Case Law[2024] ZASCA 24South Africa
Murray and Others NNO v Ntombela and Others (729/2022) [2024] ZASCA 24; [2024] 2 All SA 342 (SCA); 2024 (4) SA 95 (SCA) ( (14 March 2024)
Supreme Court of Appeal of South Africa
14 March 2024
Headnotes
Summary: Review – whether it is competent for a court to compel delivery of a rule 53 record before determining whether what is before it is a review as contemplated in rule 53 when this is placed in issue in limine by the adversary.
Judgment
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## Murray and Others NNO v Ntombela and Others (729/2022) [2024] ZASCA 24; [2024] 2 All SA 342 (SCA); 2024 (4) SA 95 (SCA) ( (14 March 2024)
Murray and Others NNO v Ntombela and Others (729/2022) [2024] ZASCA 24; [2024] 2 All SA 342 (SCA); 2024 (4) SA 95 (SCA) ( (14 March 2024)
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sino date 14 March 2024
FLYNOTES:
CIVIL PROCEDURE – Review – Record –
Respondents
alleging they had purchased property – Obtaining order for
stay of sale by liquidators pending review of
liquidators’
decision – High Court ordering delivery of Rule 53 record to
respondents when liquidators asserting
that proceedings before it
were not proper review – Once jurisdiction of court before
which review proceedings are
pending is beyond question the reach
of Rule 53 becomes unavoidable – Court not at this stage
called upon to enter
into substantive merits of review proceedings
– Appeal dismissed – Uniform Rule 53.
THE SUPREME COURT OF
APPEAL OF SOUTH AFRICA
### JUDGMENT
JUDGMENT
Reportable
Case no: 729/2022
In the matter between:
CLOETE MURRAY N
O FIRST
APPELLANT
GERT LOUWRENS STEYN DE
WET N O SECOND
APPELLANT
MAGDA WILMA KETS N
O
THIRD APPELLANT
(In their capacities
as joint liquidators of
Phehla Umsebenzi
Trading 48 CC (in liquidation))
and
MADALA LOUIS DAVID
NTOMBELA
FIRST RESPONDENT
SEFORA HIXSONIA
NTOMBELA
SECOND RESPONDENT
HUGO & TERBLANCHE
AUCTIONEERS
THIRD RESPONDENT
Neutral
citation:
Murray and Others
NNO v Ntombela and Others
(729/2022)
[2024] ZASCA 24
(14 March 2024)
Coram:
PETSE DP and MABINDLA-BOQWANA and MOLEFE JJA and
KATHREE-SETILOANE and KEIGHTLEY AJJA
Heard:
24 August 2023
Delivered:
14 March 2024
Summary:
Review – whether it is competent
for a court to compel delivery of a rule 53 record before determining
whether what is before
it is a review as contemplated in rule 53 when
this is placed in issue
in limine
by the adversary.
### ORDER
ORDER
On
appeal from:
Free State Division of the
High Court, Bloemfontein (Opperman J, sitting as court of first
instance):
The appeal is dismissed
with costs.
### JUDGMENT
JUDGMENT
Petse DP
(Mabindla-Boqwana and Molefe JJA concurring):
[1]
The issue in this appeal is whether the
Free State Division of the High Court, Bloemfontein (the high court)
was correct in compelling
delivery of a rule 53 record at the
instance of the applicants in a review application (the respondents
in this appeal) in the
face of an assertion by the appellants who
were the respondents in the high court, that the proceedings before
it were not a proper
review as contemplated in rule 53, before
deciding the anterior question of whether what served before it were
in truth review
proceedings.
[2]
The facts in this case are largely common
cause and can be briefly stated. The three appellants, Mr Cloete
Murray N O, Mr Gert Louwrens
Steyn De Wet N O and Ms Magda Wilma Kets
N O, (the first to third appellants respectively) are joint
liquidators (the liquidators)
of Phehla Umsebenzi Trading 48 CC (in
liquidation) (Phehla Umsebenzi). The first and second respondents, Mr
Madala Louis David
Ntombela and Ms Sefora Hixsonia Ntombela, (the
respondents) are married to each other in community of property. The
third respondent,
Hugo & Terblanche Auctioneers, did not take
part in the litigation both in the high court and this Court. On 6
August 2015,
the respondents allegedly purchased immovable property
(the property) from Phehla Umsebenzi for a purchase price of
R2 500 000.
This amount was alleged to have been paid to
the members of Phehla Umsebenzi, even before the agreement was
signed. The property
was, however, not transferred to the
respondents’ names and still remains in Phehla Umsebenzi's
name.
[3]
A couple of years went by without the
transfer being effected. From 2015 to 2019, the respondents made
relentless enquiries from
Phehla Umsebenzi concerning the inordinate
delay in transferring the property to them. They were informed by the
transferring attorneys
that the seller had not signed the transfer
papers. In addition, the transferring attorneys indicated that they
were experiencing
problems in obtaining clearance figures from the
Mangaung Metropolitan Municipality, due to a debt owed to the latter
by Phehla
Umsebenzi. The transferring attorneys nevertheless assured
the respondents that transfer would take place as soon as those
issues
were resolved.
[4]
In 2019, the first respondent decided to
engage his own attorneys and instructed them to follow up with the
transferring attorneys
as to the causes of the delay in passing
transfer. This intervention failed to bear fruit. On 21 November
2019, the respondents'
attorneys were informed that Phehla Umsebenzi
was in business rescue. It, however, later transpired that Phehla
Umsebenzi had been
placed in liquidation since 6 June 2018. This
occurred whilst the property was still registered in its name, thus
placing the property
firmly in the hands of the liquidators.
[5]
The liquidators elected not to transfer the
property into the respondents' names but, instead, sought to sell it
on auction. This
then prompted the respondents to apply to court for
an order staying the sale (on auction) pending an application to
review and
set aside the liquidators’ decision, which stay was
granted. The respondents thereafter brought an application to review
and set aside the liquidators’ decision. They also sought an
order directing the liquidators to sign all transfer papers
necessary, to enable the Deeds Offices to transfer the property to
them.
[6]
In
reaction to the review application, the liquidators delivered a rule
6(5)
(d)
(iii)
[1]
notice, simultaneously with their answering affidavit, questioning
the legal competence of the respondents’ review application.
This was firstly on the basis that the liquidators had neither
exercised a public power nor performed a public function in terms
of
any empowering statutory provision, when making their decision.
Secondly, the liquidators asserted that in terms of the prevailing
legal position, specific performance could not be ordered against a
liquidator – which is the substance of the relief sought
by the
respondents – in circumstances where that would have the effect
of negating the fundamental purpose of a
concursus
creditorum
.
[7]
The respondents riposted by lodging a rule
30/30A interlocutory application, seeking the setting aside of the
liquidators’
rule 6(5)
(d)
(iii)
notice on the grounds that such notice constitutes an irregular step.
They also sought an order compelling the liquidators
to file the
record of the proceedings relating to the impugned decision in terms
of rule 53(1)
(b)
.
[8]
The high court determined that the only
matter before it was the interlocutory application brought by the
respondents. Having heard
argument, it found in the respondents'
favour, stating that the full record of the proceedings was
fundamental to the full ventilation
of the issues raised in the
review proceedings as contemplated in rule 53. It referred to rule
53(4), which states that, upon the
record being made available, an
applicant may amend, add to or vary its notice of motion and
supplement the founding affidavit.
Therefore, the high court
reasoned, it was not open to the liquidators to invoke rule
6(5)
(d)
(iii),
as the review proceedings had not reached a stage where the
applicants in the review application (ie the respondents in this
appeal) have been afforded the opportunity to exercise their
procedural right to supplement their founding affidavit in the review
application in terms of rule 53. In its view, the question whether
the rule 53 application was the correct and appropriate way
to
challenge the decision of the liquidators can competently be
determined only in the main application once the required record
has
been produced. Accordingly, it concluded that the delivery of the
rule 6(5)
(d)
(iii)
notice by the appellants was premature.
[9]
In
this Court, the liquidators submitted that the respondents'
entitlement, if any, to receive a record in terms of rule 53(1)
(b)
only
arises once it is established, as a jurisdictional fact, that the
proceedings sought to be reviewed and in respect of which
the
production of a record relates, are reviewable. In support of this
submission, they initially pinned their faith on the decision
of the
Constitutional Court in
Competition
Commission of South Africa v Standard Bank of South Africa
Limited
.
[2]
[10]
On this score, the liquidators contended
that the right to demand the production of a record as envisaged and
provided for in rule
53(1)
(b)
would arise only upon the determination by the
high court that the appellants’ election not to render
performance in terms
of the contract concluded by Phehla Umsebenzi
prior to its liquidation, constitutes administrative action and
therefore susceptible
to review.
[11]
Secondly, they asserted that the high court
was enjoined to adjudicate and pronounce upon the competency of the
relief claimed by
the respondents in the review application, namely,
whether the respondents’ claim for specific performance against
the appellants
as liquidators is legally competent, before any
decision could be made to compel the production of a record in terms
of rule 53.
[12]
In
Standard
Bank
[3]
,
the Constitutional Court held that a court ought not to order the
production of a rule 53 record prior to the court first determining
the question whether it has the requisite jurisdiction to entertain
the claim asserted by an applicant in the first place. In this
regard, the Court reasoned thus:
‘
.
. . Where the jurisdiction of the court before which a review
application is brought is contested, a ruling on this issue must
precede all other orders. This is because a court must be competent
to make whatever orders it issues. If a court lacks authority
to make
an order it grants, that order constitutes a nullity. . . .
By its
very nature, rule 53 of the Uniform Rules finds application where
review proceedings are instituted before a competent court.
. . .
Therefore,
the rule enables an applicant to raise relevant grounds of review,
and the court adjudicating the matter to properly
perform its review
function. However, for a court to perform this function, it must have
the necessary authority. It is not prudent
for a court whose
authority to adjudicate a review application is challenged to proceed
to enforce rule 53 and order that disclosure
should be made, before
the issue of jurisdiction is settled. The object of rule 53 may not
be achieved in a court that lacks jurisdiction.’
[4]
[13] However,
before us counsel for the liquidators disavowed any reliance on
Standard Bank
and conceded that that decision could not avail
the liquidators in the context of the facts of this case. In my view,
counsel acted
wisely in so doing for reasons that will become
apparent later.
[14]
In the view I take of the matter, this Court – as was the high
court – is not at this stage called
upon to enter into the
substantive merits of the review proceedings. Rather, what this Court
is seized with is the interlocutory
application brought by the
respondents (as applicants) for an order directing the liquidators
(as respondents) to provide them
with the record of their decision
not to implement the executory contract concluded between Phehla
Umsebenzi
and the respondents in relation
to certain immovable property prior to the winding-up of the former.
On this score, my line of thinking
is relatively straightforward and
will be made plain in the paragraphs that follow.
[15]
In electing not to perform in terms of the sale agreement, the
liquidators invoked the decision of this Court in
Bryant
& Flanagan (Pty) Ltd v Muller and Another NNO
[5]
in which the following was stated:
'[A]
liquidator of a company in liquidation (see s 339 of the Companies
Act 61 of 1973) is invested with a discretion to abide by
or
terminate an executory agreement not specifically provided for in the
Insolvency Act, which had been concluded by the company
in
liquidation before its liquidation. Such agreement does not terminate
automatically on the company being placed in liquidation...
The
liquidator must make his election within what, regard being had to
the circumstances of the case, is a reasonable time. Should
he elect
to abide by the agreement the liquidator steps into the shoes of the
company in liquidation and is obliged to the other
party to the
agreement to [tender] whatever counter-prestation is required of the
company in terms of the agreement.
[6]
[16]
Against the foregoing backdrop, the liquidators contended that in
deciding to resile from the relevant agreement,
they were not
exercising a public power or performing a public function. Rather, so
they asserted, they were performing a private
law function and that
their powers to do so derived from s 386 of the Companies Act.
[7]
Therefore, it was argued, the election of the liquidators – not
to carry on with the relative agreement – is not reviewable
because if this were permissible that would 'result in the
interference [with] the rights of creditors after [the] date of
institution
of the
concursus
creditorium
,
contrary to the prevailing legal position.' And, since the
liquidators' election entails that review proceedings are not
competent,
no obligation arises to produce a record under rule 53 of
the Uniform Rules because such an obligation 'arises only once review
jurisdiction has been established by the party seeking to compel the
production of a record under Uniform Rule 53(1)(b).'
[17]
Differently put, the main thrust of the liquidators' defence in the
review application is that as a consequence
of the crystallisation of
the estate of the seller (ie Phehla Umsebenzi), the relief sought in
the respondents' (qua applicants)
review application is legally
incompetent. And insofar as the respondents' interlocutory
application to compel delivery of the
record is concerned, the
liquidators further contended that in any event none exists and,
consequently, there is nothing to produce.
I pause here to observe
that having accepted that their powers in the course of the
winding-up process derive from s 386 of the
Companies Act, the
liquidators' contentions are to my mind plainly unsustainable
principally because they contain seeds of their
own destruction. I
shall elaborate on this later.
[18]
I agree with some of the contentions advanced by the liquidators to a
point. However, on balance I consider that
their overall thrust in
seeking to have their grounds of opposition to the relief sought in
the review application determined before
the rule 53 record is
provided, cannot, in the context of the facts of this case and indeed
what is at the core of this appeal,
be upheld. The reasons that impel
the conclusion reached in this judgment will become apparent in a
moment.
[19]
As I see it, the logical starting point is rule 53 itself, which
provides for a procedure that follows as a matter
of course after the
issuance and service of a review application except in limited
circumstances where the court's jurisdiction
to hear the review
application has to be determined first.
[8]
To the extent here relevant, rule 53 provides:
'53 Reviews
(1)
Save where any law otherwise provides, all
proceedings to bring under review the decision or proceedings of any
inferior court and
of any tribunal, board or officer performing
judicial, quasijudicial or administrative functions shall be by way
of notice of motion
directed and delivered by the party seeking to
review such decision or proceedings to the magistrate, presiding
officer or chairperson
of the court, tribunal or board or to the
officer, as the case may be, and to all other parties affected—
(a)
calling upon such persons to show cause why
such decision or proceedings should not be reviewed and corrected or
set aside, and
(b)
calling upon the magistrate, presiding
officer, chairperson or officer, as the case may be, to despatch,
within 15 days after receipt
of the notice of motion, to the
registrar the record of such proceedings sought to be corrected or
set aside, together with such
reasons as the magistrate, presiding
officer, chairperson or officer, as the case may be is by law
required or desires to give
or make, and to notify the applicant that
such magistrate, presiding officer, chairperson or officer, as the
case may be has done
so.
(2)
The
notice of motion shall set out the
decision or proceedings sought to be reviewed and shall be supported
by affidavit setting out
the grounds and the facts and circumstances
upon which applicant
relies to have
the decision or proceedings set aside or corrected.
(3)
The registrar shall make available to the applicant the record
despatched as aforesaid
upon
such terms as the registrar thinks appropriate to ensure its safety,
and the applicant shall
thereupon cause copies of such portions of
the record as may be
necessary for the purposes of the review to be made and shall furnish
the registrar with two copies and each
of the
other parties with one copy thereof, in each case certified
by the
applicant as true copies. The
costs of transcription, if any, shall be borne by the
applicant and
shall be costs in the
cause.
. . .'
[20]
Dealing with a situation comparable to what obtains in this case,
this Court made the following pertinent remarks
in
Competition
Commission v Computicket (Pty) Ltd
:
[9]
'...Moreover, upholding
the Commission's argument would give rise to a two stage enquiry on
the merits of the case: first, without
the record to determine
whether the applicant had made out a prima facie case. If the
applicant clears that hurdle, the second
stage enquiry then follows
to finally determine the merits, this time with the benefit of the
record which had now been made available.
Finally, the argument
under consideration is not supported by Rule 53. In terms of this
rule, the obligation to produce the record
automatically follows upon
the launch of the application, however ill-founded that application
may later turn out to be.
' (Emphasis added.)
As to the first issue, it
suffices for now to observe that the essence of the liquidators' case
in this appeal is that the merits
of the review application must, in
the light of the contentions advanced in their rule 6(5)
(d)
(iii)
notice, be determined upfront without the benefit of the record
required by the respondents.
[21]
The passage quoted from
Computicket
in the preceding paragraph was referred to with approval and endorsed
by Theron J in
Standard
Bank
.
[10]
The learned Justice stated the following:
'This
finding
[11]
is entirely
consistent with what the Supreme Court of Appeal and this Court have
said about the importance of the rule 53 record
and its availability
to litigants. This is because a distinction must be made between the
jurisdiction of the forum to hear the
review application and the
merits of the review application. If a review application is launched
in a forum that enjoys jurisdiction,
then a party is entitled to the
record even if their grounds of review are meritless. As the Supreme
Court of Appeal put it, "the
obligation to produce the record
automatically follows upon the launch of the application, however
ill-founded that application
may later turn out to be". This is
because, as recognised by the majority decision in
Helen
Suzman
,
rule 53 envisages the grounds of review changing after the record has
been furnished. The record is essential to a party’s
ability to
make out a case for review.
It
is for this reason that a prima facie case on the merits need not be
made out prior to the filing of [the] record
.
I
accept that there are good reasons for the obligation to produce the
record following automatically upon the launching of a review
application. Delaying the production of the record is inimical to the
exercise of the courts’ constitutionally mandated review
function. A lengthy delay may impede the courts’ ability to
assess the lawfulness, reasonableness and procedural fairness
of the
decision in question and undermine the purpose of judicial review.
One reason for this is that documents and evidence, which
should be
included within the rule 53 record, may be lost if there is a
considerable delay in the production of the review record.
This does
not, however, imply that a court should order production of a rule 53
record without first determining its competence
to hear the review
application.'
[12]
(Emphasis
added.)
Although Theron J was
writing for the minority, her remarks resonated with those of the
majority in the same case.
[22]
In
Van
Zyl and Others v Government of Republic of South Africa and
Others
[13]
it
was stated that review proceedings must, in the ordinary course, be
brought under rule 53 unless they otherwise fall within the
purview
of the Promotion of Administrative Justice Act.
[14]
It is well settled that the primary purpose of the rule is to
facilitate and regulate applications for review.
[15]
And what this Court said in
Jockey
Club
some
three decades ago is instructive. The Court there said the following:
'Not
infrequently the private citizen is faced with an administrative or
quasi-judicial decision adversely affecting his rights,
but has no
access to the record of the relevant proceedings nor any knowledge of
the reasons founding such decision. Were it not
for rule 53 he would
be obliged to launch review proceedings in the dark and, depending on
the answering affidavit(s) of the respondent(s),
he could then apply
to amend his notice of motion and to supplement his founding
affidavit. Manifestly the procedure created by
the rule is to his
advantage in that it obviates the delay and expense of an application
to amend and provides him with access
to the record...'
[16]
[23]
In
Johannesburg
City Council v The Administrator Transvaal and Another
[17]
a
record for purposes of rule 53 was described thus:
'The words "record
of proceedings" cannot be otherwise construed, in my view, than
as a loose description of the documents,
evidence, arguments and
other information before the tribunal relating to the matter under
review, at the time of the making of
the decision in question. It may
be a formal record and dossier of what has happened before the
tribunal,
but it may also be a disjointed indication of the
material that was at the tribunal's disposal. In the latter case it
would, I venture
to think, include every scrap of paper throwing
light, however indirectly, on what the proceedings were, both
procedurally and
evidentially
. A record of proceedings is
analogous to the record of proceedings in a court of law which quite
clearly does not include a record
of the deliberations subsequent to
the receiving of the evidence and preceding the announcement of the
court's decision. Thus the
deliberations of the Executive Committee
are as little part of the record of proceedings as the private
deliberations of the jury
or of the Court in a case before it.'
(Emphasis added.)
[24]
It is apposite at this juncture to mention that the liquidators
delivered their answering affidavit on 30 November
2020
simultaneously with a rule 6(5)
(d)
(iii)
notice. To do justice to the appellants, I consider it necessary to
quote their notice in its entirety in the footnote below.
[18]
The notice then concludes by asserting the following:
'It follows that the
applicants are enjoined from claiming specific performance against
the liquidators.'
[25] It will
be helpful to quote rule 6(5)
(d)
. It reads, to the extent here
relevant, as follows:
'...
(ii) within 15 days of
notifying the applicant of intention to oppose the application,
deliver such person's answering affidavit,
if any, together with any
relevant documents; and
(iii) if such person
intends to raise any question of law only, such person shall deliver
notice of intention to do so, within the
time stated in the preceding
subparagraph, setting forth such question.'
One pertinent observation
of fundamental importance may be made in relation to rule
6(5)
(d)
(iii). As is evident from its text, the prominent
feature of rule 6(5)
(d)
(iii) is that it may be invoked solely
when a respondent intends to raise a question of law. Thus, in
effect, it temporarily dispenses
with the need to deliver an
answering affidavit pending the determination by a court of the
question of law raised. Therefore,
it is plain from the wording of
this rule that where a respondent intends to traverse the averments
in the applicant's founding
affidavit, it should deliver an answering
affidavit. In that event, the person opposing the grant of the order
sought in the notice
of motion may also raise any question of law in
his or her answering affidavit. To my mind, it follows axiomatically
that on its
plain meaning this rule does not contemplate nor
countenance a situation where a respondent files an answering
affidavit
pari passu
with a rule 6(5)
(d)
(iii) notice.
[26]
In support of their case as foreshadowed in their rule 6(5)
(d)
(iii)
notice, the liquidators heavily relied on a long line of cases going
back more than a century ago.
[19]
I pause here to observe, as alluded to above, that before this Court
counsel for the liquidators expressly disavowed any reliance
on
Standard
Bank.
Counsel's change of tack is hardly surprising because in
Standard
Bank
the
Constitutional Court was confronted with an entirely different
situation. There, the central issue was whether it was legally
competent for the Competition Appeal Court (CAC) to order production
of a record in circumstances where its jurisdiction was contested
in
interlocutory proceedings before the CAC first determined upfront the
question whether it had the requisite jurisdiction to
entertain the
main proceedings in the first place. Whilst I have derived valuable
insights from the judgments upon which counsel
heavily relied,
[20]
it is not my intention to discuss them in this judgment for the
simple reason that given what is truly at issue in this case they
offer no assistance to the liquidators. Nevertheless, I hasten to
state that the conclusion relating to the narrow compass on which
this appeal falls to be decided, as will be explained later, took
into account the main thrust of the argument advanced by counsel
for
the liquidators.
[27] In my
judgement, the fact that the respondents' review application may well
be manifestly doomed to failure because
the relief sought therein is
legally untenable matters not at this stage. That issue will be ripe
for determination only when the
time comes for the substantive merits
of the review itself to be considered. What we are concerned with at
this stage of the proceedings,
is solely the respondents'
entitlement, as of right, to the record evidencing the decision taken
by the liquidators not to implement
the agreement of purchase and
sale allegedly concluded between Phehla Umsebenzi and the
respondents.
[28]
Lest I be misunderstood, this judgment does not say that in
circumstances where a court patently lacks jurisdiction
to even
entertain the matter, it should nevertheless go through the motions,
in a manner of speaking, and order a respondent to
provide a record
to the applicant as contemplated in rule 53(3). Far from it. Where
the very jurisdiction of the court is contested,
which is not the
case here, the court must naturally determine that issue upfront.
This, of course, is precisely what the Constitutional
Court decided
in
Standard
Bank
.
However, the facts of this case, are materially distinguishable from
those that confronted the Constitutional Court in
Standard
Bank
.
The present case is starkly different – here the high court is
indubitably empowered in terms of s 169 of the Constitution
to deal
with all manner of causes of action except those explicitly (or by
necessary implication) excluded from its jurisdiction.
[21]
Tellingly, before us counsel for the liquidators expressly disavowed
any reliance on the
Standard
Bank
decision. Rather, he unequivocally stated that the liquidators were
no longer contending that the high court had no jurisdiction
to
entertain the review application. In my view, counsel's stance in
disavowing reliance on
Standard
Bank
was, in the light of what I have already said above, perfectly
understandable. However, it bears mentioning that having made this
concession, counsel struggled to locate the point sought to be made
by the liquidators within the realm of the exception in
Standard
Bank
.
[29]
Insofar as the liquidators' assertion that they do not have the
record is concerned, it is difficult to accept
that this is indeed
the position. I say so because s 382(1) of the Companies Act
[22]
(which is still in operation notwithstanding the repeal of the 1973
Companies Act by the current Companies Act
[23]
)
provides that: 'When two or more liquidators have been appointed they
shall act jointly in performing their functions as liquidators
and
shall be jointly and severally liable for every act performed by them
jointly.' It is clear from a reading of this provision
that the
manifest purpose of s 382(1) is to ensure that joint liquidators act
jointly in whatever is required to be done in relation
to the
corporate entity being wound-up. In this case, it is common cause
that the liquidators were appointed as joint liquidators
of Phehla
Umsebenzi which was wound up by special resolution registered on 6
June 2018.
[30]
Moreover, it is common cause, on their own account, that the
liquidators took a joint decision to not perform the
contractual
obligations undertaken by Phehla Umsebenzi in terms of the sale
agreement. It therefore goes without saying that having
regard to the
fact that they are required to take decisions jointly the liquidators
must have had a meeting – whether formal
or informal – at
which their impugned joint decision was taken in whatever way such a
decision was reached. Having regard
to the fact that we have here
three liquidators – required by law to act jointly – it
is difficult to understand how
their decision not to perform Phehla
Umsebenzi's contractual obligations could have been reached without
at least one of them having
broached the topic with the others either
by way of exchange of correspondence or otherwise.
[31]
As Marais J rightly observed in
Johannesburg
City Council
[24]
,
a record as contemplated in rule 53(3) can take any form or shape.
Where the decision, for example, was taken after a long and
drawn-out
enquiry the record may well run into multiple pages. But there will
no doubt be instances – not rare – where,
as here, the
record may comprise either a single document or a few pages. That
will still constitute the record as envisaged in
rule 53(3). It
cannot, in these circumstances, be understood on what tenable basis
can it be contended that there is not a single
document in which the
joint liquidators' decision to not implement the relevant agreement
is recorded. If anything, all indications
seem to point the other way
– bearing in mind that here we have three liquidators who are
in law required to act jointly
in whatever decision or action they
take in the winding-up process – namely, that some or other
form of record exists somewhere.
It is, however, neither necessary
nor desirable for present purposes to come to a definitive conclusion
on this issue. This must
be left to the parties – should the
need arise – to ventilate this issue in their affidavits and
for the high court
to determine it.
[32] The
observation by M S Blackman et al
Commentary on the Companies Act
is instructive and, in consequence, bears mentioning. Apropos this
very topic, the learned authors have this to say:
'A person who holds an
office under the Companies Act [Close Corporation Act], which office
confers on him [or her] various powers
to enable him [or her] to
wind-up the company [close corporation]. One of these powers is the
power to bind the company's [close
corporation] estate; another is
the power to institute or defend proceedings in the company's [close
corporation] name.'
[33]
Furthermore, it is as well not to lose from sight that a liquidator
is a creature of statute; appointed by the
Master under the Companies
Act or, where applicable, the Close Corporations Act; derives his or
her powers from those Acts read
with the Insolvency Act
[25]
within whose parameters he or she is obliged to act. Therefore, in
such capacity a liquidator administers the estate of the corporate
entity in liquidation as laid down by the law
[26]
and is also statutorily bound to act under the control of the
Master
[27]
of the relevant
Division of the High Court.
[34]
For the sake of completeness, s 386
(g)
of the Companies Act which confers on a liquidator – subject to
necessary changes – the same powers set out in s 35
[28]
of the Insolvency Act also merits brief reference.
[35]
It bears emphasising that in every review proceedings contemplated in
rule 53, the applicant is entitled as of
right – derived from
rule 53(3) itself – to a record of the decision sought to be
reviewed. This, as the enduring long
line of cases demonstrates, is
designed to afford the applicant the opportunity to discern from a
perusal of the record whether
there are additional review grounds
that can be deployed to prove or disprove either party's case. And,
if it turns out that there
is any benefit to be derived from the
record or the record reveals additional grounds of review that can be
relied upon to amplify
the grounds of review, the applicant would, as
a result, be entitled as of right, to amend his or her notice of
motion and supplement
the founding affidavit. And, as the
Constitutional Court aptly put it,'. . . the rule enables an
applicant to raise relevant grounds
of review, and the court
adjudicating the matter to properly perform its review function.'
[29]
[36]
Accordingly, if at this stage, even before the record is provided to
the respondents (as applicants), the court
enters into the
substantive merits of the review itself, as the liquidators would
have it, this would have the potential to disarm
the applicants in
the review proceedings and, most likely, put paid to their quest to
review the impugned decision. The inevitable
consequence of such an
approach would not only be subversive of the respondents' rights (qua
applicants) under rule 53(3) but also
deny them their right to have
the real dispute resolved by the application of law decided in a fair
public hearing before, in this
instance, a court, in breach of the
right of access to courts entrenched in s 34
[30]
of the Constitution. In truth, what the liquidators seek to do is,
borrowing the expression used in
Computicket
,
to 'effectively place the cart before the horse' by requiring issues
that must rightly be decided in the review application itself
determined in the respondents' interlocutory application. In my
judgement, no court should countenance such a radical departure
from
a well-entrenched practice and procedure.
[37] As
already indicated and subsequently accepted by counsel for the
liquidators, the decision of the Constitutional
Court in
Standard
Bank
upon which they pinned their faith in their heads of
argument does not avail them. As I have demonstrated above, in
Standard Bank
the Constitutional Court dealt with an entirely
different question. Pertinently, at issue in that case was whether it
was competent
for the CAC to entertain an application at the instance
of a party who sought an order for the production of the record in
circumstances
where the jurisdiction of the CAC to entertain the very
application was contested by the adversary. The answer to the
question
with which the CAC was seized was entirely dependent on the
antecedent question, namely, whether the CAC had the requisite
jurisdiction
to entertain the main application in the first place.
[38]
It is trite that any order made by a court that has no jurisdiction
in any given matter is a nullity.
[31]
Therefore, absent jurisdiction, the order would amount to no more
than
brutum
fulmen
.
Hence, it was necessary that this issue be determined upfront by the
CAC before all else. That this is so is manifest from what
the
Constitutional Court said in
Standard
Bank
when it expressed itself thus:
'[f]or
a court to perform its [review] function, is must have the necessary
authority. It is not prudent for a court whose authority
to
adjudicate a review application is challenged to proceed to enforce
rule 53 and order that disclosure should be made, before
the issue of
jurisdiction is settled. The object of rule 53 may not be achieved
in
a court that lacks jurisdiction
.'
[32]
(My
emphasis.)
[39] In these
circumstances the notion that there will be cases where a respondent
in review proceedings can insist
on the determination of the
substantive merits of the review itself without the procedural
requirements of rule 53 first being
satisfied, as the liquidators in
this case would have it, would fly in the face of abiding judicial
authority and therefore untenable.
[40] As to
the fundamental importance and litigation utility of rule 53 in
review proceedings, the remarks of the Constitutional
Court in
Standard Bank
bear repeating. The Court expressed itself as
follows:
'By
its very nature, rule 53 of the Uniform Rules finds application where
review proceedings are instituted before a competent court.
The rule
was designed to serve a dual purpose of informing both the applicant
for a review and the court of what actually happened
in the process
of making the impugned decision . . . Most often than not, those on
whom decisions had an adverse impact had no
knowledge of what
transpired in the process and were placed at a disadvantage when they
sought to challenge the decision in question.
Rule 53 became a useful
tool in terms of which access to information could be achieved.'
[33]
[41]
In this case there is not even the slightest suggestion that the high
court lacks jurisdiction to entertain the
review application. On the
contrary, its jurisdiction has been accepted without question. On
this score it bears mentioning that
ordinarily the high court may
decide any constitutional matter except matters that reside within
the exclusive domain of the Constitutional
Court
[34]
or are assigned by national legislation to another court of
equivalent status to that of the high court. In addition, the high
court may hear any other matter not assigned to another court by
national legislation.
[35]
That
the appellants themselves desire that the high court itself deal with
and adjudicate the liquidators' point of law set forth
in their rule
6(5)
(d)
(iii)
notice attests to the fact that its jurisdiction is not contested. In
reality, the crux of the liquidators' case is that the
relief sought
by the respondents in their review proceedings is not only
ill-conceived but also legally untenable. That may well
be so. But
that question must – for reasons already stated – be
determined only once the review application is ripe
for hearing and
not before.
[42] As
already indicated, rule 53, which is designed specifically to
regulate review proceedings, forms an integral
part of the Uniform
Rules regulating the way proceedings in the high court generally
ought to be conducted. And, as I have demonstrated
above, the high
court has inherent jurisdiction to hear any dispute that can be
resolved by the application of the law and decided
in a fair public
hearing, save only in relation to matters assigned to other courts by
the Constitution or national legislation.
The respondents' review
application currently pending before the high court to which this
appeal pertains is not one of the exclusions.
Accordingly, in the
context of the facts of this case, the jurisdiction of the high court
can hardly be contested on any tenable
legal grounds, and any order
it may make ultimately – whether right or wrong – will
not, as a result, constitute a
nullity.
[43] As I see
it, the fundamental fallacy in the liquidators' case and approach has
all to do with timing or, put differently,
ripeness of the so-called
questions of law that they have raised in resisting the respondents'
review application. There can be
little doubt that those questions of
law are at the heart of the relief sought in the review application.
Nevertheless, it is only
when the review application is ripe for
hearing would a court have to decide whether there is merit in the
defences – including
the various questions of law –
advanced by the liquidators. That stage will be reached after the
respondents – as applicants
in the review proceedings –
have exercised their indisputable right under rule 53 – or
elect not to avail themselves
of that right – and all of the
issues have crystallised would the high court be enjoined to
adjudicate those issues.
[44] To sum
up, the substantive point made in this judgment is that once the
jurisdiction of the court before which
review proceedings are pending
is beyond question the reach of rule 53 of the Uniform Rules becomes
unavoidable. In the light of
the turn of events in and the detour
taken by this case, a postscript might be the appropriate point where
this judgment should
end. It is to say that no amount of any
legalistic acrobatics or sophistries that we have witnessed in this
case should prevail.
However, I hasten to add that this, in no way
questions counsel's probity. It is more to demonstrate that as those
well versed
in law are all aware, it often happens in litigation that
the ingenuity of lawyers to conjure up ingenious legal points is
infinite.
[45] It
remains to mention that I have had the advantage of reading the
judgment of my colleagues, Kathree-Setiloane
and Keightley AJJA.
However, I remain unpersuaded by the conclusion they have reached and
its underlying reasoning. Furthermore,
to the extent that the
liquidators' quibble about the high court's order setting aside their
rule 6(5)
(b)
(iii) notice, their complaint amounts to a red
herring. As my colleagues recognise in their minority judgment, the
high court's
order is provisional, implying that once the record is
provided in terms of rule 53 such an order, on its own terms, will
automatically
fall away. To conclude, it suffices to say that the
proposition in my colleagues' judgment that a decision taken by
liquidators
to terminate an executory contract entered into by a
liquidated company or close corporation before its winding-up is
immune from
judicial review is, with respect, simply untenable.
[46] Before
making the order, I am constrained to state that there is regrettably
a matter for adverse comment. It is
that in this case scarce judicial
resources were not utilised optimally for after two court hearings
both in the high court and
this Court during which considerable costs
must have been incurred the real dispute between the parties has yet
to be adjudicated.
This is undesirable and must be deprecated.
[47] In the
result, the following order is made:
The
appeal is dismissed with costs.
___________________________
X M PETSE
DEPUTY PRESIDENT
SUPREME COURT OF APPEAL
Kathree-Setiloane
and Keightley AJJA
(dissenting):
[48] We have
had the benefit of reading the judgment of Petse DP (the main
judgment) in this appeal. Regrettably, we
are unable to agree with
both the legal reasoning and the order made. In our view, the appeal
ought to have been upheld, with an
ancillary order remitting the main
issue in this appeal to the high court for determination.
[49] It is
important to contextualise the issues that arise in the appeal
against the litigation history of the matter.
The respondents seek to
review and set aside the election by the appellants, who are the
liquidators of an insolvent entity, to
terminate an executory
agreement for the sale of certain immovable property owned by the
insolvent entity. The parties to the agreement
of sale were the
insolvent entity and the respondents. They also seek an order
directing the appellants to sign all transfer documents
necessary to
enable transfer of the property to them.
[50] The
notice of motion was issued in terms of rule 53, with the respondents
expressly relying on PAJA as the basis
for their review. In response,
the appellants filed their notice in terms of rule 6(5)
(d)
(iii)
simultaneously with their answering affidavit. That notice identified
two points of law they intended raising as points
in limine
.
The first, recorded in paragraphs 1 to 4 of the notice, was that the
exercise of a discretion by a liquidator to resile from an
executory
agreement is not subject to judicial review. The second was that, at
common law, a party cannot order specific performance
against a
liquidator. We take the view that the appeal turns on only the first
of these points of law.
[51] In
response, the respondents filed a notice in terms of rule 30/30A.
They cited, as their complaint, that the appellants
had failed to
dispatch the record in compliance with rule 53(1)
(b)
. The
notice afforded the appellants ten days to emove the cause of
complaint. The notice was dated 21 December 2020 but was served
on 11
January 2021. The appellants did not file the record within the
specified ten days. At the end of March 2021, the respondents
instituted an application to set aside the appellants’ rule
6(5)
(d)
(iii) notice on the basis that it constituted an
irregular step (the first prayer), and to order them to comply with
rule 53(1)
(b)
within ten days from the date of the order (the
second prayer).
[52] This
interlocutory application was supported by a founding affidavit to
which the appellants answered. In it, they
asserted that the purpose
of a rule 6(5)
(d)
(iii) notice is to dispose of a point of law
prior to a hearing on the merits of a matter. According to the
appellants, what the
respondents sought to do, in the interlocutory
application, was to compel the appellants to file a record in
relation to a review
application which was the very subject of the
rule 6(5)
(d)
(iii) notice. The appellants, therefore, took
issue with the respondents’ contention that the notice
constituted an irregular
step.
[53] The
appellants further pointed out that the complaint identified in the
respondents’ rule 30/30A notice,
which preceded the
interlocutory application, was limited to a complaint about the
failure to file a record. It did not include
a complaint that the
rule 6(5)
(d)
(iii) notice was an irregular step. For this
reason, they submitted that the respondents were precluded from
seeking the relief
in the first prayer as it was not preceded by the
necessary notice.
[54] The
appellants also took issue with the respondents’ failure to
comply with the time periods prescribed in
rule 30(2)
(c)
. That
rule requires an application to be made to court no more than 15 days
after the expiry of the period afforded to a party
to regularise an
irregular step identified in a rule 30 notice. The appellants
recorded that the interlocutory application was
served well after
this prescribed period.
[55] The
appellants submitted to the high court that, before it could order
them to supply the record, in terms of prayer
2 of the interlocutory
notice of motion, the court would first have to determine whether the
review application was competent.
In other words, the high court
would have to decide the first of the two legal issues raised by the
appellants in their rule 6(5)
(d)
(iii) notice. The high court
declined to do so. It opted instead to work from the premise that the
respondents had a right to access
the court with a review application
and that it was for the review court ultimately to decide the
viability of the review.
[56] The high
court found that the appellants’ rule 6(5)
(d)
(iii)
notice was premature as the respondents’ founding affidavit in
the review application was not ‘complete’.
It held that
only after the record had been supplied and the founding affidavit
supplemented, would it be procedurally permissible
to file a notice
under rule 6(5)
(d)
(iii). The high court made an order
provisionally setting aside the rule 6(5)
(d)
(iii) notice, and
giving the appellants leave to file it within ten days of any
supplementary founding affidavit filed by the respondents.
It also
ordered the appellants to make the record available to the
respondents within 15 days of the date of the order.
[57] The core
question in this appeal is whether the high court was correct in
refusing to entertain the legal question
of whether the exercise of a
liquidator’s discretion to resile from an executory agreement
is administrative action, and
hence reviewable under PAJA. Following
from this, was the high court correct in setting aside the rule
6(5)
(d)
(iii) notice as an irregular step, and ordering the
appellants to supply the record as a prerequisite for the
consideration of that
legal issue? The main judgment takes the view
that the high court acted correctly in doing so. We do not agree.
[58] The main
judgment is premised on three essential pillars. First, it finds,
based on Standard Bank, that the only
exception to the general rule
that an applicant for judicial review is automatically entitled to
the record is where the court’s
jurisdiction is challenged.
[59] Second,
the main judgment highlights that the case of Standard Bank is
distinguishable from this appeal. This is
because that case involved
a challenge to the review jurisdiction of the Competition Appeal
Court. In this appeal, on the contrary,
the appellant accepts that
the high court has review jurisdiction, and for this reason it
expressly disavows reliance on Standard
Bank. The main judgment finds
that this is fatal to their appeal.
[60] Third,
and again with reference to
Standard Bank
, together with
Computicket
, the main judgment emphasises that an applicant in
review proceedings has an automatic right to the record, prior to a
court’s
determination on the merits of the matter, and
regardless of how groundless those merits may be. The main judgment
characterises
the appellants’ case as subversive to this
established principle by insisting that the merits of the review
should be weighed
without the respondent having the benefit of the
record. In other words, the main judgment interprets the issue raised
by appellants
in their rule 6(5)
(d)
(iii) as requiring the
court to enter the merits of the matter.
[61] We take
no issue with the finding in the main judgment that the case of
Standard Bank is distinguishable from this
matter on the basis that
it concerned the issue of whether the court in question had
jurisdiction to entertain the review. We agree
that there is no
dispute that the high court in this appeal has review jurisdiction.
The appellant correctly placed no reliance
on that case for this very
reason. However, we disagree that this is fatal to the appeal.
[62] We also
take no issue with the main judgment’s exposition of the
general principle that an applicant is entitled
as of right to access
to the record of the decision under rule 53(3) (the general
principle). The main judgment correctly articulates
the purpose of
this rule: to afford the applicant the opportunity to assess whether
additional or amended grounds of review may
be called in aid to
support her case. This is why the rule further provides for
supplementation of the founding affidavit.
[63] Where we
disagree with the main judgment on this score, is that it adopts the
view that there is only one exception
to the general principle,
namely when the jurisdiction of the reviewing court is called into
question. It finds that, save only
in those circumstances, an
applicant is entitled as of right to the record on the mere filing of
an application under rule 53.
In our view, this approach is too
narrow. We also disagree that the main issue raised in the rule
6(5)
(d)
(iii) notice filed by the appellants required the court
to enter into the merits of the review. Properly understood, it did
not
do so. As such, the main judgment is, respectfully, wrong in
characterising the appellants’ case as an attempt to subvert
the general principle.
[64] A
respondent in motion proceedings is entitled to file a notice under
rule 6(5)
(d)
(iii) that she intends to raise a specified
question of law. The rule requires this notice to be filed within 15
days of notifying
the applicant of her intention to oppose. Under
rule 53(4), an applicant in review proceedings may file an amended
notice of motion
and supplemented founding affidavit within ten days
of being given access to the record of the impugned decision. These
comparative
time periods demonstrate that the rules presuppose that a
notice under rule 6(5)
(d)
(iii) will precede any supplemented
founding affidavit filed by an applicant for review under rule 53.
[65] It
follows that the rules envisage that the legal issue identified in a
rule 6(5)
(d)
(iii) notice may be heard as a point
in limine
,
prior to any hearing on the merits. In such cases, the court must
accept the allegations in the original founding affidavit as
established facts. The respondent stands or falls on her question of
law without the advantage of putting factual averments before
the
court for its consideration. It makes no difference, therefore, that
a respondent, like the appellants did in this case, filed
an
answering affidavit simultaneously with their rule 6(5)
(d)
(iii)
notice. It would simply be ignored by the court considering the
in
limine
legal question identified in a rule 6(5)
(d)
(iii)
notice.
[66] Of
course, much will depend on the nature of the legal question raised
as to the further conduct of proceedings.
In some cases, a court may
entertain the question only after the rule 53 steps have been
followed to completion. In other cases,
such as in this appeal, the
court would be enjoined to entertain the legal question as a prior
step. The point is that it is permissible
under the rules for a rule
6(5)
(d)
(iii) notice to be filed before the applicant exercises
her right, post access to the record, to supplement her founding
affidavit
and grounds of review.
[67] On a
plain reading of the rules, the high court erred in granting prayer 1
of the respondents’ interlocutory
application and, in finding
that the rule 6(5)
(d)
(iii) notice was premature and thus
irregular. The appellants acted in accordance with the prescribed
time-period in filing their
rule 6(5)
(d)
(iii) notice. They
were entitled to file their notice when they did and there was
nothing irregular in their actions. Accordingly,
the high court erred
in setting the notice aside, albeit provisionally.
[68] However,
this does not answer the question of whether the high court was
correct, in granting the relief sought
in prayer 2 of the
interlocutory motion and, in directing the appellants to make the
record accessible to the respondents at that
stage, rather than first
determining the legal question raised in the rule 6(5)
(d)
(iii)
notice. The main judgment finds that the high court correctly granted
that relief as the legal issue raised in the rule 6(5)
(d)
(iii)
notice is not a challenge to the review jurisdiction of the high
court. On its finding, this is the only acceptable departure
from an
applicant’s automatic right to access to the record on the mere
filing of a review application.
[69] We
reiterate our view that this is too narrow an approach to the
question of when a departure from the general
principle is competent.
We accept that, to achieve the purpose of rule 53, it is
inappropriate for a court to entertain the merits
of a review before
the applicant has been provided with the record and has been given
the opportunity to amend its notice of motion
and supplement its
founding affidavit. However, in this case, the core legal issue
raised by the appellants in their rule 6(5)
(d)
(iii) notice
does not require the high court to enter the merits of the review.
The appellants, in their notice, ask the general
question whether the
exercise of a liquidator’s discretion to resile from an
executory agreement is administrative action
and thus subject to
review. That question is purely legal in nature. It does not turn on
how and why the appellants in this case
took their decision.
[70] To put
it differently, in their rule 6(5)
(d)
(iii) notice, the
appellants do not ask the court to determine whether on the facts of
this case the respondents have justifiable
grounds to sustain a
review of their decision under PAJA. Obviously, that is a question
that goes to the merits of this review;
it asks whether the review is
sustainable on the merits. The rule 6(5)
(d)
(iii) asks a
different question which is this: does a decision by any liquidator
to resile from an executory agreement, rather than
to elect to
enforce it, constitute administrative action – and thus, is it
reviewable at all? It is a question directed at
the inherent legal
nature of the discretion afforded all liquidators to resile from an
executory agreement. It will be determined
by examining the relevant
statutory framework regulating insolvency, companies, the powers of
liquidators and PAJA.
[71] That
question is distinct from, and antecedent to, the court entering the
merits of the review. If it is determined
that the exercise of a
liquidator’s discretion is not reviewable, the court simply
will not embark on the merits. More fundamentally,
if the legal
question raised in the rule 6(5)
(d)
(iii) notice is determined
in favour of the appellants, it would follow that the rule 53
procedure has no application, and the respondents
would have no right
to insist on access to the record. It is for this reason that the
high court could not competently grant the
relief sought in prayer 2
of the respondents’ interlocutory application, without first
engaging with, and determining the
legal issue raised in the
appellants’ notice. In our view, the high court erred in
holding that it was not called upon to
enter that inquiry and in
directing the appellants to give access to the record based on the
assumption that the respondents were
entitled to it.
[72] For
these reasons, we do not agree with the view expressed in the main
judgment that the appellants seek to subvert
the general principle
that an applicant in review proceedings is as of right entitled to
the record. In this case, the appellants
were entitled to use rule
6(5)
(d)
(iii) to question, as an
in limine
point,
whether judicial review is a competent remedy as a matter of legal
principle, and hence, whether the respondents are entitled
to the
benefits of the rule 53 procedure. Until a determination is made on
that issue, it cannot be said that the respondents have
been deprived
of their right to the record and that the appellants case amounts to
a subversion of the general principle.
[73]
We would have ordered that the appeal succeed with costs and that the
order of the high court be set aside. We
would have also remitted the
legal question raised in paragraphs 1 to 4 of the appellants’
rule 6(5)
(d)
(iii)
notice to the high court for determination as a point
in
limine
.
F KATHREE-SETILOANE
ACTING JUDGE
SUPREME COURT OF APPEAL
R M KEIGHTLEY
ACTING JUDGE
SUPREME
COURT OF APPEAL
Appearances
For the appellants:
J E Smit
Instructed
by:
MacRobert Attorney, Pretoria
Lovius
Block Attorneys, Bloemfontein
For the first and second
respondents: J G Rautenbach SC
Instructed
by:
Motlatsi
Seleke Attorneys, Krugersdorp
Hutchinson
Attorneys, Bloemfontein
[1]
Rule 6(5)
(d)
(iii)
of the Uniform Rules reads:
'[I]f
such person intends to raise any question of law only, such person
shall deliver notice of intention to do so, within the
time stated
in the preceding subparagraph, setting forth such question.'
[2]
Competition
Commission of South Africa v Standard Bank of South Africa Limited;
Competition
Commission of South Africa v Standard Bank of South Africa Limited;
Competition Commission of South Africa v Waco
Africa (Pty) Limited
and Others
[2020]
ZACC 2
;
2020
(4)
BCLR 429 (CC) paras 114-121 and 201-203 (
Standard
Bank
).
[3]
Standard
Bank
fn 2 above.
[4]
Paras
paras
200-202
.
[5]
Bryant
& Flanagan (Pty) Ltd v Muller and Another NNO
1978 (2) SA 807; [1978] 3All SA 438 (A).
[6]
At 812G-H.
[7]
This is a reference to the Companies Act 61 of 1973.
[8]
Compare:
Standard
Bank
fn
2 above paras 119-121 and paras 201-204.
[9]
Competition
Commission v Computicket (Pty) Ltd
[2014] ZASCA 185
(
Computicket
)
para 20
.
[10]
Standard
Bank
fn
2 above.
[11]
This was a reference to paragraph 20 in
Computicket
,
fn 8 above.
[12]
Standard
Bank
fn 2 p
aras
120-121.
[13]
Van
Zyl and Others v Government of Republic of South Africa and Others
2008 (3) SA 294
(SCA) at 305G.
[14]
Promotion of Administrative Justice Act 1 of 2000 (PAJA).
[15]
Jockey
Club of South Africa v Forbes
[1992] ZASCA 237
;
1993 (1) SA 649
(AD) at 661E (
Jockey
Club
).
[16]
Ibid at 660E-F. And compare:
Democratic
Alliance and Others v Acting National Director of Public
Prosecutions and Others
2012 (3) SA 486 (SCA).
[17]
Johannesburg
City Council v The Administrator Transvaal and Another
1970 (2) SA 89
(T) at 91G-92A (
Johannesburg
City Council
).
[18]
'
TAKE
NOTICE THAT
the
first to third and fifth respondents intend to raise the following
point in law at the hearing of the application:
1.
1.1
Phehla Umsebenzi Trading 48 CC (in liquidation) ("
Phehla
"):
-
1.1.1
was wound up with effect from 06 June
2018, as contemplated by
section 66
of the
Close Corporations Act 69
of 1984
("
the
Close Corporations
Act
") as read with Item 9 of
Schedule 5 of the Companies Act 71 of 2008 ("
the
2008
Companies Act
") as further
read with section 348 of the Companies Act 61 of 1973 ("
the
Companies Act
");
1.1.2
was wound up due to its inability to pay its debts, as contemplated
by
section 66
of the
Close Corporations Act, read
with the 2008
Companies Act and as further read with section 339 of the Companies
Act;
1.1.3
is unable to pay its debts and therefore, by virtue of section
339
of the Companies Act, the law relating to insolvency, including the
provisions of the Insolvency Act 24 of 1936 ("
the
Insolvency
Act
") and the common law relating to insolvency, apply in
respect of any matter not specifically provided for in the Companies
Act.
2.
2.1
The first to third respondents were appointed as the joint
liquidators
of Phehla on 23 July 2018.
3.
3.1
The applicants seek an order whereby the liquidators' election to
terminate
an executory contract which was
concluded
by Phehla on 6 August 2015 before its liquidation in
relation to certain immovable property owned
by it ("
the subject property
"), is reviewed and set
aside.
3.2
The applicants furthermore seek an order for specific performance
that
the subject property be transferred and registered
in the name of the applicants.
4.
4.1
Extant contracts that have not been properly fulfilled and are not
brought
to the whole fruition are executory
contracts.
4.2
A liquidator is vested with a discretion whether to abide by or
resile
from an executory contract.
4.3
The discretion exercised by a liquidator to abide by or resile from
an executory contract is exercised by virtue
of the obligations and
duties imposed on the liquidator by the
Insolvency Act and
the Companies Act, where
applicable.
4.4
No empowering provisions or statute exist in terms of which a court
can review a discretionary decision taken
by a liquidator.
4.5
It follows that the applicants are enjoined from making application
to have the liquidators' decision reviewed
and set aside.
5.
5.1
After the date of establishment of the
concursus creditorum
,
nothing may be allowed to be done by any of the creditors to
alter the rights of the other creditors.
5.2
A liquidator or company in liquidation is not bound to perform
unexecuted
contracts entered into by an
insolvent before its insolvency.
5.3
In terms of the common law, a party cannot exact, and a court cannot
order specific performance against a liquidator.'
[19]
Walker
v Syfret NO
1911 AD 141
at 160 and 166;
Consolidated
Agencies v Agjee
1948 (4) SA 179
(N) at 189;
Bryant
& Flanagan (Pty) Ltd v Muller and Another NNO
1978
(2) SA 807
(A) at 812G-813B;
Du
Plessis and Another NNO v Rolfes Ltd
[1996] ZASCA 45
;
1997 (2) SA 354
(A) at 363;
Nedcor
Investment Bank v Pretoria Belgrave Hotel (Pty) Ltd
2003 (5) SA 189
(SCA) para 6;
Gcaba
v Minister for Safety and Security and Others
2010 (1) SA 238
(CC) para 75 and
Competition
Commission of South Africa v Standard Bank of South Africa Limited;
Competition Commission of South Africa v Standard
Bank of South
Africa Limited; Competition Commission of South Africa v Waco Africa
(Pty) Limited and Others
2020 (4) BCLR 429
(CC) paras 114-121 and 201-202.
[20]
See fn 19 above.
[21]
Section 169 of the Constitution reads:
'
(1)
The High Court of South Africa may decide --
(a) any constitutional
matter except a matter that
(i) the Constitutional
Court has agreed to hear directly in terms of section 167(6)(a); or
(ii) is assigned by an
Act of Parliament to another court of a status similar to the High
Court of
South Africa; and
(b) any other matter not
assigned to another court by an Act of Parliament.
(2)
The High Court of South Africa consists of the Divisions determined
by an Act of Parliament, which Act must provide for--
(a) the establishing of
Divisions, with one or two more seats in a Division; and
(b) the assigning of
jurisdiction to a Division or a seat with a Division.
(3)
Each Division of the High Court of South Africa--
(a) has a Judge
President;
(b) may have one or more
Deputy Judges President; and
(c) has the number of
other judges determined in terms of national legislation.'
[22]
Companies Act 61 of 1973.
[23]
Companies Act 71 of 2008
.
[24]
Fn 17 above at 91G-F.
[25]
Insolvency Act 36 of 1924.
[26]
See, in this regard, M S Blackman, R.D. Jooste & G.K. Everingham
vol
3 at 14-288.
[27]
See, in this regard,
s 381
of the
Companies Act.
[28
]
Section
35 of the Insolvency Act, which is headed 'Uncompleted acquisition
of immovable property before sequestration' reads as
follows:
'If an insolvent, before
the sequestration of his estate, entered into a contract for the
acquisition of immovable property which
was not transferred to him,
the trustee of his insolvent estate may enforce or abandon the
contract. The other party to the contract
may call upon the trustee
by notice in writing to elect whether he will enforce or abandon the
contract, and if the trustee has
after the expiration of six weeks
as from the receipt of the notice, failed to make his election as
aforesaid and inform the
other party thereof, the other party may
apply to the court by motion for cancellation of the contract and
for an order directing
the trustee to restore to the applicant the
possession of any immovable property under the control of the
trustee, of which the
insolvent or the trustee gained possession or
control by virtue of the contract, and the court may make such order
on the application
as it thinks fit: Provided that this section
shall not affect any right which the other party may have to
establish against the
insolvent estate, a non-preferent claim for
compensation for any loss suffered by him as a result of the
non-fulfilment of the
contract.'
[29]
Standard
Bank
fn 3 above para 203.
[30]
Section
34, which is headed 'Access to courts' reads in relevant part as
follows:
'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, . . .'
[31]
See,
for example,
Standard
Bank
fn 7 above para 201.
[32]
Para
203.
[33]
Para
202.
[34]
See s 167(3)(b), (c) and s 167(4) and (5) of the Constitution.
[35]
See in this regard the
Labour Relations Act 66 of 1995
and the
Competition Commission Act 89 of 1998 that confer exclusive
jurisdiction to the Labour Court and the Competition Tribunal
respectively in all matters regulated by those Acts.
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