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IN THE HIGH COURT OF SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

Date: 2008-12-04

Case Number: 8275/2007

In the matter between:

LORIAM NGCOBO Plaintiff

and

P G TORRE First Defendant

G B NTSHWENI Second Defendant

T J H POTGIETER Third Defendant

JUDGMENT

SOUTHWOOD J

[1] On 13 July 2000 the plaintiff and the first, second and third defendants were appointed by the Master of the High Court as the joint liquidators in the insolvent estate of D W Parker Chicken Farms (Pty) Ltd (in liquidation) (‘the company’). At the request of the liquidating and principal creditor, the Land and Agricultural Development Bank of South Africa (‘the Land Bank’) the liquidators continued to conduct the business of the company. For this purpose the liquidators agreed that the plaintiff would be responsible for the day to day administration of the company. The plaintiff appointed First City Administrators CC (‘First City’) to do this work as its members, Harry Kaplan and Hennie Eloff, were experienced in the field. The plaintiff and the defendants submitted to the Master a first liquidation and distribution account which the Master confirmed and in mid 2002 the plaintiff and the defendants submitted to the Master a second liquidation and distribution account. On 2 July 2002 the Master confirmed the second liquidation and distribution account and on 12 July 2002 it was advertised in the Government Gazette. In terms of the second liquidation and distribution account confirmed by the Master the liquidator (i.e. the plaintiff and the three defendants) was entitled to a fee of R5 721 976,32. When the Master confirmed the second liquidation and distribution account the plaintiff was still a joint liquidator. On 5 August 2002 the plaintiff submitted to the Master his resignation as a joint liquidator. On 28 August 2002 the Master appointed the three remaining liquidators (i.e. the three defendants) as the joint liquidators. Early in September 2002 the plaintiff attempted to withdraw his resignation as a liquidator but the Master refused to permit him to do so. Thereafter, the defendants did not immediately pay out the liquidator’s fee of R5 721 976,32. They did so only on 11 April 2006. As liquidators the defendants paid themselves the whole fee: each defendant receiving one third of the fee: i.e. R1 907 325,44. A few months later, in July and August 2006 the plaintiff asked for, and then demanded, payment of his share of the fee which the defendants refused to pay. In a letter to the Master dated 16 October 2006 the defendants’ attorney, Newtons Attorneys, alleged that the plaintiff was not entitled to any part of the fee.

[2] On 21 February 2007 the plaintiff instituted this action against the defendants claiming from each defendant payment of the sum of R706 658,42 alternatively R543 587,78 on the grounds of two alterative causes of action, both containing allegations of unjust enrichment. The foundation of the first cause of action alleged by the plaintiff is an agreement entered into on 13 June 2001 between the plaintiff represented by Harry Kaplan and the defendants represented by the first defendant. The plaintiff alleges that the agreement was partly oral and partly in writing and was entered into at Johannesburg (the plaintiff seeks an amendment of the particulars of claim to allege that the agreement was concluded by conduct) and that in terms of the agreement –

(1) the plaintiff would administer the company’s insolvent estate;

(2) the liquidator’s fees would be apportioned as follows:

(i) 10 % of the total fee to the plaintiff as his administration fee;

(ii) the balance of the fee to the plaintiff and the defendants in equal shares;

(3) it was an implied alternatively tacit term that the fees would become payable to each joint liquidator once the company’s insolvent estate had received funds with which to pay the shares.

The foundation of the second cause of action alleged by the plaintiff is the legal rule that in the absence of an agreement with regard to the apportionment of the fees the joint liquidators share the fee equally: i.e. in the present case each would receive ¹/₄ of the total fee. The plaintiff alleges that the other liquidators (i.e. the three defendants) received his share of the fees and were enriched thereby at his expense. It is common cause that the defendants have not paid any part of the amounts claimed to the plaintiff. It is also common cause that the plaintiff is not proceeding against the second defendant as the second defendant has been sequestrated. This does not affect the quantum of the plaintiff’s claims against the first and third defendants.

[3] The defendants raised two special pleas and a plea on the merits. The first special plea is that the plaintiff is not entitled to any fees because of his failure to comply with an order/direction/instruction made/given by the Master in terms of section 378(2) of the Companies Act 61 of 1973. The defendants allege that the Master accepted the plaintiff’s resignation as a joint liquidator, tendered in August 2002, in terms of section 378(2) of Act 61 of 1973 on condition that the plaintiff forfeited all fees already confirmed to the liquidators as set out in the second liquidation and distribution account and that the plaintiff lodge an account in which he set out all the work he had done in the estate which the Master would consider. The defendants allege that the plaintiff failed to lodge such an account with the Master and is consequently not entitled to any fees. The second special plea is a plea of prescription. The defendants allege that the fee became due and payable to the plaintiff –

(1) on 2 July 2002 (the date of confirmation of the account); or

(2) on 12 July 2002 (the date of advertisement of the account); or

(3) on 5 August 2002 (the date of the plaintiff’s resignation as liquidator)

all of which are more than three years before the 21^st of February 2007 (the date on which the plaintiff issued summons against the defendants) and consequently that the plaintiff’s claim has prescribed in terms of section 10 read with section 11(d) of the Prescription Act 68 of 1969. In their plea on the merits the defendants rely on denials of the plaintiff’s allegations in his particulars of claim but at the pre-trial conference the defendants placed on record their contentions that –

(1) there is no general action for enrichment such as that relied upon by the plaintiff;

(2) the plaintiff was not impoverished by anything which the defendants did: he still has a claim for his fees; and

(3) if the defendants were enriched, such enrichment was not at the expense of the plaintiff but at the expense of the insolvent estate.

[4] Apart from the admissions in the pleadings, the parties placed the following evidence before the court –

(1) the plaintiff’s bundle of documents marked “A” (the parties agreed that the documents are what they purport to be and that the letters were sent and received);

(2) the defendants’ bundle of documents marked “B” (the parties agreed that the documents are what they purport to be and that the letters were sent and received);

(3) the oral evidence of Harry Kaplan on behalf of the plaintiff and the first defendant on behalf of the defendants; and

(4) a formal admission by the defendants during argument that on 11 April 2006 they had received the full amount of the fees payable in terms of the second liquidation and distribution account.

[5] The plaintiff called Harry Kaplan to prove the agreement which the plaintiff alleges was entered into on 13 June 2001. The first defendant was called to prove that the Master made/gave the order/direction/instruction in terms of section 378(2) of the Companies Act relied upon in the first special plea. The plaintiff bears the onus of proving the agreement and the defendants bear the onus of proving the action of the Master in terms of section 378(2) of the Companies Act (Pre-Trial Minute paragraph 9). Kaplan’s evidence was contradicted by the first defendant but the first defendant’s evidence about the meeting on 18 September 2002 when the Master allegedly gave/made the order/direction/instruction in terms of section 378(2) of the Companies Act, was uncontradicted. It is trite that a party can only discharge the onus by means of credible and reliable evidence. It is also trite that the evidence of a witness does not have to be accepted just because it is not contradicted. In Siffman v Kriel 1909 TS 538 at 543 the court said –

‘It does not follow, because evidence is uncontradicted, that therefore it is true. Otherwise the Court, in cases where the defendant is in default, would be bound to accept any evidence the plaintiff might tender’

See Shenker Brothers v Bester 1952 (3) SA 664 (A) at 670E-G; Katz v Blumfield & Keith 1914 TPD 379 at 381; Nelson v Marich 1952 (3) SA 141 (A) at 149A-D. As pointed out in Shenker Brothers v Bester at 670G, the approach applies not only to evidence which is improbable but evidence which is ‘too vague and contradictory to serve as proof of the question in issue.’

[6] Both witnesses testified about events which took place six to seven years ago. Neither made notes or contemporaneously recorded these matters in any other way. In the ordinary course the ability of human beings to remember the detail of events which took place so long ago is limited and cannot be regarded as reliable unless supported or confirmed by other evidence, particularly contemporaneous documents. Such documents are far more likely to accurately record the events than the faulty memories of witnesses. They are obviously a useful means of testing the reliability of the evidence.

[7] Most of the evidence is not contentious as it accords with the documents in Exhibits A and B. However the evidence regarding the agreement alleged and the Master’s decision on 18 September 2002 is contentious. There is no document which purports to record the agreement or the Master’s decision. Kaplan’s evidence about the agreement was most unsatisfactory. He was patently unsure of the facts. He contradicted the allegations about the agreement in the plaintiff’s particulars of claim. He knew of no oral terms and he was adamant that the agreement was contained in the correspondence which ‘flowed’ between the parties. In this regard he testified that the agreement is contained in the two letters dated 13 June 2001 (A2 and 3: annexures B1 and B2 to the plaintiff’s particulars of claim). It is obvious that these letters do not record an agreement. At best for the plaintiff they reflect an offer from the first defendant. Kaplan did not testify that he accepted this offer. As a result the plaintiff seeks an amendment to the plaintiff’s particulars of claim by inserting in paragraph 7 of the particulars of claim after the word ‘Johannesburg’ –

‘which agreement was concluded and accepted by conduct’.

The plaintiff sought this amendment during argument even though it was clear during Kaplan’s evidence that his evidence could not prove the agreement pleaded. The application for an amendment is clearly an afterthought as a tacit agreement was never part of the plaintiff’s case. Not even Kaplan testified that the agreement was entered into by conduct. A tacit agreement requires an inference to be drawn from the proved facts. The court must be satisfied that the parties intended to contract with each other – see e.g. Frame v Palmer 1950 (3) SA 340 (C) at 345. The relevant facts must be pleaded and proved – see Triomf Kunsmis (Edms) Bpk v AE & CI Bpk 1984 (2) SA 261 (W). Whichever test is applied – see Joel Melamed and Horwitz v Cleveland Estates (Pty) Ltd [1984] ZASCA 4; 1984 (3) SA 155 (A) at 164I: Standard Bank of South Africa Ltd v Ocean Commodities Inc 1983 (1) SA 276 (A) at 292 – the facts do not justify the inference that the parties contracted on the terms alleged or at all. The application to amend will therefore be refused. The plaintiff has not proved the agreement.

[8] The first defendant testified about the meeting held at the Master’s office on 18 September 2002. His evidence was tendered to establish the basis for the first special plea: i.e. that the Master directed that the plaintiff forfeit the fees he was entitled to in terms of the confirmed second liquidation and distribution account. The first defendant did not testify that the Master accepted the plaintiff’s resignation on condition that the plaintiff forfeited his fees in terms of the second liquidation and distribution account which the Master had confirmed. He testified that the Master refused to re-appoint the plaintiff as a liquidator, that the Master refused to appoint anyone from First City Administrators CC and that the Master said that the plaintiff must lodge an account which would have to be taxed before it was paid. According to the first defendant this statement related to the account already approved. This evidence clearly does not support the special plea.

[9] Apart from this evidence the first defendant confirmed that he had made an affidavit confirming the second defendant’s affidavit in the application for delivery of the documents relating to the administration of the insolvent estate launched on 19 September 2002. Nowhere in that affidavit is it stated that the Master accepted the resignation of the plaintiff as a liquidator on condition that the plaintiff forfeit his fees in terms of the confirmed second liquidation and distribution account and that the plaintiff must lodge an account setting out all the work he had done in the estate. Significantly, the second defendant says only that the Master gave certain directions about the fees. He does not record the very important fact that the Master directed that the plaintiff forfeit his fees in terms of the second liquidation and distribution account. This direction would have had a profound effect on the fees received by the remaining liquidators as each would have received an additional R700 000. It is inconceivable that the defendants would not have recorded this if it had been a formal direction by the Master. All that they referred to is certain indications and directions relating to fees. In addition, there are a number of other improbabilities relating to the special plea:

(1) four years later, on 24 July 2006, First City addressed a letter to the first defendant asking for payment of fees due to the plaintiff in terms of the second liquidation and distribution account and asked when the cheque could be uplifted from the first defendant’s office (A254). This clearly indicates that the plaintiff and/or First City (which was represented at the meeting on 18 September 2002) thought the plaintiff was entitled to his share of the fees. Despite an undertaking from the first defendant’s office that he would reply to correspondence (A256) the first defendant (who was present at the meeting on 18 September 2002) did not reply to the letters and pertinently deny that the plaintiff was entitled to any fees because the Master had directed that the plaintiff must forfeit them;

(2) On 29 August 2006 the plaintiff’s attorney, Honey Attorneys, addressed a letter of demand to the defendants’ attorneys, Newtons Attorneys, setting out the history of the matter and the confirmation of the second liquidation and distribution account and claiming payment the plaintiff’s fees amounting to R2 119 975,26 (A257-258). After there was no response, on 14 September 2006, Honey Attorneys addressed a further letter to Newtons Attorneys threatening legal action (A259). On 18 September 2006 Honey Attorneys addressed a letter to the Master, attaching a copy of their letter of demand dated 29 August 2006, and requesting that the Master not confirm any further liquidation and distribution accounts until the plaintiff’s fee dispute had been resolved (A260-261). The Master did not reply to this letter and point out that because of his decision/direction at the meeting on 18 September 2006 the plaintiff was not entitled to any fees. Instead the Master referred Honey Attorneys’ letters to the first defendant (A263). On 16 October 2002 Newtons Attorneys, acting on behalf of the defendants, addressed a letter to the Master in answer to Honey Attorneys’ letter of demand dated 29 August 2006 (A264) and on 17 October 2006 furnished Honey Attorneys with a copy of that answer (B55). In Newtons Attorneys’ letter dated 16 October 2002 the defendants’ version is set out. The defendants deny that the plaintiff is entitled to any liquidator’s fees but, significantly, do not base this denial on the Master’s decision in terms of section 378(2) as alleged in the first special plea. The letter does not set out any reason why the normal fee apportionment should not take place. With regard to the meeting in the Master’s office on 18 September 2002 the letter simply records that –

‘After the resignation of Mr Ngcobo as liquidator in August 2002 your office (the Master) made a ruling in or about the 18^th of September 2002, in terms whereof Mr Ngcobo was ordered/requested to submit an account reflecting inter alia the fees that he claims to be entitled to. He failed to file such account.’

After this letter the Master did not inform the plaintiff’s attorney about the ruling that he forfeited his fees in terms of the second liquidation and distribution account;

(3) On the record there is no reason why the Master should deprive the plaintiff of his fees in terms of the liquidation and distribution account. The effect of the ruling would be that the insolvent estate would pay the confirmed fee of R5 721 976,32 and possibly another large fee to the plaintiff for the work that he had done in administering the insolvent estate. This would clearly be to the detriment of the insolvent estate and/or its creditors;

(4) Such a decision would have been contrary to the views and the opinion which the Master received from the defendants. On 12 August 2002, after the plaintiff tendered his resignation, the third defendant addressed a letter to the Master setting out the liquidator’s views of how the Master should deal with the plaintiff’s resignation under sections 378(2) and 377 of the Companies Act. The letter contains the following significant paragraphs –

‘3. On behalf of the remaining liquidators, who are Mr Torre, Mr Ntshweni and myself (and I am authorised to address this letter to you on behalf of all three of us) we request you to accept the resignation, and to relieve Mr Ngcobo of his office upon appropriate conditions.

4. The appropriate conditions should, in our submission, include at least the following:

4.1 Despite such resignation, Mr Ngcobo will remain liable for any acts committed by the joint liquidators during his period of office.

4.2 He should be entitled to fees in terms of confirmed liquidation and distribution accounts, but not otherwise.

4.3 All books, records and documents in his possession or in the possession of any person who he has allowed to assist him (example people from First City Administrators, Mr Hennie Eloff, Mr Kaplan and others) are immediately to be delivered to the remaining liquidators.’ (B31-32)

It is inconceivable that in the face of the express opinion of the remaining liquidators that the plaintiff should be entitled to his fees in terms of confirmed liquidation and distribution accounts the Master would order that he forfeit the fees;

(5) By 18 September 2002 the Master appears to have already taken a decision to release the plaintiff as a liquidator. On 28 August 2002 the Master issued a certificate of appointment to the remaining three liquidators (i.e. the three defendants) (A141 para 7.15: A146). The purpose of the meeting seems to have been to decide whether or not the Master would appoint a representative of First City in the place of the plaintiff and, if not, whether the Master would permit the plaintiff to withdraw his resignation (A114, 115-116, 117-118, 121-123, 140-141 para 7.11-7.15: B31-33).

(6) The Master allegedly took this highly prejudicial decision in the absence of the plaintiff and without giving him notice thereof. After the meeting the Master did not inform the plaintiff or his representatives of the decision;

(7) Despite bearing the onus, the defendants have not called the Master and produced the Master’s file to prove that he took the decision alleged.

In these circumstances it cannot be found that the Master took the decision or gave the direction alleged in the first special plea and it is dismissed.

[10] The special plea of prescription appears to be raised as if the plaintiff is claiming payment from the insolvent estate. That is clearly wrong. The plaintiff has not sued the defendants in their capacities as liquidators of the insolvent estate. He has sued them in their personal capacities. His case is clearly that the defendants in their personal capacities appropriated the whole liquidator’s fee, including the plaintiff’s share, on or about 11 April 2006. That was when the plaintiff’s cause of action arose and prescription began to run in terms of section 12(1) of the Prescription Act. The plaintiff instituted his action in February 2007, well within the period of prescription of three years. Insofar as it may be relevant, the liquidators claim for remuneration against the insolvent estate did not prescribe. The liquidators must have acknowledged the claim for remuneration from 12 July 2002 until 11 April 2006 when they paid themselves the remuneration (section 14 of the Prescription Act). For prescription to operate there would have to be a formal claim and the liquidators would have to raise prescription in the relevant documents (section 17(2) of the Prescription Act). This did not happen. The plea of prescription is therefore dismissed.

[11] The plaintiff’s case is that the defendants took or misappropriated for themselves the portion of the liquidator’s fee to which he was entitled. The question to be answered is what was the plaintiff entitled to with regard to fees.

[12] Section 384 of the Companies Act deals with a liquidator’s remuneration. In terms of subsection (1) a liquidator is entitled to a reasonable remuneration for his services to be taxed by the Master in accordance with the prescribed tariff of remuneration. In terms of subsection (2) the Master may reduce or increase such remuneration if in his opinion there is good cause for doing so, and may disallow such remuneration either wholly or in part on account of any failure or delay by the liquidator in the discharge of his duties. In terms of subsection (3) no liquidator is entitled to receive from the assets of the company any remuneration for his services except the remuneration to which he is entitled under the Act. Regulation 24 of the Winding-up and Judicial Management Regulations (Appendix III) provides that every liquidator shall be entitled to the remuneration set out in Annexure CM104. Paragraph II of Annexure CM104 provides that the liquidator is entitled to remuneration in accordance with the tariff of remuneration for trustees of insolvent estates (i.e. as provided for in section 63(1) of the Insolvency Act 24 of 1936: according to tariff B in the Second Schedule to Act 24 of 1936). This tariff provides for a percentage to be paid as a fee on the gross proceeds of the assets and money described in the tariff: e.g. 10 % of the gross proceeds of movable property and 3 % of the gross proceeds of immovable property. The liquidator’s fees are therefore inextricably linked to the assets in the estate which are disposed of. Annexure CM101 to the winding-up and judicial management regulations contains general directions pertaining to the form and contents of accounts and paragraph 5 provides that no part of a liquidator’s remuneration shall be drawn until the account in which it appears has been confirmed, except by permission of the Master. See Abbott v Bryant (1910) 20 CTR 943; R v Macleod 1935 EDL 284. If the liquidator is removed from office he is still entitled to remuneration for the work already done by him – see In re Insolvent Estate A Beckett: Ex parte Roberts (1905) 26 NLR 133 at 138; Meskin, Henochsberg on the Companies Act Vol 1 at 812 – subject to the Master’s power to reduce or disallow the fee in terms of section 384(2) of the Companies Act. Section 408 of the Companies Act provides that after the liquidator’s account has lain for inspection as prescribed in section 406 and no objection has been lodged or an objection has been lodged and not upheld, the Master shall confirm the account and ‘his confirmation shall have the effect of a final judgment, save as against such persons as may be permitted by the court to re-open the account after such confirmation but before the liquidator commences with the distribution’. The words ‘confirmation shall have the effect of a final judgment’ do not give each item in the account the quality of a judgment of the court. ‘They mean that, once the Master has confirmed an account, after objections, if any, have been dealt with, his confirmation of that account is final and it cannot be re-opened, save where a court authorises the re-opening’ – see Kilroe-Daley v Barclays National Bank Ltd 1984 (3) SA 609 (a) at 627E-F. Nevertheless, once the account has been confirmed by the Master the liquidator is entitled to receive his remuneration.

[13] In the absence of an agreement to the contrary, joint liquidators share the liquidator’s remuneration equally – see Cooper v Master of the Supreme Court [1998] 1 All SA 158 (N) at 168h-167c; Botha v Swanepoel 2002 (4) SA 577 (T) at 579D-580B. Neither the Master nor the court has the authority to determine any other division of the liquidator’s remuneration – see Cooper v The Master of the Supreme Court supra at 165-166: Meskin Henochsberg on the Companies Act Vol 1 at 811.

[14] The plaintiff was therefore entitled to receive one quarter of the total liquidator’s fee payable in terms of the second liquidation and distribution account. There is no suggestion that the Master reduced or disallowed any part of the fee because the liquidators did not carry out their duties promptly and properly.

[15] The defendants contend that the plaintiff has not proved that the defendants were unjustly enriched. It may be that the claim is a condictio indebiti – see Kommissaris van Binnelandse Sake v Willers 1994 (3) SA 283 (A) at 329B-333G – but it is not necessary to decide this. I agree with the plaintiff’s counsel that the allegations relating to unjust enrichment are superfluous. The factual situation is that the defendants took the whole liquidator’s fee well-knowing that they were entitled to only ¾ of the fee. It is clear from the first defendant’s letter to the Master dated 12 August 2002 (B31-33) that the defendants knew that the plaintiff was entitled to a share of the fee in terms of the confirmed liquidation and distribution account. When the defendants received the full amount of the fee, including the plaintiff’s share, they misappropriated the plaintiff’s fee. They took money which the plaintiff, and not they, were entitled to. The plaintiff is entitled to recover these funds with the condictio furtiva.

[16] In the unreported judgment of the full court in Johan Christiaan Troskie v The State, TPD case number A57/2006, 27 October 2008, the court said the following in paragraph 9:

‘In our law the owner of a stolen thing can use the condictio furtiva action against the thief for the prejudice suffered as a result of the theft – see Kruger v Navratil 1952 (4) SA 405 (SWA) at 408; John Bell & Co Ltd v Esselen 1954 (1) SA 147 (A) at 151E-152B; Minister van Verdediging v Van Wyk en Andere 1976 (1) SA 397 (T) at 400C; Silberberg and Schoeman’s The Law of Property 4 ed (Badenhorst Pienaar and Mostert) 243-244; De Vos Verrykingsaanspreekliheid in die Suid-Afrikaanse Reg 3 ed 36-39, 83 and 213; Voet (Gane’s Translation) 13.1.6. The condictio furtiva is classified as a delictual action – see Voet (Gane’s Translation) 13.1.2; Minister van Verdediging v Van Wyk en Andere (supra) at 400C-D; Clifford v Farinha 1988 (4) SA 315 (W) at 320H-322D; Van der Merwe Sakereg 2 ed 358; De Vos Verrykingsaanspreeklikheid 213; Pauw 1976 SALJ 395 at 399-400; Blecher 1978 SALJ 341 at 345-6; Van der Walt 1990 THRHR 238-242; D Carey Miller The Acquisition and Protection of Ownership 326-327. Although it is essential for the condictio furtiva that there be a theft – see De Vos Verrykingsaanspreeklikheid 37; Minister van Verdediging v Van Wyk en Andere supra at 402G – it is not necessary to establish the modern requirements of theft and the Roman Law requirements for theft will suffice – see Minister van Verdediging v Van Wyk en Andere supra at 402G-403C; Clifford v Farinha supra at 322E-323E. In the first-mentioned case the court concluded at 403A that –

‘geen rede bestaan om die strafregtelike omskrywing van diefstal toe te pas nie en nie die erkende omskrywing wat van toepassing is in die deliktereg in die Romeinse en Romeins Hollandse reg nie. Dit sou myns insiens net nodig gewees het om te bewys dat eerste verweerder die elemente van furtum rei soos hierbo uiteengesit oortree het’.

In Clifford v Farinha supra at 321E-G the court stated the underlying principle as follows:

‘The “benemer” – to use the term of De Groot 3.37.3 – does something which is not permitted by law to do, namely, to arrogate to himself the power to deal with another’s property. Thereby he incurs the obligation immediately to undo what he has done’.

According to Carey Miller at 331:

‘a thief for the purposes of the condictio furtiva is one who commits the broad wrong of taking property against the will of the owner’.

[17] In argument, the defendants’ counsel contended, for two reasons, that the plaintiff lost nothing by the defendants taking the full fee:

First, he contended, the plaintiff had ceded his right to the fees to a company, Afri-First City Trust and Administrators (Pty) Ltd, before confirmation of the second liquidation and distribution account. For this argument he relied on a letter dated 4 February 2001 from First City to the plaintiff (B14-15). In this letter, the author, Hennie Eloff, said –

‘(A)t the date of our association, it was agreed that in regard to any estates where you were appointed as a Liquidator or Trustee, that although such estates were registered in your name, that in fact the asset that was created thereby, i.e. the potential fees would be the property of the partnership i.e. Afri-First City Trust and Administrators (Pty) Ltd.’

Apart from the fact that the word cession is not used there is no reference to a transfer of the right to claim the fees. In my view Eloff was saying no more than that the plaintiff would be obliged to pay the fees over to the company. On 5 December 2001 Eloff addressed a letter to the third defendant in which he sought an undertaking that the liquidators would pay over all fees accruing to the plaintiff to First City. (B12). It is clear from this letter that Eloff did not rely on a cession and that he considered that the plaintiff would be entitled to a share of the fees;

Second, he contended that if the plaintiff had not ceded his claim, the plaintiff still had a claim against the insolvent estate for payment of the fees which he had not received. I do not agree. On all the evidence it is clear that the liquidators as a group have only one claim for payment of the fees confirmed in the liquidation and distribution account. Once that claim has been paid the estate is no longer liable for payment of the liquidator’s fee. If the plaintiff claims his share of the fees from the insolvent estate his claim would fail on the grounds that it had been paid.

[18] The plaintiff’s alternative claim against the first and third defendants is therefore upheld. With regard to costs, the parties each employed two counsel and they agreed that the costs of two counsel are justified.

Order

[19] I The first defendant is ordered to pay to the plaintiff the sum of R543 587,78 together with interest thereon calculated at the rate of 15,5 % per annum from 11 April 2006 to date of payment.

II The third defendant is ordered to pay to the plaintiff the sum of R543 587,78 together with interest thereon calculated at the rate of 15,5 % per annum from 11 April 2006 to date of payment.

III The first and third defendants, jointly and severally, the one paying the other to be absolved, are ordered to pay the costs of suit, such costs to include the costs consequent upon the employment of two counsel.

_______________________

B.R. SOUTHWOOD

JUDGE OF THE HIGH COURT

CASE NO: 8275/2007

HEARD ON: 25 November 2008

FOR THE PLAINTIFF: ADV. N. DAVIS SC

ADV. C.J. HARMS

INSTRUCTED BY: Mr G.S. Goodes of Honey Attorneys

FOR THE 1^st to 3^rd DEFENDANTS: ADV. J.G. CILLIERS SC

ADV. M.M.W. VAN ZYL

INSTRUCTED BY: Mr. D.H. Botha of Newtons Attorneys

DATE OF JUDGMENT: 4 December 2008

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