THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 581/2015
In the matter between:
LEIGH WILLIAM ROERING NO

First Appellant
MABATHO SHIRLEY MOTIMELE NO
Second Appellant
and
QEDANI MAHLANGU

First Respondent
THE MASTER OF THE SOUTH
GAUTENG HIGH COURT

Second Respondent
COMMISSIONER ADVOCATE
CHARLES SCOTT STEWART

Third Respondent

Neutral citation: Roering and Another NNO v Mahlangu (581/2015)
[2016] ZASCA 79 (30 May 2016)
Coram:
WALLIS, WILLIS, SALDULKER and ZONDI JJA and
TSOKA AJA
Heard:
20 May 2016
Delivered: 30 May 2016
Summary: Company law – Enquiry in terms of ss 417 and 418 of the
Companies Act 61 of 1973 – summons to attend – application to set aside
summons – abuse of process – what constitutes – fact that the issues
canvassed may overlap with issues in pending or contemplated civil
litigation not as such a ground for inferring abuse.

ORDER

On appeal from:  Gauteng Local Division, Johannesburg of the High
Court (Mosikatsana AJ sitting as court of first instance):
The appeal is upheld with costs.
The order of the High Court is altered to read as follows:
„The application is dismissed with costs.‟

JUDGMENT

Wallis JA (Willis, Saldulker and Zondi JJA and Tsoka AJA
concurring)

Introduction
[1] In June 2007 the Department of Health, Gauteng (the Department)
concluded a service level agreement with 3P Consulting (Pty) Ltd (3P
Consulting) in terms of which 3P Consulting was obliged to establish a
Project Management Unit for the Department. On 23 March 2009 the
agreement was extended for a further three years. After the April 2009
general election, the first respondent, Ms Qedani Mahlangu, was
appointed as the member of the executive council (MEC) for health in
Gauteng. Shortly thereafter a review of projects occurred and on 1 July
2009 the Department wrote a letter to 3P Consulting stating that it would
no longer perform in terms of the extended agreement. According to Ms
Mahlangu‟s affidavit this was „due to serious allegations of impropriety
as well as irregularities in the award as well as the extension of the
agreement‟.

[2] After that there was extensive litigation between the parties. On 18
February 2010 the South Gauteng High Court (Lamont J) granted a
declaration that the services agreement between 3P Consulting and the
Department was validly concluded and extended. However, he refused to
grant judgment for payment of certain invoices that 3P Consulting alleged
were due, owing and payable and remained unpaid. He held that it was
disputed that these amounts were in fact payable. However, he made it
clear that this was no more than a finding of absolution from the instance,
leaving 3P Consulting free to pursue the claim in other proceedings.

[3] The Department‟s appeal to this court against that decision failed1
and on 7 February 2011 the Constitutional Court refused leave for a
further appeal. On 13 October 2011, 3P Consulting instituted application
proceedings against the Department claiming payment of some
R99 million.  It is not apparent from the notice of motion whether this
related only to amounts allegedly due to it prior to 1 July 2009, or
whether it included amounts said to have become due thereafter. Counsel
was not in a position to enlighten us in that regard. If they were the same
claims as had been advanced before Lamont J, it was unclear on what
basis proceedings were again pursued by way of application instead of
action. Be that as it may, the Department defended the application.
According to Ms Mahlangu, its grounds for doing so were that „it
received no value, the contract documents and other related documents
are irregular and that the entire action is tainted by fraud‟. Not
surprisingly in the circumstances the application was referred to trial, but,
before the trial could proceed, 3P Consulting was placed in provisional

1 MEC for Health, Gauteng v 3P Consulting (Pty) Ltd  [2010] ZASCA 156; 2012 (2) SA 542 (SCA).

and then final liquidation. The present appellants are its duly appointed
liquidators.

[4] The only significant asset of 3P Consulting was its claim against
the Department. The liquidators obviously had no personal knowledge of
that claim or of the grounds for its defence. They accordingly sought and
obtained leave from the Master of the South Gauteng High Court2 for an
enquiry to be convened pursuant to the provisions of ss 417 and 418 of
the Companies Act 61 of 1973 (the Act).3 Their purpose in doing so was
to gather information and make an informed decision on whether or not to
continue the litigation. After hearing the evidence of a number of
witnesses the liquidators formed the view that Ms Mahlangu would be
able to provide important information relating to 3P Consulting‟s
dealings with the Department. They accordingly asked the commissioner4
to authorise and issue a summons for Ms Mahlangu to appear before the
commissioner and give evidence as part of the enquiry.

[5] The present litigation arises from the commissioner‟s decision to
accede to that request. I will deal with Ms Mahlangu‟s response to the
summons in greater detail later in this judgment. It suffices for present
purposes to record that she applied to the Gauteng Local Division,
Johannesburg of the High Court for an order setting it aside as an abuse
of process. That application was granted by Mosikatsana AJ. This appeal
is with his leave.

2 The Master is the Second Respondent in this appeal but has played no part in the proceedings either
here or in the High Court.
3 Although this Act was repealed by the Companies Act 71 of 2008 the provisions of Chapter 14 of the
old Act, which includes ss 417 and 418, remain in force by virtue of Item 9(10 of Schedule 5 to the
new Act.
4 The Commissioner is the third respondent in this appeal but, like the Master, has played no role in the
proceedings in either this court or the High Court.

Proceedings at the commission
[6] An odd feature of this case is that, when she was initially
summoned to give evidence to the commission, Ms Mahlangu did not
regard the summons as an abuse and indicated that she wished to be as
helpful as possible. She appeared on 29 July 2013, together with
Mr Lekabe, the State Attorney, South Gauteng, and asked for a brief
postponement in order to enable her to be properly prepared. She
explained that she had moved on from the Department of Health and had
filled two other offices as a member of the executive council in the
Gauteng administration since then, including her current position as the
MEC for Infrastructural Development. Accordingly, she was not in
possession of any files from her former department and wanted the
opportunity to refresh her memory before testifying. Mr Lekabe
explained that it „would make no sense for her to come here and sit here
and keep on saying: “I can‟t remember. I can‟t remember.” It will defeat
the purpose of the enquiry.‟

[7] At one stage in the proceedings Ms Mahlangu herself intervened to
plead for a postponement. She asked the commissioner to give her the
benefit of the doubt that she came before him „with good intentions‟. She
explained her position as follows:
„So all I‟m simply asking for is to let me just go through all the necessary things that
will help me to remember what would have happened in the meetings that I would
have presided over. As in all the management meetings I‟ve had, and on the basis of
that and any other thing that I would remember, so that I come here prepared and I
will be able to answer you diligently and honestly.‟
She asked for a few days so that she could go back and prepare. Mr
Lekabe chimed in and told the commissioner that:

„Ms Mahlangu wants to come here and assist this enquiry. That is what she wants to
do, but provided she is prepared to do so.‟

[8] In response to these pleas the enquiry was adjourned to
27 August 2013. On that day Ms Mahlangu did not appear and a medical
certificate was tendered on her behalf. But five people appeared to
represent her. Two were officials, one a legal adviser in the Department
of Infrastructure Development and the other a legal adviser in the
Department of Health. Two were from the firm of attorneys that
represented her in this appeal and one was an advocate. Two other people
were present from the anti-corruption task team although their role was
obscure. On this occasion the enquiry was adjourned to 15 October 2013.
Although the merits of the summons were not discussed, it was indicated
that it was unnecessary to issue a fresh summons. There was no
suggestion that summoning Ms Mahlangu was an abuse.

[9] In the circumstances, it must have come as something of a surprise
to the commissioner and the liquidators when, shortly before 15 October
2013, they were confronted with an urgent application for an order that
Ms Mahlangu be excused from attending the enquiry pending an
application to set aside the summons as an abuse, joined with an
application for a penal costs order against anyone opposing the
application. An interim order was granted on 15 October 2013 and, as
noted above, a final order setting aside the summons was made on
26 January 2015.

[10] There is nothing in the papers to indicate what caused this change
of heart on the part of Ms Mahlangu. Counsel endeavoured to explain it
from the bar on the basis that between the first and the second sessions of

the enquiry she changed legal advisers. There are two obstacles to
accepting that contention. The first is that it nowhere appears in the
affidavits where one would have expected to find an explanation. While
there is reference to her changing legal advisers, she does not say that the
advice she obtained from her new advisers was different from that of her
original legal team. The second is that the new legal team gave no
indication to the commissioner and the liquidators that there was any
problem with or objection to the summons. As matters stand it is
unexplained. That does not mean that she cannot contend that the issue of
the summons was an abuse. But, in the light of her original co-operative
attitude, it does indicate that her allegations of abuse must be scrutinised
with care, as they may have been raised purely in an endeavour to avoid
being examined and not because the allegations of abuse are genuine.

The claim of abuse
[11]     Ms Mahlangu claimed in her founding affidavit that the
liquidators wished to use the enquiry proceedings „to obtain information
from me to bolster its case against the Gauteng Province‟.  She went on to
contend that it was „unfair, prejudicial and detrimental to fair play in any
litigation process‟ to permit one of the parties to use the mechanism of an
enquiry under the Act „to gather information from a representative of the
other party (and against the wishes of the other party) to build or better its
case in civil litigation‟. This she characterised as an abuse.

[12] Although at points in the affidavits there are hints that Ms
Mahlangu did not possess any information relevant to the dealings
between the department and 3P Consulting, these hints were belied by
statements from her own mouth.  One cannot gather information from
someone who does not possess information. Indeed, had that been the

case one cannot see why she would have been reluctant to testify. When
asked she could simply have told the commissioner that she had no
information regarding the issues under investigation. No doubt she might
have been able to point to relevant officials who might have had
knowledge, but beyond that the whole matter could have been disposed of
relatively quickly and painlessly.

[13] In fact that was not the position. It emerged that she was concerned
that the information she had, or her lack of information on important
issues, might bolster the liquidators‟ case. The statements in her affidavits
quoted earlier in paragraphs 1 and 3, dealing with the reasons for the
Department attempting to avoid the contract and the defence to the
monetary claims, supported the conclusion that she had knowledge of
these matters. So did her statements when she first appeared before the
enquiry. In her capacity as MEC she chaired the meetings at which these
matters were discussed and decisions were taken. Counsel accepted that
she had knowledge of matters relevant to the Department‟s dealings with
3P Consulting in regard to this contract and this claim. He went so far as
to say that she was a central witness for the Department‟s case.

[14] In regard to the liquidators‟ purpose in asking for Ms Mahlangu to
be summoned to the enquiry, Mr Leigh Roering, the first appellant,
deposed to the affidavit on behalf of the liquidators. He explained that the
reason for 3P Consulting going into liquidation was its non-receipt of the
money claimed in the pending litigation, which resulted in it being unable
to pay its creditors. In the light of the evidence of the witnesses who had
testified thus far in the commission, he said that the liquidators had
obtained insight into the affairs of 3P Consulting, which had led them to
the conclusion that Ms Mahlangu could give them important information

in regard to its relationship with the Department. While the nature of that
information was not specified, the commissioner filed a report in which
he said that he was at all times of the opinion that Ms Mahlangu was a
person capable of giving information concerning the trade, dealings,
affairs and property of the company in liquidation. That information must
have related to the company‟s dealings with the Department.

[15] In her replying affidavit Ms Mahlangu did not challenge these
statements by Mr Roering and the commissioner. She complained of the
failure to include a copy of the application made to the Master before the
commission was established, although, as her challenge was to the
summons addressed to her and not the decision of the Master to establish
the commission in the first place, that was hardly relevant. She said that
the application was necessary in order to determine whether the
commissioner was justified in issuing the summons, but failed to explain
why this was so. She said that there was no evidence that the former
directors of 3P Consulting were unwilling to assist the liquidators. But
that did not meet the point that the liquidators and the commissioner had
formed the view that she was in possession of relevant information. As
regards the commissioner‟s report she complained that it did not take the
form of an affidavit. That ignored the well-established practice of
functionaries such as the Master or the Registrar of Deeds, or persons
conducting enquiries, such as commissioners or arbitrators, placing
information before a court by way of a report rather than an affidavit. It is
only if the contents of the report become controversial that an affidavit is
called for. Had Ms Mahlangu brought review proceedings, a matter with
which I deal at the conclusion of this judgment, the commissioner might
have been obliged to act differently.

[16] On the face of it the liquidators had every reason to think that
Ms Mahlangu was in a position to give information to the commissioner
about the alleged irregularities in the award and extension of the contract
that led to the attempt to cancel it. She would be able to say on what
factual basis the Department claimed that it received no value in respect
of the invoices that are the subject of the claim in the application that has
been referred to trial. As the political head of the Department at that time
she would be best placed to given an overview of the information on the
basis of which the relevant decisions were taken. These were obviously
relevant to the liquidators‟ task. They needed to know the foundation for
the contention that the documents were irregular and the claim tainted by
fraud before they advised creditors whether to proceed with the trial and
incur the expense of doing so.

[17] Essentially, Ms Mahlangu contended that obtaining information on
those matters was an abuse of process in the light of the application
claiming the sum of R99 million from the Department. In argument both
of her counsel repeatedly returned to the proposition that, because there
was pending litigation in which she would be a central witness for the
Department, it was an abuse of process to require her to give evidence at
the enquiry. They claimed that it would confer an improper advantage on
the liquidators in pursuing the litigation. This argument was advanced
without any reference to the facts or any evidence that, in the particular
circumstances of this case, requiring Ms Mahlangu to give evidence
would cause any special or particular harm to her or to the Department in
the conduct of its case, assuming that the litigation proceeds. There was
no evidence to show that the liquidators were already in possession of the
information they wished to obtain from her, or that this could be obtained
from the former officers of 3P Consulting. We were told that there was

evidence available to the liquidators in the form of the affidavits filed in
the application, but those were not placed before us to illustrate the
proposition that summoning her to the enquiry was an abuse.

[18] Stripped of the emotive language in which the argument was
couched, it amounted to no more than this: In any situation where
litigation by the liquidators is underway or contemplated it would be an
abuse for a potential witness for the other party to that litigation to be
summoned to an enquiry in terms of ss 417 and 418 of the Act to be
questioned about matters bearing upon that litigation. The proposition is
extreme. It would mean that in any situation where liquidators were
considering whether to pursue a claim instituted by the company before
its liquidation, whether they came on the scene after litigation had
commenced or whether they were contemplating instituting such
litigation, it would constitute an abuse were they to seek to examine a
potential witness for the other party at an enquiry under the Act.

[19] If correct, the ramifications of this would be significant for the task
of liquidators of companies and trustees of insolvents. If it were an abuse
in this instance to summon Ms Mahlangu and examine her, merely
because she was a potential witness in the pending litigation, then, by
parity of reasoning, it would be an abuse in any other similar case. There
is no reason to distinguish Ms Mahlangu‟s position and this litigation
from any other possible witness and any other litigation. And it is not
apparent that the position would be altered if the litigation were not actual
but merely potential. Once the spectre of future litigation arose it would
be an abuse to seek to bring a potential party or a witness for the other
side to an enquiry and examine them in regard to issues bearing upon that
litigation. Against that background I turn to consider the law on this topic.

The law
[20]   The necessity in bankruptcy proceedings for a means whereby
liquidators or trustees can investigate the financial position of the
insolvent or insolvent company has long been recognised. It can be traced
back to s 117 of the Bankrupt Law Consolidation Act 1849 (12 & 13 Vict
c 106), which provided that a bankrupt could be examined by the court:
„touching all matters relating to his trade, dealings, or estate or which may tend to
disclose any secret grant, conveyance or concealment of his lads, tenements, goods,
money or debts …‟
Such enquiries were made available in the case of companies in 1862 and
were first imported into South African legislation in 1868. They have
remained part of our law ever since.5 The Constitutional Court has
affirmed the constitutional legitimacy of such provisions.6

[21] Section 418, read with s 417, of the Act provides that, where a
company in liquidation is unable to pay its debts, an application may be
made to the Master for an examination or enquiry relating to the affairs of
the company. Section 417(1) sets out the permissible scope of the
enquiry. Any person who is known or suspected to have in their
possession any property of the company, or is believed to be indebted to
the company, or any person deemed capable of giving information
concerning the trade, dealings, affairs, or property of the company may be
summoned to give evidence or produce documents. The potential scope
of such an enquiry is extremely wide. In the present case it would
encompass all the issues surrounding the claim by 3P Consulting against

5 The history is traced in Ferreira v Levin NO and Others; Vryenhoek and Others v Powell NO and
Others [1995] ZACC 13; 1996 (1) SA 984 (CC) (Ferreira) paras 115 to 119. It is possible that the first
enactment of such provisions was even earlier than the Victorian era. See Re Excel Finance
Corporation Ltd John Frederick Worthley v Richard Anthony Fountayne England [1994] FCA 1251;
(1994) 124 ALR 281, para 27 (Excel Finance).
6 Bernstein and Others v Bester and Others NNO [1996] ZACC 2; 1996 (2) SA 751 (CC) (Bernstein).

the Department. After all, that claim was the main, if not the sole, asset of
the company and an enquiry into it would be one related to the dealings,
affairs and property of the company. An initial submission that the
validity of the claim did not come within the permissible scope of an
enquiry in terms of s 417(1) was abandoned when counsel accepted that
the claim was an asset of 3P Consulting and that it was therefore
legitimate to enquire into its validity.

[22] The Master is entitled to appoint a commissioner to conduct the
enquiry. That is what the Master did in this case when he appointed Mr
Stewart as the commissioner. Once appointed the commissioner may
summon witnesses and require the production of documents. The
liquidators, creditors, members and contributories may be present and
represented at the enquiry and are entitled to interrogate any witness,
provided the scope of the interrogation is restricted to matters falling
within s 417(1). It would be impermissible, for example, for a member to
examine a witness with a view to establishing that they had a claim for
defamation against that witness. A person summoned to an enquiry is
entitled to legal representation and to be furnished with a copy of their
evidence. A witness is obliged to answer any question put to them, but
incriminating answers are not admissible in evidence against them in later
criminal proceedings.7

[23] In Ferreira Justice Ackermann spelt out the purposes of an
enquiry.8 One of those purposes is to investigate the validity of claims by

7 See para 1 of the order in Ferreira para 157. The section has since been amended. See s 417(2)(c) of
the Act. It excludes the use in criminal, but not civil, proceedings of incriminating answers and
incriminating derivative evidence obtained in consequence of those answers.
8 Ferreira paras 122 to 124. See also the summary in Bernstein para 16.

the company and to determine whether they should be pursued. It is
„obviously in the interest of creditors that doubtful claims which the
company may have against outsiders be properly investigated before
being pursued‟.9 The enquiry is the mechanism by which liquidators can
properly investigate „doubtful claims against outsiders before pursuing
them‟.10 Importantly:
„It is permissible for the interrogation to be directed exclusively at the general
credibility of an examinee, where the testing of such person's veracity is necessary in
order to decide whether to embark on a trial to obtain what is due to the company
being wound up.‟11

[24] Had it not been for the form the argument took, the statement of
principle set out above would have sufficed for the purposes of this case.
But counsel seized upon a passage from an English case in the Court of
Appeal in regard to the purpose of an enquiry and deployed it in support
of an argument that the ambit of the enquiry is more limited than that
which might be indicated by these statements of principle. The passage
comes from the judgment of Browne-Wilkinson V-C in Cloverbay,12 and
reads as follows:
„(T)he reason for the inquisitorial jurisdiction contained in s 236 is that a liquidator or
administrator comes into the company with no previous knowledge and frequently
finds that the company's records are missing or defective. The purpose of s 236 is to
enable him to get sufficient information to reconstitute the state of knowledge that the
company should possess.‟ (Emphasis added.)

9 Moolman v Builders & Developers (Pty) Ltd (in Provisional Liquidation): Jooste Intervening 1990
(1) SA 954 (A) at 960G-I quoted with approval in Ferreira para 123.
10 Bernstein para 16(e)(ii).
11 Bernstein para 16(f).
12 Cloverbay Ltd (Joint Administrators) v Bank of Credit and Commerce International SA [1991] Ch 90
(CA) at 102; [1991] 1 All ER 894 at 900, para 58.

[25] In referring to that passage in Bernstein,13 in the context of the
decision to convene an enquiry, Justice Ackermann said the following:
„The first consideration is that the purpose of the provisions is to enable the liquidator
to reconstitute the state of knowledge of the company in order to make informed
decisions. The purpose is not to place the company in a stronger position in civil
litigation than it would have enjoyed in the absence of liquidation.‟
Using this as his foundation, counsel contended that the information that
might be obtained by examining Ms Mahlangu would go beyond
reconstituting the state of knowledge of the company as at the date of
liquidation, and would place the company in a stronger position in the
pending litigation than would otherwise be the case. That was the basis
for his contention that summoning Ms Mahlangu to the hearing would be
an abuse. He relied on the judgment in Kebble14 in support of this,
although he overlooked the fact that in that case the court declined to set
aside a summons.

[26]  There is a twofold fallacy in this argument. The first is that it treats
Browne-Wilkinson V-C‟s statement of the statutory purpose as if it
reflected the only purpose for an enquiry. The second is that it treats the
obtaining of an advantage in civil litigation as a bar to the issue of a
summons. Neither is correct as a survey of authorities from various
jurisdictions reveals.

[27] As to the first of these propositions counsel found himself in good
company in that Hoffmann J (later Lord Hoffmann) had construed the
same passage in Cloverbay as imposing a constraint on the purposes for

13 Bernstein para 20.
14 Kebble v Gainsford and Others NNO 2010 (1) SA 561 (GSJ) paras 57 and 58.

which an enquiry could be ordered in England.15 He held that its effect
was to limit the purposes of an enquiry to obtaining the information „to
which the company was entitled from its officers and servants, past or
present, as a matter of contract or fiduciary duty.‟ But that view was held
to be incorrect by the House of Lords in Spicer & Oppenheim.16 Speaking
for the House, Lord Slynn of Hadley said:17
„I do not think that reading the judgment overall such a limitation to “reconstituting
the company‟s knowledge” was intended to be laid down in the Cloverbay case.
In any event for my part I do not think that such a limitation exists.‟

[28] That conclusion was justified when regard was had to the history of
provisions of this ilk and the construction they have been given down the
years by the courts. In Re Gold Co18 it was said:
„‟(T)he whole object of the section is to … enable assignees, who are now called
trustees, in bankruptcy to find out facts before they brought an action, so as to avoid
incurring the expense of some hundreds of pounds in bringing an unsuccessful action,
when they might, by examining a witness or two, have discovered at a trifling expense
that an action could not succeed.‟
Buckley J (as he then was), said in Re Rolls Razor Ltd:19
„It is, therefore, appropriate for the liquidator, when he thinks that he may be under a
duty to try to recover something from some officer or employee of a company, or
some other person who is, in some way, concerned with the company's affairs, to be
able to discover, with as little expense as possible and with as much ease as possible,
the facts surrounding any such possible claim.‟

15 British and Commonwealth Holdings plc (joint administrators) v Spicer & Oppenheim (a firm)
[1992] BCLC 314 at 320.
16 British and Commonwealth Holdings plc (joint administrators) v Spicer & Oppenheim (a firm)
[1992] 4 All ER 876 (HL)(Spicer & Oppenheim).
17 At 876a-b.
18 Re Gold Co (1879) 12 ChD 77 at 82. Quoted with approval in Bernstein para 22.
19 Re Rolls Razor Ltd [1968] 3 All ER 698 (Ch) at 700 approved in In Re Esal (Commodities) Ltd
[1989] BCLC 59 (CA) at 64 and cited with approval in Spicer & Oppenheim 883c-884d and Ferreira
para 124.

[29] A similar approach to the purpose for which the section may be
used is to be found in other jurisdictions having similar legislation
flowing from the same legislative history. In Hong Kong it has been
said:20
„… it is now settled that while one of the purposes … is to enable the company‟s
knowledge to be reconstituted, it is not the sole purpose of the provision … The
provision may be used to discover facts and documents relating to specific claims
against specific persons which the applicant has in contemplation and it is in itself no
bar that the applicant may have commenced or may be about to commence
proceedings against the proposed witness or someone connected with him …‟
(Emphasis added.)

[30] The position in New Zealand is the same. In Carrow Holdings,21
Heath J said:
„Generally speaking, a liquidator will not be prevented by the Court from convening
an examination simply because a firm decision to issue proceedings against the
proposed examinee has been made or, indeed, in circumstances where the proceedings
have, in fact, been issued.‟
In Re Smith (A Bankrupt)22 the New Zealand Court of Appeal dismissed
an application by the wife of the bankrupt to set aside a summons where
the purpose of the enquiry was to determine whether there was a claim
against her personally. It held that the purpose was to determine whether
to continue with existing proceedings against the wife with the same
knowledge that the wife had.23

20 The Joint and Several Liquidators of the New China Hong Kong Group Ltd and Others v Ernst &
Young & Others 2003] HKCFI 903; [2003] 3 HKLRD 799; [2003] 3 HKC 252 para 23. See also The
Joint Liquidators of Chark Fung Securities Co Ltd and Others v Chan Kwong Hung [2001] 2 HKC 335
at 339B.
21 Carrow Holdings Limited (in liquidation) v Sadiq HC [2008] NZHC 825 para 27
22 Re Smith (A Bankrupt) [1992] NZFLR 241 (CA) at 244-245.
23 Re Ex Ced Foods (formerly Cedenco Foods)(in liquidation) and Cedenco Ohakune (in liquidation)
[2012] NZHC 3037, para 66.

[31] In Australia the problem of a liquidator using an enquiry to
ascertain information about actual or potential litigation was dealt with by
Street J in the following terms: 24
„A liquidator needs information concerning his company just as much in connection
with current or contemplated litigation as in connection with other aspects of its
affairs. In using the statutory machinery of private examination he will in many cases
be gathering evidence as an ordinary and legitimate use of this procedure. ... In my
judgment it is immaterial in basic substance whether the private examination is sought
to be used by a liquidator to gather information in connection with proceedings he
believes he might be able to bring, proceedings he contemplates bringing, proceedings
he has decided to bring, and proceedings he has already brought. There is no presently
relevant distinction in substance between gathering information referable to
commencing proceedings and gathering information referable to continuing
proceedings.’

[32] The same approach to similar powers of enquiry is adopted in
Singapore. In W & P Piling25 Rajah V-C said:
„Section 285 is couched in extremely generous terms. It should not therefore be
interpreted in a constricted manner by reference to any apocryphal purposes. It clearly
cannot be used for any collateral purpose that affords no benefit to the company.
Other than that, it may be invoked for any proper purpose that can benefit the
company and which is within the statutory powers of the liquidator and the scheme of
the companies legislation. … Furthermore, a liquidator has no mandate to commence
litigation which has no real prospect of succeeding.‟
The learned judge went on to say that:
„Information may be sought and facts and documents discovered in relation to a
specific claim that the liquidator contemplates against the examinee or a related

24 Re Hugh J Roberts Pty Limited (In Liquidation) (1970) 2 NSWR 582 at 585, in a passage quoted
with approval by the Court of Appeal in Hong Kong Bank of Australia Ltd v Murphy (1992) 28
NSWLR 512 at 518 (Hong Kong Bank) and by Mason CJ in Hamilton v Oades [1989] HCA 21; (1988-
89) 166 CLR 486 at 497.
25  Liquidator of W & P Piling Pte Ltd v Chew Yin What and Others [2004] 3 SLR 164; [2004] SGHC
108 para 27. See also Pricewaterhousecoopers LLP and Others v Celestial Nutrifoods Ltd (in
compulsory liquidation) [2015] SGCA 20 paras 42 and 57.

entity. There is no rule that precludes the ordering of information against a proposed
witness or someone connected with him …‟

[33] I have no doubt that this approach correctly reflects the law in
South Africa. In Ferreira,26 Justice Ackermann cited Lord Slynn‟s
conclusion in Spicer & Oppenheim with approval. In Bernstein,27 he
specifically rejected the narrow understanding of Cloverbay that the
purpose of an enquiry was limited to reconstituting the state of
knowledge that the company should possess. It would be a work of
supererogation on my part to cite the countless cases in South Africa, of
which Bernstein was one, where the clear purpose of an enquiry was to
determine whether the company in liquidation had a sound claim against
a third party. The proposition by counsel that the purpose of the enquiry
must be so limited must be rejected.

[34]    The second aspect of counsel‟s proposition is more directly
connected to the issue of abuse. There is no doubt that courts have the
power, and indeed the obligation, to restrain the use of the power of
enquiry where it would constitute an abuse. The more difficult issue lies
in determining what constitutes an abuse. Counsel‟s argument was that it
is an abuse when the person sought to be examined is a potential witness
in future proceedings and as a result of the examination of that witness
the liquidators acquire insight into what the witness may say if called at
the trial. Unspoken, but lurking behind this submission, was a fear of the
potential risk that interrogation might extract valuable admissions from
the witness, or the witness might be shown to be flawed or unreliable.

26 Ferreira para 125.
27 Bernstein para 21.

[35] While the Constitutional Court in both Ferreira and Bernstein said
that our courts must be astute to prevent enquiries in terms of ss 417 and
418 from being used as an instrument of abuse, it did not seek to expand
on the meaning of that expression. But it did refer to Australian cases as a
helpful guide to the approach to be adopted by South African courts.
Thus it quoted with approval the following statement by Gleason CJ in
Hong Kong Bank:28
„(w)hile the Court would not permit a liquidator, or other eligible person, to abuse its
process by using an examination solely for the purpose of obtaining a forensic
advantage not available from ordinary pre-trial procedures, such as discovery or
inspection, on the other hand, the possibility that a forensic advantage will be gained
does not mean that the making of an order will not advance a purpose intended to be
secured by the legislation.‟
Immediately after this Justice Ackermann added the following far-
reaching comment:
„The liquidator is entitled to obtain information, not only to ascertain whether she/he
has a cause of action, but also in order to assess whether the case is sufficiently strong
to justify spending the creditors' money in pursuit of it, and, conversely, whether there
is an adequate defence to a claim against the company.‟29

[36] What constitutes an improper forensic advantage will depend upon
the circumstances of each case. Summoning a witness in order to benefit
a third party, such as a creditor, in pursuing proceedings against that
witness or an entity that they represent, would be such a case. In Hong
Kong Bank the example was given of an attempt to summon a witness
with a view to destroying their credit as a witness or to „enable a dress
rehearsal of the cross-examination‟. Another example mentioned in Excel

28 Hong Kong Bank of Australia Ltd v Murphy (1992) 28 NSWLR 512 at 519.
29 Bernstein para 33.

Finance30 was of a summons directed at obtaining pre-trial discovery
when a discovery order had been refused in proceedings already on foot.
In Re Sasea Finance31 the court refused to consent to an enquiry where its
sole purpose was to extract „damaging admissions and unconvincing
justifications‟ for the purpose of a possible negligence claim against
auditors. Engineering an enquiry shortly before a trial in which the
liquidator is the plaintiff in order to obtain ammunition to attack the
defendant in the trial has been described as „a classic example of
harassment‟.32

[37] Where the evidential material is available to the liquidators from an
alternative source, or it can be obtained simply and expeditiously without
resort to the process of an enquiry, that will tend to show that the
liquidators have an ulterior motive in seeking to examine the witness and
that the commissioner should not have acceded to the request to summon
that witness. But the fundamental issue in determining whether there is
abuse is whether the enquiry is being used for a purpose not contemplated
by the Act. As it was put in Excel Finance:33
„Whether there will be, in a particular case, a use of the process or an abuse of it will
depend upon purpose rather than result. The consequence of an examination may well
be that the examiner has conducted a “dress rehearsal” of cross-examination which
may take place at a subsequent trial. The fact that the trial has commenced, or is
contemplated, may throw light upon the purpose. But merely because other
proceedings had been commenced, or are contemplated, would not involve, of itself,
an abuse of process.‟

30 Excel Finance para 76.
31 Re Sasea Finance Ltd [1998] 1 BCLC 559.
32 Botha v Strydom and Others 1992 (2) SA 155 (N) at 160C-E.
33 Excel Finance para 77.

[38]  Once it is accepted that a permissible purpose in causing a witness
to be summoned to an enquiry is to enable the liquidator to make an
informed assessment of the merits of a potential claim or defence to a
claim, it must follow that the fact that the individual concerned is a
potential witness in other civil litigation, actual or contemplated, is
neutral in determining whether the summons is an abuse. Something
more must be identified as constituting the abuse. It is inherent in the
process of such an enquiry that there is a possibility that the examination
of the witness will be advantageous in future litigation. It may generate
information that proves valuable in that litigation or helpful lines of
enquiry. It may demonstrate that a witness is a poor witness who is
unlikely to withstand cross-examination. Admissions may be made that
are of assistance. The inability of a witness to provide a credible
explanation for a transaction may be extremely helpful. As any
experienced practitioner knows, often what is important is not what the
witness can say, but what they are unable to say. Provided the underlying
purpose remains the proper one of assessing the merits of a claim or a
defence on an informed basis, if these advantages accrue to the liquidator
along the way they are not illegitimate.

[39]  Before leaving this topic there are two other factors that I should
mention as bearing upon an investigation into whether an enquiry, or a
summons to attend an enquiry, is an abuse. Hoffmann J (as he then was),
pointed out in Re J T Rhodes Ltd34 that the cases that describe the powers
of examination as redolent of the Inquisition or Star Chamber were drawn
from an era where the notion of personal privacy in regard to business

34 Re J T Rhodes Ltd [1987] BCLC 77 at 80. In Botha v Strydom supra at 159G-I they were described
as „Draconian‟. See also Jeeva and Others v Receiver of Revenue, Port Elizabeth and Others 1995 (2)
SA 433 (SE) at 443A-D.

dealings was more stringent than it is today and the powers of inspection
and examination that we now regard as normal in our modern highly
regulated commercial environment would have been regarded as
anathema. By contrast, our society is deeply concerned at the public level
with the consequences of corporate collapses, especially where that has a
broad social impact on employees and vulnerable investors.35 The general
public has a legitimate interest in knowing that, when companies are
liquidated, those who have warranted the reliability of financial reports
and those who promoted these public ventures will have to explain why
things went wrong. That suggests that courts should not too readily infer
that a summons to attend an enquiry is an abuse.

[40] The second factor is that the evidence obtained from a witness at
an enquiry will, in many instances, be inadmissible in later civil
proceedings. That will not necessarily be so where those proceedings are
brought against the witness personally, as may be the case in a claim
against a former director, but where those proceedings are brought
against an entity such as a company, a close corporation or a trust the
evidence given at an enquiry will usually be inadmissible against them.36
That is a considerable safeguard against abuse where the use to which the
evidence may be put is limited to assisting the liquidator to form a picture
of what occurred and investigating a possible claim.

Was the summons addressed to Ms Mahlangu an abuse?
[41] I have already summarised the contentions advanced on Ms
Mahlangu‟s behalf. They were unsupported by any evidence at all that

35 Bernstein para 23.
36 Simmons NO v Gilbert Hamer & Co Ltd 1963 (1) SA 897 (N) and O’ Shea NO v Van Zyl and Others
NNO [2011] ZASCA 156; 2012 (1) SA 90 (SCA) paras 19 to 25.

pointed to the summons being an abuse. At the outset she and the State
Attorney, South Gauteng, did not regard it as an abuse. She did not
indicate, even in broad terms, what evidence she was capable of giving in
regard to the dealings between 3P Consulting and the Department. It was
contended that the nature of that evidence emerged from the affidavits
filed by the Department in opposing the claim for judgment, but as those
affidavits were not placed before the court in these proceedings we do not
even know whether Ms Mahlangu was one of the deponents. Nor can we
know whether the areas that she can traverse in her testimony could be
adequately or better dealt with by others.37

[42] It was also suggested that this material would emerge in the course
of the trial, but that misses the point. The liquidators were seeking to
explore the matter, in order to determine what advice they should give the
creditors in regard to continuing the present litigation. They could not do
that properly, expeditiously or inexpensively by following the often
laborious processes of preparing for trial. Additionally, they did not have
the benefit, as they would in many other jurisdictions, of witness
statements furnished in advance of trial. Lastly, there was no guarantee
that Ms Mahlangu would testify at the trial, in which event the liquidators
would be compelled to litigate without knowing what light she could cast
on the dispute.

37 In argument there were suggestions that evidence might be better forthcoming from people such as
the Director-General of the Department, but no foundation was laid for this. There was a complaint in
the affidavit against a „senior representative of the other party to the litigation‟ being required to give
evidence. Enquiries as to whether it was permissible for „junior representatives‟ to do so and whether
Ms Mahlangu was standing upon her dignity attracted a hasty withdrawal. For a public representative
to adopt the stance that they were too important, or too busy, to attend at an enquiry, would be to deny
the legacy of our first president, the late President Mandela, who gave evidence and submitted to cross-
examination in the SARFU case, even though the decision to require him to do so was unfounded.
President of the Republic of South Africa and Others v South African Rugby Football Union and
Others 2000 (1) SA 1 (CC) paras 20-22 and 240-245.

[43] The suggested prejudice to the Department was not established. Ms
Mahlangu‟s evidence at the enquiry would, for the reasons dealt with
above, not be admissible against the Department. If, as she said, the
purpose was to obtain information from her to bolster the case against the
Department, she neither indicated what that information might be nor
gave any good reason why it should not be disclosed to the liquidators.
She said that she did not wish the liquidators „to gain inside knowledge I
have of my employer‟s business‟. Her perception that she is a mere
employee is curious. She is in fact an elected public representative,
appointed by the Premier of the province to hold the office of an MEC in
the province. That aside, she has not taken the court into her confidence
in regard to the nature of her knowledge, or why it may affect the
outcome of the litigation, or why it should remain confidential.

[44]    In short, there was no evidence at all to support Ms Mahlangu‟s
allegations that the summons addressed to her constituted an abuse. Her
contention that this was so was based on an erroneous understanding of
the circumstances in which a person may be summoned to attend and give
evidence at an enquiry under ss 417 and 418 of the Act. The liquidators
had clear and justifiable reasons for seeking her testimony. The
commissioner properly summoned her to attend. No abuse was involved.

[45] The court below was asked by Ms Mahlangu to approach the
matter on the basis that the liquidators had already decided to press ahead
with the litigation against the Department; that all the information it could
obtain from Ms Mahlangu was already to be found in the affidavits
delivered in those proceedings and that the purpose of summoning Ms
Mahlangu to the enquiry was to use it as a „trial run or “pre-hearing” of
the evidence to be led‟ in that litigation. Somewhat contradictorily, it was

also argued that she could not state definitively whether the work
contracted for had been performed and that she could not advance the
Department‟s case in regard to other irregularities. No finding was made
in regard to these submissions but none of them had any support in the
application papers before the court. What was before the court and
undisputed was the evidence of the liquidators that they had still to take a
decision on whether to proceed with the litigation and that the enquiry,
including calling Ms Mahlangu as a witness, was directed at giving
informed advice to creditors in this regard.

[46] Notwithstanding this the judge in the high court said that Ms
Mahlangu‟s relationship with 3P Consulting was at arm‟s length and
inherently adversarial. She accordingly „hardly qualifies as a person who
can shed light on the operations of 3P Consulting‟. Needless to say that
was factually incorrect and involved the wrong approach to the issue of
abuse. Equally incorrect was the view that „the enquiry may be abused to
gain pre-trial forensic advantages not permitted by rules of court to elicit
information that may be used to uncover the inherent strengths and
weaknesses in 3P Consulting‟s civil lawsuit against the Department‟. It
was not the potential for abuse, which should in any event be prevented
by the commissioner, but the existence of actual abuse that was relevant.

[47] As far as can be ascertained from the judgment the reason the
judge upheld Ms Mahlangu‟s application was his view that if the enquiry
proceeded „it will provide them with a pre-trial forensic tool not provided
by the rules of court such as discovery and inspection to weigh their
chances
of
success
at
trial‟.
That
involved
a
fundamental
misunderstanding of the purpose of an enquiry under ss 417 and 418. It
was not a proper basis for a finding of abuse. It follows that the appeal

must succeed, but before finishing this judgment it is appropriate for me
to make some remarks about the form of the proceedings in this case.

Form of proceedings
[48] Ms Mahlangu claimed an interdict preventing the commissioner
from compelling her to give evidence and an order setting aside the
summons.  Her case was then argued on the basis that it was a
straightforward application in which, provided she established the abuse
of which she complained, she was entitled to relief. The position of the
Master and the commissioner was disregarded. I am not satisfied that this
approach was correct. While courts have a power to intervene in such
proceedings and prevent them from being abused, that power cannot be
divorced from the provisions of the statute or the principles of our law
that apply to challenging decisions made in the exercise of statutory
powers.

[49] Ms Mahlangu‟s legal advisers may have been misled by the
reliance that has been placed on foreign cases, especially those from
England, in our own jurisprudence relating to such enquiries. As Justice
Kriegler warned in Bernstein38 too facile a reading of foreign legal
material is to be eschewed, because, when removed from their own
environment, they may mislead. In England and in several of the other
jurisdictions to which I have referred an enquiry of this type can only be
convened by order of court, as was formerly the position in this country.
As a result, the English cases, of which Cloverbay is a prime example, are
concerned with the question of when such an enquiry should be
convened. They are not dealing with the circumstances in which the court

38 Bernstein  para 133.

should overturn a decision to convene an enquiry on the grounds that it is
an abuse. In South Africa the Master is empowered by s 417(1) to
conduct such an enquiry or to appoint, in terms of s 418(1)(b), a
commissioner to conduct an enquiry. Experience teaches us that this is
now the normal way in which such enquiries are convened.39 The conduct
of the enquiry is then delegated to the commissioner who exercises the
statutory powers set out in s 418 of which one is the power to summon
witnesses to the enquiry and another of which is to regulate the
questioning of witnesses.40

[50] In the light of these provisions, where the Master has exercised the
power to convene an enquiry and appoint a commissioner to conduct it,
the position may be that such a decision can only be challenged by way of
judicial review.41 In any event, it is not simply a matter of the court
substituting its decision for that of the Master. As the cases demonstrate
some weight is to be attached to the decision of the Master and it may not
be overturned simply because the court disagrees with it. It can only be
set aside on limited grounds of which the one most likely to be relevant
here would be that it was unreasonable in the sense of being a decision
that a reasonable decision-maker could not reach.42 In this case the
Master‟s decision is not challenged. It must be taken therefore that the
convening of an enquiry into the affairs of 3P Consulting and the
appointment of Mr Stewart to act as commissioner was entirely justified.
There was nothing in the record to gainsay that conclusion.

39 Meskin Henochsberg on the Companies Act (5 ed, 1994, looseleaf, current ed Kunst, Delport and
Vorster) Vol 1, p 888 (Service Issue 32).
40 Section 418(1)(c) of the Act.
41 Leech and Others v Farber NO and Others 2000 (2) SA 444 (W) at 448F-H. The position appears to
be the same in Australia where a Commissioner of the Australian Securities Commission and not a
court that makes orders for the convening of an enquiry. See Excel Finance.
42 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism and Others [2004]
ZACC 15; 2004 (4) SA 490 (CC) para 44.

[51] The attack was instead directed at the decision by the
commissioner to summon Ms Mahlangu to attend and give evidence. But
that was not directly addressed in the papers. Instead it was attacked
obliquely on the basis that the motives of the liquidators in seeking to
have her summoned to the enquiry were improper. This is not a
permissible approach, because it is the commissioner who decides that a
witness is to be summoned, not the liquidators, although they may ask the
commissioner to do so. The position of the commissioner must be
distinguished from that of the liquidators and their motives. As Harms JA
pointed out in Jeeva:43
„The Commissioner, against whom no complaint has been laid, is the person who
conducts the inquiry. It is he who has to act in a quasi-judicial capacity. He has the
main duty to examine the witnesses. He has to regulate and control the interrogation.
Should he fail in his duty to apply the procedural fairness appropriate to this forum, an
aggrieved party may approach the Court for suitable relief …
… [t]he position of the liquidator is quite different. He, in this context, acts in
neither an administrative nor quasi-judicial capacity. He is not in a position of
authority vis-à-vis the witness. He does not determine or affect any of his rights. He
simply represents the company in liquidation at the inquiry. He is, or may be, an
adversary of the witness. As adversary he can have no higher duty towards his
opponent than any other litigant has.‟
Where there is no foundation for the commissioner to issue a summons
compelling a witness to attend an enquiry the commissioner‟s decision
may be challenged.

43 Receiver of Revenue, Port Elizabeth v Jeeva and Others; Klerck and Others NNO v Jeeva and Others
[1996] ZASCA 5; 1996 (2) SA 573 (A) at 579H–580B.

[52]     An enquiry under these sections of the Act has been said to be a
„complex administrative proceeding‟.44 Whether that is a correct
description is debatable.45 If there is to be a challenge to the conduct of an
enquiry that must either be a review falling under PAJA46 or a residual
category of review derived from the common law. In either event, the
proper way in which to challenge the summoning of a witness is by way
of review proceedings and the decision that falls to be attacked is that of
the commissioner not the liquidators.47 Any attack on the commissioner‟s
decision to summon a witness must give weight to the considered view of
the commissioner as to the necessity for that particular individual to be
summoned.48

[53]  Furthermore when an allegation is made, as was made here, that
the examination by the liquidators would involve an improper „fishing
expedition‟ the primary issue is whether the commissioner would permit
that. Here there was no suggestion that, had Ms Mahlangu given
evidence, the commissioner would not have exercised his powers to
prevent any abuse by the liquidators. Of course, instances may arise
where liquidators interrogating a witness at an enquiry may overstep the
permissible bounds of the enquiry and abuse their statutory rights. But an
aggrieved person, who is entitled to be legally represented, is entitled to

44 Schulte v Van der Berg and Others NNO 1991 (3) SA 717 (C) at 721A-B.
45 In Bernstein Ackermann J said that there was difficulty in seeing how such an enquiry can be
characterized as administrative action, (paras 96-98) although ultimately the question was left open
(para 99). The judgments of Kriegler J (para 131) and O‟Regan J (para 155) specifically refrained from
endorsing those doubts. There can be little doubt that the Master and the commissioner are exercising
public powers, but the debate is whether they are engaged in making decisions of an administrative
nature. See also Mitchell and Another v Hodes and Others NNO 2003 (3) SA 176 (C) at 185E-189C.
46 The Promotion of Administrative Justice Act 3 of 2000.
47 Without directly referring to the problem the judgments in both Gumede and Others v Subel SC,
Arnold and Others [2006] 3 All SA 411 (SCA) and Miller and Others v Nafcoc Investment Holdigs
Company Ltd and Others [2010] 4 All SA 44 (SCA) proceed as if the court was concerned with a
review of the Master‟s decision or the commissioner‟s decision.
48 See Bato Star supra paras 46 – 48. Leech v Farber NO supra at 448I-449C.

complain and it is then for the commissioner to prevent any abuse. If the
witness is dissatisfied with the commissioner‟s approach that may be the
subject of a review, but one cannot start from the perspective that the
commissioner will not discharge their duties properly and prevent abuse
from occurring.

[54] Although, therefore, I have proceeded in this judgment to deal with
the issues raised on the footing that they fell exclusively within the
court‟s domain and that no weight should be given to the commissioner‟s
views, I do not think that this is a correct approach. As it is the one most
favourable to Ms Mahlangu it does not affect the result.

Conclusion
[55]  In the result the appeal is upheld with costs and the order of the
High Court is altered to read:
„The application is dismissed with costs.‟

Justice M J D Wallis
Judge of Appeal

Appearances

For appellant:
G D Wickins
Instructed by:
Brooks & Braadvedt Inc, Johannesburg,

E G Cooper Majiedt Inc, Bloemfontein

For first respondent: E M Masombuka (with him M H Mhambi)
Instructed by:
Ngcebetsha Madlanga Inc, Sandton.
Matsepes Inc, Attorneys, Bloemfontein.

Supreme Court of Appeal of South Africa

MEDIA SUMMARY– JUDGMENT DELIVERED IN THE SUPREME
COURT OF APPEAL
From:
The Registrar, Supreme Court of Appeal
Date:
29 May 2016
Status:
Immediate
Please note that the media summary is intended for the benefit of the
media and does not form part of the judgment of the Supreme Court of
Appeal.
Roering and Another NNO v Qedani Mahlangu
Ms Qedani Mahlangu is the MEC for Infrastructural Development
in Gauteng. After the general election in 2009 she was appointed as the
MEC for Health in that province. Soon after her appointment, a contract
between the provincial Department of Health and 3P Consulting (Pty) Ltd
was suspended and in July 2009 the Department advised 3P Consulting
that it would no longer perform in terms of that contract. This was
challenged in the courts and the validity of the contract was upheld.
Thereafter 3P Consulting sued the Department for an amount of some
R99 million. The proceedings were defended and referred for trial.
Before the trial 3P Consulting was placed in liquidation. Its claim
against the Department was its sole substantial asset. The liquidators
applied for the appointment of a commissioner in terms of sections 417
and 418 of the Companies Act 61 of 1973 to investigate the company’s
affairs and to determine whether it should continue with the litigation
against the Department to recover the claim. After hearing a considerable
body of evidence the commissioner issued a summons for Ms Mahlangu
to attend the enquiry and give evidence of the matters within her

knowledge concerning the relationship between the Department and 3P
Consulting.
Initially Ms Mahlangu co-operated with the enquiry and asked for
time to refresh her memory of events before giving evidence. But she
then launched proceedings in which she alleged that the summons was an
abuse as it was directed at obtaining information from her about the
merits of the claim and the Department’s defence to it. This contention
was upheld by the High Court and the summons was set aside.
The SCA today unanimously set aside the High Court’s decision. It
pointed to the importance in the public interest of an enquiry into the
affairs of a company that has failed. Such enquiries are essential to
ascertain what went wrong and who was responsible for it. The fact that
civil litigation may flow from the enquiry, or be contemplated, or have
been instituted by the liquidators, does not provide grounds for regarding
the enquiry, or the summoning of a witness, as an abuse. There were
plainly grounds for the liquidators and the commissioner to believe that
Ms Mahlangu could give relevant evidence about the dealings between
3P Consulting and the Department. This was confirmed by her lawyers,
who described her as a key witness in the case. In the result the summons
stands and Ms Mahlangu will be obliged to give evidence in terms of it at
the enquiry.