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[2014] ZAGPPHC 25
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Lak Investments Company N.O (Pty) Ltd v Pressure Advance Technology CC (55018/2011) [2014] ZAGPPHC 25 (20 February 2014)
IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
Case
number: 55018/2011
Date:
20 February 2014
In the matter
between:
LAK INVESTMENT
COMPANY NO 26 (PTY) LTD
..................................
Applicant
And
PRESSURE ADVANCE
TECHNOLOGY CC
.................................
First
Respondent
JUDGMENT
PRETORIUS J,
[1] This is an
application for rescission of a final liquidation order granted on 28
March 2012. The respondent applies in this
application, to set aside
or rescind the winding-up order.
[2] On 26 September
2011 the applicant issued a winding-up application against the
respondent. This application was served by the
Sheriff by forwarding
it by registered post to the respondent in terms of rule 4(1)(a)(v)
of the Uniform Rules of Court.
[3] Rule 4(1)(a)(v)
provides as follows:
“(1)(a)
Service of any process of the court directed to the sheriff and
subject to the provisions of paragraph (aA) any document
initiating
application proceedings shall be effected by the sheriff in one of
the following manners:
(v) in the case of a
corporation or company, by delivering a copy to a responsible
employee thereof at its registered office or
its principle place of
business within the court’s jurisdiction, or if there be no
such employee willing to accept service,
by affixing a copy to the
main door of such office or place of business, or in any manner
provided by law; ”
[4] The winding-up
application was served on the respondent by forwarding it by
registered post by the sheriff, although the rule
does not provide
for service in such a way. A copy of the application was affixed to
the main front door of the respondent’s
place of business and
the sheriff alleged in the return of service that this was done in
terms of rule 4(1)(a)(ii). Rule 4(1)(a)(ii)
provides:
“(1)(a)
Service of any process of the court directed to the sheriff and
subject to the provisions of paragraph (aA) any document
initiating
application proceedings shall be effected by the sheriff in one of
the following manners:
(ii) by leaving a
copy thereof at the place of residence or business of the said
person, guardian, tutor, curator or the like with
the person
apparently in charge of the premises at the time of delivery, being a
person apparently not less than sixteen years
of age…”
[5] It is quite
clear from the return of service by the sheriff that he did not
comply with the rule at all. The sheriff reported
in the return of
service:
“I certify
that on the 14th day of OCT 2011 and at GALLOWAY STR MEYERTON which
is the RESPONDENT’S place of business,
I served the annexed
NOTICE OF MOTION, AFFIDAVIT – WD ANGERMAIER by affixing a copy
to the main front door.”
The respondent
alleges that it never received the application.
[6] A provisional
liquidation order was granted on 2 November 2011. According to the
documents this order was served on the respondent
by the sheriff on 4
January 2012 by affixing a copy of the order to the main front door
of the respondent’s place of business,
without setting out the
time of service or why no other service was possible. He reported:
“I certify
that on the 4TH day of JAN 2012 and at 55 GALLOWAY STR MEYERTON which
is the RESPONDENT’S place of business,
I served the annexed
COURT ORDER – 2 NOV 2011 by affixing a copy to the main front
door.”
[7] Service on the
respondent’s employees were dealt with as follows according to
the applicant in the founding affidavit:
“It is not
within the knowledge of the applicant if the respondent has any
employees. A copy of this application will be served
at the
respondent’s main place of business by attachment to the main
gate or main door of the business premises as notice
to all employees
at 55 Galloway Street, Meyerton.”
[8] There is no
indication that the application or order for provisional liquidation
was served on the employees as envisaged by
the Act. There is no
return of service by the sheriff, indicating that there has been any
service or attempt of service of the
provisional liquidation order on
any employee or Trade Union.
[9] Rule 4(1)(a)(v)
provides that service on a company such as the respondent should take
place by delivering a copy of the application
to a responsible
employee at the registered office or principle place of business of
the company.
[10] This rule does
not provide for service by registered post. The sheriff did not
comply with the rule and furthermore gave no
reason for the
non-compliance in the return of service.
[11] Rule 42
provides in regards to rescission of orders or judgments as follows:
“The court
may, in addition to any other powers it may have, mero motu or upon
the application of any party affected, rescind
or vary:
An order or judgment
erroneously sought or erroneously granted in the absence of any party
affected thereby;”
[12] The respondent
relies on rule 42 to have this winding-up order set aside, due to the
alleged lack of proper service on the
respondent and the employees
and/or trade union of the respondent. If the court finds that it
stands to be set aside or rescinded
as the judgment was erroneously
sought or granted, the need to show good cause falls away.
[13] In Standard
Bank of SA Limited v Sewpersadh and Another
2005 (4) SA 148
(C) on
156 B – D where Dlodlo J held”
“It is clear
from the above that the Legislature used the word 'must' and did not
use 'may'. The furnishing of copies of the
application to the
Commissioner for Inland Revenue, the employees and trade unions was
therefore made peremptory (obligatory) and
not permissive. (See
Berman v Cape Society of Accountants 1928 (2) PH M47 (C).) The word
'must' was also used by the Legislature
in defining the obligation of
the petitioner as far as proof of service is concerned. The applicant
was left with no option of
filing an affidavit. It was necessary to
do so.”
[14] In Hendricks NO
v Cape Kingdom (Pty) Ltd
2010 (5) SA 274
(WCC) the court determined
that in regards to section 346(4)(A)(a)(ii), which prescribes how
notice must be given to employees
that the court cannot grant
condonation due to the non-compliance with the requirement that an
application must be furnished to
employees, as the provision is
premptory.
[15] Blieden J held
in the unreported case of Peter Wayne Roberts v The Taylor of
Buckingham CC Case No 2008/21864 in paragraph
13:
“… The
application for winding-up, when it was lodged with the Registrar,
required that the applicant at that time
complied with the
requirements of subsection 346 (4A). Had the court been aware that
there had been no such compliance the matter
would have been struck
off the roll. The fact that the matter has now been fully argued does
not change the position. The application
should not have been heard
in the first place. It was not properly before the court ”
[16] The facts in
this application for rescission is similar to that of the Wayne
Roberts case.
[17] In Fraind v
Nothmann
1991 (3) SA 837
(W) at 839 H Streicher J found:
“In the
premises, there had not been service of the summons on the applicant
and the judgment should not have been granted
against him. Judgment
was therefore granted erroneously in the absence of the applicant and
is liable to be set aside in terms
of Rule 42(1)(a).”
[18] The sheriff did
not set out any particulars as to why he affixed the copy of the
notice of motion and affidavit to the front
door of the business.
There is no indication in the return of service as to why it was not
served on a person on 14 October 2011
at the place or registered
business address of the respondent or that any attempt was made to
serve the application for winding
up and/or the provisional court
order as set out by Rule 4(1)(a)(v) or 4(1)(a)(ii).
[19] There is no
indication on any returns of service that an effort had been made to
serve the notice of motion and affidavit for
the provisional
liquidation of the applicant on the employees or a trade union.
[20] There is no
mention of employees or a trade union in any of the returns of
service. The applicant did not comply with the provisions
of section
346 A (a)(i) and (ii) or section 346 (4(A)(iv)) pertaining to service
on the employees or the trade union.
[21] It is also
telling that no track and trace reports from the Post Office were
submitted and the court cannot make a finding
that it was sent and
delivered to the correct post office.
[22] No special
circumstances exist for the court to make the inference that it has
been proved that the respondent, employee and
the trade union
received notice and were aware of the application.
[23] The court
cannot condone non-compliance with section 346 (4A) and with section
346 A, as these provisions are peremptory.
[24] In Sebola and
Another v Standard Bank of SA ltd
2012 (5) SA 142
(CC) the court
dealt, inter alia, with the meaning of the words “provide”
and “deliver” dealing with the
National Credit Act. The
court stressed that the consumer has to receive notice of his rights.
In this instance, where the status
of an entity is involved, it will
be even be more important to ensure that the respondent, its
employees and the trade union are
informed of the winding-up
proceedings.
[25] In Stride v
Castelein
2000 (3) SA 662
(W) Marais J found at 667 I:
“The granting
of a provisional sequestration order has the most drastic
consequences. It involves a change in status; it divests
the
respondent of his assets and vests them in a provisional trustee as
soon as the latter is appointed; it affects the ability
of the
respondent to conduct his business and trade; it affects his
reputation as a person and a trader. In my view, it is wholly
wrong
to cause this massive prejudice to a man who may, if given notice, be
able to resist the application.”
[26] In the present
appeal there can be no doubt that the audi alterem partem rule had
not been complied with as the respondent,
employees and trade union
had not known of the application and final windingup order granted by
the court.
[27] The only
conclusion the court can come to having regards to the facts, the
arguments, the pleadings and the authorities referred
to, is that
there had been no proper service on the respondent, the respondent’s
employees or trade union.
[28] Rule 42(1)(a)
makes provision that the court may set aside an order which had
erroneously been sought or erroneously given.
In this instance the
court finds that there was no service or no proper service on the
respondent, the employees or the trade union
and therefor it is
necessary to set aside the application as it was erroneously granted.
[29] I make the
following order:
1. The final
winding-up order granted on 28 March 2012 is rescinded;
2. The respondent is
granted the opportunity to oppose the application;
3. The applicant to
pay the costs of this application.
Judge C Pretorius
Case number
: 55018/2011
Heard on : 3
February 2014
For the Applicant
/ Plaintiff : Adv SM Maritz
Instructed
by : Mills & Groenewald
For the
Respondent : Adv JE Ferreira
Instructed
by : HW Smith & Marais
Date of
Judgment : 20 February 2013