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[2019] ZAFSHC 68
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Matsepe N.O and Others v The Master of the High Court and Others (5081-2017) [2019] ZAFSHC 68 (20 May 2019)
IN THE HIGH COURT
OF SOUTH AFRICA
FREE STATE
DIVISION, BLOEMFONTEIN
Reportable:
NO
Of
Interest to other Judges:
NO
Circulate
to Magistrates:
YES
Case No.:5081/2017
In the matter between:
TSIU
VINCENT MATSEPE N.O.
FIRST
APPLICANT
OTTLIE
ANTON NOORDMAN N.O.
SECOND
APPLICANT
TSIU
VINCENT MATSEPE
THIRD
APPLICANT
OTTLIE
ANTON NOORDMAN
FOURTH
APPLICANT
and
THE MASTER OF THE HIGH COURT FIRST
RESPONDENT
BLOEMFONTEIN
P
FOURIE N.O.
SECOND RESPONDENT
ELIZABETH MARIA VENTER
FIRST
INTERVENING PARTY
SAREL JOHANNES WESSELS
SECOND INTERVENING PARTY
CORAM:
VAN ZYL, J
e
t
I VAN RHYN, AJ
JUDGMENT
BY:
I
VAN RHYN, AJ
HEARD
ON:
18
FEBRUARY 2019
DELIVERED
ON:
20
MAY 2019
INTRODUCTION
[1]
This
is an application to review and set aside the decision of the first
respondent (“the Master”) to remove the first
and second
applicants as joint liquidators of a company known as Sebal
Beleggings (Pty) Ltd (in liquidation), (“the
Company”).The
applicants furthermore pray that condonation be granted for the late
lodging of the review application and
an order for costs on a
punitive scale.
[2]
First and second applicants are the joint liquidators
of the Company. Both liquidators are furthermore cited in
their personal capacities as third and fourth applicants respectively
on the basis that they are funding this application personally.
The
first respondent is the Master of the High Court, Bloemfontein (“the
Master”) cited in his statutory capacity for
purposes of the
relief claimed herein. The second respondent, Philip Fourie N.O, an
insolvency practitioner of Pretoria, was also
appointed as a
liquidator in the estate of the Company. No relief is sought from the
second respondent and he did not take part
in these proceedings.
[3] The application is
opposed by the Master. Ms. E M Venter (the first intervening party),
sole director of the Company and her brother, Mr. Sarel Wessels (the
second intervening party), launched an application to intervene
and
leave to intervene was granted by Rapai J on 30 August 2018. The
costs of the application to intervene were reserved.
The intervening
parties did not file answering affidavits in the review application,
but heads of argument were filed by and counsel
appeared on their
behalf at the hearing of the application.
BACKGROUND FACTS.
[4] On 13 August 2012 the
Company was wound-up by way of a special resolution passed
on 8
August 2012 by the sole director and shareholder, the first
intervening party. The first and second applicants were appointed
by
the Master as joint liquidators in the insolvent estate of the
Company on 22 November 2012. The second respondent was at some
later
stage appointed as a joint liquidator.
[5] The Master received three
complaints concerning the conduct of the first and second applicants
in their capacities as liquidators and was obliged to investigate the
conduct of the liquidators in terms of the provisions of
section 381
of the Companies Act, No 61 of 1973, as amended (“the Act”)
read with item 9 of Schedule 5 of the
Companies Act No 71 of 2008
.
The complaints, dated 28 November 2016, 6 December 2016 and 7
December 2016, emanated from the second intervening party, (“Mr
Sarel Wessels”) and his attorney, Mr. Pieter Willers. On
instructions of the Master, the complaints were forwarded via e-mail
by an Assistant Master, Ms Antionette Minnie, to the first and second
applicants for their comments. On 2 December 2016 the Master
requested their written comments on the complaints raised by Mr.
Sarel Wessels. On 9 December 2016 the Master requested the first
and
second applicants to provide a clear exposition of monies received by
the liquidators
[6] An initial response was
received from Matsepes Attorneys on 14 December 2016 and
it was
assumed by the Master that the response was compiled and delivered by
Mr. Senekal who acted as the liquidators’ attorney.
The Master
was not satisfied with the reply received and on 22 December 2016 a
further request to provide information was dispatched
to the first
and second applicants. Further responses to the Master’s
queries were received dated 5 January 2017 and 16 January
2017
respectively.
[7] On 20 January 2017 the
Master informed the first and second applicants of his intention
to
remove them as liquidators in terms of the provisions of section
379(1)(e) of the Act. The Master indicated that he will remove
the
first and second applicants as liquidators in the event of them
failing to obtain a court order within fourteen days from date
of his
letter, restraining him from proceeding to remove them from office as
indicated.
[8] The applicants issued
proceedings under case number 567/2017 for an interdict restraining
the Master from removing them as liquidators pending a review of his
decision dated 20 January 2017. The Master undertook not to
remove
the first and second applicants pending finalization of the interdict
proceedings and later it was decided not to remove
the first and
second applicants as liquidators pending the review application.
[9] At the hearing of this
matter the parties agreed that the true nature of these proceedings
is to obtain an order prohibiting the Master from removing the first
and second applicants as liquidators. On the basis that the
Master
had already decided to remove the first and second applicants from
office as stated in his letter dated 20 January 2017,
and since the
execution of his decision was suspended pending the outcome of this
application, it was agreed that the adjudication
of the matter should
then proceed on the basis of a review of the Masters decision to
remove the first and second applicants as
liquidators of the Company.
[10] On 15 February 2019 the
first applicant, in his representative as well as his personal
capacity (as third applicant) entered into an agreement with the
intervening parties to settle the dispute between them and to
withdraw his review application. The intervening parties and the
first and third applicant agreed that, in respect of the review
application, each party will pay his or her own costs. With
reservation of certain specified rights pertaining to any inference
of malpractice as set out in the settlement agreement, the first
applicant undertook to take the necessary steps to resign as
liquidator of the Company with immediate effect.
[11] On behalf of the Master it was contended that the
settlement agreement was entered into and between the intervening
parties and the first and third applicants. He was not a party to the
settlement agreement. The Master however did not object to
making the
settlement agreement between the first and third applicant and the
intervening parties, an order of court with the exclusion
of
paragraphs 3 and 5 thereof. On 19 February 2019, at the hearing of
the review application, the settlement agreement dated 15
February
2019, with the exclusion of paragraphs 3 and 5 thereof, was therefore
made an order of court.
THE MASTER’S REASONS FOR REMOVING THE FIRST AND SECOND
APPLICANTS FROM OFFICE.
The first complaint
.
[12] The Master found that the
first and second applicants contravened the provisions of section
386(1)(c) and section 386(3)(b) of the Act by incurring a financial
liability on behalf of the Company in liquidation without the
creditors having passed a resolution to that effect.
Section 386(1)(c) of the Act provides as follows:
“
General powers.-
(1) The liquidator in any winding-up shall have power-
(a)…
(b)…
(c) to draw, accept, make and endorse any bill of exchange or
promissory note in the name and on behalf of the Company;
provided
that no liquidator shall, except with the leave of the court or the
authority referred to in subsection (3) or (4), or
for the purpose of
carrying on the business of the Company in terms of subsection (4)(f)
have power to impose any additional liabilities
upon the Company
;”
(my underlining)
Section 386(3)(b) provides as follows
:
“
(3) The liquidator of a Company-
(a)…
(b) in a creditors’
voluntary winding –up, with the authority granted
by a meeting of creditors; and
(c) …
shall have the powers mentioned in subsection (4).”
[13] There are certain powers which the
liquidator may exercise only if granted authority to do so. The
powers in ss (4) that may be exercised only with such authority,
relevant to the present matter, are the powers to carry on or
discontinue any part of the business of the company in so far as may
be necessary for its beneficial winding-up and to sell any
movable or
immovable property of the company by public auction, public tender or
private contract.
[14] The first complaint concerns a loan
agreement dated 29 January 2013 entered into and between the first
and second applicants, on behalf of the Company and the Robyn Trust.
The first and second applicants decided to sell some of the
Company’s
immovable properties to settle the amount of R 6 725 395.59
owed to First National Bank in order to facilitate
the cancelling of
the bonds registered against the title deeds of four farms
belonging to the Company. The remaining secured
creditor was BKB with
a claim amounting to R1 965 153.70. Mr. Senekal negotiated
a loan from Robyn Trust in the amount
of R3 000 000.00
payable to the first and second applicants. The first and second
applicants were to appropriate the
amount to settle the claim of BKB
and to settle a further amount of R40 000.00 owed by the Company
to First National Bank.
The balance of the loan was to be paid to the
liquidators for their administration costs.
[15] It was recorded in paragraph 4 of the
loan agreement that, due to the liquidation of the Company,
the
Company cannot incur any liability towards repayment of the loan
amount, therefore Mr. Tiaan Wessels (referred to as the fifth
party
in the agreement) undertook to repay the amount of R2 500 000.00
with interest as set out in paragraph 1 of the
loan agreement. Ms. E
M Venter (the fourth party to the agreement) undertook to see to the
registering of a first bond in the amount
of R3 000 000.00,
over an unidentified property subsequent to the suspension of the
liquidation of the Company. In terms
of paragraph 6 of the loan
agreement Ms. E M Venter, Mr. Tiaan Wessels and Mr. Sarel Wessels
undertook not to amend the written
agreement between the parties.
Matsepes Attorneys, as represented by Mr. Senekal, furthermore gave
an irrevocable mandate for the
registration of a bond as envisaged by
the parties. How an attorney acting on behalf of the liquidators
could provide a mandate
for the registration of a bond, without
specifying which property would be encumbered and who the owner of
the property is, is
uncertain and raises questions as to the legality
of the proposed registration of the bond. Mr. Tiaan Wessels offered
his game,
excluding his buffalo, as security for repayment of the
amount of R3 000 000.00.
[16] The contents of paragraph 8 of the Loan
Agreement are contentious. Paragraph 8 reads as follows: “
Die
partye tot hierdie ooreenkoms kom verder ooreen dat sou die vyfde
party hierdie verskuldigde bedrag betaal, die eerste party
sy reg in
en tot alle sekuriteit hiermee oormaak van (sic) die vyfde party. Die
vierde party onderneem hiermee om die betalings
indien enige gemaak
deur die vyfde party namens en ten behoewe van die vierde party
hiermee terugbetaal word binne dieselfde tydperk
soos wat vyfde party
aan eerste party betaal het.”
For the same reason the
content of paragraph 18 is also quoted: “
Die partye bevestig
dan verder hiermee dat sou daar enige regsaksie geneem word vir die
vordering van hierdie uitstaande bedrae,
die eerste party, synde
Sebal Beleggings Registrasie nommer 600/012369/07 asook vierde en
vyfde en sesde party hulle self hiermee
verbind as borg en mede
hoofskuldenaar vir die nakoming van die verpligtinge in terme van
hierdie ooreenkoms”.
In terms of the agreement the first
party was Robyn Trust and not the Company.
[17] On behalf of the first and second
applicants it was argued that the first complaint that the applicants
incurred a loan on behalf of the Company is factually incorrect. The
loan obligations were incurred by Mr. Tiaan Wessels who had
to repay
the loan amount. The applicants argued that it was expressly recorded
in paragraph 4 of the loan agreement that, as a
result of the
winding-up of the Company, no liabilities could be incurred by the
Company. In his answering affidavit the Master
furthermore referred
to paragraph 18 of the Loan Agreement which, according to him, caused
a liability for the Company.
[18] The applicants contended that any
possible liability incurred by the Company can only arise post
winding up. During August 2015 under case number 3671/2015 the Robyn
Trust launched an application for the conversion of the voluntary
liquidation of the Company to a compulsory liquidation based on the
claims of Robyn Trust against it. It was argued on behalf of
the
applicants that the application for the compulsory liquidation was
not based on the non-compliance of the provisions of the
Loan
Agreement but due to the cession of the claim of BKB to Robyn Trust.
[19] It is clear from the contents of the
Loan Agreement and the averments contained in the founding affidavit
that the purpose of the Loan Agreement was to provide financial
assistance for the benefit of the Company in liquidation and to
settle the Company’s debt with BKB and First National Bank. The
Wessels family apparently conducted a family business on
the farm
Oshoek referred to a “Lechwe Lodge”. The object of the
Loan Agreement was to retain the farm Oshoek for the
family and to
continue with the business of the lodge. In terms of the provisions
of paragraph 2.3 and paragraph 3 of the Loan
Agreement, which
essentially contains the same terms, the director of the Company, Ms.
E M Venter, authorised the first and second
applicants to settle the
debts of the Company and to utilise the remainder of the amount to
settle the administration costs of
the Company. According to the
Master the loan amount was earmarked for the benefit of the Company
and the argument advanced by
the first and second applicants that the
Loan Agreement did not concern the Company as such but was concluded
between Mr. Tiaan
Wessels and the Robyn Trust, is incorrect.
[20] In terms of the Loan Agreement the Company is
represented by E M Venter in her capacity as the only director
of
Sebal Beleggings as well as in her “…
persoonlike
hoedanigheid as enigste direkteur en hierna verwys as vierde party”
Paragraph 8 provides that the Company will repay the
amount paid by Tiaan Wessels on behalf of the Company without stating
that such repayments will only commence subsequent to the liquidation
order being uplifted. On this interpretation the Company
acquired an
additional obligation to repay the loan amount to Mr. Tiaan Wessels.
In terms of paragraph 18 of the Loan Agreement,
the Company
furthermore acquired the additional obligation as a surety.
[21] The parties to the Loan Agreement
concluded that the terms of the Loan Agreement will not be amended
without the amendment being reduced to writing and “…
deur beide partye geteken (sic) is nie.”
Not only
was the amount of the loan reduced from the original amount of
R3 000 000.00 to R2 500 000.00
but the parties
clearly did not agree on the interest rate to be applicable. It was
agreed that interest on the amount of R2 500 000.00,
as set
out in paragraph 1 of the agreement, will be applicable. However, no
mention of the interest rate is made in paragraph 1
of the agreement.
The Loan Agreement is a poorly drafted contract which is for the most
part vague and furthermore contains incomprehensible
terms and
conditions. The Master’s finding that the provisions of
paragraphs 8 and 18 place a conditional obligation on the
Company in
liquidation cannot be faulted.
The second complaint.
[22] The Master held that the first and
second applicants contravened the provisions of section 384(3)
of the
Act and the common law by allowing Matsepes Attorneys to act as the
conveyancers in respect of the transfer of the farms,
registered in
the name of the Company, to the Robyn Trust.
[23] In terms of Resolution 3, approved by
the creditors, the first and second applicants were authorised
to
sell the assets of the Company by public auction or private treaty.
In terms of Resolution 9 the sale of the assets by public
auction was
confirmed. Matsepes Attorneys was appointed to attend to the
transfer of the property in terms of the provisions
of Paragraph 3 of
the agreement of sale entered into and between the first and second
applicants and the Robyn Trust. Both first
and second applicants were
practising attorneys at Matsepes Attorneys at the time.
[24] Section 384 of the Act provides for the
remuneration of a liquidator. In particular Section 384(3)
provides
as follows:
'' No person who employs or is a fellow employee or in
the ordinary employment of the liquidator, shall be entitled to
receive any
remuneration out of assets of the Company concerned for
services rendered in the winding-up thereof and no liquidator shall
be
entitled either by himself or his partner to receive out of the
assets of the Company any remuneration for his services except the
remuneration that he is entitled to receive under this Act.”
[25] The applicants opined that the
conveyancer did not receive remuneration out of the assets of the
Company for his services. The purchaser was obliged to pay to
Matsepes Attorneys all fees and costs pertaining to the transfer of
the property in terms of paragraph 6 and more particularly paragraph
6.1 - 6.3 of the agreement of sale. It was furthermore
argued
that the Master has since converted the complaint and added the
further proviso that no specific resolution was passed in
terms
whereof Matsepes Attorneys was authorised to act as conveyancers of
the property registered in the name of the Company.
[26] In the winding-up of a company a
liquidator stands in a fiduciary relationship to the company, to
the
body of creditors of the company as well as to the body of its
members as a whole. He/ she therefore occupies a position in
some
ways analogous to that of a trustee.
[1]
A liquidator should be wholly independent, should regard equally the
interests of all creditors, and should carry out his duties
without
fear, favour or prejudice.
[2]
[27] In Commentary on the
Companies Act
[3
]
the learned authors state the following regarding the fiduciary
relationship of a liquidator: “
He may not act in any matter
in which he has a personal interest or a duty which conflicts, or
which might possibly conflict, with
his duties as liquidator of the
Company.
” A good cause for the removal of a
liquidator is if it appears that the liquidator, through some
relationship, direct
or indirect, with the Company or its management
or any particular person concerned in its affairs or from his
connection with other
parties or from circumstances in which he is
involved, that he is in a position of actual or apparent conflict of
interest and
not wholly independent.
[4]
[28] In another insolvent estate referred to
by the applicants, the Master, with reference to
Edmeades, de Kock
& Orffer v Die Meester
,
[5]
decided that creditors could approve by resolution that
additional fees be paid to a liquidator, for example conveyancing
fees. However, due to the failure of the liquidators, in this matter,
to obtain a resolution from the creditors to appoint Matsepes
Attorneys as conveyancers, the Master held that the additional fees
acquired by the liquidator through the transfer of the property
by a
partner or co-director of Matsepes Attorneys, was in contravention of
section 384(3) of the Act.
[29] The facts in the
Edmeades
matter
concerned the administration of an estate by an executor. In his will
the testator appointed a firm of attorneys, Edmeades,
De Kok &
Orffer Attorneys of Bultfontein in the Free State, as administrators
of his estate and a partner of the firm as the
executor of his estate
with instructions to sell his farm after his death. The executor
instructed the firm of attorneys to sell
the farm by public auction.
Subsequent to the sale of the farm the executor included the firm’s
claim for (sales) commission
in the amount of R779.47 in the
liquidation and distribution account. The Master, at the time,
refused to approve the claim. In
his judgment M T Steyn J (as
he then was) referred to the work of Meyerowitz, The Law and Practice
of Administration of Estates
(fourth edition) and quoted the
following principles: “
The executor occupies a fiduciary
position and must not, therefore, engage in a transaction by which he
will personally acquire
an interest adverse to his duty. It is for
this reason that an executor who also acts on behalf of the estate in
a professional
capacity cannot charge fees for the work he may
perform in that capacity…So strict is the principle that even
if the estate
is successful in a legal action and costs are awarded
against the other party they cannot be recovered, except for
disbursements,
nor can conveyancing charges for auctioneering fees be
recovered from the purchasers of property, although such was the
condition
of purchase. If any fees are recovered by the executor they
must be paid into the estate.”
[6]
[30] In the case of
re Estate Pretorius
[7]
it was held that: “
If the executor is the partner in a
firm of solicitors, the firm can only charge out of pocket expenses
even though the business
is done by one of the partners who is not
the executor, Collins v Carey,
2 Beav. 149
; Christophers v White, 10
Baev. 523
” In the
Edmeades
matter, Steyn J referred
to both English cases reported in Beaven’s Reports, Rolls
Court 1838-1866 and quoted the following
from the
Christophers
v White
case: “
I do not think that the circumstances of
this case are such as to warrant the court in making it an exception
to the admitted rule.
A trustee is not allowed to act as his own
solicitor and then charge his cestui que trust with the amount of his
professional fees.
The rule admits one exception when the testator or
creator of the trust expressly authorises the trustee to retain his
professional
costs, showing thereby, that he would rather run the
risk of abuse by uniting the two characters, and pay the solicitor
his costs,
than lose his services as trustee. The principal fact here
stated is that the business was not done by the trustee, he being
incapable
from ill-health, but that the whole was done by his
partner. It was done, however, for his profit as partner, and is the
same as
if two partners divide their business, one attending to the
law departments and the other to the equity, in which case each acts
for the profit of the other. Would this Court allow a trustee to say
to his partner, ‘You shall act as solicitor, and earn
all the
profit you can for the concern’ I think that could not be
maintained. For the business done during the life of Mr.
Clement only
costs out of pocket can be allowed.”
[31] In
Edmeades
it was held that, due
to the distinction between an executor and an administrator, and the
appointment of the attorneys as the administrator
of the deceased’s
estate, which had no legal effect, the firm of attorneys was entitled
to payment of their fees. The remuneration
to which a trustee is
entitled covers all the services of whatever nature rendered by him
and consequently he may not lawfully
charge the estate in addition
for services rendered by him as attorney,
[8]
auctioneer,
[9]
Conveyancer
[10]
or in any other capacity. The principle therefore remains that, being
in a fiduciary position, he is not entitled to make any profit
other
than his taxed remuneration out of the estate. He consequently cannot
lawfully share the remuneration paid to the auctioneer
employed on
behalf of the estate or receive any allowance from the attorney or
other person so employed.
[11]
[32] Similar to section 384(3) of the Act,
section 63(2)
of the
Insolvency Act No 24 of 1936
provides that no
person who employs or is a fellow -employee of or in the ordinary
employment of the trustee, is entitled to receive
any remuneration
out of the estate for any services rendered thereto, and no trustee
is entitled by himself or his partner to receive
out of the estate
any remuneration for services rendered to the estate, except and
unless such has been taxed by the Master.
The authors of
Mars,
The Law of Insolvency in South Africa
[12]
explains the principle, by way of an example, that an auctioneer may
therefore not, by getting his clerk appointed as a trustee,
reap the
advantage from the estate by claiming both the trustee’s and
auctioneer’s commission. However, it is
specifically
pointed out by the learned authors that this disability exists only
with regard to the receipt of remuneration
out of the estate
(my underlining).
[33] The question in the matter of
Symington
NO v Die Meester
[13]
was whether the creditors could consent (by way of a resolution) to
the appointment of a firm of attorneys to assist the liquidator
in
performing certain legal work in the winding-up of the company and
receive remuneration out of the estate as if the liquidator
is not a
partner of the same firm of attorneys. On behalf of the firm of
attorneys (the applicants) it was argued that section
144(2) of the
Companies, Act 46 of 1926 was enacted for the benefit of the
creditors of a company and therefore the creditors could
waive their
benefits conferred upon them by law. Potgieter J (as he then
was) held that where public as well as individual
interests are
concerned and where public policy demands the observance of a
statute, then the benefit of its provisions cannot
be waived by the
individual, because he is not the only person who has an interest
in the liquidation. The court found
that the provisions that
the fellow employee or a person in the ordinary employment of a
liquidator is not entitled to receive
any remuneration out of
the estate was not enacted with the intent to provide a benefit for
the creditors of the Company
in liquidation.
[14]
[34] In
George Hartman & Kie v
Landdros Reitz en Andere
[15]
it was held that in an insolvent estate where the trustees
themselves had been appointed as attorneys and had also been given
the
right to payment of their attorneys’ fees and disbursements
for services which they rendered to the estate in their capacity
as
attorneys by a resolution, was in conflict with the provisions of
section 53 (5) and 63 (2) of Act 24 of 1936.
[35] The meaning of legislation must be
established both in order to apply its provisions and for the sake
of
assessing its legality. The legislative interpretation is anchored in
the intentions of the legislator and it is carried out
by way of an
examination of the text in which that intention is crystallized by
making use of a complex set of rules and guidelines.
Where this
intention is proclaimed in clear terms, either expressly or by
necessary implication, the assistance of these rules
need not be
sought. The principles of legislative interpretation are explained on
the basis that they seek to enable those who
are faced with applying
the law to give effect to the authority entrusted to those who make
the law.
[36] Legislative interpretation requires that
the court should not search for the legislator’s intentions
behind the legislation, but to treat the legislative text as the
expression of the legislator’s intention.
[16]
Consequently the aim of legislative interpretation is always subject
to the court’s duty to promote the spirit, purport and
object
of the Bill of Rights and to arrive at the intention of the
legislature. The three basic rule of interpretation is firstly,
the
Golden Rule of legislative interpretation which requires that the
language of the instrument is (usually) given its ordinary
grammatical meaning, secondly the purpose of the legislative measure
and thirdly the relevance of the context of the instrument.
The
express inclusion of one situation results in the exclusion of that
which is not mentioned. The legislator intends to advance
the public
interest and does not intend absurd results. Furthermore the
legislature does not intend harsh, onerous unjust, unequal
of
discriminatory treatment.
[17]
[37] In
Natal Joint Municipal Pension Fund
v Endumeni Municipality
[18]
it was held that: “
The present state of the law can be
expressed as follows: Interpretation is the process of attributing
meaning to the words used
in a document, be it legislation, some
other statutory instrument, or contract, having regard to the context
provided by reading
the particular provision or provisions in the
light of the document as a whole and the circumstances attendant upon
its coming
into existence. Whatever the nature of the document,
consideration must be given to the language used in the light of the
ordinary
rules of grammar and syntax; the context in which the
provision appears; the apparent purpose to which it is directed and
the material
known to those responsible for its production. Where
more than one meaning is possible each possibility must be weighed in
the
light of all these factors. The process is objective, not
subjective. A sensible meaning is to be preferred to one that leads
to
insensible or unbusinesslike results or undermines the apparent
purpose of the document
[19]
.
[38] In applying these principles the
following emerges: Section 384 of the Act deals with the
remuneration
of a liquidator. In any winding-up, including a member’s
voluntary winding-up where the Company does not determine the
liquidator’s
remuneration, the liquidator is entitled in terms
of section 384(1) of the Act to receive for his services a reasonable
remuneration
to be taxed by the Master in accordance with the
prescribed tariff of remuneration. A liquidator is entitled to
receive
out of the assets
(my underlining) of the Company only
the remuneration specified by the Act.
[20]
A liquidator cannot claim against the Company fees for services
rendered by him in a capacity other than that of a liquidator,
for
example as an attorney or auctioneer.
[21]
[39] The argument that the fees of the
conveyancer were paid by the purchaser of the immovable property
and
as such was not derived out of the assets of the Company is sound.
Paragraph 6 of the agreement of sale provides that the purchaser
will
pay the transfer fees to Matsepes Attorneys as soon as a statement of
account has been delivered to the purchaser. However
it is paramount
that a liquidator must act with care and diligence in the performance
of his duties. A high standard of care and
diligence is required of a
liquidator. One would therefore expect that in cases of uncertainty
or doubt the liquidator would, in
an effort to safeguard himself, his
co-liquidator, the Company’s members and the creditors, obtain
directions from the Master
or the court. As a fiduciary, the
liquidator must at all times act openly and in good faith and must
exercise his powers for the
benefit of the Company and the creditors
as a whole and not for his own benefit or the benefit of his fellow
employee at the same
firm of attorneys.
[22]
Usually the seller will be responsible for payment of the estate
agent’s commission and then the commission will result in
a
depletion of the company in liquidation’s assets. In the
present circumstances where the amount payable to the estate agent
is
not funded by the seller but by the purchaser, same is not derived
out of the assets of the company in liquidation. The same
argument
applies to the payment of the conveyancer’s fees. The
purchaser, Robyn Trust was responsible for payment of the
transfer
costs and not the Company.
[40] Of concern is the provision in paragraph
23.1 of the agreement of sale that the sale of the farms
is subject
to the approval of the Master as well as all the creditors of the
Company. The agreement of sale was concluded on 23
November 2012 and
according to the applicants the Master received a copy of the
agreement during July 2014. The Master was not
requested to approve
the sale of the farms as provided for in Resolution 9, nor was the
Master informed of the sale of the farms
until a year and eight
months later, during July 2014. According to the applicants the
contents of Resolution 9 provides that the
sale of the farms
per
public auction and with the approval of the Master and the main
creditors
(my underlining) was accepted. Clearly the creditors
were made to believe that the Master has approved the sale of the
farms. Not
only the creditors, but also the purchaser of the farms,
Robyn Trust and the members of the Company were made to believe that
the
contents of the agreement of sale were approved by the Master and
the
concursus creditorium.
The first and second applicants
argue that they stand accused of maladministration of the estate
notwithstanding the fact that every
action they took were in
agreement with the “
siblings and on their instructions
”.
[41] The functions of a liquidator are
essentially to control and administer the property and affairs of
the
Company and to liquidate it. A liquidator has power to sell the
immovable property on behalf of the Company after
the
winding-up thereof, provided he or she is authorised accordingly by
meetings of members and creditors, or, where he or she
cannot obtain
such authority, or the respective directions of the members and
creditors, he or she obtains directions from the
Master. If the
latter declines such authority, the leave of the Court is required.
The approval of the Master to sell (auction)
the farms of the Company
was not obtained as agreed to in the contract concluded between the
first and second applicants and the
Robyn Trust. The creditors,
seemingly only First National Bank, were obviously made to believe
that the Master approved the sale
of the immovable property of the
Company. In
Standard Bank v The Master of the High Court
[23]
Navsa JA, on behalf of the majority, held as follows:
“
Liquidators must realise that they perform important
functions. The Master, creditors and importantly courts rely on them.
In the
liquidation process they are expected to act impeccable. The
profession must be under no illusion that courts, in appropriate
circumstances,
when called upon to do so, will act to ensure the
integrity of the winding-up process.”
[42] The facts of this matter lead to the
conclusion that the agreement of sale was negotiated and agreed
upon
on the basis that the creditors of the Company, its members and the
purchaser were all made to believe that they were in fact
assenting
to the terms of the agreement as approved by the Master. Even though
I am in agreement with the contention on behalf
of the applicants
that the fees payable to the conveyancer were not being paid out of
the assets of the Company in liquidation
but by the purchaser,
the conclusion that the agreement of sale contains certain conditions
that were not complied with due
to the liquidators failure to abide
by the terms thereof, is unsettling and causes grave misgivings about
the degree of care, skill
and diligence with which they performed
their duties as liquidators. The Master’s decision to remove
the liquidators from
office in these circumstances cannot be
criticised.
The third complaint.
[43] This complaint concerns an amount of
R5000.00 paid to Matsepes Attorneys by the first and second
applicants. In terms of the provisions of section 384(1) of the Act a
liquidator is entitled to reasonable remuneration for his
services
rendered in accordance with the prescribed tariff of remuneration.
The tariff does however not make provision for travelling
allowances
or other disbursements.
[24]
A liquidator is not allowed to pay himself his remuneration until an
account providing for it has been confirmed by the Master
in terms of
section 408 of the Act.
[25]
In the applicants’ founding affidavit it was stated that the
amount was paid to Messrs Senekal and Haarhoff who attended
meetings
with the employees and the family members and assisting them to
compile “claim documents”. However in their
letter dated
16 January 2017 the applicants did not inform the Master that the
travelling costs in the amount of R5 000.00
were in fact
incurred by their attorney, Mr. Senekal, and therefore the Master
assumed that the costs were incurred by themselves
as the appointed
liquidators.
[44] At the second meeting of creditors,
resolutions were taken relating to the appointment of attorneys
and
advocates, but none of these resolutions allowed for the use of Mr.
Senekal to attend to the business activities of the Company.
The
third complaint also entails the amount of R8 942.97 which
Matsepes Attorneys debited without the Masters authorization.
The
applicants contend that the amount of R 5000.00 actually formed part
of the amount of R 8 942.97 which was the money obtained
from
the loan between Mr. Tiaan Wessels and the Robyn Trust. On behalf of
the applicants the deponent to the founding affidavit,
Mr. Noordman,
stated that the monies were earmarked as the liquidators’
‘administration costs’ and they were
in fact entitled to
debit such costs at any stage without the necessity to wait until the
Master had finally approved the liquidation
and distribution account.
In the applicants’ replying affidavit it was stated that the
expenses were incurred by Mr. Senekal
during meetings relating to the
agreements concluded with the Robyn Trust.
[45] This complaint by the Master also
relates to the provisions of section 384(3) of the Act which clearly
prohibits an employer of a liquidator to receive any remuneration out
of the assets of the Company for services rendered in the
winding-up
process. A person in the ordinary employment of a liquidator or the
liquidator’s fellow employee may also not
receive remuneration
out of the assets of the Company. The question remains whether Mr.
Senekal, who acted as the liquidators’
attorney, could be paid
for his and Mr. Haarhoff’s travelling expenses to assist in the
liquidation process and to explain
to the family members and the
employees of the Company their rights.
[46]
On behalf of the Master it was submitted that the liquidators, both
being attorneys, had no need to
appoint an attorney to assist them
with the liquidation process.
The
Master has raised concerns about this practice, stating that the
liquidators should and could have dealt with their duties and
obligations without the assistance of Mr. Senekal. Clearly there was
no need to appoint Mr. Senekal and/or Mr. Haarhoff (also an
employee
of Matsepes Attorneys) to consult with the family members and explain
their rights to them or to assist with the completion
of the claim
documents. Those were the functions and duties of the liquidators. As
in the case of a trustee, a liquidator may appoint
an agent to
perform an act of administration on his behalf; but he is not allowed
to delegate his statutory powers or obligations
generally to
another.
[26]
His
attempt to have done so is to be regarded as misconduct which would
ordinarily justify his removal from office.
[27]
[47]
Whether Mr. Senekal travelled to the farm of the Company to consult
with the family members and employees
of the Company or whether he
convened meetings to conclude the loan agreement, or the fees
agreement or the sale agreement of the
immovable property, surely
those were the duties of the liquidators. None of the resolutions
taken by the creditors at the second
meeting authorized the
liquidators to appoint an attorney to attend to the functions
normally performed by a liquidator. A liquidator
may not receive his
remuneration or part thereof, unless the Master or the court permits
same, until such account has been confirmed
by the Master. The Master
concluded that the liquidators should be removed from office
inter
alia
due to his finding that the liquidators are no longer suitable to be
the liquidators of the Company. I agree that the appointment
of Mr.
Senekal creates a suspicion of partiality or conflict of interest due
to the fact that both the appointed liquidators and
Mr. Senekal were
at the time practicing as attorneys at Matsepes Attorneys. The
inference that the liquidators did not act independently
and their
interest may have caused conflict with their duty as liquidators is
not farfetched.
[28]
The
fourth complaint.
[48] The fourth
complaint also concerns the sale agreement concluded between the
first and second
applicants, on behalf of the Company, and the
purchaser of the farms on 23 November 2012. In terms of the agreement
of sale the
purchaser was obliged to pay commission to the estate
agent calculated at 2% of the purchase price. According to the first
and
second applicants and due to the purchaser’s unwillingness
to continue with the agreement on the basis that the commission
calculated at 2% be payable, it was decided to amend the agreement
orally on the basis that both the purchaser and the Company
will
effect payment of the commission to the estate agent calculated at 1%
each.
[49] On
behalf of the applicants it was contended that the purchaser
indicated at the last minute
that it was only prepared to pay 1%
commission and not the agreed 2%. The liquidators, with the consent
of the family members,
especially Mr. Sarel Wessels, therefore had no
hesitation to decide that the Company is willing to accept the
amendment of the
agreement in terms of which the other 1% commission,
owed to the estate agent, will be paid by the Company in liquidation.
It was
further contended that the decision to amend the written
agreement was a business decision and to prevent the cancellation of
the
sale.
[50]
The Master is of the view that the amendment of the agreement
resulted in a loss for the Company and
less money being available for
distribution amongst the
concursus
creditorum
and
therefore the amendment placed an additional burden on the Company.
The amendment was in furthermore contrary to the non-variation
clause
contained in paragraph 14 of the agreement of sale. The oral
amendment of the agreement of sale was also a contravention
of the
formalities applicable to the alienation of land.
[29]
[51]
The
creditors of a company are interested parties for purposes of section
279(2) of the Act since they have a 'pecuniary or proprietary
interest in the winding up'.
[30]
In
general terms, the way in which the power to remove liquidators
should be exercised has been set out as follows by Blackman,
Jooste
and Everingham:
[31]
“
The
general principle is that the court will remove a liquidator from
office if it is satisfied on the evidence that it is against
the
interests of the liquidation, by which is meant all those who are
interested in the Company being liquidated, that he remain
in
office.”
[52]
In
Ma-Afrika
Groepbelange (Pty) Ltd v Millman and Powell
NNO
:
[32]
Van Zyl J held as follows: “
It
goes without saying that the removal of a liquidator is a radical
form of relief which will not be granted unless the Court is
satisfied that a proper case is made out therefor. In this regard it
will not be sufficient merely to show that there is an apprehension
or perception of bias, partiality, lack of independence or unfairness
on the part of the liquidator. Nor will it suffice to establish,
even
prima
facie,
that
the liquidator has not performed satisfactorily, has made
questionable decisions or committed errors of judgement. This may
well point to a lack of competence or experience, but will not
necessarily be regarded as "good cause" justifying the
removal of the liquidator. The Court is obliged to assess the conduct
of the liquidator in its full context with reference to all
relevant
facts and circumstances. And at the end of the day it is of cardinal
importance that the Court must be satisfied that
removal of the
liquidator is to the general advantage and benefit of all persons
concerned or otherwise interested in the winding-up
of the Company in
liquidation. In this regard a relevant factor is the expense which
will be incurred and inconvenience suffered
to appoint a new
liquidator for purposes of completing the work already done by his
predecessor. A Court would hence be less inclined
to remove a
liquidator at a late stage in the winding-up process than it would be
to replace him at an early stage.”
[53]
In adjudicating upon this aspect it is important to keep in mind that
both liquidators practice as
attorneys and furthermore they
throughout the liquidation process, employed the professional
services of Mr. Senekal who is referred
to in the application as
“...
a
seasoned attorney who specializes in insolvencies, he may even be one
of the most experienced attorneys in this field of the law
in the
province, if not the most”.
The first and second applicants failed to obtain the consent of the
creditors regarding the refusal of the purchaser to abide
by the
provisions of the agreement of sale. The deponent to the affidavits
filed by the applicants, Mr. Noordman contended that
he does not know
“
everything
”
concerning insolvencies and was obliged to obtain guidelines
regarding the administration of the estate from Mr. Senekal
due to
the “
complexity
of the administration of the estate of Sebal
”.
Mr. Matsepe averred in his replying affidavit that “
it
was advantageous for
[them]
to
use a colleague attorney who practiced with
[them]”.
[54] As pointed out by
counsel on behalf of the Master, Ms. Wright, Mr. Senekal did not
depose to an affidavit
to confirm the first and second applicants’
averments or to provide an explanation for his contributions
regarding the winding-up
of the Company. On several occasions it was
stated that Mr. Matsepe did not take part in the actual
administration of the estate
and according to Mr. Noordman, he
obviously placed reliance on the opinion and expertise of Mr. Senekal
and as such the question
arises whether the first and second
applicants were in fact capable and suitable to deal with the winding
up of the Company. It
was not contended by the first and second
applicants that Mr. Senekal was appointed as their agent.
[33]
It was however averred that the Wessels family was satisfied with the
way in which Mr. Senekal assisted with the winding-up of
the Company,
at least in the early stages of the liquidation process. However the
good relationship did not last long and the complaints
pertaining to
the unsuitability of the liquidators were most likely caused by the
animosity which developed between Mr. Sarel Wessels
and Mr. Senekal.
Prior to the hearing of the review application, Mr. Senekal withdrew
as the applicants’ attorney of record.
[55] The Master further
took note of the allegation made by Mr. Noordman that Mr. Senekal
indicated that
the books of account of the Company were in a “mess”.
Immediately after his appointment, the liquidator must open a
book or
other record wherein he shall enter from time to time a statement of
all moneys, goods, books, accounts and other documents
received by
him on behalf of the Company.
[34]
The liquidator’s books or other records must be distinguished
from the books or other documents belonging to the Company
and the
liquidator’s books or other records may be inspected at all
reasonable times by a creditor and may be required
for
inspection by the Master. It is not certain at which stage of the
winding-up proceedings, Mr. Senekal made the discovery that
the books
of the Company were in “a mess”, but evidently the
liquidators failed to take control of and properly administer
the
property and affairs of the Company. As the Master indicated, the
Statement of Affairs forming part of the CM100 Form, included
the
claim of PWC as an unsecured creditor. Therefore the allegation by
Mr. Noordman, that when PWC “suddenly” presented
itself
as a creditor at a later stage, all the plans pertaining to the
speedy and uncomplicated winding-up of the Company fell
apart, is a
cause for concern. Mr. Noordman obviously did not take cognizance of
the claims lodged against the Company and
should have investigated
the affairs of the Company and made himself thoroughly acquainted
with the affairs of the Company in administering
the winding-up. The
same goes for Mr. Matsepe.
[56] In
Henochsberg on the
Companies Act
71 of 2008
[35]
the authors refer to the following matter:
"In Lynn NO
and Another v Coreejes and Another
[2011] JOL 27992
(SCA) the Court
held that a liquidator is a creature of statute, deriving his powers
from the
Companies Act and
the
Insolvency Act 24 of 1936
, and may act
within the bounds of those powers only. The Court went on to state
that the primary objective of
s 382(1)
is to ensure joint liquidators
act jointly, and that the second part of the section which relates to
joint liability was in its
view decisive.”
[36]
The second respondent was not mentioned by any of
the applicants in this review. His name has not been mentioned in any
of the affidavits
filed in this matter nor in the correspondence with
the Master. I agree with Ms. Wright’s submission that it would
appear
that the first and second applicants and Mr. Senekal acted
without the second respondent’s input and assistance.
[57] A liquidator must
take all measures needed for the protection and better administration
of the affairs
and property of a company. The agreement of sale
provided for payment of the estate agent’s commission at the
rate of 2%
of the purchase price. The parties imposed a restriction
on their own power of subsequent variation of their contract with the
laudable object of achieving certainty and avoiding disputes about
whether a variation has been agreed to or not by incorporating
a
non-variation clause in the agreement. The non-variation clause
provides that no variation of any of the terms of the contract
shall
be valid unless in writing. Consequently any attempt to agree
informally on the percentage of commission to be paid to the
estate
agent by the purchaser has to fail.
[37]
[58] The applicants failed
to disclose further information regarding the Robyn Trust’s
reasons for
refusing to pay the agreed 2% commission save for
alleging that the sale of the farms was placed in jeopardy. Under the
prevailing
circumstances one would expect that efforts would have
been made to re-negotiate payment of a lesser amount to the estate
agent
as a possible solution to the problem. The remedies for breach
or threatened breach of contract would have included the following
five possible solutions: specific performance, interdict, declaration
of rights, cancellation and damages.
[59] Taking the
aforementioned facts and the first and second applicants’
fiduciary duty, not only
towards the Company but also to the
creditors as a whole into consideration, one would have expected that
a serious effort would
have been made to advise the family members
concerning the chances of success on claiming specific performance of
the agreement.
Such advice would probably have resulted in a better
outcome for the Company and its creditors.
[60] The first and second
applicants’ failed to provide the court with a full disclosure
of the reasons
for Robyn Trust’s sudden objection to fulfill
the terms of the agreement and all the options that were considered.
The consequent
absence of a satisfactory explanation for the ultimate
decision by the first and second applicants and their attorney to
split
the 2% commission, results in an inference that the first and
second applicants lost their exclusive independence in the decision
making process and administration of the winding-up of the
Company.
[38]
The fifth complaint.
[61] Section 394(7) of the Act provides that
a sum of money received by a liquidator belonging to a Company
in
liquidation should be paid into the estate bank account by the day
after receipt thereof. The first and second applicants received
payment of the loan in the amount of R2.500 000.00 as well as the
purchase price of the farms. The Master concluded that the amount
of
R352 182.72 was not paid into the account of the Company on 15
February 2013 but, as depicted on the bank statement of
the Company,
the said amount less an amount of R 8 942.97 was transferred
from Matsepes Attorneys’ trust account to
the estate bank
account on 11 April 2013. The first and second applicants explained
that, due to a misunderstanding they were not
aware that the money
was paid on 15 February 2013 into Matsepes Attorneys Trust account.
They were only made aware of the payment
of the said amount, and
obviously also the transfer of the property, at a later stage.
[62] The Master contends that the provisions
of the Loan Agreement stipulated that the loan amount had
to be paid
to the liquidators. This could only be interpreted to mean that the
said amount had to be paid into the estate account
of the Company and
not into the trust account of Matsepes Attorneys. Furthermore, the
proceeds of the farms were also not paid
directly into the estate
bank account, but into the account of Matsepes Attorneys. This state
of affairs was detrimental to the
Company and the creditors. They
did not benefit from any interest on the amounts so received. The
Master rejected the explanation
provided by the first and second
applicants namely that the failure to inform Mr. Noordman that the
transfer of the property was
registered and payment had been received
caused the liquidators to only ascertain the true facts two and a
half months later.
[63] The liquidators would have been informed
that the deeds of transfer were lodged with the Registrar
of Deeds
and that the transfer of the property to the Robyn Trust was
imminent. That is the normal procedure followed by any conveyancer.
One would expect the liquidators to have kept track of the transfer
process and to inform the members of the Company, the creditors
and
Mr. Senekal of the progress. Surely Mr. Noordman would have received
regular enquiries from the “siblings” and
the creditors
regarding the outcome and progress of all their hard work and to
ascertain as to the progress made towards upliftment
of the
liquidation order.
[64] Failure to comply
with the provisions of section 394(7) of the Act, may
per
se
justify the removal of a liquidator
by the Master under section 379(1) of the Act.
The applicants
did not rely on new facts in the review application. In the result, I
am of the view that the approach discussed
by Griesel J in
Van Zyl
NO v The Master
[39]
is applicable:
" In considering this question I bear in
mind that the Master is the official entrusted by the Legislature
with the administration
of all insolvent estates (as, indeed, of all
other estates as well), including companies in liquidation. As such
the Master's rulings
ordinarily deserve some deference. For this
reason I would venture to suggest that where no new facts have been
placed before the
Court, the Court should hesitate to substitute its
own opinion for that of the Master in exercising its wide powers
under 407(4)(a)
of the Act unless it is clear that any particular
ruling by the Master is tainted by irregularity or error.”
RELEVANT STATUTORY PROVISIONS.
[65]
Section 381 of the 1973 Act provides as follows:
“
381. Control of Master over
liquidators.
–
(1) The Master shall take cognizance of the conduct of
liquidators and shall, if he has reason to believe that a liquidator
is not
faithfully performing his duties and duly observing all the
requirements imposed on him by any law or otherwise with respect to
the performance of his duties, or if any complaint is made to him by
any creditor, member or contributory in regard thereto, enquire
into
the matter and take such action thereanent as he may think expedient.
(2) The Master may at any time require any liquidator
to answer any enquiry in relation to any winding-up in which such
liquidator
is engaged, and may, if he thinks fit, examine such
liquidator or any other person on oath concerning the winding-up.”
THE
REMOVAL OF LIQUIDATORS
[66] Section 379 of the
Companies Act 61 of 1973 regulates the removal of liquidators and
provides that
The Master may remove a liquidator from his office on
the ground that he has failed to perform satisfactorily any duty
imposed
upon him by this Act or to comply with a lawful demand of the
Master or a commissioner appointed by the Court under this Act.
[40]
The majority of creditors, or in the case of a
member’s voluntary winding-up, a majority of the members of the
company may
request the Master in writing to remove the liquidator
from office
[41]
.
A further ground for the removal of a liquidator from office is that,
in the Master’s opinion, the liquidator is no longer
suitable
to be the liquidator of the Company concerned.
[67] The Court may, on application by the Master
or any interested person, remove a liquidator from office if
the
Master fails to do so in any of the circumstances mentioned in
subsection (1) or for any other good cause.
The length of time that liquidators, under threat
of removal, have been involved in the liquidation and the proximity
of the conclusion
of the liquidation, are considerations of great
relevance and was stressed by Patel J in
Hudson
and others NNO v Wilkins NO and Others
[42]
as follows: “
What
is critically important, in exercising the Court's discretion whether
or not to remove the liquidators, is the length of time
that has
continued in the winding-up of the two companies in liquidation and
the extent of the likelihood of the disruption as
well as the
additional expense that is likely to be incurred if new joint
liquidators are to take over to complete the finalization
of
winding-up of Ranch Transvaal
.”
[68] In
Ma-Afrika
Groepbelange
[43]
it was held that a court should be less inclined
to remove a liquidator at a late stage in the winding-up process.
Both liquidators
were appointed as joint liquidators in 2012 and
seven years have lapsed and a substantial volume of work has already
been done
by them. The second respondent was appointed at a later
stage during the winding-up and should be in a position to complete
the
task which has already been done by his co-liquidators.
[69] On behalf
of the Master and the intervening parties it was argued that since
Mr. Matsepe (first applicant)
tendered his resignation as
co-liquidator at the hearing of this review application, only Mr.
Noordman (the remaining second applicant)
should be removed as
liquidator in accordance with the decision of the Master. The removal
of a liquidator is an extreme step and
may negatively impact on the
reputation of a liquidator. Having regard to the animosity that
developed between the intervening
parties, specifically Mr. Sarel
Wessels and Mr. Senekal and the loss of trust in the remaining second
applicant to perform his
duties and functions under the present
circumstances, I agree with the decision of the Master that the
second applicant should
be removed from office.
COSTS.
[70] The review application was postponed on
30 August 2018. Ms. Wright, on behalf of the Master, argued
that he
did not cause the postponement and therefore the applicants should be
ordered to pay the costs of the postponements. In
my view these costs
are to be costs in the review.
[71] In so far as any of the applicants are
to be held responsible for the payment of costs, the question
arises
as to whether they should be ordered to pay such costs in their
official capacities or their personal capacities. Due to
the
misconduct of the first and second applicants in the performance of
their duties as liquidators of the Company, it is in my
view
appropriate that the court shows its displeasure with their conduct
by making a punitive costs order. The Company should not
be burdened
with the payment of any costs order. The third and/or fourth
applicants are to pay any costs orders made against the
first and/or
second applicants, in their personal capacities.
[72] The costs of the application for leave
to intervene were reserved. Counsel on behalf of the Master
argued
that the application to intervene did not contribute to the
adjudication of the review application and the intervening parties
furthermore did not file opposing affidavits. I cannot agree with
this contention. The intervening parties filed heads of argument
and
were represented by counsel at the hearing of the review application.
From the contents of the e-mails sent by Mr. Sarel Wessels
to the
Master his frustration and concern for the property of the Company
and the winding-up process, is evident. A conflict
of interests
and bitterness ensued due to a breakdown of trust in the liquidation
process. The intervening parties have a direct
interest in this
matter, but the applicants failed to cite them as respondents. They
therefore had no other option than to have
filed the application for
leave to intervene. Their application was consequently not only
successful, but also necessary. The third
and fourth applicants in
their personal capacities should therefore be ordered to pay the
costs of the application for leave to
intervene.
[73] The settlement reached between the
intervening parties and the first and third applicant (Mr. Matsepe),
does not affect the costs incurred by the Master in the review
application. Even though the costs as between the intervening parties
and the first and third applicants had been settled on the basis that
the intervening parties and the first and third applicants
will each
pay their own costs, the costs of the Master in the review
application are to be paid by the third and fourth applicants
in
their personal capacities.
[74] The settlement agreement between the
intervening parties and the first and third applicants does also
not
deal with the costs of the intervening parties in the review
application
vis-á-vis
the second and fourth applicants.
The second and fourth applicants proceeded with the review
application and unsuccessfully so.
The costs of the intervening
parties in the review application, in so far as those costs are not
covered by the agreement between
the intervening parties and the
first and third applicants, are therefore to be paid by the fourth
applicant in his personal capacity.
I
therefore make the following order:
[75]
1. The application for review is dismissed.
2. The third and fourth applicants (in their personal capacities) are
ordered to pay the first respondent’s costs of the
review
application, jointly and severally, payment by the one, the other to
be absolved.
3. The fourth applicant (in his personal capacity) is ordered to pay
the first and second intervening applicants’ costs in
the
review application.
4. The costs of the postponement of the review application on
30 August 2018, if any, are costs in the review application.
5. The third and fourth applicants (in their personal
capacities) are ordered to pay the costs of the application to
intervene,
jointly and severally, payment by the one, the other to be
absolved.
I VAN RHYN, AJ
I concur.
C VAN ZYL, J
On behalf of the First and Third
Applicant:
ADV B.H. SWART SC
Instructed
by:
MICHAEL DU PLESSIS ATTORNEYS
On behalf of the Second and
Fourth Applicant:
MR MATSEPE
Instructed
by:
MATSEPES ATTORNEYS
On behalf of the First
Respondent:
ADV G J M WRIGHT
Instructed
by:
THE
STATE ATTORNEY BLOEMFONTEIN
On behalf of
the Second Respondent:
No appearance
Instructed
by:
On behalf of the Intervening
parties:
ADV. F. J. VAN RENSBURG
Instructed
by:
WILLERS ATTORNEYS
[1]
LAWSA (4) 3 para 236 Blackman.
[2]
Bertelsman et al, Mars: The Law of Insolvency in South Africa 9
th
ED (2008) at 293 to 294.
[3]
M S Blackman et al vol 3 at 14-376.
[4]
Hudson and Others NNO v Wilkins NNO and Others
2003 (6) SA 234
(T)
at para 13; LAWSA 4(3) at
para 281.
[5]
1975 (3) SA 109 (O).
[6]
Edmeades, de
Kok & Orffer v Die Meester
1975 (3) SA 109
(O) at 112 F-H;
Estate Fawcus v
Van
Boeschoten and Lorentz
1934 TPD
94
at 98: In re Estate Cullingwoth
1936 NPD 524
at 527.
[7]
1917 TPD 211
at 214
.
[8]
African Mutual Trust &
Assurance Co v Raubenheimer’s Trustees
1912 CPD 439
;
Nieuwoudt v
Estate Van der Merwe 1928 CPD
486.
[9]
De Jager’s Trustees v The
Master 1918 CPD 535.
[10]
De Jager’s Trustees v The
Master 1918 CPD 535.
[11]
Section 59(a)
Insolvency Act 24
of 1936
.
[12]
9
th
edition, p315 para 14.30.
[13]
1960 (4) SA (O) 70.
[14]
Symington NO v die Meester 1960
(4) SA (O) 70 at 73.
[15]
1958 (4) SA 515
(O) at 518 A-E.
[16]
Jaga v Dönges; Bhana v
Dönges
1950 (4) SA 653
(A) at 664.
[17]
Du Plessis ‘Statute Law
and Interpretation’. LAWSA vol 25(1) first re-issue para 322.
[18]
2012 (4) SA 593
(SCA) at [18]
.
[19]
See: the (as yet unreported)
matter of First Rand Bank Ltd. V Nedbank Ltd. published on SAFLII
with reference (1249/17)
[2019]
ZASCA 47
(29 March 2019).
[20]
Section 384(3) of the Act.
[21]
Symington NO v Die Meester
1960
(4) SA 70
(O); Niewoudt v Estate Van der Merwe
1928 CPD 486
at 487.
[22]
Standard Bank v The Master
2010
(4) SA 405
(SCA) at 429 [112] and 430 [113]
.
[23]
2010 (4) SA 405
(SCA) at 434
[133]
.
[24]
Van Zyl NO v The Master 2000 (3) SA (CPD) at para 7.
[25]
Strydom NO v The Master 2010 (6) SA (GNP).
[26]
Powell and Another v Leach and
Another ; Leach and Others v Powell and Others [1997] 4 ALL SA
106 (W) at 117 – 118 and
the cases cited.
[27]
Allan v Erlank’s Trustees
1908 TS 1187
at 1192-1193 confirmed on appeal
1909 TS 303
at 306
referred to with approval by the
Supreme Court of Appeal in R Miller and Others v Nafcoc
Investment Holdings Company Ltd.
and Others
[2010] 4 ALL SA 44
(SCA) at paras 14-16; Smith &
CO v Van Rensburg
1913 TPD 28
at
32 -37.
[28]
Ma-Afrika Groepbelange (Pty) Ltd
and Another v Millman and Powell NNO and Another 1997 (1) SA
547 (C) at 561 H-J.
[29]
Section 2(1)
of the
Alienation
of Land Act, 68 of 1981
.
[30]
Master
of the Supreme Court v Griffith's Trustees
1909
TS 984
at 985-986;
Niewoudt
v The Master
1988
(4)
SA
513 (T), 528F-J.
[31]
Commentary
on the Companies Act
(Vol
3) Cape Town, Juta and Co: 2002, 14-313.
[32]
1997
(1) SA 547
(C), 566B-E
.
[33]
Miller v Nafcoc Investment
Holding
2010 (6) SA 390
(SCA)
.
[34]
Section 391 and Section 393 of
the 1973 Companies Ac
t.
[35]
Vol 2 at APPI - 175, the authors
give a summary of the import of section 382
[36]
Millman v Goosen 1975 (3) SA 141
(O) 145.
[37]
Independent Picture Palaces
(Pty) Ltd v Independent Film Distributors (Pty)Ltd
1936 NPD 456
at
472-474;
SA Sentrale Ko-op Graanmpy Bpk v
Shifren 1964 (4) SA 760 (A).
[38]
James v Magistrate, Wynberg 1995 (1) SA 1 (C)
[39]
2000 (3) SA 602
(CPD) at
paragraph [20].
[40]
S 379(1) (b) of the Act.
[41]
S 379 (1) (d) of the Act.
[42]
2003
(6) SA 234
(T), para 18.
[43]
supra at
566E.