About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2013
>>
[2013] ZAFSHC 234
|
|
Blignaut v Stalcor (Pty) Ltd and Others (3249/2013) [2013] ZAFSHC 234; 2014 (6) SA 398 (FB) (14 November 2013)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No.: 3249/2013
In
the matter between:
JAN
JOHANNES BLIGNAUT
…...................................................................................
Applicant
and
STALCOR
(PTY) LTD
…......................................................................................
First
Respondent
TIRADEPROPS
1140 CC t/a
TK
MANUFACTURERS
….............................................................................
Second
Respondent
JACOBUS
ELISA KRITZINGER N.O.
….......................................................
Third
Respondent
SHERIFF
OF THE FREE STATE HIGH
COURT:
BLOEMFONTEIN-WEST
….........................................................
Fourth
Respondent
ABSA
BANK, BRANDWAG BRANCH
….........................................................
Fifth
Respondent
CORAM:
L. Le R. POHL, AJ
HEARD
ON:
07 November 2013
DELIVERED
ON:
14 November 2013
[1]
The applicant in this matter brought an urgent application to stay
the sale in execution of immovable property, constituting
his
personal residence, which property was put up as security for an
indebtedness incurred in his name jointly and severally with
that of
the second respondent and in favour of first respondent.
[2]
The second respondent has placed itself in business rescue and
accordingly first respondent pursues the applicant
qua
surety and based on its joint and several liability,
singuli
in solidum
in lieu of a consent
agreement, which was made an Order of Court. The applicant is
also the sole member of the second respondent.
[3]
Paragraph 4.1 of the original Notice of Motion reads as follows:
“
4.1
That the order of this Honourable Court dated 11 April 2013 in terms
where of the immovable property was declared specially
executable be
suspended pending finalisation of the business rescue process of the
second respondent.”
[4]
On 14 August 2013 and by agreement between the parties this court
made the following order:
“
It
is ordered that the application be postponed
sine
die
1.
The sale of the immovable property been Erf
1[…] Bloemfontein, extension 1[…], district
Bloemfontein and with physical
address at 1[…] R[…]
K[…] Street, U[…], Bloemfontein be stayed pending the
finalisation of the application.
2.
The application be heard as an opposed
motion in the normal course, and the time limits applicable to the
filing of answering and
replying affidavits will apply.
3.
The costs of today be costs in the
application to be determined at the argument hereof.”
[5]
The first respondent filed an opposing affidavit, but outside the
time limits applicable to the filing of answering affidavits
as
envisaged by the Uniform Rules of Court. When the matter came
before me on 7 November 2013 as an opposed motion, Mr Roux,
who
appeared for the first respondent, initially moved for condonation
for the late filing of the opposing affidavit. Mr
Zietsman, who
appeared for the applicant, then indicated that if the court is
inclined to entertain the condonation application
and/or grant the
condonation, he would then move for a postponement to enable the
applicant to file a replying affidavit to the
first respondent’s
opposing affidavit. Mr Roux then indicated that in such a case
he has instructions to withdraw the
application for condonation for
the late filing of the opposing affidavit and that the court should
adjudicate the application
purely on the applicant’s papers.
The matter was then argued on that basis before me and I will
accordingly deal with
this matter and give judgment on the
applicant’s papers alone.
[6]
It is common cause that the second respondent owes the first
respondent the amount of R2 666 482 plus interest and costs.
[7]
As part of on-going negotiations to secure payment a consent
agreement with effective date 28 September 2012, was agreed, which
agreement was then made an order of court without opposition.
The parties to this agreement were the present first respondent,
the
applicant and the second respondent. As such, it is common
cause that the applicant (jointly and severally) with second
respondent and as surety, owes the first respondent an amount of
R2 666 482, plus interest and costs.
[8]
It is common cause that the applicant did not comply with the
consensual agreement which was made an order of court and made
no
payments to the first respondent in this regard.
[9]
On 22 February 2013 the business rescue procedure in terms of the
Companies Act, Act 71 of 2008, in terms of which the second
respondent would be placed under business rescue, was initiated.
A business rescue practitioner was appointed and at least
two
meetings were held with the creditors as envisaged by the business
rescue procedure in terms of the Companies Act, Act 71of
2008.
It is thus common cause that the second respondent is presently under
business rescue.
[10]
In the meantime the applicant’s aforementioned immovable
property was attached and declared specially executable.
It was
due to be sold on 14 August 2013, when the abovementioned urgent
application, referred to in paragraph 1,
supra
,
was launched.
[11]
At one of the meetings held in terms of the business rescue
procedure, it was resolved by the majority of creditors with voting
interests, that they would each forfeit 75% of their claims against
the second respondent and that the remaining 25% of their claims
would be paid back to them on a monthly basis. The first
respondent’s claim in the amount of R2 666 482 was
specifically noted at this meeting and was also included in the
repayment plan annexed to the applicant’s papers. The
net
result of this was that the first respondent forfeited the amount of
R1 199 862,00, being 75% of its claim and that
the
remaining R666 621,00, to wit 25% of its claim would be
paid back to it in monthly instalments of R30 998,58.
[12]
It was submitted on behalf of the applicant that since more than 75%
of the holders of voting interest in the second respondent,
voted in
favour of accepting the business rescue plan, the business rescue
plan was therefore binding on the first and second respondent.
(Compare section 152(4) of the Companies Act, Act 71 of 2008.)
[13]
The submission went further in that it was submitted on behalf of the
applicant that the acceptance of the business plan amounted
to a
statutory compromise which was available as a defence
in
rem
to the applicant as either surety
or co-principal debtor. The basis for this argument is to be
found in the wording of section
154 of the Companies Act, Act 71 of
2008, which reads as follows:
“
154
Discharge of debts and claims-
(1)
A business rescue plan
may
provide that, if it is implemented in accordance with its terms and
conditions, a creditor who has acceded to the discharge of
the whole
or part of the debt owing to that creditor will lose the right to
enforce the relevant debt or part of it.
(2)
If a business rescue plan has been approved
and implemented
in accordance with this chapter, a creditor is not entitled to
enforce any debt owed by the company immediately before the beginning
of the business rescue process, except to the extent provided for in
the business rescue plan.”(my emphasis)
In
the authoritative work,
Henochsberg on
the
Companies Act, 71 of 2008
,
Vol
1, p 531, the learned author states that the effect of
Section
154
on a surety
could be
(my
emphasis), that the creditor will not be able to claim against
the surety due to the fact that the principal debt has
been
discharged. No authority is however quoted for this contention
and no reference is made by the author to the applicability
or not of
defences in rem and/or defences
in
personam
. I find this contention
speculative at best.
[14]
Mr Zietsman then referred the court to the decision of
Standard
Bank of SA Ltd v SA Fire Equipment (Pty) Ltd and Another
1984 (2) SA 693
(CPD) at page 696C – F:
“
The
contrast between defences
in
rem
and
in
personam
thus is that those
in
rem
attach
to the claim or cause of action or the obligation itself and arise
from the invalidity, extinction or discharge of the obligation
itself, whoever the debtor may be; those
in
personam
arise from a personal immunity of the debtor from liability for
an otherwise valid and existing civil or natural obligation.
In the
case of a defence
in
personam
the obligation and debt remain in existence - the creditor may prove
his claim in the insolvency or liquidation, the creditor may
await
the end of the moratorium, the minor's obligation remains a natural
obligation, but in each case the debtor is personally
immune
from a claim. In the case of a defence
in
rem
the
law does not recognise the obligation or debt even as a natural
obligation (illegality) or no obligation in fact came into
existence
or it was vitiated on a ground justifying its termination (mistake,
misrepresentation, duress) or the obligation
has ceased because
it has been discharged or otherwise extinguished (payment,
compromise, novation, judgment). It is in this sense
that the
defences
in
rem
are
said to adhere to or arise upon the obligation itself, regardless of
the person of the debtor.”
[15]
The pertinent question therefore to be decided by this Court is
whether or not this business rescue amounts to a “
statutory
compromise” (my emphasis) within this context and would thus
amount to a defence
in rem
within the context eluded to
above. If so, then it would be a defence which would be
available to the applicant as surety
or co-principal debtor
singuli
in solidum
. If the business rescue is however, a defence
in
personam
which attaches to the second respondent alone, it would
not be a defence available to the applicant with the result that the
application
must fail.
[16]
Mr Roux, who appeared for the first respondent, submitted that a
compromise in this sense is not a defence
in
rem
. He submitted that it is a
defence purely
in personam
in respect of the second respondent. He referred the court to
the authorative work of Forsyth and Pretorius,
Caney’s
The Law of Suretyship in SA
, 6
th
Edition at page 188:
“
(a)
Defences personal to the debtor do not avail the surety.
Defences available to the principal debtor are available to the
surety. The principal is limited, however, to those
defences
which go to the root of the debt, and not to such defences as are
personal to the debtor, i.e. those defences which are
personal
privilege granted to the debtor. This is often expressed in the
decided cases by saying that the surety can avail
himself of the
debtor’s
in rem
defences but not
in personam
defences….. Thus
in personam
defences include the insolvency or liquidation of the principal
debtor,
statutory composition
with creditors, exemption from execution, or legal moratorium.”
(my emphasis)
[17]
Mr Roux furthermore submitted that the moratorium created by the
business rescue plan is purely there to protect the company
(in this
case the second respondent). He furthermore submitted that it
is exactly for this reason that the creditors insist
inter alia on
personal suretyships to protect themselves in event of a corporate
entity going into either liquidation and more
recently into business
rescue.
[18]
Mr Roux also referred the court to the definition of business rescue
as contained in
section 128
of the
Companies Act, Act
71 of 2008.
He submitted that it is clear from this definition of business rescue
that it amounts to a temporary supervision
of the company and of the
management of its affairs, thrown out to the company as a lifeline to
resuscitate it as it were.
He thus furthermore submitted that
from this it is furthermore evident that it is a defence
in
personam
which attaches to the relevant
company under business rescue and the company alone. It does
not bring an end to the obligation.
I agree with these submissions.
[19]
In interpreting
section 154
of the
Companies Act, I
am mindful of the
trite legal principle that I should endeavour to establish the true
intention of the legislature and that in
doing so, the interpretation
should be restrictive.
[20]
I therefore conclude that the purpose of the whole business rescue
scheme is to,
inter alia
,
enable a company in financial distress to get back on its “financial
feet”, as it were. It is thus a temporary
measure by the
very nature of it, which can only be achieved if it is afforded to
the company and the company alone. It
could not have been
the intention of the legislature with the enactment of
Section 154
of
Act 71 of 2008, to include sureties and co-principal debtors as
beneficiaries within the scheme of business rescue provided
for in
the
Companies Act, Act
71 of 2008. It therefore does not
include any sureties and/or co-principal debtors’
singuli
in solidum
like the applicant within
the context of the factual matrix of this case.
[21] In the
premises, I make the following orders:
21.1
the application is dismissed with costs; and
21.2
the costs will include the costs occasioned by the appearance of 14
August 2013.
L.
le R. POHL, AJ
On
behalf of applicant: Adv P. J. J. Zietsman
Instructed by:
Van
Deventer Thoabala Inc.
BLOEMFONTEIN
On
behalf of first respondent: Adv C. D. Roux
Instructed by:
L & V Attorneys
BLOEMFONTEIN