University of Fort Hare v Wavelengths 256 (Pty) Ltd (8605/2005) [2007] ZAWCHC 56 (18 October 2007)

University of Fort Hare v Wavelengths 256 (Pty) Ltd (8605/2005) [2007] ZAWCHC 56 (18 October 2007)

Section 359 of the Companies Act does not prevent the court from making a costs order against a director personally, as such an order is not against the company and does not affect the interests of the general body of creditors. Mrs. Williams acted unreasonably and vexatiously by failing to disclose the company's liquidation, causing wasted costs through unnecessary postponements, and providing inconsistent and misleading explanations for her conduct. The applicant is entitled to indemnification for wasted costs, and fairness requires that Mrs. Williams bear these costs personally and on the attorney and client scale. The previous costs order is amended to reflect the true financial...

Citation
[2007] ZAWCHC 56
Parties
Applicant: University of Fort Hare; Respondent: Wavelengths 256 (Pty) Ltd
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
18 October 2007
Case Number
8605/2005
Procedural Posture
Civil Application / Postponement and Costs Determination Following Provisional Liquidation
Outcome
The application is postponed pending the appointment of a liquidator. Mrs. Williams is ordered to pay the wasted costs of the postponements personally and on the attorney and client scale. The previous costs order is amended to reflect this.
Judges
Dlodlo
Legal Topics
Costs Award, Director Liability, De Bonis Propriis, Postponement, Liquidation Proceedings
Civil Procedure Commercial and Corporate Costs Award Director Liability De Bonis Propriis Postponement Liquidation Proceedings

Case Brief

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Parties

University of Fort Hare

Applicant

Wavelengths 256 (Pty) Ltd

Respondent

Procedural Posture

Civil Application / Postponement and Costs Determination Following Provisional Liquidation

Legal Issues

  1. 1 Whether section 359 of the Companies Act prevents the court from making a costs order against a director personally following the provisional liquidation of the company.
  2. 2 Whether Mrs. Williams should be ordered to pay wasted costs personally and on the attorney and client scale due to her conduct.
  3. 3 Whether the previous costs order should be amended in light of new material facts regarding the company's insolvency.

Ratio Decidendi

Section 359 of the Companies Act does not prevent the court from making a costs order against a director personally, as such an order is not against the company and does not affect the interests of the general body of creditors. Mrs. Williams acted unreasonably and vexatiously by failing to disclose the company's liquidation, causing wasted costs through unnecessary postponements, and providing inconsistent and misleading explanations for her conduct. The applicant is entitled to indemnification for wasted costs, and fairness requires that Mrs. Williams bear these costs personally and on the attorney and client scale. The previous costs order is amended to reflect the true financial...

Court Disposition

The application is postponed pending the appointment of a liquidator. Mrs. Williams is ordered to pay the wasted costs of the postponements personally and on the attorney and client scale. The previous costs order is amended to reflect this.

Orders

  • The application under the above case number is postponed pending the appointment of a liquidator to the Respondent.
  • The wasted costs occasioned by this postponement are to be borne by Mrs. Elsie Maria Magdalena Williams in her personal capacity (de bonis propriis) and on the attorney and client scale.