Hendrik Petrus Hough v Mzubanzi Sisilana and others

The applicant's estate was sequestrated by Seardel Investment Corporation Ltd (second respondent) on the basis of several taxed and allocated bills of costs in its favour against the applicant. The applicant challenged the admission of claims (including ENS's taxed bill of costs) against his estate by the Assistant Master (first respondent) pursuant to a meeting of creditors under s 40(1) of the Insolvency Act 24 of 1936. He brought review proceedings under s 151 of the Insolvency Act, arguing that Seardel lacked locus standi to sequestrate his estate because the taxed costs were incurred by Edward Nathan Sonnenbergs Inc (ENS), a personal liability company which lacked its own Fidelity Fund certificate as required under s 41(1) and (2) of the Attorneys Act 53 of 1979. The high court (Engers AJ) dismissed the review application with costs. Applications for leave to appeal in both the high court and the Supreme Court of Appeal failed. The applicant then brought an application under s 17(2)(f) of the Superior Courts Act 10 of 2013 for reconsideration and variation of the SCA's order dismissing his application for leave to appeal.

• Whether exceptional circumstances existed warranting reconsideration and variation of the Supreme Court of Appeal's decision refusing leave to appeal under s 17(2)(f) of the Superior Courts Act 10 of 2013
• Whether a personal liability company conducting a legal practice (ENS) is required to hold its own Fidelity Fund certificate under ss 1, 23 and 41 of the Attorneys Act 53 of 1979
• Whether the President of the Supreme Court of Appeal can grant leave to appeal (as opposed to merely reconsidering the dismissal of an application for leave to appeal) under s 17(2)(f)
• The test applicable to review of a Master's decision to admit claims to proof in insolvency proceedings

1. Condonation for late filing was granted, with the applicant to pay costs of that application. 2. The application under s 17(2)(f) of the Superior Courts Act 10 of 2013 was dismissed with costs on the basis that no exceptional circumstances warranting reconsideration or variation of the decision refusing leave to appeal had been established.

1. Section 17(2)(f) of the Superior Courts Act 10 of 2013 permits only the reconsideration and, if necessary, variation of a decision refusing leave to appeal; it does not empower the President to grant leave to appeal directly. 2. Under the Attorneys Act 53 of 1979, the requirement to hold a Fidelity Fund certificate extends to individual practitioners who practice for their own account, in partnership, or in personal liability companies, but does not require the personal liability company itself to hold such a certificate, provided all its directors (who must be practitioners under s 23) hold current certificates. 3. The public protection objective underlying the Fidelity Fund certificate requirement is adequately achieved when all directors of a personal liability company hold certificates, as the company acts through their agency. 4. In reviewing a Master's decision to admit claims to proof in insolvency proceedings, the Master is only required to satisfy herself that there is prima facie evidence of a valid claim, not to adjudicate the claim as a court would.

The court noted that the high court's comments that the applicant's argument was 'at best arguable' or 'may be a tenable' interpretation were merely 'throwaway comments' that did not assist the applicant, as the high court itself made clear it was not convinced the argument was correct and found it unnecessary to decide the issue given the nature of the applicant's onus. The court also observed that even if the applicant succeeded on appeal, it would not be dispositive of the entire sequestration proceedings as only some (not all) claims against his estate would be set aside and he would remain in sequestration. The court noted as a matter of practice that law societies require only directors of personal liability companies, not the companies themselves, to hold Fidelity Fund certificates.

This case clarifies the limited scope of s 17(2)(f) of the Superior Courts Act 10 of 2013, confirming that the President of the Supreme Court of Appeal may only direct reconsideration of a refusal of leave to appeal, not grant such leave directly. The judgment also provides authoritative interpretation of the Fidelity Fund certificate requirements under the Attorneys Act 53 of 1979 as they apply to personal liability companies conducting legal practices, establishing that individual practitioners (directors) must hold certificates but not the company itself. The case demonstrates the high threshold for establishing 'exceptional circumstances' under s 17(2)(f) and the limited grounds for reviewing a Master's decision in insolvency proceedings.