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[2012] ZAGPJHC 270
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Pellow NO and Others v Master of the High Court Johannesburg and Others (21296/11) [2012] ZAGPJHC 270 (9 February 2012)
IN THE
SOUTH GAUTENG HIGH COURT JOHANNESBURG
(REPUBLIC
OF SOUTH AFRICA)
CASE NO:21296/11
DATE:2012/02/09
In the
matter between:-
PELLOW
N.O. ALLAN
DAVID
..............................................................
First
Applicant
MOHAMED
N.O. MUSTAFA
…............................................................
Second
Applicant
(in
their capacities as the former joint
liquidators
of MKB Aviation (Pty) Limited)
PELLOW
N.O. ALLAN DAVID
…..........................................................
Third
Applicant
MAKHESE
N.O. EPHRAIM
…...............................................................
Fourth
Applicant
(in
their capacities as the former joint
liquidators
of MKB Cabinetry (Pty) Limited)
PELLOW
N.O. ALLAN DAVID
….........................................................
Fifth
Applicant
(in
their capacities as the former joint
liquidators
of Centrifugal High Trading 304 (Pty) Limited)
PELLOW
N.O. ALLAN DAVID
…........................................................
Seventh
Applicant
MOTALA
N.O. ENVER MOHAMED
…................................................
Eight
Applicant
MOLOTO
N.O. LEBOANG MICHAEL
….............................................
Ninth
Applicant
MAYO
N.O. HENRY Tenth Applicant
(in
their capacities as the former joint
liquidators
of MKB Property Developments (Pty) Limited)
PELLOW
N.O. ALLAN
DAVID
............................................................
Eleventh Applicant
MOTALA
N.O. ENVER MOHAMED
…...............................................
Twelfth
Applicant
MASUTHA
N.O. LUCAS
….................................................................
Thirteenth
Applicant
(in
their capacities as the former joint
liquidators
of MKB Property Holdings (Pty) Limited)
and
THE
MASTER OF THE HIGH COURT JOHANNESBURG
….........
First
Respondent
MOLYNEUX-KILLIK,
JONATHAN MICHAEL
…................................
Second
Respondent
MOLYNEUX-KILLIK
N.O. JONATHAN MICHAEL
…........................
Third
Respondent
MOLYNEUX-KILLIK
N.O. JOHN PETER
…......................................
Fourth
Respondent
MOLYNEUX-KILLIK
N.O.,
SONIA
.......................................................
Fifth
Respondent
(the
third, fourth and fifth respondents are cited in their
capacities
as the joint trustees of the Molyneux-Killik Family Trusts)
J U D G M E N T
WILLIS
J:
[1] The
applicants seek the following relief, viz. an order:
1. Reviewing
and setting aside the decision of the first respondent to remove:
1.1 the
first and second applicants as joint liquidators of MKB Aviation
(Pty) Limited (in liquidation);
1.2 the
third and fourth applicants as joint liquidators of MKB Cabinetry
(Pty) Limited (in liquidation);
1.3 the
fifth applicant as liquidator of Centrifugal High Trading 304 (Pty)
Limited (in liquidation);
1.4 the
seventh, eighth, ninth and tenth applicants as the joint liquidators
of MKB Property Developments (Pty) Limited (in liquidation);
1.5 the
eleven, twelve and thirteenth applicants as the joint liquidators of
MKB Property Holdings (Pty) Limited (in liquidation).
2. That:
2.1 the
first and second applicants be reinstated as the joint liquidators of
MKB Aviation (Pty) Limited (in liquidation);
2.2 the
third and fourth applicants be reinstated as the joint liquidators of
MKB Cabinetry (Pty) Limited (in liquidation);
2.3 the
fifth applicant be reinstated as the liquidator of Centrifugal High
Trading 304 (Pty) Limited (in liquidation);
2.4 the
seventh, eighth, ninth and tenth applicants be reinstated as the
joint liquidators of MKB Property Development (Pty) Limited
(in
liquidation);
2.5 the
eleventh, twelfth and thirteenth applicants be reinstated as the
joint liquidators of MKB Property Holdings (Pty) Limited
(in
liquidation).
[2] The
applicants also seek a costs order against the respondents. The
State Attorney has tendered the costs of the first respondent,
including the cost of senior counsel on a party and party basis.
[3] The
first respondent is the Master of the High Court. The first
respondent had an application before him, brought by Mr
Molyneux-Killik
for the removal of these liquidators. For the sake of
convenience, I shall hereinafter refer to Mr Molyneux-Killik as “Mr
Killik”. The Master granted an order removing the respondents
from office as joint liquidators of the MKB Group, and also
making an
order that "the joint liquidators are hereby removed as the
liquidators of AHI".
[4] The
sixth, eighth and twelfth applicants do not persist with this
particular application. The attorneys acting for the applicants
have
withdrawn as the attorneys acting for Mr Motala N.O. It is not quite
clear what his status is but I think I may fairly take
judicial
notice that there had been a lot of publicity relating to Mr Motala
in the media, and I think at this stage I may safely
make an order
that does not have regard to him.
[5] The
application was brought relying on the provisions of sections
379(1)(b) and (e) of the Companies Act61 of 1973. Section
379(1)(b)
of the Act provides that the Master may remove a liquidator if he
fails "to perform satisfactorily any duty imposed
upon him by
this Act or to comply with the lawful demand of the Master or
Commissioner appointed by the Court under this Act".
Section
379(1)(e) provides that the Master may remove a person as liquidator
if "in his opinion the liquidator is no longer
suitable to be
the liquidator of the company concerned".
[6] There
is, with respect, much smoke and mirrors in this particular
application. At the end of the day, there is only one material
allegation upon which the Master applied his mind, and upon which he
based his decision, and that is that Mr Pellow, the first
applicant
who is a director of Westrust (Pty) Limited, (which is a wholly owned
subsidiary of Investec Bank Limited, the major
creditor against all
of the companies concerned having been placed in liquidation, namely
the MKB Group) be removed as a liquidator
of these companies in
liquidation.
[7] Mr
Killik, the applicant in the matter before the Master, was NOT a
creditor of any of the companies in liquidation but had
been a
director of these companies.
[8]
Without something more, this allegation (which is true) that Mr
Pellow, is a director of Westrust (Pty) Limited which, in turn,
is a
wholly owned subsidiary of Investec Bank Limited, the major creditor
against all of the companies in the MKB Group having
been placed in
liquidation is not sufficient to justify the conclusion that a person
is not suited to be a liquidator. There has
been no allegation of
misconduct or failure to satisfactorily perform duties on the part of
Mr Pellow or any other liquidator.
[9] I
agree with the judgment of Bertelsmann J, in a similar matter, namely
Allandale Planters CC and Another v The Master &
Another TPD
(case number 20663-98) where he said:
"I do
not believe that the fact that West Trust is Investec's wholly owned
subsidiary, is in itself sufficient to conclude
that the second
respondent is unduly influenced by the major creditor."
He went on
to say:
"It
must be remembered that the principal creditors always control or at
least influence the appointment and conduct of liquidators
and
trustees in insolvencies, simply because of the fact that they are
the principal creditors and are consequently by law, empowered
to
exert the most influence upon the course of the liquidation."
[10] My
brother Spilg, in a recent as yet unreported judgment (case number
2010/22522), in which Mr Pellow was also an applicant
against the
Master of the High Court as well, expressed himself in similar terms.
This judgment has been reported as Pellow N.O.
& Others v The
Master of the High Court & Others
2012 (2) SA 491
GSJ. Broadly,
I associate myself with the sentiments expressed by Spilg J in that
judgment.
[11] I
wish to emphasise that it should be understood, especially by the
Master in future cases of this nature, that a liquidator
is highly
regulated by law, and that the scope for undetected malpractice is
limited indeed. The law governs the position regarding
secured,
preferent and concurrent creditors.
[12] It is
important in a liquidation that the actual process of liquidation
should be proceeded with expeditiously and competently.
This would,
no doubt, explain why Investec would wish to secure "their man"
in the position. There is nothing wrong
in that.
[13] A
situation could arise whereby a corrupt liquidator disallows a claim
by a creditor in order to give advantage to his client,
which is
another creditor. But one must remember (and this is the great
advantage of a developed system of law) that the facts
would speak
for themselves. In other words, where a liquidator disallows a
perfectly valid claim in order to give advantage to
a friend, a
client of his own, et cetera that fact would readily become exposed.
Of course, there would then be the scope not only
for the removal of
the liquidator but also for other serious consequences to ensue.
[14] I add
this little homily: far too much “smoke and mirrors” is
apparent in court applications in our country at
the moment. Far too
often irresponsible allegations are made when the law, if properly
applied, would always protect people against
malpractice, especially
in a situation such as the present.
[15] I
therefore conclude by referring to the well known case of Sidumo and
Another v Rustenburg Platinum Mines Limited and Others
2008 (2) SA 24
(CC), especially at paragraph [110], that the decision of the first
respondent was a decision which no reasonable decision maker
would
reach in the circumstances. The applicants are entitled to the
relief that they seek. Save insofar as the notice of motion
relates
to the sixth, eighth and twelfth applicants, the relief is granted in
terms of prayers 1 and 2 of the notice of motion
dated 02 June 2011.
The first, second, third, fourth and fifth respondents are jointly
and severally liable, the one paying the
other to be absolved, to pay
the applicant's costs in this application, including all costs
reserved to date.
[16]
Before I adjourn, I record that I think it might avoid problems of
transcription if a draft order to be marked “X”
were to
be typed up during the lunchtime, reflercting precisely what I have
ordered. I shall then, after lunch, at 14:00, simply
say an order is
made in terms of the draft. But, to summarise, the relief is that I
grant is an order in terms of 1 and 2 of the
notice of motion,
excluding a referral to the sixth, eighth and twelfth applicants.
The costs order would be as I set out above.
The order relating to
costs will refer to senior counsel. The draft marked “X”
should reflect that.
Applicants’
Counsel: Adv. M. M. Antonie SC
Applicants’
Attorneys: Brooks & Brand Inc.
Respondents’
Counsel: Adv. J. Kaplan (with him, Adv. W. Bank)
Respondents’
Attorneys: Hirschowitz Flionis Attorneys
Date of
hearing: 9 February 2012
Date of
Judgment: 9 February 2012