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[2015] ZAGPPHC 451
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Unonkala Architects (Pty) Limited v Master of the High Court Pretoria and Others (54706/2013) [2015] ZAGPPHC 451 (18 June 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 54706/2013
DATE:
18 JUNE 2015
In the matter between:
UNONKALA ARCHITECTS (PTY)
LIMITED
....................................................................
Applicant
And
THE
MASTER OF THE HIGH COURT
PRETORIA
.............................................
First
Respondent
WILLIAM SEKETE
NO
.........................................................................................
Second
Respondent
LAND & AGRICULTURAL DEVELOPMENT BANK
OF SOUTH
AFRICA
..................................................................................................
Third
Respondent
JUDGMENT
Tuchten J
:
1
This is a review of a decision by the
first respondent (the Master) to admit to proof a claim by the third
respondent (the Land
Bank) against Westside Trading 570 (Pty) Limited
(in liquidation) (Westside). The review is opposed only by the Land
Bank.
2
Westside was provisionally wound up on
25 January 2012. The order was made final on 17 September 2012.
Westside had borrowed money
from the Land Bank to fund a property
development and had provided security through a mortgage bond and
sureties. Westside defaulted
on the loan. The Land Bank commenced an
action against Westside and the sureties on 26 April 2012. As
Westside was under provisional
winding-up order when the action was
commenced, the action against Westside itself was ineffectual. This
later (at some unspecified
date) led to the claim against Westside
being withdrawn but the claims against the sureties are still being
pursued.
3
The Land bank attempted to prove a claim
against Westside at the first meeting of creditors but its claim was
rejected. At the second
meeting, the Land Bank submitted an amended
claim. The presiding officer at the second meeting was an assistant
Master. The claim
as formulated was anything but elegant but I am
satisfied that the affidavit and the documents submitted with it
established that
the Land Bank’s claim which it sought to prove
arose from an alleged settlement agreement (the settlement), said to
have
been concluded between the Land Bank and Westside on 13 February
2009 together with mora interest at the prescribed rate then
applicable,
ie 15,5% per annum. The terms of the settlement are
contained in a letter written by the Land Bank to Westside dated 13
February
2009.
4
The settlement recites that the
indebtedness of Westside to the Bank had been settled in the sum of
R82 million, although the amount
of the loan balance was at that
stage almost R95 million. It goes on to say that
[Westside]
has undertaken to repay Land Bank on conclusion of the transaction
with the third party interested in buying the development
and with
whom a Deed of Sale has been signed.
5
The Land Bank had taken the attitude
that the loan advance to Westside had fallen outside the Land Bank’s
mandate and was
not prepared to advance further sums to Westside.
Westside therefore needed to find further funding. The settlement
went on to
say
[The
Land Bank] appreciate the efforts made by [Westside] in finding
alternative finance, but it is imperative that the outstanding
balance of the loan be repaid in full by the end of April 2009. An
extension of this deadline may be granted by the Bank at its
sole
discretion.
6
On
behalf of the applicant it was argued that the settlement was
conditional upon the sale of the development to the third party.
This
was not one of the grounds of review raised in the applicant’s
founding affidavit. The attack there made, which was
not pursued in
argument, was that there was no proof that the respective signatories
were authorised to conclude the settlement.
7
One must read the settlement in its
context and with regard to what was known to the parties at that
stage. I think that a businesslike
approach would be to read the two
passages I have quoted as providing not that the entire settlement
would be conditional on the
sale to a third party but that the Land
Bank granted time to Westside until the end of April 2009 to pay the
settled indebtedness,
with any further indulgences being purely a
matter within the Land Bank’s discretion.
8
The duty of a presiding officer in
relation to claims submitted to proof at a meeting of creditors
arises from
s 44
of the
Insolvency Act, 24 of 1936
, made applicable
to liquidations of companies by s 339 of the Companies Act, 61 of
1973. Such a claim must be proved by way of
affidavit, which must set
out, inter alia the “nature and particulars of the claim”.
[1]
The presiding officer at the meeting at which the claim is sought to
be proved must scrutinise and carefully consider the claim.
But the
presiding officer does not adjudicate the claim as in a court of law
and should not examine the claim too critically or
require more than
prima facie proof. In that sense the admission by the presiding
officer is provisional because under s 45(3)
the trustee (or
liquidator in relation to the winding up of companies) has power to
dispute the claim.
[2]
Unless the claim is bad, the presiding officer should not reject it
without hearing the creditor’s evidence under s 44(7).
A
creditor who submits his claim to proof is entitled to have his claim
considered without any evidence except his own under s
44(7).
[3]
9
Applying these principles, I think that
the claim prima facie is unconditional and establishes that Westside
is indebted to the
Land Bank in the sum of R82 million together with
mora interest.
10
It seems that at the meeting, in the
course of argument on its behalf urging the presiding officer to
reject the Land Bank’s
claim against Westside, the applicant
put up to the presiding officer a copy of the Land Bank’s
summons in its action against
(as it appeared at that time) Westside
and the sureties. The presiding officer refused to consider the
contents of the summons
on the ground that it was extrinsic evidence.
I think that the presiding officer was correct in this regard; the
summons was not
part of the documentation put up by the Land Bank in
support of its claim. As I have pointed out, a creditor is entitled
to have
his claim examined without any evidence except his own. In
fact however, the summons does show that one of the several
alternative
claims in the action was a claim based on the alleged
settlement of Westside’s indebtedness in the sum of R82 million
plus
mora interest.
11
A third attack on the decision of the
Master was to the effect that the presiding officer ought to have
found that the Land Bank’s
claim as submitted had prescribed.
There is no obligation on a person making a claim to adduce facts to
defeat a potential defence
of prescription before the case of
prescription has been made. In a court of law, this is regulated by s
17 of the Prescription
Act, 68 of 1969:
(1)
A court shall not of its own motion take
notice of prescription.
(2)
A party to litigation who invokes
prescription, shall do so in the relevant document filed of record in
the proceedings: Provided
that a court may allow prescription to be
raised at any stage of the proceedings.
12
I think that unless the formulation of a
claim itself demonstrates ineluctably that the claim has been
extinguished by prescription,
a presiding officer should not reject a
claim because by a process of inferential reasoning, it may be that
prescription has taken
place. It cannot in my view be said that the
present claim itself demonstrates that it has been extinguished by
prescription. Westside
from time to time made admissions of
liability, the provisional and final winding up orders may have
interrupted the running of
prescription and, finally, the period of
prescription applicable may be thirty years under s 11 (a)(i) of the
Prescription Act
(not three years as assumed by the applicant)
because the Land Bank asserted that its claim was secured by a
mortgage bond.
13
I
emphasise that the presiding officer was not called upon to determine
whether the claim was good. He was required to consider
whether the
claim was, on the face of it, bad. The presiding officer found by
implication that the claim was not bad.
14
The present review is brought under
s
151
of the
Insolvency Act. While
the court may in the exercise of
these powers of review enter upon and decide the matter de novo, the
court cannot uphold the review
unless it is satisfied that the
functionary below was clearly wrong.
[4]
It follows from what I have said that I do not think that it can be
said that the presiding officer was clearly wrong.
15
I
make the following order: The application is dismissed with costs.
NB
Tuchten Judge of the High Court 17 June 2015
[1]
Section
44(4
’)
Section
44(4)
o
Judgment
of Roper J reported in
Cachalia
v De Klerk NO and Benjamin NO
1952
4 SA 672
T 675E-G
[3]
Aircondi Refrigeration (Pty) Ltd v Ruskin NO
and Others
1981 1 SA 799
W 804A
[4]
A/e/
and Another NNO v The Master (ABSA Bank
and Others intervening)
2005 1
SA
276
SCA para 24