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[2022] ZAFSHC 62
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Jonker and Others v Myobizi N.O and Others (3076/2021) [2022] ZAFSHC 62 (30 March 2022)

IN THE HIGH
COURT OF SOUTH AFRICA
FREE STATE
DIVISION, BLOEMFONTEIN
Case no
.
3076/2021
In the matter
between:
LOUIS
JONKER
1
ST
Applicant
JOHANNA JACOBA
JONKER
2
ND
Applicant
MUSTANG CHEMICALS
(PTY) LTD
3
RD
Applicant
and
MAGISTRATE N
MYOBIZI
N.O.
1
ST
Respondent
DEON MARIUS BOTHA
N.O.
2
ND
Respondent
J Z H MULLER
N.O.
3
RD
Respondent
LOUISA SIBIYA
N.O.
4
TH
Respondent
LAND AND
AGRICULTURAL
5
TH
Respondent
DEVELOPMENT BANK
OF SOUTH AFRICA
MASTER OF THE
HIGH COURT, BLOEMFONTEIN                                6
TH
Respondent
CORAM
:
REINDERS, ADJP et VAN RHYN, AJ
HEARD
ON
:
7 FEBRUARY 2022
DELIVERED
ON:
30 MARCH 2022
JUDGEMENT
BY:
VAN RHYN AJ
INTRODUCTION.
[1]
The first applicant, a farmer of Bothaville and the sole member of
Jonker Products CC (in
liquidation) (“Jonker Products”), brought
an urgent application on 7 July 2021 requesting a rule
nisi
that the first and second meetings of creditors be declared invalid
and be set aside. A rule
nisi
was issued in terms of the
Notice of Motion. The return day was extended on several occasions
before the matter came before this
court on review in accordance with
the directive issued by the Judge President.
[2]
Second applicant is the wife of the first applicant. She is an
erstwhile member of Jonker
Products and is a director of third
applicant, Mustang Chemicals (PTY) LTD. The first respondent is cited
in his capacity as the
presiding magistrate of the first and second
meeting of creditors of Jonker Products which was held at the
Magistrates’ Court,
Bothaville on 6 May 2021. The second, third and
fourth respondents (the “liquidators”) are insolvency
practitioners appointed
by the Master as the joint liquidators of
Jonker Products. The fifth respondent is the Land and Agricultural
Development Bank of
South Africa (“Land Bank”). The Master is the
sixth respondent.
THE BACKGROUND
FACTS
.
[3]
A provisional liquidation order of Jonker Products was issued on 11
September 2020. The provisional
order was confirmed on 29 October
2020. On 16 April 2021 the liquidators gave notice in the Government
Gazette of the intended first
and second meeting of creditors
scheduled for 6 May 2021. At the meeting Land Bank proved the only
claim and certain resolutions
were passed. The second meeting of
creditors was postponed to 2 July 2021 and 9 July 2021 for purposes
of interrogating witnesses.
On 11 June 2021 the liquidators
caused subpoenas to be issued by the first respondent in respect of
eight individuals to obtain their
attendance at the postponed second
meeting of creditors.
[4]
On 7 July 2021 the applicants launched an urgent application to stop
the meeting and thus
the interrogation from proceeding.  A rule
nisi
in the following terms was prayed for:
4.1
that the meeting of 6 May 2021 is invalid and be set aside;
4.2
that the decisions taken and the resolutions passed at the meeting of
6 May 2021 is invalid
and be set aside;
4.3
that the subpoenas issued by the first respondent in respect of the
first, second and third
applicants on 11 June 2021 be set aside;
4.4
that the aforesaid (paragraphs 4.1 to 4.3 above) shall serve as an
interim interdict with
immediate effect pending the return day;
4.5
that the respondents who opposes the application pay the costs of the
application on an attorney
and client scale.
[5]
The application is opposed by the liquidators. None of the other
respondents filed any notices.
The Master did not file a report. In
the counterclaim filed by the liquidators the following orders are
requested:
5.1
that the first and first and second meetings convened by the
liquidators were validly held and is
not a nullity;
5.2
that the claim of Land bank was validly proven;
5.3
that the resolutions adopted at the meeting were validly adopted;
5.4
that any further and/or other directions that the court deem fit and
appropriate in terms of sections
386(5) and 387(3) of the Companies
Act 61 of 1973 be granted to the liquidators;
5.5
that any party who opposes the counter application pays the costs
thereof.
CONTENTIONS ON
BEHALF OF THE PARTIES.
[6]
The issue to be determined is the consequences of the liquidators not
convening a meeting
of creditors within one month of the final
winding-up of Jonker Products. Section 78(1) of the Close Corporation
Act
[1]
(“the CC Act”)
provides as follows:
“
(1) A liquidator
shall as soon as may be and, except with the consent of the Master
not later than one month after a final winding-up
order has been made
by a Court or a resolution of a creditor’s voluntary winding-up has
been registered –
(a)
summon a meeting of the creditors of the
corporation for the purpose of –
(i)
considering the statement as to the affairs of
the corporation lodged with the Master;
(ii)
the proving of claims against the corporation;
(iii)
deciding whether a co-liquidator should be
appointed and, if so, nominate a person for appointment; and
(b)
summon a meeting of members of the corporation
for the purpose of –
(i)
considering the said statement as to the affairs
of the corporation, unless the meeting of members when passing a
resolution for the
voluntary winding-up of the corporation has
already considered the said statement; and
(ii)
receiving or obtaining directions or
authorisation in respect of any matter regarding the liquidation”
[7]
The applicants contend that:
7.1
there was a failure to comply with the provisions of section 78(1) of
the CC Act since the liquidators
failed to convene a meeting with the
creditors and members within one month from the date of the final
winding-up order;
7.2
the liquidators failed to obtain the Master’s consent prior to
expiry of the one month period
to convene the first meeting outside
the period of one month since the final winding-up order was granted;
7.3
that any decisions taken and resolutions passed at the meeting held
on 6 May 2021 are invalid;
7.4
the subpoenas issued on 11 June 2021 by the first respondent was not
done with a legitimate purpose,
constitutes an abuse of process, are
in itself defective and are to be set aside.
[8]
Section 66(1) in Part IX of the CC Act deals specifically with the
winding-up of close
corporations. The laws mentioned or contemplated
in item 9 (continued application of previous Act to winding-up and
liquidation)
of Schedule 5 of the Companies Act
[2]
(“2008 Act”), read with the changes required by the context,
apply to the liquidation of a close corporation in respect of any
matter not specifically provided for in the CC Act. The provisions of
section 339 of the Companies Act 61 of 1973 (“1973 Act”)
are
important provisions in the context of the winding-up of a close
corporation. As a result, in general, the process of the
administration
of such winding-up is the same as that in case of the
administration of an insolvent estate.
[9]
The answer to the question whether the meeting held in contravention
of the provisions
of section 78(1) of the CC Act and the decisions
taken are valid or not, can only be decided when the purpose that is
sought to be
achieved by the relevant acts is analysed. Section
412(1) of the 1973 Act and the winding-up regulations apply
mutatis
mutandis
in the winding-up of a close corporation, through
section 66 of the CC Act. Section 412 (1) provides as follows:
“
(1)
In
any winding-up of a company, meetings of creditors and members or
contributories shall, save as otherwise provided in this Act,
be
convened and held in the following manner:
(a)
In the case of meetings of creditors, as nearly
as may be in the manner prescribed for the holding of meetings of
creditors under
the law relating to insolvency; and
(b)
In the case of meetings of members or
contributories, in the manner prescribed by regulation.
(2)   The
provisions of section 52 of the Insolvency Act, 1936 (Act No 24 of
1936), shall
mutatis mutandis
apply to the right of any
creditor to vote at a meeting of creditors in a winding-up of a
company”
[10]
The Master appoints a liquidator as soon as is practical after a
provisional winding-up order in respect
of a close corporation has
been made. The functions of a liquidator of a close corporation are
essentially the same as those of the
liquidator of a company, namely
to control and administer the property and the affairs of the close
corporation and to liquidate
it.
[3]
The first meeting of creditors and members is for purposes of
considering the statement of affairs of the corporation lodged with
the Master and the receiving or obtaining by the liquidator(s) of
directions or authorization in respect of any matter regarding
the
liquidation. The meeting of creditors serves an additional purpose of
proving claims against the close corporation and of deciding
whether
a co-liquidator should be appointed and, if so, nominating a person
for such appointment.
[4]
[11]
The liquidator must summon the first meeting of creditors and members
not later than one month after
the final winding-up order has been
made unless the Master consents to an extension of this period. The
authors of Meskin: Insolvency
Law
[5]
holds the view that the Master may furnish his consent
ex
post facto
;
but unless he does, a meeting summoned after the expiry of the period
of one month is not lawfully summoned. The liquidators, belatedly
on
6 July 2021 and only after they were made aware of the non-compliance
with the provisions of the CC Act by the applicant, approached
the
Master to condone non-compliance with the provisions of section 78(1)
of the CC Act.
[12]
The Master’s response was that no such power is bestowed upon the
Office of the Master in terms of
the provisions of the CC Act or any
other legislation, more specifically to condone non-compliance
retrospectively.
[13]
It is common cause that the liquidators summoned the meeting of
creditors for 6 May 2021, more than 6
months after 29 October 2020,
the date of the final liquidation order. The first contact by the
liquidators with the first respondent
was on 15 January 2021 when a
date for convening the combined first and second meeting was
discussed. Due to further delays regarding
the publication of the
required notice in the Government Gazette, the publication only
occurred on 9 April 2021 with both the first
and second meeting
taking place on 6 May 2021.
[14]
Mr Smit, counsel on behalf of the liquidators, contends that the
failure of the liquidators to convene
the meeting within a month is
not visited with nullity but, in any event, constitutes a formal
defect within the meaning of
section 157
of the
Insolvency Act
[6]
.
Furthermore, the applicant failed to allege any prejudice because of
the meeting not being held within a month after the final order
was
issued. Mr Janse van Rensburg, counsel on behalf of the applicants,
argues that the failure to obtain consent from the Master
prior to
the lapse of one month from the date of the final liquidation order
to summon the first meeting, results in the invalidity
of the
meeting. Consequently, the decisions taken and the claim proved by
Landbank are also invalid and are to be set aside. A similar
fate
befalls the subpoenas issued by the first respondent.
THE APPLICABLE
CASE LAW AND LEGAL PRINCIPLES
.
[15]
In their heads of argument and at the hearing of this review,
the court was referred to a number of
cases pertaining to the
voluntary surrender of an estate and the requirements in terms of the
provisions of
section 4(2)
of the
Insolvency Act relating
to the
sending of notices to creditors prior to publication of the notice of
surrender.  In a number of cases the courts have
condoned the
failure to comply with the requirement of
section 4(2).
[16]
In
Ex
parte
Meyer
[7]
De Villiers JP refused to accept the surrender of an applicant’s
estate where the notice of surrender had been published more than
21
days before the hearing of the application.  The issue was
whether
section 4
of the
Insolvency Act, which
had not been complied
with, aimed at some definite object and whether that object could be
defeated by non-compliance.  The
court held that the provisions
of
section 4
had a definite object in view, namely that debtors
should not be able to give inordinately long notices, effectively
keeping creditors
from levying execution and in the meantime enabling
themselves to dissipate their assets.  The court held that a
failure to
comply with
section 4
could conceivably result in the
aforesaid object being defeated and therefore refused to condone the
defect.
[17]
Section 157
of the
Insolvency Act provides
that “nothing done under
the Act will be invalid by reason of a formal defect or irregularity,
unless a substantial injustice has
been thereby done, which in the
opinion of the court cannot be remedied by any order of the court”.
It is therefore necessary
to ascertain what is meant by ‘formal
defect or irregularity’.  In
Ex
parte
Miller
[8]
Tindall J held as follows:
It
is very difficult to give an exhaustive definition of the word
‘formal’ and I do not think that any (such) definition has been
attempted either in our courts or in England.”
[18]
The test of substantial injustice, only arises where there has been a
formal defect
or irregularity.  In
Ex
parte
Nel
[9]
the court held that the provisions of
section 124(2)
of the
Insolvency Act were
obligatory and that an omission to comply
therewith was not a formal defect.
[19]
In
Leibrandt
v South African Railways
[10]
the court referred to the case of
Liverpool
Bank v Turner, 30 L.J CH 379
and the conclusion by Lord Campbell that no universal rule can be
laid down as to whether mandatory enactments shall be considered
directory or only obligatory with an implied nullification for
failure to adhere to the legislative provision.  It was held
that:
“
... it is the
duty of Courts of Justice to try to get at the real intention of the
Legislature by carefully attending to the whole
scope of the statute
to be construed”.
[20]
Horwitz J, in
Ex
parte
Mandelstam
[11]
referred to several cases where the courts refused to condone any
non-compliance with the provisions of the section as well as cases
where condonation were granted.  The court held that it may be
that, since
section 4(2)
has been enacted for the exclusive benefit
of creditors, non-compliance therewith may be waived by the creditors
concerned and concluded
as follows:
“
Apart from
such waiver, however, I agree with those decisions which adopt the
view that a failure to comply with the provisions of
sec. 4(2)
of the
Insolvency Act is
not to be regarded as a formal defect which a court
is authorised to condone under
section 157(1)
of the same Act.
That being so, there is no statutory jurisdiction for the condonation
of defects which do not fall within
the last- mentioned section.
And, in my apprehension, there is no justification under the Act for
the exercise of any so-called
right to condone a material defect
which assumes the form of a non-compliance with an imperative
provision of the statute, except,
perhaps, on the principle of
de
minimis non curat lex
,
a principle which cannot be invoked in the present case.”
[12]
[21]
The reasoning in the
Mandelstam
case was not followed in
Ex
parte
Hogg
[13]
and
Ex
parte
Lategan and Lategan
.
[14]
In these two cases this section was found to be directory rather than
imperative and condonation was granted to the applicants.
[22]
The same test was applied in
Ex
parte
Foley
.
[15]
The Full Court of the Orange Free State held that the legislature
must have had a definite object in enacting section 4(2) which
would
be defeated or would tend to be defeated by non-compliance. The court
held as follows:
“
It seems to me
that the reason for this provision is not far to seek. The
legislature intended that a creditor, on receiving the copy
of the
notice of surrender in the Gazette, should have an opportunity of
immediately referring to the Gazette to see whether the
notice has
appeared and thereby satisfying himself whether the debtor genuinely
intends surrendering his estate or whether he is
attempting to gain
time at the expense of his creditors with no intention of taking the
important step of publishing a notice of
surrender in the Gazette”.
And further: “
It,
therefore, seems to me that by condoning the premature sending of
notices in terms of sec 4(2) there is a reasonable danger of
one of
the objects of the Legislature in enacting se 4(2) being defeated.
Applicant’s failure to comply with sec 4(2) cannot
be regarded as a
formal defect which can be condoned in terms of the provisions of sec
157, and, that being the case, the Court has
no jurisdiction to
condone the defect.  The Court might conceivably have come to
the assistance of the applicant had the creditors
concerned waived
the non-compliance with this section or had it been possible to apply
the principle
de
mimibus non curat lex.
Since
no waver has been proved and since there is no room for the
application of the principle of
de
mimibus
,
the application must be refused and it is ordered accordingly
”
[16]
[23]
In
Ex
parte Fakir
[17]
Herbstein J, in his study of numerous authorities, came to the
conclusion that they revealed a difference of judicial opinion on
the
nature of a formal defect and the right of the court to grant
condonation.
[18]
It was
therefore held that a defect cannot be said to be formal if it might
cause prejudice to the creditors.  The meaning of
“formal
defect” explained as follows:
“
In view of the
state of uncertainty in the law, it seems to me that it would not be
out of place to revert to a consideration of the
ordinary meaning of
the expression “formal defect” in sec 154(1).  The Shorter
Oxford Dictionary gives as the primary meaning
of “formal”
–“pertaining to form” and one of the meanings given to “form”,
especially at law, is “formal procedure”.
From a
grammatical point of view, therefore, it would be perfectly
legitimate, I think, to paraphrase the expression “formal defect”
by describing it as including a defect pertaining to formal
procedure, although no doubt a phrase is not restricted to
irregularities
in procedure; and if that meaning harmonises with the
scope and purpose of the statute, then it would, I apprehend, be
legitimate
to adopt that construction.
”
[19]
[24]
In
Ex
parte
Marais
and Two Others
[20]
the court held that the approach of the Orange Free State Provincial
Division full court is a new approach which had apparently
not
previously been considered by any of the other divisions. Dowling J
held that in his opinion the approach is the correct one
and the
interpretation put upon sec 4 (2) by the Orange Free State Court is
in harmony with the other provisions of the Act. Dowling
J thus
concluded that the requirement of section 4(2) is imperative and a
failure to comply should not be condoned. As a result,
the applicants
had to re-advertise and supplement the application.
[25]
Mr Smit relied on the judgment by Kotze AJ (as he was then) in the
matter of
Ex
parte Henning
[21]
where
an applicant in an application for the voluntary surrender of his
estate failed to lodge an annexure provided for in the
Insolvency
Act. The
applicant therefore did not comply with the provisions of
section 4
(3) of the
Insolvency Act. The
court held that defective
compliance with the requirements will normally lead to the failure of
an application for voluntary surrender
unless the court is convinced
that the relevant defect did not influence the decision-making
process of interested parties in a material
way.
[22]
Then such a defect is merely a “formal defect” in terms of
section 157(1)
of the
Insolvency Act.  The
defect can only be
considered non-material if it could not have influenced the
decision-making process of interested parties. If
a formal defect or
irregularity has not caused a substantial injustice, the procedural
step in question is valid.  However,
if a formal defect has
caused a substantial injustice, but the prejudice to creditors can,
in the opinion of the court, be remedied
by an appropriate order, the
defect will not be regarded as fatal provided (of course) the
deficiencies are rectified.
[23]
THE PROVISIONS OF
THE RELEVANT LEGISLATION AND DISCUSSION.
[26]
Section 40
of the
Insolvency Act provides
that the Master shall
immediately convene a first meeting of creditors of the estate by
notice in the Government Gazette on receipt
of an order of court
whereby the estate is finally sequestrated. The purpose of the
meeting is for the creditors to prove their claims
and to elect a
trustee. Section 364(1) of the 1973 Act contains a similar provision,
in terms of which the Master shall summon a
meeting of creditors of
the company as soon as may be after the winding-up order has been
granted by the court.
[27]
The process of winding-up a corporation is carried out subject to the
directions and with due consideration
of the rights of interested
parties since the winding up is done for their benefit.  Such
interested parties are the creditors
whose interests, particularly in
the case of a corporation which is unable to pay its debts, are of
paramount importance, and its
members.  The CC Act makes
provision for these groups of interested parties to be consulted and
their directions to be obtained
at meetings convened and held in the
prescribed manner.
[24]
[28]
The first meeting of creditors and members is summoned for the
purpose of considering the statement of
affairs of the corporation
lodged with the Master, proof of claims and deciding whether a
co-liquidator should be appointed. If so,
nominating a person or
persons for appointment will proceed at the first meeting.  The
first meeting is furthermore convened
to obtain directions or
authorisations in respect of any matter regarding the liquidation
process.  The liquidator must also
arrange a meeting of members
of the corporation for purposes of considering the statement as to
the affairs of the corporation.
[25]
[29]
Every member and manager of the corporation is obliged to attend the
first and second meetings in the
event of the corporation being
wound-up, is unable to pay its debts. A member of the corporation is
furthermore obliged to attend
any subsequent or adjourned meeting of
creditors which the liquidator has in writing required a member to
attend.
[26]
The interested
parties must therefore be consulted by the liquidator and their
directions must be obtained at meetings to be convened
and held in
the prescribed manner.   Unlike the sequestration of an
individual, which results in the assets vesting in
the trustee, a
corporation is not divested of its assets.  A corporation
continues to exist while being under the control of
a liquidator.
[27]
[30]
Legislative interpretation is anchored in the intentions of the
legislator and it is achieved by way
of an examination of the text in
which that intention is crystallized making use of a complex set of
rules and guidelines.
[28]
The
sequestrating, liquidating or administration of an insolvent estate,
a company or a close corporation involve several procedures
and steps
which may at times inevitably  lead to the failure to comply
with one or more of these procedures or steps during
the
administration process.  A party who failed to take some or
other step or procedure in terms of the applicable act and who
has
committed some procedural breach or who has failed to act within the
time stipulated has to establish whether what has been done
or not
done, is invalid by reason of the defect or irregularity.
[31]
The Master may provide some assistance by granting condonation, but
as in this case, the Master cannot
act unless empowered to do so.
The Master is a ‘creature of statute’ and as such only has the
powers granted to him by
the legislature.
[29]
[32]
The word “shall” and “must” generally indicate an
“imperative, mandatory, obligatory, or peremptory”
intention of
the legislature. In
Feinberg
v Pietermaritzburg Liquor Licensing Board
[30]
the court confirmed that if a statutory  command is couched in
peremptory terms it is a strong indication, in the absence of
considerations pointing to another conclusion, that the issuer of the
command intended disobedience to be visited with nullity.
[31]
When determining which of the two alternative constructions, whether
a provision was peremptory or merely directory, is to be placed
upon
a statutory enactment,  a court must seek to ascertain the real
intention of the legislature, and in so doing must have
regard to the
scope and object of the enactment as a whole.
[32]
“
.
..
In each case you must look to the subject matter; consider the
importance of the provision that has been disregarded and
the
relation of that provision to the general object intended to be
secured by the Act; and upon a review of the case on that aspect
decide whether the matter is what is called imperative or only
directory
”
[33]
CONCLUSION.
[33]
The formalities to be complied with before a meeting of creditors and
members of a corporation in liquidation
is held, as set out in the
Insolvency Act, in
both the 1973 and 2008 Companies Acts and the CC
Act, are peremptory.  Notice of the first and second meeting,
published in
the Government Gazette and a newspaper circulating in
the district, was not in accordance with the peremptory provisions of
the applicable
legislation. In
Leyds
NO v Simon and Others
[34]
the court held that there is nothing in the
Insolvency Act to
suggest
that these formalities cannot be waived, condoned or acquiesced by
everybody concerned.
[34]
In the matter at hand the only member of Jonker Products avers that
he did not receive the email notifying
him of the meeting. There is
no suggestion that he waived his right to be present at the meeting.
He, through a letter by his attorney,
in fact complained about the
non-compliance with the provisions of the legislation.
[35]
It is evident that the legislature intends every member of the
corporation to attend the first and second
meeting(s) of creditors as
well as any subsequent or adjourned meeting of creditors which the
liquidator has in writing required
him or her to attend. For that
purpose, the members of the close corporation are to be informed of
the time, place and date of the
said meetings. In
Cool
Ideas 1186 CC v Hubbard and Another
[35]
the interpretation of a certain section of the
Housing Consumers
Protection Measures Act 95 of 1998
was considered by the
Constitutional Court. The court held that:
“
A fundamental
tenet of statutory interpretation is that the words in a statute must
be given the ordinary grammatical meaning, unless
to do so would
result in an absurdity.”
[36]
The duty imposed on a member to attend the first and second meetings
can only be fulfilled if notice
of the meeting comes to the knowledge
of the member(s).  In this regard it may be expected by the
member to anticipate notice
of such a meeting within the period of
one month from date of final winding-up of the corporation. The
respondents’ failure to
comply with the provisions of section 78(1)
of the CC Act cannot be regarded as a formal defect which can be
condoned in terms of
the provisions of
section 157
of the
Insolvency
Act. That
being the case and since the first applicant did not attend
the first and second meetings held on 6 May 2021, did not waive the
respondents’
non-compliance with the provisions of the relevant
section and as a matter of fact, obtained an interim order to prevent
the postponed
second meeting from proceeding, I am satisfied that the
interim order should be confirmed.
[37]
The scope and purpose of the CC Act, the
Insolvency Act and
relevant
provisions of the 1973 Companies Act is that not only the creditors
of Jonker Products be timeously notified of the meetings
to be
convened in accordance with section 78 (1) of the CC Act, but the
relevant legislation also concerns the interests of the member
of
Jonker Products. The purpose is furthermore to encourage such member
to attend the meetings, which he is obliged to attend, and
therefore
one is driven to the conclusion that failure to attend such meetings
has or may have, caused prejudice.
[38]
On behalf of the liquidators it was argued that the applicant did not
show that he was prejudiced by
the lack of compliance with the
requirements of the statute.  Mr. Janse van Rensburg argued that
the prejudice is caused by
the delay in continuing with the
winding-up of Jonker Products.
[39]
It seems clear that the object of the requirement that the notice of
the first meeting be published in
the Government Gazette within a
month after the final order was granted, is to inform interested
parties that the corporation has
been liquidated, to provide further
protection to creditors and by invoking the machinery of the
liquidation process to collect the
assets of the corporation,
preserve such assets, realize them and distribute the proceeds
amongst creditors.  All of these steps
to commence as soon as
possible after the final order of liquidation has been granted. The
relevant legislation thus imposes a duty
upon the liquidator(s) to
take all the steps expeditiously to, where necessary, preserve the
assets of the close corporation and
furthermore, recover the debt
owed to the close corporation as speedily as possible. In
Marshall
Bros’ Trustee v Transvaalsche Bank
1907 T.S 1060
at p 1066
Innes, CJ held as follows:
“
The law
contemplates the speedy realisation of the assets of the insolvent
estate, and the payment of the claims of the creditors
promptly and
within a reasonable time.
”
[40]
I have come to the conclusion that the only order that this court
should grant is to confirm the rule
nisi
and to dismiss
prayers 1.1, 1.2 and 1.3 of the counter application. The process
pertaining to the convening of the first meeting
should start afresh
with proper notice and publication in accordance with the provisions
of the relevant legislation.
[41]
As to the costs, Mr Smit argued that if the main application is
granted, the costs should be costs in
the winding-up of Jonker
Products. Regarding the counter-application, Mr Smit argued that the
costs ought to be paid by the applicants,
jointly and severally on
the basis that their opposition thereof is unreasonable.  Mr
Janse van Rensburg requested that the
rule
nisi
be confirmed
with costs on an attorney and client scale and that the counter
application be dismissed with costs.
[42]
In my view, the applicants are substantially successful in the main
application and the normal order
as to costs should follow. The
relief prayed for by the liquidators in prayers 1-3 of their counter
application should accordingly
be dismissed. Appended to the heads of
argument filed by the liquidators, is a draft order which may serve
as the basis for the order,
however with the further provision that
the first and second meeting is to be convened within a month from
the date of this order.
In terms thereof the liquidators
request leave to re-convene the first and second meeting of creditors
and members before the
first respondent and to publish a notice in
accordance with the provisions of section 412 of the 1973 Act in the
Government Gazette
and a daily newspaper. The liquidators did not
comply with the provisions of the relevant legislation and now,
effectively applies
for leave to grant them an indulgence.  I
can see no reason why Jonker Products should be mulct with costs.
[43]
ORDER:
1.      The rule nisi is confirmed.
2.
Prayer 1, including 1.1, 1.2 and 1.3 of the counter application is
dismissed.
3.
In terms of section 386(5) read with section 387(3) of the Companies
Act, Act 61 of 1973, it is directed
that meetings of the creditors
and member of Jonker Products CC (in liquidation), with Master’s
reference B102/2020 be conducted
before the first respondent and the
first meeting be convened within one month from the date of this
order, on a date to be determined
by the first respondent.
4.
At the aforesaid meetings of creditors and members of Jonker Products
CC (in liquidation)
creditors may submit claims for proof in terms of
section 44
of the
Insolvency Act 24 of 1936
and the first respondent
must ascertain the wishes of the creditors and member in accordance
with the provisions of section 412 of
the Companies Act 61 of 1973.
5.
The second to fourth respondents are ordered, upon the sixth
respondent providing a date for
the meeting to be held before the
first respondent, to publish a notice in accordance with the
provisions of section 412 of the Companies
Act 61 of 1973, read with
the regulations thereto, in the Government Gazette and in a daily
newspaper.
6.
The costs (in respect of the main application and the counter
application) shall
be paid by the second, third and fourth
respondents, the one paying the others to be absolved.
I VAN RHYN, AJ
I
concur
C REINDERS, ADJP
On behalf of the
Applicants:
ADV.
F.G.JANSE VAN RENSBURG
Instructed by:
HENDRE
CONRADIE ATTORNEYS
On
behalf of the Second to fourth
Respondents:
ADV. J. E. SMIT
Instructed
by:
SYMINGTON DE KOK ATTORNEYS
[1]
Act 69 of 1984.
[2]
Act 71 of 2008.
[3]
Section 66(1) Close Corporation Act read with section 391 of the
1973Companies Act.
[4]
Close Corporation Act, section 78(1)(a).
[5]
At para 7.16, 7-13 at footnote 8.
[6]
Act 24 of 1936
[7]
1927 OPD 170.
[8]
1932 TPD 212
at 216.
[9]
1947 (4) SA 439 (TPD).
[10]
1941 AD 9
at p 12.
[11]
1949 (3) SA 1210 (O).
[12]
P 1216.
[13]
1950 (2) SA 606 (N).
[14]
1951 (2) SA 242 (C).
[15]
1954 (3) SA 1 (O).
[16]
P 3- 4 C.
[17]
1956 (4) SA 177 (CPD).
[18]
At page 178 H.
[19]
Ex parte Pence 1959 (3) SA (S.R) 933 at 937.
[20]
1957 (3) SA 311
(WLD) at 312 H-313 A.
[21]
1981 (3) SA 843 (O).
[22]
Page 852 E- 853 A.
[23]
Ex parte van Rensburg 1955(1) SA 570 (O).
[24]
Close Corporation Act, Section 78.
[25]
Close corporation Act, Section 78(1) (b).
[26]
Companies Act 61 of 1973, Section 414(1).
[27]
Companies Act 61 of 1973, Section 361(1).
[28]
Ferrar’s Estate v Commissioner for Inland Revenue
1926 TPD 501
at
508.
[29]
The Master v Talmud
1960 (1) SA 236
(C) 237 -238.
[30]
1953 (4) SA 415
AD at 419 -420; see also Mostert v Munroe and
Another 1965(1) SA 139 AD 201.
[31]
419 H.
[32]
Maharajah and Others v Rampersad
1964 (4) SA 638
(AD) at 643.
[33]
Leibrandt v South African Railways
1941 AD 9
at 13.
[34]
1964 (1) SA 377
(TPD) at 382 H – 383 A.
[35]
2014
(4) SA 474
(CC).