REPUBLIC OF SOUTH AFRICA
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IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(I) REPORTABLE: YES/ 0
(2) OF~N ~ST TO OT . JUDGES:
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(3) REV ·~
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In the matter between: -
NOTEFULL1122(PTY)LTD
and
MICHAEL BAKER N.O
(IN HIS CAPACITY AS EXECUTOR
OF THE LATE ESTATE THOMAS CHARLES
BARKER)
MASTER OF THE HIGH COURT
JOHANNESBURG
REGISTRAR OF DEEDS, PRETORIA
Case Number: 2023-003795
APPLICANT
151 RESPONDENT
2nd RESPONDENT
3rd RESPONDENT
SUSANNA TINTINGER N.O.
(IN HER CAPACITY AS THE
LIQUIDATOR OF THOMAS
MAXWELL KITHCEN {PTY) LTD
(in liquidation)
Van Aswegen AJ
INTRODUCTION:
41h RESPONDENT
JUDGMENT
[1] This is an application in terms of Section 17(1 )(a)(i) of the Superior Courts
Act, 10 of 2013. The Applicant seeks leave to appeal against the judgment
granted by this court dated 20 August 2025 under case number
2023-003795 1 where the application was dismissed with costs inclusive of
counsel's fees on scale B.
[2] The Applicant is not appealing the liquidator's - Fourth Respondent's - order
of sequestration of the estate of the late Thomas Charles Barker which was
granted under case number 2017-42679.
APPLICATION UNDER CASE NUMBER 2023-003795
[3] The application under case number 2023-003795, which is the subject of the
appeal, concerns the Applicant's claim for specific performance. The
Applicant sought an order compelling the transfer of immovable property
from the deceased estate of Thomas Charles Barker ("the deceased estate").
1 S1
2
[4] The Applicant's contention is that it had purchased the said immovable
property more than 24 years ago from the deceased. Yet, the property is still
registered in the deceased's name, the contract of sale was further not
recorded in terms of section 20 of the Alienation of Land Act 68 of 1981 and
during 2021 the municipality account in respect of the immovable property
was still in the deceased's name.
FACTUAL MATRIX:
[5] The facts in this matter can be summarized as set out here in after. The
owner of the immovable property ("property") was Mr. Thomas Charles
Barker (hereinafter referred to as the "deceased") who passed away on the
31st of March 2018.
[6] The said property accordingly forms part of the late Thomas Barker's estate.
The deceased estate is represented by the First Respondent, who is the
executor of the deceased estate and a family member of the deceased. The
executor did not oppose the transfer of the immovable property.
[7] The deceased's company, known as Thomas Maxwell Kitchens (Pty) Ltd
was liquidated. The Fourth Respondent is the duly appointed liquidator of the
insolvent estate of the company of the deceased, known as Thomas Maxwell
Kitchens (Pty) Ltd (in liquidation) (hereinafter referred to as the "insolvent
estate").
[8] The insolvent estate has a claim against the estate of the deceased, in terms
of a loan account, for a total amount of R1 372 896.00, which loan account
is due and owing to the insolvent estate, by the deceased estate, and which
amount has never been repaid.
[9] The insolvent estate which the Fourth Respondent represents, and its
creditors, have a direct and substantial interest in the transfer of the sole
asset in the deceased's estate. The transfer of the property would have
3
prejudiced the Insolvent Estate of Thomas Maxwell Kitchen (Pty) Ltd (In
liquidation).
[1 0] The Fourth Respondent as liquidator opposed the application for the transfer
of the property based upon the following:
[10.1] the claim of R1 372 896.00 which the insolvent estate of the
company has against the deceased's estate and
[10.2] the property sought to be transferred is the only asset in the
deceased's estate to which the creditors have a claim.
[11] Despite the Applicant's knowledge of the Fourth Respondent, it had not
joined the liquidator to the transfer application. The Fourth Respondent had
to intervene in the transfer of the immovable property application.
[12] The Applicant alleged that it purchased the property from the deceased more
than 24 years ago but that it never took transfer. The said property is still
registered in the name of the deceased estate and had never been
transferred or registered in the name of the Applicant.
[13] Prior to the launch of the transfer application, the Fourth Respondent brought
an application for the sequestration of the deceased, prior to his passing,
which application for sequestration was still pending at the time of the
application.
[14] The final sequestration order was granted by this court.
LEAVE TO APPEAL - PREVAILING POSITION
[15] Section 17(1 )(a) of the Superior Courts Act 10 of 2013 regulates applications
for leave to appeal and it provides that:
4
"Leave to appeal may only be given where the judge or judges concerned
are of the opinion that -
( i) the appeal would have a reasonable prospect of success; or
(ii) there is some other compelling reason why the appeal should be heard,
including conflicting judgments on the matter under consideration."
[16] The new or amended Superior Court's Act, Act 10 of 2013 had the effect that
it repealed the old Superior Court's Act, Act 59 of 1959.
[17] The traditional test that was applied by the Courts in considering leave to
appeal applications has been whether there is a reasonable prospect that
another Court may come to a different conclusion to the one reached by the
Court a quo.2
[18] With the enactment of section 17, the test obtained statutory force. In terms
of section 17(1 )(a)(i) leave to appeal may now only be granted where the
Judge or Judges concerned is of the view that the appeal would have a
reasonable prospect of success, which made it clear that the threshold to
grant leave to appeal has been raised.
[19] In Mont Chevant Trust v Tina Goosen and 18 Others3, at paragraph 6, it was
held that:
"It is clear that the threshold or granting leave to appeal against a judgment
of a High Court has been raised in the new Act. The former test whether
leave to appeal should be granted was a reasonable prospect that another
Court might come at a different conclusion, see Van Heerden v Cronwright
& others 1985 (2) SA 342 (T) at 342H the use of the word "would" in the
new statute indicates a measure of certainty that another Court will
differ from the Court whose judgment is sought to be appealed
against." (my emphasis)
2 Commissioner of Inland Revenue v Tuck 1989 (4) SA 888 (T) at 8908
3 2014 JDR 2325 (LCC)
5
[20] In Notshokuvu v S (2016) ZASCA 112 at paragraph 2, it was held that:
"An appellant, on the other hand, faces a higher and stringent threshold, in
terms of the Act compared to the provisions of the repealed Supreme Court
Act 59 of 1959. (See Van Wyk v S, Gale/av S [2014] ZASCA 152; 2015 (1)
SACR 584 (SCA) para [14].)"
[21] The test is thus no longer whether another court may arrive at a different
conclusion, but whether it would. This signifies a stricter threshold.
[22] The Supreme Court of Appeal in MEG for Health, Eastern Cape v Mkhitha
(1221/2015) [2016] ZASCA 176 (25 November 2016) explained the effect of
the amendment of section 17(1 )(a) as follows:
"[16] Once again it is necessary to say that leave to appeal, especially to
this court, must not be granted unless there is truly a reasonable
prospect of success. Section 17(1 )(a) of the Superior Courts Act 10
of 2013 makes it clear that leave to appeal may only be given where
the judge concerned is of the opinion that the appeal would have a
reasonable prospect of success; or there is some other compelling
reason why it should be heard.
[17] An applicant for leave to appeal must convince the court on proper
grounds that there is a reasonable prospect or realistic chance of on
appeal. A mere possibility of success, an arguable case or one that
is not hopeless, is not enough. There must be a sound, rational basis
to conclude that there is a reasonable prospect of success on
appeal." (my emphasis)
[23] With regard to the meaning of reasonable prospects of success, it was held
in S v Smith 2012 (1) SACR 567 (SCA) 570, at para 7, as follows:
"What is the test of reasonable prospects of success postulates is a
dispassionate decision, based on the facts and the law, that a court of appeal
could reasonably arrive at a conclusion different to that of the trial court. In
order to succeed, therefore, the appellant must convince this court on proper
6
grounds that he has prospects of success on appeal and that those
prospects are not remote but have a realistic chance of succeeding. More is
required to be established than that there is a mere possibility of success
that the case is arguable on appeal or that the case cannot be categorised
as hopeless. There must, in other words, be a sound, rational basis for the
conclusion that there are prospects of success on appeal". (my emphasis)
(24] A mere possibility of success arguable on appeal or that the case is not
hopeless is simply insufficient.
(25] In order to consider whether another court would come to another decision I
must consider the four grounds of appeal as raised by the Applicant.
GROUNDS OF APPEAL:
[26] The Respondent's criticism of the Court's order rests on four central points4,
namely:
(26.1] THE DEPONENT'S PERSONAL KNOWLEDGE:
The Applicant in its Heads of Argument asserted: 5
"The Court strongly criticised the fact that Mr Irving deposed to
the founding affidavit as opposed to Mr Hemsley, who had first
hand knowledge of the events in 2000.
Such criticism is unwarranted as the Applicant is a corporate
entity represented by its Group General Manager who are
entitled to rely on company records and their institutional
knowledge of the affairs of the company."
7
(26.2] LOCUS STAN DI:
The Applicant stated in its Leave to Appeal application6:
"The Court concluded that the Applicant lacked locus standi after
undertaking a time-sequenced analysis of the incorporations
within the corporate group and the subsequent conversions
from close corporations to companies."
(26.3] 2015 STEPS TO FACILITATE AMENDMENTS:
The Applicant in its Leave to Appeal7 stated:
"4. The Court erred in its reasoning that the Applicant relied
on the 2000 agreement, yet 2015 steps signified a new
agreement not relied on in support of the relief claimed.
5. The Court respectfully misconstruing the 2015 conduct
as a novation or new agreement as opposed to a
ratification of the earlier and operative 2000 agreement."
(26.4] RES INTER ALIOS ACTA- LIQUIDATOR AS STRANGER TO
SALE:
"Finally, the Court held that the liquidator, despite being a
stranger to the sale, could impugn the agreement."
[27] I deal with each of these grounds in turn here in below:
6 Para 2 at T3
7 Paras 4 and 5 at T5
8
FIRST GROUND - DEPONENT'S PERSONAL KNOWLEDGE
(28] The Applicant's counsel argued that the court erred in its finding that Mr.
Irving lacked personal and firsthand knowledge of the events in the year
2000.
(29] The Applicant claimed that the court erred in law or fact by failing to recognise
that:
(29.1] the court overlooked the Applicant's corporate nature as a juristic
person;
(29.2] the entitlement of executive appointments such as the group
general manager to rely on company records and institutional
knowledge;
(29.3] the failure to recognize that first-hand participation is not required.
(30] In essence, the Applicant contends that, as a corporate entity, it may be
represented by Mr Irving, its Group General Manager, who is entitled to rely
on the company's records and institutional knowledge in relation to its affairs.
CONSIDERATION OF PERSONAL KNOWLEDGE
(31] Mr. Irving deposed to the affidavit on the basis of a resolution8 of the Applicant's
directors authorising him to act as company representative in this matter. It
furthermore authorises him to give lawful instructions to counsel, and to sign,
endorse and execute all legal documents, including affidavits, for court action or
applications pertaining to the debt owed to the applicant by the respondent.
(32] Mr Irving stated in his Founding Affidavit the following:
[32.1] he is the Group General Manager of the Applicant;
9
[32.2] that the facts contained in the affidavit fall within his own personal
knowledge, save where expressly indicated otherwise and were to
the best of his belief both true and correct.
[33] However, he then added the following:
"3.
4.
Where I rely on the information conveyed to me by others, I believe
such information to be correct and have no reason to believe
otherwise. Moreover, where possible, such information is confirmed
by confirmatory affidavits.
Where in this affidavit. I refer to facts which do not primarily fall within
my own personal knowledge, I beg that those allegations be
admitted as evidence, notwithstanding the possibility of such facts
being hearsay, pursuant to the provisions of Section 3 of the Law of
Evidence Amendment Act, on the basis that it is in the interests of
justice to do so under the prevailing circumstances." (my emphasis)
[34] From the deponent's own wording, the following is clear:
[34.1] Certain information was conveyed by others to him which he
believed to be correct and that he had no reason to believe otherwise
(self-determination) - the sources of information were not specified;
[34.2] Some of the evidence is hearsay (he did not disclose which evidence
constituted hearsay and why it should be accepted as evidence).
[35] It is th~refore clear that Mr. Irving's affidavit contained both personal knowledge
and hearsay evidence. No indication was however given of which evidence
constituted hearsay.
[36] The failure to distinguish clearly between personal knowledge and hearsay
evidence creates doubt as to which evidence fell within the deponent's personal
knowledge.
10
[37) The facts presented in the Applicant's Founding Affidavit supporting the
Notice of Motion should have been stated succinctly, clearly, and in
chronological order.9
[38) The Founding Affidavit had to set out at least the following information:
[38.1) The Applicant's right to apply for the relief sought - its locus standi.
[38.2) Jurisdiction;
[38.3) The cause of action relied upon;
[38.4) The evidence to support the application
[39) Mr. Irving's failure in the Applicant's Founding Affidavit:
[39.1] to establish locus standi;
[39.2) to deal specifically with the conversion of the legal entities and
[39.3) payments by Advancenet (Pty) Ltd who only commenced to trade in
2002 add concern and unease in respect of Mr. Irving's personal
knowledge.
[40) More so, as the Applicant's cause of action was based upon an offer to purchase
concluded in January 2000.10
[41] The Applicant had knowledge of the following facts when it deposed to the
Founding Affidavit, yet elected not to deal with these material issues, namely:
[41.1] the conversion of the corporation Notefu/1 1122 CC (registered on
17 February 2000) to the company Notefu/11122 (Pty) Ltd only took
place on 21 February 2003 - both the Applicant and Notefu/1 1122
CC did accordingly not exist in 2000. Mr. Irving had to address the
said entities and the conversion in the Founding Affidavit to
establish the Applicant's locus standi.
[41.2) the failure to have pleaded that the offer to purchase in 2000
would have been between Notefu/1 1122 CC and the deceased,
9 Reynolds NO v Mecklenberg (Pty) Ltd 1996 (1) SA 75 (W) at 78
10 Paragraph 12 at A 10
11
11 J14
Mr. Thomas Charles Barker, and not the Applicant who only
came into being in 2003.
[41.2.1] This fact constituted material evidence which the
deponent, if he had personal knowledge, would
have known and ought to have disclosed.
[41.3] the attempt to address material omitted issues in relation to
locus standi in a supplementary affidavit. Facts which had to be
known to the deponent if he had personal knowledge when
deposing to the founding affidavit.
[41.4] the use of the words "f' and "me" in paragraphs 36 and 37 of the
Supplementary Affidavit deposed to by Mr. Irving which is clearly
indicative of a reference to Mr. Hemsley and not to Mr. lrving.11
[41.5] Advancenet (Pty) Ltd who paid the purchase price and rates and
taxes only started to trade in 2002. The Applicant accordingly ought
to have pleaded and extensively dealt with the entity who paid the
purchase price in 2000. The Founding Affidavit had to address the
following:
[41.5.1]
[41.5.2]
[41.5.3]
[41.5.4]
the opening of a bank account in August 1989,
the fact that Advancenet was registered in August
1987 and traded as Fire Trade 26 CC;
Fire Trade 26 CC thereafter underwent a name
change to Micro Figurations;
Micro Figurations' name was thereafter altered to
Advancenet CC, which was subsequently converted
into Advancenet (Pty) Ltd.
12
[42) Although a group general manager can depose to an affidavit on behalf of a
company, legal entity- he cannot merely state and declare his position.12 This is
acknowledged by the Applicant who referred to the fact that a Group General
Manager can represent a legal entity and that the manager are entitled to rely
on company records and their institutional knowledge of the affairs of the
company. 13 Additionally, a general group manager has to:
[42.1]
[42.2)
confirm his authority - his power to represent the company and
depose to the affidavit and
identify the source of his knowledge from which he derives personal
knowledge, namely whether knowledge was derived from direct
oversight, daily management or control and possession of company
systems, operations or records. He has to declare that the company
books, files, electronic data and administrative records are in his
possession or control.
[43] Nowhere in the Founding Affidavit does Mr. Irving state on what basis, save for
stating that he is the Group General Manager, he alleges that he has personal
knowledge of the offer to purchase concluded in the year 2000. Mr. Irving failed
to identify the source of his knowledge - he failed to explain in his affidavit
whether he has:
[43.1] in his possession and under his control the relevant Applicant's files
or records;
[43.2] whether he inspected the Applicant's relevant books, files records
and documentation of the Applicant or
[43.3) whether he has verified the records with the directors.
[44) In application proceedings, the affidavits take the place not only of the pleadings
in action proceedings, but also of the essential evidence which would be led at
trial. The deponent thus "testifies" in motion proceedings. From this it follows that
12 Nedbank Limited v Tru Essence Products (Pty) Ltd and Another (86612/2014) [2015) ZAGPPHC
1062 (14 July 2015)
13 Para 23 N42
13
generally relief may only be granted in motion proceedings if it is supported by
admissible evidence in the affidavits. Whether the deponent's evidence is
admissible depends on whether he has personal knowledge of the facts.
(45] In President of the Republic of South Africa and Others v M & G Media Ltd14 the
Supreme Court of Appeal remarked as follows on the meaning of personal
knowledge:
"A court is not bound to accept the ipse dixit of a witness that his or her evidence
is admissible... Merely to allege that that information is within the 'personal
knowledge' of a deponent is of little value without some indication. at least from
the context. of how that knowledge was acquired. so as to establish that the
information is admissible, and if it is hearsay, to enable its weight to be
evaluated." (my emphasis)
[46] Ngcobo CJ further in this matter held:
"An indication of how the alleged knowledge was acquired is necessary to
determine the weight, if any, to be attached to the evidence set out in the
affidavit. The key question is whether the deponent would, in the ordinary
course of his or her duties or as a result of some other capacity described in
the affidavit, have had the opportunity to acquire the information or
knowledge alleged."
[47] In the matter before court Mr Irving does not identify the source of his knowledge
or inform the court of his duties. Personal knowledge can accordingly not simply
be assumed.
[48] Where a deponent to a Founding Affidavit lacks personal knowledge of the
material facts, the reliability and evidentiary value of the "evidence" placed
before the court are compromised. In trial proceedings, a court must remain
14 President of the Republic of South Africa v M & G Media Ltd 2011 (2) SA 1 (SCA); 2011 (4) BCLR
363 (SCA) para 38
14
vigilant in managing witness testimony and ensuring strict compliance with the
rules of evidence. The same vigilance is required in motion proceedings.
However, the court must guard against adopting an unduly formalistic approach.
[49] Although the Applicant was authorised by a resolution to launch the proceeding,
the competence of a deponent to depose to an affidavit must nevertheless still
be assessed.
[50] A resolution authorising a deponent to act on behalf of a company does not, by
itself, establish that the deponent has personal knowledge of the material facts
necessary to sustain the Applicant's case. Where such knowledge is absent, the
authority conferred by the resolution cannot cure the evidentiary deficiencies in
the affidavit.
[51] The offer to purchase15 forming the basis of the relief was apparently
concluded in January 2000 between the deceased and the Applicant
represented by Mr. Phil Hemsley, who is both a director of the Applicant and
the deponent in the intervention application to the sequestration proceeding.
[52] Mr Hemsley, apart from the deceased, is the sole source of information on
the property's acquisition, its terms, purchase price, and reasons for the
transfer delay.
[53] Although the resolution authorising Mr. Irving to initiate and execute all
documentation for the transfer application was duly signed by Mr. Phil
Hemsley, 16 no explanation is provided regarding why Mr. Hemsley, who is a
party to the offer to purchase, did not personally depose to the Founding
Affidavit. It is respectfully submitted that Mr. Hemsley would have been best
positioned to provide direct evidence concerning the aforementioned offer.
15 FA3 at A20
16 Annexure FA1 at A18
15
[54] When an original party to a contract is available but fails to depose to an
affidavit, any third person with personal knowledge of the facts may depose
to it, though the statement risks being dismissed as hearsay unless properly
substantiated. A court may draw an adverse inference or question why the
best evidence (the actual party to the contract who is available) was withheld
in favour of the third party (general manager).
[55] Although a Group General Manager can accordingly depose to an affidavit
such deponent cannot simply state his employment position, but he must
establish his authority and personal knowledge. The manager had to
explicitly state why he claims to have personal knowledge - the source of his
knowledge. He had to state that he has in his possession and is in charge of
the relevant company books and financial records. Mr. Irving failed to do this.
[56] In Shackleton Credit Management (Pty) Ltd v Microzone Trading 88 CC &
another 2010(5) SA 112 (KZP, para 13, it was held that:
"[F]irst-hand knowledge of every fact which goes to make up the applicant's
cause of action is not required, and that where the applicant is a corporate
entity, the deponent may well legitimately rely on records in the company's
possession for their personal knowledge of at least certain of the relevant
facts and the ability to swear positively to such facts. "
[57] I was referred by Applicant's counsel to the matters of Rees17 and Colbec16
as proposition that a General Manager has personal knowledge. However,
in Rees reference was made to the case of Maharaj where Corbett JA stated:
"Generally speaking, before a person can swear positively to facts in legal
proceedings they must be within his personal knowledge. For this reason the
practice has been adopted, both in regard to the present Rule 32 and in
regard to some of its provincial predecessors (and the similar rule in the
magistrates' courts), of requiring that a deponent to an affidavit in support of
magistrates' courts), of requiring that a deponent to an affidavit in support of
17 Rees & Another v Investec Bank Ltd 2014(4) SA 220 (SCA) at 225H-226G;
18 Colbec Estates (Pty) Ltd & Another 2009(3) SA 384 (T) at 391 F-3928
16
summary judgment, other than the plaintiff himself, should state, at least, that
the facts are within his personal knowledge (or make some averment to that
effect), unless such direct knowledge appears from other facts state. The
mere assertion by a deponent that he "can swear positively to the facts" (an
assertion which merely reproduces the wording of the Rule) is not regarded
as being sufficient, unless there are good grounds for believing that the
deponent fully appreciated the meaning of these words ... In my view, this
is a salutary practice ... " (my emphasis)
[57.1] In the matter before me the deponent did not disclose the
source/s of his knowledge (company records or his dealings with
the affairs of the Company) or what specifically his duties boiled
down to.
[58] In this matter, there is a resolution to proof Mr. Irving's authority, but the basis
for his personal knowledge remain non-disclosed.
[59] In Barclays National Bank Ltd v Love 19 the court, in the context of summary
judgment, held that "[a]lthough it is not necessary for the deponent to state
reasons in the affidavit for his assertion that the facts are within his own
knowledge he should ... at least give some indication of his office or capacity
which would show an opportunity to have acquired personal knowledge of
the facts to which he deposes."
[60] The principle in Love above is sound: a deponent must show how the alleged
knowledge was acquired and establish the basis on which that knowledge
can properly be regarded as personal.
[61] The basic approach is that a deponent must either state under oath that the
facts fall within his personal knowledge, or that knowledge must appear from
the other facts.
[62] Nothing turns on the deponent's description of his office; whether he is the
managing director, a director, an alternate director, the secretary, the general
manager or a manager of the company. The fundamental principle remains
19 1975 (20) SA 514 (D)
17
that the facts and the cause of action which are verified must fall within his
personal knowledge.20
[63) Mr. Irving's affidavit fails to candidly and frankly address and identify the
source/s of his personal knowledge as Group General Manager.
[64) Mr Irving also did not address the elephant in the room, why Mr. Hemsley
acting on behalf of the Applicant in 2000, and the only and best source of
evidence did not depose to the Founding Affidavit.
[64.1] Additionally, Mr. Irving failed to:
[64.1.1]
[64.1.2)
[64.1.3)
allege any communication with Mr. Hemsley,
to specifically address why Mr. Hemsley, who
constituted the best source of information, did not
depose to the Founding Affidavit and/or
to annex a Confirmatory Affidavit by Mr. Hemsley;
[65) The Applicant elected to present its evidence via Mr. Irving without any
explanation why Mr. Hemsley who represented the Applicant in 2000 (a party
to the offer to purchase in 2000) was not used. There is also no Confirmatory
Affidavit by Mr. Hemsley. This effects the probative value of the evidence.
Mr. Hemsley would have been best positioned to provide direct evidence
concerning the aforementioned offer.
[66) The interwoven thread of personal and hearsay evidence in the Founding
Affidavit, without specifically identifying the hearsay evidence from the
deponent's personal knowledge leads to uncertainty about whether the
deponent's knowledge is indeed personal.
[67) The fact that Mr Hemsley did not provide an affidavit is significant, as hearsay
evidence cannot be considered without an explanation for the absence of the
direct evidence.
20 Northern Cape Scrap & Metals (Edms) Bpk v Upington Radiators & Motor Graveyard (Edms)
Bpk 1974 (3) SA 788 (NC) 794B; Jeffrey v Andries Zietsman (Edms) Bpk 1976 (2) SA 870 (T)
872C;
18
[68] The assertion by the deponent of personal knowledge alone is insufficient to
be determinative; the court does not simply endorse all claims of personal
knowledge without critical evaluation.
[69] The Applicant's cause of action is reliant on an offer to purchase in 2000
between the deceased and Mr. Hemsley.
[70] Mr Hemsley, apart from the deceased, is the sole source of information on
the property's acquisition, its terms, purchase price, and reasons for the
transfer delay.
[71] In Director of Hospital Services v Mistry21 the court put the position as follows:
"When, as in this case, the proceedings are launched by way of notice of
motion, it is to the founding affidavit which a Judge will look to determine
what the complaint is . . . and as been said in many other cases: "... an
applicant must stand or fall by his petition and the facts alleged therein and
that, although sometimes it is permissible to supplement the allegations
contained in the petition, still the main foundation of the application is the
a/legation of facts stated therein, because those are the facts which the
respondent is called upon either to affirm or deny.'
[72] The Applicant, who bears the burden of proving the transfer of property, in
motion proceedings, had to determine the most appropriate manner in which
to present its evidence. By choosing to present the evidence through Mr.
Irving, without providing an explanation for why Mr Hemsley could not do so,
the probative value of the evidence is affected.
[73] As the deponent, Mr. Irving was not in a position to provide the most direct
(best) evidence, which Mr. Hemsley could have supplied. Although Mr.
Hemsley, a representative referenced in the offer to purchase, had signed
the resolution. He did not depose to the Founding Affidavit. No adequate or
21 1979 ( 1) SA 626 (A) at 635H-636B
19
credible explanation has been offered for Mr. Hemsley's absence as
deponent.
[74] In this matter the deponent's own papers cast doubt on the correctness of
the allegation of personal knowledge.22
[74.1] The deponent does not distinguish between hearsay evidence
and facts within his personal knowledge.
[74.2] The basis for his personal knowledge is also not dealt with. It is
clear that Mr. Irving is a Group General Manager of the Applicant
not a director. When this position was assigned to him, also
remains undisclosed.
[74.3] The fact that Mr. Irving also failed to address the conversion of
Notefu/1 1122 CC to Notefu/1 1122 (Pty) Ltd to establish locus
standi and the fact that payments were made by Advancenet
(Pty) Ltd which only commenced trading in 2002 also raise
serious concern about Mr. Irving's personal knowledge.
[74.4] Even the exact purchase amount of R139 514.57 is not depicted
in the offer to purchase, but rather a rounded off figure of
R139 515.00. The said difference remains unexplained.
[74.5] The fact that the offer to purchase is undated was also not
addressed in the papers.
[75] The aforesaid loopholes in the Applicant's case are material. Essential
evidence had not been pleaded in the Founding Affidavit and created serious
concern about the deponent's knowledge of the agreement of sale in 2000. I
am accordingly of the firm opinion that another court will not come to a different
finding in respect of personal knowledge of the Applicant.
22 Northern Cape Scrap & Metals Edms Bpk v Upington Radiators and Motor Graveyard (Edms)
Bpk 1974 (3) SA 788 (NC) 794 0-E
20
am accordingly of the firm opinion that another court will not come to a different
finding in respect of personal knowledge of the Applicant.
SECOND GROUND OF APPEAL - LACK OF LOCUS ST ANDI
[76] In its second ground of appeal the Applicant argued that the court erred in
finding that the Applicant's lacked locus standi by employing a time-based
analysis on the dates of the Applicant's incorporation.
[77] Additionally, the Applicant claims that the court erred in law and/or fact to
recognize that:
[77 .1] the evidence conclusively demonstrated that payment of the
purchase price was affected by Advancenet (Pty) Ltd a related
company within the group.
[77.1.1]
23 Clause 1.1 at A20
If the evidence did, without doubt, demonstrate
that payment of the purchase price was affected
by Advancenet (Pty) Ltd the following facts would
not have presented themselves:
[77.1.1.1]
[77.1.1.2]
[77.1.1.3]
The Offer to Purchase23 reflected
that the purchaser - Notefu/1 1122
(Pty) Ltd paid the purchase price to
the deceased - Advancenet (Pty)
Ltd is not referenced.
The purchase price of R139 515.00
had been paid. Yet, Mr. Irving in the
Founding Affidavit stated that the
purchase price was R139 514.57.
The liquidator stated that
Advancenet (Pty) Ltd began trading
21
24 A69
[77.1.2]
in 2002 and did not exist in 2000. It
is part of a group of companies and
was first registered as Firetrade 26
CC. The payment to the deceased
came from a Standard Bank account
active since August 1989. Mr. Irving
elected not to deal with this crucial
evidence in the Applicant's Founding
Affidavit.
The liquidator noted that the municipal accounts
remained in the deceased's name24, but
acknowledged that Advancenet CC or Advancenet
(Pty) Ltd had paid these accounts.
[77.2] it was never the intention that the property will be acquired by
Mr. Hemsley.
[77.2.1]
[77.2.2]
[77.2.3]
However, in an email from Mr. Frederick Rall to Mr.
Irving dated 26 January 2015, regarding the said
property the following was relayed:
"Thom has asked me if we know what is
happening with the transfer of the flat Phil
bought for/from him." (my underlining)
The reference to Thom must be to the deceased
and Phil to Mr. Hemsley.
The phrase "transfer of the flat Phil bought for/from
him" is problematic, as it ambiguously suggests
Mr. Hemsley bought the property either for or from
the deceased - two mutually exclusive scenarios.
It is also evident that the flat was bought for/from
22
Thom by Mr. Hemsley. No mention was made that
the Applicant had purchased the property to be
transferred.
[77.3] the judgment ignores the collaborative steps taken in the
process of the conversion ratifying the transaction.
[77.3.1] Mr. Irving on the Applicant's behalf, being dominus
litis - failed to deal with the conversion of the
corporate entities in his Founding Affidavit. The
deponent himself in setting out the Applicant's
cause of action had ignored and not referenced
the steps taken in the process of conversion. This
aspect was not addressed in Mr. Irving's Founding
Affidavit, exposing the Applicant's lack of locus
standi and questioning the deponent's personal
knowledge. If the deponent himself negated to
plead the process of conversion and only
attempted to rectify such an omission in his
Supplementary Affidavit to cure the Applicant's
lack of locus standi, this court can only question
the deponent's knowledge of the sale transaction
and the conversion process.
[77.4] the court failed to recognize that section 21 of the Company's
Act allows ratification of pre-incorporation contracts deeming
them binding if adopted.
[77.4.1] The answer to this proposition is that Applicant's
case was simply never reliant on the ratification of
a pre-incorporation contract (an agreement made
in writing by a person on behalf of a proposed
company before it was officially registered). It was
founded on an agreement of sale of the property
entered during January 2000. The evidence as set
out in the Founding Affidavit rejects this argument.
23
The purpose of the Applicant's application is best
set out in its own wording in paragraph 12 of the
Founding Affidavit which states:
"12. This is an application whereby the applicant
seeks:
12. 1. specific performance pursuant to a written
agreement and ancillary relief thereto
following from the conclusion of a written
agreement of purchase and sale concluded
between the applicant and the deceased,
being Thomas Charles Barker ("the
deceased''), in January 2000."
[77.5] the conversion of the companies was fully explained in a
supplementary affidavit evidencing statutory succession of
rights, which were not extinguished by the change in form of the
corporate entities involved.
[77.5.1]
[77.5.2]
The conversion had to be addressed and
explained in the Founding Affidavit as it effected
the Applicant's locus standi. To do so in a
Supplementary Affidavit is simply insufficient.
In Mars Incorporated v Candy World (Pty) Ltd
265/89) [1990] ZASCA 149; 1991 (1) SA 567 (AD);
[1991} 2 All SA 25 (A) (28 November 1990), the
Court said the following:
"In accordance with the general rule that it is for
the party instituting proceedings to allege and
prove that it has locus standi, the onus of
establishing that issue rests upon the applicant."
24
[77.5.3) It is trite that in motion proceedings, the Applicant
must establish locus standi in the Founding
Affidavit and not in the Replying Affidavit.25
[77.6) the deceased conduct and cooperation into 2015 reaffirmed the
purchaser's identity, consistent with the group's intention from
inception that the corporate vehicle of the Applicant would hold
title in the property.
[77.6.1) The events of 2015 were not pleaded and
disclosed in the Founding Affidavit. The
Applicant's cause of action was furthermore solely
reliant on the sale agreement of the property in
January 2000.
CONSIDERATION LACK OF LOCUS STAND/
[78) A preliminary procedural question that has to be considered in the judicial
process is whether the parties to the litigation possess the necessary
standing or legal capacity to litigate.26
[79) Legal standing is not only a procedural question but is also a question of
substance; it concerns the sufficiency and directness of a litigant's interest in
proceedings which warrants his or her title to prosecute the claim asserted.
[80) The fact of standing must appear from the initiating process.27
[81) The general rule is that it is for the party instituting proceedings to allege and
prove its locus standi. It must accordingly appear ex facie the founding
25 Giant Concert CC v Minister of Local Government, Housing and Traditional Affairs KwaZulu-Natal
and Others, 2011 (4) SA 164 KZP at para 16)
26 Watt v Sea Plant Products Bpk 1998 4 All SA 109 (C)113-114; 1999 4 SA 443 (C).
27 Nienaber v Union Government 1947 1 All SA 244 (T); 19471 SA 392 (T); United Methodist Church
of SA v Sokufundumala 1989 4 SA 1055 (0)
25
papers that the parties have the necessary legal standing (locus standi in
iudicio).28
[82] In Langeberg Ko-operasie Bpk v Folscher and Another 1950 (2) SA 618 (CJ
an application was brought by one Whitehead. In his founding affidavit he
described himself as the secretary of the Applicant. After an objection has
been taken of no locus standi Whitehead filed another affidavit saying that
he had been described as secretary in error and that he was, in fact, the
general manager of the Applicant. At pages 620 - 21 of the case N Thompson
J said:
"In my view he (Whitehead) should not be allowed at this stage to amend his
first affidavit in such a vital respect, and after the point that he had no locus
standi had been taken by the respondent... However that may be, it seems
to me to apply for an amendment at this stage is too late, and I am not
prepared to accede to the amendment being made in an endeavour to right
the question of locus standi. In a recent case, namely the case of Geanotes
v Geanotes 1947(2) SA 512 (CJ at 515 HERBSTEIN AJ quoted with approval
the case of Pountas' Trustees v Lahanas 1924 WLD 67, a decision of
KRAUSE J, where he said: I think it has been laid down in this Court
repeatedly that an applicant must stand or fall by his petition and the facts
alleged therein, and that, although sometimes it is permissible to supplement
the allegations contained in the petition, still the main foundation of facts of
the application is the allegation of facts stated therein, because those are the
facts which the respondent is called upon either to affirm or deny. '
HERBSTEIN AJ went on to say:
'It seems to me that correctly state the practice of this Court.'
I agree with the statement of HERBSEIN AJ. It seems to me that I should not
allow the affidavits which were filed yesterday to influence my decision on
28 Mars Incorporated v Candy World (Pty) Ltd 1991 (1) SA 567 (A) p. 575
Kommissaris van Binnelandse lnkomste v Van der Heever [1999) 3 All SA 115 (A), 1999 (3) SA
Kommissaris van Binnelandse lnkomste v Van der Heever [1999) 3 All SA 115 (A), 1999 (3) SA
1051 (SCA) para 10
Four Wheel Drive Accessory Distributors CC v Rattan NO 2019 (3) SA 451 (SCA) para 7
26
this point that there was no locus standi as shown by the applicant, and as
the matter stood when the objection was taken, because it is quite clear to
me that an application by a secretary without anything more being said was
not sufficient to show authorisation to embark upon litigation by the
applicant."
[83] In the Fourth Respondent's Answering Affidavit she states that it is clear from
a CIPC report and search that the Applicant did not exist in 2000. During
2000 it was a closed corporation named NOTEFULL 1122 CC with
registration number 2000/007298/23. 29 The conversion from a closed
corporation to a company only took place on 21 February 2003.30
[84] Subsequently, the Applicant delivered a Supplementary Affidavit to deal with
what it termed the "corporate identity' issues.
[85] The connections between Notefu/1 1122 CC, Notefu/1 1122 (Pty) Ltd, the
deceased, and Advancenet (Pty) Ltd - which ought to have been addressed
in the Founding Affidavit - were only dealt with in the Supplementary Affidavit.
[86] The connections referred to herein before were within the knowledge of the
Applicant at the time of launching the application. The Applicant had elected
to pursue motion proceedings accordingly the Applicant had to take care that
all the material evidence was before the court in the form of an affidavit. The
Applicant had delivered a Supplementary Affidavit in which it stated that it
had addressed issues raised by the liquidator - Fourth Respondent.
[87] The sale agreement in respect of the immovable property, between the
purchaser and the deceased (seller), forms the foundation of the relief
sought. The Applicant relies upon the written sale agreement being
completed in January 2000. As was alluded to before the Applicant did not
exist in 2000 and Mr. Hemsley also only became a director of the Applicant
in May 2003. 31 Mr. Hemsley's authority to conclude the sale on the
29 Annexure AA2 at L 133
30 L 136
31 Para 12.2 at A10.
27
company's behalf remained unexplained. The Applicant had elected not to
deal with the crucial nexus between Notefull 1122 Close Corporation and
Notefull 1122 (Pty) Ltd. The Applicant's entitlement to litigate must have
been addressed in the Founding Affidavit.
[88] To simply state that the connection issues were raised by the Liquidator and
subsequently addressed in a Supplementary Affidavit is insufficient. The
Applicant's right to litigate - based upon the written offer to purchase, in which
the Applicant was depicted as the purchaser, is vital to its entitlement to the
relief sought.
[89] The Founding Affidavit did not establish the Applicant's right to litigate.
[90) In Director of Hospital Services v Mistry32 the court put the position as follows:
"When, as in this case, the proceedings are launched by way of notice of
motion, it is to the founding affidavit which a Judge will look to determine
what the complaint is .. . and as been said in many other cases: "... an
applicant must stand or fall by his petition and the facts alleged therein and
that, although sometimes it is permissible to supplement the allegations
contained in the petition, still the main foundation of the application is the
allegation of facts stated therein, because those are the facts which the
respondent is called upon either to affirm or deny. '
[91) The parties to the offer to purchase is reflected as the deceased (seller) and
Notefull 1122 (Pty) Ltd as purchaser. However, the said offer to purchase is
undated and signed by Mr. Hemsley on the Applicant's behalf.33 Mr. Hemsley
only became a director of the Applicant during May 2003. The Applicant must
have had:
[91.1] knowledge of all of the aforesaid at the time of initiating the
application,
32 1979 ( 1) SA 626 (A) at 635H-636B
33 A23
28
[91.2] had to disclose and deal with this information but elected not to
do so.
[92] In its Supplementary Affidavit, the Applicant sought to clarify locus standiwith
the intention of addressing a significant deficiency in the evidentiary support
for its claim.
[93] The Applicant's locus standi was only addressed in a Supplementary
Affidavit, although the Applicant must have known these facts at the time of
Mr. Irving having deposed to the Founding Affidavit.
[94] The discrepancies as to the Applicant, being a close corporation, and then a
company, the overlapping of the various other companies, the reference to
both Mr.Hemsley and Mr. Irving, indiscriminately, and at least two offers to
purchase, are all material and relevant concerns to question whether the
Applicant had the necessary locus standi.
[95] Similarly I am of the firm opinion that another court will not come to another
conclusion in respect of the Applicant's Lack of Locus Standi as set out in
the Founding affidavit. This ground of appeal cannot succeed.
THIRD GROUND OF APPEAL - CONDUCT SINCE 2015 NOT A NEW CONTRACT
[96] Mr. Irving on behalf of the Applicant failed to properly address the alleged
2015 offer, in his Founding Affidavit.
[97] This failure to address the 2015 Offer to Purchase must be seen in light of
the fact that the Applicant's case was reliant on the Offer to Purchase which
was concluded in 2000. 34
[98] Additionally, the further discrepancies as to the Applicant, being a close
corporation, and then subsequently converting to a company, the
34 Paragraph 12 dealing with purpose of the application at A 10.
29
overlapping by the various other companies - Advancenet (Pty) Ltd, the
reference to both Mr. Hemsley and Mr. Irving, indiscriminately in the
Supplementary Affidavit, and at least two offers to purchase, were never
addressed in me Founding Affidavit.
[99] The aforesaid discrepancies were questioned by the Court as the Applicant
was required to make out its case, in full, in the Founding Affidavit, which the
Applicant clearly failed to do.
[100] The Applicant attempted to address the material omissions outlined here in
before only in its Supplementary Affidavit. However, the 2015 offer to
purchase was not pleaded in the Founding Affidavit. The reason clearly must
have been that the Applicant's case stems from the offer to purchase in 2000
and not in 2015.
[101] All steps taken in 2015 - termed by the Applicant as implementation
measures that facilitated performance in 2000 were unfortunately not
addressed or pleaded in the Founding Affidavit. The Applicant intended to
cure the omission of crucial evidence from its Founding Affidavit by
addressing them in its Supplementary Affidavit which resulted in more
confusion and questions.
[102] Another court will also not find that the steps taken in 2015 facilitated
performance and transfer of the 2000 agreement which was the foundational
bargain. This was simply not the Applicant's pleaded case. The 2015 steps
were not dealt with in the Applicant's Founding Affidavit and was not the case
which the Respondents had to meet.
GROUND 4 - INTER ALIOS ACTA
[103] The Applicant argues that the liquidator - Fourth Respondent - was a
stranger to the sale agreement.
30
[104] The Fourth Respondent is the only party opposing the transfer of the property
as there was no opposition by the executor - the First Respondent.
[105] The Applicant pleaded that the liquidator's right to dispute the transaction is
limited by the operation of the doctrine res inter alios acta, inter alia on
account of the following: -
[105.1]
[105.2]
[105.3]
the liquidator's opposition was premised entirely on inferential
facts, which in themselves were individually insufficient to
impugn the sale in circumstances where both parties (the
deceased seller and the Applicant as purchaser) insisted on its
validity;
the parties to the sale consistently affirmed the bargain and the
liquidator cannot in law recast the parties' transaction from the
sidelines;
the Applicant's payment of the purchase price and the rates and
taxes over the property for many years reinforces the validity of
the sale;
[106] The Fourth Respondent as the liquidator of Thomas Maxwell Kitchens (Pty)
Ltd is a professional appointed to wind up the company. Her core function is
to take custody of the company's asserts, convert them into cash, investigate
the company's financial affairs and to distribute the proceeds fairly to the
creditors according to statutory legal priorities.
[107] The immovable property, which the Applicant wanted transfer of is the sole
and biggest asset in the company's estate.
[108] The Fourth Respondent, as the liquidator, accordingly, has a duty to
investigate the sale of the immovable property to the Applicant as the transfer
of the immovable property will be to the prejudice of the body of creditors as
a whole.
31
[109) The Applicant as liquidator has a definite interest in this matter, namely to:
[109.1)
[109.2)
challenge the Applicant's version and
to place facts before the court which was omitted by the
Applicant in its Founding Affidavit.
[110) Initially, the Applicant had also elected not to join the Fourth Respondent to
these proceedings despite knowing of the Liquidator, as the Applicant itself
had intervened the sequestration application. Only after the Fourth
Respondent had intervened in the transfer application, did the Applicant
disclose material issues which had to be in the Founding Affidavit in a
Supplementary Affidavit.
[111] Accordingly, the opposition by the Fourth Respondent was both necessary
and justified.
[112) The opposition by the Fourth Respondent is further necessary and justified,
as the property in question, is the only asset in the now insolvent estate of
the deceased, and therefore, the creditors, have a claim thereto.
[113) The Applicant's claim is based upon an agreement of sale entered into during
January 2000.
[114) In the offer to purchase, Annexure FA 3.2, the following appears which create
uncertainty relating to the sale of the property, namely:
[114.1)
[114.2)
the seller is depicted as the deceased and the purchaser as
Notefu/11122 (Pty) Ltd. However, the latter company only came
into existence on 21 February 2003.
Notefu/1 1122 (Pty) Ltd was represented by Mr. Phil Hemsley,
who only became a director of the company in May 2003.
Mr. Hemsley could not in 2000 have bound the company who
came into being only in 2003. His authority to conclude the sale
32
[114.3]
[114.4]
[114.5]
on the company's behalf during January 2000 remains
unexplained.
The purchase price was R139 514.57, although the offer depicts
R139 515.00.
The deceased was paid the purchase price, but no proof was
provided.
Advancenet (Pty) Ltd who paid the purchase price and the
municipal rates and levies in respect of the property only started
to trade in 2002. Only in the Applicant's Supplementary Affidavit
did the Applicant explain that:
[114.5.1] Advancenet was registered in August 1987 and
traded as Fire Trade 26 CC. Fire Trade underwent a
name change to Micro Figurations and thereafter to
Advancenet CC, which was later converted into
Advancenet (Pty) Ltd (company).
[114.5.2] The banking account from which payment was
made had been opened since August 1989.
[114.5.3] Advancenet (Pty) Ltd paid the purchase
consideration, on behalf of the Applicant, a company
within the group of companies.
[115] Essential elements of the Applicant's case are lacking in its Founding
Affidavit namely the contracting party's identity and locus standi. The failure
of Mr. Hemsley, as a representative party to the offer to purchase, despite
signing the resolution to institute proceedings, to depose to the Founding
Affidavit remains unexplained and is questioned. Mr. Irving's contradictory
evidence as alluded to here in before also raises concerns about his lack of
knowledge of what occurred. Mr. Irving also failed to explain why Mr.
33
Hemsley could not himself provide the Founding Affidavit as evidence or a
Confirmatory Affidavit.
[116] The aforesaid omitted and crucial evidence from the Founding Affidavit and
the Applicant's attempt to cure the defects in its Supplementary Affidavit
clearly raised issues which the liquidator acting on the creditors' behalves
had to challenge.
[117] Another court will not come to another conclusion regarding to the liquidator's
challenge of the sale agreement. To the contrary the liquidator has a
statutory duty to act in the creditors' best interest by investigating its financial
affairs and taking control of the company's assets. Had the liquidator not
acted and challenged the sale the liquidator could have been removed by
the Master or court and could also suffer personal financial liability for any
losses.
[118) This opposition by the Respondent is further necessary and justified, as the
property in question, is the only asset in the now insolvent estate of the
deceased, and therefore, the creditors, have a claim thereto.
CONCLUSION:
[119] The Applicant presented its evidence in the Founding Affidavit in an evasive
and unclear manner. This created material discrepancies and left essential
facts, necessary to sustain the cause of action, inadequately addressed. As
a result, the Applicant failed to make out a proper case for the relief sought.
[120] After the liquidator intervened, the Applicant sought, by way of a
Supplementary Affidavit, to cure the defects in its Founding Affidavit. That
attempt did not remedy the material omissions; rather, it underscored that
essential facts had not been placed before the Court from the outset.
[121] Having considered each of the four grounds for leave to appeal, I am not
persuaded that another court would reach a different conclusion or that there
34
is a compelling reason for leave to be granted. The application for leave to
appeal must therefore be dismissed.
(122) In the result, I make the following order:
Order
1 . The Application for Leave to Appeal is dismissed with costs on a party
and party scale inclusive of counsel' es on scale B.
For the Applicant:
For the
Fourth Respondent:
S VAN ASWEGEN
ACTING JUDGE OF THE HIGH COURT
PRETORIA
Adv JC Viljoen
jcv.law@mweb.co.za
083 289 5120
Instructed by Fred Rall Attorneys Inc
jswart@rwl.co.za
012 362 8990
Adv Z Schoeman
ziaan@webmail.co.za
072 123 2614
Instructed by Tintingers Incorporated
bpotqieter@tinqtinqers.co.za
012 346 7275
35