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[2015] ZAWCHC 56
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Specialized Edible Oil And Fats (Pty) Ltd T/A Capital Rice v Eezi Food Imports And Exports (Pty) Ltd (19128/2014) [2015] ZAWCHC 56; [2015] 11 BLLR 1172 (LC); (2015) 36 ILJ 3122 (LC) (6 May 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE DIVISION,
CAPE TOWN)
Case No 19128/2014
DATE: 06 MAY 2015
In the matter between:
SPECIALIZED EDIBLE OIL AND FATS
(PTY) LTD
T/A CAPITAL
RICE
.................................................................................................................
Applicant
And
EEZI FOOD IMPORTS AND EXPORTS (PTY)
LTD
......................................................
Respondent
JUDGMENT
DELIVERED 06 MAY 2015
RILEY AJ
[1] This is an application in which the
applicant seeks a final order of liquidation against respondent
pursuant to having obtained
a provisional liquidation order in
respect of the respondent on an ex parte basis on 31 October 2014
returnable on 1 December 2014.
The return date was anticipated by
the respondent in terms of Rule 6(8) and the matter was enrolled on
20 November 2014.
[2] By agreement the Rule 6(8)
application was postponed to ensure the filing of papers and on 9
December 2015 Kushke AJ, after
hearing argument, made an order in the
following terms:
2.1 The respondent’s application
in terms of Rule 6(8), in terms of which it sought amended relief
i.e. granting it and its
directors leave to conduct the business of
the respondent, pending finalisation of the liquidation application,
was dismissed;
2.2. A rule nisi was issued, returnable
on 25 February 2015, to be determined together with the final winding
up application, calling
upon the respondent’s directors, Messrs
L.A. Ebrahim and A.O. Ebrahim, to show cause why they should not be
ordered to pay
the costs of the application referred to under (2.1)
above in their personal capacity jointly and severally;
2.3. It was recorded that applicant
undertook to unconditionally pay the wages and salaries of the
employees of the respondent
for the period between the granting of
the provisional order on 31 October 2014 and the final determination
of the winding up application;
2.4. The respondent’s directors
were directed to provide the applicant’s attorneys with a list
of names of all wage
/ salary earning employees of the respondent at
the time of the granting of the provisional order having been
granted, setting
out further their contact details, the wages /
salaries to which they are entitled in terms of their contracts of
employment, details
of the sums paid to them as wages / salaries at
the time, any further payments made to them in the interim, their
bank account
details (if available) and proof of their employment
(IRP5 certificates and any written contracts of employment) by no
later than
17 December 2014;
2.5. The application for the final
winding up of the respondent was postponed for hearing on 25 February
2015 and the provisional
order of liquidation granted on 31 October
2014 was extended to 25 February 2015;
2.6. Service of the papers in the
winding up application, the provisional order and a copy of the order
of 9 December 2015 was
to be effected on the employees of the
respondent referred to in paragraph 2.3 above in person by the
sheriff of this Honourable
Court by no later than 23 January 2015.
2.7. The further costs of the
winding-up application, which costs included the costs of two
counsel, stood over for later determination
on the return date.
[3] On 25 January 2015 the parties
agreed that the matter be postponed for hearing to 18 March 2015 due
to the fact that the respondent
filed an application to file a
further supplementary affidavit as well as its actual supplementary
affidavit. The parties also
agreed that in the event the court
allows the respondent to file its further supplementary affidavit,
the applicant may file a
reply thereto on or before 11 March 2015,
which it did.
Compliance with S 346(4A) of the
Companies Act 61 of 1973 (as amended):
[4] Section 346 (4A)(a)(i), (ii) and
(iv), (b) of the Companies Act 61 of 1973 (as amended) (“the
Act”) provides that:
“(a) When an application is
presented to the court in terms of this section, the applicant must
furnish a copy of the application-
(i) to every registered trade union
that, as far as the applicant can reasonably ascertain, represents
any of the employees of the
company; and
(ii) to the employees themselves-
(aa) by affixing a copy of the
application to any notice board to which the applicant and the
employees have access inside the premises
of the company; or
(bb) if there is no access to the
premises by the applicant and the employees, by affixing a copy of
the application to the front
gate of the premises, where applicable,
failing which to the front door of the premises from which the
company conducted any business
at the time of the application...
(iv) to the company, unless the
application is made by the company, or the court, at its discretion,
dispenses with the furnishing
of a copy where the court is satisfied
that it would be in the interests of the company or of the creditors
to dispense with it.
(b) The applicant must, before or
during the hearing, file an affidavit by the person who furnished a
copy of the application which
sets out the manner in which paragraph
(a) was complied with.”
[5] It is now accepted law that the
aforesaid provisions of the Act have as their purpose to ensure, as
far as is reasonably feasible,
that applications for winding-up come
to the attention of the employees of the employer in question and
their representatives so
that the interests of the employees can be
protected. In terms of our law it is not permissible for the court
to grant a final
winding-up without the employees being furnished
with the application papers.
[6] The court should satisfy itself
that the persons who are entitled to be furnished with the papers
have had an adequate opportunity
to consider the application and to
decide whether or not to intervene.
[7] I am mindful that the court should
not refuse an order merely because it is not satisfied that the
papers in the application
have come to the attention of all
employees. I agree that once the court is satisfied that the method
adopted by the applicant
to furnish the application papers to the
employees is satisfactory and reasonably likely to make the
application papers accessible
to the employees, there should be no
reason to refuse either a provisional or final winding-up order.
[8] It is now settled law that the
requirement that the application papers be furnished to the persons
specified in S346(4A) is
peremptory. As appears from the provisions
of S346(4A)(a)(ii) hereinbefore referred to, applicant may however
also make use of
the methods referred to in the subsection to comply
with the peremptory requirement.
[9] It is clear that when Kuschke AJ
heard the Rule 6(8) application he was concerned that the provisional
order may have been
a nullity given the lack of service of the
application on the respondent’s employees prior to applicant
obtaining the provisional
winding-up order as the provisions of
s346(4A)(a)(ii) of the Act are peremptory. It is for this reason
that he granted an extension
of the provisional order so that
effective service of the application could be effected on the
respondent’s employees prior
to the hearing of the application
on the extended return day.
[10] In its further affidavit on this
issue, the applicant has explained why the application was brought on
an ex parte basis and
undertook to give effective notice on employees
before the extended return day.
[11] In the compliance affidavit,
applicant sets out how it sought to ensure that service of the
application be effected on all
the known employees of the respondent
in person as best as this could be achieved. I also accept that
applicant has in accordance
with the Kuschke AJ order tendered
payment of the wages / salaries of the respondent’s employees,
thereby removing any prejudice
the employees may have suffered in the
meantime by virtue of the respondent having been placed under
provisional liquidation.
[12] In Hendricks NO & Others v
Cape Kingdom (Pty) Ltd 2010(5) SA 274 (WCC) Sholto-Douglas AJ, in
dealing with a similar issue,
held that it is settled law that
compliance with the relevant section was peremptory, but that, on the
facts of the case, even
though there might not have been strict
compliance at the time when the provisional order was granted,
service of the application
had been effected on the respondent’s
employees at the time the matter was being heard by him, namely on
the return date,
and by that time all of the employees should have
had due notice.
[13] The approach adopted by
Sholto-Douglas AJ in the Hendricks NO & Others v Cape Kingdom
(Pty) Ltd matter supra was endorsed
by the SCA in E B Steam Company
(Pty) Ltd v ESKOM Holdings Soc Ltd (979/2012)
[2013] ZASCA 167
(27
November 2013),
[2014] 1 All SA 294
(SCA) at para [16].
[14] Prior to the hearing of the
application I was advised by counsel for the applicant and the
respondent that the provisional
order of the liquidation of the
respondent had been served on the employees of the respondent and
that the employees of the respondent
did not intend to oppose the
confirmation of the rule, nor have they filed any affidavits in
opposition to the application, the
granting of the provisional order,
or in respect of any prejudice they may have suffered in the interim
as a result of the order
being obtained without notice to them at the
time. In fact several of the employees had attended the proceedings
on 18 March 2015
out of interest in the outcome of the matter.
[15] Considering the assurances given
to me by counsel for the parties and the authorative pronouncements
of the SCA referred to
hereinbefore on this issue, I am satisfied
that applicant has complied with the ‘peremptory’
requirement of service
on the respondent’s employees.
[16] The principle issues to be
determined in this matter are whether the respondent should be
finally wound up and whether the
directors of the respondent should
pay be held liable personally for the costs of the Rule 6(8)
application.
The bona fides on the part of the
applicant in bringing the application for the provisional liquidation
of the respondent on an
ex parte basis
[17] Before dealing with the main issue
it is necessary to consider the applicant’s bona fides in
bringing the provisional
application on an ex parte basis. It is
trite law that an applicant who applies to court to obtain an order
on an ex parte basis
must in his / her or its conduct be beyond
reproach. Such an applicant is required to place all relevant facts
before the court
and the applicant may not furnish incorrect
information to the court. Due to the nature of, and consequences of,
such applications
our courts have made it clear that in cases where
the incorrect information is furnished to the court carelessly, and
not recklessly
or deliberately, the court is entitled to discharge
the rule nisi on that ground alone. See Hall and Another v Heyns &
Others
1991(1) SA 381 (C) at 397 B – C.
[18] In M V Rizcun Trader (4) M V
Rizcun Trader v Manley Appledore Shipping Ltd 2000(3) SA 776 (C) Van
Heerden J held at 794A –
E as follows in regard to the
obligation which is placed on an applicant who brings an application
on an ex parte basis:
‘Applications for the arrest of
vessels as security are as a matter of practice brought ex parte and
almost invariably as
a matter of urgency before duty Judges with
increasingly heavy workloads. The instant matter appears not to have
been an exception
as, according to a handwritten note on the Court
file, the arrest order was granted by Thring J at 21:50. EM Grosskopf
JA in Knox
D’Arcy Ltd and Others v Jamieson and Others 1996(4)
SA 348 (A) at 379 F – G adversely commented on the making of
orders
in such circumstances, particularly if the relief sought is
based on largely untested hearsay. It appears to me to be axiomatic
that where orders are sought in circumstances such as those set out
above the need on the part of deponents to adhere to the requirements
of the uberrima fides rule is more pronounced.
Le Roux J in Schlesinger v Schlesinger
1979(4) SA 342 (W) at 349 A – B extracted the following
principles to the uberrima
fides rule from the relevant authorities:
‘(1) (I)n ex parte applications
all material facts must be disclosed which might influence a Court in
coming to a decision;
(2) the non-disclosure or suppression
of facts need not be wilful or mala fide to incur the penalty of
rescission [i.e. of the order
obtained ex parte]; and
(3) the Court, apprised of the true
facts, has a discretion to set aside the former order or to preserve
it.’
[19] In the present matter the founding
affidavit in the ex parte application was deposed to by Haroon Abba
Tayob Essack, the sole
shareholder and managing director of the
applicant. For the sake of convenience I shall hereinafter refer to
him as Uncle Haroon.
His affidavit reveals that the sole basis for
launching the provisional liquidation application on an ex parte
basis is his alleged
fear that it would be easy for the respondent to
conceal the stock of rice which is the subject matter of dispute in
these proceedings,
or to sell the rice without leaving a trace. It
is necessary to consider this averment against the background of the
allegation
by Uncle Haroon that the respondent had at some stage
indicated that there were approximately eighty tons of rice which it
could
not sell and that it was then allegedly agreed between the
parties that applicant would collect the rice from the respondent’s
premises. According to Uncle Haroon the respondent had allegedly
only provided applicant with forty-eight tons of rice in two
loads
and that respondent had refused to load any further rice.
[20] On a conspectus of the evidence,
this allegation cannot be correct. What is more probable is that
when the respondent found
out that applicant had inflated the prices
that it was charging it, respondent decided that it would source rice
from another Cape
Town importer. I pause to mention that at this
stage the relationship between the parties was already strained and
very tense.
When Uncle Haroon found out that respondent was sourcing
rice from an alternative source, he collected all the rice of the
applicant
during October 2014. The reason advanced by applicant for
proceeding by way of an ex parte application can therefore not be
true.
It seems to me that at the time when the liquidation
application was brought on an ex parte basis, there was no rice on
the respondent’s
premises that belonged to the applicant.
Uncle Haroon himself avers that the rice belonged to a certain Mr
Parker.
[21] Mr Lawence for the respondent
contended that the modus operandi and or conduct of the applicant,
considering the manner in
which Uncle Haroon proceeded with the ex
parte application against respondent without notice, amounts to an
abuse of the court
process and that it was a deliberate strategy to
prevent the respondent from opposing the application. There is merit
in this
contention. It is common cause that Uncle Haroon knew the
Ebrahim brothers, the sole directors of the respondent, very well.
They have known each other over a number of years and did business
with each other. In fact the Ebrahim brothers are Uncle Haroons’
son’s, brothers in law. He knew where the business premises of
the respondent was as his wife and son previously conducted
business
from it and or occupied it. The parties also had telephonic and
other electronic media access to each other. For these
reasons
alone it seems to me that there was no reason why applicant could not
have telefaxed, emailed and or telephoned the respondent
directors to
notify them of the intended application.
[22] I further agree with the
contentions of Mr Lawrence that if regard is had to the following
further facts and circumstances
then the only conclusion that I must
come to is that when Uncle Haroon launched the provisional
liquidation application on an ex
parte basis, he was motivated by bad
faith and malice directed at the respondent’s directors:
1. The dispute regarding payment for
stock had been simmering for several months at least.
2. There seems to be no logical reason
why, considering the huge amount outstanding and due to it, applicant
never formally demanded
payment from the respondent.
3. The liquidation papers were signed
on 22 October 2014, but the application was only issued out of this
court on 27 October 2014.
4.There was accordingly more than
enough time to serve the papers on respondent.
5. No notice whatsoever was given to
the respondents.
6.Subsequent to obtaining the order,
Uncle Haroon accompanied the Sheriff to serve the provisional
liquidation order at the business
premises of the respondent.
7. Uncle Haroon, immediately on
arriving at the respondent’s business ‘took over the
business’, and then informed
customers who called that the
respondent was bankrupt and that he had liquidated the respondent.
[23] The conduct of Uncle Haroon
exhibits elements of malice and was clearly intended to cause
prejudice to the respondent and or
its directors. Of further concern
to me is that on a reading of the papers, what stands out, are the
glaring disputes of fact.
It is further clear that after launching
the provisional application on an ex parte basis, applicant had on
several occasions
amended its papers in regard to the amount
allegedly due and owing to it by the respondent, and in the process
also adjusted its
version, and advanced unacceptable and improbable
explanations for the amounts provided in the founding affidavit.
[24] It is not unreasonable to conclude
that Uncle Haroon was not exactly frank and forthright when he
deposed to the founding affidavit.
It is clear that he failed to
adhere to the uberrima fides principle and it is apparent that he was
extremely selective about
what information he decided to place before
the court. There is no doubt in my mind that at the time that he
decided to launch
this application on an ex parte basis that he must
have been in possession of all the information which has subsequently
come to
light. I say this because on his own version applicant had
been experiencing problems with respondent for some time in regard to
the payment of its account. One would therefore have expected that
the applicant would have all the information that it intended
to rely
on readily available at the time when he decided to launch this
application.
[25] On the available evidence it would
appear that:
1.The amount allegedly due and owing by
respondent to applicant as at March 2014 was R1 281 463-00 and not R1
317 000-00 as alleged
by Uncle Haroon.
2.It cannot be correct that only five
payments were made on the old accounts during August and September
2014. The evidence clearly
shows that at least R1 281 463-00 was
paid by the respondents during the period March – October 2014.
3. According to the respondent’s
bank statements, which were tendered as evidence, the respondent paid
the applicant the amount
of R400 000-00 by means of cash deposits and
also made an internet transfer in the amount of R60 000-00 from
respondent’s
FNB account on 15 August 2014 and a further amount
of R50 000-00 was paid in September 2014.
4. The applicant further failed to
disclose that at the time of launching the application the respondent
had paid applicant the
total amount of R1 960 800-00.
5. The applicant further omitted to
disclose to the court that respondent has been making payments of
approximately R200 000-00
per month to the applicant.
[26] I am satisfied that all this
information was available to the applicant when he decided to launch
the application. Considering
the multitude of disputes on the facts
and particularly in relation to the amount allegedly owing by the
respondent to applicant
it cannot be so that the applicant has or had
any basis in fact or in law to aver that an amount of R3 317 000-00
was due and owing
to it at the time when the application was launched
on an ex parte basis. On the contrary the evidence rather shows that
the respondent
was making payments at the time when the ex parte
application was launched and would be able to continue to make the
payments that
it was making in terms of the agreement as averred by
it in the ordinary course of conducting its business.
[27] What is further telling is that if
the amount of R 3 317 000-00 was indeed due and payable by respondent
to applicant, then
it is extremely strange and quite frankly
illogical that applicant has never formally demanded payment from the
respondent considering
the history that the parties had with each
other.
[28] On the facts before me it is
further highly unlikely and improbable that the applicant could
seriously have believed at the
time of launching the ex parte
application that there was an agreement in place between the parties
in terms of which a facility
of R2 million was negotiated and that
respondent would pay to applicant monthly instalments of R100 000-00
on the amount due in
terms of the initial supply of rice.
[29] Having regard to the above facts
and circumstances I must conclude that had the respondent been given
a reasonable opportunity
to oppose the provisional liquidation
application and had the court seized with the ex parte application
been placed in possession
of all the facts referred to hereinbefore
it is likely that the court would not have granted the provisional
order.
[30] The overwhelming probabilities
favour a finding that the provisional order was improperly obtained
and in circumstances where
Uncle Haroon did not adhere to the
requirement of the uberrima fides rule when he approached the court
on an ex parte basis. Accordingly
and for the above reasons alone I
am of the view that the provisional order of liquidation should be
set aside.
Is it just and equitable that
respondent be placed in final liquidation and or is the respondent
unable to pay its debts in terms
of S344(f) of the Act?
[31] In any event, even if I have erred
in finding as I have, the applicant must satisfy the court on a
balance of probabilities
that a final order of liquidation is to be
granted. It is trite law that the degree of proof required at this
stage is higher
than that required for the granting of a provisional
order. See Paarwater v Soutt Sahara Investments (Pty) Ltd
[2005] 4
All SA 185
(SCA) at 186 para [3]. There is no onus on the respondent
to show that it is not indebted to the applicant. All respondent is
required to show is that the indebtedness is disputed on bona fide
and reasonable grounds. See Kalil v Decotex (Pty) Ltd &
Another
1988(1) SA 943(A) at 980C.
[32] Mr du Preez, who was assisted by
Mr Bosman, contended in the main that the respondent should be
finally wound up on the grounds
that:
1. the respondent was unable to pay its
debts as provided in terms of s.344(f) of the Act;
2. that it would be just and equitable
that respondent be wound up as provided in terms of s.344(h).
[33] Notwithstanding the fact that
there are serious disputes of fact in regard to essential matters
that the applicant is required
to satisfy this court upon in order to
establish that it is just and equitable to wind up the respondent,
applicant did not seek
an order referring such disputes for the
hearing of oral evidence as it was entitled to do. It is trite law
that where there is
a dispute of facts, a final order, such as is
requested in the present matter, should only be granted if the facts
as stated by
the respondent together with the admitted facts in the
applicant’s affidavit justify such an order. See Stellenbosch
Farmers’
Winery Ltd v Stellenvale Winery (Pty) Ltd 1957(4) SA
234(C) at 235 E – G and Plascon-Evans Paints limited v Van
Riebeeck
Paints (Pty) Ltd 1983(A) SA 623(A) at 634H – 635A.
[34] It is further settled law that the
applicant must raise the issue upon which it would seek to rely in
its founding affidavit.
In Swissborough Diamond Mines (Pty) Ltd &
Others v Government of the Republic of South Africa & Others
1999(2) SA 279(T)
at 323 F to 324G Joffe J made it clear that in
motion proceedings the affidavits serve not only to place evidence
before the court
but also to define the issues between the parties.
The learned judge held further that the parties must know the case
that must
be met and in respect of which they must adduce evidence in
the affidavits.
[35] I am not persuaded that the
version of the respondent is so far-fetched or clearly untenable that
I am justified in rejecting
it merely on the papers. If I apply the
Plascon-Evans test to the facts of this matter then the following
facts, as is succinctly
summarised in the respondent’s heads of
argument, emerges:
35.1 Uncle Haaroon’s son Faheem,
managed his mother’s business in Cape Town and returned home to
Durban leaving the
business in the hands of his brother-in-law, the
then still inexperienced Liyaqat Ebrahim.
35.2 Uncle Haaroon’s wife’s
business (Capital Eezi CC) was run from the premises, eventually
leased by Liyaqat, in his
personal capacity. With the consent of
Uncle Haaroon, Liyaqat was assisted to run the business by his
brother Qayum Ebrahim.
By agreement they were to receive a monthly
salary of R20 000, 00 which was never paid by the applicant. The
amount of R260 000,00
is presently due and payable to them in respect
of salaries.
35.3 After the business was conducted
by the Ebrahim brothers for a while, Uncle Haroon simply one day
decided to close the business,
loaded up all the stock together with
equipment and moved the operations to Zimbabwe, leaving Liyaqat
responsible for the obligations
under the lease agreement.
35.4 The respondent commenced receiving
stock from the applicant in December 2012 and by March 2014 owed the
applicant R1 281 463,00
on account. The amount was payable by
agreement, interest free in such monthly instalments as the business
could manage without
compromising its cash-flow.
35.5 In March 2014 it was agreed that
the applicant would supply the respondent with rice on consignment at
cost plus 10%. Between
March – July 2014 rice in the amount of
R1 972 064,31 was supplied. Rice was not supplied strictly on order
by the respondent,
but was delivered to the respondent’s
premises in loads of rice which arrived at Cape Town harbour from
India. The respondent
would subsequently be invoiced. It later
transpired that the respondent was being overcharged in breach of the
agreement between
the parties.
35.6 The respondent made regular
payments to the applicant in compliance with the agreement between
the parties. Between March to
October 2014 payment in excess of the
amount due under the ‘old account’ was made to the
applicant. The current outstanding
amount is being liquidated in
accordance with the terms of the agreement.
35.7 Uncle Haaroon unsuccessfully tried
to persuade the respondent to assist the applicant to obtain an
overdraft facility. The
respondent started looking for alternative
suppliers.
35.8 Uncle Haaroon was aggrieved by the
fact that the respondent was not prepared to assist with the
overdraft and that it was exploring
the prospect of doing business
with other suppliers.
35.9 Uncle Haroon’s malice is
demonstrated by his attendance at the respondent’s premises
when the Sheriff served the
provisional order on the respondent, and
his further taking calls at the respondent’s business premises,
where he informed
customers of the respondent that it was bankrupt
and that he had liquidated it.
35.10 Furthermore, despite the fact
that it was a matter for the provisional liquidator to decide upon,
Uncle Haaroon interfered
with this discretion, and insisted that the
respondent be closed which prejudiced not only the respondent, but
also its employees.
[36] As I have previously mentioned I
have serious concerns about the veracity of the information placed
before this court by the
applicant and the manner in which it sought
to do so. What is clear is that the applicant and Uncle Haroon
conducted business
with the respondent in what has been described as
a ‘loose basis’ concerning the supply of stock and on the
terms as
outlined by the respondent. I agree with Mr Lawrence that
the fact that applicant might now be unhappy with this situation does
not constitute grounds for winding up and certainly not on the basis
that it is just and equitable to do so.
[37] I am not persuaded that the
respondent failed to make monthly payments as it had agreed upon and
the evidence further does
not support a finding that the respondent
is unable to pay its debts.
[38] On the evidence presented by the
respondent, respondent appears to be a successful going concern with
a substantial turnover
which for the period March to October 2014
exceeded R6,2 million, almost equalling the turnover for the entire
previous financial
year. It appears to have assets in excess of R2,5
million and it is paying its debts as and when they fall due. The
applicant
itself valued the business for at least R12 million through
the offer of R4 million for a 30% share in the business.
[39] It is not the task of this court
to speculate as to, or to try to determine what amount, if any, is
owing by the respondent
to the applicant and or how these amounts are
arrived at. As I have previously mentioned, there are material
disputes of fact
between the parties in relation to what the terms of
the agreement between them are, and in relation to the amount owing.
In my
view these disputes should rather be resolved by action
proceedings as opposed to liquidation proceedings. On the whole I am
not
persuaded that the applicant has established that the respondent
is unable to pay its debts or that it is just and equitable for
the
respondent to be finally wound up. The application for the final
liquidation order must therefore fail.
The issue of costs arising out of the
unsuccessful Rule 6(8) application
[40] I turn now to deal briefly with
the issue as to whether the respondent’s directors ought to be
held liable personally
for the costs of the unsuccessful Rule 6(8)
application in terms of which they applied to the court for an order
that the respondent
be allowed to trade in the interim. It is clear
that the Rule 6(8) application was brought by the directors
personally after the
respondent had been placed in provisional
liquidation. I am satisfied that at the time that they brought the
application that
they had no authority to do so. Since they did not
have the necessary locus standi it follows that they must bear the
costs of
the abortive application in their personal capacities.
[41] In the result I make the following
order:
1. The provisional order of
liquidation is discharged and the applicant is ordered to pay the
costs of suit.
2. The respondent’s directors
Messrs Liyaqat – Ali Ebrahim and Abdul Quayum Ebrahim are
ordered to pay the costs of
the Rule 6(8) application under the above
case number on the scale as between party and party jointly and
severally, the one paying
the other to be absolved.
RILEY, AJ