Cassel and Benedick NNO and Another v Rheeder and Cohen NNO and Another (599/88) [1991] ZASCA 25; 1991 (2) SA 846 (AD); [1991] 4 All SA 517 (AD) (26 March 1991)

Cassel and Benedick NNO and Another v Rheeder and Cohen NNO and Another (599/88) [1991] ZASCA 25; 1991 (2) SA 846 (AD); [1991] 4 All SA 517 (AD) (26 March 1991)

The Supreme Court of Appeal found that the evidence relied upon by the trial court to establish misappropriation of company funds by Cassel was unreliable and insufficient. The key witnesses, Pascoe and Treisman, were found to be untrustworthy, self-confessed liars and thieves, with motives to protect themselves and deflect blame. Mrs Pretorius's evidence was inconsistent and confused, failing to establish a secret scheme involving Cassel. The cautionary rule applicable to evidence against a deceased estate was not properly applied by the trial court, and corroboration was lacking. The court held that none of the three categories of alleged misappropriation—sale of scrap wire, cash sales...

Citation
[1991] ZASCA 25
Parties
Appellant: Isobelle Anne Cassel NNO; Appellant: Joan Benedick NNO; Respondent: David Hermanus Rheeder NNO; Respondent: Leslie Cohen NNO; Respondent: Associated Brush Manufacturers (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
26 March 1991
Case Number
599/88
Procedural Posture
Civil Appeal / Appeal From the Witwatersrand Local Division; Judgment of Levy AJ
Outcome
Appeal allowed with costs; cross-appeal dismissed with costs. The order of the trial court is set aside and replaced with absolution from the instance on claim E, with costs including qualifying fees for Mrs Claire Herbst.
Judges
Corbett, E.M Grosskopf, Smalberger, Steyn, Preiss
Legal Topics
Companies Act Section 424, Reckless Trading, Misappropriation of Funds, Evidence Against Deceased Estate, Costs Award
Commercial and Corporate Civil Procedure Companies Act Section 424 Reckless Trading Misappropriation of Funds Evidence Against Deceased Estate Costs Award

Case Brief

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Parties

Isobelle Anne Cassel NNO

Appellant

Joan Benedick NNO

Appellant

David Hermanus Rheeder NNO

Respondent

Leslie Cohen NNO

Respondent

Associated Brush Manufacturers (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From the Witwatersrand Local Division; Judgment of Levy AJ

Legal Issues

  1. 1 Whether Cassel, through his estate, was personally responsible for the company's debts under s 424(1) of the Companies Act due to alleged fraudulent or reckless trading.
  2. 2 Whether the evidence established misappropriation of company funds by Cassel in three categories: sale of scrap wire, cash sales store, and reject brushes.
  3. 3 Whether the cautionary rule regarding evidence against a deceased estate was properly applied.

Ratio Decidendi

The Supreme Court of Appeal found that the evidence relied upon by the trial court to establish misappropriation of company funds by Cassel was unreliable and insufficient. The key witnesses, Pascoe and Treisman, were found to be untrustworthy, self-confessed liars and thieves, with motives to protect themselves and deflect blame. Mrs Pretorius's evidence was inconsistent and confused, failing to establish a secret scheme involving Cassel. The cautionary rule applicable to evidence against a deceased estate was not properly applied by the trial court, and corroboration was lacking. The court held that none of the three categories of alleged misappropriation—sale of scrap wire, cash sales...

Court Disposition

Appeal allowed with costs; cross-appeal dismissed with costs. The order of the trial court is set aside and replaced with absolution from the instance on claim E, with costs including qualifying fees for Mrs Claire Herbst.

Orders

  • The appeal is allowed with costs, and the cross-appeal is dismissed with costs, payable jointly and severally by the respondents.
  • Paragraphs 4 and 5 of the trial court's order are set aside; paragraph 4 is replaced with: 'On claim E, absolution from the instance with costs; such costs to include the qualifying fees of Mrs Claire Herbst. The costs are to be paid by the plaintiffs jointly and severally, the one paying the other to be absolved.'