Caltex Oil South Africa (Pty) Ltd v Olivier (A241/04) [2005] ZAFSHC 8 (25 August 2005)

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
>>
2005
>>
[2005] ZAFSHC 8
|

|

Caltex Oil South Africa (Pty) Ltd v Olivier (A241/04) [2005] ZAFSHC 8 (25 August 2005)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Appeal No. : A241/2004
In
the appeal between:
CALTEX
OIL SOUTH AFRICA (PTY) LTD
Appellant
and
JOHANNES
STEPHANUS OLIVIER
Respondent
_____________________________________________________
CORAM:
HANCKE
et
EBRAHIM JJ
_____________________________________________________
HEARD
ON:
22 AUGUST 2005
_____________________________________________________
JUDGMENT
BY:
HANCKE J
DELIVERED
ON:
25 AUGUST 2005
_____________________________________________________
[1] The appellant
instituted action against the respondent in the magistrates’ court
for payment of the amount of R60 352,76 for
goods sold and delivered
to Delta Pipe Construction (Pty) Ltd. The appellant’s cause of
action is based on a written suretyship
agreement which the
respondent signed in favour of the appellant as surety and
co-principal debtor for Delta Pipe Construction (Pty)
Ltd.
[2] The parties prepared
a stated case from which it is undisputed that the respondent signed
the personal suretyship in favour of
the appellant. It is also
common cause that the respondent proposed a written compromise which
was made an order of court on 5 December
2001 by the Transvaal
Provincial Division of the High Court. Clause 4.6 of the said
compromise states as follows:
“
Upon sanctioning of the compromise,
all suretyships signed by any director or previous director, employee
or previous employee of
the company in favour of any creditor of the
company will be deemed to be cancelled.”
[3] The appellant, being
of one of the concurrent creditors, was owed an amount of R125 907,30
by Delta Pipe Construction (Pty) Ltd.
Appellant did not vote in
favour of the compromise at the meeting of creditors held. The
appellant received notice in terms of
the section 311 order on 18
December 2002 from Tutor Trust (Pty) Ltd being the receiver appointed
in terms of the said section.
The appellant then completed a claim
form and submitted it to Tutor Trust on 3 January 2003 for a claim in
the amount of R60 352,76
with the
proviso
and modification
that the appellant does not accept clause 4.6 of the compromise.
[4] The respondent’s
defence is that a compromise in terms of section 311 of the Companies
Act 61 of 1973 (“the Act”), which
was sanctioned by a court
order, stipulates that all suretyships signed by the respondent, as a
director of Delta Pipe Construction
(Pty) Ltd in favour of any
creditor of Delta Pipe Construction (Pty) Ltd, would be deemed to be
cancelled. The respondent therefore
relies on the cancellation of
the suretyship through the sanctioned compromise and contends that
the appellant could not found an
action on the thus cancelled
suretyship.
[5] Eventually, after the
magistrate was requested by the attorneys of both parties to give a
judgment on the stated case, the magistrate
dismissed the plaintiff’s
claim “on the grounds that this court has no jurisdiction to
entertain the matter”.
[6] The issue in this
appeal is whether the respondent is liable in terms of the written
suretyship signed by him. This question
involves an interpretation
of section 311, in particular section 311(3) of the Act.
[7] Section 311 reads as
follows:
“
311 Compromise and arrangement
between company, its members and creditors –
(1) ........
(2) If the compromise or arrangement
is agreed to by–
the majority number representing
three-fourths in value of the creditors or class of creditors; or
a majority representing three-fourths
of the votes exercisable by the members or class of members, (as the
case may by) present
and voting either in person or by proxy at the
meeting, such compromise or arrangement shall, if sanctioned by the
Court, be binding
on all the creditors or the class of creditors, or
on the members or class of members (as the case may be) and also on
the company
or on the liquidator if the company is being wound up or
on the judicial manager if the company is subject to a judicial
management
order.
(3) No such compromise or arrangement
shall affect the liability of any person who is a surety for the
company.”
[8] Mr. Leeuwner, counsel
for the respondent, submitted that as the compromise was in all
respects lawfully sanctioned by the court,
the appellant was bound by
it even if it did not agree to the terms of the compromise. In this
regard he relied on authority stating
that
“.......... the purpose of the
section is to create machinery to bind a dissenting recalcitrant
minority to the agreement between
the company and the
majority........”
EX PARTE KAPLAN AND
OTHERS NNO: in re ROBIN CONSOLIDATED INDUSTRIES LTD
1987 (3)
SA 413
(W) at 419 B – C;
MORRIS NO v AIROMATIC (PTY) LTD t/a
BARLOWS AIRCONDITIONING CO
1990 (4) SA 376
(A) at 397; and
also
EX PARTE LOMATI LANDGOED BEHERENDE (EDMS) BEPERK; EX PARTE
LOMATI LANDGOED (EDMS) BPK
1985 (2) SA 517
(W) at 521.
[9] It is however
important to note that the authorities referred to above concern the
interpretation of section 311(2) and not section
311(3) of the Act.
As far as the latter sub-section is concerned it was pertinently
discussed in
EX PARTE VOYSEY BOND PROPERTY INVESTMENTS LTD
1978 (2) SA 134
(D) where Leon J stated the following at 138 A – B:
“
But the section does not either
expressly or by necessary implication prevent parties from
contractually
altering the position which the statute would
otherwise bring about.”
(My underlining)
[10]
Henochsberg on
the Companies Act
by Meskin (Volume 1) in his commentary to
section 311(3) states the following at page 632:
“
It is respectfully considered that
the effect of Section 311(3) read with Section 311(2) is that,
whatever their nature, the terms
of the scheme cannot in any way
affect the surety’s liability to any creditor; the legislature does
not intend that a term which
would affect such liability is to be
binding only on a creditor who voted in favour of the scheme. A
surety for the company remains
liable to the company’s creditor
notwithstanding that the creditor’s claim against the company is
subject to the novation resulting
from the sanctioned compromise.”
I agree with the
aforesaid quote.
[11] This is in
accordance with English Law where the following passage in Halsbury’s
Laws of England
(Second Edition Volume V – Hailsham Edition)
paragraph 1366 at page 797 is quoted with approval in
RE GARNER
MOTORS LTD
[1937] 1 All ER 671
Ch. D at 675C.
“
A scheme need not expressly reserve
the rights of any creditors against sureties for debts of the
company, as such rights are unaffected
by a scheme.”
[12] In
INCORPORATED
GENERAL INSURANCES LTD v CEMENT DISTRIBUTORS (SOUTH AFRICA) (PTY) LTD
1990 (1) SA 132
(A) Botha JA stated the following at page 136 H to
137 A:
“
No doubt the effect of Section 311
(3) is that
‘
a scheme need not
expressly reserve the rights of any creditors against sureties for
debts against the company as such rights are
unaffected by the
scheme’ .........
.......... but it is a far cry from
that to hold that a creditor who has voted against the acceptance of
an offer of arrangement is
bound to abide by a clause in it providing
for the termination of his right to proceed against a surety, for,
ex
hypothesi
, he has in fact not contracted out of the protection
afforded to him in terms of Section 311(3).”
[13] It follows therefore
that a party cannot invoke the provisions of section 311(2) in a
proposed offer of compromise to bind the
creditor of a surety of the
company who does not consent to be bound, especially in view of the
clear wording of section 311(3) of
the Act.
[14] It is important to
note that the appellant in the present matter did not vote in favour
of the compromise nor did it accept all
the conditions thereof when
it submitted its claim with the
proviso
and/or modification
that clause 4.6 of the compromise should be deleted in respect of the
appellant. The appellant’s rights as
against third parties, like
the respondent in this matter, who signed a personal suretyship in
favour of the appellant, cannot be
affected in view of the wording of
section 311(3) of the Act. It can only be affected by agreement
between the parties whose rights
are at stake.
[15] Accordingly it is
clear that the appellant never waived its protection afforded to it
in terms of section 311(3) of the Act either
expressly, tacitly or by
implication and therefore clause 4.6 of the compromise can never be
enforced against the appellant. The
respondent should therefore be
held liable to the appellant in terms of the personal suretyship he
signed.
In the result the appeal
is upheld with costs and the order of the court
a quo
is
replaced with the following order:
“
The defendant is liable to the
plaintiff in terms of the written deed of suretyship and the
defendant is ordered to pay the plaintiff
the amount of R60 352,76
together with costs.”
________________
S.P.B. HANCKE, J
I
agree.
_____________
S. EBRAHIM, J
On
behalf of the appellant: Adv. D.J. Joubert
Instructed
by:
Naudes
Attorneys
BLOEMFONTEIN
On
behalf of the respondent: Adv. P.G. Leeuwner
Instructed
by:
Honey
& Partners
BLOEMFONTEIN
/sp