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[2017] ZAFSHC 56
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Matsepe N.O. and Another v Master of the High Court, Free State Division, Bloemfontein and Another (567/2017) [2017] ZAFSHC 56 (13 April 2017)
I
N
THE
H
I
GH
COURT
OF
SOUTH
AFRICA,
FREE
STATE
D
I
VISION,B
L
OEMFONTEIN
Case
number: 567/2017
In
the matter between:
SAREL
JOHANNES
WESSELS
1
st
Intervening Party
E
L
I
ZABETH
MARIA
VENTER
2
nd
Intervening Party
In
the application of
M
ATSE
P
E
N
.
O.
1
st
Applicant
O.
A. NOORDMAN
N
.
O.
2
nd
Applicant
and
THE
MASTER OF THE HIGH COURT,
FREE
STATE
D
I
VIS
I
ON,
B
LOEM
F
O
N
TE
I
N
1
st
Respondent
P.
FO
U
R
I
E
N
.
O.
2
nd
Respondent
HEARD
ON:
10 February 2017
JUDGME
N
T
B
Y:
CHESIWE, AJ
DE
L
I
VERED
ON:
13 APRIL 2017
REASONS
FOR JUDGMENT
INTRODUCTION
[1]
The intervening party's instituted proceedings to be granted leave to
intervene in the main action under case number 567/2017.
On 3
February 2017 the applicants launched an urgent application for an
interim interdict in terms of which the 1st respondent
is interdicted
from removing the applicants as liquidators of the Estate of Sebal
Beleggings (hereinafter Sebal). The intervening
parties are not yet
considered parties to the main action as a court order has not yet
been granted.
[2]
On 10 February 2017, before the intervening application could
proceed, the intervening parties made an application for certain
documents from the applicants, namely that:
•
The creditors consent to
appoint Matsepe Inc as attorneys on behalf of the estate.
•
The written mandate from
the liquidation appointing Matsepe Inc as attorneys of record of the
estate of Sebal Beleggings.
Alternatively
•
Prior written consent of
the Master of the High court that Matsepe Inc may represent the
applicants
T
H
E
PAR
T
I
E
S
[3]
Intervening parties are cited as Sarel Johannes Wessels and Elizabeth
Maria Venter, as they have a material and substantive
interests in
the application.
APPLICANTS
[4]
First applicant is Mr Tsiu Vincent Matsepe and the second applicant
is Mr Ottlie Anton Noordman. They are appointed as liquidators
in the
insolvent estate of Sebal Beleggings (Pty) Ltd (Sepal) with Masters
Reference number: 898/2012.
RESPONDENTS
[5]
First respondent is the Master of the High Court, Free State Division
Bloemfontein (hereinafter the Master) and the second respondent
is
Phillips Fourie, an insolvency practitioner at Corporate Liquidation,
Pretoria.
[6]
The issue is whether the applicants have
locus standi
to bring
the application in their official capacity, in the absence of power
of attorney in terms of Rule 7 (1) of the Uniform Rules
of court.
[7]
On the 10 February 2017, I granted an order that the intervening
application be postponed to the16 February 2017 and that the
applicants provide the requested documents. The costs were in the
cause. The applicants launched an application for leave to appeal
against my order as well as reasons to it.
BACKGROUND
[8]
The intervening parties seek an order directing the first
respondent to execute his duties in terms of section 379(1)
of the
Companies Act 61 of 1973 to remove the applicants as liquidators of
Sebal Beleggings with immediate effect.
[9]
The Master wrote a letter to the applicants dated 29 March 2016 and
it stated that:
"In
terms of section 381 of the companies Act, the matter shall take
cognizance of the conduct of liquidation and shall, if
the matter has
reasons to believe that (the liquidator) is not performing his duties
faithfully and duly observing all requirement
imposed on him by any
Law, the matter may enquire into the matter and take such actions as
the master may think expedient.
"The
letters addressed to yourselves by the master, Bloemfontein,
constitute a lawful request and require you to adhere to
such
request. From subsequent events it is clear that such instructions by
the master, Bloemfontein were ignored."
"The
master therefore holds the view in terms of section 379(1) (c), that
you are no longer suitable to be liquidators on the
National list of
liquidators."
[10]
On the 3 February 2017 before the intervening application could
proceed, the intervening parties questioned the
locus
standi
of the applicants before court.
[11]
Counsel on their behalf Mr Janse Van Ransburg in his oral argument
submitted that, the applicants were removed as liquidators
on 29
October 2015 but were reappointed on 16 June 2015. Their request was
simply that the applicants should provide written authorization
of
their reappointment in terms of Rule 7(1) of the Uniform Rule of
court. (Power of attorney)
[12]
In the intervening parties' heads of argument, it was submitted that
the applicants have no
locus
standi
to bring the
application in their official capacities in the absence of consent
from the Master and the second respondent. Further
that the
applicants have no
prima
facie
right not to be
removed by the Master as liquidators of Sebal and that the applicants
failed to join the intervening parties who
have a material interest
in the outcome of the matter
[13]
On behalf of the applicants, Adv. Halgryn SC argued and objected to
the issue of Rule 7(1) that the intervening parties seek.
Adv Halgryn
submitted that the applicants are in their personal capacity before
court and that Rule 7(1) provides that a power
of attorney need not
be file, but it has to be filed 10 days before judgment.
[14]
The applicants in their head of argument reiterated that they are in
their personal capacity before court, and that Sebal is
not involved
and will not be burdened financially with the applicants legal costs.
The applicants submitted that they produced
their written authority
that Matsepe Inc. may act on their behalf. Further that the
applicants produced a written consent
by Mr Y Wessels who is the
major creditor in Sebal.
[15]
The applicants submitted that they have complied with the request
by the intervening parties. Furthermore
that the
intervening parties and Mr Janse Van Rensburg mislead the court and
that it was disingenuous of the intervening parties
to submit to
court the court that the litigation involves Sebal Estate.
[16]
The judgment will not deal with the issue of urgency neither with the
application to intervene as these were not argued, but
rather
postponed to 3 March 2017, in order for the court to deal with the
issue of Rule 7(1).
[17]
Rule 7(1) and (4) of Uniform Rules of Court - Power of attorney,
provides that:
"(1)
Subject to the provisions of sub-rules (2) and (3) a power of
attorney to act need not be filed, but the authority of
anyone acting
on behalf of a party may, within 10 days after it has come to the
notice of a party that such person is so acting,
or with the leave of
the court on good cause shown at any time before judgment, be
disputed, whereafter such person may no longer
act unless he
satisfies the court that he is authorised so to act, and to enable
him to do so the court may postpone the hearing
of the action or
application. (4) Every power of attorney filed by an attorney shall
be signed by or on behalf of the party giving
it, and shall otherwise
be duly executed according to Law; provided that where a power of
attorney is signed on behalf of the party
giving it proof of
authority to sign on behalf of such party shall be produced to the
registrar who shall note that fact on the
said power."
[18]
Rule 7(1) is the procedure a party may follow if it disputes the
authority of
anyone
to act on behalf of a party. In the event
of such a challenge the person may no longer act unless he satisfies
the court that he/she
is authorized to act.
[19]
I
t
i
s
tr
i
te
that
the
R
u
l
e
prescrib
e
d
procedure
for
challenging
the authority of a party to act
[1]
The
i
n
terveni
n
g
part
i
es
are challenging the authority
of
the
applicants
to act. They
argued
that
the applicants have no
locus
standi
and
that the app
l
i
cants
must
produce
written
proof
to
that
effect
that
they
have
b
een
mandated to
act
i
n
the
pr
o
c
e
e
d
i
ngs.
App
l
i
cants
subm
i
tted
t
h
at
they
are
before court in
the
i
r
personal capacity
and
have
i
nstructed
Matsepe
I
nc.
to
act on
their
behalf.
The
applicants
i
n
the
i
r
supp
l
eme
n
tary
affidavit expressed their amazement
at
the
i
n
terveni
ng
part
i
es
and
surprised
that
they
seek
documents
which
the
h
ave
given to the
i
n
tervening
parties.
The
applicants
submitted
that
they
have
compl
i
e
d
with
Ru
l
e
7
(1).
[20]
I
n
the
unan
i
mous
decision
of
ANC
U
mvoti
Council
Caucus
v
U
mvoti
Mu
n
i
cipal
i
ty
[2]
,
full bench observed that:
"The
Legislative intended the authority of "anyone" who claimed
to be acting on behalf of another in initiating proceedings
and not
only attorneys, to be dealt under Rule 7(1)."
[21]
I agree with the full bench that Rule 7(1) requires a broad
interpretation having regard to the purpose of the rule. The purpose
of the rule is, on one hand to avoid overburdening the pleadings
unnecessarily with correspondence between the parties and power
of
attorney on the other hand it provides a safeguard to prevent a
person who is cited from repudiating the process or denying
his or
her authority for issuing the process.
[22]
Rule 7(1) can be invoked any time before judgment, so did the
intervening parties invoke it before the intervening application
could proceed. Rule 7(1) requires the court to be satisfied that the
party in whose authority is disputed is authorised to act.
The
application in terms of Rule 7(1) was made in court, and the rule
does provide that it be before judgment.
[2
3
]
I
n
Eskom v Soweto
C
i
ty
Cou
n
cil
,
[3]
the
court stated that:
"If
the attorney is authorised to bring the application on behalf of the
applicant, the application necessarily is that of
the applicant.....
As to when and how the attorney's authority should be proved, the
Rule-maker made a policy decision."
Proof
is dispensed with except only if the other party challenged the
authority. The court should honour the approach of Rule (1).
[24]
The intervening parties disputed the authority to act of the
applicants, even though the applicants submitted that they were
acting in their personal capacity and were not representing Sebal.
[25]
Therefore properly mandated powers of attorney are required for the
applicants to proceed with the litigation.
The
challenge
of
Ru
l
e
7(1)
i
s
that
the
hearing
of
the
appl
i
cation
b
e
postponed,
i
n
this case the
i
n
tervening
application, to give the appl
i
cants
notice
to
prove
their
a
u
thority
by
way
of
del
i
vering
a
power of attorney and the required documents.
The
remedy
for
a
person
who wishes to
challenge
the
authority
of
a
person
allegedly
acting
on
behalf
of
the
purported
applicant
is
provided
for
in
rule
7
(1
)
[4]
.
I
n
the
event
of
such
a
challenged
the
person
may
no
l
onger
act
un
l
ess
he
satisfies
the
court
that
he
i
s
authorised to a
c
t.
Case
l
aw
confirms that
Ru
l
e
7
i
s
the
p
rescribed
procedure
for
challenging
the
authority of a party to act.
[26]
I
n
the
matter of Royal Bafokeng
N
ation
v Min
i
ster
of
l
and
Affairs and
15
others,
[5]
the
court
listed
the
follow
i
ng
principles
to
be
applicable
where
the
authority
of
a
person
to
act is
in
in
dispute:
o
An Artificial legal person is obliged to provide that it is
authorised to initiate the litigation in question;
o
Any challenged should be mounted in terms of Rule 7 (1); o Rule 7 can
be invoked at any time before judgement;
o
While it is a practical rule which mostly turns out to be compliance
with a procedural formality, it can in some cases, impact
substantially on the rights of litigants.
[27]
Rule 7 (1) therefore requires the court to be satisfied that the
party whose authority is disputed is authorised to act. In
this
matter the applicant's authority to act is disputed. Any party to
legal proceedings bears the onus of proving that its legal
representative is properly authorised and that it has the authority
to instruct its legal representative.
[28]
The Intervening parties were accordingly entitled to challenge the
authority of the applicant's authority to act. Once the
challenged
was put forth, it was then for the applicants to satisfy the court
that the concerned attorneys did have the requisite
authority to act.
(See Gainsford and Others NNO v Haib AB 2000 (3) 635 (WLD) at 640A.)
[29]
In my view, I need to be satisfied that the applicants are properly
before court and also mandated to do so. The intervening
parties had
an issue that the Master had removed them as liquidators and even
though the applicants indicated that they have been
re instated,
the intervening parties disputed this and wanted written proof
thereof.
[30]
The rest of the other documents will follow if the applicants comply
with Rule 7 (1).
Order
[31]
Under these circumstances, the following order is made.
1.
The matter is postponed to the opposed roll on 2 March 2017.
2.
The applicants to provide the requested documentation as set out in
the court order dated 10 February
2017.
3.
Costs in the cause.
______________________
S.
CHESIWE, AJ
On
behalf of applicants:
Adv.
H
algryn SC
Instructed
by:
Matsepe
Attorneys
B
l
oemfontein
On
behalf of respondents:
Adv.
P
.
F. Rossouw SC
Instructed
by:
Phatshoane
H
enney
I
nc
B
l
oemfontein
[1]
Ganes
and
Another
v
Telecom
Namibia
Ltd
2004
(3)
SA
6
1
5
(SCA)
at
624
[2]
ANC
Umvoti
Council
C
aucus
v
Umvoti
Municipality
2010
(3)
SA
31
(KZP)
para
1
3
29.
See
also
Eskom
v
Soweto
City
Council
1
992
(2)
SA
703
(WLD)
at
705
E-706
C
and
Ganes
and
Another
v
Telecom
above
[3]
992 (2)
SA
703
(WLD) at
705f.
[4]
Unlawful
Occupiers,
School
Site
v
City
of
Johannesburg
2005
(4)
SA
1
99,
para
1
4
[5]
(20
1
3)
NWHC
999