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IN THE HIGH COURT OF SOUTH AFRICA

BOPHUTHATSWANA PROVINCIAL DIVISION

CASE NO.: 607/04

In the matter between:

ASHRAF ALLI ABOO APPLICANT

and

AHMED ALLY RESPONDENT

JUDGMENT

LANDMAN J:

[1] The applicant, Mr Ashraf Alli Aboo, applied on 20 May 2004 for the sequestration of the estate of Mr Ahmed Ally, the respondent.

[2] On 24 May 2004, Gura AJ (as he then was) granted a provisional order of sequestration returnable on 3 June 2004.

[3] On 11 August 2004 the Master appointed Ms Lilly Mampina Malatsi-Teffo of Boitshepo Trustees CC and Mr Mohamed Waheed Essop of Abbizah (Trust CC) to be the provisional trustees of the respondent’s estate.

[4] The Rule Nisi was extended from time to time. As there was no appearance for the applicant on 25 October 2005, I struck the application from the roll. This had the effect of discharging the Rule.

[5] On 8 June 2007 a notice of motion purportedly signed by “the applicant’s attorney” i.e Mr Ashraf Alli Aboo was filed. The following relief is sought:

“1. That the non compliance with the rules and practice of this Honourable Court concerning forms and time periods for applications be condoned and that this matter be heard [as] one of urgency as envisaged in Rule 6(12) of the Uniform Rules;

2. Placing the estate of the First Respondent under final sequestration;

3. Directing that the costs of this Application be costs in the sequestration;

4. Granting the Applicant further and/or alternative relief as this Honourable Court deems fit.”

[6] The application is supported by affidavits by the two provisional trustees.

[7] The attorney, purportedly acting for the applicant, had the papers served upon the two trustees, the applicant, the respondent and the Master.

[8] Attached to the application is a document signed by the respondent withdrawing his opposition in the matter. It is dated 11 June 2007.

[9] Mr Essop’s founding affidavit states that:

“I confirm we were never removed from the Master of the High Court Bophuthatswana under no circumstances till date and urge the Court to please condone and place back on the Roll and issue the final order in this regards as we are acting in the best interest of creditors.

The estate has two properties in this regards and I declare that this estate is hopelessly insolvent.

I accordingly respectfully pray for an order in terms of the affidavit.”

[10] A report by the provisional trustees to the Master is attached. It states:

“At this stage the Trustees hands are tied as final order has not been granted. The property is deteriorating and is still in the hands of the Insolvent who is not paying any rent as we do not have full control or power over the properties and cannot appoint auctioneers to help in the sale of the properties.

Both liquidators are handling the day-to-day administration of the estate.”

[11] The assets of the estate are estimated at R885 000 and the liabilities R1 388 909.93. The unsworn reports concludes:

“We have been advised that the Attorneys dealing with the matter have been removed from the matter and it appears that they will not be reinstated. It is the provisional Trustee’s humble request that the final court order be granted to enable us to have the final appointment certificate in order to proceed with the estate as we feel that the body of creditors interest is not taken care of.

Furthermore, we request that the costs of this application should form part of the administration costs. We further confirm that this estate is hopelessly insolvent.

We trust the above meets your approval.”

[12] The provisional trustees state in supplementary affidavits that:

“When the final order had to be brought in the HIGH COURT OF BOPHUTHSWANA MMABATHO, the attorney on record A K AHMED was struck off the roll and thus no clarity was given in regards to the final order.

We as provisional trustees now humbly urge the HIGH COURT OF BOPHUTHATSWANA and the HONOURABLE LORDSHIP to grant the final sequestration order due to the fact that creditors are suffering losses and as provisional trustees no finality can come of this matter.

I further confirm that this estate is hopelessly insolvent and we wish to continue to finalize the matter as a matter of urgency.”

[13] When Mrs Gutta moved the application, I inquired whether the provisional trustees had the necessary locus standi to intervene, request the Rule to be reinstated and apply for the final sequestration of the respondent. Mrs Gutta assured me that this was perfectly permissible. She handed up a draft order reflecting, inter alia, that she appeared for the applicant i.e Mr Ashraf Alli Aboo, reinstating the Rule and postponing the matter and extending the Rule for service as required by the provisional order dated 24 May 2004. I reserved judgment.

[14] Undoubtedly this court has the power to reinstate a Rule Nisi which has lapsed. See Rule 27(4) of the Uniform Rules of Court and Ex Parte S & U TV Services (Pty) Ltd: In Re S & U TV Services (Pty) Ltd (In Provisional Liquidation) 1990 (4) SA 88 (W) 90C-D. The revival of a lapsed Rule Nisi regarding the winding up of a company was not treated as a formality. The headnote to the report accurately sums up Flemming J’s (as he then was) approach to the matter. The headnote reads:

“Rule 27(4) of the Uniform Rules of Court (which provides for the revival of a rule nisi which has been discharged by default of appearance of the applicant) discloses no intent to override or detract from the rights or interests of an opposing litigant or of third parties. Neither does it diminish the need to care for such interests. The application of Rule 27(4) must therefore be strongly influenced by the particular instance before the Court. Crucial to such approach would be for the Court to determine what effect the revival of the rule nisi would have.

The Court refused an application for the revival of a provisional order of winding up of a company where it was brought three weeks after the discharge of the provisional order by reason of there being no appearance on the return day on behalf of the applicant. The Court took into account the probability that, because of the lapse of three weeks, matters were no longer res integra in that possible respondents in the application for the winding up of the company may have heard of the discharge and acted accordingly (and have done acts which were prohibited by the rule nisi), or directors of the company might have concluded contracts during that period or a creditor of the company might have commenced with a liquidation application. The Court, however, on the basis, inter alia, that the advantages of a rule nisi in winding-up applications were limited, gave leave to the applicant to approach the Court in a new application for a final winding-up order using the papers in the previous application, provided that such application was brought before three weeks had lapsed.”

[15] I am of the view that similar considerations apply to a lapsed provisional order of sequestration. It is, however unnecessary to decide the matter on this basis. The provisional trustees have a more fundamental hurdle to overcome that of locus standi in judicio.

[15] I have not found any authority which permits trustees to apply in their own names or intervene to revive a creditor’s lapsed provisional order and use it as a vehicle to seek confirmation of a provisional order. On the contrary a provisional trustee’s power to hand in a report on a return day is limited. So much so that it does not even constitute a right or legal interest.

15.1 A trustee may possibly place information before a court on the return day. But it is merely to assist the court. And this may be done only in the most exceptional circumstances. See Van Aswegan v Pienaar 1967 (3) SA 66 (O) at 68. But see Smith and Walton (SA) Pty Ltd v Holt 1961 (4) SA 157 (D) at 162A followed by the Full Bench of the TPD in Shepherd v Mitchell CCTS Seafreight (SA) Pty Ltd 1984 (3) SA 202 (T) 206C-G.

15.2 A trustee has no right to hand in such a report as was held by the Full Bench in Du Plessis en ʼn Ander v Tzeferos 1979 (4) SA 819 (O). Van Heerden J (Smuts J concurring) put it this way at 829 A-D:

“Ek kan ook nie ʼn grond vind waarop gesê kan word dat die eerste appellant ʼn reg gehad het om ʼn verklaring in te dien nie. Hy was nie ʼn party tot die sekwestrasieverrigtinge nie, en het nie ʼn regsbelang gehad by al die of die toestaan van ʼn sekwestrasiebevel nie. Hy sou dus hoogtens soos enige ander persoon wat nie sodanige belang gehad het nie as amicus curiae kon aangebied het om inligting voor die Hof te plaas.

Dit volg dus dat die eerste appellant nie ʼn regsbelang gehad het wat deur die deurhaling van sy verklaring aangetas kon word nie, en dat hy derhalwe nie teen die bevel waarvolgens die deurhaling geskied het, kon geappelleer het nie. Indien sy verklaring as deel van die tweede appellant se repliserende verklaring ingehandig is, en eersgenoemde verklaring om een of ander rede deurgehaal is, sou hy klaarblyklik nie ʼn reg van appèl gehad het nie aangesien hy nie ʼn party tot die aansoek was nie. Na my mening is sy posisie nie anders bloot omdat hy uit sy eie die verklaring ingedien het nie, want bedoelde indiening het hom nog steeds nie ʼn party tot die aansoek gemaak nie. Ewe min het hy ʼn party geword as gevolg van die uitreiking van die bevel nisi op 20 April 1978. Die doel van hierdie bevel, insoverre dit bekragtig is, was primer om die eerste appellant die geleentheid te gee om redes te toon waarom, indien sy verklaring deurgehaal sou word, ʼn kostebevel nie teen hom gemaak sou word nie.”

[16] The trustees in this matter want to go a step further. They want to use the application of an applicant, who has clearly lost interest in ensuring the final sequestration of the respondent, and to do so partly in their own interest so that they can be provided with final appointment certificates to wind up the estate. They have no mandate, assuming that such a mandate could be legally obtained, from the creditors. The powers conferred upon a provisional trustee by section 18 of the Insolvency Act 24 of 1936 do not include the power to apply for the final sequestration of a respondent.

The danger of a partisan provisional trustee associating himself or herself with an applicant seeking the sequestration of a respondent has been emphasised in Bremer Meulens (Edms) Bpk v Tzerefos 1978 (3) 892 (O) at 895.

[16] In the present case it is the provisional trustees who seek to sequestrate the respondent on the basis of an application which, to all intent and purposes, has been abandoned. This is impermissible. The provisional trustees have no locus standi in the matter. The application must therefore be dismissed.

[17] In the premises I make the following order:

1. The application is dismissed.

2. The costs of this application are not recoverable from the respondent’s estate.

____________________

A A LANDMAN

JUDGE OF THE HIGH COURT

Appearances:

For the Applicant : Adv Gutta

For the Respondent : No Appearance

Attorneys:

For the Applicant : D C Kruger

For the Respondent :

Date of Hearing : 14 June 2007

Date of Judgment : 28 June 2007

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