About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: High Court, Northern Cape Division, Kimberley
SAFLII
>>
Databases
>>
South Africa: High Court, Northern Cape Division, Kimberley
>>
2004
>>
[2004] ZANCHC 67
|
|
De Villiers v Global Diamond Resources SA (Pty) Ltd (621/03) [2004] ZANCHC 67 (13 August 2004)
Reportable: Yes /
No
Circulate to
Judges: Yes / No
Circulate
to Magistrates: Yes / No
IN
THE HIGH COURT OF SOUTH AFRICA
(Northern Cape Division)
Case no: 621/03
Date
heard: 2004-08-12
Date
delivered: 2004-08-13
In
the matter of
:
Albert
Willem De Villiers Applicant
versus
Global
Diamond Resources (Pty) Ltd Respondent
Coram:
MAJIEDT
J
JUDGEMENT
on
APPLICATION
FOR LEAVE TO APPEAL
MAJIEDT
J:
The
applicant seeks leave to appeal against my judgement containing the
decision to discharge the provisional order of liquidation
against
the respondent and for the applicant to pay the costs of that
application.
The
application is primarily premised on the fact that I had exercised
my discretion wrongly in discharging the rule
nisi
.
More particularly, the submissions are made that I have erred in
the following respects:
a)
In
failing to give consideration thereto, alternatively giving
insufficient consideration to the fact that the onus rested on the
respondent to show on a balance of probabilities that the provisional
order should not be confirmed.
b)
That
I had erred in my assessment of the true financial position of the
respondent company.
c)
That
I had erred in not sufficiently taking into account the wishes and
interests of the respondentâs employees.
d)
That
I had erred in taking into consideration the fact that funds were to
be made available to the respondent company to continue
its
operations.
e)
That
I had erred in taking into consideration as one of the factors in
exercising my discretion, the strong suspicion that I harboured
against the applicant as to his lack of
bona
fides
in bringing the application for liquidation against the respondent.
f)
That,
even if I was correct in discharging the rule
nisi
,
I had erred in ordering that the respondent had to pay all the costs
of the application. The submission is made that the applicant
should
at least be ordered to pay the costs up until the stage when a
provisional order of liquidation was issued.
I
do not propose dealing with these matters separately and in much
detail. A convenient point of departure is to consider the powers
of a Court of Appeal in an application for liquidation such as the
present one, where the court below had exercised its discretion
in
discharging the rule
nisi
.
Mr. Botha, who appeared for the applicant, has referred me to the
judgement in
Shepstone
and Wylie and others v Geyser NO 1998(3) SA 1036 (A)
at 1044 J â 1045 A. He relies on this case as support
for his proposition that the discretion contained in the Companies
Act is a wide discretion as opposed to a restricted discretion. The
aforementioned distinction is important, because if indeed
it is a
wide discretion as Mr. Botha contends, the effect would be that a
Court of Appeal would have wide ranging powers to consider
afresh
all the relevant factors which I considered and also other factors
on the papers, and to exercise its own discretion in
deciding
whether it would be just and equitable for the respondent company to
be wound up. If, on the other hand, it is a discretion
in the
restricted sense of the word, a Court of Appeal would be
significantly curtailed in its powers and would in effect only
be
empowered to interfere with the exercise of my discretion if it is
shown that I have acted unjudicially, i.e. that my decision
had been
capricious, or was based on wrong principles, or that it was not
reached by unbiased judgement, or that it was not based
on
substantial reasons.
The
Shepston
v Wylie
judgement, referred to above, is in fact not authority for the
proposition advanced by Mr. Botha. In that case the Court
pertinently
found that it was not necessary to consider whether the
discretion was a wide or a restricted one, since the parties before
it
were
ad
idem
that the matter could be decided on the basis that the court
a
quo
had merely exercised a restricted discretion.
Mr.
Walters for the respondent has referred to the case of
Tjospomie
Boerdery (Pty) Ltd v Drakensberg Botteliers (Pty) Ltd and another
1989(4) SA 31 (T)
.
In that case, a full bench of the Transvaal Provincial Division
held that it was in the same position on appeal as the Court
a
quo
to consider all relevant factors and circumstances and to exercise
its own discretion in an application for liquation. I deem
it
necessary to quote in full the judgement of Stegman J at 43 G
â 44 E:
â
Having
ascertained the nature of the discretionary power concerned in the
present case, I must now answer the question whether it
is to be
characterised as belonging to the category of discretionary powers
contemplated by the decision in Ex parte Neethling and
Others (supra
). As already mentioned, such category consisted of the
discretionary powers to be exercised by a Judge in controlling
the
conduct of business in his own Court (including the granting of
postponements and amendments), in making orders for costs, in
imposing sentence, and in authorising the alienation of immovable
property in which a minor child has an interest. It is not easy
to
s
ee
what distinguishing quality or feature those discretionary powers
have in common to justify their being lumped together in the
same
category and distinguished from other discretionary powers. However,
it can at least be said that the discretionary power established
by s
344(h) of the Companies Act 1973 is not one of them. Nor is it one of
the powers that have been identified by decisions in later
cases as
belonging to the same category as those in Ex parte Neethling and
Others.
The
discretionary powers identified as belonging to the last-mentioned
category are all to be contrasted with discretionary powers
of the
kind dealt with in Mahomed v Kazi's Agencies (Pty) Ltd and Others
(supra ). The particular discretionary power dealt with
in that case
was the power to grant or withhold the Court's validating sanction in
respect of a compromise or scheme of arrangement
under s 103(2) of
the Companies Act 1926 (now s 311 of the Companies Act 1973). The
feature which apparently distinguishes discretionary
powers of that
kind from other discretionary powers is that they are not of a kind
which the Court of first instance is peculiarly
advantaged to
exercise, and that they are of a kind such as a Court of appeal is in
as good a position as the Court of first instance
to exercise.
In
my judgment there is nothing about the power established by s 344(h)
of the Companies Act 1973 which results in the Court of first
instance having any special advantage that would enable it to
exercise the power any more appropriately than a Court of appeal. The
power seems to me to be one that a Court of appeal is in as good a
position as the Court of first instance to exercise. I therefore
hold
that the power established by s 344(h) of the Companies Act 1973 does
not belong to the category of powers contemplated by the
decision in
Ex parte Neethling and Others, and that it does belong to the
category of powers contemplated by the decision in Mahomed
v Kazi's
Agencies (Pty) Ltd and Others.â
The
Tjospomie
Boerdery
case,
supra,
is
still good law and have not been overruled to my knowledge. When I
put it to counsel that this is indeed the legal position
at present,
both Mr. Walters and Mr. Botha agreed that it is the case.
In
my judgement I had found that the applicant had made out a strong
case against the respondent for the confirmation of the rule
nisi
.
I had come to that finding based on the fact that I was satisfied
that the applicant had
locus
standi
,
that the applicant was indeed owed certain monies by the respondent
and that the respondent was deemed in terms of section 345(1)(a)
of
the Companies Act, nr. 61 of 1973, to be unable to pay its debt. I
had in addition also found that the respondentâs liabilities
in
fact exceeded its assets so that it was in fact commercially
insolvent. The only reason why I had declined to confirm the rule
nisi
,
is the fact that in the exercise of my discretion I was of the view
that it would not be just and equitable to have the company
finally
wound up. I came to that finding on the basis of a number of
reasons as appears from my judgement.
Given
the fact that a Court of Appeal will have the same wide ranging
discretion that I had in considering matters which I was called
upon
to consider as far as the confirmation of the rule
nisi
is concerned, it seems to me that it cannot be said that there is no
reasonable prospects of success on appeal. A Court of Appeal
would
be in a similarly advantaged position as I was to consider all the
factors and circumstances which I had considered and others
which
may emanate from the papers and which I had not dealt with.
Consequently
I grant the applicant leave to appeal to a Full Bench of this
Division. The costs of this application for leave to
appeal will
stand over to be determined by the Court of Appeal.
___________
SA
MAJIEDT
JUDGE
ADVOCATE FOR THE
APPLICANT : Adv CH Botha
ADVOCATE
FOR THE RESPONDENT : Adv G Walters
ATTORNEY FOR THE APPLICANT : AB
Horwitz
ATTORNEY
FOR THE RESPONDENT : Neville Cloete
DATE OF HEARING : 2004-08-11
DATE
OF JUDGEMENT :
2004-08-13