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[2022] ZAMPMBHC 89
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Theko and Others v Sinokuhle Developments Consultants (Pty) Ltd and Others (4937/2021) [2022] ZAMPMBHC 89 (14 December 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
(MPUMALANGA
DIVISION, MBOMBELA)
CASE
NO: 4937/2021
REPORTABLE:NO
OF
INTEREST TO OTHER JUDGES:YES
REVISED:
YES
14/12/2022
In
the matter between:
MICHAEL
RALF THEKO
First
Applicant
NELISIWE
SEGAGE
Second
Applicant
SIMPHIWE
MKHABELA
Third
Applicant
and
SINOKUHLE
DEVELOPMENTS CONSULTANTS (PTY) LTD
First
Respondent
MBOMBELA
HOUSING ASSOCIATION
Second
Respondent
MASTER
OF THE HIGH COURT: MBOMBELA
Third
Respondent
J
U D G M E N T
MASHILE
J:
INTRODUCTION
[1]
This
is an urgent application to stay the order of this Court dated 24
October 2022 (“the order”) finally liquidating
the Second
Respondent (“the Company”). The application comprises two
parts, “A” and “B”. Part
“A”,
brought in terms of the provisions of Section 354(1) of the companies
Act, 61 of 1973 (“Companies Act”),
concerns the staying
of the order while Part “B” will, depending on the
outcome of this judgment, deal with the setting
aside of the order as
intended in Uniform Rule of Court 42(1) and/or Section 354 of the
Companies Act, 61 of 1973.
[2]
The three Applicants are the employees of the Company currently
suspended from work
as a result of the operations of the provisions
of Section 38(1) of the Insolvency Act, 34 of 1936 (“the
Insolvency Act&rdquo
;). It was contended on their behalf that in
consequence of their employment with the Company, they have acquired
locus standi,
which derives from their being preferent
creditors of the Company, now in liquidation. The application is
opposed and two points
in limine
relating to lack of
locus
standi
of the Applicants and non-joinder of liquidators have been
raised.
FACTUAL
MATRIX
[3]
The facts leading to this matter are largely common cause and as
such, their elaborate
description is not warranted. A terse
background has been furnished in the founding affidavit.
Consequently, and instead of reinventing
the wheel, I proceed to
borrow extensively from the founding affidavit.
[4]
The First Respondent (“Sinokuhle”) instituted an
application for the provisional
liquidation of the company on 30
November 2021. The company opposed the application. The
application for the provisional
liquidation was heard by this Court
on 11 August 2022. On 25 August 2022, this Court granted the order
provisionally liquidating
the Company. Pursuant to granting the
provisional order the Court issued a
rule nisi
, returnable on
24 October 2022 on which date the order was made final.
[5]
Before traversing the merits of this case, it will be convenient to
delve into the
two points
in limine
to which I have alluded
above because if found to be valid they could be dispositive of this
whole matter. Since this application
is founded on the provisions of
various statutes, it could be instructive to first canvass the
relevant sections of those different
legislations. The starting point
is undoubtedly Section 354(1) of the Companies Act, which provides
that:
“
T
he
Court may at any time
after
the commencement of a winding-up
,
on the application of any liquidator, creditor or member, and on
proof to the satisfaction of the Court that all
proceedings
in
relation to the winding-up ought to be stayed or set aside, make an
order staying or setting aside the
proceedings
or
for the continuance of any voluntary winding-up on such terms and
conditions as the Court may deem fit.”
[6]
Section
41(2)
of the
Basic Conditions of Employment Act of 1997
, as amended
by Act 11 of 2002 lays down that an employer must pay an employee
whose contract of employment has been terminated
in terms of
Section
38
of the
Insolvency Act severance
pay equal to at least one (1) week
remuneration for each completed continuous year of service to the
employer, as calculated in
terms of Section 35 of the Act.
[7]
Section
38(1)
of the
Insolvency Act provides
that the contracts of service of
employees whose employer has been sequestrated are
suspended
with
effect from the date of the granting of the sequestration order.
Section 38(5)(d)
provides that a trustee may not
terminate
a
contract of service unless the trustee has consulted with the
employees whose contracts of service were
suspended
.
In terms of subsection 1 and who are likely to be affected by the
termination of the contract of service or their representatives
nominated for that purpose.
[8]
Section 38(9)
states that unless the trustee or liquidator and the
employer agreed on continued employment of the employee in view of
measures
contemplated in subsection (6), all suspended contracts of
service shall terminate 45 days after (b) the date of the appointment
of a liquidator in terms of Section 375 of the Companies Act. Lastly,
Section 38(11) stipulates that an employee whose contract
of service
terminates
or has been
terminated
in terms of this
section is entitled to claim severance benefits from the estate of
the insolvent employer in accordance with
Section 41
of the
Basic
Conditions of Employment Act, Act
75 of 1997. The various legislative
provisions behind us, I turn to the preliminary points below.
LOCUS
STANDI
[9]
Here the argument of the Applicants is that t
hey
have respectively completed nine, ten and two years of continuous
service with the Company. Given that the First Applicant earned
a
monthly salary of
R9 462.25
,
the Second, an amount of
R6 000.00
and the
Third, an amount of
R9
462.25
,
so continues the argument, they are each owed amounts of
R21 304.80
,
R15 000.00
and
R4 734.40
respectively.
These amounts, the Applicants assert, began accruing from the first
year of their relevant employment with the Company.
Accordingly,
conclude the Applicants, upon the granting of the order, the money
became owing, due and payable.
[10]
Section 354(1)
specifically sets out who would have the
locus
standi
to launch an application to stay and. The party launching
the application must either be a creditor or member or liquidator. As
such, it must be critical to establish what the meaning of the word,
creditor is because it is their contention that they are the
creditors contemplated in Section 354(1) of the Companies Act. The
word, creditor, is not defined under Section 1 of the Companies
Act.
The ordinary meaning of the word, creditor, is a person to whom money
is owed. Are the Applicants creditors of the Company?
[11]
The provisions of
Section 41(2)
of the
Basic Conditions of Employment
Act is
unambiguous – an employer must pay an employee whose
employment has been terminated in terms of
section 38
of the
Insolvency Act severance
pay equal to at least one (1) week
remuneration for each completed year of service. The trustee has not
consulted with the Applicants,
as envisaged in
Section 38(5)(d)
of
the insolvency Act. Moreover, the Company having been finally
liquidated on 24 October 2022, by the time this matter served
before
Court on 6 December 2022 the fourty-five-day period for which the
Applicants have been suspended had not even come to an
end rendering
the launching of this application premature.
[12]
What then does all this mean?
Section 41(2)
of the
Basic Conditions
of Employment Act will
only be triggered by termination of the
employees’ employment. For as long as that has not happened, as
is the case here,
the Applicants cannot be regarded as creditors as
intended in Section 354(1) of the Companies Act. Since the Applicants
are neither
liquidators nor members of the Company, they do not have
locus standi
to claim what they allege is due. The prematurity
of this application becomes more palpable when one considers that it
is still
unknown whether or not the employment of the Applicants will
be terminated or not. Against that background, I have no option but
to agree that the Applicants have failed to demonstrate that they
have
locus standi.
[13]
In view of the conclusion of this Court on the issue of
locus
standi
, it will serve no purpose to explore the non-joinder
question nor will it assist either party to consider the merits. The
issues
of
locus standi
and non-joinder have always been
independently dispositive of the matter. Thus, the Applicants’
failure to show
locus standi
spells the end of the matter.
Needless to state that while this is the end for the Applicants, it
is momentary as their employment
might subsequently be terminated.
Upon that happening, they will become creditors and acquire
locus
standi
to bring the same application.
[14]
In the result, the application fails and I make the following order:
The
application is dismissed with costs.
B
A MASHILE
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
MPUMALANGA
DIVISION, MBOMBELA
This
judgment was handed down electronically by circulation to the parties
and/or parties’ representatives by email. The date
and time for
hand-down is deemed to be 14 December 2022 at 10:00.
APPEARANCES:
Counsel
for the Applicant:
Adv T S Ngwenya
Instructed
by:
JF Shabangu Attorneys
Counsel
for the Respondent: Adv
H F Forie
Instructed
by: Cronje
De Waal – Skhosana Inc
Date
of
Judgment: December
2022