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[2017] ZAFSHC 116
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Knipe v Kameelhoek (Pty) Ltd and Others (2120/2016) [2017] ZAFSHC 116 (22 June 2017)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 2120/2016
In
the matter between:
ANDRE
BAZETT JANSEN
KNIPE
Applicant
and
KAMEELHOEK
(PTY) LTD
1
st
Respondent
SCHAAPPLAATS
978 (PTY) LTD
(in
liquidation)
2
nd
Respondent
COMPANIES
AND INTELLECTUAL
PROPERTIES
COMMISSION
3
rd
Respondent
HEARD
ON:
08 MAY 2017
JUDGMENT
BY:
RAMPAI, J
DELIVERED
ON:
22 JUNE
2017
[1]
This is an application for leave to appeal. The applicant
endeavoured to have the 1
st
respondent and the 2
nd
respondent, the two liquidated family enterprises, placed under
business rescue management. His application was dismissed
with
punitive costs. The applicant was aggrieved by the judgment
given and the order made by Hancke J on 3 November 2016.
[2]
On 1 December 2016 the applicant filed notice of his intention to
appeal. There were eleven grounds of appeal. There
were
three entities cited as the respondents. They w
ere:
Ka
meelhoek
(Pty) Ltd Schaapplaats 978 (Pty) Ltd; and Companies and Intellectual
and Properties Commission.
[3]
On 12 December 2016 three liquidators intervened. They were:
Ottlie Anton Noordman N.O.; Chavonnes Badenhorst
St Clair
Cooper N.O. and Simon Malebo Rampoporo N.O. They intervened as
the first, second and third intervening parties,
respectively.
[4]
On 13 December 2016 one family member, Carol, JK Lotz ex Knipe also
intervened as the fourth intervening party. She is
one of the
five siblings and shareholders in the family enterprises, the 1
st
and the 2
nd
respondents.
[5]
The current application was initially enrolled for hearing on
Thursday 16 March 2017. However, it did not proceed.
It
was postponed by agreement between the parties in an attempt to
negotiate some settlement. Those settlement negotiations
yielded no positive result.
[7]
On 25 April 2017 the applicant filed an objection in terms of rule
7(1). He objected to the authority of Attorney FJ Senekal
of
Matsepes Incorporated to represent the first, the second and the
third intervening parties. He called upon the attorney
to
file written proof that he had been authorised to represent the
liquidators and written proof that he had been authorised by
those
liquidators to oppose the current application for leave to appeal.
[6]
The matter was ultimately argued before me on Monday 8 May 2017.
The applicant’s objection and the main application
were opposed
by all the four intervening parties. I overruled the
applicant’s preliminary objection. I then proceeded
to
entertain the main application. At the end of the argument I
reserved judgment.
[8]
Nowadays an application for leave to appeal is governed by the
provisions of section 17 Superior Courts Act 10/2013. The
relevant portion of the section provides:
“
17.(1)
Leave to appeal
may
only
be given where the judge or judges concerned are of the opinion that
–
(a)
(i)
the appeal would have a reasonable prospect of success;
or
(ii)
there is some other compelling reason why the appeal should be heard,
including conflicting judgments on the matter under
consideration;”
(the
emphasis is mine)
That
is now the new test.
[9]
Previously an application for leave to appeal was governed by section
20(4) Supreme Court Act 59/1959. However, section
20(4) Act No
59/1959, unlike section 17(1) Act No 20/2013, did not set out any
restrictive measure or test in respect of the required
leave to
appeal. The determinant standard principle in considering
whether leave to appeal should be granted or refused was
whether a
reasonable prospect existed that another court might to a different
conclusion.
Van Heerden v Gronwright & Others
1985 (2) SA 342
(T) at 343H-I.
[10]
The question whether the new section 17(1) heralded a paradigm shift
from the old section 20(4) has been recently considered
in the
Mont
Chevaux Trust (IT2012/28) v Tina Goosen & 18 Others
(2014), (3.11.2014) ZALCC (LCC14R/2014) (CT) par [6] per Bertelsmann
J,
Valley
of the Kings Thaba Motswere (Pty) Ltd & Another v AL Mayya
(2016) (10.11.2016) ZAHSA (EL 926/2016) (EL) par (3) per Smith
J and
Civil
& General Contractors CC v Chris Hani District Municipality
(2015) (24.11.2016) ZAHSA (6142/15) (EG).
[11]
There is a logical inconsistency between finding, on the one hand,
that section 17 of the Superior Court Act 10 of 2013, has
now
introduced a more stringent test than in the past for leave, but
still continue to apply the old test on the other hand.
I am in
respectful agreement with the view that a more stringent test as
propounded in the decision of
The
Mont Chevaux
,
supra
,
should now be applied in considering an application for leave to
appeal.
[12]
I am here grappling with an application for leave to appeal in terms
of
section 17(1)(a)
of the
Superior Courts Act 10 of 2013
. The
leave is sought to appeal against the whole of the judgment by Hancke
J. The judgment concerned two corporate
enterprises, namely:
Kameelhoek (Pty) Ltd (in liquidation) and Schaapplaats 978 (Pty) Ltd
(in liquidation). Both of
these enterprises were placed in
final liquidation some years back. The essence of the relief
sought by the applicant in
the main application was to have the
liquidation proceedings relative to those enterprises suspended and
the two companies placed
under business rescue proceedings in terms
of
section 131(4)(a)
of the companies Act 71 of 2008.
[13]
The application for leave to appeal was criticised by the legal
representatives of the intervening parties. It was described
as
a poorly drafted legal document, couched in a terminology akin to
that of a notice of appeal. Indeed the application did
not deal
with the requirements of section 17(1) Act No 10/2013. At the
end of all the grounds of appeal an oblique submission
was made:
“
It
is submitted on behalf of the Applicant that there is a reasonable
prospect of another Court coming to a different conclusion
in favour
of the applicant.”
[14]
Before I consider the grounds of the appeal, I have to make some
preliminary comments in connection with the history of the
matter.
The companies concerned were not wound-up last month. It is
common cause that both of these family business
enterprises were
provisionally liquidated on 30 August 2012, some 52 months before the
main application was launched. Both
were finally liquidated on
27 June 2013, some 41 months before current application was
initiated.
[15]
A similar application for leave to appeal was made but refused on 25
September 2013. The Supreme Court of Appeal was
approached for
leave to appeal. That application too was unsuccessful.
It was refused on 5 February 2014.
[16]
The first attempt was then made to place the two companies under
business rescue management. That similar application
was
brought some one and half years into the winding-up process.
Wright AJ found the delay unacceptable. She found
that the
business rescue application was not genuine and that it was merely a
ploy to further frustrate the liquidation process.
The
application was accordingly dismissed with punitive costs.
[17]
The second attempt for the business rescue schemes was made on 12 May
2016. On 3 November 2016 that second attempt failed.
The
second application, like the first, was refused. It was refused
approximately 45 months since the final liquidation order
was
granted. Its purpose was to have the liquidation process
suspended and the business rescue process commenced in respect
of
each of the two family enterprises. Therefore, it will be
readily appreciated that Hancke J had to grapple with pretty
much the
same type of an application as Wright AJ did. The similar
applications were approximately thirty eight months apart.
On
this second occasion, the delay was disturbingly inordinate.
[18]
Hancke J found, and correctly so, that business rescue proceedings,
by their very nature should be conducted with the optimum
possible
expedition.
DH
Brothers Industries v Gribnitz & Others
2014 (1) SA 103
(KZP) par [27];
Koen
v Wedgwood Village Golf Laundry Estate
2012 (2) SA 378
(WCC).
[19]
Where, as in this instance, a business rescue application competes
with a liquidation process, it is incumbent upon the business
rescue
applicant to show a reasonable prospect that business rescue option
will yield a better return than a liquidation option
Prospect
Investments (Pty) Ltd v Pacific coast Investments 97 (Pty) Ltd
2013 (1) SA 53
(FB). This has not been shown nor can it be
shown. Enormous administration costs have been incurred over
the years
as a result of the applicant’s recalcitrant attitude
coupled with endless litigation. The applicant seemed to avoid
this issue. It is a material consideration. The
administration costs, I am given to understand, have tremendously
escalated to astronomic figures by now. It would, therefore,
appear that business rescue cannot be a viable application now
–
not that it ever was. Now, more than ever before, the survival
crisis has lamentably deepen.
[20]
When the interests of the company in liquidation, including the
wishes of the shareholders, and the interest of the creditors
are
weighed up those of the creditors should carry the day. The
collective body of creditors is the major creditor of the companies
in liquidation. There is no sound reason why they should be
compelled to await the uncertainty of the business rescue application
and not be paid the moment the estates are wound-up in accordance
with the liquidation and distribution account. Before the
rescue option may even be considered, there has to be a viable
business that is worth rescuing. Where there is none- the
rescue mission is not worth a while.
[21]
The business rescue application must be brought in good faith and for
a proper purpose. It should not be tainted or actuated
by an
ulterior motive such as to suspend and delay the liquidation
process. It must be brought by an applicant with clean
hands –
Henochsberg:
Commentary on the Companies Act
;
section 131 – General Noted. It appears that the
application has as its true purpose the delaying of the winding-up,
to frustrate the liquidators, to spite Carol, to establish a
pre-winding-up state where Andre, John and Jacqueline are in control
of the companies to the total exclusion of Carole and then to
continue doing with the farms as they please.
[22]
An application for leave to appeal has to set out the grounds of the
envisaged appeal clearly, succinctly and unambiguously
to enable,
first and foremost, the respondent and, of course, the court –
to be fully appraised of the case which the applicant
seeks to make
out, which the respondent has to meet, which the court of first
instance missed and which the appellate court is
invited to uphold –
Erasmus:
Superior Court Practice
,
at B1-356. See also
Songono
v Minister of Law & Order
1996 (4) SA 384
(E) at 385I-J.
[23]
On behalf of the 4
th
intervening party it was submitted that no serious attempt has been
made by the applicant, in respect of each ground of appeal,
to show
why it was ultimately submitted that it was reasonably possible that
another court may come to a different conclusion.
It was also
colloquially submitted, in view of this particular shortcoming alone,
that the application for leave to appeal
did not come out of the
starting blocks. The critique was not without substance.
Now I proceed to examine the grounds
of the contemplated appeal.
*[24]
As regards
the
first ground
of appeal, the issue concerned the finding of the court that business
rescue management could not be an appropriate remedy in a
case of a
small, non-trading, and solvent business enterprise. vide par
1.3 notice of application
[25]
Mr Van Rensburg, counsel for the applicant attacked the above finding
as a misdirection. The foundation of counsel’s
submission
was the court ignored the provision or rather the definition of the
concept “business rescue” in section
128(1)(b)(iii)
Companies Act 71/2008. The section is located in chapter 6
which specifically makes provision for the restricting
of “property”
of company in a manner that maximises the likelihood of a company
continuing in existence on a solvent
basis. Counsel further
also argued that the first and the second respondents could not, by
any stretch of imagination, be
correctly regarded as small companies
because, as counsel said, their combined capital value was
approximately R80,0 million.
[26]
Mr Preis, counsel for the first, second and third intervening
parties, supported the finding of the court. Counsel contended
that indeed intervention by way of business rescue management could
not be an appropriate remedy for the two sister companies already
deactivated by the debilitating impact of the liquidation
proceedings. The underlying reason for the finding was that it
was just and equitable to all concerned to wind-up the two family
companies because of the acrimonious infighting among the
shareholders.
[27]
Mr Halgryn, counsel for the 4
th
intervening party, also supported the finding. Counsel
contended that the applicants first ground of appeal did not take
into account a significant related finding by the court which finding
was previously made by the full bench of this division.
The
finding was that the companies concerned were designed to be family
business enterprises operated on the basis of equal participation
of
all the sibling shareholders.
[28]
Implicit in that equal participatory mode of corporate governance was
the notion of ultimate mutual benefits. It is a
lamentable
state of affairs to see just how the five shareholders, as siblings
have been incapable of understanding that very basic
fact. This
is a material consideration. No court can disregard it as
irrelevant. It is not irrelevant, it has
never been and it
never will. It still arguably remains one most important factor
which has to be taken into account in adjudicating
the application at
hand. In my view it was correctly taken into account by Hancke
J.
[29]
It was, on no less than three previous occasions, considered relevant
by the court of first instance, Daffue J, by Wright AJ,
and by the
full bench of this division. Above all these, it was also
considered relevant by the big brother, the Supreme
Court of
Appeals. It must be readily appreciated, therefore, that Hancke
J was in good company. As I see it, the issue
is no longer open
for any debate anymore. I am not persuaded that another court
may hold differently in the future.
[30]
In desperate attempt to persuade me that the companies were not small
domestic entities, the applicant sought to argue that
the combined
capital value of the two farms was about R80,0 million. The
figure was comparatively a whole lot higher than
his previous
estimate as stated in the founding affidavit. Whether the true
value was R17,7 million or R21,0 million or R80,0
million, on the
open market the companies remained small in the sense that together
they have only five shareholders.
-
“anx 1” p213-4 Hancke J.
[31]
The companies have no employees. They do not actively trade.
They own two farms. Accordingly, there is no
trading business
enterprise to be rescued. These were the circumstances when the
first business rescue application was launched
about three or so
years ago. These are still the prevailing circumstances today.
Virtually nothing has changed between
the first and the second
business rescue applications. See
First Rand Bank v
Normandie Restaurants
[2016] (189/2016) ZASCA 178
(25.11.2016).
*[32]
As regards
the
second ground
of appeal, the issue revolved around the family fued. The
founding siblings are Andre, Johnny, Jacqueline, Carol and Pieter.
They are the five Knipe children.
[33]
Mr Van Rensburg had this to say about the family fued:
“
The
honourable judge also overemphasized the reasons advanced by Daffue J
in the liquidation proceedings … that it is …
just and
equitable to liquidate the companies due to the (then family fued.
It is with respect submitted that the honourable
judge erred in not
taking into account that the applicant secured the support of three
of the five siblings, thereby having 80%
of the shareholders
supporting the business rescue application.”
[34]
It was common cause that prior to the provisional liquidation order,
the three siblings, namely: Andre, Johnny and Jackie
called the
shots. They managed the business affairs of the family
companies to the exclusion of the other two siblings, namely;
Carol and Pieter. The two were marginalized. There was
virtually no meaningful dialogue between the two hostile factions
of
the siblings. Such disintegration of familial bounds negatively
affected the farming operations to the detriment of all
the
siblings. Hancke J held that the siblings could not approach
any issue relative to the companies with open minds and
in utmost
good faith as one would ordinarily expect from siblings. The
relational conflict created a rift too deep to bridge
at this
juncture.
[35]
Some of the siblings ignored the reality that the companies, designed
to be family enterprises, were rooted on the solid foundation
of
equal and participative management by all the siblings.
[36]
It was contended by the applicant that the court erred by not taking
into account that the applicant had secured the support
of three of
his four siblings. The point being that in the second business
rescue application before Hancke J, unlike in
the first business
rescue application before Wright AJ, 80% of the shareholders support
the business rescue application and that
only 20% of the shareholders
was opposed to such a scheme. Consequently it was submitted
that Carol’s refusal to cooperate
with the business rescue
practitioner would be of no significance seeing that she would be a
minority shareholder, the proverbial
voice in the wilderness, so to
speak.
[37]
The applicant’s contentions were flawed. Hancke J never
made a finding to the effect that the support of all the
five
shareholders was necessarily required for a business rescue
application to succeed. What Hancke J correctly found was
that
the interest of all the stakeholders should be considered including
but not limited to those of the shareholders who opposed
the business
rescue application. Hancke J first quoted section 7(k)
Companies Act 71/2008. The section requires the
balancing of
the interest of all stakeholders. It is, therefore, clear and
obvious, that his lordship correctly applied the
principle.
[38]
Moreover, the founding values of equal participation and equal
decision-making by all the siblings as stakeholders, militates
against the application of the principle that majority rules.
There is simply no room for such a principle in these family
enterprises. It must be kept in mind that business rescue
management, even if it were granted, would not be a permanent feature
of the farming operations of the companies. At some point the
business rescue practitioner would be bound to vacate his post
and
hand the rehabilitated companies back to the sibling shareholders.
Given the peculiar acrimomous of the siblings, the
most likely
prediction is that the family fued would erupt once again. That
is a material consideration.
[39]
The court held that business rescue management spearheaded by a
business rescue practitioner could not and was not designed
to remedy
the ailment which caused the rot in the family enterprises now in
liquidation. The ailment appeared to be incurable.
The
rot stemmed from deep distrust, frequent deadlock, bitter family
feud, intense hatred and endless litigation among the shareholders.
This sad state of affairs has had a drastically adverse impact on the
otherwise enormous and opulent legacy bequeathed to the five
sibling
shareholders by their industrious and incredibly successful parents.
These siblings will live to regret all these.
[40]
The above analysis and conclusion is fortified by the definition of
“business rescue” in section 128(b) Act No
71/2008.
According to the section, business rescue “
means
proceedings to facilitate the rehabilitation of a company that is
financially distressed …
”
(my
own emphasis.)
If
I followed the argument of Mr Preis and Mr Halgryn very well, and I
think I did, the family enterprises were not really wound-up
because
they were in irredeemable financial distress. Instead they were
finally wound-up on account of the absolute destruction
of the
personal relationship(s), mutual co-operation trust, and confidence
among the siblings who were anointed, with great parental
affection,
as shareholders.
[41]
Those destructive forces of the incurable ailment made it very
difficult, if not practically impossible, for the companies
to be run
and managed in a financially sound manner. It must be obvious,
therefore, that relational distress and not financial
distress
wrecked the family ship on its voyage to the treasure island.
The apparent failure on the part of the siblings to
rehabilitate
their broken family ties was the determinant factor which informed
the original decision of the court to wind up the
family companies.
*[42]
The
third ground
of the appeal was that the court erred by finding that the support of
all the stakeholders was required in order to ensure that
the
business rescue scheme succeeds. – vide par2
[43]
Mr Halgryn contended that the court never made such a finding.
During the course of his argument, Mr Van Rensburg did
not contend
otherwise.
[44]
There was substance in Mr Halgryn’s contention. All that
the court found was that the interest of all the stakeholders
should
be considered in determining whether or not the scheme should be
approved or not. Included in such interests were
those of the
stakeholders opposed to the scheme. Among them were the
liquidators or creditors and the shareholders.
[45]
It is to be stressed that the court, by way of introduction, quoted
the provision of
section 7
of the
Companies Act 71 of 2008
. One
of the several purposes of the statute is to:
“
provide
for the efficient rescue and recovery of financially distressed
companies, in a manner that balances the rights and interests
of all
relevant stakeholders.” -
Section 7(k)
There
can be no reasonable doubt, that the court correctly applied the
principle by taking into account the interests of all the
relevant
stakeholders.
*[46]
The fourth ground
was that the court erred by finding that the
support of the shareholders was required when a business rescue plan
is considered
– vide par3.
[47]
Again Mr Halgryn contended that the court never made such a finding.
The contention remained undisturbed at the end of
the oral argument.
It must, therefore, be accepted as correct. But over and above
that, if must be recognised that
the mere fact that shareholders have
no vote when a business rescue plan is considered in terms of
section
152
is, in itself, a factor which weighs heavily against the grant of
the business rescue application. In this instance, the
liquidators as the major creditors, are outspoken about their resolve
to vote against such a plan should the current application
succeed.
Of course, they – unlike the shareholders, are fully entitled
to do so.
*[48]
The
fifth ground
was that the winding-up of the companies would have destructive
consequences as opposed to the constructive advantages of the
rehabilitative redemption of the companies. - vide par 4.
[49]
I am persuaded by the argument of both counsels for the intervening
parties. The alleged misdirection was no ground of
appeal.
The reasons for the winding-up cannot be sufficiently
over-emphasized. In the circumstances of this case, they
exceedingly outweigh any conceivable advantage of the plan, which,
upon its termination, will ultimately require the mutual cooperation
of all the sibling shareholders.
[50]
Indeed any “possible destructive consequences caused by
liquidations” is not even a consideration. Firstly
the
companies could have been wound up many years ago before, their
estates were so financially diminished. Winding-up the
companies was elementary business. It would have been
uncomplicated, efficient and cost-effective. But for the
endless
litigation, the liquidators would have accomplished the
mission long ago. All that was required was to have all the
cattle,
game and farms liquidated, and the proceeds paid to the
creditors and dividends distributed among the shareholders.
[51]
It cannot be disputed that the costs relative to the administration
of the two companies in liquidation, have tremendously
escalated over
the years. Such costs can correctly be described as
destructive consequence. However, they cannot
be fairly
regarded as the destructive consequences of the liquidation process.
[52]
On the contrary, they can be objectively regarded as the destructive
repercussions of retarding the liquidation process.
For those
adverse financial repercussions, the applicants and his siblings,
with the exception of Carol, have only themselves to
blame. The
horse has thus bottled. It is now too late to close the gate.
*[53]
The sixth ground
was that the court erred by finding that the
family dispute of the past was a valid reason for refusing the
application for the
business rescue of the two family companies
whereas the future was not that bleak. - vide par 5.
[54]
The ongoing family dispute appeared to me and to the court to be an
insurmountable hurdle against any endeavour to have the
financially
distressed companies successfully rescued. The turbulent
history of the family is largely uncontested.
Any denial of
that history would be palpably untruthful. It is so relevant
that it cannot be wished away. The applicant
himself correctly
acknowledges that a proper and harmonious working relationship among
the siblings is impossible.
[55]
That admission sounds a death knell for any business rescue
application. At the heart of it all was the control and
management of the companies. The business enterprises were
conducted by the applicant, Mr Andre Knipe, his twin brother Mr
Johny
Knipe, and his sister, Ms Jacqueline Vigne to the total exclusion of
their sister, Ms Carol Lotz and their brother Mr Pieter
Knipe.
[56]
It should also be constantly borne in mind that statutory
intervention by way of business rescue scheme is a temporary remedy
–
section 128(b)
Act No 71/2008. Even if a business rescue
practitioner may restore peaceful management and conducive cooperate
ethos during
his or her temporary tenure on the farms, at some stage
he will have to go and return the day-to-day management of the
companies
to the directors.
[57]
In
D.H
Brothers Industries (Pty) Ltd v Gribnitz N.O and Others
2014 (1) SA 103
(KZP) par [26] Gorven J stated:
“
[26]
Business rescue proceedings place a moratorium on creditors enforcing
their claims against the relevant company. This, of course,
amounts
to a legislative intrusion into a contractual relationship between
parties. It is therefore an incursion into existing-law
territory. It
is a well-worn tenet of our law that the legislature does not intend
to alter the existing law more than is necessary,
particularly if it
takes away existing rights. There is a presumption against any
forfeiture of rights.”
[58]
In
pretty much the same vein Binns-Ward J had previously remarked:
“
It
is axiomatic that business rescue proceedings, by their very nature,
must be conducted with the maximum possible expedition.
In most
cases a failure to expeditiously implement rescue measures when a
company is in financial distress will lessen or
entirely negate the
prospect of effective rescue. Legislative recognition of this axiom
is reflected in the tight time lines given
in terms of the Act for
the implementation of business rescue procedures if an order placing
a company under supervision for that
purpose is granted. There is
also the consideration that the mere institution of business rescue
proceedings — however dubious
might be their prospects of
success in a given case — materially affects the rights of
third parties to enforce their rights
against the subject company.
”
Koen
and Another v Wedgwood Village, Golf, country Estate (Pty) Ltd &
Others
2012
(2) SA 378
(WCC) par [10].
The
plans put forward by the applicant do not accord with the nature of
the business rescue proceedings as elucidated in the decisions
I have
quoted above.
[59]
On behalf of the intervening parties, it was also argued, that there
was no indication, let alone a guarantee, of how the costs
of the
business rescue proceedings would be paid. The companies do not
have cash. Their farms are now their only assets.
The
argument was never challenged. This is not a case where a
higher or appellate court should be called upon to interfere
with the
discretion exercised against the grant of business rescue relief –
Oakdene Square
,
supra,
par [18] and [21].
[60]
Mr Preis argued that if business rescue application were granted,
much greater amounts would be expended to rehabilitated the
now
financially distressed companies than if their assets were sold in
the course of winding up the companies. The informed
estimate
was that the difference would be in excess of R2,0 million. The
figure was a realistic indication that liquidation would
be more
beneficial to the shareholders and creditors than business rescue.
[61]
There exists a reasonable apprehension that on resumption of control
of the companies, the pre-winding-up family fued, in all
its
ugliness, would once again rear its ugly head. Because, as they
say – the question of money always rears its ugly
head in
matters of business. This is a material consideration.
The say-so of the twins and their supportive sister
that they will
step aside and back up the appointment of independent directors,
gives no joy to their other unsupportive sister,
Carol. She
totally disbelieves them. To her the assurance of her previous
oppressors means absolutely nothing.
She fears, for perfectly
understandable reasons, that nothing will prevent them from removing
the proposed independent directors
and from re-appointing themselves
once again as directors. They have already started running the
4-1 victory lap since they
won the support of Mr Pieter Knipe, who
was Carol’s only ally. Their reliance on their newly
acquired numerical strength
underlines the danger. They will
not hesitate to invoke their increased majority voting power in the
future to remove the
proposed independent directors in order to
exclude Carol and call the oppressive shots yet again.
[62]
Mr Halgryn argued that the current application was more important for
what was unsaid than what was actually said:
“
He
and his fellow sibling shareholders want the farms to return to the
state prior to their winding-up, where they were in control
of it,
after unlawfully spoliating Carol, appointing themselves as the
directors and then going on an illegal shooting spree of
cattle and
game on a scale which is mind-boggling and removing the carcasses
with (sic) cool trucks – all of this, whilst
telling Carol to
shut up – as she was only in the minority.”
The
submission is compelling.
*[63]
The seventh ground
of appeal was that the opposing affidavit
of Ms Carol Lotz and that of Mr Senekal
“
are
almost a carbon copy of each other”.
According
to the applicant the similarity was so striking that it indicated or
as he put it
“…
confirmed
the fact that there is collaboration between the liquidators, as
represented by Mr Senekal, and Ms Carol Lotz”
–
vide
par 6.
[64]
The fact that one sibling shareholder says what she says about her
fellow sibling shareholders – speaks volumes.
She regards
her siblings as
“
thugs,
bullies and thieves who made her parent’s life hell during
their lifetime.”
vide
par 94 of her answering affidavit on p716 of the record.
Referring
to her twin brothers and sister, she said the following:
“
They
hate me as much as I hate them.”
Vide
par 100 on p717 record.
[65]
It cannot be said that the court committed any material and
appealable misdirection in those circumstances. Certainly
the
point belatedly complained of, cannot be regarded as a ground of
appeal. I am persuaded that it has no merit.
*[66]
The eight ground
was that the intervening parties were so
hell-bend on opposing the proposed business rescue scheme that they
would do so irrespective
of its prospects of success. -
vide par 7.
[67]
The opponents of this application argued that the point suffered from
lack of sufficiency of details. The allegations
regarding the
proposed business rescue schemes were pitifully vague. Yet
again the critique was levelled at the conduct of
the intervening
parties and not the reasons of Hancke J for the order he made.
The point was no valid ground of appeal, in
my view.
*[68]
The
nineth ground
was that the court should have found but failed to find that the
intervening parties had no good intentions to act in the best
interest of the companies. - vide par 8.
[69]
On behalf of the intervening parties it was contended that the court
was correct in finding that the applicant’s conduct
in applying
again for the business rescue schemes of the companies constituted an
abuse of process. Hancke J took such a
dim view of the conduct
of the applicant that he showed his displeasure with a punitive costs
order.
[70]
Mr Preis submitted that the issues currently relied upon were never
previously raised on the papers; that it was legally
impermissible to do so in this manner; that the applicant’s
submission was without merit; and that the application
for leave to
appeal constituted frivolous and vexatious litigation. Counsel
described the application as a contrived afterthought
primarily
designed to suspend the winding-up process and to frustrate its
finalization. I am inclined to agree.
[71]
Mr Halgryn was also dismissive of this particular point. He too
described it as a frivolous point. He stressed
that the reason
why Wright AJ dismissed the applicant’s first application for
the rescue of the family business was significant.
Her lordship
found, and correctly so, that the applicant’s delay was in
excusable. If that is so, then the current
delay, whose
magnitude was more than double the delay in the applicant’s
first similar application, is fundamentally more
destructive and
totally inexcusable.
*[72]
The
tenth ground
was no ground of appeal at all. It was not based on allegations
contained in any of the affidavits. Consequently it
constituted
new matter which was procedurally and legally not supposed to be
raised in this unprocedural fashion.
[73]
That being the case, the point deserves no further attention, seeing
that the point was never argued before Hancke J.
The contention
that the point constituted new, scandalous and vexatious material was
sound.
*[74]
This completes my consideration of the grounds of appeal. Now I
proceed to miscellaneous issues such as the conclusion;
the
costs and the order. It was submitted that no case had been
made out for the relief sought in pars 10 and 11 of the applicant’s
notice. I am persuaded that there exists no possibility that
another court would interfere with the various findings earlier
made
by the court and subsequently attacked by the applicant in these
proceedings. I am not persuaded that the delay was
chiefly
occasioned by any other factor other than the applicant’s own
conduct.
[75]
Given all the peculiar circumstances of this particular case, I am
inclined to conclude that an appeal, against the second
refusal to
have the companies placed under business rescue management, would not
have a reasonable prospect of success. Moreover,
there is
virtually no other compelling reason why leave to appeal should be
granted.
[76]
As regards costs, the parties urged me, obviously for different
reasons, to award costs on the special scale as between attorney
and
client. More compelling circumstances than those of the current
application are rare to find. The four intervening
parties have
emerged victorious – consequently they are entitled to the
fruit of their success. This application for
leave to appeal –
over and above the fact that it was fatally flawed and exceptionally
late – it was as spurious as
the main application for the
business rescue remedy itself. I would, in these circumstances,
award costs on a punitive scale
in favour of the four intervening
parties. The reserved costs of 16 March 2017 are
included.
[77]
In view of all these considerations, I am not persuaded that Hancke J
committed any material and appealable misdirection as
alleged or on
any other ground whatsoever be it on any question of law or on any
matter of fact. I am of the opinion that
the contemplated
appeal would have no reasonable prospect of success on appeal.
I am also of the opinion that there is no
other compelling reason why
the higher or appellate court should be burdened with the hearing of
such an unmeritorious appeal.
Leave to appeal may only be given
provided the applicant passes the test in terms of ss1(a)(i)
reasonable prospect or ss1(a)(ii)
some other compelling reason.
In my view the applicant failed the requisite stringent test in terms
of sec 17. It follows,
therefore, that in the absence of either
a reasonable prospect or a compelling reason, no other court may come
to a different conclusion.
I would, consequently refuse leave
to appeal.
[78]
Accordingly I make the following order:
1.
The applicant’s application to have the first and the second
respondents placed under business rescue management
is refused.
2.
The applicant pays the costs hereof, on the punitive scale as between
attorney and client.
3.
Such costs shall include the wasted costs occasioned by the
postponement of the 16 March 2017.
_____________
MH
RAMPAI, J
On
behalf of applicant:
Adv FG Janse van Rensburg
Instructed
by:
Horn & Van Rensburg
Bloemfontein
and
Stuart van der Merwe
Incorporated
Pretoria
On
behalf of 1
st
, 2
nd
& 3
rd
intervening parties: Adv DA Preis SC
Instructed
by:
Matsepes Incorporated
Bloemfontein
On
behalf of the 4
th
intervening party:
Adv L Halgryn SC
Instructed by:
Lovius Block
Bloemfontein