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2021
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[2021] ZALMPPHC 41
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In the Ex Parte Application of David Makopole Mashengwama (2305/2021) [2021] ZALMPPHC 41 (28 July 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(LIMPOPO
DIVISION, POLOKWANE)
REPORTABLE:
YES
OF
INTEREST TO THE JUDGES: YES
REVISED
CASE
NO: 2305/2021
IN
THE EX PARTE APPLICATION OF:
DAVID
MAKOPOLE
MASHENGWANA
APPLICANT
JUDGMENT
MULLERJ:
[1]
The
applicant
applied to
court
to
accept
the
voluntary
surrender of
his
estate
on
10
June 2021. The statement of affairs did lay open at the office of the
master
in
Polokwane for 14 days from 17 May 2021. The applicant resides at
Lebowakgomo in which district there is no Master's office. The
statement of affairs did not lay open for inspection
at
the office of the magistrate at Lebowakgomo as required by section
4(5) and 4(6) of the Insolvency Act
[1]
which
provides:
"4(5) If the debtor
resides or carry on business as a trader in any district...wherein
there is no Master's office, the petitioner
shall also lodge a copy
of the said statement at the office of the magistrate of the
district, or, if the petitioner resides or
so carries on business in
a portion of such district in respect of which an additional or
assistant magistrate permanently carries
out the functions of the
magistrate of the district at a place other than the seat of
magistracy of that district, at the office
of such additional or
assistant magistrate."
4(6) The said statement
shall be open to the inspection of any creditor of the debtor during
the office hours for a period of fourteen
days from a date to be
mentioned in the notice of surrender."
[2]
The attorney who prepared the application
on behalf of the applicant submitted an
affidavit together with the application in terms whereof he has
stated that the applicant
himself presented the statement of affairs
to the civil clerk (Mr Madisha) at the office of the magistrate
Lebowakgomo to have
the statement of affairs lay open from 17 May
2021. The clerk refused to accept the document under the pretext that
there is no
one
at the office that
deals
with such matters. Thus, when the application was moved in court a
request was made by counsel that the application for surrender
be
accepted without the statement of affairs
having laid for inspection and without the
required certificate issued by the magistrate.
[3]
The
request
was
rejected
on
the
basis
that the
court
cannot and
will
not
condone
a
deliberate
failure
by a state official to accept the statement of affairs
and
to cause
such
document
to
lay
open
for
14
days
at
the
office
and thereafter issue a
certificate
to
that
effect
as
required
by the
Insolvency
Act.
It
was held
in
Ex
Parle
Proxenos
[2]
where there were two locations where court may be held within a
district, that the statement of affairs must lay at the place where
the magistrate
for
the district is ordinarily located:
"In
my
judgment then
the
schedules
were not
properly
lodged
as
the
required
by
section
4
(5)
of the Act. This failure to comply with the
requirements
of
the Act is not
in
my
view
a
formal defect which the Court can condone. (cf.
Ex
Parle Mandelstam,
1949
(3) SA 1210
(O);
Ex
Parle Osman
1924
CPD 199
;
Ex
Parle Loubscher
supra)."
[3]
[4]
In
Ex
Parle van der Merwe
[4]
the
Court following
Osman
and
Proxenos
supra
explained:
"The
notices of his intention to apply for the surrender of his estate
duly appeared in the Government Gazette and in a newspaper
which in
fact circulated in the Pretoria and
Piet
Retief areas. These notices set out that that the statement of his
affairs would lie for inspection only at the offices of
the master at
Pretoria. They did not lie for inspection at the offices of the
magistrate at Piet Retief. It seems clear that since
he has been
residing in Piet Retief he has not incurred any liabilities there and
this is the
reason
why the schedules did not lie for inspection at the offices of the
magistrate in Piet Retief. In view of the fact that that
he now
resides in the Piet Retief district it is necessary in terms of
section 4
(5)
of
the
Insolvency
Act, 24 of 1936
, that
his
statement of affairs should also have lain for inspection at the
office of the magistrate at Piet Retief. This omission is not
a
formal defect."
[5]
[5]
The court has consistently held that
non-compliance with
section 4(5)
in
instances where the
statement
of
affairs had not lain for inspection in the district where the
applicant
is
resident
is
not
a
formal defect and
cannot be condone
d
.
Such a defect is
a
material defect of an imperative provision
of the statute. The purpose of the section, most importantly, is to
allow creditors in
the district
where
the applicant resides a means and opportunity to speedily inspect the
statement of affairs to verify whether they are included
in the list
of creditors and, if so, to form an opinion of the values and bad
debts of the applicant and to decide whether the
application should
be opposed or to consider whether claims should be filed. Creditors
who are not disclosed in the statement of
affairs are also provided with the
opportunity to consider what steps they wish
to take. That object is defeated when
creditors are told that the statement will lie open for inspection at
the office of a particular
office of a magistrate for a
specific period when it is not
the case.
[6]
Section
157(1)
of
the
Insolvency Act
provides
:
"Nothing
done under this Act
shall be
invalid
by reason of a formal defect or
irregularity, unless a substantial
injustice has been thereby done, which in the opinion of the court
cannot be remedied by any order of the
court."
[7]
This court issued an order similar to the
order issued in the case of
Ex Parle
Proxenos,
namely, that the application
be postponed until 20 July 2021 to enable the
statement of affairs to
lie
for
inspection at
the
office of
the
magistrate Lebowakgomo in the usual manner
and that notice thereof be given to all creditors by registered post.
[8]
The attorney for the applicant in a
supplementary affidavit filed after the application was postponed
again urged the court to condone
the failure of the statement
of
affairs
to
lay
for
inspection
at
the
magistrate
court at Lebowakgomo. What he in really ask
of this court is to condone the failure by a state
official
to its duty to comply with the Act. I firmly believe the court has no
power to condone such a deliberate failure.
The court cannot be held at ransom by state officials who have
elected, for whatever
reason, not to do what the statute require
them to
do.
Section 157(1)
is not applicable
to such a
situation.
[9]
However,
the failure of the statement to have lain open for inspection in my
view not a formal irregularity. It is a peremptory
requirement that
the statement
of
affairs must lie
open
for
inspection
in
the
office
of
the
magistrate
in
the
district
where the applicant resides. As stated before it is a mechanism that
has
been
put
in
place
for
the
benefit
and
protection
of
the
creditors of
a
debtor when such a debtor
bona
fide
applied
to surrender his estate within the framework of the
Act.
[6]
[1
0]
It
is
not clear why the officials at
the
magistrate of the
district where the
applicant resides
refused to comply
with the statutory
duty placed upon them by the Act. It may,
on the one hand, be that officials are poorly trained or not trained
at all with
regard
to
their
duties,
functions
and services which
they
must render which, no doubt, include
functions in terms of the
Insolvency Act such
as allowing the
statement of affairs to lay for inspection
and to issue
a
certificate
to
that effect. On the other hand, it may be dereliction of their
duties. The latter seems more probable. The attorney in his letter
to
the court manager has pointed out what
is
required by the Act. If any uncertainty after receipt of the letter
remained with the court manager, such uncertainty could easily
have
been cleared up by enquiries made to other offices or
even
at
the regional office of the department of Justice in Polokwane or at
the
very
least a
reading
of
section
4
the
Insolvency A
ct.
This
kind
of
dereliction
of
duty is deplorabl
e
.
It leaves an applicant with no recourse. As far as service delivery
is concerned it undermines public confidence in the public
service
which at the best of times leaves much to be desired and in the rule
of law and is a contravention
section 9
and section 195(1) of the
Constitution. The public, when they make use of the
mechanisms which the Act provides, should
be able to rely on public servants to fulfil their duties without
delay and with the professionalism
that is expected and is required
of them. The failure by the responsible officials of the magistrate
Lebowakgomo to comply with
their statutory duty rendered the
Insolvency Act
useless
and the application futile.
[11]
Despite the order which is clear, the
refusal to allow the statement of affairs to
lay for inspection persisted without any
acceptable reason. This court must apply the mailed fist instead of
the velvet glove to
force the officials of the magistrate at
Lebowakgomo to
do
their statutory duty
in
terms
of
the
Insolvency
Act.
[12
]
The attention of the attorney of the
applicant was drawn to the order which the
court has mind. He has no objection that
the order be served by the sheriff but
he
requested that the relevant officials pay the wasted costs. I agree
with such
an
approach.
ORDER
(1)
The judgment and order together with the
statement of affairs of the applicant
must
be served on the Court Manager Ms Agnes Selaoelo Ntini and the civil
clerk Mr Madisha, personall
y
..
(2)
They are both called upon to ensure;
2.1 that
the statement of affairs of the applicant lay open for inspection at
the Magistrate Lebowakgomo for 14
days from 10 August 2021-27 August
2021.
2.1 That a certificate to
that effect be issued after expiry of the relevant period.
(3)
They are ordered to appear in this court on
the 2 September 2021 10h:00 to advance reasons why they should not
personally jointly
and severally pay the
wasted
costs
occasioned
by the
postponements
of
this application
as
a result of their failure to comply with their duties in terms of the
provisions of the
Insolvency Act to
cause the statement of affairs to
lay open for inspection.
(4)
If this order has not been complied with on
the return date they must advance
reasons
why they, in addition, should not
be
held in contempt of court and why
a
term of 2 months imprisonment should not be imposed on each of them.
(5)
A copy of this judgment must be forwarded
to Director-General of Justice and Constitutional Development for
attention and to take
whatever steps that are necessary.
GC
MULLER
JUDGE
OF THE HIGH COURT LIMPOPO
DIVISION:
POLOKWANE
[1]
Act
24 of 1936.
[2]
1953
(4) SA 593
(O) 595.
[3]
1927
CPD 159.
[4]
1964
(3) SA 246 (T).
[5]
246-247A.
[6]
Ex
Parte Harmse
2005
(1) SA 323
(N).