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[2016] ZAFSHC 93
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Matsepe N.O. and Another v Venter and Another (4901/2015) [2016] ZAFSHC 93 (21 April 2016)
IN
THE HIGH COURT OF SOUTH AFRI CA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 4901/2015
In
the application of:
TSIU
VINCENT MATSEPE
N.O.
FIRST APPLICANT
ANTON
OTTLIE NOORDMAN
N.O.
SECOND APPLICANT
and
ELIZABETH
MARIA
VENTER
FIRST RESPONDENT
MASTER
OF THE HIGH COURT
BLOEMFONTEIN
SECOND RESPONDENT
CORAM:
NAIDOO, J
HEARD
ON:
12 NOVEMBER 2015
JUDGMENT
BY:
NAIDOO, J
DELIVERED
ON:
21 APRIL 2016
NAIDOO
J
[1]
This is an application in which the applicants seek the following
order (loosely translated):
1.
That the order under case number 3510/2015 is extended;
2.
That the order set out in 1.5 herewith is extended;
3.
The distribution of the estate of Sebal Beleggings (EDMS) Bpk, with
registration number , must take place on or before
30 April 2016;
4.
That the date of 16 October 2015 be amended to 15 March 2016;
5.
Paragraph 1.4.2 be amended to read that seven days after the receipt
of the report of the Commissioner, the
applicants are to be informed,
in writing, of which claims of proven creditors have been accepted;
6.
Advocate Charles Stewarts be appointed as Commissioner in terms of
section 418 of the Companies Act 61 of 1973
(the Act).
Prayer
6 further sets out orders sought in respect of the powers and duties
of the Commissioner, procedural aspects of a commission
of enquiry as
well as costs. The first respondent opposes the application. The
applicants were represented in this court by Mr
PJJ Zietsman and the
respondent by Mr FG Janse Van Rensburg.
(For
the sake of clarity, I mention that the prayer 6 which
originally
appeared in the Notice of Motion was deleted so that all following
prayers were sequentially re-numbered, hence prayer
7 became prayer
6, prayer 8 became prayer 7, and so on. The re numbered Notice
of Motion is what is referred to in this judgment.)
BACKGROUND
[2]
This matter is the ninth application in a history of acrimonious
litigation between the parties. It is perhaps useful to sketch
a very
brief background to the current application. The company Sebal
Beleggings (EDMS) BPK (Sebal) was placed under voluntary
liquidation
as a result of a special resolution passed by Sebal on 8 August 2012
and registered on 13 August 2012. The first and
second applicants
were appointed as liquidators of Sebal by the Master of the Free
State High Court (the Master) on 22 November
2012. A number of
applications to this court were subsequently launched (between March
and November 2015) by the applicants as
well as the first respondent.
The first respondent tried more than once to have the applicants
removed/suspended as liquidators.
After one such attempt, the Master
found, in February 2015, that there were no grounds for the
suspension/removal of the applicants
as liquidators.
[3]
It is unnecessary in this judgment to traverse each and every
application that came before this court. The applications that
are of
relevance in this matter, and which bear mention, are those bearing
case numbers 1716/2015, 3510/2015 and 3671/15 respectively.
In case
number 1716/2015, the first respondent sought, in April 2015, the
removal of the liquidators, which according to the Founding
Affidavit
has not yet been finalised. In August 2015, the first respondent
brought an urgent application under case number 3510/2015
in which
she sought the lifting of the voluntary liquidation of Sebal on
certain condition, one being that she pay security. Not
long
thereafter the trustees of an entity known as Robyn Trust, allegedly
a creditor of Sebal, brought another application
under case number 3671/2015
for the conversion of the voluntary
liquidation of
Sebal into a compulsory liquidation (the Robyn Trust application).
[4]
I mention at this point that preceding the Robyn Trust application,
an agreement was entered into, on 6 August 2015, by Robyn
Trust, and
entity known as FVR Investment Holdings (Edms) Beperk (FVR) and the
first applicant in her capacity as the sole shareholder
and director
of Sebal, which was, at that stage, in voluntary liquidation. In
terms of the agreement, Robyn Trust ceded its claim,
in an amount of
Eight Hundred and Forty three Thousand Five Hundred and Fifty Six
Rand and Fourteen Cents (R843 556.14), against
Sebal to FVR, which
was obliged to pay the said amount to Robyn Trust within 21 days of
the signing of the agreement. It was also
agreed, inter alia, amongst
the parties that if FVR failed to make the payment within the
stipulated time, Robyn Trust will be
entitled to obtain an order, on
an unopposed basis, for the compulsory liquidation of Sebal. The
first applicant consented to the
liquidation of Sebal (as
contemplated). FVR failed to make payment as agreed, hence the moving
of the Robyn Trust application.
[5]
On 27 August 2015, my brother Daffue J granted an order (the Daffue
order) in case number 3510/2015, lifting the liquidation
of Sebal on
certain conditions, inter alia, the provision of security by the
first respondent. The order also authorised and ordered
the
applicants to hold a meeting of creditors, in consultation with the
Master, on or before 30 September 2015, for the purpose
of proving of
creditors' claims. Such a meeting of creditors was held on 22
September 2015. The Daffue order also prescribed dates
by which
certain conditions had to be fulfilled and certain actions had to be
taken. The amendment of some of
these dates
is being sought by the applicants in this application.
[6]
On 17 September 2015, Murray AJ, granted an order in
the Robyn Trust application, converting the
voluntary
liquidation into a compulsory liquidation and placing Sebal under
provisional liquidation. A
rule nisi
was issued, returnable on
29 October 2015. It seems that on 29 October 2015, following an
agreement by the representatives of Robyn
Trust, FVR and the first
respondent, the
rule nisi
was discharged.
I pause to note that at the time the Founding Affidavit in
this matter was
deposed to (16 October
2015), the
rule
nisi
in the Robyn Trust
application had not been discharged.
[7]
The first respondent's Answering Affidavit in this matter was filed
on 2 November 2015, in which she raised two points
in
limine.
Firstly, she alleges that the applicants
have no
locus standi
to bring this application because
the voluntary liquidation of Sebal was converted to a compulsory
liquidation and the
rule nisi
placing Sebal under
provisional liquidation was discharged. The first respondent's
contention is that the conversion of the voluntary
liquidation into a
compulsory liquidation had the effect of rendering the Daffue order a
nullity. The applicants were, therefore,
not entitled to act in terms
thereof. The discharge of the
rule nisi
meant that Sebal was
no longer in liquidation and thus the applicants were no longer
liquidators of Sebal, depriving them of locus
standi to bring this
application.
[8]
The second point
in limine
is that this application is
premature. The contention in this regard is that the order converting
the voluntary liquidation to a
compulsory liquidation was made on 17
September 2015. The Daffue order was rendered a nullity by that
order. Therefore the creditors
meeting held by the applicants on 22
September in pursuance of the Daffue order is also a nullity, as the
liquidators did not have
the authority to hold that meeting. The
first respondent alleges further that the applicants ought to have
investigated creditors'
claims in terms of section 45 of the
Insolvency Act 24 of 1936 (the
Insolvency Act), prior
to the
launching of this application, which they failed to do. The
application should for the reasons set out above, be dismissed
with
costs.
[9]
The applicants filed a Replying Affidavit, countering the
allegations in the Answering Affidavit. I will highlight
a few of
these counter-allegations. Firstly, the applicants allege that the
discharge of the provisional order for compulsory liquidation
has the
effect that the status quo prior to the granting of the provisional
order is revived, meaning that the voluntary liquidation
of Sebal is
revived and that they remain the liquidators of Sebal. Mr Zietsman
pointed out in the Heads of Argument that the Daffue
order was made
on 27 August 2015, prior to the provisional order on 17 September
2015, placing Sebal under compulsory liquidation,
and in terms of the
Daffue order, the (voluntary) liquidation was lifted on certain
conditions. The provisional order of 17 September
2015 could not have
had the consequence of causing the Daffue order to fall away or
become a nullity. The Daffue order remained
in force and the
applicants were entitled to act in terms of thereof in holding the
creditors' meeting on 22 September 2015. The
applicants also aver
that the provisions of
section 45
of the
Insolvency Act are
insufficient to hold a proper investigation into
and to properly assess the discrepancies and
contradictions
in this matter (as contained in a letter they
addressed to the Master of the High Court). They allege that, in any
event, section
417(1) of the Act makes provision for the holding of
an enquiry at any time after the grant of a liquidation order, and
for the
purposes of the Act a liquidation order is interpreted to
mean either a provisional or final order of liquidation. Therefore
the
orders they seek in the Notice of Motion will be the appropriate
course to follow and persist with the application.
ISSUES
[10]
The issues in this matter are therefore whether
10.1
the court order of 17 September placing Sebal under provisional
compulsory liquidation had the
effect of extinguishing the voluntary
liquidation;
10.2
the Daffue order became a nullity upon the grant of the order on 17
September 2015;
10.3
the discharge of the provisional order for compulsory liquidation on
29 October 2015 extinguished
entirely the liquidation proceedings
against Sebal, depriving the applicants of locus standi in this
matter, and
10.4
the launch of this application was premature because an investigation
in terms of
section 45
of the
Insolvency Act should
first have been
held.
The
Law
[11]
Section 344 of the Act is the source of a court's power to grant a
winding up order, and sets out the circumstances in which
a company
may be wound up by the court. It has been held in a number of cases
that the purpose of winding up proceedings is not
to recover a debt
but to establish a
concursus
creditorum
, where
payment of creditors' claims may be recovered in terms of the Act.
(See
Henochsberg
On The
Companies
Act,
p692)
In the case of a voluntary
liquidation, the
concursus
is established upon the
registration of the special resolution
to place the
company in liquidation (section
352 of the Act) and in the case of compulsory liquidation, the
concursus
is established when the
application is presented to court (section 348). The intention in any
winding up (compulsory
or voluntary) is
that a
concursus
should ensue in order that
there is an orderly and controlled
realisation and distribution
of the company's assets and property.
(see Henochsberg, page
738).
In the established case of
Walker
v
Syfret
NO
1911 AD
141
,
(a copy of
which Mr Zietsman kindly furnished to this court), Innes J, at page
166 affirmed that "The object of the Insolvent
Ordinance is to
ensure a due distribution of assets among creditors in the order of
their preference. And with this object all
the debtor's rights are
vested in the Master or the trustee from the moment insolvency
commences."
[12]
Section 347 of the Act sets out the powers that the court hearing a
winding up application has, and the various orders it is
capable of
making, for example, it may grant or dismiss the application, adjourn
the application, conditionally or unconditionally
make an interim
order, or any other order it deems appropriate. Section
350 sets out the requirements to be complied
with before a voluntary
liquidation is deemed to have been instituted. Section 354 empowers a
court, upon proof to its satisfaction,
to make an order staying,
setting aside or continuing winding up proceedings. Section 388,
which deals only with a voluntary winding
up gives the liquidator,
member or creditor the right to apply to court to determine any
question in the winding up, for example
whether the company is able
to pay its debts or not, determining the manner in which the
company's assets are to be distributed,
etc. Section 417 makes
provision for the Master or the court to summon and examine any
person in relation to the affairs of the
company, while the
provisions of section 418, empower the Master or the court to
delegate his/its powers in terms of section 417
to a commissioner.
[13]
The main object of a winding up is therefore to ensure that the
rights of the general body of creditors are taken into account
and
that all creditors are treated fairly. (see the
Walker
case, referred to above, at p166). I have referred in paragraph
11 above to the dates stipulated in the Act when the winding up
process both in a voluntary and a compulsory liquidation are deemed
to commence. In the case of
Nel and
Others
v
The
Master
of
the
High Court
and
Others
2002(3)
SA
354
(SCA),
at paragraph 6, the court remarked that an order for winding up
of a company, be it a provisional or final order, is not personal
to
the petitioning creditor but determines the status of the company,
which in that case was that the company was provisionally
in
liquidation, which carried all the consequences of such a status,
including the creation of
concursus.
Such
concursus
was established on the date that the application was presented to
court and endured even when the provisional order was discharged
and
the application of an intervening creditor for a final liquidation
order was granted. The court found that the discharge of
the
provisional order did not terminate the
concursus.
The
court in Nel cited with approval the case of
Milne N.O. v
Deputy Sheriff and Others
1955(3) SA 160 (N) at
161 A-F,
where the court held a similar view.
[14]
In the present matter, Mr Zietsman validly points out that the
Daffue order conditionally lifted, on 27 August 2015,
the voluntary
liquidation of Sebal stipulating the fulfilment of certain
conditions. At the time the Robyn Trust application was
launched on
17 September 2015, therefore, the voluntary liquidation of Sebal had
been lifted, albeit conditionally. There is no
dispute in the current
matter that the requirements for a voluntary liquidation were
complied with and that the special resolution
(in terms of section
349 of the Act) was properly registered in terms of section 200. In
my view therefore, there can be no dispute
that the
concursus
creditorum
was established on the day that the
special resolution was registered, namely, 13 August 2012. The Robyn
Trust application, which
resulted from a failure by FVR to honour the
terms of an agreement entered into with Robyn Trust and the first
respondent, was
that of a single creditor, which sought to better
protect its rights. By the return date, the claim of the creditor
(Robyn Trust)
against the company had been paid by FVR, thus
fulfilling the terms of the contract and making it unnecessary for
the provisional
order (for compulsory liquidation) to be made final.
[15]
The applicants contend that the other creditors did not intervene in
or react to the application for conversion of the voluntary
liquidation into a compulsory liquidation because they did not
know that the petitioning creditor (Robyn Trust) no
longer had
locus
standi
because a third party (FVR) paid
the debt. To my mind, FVR would, in any event, have replaced Robyn
Trust as a creditor of Sebal
and would have become part of the
already established
concursus.
The cession of Robyn
Trust's claim in terms of its agreement with FVR was a transaction
between them, with the concurrence of the
first respondent, who
consented to an order for compulsory liquidation being
taken, on an unopposed basis.
From the wording of the
cession agreement and the rest of the papers before me, it appears
that the intention of the parties was
to secure the rights of Robyn
Trust and obtain payment of its claim against Sebal. Once this claim
was paid by FVR (prior to the
return date), Robyn Trust, FVR and the
first respondent saw no further necessity to confirm the provisional
order for compulsory
liquidation and agreed to the discharge of the
order.
[16]
The crisp point to be decided in relation to the Robyn Trust
application is whether the discharge of the provisional order
for the
compulsory liquidation of Sebal terminated the liquidation
proceedings and rendered the Daffue order a nullity. As I pointed
out
earlier in this judgment, the
concursus
was established on 13
August 2012. Several steps were taken by the liquidators since their
appointment in November 2012 in pursuance
of the finalisation of the
winding up process, including the proof of creditors' claims at the
first and subsequent meetings of
creditors. The conversion of the
voluntary liquidation into a compulsory liquidation and the order for
the compulsory liquidation
of Sebal were provisional. The words in
the cession agreement, "..
.aangepas
tot
die
mate
wat
nodig
mag
wees
inaggenome die
opheffing
van
die
bestaande likwidasiebevel,
al
dan
nie
..
.."
indicate that the parties to that agreement were, at that stage, well
aware of the Daffue order and the import thereof.
In my view it could
not have been within the contemplation of the parties in the Robyn
Trust application that the
concursus,
established almost three
years prior, or the liquidation proceedings should be permanently
terminated. I am therefore, constrained
to find that the Robyn Trust
application could or did terminate the
concursus
which was
established a few years prior to the application. In addition, the
only logical conclusion to be drawn
from the
first respondent's consent to such an order (in the context of the
cession agreement) is that she acknowledged
that the company
(Sebal) was unable to pay its debt to Robyn Trust.
To
interpret the legislation in the manner contended for by the first
respondent would lead to an absurdity and would fly in the
face of
the objects of the Companies Act and the
Insolvency Act, with
regard
to the liquidation of companies. In my view the discharge of the
provisional order on 29 October 2015 had the effect that
the status
quo in respect of the voluntary liquidation was revived and it
continued as it was prior to the date of the grant of
the provisional
order. I also hold the view that the Daffue order was not rendered a
nullity by the grant of the provisional order
on 17 September 2015,
and the applicants were entitled to act in accordance therewith. The
first respondent herself appears to
have acknowledged the validity of
the Daffue order, when she brought a subsequent application for the
creditors' meeting, held
by the applicants on 22 September 2015, to
be set aside and for such a meeting to be re-scheduled.
[17]
With regard to the effect of a compulsory winding-up order on a
voluntary winding-up order, the remarks of the court in the
early
case of
Schlesinger
v
Ingle Colonial
Broom Co. Ltd
1924 CPD
255
at
258
(a copy of which was also part of the bundle compiled by Mr
Zietsman) are still applicable:
"It
would certainly be a surprising thing if the mere making of a
compulsory order were to have the effect of setting aside
all the
acts done by the voluntary liquidator who may have been conducting
the liquidation for a considerable time and may have
made all kinds
of contracts under the powers given to him by
secs 182
and
149
**
I
do not think that sec 194** of the Act has that effect. I find that
under the corresponding sections in the English Acts it has
been held
that a compulsory winding-up order does not nullify or abrogate what
has been done under a voluntary winding-up order
nor avoid
ab
initio
all proceedings taken in it" (** a
reference to Act 25 of 1892).
The
first respondent's contentions in this regard cannot, therefore, be
sustained.
[18]
With regard to the second point
in limine,
taken by the first
respondent, I am similarly of the view that this contention cannot be
sustained. I have already found that the
grant of the provisional
order did not nullify the Daffue order and that the eventual
discharge of the provisional order for compulsory
liquidation caused
the voluntary winding up of Sebal to be revived. The liquidators
(applicants) were, therefore, not deprived
of
locus standi,
nor was this application premature on that ground. In any event,
I agree with Mr Zietsnman's submission that the Daffue order was
never set aside and, as such, continues to be of force and effect.
The conditional upliftment of the voluntary winding-up by the
Daffue
order would also fall away in the event of the conditions stipulated
therein not being fulfilled. As at the date of the
launch of this
application, the applicants allege that the conditions imposed on the
first respondent by the Daffue order had not
been fulfilled. The
applicants complied with one of the conditions, in holding the
creditors' meeting on 22 September 2015.
[19]
The other leg of the second point
in limine
is that an
investigation in terms of
section 45
of the
Insolvency Act should
first have been held before this application was launched. The
applicants allege that such an investigation was held and that the
provisions of
section 45
were not adequate to allow for the extensive
investigation of the contradictions and disputes in this matter that
is required.
The letter to the Master which the applicants rely on
starts out by indicating that an investigation was done in respect of
claims
of creditors and sets out in detail the situation pertaining
to the respective creditors' claims that have been proved, as well
as
the necessity to undertake a detailed investigation in respect of
such claims, given the discrepancies, and disputes that have
arisen.
I am in agreement that the provisions of
section 45
of the
Insolvency
Act may
well be inadequate to achieve the results that the applicants
intend, in the interests of all creditors of Sebal. It seems that
the
wider and more extensive enquiry sought by the applicants is
necessary in this matter. On this score too, the first respondent's
contentions cannot be sustained.
[20]
Section 417 of the Act, which should be read with section 418,
applies only to the compulsory winding up of a company which
is
unable to pay its debts, and does not apply to a company being wound
up voluntarily by creditors. Henochsberg (page 887 and
the cases
cited therein), submits that the court, acting in terms of section
388 of the Act, can order that section 417 be applicable
to a
voluntary winding-up. In my view, the papers raise many questions,
especially with regard to large sums of money which must
be accounted
for and the fact that the company appears to be unable to pay its
debts pay its debts. It would certainly be in the
interests of all
creditors that these matters be properly and thoroughly investigated.
Section 418 permits the court to delegate
its powers in terms of
section 417 to a commissioner.
Henochsberg
(page 888)
correctly makes the point that, in practice, the court does not
usually undertake the examination itself but directs
that a
commission of enquiry be held, under the direction of a commissioner
appointed by the court. I see no reason why the
present
case should be an exception. I am
accordingly satisfied that the applicants have
made out a case for
the relief they seek.
ORDER
[21]
In the circumstances, I make the following order:
21.1
The order under case number 3510/2015 is extended;
21.2
Paragraph 1.5 is amended to read that the distribution of the
insolvent estate of
Sebal Beleggings (EDMS) BPK with registration
number 2006/012369/07 must be finalised on or before 31 October 2016;
21.3
The date of 16 October 2015 mentioned in paragraph 3 of the order
under case number
3510/2015 is amended to read 15 September 2016;
21.4
Paragraph 1.4.2 of the order is amended to read
"die eise
van die bewese skuldeisers binne
7
(sewe)
kalenderdae nadat die verslag
van die
Kommissarisn
ontvang
is,
di
Applikante
skriftelik verwittig word van welke eis
anvaar word"
21.5
That Advocate Charles Stewarts (the Commissioner) is hereby appointed
as Commissioner
in terms of the provisions of section 418 of the
Companies Act 61 of 1973;
21.6
An order in terms of prayers 6.1 to 6.7 of the Notice of Motion,
relating to the powers
and duties of the Commissioner, as well as
processes and procedures to be followed, is granted;
21.7
An order in terms of prayers 7, 8, 9 and 10 of the Notice of Motion
is granted.
__________________
NAIDOO,
J
On
behalf of Applicants: Mr PJJ
Zietsman
Instructed
by:
Matsepe Attorneys
26/28 Aliwal Street
BLOEMFONTEIN
(FJ Senekal/SEB26/0001)
On
behalf of Respondent: Mr FG Janse Van
Rensburg
Instructed
by:
Taylor and Nagel Attorneys
c/o Jacobs Attorneys
16 Leviseur Street
Westdene
BLOEMFONTEIN
(VEN 32/0001)