Urquhart and Others v Master of the High Court and Others (5733/2018) [2019] ZAFSHC 182 (30 September 2019)

Urquhart and Others v Master of the High Court and Others (5733/2018) [2019] ZAFSHC 182 (30 September 2019)

The court found that the Master failed to properly apply his mind when issuing the summonses under section 152(2) of the Insolvency Act. The record before the court showed that the Master acted on limited and insufficient information, did not inquire into the nature of the litigation or the documents already available to the trustees, and did not justify the need for the summonses. The process was abused by FirstRand Bank Limited to obtain an improper forensic advantage in the pending Wonderhoek trial, including conducting a dress rehearsal for cross-examination and harassing individuals who had no relevant involvement in the disputed transactions. The Master’s decision was unlawful and...

Citation
[2019] ZAFSHC 182
Parties
Applicant: Derek Macdonald Urquhart; Applicant: Philip Kotze; Applicant: Brian John Dowden; Applicant: Wonderhoek Farms (Pty) Ltd; Respondent: The Master of the High Court; Respondent: Donovan Majiedt; Respondent: Karen Fontein; Respondent: FirstRand Bank Limited
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
30 September 2019
Case Number
5733/2018
Procedural Posture
Review Application / Judgment After Hearing of Rule 53 Review
Outcome
Application for review granted; the Master’s decision to issue summonses set aside; costs awarded against the fourth respondent.
Judges
Opperman, Moeng
Legal Topics
Judicial Review of Administrative Action, Abuse of Insolvency Process, Section 152 Inquiry, Forensic Advantage in Litigation, Costs Orders, Rule 53 Review
Administrative Law Banking and Finance Civil Procedure Judicial Review of Administrative Action Abuse of Insolvency Process Section 152 Inquiry Forensic Advantage in Litigation Costs Orders +1 more

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Parties

Derek Macdonald Urquhart

Applicant

Philip Kotze

Applicant

Brian John Dowden

Applicant

Wonderhoek Farms (Pty) Ltd

Applicant

The Master of the High Court

Respondent

Donovan Majiedt

Respondent

Karen Fontein

Respondent

FirstRand Bank Limited

Respondent

Procedural Posture

Review Application / Judgment After Hearing of Rule 53 Review

Legal Issues

  1. 1 Did the Master of the High Court properly apply his mind when issuing summonses under section 152(2) of the Insolvency Act against the first, second, and third applicants.
  2. 2 Was the section 152 process abused by the fourth respondent to obtain an improper forensic advantage in pending litigation.
  3. 3 Should the decision to issue the summonses be set aside as unlawful and irregular.

Ratio Decidendi

The court found that the Master failed to properly apply his mind when issuing the summonses under section 152(2) of the Insolvency Act. The record before the court showed that the Master acted on limited and insufficient information, did not inquire into the nature of the litigation or the documents already available to the trustees, and did not justify the need for the summonses. The process was abused by FirstRand Bank Limited to obtain an improper forensic advantage in the pending Wonderhoek trial, including conducting a dress rehearsal for cross-examination and harassing individuals who had no relevant involvement in the disputed transactions. The Master’s decision was unlawful and...

Court Disposition

Application for review granted; the Master’s decision to issue summonses set aside; costs awarded against the fourth respondent.

Orders

  • The decision of the first respondent to issue summonses in terms of section 152(2) of the Insolvency Act 24 of 1936 in respect of the first, second and third applicants is set aside.
  • The fourth respondent is ordered to pay the costs of this application and the application dated 4 December 2018, including costs occasioned by the employment of two counsel.