South Africa: High Courts - Gauteng

You are here: SAFLII >> Databases >> South Africa: High Courts - Gauteng >> 2005 >> [2005] ZAGPHC 29

Van Staden v Master of the High Court and Others (3114/04) [2005] ZAGPHC 29 (14 March 2005)

/SG
IN THE HIGH COURT OF SOUTH AFRICA
(TRANSVAAL PROVINCIAL DIVISION)
                                    DATE: 14/03/2005
                           CASE NO: 3114/2004
REPORTABLE

In the matter between:

JOHANNES CHRISTOFFEL VAN STADEN          APPLICANT

And

THE MASTER OF THE HIGH COURT              1^ST RESPONDENT
JOACHIM HENDRIK BOTHA NO                           2^ND RESPONDENT
BETHUEL BILLYBOY MAHLATSI NO              3^RD RESPONDENT

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
JUDGMENT

RANCHOD, AJ

         The appellant, who is a unrehabilitated insolvent, applies for the setting aside of the first respondent’s decision to confirm the first and final liquidation and distribution account in the applicant’s insolvent estate.

         The applicant was provisionally sequestrated on 16 January 2003 and the final order of sequestration was issued on 5 March 2003. Second and third respondents were appointed as provisional liquidators in the insolvent estate on 30 June 2003 by the first respondent. On 7 November 2003, the first and second respondents placed advertisements in certain newspapers which stated that the first and final liquidation and distribution account will lie for inspection for a period of fourteen days from 7 November 2003 to 21 November 2003. A copy of the liquidation and distribution account (which I shall refer to hereafter as “the account”) was also posted to the applicant. The applicant was unhappy about certain items in the account and consulted his attorney whereafter a formal objection to the account was lodged with the first respondent on 19 November 2003. The objections were listed in a letter dated 19 November 2003 addressed to the first respondent by the applicant’s attorneys. The relevant portion reads as follows:

                  “Daar word beswaar gemaak teen die volgende:

1. Die Kurator se fooie in die Beswaarde Baterekening ten bedrae van R230 961,18 plus BTW van R32 334.45 synde 10% van die opbrengs van die verkoping van die onroerende eiendom asook die rente verdien. Die Kurator is geregtig op 10% op die rente in die bankrekening sowel as die rente op die beleggingsrekening, maar is met respek nie geregtig op 10% op die onroerende eiendom bloot omdat dit as ’n lopende saak verkoop is nie. Volgens ons inligting is dit slegs die vaste eiendom wat verkoop is en alhoewel dit as lopende saak verkoop is, is die toepaslike tarief na ons mening 3% en nie 10% nie. Die Kurator het ook geen spesiale moete gehad met die verkoping nie en was die Koper deur Eli Stroh Agente voorgestel wie 6% kommissie ontvang het. Die Kuratorsfooi behoort dus met ’n bedrag van R183 539.99 verminder te wees.

2. Daar word verder beswaar gemaak teen Van’s Auctioneers se advertensiekoste in die bedrag van R18 661.46. Hierdie advertensie het plaasgevind voordat Tweede Vergadering van skuldeisers plaasgevind het en kon die eiendom slegs verkoop word indien die nodige toestemming by die Meester in terme van Artikel 80(Bis) van die Insolvensiewet verkry word. sodanige toestemming, as dit verkry is, is dit onre lmatig verkry deurdat die Tweede Verbandhouer, wie ’n versekerde skuldeiser is, nooit toegestem het tot die verkoping nie. Indien Artikel 80(Bis)- toestemming nie vooraf verkry is nie spreek dit vanself dat sodanige kostes na ons mening ontoelaatbaar is.

3. Daar word verder beswaar gemaak teen die kostes van R15 158.66 wat in die Vrye Oorskotrekening aangetoon word as die getakseerde rekening van Le Roux Prokureurs. Die Insolvent deel ons mee dat hy geen kennis dra van Le Roux Prokureurs nie. Hy het gedeel met Coetzer & De Beer Prokureurs wie klaarblyklik Le Roux Prokureurs opdrag gegee het. Hy het reeds ’n bedrag van R15 000.00 inbetaal by die prokureursfirma en behoort daardie kostes dus met R15 000.00 verminder te word. Dit is klaarblyklik ’n aspek wat die Kurator nie nagegaan het nie of versuim het om na te gaan voordat die totale getakseerde rekening as ’n eis teen die boedel aanvaar is.

4. Wat die eise aanbetref is die Insolvent van mening dat Eisnommer 5, synde die van NTK Limpopo Agric Limited nie korrek is nie. Ten tye van sekwestrasie het die eis van NTK Limpopo Agric Limited ongeveer R106 000.00 beloop en dra die Insolvent nie kennis van hoe die bedrag van R444 015.23 saamgestel en bereken is nie. In die verband is die Kurator voorheen versoek om volledig ’n uiteensetting te verkry van hierdie eis, wat nie verkry is nie alternatiewelik nie aan die Insolvent vir sy kommentaar voorgel is nie. Die Insolvent betwis op hierdie stadium hierdie eisbedrag en vra dat behoorlike ondersoek ingestel word ingevolge die bepalings van Artikel 45 van die Insolvensiewet.

5. Daar word ook beswaar gemaak teen die samestelling van Eisnommer 6 in die bedrag van R42 538.55. In die verband is die Kurator ook versoek om volledige besonderhede te verkry, wat verkry is en wel aan die Insolvent voorsien is. Dit blyk uit die besonderhede van die samestelling van die eis dat die eis duidelik verkeerd is. So byvoorbeeld, op 15 Augustus 2002 blyk volgens die belastingfaktuur van die skuldeiser dat 29 ure gewerk is met toerusting wat gehuur is teen R110.00 per uur. In totaal beloop die bedrag R3 245.00 (Sien Aanhangsel “A2”). Volgens Aanhangsel “B”, die betrokke bewys van die huur van die toerusting wat deur ons kli nt onderteken is, was die huur slegs 9 ure en nie 29 ure nie. Die Insolvent beweer ook dat al die items wat as diesel teen hom gedebiteer is nie korrek is nie en dat dit onmoontlik was dat hy soveel diesel kon gebruik. In die verband word ook behoorlike bewys geverg, soortgelyk aan Aanhangsel “B” hierby aangeheg.”

The letter was filed at the first respondent’s general office and, as a additional precaution, also filed in the relevant section of the first respondent’s office which was dealing with the applicant’s insolvency file. In spite of these precautions, the objection did not come before the first respondent and the account was confirmed without the objections of the applicant having been taken into account. On 9 December 2003 it came to the applicant’s attention that dividends were being paid out and it was then that he realised that the account had been approved. He immediately consulted his attorney, who informed the second respondent on 12 December 2003 that the first respondent had incorrectly confirmed the account. He also requested of the second respondent that he desist from paying out any further dividends. The applicant’s attorney had been informed that the second respondent would return from holiday on 5 January 2004 on which day the applicant’s attorney once again wrote to the second respondent and asked him whether he would be prepared to consider the objections without the necessity of launching an application to court. On 12 January 2004 the applicant’s attorney was informed by the second and third respondents that they are proceeding with the administration of the estate in accordance with the account. The present application was then launched on 5 February 2004. The relief sought by the applicant in terms of the notice of motion is:

“1.       Dat die laat indiening van die aansoek in terme van die bepalings van artikel 111 van Insolvensiewet, Wet 24 van 1936, gekondoneer word en dat verlof verleen word aan die Applikant om die aansoek te loods;
2.       Dat die bekragtiging van die likwidasie- en distribusierekening deur die Meester, in die insolvente boedel van JOHANNES CHRISTOFFEL VAN STADEN, verwysingsnommer T107/03, tersyde gestel word;
3.       Dat die koste van die aansoek koste in die gesekwestreerde boedel van JOHANNES CHRISTOFFEL VAN STADEN sal wees, uitgesonder die koste van oppossisie tot die aansoek;
4.       Verdere en/of alternatiewe regshulp.”

         The first respondent has not opposed the application and it appears that he will abide the decision of this court. However, the second and third respondents have filed an opposing affidavit and it has been submitted by applicant’s counsel that the application can be determined on the abovementioned facts which are common cause between the parties.

         I turn then to the application for condonation. It was submitted by second and third respondents’ counsel that the applicant had to show that he had a reasonable prospect of success in respect of the objections that were raised against the account. It was further submitted that each of the grounds of objection lodged by the applicant were without merit and for that reason an application for condonation should not be granted as it would have made no difference to the decision made by the first respondent whether the objection was before him or not. Furthermore, it was submitted that second and third respondents made payments in accordance with the account without being aware that the applicant’s objection had not come to the attention of the first respondent. Second and third respondents further argued that two creditors who had already received dividends and who would be affected by the outcome of this application, should have been joined in these proceedings formally even though they had been informed of the application.

         I turn then to the first objection ie the trustee’s fees in respect of the sale of the immovable property and certain movables thereon. The recommended tariff for fees in terms of the Insolvency Act is 3% of the proceeds of the sale of immovable property and 10% in respect of the sale of movables as curator’s fees. It was submitted by the applicant that only the immovable property was sold and therefore the applicable tariff for fees was 3% and not 10%. The second and third respondents point out that the applicant had consented to the auction of the property in a sworn affidavit wherein it is stated inter alia:

“Ek bevestig dat ek toestem tot die verkoping van die plaas Vischgat 490, Registrasie Afdeling LR, Noordelike Provinsie (Groot 1823, 4638 hektaar) tesame met alle oeste, implemente en alle ander roerende bates vir ’n bedrag van R2 300 000.00 (twee miljoen drie honderd duisend rand) aan Agter die Berg (Edms) Beperk as ’n lopende saak.”

The conditions of sale in terms of which the immovable property was sold contained inter alia, the following condition:

“Die plaas Vischgat, Mogalakwena, Registrasie Afdeling LR, Noordelike Provinsie (Limpopo) gehou onder Akte van Transport nommer: T88653/1992, Groot: 1823, 4639 hektaar.
Asook alle roerende bates, alle oeste, voertuie en implemente wat deel uitmaak van die boedel sodat hierdie verkoping as ’n lopende saak geskied.”

It bears mentioning that the immovable property had originally been sold in a sale in execution for R700 000.00. With the intervention of the second and third respondents the property was later sold for R2 300 000.00 as a result of which a surplus was paid into the guardian’s fund at the Master’s office for the benefit of the applicant. It is clear that the second and third respondents sold not only the immovable property but also certain movables with it and the question that arises is whether the Master correctly allowed a fee of 10% on the total price instead of separating these fees in respect of movables and immovables. Section 63(1) of the Act provides:

“Every trustee or curator bonis shall be entitled to a reasonable remuneration for his services, to be taxed by the Master according to tariff B in the Second schedule to this Act: Provided that the Master may, for good cause, reduce or increase his remuneration, or may disallow his remuneration either wholly or in part on account of any failure of or delay in the discharge of his duties or on account of any improper performance of his duties. Tariff B of the second schedule to the Act provides: remuneration of trustee (section 63)

(1) On the gross proceeds of movable property (other than shares or similar securities) sold, or on the gross amount collected under promissory notes or book debts, or as rent, interest or other income 10 per cent.

(2) On the gross proceeds of immovable property, shares or similar securities sold, life insurance policies and mortgage bonds recovered and the balance recovered in respect of immovable property sold prior to sequestration 3 per cent.

...

Remuneration of curator bonis and provisional trustee.

A reasonable remuneration to be determined by the Master, not to exceed the rate of remuneration of a trustee under this tariff.”

From the aforegoing it is clear that the Master is vested with the power to determine the fees within the parameters laid down in the tariff. In my view, the Master exercised his discretion and it is not for this court to interfere unless the discretion had been exercised improperly which is not the case here. Even though the applicant’s objection was not before the Master it does not appear that the Master was unhappy with the tariff that was applied by the second and third respondents.

The second ground of objection: the disbursements and costs of the auctioneer: In my view this objection is without merit as the auctioneer’s disbursements and costs were properly approved at the second meeting of creditors and the first respondent accepted it as such.

The third ground of objection relates to the costs of R15 158.56 of certain Le Roux Attorneys. These attorneys acted for the petitioning creditor to sequestrate the applicant. The applicant’s objection seems to be based on the fact that he had paid an amount of R15 000.00 to another firm of attorneys for launching a so-called “friendly sequestration”, which failed. However, section 14(2) to the Act provides that the trustee shall pay the costs of the petitioning creditor “out of the first funds of the estate available for the purpose under section 97 his costs, taxed according to the tariff applicable ...”.

The fourth ground of objection relates to the claim of Noordelike Transvaalse Ko perasie (“NTK”). The applicant states that the NTK’s claim should have been in the amount of approximately R106 000.00 based on a judgment obtained by the NTK against the applicant in the magistrate’s court for the district of Potgietersrus. However, the applicant fails to mention a second judgment obtained by the NTK against him in the amount of R302 182.52 plus interest and costs. This is set out in detail by the NTK’S attorney, who obtained the second judgment on its behalf, namely Mr Hurter of the firm Van Zyl Le Roux and Hurter Incorporated. There is accordingly no merit in this ground of objection either.

The last ground of objection relates to the claim by Plaas Weltevrede 508 (Edms) Beperk. The applicant doubts the number of hours charged for, for certain equipment hired by the applicant from this creditor. The creditor had submitted documents in support of its claim to the trustees and the trustees state that they had properly investigated the claim and were satisfied that it was a valid claim. The claim was proved at the meeting of creditors where the applicant himself was present and he did not lodge any objection to the admission of the claim. This ground of objection cannot therefore, in my view, be sustained. Counsel for second and third respondents made a further submission to the effect that there is a difference between an account that has merely been confirmed and where an account has been confirmed and dividends have been paid in accordance with the confirmed account. In the latter case the confirmation of the account is absolutely final unless the applicant can show that a fraud had been perpetrated. In this regard it is apposite to quote the learned author MESKIN, the Law of Insolvency, at 11.17, par 11.6.1 where it is submitted that:

“The confirmation of an account is final unless, before any dividend is paid under it, the Court allows it to be reopened. The confirmation being final (or, in the language of the Companies Act, having ‘the effect of a final judgment’), does not mean that each item in the confirmed account has the quality of a judgment of the Court; it means merely that effect must be given to the account as confirmed unless the Court permits it to be reopened. Such effect, indeed, may be modified subsequently in a further account.
The assignment of relative finality to a confirmed account before a dividend is paid thereunder, ie, subject to the Court’s allowing it to be reopened, and, subject to the qualification infra, of absolute finality after such payment, is for the purpose of achieving a completion of the administration of the estate which is expeditious.
Subject to the qualification mentioned infra, once the trustee actually makes payment to any creditor in terms thereof, any reopening of a confirmed account is precluded. But the payment must be actual: reopening is not precluded where a cheque for the amount thereof has been delivered but not yet paid.

In order to succeed in an application to reopen a confirmed account, prior to any payment thereunder, the applicant must establish a ground for restitutio in integrum, such as fraud or justus error. In addition, he must show that ‘there is merit in the reopening of the account. A Court will not reopen an account if it cannot be shown that the applicant has some prospect of success of having the account varied or corrected ... No purpose would obviously be served in merely reopening the account if it is merely to remain in the same form as originally drawn. The applicant must establish at least prima facie that the account is incorrect and would have to be amended.’ Negligence on the part of the applicant will preclude any error being justus, unless the applicant is the State.
In Gilbey Distillers & Vintners (Pty) Ltd and Others v Morris NO and another 1990 (2) SA 217 (SEC) it was held that notwithstanding payment of any dividend thereunder, however, the Court remains empowered to reopen a confirmed account where the confirmation thereof is impeachable on the ground of fraud or justus error. In the subsequent appeal [1990] ZASCA 134; [1991 (1) SA 648 (AD)] some doubt regarding this was expressed by NESTADT, JA, (who gave the judgment of the Court) at 658-659. The learned author then says that it is respectfully submitted that reopening on the ground of justus error is precluded but that reopening on the ground of fraud is not.”

         It is thus clear that it is only in exceptional circumstances that a court will set aside a confirmed account. In the matter before me there has been no allegation of fraud.

         Even if the grounds of objection had merit the payment of the dividends in my view precludes in the instant case the reopening of the account. See in this regard Wispeco (Pty) Ltd v Herrigel NO and Another 1983 2 SA 20 (CPD) where TEBBUTT, J came to the conclusion that “the payment of a dividend to any one or more creditors would be sufficient to preclude the reopening of an account” at 26E-F. However, in my view the applicant has failed to make out a prima facie case for the reopening of the account and the application must accordingly fail.

         I accordingly make the following order:

1. The application be and is hereby dismissed;

2. The costs of opposition to the application are to form part of the administration costs in the insolvent estate of Johannes Christoffel Van Staden.

N RANCHOD
ACTING JUDGE OF THE HIGH COURT
3114/2004

Heard on: 07/09/2004
For the Applicant: Adv C Harm
Instructed by: Messrs Maartens, Le Roux & Louw, Pretoria
For the 1^st Respondent: No Appearance
For the 2^nd and 3^rd Respondents: Adv M P Van der Merwe
Instructed by: Tingtingers INC, Pretoria
Date of Judgment: 14/03/2005