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[1990] ZASCA 134
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Gilbey Distillers & Vintners (Pty) Ltd. and Others v Morris NO and Another (193/89) [1990] ZASCA 134; 1991 (1) SA 648 (AD); [1991] 1 All SA 406 (A) (16 November 1990)
GILBEY DISTILLERS & VINTNERS
(PTY) LTD AND OTHERS
APPELLANTS
and
DAVID ALEXANDER MORRIS N O
AND ANOTHER
RESPONDENTS
Judgment by: NESTADT JA
CASE NO. 193/89
/CCC
IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATE
DIVISION)
In the matter between:
GILBEY DISTILLERS & VINTNERS (PTY) LTD FIRST
APPELLANT
SLIMS (PTY) LTD
SECOND APPELLANT
GILBEY
RETAIL HOLDINGS (PTY) LTD THIRD APPELLANT
and
DAVID ALEXANDER MORRIS N O
FIRST RESPONDENT
MASTER
OF THE SUPREME COURT
(EASTERN CAPE PROVINCIAL DIVISION) SECOND RESPONDENT
CORAM
: JOUBERT ACJ et SMALBERGER, NESTADT, KUMLEBEN JJA
et
FRIEDMAN AJA
DATE HEARD:
17 SEPTEMBER 1990
DATE DELIVERED
: 16 NOVEMBER 1990
2/
2.
JUDGMENT NESTADT, JA:
This
appeal arises from a dispute between appellants, as creditors in an insolvent
estate, and first respondent, the trustee. It concerns
the remuneration claimed
by the trustee for his services. Two amounts are involved. They were
respectively reflected in first and
second liquidation and distribution accounts
as owing to him by the estate. The accounts were confirmed by the Master.
Appellants
applied to the South Eastern Cape Local Division to review and set
aside the conf irmation of that part of each account allowing
the fees in
question. An order declaring that the trustee was not entitled to the
remuneration claimed was also sought. The Master
was cited as second respondent.
The matter came before KANNEMEYER JP who dismissed the application. However, the
learned judge granted
leave to appeal to this Court. Hence this appeal.
3/
3.
The judgment a
quo
has been
reported in 1990(2) SA 217. It details the nature of the dispute between the
parties and how it arose. Perhaps these matters
can be summarised as follows.
The insolvent's business was that of a hotel-keeper. He also sold liquor through
what are termed off-sales
outlets. Appellants feared that if, consequent upon
sequestration, trading ceased, the insolvent's liquor licences in respect of
the
business might be cancelled. In this event they, as major creditors and (in
effect) lessors of the premises, would be prejudiced.
So. they proposed to the
trustee that in order to preserve the liquor licences the business be carried
on. The trustee was agreeable
to this. Sales of liquor accordingly continued for
over two years. These sales are the genesis of the trustee's claim to the
contentious
remuneration. The claim is based on
sec 63(1)
of the
Insolvency Act,
24 of 1936
("the
Act"). This
section entitles a trustee to a
4/
4. reasonable remuneration for his services "to
be taxed by the Master according to tariff B in the Second Schedule to this
Act". Item
4 of this tariff provides for remuneration at the rate of 6% "on
sales by the trustee in carrying on the business of the insolvent,
or any part
thereof, under
section 80".
Sec 80
empowers creditors (or the Master) to
authorise the trustee to carry on the insolvent's business. The trustee's
attitude was that
the sales in question were effected by him whilst carrying on
the business of the insolvent (with the consent of creditors) and that
he was
accordingly entitled to a fee based on item 4. In the first account submitted by
him there was therefore included under "Trustee's
Remuneration" an amount of R93
615,35 representing the prescribed percentage of the turnover of the business
during the period covered
by the account. Similarly, the second account
contained a claim for remuneration in the sum of R89 105,60 being 6% of
subsequent
5/
5. sales. These accounts, as I have indicated,
were confirmed by the Master. This was, of course, after they had (separately)
been
advertised and lain open for inspection in terms of
sec 108.
Confirmation
took place in terms of
sec 112
of the
Act. It
will be necessary in due course,
when considering whether the section has the effect of excluding the court's
review jurisdiction,
to refer again to its provisions. Suf f ice it at this
stage to say that it enjoins the Master, when a trustee's account has been
open
to inspection by creditors and no objection has been lodged under
sec 111
, to
confirm the account. There were no objections to either account. Appellants
explain their failure to object by saying (in the
founding affidavit) that it
was only after confirmation of the second account that it was realised that the
trustee was claiming
the fees in question. When this became known, they voiced
their opposition to such claim. It was based
6/
6. on the contention that it was appellants, and
not the trustee, who had continued the insolvent's business and achieved sales;
item
4 did not therefore apply; and the trustee was not entitled to the
remuneration claimed. The founding affidavit goes on to submit
that the Master,
in confirming the accounts, was unaware of these facts; they had been concealed
or misrepresented by the trustee.
The conflict as to who carried on the
insolvent's business (and effected sales in doing so) requires amplification.
KANNEMEYER JP
refers to the point at 219 I -220 B. It is obviously central to
the dispute between the parties. If, indeed, the trustee did carry
on the
business, that is an end to the matter. He would be entitled to the remuneration
claimed and the review proceedings would
have rightly been dismissed. The
application did not make out the case that because the trustee was not effecting
sales personally
or through his
7/
7. own staff, the Master should in terms of
sec
63(1)
have taxed his remuneration in a reduced amount. Pursuant to the decision
that the business should not be closed, the parties agreed
that appellants would
"manage [it] on your [the trustee's] behalf". This is what happened. Certain
employees of a company engaged
by appellants moved in and took over the
administration of the business (including the existing staff). They acted under
the supervision
of appellants. This continued throughout the period in respect
of which the trustee claimed remuneration in terms of the tariff.
Appellants'
affidavits detail what their management involved. In short, it may be said that
the day to day running of the business
was in their hands. This included the
ordering and taking delivery of stock; sales thereof to the public; the receipt
and banking
of the proceeds of such sales; the drawing up of certain financial
statements; giving the staff instructions and paying the
8/
8. salaries of some of them. Of particular
importance is that the resultant profit or loss was for appellants' account.
This was specifically
agreed to with the trustee. Indeed, at his insistence,
appellants indemnified the estate against liability for any trading losses.
There is some dispute as to what the trustee's functions were. But adopting the
principle of
Plascon-Evans Paints Ltd vs Van Riebeeck Paints (Pty) Ltd
1984(3) SA 623(A) at 634 F, it may be said that he retained what he terms
"overall control" of the conduct of the business; he was
"ultimately
responsible" for its management. This meant that all purchases had to be
approved by him; he would then arrange for their
payment; appellants were
obliged to and did give him daily reports about the income and expenditure of
the business; he approved
the engagement and dismissal of staff; he paid the
salaries of most of the employees as well as the general running expenses of the
business (including the cost of stock); he
9/
9. ensured compliance with the liquor licences
which, of course, vested in him; what are referred to as trading accounts, such
as
the cash book and bank reconciliation statements, were prepared by him; and
he conducted and controlled the banking account of the
business.
The business
was, I consider, carried on in terms of
sec 80.
Indeed, this proposition was not
challenged in the founding affidavit. And, as I have said, creditors approved of
this course. The
nice point that arises, however, is whether in view of the
division of responsibilities referred to, the trustee is rightly to be
regarded
as having effected sales in carrying on the business within the meaning of this
expression as used in item 4. I assume that
the tariff does not permit of a
joint carrying on of the business. But plainly it does not require a trustee to
act personally. He
can, and usually will, employ or depute someone to carry on
the business for
10/
10.
him (
Klatzkin vs Noble NO
1915 AD
713
at 717). Was that the position here? Or did the trustee abdicate the task of
carrying on the business in favour of appellants? In
arguing for an affirmative
answer to the last question, appellants' counsel stressed the fact that it was
appellants and not the
estate who stood to profit or lose from the carrying on
of the business; this was said to be inconsistent with the notion of the
trustee
carrying on the business; it was appellants as managers who did this (and
effected sales); the "overall responsibility" on
which the trustee relied was
insufficient; it was a residual duty which flowed simply from his representative
ownership of the assets
of the estate. I am not sure that the argument does not
underestimate the trustee's position. It was he who was authorised by creditors
to carry on the business. Seeing that on insolvency the liquor licences vested
in him (
Mars
, The Law of Insolvency in South Africa, 8th ed, 180), he
was
11/
11.
the only person who could do this (see
sec 69 (3) of the Liquor Act, 87 of 1977). Appellants' undertaking to the
trustee to manage
the business "on your behalf" is indicative of a relationship
of agency (
De Visser vs Fitzpatrick
1907 TS 355
at 363;
S vs Moloi and
Another
1987(1 ) SA 196(A) at 215 B). In the trustee's report to the second
meeting of creditors it was stated that "the Trustee, with the
consent of the
major creditors continued to trade. The creditors authorised Messrs Gilbey's to
act as the Trustee's agent and to
conduct business at the premises of the
insolvent". Neither appellants nor any other creditors took issue with this
statement. It
is not unknown for an agent's remuneration to take the form of
profits accruing from the transaction conducted on behalf of the principal
(
Bamford
On the law of Partnership and Voluntary Association in South
Africa, 8-9). However, I do not propose to pursue the point. The judge
a
quo
did not
12/
12. find it necessary to decide it (see 228 A).
Neither do I. I shall assume, in favour of appellants, that it was they who
carried
on the business and effected sales and that the trustee was therefore
not entitled to a fee of 6% on the turnover of the business.
How does the
matter then stand? As will be seen, the Master was under the impression that the
trustee was carrying on the business
and that he was therefore entitled to the
remuneration claimed. On the assumption made, he was mistaken. He should, had he
been aware
of the true position, have amended the accounts so as to exclude such
remuneration. Sec 111(2) of the Act empowered him to do this.
ln this event he
would not have confirmed them in terms of sec 112 as he did. But confirmation
having taken place, did appellants
have a rêmedy? To decide this it is
necessary to consider in more detail sec 112 as also sec 151 of the Act. They
correspond
(though there are important
13/
13.
differences) with secs 408 and 355 of
the Companies Act, 61
of
1973. Sec 151
provides:
"Subject to the provisions of section
fifty-seven
any person aggrieved by
any decision, ruling, order or taxation of the Master or by a decision, ruling
or order of an officer presiding
at a meeting of creditors may bring it under
review by the court and to that end may apply to the court by motion, after
notice to
the Master or to the presiding officer, as the case may be, and to any
person whose interests are affected: Provided that if all
or most of the
creditors are affected, notice to the trustee shall be deemed to be notice to
all such creditors; and provided further
that the court shall not re-open any
duly confirmed trustee's account otherwise than as is provided in section
one
hundred and twelve
."
In terms of sec 112, when a
trustee's account has been open
for inspection by creditors and no objection has been lodged
or an obgection has been lodged and the account amended or
an objection has been lodged but withdrawn:
"the Master shall confirm the account and his confirmation shall be final
save as against a person who maý have been permitted
by the court before
any dividend has been paid under the account, to reopen it".
Appellants' review proceedings were obviously
14/
14. brought in terms of sec 151. The Master's
confirmation of the accounts under sec 112 was a decision and, in relation to
the trustee's
remuneration, a taxation. The argument for appellants that the
application to reopen the accounts was soundly based can be briefly
summarised.
It was (i) that the Master's confirmation of the accounts had been induced by
the trustee's fraudulant misrepresentation
that he was carrying on the business;
(ii) alternatively, that the Master had been misled by conduct of the trustee
which was similar
to fraud; (iii) confirmation had, in any event, taken place in
ignorance of the true facts, viz, that the trustee was not carrying
on the
business; (iv) on any of these three bases, the accounts had not been duly
confirmed in terms of the second proviso to sec
151; sec 112 therefore did not
apply and the matter was reviewable under sec 151; such review was in the nature
of an appeal which
in the premises was bound to succeed; (v) even if the
15/
15. privative provisions of sec 112 governed,
the Master's confirmation of the accounts was liable to and should be set aside
on the
basis of (i), (ii) or (iii) above.
I think it is logical to deal
firstly with the argument that sec 112 does not apply at all and that therefore
all that appellants
had to show to justify interference with the Master's
confirmation of the accounts was that the trustee was not entitled to
remuneration
in terms of the tarif f ( (iv) above) . It is true that the review
conferred by sec 151 has been held to be of the third kind referred
to in
Johannesburg Consolidated Investment Co vs Johannesburg Town Council
1903
TS 111
at 117 (see, eg,
Thorne vs The Master
1964(3) SA 38(N) at 49 B -
D;
De Hart NO vs Klopper and Botha NNO and Others
1969(2) SA 91(T) at 96
D - E and 96 G - 97 A;
Rabinowitz vs De Beer NO and Another
1983(4) SA
410(T) and 414 F - H and also
Mars
,
op cit
, paras 2.2 and 17.28,
LAWSA Vol 11 , para 295 and
16/
16.
Herbstein and van Winsen
: The Civil Practice of the Superior Courts in
South Africa, 3rd ed, 760 - 1). In
Pretorius and Others vs Marais and
Others
1981(1) SA 1051(A) at 1061 D it was assumed that this view was
correct. This means that the court is not restricted in exercising
its powers of
review under the section to cases where some irregularity has occurred. The
court acts as a court of appeal and is
therefore entitled to adjudicate on the
matter de novo. But the principle must be confined to the type of decision,
ruling or order
in issue in these cases. It cannot operate where a "duly
confirmed" trustee's account is under attack. In this event the court's
power of
review is governed by sec 112 and is (as will be seen) limited. What then of the
argument that the accounts in
casu
were not duly confirmed? In my opinion
it must be rejected. A reference to
Stroud's
Judicial Dictionary, 5th ed,
vol 2, page 786, sv "duly", shows that where used as an adverb, "duly" is a word
which
17/
17. is capable of various meanings. In
particular it may relate to matters of form or of substance (see
Black's
Law Dictionary, 5th ed, page 450). But its primary meaning would seem to be the
former. Thus "duly"is defined by the Shorter Oxford
English Dictionary (3rd ed)
as "in due manner, order, form or season" (see, too,
West's
Legal
Thesaurus/Dictionary and
Wilson vs Cape Town Stevedoring Co
1916 CPD 540
at 545). This, so it seems to me, is the sense in which it is used in sec 151.
In other words, a duly confirmed account is one which
results from the proper
procedure having been followed. The account must have been open for inspection
by creditors under sec 108;
objections (if any) must have been dealt with in
terms of sec 111; and confirmation must have taken place by the Master
(consequent
upon him honestly applying his mind to the matter) and not say by an
imposter. But the fact that the confirmation is flawed by reason
of it having
been procured by the fraud of
18/
18. a creditor or the trustee or because the
Master was ignorant of facts material to his decision cannot detract from the
account
having been duly confirmed in the sense envisaged by sec 151. To uphold
the argument that it does, would result in the provision
for finality in sec 112
being rendered largely inoperative.
There was no dispute that all the requisite formalities regarding
confirmation were complied with. It follows that the second proviso
to sec 151
applied. The further consequence is that the accounts could only be re-opened in
terms of sec 112. This brings me to the
argument that this notwithstanding, the
confirmation was reviewable and should be set aside ((v) above). As I have
indicated, it
is based on three grounds. I deal firstly with the one that the
Master's decision was arrived at in the absence of material facts,
viz, that the
business had not been carried on by the trustee ( (iii) above) . No quarrel can
be had
19/
19.
with the factual basis of this
submission. In his report
to the court, the Master says:
"At the time of taxing the trustee's fees in both the first and second
liquidation accounts I was not aware of the agreement between
the trustee and
Gilbeys regarding the running of the business. I was under the impression that
Gilbeys was acting as agents for the
trustee."
On
the assumption referred to earlier, this impression was
wrong. In support of the legal submission that in these
circumstances the confirmation of the accounts was
reviewable, Mr
Gauntlett
, for appellants, cited a number of
authorities. They were to the effect that where a
functionary exercises a discretion on an incorrect basis of
fact, this may constitute a ground for review (see, ia,
Sandenbergh vs Mogale NO
1915 TPD 399
at 401 and 404;
Ronnies Motors (Pty) Ltd and Others vs Van der Merwe and
Another
1960(4) SA 206(E) at 211 A;
Northwest Townships
(Pty) Ltd vs The Administrator, Transvaal and Another
1975(4) SA 1(T) at 8 G as also the judgment of COOKE J in
the New Zealand case of
Daganayasi vs Minister of
20/
20.
Immigration
[1980] 2 NZLR 130
(CA)).
Wade
:
Administrative Law, 6th ed at 328-9 refers to a number of
English decisions in support of the principle. He terms it the "'wrong factual
basis' doctrine".
Let us suppose that it does afford a ground of review in
our law. The question is whether it has not been excluded by the provision
in
sec 112 that when a dividend has been paid under the accounts "confirmation
shall be final". The papers show that a dividend was
paid under both accounts.
Even so, Mr
Gauntlett
argued that the court's power of review had not
been excluded. Counsel's submission was that sec 112 merely ousts a tardy
challenge
of the merits of a decision of the Master to confirm an account; where
confirmation takes place in the absence of material facts,
he does not properly
perform his function; in these circumstances the finality provision does not
21/
21 . operate.
A similar argument was considered by
KANNEMEYER JP (see 223D - 225A). Holding that the finality provision of sec 112
was not an ouster
but a time bar, the learned judge rejected it. I prefer to
approach the matter on the basis that the section does (in effect) contain
an
ouster clause. Nevertheless, I agree that the argument fails. True, there is a
presumption against construing a statute so as
to oust the jurisdiction of the
courts; clear language is required (
Minister of Law and Order and Others vs
Hurley and Another
1986(3) SA 568(A) at 584 A). Thus even the use of "final"
is not necessarily indicative of an intention to render a decision immune
from
review. There are a number of English cases which say this (see eg
Regina vs
Medical Appeal Tribunal. Ex parte Gilmore
[1957] 1 QB 574
(CA) at 586 and
Tehrani
22/
22.
and Another vs Rostron
[1972] 1 QB 182
(CA) at
187). As used in sec 112, however, and for the following reasons, I do not think
that "final" ("afdoende" in the Afrikaans
version) permits of the accounts being
reopened on the ground under consideration.
(a) Amongst the ordinary meanings of "final" is "conclusive", "decisive" or
"completed" (
Black
,
op cit
, and
Wes
t,
op cit
).
Funk and Wagnall's
Dictionary defines "final" as "that which makes an
end".
(b) It was pointed out by OGILVIE THOMPSON JA in
Callinicos vs Burman
1963(1) SA 489(A) at 500 H that the Act provides effective machinery enabling
the proved creditor, by way of objection, to prevent
the confirmation of the
account. What such machinery is, is dealt with at 498 C - fin. There is
thus
23/
23.
reason to think that the Legislature, by
providing for finality after
confirmation and
payment of a dividend, intended that there
could then be
no reopening on any ground.
This would seem to have been the view
of
WILLIAMSON JA who, in a separate concurring
judgment, said (at 503
B):
"In particular sec. 112 in providing that the confirmation of an account by
the Master 'shall be final' means that the matters dealt
with in the account,
being purely estate matters, are finally disposed of and cannot be
reopened."
(See, too, to the same effect,
S A Clay
Industries Ltd vs Katzenellenbogen NO and
Another
1957(1) SA
220(W) at 224 E - F;
Rulten NO vs Herald Industries (Pty) Ltd
1982(3) SA 600(D) at 604 G;
Wispeco (Pty)
Ltd vs Herrigel NO and Another
1983(2) SA
20(C) at 25 F and 26 E - F;
Swift Trailer Co
24/
24.
(Pty) Ltd vs The Master and Others NNO
1983(4) SA 781(T) at 786 A
and D and
Kilroe-Daley vs Barclays National Bank Ltd
1984(4) SA 609(A)
where at 627 G the
S A Clay
case,
supra
, is quoted with
approval.)
(c)
This approach would also
promote what has been stated to be the whole purpose of sec 112, namely "to
prevent a trustee having to set
about recovering amounts which have been
actually received by creditors by way of dividend" (per TEBBUTT J in the
Wispeco
case,
supra
, at 27 A).
(d)
The predecessor of sec 112 was sec 98(1) of Act 32 of 1916. It was
in similar terms save that the expression used was that confirmation
"shall have
the effect of a final sentence". This meant that an
account
25/
25. could be reopened if grounds for
restitutio in integrum
were established, ie fraud or
iustus error
.
Now, of course, it is simply stated that confirmation "shall be final". So the
change was a significant one. It signifies that the
Legislature intended to make
the confirmation of an account more conclusive than it was. (e) The principle
that where the Legislature
uses the same word in the same enactment, it may
reasonably be supposed that it intends the word to have the same meaning, also
applies.
Sec 57(10) provides that the decision of the Minister of Justice
regarding the appointment of trustees is to be final. It seems clear
that such a
decision is not ordinarily reviewable unless eg the Minister failed to
26/
26.
give any consideration to the matter (see
Henochsberg
on The
Companies Act, 4th ed, 655 where the equivalent section of the Companies Act,
namely sec 371, is dealt with). (f) Sec 112
obviously curtails the court's power
of interfering with the Master's confirmation of an account. The issue is the
ambit of such
curtailment. Appellants would have it that only what amounts to an
appeal against the Master's decision is affected. This is untenable.
Even before
payment of a dividend, a confirmed account can only be re-opened on the limited
grounds of
restitutio in integrum
(see the
S A Clay
case,
supra
, at 224 E - F and the
Wispeco
case,
supra
, at 27 F).
This disposes of the argument that the
27/
27.
accounts were reviewable on the ground that in confirming
them the Master mistakenly thought that the trustee was carrying on the
insolvent's business. But this was not appellants' main point. It was that
confirmation of the accounts should be set aside on the
ground that the trustee
had fraudulantly misrepresented the true position to the Master (argument (i)
above). Here, too, the question
is whether the privative part of sec 112 does
not exclude the jurisdiction of the courts to review the confirmation of the
accounts
on this ground. KANNEMEYER JP held (at 223 C - D and 225 A) that the
accounts had not been rendered unassailable; they could be re-opened
on the
grounds of
dolus
(on the part of the trustee) or
iustus error
(on
the part of appellants) .
Justus error
was not relied on before us.
Appellants were admittedly at fault in not realising, prior to
28/
28.
confirmation of the accounts, that the trustee was claiming a
fee on the basis that he was carrying on the business. They failed to
properly
peruse the accounts. That leaves the question of fraud. No doubt fraud is a
special case. In the words of DENNING LJ in
Lazarus Estates Ltd vs
Beasley
[1956]1 QB 702 (CA) at 712 "fraud unravels everything". Prof
Baxter
, in his Administrative Law at 519, says that dishonesty is the
most tenacious ground of review; it survives the strictest ousters
of the
courts' jurisdiction. The well-known case of
Union Government vs Fakir
1923 AD 466
is a good illustration of this. These considerations
notwithstanding, I have some doubt as to the correctness of the court a
quo's
interpretation of sec 112. It may be, having regard to what was
said earlier when dealing with the meaning of "final", that the court's
power to
review the confirmation of an
29/
29.
account where a dividend has been paid, has been ousted, even
where there has been fraud on the part of the trustee. However, it is
unnecessary to express a firm opinion on the point and I do not do so. It seems
to me that the matter can and should be decided on
the facts.
I turn to a
consideration of those which are relevant. It will be remembered that the
trustee, in substance, reported that he continued
to trade through the agency of
appellant. On the assumption referred to earlier, this was untrue. And the
Master was thereby misled
(see that part of his report already quoted). On the
trustee's version, it was a term of the agreement with appellants that his
remuneration,
calculated according to the tariff, would form part of the
expenses of running the business and would thus be for appellants' account.
This, too, was not disclosed
30/
30.
to the Master. Another, and in point of fact the
main
misrepresentation relied on, arose from a sub'sequent
request by the Master (in relation to the first
account) to the trustee to
"please justify your fee".
The trustee replied in the following terms:
"The administration of this estate has required the full time attention of an
accountant plus two or three clerks
as well as that of the trustee and
assistant
. Also the trustee has made numerous trips to Cape Town in
connection with the Liquor Licences and has held many non-statutory meetings
with creditors regarding the affairs of the
estate."
The portion I have underlined must be left
out of
account. Appellants, in quoting the trustee's reply
in their founding affidavit, in error omitted it.
Neither they nor the
trustee dealt with it. Nor did
the judge a
quo
. It was raised for the first time in
argument before us. Appellants' complaint about that
part of the reply which was referred to was that the
31/
31 . trustee's work in connection with the business did not
require the full-time services of am accountant and that the trustee's
statement
that it did was deliberately false. So, too, was the allegation that he -was
required to travel to Cape Town (from Port
Elizabeth).
The court a
quo
considered these criticisms of the manner in which the trustee reported to the
Master. It nevertheless came to the conclusion (at
228 A) that it had not been
established that the trustee had been fraudulant. I fully agree. In his
answering affidavit the trustee
denies that his answer to the Master's request
that he justify his fee was false. He explains that he was dealing with his
remuneration
and work in relation to the estate generally and not only with the
conduct of the business; so regarded, what he told the Master,
was correct.
There is no basis on which this assertion
32/
32.
can be rejected. The Master himself does not dispute it. That
leaves for consideration the trustee's (assumed) mis-representation
that he was
carrying on the business. Having pointed out (at 226 A) that fraud is not
lightly inferred, KANNEMEYER JP finds (at 226
I) that the trustee had no intent
to mislead either creditors or the Master. There is ample justification for this
conclusion. Creditors,
and particularly appellants, were at all times kept inf
ormed of the trustee's claim to a 6% fee on the turnover of the business.
To be
sure (this appears from the founding affidavit), he at one stage warned a
representative of appellants that "it was pointless
continuing the businesses on
the basis on which they were being run as he was the only person benefitting
thereby". And, of course,
he disclosed the fact that appellants were running the
business (albeit as agent) to the Master.
33/
33.
It is obvious that the trustee genuinely thought that
he
was entitled to remuneration in terms of the tariff.
It remains to deal with the argument that the
trustee's conduct, if not fraudulant, was akin to fraud
and that on this
basis the accounts should be reopened
((ii) above). This was not a ground advanced in the
court below. The
principle relied on was first
referred to by this Court in
Narainsamy vs
Principal
Immigration Officer
1923 AD 673
where INNES, CJ,
referring to
Fakir's
case,
supra
, said (at 675):
"It was there stated that in spite of the terms of sec 3(1) a case for the
interference of a Court might arise where the action taken
had been manifestly
outside the jurisdiction conferred by the Act, or where fraud or a similar
element was found to have been present".
More
recently it was considered in
Sinqh vs Umzinto
Rural Licensing Board and Others
1963(1) SA 872(D) at
877 E - H and in
Winter and Others vs Administrator-
34/
34.
in-Executive Committee and Another
1973(1) SA 873(A)
at 887 C. Apparently the scope of the "similar element" has yet to be defined.
It may be that the rule is to be
confined to cases where the functionary has
acted improperly. It was in this context that INNES CJ referred to it. That, of
course,
is not the case here. But, in any event, the argument cannot be
sustained. It is apparent from
Narainsamy's
case that to satisfy the
mental element there must be a want of good faith. Or, as it was put by KOTZE JA
in
MacDuff and Co Ltd (In Liquidation) vs Johannesburg Consolidated
Investment Co Ltd
1924 AD 573
at 610, what was done must have been "with the
consciousness that one is acting contrary to the law or good faith". The learned
judge
was dealing with
dolus
in relation to the fictional fulfilment of
contractual conditions, but I think the same applies here (see
35/
35.
Desai vs Assignee Estate Desai and Another
1935 CPD
503
at 511-2). In my opinion appellants have failed to show that the trustee had
this state of mind. He might have been mistaken in what
he told the Master, but
I remain unpersuaded that it was anything other than an innocent
mistake.
Appellants might have successfully been able to object to the
confirmation of the accounts and in this way frustrate the trustee's
claim to
remuneration in terms of item 4 of the tariff. They did not do so, however.
Their attempt to achieve the same result by
way of a review was, for the
aforegoing reasons, correctly found by the judge a
quo
to be
ill-founded.
The appeal is dismissed with costs. Costs are to include the
fees of two counsel.
NESTADT, JA
JOUBERT, ACJ )
SMALBERGER, JA ) CONCUR
KUMLEBEN, JA )
PRIEDMAN, AJA )