Goldfinch Garments CC and Another v Sheriff of the Court - Newcastle and Another (D393/11) [2013] ZALCD 21 (5 July 2013)

Goldfinch Garments CC and Another v Sheriff of the Court - Newcastle and Another (D393/11) [2013] ZALCD 21 (5 July 2013)

The court found that the creation of the second applicant was a scheme designed to assist the business operated by the first and/or second applicants to avoid legal obligations towards employees and the second respondent, amounting to fraud. The evidence of Han was found to be lacking in credibility and inconsistent with documentary evidence and affidavits. The court held that the applicants attempted to obtain the advantages of separate corporate identity when convenient, but ignored it otherwise. Applying the principles from Cape Pacific and Airport Cold Storage, the court determined that lifting the corporate veil was justified. The first and second applicants were treated as one...

Citation
[2013] ZALCD 21
Parties
Applicant: Goldfinch Garments CC; Applicant: JCR Clothing CC; Respondent: Sheriff of the Court - Newcastle; Respondent: National Bargaining Council for the Clothing Manufacturing Industry (KZN Region)
Court
Labour Court Durban
Jurisdiction
South Africa
Judgment Date
5 July 2013
Case Number
D393/11
Procedural Posture
Interpleader Application / Judgment After Hearing
Outcome
Applicants' claim dismissed. The attached property is properly subject to execution. Applicants are ordered to pay costs on an attorney and client scale.
Judges
D H Gush
Legal Topics
Piercing Corporate Veil, Interpleader Proceedings, Joint and Several Liability, Arbitration Award Enforcement, Fraudulent Conduct
Labour Law Civil Procedure Piercing Corporate Veil Interpleader Proceedings Joint and Several Liability Arbitration Award Enforcement Fraudulent Conduct

Case Brief

Summary, issues, holding and outcome

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Parties

Goldfinch Garments CC

Applicant

JCR Clothing CC

Applicant

Sheriff of the Court - Newcastle

Respondent

National Bargaining Council for the Clothing Manufacturing Industry (KZN Region)

Respondent

Procedural Posture

Interpleader Application / Judgment After Hearing

Legal Issues

  1. 1 Whether the property attached by the Sheriff belongs to the applicants or to third parties.
  2. 2 Whether the creation of the second applicant was a scheme to evade legal obligations and justifies piercing the corporate veil.
  3. 3 Whether the applicants are jointly and severally liable for the arbitration award and writ of execution.

Ratio Decidendi

The court found that the creation of the second applicant was a scheme designed to assist the business operated by the first and/or second applicants to avoid legal obligations towards employees and the second respondent, amounting to fraud. The evidence of Han was found to be lacking in credibility and inconsistent with documentary evidence and affidavits. The court held that the applicants attempted to obtain the advantages of separate corporate identity when convenient, but ignored it otherwise. Applying the principles from Cape Pacific and Airport Cold Storage, the court determined that lifting the corporate veil was justified. The first and second applicants were treated as one...

Court Disposition

Applicants' claim dismissed. The attached property is properly subject to execution. Applicants are ordered to pay costs on an attorney and client scale.

Orders

  • The applicants’ claim is dismissed.
  • The property attached by the first respondent as listed in the inventory and notice of attachment is properly attached and the process of execution may proceed.