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2015
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[2015] ZAKZDHC 84
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Button N.O and Others v Akbur and Others (14600/2014) [2015] ZAKZDHC 84 (23 September 2015)
IN
HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
CASE
NO: 14600/2014
DATE:
23 SEPTEMBER 2015
NEIL
DAVID BUTTON
N.O
.................................................................................
FIRST
APPLICANT
KURT
ROBERT KNOOP
N.O
........................................................................
SECOND
APPLICANT
SURENDRA
NAIDOO
N.O
.................................................................................
THIRD
APPLICANT
EBRAHIM
ABOOBAKER MOOLLA
N.O
...................................................
FOURTH
APPLICANT
In
their capacities as the Joint Liquidators of Golden Rewards 698 CC
trading as Global Steel Corporation, Registration number:
2005/031526/23, pursuant to Certificate of Appointment of Liquidator
issued to them by the Master of the Kwazulu-Natal High Court
Pietermaritzburg on 30 October 2013 (“the Corporation”)
And
ASHRAF
AKBUR
..............................................................................................
FIRST
RESPONDENT
GSC
TRADING
CC
......................................................................................
SECOND
RESPONDENT
DEON
SCHAUP
N.O
.......................................................................................
THIRD
RESPONDENT
THE
MASTER OF THE HIGH COURT OF
SOUTH
AFRICA (KWAZULU-NATAL DIVISION)
................................
FOURTH
RESPONDENT
JUDGEMENT
Delivered:
23 September 2015
MBATHA
J
[1]
The Applicants are joint liquidators of Golden Rewards 698 CC,
trading as Global Steel Corporation (Registration number
2005/031526/23).
They seek an order pursuant to the provisions
of section 29 of the Insolvency Act
[1]
,
declaring that payment made by or on behalf of the First Respondent
totalling an amount of R2 493 000.00 in the two
and half
month period prior to the liquidation of the Close Corporation of
which the First Respondent was a member are voidable
preferences and
authorising the Applicants to recover these amounts from the First
Respondent and/or the Second Respondent.
2.1
The Application is opposed by the First and Second Respondents.
It is opposed on the basis that there are innumerable
material
disputes of facts and therefore Applicants ought not to have
proceeded by way of motion court proceedings, the First and
Second
Respondents have been deprived of their rights to the
audi
alteram partem
principle in terms of Section 8(1) of the Constitution of the
Republic of South Africa
[2]
and
that the payments which the Applicants seek to recover were made in
the ordinary course of business and did not constitute
voidable
preferences.
2.2
The application has been brought as a result of the findings of a
Section 417 and 418 of the Companies Act
[3]
enquiry commissioned by the Master of the High Court, KwaZulu-Natal,
on which Advocate Deon Schaup presided as the commissioner
thereof.
Mr John Michau, the deponent to the Applicants’ affidavit, is
the Applicants’ legal representative,
who is involved in the
administration of the estate and their representative at the Section
417 enquiry.
2.3
The First Respondent was one of the three (3) members of the Golden
Rewards Close Corporation in Liquidation (the Close Corporation)
until the time of its liquidation on the 16
th
of October 2013. The First Respondent is also the sole member
of the Second Respondent. The Second Respondent was not
a
trading company within the steel industry.
[3]
It is common cause that the First Respondent effected various
payments from the Golden Rewards Close Corporation in amounts
totalling R2 493 000.00. On or about August 2013, the
First Respondent caused a transfer of R1,9 million to be made
from
the Close Corporation’s banking account to the account of
attorney, Natalie Lange Attorneys. He subsequently instructed
Peter Andrew, the attorney of the said legal firm, to make various
payments to certain creditors of the First and/or Second Respondent.
The R1,9 million forms part of the R2 493 000.00 stated
above.
It
is also common cause that the Close Corporation was first placed in
business rescue on the 16
th
of September 2013, the liquidation application was delivered on the
9
th
of
October 2013 and the Close Corporation was placed in liquidation on
the 16
th
of October 2013.
[4]
The Applicants bear the onus of proof in proving that dispositions
were made of the Close Corporation’s property, that
the
dispositions were made within the period of six (6) months preceding
the liquidation of the Close Corporation, that the dispositions
had
the effect of preferring the First and/or Second Respondents as
creditors of the Close Corporation and that immediately after
the
dispositions were made the Close Corporation’s liabilities
exceeded the value of its assets. On the other hand,
the First
and Second Respondents bear the onus of proving that the dispositions
were made in the ordinary course of the Close Corporation’s
business and that the Close Corporation did not intend to prefer
First and Second Respondents above other creditors.
[5]
In determining when was the disposition made, the date of the actual
disposition is relevant, not the date when on which authority
was
granted to the agent to make such a disposition. In proving
that the disposition was to prefer one creditor above others,
it is
necessary to prove the effect of the disposition, namely, that all
creditors were not equally treated in the distribution
of assets.
It must also be borne in mind that the person who benefitted from the
disposition is necessarily always a creditor,
which includes a surety
or a person in a position analogous to that of a surety in terms of
Section 30(2) of the Insolvency Act,
though not always the person to
whom the disposition was made, and that the value at the date of the
disposition is the relevant
determining factor to ascertain that
immediately after such a disposition was made, the debtors
liabilities exceeded the value
of his assets.
[6]
The Respondents bear the onus of proof in proving that the
dispositions were made in the ordinary course of business, the test
being an objective one, namely, whether having regard to the fact
that business methods and customs necessarily differ amongst
the
different spheres of the business world, the ordinary, honest and
solvent businessman would have acted likewise in similar
circumstances, or would have thought the transaction extraordinary.
For
example, a tripartite arrangement between the insolvent, one of his
debtors and a creditor of the insolvent in terms of which
a debtor
makes a direct payment to a creditor of the insolvent, cannot be
described to be in the ordinary cause of business.
The
disposition must be legal and valid in law to qualify for it to be
within the ordinary course of business.
[7]
The other part of the defence by the insolvent in that it did not
intend to prefer one creditor above the others has to be proven
by
the beneficiary. The test applied being a subjective one, being
the subjective intention of the insolvent, which is often
inferred,
in the absence of direct evidence, from the surrounding circumstances
e.g. a disposition made whilst contemplating a
liquidation or
sequestration.
8.1
The Applicants submit that payments were made by the Close
Corporation to the First Respondent totalling R2 493 00.00
between the 26
th
of June and 30
th
September 2013 in favour of the Respondents and/or on behalf of the
Second Respondent.
8.2
In that regard the Court has been requested to take into account the
following:-
·
That the application for the liquidation
was delivered on the 9
th
of October 2013, from which the six (6) month period is calculated;
·
That the dispositions were made within
three (3) months prior to the liquidation of the Close Corporation;
·
That the Close Corporation’s sole and
proved creditor is Aveng Trident Steel (PTY) LTD, who has a claim of
R10 983 537.87
against the Close Corporation and that
the First and Second Respondents were paid in advance of the sole
creditor, either
in full or proportionately more than Aveng;
·
That as at the 28
th
of February 2013, the Close Corporation’s liabilities exceeded
its assets. The liabilities were at R33 981 909.00
and its assets were at R29 830 318.00;
·
That by the 1
st
of June 2013, the Close Corporation stopped trading; and
·
That the dispositions were made when the
Close Corporation resolved to place itself in Business Rescue.
The Close Corporation
was placed under business rescue on the 16
th
of September 2013.
9.1
At the 417 enquiry, the First Respondent’s testimony was that
he was not aware of the loss
of R4 million to the Close Corporation
or that such loss existed. The Second Respondent was a creditor
to the Close Corporation
as it lent and advanced funds to the Close
Corporation, which it collected from various investors. The
Close Corporation
allocated these loans to his members loan account
tittled “A Akbur”. The account in the name of the
Second Respondent
was not created by Vather as the First Respondent
was the sole member of the Second Respondent; he treated them as one
despite
their distinctive legal personalities. These are the same
submissions that he has made in opposing this application.
9.2
The First Respondent’s explanation for the transfer of funds
from the Close Corporation
on behalf of the Second Respondent to the
attorney’s trust account, was that these funds were due and
payable to the Second
Respondent and these were part of the
repayments by the Close Corporation of loans taken from the Second
Respondent, which payments
he had directed that be made to the Third
Party. Irrespective that there was no separate loan account for
the Second Respondent,
he believed that Vather, the Close
Corporation’s accounting officer, knew that he and the Second
Respondent were the sole
lenders of funds to the Close Corporation.
According to the First Respondent, these payments were always
prioritised and
paid in the course of business of the Close
Corporation.
10.1
The Applicants’ case is that Peter Andrews received funds
without any specific instructions and upon enquiry,
the First
Respondent informed him that the instructions for distribution
thereof would follow in due course. This was odd
as the funds
were transferred in their on-going conveyancing account, which had
been previously opened for the First Respondent.
Peter Andrew
had no knowledge that these funds were for the Second Respondent’s
account and the file was opened in the First
Respondent’s
name. The Second Respondent did not feature at all.
According to Peter Andrews, the funds were disbursed
at the express
instructions of the First Respondent as per annexure JDM3 of the
founding papers. He referred to the funds
as his, as per
instructions dated the 8
th
of October 2013, “
pay balance of
my funds held in trust to the following account…
”
and gave the Second Respondent’s account details.
10.2
Moosa Asmal, the second member of the Close Corporation disputed
knowledge of the Second Respondent as a loan account
creditor of the
Close Corporation. The transfer was made in August 2013, when,
according to Moosa Asmal, the Close Corporation
had discontinued
trading in May/June 2013.
10.3
Oscar Naidoo, the third member of the Close Corporation also informed
the commissioner that he had no knowledge
of the Second Respondent as
a loan account creditor of the Close Corporation. He left the
Close Corporation in April/May
2013 when it had discontinued trading.
10.4
Vather, the accounting officer of the company, had produced annual
financial statements of the Close Corporation
between years 2011 to
2013. The loan accounts of the members of the Close Corporation
as reflected in 2011 to 2013 showed
only one credit loan account,
that being of the First Respondent. There is no reference to
the Second Respondent as having
a credit loan account. Moosa
Asmal and Oscar Naidoo have deposed supporting affidavits in
replication to this application
10.5
The amounts withdrawn from the Close Corporation’s bank
account, six (6) months preceding the commencement
of the winding up
of the Close Corporation were in the name of the First Respondent and
for the benefit of the First Respondent.
These payments were
made on the following dates 26 July 2013; 12 August 2013; 16 August
2013; 2 September 2013; 10 September 2013;
30 September 2013 and 7
October 2013 respectively.
10.6
It is Applicants’ case that whilst the Close Corporation was
insolvent and illiquid during the 2013 financial
year, the First
Respondent for his benefit continued to make payments in various
guises, viz, loan repayment, excessive remuneration
and interest.
Prior to the transfer of these funds, a formal demand was made on
behalf of its creditor Aveng Trident Steel
(PTY) LTD, in terms of
Section 68(c) read with Section 69(c) (a) of the Close Corporation
Act
[4]
. Despite demand the
Close Corporation failed to make any payment to the said Aveng
Trident Steel (PTY) LTD.
11.1
The Applicants submit that the transfers or withdrawals made as
stated above constitute voidable preference as
they were made six (6)
months before commencement of the liquidation; they preferred the
First Respondent above the Close Corporation’s
creditors
including its major unsecured creditor Aveng Trident Steel and that
such payments were made at the time when the liabilities
of the
Corporation exceeded its assets and when it was deemed unable to pay
its debts in terms of Section 69(1)(a) of the Close
Corporation Act.
11.2
It is further submitted that these were collusive dealings between
the Corporation and First Respondent and/or
Second Respondent because
all such dealings were concluded by the First Respondent in his
personal capacity with the Corporation;
represented by him as a
member thereof, for the benefit of himself and/or the benefit of the
Second Respondent in respect of these
withdrawals.
11.3
That these withdrawals have also had the effect of preferring one of
its creditors the First Respondent or Second
Respondent or both above
another proved creditor Aveng Trident Steel (PTY) LTD.
[12]
It is trite that the Applicants in the case of undue preference, must
prove that the disposition must have
been made at any time before
sequestration and while the liabilities of the debtor exceeded his
assets, with the intention of preferring
one creditor above others.
The intention is proved by showing that the debtor was aware of his
insolvent state, but
nevertheless made a disposition or the intention
can be inferred from actions or statement made by the debtor.
13.1
The First Respondent in his answering affidavit tries to explain how
the Second Respondent advanced funds to the
Close Corporation.
He refers to certain persons, who are not identified by him, as
having advanced funds to the Second Respondent.
He represented
the Second Respondent in that regard. These nameless persons
were unaware that he invested in the Close Corporation;
therefore
there is no privity of contract between the nameless persons and the
Close Corporation. The repayments were made
to the Second
Respondent represented by himself, hence, the payment of R1,9 million
by the Close Corporation to Peter Andrew’s
legal firm.
These instructions were in line with the agreement that loans to the
Second Respondent would be settled as soon
as funds were available.
13.2
He then tries to explain a very intricate transaction involving the
payment of R300 000.00 to his mother.
He explained that
his mother had come to their rescue when the corporation had
insufficient funds to pay the Second Respondent.
In a repayment
to his mother, he also transferred a Tongaat property to her.
That despite these payments, the Corporation
was still indebted to
the Second Respondent to the sum of R5 million. All the loans
were erroneously reflected as being from
the First Respondent.
Moosa Asmal and Kumarin Naidoo were aware of the loans from the
Second Respondent.
13.3
No paper trail has been produced by the First Respondent indicating
this investment scheme, save for a typed schedule
in annexure “C”
of his affidavit. He could not have run such a scheme on
annexure “C”, there must
have been proof of deposits,
payments etc. Without providing details of such persons they
could not be subpoenaed to the
section 417 enquiry. The
question which comes up on my mind is whether they are existent or
non-existent. It is stated
that the Commissioner had directed
the First Respondent to provide the details and paper trail of the
investment scheme by the
end of October 2014, but no such details
have been furnished by the First Respondent. Ms Singh on behalf
of the First Respondent
had stated as follows to the commission:
“…
Our
client is unable to distinguish the various funds which came into GSC
and unable to distinguish the sources from which various
amounts of
funds received by GSC from the various sources were directed to.”
This
can only mean that the lending scheme is non-existent.
[14]
The loans made to the Corporation were in the First Respondent’s
name and there is nothing to suggest
from the Corporation’s
financial books or annual statements that the loans were made by the
Second Respondent. The
First Respondent was very quick to point
out that if judgment was given against him and the Second Respondent,
it would be an empty
judgment. One wonders how that could be
for a company that was receiving millions from its investors, and
charging an exorbitant
rate of interest that it can be said not to
have assets. The replying affidavit states that it emanated at
the enquiry that
the Second Respondent has no relationship with the
Receiver of Revenue. It could be that this investment scheme
was not regulated
in terms of the Bank Act
[5]
.
The exorbitant interest charged, which is above the legal rate of
interest, leaves a lot to be desired. One can only
ask why
would he subject his company to such an exorbitant rate of interest?
Whether the First Respondent had informed Peter
Andrew that the R1,9
million payment was in respect of the Second Respondent is
unsubstantiated without any proof thereof, as no
record reflects the
Second Respondent.
[15]
The First Respondent submits that the payments that these were made
to him were all incurred in the ordinary
course of business therefore
not voidable preferences.
[16]
It is important to note that irrespective of whether the payments
were made to him or to the Second Respondent,
it is irrelevant for
purposes of this application. What is relevant is whether the
payments were made, in contravention of
Section 29 of the Insolvency
Act, as read with Sections 30 and 31 of the Close Corporation Act.
The First Respondent and
other two (2) members as members of the
Close Corporation had a joint obligation as to the affairs of the
company; not only the
CEO thereof, he cannot therefore, deny that he
was not aware of the state of affairs in the Close Corporation.
[17]
Kumarin Naidoo effectively left the Close Corporation on the 31
st
of March 2013, which is not disputed by the First Respondent and
could not have authorised the payment of R1,9 million made on
the
16
th
of August 2013. It is also not clear why this particular
payment had to go to the trust account of the attorney, instead
of
the Second Respondent’s account. There is also no
evidence here proving that these were loans paid in the course
of
business of the Close Corporation. The First Respondent’s
evidence at the enquiry is that with the departure of
Naidoo, trading
came to a standstill; therefore, the payments could not have been
made in the course of business of the Close Corporation.
[18]
It is clear that as early as March 2013, the Close Corporation was
unable to pay its debts and that the salary
paid to the First
Respondent for April, May, June, July and September 2013 ought to be
paid back in terms of Section 70 read with
Section 71(1)(a)(b) of the
Close Corporation Act and Section 29 is applicable as those payments
fall within the six (6) month period
before liquidation. It is
also common cause that the Close Corporation was placed under
business rescue on the 13
th
of September 2013, the payments were made when it was not in a
position to pay its debts. By the 8
th
of October 2013, the business rescue practitioner had in fact deposed
to an affidavit to place the Close Corporation under liquidation.
[19]
The Close Corporation’s account stood at R 104.35 on the 17
th
of April 2013 and as at the 16
th
of August 2013 it had a credit of R1 919 074.28.
Immediately thereafter, a transfer of R1,9 million was made to
Natalie Lange attorneys, preferring the First Respondent to other
creditors. It also shows the collusive dealing between
the
Close Corporation, represented by the only member left, the First
Respondent, with the First Respondent in his personal capacity
or in
his capacity as representative of the Second Respondent, pursuant to
the provisions of Section 31 of the Insolvency Act.
[20]
The Respondents’ defence is that the payments were made in the
course of business. In the ordinary
course of business is fully
described in
Gazit
Properties (PTY) LTD v Deon Marius Botha N.O. and Others
[6]
.
In
the Gazit case the gist of the case was that Malokiba had repaid the
loans in accordance with its obligations in terms of a valid
underlying loan agreements in the ordinary course of business.
The actions of Malokiba appeared to be in contravention of
the Banks
Act
[7]
as it operated without
being a registered bank, it charged an interest far above the
required legal rate of interest and its transactions
constituted a
prohibited pyramid scheme. The Court found that
Malokiba’s general business model allowed it to
make the
disputed payments.
[21]
Malokiba’s business is completely different to the business
conducted by the Close Corporation.
The Close Corporation’s
core function was steel trading not lending and investing funds.
There was no obligation on
the part of the Close Corporation to
prefer to pay either the First or the Second Respondent. There
is also no evidence in
this case of the existence of such loans to
the Close Corporation. The source of payment here is relevant,
being the Close
Corporation, which had seized trading due to its
inability to pay debts. The major creditor, a trader relevant
to the business
of the Close Corporation, was not paid a cent, but
the First and/or the Second Respondents were paid when the Close
Corporation
was unable to meet its obligations.
[22]
The test is an objective one, to determine if the disposition was
made in the course of business or not.
It amounts to a
consideration of whether having regard to the terms of a transaction
and the circumstances under which it was entered
into, the conclusion
can be drawn that the transaction was one which would normally have
been entered into by a solvent business.
In making such a
determination all the surrounding factors are taken into account,
here amongst others, the timing of the payments,
the persons paid and
their relationship to the Close Corporation.
[23]
The test is all encompassing as stated in
Jacobson
and Co’s Trustees v Jacobson and Co
[8]
where De Velliers AJA, as he then was, stated as follows:
“
Now
before the Court would be entitled to say that the disposition was in
the ordinary course of business it would have to be satisfied
that it
is in possession of all the facts, for only then would it be in a
position to decide whether the contracts themselves,
which form the
basis of a transaction are genuine: since a delivery which rests on a
contract which itself is open to question
cannot be said to be a
delivery in the ordinary course of business.”
[24]
It is my view that the disposition was not a “
lawful
”
disposition in the sense that it was not in the course of business of
the Close Corporation. A close scrutiny is required
of the
cause of the disposition. I am not persuaded that the
dispositions were made in the course of business of the Close
Corporation.
[25]
In
Jacobus
Hendrikus,
Janse
Van Rensburg NO. and Another v Griffiths
[9]
,
ordinary course of business in the context of section 29 is defined
as meaning a “lawful” disposition made in the
ordinary
course of a “lawful” business. In determining this
aspect, I have taken into account the surrounding
factors to
determine if the payments were made in the course of “lawful”
business of the Close Corporation. The
Close Corporation had
seized trading by the 1
st
of June 2013; the company had been placed under business rescue
before its liquidation which is a clear indication that by then
it
was struggling to meet its commitments, that it could not have
afforded to pay 36% interest on loans and let alone the salary
of its
member. Furthermore, a formal demand for payment had been made
by a creditor as early as April 2013, but no payment
to this major
creditor was made, instead, the Second and/or the First Respondent
were paid. The sole controlling member of
Close Corporation
pays according to him the Second Respondent, his
alter
ego
,
where he is also a sole shareholder. The funds are conveniently
paid to an attorney’s account, a third party, to disperse
to
various parties on behalf of the Second Respondent for the first time
in the trading history of the Close Corporation.
[26]
I also accept as submitted by Counsel for the Applicants that the
First Respondent had a clear intention
to prefer either himself
and/or the Second Respondent.
[27]
Counsel for the Respondents referred me to
Cooper,
Brian, St Clair and Janse van Rensburg, Jacobus Hendrikus v Merchant
Trade Finance Limited
[10]
,
where Zulman JA dealt with the issue of “an intention to
prefer” in Section 29 (1) of the Insolvency Act.
Judge Zulman’s view is that it is essential “to weigh up
all the relevant facts which prevailed at the time that the
disposition was made in order to determine what, on a balance of
probabilities, was the “
dominant,
operative or effectual intention in substance and in truth
”
of the debtor for making the disposition.” It is common
cause that the test is a subjective one. The mere
effect of a
transaction is not sufficient to prove that there has been a voidable
preference; an additional requirement is that
there must have been an
intention to prefer on the part of the debtor. An actual
intention is required of a debtor who prefers
another.
[28]
In this regard, I have considered the relationship that the First
Respondent has with the Second Respondent.
He is the sole
member of the Close Corporation and sole member of the Second
Respondent. One of the payments made was made
to his own mother
in a vague and strange transaction. There was no pressure upon
him to pay the Second Respondent unlike
Aveng who had made a formal
demand, but he still preferred to pay the Second Respondent.
These circumstances, including the
payment to an attorney of the
R1,98 million, show the intention to prefer the Second Respondent.
He also prefers to pay himself
a salary. These facts are
completely different from the facts in the Zulman judgment, where a
notarial bond was registered
almost three (3) years ago before the
liquidation of the company or even before liquidation was
contemplated. I cannot find
another compelling reason for the
First Respondent to have made these payments at the time when he was
fully conversant with the
status of the Close Corporation, when these
payments were made.
[29]
Zulman JA also dealt with the phrase “
ordinary
course of business
” where the
test to be applied is an objective test. In that case he found
that the transactions were done in the course
of business. It
is clear from the circumstances of this case that, at the time of the
disposition, that the First Respondent
paid himself and the Second
Respondent with the intention of preferring himself and the Second
Respondent and that these transactions
were not made in the ordinary
course of business of the Close Corporation. The Second
Respondent is not a trader in the steel
industry. By the 13
th
of September 2013, the Close Corporation had been placed under
business rescue and he was aware that the company was struggling
to
meet its obligations. With all that knowledge at his disposal,
he nevertheless makes payments to the Second Respondent.
There
is no any other intention that I can infer from these facts, save
that he intended to prefer himself or the Second Respondent.
The Respondents have failed to discharge the onus that rests upon
them.
30.1
The Respondents have also raised a defence that there is a dispute of
facts and the application must be referred
to oral evidence.
The Applicant ought to have proceeded by way of action than by way of
motion proceedings. Indeed,
there are dispute of facts, but
they relate to what caused the Close Corporation to be placed in
liquidation. Those issues
are being aired and dealt with at the
417 enquiry. It would have been a different case if there was
no such enquiry.
Secondly, the dispute of facts do not pertain
to the core of the application before me, which relates to the
impeachable transactions
only. The enquiry has with certainty
established the amounts paid, the dates of the transactions, what is
only left for this
Court is to determine if these transactions
qualify as impeachable transactions or not. The two (2) former
members of the
Close Corporation have filed supporting affidavits to
the replying affidavit, thus clearing any dispute of facts, relating
to the
core of this application.
30.2
I have undertaken an objective analysis of such disputes of facts, I
have also taken a robust approach to such
dispute of facts as
advocated in
Buffalo
Freight Systems (PTY) LTD v Castleigh Trading (PTY) LTD and
Another
[11]
.
I therefore find that it is just and equitable to proceed with this
matter by way of motion of proceedings. All the
parties to the
application were able to address and make submissions on the points
at issue, irrespective of the dispute of facts
that have been raised
by the Respondents. It is my view that there is no genuine
dispute of facts in this matter as raised
in the pre-trial conference
and at the hearing of this application in so far as this application
is concerned.
30.3
The Respondents have also submitted that the rights of the
Respondents have been infringed in terms of Section
8(1) of the
Constitution of the Republic of South Africa, in that the
interrogation compromised their rights to the
audi
alteram partem
principle, therefore, this matter has to be referred to oral
evidence. This Court is not seized with the enquiry, the
enquiry
which is still on-going. It cannot determine what is
not before it. The Respondents have every right to challenge
the
process of the enquiry in an appropriate judicial process, but
not in this application.
[31]
I therefore find that the Applicants have discharged the onus placed
upon them and are entitled to the following order:
1)
Declaring that the following amounts paid
by the Corporation from its Nedbank Kingsmead Branch bank account
number: 1442014814 to
the following persons in the following amounts,
namely:
1.1
R41 000.00 (Asharf sal July) on 26 July 2013;
1.2
R11 000.00 (Ash expenses) on 12 August 2013;
1.3
R1 900 000.00 (n/l trust) on 16 August
2013;
1.4
R200 000.00 (inv return) on 2 September 2013;
1.5
R50 000.00 (inv return) on 10 September 2013;
1.6
R41 000.00 (Ash salary) on 30 September 2013;
and
1.7
R250 000.00 (inv return) on 7 October 2013.
TOTAL:
R2 493 000.00
Constitute
voidable preferences of the property of the Corporation, as debtor
to, in favour of and for the benefit of the First
Respondent and/or
the Second Respondent as the Corporation’s other creditors
,within a period of 6 (six) months preceding
the winding-up of the
Corporation at a time when its liabilities exceeded the value of its
assets, were not made in the ordinary
course of the business of the
Corporation and were intended to prefer one or more of the
Respondents’ creditors above another,
under and pursuant to the
provisions of
Section 29
of the
Insolvency Act 24 of 1936
, as read
with
Section 32
,
31
,
30
(1)(2) and
26
(1)(b) of the
Insolvency Act.
2)
Declaring
it to be competent for the
Applicants to recover from the First Respondent, alternatively, the
Second Respondent, or further alternatively,
from the First and
Second Respondents, jointly and severally, the one paying the other
to be absolved, the amounts reflected in
1.1 to 1.7 above, for the
purpose of setting aside such disposition under and pursuant to the
provisions of
Section 29
, as read with
Section 32
,
30
(1)(2) and
26
(1)(b) of the
Insolvency Act 24 of 1936
, as amended;
3)
Directing the First Respondent,
alternatively, the Second Respondent, or further alternatively, the
First and Second Respondent,
jointly and severally, the one paying
the other to be absolved, to forthwith repay the amounts for in 1.1
to 1.7 of paragraph 1
above, together with interest thereon at the
rate of 9% per annum a
tempore morae
,
to date of payment;
4)
Directing that the First and Second
Respondents pay the costs of this Application on a party and party
scale, jointly and severally,
the one paying the other to be
absolved.
MBATHA
J
Date
of hearing : 11 August 2015
Date
delivered : 23 September 2015
Appearances
:
For
the Applicant : Adv. W.N. Shapiro
Instructed
by : Fairbridges Wertheim Becker Inc.
c/o
Berkowitz Cohen Wartski
Durban.
For
the Respondents : Adv M.S. Khan
Instructed
by : A. Sing and Associates
Overport
Durban
[1]
Act
24 of 1936.
[2]
Constitution
Act 108 of 1996.
[3]
Act
61 of 1973.
[4]
Act
69 of 1984.
[5]
Act
94 of 1990.
[6]
(873/10)
[2011] SASCA 199 (23 November 2011).
[7]
Act
94 of 1990.
[8]
1920
AD 75.
[9]
(2101/2002)
[2014] ZAECPEHC 20;
[2014] 2 All SA 670
(ECP) (25 March 2014).
[10]
(474/97)
[1999] ZASCA (1 December 1999)
[11]
(311/09)
[2010]ZASCA 66,
2011 (1) SA 8
(SCA);
[2011] 1 All SA 1
(SCA) (24 May
2010).