THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 604/2017

In the matter between:
ANTONY LOUIS MOSTERT

FIRST APPELLANT
ANTONY LOUIS MOSTERT N O
SECOND APPELLANT
THE SABLE INDUSTRIES
PENSION FUND

THIRD APPELLANT
A L MOSTERT & CO INCORPORATED   FOURTH APPELLANT
Case No: 597/2017
THE EXECUTIVE OFFICER OF THE
FINANCIAL SERVICES BOARD
FIFTH APPELLANT
THE REGISTRAR OF PENSION FUNDS        SIXTH APPELLANT
and
SIMON JOHN NASH

FIRST RESPONDENT
MIDMACOR INDUSTRIES LIMITED     SECOND RESPONDENT

Neutral citation: Mostert and Others v Nash and Another (604/2017
and 597/2017) [2018] ZASCA 62 (21 May 2018)
Coram:
PONNAN, WALLIS, WILLIS and SWAIN JJA and
PILLAY AJA
Heard:
3 May 2018
Delivered: 21 May 2018

Summary: Pension fund – curatorship in terms of s 5(2) of Financial
Institutions (Protection of Funds) Act 28 of 2001 – trustee’s remuneration
– court order that it be agreed with Executive Office of the Financial
Services Board in accordance with the norms of attorneys’ profession –
whether fee as a percentage of amounts recovered on behalf of fund in
accordance with those norms – whether contrary to public policy or an
infringement of Contingency Fees Act 66 of 1997.
Whether conclusion of fee agreement administrative action in terms of
PAJA – whether application to set aside fee agreement a review in terms
of principle of legality – applicability of delay rule – locus standi of
applicants – abuse of process and doctrine of unclean hands.

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria
(Tuchten J sitting as court of first instance):
The appeal against paragraphs 1, 2, 3, 6 and 7 of the order of
the high court is dismissed.
The appeal against paragraphs 4 and 5 of the order of the
high court succeeds and those paragraphs are set aside.
Each party is to pay his or its own costs of the appeal.

JUDGMENT

Wallis JA (Ponnan and Swain JJA and Pillay AJA concurring)

[1] On 20 April 2006 and at the instance of the fifth appellant, the
Executive Officer of the Financial Services Board,1 the Sable Industries
Pension Fund (Sable Fund), the third appellant, was placed under
provisional curatorship in terms of the provisions of s 5(2) of the
Financial Institutions (Protection of Funds) Act 28 of 2001 (the FI Act).
The court order appointed the second appellant, Mr A L Mostert, as the
provisional curator. Mr Mostert, in his personal capacity is the first
appellant. He is an attorney practising as the eponymous partner of the

1 Then Mr Dube Tshidi. The Executive Officer is by virtue of his office also the Registrar of Pension
Funds, the sixth appellant, although the role is usually filled by one of his deputies. For the purposes of
this judgment they are referred to collectively as the FSB.

fourth appellant. The present dispute relates to his remuneration as
curator. On 6 June 2006 the provisional order of curatorship was made
final and Mr Mostert’s appointment as curator was confirmed.

[2] Paragraph 9 of the order appointing Mr Mostert as provisional
curator of the Sable Fund read:
‘The curator shall be entitled to periodical remuneration in accordance with the norms
of the attorneys’ profession, as agreed with the applicant [the Executive Officer of the
FSB], such remuneration to be paid from the assets owned administered or held by or
on behalf of the Fund, on a preferential basis, after consultation with the applicant.’
The agreement Mr Mostert concluded with the FSB provided for him to
be paid remuneration on the basis of a percentage of the amounts
recovered on behalf of the Sable Fund.

[3] The first respondent, Mr Simon Nash, and a company controlled by
him, Midmacor Industries Ltd (Midmacor), whose interest in the matter
will emerge later in this judgment, challenged the lawfulness of this
agreement, inter alia, on the basis that the agreement was not in
accordance with the norms of the attorneys’ profession. Their challenge
succeeded before Tuchten J in the Gauteng Division of the High Court,
Pretoria. This appeal is with his leave.

Background
[4] Defined benefit pension funds, such as the Sable Fund, provide for
members to make regular contributions in fixed amounts, usually a
percentage of the employee’s monthly remuneration. Their employer is
required to contribute such amounts as the fund’s actuary determines is
needed to provide the benefits that the fund’s rules promise to members.
If investment performance is better than predicted by the actuary the

result may be that the assets of the fund are greater than the actuary
determines is necessary to provide those benefits. Under the conventional
rules of such funds this surplus enables the employer to take a
contribution holiday, that is, make no contributions at all to the fund.
This will deplete the surplus but may not extinguish it entirely.

[5] In the early 1990s a number of defined benefit funds had
significant actuarial surpluses and there was a debate regarding the rights
to such surplus. From the side of fund members and pensioners the
attitude adopted was that any surplus not needed to provide for future
benefits should be used to enhance the benefits of members and
pensioners. From the side of employers, generally with the support of
fund administrators, the approach adopted was that any surplus had
accrued as a result of past excessive contributions by employers and in
that sense ‘belonged’ to the employer. Neither view was in law correct.
The true position was that all assets belonged to the fund and could only
be disposed of in accordance with the rules of the fund and the provisions
of the Pension Funds Act 24 of 1956 (the PFA).2

[6] The absence of specific statutory provisions dealing with pension
fund surpluses was ultimately remedied by way of the provisions of
ss 15A to 15K of the PFA. The transactions that led to the Sable Fund
being placed under curatorship were implemented before those provisions
came into operation with a view to ‘unlocking’ the surplus in that fund
for the benefit of the employer. They need to be described briefly in view
of the various preliminary points that have been raised and are dealt with

2 Tek Corporation Provident Fund and Others v Lorentz [1999] ZASCA 54; 1999 (4) SA 884 (SCA)
paras 15-17.

below, but I do so using neutral language because there is a heated
dispute as to their lawfulness. Mr Mostert maintains that the
arrangements were a fraudulent scheme devised by a Mr Peter Ghavalas
to ‘strip’ the fund of its surplus and leave it with no assets and liabilities.
This has led to Mr Nash and Midmacor being criminally prosecuted in
proceedings that have not yet reached a conclusion. For his part Mr Nash
maintains that these arrangements were lawful, their implementation was
sanctioned by the FSB as the regulator of pension funds and involved no
criminal conduct on his part. Given that this dispute is to be resolved in
another court on another occasion and that its resolution is unnecessary in
order to resolve the present case, it is important that this court not express
a view on the merits of the opposing contentions.

[7] With effect from January 1994 companies controlled by Mr Nash
and his family acquired Midmacor from KNJ Industrial Holdings Ltd.
Midmacor had a number of subsidiaries and operated various businesses.
Its employees were members of the Sable Fund, which had previously
operated under a different name, and Midmacor became the principal
employer of the fund. Mr Nash was the Chief Executive Officer of
Midmacor and an employee of an associated company, Trina Investments
(Pty) Ltd. According to some of the documents in the record he became a
member of the Sable Fund. The Sable Fund had an actuarial surplus of
some R36 million and the principal employer was enjoying a contribution
holiday.

[8] In 1995 Midmacor acquired another business known as Cadac.
This business also had a pension fund for its employees that, like the
Sable Fund, had an actuarial surplus. The principal employer in respect of
that fund was also enjoying a contribution holiday. Mr Ghavalas devised

the following arrangements to enable the surplus in the Sable Fund to be
unlocked immediately for the benefit of the employer, without waiting to
exhaust it through a contribution holiday. All the active members of the
Sable Fund were transferred to the Cadac Fund, leaving the Sable Fund
with a number of pensioners and only four active members, one of whom
was Mr Nash. Provision was made to purchase annuities for the
pensioners to provide them with the benefits to which they were entitled
under the rules of the Sable Fund and possibly some enhancement of
those benefits. This left the Sable Fund with four active members and an
actuarial surplus of some R36 million, represented by assets held by the
fund and not required to provide for future benefits.

[9] An otherwise dormant subsidiary of Midmacor, called Pro-Base
Products Pty Limited (Pro-Base), was made the principal employer under
the rules of the Sable Fund. Pro-Base had no assets and its only value lay
in the potential to unlock the surplus in the Sable Fund. This required the
assets representing the surplus to be transferred out of the Sable Fund.
That was achieved through an agreement in terms of which Midmacor
sold to Lifecare Group Holdings Limited (Lifecare) the entire issued
share capital of Pro-Base for a price of R34 560 000 and the business of
the Sable Fund was merged with that of the Lifecare Group Holdings
Pension Fund (the Lifecare Fund). Illustrative of the fact that unlocking
the surplus was the focus of this transaction was clause 7.1.21 of the sale
agreement, which required Midmacor to warrant that the financial
statements of the Sable Fund as at the effective date would fairly present
the assets and liabilities of the fund. In other words it warranted that the
surplus reflected therein would in fact exist.

[10] The merger of the business of the Sable Fund with that of the
Lifecare Fund occurred in terms of the provisions of s 14 of the PFA. The
Lifecare Fund thereby acquired the assets of the Sable Fund, which assets
exceeded its liabilities by some R 36 million. At the same time Lifecare
assigned to the Lifecare Fund its obligations under the sale agreement
with Midmacor in respect of the shares in Pro-Base. This obliged the
Lifecare Fund to pay Midmacor the purchase price of R34 560 000,
which it did. The four active members of the Sable Fund agreed to the
merger of the businesses of the Sable Fund and the Lifecare Fund and
should notionally have become members of the Lifecare Fund, although
this does not appear to have happened.

[11]    These transactions left the Sable Fund as an empty shell. After an
investigation by the FSB in 2003 the application to place the Sable Fund
under curatorship was made and Mr Mostert was appointed as its curator.
He formed the view that these various transactions were unlawful and
involved the commission of criminal offences and reported accordingly to
the FSB. In his report he indicated that he believed the Sable Fund had
claims against various parties including Mr Nash and Midmacor. His
problem was that it lacked the resources necessary to conduct the
necessary investigations and then pursue actions against these parties to
recover what he believed was due to the Sable Fund. This led to him
concluding the disputed fee agreement with the FSB.

The fee agreement
[12]    As already mentioned, paragraph 9 of the order appointing Mr
Mostert as the provisional curator of the Sable Fund provided for him to
receive ‘periodical remuneration in accordance with the norms of the
attorneys’ profession’ to be agreed with the Executive Officer of the FSB.

On 17 July 2006 Mr Mostert wrote to the Executive Officer reporting that
the Sable Fund had no assets other than its contingent claims against
various parties arising from the transactions described above and that this
presented a problem for him as curator. He said:
‘4
In terms of paragraphs 6.2 of the order of court whereby the Fund was placed
under curatorship the costs of the curatorship was anticipated to be paid by the Fund
alternatively from assets owned, administered or held by or under the control of the
Fund.
In terms of paragraph 9 of the order, the curator is entitled to periodic
remuneration in accordance with the norms of the attorneys’ profession, as agreed and
after consultation with the Financial Services Board.
It would be most unfortunate if due to the lack of finance the curatorship, and
particularly the legal proceedings that will inevitably have to be undertaken, could not
continue. This would obviously be prejudicial to the Fund members.’

[13] Having expressed these sentiments, Mr Mostert offered the
following as a potential solution to the problem:
‘7
In the circumstances I am, in my capacity as curator of the Fund, and as a
director of A. L. Mostert & Company Inc, prepared to continue the curatorship and
undertake any legal proceedings at risk, and at my expense (including disbursements)
on the basis of a contingency arrangement in terms of which my remuneration will
only become payable against recoveries of monies on behalf of the Fund.
I am agreeable to finance the disbursements, including counsel’s fees in
respect of the litigation, on the basis that should there be recovery by the Fund these
disbursements would be a first charge thereagainst, to be refunded to A. L. Mostert &
Company Inc, and that the proposed remuneration be one third of the amount
recovered thereafter.’

[14] This letter brought the following response from the Executive
Officer on 10 August 2006:
‘SABLE INDUSTRIES PENSION FUND 12/8/20317/1: CONTINGENCY FEE

With reference to your facsimile dated 7 August 2006, I wish to confirm that, for the
work done by the curator and A L Mostert and Company Incorporated relating to the
Sable Fund, since the date upon which the fund was placed under curatorship, which
include the exercise of the duties of the curator as well as any legal work undertaken
by A L Mostert and Company Inc, the curator and the aforesaid law firm shall be
jointly entitled to 33.33% (ie 16.66 per cent each) of all amounts recovered for the
benefit of the aforesaid Fund, upon the further undertaking that all disbursements of
the curator and the said law firm, shall be paid by the said law firm and or the curator
out of any recovery made on  behalf of the Fund, failing which shall be paid by the
said law firm and/or the curator out of own funds.’

[15] Other than Mr Mostert not being entitled to recover disbursements
separately, the FSB agreed to his proposal. Two years later, because the
Sable Fund was entitled to receive funds from another curatorship that
would enable it to discharge legal expenses already incurred and self-fund
future expenses, this agreement was varied in terms of a memorandum of
understanding (MOU) concluded between Mr Mostert, his law firm and a
representative of the FSB. The preamble recorded that:
‘The remuneration of the curators/liquidators, the attorneys and other costs with
regard to the business of the Funds is determined in terms of the relevant curatorship
orders, and the provisions of Section 28 of the Pension Funds Act (in relation to those
Fund which have been or will be placed into liquidation)’
The reference to ‘funds’ arose because the MOU related to a number of
different pension funds including the Sable Fund, some of which were in
liquidation and some under curatorship. It was alleged that all of these
funds had, on the advice of Mr Ghavalas, and in terms of arrangements
similar to those in respect of the Sable Fund, been reduced to shells after
the surpluses in the funds had been ‘unlocked’ for the benefit of the
employers.

[16] The MOU made the following provision in respect of the curator’s
fees payable to Mr Mostert:
‘4. From the date of curatorship until the date of liquidation of the Fund, the
remuneration of the curators and attorney/s shall be in terms of the applicable court
orders relating to these funds. This remuneration is subject to the maximum amounts
stated in 6 below.
5. From date of liquidation of each of the funds the liquidators’ remuneration and
costs shall be in accordance with section 28(A)(1) of the Pension Funds Act and,
based on the value of assets recovered, the liquidators’ remuneration shall be 16.66%
(exclusive of VAT) which shall be due and payable to the liquidator, or his nominee,
immediately from any recovery of assets being made.
6. It is recorded that the curator of the Sable Pension Fund has applied for the fund to
be placed in liquidation. Formal notification from the FSB with regard to the fund so
being placed in liquidation has not been received. In the circumstances recovery of
assets made prior to the fund being placed in liquidation shall be subject to the
curators’ remuneration of 16.66% (exclusive of VAT) of such assets recovered.’

[17] The previous agreement in respect of the legal fees payable to A L
Mostert & Co Incorporated was also varied to provide a cap to the total
fees payable to the firm and a restriction on the annual fees payable to it
in the future. This aspect of the MOU is not in dispute between the parties
and nothing more need be said about it. The focus must fall on the
curator’s fees.

Preliminary issues
[18] Mr Mostert was represented in his personal capacity, together with
his law firm, and separately in his capacity as curator, together with the
Sable Fund. In the former capacity he opposed the application on its
merits as well as raising several preliminary issues. In the latter capacity
he abided the decision of the court on the question of the lawfulness of
the fee agreement – the only subject matter of the case – but opposed it

on the basis that Mr Nash and Midmacor lacked locus standi to bring the
application. In argument before the high court and this court the argument
was expanded to include a contention that the application was an abuse of
the process of the court and should be dismissed on the grounds of undue
delay. Mr Mostert raised the same three points in his personal capacity,
save that the abuse of process argument was formulated as an application
of the ‘unclean hands’ doctrine. The FSB addressed only the merits of the
fee agreement.

[19]    No explanation was proffered by Mr Mostert for taking this
course and incurring the expense of two sets of two counsel, as well as
separate attorneys, one based in Johannesburg and one in Cape Town. In
my view, it was not only wasteful, but inappropriate. The fee agreement
was concluded between him in his capacity as curator and the FSB. In his
personal capacity he was not a party to it and once his firm was no longer
claiming a contingency fee, but conventional legal fees for services
rendered, subject to a cap, it had no interest in the matter. Why it was
necessary for them to become separately embroiled in the litigation is not
apparent, any more than it is apparent why he thought it inappropriate for
him in his capacity as curator to defend the agreement he had concluded
with the FSB in that capacity. The reality is that he did not abide the
decision of the court on the merits or the preliminary issues. If his
intention was to project himself as independent and above the fray the
attempt failed miserably, and brought to mind the aphorism ‘willing to
wound, but afraid to strike’.3 His two answering affidavits were replete
with allegations of misconduct and criminality against Mr Nash, who
responded with an equally bitter attack on Mr Mostert and the FSB

3 Alexander Pope’s ‘Portrait of Addison’ in his Satires, Epistle to Doctor Arbuthnot.

involving allegations of a corrupt relationship between them. This quite
unnecessarily increased the length of the papers and the costs of the
litigation.

Locus standi
[20] Under s 38 of the Constitution the grounds of standing in our law
have been considerably expanded and a broad approach is to be taken to
‘own interest’ standing under s 38(a).4 In approaching that question Mr
Nash’s contention that the fee agreement is unlawful must be assumed to
be correct.5 If it is correct then some amounts that have been paid to Mr
Mostert as curator may have to be disgorged and repaid to the Sable
Fund. Any resulting surplus accruing in the Sable Fund will fall to be
distributed in accordance with a scheme of apportionment of surplus
under s 15B of the PFA. As Mr Nash claims to have been a member of
the Sable Fund before the impugned transactions were undertaken and
Midmacor was the principal employer they would potentially at least be
entitled to benefit from such an apportionment. That seems to me to be
more than sufficient to give them own interest standing to pursue these
proceedings.

[21] Mr Mostert in his capacity as curator attacks the standing of Mr
Nash and Midmacor on the footing that the former’s membership of the
Sable Fund and the latter’s position as principal employer were part of the
scheme to ‘unlock’ the surplus in the fund. He then characterises their
respective positions as a charade. That overlooks two things. First, it
ignores the requirement that the allegations by the parties claiming

4 Giant Concerts CC v Rinaldo Investments (Pty) Ltd and Others [2012] ZACC 28; 2013 (3) BCLR
251 (CC) para 36.
5 Ibid paras 32 and 33.

standing must be accepted as correct, as standing is an issue to be
determined in limine before the merits are addressed.6  Second, it requires
us to enter upon and determine the merits of Mr Mostert’s contentions
about the nature of the arrangements and determine whether they were
unlawful, criminal or a charade. As noted in para 6 it is inappropriate for
us to do so. That is not the question before us, it is before another court
and it is impossible to resolve the factual disputes on these papers.

[22] An approach that asked whether Mr Nash and Midmacor had a
direct and substantial interest in the outcome of the litigation arrives at
the same result.7 The issue is the validity of the fee agreement between
the curator and the FSB. There are no trustees to protect the interests of
persons, such as pensioners, former members or a former principal
employer. The invalidity of the fee agreement is directed at recovering
funds for the Sable Fund that would in turn form part of a surplus in the
fund available for distribution in accordance with a surplus
apportionment exercise. That provides a sufficiently direct and substantial
interest in the outcome of the litigation to confer standing on Mr Nash
and Midmacor.

[23]  At the risk of piling Pelion upon Ossa there is a further ground for
recognising standing on the part of Mr Nash and Midmacor. It lies in
s 5(8) of the FI Act, which provides that:
‘Any person, on good cause shown, may make application to the court to set aside or
alter any decision made, or any action taken, by the curator or the registrar with

6 Ibid para 32.
7 United Watch and Diamond Co (Pty) Ltd and Others v Disa Hotels Ltd and Another 1972 (4) SA 409
(C) at 415A-416C.

regard to any matter arising out of, or in connection with, the control and management
or the business of an institution which has been place under curatorship.’
This section is clearly addressed to the question of standing and not
necessarily a possible review regime distinct from PAJA, an issue
debated in argument that we do not need to decide. It is couched in wide
language (‘any person’) and requires only that good cause be shown for
challenging a decision or action by either the curator or the registrar. The
conclusion of the fee agreement is an action by the curator and the FSB in
connection with the control and management of the Sable Fund. While
the section might not permit of a challenge by someone with no
connection whatsoever to a fund that can hardly be said of Mr Nash and
Midmacor. The claim that they lacked locus standi to bring these
proceedings must be rejected.

Unclean hands and abuse of process
[24] This argument depended entirely upon the contention that Mr Nash
was a party to a dishonest scheme to strip the Sable Fund of its surplus
and to do so by practising a fraud upon the Registrar of Pension Funds in
procuring the s 14 approval for the merger of the Sable Fund with the
Lifecare Fund. It was submitted that the high court was correct in
approaching the matter by holding that Mr Nash was guilty of the alleged
crimes on an application of the Plascon-Evans rule. I disagree and think
that the high court was wrong to adopt that approach. Were it correct a
respondent who made allegations of criminality against the applicant,
however hotly disputed, would be able to invoke those allegations in
support of the contention that the litigation constituted an abuse of
process and insist that the court determine the issue on their papers and
allegations. That cannot be. I have already given reasons for saying that it
is inappropriate for this court in this case to determine the lawfulness of

Mr Nash and Midmacor’s conduct or whether they are guilty of the
crimes Mr Mostert imputes to them. That is equally true for the purpose
of an argument that they are acting in a manner amounting to an abuse of
process.

[25] While courts are entitled to prevent any abuse of process it is a
power that should be sparingly exercised.8 The starting point is the
constitutional guarantee of the right of access to courts in s 34 of the
Constitution. That right is of cardinal importance for the adjudication of
justiciable disputes.9 But where the procedures of the court are being used
to achieve purposes for which they are not intended that will amount to
an abuse of process.10 The argument on behalf of Mr Mostert arises from
an email in which Mr Nash expressed the hope that this litigation, if
successful, would be a ‘dagger at their commercial heart’ referring to Mr
Mostert and his claims against Mr Nash. The sentiment being expressed
was that he hoped success in this litigation would deprive Mr Mostert of
the sinews of war to continue pursuing his claims against Mr Nash and
Midmacor.

[26] I could understand this argument if the litigation was wholly and
obviously frivolous or unsustainable in law,11 or the sole purpose in
launching it was to bring Mr Mostert to his financial knees by burdening
the proceedings with an enormous range of unnecessary interlocutory
procedures. But that is not the complaint, nor was it the tenor of Mr
Nash’s email. His view expressed in the same document was that ‘we

8 L. F. Boshoff Investments (Pty) Ltd v Cape Town Municipality; Cape Town Municipality v L. F.
Boshoff Investments (Pty) Ltd 1969 (2) SA 256 (C) at 275B-D (Boshoff Investments).
9 Beinash and Another v Ernst and Young and Others [1998] ZACC 19; 1999 (2) SA 116 (CC) para 17.
10 Beinash v Wixley [1997] ZASCA 32; 1997 (3) SA 721 (SCA) at 734F-H.
11 Boshoff Investments at 275B-C.

have a very good case’ and that if it were successful it would have the
financial consequence of rendering it difficult or impossible for Mr
Mostert to continue pursuing him. This is not a case such as Beinash v
Wixley where a subpoena was issued solely to harass the recipient. Mr
Nash has not been the one responsible for the papers in this appeal
running to nearly 900 pages. That was Mr Mostert through his adoption
of separate representation for himself personally and in his capacity as
curator, with a resultant duplication of affidavits. Throughout, Mr Nash’s
main purpose has been to set aside the fee agreement between Mr Mostert
and the FSB governing his fees as curator of the Sable Fund. Only
success in that perfectly proper litigious endeavour may bring with it the
financial consequences for which he hopes. The contention that the
application should be dismissed as an abuse of process, or as being
tainted by ‘unclean hands’ must be rejected.

Delay
[27] This argument was based on the contention that the conclusion of
the fee agreement constituted administrative action and these proceedings
were a review of that action. That was a strange contention because,
speaking in his personal capacity, Mr Mostert had admitted in his
answering affidavit that the conclusion of the remuneration agreement did
not constitute administrative action, and the FSB adopted the same
stance. It was accordingly accepted by all parties on the affidavits that
this was not administrative action.

[28]  In argument a different stance was adopted. It was submitted that
the conclusion of the fee agreement between Mr Mostert and the FSB

constituted administrative action by an organ of state. A challenge to the
lawfulness of the agreement had to be made in terms of s 6(2) of PAJA.12
By virtue of s 7(1) of PAJA the application needed to be brought within
180 days of Mr Nash becoming aware of the allegedly unlawful
administrative action. He had obtained a copy of all the documents
constituting the fee agreement on 13 January 2011 in response to a
subpoena served in the course of his criminal trial. This application was
launched on 11 July 2013 some 30 months later and considerably out of
time so far as the 180 day period prescribed by PAJA was concerned.
Unless that period could be extended in the interests of justice in terms of
s 9(1)(b), read with s 9(2), of PAJA the court was precluded from
entering into the merits of the review13 and, so it was submitted, there
were no grounds for extending the period of 180 days. As an alternative it
was submitted that even if the proceedings constituted a review outside
the purview of PAJA under the principle of legality the broad common
law delay rule applied14 and there was no reason to overlook the delay.

[29]  On behalf of Mr Nash it was submitted that we were not
concerned with administrative action or a review, whether under PAJA or
the principle of legality, but with whether the fee agreement concluded
between Mr Mostert and the FSB complied with the requirements of
para 9 of the order appointing Mr Mostert as provisional curator of the
Sable Fund. If it did that was an end to the matter. If it did not then it was
an arrangement falling outside the ambit of that order and appropriate

12 The Promotion of Administrative Justice Act 3 of 2000.
13 Opposition to Urban Tolling Alliance and Others v The South African National Roads Agency Ltd
and Others [2013] ZASCA 148; [2013] 4 All SA 639 (SCA) paras 22, 41 and 43.
14 Khumalo and Another v MEC for Education, KwaZulu-Natal [2013] ZACC 49; 2014 (5) SA 579
(CC) paras 45-48; State Information Technology Agency SOC Ltd v Gijima Holding (Pty) Ltd [2017]
ZACC 40, 2018 (2) SA 23 (CC) paras 43 to 50.

declaratory relief should be granted together with any relief necessarily
consequential upon that declaration.

[30] It is correct that the FSB is an organ of state as defined in s 239 of
the Constitution. For present purposes I also accept that in general the
conclusion of a contract for the procurement of goods or services by an
organ of state constitutes administrative action.15 My principal difficulty
lies with the proposition that the fee agreement between Mr Mostert and
the FSB was such a contract. Mr Mostert is the curator of the Sable Fund
because he was appointed as such by the high court. His entitlement to
remuneration for his services arose from the terms of that order, which
the court was empowered to make in terms of s 5(5)(c) of the FI Act. The
only function of the FSB was to agree with him the basis for his periodic
remuneration in accordance with the ‘norms of the attorneys’ profession’.
That agreement was not one to procure his services on behalf of the FSB
or any other organ of state. He was to render services as curator of the
Sable Fund because the high court appointed him to that position, not in
terms of a contract with the FSB.

[31] This accords with the FSB’s own approach as reflected in an
answer it prepared for the Minister of Finance in response to a
parliamentary question posed and answered on 18 February 2011 in
relation to the appointment of curators to pension funds. The answer
reads:

15 State Information Technology Agency SOC Ltd v Gijima Holding (Pty) Ltd [2016] ZASCA 143;
2017 (2) SA 63 (SCA) para 16. This proposition was neither questioned nor endorsed in the subsequent
appeal to the Constitutional Court and its wide terms may require some qualification in the light, for
example, of decisions of that court holding that the relationship between organs of state and their
employees does not generally constitute administrative action.

‘Curators are appointed by a Court under the provisions of section 5 of the Financial
Institutions (Protection of Funds) Act, No 28 of 2001, on application by the Executive
Officer of the FSB (the Registrar). …
The provisions of the Financial Institutions Act do not specify any requirement for the
identification of curators. However, although not obliged to accept or take names of
possible curators proposed by any party, the court normally allows the FSB to propose
names to consider for appointment when an application for curatorship is brought
before the High Court. Hence the Registrar conventionally identifies and nominates
proposed curators for consideration and appointment by the Court. In making
application for the appointment of curators, the Registrar attaches the proposed
individuals’ CV’s to the Court papers and the Court has to be satisfied that they are
suitable candidates.
The remedy of curatorship is a regulatory tool at the disposal of the Registrar. The
appointment of a curator is by the court, and not an outsourcing of a function or
service which would require a tender process.’  (Emphasis added.)

[32] In the light of this answer it is no surprise that the FSB has not
aligned itself with the objection that these proceedings are review
proceedings under PAJA or the principle of legality. It has quite properly
contented itself with defending the conclusion of the fee agreement as
having been concluded in terms of para 9 of the court order appointing
Mr Mostert as curator of the Sable Fund.

[33] The fee agreement was not a contract. A contract is an agreement
arising at the conclusion of negotiations between the parties entered into
with the intention of creating contractual relations. It is often said to
involve an offer and an acceptance with the intention of creating legal
obligations. Not every agreement is a contract. Only those concluded with
the animus contrahendi, the intention to create a contractual relationship,
are contracts. It is incorrect to assume that when the FSB and Mr Mostert
agreed the basis upon which Mr Mostert would charge fees, purporting to

act in terms of the court order, their agreement was a contract. The
subsequent conclusion of the MOU made this point even more clearly.
Not only did it describe itself as an understanding not an agreement, but it
recorded in clause A of the preamble that the remuneration of the curators
was determined in terms of the relevant curatorship orders. The failure to
appreciate this is the first error underlying the contention that the
conclusion of the agreement was administrative action. As the FSB
correctly said, in agreeing the basis upon which Mr Mostert could charge
fees it was not concluding a contract for his services, but seeking to
comply with the court order. This does not involve a conjuring trick or a
work of magic, but an application of basic legal principles.

[34] The second error is to treat the court ordained means for
determining Mr Mostert’s remuneration as an exercise of public power or
the performance of a public function in taking a decision of an
administrative nature in terms of any legislation.16 The FSB was acting in
terms of the court order, not in terms of any legislation. It was not
performing any function in the administration of the state. Had no
agreement been reached Mr Mostert and the FSB would have needed to
go back to the court to ask it to resolve their differences and itself fix the
remuneration. Mr Mostert’s position as provisional curator would not
have altered. Nor would his entitlement to be remunerated for performing
that function have been altered or ceased. If the remuneration so
determined was unsatisfactory to Mr Mostert, he could have applied to
the court to be released from his role as curator. That would not have

16 These are essential requirements for action to constitute administrative action in terms of PAJA. See
Minister of Defence and Military Veterans v Motau and Others [2014] ZACC 18; 2014 (5) SA 69 (CC)
(Motau) para 33.

involved any breach of contract for the simple reason that he was not a
party to any contract with the FSB.

[35] Properly viewed it is apparent that the court was the arbiter of
whether the fee agreement complied with its order. The FSB accepted
that the court could vary any agreement if it transpired that its terms were
inappropriate or it could fix the remuneration itself. There were examples
in the papers of its doing so. If it came to the court’s attention that the
agreement concluded between Mr Mostert and the FSB fell outside the
parameters it had set, it could intervene to give effect to its own order.
That flows from the rule of law and the fact that in terms of s 165(5) of
the Constitution court orders must be obeyed until set aside.17 It is
common cause between the parties that the court order meant that Mr
Mostert was only entitled to a reasonable fee. If the court discovered that
the remuneration agreed between Mr Mostert and the FSB was grossly
exorbitant, it would clearly have been entitled, and in my view obliged, to
intervene mero motu. The suggestion that its hands would be tied unless
some party were to bring review proceedings does not hold water. It is
important to recognise this because, were it otherwise, there might be no
means whereby the court could secure compliance with its order, bearing
in mind that the agreement is one between the curator and the FSB and
the curator’s subsequent actions are subject to external supervision only
by the FSB.

[36] For that reason alone the complaint of delay must be rejected. But
even had I accepted that these proceedings are properly a review under

17 Department of Transport and Others v Tasima (Pty) Ltd [2016] ZACC 39; 2017 (2) SA 622 (CC)
paras 177-183.

PAJA or the principle of legality, I would without hesitation have
extended the time period of 180 days18 or overlooked the delay, as the
case might be. I accept that Mr Nash gives little or no explanation for
waiting for over two years in order to bring these proceedings, but there
are obvious mitigating factors. First and foremost the documents only
came to hand as a result of a subpoena addressed to the FSB in the course
of the criminal trial in which he and Midmacor are the accused. It is
understandable that their relevance would initially be considered in the
light of their need to defend themselves there. Indeed the record shows
that documents relating to the FSB nominating Mr Mostert for
appointment as curator of another fund formed the subject of cross-
examination of the Registrar of Pension Funds at the criminal trial and
resulted in the disquieting answer that he invoked his privilege against
self-incrimination.

[37] Second, it is apparent that Mr Mostert has received very substantial
amounts pursuant to the arrangement both in respect of the Sable Fund
and in respect of ten other funds, similarly situated. This emerges from
the answer by the Minister of Finance to another parliamentary question
on 18 February 2011. That revealed that Mr Mostert had earned some
R23.6 million as curator of the Sable Fund in addition to there having
been legal fees and disbursements of over R7 million of which a
reasonable proportion must represent fees paid to his law firm. Taking all
10 funds together he had recovered nearly R946 million and fees as
curator or liquidator amounted to R118.5 million. Legal fees and
disbursements were over R45.5 million. These are very substantial sums
of money and substantially reduced the amounts recovered for the benefit

18 Such an order was sought by Mr Nash and Midmacor ‘in so far as it may be necessary’.

of pensioners and members of these funds.19 If the fee agreements
concluded by Mr Mostert and the FSB were not in accordance with the
court orders under which he was appointed, it seems to me a matter of
public importance that a court determine this, so that the interests of past
members of funds and pensioners are protected.20 That is so
notwithstanding the fact that according to the FSB they have already been
the beneficiaries of the recoveries by the curators to the tune of some
R750 million.

[38] Third, that view is reinforced by the approach that the FSB has
taken of addressing only the challenge to the fee agreement and doing so
on its merits. It is consistent with the view of the Executive Officer of the
FSB, Mr Tshidi that curators are officers of the court by which they are
appointed. As an organ of state that is likely to be confronted with similar
situations in the future, the FSB is naturally anxious that it should know
once and for all whether a fee arrangement of the type it concluded with
Mr Mostert and has apparently concluded in other cases is legitimate and,
if so, within what parameters.

[39] Fourth, I am unconvinced that the setting aside of the fee
agreement would have the cataclysmic effects on the funds suggested by
Mr Mostert when wearing his curator’s hat. He painted a gloomy picture
where all financial statements and reports would have to be retracted and
re-audited to determine the surplus assets for distribution. The

19 Approximately R395 million of the recoveries has been allocated to three funds where Mr Mostert is
a joint curator with a Mr Wandrag and the curators’ fees in respect of these three funds, amounting to
nearly R90 million were calculated at a rate of 25% of recoveries in accordance with a court order
relating to those funds alone. This included the legal fees due to the two curators’ law firms for legal
work.
20 Oudekraal Estates (Pty) Ltd v City of Cape Town and Others [2009] ZASCA 85; 2010 (1) SA 333
(SCA) especially paras 81-82; South African National Roads Agency v City of Cape Town [2016]
ZASCA 122; 2017 (1) SA 468 (SCA) paras 107 and 108.

determination of a reasonable fee for the work to date would have to be
recalculated on an hourly basis for a senior attorney which would be
impossible because time-billing was not generated for the curatorship. A
delay of several years was foreshadowed with some 13 000 former
members of funds being prejudiced and having their benefits suspended.
Mr Mostert even went so far as to suggest that there might be claims for
refunds of overpaid surplus.

[40] My scepticism over the weight to be attached to these allegations is
considerable. Mr Mostert said that the court must exercise its remedial
powers in order to prevent prejudice to the Sable Fund and its
beneficiaries. Quite so, but then in the next breath he said that the court
must ensure ‘that the benefits of the fee agreement to the Fund are
maintained’. It is quite unclear what he meant by this. He is himself the
beneficiary of the fee agreement not the Sable Fund. These are amounts
forming part of the recoveries made by him as curator that have been paid
to him as curator. If they were not properly paid, because the agreement
was unlawful, so that he has to repay amounts to the fund that will be a
benefit enuring to the former members of the fund, not a disadvantage.

[41] Nor can I see that the logistical nightmare scenario that Mr Mostert
tries to paint will arise in the event that the fee agreement is held to be
unlawful. That will not disentitle him to a reasonable fee for his services
as curator determined in accordance with the norms of the attorneys’
profession. Such a fee would need to be determined as between him and
the FSB in an open and transparent way and approved by the court that
appointed him. If he was overpaid under the current fee agreement there
would be an obligation to refund some amount to the Sable Fund and
potentially to other funds similarly situated. Any amount so repaid would

then be available to be distributed to former members of the fund by way
of a supplementary apportionment exercise.

[42] None of this should involve the logistical problems that someone
with his claimed experience and knowledge of the field would not be able
to cope with. Insofar as he says that it would be impossible for another
curator to be appointed at this stage of the curatorship, that hardly seems
relevant as the decision over the lawfulness of the fee agreement would
not impinge on his appointment as curator or require the appointment of a
new curator. In any event the same problem would arise were he to die, or
become unable to pursue his duties as curator, or decide to retire. It is a
possibility ever present in this situation where the curator is not a partner
in a large organisation or firm, but an attorney in a small firm with only
one other partner and one professional assistant.

[43] Lastly under this head it is significant that the FSB does not raise
similar concerns if the agreement is set aside. Neither in the affidavit
deposed to by the Executive Officer of the FSB, nor in the heads of
argument on behalf of the FSB, is there any suggestion that the effect of
setting aside the fee agreement would lead to any seriously detrimental
consequences for the Sable Fund and its former members. The general
information circulars to the members of affected funds issued by the FSB
in November 2011 and October 2012 make it clear that monies already
distributed in terms of surplus apportionment exercises have been
lawfully distributed and the beneficiaries would not be under any
obligation to refund them.

[44]  Cumulatively, even if the delay rule were applicable, either under
PAJA or under the common law, those factors outweigh the impact of the

delay and justify an extension of time under s 9 of PAJA or that the delay
be overlooked. There is no suggestion, beyond the prospect of Mr
Mostert being required to repay to the Sable Fund some amounts received
by him as fees, of anyone being prejudiced by the delay between January
2011 and July 2013, when these proceedings were commenced. Finally,
Mr Mostert has not approached the matter with any urgency. An
application launched in July 2013 was met with two answering affidavits
deposed to on 4 May 2016, nearly three years later. In the meantime he
pursued a range of other litigation against Mr Nash and Midmacor. The
preliminary objections based on delay must be dismissed.

The merits
[45]   Turning to the merits all parties (and my colleague) are agreed
that the source of the fee agreement is the requirement in para 9 of the
order appointing Mr Mostert as curator that he would be entitled to
‘periodic remuneration in accordance with the norms of the attorneys’
profession’ as agreed between him and the FSB. When the provisional
curatorship order was made final and the curator’s powers expanded,
further provision was made empowering him to bring about a voluntary
dissolution of the fund. In that event his remuneration was to be subject to
the provisions of s 28A of the PFA dealing with the remuneration of a
liquidator. That section provides for a very different fee regime to that in
the fee agreement. It reads:
‘(1)  The registrar shall prescribe the services for which remuneration shall be payable
to the liquidator of a fund which is terminated or dissolved voluntarily, whether
wholly or in part, and prescribe the tariff of remuneration in respect of those services.
(2)  Notwithstanding subsection (1) the registrar may reduce or increase the
liquidator’s remuneration if satisfied on reasonable grounds that there is good reason
for doing so, and the registrar may disallow the liquidator’s remuneration because of

any failure or delay to carry out the liquidator’s duties or to carry them out properly
and effectively.’

[46] Mr Nash expressed the objection to the fee agreement in the
following way in his founding affidavit:
‘This is an application for the setting aside of certain unlawful agreements …
purportedly concluded, inter alia, between the curator of the Sable Fund (Mostert) and
the FSB, and ancillary relief to enforce the provisions of prayer 9 of the order by
Poswa J … dated 20 April 2006 (“SJN1”). The unlawfulness of the agreements arises,
amongst others, from non-compliance with paragraph 9 of “SJN 1” [the court order]
read with section 5(5) of the Financial Institutions (Investment of Funds) Act … and
the Contingency Fees Act, [66 of] 1997 [CFA].’
The complaint was thus that the fee agreement did not comply with the
requirements of the court order when read in the light of the two
mentioned statutes. There is an ambiguity about this. It is not clear
whether he was saying that the unlawfulness lay in non-compliance with
the court order, read in the light of the FI Act, with non-compliance with
the CFA providing a separate ground of unlawfulness, or whether he was
saying that the court order needed to be read in the light of both these
statutes. That will need to be addressed in due course.

Public policy
[47] The high court upheld Mr Nash’s attack on the fee agreement, but
on the grounds of an extension of public policy and not on the basis
advanced by him. The judge held that the curator’s remuneration had to
be agreed in accordance with the norms of the attorneys’ profession. He
recognised that the main activity of the curator, at least at the outset,
would be to frame demands upon persons believed to be liable to the fund
and to prosecute legal proceedings if his demands were not met. To that
end he was empowered to employ counsel and attorneys.

[48] Tuchten J then considered the cases that are authority for the
proposition that at common law agreements between a legal practitioner
and the client that the legal practitioner would be remunerated out of the
proceeds of the litigation were contrary to public policy, unenforceable
and unlawful.21 He rejected a submission that these cases applied when an
attorney undertook non-litigious work as opposed to litigation on behalf
of a client and said:
‘I do not read the cases to say this. To my mind the position is rather that the question
whether contingency fee agreements between legal practitioner and client in non-
litigious matters were permitted at common law has not yet been expressly decided.’

[49] Tuchten J analysed the reasons underpinning this prohibition at
common law and concluded that:
‘With all this in mind, there can be no justification for allowing legal practitioners to
conclude contingency fee agreements in relation to non-litigious work. … I find that
contingency fee agreements in relation to non-litigious work are against public policy
for broadly the same reasons that such agreements are contrary to public policy in
relation to litigious work.’
Having reached this conclusion he engaged in a brief consideration of the
provisions of the CFA and, while accepting that on its terms it did not
apply to the work of a curator, held that there was no reason why it did
not create a norm of the attorneys’ profession and that the parties could
have concluded a remuneration agreement that complied in substance
with the CFA and thus brought themselves within that norm.

21 Price Waterhouse Coopers Inc and Others v National Potato Co-operative Ltd [2004] ZASCA 64;
2004 (6) SA 66 (SCA); South African Association of Personal Injury Lawyers v Minister of Justice and
Constitutional Development [2013] ZAGPPHC 34; 2013 (2) SA 583 (GSJ) and Ronald Bobroff and
Partners Inc v De La Guerre [2014] ZACC 2; 2014 (3) SA 134 (CC).

[50]   Wisely in my view, counsel for Mr Nash did not seek to support
this line of reasoning. Whether described as champerty, maintenance or a
pacta de quota litis, the arrangements between legal representatives and
their clients that have over the years been condemned as contrary to
public policy have been those where the legal representative or a third
party was remunerated out of, or took a share of, the proceeds of
litigation. The public policy reasons that have informed this
condemnation relate to the undesirability of stirring up litigation and, in
regard to legal representatives, the undesirability of the lawyer having a
personal financial interest in the outcome of the litigation. In that case the
fear is that the lawyer will cease to be an impartial adviser to the client
and may be tempted to depart in various ways from the strict path of
rectitude in the conduct of the litigation.

[51] None of this has any direct bearing on the situation with which we
are concerned, much less on situations where attorneys negotiate an
agreement on behalf of a client; advise on the structure of a commercial
transaction; obtain a valuable licence on behalf of a client; or act and
provide advice in relation to the many and varied areas of life on which
people may seek their assistance. How public policy should play out in
those areas is not immediately apparent, especially when it is recognised
that public policy is now informed by the norms and values in the
Constitution and particularly the Bill of Rights.

[52] The judge was not asked by Mr Nash to engage in such a dramatic
extension of public policy and there was no material before him that
justified the extension. If the common law prohibition on financial
arrangements between attorney and client that involve the attorney being
remunerated with a share of the proceeds of litigation is to be extended to

other situations, that should be done on a case by case basis after a careful
analysis of all the interests involved, the likelihood of this conducing to
conduct on the part of the attorney that is unacceptable and the impact of
constitutional values on transactions of the type under consideration. For
those reasons the approach of the judge in the high court cannot be
supported.

The CFA
[53] The argument on behalf of Mr Nash was more nuanced. It took as
its starting point the proposition that the fee agreement concluded
between Mr Mostert and the FSB needed to be in accordance with the
norms of the attorneys’ profession. It contended that on a proper analysis
of the role Mr Mostert was to play as curator, bearing in mind that he
would use his own firm to perform legal work, he was in substance an
attorney pursuing the recovery of amounts for the Sable Fund by way of
demands and, if necessary, litigation. In any litigation he would be both
the de facto claimant as curator of the fund and the lawyer acting for the
fund. He would personally provide the means to litigate and take the risk
of the litigation not succeeding. The glittering prize at the end of the day
was the prospect of a substantial share in the proceeds of that litigation.
Any distinction between his situation and that of an attorney conducting
litigation in terms of a champertous agreement or a pactum de quotis litis,
to the extent that those may encompass slightly different arrangements,
was illusory. His situation as curator should be treated as being identical
with that of an attorney acting for a client in the position of the Sable
Fund. Such an arrangement was not only unlawful, but also incompatible
with the norms of the attorneys’ profession.

[54] Recognising that the CFA introduced an exception to this situation
in permitting attorneys to conduct litigation on behalf of clients under a
contingency fee agreement, it was submitted that the exception was
limited. In terms of s 2 of the CFA attorneys are now permitted to
conduct litigation on a contingency basis in the sense of only having a
claim for payment of professional fees if the action or proceeding
succeeds. If the claim succeeds they may then recover their fees from
their client. They may also agree with their client to conduct the litigation
on the basis that they will not charge their ordinary fees, but will, if the
claim succeeds to an agreed extent, charge an enhanced fee. Such an
enhanced fee is subject to two restrictions. It may not be greater than
double their ordinary fee and overall it may not exceed 25 per cent of the
amount recovered by the client. Furthermore the contingency fee
agreement must be in writing and conform to specific formal
requirements set out in s 3 of the CFA. Any non-compliance with, or
departure from, the requirements of the CFA, either as to substance or as
to form, renders the contingency fee agreement invalid and
unenforceable.22

[55] Building upon this, it was contended that the norms of the
attorneys’ profession had been altered by the CFA, but only to a limited
degree, and if Mr Mostert wished to conclude a fee agreement entitling
him to a share in the amounts recovered on behalf of the Sable Fund he
needed to do so in a way that in substance complied with the provisions

22 Ronald Bobroff and Partners Inc v De La Guerre and Another [2014] ZACC 2; 2014 (3) SA 134
(CC); Fluxmans Inc v Levenson 2007 (2) SA 520 (SCA). See also De La Guerre v Ronald Bobroff and
Partners Inc and Others [2013] ZAGPPHC 33 para 13.

of the CFA. Counsel summarised the argument in the heads in the
following terms:
‘The respondents contend that (i) the Poswa Order incorporates the CFA as part of the
norms of the attorneys’ profession, (ii) any contingency agreement that does not
comply with the CFA is illegal, (iii) the contingency fee agreement does not comply
with the provisions of the CFA, and consequently the contingency fee agreements is
illegal.’

[56] Two flaws in this argument emerged in the course of argument and
were, as I understood it, accepted by counsel. The first related to the
endeavour to equate Mr Mostert with an attorney conducting litigation for
a party. That was not his role and there was no attorney client relationship
between him and the FSB. An attorney conducts litigation for a client in
terms of the mandate given by the client. Mr Mostert had no such
mandate from the Sable Fund or the FSB. He was a court appointed
curator charged with taking control of the fund and administering it.
Others would conduct litigation and he was authorised to employ others
for that purpose. His role was to investigate what had happened, with the
advantage of the report on the investigation already undertaken by the
FSB; to take decisions on how to proceed; to make demand on parties he
identified as being responsible to reimburse or compensate the fund for
any amounts; to negotiate if possible with those parties to make a
recovery for the benefit of the fund;23 to institute proceedings if he
thought it appropriate; to invest and care for funds recovered and to
prepare and implement schemes for the appropriation of any surplus
arising in the fund in consequence of his endeavours. The endeavour to

23 The papers reveal that he was able to conclude a settlement without admission of liability with one of
the pension fund administrators involved in the transactions arranged by Mr Ghavalas in an amount of
R325 million.

equate his role with that of a legal representative acting for a share in the
proceeds of litigation was misplaced.

[57] The second flaw lay with the CFA itself and the suggestion that it
established a new norm for the legal profession permitting the charging of
contingency fees, but defining and restricting the parameters within
which that could be done. Here the difficulty lies in the fact that the CFA
is specific in providing for contingency fees for legal representatives in
the performance of their professional obligations. Mr Mostert was not
acting as a legal practitioner and was not engaged in proceedings as
defined in the CFA. His responsibilities as curator involved the
management and administration of the Sable Fund including the
apportionment and distribution of any surplus arising from his
endeavours to recover amounts from third parties. The CFA does not deal
with that situation and the strait jacket that the argument sought to put
around the fee arrangements for the curator did not fit and cannot be
made to fit. One may not take a statute that expressly deals with one set
of circumstances and apply it in a wholly different context to which it is
inapplicable.

Non-compliance with para 9 of the court order
[58] Accepting these difficulties with the argument as articulated in the
heads of argument, counsel narrowed its scope in the following way.
Paragraph 9 of the provisional curatorship order remained the starting
point. It provided that the curator would be entitled to periodic
remuneration in accordance with the norms of the attorneys’ profession.
This expression fell to be construed in the same way as any other court

order.24 It meant in the first instance that the fees charged by the curator
should be subject to the ordinary professional constraints of the
profession. In practice this meant that fees had to be reasonable, or as
counsel for Mr Mostert put it ‘reasonable, appropriate and not excessive’.
In the second place it meant that the fees agreed upon should be
determined in the ordinary and conventional way in which attorneys
charge for their services and any departure from this was not permitted by
the terms of the order.

[59] Counsel contended that the fee agreement did not comply with the
second requirement, in that to charge a fee on the basis of a percentage of
the amount recovered on behalf of a client is not the ordinary and
conventional
way
in
which
attorneys’
fees
are
determined.
Conventionally attorneys charge for their professional services on a time
basis calculated at an hourly rate, the amount of which will depend upon
the skill, experience and seniority of the attorney, the nature and
complexity of the work and its importance to the client and factors of that
nature. While the work of the curator was different from the conventional
role of an attorney in litigation, there were substantial similarities insofar
as the recovery of amounts on behalf of the Sable Fund was concerned.
The norm in regard to litigation was clear, namely that charging on the
basis of being paid a percentage of the amount recovered was not
permissible save within the narrow constraints provided by the CFA. For
those reasons the fee agreement was not one contemplated or permitted
by the court order. Had the judge who granted it (Poswa J) been asked
whether his order contemplated that the curator’s fees would be

24 Firestone South Africa (Pty) ltd v Gentiruco A.G. 1977 (4) SA 298 (A) at 304D-H.

determined as a percentage of the total amount recovered, it was
submitted that he would have answered in the negative.

[60] Before the merits of this argument can be addressed it is necessary
to decide whether it was open to counsel to advance the argument in this
way. What this boils down to is whether the argument that the fee
agreement did not comply with the court order was so inextricably linked
to the contention that it had to conform to the requirements of the CFA
that it cannot be advanced in a way that divorces it from the CFA. It had
been advanced in the heads of argument in the passage quoted in para 55
on the footing that the CFA was one of the norms of the attorneys’
profession and any contingency agreement not complying with the CFA
was illegal. Was it open to Mr Nash now to contend that the agreement
did not comply with the norms of the attorneys’ profession, without tying
the argument so directly to the CFA? I should make it clear that this
argument was not that the fees charged were unreasonable. Compliance
with the court order was the issue.

[61]  This raised two questions. Was the argument one that was open on
the papers before the court and, if so, would the appellants be prejudiced
in any way by permitting it to be argued. Subject to the first of those
receiving an affirmative answer and the second a negative answer it was
open to counsel to advance the argument.25 This court has repeatedly held
that it is open to parties to argue fresh points on appeal, provided that
involves no unfairness to the party against whom the point is directed.26

25 CUSA v Tao Ying Metal Industries and Others [2008] ZACC 15; 2009 (2) SA 204 (CC) para 68;
Fischer and Another v Ramahlele and Another [2014] ZASCA 88; 2014 (4) SA 614 (SCA) paras 13
and 14.
26 Paddock Motors (Pty) Ltd v Igesund 1976 (3) SA 16 (A) at 23D-G is the leading authority.

[62] The passage from the founding affidavit already quoted in para 46
was ambiguous in saying that:
‘The unlawfulness of the agreements arises, amongst others, from non-compliance
with paragraph 9 of “SJN 1” [the court order] read with section 5(5) of the Financial
Institutions (Investment of Funds) Act … and the Contingency Fees Act, 1997.’
The important question is whether Mr Nash complained of the fee
agreement’s unlawfulness on the simple ground of non-compliance with
para 9 of the court order, or was the argument restricted to unlawfulness
flowing from non-compliance with the CFA. In developing it in his
founding affidavit he drew attention to the fact that in relation to another
pension fund a court order was obtained that specifically provided for the
curators to receive a fee calculated as a percentage of the amounts
recovered. Mr Nash commented that this demonstrated that Mr Mostert
and the FSB knew that such a fee was not one permitted by the norms of
the attorneys’ profession.

[63] Mr Nash said specifically that the court order, based on s 5(5) of
the FI Act ‘did not (and does not) authorise payment of any contingency
fee’. He repeated this at a later stage of the founding affidavit when
summarising his contentions regarding the lawfulness of the fee
agreement, saying:
‘Fifthly, any purported agreement in [the letter quoted in para 14] between the FSB
and Mostert as curator does not comply with paragraph 9 of the Poswa order. The
yardstick is the attorneys’ profession.’
He went on to say that ‘in any event’ the CFA capped a success fee.

[64] There is no doubt that Mr Nash launched a general assault on the
validity of the fee agreement. To that end he prayed in aid the
Constitution, the principle of legality, the CFA, the common law and the

terms of the curatorship order. But in the face of the statements that ‘all
contingency fees agreements contravene paragraph 9 of the Poswa order’
and the transaction itself ‘contravenes the law – the CFA, the common
law and the Poswa order’, it seems to me impossible for Mr Mostert and
the FSB to contend that they were taken by surprise by the contention that
the fee agreement was not in conformity with the provisions of para 9 of
the order because it was not in accordance with the norms of the
attorneys’ profession. Nor did they do so. Mr Tshidi, who deposed to the
answering affidavit on behalf of the FSB, specifically argued that the fee
agreement was a permissible one within the broad guideline provided by
the norms of the attorneys’ profession.

[65] As to the content of the norms of the attorneys’ profession these
were canvassed in some detail in the affidavit of Mr Mostert and that of
Mr Tshidi. Both had every opportunity to show where those norms
operated to permit a fee agreement based on payment of a percentage of
the amounts recovered. Finally, it was not suggested by any of the three
teams of counsel who appeared before us representing Mr Mostert and
the FSB that they were prejudiced by this argument or that it was
impermissible for it to be advanced on the papers as they stood. It was
therefore permissible for counsel to advance his argument on behalf of
Mr Nash and Midmacor on this revised basis. I turn then to consider the
argument on its merits.

[66]   The Executive Officer of the FSB, Mr Tshidi, explained that at
the provisional stage of a curatorship the court will state a basis for the
curator’s remuneration and the details will then be agreed between the
curator and the FSB ‘within the ambit of the Order’. Over the years courts
have approved different bases for remuneration. The usual basis is the

norms of the curator’s profession. Where the curatorship is no more than
a run-off of the entity’s business and a sale of its assets, the same basis as
a liquidator, that is, an ad valorem or commission basis, is appropriate.
Sometimes a monthly salary or hourly fee is stipulated and at others the
tariff of the Auditor-General for outsourced auditing work by private
auditors.

[67] In one instance (the Datakor case), in relation to three pension
funds, the court approved the charging of a contingency fee as a
percentage of amounts recovered for the funds. Originally the curators
had been appointed on the usual basis of receiving fees in accordance
with the norms of the attorneys’ profession. The order providing for them
to be paid on a contingency basis altered this. The interesting feature of
this arrangement, which also involved Mr Mostert, is that it was not
simply an agreement concluded under the rubric of ‘the norms of the
attorneys’ profession’, but was concluded and then endorsed by the court
in an application brought by the FSB to alter the original basis for
remuneration.

[68] The order in the Datakor case provided that the curators were to be
remunerated at the hourly rates agreed between them and the FSB,
subject to a cap, for work done prior to its being granted. This suggests
that the arrangement for the curators to be paid fees based on a
percentage of the recoveries on behalf of the three funds was regarded as
a special arrangement requiring the consent of the court, rather than an
arrangement in accordance with the norms of the attorneys’ profession.

[69] In the answering affidavit the FSB described it as a special
arrangement outside the norms of the attorneys’ profession. Dealing with
the present case Mr Tshidi said:
‘In fact this type of arrangement has its origins in an order of court which was
compelled by a specific situation which did not allow the curators in that matter [both
attorneys] to be remunerated on the usual basis according to the norms of their
profession.’ (Emphasis added.)
Mr Tshidi added that the order in the Datakor case had been the subject of
much controversy and criticism, but that it had not been challenged. He
recorded that the order had subsequently been amended to cap the
remuneration at 25 per cent of the recoveries up to R140 million and
thereafter at a rate of 16,66 per cent in anticipation of the funds’
liquidation. Even the latter more limited fee is greater than that
conventionally earned by liquidators.

[70] I have no difficulty with the notion that in circumstances such as
those that arose in both the Datakor case and the present case there might
be good reasons for a curator to be remunerated on a basis other than the
norm, including a fee calculated as a percentage of the amount recovered
on behalf of the fund. For the reasons advanced by both the FSB and Mr
Mostert that may be the only feasible way in which to undertake the
curatorship with an appropriately skilled curator. Nor would I regard it as
per se unlawful.27 Thus far my colleague and I arrive at the same
conclusion. But that is not the sole issue in this case, and by the end of
argument counsel for Mr Nash had accepted that the law did not rule out
contingency fee arrangements in all circumstances. What remained

27 Incorporated Law Society of Natal v J.V. and F.M. Hiller (1913) 34 NPD 237 at 244 provides an
example of a fee being charged on an unconventional basis, but it does not mean that such a fee is one
in accordance with the norms of the attorneys’ profession. It merely means that the conclusion of such
an agreement in relation to fees is not per se unprofessional conduct by the attorney.

outstanding was whether an arrangement of that sort, which is the
arrangement with which we are confronted, was one providing for
periodical remuneration in accordance with the norms of the attorneys’
profession. In other words, did it comply with the terms of para 9 of the
provisional curatorship order? According to the evidence of the FSB the
answer is ‘No’. It is an arrangement that can be authorised by a court in
the exercise of its powers under s 5(5)(c) of the FI Act, as was done in the
Datakor case, but that is an entirely different matter.

[71] Mr Mostert’s evidence supported the view of the FSB. In his
answering affidavit in his personal capacity and on behalf of his firm he
dealt in some detail with the remuneration agreements. He referred
particularly to an affidavit Mr Tshidi had deposed to in the application to
authorise the fees in the Datakor case and said that this disclosed, (as did
his affidavit in this case), that:
‘… the general rules and practices concerning the remuneration of curators and
funding of curatorship expenses could not be followed.’
Such an arrangement was legally permissible and the court had the power
– presumably in terms of s 5(5)(c) of the FI Act – ‘to endorse such an
arrangement’.

[72] Dealing with the conventional arrangement, when an attorney was
appointed as curator subject to receiving periodical remuneration in
accordance with the norms of the attorneys’ profession, Mr Mostert
explained that:
‘… in the ordinary course, in implementing the court order, I as curator would have
received an hourly fee at the rate of a senior attorney with more than 40 years
experience …’

He then dealt with the difficulties confronting the Sable Fund leading up
to the conclusion of the fee agreement and explained that this was
concluded:
‘… given the peculiar circumstances applicable to the Sable Fund whereby the
mechanism provided for in the original court order could not be implemented as there
were no monies to do so in the Fund.’ (Emphasis added.)

[73] The picture that emerges from these affidavits is that an
arrangement in terms of which a curator is to be remunerated on a
periodical basis in accordance with the norms of the attorneys’ profession
is one under which the attorney is paid a fee calculated at an hourly rate,
plus an amount to cover any disbursements. This accords with the
experience of members of this court. The practice among attorneys for
many years, both in South Africa and internationally, has been that the
ordinary (normative) basis for them to charge their clients is by way of an
hourly rate for services rendered, the rate being determined by the
attorney’s standing, expertise, experience and the like.

[74]  Mr Nash said that charging at an hourly rate was precisely the way
in which it should have been done under para 9 of the court order. In the
case of the curatorship of the related Cadac fund the order appointing Mr
Mostert as curator provided that he be remunerated in accordance with
the norms of the attorneys’ profession. Documents placed before the
court by Mr Nash recorded that on this basis Mr Mostert was being paid
R2 000 per hour subject to a monthly cap of R320 000. Mr Cowan, a
senior commercial attorney, deposed to an affidavit in which he said that
commercial attorneys in Johannesburg would have been happy to take on
the work of a curator at their ordinary hourly rates had it been open to
them to do so.

[75] This review of the evidence demonstrates that remuneration of an
attorney in accordance with the norms of the attorneys’ profession is to be
understood as a fee calculated on a time basis at an hourly rate. That is
the meaning to be attached to para 9 of Poswa J’s order. In strict law it
may be that the attorney is only entitled to remuneration once the work is
completed, but the more conventional practice is for regular, usually
monthly, accounts to be rendered while the work is being undertaken, as
reflected in the provision for payment of ‘periodic remuneration’. The
evidence demonstrates that this was the arrangement contemplated when
the order was taken for Mr Mostert’s appointment on the basis that he
would be periodically remunerated in accordance with the norms of the
attorneys’ profession. The arrangement in fact made was not in
accordance with that requirement. It follows that Mr Nash was entitled to
an order declaring it to be inconsistent with para 9 of the order appointing
Mr Mostert as curator.

Relief
[76]  The high court granted an order declaring the fee agreement to
have been null and void ab initio and setting it aside. The court added that
this did not affect the rights of Mr Mostert and any co-curator or
liquidator under the MOU in relation to any other fund. It then ordered
Mr Mostert to render an account supported by vouchers in respect of all
curators’ fees charged by him in relation to the Sable Fund and
authorising any party thereafter to apply to court on notice for an order
that Mr Mostert should repay any money received by him as his fee under
the remuneration agreement.

[77] That order went far further than is appropriate in the light of the
narrow basis upon which I decide this case. A declaration that the fee
agreement was not in accordance with the provisions of para 9 of the
court order appointing Mr Mostert and should be set aside, does not alter
the position that he was properly appointed as curator of the Sable Fund
and was entitled to be remunerated for his services in discharging that
function. All it does is hold that by virtue of the terms of the court order
he was not entitled to be remunerated on the basis set out in the fee
agreement. The precise basis upon which he should be remunerated
remains to be determined. So long as the present order stands it is open to
him and the FSB to agree upon a basis for remuneration that is in
accordance with the norms of the attorneys’ profession. That could, by
way of example, be an hourly rate, enhanced to take account of the risks
that he has run as curator in financing the activities of the curatorship in
effecting at least the original recoveries. Such an agreement could be
concluded without the need to obtain further approval from the court,
although given the circumstances of this litigation it would be wise to do
so to forestall any challenge to the reasonableness of the fees due under
such an agreement.

[78] If an hourly rate is not thought to be appropriate or is, at this late
stage, not able to be determined or calculated because records have not
been kept of the hours spent on this curatorship, a different basis for
remuneration needs to be determined between Mr Mostert and the FSB. I
wish to make it clear that this does not exclude a fee determined as a
percentage of the amounts recovered for the benefit of the Sable Fund,
provided that the fee so determined is reasonable, having regard to the
risks undertaken, the work involved, the uncompensated costs to Mr
Mostert and his firm in performing the work and the like. A percentage

fee subject to an appropriate cap or a sliding scale would be a possibility
in this regard. Such a fee arrangement would involve a departure from the
terms of the order granted by Poswa J and would require the sanction of
the court. If Mr Mostert and the FSB are unable to arrive at an agreement
it will be necessary for them to approach the court for a determination of
the basis upon which Mr Mostert must be remunerated for his services.

[79] An order that Mr Mostert either account for the amounts he has
received thus far as fees for the Sable Fund curatorship, or repay any
amount to the fund, is premature at this stage. These questions will only
be capable of being explored once a new and permissible basis for his
remuneration has been determined. Once that has been done the FSB will
need to examine what Mr Mostert has already received and assess it
against what will be due in terms of a fresh agreement. Only then will it
be possible to determine whether there has been an overpayment. In
accordance with the need for transparency and accountability in public
affairs that process will need to be open to input from interested parties
and especially the former members of the Sable Fund.

[80] The appeal is therefore unsuccessful on the main point, but the
order of the high court must be substantially altered. Mr Nash and
Midmacor have succeeded in preserving the order that the fee agreement
was inconsistent with para 9 of the curatorship order and therefore
unlawful. However, they do so on a far narrower basis than in the high
court and the consequential relief that they were granted in that court
must be set aside. Mr Mostert has therefore obtained some substantial
success in this appeal. As far as the FSB is concerned the finding by the
high court that the fee agreement was unlawful in principle has been set
aside. But this court has said that in principle, subject to obtaining the

approval of the court in terms of s 5(5)(c) of the FI Act, there is no
objection to a fee agreement for a curator involving the payment of a
percentage of the amounts recovered in the course of the curatorship. This
is also significant success. In the circumstances I think the appropriate
order is that each party pay his or its own costs of the appeal. While the
order of the high court went further than in my view it should, Mr Nash
and Midmacor were compelled to bring the proceedings in order to
establish their primary point. The costs order in the high court should not
be disturbed.

Order
[81] The following order is made:
1 The appeal against paragraphs 1, 2, 3, 6 and 7 of the order of the
high court is dismissed.
2 The appeal against paragraphs 4 and 5 of the order of the high
court succeeds and those paragraphs are set aside.
3 Each party is to pay his or its own costs of the appeal.

____________________________
M J D WALLIS
JUDGE OF APPEAL

Willis JA (dissenting)
Introduction
[82] Shorn of analysis, this appeal is concerned with whether or not an
agreement for the remuneration of a curator of a pension fund ‘is in
accordance with the norms of the attorneys’ profession’.  Essentially,
however, the vital issue is the validity of an agreement (the agreement)
for what are generally known as, and have been referred to by the parties,
as ‘contingency fees’, in circumstances where the curator is a member of
that profession.   This was the basis upon which the case was contested in
the court a quo and the issue to which it applied its mind when delivering
its judgment. The parties to the agreement were: (a) Mr Antony Louis
Mostert, the second appellant (the curator), who is the curator of the
Sable Industries Pension Fund, the third appellant (the pension fund) and
(b) the executive officer of the Financial Services Board, the fifth
appellant (the FSB). The sixth appellant is the registrar of pension funds
(the registrar). The first respondent is Mr Simon John Nash. The second
respondent is Midmacor Industries Limited (Midmacor). The first and
second respondents in this appeal were, respectively, the first and second
applicants in the court a quo (Tuchten J).

[83] This judgment is regrettably lengthy. The issues are complex and
numerous. Along the way, there are a number of side-alleys and cul-de-
sacs, the gates to which have to be closed. It may therefore be helpful if I
summarise my reasoning now. It is that the Promotion of Administrative
Justice Act 3 of 2000 (PAJA) applies to the contested agreement, that the
respondents were out of the 180 day time limit provided for in PAJA; that
there was no good reason to extend that time period in the circumstances
and that, in any event, to the extent that the merits were relevant,

agreements for contingency fees of the kind in question were not
unlawful, even though unsettling questions may have arisen as to the rate
of remuneration and the quantum of the fees. One must be careful not to
elide or conflate the presumption of unlawfulness when it comes to
determining locus standi with the determination of unlawfulness itself,
once it has been accepted that the applicant has standing.28

[84] In the founding affidavit, the first respondent alleged that:
‘This is an application for the setting aside of certain unlawful agreements (“SJN9” to
“SJN13” purportedly concluded, inter alia, between the curator of the Sable Fund
(Mostert) and the FSB, and ancillary relief to enforce the provisions of prayer 9 of the
order by Poswa J (“the Poswa order”) dated 20 April 2006 (“SJN1”). The
unlawfulness of the agreements, arises, amongst others, from the non-compliance
with paragraph “SJN1” read with section 5(5) of the Financial Institutions
(Investment of Funds) Act, 2001 (‘the FI Act”) and the Contingency Fees Act, 1997
(“the CFA’).’

[85]  In their heads of argument the respondents contend that:
‘The ancillary issues raised by the appellants overshadow the real issue in the matter,
namely whether paragraph 6 of “SJN13” is valid and unlawful.’
and
‘The real focus should however be on (i) whether the CFA is of application; (ii) if so,
“SJN13” is illegal; (iii) if not, whether at common law a contingency fee agreement in
respect of non-litigious work is unlawful; (iv) if so “SJN13” is illegal.’
These are indeed issues that cry out for an answer because they impact
not only on the whole question of contingency fees for attorneys but also,
as will become apparent later, on the future viability of appointing
curators for pension funds.

28  See Giant Concerts CC v Rinaldo Investments (Pty) Ltd and Others [2012] ZACC 28; 2013 (3) SA
BCLR 251 (CC) paras 32, 33 and 36 concerning the presumption when it comes to standing.

[86] In the founding affidavit, the first respondent goes on to contest the
reasonableness of the fees received by the curator but this is adjectival to
the contentions that the agreement did not comply with what the parties
have referred to as ‘the Poswa order’ inasmuch as it provides for
contingency
fees,
which
are
unlawful.
In
other
words,
the
‘unreasonableness’ point raised by the respondents was used to bolster
their argument that the Contingency Fees Act 66 of 1997 (the CFA)
applied to and prohibited the agreement, alternatively that contingency
fees for non-litigious work by attorneys was illegal. The respondents did
not advance any substantive grounds or argument as to what reasonable
fees might be in the circumstances. In particular, the first and second
respondents did not suggest a lesser percentage than the one in question.
This is hardly surprising. Any form of commission would, in their
submission, have been unlawful. The respondents made application to the
court with an ‘all-or-nothing’ approach to the substantive issue. In the
result, there was no exploration in the court a quo as to what may have
been a reasonable alternative fee structure for the curator. None was
called for and none was given.

[87]  Reasonableness always depends on the facts and circumstances of
each particular case.29 Outside of the ‘contingency fees issue’, no court
can make a final, determinative finding as to the reasonableness of the
fees, without a full examination of a range of facts put before the court
for consideration. No evidence was put before the court as to what ‘the
norms of the attorneys’ profession’ might otherwise be, in circumstances

29  See for example, Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others  [2004]
ZACC 15; 2004 (4) SA 490 (CC) para 45 and the authorities therein cited.

such as these. Besides, if PAJA applies, the test in s 6(2)(h) thereof, upon
which the respondents have relied, is not ‘ordinary’ reasonableness. The
agreement must, in the words of the subsection, have been ‘so
unreasonable that no reasonable person’ could have entered into it.

[88]  Moreover, the judgment of the court a quo was wrong, over and
over again, on almost every substantive point in issue. For this court to
endorse the order of the court a quo because it disapproves of the scale of
the curator’s fees could, in this situation, have all manner of untoward,
unforeseen and regrettable results.

[89] The parties have raised numerous preliminary, procedural,
ancillary or in limine points. If the appellants can straddle these and, vice
versa, the respondents cannot, it would, in my opinion, be unfortunate, to
say the least, if this court were to strike down the agreement on the basis
that the fees were unreasonable. Even more so would this be the case if
this court disagrees with the respondents’ substantive proposition (the one
they insist is all that matters): that where an attorney acts as a curator in a
case such as this, contingency fees are, per se, unlawful.

[90] The respondents alleged that the agreement was concluded in an
exchange of correspondence and a memorandum of understanding
(MOU), contained in annexures SJN to SJN13 to the founding affidavit to
which the first respondent had deposed. These annexures straddle a
period of time from July 2006 to January 2011. The respondents brought
the application before the court a quo seeking various forms of relief,
including an extension of the 180 day time period stipulated in s 7(1) of
PAJA, to the extent that this was necessary.  For reasons outlined above
and which will be dealt with more fully later in this judgment, the pivotal

issue has been the question of whether the agreement should be declared
invalid. The application was dated 11 July 2013 but it would seem it was
lodged and served around 15 July 2013. The court a quo found on 5 April
2017 that the agreement was indeed invalid and, in addition to granting a
declaratory order to this effect, directed the curator to account for all fees
received in terms thereof and to repay these to the pension fund. On the
same day that it made these orders, the court a quo granted leave to
appeal to this court.

[91] Mr Mostert is an attorney. He was cited in his personal capacity as
the first respondent in the application and, in his capacity as curator, as
the second respondent. He is now, in these different capacities, the first
and second appellant respectively. The firm in which Mr Mostert has, at
all material times, been the leading player is AL Mostert & Company. It
was cited as the fourth respondent and is now the fourth appellant.

Outline of the relevant facts

[92] Fifty percent of the shares in Midmacor were owned by Trina
Investments CC of which the first respondent was the sole member.  The
balance was held by the first respondent’s family through a company
known as Trishand (Pty) Ltd. The first respondent had been the chief
executive officer of Midmacor which had, in turn, been the principal
employer contributing to the pension fund. Before the fund had been
deregistered and placed under curatorship, the first respondent caused
funds to be transferred from the pension fund, first to the so-called
Lifecare Fund and, thereafter, to what is known as the Cadac Fund. The
respondents contended that both the deregistration of the pension fund

and the second appellant’s appointment as curator were irrelevant for the
purposes of the application. Essentially, as far as the respondents were
concerned, all that were relevant to the application were that they had
locus standi to bring the application and that the agreement had been
unlawful.

[93] There were serious disputes of fact in the application. In their
answering affidavit, the first and fourth appellants contend that the
pension fund was one of nine funds, the surplus of which had been
plundered in the 1990’s through a series of transactional devices to which
they refer as the ‘Ghavalas Scheme’. They named this scheme after one
Peter Ghavalas, alleging him to be ‘the architect and instigator’ thereof.
The first and fourth appellants contend that the scheme enabled the first
respondent unlawfully to remove the surplus of the pension fund to
benefit himself and Midmacor.30 Some R36 million was allegedly
‘stripped’ from this pension fund.  ‘Unlocked’, rather than ‘stripped’ is
the term preferred by those who wish to put a more neutral loss on events.
The first and fourth appellants have asserted that this amount is
equivalent to more than R200 million at present day values. After his
appointment as curator, the first appellant, upon investigation, discovered
that the pension fund was ‘impecunious’ as a result of the surplus
stripping under the Ghavalas Scheme.  The first appellant alleged that the
surplus stripping was done by ‘laundering’ money under the guise of a
transfer of assets from one pension fund to another. Mr Ghavalas had, at
the time, been a trustee of the Lifecare Fund.

30 That the first respondent was implicated in the Ghavalas scheme was a finding made by Nicholls J,
in another matter, Executive Officer of the Financial Services Board v Cadac Pension Fund [2013]
ZAGPJHC 401; 2014 JDR 2721 (GJ).

[94] This alleged scheme had received the attentions of the inspectorate
of the FSB during 2003. This resulted in the registrar successfully making
an application to court for the pension fund to be placed under
curatorship. Consequent upon this investigation, Mr Ghavalas was
arrested and charged with various counts, including fraud. He entered into
a plea bargain with the State, which entailed setting out the activities and
system of operation in an affidavit some 34 pages long, which was
annexed to the answering affidavit. In that affidavit Mr Ghavalas
implicated the first respondent as a participant in the scheme.  Indeed, Mr
Ghavalas described him in the affidavit as having been ‘fully aware of the
true intention’ behind the scheme.

[95] Mr Ghavalas’ affidavit is, in turn, supported and corroborated by
the affidavit of Mr Quentin Alfred Southey who, at the relevant time, had
been employed by Midmacor. Shorn of a wealth of detail provided in the
answering affidavit and its annexures, the scheme involved moving
investment funds of the pension fund to Midmacor disguised as bona fide
investments, which they were not.  In particular, surplus assets held by
the Lifecare Fund were allegedly used to pay a simulated price to a
dormant subsidiary of Midmacor, known as Pro-Base (Pty) Ltd and these
funds were then rerouted to pay dividends to Midmacor and Soundprops
178 (Pty) Ltd, (Soundprops) a company owned and controlled by Mr
Ghavalas. According to the appellants, all of this was done with the
assistance of the guise of a so-called ‘subscription agreement’ to which
Lifecare Group Holdings Limited, Soundprops and Midmacor were made
to appear as ‘parties’.

[96] The second and third appellants contend that a further important
aspect of the Ghavalas scheme – and which is indicative of its artificial

nature – was the transferring of the pensioners and members of the target
fund to another fund, so that they did not hamper the effecting of the
scheme.

[97]  The affidavit of Mr Gavin Finch, an independent actuary,
investment and retirement fund specialist was also highly critical of the
personal financial benefits that the first respondent derived from the
pension fund, indicating that there was no justification for this
whatsoever.

[98] Much of the relevant detail set out in the answering affidavit was
accepted by the court a quo. For example, it accepted that Midmacor had,
at all relevant times, been under the control of the first respondent.
Indeed, the court a quo accepted that the first respondent had been able to
influence the transactions of the pension fund itself. It accepted that
Midmacor had been the pension fund’s ‘principal employer’ in terms of
the Pension Funds Act 24 of 1956 (the PFA), as that term had been used
in the PFA at the relevant time. The court a quo specifically recorded that
the first respondent had been charged in a criminal trial relating to the
Ghavalas scheme, that this trial had been on-going for several years and
that, at the time of the hearing, the trial was part-heard. The charges
relate, inter alia, to fraud, theft and money laundering.

[99]  The court a quo noted that the first respondent had denied any
wrongdoing but observed that for the purposes of the case, the allegations
in the answering affidavit must be accepted.  I shall deal more fully with
this aspect later. The first respondent denied that the actuarial surplus of
the pension fund had been removed through the Ghavalas scheme. He
also denied that he was the effective owner of Midmacor.

[100]  The court a quo accepted that, as a result of the Ghavalas scheme,
the pension fund was left ‘without any assets under its control’ and that,
in this regard and in such situations, the FSB had been vested with certain
powers in terms of s 5 of the Financial Institutions (Protection of Funds)
Act 28 of 2001 (FIA), as it read at the relevant applicable time, before
FIA’s amendment in terms of the Financial Laws General Amendment
Act 45 of 2013.  The FSB was established in terms of the Financial
Services Board Act 97 of 1990. Its members are, in terms of s 4 of that
Act, appointed by the Minister of Finance and its functions, set out in s 3
thereof, make it clear that it is an ‘organ of state’, performing a ‘public
power or performing a public function’ in terms of s 1 of PAJA, read with
s 239 of the Constitution.

[101]  The FSB brought an application before the high court for an order
placing the pension fund under curatorship and appointing the first
appellant as curator. That application was separate and different from the
one in respect of which the present appeal lies. The matter came before
Poswa J, who made an order relating thereto on 20 April 2006. As
mentioned previously, this is the order to which the court a quo and the
parties have referred as ‘the Poswa order’. For convenience, I shall do the
same.  Obviously presented to the judge as a draft, the order provided
comprehensively for the scope of the curator’s powers and duties as well
as his authority.  For example, it authorises the curator ‘to take control of,
manage and investigate the business and operations of’ the pension fund,
to pay ‘pensions and other benefits to those members of the Fund who are
legitimately entitled thereto’, to invest the funds and so on. These powers
are set out over some five pages of the order. The curator was no mere
‘debt collector’.

[102] Of critical importance to this case is paragraph 9 of the Poswa
order, which reads as follows:
‘The curator shall be entitled to periodical remuneration in accordance with the norms
of the attorneys’ profession, as agreed with the applicant [the fifth appellant in this
appeal], such remuneration to be paid from assets owned, administered or held on
behalf of the Fund [the pension fund in this appeal], on a preferential basis, after
consultation with the applicant.’

[103] The first and fourth appellant have alleged that, following his
appointment, the curator sought to recover the assets of the pension fund
and that, because of this, the curator would focus his attention on
Midmacor and the first respondent himself, the two main beneficiaries of
the surplus stripping exercise.  The first and fourth appellants allege that
therein lies the real purpose of the application. It was, in the ipsissima
verba used by the first respondent himself, to strike ‘a dagger’ at ‘the
heart’ of the curatorship itself.

[104]  Although the respondents alleged that the agreement had been
concluded in an exchange of correspondence contained in correspondence
and a memorandum of understanding (MOU), referred to as annexures
SJN to SJN13 to the founding affidavit to which the first respondent had
deposed, the first and fourth appellants allege that the only applicable
remuneration agreement, arising from the Poswa order is SJN13, which is
a MOU, entered into on or about 17 October 2008, relating to
remuneration for the curatorship of several funds, including the pension
fund itself. The court a quo accepted this. Both the first and the fifth
appellant signed the MOU. So did the FSB. For reasons that I shall

develop later, this has the consequence that the agreement constitutes
‘administrative action’ for the purposes of PAJA.

[105] Clause 4 of annexure SJN13 provides as follows:
‘From the date of curatorship until the date of liquidation of the Funds [the various
funds to which the MOU applied, including the pension fund] the remuneration of the
curators and attorney/s shall be in terms of the applicable orders relating to these
funds [these orders include the Poswa order]. This remuneration is subject to the
maximum amounts stated in 6 below.’
Clause 6 thereof reads as follows:
‘It is recorded that the Sable Pension Fund [the pension fund] has applied for the fund
to be placed in liquidation. Formal notification from the FSB with regard to the fund
being so placed in liquidation has not been received. In the circumstances, recovery of
assets made prior to the fund being placed in liquidation shall be subject to the
curators’ remuneration of 16.66% (exclusive of VAT) of such assets recovered.’
Clause 6 accordingly renders the curator’s fees contingent upon the
recovery of assets of the pension fund, being a percentage thereof.
Clause 7 of the MOU provides specifically for the fourth appellant’s fees
as ‘attorneys fees’ to be capped according to a formula.  As far as the
substantive issue in this case is concerned, everyone, including the court a
quo, has accepted that clause 6 is the vitally relevant clause. This, of
course, has to be linked back to paragraph 9 of the Poswa order, which
provided that remuneration was to be ‘in accordance with the norms of
the attorneys’ profession’.

[106] By way of an agreement concluded between Alexander Forbes
Financial Services (Pty) Ltd and the first appellant on 22 April 2010, he
succeeded in recovering R335 million, plus interest, as a part recovery of
funds lost under the Ghavalas scheme, including those of the pension
fund. The successes of the curator were also reported to Parliament by the

Minister of Finance, on the advice of the registrar, during February 2011.
The auditor for the pension fund, Mr Liedeman of Price Waterhouse
Coopers, verified in March 2017 that the curatorship fees (excluding
VAT) debited to Mr Mostert, for the period 6 June 2006 to 30 June 2015,
did not exceed 16,66 percent of the assets recovered. Although the
percentage is known, the precise amount, in rand terms, to which this has
been translated, at this stage, is unclear.

[107] The court a quo considered itself to have been on the horns of a
dilemma as far as the disputes of fact are concerned. On the one hand, it
considered itself bound by the time-honoured Plascon-Evans rule.31 On
the other, it did not want to prejudice the first respondent in his criminal
trial and said that ‘this judgment should not be read as pronouncing on
Mr Nash’s guilt or innocence’. The manner in which the court a quo dealt
with the issue was unfortunate. In parts of the judgment, it appears that it
accepted that the first respondent was indeed guilty of criminal
misconduct and in other parts, either that he was not or, if he was, it
would be irrelevant to the determination of the case before it.

[108] I have mentioned that the parties have raised numerous
preliminary, procedural, ancillary or in limine points. The case may be

31 Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634E-635C. In
National Director of Public Prosecutions v Zuma [2009] ZASCA 1; 2009 (2) SA 277 (SCA) this court
said: 'Motion proceedings, unless concerned with interim relief, are all about the resolution of legal
issues based on common cause facts. Unless the circumstances are special they cannot be used to
resolve factual issues because they are not designed to determine probabilities. It is well established
under the Plascon-Evans rule that where in motion proceedings disputes of fact arise on the affidavits,
a final order can be granted only if the facts averred in the applicant's (Mr Zuma’s) affidavits, which
have been admitted by the respondent (the NDPP), together with the facts alleged by the latter, justify
such order. It may be different if the respondent’s version consists of bald or uncreditworthy denials,
raises fictitious disputes of fact, is palpably implausible, far-fetched or so clearly untenable that the
court is justified in rejecting them merely on the papers.'  (Para 26.) The Plascon-Evans rule has been
emphatically endorsed by the Constitutional Court. See for example President of the Republic of South
Africa and Others v M and G Media Ltd [2011] ZACC 32; 2012 (2) SA 50 (CC) para 34.

said to bristle with them.  Among these points is that the respondents
were out of time in terms of the 180 day time rule provided for in s 7(1)
of PAJA and that they did not qualify for an extension in terms of s 7(1)
thereof. Mr Loxton fairly and correctly contended not only that if this
point was successful, it would have been unnecessary to deal with the
alleged misconduct either of the first respondent or Mr Ghavalas, for that
matter, but also that it would have been improper to do so. For reasons
that I shall advance in more detail later in this judgment, I consider that
the respondents were indeed time-barred. As this is a minority judgment
and my colleagues do not consider the time bar to dispose of the matter, it
is necessary to deal with the other preliminary, procedural, ancillary or in
limine points before I engage with the 180 day rule in PAJA.

Preliminary, procedural, ancillary or in limine points: (i) the question
of locus standi

[109] The question of whether the respondents were time barred in terms
of the 180 day rule in PAJA is fundamentally bound up with the question
of locus standi but on that very question of locus standi there were other
questions that were raised. The parties agree that, in terms of s 5 of the
FIA at the time, the registrar could apply to court for the appointment of a
curator and that the court could determine the remuneration of that
person. Moreover, the parties agreed that, in terms of this s 5(8)(a) of the
FIA, ‘any person’ could make application to the court ‘on good cause
shown’ to ‘set aside or alter any decision made, or any action taken, by
either the registrar or the curator’.  In other words, there was no dispute
that the respondents had sufficient interest in the matter to approach the
court for relief. Questions arose, however, and with which I shall deal
later, as to whether s 5(8)(a) is merely an enabling provision or whether

it, ipso facto, creates a separate and independent basis of review, standing
apart from PAJA and which may be considered without regard to it.
Questions also arise as to whether the application was one for a review at
all or whether it was simply an application for a declarator interpreting an
order of court.

[110] Additionally, the appellants argued that by reason of the
applicability of the Plascon-Evans rule, the court a quo had to find that
the respondents had brought the application with unclean hands and
accordingly, for this reason, did not have the necessary locus standi: they
should have been refused a hearing. In other words, the respondents
should have been barred from a hearing because they were abusing the
processes of the court. The court a quo accepted that the first respondent
had the motives imputed to him by the appellants but concluded that as
the issue was a complaint raised by the first respondent that related ‘to the
remuneration of an office bearer who is exercising a public power’ and
that it was ‘in the highest degree in the public interest that such
complaints should be ventilated and that appropriate relief should issue if
such a complaint is well-founded’. This ‘degree of public interest’ raises
its head also when consideration is given to whether there should be an
extension of the 180 day time bar in PAJA.

[111]  It becomes necessary to consider the correctness of the court a
quo’s decision concerning the ‘clean hands’ point only if that decision is
not found wanting in other respects.

[112]  The pension fund has chosen to abide the decision of this court on
the lawfulness of the agreement. The pension fund contests however, the
respondents’ standing to bring the application contending, as have the

other appellants, that the respondents have been abusing the court process
to obstruct the curator’s recovery of the pension fund’s assets. The
pension fund has argued that the application should have been dismissed
for unreasonable delay.

Preliminary, procedural, ancillary or in limine points: (ii) the
question whether the relationship between the curator and the
pension fund is one between attorney and client

[113] The first, fourth, fifth and sixth respondents submitted that the
relationship between an attorney and client is essentially one of mandate
and that the relationship between the curator and the pension fund does
not fall into this category. They also argued that the curator acts as
curator, not of the pension fund as a juristic person, but as a curator of the
pension fund’s actual business assets.

[114]  Leaving aside the fact that the Poswa order pertinently stipulated
that the curator’s entitlement to remuneration had to be ‘in accordance
with the norms of the attorneys’ profession’, this question needs be
decided only if it appears that the agreement falls foul of what attorneys
are allowed to do.

Preliminary, procedural, ancillary or in limine points: (iii) The non-
joinder of various parties to the MOU

[115] Although the respondents concede that the non-joinder of various
parties who were signatories to the MOU (SJN13, which was sought to be
struck down) presented a difficulty, that difficulty could be overcome by

a simple expedient of not making the order applicable to any of the
parties not before the Court.

Preliminary, procedural, ancillary or in limine points:  (iv) the
residual discretion of the court

[116]   The second and third appellants argued that, even if the agreement
was unlawful, the court a quo should have exercised its discretion in
terms of s 172(1)(b) of the Constitution. Relying on Chairperson,
Standing Tender Committee & others v JFE Sapela Electronics (Pty) Ltd
& others32 and Millennium Waste Management (Pty) Ltd v Chairperson,
Tender Board: Limpopo Province & others,33 they contended that factors
such as the effluxion of time, practicalities and the disruptive, unjust or
inequitable effects have been taken into account by this court not to strike
down an unlawful act. Self-evidently, this is a consideration that arises
only if the agreement is unlawful or the application is not dismissed on
some other ground.

Preliminary, procedural, ancillary or in limine points: (v) the 180 day
time period in PAJA

[117] In terms of s 1 of PAJA, ‘administrative action’ includes ‘any
decision’, which must be of an administrative nature, taken by ‘an organ
of state, when … exercising a public power or performing a public
function in terms of any legislation’. Section 6 thereof provides for

32 Chairperson, Standing Tender Committee and Others v JFE Sapela Electronics (Pty) Ltd and Others
[2005] ZASCA 90; 2008 (2) SA 638 (SCA) paras 20, 28-29.
33 Millennium Waste Management (Pty) Ltd v Chairperson, Tender Board: Limpopo Province and
Others [2007] ZASCA 165; 2008 (2) SA 481 (SCA) paras 25-30.

judicial review of ‘administrative action’. There is no dispute that the
respondents became aware of the contents of annexure SJN13 by 13
January 2011 at the latest but launched their application on or about 15
July 2013. This was more than two years after they had become aware of
the agreement and well after the 180 day period provided for in s 7(1) of
PAJA. The relevant portions thereof read as follows:
‘Any proceedings for judicial review in terms of section 6(1) must be instituted
without unreasonable delay and not later than 180 days after the date –
(a) …; or
(b) Where no such remedies [internal remedies] exist, on which the person
concerned was informed of the administrative action, became aware of the
action and the reasons for it or might reasonably have been expected to have
become aware of the action and the reasons.’
This provision is qualified by s 9 of PAJA, the relevant portions of which
read as follows:
‘(1) The period of –
(a) …;
(b) 90 days or 180 days referred to in sections 5 and 7 may be extended for a fixed
period,
by agreement between the parties or, failing such agreement, by a court or tribunal
on application by the person or administrator concerned.
(2) The court or tribunal may grant an application in terms of subsection (1) where
the interests of justice so require.’

[118] Mr Subel, who appeared for the respondents, argued that by reason
of the provisions of s 5(8)(a) of FIA, the application was not an
application for review but merely one for the interpretation of an order of
court alternatively, even if it was an application for review, PAJA did not
apply, further alternatively, even if PAJA did apply the ‘interests of
justice’ required  that an extension of time  should be given so as to allow
the matter to be heard. If PAJA applied, the respondents relied on the

following provisions thereof: s 6(2)(f)(i) (the action ‘contravenes a law or
is not authorised by the empowering provision’) and s 6(2)(h) (the action
‘is so unreasonable that no reasonable person could have so exercised the
power or performed the function’). I shall deal with these points in turn.

[119] The fact that an act may derive or purport to derive from an order
of court does not, without further ado, necessarily deprive it of its
administrative character and quality. An administrative act authorised or
prohibited by an order of court is not thereby removed from scrutiny
according to the law of review. The fact that an administrative act may
have been preceded by, or follow consequent upon, an order of court also
does not isolate it from the law of review. In order for outsiders such as
the respondents in this case successfully to challenge acts or actions that
are derivative from a court order they will have to demonstrate not only
locus standi but also a recognised legal peg upon which to hang their
case.

[120] Every working day in our land, innumerable administrative acts are
authorised or prohibited by orders of court. This derives from the self-
evident fact that when a court orders or authorises an organ of State to do
or not to do something, it authorises or forbids an administrative act. If,
for example, a court sets aside a municipal tender and directs that the
tender process be undertaken afresh, the fact that the second tender
process derives from an order of court cannot possibly have the
consequence that it escapes judicial scrutiny upon review. The hard,
ineluctable truth in this matter is that a court order cannot hoist an
agreement entered into with an organ of State outside of the purview of
PAJA.

[121] The fact that the respondents have alleged that the agreement failed
to comply with the requirement in a court order that the curator’s
remuneration should be ‘in accordance with the norms of the attorneys’
profession’ does not alter the reality of the fact that the application is one
for review. As mentioned above, s 6(2)(f)(i) of PAJA proscribes the
contravening of a law or an action not authorised by a particular
empowering provision. It relates, more generally, to acts outside of the
law, rather than outside of a particular court order.

[122] Section 5(8)(a) of FIA provides as follows:
‘Any person, on good cause shown, may make application to the court to set aside or
alter any decision made, or any action taken, by the curator or the registrar with
regard to any matter arising out of or in connection with, the control and management
of the business of an institution which has been placed under curatorship.’
The respondents argued that this created a basis for review that is separate
and independent, standing apart from PAJA and s 33 of the Constitution.
Section 5(8)(a) of FIA relates to locus standi and not to the substantive
grounds upon which decisions or actions of either the curator or the
registrar may be set aside. Rarely, if ever, will a curator be an organ of
State. Inevitably, he or she will perform acts independently of any organ
of State. Section 5(8)(a) of FIA permits persons to challenge acts that do
not necessarily constitute ‘administrative action’ but, once locus standi
has been established, there must be a recognised, clear and identifiable
legal ground upon which to strike down or set aside the act or action in
question. Otherwise, I fear that this court will have admitted a Lernaean
Hydra into its bosom.

[123]  It seems to me that Bato Star Fishing (Pty) Ltd v Minister of
Environmental affairs and Others34 has remarked approvingly of the
apparent legislative intention to codify the law of review.35  Professor
Cora Hoexter in her Administrative Law in South Africa argues that logic
therefore requires that applicants should bring their cases for review
under PAJA ‘where possible’.36 There is no impossibility in applying
PAJA in this case. Furthermore, FIA was enacted after PAJA and the
edition of Hoexter’s book to which I have referred, some eleven years
after FIA. Significantly, she does not mention even the possibility that s
5(8)(a) of FIA may have established a review regime that stands apart
from PAJA.  Moreover, the long title and the preamble to PAJA not only
record that it is enacted to give effect to the general right to fair
administrative action in terms of s 33 of the Constitution but also seem to
be comprehensive in their scope. It also seems to me that will be
confusing to the general public and generally undesirable to have an ever
expanding range of different regimes for review.

[124] Perhaps, however, the answer lies in a decision in the
Constitutional Court itself, Walele v City of Cape Town & others.37
There, as Clive Plasket pointedly notes, Jafta AJ said: ‘All statutes which
authorise the making of administrative action must now be read with
PAJA unless their provisions are inconsistent with it’.38 Jafta AJ’s was a
minority judgment but the majority, referring to his judgment, did not
appear to disagree with this proposition.

34 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others [2004] ZACC 15; 2004
(4) SA 490 (CC) paras 22-25.
35  C Hoexter , 2012, Administrative Law in South Africa,  (2 ed, 20110) p118.
36 Ibid.
37 Walele v City of Cape Town and Others 2008 (6) SA 129 (CC).
38 Para 51. Clive Plasket  ‘Administrative Law’ 2008 Annual Survey of South African Law 24 at p35.

[125] In AllPay Consolidated Investment Holdings (Pty) Ltd & others v
Chief Executive Officer, South African Social Security Agency & others39
the Constitutional Court unanimously  came to the conclusion that :
‘Once a particular administrative process is prescribed by law it is subject
to the norms of procedural fairness codified by PAJA, this , it seems to
me, must apply to the agreement.’40

[126]  In Minister of Health & another NO v New Clicks South Africa
(Pty) Ltd & others (Treatment Action Campaign and another as Amici
Curiae)),41 Chaskalson CJ held that:
‘PAJA is the national legislation that was passed to give effect to the rights contained
in s 33. It was clearly intended to be, and in substance is, a codification of these
rights. It was required to cover the field and purports to do so.’42
Similar views were expressed by Ngcobo in Zondi v MEC for Traditional
and Local Government and Others.43

[127] I accept that there may be exceptions to PAJA covering the field
when it comes to reviews.  In this regard it is instructive to read the
unanimous judgment delivered by Navsa JA in Fesi v Ndabeni
Communal Property Trust.44 In my opinion, the Constitutional Court’s
perspective has been clearly set out: PAJA must, at least as a general rule,

39 AllPay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South
African Social Security Agency and Others [2013] ZACC 42; 2014 (1) SA 604 (CC). See also  Aurecon
South Africa (Pty) Ltd v Cape Town City [2015] ZASCA 209; 2016 (2) SA 199 (SCA) para 43.
40  Para 40.
41 Minister of Health and Another NO v New Clicks South Africa (Pty) Ltd and Others (Treatment
Action Campaign and Another as Amici Curiae) [2005] ZACC 14; 2006 (2) SA 311 (CC).
42 Para 95. See also C Plasket ‘Post -1994 Administrative Law in South Africa: The Constitution, The
Promotion of Administrative Justice Act 3 of 2000 and the Common Law’ (2007) 21 Speculum Juris
25.
43 Zondi v MEC for Traditional and Local Government and Others  [2004] ZACC 19; 2005 (3) SA 589
(CC) paras 101 and 102. See also Plasket supra.
44  Fesi v Ndabeni Communal Property Trust [2018] ZASCA 33 (27 March 2018) para 54. See
also Nel & another NNO v The Master (ABSA Bank Ltd & others intervening) 2005 (1) SA 276
(SCA) paras 22-23.

apply to all reviews of administrative action. Accordingly, the
exceptional cases must be transparently evident and unambiguously
required. Section 5(8)(a) of FIA is not one of them.

[128] Moreover, in State Information Technology Agency Soc Ltd v
Gijima Holdings (Pty) Ltd45 this court held that a decision by a State
entity to award a contract for services constitutes administrative action for
the purposes of PAJA.46 Subsequently, the Constitutional court held that
an organ of State, when reviewing its own administrative decision, may
not rely on PAJA but must bring a ‘legality review’ in terms of s 1(c),
read with s 33 of the Constitution.47  This did not alter this court’s broad
observation that contractual awards by State entities constitute
administrative action for the purposes of PAJA. Indeed, the vast
administrative machinery of the State functions largely through its
various organs entering into contracts with private persons. That is how
service delivery takes place. Therein lies both the strength and weakness
of State administration in any country.  All over the world, in our scrutiny
thereof, we have to sail through the Scylla of corruption and
maladministration and the Charybdis of dysfunctional tardiness. Against
this background, it seems to me that simply has to have been the intention
both of s 33 of the Constitution and indeed PAJA itself that the review of
all agreements entered into by organs of State are determined within a
single cohesive legal framework, rather than in some piecemeal fashion.
That framework is PAJA.

45State Information Technology Agency Soc Ltd v Gijima Holdings (Pty) Ltd [2016] ZASCA 143; 2017
(2) SA 63 (SCA).
46 Para 16.
47 State Information Technology Agency Soc Ltd v Gijima Holdings (Pty) Ltd supra.

[129]  Apart from these general observations, it seems to me that there is
a still more specific reason why s 5(8)(a) of FIA does not establish a
different regime for reviews that is separate from PAJA.  It is plainly an
enabling provision. It confers locus standi rather than creating a separate
system for review. This is apparent from a plain reading of the
subsection. The point is underlined by the fact that the phrase ‘on good
cause shown’ is positioned where it is and not at the end of the
subsection. The ‘good cause shown’ relates to the reason to be heard, not
the substantive merits of the application itself. In summary, the
subsection does not give any person having an interest in the matter,
willy-nilly or holus-bolus to apply for the setting aside of a decision of
the curator or registrar on any ground and at any time that he or she may
choose.

[130] Referring to s 1, the definitions section of PAJA and the Shorter
Oxford English Dictionary, the court a quo held that PAJA applies not to
contracts (such as the one in question) but to decisions. This, it seems to
me, is clearly wrong.

[131]  In Opposition to Urban Tolling Alliance & others v The South
African National Roads Agency Ltd & other,48 (OUTA), Brand JA,
delivering the unanimous judgment of this court affirmed the general
principle that, in review applications, a court should deal with the delay
rule before considering the merits.49

[132] In OUTA Brand JA went on to say that:

48 Opposition to Urban Tolling Alliance and Others v The South African National Roads Agency Ltd
and Others [2013] ZASCA 148; [2013] 4 All SA 639 (SCA).
49 Paras 22 and 43.

‘The delay rule gives expression to the fact that there are circumstances in which it is
contrary to the public interest to attempt to undo history. The clock cannot be turned
back to when the toll roads were declared, and I think it would be contrary to the
interests of justice to attempt to do so.’50
Moreover, this court has generally disapproved of unreasonable delay in
initiating proceedings.51 Delays not only clog up the administration of the
State but also have the consequence that prudent and competent persons
of business are wary of entering into contracts with organs of State. In my
opinion, it would also not be in the interests of justice to attempt to undo
history in this case. Ordinarily, that would be dispositive of the matter.
Nevertheless, apart from the fact that this is a minority judgment, there
are two other reasons why I consider it appropriate to touch upon the
merits. The first is, as mentioned previously, the trenchant finding by the
court a quo that it is in the ‘highest degree in the public interest’ that the
matter should be considered. The second is that responsible persons and
bodies such as the registrar and the FSB, who are required to act in the
public interest, consider it imperative that there be clarity on the question
of contingency fees in circumstances such as these.

[133] Additionally, I do not understand Brand JA to have said that the
merits in an application for condonation should never be considered in
review applications, but merely that it is generally undesirable to do so.
Ordinarily, when it comes to the sound administration of the State, it will
not be in the interests of justice to be indulgent towards applicants when
it comes to delays in their bringing applications for review. There are
other vital interests of society, which come into play as well. Delays

50 Para 41.
51 See for example Associated Industries Pension Fund and Others v Van Zyl and Others 2005 (2) SA
302 (SCA) para 46. See also Khumalo and Another v MEC for Education, Kwazulu-Natal [2013]
ZACC 49; 2014 (5) SA 579 (CC) para 44.

render the administration of the State apparatus sclerotic, thereby
hampering the delivery of services in society. There may, however, be
exceptions to the general rule that the merits should be considered
separately from the explanation for the delay. After all, in a recent matter
dealing with condonation, Mulaudzi v Old Mutual Insurance Company
(South Africa) Limited and Others, National Director Public
Prosecutions and Another v Mulaudzi 52 Ponnan JA, delivering the
unanimous judgment of this court, albeit in a different context, said that
in applications for condonation the substantive merits of the case may be
relevant, but this was not necessarily the case and neither are they
decisive.53  Moreover, the merits may conceivably be so closely bound up
with the reasons for the delay that it is neither sensible nor practical to
consider them separately.

[134]  I am fortified in my opinion that Brand JA’s setting out of the
process to be adopted was not meant to be understood in absolute terms
by reference to South African Roads Agency Limited v Cape Town City,54
in which Navsa JA, delivering the unanimous judgment of this court said
that it ‘cannot be read to signal a clinical excision of the merits of the
impugned decision’.55  This qualification by Navsa JA has been approved
by this court more recently, when Swain JA delivered the unanimous
judgment in Asla Construction (Pty) Ltd v Buffalo City Metropolitan

52 Mulaudzi v Old Mutual Insurance Company (South Africa) Limited and Others, National Director
Public Prosecutions and Another v Mulaudzi [2017] ZASCA 88; 2017 (6) SA 90 (SCA).
53 Para 34.
54 South African Roads Agency Limited v Cape Town City [2016] ZASCA 122; 2017 (1) SA 468
(SCA).
55  Para 81.

Municipality56 With some hesitation, reservations and reluctance, I turn
now to consider the merits of the case.

The merits of the case: the lawfulness of the agreement

[135] I have previously indicated that I consider it to be an error of law to
elide or conflate the presumption of unlawfulness when it comes to
determining locus standi with the determination of unlawfulness itself,
once it has been accepted that the applicant has standing. Leaving aside
the appellants’ ‘clean hands’ point, I accept, without any difficulty, that
the respondents have locus standi to bring the application. As Cameron J
said in Giant Concerts CC v Rinaldo Investments (Pty) Ltd and Others,57
it is a matter of logic.58 It is not a ‘smoke and mirrors’ exercise. Botha JA,
delivering the unanimous judgment of this court in Ritz Hotel Ltd v
Charles of the Ritz Ltd and Another,59 made it plain that the presumption
for the purposes of determining locus standi has nothing to do with the
substantive determination of the contested issues in the case.60

[136]  It is apparent from the judgment of the court a quo, as well as the
heads of argument of the parties that they were all in agreement that the
real issue in this case, overshadowing all else, is whether annexure SJN13
is lawful and therefore valid. Put differently, the fundamental point in

56 Asla Construction (Pty) Ltd v Buffalo City Metropolitan Municipality [2017] ZASCA 23 (24 March
2017).
57  See Giant Concerts CC v Rinaldo Investments (Pty) Ltd and Others supra paras 32, 33 and 36
concerning the presumption when it comes to standing.
58 Para 32. See also Jacobs en ’n ander v Waks en andere 1992 (1) SA 521 (A) at 536A;  Ritz Hotel Ltd
v Charles of the Ritz Ltd and Another 1988 (3) SA 290 (A) at 307H. As Botha JA, delivering the
unanimous judgment of the court said in Jacobs at 536B: ‘Die veronderstelde nietigheid van die besluit
hou nie verband met die applikante se bewerings oor hoe hulle besigheidsbelange daardeur getref is
nie.’
59 Ritz Hotel Ltd v Charles of the Ritz Ltd and Another (supra).
60 At 536B.

contention has been whether the agreement offended against public
policy, constituting an unlawful contingency agreement. The first and
fourth appellants contend that, in order to reach that conclusion, the court
a quo needed to come to two further conclusions fundamental to the
appeal and did, in fact, do so. The first was that the common law
prohibition on contingency agreements was a widely recognised ‘norm’
or rule of practice in the attorneys’ profession. The second was that that
prohibition extended to fees charged for non-litigious work.

[137]  The first and fourth appellants contend that the court a quo took a
step in the right direction when it found that ‘the norms of the attorneys’
profession’ meant that the remuneration regime should be constrained by
the ‘well-known ethical norms applicable to legal practitioners’. They
argue that this interpretation would have meant nothing more than that
the Poswa order was designed to ensure that the remuneration of the
curator was reasonable, appropriate and did not venture in the sphere of
overreaching. The first and fourth appellants point out, however, that the
case made out by the respondents was not that the curator’s fee was
unreasonable but that the agreement was invalid for failing to comply
with the Poswa order which, in turn, required compliance with the
Contingency Fees Act 66 of 1997 (the CFA).

[138] Related to the point mentioned earlier concerning the nature of the
relationship between a curator and a pension fund, the first and fourth
appellants contend that the CFA does not apply to remuneration of
curators, even if they happen to also be qualified as legal practitioners. A
curator need not necessarily be an attorney (or any other kind of legal
practitioner) for the purposes of the CFA. The court a quo seemed to

accept that the work of a curator is different from that done by an
attorney, whether in litigation or outside of it. Accordingly, the first and
fourth appellants contend that the norm (if such it is) prohibiting
contingency fees as between attorney and client is irrelevant to the
lawfulness of the agreement.

[139] The first and fourth appellants accept that, of course, an attorney is
not entitled to overreach his client in any circumstances (whether litigious
or not), but  contend that this consideration goes to the reasonableness of
the attorney’s fee, not the manner in which the fee is determined. The
first and fourth appellants have submitted that the only sensible meaning
to be given to the phrase ‘in accordance with the norms of the attorneys’
profession’ in the Poswa order is that it sought to ensure that the curator’s
fees were reasonable, appropriate and not excessive. That, so their
argument went, did not imply that it prohibited the curator and the FSB
from determining the appropriate fee with reference to a percentage of the
assets recovered.  The first and fourth appellants argue that as there were
no other funds from which the fee could be paid, the fee could only be
determined with reference to the assets recovered. Correspondingly, in
their submission, it was appropriate and necessary in the circumstances to
set the curator’s fee as a percentage of the amounts recovered.

[140] The Law Commission considered the potentially negative
consequences of a contingency fee agreement in its working paper that
resulted in the Contingency Fees Act, but nonetheless supported the
promulgation of the Act.61 The CFA followed the pattern adopted in
England in 1990. The government of that country had published a Green

61 Law Society Working Paper 36, Project 93 ‘Speculative and Contingency Fees’ November 1996.

Paper on contingency fees in 1989. There has been a ‘sea change’, a shift
of massive proportions, in attitudes. In this regard it is instructive to read
Price Waterhouse Coopers v National Potato Co-operative,62 which deals
comprehensively with the history of contingency fees. The appellants
have argued that the report of the Law Commission and the CFA
represent a clear recognition in the Republic of South Africa that the
abuses associated with champerty are not the invariable result of all
varieties of contingency fee agreements.

[141]  In an old case, Incorporated Law Society of Natal v JV and FM
Hiller,63 it was recognised that fees for an attorney in non-litigious work
could be charged on a percentage or commission basis.64 Our common
law has never set its face against the payment of remuneration or, indeed
other kinds of payment being contingent upon the occurrence of an
uncertain future event. Were this not the case, most contracts subject to
suspensive conditions would be anathema.65 Payments that depend upon
the successful outcome of particular endeavours are commonly called
‘commissions’. Estate agents’ commission provide a ready example. Our
law has, however, historically taken an adverse view of what have been
termed ‘champertous’ agreements.66 These were agreements in terms of
which a person not party to litigation provided finance to enable a person
who was such party to litigate, in return for a share of the proceeds of the
action if that party was successful, or any agreement whereby a party was

62 Price Waterhouse Coopers Inc v National Potato Co-operative Ltd [2004] ZASCA 64; 2004 (6) SA
66 (SCA) paras 36-43.
63 Incorporated Law Society of Natal v JV and FM Hiller 1913 NPD 237.
64 At 244.
65  For a good summary of what an agreement subject to a suspensive condition is in our law, see
Command Protection Services (Gauteng) (Pty) Ltd t/a Maxi Security v South African Post Office Ltd
[2012] ZASCA 160; 2013 (2) SA 133 (SCA) para 10 and the other authorities therein cited.
66 See, for example, Price Waterhouse Coopers Inc and Others v National Potato Co-operative Ltd
supra para 26 and the authorities therein cited. See also Fluxmans Inc v Levenson [2016] ZASCA 183;
2017 (2) SA 520 (SCA) para 41.

said to ‘traffic’, gamble or speculate in litigation.67 This was, in any
event, not an absolute rule: bona fide assistance in the pursuit of a claim
that was believed to be just and where the return for such assistance was
not extortionate or unconscionable could pass muster.68

[142] The common law, both in the Netherlands and England, was
influenced by the Reformation.69 The theology of the Reformation was
strongly opposed to gambling.70 There were two main reasons for this: (a)
the income from gambling was ‘unearned’ and (b) there was much
empirical evidence that gambling could lead to financial ruin, casting
whole families into poverty.71 Indeed, gambling was associated with
‘drinking in taverns, whoring and singing obscene ballads’.72 In the face
of attitudes such as this, it is hardly surprising that, for several hundred
years, lawyers were expected to refrain from anything that smacked of
gambling.

[143]  As has become apparent, the attitude of both the courts and
legislatures, not only in South Africa but also in other parts of the world
has, over time, become more relaxed to the payment of fees in litigation
being dependent upon success therein.73 This resulted in the enactment of

67 Ibid.
68 Price Waterhouse Coopers Inc and Others v National Potato Co-operative Ltd (supra) paras 27 and
28.
69 See for example Becker S, Pfaff S and Rubin J ‘Causes and Consequences of the Protestant
Reformation’ (2015) 1105 Warwick Economic Research Paper Series ISSN 2059 4283 at 29 and 37.
70 See for example Berman H ‘The Spiritualization of Secular Law: The Impact of the Lutheran
Reformation’ (1999) 14 Journal of Law and Religion at 332.
71 See for example Binde P ‘Gambling and Religion’ (2007) 20 Journal of Gambling Issues at 153-156
http://www.camh.net/egambling/issue20/pdfs/03binde.pdf  (Accessed 5 May 2018).
72 See for example Binde P ‘Gambling and Religion’ (2007) 20 Journal of Gambling Issues at 156
http://www.camh.net/egambling/issue20/pdfs/03binde.pdf (Accessed 5 May 2018).
73 See, once again, for example, Price Waterhouse Coopers Inc and Others v National Potato Co-
operative Ltd supra para 23-52 and the authorities therein cited. See also Fluxmans Inc v Levenson
2017 (2) SA 520 (SCA) para 41.

the CFA. The CFA permits the payment of contingency fees in relation to
‘any proceedings’, which are defined as:
‘any proceedings in or before any court of law or any tribunal or functionary having
the powers of a court of law, or having the power to issue, grant or recommend the
issuing of any licence, permit or other authorisation for the performance of any act or
the carrying on of any business or other activity, and includes any professional
services rendered by the legal practitioner concerned and any arbitration proceedings,
but excludes any criminal proceedings or any proceedings in respect of any family
law matter.’

[144] The relaxation contained in the CFA relates to litigious matters.
The court a quo, however, found that ‘there can be no justification for
allowing legal practitioners to conclude contingency fee agreements in
relation to non-litigious work’74 and said that:
‘I find that contingency fee agreements in relation to non-litigious work are against
public policy for broadly the same reasons that such agreements are contrary to public
policy in relation to non-litigious work.’75
The court concluded that the remuneration agreement in question was
‘against public policy because it amounts to an unlawful contingency fee
agreement’ and that under s 171(1)(a) of the Constitution, it ‘must declare
the agreement to be unlawful and invalid’.

[145] It does not necessarily follow that, because the CFA applies to
litigious matters, a residual prohibition against contingency fees for legal
practitioners in non-litigious matters applies. The converse may be true:
The CFA was enacted to apply to litigious matters because the law
already permitted it in non-litigious matters subject, of course, to
reasonable limitations. Our law has never been impervious to the need for

74 Para 80 of the judgment.
75 Ibid.

contracts to take into account the vicissitudes of life, its contingencies. If
this were otherwise, not only would contracts subject to suspensive
conditions not generally have been legally possible but also, more
specifically, contracts of insurance, which have been recognised since
ancient times.76 Lawyers, especially those who do not practise as
advocates, do not confine their professional work to assisting others in
litigation: they do much else besides. The mischief at which the common
law concerning ‘contingency fees’ was directed was champerty, in
particular and gambling or speculating in litigation, in general.77 This is
more especially the case where practices of such a kind may prejudice the
weak and the vulnerable.78 There was no blanket prohibition on
remuneration being dependent on the outcome of an uncertain future
event. To the extent that certain other cases decided in the high court may
have suggested that any agreement between an attorney and client that
made fees payable on the happening of an uncertain future event were
‘unlawful contingency fees’, these cases were wrongly decided.79

[146]  Legal practitioners, like justice itself, are not cloistered in their
virtue. There is no good reason why they should not, in appropriate
circumstances unrelated to litigation, be able to earn remuneration, which
is contingent upon the happening of an uncertain future event (a

76 J Voet Commentarius Ad Pandectas (1723) 1.5.4. (Translated by Sir Percival Gane in The Selective
Voet being the Commentary on the Pandects (1955). See also Wille’s Principles of South African Law,
9th ed, p786.
77 See Voet, supra; Command Protection Services (Gauteng) (Pty) Ltd t/a Maxi Security v SA Post
Office Ltd, supra, paras 23 to 52; Yannakou v Apollo Club 1974 (1) SA 614 (A) at 628H-629H and
Nichol v Burger 1990 (1) SA 231 (C) at 231J-238D.
78 Ibid.
79 See  for example SA Association of Personal Injury Lawyers v Minister of Justice and Constitutional
Development (Road Accident Fund, Intervening Party) [2013] ZAGPPHC 34; 2013 (2) SA 583) (GSJ)
paras 9 and 10. But see, by way of contrast, Headleigh v Private Hospital (Pty) Ltd t/a Rand Clinic v
Soller and Manning Attorneys and Others 2001 (4) SA 360 (W) at 371C-H. See, in particular,
Command Protection Services (Gauteng) (Pty) Ltd t/a Maxi Security v SA Post Office Ltd, supra, in
which the importance of freedom of contract and the generally careful restraint of the courts to render
contracts unenforceable on the grounds of public policy were emphasised in paras 23 and 44.

‘contingency fee’). In this regard, they will be on the same footing as so
many of their fellow citizens, who go about their business making an
honest living. There are powerful restraining factors operating against the
mischievous abuse of contingency fees by legal practitioners. In the first
instance, there is the constraint of a necessary consensus ad idem, an
agreement. Secondly, the courts will strike down any unconscionable
agreement on the basis that is contrary to public policy.80 Thirdly, the
profession itself may adopt guidelines and even regulation on the
question. Above all, sight must not be forgotten of the fact that, as
Cameron JA said in Brisley v Drotsky,81 ‘shorn of its obscene excesses’,
contractual autonomy is part of our core constitutional values of freedom
and dignity.82

[147]  As the judgment of the court a quo appears to recognise, the
pension fund had, at the relevant time, been stripped of all its assets.
Without an agreement of the kind in question, it would not, realistically,
have been possible for the fund to recover any of its previously held
assets, never mind pay fees in the ordinary course for this purpose.
Against the background of facts in this case, there was nothing wrong in
structuring an agreement on the basis that the curator would be
remunerated on the basis of a percentage of assets successfully recovered.
Opinions may vary on how generous the actual percentage may have
been but it was not necessarily unconscionably high in all the
circumstances of the matter.

80 See for example Safin (Pty) Ltd v Beukes 1989 (1) SA 1 (A) at 7I and 9A-C; Botha (now Griessel)
and Another v Finanscredit (Pty) Ltd 1989 (3) SA 773 (A) at 782J-783B; Brisley v Drotsky [2002]
ZASCA 35; 2002 (4) SA 1 (SCA) para 94; Healthcare Bpk v Strydom 2002 (6) SA 21 (SCA) para 8;
Price Waterhouse Coopers Inc and Others v National Potato Co-operative Lt, supra,  para 23.
81 Brisley v Drotsky, supra.
82 Para 94. See also Command Protection Services (Gauteng) (Pty) Ltd t/a Maxi Security v SA Post
Office Ltd, supra, para 44.

[148] Mention has been made earlier of the fact that the task of the
curator was no bare debt collection exercise. Some kind of comparative
analysis between the norms of the attorneys’ profession concerning debt
collection and the inputs, not only intellectual but also in terms of time
and money spent, when it comes to debt-collecting and curatorship
respectively is likely to be necessary before a final view can be formed in
the matter. No such evidence was put before the court. The onus was on
the respondents. No allegation of collusion between the FSB and the
curator was made. As a responsible organ of State, the FSB must be
presumed to have intended to act in the public interest.  Ex facie the
papers before the court, it cannot be concluded, in the words of s 6(2)(h)
of PAJA, that the agreement was so unreasonable that no reasonable
person could have entered into it. The test is a high one. In Bato Star it
was held that a court ‘should be careful not to attribute to itself superior
wisdom in relation to matters entrusted to other branches of
government’.83 In my opinion, a similar philosophy must apply in respect
of this court’s gaze upon the agreement.

[149]  Accordingly, there is no reason to grant condonation or, put
differently, to grant an extension to the 180 day time period within which
the respondents should have mounted their challenge to the agreement.
In the result, in my opinion, the case of the respondents should fail and
for reasons that are not only incontestably substantive but also far deeper
than merely being out of time – if such a point can be ‘mere’.

83 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others, supra,  para 48. See also
Koyabe and Others v Minister of Home Affairs and Others (Lawyers for Human Rights as Amicus
Curiae) [2009] ZACC 23; 2010 (4) SA 327 (CC) para 36.

Conclusion

[150]  In my opinion, the reasoning and conclusions of the court a quo
were, accordingly, wrong. Nothing in this judgment should be construed
as giving an imprimatur to the scale of fees of the curator. The
respondents should  have failed because they approached the court out of
time and on a basis that was fatally flawed. Accordingly, in my opinion,
the appeal should have been upheld, with costs, including the costs of two
counsel. The orders of the  court a quo should have been  set aside and
replaced with an order dismissing the application with costs, including
the costs of two counsel.

______________________
N P WILLIS
Judge of Appeal

Appearances

For first and fourth appellants: C D A Loxton SC (with him A
Milovanovic)
Instructed by:
Assheton-Smith Incorporated, Cape Town
Lovius Block, Bloemfontein.
For second and third appellants: J H Dreyer SC (with him J Bleazard)
Instructed by:
Polson Attorneys, Johannesburg

Rosendorff Reitz Barry, Bloemfontein.
For fifth and sixth appellants: Q Pelser SC (with him E L Theron SC)
Instructed by:
Rooth & Wessels Inc, Pretoria

Phatsoane Henney Attorneys, Bloemfontein
For respondents:   A Subel SC (with him  W J De Bruyn)

Instructed by:
Cowan - Harper Attorneys, Johannesburg
Pieter Skein Attorneys, Bloemfontein.