Klopper NO and Others v Anthillsap (Pty) Ltd (13375/06) [2006] ZAGPHC 71 (1 August 2006)

IN THE HIGH COURT OFSOUTH AFRICA[TRANSVAALPROVINCIAL DIVISION]CASE NO. 13375/06In the matter between

IN THE HIGH COURT OF

SOUTH AFRICA

[

TRANSVAAL

PROVINCIAL DIVISION]

CASE NO. 13375/06

In the matter between

JOHANNES FREDERIK KLOPPER N.O

First Applicant

LISL ANNA LAUBSCHER N.O.

Second Applicant

MARIA PETRONELLA YSSEL N.O

.Third Applicantand

Third Applicantand

and

ANTHILLSAP (PTY) LTDRespondent

ANTHILLSAP (PTY) LTD

Respondent

______________

JUDGMENT

ISMAIL A J

[1] This is an application brought by the applicants as joint liquidators appointed by the Master of the High Court (Witwatersrand Local Division) in terms of section 386(1)(a)(b)(c)(d)(e) and 4(f) of the company TEMSO TECHNOLOGIES (PTY) LTD (the insolvent company).

[2] The respondent is a company duly registered and incorporated on terms of the law operating from

130 Kestrel Avenue

, the Reeds Extension 10,

Pretoria

.

NATURE OF THE APPLICATION

[3] The applicants seek an order that the respondent pay to them certainamounts which were attached from the bank accounts of the insolventcompany and paid over to the Sheriff after the effective date of thewinding-up of the insolvent company. These amounts were thereafterpaid over to the respondent.

[4] The applicants contend that in terms of the provisions of section359(1)(a) of the Companies Act, 61 of 1973 the attachment and steps

taken thereafter werevoidafter the effective date of the winding-up.Mr Vorster, acting for the respondent, on the other hand submitted thatsince the sheriff attached the monies from ABSA Bank prior to thewinding-up the provisions of section 359(1)(b) applied and for thatreason the monies were paid to it need not be paid over to theapplicants as the attachment was not void and the issue at hand waswhether the respondent’s execution took place prior to or after theeffective date of the winding-up of the insolvent company.

void

[5] Section 359 of the Act states that:“ 359. Legal proceedings suspended and attachments void.-(1)

(1)

When the court has made an order for the winding-up of a company or a special resolution for the winding- up of a company or a special resolution for the voluntary winding-up of a company has been registered in terms of section 200-

(a)

all civil proceedings by or against the company concerned shall be suspended until the appointment of a liquidator; and(b)any attachment or execution put in force against the estate or assets of the company after the commencement of the winding-up shall be void.

(b)

[6] The following facts were common cause between the applicants and the respondent;

[6.1] the effective date upon which the insolvent company was wound up was the 2ndNovember 2004;

[6.1] the effective date upon which the insolvent company was wound up was the 2

nd

November 2004;

[6.2] the sheriff attached the funds in the ABSA bank accountof the insolvent company on the 1stNovember 2004;

[6.2] the sheriff attached the funds in the ABSA bank accountof the insolvent company on the 1

st

[6.3] the funds were paid by ABSA Bank to the Sheriff on the 1November 2004 and a further sum on the 3 November2004.[7] The respondent relied upon the decision ofPols v R Pols – Bouers en Ingeniers (Edm) Bpk1953 (3) SA 107(T) where theCourt held that where a cheque was sent to the Registrar prior to winding up of a company but the Registrar had not deposited the cheque prior to the winding-up but only thereafter, the execution was still put into force prior to the winding up and therefore the execution was not void.This issue was also decided in the matter ofRennies N.O. v Registrar of Deeds and Another1977 (2) SA 513( C)[8] IntheRenniesmatter,supra,Schock J,at 515 stated:

[6.3] the funds were paid by ABSA Bank to the Sheriff on the 1November 2004 and a further sum on the 3 November2004.[7] The respondent relied upon the decision of

Pols v R Pols – Bouers en Ingeniers (Edm) Bpk

1953 (3) SA 107(T) where the

1953 (3) SA 107

C

ourt held that where a cheque was sent to the Registrar prior to winding up of a company but the Registrar had not deposited the cheque prior to the winding-up but only thereafter, the execution was still put into force prior to the winding up and therefore the execution was not void.This issue was also decided in the matter of

Rennies N.O. v Registrar of Deeds and Another

1977 (2) SA 513

( C)

[8] In

the

Rennies

matter

,

supra

Schock J

at 515 stated:

“Execution is, in my view, “put in force” within the meaning of thosewords in the said section when, in pursuance of a writ of execution,the Sheriff or the messenger of the court, as the case may be, entersinto possession of the property, i.e when execution is levied. Thishas always been the interpretation of those words placed on thecorresponding and substantially similar section in the EnglishCompanies Act from which these words in our Companies Act (andits predecessors) were taken. Moreover this interpretation has beenapplied in our courts by MAASDORP, J (as he then was), in thecase of In reCapeCold Storageand Supply Co.Ltd.: v Trollip,(1908) 25 S.C 502, in construing similar words in theCape(Pre-Union) Companies Act. It is also in accordance with theinterpretation applied by Clayden, J. in the case of Pols v R Pols-Bouers en Ingenieurs (Edms) Bpk.,1953 (3) SA 107(T) at p.110E-H in construing similar provisions of the 1926 Companies Act.There is a dictum to the contrary by JENNETT, J. in Ex parte Flynn;In re United Investments & Development Corporation Ltd. (inliquidation),1953 (3) SA 443(E) at p.445B-C, but it appears that hedid not at the time have the benefit of the Pols’ case, supra. Thereasoning of JENNETT,J. seems to me, with respect, quiteunconvincing. An execution is surely put in force once and for alland not – as JENNETT, J., suggest in the above cited passage-every time a further step in the process of execution is taken. Theweight of authority thus clearly supports the view that execution- interms of the said section – was “put in force” when the messengerof the court attached the said erf and this the meaning whichcontends itself to me”

“Execution is, in my view, “put in force” within the meaning of thosewords in the said section when, in pursuance of a writ of execution,the Sheriff or the messenger of the court, as the case may be, entersinto possession of the property, i.e when execution is levied. Thishas always been the interpretation of those words placed on thecorresponding and substantially similar section in the EnglishCompanies Act from which these words in our Companies Act (andits predecessors) were taken. Moreover this interpretation has beenapplied in our courts by MAASDORP, J (as he then was), in thecase of In re

Cape

Cold Storage

and Supply Co.Ltd.: v Trollip,(1908) 25 S.C 502, in construing similar words in the

(1908) 25 S.C 502

(Pre-Union) Companies Act. It is also in accordance with theinterpretation applied by Clayden, J. in the case of Pols v R Pols-Bouers en Ingenieurs (Edms) Bpk.,1953 (3) SA 107(T) at p.110E-H in construing similar provisions of the 1926 Companies Act.There is a dictum to the contrary by JENNETT, J. in Ex parte Flynn;In re United Investments & Development Corporation Ltd. (inliquidation),1953 (3) SA 443(E) at p.445B-C, but it appears that hedid not at the time have the benefit of the Pols’ case, supra. Thereasoning of JENNETT,J. seems to me, with respect, quiteunconvincing. An execution is surely put in force once and for alland not – as JENNETT, J., suggest in the above cited passage-every time a further step in the process of execution is taken. Theweight of authority thus clearly supports the view that execution- interms of the said section – was “put in force” when the messengerof the court attached the said erf and this the meaning whichcontends itself to me”

1953 (3) SA 443

[9] Mr. Leathern, acting for the applicants, submitted that he agreed withPolssupra, however, the decision was based on section 359(1)(b) andnot s 359(1)(a) which he was relying upon. In this regard he based hissubmissions upon the matter ofLiquidator, Mr Spares (Pty) Ltdv Goldies Motor Supplies (Pty) Ltd1982 (4) SA 607(W).

[9] Mr. Leathern, acting for the applicants, submitted that he agreed with

Pols

supra, however, the decision was based on section 359(1)(b) andnot s 359(1)(a) which he was relying upon. In this regard he based hissubmissions upon the matter of

Liquidator, Mr Spares (Pty) Ltdv Goldies Motor Supplies (Pty) Ltd

1982 (4) SA 607(W).

1982 (4) SA 607

[10] At page 609 E-G of the

Goldies

case Margo J stated:

“ The aforegoing is a summary of Kotze JA’s exposition of the RomanDutch Law in Liquidator, Union and Rhodesia Wholesalers Ltd vBrown & Co

1922 AD 558-559.

The

q

uestion in the present case is whether or not that position,under the common law, has been altered by any of the provisions ofthe Companies Act 61 of 1973 as amended.

In the

Union

and Rhodesia Wholesalers

case supra the court heldthat, under the statutory provisions then in force, an executioncreditor enjoyed no preference over goods of a company which hadnot yet been sold when the company was subsequently placedunder the winding-up order..”

[11] It was submitted on behalf of the applicants that although the monieswere attached by the Sheriff it was paid over to the respondent onlyafter the winding-up of the insolvent company.Ergothe payment bythe Sheriff to the respondent was void in terms of the provisions ofsection 359(1)(a). Mr Leathern submitted that the situation would havebeen different had the monies attached been paid over to therespondent prior to winding-up of the insolvent company, in whichcase s 359(1)(b) of the Act would have applied. In such an instance themonies would not have to be repaid to the liquidators.

Ergo

[12] In view of the monies only being paid over by theSheriff to therespondent, the execution creditor, on 14 November 2004 and the other payment early in 2005,the liquidators were entitled to reclaim the monies from the respondent. Clayden J inPolssupra stated:

[12] In view of the monies only being paid over by the

S

heriff to therespondent, the execution creditor, on 14 November 2004 and the other payment early in 2005

the liquidators were entitled to reclaim the monies from the respondent. Clayden J in

supra stated:

“I come to the conclusion, therefore, but almost on sections andcases which have not been referred to in argument, that if the moneyis still under attachment the creditor is not entitled to it, but is entitledonly to a preference for his costs of execution, but if the money haspassed to the creditor before winding-up commenced, the liquidatorhas no claim to it.”

[13] Ifindthat the applicants have made out a proper case for the relief they seek in the Notice of Motion.

[13] I

find

that the applicants have made out a proper case for the relief they seek in the Notice of Motion.

[14] Accordingly I make the following order:

(i)

the respondent is ordered to pay to the applicants, in their capacities as liquidators of TomosoTechnologies (Pty) Ltd(in liquidation) the sums of:(a)

the respondent is ordered to pay to the applicants, in their capacities as liquidators of Tomoso

T

echnologies (Pty) Ltd

(

in liquidation) the sums of:

R3 038,02;(b)R132 170,01

R3 038,02;

R132 170,01

(c) interest on each of these amounts mentioned in (i)(a) and (i)(b)at a rate of 15,5% per annum a

temporae morae

to date ofpayment;(ii) the respondent is ordered to pay the costs of this application..

________

ISMAIL AJ

For the Applicants:

Adv D M Leathern instructed by Schabort & Bekker Inc.

For the Respondent:

Adv J Vorster instructed by J C Grobler & Burger Inc

Date application Argued:

18 August 2006.

Judgment delivered on : August 2006