About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2015
>>
[2015] ZAWCHC 90
|
|
Van Der Merwe and Others v Zonnekus Mansion (Pty) Ltd and Others (4653/2015) [2015] ZAWCHC 90; [2015] 3 All SA 659 (WCC) (10 June 2015)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE
NO: 4653/2015
DATE:
10 JUNE 2015
REPORTABLE
In
the matter between:
GARY
WALTER VAN DER
MERWE
...........................................................................
First
Applicant
CANDICE
JEAN VAN DER
MERWE
......................................................................
Second
Applicant
THE
TRUSTEES FOR THE TIME BEING OF THE EAGLES TRUST
................
Third
Applicant
BANK
ON ASSETS GLOBAL (PTY)
LTD
...............................................................
Fourth
Applicant
HELIBASE
SWAZILAND (PTY)
LTD
.........................................................................
Fifth
Applicant
And
ZONNEKUS
MANSION (PTY) LTD (in
liquidation)
..............................................
First
Respondent
THE
LIQUIDATORS OF ZONNEKUS MANSION (PTY) LTD
(in
liquidation)
...........................................................................................................
Second
Respondent
THE
STANDARD BANK OF SOUTH AFRICA
LTD
............................................
Third
Respondent
ABSA
BANK
LTD
.....................................................................................................
Fourth
Respondent
BANK
ON ASSETS HOLDINGS (PTY)
LTD
...........................................................
Fifth
Respondent
THE
COMMISSIONER FOR THE SOUTH AFRICAN
REVENUE
SERVICE
.................................................................................................
Sixth
Respondent
THE
COMPANIES AND INTELLECTUAL
PROPERTIES
COMMISSION
.............................................................................
Seventh
Respondent
Court:
Ferreira AJ
Date
of hearing: 28 May 2015
Date
of judgment: 10 June 2015
JUDGMENT
FERREIRA
AJ
1.
This
is an application in terms of Uniform Rule 6(5)(d) to decide a point
of law and related relief. The Third and Sixth Respondents
both
filed notices in terms of Uniform Rule 6(5)(d)(i),
[1]
wherein they seek the adjudication of the following point of law
(“the point of law”):
Whether
it is competent to commence business rescue proceedings in terms of
Section 131(1) of the Companies Act, 71 of 2008 (“the
Companies
Act&rdquo
;) when a company is in final liquidation.
2.
The point of law to be decided together
with the further relief, emanates from a business rescue application
(“the BRA”)
launched by the First to Fifth Applicants
(hereinafter “the Applicants”) on 13 April 2015 in
respect of Zonnekus Mansions
(Pty) Ltd (in liquidation)
(“Zonnekus”). The Third to Sixth Respondents
contend that a detailed response in respect
of the BRA will be costly
and time consuming, given the fact that the BRA is complex and
comprises of over 500 pages, this reasoning
makes practical sense.
3.
The Third Respondent, as a cautionary
measure, brought an interlocutory application to have the point of
law adjudicated urgently.
The questions of urgency and the
procedure followed, by bringing an interlocutory application in
respect of the point of law, cannot
in the circumstances be
criticised. The sole purpose, which is to the benefit of all
the parties, was to have the point of
law adjudicated soonest and to
avoid delay and unnecessary costs. The Sixth Respondent clearly
aligned itself with this approach.
4.
Although there has been some reluctance on
the part of the Applicants, it is apparent that the adjudication of
the point of law,
and if required the BRA, is to be dealt with
urgently.
5.
On 22 April 2015 the learned Gassner AJ
ordered that the adjudication of the point of law be heard on the
semi-urgent roll on 28
May 2015, with the parties to file their
respective heads of argument on specific dates. The parties
have complied with this
order. The Applicants were represented by Mr
P Tredoux and the Third Respondent by Mr G Woodland SC and the Sixth
Respondent by
Mr J G A Snyman SC. Detailed heads of argument
were presented by the Applicants, Third and Sixth Respondents, I
thank them
for this.
6.
It is understood from the papers, that the
First, Second, Fourth and Seventh Respondents abide the decision of
this Court, them
having not opposed the relief sought by the Third
Respondent in the interlocutory application. They also did not
indicate their
stance in respect of the point of law, to be decided.
7.
The
core difference between the Applicants and the Third and Sixth
Respondents in respect of the point of law lay in the fact that
a
number of judgments relied
[2]
upon by the Applicants all from the different divisions of the
Gauteng High Court ruled that a business rescue application may
be
brought even after a final winding-up order has been granted.
Conversely
[3]
there was one
judgment from the Gauteng High Court, held at Pretoria, which does
not follow this line of reasoning, and so did
the judgment of the
Honourable learned Mr Justice Rogers in this division.
[4]
8.
On
28 May 2015, I was thus tasked with deciding the point of law,
ancillary relief sought by the Third to Sixth Respondents
[5]
emanating from the debate in Court, and if the point of law was found
in favour of the Third to Sixth Respondents, what happens
to the
BRA. In this regard it was submitted by those Respondents that
the BRA ought to be dismissed and the question of costs
which
included the costs of 22 April 2015, when Gassner AJ made the order
regulating the conduct of this matter, ought to be paid
by the
Applicants. The Applicants on the other hand contended that the
point of law ought to be decided against the Third
and Sixth
Respondents, and in which event, they are not to be given an
opportunity to oppose the BRA. In such event it was
also
contended that the Third and the Sixth Respondents were to pay the
costs of the interlocutory application and the adjudication
of the
point of law, jointly and severally, payment by the one, to absolve
the other.
9.
The
Applicants in furtherance of the above submissions submitted that the
Third and the Sixth Respondents are not entitled to have,
as they put
it, a second chance by opposing the business rescue application and
filing answering affidavits. The reasoning, in
a nutshell, is that
the Third and Sixth Respondents were required to file their answering
affidavits in order to oppose the BRA
and cannot do so if they should
lose the point of law. In this regard the Applicants contended
that they would present full
legal argument at the hearing of the
matter.
[6]
At the hearing
Mr Tredoux contended mildly that the Third to Sixth Respondents have
lost the opportunity to file answering
affidavits, and should be
denied this opportunity. I do not agree with him, the Third and
Sixth Respondents in the circumstances
followed a perfectly reasoned
and logical stance, therefore they should be entitled to file
answering affidavits, and have their
opposition to the BRA
adjudicated by this Court, if the point of law should go against
them.
10.
On
27 May 2015, late in the afternoon, the unreported judgment of the
learned Mr Justice Rogers (“Rogers J”) herein
referred to
as the
Molyneux
judgment, whilst doing my research prior to the hearing of this
matter, came to my attention.
[7]
None of the parties had referred to this judgment. I
transmitted copies thereof to the respective counsel, in order
to
make them alive to this judgment. The
Molyneux
judgment, in my view, disposed of the point of law in the Third to
Sixth Respondents’ favour. Bearing in mind the principle
of
stare
decisis
,
I at that juncture was effectively bound by that judgment. On
28 May 2015, I however did reserve judgment to consider all
the
arguments, and to write a reasoned judgment, knowing that whatever I
decided would be the subject of an appeal.
11.
Miraculously
on 1 June 2015, I read the SCA judgment in
Richter
[8]
on Saflii (“the
Richter
SCA judgment”), it having been published in the course of that
day, the aforesaid judgment, because of the principle of
stare
decicis
,
clearly decided the law point in the Applicants’ favour.
I accordingly, in view of the
Richter
SCA judgment, invited counsel to provide further submissions if they
so wished. On 4 and 5 June 2015, I received the Applicants’
and Sixth and Seventh Respondents’ submissions, dealing with
the
Richter
SCA judgment.
12.
In
the Applicants’ initial heads of argument they did not make
anything of the Third and Sixth Respondents’ contentions
that
in
Richter
v Bloempro CC and Others
[9]
the learned Mr Justice Bam (“Bam J”) considered the
question: “
Whether
it is in law permissible, or possible, to grant business rescue
procedure after a final liquidation order was granted.”
This
question was considered by Bam J with reference to Section 131 of the
Companies Act, 71 of 2008 (“the
Companies Act&rdquo
;), and
specifically the words “…
may
apply … at any time for an order placing the company under
supervision and commencing business rescue proceedings”
,
Section 128
of the
Companies Act the
definition of “
business
rescue”
and “
financially
distressed”
and
the wording of
Section 132
of the
Companies Act dealing
with the
duration of business rescue proceedings and more specifically
Section
132(2)
in relation to when business rescue proceedings end. Bam
J concluded that the legislature intended to provide for business
rescue proceedings only prior to the granting of a final liquidation
order.
[10]
Reaching this
conclusion Bam J made mention of the fact that he differed from the
judgment of the learned Makgoba J in
Absa
Bank Ltd v Summer Lodge
.
[11]
13.
It
thus follows that there were dissenting judgments in the diffident
divisions of the Gauteng High Court regarding the point of
law, prior
to the
Richter
SCA judgment. In this Court, Rogers J in the
Molyneux
judgment
[12]
doubted that
Absa
Bank Ltd v Summer Lodge
and
Absa
Bank v Makuna Farm
were correctly decided.
14.
In
Ex
parte
Minister of Safety & Security: In re S v Walters
[13]
the learned Justice Kriegler, held with regard to the doctrine of
stare
decicis
[14]
that:
“
This
statement of principle and the warning it contains are in point in
the present case. According to the hierarchy of Courts
in
chapter 8 of the Constitution, the SCA clearly ranks above the High
Courts. It is the highest Court of Appeal except in
constitutional matters. Neither the fact that under the interim
Constitution the SCA had no constitutional jurisdiction nor
that
under the (final) Constitution it does not enjoy ultimate
jurisdiction in constitutional matters, warrants the finding that
its
decisions on constitutional matters are not binding on High Courts.
It does not matter, as Cloete J correctly observed
in ‘Bookworks’,
that the Constitution enjoys all Courts to interpret legislation and
to develop the common law in accordance
with the spirit, purport and
objects of the bill of rights. In doing so, Courts are bound to
accept the authority and the
binding force of applicable decisions of
higher tribunals.”
15.
The
cases in support of the approach in the
Richter
SCA judgment are,
Van
Staden
,
Absa
Bank Ltd v Summer Lodge (Pty) Ltd
per the learned Mr Acting Justice Van der Bijl (“Van der Bijl
AJ”),
Absa
Bank Ltd v Summer Lodge (Pty) Ltd
per the learned Mr Justice Makgoba (“Makgoba J”) and
finally
Absa
Bank Ltd v Makuna Farm CC
per the learned Mr Justice Boruchowitz (“Boruchowitz J”)
[15]
.Cases which hold the
contrary views are
Molyneux
per Rogers J and
Richter
in the Court
a
quo
,
per Bam J.
[16]
It is noted
that in the
Richter
SCA judgment, the SCA did not refer to the
Molyneux
case, nor the judgments of Van der Bijl AJ or Boruchowitz J.
16.
The reasoning in the
Richter
SCA judgment is found in paragraphs 10, 17 and in particular
paragraph 17. The SCA observed that there is no sensible
justification
for drawing the proverbial line in the sand between
pre- and post- final liquidation in circumstances where the prospects
of success
of business rescue exist, as the legislature did not do so
and to restrict business rescue to those cases in which a final
winding-up
order had not been granted could be inimical to the Act.
17.
I
am bound by the
Richter
SCA judgment, even though I respectfully differ therewith, given the
reasoning in the judgments of Bam J and Rogers J referred
to
supra
.
The Third and Sixth Respondents contended that the Court hearing the
BRA ought to adjudicate the issue of the costs of the interlocutory
application and the hearing thereof, in my view the Applicants are
successful given the
Richter
SCA judgment, and they are thus entitled to their costs.
[17]
It would be wrong to leave the exercise of that discretion to another
Court, when I in fact decided the point of law and
matters related to
the interlocutory application. The general rule is that the
successful litigant is entitled to costs,
I do not see any reason why
I should deviate from this.
18.
I propose the following order:
18.1
It is competent to commence business rescue
proceedings in terms of
Section 131(1)
of the
Companies Act, 71 of
2008
, when a company is in final liquidation.
18.2
That the Third and Sixth Respondents be
granted 15 days to file their answering affidavits, if any, and the
Applicants 10 days to
file their answering affidavit, if any.
18.3
That the parties file heads of argument in
accordance with the practice directives of this Court or, as agreed
by them.
18.4
That this matter be postponed to the
semi-urgent roll to the earliest date upon which the parties are able
to agree, alternatively
that such date be determined by the Judge
President of this Court.
18.5
That
the Third and Sixth Respondents pay the costs of the interlocutory
application and the costs of deciding the point of law,
which shall
include the costs of 22 April 2015, jointly and severally, payment by
the one to absolve the other.
[18]
FERREIRA,
AJ
[1]
“
(d)
Any person opposing the grant of an order sought in the notice of
motion shall - (iii) if he or she intends to raise any question
of
law only he or she shall deliver notice of his or her intention to
do so, within the time stated in the preceding sub-paragraph,
setting forth such question.”
[2]
Van
Staden v Angel Ozone Products CC (in liquidation) and others
2013(4) SA 630 (GNP);
Absa
Bank Ltd v Summer Lodge (Pty) Ltd
2014(3) SA 90 (GP);
Absa
Bank Ltd v Summer Lodge (Pty) Ltd
2013(5) SA 444 (GNP);
Absa
Bank Ltd v Makuna Farm CC
2014(3) SA 86 (GJ)
[3]
Richter
v Bloempro CC and Others
2014(6)
SA 38 (GP) by the learned Mr Justice Bam
[4]
R
J C Molyneux & Another v M I Patel & Others
(14618/2014)
[2014] ZAWCHC 191
(27 November 2014)
[5]
The
Third to Sixth Respondents are affected persons as defined in the
Companies Act.
>
[6]
Record,
p 34, para 68
[7]
Sub
nom
R
J C Molyneux & Another v M I Patel & Others
(14618/2014)
[2014] ZAWCHC 191
27 November 2014.
[8]
Richter
v Absa Bank Ltd
(20181/2014)
[2015] ZASCA 100
(1 June 2015)
[9]
2014(6)
SA 38 GP
[10]
See
the last sentence of para 17 at 42 F - G and the reasons provided
thereafter in para 18 at 42 G to 43 J.
[11]
2013(5)
SA 444 (GNP) at para 18, 448 A - C
[12]
P
ara
28 and 29
[13]
2002(4)
SA 613 at 644 D - E
[14]
644
D - J; 645 A - H; 646 A - F
[15]
Refer
to footnote 2 for the case references
[16]
Vide
De
Jure 47 Vol 2 2014, p 329: in this article the judgment of Bam J is
considered to be correct. The article’s heading
is:
[17]
Cilliers
The Law of Costs: 2-08
[18]
The
general rule is that costs follow the event.
Vassen
v Cape Town Council
1918 CPD 360