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[2013] ZAKZPHC 69
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Fuller and Others v Nel N.O. and Others (9961/12) [2013] ZAKZPHC 69 (30 August 2013)
IN
THE KWAZULU-NATAL HIGH COURT, PIETERMARITZBURG
REPUBLIC
OF SOUTH AFRICA
Case
No: 9961/12
In
the matter between:
ADRIAN
LESLIE
FULLER
...............................................................................
First
Applicant
EMMA
LOUISE
FULLER
.............................................................................
Second
Applicant
HAROLD
JOHN
FULLER
...............................................................................
Third
Applicant
and
MARCEL
EDWIN NEL
N.O
.........................................................................
First
Respondent
COOKE
FULLER FINANCIAL ADVISORS (PTY) LTD
(IN
LIQUIDATION)
...................................................................................
Second
Respondent
THE
MASTER OF THE HIGH COURT,
PIETERMARITZBURT
...............................................................................
Third
Respondent
JOY
ANN FURZE
COLLINS
....................................................................
Fourth
Respondent
JUDGMENT
Delivered:
30/08/2013
MBATHA,
J
[1]
This is an application by the three former directors of a company
styled Cooke Fuller Financial Division (PTY) Ltd presently
in
liquidation, cited as the Second Respondent in the application. The
First Respondent is the liquidator of the Second Respondent
in his
representative capacity. The main application by the three applicants
is to secure a mandamus to compel the First Respondent
to carry out
his statutory duties and to properly investigate the claim of the
Fourth Respondent in the estate of the Second Respondent.
In addition
a further order sought is a declaratory to the effect that the Fourth
Respondent be declared not to be a creditor in
the estate of the
Fourth Respondent.
[2]
The background to this application is that it concerns a claim in the
sum of R1.5 million that Fourth Respondent lodged against
the estate
of the Second Respondent. This claim was proved and accepted at
the meeting of creditors and this in turn led
to an insolvency
enquiry where the three applicants were required to testify before
the Master. The interrogation duly commenced
with the three
Applicants being duly represented by counsel.
2.1
It is submitted by the Applicants that the First Respondent did not
do his duty properly as required in terms for section 45(2)
of the
Insolvency Act
[1]
. Section
45 (2) reads as follows which read as follows:
“
The
trustee shall examine all available books and documents relating to
the insolvent estate for purposes of ascertaining whether
the estate
in fact owes the claimant the amount claimed”
It
is clear from the wording of the Act
[2]
that the liquidators’ duties are peremptory. I was referred to
various authorities including
Standard
Bank of
South
Africa v The Master of the High Court and Others
[3]
,
regarding the obligations of the First Respondent. I accept that the
liquidators must thoroughly acquaint themselves with the
affairs of
the company and supress nothing that is material to the ascertainment
of the truth.
[3]
Claims against an insolvent estate are proved and dealt with in terms
of section 44 and 45 of the Insolvency Act
[4]
.
A basic requirement is that such a claim should be a liquidated one
of which the amount is fixed and determinable to the satisfaction
of
the officer presiding at the meeting of creditors.
After
a claim has been proved in this manner the presiding officer delivers
the claim and supporting documents to the trustee or
the liquidator
as the case may be, who then examines the claim and should he decide
to disallow the claim he reports to the Master
who then takes a final
decision on the fate of the claim.
Should the claim be disallowed by the Master the aggrieved creditor
may prove his claim by way of action or in terms of section
151 of
the Insolvency Act
[5]
, and bring
an application to review the decision of the Master.
[4]
The status of the present claim by the Fourth Respondent in the sum
of R1.5 million is that it has been duly proved at a meeting
of
creditors and that the First Respondent has not decided to disallow
this claim. The First Respondent filed an affidavit to this
effect
and explained that there are no funds in the estate of the Second
Respondent and that at the enquiry evidence came to the
fore in
relation to,
inter alia
the claim by the Fourth Respondent and that he is still awaiting
further documents and until then he is not in a position to form
a
proper view regarding the claim of the Fourth Respondent.
Quite
clearly
,
he says, further evidence needs to be heard to achieve this outcome.
The mere admission of a claim does not ratify it. It
must still be
examined by the liquidator.
[5]
The complaint by the Applicants is that the First Respondent has not
applied his mind to the obvious fact that even a cursory
glance at
the papers should have led to the conclusion that the Fourth
Respondent has no valid claim in contract against the estate
of the
Second Respondent. The Applicants scoff at the suggestion by
the First Respondent that the enquiry itself will assist
him to make
up his mind whether or not to disallow the claim. In any event
it is clear from the letter addressed by the First
Respondent to the
Applicants’ attorneys dated 13 September 2012 and appearing as
annexure “AF-J” at page 111
of the papers that he regards
the Fourth Respondent as a “proven creditor” and
correctly points out that section 45(3)
of the Insolvency Act
[6]
does not require him to make any decision capable of being reviewed.
[6]
In fact, section 45(3) requires a trustee or liquidator to act only
in the event of him deciding not to allow a claim. Once
the presiding
officer has accepted a claim it remains a valid one until and in the
event of the trustee or liquidator deciding
not to allow it, and
then, and thereafter, further subject to the Master then actually
deciding to disallow the claim. The
liquidators’ function
is to examine the affairs of the company. It has a duty to report to
the creditors and the Master of
the High Court.
6.1
I accept the submissions made on behalf of the Fourth Respondent that
the entire process is creditor driven and that certain
functions are
sanctioned by the Master of the High Court. The claim was
proved without any form of objection thereto and
it remains a proved
claim. It does not end there, the Act
[7]
has created mechanisms when objections can be lodged up to the time
when the Liquidation and Distribution account lies for inspection.
[7]
The aim of the first order prayed for in the Notice of Motion is
therefore nothing more than an order that First Respondent
be forced
to disallow the claim. The order sought namely that the First
Respondent be directed to do all this necessary,
take all steps and
conduct all investigations into the claim of the Fourth Responded and
to report to the Master (Third Respondent)
in the outcome of such
investigations is not based on any legislative function of a
liquidator or trustee. Put differently
a trustee or liquidator
cannot be ordered to do something that the law does not require him
or her to do. Even if I am wrong
in drawing this conclusion,
the relief sought in the first order prayed for in the Notice of
Motion seems superfluous as it is
the second order prayed for that
the Fourth Respondent is not a creditor in the estate of the Second
Respondent. These two
orders were initially not sought in the
alternative, but were duly amended to be prayers in the alternative.
[8]
The relief sought in the second order prayed for in the Notice of
Motion that it be declared that the Fourth Respondent is not
a
creditor of the estate of the Second Respondent cannot be resolved on
the papers. The Applicants alleged and attached documents
that show
persuasively that the contract that her claim against the estate of
the Second Applicant is based upon was concluded
with other
entities. The Fourth Respondent in her affidavit attached
documents (and in particular annexure “I”
at page 342 of
the papers” which certainly on the face of it appears as if her
investment, the basis of her claim,
was with the Second
Respondent and not with other entities. Her affidavit sets out
her understanding of the agreement with
the Second Respondent from
page 150 and onwards of the indexed papers and cannot simply be
disregarded. I am therefore not in a
position to determine on the
papers whether or not the Fourth Applicant is a creditor of the
Second Applicant.
[9]
One would ordinarily in such an event at least give consideration to
refer the matter for oral evidence. This is hardly a case
where such
a consideration should be extended to the Applicants. Firstly,
it is the duty of the First Respondent to decide
if he
is
not going
to allow the Fourth Respondent’s claim and, secondly, evidence
is being heard at the enquiry that may enlighten the First
Respondent
in this regard. There is no reason why this Court should be
saddled with an issue that is getting attention in
the same way that
it would get attention if the matter is referred for oral evidence.
The submission made on behalf of the
Applicants’ that the Court
can exercise its inherent jurisdiction in terms of section 19 of the
Supreme Court Act
[8]
, cannot be
applied to this case, at this stage of the proceedings in the
liquidation process.
[10]
A number of points
in limine
have been raised in the papers before me, however, in view of the
fact that I am persuaded that the relief sought ought not to
be
granted I find it unnecessary to deal with these points.
[11]
I therefore make the following order:
(a)
The application is dismissed with costs, costs to include costs of
two (2) counsel, if applicable.
MBATHA,
J
Date
of hearing: 23 August 2013
Date
of Judgment: 30 August 2013
Counsel
for the Applicant: Adv C.J Pammenter SC/ Adv G.M Harrison
Instructed
by: Foster Attorneys
c/o
Stowel & Company
295
Pietermaritz Street
PIETERMARITZBURG
Counsel
for the Fourth Respondent: Adv C.J Hartzenberg SC
Instructed by: GDLK
Incorporated
380
Jabu Ndlovu Street
PIETERMARITZBURG
[1]
Act
24 of 1936, as amended.
[2]
Act
24 of 1936, as amended.
[3]
2010
(4) SA 405 (SCA).
[4]
Act
24 of 1936, as amended.
[5]
Act
24 of 1936, as amended.
[6]
Act
24 of 1936, as amended.
[7]
Act
24 of 1936, as amended.
[8]
Act
59 of 1959, as amended.