty by a party that was privy to a collusive
disposition/transaction entered
into before sequestration and which
had the effect of prejudicing creditors. The submission is made in
the applicants’ heads
of argument that if the transfer of the
properties is held to have been effective, then it was by collusion
between the Trust and
Soleil. Barring the amount of R1.1 million
applicants maintain that the Trust received nothing in return for the
sale of the subject
properties – the disposal of the properties
was to the prejudice of Trust creditors. Furthermore, even if the
full purchase
price of R4 million was paid it would nonetheless have
been to the prejudice of creditors for the reason that the properties
were
sold below their true value. The contention is that the loss
caused to the insolvent Trust estate shall be made good.
[56]
For reasons that follow reliance on section
31 is misplaced.
[57]
If it is assumed that this court were
inclined to set aside the sale and transfer of the properties, the
section does not clothe
the court with the power to order retransfer
of the subject properties. On a plain reading of the section the
applicants would
at best have a claim for the value thereof against
the insolvent estate of Soleil.
[58]
On
the other hand if it is assumed that this court does have the power
to order retransfer, the applicants have not indemnified
FRB against
the loss of its right against Soleil and its security as provided for
in section 33(1)
[20]
of the
Insolvency Act. There is, moreover, no allegation by the applicants
that FRB did not act in good faith in its dealings with
Soleil, nor
is it disputed that the sums advanced to Soleil were covered by the
security of a bond over the subject properties.
[59]
Accordingly, FRB is not obliged to restore
the benefit received (i.e. by way of cancelling the secured claim).
Section 20(9) of
the Companies Act
[60]
Section 20 of the Companies Act deals with
the validity of company actions.
[61]
Subsection 9 reads as follows:
‘
(9)
If, on application by an interested person or in any proceedings in
which a company is involved,
a court finds that the incorporation of
the company, any use of the company, or any act by or on behalf of
the company, constitutes
an unconscionable abuse of the juristic
personality of the company as a separate entity, the court may –
(a)
declare
that the company is to be deemed not to be a juristic person in
respect of any right, obligation or liability of the company
or of a
shareholder of the company or, in the case of a non-profit company, a
member of the company, or of another person specified
in the
declaration; and
(b)
make
any further order the court considers appropriate to give effect to a
declaration contemplated in paragraph (a).’
[62]
On its plain wording section 20(9) permits
a court to disregard the separate juristic personality of the company
where its incorporation,
use or any act performed by or on behalf of
the company constitutes an unconscionable abuse of its juristic
personality as a separate
legal entity.
[63]
Maintaining in the founding affidavit that
the section is applicable, the applicants’ recourse thereto
moves from the following
premises (I extrapolate from the founding
affidavit and in part from the summary in FRB’s heads of
argument):
(i)
the sale and transfer of the subject
properties are void, fraudulent and otherwise in want of legality and
fall to be set aside;
(ii)
section
20 (9) authorises a statutory basis for piercing the corporate veil
of otherwise separate and distinct legal entities and
provides a
court with a wide
[21]
discretion to make any appropriate order to give effect to a
declaration contemplated under the section;
(iii)
the present application, undeniably has its
genesis in an unconscionable abuse of the separate juristic
personality of Soleil;
(iv)
the unconscionable abuse manifests itself
in the fact that Soleil was always intended, interposed and utilised
as a conduit vehicle
through which Viljoen Snr aided by his sister
and one Bester (an attorney), siphoned off and unlawfully
misappropriated and dissipated
millions of Rand’s worth of
Trust assets in circumstances where both the Trust and Soleil were
seemingly but conduits for
Viljoen Snr;
(v)
this
was done in a manner envisaged in section 20(9) and in contravention
of the common law and the statutory provision
[22]
that a company must not carry on its business recklessly, with gross
negligence, with intent to defraud or for fraudulent purposes.
[64]
In
argument counsel for FRB submitted that the founding affidavit lacks
primary facts to substantiate the factual and legal conclusions
set
out therein. That this is immediately apparent even from a cursory
glance of the affidavit cannot be gainsaid. It is trite
that a party
has to plead with sufficient clarity and particularity the material
facts upon which it relies for the conclusions
of law it wishes the
court to draw from those facts – it is not sufficient to plead
the conclusion of law without pleading
the material facts giving rise
to it.
[23]
[65]
Furthermore, the deponent makes no mention
of the creditors of Soleil considering that their position would be
substantially affected
given the statutory basis of the relief
contended for. The applicants cannot claim the subject properties
without any obligation
towards creditors.
[66]
An
order under section 20(9) may be justified in circumstances such as
those in
City
Capital v Chavonnes Badenhorst
[24]
in which controllers of companies in a group had used those companies
for a dishonest or improper purpose and in that way drew
no
distinction between the separate juristic personalities of the
members of the group. In the present matter the converse is the
position. For the alleged fraudulent scheme to work it was at all
times imperative that the separate juristic personality of Soleil
be
used, recognised and maintained. A clear distinction between the
Trust and Soleil was therefore of cardinal importance; and
it is this
distinction which in my view goes to the very root of the intention
to transfer ownership of the subject properties
to Soleil.
[67]
Notwithstanding the case presented in the
founding affidavit, this with particular reference to section 20(9),
in argument counsel
for the applicants contended for the collapse of
the Trust into Soleil. Aside from this being a new case belatedly
introduced in
argument, the contention is unsustainable, and in reply
counsel correctly conceded that the founding affidavit was silent
thereover.
Bond cancellation
[68]
In
support of this relief it is contended in the applicants’ heads
of argument that the Trust did not consent to the registration
of a
mortgage bond over the subject properties. The trite position is that
only the true owner of immovable property can give consent
to the
registration of a mortgage bond over its property.
[25]
Because the Trust did not give such consent, FRB’s bond was not
validly registered. What puts paid to this argument is the
existence
of a duly signed resolution by the trustees of the Trust (Viljoen Snr
and Clarence Stander), in terms of which Viljoen
Snr was expressly
authorised to sign all relevant documents which may be necessary for
the registration of the transfer of the
subject properties into the
name of Soleil. It is significant that the applicants have not
addressed this issue.
[69]
It is stated in the founding affidavit that
the registration of the bond is founded on the factual supposition
that Soleil could
as lawful owner/purchaser of the subject properties
consent to the registration of the bond. In the same breath, it is
asserted
that neither Soleil, Ms Groenewald nor Viljoen Snr could
‘for the aforesaid reasons’ extend such consent, hence
there
was never any lawful basis on which the bond could be
registered. The ‘aforesaid reasons’ are not difficult to
discern
and include
inter alia
the (false) allegation that Viljoen Snr was not authorised to effect
the transfer and that the purchase price was not paid for
the subject
properties. Beyond these reasons, which have been disputed by FRB in
its fourth affidavit (filed without objection
in response to new
matter raised in the applicants’ reply), there are no primary
facts to support the assertion made by the
deponent to the founding
affidavit.
[70]
It
is not in issue that the formalities attendant upon the transfer of
the subject properties to Soleil had been complied with,
that they
were accepted by the Registrar of Deeds, and that transfer had been
effected in the deeds registry. In circumstances
such as these, where
a formally valid transfer had occurred – and although it could
be challenged on a number of grounds
– the transfer remains
valid until set aside by an order of court.
[26]
[71]
For the above reasons the bond cancellation
relief contended for by the applicants is not competent.
[72]
Before concluding this judgment, I turn to
address the issue of reserved costs. Counsel for FRB submitted that
such costs should
be awarded to FRB. Save for a date 13 October 2020
appearing in manuscript on the cover of the court file, the material
on file
is insufficient for determining the circumstances that
occasioned a reserved costs order. Indeed, this issue was not
canvassed
in oral argument nor in the parties’ heads of
argument. As I find no evidence of a court order to this effect, and
given
the paucity of information to hand, my sense is that it is
preferable to make no order in this regard.
[73]
In the result, the application is dismissed
with costs.
M. S. RUGUNANAN
JUDGE
OF THE HIGH COURT
APPEARANCES:
For
the Applicants:
H A van der Merwe
Instructed
by
Van Der Merwe Doring Maponya Associates Inc
Applicants’
Attorneys
c/o Huxtable Attorneys
Makhanda
(Ref: O. Huxtable)
Tel: 046-622 2961
For
the Third Respondent: L. M. Olivier SC
Instructed
by
De Klerck & Van Gend Inc.
Third Respondent’s
Attorneys
c/o Rushmere & Cole
Inc.
Makhanda
(Ref: M Van Der Veen)
Tel: 046-622 7005
Date
heard:
27 October 2022
Date
delivered:
26 January 2023
[1]
Act 24 of 1936.
[2]
Plascon-Evans Paints (Pty) Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 634E-635C
[3]
Act 61 of 1973
[4]
Reliance initially placed on section 34 and section 26 of the
Insolvency Act, was abandoned during argument.
[5]
71 of 2008.
[6]
Murphy N.O and Benjamin N.O. v Semphill and Others
1954 (3) SA 450
(WLD) at 451E.
[7]
Goldseller v Hill
1908 TS 822
at 827.
[8]
Millman N.O. v Goosen
1975 (3) SA 141
(O) at 145A-C.
[9]
Murphy N.O and Benjamin N.O. v Semphill and Others supra
[10]
Act 61 of 1973
[11]
[2021] ZAWCHC 20
para
[12]
International Shipping Company Ltd v Affinity Ltd
1983 (1) SA 79
(CPD) at 84H-85H.
[13]
Pride Milling CO (Pty) Ltd v Bekker NO and Another
2022 (2) SA 410
(SCA) para 19.
[14]
Pride
Milling
supra
para 16.
[15]
Pride
Milling
supra
para 31.
[16]
[2011] 2 All Sa 347 (SCA)
[17]
ABSA Bank Limited v Moore and another
2016 (3) SA 97
(SCA) para 27.
[18]
[2016] ZACC 34
para 39.
[19]
Section 31 reads as follows: 'Collusive dealings before
sequestration -
(1)
After the sequestration of a debtor's estate the court may set aside
any transaction entered into by the debtor before the
sequestration,
whereby he, in collusion with another person, disposed of property
belonging to him in a manner which had the
effect of prejudicing his
creditors or of preferring one of his creditors above another. (2)
Any person who was a party to such
collusive disposition shall be
liable to make good any loss thereby caused to the insolvent estate
in question and shall pay
for the benefit of the estate, by way of
penalty, such sum as the court may adjudge, not exceeding the amount
by which he would
have benefited by such dealing if it had not been
set aside; and if he is a creditor he shall also forfeit his claim
against
the estate. (3) Such compensation and penalty may be
recovered in any action to set aside the transaction in question.'
[20]
Section 33 reads as follows: 'Improper disposition does not affect
certain rights -
(1)
A person who, in return for any disposition which is liable to be
set aside under section twenty-six, twenty-nine, thirty,
or
thirty-one, has parted with any property or security which he held
or who has lost any right against another person, shall,
if he acted
in good faith, not be obliged to restore any property or other
benefit received under such disposition, unless the
trustee has
indemnified him for parting with such property or security or for
losing such a right. (2) Section twenty-six, twenty-nine,
thirty, or
thirty-one shall not affect the rights of any person who acquired
property in good faith and for value from any person
other than a
person whose estate was subsequently sequestrated.'
[21]
A court is given ‘the widest powers to grant consequential
relief’:
Ex
parte
Gore and Others NNO
2013 (3) SA 382
(WCC) para 34.
[22]
i.e. section 22(1) of Act 71 of 2008.
[23]
Trope and Others v SARB
[1993] ZASCA 54
;
1993 (3) SA 264
(AD) at 273A-B.
[24]
2018(4) SA 71 (SCA) para 30.
[25]
ABSA Bank Limited v Moore and another
supra
para 39.
[26]
Knysna Hotel CC v Coetzee
[1997] ZASCA 114
;
1998 (2) SA 743
(HHA) at 754B-C.