Moolman v Builders & Developers (Pty) Ltd. (in Provisional Liquidation) (170/89) [1989] ZASCA 171; [1990] 2 All SA 77 (A) (1 December 1989)

Moolman v Builders & Developers (Pty) Ltd. (in Provisional Liquidation) (170/89) [1989] ZASCA 171; [1990] 2 All SA 77 (A) (1 December 1989)

The court held that the functions of a liquidator include both the recovery of assets and the investigation of the company's affairs, and that the latter is an ancillary power necessary for the proper performance of the former. Recognition of a foreign liquidator may be granted not only for the purpose of dealing with assets but also to enable an enquiry into the affairs of the company, including the interrogation of witnesses. The absence of established assets in South Africa does not preclude recognition, especially where the enquiry may lead to the discovery of impeachable transactions or assets. The court found that comity, convenience, and the interests of creditors support the...

Citation
[1989] ZASCA 171
Parties
Appellant: Wynand Theunis Jacobus Moolman; Respondent: Builders & Developers (Pty) Limited (in provisional liquidation); Intervening Party: Andrew Jooste
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
1 December 1989
Case Number
170/89
Procedural Posture
Civil Appeal / Appeal Against Discharge of Rule Nisi; Supreme Court of Appeal
Outcome
Appeal upheld; order of the court a quo set aside and replaced with confirmation of the rule nisi and further relief.
Judges
J J F Hefer, Joubert, Hefer, Steyn, Kumleben, Friedman
Legal Topics
Recognition of Foreign Liquidator, Cross Border Insolvency, Powers of Liquidator, Comity, Interrogation of Witnesses
Civil Procedure Commercial and Corporate Recognition of Foreign Liquidator Cross Border Insolvency Powers of Liquidator Comity Interrogation of Witnesses

Case Brief

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Parties

Wynand Theunis Jacobus Moolman

Appellant

Builders & Developers (Pty) Limited (in provisional liquidation)

Respondent

Andrew Jooste

Intervening Party

Procedural Posture

Civil Appeal / Appeal Against Discharge of Rule Nisi; Supreme Court of Appeal

Legal Issues

  1. 1 Whether a South African court may grant recognition to a foreign liquidator for the purpose of conducting an enquiry into the affairs of a company with no established assets in South Africa.
  2. 2 Whether recognition may be granted to enable interrogation of witnesses residing in South Africa.
  3. 3 Whether the absence of local assets precludes recognition of a foreign liquidator.

Ratio Decidendi

The court held that the functions of a liquidator include both the recovery of assets and the investigation of the company's affairs, and that the latter is an ancillary power necessary for the proper performance of the former. Recognition of a foreign liquidator may be granted not only for the purpose of dealing with assets but also to enable an enquiry into the affairs of the company, including the interrogation of witnesses. The absence of established assets in South Africa does not preclude recognition, especially where the enquiry may lead to the discovery of impeachable transactions or assets. The court found that comity, convenience, and the interests of creditors support the...

Court Disposition

Appeal upheld; order of the court a quo set aside and replaced with confirmation of the rule nisi and further relief.

Orders

  • Paragraph 1 of the rule nisi dated 6 January 1988 is confirmed.
  • A further order is granted in terms of paragraph 6 of the notice of motion (recognition of the commissioner's appointment).