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Companies in liquidation– response III

24 March 2011

This is my response to Companies in liquidation - response II ("the article"), paragraph by paragraph.

  1. The characterisation of supervision as sporadic cannot (i) detract or subtract from such supervision being what it is in reality, namely supervision, and/or (ii) disqualify it from being the supervision contemplated in section 56 (1) (b) of the Deeds Registries Act, 1937 (Act No. 47 of 1937), as amended, ("the DRA"). It is highly inconceivable that, being aware, as it ought to have been, of the fact that the supervision performed by the Master under the Companies Act, 1973 (Act No. 61 of 1973), as amended, ("the CA") is original, in the sense that it is not performed on behalf of the High Court, the Legislature intended the words, "being wound up under the supervision of the Court", in section 56 (1) (b) of the DRA, to mean being wound up under the supervision of the Master of the High Court, let alone on behalf of the High Court. Section 56 (1) (b) of DRA applies only to a winding up under the circumstances specifically mentioned therein. There in no obligation on the Court to perform duties which have been imposed on the Master.

  2. The reason why the Master is the Master of the High Court is purely jurisdictional and contained in the definition of "Master" in section 1 of the Administration of Estates Act, 1965 (Act No. 66 of 1965), as amended ("the AEA"), in terms of which "Master", in relation to any matter, property or estate, means the Master, Deputy Master or Assistant Master of a High Court appointed under section 2, who has jurisdiction in respect of that matter, property or estate and who is subject to the control, direction and supervision of the Chief Master". Section 2 (1) (a) (ii) of the AEA provides that: "… the Minister shall, in respect of the area of jurisdiction of each High Court, appoint a Master of the High Court; ..." It should be clear, therefore, that the words "of the High Court" do not mean that, fundamentally, in the exercise of his/her powers and the discharge of his/her duties, a Master acts for and on behalf the High Court. Mr Lee's quotation from the decision in Gilbert v Bekker and Another 1984 (3) SA 774 (W) ("the Gilbert case") does not support his contention to the effect that the Master exercises and discharges delegated powers and duties, respectively, which powers and duties are entrusted in the Courts. Special attention is drawn to page 781 of the Gilbert case, where Coetzee J says: "Our early insolvency legislation had much in common with English bankruptcy law. The Court was much more closely involved with insolvency administration than now. Subsequent legislation transferred some important administrative functions to the Master …" (emphasis added).

  3. The decision in The Master v Zick 1958 (2) SA 539 (T) at p544 is not authority for the view that the Master's supervision if done is on behalf of the High Court.

  4. The Gilbert case, referred to in paragraph 2 above, is helpful in understanding why the Legislature entrusted most of the supervision to the Master and, to a considerably less degree, to the High Court. Mr Lee's argument that the Master supervises on behalf of the High Court is in conflict with, and is destroyed by, the last sentence in the 4th paragraph of the article, namely that: "This obviously does not detract from the Court's power to review the Master's actions, but we are talking about a normal administration process." The High Court's review of the exercise of a power performed on its behalf would be tantamount to the Court's review of its own actions!

  5. My reference to the decision in The Master v Talmud 1960 (1) SA 236 (C) at page 238, where a distinction was made between jurisdiction and power, is relevant to the issue of jurisdiction and power.

  6. The issues have been adequately dealt with above.

  7. I can only properly comment on the question responded to by Registrars' Conference Resolution 9 of 1980 if I have the benefit of a copy of the unreported case referred to therein, which I do not have.
Thabo Nqhome
23 March 2011


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