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[2015] ZAGPPHC 203
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Maralco Business Advisors CC t/a Maralco CC v Maristo Project Managers (Proprietary) Ltd (38849/2014) [2015] ZAGPPHC 203 (16 April 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
[GAUTENG
DIVISION, PRETORIA]
CASE NO:
38849/2014
DATE: 16 APRIL
2015
NOT REPORTABLE
NOT OF INTEREST
TO OTHER JUDGES
In
the matter between:-
MARALCO
BUSINESS ADVISORS
CC
t/a MARALCO
CC
...............................................................................................................
Applicant
and
MARISTO PROJECT
MANAGERS (PROPRIETORY) LTD
(Registration
no.
2009/018774/07)
...........................................................................................
Respondent
JUDGMENT
SKOSANA AJ
[1] In this matter
the applicant brought an application seeking the following order:
“
[1.1]
That the respondent be wound up in the hands of the Master of the
High Court (North Gauteng).
[1.2] That the
costs of the application be costs in the winding up of the
respondent. ”
[2] The application
is opposed by the respondent and it has filed an opposing affidavit.
However, the applicant did not file a replying
affidavit. Before the
commencement of the hearing, I was requested by the respondent’s
counsel for an opportunity to consider
a service affidavit filed by
the applicant on 13 January 2015 but which was apparently handed over
to the respondent on the date
of hearing, being 13 April 2015.
[3] Thereafter it
was proposed by the respondent, with the acquiescence of the
applicant, that the issue of service be argued and
dealt with
separately before the application to strike out certain portions of
the applicant’s founding affidavit and the
merits of the
application are heard. I accepted the proposal and therefore deliver
this judgment only in regard to the issue of
service.
[4]
The respondent argue that the application for liquidation had not
been served in accordance with the provisions of section 346(4A)
of
the Companies Act no. 61 of 1973 ("the Companies Act”).
Counsel for the respondent relied heavily on the unreported
decision
of
Pilot
Freight (Pty) Ltd v Von Lansberg
Trading
(Pty) Ltd 2015(2) SA 550 (G-J)
to
the effect that the service of the winding up application which does
not comply with the aforesaid section ought to be dismissed
on that
ground alone
1
.
[5] It was further
argued on behalf of the respondent that the applicant had in its
founding affidavit undertaken to serve the application
in accordance
with the Companies Act. However, the applicant only served the papers
on the attorneys of the respondent.
[6]
It was also argued that the applicant has 75 employees
2
.
Such employees or their trade union were not served with the
application as required by section 346(4A) (a) of the Companies Act.
[7] On the other
hand, counsel for the applicant argued that the respondent had been
properly served in accordance with the relevant
provisions of the
Companies Act, in that:
[7.1] The respondent
had applied for credit from the applicant using its business address,
being 325 Albert Adamson, Garsfontein,
Pretoria and such application
was approved by the applicant. Moreover, such business address is
admitted by the respondent.
[7.2] The applicant
then instructed the Sheriff to serve the application at the aforesaid
business address of the respondent but,
as appears from the return of
service, the Sheriff found that the building at that address had been
demolished.
[7.3]On 12 May 2014,
the applicant’s attorney’s sent a letter to the
respondent by e-mail stating among other things
that they were
instructed to proceed with an application for the liquidation of the
respondent should the demand not be complied
with by the respondent
within 5 days of such letter. A response to the letter came from the
current attorneys of the respondent
on 15 May 2014 wherein they
confirmed that they represent the respondent and one Mr CJ Van Zyl
who had headed them a copy of the
letter of demand from the
applicant. The letter further states that the applicant’s
letter of demand threatens liquidation
and that they will accept
service on behalf of the respondent of any and all actions and/or
applications and have instructions
to defend.
[7.4] Thereupon the
applicant served the liquidation application on the attorneys for the
respondent. Counsel for the applicant
also points out that the
respondent in its opposing affidavit only confirmed that their former
business address is a vacant stand
but does not state anything
further and does not provide another business address at which they
continue to conduct business.
[7.5] Furthermore,
counsel for the applicant was adamant that the respondent does not
have any employees since it did not attach
to its opposing affidavit
any confirmatory affidavits by such employees or representatives of
trade unions. Moreover, so he argued,
the financial statements
attached to the respondent’s opposing affidavit show that the
respondent does not have employees.
[7.6] He added that
the reference in such financial statements to subcontractors cannot
be regarded as a reference to employees
of the respondent. He made an
alternative submission however that, should I find that the employees
of the respondent ought to
have been served and were infact not so
served, 1 should grant a postponement so that service can be effected
accordingly and that
the wasted costs occasioned by such postponement
should be paid by the respondent.
[8] Upon reflection,
it appears that the following factors are common cause:
[8.1] The business
address furnished by the respondent to the applicant is that which is
contained in its application for credit
and is a business address at
which the Sheriff attempted service of the application but found the
place vacant.
[8.2] The
application for liquidation ought to be served on the respondent in
terms of section 346(4A)(a)(iv).
[8.3] The attorneys
for the respondent were aware that the applicant intended to bring
the liquidation application when they provided
their address as the
address of service for all applications and actions by the applicant.
[9]
Section 346|(4A)(a)(iv) does not specify the manner in which service
on a company must take place and whether or not such service
should
take place at the registered office or principal place of business of
the company. However, Rule 4(1 )(v) provides that
service on a
company may take place by delivering a copy of the process on an
employee of a company at its registered office or
principal place of
business or by affixing a copy to the main door of such registered
office or place of business or
“
in
any manner provided by law”
[10] In this case,
the respondent’s attorneys unequivocally stated that the
service of all applications or actions should
be effected at their
offices on behalf of the respondent. This was stated with a full
knowledge that the applicant intended to
bring an application for the
liquidation of the respondent.
[11] I agree with
the sentiments expressed by Walis JA (quoted in the Pilot Freight
case) that the requirements of section 346(4A)
are not meant to
constitute technical defence to a respondent. In this case, it is a
clearly technical defence for the respondent
to contend that service
on its attorneys, after such attorneys had indicated that they have
been authorized by the respondent to
accept such service, is fatally
defective since it does not comply with the requirements of the
aforesaid section.
[12]
Section 346{4A) must be read together with the Uniform Rules of
Court. Moreover, Rule 4(1 )(v) ends with a broad category,
namely
“
or
in any manner provided by law’’.
[13] Moreover, the
method of service followed by the applicant in servicing the
respondent satisfies the statutory purpose of section
346(4A), by
taking all reasonable measures to ensure that the application is
brought to the attention of the respondent. In any
event, the
respondent has filed an opposing affidavit in this case thereby
confirming that it was fully aware of the application.
To me
therefore, the defence that there has been no compliance with the
requirements of the Companies Act is purely technical.
[14] As regards the
service on the employees of the respondent, counsel for the applicant
was at pains in trying to explain the
reason for not filing the
replying affidavit to refute the respondent’s allegation that
it had 75 employees. The contention
that the respondent could not
have had such employees as its financial statements do not reflect
that is to me not of assistance
to the applicant.
[15] The allegation
is made under oath by the deponent to the respondent’s opposing
affidavit. In my view, it even outweighs
the respondent’s
counsel’s statement from the Bar that the respondent had only
sub-contractors and service providers.
Similarly, the contention that
the allegation of 75 employees is contradicted by the financial
statements is made from the Bar
by the counsel for the applicant and
is of no value compared to a counter statement made under oath,
taking into account that such
statement, if falsely made, may be
visited with a criminal sanction for perjury.
[16]
Moreover, it is trite law that where the applicant fails to file a
replying affidavit, allegations made in the respondent’s
opposing affidavit which are in conflict with the applicant’s
averments, must be accepted as correct
3
.
It follows therefore that I must accept that the applicant had
employees and that therefore service on such employees should have
taken place in terms of section 346(4A)(a)(ii) of the Companies Act.
In fact, I did not understand the applicant’s counsel
to argue
to the contrary.
[17] The employees
of the respondent are parties that have a direct and substantial in
the matter and will ceratinly be adversely
affected by the
respondent’s liquidation. For this reason the Act requires
service upon them.
[18] It is common
cause that such service did not take place in this case. I am not
persuaded by the applicant’s argument
that it is the duty of
the respondent to inform it employees of such application, if I
understood the argument correctly. That
cannot be correct in view of
the clear and express provisions of section 346(4A)(a) of the
Companies Act.
[19] It is clear
from the above that I intend postponing this application with a view
to grant the applicant an opportunity to comply
with the provisions
of the Companies Act by serving the employees of the applicant with
the application as well as any registered
trade union, if any.
[20] With regard to
the wasted costs, applicant’s counsel though insisting that
such costs must be paid by the respondent,
stated that the service
affidavit was only provided to the respondent on the date of the
hearing of this application.
[21] Although
section 346(4A)(b) gives the applicant the right to file such
affidavit before or during the hearing, that does not
remove the
prejudice to the respondent. Counsel for the applicant argued that in
terms of this sub-section, the applicant is not
required to serve
such service affidavit on the respondent at any given time.
[22] To me, that
does not change the fact that the respondent did not have the
opportunity to deal with the allegations contained
in such affidavit.
Moreover, the applicant knew that the issue of service of the
application for sequestration is an highly contested
as early as May
2014 and when the respondent field its opposing affidavit in
September 2014.
[23]
On the other hand, I am mindful of the fact that the applicant was
seemingly not aware that the respondent has employees until
the
answering affidavit was filed in September 2014. I also take into
account that section 346(4)A(b) does not
stricto
sensu
require
the applicant to serve the service affidavit on the respondent.
[24] In the
circumstances, I am of the view that this is a case where no order of
costs should be made against any party.
[25] In the result,
I make the following order:
[25.1]
The application is postponed
sine
die.
[25.2] The
respondent is ordered to provide the applicant with its business
address within 5 days of this order.
[25.3] If the
respondent does not comply with paragraph 2 above, the applicant is
granted leave to bring this application on the
same set of facts or
papers before this court.
[25.4] There is no
order as to costs.
DT SKOSANA
Acting Judge of the
High Court
On behalf of the
applicant: Donn E Bruwer Attorneys
c/o
The
Legal Post Box
462B
Queen’s Crescent Lynnwood
Pretoria
Tel:
(012) 653 6996
Fax:
086 671 0527
Adv
J Van Rooyen
On behalf of
respondent: Wolvaardt Incorporated
870 Glossa Road
Moreleta Park Extension 9
Pretoria
Tel: (012) 997 6200
Fax: (012) 997 1409
Adv NC Maritz
1
See
Pilot Freight case para 37
2
See
respondent's answering affidavit para 34.3 p. 73 of the papers
3
Plascon
Events Paints v Van Riebeck Paints 19S4(3) SA 623 A