Blue Cell (Pty) Ltd and Another v Blue Financial Services Limited and Others, Blue Cell Financial Services Limited v Blue Cell (Pty) Ltd (3489/07 , 8456/07) [2007] ZAGPHC 88 (9 May 2007)

1

IN THE HIGH COURT OF SOUTH AFRICA (WITWATERSRAND LOCAL DIVISION) Date: 09/05/2007 Case Number: 3489/07

UNREPORTABLE

In the matter between

BLUE CELL (PTY) L TD WAYNE ANTON MOSTERT

First Applicant Second Applicant

And

BLUE FINANCIAL SERVICES LIMITED First Respondent

BLUE EMPLOYEE BENEFITS (PTY) LTD Second Respondent VAN NIEKERK, DAVE Third Respondent SMIT, WESSEL Fourth Respondent JSE LIMITED Fifth Respondent

And

IN THE HIGH COURT OF SOUTH AFRICA (TRANSV AAL PROVINCIAL DIVISION)

Case number: 8456/07

In the matter between

BLUE FINANCIAL SERVICES LIMITED Applicant

And

BLUE CELL (PTY) LTD Respondent

JUDGMENT

2

INTRODUCTION

1.) These two applications were heard together. They involve, with the exception of the fifth respondent in the first application, the same parties and arise from the same facts. 2.) The application launched in the Witwatersrand Local Division will be referred to as the "application for specific performance", the one launched in the Transvaal provincial Division as the "liquidation application". 3.) The applications are a reflection of extensive personal disputes and severe personal resentments that have arisen between the directors and shareholders of the companies through which the parties had hoped to conduct business to their mutual benefit and profit.

4.) The personal feelings that permeate the applications have allowed this litigation to proliferate to unacceptable proportions. The papers exceed a thousand pages filled with repetitive and argumentative recriminations, mostly from the side of the second applicant in the specific performance application. His affidavits are replete with personal attacks and accusations of dishonest and improper conduct on the part of the third respondent and his associates. These are presented in an aggressive and derogatory style that should have no place in litigation to have disputes that inevitably arise in the conduct of human affairs, resolved in a fashion that recognizes and respects the dignity of the forum before which they are argued.

5.) The matters needed to be resolved with some urgency. I regret that other commitments and my absence on Circuit Court have delayed the finalization of the judgment and I apologize to the parties for the inconvenience this has caused.

3

THE RELIEF SOUGHT

6.) In the specific performance application, the applicants therein seek to enforce the terms of an agreement entered into between the first applicant and the first respondent, coupled with an interdict to prevent interference in the conduct of the first applicant's business. Costs are sought on the scale of attorney and client.

7.) This notice of motion contains a further prayer that the first respondent's (in that application) shares be suspended from trade on the Johannesburg Stock Exchange (ALTX), pending compliance by the first respondent with terms and conditions of an agreement entered into by the parties other than the Stock Exchange to the application; alternatively pending an investigation by the fifth respondent into circumstances of the listing relating to the first applicant's position in regard thereto.

8.) This prayer was not persisted with, indeed, the application was never served upon the fifth respondent. This aspect of the application will be dealt with in more detail below. 9.) In the liquidation application, the first respondent in the specific performance application seeks the liquidation of the first applicant in that application. 10.) Both applications are opposed.

THE PARTIES

11.) The parties are referred to as in they appear in the specific performance application. The first applicant in that application is the respondent in the liquidation application brought by the first respondent in that application.

12.) The first applicant is BLI\UE CELL (PTY) L TO, a company with limited liability, conducting business in the cellular and airtime

4

service field with principal place of business at 43 Peter Place, Lyme Park, Sandton.

13.) The second applicant is WYNE ANTON MOSTERT, a major director and shareholder of one third of the shares in the first applicant, residing at 4 Muirfield, The Glades, Dainfern, Sandton. 14.) The first respondent is BLUE FINANCIAL SERVICES LIMITED, a public company listed on the Johannesburg Stock Exchange with its principal place of business at 34 Bouvardia Avenue, Lynnwood Ridge, Pretoria. 15.) The second respondent is BLUE EMPLOYEE BENEFITS (PTY) LIMITED, a company with limited liability and principal place of business at 34 Bouvardia Avenue, Lynnwood Ridge, Pretoria. It is a wholly owned subsidiary of the first respondent. 16.) The third respondent is DAVE VAN NIEKERK, an adult director of the first applicant and first and second respondents with business address at 34 Bouvardia Avenue, Lynnwood Ridge, Pretoria.

17.) The fourth respondent is Wessel Smit, an adult director of first applicant and first and second respondents with the same business address as the first to third respondents.

18.) The fifth respondent is the JOHANNESBURG STOCK EXCHANGE LIMITED, a company with limited liability, licensed as an exchange in terms of the Security Services Act, Act 36 of 2004. As the application was never served upon this respondent, it is not included when reference is made to "the respondents", but in the discussion of the effect of the inclusion of the aforementioned prayer to suspend the trading of first respondent's shares, it will be referred to specifically.

THE BACKGROUND FACTS

19.) The parties' association dates from November 2004. They decided to enter a joint business venture to sell cellular phones and airtime to the lower end of the market that they could access through existing channels in the micro-lending industry.

5

20.) A dormant company was used for the purpose of the joint venture. After some intermediate stages, the joint venture crystallized in the creation of the first applicant, in which the second applicant would hold one third of the shares and the first respondent two thirds. 21.) There is a dispute about the question whether the first or the second respondent would hold the two third shares, but in the end result the parties are in agreement that the first respondent is the present holder of these shares. 22.) The second applicant would contribute his know-how and knowledge of the cellular phone market to the business, whereas the first respondent would be responsible for the funding of the first applicant's operating expenses until it became self-sufficient, together with the provision of administrative functions such as collection of monthly installments, the warehousing of stock and distribution of hand-sets. 23.) The business as conducted by the first applicant was not as successful as the parties would have liked. The first respondent's directors and shareholders were disappointed with the lack of financial benefits from the first applicant's activities and blamed the second applicant for the apparent failure of the venture.

24.) The versions differ regarding the nature of the subsequent events. Second applicant alleges that his co-directors attempted to exclude him from the first applicant's operations prior to the first respondent's listing on the JSE, the respondents are of the view that the disputes were caused by the apparent failure of the second applicant to make good his undertakings. 25.) Be that as it may, the parties entered into a settlement agreement that was designed to resolve their differences and is referred to as "the June Agreement". 26.) The June agreement is dealt with in greater detail below. Suffice to say at his stage that it provides for further funding of the first applicant by the first respondent and. its subsidiary, the second respondent ("the Blue Group"), on the basis of a budget to be prepared by the auditor appointed for that purpose.

6

27.) The applicants argue that this funding is in the nature of a capital contribution to the first applicant in exchange for the first respondent's two-thirds shareholding in the first applicant, while the respondents maintain that the funding constitutes a repayable loan. 28.) The budget was not prepared by an auditor, but by the second applicant and was approved by the first applicant's board of directors. This budget reflected a "high road" leading to break-even of the first applicant's activities by February 2007, while the "low road" would achieve that result by July 2007. 29.) The projected results were not achieved, on the contrary, the results of the first applicant's activities were nothing short of poor ­a meager total of 78 cellular phones were sold until November 2006, according to the respondents. 30.) The applicants blame the respondents for the sad state of affairs and allege that the agreed funding was not fully rendered, if at all, while the moneys earned by the first applicant and collected by the first or second respondent were not paid to the company as the respondents were obliged to do. As a result of this manipulation, as the applicants would have it, the first applicant failed to achieve its objectives. 31.) The respondents dispute that they are responsible for the lack of success on the first applicant's part and allege that the second applicant was unable to make good his promises because of a lack of skill, knowledge and know-how.

32.) A meeting of the first applicant's board of directors was held on the 25th November 2006. It resolved to discontinue the funding to the first applicant until the nature of the funding had been resolved. The applicants maintained that the funding constituted equity and that the respondents were obliged to continue to provide the same regardless of the first applicant's interim commercial success until July 2007. The respondents argue that the contributions are a loan and the lack of the first applicant's commercial success entitled them to suspend any further funding that would not be recoverable.

I ~ I

~ I

I I I L I

I I I

~ I

~

I

\

I I

I

I I

\

I

I

I I I

: I

I

I I I

7

33.) The second applicant was informed of the decision to discontinue the funding on the 5th December 2006, not having been invited to the board meeting at which this decision was taken. 34.) An urgent application to hold the respondents to their funding undertaking was launched by he applicants in the WLD, substantially on the same grounds that the present application is based upon, but without joining the fifth respondent.

35.) The respondents argue that the second applicant lacked the necessary authority to launch any proceedings on behalf of the first applicant, as he is only a minority shareholder and director, and that he still lacks such authority to do so in these proceedings. The second applicant relies on the argument that the first applicant is the victim of unlawful conduct by the respondents and that he is therefore entitled to launch the so-called derivative action. This will be dealt with below.

36.) The December 2006 urgent application was not proceeded with as the respondents agreed to make certain payments in respect of salaries, rental and the telephone account. The application was postponed sine die and has not been resolved, leaving the question open whether the applicants could be met by the dilatory defence of lis pendens. 37.) Various meetings were thereafter held between the first applicant and the third respondent that have failed to resolve the differences between the parties. 38.) No funding has been provided to the first applicant since the beginning of the year. The parties are ad idem that without such funding the first applicant cannot survive. 39.) First respondent argues in the liquidation application that the first applicant is indisputably insolvent and that, in any event, the directors are deadlocked and that the relationship between them has deteriorated to such an extent that the further conduct of the first applicant's business has become impossible. 40.) The opposite contentions are weighed up below.

I I , I ,

I I I

I

,

I I I

I ~

8

THE JUNE AGREEMENT

41.) The June agreement has been reduced to writing. Absent any ambiguity or failure to correctly capture the parties' intention requiring rectification, it should therefore be the only source to determine whether the funding that respondents should provide is of a capital nature or amounts to a loan. 42.) The relevant provisions of the agreement read as follows:

"D. The provisions of this agreement will take precedence over any conflicting provision in the articles of association and memorandum of incorporation of the Company."

INITIAL PERIOD

1. The business of the company was conducted up to 5 April 2006 by the shareholders and directors of the Company, and since 5 April up and to the signature of this agreement by the directors and shareholders of the company to the exclusion of Wayne (hereinafter 'the initial Period').

2. During the Initial period, the agreed contributions by the parties to the joint venture, which materialized in the establishment of the Company, and the parties entitlement to equity, was that in exchange for his third of the shares Wayne would move over from the business that he was involved in at the time, to further the business of the company by applying his knowledge and know how and more specifically for the purposes of managing the sales of the business of the Company, and for securing agreements on behalf of the company with service providers of handsets and airtime, and that BEB in return for its two thirds shareholding in the Company, would contribute funding in the form of working capital to finance the day to day business activities and to further the business of the Company. In addition BEB undertook, on an outsourcing basis until such time as the company established itself, to provide the business infrastructure; (which included back-end administration; the procurement, warehousing and distribution of cell phone hand sets); manage the systems whereby bad debt levels are

­

I 1 I ,

I

I I

I

I

9

controlled; and to implement mechanisms to suspend airtime and transfer of lines to new clients; and data-capturing of whatever nature related to the business;

..(The following paragraphs record that the second applicant would receive share options to compensate him for any losses suffered by him as a result of his exclusion from the company business for the period between 5 April 2006 and the date of signature of the agreement.)

"SECOND PERIOD

3. With effect from 1 June 2006 Wayne shall, subject to the terms and conditions hereinafter set out, conduct the business (1he Second Period').

4. From the commencement of the Second Period Wayne, as an executive director, will be entitled to manage the day to day operations of the Company. Blue Group and its directors (where applicable) shall accordingly afford Wayne such authority and financial support as hereinafter defined to enable the Company to achieve 'cell phone income' forecasts attributed to Blue Cell as contained in annexure "A".

5. Wayne shall use his best endeavours to achieve forecasts as referred to in Annexure "A", but does not warrant or give any undertakings in regard thereto.

6. Wayne shall contribute in respect of his one third share in the equity in

the Company, to it his know-how, contacts, goodwill and management of the Company, and BFS, through its subsidiary, to enable the Company to achieve the 'cell phone income' forecasts referred to in Annexure "A". BFS shall contribute in respect of its two third share in the equity of the Company, to it the funding on the basis referred to hereinafter. The Blue Group shall also in addition continue as an outsourced function to provide to the Company the back-end administration, the procurement, warehousing and distribution of cell phone hand sets, and such other systems referred to in clause 2 above. Such funding shall be in cash. If reasonably required for the

­

10

­

furtherance of the business of the company, BFS shall provide guarantees to service providers and suppliers.

7. On or before the 30 June of each year, the Auditor shall appoint a qualified chartered accountant to determine the Company budget for the year commencing 1 July of each year, based on at least the income figures and for the period set out for the cell phone' business in Annexure "A". For this purpose, Wayne shall furnish the Auditor/Accountant with such information as may reasonably be required. The Auditor/Accountant shall furnish the Company and BFS with a month to month budget for the relevant 12 month period, to enable BFS to provide timeously for the funding of the Company. Provided that this budget will be submitted to the board for approval. 8. …(the paragraph provides that BFS shall furnish financial information and know-how to the Company) 10. …(BFS undertakes to provide the Company with information). 11. ... (BFS will continue to provide the back-end administration, but may outsource these services if such is in the best interests of the Company). 12. ... (There shall be no interference with the management of the company conducted by Wayne unless the support of the other directors is reasonably required by him. "13. A quorum for shareholders meetings of the Company shall be shareholders holding no less than 75% of the share capital. No resolution of shareholders shall be of any force and effect if such resolution shall have the effect that any of the terms and conditions of this agreement, or such agreements that are entered into pursuant thereto, are amended or in any manner affected thereby, unless such resolution shall have been tabled pursuant to a unanimous decision of 100% of shareholders of the company. "

14. …(Wayne is the only director of the company to be remunerated until the company trades profitably.) 15. (The financial year-end of the Company is to be February each year.) "16. The parties owe each other the duty of utmost good faith.

17. BEB shall procure that from the commencement of the Second Period it shall capitalize its loan account in the Company whereafter the

­

I

I

I

~

~ I ~ I

I I

I ~

11

Company shall retain only its existing agreements as trading assets and the liabilities linked thereto as current liabilities. The intention being that the effect of the foregoing shall be that, with effect from the commencement of the Second period, the Company shall have no current assets or liabilities carried over from the Initial Period. Notwithstanding the aforementioned all annuity income that was generated in favour of the company before the end of the Initial Period in respect of cellular agreements shall accrue in favour of the company in the second period. "

18. (The blue Group shall not compete with the business of the company).

19. –26. (Wayne is given the option to exchange his shares in the Company for shares in BFS.) 27. (Wayne's service agreement). '28. The parties shall within 14 (fourteen) days of signing hereof enter into shareholders agreement or any other agreementls Incorporating the aforegoing and such other terms and conditions which would usually be applicable to the relationship between the parties." 29. (Wayne shall be given information for the period from 5 April 2005 to date regarding the Company's business). 30. (The Blue Group shall contribute to Wayne's costs.)

"31 This document upon signature is binding upon the parties, it being agreed that a shareholders agreement or such other agreementls necessary to formally articulate the agreement between the parties as recorded herein, shall be entered into within 14 (fourteen) days of date hereof, and unless agreed to in writing, no terms at variance with what is herein contained shall be incorporated into the formal agreements."

THE PARTIES' CONTENTIONS

43.) The applicants claim that the provisions of the June agreement are clear and that, independently of any shareholders' agreement or similar contract still to be entered into, the respondent's are obliged to fund the first applicant until its operations become profitable.

l I I

12

44.) Although the June agreement does not determine a time limit for such funding, it is obvious that the parties expected the first applicant to become a successful business entity within a foreseeable period that mayor may not have exceeded a year. Breakeven was expected, in terms of the budget prepared by the second applicant, by either February 2007 or July 2007. 45.) The acceptance of this budget is common cause and reflects the manner in which the parties themselves interpreted the agreement. 46.) The June agreement is explicit in its terms that reflect an earnest attempt to heal a very serious rift that had occurred between the individuals and the business entities they controlled. Its provisions override existing agreements and the first applicant's articles of association.

47.) The applicants argue strenuously that the funding that the respondents are obliged to contribute through the first respondent constitute capital in return for the two third's shareholding in the first applicant, in the same manner and fashion in which the second applicant is entitled to his one third shareholding as a return for his practical contributions to the first applicant's business. 48.) On the other hand the respondents are adamant that the contributions to the first applicant's business are nothing more than working capital constituting a loan that must be reflected in a loan account.

49.) Although the applicants' contentions appear attractive on the face thereof, there is a very important consideration that strongly suggests that the financial contributions were to be reflected as loans and not as capital to be translated into shareholding. The terms in which the June agreement deal with the funding to be provided in the future are for all intents and purposes identical to those dealing with the funding that was provided during the so called "initial period". During the second period, the respondents are to undertake exactly the same services and contributions that were rendered during the initial period and the cessation of which lead to the original breakdown between the parties.

13

50.) Yet the June agreement is express in recording that the contributions made to the first applicant were regarded as loan capital reflected in a loan account that was capitalized as part of the settlement embodied in the very June agreement. 51.) No reason has been suggested why the same approach should not have been adopted by the parties when the June settlement was entered into. Apart from difficulties that the applicants' approach creates in respect of the determination of the value of the parties' shareholding, the interpretation contended for by the applicants does not make commercial sense. The mere fact that the funding is made available in return for the two third's shareholding cannot translate the contribution into equity - by the same token it could be argued that the second applicant should not receive a salary as he was recompensed by a one third shareholding, which clearly is infeasible. 52.) Quite apart from these considerations, it is clear that the shares in the first applicant had little if any actual commercial value when the agreement was signed. The company's potential, which depended upon the second applicant's ability to manage its business, could only be realized through funding by the respondents, but did not reflect actual commercial value in the company's books or financial statements when the agreement was entered into. 53.) This does not, of

course, mean that the respondents were not obliged to fund the company. 54.) The applicants appear to suggest that the respondents were obliged to continue to fund the first applicant's business indefinitely, regardless of the commercial success or viability of the company. It is difficult to accept this reasoning - the first applicant is a commercial undertaking. If it were to appear that it could not succeed in its enterprise, it would be outlandish to suggest that funding should continue regardless. The eventual commercial viability and profitably of the first applicant is clearly the underlying assumption that the parties shared when the June agreement was entered into.

14

55.) Unfortunately, the different views about the nature of the funding led to the resurrection of the disputes between the parties and the respondents admittedly ceased to fund the first applicant's operations. Further litigation was the inevitable consequence.

THE APPLICATIONS

56.) The applicants seek specific performance of the funding agreement. 57.) That the respondents were, at the stage they ceased to contribute financially to the first applicant's operations, obliged to continue to provide financial support, admits of little doubt, unless it were clearly established at that stage already that he first applicant would never become a commercially successful operation.

58.) The obligation to fund is, in terms of the agreement quoted above, independent of the question whether the funding is to be regarded as a capital contribution or as loan capital. That issue was at all times capable of resolution without throttling the first applicant's activities.

59.) The applicants were therefore entitled, in principle, to approach the Court to ensure the continued existence of the first applicant in the light of the prima facie unlawful cessation of the financial support on the part of the respondents. 60.) The latter raised a welter of technical objections to the application. Principal among these were the second applicant's locus standi and the fact that the first applicant was joined as an applicant and not as a respondent. 61.) The applicants argue that the discontinuation of the funding amounts to a wrong on the first applicant, that the company itself cannot act as it is at the mercy of the majority constituted by the respondents who withhold funds unlawfully from the second applicant and that the minority shareholder and director is therefore entitled to launch the application in its present form. Applicants describe the procedure they have followed as the common law derivative action by the minority shareholder acting against the

.1

15

"'!

unlawful conduct of the majority: TWK Agriculture Ltd v NCT Forestry Co-Operative Ltd and Others 2006(6) SA 20 (N); Golf Estates (Pty) Ltd v Malherbe 1997 (1) SA 873 (C).

62.) The respondents object to the fact that the first applicant has been joined as an applicant, arguing that the classical derivative action sees the minority shareholder act in his own name and joining the company as a respondent. I agree with Mr Joubert SC that the essence of the derivative action is the need to bring the company that is the victim of the majority before the court, and the procedural fashion in which this object is achieved, is of secondary importance. In principle, the company ought to be the plaintiff or applicant and it is therefore logically more acceptable to have the company cited as such, as has been argued convincingly by Oliver Conrad Schreiner in the South African Law Journal, 1979, in the article entitled "The Shareholder's Derivative Action - a Comparative Study of Procedures" on p 203. 63.) Although the applicants must therefore be regarded as being correctly before the Court, and although there appears to be a prima facie case for the relief they seek, it is a different question whether the Court should, in the exercise of its discretion, grant the order for specific performance. It is trite that the Court may, in an appropriate case, refuse an action of this nature: Klimax Manufacturing Ltd and Another v Van Rensburg and Another 2005(4) SA 445 (O), and the authorities there cited. 64.) In the present matter there are persuasive arguments and

substantial grounds that stand in the way of granting the orders sought. In the first instance, there is very little chance, if any, that the order will quell the ongoing dispute between the parties. It will in the second instance be extremely difficult to police the order. Thirdly, there is no compelling evidence before the Court that the first applicant will eventually be able to stand on its own feet financially. On the contrary, there is every indication that it has struggled to take off, hampered not only by the clash of personalities in the boardroom, but also by the lack of market

­

.

16

penetration. The second applicant has painted rosy pictures of its potential, but there is little hard fact to inspire confidence in its viability. Fourthly, the interdicts against interference in the management of the company will be as difficult to enforce and to oversee as the degree of specific performance and will prove to be a substantial measure of oil poured upon the fire rather than upon troubled waters.

65.) But most importantly, the order should not be granted because of the complete breakdown of trust between the shareholders and directors. The papers provide ample proof of the progressive deterioration of the relationship between the individuals that control the corporate entities. There have been continued disputes, acrimonious recriminations, heated accusations and angry responses that have paralyzed the first applicant's business more than once. Efforts to heal the rifts have led directly and immediately to further boardroom battles.

66.) Any suggestion that the parties could ever co-operate with one another again was dispelled by the way in which the second applicant and his attorney of record conducted the litigation. The attorney is the second applicant's father and therefore acted perhaps rather less than wisely when he accepted the instruction to represent his son in litigation in which emotion always overruled reason, measured if impolite discourse and common sense. The papers filed on behalf of the applicants have been commented upon in the introduction to this judgment and no repetition thereof is required. Whatever the nature of the parties' disputes, the way in which the litigation was conducted is regrettable, quite apart from the fact that the papers have ballooned beyond all proportions. 67.) The worst feature of the approach adopted by the applicants is the fact that the fifth respondent was joined in these proceedings and that a number of pages were filled with grave accusations regarding the respondents' conduct that would allegedly require the immediate suspension of the first respondent's shares and an investigation by the fifth respondent into its affairs and those of the

.

'I I

17

first applicant. The second applicant never intended to serve the application upon the fifth respondent because, had his accusations been acted upon, he would successfully have cut his nose to spite his face.

68.) He therefore purported to join the fifth respondent purely in an attempt to terrorize the other respondents and to scare them into a settlement. Such conduct is an abuse of the process of this Court. 69.) The respondents are therefore correct when they argue that the parties have become deadlocked. If this argument could perhaps have been met by a reasonable response emphasizing the mutual benefit to all parties if they continued their combined efforts to develop the first applicant's business, the approach adopted by the second applicant to the litigation made any future co-operation impossible. The June agreement demands the conduct of the first applicant's affairs by consensus. This can never be achieved under the present state of affairs. It would require governance of the first applicant by judicial decree, not by the directors and shareholders. 70.) The application for specific performance must therefore be refused.

71.) Once this is the case, it is common cause that the first applicant is insolvent, apart from being unable to conduct business. The only answer to that problem is the granting of the liquidation order sought by the first respondent. 72.) This judgment has dealt only with the principal dispute between the parties. Several issues irrelevant to the outcome have not been touched upon, (such as the issue of lis pendens, the upholding of which would have been in nobody's interest), in order to finalize this judgment as soon as possible and to prevent its length from approximating that of the papers.

73.) This leaves the issue of costs.

74.) All parties have argued for the cost of two counsel and for punitive cost orders against one another.

75.) In exercising the court's discretion, it must be borne in mind that the respondents must share part of the blame, albeit a substantially lesser part, for the breakdown of the relationship between the

II II

~ I

18

shareholders. Their refusal to continue funding once the dispute arose about the nature thereof was unjustified, at least at that stage.

76.) For this reason, no punitive costs orders will be made. The following orders are made:

A. The application launched under case number 3489/07 in the Witwatersrand Local Division is dismissed with costs, such costs to include the costs of two counsel and the costs reserved as a result of postponements and the transfer of the application to the Transvaal Provincial Division; B. The respondent in application number 8456/07, launched in the Transvaal Provincial Division,

(i) is finally wound up;

(ii) The order of winding up is to be served upon the respondent's registered office by the Deputy Sheriff;

(iii) The order is to be published once in the Government Gazette and in the Citizen and Star newspapers; (iv) Notice of the order is to be given by registered post to all known creditors; (v) The costs of the application are to include costs of two counsel and costs reserved at earlier postponements; (vi) The costs of the application are to be costs in the winding-up, with the exception of costs of opposition.

Signed at Pretoria on the 9th of May 2007.

E Bertelsmann Judge of the High Court