Nel NO and Others v Master of the High Court and Others (290/2000) [2002] ZASCA 4 (8 March 2002)

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[2002] ZASCA 4
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Nel NO and Others v Master of the High Court and Others (290/2000) [2002] ZASCA 4; 2002 (3) SA 354 (SCA) (8 March 2002)

THE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
CASE NO. 290/2000
Reportable
In the
matter between
BASIL
NEL NO AND 2 OTHERS Appellant
and
THE
MASTER OF THE HIGH COURT
AND
2 OTHERS Respondents
_____________________________________________________________
CORAM:
ZULMAN, STREICHER and NUGENT JJA
HEARD: 21
FEBRUARY 2002
DELIVERED: 8 MARCH 2002
Termination of
concursus creditorum
–
Interpretation of s 348 of the Companies Act, 1973
JUDGMENT
ZULMAN
JA
[1]
The crisp issue in this appeal is what the effect
is, if any, on the
concursus creditorum,
when a provisional order for the winding up of a company that was
obtained at the instance of a creditor is discharged and immediately
replaced by a final order for the winding up of the company granted
at the instance of another creditor. In other words, whether
the
concursus creditorum
(for the sake of brevity-
concursus
)
that came into existence when the provisional order was granted
remains extant.
[2]
The court
a quo
(Blieden J) held that the
concursus
established by the grant of the provisional order terminated upon the
discharge of that order. This appeal is brought with the leave
of
the court
a quo
.
[3]
The relevant common cause facts are:
On
7 April 1998 one van Niekerk filed an urgent application at the
office of the Registrar of the High Court, Johannesburg, for
the
winding-up of Prop Plant Hire (Pty) Limited (the company), (the van
Niekerk application). It is common cause that this is
the date on
which the application was presented to the court as contemplated by
s 348(2) of the Companies Act, 1973.
3.2
Pursuant thereto and on 8
April 1998 a provisional order for the winding-up of the company was
granted returnable on 19 May 1998.
3.3 On 9 April 1998 the Master of the High Court (the
first respondent on appeal) appointed the appellants as joint
provisional liquidators
of the company.
3.4 On 19 May 1998 the van Niekerk application stood
down until 22 May 1998 and the return day of the provisional order
was extended
to 2 June 1998. The object of the extension was to
afford NBS Boland Limited (Boland) the opportunity of bringing a
substantive
intervention application together with a substantive
application to wind up the company.
3.5 On 27 May 1998 Boland filed such an application.
The notice of motion sought an order in the following terms:
“
1. dat aan die
tussenbei-tredende skuldeiser verlof verleen word om tussenbeide te
tree in die hoofaansoek;
2. dat die respondent gelikwideer word ten behoewe van
die skuldeisers;
3. dat die koste van die tussenbeitredende, koste in
die likwidasieverrigtinge sal wees......”
The application bore the same case number which had been
allocated to the van Niekerk application.
On 28 May 1998 Boland’s application was served on
the
company and was placed in the file containing the van
Niekerk application.
3.7 On 2 June 1998 Boland moved for an order in terms
of its notice of motion. The Court (Flemming DJP) refused to
entertain Boland’s
application until it had been duly stamped and
properly issued by the Registrar under a separate case number. These
requirements
were attended to on the same day. Thereafter but still
on 2 June 1998 the following orders were made:
In the van Niekerk application:
“3.7.1 The order of provisional liquidation is set
aside;
3.7.2 The rule
nisi
is discharged”
In the Boland application:
“3.7.3 Dat die bogenoemde respondent maatskappy
hiermee in finale likwidasie geplaas word.”
The
orders were granted in immediate succession although it is uncertain
in precisely what order.
3.8 On 22 June 1998 and pursuant to Boland’s
application, the Master appointed the appellants as joint provisional
liquidators
of the company.
3.9 These appointments were made final on 7 August
1998.
[4] The appellants sought an order in the Court
a
quo
in these terms:
“1. It is hereby directed that
the winding-up of Prop Plant Hire (Pty) Limited
(“the company”) commenced on 8 April 1998.
It
is hereby directed that the
concursus creditorum
in respect
of the company was commenced on 8 April 1998.
It
is hereby directed that all creditors intending to prove claims
against the company are to calculate the values of their respective
claims as at 8 April 1998.
That
the costs of this application are to be paid by any party opposing
the relief sought herein, in the event of no party opposing
the
relief sought herein, that the costs are to be costs in the
liquidation.”
(It is common cause that the date 8
April 1998 should read 7
April 1998).
[5] The
application was dismissed with costs, such costs to include the costs
of two counsel.
[6]
It is trite that one of the effects of the grant of a winding-up
order is to establish a
concursus
1
. Section 348 of the Companies Act, 1973 provides a date when such
winding-up is deemed to commence in that it states:
“
A winding-up of a company by the Court shall be
deemed to commence at the time of the presentation to the Court of
the application
for the winding-up.”
An
order for the winding up of a company, be it a provisional or a final
order, is not personal to the petitioning creditor but determines
the
status of the company. Accordingly when the provisional order was
granted at the instance of van Niekerk on 8 April 1998 this
brought
about the commencement of the process of winding up which, in terms
of s 348, was deemed to have commenced on 7 April 1998.
The status
of the company was therefore that it was provisionally in liquidation
with all the consequences of such a status including
the creation of
a
concursus.
[7]
As pointed out in
Lief,
N.O. v Western Credit (Africa) (Pty) Limited
2
the section is
designed to obviate:-
“…
a possible attempt by a dishonest company, or
directors, or creditors or others, to snatch some unfair advantage
during the period
between the presentation of the petition for a
winding-up order and the granting of that order by a Court..”
[8]
As a consequence of the deemed commencement of the winding-up of the
company on 7 April 1998 a
concursus
then came into
being.
3
The respondents conceded that this
concursus
endured
until
some time on 2 June 1998. However, and contrary to what is
contended for by the appellants, the respondents submitted that
when
the rule was discharged in the van Niekerk application on 2 June
1998, and even although it was immediately replaced with a
final
winding-up order at the instance of Boland, the
concursus
established by the
provisional order ceased to exist and a new
concursus
came into being. I
cannot agree. There was in reality no hiatus which brought the
concursus
established on 7 April 1998 to an end. The discharge of the
provisional order, and the grant of the final order, were clearly
intended
to take effect simultaneously (as nearly as that could be
achieved in reality) and there was thus no break in the status of the
company.
The purpose of the Boland application to intervene in the
van Niekerk application and to seek a final winding-up order was to
ensure the continuation of the already existing process of winding up
(albeit provisional) and the
concursus
that this entailed.
[9]
The situation which obtained was no different to that which occurred
in
Milne, N.O. v Deputy Sheriff
and Others
4
in which Caney J stated
the following:
“
On 22
nd
March, Selke J, had made a
provisional liquidation order against the company at the instance of
one Ismail Hajee Moosa. This order
was made notwithstanding
resistance on behalf of the company at that stage of the proceedings,
and the rule
nisi
in connection with the provisional
liquidation order was returnable on 14
th
April. It was,
however, extended until 26
th
April, on which date the
petitioner, Moosa, applied for its discharge. Another creditor,
however, one Mayet, had apparently come
to know of the intention of
Moosa to make that application, and he moved on the same day, the
26
th
April, for a provisional liquidation order. The two
applications, that of Moosa for discharge of the order he had
obtained and that
of Mayet for a provisional liquidation order, were
heard simultaneously, and both were granted. The contention of the
second respondent
before me was that the provisional liquidation
order made at the instance of Moosa having been discharged, the
applicant’s appointment
as provisional liquidator of the company
ceased to operate, and that, as he had not been re-appointed after
the making of the provisional
liquidation order at the instance of
Mayet, he no longer had any authority to continue the proceedings in
which he had obtained the
rule
nisi
on 7
th
April.
The contention of the applicant, in answer to this,
was that he had not been appointed provisional liquidator in the
matter of Moosa
against the company, but provisional liquidator of
the company in provisional liquidation; that the company never
ceased after his
appointment to be in provisional liquidation; that
there was no space of time or hiatus between the discharge of the
order which
Moosa had obtained and the grant of the order which Mayet
obtained; and that consequently he continues to be the provisional
liquidator
of the company until either it be discharged from
liquidation, or a liquidator be appointed to it. On his behalf the
submission
was advanced that the Court had on 26
th
April
deliberately heard the two submissions simultaneously with the object
of avoiding any break in the continuity of the state
of provisional
liquidation in which the company was at that time.
The contentions advanced on behalf of the applicant
appeal to me as being sound, and I consider that he continues to
function at the
present time as the provisional liquidator of the
company and consequently has
locus standi
to apply for
confirmation of the rule
nisi
granted on 7
th
April.”
[10] Counsel for the
respondents referred us to
Flax v
Berliner: Houndsditch Warehouse (Pty), Ltd, Intervening,
5
in support of his general submission that upon the discharge of the
provisional winding-up order the
concursus
came to an end. A
consideration of the judgment of Millin J in that matter reveals,
however, that the learned judge merely referred
to an assumption made
by counsel that if an existing provisional sequestration order was
discharged, no new order granted after this
expiration of the six
month period referred to in
s 34(1)
of the
Insolvency Act, 1936
, even
if granted simultaneously with the discharge, could bring the section
into operation (This section deals with the voidable
sale of a
business by a trader).
[11] It is, in my view, irrelevant whether Boland can
properly be said to have intervened in the van Niekerk application
(in the
sense that it sought to pursue the same cause of action) or
whether its application was a concurrent application for the same
relief.
In either event the effect of the order that was granted at
its instance was to cause the winding-up process that had commenced
on 7 April 1998 to continue uninterrupted.
[12]
Accordingly:
The
appeal is allowed with costs such costs to include the costs
of two counsel.
The
order made by the court
a quo
is set aside and replaced
with the following order:
“
2.1 It is declared that the winding-up of Prop Plant
Hire (Pty)
Limited (“the company”) commenced on 7 April 1998
It
is declared that the
concursus creditorum
in respect of
the company commenced on 7 April 1998.
All creditors intending to prove claims against the
company are to calculate the values of their respective
claims as at 7 April 1998.
The
second and third respondents are to pay the
applicants’ costs such costs to include the
costs of two
counsel.”
----------------------------------------
R H
ZULMAN
JUDGE OF
APPEAL
STREICHER
JA )
NUGENT
JA ) CONCUR
1
See
for example
Walker v Syfret NO
1911 AD 141
at 160
2
1966(3) SA 344 (W) at 347 B-C. See also Vermeulen and Another v CC
Bauermeister
(Edms)
Bpk 1982(4) SA 159 (T) at 161 F-H
3
Kalil v Decotex (Pty) Ltd 1988(1) SA 943 (A) at 961H – 962A and
First National Bank Limited v
EU
Civils (Pty) Ltd 1996(1) SA 924 (C) at 933 G-H
4
1955(3) SA 160 (N) at 161 A - F
5
1950(2) SA 259 (W)