THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

Case no:  173/2001
REPORTABLE

In the matter between:

MELVYN WEINER NO

Appellant

and

JIM GERARD PAUL BROEKHUYSEN
Respondent

Before:
Nienaber, Howie and Cameron JJA
Appeal heard: 16 May 2002
Judgment:
31 May 2002

Administration orders – Magistrates’ Courts Act 32 of 1944, s 74 –
Interpretation of – Administrator’s entitlement to fees

JUDGMENT
_______________________________________________________

CAMERON JA:

INTRODUCTION

[1] In the Magistrate’s Court at Wynberg, the appellant was on 11 May
1998 appointed the administrator in the estate of a married couple who
were unable to meet their financial obligations.  The order was granted
in terms of s 74(1) of the Magistrates’ Courts Act 32 of 1944 (‘the Act’).
This provides for the administration under court supervision of the
estate of a debtor in financial straits.  Such an order structures the
debtor’s liabilities and provides for their repayment under the direction
of the administrator,1 thus keeping the creditors from the door.  But the
terms of the order granted in this case gave rise to a dispute between
the appellant (‘the administrator’) and the respondent, who was at the
time, because of loans he had advanced to them, the couple’s biggest
creditor (‘the creditor’), and therefore most likely to be affected.

1 Section 74(1):
Where a debtor-
(a)
is unable forthwith to pay the amount of any judgment obtained against him in court, or to
meet his financial obligations, and has not sufficient assets capable of attachment to satisfy such
judgment or obligations; and
(b)
states that the total amount of all his debts due does not exceed the amount* determined
by the Minister from time to time by notice in the Gazette,
such court or the court of the district in which the debtor resides or carries on business or is
employed may, upon application by the debtor or under section 65I, subject to such conditions as
the court may deem fit with regard to security, preservation or disposal of assets, realization of
movables subject to hypothec (except movables referred to in section 34 of the Land Bank Act,
1944 (Act 13 of 1944)), or otherwise, make an order (in this Act called an administration order)
providing for the administration of his estate and for the payment of his debts in instalments or
otherwise.

[2] The appeal originates in an application the creditor brought some
months after the grant of the original order to amend it.  At first instance
in the Wynberg Magistrates’ Court the creditor was largely successful.
The Magistrate granted relief substantially amending the original order,
and ordered the administrator to pay the costs of the amendment
application from his own pocket on an attorney and client scale.
Against that order the administrator then appealed to the Cape High
Court, which pruned the relief the creditor had obtained, and reduced
the burden of the costs order imposed on the administrator.  But in
substantial respects the Cape Court (‘the Court below’) endorsed the
approach the magistrate had taken in amending the original order,2 and
despite the administrator’s limited success it ordered the creditor to pay
only half of the administrator’s costs of appeal.  Against that order the
administrator now appeals with the leave of the Court below (obtained
after an abortive appeal to a three judge court of that division had first
been lodged and then struck from the roll).3  More than four years after
the grant of the original order, the affairs of the couple – whose modest
income, his as a local authority administration assistant, hers as a

2 Weiner NO v Broekhuysen 2001 (2) SA 716 (C) (van Reenen J and Revelas AJ).
3 For a similar conclusion that leave cannot be granted to appeal to a three judge bench of a
provincial or local division from a decision of a two-judge appellate court, see S v McMillan 2001

cleaning supervisor – have paled in the legal contest.  The struggle now
concerns primarily the powers and duties of a professional
administrator, the conflicting interests of an administrator and a creditor
in how an administration order is executed, and what benefits each
derives from it.

[3] Administration orders were first introduced when the Act came into
force in 1944.  Its predecessor, the Magistrates’ Court Act 32 of 1917,
had no such mechanism.  The new provisions created a procedure that
was at the time rightly dubbed a ‘modified form of insolvency’,4 since it
is particularly suited to dealing with small estates where sequestration
proceedings would swallow the debtor’s assets.5  As Caney AJ
explained more than fifty years ago:
‘This is designed, it seems to me, as a means of obtaining a concursus creditorum easily, quickly
and inexpensively, and is particularly appropriate for dealing with the affairs of debtors who have
little assets and income and genuinely wish to cope with financial misfortune which has
overtaken them.  Creditors have certain advantages under such an order, including the
appointment of an independent administrator and the opportunity of examining the debtor.  They
are not debarred from sequestrating the debtor if the occasion to do so arises.’6

(1) SACR 148 (W).
4 Jones and Buckle The Civil Practice of the Magistrates’ Courts in South Africa 5ed (1946),
approved in Madari v Cassim 1950 (2) SA 35 (D) 38, though criticised by CP Joubert (1956) 19
THRHR 135 at 138.
5 Jones and Buckle The Civil Practice of the Magistrates’ Courts in South Africa 9 ed (1997) page
305.
6 Madari v Cassim 1950 (2) SA 35 (D) 38.

[4] The provisions, which have frequently been amended,7 are now spelt
out in prolific detail in s 74 and its associated provisions, s 74A to 74W.
The upper limit of the liabilities of a debtor wishing to benefit from the
procedure, which the Minister of Justice determines by promulgation
from time to time, is currently R50 000.8  Despite the detail the statute
contains, this appeal demonstrates the extent to which disputes about
its implementation can nevertheless arise.  The pivotal question it
raises is whether the creditor had good cause in terms of s 74Q9 to
obtain an amendment of the original order.  Underlying that question is
a dispute between the creditor and the administrator about the manner
in which the original order was obtained, questions about the inter-
relation between the relevant statutory provisions, and perhaps most
importantly (not only to the parties to the appeal, but also to debtors
subject to such orders) the emoluments to which an administrator is
entitled.  To deal with these questions adequately some factual
background is necessary.

7 Particularly by Act 63 of 1976, which inserted sections 74A to 74W; see JC du Plessis and
others De Rebus June 1978 289-292.
8 GN R1441, Government Gazette 19435 of 30 October 1998, with effect from 1 November 1998.
9 Section 74Q (1) reads:
(1) The court under whose supervision any administration order is being executed, may at any
time upon application by the debtor or any interested party re-open the proceedings and call upon
the debtor to appear for such further examination as the court may deem necessary, and the
court may thereupon on good cause shown suspend, amend or rescind the administration order,
and when it suspends such an order it may impose such conditions as it may deem just and

FACTS
[5] Although the debtors themselves formally applied for the original order,
it bore the name and appears to have emanated from the office of the
administrator, the present appellant, whom they asked the court to
appoint.  The application was, as the statute requires (s 74A(5)),10
delivered to each of the couple’s creditors.  The respondent in the
appeal, being the largest creditor, objected to the size of the monthly
amount the couple tendered to pay (R830, 00 per month).11  He thought
it too small.  So he despatched an attorney to the Wynberg court.
Before the matter was called, his attorney arranged with the
administrator (himself an attorney, and who appears of record for
himself in this matter, but who is apparently engaged largely in the
business of statutory debtors’ administration), for the amount to be
increased to R1 130,00.

reasonable.
10 Section 74(5):
The debtor shall lodge an application for an administration order and the statement referred to in
subsection (1) with the clerk of the court and shall deliver to each of his creditors, at least 3 days
before the date appointed for the hearing, personally or by registered post a copy of such
application and statement on which shall appear the case number under which the original
application was filed.
11 Section 74A(2)(l), read with Form 51, requires that the debtor’s statement of affairs lodged with
the application for an administration order state ‘the amount of the weekly or monthly or other

[6] In his capacity as an attorney the administrator then moved the
application.  He handed the Magistrate a draft order.  This was made
an order of court.  On 15 June 1998 the creditor’s attorneys received a
copy.  The result was a strenuous objection and a protracted wrangle
resulting in this appeal.

[7] The first paragraph of the original order gave rise to the trouble.  It
reads thus (for clarity I have numbered its five distinct components):
(1) The applicant is, in terms of section 74 of the Magistrates’ Court Act 1944, placed under
administration.  Melvyn Weiner of NW Financial Administrators CC is, in terms of section
74E,12 appointed Administrator and applicant is to pay R1 130 per month to the
Administrator as from 30 May 1008 and thereafter on the 30th day of each month, for pro
rata distribution amongst all proven creditors.
(2) The first distribution shall be for payment to the Administrator up to and including end
August 1998, subject to the Administrator’s right to delay the distribution if in his opinion
there is not sufficient money to cover all costs and to still do a viable distribution.
(3) Thereafter, every subsequent distribution shall be in respect of each three payments
received by the Administrator.
(4) The costs of the application for administration shall be costs in the Administration, and
the Administrator shall be entitled to deduct the said costs from the money paid to him
by the Applicant in terms of this order, before calculating and effecting the first
distribution.
(5) Before effecting a distribution the Administrator may also deduct his costs in respect of
sections 74L, 74M and paragraphs 1(a) and (b) of the general provisions to the tariff for
section 74.

[8] The Magistrate deleted components (2), (3) (4) and (5) of the original
order.  (He also gave other relief and a costs order that the Court below

instalments which the debtor offers to pay toward settlement’ of current debts.
12 Section 74E(1):
(1) When an administration order has been granted under section 74 (1), the court shall appoint a
person as administrator, which appointment shall become effective only after a copy of the
administration order has been handed or sent to him by registered post and, in the event of his

set aside and which is accordingly not now relevant.)  The Court below
confirmed the deletion of components (2) and (3).  It considered
component (4) either unexceptionable as being in accord with the
provisions of s 74O13 or for that reason superfluous (and therefore also
subject to deletion).14  In respect of component (5) the Court below held
that ‘costs’ had a narrow signification and that the application of the
term in relation to the remuneration that may be deducted in terms of s
74L(1)(a),15 as well as the additional fees that are provided for by para
1(b) of the General Provision in respect of Proceedings in terms of
Section 74 of the Act (Part III of Annexure 2 to the Rules of the
Magistrates’ Courts)16 ‘clearly inappropriate’, as was the reference to s

being required as administrator to give security, after he has given such security.
13 S 74O:
Unless the court otherwise orders or this Act otherwise provides, no costs in connection with any
application in terms of section 74 (1) shall be recovered from any person other than the
administrator concerned, and then as a first claim against the moneys controlled by him.
14 2001 (2) SA 716 (C) 723C-H and 725B.
15 Section 74L:
(1) An administrator may, before making a distribution –
(a)
deduct from the money collected his necessary expenses and a remuneration
determined in accordance with a tariff prescribed in the rules;
(b)
retain a portion of the money collected, in the manner and up to an amount prescribed in
the rules, to cover the costs that he may have to incur if the debtor is in default or disappears.
(2) The expenses and remuneration mentioned in subsection (1) (a) shall not exceed 12% per
cent of the amount of collected moneys received and such expenses and remuneration shall,
upon application by any interested party, be subject to taxation by the clerk of the court and
review by any judicial officer.
16 Part III provides in part:
1. The following fees shall be allowed in addition to those laid down in the Tariff to this Part:
(a) All necessary disbursements incurred in connection with the proceedings.
(b) In addition to the fees stated below, the administrator shall be entitled to a fee of
10% on each instalment collected for the redemption of capital and costs.
2. [Stipulates the number of printed or written words or figures that constitute a folio for
purposes of the Tariff.]

74M.  Component (5) was therefore also deleted.  It is against this
order (apart from the deletion of the reference to s 74M), together with
the costs order the Court below granted, that this appeal is brought.

DID THE CREDITOR HAVE ‘GOOD CAUSE’ FOR AMENDING THE ORIGINAL
ORDER?
[9] Section 74Q(1)17 requires that ‘good cause’ be shown before a
subsisting administration order can be amended.  The creditor objected
to the order granted on two bases: that it differed materially from that to
which his attorney had consented on his behalf and had thus been
obtained without his consent; and that it conflicted with the provisions of
the statute.  It is unnecessary to consider in detail what ‘good cause’ in
s 74Q comprehends, since it is plain that an order granted in conflict
with the statute is subject to amendment in terms of s 74Q, and that
any interested party (the creditor clearly being one) would have cause
to seek its amendment.  For the same reason it is unnecessary at this
stage to examine the creditor’s complaint about the manner in which
the administrator obtained the order during the court proceedings on 11
May 1998; I consider that later in connection with costs.

(A nine-item Tariff then follows under a separate heading.)

Component (2)
[10] The creditor’s complaint about component (2) is that it makes the first
distribution subject to the administrator’s power to delay it indefinitely
and thus violates the basic scheme of the statute.  These submissions
are well founded.  Section 74J deals with the duties of an administrator.
It reads in part:
(1) An administrator shall collect the payments to be made in terms of the administration
order concerned and shall keep up to date a list (which shall be available for
inspection, free of charge, by the debtor and creditors or their attorneys during office
hours) of all payments and other funds received by him from or on behalf of the
debtor, indicating the amount and date of each payment, and shall, subject to section
74L, distribute such payments pro rata among the creditors at least once every three
months, unless all the creditors otherwise agree or the court otherwise orders in any
particular case.

[11] This provision must be read with Section 74C(1).  Sub-paragraph (a)
specifies that an administration order ‘shall be in the form prescribed by
the rules’ and requires that it ‘lay down the amount of the weekly or
monthly or other payments to be made’.  Sub-paragraph (b) provides
additionally that the order ‘may specify’ certain other matters, including
–
‘(v) such other provisions or conditions as the court may deem necessary or expedient.’

17 Set out in footnote 9 above.

[12] It is plain from s 74J(1) that a court granting an administration order
must in general require the administrator to effect distributions to
creditors ‘at least once every three months’.  That is the position by
default.  Deviation is licensed in two circumstances: where the creditors
all agree, or where ‘the court otherwise orders’.  Here the creditors did
not agree.  The only basis for deviation was therefore an order by the
Magistrate.  But such an order, though the Magistrate has clear power
to make it, is not there merely for the asking.  It must be sought for
reasons disclosed in the application that is served on the creditors.
Notice to the creditors is essential precisely because the provision
envisages a different order even if they withhold agreement or actively
oppose it.  The implication is that their consent will first be sought.  If
they are not notified that deviation will be sought, they are entitled to
assume that the order will specify that distributions must occur ‘at least
once every three months’.

[13] In the present case, the original application gave no inkling that
distributions were contemplated on any basis other than at least once
every three months.  The application served on the creditors told them
merely that the debtors would apply for an order placing their estate

under administration in terms of s 74 ‘and asking the Court to add such
further conditions as it may deem necessary or expedient in terms of
section 74C(1)(b)(v)’.  The appellant’s counsel contended that the order
as granted falls within the express powers conferred on a court in
granting an administration order.  That misses the point, which is both
procedural and substantive.  If deviation from the basic scheme of the
Act is to be licensed, it must be for reasons disclosed in the application.
Deviation by stealth or ambush or oversight is not permitted.

[14] The Court below considered that because the creditor was content to
agree to an order alluding to s 74C(1)(b)(v), he in anticipation ‘resigned
himself to the insertion of such provisions and conditions as the court
deemed necessary or expedient’.18  I cannot agree.  The statute
contemplates distributions at least three-monthly, unless all the
creditors agree or the court orders otherwise.  Either the creditors’
consent to a different scheme of distribution must be procured in
advance or, if that is lacking, their attention must be alerted to the fact
that such an order will be sought.  An anodyne allusion to s
74C(1)(b)(v) cannot obliterate the structure of the Act or the creditors’

18 2001 (2) SA 716 (C) 722G-H.

just expectations under it.  The order granting the administrator the
‘right’ to delay distribution was therefore inappropriate on the ground of
absence of notice to the creditors alone.

[15] Component (2) in any event suffers from further vices.  The order
places the date of the first distribution at the behest of the administrator.
That date is to be fixed when he forms an ‘opinion’ as to a certain state
of affairs.  Such an order contemplates a delegation of the Magistrate’s
power to specify the terms of the administration that the legislation does
not authorise.  It is therefore inherently bad.  What is more, the order
granted permits the opinion to be formed on the occasion of an event in
which the administrator has a direct interest, namely whether there is
‘sufficient money to cover all costs’.  The conflict is patent, and it is
undesirable.  The order also expresses that event with manifest
imprecision: what is a ‘viable distribution’?  This leaves the creditors at
the mercy of the administrator’s subjective perception of what duty and
convenience may require.

[16] Counsel for the appellant contended that interested parties are
protected because subsections 74J(11) and (12)19 create supervisory
mechanisms and controls, and because s 74E(2) provides that an
administrator may on good cause be relieved of his appointment.20
Reference may be made also to s 74N.21  These protections are no
doubt important.  But they do not suffice where the order is inherently
flawed.  This one clearly is.  As the Court below observed, court orders
should not be formulated so as to leave compliance at the discretion of
the person bound by them.22  This infringes not only the principle that
such orders should be capable of enforcement, but the principle of
certainty by legal regulation.  Such a state of affairs is intolerable, and
component (2) was vitiated in all its essentials.

19 Section 74J (11) and (12):
(11) If an administrator fails to lodge a distribution account with the clerk of the court within one
month from the time his obligation to do so commenced, any interested party may apply to the
court for an order directing him to lodge a distribution account with the clerk of the court within the
time laid down in the order or relieving him of his office as administrator.
(12) If an administrator has lodged a distribution account with the clerk of the court but has failed
to pay any amount of money due to any creditor in terms of such account within one month
thereafter, the court may upon the application of the creditor order the administrator to pay the
creditor the amount concerned within such period as may be fixed in the order and furthermore to
pay to the debtor's estate an amount which is double the amount which he failed so to pay.
20 Section 74E(2):
(2) An administrator may on good cause shown be relieved of his appointment by the court, and
the court may appoint any other person in his place.
21 74N Failure by administrator to perform his duties
An administrator shall take the proper steps to enforce an administration order, and if he fails to
do so, any creditor may, by leave of the court, take those steps, and the court may thereupon
order the administrator to pay the costs of the creditor de bonis propriis.

Component (3)
[17] This component upends the basic scheme of the statute.  Similar
reasoning to that under component (2) applies.  Unless otherwise
agreed or ordered, the statute contemplates that debtors under
administration must make regular payments, which are to be converted
into regular distributions to their creditors.  Instead of providing for
distributions at least once every three months, component (3) made
distributions subject to receipt by the administrator of three payments
from the debtors.  But what if the debtors paid irregularly?  In that case
component (3) provided that the creditors were to receive not even
irregular distributions, as the payments came in:  they were to be paid
only after the third payment came in.  As the Court below pointed out,
‘the Legislature in s 74J(1) intended making the distribution of moneys
received from debtors to be time- and not event-related’.23  The third
component was therefore also bad.

Component (4)
[18] The administrator contended that since the Court below found this
component to accord with the statute, it should not have been deleted.

22 2001 (2) SA 716 (C) 722-3.

Counsel for the respondent however submitted that component (4)
‘does not accord entirely’ with s 74O.24  She rightly pointed out that the
costs of applying for the order, which are recoverable under s 74O,
differ entirely from the costs of the actual administration, with which s
74L25 deals.  She conceded that where the costs are recoverable from
the administrator, they are a first claim against the money the
administrator controls.  However, she rightly emphasised that s 74O
does not entitle an administrator simply to deduct his application costs
from the payments the debtors make (although these costs would be a
first charge against the moneys he controls).  Section 74J(5)26 requires
the administrator to complete a distribution account (Form 52).  That
form, as counsel pointed out, makes provision for the deduction of only

23 2001 (2) SA 716 (C) 723A-B.
24 Section 74O Costs of application for administration order
Unless the court otherwise orders or this Act otherwise provides, no costs in connection with any
application in terms of section 74 (1) shall be recovered from any person other than the
administrator concerned, and then as a first claim against the moneys controlled by him.
25 74L Remuneration and expenses of administrator
(1) An administrator may, before making a distribution-
(a)
deduct from the money collected his necessary expenses and a remuneration
determined in accordance with a tariff prescribed in the rules;
(b)
retain a portion of the money collected, in the manner and up to an amount prescribed in
the rules, to cover the costs that he may have to incur if the debtor is in default or disappears.
(2) The expenses and remuneration mentioned in subsection (1) (a) shall not exceed 12« per
cent of the amount of collected moneys received and such expenses and remuneration shall,
upon application by any interested party, be subject to taxation by the clerk of the court and
review by any judicial officer.
26 Section 74J(5):
(5) Every distribution account in respect of the periodical payments and other funds received by
an administrator shall be numbered consecutively, shall bear the case number under which the
administration order has been filed, shall be in the form prescribed in the rules, shall be signed by
the administrator and shall be lodged at the office of the clerk of the court where it may be

s 74L administration costs.  No express mention is made of s 74O
application costs.  Form 52 however clearly provides for ‘other
payments’ to be made during the administration, and these would if
necessary obviously encompass also s 74O application costs.
Respondent’s counsel fell back on the contention that it was
‘undesirable’ that the administrator should have been granted an order
that he could deduct his s 74O costs where he was also given the
power to delay distribution indefinitely.  That is no doubt so; but the
offending portions of the order have already been condemned to
excision.  It follows that the conclusion of the Court below that
component (4) accorded with the Act is right.  I can also however not
fault its conclusion that if component (4) was merely intended to reflect
the relevant provision in the Act, there could be no point in including it.
By corollary there can be no objection to excluding it.  No costs or any
other issue of consequence in any event turns on this.

Component (5)
[19] The most opaque part of the parties’ dispute concerned component
(5).  As already noted, the administrator conceded that the reference to

inspected free of charge by the debtor and the creditors or their attorneys during office hours.

s 74M27 was inappropriate.  Section 74M licenses the collection of
charges, not their disbursement.  As it stands, the rest of component (5)
may seem uncontentious, since it merely permits the administrator to
deduct his s 74L administration costs as well as those in ‘paragraphs
1(a) and (b) of the general provisions to the tariff for section 74’.

[20] This blandness masks a dispute of substance, however, since the
administrator and the creditor in their opposing papers took
diametrically opposite views on the interpretation of s 74L and the costs
it licenses.  The Court below, in addition, held that the word ‘costs’ as it
appears in component (5) was inappropriate, since s 74L and the
general provisions of the tariff do not contemplate ‘compensation for the
expense of litigation incurred’.28  And this conclusion the administrator
specifically challenged on appeal.  What is more, the decision of the
Court below has been interpreted in a way that makes it desirable that
this Court resolve the issue.29

27 Section 74M Furnishing of information by administrator
The administrator shall upon payment of the fees prescribed in the rules-
(a)
furnish any creditor applying therefor with such information about the progress made in
regard to the administration as he may desire; and
(b)
furnish any person applying therefor with a copy of the debtor's application and statement
of his affairs mentioned in sections 74 and 74A (1), or with a list or account mentioned in section
74G (1) or 74J, or with the debtor's statement of his affairs mentioned in section 65I (2).
28 2001 (2) SA 716 (C) 724H-I.
29 Jones and Buckle (above) Service 7, 2001, Act 321-322.

[21] The starting point in doing so must be s 74L, which empowers an
administrator, before making a distribution, to (a) ‘deduct from the
money collected his necessary expenses and a remuneration
determined in accordance with a tariff prescribed in the rules’; and (b)
retain a portion of the money collected to defray costs if the debtor
defaults or disappears.  Section 74L(2) goes on to provide:
‘The expenses and remuneration mentioned in subsection (1)(a) shall not exceed 12½
per cent of the amount of collected moneys received and such expenses and
remuneration shall, upon application by any interested party, be subject to taxation by the
clerk of the court and review by any judicial officer.’

[22] The difficulty arises from the Tariff promulgated under the Rules.  It is
contained in Part III of Annexure 2 to the Rules.  This has already in
part been footnoted.  Its significance to this portion of the appeal
however makes it necessary to set it out more fully:
PART III
GENERAL PROVISIONS IN RESPECT OF PROCEEDINGS IN TERMS OF SECTION 74
OF THE ACT
1. The following fees shall be allowed in addition to those laid down in the Tariff to this
Part:
(a) All necessary disbursements incurred in connection with the proceedings.
(b) In addition to the fees stated below, the administrator shall be entitled to a
fee of 10% on each instalment collected for the redemption of capital and
costs.
2. For the purposes of items 4 and 5 of the Tariff to this Part, a folio shall consist of 100
written or printed words or figures and four figures shall be reckoned as one word.

Under a separate heading, a nine-item Tariff then follows. The items the
Tariff enumerates, as the Court below pointed out,30 make provision for
fees in relation to applications for administration orders as well as for
proceedings after they have been granted.  Included is a general item,
item 9, alluding to ‘correspondences and attendances’.

[23] The problem in reconciling Part III with section 74L is this.  Section
74L(1) gives an administrator an entitlement to necessary expenses
and a remuneration determined in accordance with a prescribed tariff,
while s 74L(2) states that the ‘expenses and remuneration mentioned in
subsection 1(a) shall not exceed 12½ per cent of the amount of
collected moneys received’.  But Part III appears to contemplate
recovery for the items expressly specified under the Tariff, plus
necessary disbursements, plus, in addition to the Tariff fees, a fee of
10% on each instalment collected.  This led the administrator to
contend that he was entitled to a 10% fee on collections over and
above his necessary expenses and the allowances specified under the
Tariff.  In effect, the administrator contended, while the statute caps his

30 2001 (2) SA 716 (C) 724F.

expenses and Tariff items at 12½ % of moneys collected, his 10%
allowance is additional to that.

[24] The creditor contended, conversely, that the 10% fee Part III allows
must be reckoned as part of the 12½ % cap s 74L(2) imposes.  It is not
difficult to see why the parties’ contentions differ so widely.  The impact
on small distributions of calculating and deducting fees in the one way
rather than the other will be substantial, with a significant resultant
impact on creditors’ recovery.  We were told during argument that
administration orders have assumed far greater importance since the
burgeoning of the micro-lending business, with resultant friction
between money-lenders and administrators, which the contentions in
this case seem to illustrate.

[25] As indicated, the difficulty arises from the fact that Part III seems to
create three heads of recovery, namely (i) Tariff fees; (ii) necessary
disbursements; and (iii) an additional 10% fee, while s 74L
contemplates only ‘necessary expenses’ and a ‘remuneration’, the two
together being limited to a 12½ % cap.  There thus appears to be a
conflict.  If so, it must of course be resolved within the terms of the

authorising statute.  Section 74L makes no mention of a ‘fee’.  The
drafters of the Rules must therefore be taken, in referring in Part III to a
10% fee, to have acted within the s 74L power to determine ‘a
remuneration determined in accordance with a tariff prescribed in the
rules’.  That provision is the sole source of any power to determine a
‘fee’ in Part III.  But that same remuneration s 74L(2) expressly states
(together with expenses) to be subject to a maximum, namely 12½ % of
moneys collected.

[26] I therefore conclude that the creditor’s contentions must prevail, and
that Part III must be read as subordinating the administrator’s
entitlement to a 10% fee on moneys collected to the 12½ % total cap
the statute lays down.  Put differently, the ‘tariff’ referred to in s 74L(1)
is Part III in its entirety, and not just the nine-item list headed ‘Tariff”.  It
follows that to the extent that component (5) of the original order
granted could be read as securing to the administrator any recovery
(whether for fees, expenses or remuneration) in excess of a 12½ %
maximum of the moneys collected, it was also bad and should be
excised.  This approach is somewhat different from that of the Court

below,31 and I do not find it necessary to say anything about the
meaning of ‘costs’ in component (5).

COSTS
[27] It follows from this that the appeal must be dismissed.  The
administrator appealed also against the refusal by the Court below to
intervene more radically in the costs order imposed at first instance.
The Magistrate ordered the administrator to bear the costs of the
amendment application on an attorney and client scale from his own
pocket (de bonis propriis).  The Court below altered that in two
respects: (a) the administrator was to pay only half of the amendment
application costs, albeit still from his own pocket; (b) the costs were to
be taxed on the ordinary party-and-party scale.

[28] Before us, counsel for the administrator contended that the Court
below had misdirected itself in intervening in this limited fashion.  The
submission is unsound.  The Magistrate rightly took into account the
fact that the terms of the order the administrator sought, which deviated
from the default position the statute creates, had not in advance been

31 2001 (2) SA 716 (C) 724H-I.

drawn to the attention of the creditors, nor, as he found, to the attention
of the Magistrate who issued the original order.  In argument counsel
for the administrator properly conceded that the terms of the draft order
the administrator handed up to the Magistrate in the original application
should have been drawn to the creditor’s attention.  That concession
puts paid to any suggestion of misdirection.

[29] As for the costs of appeal, it was not suggested that the administrator
prosecuted the appeal in the interests of or because of some necessity
related to the debtors’ estate.  The costs should therefore come from
his own pocket.

[30] In the result, the appeal is dismissed with costs, which the appellant
is to pay de bonis propriis.

E CAMERON
JUDGE OF APPEAL

NIENABER JA  )
CONCUR
HOWIE JA
)