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[2022] ZAMPMBHC 72
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Zeelie v Mjejane Farm Management (Pty) Ltd and Others (Paradise Creek Investments 34 (Pty) Ltd Intervening) (1534/2021) [2022] ZAMPMBHC 72 (27 September 2022)
THE
HIGH COURT OF SOUTH AFRICA
MPUMALANGA
DIVISION, MBOMBELA MAIN SEAT
CASE
NO: 1534 / 2021
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
27
September 2022
In
the matter between:
PETRUS
ZEELIE Nomine
Officio APPLICANT
[In
his capacity as court appointed
Administrator
of the
MJEJANE
TRUST (IT No. 6334/2004)]
And
MJEJANE
FARM MANAGEMENT FIRST
RESPONDENT
(PTY)
LTD (in provisional liquidation)
(Reg
no. 2007/013525/07)
TSHEPO
CHARLES RAMPATLA SECOND
RESPONDENT
Nomine
Officio
THEODOR
WILHEM VAN DER HEEVER THIRD
RESPONDENT
Nomine
Officio
[In
their capacities as joint liquidators
of
the First Respondent]
PARADISE
CREEK
INVESTMENTS INTERESTED
PARTY/
34
(PTY) LTD (Reg no.
2002/004158/07) INTERVENING
PARTY
J
U D G M E N T
RATSHIBVUMO
J:
Delivered:
This
judgment was handed down electronically by circulation to the
parties' representatives by email. The date and time for hand-down
is
deemed to be 14H00 on 27 September 2022.
[1]
This is a judgment in
the two applications that were heard together. The main application
by Petrus Zeelie (the Applicant), who
acts on behalf of Mjejane Trust
(the Trust) seeks a final order to provisional liquidation order
handed down by this court on 13
November 2021. In terms of that
order, Mjejane Farm Management (Pty) Ltd (the First Respondent) was
placed under liquidation and
interested parties were invited to show
cause why it should not be made final. The other application is by
Paradise Creek Investments
34 (Pty) Ltd (the Intervening Party /
Paradise Creek) for admission as intervening party. In the same set
of papers, Paradise Creek
opposes the main application. The
application by Paradise Creek is opposed by the Applicant for reasons
set out below.
[2]
Background.
Several
court litigations preceded the current applications. Since the
outcome of these litigations has a bearing on the current
applications, it would be apposite to briefly unpack the relevant
history of the Trust leading to where it finds itself today.
This
judgment is a continuous build up in putting together a picture
puzzle surrounding the Trust, constructing on top of the court
judgments handed down so far. The judgment would by no means be the
last in putting together the scattered pieces of the picture.
[3]
The
current legal battles have their roots in one of the largest
successful land claims in the history of this country known as
the
Lugedlane land claim. As fully described by Tuchten J in
Makhubela
and Others v Silinda and Others
[1]
,
this was the restitution of land following the 1954 forced removal of
the Lugedlane community in what is currently known as Mpumalanga
Province. The claimed back land covers some 14 788 hectares and
includes Ludwichlust and Tenbosch Farms. Following the restoration,
the land was registered in the names of Mjejane Trust for the benefit
of the Mjejane beneficiaries, who are members of the community
that
was forcefully removed from there. Trustees are supposed to be
elected from the beneficiaries and should be responsible for
the
management of the Trust.
[4]
A
trust deed was executed in 2009 and registered with the Master of the
High Court, Pretoria. For unexplained reasons, the list
of
beneficiaries that was supposed to be part of the trust deed remains
missing. It has however been established that these would
come from
the 1300 Lugedlane families. There is however a dispute as to who the
true beneficiaries should be. The Gauteng Division
of the High Court,
Pretoria
appointed
a group of interim trustees, whose primary responsibility was to
develop the list of beneficiaries. Amid accusations of
maladministration, corruption and failure to account, the Court
granted an order removing the interim trustees and these were
replaced by the Applicant who is a chartered accountant, acting as an
administrator of the Trust.
[2]
Although Tuchten J steered away from making a pronouncement on the
accusations levelled against the interim trustees, Bam J found
merit
in them when he granted part B of the application which was a final
order in removing the interim trustees of the Trust.
[3]
[5]
Upon
uncovering the maladministration that later formed part of the report
presented to Bam J in the matter referred to above, the
Applicant,
who is a court appointed administrator of the Trust approached the
court to have his powers expanded, and this was granted
in a judgment
delivered by Hughes J on 11 November 2020.
[4]
It suffices for present purpose to state that the powers and duties
of the Applicant were expanded to include investigating and
ascertaining the nature and extent of the Trust’s assets,
liabilities and interests and to institute and/or defend all legal
proceedings in the interest of the Trust and the protection and
recovery of the Trust’s assets.
[5]
It is with this background that the Applicant brought this
application.
[6]
The application to
place the First Respondent under liquidation was launched on 03 May
2021 as a conversion of a voluntary liquidation.
This was after the
First Respondent was placed under members’ voluntary
liquidation that was registered with the Companies
and Intellectual
Property Commission (CIPC) on 15 April 2021. This application was
premised on section 346(1)(e) of the Companies
Act, no. 61 of 1973
(the Act) which provides,
“
346.
Application for winding-up of company
1.
An application to the Court for the winding-up of a company may,
subject to the provisions of this section, be made –
…
(e)
in the case of any company being wound up voluntarily, by the Master
or any creditor or member of that company; or…”
[7]
It
is common cause that the Trust is a creditor and a landlord to the
First Respondent. It is also common cause that at the time
of
launching this application, the First Respondent was under voluntary
liquidation, registered with the CPIC as stipulated above.
The
voluntary liquidation was however set aside in a judgment handed down
on 28 May 2021 by the Gauteng Division of the High Court,
Pretoria,
per Davis J.
[6]
This followed an
application to set aside the voluntary liquidation by Paradise Creek,
the Intervening Party in the current application.
The reason the
court set aside the voluntary liquidation was as it found, the
decision to place the First Respondent under voluntary
liquidation
was not in line with the provisions of the Act. That decision was
taken as a members’ decision, however the parties
who took it
happened to be two of the three directors of the shareholder company
of the First Respondent (the father and the son
referred to in the
judgment as the Jouberts), and that it done without a notice to the
other director – Chris Roux (Roux).
For their role, the
Jouberts were ordered to pay costs on punitive scale.
[8]
Paradise Creek as
an interested party.
The
application by Paradise Creek to intervene in the current proceedings
is opposed by the Applicant on two grounds. The first
ground is that
Paradise Creek is not a shareholder of the First Respondent but a
shareholder of a shareholder, being Keysha Investments
187 (Pty)
(Ltd) (Keysha). Paradise Creek is a 50% shareholder while the other
half is held by Safrican Leisure Properties CC, represented
by the
Jouberts. Roux and the Jouberts are the three directors of Keysha
which is the shareholder of the First Respondent. The
Applicant’s
argument is that a shareholder, even when it is a minority
shareholder, is an interested party. A shareholder
of a shareholder,
so it argued, is too remote to be described as an interested party.
[9]
The second ground of
opposition is that Paradise Creek was not a creditor to the First
Respondent as it ceded all its rights to
all the monies due by the
First Respondent to Standard Bank Limited in terms of the cession of
loan account claims dated 24 January
2013. The affidavit signed by
the Applicant in opposition of the intervening application is dated
14 March 2022. The two grounds
raised above are the same grounds
raised in opposition of the application to set aside the voluntary
liquidation before the Gauteng
Division of the High Court, Pretoria.
At the time of filing the replying affidavit in this case, the
Applicant was aware that these
grounds had failed before the Gauteng
Division of the High Court, Pretoria, and nothing new was advanced to
counter that ruling.
[10]
It
suffices for present purpose to state that Davis J quoted with
approval from the judgment of
Harlequin
Duck Properties 204 (Pty) Ltd v Fieldgate t/a Second Hand Rose
[7]
where
the court made the following remarks regarding the
locus
standi
of
a party whose claim was ceded
in
securitatem debiti
,
“
In
the present case, the issue arises as to the
locus
standi
of
applicant in an application for a
declarator
pursuant
to a lease agreement. In this connection the following passage in
Joubert (ed)
The
Law of South Africa
vol
2(2) (2 ed) at para 55 by Mr Justice Nienaber is dispositive of the
argument: 'The cedent, so it is said, retains, after
cession,
the ownership of the right, its bare
dominium
or
a reversionary interest entitling him or her to the reversion of the
ceded right on settlement of his or her own indebtedness.
In the
interim, neither the cedent nor the cedent's trustee or liquidator in
insolvency has the
locus
standi
to
enforce the debt; only the cessionary may do so. But the cedent's
reversionary interest does vest him or her with the
locus
standi
to
exercise voting or other powers in respect of the right and enables
the cedent to protect his or her interests by appropriate
means, to
take advantage of a lien or suretyship, and conceivably, to issue a
notice of cancellation. So too he or she has the
dual
locus
standi
to
sue or to be sued and to apply for the sequestration of the estate of
the debtor.'
I
also align myself with the views expressed above and hold that
Paradise Creek established itself as an interested party in the
circumstances of this case.
[11]
The liquidation
application.
A
lot has been out of the judgment setting aside the voluntary
liquidation to the extent of suggesting that the outcome of this
liquidation application was dependent on that outcome. The
provisional liquidation needs to be understood in the following
background:
The Applicant alleges that subsequent to the registration
of voluntary liquidation, he learned that Roux, who is one of the
First
Respondent’s directors, was dissipating or attempting to
dissipate the assets of the First Respondent. He also stated that
he
believed that many more assets and money of the First Respondent may
have been dissipated during the recent years in circumstances
where
large parts of it belongs to the Trust or had to be paid out to the
Trust.
[8]
[12]
In
light of the above, the Applicant needed an inquiry to be conducted
into the affairs of the First Respondent in terms of section
417 and
418 of the Act as he did not have a clear understanding of what
happened in its affairs and the dealings it had with the
Trust. This
situation was made worse because the erstwhile trustees had until
then ignored the court orders directing them to hand
over documents
pertaining to the affairs of the Trust. The envisaged inquiry cannot
be done under voluntary liquidation. There
are at least two ways of
procuring a s 417 enquiry even in a voluntary winding-up. The first
is to convert the winding-up into
a winding-up by the Court under s
346(1)
(e)
;
and the other is an application to Court under section 388 for leave
to convene an enquiry.
[9]
The
Applicant
in
casu
opted
for the first alternative which is a conversion of a voluntary
liquidation to a court ordered liquidation.
[13]
The impact that the
outcome of the application setting aside the voluntary liquidation
would have to the current application is
dependent on the reason for
the granting of the provisional order. If the court granted the order
solely because the company was
in voluntary liquidation, without
inquiring into its solvency; then the order would have to follow the
fate of the voluntary liquidation
as determined by Davis J of the
Gauteng Division of the High Court, Pretoria. However, ordering a
liquidation on the basis of a
voluntary liquidation would be unwise
and not in line with the Act. The word “conversion” is
not even used in the statutory
provisions. Section 346(1)(e) provides
that
an
application to the Court for the winding-up of a company may
,
subject to the provisions of this section, b
e
made in the case of any company being wound up voluntarily, by
the Master or
any
creditor
or
member of that company. [My emphasis].
[14]
My
understanding of the provisions above is that a creditor may apply
for liquidation of a company (even though it is under voluntary
liquidation) and would still have to satisfy all the requirements for
liquidation. Being on voluntary liquidation is not a requirement
for
placing a company under liquidation. The creditor still has to prove
the indebtedness by the company in an amount not less
than R100.00
and that it is unable to pay.
[10]
In ordering a provisional liquidation of the First Respondent, the
court considered an application that detailed how the First
Respondent owed substantial amounts to the Applicant and that it was
unable to pay after letters of demands were sent to it. In
any event,
when the said order was handed down on 15 November 2021
[11]
,
the voluntary liquidation proceedings had already been set aside by a
court and this was made known to it. The court order therefore
had to
be an independent decision based on evidence presented regarding its
solvency as opposed to just being made because the
company was under
voluntary liquidation. Given the evidence presented in this
application, I conclude that the setting aside of
the voluntary
liquidation by the Gauteng Division of the High Court, Pretoria has
no bearing on the outcome of this application.
[15]
This however does not
mean that the provisional liquidation cannot be discharged. If the
provisional order has to be discharged,
it shall not be because of
the setting aside of the voluntary liquidation. The order will be
discharged if the Intervening Party
shows that the Second Respondent
is solvent or if the Applicant fails to prove that the First
Respondent is insolvent.
[16]
Is the First
Respondent insolvent?
I
now proceed to deal with the solvency of the First Respondent as it
appears on papers filed in these applications. It may be prudent
to
first highlight that on 29 May 2021, a day after the date on which
voluntary liquidation of the First Respondent was set aside
by the
Gauteng Division of the High Court, Pretoria
(28
May 2021), Roux and Van Oosthuizen, First Respondent’s
directors, passed a resolution placing the First Respondent under
business rescue. This was registered with the CIPC on 31 May 2021 and
without any delay, Grant Chittenden was appointed a business
rescue
practitioner for the First Respondent. The Applicant thereafter
approached this court on urgent basis seeking an order setting
aside
the decision in which the First Respondent was placed under business
rescue. That order was granted on 22 July 2021.
[12]
[17]
The Applicant averred
in the founding affidavit that the First Respondent owed the Trust an
amount in excess of R21 000.00.
There were developments after
the founding affidavit was filed which necessitated the filing of a
supplementary founding affidavit.
This was done on 25 August 2021.
From this affidavit the money due to the Trust is calculated taking
into consideration the version
of the Intervening Party, by then
known through the email correspondence between the Applicant and Roux
and/or his legal representative,
Esselens Engelbrecht Inc.
[18]
Roux
who is the deponent to the affidavit filed for the Intervening Party
informed the Applicant that the First Respondent could
not be liable
in the amount claimed as there was a new lease agreement in terms of
which the lease was not only extended but the
rental amount was also
reduced. In a letter dated 01 December 2021, Roux explains that “our
lease agreements were renewed
by the trust, although we were in
arrears and they were aware of our situation.”
[13]
Roux avoided mentioning the amount in arrear in this letter.
[19]
The Applicant denies
that the lease agreement was validly extended saying the court should
make a finding to that effect. The reason
for this argument is that
at the time the new lease agreement was signed, the resolution was
passed by trustees to the exclusion
of an independent trustee named
Ledwaba. It was submitted that anything done by the trustees without
his concurrence as an independent
trustee appointed by the Master of
the High Court for that purpose, would be null and void. For reason
that he was not part of
the meeting and that he did not append his
signature to a resolution, the lease agreement could not be valid. In
the alternative,
he submits that the court should accept his
cancellation of the lease agreement which was communicated to the
First Respondent
through his legal representative.
[20]
From the
supplementary founding affidavit, the amount in arrears for rent was
calculated in two separate sheets with revised interest
rates. One
sheet is for the rent based on the old lease which comes to
R10 428 273.75. That amount would be R8 688 920.44
as reflected in another sheet, calculated on the reduced rental in
line with the disputed new lease agreement. For this reason,
I am of
the view that it is unnecessary to make a ruling on the validity of
the new lease agreement as that would only help determine
the amount
by which the First Respondent is in arrear as opposed to a
determination on whether it is in arrears. For purposes of
this
application, it would be unnecessary to come out with the figure, for
as long as the amount due is above R100.00. Calculating
from either
of the sheets, the amount is in millions of rands, which is above the
minimum required.
[21]
In determining
whether there is genuine dispute of fact on whether any money is due
to the Applicant, the court should not just
give heed to the say so
of the Intervening Party. The court may have to look at the
circumstances as a whole, including the findings
by the liquidators,
conduct by the First Respondent’s directors and what they said
in email correspondence as highlighted
above. There are several other
emails written by Roux in which he acknowledged that the First
Respondent owed money to the Trust
without delving into the amounts.
In the answering affidavit, Roux makes a sweeping blanket denial that
in my view, does not meet
minimum requirement to be regarded as
genuine dispute, given his admissions and the evidence presented by
the Applicant.
[22]
The
denials by the Intervening Party bring to mind the application of the
Plascon-Evans rule which was reiterated by the Supreme
Court of
Appeal in
National
Director of Public Prosecution v Zuma
[14]
where it held,
“
Motion
proceedings, unless concerned with interim relief, are all about the
resolution of legal issues based on common cause facts.
Unless the
circumstances are special they cannot be used to resolve
factual issues because they are not designed to determine
probabilities. It is well established under the
Plascon-Evans
rule
that where in motion proceedings disputes of fact arise on the
affidavits, a final order can be granted only if the facts averred
in
the applicant's affidavits, which have been admitted by the
respondent, together with the facts alleged by the latter, justify
such order. It may be different if the respondent's version consists
of bald or uncreditworthy denials, raises fictitious disputes
of
fact, is palpably implausible, far-fetched or so clearly untenable
that the court is justified in rejecting them merely on the
papers.”
[23]
The
bare denial referred to above, should be viewed in light of the
reports prepared by the liquidators after accessing the First
Respondent’s documents. They reached a conclusion that the
First Respondent was hopelessly insolvent.
[15]
The First Respondent financial woes are summarised by Davis J in
Paradise
Creek Investments 34 (Pty) Ltd v Mjejane Farm Management (Pty)
[16]
Ltd
judgment
as follows:
“
The
financial position of MFM appears to be precarious. The most recent
financial statements available, is that of the year ending
February
2019. It shows that, for the previous year, its assets have decreased
buy more than R1 million, its deferred tax has increased
by some R4
million, its retained income has decreased by R10 million and its
liabilities have increased by more than R1 million.
This includes an
increase of its overdraft by almost R3 million. Its comprehensive
loss for the year, has increased from approximately,
R4 million to
just over R10 million. In addition, it appears to have some
difficulty in paying its creditors timeously, which includes
its
landlord.”
[24]
It is important to
reiterate at this stage that the voluntary liquidation of the First
Respondent was set aside due to fraudulent
manner in which the
decision placing it under voluntary liquidation was taken, not
because it was solvent. After all the court
did not have an
application for liquidation before it, but the setting aside of a
voluntary liquidation, which it ultimately granted.
[25]
In light of the
above, I conclude that the Intervening Party’s dispute can be
best described as consisting of bald or uncreditworthy
denials,
raises fictitious disputes of fact, is palpably implausible,
far-fetched or so clearly untenable that the court is justified
in
rejecting them merely on the papers. It is clear from the evidence
presented that the First Respondent is indeed insolvent and
that the
provisional liquidation should be confirmed.
[26]
As for costs, I do
not see any reason costs should not follow the outcome in respect of
both the intervening and the liquidation
applications. I am equally
not persuaded that a case for punitive cost order has been made
against the unsuccessful parties.
[27]
For the aforesaid
reasons, I make the following order:
[27.1]
The application for intervention by the Intervening Party (Paradise
Creek Investments 34 (Pty) Ltd) is granted with costs.
[27.2]
The order granted by this court on 15 November 2021 in terms of which
the First Respondent (Mjejane Farm Management (Pty)
(Ltd)) was placed
under liquidation is hereby made final.
[27.3]
It is further directed that an inquiry in terms of sections 417 and
418 of the Companies Act, no. 61 of 1973 be conducted
into the
affairs of the First Respondent.
[27.3]
The Intervening Party is ordered to pay the costs of the main
application.
TV
RATSHIBVUMO
JUDGE
OF THE HIGH COURT
MPUMALANGA
DIVISION
MBOMBELA
FOR
THE APPLICANT :
ADV E. THERON SC
INSTRUCTED
BY :
DU TOIT-SMUTS ATTORNEYS
NELSPRUIT
FOR
THE RESPONDENT :
ADV T.A.L.L. POTGIETER SC
INSTRUCTED
BY :
WEAVIND & WEAVIND INC
C/O
GERRIE GROENEWALT
ATTORNEYS
:
MBOMBELA
DATES
HEARD
:19
JUL, 06 & 22 SEP 2022
JUDGMENT
DELIVERED
:27
SEPTEMBER 2022
[1]
Case
no. 43599/2019 handed down on 12 August 2020 by
Gauteng
Division of the High Court, Pretoria
at
para 2.
[2]
See
Makhubela
and Others v Silinda and Others supra.
[3]
See
Makhubela
and Others v Thembinkosi NO and Others
case
no. 43599/2019 handed down on 07 March 2022 by
Gauteng
Division of the High Court, Pretoria
.
[4]
See
Zeelie
v Silinda NO and Others
case
no. 43599/2019 handed down on 11 November 2020 by
Gauteng
Division of the High Court, Pretoria
.
[5]
See
Zeelie
v Silinda NO and Others
case
no. 43599/2019 handed down on 11 November 2020 by
Gauteng
Division of the High Court, Pretoria
per
Hughes J at para 1.1 and 1.11 of the order.
[6]
See
Paradise
Creek Investments 34 (Pty) Ltd v Mjejane Farm Management (Pty) Ltd
(22790/2021
handed down by the Gauteng Division of the High Court, Pretoria on
28 May 2021.
[7]
2006
(3) SA 456 (C)
at
472C-E.
[8]
See
paragraphs 17-18 of the founding affidavit on paginated bundle on p.
10.
[9]
See
Michelin
Tyre Co (South Africa) (Pty) Ltd v Janse van Rensburg
2002
(5) SA 239 (SCA)
at
para 4. See also
South
African Philips (Pty) Ltd and Others
C
v
The Master and Others
[2000] ZASCA 99
;
2000
(2) SA 841
(N)
at
847G.
[10]
See
section 345 of the Act.
[11]
See
the judgment by Greyling-Coetzer AJ dated 15 November 2021 on p. 363
of the paginated bundle.
[12]
See
Zeelie
NO v Mjejane Farm Management (Pty) Ltd and Others
case
no. 2138/2021 handed down by Mashile J of this Division.
[13]
See
the letter addressed to the Applicant by Roux on p. 205 of the
paginated bundle.
[14]
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA) at para 26.
[15]
See
paragraph 15 of the supplementary founding affidavit on p. 262 of
the paginated bundle and the liquidator’s confirmatory
affidavit on p.317 of the paginated bundle.
[16]
Supra
.