Registrar of Banks v Dafel and Others (64378/2013; 64380/2013; 64381/2013) [2015] ZAGPPHC 648 (4 September 2015)

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

Case number: 64378/2013

64380/2013

64381/2013

Date: 4 September 2015

In the matter between:

THE REGISTRAR OF BANKS APPLICANT

And

GERRITJE DAFEL FIRST

RESPONDENT

KAMPSTONE FINANCIAL SERVICES CC SECOND

RESPONDENT

MOFFIT PROPERTIES (PTY) LTD THIRD

RESPONDENT

JUDGMENT

PRETORIUS J,

INTRODUCTION:

[1] This is a return date for rule nisi’s to be confirmed against Gerritje Dafel, Kampstone Financial Services CC and Moffit Properties (Pty) Ltd.

[2] The provisional orders were granted on 13 November 2014 by Matojane J in this court as follows:

“1. That the estate of Gerritje Dafel is hereby placed under an order of provisional sequestration in the hands of the Master of the High Court;

2. That Moffit Properties (Pty) Ltd be and is hereby placed under provisional winding-up order in the hands of the Master of this Court;

3. That Kampstone Financial Services CC be and is hereby placed under provisional

winding-up order in the hands of the Master of this Court;”

[3] Matojane J further ordered:

“4. That the Master is directed to appoint the person nominated by the Registrar of Banks as trustee as provided for in section 84(1A)(b) of the Banks Act, 1990 (Act 94 of 1990);”

[4] The applicant applied for the winding up of the second and third respondents and the sequestration of the first respondent as they had failed to comply with the directive in terms of section 83(3) of the Banks Act and therefor were deemed not to be able to pay their debts and thereby to have committed an act of insolvency.

[5] Counsel for the respondents conceded at the outset that the respondents were insolvent, but that the court should grant an extension of time, to enable the respondents to place a compromise between the respondents and creditors before court.

[6] The rule nisi’s had been extended more than once prior to this hearing and at the last extension, it was ordered, inter alia, that the respondent had to file their heads of argument and practice note by no later than 31 July 2015.

[7] The applicant filed its heads of argument on 16 July 2015, whilst the respondents only filed their heads of argument on 27 August 2015. On 27 August 2015 the respondents filed a notice of motion with a founding affidavit and supplementary opposing affidavit for extension of the return dates to 6 October 2015. This application for extension was served three days before the matter was to be heard.

[8] The respondents request the court to grant condonation for the late filing of the supplementary affidavit. Nowhere is there any mention of requesting condonation for the late filing of the respondents’ heads of argument.

[9] The principle is that a party should as soon as he realises that he has not and will not be able to comply with a court order and the practice directive apply for condonation without delay. In Commissioner for the South African Revenue Service v Van der Merwe [2015] 3 All SA 387 (SCA) this was once more confirmed at paragraph 12:

“In Uitenhage Transitional Local Council it was stated (paragraph 6):

‘One would have hoped that the many admonition concerning what is required of an applicant in a condonation application would be trite knowledge among practitioners who are entrusted with the preparation of appeal to this Court: condonation is not to be had merely for the asking; a full, detailed and accurate account of the causes of the delay and their effects must be furnished so as to enable the Court to understand clearly the reasons and to assess the responsibility. It must be obvious that, if the non-compliance is time-related then the date, duration and extent of any obstacle on which reliance is placed must be spelled out.’

What calls for an explanation is not only the delay in the timeous prosecution of the appeal, but also the delay in seeking condonation. An appellant should, whenever she realises that she has not complied with a rule of this Court, apply for condonation without delay.”

[10] I have accepted the heads of argument and notice of motion dealing with the extension of the return dates, as it would prejudice the applicant to insist that the respondents comply with the court order and rules of court. It is clear that there has been a history of non-compliance in this application. The applicant did file an affidavit dealing with the issues set out in the respondents’

affidavit by Mr Danie Dafel.

[11] I have to consider the reason for the application for extension of the rule nisi’s by establishing the prejudice to the parties if it is granted or refused. A cost order in this instance will be to no avail to cure the prejudice to the applicant, if the court finds for the respondents, as the respondents concede that they are insolvent.

[12] This application for extension of time is opposed. It is common cause that the provisional liquidator had been appointed and had taken charge of the affairs of all three respondents, after the orders of Matojane J had been issued.

[13] Mr Stewart, the provisional liquidator, immediately indicated to Mr and Mrs Dafel that they had no further locus standi in the affairs of the respondents and that they had to work through the provisional liquidator. This was set out in the supporting

affidavit of Mr Dafel. It is thus clear that Mr Dafel knew that he had to work through the liquidator. The reason for the application for extension of the rule nisi’s is that the respondents intend applying for the sanction of a scheme as envisaged in section 155(7)(b)(i) of Act 71 of 2008.

LOCUS STANDI:

[14] Mr Daniel Johann Dafel deposed to the affidavit and set out:

“I am an adult male and the sole shareholder and sole director of the first respondent in the matter.”

[15] Counsel for the respondents submitted that he was acting as director of the first respondent in this application.

[16] Section 155(2) of Act 71 of 2008 provides:

“(2) The board of a company, or the liquidator of such a company if it is being wound up, may propose an arrangement or a compromise of its financial obligations to all of its creditors, or to all of the members of any class of its creditors, by delivering a copy of the proposal, and notice of meeting to consider the proposal, to-

(a) every creditor of the company, or every member of the relevant class of creditors whose name or address is known to, or can reasonably be obtained by, the company; and

(b) the Commission.” (Court’s emphasis)

[17] It clearly provides that only the board of a company or a liquidator can propose such a scheme. Henochsberg on the Companies Act. 71 of 2008 1st edition by P Delport 2011, sets out that due to the definition of a liquidator in the 1973 Act, by implication a provisional liquidator has locus standi to make the application. This has to be so, although counsel for the respondents argued that section 155(7) (b) (ii) of the 2008 Act militates against such an interpretation. Section 155(7)(b)(ii) provides:

“(7) If a proposal is adopted as contemplated in subsection (6)-

(a) …

(b) the court, on an application in terms of paragraph (a) may sanction the compromise as set out in the adopted proposal, if it considers it just and equitable to do so, having regard to-

(i) …

(ii) in the case of a compromise in respect of a company being wound up, the report of the Master required in terms of the laws contemplated in item 9 of Schedule 5.”

[18] Section 155(7) deals with the circumstances where a compromise had already been adopted. This is not the case in the present application where no compromise had been reached.

[19] Counsel for the respondents argued that Mr Dafel had some residual authority to make the application as being the sole director and shareholder of the first respondent, but could not supply any authority to confirm this proposition.

[20] I cannot agree with this submission, as Mr Dafel himself concedes in his affidavit that Mr Stewart, the liquidator, had informed both him and his wife: “that we have absolutely no further say or locus standi in the affairs of the respondents”. He had known from the appointment of the provisional liquidator that he has no locus standi. Mr Stewart set out in his affidavit that he had informed Mr Dafel that it was not competent in law for Mr Dafel to propose the compromise, as he, as provisional liquidator had been accorded that function.

[21] Notwithstanding this knowledge, Mr Dafel still brought the application for extension, ostensibly on behalf of the third respondent. There can be no doubt that Mr Dafel has no locus standi. The result is that the court cannot entertain the application for the extension of the return date.

[22] Under the circumstances I find that the application should be dismissed due to the fact that the respondents have no locus standi to bring this application.

[23] In the event that I am wrong in finding the respondents’ have no locus standi, I will consider the compromise which the respondents intend to present to the court at the next hearing, should the rule be extended.

[24] The respondents rely on the fact that 75% in value of the investors have indicated that they are interested in the compromise and support the proposed compromise.

[25] After close scrutiny of this proposition to prove this and the documents filed, I cannot agree with counsel for the respondents. In the computations of the voting, Kampstone’s loan account has been inserted and it has been indicated that Kampstone voted “yes” for the compromise. As Kampstone is in provisional liquidation it could not have voted “yes” as Mr Stewart, the liquidator is the only person who could have voted on behalf of Kampstone. A further “yes” vote was recorded for “Loan from Directors (Moffit)” which could not be done as Mr Stewart, the liquidator, had not voted. It seems that should the liquidator not support the proposed compromise, there will not be 75% majority, as required.

[26] It is thus clear that there is not a 75% in value majority of the investors and the prospect that such a compromise will be approved is extremely slim and apparently has no prospect of success. In any event, even if final orders are granted, the court can still be approached in terms of section 155 of Act 71 of 2008 by the liquidator. It is not necessarily the end of the road for the respondents in this regard.

[27] I have considered all the circumstances and can come to no other conclusion but that the application for extension of return dates

must be dismissed, due to the fact that Mr Dafel has no locus standi and that there is no proof that a compromise will be reached. Due to the fact that counsel for thel three respondents conceded that all three respondents are insolvent, there is no doubt that the first respondent should be sequestrated and the second and third respondents should be liquidated.

THE ORDER:

[28] It is ordered:

1. That the estate of Gerritje Dafel is finally sequestrated;

2. That Moffit Properties (Pty) Ltd is finally liquidated;

3. That Kampstone Financial Services CC is finally liquidated;

4. That the application for extension of the return dates is dismissed;

5. Costs will be costs in the liquidation.

_____________________

Judge C Pretorius

Case number

: 64378/2013

Matter heard on

: 1 September 2015

For the Applicant

: Adv. JG Bergenthuin SC

Instructed by

: Van Zyl Le Roux Attorneys

For the Respondent

: Mr P Bielderman

Instructed by

: Bieldermans Inc

Date of Judgment

: 4 September 2015