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[2018] ZAWCHC 48
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Southern African Shipyards (Pty) Ltd v MFV "Polaris" and Others (AC42/2017; AC48/2017) [2018] ZAWCHC 48; [2018] 3 All SA 219 (WCC); 2018 (5) SA 263 (WCC) (18 April 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No:
AC 42/2017
AC 48/2017
Reportable
(Exercising
its Admiralty Jurisdiction
In
terms of Act No. 105 of 1983 as amended)
NAME
OF VESSEL: MFV “POLARIS”
In
the matter between:
SOUTHERN
AFRICAN SHIPYARDS (PTY)
LTD
Applicant
and
MFV
“POLARIS”
First
Respondent
THE
CARGO ON BOARD THE
MFV
“POLARIS”
Second
Respondent
YELLOW
STAR TRADING 1114 (PTY)
LTD
Third
Respondent
Date:
18 April 2018
JUDGMENT
BOQWANA,
J
Introduction
[1]
This
matter raises an interesting issue which is yet to receive treatment
before our Courts, that is, the interface between section
10 of the
Admiralty Jurisdiction Regulation Act 105 of 1983 (‘AJRA’)
and section 133 of the Companies Act 71 of 2008
(‘the 2008
Companies Act&rsquo
;).
[2]
In
this application the applicant seeks leave to sell a
motor
fishing
vessel (known as “mfv Polaris/the vessel”), her
equipment, furniture, bunkers and her cargo in terms of
Section 9
of
AJRA and for the appointment of a Referee.
[3]
The
application was launched on 18 January 2018 and served on the
respondents the same day. It was set down for 30 January
2018
on an unopposed basis. A
Rule
Nisi
was granted by Davis AJ with a return date being 15 February 2018.
The matter became opposed on the return day and an order was
taken by
agreement between the parties before Henney J, in terms of which the
Rule
Nisi
was
extended to 15 March 2018 and the respondents allowed to file their
answering papers by close of business on 1 March 2018, with
the
applicant to file its replying affidavit by 8 March 2018. The matter
was set down for 15 March 2018. The respondents, however,
failed to
file their opposing papers as provided for in the order of 15
February 2018.
[4]
On
the date of the hearing of the matter before me, i.e. 15 March 2018,
a copy of an answering affidavit was handed up in Court
by Mr Mayosi
who appeared on behalf of the respondents. Mr Brown, who appeared for
the applicant advised the Court that the applicant
was opposed to the
admission of the answering affidavit on the basis that it was clearly
late and that the matter was urgent. The
applicant as well as the
Court had not had any opportunity to consider this late affidavit as
well as the accompanying condonation
application. Mr Brown
pressed that his instructions were that the answering affidavit
should be disregarded and the matter
be argued on the papers that
were already before the Court, namely, the applicant’s papers.
The respondents had raised a
point in
limine
which Mr Brown submitted the applicant was ready to argue.
[5]
Having
considered the matter I was of the view that it would be appropriate
to postpone it to the following day to afford the applicant
an
opportunity to file its replying papers which it agreed to do.
That postponement would also afford the Court an opportunity
to
consider the condonation application, the intended answering
affidavit as well as the applicant’s reply thereto.
The
applicant’s case
[6]
The
applicant conducts business as a shipyard and provides ship repair
services in respect of vessels such as the mfv Polaris. It
has its
principal place of business in Durban, KwaZulu-Natal. The applicant’s
claim is premised on the fact that in February
2016, mfv Polaris was
delivered by the third respondent to its shipyard in Durban in order
for repairs to be effected to it.
[7]
The
mfv Polaris is a 37.5 meters fishing vessel with a gross tonnage of
412 tonnes and has on board facilities which are used for
the
processing of fish livers (usually shark livers) into fish oil. It
apparently has approximately 10 to 12 metric tonnes of fish
oil (‘the
Cargo’) on board. It is alleged to be under the flag of
the Republic of Cameroon. The vessel
is currently under arrest,
at the instance of the applicant and a number of other creditors, at
the Port of Cape Town which is
within the jurisdiction of this Court.
The third respondent carries on business as ships agents at Table
View in Cape Town and
is the registered owner of the mfv Polaris.
[8]
According
to the applicant, it duly effected the requested repair services and
between February 2016 and March 2016, submitted invoices
to the third
respondent in respect of such services. In or about April 2017, the
third respondent communicated its inability to
make payment to the
applicant. As a result the applicant refused to release the mfv
Polaris from its shipyard.
[9]
During
April to June 2017 various meetings took place between the
representatives of the applicant and the third respondent and
a
number of emails were exchanged, the aim of which was to attempt to
reach an arrangement in terms of which the vessel would be
released
from the applicant’s shipyard.
[10]
Representatives
of the third respondent
provided
an undertaking to the applicant that should the applicant release the
vessel from the
shipyard, the third
respondent
would utilise it to procure a cargo of fish oil and that the
applicant would be paid the outstanding amount from the
proceeds of
that Cargo.
[11]
Pursuant to that
undertaking and on 1 June 2017 the applicant and the third respondent
entered into an Acknowledgement of Debt in
an amount of
R2 142 151.15. The Acknowledgement of Debt included payment
obligation by
which
the third respondent undertook to discharge their indebtedness to the
applicant. In terms of their Acknowledgement of
Debt the third
respondent would pay the applicant 50% of the outstanding debt,
namely the sum of R1 071 075.57 within
70 days calculated
from the commencement date of the Acknowledgement of Debt being 5
June 2017. 50% of the outstanding capital
was accordingly due
by no later than 16 August 2017.
In
the event of the payment not being made as undertaken, the full
amount of the outstanding debt would immediately become due and
payable; interest of 9% per annum would accrue and would be
calculated on the full outstanding capital amount calculated from 5
June 2017 until date of payment and in the event of the applicant
having to institute the proceedings to recover the debt, its
costs
would be recoverable on the attorney and client scale.
[12]
The
third respondent breached the terms of the Acknowledgement of Debt by
failing to pay 50% of the outstanding capital on or before
16 August
2017 or to make any payment at all. The full outstanding amount and
the interest stated above accordingly became due
and payable. On or
about 4 October 2017, the applicant arrested mfv Polaris together
with equipment, furniture, stores, bunkers,
and lubricating oils in
an admiralty action
in
rem
under case number AC 42/2017. On Monday 27 November 2017, the
applicant arrested the Cargo on–board mfv Polaris in
a further
admiralty action
in
rem
case number AC 48/2017. Appearance to defend was not entered by any
of the respondents in respect of the actions commenced against
mfv
Polaris and against the Cargo.
[13]
According
to the applicant, the vessel is also under arrest by a number of
other creditors which are mentioned in its papers. A
number of these
creditors have already advanced claims and some seek to do so in the
near future. It is also stated the majority
of the crew members of
mfv Polaris have repatriated mainly to Indonesia and a number of them
have not been paid. The crew members
intend on advancing claims
against mfv Polaris in due course in respect of unpaid wages.
[14]
The
applicant alleges that with the passage of time mfv Polaris’
condition would inevitably deteriorate, certificates will
expire and
her value will fall. The longer the vessel is under arrest the
greater the risk of equipment failing or some other
damage or harm
befalling her. Because of the fact that no crew is currently
on-board, routine maintenance is not being undertaken.
It is further
alleged that it is not in the interest of the general body of
creditors or her owners and the Cargo on board, for
the vessel to
remain under arrest any longer than was necessary. This is because
her diminishing value and raising preservation
costs will result in a
reduction in the equity in her.
Condonation
Application
[15]
The
explanation given by the respondents for the late filing of the
answering affidavit is that the third respondent had instructed
Salvatore Puglia Attorneys to act on its behalf. Mr Andrew Barry
Zurnamer of the third respondent, the deponent to the answering
affidavit, alleges that he understood that the third respondent had
to file its answering affidavit by 2 March 2018 (sic) but did
not do
so because CMB Attorneys, who are Mr Zurnamer’s personal
attorneys, advised him on 27 February 2018 that it would
be best for
the third respondent to begin with business rescue proceedings. The
third respondent consequently adopted a resolution
to that effect on
28 February 2018. This resolution was filed with the Company and
Intellectual Properties Commission (“CIPC”)
on 7 March
2018 and the applicant’s attorneys were advised of this
development the following day on 8 March 2018. Pursuant
to having
adopted the resolution, the directors of the third respondent
instructed its erstwhile attorneys not to draft and file
an answering
affidavit. They did so because, in their view, business rescue
proceedings placed an automatic moratorium on all legal
proceedings
against the third respondent.
[16]
On
8 March 2018, CMB Attorneys who were not on record in this
application at the time, addressed correspondence to the applicant’s
attorneys advising them that the third respondent had begun with
business rescue proceedings and requested it to stay this
application.
In reply thereto the applicant’s attorneys sent
correspondence on 9 March 2018 to CMB Attorneys, wherein they
referred to
section 10
of the AJRA, stating that mfv Polaris and the
Cargo, which had been subjected to a number of arrests, fell out of
any judicial
management, business rescue or insolvency proceedings
and that the applicant was accordingly not obliged to place a
moratorium
on the legal proceedings and would proceed on 15 March
2018 with the application.
[17]
In
the meantime, Salvatore Puglia Attorneys withdrew as the respondents’
attorneys of record stating in an email dated 12
March 2018 that they
were doing so pursuant to their client’s decision to go under
business rescue.
[18]
On
13 March 2018, the respondents’ new attorneys, CMB, wrote a
letter to the applicants attorneys requesting a postponement
on the
basis that their mandate to act in the proceedings set down for 15
March 2018 was only received on 12 March 2018, and thus
they had not
had an opportunity to consult with their client on the merits of the
application and draft answering papers. The applicant’s
attorneys telephonically informed the respondents’ attorneys
that they were not amenable to a postponement.
[19]
On
the basis of the above, the respondents submit that good cause had
been shown for non-compliance with the Court Order of 15 February
2018 and that there was no
mala
fide
intention on their part as they notified the applicant, (within the
given time limits) as soon as they could, once the business
rescue
proceedings were instituted.
[20]
The
explanation given by the respondents for the late filing of the
answering affidavit is, in my view, unsatisfactory. It is instructive
that the decision to place the third respondent under business rescue
was taken on 28 February 2018 in terms of the resolution
of the
directors (which was more than a week after the Order was granted by
Henney J). The respondents, however, failed to instruct
their
attorney to file papers setting out that position before the expiry
of the time in which to file the answering affidavit.
[21]
In
my view it is not sufficient for the respondents to simply state that
they decided not to file answering papers because the business
rescue
proceedings had placed an automatic moratorium on all legal
proceedings against the third respondent. This is because
there
was already an application before the Court in anticipation of which
an Order was taken by agreement between the parties,
that the
respondents would file an answering affidavit on 1 March 2018
.
There was also a
Rule
Nisi
in place. The
respondents
could not simply fold their arms and do nothing because they believed
that the current proceedings were automatically
stayed.
[22]
That
explanation is also contrary to the request that they made to the
applicant’s attorney to stay this application.
In other
words, if the reason for not filing an answering affidavit was based
on the respondents’ belief that the application
was
automatically stayed, there would have been no reason to ask the
applicant to agree to the stay of this application.
Furthermore, much of what is set out in the answering affidavit,
particularly in relation to other defences, would have been known
to
the respondents long before the implementation of the business rescue
proceedings. The business rescue decision could, therefore,
not be
used as a reason for failure to file the answering affidavit
timeously.
[23]
Notwithstanding
the above, it is well known that even if the explanation tendered
appears to be inadequate, such deficiencies maybe
compensated upon by
other factors such as the prospects of success. It is therefore
imperative, to deal with the merits of
the case, so as to consider
whether the late filing of the answering affidavit should be
condoned. In any event, the issue raised
in the answering affidavit
is, in the main, a point of law; other issues follow on from that
point.
Point
in
limine
[24]
The
respondents have raised two points in
limine
in their answering affidavit but they only persist with one, namely,
that section 10 of AJRA is in conflict with sections
128
to 155
(Chapter
6 of the 2008
Companies Act) in
that, in terms of the 2008
Companies
Act business
rescue proceedings place a moratorium on the pending
application. Whilst not mentioned by the respondents, the specific
provision
of the 2008
Companies Act which
places a general moratorium
on proceedings against a company is
section 133.
[25]
It
is argued on behalf of the respondents that the provisions of the
2008
Companies Act, as
envisaged in
section 5(4)(b)(ii)
, prevail,
except to the extent provided otherwise in
section 118(4)
of that
Act. It is further submitted that if it was the intention of
the legislature for AJRA to have supremacy over the
2008
Companies
Act, AJRA
would have been included in the set of national legislation
set out in section 5(4) of the 2008
Companies Act, whi
ch must be
deferred to in the event of conflict, alternatively the Legislature
would have included business rescue proceedings in
section 10
of
AJRA, in order to avoid any conflict between the two statutes.
[26]
Furthermore,
regard should be had to section 7(k) of the 2008
Companies Act, which
points to the Legislature’s intention, and wherein it is stated
that the purpose of the Act is to “
provide
for the efficient rescue and recovery of financially distressed
companies, in a manner that balances the rights and interests
of all
relevant stakeholders
.”
[27]
It
is further contended on behalf of the respondents that the
applicant’s reliance on judicial management proceedings, as
contemplated by the Companies Act 61 of 1973 (‘the 1973
Companies Act’) is misplaced in that the latter Act has been
repealed and along with it, judicial management provisions have been
abolished. Hence, the 1973 Companies Act and/or judicial management
cannot be applicable in this instance. In any event, so the
respondents contend, business rescue proceedings are distinct
from
judicial management. The respondents consequently submit that this
application should be dismissed on that ground alone and
that the mfv
Polaris and the contents thereof be released to the third respondent
so that the business rescue practitioner can
begin with his work.
[28]
The
respondents raise another defence of a counter-claim in which they
state that the
applicant owes the third respondent an amount of R1 200 000.00
in respect of a defective engine which was
installed by the applicant
onto the mfv Polaris. They deny that the vessel
is
deteriorating and contend that the claimants stand a better chance to
get good value in business rescue proceedings than selling
the vessel
on auction.
[29]
The
applicant, on the other hand, denies the applicability of section 133
of the 2008 Companies Act to these proceedings, an issue
dealt with
shortly below. It also contends that the conduct of the respondents
amounts to abuse of process in that they failed
to take action when
claims were lodged by various creditors leading to the arrest of
the
mfv
Polaris
since September 2017; they abandoned the vessel and her crew (who
repatriated to Indonesia); they allowed the vessel to
stand for a
period of over five months during which time it has been falling into
disrepair and devaluing; they failed to enter
opposition at the
provisional stage of this application; they entered notice of
intention to oppose upon return day at the eleventh
hour and failed
to file any papers until the day of the hearing; they agreed to
orders to file papers by 1 March 2018; and acted
in contempt of such
orders. The applicant further submits that the stay of these
proceedings would in any event not release the
mfv
Polaris
and the Cargo as they are under arrest.
Applicable
issues before the Court
[30]
The
applicant has approached this Court seeking the sale of the
vessel
and other contents
in terms of section 9 of AJRA. That section gives the Court a wide
discretion to order the sale of the property arrested in terms
AJRA.
It reads as follows:
“(1)
A court may in the exercise of its admiralty jurisdiction at any time
order that any property which has been arrested
in terms of this Act
be sold.
(2)
The proceeds of any property so sold shall constitute a fund to be
held in court or otherwise to be dealt with, as may be provided
by
the rules or by any order of court.
(3)
Any sale in terms of any order of court shall not be subject to any
mortgage, lien, hypothecation, or any other charge of any
nature
whatsoever.”
[31]
The
first issue to be determined in this case, however, is whether such a
sale can be ordered when a company owning the property
under arrest
has been placed under business rescue in terms of the 2008 Companies
Act. The respondents say it cannot because of
the general moratorium
placed on all legal proceedings by section 133 of the 2008 Companies
Act. The applicant on the other hand,
contends that the order for the
sale of the vessel can be made by virtue of section 10 of AJRA which
excludes property arrested
in respect of a maritime claim from assets
vesting in a trustee in insolvency or administered by a liquidator,
judicial manager
or any other person who might otherwise be entitled
to such property.
How
the Courts have applied section 10 previously?
[32]
Section
10 of AJRA provides thus:
“Any
property arrested in respect of a maritime claim or any security
given in respect of any property, or the proceeds of
any property
sold in execution or under an order of a court in the exercise of its
admiralty jurisdiction, shall not, except as
provided in section 11
(13), vest in a trustee in insolvency and shall not form part of the
assets to be administered by a liquidator
or judicial manager of the
owner of the property or of any other person who might otherwise be
entitled to such property, security
or proceeds, and no proceedings
in respect of such property, security or proceeds, or the claim in
respect of which that property
was arrested, shall be stayed by or by
reason of any sequestration, winding-up or judicial management with
respect to that owner
or person.”
[33]
In
terms of section 11(13) “[
a
]
ny
balance remaining
after
the claims mentioned in paragraphs (a) to (e) of subsection (4) and
the claims mentioned in subsection (11) have been paid,
shall
be paid over to any trustee, liquidator or judicial manager who, but
for the provisions of section 10, would have been entitled
thereto or
otherwise to any other person entitled thereto
”.
(Underlined for emphasis)
[34]
Section
10 of AJRA has been given little treatment by our Courts. What is
apparent, though, is that the ring-fencing of the maritime
claims as
against maritime property has been recognised by the Courts which
have previously been confronted with the application
of that section,
albeit in circumstances different from the one this Court is asked to
grapple with. Cases where section 10 was
considered include
Rennie
NO v South African Sea Products Ltd
1986 (2) 138 (CPD) at 144B-E;
The
Nantai
Princess Line Co Ltd v Cargo Laden on the Nantai Princess
1997 (2) SA 580
(D) at 590I-J.
[35]
First,
in
Rennie
,
it was contended that a creditor of a ship-owning company whose claim
is a maritime claim was in a unique position
vis
a vis
that
company on or after its liquidation as opposed to other creditors.
The respondents’ contention, in that case, with which
the court
had no quarrel, was stated by the court at 144 to be that “
the
purpose and intent of the 1983 Act was, inter alia
,
to
afford assistance to creditors with claims constituting maritime
claims in obtaining full satisfaction therefor and also –
to
put it in simple terms – to have their minds set at rest when
contracting with a shipowner a long distance away from the
seat of
his business, lest they be doing so in ignorance of his or its
sequestration or liquidation.”
The Court then confirmed its agreement with the submission by stating
“
[t]hat
the 1983 Act was indeed designed to assist creditors having maritime
claims cannot be gainsaid
”.
[36]
In
Gendor
v Holdings Ltd v City Fishing Holdings (Pty) Ltd; Breemond Trust
(Intervening Party)
[2007] 3 All SA 400
(C) at para 28, the Court held that “
[w]hen
arrest or attachment is followed by the establishment of a fund in
court, the Admiralty Act envisages an orderly sequence
for proof of
claims against funds in court
after
ring fencing them from other claims.
This procedure is set out in section 10 as read with section 10A (2)
and 11 (13).
Sections
10 and 11 (13) provide that the property arrested does not vest in a
liquidator except after all claims have been paid
in accordance with
the preferences codified in sections 11 (5) and 11 (11
)
.”
(Underlined for emphasis)
[37]
The
Supreme Court of Appeal in
Commissioner,
South African Revenue Service v Van der Merwe NO and others
[2017] 2 All SA 335
(SCA), although dealing with a different issue,
acknowledged
the
uniqueness of section 10 of AJRA by making the following observation:
“[22] There is
nothing in either the Customs Act or the Insolvency Act which
expressly (or by necessary implication) provides
that goods subject
to a lien in favour of SARS do not fall to be dealt with under the
laws of insolvency.
This is to be contrasted with s 10 of the
Admiralty Jurisdiction [Regulation] Act 105 of 1983 which excludes
the vesting of certain
property in the trustee on insolvency and s 90
of the Insolvency Act in terms of which the Land Bank retains its
powers in relation
to any property belonging to an insolvent estate.
Such property is expressly excluded from the provisions of the
Insolvency Act
.”
(Underlined
for emphasis)
[38]
From
the above it is clear that the general purpose of section 10 is to
exclude maritime property that is under arrest to vest in
the control
of a trustee in a sequestration or under administration of the
liquidator in a winding-up, and a judicial manager.
Secondly, it
provides for a ‘no-stay’ of the proceedings in respect of
such arrested property by reason of sequestration,
winding-up or
judicial management. This section is linked to other sections
of the AJRA which isolate property that is under
maritime
jurisdiction and regulate the consequences flowing therefrom. In
other words there is statutory preference for creditors
with maritime
claims over other creditors.
[39]
An
important limitation in respect of the application of the section was
highlighted in both the cases of
Rennie
(at 144I – 145H) and
Nantai
Princess
(at
590J – 591B) where it was found that the language of the
section 10 limits its application to an arrest of maritime property
effected prior to the commencement of the debtor’s winding-up.
In
Rennie
the Court said–
“it
seems to me to be beyond doubt, and it is to my mind readily apparent
upon grammatical analysis of the language in which
that section is
couched,
that applicability of the
section is limited to pre-winding-up arrests
.
Thus arrested property shall not form part of the assets
to
be
administered by a liquidator - if
Mr Knight’s
submission is to be upheld, the relevant passage of the section would
read ‘…to be administered or
under
administration
by
a liquidator’ And this view is reinforced when one has regard
to the position where the insolvent debtor is a natural person,
for
the section provides that the arrested property shall not vest in his
trustee,
a state of affairs which
presupposes that no vesting has yet taken place, whereas in law such
vesting takes place immediately following
the trustee’s
appointment
. I am further fortified
in this view by the provision in this section for the staying of
proceedings by reason
inter alia
of
a winding-up, for it is proceedings which have already been
instituted, ie before winding-up commences, which can be stayed by
a
supervening winding-up.”
(Underlined
for emphasis)
[40]
Concurring
with Berman AJ’s views in
Rennie
,
the Court in
Nantai
Princess
expressed the following:
“It
seems to me that, manifestly,
the
section applies to a state of affairs before the commencement of the
winding-up
. In passing it may be
observed that perhaps the Legislature in framing s 10 did not go far
enough in the sense that it apparently
ignored the far-reaching
effect of the retrospective operation of winding-up orders. It may
well be that given the special nature
of the protection afforded to
the holders of maritime claims, there is a strong argument for saying
that an action in rem instituted
by arrest prior to the making of a
winding up order should not be hit by the retrospective operation of
a
concursus creditorum
.”
(Underlined
for emphasis)
[41]
It
follows, therefore, that if property has already vested in a trustee
(i.e. prior to the arrest), it cannot at the same time vest
in the
admiralty division or as Levinsohn J found in
Nantai
Princess
(at 591B-C), which dealt with a liquidation scenario, “[
t
]
he
arrested property and the proceeds derived as a result of the sale
ordered by the Court [in that case] fall to be administered
by the
liquidator in the winding-up of the second respondent
.”
[42]
One
can, therefore, safely conclude from the above that the Courts
interpreted the provisions of the 1973 Companies Act, the prevailing
insolvency law and those of AJRA in such a manner that they could
exist alongside each other without one trumping the others.
[43]
It must be mentioned that
the provisions of Chapter 14 of the 1973 Companies Act dealing with
winding-up and liquidation have been
retained, in the interim, in
terms of Item 9 of Schedule 5 of the 2008 Companies Act while those
relating to judicial management
have not.
Interaction
between s 10 of AJRA and s 133 of the Companies Act
[44]
Mr
Mayosi’s contention as I understand it is that with the
introduction of business rescue proceedings, the 2008 Companies
Act
presents a new phenomenon of general moratorium by way of statute
(section 133), which directly conflicts with section 10 of
the AJRA.
According to him, this is different from the previous dispensation
(which was presumably harmonious in application) as
it carries an
object which, if section 10 were to apply, would undermine the whole
fabric of business rescue. Apart from that,
his argument is that the
words ‘business rescue’ do not appear in section 10 and
the absence thereof should indicate
that the Legislature had intended
for that section not to apply to a business rescue practitioner or
business rescue proceedings.
Furthermore, if business rescue is found
to be implied in section 10, the stay of proceedings in section 133
supersedes the provisions
of section 10.
[45]
Section
133 of the 2008 Companies Act provides as follows:
“
General moratorium on legal proceedings against company. -
(1)
During
business rescue proceedings
, no legal
proceeding, including enforcement action, against the company,
or in relation to any property belonging to the
company, or lawfully
in its possession, may be commenced or proceeded with in any forum,
except
—
(a) with the written consent of the
practitioner
;
(b)
with the leave of the court and in accordance with any
terms the court considers suitable
;
(c) as a set-off against any claim made by the company in any
legal proceedings, irrespective of whether those proceedings
commenced before or after the business rescue proceedings began;
(d) criminal proceedings against the company or any of its
directors or officers;
(e) proceedings concerning any property or right over which the
company exercises the powers of a trustee; or
(f) proceedings by a regulatory authority in the execution of
its duties after written notification to the business rescue
practitioner.
(2) During
business rescue
proceeding
s, a guarantee or surety by a company in favour of
any other person may not be enforced by any person against the
company except
with leave of the court and in accordance with any
terms the court considers just and equitable in the circumstances.
(3) If any right to commence proceedings or otherwise assert a claim
against a company is subject to a time limit, the measurement
of that
time must be suspended during the company’s
business
rescue proceedings
.”
(Underlined
for emphasis)
[46]
The
applicant’s argument is that section 10, properly construed,
incorporates a business rescue practitioner and business
rescue
proceedings. Mr Brown submits that if regard is had to section
5(4)(a) of the 2008 Companies Act (which is dealt with below)
there
can be no conflict between sections 10 of AJRA and 133 of the 2008
Companies Act because it is possible to give an interpretation
to
AJRA which enables it to run concurrently with the 2008 Companies
Act. In his view that being the case, no conflict arises.
This is
because, so he contends, the AJRA creates a separate and ring-fenced
procedure for the advancement of maritime claims against
arrested
maritime property which has been consistently recognised by our
Courts.
[47]
Secondly,
whilst the words ‘business practitioner / business rescue
proceedings’ do not appear in section 10, our Courts
have
(generally in other instances) recognised that business rescue
proceedings replaced judicial management, something the respondents
contend not to be the case for the purposes of section 10.
[48]
The
applicant contends further that a similar stay of proceedings, as in
section 133, commenced against a company placed under judicial
management (See section 428(2)(c) of the 1973 Companies Act).
Although such a stay was discretionary, in its view, it was standard
procedure to order it. Mr Brown relies on
Henochsberg
on the Companies Act, Meskin, Vol 1, fifth edition,
at
931, commentary on the 1973 Companies Act, to advance this
proposition. There it is stated that “[
i
]
t
is usual for a judicial management order, provisional or final, to
contain these directions. If it were not to do so the whole
object of
instituting the judicial management might be defeated and proceedings
continued or instituted against the company in
judicial management
might precipitate its winding up
.”
[49]
The
applicant’s point in this regard is that, judicial management
routinely gave rise to stays of proceedings against companies.
Notwithstanding that, the Legislature chose to bind the judicial
manager’s hands by removing maritime property under arrest
from
his or her control. If the stay of proceedings according to section
133 excluded business rescue proceedings from the application
of
section 10, the same should have applied to the judicial management
procedure, but it did not.
[50]
Relying
on the
eiusdem
generis
principle
,
the
applicant further submits that, in the event that it were to be found
that business rescue did not replace judicial management,
then the
phrase
“
or
of any other person who might otherwise be entitled to such property
”
in
section 10 is wide enough to include business rescue practitioner and
business rescue proceedings.
[51]
It
is evident that section 10 of AJRA still contains the phrase
“judicial manager” and “judicial management”.
The words “business rescue” or “business rescue
practitioner” do not appear. It is also common cause that
section 10 of AJRA predates the provisions of the 2008 Companies Act,
as it was promulgated in 1983.
Approach
to interpretation of statutes
[52]
It
is established that a document including a statute should be
interpreted
“
having
regard to the context provided by reading the particular provision or
provisions in the light of the document as a whole
and the
circumstances attendant upon its coming into existence. Whatever the
nature of the document, consideration must be given
to the language
used in the light of the ordinary rules of grammar and syntax; the
context in which the provision appears; the
apparent purpose to which
it is directed and the material known to those responsible for its
production. Where more than one meaning
is possible each possibility
must be weighed in the light of all these factors. The process is
objective not subjective. A sensible
meaning is to be preferred to
one that leads to insensible or unbusinesslike results or undermines
the apparent purpose of the
document. Judges must be alert to, and
guard against, the temptation to substitute what they regard as
reasonable, sensible or
businesslike for the words actually used. To
do so in regard to a statute or statutory instrument is to cross the
divide between
interpretation and legislation. In a contractual
context it is to make a contract for the parties other than the one
they in fact
made. The ‘inevitable point of departure is the
language of the provision itself’, read in context and having
regard
to the purpose of the provision and the background to the
preparation and production of the document
.”
(
Natal Joint Municipal
Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) at para 18.) (Footnotes omitted).
Therefore, the language of the documents inevitably is the place from
where to move, but that must be done within the context and
the
purpose of the document.
[53]
In the case of
Ex
parte: Nell N.O. and Others
2014 (6) SA 545
(GP) where the Court had to balance the
considerations between section 18 of the Superior Court Act 10 of
2013 (‘Superior
Courts Act’) which suspends the operation
and execution of a decision pending the outcome of the application
for leave to
appeal or an appeal and the consequences triggered by a
sequestration or a liquidation order, the Court found at para 53:
“Over more
than a hundred years a legal policy has been developed and operated
in relation to the processes created by the
Insolvency Act and the
previous Companies Act for the administration of sequestrated estates
and companies wound up for inability
to pay their debts. Pursuant to
that policy, these processes fall to be administered immediately by
trustees and liquidators despite
pending appeals. If the purpose of s
18 had been to undo all that, one would have expected that measures
would have been put in
place to deal with or mitigate such
consequences and that s 339 of the previous Companies Act would
either have been expressly
repealed or amended. None of that was
done.”
[54]
It
is also worth observing the remarks of the Court in
Lindsay
Keller & Partners v AA Mutual Insurance Association Ltd and
Another
[1988]
3 All SA 362
(W) quoting
Ex
parte Minister of Justice: In re R v Jekela
1938 AD 370
at 377 with approval, the court observed that:
“One
of the presumptions applicable to the interpretation of statutes is
(Maxwell 7
th
ed at 71) ‘
that the Legislature
does not intend to make substantial alteration in the law beyond what
it expressly declares either by express
terms or by clear
implication’
. The same
authority dealing with this point in a later passage says (ibid at
136): ‘The work of the Legislature is treated
in the same
manner as that of any other author, and the language of every
enactment must be construed as far as possible in accordance
with the
terms of every other statute which it does not in
express
terms modify or repeal.
The law,
therefore, will not allow the revocation or alteration of a statute
by construction when the words may be capable of proper
operation
without it.’”
(Underlined
for emphasis)
[55]
Before
determining how the two statutes, which are the subject of this
matter, are to be interpreted
vis
a vis
one another, it serves well to start with the question whether
business rescue proceedings or business rescue practitioner are
included in section 10 of AJRA.
Is
business rescue incorporated in s 10?
[56]
It
has been accepted in a number of decisions that the new regime of
business rescue replaced the judicial management system in
the 1973
Companies Act (See, for instance,
Merchant
West Working Capital Solutions (Pty) Ltd v Advanced Technologies
and Engineering Company (Pty) Ltd and Another
(13/12406) [2013] ZAGPJHC 109 (10 May 2013) at para 12.). The
scheme of business rescue denotes a complete break away from
the past
which is aimed at rehabilitating a company in financial distress by
providing temporary management of its affairs; placing
a temporary
moratorium on the rights of the claimants; and the implementation of
a plan to rescue it by restructuring its affairs
with the view to
enabling it to continue functioning as a solvent company and if that
is not possible to achieve better returns
for the creditors than they
would have had had the company been immediately liquidated. (
Gormley
v West City Precinct Properties (Pty) Ltd and Another, Anglo Irish
Bank Corporation Ltd v West City Precinct Properties
(Pty) Ltd and
Another
(19075/11,
15584/11)
[2012] ZAWCHC 33
(18 April 2012) at para 6;
Section
128 of the 2008 Companies Act – business rescue definition
).
[57]
The significance of the
business rescue phenomenon was pointed out by the Court in
Cloete
Murray and Another NNO v Firstrand Bank Ltd t/a Wesbank
2015 (3) SA 438
(SCA) at para 14 as follows:
“
It is
generally accepted that a moratorium on legal proceedings against a
company
under business rescue, is of cardinal importance since it provides
the crucial breathing
space or a period of
respite to enable the company to restructure its affairs. This allows
the practitioner, in conjunction with
the creditors and other
affected parties, to formulate a business rescue plan designed to
achieve the purpose of the process
.”
(Underlined
for emphasis)
[58]
To
place a company under business rescue does not require a court order,
(although a court can still be approached), a resolution
puts the
process in motion and a business rescue practitioner is appointed to,
inter alia, investigate the affairs of the company,
prepare a rescue
plan and oversee its implementation (
Merchant
West
supra
at para 12)
[59]
Judicial
management on the other hand was an extraordinary remedy which
required an application to be launched in the High Court,
in which an
applicant had to satisfy the Court that a “reasonable
probability” existed that the company, if placed
under judicial
management, would be able to pay its debts, and ultimately be
restored to a successful business. The judicial manager
appointed by
the Court investigated the company’s affairs and reported on
the likelihood of a successful restoration of the
company, which
views would be taken into account by the court when considering
whether to grant a final order of judicial management.
(
Merchant
West
supra
at para 11)
[60]
The
test of “reasonable likelihood” involved in the granting
of a judicial management order was quite onerous as opposed
to what a
business rescue applicant has to show in obtaining an order, which is
a “reasonable prospect”.
(
Nedbank
Ltd v Bestvest 153 (Pty) Ltd, Essa and Another v Bestvest and Another
2012 (5) SA 497
(WCC) at para 27).
One
of the main shifts between the two dispensations, under the 1973
Companies Act is that, whilst a creditor was entitled to a
liquidation order
prima
facie
,
a judicial management order would be granted in “exceptional
circumstances” whereas under the 2008 Companies Act,
business
rescue is preferred to liquidation. (
Southern
Palace Investments 265 (Pty) Ltd v Midnight Storm Investments
386 (Pty) Ltd
2012 (2) SA 423
(WCC) at paras 21- 22).
[61]
Whilst
judicial management and business rescue differed in a number of
respects, they both provided “
for
the control by a third party of companies that are in severe
financial difficulties and for their temporary reprieve from
creditors’
claims
.”
(
Merchant
West
supra
at para 10)
[62]
Against
this background as well as the fact that for all intents and purposes
it was routine for a judicial management order to
stay proceedings,
as is the case in business rescue proceedings, albeit in the latter
case, by operation of statute, it is sensible
to hold that reference
to ‘judicial manager’ in section 10 of AJRA should be
interpreted to have been replaced by a
‘business rescue
practitioner’ and ‘judicial management’ by
‘business rescue proceedings’.
[63]
That
interpretation is also sensible because with judicial management, in
order to be considered successful, the company must be
brought back
to a state of solvency, whilst with business rescue even if solvency
is not reached, improving the return to be received
by creditors upon
liquidation is also acceptable. In my view, if the Legislature saw
fit to include a more onerous judicial management
system in section
10, why would it exclude a less burdensome business rescue regime, in
the instance where both were aimed at reviving
an ailing company,
notwithstanding
in
different ways?
[64]
It
will however serve the Legislature well to amend section 10 by
expressly replacing reference to judicial manager / judicial
management with business rescue practitioner and business rescue
proceedings in keeping with the introduction of the concept of
business rescue in the 2008 Companies Act.
How
does one deal with the conflict between the two applicable statutes?
[65]
Section
5(4) of the 2008 Companies Act regulates the general interpretation
of that Act
vis
a vis
other statutes. It provides the following:
“
General
interpretation of Act
…
(4)
If there is an inconsistency between any provision of this Act and a
provision of any other national legislation-
(a)
the provisions of both Acts apply concurrently,
to the extent that
it is possible to apply and comply with one of the inconsistent
provisions without contravening the second
; and
(b) to
the extent that it is impossible to apply or comply with one of the
inconsistent provisions without contravening the second-
(i)
any applicable provisions of the-
(aa)
Auditing Profession Act;
(bb)
Labour Relations Act, 1995 (Act No. 66 of 1995);
(cc)
Promotion of Access to Information Act, 2000 (Act No. 2 of 2000);
(dd)
Promotion of Administrative Justice Act, 2000 (Act No. 3 of
2000);
(ee)
Public Finance Management Act, 1999 (Act No. 1 of 1999);
(ff)
Securities Services Act, 2004 (Act No. 36 of 2004);
(gg)
Banks Act;
prevail
in the case of an inconsistency involving any of them, except to the
extent provided otherwise in sections 30(8) or 49(4);
or
(hh)
Local Government: Municipal Finance Management Act, 2003 (Act
No. 56 of 2003); or
(ii)
Section 8 of the National Payment System Act, 1998 (Act No. 78 of
1998).
(ii) the provisions
of this Act prevail in any other case, except to the extent provided
otherwise in subsection (5) or section
118(4).”
(Underlined
for emphasis)
[66]
As
a starting point, section 5(4) requires of the courts to interpret
the provisions of other statutes which are in conflict with
the
provisions of the 2008 Companies Act in a manner which allows for the
inconsistent provisions of the respective statutes to
apply
concurrently to the extent possible without one contravening the
other.
[67]
It
goes without saying that the provisions of section 10 of AJRA and
section 133 of the 2008 Companies Act appear to be in conflict
with
each other. One provides for a stay of proceedings whilst one does
not. In my view, the two prevailing provisions are capable
of being
interpreted concurrently, in a manner suggested in section 5(4) (a)
of the 2008 Companies Act. The answer, in my view,
lies in the timing
of the events sought to be protected by each of the statutes. In
terms of section 10 of AJRA, once maritime
property has been
arrested, it is ring-fenced. It falls under the jurisdiction of AJRA
and must be dealt with in accordance with
that statute. That
ring-fencing cannot be undone by subsequent proceedings, as mentioned
in section 10.
[68]
The
same is true with insolvencies and windings-up, on the other side of
the coin, once those proceedings have commenced, the assets
would
vest on the trustee or under the administration of the liquidator. So
is the case when business rescue proceedings commence,
property is
placed under the control of a business rescue practitioner and out of
the reach of any other persons including creditors
and business
rescue places a moratorium on all legal proceedings. That should,
however, exclude property that has already been
isolated and made a
subject of another jurisdiction. To interpret section 10 as argued by
the respondents will emasculate the section
and render it
ineffective.
[69]
The
approach I advocate, in this regard is, in my view, consistent with
that which was adopted by the Courts in
Rennie
and
Nantai
Princess
,
which read the language of section 10 to limit its application to
maritime property arrests which occurred prior to the winding-up.
In
this case, the application of section 10 would be limited to
pre-business rescue arrests. In other words in keeping with the
manner in which that section has been applied by the Courts in the
cases I have referred to, only proceedings in respect of maritime
property, whose arrest occurred prior to the property owner being
placed under business rescue would not be stayed.
[70]
Those
proceedings that do not involve maritime property belonging to the
company under business rescue or maritime property arrested
post
business rescue would be unaffected by section 10 of the AJRA. They
would be stayed by operation of section 133 of the 2008
Companies
Act.
[71]
In
my judgment that interpretation is sensible and it resolves the
conflict between the two statutes, without disregarding the other.
It
allows section 133 to continue in respect of all conventional claims
instituted against the company and those other claims excluded
from
the operation of section 10 referred to above, whilst recognising
that maritime assets under arrest and maritime proceedings
fall
within the purview of section 10 of AJRA and outside of section 133
of the 2008 Companies Act. This is a sensible contemplation
of what
would have been the Legislature’s intention, at all times. This
approach will not hinder the objectives that come
with the business
rescue regime.
[72]
Stay of proceedings in
the Companies Act is not a new occurrence. In terms of section 359(1)
of the 1973 Companies Act legal proceedings
were suspended when a
Court had made an order for the winding-up of a company. They could
also be stayed by a Court before the
winding-up order was granted in
terms of section 358 of that Act. It has also been mentioned that in
judicial management Courts
regularly directed that proceedings be
stayed.
Comparative
jurisdictions
[73]
In
establishing its business rescue system South Africa learnt from
other countries that already had such similar practices in place.
It
appears that the United States, Canada, the United Kingdom have
corporate rescue mechanisms, with Australia having a system
with
features similar to the South African business rescue regime, though
with some differences. (See
Exploring
Various Business Rescue Practices in South Africa, 2017 Southern
African Accounting Association, Naidoo Patel & Pachia.
)
[74]
All
these countries provide for appointment of third parties to take
control of
the
companies in question.
[75]
As
to maritime law, Binnie J, in the Canadian judgment of
Holt
Cargo Systems Inc. v ABC Containerline N.V. (Trustee of)
2001 SCC 90
; ,
[2001]
3 S.C.R 907
at 923-924 referred to this
area
of the law as one of the earliest that required international
cooperation in the regulation of the rights and obligations of
its
participants. He held the following:
“
Seamen,
salvors, ship chandlers, repairers and other supplies of goods and
services to the ship in foreign ports required some assurance
of
payment.
They looked to the ship. Common rules were essential
because suppliers dealt with ships from many countries and Masters
found themselves
in distant ports where communications with distant
shipowners were slow and unreliable. In maritime commerce ‘rules
of practical
convenience commanding general assent are a virtual
necessity’
Loane and Baltser v Estonian State Cargo
[1949] S.C.R 530
per Rand J.
Practicality required an in
rem
proceeding against a ship as distinguished from an in
personam
action against the ship owner. The need for predictability and
uniformity was so strong that even the common law courts, ever
protective of their own ways, ceded jurisdiction to specialised
courts of admiralty applying a largely international law of maritime
commerce
.”
(Underlined
for emphasis)
[76]
Most
jurisdictions seem to allow for
in
rem
proceedings by way of arrest. The
in
rem
interest
took many forms, one of which is maritime
lien
.
A
lien
goes with the ship everywhere. According to Binnie J, in
Holt
supra at 925
,
“t
he
reason for this privileged status for maritime lien holders is
entirely practical. The ship may sail under a flag of convenience.
Its owners may be difficult to ascertain in a web of corporate
relationships (as indeed was the case here, where initially Holt
named the wrong corporation as ship owner). Merchant seamen will not
work the vessel unless their wages constitute a high priority
against
the ship. The same is true of others whose work or supplies are
essential to the continued voyage. The Master may be embarrassed
for
lack of funds, but the ship itself is assumed to be worth something
and is readily available to provide a measure of security.
Reliance
on that security was and is vital to maritime commerce. Uncertainty
would undermine confidence. The appellant Trustees’
claim to
“international comity” in matters of bankruptcy must
therefore be weighed against competing considerations
of a more
ancient and at least equally practical international system —
the law of maritime commerce
.”
[77]
It
appears to be common amongst jurisdictions with similar dispensations
as South Africa for insolvency proceedings not to remove
assets under
maritime arrest. It also seems to be the norm that an arrest would
serve to remove the arrested asset both from any
stay of proceedings
arising as a result of the insolvency and from the general ranking
accorded in insolvency, keeping the asset
for ranking in accordance
with the arresting jurisdiction’s admiralty ranking. (See
A
rrests,
Maritime Liens and Cross-border Insolvency
3
November 2017, presented at the World Congress of Ocean 2017
Shenzhen, China. See also
The
Ship “Sam Hawk” v Reiter Petroleum Inc
(2016)
246 FCR 337
(Australia);
Re
Atlas Shipping A/S
(S.D.N.Y 2009) (US); and
Holt
Cargo Systems Inc. v ABC Containerline N.V. (Trustee of)
2001 SCC 90
; ,
[2001]
3 S.C.R 907
(Canada)).
[78]
As
in South Africa, maritime property which has been arrested falls
outside of stay provisions in the relevant insolvency and/or
liquidation laws.
[79]
It
is clear therefore that the admiralty jurisdiction is built upon a
privilege conferred upon maritime claims. If it were
to be
found that business rescue proceedings are not part of section 10 at
all, that could have undesirable consequences.
In view of the
relatively easy manner in which to place a company under business
rescue, companies whose properties have been arrested
and who in many
instances encounter financial difficulties, would easily place
themselves under business rescue proceedings, with
the hope of
avoiding the AJRA consequences. This, in my view, may lead to
absurdity particularly in cases where the vessels have
been arrested
for months, thus eroding the very essence of section 10 in particular
and the core edifice of AJRA in general. This
could lead to abuse of
process by ship-owners who have no hope of rehabilitating the company
but wish to stall the process entailed
in AJRA.
[80]
I
am alive to the fact that unlike judicial management, here we are
dealing with business rescue which is invoked before insolvency,
it
is however widely recognised that it replaced judicial management
which was seen to be less effective. It seems to me, as I
have found,
the outcome is the same insofar as it places property of a company in
the hands of a third party. It is worthy to note
that Hofmeyr, G in
Admiralty
Jurisdiction Law and Practise in South Africa
,
2
nd
Edition at pages 78-79, seems to have taken it as foregone that
business rescue has “automatically” replaced judicial
management for the purposes of section 10.
[81]
I
therefore find that section 10 of AJRA applies to a business rescue
practitioner/business rescue proceedings in the same extent,
mutatis
mutandis
,
as it did to a judicial manager/judicial management.
Should
the sale of mfv Polaris be authorised?
[82]
Returning
to whether the sale should be authorised: Considerations that the
Court looks at in deciding whether the arrested property
should be
sold vary from case to case. It has been held that where property to
be sold is a vessel, relevant considerations would
include factors
such as: “
the
duration of time the property would remain under arrest if the order
for its sale is not made; any deterioration which the vessel
would
likely to suffer during that period; the risk of harm to the vessel
while under arrest; the value of the vessel in relation
to the amount
of the claims against it; the prospects that the claims would be
successful; the costs and expenses which would have
to be incurred to
maintain and preserve the vessel while under arrest; the loss of
revenue due to the enforced idleness of the
vessel; the state of the
market for second hand vessels and the prospects that a realistic
price would be obtained at a forced
sale
.”
(See
Bouygues
Offshore and another v MT “TIGR”, her owners and all
other parties interested in her, and others
[1996] 2 All SA 176
(C) quoting at 178 with approval an unreported
judgment of
Dias
Compania Naviera SA v MV Al Kaziemah and Others
Case No. A77/89 – D and CLD).
[83]
The
applicant has advanced for the sale of the mfv Polaris by public
auction. The facts in this regard were set out earlier in this
judgment. The respondents have not given any good reason why
the sale should not be authorised. The vessel has been under
arrest
since 28 September 2017, without it being maintained, without a crew
and undoubtedly costs are continuously being incurred
to maintain it
for preservation. The applicant provided the Court with recent
photographs of the vessel in reply showing some rust
on the outside.
In my view, it is without question that a vessel that has been
stationary for months is susceptible to erosion
which ultimately may
affect its value. The value of the claims, excluding the erstwhile
crew members’ portion is said to
be almost 60% of the lowest
estimated value of the vessel. The vessel is no longer insured which
poses a significant risk to the
Port where it is kept. It is to the
advantage of all concerned that it be sold as contended for by the
applicant.
[84]
It must be stated that
even if I were to find that these proceedings were stayed by
operation of section 133 of the 2008 Companies
Act that
would not result in the release of the ship from arrest. The ship
will remain under arrest and the result would be its further
deterioration. This also supports the view that this Court has taken
in its interpretation of the relevant statutes. The vessel
will not
be available to be used to fish and no proceeds would be available to
pay the creditors. A number of creditors including
employees intend
advancing their claims. There is a likelihood that the third
respondent might end up being placed in liquidation.
[85]
The respondents, in any
event, have not demonstrated any reasonable prospect of turning the
business around. They are hoping to
get an arrested ship into the
hands of a business practitioner (something they cannot do without it
being released), whom it is
hoped would get it trading again.
How they would do that is not shown. Why they could not do so
previously is also not explained.
The applicant’s view that the
third respondent’s conduct, by placing itself under business
rescue shortly before the
hearing of the final application, smirks of
abuse is not implausible.
[86]
I thought about whether
this Court should have rather disposed of this matter only on the
basis that the business rescue decision
was not
bona
fide
, my sense was
that that was not sufficiently canvassed before me and that that was
not the focus of the case presented by the parties
per
se
. The case was
argued mainly on the point
in
limine
.
[87]
Returning
to the condonation application for the late filing of the answering
affidavit, the explanation given in respect thereof
is sorely
inadequate. It has also not been compensated for by the merits of the
case. There is, therefore, no point in condoning
its lateness,
although much of it rested on the point
in
limine
which I have extensively dealt with.
[88]
The
applicant seeks costs on attorney and client scale on the basis that
it is practise to
do
so in these kinds of matters. It relies on the decision of
Brooks
v the Taxing Master
[1960] 3 All SA 160
at 165, where the Court considering what scale
costs should be awarded in judicial management proceedings as a
matter of statutory
interpretation addressed instances of insolvency
and sequestration generally, and found that a person approaching a
Court for such
an order did so not only in their own interest, but in
the interest of all creditors and it seemed “
equitable
that such person should, subject to the limits of attorney and client
taxation, receive a full indemnity for his costs.”
I
see no reason why same should not be found in the instant matter.
[89]
For all these reasons,
the application should succeed.
[90]
I therefore make the
following order:
1.
Condonation for the late
filing of the answering affidavit is refused.
2.
The application succeeds
with costs on attorney and client scale.
3.
The
Rule
Nisi
granted on 30
January 2018 by Davis AJ and duly extended is made final.
_____________________
N P BOQWANA
Judge
of the High Court
APPEARANCES
For
the Applicant: Adv G. Brown
Instructed
by: DJ Dickson and Associates, Durban, C/O Allan Goldberg, Cape Town
For
the Respondents: Adv T. Mayosi
Instructed
by: CMB Attorneys, Bellville, C/O Basson and Pietersen Inc., Cape
Town