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[2014] ZAGPPHC 59
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Lak Investment Company No 26 (Pty) Ltd v Pressure Advance Technology CC (55018/2011) [2014] ZAGPPHC 59 (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