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[2019] ZALMPPHC 68
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Norman and Another v Trustees from time to time of the WM Trust and Others (6504/2018) [2019] ZALMPPHC 68 (12 December 2019)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
LIMPOPO DIVISION,
POLOKWANE
(1)
REPORTABLE:
YES
/NO
(2)
OF
INTEREST TO OTHER JUDGES:
YES/
NO
(3)
REVISED
CASE
NUMBER: 6504/2018
In
the matter between:
GEORGE
CORNELIA NORMAN
INTERVENING APPLICANT
In
re:
MARLIZE
CORNELIA NORMAN
FIRST APPLICANT
WM
NORMAN ELEKTRIES CC
SECOND APPLICANT
AND
TRUSTEES
FROM TIME TO TIME OF THE WM
TRUST
IT
3648/94
FIRST RESPONDENT
GEORGE
PATRICK NORMAN N.O
SECOND RESPONDENT
ETTIENEE
PHILLIPUS SCHEEPERS N.O
THIRD RESPONDENT
STEPHANUS
JOHANNES MARTINUS
DE
BEER
N.O
FOURTH RESPONDENT
JUDGEMENT
KGANYAGO
J
[1]
The first applicant in the main application is the daughter in law of
George Patrick
Norman who is the intervening party and also the
second respondent in the main application (to be referred to as
intervening party).
During 2017 the first applicant launched an
application under case number 6949/2017 for the sequestration of the
intervening party.
She successfully sequestrated the intervening
party.
[2]
According to the applicants after the intervening party was
sequestrated, the trustees
of his insolvent estate discovered during
the enquiries that the intervening party had hidden assets and
interest in several trust
including WM Trust. On the 9
th
May 2018 the applicants together with the intervening party and the
several trust and individuals involved in the alleged hiding
of the
assets reached a settlement agreement. In terms of the settlement
agreement the debtors agreed to pay R1.6 Million in cash
and free of
any deductions by the 31
st
July 2018. It was also part of
the terms of the settlement agreement that the sequestration of the
intervening party will be rescinded
and set aside.
[3]
On the 26
th
June 2018 the intervening party obtained an
order on unopposed basis rescinding and setting aside the final
sequestration order
against him that was granted on the 30
th
April 2018. In an attempt to raise funds, the debtors tried to sell
the farm, but were unable to do so as there was a successful
land
claim on that farm. That resulted in the debtors being unable to
comply with the terms of the settlement agreement.
[4]
In turn the applicants Marlize Cornelia Norman and WM Elektries CC
instituted the present
application against the respondents who are
Trustees from Time to Time of the WM Trust IT, George Patrick Norman
N.O, and Stephanus
Johannes Martinus De Beer N.O seeking an order
that WM Trust be sequestrated. The second to the fourth respondents
have being cited
in their capacities as trustees from time to time of
WM Trust.
[5]
The application was served at the offices of the attorneys of the
intervening party. On
the 7
th
February 2019 the first
respondent WM Trust was provisionally sequestrated with a rule nisi
being issued. The respondents are opposing
that application. The
respondents’ answering affidavit have been deposed by the
intervening party. The applicants in their
replying affidavit have
raised three points
in limine
. The first point
in limine
is that the intervening party has no
locus standi
as he is an
unrehabilitated insolvent and therefore prohibited to hold office as
per the provisions of WM Trust deed. They further
submitted that as
he is not a trustee he could not have been properly authorised to
oppose the application on behalf of WM Trust.
The second point
in
limine
is that of authority to act. With regard to the second
point
in limine
the applicants have submitted that the
attorneys purporting to represent the second respondent in this
application could not have
been properly authorised to do so. The
third point
in limine
is that of estoppel. With regard to this
point
in limine
, the applicants are submitting that the second
respondent is precluded from denying the truth of his authority in
the settlement
agreement that he had signed by virtue of the doctrine
of estoppel.
[6]
The intervening party has brought an application to intervene and be
admitted as the fifth
respondent in his personal capacity as he
alleges that he is having direct and substantial interest in the
application. He has
conceded that currently his estate has been
sequestrated. He is alleging that when he entered into the agreement
of the deed of
trust that created WM Trust, he did so in his personal
capacity. He further stated that the third respondent had immigrated
to
Australia whilst the fourth respondent to his knowledge is
deceased.
[7]
The applicants are opposing the intervention application. The grounds
of their opposition
is that the intervening party remains an
unrehabilitated insolvent, and on that basis alone he is prohibited
from pursuing the
relief he is seeking. According to the applicants,
the intervening party has no right to enforce, vary or revoke the
terms of the
trust, and therefore has no legal standing in relation
to the affairs of the trust. The applicants submit that the
intervening
party has no interest in the outcome of the main
application in his personal capacity.
[8]
The return date of the rule nisi was on the 30
th
April
2019. On the return date the rule nisi was extended to the 18
th
June 2019 and on that date it was ordered that if payment is not
received by the return date, then a final order will be
granted. It was further ordered that the service on the other
trustees may be effected on the second respondent (intervening
party). On the 18
th
June 2019 the rule nisi was
extended to the 23
rd
October 2019 and on that date the
intervention application was argued. The rule nisi was extended to
the 17
th
February 2020.
[9]
On 14
th
October 2019, the applicants have launched an
application for leave to file a supplementary affidavit. By consent
between the parties
leave to file the applicants’ supplementary
affidavit was granted.
[10]
In the supplementary affidavit, the applicants are stating that the
settlement agreement that was signed
on the 9
th
May 2018
was made an order of court on the 31
st
January 2019.
The intervening party has brought an application for the
rescission of that order which was dismissed by Muller
J on the 19
th
September 2019. The basis for dismissing the intervening party’s
application was that he was an unrehabilitated insolvent,
and
therefore, did not have the requisite
locus standi
to pursue
the relief he was seeking. The applicants are therefore submitting
that since the intervening party is an unrehabilitated
insolvent, does not have the requisites
locus standi
to oppose
the main application and to launch the application for intervention.
The applicants further state that when they launch
their
application, they were under the impression that all trustees cited
where trustees of WM Trust at the time.
[11]
In an application for intervention, the test which must be applied is
whether the applicant has
a direct and substantial interest in the
subject matter of the litigation.
In
SARDA v Land Claims Commission
[1]
Jafta J
said:
“
It
is now settled law that an applicant for intervention must meet the
direct and substantial interest test in order to succeed.
What
constitutes a direct and substantial interest is the legal interest
in the subject –matter of the case which could be
prejudicially
affected by the order of the court. This means that the applicant
must show that it has a right adversely affected
or likely to be
affected by the order sought. But the applicant does not have to
satisfy the court at that stage of intervention
that it will succeed.
It is sufficient for such applicant to make allegations which, if
proved, would entitle it to the relief.”
[12]
In determining what constitute direct and substantial interest in
Gordon v
Department of Health Kwazulu –Natal
[2]
Mlambo
JA as he was then said:
“…
In the
Amalgamated Engineering Union case (supra) it was found that the
question of joinder should …not depend on the nature
of
subject –matter …but…on the manner in which, and
the extent to which, the court’s order may affect
the interest
of third parties. The court formulated the approach as, first, to
consider whether the third party would have locus
standi to claim
relief concerning the same subject-matter, and then to examine
whether the situation could arise in which, because
the third party
had not been joined, any order the court might make would not be res
judicata against him, entitling him to approach
the courts again
concerning the same subject –matter and possibly obtain an
order irreconcilable with the order made in the
first instance. This
has been found to mean that if the order or judgment sought cannot be
sustained and carried into effect without
necessarily prejudicing the
interest of a party or parties not joined in the proceedings, then
that party or parties have a legal
interest in the matter and must be
joined.”
[13]
The settlement agreement that was made an order of court on 31
st
January 2019 was signed on the 9
th
May 2018. At the time
of signing of the settlement agreement, the intervening party was an
unrehabilitated insolvent, having been
finally sequestrated on the
30
th
April 2018. That agreement he had signed it in his
personal capacity and on behalf of WM Trust, Solitaire Trust and the
Company.
After the agreement was signed, the intervening party
brought a rescission application rescinding the order of the 30
th
April 2018, which was granted on unopposed basis.
[14]
In the present sequestration application, the applicants are seeking
to sequestrate WM Trust, and the trustees
were cited in their
official capacities. The provisional order granted on the 7
th
February 2019 is against WM Trust IT 3648/94. On the papers before
me, there is no order that was filed which shows that after
the
intervening party had rescinded his sequestration order on the 26
th
June 2018 he was again provisionally or finally sequestrated for the
second time. However, counsel for the intervening party in
the case
before Muller J and in the matter at hand has conceded that he is an
unrehabilitated insolvent. The court will therefore
take it that the
intervening party is an unrehabilitated insolvent.
[15]
It is common cause the intervening party is the only remaining
trustee of WM Trust since the third respondent
has emigrated to
Australia whilst the fourth respondent has passed away. The
applicants when they signed the settlement agreement,
they were aware
that they are entering into an agreement with an unrehabilitated
insolvent and that explains why he signed the
agreement in his
personal capacity. Now that he wants to exercise his rights in terms
of the agreement, he is reminded that he
is precluded to do so since
he is an unrehabilitated insolvent.
[16]
The question is whether an unrehabilitated insolvent can enter into a
valid settlement agreement and when
he wants to exercise his rights
in terms of the agreement he is precluded to do so on the basis of
being an unrehabilitated insolvent.
If indeed he was unrehabilitated
at the time of signing of the settlement agreement, does it not
render the agreement void? That
is not the issue I am called upon to
determine. In terms of the order of the 30
th
April 2019,
service on other trustees may be effected on the intervening party.
That alone makes the intervening party an interested
party to the
matter at hand. What will be the purpose of serving the papers on him
if he does not have an interest in the subject
matter.
[17]
The applicants in their supplementary affidavit have stated that the
main application is essentially based
on a settlement agreement
entered into between the applicants and a number of other parties
which include the intervening party
and WM Trust. Since the
intervening party has signed the settlement agreement in his personal
capacity and the main application
is being based on it, and the order
of the 30
th
April 2019 state that service on the other
trustees may be effected on the intervening party, I am satisfied
that the intervening
party in his personal capacity has a direct and
substantial interest in the subject matter and that he may be
affected prejudicially
by the judgment of the court in the main
application.
[18]
The intervening party has already served and filed an answering
affidavit in his capacity as a trustee of
the WM Trust. In my view,
the answering affidavit already filed will stand also as his
answering affidavit. However, should he
wish to supplement his
answering affidavit he should do so within 15 days of delivery of
this judgment, and the applicants to serve
and file their replying
supplementary affidavit within 10 days of receipt of the intervening
party’s supplementary answering
affidavit should they wish to
do so.
[19]
In the results I make the following order.
19.1
The intervening party is admitted as the fifth respondent in this
application
19.2
The second respondent’s answering affidavit to stand as the
intervening party’s answering affidavit.
19.3 Should
the intervening party wish to supplement his papers he should do
so within 15 days of delivery of
this judgment, and the applicants
should they wish to reply, they should do so within 10 days of
receipt of the intervening
party’s supplementary
answering affidavit.
19.4
The applicants to pay the intervening party’s costs on party
and party scale.
MF. KGANYAGO J
JUDGE OF HIGH COURT OF
SOUTH AFRICA, LIMPOPO DIVISION, POLOKWANE
APPEARANCE:
FOR THE APPLICANT
:
ADV.
P LOURENS
INSTRUCTED BY
:
ROESTOFF ATTORNEYS
PROFORUM
BUILDING UNIT 2 ISMINI OFFICE
FOR THE RESPONDENTS
: ADV. GJ DIAMOND
INSTRUCTED BY
:
DIAMOND
INC
2A
PIERRE STREET BENDOR
DATE OF HEARING
:
23
RD
OCTOBER 2019
DATE
OF JUDGEMENT :
12
TH
DECEMBER 2019
[1]
2017(5) SA 1 (CC) at para 9
[2]
2008(6) Sa 522(SCA) at 529 D-F