REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
CASE NO: 18392/2024
In the matter between:
TUSK FINANCIAL SERVICES (PTY) LTD First Applicant
REGISTRATION NUMBER:2022/798842/07
TUSK CONSTRUCTION SUPPORT SERVICES Second Applicant
REGISTRATION NUMBER: 1999/001303/07
And
87 CIVIL (PTY) LTD Respondent
REGISTRATION NUMBER: 2015/208610/07
Heard: 07 October 2024
Delivered: Electronically on 16 October 2024
___________________________________________________________________
JUDGMENT
___________________________________________________________________
LEKHULENI J
Introduction
[1] This is an application for the provisional liquidation of the respondent. The
applicants seek an order that the respondent be placed under provisional liquidation
in the hands of the Master of the High Court of South Africa. The applicants also
seek an ord er that a rule nisi be issued calling upon the respondent or any other
interested party to show cause to this Court on a date to be determined by the
registrar why a final liquidation order should not be granted against the respondent
and why the costs of this application should not be costs in the liquidation of the
respondent.
[2] The applicant's application is based on a loan agreement, as well as goods
supplied, and services rendered by the applicant at the special instance and request
of the responde nt. The applicants assert that the respondent is indebted to them in
the total sum of R4 09 4637,24. According to section 345 of the Companies Act 61 of
1973 (‘the Companies Act 1973 ’), the applicants sent the respondent a statutory
demand on 18 July 2024, demanding immediate payment of R4 094 637,24. This
amount is for breach of the loan agreement and for goods supplied and services
rendered by the applicant to the respondent at the la tter's special instance and
request. However, despite the demand, no payment was made.
[3] Given the respondent's failure to meet its obligations under the various
agreements with the applicants and to respond to the applicant's statutory demand to
rehabilitate accounts and to settle the full outstanding balance owing, the applicants
contended that the respondent is unable to pay its debts in the ordinary course of
business as contemplated in section 344 read with section 345 of the Companies Act
1973.
[4] In addition, the applicants asserted that the failure by the respondent to meet
its financial obligations under the various agreements and the failure to pay its debts
when it fell due renders the respondent insolvent. According to the applicants, the
respondent remains indebted to the applicants and is deemed to be unable to pay its
debts as envisaged in section 344(f) of the Companies Act 1973. The applicants
asserted that there had been proper service on all parties in compliance with section
346(4A) of the Companies Act 1973.
[5] The applicant issued this application and complied with the statutory
requirements set out in section 346 of the Companies Act 1973. To this end, the
applicant served the Notice of Motion together with the founding affidavit and
annexures thereto upon the respondent at the respondent’s registered address, to a
registered trade union - the Amalgamated Union of Building Trade Workers of South
Africa, to the employees of the respondent, to the Master of the High Court and to
the South African Revenue Services in compliance with section 346 of the
Companies Act 1973. The applicant also filed the necessary service affidavit in terms
of section 346(4A)(b) of the Companies Act 1973 specifying how service was
effected as envisaged in section 346(4A)(a) of the Act.
[6] The Master of the High Court certified in his report that the copy of the
applicants’ petition with annexures had been l odged with his office as required by
section 346(4)(a) of the Companies Act 1973 re ad with section 66 (1) of the Close
Corporation Act 1984. In addition, the Master certified that in terms of section 9(3) (b)
of the Insolvency Act 24 of 1936, due security had been found for payment of all fees
and charges necessary for the prosecution of all winding up proceedings and of al l
costs of administering the company in liquidation until a Liquidator has been
appointed and if no liquidator is appointed , of all fees and charge s necessary for the
discharge of the company from winding-up.
Principal Submissions by the parties
[7] At the hearing of this application for a provisional order, the respondent's
Counsel, Mr Nothling, applied for the postponement of the application and handed a
notice to oppose supported by an affidavit from the respondent's attorney. Mr
Nothling argued th at the directors of the respondent did not receive the application
and only became aware of it on Friday afternoon, 4 October 2024. They discovered
that the application had been slated for a hearing on Monday, 7 October 2024.
Counsel contended that the ser vice of the application and the statutory demand at
the respondent's designated address did not guarantee effective service.
[8] According to Mr Nothling, the fact that the application was served on the
respondent's registered address does not mean that s ervice was given. In
developing this argument, Counsel contended that this does not mean that the
service was not in compliance with the rules of court. However, he contended that
the application did not come to the attention of the respondent. Mr Nothling further
submitted that the directors of the respondent were unaware that the matter was on
a roll, and they only became aware on Friday, the 4 October 2024, in the afternoon
around 15h00. They did not know who the legal representatives of the applicant
were. To this end, Counsel pleaded with the court on behalf of the respondent to
postpone the matter so that the respondent could investigate the matter, take legal
advice and act accordingly.
[9] On the other hand, Mr. Coston, the applicant's counsel, ob jected to the
respondent's application for postponement and urged the court to grant the
provisional order as stipulated in the Notice of Motion. Mr Coston submitted that the
applicant complied with the requirements of the Compan ies Act 1973. Counsel
further submitted that the statutory letter of demand and the application were served
at the respondent's registered address. Furthermore, Mr Coston contended that
when the various agreements were executed between the applicants and the
respondent, the responde nt designated 5 Fynbos, Welgevonden Estate
Stellenbosch, as its domicilium address. The letter of demand and the application
were sent to this address. Counsel implored the court to dismiss the postponement
application and to grant the provisional order against the respondent.
Applicable Legal Principles in Postponement Applications
[10] The legal principles applicable to an application for the grant of a
postponement by the court are well established in our law and need not be rehashed
in detail in this judgment . The postponement of a matter set down for hearing on a
particular date cannot be claimed as of right. 1 A party seeking a postponement must
proffer good and strong reasons and must give full and satisfactory exp lanation of
1 National Police Service Union and Others v Minister of Safety and Security and Others 2000 (4) SA
1110 (CC) at para 4.
the circumstances that give rise to the application. 2 The postponement application
itself must be bona fide and must not be used as a tactical endeavour to obtain an
advantage to which the applicant is not entitled. 3 The factors to be considered
include whether the application has bee n timeously made, whether the explanation
given by the applicant for postponement is full and satisfactory, whether there is
prejudice to any of the parties and whether the application is opposed.4
[11] A standard way to mitigate prejudice to other parties i s for the party asking for
the court's indulgence to postpone a hearing - particularly one requested at the last
minute - to offer, or to be ordered, to pay the costs of the postponement.
In Psychological Society of South Africa v Qwelane and Others ,5 the Constitutional
Court stated:
“In exercising its discretion, a court will consider whether the application has
been timeously made, whether the explanation for the postponement is full
and satisfactory, whether there is prejudice to any of the parties and whether
the application is opposed. All these factors will be weighed to determine
whether it is in the interests of justice to grant the postponement. And,
importantly, this Court has added to the mix. It has said that what is in the
interests of justice is determined not only by what is in the interests of the
immediate parties, but also by what is in the broader public interest.”
Discussion
[12] In this matter, the sheriff served the application on 26 August 2024 upon the
respondent at its registered address. The Sheriff executed service by affixing a copy
thereof to the outer principal door at the property. The sheriff noted in his return of
service that no other s ervice was possible after he conducted a diligent search. The
demand was also served at the registered address of the respondent which is also
its domicilium address. The applicant seeks a postponement of this matter on the
2 Shilubana and Others v Nwamitwa (National Movement of Rural Women and Commission for
Gender Equality as Amicus Curiae) 2007 (5) SA 620 (CC) at 624B-C.
3 Myburgh Transport v Botha t/a SA Truck Bodies 1991 (3) SA 310 (NmS) at 315E.
4 Shilubana and Others v Nwamitwa (National Movement of Rur al Women and Commission for
Gender Equality as Amici Curiae 2007 (5) SA 620 (CC) at para 10.
5 2017 (8) BCLA 1039 (CC) para 31.
basis that it only became aware of the notice of this application on Friday, and they
did not know the attorneys for the applicant.
[13] In my view, the explanation proffered by the respondent is very much flimsy
and deficient. If, indeed, on Friday, 4 October 2024, the respondent expr essed a
desire to ascertain the identity of the applicant's legal representative for the purpose
of discussing a remand, it would have been feasible for them to directly contact the
court registrar to obtain this information from the court file. I also find it peculiar in the
postponement application that the respondent's directors, who claimed to have
incidentally learned of this application on Friday, did not submit an affidavit to
substantiate this assertion or to elucidate why the liquidation applicatio n eluded their
attention despite the application being served at the registered and domicilium
address designated by the respondent.
[14] The respondent submitted a notice to oppose and an affidav it from its legal
representative requesting a remand of this matter. In the affidavit, the respondent did
not refute its indebtedness to the applicant. It is my perspective that the
circumstances would have been different had the respondent explicit ly declared in
the remand application that it did not owe the applicants any money. In his
submission, Mr. Nothling apprised the court that the respondent had vacated its
registered address and failed to update its records with the Companies and
Intellectual Property Commission. (‘CIPC’).
[15] I must emphasise that section 23(3) of the Companies Act 71 of 2008
('Companies Act 2008') requires every company to have a registered office as
indicated in its Notice of Incorporation. This address, as registered, is the place
where the company may be found and the place where it conducts its business, a
place where court processes may be served. The registered office of the company
has the same purpose as the domicilium citandi et executandi. By registering an
office or a principal office in accordance with the provisions of section 23(3), the
company clearly indicates its location for any purposes or where legal processes can
be served.
[16] If it subsequently changes the registered office, it must file a notice of change
of registered office together with the prescribed fee in terms of section 23(3)(b)(ii) of
the Companies Act 2008. Until there has been registration by the commission of an
office as its registered office, a company has no registered office. 6 Regulation 21 of
the Companies Act provides that a company must notify the CIPC of a change in its
registered address, indicating the effective date of the change which must be at least
five business days after the date on which the notice is filed.
[17] In the present matter, t he liquidation application was served upon the
respondent at its registered address in terms of Rule 4(1)(a)(v) of the Uniform Rules.
The respondent also chose its registered address as its domicilium address. In terms
of rule 4(1)(a)(v) of the Uniform Rules, service of process on a company may be
effected at the registered address or its principal place of business within the court’s
jurisdiction by delivering a copy to a responsible employee thereof at its registered
office or if there is no such employee willing to accept service, by affixing a copy to
the main door of such office or place of business or in any manner provided by law.
[18] The respondent's reason for requesting a postponement is that the application
did not come to the directors' attention. In my view, this reason does not bear
scrutiny. The respondent's directors should have informed the court and explained
why they were not aware of this application. Furthermore, to the extent that a notice
to oppose had been submitted, it was incumbent upon the respondent to provide a
detailed explanation regarding the existence of any outstanding debts owed to the
applicants. The proposition that the applicant has changed its registered address
and left the domicilium address was only raised from the bar by the respondent's
Counsel. There is nothing bef ore this Court indicating that, indeed, the respondent
has changed its domicilium address.
[19] In my view, the applicant complied with the rules and the relevant statutory
requirements. At the risk of repeating myself, by choosing a registered address or
domicilium, the respondent assured the public that any service of legal process will
only be valid if served at the company's registered office. By choosing a registered
6 BP & JM Investment (Pty) Ltd v Hardroad (Pty) Ltd 1978 (2) SA 481 (T) at 485.
address or domicilium, the respondent guaranteed that in the event of it changing its
registered office, it will notify the public by filing proper notice as required in se ction
23(3)(b)(ii) of the Companies Act 2008. The respondent is also aware that when the
public wishes to know where it is situated it will find the information at the CIPC.7
[20] Mr Nothling argued th at the service effected was not effective in the sense
that the application did not come to the respondent's attention. From the Sherif's
return of service, the application for the provisional liquidation of the respondent was
served by affixing a copy the reof to the outer or principal door at the registered
address of the respondents. It is trite that if a domicilium citandi has been chosen,
service there will be good even though the defendant is known not to live there. 8
However, the manner of service at the domicilium address must be effective. It must
be such that the process served at that address would, in the ordinary course, come
to the attention of and be received by the intended recipient.
[21] In my view, the service of the application by affixing on the door of the
principal place of the respondent company would in the ordinary course come to the
attention of the respondent. The respondent did not explain why this application did
not come t o their attention. The allegation that they have left their given address
appears to be an opportunistic claim . The applicant could not have served this
application to any address other than the one the respondent chose when the
various agreements were con cluded. The respondent did not provide a valid and
sufficient reason for the postponement of this application.
[22] Given all these considerations, I am of the view that the respondent’ s
application for postponement must be refused. Furthermore, the applicant’s
application is for a provisional liquidation of the respondent. If the respondent intends
to oppose the confirmation of the provisional liquidation, it can still do so on the
return date of the rule nisi.
Order
7 Southernera Diamonds Incorporated v San Contracting Services CC 2014 JDR 1731 (G P) at para
15; See also Mfwethu Investment v Citiq 2020 (6) SA 578 (WCC) at para 21 and 23.
8 Amcoal Collieries Ltd v Truter [1990] 1 AII 248 (A).
[23] In the result, the following order is granted:
[24] The respondent is placed under provisional liquidation in the hands of the
Master of the High Court of South Africa.
[25] A rule nisi is issued calling upon the re spondent or any other interested
parties, to show cause, if any, to this Court on 21 November 2024, at 10h00, as to
why:
25.1 Final liquidation order should not be granted against the respondent,
25.2 The costs of this application should not be costs in the liquidation of the
respondent.
[26] It is ordered that the service of this order shall be affected by the sheriff, or his
lawful deputy as follows:
26.1 On the respondent at its registered address and principal place of
business situated at Fynboss 5, Welgevonden, Stellenbosch, Western Cape.
26.2 On the employees of the respondent and or any trade unions to which
the employees might be affiliated with, if any, at the respondent's registered
address and principal place of business as set out above by affixing a copy of
this order to any notice board to which the employees may have access inside
the premises or by affixing a copy thereof to the front door of the premises.
26.3 On the offices of the South African Revenue Services in (Receiver of
revenue) at 17 Lower Long Street, Cape Town City Centre, Cape Town.
26.4 By one publication in each Cape Times and Die Burger newspaper.
__________________________
LEKHULENI JD
JUDGE OF THE HIGH COURT
APPEARANCES
For the Applicants: Adv. Coston
Instructed by: Dunster Attorneys
42 Keerom Street
Cape Town
For the Respondent: Adv. Nothling
Instructed by: NSW Attorneys
Constantia