IN THE HIGH COURT OF SOUTH AFRICA
(GAUTEJ\JG DIVISION, PRETORIA)

(1)	REPORTABLE.
(2)	OF INTEREST TO OTHER JUDGES
(3)	REVISED.
CASE NO: 23020/2016
4/8/2017

In the matter between:

FIRSTRAND BANK LIMITED						Applicant

and

MONICA GEZINA COWIN N.O.					1st Respondent
LISL ANNA LOUBSER N.O.					2nd Respondent
NEDBANK LTD							3rd Respondent
MASTER OF THE HIGH COURT (PRETORIA)			 4th Respondent
CHESTER FINANCE (PTY) LTD					5th Respondent
COMMISSIONER FOR THE SOUTH AFRICAN
REVENUE SERVICE (PRETORIA)				6th Respondent
ABSA BANK LTD							7th Respondent

JUDGMENT

Baqwa J

Company - Insolvency - whether one of the creditors can sue by way of derivative action -on behalf of company in liquidation - Liquidators having been appointed - but not taking action - to resolve an issue regarding cession rights between two creditors - Section 387 (4) of The Companies Act 61 of 1973 - considered and applied.

Headnote:

FT Group Holdings (Pty) Limited signed two agreements with Nedbank on 4 September 2012. The first was an Invoice Discounting Agreement (IDA). The second was a Deed of Pledge and Cession (Security Cession). In terms of the IDA, FT sold its current and future book debts, that is, claims against its trade debtors to Nedbank.
In terms of the Security Cession, FT ceded all its other claims, that is, all its claims other than its book debts, to Nedbank as security for its debts owed to Nedbank. In May 2012, prior to the transactions with Nedbank, Firstrand provided FT with an overdraft and term loan facility in terms of written agreements. Consequently on 11 May 2012 FT executed in favour of Firstrand a written cession of debts in terms of which FT ceded all its present and future rights, title and interest to claim payment of monies from any debtor in favour of Firstrand.
Nedbank discovered that FT had defrauded it and other financial institutions on a grand scale. On 29 July 2013, it launched an urgent application for FT's provisional liquidation and, in the application gave notice of cancellation of the IDA. Nedbank's application was successful and FT was provisionally wound up on 6 August 2013. The provisional order was made final unto October 2013.
At the time of FT's provisional liquidation, Nedbank held book debts purchased from FT under the IDA with a face value of R93 million. There was a difference of opinion as to whether Nedbank could keep the said amount or release it to the liquidators to be dealt with by the concursus creditorum. The liquidators were unwilling to compel Nedbank to release the said amount in a joint action with Firstrand lest they be perceived as taking the side of one creditor above others. As a result, Firstrand brought this action. Nedbank challenges Firstrand's locus standi to act in place of the liquidators in an insolvent Estate.
Held,	that Firstrand had the necessary 1973.locus standi in term s of section 387 (4) of Act 61 of 1973.

Held,	further that Nedbank must pay to the liquidators of the FT Group the proceeds collected of all existing and future claims and book debts of FT after 29 July 2013, such proceeds to exclude the sum of 93 million rands collected by the third respondent after 29 July 201 3.

Held,	further that each party pay its own costs.

Annotations:

Reported Cases
Walker's Fruit Farm v Summer 1930 TPD 394 at 401
Crest Enterprises v Rycol Beleggings 1972 (2) SA 867 (A) 870.
Francis George Hill Family Trust v South African Reserve Bank and Others 1992 (3) SA 91 (A)
Janse van Rensburg v The Master 2004 (5) SA 173 (T) 
Picardi Hotels v Thekwini Properties 2009 (1) SA 493 (SCA)
Bothma - Bathe Transport v 5 Bothrna & Seun Transport 2014 (2) SA 494 (SCA)
Arse v Minister of Home Affairs 2012 (4) SA 544 (SCA)
National Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA)

Unreported Cases
Stephen Malcolm Gore NO & Others v Sheriff delivered by Binns-Ward J on 13 December 2013 in the Western Cape Division and a case number 15766/2013

International Cases
Attorney General of Gambia v N'jie [1961 ] AC 617 - 634; [1961] 2 ALL ER504 (PC)

Statues
The Insolvency Act, No. 24 of 1936 
The Companies Act, No. 61 of 1973
The Constitution of the Republic of South Africa, 1996

Introduction

[1]	This is an application for a declarator that upon the cancellation of the Invoice Discounting Agreement ("The IDA") between the third respondent and FT Group Holdings (Pty) Ltd (in liquidation), the third respondent only holds security to the existing and future claims and book debts of FT Group Holdings (Pty) Ltd (in liquidation) in terms of the written Deed of Pledge and Cession executed by FT Group Holdings (Pty) Ltd (in liquidation) in favour of the third respondent on the 4th of September 2012 and which is effective only as a cession in securitatem debiti.
[2]	The applicant further seeks a declarator that the dominium of all the rights, title and interest in and to the existing and future claims and book debts of FT Group Holdings (Pty) Ltd (in liquidation) [FT] and collected by the third respondent, vest in and are assets in the insolvent estate of FT (in liquidation) and falls to be administered by the first respondent and the second respondent in terms of the Insolvency Act, No. 24 of 1936 (as amended), the Companies Act, No. 61 of 1973 (as amended) and the law of insolvency and that the third respondent to be ordered to pay to the first and second respondents in their capacities as joint liquidators of FT the proceeds collected of all existing and future claims and book debts of FT Group Holdings (Pty) Ltd (in liquidation).
[3]	The applicant further seeks an order that the third respondent accounts to the first and second respondents in respect of all book debts of FT and provide them with full details in regard thereto and that the third respondent pays interest on the amount to be paid to the first and second respondents at the rate of 9% per annum.
[4]	The applicant also seeks an order in the alternative compelling the first and second respondents to launch legal proceedings (whether by way of action or motion) against the third respondent whereby they seek relief similar to the relief sought in the present application against the third respondent.

The Parties
[5]	The following are the parties herein:

5.1	The applicant is Firstrand Bank Ltd (“Firstrand”) whilst the first and second respondents are the joint liquidators of the FT and they do not oppose the relief sought herein.
5.2	Nedbank is the third respondent and it opposes the relief sought by the applicant.
5.3	The remaining respondents do not oppose the relief sought by the applicant.
5.4	FT was placed under final liquidation during 2013 and is referred to as FT.

Background
[6]	Firstrand provided FT with an overdraft and term loan facility in terms of the written agreements in May 2012. FT had to provide security for the facilities by way of inter alia a cession of any and all of its rights which FT had towards its debtors from time to time upon terms and conditions acceptable to Firstrand. As a consequence of these arrangements and on 11 May 2012 FT executed a written cession of debts in favour of Firstrand in terms whereof, inter alia, FT ceded all its present and future rights, title and interest (whether actual or contingent) to claim payment of any monies from any debtor in favour of Firstrand with effect from 11 May 2012 as security for the due and proper performance and discharge of the obligations owing by FT to Firstrand (the "First rand Cession" ).
[7]	The consequence of the Firstrand Cession was that the dominium (also referred to as the bear dominium or revesionary interest) of the book debts ceded to Firstrand remained vested in FT and upon liquidation would vest in the liquidators who would administer such book debts in the interest of all the creditors with due regard to the secured position of Firstrand as pledgee.
[8]	Subsequently, FT was in need of additional financial assistance and it approached Nedbank during or about August/September 2012.
[9]	On 4 September 2012 FT and Nedbank entered into two agreements, namely, an Invoice Discounting Agreement (IDA) and a Security Cession. IDA was an agreement in terms of which FT sold its book debts to Nedbank on an ongoing basis.
[10]	The invoice discounting facility was initially R70 million but was increased to R100 million by an addendum dated 17 January 2013 and to R200 million by an addendum dated 2 April 2013.
[11]	In terms of clause 3.1 of the IDA, FT sold its ·'Existing Debts" and "New Debts" to Nedbank. The debts were FT's existing and future book debts.
[12]	FT ceded the debts to Nedbank through an out and out cession which vested full title to the debts in Nedbank and this was recorded in the following provisions:

12.1	"The delivery of both the Existing Debts and New Debts shall constitute an out and out cession thereof and Nedbank shall become the absolute holder of such debts. Until such time as any particular debt may be repurchased by the seller in terms hereof, the seller shall have no rights thereto whatsoever." - (clause 3.2)
12.2	''The seller cedes all its rights, title and interest in and to the Existing	, Debts to Nedbank for value received on the Effective Date. Nedbank acceptance cession of such right, title and interest in and to the existing debts on the Effective Date." - (clause 5.1)
12.3	" The seller cedes all its right, title and interest in and to the New Debts for value received to Nedbank on the Effective Date. Nedbank accepts cession of such right, title and interest in and to the New Debts on the Effective Date. The Seller and Nedbank agree that when the New Debts come into existence, right, title and interest will pass to Nedbank without any further expression of intention from either the Seller or Nedbank." - (clause 5.2)

The Issues
[13]	The two agreements referred to (supra) namely IDA and Deed of Pledge and Cession (Security Cession) were not only signed at the same time but cross­ referenced each other. In seeking to analyse the meaning and context of the cession clauses therein, this fact has to be borne in mind.
[14]	In terms of IDA, Nedbank purchased FT's current and future book debts, against its trade debtors from FT. Nedbank paid FT an agreed price for its book debts equal to a percentage of their face value. The book debts were delivered by FT to Nedbank by out and out cession with Nedbank acquiring full ownership thereof.
[15]	In terms of the Security Cession, FT ceded all its other claims other than book debts to Nedbank as security for all its debts owed to Nedbank in securitatem debiti. Consequently, Nedbank acquired a right over those claims akin to a pledge whilst FT retained ownership of the claims.
[16]	During the period 6 July 2013 to 8 July 2013 Nedbank's Debtor Management Team attempted to verify invoices sold to Nedbank in terms of the IDA and had discussions with a manager of FT. From the discussions it transpired that Nedbank had purchased invoices in terms of the IDA to the value of more than R114 000 000.00 while FT's debtors in fact amounted to R43 000 000.00. The preliminary conclusions drawn were that certain invoices sold were inflated whilst others were altogether fictitious. Certain debtors had also been ceded to other banks. In other words, fraud had been committed on a grand scale.
[17]	On 29 July 2013 Nedbank launched an urgent application for FT's provisional liquidation and simultaneously gave notice of cancellation of the IDA. The application was granted and FT was provisionally wound up on 6 August 2013. The provisional order was made final on 2 October 2013. At the point of provisional liquidation Nedbank held book debts purchased from FT under the IDA with a face value of 93 million rands and this is the central issue in this application.
The Parties' Contentions
[18]	Nedbank takes the stance that it had purchased, paid for and acquired full ownership of the book debts. It submitted that it's accrued right to them was therefore not affected by the cancellation of the IDA. The basis of its submission was the rule in the case of Walker's Fruit Farm v Summer 1930 TPD 394 at 401 which had been endorsed by the SCA in cases such as Crest Enterprises v Rycol Beleggings 1972 (2) SA 867 (A) 870.

The Walker's Fruit Farm Rule
[19]	The rule is that cancellation of a contract does not affect accrued rights under it. Greenberg J stated it as follows:
"No doubt it is correct that, where there is repudiation and where the other party elects to treat the contract as at an end, the latter cannot thereafter enforce the contract. But it appears to me that this only applies to the executory portion of the contract; but when a certain right has accrued to the one party before the election, such right is not affected after the election. He treats the contract as at an enrJ as from the date when he makes his election; upon that date the rights have come into existence and can be enforced."
Walker's Fruit Farm p40.
[20]	Firstrand contends that when Nedbank cancelled the IDA, the R93 million worth of claims it had purchased and paid for automatically reverted to FT. Firstrand's stance is at variance with the Walker's Fruit Farm Rule and the basis thereof is the following provisions of the IDA and the Security Cession:

20.1	Clause 26.1 of the IDA
"The Seller shall sign a cession agreement, in terms of which the Seller cedes:-

26.1.1	all its right, title and interest in and to its existing and future claims and book debts that do not form the subject of the sale as contemplated herein, and
26.1.2	with effect from termination (for whatever reason) of this Agreement, or its right, title and interest in and to its existing and future claims and book debts that do form the subject of sale as contemplated hereto Nedbank in securitatem debiti for all obligations it may have or incurred towards Nedbank. The parties confirm that such rights are automatically ceded without further notice."

20.2	Cause 1.5 of the Security Cession FT cedes to Nedbank all its claims of whatever nature " but excluding, for the duration of the Invoice Discounting Agreement entered/to be entered into between Nedbank and me/us, debts sold to Nedbank on the terms of and pursuant to the said Agreement, and subject to clause 29 hereof."
20.3	Clause 29 of the Security Cession "In the event of the termination of the Agreement referred to in clause 1.5 above, this cession and pledge shall be effective in respect of all debts, claims or amounts whatsoever owing or becoming due to metus."

[21]	Firstrand submits that these provisions had of the following effect on cancellation of the IDA

21.1	All FT's claims were autorn atically rendered subject to the Security Cession
21.2	They included the R93 million's worth of claims FT had aiready sold and ceded to Nedbank and for which it had received payment from Nedbank. According to Firstrand, their ownership automatically reverted to FT.
21.3	Whereas Nedbank had previously acquired ownership of the claims it had purchased from FT, it now holds them in pledge under the Security Cession. It lost ownership of the claims and acquired a mere pledge over them.
21.4	The Security Cession, under which Nedbank now holds the claims, ranks after Firstrand's own Security Cession which means that Nedbank, not only lost ownership of the claims it had purchased from FT, but is now left with a mere security cession over those claims which ranks after Firstrand's Security Cession. Nedbank has thus effectively lost its claims purchased from FT altogether.
21.5	According to Firstrand, this loss of the claims was automatically triggered by Nedbank's cancellation of the IDA.

[22]	As a counter to Firstrand's submission Nedbank submits that it ought to be borne in mind that Nedbank cancelled the IDA on the grounds of FT's fraudulent breaches of contract and that the anomalous outcome is that the fraudulent contract breaker is rewarded and its victim heavily penalised by the cancellation of the IDA.
[23]	Nedbank submits further that FT got back the claims it had sold to Nedbank without having to repay the purchase price it had received from Nedbank for those claims and that the fraudulent contract breaker receives a huge bonanza at the expense of its victim.
[24]	Nedbank also submits that these startling anomalies flow from Firstrand's mistaken interpretation of clause 26.1 of the IDA and clause 29 of the Security Cession.

Interpretation of Contracts: The Law
[25]	The core principles governing the interpretation of contracts was restated in the case of National Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) para 18 as follows:

"Interpretation is the process of attributing meaning to the words used in a document, be it legislation, some other statutory instrument, a contract, having regard to the context provided by reading the particular provision or provisions of the document and the circumstances attendant upon its coming into existence. Whatever the nature of the document, consideration must be given to the language used in the light of the ordinary rules of grammar and syntax; the context in which the provision appears; the apparent purpose to which it is directed and the material known to those responsible for its production. Where more than one meaning is possible each possibility must be weighed in the light of all these factors. The process is objective, not subjective. A sensible meaning is to be preferred to one that leads to insensible or unbusinesslike results or undermines the apparent purpose of the document."

[26]	The SCA made the point that a sensible meaning must prevail over one that is not in Picardi Hotels as follows.

" The relevant provision must also be construed in accordance with sound commercial principles and good business sense so that it receives a fair and sensible application."
See Picardi Hotels v Thekwini Properties 2009 (1) SA 493 (SCA) para 5 Bothma - Bathe Transport v 5 Bothma & Seun Transport 2014 (2) SA 494 (SCA) para 10

Interpretation of the Contracts
[27]	It would seem that a proper interpretation in the context of the IDA and Security Cession read as a whole is the following:

27.1	In terms of the IDA, FT sold and ceded its book debts, that is, it's claims against its trade debtors to Nedbank.
27.2	FT ceded all its other claims, that is, all its claims other than its book debts in terms of the Security Cession to Nedbank in securitatem debiti. The Security Cession excluded FT's book debts because they had been sold and ceded to Nedbank in terms of the IDA.
27.3	The effect of cancellation of the IDA removed the basis for excluding FT's book debts from the Security Cession. Clause 26.1 of the IDA and clause 29 of the Security Cession say that if the IDA is cancelled, all FT's claims including its book debts become subject to the Security Cession.
27.4	The cancellation of the IDA does not however re-open prior sales made under it. They remain in place in terms of Fruit Farm Rule. Clauses 26.1 and 29 merely state that the book debts, which previously (during the subsistence of the IDA) would have been sold to Nedbank are henceforth subject to the Security Cession.

[28]	The nub of the issue between the parties is thus what happens to the book debts that were acquired by Nedbank from FT on termination of the IDA. Nedbank submits that in terms of the Walker's Fruit Farm principle, the sales are not affected by the cancellation. Firstrand on the other hand, holds a contrary view. They submit that the book debts revert to FT upon cancellation of the IDA. It relies for this departure from the Walker's Fruit Farm principle on clause 26.1 of the IDA and close 29 of the Security Cession. This necessitates an analysis of the two clauses in question with reference to the background, language and context in which they came into being.
[29]	The IDA provided for Nedbank to purchase and acquire full ownership of FT's book debts and FT did not retain any right to them. This is apparent especially from the following provisions of the IDA:

29.1	Clause 3.1 states that FT sells its book debts to Nedbank and clause 6 determines the purchase price Nedbank pays for them
29.2	Clause 3.2 says that FT's delivery of the book debts to Nedbank " shall constitute an out and out cession thereof and Nedbank shall become the absolute holder of such debts." It adds that, until FT purchases a debt from Nedbank, it "shall have no rights thereto whatsoever."
29.3	Clause 5.1 says FT cedes to Nedbank "a// its right, title and interest in and to" its existing book debts.
29.4	Clause 5.2 says that FT cedes "a// its right, title and interest in and to" its future book debts to Nedbank for value received.
29.5	Clause 5.7 says these cession . "will be out and out cessions" and not "cessions in securitatem debitt .
29 .6	In clause 9.1 the parties agree " that ownership of the existing debts will pass to Nedbank"
29.7	In clause 9.2 the parties agree that "ownership of the new debts will pass to Nedbank" .

[30]	From the clauses referred to above, it is quite apparent that the parties sought to make it abundantly clear that FT's cessions of its book debts to Nedbank were out and out cessions.

The Language Used
[31]	It cannot be gainsaid that the language of clause 26.1 of the IDA and clause 29 the Security Cession is consistent with Nedbank's interpretation and irreconcilable with Firstrand's interpretation of them.
[32]	Clause 26.1 of the IDA states that FT must sign the Security Cession in terms of which it cedes certain claims to Nedbank. It then describes the claims FT must cede to Nedbank. It then specifies clause 26.1.1 that FT must cede all its claims to Nedbank other than those which are subject to the IDA. It then stipulates in clause 26.1.2 that, if the IDA is cancelled, FT must also cede to Nedbank "its existing and future claims and book debts" that form the subject of the IDA.
[33]	Firstrand relies on this provision for the contention that FT's book debts sold to Nedbank under the IDA became subject to the Security Cession. This interpretation is however incompatible with the language of the clause that requires FT to cede to Nedbank "all its right, title and interest in and to its existing and future claims" . Upon cancellation of the IDA, FT no longer has any right, title or interest in its book debts which have been sold to Nedbank. If it were so, the out and out cession and/or sale to Nedbank would have no meaning at all. Their right, title and interest was ceded to and now vest in Nedbank and not in FT. FT cannot cede what it no longer owns under the Security Cession.
[34]	Clause 26 cannot apply to the book debts which were already sold and transferred to Nedbank. It can however apply to FT's existing and future book debts which had not yet been sold to Nedbank when the IDA was cancelled.
[35]	Firstrand further submits that when the IDA was cancelled, the Security Cession was extended to all claims of whatever nature "owing or becoming due to me/us, that is, to FT." This is in terms of clause 29. Whilst clause 29 is quite explicit regarding what needs to be done, this does not and cannot include FT's book debts already sold to Nedbank as such debts are not owing or due to FT. They are owing and are due to Nedbank.

The Context of the Clauses
[36]	Clauses 17.5 and 17.5.4 state that if Nedbank cancels the IDA, it is entitled to demand that FT repurchases all the book debts Nedbank had purchased from FT under the IDA. Firstrand's interpretation is to the effect that on cancellation of the IDA the book debts Nedbank purchased automatically revert to FT. If Firstrand's interpretation is correct, there would be nothing for FT to buy back in terms of the clauses 17.5 to 17.5.4 and it would be impossible to comply with the provisions therein.
[37]	Clause 18.6 provides that, in the event of cancellation of the IDA, FT's " obligations will continue in respect of each debt purchased by Nedbank prior to such cancellation and remain in full force and effect until all amounts to Nedbank have been paid in full' . This provision is in line with and confirms the principle established in the Walker's Fruit Farm case. Firstrand's interpretation is once more at variance with the provisions of this clause.

The Purpose of the Clauses
[38]	Clauses 26.1 of the IDA and 29 of the Security Cession recognise the sale of FT's book debts to Nedbank in terms of the provisions of the IDA. This excludes such debts from the ambit of the Security Cession. Upon cancellation of the IDA, they are however included in the Security Cession as they have ceased to be sold in terms of the IDA. Nedbank submits and I accept that the change can only be made with prospective effect. Positive sales completed under the IDA cannot be reopened in terms thereof. They remain intact in terms of the Walker's Fruit Farm principle.
[39]	If one accepts the submissions by Firstrand, despite the fact that Nedbank cancelled the IDA on the basis of FT's fraudulent breaches of contract, the result of the cancellation would be to strip Nedbank of the book debts it had purchased from FT and vest them in FT without requiring the latter to repay the purchase price it had received for them. That would lead to untenable or absurd results. I accordingly accept the submission that Nedbank's interpretation makes good business sense and that it must prevail over Firstrand's interpretation which is unbusinesslike to a point of being absurd.

Firstrand's Locus Standi
[40]	Nedbank challenges Firstrand's locus standi to bring this application on the basis that the Notice of Motion seeks orders for the benefit of FT's insolvent estate and that there is no basis upon which Firstrand is entitled, by derivative action, to sue on behalf of FT. Nedbank further submits that the right to sue on behalf of a company in liquidation vests exclusively in its liquidators in terms of section 386 (4) (a) of tile Companies Act 61 of 1973 and that it is not open to a single creditor to sue in its own name for and on behalf of the company.
[41]	It is common cause that Firstrand engaged in numerous attempts to persuade the liquidators to bring this application and that Firstrand's efforts were in vain. Firstrand went so far as to get its attorneys to draft the necessary papers to launch an application but one of the liquidators was advised not to cooperate to avoid a possible accusation that the liquidators was preferring one creditor to the exclusion of the others.
[42]	As a result, Firstrand submits that the question as to whether it has locus standi can be determined simply by asking the question "how else can Firstrand bring that dispute to the court for determination?" They then proffer an answer to the effect that there is no other provision and/or avenue open to Firstrand to bring the dispute between itself and Nedbank to the attention of the Court other than this application.

I

[43]	Section 387 (4) of the Companies Act 61 of 1973 provides:

" Any person aggrieved by any act or decision of the liquidator may apply to the Court after notice to the liquidator and thereupon the Coul1 May make such order as it thinks just."

In casu, this Court has to determine whether Firstrand fits the definition of " an aggrieved person"

[44]	In Attorney General of Gambia v N'jie [1961) AC 617 - 634; [1961] 2 ALL ER504 (PC) Lord Denning held that these words " include a person who has a genuine grievance because an order has been made which prejudicially affects his interests". This implies looking at the facts and asking whether the person making the application has a genuine interest which compels him to pursue the application.
[45]	In Francis George Hill Family Trust v South African Reserve Bank and Others 1992 (3) SA 91 (A) at p92 Hoexter JA held that a person aggrieved signifies someone whose legal rights have been infringed - a person harbouring a legal grievance.
[46]	In Janse van Rensburg v The Master 2004 (5) SA 173 (T) at 180 - 181 Patel JA said:

" The phrase ''person aggrieved" certainly does not mean that he or she is a person who is disappointed or disgruntled because of a benefit which he or she might have received. A ''person aggrieved" must surely be a person who has a legitimate legal grievance, for example, a person against whom a decision has been pronounced that wrongfully deprives him or her of something, for instance an entitlement, benefit or right, or unlawfully accuses him or her of something, or wrongfully affected his or her title to do something. The construction of an "aggrieved person" is firmly established in a long line of cases many of which arose in the context of the Insolvency Act."

[47]	It is true that the words in section 387 (4): “the Court may make such order as it thinks just” give the Courts an unfettered judicial discretion. It is trite that in the absence of fraud or a failure to act in good faith, the Court will not interfere in the day-to-day administration of the company's estate unless the liquidator has acted in a way which no reasonable liquidator would have acted, or it is shown that the liquidator, though acting in good faith, did "something so utterly unreasonable and absurd that no reasonable man would have done it." The test is an objective one, the question being how a reasonable liquidator would have acted in the circumstances prevailing at the time. A reasonable liquidator must be taken to be one who is properly advised, i.e. who has such advice when he needs it. See Stephen Malcolm Gore NO & Others v Sheriff delivered by Binns-Ward J on 13 December 2013 in the Western Cape Division under case number 15766/2013 at para 18.
[48]	As alluded to supra written opinions were exchanged dealing with the nature, effect and ranking of the respective cessions involving FT.
[49]	The response of attorneys KWA (for Nedbank) to the demand of attorneys RWL (for Firstrand) on 6 October 2015 was, inter alia:

"If however it be found, whether in an arbitration or in a Court of Jaw, that our client was not entitled to retain the amounts received by it as referred to in your letter and the reply, our client will then have no hesitation in providing such accounting."

[50]	Quite clearly, therefore, even from the correspondence quoted, it was in the contemplation of the parties that the issues concerned would have to be resolved by way of legal process.
[51]	Various avenues and mechanisms were open to the liquidators to resolve the dispute between Firstrand and Nedbank. They could not agree thereto and ultimately refused to proceed with the initial application.
[52]	In my view, the stance taken by the liquidators cannot be said to have been unreasonable precisely because matters relating to interpretation of contracts or statutes are more germane to resolution by the Courts where the parties concerned cannot reach consensus. What the liquidators had in their hands was a legal impasse which was more likely to stall the process which was due to commence in terms of sections 386 and 387 of the Companies Act.
[53]	Over and above the provisions of section 387 (4) of the Act there is also section 34 of the Constitution of the Republic of South Africa (the Constitution) which provides:

"Every one 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, where appropriate, another independent and impartial tribunal or forum.”
Firstrand has a constitutionally entrenched right of access to the Courts in terms of the quoted section.

[54]	Further, section 39 (2) of the Constitution provides:

“When interpreting any legislation, and when developing the common law or customary law, every Court, tribunal or forum must promote the spirit, purpose and object of the Bill of Rights.”

[55]	In Arse v Minister of Home Affairs 2012 (4) SA 544 (SCA) at para 10 the Supreme Court of Appeal said:

“..... section 39 (2) of the Constitution requires Courts when interpreting a statute that is reasonably capable of two interpretations to avoid an interpretation that would render the statute unconstitutional and to adopt the interpretation that would better promote the spirit, purport and objects of the Bill of Rights, even if neither interpretation would render the statute unconstitutional.”
'
[56]	Having regard to the language used in the crafting of section 387 (4) of the Act, the context in which the provision appears, and the apparent purpose to which it is directed, namely an effective process of winding up, I am of the considered view that an interpretation of section 387 (4) to the effect that Firstrand is non-suited would violate section 34 of the Constitution.

ORDER
[57]	In the result, I make the following order:

After having heard counsel on behalf of the applicant and the third respondent, and after having read the papers filed of record

57.1	It is declared that upon the cancellation of the Invoice Discounting Agreement between the third respondent and FT Group Holdings (Pty) Ltd (in liquidation}, the third respondent only holds security to the existing and future claims and book debts of FT Group in terms of the written Deed of Pledge and Cession executed by FT in favour of the third respondent on 4 September 2012 and which is effective only as a cession in securitatem debiti;
57.2	It is dictated that the dominium of all the rights, title and interest in and to the existing and future claims and book debts of FT Group and convicted by the third respondent after 29 July 2013, vest and are assets of the insolvent estate of FT Group and fall to be administered by the first respondent and second respondent in terms of the Insolvency Act, No. 24 of 1936 (as amended), the Companies Act, No. 61 of 1973 (as amended) and the Law of Insolvency;
57.3	The third respondent is ordered to pay the first and second respondents in their representative capacities as joint liquidators of FT Group the proceeds collected of all existing and future claims and book debts of FT Group after 29 July 2013. Such proceeds shall exclude the sum of R93 million collected by the third respondent after 29 July 2013.
57.4	The third respondent is ordered to account to the first and second respondents in respect of all book debts of FT Group collected by the third respondent after 29 July 2013 and to provide them with full detail in regard thereto subject to paragraph 57.3 of this order.
57.5	The third respondent shall pay interest on the amount paid to the first and second respondents in terms of 57.3 supra at the rate of 9% per annum and calculated from 29 September 2015 to date of payment;
57.6	It is declared that the applicant has the necessary locus standi to bring this application in terms of section 387 (4) of Act 61 of 1973.
57.7	Each party shall pay its own costs.

S. A. M. BAQWA
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)

Heard on:				16 May 2017
Delivered on: 

For the Applicant:			Advocate D. M. Leathern 
SC Advocate L. Meintjes

Instructed by:			Rorich Wolmarans & Luderitz Incorporated

For the 3rd Respondent:		Advocate W. H. Trengove SC
Instructed by:			KWA Attorneys