THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No. 696/2022

In the matter between:

MANTIS INVESTMENTS HOLDINGS (PTY) LIMITED                FIRST APPELLANT
ADRIAN JOHN FAULKNER GARDINER                               SECOND APPELLANT

and

WERNER DE JAGER N.O.                                                       FIRST RESPONDENT
CAROL-ANN SCHRӦDER N.O.
SECOND RESPONDENT

Neutral Citation:
Mantis Investments Holdings v De Jager N O (696/2022) [2023]
ZASCA 134 (18 October 2023)

Coram:
PONNAN and MBATHA JJA, KATHREE-SETILOANE, KEIGHTLEY and
UNTERHALTER AJJA

Heard:
16 August 2023
Delivered:
This judgment was handed down electronically by circulation to the
parties’ representatives via email, publication on the Supreme Court of Appeal website
and release to SAFLII. The date and time for hand-down is deemed to be 11:00 am
on 18 October 2023.

Summary:
Sections 44 and 151 of the Insolvency Act – Master’s decision admitting
a creditor’s claim against a company in liquidation stands unless set aside on review
in terms of s 151 thereof. Section 31 of Insolvency Act – in an action to set aside a
collusive disposition – no entitlement to contest a proved claim of creditor.

___________________________________________________________________
ORDER
___________________________________________________________________

On appeal from: Eastern Cape Division of the High Court, Makanda (Beneke AJ)
sitting as a court of first instance:

The appeal is dismissed with costs.

___________________________________________________________________

JUDGMENT
___________________________________________________________________

Kathree-Setiloane AJA (Ponnan and Mbatha JJA, Keightley and Unterhalter
AJJA concurring):

[1] Werner de Jager, the first respondent and Carol Ann-Schröder, the second
respondent (the liquidators), are the duly appointed joint liquidators of
No. 1 Watt Street (Pty) Ltd (Watt Street).1 Mantis Investment Holdings (Pty) Ltd
(Mantis), the first appellant, is a shareholder in Watt Street. Mr Adrian John Faulkner
Gardiner (Mr Gardiner), the second appellant, is a director of both Mantis and Watt
Street.2

[2] The appellants appeal against the judgment and order of Beneke AJ in the
Eastern Cape Division of the High Court, Makanda (the high court) in which it, inter
alia, made an order that the appellants are not lawfully entitled to contest the claims
proved by the Eastern Cape Development Corporation (ECDC) in the liquidation
proceedings of Watt Street. The matter before the high court proceeded by way of a
special case in terms of rule 33(1) of the Uniform Rules of Court.

[3] The special case has its genesis in an action, which the liquidators instituted
against the appellants to set aside a collusive disposition of the assets of Watt Street.
The agreed facts which form the background to the action are that, during 2005, ECDC

1 Watt Street was formerly known as Mantis Group Holdings (Pty) Ltd.
2 Mantis and Mr Gardiner are referred to collectively as ‘the appellants’ in the judgment.

advanced certain monies to Bushman Sands Development (Pty) Ltd (Bushman
Sands). Watt Street bound itself as surety and co-principal debtor, with Bushman
Sands, to ECDC.

[4] As a result of the failure of Bushman Sands to repay the loan to ECDC, the latter
instituted an action in the Eastern Cape Division of the High Court, Gqeberha
(Gqeberha high court)3 against Watt Street and Bushman Sands for, inter alia,
payment of the amount of about R19 million (the ECDC action). Watt Street defended
the ECDC action.

[5] Shortly before the commencement of the trial in the ECDC action, Mantis,
represented by Mr Gardiner, brought an application in the Gqeberha high court,4 for
the liquidation of Watt Street. Mantis contended, in this application, that it was a
creditor of Watt Street for an amount of about R2.5 million arising from certain
unsecured and interest free loans advanced to Watt Street, without specified
repayment terms. In November 2014, the Gqeberha high court placed Watt Street in
final winding-up.

[6] ECDC and Mantis proved claims against Watt Street in terms of s 445 of the
Insolvency Act 24 of 1936 (the Act).  Despite Mantis disputing the claim of ECDC, it

3 Case No. 1165/2012.
4 Case No. 3805/14.
5 Section 44 of the Insolvency Act, in relevant part, provides:
‘44 Proof of liquidated claims against estate
(1) Any person or the representative of any person who has a liquidated claim against an insolvent
estate, the cause of which arose before the sequestration of that estate, may, at any time before the
final distribution of that estate in terms of section one hundred and thirteen, but subject to the provisions
of section one hundred and four, prove that claim in the manner hereinafter provided: Provided that no
claim shall be proved against an estate after the expiration of a period of three months as from the
conclusion of the second meeting of creditors of the estate, except with leave of the Court or the Master,
and on payment of such sum to cover the cost or any part thereof, occasioned by the late proof of the
claim, as the Court or Master may direct.
. . .
(3) A claim made against an insolvent estate shall be proved at a meeting of the creditors of that estate
to the satisfaction of the officer presiding at that meeting, who shall admit or reject the claim: Provided
that the rejection of a claim shall not debar the claimant from proving that claim at a subsequent meeting
of creditors or from establishing his claim by an action at law, but subject to the provisions of section
seventy-five: and provided further that if a creditor has twenty-four or more hours before the time
advertised for the commencement of a meeting of creditors submitted to the officer who is to preside at

was proved and accepted by the Master of the Gqeberha high court (the Master).
Mantis’ claim was also accepted by the Master.

[7] The liquidators’ cause of action to set aside what it describes as a collusive
disposition is premised on s 31 of the Act.6 The liquidators pleaded, inter alia, as
follows in the particulars of claim:

that meeting the affidavit and other documents mentioned in subsection (4), he shall be deemed to have
tendered proof of his claim at that meeting.
(4) Every such claim shall be proved by affidavit in a form corresponding substantially with Form C or
D in the First Schedule to this Act. That affidavit may be made by the creditor or by any person fully
cognizant of the claim, who shall set forth in the affidavit the facts upon which his knowledge of the
claim is based and the nature and particulars of the claim, whether it was acquired by cession after the
institution of the proceedings by which the estate was sequestrated, and if the creditor holds security
therefor, the nature and particulars of that security and in the case of security other than movable
property which he has realized in terms of section eighty-three, the amount at which he values the
security. The said affidavit or a copy thereof and any documents submitted in support of the claim shall
be delivered at the office of the officer who is to preside at the meeting of creditors not later than twenty-
four hours before the advertised time of the meeting at which the creditor concerned intends to prove
the claim, failing which the claim shall not be admitted to proof at that meeting, unless the presiding
officer is of opinion that through no fault of the creditor he has been unable to deliver such evidences
of his claim within the prescribed period: Provided that if a creditor has proved an incorrect claim, he
may, with the consent in writing of the Master given after consultation with the trustee and on such
conditions as the Master may think fit to impose correct his claim or submit a fresh correct claim.
(5) Any document by this section required to be delivered before a meeting of creditors at the office of
the officer who is to preside at that meeting, shall be open for inspection at such office during office
hours free of charge by any creditor, the trustee or the insolvent or the representative of any of them.
(6) A claim against an insolvent’s estate for payment of the purchase price of goods sold and delivered
to the insolvent on an open account shall not be admitted to proof unless a statement is submitted in
support of such claim showing the monthly total and a brief description of the purchases and payments
for the full period of trading or for the period of twelve months immediately before the date of
sequestration, whichever is the lesser.
(7) The officer presiding at any meeting of creditors may of his own motion or at the request of the
trustee or his agent or at the request of any creditor who has proved his claim, or his agent, call upon
any person present at the meeting who wishes to prove or who has at any time proved a claim against
the estate to take an oath, to be administered by the said officer, and to submit to interrogation by the
said officer or by the trustee or his agent or by a creditor or the agent of a creditor whose claim has
been proved, in regard to the said claim.
(8) If any person who wishes to prove or who has at any time proved a claim against the estate is absent
from a meeting of creditors the officer who presided or who presides thereat, may summon him in writing
to appear before him at a place and time stated in the summons, for the purpose of being interrogated
by the said officer or by the trustee or his agent or by a creditor or the agent of a creditor whose claim
has been proved, and I he appears in answer to the summons the provisions of subsection (7) shall
apply.
(9) If any such person fails without reasonable excuse to appear in answer to such summons or having
appeared or when present at any meeting of creditors refuses to take the oath or to submit to the said
interrogation or to answer fully and satisfactorily any lawful question put to him, his claim, if already
proved, may be expunged by the Master, and if not yet proved, may be rejected.’
6 Section 31 of the Insolvency Act provides:

‘(a) The appellants had embarked upon a restructuring of Watt Street which resulted in the
disposal and transfer of its assets, and a declaration and payment of a dividend in an amount
exceeding R64 million from Watt Street to Mantis, as its shareholder;
(b) The appellants effectively denuded Watt Street of all its significant assets despite being
aware that there existed an actual or contingent liability due by it to ECDC;
(c) As a result, Watt Street was not in a position to meet its obligations to pay an amount
purportedly owing to ECDC;
(d) The disposal and transfer of assets and the declaration and payment of a dividend, had
the effect of prejudicing the creditors of Watt Street and, in particular, ECDC;
(d) Watt Street, Mantis and Mr Gardiner intended to defraud ECDC by deliberately prejudicing
and frustrating its claims against Watt Street, such that there is no prospect of any dividend to
be paid in Watt Street; and
(e) As parties to the collusive disposition, Mantis and Mr Gardiner are jointly and severally
liable to make good the loss caused to Watt Street and are obliged to pay a penalty in the
amount of R64 million for its benefit.’

[8] The liquidators accordingly sought an order: (a) setting aside the disposal and
transfer of the assets and the declaration and payment of a dividend in an amount of
not less than R64 million in terms of s 31 of the Act; (b) that the said sum be paid to
the liquidators of Watt Street; (c) declaring that Mantis is to forfeit any claim it may
have against Watt Street; (d) for payment of compensation and a penalty in the sum
of R64 million; and (e) for costs.

[9] In answer, the appellants filed a plea in which they admitted that ECDC had
proved a claim against Watt Street in the amount of about R19 million. They, however,
denied that the amount claimed (or any lesser amount) was due, owing, and payable

‘31 Collusive dealings before sequestration
(1) After the sequestration of a debtor’s estate the court may set aside any transaction entered into by
the debtor before the sequestration, whereby he, in collusion with another person, disposed of property
belonging to him in a manner which had the effect of prejudicing his creditors or of preferring one of his
creditors above another.
(2) Any person who was a party to such collusive disposition shall be liable to make good any loss
thereby caused to the estate, by way of penalty, such sum as the court may adjudge, not exceeding the
amount by which he would have benefited by such dealing if it had not been set aside; and if he is a
creditor he shall also forfeit his claim against the estate.
(3) Such compensation and penalty may be recovered in any action to set aside the transaction in
question.’

to ECDC. They also denied that the restructuring, rationalization and declaration of a
dividend constituted a collusive agreement which prejudiced the creditors of Watt
Street, and more particularly ECDC. The appellants furthermore pleaded that, from
time to time, Bushman Sands (the principal debtor) had effected payments to ECDC
and continued to do so.

[10] The liquidators filed a replication in which they contended that: (a) the Master’s
decision to admit ECDC’s claim constitutes an administrative act which exists as a fact
and has legal effect until set aside; (b) neither of the appellants sought to review the
Master’s decision; (c) consequently, any determination in the action that ECDC does
not have a claim against Watt Street is precluded. In answer, the appellants filed a
rejoinder in which they contended that they are not bound, in the action, by the decision
of the Master to admit the claim, as it was made in the context of a claim by ECDC
against Watt Street. They also contended that in law, it was incumbent upon the
liquidators to establish, as a prerequisite to a claim based on a collusive disposition
that, at the date of the institution of the action, ECDC was, and is, a creditor of the
company in liquidation.

[11] Two questions arose, namely whether the appellants were entitled to: (a) contest
the claim of ECDC as against the principal debtor (Bushman’s Sands); and, (b) revisit
the indebtedness and quantum of ECDC’s claim against the surety. On
1 December 2020, the high court made an order separating those issues from the
remainder of the issues in the action.7

[12] Having heard argument, the high court found that the decision of the Master to
accept a claim under s 44 of the Act constitutes administrative action, which exists and
continues to have legal consequences until and unless it is reviewed and set aside in
terms of s 151 of the Act.8 Relying for support on the decision of Bester NO and Others
v CTS Trailers (Pty) Ltd and Another,9 it concluded that ‘[a]bsent a successful

7 Order of the Eastern Cape Division of the High Court, Makhanda: De Jager N O and Another v Mantis
Investments Holdings (Pty) Ltd and Another [2021] ZAECGHC 120.
8 See para 16 below.
9 Bester N O and Others v CTS Trailers (Pty) Ltd and Another [2020] ZAWCHC 169; 2021 (4) SA 167
(WCC).

application for the review and setting aside of an acceptance of a claim, and even
despite objections to the claim having merit, the decision of the Master to accept a
creditor’s claim must stand’.10 The high court accordingly made the following order:
‘1.The [appellants] are not lawfully entitled to revisit the indebtedness of No. 1 Watt Street
(Pty) Ltd (previously known as Mantis Group Holdings (Pty) Ltd) – (and referred hereinafter
as “the company in liquidation”) as set out in paragraphs 7.3, 7.4, 7.5, and 7.6 of the particulars
of claim read with paragraphs 6 and 7 of the [appellants’] plea, and read further with the
[respondents’] replication and the [appellants’] rejoinder and the [respondents’] surrejoinder
filed of record;
2. The [appellants] are not lawfully entitled to continue to contest the claims proved by ECDC
in the liquidation proceedings of the company in liquidation, as set out in paragraph 7.7 and
7.8 of the particulars of claim, read with paragraphs 9 and 10 of the [appellants] plea, and
further read with the [respondents’] replication, the [appellants’] rejoinder, and the
[respondents’] surrejoinder filed of record; and
3. The costs occasioned by the separated special case, including the costs of the application
for separation, including the costs of two counsel where so utilized, shall be borne by the
appellants.’

[13] The appeal against the order of the high court is before us with the leave of this
Court. In my view, the appeal can be disposed of on a narrower basis than that
foreshadowed in the pleadings. Both the appellants and the liquidators appeared to
accept this during argument in the appeal.

[14] Section 4411 of the Act deals comprehensively with the procedure for the proof
of liquidated claims against an insolvent estate. In Caldeira v The Master and Another,
Levinsohn J said that ‘[t]he proof of claim procedure enables creditors to prove their
claims in a relatively simple and expeditious fashion’.12 More recently in Breda N O v
Master of the High Court, Kimberley,13 this Court observed that: ‘[a] presiding officer
does not adjudicate upon the claim as a court of law, is not required to examine a

10 Bester paras 21-27. Although Bester deals with a decision made by the Master in terms of s 46 of the
Insolvency Act and not s 44, it affirms the principle that, a decision taken by the Master in terms of the
Insolvency Act has legal consequences until set aside.
11 See fn 6 above.
12 Caldeira v The Master and Another 1996 (1) SA 868 (NPD) at 873H-874F.
13 Breda N O v Master of the High Court, Kimberley [2015] ZASCA 166.

claim too critically and only has to be satisfied that the claim is prima facie proved’.14
Put differently, the Master must examine the proof of claims’ documents to determine
whether they disclose prima facie the existence of an enforceable claim.

[15] Where a Master admits a claim, the Master cannot subsequently alter that
decision.15 This does not, however, mean that the Master’s decision to admit the claim
is conclusive and payable out of property of the insolvent estate. That is so because,
at this stage, the admission of the claim is provisional. This means that it is open to
the liquidator to dispute the claim by following the procedure envisaged in s 45(3) of
the Act which provides:
‘If the trustee disputes a claim after it has been proved against the estate at a meeting of
creditors, he shall report the fact in writing to the Master and shall state in his report his reasons
for disputing the claim. Thereupon the Master may confirm the claim, . . . reduce or disallow
the claim, and if he has done so, he shall forthwith notify the claimant in writing: Provided that
such reduction or disallowance shall not debar the claimant from establishing his claim by an
action at law, but subject to the provisions of section seventy-five’.

[16] If the liquidator is dissatisfied with the Master’s decision to admit the claim of a
creditor, he or she may apply to court to review it in terms of s 151 of the Act which
provides:
‘Subject to the provisions of section fifty-seven any person aggrieved by any decision, ruling,
order or taxation of the Master or by a decision, ruling or order of an officer presiding at a
meeting of creditors may bring it under review by the court and to that end may apply to the
court by motion, after notice to the Master or to the presiding officer, as the case may be and
to any person whose interests are affected: Provided that if all or most of the creditors are
affected, notice to the trustee shall be deemed to be notice to all such creditors; and provided
further that the court shall not re-open any duly confirmed trustee’s account otherwise than as
is provided in section one hundred and twelve.’

[17] A liquidator may not review the decision of the Master to admit the claim, unless
the liquidator has followed the procedure contemplated in s 45(3) of the Act, which is

14 Ibid para 23.
15 Ben Rossouw Motors v Druker NO and Others 1975 (1) SA 821 (W) at 823; [1975] 1 All SA 311 (W)
at 314.

peremptory.16 A creditor who has unsuccessfully objected to the Master’s decision to
admit the claim, may take the Master’s decision on review in terms of s 151 of the
Act.17 The Master’s decision to reject a creditor’s proved claim may also be taken on
review by the aggrieved creditor. However, where no steps are taken to review the
Master’s decision to admit or reject a proved claim, that claim becomes conclusive
and enforceable in law against the company in liquidation. In that event, the Master’s
decision would stand.

[18] As the appellants, in the present matter, did not challenge the Master’s decision
to admit ECDC’s claim in terms of s 151 of the Act, the Master’s decision stands. The
consequence is that ECDC is factually and legally a creditor of the company in
liquidation. The appellants had a tailor-made remedy in terms of the Act to review the
Master’s decision but did not do so.

[19] The legislature has provided parties in the position of the appellants with a suite
of statutory remedies. In argument, the appellants appeared to accept that reliance on
the common law as the basis to assert a claim, is bound to result in an incongruity with
the overall scheme of the Act. Any decision on that claim could notionally be at odds
with the decision of the Master to admit such claim to proof, where, as here, the Master
was not cited nor afforded an opportunity to defend his or her decision. It follows that
in circumstances such as the present, a litigant, in the position of the appellants, who
is aggrieved by a decision of the Master to admit to proof a claim against an insolvent
estate, would be restricted to the remedy of a review under s 151 of the Act.

[20] Several consequences arise from the final winding-up of a company. Foremost
is the creation of a concursus creditorum, the effect of which was described by this
Court in Walker v Syfret N O:18 ‘. . . the hand of the law is laid upon the estate, and at once
the rights of the general body of creditors have to be taken into consideration. No transaction
can thereafter be entered into with regard to estate matters by a single creditor to the prejudice

16 Estate Jeewa v The Master and Bukhsh (1927) NLR 86; Estate Wilson v Estate Giddy, Giddy and
White and Others 1937 AD 239.
17 Noord-kaaplandse Ko-op Lewendehawe Agentskap Bpk v Van Rooyen and Others 1977 (1) SA 403
(NC) at 406-407.
18 Walker v Syfret NO 1911 AD 141.

of the general body. The claim of each creditor must be dealt with as it existed at the issue of
the order.’

[21]  ECDC is a creditor with a proved claim that is enforceable against Watt Street.
That decision has not been set aside on review. It therefore stands. The appellants,
however, seek to avoid this legal consequence by contending that it is incumbent on
the liquidators to establish, as a pre-requisite to their claim that, at the date of institution
of the action ECDC was, and is, a creditor in respect of the amount claimed. To require
this of the liquidators, in the face of ECDC’s pre-existing proved claim, is to negate the
comprehensive set of measures in the Act to protect creditors.

[22] In the result, the appeal must fail. I make the following order:

The appeal is dismissed with costs.

_______________________

F KATHREE-SETILOANE

ACTING JUDGE OF APPEAL

Appearances

For the appellants:

A Beyleveld SC
Instructed by:
BLC Attorneys, c/o Wheeldon Rushmere & Cole
Inc, Grahamstown
Symington De Kok, Bloemfontein

For the respondents:

RG Buchanan SC
Instructed by:
Tabata Smith Inc, c/o Nettletons Attorneys,
Grahamstown

Webbers, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL
From:
The Registrar, Supreme Court of Appeal
Date:

18 October 2023
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does
not form part of the judgments of the Supreme Court of Appeal
Mantis Investments Holdings v De Jager N O (696/2022) [2023] ZASCA 134 (18 October 2023)
Today, the Supreme Court of Appeal (SCA) dismissed an appeal from the Eastern Cape Division of the
High Court, Makanda (high court). The appeal emanated from an order of the high court that the
appellants were not entitled to contest the claims proved by the Eastern Cape Development Corporation
(ECDC) in the liquidation of No. 1 Watt Street (Pty) Ltd (Watt Street). The case has its genesis in an
action which the liquidators instituted against the appellants to set aside a collusive disposition of the
assets of Watt Street.

The facts of the matter were that ECDC advanced money to Bushman Sands Development (Pty) Ltd
(Bushman Sands), and Watt Street bound itself as surety and co-principal debtor with Bushman Sands
to ECDC. ECDC instituted action against Bushman Sands and Watt Street after Bushman Sands
defaulted on their loan to ECDC. Mantis Investment Holdings (Pty) Ltd (Mantis), being a shareholder of
Watt Street, applied for the liquidation of Watt Street and shortly before the trial, Mantis claimed that it
was a creditor of Watt Street for certain unsecured and interest free loans advanced to Watt Street.
ECDC and Mantis managed to prove their claims against Watt Street in terms of s 44 of the Insolvency
Act 24 of 1936 (the Act), and the claims were accepted by the Master of the High Court after Watt Street
was ultimately placed in final winding-up. The high court found that the decision of the Master to accept
a claim under s 44 of the Act constitutes administrative action, which existed and continued to have
legal consequences until and unless it is reviewed and set aside in terms of s 151 of the Act.

Upon appeal, this Court held that s 44 dealt comprehensively with the procedure for the proof of
liquidated claims against an insolvent estate. Where a Master admits a claim, it cannot subsequently
alter the decision. If a liquidator was unsatisfied with the Master’s decision, a court could be approached
to review the matter in terms of s 151 of the Act. This Court found that since no steps were taken to
review the Master’s decision, the claim became conclusive and enforceable against the company in
liquidation.

Consequently, the SCA held that where a party is aggrieved by a decision of the Master to admit proof
of a claim against an insolvent estate, such party is limited to the remedy of a review under s 151 of the
Act. In the result, the appeal was dismissed.