REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(1) REPORT ABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED : YES £7
• /z_->.,; _J~J--~f~S~_ /~ SIGNATURE
In the matter between:
JOHANNES ZACHARIAS MULLER
JOHANNES ZACHARIAS MULLER N.O
and
THE MASTER OF THE HIGH COURT
MS PENELOPE ROBERTS .NO
ACTING CHIEF MASTER OF THE REPUBLIC OF
SOUTH AFRICA Case Number: 2023/097464
FIRST APPLICANT
SECOND RESPONDENT
FIRST RESPONDENT
SECOND RESPONDENT
ADVANDRIES RAMOLURANA
THE MINISTER OF JUSTICE AND
CONSTITUTIONAL DEVELOPMENT
THE DIRECTOR GENERAL OF THE DEPARTMENT
OF JUSTICE AND CONSTITUONAL DEVELOPMENT
ENVER MOHAMMED MOTALA
JUDGMENT
Ramawele AJ
Introduction THIRD RESPONDENT
FOURTH RESPONDENT
FIFTH RESPONDENT
SIXTH RESPONDENT
[1] This is an application for a judicial review, under section 6 of the Promotion of
Administrative Justice Act 3 of 2000 (PAJA) alternatively on the principles of
legality.
[2] The First Applicant seeks an order in the following terms 1:
(a) That the decision by the First Respondent , executed by the Third Respondent
on 15 September 2023 to remove the First Applicant as joint liquidator in the
insolvent estate be and is hereby set aside in terms of section 6 of PAJA;
(b) Alternatively , to Prayer (a), that the decision of the First Respondent ,
executed by the Third Respondent on 15 September 2023 to remove the First
1 The first prayer relating to urgency has been omitted
2
Applicant as joint liquidator in the insolvent estate be set aside on the principle
of legality;
(c) That the decision of the First Respondent executed by the Third Respondent
on 15 September 2023 to appoint the Sixth Respondent as joint liquidator in
the insolvent estate be and is hereby set aside in terms of section 6 of PAJA;
(d) Alternatively , to Prayer (c), that the decision of the First Respondent ,
executed by the Third Respondent on 15 September 2023 to appoint the Sixth
Respondent as joint liquidator in the insolvent estate be set aside on the
principle of legality; and
(e) That the First Respondent and the Third Respondent , the latter qualified to
make payment of the costs de bonis propriis, be ordered to make payment of
the costs of the application jointly and severally, the one paying the other to
be absolved and, on the scale, as between attorney and client.
Background facts.
[3] The First Applicant has launched this application in his personal capacity as well
as in his capacity as the joint liquidator in the insolvent estate of SA MACHADO
CONSTRUCTION (PTY) LTD (In liquidation) (MACHADO ). This application was
launched on 27 September 2023 on urgent basis but removed from the urgent
roll because the First Applicant was subsequently reinstated by the First
Respondent as joint liquidator on 28 September 2023. The urgency of the
application had thus fallen away.
[4] The First Applicant together with the Seventh and Eighth Respondents were
appointed as the joint liquidators of MACHADO in 2018. There is a dispute
between the parties about what transpired on 15 September 2023. The First
Applicant alleges that he was removed as a joint liquidator whereas the Sixth
Respondent alleges that the First Respondent had committed an error by
removing the First Applicant as a joint liquidator.
3
[5] The version of what exactly transpired has not been fully set out in the papers
because the First and the Second Respondents are not opposing the application
and have therefore not filed any papers.
[6] On 20 September 2023 the Third Respondent addressed an email to the Sixth
Respondent inviting him to provide an endorsement in terms of section 37 4 of
the Companies Act read with section 381 (3) of the Act to investigate the records
and all serious allegations levelled against the appointed liquidators of several
companies, including MACHADO . The Sixth Respondent was requested to
provide a report within six months after his appointment as an investigator.
[7] On 21 September 2023 the First Applicant received a report from the Third
Respondent informing him that his removal was a typing error and that the error
will be rectified the following week.
[8] The Sixth Respondent was previously on the list of approved insolvency
practitioners but was removed by the First Respondent during 2011. The Six
Respondent challenged this decision to remove him from the list of approved
insolvency practitioners and the matter eventually reached the Supreme Court of
Appeal and is reported as Mota/a v Master of the High Courf2. Although the First
Applicant referred to this decision in his submissions while dealing with the
suitability of the Sixth Respondent as a liquidator, I find it unnecessary to
consider this case in this application in the view that I take.
[9] On 20 September 2023 the First Applicant's attorney addressed a letter to the
Third Respondent seeking written reasons for the removal of the First Applicant
as a joint liquidator.
[10] On 21 September 2023 the Sixth Respondent wrote an email to the Third
Respondent informing him that it has been brought to his attention that the
certificate appointing him as joint liquidator issued on 15 September 2023 had
omitted the First Applicant as a joint liquidator. The Sixth Respondent further
attached a certificate of appointment as Liquidators dated 20th September 2018
issued by the First Respondent wherein the First Applicant together with Mss
2 [2019) 3 ALL SA 17 (SCA)
4
Puleng Felicity Bodibe and Pontsho Lerato Seriti were appointed as joint
liquidators of MACHADO . The Sixth Respondent further confirmed that as soon
as the Third Respondent returns from leave, the error that had led to the omission
of the First Applicant as a joint liquidator would be rectified.
[11) After this application was launched on urgent basis on 27 September 2023, the
First Respondent reinstated the First Applicant as joint liquidator on 28
September 2023. The First Applicant is still the joint liquidator of MACHADO .
[12) There is also a counter application made by the Sixth Respondent in the South
Gauteng Local Division seeking a stay of these proceedings pending the
outcome of an application , launched by the Sixth Respondent against the First
Respondent. The Sixth Respondent seeks an order that the First Respondent be
directed to place him on the Master's national panel of accepted liquidators . As
a result of the conclusion that I have arrived at, it is unnecessary to consider this
counter application. The parties have also not made submissions on this
counterclaim or called upon me to make a decision on it.
Submissions by the First Applicant
[13] The First Applicant seeks to review and set aside three decisions allegedly made
by the First Respondent , namely, the decision made on 15 September 2023 to
remove him as joint liquidator, the second decision of the First Respondent to
appoint the Six Respondent as a joint liquidator in terms of section 37 4 read with
section 381 of the Companies Act of 1973 and the third decision by the Master
of appointing the Six Respondent as joint liquidator of the insolvent estate in
terms of section 377 read with section 381 of the Act to fill a vacancy on 28
September 2023.
[14] Although the first "decision" has since become moot because the First Applicant
was reinstated as joint liquidator on 28 September 2023, the First Applicant
submitted during the hearing that this issue was still alive and should be
considered. The First Applicant submitted in the main that the first decision was
reviewable and falls to be set aside because the decision was taken capriciously
without the First Applicant being afforded an opportunity to address the concerns
of the First Respondent.
5
[15] The First Applicant submits that the second decision to appoint the Six
Respondent as a joint liquidator in terms of section 381 of the Act is ultra vires.
The First Applicant further submits that the decision to appoint the Sixth
Respondent as joint liquidator is based on an error of law and that the Third
Respondent was not empowered by the provision of the Act to do so. Further, so
submits the First Applicant, even if a joint liquidator could lawfully be appointed
in terms of section 381 of the Act, the Third Respondent had further misconstrued
his powers by relying upon the provision of section 377 to fill the vacancy of Mr
Cloete Murray who was never a joint liquidator.
[16] The First Applicant further contends that the Sixth Respondent was not and is
not listed on the panel of vetted liquidators maintained by the First Respondent ,
has not provided security to the satisfaction of the First Respondent and has no
tertiary qualification as required by the Master in terms of its vetting process.
[17] The First Applicant submits that the third decision was capriciously made
because the certificate reinstating the First Applicant as joint liquidator records
that the Sixth Respondent is appointed in terms of section 377 of the Act to fill
the vacancy arising from the death of Mr Murray who was never a joint liquidator
of MACHADO.
Sixth Respondent's submission
[18] The Sixth Respondent submits that the application by the Second Applicant was
not authorised because it was not made by all the liquidators acting jointly as
required by section 382 of the Act. The Sixth Respondent contends also that the
First Applicant does not have locus standi because he is neither a creditor of
MACHADO nor does he have any direct or material interest in the administration
of the company in liquidation .
[19) The Six Respondent submits further that the First Respondent did not take three
decisions but only one decision of appointing the Sixth Respondent as a joint
liquidator and investigator in terms of section 381 (3) of the Act. The Six
Respondent submits further that after making the decision to appoint him as joint
liquidator, the First Respondent then issued the Master's certificate of
appointment provided for in section 375 of the Act.
6
[20] The Six Respondent further contends that no ground of review has been
established that would interfere with the Master's discretion to appoint liquidators
as contemplated in section 381 (3) of the Act.
Issues to be determined
[21] The following issues fall to be determined :
(a) Whether the "removal" of the First Applicant as joint liquidator is moot;
(b) Whether the First and Second Applicants have the necessary locus standi to
institute these provisions ; and if so,
(c) Whether the appointment of the Sixth Respondent as joint liquidator is
reviewable in terms of PAJA.
Mootness of the application
[22) On the 15 September 2023 the First Applicant's name as co-liquidator of
MACHADO was no longer reflected as a joint liquidator. As I have already said
above, the Sixth Respondent states that it was a typographical error, but the First
Applicant contends that his removal as joint liquidator was capriciously taken.
[23) On 27 September 2023 the First Applicant launched an urgent review application
challenging his removal as co-liquidator of MACHADO . On 28 September 2023
the First Applicant was reinstated as a joint-liquidator and is currently performing
his duties as a joint liquidator of MACHADO.
[24] In National Coalition for Gay and Lesbian Equality and Others v Minister of Home
Affairs3 the Constitutional court held that "a case is moot and therefore not
justifiable if it no longer presents an existing or live controversy which should
exists if the Court is to avoid giving advisory opinions on abstract propositions of
/aw'4.
3 2000 (1) BCLR 39 CC
4 ld para 21
7
[25] In Centre for Child Law v Hoerskool Fochville and Another6 the Constitutional
Court held as follows "This court has a discretion in that regard and there are a
number of cases where, notwithstanding the mootness of the issue as between
the parties to the litigation, it has dealt with the merits of the appeaf6.
[26] Acting on behalf of the Applicant , Mr van der Merwe submitted that
notwithstanding the reinstatement of the Applicant as joint liquidator, the decision
to remove him should still be reviewed and set aside. Mr Shana contends that
there was no decision taken by the First Respondent and that the omission of
the Applicant as a co-liquidator was a typographical error which was rectified on
the 28 September 2023. Mr van Merwe submits further, relying on the decision
of Gerl Lourens Steyn De Wet and Another v Samaiya Abdool Gafaar
Khammissa and Others7 that the decision should be reviewed to ensure certainty
regarding the status of the Applicant as a joint liquidator.
[27] In Gerl Lourens Steyn De Wet and Another v Samaiya Abdool Gafaar
Khammissa and Others the issue on appeal concerned two mutually exclusive
decisions made by the Master. On 31 August 2017 the Master made two
decisions to appoint the Appellants as additional joint trustees of Duro Pressing
(Pty) Ltd (In Liquidation) (Duro). On 20 December 2017 the Respondents
launched an application in the court a quo seeking to review and set aside the
second decision, and declaring the first decision to be valid one, together with
ancillary relief.
[28] The facts in the Gerl Lourens De Wet and Another case are undoubtedly different
from the facts in this application . The reinstatement of the First Applicant by the
First Respondent is not challenged by any other person. The First Applicant has
been acting unchallenge d as a joint liquidator of MACHADO since 28 September
2023.
[29) It makes no difference whether the Third Respondent had taken a decision to
remove the First Applicant as joint liquidator on 15 September 2023 or whether
the First Applicant's name was erroneously omitted when the Six Respondent
5 2016 (2) SA 121 (SCA)
6 Id para 11
7 (358/2020) [2021] ZASCA 70 (4 June 2021)
8
was appointed as an additional joint liquidator. The removal or omission of the
First Applicant's name no longer presents an existing or live controversy worthy
of determination . Whatever the court determines would not change or alter the
status of the First Applicant as a joint liquidator of MACHADO.
[30] The determination of the removal or omission of the First Applicant's name as a
joint liquidator of MACHADO will thus have no practical effect or result because
the First Applicant is a joint liquidator of MACHADO and has been acting as such
since 28 September 2023. The removal or omission lasted less than two weeks
before the First Applicant was reinstated as a joint liquidator. The liquidation and
distribution account has already been lodged with the First Respondent and the
liquidation process is almost complete.
[31] It is ironic that the First Applicant seeks to review and set aside the "decision"
that was taken by the First Respondent without seeking any reinstatement as a
joint liquidator. The First Applicant can obviously not do so because he is
currently a duly appointed joint liquidator of MACHADO and has no desire or
interest in desisting to act further as a joint liquidator. It appears to me that the
First Applicant requires the reviewal and setting aside of his removal or omission
to pursue other unknown interests which are irrelevant to this application. To
undertake such an exercise in these proceedings would be futile.
[32] In the premises I am of the view that the challenge to the "first decision" in terms
whereof the First Applicant was alleged to have been removed or omitted as joint
liquidator, is moot.
First Applicant's locus standi
[33] The First Applicant has made it clear that he is not bringing this application as an
aggrieved person as contemplated in the Act but that he is bringing it in his
personal capacity to challenge the appointment of the Sixth Respondent by the
Master on the various grounds that he has listed.
[34] The First Applicant challenges the appointment of the Six Respondent on the
basis of his position as the joint liquidator of MACHADO and submits that the Six
Respondent does not have tertiary qualification , is not on the list of approved lists
9
of the insolvency practitioners . The First Applicant further contends that the Sixth
Respondent has not provided satisfactory security to the First Respondent.
Sixth Respondent submissions
[35] The Sixth Respondent challenges the locus standi of the First Applicant to
institute these proceedings both in his personal capacity as well as in his
representative capacity as joint liquidator of MACHADO .
[36] The Sixth Respondent contends that the First Applicant does not have locus
standi because he is neither a creditor of MACHADO nor does he have any direct
or material interest in the administration of the company in liquidation .
[37] The Six Respondent submits further that the Second Applicant is not authorised
to institute the proceedings because no authorisation to institute the proceedings
was adopted by all the liquidators acting as joint liquidators as required by section
382 of the Act.
Locus Standi of the First Applicant
[38] It is important to note that any person aggrieved by the appointment of a
liquidator must request written reasons from the Master who would then submit
his reasons for the appointment of the Liquidator to the Minister after which the
Minister may confirm, uphold or set aside the Master's appointment or refusal8.
In Wishart v BHP BILLITON9 the Supreme Court of Appeal held that "before
resorting to review proceedings under section 151 of the Insolvency Act, a
liquidator is obliged to follow the procedures set out in s 45 of the Act. The section
is peremptory' '10.
[39] In terms of section 367 of the Companies Act a liquidator is appointed by the
Master for the purpose of conducting the proceedings in a winding up. In terms
of section 391 of the Companies Act the Liquidator 's duty is to reduce into
possession the assets of the company and to apply them, in so far as they
extend, in satisfaction of the costs of the winding up and the claims of the
8 Section 371
9 2017 (4) SA 152 (SCA)
10 Id para (24]
10
company's creditors, and to distribute any surplus among those entitled to share
in it.
(40] In Minister of Justice v SAR/PA 11 the Supreme Court of Appeal held that
"although the master plays an import.ant role in overseeing the process of the
winding up an estate, the process is nonetheless creditor driven. it is the majority
of creditors in number or value of claims that have the right to elect trustees or
nominate liquidators. They have the right to take decisions in respect of the
manner in which the assets falling into the estate, or constituting property are
dealt with"12.
[41] In Gainsford NNO v Tanzer Transport13 the Supreme Court of Appeal held that
liquidators involved in legal proceedings may sue in their own names or nomine
officio or in the name of the company concerned if authorised by a resolution of
the creditors14.
[42] In Janse van Rensburg v The Master and Others15 the Court was seized with a
dispute where a joint liquidator of a close corporation acted in his personal
capacity as an aggrieved person resulting from the appointment of another
person as a joint liquidator. The court held that "an aggrieved person was one
who had nominated a person, and that nomination had not been given effect to
by the Master. Such a person would invariably be a member or a creditor who
proposed a nomination at the first meeting of creditors. the Applicant was
certainly not such a person 16".
[43] In Geduldt v The Master and Others17 the court held that an aggrieved person
does include a person who is aggrieved about the appointment of a specific
person 18.
11 2017 (3) SA 95
12 Id para (55)
13 2014 (3) SA 468 (SCA)
14 Id para (16) & (17)
1s 2004 (5) SA 173 TPD
16 Id para (23)
17 2005 (4) SA 460 CPD
18 Id para 464H-465F
11
[44] I agree with Mr Bhana for the Sixth Respondent that the First Applicant, who is
not a creditor of the Second Applicant , cannot bring this application to challenge
the appointment of the Sixth Respondent. It does not make a difference how the
First Applicant clothes its motivation or reasons for the institution of these
proceedings , the inescapable inference is that the First Applicant is aggrieved by
the action of the First Respondent in appointing the Sixth Respondent as a joint
liquidator of MACHADO . As it was held in Gedult19, if the First Applicant does not
have a legal grievance , the question arises on what basis has the review been
brought.
[45] Although this was not stated in the papers, it became apparent during the hearing
that the thrust of the First Applicant's contention was that the appointment of the
Sixth Respondent as a co-liquidator would impact directly on the fees the three
liquidators would earn despite the fact that most of the work had already been
done. Mr van der Merwe was at pains to painstaking ly avoid making this point
apparent during in his submissions .
[46] As it has been indicated above, the winding up process is creditor driven and the
First Applicant has no locus standi to institute these proceedings on behalf of the
Second Applicant.
Locus Standi of the Second Applicant
[4 7] The Second Applicant as a corporate entity cannot act on its own but must be
represented by a natural person. There are two more joint liquidators excluding
the First Applicant and the Sixth Respondent. They have not expressed any view
in regard to the issues raised by the First Applicant. The creditors of the Second
Applicant have also not given any authority to the First Applicant to act on behalf
of the Second Applicant.
[48] In dismissing an application where the provisional liquidators brought an
application without authorisation , the court in Ex parte van der Berg & Others
NNO: In Re Riviera lntemationa/2 ° remarked as follows, "Thus where the Master
has restricted the powers of the provisional liquidators to those which can only
19 Supra at page 465 para E
20 2003 (6) SA 727 WLD
12
be exercised subject to the directions of the creditors, it would be require an
express extension by the Master of their powers to approach this court for relief
in the absence of creditors' meeting authorising the applicants to do so"21.
[49] Litigation is regrettably an expensive exercise which must be resorted to after
careful consideration of the issues at play. In a company in liquidation , it is risky
for a sole liquidator to embark in litigation on behalf of the company without any
participation by the other joint-liquidators or authorisation by the creditors. A
company which is already in financial distress should not be placed further at the
risk of incurring unnecessary legal costs.
[50] In Minister of Justice v Saripa22 the court held "that the creditors are the best
judges of their own interests, and they are the people best suited to instruct the
trustee or liquidator how to go about the process of liquidation or winding up.
They are the people who can judge whether it is desirable to borrow money in
order to complete a project in the hope of a substantial payment, or to commence
litigation with a view to recovering amounts owing to the estate, to give but two
examples . It is after all their money that is being spent on this and their money
that is at risk".
[51] There is no evidence that the views of the creditors have been solicited prior to
the institution of these proceedings. Neither were the joint liquidators consulted .
A pilot cannot commandeer a plane without her or his co-pilot or commandeer a
commercial flight to destinations of his own choice without the knowledge or
authority of the chief executive officer of the airline.
[52] For the above reasons, it is my view that the First Applicant has neither the
authority to act in his personal capacity nor in his capacity as a joint liquidator of
MACHADO to challenge the appointment of the Sixth Respondent as a joint
liquidator in these proceedings .
[53] Having found as aforesaid , it is unnecessary to deal with the remaining issues,
the former is dispositive of the matter.
21 Id page 734 para A
22 Supra at paragraph [55)
13
Order
In the result the following order is made:
[1) The application is dismissed with costs, such costs to include the costs of two
counsel wherever so employed .
[2] Costs to be paid by the First Applicant only.
RA THAGA RAMAWELE
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION OF THE HIGH COURT, PRETORIA
Date of hearing: 29 November 2024
Date of judgement: 14 March 2025
Appearances :
For the Applicant: MP van der Merwe SC with PJ Greyling instructed by John Walker
Attorneys
For the Respondent: R Bhana SC with I Currie instructed by Knowles Husain
Lindsay Inc
14