IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
CASE NO: A211/23
In the matter between:
JEAN-FRANCOIS ERIC CHRISTIAN DEGUELDRE Appellant
And
THE COMPANIES AND INTELLECTUAL PROPERTY Respondent
COMMISSION
Bench: Allie J, Henney J et Lekhuleni J
Heard: 22 July 2024
Delivered: 26 August 2024
This judgment was handed down electronically by circulation to the parties'
representatives via email. The date and time for hand -down is deemed to be 26
August 2024 at 13h30.
JUDGMENT
____________________________________________________________________
HENNEY, J
Introduction:
[1] The appellant instituted an application in terms of section 83 (4) of the
Companies Act, 71 of 2008 (“the Act”), against the respondent, the Companies and
Intellectual Property Commission (“the CIPC”), for the reregistration of Time is Money
Finance CC , a close corporation (“the close corporation”) of which he is the sole
member.
[2] The relief which he sought was, firstly , to declare the di ssolution of the close
corporation to be void; secondly an order directing that the respondent restore the
close corporation’s name to the register of companies and thirdly an order declaring
that the assets of the corporation to be no longer bona vacantia and revested in the
close corporation in terms of the provisions of section 83 of the new Companies Act .
His application was dismissed with costs by the court a quo. This is an appeal against
that decision with the leave of the court a quo. I shall briefl y set out the background
facts underpinning this appeal.
Background:
[3] The close corporation was deregistered on 26 August 2016 by reason of its
failure to submit annual returns. The respondent didn’t oppose the application. On
Friday, 6 September 2019 , Thulare AJ (as he then was), granted a rule nisi ,
returnable on 7 October 2019 as follows:
3.1 that all interested parties show cause as to why:
3.1.1 the dissolution of Time is Money Finance CC, Regis tration
No.2007/112691/23 should not be declared void in t erms of section 83
(4) of the Companies Act 71 of 2008;
3.1.2 Respondent should not be directed to restore Time is Money Finance
CC’s name to the register of Companies;
3.1.3 the assets of Time is Money Finance CC should not be declared bona
vacantia and for such assets to vest in Time is Money Finance CC.
[4] Thereafter, and before the return date of the rule nisi , the appellant’s legal
representatives served copies of the founding papers and a copy of the rule nisi on
Mr. Renenthren Padayachee (“the intervening party”), the attorney of record for some
of the purported foreign creditors, which attempted to prove claims against the
insolvent estate of one , Paul Matthew Machin, a British citizen, who conducte d
business in this country (“the insolvent estate of Machin”). Subsequently, the
intervening party in his own name, filed an answering affidavit in which the relief
sought by the appellant was opposed.
[5] In the appellant’s reply thereto, he made it clear that the intervening party holds
no interest in the out come of the appellant’s application to have the close corporation
restored into business such as to permit him to oppose the application.
[6] The close corporation is a proven creditor in the insolvent estate of Machin who
was sequestrated as far back as 2013. The intervening party is a practising attorney a
creditor in the insolvent estate and is also acting for the purported creditors, who
allegedly have claims against insolvent estate of Machin. These creditors attempted
to prove claims against the insolvent estate of Machin, and their claims were all
disallowed by the presiding officer, at the Verulam Magistrate’s Court, where the
meeting of creditors of the insolvent estate of Machin was held.
[7] The claims of th ose creditors all of whom are peregrini of our South African
Courts were disallowed because none of them complied with the rules regarding
commissioning of affidavits that finds application in our courts, and which makes it
obligatory for any legal document when commissioned out side of the bo rders of this
country, to be signed by a notary public.
[8] Subsequent to the presiding officer disallowing the claims of these creditors,
the intervening party on behalf of these creditors filed a n application in the KwaZulu -
Natal Division of the High Court in which he sought to have the decision of the
presiding officer disallowing these claims, be reviewed and set aside.
[9] In answer to this application, the creditors of the insolvent estate i ncluding the
close corporation filed an application in ter ms of rule 47 demanding of the said
peregrine creditors to furnish the close corporation and other creditors , with security
for costs. On 5 January 2016 , the court granted an order in favour of the close
corporation and the other creditors. The intervening party on behalf of the said
creditors filed an application for leave to appeal the decision which was dismissed
with costs.
[10] The intervening party thereafter applied to the SCA for leave to ap peal, which
application was also dismissed with costs. As a result of this , the registrar of the
Pietermaritzburg Division of the High Court then made a ruling to the effect that the
peregrine creditors are to furnish the close corporation with security f or costs in the
amount of R200,000. On 02 June 2017, after the order of security for costs was
granted, the six peregrine creditors filed a notice of withdrawal of their application to
review the presiding officer’s decision with the appropriate tender of costs.
[11] At that stage the review application had bee n pending for more than 5 years
and because of it not being brought to finalisation, the winding up of the insolvent
estate could also not be proceeded with.
[12] As a result of the failure of the intervening party, as attorney, to proceed with
the review application, the appellant on behalf of the close corporation set the matter
down for the purposes of it being dismissed.
[13] The intervening party responded to the review application being set d own for
hearing with an application for the close corporat ion to furnish him with security for
costs and raised the issue of the close corporation being deregistered. It was only
then that the appellant realised that the close corporation had been deregist ered in
the last 14 days prior to launching of the application.
[14] The appellant alleges that the only reason why the intervening party raised this
was because he was aware that if he raised this successfully, the close corporation
would no longer be in any position to oppose the fraudulent claims of those peregrine
which he was purportedly representing, being proven.
[15] According to the appellant, the intervening party would do anything possible for
the close corporation not to be restored back into business. The appellant admitted
that the peregrine creditors filed a notice of withdrawal of their application but
contended that the Intervening Party did not withdraw his application. According to the
appellant, the intervening party, wanted to proceed with a baseless and ill -founded
application. As a result of this , the appellant proceeded with an application for the
reregistration of close corporation in the court a quo.
[16] The appellant contends that this was a bona fide application for the close
corporation’s deregistration to be declared void and for it to be restored back into
business, as a result of a bona fide mistake made by the appellant , in that, it was
deregistered pursuant to section 82 of the new Companies Act.
[17] The close corporat ion’s claim against the insolvent estate of Machin amounts
to R1,273,507,03 (plus interest) arising from a suretyship agreement in which Machin
accepted liability for the full outstanding amount on behalf of Upfront Investments
(Pty) Ltd who received a loa n from the Close Corporation to develop a property in the
vicinity of Malmesbury. The Close Corporation also has a claim against other parties
in a different matter for the total amount of R583 100,00.
[18] In respect of the last-mentioned amount, an order was granted by this court in
favour of the Close Corporation on 6 October 2014, by Engers AJ against three
defendants, who seems to be a firm of attorneys (Van Der Hoven Van Zyl Attorneys)
and two attorneys attached to that firm.
[19] The applicant in the court a quo alleged that in the event of this application not
being successful, th ose assets would be forfeited to the state as bona vacantia. The
appellant, therefore, as sole member of the close corporation would suffer enormously
if it were not restored back into business, and on the other hand, the inter vening party
would not suffer any prejudice at all in the event of it being restored.
[20] The CIPC on the other hand , didn’t oppose the application, but in response to
the rule nisi, having been s erved on it , it apparently erroneously, restored the close
corporation back into business.
[21] On 22 April 2021 , the matter served before Dolamo J, who considered the
application as moot due to the respondent having already restored the close
corporation back into business. The matter was then postponed the 26 October 2021
to afford the intervening party the opportunity to apply to have the respondent’s
restoration of the close corporation’s registration, set aside.
[22] Whilst the intervening party filed an application in the North Gauteng Division of
the High Court for the restoration of the close corporation ’s registration to be set
aside, he didn’t proceeded with such an application. Eventually on 24 February 2022,
the matter was set down for hearing before Le Roux AJ w here the court had to
consider the following:
1) the intervening party’s application to intervene in the main application.
2) the intervening party’s application to have proceeding s stayed pending the
outcome of his application in the North Gauteng Division.
3) the main application to have the close corporation restored back into business.
[23] The judge a quo dismissed the intervening party’s application to intervene in
the main application and struck from the roll his application to have the pro ceedings
stayed pending the outcome of the application fil ed in the North Gauteng High Court.
The court a quo also dismissed the appellant’s application to have the close
corporation restored back into business with costs, holding that the court did not h ave
jurisdiction to do so.
[24] On 5 September 2023, the court considered both the appellant’s application for
leave to appeal as well as the intervening party’s application for leave to appeal.
Leave was granted to both parties.
[25] Prior to the hearin g of the appeal on 22 July 2024, the intervening party fai led
to proceed with his appeal. The appeal has subsequently lapsed, because the
intervening party failed to deliver a notice of appeal within 20 days after the date upon
which leave to appeal was gr anted or within such longer period as might on good
cause shown be permitted in terms of the provision of rule 49(2). However, at the
eleventh hour on the morning of the hearing of the appeal on 22 July 2024, the
intervening party filed an application for condonation for the late delivery of the notice
of appeal and heads of argument.
[26] This application was heard during the hearing and was subsequently dismissed
with costs on an attorney and client scale. This being the case, the only case to be
considered in this appeal is that of the appellant in the main application.
This appeal:
[27] The appeal falls to be decided on two issues. The first is whether the non -
joinder of the Minister of Finance and the Department of Public Works is fatal to the
case of the appellant. The second issue to be considered in th is appeal is , whether
the court a quo was correct in dismissing the application because it found that it did
not have the necessary jurisdiction to hear the application in this court.
[28] Before dealing with these two issues, it would be appropriate to have regard to
the provisions of section 83 (4) of the Act which regulates the position of a company
after it had been dissolved. The section states that “… (4) At any time after a
company has been dissolved-
(a) the liquidator of the company, or other person w ith an interest in the company,
may apply to a court for an order declaring the dissolution to have been void, or
any other order that is just and equitable in the circumstances; and
(b) if the court declares the dissolution to have been void, any proceedings may be
taken against the company as might have been taken if the company had not
been dissolved.”
[29] In terms section 26 of the Close Corporations Act 69 of 1984, the provisions of
section 83 of the Act, is applicable with respect to the deregistration of close
corporations. It further makes it possible for a company that has been dissolved or as
in this case a close corporation that has been dissolved , which resulted in its name
being removed fro m the company’s register to be restored back into business by an
order of court.
[30] The liquidator of the company or in this case , a close corporation or any other
person, in the position of the appellant with an interest in the company or close
corporation may apply for an order declaring the dissolution to have been void.
[31] In the case where the court declares the dissolution to be void , any
proceedings may be taken against the company or in this case , the close corporation,
as if had not been dis solved. As was held in Absa Bank v Companies and Intellectual
Property Commission of South Africa and Others1 (“Absa Bank WCC”), in a case such
as this where a company’s name has been removed from the register for failure to
submit annual returns, an interested party may apply to the CIPC for the restoration in
terms of section 82(4), to the CIPC directly or for an order of court in terms of section
83(4) of the Act to have the company’s name restored to the register. No case has
been made out in these p roceedings, to prevent have the close corporation’s name
restored being to the register, even though the court a quo dismissed the application
for restoration on different grounds i.e. because the court was of the view that it did
not have the necessary jurisdiction.
The Joinder of the Minister of Finance
[32] Regarding the first issue for consideration , the appellant contends that even
though it initially stated in its heads of argument that the state should be joined
through the Minister of Finance and t he Department of Public Works 2 who are
necessary parties unless it waive s its right to be joined and the Appellant has
undertaken to be bound by the court decision , he now contends that he reconsidered
his position because since 1 May 2011 , when the Compan ies Act of 2008 came into
operation, the state is no longer a necessary party any more in an application such as
this. On behalf of Appellant, it was argued, that therefore, there is no need to join the
state through the Minister of Finance in this case and similar cases.
[33] In this regard , Appellant’s counsel relies on two decisions of this division the
1 2013(4) SA 194 (WCC) at para 52.
2 It seems that it is widely accepted that the State should be represented by the Minister of Finance or
the Treasury.
first one being the Absa Bank case which was referred to earlier, where Rogers J
stated at paragraph 47:
“The new Act is a complete reworking of corpor ate law… The organisation of
the new Act and the arrangement of its provisions are completely different.”
[34] In a follow up note after the hearing of the appeal , the judges raised certain
queries about the correctness of the appellant’s stance on the absence of the joinder
of the Minister of Finance , the appellant in support of his contention refers to the
following quotation of Brand JA in Newlands Surgical Clinic v Peninsula Eye Clinic 3 at
para [24], … “the indication of a different intent that usually follows from a change of
wording in amending legislation, is diluted by the fact that the new Act is not merely
an amendment to the 1973 Act. It is a complete reinvention of our corporate law. The
organisation and arrangement of its provisions are complet ely different, particularly
with regard to deregistration and reinstatement.”
[35] I do not agree that these words justify an interpretation which the appellant
seeks, which is that the requirement of joinder in an application like th is, has been
jettisoned by the new Companies Act. Th ose words were uttered in the context of
whether the reinstatement of a company ha s any retrospective effect at all as
provided for in the 1973 Act, whereas the new Companies Act of 2008, did not
specifically make provision for retrospective effect once a company has been re -
registered. The whole of paragraph [24] of that judgment has to be considered in its
context.
[36] It actually contradicts what the appellant wants to show in the broader context
of the interpretation of the new Act, where Brand JA, in the very next sentence of that
section of the paragraph quoted says … “In this light, different wording used in a
completely different new scheme can hardly be construed, in itself, as complete
reversal of intent.”
Sections 73(6) & (6A) of the Companies Act, 61 of 1973, provided expressly that
National Treasury should be cited in applications for reinstatement of registration of
Companies.
3 2012 (4) SA 484 (WCC).
[37] The appellant’s counsel further referred to the decision of Peninsula Eye Clinic
(Pty) Ltd v Newlands Surgical Clinic (Pty) and others Ltd 4 (the PEC “case”) where
Binns- Ward J at paragraph 12 stated that it was a standard requirement for the
Minister of Finance to be joined in any application to court for the reversal of the
dissolution of a company by reregistration. He further state d “…there is a curious
omission in the current statutory scheme of any requirement for notice to be given to
the Treasury of any application for reinstatement to the register. The interests of the
Treasury and other potentially interested parties (…) Presumably fall to be addressed
by way of conditions to be imposed in respect of such applications in terms of
regulation 40(7) of the Companies Act regulations.”
[38] The appellant’s counsel contends that based on those remarks made by Binns-
Ward J , neither the Minister of Finance nor any other organ of state needed to be
joined and the appellant is therefore properly before this court.
[39] I do not agree with the appellant’s submission. It seems that in th e PEC case
the court dealt with an application for declara tory relief in which the court was
requested to issue an order that the respondent in that case (the NSC) had indeed
been reregistered administratively by the CIPC in terms of section 82(4) of the new
Companies Act by a shareholder which was the PEC in that case.
[40] It further seems that for the purpose of the declaratory relief in that case , the
Minister of Finance was joined because of the well -established principle in our law
that the propert y of a dissolved company goes as bona vacantia to the stat e. In the
very same paragraph 12, Binns -Ward J further states that “ it became a standard
requirement that the Minister of Finance responsible for the Treasury, be joined in an
application for reversal of a dissolution of a company by re-registration.”
[41] The appellant is clearly wrong in their understanding of what the learned judge
stated regarding the requirement that the state in the form of the Minister of Finance,
or the Treasury should be j oined in proceedings in terms of section 83(4) of the Act.
What the learned judge states is that it seems that in the case of an administrative
application in terms of section 82(4) made directly to the CIPC there is a curio us
4 2012 (4) SA 484
omission in terms of the new Companies Act that notice should be given to the
Minister of Finance and the Treasury by a party seeking to reregister an already de -
registered company.
[42] The learned judge did not refer to an application in terms of section 83(4) of the
Act for re -registration. The court states… “ The Minister would therefore have
essentially the same interest in the declaratory relief sought by PEC, more especially
that in terms of paragraph 1.2 of the notice of motion. 5 He would have the same
interest in the administr ative application submitted by PEC to the Commission on
Form CoR 40.5, but there is no indication that any notice was given to the third
respondent, or indeed to any third parties.”
[43] After the judgment in Peninsula Eye Clinic was handed down on 2 May 2012,
this omission was rectified by the CIPC with the iss uing of CIPC Practice Note 6 of
2012 on 23 October 2012 wherein the requirements for an application for
administrative reinstatement as from 1 November 201 2 were set out. One of these
requirements that were included in item (4) deals with notice that must be given to the
state through the Treasury and the Department of Public Works . It states that …
“Letters from National Treasury and the Department of Public Works, indicating that
such departments h ave no objection to the re -instatement, if it has immovabl e
property.”
Under item (6) there is a further requirement that “… Sufficient documentary proof
indicating that the company or close corporation was in business or that it had any
outstanding assets or liabilities (e.g. property, intellectual property rights) at the time
of deregistration.”
[44] This is a clear indication that the requirement that notice should be given to the
Treasury in circumstances where there is an application for the admini strative
reinstatement in terms of section 82(4) of the new Companies Act as well as in an
application for reinstatement or reregistration by the court in terms of section 83(4) of
the Act remains extant.
5 paragraph 1.2 of the notice of motion in that case was … “That (sic) the assets of the first respondent
which vested in first respondent prior to it being deregistered, have been re -vested in the first
respondent with effect from the date upon which the respondent was deregistered .
[45] Whilst I agree with the sentiments expressed by the appellant ’s counsel that
the new Act brought about a change in the legislative scheme of our corporate law at
variance with the 1973 Act, as pointed out in the various judgments he referred to , in
my view , it did not usher in a change concerning t he property or assets of the
deregistered company or close corporation being automatically declared bona
vacantia, thereby attracting the interest of National Treasury as a party with a direct
ad substantial interest.
[46] To my mind, the legal position regarding joinder , of the state through the
Minister of Finance has not changed. This view is also shared by Henochsberg6, who
ironically uses the judgment of Binns -Ward J at paragraph 12 in the PEC case as
authority, … “A type of case in which the application would be made is where property
which was owned by th e company at the date of its deregistration requires to be
administered. As, however, the property is owned by the State, it is necessary to seek
not only the restoration of the registration but also a declaration that the property is no
longer bona vacantia. In such a case the State is accordingly a necessary party and
must be joined in the proceedings unless it has not only waived its right to be joined
but has undertaken to be bound by the Court’s decision (Ex Parte Sengol Investments
(Pty) Ltd 1982 (3) SA 474 (T) at 478; and see Van der Ploeg v Vivier 1966 (3) SA 218
(SWA)).
“The mere fact that the [relevant Department of State and its officers] have knowledge
of [the] proceedings and have intimat ed that they do not intend to oppose, does not
make a judgment binding on them as res iudicata, nor can such non-intervention after
receipt of notice of [the] application short of citation necessarily be treated as a
representation that the State will subm it to and undertakes to be bound by [the]
judgment” (Sengol case supra at 478 per Van Dijkhorst J). The State should be joined
through the Minister of the appropriate Department (the Department of Finance
(National Treasury) and the Department of Public W orks) (See Peninsula Eye
Clinic (Pty) Ltd v Newlands Surgical Clinic (Pty) Ltd 2012 (4) SA 484 (WCC) para 12;
confirmed on appeal: 2015 (4) SA 34 (SCA); Missouri Trading CC and Another v
ABSA Bank Ltd and Others 2014 (4) SA 55 (KZD) para 6; Rainbow Diamond s (Edms)
6 Henochsberg on the Companies Act 71 of 2008: Online update at [332 (26); (27); (28)] Service Issue
34- May 2024.
Bpk v Suid-Afrikaanse Nasionale Lewensassuransiemaatskappy 1984 (3) SA 1 (A) at
14; G Walker Engineering CC t/a Atlantic Steam Services v First Garment Rental
(Pty) Ltd (Cape) [2011] JOL 27411 (WCC), 2011 (5) SA 14 (WCC) para 3. See eg
Practice No te 6 of 2012 in respect of notification requirements for administrative
reinstatement under s 82 (4)). In practice the State ordinarily does not oppose the
making of the declaration, its policy being that it does not seek to enrich itself at the
expense of those interested in a deregistered company (ibid). Where the declaration
sought relates to land, notice of the application should be given to the relevant
Registrar of Deeds. In practice notice is also given to the relevant Receiver of
Revenue. In all cas es it is necessary to give notice of the application to the
Companies and Intellectual Property Commission unless, of course, it is the applicant.
The State as a necessary party in the application that should be joined may be
dispensed with, however, where the State waives its rights and undertakes to be
bound by the order (ibid); see eg Ex Parte Liquidators Lime Products (Pty) Ltd 1942
CPD 402; Ex Parte White NO and Smit NO 1945 CPD 414. In Ex Parte PJ Yelland &
Co (Pty) Ltd 1934 NPD 158 it appears that th e Court dispensed with notice to the
State: but this was on the basis of a conclusion that the property could not be
regarded as bona vacantia.” (own emphasis)
[47] The non -joinder of the Minister of Finance and the Treasury is therefore an
essential requ irement and such non joinder in my view was fatal to the a ppellant’s
case. Especially in the light of the admission by the appellant that the assets in the
form of the claim against the firm of attorneys and the claim in the insolvent estate of
Machin became bona vacantia. Absent that, this court is unable to find that the relief
the applicant sought in the court a quo in terms of section 83(4) of the new Act should
have been granted as set out in paragraph 2 of the Notice of Motion.
[48] The appellant in his further note at the request of the court submitted tha t
should the court not accept his arguments with regards to whether there should have
been a joinder, he be granted leave to serve the papers on the Minister of Finance at
this stage. Such a course of action in my view would be appropriate in these
proceedings.
Whether the court a quo had jurisdiction to adjudicate this matter:
[49] I shall now deal with the second issue relating to the question whether the
court a quo had the necessary jurisdicti on to deal with this matter. As stated earlier ,
this was the basis upon which the application was dismissed.
[50] The court a quo gave the following as the reason s for its decision , firstly, that
the CIPC has its offices in Pretoria Gauteng which is out side of the court’s area of
jurisdiction. Secondly, that due to the close corporation’s removal from the register of
companies and its consequent dissolution, it ceased to exist at the time when the
proceedings, were instituted and even if the dissolution of the close corporation is
declared void and it has retro spective effect from the date of its deregistration , it still
cannot cloth the court with jurisdiction. For th at same reason, the court a quo found
that at the time of instituting the a pplication, the court was not clothed with the
necessary jurisdiction and in addition , the close corporation is not a party to the
proceedings. Thirdly, the court was unable to find that the parties effectively agreed to
the jurisdiction of this court even by way of t he intervening party agreeing thereto by
admitting the all egations in concerning jurisdiction contained in the appellant’s
(applicant a quo’s) founding affidavit.
Such admission the court a quo found, cannot confer th e court with necessary
jurisdiction to adjudicate the matter.
[51] The appellant’s counsel in his heads of argument submits that the court a quo
erred in its finding that when an application in terms of section 83 (4) of the Act was
instituted that this court was not vested with the necessar y jurisdiction. Secondly, that
it erred in finding that be cause of this court not being vested with the necessary
jurisdiction the main application should be dismissed with costs. Lastly, the appellant
in his amended notice of appeal contended that the co urt a quo erred in not finding
that the CIPC tacitly consented to the jurisdiction of this court in the main application.
[52] This Division of the High Court has always dealt with applications of this nature
even though the offices of the CIPC is situated in Sunnyside Pretoria, Gauteng . The
jurisdiction of the High Court in its most basic form is regulated by section 21 of the
Superior Courts Act7 (“the Superior Courts Act”). Of particular importance in this case,
is the provisions of section 21 (1) and (2) of the Superior Courts Act. In terms of ss(1)
… “A division has jurisdiction over all persons residing or being in, and in relation to all
causes arising and all offences triable within, its area of jurisdiction and all other
matters which it may according to the law take cognizance…”
(2) “A Division also h as jurisdiction over any person residing or being outside its area
of jurisdiction who is joined as a party to any cause in relation to which such court has
jurisdiction or who in terms of a third -party notice becomes a party to such a cause, if
the said person resides or is within the area of jurisdiction of any other Division.”
[53] It seems however that the jurisdiction of a Superior Court is not only
determined by these provisions. In this regard , it has been accepted that these
provisions “materially corresponds with the position under section 19(1) of the
Supreme Court Act 59 of 1959 prior to the repeal of this Act ”. In this regard Van
Loggerenberg8 states that ‘as was the case with s19 of the n ow repealed Supreme
Court Act 59 of 1959, the section does not contain a ‘codification ‘of the jurisdiction of
the High Court.’
Thus, in Veneta Mineraria Spa v Caroline Collleries (Pty) Ltd 9 (“Veneta Mineraria”) it
was stated that … “In view of the indefi nite wording of s 19 of the Act and it
predecessors, no do ubt deliberately so couched because the intention of the
legislature obviously was to interfere with the common law as little as possible,
recourse must be had to the principles of the common law to ascertain competency
each of the Supreme Court’s in the Republic of South Africa possesses to effectively
adjudicate and pronounce upon a matter brought before it and heard by it. In the
course of time it seems that, as our law on jurisdiction developed, it was also
influenced to a minor extent that the principl es of the private international law
applicable in other legal systems.”
[54] The Appellate Division (as it then was) went on to state 10 that there is a
distinction between the so -called grounds of j urisdiction by virtue of which a court
7 10 of 2013
8 In Erasmus: Superior Court Practice (3rd Ed) at D-192- Service 2023
9 1987(4) SA 883 (AD) at 886 H-J
10 At 887
would normally have ipso jure jurisdiction and jurisdiction by virtue of which
jurisdiction is conferred on a court. Where the court would normally have ipso jure
jurisdiction, these are threefold, firstly by virtue o f the defendant’s domicile being in
that court’s jurisdiction, secondly, by virtue of the contract having been entered into in
the area of the court’s jurisdiction or having been performed in the area of the court’s
jurisdiction. Lastly, by virtue of the s ubject matter in an action in rem being situated in
the court’s jurisdiction. Other cases where jurisdiction is conferred upon a court , are
where there is an order of attachment of goods or arrest of a person to found
jurisdiction. Finally, another circumstance in which jurisdiction is conferred, is where a
party consents to the jurisdiction of a court.
[55] The legal position with regards to whether a court had jurisdiction is that
jurisdiction is not merely established by virtue of the parties being present within in the
geographical jurisdiction o f the Court . Processes and judgments of a High Court can
be effectively executed by the Sheriff in another division of the High Court and that will
satisfy the doctrine of effectiveness, but such effectiveness m ay be one factor to be
taken into account with other facto rs, in considering whether some other common law
ratio jurisdictiones do exist for conferring jurisdiction in respect of particular
proceedings.
[56] In coming back to this case, it seems that the main reason why the court a quo
found that it did not have jurisdiction was because of the fact that the CIPC, was
situated in Gauteng and not the Western Cape and consequently this court had no
jurisdiction. A further reason the court gave as to why it l acked jurisdiction was that
the close corporation was not a party to these proceedings. The court a quo’s
reasoning in this regard seems to be flawed because it conflates locus standi to
institute proceedings, with jurisdiction. This cannot be a sustainable reason for a court
not to have jurisdiction to hear an application such as th e one considered a quo. In
any event, if that was the reason for finding that the court does not have jurisdiction, it
seems that the new Companies Act permits a liquidator or an interested party such as
the appellant, as a member of the close corporation to bring such an application in the
absence of the close corporation . For this reason alone, the court a quo’s finding that
it lacked jurisdiction, cannot be sustained.
[57] I will, however, proceed to deal with further reasons why I say that the court a
quo was wrong to hold that it lacked jurisdiction be cause the CIPC, is not situated in
this court’s area of jurisdiction, in what follows. The nature of the relief in these
proceedings is that the appellant in terms of the provisions of section 83 (4) of the
new Companies Act , seeks to have the dissolution declared void and that it be
reregistered as a close corporation.
[58] Our courts have given the wide and purposive interp retation to the words “ in
relation to all causes arising ”, not only to include ‘causes of action arising’, but ‘legal
proceedings duly arising’, which means proceedings in which the court has jurisdiction
under the common law. This resulted in our courts through the years interpreting the
issue of jurisdiction in terms of section 21 of the Superior Courts Act with reference to
the common law or any relevant statute. According to Van Loggerenberg ,11 in such a
determination, regard must, therefore, be had to t he jurisdictional connecting factors
or rationes jurisdictiones as recognised by the common law. As stated by the
erstwhile Appellate Division in the matter of Estate Agents Board v Lek 12 (“Lek”) that
was recognised and affirme d by the court in Veneta Miner aria: In the exercise to
determine whether a court has jur isdiction and in considering the jurisdictional
connecting factors the court should have regard to the following: firstly, whether there
is a recognised ground of jurisdiction and secondly , if there is one, whether the court
has the power to give effect to the judgment being sought. In Lek13, the court held that
the question whether the court has jurisdiction depends; (a) on the nature of the
proceedings and (b) the nature of the relief claimed, or i n some cases both (a) and
(b).
[59] The essence of the nature of the relief in these proceedings is that the
appellant in terms of the provisions of section 83 (4) of the new Companies Act, seeks
an order to declare the dissolution of the close corporatio n to be void , which in my
view, is crucial in determining whether this court is vested with the necessary
jurisdiction.
[60] The appellant being a member of the close corporation has a vested right and
interest in the relief that is being sought and it i s for this reason that the new
11 at D-192; D-193; D-194
12 1979(3) SA 1048
13 At 1063F -1064A-D
Companies Act permits him t o bring such an application . The deregistration and
dissolution had a prejudicial effect on the appellant because at the time when the
close corporation was deregistered, it was carrying on a business as a going concern
as were show n by the financial statements attached to the founding affidavit of the
appellant.
[61] The appellant further stated that he had no other option but to seek redress in
this court because the close corporation would lose i ts claim against the insolvent
estate of Machin and he will be liable for the cost associated therewith. The
appellant’s right to free trade and his business through the close corporation as a
member has been affected by the decision to dissolve and deregi ster the close
corporation, which effectively stopped the business from operating. This is a fact that
the provisions in section 83(4) of the new Companies Act as well as the previous Act
seems to recognise and give effect to.
[62] The close corporation is situated within this court’s area of jurisdiction, which is
in Melkbosstrand. The appellant’s right to exercise and to conduct his business here
in the Western Cape, is affected by the decision of the CIPC, which is situated in
Gauteng. Put differently , his right to conduct his business through the close
corporation as a member has had had an impact here in the Western Cape where this
business is situated and not in Gauteng.
[63] The appellant is a resident in this court’s area of jurisdiction , and it is this court
which is easily accessible to him and to which he had to turn, to vindicate his rights as
a member of the close corporation for the relief he may be entitled to as contemplated
in section 83 (4) in the new Companies Act. In Lek14 the court found that in our unitary
judicial system of having a [High Court]15 with different divisions, convenience and
commons sense are inter alia valid considerations in determining whether a particular
division has jurisdiction to hear and determine a particular cas e. In this particular
case, considerations of convenience and common sense is a further factor to
determine that this court should have jurisdiction to hear the case.16
14 At 1068 para E-F.
15 Reference in the Lek judgment is made to the Supreme Court to which the High Court was referred
to under the previous Act.
16 See also Sonia (Pty) Ltd v Wheeler 1958(1) SA 555(A) at 562A-F; 564A.
[64] A further consideration to determine whether this court has the necessary
jurisdiction was the fact that the CIPC, didn’t dispute, not only in this case but in all
other cases of this nature that this court had geographical jurisdiction. The CIPC,
albeit erroneously, administratively restored the close corporation back into business,
after the grant of the rule nisi . Th at conduct together wit h its failure to oppose the
application, are clear indication s that it believed either this court has the necessary
jurisdiction or consented to this court having jurisdiction. The court a quo’s rejection of
this ground to establish jurisdiction was in my view, also wrong.
[65] For all of these reasons , I am of the view that the court a quo had misdirected
itself in finding that it did not have the necessary jurisdiction to adjudicate this matter.
Given the fact however, that all the parties were not bef ore the court in respect of the
relief in the main application , these proceedings cannot be concluded as referred to
earlier.
[66] In the result, I would make the following order:
66.1 The appeal, insofar as the ground of appeal that challenges the court a
quo’s finding on lack of jurisdiction, succeeds;
66.2 The appellant is granted leave to serve the papers on the Minister of
Finance within 21 days of this order;
66.3 Once the necessary service has been affec ted, the appellant is granted
leave to approach this court as currently constituted with a view to re -
enrol the matter on the same papers duly supplemented to the exten t
necessary, for further consideration.
66.4 The appeal against the order granted in the cou rt a quo dismissing the
main application with cost is postponed sine die;
66.5 No order as to costs is made;
66.6 The application for condonation of late filing of the appeal by the
intervening party is dismissed with costs on an attorney and client scale.
_________________________
R.C.A. HENNEY
JUDGE OF THE HIGH COURT
I agree.
_________________________
J. LEKHULENI
JUDGE OF THE HIGH COURT
I agree, and it is so ordered.
_________________________
R. ALLIE
JUDGE OF THE HIGH COURT
Counsel for Appellant : Adv P B Hodes SC
Adv J T Benadé
Instructed by : Smit Kruger Incorporated
Counsel for Intervening party : Adv K Felix
Instructed by : Padaychee and Partners, Pietermaritzburg
No appearance for the respondents.