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IN THE NORTHERN CAPE HIGH COURT, KIMBERLEY

REPUBLIC OF SOUTH AFRICA

CASE No.1202/2012

In the matter between

BERNARD WILLIAM HEINZE APPLICANT

And

JACOBUS ADRIAAN BURGER N.O FIRST RESPONDENT

ENGELA SUSANA BURGER N.O SECOND RESPONDENT

ABSA BANK LIMITED THIRD RESPONDENT

REGISTRAR OF DEEDS FOURTH RESPONDENT

DUNCAN & ROTHMAN ATTORNEYS FIFTH RESPONDENT

MASTER OF THE HIGH COURT SIXTH RESPONDENT

FREDERIK JACOBUS SENEKAL N.O SEVENTH RESPONDENT

KURT JOCHEN HEINZE EIGHTH RESPONDENT

ANTHONY DONALD WOOD CROZIER NINETH RESPONDENT

KLAUS HEINZE TENTH RESPONDENT

APPLICANTS HEADS OF ARGUMENT

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TABLE OF CONTENTS

INTRODUCTION………….…………………………………..……….3

A RELEVANT BACKGROUND FACTS……………………..……..5

B THE TRUST PROPERTY CONTROLL ACT…………….…….10

C LEGAL DUTIES OF ATTORNEYS AND AUDITORS…….. 13

D SUSPENSIVE CONDITIONS……………………………….……..21

E GOOD FAITH…………………………………………………….…….24

F THE CONSTITUTIONAL PROPERTY CLAUSE……….…….28

G LIST OF AUTHORITIES……………………………………….......31

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INTRODUCTION

1. The applicant, Bernard William Heinze, is not represented in this matter

by neither attorney nor counsel. The applicant has sought legal

representation but could not afford the costs. The applicant has also

attempted to get legal aid from the Legal Aid Board as well as the South

African Human Rights Commission in Cape Town.

2. Only first, second, fifth and nineth respondents are opposing the

application and have lodged affidavits. The fourth and sixth respondents

have submitted Reports to the Honourable Court.

3. The relief sought by the applicant is in esse the return of the immovable

property in dispute.

4. These heads of argument are divided into the following parts:

A. Firstly a section will be devoted to briefly considering the

background facts and circumstances, as they appear from the

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affidavits and reports filed by the various parties, insofar they

are relevant to a determination of the application before the

Honourable Court.

B. Secondly a section will be devoted to demonstrate how the

eighth respondent was acting as trustee before authorised to

do so by the Master of the High Court, as required by the Trust

Property Control Act 57 of 1988 (the TPA), section 6(1). This

section will also illustrate other contraventions of the TPA

committed by the eighth and nineth respondents.

C. Thirdly a section will be dedicated to illustrate the legal duty of

attorneys and auditors has to their profession as well as to the

public in terms of their function.

D. Fourthly a section will be dedicated to suspensive conditions.

E. Fifthly a section will be dedicated to good faith in contracting

and the public interests in bona fidei.

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A. RELEVANT BACKGROUND FACTS

5. Werner Rolf Heinze (Rolf) died, testate on 22nd July 2004. His entire

estate is to devolve unto a testamentary trust. The eighth respondent

(Jochen) was appointed as both the executor and trustee by the will dated

17th October 2003. Jochen appointed the nineth respondent (Crozier) as

his agent. In terms of Section 22(2)(a) and 23(3) of the Estate Act 66 of

1965 Jochen not being in South Africa would have to put down security

to the satisfaction of the Master unless he had a South African

domicillium, Jochen gives Crozier as his domicillium and is appointed

executor on 28 July 2004.

6. By the 22nd September 2004 the estate bank account No. 912 5200 994 is

opened with ABSA Bank. Various life policy pay-outs are made into the

estate bank account. On the 7th October 2004 the first theft of R2300

000, 00 (R2, 3M) is committed and by the 14th December 2004 the estate

bank account is closed after a total of R2 531 383.20 has been stolen.

7. A deed of sale is finalised by the 15th of December 2004 for the alienation

of the property in dispute between the estate represented by Crozier and

the So-Ane Boerdery trust.

8. At the same time a deed of sale is finalised with a Mr A H Lourens, for the

property known as Portion 13 of farm Dorsfontein No.77 which was

owned by a closed corporation known as Kimberley Piggery. The selling

price was R125 000,00 (one hundred and twenty five thousand Rand) and

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the entire sum of R122 502,92 paid to Jochen, as the “sole owner” from

fifth respondents trust account.1

9. Mr Potgieter of the fifth respondent avers he confirmed with Crozier that

Jochen is a 50% owner of the farm “Kelfa” by means of a “partnership

agreement”, a letter dated the 30th March 1984.2 In esse the letter states

that Jochen is the owner of a 50% interest of the partnership business

known as Star Pig Farming and that Kelfa forms an asset of the

partnership. The truth is that Star Pig Farming does not exist, thus

neither Jochen’s 50% ownership.

10. The deed of sale for “Kelfa” has a suspensive condition3 that the sale was

subject to the Master issuing a certificate in terms of Section 42(2) of the

Estates Act 66 of 1965. The conveyancer had to make an application to

the Master, whereby the conveyancer had to satisfy the stringent

requirements in terms of the JM33 form. The first application made by

Mr Potgieter was rejected3. On the JM334 form at No.2 the conveyancer

needs to give clarity of any differences in the deed of sale and/or power

of attorney and the liquidation and distribution account, which was

questioned by the estate examiner, Mrs Marina Louw.5

1 Page 242 which is part of the applicants replying affidavit

2 Page 201 which is at par 24 of the fifth respondents answering affidavit

3 page 196 which is at par 10 of the fifth respondents answering affidavit

4 Page 198 of fifth respondents affidavit, par 14 and page 257 annexure BH3 of applicants

replying affidavit, page 113 annexure W par 4 A6 of the applicants founding affidavit

5 Page 264 annexure BH6 of the applicants replying affidavit

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11. One of the reasons why the Master rejected the application in terms of

Section 42(2) was that the trustee first needs to be authorised in terms of

Section 6(1) of the TPA to give consent to the sale.6

12. Mr Potgieter with his first application for the 42(2) certificate had sent in

a consent dated the 22nd September which is signed by the trustee before

he had been authorised by the Master to act as trustee.7

13. The JM21 memorandum for the trustees authorisation is submitted, in

terms of paragraph 2 (c) Crozier accepts the appointment as auditor of

the trust as well as the responsibility cast upon him (Crozier) to report

any irregularities to the Master; in terms of Section 15 of the TPA.8

14. The report of the fourth respondent, the Registrar of Deeds Kimberley,

states that there is no Section 42(2) certificate amongst the documents

to transfer ownership from the deceased to the So-Ane Boerdery trust.9

15. Mr Potgieter had corrected the property description in the estate

inventory on the 6th of December 2004 and again had an opportunity to

declare Jochens’ 50% interest.10

6 Page 242 of applicants replying affidavit, page 87 annexure “O”’ and page 98 annexure “S” of

the applicants founding affidavit

7 Page 259 annexure “BH 4” of the applicants replying affidavit

8 Page 88 annexure “P” paragraph 2 (c)

9 Page 254 annexure “BH2” of applicants replying affidavit

10 Page 215 annexure “E” of the fifth respondents answering affidavit

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16.Despite there being no money in the trust estate Jochen submits a

liquidation and distribution account which reflects a balance for

distribution of R2 653 195,69.11 From the liquidation and distribution

account the difference in ownership of the farm “Kelfa” as in the deed of

sale and the power of attorney which Mr Potgieter handed to the Master

for the S42(2) certificate becomes apparent.12

17.The Master via its estate examiner, Mrs Marina Louw, had requested all

statements of the estate bank account and paid cheques to date, but

none was forthcoming.13

18.The Master in a report to the Honourable High Court stated that the

previous executor (Jochen) had embezzled the deceased assets14 and

was removed from both executor and trustee positions also that there is

no trustee because nobody wants to accept the trustees position.15

19.From email correspondence between Mr Crozier and Jochen it is evident

that Jochen in his mind was acting as “trustee” by writing to Crozier on

the 23rd of January 2005, “ABSA estate bank account in trust with me.

You should know me good enough that it will well be looked after.” This

after Crozier discovered the estate account closed and the money

gone.16

11 Page 104 annexure “T” of applicants founding affidavit

12 Page 100 annexure “T” paragraph 1 attached to applicants founding affidavit

13 Page 113 annexure “W” paragraph A5 attached to applicants founding affidavit

14 Page 119 annexure “Z” paragraph 16 attached to applicants founding affidavit

15 Page 140 paragraph 4 of Report by the sixth respondent

16 Page 65 annexure “J” attached to applicants founding affidavit

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20.The first respondent, received additional R30 000,00 for electrical

repairs17 that the first respondent had done this apparently to satisfy a

condition with the first respondents bonding institution (ABSA). In the

deed of sale was a suspensive18 condition which the first respondent had

already fulfilled with a private mortgaged at a higher interest rate than

the ABSA mortgage bond. With regard to the R30 000,00 there is a major

discrepancy and a contradiction in terms of what Mr Potgieter says in his

answering affidavit, “…an was paid to the So-Ane Boerdery Trust in

respect of electrical defects in the property ”, and his statement of

account reflects an amount of R30 000,00 paid to “ELECTRICAL

CONTRACTOR” from the fifth respondents trust account.19

21.The tenth respondent (Klaus) had submitted an affidavit to inform the

Honourable Court, inter alia that Dresdner Bank has laid criminal charges

under case No. BY8671-000841-13/3. Jochen had taken loans in excess

of 50 million Rand from Dresdner Bank by falsifying financial statements,

the falsified financial statements had the falsified signature of Mr

Crozier. Christiaan and Wolfgang Heinze are in no way involved with the

crimes of Jochen.20

22.The first and second respondents were, until reading the applicant’s

founding affidavit, unaware that half the purchase price they had paid

into the fifth respondents trust account was paid to Jochen.21 The first

and second respondent’s intention was to pay the estate of Rolf the total

which they had secured by a mortgage bond. The mortgage bond was

given in terms of a sale agreement between estate WR Heinze as seller

and the So-Ane Boerdery Trust as purchasers.

17 Page 197 paragraph 12.2 of fifth the respondents answering affidavit

18 Page 210 annexure “ICP2” paragraph 19.1 of the fifth respondents answering affidavit

19 Page 115 annexure “X” attached to the applicants founding affidavit

20 Page 284 of the tenth respondent’s affidavit

21 Page 180 paragraphs 22 and 23 of the first respondents answering affidavit

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B THE TRUST PROPERTY CONTROL ACT 57 OF 1988

23. Paragraph 3 of the will of the late WR Heinze is the operative

provision:22

“I give, devise and bequeath, in trust to my administrator, the whole

of my estate and effects, movable and immovable, whether in

reversion, remainder or expectancy, nothing excepted, subject to the

following conditions:”

24It is common cause that the deceased intended his entire estate to

devolve upon a testamentary trust. Honore23 at page 6 says, “If the trust

is created by will, once the will takes effect the executor is bound to hand

over the assets to the trustee in due course and the court has jurisdiction

to replace the trustee if necessary. The trust exist from the moment of

death, though it takes effect later”

24. “The act recognises and preserves the distinction between the

appointment of a trustee24, which occurs in terms of the trust

instrument24 and a trustee’s written authorisation25, which derives from

the Master by virtue of statutory powers. The trust instrument remains

the defining source of the trustee’s power and may have to be consulted

by persons dealing with the trustee.”26

22 An interpretation accepted by Desai J in EC01/09 Heinze v Crozier and Others

23 Cameron et al,“Honore’s South African Law of Trusts” fifth edition 2002,Juta Landsdowne

24 Section 1 of the Trust Property Control Act defines “trust instrument” as “a written agreement

or a testamentary writing or a court order according to which a trust was created”.

25 Section 6(1) of the Trust Property Control Act

26 Quoted verbatim from Honore at page 219

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25. Thus by Jochen saying to Crozier in the email that the ABSA bank account

is in trust with him he was already acting as a trustee without any written

authorisation from the Master.27 In terms of Section 10 of the Act which

states, “Whenever a person receives money in his capacity as trustee, he

shall deposit such money in a separate trust account at a banking

institution or building society.” Thus Jochen opening an estate bank

account with ABSA and claiming the insurance benefits was acts as an

executor. But as soon as he withdrew that money and closed the estate

bank account a metamorphosis took place and he was then acting as a

trustee.

26. In Simplex v Van der Merwe NO28 the Honourable court held that,

“Acts performed without the Master’s written authorisation were

null and void, could not be cured retrospectively by the trustees

themselves, after receiving authorisation, or by the Master or the

court.”

27. The consent to the sale of trust property (Kelfa) was given on the 22nd

September 2005 by Jochen, signing the consent to the sale thus acting as

the trustee before authorised by the Master to act. This act of consent

was an act of the heir giving consent to the sale in terms Section 42(2) of

the Estates Act 66 of 1965. It was not made known to the Master that

Jochen had claimed to have a 50% interest in the trust property he had

consented to selling on behalf of the trust. It was also not made known

to the Master that all hard currency (movable property) was moved to

Germany.

28. The Act at Section 9 places a duty of care, diligence and skill which is

required of a trustee.

29. “Two considerations in particular are decisive to establishing the

existence, nature and extent of a trustee’s fiduciary duty. First, the

principal focus of a trustee’s fiduciary duty is the manner in which he

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conducts the administration of trust property. Secondly, trust

administration occurs to the advantage of trust beneficiaries and they

are, consequently, beneficially interested in such administration. This

being the case, it is settled law that a trustee must, as a bonus et diligens

paterfamilias, conduct trust administration with the utmost good faith

and in the best interests of the trust beneficiaries.”29

30. A further duty is a trustee’s duty to act with the requisite impartiality,

which not only implies the avoidance of a conflict of interest between a

trustee’s personal interests and those of the beneficiaries, but also

prohibits a trustee from making any undue profit from his trusteeship

essentially the duty of loyalty as referred to in Jowell v Bramwell-Jones.30

31. In Doyle v Board of Executors31, it was said that a trustee’s accountability

is, of course, facilitated through the trustee’s compliance with his duty

to separate trust property from his personal property.

32. Thus by Jochen claiming to be a 50% owner of the immovable property

he was in contravention of Section 12 of the Act which states, “Trust

property shall not form part of the personal estate of the trustee except

in so far as he as the trust beneficiary is entitled to the trust property.”

33. Crozier had accepted to be the auditor of the trust as early as 200427.

The nineth respondent had contravened Section 15 of the Act, “If an

irregularity in connection with the administration of a trust comes to the

notice of a person who audits the accounts of a trust, such person shall,

if in his opinion it is a material irregularity, report it in writing to the

trustee, and if such irregularity is not rectified to the satisfaction of such

person within one month as from the date upon which it was reported to

the trustee, that person shall report it in writing to the Master.”

27 Page 65 of applicants founding affidavit

28 1996 (1) SA 111 (W)

29 François du Toit “THE FIDUCIARY OFFICE OF TRUSTEE AND THE PROTECTION OF CONTINGENT

TRUST BENEFICIARIES”, STELL L R 2007 3

30 2000 (3) SA 274 (SCA)

31 1999(2) SA 805 (C)

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C LEGAL DUTY OF ATTORNEYS AND AUDITORS

34. Mr Potgieter an attorney and conveyancer with the fifth respondent had

drafted the deed of sale for the alienation of the estate property in

dispute. After the deed of sale, Mr Potgieter had to acquire the Master’s

certificate in terms of Section 42(2) to transfer the property to the

purchasers, the So-Ane Boerdery Trust. Section 42(2) of the Estates Act

66 of 1965, states,“An executor who desires to effect transfer of any

immovable property in pursuance of a sale shall lodge with the

registration officer, in addition to any such other deed or document, a

certificate by the Master that no objection to such transfer exists. The

objection referred to here is one that the sale and transfer is free of

objection by the Master himself, as held by the court in Gray v The Master

and Others.” 32

35. The legislature did not intend that a valid transfer can take place without

the certificate from the Master. The fourth respondent, the Registrar of

deeds, as contemplated in Section 42(2) has confirmed that no such

certificate is amongst any of the documents for the transfer of the

property.

36. The fifth respondent says and is substantiated by the Master that such

certificate was issued. The applicant was informed by the fourth

respondent that the fifth respondent says he has the 42(2) certificate.

37. The Masters requirements for the 42(2) certificate is in terms of their

JM33 form. In this case the conveyancer made the application and was

assisted by the nineth respondent.

38. The fifth respondent omitted to inform the Master that half the proceeds

of the sale they are seeking approval for will not be paid into the trust

estate but instead to Jochen Heinze.

39. The Master via the estate examiner, Mrs Marina Louw, objected to the

estate only being paid half proceeds from the sale. The fifth respondent

had a legal obligation to disclose to the Master the information he had.

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40. In RAF v Shabangu Cloete JA said

“An attorney is not entitled nor obliged to advance his client’s

interests at all costs. But, generally speaking, it is no part of an

attorney’s function to protect the interests of the opposite party

by doing, or refraining from doing, something that might injure

that party. Something more is required.”33

41. Also in RAF v Shabangu34, Cloete JA said,

“It is impossible to lay down an all-embracing test as to when an

attorney will be held to owe a legal duty towards a person other

than the client particularly where, as here, that person relies on a

negligent misrepresentation inducing a contract (here the

contract of settlement) , or on negligent omissions on the part of

the attorney to safeguard that person’s interests when the

attorney is performing the duty the attorney owes to the client.

The question of wrongfulness that pertinently arises in each of

such cases is essentially one of legal policy: Bayer South Africa

(Pty) Ltd v Frost 1991 (4) SA 559 (A) at 570D─F and J

(misstatement); Minister van Polisie v Ewels 1975 (3) SA 590 (A)

597A─B and Minister of Safety and Security v Van Duivenboden

2002 (6) SA 431 (SCA) [17] (omission).”

42. Mr Potgieter has made it clear that he was acting in his capacity as a

conveyancer and clearly both the beneficiaries and the Master was

relying on the skills of the conveyancer to save them from harm. In RAF

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v Shabangu, Cloete JA referred to Kruger v Coetzee35. For the purposes

of liability culpa arises if-

(a) a diligens paterfamilias in the position of the defendant-

(i) would foresee the reasonable possibility of his conduct injuring

another in his person or property and causing him patrimonial

loss; and

(ii) would take reasonable steps to guard against such occurrence;

and

(b) the defendant failed to take such steps.

43. In Minister Van Polisie v Ewels the learned Judge said36;“Dit skyn of

die stadium van ontwikkeling bereik is waarin n late as onregmatige

gedrag beskou word ook wanneer die omstandighede van die geval

van so n aard is dat die late nie alleen morele verontwaardiging

ontlok nie maar ook dat die regsoortuiging van die gemeenskap

verlang dat die late as onregmatig beskou moet te word en dat die

gelede skade verged behoort te word deur die person wat nagelaat

het om daarwerklik op te tree. Om te bepaal of daar

onregmatigheid is, gaan dit, in n gegewe geval van late, dus nie oor

die gebruiklike “nalatigheid” van die bonus paterfamilias nie, maar

oor die vraag of na aanleiding van die feite, daar n regsplig was om

redelik op te tree.”

32 1984 (2) SA 271 (T)

33 Road Accident Fund v Shabangu and Another 2005 (1) SA 265 at [11]

34 Road Accident Fund v Shabangu and Another 2005 (1) SA 265 at [12]

35 1966 (2) SA 428 (A) at page 430 paragraphs E-G

36 1975 (3) SA 590 (A) at 597 A-B

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44. In Minister of Safety and Security v Van Duiveboden 2002 (6) SA 431 SCA,

Nugent JA says at par [17],

“In applying the test that was formulated in Minister van Polisie v

Ewels the‘convictions of the community’ must necessarily now be

informed by the norms andvalues of our society as they have been

embodied in the 1996 Constitution. TheConstitution is the

supreme law, and no norms or values that are inconsistent with it

can have legal validity - which has the effect of making the

Constitution a system of objective, normative values for legal

purposes. In Carmichele v Minister of Safety and Security and

Another (Centre for Applied Legal Studies Intervening) 19 our

Constitution was likened to the German Constitution, of which the

German Federal Constitutional Court said the following:

‘The jurisprudence of the Federal Constitutional Court is

consistently to the effect that the basic right norms contain not

only defensive subjective rights for the individual but embody at

the same time an objective value system which, as a fundamental

constitutional value for all areas of the law, acts as a guiding

principle and stimulus for the Legislature, Executive and

Judiciary’.”

45. Also in Minister of Safety and Security v Van Duivenboden, Nugent JA

says,

“The classic test for negligence as set out in Kruger v Coetzee 47

has since been quoted with approval in countless decisions of this

Court: whether a person is required to act at all so as to avoid

reasonably foreseeable harm, and if so what that person is required

to do, will depend upon what can reasonably be expected in the

circumstances of the particular case. That enquiry offers

considerable scope for ensuring that undue demands are not

placed upon public authorities and functionaries for the extent of

their resources and the manner in which they have ordered their

priorities will necessarily be taken into account in determining

whether they acted reasonably. In the present case it was

reasonably foreseeable that harm might ensue if Brooks’s fitness

to be in possession of firearms was not enquired into in terms of s

11 and in my view a reasonable police officer would have taken the

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initiative to cause such an enquiry to be held. The police officers

who had knowledge of what had occurred on 27 September 1994

were thus clearly called upon to do so and in the absence of an

explanation their failure to do so was negligent.”

46. In terms of statutory law the JM33 at No. 2 it imposes a legal obligation

on the conveyancer, “ Aktevervaardiger se sertifikaat wat alle verskille en

onduidelikhede in beskrywing van eiendomme in Likwidasierekening,

koopakte en/of Prokurasie verduidelik.

47. A further legal obligation is placed on Mr Potgieter when he amends the

inventory, the J243, the Estates Act 66 of 1965 at section 102 Penalties-

(1) Any person who- (b) wilfully makes any false inventory under this act;

Also ss (g) contravenes or fails to comply with the provisions of section

9(3) (a) and (b) and shall be guilty of an offence and liable on conviction-

in the case of an offence referred to in paragraph (b) to a fine or to

imprisonment for a period not exceeding five years.

48. In terms of section 78 of the Attorneys Act 53 of 1979, a legal practitioner

must keep a separate trust bank account at a banking institution in the

Republic, and in this account must deposit the money held or received

by him or her (the attorney) on behalf of any person. The money was

paid in on behalf of the purchaser by the person/institution he became

indebted to. The obvious purpose as far as the first respondent was

concerned was to pay the purchase price to the seller who in terms of

the agreement he had signed was the estate of late WR Heinze. It was

unethical of Mr Potgieter to take secret instructions from Jochen.

49. Essop v Abdullah 1988 1 SA 424 (A), see also HEG Consulting Enterprises

(Pty) Ltd and others v Siegwart and Others 2000 (1) SA 507 (C)

Rights and duties- Ethical conduct of profession- Attorney

subject to code of ethics concerning conduct of profession, in

terms of such code, interests of client subject to attorneys duties

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to Court. As officer of Court attorney obliged to maintain

highest standards of honesty and integrity.

50. In Case No. 579/2009 Coetzee v Steenkamp in the Northern Cape High

Court, Kgomo JP said the following;

“I therefore conclude that the plaintiff cannot invoke his professed

ignorance of the law to excuse his illegal hunting.” And at par [13]

“the plaintiff (Mr Coetzee) conspired with the entire group of

hunters to hunt a particular species of wild animal. They did not

have a permit or licence to hunt. The plaintiff indeed hunted and

shot one spring-hare. The hunting could not take place without

the vehicle that capsized. The vehicle had to be driven to ferry

the hunters, their rifles and the hunting shooting-lamp which was

monitored to a heavy battery. The search light was manually

swivelled by plaintiff and those at the back of the van to focus the

light on fleeing or stationary quarry. It is these various

components or elements that made the hunt possible. Jettison

one set, least of all the vehicle, and you end up with a farce.”

51. I wish to emphasise Honourable Kgomo JP at par [9] in same case;

“…this raw display of ignorance is devoid of all credence,

particular regard being had to plaintiff’s curriculum vitae

narrated by himself. When it comes to life’s experiences one can

justifiably ask: Where does this man come from? Does he not

listen to the radio or watch TV (50/50 programme) or read

newspapers or other reading material related to his occupation or

what is his farming background or agricultural training and

experience worth? This is the sought of knowledge that less

sophisticated people also glean from the mouths of the populace

they interact with on a daily basis. I would have pondered a bit if

plaintiff endeavoured to persuade me that he was a hunter-

gatherer member of the Khoisan group who have not come into

contact with what we (who think we know better) would like to

call “civilization”.

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52. The eighth respondent “removing” the money, closing the estate bank

account. The nineth respondent amplifying the theft as a “loan” and

getting the third respondent to re-open the deceased’ current account

and to rename it, the “Estate Account, late WR Heinze”. The fifth

respondent acting as attorney, notary and conveyancer who had prior

knowledge of the executor and trustees “interest”, transferring two

farms in what he in affidavit says the one held only in the deceased’

name was partnership property. In affidavit the fifth respondent says

he confirmed this “instruction” from Jochen with Crozier and tested the

veracity with a “partnership agreement” signed before a notary. Giving

the entire proceeds of the sale of the farm sold to Mr AH Lourens to

Jochen, after he had satisfied his mind that a “partnership agreement”

was in place. The real test was that which the Estate Examiner, Mrs

Marina Louw, had done after receiving the liquidation and distribution

account, was requesting the past 3 years financial statements of the

entity known as Star Pig Farming. This as Honourable Kgomo JP said,

“Jettison one set and you end up with a farce.”

53. FINANCIAL INTELLIGENCE CENTRE ACT 38 OF 2001 which was assented

to 28th November 2001, date of commencement the 1st FEBRUARY 2002.

The purpose of the Act is:

To establish a Financial Intelligence Centre and a Money

Laundering Advisory Council in order to combat money laundering

activities and the financing of terrorist and related activities; to

impose certain duties on institutions and other persons who might

be used for money laundering purposes and the financing of

terrorist and related activities; to amend the Prevention of

Organised Crime Act, 1998, and the Promotion of Access to

Information Act, 2000; and to provide for matters connected

therewith.

Schedule 1

LIST OF ACCOUNTABLE INSTITUTIONS

Section 1 states an attorney as defined in the Attorneys Act, 1979

(Act 53 of 1979).

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Section 12 states A person who carries on the business of

rendering investment advice or investment broking services,

including a public accountant as defined in the Public Accountants

and Auditors Act, 1991 (Act 80 of 1991), who carries on such a

business. I mentioned only sections relevant to respondents who

is opposing the application before the Honourable Court.

54. The Constitution of the Republic of South Africa Act 108 of 1996

CHAPTER 1

FOUNDINPG PROVISIONS

1. Republic of South Africa.-The Republic of South Africa is one,

sovereign, democratic state founded on the following values:-

(a) Human dignity, the achievement of equality and the advancement

of human rights and freedoms

2. Supremacy of Constitution.-This Constitution is the supreme law of

the Republic; law or conduct inconsistent with it is invalid, and the

obligations imposed by it must be fulfilled

CHAPTER 2

The Bill of Rights (certain relevant sections only)

32. Access to information.-(1) everyone has the right of access to-

(a) any information held by the state; and

(b) any information that is held by another person and that is required

for the exercise or protection of any rights.

The right to access of information needs to apply in the context that the

applicant had lodged an urgent application with this Honourable Court to

prevent transfer based on the facts which were placed before the Master,

same facts for public record

Section 239. Definitions.-In the Constitution, unless the context

indicates otherwise-

“organ of state” means-

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(a) any department of state or administration in the national, provincial

or local sphere of government; or

(b) any other functionary or institution-

(i) exercising a power or performing a function in terms of the

Constitution or a provincial constitution; or

(ii) exercising a public power or performing a public function in terms of

any legislation,

but does not include a court or a judicial officer

In terms of ss (b)(ii) both the fifth respondent and the nineth respondent

in terms of legislation contained in the Attorneys Act 53 of 1979 and the

Accountants and Auditors Act 80 of 1991, respectively.

D. SUSPENSIVE CONDITIONS AND FULFILLMENT

55. A suspensive condition suspends or postpones the full operation of the

obligation which it qualifies until certainty is reached, in that condition is

fulfilled or in that it fails. Under certain circumstances a suspensive

condition, although in fact unfulfilled, will be deemed to have been

fulfilled. This is called the doctrine of fictional fulfilment of the condition.

22

56. Since fictions are instruments of legal policy, it may be assumed that the

doctrine of fictional fulfilment is based on considerations relating to what

is fair and equitable. The doctrine can be explained in a more straight

forward fashion: it can be, which receives its construed as a legal rule,

which receives its content and sets its requirements to good faith as a

value that protects the reasonable expectations of contractants.

Whatever the explanation may be, it seems to be that resort to the

doctrine will not be allowed if the effect would be to countenance an

unlawful agreement.37

57. Logically, it is therefore possible to speak of a doctrine of fictional

fulfilment or non-fulfilment of a condition.38

58. The contract signed by the Estate and the first respondent had 2

suspensive conditions. The first was that the first respondent

(purchaser) should get a mortgage bond within 21 days. The purchaser

had secured a private mortgage bond at a high interest rate. The original

bond was replaced with one from ABSA at a lower interest rate. The

saving that the purchaser received in replacing his mortgage was at the

cost of the seller. The purchaser had already fulfilled the condition.

Stegman J said,39

“The proposition that by our law all contracts are bonae fidae is not

confined to matters that arise after consensus. A party who adopts

an ambivalent posture with a view to manipulating the situation to

his own advantage when he can see more clearly where his best

advantage lies has a state of mind that falls short of the

requirement of bona fides”.

37 Van der Merwe et al “Contract General Principles” fourth edition Juta page252 38 Van der Merwe at page 253

39 Savage and Lovemore Mining (Pty) Ltd v International Shipping Co (Pty) Ltd 1987

2 SA 149(W) at page 198 A-B

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59. In Premier,Free State, and Others v Firechem Free State (Pty) Ltd40;

regarding a contract deemed to have a suspensive condition where one

party relies upon fictional fulfilment of condition amounting to unlawful

conduct, Schutz JA at [38];

“The unlawfulness which would be involved in the fulfilment of the

provision on Firechem’s terms is not the only ground for concluding

that fictional fulfilment cannot operate. As a matter of

interpretation of the acceptance letter, seen against its

background, it could not have been the intention of the parties that

the tender contract should bind the province without its receiving

the collateral benefits which had all along been an important, even

decisive, factor in the award of the tender. The accepted tender

was never intended to stand on its own as a contract.”

60. The fifth respondent had fraudulently brought about the fulfilment of

the suspensive condition. Our common law makes provision by giving

contractants a remedy against persons who are frustrating the

fulfilment of a suspensive condition by means of the doctrine of fictional

fulfilment. Similarly the common law remedy to assist contractants

where a suspensive condition has already been illegally been fulfilled,

the doctrine of non-fulfilment is applied.

40 2000 (4) SA 413 (SCA) at page 432

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F. GOOD FAITH

61. In Kriel v Terblanche NO and Others41 in this Honourable Court before

the Honourable Buys J, where the applicant sought an order setting aside

inter alia the deed of sale which the trustee had signed before he was

authorised by the Master to act, as well as the transfer by the registrar

of deeds. The Court struck down the deed of sale as the legislature says

it is expressly null and void. The Court accepted that we have an abstract

system of immovable property transfer, meaning that even if the

underlying agreement is void the transfer shall remain it will however all

depend on the real agreement. The iusta causa as Voet says at 41.1.35.

62.The applicant agrees with decision in Kriel v Terblanche NO and others

and will rely on it; JAC Thomas42 says of Metus and Dolus;

“ The delictual and other consequences of duress and fraud may be

considered hereafter, the present concern is their effect upon

contracts to the conclusion of which they were an inducement.

Dolus Malus was trickery designed to induce a course of conduct, for

present purposes, the conclusion of a contract. As defined by Labeo,

whos view was adopted by Ulpian, it consisted in; any guile, chicanery

or trick used to circumvent, defraud or dupe another person.

Both Metus and Dolus Malus had a similar pattern in their effects

upon contracts.

The only qualification on this general proposition would be that fraud

might have been so gross as to preclude agreement by inducing error,

e.g. through impersonation of the person with whom the victim of the

fraud really intended to contract.”

41 case No. 191/2001

42 JAC Thomas “Text Book ON Roman Law” First Edition Fifth Printing 1986 North Holland

Publishing Company page 227

25

“But the consensual and later real contracts were enforced by bonae

fidai actions and the expression ex fide bona in the intention of the

relevant contractual action would enable the aggrieved party to seek

redress for or, as defendant, to the fraud or duress to which he had

been subjected.” JAC Thomas verbatim

63. Peter Spiller writes;43

“D 4.3.1.2 Ulpianus: Labeo’s own definition of dolus malus is that it is any

craft, deceit, or contrivance, employed with a view to circumvent,

deceive, or ensnare other persons”

“Could the defrauded person avoid the contract on the basis of the fraud?

“One must distinguish between the two types of contracts in Roman Law:

(i) Stricti iuris contracts:

(ii) Bonae fidei contracts: these were bilateral contracts (sale or lease)

here the presiding judge had jurisdiction to investigate all matters

concerning good.

64. Some other Roman Dutch authorities wrote;

Grotius on Causa at 3.1.43 says: “Contracts which spring from a

dishounarable cause or purpose,[een oneerlijke oorzaeck ofte

inzicht] are void.

Pothier saus “[w]here an engagement has no cause, or, which is

the same thing, where the cause for which it is contracted is false,

the engagement is null, and so is the contract which includes it.”

65. The portrayal of public policy as a question of fact rather than of law

suggests that the focus of the operation of fundamental rights in this

way is in reality not contract law itself, but the acts or conduct of the

parties as manifested in a contract of a particular import.44

43 Pete Spiller “ A Manuel of Roman Dutch law” Butterworths Durban 1986

44 SALJ 2004 Vol121 Lubbe, “Taking fundamental rights seriously: the Bill of Rights and its

implications for the development of contract law” at page 404 where he quotes note 50 from

Rylan v Edros supra see also Applicants Heads par 66 below quoted verbatim from Lubbe p421.

26

66. “At the bedrock of understanding of dignity lies the Kantian tenet that

human beings are autonomous subjects that ‘cannot be used merely as

a means to an end by any human being… but must always be used at the

same time as an end’. From the premise of the inherent worth of

individuals and the resultant injunction as being treated as objects,

spring both notions of dignity referred to above. Irrespective of whether

the law is to take cognisance of all the implications of the notion of

dignity as constraint, it seems that our concept of dignity should be

informed by the precept that an individual ought not to.”

67. Olivier JA in EErste Nasionale Bank Van Suid Africa v Saayman NO says;45

“Die bona fides, wat gebaseer is op die redelikheidsopvattinge

van die gemeenskap, speel dus n wye en onmiskenbare rol in

die kontraktereg. Zimmermann in sy bydrae ‘Good Faith and

Equity’ in Zimmermann en Visser(reds) Southern Cross – Civil

Law and Common Law in South Africa (1996) op 217-60 toon

oortuigend aan dat gemelde beginselkompleks onderliggend is

aan bekende regsinstellings soos estoppel, rektifikasie,

onskuldige wanvoorstelling, die kennisleer, onbehoorlike

beinvloeding en dat dit n belangrike rol speel by die uitleg van

kontrakte, die inlees van stilswyende en geimpliseerde bedinge,

die oopenbaringsplig by kontraksluiting, fiktiewe vervulling van

n voorwaarde en erkenning van repudiering as n vorm van

kontrakbreuk. Dit blyk ook dat daar n innige verband bestaan

tussen die begrippe bona fides, openbare belang, openbare

beleid en justa causa. Dit blyk uit die analise van Smalburger

AR in Sasfin (Pty) ltd v Beukes (supra op 7I- 8G); uit die woorde

van Hoexter AR in Botha (now Griessel) and Another v

Finanscredit (Pty) Ltd (supra op 783 A-B) dat openbare belang

gerig is op die noodsaklikheid dat simple justice between man

and man gedoen moet word, en uit wat gese is in Magna Alloys

and Research (SA) (Pty) Ltd v Ellis (supra).

45 EErste Nasionale Bank Van Suid Africa v Saayman NO 1997(4) SA 302

27

68. In Sasfin (Pty)Ltd v Beukes Smalburger JA says;46

“ No Court should therefore shrink from the duty of declaring a

contract contrary to public policy when the occasion so

demands. The power to declare contracts contrary to public

policy should, however, be exercised sparingly and only in the

clearest of cases, lest uncertainty as to the validity of contracts

result from an arbitrary and indiscriminate use of the power.”

69. In Emfuleni Local Municipality v Builders Advancement Services CC47,

Willis J on the Judgment of in Philani-Ma-Afrika & Others v W M Mailula

& Others (674/08) [2009] ZASCA 115 says;

“The appeal was heard by the Supreme Court of Appeal (“the

SCA”). The SCA found that a Mr Mkhumbuzi, who signed the

deed of sale in respect of which Mr Mailula was the buyer, was

not authorised “to sell the building or to sign the conveyancing

documents for the property to be transferred to Mr Mailula”.7

Accordingly, the orderswhich I had made had to be set aside and

replaced with orders which set aside the sale and the transfer of

the property.8 The SCA did not refer to any of the statutory or

common law authorities or any of the academic literature with

which I had engaged when delivering my judgment. Although it

did not say so explicitly, the SCA seems to have applied the

principle that “fraud unravels all”. This principle is one of English

law, although it has been adopted in Phillips and Another v

Standard Bank of South Africa Ltd and Others 1985 (3) SA 301

(W) at 303D-I.”

46 Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A) 47 CASE No. 2009/51258 SAFLII, JDR (Juta) and JOL (LexisNexis).

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G. THE CONSTITUTIONAL PROPERT CLAUSE

70. THE CONSTITUTION OF THE REPUBLIC OF SOUTH AFRICA Act 108 of

1996 Section 25. Property.- (1) No one may be deprived of property

except in terms of law of general application, and no law may permit

arbitrary deprivation of property.

(2) Property may be expropriated only in terms of law of general application-

(a) for a public purpose or in the public interest; and subject to

compensation, the amount of which and the time and manner of payment

of which have either been agreed to by those affected or decided or

approved by a court.

(3) The amount of the compensation and the time and manner of payment

must be just and equitable, reflecting an equitable balance between the

public interest and the interests of those affected, having regard to all

relevant circumstances, including-

(a) the current use of the property;

(b) the history of the acquisition and use of the property;

(e) the market value of the property;

(d) the extent of direct state investment and subsidy in the acquisition and

beneficial capital improvement of the property;

(e) the purpose of the expropriation.

(4) For the purposes of this section-

(a) the public interest includes the nation’s commitment to land reform, and

to reforms to bring about equitable access to all South Africa’s natural

resources; and

(b) property is not limited to land.

(5) The state must take reasonable legislative and other measures, within its

available resources, to foster conditions which enables citizens to gain

access to land on an equitable basis.

(6) A person or community whose tenure of land is Iegally insecure as a

result of past racially discriminatory laws or practices is entitled, to the

29

extent provided by an Act of Parliament, either to tenure which is legally

secure or to comparable redress.

(7) A person or community dispossessed of property after 19 June 1913 as a

result of past racially discriminatory laws or practices is entitled, to the

extent provided by an Act of Parliament, either to restitution of that

property or to equitable redress.

(8) No provision of this section may impede the state from taking legislative

and other measures to achieve land, water and related reform, in order to

redress the results of past racial discrimination, provided that any departure

from the provisions of this section is in accordance with the provisions of

section 36 (1).

(9) Parliament must enact the legislation referred to in subsection (6).

71. Section 25(1) requires that a deprivation of property should be imposed

in terms of law of general application, which law should not permit

arbitrary deprivation of property….However, this requirement is more

complex than it appears at first’ because it raises difficult questions like

substantive due process and the meaning of ‘arbitrary’.48

72. The property clause has often been said that it is not a right to property

like for example a right to housing, but merely a right to protection of

property, this however can be debated in terms of the limitations clause

at section 36. Be that as it may section 21(1) clearly has a horizontal

application compared to s 21(2).

73. Section 25(4) (a) the public interest includes the nation’s commitment to

land reform, and to reforms to bring about equitable access to all South

Africa’s natural resources. Does/could this mean that where a sale takes

place it should become a public event, that the public needs to be

informed as to the sellers intention to sell, obviously putting it to the

public would ensure a higher offer, that the germination of the decision

to sell should be just as public as the end resulting in publication at the

deeds office.

30

74. Section 25(4) (b) property is not limited to land.

In Evelyn-Wright v Pierpoint and Another NNO “an action in which the

validity or legal effect of a will is to be determined is really an action relating

to the right to or in property. Similarly, an application for rectification of a

will which will have an effect on the devolution of assets is, in my view, an

action relating to the right to or in property”49

48 AJ Van Der Walt, “The Constitutional Property Clause”Juta Kenwin 1997 49 1987 (2) 111, quoted by the court from Pollack The SA Law of Jurisdiction (1937) at 138

31

G LIST OF AUTHORITY

Sasfin (Pty) Ltd v Beukes 1989 (1) SA 1 (A)

Evelyn-Wright v Pierpoint and Another NNO 1987 (2) 111

Philani-Ma-Afrika & Others v Mailula & Others (674/08) [2009] ZASCA 115

EErste Nasionale Bank Van Suid Africa v Saayman NO 1997(4) SA 302

Kriel v Terblanche NO and others Case 191/2001 (NC)

Premier,Free State and Others v Firechem Free State (Pty) Ltd 2000 (4) SA

413 (SCA)

Savage and Lovemore Mining (Pty) Ltd v International Shipping Co (Pty) Ltd

1987

Coetzee v Steenkamp Case No. 579/2009 (NC)

Essop v Abdullah 1988 1 SA 424 (A)

Road Accident Fund v Shabangu and Another 2005 (1) SA 265

Minister van Polisie v Ewels 1975 (3) SA 590 (A)

Minister of Safety and Security v Van Duivenboden 2002 (6) SA 431 (SCA)

Simplex v Van der Merwe NO 1996 (1) SA 111

EErste Nasionale Bank Van Suid Africa v Saayman NO 1997(4) SA 302

HEG Consulting Enterprises (Pty) Ltd and others v Siegwart and Others 2000

(1) SA 507 (C)

Kruger v Coetzee 1966 (2) SA 428 (A)

Gray v The Master and Others 1984 (2) SA 271 (T)