Burden N.O v Matsepes (Bloemfontein) Inc and Others (3123/2022) [2023] ZAFSHC 246 (20 June 2023)

Burden N.O v Matsepes (Bloemfontein) Inc and Others (3123/2022) [2023] ZAFSHC 246 (20 June 2023)

The court found that the first respondent, a personal liability company of attorneys, was mandated to invest funds for the insolvent estate and could only transact on the account with written instructions. The funds were stolen by an employee while under the control of the first respondent, and no written instruction was given for the transactions. The mandate imposed strict liability, and fault or negligence was immaterial. The directors, as present and past office bearers, are jointly and severally liable with the company for the loss. The third party procedure was dismissed as the claim was contractual, not delictual. The applicant proved breach of mandate and entitlement to the...

Citation
[2023] ZAFSHC 246
Parties
Applicant: Ronelle Burden N.O.; Respondent: Matsepes (Bloemfontein) Inc; Respondent: Tsiu Vincent Matsepe; Respondent: Roux Barry Cloete; Respondent: Master of the High Court, Pretoria
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
20 June 2023
Case Number
3123/2022
Procedural Posture
Civil Application / Judgment After Opposed Application and Third Party Procedure
Outcome
Application granted. The first, second, and third respondents are declared jointly and severally liable for payment of the claimed amount, interest, and costs. Third party procedure dismissed.
Judges
Gusha
Legal Topics
Personal Liability Company, Breach of Mandate, Fiduciary Duty, Joint and Several Liability, Quantification of Loss
Commercial and Corporate Civil Procedure Personal Liability Company Breach of Mandate Fiduciary Duty Joint and Several Liability Quantification of Loss

Case Brief

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Parties

Ronelle Burden N.O.

Applicant

Matsepes (Bloemfontein) Inc

Respondent

Tsiu Vincent Matsepe

Respondent

Roux Barry Cloete

Respondent

Master of the High Court, Pretoria

Respondent

Procedural Posture

Civil Application / Judgment After Opposed Application and Third Party Procedure

Legal Issues

  1. 1 Whether the written mandate between the insolvent estate and the first respondent was breached.
  2. 2 Whether the first, second, and third respondents are jointly and severally liable for the loss suffered by the insolvent estate.
  3. 3 Whether the applicant is entitled to the claimed amount and interest.

Ratio Decidendi

The court found that the first respondent, a personal liability company of attorneys, was mandated to invest funds for the insolvent estate and could only transact on the account with written instructions. The funds were stolen by an employee while under the control of the first respondent, and no written instruction was given for the transactions. The mandate imposed strict liability, and fault or negligence was immaterial. The directors, as present and past office bearers, are jointly and severally liable with the company for the loss. The third party procedure was dismissed as the claim was contractual, not delictual. The applicant proved breach of mandate and entitlement to the...

Court Disposition

Application granted. The first, second, and third respondents are declared jointly and severally liable for payment of the claimed amount, interest, and costs. Third party procedure dismissed.

Orders

  • The third party procedure is dismissed with costs, including costs of preparation and costs of one counsel.
  • The first respondent is declared liable to the applicant for payment of R2,355,111.49.