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[2013] ZAFSHC 186
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Tshepega Civil Engineering (Pty) Ltd v MEC: Free State Provincial Department of Police, Roads And Transport and Others (4395/2013) [2013] ZAFSHC 186 (13 December 2013)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No.: 4395/2013
In the matter between:
TSHEPEGA CIVIL ENGINEERING (PTY)
LTD
.......................................
Applicant
and
THE MEC: FREE STATE PROVINCIAL
DEPART-
MENT OF POLICE, ROADS AND
TRANSPORT
..........................
First
Respondent
THEODRE WILHELM VAN DEN HEEVER
NO
.......................
Second
Respondent
KGASHANE CHRISTOPHER MONYELA
NO
............................
Third
Respondent
NANO ABRAM MATLALA
NO
....................................................
Fourth
Respondent
NOMVUYO YVONNE SERITI
NO
..................................................
Fifth
Respondent
SEGOPTJE SHEILA MPHAHLELE
NO
........................................
Sixth
Respondent
JUDGMENT BY:
.............
LEKALE,
J
HEARD ON:
....................
5
DECEMBER 2013
DELIVERED ON:
..........
13
DECEMBER 2013
INTRODUCTION AND
BACKGROUND
[1] On the 25th October 2012 the
applicant launched the instant application in terms of which it moves
for, inter alia, an order
that:
“
5. The second to sixth respondents be ordered to cede part
of their claim against the first respondent to the applicant, such
claim
arising from the settlement negotiated between the first
respondent and the second to sixth respondents for work done by
Sanyati
Civil Engineering & Construction (Pty) Ltd (in
liquidation) for construction of the Oliviers Hoek Pass Road, P81/1,
and to
the amount of R8 773 636,77;
6. Alternatively, to prayer 5, that the first respondent be
authorised, directed and ordered to effect payment of the
aforementioned
amount to the applicant and on strength of the invoice
issued by the applicant to the first respondent on 22 October 2012
and appended
as annexure “A” to this notice of motion,
and to deduct said amount from the total amount to be paid by the
first respondent
to the second to sixth respondents in terms of the
settlement agreement reached between those parties referred to
above.”
[2] The first respondent is Member of
the Executive Council of Free State provincial government responsible
for police, roads and
transport. He does not oppose the matter and
effectively abides the decision of the court. The second to and
including the sixth
respondents are the liquidators of Sanyati Civil
Engineering & Construction (Pty) Ltd (in liquidation) (The
“respondents”)
and they oppose the application on,
inter alia, the ground that same is, in law, not competent due to
failure by the applicant
to comply with the provisions of section
359(2) of Companies Act 61 of 1973 (the “Act”). They
further seek an order,
inter alia, declaring the amount paid to them
by the first respondent on the 26th October 2012 as deemed to be in
their custody
and under their control in terms of the Act. First Rand
Bank seeks leave to intervene in the proceedings and the applicant
opposes
such a move on the basis that it does not have direct and
substantial interest in the matter.
[3] Sanyati Civil Engineering and
Construction (Pty) Ltd (“Sanyati”) was placed under
liquidation on the 11th of July
2012 and the respondents were
subsequently appointed as its provisional liquidators on the 20th
July 2012 and as liquidators on
the 12th September 2012.
[4] It is common cause between the
parties that the respondents, in their capacity as liquidators,
negotiated with the government
and settled Sanyati’s claim
against the first respondent in the amount of R25 773 411,0. The
matter was postponed on the
22 November 2012 and costs were directed
to be costs in the application. On the 6th December 2012 and the
28th March 2013 the
matter was postponed with costs being reserved.
[5] On the 9th July 2013 the
applicants’ attorneys of record withdrew as such and on the 5th
November 2013 the respondents
set the matter down for hearing on the
5th December 2013 and duly effected service on their applicant.
[6] On the 5th December 2013 the
applicant’s present attorneys filed notice of appointment as
such and Mr Wessels appeared
on the applicant’s behalf to move
for postponement on the basis that he was not ready for the matter as
he only received
his brief on the 4th December 2013. Mr Badenhorst,
appearing for the respondents, opposes the request on the grounds
that there
exists no evidence explaining the reason for the late
appointment of attorneys and, further, submits that in any event
failure
by the applicant to give the notice contemplated by section
359(2)(a) of the Act renders, as a matter of law, a postponement
futile.
DISPUTE
[7] The parties are in agreement that
the preliminary point of non-compliance with section 359(2) of the
Act has the potential to
dispose of the matter and, as such, falls to
be determined ante omnia. They are, therefore, ad idem that in the
event of a finding
that the provisions of that section are applicable
to the application then and only in that event it would be the end of
the matter.
I am, however, of the view that such a point in limine
has the potential to be dispositive of only the applicant’s
motion
and not of the whole matter in so far as the respondent’s
counter- application is not struck thereby.
[8] Mr Badenhorst submits, with
reference to heads of argument filed for and on behalf of the
respondents, that it is clear from
the applicant’s founding
papers that its claim relates to fees and disbursements collected by
Sanyati on its behalf prior
to the winding-up order issued against
the latter. It is, as such, patent from the legal provisions in
question, according to
the respondents, that the applicant was
legally obliged to give them, as liquidators, at least three weeks’
notice of its
intention to sue for the relevant amount within four
weeks of their being appointed as such.
[9] Mr Wessels contends, on behalf of
the applicant, that the notice in question is not applicable to the
applicant’s claim
because same relates to the conduct of the
respondent liquidators which was exhibited subsequent to the
winding-up order when they
accepted payment meant for the applicant
from the first respondent.
APPLICABLE LEGAL PRINCIPLES
[10] Section 359(2) of the Act provides
as follows:
“
2(a) Every person who, having instituted legal proceedings
against a company which were suspended by a winding-up, intends to
continue
the same, and every person who intends to institute legal
proceedings for the purpose of enforcing any claim against the
company
which arose before the commencement of the winding-up, shall
within four weeks after the appointment of the liquidator give the
liquidator not less than three weeks’ notice in writing before
continuing or commencing the proceedings.
(b) If notice is not so given the proceedings shall be considered
to be abandoned unless the court otherwise directs.”
[11] Failure by either the plaintiff or
the applicant party to comply with the provisions of section
359(2)(a) of the Act, where
applicable, renders such a party’s
subsequent proceedings against the liquidators unlawful because the
proceedings he instituted
against the company prior to its
liquidation and which got suspended by the liquidation order are
regarded as abandoned and his
right to commence proceedings against
the liquidators is in effect forfeited. In order for such a party to
continue or commence
proceedings against the liquidators outside the
liquidation scheme provided by the Act he requires leave from the
court which
may only be secured through a substantive application.
(See
Randfontein Extension Ltd v South Randfontein Mines Ltd and
Others [1936] WLD Part 1 and Furstenburg v Smith en ‘n Ander
1964 (3) SA 810
(O).
[12] In an application for leave to
either continue or commence the proceedings against the liquidators
the court has unfettered
discretion which involves, inter alia,
consideration of the interests of all interested parties, being the
creditors, liquidators
and members of the company in liquidation.
(See
Ronbell 108 (Pty) Ltd v Subline Investments (Pty) Ltd
2010
(2) SA 517
(SCA).)
APPLICATION OF THE LAW AND
FINDINGS
[13] The question in the instant matter
is whether or not the applicant’s claim arose before Sanyati
was placed under liquidation.
If the answer is in the affirmative
then the applicant was obliged, as of law, to give the respondent
liquidators the prescribed
notice before it could launch the present
application. (See
Brandkor Beleggings (Edms) Bpk v Emerald Sky
Trading 157 (Edms) Bpk
[2013] ZAGPPHC 133 on the date of
liquidation order as the date of commencement of winding-up for
purposes of a section 359(2) notice)
[14] As Mr Badenhorst correctly
submits, it is clear from the founding affidavit filed in support of
the application that the claim
which the applicant effectively seeks
to enforce through the instant proceedings relates to Sanyati as
opposed to any alleged conduct
on the part of the liquidators and
arose before the 11th July 2012 in so far as the relevant deposition
discloses, inter alia,
that:
“
12.6 Prior
to the provisional order of liquidation the applicant had issued an
invoice to the Department and Sanyati for payment
for services
rendered up to and until that stage….”
(See page 30 of paginated bundle of documents)
“
12.8 The
Department had paid this amount over to Sanyati together with certain
other payments. I … can safely state to the
court that the
money that was in actual fact due and owing to the applicant in terms
of the invoice, had been paid over by the
Department to Sanyati prior
to its provisional liquidation.”
(See page 31 of paginated bundle of
documents)
“
13.1 …
Sanyati … failed to effect payment of the monies sourced by it
as a conduit on behalf of the applicant over
to the applicant…”
(See page 32 of paginated bundle of
documents)
[15] For the sake of completeness it is
worth noting that in the heads of argument filed for and on behalf of
the applicant by its
erstwhile attorneys, the applicant contends that
the issue of section 359(2) notice relates to prejudice and that the
respondent
liquidators have not suffered any kind of prejudice
because they were aware of the applicant’s claim since at least
July
2012. In my view the question of prejudice only arises for
determination when a party in the position of the applicant
approaches
the court, by way of substantive application, for it to
direct otherwise in terms of section 359(2)(b) of the Act. In the
absence
of such an application the Act is clear as to the effect of
failure to give the prescribed notice. (See
Ronbell 108 (Pty) Ltd
v Subline Investment (Pty) Ltd
(supra).)
[16] On the applicant’s own
version, it is clear that its claim against Sanyati arose before the
commencement of the winding-up
and, as such, the provisions of
section 359(2)(a) of the Act are applicable thereto. The applicant
was obliged to give the requisite
notice of its intention to commence
proceedings against the respondent liquidators in their capacity as
such. It failed to do
so and, as such, the present proceedings are
incompetent in law to the extent that they have not been sanctioned
by the court
as no application for leave to commence the same in
spite of the provisions of section 359(2)(b) of the Act was ever made
and granted.
[17] In conclusion it needs to be
pointed out that it is patent, from the papers, that prayer 6 of Part
B of Notice of Motion in
terms of which the applicant seeks, as an
alternative to its claim against the liquidators, relief against the
first respondent
has in effect been overtaken by events insofar as it
is common cause between the parties that payment has already been
effected
to the respondent liquidators by the first respondent.
ORDER
[18] The application is dismissed with
costs inclusive of reserved costs as well as costs relative to
employment of senior counsel.
[19] The counter- application is
postponed sine die and the applicant is ordered to pay wasted costs.
______________
L. J. LEKALE, J
On behalf of
applicant:
........................................
Adv.
M. H. Wessels SC
.............................................................................
Instructed
by:
.............................................................................
Steyn-Meyer
Inc.
.............................................................................
BLOEMFONTEIN
On behalf of 1st
respondent:
................................
No
appearance
......................................
......................................
c/o State Attorney
..................................................
..........................
BLOEMFONTEIN
On behalf of 2nd, 3rd, 4th, 5th
and 6th
respondents:
...........................................
Adv.
M. A. Badenhorst SC
................................................................
............
Instructed by:
...............................................................
.............
Symington & De Kok
............................................................................
BLOEMFONTEIN
/ebeket