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[2020] ZAGPPHC 73
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Van Rensburg N.O and Another v Master of the High Court, Pretoria and Another (56029/18) [2020] ZAGPPHC 73 (14 February 2020)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH
AFRICA GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE:
YES
/NO
(2)
OF INTEREST
TO OTHER JUDGES:
YES
/NO
(3)
REVISED
CASE
NO: 65015/2018
14/2/2020
In
the matter between:
ESAIAS
JOHANNES VAN RENSBURG
N.O.
1
ST
APPLICANT
In
his capacity as joint liquidator of
Boschpoort
Ondernemings (Pty) Ltd (in liquidation)
Masters
Reference T2553/2012
FAROUK
SHARIFF
N.O.
2
ND
APPLICANT
In
his capacity as joint liquidator of
Boschpoort
Ondernemings (Pty) Ltd (in liquidation)
Masters
Reference T2553/2012
and
THE MASTER OF THE HIGH COURT,
PRETORIA
1
ST
RESPONDENT
JOHANNES STEPHANUS
WESSELS
2
ND
RESPONDENT
In
re:
BOSCHPOORT
ONDERNEMINGS (PTY) LTD
THE COMPANY
(IN
LIQUIDATION)
JUDGMENT
WANLESS
AJ
Introduction
[1]
This
application is one of a myriad of applications involving one ESIAS
JOHANNES JANSE VAN RENSBURG
("the
First Applicant”);
FAROUK
SHARIEF
("the Second Applicant';
and JOHANNES STEPHANUS WESSELS
("Wessels”).
The
"web of litigation" which has ensued and continues to
ensue, only adds to the complexity of the facts pertaining to
the
present application. In turn, this application has been unduly
complicated by,
inter alia,
the
conduct of the parties. This will become apparent as this judgment
unfolds. Despite the aforegoing, this court has made every
effort to
set out the history of the matter together with the relevant facts
pertaining thereto, as simply as possible.
[2]
The
First Applicant and the Second Applicant are the joint liquidators of
BOSCHPOORT ONDERNEMINGS (PTY) LIMITED (IN LQUIDATION)
("the
Company”).
During September
2018 the Applicants instituted this application
("the
main application")
under case
number 65015/2018. THE MASTER OF THE HIGH COURT, PRETORIA
("the
Master';
was cited as the First
Respondent and
"Wessels"
as
the Second Respondent. The relief sought in the main application is
that the Master be ordered to make a ruling in respect of
the
objection of Wessels to the first corrected Liquidation and
Distribution Account in relation to the winding-up of the Company.
In
respect of costs the Applicants sought an order that the costs be
costs in the administration of the winding-up of the Company
except
where the application was opposed, in which case the party opposing
be ordered to pay the costs.
[1]
[3]
The
mandatory interdict sought by the Applicants against the Master is in
terms of subsection 407(2) of the "old" Companies
Act, Act
61 of 1973
("the Companies
Act”).
Section 407 of the
Companies Act deals with objections to accounts in winding-up
proceedings and subsection (2) provides that
"If
the Master is of the opinion that any such objection ought to be
sustained, he shall
direct
the Liquidator to amend the account or give such other directions as
he may think fit".
The main
application was served upon the Master on the 10
th
of September 2018. Whilst the Master elected not to oppose the relief
sought in the main application, Wessels (cited on the basis
that he
had a material interest in the outcome of the main application but
against whom no relief was sought) elected to do so
and filed a
notice of intention to oppose the main application on the 14
th
of September 2018.Thereafter, Wessels filed his answering affidavit
in the main application on the 14
th
of December 2018. The Applicants filed their replying affidavit in
the main application on the 14
th
of May 2019.
[4]
At
that stage the sole issue to be decided by this court in the main
application was one of fact, namely whether or not the Master
had
made a decision in respect of the objection lodged with him by
Wessels and, if he had sustained the objection, whether or not
he had
directed the liquidators to amend the account or act in terms of any
other directions he may have seen fit. The merits of
the objection
and the decision of the Master in respect thereof, were never
relevant to the decision to be made by this court in
the main
application.
[2]
In the premises, one would have expected any "dispute"
arising therefrom to be easily resolved. At the end of the day
the
Master had either dealt with the objection or he had not. This is a
matter of fact. More particularly, it could reasonably
have been
expected that it would be a relatively simple matter to ascertain
(through,
inter alia,
relevant
documentation and/or civil correspondence) if the Master had complied
with his statutory obligations in terms of subsection
407(2) of the
Act. Further, if there was any confusion in this respect, same could
also have been resolved in the same manner.
Regrettably, this did not
happen. As a consequence thereof the parties managed, between them,
to generate some 544 pages of affidavits
and annexures thereto, in
what can only have been an extremely costly exercise.
[5]
Notwithstanding the fact that the main application had been
instituted in early September
2018, it was only set down for hearing
before this court on the 11
th
of November
2019. On the 30
th
of October 2019 (7 court days prior to the hearing of the
application) Wessels instituted an interlocutory application
("the
interlocutory application”)
in
terms of which he sought (at the hearing of the main application)
condonation for the late filing of a supplementary affidavit.
[3]
In terms of this supplementary affidavit,
[4]
Wessels wished to place new facts before this court and sought an
order that the costs of the main application be paid by the attorneys
(JACO ROOS ATTORNEYS INCORPORATED) representing the First and Second
Applicants
de
bonis propriis,
such
to be joint and several with any order for costs granted against the
Applicants. This, in turn, gave rise to the filing of
no less than
three (3) further affidavits and annexures thereto. On the 4
th
of November 2019 the Applicants filed what they referred to as "a
supplementary replying affidavit".
[5]
Then, on the 5
th
of November 2019 the attorneys representing the Applicants
(“JRI”);
instituted a
counter-application to the interlocutory application
("counter-application")
supported by a
Founding Affidavit.
[6]
In terms thereof, JRI sought that the interlocutory application be
dismissed with costs on an attorney and client scale, payable
by the
attorneys representing Wessels, namely HAASBROEK AND BOEZAART
INCORPORATED
(“HBI”)
de bonis propriis
and
Wessels, jointly and severally. Finally, on the 7
th
of November 2019, HBI filed an affidavit in opposition to the relief
sought by JRl.
[7]
As a result thereof the application papers had grown to some 750
pages.
[6]
In
the premises, on the 11
th
of November 2019, this court was asked to make findings as to whether
or not the Applicants were entitled to the relief sought
as against
the Master in the main application and the issue of costs in terms of
the interlocutory application and counter-application.
At the hearing
the Master was represented and handed to the court a report
("the
Master's Report")
dated the 8
th
of November 2019. This was despite the fact that the Master had not
opposed the main application; had not placed any affidavits
before
this court in respect of the main application and was not a party to
either the interlocutory application or the counter-application.
The
Master's Report was accepted by this court into evidence and with no
objection from any of the parties (who, including JRI
and HBI, were
all represented at the hearing on the 11
th
of November 2019).
The
main application
[7]
On
behalf of the Applicants, it was submitted that the objection by
Wessels
[8]
contains a myriad of objections, some of which have not been decided
upon by the Master. In this regard the Applicants rely on
the fourth
query sheet which they submit shows that the Master has only dealt
with one of those objections.
[9]
In support of this submission the Applicants point out that the
aforesaid query sheet states "The objections are still
applicable".
[10]
Following thereon the Applicants submit that they have satisfied all
the requirements of a final mandatory interdict in that they
have a
clear right to the relief sought; will suffer irreparable harm if the
relief sought is not granted and there is no adequate
alternative
remedy other than the relief sought.
[8]
In
opposition thereto, it was submitted, on behalf of Wessels, that not
only had the objection been decided upon by the Master but
that the
Applicants had acted in respect thereof by filing an amended
Liquidation and Distribution Account in the winding-up of
the
Company. Arising therefrom, it was submitted that the main
application has been overrun by events and that an order directing
the Master to make a ruling in respect of an objection which has
already been sustained is now moot.
[9]
As
already noted earlier in this judgment the only party against whom
relief was sought, namely the Master, declined to oppose the
main
application. Astonishingly, at page 2 of the Master's Report, it is
stated:
"Despite the Master's
citation as a Respondent, no relief is sought against the Master, the
Master made a decision not to oppose
but only to file a Master's
report to assist the court and the parties by placing on record the
correct state of affairs."
This is blatantly incorrect.
Paragraph 1 of the Notice of Motion in respect of the main
application states:
"Ordering the
first
respondent
to comply with its statutory obligations in
terms of section 407(2) and/or 407(3) of the Companies Act, 61 of
1973 in respect of
the objection lodged by the second respondent
against the liquidation and distribution account referred to in
paragraph 8 of the
founding affidavit".
The Master is cited in the
headings of the main application as the First Respondent and also in
the founding affidavit.
[11]
[10]
Having elected (for reasons only known to the Master) not to oppose
the main application, as also noted
above, the Master did not place
any affidavits before this court which may well have clarified the
issue as to whether or not the
Master had dealt with the objection
which is the subject matter of this protracted litigation. To say
this is a grave pity, would
be an understatement. What the Master has
done is to hand to the court, on the day of the hearing, the Master's
Report. Whilst
this court is grateful therefor, the existence of this
report (dated the 8
th
of November 2019) raises the obvious question as to why, having
declined to oppose the main application and having failed to place
any affidavits before this court (which the Master could have done
without opposing the relief sought but merely to assist this
court
and abide the decision thereof) the Master did not, at the very
least, file his report at the outset when the main application
was
instituted in early September 2018 and served upon the Master on the
10
th
of
September 2018. Had the Master done so, this could well have avoided
the main application following the tortuous (and expensive)
path that
it did. Of course, the same result (a speedy and definitive
resolution of the matter) could well have been obtained if
Wessels
(cited as the Second Respondent in that he had a material interest in
the outcome of the main application) had elected
not to oppose the
main application but abide the decision of this court in respect
thereof. In that case and in light of there
being no opposition from
either respondent the main application would have proceeded on an
unopposed basis. This, in turn, would
have resulted in the court
reaching a decision as to whether or not the Applicants were entitled
to the relief sought, with or
without the possible assistance of the
Master. In the event of this court holding that the Master should be
ordered to comply with
his statutory obligations, this would also, in
all likelihood, have resulted in a speedy and relatively inexpensive,
resolution
of the main application. Unfortunately, as is clear from
the history of this matter, a sensible or pragmatic solution to
resolve
the matter was not adopted and the main application has
developed into a full blown opposed application with the consequent
legal
costs.
[11]
Returning to the Master's Report the
contents thereof deal with the background (to the main application as
well as other issues
pertaining to the winding-up of the company) and
the nature of a number of other applications (past; present and
future) involving
the same parties. In his conclusion the Master
states that he
"has made a
ruling in respect of the special fee and also given directions to
explain or to amend the account in terms of Section
407(2) of the
Companies Act re query sheet dated 29 May 2018".
In
this regard the conclusion in the Master's Report effectively
substantiates the submissions made on behalf of Wessels in the
main
application.
[12]
Whilst the contents of the Master's
Report are instructive and provide valuable insight into not only the
background of the main
application but also the nature of the
litigation which has ensued (and is ongoing) between the Applicants
and Wessels, it fails
to resolve and/or answer the crucial question
in this matter, namely whether the abovementioned ruling in respect
of the special
fee by the Master deals with all of the objections
made by Wessels. The Master sets out a history of a number of
objections submitted
to him but fails to illustrate which specific
objections have and have not been dealt with by him. It is this
failure which, in
the opinion of this court, has given rise to much
confusion, by all parties in the main application. Most particularly,
the Master
has failed to deal with, at all, the major concern of the
Applicants in respect of the fourth query sheet (dealt with earlier
in
this judgment) where the Master has stated
"The
objections are still applicable".
[13]
In the premises, there seems little to
suggest that the Master has complied fully with the statutory
obligations imposed upon him
in terms of subsection 407(2) of the
Companies Act. As correctly submitted on behalf of the Applicants the
high water mark of the
opposition put forward by Wessels to the
relief sought in the main application is that the objection has, by
virtue of the Applicants
lodging a corrected account and by
implication, been upheld. This cannot, in light of,
inter
alia,
the statement by the Master
that the objections still apply, be accepted as correct. The
fundamental difficulty for Wessels, when
considering the merits of
his opposition to the relief sought in the main implication, is that
same is based on what Wessels believes
the Master did and did not do.
As set out earlier in this judgment the Master has done nothing to
assist Wessels in his interpretation
thereof and the contents of the
Master's Report (despite the Master's bold conclusion as set out
above), filed at the very last
hour, does nothing to support his
contention that the Master has indeed made a decision in terms of the
objection. In light of
the aforegoing and in light of the fact that
the Applicants have satisfied all of the requirements of a final
interdict (which
was not disputed by Wessels at the hearing) this
court should grant to the Applicants the relief sought.
[14]
As to the submission made on behalf of
Wessels that the granting of such relief has been rendered moot by
the events which have
occurred since the institution of the main
application, this cannot, for the reasons set out above, be true. On
a balance of probabilities
the Master has not made a decision in
respect of the objection and is required to act in terms of
subsection 407(2) of the Act.
In respect of the fact that there are a
number of other applications pending (as set out in the Master's
report), including an
application for the removal of the Applicants
as liquidators, which may well, from a practical standpoint, render
the relief granted
in terms of the main application moot, this does
not mean that this court should not grant same. This court cannot
"second
guess" the final outcome of the pending litigation
between the parties and whether same would indeed have a material
effect
on the order of this court.
Costs
[15]
It is trite that, unless special
circumstances exist, costs of litigation should, in the normal
course, follow the result and the
successful party should recover his
or her costs from the unsuccessful party. It is also trite that the
court has a fairly wide
discretion when it comes to the question of
costs. As set out in this judgment, it is the opinion of this court
(setting aside
the particularly mean spirited manner in which
litigation has ensued between the Applicants and Wessels) that the
principal
reason why the main application was not resolved, thereby
avoiding the incurring by both parties of unnecessary costs, was the
total inaction of the Master throughout the main application. In this
regard, there is nothing on the application papers before
this court
to show that the Master played an active role, or any role
whatsoever, in an attempt to resolve the impasse between
the parties
in respect of a dispute of fact which,
prima
facie,
was easily resolved. This is
indeed regrettable, since had such intervention occurred, same would
not only have saved Wessels considerable
costs but would also have
been to the benefit of the Company's general body of creditors.
Arising therefrom, this court considers
that the inactions of the
Master in the main application are such as to entitle this court, in
the exercise of its discretion,
to depart from the general rule that
an award of costs should follow the result. Both the Applicants and
Wessels have, to one degree
or another, been the victims of the
failure of the Master to play a more effectual role in this
litigation. To that extent, it
would be just and equitable if each
party was ordered to pay their own costs in respect of the main
application.
[16]
If evidence of the deep malice
permeating the litigation which has taken place and continues to take
place between the parties,
is required (which it is not), then one
need look no further than the interlocutory application and counter
application in
the present matter. In the interlocutory application
Wessels seeks an order for costs in respect of the main application
to be
paid by the attorneys representing the Applicants
de
bonis propriis
whilst in the
counter-application the attorneys representing the Applicants seek an
order that the costs of the interlocutory application
be paid by the
attorneys representing Wessels
de
bonis propriis.
Furthermore, all the
aforesaid costs were sought on a punitive scale.
[17]
Orders in respect of costs
de
bonis propriis
have in effect been
given statutory affirmation in matters related to insolvent estates.
Section 74 of the Insolvency Act 24 of
1936 (as amended) states:
"Improper advising or conduct
of legal proceedings
If
it appears to the court that any attorney or counsel has, with intent
to benefit himself, improperly advised the institution,
defence or
conducting of legal proceedings by or against an insolvent estate
or
has incurred any unnecessary expense therein,
the court may
order the whole or part of the expense thereby incurred to be borne
by that attorney or counsel personally."
[12]
In
the matter of
Pheko and Others v Ekurhuleni City
2015 (5) SA 600
(CC)
the court held,
inter alia,
at paragraph [51] the
following:
"Costs
de
bonis propriis
are
costs which a representative is ordered to pay out of his or her own
pocket as a penalty for some
improper
conduct,
for example, if
he or she acted
negligently
or unreasonably.
Whether a person
acted negligently or unreasonably must be decided In the
fight
of the particular circumstances of each and every
case.
'
[13]
Also, in the matter of
South
African Liquor Traders' Association and Others v Chairperson Gauteng
Liquor Board and Others
2009 (1) SA 565
(CC),
at paragraph [54],
it was held:
"An order of costs
de
bonis propriis
is
made against attorneys where a court is satisfied that there has been
negligence in a
serious
degree which
warrants an order of costs being made as a mark of the court's
displeasure. An attorney is an officer of the court
and owes a court
an appropriate level of professionalism and courtesy."
[14]
[18]
In
respect of the costs order sought
de
bonis propriis
by Wessels against
the attorneys representing the Applicants in the main application,
this court has already held that the Applicants
should be granted the
relief sought and that each party in the main application be ordered
to pay their own costs. In light thereof
and when applying the same
reasoning (as set out earlier in this judgment), there are clearly no
grounds upon which this court
should order the attorneys representing
the Applicants to pay the costs of the main application
de
bonis propriis.
[19]
With
regard to the order sought by the attorneys representing the
Applicants that the attorneys representing Wessels pay the costs
of
the interlocutory application
de
bonis propriis,
it is true that the
aforesaid interlocutory application has proved to be unsuccessful
insofar as it sought to have the attorneys
representing the
Applicants pay the costs of the main application
de
bonis propriis.
This, however, is
not the test in respect of an order that an attorney pay costs
de
bonis propriis.
As set out in
Pheko
and Others v Ekurhuleni City (supra)
that
attorney should, on the facts of that particular case, have acted
negligently or unreasonably. Furthermore, as held in
South
African Liquor Traders' Association and Others v Chairperson Gauteng
Liquor Board and Others (supra)
any
negligence on the part of an attorney must be of a serious degree. On
the facts of the case as they presented themselves in
the main
application and despite the fact that Wessels was unsuccessful in his
opposition thereto, there is nothing to suggest
that the attorneys
representing Wessels acted negligently or unreasonably to a serious
degree when advising their client to seek
costs
de
bonis propriis
from the Applicant's
attorneys. This was based on the premise that,
inter
alia,
the Applicant's attorneys were
negligent or unreasonable in pursuing the main application when they
should have known that any order
granted would be moot. As stated
earlier, this line of reasoning on behalf of the attorneys
representing Wessels came about as
a result of what Wessels and his
attorneys believed the Master had done, namely, sustain his
objection. This belief, also as stated
earlier, was largely (if not
solely) attributable to the inaction displayed by the Master in the
main application and his attitude
thereto. In the premises, the
counter-application cannot succeed.
[20]
That,
however, is not the end of this matter. Both the interlocutory
application and counter-application were unsuccessful. Moreover,
both
may be described as being unnecessary expenses within,
inter
alia,
the meaning of section 74 of
the Insolvency Act 24 of 1936 (as amended). In terms thereof and in
the exercise of this court's discretion
in respect of costs in
general, it would be just and equitable if this court made an order
that the costs of the interlocutory
application and
counter-application be borne by the respective attorneys and not by
their clients, namely Wessels or the Applicants.
In this manner the
court is also able to express, to some degree, its displeasure at
being burdened (at an extremely late stage
of the proceedings which
had been carrying on for more than a year) with a most unsavoury and
ill-advised squabble as to costs,
coupled with an attack, by both
sets of attorneys, upon the integrity of their respective colleagues.
In the oft hurley burley
of litigation, attorneys should always bear
in mind the standard of care, skill, knowledge and learning expected
from an attorney
when carrying out his duties on behalf of his or her
client, together with the duties towards his or her opponent and the
court.
[15]
[21]
In
the premises the court makes the following order:
1.
The Master of the High Court
(Pretoria) is to comply fully with the provisions of subsection
407(3) of the Companies Act 61 of 1973
(as amended) in respect of the
objection lodged by the Second Respondent (JOHANNES STEPHANUS
WESSELS) and as more fully described
in paragraph 8 of the founding
affidavit at page 9 of the application papers;
2.
The Master of the High Court of
South Africa (Pretoria) is to comply with paragraph 1 hereof within
THIRTY (30) days of the granting
of this order;
3.
In
respect of the application under case number 65015/2018 instituted by
way of Notice of Motion dated the 4
th
of September 2018 at pages 1 to 3 of the application papers the First
Applicant; the Second Applicant and the Second Respondent
are to pay
their own costs;
4.
The application instituted by way
of the Notice of Motion dated the 30
th
of October 2019 at pages 545 to 548 of the application papers and the
counter-application instituted by way of the Notice of Motion
dated
the 5
th
of November 2019 at pages 703 to 705 of the application papers, are
dismissed with no order as to costs.
5.
In
respect of the application and counter-application as set out in
paragraph 4 hereof the attorneys HAASBROEK & BOEZAART ATTORNEYS
and JACO ROOS ATTORNEYS INCORPORATED are not to receive any payment
from their respective clients and shall be liable to pay any
costs
and/or expenses incurred in respect thereof, such to include but not
to be limited to,
inter alia,
disbursements to any third parties.
BC
WANLESS
ACTING
JUDGE OF THE GAUTENG DIVISION, PRETORIA
Heard
on:
11
November 2019
For
the Applicants:
Adv
Swart SC
Instructed
by:
Jaco Roos Attorneys Inc
For
the 1
st
Respondent:
Adv
H C Janse van Rensburg
Instructed
by:
The
State Attorney Pretoria
For
the 2
nd
Respondent:
Adv
F G Janse van Rensburg
Instructed
by:
Haasbroek & Boezaart
Attorneys
For
Applicants' Attorneys:
Adv Kruger SC
For
Second Respondent's Attorneys:
Adv De Klerk SC
Date
of Judgment:
1
4 February 2020
[1]
Notice of Motion at pages 1 to 3 of the application papers
[2]
Paragraph 8 of the Founding Affidavit at page 9 of the
application papers
[3]
Notice of Motion at pages 545 to 548 of the application papers.
[4]
Pages 549 to 627 of the application papers
[5]
Pages 628 to
702
of the application papers
[6]
Pages 703 to 724 of the application papers
[7]
Pages
725
to
750
of the application papers
[8]
Paragraph 8 of the Founding Affidavit at page 9 of the
application papers: annexure "FA-11
'"
at pages 190
to 244 of the application papers: paragraph 6 of the Answering
Affidavit at page 379 of the application papers
[9]
Annexure "FA-22" at page
368A-C of the application
papers
[10]
Page 369C of the application papers
[11]
Sub-paragraph 3.1 of the Founding Affidavit at page
6
of the application papers.
[12]
Emphasis added.
[13]
Emphasis added
[14]
Emphasis added
[15]
Van der Walt
v
Murray and Another. an unreported judgment
of the Free State Division (Bloemfontein); case number 2554/2019.·
10 September
2019. at. inter
alia,
paragraph [13