In the High Court of South Africa North West Division, Mahikeng

Home , Rustenburg

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 NO.: 51/2019

In the matter between:

JOHANNES HENDRIKUS LAMBERTUS APPLICANT STEPHANUS BOTES (Identity Number: 78[…])

and

PIETER HENDRIK STRYDOM NO FIRST RESPONDENT

DEON MARIUS BOTHA NO SECOND RESPONDENT

YUSUF EBRAHIM NO THIRD RESPONDENT

[In their capacities as the curators in the insolvent estate of JHLS Botes: Master’s Reference No: M97/2017]

LOUWRENS COENRAAD STANDER NO FOURTH RESPONDENT

MPOYANA LAZARUS LEDWABA NO FIFTH RESPONDENT

[In their capacities as the Joint-Liquidators of KIARATRAX (PTY) LTD (In Liquidation): Registration Number: 2011/109563/07]

WORSHIPFUL MAGISTRATE SIXTH RESPONDENT SWARTRUGGENS (Seized with matter 16/2020 on 11 June 2020)

WORSHIPFUL MAGISTRATE SEVENTH RESPONDENT RUSTENBURG (Seized with matter 3266/2020 on 11 June 2020)

PAYNE ATTORNEYS INC EIGHTH RESPONDENT

PETER CLAUDE PAYNE NINTH RESPONDENT

URGENT APPLICATION

GURA J

DATE OF HEARING : 25 JUNE 2020

DATE OF JUDGMENT : 25 SEPTEMBER 2020

FOR THE APPLICANT : ADV M COETSEE

FOR THE RESPONDENT : ADV AA BASSON

JUDGMENT

GURA J.

Introduction.

[1] The applicant approached this Court on an urgent basis seeking an order which is couched in the following terms:

“1. Dispensing with the forms and service provided for in the Rules of the above Honourable Court, and disposing of the relief prayed by way of urgency in terms of Rule 6(12)(a);

2. Reviewing and setting aside the order of the Rustenburg Magistrates Court issued under case number: 3266/2020 on or about 11 June 2020;

3. Reviewing and setting aside the warrant of execution (attachment and removal) issued from the Rustenburg Magistrates Court pursuant to the filing of the aforesaid matter in that Court;

4. Ordering the first to fifth respondents to restore immediately, at their cost, to the applicant at his premises at No. 8 Flamboyant Street, Safari Gardens, Extension 1, Rustenburg, 0299 every item they caused to be removed therefrom, and to have every item replaced on the premises to the applicant’s satisfaction;

5. Reviewing and setting aside the order of the Swartruggens Magistrates Court issued under case number: 16/2020 on or about 11 June 2020;

6. Reviewing and setting aside the warrant of execution (attachment and removal) issued from the Swartruggens Magistrates Court pursuant to the filing of the aforesaid matter in that Court;

7. Ordering the first to fifth respondents, at their costs, to restore immediately to the applicant at his premises at Farm Brakkloof Skool, LP23, Lindleyspoort Road, Swartruggens District, Rustenburg every item they caused to be removed therefrom, and to have every item replaced on the premises to the applicant’s satisfaction;

8. Ordering the first to fifth respondents to restore immediately, at their cost, to Mr Cornelius Coenrad van der Walt at his premises at Farm Krokodildrift, Swartruggens District, Rustenburg the Venter trailer and Land Cruiser they caused to be removed therefrom;

9. The first to fifth and eighth and ninth respondents are ordered to pay the costs occasioned by this application on the scale as between attorney and client, jointly and severally, the one paying the other to be absolved, de bonis propriis

10. Should the first to fifth respondents issue further proceedings against the applicant regarding the same subject matter as the aforesaid applications in the Magistrates Courts, they are ordered to do so in the normal course with proper notice to the applicant, citing him as a party to those proceedings;

11. Further and/or alternative relief.”

[2] The applicant is a businessman and resides at No. 8 Flamboyant Street, Safari Gardens, Extension 1, Rustenburg. The first respondent is a liquidator and attorney. The second and third respondents are insolvency practitioners. The first three respondents are curators of the applicant’s insolvent estate. Both the fourth and fifth respondents are insolvency practitioners and they are temporary liquidators of Kiaratrax (Pty) Ltd (in liquidation).

Relevant background.

[3] A final order of sequestration of the applicant’s estate was issued on 16 November 2017. On the other hand, Kiaratrax was finally liquidated on 29 November 2019. The director of Kiaratrax is applicant’s wife with whom he is married in community of property. More about the latter business entity (Kiaratrax) later in this judgment.

[4] It is now common cause that the first five respondents lodged applications in Rustenburg and Swartruggens Magistrates Courts on 11 June 2020 praying for a search, attachment and removal of assets warrant in terms of section 19 read with section 69 (1) of the Insolvency Act1. The target of this search were assets belonging to the insolvent estate of the applicant and Kiaratrax.

[5] The same Magistrate2 in each of the two magisterial districts authorized the envisaged search warrant (attachment and removal of assets) without applicant having been served with a notice of the application. In fact, the five applicants had not even cited any respondents (including the current applicant). The applications were therefore brought on ex-parte basis.

[6] The version of the applicant follows. The Sheriff, together with Mr Jan Brink of Pinkerton Consulting CC (Pinkerton) and another person unknown to the applicant proceeded to attach all the contents of applicant’s home (not just the items listed in paragraph 2.5-2.9 of the warrant, including television sets and sewing

1 Act 24 of 1936.

2 The magistrate who authorised these warrants is cited as “Worshipful Magistrate” in both districts. The Registrar of this Court is directed to investigate if there is/are a magistrate(s) with that unfamiliar name in each of the relevant Magisterial districts.

machines). The applicant was later furnished with the inventory of the said assets. Mr Brink (who is not a Sheriff) immediately took with him three computers and several boxes of documents.

[7] On the same day, 12 June 2020, the applicant was informed by his father-in-law (Van der Walt) that the respondents had also attached property at his farm in Swartruggens, known as Krokodildrift, without making use of the Sheriff. They unlawfully served the warrant on Van der Walt. Then they attached a Venter trailer belonging to applicant’s wife and a Land Cruiser which had been bought by the applicant but it had not yet been registered in his name.

[8] Thereafter, but still on the same day, some people who claimed to be from Pinkerton, also arrived at the farm Brakkloof Skool in Swartruggens. Applicant’s father used to live on this farm, however, currently the applicant stores some of the assets belonging to him and his wife there. Again at this farm, the Sheriff was not there. They proceeded to attach the entire contents of the house. They did not serve the responsible person (Aphiri) who was there with neither the application, the court order nor the warrant. Aphiri later phoned the applicant informing him what had happened.

[9] On 19 June 2020, the applicant was informed by his father-in-law that the respondents, through a certain Rudi Muller, of Ubique Auctioneers (acting for the first to fifth respondents) and an unknown person had removed the aforesaid Venter trailer and Land Cruiser on that day.

[10] Both applications in the Magistrates Courts are fatally defective in that the applicant was never cited as a respondent, despite draconian relief being sought (and garnted) against him, and no opportunity was ever given to him to exercise his right to be heard. The respondents and their attorney approached court, deliberately violating the audi alteram partem rule and if court orders were granted, were evidently assisted therein by the Magistrate in question, who also acted unlawfully. Needless to say, not being a party to those applications, the applicant cannot even lodge a rescission application, but must proceed by way of review.

[11] The two applications in the Magistrates Court were brought on the basis of extreme urgency without any proper case having been made out for urgency. In fact, there were no prayers that the application be dealt with on the basis of urgency. The Magistrate was wrong to authorize the first to fifth respondents to attach and remove property because that is the function of the Sheriff.

[12] The applicant denies having committed fraud as alleged by the respondents and that there was ever any danger of the applicant concealing or removing any property as the respondents claim.

[13] The applicant’s insolvent estate was thoroughly investigated by the curators which were appointed, who had already taken all the assets. The last of which were removed during the first quarter of 2019 in accordance with section 19 and 69 (1) of the Insolvency Act. The respondents’ ostensible reliance on those sections of the Insolvency Act is misplaced.

[14] In relation to urgency, the applicant points out that he and his wife have three small children and a one week old baby. As appears from the inventory, virtually all the contents of their home in Rustenburg have been removed unjustifiably, in the middle of

winter, which is intolerable and has left the family traumatized.

[15] The respondents and their attorney are now poised to remove all the contents of the house on the farm Brakkloof Skool in Swartruggens, in the absence of the Sheriff for the district, also in conflict with the very warrant they have obtained. This is so because of the prejudice the applicant and his family are currently suffering, and will suffer imminently. Neither the applicant nor his family will be able to obtain substantial relief in due course if an order is not granted now. The gravity of the abuse committed by the respondents, the orders in question and the warrants issued pursuant thereto should be set aside immediately.

[16] I now set out the respondent’s defence. The applicant does not set out the facts upon which the assets were conveniently stored or when these facts were pointed out to the trustees and liquidators of the respective insolvent estates. He also fails to take the Court into his confidence by disclosing that the assets so attached at his home or otherwise were not included in his statement of affairs which he confirmed under oath as he was obliged to do.

[17] On the same score, the applicant has not taken the Court into his confidence to try and explain why the assets which were clearly demonstrated by the trustees and liquidators in the founding papers underpinning the warrant for search and seizure and

clearly belongs to his estate, were concealed and stored. To put it plainly, the assets were not disclosed to his trustees for fear of them being taken and sold, as the trustees and liquidators are obliged to do in the fulfilment of their duties. As a result of the completion of CM100, the trustees were able to assure that the insolvent was honest in his disclosure to them, this was however far from the case. The applicant has not, since 2017, disclosed the whereabouts of the assets concerned and it took the trustees considerable time, cost and effort in order to determine their location.

[18] The applicant does not deny that the assets which were taken were assets belonging to him, which then invariably rests in his trustees. These assets ought to have been under the control of the liquidators and trustees pursuant to the provisions of Section 20 and 23 of the Insolvency Act. The applicant fails to disclose to the Court that the respondent’s attorney, on repeated occasions, requested the applicant’s wife to present a list of assets which she sought to have released under Section 21 of the Insolvency Act. Copies of these letters are annexures AA6 to AA9.2 to the answering affidavit. Neither the applicant nor his wife ever responded to the letters sent.

[19] The warrant was duly served by the liquidators’ and trustees’ representatives, in conjunction with officers of the South African Police Services upon Mr. Van Der Walt. The deponent to the answering affidavit unfortunately does not have their particulars, as they were merely directed to accompany the liquidators and their representatives in fulfilling their obligation under the warrant of

search and seizure by the relevant station commander. There is nothing unlawful in serving a warrant only. One only obtains a warrant and not an order which is akin to an Anton Piller order, as the applicant seems to suggest. The Land Cruiser is an asset in the applicant’s estate, concealed from the trustees.

[20] On the CM100 the applicant only listed immovable property, no movable assets were listed. The trustees have discovered that no less than approximately 96 vehicles, plant and trailers were transferred to third parties shortly prior to and after the applicant’s sequestration. This information appears in Mr Brink’s affidavit in the application which served before the Magistrate for search and seizure warrant. The investigation by Mr Brink revealed that the applicant allegedly sold on 1 November 2014, 42 trucks and trailers to Kiaratrax (Pty) Ltd (in liquidation) duly represented by his wife Mrs Cornelia Botes. This sale agreement was allegedly signed on 1 November 2014.

[21] Upon investigation of the authenticity of the said sale agreement, it was established by Mr Brink that the sale agreement dated 1 November 2014 was false and further that same was generated on 2 September 2017 and backdated, while the sequestration application against the insolvent was already issued and further that the provisional sequestration order had already been granted. These transactions are clearly set out in the affidavit of Mr Brink. Neither the insolvent nor his wife have proven that she had paid for the assets purportedly sold and the transaction will be impeached by the trustees under the action pauliana in due course.

[22] The applicants admits that certain items are now being stored which apparently belong to the applicant and his wife at the Brakkloof School in Swartruggens. Yet again, these facts were not disclosed to the trustees and liquidators of the respective insolvent estates and further bolster the respondent’s view that these assets were unlawfully spirited away and/or dissipated with the intention to defraud the general body of creditors.

[23] It is denied that the warrant was not displayed to Mr Aphiri. The warrant was executed at each respective premises in the same manner, i.e., by a duly authorized representative of the liquidators, officers of the South African Police Services and a warrant being displayed, which accords in form and manner with Section 69 (3) of the Insolvency Act. In any event, the South African Police Services will not accompany liquidators or their representatives without a duly authorized warrant.

[24] It is admitted that certain discussions took place between Mr Vercueil and respondents’ attorney (Mr Payne), however, it is denied that the applications were defective, fatally flawed or amounting to a serious miscarriage of justice, as alleged by the applicant. In fact, during the telephonic conversation which took place, Mr Payne specifically referred Mr Vercueil to paragraph 24 to 36 of the court order of the Honourable Judge MM Leeuw, dated 29 November 2019, in the liquidation application of the Kiaratrax, referring to the conduct of the applicant and his wife and how dishonest the Court viewed their dealings between each other, they made no differentiation between their respective assets or the juristic entities which they represented.

[25] The relief that was sought under the warrants for search and seizure is most certainly not draconian, it has remained law since 1936 and has been attacked on several occasions. The relevant section is there for the protection of the general body of creditors in circumstances where insolvents hide and spirit away their assets to the detriment of their creditors. The applicant’s conduct in this application is a prime example of such dissipation and his bona fides in approaching this court on such an extremely, purportedly urgent basis, cast severe doubt thereon.

[26] During the afternoon of the 23 June 2020, the respondents received certain affidavits purporting to prove ownership of the assets. One of the affidavits is that of Mrs Botes. She (Mrs Botes), a housewife, curiously owns several trucks and trailers, albeit registered in her name, she has not proven that she paid for the assets, where the funds for these acquisitions came from or indicated that they came into her possession as a consequence of any agreement.

[27] Section 69 (3) authorizes the South African Police Services, including the trustees, liquidators and/or their duly authorized representatives, to take into possession and remove assets. The Sheriff ordinarily plays no role, unless he/she is requested to be present.

[28] It is admitted that Rudi Muller of Ubique Auctioneers, being one of the duly authorized representatives of the liquidators and trustees, removed the Venter trailer and the Land Cruiser. According to the applicant’s own version, the Land Cruiser belongs to his insolvent

estate and the Venter trailer, according to him, belong to his wife who is still subject to the provisions of Section 21 of the Insolvency Act and has to date never sought release of any of her assets.

[29] To give notice to the insolvent in the application for the issuing of the warrants under Section 69 (3) would have stifled the very same attempts by the liquidators and trustees to locate and seize the assets. The applicant’s conduct has made it clear that he cannot be trusted and if he received notice, he would have merely moved the assets already concealed to other locations that would merely frustrate the liquidators and trustees in the fulfilment of their duties. Notice would have obviated the very nature of the proceedings and it is submitted no other alternative was possible.

[30] In practice, one attends the Magistrate’s Court and requests the senior magistrate to point out which magistrate will be tasked with the hearing of applications of this nature. There is no necessity for urgency other than making out a case that there are reasonable grounds for suspecting that any property, book or document belonging to an insolvent estate is concealed upon any person or at any place whereupon or any vehicle or vessel or a receptacle of whatsoever nature. Logically, it must be withheld from the trustees concerned, which is the matter in casu. Accordingly, the necessity to make out a case for urgency is denied.

[31] The applicant complains about certain computers which have been taken. The only reason for this complaint is that, after considering the contents of the computers, it has come to the liquidators’ and trustees’ attention that certain other assets have been bought and

paid for by the insolvent and merely registered in third parties’ names. An excel spreadsheet which portrays to be a budget of the applicant and his wife indicates that certain assets, not registered in the name of the applicant are being paid for in installments by the applicant. One example of that is an entity “VW – Bussie paaiement / Anye – R17 000.00” This clearly illustrates that instalments in the amount of R17 000.00 are paid monthly by the applicant towards this vehicle. This particular vehicle was attached and further that an affidavit was filed by Mr Johan Taljaard, being the husband of the lady referred to as “Anye” above, indicating that an entity known as Bull Trax (Pty) Ltd is the owner of the vehicle. Why the insolvent and his wife pay for the vehicle, is unknown.

[32] It is denied that the assets in the house have been removed. It would be inhuman to do so. The trustees in the same fashion as the Sheriff would remove any but items necessary for his subsistence of the household concerned. To this end, the respondents were informed that the children partake in electronic schooling and they therefore did not attach the computers upon which their schooling would take place, even though they were entitled to do so. Only assets which did not relate to the applicant’s upkeep were removed.

Points in limine

[33] The respondents have raised four points in limine: (a) lack of urgency, (b) wrong procedure followed, (c) applicant has no locus standi to bring this application on his behalf and (d) applicant has no locus standi to bring this application on behalf of Kiaratrax.

Urgency

[34] The search and seizure warrants were issued by the Magistrate Rustenburg and Swartruggens on 11 June 2020. The search and seizure of applicant’s properties occurred on 11 and 12 June 2020. Applicant first consulted his attorney, Mr Vercueil on 17 June 2020. His attorney then phoned the respondents’ attorney, Mr Payne. A letter was addressed on the same date by the former. In this letter, Mr Vercueil demanded a written abandonment of the search and seizure warrants by the respondents on or before 18 June 2020. The urgent application was issued by the Registrar on 24 June and set down for 25 June 2020.

[35] Notwithstanding the respondent’s views that the matter lacks urgency, I am satisfied that the applicant made a move swiftly after becoming aware of these searches. He promptly consulted his attorney. I am therefore satisfied that the matter is sufficiently urgent, taking into account that the applicant averred that their personal belongings, including clothing had been seized, living them without clothes in the cold as it was winter time.

Procedure adopted

[36] The urgent application before Court is actually a review application in terms of Rule 53. This rule prescribes a procedure which the applicant must follow, inter alia, giving notice to the Magistrate who authorized the search and seizure warrants and calling upon him/her to submit a record of such proceedings and reasons for the decision within a specified time limit. The importance of adhering to Rule 53 procedure and the advantage thereof in

review proceedings has received judicial scrutiny and the following principles were distilled:

36. 1 In the Democratic Alliance and Others v Acting National Director of Public Prosecutions and Others3, Navsa AJ held:

“Without the record a court cannot perform its constitutionally entrenched review function, with the result that a litigant’s right in terms of s 34 of the Constitution to have a justiciable dispute decided in a fair public hearing before a court with all the issues being ventilated would be infringed.”

36. 2 In Helen Suzman Foundation v Judicial Service Commission4, the Deputy President of the SCA, Maya DP, (as she then was) held:

“[13] The primary purpose of the rule is to facilitate and regulate applications for review by granting the aggrieved party seeking to review a decision of an inferior court, administrative functionary or state organ, access to the record of the proceedings in which the decision was made, to place the relevant evidential material before court. It is established in our law that the rule, which is intended to operate to the benefit of the applicant, is an important tool in determining objectively what considerations were

3 2012 (3) SA 486 (SCA) at [37].

4 2017 (1) SA 367 (SCA) at para 13.

probably operative in the mind of the decision-maker when he or she made the decision sought to be reviewed. The applicant must be given access to the available information sufficient for it to make its case and to place the parties on equal footing in the assessment of the lawfulness and rationality of such decision. By facilitating access to the record of the proceedings under review, the rule enables the courts to perform their inherent review function to scrutinize the exercise of public power for compliance with constitutional prescripts. This, in turn, gives effect to a litigant’s right in terms of s 34 of the Constitution – to have a justiciable dispute decided in a fair public hearing before a court with all issues being properly ventilated. Needles to say, it is unnecessary to furnish the whole record irrespective of whether or not it is relevant to the review. It is those portions of a record relevant to the decision in issue that should be made available. A key enquiry in determining whether the recording should be furnished is therefore its relevance to the decision sought to be reviewed.”

36. 3 In Turnbull-Jackson v Hibiscus Coast Municipality5, the following was stated:

“Undeniably, a rule 53 record is an invaluable tool in the review process. It may help: shed light on what happened and why; give the lie to unfounded ex post facto (after the fact) justification of the

5 2014 (6) SA 592 (CC) at para 37.

decision under review; in the substantiation of as yet not fully substantiated grounds of review, in giving support to the decision- maker’s stance; and in the performance of the reviewing court’s function.”

[37] The notice of motion has been couched in the form of a review application. However no provision has been made by the applicant for each magistrate to file record of the proceedings, or give reasons of the basis upon which the search and seizure warrants were granted.

[38] It is my view that the timeframes and provisions of a complete record is not just a procedural process but a mandatory substantial requirement. This court therefore finds that this review application does not comply with the requirements of Rule 53 (4) and (5). On this point in limine alone, the application falls to be dismissed.

Order

[39] It is on the basis of the said reasons that a Court Order was issued on 7 July 2020 in the following terms:

“1. The application to review and set aside:

1.1 the order and the warrant of execution (attachment and removal) of the Magistrate Rustenburg issued on 11 June 2020;

and

1.2 the order and the warrant of execution (attachment and removal) issued on 11 June 2020 by the Magistrate Swartruggens,

is dismissed with costs.

2. Reasons for this decision are reserved.”

SAMKELO GURA JUDGE OF THE HIGH COURT

ATTORNEYS

For the Applicant : VERCUEIL ATTORNEYS C/o Maree & Maree Attorneys 11 Agate Avenue Riviera Park MAHIKENG 2745 Ref: AA8606 Tel: 018 381 7495

For the Respondent : PAYNE ATTORNEYS INC C/o Van Rooyen Tlhapi Wessels Inc. 9 Proctor Avenue MAHIKENG 2745 Tel: 018 381 0804/7