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[2019] ZAGPPHC 1065
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Dinath N.O and Others v Mukhawana & Mukhawana Suplly & Logistics (Pty) Ltd (27679/2018) [2019] ZAGPPHC 1065 (28 May 2019)
IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)
(1)
REPORTABLE:
YES
/NO
(2)
OF INTEREST TO
OTHER JUDGES:
YES
/NO
(3)
REVISED
CASE NO:
27679/2018
28/5/2019
In the
ex-parte application of:
IMRAN
DINATH N.O.
1
sT
APPLICANT
HELENA
JANNETHA DE BEER N.O.
2
ND
APPLICANT
ABRAHAM
VICTOR DAWSON
N.O.
3
RD
APPLICANT
(In
their capacities as the appointed provisional
Trustees
in the insolvent estate of Gerard
Jacques
Du Plessis - Masters Ref: T3317/17)
and
MUKHAWANA &
MUKHAWANA SUPLLY
RESPONDENT
& LOGISTICS (PTY)
LTD
(Registration No:
2014/190691/07)
JUDGMENT
NEUKIRCHER
J:
1. What is
before me today is an application for the final winding up
of the
respondent. The respondent was placed under provisional winding-up by
way of urgency on 24 April 2018 by Fabricius J.
2. The
applicants are the trustees in the insolvent estate of one Gerard
Jacques Du Plessis (“Du Plessis"). Du Plessis was finally
sequestrated as a consequence of a massive fraud perpetrated
by him
and his accomplice, Mr Mkateko Trevor Mukhawana ("Mukhawana").
Between these two, they concocted a scheme in which
funds to the
value of approximately R 33 million, which was earmarked for payment
to the Madibeng Local Municipality, was stolen.
It appears that Du
Plessis paid his accomplice an amount of approximately R 11 million,
which amount was paid, according to the
applicants, into the bank
account of the respondent.
3. A
separate application for the sequestration of Mukhawana was launched.
He is the sole director and shareholder of the present respondent.
The application, despite being opposed, was successful and a
final
order of sequestration was granted
[1]
on 8 March 2019 after a provisional order was granted in December
2017.
4.
The
respondent has elected not to file an answering affidavit in the
present proceedings. Instead, on 31 May 2018 the respondent
delivered
a Notice of Intention to Oppose without following that up with an
answering affidavit. On 27 June 2018 the provisional
order was
extended and the respondent was given until 16 July 2018 to file any
answer - as stated, none was forthcoming.
5. Puzzlingly,
the respondent's present attorney of record filed a new
Notice of
Intention to Oppose on 21 February 2019 - what should have followed
was a rule 30 Notice but that did not happen.
6. Instead, on
20 March 2019, the respondent filed a "Notice in terms
of Rule
6(5)(d)(iii)".
7. Rule 6(5)(d) of
the Uniform Rules provides as follows:
"(d) Any person opposing the
grant of an order sought in the notice of motion shall
-
(i)
…
.
(ii)
within fifteen days of notifying the applicant of his
intention to oppose the application, deliver his answering affidavit,
If any,
together with any relevant documents; and
(iii)
if
he intends to raise any question of law only he shall deliver notice
of his intention to do so, within the time stated in the
preceding
sub-paragraph, setting forth such question.''
8. Bearing in
mind that the original Notice of Intention to Oppose was delivered
on
31 May 2018, the respondent is out of time with the rule 6(5)(d)(iii)
Notice. Furthermore, there was a court order dated 27
June 2018
directing the respondent to deliver any answering affidavit (and
therefore by implication its rule 6(5)(d)(iii) Notice)
by 16 July
2018. Its failure to do so is without explanation.
9. Given
that the provisional order was granted on 24 April 2018, the
Notice
of Intention to Oppose delivered on 31 May 2018 was quite clearly in
respect of the hearing in respect of the upcoming final
order and
thus the further notice filed on 21 February 2019 is neither here nor
there - it certainly does not extend the respondent's
dies
as,
I am sure, it was intended to do.
10. But the respondent
has bigger problems than this: as already stated, the sole
director
and shareholder of the respondent was sequestrated provisionally in
December 2017 and finally on 8 March 2019.
11. In terms of
section
9(8)(b)(i)
of the
Companies Act, 2008
a person is disqualified to be
a director of a company if he is an unrehabilitated insolvent and in
terms of the
Insolvency Act 24 of 1936
, a “
insolvent estate"
means 11an
estate under sequestration".
A
"sequestration order'
means·
"any order of
court whereby an estate is sequestrated and include
a
provisional
order; when it has not been set aside."
12.
Section 8
of the
Insolvency Act provides
for the immediate appointment of a trustee
upon sequestration (and this Includes a provisional sequestration).
13.
Section 150
of
the
Insolvency Act provides
:
"(3) 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 realised without the written consent of
the insolvent concerned."
14. Thus, given the
provisions of both the
Companies Act and
the
Insolvency Act, once
Mukhawana was sequestrated, he ceased to be a director and
shareholder of the respondent and his duties and functions were taken
over by the appointed trustees of his estate, who are Messrs Patel &
Bezuidt.
15. Mr Patel has
filed a supplementary affidavit, which I have accepted, explaining
that he is in charge of the day-to-day administration of Mukhawana's
estate, that at no time did Mukhawana approach either him
or Bezuidt
for permission to oppose the final order of liquidation in this
matter, or to appoint legal representatives on behalf
of the present
respondent to do so, that neither he nor Bezuidt gave their consent
to these actions and that any mandate provided
by Mukhawana to the
respondent's "attorneys" should be regarded as void
ab
initio.
16. Mr Groenewald
(purportedly on behalf of the respondent) has argued that, as
the
supplementary affidavit contains no confirmatory affidavit from
Bezuidt there was no consent for Patel to file that affidavit.
I
disagree. In, for example,
Diener N.O. v Minister of
Justice &
Others,
[2]
the third respondent on the appeal was one of the liquidators of a
close corporation who opposed the relief sought in the High
Court and
also opposed the
appeal. His co-liquidators
(the fourth and
fifth respondents) took no part in either the High Court proceedings
or the appeal and yet he was allowed to continue.
17. In my view, it
may be a different matter where proceedings are initiated by
one
liquidator without the authority of the others
[3]
but in the present matter, Mr Patel merely provides the court with an
affidavit relating to the facts of the matter and those are:
(a) the
issue of the sequestration of Mukhawana; (b) the fact that he is the
sole director and shareholder of the respondent; and
(c) that his
provisional liquidators have not consented to the opposition of the
present proceedings. Thus, in all respects Mr
Patel is no more than a
witness who is providing information to this court which is relevant
to weighing up whether the final order
should be granted or not.
18. This being so, I
find that any power of attorney/instruction to oppose this
application given by Mukhawana on or after 20 December 2017
[4]
is void and the notice in terms of
rule 6(5)(d)(iii)
is struck out.
19. The question
still remains whether a final order of liquidation should be granted:
19.1. The provisional order granted by Fabricius J
on 24 April 2018
was:
19.1.1. served on the Master of the High
Court on 25 April 2018;
19.1.2. served on SARS on 25 April 2018;
19.1.3. served on CIPC on 2 May 2018;
19.1.4. served at the registered address of
the respondent on 7 May 2018 by affixing at the main entrance;
[5]
19.1.5. served on the employees at the same
address on 7 May 2018;
19.1.6. published in the Government Gazette
and in the Citizen Newspaper on 8 June 2018.
19.2. Thus, the formalities for the grant of the
final order have all been complied with in my view.
20. I am also satisfied that
a case is made out on the papers for the final winding-up
of the
respondent:
20.1. the
applicants have established, on a balance of probabilities, that
there is no legal basis for the respondent to receive payment of the
amount of R11 480 867.78, which was paid by Du Plessis to
Mukhawana
into the bank account of the respondent.
20.2. the
applicants, by launching this application, are attempting to ensure
that all those funds are repaid (as they appear to be impeachable
transactions)
[6]
to the insolvent estate for the eventual distribution to the benefit
of the general body of creditors.
20.3. security
has been set by the applicants and the first applicant has
the
support of the second and third applicants in the application.
[7]
20.4. It
appears that the respondent is commercially insolvent and is unable
to repay the debt as contemplated in sections 344(f) of the Companies
Act, 1973. Mr De Beer has submitted that, in addition, the
Respondent
is complicit in the fraud and that therefore the winding-up is just
and equitable as contemplated in section 344(h)
of the Companies Act
1973 - I agree.
21. Mr De Beer has
submitted that, in the event that I find that Mr Mukhawana had
no
authority to instruct that these proceedings be opposed, I should
exclude the costs of opposition from any costs in the liquidation.
In
my view this would follow naturally from such a finding.
22. Thus, the order I
make is the following:
22.1.
A final order of liquidation is granted.
22.2.
Costs shall be costs in the liquidation excluding any costs of
opposition.
NEUKIRCHER J
Date of hearing: 16 May 2019
Date of judgment: 28 May 2019
[1]
I am told that an application for leave to appeal has been filed,
but not yet heard.
[2]
2018 (2) SA 399 (SCA)
[3]
See:
Union Share Agency
&
Investments Ltd (In
liquidation) v Hatton,
1927 NLR 99
[4]
Which is the date of his provisional sequestration.
[5]
Which is stipulated in the court order itself and ... the company
search attached to the application
[6]
Under for example,
sections 26
,
29
or
31
of the
Insolvency Act.
[7
]
Although the confirmatory affidavits attached to the application
itself were unsigned, I was handed copies of the signed affidavits
at the hearing of this matter