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[2016] ZAWCHC 11
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Van Der Merwe and Others v Zonnekus Mansion (Pty) Ltd and Others (4653/2015B) [2016] ZAWCHC 11 (18 February 2016)
THE
REPUBLIC OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No: 4653/2015B
DATE:
18 FEBRUARY 2016
In
the matter between:
GARY
WALTER VAN DER
MERWE
..................................................................................
1
st
Plaintiff
CANDICE
JEAN VAN DER
MERWE
................................................................................
2
nd
Plaintiff
THE
TRUSTEES FOR THE TIME BEING
OF
THE EAGLE
TRUST
......................................................................................................
3
rd
Plaintiff
(Gary
Walter van der Merwe NO, Fern Jean Cameron NO, Candice Jean van der
Merwe NO)
BANK
ON ASSETS GLOBAL (PTY)
LTD
.........................................................................
4
th
Plaintiff
HELIBASE
SWAZILAND (PTY)
LTD
................................................................................
5
th
Plaintiff
And
ZONNEKUS
MANSION (PTY) LTD (in
liquidation)
..................................................
1
st
Respondent
THE
LIQUIDATORS OF ZONNEKUS MANSION (PTY) LTD
(in
liquidation)
Namely
Cloete Murray NO, Darusha Moodliar NO and Gordan Nokhando NO
....
2
nd
Respondent
THE
STANDARD BANK OF SOUTH AFRICA
LIMITED
.......................................
3
rd
Respondent
ABSA
BANK
LIMITED
..................................................................................................
4
th
Respondent
BANK
ON ASSETS HOLDINGS (PTY)
LTD
..............................................................
5
th
Respondent
THE
COMMISSIONER FOR THE
SOUTH
AFRICAN REVENUE
SERVICES
.................................................................
6
th
Respondent
THE
COMPANIES AND INTELLECTUAL
PROPERTIES
COMMISSION
......................................................................................
7
th
Respondent
Coram
:
KOEN AJ
Heard:
4 February 2016
Delivered:
18 February 2016
JUDGMENT
KOEN
AJ
[1]
This is an application for an order placing
the first respondent, Zonnekus Mansion (Pty) Ltd (“Zonnekus”),
under supervision
and commencing business rescue proceedings as
contemplated by section 131 (1) of the Companies Act 71 of 2008 (“the
Act”).
[2]
There are five applicants. The first and
second applicants are Mr Gary Van Der Merwe and his daughter Candice
Van Der Merwe. The
third applicant is the Eagles Trust (“the
Trust”). Bank on Assets Global (Pty) Ltd and Helibase Swaziland
(Pty) Ltd
are the fourth and fifth applicants, respectively.
[3]
The respondents who oppose this application
are the Standard Bank of South Africa Ltd (“the Bank”)
and The Commissioner
for the South African Revenue Service (“SARS”).
[4]
Because SARS denied that any of the
applicants had
locus standi
to bring this application it is necessary, to commence with, to
establish whether at least one of the applicants is an “affected
person”, as defined in the Act.
[5]
In terms of section 128 (1) of the Act a
shareholder of Zonnekus is an affected person and has standing to
bring this application
in terms of section 131 (1) of the Act. The
allegation is made in the founding affidavit that the Trust is the
sole shareholder
of Zonnekus. Mr Van Der Merwe attached to his
founding affidavit a document purporting to evidence the fact that
the Trust had
resolved to bring this application. The document did
not do that. It related to different litigation between different
parties,
and was signed by only two of the trustees. However, all of
the trustees have filed affidavits in support of this application.
Counsel for SARS, with whose submissions in regard to
locus
standi
the Bank aligned itself,
submitted that the affidavits were not evidence of the Trust having
resolved to bring this application.
Mr Van Der Merwe’s
affidavit stated that the trustees brought this application in their
representative capacities, and the
confirmatory affidavits deposed to
by the other trustees confirm that allegation. In my view that is
evidence enough of the Trust
having resolved to make this
application.
[6]
In argument SARS also placed in dispute the
allegation that the Trust was the sole shareholder of Zonnekus. The
answering affidavit
filed on behalf of SARS does not bear this out.
It refers the reader to paragraph 20 of the particulars of claim in
an action SARS
has instituted against Mr Van Der Merwe, his daughter
Candice, Zonnekus, the Trust and others. In paragraph 20 of the
particulars
of claim the following allegation is made by SARS: “
The
Eagles Trust is the registered owner of 100% of the issued share
capital…”
in Zonnekus.
This allegation, I think, puts an end to the question whether the
Trust is the sole shareholder of Zonnekus. In the
circumstances I am
satisfied that the Trust, at least, is an “affected person”
within the meaning of section 131 of
the Act, and that it has
standing to make this application. It is not necessary, therefore, to
deal with the standing of the other
applicants.
[7]
Having found that the Trust has standing to
bring this application it is necessary to turn back the clock. On 20
June 2014 the Bank
instituted proceedings for the winding up of
Zonnekus on the basis that Zonnekus was commercially insolvent.
Zonnekus opposed the
liquidation application and, by agreement
between the parties, the liquidation application was postponed to 11
September 2014 for
hearing on the semi-urgent roll. Zonnekus was
ordered to file its answering affidavit by 8 August 2014.
[8]
Notwithstanding various demands by the Bank
no answering affidavit was filed. However, on 9 September 2014, just
two days before
the hearing, Zonnekus launched an application for the
postponement of the liquidation application. On 11 September 2014,
the postponement
application was dismissed after the Court had heard
argument on behalf of the parties. Zonnekus was placed in provisional
liquidation,
with the return day being 28 October 2014.
[9]
Zonnekus did not oppose the application for
liquidation on the return date. Accordingly, on 28 October 2014, the
provisional liquidation
order was made final.
[10]
The first meeting of creditors was convened
by the Master of the High Court on 2 December 2014. At this meeting
the Bank proved
three claims against Zonnekus. It bears mentioning,
at this juncture, that none of the Bank’s claims are in
dispute. The
Bank’s claims against Zonnekus arise as a result
of two mortgage loan agreements and a building loan agreement
concluded
between it and Zonnekus. It is evident, therefore, that the
Bank is a secured creditor by way of the three mortgage bonds
referred
to above.
[11]
The second meeting of creditors took place
on 24 February 2015. Certain of the applicants sought to prove claims
in the insolvent
estate at this meeting but they were unsuccessful.
This was followed, on 25 March 2015, by an application issued by the
liquidators
in terms of
section 417
of the
Companies Act for
the
purposes of convening an enquiry into the affairs and business
dealings of Zonnekus. The first session of the enquiry was scheduled
to take place on 20 and 21 April 2015.
[12]
On 13 April 2015, that is about ten months
after the liquidation application had been issued, and approximately
one week prior to
the enquiry in terms of
section 417
commencing,
this application for business rescue was issued.
[13]
In response to this application a
preliminary point was taken by the Bank and SARS that a business
rescue application was not competent
in respect of a company which
was in final liquidation. The preliminary point was argued before
this court on 28 May 2015. On 10
June 2015 the preliminary point was
resolved in favour of the applicants and it was held that business
rescue proceedings could
be brought in respect of a company in final
liquidation. An order was made postponing the application to the
semi-urgent roll on
the earliest date which the parties were able to
agree, alternatively a date to be determined by the Judge President
of this Court
with further directions relating to the filing of
answering affidavits, replying affidavits and heads of argument.
[14]
The matter then came to be set down for
hearing on 1 December 2015. That this had occurred came to the
knowledge of the applicants
on, or very shortly after, 20 October
2015. However, the set down of the matter for hearing on 1 December
2015 had not occurred
in accordance with an agreement between the
parties, nor was it a date determined by the Judge President of this
Court as contemplated
in the order which had been made on 10 June
2015. Binns-Ward J had been allocated the matter on 1 December 2015.
A reading of the
transcript of the judgment delivered by him on that
day reveals that the applicants had taken the point that the matter
could not
proceed in view of the fact that the set down of the matter
had occurred improperly. The learned judge held that the point was
well taken and in the course of his judgment criticised the
applicants for their inertia when confronted with the fact of the set
down of the matter for hearing on 1 December 2015. In the result he
made an order, the material terms of which provided that the
business
rescue application was postponed for hearing in the fourth division
on the semi-urgent roll on 4 February 2016; the applicants
were
directed to deliver replying affidavits by not later than 20 December
2015; and heads of argument were to be delivered by
the applicants
not later than ten days before the postponed hearing date. It is to
be noted that the order recorded that the timetable
which it
incorporated had been proposed by the applicants themselves.
[15]
The applicants did not comply with any of
the requirements imposed upon them by the order made on 1 December
2015. Time went by,
however, and in view of the voluminous record an
early allocation of the matter took place. The papers were thus given
to me several
days in advance of the allocated hearing date.
[16]
Included in the Court file was a practice
note which had been filed by the applicants on 14 January 2016. The
practice note indicated
that the matter would not be able to proceed
on 4 February 2016 due to the fact that replying affidavits had not
been finalised.
The practice note went on to say that the first
applicant, Mr Gary Van Der Merwe, who was the accused in a criminal
trial relating
to alleged tax fraud had been engaged in the
preparation of heads of argument which were to be submitted by 10
December 2015 and
that considerable time and effort had been expended
by him in this task as a consequence of which it had been impossible
for the
replying affidavits to be finalised before 20 December 2015.
According to the practice note, this fact had been communicated to
the representatives of the Bank and SARS on 21 December 2015. It was
further stated that Mr Van Der Merwe had had to travel to
Australia
to join his wife on 24 December 2015 because it had been necessary
for her to undergo emergency surgery there. In conclusion,
the
practice note contained the submission that the matter could not
proceed on 4 February 2016 and that the applicants would request
a
postponement of the matter to a date to be agreed upon by the
parties.
[17]
Less than two days before the matter was
due to be argued I was advised by my registrar that a set of replying
affidavits were to
be delivered to my chambers. After making
enquiries I ascertained that the papers which were sought to be
handed to me were not
accompanied by a written application for
condonation. I accordingly advised my registrar not to accept
delivery of the papers which
I noted extended to almost two hundred
pages.
[18]
At the commencement of the hearing on 4
February 2016 counsel for the applicants handed up a written
application for condonation
of the late filing of the replying
affidavits. The application was dated 3 February 2016 and had been
delivered to the Bank and
SARS only hours previously. Counsel for the
Bank and SARS indicated that the condonation application would be
opposed and that
wished to argue the matter without filing any
answering affidavits.
[19]
Shorn of unnecessary verbiage the basis for
the condonation application boiled down to the following
uncontroverted facts. Mr Van
Der Merwe had been ordered on 30
November 2015 by Le Grange J, who had presided in the criminal trial
adverted to above, to submit
comprehensive heads of argument by 10
December 2015. The criminal trial had run for two years and the
record was in excess of seven
thousand pages. In the result Mr Van
Der Merwe had been engaged in the preparation of the heads of
argument required in the criminal
matter until 18 December 2015. On
21 December 2015 the Bank and SARS had been requested to afford for
an extension of time for
filing of the replying affidavits until 11
January 2016. The request had been refused. Mr Van Der Merwe then had
to travel to Australia
on 24 December 2015 because his wife had
undergone emergency surgery there. He returned to South Africa on 15
January 2016.
[20]
In summary, then, the failure on the part
of the applicants to file a replying affidavit by 20 December 2015
was attributed to the
fact that Mr Van Der Merwe had been otherwise
engaged in attending to the criminal proceedings against him. His
absence overseas
until 15 January 2016 is only relevant in so far as
it relates to the delay which occurred in relation to the launching
of the
condonation application.
[21]
Does this form a basis for the granting of
condonation for the delivery of replying affidavits almost seven
weeks after the date
which the applicants themselves had proposed
they should be filed, and only a day or so before the postponed date
of the hearing?
In
CSARS v Van Der Merwe
2016 (1) SA 599
(SCA), a case co-incidentally involving both Mr Van
Der Merwe and his daughter, the Court had occasion to repeat the
well-known
rules relating to condonation. The case emphasised the
factors that are relevant, namely, the degree of non-compliance, the
nature
of the explanation given for the delay, the effect of the
delay, the importance of the case, the convenience of the court, the
avoidance of unnecessary delay in the administration of justice and
the interest of all in the finality of litigation. The case
also
stressed the importance of applying for condonation without delay.
[22]
I do not think that it can be said that the
applicants have made out a case for the condonation of the late
filing of replying affidavits.
It was they who proposed the terms of
the order made by Binns-Ward J on 1 December 2015. Having been
ordered by Le Grange J the
day before to file heads of argument they
were fully cognisant of the fact that further work was to be done in
the criminal trial
of Mr Van Der Merwe and what that work would
entail. They did nothing to alert any of the respondents to the
possibility that they
might not be able to comply with the court
order they had proposed until after the time for compliance had
expired. And when respondents
refused to consent to the late filing
of replying affidavits the condonation application was not launched
immediately. Nor was
it launched immediately after Mr Van Der Merwe’s
return from Australia on 15 January 2016. Instead, the applicant
sought
to defer the matter by requesting the Judge President, in a
practice note, not to allocate a judge for the hearing of the matter
on 4 February 2016. That is not a permissible way to avoid the
consequences of an order directing that papers be filed according
to
a given timetable. In fact, I consider it to have been an entirely
improper attempt to defer the hearing.
[23]
Having heard argument in relation to the
application for condonation, and for the reasons briefly set forth
above, I refused it
with costs including the cost of two counsel
where two were employed.
[24]
Counsel for the applicants then sought to
move the application for the order sought in the main application and
to hand up heads
of argument in relation to thereto. These ought to
have been filed by 20 January 2016 in terms of the order which had
been made
on 1 December 2015. There was no written application for
the late filing of the heads of argument but an application for
condonation
was orally made from the bar. The reason for the late
filing of the heads was that counsel who had been briefed to prepare
them
had been engaged in assisting in the preparation of the written
argument which was required in Mr Van Der Merwe’s criminal
trial and then in the preparation of the replying affidavits. He had
been too busy, it was said, to draft the heads of argument.
An
apology was tendered.
[25]
It is, of course, quite undesirable that
the Court and the respondents should be deprived of the benefit of
written heads of argument
in advance of the hearing. Be that as it
may, not to have proceeded with hearing would have prejudiced not
only the respondents
but also the proper and efficient administration
of justice to an even more undesirable extent. Confronted with two
unsatisfactory
alternatives I chose that which I considered to be the
least unsatisfactory, condoned the late filing of the heads of
argument,
and heard argument in the main application.
[26]
It is regrettably necessary to observe that
it is unacceptable that the Court and the respondents were held to
ransom, as it were,
in the manner described above. Litigants and
their legal representatives have a responsibility to facilitate the
efficient administration
of justice by adhering to the rules of
Court, and to Court orders which regulate process. That
responsibility is even greater when
the process is regulated by an
order proposed by the defaulting party. The time will come when an
apology will not suffice.
[27]
I turn now to consider the merits of the
main application. Zonnekus is a property owning company which owns
five immovable properties.
These are erf 13898 Milnerton (“Zonnekus
Mansion”) which is unencumbered, erven 8666, 901 and 902
Milnerton, and erf
13421 Somerset West. Zonnekus is indebted to the
Bank in an amount just exceeding R5.3 million. The Bank holds
security in the
form of three continuing covering mortgage bonds
registered over two of the Milnerton properties and a bond registered
over the
Somerset West property. The remaining Milnerton property is
bonded to Absa Bank Ltd. Zonnekus allegedly owns movable property in
the form of certain aircraft. It has no employees and conducts no
business in the accepted sense of the word, at least not a business
which can be said to be ongoing. I am mindful of the fact that it was
submitted on behalf of the applicants that Zonnekus held
the
immovable properties it owned with a view to later developing them,
and that this was its business. However, it is only in
respect of the
Somerset West property that there is any evidence of the business of
property development being conducted by Zonnekus,
and this
development ground to halt some time ago as a result of inadequate
funding.
[28]
It is also necessary to mention that
Zonnekus is no stranger to financial difficulty. It was indebted to
Nedbank Ltd for an amount
of approximately R 7 million in respect of
a mortgage loan. Nedbank had brought a winding-up application against
it during August
2013 on account of it having defaulted in respect of
the mortgage loan. That winding up application was withdrawn when
Zonnekus
managed to raise the funds to pay Nedbank. It is thus
apparent that from at least August 2013 Zonnekus had been
experiencing financial
problems. If the business of Zonnekus was
property development, it is apparent that for some time it has
struggled.
[29]
SARS allege that Zonnekus is indebted to it
in the amounts of R 30 million and R 12 million, respectively. It
caused proceedings
to be instituted during May 2015 in this Court
against Zonnekus for recovery of these amounts. In the same action
SARS claims various
declaratory orders and the payment of amounts of
money against Mr Van Der Merwe, his daughter and the Trust. The
action is defended
by Zonnekus and the others and it is almost
impossible to predict when it will finally be determined. It is not
impossible, however,
to predict that it is very likely that the
action will take some time before it is finalised.
[30]
It is also relevant to note that during
April 2013 SARS sought and obtained a provisional preservation order
in terms of
section 163
of the
Tax Administration Act, 28 of 2011
,
against, amongst others, Mr Van Der Merwe and Zonnekus. In terms of
the preservation order Zonnekus was interdicted from dealing
with,
disposing of, encumbering or removing from South Africa any assets of
which it is the owner. The preservation order was made
final during
March 2014 and has the effect that as matters presently stand
Zonnekus cannot deal with any of its assets.
[31]
Much was made in the papers, and in
argument, of the running battle between SARS and Mr Van Der Merwe.
This battle relates not only
to allegedly unpaid taxes but also to
the criminal trial presently pending in which Mr Van Der Merwe is
accused of tax fraud. These
disputes, however, do not seem to impact
upon Zonnekus as much as they do upon Mr Van Der Merwe. I do not
propose to canvass the
full extent of the disputes. To do so would
not materially assist in a determination of whether the proposed
business rescue, which
relates only to Zonnekus, would be viable.
What the disputes do illustrate, however, is that the disputes
between SARS, on the
one hand, and Mr Van Der Merwe and Zonnekus, on
the other, are wide-ranging and factually complex. It is
overwhelmingly unlikely
that they will be resolved in the short to
medium term.
[32]
Before going further it is necessary to
deal briefly with the submission made by counsel for SARS to the
effect that Zonnekus is
not “financially distressed” but
hopelessly factually and commercially insolvent. The argument was to
the effect that
Zonnekus was “dead”, not merely
distressed, and could not be brought back to life through the
implementation of any
business rescue plan.
[33]
The starting point is section 128 (1) (f)
of the Act. It states that “ ‘
financially
distressed’, in reference to a particular company at a
particular time, means that (i) it appears to be reasonably
unlikely
that the company will be able to pay all of its debts as they become
due and payable within the immediately ensuing six
months…”
.
The Act thus gives its own meaning to the expression “
financially
distressed”.
[34]
It is safe to say that it is common cause
between the parties that Zonnekus will not be able to pay all of its
debts as they become
due and payable within the immediately ensuing
six month period. In my view, then, a purely physiological metaphor
is inapposite
and it must be held that Zonnekus is financially
distressed as contemplated by the provisions of the above quoted
section of the
Act.
[35]
To turn now to the proposed business rescue
bearing in mind that all that is required of the applicants at this
stage is that they
“
place before
the court a factual foundation for the existence of a reasonable
prospect”
that a business rescue
can be achieved (see
Propsec Investments
(Pty) Ltd v Pacific Coast Investments 97 Ltd and Another
2013
(1) SA 542
(FB) para 11). It must also be borne in mind that in
Propsec
it
was also stated that “…
To
require, as a minimum, concrete and objectively ascertainable details
of the likely costs of rendering the company able to commence
or
resume its business, and the likely availability of the necessary
cash resource in order to enable the company to meet its day-to-day
expenditure, or concrete factual details of the source, nature and
extent of the resources that are likely to be available to the
company, as well as the basis and terms on which such resources will
be available, is tantamount to requiring proof of probability,
and
unjustifiably limits the availability of business rescue
proceedings.”
That statement was
approved of in
Oakdene Square Properties
(Pty) Ltd and Others v Farm Bothasfontein (Kyalami) (Pty) Ltd and
Others
2013 (4) SA 539
(SCA) at
paragraph 31.
[36]
In the first rescue plan postulated by the
applicants in the founding affidavit Zonnekus Mansion, being erf
13898, Milnerton, which
is unencumbered, is to be sold by the
proposed business rescue practitioner for the sum of R 30 million.
The claims of secured
creditors will then be settled. The remaining
immovable properties are to be developed by Zonnekus. A second rescue
plan postulated
in the founding affidavit envisages the sale of the
movable assets allegedly belonging to Zonnekus and the use of the
cash obtained
thereby to develop the immovable properties.
[37]
A third proposal is annexed to the founding
affidavit. It envisages a different rescue plan. In terms of a
so-called short-term
proposal, all claims and loan accounts against
Zonnekus are to be converted to share capital. The proposal goes on
to postulate
the reinstatement of the bond accounts of the banks. In
the medium term it is envisaged that Zonnekus Mansion is to be
developed
into a “
50 unit luxury
retirement resort”
. The funding
necessary to undertake this development is estimated in the draft
business rescue plan to be R 50 million. It is envisaged,
then, that
the three remaining Milnerton properties will be developed as a
retirement complex requiring funding of some R 75 million.
And
finally, it is proposed that the partly completed structure on the
Somerset West property will be completed and sold.
[38]
In the light of the proposed rescue plans
can it be said that there is a reasonable prospect for rescuing
Zonnekus? By this
I mean has it been shown that there is a
reasonable prospect that Zonnekus can be restored to a solvent going
concern, or will
creditors or shareholders be better off than they
would under the liquidation (see
Oakdene
Square Properties
at paragraph [26]).
It is also necessary, in my view, in considering these questions, to
take account of the fact that the Act
contemplates that a return to
solvency, or the attainment of a better deal for creditors or
shareholders, will be the product of
the “
temporary
supervision”
of Zonnekus, and a
“
temporary
moratorium on the rights of claimants against the company or in
respect of property in its possession”
(see sections 128 (1) (b) (i) and (ii) of the Act).
[39]
There can obviously not be an inflexible
rule as to how long it should be before a rescue can be said to have
been successful. But
it is clear, I think, that the legislature
intended by its use of the word “
temporary”
that any rescue plan should not be of indeterminable duration.
Indeed, that fact that section 132 (3) of the Act requires
reports on progress to be filed if the rescue proceedings are not
complete within a period of three months, is a strong indication
of
the legislature’s intention that the implementation of a plan
should be of short duration.
[40]
The resolution of the disputes between
Zonnekus and Mr Van Der Merwe, on the one hand, and SARS on the other
is central to the success
of the business rescue. SARS makes it clear
that it does not support the proposed rescue plan. There is no reason
to think that
until the disputes are resolved SARS will permit the
assets of Zonnekus in respect of which the preservation order applies
to be
disposed of in order to facilitate the rescue. How long it will
take for these disputes to be resolved is, of course, impossible
to
say. But it is clear that the issues in dispute are wide-ranging and
the amounts involved are substantial, running into tens
of millions
of Rand. It appears to be unlikely that a resolution will be reached,
through the Courts or otherwise, in the short
to medium term. It is
much more likely that a resolution of the disputes will take years.
[41]
The Bank has also made it clear that it
does not support the rescue plans. There is no reason to think that
it will be prepared
to revive its lending arrangements with Zonnekus,
as postulated in the proposed rescue plans, in order to facilitate
any of the
various rescue proposals suggested by the applicants.
[42]
What Mr Van Der Merwe describes in the
founding affidavit as a business rescue boils down, in my view, to no
more than the sale
of the immovable property of Zonnekus and the
payment of secured creditors. The draft business rescue plan annexed
to the founding
affidavit assumes that the banks will continue to
fund Zonnekus by the reinstatement of their bonds. On the applicants
version
in excess of R 125 million for the development of the
properties which are to be developed is required. Zonnekus does not
have
these funds and does not appear to be in a position to raise
working capital against the security of its assets given that certain
of its assets are mortgaged and especially in the light of the
preservation order which has been obtained by SARS. These factors
weigh heavily against the submissions made on behalf of the
applicants that the applicants have established grounds for the
reasonable
prospect of achieving one of the two goals in section
128(1) (b) of the Act.
[43]
Moreover, the selling of the assets of
Zonnekus in order to pay creditors as is proposed by the applicants’
amounts to an
informal liquidation of the kind expressly disapproved
of in
Oakdene Square Properties
(see paragraphs [33] to [35]). Business rescue was not intended to
enable a company to liquidate its assets in its own time and
its own
pace as the applicants apparently intend.
[44]
A further factor which I think is relevant
is that Zonnekus has been in liquidation for a considerable period.
This application
was launched some four months after a final
liquidation order was made, and has come to be heard almost two years
after liquidation
proceedings commenced. The passage of so much time,
during which Zonnekus has been financially paralysed, and lacking in
management
and leadership, does not enhance the prospects of there
being a successful business rescue.
[45]
In
African
Banking Corporation of Botswana v Kariba Furniture
2015 (5) SA 192
(SCA) Leach JA observed as follows: “
Suffice
it to say that the company was clearly hopelessly insolvent and
effectively dormant in that it had not traded for years
and had no
business contracts in place. This is not a case in which an ongoing
business was likely to be rescued. It is a matter
in which there was
at best a forlorn hope, unsupported by any objective facts, that the
company might rise from the dead. Consequently,
I agree that there
was no reasonable prospect of achieving the ends of business rescue…”
(at paragraph [55]). In this context a physiological metaphor is, I
think, apposite.
[46]
In the circumstances I find that the
applicants have not made out a case for the relief sought in the
notice of motion.
[47]
As to costs there is no reason why the
usual rule, being that costs follow the result, should be departed
from.
[48]
I therefore make the following order:
The
application is dismissed with costs, including the costs of two
counsel where two have been employed.
KOEN
AJ
APPEARANCES
For the
Applicants: Ms P Tredoux
Instructed
by:
Deon Perold & Associates
For the 3
rd
Respondent: Mr G Woodland SC
Instructed
by: ENS Africa
For the 6
th
Respondent: Mr HGA Snyman SC
Ms
C Naude
Instructed
by: Macrobert Inc