Praescripto (Pty) Ltd v Van Der Merwe Du Toit Inc and Others (66839/12) [2014] ZAGPPHC 885 (12 November 2014)

IN

THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NUMBER: 66839/12

DATE: 12 November 2014

PRAESCRIPTO (PTY) LTD.............................................................................................................Applicant

V

VAN DER MERWE DU

TOIT INC....................................................................................First Respondent

JAN LODEWIKUS PRETORIUS N.O. ….....................................................................Second Respondent

ELIZABETH WILANDA PRINSLOO N.O. …................................................................Third Respondent

THE MASTER OF THE NORTH GAUTENG HIGH COURT...................................Fourth Respondent

THE SOUTH AFRICAN

REVENUE SERVICES.............................................................Fifth Respondent

THE COMPANIES AND INTELLECTUAL PROPERTY COMMISSION..................Sixth Respondent

In re:

MI-TAX (PTY) LTD (In Liquidation)

JUDGMENT

STRYDOM AJ:

Remedy Sought by Applicant

1. The Applicant in this matter initially sought, inter alia, an order setting aside the winding up of Mi-Tax (Pty) Ltd (in liquidation), (hereafter “Mi-Tax”), alternatively residing both the provisional and final orders, dated 22 January 2013 and 10 February 2014 respectively, for the winding up of Mi-Tax1. Advocate Vorster appeared on behalf of the Applicant in this matter and Adv. Heystek for the First Respondent. After making representations Adv. Vorster submitted a draft order which has the effect of a notice of amendment of its notice of motion, to which there was no objection, and I accordingly granted the amendment. In terms of the draft order the Applicant now seek the following relief:

“1. The winding up of Mi-tax (Pty) Ltd (2002/005945/04) is set aside;

2. The amount ofR78,567.17 deposited by the Applicant into the trust account of EW Serfontein Inc Attorneys shaii be retained on trust and invested in a separate trust bearing account pending final outcome of the action to be instituted by the First Respondent against Mi- Tax (Pty) Ltd within 6 weeks from date of this order. Should the First Respondent be finally successful with his action the amount together with any accrued interest shaft be paid to the First Respondent.

3. Should the First Respondent fail to institute such legal proceedings within 6 weeks, EW Serfontein Inc Attorneys shall be entitled to pay the invested amount together with accrued interest to the Applicant.

4. Mi-Tax (Pty) Ltd shall be responsible for payment of the reasonable tax or agreed fees of the second and third respondent ”

Interlocutory Applications

2. The Applicant also applied for admission of an additional affidavit, to which there was no opposition. In the additional affidavit security is set for the amount of the indebtedness upon which the First Respondent relied when it approached the court for the Liquidation of the Mi- Tax, which was granted while Mi-Tax was in default of both filing of opposing papers and appearance.

3. Two interlocutory applications came before me in this matter, being:

3.1. An application for condonation for the Applicant’s late filing of its replying affidavit2, and;

3.2. An application for striking out of vexatious and/or irrelevant averments in the answering affidavit of the First Respondent3.

4. The First Respondent indicated that it does not oppose the condonation application, and accordingly I admitted the replying affidavit,

condoning the late filing of the same.

5. The Applicant indicated that, although it does not abandon the application to strike out vexatious averments in the First Respondent’s opposing affidavit, it do not intend to bring the application before me. I find this to amount to an abandonment of the said application and indicated the same to the counsel for the Applicant. In any event, the application was not at any relevant time brought before me. Accordingly I consider the averments to which the Applicant

complained about to be no longer contentious between the parties.

In limine points

6. The First Respondent formally took the Applicant to task on its locus standi. Instead of attaching the necessary share certificates to its replying affidavit the Applicant merely indicated that the said respondent is not seriously raising this issue.

7. The First Respondent and the Applicant arrange inter seXhdX the Applicant will supply the said Respondent with the necessary prove of locus standi. Whether this has been done is unknown to me. I find the Applicant’s answer to the challenge of its focus standi\o\a\\y unacceptable and indicated the same to the parties. This judgment is given on the premis that the Applicant has the necessary locus standi, in respect of which I make no finding.

Nature of Application

8. The order for setting aside of the winding up of Mi-Tax is premised upon the provisions of section 354(1) of the Companies Act, 1973 (at 61 of 1973, hereafter ‘the Old Company Act1). The alternative order for rescission was sought upon the common law grounds for rescission of a judgment. Adv. Vorster indicated that he abides by the heads of his predecessor (Adv. Dredge), but will make further submissions of his own accord. Although Adv. Dredge made the distinction between section 345(1) of the Old Companies Act and the common law, Adv. Vorster submitted that the premise upon which the Applicant brought his present application is solely based on provisions of the Company Law. This distinction, to which I will return to hereunder, is in my view only relevant to the extent that the common law sets the minimum requirements which need to be met by an Applicant in a rescission application. In Ward and Another v Smith and Others: In Re Gurr v Zambia Airways Corporation Ltd,4 to which judgment

I will return hereunder, the court found in this regard:5

“... no less would be expected of an Applicant under the section than of an Applicant who seeks to have a judgment set aside at common

law.”

Applicable legal principals

9. As indicated above the Applicant brought its application in terms of section 354(1) of the Old Company Act, which was emphasized by Mr. Vorster. The provisions of section 354(1) of the Old Company Act are applicable to the winding up of companies, by virtue of the provisions of section 9 of the Companies Act, 2008 (Act No. 71 of 2008, hereafter (“the New Companies Act”). Section 354(1) of the Old Companies Act reads as follows:

“The court may at any time after the commencement of a winding up, on the application of any liquidator, creditor or member, and on proof to the satisfaction of the court that all proceedings in relation to the winding up ought to be stayed or set aside, make an order staying or setting aside the proceedings ...on such terms and conditions as the court may deem fit."

10. The following principles, as appears from case law, apply to the exercise of a court’s discretion to set aside winding-up

proceedings of a company under section 354(1) of the Companies Act:6

In view of the above facts and considerations I make the following order:

1 The Application for recession of Mi-Tax is dismissed;

2 The Applicant is ordered to pay the cost of the First Respondent.

J.S. STRYDOM

ACTING JUDGE OF

THE HIGH COURT

Appearances:

Counsel for the Applicant: Adv. Vorster

Instructed by: Schoeman & Associates

Counsel for the Respondents: Adv. Heystek

Instructed by: Van der Merwe du Toit Inc

Date Heard: 4 November 2014

Date of Judgment: 12 November 2014

1 See: Prayers 1 and 2 of the Notice of Motion, page 1 of the paginated papers.

2 See: Paragraph 17 up to and including paragraph 17.9 on page 384 to 385 of the paginated pages.

3 See: Prayer (a) on page 339 of the paginated pages

4 1998(3) SA 175 (SCA).

5 Ibid at 181 A-B.

6 See: Klass v Contract Interior CC (in liquidation) and Others 2010(5) SA 40 (W), paragraph [65], and authority quoted therein, which I also examined. See further Storti v Nugent and Others 2001(3) SA 783 (W) on page 706 paragraph D-G.

7 See: Ex parte van der Merwe 1962 (4) SA 71 at 72 E-H.

8 See: Storti - supra on p 806 G-J.

9 See: Ward and Another v Smith and Others: In Re Gurr v Zambia Airways Corporation Ltd 1998(3) SA 175 (SCA) at 181 C-D. Compare also Aubrey M Cramer Ltd v Welch N.O. 1965(4) SA 304(W) at 305 H. which was quoted with approval by the Supreme Court of Appeal in the Ward matter.

10 See: Herbs v Hessel N.O. en Andere 1978(2) SA 105 (T) at 109 F-G.

11 Compare: Ward and Another v Smith and Others: In Re Gurr v Zambia Airways Corporation Ltd’ above, at 181 A-B.

12 See: Chetty v Law Society, Transvaal 1985(2) SA 756 (A) at 765

13 See: Ibid at 7641 - 765 D

14 See: Ibid at paragraphs D-E

15 See: Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003(6) SA 1 (SCA) at 9H – 10A para’s [12]

16 Compare: Riddles v Standard Bank South Africa [2009] 2 All SA 407 (T)

17 See: Saraiva Construction (Pty) Ltd v Zululand Electrical & Engineering Wholesalers (Pty) Ltd 1975 (1) SA 612 (D); Compare also the Grant-matter supra.

18 1984(3) SA 623 (A).

19 1999(4) SA 779.

20 Compare the application of Plascon Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984(3) SA 623 (A) at 634 E-645C in the matter of Storti, supra, at 806I-J

21 See: Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003(6) SA1 at 10B par [13]

22 See: Plascon Evans Paints Ltd - supra at 635C.

23 See: Sos-Kinderhof International v Effie Lentin Architects 1991 (3) SA 574 at 578D-G

24 1977 (1)SA 814 (N).

25 See: Dairy Board v John T Rennie & Co (Pty) Ltd 1976 (3) SA 768 (W)

26 Compare in this regard: Brangus Ranching (Pty) Ltd v Plaaskem (Pty) Ltd 2011 (3) SA 477 (KZN) which was applied in Arendsnes Sweefspoor CC v Botha 2013 (5) SA 399 (SCA).

27 1993 SA 397 (B) at 401B.

28See: Page 212 of the paginated pages

29 See page 212 paginated pages.