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[2014] ZAFSHC 145
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Knipe v Master, Free State High Court, Bloemfontein and Others (956/2014) [2014] ZAFSHC 145 (7 August 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 956/2014
In
the matter between:-
JOHN
DOUGLAS JANSE KNIPE
….....................................................................................
Applicant
and
THE
MASTER, FREE STATE HIGH COURT,
BLOEMFONTEIN
…....................................................................................................
First
Respondent
SCHAAPPLAATS
978 (EDMS) BPK (IN LIQUADATION)
…............................
Second
Respondent
JOHAN
LOFTUS VILJOEN
….................................................................................
Third Respondent
SIMON
MALEBO RAMPOPORO N.O.
….............................................................
Fourth
Respondent
CHAVONNE
BADENHORST ST. CLAIR COOPER N.O.
…..................................
Fifth
Respondent
OTTLIE
ANTON NOORDMAN N.O.
…...................................................................
Sixth
Respondent
JUDGMENT
BY:
RAMPAI,
J
HEARD
ON:
26
JUNE 2014
DELIVERED
ON:
7
AUGUST 2014
[1]
The matter came to court by way of motion proceedings. The applicant
primarily seeks to have a decision of the first respondent
reviewed
and set aside. The decision concerned the second respondent and was
made in favour of the third respondent only. The review
application
is opposed by the third respondent. The rest of the respondents
abide.
[2]
The applicant, Mr John Douglas Jansen Knipe and a certain Mr André
Knipe were shareholders in the second respondents,
in other word
Schaapplaats 978 (Edms) Bpk and another company known as Kameelhoek
(Edms) Bpk. The third respondent was an appointed
legal
representative of the two companies. An application was launched to
have the two companies liquidated. The provisional liquidation
order
was granted on the 30
th
August 2012. The fourth, fifth and
sixth respondents were appointed by the first respondent as
provisional liquidators.
[3]
The second respondents Schaapplaats 978 (Edms) Bpk and Kameelhoek
(Edms) Bpk were finally liquidated on the 27
th
July 2013.
See
Knipe and Others v Kameelhoek (Edms) Bpk and Another
2014 (1) SA 52
(FB) – per Daffue J.
[4]
On the 25
th
September 2013 an application for leave to
appeal against the final liquidation was dismissed. Mr JDJ Knipe and
Mr A Knipe as shareholders
took the matter to the SCA on the 27
October 2013. They sought leave to appeal. On the 5
th
January 2014 the SCA refused them leave to appeal.
[5]
The aforesaid liquidators convened in terms of section 386(1)(d) of
the Companies Act of 1973 a general meeting of creditors.
The meeting
was scheduled for the 16
th
April 2014. The notice in terms
of section 186 was published. Among others the notice appeared in two
newspapers, Die Volksblad
and Express in addition to the Government
Gazette. Over and above those three media of communication the fourth
respondent saw
to it that the notice of the proposed meeting was
mailed to the creditors of the second respondent, interested parties
as well
as the shareholders such as the applicant.
[6]
The notice was drafted as follows in Afrikaans:
“
ALGEMENE
VERGADERING VAN DIE MAATSKAPPY, KONTRIBUANTE EN KREDIETEURE:
KAMEELHOEK (EDMS) BPK (IN LIKWIDASIE)
Meestersverwysingsnommer:
B111/2012.
Gehou
te word om 09:00 op Dinsdag 16 April 2013 voor die Meester van die
Hooggeregshof, Old Southern Life Gebou, h/v Maitland- en
Aliwalstraat, 3de vloer, Bloemfontein.
Redes
vir die vergadering:
Vir
die verkryging van opdragte van die lede, kontribuante en
krediteure, indien toepaslik, met betrekking tot ‘n dispuut
tusen twee stelle lede met betrekking tot sekuriteit op die plaas en
die quantum daarvan,
Om
algemene opdragte wat nodig is in hierdie boedel aan die
likwidateure te gee rakende die beheer neem van die bates,
Vir
‘n ondervraging in terme van Artikel 417 van die Maatskapywet
CBS COOPER,
p/a Cooper Trust, Reidstraat, Westdene, Bloemfontein, 9301.
Tel.
051 4480096.”
[7]
The English version thereof was set out in annexure “D2”.
It reads as follows:
“
GENERAL
MEETING OF THE COMPANY, CONTRIBUTORIES AND CREDITORS OF: KAMEELHOEK
(PTY) LTD (IN PROVINSIONAL LIQUIDATION)
Master’s
Reference Number B111/2014
To
be held at 09:00 on Tuesday, 16 April 2013, before Master of the High
Court, Old Southern Life Building, C/o Maitland and Aliwal
Streets,
2
nd
Floor, Bloemfontein.
Reasons
for the meeting:
To
obtain directions from members, contributories and creditors if
applicable in regard to a dispute between two sets of members
in
respect of security at the farm and the quantum thereof.
Give
General directions that may be necessary in this estate for the
purpose of the Provisional liquidators securing the assets,
For
the holding of an enquiry in terms of section 417 of the Companies
act.
CBS
COOPER, C/o Cooper Trust,
14
Reid Street
Westdene
BLOEMFONTEIN
9301
Tel.
051448 0096”
[8]
The meeting was indeed held on the 16
th
April 2014 and
conducted as a general meeting in terms of section 386, Companies Act
61 of 1973. The proceedings for the meetings
were recorded. The
minutes were attached to the founding affidavit as an annexure “B”,
vide page 34 – 41 of the
record. Annexure “B”
revealed that during the course of the general meeting the third
respondent’s claim was
tabled before the meeting; that the
third respondent’s claim had been lodged with the first
respondent against two business
enterprises: namely Schaapplaats 978
(Edms) Bpk as well as Kameelhoek (Edms) Bpk; that the first
respondent found that the third
respondent’s claim had been
proven and allowed it; that the first respondent accepted that the
third respondent had rendered
legal services to the two business
enterprises as an attorney and that the monetary value of such legal
services had been quantified
by the third respondent as R12625875,04.
[9]
There were a number of grounds on which the review application was
founded. Among others, it was contended that the general
meeting was
not convened for the purpose of proofing claims of creditors. That
was the principal ground on which the decision of
the first
respondent was attacked.
[10]
I deemed it expedient to deal with the aforesaid principal contention
first. Section 386(1)(d) of the Companies Act 61 of 1973
empowers a
liquidator of a company to convene a general meeting of a company,
its creditors and contributors for the purpose of
obtaining their
authority or sanction in respect of any matter or for such purpose as
the liquidator may consider necessary. A
meeting contemplated in the
section is a general meeting. See Henochsberg on the
Companies Act 71
of 2008
, vol 2, APP1-182:
[11]
Section 364
, Act 71 of 1973 makes provision for the first meeting of
creditors. It empowers a liquidator to convene the first meeting of
creditors.
Among others, a liquidator may convene the first meeting
of creditors for the purpose of calling upon creditors to prove their
claims against a company concerned, subsection 1(a)(ii) read with
section 366, Companies Act 1973, Henochsberg
supra
APP1-130 –
134 and APP1-136 to 147,
Insolvency Law
, Meskin p 7-6 –
7-8.
[12]
A general meeting of creditors cannot, in terms of section 386(1)(d)
Companies Act 1973, be convened for the purpose of proving
claims of
creditors -
Law of Insolvency
, Meskin p 7-2, 7-8(1).
[13]
It is permissible for a liquidator to simultaneously convene a
meeting of creditors as both a general meeting and as a first
meeting
of creditors. However, where a liquidator chooses to do so, the dual
character of such a meeting must be expressly mentioned,
the meeting
convened and advertised as such – De Hart NO v The Master
1971
(3) SA 366
(O) on 374. I hasten to point out that, in this instance,
the meeting was convened as a general meeting and nothing else but a
general meeting – anx “x”, anx “d” and
anx “e”.
[14]
It is incumbent upon a liquidator whose duty it is to convene a
general meeting in terms of section 386(1)(d) to expressly
mention in
a notice whereby a general meeting is convened, the business of the
meeting, that is to say: the matter(s) in respect
of which creditors’
direction will be sought –
Essop v The Master and Another
1983 (1) SA 926
(C) at 932C – E;
Insolvency Law
,
Meskin p 7-2, 7-9.
[15]
Where, as in this instance, directions were sought and granted and
claims of creditors proven and accepted which were not specifically
mentioned in an advertised notice of that general meeting as part of
the business to be transacted at such a general meeting, such
directions, resolutions or proofs of claims were regarded as invalid.
They were invalidated because some creditors would not have
had
proper notice of all the matters to be discussed to enable them to
decide whether to be present or not –
Ex Parte Meer: In
Re: Indent Wholesalers v Meer’s Retailers (Pty) Ltd
1950 (3) SA 780
(D) at 785;
Marques and Another v De Villiers
and Another NNO
1990 (4) SA 415
(W) on 418 – 422.
[16]
In
casu
the applicant was notified about the general meeting.
However he was not notified about the intended proof of claims of
creditors.
He sent his attorneys to attend the general meeting on his
behalf. Neither he nor his attorney had any inkling that proof of
creditors’
claims would be on the agenda for deliberations.
They and other creditors were unaware that creditors could submit
their claims
against the second respondent to the first respondent
before a specified deadline. Of all the creditors, uninformed and
ignorant
the only exception was the third respondent. He was notified
beforehand by the sixth respondent to submit his claim to the first
respondent. Such an invitation was, however, not courteously, let
alone statutorily, extended to anyone else. Such conduct was,
in my
view, highly objectionable and disturbingly irregular. It was heavily
loaded with a cargo of prejudice.
[17]
A few unsavoury things emerged from the conduct of some of the
respondents. Firstly, the third respondent was unfairly preferred
at
the expense of the rest of the creditors and exclusively selected to
submit his claims. Secondly, the first respondent unfairly
overruled
the legitimate objections raised as regards the procedural
irregularities concerning the third respondent’s claim.
Thirdly, section 386 was misapplied.
[18]
On the proven averments or allegations of fact the following findings
are justified:
18.1
That section 386 makes no provision for the proof of claims at a
general meeting convened in terms of section 386(1)(d) Companies
Act
61 of 1973;
18.2
That the provisions of the 1973 Companies Act read together with the
provisions of the 1936 Insolvency Act make it clear that
the
creditors’ claim can only be proven in terms of section 364
read together with section 366 of the Companies Act at an
exclusive
meeting of creditors and not at an inclusive general meeting;
18.3
That notice of the general meeting convened by the respondent
liquidators in this matter did not indicate that the meeting
had been
convened for the purpose of having the claims of the creditors
proven;
18.4
That any resolution or decision adopted at the general meeting in
respect of an item that was not specifically mentioned in
the notice
of the meeting as advertised was irregular;
18.5
That any authority, sanction or direction sought and obtained in
respect of an item or matter irregularly placed on the agenda
and
discussed was null and void;
18.6
That even if it was permissible to prove the creditors' claim at the
general meeting, the mere fact that no notice to that
effect was
given to the interested parties rendered its lodging unprocedural;
18.7
That since the meeting was not convened for the purpose of proving
claims, proof of the third respondent’s claim, and
its ultimate
acceptance by the first respondent, was accordingly invalid.
[19]
I turn now to the case of the third respondent. He opposed the
application for the review of the decision of the master on
the
grounds that the master had lawfully accepted and allowed his claim
as a creditor of the second respondent. It was his further
contention
that the general meeting at which his claim was proven was regularly
convened and that the matters that were discussed
at that meeting
were regularly placed on the agenda for deliberations. It will be
recall that that meeting was convened in terms
of section 386(1)(d)
of the Companies Act 61 of 1973.
[20]
Apart from the aforesaid grounds of resistance the third respondent
took a number of preliminary points against the applicant’s
review application. All in all there were seven preliminary points
taken by the third respondent. In dealing with those points,
I shall
not follow the third respondent’s sequence.
[21]
As regards the
first
preliminary points the third respondent
contended that the applicant was not entitled to bring this
application in terms of
section 151
of the
Insolvency Act, 24 of 1936
because, so contended the third respondent, the second respondent was
not liquidated on the grounds that it was unable to pay its
debts but
on the grounds that it was just and equitable to have the company
liquidated.
[22]
Section 386(1)(d) of the Companies Act, 61 of 1973 provides that a
liquidator in any winding up shall have, among others, power
to
summon any general meeting of the company or the creditors or
contributors of the company for the purpose of obtaining its or
their
authority or sanction with respect to any matter or for such other
purpose as he may consider necessary.
[23]
Although section 386(1)(d) grants powers to the liquidator as regards
a great variety of matters in respect of which she or
he may seek
authority or sanction of interested parties such as shareholders,
creditors or contributors, it does not, however,
carte blanche
empower him to withhold matters in respect of which she/he intends
seeking their authority or sanction or direction.
[24]
Section 41
of the
Insolvency Act, 24 of 1936
provides that:
“
The
trustee of an insolvent estate may at any time and shall, whenever he
is so required by the Master or by a creditor or creditors
representing one-fourth of the value of all claims proved against the
estate, convene in the manner prescribed by subsection (3)
of section
forty, a meeting of creditors (hereinafter called a general meeting
of creditors) for the purpose of giving him directions
concerning any
matter relating to the administration of the estate
and
shall state in such notice the matters to be dealt with at that
meeting
.”
(my own emphasis)
[25]
In the instant matter the general meeting of everybody was convened
in terms of section 386(1) of the Companies Act, 61 of
1973 and not
in terms of section 41,
Insolvency Act 24 of 1936
. In the insolvency
statute there is no provision akin to the aforesaid provision in the
company statute. In other words, in the
Insolvency Act there
is no
provision similar to section 386(1)(d) of the Companies Act. The
omission suggests that the legislature purposefully wanted
to draw a
distinction between insolvent companies on the one hand and insolvent
individuals on the other hand.
[26]
The case of the applicant was that the decision of the master was
improperly taken at an all-inclusive general meeting convened
in
terms of section 386(1)(d), Act No. 61/1973. At that meeting the
third respondent’s claim was proven, allowed and accepted.
The
applicant was aggrieved. The dissatisfaction of the applicant was
two-fold. Firstly, he asserted that proof of claims by creditors
of
the second respondent was not reflected on the agenda as one of the
matters to be discussed at the meeting. Secondly, he also
asserted
that proof of claims of creditors can only be properly considered at
an exclusive first meeting of creditors convened
in terms of section
364. Therefore, the applicant contended that he was aggrieved by the
decision of the master and that he was
accordingly entitled to
challenge that decision in terms of
section 151
of the
Insolvency
Act, 24 of 1936
.
[27]
It was common cause that the second respondent was liquidated on the
ground that it was just and equitable to have the business
enterprise
wounded up. At the time the liquidation proceedings were initiated it
was not averred that the second respondent was
unable to pay its
debts. The essence of the winding up proceedings was underpinned by
the averment that the business enterprise
was so bedevilled by
endless relational problems among its shareholders that it had become
very difficult, if not impossible, to
have its business operations
conducted in a commercially sound an healthy manner.
[28]
That was the position then. Now the position is apparently no longer
the same. The financial position of the second respondent
has somehow
deteriorated since then. At the time this review proceedings were
initiated the value of its liabilities exceeded that
of its assets.
The second respondent was re-evaluated two or so years ago. As on the
30
th
August 2012 the second respondent’s valuation
figure was R17950000,00 – vide anx “1”, the
consolidated
balance sheet of Kameelhoek (Edms) Bpk and Schaapplaats
978 (Edms) Bpk (APK). The contention of the applicant that the second
respondent’s
liabilities exceeded its assets at the time the
review application was argued was not seriously denied, if at all. To
ignore what
is on the strength of what once was does not appeal to my
sense of justice. One has to be realistic in adjudicating a dispute
of
this nature given the peculiar circumstances of the matter at
hand. Behind the current application there is a long history of
expensive
litigation and irreconcilable personality clashes which
have had an adverse financial impact on the second respondent’s
coffers.
In this unfolding drama of a costly series of litigation, a
stage has been reached where it can be said that, notwithstanding the
original basis on which the second respondent was then liquidated,
the second respondent has since also become unable to pay its
debts.
[29]
The subsequent inability of the second respondent to pay its debts
brought the second respondent within the ambit of section
339 of the
Companies Act, 61 of 1973. It reads as follows:
“
In
the winding-up of a company unable to pay its debts the provisions of
the law relating to insolvency shall, in so far as they
are
applicable, be applied
mutatis mutandis
in respect of any matter not specially provided for by this Act.”
In
turn the section created the connective platform between the two
statutes the one dealing with liquidation of insolvent companies
and
the other the sequestration of insolvent individuals. Where a company
facing winding up proceedings becomes unable to pay its
debts the
provisions of the law relating to insolvency should be applied –
section 339. The fact of the matter is that the
second respondent is
currently unable to pay its debts.
[30]
I am not persuaded that the third respondent’s objection that
the applicant was precluded from invoking the provisions
of section
151,
Insolvency Act, 24 of 1936
was well taken. The second
respondent’s financial position has, with the passage of time,
deteriorated to a point where it
is now unable to pay its debts.
Through
section 339
, Companies Act, 61 of 1973 the applicant was
entitled to invoke the remedy of section 151 of Act 24 of 1936
provided he had
locus standi in iudicio.
For the purpose of
dealing with the third respondent’s first point
in limine
I assumed that the applicant had
locus standi in iudicio,
a
point to which I shall return later.
[31]
The decision of the first respondent was the cause of the applicant’s
grief or complaint. An aggrieved person is anyone,
“…
who
has suffered a legal grievance, a man against whom a decision has
been pronounced which has wrongly deprived him of something,
or
wrongfully refused him something, or wrongfully affected his title to
something.”
I
may add, a man whose rights have been thereby violated. See
Insolvency Law
,
Meskin on p. 15-13 Henochsberg on
Company
Act
, 71 of 2008, Volume 2 on APP1-139;
De Hart NO v Klopper and Botha NNO
1969 (2) SA 91
(T) on 99 – 100,
Frances
George Hill Family Trust v The South African Reserve Bank
1992 (3) SA 91A
on 98 – 102;
Janse
van Rensburg v The Master
2004 (5)
SA 173
(T) 180C – 181B;
Geduld
v The Master and Others
2005 (4) SA
46
(C) at 464A – 465F.
[32]
It would appear from the financial position of the second respondent
as evidenced by the financial statements (anx “l”)
that
there would be a worthwhile surplus for its shareholders after the
liquidation and distribution processes. Therefore, as a
shareholder,
the applicant certainly has an interest in the liquidation and
distribution processes concerning the second respondent.
I am
therefore persuaded that the applicant accordingly has a sufficient
legal interest to approach this court in terms of section
151 to
ensure that the estate of the company is properly and regularly
administered. See
Jacobs v Hessels
1984 (3) SA 601
(T)
at 604G;
Mookrey v Smith NO & Another
1987 (1) SA
332
(C) at 335E;
Mookrey v Smith NO & Another
1989
(2) SA 707
(C) at 708I.
[33]
By virtue of such legal interest the applicant was, in my view,
entitled to approach the court in terms of section
151, Act 24
of
1936 because, as I have already found, the first respondent in
collaboration with the sixth respondent had, in contravention
of
section 364, section
386, Act 61
of 1973, administered the estate of
the second respondent in an irregular manner. The actions of those
two respondents at least
culminated in the taking of an incompetent
decision with very adverse impact on the legitimate interests of the
second respondent,
its shareholders, and the majority of its
creditors and the applicant himself. I would therefore dismiss the
third respondent’s
first point raised
in limine
.
[34]
In the
second
place, the third respondent’s preliminary
point was that the applicant did not have
locus standi
to
bring this application. The objection is based on the allegation that
the applicant was not a shareholder in the company, in
other words,
the second respondent. The applicant on the contrary asserted that he
was a shareholder of the second respondent.
[35]
A share register of the company indicated that the applicant was a
shareholder. The issued share certificates indicated that
the
applicant and his brother André Knipe were the majority
shareholders of the second respondent – see anx “a1
–
c8” which are to be found on pages 416 – 443 of the
record. The averments of the applicant to the effect that
he is a
shareholder of the second respondent were also materially supported
by the third respondent himself. On his own version
the applicant is
a 20% shareholder in the company.
[36]
See the share certificate read together with paragraph 3.4.2 and
3.4.7 of the answering affidavit which appears on pages 238
and 241
respectively. Therefore, according to the third respondent’s
own papers, the applicant was a 20% shareholder of the
second
respondent.
[37]
In terms of
section 1
of the
Companies Act 71 of 2008
a shareholder
is defined as follows:
“…
subject
to
section 57(1)
means the holder of a share issued by a company and
who is entered as such in the certificated or uncertificated security
register,
as the case may be.”
Section
50(4)
of the
Companies Act, 71 of 2008
provides that:
“
A
securities register, or an uncertificated securities register
maintained in accordance with this Act is sufficient proof of the
facts recorded in it, in the absence of evidence to the contrary.”
See
Henochsberg on the
Companies Act
,
71 of 2008, Vol 1, p 205 – 207;
Marine
& Trade Insurance Co Ltd v Van der Schyff
1972
(1) SA 26 (A) at 37 – 38. The contention of the third
respondent was, therefore, clearly inconsistent with the third
respondents own papers. The share registers and the share
certificates on which the third respondent relied are clearly at
variance
with his own contention. The third respondent’s
further contention that the applicant has since ceded his shares to
the third
respondent is also in conflict with the written agreement
on which the third respondent relied. (Vide anx “d” and
anx
“e” p 453 - p 458 of the record.)
[38]
In the light of the aforegoing I am persuaded that the applicant was
indeed a shareholder of the second respondent and accordingly
had a
locus standi
. I would, therefore, dismiss the third
respondent’s second point
in limine
.
[39]
In the
third
place the third respondent preliminary point was
that the general meeting at which the decision complained of was
taken, had not
yet been closed seeing that the interrogation process
in terms of
section 417
and
418
of the
Companies Act 71 of 2008
was
still pending.
[40]
The contention of the applicant was that it was clear from the
minutes of the proceedings of that meeting that the decision
taken
was not provisionally made subject to the continuation, at some point
in the future, of the general meeting of 16 April 2014
which was
convened in terms of
section 386(1)(d).
The fact of the matter is
that the business that was transacted at that meeting was
unconditionally concluded. A meeting was not
postponed for any
further deliberations. The claim of the third respondent was not
allowed and accepted subject to the interrogation
of the third
respondent in terms of
sections 417
and
418
as the third respondent
contended. The decision of the master as regards the third
respondent’s claim, was therefore an accomplished
fact.
Accordingly such decision immediately became reviewable in terms of
section 151
of the
Insolvency Act, 24 of 1936
;
Insolvency Law
Meskin p 15-12(2) Henochsberg on
Companies Act
>, 71 of 2008,
Vol 2, p APP1-139 and
Insolvency Law
Meskin p 9-12.
[41]
In the
fourth
place the third respondent raised the
preliminary objection that the applicant’s application was
pre-mature seeing that the
applicant did not follow the procedure as
laid down in terms of
section 45
,
Insolvency Act, 24 of 1936
. The
applicant attacked this objection. At paragraph 3.6 of the answering
affidavit the third respondent alleged that:
“
3.6.1
Voorts maak Artikel 45 voorsiening dat die Likwidateurs die bewese
eise moet ondersoek en ingevolge Artikel 45[3] ‘n
verslag aan
die Meester moet voorlê as dit verkeerd of ongerymd sou wees –
die Applikant het alreeds 12 maande kans
gehad om hierdie remedie uit
te put en aan die Likwidadeurs bewyse en gronde kon verskaf het
waarom my eise nie toegelaat moes
gewees het nie en het versuim om
dit te doen. Sien bladsy 35 en 39 van die stukke.
3.6.2
Enige aansprake wat die Applikant en die Knipe-kinders op die aandele
mag hê is derhalwe prematuur en beskik hulle oor
geen regte of
magte om daarmee te handel nie. Dit spree kook dus van self dat die
Applikant oor geen regte of magte beskik het
om my eise voor die
Meester aan te val nie.”
[42]
Section 45
empowers a liquidator to investigate a creditor’s
claim which has been proved and allowed at a meeting of creditors.
The
section contemplates a lawful and legitimate claim which has been
allowed and accepted in terms of the provisions of the law of
insolvency during a proper meeting of creditors. The section does not
apply to irregular claims proven, allowed and accepted at
a general
meeting of all interested parties in contravention of the provisions
of the applicable legislation.
[43]
A decision of the chair of a meeting of creditors whereby a claim is
allowed and accepted cannot be amended or attacked at
a subsequent
meeting of creditors. Such a claim can merely be investigated
further. It follows, therefore, that the claim of the
third
respondent unprocedurally allowed and accepted by the first
respondent at an irregular meeting will not be re-visited at
a
subsequent regular meeting of creditors as the third respondent
suggested. This is precisely where the prejudice to the body
of the
creditors lies. To the extent that the first respondent, contrary to
the provisions of the applicable legislation, accepted
and allowed
the claim of the creditor at the general meeting such a decision
cannot in terms of
section 45
be reconsidered afresh. Only the merits
of such a claim can be investigated and challenged by the liquidators
only. See
Insolvency Law
Meskin p 9 – 12. In the instant
matter, at least, one of the liquidators has apparently displayed
undue preference to one
of the creditors whose character and
integrity has become questionable following the forced removal by the
court of his name from
the roll of partitioning attorneys.
[44]
It followed, therefore, that the rights of the creditors unlawfully
circumvented by the first respondent who pre-maturely allowed
and
accepted proof of the third respondent’s claim at the wrong
meeting and at the wrong stage of the liquidation process,
were
undermined.
[45]
Section 44
of the
Insolvency Act, 24 of 1936
makes provision for
proof of a claim by a creditor in terms of subsection 3 thereof. Such
a claim can be proven against the estate
at the meeting of creditors.
It has to be proven to the satisfaction of the chair of that
exclusive meeting who has the power either
to accept or to reject the
claim. In the circumstances I am persuaded that the first respondent
acted irregularly and contravened
the provisions of the company
legislation read with the provisions of the insolvency legislation by
allowing the third respondent’s
claim to be proven and by
eventually accepting the third respondent’s claim contrary to
the provisions of
section 44
and contrary to the other provisions of
the company legislation.
[46]
It is my finding that
section 45
,
Insolvency Act 24 of 1936
did not
apply. Accordingly no obligation rested on the applicant to follow
the provisions of that Act before he applied to this
court in terms
of section 155,
Insolvency Act, 24 of 1936
. I am therefore inclined
to dismiss the third respondent’s fourth point
in limine
.
[47]
In the
fifth
place the preliminary point raised by the third
respondent was that the applicant had failed to bring this review
application within
the reasonable time. The essence of the objection
is that the applicant had waited for 12 months after the third
respondent had
proven his claim before he applied to this court for
the review of the first respondent’s decision. The applicant
attacked
this objection as well. Mr Pienaar, counsel for the
applicant, put it as follows in applicant’s heads of argument:
“
12.2
Wat die Derde Respondent egter nie aan die Agbare Hof openbaar nie is
die feit dat die eis reeds deur die Eerste Respondent
aanvaar en
bewys is voor die verlening van die finale likwidasiebevel, welke
opsigself strydig is met Artikel 364 van die Maatskappyewet,
1973,
welke bepaal dat die eerste vergadering van skuldeiser, met onder
andere die doel om ‘n eis te bewys, eers na die finale
likwidasie belê kan word.”
[48]
The following undisputed facts have to be repeated. Firstly, the
applicant applied to the Supreme Court of Appeal for leave
to appeal
against the final liquidation order. This application was dismissed
on 5
th
February 2014. Secondly, on 5
th
March
2014, to be precise, merely thirty days later, the applicant caused
this review application to be issued.
[49]
It stands to reason that before the SCA had entertained and disposed
of the applicant’s application for leave to appeal
the
applicant would have initiated these review proceedings on his own
peril. In those circumstances there was always a possibility
that the
final liquidation order could be discharge on appeal. Had the
applicants been successful with his application for leave
to appeal
and ultimately also on appeal, the review application would not have
been necessary at all. I am not persuaded that the
applicant was
guilty of any unreasonable delay in this matter. I am satisfied that
the current application was instituted within
a reasonable time when
the circumstances reasonably dictated that it be instituted. In my
view there was hardly any delay to be
condoned.
[50]
In the light of all this, I am persuaded that the third respondent’s
fifth preliminary objection cannot be sustained.
I am inclined to
dismissed it as well.
[51]
In the
sixth
place the third respondent preliminary point was
that there existed a foreseeable factual dispute which made it
undesirable for
the applicant to have brought this matter to court by
way of motion proceedings. There may well have been peripheral
disputes in
this matter. However, there existed no real factual
dispute as regards the question whether the claim of the third
respondent was
properly proven, in accordance with the provisions of
the applicable legislation. The facts and the circumstances in which
the
claim was proven the meeting at which it was proven the section
which was used for the purpose as well as the section that were
circumvented are all material facts that are not in dispute.
Accordingly I am not persuaded that there was any factual dispute
on
the material cornerstones of the applicant’s claim as well as
the avenue through which these review proceedings were instituted.
[52]
In the circumstances I am also inclined to dismiss this objection of
the third respondent. There was no substance in the point
so taken.
[53]
In the
seventh
place the preliminary point raised by the third
respondent was that there was a conflict of interest. The objection
had virtually
no substance. I deem it unnecessary to deal with it at
all. I would, therefore, dismiss it as well.
[54]
Seeing that none of the preliminary points was well taken, the review
application ought to succeed. I am satisfied that a proper
case has
been made out for the relief sought. In the facts, the applicant is
entitled to such relief. In view of this conclusion
coupled with the
nature of relief sought, it becomes unnecessary to deal with the
dispute concerning the substantive merits or
demerits of the third
respondent’s claim against the estate of the second respondent
(in liquidation). Such dispute is irrelevant
to the question as to
whether the claim of the third respondent was valid, procedurally
proven and procedurally allowed and accepted
in accordance with the
provisions applicable to companies legislature read with those of the
insolvency legislation.
[55]
I have so far dealt with case 956/2014 only. As regards case 957/2014
concerning Kameelhoek (Edms) Bpk, cited there as the
second
respondent I deem it unnecessary to deal with it separately. The
facts, issues and submissions were pretty much the same.
Accordingly,
my reasoning, the findings, the conclusions and the outcome have to
be same there as here. The two matters were argued
together as one.
Everything said and done in connection with case 956/2014 applies to
case 957/2014 with equal force. Accordingly
the conclusion is also
the same. The findings and the reasoning in case 956/2014 applies
equally well to case 957/2014. In fact
the two applications were
argued together as one.
[56]
The applicant has been successful. Because he has, he is entitled to
the fruits of his success. There is no reason why he should
be
deprived of the fruits of his success in both matters. Therefore, the
costs will follow success. The general rule of costs applies.
[57]
Accordingly I make the following order:
57.1
The decision of the first respondent, whereby the third respondent’s
claim against the estate of the second respondent,
Schaapplaats 978
(Edms) Bpk (in liquidation) was allowed and accepted at a general
meeting on the 16
th
April 2013 which meeting was convened
in terms of section 386(1)(d) of the Companies Act, 61 of 1973 has
been reviewed in terms
of
section 151
of the
Insolvency Act, 24 of
1936
and it is hereby set aside as null and void;
57.2
The costs relating to this review application shall be costs in the
liquidation of the second respondent and accordingly such
costs will
be borne and paid by the second respondent as represented by the
fourth, fifth and sixth respondents out of the liquidated
estate of
the second respondent.
57.3
This order applies to case number 957/2014 as well.
___________________
M.
H. RAMPAI, AJP
On
behalf of applicant: Adv. C. D. Pienaar
Instructed
by:
Blair
Attorneys
BLOEMFONTEIN
On
behalf of third respondent: Adv. P. Zietsman SC
Instructed
by:
De
Lange Du Plessis
BLOEMFONTEIN