Applemint Properties 45 (Pty) Ltd v The Master of the High Court, KwaZulu-Natal Division, Pietermaritzburg

• Jurisdiction: South Africa
• Judge: Henriques J
• Judgment Date: 21 December 2018
• Docket Number: 13377/13
• Court: KwaZulu-Natal Division, Pietermaritzburg
• Hearing Date: 05 December 2014
• Citation: 2019 JDR 0081 (KZD)

Henriques J:

Introduction

[1]

This is an application in terms of s 151 of the Insolvency Act 24 of 1936 ('the Insolvency Act') to review and set aside decisions taken by the first respondent at the first meeting of creditors of the insolvent estate of Grant Logan Wishart ('the insolvent') held in Pietermaritzburg on 8 November 2013.

[2]

The applicants seek to review and set aside the first respondent's decision to:

(a)

Reject seven claims lodged by the eight applicants [1] ; and

(b)

Admit and approve a claim by the second respondent, FirstRand Bank of South Africa Ltd trading as Wesbank ('FRB').

[3]

In addition, they seek orders directing the first respondent to:

(a)

Approve the claims of the first to the eighth applicants; and

(b)

Reject the claim of the second respondent, FRB (the "FRB claim").

[4]

The application is only opposed by the second respondent, being FRB. The basis for such opposition is set out in the answering affidavit. In addition FRB has challenged the locus standi of the applicants to institute these review proceedings, to review the approval of FRB's claim and by way of notice had indicated that at the hearing of the application, it would seek to strike out certain paragraphs of the applicants' affidavits.

Issues for determination

[5]

This court is required to determine whether the application to strike out ought to succeed, whether the applicants have locus standi to institute these review proceedings in terms of section 151, locus standi to challenge the approval of FRB's claim and the costs of the review application.

Relief Sought by the Applicants

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[6]

The relief sought by the applicants as set out in the notice of motion was the following:

'1.

That the following decisions made by the Master of the High Court, KwaZulu-Natal Division, Pietermaritzburg at the first meeting of creditors in the insolvent estate of Grant Logan Wishart (Master's Ref N156/13) (the insolvent) on 8 November 2013 be and are hereby reviewed and set aside:

1.1

The decisions to reject the claims of each of the Applicants, particulars of which are as follows:

1.1.1

The claim of the First Applicant, in the amount of R 30 547,27

(Claim No 4)

1.1.2

The claim of the Second Applicant, in the amount of R 1 602,40

(Claim No 5)

1.1.3

The claim of the Third Applicant, in the amount of R 250 000

(Claim No 6)

1.1.4

The claim of the Fourth Applicant, in the amount of R 350 000

(Claim No 7)

1.1.5

The claim of the Fifth Applicant, in the amount of R 86 374,65

(Claim No 8)

1.1.6

The claim of the Sixth Applicant, in the amount of R 475 000 (R 275 000 plus R 200 000)

(Claim No 9)

1.1.7

The joint claim of the Seventh and Eighth Applicants, in the amount of R 45 million

(Claim No 10)

1.2

The decision to admit and approve the claim of the Second Respondent, in the amount of R 32 132 884,95.

(Claim No 2)

2.

That the Master be directed to admit and approve each of the claims of the Applicants, as set out in paras 1.1.1 to 1.1.7, above, as duly proved in the insolvent's estate in terms of the provisions of s 44 of the Insolvency Act, 1936 (Act 24 of 1936).

3.

That the Master be directed to reject the claim of the Second Respondent.

4.

That the costs of the application be paid by the estate of the insolvent as part of the costs of administration thereof, alternatively that such costs be paid by any party opposing the application.

5.

That further or alternative relief be granted to the Applicants.'

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Common Cause Facts

[7]

It is common cause that the estate of the insolvent was finally sequestrated on 30 September 2013 in terms of orders made by this court under case number 9293/13 at the instance of FRB.

(a)

The first respondent duly convened the first meeting of creditors by publication of a notice in the Government Gazette in terms of s 44(1) of the Insolvency Act for the proof of their claims against the insolvent estate and for the election of a trustee or trustees.

(b)

The meeting was convened to take place on Friday, 8 November 2013 at the first respondent's offices in Church Street, Pietermaritzburg. Each of the applicants lodged their claims with the first respondent more than 24 hours before commencement of the first meeting of creditors and as a consequence met the requirements of s 44(3) of the Insolvency Act.

(c)

The first meeting of creditors was presided over by an assistant master, Ms K. Padayachee. All of the applicants were represented at the first meeting of creditors by attorney Andries Geyser of Venns Attorneys, Pietermaritzburg.

(d)

Each of the claims was presented for proof and each claim was assigned a number on a list of claims.

(e)

The second respondent's claim was allocated Claim No 2.

(f)

The first applicant's claim was allocated Claim No 4.

(g)

The second applicant's claim was allocated Claim No 5.

(h)

The third applicant's claim was allocated Claim No 6.

(i)

The fourth applicant's claim was allocated Claim No 7.

(j)

The fifth applicant's claim was allocated Claim No 8.

(k)

The sixth applicant's claim was allocated Claim No 9.

(k)

The seventh and eighth applicants' claim was allocated Claim No 10.

(l)

The third respondent attended the meeting as provisional trustee of the insolvent estate. The applicants' claims were rejected by the first respondent at the first meeting of creditors held on 8 November 2013.

(m)

FRB's claim was admitted by the first respondent at the meeting of creditors on 8 November 2013. The claims of the applicants were opposed because of the close connection between the insolvent and each of the applicants and it was submitted that such claims were not bona fide or genuine.

(n)

The applicants objected to the approval and proof of the second respondent's claim as the claim was in the sum of R32 132 884.95. The applicants contend

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that FRB had a pledge over an aircraft as security for its debt and such security was realised for an amount of R13 489 392 and this amount was not taken into account when the claim was approved and admitted.

(o)

The reasons for the rejection of the applicants claims and the approval of FRB's claims is set out in a letter of the first respondent dated 21 November 2013 [2] , received by the applicants' attorney of record in December 2013.The first respondent recorded in such letter that the 'claims were examined on the face of the documents submitted."

[8]

At the outset it is necessary to deal with the application to strike out. This application must be viewed in the light of the fact that these are review proceedings and the applicants supplemented their founding affidavit on receipt of the record. In addition, mention was made of the fact that not all the relevant documentation formed part of the review record submitted by the first respondent.

Application to strike out

[9]

The second respondent gave notice of an application to strike out dated 1 December 2014. The notice indicates that at the hearing of the main application, the second respondent would apply in terms of rule 23(2) of the Uniform Rules of Court to strike out the following paragraphs, namely, paragraphs 11.3, 12.1, 13.1, 14.1, 15.1 and 15.2 of the applicants' supplementary founding affidavit and paragraphs 9 and 10 of the applicants' replying affidavit.

[10]

The basis proffered by the second respondent to have these paragraphs struck out are two fold namely, that the paragraphs in the supplementary founding affidavit contained new allegations which were not included in the affidavit of proof of claim filed by the applicants and secondly, that the applicants raise new matter in paragraphs 9 and 10 of the replying affidavit.

[11]

Rule 23(2) reads as follows:

'Where any pleading contains averments which are scandalous, vexatious, or irrelevant, the opposite party may, within the period allowed for filing any subsequent pleading, apply for the striking out of the matter aforesaid, and may set such application down for hearing in terms of

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paragraph (f) of subrule (5) of rule 6, but the court shall not grant the same unless it is satisfied that the applicant will be prejudiced in the conduct of his claim or defence if it be not granted.'

[12]

The court has a discretion which must be exercised judicially and the key consideration in the exercise of that discretion is one of prejudice. A matter which is scandalous or vexatious can at the discretion of the court be struck out of a pleading only if the court is satisfied that the applicant for the striking out will be prejudiced in the conduct of his defence if such strike out would not be granted. [3]

[13]

In order to decide whether this court should exercise its discretion and strike out the offending paragraphs it is necessary to set these out in detail. Paragraph 11.3 reads as follows: [4]

'The claim comprises rentals or residential space, the provision of lunches and the payment of insurance premiums on behalf of the insolvent. In para 28.1 I erroneously refer to this claim as one for services rendered. I apologise for such error. The claim is for the items as set out in the invoices.'

[14]

Paragraph 12.1 relates to the second applicant's claim and reads as follows: [5]

'This claim comprises monies lent and advanced and/or expenses paid on behalf of the insolvent by the Second Applicant.'

[15]

Paragraph 13.1 reads as follows: [6]

'This claim relates to an advance of R 250 000 by the Third Applicant to the insolvent.'

[16]

Paragraph 14.1 reads as follows: [7]

'This claim comprises a loan of an amount of R 350 000 by the Wishy Family Trust to the insolvent.'

[17]

Paragraph 15.1 reads as follows: [8]

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