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[2009] ZAGPPHC 175
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Sekunjalo Piping Systems (Pty) Ltd v Mmolawa and Another (2008/07) [2009] ZAGPPHC 175 (20 November 2009)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG, PRETORIA)
CASE
NO:2008/07
DATE:20/11/2009
In
the matter between:
SEKUNJALO
PIPING SYSTEMS (PTY)
LTD
...............................................................
Applicant
and
MMOLAWA,
SETSHEDI MOLEFE
SAMUEL
..................................................
First
Respondent
MMOLAWA,
LORRAINE
MPHO
...................................................................
Second Respondent
JUDGMENT
MAKGOKA.
J:
[1]
This is an opposed application wherein the applicant seeks an order
declaring the members of a close corporation personally
liable for
the debts of the close corporation as at the time of deregistration.
[2]
The applicant bases its application on section 26(5) of the Close
Corporation Act, 69 of 1984, which provides the following:
"If
a corporation is deregistered while having outstanding liabilities,
the persons who are members of such a corporation at
the time of
deregistration shall be jointly and severally liable for such
liabilities''
[3]
it is common cease that at all material times, the respondents were
members of Seako Civil and Buiiding Construction CC, with
registration number CK 2001/037235/23. ("the corporation")
[4]
The close corporation is indebted to the applicant in various amounts
pursuant to orders of this court, which debts remain unsatisfied,
despite attempted execution.
[5]
On 23 May 2007, the Registration of Close Corporation ("the
Registra") gave the corporation notice in terms of section
26
(1) of the Act to de-register the close corporation on the basis that
there was reasonable cause o believe that the corporation
was not
carrying on business or was not operation.
[6]
On 4 June 2007, on the instructions of the corporation, the
corporation's attorneys objected to the intended de-registration
of
the corporation, on the basis that the close corporation was in fact
carrying on business.
[7]
On 14 November 2008 the Registrar caused to be published, Government
Notice 31568 whereby the de-registration of the close corporation
was
advertised.
[8]
On 13 February 2009 an application was made in the prescribed manner,
for the restoration of the registration of the close corporation.
[9]
The registration of the corporation was restored with effect from 1
April 2009, as published in the Government Gazette 32076
of 17 April
2009.
[10]
The present application was a launched on 14 May 2009.
[11]
Mr. Welgemoed, on behalf of the respondents, contended that section
26 (5) of the Act was not applicable in the present application,
as
at the time the application was launched the close corporation's
registration had already been restored.
[12]
Mr. Roux, on behalf of the applicant, on the other hand, argued that
it did not matter that the registration of the close corporation
had
been restored. It suffices that the close corporation was
de-registered for section 26 (5) of the Act to kick in. In support
of
this proposition, Mr. Roux referred to Mouton v Boland Bank Ltd
2001
(3) SA 877
(SCA).
[13]
To my mind, Mouton is distinguishable from the present application,
on the facts. In that case a close corporation was de-registered,
while owing money to a bank, upon which the bank sued the sole member
of the close corporation for the debt. After close of pleadings,
the
member applied for the restoration of registration of the close
corporation, which was granted. Thereafter the member delivered
an
amended plea stating that there had been a change of circumstances
since he had last pleaded, which entitled him to assert his
release
from his former liability terms of section 26(7) of the Act.
[14]
Section 26(6) deals with the power of the Registrar to restore
registration, while 26(7) deals with the effect of restoration
of
registration.
[15]
Section 26(7) of the Act provides as follows:
"The
Registrar shall give notice of the restoration of the registration of
the registration of a corporation in the Gazette,
and as from the
date of such notice the corporation shall continue to exist and be
deemed to have continued in existence as from
the date of
deregistration as if it were not deregistered."
[16]
In Mouton, two policy considerations were explored at 881E-J. First,
that the policy behind Section 26(5) is to impose a civil
penalty
upon a member who allows the Registrar to deregister a corporation
which does have liabilities. Misusing the deregistration
when
alternative and proper procedure for winding up in terms of section
67 or section 68 are appropriate, brings the errant member
right
within the purview of section 26(5).
[17]
Second policy consideration was that, if a corporation is
deregistered, its premises and goods will be abandoned or neglected,
a prey to all, and its records destroyed or lost. No liquidator is
appointed. Under such circumstances it is not expected that
upon
subsequent re-registration creditors will find relatively favourable
a situation as they might have found upon a winding-
up followed by
the immediate appointment of a liquidator. The court found that,
under these circumstances, a member who is responsible
for the state
of affairs should not merely be made personally liable, but be held
to his liability upon restoration.
[18]
In the present application, the de-registration was at the instance
of the Registrar, and once it came to the knowledge of
the members of
corporation that the Registrar intended to de- register the
corporation, there was objection thereto. Once the corporation
was
de-registered and it came to their attention, the members of the
corporation immediately applied for restoration of its registration.
In Mouton, on the other hand, the member manipulated both the
de-registration and restoration in a contrived manner. The facts
and
policy considerations in Mouton distinguishes it from the present
application.
[19]
I also agree with Mr. Welgemoed;s argument that section 26(6) does
not find application in the present matter, simply because
that close
corporation' was in existence at the institution of the application.
On a consideration of all the facts in this application,
I am
satisfied that the application has to be dismissed.
I
make the following order:
1.
The application is dismissed with costs.
T
M MAKGOKA
JUDGE
OF THE HIGH COURT
DATE
HEARD: 16 NOVEMBER 2009
JUDGMENT
DELIVERED:20 NOVEMBER 2009
FOR
THE PLAINTIFF: ADV C D ROUX
INSTRUCTED
BYR C CHRISTIE INC,
EDENVALE
AND PRETORIA
FOR
THE DEFENDANT : ADV C J WELGEMOED
INSTRUCTED
BY: TP MAGORO ATTORNEYS,
HATFIELD,
PRETORIA