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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

 

IN THE HIGH COURT OF SOUTH AFRICA

NORTH WEST DIVISION, MAHIKENG

 

CASE NUMBER: M282/2020

Reportable: YES/NO

Circulate to Judges: YES/NO

Circulate to Magistrates: YES/NO

Circulate to Regional Magistrates: YES/NO

 

 

In the application for leave to appeal in:-

 

B N MOKASULE N.O.	1st Applicant
SC MOKASULE N.O.	2nd Applicant
TG MOKGASANI N.O.	3rd Applicant
(In their capacity as trustees for the MOKASULE INVESTMENT TRUST Reg No I 1[...])

 

and

 

DEON MARIUS BOTHA N.O.	1st Respondent
MOTSHWANE MERRIAM KUTUMELA N.O.	2nd Respondent
(in their capacities as joint trustees in the insolvent estate of TP MOKASULE Master’s Ref: 0[...])

 

In Re

In the matter between:-

 

DEON MARIUS BOTHA N.O.	1st Applicant
MOTSHWANE MERRIAM KUTUMELA N.O.	2nd Applicant
(in their capacities as joint trustees in the insolvent estate of TP MOKASULE Master’s Ref: 0[...])

 

and

 

B N MOKASULE N.O.	1st Respondent
SC MOKASULE N.O.	2nd Respondent
TG MOKGASANI N.O.	3rd Respondent
(In their capacity as joint trustees for the MOKASULE INVESTMENT TRUST Reg No I 1[...])

 

This judgment is electronically handed down via e-mail to the parties’ legal representatives.  The date and time for handing down of the judgment is deemed to be 2024-01-08 at 10h00.

 

ORDER 

 

The following order is made:

 

i)             The application for leave to appeal is dismissed with costs.

 

JUDGMENT: LEAVE TO APPEAL 

 

FMM REID, J:

Introduction:

[1]          This is an application for leave to appeal against the judgment made by this Court on 15 September 2023.  In this judgment, the Mokasule Investment Trust (Reg No I 1[...]) had inter alia been sequestrated and placed in the hands of the Master of the High Court.

 

[2]          The respondents in the application for leave to appeal are the liquidators of the insolvent estate of TP Mokasole.  The applicants in the application for leave to appeal are the trustees for the Mokasule Investment Trust.  In order to avoid confusion, I will refer to the respondents as the liquidators and the applicants as the Trust. 

 

[3]          The order granted on 15 September 2023 reads as follows:

 

“i)         The applicants are authorised to launch this application and to utilise the services of attorneys and advocates to do so as required in terms of section 73 of the Insolvency Act 24 of 1936;

 

ii)            The MOKASULE INVESTMENT TRUST IT NO 1[...] be and is hereby sequestrated in the hands of the Master of this Court.

 

iii)           The costs of the application are costs in the administration of the MOKASULE INVESTMENT TRUST IT NO 1[...].”

 

Grounds of appeal

[4]          That the Court erred in failing to appreciate that the Trust denied that the insolvent is a creditor of the Trust, which leads to a factual dispute that could not be resolved by way of sequestration proceedings.

 

[5]          In failing to find that the allegations made by the liquidators that the Trust was used by the insolvent as a vehicle to obtain assets, resulting in proceeds which had fraudulently embezzeled from the Klerksdorp Municipality, was insufficient in making a finding that the Trust committed an act of insolvency.

 

[6]          Despite finding that the Court is not to determine the manner in which the properties were obtained, the Court found that it is in the interest of justice that the Trust be placed under sequestration.

 

[7]          By finding that the insolvent loaned an amount of R20,388,840.73 to the Trust and in making that finding, relying on privileged and inadmissible alleged financial statements of the Trust.

 

[8]          By not appreciating that the financial statements were for the financial years of 2014 and 2015, which is long after prescription of any possible claim that the insolvent had against the Trust.

 

[9]          In not appreciating that the onus to proof insolvency of the Trust was on the liquidators and the averments made by the liquidators did not meet the onus for final sequestration as set out in the legislation.

 

[10]       By relying on the forensic report dated 4 October 2019 when the report was to be considered as hearsay, speculation and assumptions.  The Court should have rejected the report.

 

[11]       By failing to appreciate that if the claim on behalf of the insolvent is proven against the Trust, the Trust’s assets by far exceed its liabilities.

 

[12]       In failing to take into account that no meetings have been convened in the insolvent estate and no creditor has proven a claim against the insolvent estate.

 

[13]       By failing to take into account that the insolvent’s sequestration is under review and should the review be successful, the liquidation of the Trust would become moot.

 

[14]       By not appreciating that immovable properties had been purchased by the Trust in 2014 and 2015 and the insolvent had only been sequestrated in 2019.  It is therefore incorrect, so the argument goes, that the Trust disposed of immovable property which the insolvent has purchased.

 

[15]       By failing to find that no substantive reasons exist for a sequestration of the Trust as the Trust has no creditors.

 

[16]       The application for leave to appeal is opposed by the liquidators.

 

Legal position

[17]       The legal basis for leave to appeal is found in section 17(1)(a) of the Superior Courts Act 10 of 2013 (Superior Courts Act) which provides that:

 

“(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;”

(own emphasis)

 

[18]       After the enactment of section 17 of the Superior Courts Act, the test for the application for leave to appeal, has been set out as follows in S v Kruger 2014 (1) SACR 647 (SCA):

 

“[2] Before dealing with the merits of the appeal, it is necessary at the outset to deal with the test applied by the high court in granting leave to appeal to this court. Despite dismissing the appellant's appeal, the high court concluded that it was 'possible' that another court might arrive at a different conclusion and that leave to appeal should not be 'lightly refused' where the person concerned is facing a lengthy sentence of imprisonment. This is an incorrect test. What has to be considered in deciding whether leave to appeal should be granted is whether there is a reasonable prospect of success. And in that regard more is required than the mere 'possibility' that another court might arrive at a different conclusion, no matter how severe the sentence that the applicant is facing. As was stressed by this court in S v Smith  2012 (1) SACR 567 (SCA) para 7:

 

'What the test of reasonable prospects of success postulates is a dispassionate decision, based on the facts and the law, that a court of appeal could reasonably arrive at a conclusion different to that of the trial court. 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 categorised as hopeless. There must, in other words, be a sound, rational basis for the conclusion that there are prospects of success on appeal.”

 

[3] The time of this court is valuable and should be used to hear appeals that are truly deserving of its attention. It is in the interests of the administration of justice that the test set out above should be scrupulously followed. In the present case it was not, and this court has had to hear an appeal in respect of which there was no reasonable prospect of success.”

(own emphasis)

 

[19]       This test whether to grant leave to appeal or not, was aptly set out in Cook v Morrisson and Another 2019 (5) SA 51 (SCA) as follows:

 

“[8] The existence of reasonable prospects of success is a necessary but insufficient precondition for the granting of special leave. Something more, by way of special circumstances, is needed. These may include that the appeal raises a substantial point of law; or that the prospects of success are so strong that a refusal of leave would result in a manifest denial of justice; or that the matter is of very great importance to the parties or to the public. This is not a closed list (Westinghouse Brake & Equipment (Pty) Ltd v Bilger Engineering (Pty) Ltd  1986 (2) SA 555 (A) at 564H – 565E; Director of Public Prosecutions, Gauteng Division, Pretoria v Moabi  2017 (2) SACR 384 (SCA) ([2017] ZASCA 85) para 21).”

(own emphasis)

 

[20]       In relation to the meaning of the words “reasonable prospects of success” it was held as follows by Snyman AJ in the Labour Court in Scheepers v Transnet Bargaining Council and others (Leave to Appeal) [2023] JOL 59387 (LC):

 

[15] As to the meaning of ‘reasonable prospects of success’, the Court in Member of the Executive Council for Health, Eastern Cape v Mkhitha and Another [2016] JOL 36940 (SCA) at paras 16 – 17 said the following: ‘Once again it is necessary to say that leave to appeal, especially to this Court, must not be granted unless there truly is a reasonable prospect of success. Section 17(1)(a) of the Superior Courts Act 10 of 2013 makes it clear that leave to appeal may only be given where the judge concerned is of the opinion that the appeal would have a reasonable prospect of success; or there is some other compelling reason why it should be heard. An applicant for leave to appeal must convince the court on proper grounds that there is a reasonable prospect or realistic chance of success on appeal. A mere possibility of success, an arguable case or one that is not hopeless, is not enough. There must be a sound, rational basis to conclude that there is a reasonable prospect of success on appeal.’

 

…

 

[18] The applicant thus failed to show that there exists a reasonable prospect that another Court would come to a different conclusion, and it is my view that the applicant has no prospect of success on appeal. The application for leave to appeal falls to be dismissed. I believe the following dictum from the judgment in Martin & East (Pty) Ltd v National Union of Mineworkers and Others (2014) 35 ILJ 2399 (LAC) at 2405J-2406A to be appropriate in deciding to refuse leave to appeal: ‘… The Labour Relations Act was designed to ensure an expeditious resolution of industrial disputes. This means that courts, particularly courts in the position of the court a quo, need to be cautious when leave to appeal is granted. …’

 

[19] All said, the applicant has simply made out no case for leave to appeal. I thus conclude that the applicant, overall, has shown no reasonable prospect that another Court could come to a different conclusion, has no prospects of success on appeal, and the leave to appeal application must fail.”

 

[21]       The application of the test for leave to appeal has also been set out in more detail by Prinsloo J in Hartley v SA Social Security Agency (Leave to Appeal) [2023] JOL 59800 (LC) as follows:

 

[15]      The test is not whether there is a possibility that another court could come to a different conclusion, the test is whether there is a reasonable prospect that another court would come to a different conclusion.

 

[16]      It is further trite that an applicant in an application for leave to appeal must convince the court a quo that it has reasonable prospects of success on appeal. Appeals should be limited to matters where there is a reasonable prospect that the factual matrix could receive a different treatment or where there is some legitimate dispute on the law.

 

[17]     In Seatlholo and others v Chemical Energy Paper Printing Wood and Allied Workers Union and others, (2016) 37 ILJ 1485 (LC) at para 3. This Court confirmed that the test applicable in applications for leave to appeal is stringent and held as follows: ‘The traditional formulation of the test that is applicable in an application such as the present requires the court to determine whether there is a reasonable prospect that another court may come to a different conclusion to that reached in the judgment that is sought to be taken on appeal. As the respondents observe, the use of the word “would” in s 17(1)(a)(i) is indicative of a raising of the threshold since previously, all that was required for the applicant to demonstrate was that there was a reasonable prospect that another court might come to a different conclusion (see Daantjie Community and others v Crocodile Valley Citrus Company (Pty) Ltd and another (75/2008) [2015] ZALCC 7 (28 July 2015). Further, this is not a test to be applied lightly – the Labour Appeal Court has recently had occasion to observe that this court ought to be cautious when leave to appeal is granted, as should the Labour Appeal Court when petitions are granted. The statutory imperative of the expeditious resolution of labour disputes necessarily requires that appeals be limited to those matters in which there is a reasonable prospect that the factual matrix could receive a Woolworths Limited v Matthews [1999] 3 BLLR 288 (LC) different treatment or where there is some legitimate dispute on the law (See the judgment by Davis JA in Martin and East (Pty) Ltd v NUM (2014) 35 ILJ 2399 (LAC), and also Kruger v S 2014 (1) SACR 369 (SCA) and the ruling by Steenkamp J in Oasys Innovations (Pty) Ltd v Henning and another (C 536/15, 6 November 2015).’

 

[18]     In deciding this application for leave to appeal, I am also guided by the dicta of the Supreme Court of Appeal where it held in Dexgroup (Pty) Ltd v Trustco Group International (Pty) Ltd and others 2013 (6) SA 520 (SCA) at para 24 that: ‘…The need to obtain leave to appeal is a valuable tool in ensuring that scarce judicial resources are not spent on appeals that lack merit. It should in this case have been deployed by refusing leave to appeal.’”

 

[22]       The Supreme Court of Appeal and the Labour Appeal Court has expressed its unequivocal view that leave to appeal should not be lightly granted.  In fact, the quoted passages emphasis that leave to appeal should only be granted in matters that have merit.  The appeal courts have expressed that the test for leave to appeal to be granted, and a proper consideration of the test on the facts before Court, is “… a valuable tool in ensuring that scarce judicial resources are not spent on appeals that lack merit.” See Dexgroup quoted above.

 

 

Analysis

 

[23]       Mr TP Mokasule has been sequestrated (under the Masters reference number M0[...]) and the liquidators act on behalf of the sequestrated estate.  The application is unique in that the trustees of the Mokasule Investment Trust are family members and oppose the sequestration of the trust.

 

[24]       What runs as a golden thread through the application for sequestration against which leave to appeal is sought, is the allegation that the Trust was used by Mokasule as a conduit for certain dubious transactions.

 

[25]       In my judgment, I have found that the Trust has committed three (3) acts of insolvency.  I have also found that the liquidators met the onus to prove that final sequestration of the Mokasule Investment Trust be granted.

 

[26]       The reasons for my findings are set out in detail in the written judgment and it serves no purpose to rehash same here.

 

[27]       This Court maintains the view that it is in the interest of justice that the Trust be finally sequestrated.

 

[28]       After having due regard to the grounds of appeal, I hold the view that there is no reasonable prospect that another court may come to a different conclusion, being presented with the same facts.

 

[29]       It follows that the application for leave to appeal is to be dismissed.

 

Cost

[30]       The normal principle of cost orders is that the successful party should be reimbursed for the cost occurred in the litigation.  

 

[31]       I find no reason why there should be any deviation from the normal principle and the applicant in the application for leave to appeal is ordered to pay the costs of the respondents in the application for leave to appeal.

 

 

Order:

[32]            In the premise I make the following order:

 

 

i)             The application for leave to appeal is dismissed with costs.

 

 

FMM REID

JUDGE OF THE HIGH COURT

NORTH WEST DIVISION MAHIKENG

 

DATE OF HEARING:                             2 NOVEMBER 2023

DATE OF DELIVERY OF JUDGMENT: 8 JANUARY 2024

 

APPEARANCES:

COUNSEL FOR APPLICANT:	ADV H SCHOLTZ
ATTORNEYS FOR APPLICANT:	MALESHANE ATTORNEYS INC.
	3590 WILDEVY STREET
	DANVILLE, EXT 34
	MAHIKENG, 2745
	EMAIL: info@maleshaneinc.co.za
	TEL: 018 381 0757
COUNSEL FOR RESPONDENTS:	J WALKER
ATTORNEYS FOR RESPONDENTS:	STEENKAMP INCORPORATED
	20 COOKE STREET
	MAHIKENG, 2745
	EMAIL: litigation@steenkampinc.co.za
	jeanri@jwa-inc.co.za
INSTRUCTED BY:	JOHN WALKER ATTORNEYS INC.

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