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[2022] ZAECMHC 25
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Ngcingwana v Ngcingwana and Others (4341/2019) [2022] ZAECMHC 25 (26 July 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE LOCAL DIVISION :
MTHATHA
CASE
NO.: 4341/2019
In
the matter between:
THINA
NGCINGWANA
Applicant
and
SONWABO
DUMISANI NGCINGWANA
1
st
Respondent
THE
MASTER OF THE HIGH COURT,
MTHATHA
2
nd
Respondent
FINEPROPS
1142
CC
3
rd
Respondent
THE
COMPANIES AND INTELECTUAL
PROPERTIES
COMMISSION
4
th
Respondent
THE
SHERIFF OF THE HIGH COURT
MTHATHA
5
th
Respondent
JUDGMENT
GRIFFITHS,
J.:
[1]
I am seized with an interlocutory application pursuant to the
provisions of Rule 35(13).
The application has been strenuously
opposed by the first respondent only, with the Master having
indicated that he abides the
decision of the court.
[2]
The applicant, in her capacity as executor in the deceased estate of
the late P M
Ngcingwana, instituted an application on 12 November
2019 seeking certain relief relating to a member’s interest in
the third
respondent Close Corporation (“the main
application”). The main application was also opposed by the
first respondent
who, in addition, instituted a counter application
seeking a review of the Master’s earlier decision to remove him
as executor
in the estate, together orders that he be reinstated and
that the applicant be removed as executor. The counter application is
opposed by the applicant. It is the counter-application which has
spawned this interlocutory application and it has been made clear
therein as emphasized by Mr. Paterson (who appeared on behalf of the
applicant) that it is only as against the counter-application
that
the interlocutory application is directed.
[3]
The matter has a long and rocky history. I do not intend to go into
it in any detail
save to state that the deceased died during 2001 and
the first respondent was appointed by the Master as executor on 4
April 2001.
Standard Executors and Trustees assisted him as agents in
the administration of the estate until their resignation during
September
2009. During 2013 the Master made application to this court
seeking to remove the first respondent as executor. This was
dismissed
but ultimately an order was issued by the court instructing
the Master to convene a meeting on 22 November 2013 at which the
heirs
to the estate were to be present together with the respondent
and/or his representative. The purpose of the meeting was to expedite
the liquidation and distribution of the estate.
[4]
At that meeting the first respondent was represented by his attorney,
Mr. Potelwa,
and certain resolutions were finalized. In his report,
filed in terms of the provisions of Rule 53 in the counter
application,
the Master referred to this meeting and annexed,
inter
alia
, the minutes thereof which reflected such resolutions and
undertakings. Despite this, and on 29 October 2018, the Master
removed
the first respondent as executor and duly appointed the
applicant in his stead. It seems from his report that the Master did
this
largely because the first respondent failed to comply with the
resolutions or agreements which were adopted.
[5]
In the counter-application, the first respondent contended that he
had diligently
performed as executor and that the Master had had no
grounds for removing him. He contended that he regularly submitted
liquidation
and distribution accounts but that certain queries were
raised by the Master. A liquidation and distribution account was
submitted
in 2015 but the first respondent complained concerning
various queries raised thereanent by the Master. There were
complaints about
a certain delays caused by the necessity to purchase
a house for the deceased’s widow and difficulties which had
arisen concerning
the terms of a trust which was to be used as a
vehicle for the purchase of this house. He further stated that
demands were made
by the Master to which he responded and that he was
never informed of his removal as executor but only gained knowledge
thereof
from a letter sent by the applicant’s erstwhile
attorneys. He also maintained that he did not receive a notice from
the Master
prior to the decision to remove him and that the decision
to remove him was actuated by malice on the part of the Master.
[6]
As I have indicated, the applicant has opposed the
counter-application of the first
respondent. She stated that upon her
appointment as executor she was not provided with a record of the
first respondent’s
administration of the estate. In her
founding affidavit, she referred to the absence of proof relating to
the averments put up
by the first respondent in the
counter-application. In particular, he did not put up the various
liquidation and distribution accounts
he referred to liberally
therein, nor did he refer to the meeting of 22 November 2013 and as
to how, if he did, he had complied,
or had sought to comply with the
resolutions adopted. She referred to the fact that the first
respondent failed to mention the
resolution adopted at that meeting
relating to the first respondent’s responsibility to account
for his conduct of the various
businesses which had emerged as
forming part of the deceased estate. She also referred to the
averment relating to malice, and
that she is unable to deal with this
without a full record of the relevant accounts together with their
explanations and the various
necessary vouchers and acquittances.
[7]
The opposition to the interlocutory application appears to subsist on
three main legs,
these being, firstly that Rule 35(13) requires that,
before any other orders are made relating to discovery, the court has
to make
a distinct and separate order to the effect that the rules of
discovery are to apply to this particular application, secondly, that
all the necessary documentation pertaining to the Master’s
decision is contained in the Master’s report and bundled
documents and, thirdly, that the applicant has not made out a case
for “
exceptional circumstances
”.
[8]
Plasket J (as he then was) has succinctly set out the background to
and the requirements
of sub-rule 35(13) in the case of
Premier
Freight (PTY) LTD v Breathetex Corporation (PTY) LTD
[1]
.
Because I believe the reasoning applied therein applies, in the main,
with equal force to the present matter I quote that portion
of the
judgment in full:
“
[14]
Applying these principles to the present case, I am of the view that
this is a case in which a direction should be made to
the effect that
the rules of discovery apply. I have arrived at this conclusion on
the basis of a consideration of a number of
factors outlined below.
[15]
First, at issue in this matter is a claim for a substantial amount of
money: an order is sought directing the respondent to
pay to the
applicant over R2 million plus interest. While I do not agree that
the mere fact that a final order is to be made renders
this matter
exceptional, and I do not read the
Saunders Valve Co Ltd
case
to be authority for this proposition, it does appear to me that the
nature and scope of the relief sought is a factor to be
considered
when a Court is called upon to exercise its discretion in terms of
Rule 35(13).
[16]
Secondly, the respondent has raised a defence that, whatever its
merits at the end of the day, does not appear to be frivolous
and it
claims, again with some justification, that it does not have all of
the documentation that it needs to succeed in its defence
because the
applicant has refused to provide it with those documents despite
request. The potential prejudice to the respondent
is clear. As in
the
Saunders Valve Co Ltd
case, the applicant in the main
application from whom discovery is sought bears the
onus
. The
prejudice to the respondent would have been avoided had the applicant
instituted action proceedings instead of motion proceedings.
[17]
Thirdly, the documents that the respondent seeks are, on the face of
it, relevant to its defence and, what is more, they are
relevant to a
central issue in the litigation. They do not relate, as was the case
in
The MV
Urgup matter, to an interlocutory application
distinct from the central issues: the parties are 'litigating at full
stretch' as
it was put by Thring J; and the invocation of Rule
35(13) cannot therefore be seen as the use of a 'sniping weapon in
preliminary
skirmishes'.
[18]
Fourthly, the respondent's application for a direction that the Rules
of discovery apply is relatively well directed: it cannot
be
described as a fishing expedition and discovery is unlikely to result
in an extension of the issues.
[19]
Fifthly, the issue of discovery cannot be said to have been raised at
too late a stage in the proceedings: the application
was made as part
of the answering papers but foreshadowed in correspondence between
the attorneys for the parties in which the
respondent requested
documentation, the request was refused by the applicant and the
respondent was, in effect, advised by the
applicant to bring an
application if it wanted the documents. In these circumstances and
even though further affidavits will have
to be filed, that
inconvenience is not sufficient, in my view, to persuade me to
exercise my discretion against the respondent.
[20]
Sixthly, the applicant decided to proceed by way of application, thus
robbing the respondent of the automatic resort to discovery.
The
applicant cannot necessarily be faulted in this regard: there is no
suggestion that it abused the process in order to deny
the respondent
the right to discovery and it, after all, runs the risk of its
application being dismissed in the event of the existence
of material
disputes of fact. That said, however, it cannot be gainsaid that the
respondent is at something of a disadvantage.
By invoking Rule 35(13)
in these circumstances, it is not seeking to use discovery in the way
that the applicant did in
MV
Rizcun Trader
(2)
, namely
in order to obtain information that it ought to have had before it
proceeded.
[21]
Seventhly, in all probability, the documents that the respondent
seeks will resolve the matter one way or the other. They will
either
establish that the amount represented to be the amount owing was, or
was not, the correct amount.
[22]
Eighthly, it appears to me that there is, without wishing to prejudge
the merits, a reasonable apprehension that not everything
is before
the Court for the just and fair resolution of the dispute between the
applicant and the respondent. When such an apprehension
exists and a
party seeks an order in terms of Rule 35(13) that would have the
effect of placing every relevant document before
the Court, one
should, in my view, be slow to exercise a discretion against such a
party.
[23]
When these factors are taken together, the result is that the present
is, indeed, an exceptional case in which it is warranted
to direct,
in terms of Rule 35(13), that the Rules of discovery apply.”
[9]
In my view, almost all the considerations set out in the eight points
listed by Plasket
JR, with the necessary adjustments, are applicable
to the present matter. Indeed, I would go further to say that as
amply demonstrated
by Mr. Paterson in argument before me, the first
respondent’s own affidavits together with the Master’s
report make
it abundantly clear that the first respondent has not
sought to place relevant documentation before the court. As executor,
whilst
he was in that position, he was in a position of
uberrimae
fides
. He was obliged in terms of the relevant legislation to
account fully for his actions and to leave a proper and complete
paper
trail in relation thereto. In these papers, he has placed
before the court oblique references to certain documentation without
placing it in its full and proper context so as to give the court a
full picture. What has emerged from his affidavits in the two
applications is that he, in no measure, denies that he either has, or
has had, all the documentation referred to in the notice
of motion in
his possession. Certainly, in the interlocutory application he has
not denied possession of such, nor has he raised
any form of
privilege or other reason for not disclosing the documentation. To my
mind this, on its own, is telling.
[10]
Mr. Paterson has in argument also taken the court through the
documents sought in the notice
of motion and given valid and
compelling reasons for the discovery thereof. Either such
documentation has been referred to by the
first respondent in the
main application or ought to have been referred to by virtue of
references thereto in the Master’s
report, in particular the
minutes of the meeting of 22 November 2013 and the vitally important
undertakings made on his behalf
by his then attorney. In this regard,
and in particular, I refer to undertakings relating to rental monies
of the deceased estate
which were apparently paid to the SD
Ngcingwana Family Trust, a trust apparently owned and administered by
the first respondent,
together with the undertaking to provide the
bank statements pertaining to such trust. In addition, and in
particular, I refer
to the liquidation and distribution account
annexed to the applicant’s founding affidavit in the
interlocutory proceedings
as apparently filed by the first respondent
which reflects that various immovable properties owned by the
deceased estate were
sold for substantial amounts to a Close
Corporation (Upbeatprops 1057 CC) which CC was subsequently sold to
the first respondent
for the paltry sum of R100.
[11]
There is little doubt that the counter-application is of considerable
importance to the applicant.
Its success would mean not only that she
would be removed as executor of the estate, but that an impugned
executor against whom
the Master has already brought an application
for his removal and who was subsequently removed by the Master from
that office,
would be reinstated thereto. It would also mean that a
deceased estate which has not yet been wound up after a period of 19
years
under the stewardship of the first respondent, would simply
continue to be administered by him which is clearly not in the
interests
of anyone concerned, let alone the heirs to the estate
.
Once the first respondent was removed as executor, and replaced by
the applicant, she became clothed with all the duties and
responsibilities which go with such office, and was, in turn, obliged
to act
uberrimae fides
.
She is thus obliged to act in the best interests of the estate and to
do all that is necessary to further such interests. As against
this,
I believe that she was duty-bound to bring this application as in the
absence of the documentation sought, she will be hamstrung
and unable
to carry out such duties.
Furthermore, it is clear that the
first respondent bears the onus, one which is not easy to discharge,
to establish his right to
success under the counter-application.
[12]
Regarding the grounds of opposition, I have difficulty in
understanding the argument relating
to Rule 35(13). The applicant has
sought in the notice of motion the very directive which is
contemplated in that sub-rule, namely
that the provisions of the
extensive Rule 35 relating to discovery are to apply to applications
“
in so far as the court may direct
”. This is
indeed the precise intention of the applicant in the order sought.
[13]
As to the argument that the report of the Master is conclusive, or
that the applicant may apply
to compel the Master to provide all the
relevant documentation, this is misconceived. It is the right of the
first respondent (as
applicant in the counter-application) in terms
of rule 53 to insist that a full record of the proceedings upon which
the Master
made his decision is provided. The first respondent has
instituted a counter-application which has serious ramifications for
the
applicant as I have said. He has referred to documentation which
he apparently has but has not placed before the court or provided
to
the applicant and has failed to refer to documentation which he ought
to have placed before the court and/or provided to the
applicant. In
the circumstances, there can be little doubt but that he must be
compelled to provide such documentation.
[14]
As to the argument regarding relating to exceptional circumstances,
this has already been dealt
with. In my view there can be very little
doubt but that such exceptional circumstances apply in this matter.
[15]
In the circumstances the following order will issue:
1.
The First Respondent is ordered to
discover the following documents in terms of Rule (35)(2):
1.1
A full set of the papers in case no.
556/2009;
1.2
A full set of the papers in case no.
1172/2012;
1.3
The liquidation and distribution
account submitted by Messrs Potelwa during 2010;
1.4
The liquidation and distribution
accounts submitted by Standard Trust;
1.5
The liquidation and distribution
account submitted during 2015;
1.6
The reports submitted by First
Respondent’s attorneys regarding the formation of the trust;
1.7
The liquidation and distribution
account submitted in July 2017;
1.8
The twelve lever arch files referred
to in paragraph 75 of the Supporting affidavit attested to on 2 March
2020;
1.9
The bank statements referred to in
Annexure SDN7 paragraph 4;
1.10
The agreements of sale between the
deceased estate and Upbeatprops 1057 CC referred to in the
Liquidation and Distribution Account
dated about February 2007 and
prepared for First Respondent in his capacity as Executor by Barry
Paul Daisley, such agreements
including:
1.10.1
the sale of Erf 29, 30, 71,
72, 75, 76 and 198, Port St Johns;
1.10.2
the sale of the sole
proprietorships of PMN Enterprises, Rocks Filling Station, Motor
Spares, Elite Bottle Store, Rock in Liquor
Restaurant;
1.11
The CK 2 documents of the following
close corporations;
1.11.1
Upbeatprops 1057 CC;
1.11.2
Upbeatprops 1058 CC;
1.11.3
Upbeatprops 1059 CC;
1.11.4
Upbeatprops 1060 CC;
1.11.5
Tradepost 2132 CC;
1.11.6
Lightprops 1136 CC;
1.11.7
Fineprops 1142 CC;
1.11.8
Fineprops 1143 CC;
1.12
All financial statements from 2001
to 2010 relevant to the business operations of the deceased estate
and rental collections as
referred to in resolution 6 of the
resolutions of the meeting of 22 November 2013 as reflected in
Annexure G to the Report of the
Master, and in particular the
financial statements of the abovementioned close corporations;
1.13
The bank statements of the SD
Ngcingwana Family Trust from its formation to April 2010, as referred
to in resolution 7 of the resolutions
of the meeting of 22 November
2013 as reflected in Annexure G to the Report of the Master;
1.14
Financial statements of the
abovementioned close corporations and any other businesses falling
within the deceased estate from 2010
to the present;
1.15
All leases relating to the immovable
property belonging to the deceased estate, and full accounts in
relation to the receipt of
all rentals;
1.16
The sale transaction as between the
deceased estate and Fineprops 1143 CC in connection with Rocks
Filling Station;
2.
The Second Respondent is ordered to
discover the following documents relating to the deceased estate;
2.1
The inventory filed in connection
with the deceased estate in terms of section 27 of the Administration
of Estates Act 0f 1965;
2.2
All the liquidation and distribution
accounts filed by or on behalf of First Respondent in connection with
the deceased estate together
with all vouchers and supporting
documents referred to therein;
2.3
All bank statements of the deceased
estate delivered to Second Respondent;
3.
Insofar as it may be necessary Rule
35(3), 35(6); 35(9); 35(10) are to apply to these proceedings;
4.
The First Respondent is ordered to
pay the costs of this application.”
R
E GRIFFITHS
JUDGE
OF THE HIGH COURT
COUNSEL
FOR APPLICANT : Mr Paterson
SC
INSTRUCTED
BY
: Drake Flemmer & Orsmond
COUNSEL
FOR RESPONDENT : Mr Ngumle
INSTRUCTED
BY
: Mbabane Maswazi & Mkosana Inc
HEARD
ON
: 21 JULY 2022
DELIVERED
ON
: 26 JULY 2022
[1]
2003
(6) SA 190
(SE) paragraphs 14 - 23.