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[2020] ZASCA 101
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Moodliar and Others v Recycling and Economic Initiative of South Africa NPC and Others; Gore and Others v Kusaga Taka Consulting (Pty) Ltd and Others (977/2019) [2020] ZASCA 101; 2020 (6) SA 386 (SCA) (15 September 2020)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
No:
977/2019
Reportable
In
the matter between:
SIVALUTCHMEE
MOODLIAR
FIRST
APPELLANT
TREVOR
PHILIP GLAUM
SECOND
APPELLANT
KEITUMETSE
TAUNYANE
THIRD
APPELLANT
And
RECYCLING
AND ECONOMIC DEVELOPMENT INITIATIVE OF SOUTH AFRICA NPC
FIRST
RESPONDENT
BOWMAN
GILFILLAN
SECOND
RESPONDENT
THE
MASTER OF THE HIGH COURT, WESTERN CAPE DIVISION, CAPE TOWN
THIRD
RESPONDENT
And
in the matter between:
STEPHEN
MALCOLM GORE
FIRST
APPELLANT
TREVOR
PHILIP GLAUM
SECOND
APPELLANT
FRANCIS
TJALE
THIRD
APPELLANT
And
KUSAGA
TAKA CONSULTING (PTY) LTD
FIRST
RESPONDENT
BOWMAN
GILFILLAN
SECOND
RESPONDENT
THE
MASTER OF THE HIGH COURT, WESTERN CAPE DIVISION, CAPE TOWN
THIRD
RESPONDENT
Neutral
citation:
Moodliar and Others v
Recycling and Economic Initiative of South Africa NPC
(Case
no. 977/2019)
[2020] ZASCA 101
(15 September 2020)
Coram
:
NAVSA, MBHA, and PLASKET JJA, WEINER and UNTERHALTER AJJA
Heard:
27 August 2020
Delivered:
This judgment was handed down electronically by
circulation to the parties’ representatives by email,
publication on the Supreme
Court of Appeal website and release to
SAFLII. The date and time for hand-down is deemed to be 10h00 on 15
September 2020.
Summary:
Companies Act 61 of 1973 – winding-up –
appropriation or retention of company funds by liquidators to pay or
secure
their proposed fees – Act and the Regulations do not
permit the liquidators to retain
any
company assets upon discharge of the provisional liquidation order
– assets must be restored-
liquidators
not permitted to draw their remuneration until the estate account has
been taxed and confirmed.
ORDER
On
appeal from
: The Western Cape Division
of the High Court (Le Grange J, sitting as court of first instance):
1. Save to the limited
extent related to the costs order of the counter-applications in the
court below, reflected in 2 below, the
appeal is dismissed with
costs, such costs to include the costs consequent upon the employment
of two counsel.
2.
The order of the court below is amended to read as follows:
‘
The relief sought
by both Recycling and Economic Development Initiative of South Africa
NPC and Kusaga Taka Consulting (Pty) Ltd
in prayer 3 of their Notices
of Motion respectively, is granted with costs. The Counter
Applications are dismissed. The Joinder
Applications are dismissed
with costs. The costs are to include the costs attendant upon two
counsel.
JUDGMENT
Weiner AJA (Navsa,
Plasket JJA and Unterhalter AJ concurring)):
[1]
When a company is discharged from winding-up, are its former
liquidators entitled to appropriate or retain company funds to
pay or
secure their proposed fees (as yet untaxed) before they restore
control of the balance of the company’s assets to
its
directors? The court a quo found that former liquidators were not
entitled to retain such funds and ordered them to pay over
the
amounts, held in trust by their attorneys, to the companies formerly
in liquidation in each of the two cases that served before
it. This
appeal comes before us with the leave of the court a quo.
[2]
The appeal comprises two matters, which concern the same issue. They
were consolidated for the hearing before the court a quo.
The
appellants in the first case are Sivalutchmee Moodliar, Trevor Philip
Glaum and Keitumetse Taunyane, the former liquidators
of the first
respondent in that case, Recycling and Economic Development
Initiative of South Africa NPC (‘Redisa’).
In the second
case, the appellants are Stephen Malcolm Gore, Trevor Philip Glaum
and Francis Tjale, the former liquidators of the
first respondent
therein, Kusaga Taka Consulting (Pty) Ltd (‘KTC’). For
convenience, these respondents will be referred
to as Redisa or KTC
or as ‘the companies’, where applicable. For purposes of
convenience the former liquidators of
Redisa and KTC will be referred
to as the liquidators. The second respondent in each of the cases is
Bowman Gilfillan (‘Bowmans’),
a firm of attorneys into
whose trust account the liquidators paid the funds, which they had
retained to cover their remuneration
(‘the disputed funds’).
Bowmans abides the decision of this Court.
[3]
The material facts in this matter are largely common cause. Redisa
was responsible for the implementation of an Integrated Industry
Waste Tyre Management Plan (the ‘Redisa plan’), which was
promulgated in late 2012 by the Minister of Environmental
Affairs
(the ‘Minister’), in terms of the National Environment
Management Waste Act 59 of 2008. Redisa engaged KTC
to provide
administrative and management services in respect of the scheme. The
Redisa plan was to operate indefinitely, subject
to a review to be
conducted every five years. The Redisa plan was apparently approved
by the Minister, but on 1 June 2017, the
Minister, on an urgent
ex
parte
basis, sought and obtained a provisional winding-up order,
first against Redisa and then, on the same basis, a week later,
against
KTC. At the time Redisa and KTC were solvent.
[4]
The Minister contending, inter alia, that since certain of Redisa’s
directors had not disclosed their relationship with
or significant
shareholding in KTC and that this enabled Redisa to misappropriate
public funds by using KTC as a vehicle to channel
monies for their
personal benefit, sought the winding-up of both entities on the basis
that it was just and equitable to do so.
Provisional liquidation
orders were granted
ex parte
and provided, inter alia, that
the Master of the High Court (the ‘Master’) was to
appoint provisional liquidators within
24 hours of the orders being
granted. In the case of Redisa, the provisional liquidators were
ordered to take immediate control
of Redisa's business, including the
administration and implementation of the Redisa plan. The court
ordered further that the provisional
liquidators’ powers were
extended to include the power and authority to continue to conduct
the business of Redisa as a going
concern. In the case of KTC, the
provisional liquidators were directed to take immediate control of
the assets and business of
KTC. Upon their appointment, the
liquidators took control of the assets of the companies including all
funds in the companies’
bank accounts, and were obliged to
manage such businesses in accordance with their duties as
liquidators.
[5]
Upon learning of the provisional orders, the companies applied for
the provisional winding-up orders to be discharged. On 15
September
2017, these applications were refused and judgments were granted
finally winding-up both Redisa and KTC. When they
were placed
under winding-up. Redisa’s cash reserves exceeded R170 million
and KTC’s exceeded R9 million. Redisa and
KTC appealed against
the winding-up orders and the appeals were set down for hearing in
this Court on 1 and 2 November 2018. On
24 October 2018, a week prior
to the hearings, the Redisa liquidators transferred R20 million from
the current account which they
operated in Redisa's name into
Bowmans’ trust account. The KTC liquidators transferred
R2 million from the current account
which they operated in KTC's
name into Bowmans’ trust account. This appeal concerns these
disputed funds.
[6]
The final
winding-up orders were set aside by this Court on 24 January 2019. It
substituted the order of the high court to reflect
that the
provisional winding up orders were discharged
[1]
.
[7]
The liquidators in each case had been appointed in June 2017, as the
provisional joint liquidators of Redisa and KTC, and held
office
until the companies were discharged from liquidation in January 2019.
[8]
After the appeal had been upheld and the companies were discharged
from liquidation, a meeting was held between the directors
of the
companies, the liquidators, and their legal representatives,
regarding the return of control of the companies to the directors.
The liquidators informed the meeting that they had taken the decision
to ‘ring-fence’ an amount of R 20 million as
cover for
their fees in respect of Redisa and R 2 million in respect of KTC and
that such sums had been transferred into the trust
account of
Bowmans.
[9]
The liquidators delivered draft intromissions accounts in regard to
the estate in which they reflected the proposed fees –
just
over R14 million in the case of Redisa, and just over R1.5 million in
the case of KTC. On 19 February 2019, an amount
(the
difference between the original amounts transferred to Bowmans and
the proposed fees) was accordingly paid out by Bowmans
to the
companies on the instructions of the liquidators. Approximately
R17.8 million of the disputed funds remains in Bowmans’
trust account. The companies disputed both the probity and the
quantum of such accounts and insisted that they be paid what was
being held by Bowman’s at the instance of the liquidators. The
companies launched proceedings in the court a quo on 20 February
2019
seeking an order that the funds held by Bowmans be paid to them.
[10]
The
companies contended that whilst a company is in liquidation, the
liquidators occupy a position in relation to the company which
approximates that of a company’s board of directors.
[2]
Upon discharge of the companies from provisional liquidation, the
liquidators were divested of their powers and were required to
restore control of all of the companies’ assets, which included
the disputed funds, to the former controllers.
[3]
The companies also disputed that Bowmans were holding the disputed
funds as a stakeholder.
[11]
The liquidators, on the other hand, contended that, as a matter of
law, the companies were liable for their remuneration and
they were
thus entitled to payment of such remuneration from the assets of the
companies. They stated that they paid over the disputed
funds to
Bowmans, as a stakeholder. They submitted further that the companies
were liable to pay the reasonable remuneration as
taxed or agreed,
and that the monies could be retained by Bowmans pending taxation or
agreement. Having regard to communications
between the parties and to
the assertions or a lack of them in the founding affidavits, the
liquidators had a reasonable apprehension
that payment for their
services would be disputed. It was for that reason, in response to
the applications by the companies, that
they brought
counter-applications, seeking an order that the companies were liable
to pay their reasonable remuneration.
[12]
Section
342
[4]
of the Companies Act 61
of 1973 (the Act) deals with how assets of a company are to be
applied in a winding--up and s 391
[5]
of the Act sets out the general duties of a liquidator. Section 384
of the Act deals specifically with the remuneration of a liquidator.
[13]
Section 384(1) of the Act provides that, in a winding-up, a
liquidator is entitled to a reasonable remuneration for their
services, which requires taxation by the Taxing Master in accordance
with the prescribed tariff. In terms of s 384(2), the
Taxing
Master may reduce or increase or disallow such remuneration on
certain grounds. For this reason, the companies contended
that the
entitlement to payment of the fees cannot arise before taxation.
[14]
The liquidators relied on s 384(3) of the Act, which provides that
the liquidator is entitled to be paid their remuneration,
to which
they are entitled under the Act ‘out of the assets of the
company’. They submitted that there was thus statutory
justification for retention of certain of the assets (the disputed
funds) to be applied in relation to fees due to liquidators,
as
opposed to the other assets which must be restored upon discharge
from liquidation.
[15]
The liquidators also sought to place reliance on regulation 24 read
with Annexure CM104.2 of the Regulations in terms of the
Act, which
provides that, when an appointment is provisional, and the
application is dismissed, the liquidator is entitled to ‘fees
to be taxed by the Taxing Master with due regard to the special
circumstances of the case’.
[16]
Furthermore,
the liquidators relied on
In
re Insolvent Estate Paruk
,
[6]
Rose v
Kemp
[7]
and
Van
Eck v Meyer
[8]
as well as
Blackman:
Commentary on the Companies Act
.
[9]
[17]
In
Paruk
,
a provisional trustee who had been appointed prior to a sequestration
petition being withdrawn, drew an account for his administration
of
the insolvent estate, in which he reflected that rentals had been
collected on the insolvent property, and against these rentals,
he
charged the expenses of the administration of the estate. The court
upheld what the liquidator had done. It held: ‘…such
expenses [ie the liquidators’ remuneration and disbursements]
must be charged against the rents which were the only moneys
in the
trustee’s hands’.
[10]
[18]
The court a
quo held that
Paruk
was not authority for the proposition relied upon by the liquidators.
It found that
Paruk
did not
hold that liquidators may retain or withhold a ‘self-determined
fee’ from company assets. On a proper interpretation
of
Paruk
,
the liquidators could ‘reflect’ the fees in the estate
account, but were not permitted ‘to draw’ the
remuneration until reflected in a taxed and confirmed account.
[11]
[19]
The liquidators contended that the court a quo’s interpretation
of
Paruk
does not accord with the view expressed by Blackman
that a provisional liquidator is entitled to retain sufficient assets
of the
company to cover his or her expenses and remuneration. The
liquidators stated that they have not drawn the remuneration prior to
the confirmation of the estate account and that the disputed funds
are being held in Bowmans’ trust account.
[20]
In
Van
Eck
, an
order of provisional sequestration had been set aside and the former
provisional trustee (the plaintiff) handed all assets
back to the
defendant. The plaintiff then sued the defendant for his reasonable
remuneration as erstwhile provisional trustee.
The court held that
the plaintiff had a claim for reasonable remuneration and that he had
not lost that claim by returning the
defendant’s assets to
him.
[12]
The court held
further that
the
trustee had no choice but to return all the assets to the former
insolvent upon the revocation of the order
.
[13]
(Emphasis added.)
[21]
The liquidators also relied on
Rose
where the court held that
when a provisional sequestration order is discharged, it was the
former provisional trustee’s duty
to account to the former
insolvent and that the property of the insolvent, which vested in the
former provisional trustee, as a
matter of law, vested in the former
insolvent. The court, however, held that the disputed amount which
had been deducted by the
provisional trustee did not vest in the
former insolvent on discharge but that ‘there arises a right in
the insolvent to
claim an account of the amount due.’
[22]
As set out above, the companies, on the other hand, contended that as
on the discharge of the companies from liquidation, the
liquidators
are divested of their powers and must therefore restore control of
all the assets of the company to the directors.
They are not entitled
to deduct their remuneration from the assets of the companies before
handing back such assets.
[23]
The
companies also relied on Regulation 24 and
Annexure
CM101 and CM104 to the Regulations.
[14]
They
submitted that Annxeure CM104 did not support the liquidators’
contentions. They contended that it supported their case.
Annexure
CM101 provides general directions on the form and contents of
liquidators' accounts. Item 5 of CM101.5 reads:
‘
The
account of payments may provisionally be credited with the amount
claimed in respect of the liquidator's remuneration, but no
such
remuneration or part thereof shall, except by permission of the
Master... or the Court, be drawn until the account in which
it
appears has been confirmed’.
[15]
[24]
At common
law, a trustee in an insolvent estate may not claim or draw his or
her remuneration before the estate account reflecting
this
remuneration has been taxed and confirmed. This common law principle
is equally applicable to liquidators,
[16]
and, as demonstrated below, it is bolstered by the provisions of
the
Act and Regulations.
[25]
In assessing whether the authorities cited by the liquidators support
the contention that they are entitled to retain the disputed
funds,
reference can be made to
Strydom
NO v The Master of the High Court,
[17]
where
Tuchten J held that ‘[u
]nder
the common law, a trustee cannot
claim
or draw
his remuneration until the account in the estate showing the amount
thereof has been confirmed. This common-law principle is by
no means
repugnant with the provisions of the
Insolvency Act 24 of 1936
,
and is thus an applicable principle of our insolvency law today.’
[18]
(Emphasis added.)
[26]
There are certain
administrative processes applicable to an estate account. They are
contained in, inter alia, ss
403,
406 and 407 of the Act. Section 403 obliges every liquidator (which
includes a co-liquidator and a provisional liquidator
unless the
context otherwise indicates),
to
frame and lodge accounts with the Master containing an account of
receipts and payments and a plan of distribution.
Under s 406, the
estate account must lie for inspection for a period of at least 14
days at the office of the Master. Notice
that the account is lying
for inspection must be given in the Government Gazette. The account
is open to objection. Section 407
provides for objections to be made
and considered. The Master also has the power, even if objections are
not made, to direct the
liquidator to amend his account or give any
other directions he thinks fit. Once the account has lain for
inspection and the period
for objections has passed, without
objections or, if an objection has been lodged, dealt with or
withdrawn, the Master must, under
s 408, confirm the account.
Such confirmation has the effect of a final judgment save in limited
circumstances.
[27]
It was
submitted on behalf of the liquidators that these sections do not
apply to provisional liquidators because a provisional
liquidator
does not liquidate or distribute the assets of a company in
liquidation. In dealing with such a submission, Tuchten
J stated in
Strydom:
‘
This
is no doubt the general position, but it is not always so . . . the
submission does not seem to me to explain why the provisional
liquidator's account, whatever it contains, should not lie for
inspection and be open to objection under the Companies Act. The
applicant submits that his provisional account will lie for
inspection as an attachment to the liquidator's account. But by then,
if the applicant gets his way, the fees dealt with in the provisional
account will have been paid out, to the potentially irreversible
prejudice of creditors. To use the language of the definition of
liquidator in s 1 of the Companies Act, I do not see that the
context
of these sections indicates that provisional liquidators are to be
excluded from their reach.’
[19]
[28]
In
AMS
Marketing Co v Holzman and Another
[20]
it was held that once the company is discharged from liquidation, a
liquidator is divested of all his powers and ‘[t]
here
are no grounds upon which he may retain
any
assets of the company and any books, records, and documents which
came into existence must remain with the company when he vacates
his
office.’ (Emphasis added.)
[29]
Contrary to the liquidators’
contention that they were entitled to retain sufficient funds to
cover their remuneration,
Van
Eck
says the
very opposite. The court held that the trustee had no option but to
return all of the assets to the insolvent upon discharge
of the
sequestration order.
Paruk
,
like
Van Eck
,
held that where a sequestration application is withdrawn (or
discharged), the trustee may reflect a claim for his remuneration
in
the estate account.
Paruk
is not authority for the
liquidators’ submission that pending taxation and confirmation,
they may retain a ‘self-determined’
fee from the
companies’ assets, and only restore those assets which are in
excess of their proposed fee.
[30]
Reliance on
Paruk
and
Rose
is
misplaced for the additional reasons that follow. First, these cases
precede the Act and the Regulations, its immediate predecessor
and
the
Insolvency Act. Second
, they deal with a trustee in insolvency
proceedings. Unlike an insolvent, whose assets vest in the trustee
once a sequestration
order is made and the trustee appointed,
[21]
a company being wound up is not divested of its assets. This only
occurs if an order is made in terms of s 361 of the Act,
which
provides that the court may order that ‘all or any part of the
property. . . belonging to the company. . . shall
vest in the
liquidator in his official capacity, and thereupon the property. . .
shall vest accordingly’
.
No such order was made in the present case and all the assets,
including funds in bank accounts, remain the property of the
companies.
Thus, once the liquidators’ powers end, they have a
claim for their taxed or agreed remuneration, but no right at common
law or under the Act or Regulations to retain control over the assets
of the company to secure their claim.
[31]
A liquidator conducts the affairs of a company as if they are an
officer of the company. The liquidators conceded that they
did not
made out a case for an anti-dissipation interdict. They relied solely
upon a statutory right as a necessary incident of
the liquidators’
entitlement to remuneration in terms of s 384(3). Although the
liquidators also conceded that they would
not be entitled to hold the
funds under a lien, their conduct, in effect, has the characteristics
of a lien and is not permitted
– as is clear from
Howat
Motors
where Galgut J held:
‘
...the fact that
the books are the books of the company and that he [the liquidator]
was acting only as an officer of the company
is also an answer to the
submission that the respondent has a lien. His position can be
compared with that of the manager or managing
director of the
company. It surely could not be said that such a manager or managing
director has a lien on the books of the company
in respect of
emoluments due to him by the company and not paid.’
[22]
[32]
To
summarise, t
he
liquidators may reflect their fees in their account, but upon
discharge of the order, all assets, including funds which would
cover
their fees, must be returned to the companies.
The
provisions of the Act and the Regulations do not permit the
liquidators to retain the disputed funds. These are assets of the
companies.
The
liquidators are not permitted to draw their remuneration until the
estate account has been taxed and confirmed. Their interpretation
of
the commentary in Blackman on this point is also flawed. If one has
regard to the full passage in Blackman,
[23]
it accords with the general principles referred to in
Howat,
AMS Marketing and Strydom
i.e
‘a liquidator is
entitled to deduct his expenses and remuneration. But he is not
entitled to sell assets solely for the purpose of paying himself.
He
has no lien on any assets or books or papers for his remuneration.’
The implication is that the liquidators are not entitled
to ‘sell’
or ‘retain’ or ‘transfer’ the disputed funds
to cover their remuneration. The liquidators’
distinction
between their remuneration, on the one hand, and other assets of the
companies, on the other, is ill-conceived.
[24]
There is thus no lawful basis upon which the liquidators are entitled
to retain fees and/or transfer such funds to Bowmans, in
trust, for
their reasonable remuneration.
[33]
The decision to which I have come is dispositive of the appeal. It is
not strictly necessary to deal in detail with the dispute
between the
parties as to whether Bowmans was acting as a stakeholder. Suffice it
to say that the liquidators’ version that
they transferred the
monies to Bowmans in anticipation of the appeal being upheld and
their fear of not being paid, contradicts
the allegation that Bowmans
was acting as a stakeholder. This position was also only belatedly
raised by the liquidators many months
after the monies had been
transferred to Bowmans. Nor is it plain how a tripartite agreement
came to be formed between the liquidators,
acting both in their own
interests and on behalf of the companies, and Bowmans. The court a
quo dealt comprehensively with this
issue and the reasoning in the
judgment cannot be faulted.
[34]
In regard to the appeal against the finding in relation to the
companies’ striking-out applications, the court a quo
correctly
found that the offending allegations contained in the liquidators’
affidavits fell to be struck-out. The reasons
advanced by the court a
quo also cannot be faulted.
[35]
In
relation to the costs of the counter-applications and the joinder
applications,
in their founding
affidavits the companies did not admit liability to pay the
liquidators their reasonable remuneration. As a consequence,
the
liquidators sought a declaratory order to that effect in
counter-applications. They later sought to join the Minister on the
basis that, if it was held that the companies were not liable to the
liquidators, the Minister would be liable. The companies’
equivocal acknowledgements in their answering affidavits in the
joinder applications did not help. By the time of the hearing,
it
became clear that there was an acknowledgement by the companies that
they were liable for the fees of the liquidators. The costs
of the
dismissal of the counter-applications should thus not have been
awarded against the liquidators. I did not understand counsel
for the
companies to contend otherwise. Counsel for the liquidators did not
seek to overturn the costs order in respect of the
joinder
applications.
[36]
The
following order is made:
1.
Save
to the limited extent related to the costs order in the
counter-application in the court below, reflected in 2 below, the
appeal is dismissed with costs, such costs to include the costs
consequent upon the employment of two counsel.
2.
The
order of the court below is amended to read as follows:
‘
The relief sought
by Recycling and Economic Development Initiative of South Africa NPC
and Kusaga Taka Consulting (Pty) Ltd in prayer
3 of their Notices of
Motion respectively, is granted with costs. The Counter Applications
are dismissed. The Joinder Applications
are dismissed with costs. The
costs are to include the costs attendant upon two counsel
______________________
WEINER
AJA
ACTING JUDGE OF APPEAL
APPEARANCES
For
the appellants: B Manca SC with C Morgan
Instructed
by: Edward Nathan Sonnenbergs Incorporated, Cape Town
Lovius
Block Attorneys, Bloemfontein
For
the respondents : J Dickerson SC with K Reynolds and L Kelly
Instructed
by: Cliffe Dekker Hofmeyr Incorporated, Cape Town
Claude
Reid Attorneys, Bloemfontein
[1]
Recycling
and Economic Development Initiative of South Africa NPC v Minister
of Environmental Affairs
[2019]
ZASCA 1; 2019 (3) SA 251 (SCA).
[2]
Howat
Motors (Pty) Ltd v Waterson
[1963]
4 All SA 54
(T);
1963
(3) SA 669
(T) at 673B-C.
[3]
AMS
Marketing Co v Holzman and Another
[1983] 4 All SA 316
(W); 1983 (3) 263 (W) at 270A-C.
[4]
Section 342. Application of assets and costs of winding-up
(1)
In every winding-up of a company the assets shall be applied in
payment of the costs, charges and expenses incurred in the
winding-up and, subject to the provisions of section 435 (1)
(b)
,
the claims of creditors as nearly as possible as they would be
applied in payment of the costs of sequestration and the claims
of
creditors under the law relating to insolvency . . . shall be
distributed among the members according to their rights and
interests in the company.’
[5]
Section 391. General Duties
A
liquidator in any winding-up
shall
proceed forthwith to recover and reduce into possession all the
assets and property of the company, movable and immovable,
shall
apply the same so far as they extend in satisfaction of the costs of
the winding-up and the claims of creditors, and shall
distribute the
balance among those who are entitled thereto.’
[6]
In re
Insolvent Estate Paruk
(1913)
34 NPD 424.
[7]
Rose v
Kemp
1914
WLD 14.
[8]
Van Eck
v Meyer
[1964]
4 All SA 137 (GW); 1964 (4) SA 609 (GW).
[9]
M S Blackman
et
al Blackman’s Commentary on the Companies Act
2011 (RS 8) 14-324. The full passage reads: ‘Where after
the appointment of a provisional liquidator the liquidation
proceedings are withdrawn, the provisional liquidator is entitled to
deduct his expenses and remuneration. But he is not entitled
to sell
assets solely for the purpose of paying himself. He has no lien on
any assets or books or papers for his remuneration.’
[10]
Paruk
,
supra at 428.
[11]
See also
Strydom
NO v The Master of the High Court
[2010] ZAGPPHC 164;
2010 (6) SA 630
(GNP) para 27.
[12]
Van
Eck
,
supra at 612C.
[13]
Ibid at 612A-D; see also
Paruk
,
supra in which case this issue was dealt with similarly.
[14]
Note
4 above.
[15]
In
TLE
(Pty) Ltd v The Master of the High Court
,
the court held that
insofar
as CM 101.5 provides that liquidators may, with the Master’s
permission, draw their remuneration before the Taxing
Master has
confirmed the estate account reflecting such remuneration, this
would be
ultra
vires
the Act.
[16]
Strydom
,
supra paras 27-32. See also
Howat
Motors (Pty) Ltd
,
supra where the court held that the position of a provisional
liquidator was no different to that of a provisional trustee as
the
provisions in the
Insolvency Act 24 of 1936
and the provisions in
the previous 1926 Companies Act relating to provisional liquidators
shared the same purpose.
[17]
Strydom
,
supra.
[18]
Tuchten J in
Strydom
,
supra para 27, citing Bertelsmann et al
Mars:
The Law of Insolvency in South Africa
(9 ed)
at 310 and 13;
Meskin:
Insolvency Law
(service
issue 34) para 4.21;
Abbott
v Bryant
20 CTR 943;
R
v Macleod
1935
EDL 284
;
Elliot
Brothers (East London) (Pty) Ltd v The Master and Another NO
[1988]
1 All SA 53 (E);
1988
(4) SA 183 (E)
at 192I.
[19]
Strydom
,
supra para 29.
[20]
AMS
Marketing
supra
at 270A-C.
[21]
Section
20(1) of the Insolvency Act 24 of 1926 provides that the effect of a
sequestration order is to divest the insolvent of
their estate and
to vest it in the Master until a trustee is appointed, and in the
trustee once they are appointed.
[22]
Howat
Motors
,
supra at 673B-C.
[23]
Blackman
supra
Note 8
[24]
Howat
,
supra and
AMS
Marketing
,
supra are clear on this point.