Case Law[2022] ZAGPJHC 1006South Africa
Courtney v Boshoff N.O. and Others (2019/41681) [2022] ZAGPJHC 1006; [2023] 2 All SA 100 (GJ) (20 December 2022)
High Court of South Africa (Gauteng Division, Johannesburg)
20 December 2022
Judgment
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# South Africa: South Gauteng High Court, Johannesburg
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## Courtney v Boshoff N.O. and Others (2019/41681) [2022] ZAGPJHC 1006; [2023] 2 All SA 100 (GJ) (20 December 2022)
Courtney v Boshoff N.O. and Others (2019/41681) [2022] ZAGPJHC 1006; [2023] 2 All SA 100 (GJ) (20 December 2022)
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sino date 20 December 2022
FLYNOTES:
FINAL SEQUESTRATION ORDER
Insolvency
– Sequestration – Final order granted without prior
provisional sequestration order – Judge not
having had
authority to grant order – Insolvency Act 24 of 1936, ss
9(5) and 12.
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
JOHANNESBURG
CASE NUMBER:
2019/41681
REPORTABLE:
YES
OF
INTEREST TO OTHER JUDGES: YES
REVISED.
YES
20
DECEMBER 2022
EAMONN
COURTNEY
Applicant
and
IZAK
JOHANNES BOSHOFF N.O.
First
Respondent
WINNIE
GLADNESS GUMEDE N.O.
Second
Respondent
ABSA
BANK LTD
Third
Respondent
THE MASTER OF THE HIGH
COURT,
JOHANNESBURG
Fourth
Respondent
The
judgment was handed down electronically by circulation to the
parties' and/or the parties' representatives by email and by being
uploaded to Case Lines. The date and time for hand-down is deemed to
be 10h00 on 20 December 2022.
JUDGMENT
WANLESS AJ
Introduction
[1]
This matter
was heard as a Special Motion. It generated a considerable amount of
paper and consisted of an urgent application; a
conditional
counter-application and an interlocutory application to deliver a
further affidavit. In addition, there are references
to various other
applications both in South Africa and in Scotland.
[2]
That said,
the genesis of the entire matter is to be found in the unopposed
motion roll of this Division on the 4
th
of May 2020.That day, a fairly run of the mill matter, namely, an
application for the sequestration of a debtor’s estate,
was
enrolled before Moultrie AJ.This would have been just one of a many
number of matters on the Acting Judge’s unopposed
motion roll.
Regrettably, nowhere in all of the application papers placed before
this Court, is there any indication as to whether
or not there was
any discourse entered into between Moultrie AJ and the legal
representative of the petitioning creditor when the
matter was called
in respect of the nature of the relief sought by the Applicant and,
if so, the nature of that discourse. In that
regard, it would have
been a relatively simple matter to have obtained a transcript of
those proceedings and placed same before
this Court. None of the
parties elected to do so.
[3]
The
Applicant and petitioning creditor in the sequestration application
was ABSA BANK LIMITED
(“the
Bank”)
and the Respondent was
EAMONN
COURTNEY. In the present application before this Court COURTNEY, an
adult male, is the Applicant and the Bank is the Third
Respondent.
For ease of reference, COURTNEY will be referred to as “
the
Applicant”
and the Third Respondent will be referred to as “
the
Bank”
in this judgment. It is either common cause or cannot be seriously
disputed in this matter that the application for the sequestration
of
the Applicant’s estate was properly served upon the Applicant;
the Applicant gave notice to oppose the application; the
Applicant
then failed to serve and file any answering affidavits and the Bank’s
attorneys served a Notice of Set Down upon
the Applicant’s
attorneys in respect of the matter having been enrolled for hearing
on the unopposed motion roll on the 4
th
of May 2020. Moreover, it is common cause that there was no
appearance on the 4
th
of May 2020 on behalf of the Applicant.
[4]
What
made this particular application for the sequestration of the
Applicant’s estate very different to all other applications
of
a similar nature and which should, from the very outset, have drawn
the attention of the presiding Acting Judge hearing the
unopposed
motion roll on that day to this particular matter, was the manner in
which the relief sought had been framed by the Bank.
In this regard,
it is trite that in an application for the sequestration of a
debtor’s estate the petitioning creditor, as
applicant, must
first seek a provisional order of sequestration of the debtor’s
estate in terms of section 10 of the Insolvency
Act, Act 24 of 1936
(“the
Act”).
The
effect thereof is that if the court is satisfied that the petitioning
creditor has made out a
prima
facie
case for the sequestration of the debtor’s estate, it will
issue a
Rule
Nisi
returnable on a fixed date. The applicant is then obliged to satisfy
the provisions of sections 11 and 12 of the Act and, if the
court is
satisfied on the return date that the creditor has made out a proper
case for the sequestration of the debtor’s
estate, it is then
at that stage (and only at that stage), that the court will grant a
final order of sequestration.
[5]
In
this particular case the Bank’s Notice of Motion had been
framed in what can only be described as a most unusual manner.
This
is so since, in the first instance the Bank sought an order, in
paragraph 1 of the Bank’s Notice of Motion, as follows:-
“
That
the estate of Eamonn Courtney be placed under
final
sequestration
in the hands of the Master of the above Honourable Court.”
[6]
It
is only in paragraph 2 of the Bank’s Notice of Motion that, in
the
alternative
to the
final order of sequestration sought in terms of paragraph 1, the Bank
sought a provisional order of sequestration with the
issuing of a
Rule
Nisi
.
With regard thereto, it is also noted that this paragraph of the
order falls woefully short of what should have been set out in
terms
of the peremptory requirements of sections 11 and 12 of the Act. The
highly unusual nature and form of the relief sought
by the Bank
should also have been contained in the Bank’s Practice Note
which is a requirement in this Division and must
be filed prior to a
matter being heard on the unopposed motion roll in order to assist
the presiding Judge when reading the application
papers.
[7]
On
the 4
th
of May 2020,
Moultrie
AJ granted an Order in the following terms:-
“
1.
The estate of Eamonn Courtney is placed under
final sequestration in the hands of the Master of the above
Honourable Court.
2.
The costs of this application are to be
costs in the administration of the respondent’s estate.”
The
learned Acting Judge did so without giving either a brief judgment or
reasons therefor.
[8]
Thereafter,
on the 13
th
of July 2020, IZAK JOHANNES BOSHOFF, an adult male
(“the
First Respondent”)
and WINNIE GLADNESS GUMEDE, an adult female
(“the
Second Respondent”
),
were appointed by the Master of this Court as the joint provisional
Trustees of the Applicant’s sequestrated estate. The
appointment of the First Respondent and the Second Respondent as the
joint final Trustees of the Applicant’s estate only
took place
on the 12
th
of May 2022.
[9]
A plethora
of litigation has taken place since the granting of the final order
of sequestration of the Applicant’s estate
on the 4
th
of May 2020 and the hearing of this matter on the 10
th
of August 2022. To set out all of that litigation at this stage of
the judgment would serve no real purpose and only result in
burdening
this judgment unnecessarily. In the premises, reference will be made
thereto later in this judgment if and wherever necessary.
[10]
On or about
the 29
th
of April 2022 the Applicant instituted an urgent application in this
Court under case number 41681/2019. In terms thereof, the
Applicant
sought interim relief as set out in PART A (PENDENTE LITE) and final
relief as set out in PART B (MAIN APPLICATION) of
the Applicant’s
Notice of Motion. The interim relief sought by the Applicant was to
prevent the First and Second Respondents
from taking any further
steps in the administration of the Applicant’s estate, together
with a suspension of the operation
of the
ex
parte
order of 8 September 2020 whereby the powers of the First and Second
Respondents were extended under subsection 18(3) of the Act
(“the
ex parte order”).
In terms of PART B of the Notice of Motion the final relief sought by
the Applicant was a declaration of nullity,
alternatively
,
the setting aside of the final order of sequestration and an order
declaring the appointment of the First and Second Respondents
as
Trustees a nullity,
alternatively
,
setting such appointment aside. In addition to the aforegoing the
Applicant also sought the setting aside of the
ex
parte
order, together with an order declaring all steps taken by the First
and Second Respondents in the administration of the Applicant’s
estate to be of no force and effect,
alternatively
,
setting them aside. Further, the Applicant sought an order that the
First and Second Respondents provide the Applicant with a
full
account in respect of their administration of his estate. Finally,
the Applicant sought leave to approach this Court on supplemented
papers pursuant to receiving the accounting from the First and Second
Respondents to seek such further relief and further directions
as may
be appropriate.
[11]
It was
common cause between the parties (and an earlier order had in fact
been made by this Court to that effect) that PART A and
PART B were
to be heard at the same time by this Court. In the premises, it was
further (correctly) agreed between the parties
that it was only
necessary for this Court to decide whether or not the Applicant was
entitled to the final relief as set out in
PART B of the Applicant’s
Notice of Motion.
[12]
With regard
to the final relief sought by the Applicant, Adv Smit, during the
course of his address, advised this Court that the
Applicant would no
longer be seeking the relief sought in the Applicant’s Notice
of Motion or the relief as set out in a
Draft Order which had been
placed on caselines a few days prior to the matter being heard.
Rather, the Applicant would now be seeking
relief in terms of an
Amended Draft Order. Regrettably, that order was not available to
hand in to the Court. Furthermore, neither
the legal representatives
of the First and Second Respondents, nor those of the Bank, had been
given notice of the Applicant’s
intention to amend his Notice
of Motion and to seek relief in terms of this Amended Draft Order.
[13]
During the
course of the hearing the Applicant produced a Notice of Amendment in
terms of which the Applicant sought to amend his
Notice of Motion by
deleting it in its entirety and replacing it with the following:-
1.
It is
declared that the order of this court dated 4 May 2020 issued under
case number 41681/2019 pursuant whereto the estate of
Eamonn Courtney
was finally sequestrated is a nullity and set aside.
2.
The
ex
parte
order of this court dated 8 September 2020 issued under case number
2020/23030 pursuant whereto the powers of the first and second
respondents were extended in accordance with
Section 18(3)
of the
Insolvency Act, 1936
is set aside.
3.
The first
and second respondents shall within a period determined by this court
render a full accounting to this court of their
administration of the
applicant’s estate under Master’s reference number
G506/2020.
4.
Upon
delivery of the accounting by the first and second respondents as
ordered in paragraph 3 above, the applicant is granted leave
to
approach this court on supplemented papers and notice for such
further relief, and to seek such directions thereanent (sic),
as may
be appropriate.
5.
Costs of
the application are to be paid by the first to third respondents
jointly and severally, the one paying the other to be
absolved.
6.
The third
respondent’s conditional counter–application is dismissed
with costs.
[14]
The
amendments sought by the Applicant and as set out in paragraphs 2, 3
and 4 of the said Notice of Amendment were opposed by both
the First
and Second Respondents and the Bank. After hearing argument this
Court made a ruling that the amendment as sought in
paragraph 2 was
refused but that the remainder of the amendments sought by the
Applicant (including paragraphs 3 and 4) were granted.
The matter
then proceeded on that basis.
[15]
On or about
the 14
th
of May 2022 the Bank filed a conditional counter-application. In this
counter-application the Bank, in the event that the Applicant
is
successful in the relief sought in the application, seeks an order
that the final sequestration order be varied to be a provisional
sequestration order and declaring that the provisional order is
deemed to be effective from 4 May 2020,
alternatively
,
an order declaring that all steps taken by the First and Second
Respondents pursuant to 4 May 2020 and prior to the variation,
be
declared as valid and effective.
The
Issues
[16]
The issues
which this Court is required to determine on the application papers
before it may, as simply as possible, be summarised
as follows:-
16.1
Should the
First Respondent be granted leave to deliver a further affidavit in
the application dealing with,
inter
alia
,
facts raised by the Applicant in his replying affidavit pertaining to
the question as to whether or not the Applicant should be
declared a
fugitive from justice?
16.2
Does the
Applicant have the requisite
locus
standi
to institute this application? In this regard the First and Second
Respondents, together with the Bank, have taken the point that
the
Applicant should be found to be a fugitive from justice and, as such,
should be denied access to this Court.
16.3
If the
answer to the aforegoing is in the affirmative (that is, the
Applicant
does
have the requisite
locus
standi
to institute this application) , then, upon a proper interpretation
of subsection 9(5) of the Act, did Moultrie AJ have the authority
to
grant a final order of sequestration of the Applicant’s estate
on the 4
th
of May 2020?
16.4
In the
event of this Court holding that Moultrie AJ did have the authority
to grant the order that he did, then the application
must be
dismissed and the conditional counter-application need not be
decided.
16.5
However, in
the event of this Court holding that Moultrie AJ did
not
have the authority to grant a final order of sequestration of the
Applicant’s estate on the 4
th
of May 2020, then it is necessary for this Court to decide:-
16.5.1
Whether or
not the Applicant is entitled to the relief sought by the Applicant
in the Amended Draft Order; and
16.5.2
If so,
whether the Bank should be granted the relief sought in the
conditional counter-application;
16.6
Issues of
costs.
The
interlocutory application by the First and Second Respondents for the
First Respondent to be given leave to deliver a further
affidavit in
the application
[17]
A formal
application was instituted by the First and Second Respondents for
the First Respondent to deliver a further affidavit
in the
application in terms of subrule 6(5)(e) of the Uniform Rules of
Court. This application was served by the First and Second
Respondent’s attorneys upon the attorneys representing the
Applicant on the 6
th
of June 2022. This Court was advised by Adv Smit that the said
interlocutory application was opposed by the Applicant. However,
no
notice of opposition thereto was ever filed on behalf of the
Applicant and no answering affidavits were ever filed in respect
thereof. The Bank did not object to the First and Second Respondents
supplementing the application papers with a further affidavit.
This
Court was asked to make a finding in respect thereof. For the sake of
convenience, all of the parties agreed that the Court
should include
such a finding in its judgment at the conclusion of the matter.
[18]
As already
noted above, there was no formal opposition by the Applicant to this
interlocutory application instituted by the First
and Second
Respondents. Had this been the case, one would have expected that
same would possibly have been dealt with on the Special
Interlocutory
Roll which exists in this Division prior to the matter being heard by
this Court. In the premises, this Court must
decide the merits
thereof based upon
,
inter alia
,
the facts as placed before this Court on oath by the First Respondent
and the correct legal principles to be applied to applications
of
this nature.
[19]
The basis
upon which the First and Second Respondents allege that the First
Respondent should be allowed to file a further affidavit
in these
proceedings is relatively simple and straightforward. In the
answering affidavit of the First and Second Respondents in
the
application the issue of the Applicant allegedly being a fugitive
from justice and therefore having no
locus
standi
to approach this court, was pertinently raised by the First and
Second Respondents in opposition to the relief sought by the
Applicant.
Not surprisingly the Applicant, in his replying affidavit,
dealt with these allegations in some detail. This factual
information,
due to no fault of any of the parties but rather, simply
due to the sequence of affidavits, together with the nature of the
relief
sought and that of the defence raised, has given rise to new
matter being placed before this Court by the Applicant in his
replying
affidavit (which he could not have been expected to foresee
and deal with in his founding affidavit). That said, this Court must
agree with the submissions made in the said further affidavit and by
Adv Symons SC that the First and Second Respondents are entitled
to
respond thereto by filing a further affidavit. Not only does this
ensure that the First and Second Respondents will suffer no
prejudice
but it will also assist this Court to arrive at a just decision in
the interests of justice.
[1]
[20]
It is true
that the further affidavit is not restricted solely to dealing with
facts raised by the Applicant in his replying affidavit
in respect of
the defence that the Applicant lacks the requisite
locus
standi
to institute the application. It also deals with,
inter
alia
,
facts pertaining to the convening of the first meeting of creditors
and the administration (on the Applicant’s version the
maladministration) of the Applicant’s estate. In this regard,
what the Court has stated above in relation to the issue of
the
Applicant’s
locus
standi
applies equally to these last mentioned issues. In the premises, this
Court finds that the First and Second Respondents are successful
in
the interlocutory application. An appropriate order in that respect
will follow at the end of this judgment.
The
Applicant’s
locus
standi
to
institute the application
[21]
The First
and Second Respondents allege that the Applicant and his wife are
“
fugitives
from justice”
and, as such, the Applicant lacks the requisite
locus
standi
to institute the application for the relief sought. Resolution of
this issue must necessarily involve both conclusions of law and
findings of fact.
The
law
[22]
It has long
been an accepted principle of our law that a would-be litigant should
approach the court with clean hands or that person
cannot expect the
court to come to his or her assistance. As an extension of that
principle, it can be accepted that, depending
on the facts of each
case, where such a person may be classified as a fugitive from
justice the decision of a court not to allow
that person a hearing
would be a serious one indeed, having regard to the right of every
individual to have access to the courts
in terms of our
Constitution.
[2]
[23]
In the
matter of
Mulligan
v Mulligan
[3]
it was held,
inter
alia
,
that:-
“
Before
a person seeks to establish his rights in a Court of law he must
approach the Court with clean hands; where he himself,
through
his own conduct makes it impossible for the processes of the Court
(whether criminal or civil) to be given effect to, he
cannot ask the
Court to set its machinery in motion to protect his civil rights and
interests. Were it not so, such a person would
be in a much more
advantageous position than an ordinary applicant or even a
peregrinus, who is obliged to give security. He would
have all the
advantages and be liable to none of the disadvantages of an ordinary
litigant, because, if unsuccessful in his suit,
his successful
opponent would be unable to attach either his property, supposing he
had any, or his person, in satisfaction of
his claim for costs.
Moreover, it is totally inconsistent with the whole spirit of our
judicial system to take cognisance of matters
conducted in secrecy.
It is true the applicant is entitled to present his petition through
a solicitor, but, none the less, while
disclosing his whereabouts to
his solicitor, he withholds that information from the Court and from
his opponent. As a fugitive
from justice, he is not only not amenable
to the ordinary criminal and civil processes of the Court, but, as
far as this Court
is concerned, it cannot call upon him to appear in
person to give evidence on oath; it cannot order his arrest in
case the
facts testified to in his affidavit are proved to be false,
whereas on the other hand he would be able to incept criminal
proceedings
for perjury proved to have been committed by his
opponent. And, in this case, he would be able to invoke the authority
of the Court
to arrest his opponent if she were suspected of flight
with the property sought to be interdicted. Such a litigant might,
moreover,
conceivably be the cause of the Court's being unable to
arrive at any decision on the facts sought by him to be determined,
if,
during the hearing of the application, the Court were to find
that justice could not be done unless he was called to give evidence
on oath before it. Were the Court to entertain a suit at the instance
of such a litigant it would be stultifying its own processes
and it
would, moreover, be conniving at and condoning the conduct of a
person, who through his flight from justice, sets law and
order in
defiance.”
[24]
Adv Symons
SC, on behalf of the First and Second Respondents, submitted to this
Court that the principles as set out in
Mulligan
not only remained relevant today but should, on the facts of this
particular matter, be applied. If this Court had to categorise
the
approach contended for on behalf of the First and Second Respondents
in this matter, it could be said that it was a stricter
or more
traditional one in respect of the principles applicable in
determining whether or not a fugitive from justice had the
locus
standi
to litigate in our courts. On the other hand, Adv Smit, for the
Applicant, contends for what may possibly be described as a broader
and more modern approach to the interpretation and application of
those established principles in our law.
[25]
These
varying approaches have their roots not only in the decision of
Mulligan
itself
but also in the manner in which that decision has been interpreted by
various courts which have come after it. It is true,
as pointed out
by Adv Symons SC, that in the matters of
Maluleke
v du Pont N.O. and Another
[4]
and
Herf v
Jermani
[5]
the principles as enunciated in
Mulligan
were followed. However, as relied upon by Adv Smit in support of his
argument and, as correctly conceded by Adv Symons SC, it was
more
recently held, in the matter of
Harris
and Others v Rees and Others,
[6]
when dealing with the
Mulligan
matter,
that:-
“
As
a general statement of the law on this aspect, the comments of De
Waal J in Mulligan v Mulligan cannot be faulted. However, I
do
believe that, when a court has to consider the right of a person to
approach the court for relief, in circumstances where such
a person
can either be categorised as a fugitive from justice or a person who
has deliberately placed himself beyond the jurisdiction
of the court,
in having regard to the principles enunciated in Mulligan v Mulligan,
it will have to deal with each case on its
own facts.
I
say this for the reason that, to close the doors of the court to a
litigant, will always be a serious thing to do
.”
[7]
[26]
Also in
Harris
[8]
the Court held,
inter
alia
,
that the principles enunciated in
Mulligan
had to be read against the background of the Constitution which
guaranteed a party the right of access to the courts and described
the latter as a strongly regarded constitutional right which should
not be easily deviated from.
[27]
Both
Counsel then referred this Court to the matter of
Nash
and Others v Mostert and Others
[9]
where
it was held,
inter
alia
,
that the
extreme
position pronounced in
Mulligan
has
not
stood
the test of time in its principled rigidity and that even where an
applicant
is
a fugitive from justice, this is no more than a factor which a court
may take into account in considering whether the fugitive
applicant
should be heard. However, in this regard, Adv Symons SC submits that
the court in
Nash
cites,
as authority for the proposition that
Mulligan
has not
stood the test of time the decision of
Harris
but
that
Harris
in fact
held that
Mulligan
had stood the test of time. Adv Symons SC further submitted that what
in fact was decided in
Harris
was
that each case must be determined on its own facts. So it is in this
sense, submits Adv Symons SC, that the principle in
Mulligan
is not
to be seen as rigid and it is wrong to find that the test in
Mulligan
has not
stood the test of time.
[28]
Insofar as
determining what a fugitive of justice actually is the court in the
matter of
Botes
v Goslin
[10]
cited
with approval the definition of a fugitive from justice as set out in
the matter of
Escom
v Rademeyer
as
one who is “
avoiding
the processes of the law through….voluntarily exile or hiding
within the jurisdiction of the court”
[11]
[29]
Adv Symons
SC also relied on the decision in the matter of
Chetty
v Law Society
of the
Transvaal
[12]
.
In that matter an attorney who had been struck off the roll and had
left the country for reasons which were in dispute, applied
while
remaining beyond the borders of a country for a rescission of the
order striking him off the roll of attorneys. The court
found that
the applicant had put himself beyond the reach of the law by fleeing
the country and therefore could not claim the protection
of the
court.
[30]
At this
stage, it is necessary to recognise, as obvious as this may seem,
that this Court is dealing with an application and, as
such, is to be
guided by the accepted legal principles when deciding same. That is,
if the material facts are in dispute and there
is no request for the
hearing of oral evidence, a final order will only be granted on
notice of motion if the facts as stated by
the respondent, together
with the facts as alleged by the applicant that are admitted by the
respondent, justify such an order.
[13]
But how do these principles apply in the present matter when this
Court must decide whether or not the Applicant should be classified
as a fugitive from justice?
[31]
To answer
this question it is first necessary to determine where the onus lies.
In all matters, whether by way of action or application,
the onus
must lie with the plaintiff or applicant to allege and prove, on a
balance of probabilities, that he or she has the requisite
locus
standi
to institute the action or application. This is trite.
Where
locus
standi
is simply denied then the onus of proof must remain with the
plaintiff or applicant. However, if the defendant or respondent is
not satisfied with a mere denial but sets up a “special
defence” then the onus of proof shifts from the plaintiff or
applicant to the defendant or respondent.
[14]
In the present application the First and Second Respondents have
clearly raised, in their answering affidavit, the special defence
that the Applicant is a fugitive from justice and, as such, does not
have the requisite
locus
standi
to institute the application in this Court. This is supported by the
Bank. In the premises, the First and Second Respondents, together
with the Bank, have attracted the onus of proving, on a balance of
probabilities, that this Court should find that the Applicant
is a
fugitive from justice.
[15]
Should this onus be discharged, it thereafter falls upon this Court
to decide whether or not the Applicant should be denied access
to
this Court. If the answer is in the affirmative, it must follow that
the Applicant does not have the requisite
locus
standi
to institute this application in this Court.
[32]
In respect
of this particular issue and when deciding whether or not the onus in
respect thereof has been discharged, it will be
necessary for this
Court to consider the facts as alleged by the First and Second
Respondents, together with the Bank, which are
admitted by the
Applicant, to determine whether those facts justify such an order
(that is, an order that the Applicant is a fugitive
of justice).
The
Facts
[33]
Facts
pertaining to whether or not the Applicant should be found by this
Court to be a fugitive from justice and which could potentially
give
rise to this Court making a finding that the Applicant does not have
the requisite
locus
standi
in this particular matter to institute the application, have been set
out, in some detail, in the application papers. In addition
thereto,
Adv Smit and Adv Symons SC dealt extensively therewith both in their
Heads of Argument and during argument before this
Court. Little
purpose would be served by this Court simply repeating those facts in
this judgment. Rather, what appears hereunder
is a summary of,
inter
alia
,
the versions of the respective parties; their submissions made in
relation thereto; facts which are either common cause or cannot
seriously be disputed by any of the parties and those issues where
there appear to be genuine or
bona
fide
disputes of fact.
[34]
The First
and Second Respondents paint a grave picture of the financial
pressure which they allege both the Applicant and his wife
must have
been experiencing towards the middle of 2019 and which they say was
only amplified by a number of legal challenges as
at December 2019.
It is this, according to the First and Second Respondents, that
caused the Applicant and his wife to leave South
Africa towards the
beginning of December 2019, never to return.
[35]
It is
common cause that the Applicant’s wife has never returned to
South Africa. On his own version the Applicant has returned
to South
Africa only once. This was during or about the period 5 February 2020
to 19 March 2020. Both the First and Second Respondents,
together
with the Bank, point out that whilst the Applicant and his wife have
instituted numerous applications in South Africa
pursuant to leaving
this country the Applicant has taken no action until this late stage
in respect of the final order sequestrating
his estate on the 4
th
of May 2020 and has not co-operated at all in either the
sequestration of his estate or in the winding-up of the companies in
respect of which he stood guarantee. It is alleged by the First and
Second Respondents that by remaining outside the jurisdiction
of this
Court the Applicant avoids prosecution in respect of the
contravention of his obligations under the Act and has shielded
himself from the recovery of costs in litigation. It is further
alleged that the Applicant has also obstructed the administration
of
his insolvent estate through the removal of movable assets in a
covert and secret manner.
[36]
Insofar as
the Applicant’s business interests in South Africa are
concerned (as opposed to those in Scotland the relevance
of which
will become more apparent later in this judgment) the Applicant and
his wife were the directors and shareholders of two
corporate
entities, namely Salt House Investments (Pty) Ltd, a property owning
entity of five properties, three of which were residential
and two
commercial and Allied Mobile Communications (Pty) Ltd which was
active in the mobile communications industry. Both of these
entities
were finally wound-up during May 2020. The Applicant and his wife had
provided security for the overdraft facilities extended
by the Bank
to the two entities by way of limited personal guarantees to the
combined extent of R 54.5 million.
[37]
On the
Applicant’s version he and his wife were never resident in
South Africa but were in this country as foreign investors.
As such,
they both had to return to Scotland periodically in terms of their
investment visa conditions. In this regard the Applicant
states that
each year he and his wife would return to Scotland during the
Christmas period and holidays, particularly since they
have two minor
children aged 14 years of age (twins) who reside with the Applicant
and his wife in Scotland. As set out above the
Applicant remained in
South Africa from the 5
th
of February 2020 until the 19
th
of March 2020. It is common cause that attempts were made between the
Applicant and the Bank to convene a meeting on or about the
5
th
of February 2020 but a dispute of fact exists as to the reasons why
this meeting never took place. On or about the 19
th
of March 2020, he flew back to Scotland soon after the Covid-19
pandemic hard lockdown but prior to the ban on international flights.
It is the Applicant’s version that he returned to Scotland on
19 March 2020, some seven days prior to the international travel
ban
for the singular purpose of being with his children for the duration
of the pandemic and to attend to his business interests
abroad, at
all times regarding Scotland as his home and not South Africa.
Thereafter, it is the Applicant’s version that
the ban on
international air travel due to the pandemic severely restricted his
ability to travel between Scotland and South Africa.
[38]
The
Applicant points to,
inter
alia
,
communication via email; virtual meetings via Skype; the full
disclosure of his contact details; the fact that he has resided
at
the same address in Scotland for the past 33 years and the fact that
the provisional order obtained by the First and Second
Respondents in
the Court of Session in Scotland was served upon him at that address,
together with the fact that the Applicant
instituted no less than
four urgent applications in this Court during 2020, to show, on a
balance of probabilities, that the First
and Second Respondents,
together with the Bank, have, at all material times, known of his
whereabouts.
Findings
[39]
On the
basis of these facts, Adv Symons SC has urged this Court, in the
first instance, to find that the Applicant should be classified
as a
fugitive from justice. He is supported in this regard by Adv Subel SC
for the Bank, although the latter’s submissions
on this point
(for various reasons) were largely confined to the fact of the
lateness of the Applicant instituting the application
dealing with
the sequestration order. In that regard, it can be accepted that, by
the latest, the Applicant had knowledge of the
final sequestration
order during July 2020.
[40]
As found
earlier in this judgment the onus of proof falls upon the First and
Second Respondents, together with the Bank, to prove,
on a balance of
probabilities, that this Court should find that the Applicant should
be declared a fugitive from justice. On those
facts which can be
accepted by this Court either to be common cause or where there are
no genuine or
bona
fide
disputes of fact and/or are not disputed by the Applicant on the
application papers before this Court, it is the finding of this
Court
that the said onus has not been discharged. The reasons for this
finding are as set out hereunder.
[41]
Much has
been made by the First and Second Respondents of the fact that the
Applicant’s affidavits are devoid of any real
detail pertaining
to,
inter
alia
,
the travels he and his wife undertook between South Africa and
Scotland prior to 2019; the nature of the visa granted to him by
the
South African authorities and whether the Applicant’s minor
children attended boarding school when the Applicant and
his wife
were spending time in South Africa. In the opinion of this Court
these criticisms are unwarranted and, at the end of the
day, carry
little or no weight when considering whether or not the Applicant
should be declared a fugitive from justice. Moreover,
it would appear
to this Court that these criticisms are founded on an incorrect
assumption on the part of the First and Second
Respondents (and
possibly the Bank) that somehow the Applicant had to discharge an
onus of proof and place facts before this Court
to prove that he was
not a fugitive from justice. The First and Second Respondents were
quite capable of investigating most, if
not all, of the so-called
concerns raised by them and placing the relevant evidence before this
Court at the hearing of this matter
in support of their allegations
that the Applicant should be declared a fugitive of justice. They
declined to do so.
[42]
In addition
thereto, the First and Second Respondents have criticised the
Applicant for remaining outside the jurisdiction of this
Court to
allegedly avoid prosecution in respect of the contravention of his
obligations under the Act and to shield himself from
the recovery of
costs in litigation. As noted earlier in this judgment, it is further
alleged that the Applicant has also obstructed
the administration of
his insolvent estate through the removal of movable assets in a
covert and secret manner. All of these facts,
taken at face value,
may initially strike one as compelling reasons why a party should be
declared a fugitive from justice. However,
upon a proper reading of
the affidavits placed before this Court, it is clear that each and
every one of these averments lack the
factual foundation to establish
the veracity thereof and, more particularly, discharge the burden of
proof. This is so, despite
the First Respondent having been given the
opportunity to deliver a further affidavit in the application. In
addition to the failure
of the First and Second Respondents to deal,
in any real or material manner whatsoever, with any alleged
contraventions of the
Act of which the Applicant may be guilty; the
penalties in respect thereof and the steps taken, if any, to
prosecute the Applicant
in light of his alleged contraventions and to
bring the alleged fugitive to justice, most importantly, no reference
is made by
the First and Second Respondents having alternative
remedies available to them (or not) to achieve the same goals, even
in the
continued physical absence of the Applicant from South Africa.
In this regard, it is important to remember that the First and Second
Respondents have already obtained the
ex
parte
order
which, in terms of subsection 18(3) of the Act, extended their powers
to act within South Africa and the provisional order in the
Court of
Sessions in Scotland which is part of the petition sought which will
entitle them to pursue the Applicant’s assets
in Scotland.
[43]
On the
other hand, there is nothing improbable in respect of the version put
forward by the Applicant wherein he denies that he
is a fugitive from
justice. The First and Second Respondents (together with the Bank) do
not dispute that the Applicant returned
to Scotland just before the
hard lockdown as a result of the Covid–19 Pandemic which had a
dramatic effect on international
flight travel for some time
thereafter. What also appears to be common cause on the application
papers before this Court is that
the Applicant has considerable
business interests and assets in Scotland. Hence the institution by
the First and Second Respondents
of the petition in the Court of
Sessions in Scotland to enable the First and Second Respondents to
pursue the Applicant’s
assets in that country. In the premises,
there is nothing improbable in respect of the Applicant’s
version that he resided
in South Africa as an investor by way of a
special visa and always regarded Scotland as his permanent home.
[44]
Moreover,
it must be accepted by this Court that, at all material times, the
Bank, together with the First and Second Respondents,
were not only
in possession of the Applicant’s residential addresses but also
of all of his contact details. Any so-called
confusion in this regard
on behalf of either the First and Second Respondents (by referring to
Notice of Withdrawals by erstwhile
attorneys and the like) or the
Bank, appears to be self-created. The Applicant has, through one
means or another, always been in
contact with the First and Second
Respondents,
alternatively
,
the Bank. His actions are not those that fit the definition of a
fugitive from justice.
[45]
On behalf
of the Applicant, Adv Smit raised an important point. It was the fact
that following his departure from South Africa the
Applicant has been
involved in numerous applications (apart from the present
application) related to the sequestration of his estate
and the
winding-up of Salt House Investments (Pty) Ltd. Arising therefrom,
Adv Smit has drawn the attention of this Court to the
fact that,
apart from his submission that the very institution of no less than
four applications during 2020 by the Applicant shows
a propensity to
be involved in the processes rather than a propensity to avoid, the
special defence of the Applicant being a fugitive
from justice was
never raised in any of these previous applications. It is therefore
submitted by Adv Smit that this special defence
has only been raised
in the present matter as an afterthought. This Court accepts the
validity of these submissions made on behalf
of the Applicant.
[46]
For the
reasons set out above, this Court holds that the First and Second
Respondents, together with the Bank, have failed to discharge
the
onus incumbent upon them to prove, on a balance of probabilities,
that the Applicant is a fugitive from justice. Even if this
Court is
incorrect and the said Respondents, together with the Bank, have not
attracted the onus of proof in the true sense, then
those parties
have failed to place before this Court sufficient evidence to satisfy
this Court that it should find that the Applicant
is indeed a
fugitive from justice.
[47]
Having
found that the Applicant is
not
a fugitive from justice it must follow that it is unnecessary for
this Court to consider whether or not the Applicant has the requisite
locus
standi
to institute the application. In passing, had this Court found that
the Applicant
was
a fugitive from justice, it is highly unlikely that this Court would
have found, in this particular matter, that the doors of this
Court
should be closed to the Applicant. From the aforegoing it may be
accepted that this Court would have adopted the approach
that the
fact that the Applicant was a fugitive from justice is only one of
the various factors in this matter to be considered
and that the
constitutional right to access to our courts should be guarded
jealously and protected wherever possible. These principles
carry
even greater weight in a matter like the present where it would
appear, even
prima
facie
,
that the Applicant seeks to correct a grave injustice by the granting
of a final order sequestrating his estate without the prior
granting
of a provisional order of sequestration in terms of the Act.
[48]
In so
doing, this Court would have favoured the approach as postulated in
Harris
and as
contended for by the Applicant, in that to close the doors of the
court to a litigant is a serious thing to do. This would
not in any
manner whatsoever have been in conflict with the long-standing
principles as established in
Mulligan
since,
as is clear from a correct reading of
Harris,
each case must be considered on its own particular facts.
Did
Moultrie AJ have the authority to grant a Final Order of
Sequestration of the Applicant’s estate?
[49]
At
this stage, it is worthy to note that no less than four (4) Counsel,
together with their instructing attorneys, represented the
relevant
parties in the present matter before this Court. These were, Adv Smit
for the Applicant; Adv Symons SC for the First and
Second Respondents
and Adv Subel SC (with Adv Vorster) for the Bank. Not one of these
Advocates, or those instructing them, could
provide this Court (when
asked) with a single example of where a court, in this Division or
any other Division within the Republic
of South Africa, had granted a
final order of sequestration of a debtor’s estate without first
granting a provisional order.
It was also acknowledged that there was
nothing in the Practice Directives of either the Gauteng Local
Division or the Gauteng
Division that entitled a court to do so under
any circumstance.
[50]
It
is convenient at this stage for this Court to deal with the relevant
sections of the Act pertaining to the sequestration of a
debtor’s
estate.
[51]
Section
9 of the Act
(Petition
for sequestration of estate)
deals, in essence, with the formalities and requirements of an
application for the sequestration of a debtor’s estate. For
present purposes the important provisions of this section are
contained in subsection (5) which reads as follows:-
“
The
court, on consideration of the petition, the Master’s or the
said officer’s report thereon and of any further affidavit
which the petitioning creditor may have submitted in answer to that
report,
may
act in terms of section ten or may dismiss the petition, or postpone
its hearing or make such other order in the matter as in
the
circumstances appears to be just
.”
[16]
[52]
Section
10 of the Act, as its title suggests
(Provisional
sequestration)
,
empowers a court, if satisfied on a
prima
facie
level,
that the requirements as set out in subsections (a); (b) and (c) have
been met, to provisionally sequestrate the debtor’s
estate. If
a court makes an order provisionally sequestrating a debtor’s
estate it must, in terms of subsection 11(1) of
the Act,
simultaneously grant a
rule
nisi
calling
upon the debtor upon a day mentioned in the rule to appear and to
show cause why his or her estate should not be sequestrated
finally.
The remaining provisions of this section deal with the requirements
pertaining to the service of the
rule
nisi
.
[53]
Section12
of the Act
(Final
sequestration or dismissal of petition for sequestration)
reads as follows:-
“
(1)
If at the hearing
pursuant
to the aforesaid rule nisi
[17]
the court is satisfied that-
(a)
the
petitioning creditor has established against the debtor a claim such
as is mentioned in subsection (1) of section nine; and
(b)
the
debtor has committed an act of insolvency or is insolvent; and
(c)
there
is reason to believe that it will be to the advantage of creditors of
the debtor if his estate is sequestrated,
it may sequestrate the
estate of the debtor.
(2)
If
at such hearing
the
court is not so satisfied, it shall dismiss the petition for the
sequestration of the estate of the debtor
and
set aside the order of provisional sequestration
[18]
or require further proof of the matters set forth in the petition and
postpone the hearing for any reasonable period but not sine
die.”
[54]
As already
noted earlier in this judgment the Bank sought an order finally
sequestrating the Applicant’s estate in terms of
section 12 of
the Act. Moultrie AJ granted such an order. When he did so, he must
have been aware, or should reasonably have been
aware, of the fact
that such an order (that is a final sequestration order in terms of
section 12) had never been granted by a
court in this Division or any
other court, prior to a provisional order of sequestration being
granted in terms of section 10 of
the Act. Moultrie AJ would also
have been aware, or should reasonably have been aware, that there
existed no practice in this Division
to that effect, either codified
in the written Practice Directives applicable thereto or, if
unwritten, accepted by the practitioners
and Judges of this Division.
If he was not, it would surely have been incumbent upon the legal
representative who appeared on behalf
of the Bank to bring these
matters to his attention. In addition to the aforegoing, it is
important to note that Moultrie AJ, having
presumably read the
application papers of the Bank in support of the application for the
sequestration of the Applicant’s
estate prior to the hearing of
the matter on the 4
th
of May 2020, would have been aware of the fact that no mention was
made in the founding affidavit of the Bank as to why a final
order of
sequestration should be granted rather than following the usual
procedure and requesting the court to grant a provisional
order of
sequestration first. Most regrettably (as already noted earlier in
this judgment), despite electing to deviate from the
clear prescripts
of the Act and the countless orders of other Judges before him by
declining to grant a provisional order of sequestration
but moving
forward and granting a final order sequestrating the Applicant’s
estate (with all of the far reaching effects
which flow from the
granting of such an order) the learned Acting Judge elected not to
provide even a brief judgment or reasons
explaining why he had chosen
to follow this extraordinary route. The relevance of the aforegoing
will also become more apparent
later in this judgment, particularly
when dealing with certain submissions made by Adv Subel SC where, in
support of the conditional
counter-application instituted by the
Bank, submitted before this Court that Moultrie AJ had clearly made a
mistake.
[55]
It was
submitted by the Applicant that the order granted by Moultrie AJ on
the 4
th
of May 2020 whereby his estate was finally sequestrated, is a nullity
and should be set aside.
[19]
In support of this submission the Applicant relies,
inter
alia,
on the matter of
Knoop
NO and Another v Gupta (Execution)
[20]
which confirmed the earlier decision of
The
Master of the High Court (North Gauteng High Court, Pretoria) v
Motala NO and Others
[21]
and is, according to the Applicant, authority for the principle that
if what a court has ordered cannot be done under the enabling
legislation the order of that court is a nullity and can be
disregarded.
It
is the Applicant’s case that Moultrie AJ did not have the
jurisdiction or power or competence to issue a final sequestration
order in respect of the Applicant’s estate on the 4
th
of May 2020. This is so, submits the Applicant, since section 12 of
the Act specifically stipulates, as a jurisdictional condition
to any
sequestration, that the court has to be satisfied of certain matters
at the hearing pursuant to the issuing and service
of a
rule
nisi
.
There is no provision in the enabling legislation (the Act) for only
one hearing.
[56]
Both the
First and Second Respondents, together with the Bank, take the
opposing view and submit that the order is
not
a nullity. They say that the court
did
have the authority to make the order of final sequestration on the
4
th
of May 2020. It is further submitted that this authority is derived
from a proper interpretation of subsection 9(5) of the Act,
together
with the fact that the said authority is not limited by an express
provision of the Act.
[57]
In support
of the aforegoing, reliance is placed on the wording of subsection
9(5) of the Act, with particular reference to the
words “…
.or
make such other order in the matter as in the circumstances appears
to be just”.
Arising therefrom, it is submitted that the subsection postulates
various options available to the court when considering a petition
for sequestration and, in the premises, subsection 9(5) is the source
of the court’s authority.
[58]
So, in
essence, what is contended for, is an interpretation of subsection
9(5) of the Act which would have given Moultrie AJ the
authority to
(and for all intents and purposes) be the first judicial officer
since the 1
st
of July 1936
(the
commencement date of the Act) to elect not to follow the specific
provisions of sections 10 and 11 of the Act but, at the first
hearing
of the application, grant a final order in terms of section 12 of the
Act sequestrating the Applicant’s estate.
[59]
Putting
aside for present purposes the applicable principles of
interpretation, it is imperative, in the first instance, to note
that
the argument in support of an interpretation of subsection 9(5) being
wide enough to enable the court presented with an application
for the
sequestration of a debtor’s estate to grant a final order
without first granting a provisional order, is premised
upon the fact
that the court so petitioned in terms of the Act is entitled,
firstly, to ignore the provisions of sections 10 and
11 of the Act.
This Court has grave difficulty in accepting such a proposition,
particularly when one considers that there appears
to be no
conceivable basis upon which a court would be entitled to do so. This
must be so, particularly considering the nature
and purpose of these
provisions
(sections
10 and 11
)
within the context of the Act. The aforegoing must also be seen in
light of that as stated hereunder.
[60]
It has, as
set out above, been submitted that there is no express provision in
the Act limiting the authority of a court to grant
a final order
sequestrating a debtor’s estate. This may be true but an
express,
alternatively
,
implied provision effectively arriving at the same result must give
rise to, or at the very least support, an interpretation negating
any
authority on behalf of a court to grant a final order of
sequestration without first granting a provisional order. As set out
earlier in this judgment, subsection 12(1) of the Act specifically
states that a final sequestration may only be granted “
at
the hearing pursuant
to the aforesaid rule nisi “.
[22]
In addition, subsection 12(2) of the Act makes it clear that the
hearing for a final order of sequestration must be a second hearing
pursuant to the granting of a provisional order of sequestration
since specific reference is made to the fact that “
If
at such hearing the court is not so satisfied, it shall dismiss the
petition for the sequestration of the estate of the debtor
and
set aside the order of provisional sequestration
……”
[23]
So the legislator clearly envisaged a two-step procedure in every
case where a debtor’s estate is to be sequestrated. Hence
the
formulation of a process encompassing both provisional and final
sequestration orders; the very existence of sections 10; 11
and 12 in
the Act and the refinement of various subsections of sections 9 and
11 over the years, pursuant to the commencement of
the Act.
[61]
The Act
provides important protections for the rights of creditors. It is
also trite that the sequestration of a debtor’s
estate has
important implications in respect of the debtor’s status. In
the premises, formalities and requirements prescribed
in the Act must
be strictly complied with. Arising therefrom, it is the duty of our
courts to not only ensure that these formalities
and requirements are
properly and fully satisfied before granting sequestration orders but
that the provisions of the Act are restrictively
interpreted.
[62]
Since the
commencement of the Act on the 1
st
of July 1936, various amendments have been enacted by the legislature
to section 9 thereof
(Petition
of sequestration of estate)
with
particular reference to subsections (3) and (4A) which deal with
information to be contained in the application and service
thereof.
[24]
It is however
worthy to note that since the commencement of the Act the legislature
has not seen fit to effect any amendments whatsoever
to subsection
9(5).
[63]
It is also
important to note that since the commencement of the Act the
legislature has not seen fit to effect any amendments whatsoever
to
either section 10
(Provisional
sequestration)
or section 12
(Final
sequestration or dismissal of petition for sequestration)
of the Act. So, whilst the legislature has found the provisions of
these sections of the Act to be “fit for purpose”
since
the 1
st
of July 1936, it has, at the same time, deemed it necessary to effect
amendments to section 11
(Service
of rule nisi)
of the Act.
[25]
[64]
From the
aforegoing, it is clear that the legislature has recognised and
accepted the importance of the principles governing the
Act and our
laws of insolvency by accepting that whilst sequestration is
undoubtedly a necessary mechanism in order to protect
the rights of
creditors, it remains fundamental (even more so in a constitutional
democracy) to recognise that the sequestration
of a debtor’s
estate has a major effect on that debtor’s status which also
requires the protection of the legislature.
Hence, whilst the
legislature has found it necessary to amend the provisions of those
sections dealing with the formalities and
requirements as set out
above
(sections
9 and 11)
it has, at the same time, deliberately left intact those provisions
of the Act
(sections
10 and 12)
which set out the procedure in terms of which our courts are to
consider sequestration orders and implement same. In this way,
the
procedure (and safeguards) of the court first having to be satisfied
that the requirements of section 9 have been complied
with; the
granting of a provisional order of sequestration if the court is
satisfied,
prima
facie
,
that the factors in section 10 have been satisfied; the court
thereafter being satisfied that proper service of the
rule
nisi
has been effected in terms of the provisions of section 11 and then
(and only then) the court being entitled to grant a final order
of
sequestration in terms of section 12 of the Act, has been preserved
by the legislature. Unsurprisingly, there has (certainly
as far as
this Court is aware) been no call from insolvency practitioners; the
legal profession or the general public, for amendments
to the Act
which would categorically and without doubt provide a court, in
certain circumstances (or perhaps even in each and every
circumstance) to have the authority to grant a final order of
sequestration of a debtor’s estate where certain requirements
had been complied with and facts proven by an applicant without first
having to grant a provisional order of sequestration.
[65]
From the
aforegoing, it should be apparent that the interpretation of
subsection 9(5) of the Act, as contended for by the First
and Second
Respondents, together with the Bank, cannot be correct. On the other
hand the interpretation as put forward by the Applicant
is not in
conflict with the well-known and oft-cited principles of
interpretation as stated in the matter of
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[26]
where the Supreme Court
of Appeal
(“SCA”)
held:-
“
Interpretation
is the process of attributing meaning to the words used in a
document, be it legislation, some other statutory instrument,
or
contract, having regard to the context provided by reading the
particular provision or provisions in the light of the document
as a
whole and the circumstances attendant upon its coming into existence.
Whatever the nature of the document, consideration must
be given to
the language used in the light
of
the ordinary rules of grammar and syntax; the context in which the
provision appears; the apparent purpose to which it is directed
and
the material known to those responsible for its production. Where
more than one meaning is possible each possibility must be
weighed in
the light of all these factors. The process is objective, not
subjective. A sensible meaning is to be preferred to one
that leads
to insensible or unbusinesslike results or undermines the apparent
purpose of the document. Judges must be alert to,
and guard against,
the temptation to substitute what they regard as reasonable, sensible
or businesslike for the words actually
used. To do so in regard to a
statute or statutory instrument is to cross the divide between
interpretation and legislation; in
a contractual context it is to
make a contract for the parties other than the one they in fact made.
The 'inevitable point of departure
is the language of the provision
itself', read in context and having regard to the purpose of the
provision and the background
to the preparation and production of the
document.”
[66]
In the
premises, this Court finds that it is unable to interpret subsection
9(5) of the Act as contended for by the First and Second
Respondents,
together with the Bank. Further, this Court finds that Moultrie AJ
did
not
have the authority to make the order on the 4
th
of May 2020 whereby the estate of the Applicant was finally
sequestrated in terms of section 12 of the Act.
Is
the Applicant entitled to the relief sought in the Amended Draft
Order ?
[67]
The
submissions made on behalf of the Applicant as to why the order of
Moultrie AJ is a nullity and should be set aside, have been
dealt
with earlier in this judgment.
[27]
This Court has held that the interpretation of subsection 9(5) of the
Act, as contended for by the First and Second Respondents,
together
with the Bank, is incorrect and, in light of the correct
interpretation of that subsection of the Act, that Moultrie AJ
did
not
have the authority to grant the order that he did. Nonetheless, Adv
Subel SC submitted to this Court, on behalf of the Bank, that
the
Applicant can still not succeed with a declaration of invalidity
ab
initio.
This submission was based on the following:-
67.1
There is no
dispute that the Court faced with the sequestration application had
the jurisdiction and authority to make a sequestration
order;
67.2
The sole
dispute is whether or not the Court ought to have granted a
provisional order as opposed to a final order;
67.3
By then
granting a final order and not a provisional order the Court did not
act unlawfully but made a mistake.
[68]
It was
further submitted that whilst the Applicant has, in his founding
affidavit, placed reliance on Rule 42,
alternatively
,
the common law, to set aside the order, no case was made out for such
relief and any reliance thereon is seemingly abandoned in
the
Applicant’s Heads of Argument.
[69]
Counsel for
the Bank drew the attention of this Court to the matter of
Zuma
v Secretary of the Judicial Commission of Inquiry into Allegations of
State Capture, Corruption and Fraud in the Public Sector
including
Organs of State
[28]
where
the
Constitutional Court reaffirmed the principle that a judgment was
erroneously granted if “
There
existed at the time of its issue a fact of which the Judge was
unaware, which would have precluded the granting of the judgment
and
which would have induced the Judge, if aware of it, not to grant the
judgment.”
[29]
[70]
Following
therefrom, it was submitted that there is nothing to suggest that the
Court would not have granted a provisional sequestration
order on the
4
th
of May 2020. It was therefore submitted that the largely unexplained
and substantial delay in launching the application mitigates
against
any relief in favour of the Applicant under Rule 42 or the common
law.
[30]
[71]
It was
further submitted that it is in the interests of justice that there
should be relative certainty and finality as soon as
possible
concerning the scope and effect of orders of court. Persons affected
by such orders should be entitled, within a reasonable
time after the
issue thereof, to know that the last word has been spoken on the
subject. The power created by Rule 42(1) is discretionary
“……
and
it would be a proper exercise of that discretion to say that, even if
the appellant proved that Rule 42(1) applied, it should
not be heard
to complain after the lapse of a reasonable time.”
[31]
[72]
Based on,
inter
alia
,
the aforegoing, it was submitted that the Applicant was not entitled
to a declarator that the order of this court dated 4 May
2020, issued
under case number 41681/2019, pursuant whereto the estate of the
Applicant was finally sequestrated, is a nullity
and should be set
aside.
[73]
As dealt
with earlier in this judgment, Adv Smit, in support of his
submissions on behalf of the Applicant that the order of Moultrie
AJ
was a nullity
ab
initio
and
should be set aside because “
nothing
could be built on nothing”
,
relied primarily on the matters of
Knoop
[32]
and
Motala.
[33]
[74]
The
Constitutional Court, in the matter of
Department
of Transport and Others v Tasima (Pty) Ltd,
[34]
was
called upon to consider the effect of an invalid court order and
whether or not the alleged invalidity of the court order could
excuse
a party’s non-compliance therewith. It was held,
inter
alia
,
that “
The
general rule is that orders that
do
not
concern
constitutional invalidity
do
have force from the
moment they are issued. And in light of s 165(5) of the Constitution,
the order is binding, irrespective of
whether or not it is valid,
until set aside.”
[35]
[75]
Importantly,
whilst criticizing
Motala
the
Constitutional Court in
Tasima
also found
[36]
that
Motala
dealt
with a different issue and “…
is
only authority for the proposition that if a court is able to
conclude that what the court [that made the original decision]
has
ordered cannot be done under the enabling legislation, the order is a
nullity and can be disregarded.”
In the present matter the court could grant a sequestration order.
The mistake of Moultrie AJ was to grant a final sequestration
order
before granting a provisional sequestration order.
[76]
Knoop
is relied upon by Adv
Smit insofar as the SCA confirms the principles as set out earlier by
that court in
Motala
.
In this regard, Wallis JA stated:-
[37]
“
I
am aware that some of the reasoning in Motala has been subjected to
criticism by the Constitutional Court. However, it remains
authority
for the proposition that if a court 'is able to conclude that what
the court [that made the original decision] has ordered
cannot be
done under the enabling legislation, the order is a nullity and can
be disregarded'. This principle can be invoked where
the invalidity
appears on the face of the order as in Motala and in this case. The
suspension order granted by the full court was
therefore a nullity.”
[77]
In the
premises, the Applicant’s reliance on
Knoop
takes the Applicant’s case no further as both
Motala
and
Knoop
are distinguishable from the present matter. On the other hand, the
principles as set out in
Tasima
have,
fairly recently, been confirmed, once again, by the Constitutional
Court in the matter of
Municipal
Manager OR Tambo District Municipality and Another v Ndabeni
.
[38]
[78]
So, the
correct statement of the principles of law applicable to the status
of the order in the present matter are to be found in
Tasima
and
Ndabeni.
Following
thereon, the final order of sequestration granted by mistake by
Moultrie AJ on the 4
th
of May 2020 is not a nullity
ab
initio
.
As questionable as the motives of the Bank may or may not have been
to move for a final order of sequestration rather than follow
the
established practice of first seeking a provisional order of
sequestration, together with the regrettable consequences and
actions
that followed thereafter, the order remained in place until
challenged by the Applicant.
Findings
[79]
In light
of,
inter
alia
,
the considerable delay on behalf of the Applicant in seeking relief
from this Court to have the order of Moultrie AJ granted on
4 May
2020 declared a nullity and set aside, this Court would have declined
to have come to the assistance of the Applicant in
terms of Rule
42(1),
alternatively,
the common law. In any event, the Applicant is not entitled to that
relief in that whilst Moultrie AJ did not have the authority
in terms
of the Act to grant a final sequestration order in respect of the
Applicant’s estate, he did have the authority
to grant a
provisional order of sequestration. The fact that he granted a final
order instead of a provisional order was a mistake.
Following
thereon, the order granted by Moultrie AJ was not void
ab
initio
but remained in place until it was either set aside or varied by a
subsequent order of this Court. In the premises, the Applicant
is not
entitled to the relief sought that the order granted by Moultrie AJ
on 4 May 2020 should be declared a nullity and set aside.
Should
the Bank be granted the relief as sought in the conditional
counter-application?
[80]
The relief
sought by the Bank in its conditional counter-application is as
follows:-
“
1.
The order of Moultrie AJ dated 4 May 2020 is varied to read as
follows:
“
1.
The estate of Eamonn Courtney (“the
Respondent”) is placed under provisional sequestration in
the
hands of the Master of the High Court.
2.
The Respondent and any other party who
wishes to avoid such an order being made final, are called upon
to
advance the reasons, if any, why the court should not grant a final
order of sequestration of the said estate on the …………day
of………….. at 10.00 or as soon thereafter
as the matter may be heard.
3.
A copy of this order must forthwith be
served –
3.1
on the Respondent by way of service on
his attorneys of record Gothe Attorneys Incorporated situated
at 225
Muller Street, Queenwood, Pretoria;
3.2
on the employees of the
Respondent, if any;
3.3
on all trade unions of which the
employees of the Respondent are members, if any;
3.4
on the Master;
3.5
on the South African Revenue
Services.”
4.
The costs of this application are to be
costs in the administration of the Respondent’s estate.
“:
2.
Declaring that
the provisional sequestration order granted in terms of
paragraph 1
will be deemed effective as from 4 May 2020;
3.
Alternatively,
to paragraph 2 declaring that all steps taken by the First
and Second
Respondents following their appointment as the provisional and final
trustees of the insolvent estate of Eamonn Courtney
to be valid and
effective.
4.
Ordering the
Applicant and any Respondent who opposes this application
to pay the
costs thereof.
5.
Further and/or alternative relief.”
[81]
In support
of the relief sought the Bank relied upon subsection 149(2) of the
Act which provides that:-
“
The
court may rescind or vary any order made by it under the provisions
of this Act”
[82]
In the
matter of
Naidoo
and Another v Matlala NO and Another
,
Southwood J stated the following:
[39]
“
For
present purposes I shall accept the statement of the relevant
principles gleaned from the authorities by Gautschi AJ in Storti
v
Nugent and Others
2001 (3) SA 783
(W) at 806D–G:
'(1)
The Court's discretionary power conferred by this
section is not limited to rescission on common-law grounds.
(2)
Unusual or special or exceptional circumstances
must exist to justify such relief.
(3)
This section cannot be invoked to obtain a
rehearing of the merits of the sequestration proceedings.
(4)
Where it is alleged that the order should not have
been granted, the facts should at least support a cause
of action for
a common-law rescission.
(5)
Where reliance is placed on supervening events, it
should for some reason involve unnecessary hardship to
be confined to
the ordinary rehabilitation machinery, or the circumstances should be
very exceptional.
(6)
A court will not exercise its discretion in favour
of such an application if undesirable consequences would
follow.”
[83]
As
correctly pointed out by Counsel for the Bank the Act does not
specify any ground upon which the Court may rescind or vary an
order.
Further, the Court’s authority to act under subsection 149(2)
has been interpreted to mean that:-
83.1
The Court
must exercise its discretion in light of all of the
circumstances;
[40]
83.2
There are
no limitations to this power and the intention of the provision is to
enable the Court to exercise such power in any circumstances
which it
may consider just;
[41]
83.3
This
includes circumstances where the order was made in error and should
not have been made at all;
[42]
83.4
The court
will not exercise its discretion in favour of an application in terms
of subsection 149(2) if undesirable consequences
will follow.
[43]
[84]
In light of
the principles as encapsulated in the matters of
Tasima
and
Ndabeni
,
namely that court orders exist in fact and have legal consequences,
it was submitted by Counsel for the Bank that:-
84.1
the court
order must be set aside by an order of this Court;
84.2
the act of
setting aside an order is akin to the rescission of the judgment and
entitles this Court, under section 149(2) of the
Act, to either vary
it or set it aside.
[85]
Insofar as
the
grounds
for justifying a variation of the order granted by Moultrie AJ, it
was submitted by Adv Subel SC that the Bank’s case for
a
variation thereof had been formulated in the application papers
before this Court as follows:-
85.1
the
sequestration process has been ongoing for two years and the First
and Second Respondents had, with the Bank’s financial
backing,
expended a significant amount of time and money to administer and
wind-up the Applicant’s insolvent estate;
85.2
the sudden
and belated challenge to the sequestration order is raised as an
afterthought and only came to the fore when the First
and Second
Respondents took steps in Scotland to pursue the Applicant’s
foreign assets;
85.3
the
Applicant remains indebted to the Bank for a substantial amount and
is unable to pay the debt;
85.4
the First
and Second Respondents have administered the insolvent estate; sold
assets to third parties for two years; paid the Bank
an interim
dividend and it is no longer possible to “unscramble the egg”.
[86]
It was
further pointed out on behalf of the Bank that the Applicant has
provided no response to the aforesaid allegations. Moreover,
in their
affidavits, the First and Second Respondents explain the steps they
have taken during the administration of the estate
and provide a
draft liquidation and distribution account which confirms that the
First and Second Respondents have:-
86.1
appointed
an investigative firm to conduct an investigation and prepare a
report on the Applicant’s assets;
86.2
on the 24
th
of June 2021, sold an immovable property jointly owned by the
Applicant and his wife;
86.3
collected
rental income from the lease of the said immovable property prior to
the sale;
86.4
paid an
interim dividend to the Bank in the amount of R 2 425 000.00; and
86.5
initiated
proceedings in the Court of Sessions, Scotland to pursue the
Applicant’s assets in that country.
[87]
In light of
the aforegoing and the fact that these are all undisputed facts
before this Court, it was submitted on behalf of the
Bank that these
facts overwhelmingly support a variation of the order of Moultrie AJ
granted on the 4
th
of May 2020.
[88]
The
counter-application instituted by the Bank is conditional upon the
Applicant being granted the relief sought in the application
to have
the order of Moultrie AJ declared a nullity and set aside. In light
of the fact that the Applicant was unsuccessful in
obtaining such
relief the counter-application must, technically, fall away. However,
this does not mean that this Court is prevented
from making a
suitable order in terms of subsection 149(2) of the Act whereby the
order of Moultrie AJ, granted by mistake on the
4th of May 2020, is
varied. In this regard, subsection 149(2) specifically entitles a
court to rescind or vary any order made by
it under the provisions of
the Act. The order in the present matter is clearly one made in terms
of the provisions of the Act.
In addition thereto, subsection 149(2)
of the Act merely codifies the court’s inherent jurisdiction to
regulate its own process
and,
inter
alia
,
to rectify any mistakes. In the premises, provided there are grounds
justifying the variation of the order granted by Moultrie
AJ on the
4
th
of May 2020 and applying the principles as referred to,
inter
alia
,
in the matter of
Naidoo
,
this Court may be justified in acting,
mero
motu
,
to vary the said order in terms of subsection 149(2) of the Act.
Indeed, it was never submitted by any of the parties to this
matter
that should the Applicant’s application be dismissed this Court
would be unable to do so.
[89]
Having
regard to all of the relevant facts pertaining to this matter, it is
the finding of this Court that it would be just and
equitable for
this Court, in the exercise of its discretion, to vary the order
granted by Moultrie AJ on the 4
th
of May 2020 in terms of subsection 149(2) of the Act. The form of
this order and the reasons therefor (where applicable) will be
dealt
with hereunder. In exercising its discretion to vary the order as
aforesaid, it is important to note (as dealt with above)
the broad
discretion granted to this Court in terms of subsection 149(2) of the
Act to do so.
[90]
In the
first instance, the variation of the order rectifies the mistake made
by Moultrie AJ when granting the final order of sequestration
of the
Applicant’s estate on the 4
th
of May 2020 without first granting a provisional order of
sequestration. At the same time, such a variation makes clear,
without
doubt, that the actions of the Bank in moving for a final
order of sequestration, in direct conflict with the peremptory
provisions
of the Act pertaining to sequestration orders, should not
be countenanced. The variation of the order granted by Moultrie AJ on
the 4
th
of May 2020 should also act as a clear indication to petitioning
creditors; insolvency practioners and legal representatives alike,
that the provisions of subsection 9(5) of the Act can never be
interpreted to be so wide-ranging as to give a court the authority
to
grant a final order of sequestration of a debtor’s estate
without first granting a provisional order of sequestration.
[91]
With regard
to the facts of this particular case, a variation of the order at
this stage from a final order of sequestration to
a provisional order
of sequestration plays a dual role. Not only does it rectify the
mystifying actions of the Bank in applying
for a final order of
sequestration without first applying for a provisional order of
sequestration but it also takes into consideration
the fact that the
Applicant considerably delayed taking any positive action to rectify
those actions. The variation of the order
from a final to a
provisional order of sequestration not only (with suitable orders in
addition thereto) maintains the
status
quo
but
also enables the provisions of sections 11 and 12 of the Act to be
complied with.
[92]
Returning
to the relief sought by the Bank in the conditional
counter-application, if the order of Moultrie AJ was varied by this
Court from a final to a provisional sequestration order, the Bank
sought additional orders to the effect that the provisional order
should be deemed effective from the 4
th
of May 2022,
alternatively
,
the Bank sought a declarator that all steps taken by the First and
Second Respondents be deemed to be valid.
[93]
The
consequences of the final sequestration order granted by Moultrie AJ
were that:-
93.1
Firstly,
the Master appointed the First and Second Respondents provisionally.
Thereafter, creditors appointed the First and Second
Respondents
finally.
93.2
Secondly,
on the basis of those appointments the First and Second Respondents
took various steps to administer the insolvent estate
and to comply
with their duties in terms of the Act. As already noted, assets were
sold to third parties; the Bank advanced funding
for the
administration of the estate; legal proceedings were instituted and
interim dividends were paid to the Bank.
93.3
Thirdly,
all interested parties, including the Applicant, accepted the
insolvent estate and engaged and/or participated in the estate
on
that basis.
[94]
The purpose
of these declaratory orders are clear. It is to preserve the factual
position on the Applicant’s status as an
insolvent that has
existed since 4 May 2020. A variation order would operate with effect
from the date that the original order
was granted.
[95]
This
factual position was accepted by all interested parties, including
the Applicant. There is further no suggestion by the Applicant
that
his status as an insolvent is incorrect or that his estate should not
have been provisionally sequestrated. Instead, the dispute
is limited
to the contention that it should not have been
finally
sequestrated.
[96]
The
additional relief sought by the Bank was thus to preserve the
Applicant’s status as an insolvent for the period between
4 May
2020 until the date of the variation,
alternatively,
to preserve the steps taken by the First and Second Respondents for
the same period.
[97]
In the
premises, it must follow that the additional relief should be
incorporated into the Court’s order. In this manner it
will be
ensured that the Applicant’s present status remains the same
whilst giving effect to the provisions of the Act. As
to the nature
of this additional relief, same will be to preserve the Applicant’s
status as an insolvent for the period between
4 May 2020 until the
date of the variation (the date of this judgment). In this way the
status
quo
is
maintained whilst at the same time this Court makes no order in
respect of the steps taken by the First and Second Respondents
for
the same period. Not only is this Court not in a position to do so
but to grant such an order as set out in the Bank’s
Notice of
Motion in the counter-application
(in
the alternative)
could potentially act as a bar to the Applicant (or any other party)
seeking redress for any alleged maladministration of the Applicant’s
insolvent estate.
The
relief sought by the Applicant as set out in paragraphs 3 and 4 of
the Notice of Amendment amending the Applicant’s Notice
of
Motion
[98]
In
paragraph 3 of the Applicant’s Notice of Amendment the
Applicant seeks an order that the First and Second Respondents render
a full accounting to this Court of their administration of the
Applicant’s estate. Whilst the Applicant has complained of
an
alleged maladministration of his insolvent estate on the part of the
First and Second Respondents, there was no real basis for
this
particular relief set out by the Applicant in the application papers
before this Court. What did arise was a genuine and
bona
fide
dispute of fact between the respective parties in relation to whether
or not the First and Second Respondents had properly administered
the
Applicant’s estate. In addition, this Court is of the opinion
that should the Applicant require further information he
may, apart
from his common law rights, properly obtain same through the
mechanisms of the Act and the various remedies available
to him as
contained therein. Moreover, in light of this Court’s findings
as set out above, with particular reference to the
fact that it would
be just and equitable for this Court to vary the order granted by
Moultrie AJ along the lines of that sought
by the Bank in the
conditional counter-application, the relief sought by the Applicant
in paragraph 3 of the Applicant’s
Notice of Amendment must, by
implication, be excluded thereby. In the premises, this Court
declines to grant the Applicant the
said relief. In light of the fact
that the relief sought by the Applicant in paragraph 4 of the same
Notice of Amendment is dependent
upon the granting of the relief in
paragraph 3 thereof, this relief must fall away.
Costs
General
principles
[99]
It is trite
that the question of costs falls within the discretion of the Court
and that, unless exceptional circumstances exist,
costs would
normally follow the result. That said, it is not the intention of
this Court to burden this judgment unnecessarily
by setting out a
lengthy rendition either of the multitude of decisions by our courts
dealing with the issue of the awarding of
costs or the various legal
principles enunciated therein.
The
Applicant’s application
[100]
This
application was unsuccessful and must be dismissed. As clearly set
out in this judgment the reasons therefore were based primarily
on
the fact that the Applicant misconstrued the basis upon which the
application should have been brought. The order granted by
Moultrie
AJ on the 4
th
of May 2020 was clearly a mistake but it was not a nullity. As such,
it stood until it was either varied or set aside. In the premises,
it
was not competent for the Applicant to seek the relief that he did
that the order of Moultrie AJ be declared a nullity and be
set aside
by this Court on that basis alone. What should have happened was for
the Applicant to seek competent relief from this
Court, in terms of
Rule 42 of the Uniform Rules of Court,
alternatively
,
the common law,
alternatively
,
the Act, whereby this Court could set aside,
alternatively
,
vary, the order granted by Moultrie AJ on the 4
th
of May 2020.
[101]
However,
whilst the Applicant may not have been successful in the application,
sight should not be lost of the fact that the Bank
had obtained an
order finally sequestrating the Applicant’s estate to which it
was clearly not entitled and which, to make
matters worse, was then
granted by mistake. Following thereon, in terms of this order
(granted by mistake but not a nullity) the
First and Second
Respondents (presumably experts in the Laws of Insolvency and all
matters ancillary thereto) accepted their appointments
as provisional
Trustees of the Applicant’s estate by way of an order clearly
granted by mistake and happily proceeded to
confidently commence with
the sequestration of the Applicant’s estate, even increasing
the costs of sequestration by,
inter
alia,
incurring
legal costs with the institution of an application for the extension
of their powers in terms of subsection 18(3) of the
Act and the
institution of the application in Scotland.
[102]
So, on the
one hand, whilst it was correctly pointed out that there was an undue
and unjustified delay on the part of the Applicant
in instituting his
application to set aside the order granted by Moultrie AJ, it is also
true that not only did the Bank deliberately
seek an order to which
it was not entitled but, having been granted that order by mistake,
did nothing to rectify the situation
until it was forced to do so by
the institution of the Applicant’s application. Likewise, the
First and Second Respondents
took no positive action to rectify the
order granted by mistake and in terms of which they had been
appointed. In this regard,
it would appear that the application
papers before this Court are devoid of any indication whereby the
First and Second Respondents
may have sought directions from the
Master in respect thereof. Certainly, no such actions were ever
brought to the attention of
this Court during the course of argument.
[103]
To make
matters worse, once faced with the Applicant’s application to
set aside the order erroneously granted, the First and
Second
Respondents vehemently opposed the granting of such relief largely
based on the grounds that the Applicant should be declared
a fugitive
from justice and thus lacked the requisite
locus
standi
to institute the application. This opposition has not been upheld by
this Court for the reasons as set out earlier in this judgment.
Equally difficult to explain is the conduct of the Applicant when
faced with the relief sought by the Bank in the Bank’s
counter–application. At that (
albeit
rather late) stage, it should have been abundantly clear to the
Applicant that the relief sought by the Bank therein was not only
based upon solid grounds but was imminently reasonable. What should
have followed was a withdrawal of the application and a settlement
of
the entire dispute between the parties in terms of an appropriate
order gleaned from the Bank’s counter-application. Instead,
this Court was burdened with the lengthy hearing of a Special Motion
preceded by lengthy application papers.
[104]
When
considering the award of costs insofar as same is applicable to the
Applicant’s application, this Court has not lost
sight of the
fact that apart from dismissing the application on the basis that the
Applicant was not entitled to the declaratory
relief as set out above
the Court has also dismissed the application on the basis that the
Applicant was not entitled to the further
relief sought in paragraphs
3 and 4 of the Notice of Amendment. However, this Court regards the
issues involved when deciding whether
or not to grant this latter
relief as relatively minor when compared to those which demanded the
focus of this Court both prior
to and in the finalization of this
matter. In the premises, the refusal by this Court to grant to the
Applicant this latter relief
has no material bearing on the issue of
costs.
[105]
Having
regard to all of the aforegoing factors, it is the opinion of this
Court, in the exercise of its discretion, that it would
be just and
equitable if this Court made an order whereby each party paid their
own costs. Insofar as the First and Second Respondents
are concerned,
for the reasons set out above, together with the fact that there is
no reason why the estate of the Applicant should
be burdened any
further by the incurring of legal costs, these costs will be paid by
the First and Second Respondents in their
personal capacities.
The
application by the First and Second Respondents that the First
Respondent deliver a further affidavit
[106]
In respect
of this application it was held that the First Respondent was
entitled to deliver a further affidavit in the application.
This
application was not formally opposed by the Applicant but was opposed
at the hearing. As such, the Applicant should pay the
costs of that
application.
The
conditional counter-application by the Bank
[107]
Whilst no
order was made in terms of this conditional counter-application from
a formal or technical perspective, it is clear from
this judgment
that this Court was greatly assisted thereby. In that respect it can
be accepted that this application was successful.
The only criticism
in respect thereof was that it should have been instituted earlier.
In this regard the actions of the Bank in
seeking an impermissible
order; the conduct of the Bank once the order was granted by mistake
and the failure of the Bank to react
sooner in seeking and/or
attempting to agree with the Applicant, together with the First and
Second Respondents, to a suitable
order varying the order granted by
Moultrie AJ by mistake, have all been dealt with earlier in this
judgment. With regard to the
present issue of costs the costs order
granted in respect of the Applicant’s application, as set out
above, caters adequately
therefor. In the premises, there is no
reason to deprive the Bank from its costs in respect of the
counter-application and the
Applicant is ordered to pay the Bank’s
costs in respect thereof.
Order
[108]
This Court
makes the following order:-
1.
The First
Respondent is granted leave to deliver the further affidavit annexed
to the First and Second Respondents’ Notice
in terms of Rule
6(5)(e) of the Uniform Rules of Court;
2.
The
Applicant is to pay the costs of the application by the First and
Second Respondents for the relief as set out in paragraph
1 hereof;
3.
The
application instituted by the Applicant is dismissed and the Court
specifically declines to grant the relief sought by the Applicant
in
paragraphs 1, 3 and 4 of the Applicant’s Notice of Amendment
dated the 10
th
of August 2022;
4.
The
Applicant; First Respondent; Second Respondent and Third Respondent
are to pay their own costs in respect of the application
referred to
in paragraph 3 hereof;
5.
In respect
of the costs payable by the First and Second Respondents in terms of
paragraph 4 hereof, these costs are to be paid by
the First and
Second Respondents in their personal capacities and are not to be
paid from the administration of the Applicant’s
insolvent
estate;
6.
The order
of Moultrie AJ dated 4 May 2020 under case number 41681/2019 is
varied to read as follows:
“
1.
The estate of Eamonn Courtney
(“the Respondent”) is placed under provisional
sequestration in the hands of the Master of the High Court.
2.
The Respondent and any
other party who wishes to avoid such an order being made final,
are
called upon to advance the reasons, if any, why the court should not
grant a final order of sequestration of the said estate
on the 27
th
day of February 2023 at 10.00 or as soon thereafter as the matter may
be heard.
3.
A copy of this order must
forthwith be served –
3.1
on the Respondent by way
of service on his attorneys of record Gothe Attorneys Incorporated
situated at 225 Muller Street, Queenwood, Pretoria;
3.2
on the employees of the
Respondent, if any;
3.3
on all trade unions of
which the employees of the Respondent are members, if any;
3.4
on the Master;
3.5
on the South African
Revenue Services.”
4.
The costs of this
application are to be costs in the administration of the Respondent’s
estate. “:
7.
The
provisional sequestration order granted in terms of paragraph 6
hereof will be deemed effective as from 4 May 2020;
8.
The
Applicant is to pay to the Third Respondent the costs of the Third
Respondent’s conditional counter-application, such
to include
the costs of two (2) Counsel.
B. C. WANLESS
Acting Judge of the High
Court
Gauteng Division,
Johannesburg
Heard
:
10 August 2022
Judgment
:
20 December 2022
Appearances
For
Applicant
:
Adv. JG Smit
Instructed
by
:
Gothe Attorneys Inc.
For
First/Second Respondents
:
Adv. S Symon SC
Instructed
by
:
Cox Yeats
For
Third Respondent
:
Adv. A Subel SC (with Adv. A Foster)
Instructed
by
:
Cox Yeats
[1]
Bader v Weston
1967 (1) SA 134
(C) at
138D; Dickinson v South African General Electric Co (Pty) Ltd
1973
(2) SA 620
(AD) at 628F; Cohen NO v Nel
1975 (3) SA 963
(WLD) at
970B; Dawood v Mahomed
1979 (2) SA 361
(D & CLD) at 365H;
Nampesca (SA) Products (Pty) Ltd v Zaderer
1999 (1) SA 886
(CPD) at
892J-893A; Dhladhla v Erasmus
1999 (1) SA 1065
(LCC) at 1072D; South
Peninsula Municipality v Evans
2001 (1) SA 271
(CPD) at 283A-H.
[2]
Section 34 of the
Constitution:
Access
to
courts.
- Everyone has the right to have any dispute that can be resolved.by
the application of law decided in a fair public hearing
before a
court, or where appropriate, another independent and impartial
tribunal or forum.
[3]
1925 (WLD) 164 at 167.
[4]
1967 (1) SA 574
(AD).
[5]
1978 (1) SA 440 (TPD).
[6]
2011 (2) SA 294
(GSJ) at 301C-E.
[7]
Emphasis added.
[8]
at 300 F-I.
[9]
2017 (4) SA 80
(GP) at 32.
[10]
1987 (2) SA 716
(C) at 721A-C.
[11]
1985 (2) SA 654
(TPD) at 658H
[12]
1983
(1) SA 777 (T).
[13]
Stellenbosch Farmers’ Winery
Ltd v Stellenvale Winery (Pty) Ltd
1957 (4) SA 234
(CPD) at 235;
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA
623
(AD) at 634.
[14]
Mobil Oil Southern Africa
(Pty) Ltd v Mechin
1965 (2) SA 706(AD)
; Pillay v Krishna and Another
1946 AD.
[15]
Penderis v De Klerk 2021 JDR
0333 (Nm): In this matter and other cases cited therein the question
of onus was not specifically
dealt with but it is clear from a
reading thereof that those matters were decided on the basis of the
fact that evidence had
to be placed before the courts to show, on a
balance of probabilities, that the party was indeed a fugitive from
justice.
[16]
Emphasis
added.
[17]
Emphasis
added.
[18]
Emphasis added.
[19]
See the relief sought by the
Applicant in paragraph 1 of the Amended Draft Order.
[20]
2021 (3) SA 135
(SCA) at
[34].
[21]
2012 (3) SA 325 (SCA).
[22]
Emphasis added.
[23]
Emphasis added.
[24]
Subsection 9(3) amended by
subsection 6(b) of Act 16 of 1943 (wef 19 April 1943) and
substituted by section 2 of Act 99 of 1965
(wef 7 July 1965) and by
section 1 of Act 122 of 1993 (wef 1 September 1993).Subsection (4A)
inserted by section 2 of Act 69
of 2002, date of commencement 1
January 2003.
[25]
Section 11 substituted by section
3 of Act 69 of 2002 (wef 1 January 2003).
[26]
2012 (4) SA 593
(SCA
)
at paragraph [18].
[27]
Paragraph [55] ibid.
[28]
2021 (11) BCLR 1263 (CC).
[29]
At paragraph [62].
[30]
First National Bank of SA Ltd v Van
Rensburg NO and Others
1994 (1) SA 677
(T); Ngutshane v Standard
Bank of South Africa Ltd & Others (31843A/2012) [2013] ZAGPPHC
421 (6 December 2013).
[31]
Van Rensburg NO. (supra) at 681 F-H.
[32]
2021 (3) SA 135 (SCA).
[33]
2012 (3) SA 325 (SCA)
[34]
2017 (2) SA 622 (CC).
[35]
At paragraph [180]; Emphasis added.
[36]
At paragraph [197].
[37]
Paragraph [34].
[38]
(2022) 43 ILJ 1019 (CC) at [23] to
[26]
[39]
2012 (1) SA 143
(GNP) at paragraph
[4] at page 152 of the judgment.
[40]
Meskin’s Law of Insolvency,
paragraph 15.1.6.2.
[41]
Ibid.
[42]
Mars: The Law of Insolvency in South
Africa, 10th Edition, 2019, paragraph 6.1.1, page 171 and the cases
cited therein.
[43]
Zadi v Body Corporate of Outeniqua
2011 JDR 1096 (GNP) paragraph 5 at page 5.
sino noindex
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