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[2011] ZAGPPHC 77
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Clipsal South (Pty) Limited v Lauro N.O and Another (24265/01) [2011] ZAGPPHC 77 (12 May 2011)
IN
THE HIGH COURT OF SOUTH AFRICA
(NROTH
GAUTENG HIGH CURT, PRETORIA)
Case
No: 24265/01
DATE:12/05/2011
In
the matter between:
CLIPSAL
SOUTH (PTY) LIMITED
…....................................................................
APPLICANT
(FORMERLY
LUMEX CLIPSAL (PTY) LTD
And
CORDERO,
LAURO N.O.
…..............................................................................
RESPONDENT
THE
MASTER OF THE HIGH
COURT
...................................................
INTERESTED
PARTY
In
re:
CLIPSAL
SOUTH AFRICA (PTY)
LIMITED
..............................................................
PLAINTIFF
And
ENGIREERING
2000 (PTY) LTD T/A LIGHTING
PRO
....................................
1st
DEFENDANT
JANSE
VAN RENSBURG; JOHANNES JACOBUS
......................................
2nd DEFENDANT
JUDGMENT
MAVUNDLA,
J.
[1]
The applicant seeks an order in terms of which the respondent is
joined as the third defendant in the main action and the costs
of the
application only in the event the matter is opposed.
[2]
The application is brought in terms of Rule 15. The respondent is
opposing the matter on the grounds that he has since been
discharged
as the liquidator by the Master after he had finalised the
liquidation account.
BACKGROUND
Main Action
[3]
It is common cause that summons in the main action was issued on 13
September 2001 against, inter alia, an entity known as Engineering
2000 (Pty) Ltd trading as Light Pro ("Engineering 2000) under
case 2465/2001 (the main action). On 19 October 2002 Engineering
2000
filed a plea and counterclaim in the main action. On 29 October 2002
Engineering 2000 was voluntarily placed under liquidation
by special
resolution. The respondent was appointed the liquidator of the estate
of the first defendant Engineering 2000 on 20
March 2003. On 26
September 2005 the first and final liquidation and distribution
account in the estate of Engineering 200 was
lodged with the Master
and subsequently approved. On the 11 October 2006 the respondent was
discharged by the Master in terms of
s419(1)
1
in which he certified that the affairs of Engineering 2000 had been
completely wound up. The registrar of Companies has since issued
a
certificate confirming that Engineering 2000 had been "dissolved".
[4]
In my view, for the applicant to succeed in this matter, it must
demonstrate to the court that it has a prima facie actionable
action
against the estate of the first defendant, and that the interest of
the creditors in the liquidated estate would not be
prejudiced by
allowing the applicant to proceed with the main action; vide
Warricker & Another NNO v Liberty Life Association
of Africa
Ltd
2
.
[5]
It is trite that dissolution of a company results in its demise, it
comes to an end. Like a human being, after its death, what
remains is
the estate to be winded up. The latter process is undertaken by the
liquidator who is appointed by the Master of the
High Court. In the
Commentary on s419 Henochsberg on Companies Act
3
the learned authors pointed out that: "In the matter of Bowman
NO v Sacks
4
Flemming J (as he then was), dealing with the effect of its
dissolution on the companies liquidator, stated (at 464) that:
'When
the dissolution of the company took place, the statutory duty of the
liquidator towards the creditors came to an end., the
scheme of the
Act does not in any way indicate an intention towards a relationship
between the liquidator and the company as such,
beyond the
liquidation—distribution basis...The Legislation in its broad
pattern confirms that, once the liquidation and
consequent
distribution has been completed, the liquidator is to disappear from
the scene. He has no further function and may therefore
have his
security discharged and obtain his release. It would be alien to the
pattern if the liquidator was to retain some authority
to act not on
behalf of the company or for the benefit of creditors or members, in
fact in no way related to the process of liquidation
- distribution,
after the official end of the process of administration.'
[6]
In the matter of Pieterse NO v Master
5
the Court held that:
"The
effect of the issuance of the certificate by the first respondent is
that the Registrar of Companies proceeds to have
the liquidated
company deregistered or dissolved. It is believed that the company
has been finally dissolved. As the company has
been dissolved the
action instituted by the applicant cannot be proceeded with."
[7]
The learned authors Henochsberg on Companies Act further pointed out
that in the matter of Brouhton v Manicaland Air Services
(Pvt) Ltd,
6
where in the action by the respondent company, the pleadings had been
closed but the matter had not been set down, in the application
for
the dismissal of the action with costs of the action on the ground
that it had become dissolved, the Court held that it could
neither
make any of these orders against a company which has ceased to exist:
but acting under its inherent powers dismissed the
action without any
order as to costs.
[8]
Rule 15 permits an executor or trustee of a legally incapacitated
litigant to step in the shoes of such litigant to proceed
with it
litigation. The respondent was appointed the liquidator of the estate
of the Engineering 2000 on 20 March 2003. The effect
of this is that
the applicant could then bring an application to have the respondent
substituted in the main action, through rule
15. However, this rule
provides that such substitution must be brought forthwith by notice
to such intended person to substitute
the incapacitated person
7
.
In my view, the use of the word 'forthwith1 in rule 15(2) denotes
that such steps as are necessary to substitute must be taken
immediately without delay, upon the appointment of the liquidator, or
it's appointment becoming known by the applicant; vide City
of Cape
Town
8
.
[9]
in casu, the applicant brought this application during August 2007 to
have the respondent joined as the third respondent in
the main action
that was instituted prior to the winding up. Joinder deals with a
situation where the claimant wishes to join in
the proceedings a
third party if he is not sure which of the parties was liable for the
damages. There must be a cause of action
against each of the
respective wrongdoers; vide K & S Dry Cleaners Equipment v South
African Eagle insurance9
9
The
claim against Engineering 2000 in the main claim is in respect of
goods sold and delivered to it. The respondent, in my view,
cannot be
a joint wrongdoer; vide Randond Investments v FPS (Northern Region)
(Pty) Ltd
10
[10]
In my view, what is contemplated by rule 15, is a situation where one
party steps into the boots of another. It denotes one
single cause of
action. The basis of liability remains the same. The original person
who has been incapacitated is merely being
substituted by the other
person who is brought in the proceedings. The latter person merely
steps in the shoes of the initial person;
vide Purnell v Purnell.
11
The fact that the applicant refers to joinder instead to
substitution, is semantics which does not cause any prejudice that
cannot
be cured by a costs order. It is clear from the papers that
the intention is to place the respondent in the shoes of the first
defendant in his capacity as liquidator in the main action; vide
O'Suiiivan Heads Model Agency CC
12
.The
court has a discretion to permit substitution in terms of rule 15 if
there would be no prejudice to the other party; Vide O'Suiiivan
Heads
Modei Agency CC
13
in which it is cited with approval the matter of Samente v Minister
of Police and Another.
14
[11]
in casu the Engineering 2000 was voluntarily placed under liquidation
by special resolution on 29 October 2002. The respondent
was
appointed the liquidator of the estate of the first defendant
Engineering 2000 on 20 March 2003. This application was only
brought
during August 2007, four years and five months later. The application
was not brought forthwith, in my view.. This application
was brought
after the respondent was discharged of his duties when he no longer
can function as a liquidator; vide Standard Bank
of SA Ltd v The
Master and Others.
15
[12]
In order for me to exercise my discretion in favour of the applicant,
I need to be persuaded that there is no prejudice at
all caused by
the delay. As pointed out earlier, on 26 September 2005 the first and
final liquidation and distribution account
in the estate of
Engineering 2000 was lodged with the Master and subsequently
approved. On the 11 October 2006 the respondent was
discharged by the
Master in terms of s419(1). The applicant stated that that the
respondent would not be prejudiced in the event
the order sought is
granted.
[13]
The application was brought almost thirteen months after the first
and final liquidation and distribution account and almost
thirteen
months after the respondent was discharged from his duties in terms
of s419(1). In practical terms it means that Engineering
2000 no
longer exists and its estate has been completely winded up, and as
such the action cannot be proceeded with against the
first
defendant.
16
The
applicant has not advanced any reasonable excuse in the papers as to
why the application was not brought much earlier.
[14]
It needs to be borne in mind that section 359 suspended any legal
action against the first respondent. In the matter of South
African
Transport Services v Joubert NO
17
Howie
J (as he then was) referring to s359 said "...once the
respondent was appointed liquidator (not provisional liquidator:
see
Strydom NO v MGN Construction (Pty) Ltd and Another. In re Haljen
(Pty) (In liquidation)
1983 (1) SA 799
D at 806H-808G), he had to be
given written notice of the continuation of any suspended
proceedings." Howie J (as he then
was) at 400F further said that
"Such notice not having been given, the proceedings which were
in progress when liquidation
supervened, and which were suspended by
liquidation, are deemed in terms of s359(2) (b) to have been
abandoned. Therefore those
proceedings could not,...).
[15]
Granting the application would require that I should resuscitate the
second defendant. It is for the applicant to pursued this
court, why
it must not be deemed that the main action has been abandoned. The
applicant has not advanced any reasonable explanation
why there was
this inordinate "delay in bringing this application. In the
circumstances, the deeming provisions of s359 (2)
(b) has not been
disturbed. I must therefore conclude on that basis that the main
action has since been abandoned. This conclusion
simply means that
the applicant does not have an actionable action against the first
defendant.
18
[16]
The effect of the order sought by the applicant would require the
resuscitation of first defendant. This would require that
the first
and final liquidation and distribution account should be set aside
and redrafted in accordance with the eventual outcome
of the main
application. This cause, in my view, would be prejudicial to other
creditors who have not been cited in these proceedings.
Whether they
existed at the time of the final liquidation is besides the point. It
has not been shown by the applicant, in my view,
that there would be
prejudice to other potential interested parties.
[17]
In the light of the authorities cited herein above and the conclusion
arrived at, I therefore conclude that the application
must be
dismissed. I am further of the view that in respect of the main
action against the first defendant, by virtue of the fact
that it is
no more, that action should be dismissed as well.
[18]
The respondent was sued in his capacity as the erstwhile liquidator.
It is fair that he must not be placed in a situation of
having to
bear the costs of this application out of his own pocket. As a
successful party, he is entitled to be awarded the costs
of this
application. In the result
[19]
I make the following order:
1.
That the application is dismissed.
2.
That the main action against the first defendant is dismissed;
3.
No order as to costs is made in regard to the main action
4.
That applicant is ordered to pay the costs of this application on
party and party scale.
N.M.
MAVUNDLA
JUDGE
OF THE HIGH COURT
DATE
OF JUDGMENT : 12/05/2001
APPLICANT'S
ATT : R C CHRISTIE INC
APPICANT'S
ADV : MR. CD ROUX
RESPONDANTS'
ATT : DE JADGER- DUPLESSIS
RESPONDANTS
ADV : MR. S. BUNN
1
Companies
Act, No 61 of 1973.
2
2003
(6)SA 272 (WLD) at276G-H.
3
At
Vol 1 899 [issue 27].
4
1986
(4) SA 459 (W).
5
2004
(3) SA 593
(C) at 596E-F para [8].
6
1972
(4) SA 458.
7
Vide
Rule 15(2)&(3).
8
2004
(5) SA 39
(CPD) at 65D-F.
9
1998
(4) SA 456
(WLD) at 460E-462D.
10
1992
(2) SA 608
(WLD) at 615B-H.
11
1993
(2)
SA
662 (AD) at 667A-E.
12
1995
(4) SA 253
(WLD) at 254H-255.
13
3
Supra
at
255
D-256B.
14
1948
(3) SA 1012
(W) at 1021.
15
1999
(2) SA 257
(SCA) at 266B-D.
16
Vide
Pieterse NO and Another v The Master and Another (supra) at 596E
PARA {8],
17
1986
(2) SA 395
(CPD) at 400B.
18
Vidt
[para
8]
supra.