Rustenburg Crematorium (Pty) Ltd and Others v Jordaan N.O and Others (CIV APP FB 01/2018) [2023] ZANWHC 49 (6 April 2023)

IN

THE HIGH COURT OF SOUTH AFRICA

NORTH WEST DIVISION - MAHIKENG

CASE NO.: CIV APP FB 01/2018

HIGH COURT CASE NUMBER: M9/2015

Reportable: NO

Circulate to Judges: NO

Circulate to Magistrates: NO

Circulate to Regional Magistrates: NO

In the matter between:

RUSTENBURG CREMATORIUM (PTY) LTD

1ST APPELLANT

JOSLYN

H GELDENHUYS

2ND APPELLANT

FREDERICK

L GELDENHUYS

3RD

APPELLANT

THE TRUSTEE OF THE RUSTY’S

FAMILIE

TRUST

4TH APPELLANT

AND

ADRIAAN JORDAAN N.O

1ST RESPONDENT

DALEEN JORDAN N.O

2ND RESPONDENT

VOLKER

HELMUT JOHANNES KRUGER

3RD RESPONDENT

CIVIL

APPEAL

CORAM: PETERSEN J, REDDY AJ AND MFENYANA AJ

ORDER

(i) The appeal is upheld.

(ii) The order of the court a quo (per Kgoele J) placing the first appellant in final liquidation is set aside and replaced with the following order:

“The application for the final liquidation of the first respondent (Rustenburg Crematorium (Pty) Ltd) is dismissed with costs.”

(iii) The first to third respondents shall pay the costs of appeal which costs shall include the costs of the court a quo in dismissing the application for leave to appeal and the costs of the application for leave to appeal in the Supreme Court of Appeal, jointly and severally, the one paying the other to be absolved.

JUDGMENT

PETERSEN J

Introduction

[1] This is an appeal to the Full Court of this Division against the whole of the judgment and order of Kgoele J (the court a quo) handed down on 15 December 2016. The appeal comes before this Court with leave of the Supreme Court of Appeal granted on 23 October 2017 on petition by the appellant only against the judgment and order of Kgoele J. Leave to appeal has been granted in the following terms:

“1) Leave to appeal is granted to the Full Court of the North West Division of the High Court, Mahikeng.

2) The costs of the court a quo in dismissing the application for leave to appeal is set aside AND the costs of the application for leave to appeal in this court and the court a quo are costs in the appeal. If

the applicant does not proceed with the appeal, the applicant is ordered to pay these costs.”

Chronology

[2] The respondents (applicants in the court a quo) launched an application on 16 January 2015, which was enrolled on 19 February 2015, in which they sought an order in the following terms:

“1. The Respondents are ordered to keep proper accounting records of the First Respondent for the financial years from 2011 to 2015 and kept at the registered office of the First Respondent;

2. The Respondents are ordered to make available to the Applicants forthwith the revised annual financial statements for the years 2011 to 2014, as well as the memorandum of incorporation of the First Respondent;

3. The First Respondent is ordered to call an annual general meeting, in the alternative special general meetings for the years 2011 to 2015;

4. The Second and Third Respondent, alternatively the First Respondent is ordered to make available to the Applicants forthwith draft annual financial statements for the years 2011 to 2015 for its consideration

prior to the convention of the annual general meetings;

5. The Respondents are ordered to convene forthwith an annual general meeting, alternatively a special general meeting to consider and finalise the annual financial statements for the year 2011 to 2014 and to deal with any matter arising therefrom;

6. The Second Respondent is ordered to reimburse the sum of R641609.72 to the First Respondent in respect of directors’ remuneration;

7. The Second and Third Respondent is ordered to pay the cost of this application, jointly and severally, the one paying the other to be absolved;

8. Further and/or alternative relief.”

[3] The appellants (respondents in the court a quo) filed a notice of opposition on 06 February 2015. On 17 February 2015, the application was removed from the unopposed roll as the matter had become opposed. It would appear that the appellants filed their answering affidavit around 04 March 2015. On 06 March 2015, the fourth appellant as represented by the second appellant in her capacity as director of the first appellant and in her capacity as a trustee of the fourth appellant, filed a counter application. The details of the counter application need not detain this Court for purposes of this appeal. The respondents thereafter filed their replying affidavit on 26 March 2015.

[4] On 29 April 2015, the respondents applied to the Registrar of this Court for the allocation of a date for hearing of the application on the opposed motion court roll. It is not clear from the papers which date, if any, had been allocated by the Registrar. What the record next reflects is that the first respondent (Adriaan Jordaan N.O. in his official capacity of the Adriaan Jordaan Familie Trust) on, 27 August 2015, delivered an Amended Notice of Motion in which the main relief he sought, enrolled for hearing on 10 September 2015, was couched in the following terms in respect of the first appellant (“the Rustenburg Crematorium”):

“1. The First Respondent company be and is hereby placed under provisional winding-up;

2. That all persons who have a legitimate interest are called upon to put forward their reasons why the Court should not order the final winding-up of the First Respondent on 22 October 2015 at 10:00;

3. That a copy of this order be forthwith served on the First Respondent company at its registered office and be published in the Government Gazette and in the Citizen newspaper;

4. That a copy of this order be forthwith forwarded to each known creditor by prepaid registered post; …”

[5] The first respondent in addition to the main relief sought in the Amended Notice of Motion, relegated the relief he sought in the initial/original Notice of Motion to a prayer for alternative relief.

[6] The Amended Notice of Motion reflects that it was served on the appellants attorneys of record, the South African Revenue Service (SARS) and the Master of the High Court on 27 August 2015. Prior to the Amended Notice of Motion being filed with the Registrar, the first respondent through his legal representatives caused letters to be served by the Sheriff of this Honourable Court on a number of persons informing the said persons that an application would be made on 10 September 2015, for the provisional liquidation of the Rustenburg Crematorium. The said persons were identified in the Sheriffs returns as follows, all letters having been served on the second appellant. The second appellant (first defendant); a person identified as Nico Oberholzer (second defendant); Liandi Mitchell (third defendant); Illza Mitchell (fourth defendant); Armand (Puna) Goosen (fifth defendant); D Makatatene (sixth defendant); B Kapenda (seventh defendant); and D Moganga (eighth defendant). None of the said persons, save for the second appellant were cited as respondents in the liquidation application. They appear to have been the employees of the Rustenburg Crematorium.

[7] On 10 September 2015 and by agreement between the parties, an order was granted by the Court (per Landman J), the consent order, in the following terms:

“1. THAT: The matter be and is hereby removed from the roll for the 10th day of September 2015;

2. THAT: The costs wasted occasioned by the removal are reserved for

determination by the Court ultimately hearing the application;

3. THAT: The Applicants consent to the supplementary affidavit filed by the Respondents as being admitted as forming part of the papers in the main application;

4. THAT: The Applicants are afforded the opportunity of filing further affidavits in response thereto, such affidavits to be filed on or before the 25th day of SEPTEMBER 2015, leave being granted to the Respondents to respond thereto, if so advised and if necessary;

5. THAT: The notice of amendment of the notice of motion of the Applicants in terms whereof

they seek the liquidation of the First Respondent is noted but not opposed, subject thereto that Respondents contend that no case has been made out for the relief sought by the Applicants in the amended notice of motion and legal submissions will be made to the above Honourable Court at the final hearing of the application.”

[8] The application was consequently enrolled for hearing on 3 March 2016. On 3 March 2016, a number of points in limine were argued before Gura J and judgment was reserved. On 01 August 2016 judgment was handed down. The order reads as follows:

“IT

IS ORDERED

THAT: The First Respondent be and is hereby placed under provisional winding-up;

THAT: All persons who have a legitimate interest be and are hereby called upon to put forward their reasons why the Court should not order the final winding-up of the First Respondent on the 15th day of SEPTEMBER 2016 at 10:00;

THAT: A copy of this order be served on the First Respondent at its registered office, all the employees of the First Respondent and be published in the Government Gazette and in the Sowetan Newspaper;

THAT: A copy of this order be forwarded to each known creditor by prepaid registered post;

THAT: The First and Second Respondents pay the costs of this application jointly and severally, the one paying the other to be absolved;

THAT: Such costs to include costs of the 10th day of SEPTEMBER 2015.”

[9] Counsel before us remain at loggerheads, as they were before Kgoele J, on whether or not argument was presented on the application for the provisional liquidation of the Rustenburg Crematorium, before

Gura J on 3 March 2016.

[10] On 15 December 2016, Kgoele J granted an order placing the Rustenburg Crematorium in final liquidation. As indicated supra the appeal lies against this final order, premised on leave to appeal having been granted by the SCA. The provisional order of Gura J is not an appealable order and it follows axiomatically that leave to appeal could only be sought on petition to the SCA against the final liquidation order of Kgoele J. The provisional order of Gura J in terms of which the Rustenburg Crematorium was placed in provisional liquidation was the catalyst for the final liquidation order granted by Kgoele J. Absent the provisional liquidation order, having regard to the peculiar circumstances of this matter, no final liquidation order could be granted by Kgoele J. It will therefore be shown that the provisional order of Gura J is inextricably linked to the final order of Kgoele J and that the final order was not competent because of a material misdirection by Gura J in granting the provisional order.

Factual Background

[11] The first and second respondents are married and trustees of the Adriaan Jordaan Family Trust along with the third respondent. The Adriaan Jordaan Family Trust has a 49% shareholding in the Rustenburg Crematorium. The second and third appellants are similarly married and trustees of the Rusty Family Trust which has a 51% shareholding in the Rustenburg Crematorium.

[12] The respondents alleged that the Rustenburg Crematorium was in financial difficulty. They premised this

allegation on the conduct of the second and third appellants. In this regard they firstly allege, that the second and third appellants

operated the business of the Rustenburg Crematorium as a personal slush fund. In amplification of this averment, they alleged that the third appellant had drawn an amount of R641 609.72 from the Rustenburg Crematorium’s bank account under the ruse or guise

of being director’s remuneration. In brief, the respondents alleged that the second and third appellants were financially

irresponsible. Secondly, the respondents alleged that the second and third appellants demonstrated a flagrant disregard for the

legislative provisions of the Companies Act 71, 2008 (“the Companies Act”). In particular, they allege that the second and third appellants, failed to comply with the provisions of sections 24 and 25 of the Companies Act. They are alleged to have failed to keep a memorandum of incorporation as required by section 24(3); failed to hold annual general meetings (shareholders meetings) as required by section 24(3)(c) and (d); and failed to prepare annual financial statements as required by section 30 of the Companies Act.