About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2009
>>
[2009] ZAGPPHC 395
|
|
Van Rensburg and Others v Steyn (18137/2005) [2009] ZAGPPHC 395 (30 October 2009)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
REPUBLIC
OF SOUTH AFRICA
Case No: 18137/2005
In the matter
between:
JACOBUS HENDRIKUS
JANSE VAN RENSBURG
NO
...................................................
First
Plaintiff
PHILIP FOURIE
NO
..........................................................................................................
Second
Plaintiff
JACOB LUCIEN
LUBISI
NO
...............................................................................................
Third
Plaintiff
LILY MAMPINA
MALATSI-TEFFO NO
…...................................................................
Fourth
Plaintiff
ENVER MOHAMMED
MOTALA
NO
................................................................................
Fifth
Plaintiff
RABOJANE MOSES
KGOSANA
NO
..................................................................................
Sixth
Plaintiff
and
SAREL JOHANNES
LODEWICKUS
STEYN
.........................................................................
Defendant
JUDGMENT
l. This is an
application for default judgment. The plaintiffs claim to sue in
their capacities as joint liquidators of the "MP
Finance Group
CC (in liquidation)”, a proposition of dubious legal validity
for no such corporation has ever existed.
2. The summons was
served at the defendant's place or residence. The defendant did not
give notice of intention to defend. Thus
the application for default
judgment.
3. The plaintiffs
allege, I accept correctly, that they are the duly appointed
liquidators of several corporate entities, all of
which are in
liquidation: MP Finance Consultants CC, Krion Financial Service
Limited, Marburt Financial Services Limited and Madikor
20 (Pty)
Limited.
4.
They
also allege that they are the duly appointed liquidators of an entity
described in the summons as "M & B Co-Operative
Limited
Partnership". I doubt whether this allegation is good in law.
5. The plaintiffs
allege that the estates of the four corporate entities named above
and that of M & B Co-Operative Limited
Partnership were
consolidated into a single estate by an order of this court made
under case number 21098/2003. The court which
made the order is
described, incorrectly, in the summons as the Witwatersrand Local
Division but nothing turns on this. The consolidated
estate is given
by the plaintiffs the name of MP Finance Group CC (in liquidation)
and referred to as the "Krion Scheme”.
6.
The plaintiffs' cause of action is that the defendant was an investor
in a fraudulent scheme which has become known as the Krion
Scheme. It
is not suggested that the defendant was anything but an innocent
investor. The plaintiffs allege a contract between
the Krion Scheme
(in the sense of one or more of the entitles being liquidated by the
plaintiffs) and the defendant under which
the defendant would
give money to the Krion Scheme to hold. The defendant was to
receive a return on his investment
of at least 10% per month.
On this basis, the plaintiffs allege, the Krion Scheme paid out to
the defendant a total of R117 100
during the period December 2001 to
March 2002. These amounts, the plaintiffs contend, constituted either
dispositions not for value
under s 26 or voidable preferences under
s
29
of the
Insolvency Act, 24 of 1936
.
7.
When
this application initially came before me, Ivexpressed concerns about
the legal validity of the causes of action pleaded. The
matter stood
down for several days to enable the plaintiffs to consider their
position. The application is now once again
before me. The plaintiffs
have submitted an affidavit by their attorney setting out
the background to the relief sought.
8. The Krion Scheme,
the plaintiffs explain, was operated through the several entities
mentioned above. The plaintiffs say
that they are unable
to identify the entity or entities with which the defendant
made his investment or the entity or entitles
which paid to the
defendant the sum of R117 100 claimed in this action.
9. Relying on the
court order I have mentioned, the plaintiffs assert that they are
entitled to treat all the entities mentioned
as one close
corporation. Thus the assertion that the plaintiffs litigate as the
liquidators of the insolvent estate of "MP
Finance Group CC fin
liquidation)” which they call in their particulars of
claim the "Krion Scheme".
10. Proceeding from
this foundation, the plaintiffs assert that the Krion Scheme was
at the relevant times insolvent,
its liabilities exceeding
Its assets. They go further: they allege that on 28 February
2003 this court made a declaration
to that effect. And, as I
have said, they claim chat the payments out to the defendant
constituted either dispositions
not for value or voidable
preferences.
11. The relief
sought by the plaintiffs is that usually applicable to such
claims, ie orders setting aside the dispositions
and directing
repayment to the plaintiffs with Interest and costs.
12. The history of
the court order upon which the plaintiffs rely is as follows:
12.1 By notice of
motion dated 31 July 2002, under case number 21098/2002 in this
court, the first to fourth plaintiffs as applicants obtained
a
rule nisi calling upon anyone who wished to oppose the
application to show cause on the return day why the estates
of
the five entities I have named above should not be declared
to be one entity known as MP Finance Croup CC and
why the
separate estates and the various entitles should not be declared
to be the business of the "saamgevoegde
beslote korporasie"
and wound up as if they were this one notional close
corporation.
12.2 Directions were
given in the rule nisi for service and publication. It Is not
suggested that the present defendant
was served with
the application or that it cane to his notice.
12.3 The
justification for the relief sought was said in the founding
affidavit attached to the notice of motion to be
that the
several estates were used as a vehicle for a scheme, conducted
fraudulently and in contravention of the
Consumer Affairs
[Unfair Business Practices) Act, "71 Of 1908 and of the
Banks Act, 94 of 1990.
12.4 Some opposition
was noted and then withdrawn and ultimately the rule was
confirmed by this court on 4 February 2003.
13
It bears repeating that no close corporation called MP Finance
Group CC ever existed. The court order would, in its
terms,
confer on the plaintiffs the benefit of alleviating their difficult
but voluntarily assumed burden of untangling and properly
characterising the transactions which constituted the scheme
conducted by the entities which the plaintiffs undertook
to wind
up.
14.
From the evidence placed before me by affidavit, the description "M
& B Co-Operative Limited Partnership" came
about like
this:
14.1 The guiding
mind of the scheme, Prinsloo, was told that her scheme was
illegal. She sought to legitimise the scheme
by creating a
cooperative under the Co-operatives Act, 91 of 19B1.
14.2 The proposed
co-operative was however never registered but Prinsloo and
several of her associates traded under that
name, ostensibly on
behalf of the non-existent co-operative.
14.3 On the basis
that this made Prinsloo and her associates agents for a
non-existent principal which in turn, so it
is submitted on
behalf of the plaintiffs, rendered each of them liable jointly
and severally for the debts of the non-existent
co-operative,
the plaintiffs claim that "M & 8 Co-Operative Limited"
was a partnership whose partners were
Prinsloo and her
several associates and that the plaintiffs were appointed as the
liquidators [sic] of the alleged
partnership.
14.4 Thus the
allegation that "M & B Co-Operative Limited
Partnership" is one of the entities which the
plaintiffs
are required to wind up.
15. I have the
gravest reservations whether the court order has any validity at all
because I cannot see what jurisdiction this
court can have to depart
from the procedures in insolvency prescribed by the
Insolvency
Act, the
Companies Act, 61 of 1973 and the
Close Corporations
Act, 69 of 1984
. These measures essentially provide for the
estates of Individual insolvent persons, natural or juristic, to
be administered
individually. The fact that partnerships properly so
called and trusts, which are neither natural nor juristic
persons, may
under the
Insolvency Act be
treated If they were
natural persons, is in my view of no present relevance.
16. The ground
advanced as justification for the court order, that the corporate
veil will thereby be lifted, seems to me to
be no ground at all.
The course undertaken will not lift the veil. The obscurity
generated by the alleged unlawful scheme will
be deepened if the
web of deceit is not untangled.
17. But this is
beside the point and I need come to no firm conclusion in this
regard. The law requires a litigant who seeks
relief under
s 26
of the
Insolvency Act to
show that the dispositions he seeks
to have reversed were made by a specific Insolvent. An insolvent
is defined in
s 2
of the
Insolvency Act to
mean a debtor whose
estate Is under sequestration. A debtor is defined, for present
purposes, as a person or partnership
or the estate of a person
or partnership which is a debtor in the usual sense of the word.
Section 29
of the
Insolvency Act requires
a plaintiff to show
that the disposition in question was made by a specific debtor.
A plaintiff who relies on either
s 26
or
s 29
Is further
required to show that at a decisive moment the liabilities
exceeded the assets of that specific insolvent
or debtor.
18. This is
precisely what the plaintiffs are unable to do: this is why no
such allegation is made in their particulars
of claim and the
evidence presented through the affidavit of the plaintiffs'
attorney shows that this is why the court
order was sought.
19. In my view, no
court order, however wide its terms, can excuse the plaintiffs
from bringing themselves within the
provisions of the
Insolvency
Act, the
very statute upon which the plaintiffs rely for relief.
To put it another way, no court order can confer jurisdiction
{In the sense of regsbevoegdheld) on another court to depart
from the provisions of a statute.
20. The plaintiffs
find themselves thus unable to make allegations which are
essential to their causes of action. Their
particulars of claim
therefore disclose no valid cause' of action.
21. The application
for default judgment is dismissed.
NB Tuchten
Acting Judge of the
High Court
30 October 2009