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[2021] ZAGPPHC 274
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Timana Properties (Pty) Ltd v Nedbank Limited and Another (683/20) [2021] ZAGPPHC 274 (18 March 2021)
HIGH
COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER
JUDGES: NO
(3)
REVISED:
yes
18
March 2021
CASE NO: 683/20
Hearing before Rabie J by way of
Zoom conference.
In
the matter between
:
TIMANA PROPERTIES
(PTY)LTD
Applicant
and
NEDBANK LIMITED
First Respondent
LEX STAR
TRUSTEES
Second Respondent
JUDGMENT
1.
According to the
Notice of Motion this application is for the stay of proceedings
pending an application for the review and setting
aside of a
judgement granted by the honourable Magistrate Engelbrecht in
proceedings of 13 December 2019. In the founding affidavit
the
deponent, Mr M.P. Timana, refers to himself as "the applicant"
although Timana Properties (Pty) Ltd was cited in
the heading as the
applicant.
2.
In paragraph 6 of the
founding affidavit reference is made to a judgement of Magistrate
Engelbrecht on 13 December 2019 but the
applicant failed to mention
what the judgement and order were and also failed to attach a copy
thereof to his affidavit.
It serves no purpose to refer further
to the allegations made in the founding affidavit. The facts that
were mentioned were put
forward in a totally haphazard fashion and
crucial facts to enable one to understand what the application is
about, what relief
is sought and why such relief is sought, were
simply not referred to. It will serve no purpose to refer to
the facts referred
to in the founding affidavit and suffice it to say
that the facts bring no clarity to the matter and the applicant's
application
is lacking in so much relevant detail that it is
impossible to understand what the application is about and on what
basis the applicant
would be entitled to the relief claimed.
For this reason alone the application should be dismissed.
3.
During argument by
counsel appearing on behalf of the applicant at the hearing of the
application, clarity could still not be obtained
and counsel was
constrained to admit that crucial evidence had not been placed before
the court.
4.
During argument on
behalf of the two provisional joint liquidators and the second
respondent, counsel departed from the papers before
the court in an
effort to explain the background and the probable nature and aim of
the present application. That version
was adopted by counsel
for the applicant and I shall consequently briefly refer thereto in
order to bring some finality to the
present proceedings in order to
avoid the further unnecessary prolonging of the matter.
5.
The background is
briefly the following. The company Timana Properties (Pty)Ltd
("the company") was placed in final
winding up on 16
September 2019 due to monies owed in terms of a loan agreement with
the first respondent. Mr MP Timana was a director
of the company.
Mr CA Starbuck and Me AK Bikani were appointed on 12 June 2019 as
provisional joint liquidators in the liquidated
estate of the
company. The aforesaid joint liquidators are members of the
second respondent which in reality is a close corporation
with the
name Lexstar Trustees Admin CC, although not cited as such in the
present application.
6.
The company instituted
an appeal against the order of its liquidation.
7.
The joint liquidators
convened a confidential enquiry in terms of section 417 of the
Companies Act and on 13 November 2019 Mr Timana
was subpoenaed to
attend the enquiry into the affairs of the company to be held on 13
December 2019. Mr Timana was further requested
to produce certain
documents. The provisional joint liquidators submitted in the
answering affidavit that the enquiries are of
utmost importance in
the liquidation proceedings and that it appears to them that Mr
Timana would stop at nothing to avoid any
interrogation and any
consequences flowing from such interrogations.
8.
The section 417
enquiry took place before Magistrate Engelbrecht on 13 December
2019. During the hearing Mr Timana apparently
refused to answer
any of the questions posed to him as a witness and he also refused to
present any of the requested documents
to the enquiry.
9.
For his refusal Mr
Timana apparently relied on the fact that the company had noted an
appeal against the liquidation order. It was
submitted on his behalf
that pending an appeal the proceedings could not continue.
10.
The provisional joint
liquidators, inter alia, relied on the provisions of section 150 of
the Insolvency Act, Act 34 of 1936 which
provides as follows:
"150
Appeal
(1)
Any person aggrieved by a final order of sequestration or by an order
setting aside an order of provisional sequestration may, subject to
the provisions of section 20 (4) and (5) of the Supreme Court
Act,
1959 (Act 59 of 1959), appeal against such order.
(2)
Such appeal shall be noted and prosecuted as if it were an appeal
from
a judgement or order in a civil suit given by the court which
made such final order or set aside such provisional order, and all
the rules applicable to such last mentioned appeal shall mutatis
mutandis but subject to the provisions of subsection (3), apply
to an
appeal under this section.
(2)
When an appeal has been noted (whether under this section or under
any
other law), against a final order of sequestration, the
provisions of this Act shall nevertheless apply as if no appeal had
been
noted: Provided that no property belonging to the sequestrated
estate shall be released without the written consent of the insolvent
concerned.
(4)
If an appeal against a final order of sequestration is allowed, the
court
allowing such appeal may order the respondent to pay the costs
of sequestrating and administering the estate.
(5)
There shall be no appeal against any Order made by the court in terms
of this Act, except as provided in this section."
11.
Magistrate Engelbrecht
accepted the arguments on behalf of the provisional joint liquidators
and decided that the appeal against
the liquidation order does not
suspend the provisions of the Insolvency Act and the Companies Act
and that the enquiry should therefore
proceed. At that point
the proceedings were apparently adjourned.
12.
It appears that
subsequent to the aforesaid proceedings the applicant instituted two
applications namely, firstly, an application
to review, inter alia,
the aforesaid findings by Magistrate Engelbrecht and, secondly, the
present application to stay the proceedings
before Magistrate
Engelbrecht pending the finalisation of the aforesaid review
application. This court is concerned with the application
to stay
proceedings.
13.
On behalf of the joint
liquidators it was submitted that a number of reasons exist why the
application cannot succeed. I shall briefly
refer to these reasons.
14.
Firstly, the issue of
non-joinder and mis-joinder. The second respondent is cited as
"Lex Star Trustees".
Such an entity does not exist.
Furthermore, the two provisional joint trustees should have been
joined as parties to the
application for the reason that they, in
their individual capacities, have been appointed as trustees of the
company's insolvent
estate and as such they have an interest in the
present application.
15.
Furthermore, the
applicant failed to site the Presiding Officer as well as the Master
of the High Court as parties to the application.
Both these parties
have a direct and substantial interest in the application.
16.
I agree with the above
submissions regarding the mis-joinder and non-joinder and the
submission that such are fatal for the application.
Consequently the
application should be dismissed for these reasons.
17.
Secondly, the issue of
locus standi. It was submitted on behalf of the provisional
joint trustees that Mr Timana has no locus
standi to launch the
current application on behalf of the applicant. It was submitted that
it is trite that once a company has
been placed in liquidation, the
directors are divested of control and cease to be directors
functionally, officially and nominally.
A liquidation order
automatically terminates a director's employment as such and/or
operates to dismiss him. Consequently such
directors would have no
power to conduct proceedings on behalf of the company. It was further
submitted that only the liquidators
have the necessary locus standi
to institute and defend legal proceedings on behalf of the liquidated
company.
18.
I agree with the
aforesaid submissions on behalf of the provisional joint liquidators.
Consequently the application should be dismissed
for these reasons as
well.
19.
Thirdly, the issue of a
pending appeal. It would be recalled that Mr Timana's whole
case was based on the premise that the
noting of an appeal against
the liquidation order suspended the operation of the liquidation
order with the further result that
the insolvency enquiry could not
take place pending the finalisation of the appeal. I agree, however,
with the aforesaid submissions
of the provisional joint liquidators
that section 150 (3) is clear in its determination that the
provisions of the Insolvency Act
shall continue to apply as if no
appeal had been noted. Mr Timana thus had no right to refuse to
answer questions posed to him
during the enquiry and to refuse to
present the documents requested from him. The finding by
Magistrate Engelbrecht was thus
a valid finding which does not stand
to be reviewed and set aside. Consequently Mr Timana and/or the
applicant had not made out
a case that the enquiry proceedings should
be stayed pending any review proceedings. The application
should consequently
be dismissed for this reason as well.
20.
Fourthly, the issue
regarding the dismissal of the application for leave to appeal. It
would be recalled that the application
for a stay of proceedings is
based on the fact that an appeal against the liquidation order had
been noted. During the hearing
of this application the
representatives of the parties were ad idem that the application for
leave to appeal had been dismissed
by the court who made the
liquidation order. On behalf of the joint liquidators it was
submitted that a petition to the Supreme
Court of Appeal had been
dismissed while it was submitted on behalf of Mr Timana that there
had been no petition to the Supreme
Court of Appeal.
21.
Whatever the case, it
would seem that there is no appeal pending at present. In these
circumstances the substratum of the application
for a stay had
disappeared and the application should consequently be dismissed for
that reason as well.
22.
Regarding the issue of
costs it is clear that Mr Timana had been the driving force behind
the application. This is supported by
the fact that despite the fact
that he had cited the company as the applicant in the headings of the
pleadings, he referred to
himself as "the applicant" in the
founding affidavit. Under these circumstances, and since he had
failed to make out
any case for relief, it should, in my mind, be Mr
Timana in his personal capacity who should be ordered to pay the
costs of the
joint liquidators and insofar as may be relevant, the
costs of Lexstar Trustees Admin CC. The costs of Senior Counsel
should
also be included in the award for costs.
23.
In the result, the
following order is made:
1.
The application is dismissed.
2.
Mr Mandla Peter Timana is ordered to pay the costs of the application
of the
provisional joint liquidators as well as the costs of Lexstar
Trustees Admin CC, in so far as may be relevant, which costs shall
include the costs of Senior Counsel.
C.P. RABIE
JUDGE
OF THE HIGH COURT
18
March 2021
Attorney
for the Applicant:
Sigama Attorneys Inc
letumile@sigamaattorneys.co.za
Attorney
for the Respondent: NJ de Beer Attorneys
nic@njdb.co.za