About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2015
>>
[2015] ZASCA 83
|
|
Reddy v Absa Bank Ltd and Others (20096/2014) [2015] ZASCA 83 (28 May 2015)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
reportable
Case
No: 20096/2014
In
the matter between:
P
REDDY
............................................................................................................................
APPELLANT
and
ABSA
BANK
LTD
..............................................................................................
FIRST
RESPONDENT
COLIN
MARK POOLE
NO
........................................................................
SECOND
RESPONDENT
NICOLA
CRONJE
NO
....................................................................................
THIRD
RESPONDENT
Neutral
citation:
Reddy v Absa Bank
(20096/2014)
[2015] ZASCA 83
(28 May 2015).
Coram:
Lewis,
Ponnan and Saldulker JJA and Van der Merwe and Mayat AJJA
Heard:
21 May 2015
Delivered:
28 May 2015
Summary:
The winding up of a close corporation
during the period of deregistration is automatically retrospectively
validated upon reinstatement
in terms of
s 82(4)
of the
Companies Act 71 of 2008
.
ORDER
On
appeal from:
KwaZulu-Natal Division of
the High Court, Durban (Koen J sitting as court of first instance):
reported
sub nom Missouri Trading CC v
Absa Bank
2014 (4) SA 55
(KZD).
The appeal is dismissed with costs.
JUDGMENT
Van
der Merwe AJA (Lewis, Ponnan and Saldulker JJA and Mayat AJA
concurring):
[1]
As a result of its failure to submit annual returns, Missouri Trading
CC (Missouri) was deregistered in terms of s 82(3)
(a)
of the Companies Act 71 of 2008 (the Act) on 29 July 2011. It is
common cause that the registration of Missouri was reinstated
in
terms of s 82(4) of the Act on 18 April 2013. (These provisions
of the Act are applicable to close corporations in terms
of s 26
of the Close Corporation Act 69 of 1984). The issue in this appeal is
whether the corporate activities of Missouri,
during the period of
its deregistration, had been validated upon its reinstatement.
[2]
On 2 August 2011, the first respondent launched an application for
the provisional winding up of Missouri. Despite opposition,
a
provisional winding up order was granted on 31 May 2012. A final
winding up order was made on 27 August 2012. The second and
third
respondents were appointed as the liquidators of Missouri and they
commenced with the winding up of its affairs in terms
of the Act.
[3]
Only at this stage did the deregistration of Missouri come to the
knowledge of the first respondent and to that of the appellant,
the
sole member of Missouri. The appellant consequently launched an
application in the KwaZulu-Natal Division of the High Court,
Durban
for an order declaring that the winding up of Missouri was void and
of no force and effect. The application was based solely
on the
ground that when the provisional and final winding up orders and the
appointment of the second and third respondents as
liquidators were
made, Missouri had been deregistered.
[4]
The first respondent opposed the application and filed a
counter-application. It essentially asked for a declarator that the
winding up of Missouri was valid in all respects and of full force
and effect. The counter-application was in turn based only on
the
contention that the reinstatement of Missouri operated
retrospectively.
[5]
The High Court (Koen J) dismissed the application of the appellant
and granted the declarator sought by the first respondent.
It is
clear that the fate of the appeal depends on whether the
reinstatement of Missouri retrospectively validated the corporate
activities thereof during the period of its deregistration. This
question was decisively settled by this court in
Newlands
Surgical Clinic v Peninsula Eye Clinic
[2015] ZASCA 25
(20 March 2015). In para 29 of
Newlands
,
Brand JA stated that s 82(4) of the Act ‘has automatic
retrospective effect, not only in revesting the company with
its
property but also in validating its corporate activities during the
period of its deregistration’. It is accordingly
not necessary
to analyse the reasoning of the court a quo.
[6]
Upon its reinstatement the winding up of Missouri had therefore been
automatically validated retrospectively in all relevant
respects. It
follows that the appeal is devoid of merit.
[7]
In supplementary heads of argument, the attorney for the appellant
appeared to attempt to seek relief in terms of s 83(4)
of the
Act, based on factual allegations put forward in the heads of
argument. It suffices to say that this is wholly impermissible.
[8]
The appeal is dismissed with costs.
_______________________
C
H G VAN DER MERWE
ACTING
JUDGE OF APPEAL
APPEARANCES:
For
Appellant: C Lenasch
Instructed by:
Lenasch Attorneys, Durban
Honey
& Partners, Bloemfontein
On
behalf of first, second and third respondents: A Stokes SC
Instructed
by:
Johnston
& Partners, Durban
Phatshoane
Henney Inc, Bloemfontein