Mantis Investment Holdings Pty (Ltd) (the “Appellant”) was the sole shareholder of Bushman Sands Development (Pty) Ltd (“Bushman Sands”). Bushman Sands borrowed the sum of R19 357 645.00 (Nineteen Million, Three Hundred and Fifty-Seven Thousand, Six Hundred and Forty-Five Rand) from the Eastern Cape Development Corporation (the “First Respondent”).
Before the First Respondent could recover the aforesaid debt, the Appellant successfully applied for the liquidation of Bushman Sands for the recovery of R2 491 455.00 (Two Million, Four Hundred and Ninety-One Thousand, Four Hundred and Fifty-Five Rand).
Following a meeting of creditors on 19 July 2016, the Appellant’s attorney had written to the liquidators of Bushman Sands, setting out a list of persons and documents they desired to be subpoenaed. That request was forwarded by the liquidators to the Master of the High Court, Port Elizabeth (the “Master”) who, and in compliance with the request, summoned a number of employees of the First Respondent (past and present) to appear before him. Notably, the written request to the Master contained no reference to any statutory provision justifying the basis upon which the subpoenas were sought.
Aggrieved by the turn of events, the First Respondent launched an application in the High Court seeking to review and set aside the subpoenas issued by the Master. The application succeeded and leave to appeal to the Supreme Court of Appeal (“SCA”) was subsequently granted.
The SCA held that an individual should not be subjected to unreasonable intrusions on their liberty or privacy of their person, property or effects and that this principle was the very essence of the Bill of Rights.
The SCA further held that the Master had no general authority to make an order that impinges on those rights.
Quoting from an unreported Provincial Cape Division case of Foot v The Master, the SCA reaffirmed that the Master is not the tool or agent of the liquidator, obliged to carry out the latter’s instructions. Whilst the Master may take advice and consult with the liquidator, he/she is, crucially, independent, performing a duty and exercising a right imposed and granted by statute. The SCA found that by simply acceding to the liquidator’s request for the issuance of subpoenas, the Master “performed a mere rubber-stamping function.” Accordingly, the Master is required to bring an independent mind on the need for an enquiry, whether an interrogation is to be conducted thereat and, furthermore, the manner in which processes of this nature are to be carried out.
The SCA determined that the High Court was correct in setting the subpoenas aside and the appeal was dismissed with costs.
A subpoena, even one at the hands of the Master, is a significant invasion of the rights of an individual; and must therefore be exercised with certain clearly defined limits.
Written by Ntobeko Maphanga and supervised by Jarryd Spargo, 27 June 2018