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[2016] ZAGPPHC 856
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Van Tonder v Master of the High Court, Pretoria and Others (4766/16) [2016] ZAGPPHC 856 (17 September 2016)
THE
REPUBLIC OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
no: 4766/16
Reportable:
Yes
Of
interest to other judges: Yes
Revised.
17/9/16
In
the matter between:
GIDEON
DANIEL VAN
TONDER APPLICANT
AND
THE
MASTER OF THE HIGH COURT, PRETORIA FIRST
RESPONDENT
P.W.
ENGELBRECHT
NO SECOND
RESPONDENT
KOBUS
VAN DER WESTHUIZEN
NO THIRD
RESPONDENT
LYNN
WARRICKER
NO FOURTH
RESPONDENT
DUST·A·SIDE
(PTY)
LTD FIFTH
RESPONDENT
Heard:
15 August 2016
Delivered:
19 September 2016.
Summary:
Application to review the decision of the Master, taking control of
the administrative and insolvency procedures of a Co-operative
incorporated in terms of the
Co-operatives Act of 2005
.
Interpretation of
section 337
of the
Companies Act 2008
. The
provisions
section 337
of the
Companies Act not applicable
to Co·
operatives incorporated in terms of the
Co-operatives Act of 2005
.
JUDGMENT
MOLAHLEHI
AJ
Introduction
[1]
This is a review application of the decision of the first respondent,
the Master of the High Court ('the Master") in appointing
the
third and fourth respondents as co-liquidators in the estate of
Serendipity Support Services Secondary Co-operative (Pty) Ltd
(Serendipity). The other decision, which the applicant seeks to
review is the directive by the Master for an inquiry to be conducted
into the affairs of Serendipity in terms of ss 417 and 418 of the
Companies Act 61 of 1973 (the 1973 Companies Act).
[2]
The issue in the present matter arose from the order made by this
court on 19 March 2015, in terms of which Serendipity was
declared
insolvent.
[3]
The application is opposed by the fifth respondent only.
The parties
[4]
The applicant was the managing director of Serendipity before its
winding up.
[5]
The first respondent, is the Master of the High Court, Pretoria
appoint as such in terms of the Administration of Estate Act,
[1]
The second, third and fourth respondents are cited in this matter in
their respective official capacities.
[6]
The fifth respondent, Dust-A-Side (Pty) Ltd, is a private company
registered in terms of the company laws of South Africa. The
fifth
respondent was the applicant in the liquidation proceedings which
were instituted against the Serendipity, including the
application
for an inquiry into its affairs in terms of ss 417 and 418 of the
Companies Act. The fifth respondent is also a creditor
of
Serendipity.
Background facts
[7]
Serendipity was prior to its liquidation registered in terms of the
Co-operation Act.
[2]
It was
established as secondary co-operative by three primary co-operations
namely:
a. The Arrivals Primary
Co-operative,
b. The lsizakele
Specialised Services Works Primary Co-operative and
c. The Universal Services
Events Primary Co-operative.
[8]
As a secondary co-operative, Serendipity was established to provide
sectoral services to the above three primary co-operatives.
[9]
On 1 August 2014 the fifth respondent issued an urgent application in
terms of which it sought provisional winding up of Serendipity
under
case 56919/14. In terms of paragraph 4.1 of the founding affidavit in
the liquidation application, the winding-up was in
terms of s72 (1)
of the Co-operation Act of 2005 (the 2005 Co-operative Act).
[10]
After the liquidation the Master seized control of the administrative
matters of Serendipity and issued a certificate of provisional
liquidation on 12 September 2014 under reference number T21494/14. In
this regard the third and fourth respondents were appointed
as
co-liquidators in the insolvent estate and that was done in terms of
s71 of the 2005
Co-operatives Act.
[11
]
The appointment of a liquidator/s in the winding-up of Co-operatives
was previously dealt with by
s195
of the repealed
Co-operatives Act,
(the
1981
Co-operatives Act).
[3]
Section 195
of that Act read as follows:
"(1)(a) The
registrar shall appoint one or more liquidators in respect of a co-
operative being wound up.
(b) If a liquidator
ceases to hold office the registrar shall, if such liquidator was the
only liquidator, or may, if such liquidator
was one of a plurality of
liquidators, appoint any person to fill the vacancy.
[12]
As indicated above the 1981
Co-operatives Act was
repealed by the
2005 Co- operatives Act. The procedure for winding-up of a
co-operative under that Act is dealt with under Chapter
9, and
specifically between ss 71 to 76 thereof. The 2005 Co- operative Act
unlike the 1981 Act, is silent as to the appointment
of a
liquidator/s in a case of winding-up of a Co-operative.
[4]
The relevant purposes for introducing the 200 Co- operatives Act are
to; provide for the formation and registration of co-operatives,
the
winding up of co-operatives, the repeal of Act 91 of 1981.
The
grounds of review
[13]
The applicant contends that the decision of the Master, in taking
control of the administrative affairs of Serendipity and
overseeing
its liquidation in terms of the Companies Act is void as he/she did
not in law have such powers. In this respect the
applicant submitted
that Serendipity is a legal entity that is not a body corporate as
envisaged by s 337 of the 1973 Companies
Act. In other words the
provisions of s 337 of the 1973 Companies Act does not apply to
registered co-operatives.
[14]
The powers to control and deal with liquidations of Co-operatives
according to the applicant is vested in the registrar of
Co-operatives. It was also for this reason that the applicant
contended that the Master does not have the power to conduct the
inquiry in terms ss 417 and 418 of the 1973 Companies Act.
[15]
The fifth respondent in opposing the review application contended
that the concept "body co-operate" in s 337 of
the
Companies Act, refers to associations of natural persons with the
characteristics that it should be cable of owning property
apart from
its members and should have perpetual succession.
[16]
It was argued, based on the above by the fifth respondent that
Serendipity qualifies as a "body co-operate" and was
therefore governed by the provisions of s 337 of the 1973 Companies
Act.
[5]
The decision of the
Master
[17]
The Master has not proffered any reason for his decision. It however,
would appear that the decision is based on averments
made by the
fifth respondent at paragraph 7 of the founding affidavit in the
application for the liquidation of the applicant.
Paragraph 7 of the
founding affidavit reads as follows:
" 7.1 The Applicant
is advised that Section 337 of the Companies Act, 1973 provides that
the expression "company"
as used in Chapter 14 of the said
Companies Act 1973 also means any other body co-operate.
7.2 The applicant is also
advised that the provisions of section 2 and 8 of the Co-operatives
2005, confirm that the Respondent
is a body co-operate.
7.3 In the premises, the
Applicant is advised that the provisions of this Chapter 14 applies
mutatis mutandis
to the winding-up of the respondent also.
7.4 The Applicant is also
advised that, if the provisions of the Companies Act, 1973 do not
directly apply to the winding-up of
the Respondent, it would in any
event be a good practice to deal procedurally with this application
in a similar manner that an
application for winding-up of a company
would be dealt with."
The
issue for determination
[18]
The key issue for determination in this matter is concisely set out
in the applicant's heads of argument in the following terms:
"1. The pivotal
issue that informs the consideration of all the sets of the relief
sought in the present application concerns
the question whether the
provisions of chapter 14 of the Companies Act,
[6]
("the 1973 Companies Act) find application in the eventuality of
the liquidation of a Co-operative that is formed, registered
and
managed in terms of the Co-operatives 14 of 2005 ("the
Co-operatives Act"
;).
2. If the answer to the
said question is in the affirmative, the relief sought is unfounded."
Evaluation/
Analysis
[19]
The question of whether the provisions of Chapter 14 of the 1973
Companies Act, find application in the eventuality of the
liquidation
of a Co-operative finds answer in the rules governing interpretation
of statutes. The approach to adopt when dealing
with the issue of
interpretation of any document is set out by Wallis JA in
Natal
Joint Municipal Pension Fund v Endumeni Municipality,
[7]
as follows:
"The present
state
of the law can be expressed
as
follows.
Interpretation
is
the
process
of attributing meaning to
the words used in
a
document, be it legislation, some other
statutory instrument, or contract, having regard to the context
provided by reading the
particular provision or provisions in the
light of the document as
a
whole and the circumstances
attendant upon its coming into existence, whatever the
nature
the document, consideration must be given to the language used in the
light of the ordinary rules of grammar and syntax;
the context in
which the provision appears, the apparent purpose to which it
is
directed and the material known to those responsible for
its
production. Where more than one meaning is possible, each
possibility
must
be weighed in the light of all these factors.
The process is objective not subjective. A sensible meaning is
to
be preferred to one that leads to insensible or unbusinesslike result
or undermines the apparent purpose of the document. Judges
must be
alert to, and guard against, the temptation to substitute what they
regard
as
reasonable, sensible or businesslike for the words
actually used. To do so
in regard to
a
statutes or
statutory instrument is to
cross
the divide between
interpretation and legislation. A contractual context is to make
a
contract for the parties other than the one they in fact made. The
'inevitable point of departure
is
the
language of the
provision itself read in context and having regard to the purpose of
the provision and the background to the preparation
and production of
the document."
[20]
It appears to me, from the above that, key to the interpretation of a
statute is the text and the context of the legislation
to be
interpreted.
[21]
It was argued on behalf of the fifth respondent that the Master has
the power to appoint the liquidator/s to liquidate Serendipity
in
terms of Chapter 14 of the 1973 Companies Act. The power arises
specifically from s 337 which defines the word "company"
to
include body corporate which accordingly covers Serendipity,
according to the fifth respondent. Section 337 provides as follows:
"Company"
includes
a company, external company and any other body corporate."
[8]
[22]
It is common cause that ss 74 to 76 of the 2005
Co-operatives Act,
which
deals with the winding up of a co-operate entity does not make
provision for the appointment of a liquidator.
[23]
In appointing the two liquidators the Master exercised public power.
The basic principle of our law is that the exercise of
public power
must be authorised by the law. As stated by Hoexter in Administrative
Law in South Africa,
[9]
administrators do not have inherent powers. This means every time an
administrator exercise power such a power must have its source
in
law. Any decision or action taken by an administrator that has no
basis in law is illegal and thus offend the principle of legality
and
the rule of law.
[24]
In the present instance it has to be noted that the office of the
Master is a creature of statute created in terms of
s 2
read with s 3
of the Administration of Estate Act. The powers and function of the
Master are, however found in various other statutes.
[10]
[25]
In my view s 337 of the Companies Act cannot be read to give the
Master the power to appoint a liquidator/s in the case of
the
winding-up of a co-operative incorporated in terms of the 2005
Co-operatives Act when
regard is had to the provisions of s 3 of the
Companies Act, which provides as follows:
"(1) The provisions
of the this Act shall not apply-
(a) With reference
to any company the formation, registration and management whereof are
governed by the provisions of any
law relating to friendly societies,
including pension funds, within the meaning of the Pension Funds Act,
1956 (Act 24 of 1956),
trade unions and employers' organisations, or
co-operative societies or companies, save in so far as may be
otherwise provided
in such law."
[26]
It is clear from the simple grammatical reading of the above section
that the provisions of the Companies Act do not apply
to co-operative
societies, the formation of which, registration and management
whereof are governed by the provisions of the 2005
Co-operatives Act.
This
would mean that the word "body corporate" in s 337 of
the Companies Act, does not include those co-operatives that are
registered and managed in terms of the 2005
Co-operatives Act.
[27
]
Henochsberg on Companies Act, in dealing with the provisions of s 337
of the 2008 Companies Act, says the following:
"To certain
statutory bodies cooperate, however, all or some of the provisions of
Chapter XIV do not apply, unless the law
under which it is
constituted provide otherwise."
[28]
In the present matter it is common cause that Serendipity was at the
time a co- operative registered in terms of 2005 Co-operate
Act. The
2005 Co-operative Act has no provision incorporating the liquidation
procedure of the Companies Act. It follows from this
that the Master
does not have the powers to appoint liquidator/s in the event of the
winding-up of a co-operative registered under
the 2005
Co-operatives
Act. It
also follows from this interpretation that the Master did not
have the power to seize control and oversea the insolvency procedure
of Serendipity in terms of the Companies Act.
[29]
In light of the above analysis, I find that the applicant has made
out a case for the review and setting aside the decision
of the
Master to seize control and oversee the insolvency process of
Serendipity including the appointment of the two liquidators.
I
further see no reason why costs should not follow the results.
Order
[30]
In the premises the following order is made:
1. The decision of the
First Respondent to seize control and oversee the insolvency
procedure of Serendipity Support Services Second
Co-Operative (Pty)
Ltd, is reviewed and set aside.
2. The Certificate of
Appointment of provisional co-liquidators issued by the First
Respondent on 12 September 2014 under the reference
number T 21594/14
is reviewed and set aside.
3. The appointment of the
Third and Fourth Respondents as the provisional co liquidators
in the estate of Serendipity Support
Services Secondary Co
Operative (Pty) Ltd, Registration No: 2010/00 7509/25 is reviewed and
set aside.
4. The directive issued
by the First Respondent dated 13th of January 2015 that an enquiry be
held into the affairs of Serendipity
Support Secondary Co
operative (Pty) Ltd in terms of Section 417 and 418 of the Companies
Act, act 61 of 1973 is reviewed
and set aside.
5. The First Respondent's
directive dated 13th January 2015 appointing the Second Respondent as
a Commissioner in the enquiry of
Serendipity Support Secondary
Co-operative (Pty) Ltd is reviewed and set aside;
6. That the subpoena
issued by the Second Respondent and served upon the Applicant dated
the 20th January 2015 directing them to
appear at the enquiry is
reviewed and set aside.
________________________
Molahlehi
E
Judge
of the Gauteng Division,
Pretoria.
Appearances:
For
the Applicant: Adv. P. G. Cilliers SC, instructed
by Schabort & Walker Incorporated
Tel:
(012) 329 226 6689 Fax 086226 6689
For
the Fifth Respondent: Adv. S.D Wagener SC instructed by Weavind &
Weavind Inc
Tel:
(012) 346 3098 Fax : 086 618 4944
[1]
66 of 1965.
[2]
Act number 14 of 2005.
[3]
Act number 91 of 1981.
[4]
There is recognition of this lacuna and efforts are underway to
address it. See Government Gazette 39019 of 24 July 2015, volume
601, page 42, notice 643 the Co-Operative Administration
Regulations, 2015 draft was published. Items 78 to 92 deals
specifically
with the appointment of a liquidator by the Registrar
and sets out the functions and powers of the Liquidator.
[5]
The powers of the Master as provided for in chapter 14 of the 1973
Companies Act, has been kept operational despite the repeal
of that
Act by the provisions of Item 9(1) of Schedule 5 of the
Companies
Act 2008
.
[6]
Act number 61 1973.
[7]
2012 (4) SA 593
(SCA) at para 18.
[8]
The word co-operative is defined in the
Companies Act as
follows: "a
juristic person as defined in the Cop operative Act 2005."
[9]
Hoexter, Administrative Law in South Africa, second edition page
255.
[10]
The powers and functions of the Master are amongst others found in
the
Administration of Estates Act 66 of 1965
, the
Insolvency Act 24
of 1936
, the Companies Act 61 of 1973, and the
Close Corporations
Act 69 of 1984
.