The respondents purchased immovable property from Phehla Umsebenzi Trading 48 CC (a close corporation) in 2015 for R2.5 million. The purchase price was allegedly paid but transfer was never effected. The close corporation was placed in liquidation on 6 June 2018 while the property was still registered in its name. The three appellants were appointed as joint liquidators on 23 July 2018. The liquidators elected not to transfer the property to the respondents but instead sought to sell it on auction. The respondents brought a review application under Rule 53 and PAJA seeking to review and set aside the liquidators' decision, and to compel the liquidators to sign transfer papers. The liquidators filed a Rule 6(5)(d)(iii) notice simultaneously with their answering affidavit, raising points of law in limine: (1) that their decision was not subject to judicial review as it did not constitute administrative action, and (2) that specific performance cannot be ordered against a liquidator. The respondents then brought an interlocutory application seeking to set aside the Rule 6(5)(d)(iii) notice as irregular and to compel production of the Rule 53 record.
The appeal was dismissed with costs. The order of the Free State High Court directing the liquidators to produce the Rule 53 record was upheld.
Where review proceedings are instituted before a competent court whose jurisdiction is not contested, the obligation to produce a Rule 53 record follows automatically upon the launch of the review application, regardless of how ill-founded that application may subsequently prove to be. A court cannot determine the substantive merits of legal challenges to the reviewability of a decision before the applicant has been afforded the procedural right to access the record and supplement the founding affidavit as contemplated in Rule 53. The only exception to the automatic right to a Rule 53 record is where the jurisdiction of the reviewing court itself is challenged. Once it is established that a court has jurisdiction to entertain review proceedings, Rule 53 must be followed before substantive challenges to the competence of the review can be entertained. To require otherwise would subvert the purpose of Rule 53 and violate the constitutional right of access to courts.
The majority observed that the notion that liquidators' decisions might be entirely immune from review is "simply untenable". The Court noted that liquidators are creatures of statute who derive their powers from the Companies Act, Close Corporations Act and Insolvency Act, and act under the control of the Master. The Court expressed concern that judicial resources were not optimally utilized in this case, as after two court hearings the real dispute between the parties remained unadjudicated. The Court suggested that some record of the liquidators' joint decision must exist, given that three joint liquidators are required by s 382(1) of the Companies Act to act jointly - whether by formal meeting, correspondence or otherwise. The minority observed that Rule 6(5)(d)(iii) notices may properly be filed before Rule 53 supplementary affidavits, and that the timing rules in the Uniform Rules presuppose this sequence. The minority also noted that purely legal questions about the inherent nature of administrative action are distinct from merits-based challenges and can be determined as points in limine without entering into the merits.
This case clarifies the relationship between Rule 53 review procedure and in limine points of law raised under Rule 6(5)(d)(iii). It affirms that the automatic right to a Rule 53 record applies broadly, not only when jurisdictional challenges are raised. The case demonstrates that procedural fairness and the right to access courts under s 34 of the Constitution require that applicants in review proceedings be afforded their Rule 53 rights before substantive legal challenges are determined (with the exception of jurisdictional challenges to the court itself). The judgment provides important guidance on when courts may depart from the general rule requiring production of Rule 53 records. It also touches on the reviewability of liquidators' decisions, though this substantive question was not finally determined. The case illustrates tension between efficient case management and procedural rights in administrative law litigation.
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