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IN THE HIGH COURT OF SOUTH AFRICA

(NORTH GAUTENG HIGH COURT, PRETORIA)

 

(1)    REPORTABLE: YES/NO.

(2)    OF INTEREST TO OTHER JUDGES: YES/NO.

(3)    REVISED.

16/10/2020

Case No: 21848/17

 

In the matter of:

 

Matthews Tuwani Mulaudzi                                                                           First Applicant

Violet Mabontsi Mulaudzi                                                                              Second Applicant

 

and

 

The Master of the High Court, Pretoria                                                          First Respondent

Oscar Jabulani Sithole N.O.                                                                            Second Respondent

Christopher Peter Van Zyl N.O.                                                                      Third Respondent

Selby Musawonke Ntsibande N.O.                                                                 Fourth Respondent

JUDGMENT - LEAVE TO APPEAL

Maumela J.

1.           On the 11^th of May 2018, this court handed down judgment which shall herein be referred to as, (the judgment). In terms of the judgment; inter alia, the Applicants' application to set aside the creditors meeting was granted. In these proceedings, the 2^nd to 4^th respondents, (in the main application), applied for leave to appeal to the full bench of this court against the whole of the judgement granted by this court.

2.           In the judgment dated the 11^th of May 2018 the Second, Third and Fourth Respondents, (being "the trustees"), were ordered to halt the process of disposing of the insolvent estate pending the institution of a section 381 enquiry against the trustees. The Master of the North Gauteng High Court was ordered to institute a section 381 enquiry against the trustees.

3.           In these proceedings, the second, third and fourth applicants apply for leave to appeal against the whole of the judgment dated 11^th of May 2018. The 1^st and 2^nd respondents oppose the application. The Master of the High Court has elected to abide by the court's decision although the master had initially opposed the original application by the 1^st and 2^nd second applicants.

4.           Concerning applications for leave to appeal, Section 17 of the Superior Courts Act 10 of 2013 provides the following:

17 (1). Leave to appeal may only be given where the judge or judges concerned are of the opinion that-

(a).     (i). the appeal would have a reasonable prospect of success; or

 (ii). there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under consideration;

(b).        the decision sought on appeal does not fall within the should ambit of section 16(2)(a); and

(c).        where the decision sought to be appealed does not dispose of all the issues in the case, the appeal would lead to a just and prompt resolution of the real issues between the parties.

 

5.           It is so that the test which applied previously in applications for leave to appeal was whether reasonable prospects exist which indicate that another court may come to a different conclusion. The current position is that the threshold for this consideration has been raised. In the case of Nannen and Others v Momentum and Others[1]; Hughes J. stated the following: "What emerges from section 17 (1) is that the threshold to grant a party leave to appeal has been raised. It is now only granted in the circumstances set out and is deduced from the words 'only' used in the said section. See The Mont Chevaux Trust v Tina Goosen & 18 Others[2] at para [6], Bertelsmann J held as follows: "It is clear that the threshold for granting leave to appeal against a judgment of a High Court has been raised in the new Act. The former test whether leave to appeal should be granted was a reasonable prospect that another court might come to a different conclusion, see Van Heerden v Cronwright & Others[3], at 343H. The use of the word "would" in the new statute indicates a measure of certainty that another court will differ from the court whose judgment is sought to be appealed against."

6.           In the case of S v Smith[4], at paragraph 7, Plaskett JA held that the test concerning applications for leave to appeal is now stringent, in that: "in order to succeed, therefore, the appellant must convince this court on proper grounds that he has prospects of success on appeal and that those prospects are not remote, but have a realistic chance of succeeding. More is required to be established than that there is a mere possibility of success, that the case is arguable on appeal or that the case cannot be categorized as hopeless. There must, in other words, be a sound, rational basis for the conclusion that there are prospects of success on appear.

7.           The First Respondent submits that in any one or all of the grounds forming the basis of the application for leave to appeal, the applicants failed to meet the threshold as set out. He argues that there is simply no proper case made out for this court to grant any one or more of the applicants leave to appeal. The First Respondent contends that there are no conflicting judgments in this matter. He points out that Vally J simply struck the matter off the urgent roll after the orders were granted by Motlhe J who had granted all orders, save for a costs order against one Rossouw. He views this as an affirmation that the court did not err in granting some of the orders.

8.           The First Respondent charges that the Master and the liquidators are complicit in underhand dealings pertaining to liquidation. He points out that the Public Protector, in her findings against The Master which were submitted, confirms that there are underhanded dealings which are the subject of investigation by the Special Investigations Unit(SIU) which is focused on the affairs of the office of The Master. The First Respondent takes issue with the attitude and approach of the Master in this case whom he finds to be partisan.

9.           It is trite that an application for leave to appeal is to be decided on the facts as set out and contained in the founding affidavit, answering affidavit and replying affidavit (if any) which form part of the court record when the application is argued. The applicant makes the point that the Public Protector's report was never contained in the papers before this Honourable Court, and was issued by her office some three (3) months after the application for leave to appeal was argued before this court.

10.        The Public Protector's report relates to an investigation into the alleged maladministration by the Master of the South Gauteng High Court, held at Johannesburg, involving the allegations of irregular appointment of and failure to supervise a provisional liquidator in relation to a specific company, being Endulwini Resources Limited.

11.        The Public Protector's report found that the Master of the South Gauteng High Court acted improperly in appointing the provisional liquidator (in that case) because the Master had applied the so called forty-eight (48) hour notice period practice, which was not documented in a policy determined by the Minister. The Public Protector held that this 48-hour notice practice used by the Master of the South Gauteng High Court was too short, unreasonable, and improper and prejudicial to creditors of an insolvent estate.

12.        The First Applicant points out that it is trite that where it regards the 48-hour notice, practice dictates that the Master of the High Court makes an appointment of a provisional liquidator using only the originally signed requisition forms which have been delivered to him within this 48-hour notice window. It has the potential of prejudicing certain creditors who are not able to submit their requisitions in time, which is the primary complaint of Mr. Dube in the Public Protector's report.

13.        It was pointed out that nowhere in the Applicants' founding papers is there any suggestion that the Master of the North Gauteng High Court applied the 48-hour notice practice in the appointment of the provisional liquidators who at that time, were Third and Fourth Respondents. The applicant had never raised the same complaint, not in their founding papers nor in oral argument, nor during the argument of the application for leave to appeal.

14.        The First Applicant points out that the First Respondent, Mr. Mulaudzi, signed and submitted a requisition form to the Master of the North Gauteng High Court in support of Mr. Sithole's appointment as provisional trustee. The requisition form was signed by Mr. Mulaudzi on behalf of his own company, Luvhomba Group. It was for an amount of R 3 946 950.00 and it was rejected by the Master of the North Gauteng High Court because it was a director's loan between Mr. Mulaudzi and the company.

15.        It was pointed out that Mr. Mulaudzi's erstwhile attorneys also submitted a requisition for an amount of R 1 348 909.00, as did a number of other creditors in the Applicants' insolvent estate. There were five (5) valid requisition forms submitted to the Master, supporting Mr. Sithole's appointment as provisional trustee, with a total value of R 103 378 044.50, as well as a number of other requisition forms from other creditors, including requisition forms signed and submitted by Cash Crusaders Franchising (Pty) Ltd and Crusaders Corporate (Pty) Ltd.

16.        First Applicant submits therefore that there is no evidence before Court which suggests that the Master of the North Gauteng High Court applied the same forty-eight (48) hour notice that was the source of complaint in the Public Protector's report. It is submitted that there is no basis for a complaint grounded on allegations that the Master did not consider all valid requisition forms in appointing a provisional trustee, especially since Mr. Mulaudzi's requisition form was considered, but ultimately rejected.

17.        The First Applicant also submits that the Public Protector's report is also irrelevant because it relates specifically to an investigation into the alleged maladministration by the Master of the South Gauteng High Court. In this regard the trustees point out the following:

13.1.   That the Master of the South Gauteng High Court is not a party to this application for leave to appeal - it was the Master of the North Gauteng High Court who appointed the present trustees.

13.2.   That the Public Protector's report does not deal with any alleged maladministration by the Master of the North Gauteng High Court, it is limited to the misconduct by the Master of the South Gauteng High Court.

13.3.   That the Public Protector's report does not deal with any alleged maladministration by the Master of the North Gauteng High Court, it is limited to the misconduct by the Master of the South Gauteng High Court.

13.4.   That the Public Protector's report therefore has absolutely no bearing on either the application for leave to appeal, or the relief sought in the main application.

13.5.   Should this Honourable Court grant the trustees application for leave to appeal, the Applicants will be entitled to place a copy of the Public Protector's report before the full bench of this Honourable Court and the parties can then deal with the Public Protector's report more fully than can happen in this forum.

13.6.   While Mr. Christopher van Zyl's name might be mentioned in the Public Protector's report as the appointed provisional liquidator in Endulwini Resources Limited, it is submitted that the fact has absolutely no bearing on this present application for leave to appeal for, inter alia , the following reasons:

(i).      The principal complaint made to the office of the Public Protector was not against Mr. van Zyl, but was instead made in relation to the alleged maladministration by the Master of the South Gauteng High Court and the policies used by the Master of the South Gauteng High Court in the appointment of provisional liquidators.

(ii).     The Public Protector made no adverse finding against Mr. van Zyl in her report.

(iii).   While the Public Protector did uphold the complaint against the Master of the South Gauteng High Court's misconduct, the Public Protector did not, in her remedial action, set aside Mr van Zyl's appointment or otherwise admonish his actions.

(iv).   There was no finding made in this regard.

(v).    The Public Protector's remedial action was limited to how the Master of the South Gauteng High Court should proceed moving forwards with directives and guidelines regarding the exercise of the Master's discretionary powers in the appointment of provisional liquidators and the abolishment of the 48-hour notice practice and

(vi).   The only similarities in the matter which was investigated by the Public Protector and this application for leave to appeal, is that Mr. van Zyl is one of the jointly appointed liquidators. In 2011 in the Endulwini Resources Limited case Mr. van Zyl was the provisional liquidator appointed; and in Mr. Mulaudzi's case, (5 years later), Mr. van Zyl was one of the final trustees appointed, never having been appointed as a provisional trustee.

 

18.        The First Applicant submits that because the Public Protector's report stands to be disregarded by this court because it is wholly irrelevant for purposes of this case. On the basis, the First Applicant submits that the application for leave to appeal ought to be granted.

19.        The First Respondent contends that there is simply no realistic chance that this appeal will succeed, be it in the Supreme Court of Appeal or a full bench of this honourable court. He argues therefore that the court part to dismiss this application with costs.

20.        The First Respondent argues that the Public Protector's report has nothing to do with this matter. The First Applicant contends that in coming to a final decision on this matter, the court ought to have had sight of the Public Protector's report. The court reviews therefore that having had site of the Public Protector's report, another court will arrive at a different decision.

21.        Consequently, the application for leave to appeal stands to be granted and the following is order is made:

 

ORDER.

21.1.    Leave to appeal to the full bench of this court is granted.

21.2.    Costs shall be costs in the appeal.

 

 

 

T. A. Maumela.

Judge of the High Court of South Africa.

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