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[2010] ZAGPPHC 219
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Antalis South Africa (Pty) Ltd v Fastpulse Trading 368 (Proprietary Limited) and Another (63920/2009) [2010] ZAGPPHC 219 (9 December 2010)
NOT
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
CASE
NO: 63920/2009
DATE:
09/12/2010
In
the matter between:
ANTALIS
SOUTH AFRICA (PTY)
LTD
........................................................
Applicant
and
FASTPULSE
TRADING 368 (PROPRIETARY LIMITED)
...).................
.
First
Respondent
Reg.
No. 2002/011032/07
KOTZEE,
ANNA
MARIE
...
............................................................................
Second
Respondent
JUDGMENT
Delivered
9 December 2010
RDCLAASSEN
J:
1.
The
Applicant did business with Jakaranda Drukkers (Pty) Ltd(Jakaranda)
as co-traders, and Applicant sold goods to Jakaranda. The
latter did
not and cannot pay its debt of approximately R4,8 million. First
Respondent, represented by Mr Coetzee, then entered
into a deed of
suretyship on behalf of Jakaranda in favour of the Applicant.
Applicant also had a notarial bond over Jakaranda's
moveable goods.
Applicant and Jakaranda had also entered into an amortisation
agreement in respect of certain goods bought by Jakaranda.
When
Jakaranda not did pay, a new payment plan was agreed to. In the
meantime Jakaranda stopped trading. When Applicant heard of
it, it
cancelled the amortisation agreement, and in terms of the notarial
bond, attached certain moveables, and sold some of them
at an
auction.
2.
At
an earlier stage, Jakaranda sold a game farm, its only asset, to a
third party. Applicant obtained a provisional order that the
purchase
money be paid into Second Respondent's trust account, pending this
(anti dissipation) interdict, or any further actions
that may have
had to be instituted. This is the return date of that provisional
order. Jakaranda has also been liquidated in the
meantime.
3.
The
main issues stem from the fact that both First Respondent and
Jakaranda, are owned by the Shawaal Trust (the trust), in the
sense
that the trust is the registered shareholder of both. The directors
of the two companies were basically the same as the trustees,
with
certain exceptions:
Jakaranda:
Directors: P H Coetzee
D
C Coertzee
W
P Exall Fastpulse: Directors: P H Coetzee
D
C Coetzee Shawaal Trustees: P H Coetzee
D
C Coetzee
W
J Raubenheimer
4.
Three
issues arose from these facts, which first respondent put up as
defences:
4.1
The
validity of the suretyship, because all three
trustees
did
not sign it;
4.2
whether
sec 226 of the Companies Act 61 of 1973, was transgressed, in the
sense that one company gave assistance to another where
one or more
director or member has a controlling interest;
4.3
Whether
the saie prices of the goods sold at the auction, were proper and/or
fair and reasonable.
5.
VALIDITY
OF THE SURETYSHIP
First
Respondent's first defence is that the trust could not
de
jure
sign
the suretyship, because all three trustees did not sign it. Since the
trust is not an incorporated body, and cannot hold property
eo
nomine,
only
the trustees could hold the property, as trustees, and therefore they
had to sign the suretyship, as trustees.
6.
Section
103(3) of the Companies Act 61 of 1973 states that the
person
in
whose name the share/s are registered, shall be
deemed
to be the shareholder. The Companies Act does not define a
person.
It
is trite that a shareholder need not be the owner of the shares, but
can hold it as agent or as nominee. The Interpretation Act,
33 of
1957, deals with this issue. Sections 1 and 2, as far as is relevant,
states as follows:
1.
Application
of Act.—The provisions of this Act shall apply to the
interpretation of every law (as in this Act defined) in
force, at or
after the commencement of this Act, in the Republic or in any portion
thereof, and to the interpretation of all by-laws,
rules, regulations
or orders made under the authority of any such law, unless there is
something in the language or context of
the law, by-law, rule,
regulation or order repugnant to such provisions or unless the
contrary intention appears therein.
2.
Definitions.—The
following words and expressions shall, unless the context otherwise
requires or unless in the case of any
law it is otherwise provided
therein, have the meanings hereby assigned to them respectively,
namely—
"person"
includes—
(a)
any
divisional council, municipal council, village management board, or
like authority;
(b)
any
company incorporated or registered as such under any law;
(c)
any
body of persons corporate or unincorporate;
From
this definition it is clear that
person
includes
a body of persons such as the trustees. I can thus not see why they
cannot be represented by the trust as the shareholder.
7.
It
was also argued that since one of the trustees at the time
(Raubeheimer), did not partake in the decision to grant the
suretyship,
the trust did not act unanimously, and therefore the
suretyship is also invalid. It is however common cause that the trust
deed
specifies that all decisions of the trust shall be taken by a
majority of trustees. Since two of the trustees took the decision,
it
was a lawful decision. At the end of the day, it was common cause
that the whole issue (on this point) stands or falls on the
question
whether the trust is
"the
shareholder"
or
whether the trustees are the
shareholders.
It
thus means this defence must fail.
8.
A
further defence is based on Section 226 of the Companies Act, 61 of
1973. This section prohibits a company from giving credit
and other
facilities, where basically the same member and/or directors are in
control. Since the member/directors of First Respondent
and Jakaranda
are basically the same, and also so controlled, it is alleged that
that makes the whole transaction void. The relevant
portions of the
section reads as follows:
226.
Prohibition of loans to, or security in connection with transactions
by, directors and managers.—(1) No company shall
directly or
indirectly make a loan to—
(a).......
or
(b)
any other company or other body corporate controlled by one or
more directors or managers of the company or of Its holding
company
or of any company which Is a subsidiary of its holding company; or
provide any security to any person in connection with
an obligation
of such director, manager, company or other body corporate.
(b)
one or more directors or managers of a company contemplated in
subsection (1) (b) shall be deemed to control another company
or body
corporate only if—
(i)
such
director or manager or his nominee is a member or such directors or
managers or their nominees are members of such other company
or body
corporate and the composition of its board of directors is controlled
by such director, manager or nominee or such directors,
managers or
nominees, and such composition shall be deemed to be so controlled if
such director or manager or his nominee or such
directors or managers
or their nominees may, by the exercise of some power and without the
consent or concurrence of any other
person, appoint or remove the
majority of the directors concerned, and such director, manager or
nominee or such directors, managers
or nominees shall be deemed to
have power to appoint a director where a person cannot be appointed
as a director without his or
their consent or concurrence; or
(ii)
more
than one-half of the equity share capital of that other company or
body corporate or, if that other body corporate is a corporation
as
defined in section 1 of the Close Corporations Act, 1984 (Act No. 69
of 1984), more than 50 per cent of the interest in such
corporation
is held by such director, manager or nominee or such directors,
managers or nominees;
(1A).......
b)
one or more directors or managers of a company contemplated in
subsection (1) (b) shall be deemed to control another company
or body
corporate only if—
(i)
such director or manager or his nominee is a member or such directors
or managers or their nominees are members of such other
company or
body corporate and the composition of its board of directors is
controlled by such director, manager or nominee or such
directors,
managers or nominees, and such composition shall be deemed to be so
controlled if such director or manager or his nominee
or such
directors or managers or their nominees may, by the exercise of some
power and without the consent or concurrence of any
other person,
appoint or remove the majority of the directors concerned, and such
director, manager or nominee or such directors,
managers or nominees
shall be deemed to have power to appoint a director where a person
cannot be appointed as a director without
his or their consent or
concurrence; (1B)........
(2)
The provisions of subsection (1) shall
not
apply—
(a) in respect of—
(i)
....
(ii)
....
(Hi)
the making of a loan by a company to any other company or other body
corporate controlled by one or more of the directors or
managers of
the first-mentioned company; or
(iv)
the provision of security by a company in connection with an
obligation of any other company or other body corporate controlled
by
one or more of the directors or managers of the first-mentioned
company,
with
the prior consent of ail the members of the company
or
in terms
of
a special resolution relating to a specific transaction:.....
(My
emphasis.)
9.
In
respect of both companies, the trust is the shareholder. In terms of
the trust deed, decisions by the trustees are to be taken
by a
majority vote. It is common cause that Mr Raubeheimer, as trustee,
had no knowledge of the decision to give security. He was
an absent
trustee living in England at the time. However it is quite clear on
the evidence that the two Coetzee's (husband and
wife) as trustees
and directors, as well as the other director (Exall), all agreed to
the decision, in essence on more than one
occasion. Under those
conditions the
member
of
the trust gave prior consent to the granting of the security. This
point can thus also not succeed. It is thus not necessary
to deal
with applicant's further submissions to the effect that sec 226 does
not even apply at all (although it seems like a good
argument).
10.
Apart
from the issues raised above regarding the security as such, there
was no argument that the applicant did meet the requirements
for an
anti-dissapation order, and it behoves no further discussion.
11.
The
next argument was about the
quantum
of
applicant's claim. Respondent says the quantum is a question of
damages which cannot be decided by way of motion, whereas Applicant
says the figures are fixed and it is only a question of calculation.
12.
The
original debt was R4,872,455.61. In the meantime some of the
goods/equipment have been sold by public auction after the Applicant
had taken possession thereof. The amount presently claimed, after
deduction of the sale price, auction costs and transporting costs,
is
R3,179,290.85. This amount is certified by a certificate presented in
terms of the suretyship and not disputed for what it represents
to
be.
13.
The
Respondent's problem with the amount is that the Applicant had the
equipment, covered by the original application for credit
and
suretyship, valued in September 2008. It was done about one year
before the attachment of the goods took place and approximately
VA
years
before the sale. Since the goods were attached and sold to third
parties, Respondents had no opportunity to have the goods
valued
themselves. Furthermore, some of the goods were sold for
substantially less than their value as per the valuation. It was
therefore submitted that this issue of the valuation must go to trial
to have the values tested.
14.
I
have two problems with this approach. Firstly, it is difficult to
imagine how the Respondents are going to be able to have the
items
valued at this stage. There is no attack against the auction as such.
Prima
facie
that
would be the best evidence of the actual value at the time. I cannot
see how a valuer can put a past value on these items without
having
seen them at the time (i.e. time of the auction). It may also be
difficult to even trace the equipment.
15.
The
second problem is that there is a certificate of indebtedness to
which Respondents are at least
prima
facie
bound.
To simply state that the prices are much below the valuation of
approximately 18 months earlier, is to my mind no way to
displace the
prima
facie
evidence
before the Court. Some proof at least of a sale of a similar machine
or item, of more or less similar vintage and condition,
should be put
up. There is none, and without indicting the auction as such, there
is no reason not to accept the certified value.
In the circumstances
Applicant is entitled to the amount thereof.
I
therefore make the following order: (Part B of the notice of motion)
1.
That
the First Respondent pay the amount of R3,179,290.85 to the
Applicant;
2.
That
the First Respondent pay interest on the aforesaid amount at the rate
of 15.5 per cent per annum a
tempore
morae
to
date of payment;
3.
Directing
the First Respondent to pay the costs of this application.
R
D CLAASSEN
Judge
of the High Court