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[2022] ZAFSHC 181
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Dippenaar N.O. and Others v Noordman N.O. and Others (2949/2022) [2022] ZAFSHC 181 (26 July 2022)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No:
2949/2022
In
the matter between:
JOHANNES
OLIVIER DIPPENAAR N.O.
1
st
Applicant
MARTHA
MAGDALENA DIPPENAAR N.O.
2
nd
Applicant
JOHANNES
JOSIAS VAN WYKN N.O.
3
rd
Applicant
and
O
A NOORDMAN
N.O.
1
st
Respondent
N
KRUGER
N.O.
2
nd
Respondent
HTA
AFSLAERS (PTY) LTD in corroboration
with
VENDITOR AUCTIONEERS
3
rd
Respondent
I
M KARAN t/a KARAN
BEEF
4
th
Respondent
FIRSTRAND
BANK
5
th
Respondent
BADENHORST
ATTORNEYS
6
th
Respondent
MASTER
OF THE HIGH COURT OF
SOUTH
AFRICA
7
th
Respondent
CORAM
:
VAN RHYN, J
HEARD
ON
:
28 JUNE 2022
DELIVERED
ON
:
28 JUNE
2022
REASONS
was handed down electronically by circulation to the parties’
representatives by email, and release to SAFLII. The date and
time
for hand-down is deemed to be 12:00 on 26 JULY 2022.
[1]
On 28 June 2022 I made an order in the following terms in this
matter, which came before me as
an urgent application:
“
It
is ordered that:
1.
Condonation is granted in terms of rule 6(12)(a) for non-compliance
with the
rules relating to form,
service and time periods.
2.
The First, Second and Third Respondents are interdicted and
prohibited
from auctioning or selling any of the property in the
insolvent Estate of Geduld Boerdery Trust (B71/2021) at the auction
scheduled
to be held on 29 June 2022.
3.
Reasons will be delivered in due course.”
THE PARTIES
[2]
The three applicants are the trustees of the Geduld Boerdery Trust It
325/2008. The Geduld Boerdery
Trust was finally sequestrated on 21
October 2021 (the “insolvent trust”). The first and
second respondents, Ottlie
Anton Noordman and Nicole Kruger are cited
in their capacities as duly appointed Trustees of the insolvent
trust. The third Respondent
is HTA Afslaers (PTY) LTD,
a
company which in corroboration with Venditor Auctioneers received
instructions to offer for sale, per public auction, the insolvent
trust’s moveable and immovable assets which includes a farm
described as Portion [....] of the Farm [....] G
[....],
J [....] (the “farm G [....]”)
[3]
The fourth respondent is Ivor Michael Karan t/a Karan Beef. The fifth
respondent is FirstRand
Bank Limited t/a First National Bank. The
sixth respondent is P H H Badenhorst incorporated t/a Badenhorst
Attorneys. The fourth,
fifth and sixth respondents are proven
creditors of the insolvent trust.
[4]
The seventh respondent is the Master of the High Court, Bloemfontein.
No relief is claimed against
the fourth to seventh respondents. The
urgent application was opposed by the first and second respondents.
The application was
issued on 27 June 2022. On 28 June 2022, at
approximately 12h45, the notice to oppose and “provisional
opposing affidavit”
by the first and second respondents were
filed. The urgent application was heard at approximately 14h00. Mr
Gilliland, instructed
by Van der Berg Van Vuuren Attorneys, appeared
on behalf of the first and second respondents. Mr Coetzee of
Steenkamp & Jansen
Attorneys appeared on behalf of the
applicants.
[5]
The first and second respondents disputed the urgency of the matter
and asked that the applicants’
application be struck off the
roll for lack of urgency with a costs order. In this regard it was
contended that the second meeting
of creditors of the insolvent trust
was held on 13 May 2022. By the end of May 2022, at least, the
applicants knew about the pending
sale and auction to be held on the
29
th
of June 2022. Mr Gilliland therefore argued that the
applicants failed to provide an explanation for the delay in bringing
the
application on the basis that the third respondent had already
advertised the sale of the insolvent trust’s property on 25
May
2022.
[6]
Regarding urgency, it is apposite to state the factual
background circumstances of the matter.
On 30 May
2022 Mr Coetzee addressed a letter to the first respondent to enquire
the basis upon which the auctioneers received authorisation
to
advertise the auction as
no resolution was passed authorising
the trustees to sell the property of the insolvent trust. In his
letter Mr. Coetzee referred
to section 82(1) of the Insolvency Act,
Act 24 of 1936 (the “Insolvency Act”).
[7]
On 1 June 2022 the first respondent replied
that
the contents of the Minutes of the Second Meeting of Creditors is
rather confusing and conflicting in that no clear resolution
was
passed. However, first respondent replied that all the proven
creditors were made aware of the offer to purchase the farm G
[....]
and that all the proven creditors are in agreement that,
notwithstanding the offer to purchase, the auction should proceed
as
advertised.
[8]
Notice of a General Meeting to be held on 24 June 2022 at Jacobsdal
to have a resolution adopted
inter alia
to ratify all actions
taken by the trustees to date, is the further reason why the urgent
application was delayed in order to first
ascertain whether any such
resolutions will be adopted. However, the General Meeting did not
proceed due to improper notification
thereof in terms of the
Insolvency Act and therefore no such resolution was adopted.
[9]
The applicants could only proceed to draft the urgent application
subsequent to the outcome of
the General Meeting of Creditors
scheduled for 24 June 2022. I found the matter to be urgent, as I was
of the view that if I did
not hear the matter, the applicants would
not be afforded substantial redress at a hearing in due course. This
matter concerns
the sale per auction of moveable and immovable assets
which also included game, scheduled to take place the following day.
[10]
The first and second respondents further took
another point
in limine
pertaining to the
locus
standi
of the applicants to bring their
application.
Mr. Gilliland contended that the first and second
applicants’ personal estates were also finally sequestrated by
an order
of this court on 21 October 2021. The applicants should have
cited Mr Donovan Majiedt of Honey Attorneys in Bloemfontein, as the
trustee in their personal estates, in this urgent application.
[11]
The insolvent trust’s assets were vested in the first and
second respondents on their appointment by
the Master. Mr Gilliland
therefore argued that the first and second applicants, as
unrehabilitated insolvents, do not have the
necessary
locus standi
to protect the property of the insolvent trust.
[12]
Mr Coetzee referred to
Jordaan
v Richter en Ander
[1]
and
Muller
v De Wet N.O.
[2]
and argued that the applicants, as trustees of the insolvent trust,
retains a reversionary interest in the administration of the
estate
of the insolvent trust due to the possibility that any surplus of
realised assets over liabilities may accrue to the trust
and its
beneficiaries. I was satisfied that the applicants as the trustees of
the trust have, as persons interested therein, a
limited right to
approach the court regarding the administration of the estate of the
insolvent trust because of the allegation
that there has been an
irregularity or failure to comply with the provisions of the
Insolvency Act on the part of the first and
second respondents.
[3]
THE
SALIENT FACTS.
[13]
S
ubsequent to the appointment of the first and second
respondents as trustees of the insolvent trust, the Master convened
the First
Meeting of Creditors on 5 February 2022. The first and
second applicants attended the First Meeting of Creditors on the
request
of the provisional trustee. At this meeting the fourth
respondent’s claim was approved. The first and second
respondents
thereafter gave notice of the Second Meeting of Creditors
to be convened at Jacobsdal on 13 May 2022. The first and second
applicants
attended this meeting on request of the first respondent.
[14]
The first and second respondents did not attend the Second Meeting of
Creditors. Claims of the fifth and
sixth respondents, who were
represented at the meeting, were proved at the Second Meeting of
Creditors. The fourth respondent was
not represented at the Second
Meeting of Creditors. Only the fifth and sixth respondents were
present to vote on the proposed resolutions
or to provide the first
and second respondents with alternative directives.
[15]
At the Second Meeting of Creditors the representative of the
applicants made the creditors, who were present
at the meeting, aware
of the fact that an existing purchase agreement in respect of the
immovable property of the insolvent trust
was not referred to in the
trustees’ report. The presiding officer, E J van der Westhuizen
noted in the “Minutes of
Proceedings” that Mr. Badenhorst
does not accept the report by the trustees. The following appears
from the Minutes of Proceedings:
“
4.
Proposed Resolutions”
4.1
Voting for acceptance: Creditors numbered:
Die Kurator moet die
transaksie behoorlik ondersoek en terugvoering gee aan krediteure.
Krediteur 2 stem teen die voorgestelde resolusie.
4.2 Proposed
Amendments:
Voting for Acceptance:
Creditors numbered:
Die Kurator moet die
transaksie behoorlik ondersoek en terugvoering gee aan krediteure.”
[16]
According to the applicants the representative of the fifth
respondent did not vote to either adopt or reject
the proposed
resolution. Only the sixth respondent voted against the resolution.
The first and second respondents did not attend
the meeting and in
the absence of any request for a further postponement, the presiding
officer closed the meeting.
[17]
Mr. Coetzee argued that clear directions were provided by the
creditors present at the Second Meeting of
Creditors to the first and
second respondents to investigate the offer to purchase the farm G
[....]. Therefore, the notice of
the auction scheduled for 29 June
2022 was premature and unauthorized. The decision to proceed with a
sale of the insolvent trust’s
assets is contrary to the
directions given by the creditors at the Second Meeting of Creditors
held on 13 May 2022.
[18]
Mr Gilliland contended that the adjudication of this application
turns on the interpretation of the provisions
of section 82(1) of the
Insolvency Act.
THE
APPLICABLE LEGAL PRINCIPLES AND CASE LAW
[19]
The general rule is that the trustee is vested with the insolvent’s
estate, including the latter’s
property, rights and
obligations. On his appointment, that is, after confirmation of his
or her election and delivery to him or
her of a certificate of
appointment,
[4]
the insolvent’s assets vests in the trustee(s).
[20]
The trustee should not as a rule sell any of the estate’s
assets until the second meeting of creditors
has been held.
[5]
A trustee should not proceed with the administration or liquidation
of the estate until creditors have had an opportunity to give
him/her
directions how to proceed. Consequently, as soon as the trustee is in
a position to do so, he should convene the second
meeting of
creditors by notice in the Government Gazette and thereat (or at an
adjourned second meeting with the Master’s
written permission
obtained prior to the second meeting, or within one month after the
acceptance of an offer of composition in
terms of the Act) submit a
full written report on those affairs and transactions and on any
matter of importance relating to the
insolvent or the estate and more
specifically in regard to
[6]
-
(a)
the assets and liabilities thereof;
(b)
the cause of insolvency;
(c) the
books of the insolvent, stating in what respects (if any) the record
(if any) of transactions is insufficient,
or defective or incorrect;
(d) the
transactions of the insolvent prior to sequestration and what reason
(if any) there is to suppose that
the insolvent has been guilty of an
offence;
(e) any
allowance he has made for the insolvent regarding his support and his
reasons for do so doing;
(f)
any business he may have been carrying on behalf of the estate, any
goods he may have purchased for
that business and the result of such
carrying on of that business;
(g) any
legal proceedings by or against the estate which were suspended by
the sequestration which may be pending
or threatened against the
estate;
(h) any
uncompleted contract entered into by the insolvent for the
acquisition of the immovable property or any
current lease entered
into by the insolvent as lessee;
(i)
any matter affecting the administration or realisation of the estate
which requires the direction of
creditors.
[21]
Such report should be prepared in triplicate and lodged with the
officer presiding at the meeting, who should
annex the original to
the minutes thereof.
[7]
At least 14 days before the advertised date of the second meeting the
trustee must send to creditors whose names and addresses
he knows, a
copy of the report and of the inventory received by him from the
deputy- Sheriff. The trustee must submit any recommendations
regarding resolutions or directions which he thinks ought to be
passed or given by creditors.
[8]
[22]
Section 81(3) provides as follows:
“
(a)
The
creditors may
, at the meeting in question,
direct what
action shall be taken by the trustee in respect of any matter
reported to them under paragraph (e), (f), (g), (h) or
(i) of
subsection (1)
.
(c)
If no directions have been given by the creditors at the second
meeting of creditors,
any resolution or direction alleged in the
affidavit referred to in paragraph (a) of subsection (1)
bis
to
have been recommended to the creditors of the estate and which could
lawfully have been passed or given by the creditors at
such meeting
shall, if the Master so approves, be deemed to have been passed or
given, as the case may be, by the creditors at
such meeting.
(d)
Subject to the provisions of this Act, the Master may, if no
directions have been
given by the creditors at the second meeting of
creditors, in addition to any resolution or direction approved of by
him under
paragraph (b) or if no such a resolution or direction has
been so approved of, give such directions relating to any matter
reported
to the creditors under subsection (1) or to the
administration or realisation of the estate as he thinks fit.
(d)
Notwithstanding the provisions of subsection (3) of section 53,
any
resolution or direction approved under paragraph (b) and any
direction given by the Master under paragraph (c) shall be binding
upon the trustee
.” (emphasis added)
[23]
For purposes of the adjudication of this matter the contents of
section 81(3) of the Act read with the contents
of section 82 is of
importance. Section 82 reads as follows:
“
(1)
Subject to the provisions of section
eighty-three
and
ninety
the trustee of an insolvent estate shall, as soon as he is
authorised to do so at the second meeting of the creditors of that
estate,
sell all the property in that estate in such manner and upon
such conditions as the creditors may direct
: Provided that if any
rights acquired from the State under a lease, licence, purchase, or
allotment of land is an asset in that
estate, the trustee shall, in
his administration of the estate, act in accordance with those
provisions (if any) which by the law
under which the rights were
acquired, are expressed to apply in the event of the sequestration of
the estate of the person who
acquired those rights: Provided that if
the creditors have not prior to the final closing of the second
meeting of creditors of
that estate given any directions the trustee
shall sell the property by public auction or public tender. A sale by
public auction
or public tender shall be after notice in the Gazette
and after such other notices as the Master may direct and in the
absence
of directions from creditors as to the conditions of sale,
upon such conditions as the master may direct.” (emphasis
added)
DISCUSSION
[24]
One of the most important duties that requires the trustee’s
attention pertains to the realisation
of the insolvent estate’s
assets. After consideration of the trustee’s report and
documents submitted therewith, it
is competent for creditors to give
such directions as to the future administration of the estate to the
trustee.
[9]
If the creditors fail to do so, any proposed resolution or direction
referred to in the trustee’s affidavit submitted to
the
Presiding Officer, if lawful, is and if the Master approves, deemed
to have been passed or given by the creditors. If no direction
have
been given by creditors and there is no proposed resolution or
direction for the Master to approve, the Master may give directions
relating to any matter reported to creditors, or as to the
administration or realisation of the estate, as he thinks fit.
[10]
[25]
A trustee occupies a position of trust, not only towards creditors
but also towards the insolvent himself,
or as in this matter the
insolvent trust. Even though the trustee must primarily act in the
best interest of creditors, he must
also have regard to the interests
of the insolvent where these interests are not in conflict with the
interest of creditors.
[11]
Mr Gilliland argued that it is clear from the contents of the Minutes
of the Second Meeting of Creditors that the presiding officer
closed
the meeting. It is contended on behalf of the first and second
respondent that, on the basis that the creditors did not,
prior to
the final closing of the second meeting of creditors give any
directions, the trustees will sell the property by public
auction or
public tender. The trustees published the notice of the advertisement
of the auction in the Government Gazette. The
presiding officer sent
the minutes of the meetings to the Master who has been in possession
of the minutes for approximately six
weeks. The fact that the Master
has not given any directions is a clear indication that he does not
intend to exercise his discretion
that he has in that regard.
[26]
It was furthermore argued on behalf of the first and second
respondents that the third requirement that has
to be met, as it is
envisaged in section 82(1) of the Act, is that the trustees must
obtain directions from the creditors regarding
the conditions of
sale. It is contended that the trustees enquired from the fourth and
fifth respondents, who are the major creditors
in both number and
amount, regarding the conditions of sale and thus has met the third
requirement envisioned in Section 82(1)
of the Act. It is therefore
argued that the first and second respondents have met all the
requirements envisioned in section 82(1)
and as a result the sale
should proceed as scheduled.
[27]
It was furthermore argued by the first and second respondents that
the first respondent had already investigated
the allegation of an
offer to purchase the property of the insolvent trust for an amount
of R23 645 000.00 by the time
the second meeting of
creditors took place. The court was referred to a string of e-mails
and letters appended to the answering
affidavit from which it is
evident that the second applicant, referred to a purchase agreement
during September 2021 and since
then several further allegations that
“offers to purchase” the farm G [....] were made. On
behalf of the first respondent
it is therefore submitted that the
so-called “offers to purchase” the property of the
insolvent trust are not
bona fide
and the allegations are made
solely in an attempt to delay and frustrate the sequestration
proceedings.
[28]
Appended to the first and second respondents answering affidavit, is
the approved conditions of sale which
provide for a confirmation
period after conclusion of the auction. Both the fourth and fifth
respondents have, in writing, agreed
to an extension of the period
for confirmation of the purchase price to 5 August 2022. The first
respondent indicated that he shall
cause the revised conditions of
sale to be communicated before the auction commences and shall more
over cause any contract of
sale to be amended accordingly.
[29]
The first and second respondents argued that this approach will have
the consequence that the applicants
will have until 5 August 2022
within which time they and the proposed purchaser may raise the money
that has not been forth coming
and to pay it over to the transferring
attorney to ensure that the farm G [....] be sold at the highest
price.
[30]
The legal framework regarding the authority to sell the insolvent
estate’s property is explained as
follows by Jafta J (
dissenting judgment)
N
J Swart v Starbuck and Others:
[12]
“
[53] For a better
understanding of the issue, it is necessary to begin by outlining the
relevant statutory provisions. Lying at
the heart of the matter are
provisions of the Act which divest insolvent persons of their estates
and vest them in the Master of
the High Court (Master) until a
trustee is appointed, at which stage the estate vests in the trustee.
This position is triggered
by an order that sequestrates the estate
of an insolvent person. From the moment such order is granted, the
insolvent person may
not deal with or dispose of assets in his or her
estate. The authority to exercise rights in respect of the estate
property vests
in the Master until a trustee is appointed. On the
appointment of the trustee, that authority relocates to the trustee.”
And
further,
“
[55] The authority
contemplated in section 18(3) is a valid authority. This means that
for a provisional trustee to sell assets
of the insolvent estate, he
or she must be in possession of a valid authority from a court or the
Master, empowering him or her
to sell the property in question.
Section 80
bis
outlines a process to be followed in obtaining
authority from the Master. Briefly, this section prescribes a
jurisdictional fact
which must be in place before the Master issues
approval. It requires the trustee to furnish the Master with a
written recommendation
incorporating reasons why authority to sell is
sought. I return to this issue later.”
[56] Section
82(1) is the other provision that governs a sale of assets of the
insolvent estate. However,
this provision applies to a sale
authorised by creditors at the second meeting of the creditors. It
requires a trustee to sell
all the property in the insolvent estate
upon being authorised to do so and to act in terms of a direction
issued by creditors
at the meeting in question.
Section 82(8)
protects innocent purchasers of assets against liability arising from
a sale conducted in contravention of section
82.” (emphasis
added)
[31]
The issue that needs to be determined is whether the
trustees had been authorised to sell the assets of the insolvent
trust by the creditors at the second meeting, alternatively after the
second meeting of creditors or whether the Master has granted
authorisation to sell the assets of the insolvent trust. In a letter
by the first respondent, dated 1 June 2022 and addressed to
Mr
Coetzee, it is noted that the contents of the Minutes of the Second
Meeting of Creditors are unclear and confusing. The first
respondent
furthermore states that: “The Trustees take instructions from
proven creditors based on number and value”
According to the
first respondent’s letter the issue regarding the offer to
purchase the farm G [....] has been made known
to the proven
creditors and that the creditors are in agreement that the auction
should proceed. The first respondent furthermore
replied that the
creditors “did not give any direct instructions to the
Trustees, per resolution, in respect of the sale
of assets, meaning
the manner in which the assets are to be sold and the minutes are
silent on that aspect”.
[32]
Mr Coetzee replied on 6 June as follows:
“
The content of
paragraph 4 would not have been confusing and conflicting if any of
the trustees attended the meeting. The second
creditor after learning
about the offer to purchase on(sic) the trust immovable property for
a purchase amount, which would settle
all claims of proven creditors
if registered, directed the trustees to investigate the transaction
and to report back to the creditors.
The second creditor thereafter
voted not to adopt the proposed resolution of the Trustees, attached
to the report, until such time
that the trustees complied with the
directive.”
[33]
From the contents of the above reply it is obvious that the recording
of the resolutions passed at the Second
Meeting of Creditors are
indeed confusing and unclear. What is however clear is that the
trustees were instructed to investigate
the offer to purchase the
assets of the insolvent trust and to report to the creditors on their
findings. I therefore agree with
the submission made on behalf of the
applicants that no resolution to proceed with the sale of the assets
of the insolvent trust
was passed prior to the closing of the second
meeting of creditors.
[34]
Appended to the founding affidavit is a letter dated 22 June 2022
from Smart House Afrika (Pty) LTD confirming
that NVC Fund Holding
Trust has approved substantial funding for various property
development projects which includes the full
purchase price of
R23 645 000.00 for “Leswale Game Lodge in G [....]”,
Free State Province, the property
of the insolvent trust. It is
furthermore stated that the funding has to be cleared which is
anticipated to be completed within
31 working days from 22 June 2022.
The response from the first and second respondents was that the
applicants, during June 2021
in their answering affidavit in opposing
the application to sequestrate the trust, already indicated that
prospective purchasers
were interested in purchasing the farm G
[....]. In fact, several different entities have since 2014 presented
offers to purchase
the farm and nothing has come of these averments
to settle all debts and to avoid the process of sequestrating the
trust and selling
off its assets. Therefore, no reliance can be
placed on any offer to purchase the property of the insolvent trust.
[35]
Even though the first respondent may be correct in his
assumption that nothing will come of the latest offer to
purchase the
farm G [....], and that the allegation of such offer is merely an
attempt to frustrate and delay the process, I am
of the view that a
resolution was adopted in terms whereof the trustees had to
investigate such offer to purchase and report back
to the creditors,
alternatively such directive was made by the presiding officer who
acted as the representative of the Master
at the meeting. To my mind
the first and second respondents have to comply with the directions
provided at the Second Meeting of
Creditors. The first and second
respondents’ reliance on the fact that the Master has not given
any directions in the period
since the minutes of the Second Meeting
of Creditors had been submitted, is not in accordance with the
contents of the report submitted
by the Master shortly prior to the
hearing of this application. The contents of the Master’s
report dated 28 July 2022 reads
as follows:
“
2.
I am the seventh respondent in this matter and since no relief is
sought against me I do not intend to
oppose the application.
3.
I do however wish to bring the following information to the attention
of the Honourable Court, namely:
3.1
The first and second respondents did not approach my office
for
directions in terms of
section 82(1)
of the
Insolvency Act, 24 of
1936
.
3.2
In the Government Gazette of 27 May 2022 notice was given of
a
meeting in terms of
section 41
or
42
of the
Insolvency Act,
supra
,
to take place before the Magistrate Jacobsdal, on 24 June 2022. The
purpose of the meeting was for the proof of further claims,
to accept
the trustee’s report, to adopt resolutions and to proceed with
an enquiry. I am not sure if the meeting indeed
took place as my
office has not yet been placed in possession of the minutes.
4.
I have no further information which could be of assistance to the
Honourable Court. I abide by the decision
of the Honourable Court.”
[34]
Clearly the Master took note that a meeting was scheduled to take
place on 24 June 2022 and awaited the outcome
of that meeting. The
Master has not been informed that the meeting did not take place. It
is alleged that the trustees’ report
did not contain any
information regarding the purported offer(s) to purchase the farm
(and other assets) of the insolvent trust
and that subsequent to
being so informed at the Second Meeting of Creditors, at least Mr
Badenhorst, on behalf of one of the creditors
indicated that he voted
against all the proposed resolutions being passed during the meeting
held at Jacobsdal based on the fact
that he did not have information
regarding the agreement of sale referred to by Mr Coetzee. It is
clear from the contents of the
email appended to the answering
affidavit from Mr Badenhorst, that further information is requested
to enable the creditors “to
consider our options herein”
Only after consideration of the trustees’ report and documents
submitted therewith is
it competent for creditors to give directions
as to the future administration of the estate.
[35]
From the contents of the Minutes of the Second Meeting of Creditors
it can be gathered that the proposed
resolutions or directions in the
trustees’ report were not passed. I therefore assume that a
follow-up general meeting was
scheduled to take place at Jacobsdal on
24 June 2022 to have resolutions adopted and to ratify all actions
taken by trustees to
that date. This meeting did not take place. “It
is wrong of a trustee to endeavour to hold the sale of the estate
assets
against the express wishes of creditors”
[13]
To my mind the resolution passed at the Second Meeting of Creditors
were recorded as that the trustees need to investigate the
offer to
purchase the property of the insolvent trust and to report to the
creditors in this regard. Only if no directions have
been given by
creditors and there is no proposed resolutions or direction for the
Master to approve, the Master may give directions
relating to any
matter reported to creditors, or as to the administration or
realisation of the estate, as he thinks fit.
[36]
The trustees did not obtain any directions from the
Master and therefore any resolution of creditors as recorded
in the
minutes of the meeting is binding on the trustees in so far as it is
a direction to the trustees
[14]
and a trustee who acts contrary to any such resolution may be
interdicted from so doing.
[15]
The creditors did not ask the opinion of the trustees regarding the
proposed agreement of sale of the assets of the insolvent trust.
The
creditors present at the second meeting of creditors did not have any
information regarding the previous or current offers
to purchase the
farm Groenlvei due to the failure of the trustees to record such
offers in the Trustees’ Report. The resolution
passed at the
second meeting of creditors was to provide the creditors with a full
written report on the affairs and transactions
relating to the
insolvent trust’s estate which would include all the necessary
information regarding the previous and current
offers to purchase the
farm (and other assets of the farm G [....]) with a view of providing
the creditors with the relevant information
to make an informed
decision regarding the procedure to be followed which would obviously
be to the benefit of the creditors and
the insolvent trust. It is
common cause that the first and second respondents have, at the time
of the hearing of this application,
not yet been authorized to sell
the property of the insolvent trust.
[37]
As a result I was satisfied that the applicants made out a proper
case to stop the auction to proceed on
the following day on the basis
that neither the creditors agreed to the sale per auction of the
assets of the insolvent trust nor
did the trustees obtain the
direction of the Master to proceed with the sale of the insolvent
trust’s assets.
[38]
As to the issue of costs, the applicants did not ask for a costs
order and no costs order was thus made.
VAN
RHYN J
On behalf of the
Applicant:
MR R COETZEE
Instructed
by:
STEENKAMP JANSEN ATTORNEYS
BLOEMFONTEIN
On behalf of the 1
st
& 2
nd
Respondent:
ADV. J GILLILAND LOUW
Instructed
by:
NOORDMANS ATTORNEYS
BLOEMFONTEIN
[1]
1981(1) SA 490 (O).
[2]
2001 (2) SA 489 (WLD).
[3]
Jacobs v Hessels
1984 (3) SA 601
(T) at 604; Mookrey v Smith NO and
Another
1987 (1) SA 332(CPD)
at 335.
[4]
Section 56(2)
[5]
Section 18(3).
[6]
Section 81(1)
; Thorne v the Master
1964 (3) SA 38
(N) at 45.
[7]
Regulation 2.
[8]
Section 81(1)(bis)
(a).
[9]
Section 81
(3) (a).
[10]
Section 81(3)(c).
[11]
Jacobs v Hessels
1984 (3) SA 601
(T) at 605G.
[12]
2017 ZACC 23
at
[53]
[13]
Mars: The Law of Insolvency in South Africa, (Ninth Ed) 15.17 page
331 - 332
[14]
Section 53(3)
; De Jager’s Trustees v the Master
1918 CPD 535
;
Consolidated Caterers Ltd v Patterson NO
1960 (4) SA 194
(E); Thorne
v The Master
1964 (3) SA 38
(N).
[15]
Doornbruck v Doornbruck’s Trustees 17 CTR 1135.