About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2014
>>
[2014] ZAWCHC 80
|
|
African National Congress v Steenkamp N.O and Others (12036/2013) [2014] ZAWCHC 80 (30 May 2014)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(WESTERN CAPE
DIVISION, CAPE TOWN)
Case
no: 12036/2013
DATE:
30 MAY 2014
AFRICAN NATIONAL
CONGRESS
.....................................................................
Applicant
v
JURGENS JOHANNES
STEENKAMP N.O
...........................................
First
Respondent
HASSEN KAJIE
N.O
............................................................................
Second
Respondent
(in their
capacities as the duly appointed joint trustees of the
insolvent estate
of the Kebble Buitendag Investment Trust)
ANNA FRANCINA
VENTER
N.O.
......................................................
Third
Respondent
RAINOTES
BANTUBONKE NDUNA N.O
......................................
Fourth
Respondent
JOHANNES
FREDERICK KLOPPER N.O
........................................
Fifth
Respondent
(in their
capacities as the duly appointed joint trustees of the
insolvent
deceased estate of Roger Brett Kebble)
A. K. AMOS
N.O.
.................................................................................
Sixth
Respondent
THE MASTER OF THE
WESTERN CAPE
HIGH COURT, CAPE
TOWN
.......................................................
Seventh
Respondent
Court: Justice J
Cloete
Heard: Tuesday,
29 April 2014
Delivered:
Friday, 30 May 2014
JUDGMENT
CLOETE J:
Introduction
[1] The applicant
seeks an order expunging the claim of the trustees of the insolvent
deceased estate of Roger Brett Kebble (‘the
Kebble trustees’)
of R14 432 576.64 which was proven in the insolvent estate of the
Kebble Buitendag Investment Trust (‘the
KBIT’) on 25 July
2007.
[2] The third to
fifth respondents, who are the Kebble trustees, oppose the relief
sought. The first and second respondents (‘the
KBIT trustees’)
abide the court’s decision but have placed certain relevant
facts before the court on affidavit. The
sixth respondent (a
magistrate at Stellenbosch who presided at the creditors meeting at
which the claim was proven) and the seventh
respondent (the Master)
also abide.
[3] The Kebble
trustees contend that:
3.1 the applicant
has no locus standi to seek the relief;
3.2 the application
is a mischievous and misguided attempt by the applicant to escape
liability in the action instituted against
it on 21 January 2008 by
the KBIT trustees in the South Gauteng High Court (‘the pending
action’) to set aside dispositions
totalling R627 286.50 which
were allegedly made to the applicant by the KBIT (duly represented by
the late Kebble) between 30 May
2005 and 10 June 2005, in terms of s
26(1)(b) of the Insolvency Act 24 of 1936 (‘the
Insolvency
Act&rsquo
;); and
3.3 even if granted,
the order sought will not assist the applicant in the pending action.
Background
[4] The late Kebble
(‘Kebble’) passed away during September 2005. Following
his death certain companies which he controlled
were liquidated. His
deceased estate was sequestrated on 25 April 2006, and the Kebble
trustees were appointed by the Master on
11 September 2006.
[5] According to the
Kebble trustees, insolvency enquiries were held into the affairs of
certain of those companies as well as Kebble’s
estate. These
were either accompanied or followed by forensic investigation. The
results indicated, in broad terms, that Kebble
had defrauded the JCI
Group and Randgold of approximately R2.76 billion. The JCI Group has
proved claims in the Kebble estate totalling
some R80 million and
Randgold has proved claims totalling approximately R2.68 billion.
[6] Further, the
forensic investigation indicated that, of the defrauded funds,
Kebble, either personally or through entities controlled
by him (one
of which was the KBIT) made donations, and paid certain expenses, of
both the applicant and the ANC Youth League (‘the
ANCYL’)
and purchased motor vehicles and made donations to members of the
applicant and the ANCYL. Kebble paid an amount
of R14 432 576.64 to
the KBIT, and from there channelled R562 286.50 to make donations and
pay expenses of, amongst others, the
applicant. [The reason for the
discrepancy between the amounts of R562 286.50 and the claim of the
KBIT trustees of R627 286.50
is unclear, but it is common cause that
the KBIT trustees claim R627 286.50 in the pending action.]
[7] The KBIT was
provisionally sequestrated at the instance of the Kebble estate on 11
May 2007 and a final order was granted on
11 June 2007. The KBIT
trustees were appointed by the Master on 21 August 2007. The
effective date of the KBIT’s sequestration
is 11 May 2007 in
accordance with
s 10
of the
Insolvency Act.
[8
] The first
creditors meeting of the KBIT estate was held before the sixth
respondent on 25 July 2007. The Kebble trustees submitted
their claim
of R14 432 576.14 in terms of
s 44
of the
Insolvency Act and
it was
admitted to proof by the sixth respondent.
[9] During January
2008 the KBIT trustees instituted the pending action against the
applicant in the South Gauteng High Court. They
seek an order setting
aside the dispositions made to the applicant on the basis that they
were dispositions without value in terms
of
s 26(1)(b)
of the
Insolvency Act, having
been made in the two year period prior to the
KBIT’s sequestration. It is common cause that, in accordance
with
s 26(1)(b)
aforesaid, if the KBIT trustees are able to prove
that the dispositions were so made, the applicant will have to prove
that, immediately
after they were made, the KBIT’s assets
exceeded its liabilities, in order to avoid the dispositions being
set aside. The
applicant is defending the pending action. In short,
it denies that any such payments were made to it and that, if it is
found
that they were so made, the payments do not constitute
dispositions without value as contemplated by
s 26(1)(b).
This court’s
jurisdiction and the applicant’s locus standi
[10] In the present
proceedings the applicant seeks to expunge the proven claim of the
Kebble trustees in the insolvent estate of
the KBIT on two main
grounds, namely:
10.1 the claim does
not comply with the requirements of
s 44(4)
of the
Insolvency Act in
that the Kebble trustees failed to prove the claim by means of an
affidavit by a person fully cognisant of the nature and particulars
of the claim;
10.2 in any event,
the cause of action in the claim documentation of the Kebble trustees
is bad, or, at the very least, is suspected
by the applicant not to
be genuine on reasonable grounds, and the proven claim should thus be
expunged.
[11] In advancing
these contentions, the applicant proceeds from the premise that it is
an ‘interested person’ in the
insolvent estate of the
KBIT. The interest alleged by the applicant was initially based on
two grounds, namely that it had become
a creditor of the insolvent
estate of the KBIT after its sequestration (this has fallen away) and
that in any event it has a ‘substantial
interest’ in the
estate. The applicant now persists on the latter ground only.
[12] The
‘substantial interest’ is alleged to lie in the advantage
which the applicant stands to gain in the pending
action in the South
Gauteng High Court if the claim is expunged. The only proven claim in
the KBIT estate is that of the Kebble
trustees. If their claim is
expunged then no claims would have been proven against the KBIT
estate. No further claims will be capable
of being proven because
those claims would have long since prescribed. Accordingly, the KBIT
estate will have no creditors. The
applicant will thus, to all
intents and purposes, be relieved of the onus to prove that,
immediately after the dispositions were
made (in the event that such
dispositions are proven) the KBIT’s assets exceeded its
liabilities. I will deal with this later
in this judgment.
[13] The applicant
contends that an additional advantage to it if the claim were to be
expunged is that the KBIT trustees will lack
the capacity to continue
their litigation against it in the pending action, given that there
will be no creditors to furnish them
with instructions. Finally, it
is contended that the applicant has a ‘direct interest’
in the insolvent estate of the
KBIT because the latter’s
trustees are litigating against it in the pending action.
[14] In claiming
that it has locus standi the applicant does not rely on
s 151
of the
Insolvency Act (the
review of any decision by the sixth respondent or
the Master), nor does it place reliance on any other section of that
Act. The
applicant instead relies on the court’s common law
power of review.
[15] In Millman and
Another NNO v Pieterse and Others
1997 (1) SA 784
(CPD) the court, in
considering review proceedings by way of action under s 151, held as
follows at 788G-789E:
‘There is a
strong presumption against the ouster or curtailment of the Court’s
jurisdiction. See Minister of Law and
Order and Others v Hurley and
Another
1986 (3) SA 568
(A) at 584A-C. The mere fact that the
Legislature has created an extra-judicial remedy is not conclusive of
the question whether
the Court’s power has been restricted. It
is in every case necessary to consider all the circumstances and then
to determine
whether a necessary implication arises that the Court’s
jurisdiction is either wholly excluded or at least deferred until
the
domestic or extra-judicial remedies have been exhausted. See Welkom
Village Management Board v Leteno
1958 (1) SA 490
(A) at 502-3.’
The Act contains no
express provision ousting the Court’s jurisdiction to hear
actions for the expungement of claims admitted
to proof at creditors’
meetings…
The Legislature was
doubtless aware that cases arise from time to time where the
expungement of a claim admitted to proof is sought
against the
background of complicated factual disputes for which the application
procedure on motion is clearly inappropriate.
Can one impute to the
Legislature the intention to exclude the Court’s power to deal
with such matters in actions and to
insist on motion procedure being
adopted (as required by s 151)? We do not think so. When one
considers that there is a presumption
operating the other way, with
the need for clear provision to rebut that presumption, it is, in our
judgment, plain that there
is no basis for holding the Court’s
power, in an action to order the expungement of a claim admitted to
proof, has been ousted
by the Legislature.’
[16] Although in
Millman the court was considering whether review proceedings on
action were competent, the principle enunciated
therein provides
guidance on a court’s common law power of review where extra
judicial remedies already exist.
[17] The present
application does not take the form of a review, but rather
declaratory relief. I will however assume, without deciding,
that
this court has jurisdiction, given also that the matter was argued on
that basis. The question which then arises is whether
the applicant
has locus standi as an ‘interested person’ for the relief
sought.
[18] The term
‘interested person’ is not defined in the
Insolvency Act,
although
the parties accept that the applicant’s ‘interest’
would have to relate to the KBIT estate.
[19] In
Attorney-General of The Gambia v N’jie
[1961] 2 All ER 504
at
511 the court held that:
‘The words
“person aggrieved” are of wide import and should not be
subjected to a restrictive interpretation.
They do not include, of
course, a mere busybody who is interfering in things which do not
concern him; but they do include a person
who has a genuine grievance
because an order has been made which prejudicially affects his
interests.’
[20] In Ex Parte
Stubbs NO: In Re Wit Extensions Ltd
1982 (1) SA 526
(WLD) at
528H-530B the court, in considering the term ‘interested
person’ in s 73 of the Companies Act 61 of 1973,
held as
follows:
‘It seems to
me to be obvious that in introducing into s 73 of the 1973 Act the
phrase “interested person” the
Legislature had in mind a
person other than a member or creditor, and intended to widen
substantially the class of people who could
make the necessary
application…It does not appear to me that anything turns on
the difference between the phrase “interested
person” in
s 73 (6) (a) and the phrase “person who appears to the Court to
have an interest” in s 420 [of the
same Act]. The distinction
is more linguistic than real…
In determining what
the Legislature meant by the phrase “interested person”,
I agree with the view of MEGARRY J as expressed
in the Roehampton
Swimming Pool case [(1968)
3 All ER 661
at 664E] that there is not
much assistance to be found in cases dealing with persons interested
in something or other
“for in the
latter class of case there is a direct grammatical link with some
specific subject-matter, and this, by reflection,
helps to explain
the nature of the interest.”
…By parity of
reasoning, authorities such as those dealing with the interest which
a person must have in the specific subject-matter
of litigation in
order to intervene therein are also not helpful…
In the Re Test
Holdings case supra [Re Test Holdings (Clifton) Ltd; Re General Issue
& Investment Co Ltd
(1969) 3 All ER 517]
it was said that the
expression “interested person” was a “phrase of
great amplitude”. I think that this
is right. But it has its
limits, and I cannot set them out more eloquently than did MEGARRY J
in the Re Roehampton Swimming Pool
case supra at 665E:
“The word
“interest” is, of course, susceptible of more meanings
than one; and, like so much of the English language,
its meaning
often has to be discerned from the context. In relation to making an
order for the revival of a defunct company, it
seems to me to be more
probable that the word refers to a pecuniary or proprietary interest
than that it embraces all matters of
curiosity or concern. After all,
those who are interested in companies are nearly always interested
financially or in a proprietary
way; the whole field is dominated by
finance.” ’
[21] In Tongaat
Paper Co (Pty) Ltd v The Master and Others
2011 (2) SA 17
(KZP) at
para [30] the court found that a person whose assets were sold by the
trustee, but who was neither a creditor nor an objector
to the
liquidation and distribution account of the estate, fell within the
ambit of “a person aggrieved” on the basis
that he had ‘a
legal interest in the decision of the Master’.
[22] Having regard
to these authorities, it is my view that to find in favour of the
applicant on this aspect would be to cast the
net of locus standi too
wide. First, the applicant denies that any payments were made by the
KBIT, either to it or its members,
or on their behalf. That being the
case, it is difficult to conceive of any interest which it might
currently have in the KBIT
estate. Had it admitted the payments, or
any of them, the situation might have been different. Second, and
this follows from the
first, on the applicant’s own version
there is no decision which has been made which has prejudicially
affected its interests;
but only one which, at best, might place an
evidentiary onus upon it in the pending action. The applicant
currently has no financial
or pecuniary interest in the KBIT estate;
nor does it presently have any direct interest of any other kind. Its
‘grievance’
lies solely in wishing to dispense with a
statutory onus that will rest upon it provided only that the KBIT
trustees prove that
the dispositions were made. I thus find that the
applicant lacks the necessary locus standi to seek the relief
claimed. However,
to the extent that I am wrong, I will also deal
with the remaining issues in dispute.
Whether there has
been compliance with
s 44
of the
Insolvency Act
[23
] There is no
dispute that the claim of the Kebble trustees which was admitted to
proof meets the requirements of
s 44(1)
of the
Insolvency Act, namely
that it is a liquidated claim which is alleged to have arisen prior
to the sequestration of the KBIT on 11 May 2007; and that the
claim
was proven timeously.
[24] The relevant
portions of subsections 44(3) and (4) of the
Insolvency Act read
as
follows:
‘(3) A claim
made against an insolvent estate shall be proved at a meeting of the
creditors of that estate to the satisfaction
of the officer presiding
at that meeting, who shall admit or reject the claim…
(4) Every such claim
shall 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…’
[25] The applicant’s
complaint is two-fold. First, the affidavit submitted in terms of s
44(4) (which was deposed to by the
fifth respondent) does not
disclose the nature and particulars of the claim. Second, the
affidavit does not set out any recognisable
cause of action.
[26] The claim
itself consists of various documents. I will highlight the most
important ones. The first is the standard form affidavit
deposed to
by the fifth respondent, with various handwritten insertions (‘the
proof of claim affidavit’). The relevant
portion thereof reads
as follows:
‘I, Johannes
Frederick Klopper NO in my capacity as Trustee of Insolvent Estate of
the late R B Kebble declare under oath
and say:
That I have personal
knowledge of the facts hereinafter stated.
That the Kebble
Buitendag Investment Trust…whose estate has been sequestrated
was at the date of sequestration and still
is justly and truly
indebted to the said creditor [i.e. the Kebble estate] in the sum of
[R14 432 576.64] being for monies paid
into bank account from R B
Kebble.
That the said debt
arose in the manner and at the time set forth in the account hereunto
annexed…
That no other person
besides the said…insolvent is liable for the said debt or any
part thereof.’
[and that no
security is held]
[27] The second
document is a power of attorney executed by the Kebble trustees in
favour of one Cindy Adriaanse authorising her
to prove the claim on
their behalf. Other formal documents follow, including the Master’s
certificate of appointment of the
Kebble trustees. Reference is made
in certain of these documents to an annexure C. That annexure is an
affidavit deposed to by
Cristina Von Eckardstein, a forensic
accountant who investigated the affairs of both the Kebble and KBIT
estates. It is now common
cause that Von Eckardstein’s
affidavit itself has nothing to do with the claim of the Kebble
trustees against the KBIT estate,
but instead relates to a different
entity, having been inadvertently and erroneously attached to the
proof of claim affidavit (which
the KBIT trustees provided to the
applicant during the course of trial preparation in the pending
action). Annexed thereto is a
schedule detailing payments made by the
late Kebble to or on behalf of the KBIT, spanning the period 1 March
2000 to 19 September
2005, and totalling a net amount of R14 432
576.64; as well as bank statements of both the late Kebble and the
KBIT reflecting
these payments.
[28] Accordingly,
although the incorrect affidavit of Von Eckardstein was included in
the claim documentation, what was nonetheless
before the sixth
respondent at the creditors’ meeting on 25 July 2007 was the
following:
28.1 a proof of
claim affidavit deposed to by one of the Kebble trustees, being duly
authorised thereto; who had personal knowledge
of the facts stated
therein; who confirmed that the KBIT estate was justly and truly
indebted to the Kebble estate in the sum of
R14 432 576.64; and who
confirmed that the debt arose in the manner and at the time ‘set
forth in the account hereunto annexed’;
as well as
28.2 a schedule of
payments made by the late Kebble to or on behalf of the KBIT over the
period 1 March 2000 to 19 September 2005
for exactly the same amount
of R14 432 576.64, as well as bank statements verifying each such
payment made.
[29] These facts are
confirmed under oath by the Kebble trustees in these proceedings, who
also confirm that:
29.1 the claim is
one as contemplated by
s 44(4)
of the
Insolvency Act; and
29.2 given that the
claim of the Kebble trustees is a claim other than one based on a
promissory note or other bill of exchange,
Form C was utilised.
[30] Form C to the
First Schedule to the
Insolvency Act reads
as follows:
‘ FORM C
AFFIDAVIT FOR THE
PROOF OF ANY CLAIM OTHER THAN A CLAIM BASED ON A PROMISSORY NOTE OR
OTHER BILL OF EXCHANGE
(SECTION
FORTY-FOUR (4))
In the Insolvent
Estate of…………………………………………………………….
.
Name in full of
creditor……………………………………………………………….
.
Address in
full…………………………………………………………………………
.
Total amount of
claim………………………….£……………………………………
.
I,
…………………………………………….declare
under oath
solemnly and sincerely declare
(1) That ………….,
whose estate has been sequestrated, was at the date of sequestration,
and still is,
indebted to……………………………………………...
in the sum of
………………………………………………………………………….
for ……………………………
(2) That the said
debt arose in the manner and at the time set forth in the account
hereunto annexed.
(3) That no other
person besides the said ……………………………………………
is liable (otherwise
than as surety) for the said debt on (sic) any part thereof.
(4) That I have/not
……………/……………
the said has not, nor has
any other person, to my knowledge on my
behalf received any security for the
his
said any debt or any
part thereof, save and except …………………………….
…………………………………………………………………………………….....
Signature of declarant……………………….
Sworn
before me on the ……………………………………day
of
Solemnly declared
……………………………………………………………………….at……………...
………………………………………
Commissioner of Oaths’
[31] A comparison
between Form C and the proof of claim affidavit shows that the latter
corresponds substantially with the former.
In addition, the payment
schedule which is included in the claim documentation (albeit
purporting to be an annexure to Von Eckardstein’s
affidavit)
sets forth the amounts allegedly paid by the late Kebble to or on
behalf of the KBIT. It should therefore have been
clear to the reader
of the claim documentation that the proof of claim affidavit, and the
various supporting documents, were aimed
at establishing proof of a
claim by the Kebble trustees against the KBIT estate in terms of
s
44(4)
of the
Insolvency Act. In
addition, the bank statements to
which I have referred themselves independently reflect the payments
made, and funds received,
as detailed in the payment schedule.
[32] Furthermore,
s
45
of the
Insolvency Act provides
as follows:
‘45 Trustee to
examine claims
(1) After a meeting
of creditors the officer who presided thereat shall deliver to the
trustee every claim proved against the insolvent
estate at that
meeting and every document submitted in support of the claim.
(2) The trustee
shall examine all available books and documents relating to the
insolvent estate for the purpose of ascertaining
whether the estate
in fact owes the claimant the amount claimed.
(3) If the trustee
disputes a claim after it has been proved against the estate at a
meeting of creditors, he shall report the fact
in writing to the
Master and shall state in his report his reasons for disputing the
claim…’
[33] On 23 August
2012, some five years after the claim had been proven, the
applicant’s attorney wrote to the KBIT trustees,
alleging that
it was invalid and advising that the applicant would object to its
inclusion in the estate liquidation and distribution
account. This
was followed by another letter from the applicant’s attorney on
11 October 2012 calling upon the KBIT trustees
to dispute the claim
in terms of
s 45(3)
of the
Insolvency Act, and
to further request the
Master to expunge and disallow the claim.
[34] The KBIT
trustees in turn called upon the Kebble trustees for representations
as to why the claim should not be expunged. Such
representations were
duly made. Included therein were new affidavits by the fifth
respondent and Von Eckardstein. The fifth respondent
explained his
error, and further that Von Eckardstein had indeed initially deposed
to the correct affidavit although he was no
longer able to locate the
original or a signed copy thereof. Von Eckardstein, in deposing to
the correct affidavit in support of
the claim, explained how the
claim arose, and relied upon the same schedule of payments and bank
statements to prove the amount
claimed.
[35] Having
considered these, and having obtained independent legal advice, the
KBIT trustees were satisfied with the explanation
of the Kebble
trustees. They also examined the claim documentation and Von
Eckardstein’s (correct) affidavit, and were similarly
satisfied
that the KBIT estate is indeed indebted to the Kebble estate in the
amount claimed.
[36] The applicant’s
response to this is merely that: (a) the explanation of the KBIT
trustees ‘[does] not take the
matter much further’; and
(b) the KBIT trustees did not disclose to the applicant precisely
what representations had been
made to them by the Kebble trustees
before the commencement of this litigation. Notably, the applicant
does not attack the explanation
of the KBIT trustees for their
decision not to request the Master to expunge the claim. Furthermore,
given that the applicant was
not an ‘interested person’
in the KBIT estate, there was no reason for the KBIT trustees to have
provided the applicant
with the details of any representations made
to them by the Kebble trustees.
[37] The applicant
relies on Marendaz v Smuts
1966 (4) SA 66
TPD in support of its
submission that the claim should be expunged due to non-compliance
with
s 44(4)
of the
Insolvency Act. In
my view, the applicant’s
reliance thereon is misplaced. First, the facts in that case are
entirely distinguishable from those
in the present matter. Second,
that court’s finding appears rather to support the case of the
Kebble trustees. At 72C-E it
was held that:
‘The decided
cases referred to show, in my view, that each case must be decided on
its own merits and that no hard and fast
rule can be laid down as to
when a presiding officer ought to be satisfied with the proof of a
claim as provided for in s 44(3)
of the Act, or as to when he should
resort to the calling of evidence as provided for in s 44(7).’
[38] The applicant
places reliance on two authorities in support of its argument that
the claim of the Kebble trustees is bad in
law. The first is Nissan
South Africa (Pty) Ltd v Marnitz NO and Others (Stand 186 Aeroport
(Pty) Ltd Intervening)
2005 (1) SA 441
(SCA) at para [23] where the
court held:
‘It follows
that the submission by first and second respondents’ counsel
that, once a bank has unconditionally credited
a customer’s
account with an amount received, the bank is required to pay the
amount to the customer on demand, even where
the customer came by
such money by way of fraud or theft, is not correct. If stolen money
is paid into a bank account to the credit
of the thief, the thief has
as little entitlement to the credit representing the money so paid
into the bank account as he would
have had in respect of the actual
notes and coins paid into the bank account.’
[39] The second is
Gainsford NO and Others v Gulliver’s Travel Bruma (Pty) Ltd
2009 JDR 0570 (GSJ). In that case the plaintiffs,
the duly appointed
liquidators of a company, had instituted action against the defendant
in terms of s 340 of the Companies Act
61 of 1973 read with
s
26(1)(b)
of the
Insolvency Act for
the setting aside of alleged
dispositions without value. Coincidentally, the late Kebble was one
of the persons who made payments
to the defendant on behalf of the
company concerned. The court found that the plaintiffs’ action
fell to be dismissed with
costs because, on the uncontroverted
evidence, it was never the intention of Kebble and the other person
who made the payments
that the monies would become the property of
the company. For this reason, it was irrelevant whether the source of
the funds from
which the payments were made was lawful or unlawful.
[40] However, regard
must also be had to the findings in Trustees, Estate Whitehead v
Dumas and Another
2013 (3) SA 331
(SCA). In that case the insolvent,
Whitehead, had run an unlawful investment scheme. He induced the
first respondent, Dumas, to
pay money into his bank account in order
to participate in the scheme. Whitehead was exposed while the money
was still in his account
and his estate was provisionally
sequestrated. As a result, the money paid by Dumas was placed under
the control of Whitehead’s
trustees. Dumas instituted an action
for enrichment against the bank where the money was placed and the
High Court found in his
favour. It was held, on the basis of the
decision in Nissan, that because Whitehead had obtained the money by
fraud, he had no
right to it. As such, Whitehead (or rather his
trustees) had no claim against the bank for the money. The Supreme
Court of Appeal
disagreed, and held that the investment transaction,
although fraudulent, was not the determining factor. Once the funds
had been
paid into Whitehead’s account the bank had become
their owner by commixtio and Whitehead acquired a contractual right
to
the payment which, upon his sequestration, was transferred to his
insolvent estate, and thus his trustees. Accordingly, the bank
had
not been enriched and Dumas had no claim to repayment on that basis.
His claim lay in delict against the trustees, based on
Whitehead’s
fraudulent misrepresentation. At para [15] the court held:
‘Where, as in
this case A causes the transfer of money from his bank account to the
account of B, no personal rights are transferred
from A to B; what
occurs is that A’s personal claim to the funds that he held
against his bank is extinguished upon the transfer
and a new personal
right is created between B and his bank. Ownership of the money –
insofar as money in specie is involved
– is transferred from
the transferring bank to the collecting bank, which must account to B
in accordance with their bank-customer
contractual relationship. This
is so even where A was induced to enter into an agreement through B’s
fraudulent misrepresentation.
In that case A will have a claim for
delictual damages against B to compensate him for his loss but will
not be able to claim a
re-transfer of the credit from the bank. And
if B is subsequently sequestrated the claim will lie against B’s
estate because
an insolvent’s personal right to credit falls
into his estate upon sequestration.’
[41] The court also
pointed out at para [21] that the circumstances in Nissan were
different, because there the court was dealing
with funds that had
been paid into an incorrect bank account and thereafter withdrawn by
the payee, knowing that he had no claim
to it. That is not the
position in the present matter.
[42] In my view, the
applicant is effectively asking this court to decide in advance, as
it were, whether the claim of the KBIT
trustees in the pending action
is bad in law, given the source of the funds from which payments were
allegedly made by the KBIT
to the applicant and/or its members. Such
a decision would have to be made purely on the basis of an
inelegantly formulated claim
contained in an affidavit submitted for
proof at a creditors meeting. It would be inappropriate for me to
accede to the applicant’s
request. At this stage it is
sufficient for me to find, which I do, that the claim of the Kebble
trustees against the KBIT is one
which is, for purposes of proof of
the claim, recognisable in law.
[43] Having regard
to the aforegoing, I am persuaded that the Kebble trustees duly
proved their claim: (a) by affidavit in a form
corresponding
substantially with Form C; and (b) the proof of claim affidavit was
made by a person fully cognisant of the claim,
who set forth therein
the facts upon which his knowledge of the claim was based as well as
the nature and particulars of the claim.
I accept that the manner in
which the claim was formulated by the Kebble trustees (and in
particular, the fifth respondent) was
somewhat inelegant. However,
the standard required is not that of a pleading in terms of
rule 18
of the uniform rules of court. In the circumstances the fifth
respondent’s oversight in annexing the incorrect affidavit
of
Von Eckardstein is immaterial, and does not affect the validity of
the claim of the Kebble trustees, which, I am satisfied,
complies
with the requirements of
s 44(4).
However, even if I am wrong, in my
view, the steps taken by the Kebble trustees thereafter were
sufficient to have remedied any
defects in the claim documentation
initially submitted, as is evidenced by the subsequent decision of
the KBIT trustees declining
to request the Master to expunge and
disallow the claim.
Whether the relief
sought will assist the applicant in the pending action
[44]
S 26(1)(b)
of
the
Insolvency Act provides
that:
‘(1) Every
disposition of property not made for value may be set aside by the
court if such disposition was made by an insolvent
–
(b) within two years
of the sequestration of his estate, and the person claiming under or
benefited by the disposition is unable
to prove that, immediately
after the disposition was made, the assets of the insolvent exceeded
his liabilities…’
[The KBIT estate was
sequestrated on 11 May 2007. The alleged dispositions were made
during the period 30 May 2005 to 10 June 2005.]
[45] What is thus
required of the applicant in the pending action, provided of course
that the dispositions are proven, is to show
that, immediately after
each disposition was made, the assets of the KBIT exceeded its
liabilities. The relevant dates would therefore
span the period 30
May 2005 to 10 June 2005, which is almost two years prior to the date
of sequestration of the KBIT.
[46] Furthermore,
the Kebble estate became a proven creditor of the KBIT estate on 25
July 2007, more than two years after the last
disposition was
allegedly made to the applicant. The applicant’s counsel
nonetheless sought to persuade me that the liabilities
of the KBIT at
the date of its sequestration would constitute some sort of prima
facie evidence which would assist the applicant
in discharging the
evidentiary onus which might come to rest upon it in the pending
action.
[47] To my mind,
this submission is fallacious. First, there is no evidence to suggest
that, were the claim of the Kebble trustees
to be expunged, the
assets of the KBIT would otherwise have exceeded its liabilities
immediately after the alleged dispositions
were made. Second, the
payment schedule which forms part of the claim documentation reflects
payments made by Kebble to or on behalf
of the KBIT subsequent to the
date of the last disposition alleged on 10 June 2005, totalling R1.9
million (over the period 14
June 2005 to 19 September 2005).
Accordingly, the claim of the Kebble trustees against the KBIT estate
includes amounts paid by
Kebble to or on behalf of the KBIT after the
alleged dispositions were made to the applicant.
[48] In these
circumstances, I agree with the submission of counsel for the Kebble
trustees that, even if the claim is expunged,
that will not assist
the applicant. It will be theoretical and will have no practical
effect. The expungement of the proven claim
will have no bearing on
the outcome of the pending action.
Costs
[49] Counsel for the
Kebble trustees urged me to award costs against the applicant on a
punitive scale. Although there is no reason
why costs should not
follow the result, I am not persuaded that a punitive costs order is
warranted. To my mind, the application
was misguided and
ill-conceived; however, that does not equate to male fides on the
applicant’s part.
Conclusion
[50] In the result
the following order is made:
The application is
dismissed with costs, including all reserved costs orders.
J I CLOETE