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[2017] ZAGPPHC 89
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Haribhai v Da Silva N.O. and Others (95806/2015) [2017] ZAGPPHC 89 (3 March 2017)
HIGH COURT OF SOUTH
AFRICA
GAUTENG
PROVINCIAL DIVISION, PRETORIA
Case
No: 95806/2015
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
JANINE
HARIBHAI
Applicant
and
GEORGE
DA SILVA RAMALHO
N.O.
First
Respondent
PULENG
FELICITY BODIBE
N.O.
Second
Respondent
THE
MASTER OF THE HIGH COURT,
PRETORIA
Third
Respondent
Case Summary:
Insolvency
-
Application
for the removal from office as trustees in insolvent estate under the
common law
-
whether
joint trustees misconducted themselves as trustees
-
misconduct not established.
In
the alternative and under the prayer for further and/or alternative
relief, applicant sought to interdict joint trustees from
preventing
her collecting rentals
of
immovable properties
vesting in them that she requires to sustain her needs and those of
her children
-
trustees were required to answer
a
case founded on a/legations of misconduct on
their part that justify their removal from office as trustees
-
they were not called upon to raise
a
defence
to the alternative interdictory relief
-
insofar
as they have dealt with applicant's claim to rentals, it is
impermissible to consider their answering affidavit in isolation,
divorced from the context of the case they were called upon to
answer.
Application
dismissed.
JUDGMENT
MEYER,
J
[1]
The applicant, Mrs Janine Haribhai, applies under the common law for
the removal from office of the first and second respondents,
Mr
George Da Silva Ramalho
N.O.
and Ms Puleng Felicity Bodibe N.O. (the trustees), as trustees of the
insolvent estate of her husband, Mr Dinesh Haribhai (the
insolvent).
[2]
The court, and in certain instances the master of the high court,
have the power to remove a trustee from office in terms of
the
provisions of the
Insolvency Act 24 of 1936
. But the court also
derives that power from the common law to remove the trustee of an
insolvent estate on the grounds of his or
her misconduct as a
trustee, which power has not been displaced by the
Insolvency Act.
(See
Fey
&
Whiteford v Serfontein
1993 (2) SA 605
(A).)
[3]
The factual matrix surrounding the present application is briefly the
following: The applicant and the insolvent were married
in community
of property on 20 January 1996. They acquired five residential
immovable properties as co-owners, which properties
are all mortgaged
to Standard Bank of South Africa Ltd (Standard Bank). On 10 June
2008, this court granted an order in terms of
which they were given
leave, in terms of
s 21
of the
Matrimonial Property Act 88 of 1984
,
to change their matrimonial property regime from a marriage in
community of property to one out of community of property with
the
exclusion of the accrual system and authorising them to execute such
a notarial contract and the Registrar of Deeds, Johannesburg
to
register the notarial contract. They executed the notarial contract
and it was registered on 17 July 2008. In terms thereof,
each one of
them would be vested with a 50% share in the ownership of one of the
immovable properties and full ownership of the
other four immovable
properties would vest in the insolvent. Transfer of the immovable
properties into the name of the insolvent
was never effected due to
the indebtedness owed to Standard Bank and its refusal to consent to
the cancellations of the mortgage
bonds in its favour.
[4]
The insolvent's estate was sequestrated on 26 September 2013. The
trustees were appointed on 5 December 2013. In terms of
s 21(1)
of
the
Insolvency Act, the
separate assets of both spouses initially
vested in the master and from 5 December 2013 in the trustees of the
insolvent's estate.
Standard Bank's liquidated and secured claim in
the amount of R7 602 886.71 was proved and accepted at the second
meeting of creditors,
which was held on 11 December 2013. In
investigating the affairs of the insolvent and administering the
estate the trustees ascertained
that the applicant and the insolvent
had failed to make any payments on any one of the mortgage bond
accounts with Standard Bank
since 1 February 2011, that the levies,
rates and taxes in respect of the five immovable properties were not
paid to the respective
bodies corporate and that the arrears as at
the end of March 2014 amounted to approximately R1,2 million, that
some of the immovable
properties were rented out to third parties and
that the applicant and the insolvent were collecting the rentals.
[5]
On 12 August 2014, at the instance of the trustees, the Gauteng
Provincial Division of the High Court (Molefe J) granted an
order
terminating the joint ownership by the applicant and the insolvent of
the five immovable properties and authorising the trustees
to sell
the properties, either by way of public auction or by private
treaties. The applicant, on 17 November 2014, instituted
an
application in which she seeks the rescission of the order
terminating her and the insolvent's joint ownership of the immovable
properties and the authority given to the trustees to sell them,
which application is opposed by the trustees and is pending. The
operation and execution of a decision which is the subject of an
application for rescission is not automatically suspended pending
the
finalisation of the application. (See
Erstwhile Tenants of
Williston Court and Another v Lewray Investments (Pty) Ltd and
Another
2016 (6) SA 466
(GJ), paras 17-20.)
[6]
The trustees, towards the end of 2014, sold four of the immovable
properties to Black Rock Properties (Pty) Ltd (Black Rock).
The
agreement of sale was consensually cancelled and a new sale agreement
was concluded with an associated company, White Rock
Properties (Pty)
Ltd (White Rock). The four immovable properties are in the process of
being transferred to White Rock. The applicant
brought an urgent
application in the Gauteng Provincial Division of the High Court to
interdict the trustees from causing the immovable
properties to be
transferred into the name of White Rock. On 26 November 2016, Murphy
J dismissed the application with costs.
[7]
Apart from the court proceedings between the applicant and the
trustees to which I have referred, the applicant also instituted
an
urgent application to stay the transfer of ownership of the four
immovable properties to Black Rock pending the finalisation
of the
application for rescission (the application became moot and was not
proceeded with due to the cancellation of the sale agreement),
and an
application to interdict the trustees from contacting the tenants.
The trustees, on the other hand, instituted an urgent
application in
which they sought an order for the applicant and the insolvent to
provide them with the details of the leases in
respect of the
immovable properties and for them to be interdicted from demanding or
receiving the monthly rentals from the tenants
and from contacting,
intimidating and threatening the tenants in order to collect rental
income from them. I need not elaborate
on these applications.
[8]
The applicant has not sought the release of the immovable properties
or of her 50% undivided share in the ownership thereof
in terms of
subsections 21(2) or 21(3) of the
Insolvency Act. Disputes
, however,
have arisen between the applicant and the trustees regarding her
claim to the rental monies in respect of the immovable
properties and
her claim that that the trustees are not entitled to realize
ownership of the immovable properties.
[9]
The applicant now seeks the removal from office of the trustees of
the insolvent estate on the grounds that they have breached
their
fiduciary duties; they have failed to 'satisfactorily' perform the
duties imposed upon them in terms of the
Insolvency Act; they
'are
not acting independently or impartially'; they 'have committed
various irregular acts'; they did not give her six weeks' written
notice of their intention to realize the immovable properties prior
to realizing them as is required in terms of
s 21(3)
of the
Insolvency Act nor did
they publish such notice in the
Gazette
and
in a newspaper circulating in the district in which she resides or
carries on business; they 'formed an unduly intimate relationship
with a company that interchangeably calls itself Black Rock Property
Management or White Rock Property Management'; they 'abdicated
their
functions to representatives of these entities' who 'regularly
intimidate and harass the insolvent, [their] tenants and [the
applicant]' and 'attempt to collect the rentals from the tenants';
they 'utilized the service of the Sheriff of Roodepoort North
who
they persuaded to act irregularly and to harass and threaten [the
applicant's] tenants'; they 'sent people from Park Village
Auctioneers to harass the tenants'; they 'stole keys belonging to 21
Mimosa Mews [one of the immovable properties] and sent people
from
Black Rock Property into the house without [the applicant's]
consent'; and they have subjected her to 'costly and unnecessary
litigation'.
[10]
It is trite that affidavits in motion proceedings constitute both
pleadings and evidence. (See
Radebe and others v Eastern Transvaal
Development Board
1988 (2) SA 785
(A), at 793C-F.) The
applicant's allegations against the trustees by large amount to mere
conclusions with the primary facts on
which they depend omitted.
Furthermore, the material facts are in dispute and the facts as
stated by the trustees (the respondents)
together with the facts
alleged by the applicant that are admitted by the trustees, do not
justify the final order which the applicant
seeks.
(Plascon-Evans
Paints Ltd v van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at
634.)
[11]
The trustees deny the accusations against them. In particular, they
deny that they at any stage instructed or utilised Black Rock
Properties or White Rock Properties or the sheriff or Park Village
Auctioneers to harass and threaten the tenants of the immovable
properties or that they instructed the sheriff to collect rent from
the tenants. They aver that written notice in terms of
s 21(3)
of the
Insolvency Act was
duly given to the applicant prior to the
conclusion of the sale agreement in respect of the four immovable
properties with White
Rock and that such notice was published in the
Citizen newspaper and the Government
Gazette
on 26 September
2014. Copies of the notice and publications thereof are annexed to
their answering affidavit. The trustees contend
that they at all
times acted in the best interests of the proven creditors of the
insolvent estate, which includes Standard Bank
as a preferred
creditor. This contention is supported by the version they have put
up in their answering affidavit. The fact that
they dispute the
applicant's claim to the rental monies as well as her claim that the
trustees are not entitled to realize the
immovable properties do not
justify their removal from office as joint trustees of the insolvent
estate.
[12]
The applicant, in my view, has failed to establish misconduct on the
part of the trustees of the type that would justify their
removal as
trustees from the insolvent estate. It has not been shown that
continuation in their office will prejudicially affect
the future
welfare of the insolvent estate nor have they been shown to be
dishonest, grossly inefficient or untrustworthy persons
whose future
conduct will expose the insolvent estate to a risk of actual loss.
(See
Happen and Others v Shub and Others
1987 (3) SA 201
(C),
at 7180-720H.)
[13]
I now turn to the applicant's request that I, under the prayer for
'[f]urther and/or alternative relief' claimed in the notice
of
motion, 'interdict 1st and 2nd Respondents fro using EXTRA legal
methods to stop Applicant from collecting rent/her portion
thereof
that she requires to sustain her needs and the needs of her MINOR
CHILDREN.' The trustees oppose the granting of such relief.
I am of
the view that the case made out in the founding affidavit does not
sustain a claim for such an interdict.
[14]
The trustees were required to answer a case founded on
allegations of misconduct on their part that justify their removal
from office
as trustees of the insolvent estate. They were not called
upon to raise a defence to the alternative interdictory relief now
being
sought. Insofar as they have dealt with the applicant's claim
to the rentals, it is impermissible to consider their answering
affidavit
in isolation, divorced from the context of the case they
were called upon to answer.
[15]
In
Director of Hospital Services v Mistry
1979 (1) SA 626
(A),
at 635H-636B, Diemont JA said the following:
"When,
as in this case, the proceedings are launched by way of notice of
motion, it is to the founding affidavit which a Judge
will look to
determine what the complaint is. As was pointed out by Krause J in
Pountas' Trustee v Lahanas
1942 WLD 67
at 68 and as has been
said in many other cases:
"...an
applicant must stand or fall by his petition and the facts alleged
therein and that, although sometimes it is permissible
to supplement
the allegations contained in the petition, still the main foundation
of the application is the allegation of facts
stated therein, because
those are the facts which the respondent is called upon either to
affirm or deny".
Since
it is clear that the applicant stands or falls by his petition and
the facts therein alleged, "it is not permissible
to make out
new grounds for the application in the replying affidavit"
(per
VAN WINSEN J in
SA Railways Recreation Club and Another v
Gordonia Liquor Licensing Board
1953 (3) SA 256
(C) at 260.).'
[16]
And in
Administrator, Transvaal and others v Theletsane and others
[1990] ZASCA 156
;
1991 (2) SA 192
(A), at 196 C-E, Botha JA said the following:
'It
was not for the appellants to show that the respondents were given a
proper hearing; they were called upon only to meet the
specific
allegations put forward by the respondents in support of the relief
claimed. The appellants were required to answer a
case founded on the
allegation of fact that the respondents were not given a hearing;
they were not called upon in any other way
to raise a valid defence
to the relief sought. In particular, for instance, the question
whether the hearing given was unduly limited
in its scope was not an
issue to which the appellants' deponents were required to address
their minds. It is not permissible to
consider the appellants'
affidavits in isolation, divorced from the context of the case they
were answering. To the extent that
the appellants' deponents went
further than may have been necessary to answer the case as presented,
it cannot be postulated a
priori
that they will not be
prejudiced if their affidavit is relied upon to determine the nature
and ambit of the hearing that took place.
To do so may be unfair to
the appellants and in effect tantamount to reversing the
onus.'
[17]
Finally, the matter of costs. The trustees have been successful in
their opposition to this application. The ordinary course
is for
costs to follow the event. The trustees seek a punitive costs order
against the applicant. In all the circumstances of this
case I am of
the view that a deviation from the ordinary rule that the successful
party is awarded costs as between party and party
is not warranted.
[18]
In the result the following order is made:
The application is
dismissed with costs.
----------------------------------------
P.A.
MEYER
JUDGE OF THE HIGH COURT
Date
of hearing: 8 September 2016
Date
of judgment: 3 March 2017
Counsel
for applicant: Mr Zehir Omar
Attorneys
for applicant: Zehir Omar Attorneys, Springs
Clo
Friedland Hart Solomon, Monument Park, Pretoria
Counsel
for respondents: Adv C Sevenster
Instructed
by: Vezi & De Beer Inc, Lynwood, Pretoria