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[2015] ZAKZPHC 29
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Basfour 3752 (Pty) Ltd and Others v KVL Developments and Others (8579/2014) [2015] ZAKZPHC 29 (19 May 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, PIETERMARITZBURG
CASE
NO 8579/2014
DATE:
19 MAY 2015
In
the matter between:
BASFOUR
3752 (PTY)
LTD
...........................................................................................
First
Applicant
(REF.
NO. 2009/014830/07)
KAREN
JAMES ODELL
N.O
....................................................................................
Second
Applicant
ANDREW
JAMES ODELL
N.O
...................................................................................
Third
Applicant
PATRICIA
MARY SCHROEDER
N.O
......................................................................
Fourth
Applicant
And
KVL
DEVELOPMENTS
.............................................................................................
First
Respondent
(CK
NO.: 2004/051833/23
ADRIAN
VENGADENSAN
N.O
............................................................................
Second
Respondent
RANJITH
CHOONILALL
N.O
................................................................................
Third
Respondent
THE
MASTER OF THE KZN HIGH COURT,
PIETERMARITZBURG
.........................................................................................
Fourth
Respondent
JUDGMENT
Delivered
on: 19 May 2015
NTSHANGASE
J
Introduction
[1]
This is an
application
for
rescission of the orders of this court in case 2050/2014 in terms of
which, on 7 April 2014 and 19 May 2014 the applicant was
placed under
provisional and final liquidation respectively.
[2]
The essence of the first applicant’s case is that it was
unaware of the process which culminated in the final liquidation
order. It became aware thereof only on 21 May 2014. The
first applicant claims to have a bona fide defence which will
disprove that the failure to pay to the first respondent the amount
it claims is a consequence of inability to pay its debts.
Background
[3]
In the unopposed proceedings in case 2050/2014 the present first
respondent successfully applied for the order which placed
the
present first applicant under final liquidation upon an alleged
failure to pay its debt of R563 853.96 to the first respondent,
According to the first applicant it became aware of the orders for
the first time on 21 May 2014 when Andrew Odell, the husband
of Karen
Patricia Odell, the deponent to the founding affidavit, received an
“SMS” communication from an individual
who identified
himself as Adrian Vengadesan (the second respondent) informing him
that he and the third respondent had been appointed
as joint
liquidators of the first applicant.
The
issue for determination
[4]
The first applicant contends that neither the demand to pay the
alleged amount nor the process which brought the application
was
served on it. On the contrary the first respondent avers that
service of the demand and application papers was effected
on the
first applicant by leaving same at First Floor, 4 MRM Office Park, 10
Village Road, Kloof, (4 MRM), the first applicant’s
registered
address as procured from the records of the Companies and
Intellectual Property Commission (CIPC).
[5]
The first respondent avers that even as at June 2014 when liquidation
proceedings were instituted in case 2050/2014, 4 MRM served
as the
first applicant’s registered address and refers to annexure
“RVL 1” to its answering affidavit to show
that the
change of the first applicant’s registered address from MRM TO
“6 MRM Office Park, 10 Village Road, Kloof
(6 MRM) was
effective from 31 July 2014 which was after the liquidation
proceedings had been instituted.
[6]
The first applicant, in this regard, refers to annexure “KOP
-1” to its founding affidavit to show that a notice
of change
of registered address (CoR 21.1) from 4 MRM to 6 MRM dated 22
February 2012 was delivered to the CIPC following
upon a discovery
‘during or around February 2012’ that the CIPC’s
records reflected an incorrect address of the
registered office of
the first applicant. Annexure “KOP 2” shows that the
notice of change of the registered address
from 4 MRM to 6 MRM was
received by the CIPC on 15 June 2012.
[7]
The first respondent argues that the purported notice of change is
not proof that the change was effected as the CIPC would
not have
accepted the first applicant’s CoR 21.1 by reason of the first
applicant’s failure to comply with
Regulation 21
of the
Companies Act 71 of 2008
which provides that a company must notify
the CIPC of a change in its registered address, indicating the
effective date of the
change which must be at least five business
days after the date on which the notice is filed. The relevant
part of the first
applicant’s CoR 21.1 reads:
‘
The
above named company, or external company advises that it has or will
change its registered office in the Republic on ……………………..
(insert date)
to
the following address:’ (Properly designed the CoR 21.1 would
have read “… has changed or will change …”).
The
applicant’s CoR 21.1 further reflects the following:
‘
Effective
date ……………………..
being a date at least five business days after
filing.’
[8]
The first respondent contends that insofar as the spaces for dates on
CoR 21.1 have been left blank the notice is defective
and cannot
serve as proof that the change was effected. It is clear from the
design of the form that it contemplates that the company
might notify
the CIPC that it “has …” already “change(d)”
or “will change” its registered
office. Without a
deletion of the inapplicable it is difficult, to say the least, to
determine whether the message on the first
applicant’s CoR 21.1
seeks to convey that the address of the registered office had been or
would be changed.
[9]
I deal now with the first applicant’s failure, on its CoR 21.1
to appoint the effective date of change. It appears
to me that
s 23 of the Companies Act 71 of 2008 (the Act) itself does envisage a
notice of change of registered office with no
stated date.
This, in my view, appears clearly from s 23(4)(a) and (b) of the Act
which stipulates that the change takes
effect from a date, if any, on
the notice or if there be no such date, five business days
after filing of the notice with
the CIPC. In the former
instance the date of effect of change is determined by the date, if
any, on the notice.
In the latter instance the date of effect
of change is determined with reference to the date on which the
notice was filed. The
relevant part of s 23 of the Act reads:
‘
(3)
Each company or external company must –
(a)
…
(b)
register the address of its office or its
principal office if it has more than one office –
(i)
…
(aa) …
(bb) … and
(ii)
subsequently, by filing a notice of change
of registered office, together with the prescribed fee –
(4)
A change contemplated in subsection (3)(b)(ii) takes effect as from
the later of –
(a)
the date,
if any
,
stated in the notice (my underlining); or
(b)
five business days after the date on which the notice was filed.’
[10]
In the present case the change took effect five business days after
the recorded date of receipt of the notice by CIPC, namely
15 June
2012, in terms of s 23(4)(b) of the Act. The fact that dates
were omitted from CoR 21.1 does not, in my view, detract
from its
status as a notice of change of address of the first applicant’s
registered office to an identified address.
The notice of
change of the registered office of the first applicant to 6MRM was
properly filed with CIPC. The information
on CoR 21.1 was
sufficient for the CIPC to effect the change. The first
applicant is correct in stating that it ought not
to be prejudiced by
the remissness of the CIPC in its failure to record the change.
The CoR 21.1 substantially achieves and
serves the purpose of
communicating to the CPIC that 6 MRM was to serve as the first
applicant’s registered address, also
as to where the first
applicant would be found, the place where its business would be
conducted and where court processes would
be served as from a date
contemplated in s 23(4)(b) of the Act.
[11]
The demand and the liquidation application papers were served at a
wrong address, the address of Autotrak. There was,
in
consequence a failure to alert the first applicant of the demand and
the institution of liquidation proceedings which prejudicially
denied
the first applicant the opportunity to be heard in court on the
matter.
The
nature of the first applicant’s defence
[12]
The first applicant denies that it is indebted to the first
respondent under the building and construction contract between
them. While the first applicant admits that there is an unpaid
balance on the amount agreed to be paid to the first respondent
on
the building and construction works it performed, it denies that the
first respondent is entitled thereto, the reason being
that ‘the
reasonable and necessary costs to the first applicant in respect of
the completion of the outstanding work and
the remedying of defective
work substantially exceeds the unpaid balance of the contract price.’
In fact, so avers the first
applicant, ‘the reasonable and
necessary costs to the first applicant of realising the contractual
prestation to which it
was entitled renders the first respondent
liable for payment of damages.’
[13]
The first respondent, on the other hand contends that ‘the
entire works had been handed over to the applicants and same
had been
completed and that the first respondent had vacated the site for the
reason that it had completed the works but returned
periodically for
small snags.’ The first respondent refers to various
completion certificates annexed as ‘RVL
3 to 9’ to its
answering affidavit to demonstrate completion of the project in all
respects.
[14]
The first applicant ‘reject(s) Van Lingen’s contention
that the said certificates demonstrate due completion of
the building
project in all respects in accordance with the first respondent’s
obligations under its building contract with
the first applicant.’
(Mr Rory van Lingen is a member of the first respondent and the
deponent to the first respondent’s
answering affidavit). The
first applicant refers to what it proffers as a quantification of the
reasonable cost of the work to
bring the project to completion as
amounting to R737 516.00. The quantification annexed as “KOP-11”
to the first applicant’s
replying affidavit was done by Mr
Jean-Marc Masson of Home Inspection Services in conjunction with Mr
Alan Harris, a specialist
building contractor.
[15]
In my view the foregoing provides a reasonable and acceptable
explanation for the applicants’ default and evinces the
existence of a
bona fide
defence
on the aspect of the first applicant’s alleged indebtedness to
the first respondent. Consequently the application
must succeed.
[16]
The applicant has applied for an order awarding costs to it on an
attorney and client scale. In my view the facts of this case,
which
indicate that the first respondent had relied on incorrect records of
the CIPC for the failed service of the demand and the
application
papers, do not call for a punitive costs order.
The
order
In
the circumstances it is ordered –
1.
that the orders granted by this court under
case number 2050/2014 on 7 April 2014 and 19 May 2014 in terms of
which, on 7 April
2014, the first applicant was placed under
provisional liquidation and on 19 May 2014 under final liquidation be
and are hereby
rescinded.
2.
The first applicant is directed to deliver
its answering affidavits in the winding up application under case
number 2050/2014 within
15 (fifteen) days of the grant of this order.
3.
The first respondent is directed to pay the
costs of this application on the scale as between party and party.
DATE
OF HEARING: 23 March 2015
DATE
OF JUDGMENT: 19 May 2015
FOR
THE APPLICANTS: Mr C J Snyman SC, instructed by Atkinson Turner &
De Wet locally represented by A K Essack Morgan Naidoo
&
Company.
FOR
THE FIRST RESPONDENT: Ms P Hunt instructed by Bernhard Attorneys.