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[2016] ZAGPPHC 706
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Cawood NO and Others v Delport and Others (57094/2016) [2016] ZAGPPHC 706 (16 August 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
REPUBLIC
OF SOUTH AFRICA
CASE
NUMBER: 57094/2016
Reportable:
no
Of
interest to other judges: No
Revised.
Date
Heard: 10 August 2016
Date
delivered: 16 August 2016
In
the matter between:
WERNER
CAWOOD
N.O.
First
Applicant
MATHEUS
JOHANNES SCHELCHTER
N.O
Second
Applicant
(In
their official capacities as business rescue practitioners for the
third applicant)
EKURHULENIFM
(NPC) T/A EAST RAND STEREO
Third
Applicant
(in
business rescue) and
WILLEM
JOSEPH
DELPORT
First
Respondent
ABSA
BANK
Second
Respondent
FIRST
NATIONAL
BANK
Third
Respondent
THE
COMPANIES AND INTELLECTUAL
PROPERTY
COMMISSION
Fourth
Respondent
JUDGMENT
JANSE
VAN NIEUWENHUIZEN J
[1]
On 26 July 2016, Khumalo J issued an order in the urgent court
against the first to third respondents. The order was granted
ex
parte
and contained both final and interim relief. A rule
nisi
returnable on 10 August 2016 was issued in respect of the interim
relief.
[2]
Only the first respondent opposes the application and has,
inter
alia,
raised three points
in limine,
to wit:
i. the inappropriateness
of
ex parte
order taken;
ii. lack of urgency; and
iii. material non-joiner.
BACKGROUND
[3]
The third applicant ("the company") is a non-profit company
that conducts the business of a community based radio
station in
Gauteng.
[4]
On 24 November 2015, the first respondent and the other three
directors of the company resolved to place the company in business
rescue because, according to the resolution, the company is
"financially distressed".
[5]
On 2 December 2015, the applicants were duly appointed by the fourth
respondent as the business rescue practitioners of the
company.
[6]
The first respondent remained in control of the day-to-day running of
the affairs of the company and as time progressed, the
relationship
between the applicants and the first respondent became increasingly
strained.
[7]
The applicants allege that, due to the first respondent's obstructive
conduct, it is no longer possible to fulfil their duties
imposed in
terms of
sections 140
and
142
of the
Companies Act, 71 of 2008
.
[8]
The fact that the first respondent acts on his own volition and in
total disregard of the provisions
supra
is common cause on the
papers.
EX
PARTE ORDER
[9]
The first respondent avers that the applicants have not placed all
material facts before court when it applied for the order
on an
ex
parte
basis.
[10]
Accordingly to the first respondent, the parties were involved in
settlement negotiations when the application was brought.
This fact
was not disclosed in the applicants' founding papers and the first
respondent submits that Khumalo J would not have granted
the order if
she was informed of the settlement negotiations.
[11]
In support of his contention that
"settlement negotiations"
were discussed by the parties, the first respondent relies on a
letter addressed by his attorney to the applicants on 21 July 2016.
The letter proposes that settlement discussions be held as a matter
of urgency.
[12]
The applicants did not respond to the proposal and consequently no
settlement negotiations existed when the
ex parte
order was
granted on 26 July 2016.
[13]
In the premises, this point has no merits.
[14]
During argument, Mr Bothma, counsel on behalf of the first
respondent, submitted that the final relief granted by the court
on
26 July 2016 is not final because it was granted
ex parte.
The
final relief pertains to access to bank accounts held by the company
at the second and third respondents.
[15]
Mr van der Merwe, counsel on behalf of the applicants, pointed out
that the first respondent did not apply for a reconsideration
of the
final relief as envisaged in rule 6(12)(c).
[16]
It is clear that the rule was designed to afford a party against whom
a final order was granted
ex parte,
the opportunity to be
heard. In the premises, Mr Bothma's submission that a final order
cannot be granted
ex parte,
is not correct.
[17]
This point
in limine
is consequently dismissed with costs.
LACK
OF URGENCY
[18]
Only the interim relief granted by the court on 26 July 2016 is the
subject matter of the urgent hearing.
[19]
The rule
nisi was
granted in respect of the following relief:
"a.
That the 1st
Respondent be removed
as a
director and/or member of the
applicant and that the fourth respondent be ordered to amend the
Applicant's records accordingly;
b. An order declaring
that the 1
st
Respondent misappropriated, without
authorization, an amount of R 135 000, 00 of the funds of the
Applicant;
c.
That the 1
st
Respondent be ordered to repay the amount of R 135 000,00 to the
Applicant within 48 hours from date of order;
d. That the 1st
Respondent pay the cost and expenses of the 1•1 and Applicants
associated with dealing with this application
at the rate for
a
small enterprise
as
prescribed in Regulation 128 to the
Companies Act, Act
71 of 2008, which expenses shall specifically
include the
costs
of the Applicants' attorneys of record, on
an
attorney and client scale."
[20]
Business rescue proceedings is by its very nature urgent and I
according entertained the matter in the urgent court.
MATERIAL NON-JOINDER
[21]
The first respondent submitted that all affected persons as defined
in the
Companies Act and
at the very least the employees and members
of the radio station should have been joined as parties.
[22]
In view of the relief claimed, it is not clear on what basis the
mentioned parties have a direct and substantial interest in
the order
sought against the first respondent.
[23]
In his heads of argument, Mr Bothma submitted that:
"The applicants
themselves, in other litigation in which they have been involved,
are
extremely fond of taking the point of non-joinder. This same
standard should now be applied to them."
[24]
Each matter should, however, be adjudicated on the facts of the
matter and the relief claimed therein.
[25]
I am satisfied that a material non-joinder does not arise in the
matter under consideration and the point is dismissed with
costs.
FINAL ORDER
[26]
The requisites for a final interdict are well established, to wit:
i. a clear right;
ii. an injury actually
committed or reasonably apprehended; and
iii. the absence of
similar protection by any other ordinary remedy.
[27]
Mr van der Merwe, conceded during argument that the applicants are,
at this stage, not entitled to an order in terms of paragraphs
b and
c. The concession was well made.
[28]
In the premises, only the relief claimed in paragraph a and costs
remains in dispute.
[29]
As alluded to
supra
the first respondent, on his own
admission, runs the affairs of the company without the authorisation
of the applicants. In doing
so, the first respondent acts in direct
violation of the provisions of the
Companies Act.
[30
]
The first respondent justifies his conduct by alleging that the
applicants are defrauding the company, are misappropriating funds
of
the company and are acting
male fide
and not in the best
interest of the company. Consequently, the first respondent deems it
imperative to remain a director of the
company in order to protect
the company and its employees from the applicants' dishonest conduct.
[31]
Mr Bothma defended the first respondent's stance by stating that the
first respondent, in his capacity as director, retains
a common law
fiduciary duty to act in the company's best interests. This
submission flies in the face of the clear provisions of
the Act and
is without merit.
[32]
Mr Bothma further argued that this court should not assist the
applicants due their alleged despicable behaviour and due to
the fact
that they have dismally failed in complying with their duties as
appointed business rescue practitioners of the company.
[33]
I pause to mention, that the first respondent and the other directors
of the company brought an urgent application on 7 June
2016 to
terminate the company's business rescue proceedings. In his founding
affidavit, the first applicant summarised the basis
on which the
application was brought and the result thereof as follows:
"38. For the sake
of brevity, do not attach hereto
a
copy of the founding
affidavit filed in support of the urgent application referred to
above. The affidavit was deposed to by the
Frist Respondent. I do
however confirm that the Applicants in that application stated that
they were incorrectly advised as far
as the commencement with
business rescue proceedings is concerned and furthermore tried to
make out
a
case to the effect that the BRP'S were not
exercising their duties toward the company, alternatively they were
not exercising their
duties correctly. The main thrust of the
application was furthermore to the effect that the company was no
longer financially distressed. I confirm that
a
copy of the
founding
affidavit filed in support of that urgent application
will be placed at the disposal of the Honourable Court, should the
need therefore
arise.
39.
The BRP's
opposed the application and filed an extensive and detailed opposing
affidavit. I do not attach hereto, again for the
sake of brevity,
a
copy of the opposing affidavit but confirm that same will be
available and placed at the disposal of the Honourable Court, should
the need therefore arise.
40. The application
was heard on 7 June 2016 by His Lordship the Honourable Mr Justice
Vorster. A copy of the order is attached
hereto as
Annexure "WF9".
The order included an order providing for the following:
40.1
That the
applicant (in that application) was not entitled
o
succeed and
that the application was therefore consequently dismissed; and
40.2 The applicants
were ordered to pay the remuneration and expenses of the BRP's, in
relation to that application,
as
set out in
regulation 128
of
the Act, with reference to
a
small enterprise, which expenses
specifically included the account of the attorney of record for the
BRP's on the scale
as
between attorney and client."
[34]
Save to state that Vorster AJ's order did not dispose of the issues
between the parties and that the issues are not
res judicata,
the
first respondent did not dispute the contents of these paragraphs.
[35]
Mr Bothma agreed that the business rescue practitioners remain in
office until removed by an order of court. The first respondent
did
not launch a counter application claiming the removal of the
applicants as business rescue practitioners. The conduct of the
business rescue practitioners relied upon by the first respondent
does not take the relief claimed herein any further.
[36]
I am satisfied that, on the facts that are common cause between the
parties, the applicant has succeeded in satisfying all
three
requisites for the granting of a final interdict.
[37]
Costs should follow the result.
ORDER
In
the premises, I grant the following order:
1. The first respondent
is removed as a director of the third applicant and the fourth
respondent is ordered to amend the third
applicant's records
accordingly.
2. That the first
respondent pay the cost and expenses of the first and second
applicants associated with dealing with this application
at the rate
for a small enterprise as prescribed in
Regulation 128
to the
Companies Act, Act
71 of 2008, which expenses shall specifically
include the costs of the applicants' attorneys of record, on an
attorney and client
scale."
______________________________
VAN
NIEUWENHUIZEN J
OF
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Appearances:
Counsel
for the Applicant
:
Advocate Van Der Merwe
Instructed
by
: KOSTER
ATTORNEYS
Counsel
for the first Respondent:
:
Advocate Bothma
Instructed
by
: KLOPPER
JONKER INC C/O
VORSTER
& BRANDT INC