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[2012] ZAGPPHC 159
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Blue Cell (Pty) Ltd v Blue Financial Services (Pty) Ltd and Another (14192/10) [2012] ZAGPPHC 159 (12 August 2012)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
NORTH, PRETORIA DIVISION
Case
No: 14192/10
DATE:10/08/2012
In
the matter between:
BLUE
CELL (PTY) LTD (IN
LIQUIDATION)
................................................
Applicant
And
BLUE
FINANCIAL SERVICES (PTY)
LTD
.................................................
First
Respondent
BLUE
EMPLOYEE BENEFITS (PTY)
LTD
................................................
Second
Respondent
JUDGMENT
ON APPLICATION FOR LEAVE TO APPEAL
1.
The two respondents in the principal application apply for leave to
appeal against the judgment and order granted against them
on the
18th April 2012.
2.
The applicant was liquidated by this court at the instance of the two
respondents. Subsequently, the applicant's liquidators,
acting in its
name approached the court for an account of profits made by the
respondents as a result of the unlawful appropriation
of the
applicant's business both pre and post liquidation. During these
proceedings it became common cause that the applicant's
liquidation
had been brought about, if not solely then to a decisive extent, by
the presentation under oath of a factual situation
that was
incorrect. It furthermore became common cause that the respondents
had, prior to applicant's liquidation, diverted a large
portion of
income that should have accrued to the now insolvent company.
3.
In the light of these common cause facts the respondents' counsel
conceded during the hearing of the principal application, in
the
presence of their representatives and of their attorney, that the
applicant's liquidators were entitled to an account and payment
of
the sum due, which constituted the income the applicant should have
received prior to liquidation.
4.
Respondents expressly conceded that they were in the light of the
fact that income had been unlawfully diverted into their pockets,
not
entitled to set off any moneys they might have advanced on loan
account to the applicant against income that was only established
to
have existed after liquidation and accrued to the insolvent company
only after the sum total thereof had been determined by
an order of
court.
5.
The notice of appeal now suggests that the court erred by failing to
allow set -off to be applied in respect of several items
included as
part of the loan account. Not only does this argument fly in the face
of the admission made during the hearing of the
principal
application, but it also misconstrues the nature of set-off, which
cannot occur in insolvency after the loan account
has been submitted
as a concurrent claim, against an asset - the claim for
pre-liquidation profits - the existence of which was
only established
after a final order of liquidation was granted, as a result of the
liquidator's administration of the estate.
6.
The respondents were fully aware of this problem when the principal
application was argued and disavowed any reliance upon set-off
under
oath.
7.
Regarding the post-liquidation profits, against the granting of which
the respondents also seek leave to appeal, the then provisional
liquidator entered into the agreement with the respondents to
continue the applicant's business on the basis that the liquidation
had been brought about in a lawful and regular fashion.
8.
Once this was proven to be incorrect and it was established that the
liquidation order was obtained be stealth and deceit, no
enforceable
agreement redounding to the respondents' benefit could be entered
into with the perpetrators of the deceit.
9.
The provisional liquidator was in any event not authorised to enter
into that agreement and if he was, he would have been obliged
and
entitled to cancel the same and claim any profits earned from the
conduct of the business for the liquidated company once he
became
aware of the true state of affairs.
10.The
respondents' submission that another court could award the
post-liquidation profits to them has no prospect of success.
11.Regarding
the order for interest, against which the respondents wish to appeal,
it is clear that the liquidated company is entitled
to be placed into
the position it would have been had the deceit not occurred. It would
have earned interest on any profit - or
would have been able to do
so.
12.As
far as the punitive costs order sought to be appealed against is
concerned, there was ample evidence that the court was inveigled
into
granting a
liquidation
order by a skewed - if not designedly false - presentation of the
facts. Once this deceit was uncovered, the court was
entitled - in
the exercise of its judicial discretion - to grant a special costs
order, not only to mark its disapproval of the
respondents' conduct,
but also to ensure that the liquidated company was not saddled with
the additional burden of any attorney
and client costs in its quest
to right a palpable wrong perpetrated upon it. 13. There is therefore
no reasonable prospect that
another court will come to a different
conclusion than this court. The application for leave to appeal is
dismissed with costs,
including the costs of two counsel. Applicant
sought a punitive costs order, but there is no suggestion that the
exercise of the
fundamental right to seek leave to appeal was tainted
by any impropriety. This request is therefore refused.
Dated
at Pretoria on this 10th day of August 2012
E
BERTELSMANN
Judge
of the High Court
Case
no: 14192/10
Date
of the hearing : 24 July 2012
Judgment
delivered on : 10 August 2012
Counsel
for the Applicant : Adv L J Van Tonder
Adv
J G Smit
Instructed
by : Martini Patlansky Attorneys, Johannesburg
Counsel
for the Respondent : Adv P Ellis SC
Adv
M P Van der Merwe
Instructed
by : Van der Merwe du Toit Inc, Pretoria