Missouri Trading CC and Another v ABSA Bank and Others (8598/2011) [2014] ZAKZDHC 6; 2014 (4) SA 55 (KZD) (20 March 2014)

Missouri Trading CC and Another v ABSA Bank and Others (8598/2011) [2014] ZAKZDHC 6; 2014 (4) SA 55 (KZD) (20 March 2014)

The court held that reinstatement of a deregistered close corporation under section 82(4) of the Companies Act 71 of 2008 operates prospectively from the date of reinstatement, not retrospectively from the date of deregistration. The absence of express retrospective wording in the current Act, contrasted with previous legislation, indicates a deliberate legislative choice. Deregistration dissolves the corporation, and its corporate personality ceases until reinstatement. Liquidation orders and other acts done during the period of deregistration are ordinarily void unless validated by a just and equitable order of the court under section 83(4). In this case, the court found it just and...

Citation
[2014] ZAKZDHC 6
Parties
Applicant: Missouri Trading CC; Applicant: Perumal Reddy; Respondent: ABSA Bank Limited; Respondent: Colin Mark Poole N.O.; Respondent: Nicola Cronje N.O.; Respondent: The Companies & Intellectual Property Commission; Respondent: The Minister of Rural Development & Land Reform
Court
Kwazulu-Natal High Court, Durban
Jurisdiction
South Africa
Judgment Date
20 March 2014
Case Number
8598/2011
Procedural Posture
Urgent Application / Judgment on Opposed Application and Counter Application
Outcome
Applicants' application dismissed with costs; counter-application granted in terms of paragraphs 2 and 5.
Judges
Koen
Legal Topics
Deregistration of Close Corporation, Reinstatement Under Companies Act, Retrospective Vs Prospective Effect, Liquidation Orders, Bona Vacantia, Just and Equitable Relief
Commercial and Corporate Civil Procedure Deregistration of Close Corporation Reinstatement Under Companies Act Retrospective Vs Prospective Effect Liquidation Orders Bona Vacantia Just and Equitable Relief

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Parties

Missouri Trading CC

Applicant

Perumal Reddy

Applicant

ABSA Bank Limited

Respondent

Colin Mark Poole N.O.

Respondent

Nicola Cronje N.O.

Respondent

The Companies & Intellectual Property Commission

Respondent

The Minister of Rural Development & Land Reform

Respondent

Procedural Posture

Urgent Application / Judgment on Opposed Application and Counter Application

Legal Issues

  1. 1 Does reinstatement of a deregistered close corporation under section 82(4) of the Companies Act 71 of 2008 operate retrospectively or prospectively?
  2. 2 Are liquidation orders granted during the period of deregistration void or capable of being validated by court order?
  3. 3 What is the effect of reinstatement on assets that became bona vacantia during deregistration?

Ratio Decidendi

The court held that reinstatement of a deregistered close corporation under section 82(4) of the Companies Act 71 of 2008 operates prospectively from the date of reinstatement, not retrospectively from the date of deregistration. The absence of express retrospective wording in the current Act, contrasted with previous legislation, indicates a deliberate legislative choice. Deregistration dissolves the corporation, and its corporate personality ceases until reinstatement. Liquidation orders and other acts done during the period of deregistration are ordinarily void unless validated by a just and equitable order of the court under section 83(4). In this case, the court found it just and...

Court Disposition

Applicants' application dismissed with costs; counter-application granted in terms of paragraphs 2 and 5.

Orders

  • The orders of this court dated 31 May 2012 and 27 August 2012, whereby the first applicant was placed under provisional and final winding up respectively, are declared of full force and effect and binding on the affairs of the first applicant and its estate.
  • The appointment of Colin Mark Poole and Nicola Cronje as liquidators in the insolvent estate of the first applicant is confirmed and declared valid.