THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable

Case no: 857/2017
In the matter between:

MANTIS INVESTMENT HOLDINGS (PTY) LTD
APPELLANT

and

EASTERN CAPE DEVELOPMENT CORPORATION
FIRST RESPONDENT

MASTER OF THE HIGH COURT PORT ELIZABETH
SECOND RESPONDENT

W DE JAGER NO
THIRD RESPONDENT

C A SCHROEDER NO
FOURTH RESPONDENT

Neutral citation:  Mantis Investment Holdings (Pty) Ltd v Eastern Cape Development
Corporation & others (857/2017) [2018] ZASCA 95 (1 June 2018)

Bench:
Ponnan, Swain and Dambuza JJA and Davis and Mothle AJJA

Heard:
22 May 2018

Delivered:
1 June 2018

Summary:
Company in liquidation – issue of subpoenas by Master – set aside.

_____________________________________________________________________

ORDER
______________________________________________________________________

On appeal from: Eastern Cape Local Division of the High Court, Port Elizabeth
(Mbenenge J sitting as court of first instance):

The appeal is dismissed with costs.
______________________________________________________________________

JUDGMENT
______________________________________________________________________

Ponnan JA (Swain and Dambuza JJA and Davis and Mothle AJJA concurring):

[1] This appeal has its genesis in a suretyship issued by a company previously
known as Mantis Group Holdings (Pty) Ltd, now known as No 1 Watt Street (Pty) Ltd
(the company in liquidation), in favour of the first respondent, the Eastern Cape
Development Corporation, in respect of moneys loaned and advanced to the Bushman
Sands Developments (Pty) Ltd (Bushman Sands).
[2] Bushman Sands was unable to repay the amount due to the first respondent
and as a result it instituted action in the Eastern Cape Local Division of the High Court,
Port Elizabeth (the high court) against the former and the company in liquidation
claiming respectively repayment of the loan and enforcement of the suretyship
undertaking in the amount of R19 357 645. Several defences were raised by the
company in liquidation to the claim of the first respondent, but shortly before the
commencement of the trial the appellant, Mantis Investment Holdings (Pty) Ltd, as the
sole shareholder of the company in liquidation, successfully applied for its liquidation.

[3] The third respondent, W de Jager NO and the fourth respondent, C A
Schroeder NO, were appointed the joint liquidators of the company in liquidation. At the
second meeting of creditors held at the offices of the second respondent, the Master of
the High Court, Port Elizabeth (the Master) on 19 July 2016 the claims of the appellant
in the sum of R2 491 455 and the first respondent in the sum of R19 357 645, were
admitted. Thereafter, on 4 August 2016 the appellant's attorney wrote to the liquidators
setting out a list of persons and documents they desired to have subpoenaed. That
request was forwarded by one of the joint liquidators to the Master, who on 12 August
2016 and in compliance with the request, summoned a number of employees (past and
present) of the first respondent to appear before him on 24 August 2016.
[4] Aggrieved by this turn of events, on 14 September 2016 the first respondent
launched an application in the high court seeking to review and set aside the subpoenas
issued by the Master. The application succeeded before Mbenenge J, who
subsequently granted leave to the appellant to appeal to this court.

[5] In arriving at his conclusion, Mbenenge J identified the issue for determination
thus:
‘At the hearing before me the issue for determination crystallized to one of interpretation
and procedure. It was contended, by Mr Buchanan for the applicant, that after the applicant’s
claim was, despite opposition from the second respondent’s camp, allowed as proven by the
first respondent without the second respondent invoking the provisions of s 44(7) and asking for
an interrogation, the appropriate procedure for revisiting and expunging a proved claim is that
set out in s 45(3), which has not been complied with in the instant matter; the issuing of
subpoenas without compliance with the requirements of s 45(3) has rendered the issuing of the
subpoenas unlawful. Mr Beyleveld, for the second respondent, argued to the contrary, pointing
out that, upon its proper construction, s 44(7) accords the second respondent the right to
interrogate a creditor who has proved a claim for purposes of determining “sufficient facts to
convince the liquidator to then invoke the provisions of s 45(3),” which is not where the
impugned proceedings are at this stage.’
The learned judge then proceeded to a consideration of ss 44(7) and 45(3) of the
Insolvency Act 24 of 1936. However, as I shall attempt to show, there is an antecedent
question that ought to have occupied the attention of the high court. As that question is

dispositive of the appeal, it is unnecessary to consider whether that court was correct in
its interpretive exercise. This should not be construed as an endorsement of the
correctness of the high court’s approach on that score.

[6] The very essence of our Bill of Rights is that an individual should not be
subjected to unreasonable intrusions on their liberty or the privacy of their person,
property or effects. The Master has no reservoir of power outside the statutory
instruments that authorise an intrusion upon those rights and thus no general authority
to make an order that impinges on those rights. A subpoena, even one at the hands of
the Master, is a significant invasion of the rights of an individual and must therefore be
exercised within certain clearly defined limits.

[7] The request from the appellant’s attorney to the co-liquidator for the employees
of the first respondent and for all documents relating to the grant of the loan facility to be
subpoenaed was forwarded by the latter to the Master. The request itself was
unmotivated. Although no statutory provision was alluded to in support of the request,
one would have been forgiven for thinking that it is to the provisions of the Insolvency
Act that one had to look. Nor was there any articulation in the request as to the source
of the envisaged power to be exercised by the co-liquidator or the Master. In simply
forwarding the request to the Master, the co-liquidator did not bring an independent
mind to bear on the application. Rather, he appears to have contented himself in acting
as no more than a mere conduit.

[8] In acceding to the request of the co-liquidator, the Master invoked ss 415 and
417 of the Companies Act 61 of 1973. Neither the Master nor the liquidator, who
forwarded the request to the Master, deposed to affidavits in this matter. It is thus
unclear what the legal basis was for the request to the Master or why the latter thought
that ss 415 and 417 of the Companies Act found application. But, even if those
provisions did apply, as Berman J pointed out in Foot v The Master:1

1 Foot v The Master unreported judgment delivered on 23 July 1993 in the Cape Provincial Division, cited
with approval in Laskarides v German Tyre Centre (Pty) Ltd (In Liquidation) and others NNO 2010 (1) SA
390 (W) at 393F-394A. See also P M Meskin Insolvency Law (1990) Service Issue 49 at 8-7.

'Now to oblige a person, not an officer or director of a company in the course of being
wound-up, to appear at a public enquiry held to enquire into the business and affairs of that
company is a serious matter, not one lightly resorted to. It is an obligation, the performance of
which is demanded under threat of imprisonment if not carried out, it is an invasion of an
individual's privacy which is countenanced only under specific conditions and specific
circumstances. It requires a person to "bare his soul" in public, and a person who is authorised
to require the attendance of such a person for the purposes of interrogation must of necessity
invoke this authority and exercise this power circumspectly, after due and proper consideration
as to the need for such interrogation, the aim, ambit and purpose thereof and to ensure that the
person concerned is not called for the examination on matters extraneous to the enquiry. That
person, in this case the master, in considering whether to require the attendance of a particular
person at an enquiry in terms of s 415 of the Act, must apply his mind to what may lawfully and
relevantly be required of a proposed "interrogee" by way of oral evidence and delivery of books
and records and other documentation. He (the master) is not the tool or agent of the liquidator,
obliged to carry out the latter’s instructions; the master may take advice and may consult the
liquidator, but calling for the attendance of a person at an enquiry under s 415 of the Act, he is
his own man, performing a duty and exercising a right imposed and granted him by statute and
he is required to bring an independent mind on the need for an enquiry and for an interrogation
to be conducted thereat and as to the manner in which this is to be carried out.'

[9] None of those considerations appeared to weigh with the Master, who performed
a mere rubber-stamping function in this case. It follows that the subpoenas could not
stand and they were correctly set aside by the high court.

[10] In the result the appeal is dismissed with costs.

_________________
V M Ponnan
Judge of Appeal

APPEARANCES:

For Appellants:

T Strydom SC (with him T Mkhwanazi)

Instructed by:

Ndobela & Lamola Incorporated, Pretoria

Honey Attorneys, Bloemfontein

For Respondent:

GJ Marcus SC (with him JB Currie)

Instructed by:

Adams & Adams, Pretoria

Phatshoane Henney Attorneys, Bloemfontein