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[2013] ZAGPPHC 520
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Vincemus Investments (Pty) Ltd v Louhen Carriers CC and Another (16550/13) [2013] ZAGPPHC 520 (7 May 2013)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
Date: 7 May 2013
Case Number:
16550/13
In the matter
between:
VINCEMUS
INVESTMENTS (PTY)
LTD
......................................................................................
Applicant
and
LOUHEN
CARRIERS CC
(In
Business
Rescue)
................................................................................................................
First
Respondent
COMPANIES
and INTELLECTUAL
PROPERTY
COMMISSION
.............................................................................................
Second
Respondent
JUDGMENT
AB ROSSOUWAJ
[1] The matter came
before me on 25 March 2013 by way of urgency. There was no proper
notice of the application given to all affected
parties as envisaged
in s 130 (3) (b) of the Act, in view of which I indicated that I was
going to postpone the matter and order
the applicant to pay the
wasted costs. I requested the parties to prepare a draft order that
would make provision for proper notice
to all affected parties
including the costs order that I intended to make. The parties
prepared a draft order, which I made an
order of court on 27 March
2013. What follows, are my reasons for the order.
[2] This is an
urgent application for, inter alia, the following relief as per the
applicant’s notice of motion:
‘
1.2
That the Resolution adopted by the First Respondent in terms of
Section 129
(1) of the
Companies Act, 71 of 2008
, be and is hereby
set aside.
1.3 That the First
Respondent, in terms of
Section 130
(5) (c) (i) of the
Companies Act,
71 of 2008
is herewith placed under liquidation.
1.4 That the costs
of this application are costs in the liquidation.’
[3] The application
is silent as to the statutory provisions upon which the applicant
relies for approaching the court for the relief
sought in terms of
prayer 1.2. The relief sought in terms of prayer 1.3 is obviously
dependent upon the granting of an order in
terms of prayer 1.2.
[4] The relevant
facts relating to the relief sought in terms of prayer 1.2 are the
following:
[5] On 23 April 2012
the first respondent (a close corporation) (‘the respondent)
adopted a resolution in terms of s 129 (1)
of the Companies Act 71 of
2008 (‘the Act) to commence business rescue proceedings.
[6] On 13 July 2012
the respondent filed the following documents with the Companies and
Intellectual Property Commission (‘the
Commission’) (the
second respondent): Form CoR 123.1 (Notice of Beginning of Business
Rescue Proceedings), the respondent’s
s 129 (1) resolution to
commence business rescue proceedings dated 23 April 2012 and the
respondent’s s 129 (3) (a) sworn
statement dated 2 May 2012.
[7] In completing
Form CoR 123.1, the respondent indicated that it adopted the
resolution in terms of s 129 (1) on 23 April 2012
and that the
respondents business rescue proceedings commenced on 29 June 2012
‘being the date on which the notice was filed
with the
Commission’. As per the Commission’s official date stamp
the aforesaid documents were only delivered to it
on 13 July 2012.
[8] Mr Heysteck sent
all the aforesaid documents per e-mail to the applicant’s
attorneys on 17 July 2012. This is borne out
by the applicants
attorneys’ letter addressed to Mr Heysteck dated 23 July 2012
and more in particular numbered paragraphs
4 and 8.5 thereof read
with paragraph 5 of the respondents answering affidavit.
[9] On 17 July 2012
the Commission issued a Registration Certificate (Form CoR 126.2) in
terms of which Mr Heysteck has been licenced
in terms of s 138 to
serve as a business rescue practitioner.
[10] On 18 July 2012
the respondent appointed Mr Heysteck as business rescue practitioner
and on 19 July 2012 it filed Form CoR
123.2 (Notice of Appointment of
Business Rescue Practitioner) with the Commission. On this form the
respondent indicated the date
of commencement of the business rescue
proceedings as 13 July 2012. The applicant’s attorneys received
form CoR 123.2 on
23 July 2012.
[11 ] The applicant
seeks the relief in terms of prayer 1.2 on the basis that the
respondent has not complied with the provisions
of s 129 (3) (a) and
(b) in that the respondent published the notice in terms of s 129 (3)
(a) on 17 July 2012, some three months
after the adoption of the s
129 (1) resolution and that the business rescue practitioner was not
appointed within 5 days thereafter.
In the result, so the applicant
submitted, the resolution has lapsed and is a nullity by virtue of
the provisions of s 129 (5)
(a).
[12] The relevant
subsections of s 129 read as follows:
‘
(1)
Subject to subsection 2 (a), the board of a company may resolve that
the company voluntarily begin business rescue proceedings
and place
the company under supervision, if the board has reasonable grounds to
believe that -
(a) the company is
financially distressed; and
(b) there appears to
be a reasonable prospect of rescuing the company.
(2) A resolution
contemplated in subsection (1) -
(a) may not be
adopted if liquidation proceedings have been initiated by or against
the company; and
(b) has no force or
effect until it has been filed.
(3) Within five
business days after a company has adopted and filed a resolution, as
contemplated in subsection (1), or such longer
time as the
Commission, on application by the company, may allow, the company
must -
(a) publish a notice
of the resolution and its effective date, in the prescribed mannerto
every affected person, including with
the notice a sworn statement of
the facts relevant to the grounds on which the board resolution was
founded; and
(b) appoint a
business rescue practitioner who satisfies the requirements of
section 138, and who has consented in writing to accept
the
appointment.
(4) After appointing
a practitioner as requested by subsection (3) (b), a company must -
(a) file a notice of
the appointment of a practitioner within two business days after
making the appointment; and
(b) publish a copy
of the notice of appointment to each affected person within five
business days after the notice was filed.
(5) If a company
fails to comply with any provision of subsection (3) or (4) -
(a) it's resolution
to begin business rescue proceedings and place the company under
supervision lapses and is a nullity;
[13]
Strict time limits are imposed for the publication of a notice of the
resolution to place a company under business rescue and
for the
appointment of a business rescue practitioner. This is done to avoid
unnecessary delay and the abuse of the procedure.
From the wording of
s 129 (5) read with the provisions of s 6 relating to form and
delivery, it is clear that if a company fails
to adhere to the
prescribed
time
limits
contained
in s 129 (3) or (4) its resolution lapses and consequently becomes a
nullity automatically. In order to establish whether
a company has
complied with the prescribed requirements relating to form and
delivery within the prescribed time limits, one must
have regard to
the relevant provisions contained in s 6 of the Act and the
applicable provisions contained in the Companies Regulations,
1911.
(See
Advanced
Technologies and Engineering Company (Pty) Ltd (in business rescue) v
Aeronaufique Et Technologies and others,
unreported,
North Gauteng High Court, case no 72522/11;
Madodza
(Pty) Ltd (In business rescue) v Absa Bank Ltd and others,
unreported,
North Gauteng High Court, case no 28906/12 and
Credit
Suisse Group AG and others in re Van Steen NO and another,
unreported,
case no 3624/2013).
[14]The relevant
subsections of s 130 read as follows:
‘
(1)
Subject to subsection (2), at anytime after the adoption of a
resolution in terms of section 129, until the adoption of a business
rescue plan in terms of section 152, an affected person may apply to
a court for an order -
(a)
setting aside the resolution, on the grounds that -
(i) there is no
reasonable basis for believing that the company is financially
distressed;
(ii) there is no
reasonable prospect for rescuing the company; or
(iii) the company
has failed to satisfy the procedural requirements set out in section
129;
(
2
)...
(3) An applicant in
terms of subsection (1) must -
(a) serve a copy of
the application on the company and the Commission; and
(b) notify each
affected person of the application in the prescribed manner.
(4) Each affected
person has a right to participate in the hearing of an application in
terms of this section.’
[15]
In
Henochsberg on
the
Companies Act 71 of 2008
vol
1 p 458 the following is stated by the authors:
‘
It
is difficult to align the apparent automatic lapsing of a business
rescue resolution under the provisions of
s 129
(5) with [s 130 (1)
(a) (iii)]. In terms of
s 129
(5) it would appear that no Court
application, or indeed any action at all, is required for the
business rescue resolution to lapse
and become a nullity where the
procedural requirements of
s 129
have not been met. Under 130 (1) (a)
(iii) an affected person may approach the court for an order setting
aside the business rescue
resolution on the grounds that the company
has failed to satisfy the procedural requirements set out in
s 129.
The approach under
s 130
(1) seems a far more sensible approach in
providing clarity regarding the status of the business rescue than
the situation catered
for under
s 129(5).
’
[16]
As I see it, the provisions of
s 130
(1) (a) (iii) are complementary
to the provisions of
s 129
(5). If there is no dispute amongst the
affected persons regarding the question as to whether a company has
complied with the provisions
of
s 129
, then
cadit
quaestio.
If
such a dispute does arise, then the only remedy available to an
affected person is to approach the court in terms of
s 130
(1) (a)
(iii), which remedy must be exercised before the adoption of a
business rescue plan, after which the remedy is no longer
available.
[17]
Although
s 130
(1) (a) (iii) makes provision for the ‘setting
aside’ of the resolution, a resolution that has lapsed and,
consequently,
has become a nullity ex
lege,
cannot,
technically speaking, be set aside. Therefore, in my view,
s 130
(1)
(a) (iii) should be interpreted to mean that an affected person may
apply to a court for a
declaratory
order
that
the resolution has lapsed and has become a nullity on the ground that
the company has failed to satisfy the procedural requirements
set out
in
s 129.
[18] With regard to
the computation of business days between the happening of one event
and another mentioned in
s 129
, the period is calculated excluding
the first day on which the first event occurs including the last day
on or by which the second
event is to occur, excluding any public
holiday, Saturday or Sunday that falls on or between the events. (See
s 5 (3) of the Act).
[19]
The respondent adopted the said resolution on 23 April 2012 and
delivered the said notice in accordance with form CoR 123.1
together
with a copy of the resolution to the Commission on 13 July 2012. In
my view, the latter date is the effective date and
not the date upon
which the resolution was adopted. This much is clear from the
provisions of s 129 (2) (b). This means that the
last day on which
the first respondent had to publish the documents mentioned in s 129
(3) (a) and to appoint a business rescue
practitioner was 20 July
2012. As already stated, the applicant’s attorneys received
form CoR 123.1 together with a copy
of the resolution and the
respondent’s s 129 (3) (a) sworn statement on 17 July 2012 and
the business rescue practitioner
was appointed on 18 July 2012.
[20] The last day
upon which the notice to appoint a practitioner (Form CoR 123.2) had
to be filed was 20 July 2012. The latter
notice was filed on 19 July
2012, which means that the last day on which a copy of the notice had
to be published was 26 July 2012.
On 23 July 2012 the applicant’s
attorneys received a letter from the business rescue practitioner to
which form CoR 123.2
was attached.
[21 ] In the result,
it appears as if there was compliance with section 129 (3) (a) and
(b) and 129 (4) of the Act, at least insofar
as the applicant is
concerned.
[22] Be that as it
may, this court can only adjudicate an application for the setting
aside of a resolution on any of the grounds
contained in section 130
(1) (a), if each affected person has been notified of the application
by the applicant in the prescribed
manner as provided in section 130
(3) (b) of the Act. Strict observance of this requirement is
necessary in view of an affected
person’s right to participate
in the hearing of an application in terms of 130 (4) (b) of the Act.
[23] A copy of the
application was served on the respondent and the Commission as
provided in s 130 (3) (a) of the Act. However,
from page 34 of the
paginated papers it appears as if there were at least 10 affected
persons (creditors) who were not notified
of the application in the
prescribed manner as provided in s 130 (3) (b). (The prescribed
manner is regulated by r 124 in terms
whereof an applicant is
required to deliver a copy of the application to each affected person
in accordance with r 7. In terms
of r 7 delivery may take place in
any manner contemplated in s 6 (10) or (11) or in the manner set out
in Annexure 3, Table CR
3 of the Companies Regulations, 1911).
Although the first respondent did not make an issue of this in his
answering affidavit or
during argument, I am of the view that the
court is duty bound to ensure that the provisions of s130 (3) have
been complied with.
[24] Because of the
applicant’s failure to comply with the provisions of s 130 (3)
(b) a postponement is inevitable and I
think that it would only be
fair if the applicant is ordered to pay the wasted costs occasioned
by the postponement.
[25] (I communicated
my concerns and intention to the parties during argument and
requested them to prepare a draft order that would
make provision for
proper notice to all affected parties including the costs order that
I intended to make, which they presented
to me in chambers on 27
March 2013).
[26] In the result,
I make the following order:
The draft order,
marked ‘X’, is made an order of court.
A B ROSSOUW AJ
DATE: 7 May 2013