Van Tonder v Master of the High Court, Pretoria and Others (4766/16) [2016] ZAGPPHC 856 (17 September 2016)

THE REPUBLIC OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

Case no: 4766/16

Reportable: Yes

Of interest to other judges: Yes

Revised.

17/9/16

In the matter between:

GIDEON DANIEL VAN TONDER APPLICANT

AND

THE MASTER OF THE HIGH COURT, PRETORIA FIRST

RESPONDENT

P.W. ENGELBRECHT NO SECOND

RESPONDENT

KOBUS VAN DER WESTHUIZEN NO THIRD

RESPONDENT

LYNN WARRICKER NO FOURTH

RESPONDENT

DUST·A·SIDE (PTY) LTD FIFTH

RESPONDENT

Heard: 15 August 2016

Delivered: 19 September 2016.

Summary: Application to review the decision of the Master, taking control of the administrative and insolvency procedures of a Co-operative

incorporated in terms of the Co-operatives Act of 2005. Interpretation of section 337 of the Companies Act 2008. The provisions section 337 of the Companies Act not applicable to Co· operatives incorporated in terms of the Co-operatives Act of 2005.

JUDGMENT

MOLAHLEHI AJ

Introduction

[1] This is a review application of the decision of the first respondent, the Master of the High Court ('the Master") in appointing the third and fourth respondents as co-liquidators in the estate of Serendipity Support Services Secondary Co-operative (Pty) Ltd

(Serendipity). The other decision, which the applicant seeks to review is the directive by the Master for an inquiry to be conducted

into the affairs of Serendipity in terms of ss 417 and 418 of the Companies Act 61 of 1973 (the 1973 Companies Act).

[2] The issue in the present matter arose from the order made by this court on 19 March 2015, in terms of which Serendipity was declared insolvent.

[3] The application is opposed by the fifth respondent only.

The parties

[4] The applicant was the managing director of Serendipity before its winding up.

[5] The first respondent, is the Master of the High Court, Pretoria appoint as such in terms of the Administration of Estate Act,[1] The second, third and fourth respondents are cited in this matter in their respective official capacities.

[6] The fifth respondent, Dust-A-Side (Pty) Ltd, is a private company registered in terms of the company laws of South Africa. The fifth respondent was the applicant in the liquidation proceedings which were instituted against the Serendipity, including the application for an inquiry into its affairs in terms of ss 417 and 418 of the Companies Act. The fifth respondent is also a creditor of Serendipity.

Background facts

[7] Serendipity was prior to its liquidation registered in terms of the Co-operation Act.[2] It was established as secondary co-operative by three primary co-operations namely:

a. The Arrivals Primary Co-operative,

b. The lsizakele Specialised Services Works Primary Co-operative and

c. The Universal Services Events Primary Co-operative.

[8] As a secondary co-operative, Serendipity was established to provide sectoral services to the above three primary co-operatives.

[9] On 1 August 2014 the fifth respondent issued an urgent application in terms of which it sought provisional winding up of Serendipity under case 56919/14. In terms of paragraph 4.1 of the founding affidavit in the liquidation application, the winding-up was in terms of s72 (1) of the Co-operation Act of 2005 (the 2005 Co-operative Act).

[10] After the liquidation the Master seized control of the administrative matters of Serendipity and issued a certificate of provisional

liquidation on 12 September 2014 under reference number T21494/14. In this regard the third and fourth respondents were appointed as co-liquidators in the insolvent estate and that was done in terms of s71 of the 2005 Co-operatives Act.

"To certain statutory bodies cooperate, however, all or some of the provisions of Chapter XIV do not apply, unless the law under which it is constituted provide otherwise."

[28] In the present matter it is common cause that Serendipity was at the time a co- operative registered in terms of 2005 Co-operate Act. The 2005 Co-operative Act has no provision incorporating the liquidation procedure of the Companies Act. It follows from this that the Master does not have the powers to appoint liquidator/s in the event of the winding-up of a co-operative registered under the 2005 Co-operatives Act. It also follows from this interpretation that the Master did not have the power to seize control and oversea the insolvency procedure

of Serendipity in terms of the Companies Act.

[29] In light of the above analysis, I find that the applicant has made out a case for the review and setting aside the decision of the Master to seize control and oversee the insolvency process of Serendipity including the appointment of the two liquidators. I further see no reason why costs should not follow the results.

Order

[30] In the premises the following order is made:

1. The decision of the First Respondent to seize control and oversee the insolvency procedure of Serendipity Support Services Second Co-Operative (Pty) Ltd, is reviewed and set aside.

2. The Certificate of Appointment of provisional co-liquidators issued by the First Respondent on 12 September 2014 under the reference number T 21594/14 is reviewed and set aside.

3. The appointment of the Third and Fourth Respondents as the provisional co­ liquidators in the estate of Serendipity Support Services Secondary Co­ Operative (Pty) Ltd, Registration No: 2010/00 7509/25 is reviewed and set aside.

4. The directive issued by the First Respondent dated 13th of January 2015 that an enquiry be held into the affairs of Serendipity Support Secondary Co­ operative (Pty) Ltd in terms of Section 417 and 418 of the Companies Act, act 61 of 1973 is reviewed and set aside.

5. The First Respondent's directive dated 13th January 2015 appointing the Second Respondent as a Commissioner in the enquiry of Serendipity Support Secondary Co-operative (Pty) Ltd is reviewed and set aside;

6. That the subpoena issued by the Second Respondent and served upon the Applicant dated the 20th January 2015 directing them to appear at the enquiry is reviewed and set aside.

________________________

Molahlehi E

Judge of the Gauteng Division,

Pretoria.

Appearances:

For the Applicant: Adv. P. G. Cilliers SC, instructed by Schabort & Walker Incorporated

Tel: (012) 329 226 6689 Fax 086226 6689

For the Fifth Respondent: Adv. S.D Wagener SC instructed by Weavind & Weavind Inc

Tel: (012) 346 3098 Fax : 086 618 4944

[1] 66 of 1965.

[2] Act number 14 of 2005.

[3] Act number 91 of 1981.

[4] There is recognition of this lacuna and efforts are underway to address it. See Government Gazette 39019 of 24 July 2015, volume

601, page 42, notice 643 the Co-Operative Administration Regulations, 2015 draft was published. Items 78 to 92 deals specifically with the appointment of a liquidator by the Registrar and sets out the functions and powers of the Liquidator.

[5] The powers of the Master as provided for in chapter 14 of the 1973 Companies Act, has been kept operational despite the repeal of that Act by the provisions of Item 9(1) of Schedule 5 of the Companies Act 2008.

[6] Act number 61 1973.

[7] 2012 (4) SA 593 (SCA) at para 18.

[8] The word co-operative is defined in the Companies Act as follows: "a juristic person as defined in the Cop­ operative Act 2005."

[9] Hoexter, Administrative Law in South Africa, second edition page 255.

[10] The powers and functions of the Master are amongst others found in the Administration of Estates Act 66 of 1965, the Insolvency Act 24 of 1936, the Companies Act 61 of 1973, and the Close Corporations Act 69 of 1984.