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[2026] ZAKZPHC 40
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Gearwise Properties CC and Another v Consolidated Aone Trade and Invest Proprietary Limited (In Liquidation (AR444/24; 12054/2016) [2026] ZAKZPHC 40 (15 April 2026)
FLYNOTES:
COMPANY
–
Winding
up
–
Creditor
claim
–
Liquidation of ICT, creditor lodged claims under section 44
Insolvency Act – Master expunged claims
without reasons –
Review succeeded – Appellants challenged on delay, locus
standi, prescription and substitution
– Court held review
within time, cession
in
securitatem debiti
left
creditor with reversionary interest, unjust enrichment claim
valid, prescription not established – Master’s
expungement unlawful, review correctly set aside – Claim 4
reinstated, Claim 5 remitted for reconsideration
with
reasons –
Insolvency Act 24 of 1936
,
ss 44
,
151
.
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
APPEAL CASE NO:
AR444/24
DBN
HC CASE NO: 12054/2016
In
the matter between:
GEARWISE PROPERTIES
CC
FIRST APPELLANT
(First intervening party
in the court a quo)
HARESH
OUDERAJH
SECOND APPELANT
(Second intervening party
in the court a quo)
and
CONSOLIDATE AONE TRADE
& INVEST RESPONDENT
PROPRIETARY
LIMITED (IN LIQUIDATION)
ORDER
On
appeal from:
KwaZulu-Natal Local Division, Durban (ME Nkosi J
sitting as court of first instance):
1. The appeal
against the order reviewing and setting aside the Master’s
decision to expunge Claim 4 and Claim 5 is
dismissed;
2. The orders of
the high court in paragraphs 3 and 4 are set aside and substituted by
the following:
(a) The Master is
directed to reinstate the respondent’s Claim 4 in the amount
lodged and approved at the meeting of
the creditors;
(b) The
determination of Claim 5 is remitted to the Master, and the Master is
directed to:
(i) consider all
relevant information placed before her by the respondent in respect
of Claim No 5;
(ii) rationally
determine the respondent’s Claim whether based on the reduced
amount of R7 261 755.85 or the
alternative claim of
R3 950 230.37; and
(iii) provide the
respondent written reasons for the determination.
3. Each party is to
pay its own costs.
JUDGMENT
Siwendu J (Bedderson J
and Shoba AJ concurring):
Introduction
[1]
This is an appeal against the judgment and order of ME Nkosi J (the
court a quo
), which reviewed and set aside the Master’s
decision expunging two claims lodged by Consolidated Aone Trading and
Invest
6 (Pty) Ltd (in liquidation) (Consolidated) against Imperial
Crown Trading 176 (Pty) Ltd (in liquidation) (ICT). The appeal is
prosecuted with the leave of the
court a quo
.
[2]
A narration of the relevant background facts, including the
relationship between Consolidated and ICT, and the circumstances
that
culminated in the lodgement and subsequent expungement of the
disputed claims is necessary.
Background
facts
[3]
Consolidated is the registered owner of the property upon which the
Ballito Bay Mall Shopping Centre (the shopping mall)
stands. A
mortgage bond over this property was registered as security for a
loan in favour of FirstRand Bank Limited, acting through
its
division, Rand Merchant Bank (RMB). As additional security for the
loan advanced in terms of the mortgage bond, Consolidated
ceded its
rights to current and future rental income from all tenants of the
shopping mall to RMB. Its attorneys gave notice of
the cession to the
tenants on the 26 September 2011.
[4]
Shoprite Checkers (Pty) Ltd (Shoprite) was one of Consolidated’s
tenants, pursuant to two written lease agreements concluded
on 4
August 2010, authorising it to operate a Checkers store and a
Checkers Liquor Shop. As will be seen later in the judgment,
the
rental income payable by Checkers became the subject of one of the
disputed claims.
[5]
ICT had constructed a retail shopping centre, Luthuli Bay, across two
of Consolidated’ s properties. On or about 1 December
2009,
Consolidated and ICT concluded a sale agreement, the material terms
of which were that:
(a)
Consolidated would, at its own cost, establish a sectional title
scheme comprising two sectional title units known collectively
as
Luthuli Bay.
(b)
ICT would pay Consolidated R45 million for the two sectional title
units, to secure the transfer and facilitate the release of
those
properties from RMB’s mortgage bond.
(c)
From 1 December 2008, ICT would bear all rates, taxes, insurance,
levies, and other outgoings ‘of whatsoever nature and however
incurred’, including water and electricity charges, until
registration and transfer.
[see Vol 2 FA
page 185 and 195 - 197]
[6]
Consolidated defaulted on its loan obligations and was provisionally
wound up at RMB’s instance on 19 September
2013. Messrs Van den
Heever, Nel, and Nkomo were appointed as joint provisional
liquidators on 28 September 2013. A final winding-up
order was
granted on 20 March 2014.
[7]
ICT, in turn, was finally wound up on 17 January 2014, following
proceedings instituted by its creditors, Gearwise Properties
CC
(Gearwise) and Mr Haresh Ouderajh. The joint liquidators appointed
were Ms Fatima Cassim NO, Professor Madlala NO, and Mr Niel
Button
NO.
The
disputed claims lodged by Consolidated
[8]
On
1 April 2014,
Consolidated, acting through its liquidators, lodged Claim 4 and
Claim 5 with the liquidators of ICT in terms of
s 44(4)
of the
Insolvency Act 24 of 1936
[1]
made up as follows:
(a)
Claim 4 was for R13 537 693.70, allegedly comprising rental due
by
Shoprite paid to ICT from February 2010 to January 2013. The schedule
evincing the amount collected was obtained from ICT’s
attorneys, Hemanth Singh and Company.
[ see Vol 1
page 15]
(b)
Consolidated contended that ICT retained the rent due and had
been unjustly enriched. In view of the cession, the rental was not
due to ICT but to RMB.
(c)
Claim 5 was in the amount of R13 456 776.65. Consolidated alleged
that the claim stems from ICT’s breach of the obligations under
the sale agreement, resulting in Consolidated, as the registered
owner, incurring liability to the KwaDukuza Municipality for various
charges.
(d)
In terms of Claim 5, Consolidated claimed that ICT failed to pay
the
rates, taxes, electricity, levies, insurance and other outgoings for
the sectional title units purchased. The amount was based
on a
schedule of account received from the KwaDukuza Municipality.
(e)
In conjunction, Consolidated lodged an alternative claim of
R4 693
113.97 which it alleged arose out of an obligation of ICT to the
KwaDukuza Municipality between April and October 2013.
Consolidated
had discharged the obligation.
[9]
Consolidated alleged that on 29 October 2013, its liquidators
cancelled the sale agreement with ICT. In its founding affidavit,
it
disclosed that it received a refund of R742 883.60 from the KwaDukuza
Municipality, reducing the alleged indebtedness to R3
950 230.37.
Both claims were approved at ICT’s first meeting of creditors
on 9 April 2014. [
see Vol 2 pages 184 -190 see Vol
2 para 15.2 page 188 - 190].
Recommendation
to expunge the claims
[10]
On 30 June 2015, Consolidated received notice from ICT’s
liquidators' attorneys requiring it to show cause why
its claims
should not be expunged under
s 45
of the
Insolvency Act.
[11
]
The correspondence attached included a recommendation from R
Choonilall & Associates dated 26 June 2015, signed by F Cassim,
advising the Master to expunge Claims 4 and 5.
In
relation to Claim 4, the letter stated that:
‘
With
regards to the aforesaid claim for the sum R13 537 693.70,
we note from attachment TVDH8 at paragraph 4.2, it is
alleged that
Eugene Jackson who held shareholding in ICT demanded payment of the
rental of Shoprite Checkers to be made to ICT,
which rental was made
to attorney Hemanth Singh & Associates on behalf of ICT.
Further, in term[s] of
email dated 14 September 2012, from Roy Soodhoo to Hemanth Singh,
which was copied to Jackson and Ouderajh,
Soodhoo as director of ICT
urged Singh to pay towards the electrical bill of ICT. This
instruction was confirmed by Ouderajh on
the same day.
We had written to the
liquidators of AONE ON 15 July 2014 (“A”) and to date
they have not responded.
In the light of the
aforesaid, we submit that Aone’s claims 4 be expunged.’
[ see Vol 2 page 149 to 151
and Vol 3 page 209 to 2010]
[12]
Insofar as Claim 5 is concerned, the letter dated 26 June 2015 from R
Choonilall & Associates to the Master, signed by F Cassim,
stated
that:
‘
With
regards to the aforesaid claim, the liquidators of ICT do not dispute
its indebtedness to the KwaDukuza Municipality for rates
and refuse
in terms of the deed of sale concluded.
However, having perused
and considered annexure TVDH 5, we are of the view that the final
balance is incorrect as the sum of R6 195 020.08
is
duplicated/repeated. The final balance ought to be R7 261 755.85
Prior to the lodgement of
this claim, KwaDukuza Municipality obtained a court order dated 30
May 2013 that the rental of Checkers
be paid to the Municipality. A
full accountability is still awaited.
This situation had
prevailed since the court order and we submit such indebtedness to
the Municipality ought to be fully settled
by now.
In any event we had
furnished the liquidators of Consolidated Aone a letter dated 15 July
2014 (“A”) to which we have
not yet had their response.
In the light of the aforesaid, we submit that Claim 5 of AONE be
expunged.’
Volume 1 page 16
paragraph 12.1 and
s12.2
; Volume
2 Page 149
-155 Annexures ENS 4 and
ENS 5
Master’s
decision and review proceedings
[13]
Consolidated’s attorneys requested an extension to respond,
followed by comprehensive submissions on 17 August
2015. The Master
thereafter issued a notice stating:
‘
Y
our
letter dated 23 November 2015 refers. The Claims no 4 and 5 against
the above estate is hereby expunged as per motivation provided
by
you.
Kindly refer to section
45(3) of the Insolvency Act 24 of 1936 (as amended) and Regulation 3
under the same Act, as read with regulation
18 of the Companies Act
61 of 1973.’
[see vol 2 page 156 –
163; and page 182.]
[14]
It is common cause that
the Master furnished no reasons for the impugned decision.
Consolidated requested reasons on 7 June 2016,
but none were ever
provided. Consequently, on 23 November 2016, Consolidated instituted
review proceedings in terms of the Promotion
of Administrative
Justice Act 3 of 2000 (PAJA), read with
s 151
of the
Insolvency
Act
[2
]
and s 339 of the
Companies Act 61 of 1973
[3]
,
seeking an order to set aside the Master’s expungement of
Claims 4 and 5.
[15]
Apart from the relief to review and set aside the Master’s
decision of 12 May 2016 to expunge Claims 4 and 5 lodged
against ICT,
Consolidated sought the following additional relief:
‘
3.
That the First Respondent be directed to reduce the Applicant’s
Claim No 5 to the sum of R7 261 755.85 as provided
for in
section 45(3)
of the
Insolvency Act No 24 of 1936
;
4. That it be hereby
declared that the Applicant’s Claim 4 and Claim 5 reduced to
the sum of R7 261 755.85 be dealt
with by the Second, Third
and Fourth Respondents as claims proved against Imperial Crown
Trading 176 (Pty) Ltd (in liquidation);
5. That the First
Respondent be and is hereby directed to pay the costs of this
Application, save in the event of any of the other
Respondents also
opposing the Application, in which event all the Respondents so
opposing shall jointly and severally pay the costs
of the
Application.’
[16]
The grounds for review are succinct. In the absence of reasons from
the Master which, Consolidated contends, triggers
the adverse
presumption in terms of
s 5(3)
of PAJA that the decision was taken
without good cause, Consolidated relied on the following additional
grounds, namely that the
Master:
(a) Considered
irrelevant alternatively relevant considerations were improperly
weighed or not considered as contemplated
in
section 6(2)
(e)
(iii)
of PAJA,
(b) Took the
decision arbitrarily or capriciously as envisaged in 6(2)
(e)
(vi)
of PAJA,
(c) The exercise of
the power conferred in
s 45(3)
of the
Insolvency Act was
so
unreasonable that no reasonable person would have exercised such
powers in the manner that he did by expunging the claims.
[17]
The Master has opted to abide by the decision of the court.
ICT’s
joint liquidators first filed a notice to oppose the application,
followed by a notice in terms of
Rules 30(1)
and
30
(2)
(b)
,
alleging several irregularities and causes of complaint pertaining to
the review application. They subsequently withdrew the
Rule 30(1)
application and tendered costs. ICT’s joint liquidators have
henceforth not taken part in the review and the appeal.
Intervention
by the appellants
[18]
Gearwise and Mr Ouderajh applied for leave to intervene in the review
proceedings. Mr Ouderajh alleged that he was one
of the four
co-members of ICT and is the sole member of Gearwise. They cited
their status as creditors of ICT and their claimed
interests
included:
(a) A builder’s
lien on the shopping mall, allegedly admitted by ICT’s
liquidators,
(b) A claim
exceeding R215 million for construction costs,
(c) A R30 million
loan account claim in ICT, and
(d) Concerns that
acceptance of Consolidated’s claims would dilute their
influence in ICT’s winding-up.
Opposition
to the review
[19]
The appellants raised two preliminary points:
(a) Consolidated
lacked
locus standi
to bring Claim 4 due to the cession of its
rental to RMB.
(b) There was a
delay in that the review was allegedly instituted outside the 180-day
period in PAJA.
[20]
On the merits, they contended that:
(a) ICT was
entitled to the rental under a ‘real agreement’, despite
the written leases naming Consolidated as
the landlord,
(b) Payments of the
rent the subject of Claim 4 to ICT’s attorneys were made under
internal arrangements,
(c) ICT bore no
obligation under the sale agreement after Consolidated breached it,
and
(d) Claim 5 was
irregular under
s 44(4)
of the
Insolvency Act because
it was
unsigned.
Decision
of the Court a Quo
[21]
The
court a quo
held that condonation of the delay and the
extension of the period within which to launch the review application
was warranted.
It found the review was effectively one day late. It
was in the interest of justice to grant same.
[22]
In relation to
Consolidated’s locus standi to lodge Claim 4, the court
a
quo
held
relying on the authority of
Millman
NO v Twiggs and Another
[4]
that
dominium
in the ceded rights
vested in Consolidated. It therefore concluded that there was no
lawful basis for the expungement of Claim 4.
To the extent that any
portion of the claim may have prescribed, the court held that the
Master was empowered to adjust the claim
proportionately rather than
expunge it in its entirety.
[23]
The court
a quo
found that Claim 5 should be reduced (as
conceded) to R7 261 755.85 under
s 45(3)
of the
Insolvency Act. The
Master’s failure to provide reasons rendered the decision
arbitrary and irrational. Costs were awarded against the intervening
parties. I shall return to the content of the order granted by the
court a
quo
in due course.
Issues
on appeal
[24]
The issues on appeal
mirror those ventilated at the hearing. The appellants challenge the
court
a quo’s
findings on:
(a) Condonation and
the extension of the period granted under
ss 7
and
9
of PAJA to
launch the review;
(b) Locus standi
conferred on Consolidated to lodge Claim 4;
(c) The rejection
of evidence of a verbal agreement concerning rental collection;
(d) Prescription of
a portion of the rent claimed and the treatment of unliquidated
claims;
(e) The court’s
reliance on
s 45(3)
, which they argue empowers only the Master,
not the court.
Interests
of the appellants
[25]
The parties consented to the intervention, and the court
a quo
permitted the intervention without demure or detailed analysis of
these issues. At the hearing, the court raised
mero motu
the
question whether the intervening parties were “aggrieved
persons” in terms of
s151
of the
Insolvency Act and
or how the
Master’s failure to take a decision adversely affected their
interest or rights as defined in
s1
of PAJA. The question arose
having regard to the two principal statutory provisions on which
Consolidated relied in launching the
review application, namely
s 151
of the
Insolvency Act and
section 6
of PAJA.
[26]
When the intervention
application is considered with reference to
Rosebank
Mall (Pty) Ltd v Cradock Heights (Pty) (Ltd)
[5]
,
the direct and substantial interest in the subject matter of the
review, namely the expungement of Consolidated’ s claims
from
ICT’s insolvent estate was not clear
.
As already alluded to, Mr
Ouderajh and Gearwise were creditors of ICT. Gearwise
instituted an action against ICT under case
number 674/2013, which
was pending before the court at the time. There were in addition
action proceedings pending under case number
5846/2016 against
Consolidated for unjust enrichment. Mr Ouderajh and Gearwise alleged
that although Consolidated denied liability
to Gearwise, it had not
paid for the construction of the mall despite benefiting from it.
[27]
The
question must be viewed against the emphasis by the Supreme Court of
Appeal (SCA) in
Minister
of Justice v SARIPA
[6]
that "although the master plays an important 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". Based on this
dictum,
it
appeared that
any
prejudice the appellants would suffer could only arise and stood to
be resolved in the winding-up process, if the Master took
a decision
that is irregular. Moreover, their intervention shed no light on the
reasons for the decision by the Master.
[28]
Consolidated’s
review is grounded in
s 151
of the
Insolvency Act, read
together with
s 339 of the Companies Act and the relevant provisions of PAJA. PAJA
envisages a narrower scope of their interest,
as there is no decision
taken by the Master which affects their rights and or interests. On
the other hand, when the nature of
the review powers contemplated in
s 151
of the
Insolvency Act are
considered the SCA in
Nel
and Another NNO v The Master
(with
Absa Bank Ltd and
Others
Intervening),
[7]
held that
s 151
confers wide powers of both appeal and review,
including the power to receive new evidence and to decide the matter
de novo.
[29]
The granting of leave to intervene to the appellants cannot be
criticised. It can be countenanced on the strength of
the wide powers
conferred by
s 151
to determine the claims
de novo
. Although
the appellants’ interest is not direct having regards to the
construction in PAJA, to the extent that the Court
could determine
and dispose of the claims, they would have an interest in the outcome
of the Court’s determination. A
wider scope to
interest has some merit.
The
question of delay
[30]
The first preliminary point pertains to the question of delay, and
much was made of this at the hearing. The appellants
contended that
the
court a quo
erred in granting Consolidated condonation
under
s 7(1)
(b)
of PAJA and in extending the period for
instituting review proceedings in terms of
s 9(1
)(b)
and (2)
of PAJA. The significance of this for the appellants’ case is
that a determination on delay in their favour would
be dispositive,
and the Court would not need to enter upon the merits of the appeal.
The judgment of the court a quo and the parties
proceeded on the
premise that there was a delay albeit it found it was minimal. It
concluded it had a discretion to exercise and
grant both the
condonation and the extension of the period.
[31]
The provisions
ss 7(1)
and
9
(1) of PAJA have been the subject of extensive judicial
interpretation.
[8]
It is
unnecessary to rehearse that jurisprudence in this judgment, save to
investigate whether factually there was such a delay,
which triggered
the provisions in
ss7
and
9
.
[32]
The appellants’
complaint, which was premised on the decision in
Aurecon
South Africa (Pty) Ltd v Cape Town City
[9]
was that Consolidated
waited six years after it was alerted it was out of time and thus
needed to apply for condonation before launching
its application
seeking same. It was submitted even then, that Consolidated applied
for condonation well after the 180-day period
prescribed by PAJA had
expired. The appellants contended that:
‘
The
180-day period could only be extended if such extension was sought
prior to the expiry thereof and in so doing erred in holding
that the
Respondent could apply for such an extension years after the expiry
of the prescribed period.’
The
gist of the complaint was that Consolidated failed to provide an
adequate explanation for the delay in filing the condonation
and the
appellants took issue with the court
a quo’s
conclusion
that it would not be in the interests of justice to dismiss the
review on the basis that it was filed only one day late.
[33]
Although the appellants
relied on the dictum in
Aurecon
South Africa (Pty) Ltd v Cape Town City and Asla Construction v
Buffalo City
[10]
the complaint argued before us refashioned the challenge pleaded in
their affidavits. In their application for intervention, the
issue
about the delay was framed as follows:
‘
I
do not accept that the applicant has brought its application for
review within 180 days under PAJA.’
[34]
However, in the answering affidavit
where
the appellants raised a point
in limine,
they contended that:
‘
5.2
The application therefore ought to have been brought within a period
of 180 days as provided in terms of
Section 7
of PAJA.
5.3 The aforesaid act
does not make provision for any condonation.’
[35]
The
standing principle is that it is to the affidavits the court looks to
determine the complaint, and the appellants stand and
fall by the
averments made therein. The appellants cannot make new grounds on
appeal, and the court will not allow them to do so
unless the point
has been fully canvassed, in which case the court is expected to
fully pronounce on it.
[11]
[36]
Of significance is whether, on the facts, and the statutory
provisions, there existed a valid question of delay, thereby
warranting condonation and an exercise of discretion by the court
a
quo
. As pointed, Consolidated and the court
a quo
proceeded on the basis that there was such a delay, hence it applied
for condonation. It is to that issue that I now turn. Several
provisions of PAJA relevant to computing the 180-period
merit stating.
[37]
To illustrate the consequences on the facts of the present appeal, it
is essential to first refer to the provisions of
ss
5(1)
to (4) of PAJA pertaining to the Master’s obligations to
furnish reason, the applicable time periods and the effect thereof
on
the computation. They state that:
‘
(1) Any person
whose rights have been materially and adversely affected by
administrative action and who has not been given reasons
for the
action may, within 90 days after the date on which that person became
aware of the action or might reasonably have been
expected to have
become aware of the action, request that the administrator concerned
furnish written reasons for the action.
(2) The administrator to
whom the request is made must, within 90 days
after receiving
the request, give that person adequate reasons in writing for the
administrative action.
(3) If an administrator
fails to furnish adequate reasons for an administrative action it
must, subject to subsection (4) and in
the absence of proof to the
contrary, be presumed in any proceedings for judicial review that the
administrative action was taken
without good reason.
(4)
(a)
An administrator may depart from the requirement to furnish adequate
reasons if it is reasonable and justifiable in the circumstances
and
must forthwith inform the person making the request of such
departure.
(b)
In determining whether a departure as contemplated in
paragraph
(a)
is reasonable and justifiable, an
administrator must take into account all relevant factors, including-
(i)
the objects of the empowering provision;
(ii)
the nature, purpose and likely effect of the administrative action
concerned;
(iii)
the nature and the extent of the departure;
(iv)
the relation between the departure and its purpose;
(v)
the importance of the purpose of the departure; and
(vi)
the need to promote an efficient administration and good
governance.’(Emphasis added)
[38]
The second relevant provisions are
ss 7(1)
and
9
.
Section 7
states
that:
‘
Any
proceedings
for judicial review
in terms of
section 6(1)
must be instituted without
unreasonable
delay
and not later than 180 days
after
the date
-
(a)
subject
to subsection (2)
(c)
, on which any proceedings instituted in
terms of internal remedies as contemplated in subsection (2)
(a)
have been concluded; or
(b)
where
no such remedies exist, on which the person concerned
was informed
of the administrative action, became aware of the action and the
reasons for it
or might reasonably have been expected to have
become aware of the action and the reasons.’ (My emphasis.)
Section 9
states that —
(1) The period of—
(
a
) 90 days
referred to in
section 5
may be reduced; or
(
b
) 90 days or 180
days referred to in
sections 5
and
7
may be
extended for a fixed period,
by agreement between the
parties or, failing such agreement, by a court or tribunal on
application by the person or administrator
concerned.
(2) The court
or tribunal may grant an application in terms of
subsection
(1)
where
the interests of justice so require.
[39]
As held by the SCA, in
Opposition
to Urban Tolling Alliance v SANRAL
[12]
s7(1)
requires
a
determination
of when ‘the person concerned’ was ‘informed of,
became aware of, or might reasonably have been
expected to become
aware of, the administrative action’. It will be a matter of
the facts.
[40]
The appellants accepted that, although the letter notifying
Consolidated of the Master’s decision to expunge the
claims is
dated 12 May 2016, Consolidated acquired knowledge of the decision
expunging its claim on 25 May 2016. Although Consolidated
had
90 days within which to request reasons for the expungement from the
Master in terms of
s 5(1)
of PAJA, Consolidated requested the reasons
on 7 June 2016, less than the 90 days prescribed in PAJA. As already
stated, t
he Master was required give the reasons within 90
days after receiving the letter dated 7 June 2016 but failed to do
so. Consolidated
launched the review application on 23 November 2016.
[41]
Applying the provisions of PAJA to the facts, the analysis
demonstrates otherwise.
On Consolidated’ s
view, the proverbial clock began to ‘tick’ from 25 May
2016, being the date, it received notice
of the decision and gained
knowledge of the administrative action to expunge its claim, which
was not disputed. Consolidated and
the court
a
quo
erred in this regard.
The
proverbial clock began to ‘tick’ on
26 May 2016, and not the 25 May 2016.
[42]
On a
proper interpretation of
s 7(1
)(b),
there
is a difference between the date of the trigger event, namely the
date of the knowledge of the administrative action and the
date from
which to compute the period the ‘clock began to tick’.
The wording of the provision in
s 7
of PAJA refers to ‘
after
the date
’
the
knowledge was acquired. It makes it clear that the ‘clock
ticks’ after the date of the trigger event. That view
is not
only consistent with
s 7
of PAJA but also with s 4 of the
Interpretation Act 33 of 1957 which mandates that when reckoning a
period, the computation is
exclusive of the date the trigger
event.
[13]
Accordingly
the
computation excludes 25 May 2016, the date when knowledge was
acquired. As a result, the review was not a day late, it was launched
on 23 November 2016 within the 180-day prescribed period.
There
was nothing to condone or extend by the court
a
quo
.
[43]
A third consideration, although raised at the
hearing, by the respondent, is that neither party correctly
considered the effect
of the request for reasons on the computation
of the period in their papers or during submissions.
Consolidated
invoked s 5 PAJA by requesting reasons within the 90-day window on 7
June 2016.
The
M
aster
should have provided reasons for the decision by
5 September
2016
. Since no reasons were provided, and no
justification furnished to Consolidated for the refusal, the Master
was deemed to have
failed to have provided reasons at the expiry of
the 90 days, by
5 September 2016
.
[44]
Once more, on a proper interpretation of s 7(1
)(b)
the Master’s failure to provide reasons within 90 days
by
5 September 2016 did not only trigger the presumption under s
5(3) PAJA, but it also reset the 180-day clock for computing the
period
within which to launch the review. The 180-day period
commenced ticking on 6 September 2016, the day after reasons were due
and
expired on 4 March 2017. In both instances, the review was
launched either on or before the 180-period prescribed in PAJA. The
review application was not out of time.
[45]
The above finding
merits a restatement of several principles on the role of the court
on appeal, starting with erroneous concessions
or errors of law,
which may have been made by the parties. Although submitted from a
different context, it was argued on behalf
of the appellants that
Consolidated elected to bring the condonation and extension
application and are bound by the path chosen.
A court on appeal is
not only entitled to base its judgment and make findings on any
matter flowing from the record, the heads
or the argument, it
is required to give the right decision on the accepted facts.
[14]
As the court in
Paddock
Motor (Pty) Ltd v Igesund
[15]
held, it would be an intolerable position if the court were to be
precluded from giving the right decision on accepted facts, merely
because a party failed to raise a legal point, as a result of an
error of law on his part. Accordingly, the error by Consolidated
does
not convert an otherwise unauthorised act to a legally correct
one.
[16]
[46]
If anything, th
e case as pleaded in the affidavits underscores
the point made at the hearing of the appeal that, contrary to new
submissions advanced
on the appellants’ behalf, s 7 of PAJA
regulates the ‘reasonableness’ of the delay
in
instituting the review
and not the period when condonation for
the late review is sought.
The court a
quo
erred in this regard and the argument about delay lacks merit. [
emphasis added]
Was
the Master’s decision to expunge the claims appropriately
reviewed?
[47]
Although the powers conferred by s 151 operate independently
of PAJA, when read alongside the decision in
Nel
, the
statutory presumption in s 5(3) of PAJA becomes apposite. The absence
of reasons from the Master, s 5(3) gives rise to the
presumption that
the decision to expunge the claims being an administrative action was
taken without good reason. The only evidence
placed before the court
was the letter dated 26 June 2015, which did not contain reasons
capable of rebutting that presumption.
Since it did not lie in the
mouths of the appellants to dislodge the presumption, the court was
entitled, under s 151, to re-evaluate
the merits of each claim afresh
and, where necessary, to receive additional evidence
[48]
I turn now to the merits of each of the claims and the orders made in
respect thereof.
Locus
Standi
to Lodge Claim 4
[49]
The question of
locus
standi
is
confined to the decision pertaining to Claim 4. Since the issue
affects the legal standing to consider the review and or enforce
the
claim before the court; authorities make it clear that the question
must be decided first independent of the merits of the
claim.
[17]
[50]
The appellants contended that the cession to RMB deprived
Consolidated of standing to lodge Claim 4. The court
a quo
nevertheless conferred Consolidated
locus standi
on the
strength of the decision in
Millman NO v Twiggs
and thus
erred. There is no basis to interfere with the finding of the court
a
quo
.
[51]
The appellant did not
dispute that the cession of the book debts was a cession
in
securitatem debiti
,
rather than an out-and-out cession. It is well established and was
most recently reaffirmed by the SCA in
Batteson
NO and Others v Joubert NO and Another
,
[18]
that once a cession is characterised as a cession
in
securitatem debiti
,
it bears the attributes of a pledge. Ownership of the ceded rights
does not pass to the cessionary instead, the cedent retains
a
reversionary interest.
[19]
[52]
The submission is inconsistent with the insolvency and liquidation
regime. Upon liquidation, a
concursus creditorum
is
established and Consolidated’s assets vest in the liquidators
for the benefit of all its creditors. Consolidated, acting
through
its liquidators, accordingly, retained the requisite standing to
lodge Claim 4. This conclusion accords with the powers
conferred on
trustees in terms of
s 95
of the
Insolvency Act, which
include taking
control of the estate, protecting, managing and realising assets,
collecting debts, dealing with property in the
possession of others,
and acting in the collective interests of creditors.
[53]
The SCA recently
reaffirmed in
Emontic
Investments (Pty) Ltd v Bothomley NO and Others
[20]
that the
Insolvency Act
and
the liquidation regime provide a comprehensive framework for the
proof of claims, the realisation of securities, and the subsequent
distribution of assets to creditors in accordance with their order of
preference. There is therefore no merit in the complaint.
I proceed
to consider the appeal against the determinations made by the court a
quo.
Claim
4
[54]
In respect of the merits of Claim 4, I have already disposed of the
locus standi
complaint. It was not disputed that the tenants
had been notified of RMB’s cession as early as 26 September
2011. The first
criticism on appeal, however, is that the court
a
quo
disregarded that the payment of rental by Shoprite to ICT was
made on the instructions of Mr Jackson, a shareholder of ICT and the
Chairman of Consolidated. The court
a quo
correctly rejected
reliance on Mr Jackson’s instructions. I must add that even if
Mr Jackson had been validly authorised,
RMB’s consent would
have been required to alter the terms of its security embodied in the
mortgage bond. There was no evidence
of RMB’s consent tendered.
[55]
Second, to the extent
that the appellants claimed that there was some other ‘verbal
agreement’ or alleged that the written
lease agreement between
Consolidated and Shoprite was not the ‘real agreement’
entitling the collection of the rental
to off-set expenses ICT would
incur, the contention is unsustainable. Although evidence of both
text and context is admissible
on the principles of
Natal
Joint Municipal Pension Fund v Endumeni Municipality,
[21]
the assertion by the
appellants would be inadmissible evidence and hit by the parole rule.
The terms of the verbal agreement could
not be used to prove or
contradict the written agreements between the parties. As the court
held in
KPMG
Chartered Accountants v Securefin Ltd
[22]
if an agreement was
intended to provide a complete memorial of a juristic act, extrinsic
evidence may not be led to contradict,
add, or modify the meaning of
the agreement. The principle has not been jettisoned and remains part
of our law.
[56]
This brings me to the third issue that part of the amount the subject
of Claim 4 was extinguished by prescription. Apart
from stating
that the Master could have deducted the portion of the claim that
would have prescribed, the court
a quo
did not undertake an
inquiry or consider the evidence before it, to examine whether there
is merit to the argument, or assess whether
on the evidence before
it, the amount of the claim it ordered was accurate or justified.
[57]
I accept as a matter of
general principle that because the subject-matter of Claim 4 consists
of monthly rentals payable by Shoprite,
each monthly rental
constituted a separate and self-standing debt due, and prescription
must run independently in respect of each
rental payment due. This
principle is well established at common law: where performance is
periodic or divisible, each periodical
debt prescribes separately
because the nonpayment constitutes a breach of the payment due.
[23]
[58]
Ordinarily, a cession in
securitatem
debiti
does
not alter or interrupt the running of prescription in respect of the
debt because its nature is not altered: the cessionary
merely steps
into the shoes of the cedent and acquires the claim with prescription
already running.
[24]
In
the present case, as already alluded to, the cession forms part of
the terms of the mortgage bond, in terms of clause
3 thereof, and
constitutes a pledge of the book debts in favour of RMB.
[25]
However, the Prescription Act 68 of 1969 (Prescription Act) is
directly relevant to the issues arising under Claim 4. In terms
of
s
12(1)
of the
Prescription Act, prescription
begins to run as soon as
the debt becomes due. However,
s11
(a)(i)
of the
Prescription Act
provides
that a debt secured by a mortgage bond prescribes after 30
years, whereas in terms of
s 11
(d)
,
any ordinary, unsecured debt prescribes after three years. That the
cession in
securitatem
debiti
was
integral to the terms of the mortgage bond was not considered at
all.
[59]
Finally,
s 13(1)
(g)
of the
Prescription Act
provides
that the running of prescription may be delayed where the
debt is the object of a claim filed against a company in liquidation.
This provision postpones the completion of prescription in limited
circumstances but does not restart prescription or alter the
fact
that it began to run when each monthly rental became due.
[26]
[60]
Shoprite discharged its obligation in terms of the schedule prepared
by Hemanth Singh and Company, which shows that rental
was collected
from Shoprite from February 210 to January 2013 albeit that it made
payments to the wrong party.
[61]
Whether by virtue of being a term of the mortgage bond, the cession
forms part of the 30-year prescription period contemplated
in
s
11
(a)
(i) of the
Prescription Act was
not decided by the court
a quo
nor argument advanced on this score in these
proceedings. As accessory to the mortgage debt, the cession endured
and the debt could
not have prescribed. However, what is clear
is that Consolidated’ s cause of action for Claim 4, is not
founded on
a contractual debt by ICT but on unjustified enrichment.
On the evidence before the court
a quo
, there was plainly no
legal cause for ICT to receive the rental payments. Reliance on any
alleged verbal agreement cannot override
or amend the securities
contained in the written mortgage bond and cession which not only
secure Consolidated’s obligations
to RMB but its rights to any
reversionary interest Consolidated has once the indebtedness in terms
of the mortgage bond was discharged.
[62]
In these circumstances, the prescription defence is not a defence
available to ICT, which is alleged to have been enriched
without
legal cause by receiving payments that, in law, should have been paid
to Consolidated or its cessionary, RMB. On the above
facts,
prescription could not extinguish an enrichment claim by the true
creditor against a third party who received the money
without just
cause. The unliquidated charges due to Hemanth Singh and Company are
claims against ICT and not Consolidated. Hemanth
Singh and Company or
the appellants may raise that claim at a meeting of creditors.
Claim
5
[63]
As already alluded to, Claim 5, is premised on the written agreement
with ICT already referred to above. Consolidated
was held liable to
the KwaDukuza Municipality for outgoings due by ICT. ICT’s
obligation and liability appeared
ex facie
the agreement,
despite ICT’s extraneous defences. The amount due, payable and
paid to the municipality is ascertainable.
There was nothing on the
evidence nor any rational basis to expunge the Claim in toto.
The
order by the court
a quo
[64]
The above conclusion brings me to the orders granted by the court
a
quo
, which merit a restatement. The court
a qu
o not only
set aside the decision to expunge the two claims, but it also decided
the merits of the claims and made orders relative
thereto.
[65]
Although the powers of the court are wide and include a revisit of
the merits
de novo
, the amounts in the order of the court
a
quo
and the evidence on the papers do not reconcile for the
following reasons:
i. Claim 4 lodged
with the Master was for R13 537 693.70.
ii. The initial
Claim 5 was for R13 456 776.65.
[66]
Consolidated conceded in respect of Claim 5, that there was a
duplication of the sum of R6 195 020.80. The
actual sum due
was reduced to R7 261 755.85. Accordingly, it sought a reduction
of Claim 5 to R7 261 755.85.
[67]
It is imperative to observe that Consolidated also relied on an
alternative cause of action in respect of Claim 5 for
an amount of
R3 950 230.37. It conceded it received a sum of R742 883.60
as a refund from the KwaDukuza Municipality.
It paid outgoings of
R4 693 113.97 between April 2013 to October 2013 to the
KwaDukuza Municipality. It sought payment
of R 3 950 230.37.
[68]
The judgment and order by the court
a quo
accepted
Consolidated computation without demure. It makes no mention of the
alternative claim and the basis on which it determined
the amounts in
the order directing the reduction. To illustrate, the point,
Consolidated’s notice of motion sought the following
orders in
paragraphs 3, 4 and 5, that:
‘
3.
That the first respondent be directed to reduce the applicant’s
claim No 5 to the sum of R7 261 755.85 as provided
in
s
45(3)
of the
Insolvency Act No 24 of 1936
4.
That it be hereby declared that the applicant’s
Claim No 4
and Claim No 5
be reduced to the sum of R7 261 755.85,
be dealt with by the second, third and fourth respondent as claims
proved against
Imperial Crown Trading 176 (Pty) Ltd (in liquidation)’
[ Emphasis added]
[69]
The computation of the amount in the order in paragraph 3 and 4
conflates the Claims. The only concession of the error
made on the
papers was in respect of Claim 5. Claim 4 does not feature in the
order granted. What is more, in respect of Claim
5, the order is
silent on the effect of the alternative claim to the direction to the
Master. That part of the order is clearly
wrong and cannot stand. At
the hearing Counsel for Consolidated conceded that the alternative
claim was not placed into consideration
before the court a
quo
.
[70]
While I agree that the expungement of the claims fell to be set
aside, the court a
quo
was not best placed to order the
amounts it did in respect of claim 5. Although
s 151
of the
Insolvency Act permits
a court to consider evidence to
determine the claims afresh , absent such evidence, the court
on review has at its
disposal several remedies in terms of
s 8
(1) of
PAJA which are not only limited to the substitution or variation of
the administrative action but include an order remitting
the
administrative action with or without directions. An order for the
remittal of Claim 5 to the Master for investigation and
determination
is appropriate.
[71]
It now remains to determine the issue of costs, which generally
follow the result. Consolidated has succeeded in resisting
the appeal
to the extent that this court confirms the order reviewing and
setting aside the Master’s decision expunging its
claims and,
reinstates Claim 4 as proved at the meeting of creditors. On
the other hand, the appeal partially succeeds to
the extent that the
court a quo’s order in respect of Claim 5 is remitted to the
Master for consideration. In
the result and having regard
to the mixed outcome of the appeal, I consider that the interests of
fairness are best served by making
no order as to costs. Each party
has achieved a measure of success on discrete issues, and it would
not be just to characterise
either as the overall successful party
for purposes of costs, given the remittal order below.
[72]
In the result, the following order is made:
1. The appeal
against the order reviewing and setting aside the Master’s
decision to expunge Claim 4 and Claim 5 is
dismissed;
2. The orders of
the high court in paragraphs 3 and 4 are aside and substituted by the
following:
(c) The Master is
directed to reinstate the Respondent’s Claim 4 in the amount,
lodged and approved at the meeting of
creditors;
(d) The
determination of Claim 5 is remitted to the Master, and the Master is
directed to:
(i) consider all
relevant information placed before her by the Respondent in respect
of Claim No 5;
(ii) To rationally
determine the Respondent’s Claim whether based on the reduced
amount of R7 261 755.85 or
the alternative claim of
R3 950 230.37; and
(iii) provide the
Respondents written reasons for the determination.
3. Each party is
to pay its own costs.
NTY
SIWENDU J
BEDDERSON
J
SHOBA
AJ
Date
of hearing: 24 October 2025
Date
of Delivery: This judgment was handed down electronically by
circulation to the parties’ representatives by email
and
released on SAFLII. The date and time for hand down of the judgment
is deemed to be
10h00
on
15 April 2026
.
Appearances:
For the
Appellant:
Mr Kisson Singh SC
Instructed
by:
Nirvan Kawulesar
& Company
C/O
Vathers Attorneys
For the Respondent:
Mr GME Lotz SC
Instructed
by:
Edward Nathan Sonnenbergs
C/O
Venns Attorneys
[1]
Section 44
(4) of the
Insolvency Act 24 of 1936
requires that:
‘every such claim be proved by affidavit in a form
corresponding substantially with Form C or D in the First
Schedule
to this Act. That affidavit may be made by the creditor or by any
person fully cognizant of the claim, who shall set
forth in the
affidavit the facts upon which his knowledge of the claim is based
and the nature and particulars of the claim,
whether it was acquired
by cession after the institution of the proceedings by which the
estate was sequestrated, and if the
creditor holds security
therefor, the nature and particulars of that security and in the
case of security other than movable
property which he has realized
in terms of section
eighty-three
,
the amount at which he values the security.’
[2]
The
review
of
the Master's decision is brought in terms of section
151 of the Insolvency Act 24 of 1936.which
states as
follows:‘ Any person aggrieved by any decision, ruling, order,
appointment or taxation of the Master or by a
decision, ruling or
order of an officer presiding at a meeting of creditors may bring it
under review by the Court and to that
end may apply to the Court by
motion, after notice to the Master or to the presiding officer, as
the case may be, and to any
person whose interests are affected :
Provided that if all or most of the creditors are affected, notice
to the trustee shall
be .deemed to be notice to all such creditors ;
and provided further that the Court shall not re-open any duly
confirmed trustee's
account otherwise than as is provided in section
one hundred and twelve.’
[3]
Section
339.
of the Companies Act 61 of 1973 states as follows:
Law
of insolvency to be applied mutatis mutandis
.
‘
In
the winding-up of a company unable to pay its debts the provisions
of the law relating to insolvency shall, in so far as they
are
applicable, be applied mutatis mutandis in respect of any matter not
specially provided for by this Act.’
[4]
Millman
NO v Twiggs and Another
1995
(3) SA 674 (A).
[5]
Rosebank
Mall (Pty) Ltd and Another v Cradock Heights (Pty) Ltd
2004 (2) SA 353
(W).
[6]
Minister
of Justice v SARIPA
2017
(3) SA 95
[7]
Nel and
Another NNO v the Master (Absa Bank Ltd and Others Intervening)
2005 (1) SA 276
(SCA) at
paras 22-23.
[8]
.
Gqwetha
v Transkei Development Corporation Ltd and Others
2006 (2) SA 603
(SCA);
Opposition
to Urban Tolling Alliance v South African National Roads Agency
Limited
[2013]
ZASCA 148
;
[2013] 4 All SA 639
(SCA);
Cape
Town City v Aurecon SA (Pty) Ltd
[2017]
ZACC 5
;
2017 (4) SA 223
(CC)
;
Buffalo
City Metropolitan Municipality v Asla Construction (Pty) Ltd
[2019]
ZACC 15; 2019 (4) SA 331 (CC).
[9]
Aurecon
South Africa (Pty) Ltd v Cape Town City
[2015]
ZASCA 209
;
2016 (2) SA 199
(SCA);
[10]
Asla
Construction (Pty) Ltd v Buffalo City Metropolitan Municipality
[2017]
ZASCA 23; 2017 (6) SA 360 (SCA).
[11]
Director
of Hospital Services v Mistry
1979
(1) SA 626
(A) at 635F/G-636F;
Road
Accident Fund v Mothupi
2000(4)
SA 38 (SCA) at para 30.
[12]
Opposition
to Urban Tolling Alliance v South African National Roads Agency
Limited
[2013]
ZASCA 148
;
[2013] 4 All SA 639
(SCA)
para
27.
[13]
Section 4 of the Interpretation Act is titled ‘Reckoning of
number of days’, and reads:
‘
When
any particular number of days is prescribed for the doing of any
act, or for any other purpose, the same shall be reckoned
exclusively of the first and inclusively of the last day, unless the
last day happens to fall on a Sunday or on any public holiday,
in
which case the time shall be reckoned exclusively of the first day
and exclusively also of every such Sunday or public holiday.’
[14]
Thompson
v South African Broadcasting Corporation
[2000] ZASCA 76
;
2001
(3) SA 746
(SCA) para 7.
[15]
Paddock
Motors (Pty) Ltd v Igesund
1976
(3) SA 16 (A).
[16]
Mazibuko
and Others v City of Johannesburg and Others
[2009] ZACC 28
;
2010 (4)
SA 1
(CC).
[17]
C
Hoexter and G Penfold
Administrative
Law in South Africa
3
ed (2021) at 676. See also
Giant
Concerts CC v Rinaldo Investments (Pty) Ltd and Others
[2012]
ZACC 28
;
2013 (3) BCLR 251
(CC) para 33-43;
Areva
NP Incorporated in France v Eskom Holdings SOC Ltd and Another
[2016]
ZACC 51
;
2017 (6) SA 621
(CC) para 40;
Four
Wheel Drive Accessory Distributors CC v Rattan NO
[2018] ZASCA 124
;
2019
(3) SA 451
(SCA) para 7;
WDR
Earthmoving Enterprises and Another v Joe Gqabi District
Municipality and Others
[2018]
ZASCA 72
para 13;
Tupac
Business Enterprises CC v KwaZulu-Natal Gaming and Betting Board
[2018]
ZAKZPHC 63 paras 15-21;
Goldrush
Group (Pty) Ltd v North West Gambling Board and Others
[2022]
ZASCA 164
;
2023 (3) SA 487
(SCA) paras 14-15;
Firm-O-Seal
CC v Wynand Prinsloo & Van Eeden Inc and Another
[2023]
ZASCA 107
;
2024 (6) SA 52
(SCA)
para
6.
[18]
Batteson
and Others NNO v Joubert and Another NNO
[2025]
ZASCA 129; 2025 (6) SA 386 (SCA)
[19]
Bank of Lisbon and
South Africa Ltd v the Master and Others
1987
(1) SA 276
(A) at 294,
Grobler
v Oosthuizen
[2009]
ZASCA 51
;
2009 (5) SA 500
(SCA) paras 15-16.
[20]
Emontic
Investments (Pty) Ltd v Bothomley NO and Others
2025
(2) SA 66 (SCA).
[21]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012(4) SA 593 (SCA).
[22]
KPMG
Chartered Accountants v Securefin Ltd
2009
(4) SA 399
(SCA) at para 38 to 39.
[23]
Roestorf
and Another v Johannesburg Municipal Pension Fund and Others
2012 (6) SA 184
(SCA) at
para 17; also, in
Standard
Bank of SA Ltd v Oneanate Investments (Pty) Ltd (In Liquidation)
1998 (1) SA 811 (SCA).
[24]
Fisher
v Natal Rubber Compounders (Pty) Ltd
2021
(3) SA 64
(SCA) at para16 to18.
[25]
First
National Bank of SA Ltd v Lynn NO and Others
1996
(2) SA 339 (A).
[26]
Bester
NO v Schmidt Bou Ontwikkelings CC
[2012]
ZASCA 125
;
2013 (1) SA 125
(SCA);
The
Master v I L Back & Co Ltd and Others
1983
(1) SA 986
(A).