Bagus Allie v Meer-Onia (Pty) Ltd

• Jurisdiction: South Africa
• Judge: De Villiers AJP
• Judgment Date: 29 September 1948
• Hearing Date: 29 September 1948
• Court: Cape Provincial Division

De Villiers, A.J.P.:

This is the return day of a provisional order of liquidation in the matter of Meer-Onia (Pty.) Limited, which is a company carrying on a business at Beaufort West. There is an application before me in terms of sec. 103 of Act 46 of 1926 asking the Court to postpone the return day of this order in order that in the interim an offer of compromise may be submitted to the creditors. The position under sec. 103 is that where any compromise is proposed between a company and its creditors or any class of them, the Court may order a meeting of the creditors to be summoned in such manner as the Court may direct to consider the offer of compromise. Then, that meeting having been held, sub-sec. (2) of sec. 103 of Act 46 of 1926 regulates the further procedure, which is broadly to the effect that if there is a majority in number and also a three-fourths majority in value of creditors who, being present at the meeting, agree to the compromise then that compromise shall, if sanctioned by the Court, be binding on all creditors and also on the company.

The purpose of sec. 103 is to enable the Court to come to the assistance of a company which is in difficulties, enabling it through its proper officers to make an offer to its creditors with a view to relieving it entirely or to a large extent of its liabilities. Sub-sec. (2) makes it clear that a majority in number is required as well as a three-fourths majority in value. That, however, does not conclude the matter, because if such a majority does accept the compromise it might be suggested that the dissentient minority might be repressed or, at any rate, prejudicially affected. That, however, is not the case because it is still for the Court to sanction the compromise or arrangement so agreed upon by this requisite majority. Before sanctioning the compromise or arrangement the Court will have considered and been mindful of the interests and views of the dissentient minority.

One Meer is apparently the moving spirit in this business. It seems that the liabilities of the business are something like £30,000 and the assets at the most amount to £20,000. It is common cause, therefore, that the Company is insolvent. It would appear that of the liabilities about £22,000 worth were incurred in favour of a large number of creditors who, in these proceedings, have been known as Group A, i.e., persons who have lent the Company money or assisted it financially in various ways. There remains...