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2024
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[2024] ZAECMKHC 114
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Naxa Trading (Pty) Limited v Voltex (Pty) Limited (Reasons) (2478/23) [2024] ZAECMKHC 114 (22 October 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE
DIVISION, MAKHANDA)
CASE
NO.: 2478/23
In the matter between:
NAXA
TRADING (PTY)
LIMITED
Applicant
And
VOLTEX
(PTY)
LIMITED
Respondent
REASONS FOR THE ORDER
GRANTED ON 14 OCTOBER 2024
Cengani-Mbakaza AJ
Introduction
[1]
By way of a certificate of urgency filed of record, on 14 October
2024,
the applicant approached this court seeking an order that this
matter be enrolled and heard on an urgent basis in accordance with
Uniform Rule 6(12) of the Uniform Rules of Court.
[2]
Paragraph 2 of the certificate of urgency provided as follows:
‘
2.
That the court order granted in Case No 3478 dated 14
th
day
of May 2024, liquidating the company which is the applicant annexed
hereto marked Annexure A, be and is hereby stayed, pending
the
rescission application lodged and set to be heard on the 22
nd
day
of October 2024.’
[3]
In amplification of the application as mentioned above, the applicant
averred that she was only informed of the court order on 22 May 2024.
Thereafter, she approached her instructing attorney and applied
for a
rescission of the court order dated 14 May 2024.
[4]
On 01 October 2024, the applicant’s director was subpoenaed to
attend
to an enquiry under the Insolvency Act 24 of 1936 (the
Insolvency Act) at
Gqeberha Magistrate’s Court. Following her
non-appearance, on or about the 09 October 2024, a warrant for her
arrest was
authorised by the Magistrate’s Court, Gqeberha,
along with Mzolisi Bekezulu (Mr Bekezulu).
[5]
Upon thorough examination of the certificate of urgency, on 14
October
2024, at approximately 12:00, I issued the following
directive:
‘
1.
That, the applicant serves its notice of motion and founding
affidavit to the respondent on or before 14H00 through
the sheriff of this court.
2. That, the
respondent files its answering affidavit on or before 16H00 on 14
October 2024.
3. That, the
applicant files its replying affidavit on 14 October 2024 @ 16h45 (if
any). Matter to be heard at 17:00 on 14
October 2024.’
[6]
Pursuant to the directives, the respondent received the documents as
instructed
and subsequently filed a notice of opposition to the
matter. Shortly after 17:00, the parties’ legal representatives
met
with me in chambers to discuss the future conduct of the case. Mr
Genukile, counsel for the applicant, confirmed his readiness to
proceed with the application. Similarly, Mr Brody, the respondent’s
attorney expressed his preparedness to proceed, stating
that he would
not file an answering affidavit as he deemed it unnecessary, instead
he would rely on the content of the applicant’s
existing
papers. Mr Brody reiterated this position during the court hearing.
[7]
Having carefully considered the papers filed by the applicant and the
oral submissions made by both parties, I granted the following order:
1.
The usual time frames relating to forms and
service be and is hereby dispensed with and as such the matter be
heard as one of urgency
in accordance with Rule 6(12) of the Uniform
Rules of Court.
2.
The court order dated 14 May 2024 together with
warrants of arrest which were authorised on 08 October 2024 be and
are hereby stayed
pending the final determination of the rescission
application to be heard on 22 October 2024.
3.
There shall be no order as to costs.’
[8]
On 16 October 2024, the respondent’s attorney submitted a
formal
request for a written judgment.
The background
facts
[9] For
purposes of clarity, I shall commence by identifying the parties to
this matter followed by a narration of the
relevant facts. Naxa
Trading Pty (Ltd) (Naxa Trading) and Voltex Pty (Ltd) (Voltex) are
separate entities duly registered in terms
of the
Companies Act 71 of
2008
, each possessing unique registration numbers.
[10]
Voltex is a leading supplier of electrical equipment and components
in South Africa operates
as a wholly owned subsidiary of Bidvest
Group Limited, a listed entity on the Johannesburg Stock Exchange.
Voltex conducts business
through various trading styles and divisions
including Atlas Cables, Cabstrat Johannesburg, Phambili interface,
and Technic-Lamp.
[11]
On 18 November 2021, Naxa Trading represented by Ms Ncebakazi
Bekezulu (Ms Bekezulu)
allegedly entered into a credit agreement with
Voltex whereby Voltex would supply goods to Naxa Trading on a credit
basis, as needed.
The credit agreement stipulates that payments would
be made within 30 days of the statement date, subject to variation
only by
written consent.
[12]
Voltex claimed to have fulfilled all its obligations under the sale
agreement, supplying goods
from October 2021 to March 2022. On 23
August 2023, issued a letter to Naxa Trading in terms of section 345
of the Companies Act
61 of 1973(the companies Act). The letter
notified Naxa Trading that it was indebted to Voltex in the sum of
R453.611.05 (Four
Hundred and Fifty-Three Thousand Six Hundred and
Eleven Thousand Rand and Five cents). The service of the notice was
effected via
email and the Sherriff’s return was duly received.
[13]
On 10 October 2023 Voltex approached this court seeking an order to
provisionally wind up Naxa
Trading and that a
rule nisi
be
issued calling upon the persons concerned including Naxa Trading to
show cause why the order should not be made final. The return
date
was 14 November 2023.
[14]
Following the ex parte application, a provisional order was issued.
On 14 May 2024, the interim
order was confirmed and made absolute. On
23 August 2024, Voltex, addressed a letter to Naxa Trading’s
director Ms Bekezulu
notifying her of the requirement to attend the
first and second meeting of the creditors, as prescribed by Section
414 of the Companies
Act 61 of 1973 (the Companies Act) and
Section
64
of the
Insolvency Act. On
11 September 2024 before the Master of
the High Court in Makhanda, Mr and Ms Bekezulu failed to attend.
Consequently, on 07 October
2024, a second letter was addressed to Mr
Bekezulu informing him of his non-attendance and notifying him of the
next meeting. The
subsequent meeting was set for 09 October 2024 in
the Magistrate’s Court at Gqeberha before Magistrate J
Herselman.
[15]
Despite notification, neither Ms nor Mr Bekezulu attended the meeting
scheduled for 09 October
2024. Consequently, the Magistrate
authorised warrants for their arrest, pursuant to their failure to
appear.
Reasons
for the order granted
Urgency
[16]
Uniform Rule 6(12) of the Uniform Rules of Court requires an
applicant to explicitly set forth
the circumstances which render the
matter urgent. The applicant must show that it will not be afforded
substantial redress in due
course.
[1]
The right to freedom of movement and not to be detained arbitrarily
without a just cause is guaranteed by the Constitution of the
Republic of South Africa. The right to personal freedom is a
sacrosanct entitlement that has consistently been vigilantly
protected
by our courts and zealously upheld by our law, which views
any infringement thereof as a grave violation.
[17]
In a constitutional democracy, personal freedom is paramount.
Therefore, any interference with
an individual’s liberty can
only occur under strictly defined circumstances, subject to rigorous
safeguards and limitations.
In considering the balance between
dispensing with formalities and ensuring a fair hearing, I
acknowledged the need to weigh whether
Voltex could adequately
present its case within the given time frame. This delicate balance
was crucial in preventing prejudice
to Voltex, maintaining the
integrity of the administration of justice, and evaluating the
strength of Naxa Trading’s case.
[18]
Despite the condensed timeline in urgent applications, where the
respondents are not obligated
to file answering affidavits, Voltex’s
attorney had the option to seek a brief indulgence for submitting an
answering affidavit.
His decision not to do so despite the court’s
engagement, resulted in the forfeiture of the opportunity to dispute
material
facts, advance defences or contest Naxa Trading’s
application to the urgency of the claim.
[19]
Further to my engagement with Volte’s attorney regarding the
absence of the answering affidavit,
he opted to raise his objections
orally at the bar, thereby relinquished the chance to formally
develop his case in writing. In
the absence of opposing evidence,
Naxa Trading’s version of events remained uncontroverted and
was accordingly accepted by
the court. Exercising the discretion and
considering the exigencies of the situation, the court relaxed the
formal rules of procedure
allowing for flexibility in the interests
of justice. The outstanding warrants of arrest, stemming from Naxa
Trading directors’
alleged failure to settle the disputed debt,
presented a significant and immediate threat to their personal
freedom. Although I
initially questioned the validity of the warrants
of arrest, on face value, further examination of the documents
clarified their
legitimacy.
The merits of the
urgent application
[20]
Pursuant to Uniform Rule 45A of the Uniform Rules of Court, the court
possesses a discretionary
authority to suspend the execution of any
order for a period deemed appropriate.
[2]
In
the matter of
Stoffberg
NO and Another v Capital Harvest (Pty) Ltd
[3]
Binnas-Ward
J stated the following regarding Rule 45A:
‘
[26]
The broad and unrestricting wording of Rule 45 A suggests that it was
intended to be a restatement of the court’s common
law
discretionary power. The particular power is an instance of the
court’s authority to regulate its own process. Being
a judicial
power, it falls to be exercised judicially.
Its
exercise will therefore be fact specific and the guiding principle
will be that execution will be suspended where real and substantial
justice requires that. ‘Real and substantial justice’ is
a concept that defies precise definition, rather like ‘good
cause ‘or substantial reason’. It is for the court on the
facts of each given case whether consideration of real and
substantial justice is sufficiently engaged to warrant suspending the
execution of a judgment; and, if they are, on what terms
any
suspension it might be persuaded to allow should be granted.’
[accentuation
added]
[21]
During the parties’ submissions, it was common cause that a
rescission application was
to be heard on 22 October 2024 which was a
period of 7- calendar days from the date of the hearing of the urgent
application. In
her papers, Ms Bekezulu relied on Uniform Rule 42(1)
(a) seeking to rescind a final order granted on 14 May 2024, claiming
it was
erroneously granted. She submitted that non-service of the
main application and interim order precluded her from exercising her
right to oppose the final order thereby prejudicing her interests.
[22]
Further to the rescission application, Ms Bekezulu averred that she
never entered
into an agreement with Voltex and is not indebted to
the company. Moreover, Naxa Trading, which is a plant hiring
business, has
no connection to Voltex, an electricity equipment
company. She raised the questions about the authenticity of the
signature at
page 22 of the agreement. Given these findings, she laid
a criminal charge of fraud at Ngangelizwe Police Station, Mthatha.
Briefly,
Ms Bekezulu raised Voltex's lack of proper verification of
the applicant’s identity, unauthorized signature, and negligent
conduct of Voltex in particular Voltex’s actions or inactions
which led to the harm against her.
[23]
In his argument, Voltex’s attorney contended that Rule 42 (1)
(a) has no application
to the rescission application. He referenced
to two authorities.
[4]
He
further argued that for the rescission application, Naxa Trading
should have relied on Section 354 (1) of the Companies Act.
[5]
[24]
I thoroughly considered the submissions presented by Voltex’s
attorney in his
argument. In this urgent application the underlying
cause stems from the disputed contract between Voltex and Naxa
Trading. It
is not for this court to decide on the merits of the
on-going dispute between the two parties. Upon examining the
application,
I refrained from deciding on the rescission
application’s competency. The papers filed suggest that Naxa
Trading aims to
rescind the winding up order due to purported
irregularities and errors. If the underlying issues are not resolved
irreparably
harm may inevitably occur. Therefore, in this situation,
Voltex will suffer no prejudice if the final order granted on 14 May
2024
is stayed pending the determination of the rescission
application, considering the fact that the hearing is just seven days
away.
This view is supported by the principle that Naxa Trading and
its directors will suffer injustice if the order were to be allowed
to operate despite the rescission application.
[25]
Furthermore, given Voltex’s awareness of the rescission
application, I found
no justifiable reason warranting the
infringement upon the liberties of Naxa Trading’s directors.
After careful consideration,
I concluded that Naxa Trading’s
application should succeed. On the issue of costs Naxa Trading’s
counsel showed receptiveness
to the proposal that I make ‘no
order as to costs’, thereby precluding any cost implications
for either party.
Conclusion
[26] In the result, I
granted the order as reflected in paragraph 7 of this judgment.
N CENGANI-MBAKAZA
ACTING JUDGE OF THE
HIGH COURT OF SOUTH AFRICA
APPEARANCES
:
Counsel for the
Applicant
:
Adv S.
Genukile
Instructed
by
:
Makangela Mntunga Inc.
50
Blakeway Road
Mthatha
c/o
Whitesides Attorneys
53
African Street
Makhanda
Attorney for the
Respondent :
Mr
B. Brody
:
Wheeldon Rushmere & Cole
119
High Street2 Allen Street
MAKHANDA
(Mr Brody/Kulani/s25981)
Date
Heard
: 14 October
2024
Date
Delivered
: 22 October
2024
[1]
Uniform Rule 6(12) of
the Uniform Rules of Court provides that:
(a)
In urgent applications the court or a judge may dispense with the
forms and service provided for in these rules and may dispose of
such matter at such time and place and in such manner and in
accordance with such procedure (which shall as far as practicable be
in terms of these rules) as it deems fit.
(b)
In every affidavit filed in support of any application under para
(a) of this subrule, the applicant must set forth explicitly the
circumstances which is
[sic]
averred render
[sic
] that
matter urgent urgent and the reasons why the applicant claims that
applicant could not be afforded substantial redress
at the hearing
in due course. See also Rule 12 (a) (ii) of the Joint Rules of
Practice for the High Courts of the Eastern Cape.
[2]
Uniform Rule 45 A
provides as follows: ‘45A The court may, on application,
suspend the operation and execution of any order
for such period as
it may deem fit: Provided that in the case of appeal, such
suspension is in compliance with section 18 of
the Act.
[3]
(2130/2021)
[2021]
ZAWCHC 37
(2 March 2021) (Stoffberg). In Stoffberg, Binnas-Ward J
also dealt with the principles for a grant of a stay in execution as
follows: ‘[15] ……. It would appear that Davis J
proceeded on an acceptance that ‘the basic principles
for a
grant of a stay in execution were expressed in the judgment of
Waglay J in
Gois
t/a Shakespear’s Pub v Van Zyl and Others
2011 (1) SA 148(LC)
at paragraph 37, where
the learned judge held: The general principles for the granting of a
stay in execution may therefore be
summarised as follows:
(a)
A court will grant a stay of execution where real and substantial
justices require or where injustice would otherwise result.
(b)
The court will be guided by considering the factors usually
applicable
to interim interdicts, except where the applicant is not
asserting a right, but attempting to avert injustice.
(c)
The court must be satisfied that:
(i)
the applicant has a well-grounded apprehension that the execution
is
taking place at the instance of the respondent(s); and
(ii)
Irreparable harm will result if execution is not stayed and the
applicant ultimately succeeds in establishing a clear right.
(d)
Irreparable harm will invariably result if there is a possibility
that the underlying causa may ultimately be removed, i.e. where the
underlying causa is the subject matter of the on-going dispute
between the parties.
(e)
The court is not concerned with the merits of underlying dispute-
the sole enquiry is simple whether the causa is in dispute.
[4]
Mokasule N.O V Botha N.O
and Others (M283/20)
[2023] ZANWHC 54
(17 May 2023); Blue Bulls
Company (Pty) Ltd v mega Burst Oils and Fuels (Pty) Ltd (2021/1879)
[2022] ZAGPJHC 314 (21 April 2022)
[5]
This
Section provides as follows:
‘
The
court may at any time after the commencement of the winding- up, on
the application of any liquidator, creditor or member,
and on proof
to the satisfaction of the Court that all proceedings in relation to
the winding- up ought to be stayed or set aside,
make an order
staying or setting aside the proceedings or for the continuance of
any voluntary winding-upon such terms and conditions
as the Court
may deem fit.’