IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, MAKHANDA )
CASE NO. 571/2019
Not reportable
In the matter between:
CROSSMED HEALTH
CENTRE (PTY) LTD FIRST APPLICANT
ZAHEER CASSIM N.O . SECOND APPLICANT
AVIWE NDYAMARA N.O. THIRD APPLICANT
and
CHWAYITA ONGAMA
YONGAMA YAKO RESPONDENT
IN RE:
CASE NO. 4374/2022
In the matter between:
NOSIKHUMBUZO NOZIMANKHULU FIRST APPLICANT
CHWAYITA ONGAMA YONGAMA YAKO SECOND APPLICANT
and
CROSSMED HEALTH CENTRE (PTY) LTD RESPONDENT
And other matters for reconsideration with
case numbers 357/2018; 694/2018; 1243/2020;
554/2022; and 5982/2022.
JUDGMENT
Rugunanan J
[1] This i s the return day of a rule nisi in an application for the sequestration of
the estate of the respondent, Dr C O Y Yako for a debt of R5 942 184.12 . The
application was issued on 22 October 2018 out of the High Court, Mthatha under
case number 571/2019 . It served before this Court by order of the Judge President1.
The rule has been extended on various occasions to coincide with the simultaneous
hearing of the matters for reconsideration identified in the heading of this judgment .
[2] Crossmed Health is a juristic entity that operates the business of a private
hospital in Mthatha. Dr Yako , a medical doctor and practitioner, is a former director
of Crossmed Health Centre (Pty) Ltd (‘Crossmed Health’) and is the sole shareholder
of Crossmed Mthatha Priva te Hospital (Pty) Ltd ( ‘Crossmed Mthatha ’) and Crossmed
Property Holdings (Pty) Ltd ( ‘Crossmed Property ’).
[3] The reconsideration matters were all launched at the instance of Dr Yako ,
except for case number 4374/202 2 in which Ms Nozimank ulu sought leave to
1 Transferred from the Mthatha Division by order of the Judge President on 11 October 2022.
intervene in the sequestration proceedings purportedly under section 11(3) of the
Insolvency Act2.
[4] In summarising the nature of the se proceedings , copies of the notices of
motion issued by Dr Yako together with that of Ms Nozimankulu are attached as
annexures to this judgment (Annexures A to G) , this to avoid repeating the ir
contents .
Case number 357/2018
[5] The matter was launched by Crossmed Health and its business rescue
practitioners Mr Zaheer Cassim and Mr Aviwe Ndyamara , essentially for relief:
5.1 That Dr Yako and Crossmed Mthatha be interdicted from conducting
any form of medical practice from the premises of Crossmed Health in
Mthatha ; from submitting to any medical aid societies accounts for th e
provision of medical s ervices; and from removing any documents,
accounts and statements of any type from the premises;
5.2 Interdicting and restraining Dr Yako from entering the premises at all;
5.3 Removing him as a director of Crossmed Health; ordering him to
render a full and proper accounting in respect of all income generated
by Crossmed Health which may have been invoiced in his name or in
the name of Crossmed Mthatha and submitted to medical aid societies
for payment; and that he a nd Crossmed Mthatha pay the costs of the
application.
[6] The application was launched on the basis that Dr Yako and Crossmed
Mthatha, unlawfully and fraudulently diverted to the account of Crossmed Mthatha ,
funds owing by medical aid societies to Crossmed Hea lth. The payments were owed
to Crossmed Health for hospital services rendered. In the latter part of 2016, the
Industrial Development Corporation of Southern Africa (the IDC), a shareholder and
creditor of Crossmed Health, instituted litigation against Cro ssmed Health. Due to its
2 Act 24 of 1936 as amended.
distressed financial state Crossmed Health was placed under business rescue. Mr
Cassim and Mr Ndyamara were appointed as business rescue practiotioners ( BRPs )
of Crossmed Health in terms of an order of the Mthatha division of this court under
case number 1252/2017 on 12 September 2017.
[7] Dr Yako and Crossmed Mthatha opposed the applica tion under case number
357/2018 but did not, in answering papers, raise any objection to the appointment or
the authority of the BRPs .
[8] On 29 March 2018 , Roberson J, before whom the application was heard,
delivered a judgment in which substantial findings were made against Dr Yako and
the relief sought by Crossmed Health against him was granted.
[9] In a notice of motion (Annexure A) issued on 21 September 2023, Dr Yako
presently seeks declaratory relief essentially on the basis that the order by Roberson
J is unlawful, null and void. He also seeks an order that the appointment and the
ratification of the BRPs be declared unlawful, null and void. In addition, the notice of
motion evinces further relief for declaring unlawful, null and void the appointment of
the board members of Crossmed Health by the BRPs.3 As with most matters
included in the consolidat ed hearing which matters are summarised below,
declaratory relief is sought on a substantially similar basis. In the said application
(Annexure A) , Dr Yako also purports to represent Crossmed Mthatha which was
finally wound up on 17 November 2022 (under case number 572/2019). The basis
for the reconsideration application in which Dr Yako seeks declaratory relief is that
insufficient notice was given to creditors of a meeting tha t occurred on 19 September
2017 and as a result , the ratification of the appointment of the BRPs is null and void.
Of signi ficance is that the business rescue of Crossmed Health was successfully
finalised in 2019.
Case number 694/2018
3 Annexure A notice of motion case number 357/2018 paragraphs 1.4, 1.5, and 1.6.
[10] This was an application in which Crossmed Health, represented at the time by
the BRPs, sought an order against Dr Yako and his companies ( Crossmed Mthatha
and Crossmed Property) jointly and severally for payment of the amount of
R5 942 184.12. The amount represented medical aid payments diverted from
Crossmed Health. Judgment was granted in the matter on 24 April 2018 (the money
judgment) . On essentially the same basis in terms of which he seeks declaratory
relief as above, Dr Yako seeks to have the order declared unlawful, null and void and
set a side.4
Case number 571/2019
[11] This is an application by Crossmed Health for the sequestration of Dr Yako. It
arises from his non -payment of the money judgment. A provisional sequestration
order was granted by this Court on 17 November 2022. The return date was
extended on various occasions to coincide with the reconsideration matters.
Conveyed in an application purportedly made under section 11(3) of the Insolvency
Act (Annexure C) , Dr Yako’s stance is that the money judgment in case number
694/2018 is unlawful, null and void, and consequently he is n ot indebted to
Crossmed Health.
[12] He takes the same point that the appointment and ratification of the BRPs is
unlawful and that the order from which the judgment debt emanates (including all
other application s in terms of which court orders were granted), is tainted by
unlawfulness. It bears mentioning that there is no (standalone) application to rescind
the order under case number 694/2018.
Case number 572/2019
[13] In an address by Mr Dollie , who, together with M r Raubenheimer , appeared
on behalf of Crossmed Health, I was informed from the bar that there is no
reconsideration application by Dr Yako in this matter.
4 Annexure B notice of motion case number 694/2018 paragraph 1.4.
[14] It involved an application for the winding up of Crossmed Mthatha. The
application was finally adjudi cated and a final winding -up order was granted on 17
November 2022. The liquidators appointed were Mr Mustafa Moham med and Mr
Gonasagree Govender.
Case number 1243/2020
[15] In this matter Dr Yako sought to review and set aside the decision of the
Department of Health, Eastern Cape, to transfer to Crossmed Health the hospital
licence initially held in his name and in terms of which Crossmed Mthatha was
operated. The applicatio n was opposed by Crossmed Health and dismissed by
Smith J (as he then was) on 17 November 2022.
[16] Dr Yako did not appeal the dismissal but now seeks to have the order
reconsidered and declared null and void on essentially the same basis as the other
matters aforementioned (Annexure D) .
Case number 554/2022
[17] Crossmed Health (being obliged to do so apparently on a previous occasion)
sought an interdict against Dr Yako upon discovering that he attempted to change
the banking details utilised by medical aids to m ake payments to Crossmed Health to
that of his personal banking details , or the banking details of Crossmed Mthatha. Dr
Yako opposed the application contending that he is entitled to the income from
medical aids despite Crossmed Health having rendered serv ices. The basis for his
contentions were that he is the rightful owner of the hospital licence. The Board of
Health Care Funders deposed to an affidavit confirming that Crossmed Health, and
not Dr Yako or Crossmed Mthatha, is the rightful owner of the prac tice number to
which payments are allocated and that the payment details of Crossmed Health
ought to be utilised for payments to Crossmed Health for hospital services rendered.
[18] The interdictory relief was granted on an interim basis and subsequently
granted finally on 17 November 2022.
[19] Dr Yako presently seeks to have the order reconsidered or set aside on the
same grounds as with the other matters (Annexure E) .
Case number 5982/2022
[20] In a notice of motion issued out of the High Court, Mtha tha on 9 December
2022 , Dr Yako (together with co -applicants Crossmed Mthatha and Osteen Health
Group (Pty) Ltd) sought an order that Crossmed Mthatha be placed under
supervision for commencing business rescue proceedings, notwithstanding that
Crossmed Mth atha was finally wound up by order of this court on 17 November 2022
(case nu mber 572/2019). Crossmed Mthatha does not trade and it appears that
there is no prospect that it may be rescued. Although included amongst the others
for reconsideration, t his mat ter was not addressed in ar gument . The order at the
conclusion of this judgment speaks for itself.
Case number 4374/2022
[21] This application (Annexure F), also purporting to be made under section 11(3)
was instanced by Ms Nozimankulu and is addressed later in this judgment where the
sequestration is dealt with. The relief claimed is couched in substantially similar
terms to that contained in the notice of motion by Dr Yako (Annexure C) .
The procedural context of the hearing and the is sues raised
[22] Except for the sequestration application in case number 571/2019 (the
sequestration), each of the other matters were identified for reconsideration (the
reconsideration matters) in which Dr Yako and Ms Nozimankulu seek declaratory
relief. It has already been mentioned that the business rescue application pertaining
to Crossmed Mthatha (case number 5982/2022) was not addressed in argument. For
the rest Dr Yako seeks relief on the basis that the orders obtained against him were
tainted by fraud perpetrated by the BRPs and were therefore unlawful, null and void.
He does not say that he is a victim who suffered harm at in the hands of the BRPs.
Parenthetically the wording ‘the reconsideration matters’ is deployed as a term of
convenience without refe rence to rule 6(12) (c) of the Uniform Rules of Court.
[23] What served before this Court on 26 August 2024 were the reconsideration
matters and the return date for the rule nisi in the sequestration proceedings. The
rationale for the reconsideration matters was to avoid discrete hearings before
different judges with the inherent potential for conflicting factual findings on similar
facts. The matters were allocated a full week for argument. This stemmed from
direc tives primarily aimed at streamlining the reconsideration matters. Foremost was
an order made by agreement between the parties on 24 April 2024, in terms of which
they were required to agree to and to sign a joint practice note no later than 10 May
2024, d ealing with the main issues for determination in the reconsideration matters
and their proposed sequence for hearing. The parties did not jointly agree on the
issues for determination and each prepared their own practice notes and heads of
argument. They s et their own agendas.
[24] On 26 August 2024 during a brief meeting in chambers, counsel for Crossmed
Health, Mr Raubenheimer, indicated that the non -joinder of interested parties in the
reconsideration matters is at issue. He dispatched to all concerned the pr evious day
an email attaching the Supreme Court of Appeal judgment in Golden Dividend 339
(Pty) Ltd and Another v Absa Bank Limited5. In passing, I must point out that short
on a few minutes before the meeting with counsel for the parties, a bundle of
authorities preceded by an index indicating the name of Dr Yako’s counsel was
delivered at chambers. The judgment in Golden Dividend was among the case
authorities included therein. Mr Mzileni explained the delay in filing the bundle. The
point however is that t he inclusion of the judgment in the bundle signified anticipation
of the non -joinder being dealt with in argument.
[25] Following the meeting all concerned proceeded directly to court. Absent
agreement on who ought to have commenced with argument and on what issue/s, or
a request for the Court to make a ruling, the reconsideration parties proceeded
directly to ar gue the ir matters . They did so with initial reference to the merits of the
interlo cutory applications without any prior indication that the applications signified
5 [2016] ZASCA 78.
their chosen starting point in the proceedings. The status of these applications is
dealt with later in this judgment where the sequestration application is addressed.
[26] Thereaf ter on 28 August 2024 , Mr Raubenheimer addressed the Court on the
application for sequestration. His argument on the matters for reconsideration was
not directed at the merits but limited to non -joinder.
[27] Despite protestations of litigating by ambush and th e issue not being raised
during case management conferences nor in the obligatory practice note , he pointed
out that the issue was foreshadowed in various affidavits by Crossmed Health filed in
opposition to the relief claimed by Dr Yako , in particular an affidavit by Mr Stephen
Baker, the Chief Executive Officer of Crossmed Health .
[28] To my mind the protestations were misdirected – they were manifestly the
result of the course adopted by opposing counsel who did not at the very outset
make it clear that they chose to deal with the merits of the interlocutory applications
at first instance.
[29] In countering the charge of litigating by ambush Mr Raubenheimer submitted
that the objection of non -joinder may be taken at any stage of argument in the se
proceedings, even on appeal. Contending that the issue is dispositive of the
reconsideration matters, he emphasised that it was necessarily desirable for this
Court the hear argument thereon to curtail any delay in disposing of the
proceedings6 particularly when regard is had to the extensive declaratory relief
claimed by Dr Yako in the various notices of motion7 that would otherwise
necessitate protracted argument on the merits.
[30] The opposing protestations stem fundamentally from the objecting parties’
overlooking the implications of the email (albeit that the issue was anticipated by
inclusion of the relevant judgment in the bundle of authorities). They were in any
6 Compare S v Jordan and Others (Sex Workers Education and Advocacy Task Force and Others as
Amici Curiae [2002] ZACC 22 para 21.
7 Compare also Minister of Home Affairs an d Others v Somali Association of South Africa Eastern
Cape (SASA EC) and Another [2015] ZASCA 35 para 18, and Maharaj and Others v Mandag Centre
of Investigative Journalism NPC and Others [2017] ZASCA 138 para 26.
event afforded opportunity to deal with the point raised and to advanc e their
opposing contentions in that regard, which they did.
[31] For purposes of the decision on non -joinder it is considered unnecessary to
deal with the merits of the matters for reconsideration8. This judgment is confined to
the sequestration proceedings and the non -joinder objection.
[32] In demonstrating that there are interested parties whose joinder in the
reconsideration matters is of necessity, Mr Raubenheimer referenced the relief set
out in the notices of motion issued by Dr Yako. As indicated earlier, t he relief is not
repeated – the notices of motion are attached to this judgment for convenience
(Annexures A to G) .
[33] The a ffected parties who have an interest in the relief claimed in the
reconsideration matters can be gleaned from the additional material a nnexed hereto,
namely: Annexure H (the creditors of Crossmed Health), Annexure I ( the employees
of Crossmed Health), and Annexure J (the shareholders of Crossmed Health
indicated at 4.8.1). These annexures are extracts from the business rescue plan
prepare d by the BRPs on 8 November 2018 and were specifically mentioned by Mr
Raubenheimer as indicative of persons having a direct and substantial interest in the
relief presently claimed by Dr Yako. The nature of the relief affecting such persons is
evident fro m the following matters:
33.1 Case number 357/2018 (notice of motion issued 21 September 2023) –
paragraphs 1.1, 1.2, 1.3, 1.4, 1.5 and 1.6.
33.2 Case number 694/2018 (notice of motion issued 9 June 2023) –
paragraphs 1.1 to 1.5.
33.3 Case number 571/2019 (unsigned notice of motion dated 22 May
2023) – paragraphs 1 to 9 .
33.4 Case number 1243/2020 (notice of motion issued 13 June 2023) –
paragraphs 1 to 6 .
8 An approach adopted in Molaoa v Molaoa a nd Others [2023] ZAFSHC 211 para 3 and see also
Pretoria FM NPC v Chairman of ICASA [2023] ZAGPJHC 1241 para 6 .
33.5 Case number 554/2022 (notice of motion issued 13 June 2023) –
paragraphs 1 to 7 .
33.6 Case number 4374/2022 (unsigned notice of motion dated 15 May
2023) – paragraphs 1 to 11 .
33.7 Case number 5982/2022 (notice of motion dated 6 December 2022) –
paragraphs 1 to 3.
[34] In broad summar y the relief that Dr Yako desires – and of course, with whom
Ms Noz imankulu makes common cause, entails:
34.1 Orders declaring and setting aside the first meeting of the creditors of
Crossmed Health on 27 September 2017, and the notice convening
that meeting as well as setting aside the appointment of Mr Cassim
and Mr Ndyamara as BRPs and setting aside the process of ratifying
their appointments as such, including declaring as unlawful and setting
aside the appointment by the BRPs of the board members of
Crossmed Health.
34.2 Orders declaring that all meetings, decisions a nd resolutions including
ratification processes by the BRP’s during the business rescue
proceedings be declared unlawful.
34.3 Orders declaring the legal proceedings instituted by the BRPs in case
number 694/2018 (the money judgment) and in case number 357 /2018
(interdict by Roberson J) unlawful and a nullity and that all decisions
taken by the BRPs on behalf of Crossmed Health be declared unlawful
and fraudulent, in particular the institution of the sequestration
proceedings in case number 571/2019.
34.4 Orders declaring the BRPs to be found guilty of various contraventions
of the Companies Act and that they each be imposed with sentences of
10 years’ imprisonment or fines ranging from R10 million to R20 million
for such contraventions, and furthermore that their licences as BRPs
be withdrawn and that they be declared liable to pay Dr Yako an
amount of R11.4 million due to him as a salary.
34.5 Orders declaring unlawful the transfer of the hospital licence dealt with
in the review before Smith J in case numb er 1243/2020, and
furthermore that the process attendant on the licence transferred and
issued to Crossmed Health be reviewed and set aside and that Dr
Yako be declared the sole proprietor and holder of the licence in favour
of Crossmed Mthatha. Attendant on the transfer of the licence back into
his name, Dr Yako craves additional relief that he be restored all the
property interests and rights attendant on such licence holding and that
Crossmed Health be interdicted and prohibited from utilising the
licenc e.
[35] Evidently, the relief claimed is far -reaching . In its sweep, it seeks to undo or
erase all steps taken and processes initiated by the BRPs since 2017 that eventually
culminated in the finalisation in 2019 of the business rescue of Crossmed Health.
Contrary to the submission made by counsel for Dr Yako that the setting aside of the
business rescue proceedings is not what is before court, it is abundantly clear that
the relief claimed is intended to undo the business rescue process, effectively settin g
aside the money judgment and ultimately dousing the sequestration . It is common
cause that Crossmed Health was financially distressed and was successfully turned
around in business rescue. It is mind -boggling and perhaps speculative that undoing
the enti re process would result in Crossmed Health reverting to its previous
financially distressed state impacting negatively on creditors, shareholders and
employees (dependent on their salaries) – all in regard to whom the business rescue
plan (Annexure K) has been implemented. Undeniably , there are constitutional
implications in so far as Crossmed Health provides access to health -care and
treatment to members of the public. The opposing contention that creditors who have
long been paid are unaffected by the rel ief Dr Yako claims, is unpersuasive and only
serves to underscore the inherent imprecision in the gamut of the relief set out in the
various notices of motion , this on the asserted premise that fraud unravels
everything . The scope of the relief also affec ts the current implementation of the
business rescue plan which still remains operative as regards a deferred payment in
favour of the IDC. This is dealt with later.
[36] In the assortment of Dr Yako’s relief it may be gathered from the notices of
motion that a dministrative conduct was set in motion and decisions taken by organs
of state (and directors of companies). What appears to have been ignored is that
administrative conduct and the orders or decisions that follow have legal effect until
set aside by an or der of court. It is also not clear whether the relief directed against
such administrative acts and/decisions is brought under the common law or the
Promotion of Administrative Justice Act9. This should be seen against the fact that
the series of applicat ions triggered by Dr Yako have been initiated several years
after the business rescue had been successfully completed without a reasonable
and satisfactory explanation being put up for the delay in each instance.
[37] Turning to the affidavit by Mr Baker. It was filed in opposition to case number
3542/2019. The matter concerned a second application by Dr Yako issued out of the
High Court, Makhanda during December 2019 to have Crossmed Health placed in
supervision under business rescue. He initiated the first application during August
2017 in the High Court, Mthatha (case number 1252/2017) where a court order
issued on 12 September 2017 for the appointment of Mr Cassim and Mr Ndyamara
as BRPs of Crossmed Health. Subsequent to Mr Baker’s opposing affidavit being
filed, Dr Yako withdrew the application in case number 3542/2019.
[38] In his affidavit, Mr Baker pertinently raises the issue of non -joinder. Quoting
where relevant he stated:
‘19.1 The applicants fail ed to join the IDC, a shareholder, Copperzone and
the ECDC.
…
19.2 The applicants have also failed to join the employees of [Crossmed
Health], a mandatory requirement of the provisions of the Companies Act of
2008. They have also failed to join known credi tors.
…
19.3 The applicants have also failed to join the individual directors of
[Crossmed Health], whose identities and citations they know full well. In the
face of them seeking far reaching relief against such directors, relating to
them being declared to be delinquent and to have acted recklessly in
accordance with the provisions of the Companies Act, one would have
9 Act 3 of 2000.
thought it prudent to join these individuals. The applicants have failed to do
so.’
[39] The contents of Mr Baker’s affidavit have been incorpor ated by reference in
an opposing affidavit filed by Mr Mustafa Mohamed (case number 5982/2022) in the
application by Dr Yako that Crossmed Mthatha be placed under business rescue. Mr
Mohammed deposed to that affidavit in his capacity as one of the duly app ointed
liquidators of Crossmed Mthatha. Referring to Crossmed Health and himself
respectively as the first and second respondents, and seemingly with emphasis on
the history of all the litigation by Dr Yako, Mr Mohamed commented on the inherent
abuse of pr ocess and stated:
‘51. It is necessary for this court, with respect, to have regard to all of the
applications which have been filed to date by [Dr] Yako and the first and
second respondents will accordingly ensure that all of the application
papers… are a vailable at the hearing… for consideration by the judge
allocated to hear [the] matter.’
[40] In the opposing affidavit deposed by Mr Baker on behalf of Crossmed Health
in case 4374/2022 (the application by Mr Nozimankulu as first applicant and Dr Yako
as secon d applicant) he mentions:
‘41.10 I will cause to be made available to the court at the hearing of this
application the pleadings in case number 5982/2022 and pray that the content
of the answering affidavit be read as if herein specifically set out.’
[41] Mr Ba ker also states the following with reference to case number 4374/2022 :
‘19 It is necessary that this court has regard to the history of the litigation
between Crossmed Health and [Dr] Yako. That history is materially relevant.
The history is set out in pre vious applications which previous applications are
referred to below and will all be indexed, paginated and will be made available
to the court at the hearing of this application.’
[42] The opposing parties contended that the two last -mentioned affidavits do no t
explicitly say anything about non -joinder. Even if the point has not been explicitly
mentioned it is not exceptional for non -joinder issues to be raised at peculiar stages
of proceedings and in non -conventional ways.10
[43] In argument, Mr Raubenheimer, addressed the Court on the identification of
interested parties. His submissions in that regard appear from what follows hereafter.
[44] In the reconsideration of the review in case number 1243/2020 pertaining inter
alia to the tr ansfer of the hospital licence, it is imperative that the actual
administrative decision -maker be joined as a party to the suit particularly where that
functionary has been appointed to perform certain functions. The notice of motion
identifies the Superin tendent General of the Eastern Cape Department of Health.
The relief is essentially for a review of an administrative decision pertaining to the
transfer of the licence. There is no indication that the reconsideration application has
been served on the rel evant incumbent of the department.
[45] Reference was also made during argument to an extract from the business
rescue plan. It incorporated payment proposals to creditors (Annexure K). To be
noted is that the structured payment plan in favour of the IDC is sti ll operative with a
final payment to be made on 28 February 2025 (Annexure K paragraph 5.3.2.2 n).
Provision has also been made for the IDC shareholder loan, the IDC security costs
claim, with further provision made for creditors such as the South African Revenue
Services, the local municipality, concurrent creditors, and other shareholder loans
(excluding the IDC). Provision was also made for the sale of property of Crossmed
Health, the proceeds of which were to be made available to pay creditors (Annexure
K paragraph 5.4).
[46] As for the BRPs, it was argued that the coercive relief directed against them
necessitates that they be joined in their personal capacities and ought to be given
opportunity of defending themselves against allegations that they are each criminally
liable for breach of statutory obligations. The affidavits they have filed on behalf of
10 Metsimahololo Local Municipality v Muller N.O. and Others [2021] ZAFSHC 33 para 16 and the
cases referred to.
Crossmed Health were deposed in their official capacities as duly appointed
business rescue practitioners. As they have since been discharged of their d uties,
their joinder is necessitated in the light of the claims made against them.
[47] It was contended by counsel for Dr Yako that the right of a party to validly
raise the objection of non -joinder is a limited one. The submission was made without
reference t o the scope of the relief claimed by Dr Yako, nor with reference to the
particular individuals identified by Mr Raubenheimer during argument . In short, no
facts were mentioned for demonstrating the limitation contended for notwithstanding
the concession th at the nature of the relief claimed by itself would have a domino
effect on a number of individuals.
[48] The reconsideration relief claimed by Dr Yako unquestionably affects a vast
array of individuals such as shareholders, directors (including Mr Baker) , cred itors,
employees and of course the BRPs themselves. In each of the matters for
reconsideration Dr Yako is dominus litus and it was after all fundamentally his duty to
ensure that the persons aforementioned are joined in these proceedings. As
contended by M r Raubenheimer, t heir joinder is of necessity irrespective of the
belated manner in which the issue was raised during the course of these
proceedings . No court may allow orders to stand against persons who may be
interested but w ho have had no opportunity to be notified and to present their case.
[49] There is justifiable refuge for e ach of the aforementioned persons in the
dictum articulated by the Supreme Court of Appeal in Absa Bank Ltd v Naude NO
and Others11 and unanimously affirmed in Golden Dividend12:
‘The test whether there has been non -joinder is whether a party has a direct
and substantial interest in the subject matter of the litigation which may
prejudice the party that has not been joined. In Gordon v Department of
Health, K wazulu -Natal [2008] ZASCA 99; 2008 (6) SA 522 (SCA) it was held
that if an order or judgment cannot be sustained without necessarily
prejudicing the interest of third parties that had not been joined, then those
11 [2015] ZASCA 97 para 10.
12 para 19.
third parties have a legal interest in the m atter and must be joined. That is the
position here. If the creditors are not joined their position would be
prejudicially affected: a business rescue plan that they had voted for would be
set aside; money that they had anticipated they would receive for t he following
10 years to extinguish debts owing to them, would not be paid; the money that
they had received, for a period of 30 months, would have to be repaid; and
according to the adopted business rescue plan the benefit that concurrent
creditors would have received namely a proposed dividend of 100 percent of
the debts owing to them, might be slashed to a 5.5 percent dividend if the
company is liquidated’
[50] In my view the reconsideration relief cannot be sustained without necessarily
prejudicing the inter ests of the third parties aforementioned who have not been
joined in these proceedings. They have a legal interest in the matter and must be
joined. It follows therefore that their non -joinder is fatal to these proceedings. In the
circumstances the appropr iate order is that the reconsideration matters be dismissed
as indicated in the order more fully set out at the conclusion of this judgment.
The sequestration
[51] The proceedings against Dr Yako arose from the money judgment.
Underscored in the founding affida vit deposed by Mr Cassim, are acts of insolvency
alleging that Dr Yako failed to satisfy the judgment debt and failed to indicate to the
sheriff disposable property sufficient for the purpose of satisfying the judgment debt,
and factually that he is in a s tate of actual insolvency in that his liabilities exceed his
assets which, in the aggregate, are significantly less in value than the judgment debt.
[52] The provisional sequestration order issued on 17 November 2022 was
coupled with a rule nisi (the rule) that was extended to 24 January 2023. The rule
has since been extended on various occasions (with costs reserved) until 2 July
2024 whereafter it was extended to 26 August 2024 to coincide with the hearing of
the reconsideration matters.
[53] Crossm ed Health moved for the confirmation of the rule nisi, contending that
the non -joinder of interested parties was dispositive of the reconsideration matters, in
effect leaving the sequestration proceedings uncontested.
[54] It is no misnomer that the proceedings are uncontested. Some history
requires recapitulating to appreciate that deduction. In notices of motion dated
15 May and 22 May 2023 (Annexures C and F), Ms Nozimankulu, (an employee
receptionist and supposedly also creditor of Crossmed Health) and Dr Ya ko, as
applicants respectively in case numbers 4374/2022 and 571/2019 , launched
applications purportedly under section 11(3) of the Insolvency Act13 for discharging
the provisional order.
[55] The notice of motion by Dr Yako was in the long form. Ms Nozimankulu
utilised the truncated short form albeit that her application had a self -standing case
number of its own. None of the matters were set down or case managed for hearing
on 26 August 2024.
[56] This situation appears to have arisen from the parties’ neglect to comply with
case management directives issued on 27 and 28 July 2023 (handed in as Exhibits
A and B respectively). The directives relate to several matters, notably case numbers
571/2019 an d 4374/2022. Exhibit B included a directive to the effect that the future
case flow management of the matters, including the need for interlocutory
applications to be fast tracked, shall be dealt with in a further case management
conference on a date and t ime directed by the judge concerned at the request of the
parties. The proposed case flow management conference did not materialise, hence
the interlocutory matters and their further conduct were never dealt with or
addressed by the all parties concerned, nor a judge subsequently approached or
requested to address these issues. Inexplicably, copies of the directives
aforementioned were not in the relevant court files or had presumably gone astray.
13 The section reads: ‘Upon the application of the debtor the court may anticipate the return day for
the purpose of discharging the order of provisional sequestratio n if twenty -four hours' notice of such
application has been given to the petitioning creditor.’
[57] Unaware of the interlocutory applications, I case managed th e matters
identified for reconsideration on 1 July 2024 and on 8 August 2024. The status of the
interlocutory matters did not arise – none of the parties mentioned them or raised
them subsequent to the conferences that were held on those occasions.
[58] During the reconsideration proceedings considerable debate emerged on
whether the applications by Dr Yako and Ms Nozimankulu were to be regarded as
self-standing substantive applications or interlocutories. On reflection, the question is
irrelevant given t he approach adopted in this judgment .
[59] On the assumption that the applications are interlocutory, the question that
arises is whether they are properly before this Court. Put s traightforwardly, they are
not.
[60] Both notices of motion are unsigned. Ex facie proof of issue, service and filing
are conspicuously absent . No condonation was sought to beg the Court’s indulgence
to entertain the matters. None of the applications were set down for hearing on 26
August 2024 and indeed there is no indication that the regi strar was notified to have
them enrolled for hearing.
[61] Notwithstanding the above the interlocutory applicants’ persistence in seeking
relief stemmed from entreating the Court to exercise its inherent powers to determine
the merits of the applications (with out them being properly accounted for).
[62] It must be borne in mind that the return day for the rule issued on 2 July 2024
was extended to 26 August 2024. A rule nisi is a court order calling upon a party to
show cause before the court, on a particular day, w hy the relief applied for by an
applicant should not be finally granted.14 One observes that t he relief claimed in each
notice of motion is substantially similar, and is in certain respects identical. While that
is so, it is striking that neither of the af fidavits by Ms Nozimankulu or Dr Yako
addresses the material averments underlying the factual and/or legal basis upon
which the sequestration order is sought – nor did they attempt to put forward a
14 Kriel N.O. v Born Free Investments 247 (Pty) Ltd [2017] ZAWCHC 122 para 26.
seriatim response to the averments made by the deponent in the founding affidavit to
that application. Both applications misfired because the sequestration was
approached in a manner completely at odds with section 11(3) of the Insolvency Act.
To have contended that the affidavits gainsaid the material in the aff idavit deposed
by Mr Cassim, was misleading. It was also attempted to bring into question the locus
standi of the deponent and the authority for the institution of the proceedings – this
without proper recourse to the notice procedure in uniform rule 6(5) (d)(iii).
[63] The net result is that Dr Yako (with whom Ms Nozimankulu makes common
cause) has not shown cause why final relief should not be granted. The case made
out in the affidavit founding the sequestration is uncontested and there is,
consequently, no factual dispute. The non -joinder of interested parties was a point
was well taken and disposes of the recons ideration matters, including the
interlocutory applications, without the need to determine the merits of the arguments
advanced for Dr Yako and Ms Nozimankulu.
Costs
[64] It is unnecessary to address this issue in any detail other than to say what
follows.
[65] The unwieldy volume of paperwork in the entire series of matters is of titanic
proportion comprising in excess of 7 000 pages (inclusive of approximately 1 000
pages of additional material in the court files) preceded by a meticulously detailed 97
page index comprising of 790 items. The address by Mr Dollie a ssisted in identifying
and navigating through the material .
[66] The applicants in the reconsideration matters played no part in compiling the
index, or in paginating the court papers. Counsel for the applicants in the matters,
well appreciating that neither of the parties had dealt with the interlocutory matters in
accordance with case managed directives proceeded headfirst into the merits of the
section 11(3) interlocutories without giving the Court any clear indication that this
was their starting point .
[67] To a manifest degree, without having properly identified the interlocutory
applications as the starting point for the reconsideration proceedings , this fuelled
perplexity and precluded a smooth commencement of the proceedings. The
proceedings only assumed shape once Mr Dollie volunteered his address and it then
emerged that none of the parties dealt with the status of the section 11(3)
applications . While the reconsideration proceedings did not involve the determination
of unusual or novel aspects of the law or the interpretation of new legislation, this
was not a run -of-the-mill matter .15 I take the view that a costs award on scale C is
justified.
[68] Accordingly the following order issues:
1. Under case number 571/2019 the rule nisi issued on 17 November 2022 is
confirmed and the estate of the respondent is placed under final
sequestration.
2. The costs in the application for sequestration shall be costs in the
administration of the estate of the respondent.
3. The application under case n umber 357/2018 dated 21 September 2023,
is dismissed with costs including all reserved costs orders, to be paid by
the applicants therein, jointly and severally (where applicable) to be taxed
on scale C.
4. The application under case number 694/2018 dated 31 May 2023, is
dismissed with costs including all reserved costs orders, to be paid by the
applicants therein, jointly and severally (where applicable) to be taxed on
scale C.
5. The application under case number 1243/2020 dated 12 June 2023, is
dismissed with costs including all reserved costs orders, to be paid by the
applicants therein, jointly and severally (where applicable) to be taxed on
scale C.
6. The application under case number 554/2022 dated 12 June 2023, is
dismissed with costs including all reserved costs orders, to be paid by the
15 Compare the comments in Umhlaba Erf 1 Properties CC v Shell Downstream South Afr ica (Pty) Ltd
[2025] ZAGPHC 13 para 116.
applicants therein, jointly and severally (where applicable) to be taxed on
scale C.
7. The application in terms of section 11 (3) of the Insolvency Act 34 of 1936,
under case number 571/2019, dated 22 May 2023 is dismissed wit h costs,
including all reserved costs orders, to be paid by the applicants therein,
jointly and severally (where applicable) to be taxed on scale C.
8. The applications under case number 4374/2022 are dismissed with costs,
including all reserved costs orders, to be paid by the applicants therein,
jointly and severally (where applicable) to be taxed on scale C.
9. The application under case number 5 982/2022 , dated 6 December 2022 is
dismissed with costs, including all reserved costs orders, to be paid by the
appli cants therein, jointly and severally (where applicable) to be taxed on
scale C.
____________________________
S. RUGUNANAN
JUDGE OF THE HIGH COURT
Appearances:
For Crossmed Health Centre (Pty) Ltd: R Raubenheimer , Instructed by S Dollie of
Shaheed Dollie Incorporated (Tel 082 853 2440 or 011 -482 9933) c/o Netteltons
Attorneys, Makhanda, (Ref: Mr Hart; Tel: 046 -622 7149).
For Ms Nosikhumbuzo Nozimankulu and Osteen Health Group (Pty) Ltd : S Mzileni ,
Instructed by Koswana Attorneys, East Lo ndon (Ref: A Koswana; Tel: 073 648 2231)
c/o Mgangatho Attorneys, Mak handa (Tel 073 524 3586 / 073 761 7751 ).
For Dr C O Y Yako: N Zilwa , Instructed by Koswana Attorneys, East London (Ref: A
Koswana; Tel: 073 648 2231) c/o Mgangatho Attorneys, Mak handa (Tel: 073 524
3586 / 073 761 7751).
Dates heard: 26 – 29 August 2024.
Date delivered 28 January 2025.