Judgment: Educated Risk Investments 54 v Master of the High Court, Johannesburg & Others
07 October 2024
Dear Member
Attached a judgment handed down by Du Plessis AJ (Wepener J and Vally J concurring).
During the COVID-19 pandemic, a protocol was issued for virtual inspection of L&D accounts, which Educated Risk argued was invalid as it violated section 406 of the Companies Act. The second L&D account, confirmed on 1 June 2020, was challenged by the appellant, claiming the Master did not have the power to confirm the account without physical inspection, rendering the process ultra vires.
The appellant sought to have the second L&D account reopened, arguing that it did not receive proper notice of the account, and the Gazette notice was misleading.
The High Court dismissed the appeal, stating:
- Section 408 of the Companies Act precludes reopening an account once distribution has commenced and the Master’s confirmation acts as a final judgment.
- The appellant did not prove substantial injustice as required under section 157 of the Insolvency Act to reopen the account.
- The Master complied with section 406, as the protocol allowed for virtual inspection during COVID-19, which was deemed sufficient.
- The appeal was seen as frivolous and vexatious, leading to a punitive costs order.
Kindly sent to us by Richard Pollock of Harvard Corporate Recovery Services.
Take care,
René Bekker
Chief Operating Officer