Ncala v Mhlongo and Others (2024/090547) [2025] ZAGPJHC 1327 (11 December 2025)

begin wrapper begin container begin header begin slogan-floater end slogan-floater - About SAFLII About SAFLII - Databases Databases - Search Search - Terms of Use Terms of Use - RSS Feeds RSS Feeds end header begin main begin center # South Africa: South Gauteng High Court, Johannesburg South Africa: South Gauteng High Court, Johannesburg You are here: SAFLII >> Databases >> South Africa: South Gauteng High Court, Johannesburg >> 2025 >> [2025] ZAGPJHC 1327 | Noteup | LawCite sino index ## Ncala v Mhlongo and Others (2024/090547) [2025] ZAGPJHC 1327 (11 December 2025) Ncala v Mhlongo and Others (2024/090547) [2025] ZAGPJHC 1327 (11 December 2025) Download original files PDF format RTF format make_database: source=/home/saflii//raw/ZAGPJHC/Data/2025_1327.html sino date 11 December 2025 SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy IN THE HIGH COURT OF SOUTH AFRICA GAUTENG DIVISION, JOHANNESBURG Case number: 2024-090547 [1]  REPORTABLE: YES [2]  OF INTEREST TO OTHER JUDGES: YES [3]  REVISED: YES SIGNATURE       DATE: 11 December 2025 In the matter between: LETHIA NKGARA NCALA Applicant and MARTINUS MHLONGO 1 st Respondent THE LEGAL PRACTICE COUNCIL, INDEMNITY FUND, NPC 2 nd Respondent LEGAL PRACTICE COUNCIL 3 rd Respondent SUMMARY Personal Liability Companies – a personal liability company as as contemplated in section 19(3) read with section 8(2)(c) of the Companies Act, 2008 enjoys a separate juristic personality from its members. As such, the assets and liabilities of that company are its own and not its members. Liability of members of Personal Liability Companies for the debts of the company – pursuant to a judgment granted against a Personal Liability Company, the estate of the Personal Liability Company must be excussed before a creditor may look to the members to satisfy a judgment debt against such a company. Insolvency – it is incompetent to bring a sequestration application against members of a Personal Liability Company in the absence of an unsatisfied debt owed to the creditor by the company. Professional conduct – it is prima facie misconduct for legal practitioners to draw affidavits that misrepresent the nature and ambit of the documents upon which a case is premised. Legal Practice Council is required to investigate the conduct of legal practitioners under these circumstances. In casu , the applicant sought an order sequestrating the first respondent’s estate on the basis that the Personal Liability Company in which he practises is alleged to owe the applicant money. The applicant relies on nulla bona returns of service in respect of an alleged unsatisfied judgment granted against the first respondent in circumstances where no such judgment has been entered against the first respondent. This is, at best, a negligent misrepresentation made to the court. The alleged judgment debt arises from untaxed bills of costs. These are not liquid for purposes of section 9(1) of the Insolvency Act, 1936 . The applicant failed to establish an act of insolvency on the part of the first respondent. The sequestration application is fundamentally flawed and vexatious in the sense described in In re: Alluvial Creek 1929 CPD 532 at 535. Application dismissed with punitive costs and the Legal Practice Council is directed to investigate the applicant’s legal representatives conduct. JUDGMENT PULLINGER AJ [1] This is an application for the sequestration of the first respondent’s estate. [2] To begin with, and I stress that, in respect of the facts I now record in relation to the case made out by the applicant, have made assumptions and drawn inferences as to what those facts are. [3] The founding affidavit (that reads more like heads of argument than a deponent’s evidence – replete with footnotes and references to case law) is inchoate. The documents necessary to found certain material statements that are otherwise mere conclusions of law are not annexed thereto.  Critically, the “judgment” and “ nulla bona returns of service” to which liberal reference is made in the affidavits filed by the applicant, are not attached thereto. [4] The applicant appears to rely on section 8(g) of the Insolvency Act, 1936 (“ the Insolvency Act ”) and asserts that the first respondent is factually insolvent. [5] The applicant's evidence, in this respect, is as follows: "32.        On the 27 th March 2021 the applicant entered into an agreement of sale property Erf 1[…] Tlamatlama Section, Tembisa [sic]  ("the deed of sale") with one Simon Nyabelo Mashiane, with identity number …, as a result the said transaction fell through due to the misconduct of the Attorney i.e. Martinus Mhlongo, the principal and owner of Mhlongo Attorneys ( ANNEURE [sic] A ' - Deed of Sale ). 33. The applicant accordingly effected several different deposits and payments into the Trust Account of Mhlongo Attorneys Inc …. 34. On/or about July 2021 the applicant was made aware of the criminal activities committed by Mhlongo Attorneys Inc, so that with regards to the selling of immovable properties, thereby defrauding or stealing the monies of the innocent and unsuspecting potential purchasers, resulting in financial loss, financial prejudice and harm." [6] On this theme, the applicant concludes: "44. The 1st respondent, therefore, remained responsible for the debt of firm at the time of taking instructions from the applicant to act diligently, punctually and in the best interest [sic] of the applicant." [7] The applicant reasons, therefore, that the first respondent has committed an act of insolvency as contemplated in section 8(g) of the Insolvency Act because , so she alleges, the first respondent "… is unable to pay my money, given my claim from the day I realized that he was not performing as instructed to act on my behalf, as my attorney. " This, it is contended, constitutes an act of insolvency as contemplated in section 8(g) of the Insolvency Act. [8 ] The heads of argument filed on behalf of the applicant commence thus: "1. The 1st respondent, without any factual or legal basis denies knowing the applicant, disputes the claim alleged and proven by the applicant, there was (and remains) no question that the applicant is a creditor or [sic] the 1st respondent in respect of a claim contemplated by section 9(1) of the Insolvency Act. 2. There is also no dispute at all or anywhere that the 1st respondent's answering affidavit regarding the question of benefit to creditors. 3. There is therefore, uncontroversial [sic] that the applicant has duly established the requirements of the section 8(g) of the Insolvency Act." > [9] The applicant goes on to submit that the only dispute between the parties concerns whether the applicant has given written notice to his creditors that he is unable to pay his debts as contemplated in section 8(g) of the Insolvency Act and , submits further: "4.2        The question whether such a notice has been given depends on the proper interpretation of the writing sought to be relied upon and in particular, whether a reasonable recipient in the position of the creditor would understand it to mean that the debtor was unable to pay any of his debts." [10] There is no suggestion, in the founding affidavit, however, that the first respondent, gave “notice in writing to any one of his creditors that he is unable to pay any of his debts” as contemplated in section 8(g) of the Insolvency Act being the act of insolvency expressly relied upon by the applicant much less that he gave any indication of an inability to pay his debts. [11] On a charitable interpretation of the founding affidavit, the applicant’s case is premised on section 8(b) of the Insolvency Act; being one that is predicated on an unsatisfied judgment debt owed by the first respondent to the applicant. This is certainly how the first respondent understood the case as he repeatedly stressed that there was no judgment has been entered against him. I also understood the applicant’s case in this way as this was the basis of my engagement with Mr Dlwathi, the applicant’s counsel, during argument. [12] The first respondent is an attorney of this court. He was (or may still be) the defendant in an action instituted by the applicant as plaintiff before this court under case number 2021/41577 (“ the Action ”). That which I am able to piece together suggests that, at some point in time, default judgment ad pecunium solvendam may have been entered against him and that a nulla bona return of service may have been rendered thereanent. This inference is drawn from the statement in the answering affidavit that the Action was not served on the first respondent’s attorneys and the references to a nulla bona return of service made in both the founding and replying affidavits. [13] However, the various references to the alleged nulla bona returns suggest that they may not nulla bona returns at all, but rather, returns of non-service. [14] If this is the case, the applicant’s references to nulla bona returns are misleading and suggestive of a conclusion that is entirely false. [15] The importance of a nulla bona return of service for purposes of establishing the act of insolvency contemplated in section 8(b) was clearly expressed by the Supreme Court of Appeal in Beira v Raphaely-Weiner and Others [1997] ZASCA 59 ; 1997 (4) SA 332 (SCA) at 339 B/C to 339 A. Harms JA made the point that, central to a nulla bona return, is a judgment debt which cannot be satisfied when demand is made on the judgment debtor by the sheriff. The nulla bona return certifies that payment of the judgment debt was demanded from the judgment debtor who states to the sheriff that he has no funds to pay the debts and no disposable assets anywhere to satisfy the judgment. [16] Succinctly stated, therefore, the nulla bona return is akin to a certificate that certifies, and constitutes prima face evidence (in terms of section 43(2) of the Superior Courts Act, 2013 ), of the judgments debtor’s inability to satisfy a judgment debt. It then falls to the respondent, in a sequestration application, to impeach that return of service ( van Vuuren v Jansen 1977 (3) SA 1062 (T) at 1063C ). But, where the return is defective, no reliance can be placed thereon as prima facie proof of an inability to satisfy the judgment. The natural consequence is that an act of insolvency in terms of section 8(b) of the Insolvency Act cannot be established thereby. [17] To the extent that any default judgment was entered against the first respondent, it seems it was rescinded. I draw this conclusion having regard to references made to a “pending default judgement application” in the replying affidavit. It appears, further, the Action may have been withdrawn. This is, however, immaterial. [18] It is common cause, and was conceded in argument by Mr Dlwathi, no judgment has been entered against the respondent. Rather, in the course of the Action, certain costs orders were made against the first respondent. [19] Mr Dlwathi submitted that the applicant’s real case was predicated on the aforementioned costs orders and that these costs orders are the unsatisfied “judgment” that underpins the applicant’s case. [20] Mr Dlwathi accepted that, in respect of these costs orders, bills of costs had not been drawn (at best were not annexed to the papers) and had not been taxed. It follows then, that no demand to pay these costs orders had been made on the first respondent. Thus, the reference to nulla bona returns of service, insofar as they may be said to relate to the costs orders, is false. [21] It must be clear, immediately, that an application for sequestration predicated on section 8(g) of the Insolvency Act cannot be sustained. [22] I have difficulty understanding what could have led the applicant to apply for an order sequestrating the first respondent’s estate in these circumstances. I assume that this application was brought on the advice of the applicant’s lawyers (and I use this term generically). I am at a loss as to how lawyers can draw papers that are so misleading and devoid of merit such as those before me and then permit their client to depose to them. I have real doubt as to whether any nulla bona returns of service exist. If they do not exist, the references to them calls into question what documents were before the applicant’s lawyers when the papers in this application were drawn and whether these were properly considered. This, in turn, causes me to question whether there was any proper consultation with the applicant and adherence to the ethical standards prescribed by the Legal Practice Council, cited herein as the third respondent. [23] What is even more concerning is the applicant’s lawyers attempt to prosecute this case. The heads of argument prepared on behalf of the applicant suggest that there was no real interrogation of the facts or the law. Had there been such an interrogation, and any proper preparation for the hearing, the hopelessness of the “case” made out in the papers would have been realised. [24] At the most elementary level, and accepting the submission that the applicant’s case is predicated on the costs orders to which I referred above, the applicant’s lawyers failed to consider the law surrounding costs orders and the distinction between a company and its members. [25] Costs orders are not liquid or due and payable until taxed and an allocatur annexed to the bill ( Standard Bank of South Africa Ltd v Sewpersdadh and Another 2005 (4) SA 148 (C) at 160 C-E which holds that costs which have not been taxed are not payable and Phillips v Van den Heever N.O and Another 2007 (4) SA 511 (W) at [73] which holds that it is impermissible to issue a writ of attachment in respect of costs that are not taxed or agreed). [26] There is, then, no liquidated claim which the applicant has against the first respondent. In terms of section 9(1) of the Insolvency Act, “ A creditor (or his agent) who has a liquidated claim for not less than fifty pounds, or two or more creditors (or their agent) who in the aggregate have liquidated claims for not less than one hundred pounds against a debtor who has committed an act of insolvency , or is insolvent, may petition the court for the sequestration of the estate of the debtor.” [27] This provision, properly understood, requires an applicant seeking an order sequestrating the estate of it debtor, to have a liquid claim against a debtor who has committed an act of insolvency, or prove that the said debtor is “insolvent” within the meaning ascribed to that word. [28] I have already set out why the applicant’s case that an act of insolvency was committed by the first respondent is based on a wholly false premise. [29] But, on the question of the first respondent’s alleged insolvency, the case, such as there is, belies the most fundamental principles appliable to companies – the separate existence of juristic entities from its members ( Salomon v Salomon and Co Ltd [1897] AC 22 (HL) at [30]; Dadoo Ltd v Krugersdorp Municipal Council 1920 AD 530 at 550 to 551; City Capital SA Property Holdings Ltd v Chavoness Badenhorst St Clair Cooper and Others 2018 (4) SA 71 (SCA) at [27]). [30] A legal practitioner is expressly permitted, in terms of section 34(7) of the Legal Practice Act, 2014 , to establish a commercial juristic entity for purposes of carrying on a legal practice. The first respondent has done so and carries on practice as a member of a personal liability company (identified by the letters “Inc” after its registered name). [31] A personal liability company is one as contemplated in section 19(3) read with section 8(2)(c) of the Companies Act, 2008 . A personal liability company, like all other companies, has a distinct juristic personality, separate from its members. This means it has its own estate, debtors and creditors that are not those of its members ( City Capital SA Property Holdings Ltd supra and the authorities cited in footnote 7 thereof ) . [32] The applicant herself identifies that that the first respondent carries on practice as an attorney of this court under the name and style of M Mhlongo Inc. She states, furthers, that it was this company that was the recipient of the funds alleged to be the underlying debt. It is M Mhlongo Inc that was appointed as the conveyancer in the sale of property transaction she described and which I quoted above. [33] The applicant’s assertions that monies are owed to her by the first respondent pursuant to M Mhlongo Inc’s appointment as conveyancer in the sale of property transaction requires an interpretation of the Companies Act, 2008 that is at odds with the most fundamental principal of the law pertaining to companies – that is the separate existence of a company and its members. [34] I do not understand section 19(3) of the Companies Act, 2008 to permit or empower the institution of legal proceedings against a member of a personal liability company on the strength of a debt owed by the company to a third party.  If this is so, an application for the sequestration of a member’s estate on this basis is an anathema. [35] I perceive section 19(3) to operate in the same way as the law concerning judgments against partnerships. Only once the partnership estate has been excussed may a judgment creditor look to the partners for satisfaction of the judgment debt ( Engelbrecht and Another v Visentin: In re Visentin v Clensatron South Africa and Others 1997 (2) SA 241 (W) at 244 H to 245 G; compare DF Scott (EP) (Pty) Ltd v Golden Vally Supermarket 2002 (6) SA 297 (SCA) at 303I to 304 A). [36] Thus, a litigant who obtains judgment against a personal liability company, which the company cannot satisfy the judgment debt out of its own estate, may look to the company’s members for satisfaction of that debt at such a time. [37] As a result, any case in the founding affidavit that the first respondent is insolvent as contemplated in section 9 of the Insolvency Act because the company of which he is a member, which company may owe money to the applicant, does not found an application for the sequestration of the first respondent’s estate. [38] On the issue of costs, this is a matter where serious allegations have been made against the first respondent. The first respondent has been put to the expense of opposing an application that is completely devoid of any cognisable basis on which it could have been brought. [39] To my this application falls squarely within that considered by Gardener JP in Re: Alluvial Creek 1929 CPD 532 , where the learned Judge President said at 535: "An order is asked for that he pay the costs as between attorney and client. Now sometimes such an order is given because of something in the conduct of a party which the Court considers should be punished, malice, misleading the court and things like that. But I think the order may also be granted without any reflection upon a party where proceedings are vexatious, and by vexatious I mean where they have the effect of being vexatious although the intent may not have been that they should be vexatious. There are people who enter litigation with the most upright purpose in the most firm believe in the justice of their case and yet whose proceedings may be regarded as vexatious when they put the other side to unnecessary trouble and expense which the other side ought not to bear. That, I think is the position in the present case." [40] I align myself with what the learned Judge President said. [41] I am deeply concerned as to the propriety of legal practitioners draw unintelligible papers without, seemingly, having properly ascertained the facts or applied themselves to the law (consider Code of Conduct for all Legal Practitioners, Candidate Legal Practitioners and Juristic Entities , clause 9.7). [42] Prima facie , the author/s of the founding affidavit have failed to uphold the requisite ethical standards of legal practitioners: first in drawing papers premised on what I perceive to be a false premise; second, in allowing such papers to be deposed to by the applicant and, third, in attempting to move for relief in such circumstances. [43] Mr Dlwathi suggested to me that no more than a mistake was made in the preparation of the founding affidavit. I do not accept that explanation. Not only was it tendered upon being constrained to concede the absence of any cognisable or truthful basis for this application, a mere mistake is not a cogent explanation for the preparation of an application where there has been an apparent failure to have regard to the documents upon which reliance is placed (if they exist) and to then misrepresent that nature and effect thereof. [44] My discomfort with the conduct of the applicant’s legal team is made all the more acute when regard is had to the first respondent being an attorney and officer of this Court. Caution must be exercised when statements are made in papers concerning a person whose profession and ability to practice is dependent upon his honesty and integrity. These must not be made without very firm factual bases ( compare LF and Another v TV 2020 (2) SA 546 (GJ) at [32]). There were no such factual bases for many of the allegations made by the applicant relevant to the relief sought. [45] This must be investigated by the Legal Practice Council. [46] In the result, I make the following order: 1. The application for the first respondent's sequestration is dismissed. 2. The applicant is to pay the first respondent's costs on the scale as between attorney and client, with counsel's costs to be taxed on scale B. 3. The registrar of this court is directed to place the papers in this matter, together with this judgment, before the Legal Practice Council for investigation into the applicant’s legal representatives conduct. A W PULLINGER ACTING JUDGE OF THE HIGH COURT GAUTENG DIVISION, JOHANNESBURG This judgment was handed down electronically by circulation to the parties’ and/or parties’ representatives by email and by being uploaded to CaseLines. The date and time for hand-down is deemed to be 12h00 on 13 October 2025 . DATE OF HEARING: 13 OCTOBER 2025 DATE OF JUDGMENT: 13 OCTOBER 2025 APPEARANCES: COUNSEL FOR THE APPLICANT: Adv S Dlwathi instructed by Sibuyi Attorneys ATTORNEY FOR THE RESPONDENT:    Adv Mahapa instructed by Matera Attorneys sino noindex make_database footer start