Opperman v Companies and Intellectual Property Commission of South Africa and Others (54506/2019) [2020] ZAGPPHC 208 (14 May 2020)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED.

CASE NO: 54506/2019

14/5/2020

In the matter between:

KEITH OPPERMAN

Applicant

and

THE COMPANIES AND INTELLECTUAL PROPERTY

First Respondent

COMMISSION OF SOUTH AFRICA

ANTON OPPERMAN

Second Respondent

SHERYL DE KLERK N.O

Third Respondent

THE MINISTER OF FINANCE

Fourth Respondent

THE MINISTER OF TRADE AND INDUSTRY

Fifth Respondent

EILEEN OPPERMAN

Intervening Party

JUDGMENT

MALUNGANA AJ

[1] This matter falls into two parts. The first part is concerned with the intervening party’s application for intervention. The second part relates to the application for the re-instatement of the company which has been deregistered pursuant to section 82(3)(b) of the Companies Act no 71 of 2008. I shall deal with each of these in turn.

[2] As regards the intervention application, the intervening party seeks leave to intervene in the proceedings instituted by the applicant in which the latter seeks the following relief against the respondents:

“1 That the dissolution of Ronsoe (Pty) Ltd, a company with registration number 1982/009357/07 (hereinafter “the company”) is declared void;

2. The Companies and Intellectual Property Commission of South Africa (“the First Respondent”) is directed to reinstate the registration of the company;

3. Any company assets that were rendered bona vacantia due to the company’s dissolution are declared no longer bona vacantia, and are re-vested in the company;

4. The company’s liabilities owed immediately prior to its dissolution are re-invested;”

[3] In support of the aforesaid relief the applicant avers in his founding papers that he was a 25% shareholder in Ronsoe (Pty) Ltd, a company founded by his late father, Ronald Opperman(‘the deceased’) in 1982. His brother, the second respondent held 25% whilst his father held 50% of the shareholding in the company.

[4] The company’s main business was focused on investing in real estate. During the month of July 2006 his father sold a portion of a farm in Driefontein No.85 for R5 793 862.00. Upon its transfer and registration the deceased received and retained the proceeds of the sale of the said property. The sale was discovered by the company’s auditor, Mr Jacob Geert Van der Laan, and went on to investigate how the proceeds thereof were utilised. It turned out that the sum of R5 000 000.00 was invested in a Liberty Life policy whilst the balance was retained by the deceased. Subsequent to the discovery the shareholders took efforts to ensure that the company would retain ownership of the proceeds held with Liberty Life. To achieve this objective, on 7 May 2007 the auditors addressed a letter to Liberty Life instructing the latter to note that the policy was being owned by Ronsoe (Pty) Ltd. A copy of the letter is shown in the document attached to the founding market Annexure ”C”. Notwithstanding the note the proceeds of the investments were subsequently withdrawn by the deceased as appears in annexure “D”. This culminated in the resolution marked annexure “J”, in terms of which the shareholders agreed that the deceased and the intervening party would be entitled to the income portion of the policy during their life time.

[5] As appears on annexure “K”, the deceased was diagnosed with a medical condition known as Alzheimer’s on 9 June 2010. Mr. Van Der Laan, the auditor of the company informed the applicant that the company was finally deregistered due to its failure to submit annual returns.

[6] Subsequent to the deceased’s death on 18 June 2017, Ms Sheryl de Klerk was appointed as an executrix of the deceased’s estate. At that stage the administration of the deceased estate has been temporary interdicted by the applicant pending the finalisation of the action in which the applicant seeks an order declaring the two wills executed by the deceased to be invalid. The crux of the litigation seem to be that the deceased did not posses the necessary mental capacity to execute the said will due to ill health as alluded to above.

[7] Unbeknown to the applicant, the deceased had transferred the policy to the intervening party in full, without amending his initial instructions to the Liberty Life.

[8] I pause to quote the following relevant averments of the founding affidavit:

“34. I therefore respectfully ask for the company’s reinstatement. The sole purpose is for me to cause a resolution to be taken aimed at the company instituting legal action to recover the amount of R5 663 276.02 from my late father’s estate and Eileen Opperman; jointly and severally.

35. I am not aware of any other assets, real or immaterial, that belonged to the estate’s ownership as a result of the deregistration

process.

36. I instructed Mr. Van der Laan to make application to the First Respondent to re-instate Ronsoe (Pty) Ltd. The First Respondent

refused to re-instate Ronsoe (Pty) Ltd.”

[9] The first and the fifth respondents represented by the State Attorney have filed a notice to abide.

[10] The application is opposed by the intervening party on a number of grounds, who contends that she has a direct and substantial interest in the subject matter of the application serving before the Court. Amongst the grounds of opposition, the intervening party contends that the applicant has no locus standi to seek the relief contained in the notice motion in that the applicant had transferred his 25% shareholding to her deceased husband in 2007. In support of this contention she relies on the document attached to her founding marked “EO1”, which she claims is a securities transfer form signed by the applicant. This issue was further canvassed in a letter from the company’s auditors dated 26 September 2007 wherein it was recorded as follows:

“Do we transfer Keith’s share to yourself? Please note that as the shares (25%) have a value of +-R1 500 000.00 SARS again could regard this as a donation from Keith to yourself, resulting in more capital gains tax and donations tax...”

[11] According to the intervening party, various dividends were declared during the period 2002 and 2009, which suggest that the deceased received 75% of the dividends in line with his shareholding. The other 25% shares held by the second respondent would be paid on the death of both the deceased and the intervening party. The alleged dividends are contained in the document marked annexure “EO7”.

[12] In support of her contention of prescription, the intervening party avers that if the applicant has a claim as a director of the now defunct company emanating from the sale transaction of a property which was paid into the Liberty Life policy, he ought to have been aware that the funds were always retained in the life policy wherein the beneficiaries were herself and the deceased. Moreover, his legal representatives have addressed a letter in relation to the disputed will dated 6 March 2019, to the effect that the applicant became aware of the fact that the deceased and her were the beneficiaries to the policy in between 2005 and 2007. Accordingly any action arising therefrom has become prescribed.

[13] According to the intervening party, the grounds advanced by the applicant for the deregistration of the company, are at variance with those advanced in the CIPC report. The reasons for the deregistration of the company are set out in annexure “EO9”, being that the company has ceased all trading activities, as opposed to failure to submit annual returns. The intervening party argues that as result of the alleged lack of locus standi and the reasons surrounding the deregistration of the company, a dispute of fact has arisen, which the applicant ought to have been aware of before instituting the application.

[14] In support of her contentions, counsel for the intervening party has referred to the decision in SA Riding for the Disabled Association v Regional Land Claims Commissioner[1] where the Court held:

”[10] If the applicant shows that it has some right which is affected by the order issued, permission to intervene must be granted. For it is a basic principle of our law that no order should be granted against a party without affording such party a predecision hearing. This is so fundamental that an order is generally taken to be binding only on parties to the litigation.

[11] Once the applicant for intervention shows a direct and substantial interest in the subject-matter of the case, the court ought to grant leave to intervene. In Greyvenouw CC this principle was formulated in these terms: ”in addition, when, as in this matter, the applicants base their

claim to intervene on a direct and substantial interest in the subject-

matter of the dispute, the Court has no discretion: it must allow them to intervene because it should in the absence of parties having such legally recognised interests.”

[15] In response to the intervention application, the applicant contends that the intervening party lacks the requisite ‘direct and substantial interest’ in the re-instatement application as none of her rights would be affected should this Court orders the relief sought.

[16] The applicant further argues that the shareholders of the company may elect not to institute action against the applicant, and proceed only against the deceased’s estate. He denies the averment that his 25% shareholding in the company was ever transferred to his deceased father as alleged by the intervening party.

[17] In support of his contention, the applicant avers that during his lifetime the deceased appointed an attorney to draw up a memorandum of agreement intended to solve the dispute between them, but the agreement was never signed by the parties. The said draft agreement is shown in a document marked annexure “Q” to the answering affidavit.

[18] It is useful to quote the following averments in the applicant’s answering affidavit:

“10.3 As a result, I took an in-principle decision to transfer my shares in the company to my father. I did so because I formed the view that if my brother and I both transferred our shareholding to my father, his unlawful conduct would effectively become regularised. I therefore on 12 March 2007 signed the annexure attached as “EO1” to the affidavit deposed to by Eileen Opperman.”

[19] Regarding the issue of prescription, the applicant contended that, it is of no relevance to the application as there is no bar for the intervening party to raise that issue if the company decides to institute an action against her. I am in agreement with the applicant’s argument in this regard.

[20] In argument counsel for the applicant referred to the matter of Amalgamated Engineering Union v Minister of Labour[2]in which two tests were applied by the Appellate Division to determine whether a third party had a direct and substantial interest in the existing dispute: Firstly the court had to consider whether the third party would have legal standing to claim relief concerning the same subject matter, and Secondly whether, because a third party had been joined, a situation might arise where an order by the court would not be res iudicata against such third party, entitling such party to approach the court concerning the same subject matter and possibly obtaining a contradictory order from the same court.

[21] Although the applicant seems to concede that the intervening party has an interest in the reinstatement of the company, he disputes that such interest is direct and substantial. In amplification thereof the applicant contended that this is so because the intervening party was never a shareholder in the company. Furthermore, her only claim to her deceased husband shareholding is via her testamentary entitlement, which entitlement is the subject of the pending litigation. He argued further that the intervening party’s attempt to intervene is equivalent to an anticipatory strike aimed to defend, proactively so, her disputed claim to the proceeds of the Liberty Life policy.

[22] I have merely to consider whether the intervening party has made out a case sufficiently strong to conclude that she has ‘direct and substantial interest’ in the subject matter of the litigation. In view of the fact that some issues raised in the papers would come to court at some stage, when the court which tries the case will have to make a final decision, I will restrict myself to the issues relevant to disputes set out in the current applications.

[23] There appears to be a merit in the argument that once the applicant shows a direct and substantial interest in the subject matter of the case, the court ought to grant leave to intervene. It is noteworthy that the applicant concedes that the intervening party has an interest in the reinstatement of the company, but seems to brush off the fact that such interest may be impacted by the order reinstating the deregistered company.

[24] The intervening party need not show a prospect of being successful but merely that if his allegations are accepted, he will be successful.[3]

[25] In Ex parte Varvarian: In re Constantia Pure Food Co (Pty) Ltd 1965 (4) SA 306, it was held at 309D-H that there seems to be no reason why any party, be it a creditor, debtor or party in litigation pending, should have a right to intervene in an application for the restoration of a company to be reregistered,

particularly where the restoration of the company would afford that company an opportunity which it would otherwise lose of proceeding

with litigation against the intervening party. In Ex parte Varvarian De Vos J succinctly said:

“Now it seems to me that the provisions of this section could never have been envisaged by the lawgiver as affording a new additional remedy, either substantive or procedural, to any persons standing in some legal relationship to the company, either as member, creditor or otherwise, where such remedy is not otherwise in law provided for, excepting only one circumscribed remedy, namely to ask in terms of section 199(7) for the restoration to the registrar of the company struck off by the registrar. If this right is exercised the worst that can happen to any party, or the best, according to the facts, would have been terminated by the action of the registrar in securing

the removal from the register. The restoration then brings the company back into existence as if the registrar had never acted, and leaves all parties concerned thereafter, to enforce such rights as they may have against the restored company.

There seems to be no reason , albeit as creditor, debtor or party in litigation pending, should have a right to intervene in an

application of this kind, particularly in the present circumstances where a restoration of a company to the register would afford that company an opportunity which it would otherwise lose of proceeding with litigation against the intervening party.”

[26] In my mind there is no question of the fact that the relief sought by the applicant, viz the restoration of the Ronsoe (Pty) Ltd, may retrospectively have the effect of the company obtaining enforceable rights against the intervening party as averred in paragraph 34 of the applicant’s founding affidavit.

[27] In this regard I find support in Ex parte Sengol Investments (Pty) Ltd 1982 (3) SA 218 (T) where Dijkhorst J noted that, as the mineral rights which were in question in that case had become bona vacantia upon deregistration of the company who held them, they were consequently held by the State. These rights revert to the company upon

registration. Accordingly the position of the State is affected by the application for restoration, and it is an interested party to whom notice should have been given of the application to the registrar.

[28] At page 477D of Sengol Investments case (supra) his lordship said:

“Likewise debtors and creditors of the company at the time of the deregistration may upon restoration find their obligations or rights

resuscitated.”

[29] The Sengol decision was followed by Goldstone J in Ex parte Jacobson: In re Alex Jacobson Holdings (Pty) Ltd 184 (2) SA 372 (W). Having been the subject-matter of judgments subsequent to that of Varvarian, they overrule the latter case inasmuch as this is relevant.

[30] It follows that any order reinstating the company in question would potentially affect the rights of the intervening party in a material way. On his own version the applicant intends to convene a meeting of the would- be directors (shareholders) if granted the relief sought in the notice of motion, for the sole purpose of adopting a resolution to institute legal proceedings against the estate and the intervening party. In the likely event that such happen the intervening party may face a legal suite as a potential debtor. It is in keeping with the natural rule of justice -audi alteram partem- that the intervening party whose rights are likely to be affected be granted an opportunity to be heard before an order is made. In the result, I am satisfied that the intervening party be granted leave to intervene in the proceedings. The applicant should pay the costs of opposition.

[31] As regards the application for the restoration of the company, the following legal principles are applicable. Section 82 (4) of the Company’s Act 71 of 2008 provides that:

“If the Commission deregisters a company as contemplated in subsection (3), any interested person may apply in the prescribed manner and form to the Commission, to reinstate the registration of the company.”

[32] Removal of a company from the register of companies may occur under the circumstances described in section 82(3):

Only if-

(a) the company has transferred its registration to a foreign jurisdiction in terms of subsection 5, or (i) has failed to file an annual return in terms of section 33 for two or more years in succession; and (ii) on demand by the Commission, has failed to- (aa) give a satisfactory reasons for the failure to file the required annual returns; or (bb) show satisfactory cause for the company to remain registered; or

(b) the commission- (i) has determined the prescribed manner that the company appears to have been inactive for at least seven years, and no person has demonstrated a reasonable interest in, or reason for, its continued existence, or (ii) has received a request in the prescribed manner and form and has determined that the company- (aa) has ceased to carry on business; and (bb) has no assets or, because of the inadequacy of its assets, there is no reasonable probability of the company being liquidated.

[33] In Peninsula Eye Clinic (Pty) Ltd v Newlands Surgical Clinic (Pty) Ltd and Others 2012 (4) SA 484 (WCC) par [6] the court held:

“the deregistration of a company in terms of s 82 (3) of the Act falls exclusively within the province of CIPC. There is no provision in 2008 Act for a restoration of a company by order or application to a court.”

[34] It is apparent from the above that the reinstatement in terms of subsection 4 is not subject to or dependent on litigation, it is purely an administrative process which must be complied with as required by the section and by the regulations.

[35] Section 83(4) empowers the court to make an order declaring that the dissolution of the company is void, or grant any other order that is just and equitable in the circumstances. In essence the section provides a foundation for the right of recourse for and against the company. It follows that the creditor or an interested party has to lay a proper legal basis and not a fictitious process ineffectual.[4]

[36] Immediately I proceed to consider whether it will be equitable to order the reinstatement of the company in terms of s 82(4). Importantly, the applicant attaches a letter on the DNL Chartered Accountants letterhead dated 7 May 2007 addressed to the Management, ‘The Hub at Liberty Life’ purportedly signed by the company auditor, J G Van Der Laan and RR Opperman, the director and shareholder in Ronsoe (Pty) Ltd. The relevant portions of the letter read as follows:

“With reference to the attached insurance contract the following:

Just prior to the investment made by Mr Opperman with yourselves he received these funds from the sale of a fixed property. The fixed property belonged to a company Ronsoe (Pty) Ltd, and it is a company that made a profit on the sale of this property.

If it seen that Mr Opperman withdrew the profit from the company, the company will have to pay divided tax of R650 000 as the

withdrawal will be seen as a deemed dividend.

We do not believe that your agent Willem Barnard ever considered this issue nor did he make sure as to the origin of the moneys invested by Mr Opperman.

We believe that had he done this another option as to how to invest the moneys would have been considered.

We believe that had the investment should have been done in the name of Ronsoe (Pty) Ltd in order not to pay dividend tax.

It is therefor important to adjust the policy to the extent that it belongs (belonged) to Rosnoe from its inception being 07/08 2006. The owner should be indicated as Ronsoe (Pty) Ltd and the lives insured those of Mr R R Opperman and his spouse Mrs E Opperman (whom is now indicated as the beneficiary). No other beneficiary should be indicated.” Another letter retracting the contents of the quoted letter was addressed to Liberty Group Services on 26 June 2007. The reason for retraction was stated by the deceased as being not fully understanding the content thereof.

[37] On 26 September 2007, Mr. J G Van der Laan addressed a letter to the deceased, the relevant portion of which read as follows:

“Do we transfer Keith’s share to yourself? Please note that as the shares (25%) have a value of + R 1 500 000 SARS again could regard this as a donation from Keith to yourself, resulting in more capital gains tax and donations tax. Please discuss this issue with Keith. As he is our client we will also discuss with him. We could backdate such transaction to date the shares were issued to him (at no vaue) but only time will tell if SARS is going to accept it.”

[38] On 1 December 2008, Mr Opperman wrote a letter bearing no company logo to DNL for the attention of J Van der Laan headed ‘Closure of Ronsoe’. The relevant excerpt thereof read:

With reference to your letter regarding the deregistration of Ronsoe (Pty) Ltd, you are instructed to proceed to deregister the company as Mr A Opperman understands that his shares are to be paid out on the deaths of both myself and Eilleen Opperman.

A note can be made that the value of 25% as calculated by DNL is to be paid across to him on the deaths of both parties and will not form part of any will and testament.”

[39] Reverting now to the intervening party’s averments. A number of contentions were advanced by the intervening party in support of her opposition to the reinstatement of the company. Notably in paragraph 17 of her founding affidavit, the intervening party avers that she is in possession of the transfer of shares signed by the applicant in which the latter transferred his 25% stake to the deceased on 12 March 2007. She, however, also states in paragraph 18 that the purported document of the transfer of shares was sent in unsigned format by DNL auditors of the company. What does emerge from these averments is that it is not clear as to when did the transfer of shares from the applicant to the deceased took place, if it did take place, in the context of the letter dated the 26 September 2007. I add for the sake of detail, that according to the intervening party, the applicant transferred his shares on 12 March 2007, whilst the letter of the 26 September 2007 seems to suggest that the deceased still had to discuss the issue of transfer with the applicant.

[40] Another contention raised by the intervening party which deserves attention is the document referenced annexure “E09”, which purports to be the resolution by the company’s shareholders. It reads:

“We, the undersigned, RONALD RICHARD OPPERMAN, KEITH OPPERMAN AND ANTON OPPERMAN being the shareholders of the above mentioned company, do hereby declare that RONSOE (PTY) LTD has ceased all trading activities, and that we wish to have the Company deregistered from the records of the SOUTH AFRICAN REVENUE SERVICES.”

[41] In response to the above document, the applicant took the point that the aforesaid document was intended to avoid the necessity of incurring professional fees to maintain the company records. The applicant further took the point that the company was de-registered as consequence of failure to submit annual returns with CIPC.

[42] Now it seems to me that there can be no doubt, nor did I understand either of the parties contended there was any, that the deregistration of the company was to avoid paying taxes to SARS arising from the sale transaction of the property. There can also, I think, be no doubt that the applicant signed the document referenced annexure “EO9”, as a shareholder of Ronsoe (Pty) Ltd. I find it difficult to accept the parties’ explanation about the purpose of the said document. On examination of the document it becomes apparent that it was contemplated by the shareholders to deregister the company in pursuance to section 82(3)(b).

[43] In dealing with the dissolution of a company under the provisions of s 83(1), the full bench of the Cape Division in ABSA Bank Ltd v Companies & Intellectual Property Commission & Others[5] held in para 49 that: ‘ The important modification is that the court is now not confined to making an order declaring the dissolution void, it may make an order that is just and equitable in the circumstances.(Although the references in s 83(4)(a) to a declaration of voidness and to any other order that is just and equitable are linked by the word ‘or’, I do not believe that the court can grant only one or the other. An order that is just and equitable may entail a declaration that the dissolution is void together with ancillary relief.’

[44] I am alive to the fact that the power to declare a dissolution or rather deregistration of a company void under s 83(4) is not a review power, otherwise the normal rules for review would be applicable. As stated above, any dispute of facts or points of law raised will be dealt by the court that tries the matter. The court need not detains itself with those issues at this stage. The only issue therefore is whether it is ‘just and equitable’ in the circumstances of the facts placed before to order the revival of the company in terms of s 83(4). In light of the uncertainties surrounding the deregistration of the company in question coupled with other anomalies, and the dispute in shareholding, I am of the opinion that it is equitable that the company be revived. This will afford the applicant to deal with the outstanding issues as well as other interested parties, if any,

in exercising the rights which may otherwise have been affected by the deregistration.

[45] In the result the order I grant is the following:

1. The intervening party is granted leave to intervene in the main application;

2. The founding affidavit delivered in support of the intervening application will be the answering affidavit in the main application;

3. The applicant is ordered to pay the costs of the intervention application;

4. The dissolution of Ronsoe (Pty) Ltd with registration number 1982/009357/07 is declared void in terms of section 83(4) of the Companies Act, No 71 of 2008;

5.The first respondent is directed to restore the company’s name to the register of Companies;

6.The costs of this application shall be paid by Ronsoe (Pty) Ltd; the company;

7.The applicant shall serve a copy of this order to the first respondent and the South African Revenue Services.

P H Malungana

Acting Judge of the High Court, Pretoria

APPEARANCES:

For the Applicant:

Adv. Rodulf Mastenbroek

Instructed by:

Eugen Maritz Attorney

eugenmaritz@mweb.co.za

For the Intervening Party: Adv. IL Posthumus

Instructed by:

Lindeque & Van Heerden Attorneys

nicolene@lvhatt.co.za

[1] 2017 (5) SA 1 (CC)

[2] 1949 (3) SA 637 (A)

[3] Nelson Mandela Metropolitan Municipality v Greyvenouw NO.2004 (2) SA 81 (SE) par 8

[4] Morgenrood v Companies and Intellectual Property Commission and Others [2015] ZAGPHC at par 20

[5] 2013 (4) SA 194 (WCC)