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[2011] ZAGPJHC 174
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Boseme and Others v Rogers (2010/40447) [2011] ZAGPJHC 174 (23 November 2011)
REPORTABLE
IN THE SOUTH GAUTENG HIGH
COURT (JOHANNESBURG)
Case Number:
2010/40447
Appeal Number: A5029/2011
Date of Appeal: 21 November 2011
DATE:23 November 2011
In the matter between:
EMERY
BOSEME
….........................................................
1
st
Appellant
MICHAEL
DAVID HINES
...............................................
2
nd
Appellant
GERALD
IVAN MATTHEWS
........................................
3
rd
Appellant
MERVIN
NAIDOO
...........................................................
4
th
Appellant
GAVIN MARK
RUSSEL
….............................................
5
th
Appellant
And
GRAHAM
VINCENT ROGERS
.......................................
Respondent
JUDGMENT
C. J.
CLAASSEN J
:
This matter
comes before us on appeal with leave from the court
a
quo
against a judgment handed down by S. J. Bekker AJ. The latter
granted summary judgment in favour of the respondent against all
the
appellants jointly and severally for the payment of the amount of
R825 000.00 plus interest and costs. Only the second, third
and
fifth appellants are before court today.
The
respondent instituted action against the appellants based on an
allegation that the close corporation, L’Orac Placement
Enterprises CC, of which they were members had been finally
deregistered.
1
As such and pursuant to the provisions of section 26 of the Close
Corporation Act 69 of 1984, the appellants became liable jointly
and
severally for the outstanding liabilities of the corporation. The
appellants filed an affidavit opposing summary judgment
wherein, in
short, it was alleged that neither the close corporation nor
themselves received any notification from the registrar
of companies
declaring the close corporation deregistered.
The court
a
quo,
relying on
Mouton
v Boland Bank Ltd
2001 (3) SA 877
(SCA), held that the personal liabilities of the
appellants remained intact even though the close corporation may
later become
reregistered. The court
a
quo
found that the matter of
Firstrand
Bank Ltd v Davis and Others
2004 (1) SA 31
(NPD) was not applicable to the facts of the present
case.
The simple
question is therefore whether or not the allegations in the
affidavit resisting summary judgment were sufficient for
purposes of
disclosing a defence which would have entitled the court to refuse
summary judgment. That would necessarily require
an evaluation as to
whether the
Mouton
case or the
Davis
case applied to the facts.
In my view
the
Mouton
case does not apply to the facts of the present case. In the
Mouton
case it was accepted that a notification by the registrar was duly
sent in terms of section 26(1) and received by the corporation
and
its members. That case was mainly concerned with the proper
interpretation of section 26(7). In the present matter the defence
is addressed to the very question whether or not a proper
notification was sent by the registrar in terms of section 26(1) of
the Close Corporation Act. The facts in this matter are therefore
more attuned to those in the
Davis
matter than in the
Mouton
matter.
Section 26(1) reads as follows:
“
(1) If the Registrar has
reasonable cause to believe that a corporation is not carrying on
business or is not in operation, he shall
serve on the corporation at
its postal address a letter by certified post in which the
corporation is notified thereof and informed
that if he is not within
60 days from the date of his letter informed in writing that the
corporation is carrying on business or
is in operation, the
corporation will, unless good cause is shown to the contrary, be
deregistered.”
The defence
relied upon in the affidavit resisting summary judgment was directed
at the non-compliance with the provisions of
section 26(1). In
paragraph 3 thereof the following is stated:
“
3.
We had no knowledge thereof
that the corporation had been de-registered and, to this day, have
no knowledge as to the identity
of the entity who de-registered the
corporation.
In terms of Section 26 of the
Close Corporation’s Act 69 of 1984 (‘the Act’)
and particularly the clauses
referred to hereunder, we intend to
either join the Registrar of Close Corporations to this action, or,
to launch an application
for a declaratory order to the effect that
the purported de-registration of the corporation was irregular and,
will pray for
an order that the purported de-registration be set
aside.
…
The provisions of the Act are
peremptory as, the Registrar of Close Corporations is obliged to
serve on the corporation at its
postal address a letter by
certified post wherein the corporation is notified of the
Registrar’ intention.
Neither the
corporation nor any of its members received notice either by
certified post or by registered post of the Registrar’s
intention and, for that reason it was impossible for us to address
notices to the Registrar advising the Registrar
that
the corporation was trading
.”
It seems
quite apparent that for a corporation to be deregistered, section
26(1) has to be complied with. It is only when the
hurdle of section
26(1) is crossed that the provisions of section 26(5)
2
and/or (7)
3
come into operation. Without proper notice to a corporation served
by the registrar in terms of section 26(1), the rest of the
section
cannot apply. Section 26(5) which provides for personal liability of
the members if the corporation is deregistered while
still having
outstanding liabilities, only comes into operation if the mechanism
provided for in section 26(1) was complied with.
It therefore
follows that the defence disclosed in the affidavit opposing summary
judgment is a valid defence to the alleged deregistration
of the
corporation as it appears from the CIPRO document attached to the
particulars of claim as annexure “POC2”.
In my view,
that defence, if successful, would restore the corporation with its
limited liability and thus protect the members
from personal
liability. Personal liability cannot occur if section 26(1) had not
been complied with. It goes without saying
that should the registrar
for whatever reason deregister a company without complying with
section 26(1) at all, that such purported
deregistration would
constitute a nullity. This must be so because it is only upon
receipt of a section 26(1) notification that
the members of a
corporation can defend themselves against deregistration. If no such
notification was issued or not received
by the corporation, then
similarly the members would be unable to defend themselves against
the serious consequences of deregistration.
It was submitted by counsel for
the respondent that the affidavit should have elucidated what
attempts the appellants had made
to establish how and why their
corporation was deregistered. I cannot agree with this submission.
Such attempts constitute evidence
which may subsequently be relevant
at the trial.
It was also
submitted that no details were supplied as to whether and to what
extent the corporation was indeed trading. At the
stage of a summary
judgment application full details of the corporation are unnecessary
in light of the affirmative allegation
“that the corporation
was trading.”
4
Finally, it
was argued on behalf of the respondent that the deregistration as an
administrative act, rightly or wrongly issued,
remained in place
until reviewed and set aside. Since the appellants have not yet
successfully applied for its review, they did
not disclose a defence
sufficient to resist summary judgment. In my view, this argument
falls to be rejected in view of the allegations
contained in
paragraph 3.2 of the appellants’ affidavit. It records the
appellants’ intention to do just that.
For the
aforesaid reasons I am of the view that the court
a
quo
misdirected itself in regard to the proper interpretation and
application of section 26(1) and that the appeal should therefore
succeed.
I make the following order:
The appeal
is upheld with costs.
The order
made by the court
a
quo
is set aside and substituted with the following:
“
1. Summary judgment is
refused.
2. Leave is granted to the
respondents to defend the action.
3. Costs will be costs in the
cause.”
DATED AND
SIGNED THE 23
RD
DAY OF NOVEMBER 2011 AT JOHANNESBURG
_______________________
C. J. CLAASSEN
JUDGE OF THE HIGH COURT
I agree
______________________
R. E. MONAMA
JUDGE OF THE HIGH COURT
I agree
_________________________
M. BASSLIAN
ACTING JUDGE OF THE HIGH
COURT
Counsel for the Appellants: Adv
G. H. Meyer
Counsel for
the Respondent: Adv K. Ioulianou
Attorney for the Appellants:
Fluxmans Attorneys
Attorney for the Respondent:
Ramsay Webber Attorneys
Appeal argued
on
:
21 November 2011
1
See Annexure “POC2”, p 14 of the
record
2
Section 26(5) reads as follows:
“(5) If a corporation is deregistered while having outstanding
liabilities, the persons who are members of such corporation
at the
time of deregistration shall be jointly and severally liable for
such liabilities.”
3
Section 26(7) reads as follows:
“(7) The Registrar shall give notice of the restoration of the
registration of a corporation in the Gazette, and as from
the date
of such notice the corporation shall continue to exist and be deemed
to have continued in existence as from the date
of deregistration as
if it were not deregistered.”
4
See para 3.5 of the affidavit resisting summary
judgment