THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Reportable
CASE NO : 319/04
In the matter between :
YUSUF OMAR ABOO Appellant
and
FIRSTRAND BANK LIMITED Respondent
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Before: STREICHER, CAMERON, NAVSA, HEHER JJA & COMRIE
AJA
Heard: 7 MARCH 2005
Delivered: 29 MARCH 2005
Summary: Appeal against a full court judg ment against an appellant who had
no right to prosecute the appeal to the full court after his
sequestration – application by tr ustee to be substituted for the
appellant in the appeal to this court – substitution can serve no
purpose as the appellant could not and the trustee cannot contend
that the court a quo should have found in favour of the appellant.
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J U D G M E N T
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STREICHER JA
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STREICHER JA:
[1] The appellant was granted special leav e to appeal to this court against a
judgment of the full court of the Transvaal Provincial Division (‘the court a
quo’). Since the granting of such leave th e appellant has died but for ease of
reference I shall still refer to him as the appellant. Af ter the granting of special
leave it came to light that the appellant had been sequestrated before the court a
quo heard the appeal. As a result the respondent now applies for the appeal to be
dismissed. The trustee in the appellant’s insolvent estate wants to oppose the
application and applies to be substituted for the appellant.
[2] During August 1999 the appellant entered into an agreement (‘the
agreement’) with the respondent in terms of which the appellant purchased from
the respondent its claims against Kharbai Motors (P ty ) Ltd (in liquidation)
(‘Kharbai Motors’) and Mohammed Carrim Kharbai (‘Kharbai’) against whom a
provisional sequestration order had been granted at the instance of the
respondent. The respondent undertook to apply for the discharge of the
provisional sequestration order agai nst Kharbai upon payment of two
instalments in respect of th e purchase price; to cede to the appellant the claims
as well as two bonds registered in favour of the respondent as security in respect
of the claims, upon payment of the pur chase price in full; and ‘to close the
enquiry into the affairs of Kharbai Motors under Sec tion 415 of the Companies
Act’.
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[3] The appellant paid the full purch ase price whereupon the respondent
cancelled the mortgage bonds and sent the re levant title deeds to the appellant’s
attorneys. Approximately eight months later the appellant’s attorneys, in a letter
to the respondent’s attorneys, stated that, in terms of the agreement, the
respondent was obliged to cede its secu rities over the fixed properties to the
appellant. They indicated, furthermore, th at they would gladly receive a reply as
to the reasons why the respondent ha d cancelled the mortgage bonds. The
respondent’s attorneys replied as follows:
‘1. Thank you for your letter of the 11 th October.
2. You have been aware that the bonds have been cancelled since March this year.
3. The bonds were cancelled with your client’s full knowledge and consent in view of the
fact that he had advised that the properties had been sold.’
[4] Shortly thereafter the appellant la unched an appli cation against the
respondent in terms of wh ich he purported to cancel the agreement and sought
an order against the respondent for the payment of R550 000, being the purchase
price paid in terms of the agreement, plus interest. He alle ged that he never
consented to the cancellation of the mort gage bonds and that he had not waived
his rights in terms of the agreement, which provided as follows:
‘No variation or amendment of, addition to, deletion from or consensual cancellation
of this agreement or any of its terms or waiver of any term of this agreement or waiver of any
right which may accrue to either party by virtue of this agreement or the waiver of any right
which may accrue to either party by virtue of the breach or termination of this agreement shall
be effective unless in writing and signed by the parties.’
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[5] The respondent defended the matter an d alleged that it had been agreed in
writing that the mortgage bo nds be cancelled. In this regard the respondent
relied on several letters written by the appellant on the letterhead of Louis
Trichardt Wholesalers and signed by the appellant above the words:
‘FOR: LOUIS TRICHARDT WHOLESALERS
MR Y O ABOO.’
The respondent also relied on a note encl osing the deposit slip in respect of the
appellant’s payment of the costs in respect of the cancellation of the bonds,
signed ‘Mr Joe Aboo’. In his replying af fidavit the appellant alleged that his
signature on the correspondence purported to be on behalf of Louis Trichardt
Wholesalers.
[6] The application came before De Jager AJ. He referred to the
correspondence relied upon by the responden t; held that the agreement had been
amended in writing signed by the parti es or their authorized agents; and
dismissed the application. On 11 November 2002 he granted the appellant leave
to appeal to the court a quo.
[7] On 20 May 2003 a provisional sequest ration order, which was made final
on 17 June 2003, was grante d against the appellant. Th e appellant nevertheless
proceeded with the appeal without inform ing the court or the respondent that he
had been sequestrated. The ap peal was heard by the court a quo on 22 October
2003 and was dismissed on or about 9 February 2004. Be rtelsman J dissented.
He held that the appellant signed the letters on behalf of Louis Trichardt
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Wholesalers, a company, and that th e agreement had therefore not been
amended in writing signed by the appellant, as required by the agreement.
[8] The appellant thereupon applied to th is court for special leave to appeal,
again without disclosing that he was an unrehabilitated insolvent. Leave to
appeal was granted and the matter was eventually set down for hearing on 7
March 2005.
[9] On 3 December 2004 the respondent’s attorneys wrote to the appellant’s
attorneys that it had come to their at tention that the a ppellant had been
sequestrated. They required the appellant’s attorneys to state on what basis it
was averred that they were entitled to pr oceed, firstly with the appeal to the
court a quo and secondly with the application fo r leave to appeal and the appeal
to this court. The appellant’s attorneys replied that they ha d not been aware that
the appellant had been sequestrated but th at the appellant di ed on 3 November
2004 and that they had been instructed by the appellant’s son, as executor in his
estate, to proceed with the matter.
[10] Apparently the appellant’s a ttorneys had second thoughts and on 14
February 2005 they wrote to the registrar of this court:
‘Kindly note that the Appellant does not intend to proceed with this matter on the date
allocated.
Please inform the Judges that they are not required to read the record.
The appellant will carefully consider its position.’
[11] This letter gave rise to an appli cation by the respondent for the dismissal
of the appeal with costs against a ny party opposing the application. The
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application in turn gave rise to an a pplication by the trustee in the insolvent
estate of the appellant to be substituted for the appellant.
[12] In terms of s 20(1)(a) of the Inso lvency Act 24 of 1936 the effect of the
sequestration of the estate of an insolvent is to divest the insolvent of his estate,
to vest it in a Master of the Supreme Court until a trustee is appointed and upon
the appointment of a trustee to vest the estate in him. It follows that, after the
sequestration of the appellant, the right th at he acquired to appeal against the
judgment of De Jager AJ no longer vested in him but vested first in the Master
and upon the appointment of a trustee in his trustee. The appellant therefore had
no right to proceed with the appeal to the court a quo and with a further appeal
appeal to this court.
[13] The trustee states in his affidavit filed in support of the application to be
substituted for the appellant, that he ratifies ‘whatever steps had been taken by
Mr Zehir Omar [the attorney who acted for the appellant] on behalf of the
insolvent and consequently on behalf of the insolvent estate’. However, there is
no evidence that any steps had been take n by Omar on behalf of the insolvent
estate. According to Mr Om ar, who appeared for the trustee before us, he was
unaware of the fact that the appellant was insolvent. It must follow that he could
never have intended to act on behalf of his insolvent estate. On the evidence
before us, the appellant acted in his personal capacity and Omar represented him
in that capacity. In thes e circumstances, assuming th at the steps taken by the
appellant could be ratified had he been acting on beha lf of the insolvent estate, a
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question that need not be decided, there can be no question of the appeal being
salvaged by way of ratification (see Caterers Ltd v Bell and Anders 1915 AD
698 at 710).
[14] Before us Mr Omar relied heavily on De Polo v Dreyer 1991 (2) SA 164
(W). In that matter an insolvent inst ituted action for the payment of certain
benefits to which his insolvent estate was entitled. The defendants filed a special
plea in which they contended that the insolvent was not legally entitled to
institute and/or proceed with the action. In his replication the insolvent alleged
that his trustee had waived his right to be joined. The alleged waiver by the
trustee was interpreted by the court as a refusal to institute action and an
authorization to the insolvent to carry on with the action.
1 Morris AJ held that
the insolvent could not sue for his own bene fit but that the trustee’s refusal to do
so entitled him to su e for the benefit of the insolvent estate. 2 In the light of the
fact that the refusal occurred after the action had been instituted, Morris AJ held
that the insolvent’s lack of locus standi had retroactively been remedied and
dismissed the special plea on the basi s that there would be an appropriate
amendment of the particulars of claim and the citation of the insolvent.3
[15] The De Polo case is of no assistance to the trustee. In that case the court
allowed the insolv ent’s lack of locus standi to be cured retrospectively but
before judgment. Here a judgment has been given against the insolvent acting on
his own behalf. We are dealing with an appeal against that judgment and an
1 At 177F-G.
2 At 179D-F.
3 At 179F-J.
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application by the trustee to be substitu ted for the appellant as appellant. The
latter did not have the right to pr osecute the appeal to the court a quo and could
clearly not seek from this court an order, in substitu tion of the order granted by
the court a quo, which he was not entitled to seek from that court. It is equally
clear that the trustee, if substituted fo r the appellant, cannot contend that the
appellant acting on his own be half as he did, should ha ve succeeded in the court
a quo. It follows that a substitution of th e trustee for the ap pellant can serve no
purpose. The judgment, having been grante d in the absence of the trustee and
without notice to him, could not affect his rights adversely. Should he still wish
to prosecute the appeal against the judgmen t of De Jager AJ his remedy is not to
be substituted for the appellant in the appeal before us but to apply to the
Transvaal Provincial Division for the setting aside of the judgment of the court a
quo and to be substituted for the appell ant. For these reasons the application by
the trustee to be substituted for the appellant in the a ppeal before us must be
dismissed.
[16] The respondent applies for the app eal itself to be di smissed. However, in
the light of the fact that the appellant died and that his executor has not been
substituted for him, an order binding th e executor cannot be made. The appeal
should, therefore, simply be struck from the roll.
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[17] The following order is made:
1 The application for substitution, as appellant, of the trustee in the
insolvent estate of the appellant, is dismissed with costs.
2 The appeal is struck from the roll.
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P E STREICHER
JUDGE OF APPEAL
CAMERON JA)
NAVSA JA)
HEHER JA) CONCUR
COMRIE AJA)