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[2021] ZAGPJHC 476
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Pillay v Macsilla Holdings and Others (15169/2021) [2021] ZAGPJHC 476 (27 September 2021)
SAFLII
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Certain
personal/private details of parties or witnesses have been
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IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 15169/2021
REPORTABLE:
YES
/ NO
OF
INTEREST TO OTHER JUDGES:
YES
/NO
REVISED.
27.09.2021
In
the matter between:
SUMENTHREN
POOBALAN PILLAY
Applicant
and
MACSILLA
HOLDINGS
(Registration
No:
2012/145671/07)
First Respondent
McDONALD
KUDZAI IMANI
(Identity
No:
[....])
Second Respondent
RUTENDO
PRISCILLA IMANI (born DOKWANI)
(Identity
No:
[....])
Third Respondent
JUDGMENT
CRUTCHFIELD
AJ:
[1]
The applicant sought the winding up of the
first respondent, Macsilla Holdings, (referred to herein as the
‘respondent’),
in terms of sections 344(f) and 345(1)(c)
of the Companies Act, 61 of 1973, read together with item 9 of
schedule 5 of the
Companies Act, 71 of 2008
.
[2]
The applicant did not proceed with the
sequestration applications against the second and third respondents
given that insolvency
proceedings may not be brought against multiple
debtors under a single application.
[3]
The applicant is Sumenthren Poobalan Pillay
(‘Pillay’), the deponent to the founding and replying
affidavits. Pillay
is an attorney practising under the name and style
of SP Attorneys Incorporated, an incorporated private company
conducting an
attorneys’ practice. Pillay is a Director of SP
Attorneys Incorporated.
[4]
The respondent did not dispute that the
applicant was a creditor of the respondent in respect of a debt of
R4 million, payment
of which was due, owing and payable to the
applicant. Demands for payment were not met, the respondent having
sought an opportunity
to make arrangements for such payment.
[5]
The applicant held no security for his
claim.
[6]
At the outset, the respondent’s
counsel raised a point
in limine
,
the outcome of which was envisaged as dispositive of the matter in
its entirety.
[7]
The point was that the underlying loan
transaction, the applicant’s cause of action, was unlawful in
that the loan was implemented
in a manner that contravened s 86 of
the Legal Practice Act 28 of 2014 (‘LPA’) (‘s 86’).
This because the
loan was funded allegedly by way of trust funds paid
from SP Attorney’s Incorporated’s Trust account to the
first respondent.
[8]
The respondent contended that a transfer
occurred from the applicant’s trust account in the second
respondent’s presence
on each occasion that Pillay advanced
monies to the respondent’s account. Furthermore, that the
relevant trust account from
which the funds were paid to the
respondent was that of SP Attorneys Incorporated and not Pillay’s
personal bank account.
The respondent argued that the allegations
prima facie stood uncontroverted by the applicant.
[9]
The respondent’s argument was that in
the event that the source of the funds was trust funds in
contravention of s 86 as alleged,
then the loan itself was void
pursuant to the maxim
ex turpi causa non
oritur actio
. The respondent proffered
an opportunity to the applicant to procure proof of the source of the
funds in order to demonstrate that
they were not trust funds.
[10]
The respondent did not make the point
in greater detail in the papers. The applicant denied that the funds
transferred in terms
of the loan agreement to the respondent were
anything other than his personal funds paid from his trust account
and declined the
opportunity to source proof of the source of the
funds.
[11]
Section 86 deals with the opening and
operating of trust accounts by attorneys referred to in s 84(1) of
the LPA. Section 86 prohibits
the opening of such accounts in
circumstances other than those envisaged in s 86. The provision does
not serve to prohibit an attorney
transferring his personal funds
from his trust account to another bank account as transpired herein.
Nor does s 86 prohibit the
investment of funds absent an underlying
transaction in terms of Rule 55 of the LPA Rules.
[12]
Nothing alleged by the respondent
demonstrated that the funds loaned to the respondent were anything
other than a transfer from
Pillay’s trust account to a
potential creditor for the purposes of an outside transaction that
was not prohibited under section
86.
[13]
Accordingly, the respondent’s point
in limine
did
not hold merit and did not justify a referral to oral evidence on the
point as sought by the respondent.
[14]
In respect of the merits of the winding-up
application against the respondent, the respondent argued that it was
uncertain on the
applicant’s papers whether the true creditor
under the loan was the applicant or SP Attorneys Incorporated.
[15]
Thus, the respondent asserted that the
identity of the true creditor on the applicant’s founding
papers was uncertain.
[16]
However, the pleadings themselves did not
demonstrate the alleged uncertainty. The applicant stated in the
founding papers
inter alia
that:
16.1
He was the applicant in his personal
capacity; and
16.2
He was the creditor in terms of the loan
transaction.
[17]
The respondent made common cause that the
applicant in his personal capacity was the true creditor under the
loan transaction. Furthermore,
that the applicant was a creditor of
Macsilla Holdings. The respondent admitted that the applicant and the
respondent entered into
an oral agreement pursuant to which the
applicant would lend and advance funds to the respondent as
subsequently occurred.
[18]
In the circumstances, the pleadings did not
reflect any debate or uncertainty as to the identity of the true
creditor under the
loan transaction. The pleadings demonstrated
unequivocally that the applicant in his personal capacity was the
true creditor of
the respondent in terms of the loan transaction.
[19]
Some
attempt was made on the papers to allege that the respondent was
solvent. The respondent bore a duty to adduce evidence
[1]
in respect of the respondent’s alleged solvency.
[20]
However, the documents provided by the
respondent were unaudited and unreviewed management statements for
the year ended 31 December
2020, unsigned and unconfirmed by the
respondent’s director and unaudited by the respondent’s
auditors (‘statements’).
[21]
The statements reflected current
liabilities as at 31 December 2020 of R25 503.00 and
non-current liabilities, being a
loan from the respondent’s
shareholder, of R981 513.00. The statements showed total assets
of R1 435 106.00.
Critically, the statements did not
reflect the respondent’s undisputed liability to the applicant
of R4 000 000.00.
In the event that the latter liability
was added to those reflected in the statements, the respondent was
self-evidently insolvent,
both factually and commercially.
[22]
Suffice
it to state that the respondent did not meet its obligation
[2]
to adduce relevant admissible evidence of the respondent’s
solvency. No weight can be attributed to the statements for the
reasons already stated.
[23]
In the circumstances, no cogent argument
was raised as to why this Court should not order the final winding-up
of the respondent
and I intend to make such an order accordingly.
[24]
As regards the applications against the
second and third respondents, the applicant requested that those be
adjourned
sine die
with
the Taxing Master to make the appropriate allocation in respect of
the costs incurred by the respondent in dealing with those
applications.
[25]
By reason of the aforementioned, I grant
the following order:
1.
The first respondent is placed under final
winding-up.
2.
The costs of the winding-up application,
including the costs of two counsel, are costs in the liquidation of
the first respondent.
3.
The applications against the second and
third respondents are postponed sine die, the applicant to pay the
wasted costs of the applications
in respect of the second and third
respondents.
A
A CRUTCHFIELD SC
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION
JOHANNESBURG
Electronically
submitted therefore unsigned
Delivered:
This judgment was prepared and authored by the Acting Judge whose
name is reflected and is handed down electronically
by circulation to
the Parties / their legal representatives by email and by uploading
it to the electronic file of this matter
on CaseLines. The date of
the judgment is deemed to be 27 September 2021.
COUNSEL
FOR THE APPLICANT:
Mr L Pillay SC & Mr R Kisten.
INSTRUCTED
BY:
SP Attorneys Incorporated.
COUNSEL
FOR RESPONDENTS:
Mr J G Smit.
INSTRUCTED
BY:
Mashabane & Associates Inc Attorneys.
DATE
OF THE HEARING:
27 July 2021.
DATE
OF JUDGMENT:
27 September 2021.
[1]
Standard
Bank of South Africa v R-Bay Logistics CC
2013
(2) SA 295 (KZD).
[2]
Boschpoort
Ondernemings (Pty) Ltd v Absa Bank Limited
2014 (2) SA 518
(SCA);
Firstrand
Bank v Lodhi 5 Properties Investment CC
2013 (3) SA 212
(GNP) para 30.