Summary of Judgment

1. Introduction

The proceedings were an appeal to the Supreme Court of Appeal concerning the validity of the convening of a first meeting of creditors in a liquidation, and more specifically the correct interpretation and application of a statutory time-computation requirement.

The appellant was Nedcor Bank Limited, a major creditor of Plascon Group Limited (in liquidation). The first respondent was the Master of the High Court (Pretoria). A number of respondents were cited, including office-holders and creditors, with the eighth respondent opposing the relief both in the court below and on appeal, while the Master abided the decision of the Court.

The procedural history was that, after the Master caused notice to be published convening the first meeting of creditors, the appellant objected at the meeting that the notice period did not comply with the statute. The appellant then launched review proceedings in the Transvaal Provincial Division seeking to set aside the Master’s decision and to obtain a declarator that the meeting had been irregularly convened. De Klerk J dismissed the application and made no order as to costs. Leave to appeal was refused by the court a quo, and the matter came before the Supreme Court of Appeal with leave granted on petition. The appeal was directed against the dismissal of the application.

The general subject-matter of the dispute was the method of computing a statutory notice period under section 40(2) of the Insolvency Act 24 of 1936, and whether the notice convening the first meeting of creditors was published “not less than ten days before” the meeting date as required by that provision.

2. Material Facts

It was common cause that the Master caused a notice to convene the first meeting of creditors of Plascon Group Limited (in liquidation) to be published in the Government Gazette on 7 July 2000, and that the notice stated that the meeting would be held on 17 July 2000.

It was also common cause that approximately 48 creditors, including the appellant (represented by an attorney), attended the meeting on 17 July 2000. The appellant objected to the holding of the meeting on that day on the basis that the statutory notice period fell short by one day. The appellant’s position was that section 40(2) entitled creditors to ten “clear days” notice before the meeting, which (on its contention) had not been achieved.

The presiding officer at the meeting, representing the Master, rejected the appellant’s objection and ruled that adequate notice had been given. The presiding officer additionally expressed the view that even if notice had been inadequate, the appellant had not been prejudiced because it was present and represented and could still file claims at later meetings. The appellant contended, however, that its prejudice lay in the fact that, not having filed claims by then, it was precluded from nominating and voting for a liquidator of its choice at what was purported to be the first meeting.

Although the presiding officer rejected the objection, she agreed to have the meeting adjourned to 24 July 2000 to enable the appellant to take the ruling on review. The review application followed on 19 July 2000.

For purposes of the Supreme Court of Appeal’s determination, the material facts were those necessary to fix the competing computations of the notice period: the date of publication (7 July 2000) and the date of the meeting (17 July 2000), together with the statutory requirement that publication occur on a date “not less than ten days before” the meeting.

3. Legal Issues

The central legal question was whether the first meeting of creditors was properly convened in compliance with section 40(2) of the Insolvency Act 24 of 1936, which required the Master to publish notice of the meeting on a date not less than ten days before the meeting date.

That question depended on a further interpretive issue: what method of computation of time applied to the ten-day period in section 40(2), and in particular how section 4 of the Interpretation Act 33 of 1957 was to be applied. Three possible methods were identified in argument as conceivably applicable to periods expressed in days: the statutory method in section 4 of the Interpretation Act, the civilian method, and the “clear days” method. Neither party contended for the civilian method, but both relied primarily on the statutory method while differing on its correct application; the appellant contended in the alternative for the “clear days” method.

The dispute was therefore predominantly a matter of law, specifically statutory interpretation and the application of a prescribed computation rule to the undisputed dates. The question did not require the resolution of material factual disputes, but rather the determination of the correct legal approach to calculating the notice period given the statutory language “before”.

4. Court’s Reasoning

The Court treated the appeal as turning on the correct interpretation of section 40(2) of the Insolvency Act and the proper method of reckoning the ten-day period. It set out the relevant text of section 40(2), emphasising that the notice must be published “not less than ten days before the date upon which the meeting is to be held”, and then set out section 4 of the Interpretation Act, which provides that where a particular number of days is prescribed, the period is reckoned excluding the first day and including the last, subject to the qualification regarding Sundays and public holidays.

Although both sides relied on section 4 of the Interpretation Act as applicable, they differed on whether it had to be applied by reckoning forward from the publication date or whether it could be applied by reckoning backward from the meeting date. The appellant contended that the section could only be applied by reckoning forward, taking 7 July as the first day, and then (after excluding that day) treating 17 July as the tenth day. On the appellant’s argument, because section 40(2) used the word “before”, the meeting day (17 July) must also be excluded, with the consequence that the ten-day requirement was not met.

The Court rejected the submission that section 4 could only be applied by reckoning forward. It considered the reliance placed on remarks in Miller v Malmesbury Licensing Court and Another 1929 CPD 209, which had indicated that the statutory provision was easy to apply when reckoning forward but not when reckoning backwards. The Court stated that it could find nothing in the language of section 4 that prevented reckoning backwards. It emphasised that section 4 does not itself prescribe the direction of reckoning; it speaks of a “first day” and “last day” and leaves it to the court to determine which is which by reference to the statutory provision being applied and the circumstances of the case.

The Court then identified the “crucial date” in section 40(2) as the date of the meeting, because the statutory requirement is that publication occurs on a date not less than ten days before that date, and because the Act contemplates steps (such as filing claims and nomination of liquidators) that must occur before the meeting. For that reason, the Court regarded this as an appropriate case to reckon backwards from the meeting date. On that approach, the day of the meeting (17 July) is treated as the “first day” for purposes of section 4 and is therefore excluded, with the reckoning commencing on 16 July and running back to 7 July as the tenth day, which is included. On that computation, the Court concluded that ten days had elapsed before the meeting date and the notice requirement was satisfied. The Court added that once the backwards-reckoning approach is adopted, the appellant’s argument that the word “before” necessarily excludes the meeting date becomes irrelevant, because the meeting date is excluded in any event through the operation of section 4.

The Court further reaffirmed the general principle that when reckoning days in a statutory provision, a court is enjoined to apply section 4 of the Interpretation Act unless there is something in the language or context that is repugnant to its application or unless a contrary intention appears. It found no such repugnancy or contrary indication in section 40(2). In support of adherence to the statutory method, the Court invoked the interest of legal certainty and referred to the reasoning in Mutual Fire and General Insurance Co Ltd v Fouche en ’n ander; AA Mutual Association Ltd v Tlabakoe 1970 (1) SA 302 (A), which cautioned against readily departing from generally applicable methods of time computation absent clear indications to do so.

The Court noted that counsel were agreed that if the statutory method applied, there was no basis to invoke the civilian method (under which the day of publication would be included, with the tenth day ending at midnight on the day before the meeting), and it therefore found it unnecessary to decide anything on that method. The Court cited Joubert v Enslin 1910 AD 7 in describing the civilian method but did not apply it.

As to the appellant’s alternative reliance on the “clear days” method, the Court recorded the submission that the statutory use of the word “before” indicated an intention that both the publication date and the meeting date must be excluded, with the meeting therefore only competent after ten full “clear” days had elapsed. The Court referred to a line of earlier cases in which “clear days” computations had been used for notice periods, including matters using expressions such as “at least”, “not less than”, and “before”. However, it observed that these decisions reflected a strong influence of English authorities, and it stated that it did not regard itself as bound to follow them. The Court’s approach was that if the legislature had intended the “clear days” method to apply to section 40(2), it would have done so explicitly. It accordingly declined to adopt that method.

Having concluded that section 4 of the Interpretation Act governed the computation and that, on its correct application by reckoning backwards, the notice was sufficient, the Court held that the Master had given proper notice of the meeting. In light of that conclusion, the Court stated that it was unnecessary to consider the further argument about absence of prejudice or “substantial injustice” under section 157(1) of the Insolvency Act.

5. Outcome and Relief

The Supreme Court of Appeal dismissed the appeal and thus upheld the dismissal of the review application. It found that the Master’s notice convening the first meeting of creditors was properly given in terms of section 40(2) of the Insolvency Act 24 of 1936, applying section 4 of the Interpretation Act 33 of 1957 by reckoning the ten-day period backwards from the meeting date.

The Court ordered that the appeal be dismissed with costs.

Cases Cited

Miller v Malmesbury Licensing Court and Another 1929 CPD 209.

Mutual Fire and General Insurance Co Ltd v Fouche en ’n ander; AA Mutual Association Ltd v Tlabakoe 1970 (1) SA 302 (A).

Joubert v Enslin 1910 AD 7.

Ex Parte Catsavis 1941 WLD 81.

Ex Parte Schoeman 1943 OPD 197.

Ex Parte Douglas 1964 (4) SA 385.

Ex Parte Curry 1965 (1) SA 392 (C).

Cohn v Cohn 1965 (3) SA 203 (O).

Schoeman v Moller 1950 (3) SA 41 (O).

Loxton v Loxton; Loxton v Holder 1942 TPD 201.

Sowden v ABSA Bank Ltd and Others 1996 (3) SA 814 (W).

Minister of Police v Subbulutchmi 1980 (4) SA 768 (A).

Legislation Cited

Insolvency Act 24 of 1936, section 40(2) and section 157(1).

Interpretation Act 33 of 1957, section 4.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The Court held that the ten-day notice requirement in section 40(2) of the Insolvency Act 24 of 1936 must be computed in accordance with section 4 of the Interpretation Act 33 of 1957, and that section 4 does not require computation only by reckoning forward. The “first” and “last” day for purposes of section 4 must be identified by reference to the particular statutory context, and in this instance the appropriate approach was to reckon backwards from the meeting date.

On a backwards computation excluding the meeting day and including the publication day as the tenth day, the publication of notice on 7 July 2000 for a meeting on 17 July 2000 satisfied the requirement of publication on a date not less than ten days before the meeting. The appeal against the dismissal of the review application therefore failed and was dismissed with costs.

LEGAL PRINCIPLES

Section 4 of the Interpretation Act 33 of 1957 provides the default statutory method for reckoning a prescribed number of days, requiring that the period be reckoned excluding the first day and including the last day, subject to the express qualification concerning Sundays and public holidays. A court should apply this statutory method unless the language or context of the provision being interpreted is repugnant to such application or unless a contrary intention appears from that provision.

Section 4 does not itself prescribe whether computation must be performed by reckoning forward or backward. The identification of the “first day” and “last day” for purposes of section 4 depends on the language and context of the statutory provision under consideration and the circumstances of the case. Where the statutory scheme makes a particular date the operative reference point (here, the meeting date as the date “before” which notice must be published), reckoning backwards may be appropriate to give effect to the statutory requirement.

Departure from the generally applicable statutory method of computation is not readily assumed. Considerations of legal certainty support adherence to the prescribed method absent clear indications in the legislation that an alternative method (such as the “clear days” method) is intended. Where a legislature intends the “clear days” method to apply, it is expected to do so explicitly, rather than leaving it to implication from general words such as “before” or “not less than”.