IN THE HIGH COURT OF SOUTH AFRICA
FREE STATE DIVISION, BLOEMFONTEIN
In the matter between:
DEON MARIUS BOTHA N.O.
alternatively, DEON MARIUS BOTHA
JOHANNES ZACHARIAS HUMAN MULLER N.O.
alternatively, JOHANNES ZACHARIAS HUMAN MULLER
LOUISA SIBIYA N.O.
alternatively, LOUISA SIBIYA
and
THE MASTER OF THE HIGH COURT, BLOEMFONTEIN
LOUIS JONKER
LAND AND AGRICULTURAL DEVELOPMENT BANK
OF SOUTH AFRICA
Coram: Van Rhyn J
Heard: 6 March 2025
Delivered: 4 April 2025 Not reportable
Case No.: 480/2025
First Applicant
Second Applicant
Third Applicant
First Respondent
Second Respondent
Th_ird Respondent
Summary: Urgent application -for interim interdict pending review -decision
of Master to remove appointed liquidators. Costs to stand over for
later adjudication- applicable principles restated.
2
ORDER
1 The decision of the First Respondent:
(a) to remove the Applicants as liquidators in the estate of Jonker
Produkte CC (in liquidation);
(b) directing the Applicants to return their certificates of appointment as
liquidators to the First Respondent; and
(c) that the Applicants will forfeit the liquidators' fee;
as set out in the letter of the First Respondent dated 15 January
2025, is suspended pending the final determination of the review
application under Part B of the notice of motion.
2. The costs of the application under Part A of the notice of motion,
including the wasted costs incurred in respect of the hearing on 13
February 2025, are reserved for adjudication during the review
application under Part B of the notice of motion.
JUDGMENT
[1] Part A of the application came before court as an urgent application for interim
relief pending the final adjudication of Part B of the application. Part Bis an application
for the review and setting aside of the Master's decision to remove the liquidators from
office. The urgent application was to be heard on 13 February 2025. On the said date,
and by agreement between the parties, the following order was made:
'1. The decision by the Master of the High Court, Bloemfontein (First
Respondent) dated 15 January 2025 is suspended pending final adjudication
of Part A of the Notice of Motion.
2. For purposes of the above, the hearing of the urgent application in respect
of Part A above is postponed to Thursday, 6 March 2025 on the opposed
roll.
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3. The Master of the High Court, Bloemfontein (First Respondent) to file his
answering affidavit, if any, by 26 February 2025.
4. The costs of the application. including the wasted costs incurred in respect
of the hearing on 13 February 2025 are reserved for later adjudication
together with Part A aforesaid.
5. The applicants' Replying Affidavit to the Master's Answering Affidavit, if any,
to be filed by close of business on 28 February 2025.
6. Heads of argument to be filed by all parties on Monday, 3 March 2025.'
[2] The first, second and third applicants are Deon Marius Botha N. 0., Johannes
Zacharias Human Muller N.O. and Louisa Sibiya N.O. (the 'liquidators'), all three being
insolvency practitioners duly appointed on 21 October 2020 as co-liquidators in the
estate of Jonker Produkte CC (in liquidation) ('Jonker Produkte'). In the alternative, the
liquidators were cited in their personal capacities to the extent that it might be found
that they have a personal interest in some of the relief sought. The first respondent is
the Master of the High Court, Bloemfontein (the 'Master'). The second respondent is
Louis Jonker, the sole member of Jonker Produkte CC at the time of its liquidation.
The third respondent is Land and Agricultural Development Bank of South Africa
('Land Bank').
[3] On 23 July 2020 Land Bank filed an application for the provisional winding up
of Jonker Produkte. A provisional liquidation order was granted on 11 September
2020 by order of this court and the applicants were duly appointed as co-liquidators in
the estate on 21 October 2020. A final liquidation order was granted on 29 October
2020. The liquidators received their letters of appointment from the Master on 6
November 2020. Due to the failure to summon a meeting of creditors of Jonker
Produkte in accordance with the provisions of s 78 of the Close Corporation Act 69 of
1984 (the 'CC Act'), litigation followed which culminated in a judgment by the Supreme
Court of Appeal, delivered on 27 May 2024, upholding an order by the High Court
that the meeting of 6 May 2021 was invalid and the setting aside of the resolutions
adopted at the meeting.
[4] Further applications followed, firstly an application in terms of the provisions of
Rule 42 of the Uniform Rules of Court pertaining to the cost order initially made by this
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court and secondly, an application by the second respondent and his wife to set aside
the final order of liquidation (referred to as the 'rescission application'). The rescission
application was dismissed with costs on the 16th of August 2024. The second
respondent and his wife applied for leave to appeal the dismissal of the rescission
application. The application for leave to appeal was unsuccessful and was dismissed
with costs on 15 November 2024. The second respondent and his wife thereafter
applied for leave to appeal to the Supreme Court of Appeal, which application is still
pending. Since the hearing of Part A of the notice of motion on 13 February 2025, a
further urgent application by the second respondent and his wife was heard on 27
February 2025 by Grobler AJ. The application was for an order that the liquidators be
interdicted from continuing with the liquidation process of Jonker Produkte pending
finalisation of the review application. A further order, seeking the setting aside of
subpoenas to secure the presence of the second respondent and his wife at an
insolvency enquiry scheduled for 28 February 2025 was sought. The urgent
application was dismissed with costs on 27 February 2025.
[5] On 13 August 2024, which happened to be two days before the judgment in the
rescission application was delivered, the attorney acting on behalf of the second
respondent, Mr Geyser of Geyser Attorneys, Viljoenskroon, addressed a letter to the
Master requesting the Master to remove the applicants as liquidators in the estate of
Jonker Produkte. The grounds for such removal are, inter alia, the following:
(a) the failure of the liquidators to adhere to the provisions of s 78(1) of the CC Act
and alleged unlawful and illegal conduct in the administration of the estate of Jonker
Produkte;
(b) the unlawful conduct of the liquidators by issuing summons against the second
respondent and his wife to hold them personally liable for the debts of Jonker Produkte
without having been -authorised by the Master or the creditors to institute such
proceedings;
(c) notwithstanding the rebuke from the Supreme Court of Appeal that the
liquidators had acted outside the perimeters of the CC Act and the fact that the
liquidators were ordered to pay the costs of the application, the liquidators continue
with unlawful actions;
(d) the liquidators continue to act without the necessary resolution by the creditors
and without obtaining the Mater's consent.
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(e) the liquidators have failed to comply with their statutory duty to investigate the
claim of Land Bank having regard to the decision in Trakman N.O. and Others v The
Master of the High Court and Others Case Number 2020/12432 (20121 ZAGPJHC 168.
(61 On 19 August 2024 the Master provided the liquidators with a copy of the letter
by Mr Geyser containing the complaints and requested the liquidators to provide him
with reasons, by close of business on 26 August 2024, why they should not be
removed in terms of s 379(1) of the Companies Act 61 of 1973 (the '1973 Companies
Act') as liquidators. On 21 August 2024 the applicants' attorney at the time, Mr Van
Niekerk, addressed a letter to the Master with the liquidators' response to the
allegations made in Mr. Geyser's aforesaid letter. The liquidators ' response to the
complaints levelled against them can be summarised as follows:
(a) The complaints raised by the second respondent are baseless and raised with
an ulterior motive to prevent the second respondent, his wife and officials of
Jonker Produkte from appearing at the scheduled insolvency enquiries;
(b) From the commencement of the liquidation proceedings the second
respondent, who has little or no say in the proceedings, acted with a view of
obstructing the continuation and finalisation of the insolvency proceedings;
(c) The second respondent acted without the consent of the liquidators by selling
assets and provided contradictory information regarding a lease agreement;
(d) All actions taken by the liquidators were indeed sanctioned by the only major
creditor in the insolvent estate of Jonker Produkte, Land Bank, and the
liquidators are compelled to act expediently to prevent claims from prescribing
against, inter alia, the second respondent and his wife;
(e) The case law relied upon by Mr Geyser in his letter to the Master is not relevant
in that the liquidators can only consider the claim by Land Bank after a meeting
of creditors. The letter by Mr Geyser is merely another ploy aimed at facilitating
the removal of the liquidators.
(71 On 15 January 2025 the Master notified the liquidators in writing of his decision
to remove them as liquidators with effect from 17 February 2025. This letter incited
the urgent application by the liquidators. The liquidators rely upon the marked similarity
between the wording of the Masters' letter and the content of Mr Geyser's letter for
their argument that the Master has failed to properly and objectively consider the
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complaints lodged against them and had merely followed the dictates of Mr Geyser
who acts on the instructions of the second respondent. The Master's stance therefore
gives rise to an inference of bias against the liquidators. A further argument is that the
wording of the Master's letter is indicative thereof that the Master had already formed
a view adverse to the liquidators before obtaining their response to the complaints
lodged against them.
[8] Mr Maritz SC, counsel for the liquidators, contends that the Master has failed
to call for a response from Land Bank who had successfully applied for the winding up
of Jonker Produkte and had voted for the appointment of the applicants as liquidators.
It is argued that the removal of the liquidators is an extreme step and will result in a
substantial further delay in the finalisation of the insolvency proceedings. The removal
of the appointed liquidators at such a late stage in the liquidation process will not be
to the advantage and benefit of all persons concerned and will be to the prejudice of
Land Bank.
[9] In respect of costs it is contended that, notwithstanding proper service of the
application upon the Master on 31 January 2025, the hearing of Part A of the
application was postponed as a result of the Master's representative, Mr Strauss,
indicating that he was not aware of the application whereas it is evident that Mr Straus
became aware of the application after being informed (per email) by Mr Geyser. On 6
February 2025 the Master enquired from the liquidators' correspondent attorney in
Bloemfontein on whom, at the Master's Office, the application had been served which
is indicative of the fact that the Master was indeed aware of the existence of the
application and failed to act accordingly.
[1 O] On the 13th of February 2025 the court was informed (in chambers) that the
Master's representative only attended the proceedings at court on 13 February 2025
after being telephonically informed of the hearing of Part A. The Master then indicated
that he had not received a copy of the application. On behalf of the applicants, it is
therefore contended that the postponement of the application on the 13th of February
2025 was improperly obtained because it is clear that the Master was aware of the
application since, at least the 7th of February 2025. A letter by the liquidators' attorney
was addressed to the Master (Mr Strauss) dated 14 February 2025 to inform him that
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a punitive cost order will be sought against the Master for the wasted costs occasioned
by the failure of the Master to file an answering affidavit which resulted in the
postponement of Part A of the application on 13 February 2025. A punitive cost order
is furthermore sought against the second respondent, who opposes the application
and who, according to the liquidators, does not have locus standi to oppose the relief
sought by the liquidators and whose only motive is to avoid being interrogated about
the unlawful dissipation of Jonker Produkte's assets.
[11] After having been provided with a copy of the letter of complaint, Land Bank
through its attorney, responded to the complaints against the liquidators in a letter to
the Master dated 27 August 2024. Land Bank disputed the averments made against
the liquidators and, notwithstanding being cited as a respondent to the present
application supports the relief claimed in the notice of motion. On behalf of Land Bank
it is contended that the Master's decision to remove the liquidators primarily on the
basis that they were the losing parties in not only the High Court application by the
second respondent but also the appeal to the Supreme Court of Appeal is of particular
importance within the context of the adjudication of the present application. With
reference to case law, Mr Tstangarakis, counsel for Land Bank, argued that the
removal of the liquidators will not be granted unless the court is satisfied that a proper
case is made out for such relief. Having regard to all the facts and circumstances of
the matter at hand and the fact that the realisation of assets and administrative actions
in the administration of the estate has been completed, the decision by the Master to
remove the liquidators appears not to have appreciated the wishes of the creditor,
which reign supreme. The costs order sought by the liquidators are supported by
Landbank.
[12] The relief sought in Part A is opposed by the second respondent. The second
respondent contends that the liquidators were primarily cited in their official capacities
as liquidators of Jonker Produkte and in the alternative in their personal capacities.
The citation of the liquidators in their representative capacities is incorrect since the
litigation does not involve the insolvent estate of Jonker Produkte at all. It concerns
the personal interests of the liquidators, being their removal from office and
subsequent forfeiture of their fees. Having regard to the finding in Standard Bank of
South Africa v The Master of the High Court and others 2010 (4) SA 405 (SCA) that
8
the review application in respect of the forfeiture of their fees and the order that the
liquidators pay the costs in their personal capacities, I am satisfied that the citation of
the liquidators not only in their official capacities but also in the alternative in their
personal capacities dispense of the point in limine raised on behalf of the second
respondent.
[13] The opposition of Part A is on the basis that the Master's decision to remove
the liquidators cannot be faulted. The finding that the liquidators are no longer fit to
continue with the liquidation process of Jonker Products is supported due to their
persistent view that they were not liable for the costs of the initial application
notwithstanding the order granted that Jonker Products should not be mulcted with the
costs, which finding was confirmed by the Supreme Court of Appeal. Furthermore, the
liquidators' failure to disclose how the funds of Jonker Produkte have been affected is
a cause of grave concern and a reason for the removal of the liquidators. Newly
appointed liquidators will then be able to investigate whether the estate of Jonker
Produkte has been refunded or not and to take the necessary steps to recover those
funds if need be.
[14] Mr Janse van Rensburg, on behalf of the second respondent, contends that the
argument by the liquidators that the stage at which the liquidation proceedings have
reached, taking into consideration the date of their appointment on 21 October 2020,
is a factor in favour of the non-removal of the liquidators, is flawed. With reference to
the Standard Bank v The Master matter, the second respondent argued that the long
delay in the finalisation of the liquidation process hardly counts in their favour and is
in fact to their discredit.
[15] Firstly all parties concerned were ad idem that the issue of urgency had been
adequately dealt with in that an interim order was issued on 6 February 2025, by
agreement between the parties, and thus no arguments regarding urgency were
entertained at the hearing of the matter. Regarding the merits, the liquidators seek an
interlocutory interdict as it appears from the notice of motion. An interlocutory interdict
is one which is granted pendente lite. "It is a provisional order designed to protect the rights of
the complainant party pending an action or application to be brought by him to establish the respective
9
rights of the parties."1 It does not involve a final determination of the rights of the parties
and does not affect such determination. The purpose of the interim order is to 'freeze'
the position until the court decides upon the merits of the review application. The
requirements for an interim interdict are trite and can be briefly summarised as follows:
a prima facie right even though open to some doubt; a well-grounded apprehension of
irreparable harm if the interim relief is not granted and the applicant ultimately
succeeds in establishing the right; that the balance of convenience favours the
granting of an interim interdict; and the lack of another satisfactory or adequate remedy
in the circumstances. In the context of an application for an interim interdict pending
the outcome of review proceedings, an applicant has, in order to establish a right
(albeit perhaps open to some doubt) to show that he or she has some prospect of
success in the review proceedings.
[16] The different requisites should not be considered separately or in isolation but
in conjunction with one another in order to determine whether the court should
exercise its discretion in favour of the grant of the interim relief sought. The proper
manner of approach is to take the facts as set out by the applicants, together with any
facts set out by the respondents which th_e applicants cannot dispute, and to consider
whether, having regard to the inherent probabilities, the applicants could on those facts
obtain final relief at the hearing of the review application. The facts set up in
contradiction by the respondents should then be considered. If serious doubt is thrown
upon the case of the applicants, they cannot succeed in obtaining the temporary relief
as sought in Part A. But if there is mere contradiction, or unconvincing explanation,
the matter should be left to the review court and the right be protected in the
meanwhile, subject of course to the respective prejudice in the grant or refusal of
interim relief. 2
[17] The removal of a liquidator is a radical form of relief which will not be granted
unless the court is satisfied that a proper case is made out for such an order.3 The
duties of liquidators are well established and usefully summarized in paragraph [1] of
1 Airoadexpress Ply Ltd v Chairman Local Road Transportation Board, Durban 1986 (2) SA 663(A) at ~1~F. •
2 Webster v Mitche/J 1948 (1) SA 1186 (W); Goo/ v Minister of Justice 1955 (2) SA 862 (C).
3 Ma-Afrika Groepbelange (Pty) Ltd v Millman and Powell NNO 1997 (1) SA 547 (C) 566B-E.
Standard Bank of SA Ltd v The Master of the High Court and Others 2010 (4) SA 404
(SCA):
'In the winding-up of companies liquidators occupy a position of trust, not only towards creditors but
also the companies in liquidation whose assets vests in them. Liquidators are required to act in the best
interests of creditors. A liquidator should be wholly independent, should regard equally the interests of
all creditors, and should carry out his or her duties without fear, favour or prejudice.'
{18] The Master acts as a regulator in the South African insolvency law. The
administration of insolvent estates and companies or close corporations under
winding-up, from commencing the sequestration or liquidation proceedings up to the
rehabilitation of the insolvent or the deregistration of the corporate entity, is controlled
by the Master's Office. The duties of the Master include numerous specialised
functions and administrative tasks. Having read the reasons for the Master's decision
to remove the liquidators from office as set out in the letter dated 15 January 2025, it
is evident that there is indeed a great deal of similarity with the words and phrases
used by Mr Geyser in the letter of complaint. It therefore appears as if the Master
accepted the second respondent's ipse dixit without having regard to the submissions
and arguments raised on behalf of the liquidators. There is thus merit in the liquidators'
contention that they have a reasonable suspicion of bias on the part of the Master in
favour of the second respondent.
{19] Even though it is contended that this gives rise to the inescapable inference
that the Master had failed to properly consider the matter himself and simply followed
the dictates of Mr Geyser, the mere fact that the Master's reasons are similar to the
complaints lodged against them does not imply that a finding of bias or partiality on
the part of the Master will necessarily follow. This will be a matter for consideration by
the review court. On the other hand, the Master indicated in a supplementary report
that the liquidators did not finalise the first liquidation and distribution account and did
not submit the second account which was due by 18 March 2022. To my mind these
are extremely serious allegations regarding the suitability of the liquidators to proceed
with the winding up of the estate. The need for effective, efficient and the swift
finalisation of an insolvent estate cannot be overlooked. Obviously, the liquidation
process has not been finalised since 2020 and the parties are continuously involved
in litigation.
11
[20] I agree with the submission by the liquidators, as supported by Mr Tsangarakis,
that Land Bank has a material interest in the effective and speedy finalisation of the
liquidation process and it appears as if the Master failed to call upon Land Bank for its
submissions regarding the decision to remove the liquidators from office. This aspect
is not addressed by the Master in an answering affidavit. A factor which militates
against the removal of the liquidators is that it appears that the winding up process is
nearing its end. However, the second respondent argues that the liquidators still intend
to institute actions to retrieve assets allegedly dissipated by the second respondent
(and others). The second respondent contends that any such actions on behalf of the
estate have become prescribed. If this is indeed correct, the averment that such claims
have become prescribed furthermore bears upon the suitability of the applicants to
hold office as liquidators. The second requirement for an interim interdict is that of
harm. The liquidators are registered members of the national and professional
regulatory body for insolvency practitioners. The liquidators' removal from office,
pending the hearing of the review application, will be reported to the said institution
and will undoubtedly have a prejudicial repercussion for them in respect of future
appointments.
[21] Having regard to the Master's letter of 15 January 2025, I was unable to find
any indication that the Master took into consideration the contentions of Land Bank.
On behalf of Land Bank it is argued that where creditors' resolutions are binding on
the liquidators, they are obliged to implement such resolutions. A resolution adopted,
or which is subsequently deemed to have been adopted at a second or the adjourned
second meeting, binds not only the creditors at the meeting but also a creditor who
failed to attend the meeting. The resolutions were passed at the first and second
meeting of the creditors held on 4 October 2024 and there exists no suggestion that
the said meeting was held improperly.
[22] This aspect was not addressed by the Master in that no answering affidavit was
filed. Furthermore, the Master indicated that Part A of the application is not opposed.
I am accordingly of the view that the liquidators have established the right contended
for. The applicants will suffer irreparable harm if the interim relief is not granted, and
the ultimate relief is eventually granted. In my view, if the interlocutory interdict in this
12
matter is granted pending the finalisation of the review relief, no prejudice will be
suffered by the Master and the second respondent. It is uncontested that there will be
a substantial shortfall in the estate and that there is no chance of the second
respondent receiving any benefit from the liquidation process. The balance of
convenience therefore is in favour of the liquidators. Having regard to the content of
the Master's reports, it is assumed that the review application will be opposed by the
Master. Having regard to the fact that the Master failed to file an answering affidavit
and taking cognizance of the contradictory explanations and arguments by Mr Martiz
SC and Mr Tsangarakis on the one hand and Mr Janse van Rensburg on the other
hand, I am of the view that the matter should be left to the review court and the right
be protected in the meanwhile.
[23] In all the above circumstances I am satisfied that a proper case has been made
out for the interim relief sought by the applicants.
[24] The issue of costs emanates from the fact that the Master failed to file a notice
to oppose within the time period set out in the notice of motion and requested for the
matter to be postponed on 13 February 2025 to enable him an opportunity to consider
the application. Mr Maritz SC contends that the postponement of the matter on 13
February 2025 was the contrived stratagem of Mr Geyser, on behalf of the second
respondent and the Master. The postponement resulted in substantial wasted costs
which should never have occurred and which in itself justifies a punitive attorney and
client cost order against the second respondent and the Master.
[25] The Master did not address the issue of costs per se, apart from indicating in his
supplementary report that he was on leave from 13 January 2025 to 7 February 2025
and therefore only returned to office on Monday 10 February 2025. The Acting Master
did not provide him with any directions and when his answering affidavit was due on
6 February, he was on leave. There is no reason for this court to doubt the version
proffered by Mr Strauss that he was on leave at the time when his notice to oppose
and answering affidavit (if any) were due. The liquidators indicated that some of them
were on leave during January 2025, which caused a delay in the issuing of the urgent
application. The grounds raised by the liquidators as to whether a cost order should
be awarded against the Master and the second respondent, seeks to impute
13
wrongdoing upon them. The second respondent was ready to proceed with the matter
and did not ask for a postponement.
(26] On 13 February 2025 I informed the legal representatives on behalf of the
liquidators, the second respondent and Land Bank, that the Registrar has received an
email from the Master, per Mr J Strauss, requesting an indulgence for the
postponement of the application. Mr Strauss indicated that he did not have the
opportunity to peruse the application due to being on leave. He tendered his apologies
for the inconvenience caused. Having regard to the vital role of the Master in liquidation
proceedings, I found favour with the request and informed the parties that the matter
will not proceed. The parties soon thereafter provided this court with a draft order for
the postponement of Part A and further interim orders, as set out above. The Master
filed a report and shortly prior to the hearing on 6 March 2025, a supplementary report.
I am therefore not inclined to adjudicate the issue of a punitive cost order against the
Master without any arguments provided in this regard in the Master's report and Mr
Strauss not being in court when the matter was heard. I am of the view that the issue
of the wasted costs of the 13 February 2025 and the costs of Part A of the application
should stand over until the adjudication of Part B during the review procedure.
ORDER
[27] Consequently, the following order is made:
1.
(a)
(b)
(c) The decision of the First Respondent:
to remove the Applicants as liquidators in the estate of Jonker Produkte
CC (in liquidation);
directing the Applicants to return their certificates of appointment as
liquidators to the First Respondent; and
that the Applicants will forfeit the liquidators' fee;
as set out in the letter of the First Respondent dated 15 January 2025, is
suspended pending the final determination of the review application
under Part B of the notice of motion.
14
2. The costs of the application under Part A of the notice of motion,
including the wasted costs incurred in respect of the hearing on 13
February 2025, an:; re~e1ved for adjudication during the review
application under Part B of the notice of motion.
Appearances
On behalf of the Applicants: •
Instructed by:
On behalf of the first Respondent:
On behalf of the Second Respondent
Instructed by:
On behalf of the Third Respondent
Instructed by: <
I VAN RHYN
JUDGE OF THE HIGH COURT,
FREE STATE DIVISION, BLOEMFONTEIN
Adv. M C Maritz SC with
Adv J S Griessel
Symington De Kok Attorneys
Bloemfontein
No appearance
Adv F G Janse van Rensburg
Hendre Conradie Attorneys
Bloemfontein
Adv S Tsangarakis
E G Cooper Majiedt Attorneys
Bloemfontein