REPORTABLE
Case number: 272/98
IN THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
BRIAN ST CLAIR COOPER NO
APPELLANT
and
FIRST NATIONAL BANK OF SA LTD
RESPONDENT
CORAM:
SMALBERGER, GROSSKOPF, MARAIS, ZULMAN
JJA and MELUNSKY AJA
DATE OF HEARING:
21 AUGUST 2000
DELIVERY DATE:
29 SEPTEMBER 2000
Issue of warrant in terms of sec 69(3) of the Insolvency Act 24 of 1936 -
when notice to affected person required.
______________________________________________________________
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JUDGMENT
______________________________________________________________

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SMALBERGER JA
SMALBERGER JA:
[1] The respondent sought an order in the Witwatersrand Local Division inter alia
setting aside a search warrant applied for by the appellant and  issued by a magistrate
in terms of sec 69(3) of the Insolvency Act 24 of 1936 (“the Act”).  The order was
granted by Roux J who also ordered the appellant to pay the respondent’s costs de
bonis propriis on a scale as between attorney and client.  The learned judge
subsequently granted the appellant leave to appeal to this  Court.
[2] The appellant was appointed as the trustee of the insolvent estate of one Wilfred
Rosenberg (“the insolvent”) on 3 December 1992.  The insolvent had been
provisionally sequestrated on 28 July 1992 and a final order had been granted on 18
August 1992.

[3] The insolvent’s assets, at the time of sequestration, included an undivided half-
share in a property (a flat) situated in Muizenberg, Western Cape.  The insolvent’s
half-share in the property was transferred to him on 4 June 1992 (i.e. prior to his
sequestration) and has since remained registered in his name; the remaining half-share
is registered in the names of his children or on their behalf.  For convenience I shall
refer to the insolvent’s half-share in the property simply as “the property”.
[4] The first and final liquidation and distribution account in the insolvent’s estate,
dated 22 October 1993 (“the account”), drafted by the appellant, was confirmed by
the Master of the Supreme Court (“the Master”) on 2 March 1994, after compliance
with all the formalities prescribed by law.  The property was not reflected in the
account as an asset.  This was because the appellant considered the property to have
little or no commercial value.  He had tried to sell it by public auction on 30 July 1993,
but no bid was made for it, nor was any interest shown in it prior to the auction.  The

title deed pertaining to the property was left in the possession of the insolvent.
[5] A supplementary liquidation and distribution account drafted by the appellant
was confirmed by the Master on 31 October 1994.  Consistent with what had gone
before it also contained no reference to the property.
[6] Only ABSA Bank Limited (“ABSA”) submitted a claim against the insolvent
estate.  The claim, which was duly admitted, was in respect of monies lent and
advanced by ABSA to the insolvent.  No dividend was available for creditors and
ABSA was obliged to pay a contribution towards the costs of insolvency.
[7] On 22 October 1996 the insolvent applied for his rehabilitation, which was
granted on 3 December 1996.
[8] Prior to this, during March 1995, the insolvent had become indebted to the
respondent in respect of overdraft facilities, suretyships and credit card liabilities in a

total amount in excess of R350 000.  The respondent was unaware at the time that the
insolvent’s estate was under sequestration.
[9] On 23 March 1995, with the knowledge and concurrence of the insolvent, the
respondent instructed its attorney (“Van Huyssteen”) to register a mortgage bond over
the property in respect of the insolvent’s indebtedness to it.  The insolvent had
previously handed over the relevant title deed to the respondent.
[10] The papers for the registration of the mortgage bond were lodged with the
relevant Deeds Office during October 1995.  Included amongst the papers was an
affidavit attested to by the insolvent stating that his estate had not been sequestrated.
The papers were rejected by the Deeds Office on the basis that the insolvent was an
unrehabilitated insolvent at the time.  This was the first intimation that the respondent
received of that being the case.
[11] Subsequently, still during October 1995, Van Huyssteen ascertained that the

appellant was the trustee of the insolvent’s estate.  He informed the appellant of the
preceding events relating to the attempted registration of the mortgage bond over the
property and requested the appellant’s consent thereto.  During later discussions with
Van Huyssteen the appellant made it clear that he was not prepared to give his consent
to the registration of the mortgage bond.
[12] In due course the respondent sought and obtained an acknowledgment of debt,
dated 30 July 1996, from the insolvent.  By this time the total indebtedness of the
insolvent to the respondent had grown to more than R500 000.
[13] During 1996 the appellant obtained a valuation of the property in the amount of
R70 000.  This was apparently the first time that the appellant had had any dealings
with the property since he drafted the account in October 1993.  He offered the
property to the insolvent’s children, but they were unable or unwilling to purchase it
at that price.  He then had it put up for sale at a public auction.  The upshot of this and

subsequent events was that he received an offer of R40 000 for the property.  The
insolvent’s children were unable to match or improve on this offer.  A written sale
agreement was accordingly concluded on 4 September 1996 for the sale of the
property to a third party for the sum of R40 000.
[14] On 14 May 1997, after the insolvent’s rehabilitation, the appellant wrote to the
respondent requesting the title deed relating to the property to enable him to pass
transfer to the purchaser.  Correspondence followed between Van Huyssteen and the
appellant’s attorneys.  The outcome was that Van Huyssteen, on behalf of the
respondent, refused to hand over the title deed to the appellant or his attorneys.  The
respondent made no secret of the fact that the title deed was in its possession, but
sought to justify its refusal to hand it over on various grounds.  In the meantime the
respondent had obtained a judgment against the insolvent arising out of his
acknowledgment of debt in the sum of R560 000.

[15] During later discussions with Van Huyssteen the appellant’s attorneys made it
clear that the appellant was faced with a threat of cancellation of the agreement if the
title deed was not released to enable transfer of the property to be given to the
purchaser.
[16] On 10 July 1997 the appellant applied, in the Magistrate’s Court,  Johannesburg,
in terms of sec 69(2) of the Act for the issue of a warrant to search for and take
possession of the title deed, ostensibly on the basis that the respondent was unlawfully
withholding them as envisaged by sec 69(3).  The application was made ex parte
without notice to the respondent.  The grant of the application led to the proceedings
referred to in para [1].
[17] The facts set out above are either common cause or not in dispute.
[18] In terms of sec 20(1) of the Act the effect of the sequestration of the insolvent’s

estate was to divest him of his estate and eventually to vest such estate in the appellant
as his trustee.  It was then incumbent upon the appellant to collect the insolvent’s
assets, realize them and, if there were sufficient realizable assets, to distribute the
proceeds amongst the insolvent’s creditors.  As it happened there were insufficient
realizable assets and ABSA, the only creditor who proved a claim, was called upon
to make a contribution.
[19] Sec 69(1) of the Act obliged the appellant, as soon as possible after his
appointment, to take into his possession or under his control all “movable property,
books and documents” belonging to the insolvent’s estate.  I shall assume, for the
purposes of the appeal, that the title deed to the property falls within the enumerated
items.  In terms of sec 69(2), if a trustee (such as the appellant) has reason to believe
that any property, book or document “is concealed or otherwise unlawfully withheld
from him, he may apply to the magistrate having jurisdiction for a search warrant

mentioned in sub-section (3)”.
[20] Sec 69(3) reads as follows:
“If it appears to a magistrate to whom such application is made, from a
statement made upon oath, that there are reasonable grounds for
suspecting that any property, book or document belonging to an
insolvent estate is concealed upon any person, or at any place or upon
or in any vehicle or vessel or receptacle of whatever nature, or is
otherwise unlawfully withheld from the trustee concerned, within the area
of the magistrate’s jurisdiction, he may issue a warrant to search for and
take possession of that property, book or document.”
[21] As appears from sec 69(3), before a magistrate may exercise his discretion to
issue a warrant in terms of the section, it must appear to him that there are reasonable
grounds for suspecting that any property, book or document belonging to an insolvent
estate is either:
1)
concealed in any of the ways set out in the section, or is
2)
otherwise unlawfully withheld.

A warrant, when issued, confers authority on the person executing it to search for and
take possession of the property, book or document concerned and to “deliver any
article seized thereunder to the trustee” (sec 69(3) read with sec 69(4)).
[22] The primary purpose of sec 69(3) is to enable a trustee to collect and take
control of assets reasonably believed to belong to an insolvent estate which are being
concealed or unlawfully withheld.  It does not purport to, nor was it intended to,
provide a means for finally determining competing claims to property which is alleged
to belong to an insolvent estate - see Bruwil Konstruksie (Edms) Bpk v Whitson NO
and Another 1980(4) SA 703 (T) at 711 A-B; Philip Business Services CC v De
Villiers and Others NNO 1991(3) SA 552 (W) at 557 A-B; and the hitherto unreported
judgment of Nugent J in the Witwatersrand Local Division in Kerbyn 178 (Pty) Ltd
v T.W. Van den Heever and Others at pp 7-8 (Case No 4191/00 delivered on 27
March 2000).

[23] Sec 69(3) was clearly intended to strengthen the hand of a trustee in carrying out
the obligation to take charge of all the assets belonging to an insolvent estate.
Resorting to its provisions has the potential to infringe the rights of others in relation
to both their property (at least to the extent of depriving them of something in their
possession) as well as their privacy when it comes to search and seizure.  In those
circumstances, in my view, as a general principle, a warrant should not be issued
without affording the person or persons affected, or likely to be affected (to the extent
that their identities are ascertainable or reasonably ascertainable) an opportunity to be
heard, unless it can be said that sec 69(3) (the authorising provision) excludes that right
either expressly or by necessary implication.  An opportunity to be heard would
require the giving of appropriate notice to the person or persons concerned.
[24] This approach would be in keeping with what was said by Milne JA in South
African Roads Board v Johannesburg City Council 1991(4) SA 1 (A) at 10 G-I,

namely,
“[T]his Court has expressed a preference for the view which regards the
audi principle [the audi alteram partem rule] as a rule of natural justice
which comes into play whenever a statute empowers a public official or
body to do an act or give a decision prejudicially affecting an individual
in his liberty or property or existing rights, or whenever such an individual
has a legitimate expectation entitling him to a hearing, unless the statute
expressly or by implication indicates the contrary; as opposed to the
view which requires the audi principle, if it is to apply, to be impliedly
incorporated by the statute in question.”
(See also Du Preez and Another v Truth and Reconciliation Commission 1997(3) SA
204 (A) at 231 C-E.)  This principle would apply equally to a case such as the present
where a magistrate is called upon to exercise a discretion to issue a warrant in terms
of sec 69(3) of the Act.  The approach would also be consonant with the requirements
of sec 39(2) of the Constitution of the Republic of South Africa, Act 108 of 1996.
According to Baxter, Administrative Law at 540 “[t]he principles of natural justice are
considered to be so important that they are enforced by the courts as a matter of

policy, irrespective of the merits of the particular case in question.”  Baxter’s view,
however, was not raised or argued before us and no opinion need be expressed as to
its correctness having regard to the conclusion to which I ultimately come.
[25] There is no express provision in sec 69(3) requiring the giving of notice to an
affected person or affording a right to be heard.  Is this dispensed with by necessary
implication? The fact that a magistrate does not finally determine legal entitlement to
any property or item envisaged in the section would not per se preclude notice, as he
is called upon to apply his mind to whether a warrant should be issued and to hear an
affected person, in a appropriate case, would, or could, have a bearing on the decision
he is required to make.
[26] As pointed out above, sec 69(3) deals with two classes of cases: items
(property, books or documents) “concealed” and items “otherwise unlawfully
withheld”.  “Conceal” means: “To keep from the knowledge or observation of others;

To put or keep out of sight or notice, to hide” (The Shorter Oxford English
Dictionary, Vol I, p 388).  “Concealed”, in the context in which the word is used,
connotes items which have been hidden with a view to denying their existence or
preventing their recovery.  When seeking to recover concealed items suspected of
belonging to an insolvent estate, the giving of prior notice and affording a right to be
heard would, or at least might, defeat the very object and purpose of the section.
From this it must be inferred, by way of necessary inference, that the legislature
intended to exclude the giving of notice (and the concomitant right to be heard) in
cases involving concealed items.
[27] In my view the position is different, however, where the application for a warrant
relates to items suspected of being “otherwise unlawfully withheld”.  These are words
of wide import.  They could govern situations as widely divergent as where items,
though not concealed, are being surreptitiously held, or not disclosed, without any

claim of right or for no legitimate reason, to items openly held under a bona fide and
reasonable claim of right to own or lawfully possess them as against a trustee in his
capacity as such.  The words also comprehend situations where continued possession
of an item could prejudice the insolvent estate, as well as those where there is no
danger of loss resulting to the insolvent estate from the possession of such item
pending determination of any dispute concerning the rights thereto.
[28] In the situations postulated above one would need to have regard to the facts
of each particular case to determine whether the matter was one where the audi
principle should have application.  Where the circumstances are such that the object
and purpose of sec 69(3) would be defeated by giving notice, or where the identity of
the affected person is not known or cannot reasonably be ascertained, the giving of
notice would, by necessary inplication, be dispensed with.  But in other instances it
would not.  What must therefore in every case be asked, and answered, is whether,

having regard to the facts which were known, or must be taken to have been known,
when the warrant was applied for, the legislature must necessarily have intended that
the audi principle be dispensed with.  Unless the answer is an unequivocal “yes”, the
audi principle must be complied with by giving notice to the affected person to enable
such person to be heard.  In each case therefore, the particular circumstances will
dictate whether the giving of notice is necessary or may be dispensed with.
[29] To the extent that views expressed in reported cases dealing with sec 69(3) are
at variance with the principles enunciated above, they must be taken to have been
impliedly overruled.
[30] When applying to the magistrate for a warrant in terms of sec 69(2) on 10 July
1997 the appellant was well aware of the following facts.  The (first and final
liquidation and distribution) account submitted and signed by the appellant was dated
22 October 1993, more than three years previously.  The appellant was aware at that

time that the property was registered in the name of the insolvent.  An attempt had
been made to sell the property by public auction on 30 July 1993.  No bid was
received and no interest shown by anyone to purchase it.  By his own account the
appellant considered the property to have little or no commercial value.  Had he
considered it to constitute realizable property he should not have filed a final account
(see sec 92(4) of the Act).  The account purported to deal with all known realizable
assets.  The property was not reflected therein as an asset nor was any reference made
to it.  The accompanying affidavit of the appellant specifically records “dat daar na my
beste wete en oortuiging geen verdere bates is waarvoor verantwoording gedoen moet
word nie” (see sec 107 of the Act).  Everything points to the appellant having made a
conscious decision to disregard the property as an asset in the insolvent’s estate.  This
conclusion is fortified by the appellant’s subsequent conduct.
[31] The account was confirmed on 2 March 1994.  From then until October 1995,

the appellant, in the absence of anything suggesting the contrary (and nothing appears
from the record), must be taken to have shown no interest in the property.  He either
never took possession of the title deed relating to the property or, having done so,
returned it to the insolvent.  Whatever the situation, the insolvent was ultimately left in
possession of the title deed.  The supplementary liquidation and distribution account
confirmed by the Master on 31 October 1994 also contained no reference to the
property.  The above facts justify an inference that the appellant purported to abandon
the property as part of the insolvent’s estate i.e. he discarded it with the intention of
relinquishing any rights to it.  Any such abandonment would have occurred prior to
the insolvent agreeing in March 1995 to a mortgage bond being registered against the
property in respect of his indebtedness to the respondent. (Whether or not a trustee
may lawfully abandon estate property which he considers to be of no value to the
estate is not a matter we are required to decide.)

[32] The request by the respondent, through Van Huyssteen, to the appellant in
October 1995 for his consent to the registration of a mortgage bond appears to have
resurrected any interest he may once have had in the property.  Although he refused
to give his consent to registration he took no immediate steps to recover the title deed
in the respondent’s possession.  It was only in May 1997, after he had purportedly
entered into a written agreement of sale in respect of the property, that he requested
the title deed from the respondent.  By that time the insolvent had been rehabilitated.
[33] In refusing to hand over the title deed the respondent relied upon the fact that
the insolvent had furnished it with the title deed, had instructed it to register a mortgage
bond over the property and that  the insolvent by then had already been rehabilitated.
As most of the insolvent’s indebtedness to the respondent arose after his
sequestration, the respondent may also have been able to rely on the deeming
provision of sec 24(2) of the Act - a matter on which I express no firm view.  The

respondent did not raise the issue of abandonment.  At that time it was not aware, and
could not reasonably have been aware, of all the relevant and material facts now known
concerning the manner in which the appellant had dealt with the property.  Had it been,
it would no doubt have raised abandonment as a defence then, as it seeks to do now.
[34] To sum up, when the appellant applied for a warrant in terms of sec 69(3) on
10 July 1997 the position which existed was as follows:
1.
The appellant was aware of all the circumstances pertaining to his
trusteeship of the insolvent’s estate and his conduct in regard thereto.
2.
He knew, since October 1995, that the title deed of the property was in
the possession of the respondent and was being openly held by it.
3.
He took no active steps between October 1995 and May 1997 to obtain
possession of the title deed from the respondent.
4.
It was only in May 1997, after he had entered into a written agreement for

the sale of the property, that he called upon the respondent to hand over
the title deed.
5.
Prima facie the respondent had bona fide and reasonable grounds for
retaining the title deed, even though it may ultimately transpire, once all
the relevant facts have been fully canvassed (which has not yet been the
case), that the respondent was not legally entitled to withhold it.
6.
A caveat had been entered in the deeds registry (presumably in terms of
sec 17(3) of the Act) which effectively precluded the property from being
encumbered or sold to the prejudice of the insolvent estate.
[35] In all the circumstances the matter was one where notice of the sec 69(3)
application should have been given to the respondent and it should have been afforded
an opportunity of being heard.  The failure to do so vitiated the proceedings and
justified the warrant being set aside in the court below.  In the result the appeal against

the court a quo’s decision in this regard must fail.
[36] Not all the facts alluded to in para [30] were brought to the attention of the
magistrate by the appellant when he applied for the warrant.  Some of the information
withheld was in my view material.  In De Jager v Heilbron and Others 1947(2) SA
415 (W) at 419-420 Roper J stated:
“It has been laid down, however, in numerous decisions of our Courts
that the utmost good faith must be observed by litigants making ex parte
applications, and that all material facts must be placed before the Court.
. . . .  If an order has been made upon an ex parte application, and it
appears that material facts have been kept back which might have
influenced the decision of the Court whether to make the order or not, the
Court has a discretion to set aside the order on the ground of the non-
disclosure. . . .  It is not necessary that the suppression of the material
fact shall have been wilful or mala fide.”
Those words are as valid today as they were then.  However, in view of the conclusion
to which I have come it is not necessary to decide what the effect of such non-
disclosure was in the present matter and whether it would have permitted or justified

the warrant being set aside on that ground.
[37] There remains to be considered the appeal against the costs order.  The general
principle of the common law is that a trustee, who acts in a representative capacity,
cannot be ordered to pay costs de bonis propriis unless he has been guilty of
improper conduct.  The judge a quo found the appellant’s conduct to be
“unacceptable”.  Improper conduct is always unacceptable; but unacceptable conduct
is not necessarily improper.  While the appellant’s conduct may have been ill-
considered, and his application lacking in certain essential detail to the extent that it
may be said that he did not make a full disclosure of all relevant facts, one cannot in
my view go so far as to hold that his conduct was improper.  It has not been shown
that there was a conscious attempt on his part to mislead the magistrate or to use sec
69(3) unfairly to his advantage.  In the circumstances the special costs order against
the appellant was not justified and falls to be set aside.  The appeal succeeds pro

tanto.
[38] It follows that both the appellant and the respondent have enjoyed a measure of
success on appeal.  While it is arguable that the respondent’s success is greater than
that of the appellant, it is not so significantly greater as to merit a costs order on appeal
in favour of the respondent against the appellant.  In my view a fair order in all the
circumstances would be that each party should pay its own costs of appeal.
[39] The following order is made:
1.
The appeal succeeds, but only to the extent that paragraph 3 of the order
of the court a quo in relation to costs is set aside and the following
substituted:
“The first respondent is ordered to pay the costs of the
application including the costs of the A section of the
Notice of Motion”.
2.
Each party is to pay its own costs of appeal.

____________________
J W SMALBERGER
JUDGE OF APPEAL
GROSSKOPF JA  )Concur
MELUNSKY AJA )
MARAIS JA:     [1]          With respect, I am unable to share in my brother
Smalberger’s conclusion that the appeal should fail.  Had I felt able to share in that
conclusion, I would have concurred in his conclusion as to the costs orders which
should have been made in the court a quo and in this court.  However, my conclusion
on the procedural propriety and the merits of the application for a warrant necessitates
an altogether different order as to costs in both courts.
[2]          There are essentially three reasons for my inability to concur with Smalberger
JA.  First, my reading of s 69 is that it impliedly excludes the giving of notice of
intention to seek a warrant in all cases.  Secondly, even if it does not, and the view that
in some cases notice will be required, but in others not, is correct, I do not think that

the failure to give notice in this particular case should result in the setting aside of the
warrant.  For reasons to be given,  I consider it to be manifest that what respondent
has said it would have raised to justify denial of the warrant, if it had been given the
opportunity to do so, is devoid of substance.  To set aside the warrant in such
circumstances would serve only to potentially prejudice creditors and would be to pay
undue obeisance to a requirement the fulfilment of which would have had no effect
whatsoever upon the issue of the warrant.  Thirdly, I do not consider that there was
any material non-disclosure by the trustee when seeking the warrant.
[3]         Whether notice of the application should have been given.
I approach the question conscious of the invasion of privacy inherent in, and the
aura of spoliation (juristically inaccurate though the use of the word may be)
surrounding, the provisions of s 69.  I am also mindful of the admonitions which are
to be found in the common law and the Constitution as to the need for legislation to

[1980] AC 952 (HL) at 1008 C-E
be interpreted, whenever possible, in such a way as to maintain and promote core
values such as the right to privacy, to freedom from search and seizure, and to fair
administrative and, for that matter, judicial action.  However, none of that relieves a
court of its primary duty of ascertaining the intention of the legislature by reference to
the language of the provision in the context of the statute as a whole and by reference
to whatever other legitimate aids to interpretation may be available.  If a plain and
unambiguous intention to exclude the giving of notice emerges, there can be no
justification for assigning a contrary meaning to the provision.  As Lord Diplock
observed in Regina v Inland Revenue Commissioners, Ex parte Rossminster Ltd and
Others1
“The construing court ought, no doubt, to remind itself, if reminder should be
necessary, that entering a man’s house or office, searching it and seizing his
goods against his will are tortious acts against which he is entitled to the

protection of the court unless the acts can be justified either at common law or
under some statutory authority.   So if the statutory words which are relied upon
as authorising the acts are ambiguous or obscure, a construction should be
placed upon them that is least restrictive of the rights which would otherwise
enjoy the protection of the common law. [Or, in South Africa, of the
Constitution.]  But judges in performing their constitutional function of
expounding what words used by Parliament in legislation mean, must not be
over-zealous to search for ambiguities or obscurities in words which on the face
of them are plain, simply because the members of the court are out of sympathy
with the policy to which the Act appears to give effect.”
That approach to the matter is, in principle, equally appropriate when considering
whether or not the giving of notice has been impliedly excluded by necessary
implication in s 69.  If the implication is plain, it is entitled to no less deference than
that to which plain and unambiguous words are entitled.
[4]          Before turning to the interpretive task it would be as well to bear in mind at
the threshold of the enquiry two important considerations.  The first is that, as has

Philip Business Services CC v De Villiers & Others NNO 1991 (3) SA 552 (T) at
557 A-E;  Kerbyn 178 (Pty) Ltd v Van Den Heever & Others, unreported judgment
of Nugent J , Case No 4191/00, WLD, 27.3.2000.
been pointed out in the judgment of Smalberger JA and in other judgments,2 the
magistrate’s decision to issue a warrant is dispositive of nothing.  No more than
reasonable grounds for suspicion of concealment or unlawful withholding of the asset
need to be found to exist.  The decision to issue a warrant is in no sense an
adjudication of any substantive issue, existing or potential, between the trustee and the
third party or between the insolvent and the third party.  Success in obtaining a warrant
and success in its execution brings the trustee no more than provisional physical
possession of the relevant asset.  The trustee’s continued possession is open to
challenge in the courts and the customary gamut of remedies ( review proceedings,
prohibitory interdicts, vindicatory actions, declarations of right, etc) is available to the
third party.  A successful challenge will bring an end to the trustee’s possession.

In Australia it has been held that it is not a judicial act even although the functionary may be a
judicial officer and even although it is necessary to bring to bear a judicial mind.  See Love v
Attorney-General (N.S.W.) (1989-1990) 169 CLR 307 (HC of A) at 318-322; Grollo v
Palmer [1995] 184 CLR 348 (HC of A) at 359-360.  In New Zealand the contrary view is
favoured.  See Simpson v A-G [Baigent’s Case] [1994] 3 NZLR 667 CA at 674 (20-30), 689
(15-45), 695 (15) - 696 (25).  In the latter case, Hardie Boys J encapsulated the approach of the
Australian High Court in Love’s case as drawing a “distinction between a power that is essentially
administrative in nature but must be exercised in a judicial manner, and the exercise of judicial
power, in the sense of the authority to settle questions of rights and obligations between parties”.
The distinction had been drawn in England by Lopes LJ in Royal Aquarium and Summer and
Winter Garden Society Ltd v Parkinson [1892] 1 QB 431(CA) at 452.
1988 (2) SA 259 (T)
[5]          The second consideration is that the concept of a warrant in its various
manifestations (arrest, attachment, search, seizure, etc) is one of the law’s most
familiar creations. However one characterises the act of issuing such warrants, whether
as judicial, quasi-judicial or administrative3, the notion that it is subject to the audi
alteram partem rule is, as far as I am aware, a relatively novel one.  Until the decision
in Putter v Minister of Law and Order and Another NO4, I cannot recall ever having
seen any authority for the proposition that the giving of notice is a prerequisite to the
exercise of a power to issue a warrant of the kind here in question.   That does not

mean that that there may not be other types of warrant which require notice to be
given, but the generalisation that the validity of the issue of warrants of this particular
kind is not ordinarily dependent upon the giving of notice to the affected parties
remains, as I see it, the premise from which any enquiry into the need for notice must
proceed.
[6]          That being the case, I am unconvinced that the question is whether the
provision impliedly excludes the giving of notice.  The very fact that the provision
relates to the issue of warrants of search and of seizure is prima facie inconsistent with
any such requirement and the question, as I see it, is rather whether there is anything
in the provision to indicate that, contrary to the position which would normally obtain,
warrants issued in terms of this provision must be preceded by the giving of notice
and, if required by the third party, the giving of a hearing to the third party.  However
that may be, even were I to assume that the former question is the correct question to

pose, I would conclude that the giving of notice has been impliedly dispensed with by
the provision.
[7]          I agree with Smalberger JA that the giving of notice in cases of concealment
would defeat the very purpose of the provision.  That much is clear and the provision
therefore plainly excludes at least pro tanto the giving of notice.  Smalberger JA
acknowledges  (rightly, in my respectful opinion) that there are at least some cases of
unlawful withholding of assets imaginable where no question of concealment is
involved, but where the provision would none the less impliedly exclude the giving of
notice.  However, if one were to accept that there are other cases in which notice
would be required, the legislature would have to be taken to have left it to the  trustee
and/or the magistrate to decide ad hoc, and by reference to unspecified criteria, in
which cases of unlawful withholding of assets notice should be given.  That that is
what the legislature intended, strikes me, with respect, as most unlikely.

[8]          S 69 cannot be properly interpreted without an appreciation of the mischief
which it is designed to combat.  A perusal of the Insolvency Act as a whole shows
what that mischief is.  The Act is designed to protect the financial interests of the
creditors of an insolvent and to sequester his, or her assets in such a way as to
eliminate, as far as possible, the risk of them being put irretrievably beyond the reach
of the trustee and thus becoming unavailable for realization in whole or partial
satisfaction of the claims of creditors.  As it has so often been put, the hand of the law
is laid upon the estate of the insolvent in the interests of creditors.  A multitude of
complementary and interlocking provisions have been enacted to achieve that broad
purpose.
[9]          The insolvent is instantly divested of all his assets.  Ownership of them is
vested instead initially in the Master and then in his trustee and remains so vested until

S 20 (1)(a)
S 25 (1)
S 23 (1)
S 142 (2)
S 142 (2)
the trustee transfers ownership to someone else5.  The rehabilitation of the insolvent
does not per se bring about a revesting of any of those assets in the insolvent.6  Even
assets acquired by the insolvent after sequestration vest (with some qualifications), not
in the insolvent, but in the trustee7.  An obligation is cast upon any person in
possession of assets belonging to the insolvent’s estate to deliver them to the trustee8.
Refusal to do so is an offence.9
[10]          In the case of immovable property or attached property caveats are required
to be entered by the relevant official functionaries, the effect of which is to render
alienation of or the imposition of burdens upon those assets impossible without the

S 17 (3) and (3) bis
concurrence of the trustee.10
[11]          The thrust of all this is obvious.  It is to disable the insolvent and anyone
else who may be physically in possession of such assets from alienating or
encumbering them to the prejudice of creditors.  That purpose is achieved by, inter
alia, providing for the trustee to have physical possession of them in the case of
movables or, in the case of movables under attachment or immovables, by having the
relevant functionaries place caveats against the assets.
[12]          Despite all that, but for s 69, there would remain a window of opportunity
for a third party in possession of a movable asset, the ownership of which is vested
in the trustee, to alienate it in such a way that it could not be vindicated by the trustee.
Section 33 provides that a person who acquires such an asset in good faith and for
value from someone other than the insolvent cannot be called upon to deliver it to the

trustee.  The longer a third party can resist handing over the asset, the more extensive
the opportunities of alienating the asset to another for value to the prejudice of
creditors of the insolvent may be.  That the trustee may have a claim against the third
party for disposing of the asset is not a sufficient answer.  The third party may not be
able to pay and the real security of the asset itself will have been lost by the trustee and
the creditors in the insolvent estate.  To throw the trustee back upon the ordinary
litigatory remedies in such situations would not close this window of opportunity.  The
giving of notice inherent in the ordinary litigatory process could precipitate the very
alienation of the asset which the litigation is aimed at preventing.  The trustee might also
have difficulty in discharging onera of proof attendant upon the litigatory process,
particularly if the need for protective action arises soon after his appointment and
before he or she has been able to investigate matters fully.  Hence the need for a
provision such as s 69.

[13]          The giving of notice of an application in terms of s 69 would deprive the
remedy of its efficacy and serve as a stimulus to the very kind of action which it is
designed to prevent.  There are broadly five classes of situation which could confront
a trustee.  The first is where the whereabouts of the assets are thought to be known but
the identity of the possessor is not.  The second is where the person thought to be in
possession of the asset simply denies knowledge of the asset.  The third is where the
possessor admits possession, sets up no justification for retention of the asset, but
refuses to hand it over or to disclose where it is.  The fourth is where the possessor
admits possession, sets up what purports to be a justification for retention, and refuses
to hand the asset over or disclose where it is.  The fifth is where the possessor admits
possession, sets up what purports to be a justification for retention, refuses to hand
the asset over, but discloses where it is.
[14]          Common to all of these situations is the potential risk of the asset being put

beyond the trustee’s reach even more effectively than it was at the outset once it is
known that the trustee lays claim to it and is seeking a warrant.  Whether that is
achieved by hiding it elsewhere, or by disposing of it hurriedly for value to yet another
third party, or by engaging in filibustering techniques designed to stall the issue of a
warrant and so keep the window of opportunity open for a less hurried disposal of the
asset, they are all ways in which the clear purpose of s 69 could be frustrated. That
purpose is the swift taking of possession by the trustee of assets belonging to the
estate to ensure that they will be available for realization.  In my view, it seems plain
that the provision does not envisage a situation where the trustee’s possession of the
asset would have to be deferred indefinitely while what may prove to be a long drawn
out battle rages before the magistrate and/or the courts as to whether or not the third
party should be allowed to remain in possession.  Quite the contrary.   It envisages that
once there are reasonable grounds for suspicion that an estate asset is being

concealed or otherwise unlawfully withheld from a trustee in insolvency, the trustee is
entitled, ante omnia as it were, to obtain a warrant and take possession of the asset
pending the outcome of whatever subsequent proceedings may be instituted by the
third party to recover possession.
[15]          The fact that there may be cases in which the prospect of prejudice to the
insolvent estate occurring if notice is given is slight or non-existent does not derogate
from the fact that the provision is protective and preservatory in character, designed
to eliminate or minimise risk, and therefore inherently incompatible with the notion of
audi.  I am therefore unable to share the view that whether or not notice is required is
dependent upon such factors as whether or not the third party’s possession is “open”
or “bona fide” or claimed to be justified.
[16]          The view taken in Putter’s case appears, with respect, to have been based
upon a misreading of s 69.  The learned judge said:

1998 (2) SA 259 (T) at 261 B-E
“Section 69(3) enjoins the magistrate to act after he has made a decision:
(i)
that some person has concealed property belonging to the insolvent
estate; or
(ii)
that a person is holding property, belonging to the insolvent estate,
unlawfully.
It is the second finding that concerns me.  If a magistrate finds that the person
is holding the property lawfully he must refuse to issue the warrant.  A decision by a
magistrate in favour of a trustee would clearly prejudicially affect the property or the
rights to such property vesting in an individual.  In these circumstances the maxim
audi alteram partem must be considered.  See eg South African Defence and Aid
Fund and Another v Minister of Justice 1967 (1) SA 263 (A) at 270B-G.
When a magistrate is called upon to issue a writ because property is being
concealed, obviously hearing the other party could frustrate the whole object of the
provision.  However, when a person is holding property openly and maintaining that
such possession is lawful the position must be different.  I balk when it is suggested
that a magistrate, on the say so of a trustee, may decide a legal issue without hearing
both parties and the subsequent seizure of the property leaves the absentee helpless
to prevent its removal.  I reject the respondent’s contention that the Legislature
intended to exclude the operation of the maxim when a magistrate is called upon to
consider whether or not a person holds property lawfully.”11
With due respect, the provision does not require the magistrate to make findings of

In George v Rockett [1990] 170 CLR 104 (HC of A) at 115 it was said: “Suspicion, as Lord
Devlin said in Hussien v Chong Fook Kam [1970] AC 942 at 948] ‘in its ordinary meaning is a
state of conjecture or surmise where proof is lacking: “I suspect but I cannot prove’”.  The facts
which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief,
yet some factual basis for the suspicion must be shown.”  The statement by Lord Devlin was
adopted by this court in Duncan v Minister of Law and Order 1986 (2) SA 805 (A) at 819 I-J
and Minister of Law and Order v Kader 1991 (1) SA 41 (A) at 50 H.
See note 2
See note 2
Unreported decision of Plewman J, Case no 1882/95, WLD, 24.8.1995
that kind or to decide a legal issue.  As has already been said, the magistrate decides
no more than that there are reasonable grounds for suspecting12 that an asset is
concealed or otherwise unlawfully withheld from the trustee.  In no sense does the
magistrate pre-empt the determination of any dispute which may exist in regard to the
right to possession.  In my opinion the learned judge erred in requiring notice to be
given.  I prefer the contrary conclusion reached by Flemming DJP in the case of Philip
Business Services CC 13and Nugent J in the case of Kerbyn 178 (Pty) Ltd.14
[17]          In Life Science (1994) (Pty) Ltd and Another v Powell NO and Another,15

2000 (1) SA 815 (T) at 822 A-C
too, the view was taken that the s 69 did not require the giving of notice, regardless of
whether it was a case of concealment or some other case of unlawful withholding.  But
it was also suggested that where there was “a clear and open and reasonable dispute
between the possessor and the liquidator as to whether the goods were the company’s
goods, and where there was some adequate safeguard to there being damage, loss or
risk involved or where there is no possibility of the removal or concealment of the
goods in question” the “correct approach would then be to decide whether in such
circumstances the issue of the warrant had been justified” and “whether or not it was
proper for the applicant to invoke the search procedure”.  These statements were
approved in Advance Mining Hydraulics (Pty) Ltd and Others v Powell NO and
Another.16  Prima facie these suggested limitations upon the powers conferred by s
69 seem to me to be unjustified and involve reading into the provision a host of

qualifications which are not readily apparent from either its language or the object
which it is intended to achieve.  However, in the circumstances of this case, it is
unnecessary to take a firm stand one way or the other.
[18]          In this case the trustee was being threatened with cancellation of the sale of
the share in the flat if he did not deliver the title deed.  It was plainly a matter of
urgency that he obtain it and his recourse to s 69 cannot be said to be an abuse of the
provision.
The need for and sufficiency of disclosure by the trustee.
[19]          It is not self-evident to me that the obligations of disclosure attendant upon
the making of ex parte applications to courts of law are equally applicable  to an
application for a warrant under s 69.  That good faith and truthfulness is required is
obvious.  But it may be doubted whether omissions in good faith of circumstances
which are subsequently thought by a court to be potentially material should vitiate the

issue of warrants of this kind unless, perhaps, it is reasonably clear that their disclosure
would, or probably would, have led to the refusal of the warrant.  Where reasonable
grounds for suspicion are what empowers and triggers the issue of the warrant, where
a decision as to the merits of the trustee’s claim to possession is in no sense pre-
empted by the issue of the warrant, and where the subsequently disclosed
circumstances do not, objectively regarded, derogate from the existence of reasonable
grounds for suspicion, it might be contrary to sound policy and the interests of
innocent creditors to set aside the warrant solely on the ground of the non-disclosure.
However, these are no more than superficial ruminations.  In the absence of much
fuller debate and argument than we have heard, I prefer to leave these questions open.
I shall assume in respondent’s favour that the duty of disclosure is substantially the
same.
[20]          In my view, there was no material non-disclosure.  The trustee disclosed to

the magistrate that respondent was legally represented by an attorney and that a letter
had been written claiming that justifications for retaining possession had been set forth
in previous correspondence.  The identity of the attorney and his address and
telephone numbers were disclosed.  As a fact, one looks in vain in the previous
correspondence for anything resembling, even if only faintly, a justification
recognizable in law.  There are simply legally unmotivated refusals to hand over the title
deeds and an attempt to gain time in the Micawber-like hope that something would turn
up which might provide a justification for retention of the title deed.  (More about that
correspondence anon.)  Anyone required to articulate what justification, real or
imagined, was being advanced by respondent would have been hard pressed indeed
to do so.  That the trustee did not attempt to enlighten the magistrate further as to the
nebulous stance taken by respondent cannot, in my opinion, be regarded as a breach
of the assumed duty of disclosure.

[21]          In so far as non-disclosure of the facts set forth in paragraph 30 of
Smalberger JA’s judgment is concerned, I do not consider that it was incumbent upon
the trustee to disclose those facts.  They had not been raised as providing the basis for
any defence to the trustee’s claim by respondent in the correspondence which passed
between the parties prior to the application for the warrant, despite respondent being
legally represented and despite those facts being freely accessible to respondent at the
Master’s office.  The bare facts which it is suggested should have been disclosed
constitute no defence known to the law.  It is the inference of abandonment to be
drawn from them that is suggested to be what made them material.  The highest the
matter can be put is that if the trustee was capable in law of abandoning the share in
the property, if these facts could justify the inference that the trustee did abandon it,
and if the consequence of that would be that Rosenberg re-acquired ownership of it,
it is arguable that they should have been mentioned by the trustee.  Why should the

trustee have entertained the notion that such a submission could ever be raised?  His
state of knowledge at the time was this.
[22]          There was a caveat against the share in the Deeds Registry which, for as
long as it stood, would prevent any transfer or burdening of the share without his
consent.  He had been trying to sell the share despite the confirmation of the final
account.  Rosenberg and his daughters were aware of that.  Indeed, an opportunity
was given to the daughters to match or better the price he had been offered.  There
was no suggestion from anybody that the share was no longer an asset in the insolvent
estate and that Rosenberg or his daughters had acquired ownership of it.  Quite the
opposite.  In applying for his rehabilitation in October 1996 Rosenberg made the
following statements on oath:
“14
At the time of my sequestration the only assets that I had of reasonable
value were
(a)
the half share in the flat ........... in Muizenberg.

(b)
................
(c)
................
(d)
................
(e)
................
(f)
................ .
In regard to these assets I state:-
14.1 The half share in the flat valued at R200 000,00 has as yet not been
disposed of by my trustee.  The half share has been valued at
approximately R40 000,00.
(After annexing the first and final liquidation account and recording that
it had been confirmed on 2 March 1994, he continued.)
18.
I have made a complete surrender of my estate and I have not granted
or made promises of any benefit whatsoever to any person or entered
into any secret arrangement with the intention of dissuading my trustees
or creditors from opposing this Application and there are no further
assets to be realised in my Estate save for the half share in the flat in
Muizenberg which my Trustee is attempting to sell by public auction.
20.
Since my sequestration I have not acquired any assets.”
[23] In a supplementary affidavit dated 13 November 1996 he said:
“The half share in the flat valued at R70 000,00 has been sold by my Trustee
for R40 000,00 nett and is in the course of being transferred by the Executors
of my late wife’s estate to my insolvent estate and simultaneously to the
Purchasers of the half share.  The proceeds of the R40 000,00 will be dealt

with in my insolvent estate in terms of the provisions of the Insolvency Act.”
He added:
“The half share in the Muizenberg property has, as aforestated, been sold for
R40 000,00, the proceeds whereof will be dealt with in accordance with the
Insolvency Act.”
[24]          Furthermore, the correspondence which had passed between
respondent’s attorney and the trustee’s attorney included a letter from the former in
which the trustee was asked to give his consent to various transactions which
Rosenberg had purported to enter into.  The letter was dated 19 October 1995 and
it read:
“Re: WILFRED ROSENBERG
We refer to the telephone discussion between the writer and your Mr Boet du
Plessis on even date.
We act for First National Bank of Southern Africa Limited, who have
instructed us to register a 5/6th share mortgage Bond in their favour over Sections
46 & 62 Arlington Court, Muizenberg.  It is further our instructions that once the
said Mortgage Bond has been registered in the Cape Town Deeds Registry, we are

to apply to Court for the necessary Order so that the further 1/6th share which is
held in Trust on behalf of Dr Rosenberg’s son until he attains the age of 25 years
may also be Mortgaged.
In terms of an Agreement made and entered into between Dr Wilfred
Rosenberg and Nicola Amanda Krost (born Rosenberg) and Andrea Lara Jayes
(born Rosenberg), the said Nicola and Andrea transferred their combined 1/3rd
share to Dr Rosenberg.
The documents were duly signed by all the parties thereto and lodged for
urgent registration in the Cape Town Deeds Registry.  Immediately prior to
registration we were advised by our Cape Town correspondents that a note had
been raised by the Register to the effect that a Dr Wilfred Rosenberg is insolvent.
Upon enquiries made by us we were advised that contrary to our previous
instructions, Dr Wilfred Rosenberg in this transaction is in fact insolvent.
As you are no doubt aware an Insolvent person is not entitled to deal with any
property registered in his name.  Accordingly, we require the Trustee’s consent to
the transactions as set out aforesaid.  We would appreciate it if you would also
furnish us with a copy of the Trustee’s Certificate of Appointment.  We enclose
herewith the necessary documentation for your information.
Your MOST URGENT attention to this matter would be greatly appreciated,
as it is a matter of extreme importance that this situation be resolved as soon as
possible.  Should you require any further details or assistance from our offices
please do not hesitate to contact the writer.”
[25] Discussions ensued during which the trustee made it clear that he “could

not and would not consent”.  No further action was taken by respondent to pursue
the matter and there it rested until the trustee succeeded in selling the share and
asked for the title deed.  I may add that the title deed had been handed to the
respondent as early as 23 March 1994.  This was prior to the opening of a new
account in Rosenberg’s name on 6 October 1994.  Prior to that he had been
operating another bank account with respondent since 15 June 1992.  That account
was closed after the new one was opened.  Rosenberg was of course an
unrehabilitated insolvent on 23 March 1994 and had no right whatsoever to hand the
title deed to respondent and respondent had no right to retain it as against the
trustee.  This was not done in the belief that the trustee had abandoned the share in
the property.  It  was  done because Rosenberg naively

hoped to conceal his insolvent status and respondent was ignorant of his status.
[26]          In the light of all this, I ask myself if it could reasonably have been
expected of the trustee that he should have anticipated that so inherently improbable
and problematic a proposition as abandonment by him of the share in the property
might conceivably be advanced by respondent as a justification for retaining
possession of the title deed, and that he should accordingly have disclosed the facts
set out in paragraph 30 of Smalberger JA’s judgment.  In my respectful opinion, the
answer is no.
[27]          Let us recall how it came about that the abandonment “defence” first saw
the light of day.  When respondent launched its attack upon the issue of the warrant
and set up what purported to be its justification for retaining possession of the title
deed nary a word was said about abandonment.  Rosenberg was cited by it as
second respondent.  No costs order was sought against him.  After the trustee had

filed his answering affidavits Rosenberg came to light with an answering affidavit.
In the light of what he had said on oath in his application for rehabilitation, it is an
astonishing document.  After noting that no relief is claimed against him and saying
that he deposes to the affidavit “not with a view to opposing the relief claimed, but
with a view to setting out certain salient features” he points to the omission from the
first and final liquidation and distribution account of any mention of the share in the
Muizenberg flat and claims that this was because “during 1995 my half-share of the
flat was abandoned by certain Boet du Plessis, the trustee acting in the matter on
behalf of the First Respondent in favour of my daughters, Andrea Jayes and Nicola
Krost”.
[28]          First, the account was submitted on 22 October 1993.  The abandonment
allegedly took place subsequently in 1995.  The failure to mention the half share in
the flat in the account could therefore not have been because of any abandonment.

Secondly, these allegations are in brazen and totally unexplained contradiction of the
sworn statements made by him when applying for his rehabilitation.  Thirdly, he is
a deponent whose attitude towards the making of statements on oath is, to say the
least, cavalier.  One of the allegations with which he felt it necessary to deal (he did
not deign to deal with his own flatly contradictory allegations in the rehabilitation
application), was his sworn affidavit to his bankers that he had never been
sequestrated.  This at a time when he was an unrehabilitated insolvent.  The
explanation was that the bank’s attorney had prepared the papers for him to sign and
that he signed them without reading them.  The attorney filed an affidavit repudiating
his version.  No less unimpressive was Rosenberg’s assertion on oath that he was
not aware that, when negotiating overdraft facilities,  it was necessary for him to
disclose to the bank that he was an insolvent.
[29]          Notwithstanding the self-contradictory allegations made by Rosenberg,

respondent latched onto the belated allegation of abandonment and sought to make
something of it.  I am unable to accept that the trustee should have foreseen that all
this might happen and therefore should have disclosed the facts set out in paragraph
30.  It is too much to expect.
The abandonment defence
[30]          I have explained the origin of this defence.  The slender foundation upon
which it rests is the trustee’s failure to reflect the share as an asset in the final
account or the supplementary account as he undoubtedly should have done; the
acquiescence in Rosenberg remaining in possession of the title deed; and a lengthy
period of apparent inactivity before seeking again to realise the asset.  The
supporting ipse dixit of Rosenberg is, in the circumstances, not only worthless to
respondent, but positively inimical to its case.
[31]          The failure to reflect the asset in the accounts and the assertion that there

were no further assets available for realization and distribution are of course
consistent with an abandonment. But they are also consistent with a misguided
decision to ignore disclosing it for the time being because it had then no realisable
value, and because, unlike a movable, there was no risk of it being lost to the estate
as long as the caveat registered against it in the Deeds Registry remained in place.
[32]          Allowing Rosenberg to remain in possession of the title deed was of no
significance.  He had been allowed to remain in possession of it before the first
attempt to sell the share was made and there could have been no suggestion then of
that having been indicative of an abandonment of the share.  The mere continuance
of that situation thereafter is at best a neutral factor.
[33]          The lengthy period of apparent inactivity is of little probative value.  This
was a share in a property in which no interest whatsoever had been shown at the first
auction.  Putting property up for auction costs money.  It entails advertising costs

and auctioneer’s fees.  There was no pressure to realize it sooner rather than later.
The only unsecured creditor who proved a claim had had to pay a contribution and
a final account had been submitted and approved.  The only prospect of achieving
anything worthwhile for the share lay at some unspecified future date and just when
a further attempt to do so should be made was up to the trustee to decide.
[34]          These circumstances, whether viewed singly or cumulatively, provide no
firm support for an inference of abandonment.  They are far too equivocal.  When
one adds to that the improbability inherent in the proposition that a trustee would
take it upon himself to simply abandon an asset of this nature, and when one takes
into account the absence of any credible evidence from anyone of having acquired
the share as a consequence of its alleged abandonment, the unreality of the
proposition is magnified.  I leave aside yet other problems which stand in the way
of the proposition, problems such as whether a trustee has the power to abandon

1979 (2) SA 944 (A)
1980 Tydskrif vir die Suid-Afrikaanse Reg 183 at 186-188
At pages 6-11.
property such as this; whether, if he may do so, it may be appropriated by anyone
(and if so, how), or whether ownership passes to the State; whether, if it does not
pass to the State and no one has appropriated it in the meantime, the trustee may
resume ownership by asserting control over it once more; and whether, if obligations
attach to the owner of the property, there can be any effective abandonment of the
property. The answers to these questions are far from clear and the arguments
addressed to us too perfunctory to permit of confident answers being given.  The
dimensions of the problems may be gauged by reference to Minister of Landbou
v Sonnendecker17, a note on that case by C G van der Merwe18, and to Carey Miller,
The Acquisition and Protection of Ownership, (1986).19
[35]          The other attempts at justification for continued retention of the title deed,

in my view, also have no merit.  It was not necessary to re-open the final account
in order to deal with this asset.  The Act contemplates that supplementary accounts
may be filed after the final account has been confirmed.  Where an asset comes to
light after confirmation of the final account nothing prevents the trustee from
realizing it and filing a supplementary account. The position is no different where a
previously unrealized asset is subsequently realized.  In so far as an estoppel is
raised by virtue of Rosenberg having allegedly acted to his prejudice, the simple
answer is that in the face of Rosenberg’s own statements on oath in his rehabilitation
application any such contention is quite untenable.   As to a waiver by the trustee of
the right to this asset, I have already indicated why, in my opinion, the facts do not
permit of an inference of waiver.
[36]          I have dealt with the merits of the defences only because I consider that,
even if notice should have been given, it would serve no purpose to set aside the

warrant on the ground of a failure to give notice if it is quite clear, as I think it is, that
that which respondent would have sought to raise before the magistrate to justify its
possession, is devoid of any merit and could not conceivably have resulted in a
refusal to issue the warrant.  To make an order which would result in the trustee
having to re-apply for a warrant after giving notice to respondent when the outcome
of the application is bound to be the same, would serve no useful purpose.  I cannot
accept that the law requires futile orders to be made which will have no practical
effect.

[37]          The counter-productive consequences of unyielding adherence, come
what may, to the principle of audi can be illustrated by an example which is clearer
still.  After his sequestration an insolvent purports to pledge to a bank as security for
an overdraft a quantity of bearer bonds.  The bank refuses to surrender them to the
trustee.  Without notice to the bank, the trustee obtains a warrant in terms of s 69.

The bank seeks from the High Court an order setting aside the warrant on the
ground of the failure to give it notice.  It discloses to the court what it would have
wished to place before the magistrate, namely, that it
came into possession of the bonds in good faith while ignorant of the insolvent’s
sequestration, and that it holds them as a pledge to secure repayment of an
overdraft.  The court holds that those facts provide no justification in law for
retention of the bonds but sets the warrant aside solely because of the breach of
the  audi principle.  The trustee applies again for the warrant after giving notice  to
the bank.  The bank appears before the magistrate and raises the same  justification
for retention of the bonds as was held to be no justification by the court.  The
trustee replies, first, that the issue of whether that is a justification is res judicata as
between himself and the bank, secondly and alternatively, that, whether or not the

issue is res judicata, the justification raised is in law no justification and that it has
already been so held by the High Court.  The magistrate accepts one or other or
both of the trustee’s submissions and re-issues the warrant.  It is not conceivable
that he could have done anything else.
[38]          What socially useful purpose was served by the setting aside of the
first warrant when, as was plainly foreseeable, it would only result in a renewed
application which was bound to succeed?  And if, as may have happened after the
setting aside of the first warrant, the bank has disposed of the bonds to a third party
for value and thus put them irretrievably beyond the reach of the trustee and the
insolvent’s creditors, what reason is there for the court which set aside the warrant
to look with satisfaction upon its handiwork?  In my opinion, the answer to both
questions is none.

Wade and Forsyth, Administrative Law, 7th edition, pages 526-528; De Smith, Woolf and
Jowell, Judicial Review of Administrative Action, 5th edition, page 500; Baxter,
Administrative Law, 1984, page 538.
[1980] 1 WLR 582 (CA) at 593 F.
[39]          I am alive to the importance of recognising and preserving the distinction
between a fair procedure and the merits of a particular case and the need to avoid
being seduced by what may seem to be the inevitable result of a rehearing.  The
danger of assuming that a particular result is inevitable has been pointed out
frequently. 20  It has also been said (inaccurately, in my respectful opinion) that in
doing so, the court is usurping a function which was entrusted to the functionary
whose decision is under attack.  But the fact remains that the courts have recognised
that where there can be no doubt whatsoever of the inevitability of the decision
remaining the same, it would serve no worthwhile purpose to set the decision
reached aside.  As Brandon L J put the matter in Cinnamond v British Airports
Authority21 (summarising the import of what had been said by Lord Reid and Lord

[1971] 1 WLR 1578 (HL) at p 1582 and p 1595.
Wilberforce in Mallock v Aberdeen Corporation22 ):  “The effect of what Lord
Wilberforce said is that no one can complain of not being given an opportunity to
make representations if such an opportunity would have availed him nothing.”
[40]          In this area of the law there are obviously distinctions to be drawn
between different types of decision.  For example, where the imposition of a
discretionary sanction of one kind or another is the question to be decided, a court
will very rarely, if ever, feel able to conclude that an opportunity of being heard
“would have availed him nothing”.  But where the decision is not truly discretionary
and it is one which the decision maker is obliged to make if the objective
requirements of the relevant statute, both factual and legal, are satisfied, there is
greater latitude for the adoption of the principle that the “court does not act in vain”.

[1971] 1 WLR 1578 (HL) at p 1595 c.
Administrative Law, 7th edition, p 528
(The quoted words are those of Lord Wilberforce in Mallock’s case23.)  This case
falls, in my opinion, within the latter class of case.
[41]          Professors Wade and Forsyth appear to grant that distinctions of that
nature may be legitimate24.  For my part, I have no doubt that they are.  Unswerving
fidelity to a revered procedural principle in even palpably hopeless cases is, I venture
to suggest, too high a price to pay for the limited value such purely ritualistic
demonstrations of loyalty may have in advancing the cause of fair administrative
action.  In my respectful opinion, the potential damage which the adoption of so
rigidly doctrinaire an attitude would do to the image of the courts as sensitive, but
sensible, monitors of administrative action outweighs that limited value.  The
undoubtedly important and worthy cause of fair administrative action can, and

[1965] AC 201 (HL) at 238.
should, be advanced in more appropriate and deserving cases.
[42]          Despite the contrary view of some eminent writers, I do not see the
principle of audi in administrative law as an end in itself, but as a means to an end.
That end is to preclude decisions adverse to the legitimate interests of a person
being taken without that person having had an opportunity of placing before the
decision taker facts and/or submissions which are arguably relevant.  Where the
facts and submissions which would have been raised are plainly irrelevant or
patently untenable a denial of an opportunity to advance them does not infect the
making of the decision with unfairness in any appreciable sense of the word.  As
Lord Devlin said, albeit in a somewhat different context, in In re K (Infants):25
“But a principle of judicial inquiry, whether fundamental or not, is only a
means to an end.  If it can be shown in any particular class of case that the
observance of a principle of this sort does not serve the ends of justice, it

must be dismissed; otherwise it would become the master instead of the
servant of justice.”
[43]          Nothing that I have said should be interpreted as a denial of the
importance of, and the need for, a rigorous insistence upon fulfilment of the audi
principle in cases in which it is applicable and in which its non-fulfilment could
conceivably have resulted in prejudice.  All that I am at pains to attempt to show is
that, in a case where it is indeed clear beyond any doubt that what the aggrieved
party wished to say could not conceivably have averted or altered the decision, the
denial of the opportunity to say it cannot sensibly be said to have been unfair.  In the
nature of things the cases in which it will be so clear that no possible prejudice could
have been suffered will be rare.  But that they will occur from time to time is certain.
This, in my view, is one of them.
[44]          There seems to me to be a growing trend in the courts in England

See, in addition to the cases already cited, Byrne v Kinematograph Reuters Society
Ltd [1958] 2 All ER 579 (ChD); Glynn v Keele University [1971] 2 All ER 89
(ChD); R v Chief Constable of the Thames Valley, Ex parte Cotton [1990] IRLR
334 (CA).
[1943] AC 627 (HL) at 644-5.
[1964] AC 40 (HL) at 128.
towards acceptance of the conceptual validity of this limited exception to what
would otherwise be a purely mechanistic insistence upon compliance with the audi
principle26.  Those who view these developments as undesirable and unsound
usually call in aid dicta such as the following:
“If the principles of natural justice are violated in respect of any decision, it
is, indeed, immaterial whether the same decision would have been arrived at
in the absence of the departure from the essential principles of justice. The
decision must be declared to be no decision.”  (Lord Wright in General
Medical Council v Spackman27.)
“I do not find that the answer put by counsel for the watch committee to your
Lordships that the case was as plain as a pikestaff is an answer to the demand
for natural justice.”  (Lord Hodson in Ridge v Baldwin28.)
“If a domestic tribunal fails to act in accordance with natural justice, the
person affected by their decision can always seek redress in the courts.  It is
prejudice to any man to be denied justice.  He will not, of course, be entitled

[1961] AC 945 (PC) at 956.
to damages if he suffered none.  But he can always ask for the decision
against him to be set aside.”  (Lord Denning in Annamunthodo v Oilfields
Workers’ Trade Union29.)
[45]         If the cases in which these dicta were uttered are examined, they will all
be found to be cases in which there was no doubt that actual or potential prejudice
was the result of the particular departure from the requirements of natural justice.
In Spackman’s case 27 the dictum followed immediately after Lord Wright had cited
a previous case in which a decree of Lord Cottonham LC had been set aside
because, unknown to the defendant, he had an interest in the plaintiff company.
Lord Wright pointed out that, in that case, it was regarded as “immaterial that, as
Lord Campbell said, ‘no one can suppose that Lord Cottonham could be, in the
remotest degree, influenced by the interest that he had in this concern’”.  The
reasons why this particular breach (apparent lack of impartiality) of the principles of

natural justice is irremediable are so well known that explanation is unnecessary.  I
beg leave to doubt whether Lord Wright would have expressed himself as
expansively as he did if his mind had been pertinently directed to the issue under
discussion in this case.  Moreover, the case was one in which what the aggrieved
doctor wished to do was to place before the council obviously relevant evidence
which might have affected the ultimate decision.  A denial of that opportunity was
obviously prejudicial.
[46]          In Annamunthodo’s case 29 the prejudice was equally clear.  New
charges were preferred against him in his absence and sustained.  Counsel for the
Union contended that he had to show prejudice before the decision became liable
to be set aside.  This could only mean, so it was argued, that he had to show that
he would have been acquitted of the new charges or suffered a different penalty if
he had been given notice.  It was this contention which the dictum quoted was

intended to address.  It was clear that counsel for the Union was putting the
proposition too high.  It was enough that, if he had been given notice he might have
been able to avert conviction or mitigate the penalty.  The denial of that opportunity
was accordingly a denial of justice.  That, as I see it, is all the dictum was intended
to convey.  Here again the focus was not upon the particular problem under
consideration now.
[47]          In Ridge v Baldwin 28 too, the case was one where it was obvious that
there had been prejudice in that it could not be said that the party aggrieved had
nothing of consequence which could have been put forward had the opportunity to
do so been given him.  Here again, there is reason to doubt whether the dictum
quoted was intended to cover every conceivable situation which might arise.
[48]          In my opinion, the state of the case law in England is fairly summarised

Judicial Review of Administrative Action, 5th ed, at page 501.
[1975] AC 295 (CA) at 319 H - 320 F.
by De Smith, Woolf and Jowell30:
“But on the whole judges have declined to commit themselves unequivocally
to the proposition that intervention will never be withheld when they are
satisfied that no amount of procedural propriety would have affected the
outcome.”
For the reasons I have given, I consider their reluctance to do so to be not only
readily understandable but justifiable.
[49]          It is perhaps necessary to raise a skittle if only to knock it down.  It may
be suggested that if notice should have been given and it was not, the decision of
the magistrate was void.  No such contention was advanced in argument. However,
had it been raised, what Lord Denning had to say in the Court  of  Appeal  in
Hoffmann-La Roche  v   Trade Secretary31  would have been apposite:
“I have always understood the word ‘void’ to mean that the transaction in

question is absolutely void - a nullity incapable of any legal consequences -
not only bad but incurably bad - so much so that all the world can ignore it
and that nothing can be founded on it: see MacFoy v United Africa Co Ltd
[1962] AC 152, 160.
If the word ‘void’ is used in that sense, the report of the Monopolies
Commission was certainly not void.  A failure to observe the rules of natural
justice does not render a decision or order or report absolutely void in the
sense that it is a nullity.  The legal consequences are best told by recounting
the remedies available in respect of it.  A person who has been unfairly treated
(by reason of the breach of natural justice) can go to the courts and ask for
the decision or order or report, or whatever it is, to be quashed, or for a
declaration that it is invalid, that it has not and never has had any effect as
against him.  But it is a personal remedy, personal to him.  If he does not
choose himself to query it and seek a remedy, no one else can do so: See
Durayappah v Fernando [1967] 2 AC 337, 353.  But it is within the
discretion of the court whether to grant him such a remedy or not.  He may
be debarred from relief it he has acquiesced in the invalidity or has waived it.
If he does not come with due diligence and ask for it to be set aside, he may
be sent away with nothing:  see Reg. v Aston University Senate, Ex parte
Roffey [1069] 2 QB 538.  If his conduct has been disgraceful and he has in
fact suffered no injustice, he may be refused relief: see Glynn v Keele
University [1971] 1 WLR 487 and Ward v Bradford Corpn (1971) 70 LGR
27.  If it is a decision or order or report which affects many other persons
besides him, the court may not think it right to declare it invalid at his instance
alone: see Maxwell v Department of Trade and Industry (unreported),

December 20, 1972, a decision of Wien J, of which we were supplied with a
transcript.  Moreover, pending a decision by the courts as to its validity, other
persons may be justified in acting on the footing that it is valid.  If the decision
or order or report is good on the face of it, and there is no good reason for
supposing it to be invalid, other persons can treat it as valid. To it I would
apply the words of Lord Radcliffe in Smith v East Elloe Rural District
Council [1956] AC 736, 769-770:
‘An order .... is still an act capable of legal consequences.  It
bears no brand of invalidity upon its forehead.  Unless the
necessary proceedings are taken at law to establish the cause of
invalidity and to get it quashed or otherwise upset, it will remain
as effective for its ostensible purpose as the most impeccable of
orders.’
So here, the report of the Monopolies Commission, even if it was made in
breach of the rules of natural justice, is still capable of legal consequence.”
[50]          While those observations may not command unqualified acceptance in
situations where the giving of an opportunity to be heard is a statutorily imposed and
peremptory condition precedent to the exercise of a decision making power, they
appear to me to be substantially accurate when the need to provide such an
opportunity derives, not from any statutory imperative, but from the applicability of

the common law principle of audi.  In the former class of case, a failure to provide
the opportunity will ordinarily mean that the decision taken is ultra vires.  In the latter
class of case, there can be no talk of the decision being ultra vires.  The decision will
only be vitiated if in fact the failure to afford the opportunity did amount to a failure
of justice in the circumstances of the particular case in the sense that an opportunity
to say something which could conceivably have brought about a different result, was
denied.  The reason why it will be vitiated will not be because it was ultra vires, but
because it was given in material breach of the common law principles of natural
justice and resulted or may have resulted in actual (as opposed to theoretical)
unfairness in the decision making process.  At best for respondent the present case
would fall within the latter class of case.  (I may say that since essaying this analysis,
I have found that in some respects it resembles closely the independent analysis of

At pages 92-94.
[1964] AC 40 (HL) at 138-139 and 141 in fine - 142.
Rose Innes in his Judicial Review of Administrative Action32.   See too the remarks
of Lord Devlin in Ridge v Baldwin33.)
[51]          For the sake of accuracy I should mention that s 69 does not of course
apply to immovable property.  The share in the sectional title unit is an immovable.
The title deed itself is a movable.  It is also a document.  It is therefore subject to s
69.  On the tacit assumption that an abandonment of the share itself would have to
be taken to include an abandonment of the title deed the contentions of the parties
focused upon the alleged abandonment of the share.  That is why I too have focused
upon abandonment of the share rather than the title deed.
[52]          I would uphold the appeal with costs and alter the order of the court a quo
to read:

“The application is dismissed with costs.”

R M MARAIS
JUDGE OF APPEAL
ZULMAN JA:   CONCURS