Barnard and Others NNO v Imperial Bank Ltd and Another

• Jurisdiction: South Africa
• Citation: 2012 (5) SA 542 (GSJ)

Barnard and Others NNO v Imperial Bank Ltd and Another
2012 (5) SA 542 (GSJ)

2012 (5) SA p542

Citation	2012 (5) SA 542 (GSJ)
Case No	2008/12164
Court	South Gauteng High Court, Johannesburg
Judge	Weiner J
Heard	September 19, 2011
Judgment	November 1, 2011
Counsel	WJ Vermeulen SC (with LW de Beer) for the plaintiffs.; PG Robinson SC (with AC Botha) for the first defendant.

Flynote : Sleutelwoorde B

Company — Winding-up — Liquidator — Proceedings by and against — Citation — Liquidator may sue nomine officio or in name of company in liquidation in proceedings under section — Companies Act 61 of 1973, s 386(4)(a).

Headnote : Kopnota

C Under s 386(4)(a) of the Companies Act 61 of 1973 a liquidator may sue nomine officio or in the name of the company in liquidation. (Paragraphs [19], [28] and [34] at 546H, 548E and 550B.)

Cases Considered

Annotations:

Case law D

Airborne Express CC v Van den Heever NO (WLD case No 05/18568): followed

Ex parte Liquidator, Vautid Wear Parts (Pty) Ltd (in Liquidation) 2000 (3) SA 96 (W): referred to

Fey NO and Another v Lala Govan Exporters (Pty) Ltd 2011 (6) SA 181 (W): not followed E

Four Tower Investments (Pty) Ltd v André's Motors 2005 (3) SA 39 (N): approved

Friends of the Sick Association v Commercial Properties (Pty) Ltd and Another 1996 (4) SA 154 (D) ([1996] 2 All SA 611): referred to

Fundstrust (Edms) Bpk (in Likwidasie) v Marais en Andere 1997 (3) SA 470 (C): referred to F

Janse Van Rensburg NO v Ladislav 2006 JDR 0815 (T): referred to

Luxavia (Pty) Ltd v Gray Security Services (Pty) Ltd 2001 (4) SA 211 (W) ([2001] 2 All SA 506): referred to

Neon and Cold Cathode Illuminations (Pty) Ltd v Ephron 1978 (1) SA 463 (A): G referred to

Rosner v Lydia Swanepoel Trust 1998 (2) SA 123 (W): referred to

Shepstone & Wylie and Others v Geyser NO 1998 (1) SA 354 (N): referred to

Shepstone & Wylie and Others v Geyser NO 1998 (3) SA 1036 (SCA) ([1998] 3 All SA 349): referred to.

Statutes Considered

Statutes H

The Companies Act 61 of 1973, s 386(4)(a): see Juta's Statutes of South Africa 2011/12 vol 2 at 1-212.

Case Information

I An application to amend particulars of claim.

WJ Vermeulen SC (with LW de Beer) for the plaintiffs.

PG Robinson SC (with AC Botha) for the first defendant.

Cur adv vult.

Postea (November 1). J

2012 (5) SA p543

Judgment

Weiner J: A

[1] The plaintiffs/applicants were cited in the particulars of claim in this matter nomine officio in their capacities as joint liquidators in the estate of Pro Med Construction CC (in liquidation) (Pro Med).

[2] Pro Med was finally wound up by this court on 8 December 2004. B

[3] For ease of reference, the parties will be referred to as in the main action.

[4] The plaintiffs seek to amend the citation on the basis that it is not strictly in accordance with the provisions of s 386(4)(a) of the Companies Act 61 of 1973 (the Act). C

[5] Section 386(4)(a) refers to the powers of liquidators and provides that the powers referred to in ss (3) are —

'(a)

to bring or defend in the name and on behalf of the company any action or other legal proceedings of a civil nature . . . .' [Emphasis added.] D

[6] The plaintiffs delivered a notice in terms of rule 28 of the Uniform Rules of Court on 17 February 2011 declaring an intention to amend paras 1.1 to 1.5 of its particulars of claim.

[7] In so doing, the plaintiffs seek to replace those paragraphs with the following: E

'1.

The plaintiff is Pro Med Construction CC (in liquidation) (Pro Med) (Master's Reference G27/50/04) duly represented herein by —

1.

Hendrik Jacobus Rust Barnard NO

2.

Norman Klein NO F

3.

Farouk Sharief NO

4.

Themba Benedict Langa NO

5.

Itumeleng Brenda Mohale NO

who bring this action in the name and on behalf of Pro Med in terms of the provision of s 386 of the Companies Act 61 of 1973.'

[8] The defendants objected to the amendment on the basis that: G

(a)

The liquidators were not entitled to institute the actions in their own names;

(b)

the liquidators were not the creditor as envisaged in terms of s 15(1) of the Prescription Act 68 of 1969 (the Prescription Act);

(c)

the service of the summons did not interrupt the running of H prescription;

(d)

Pro Med's claim has accordingly become prescribed; and

(e)

the effect of the proposed amendment is to seek substitution of Pro Med as the plaintiff in the action.

[9] The plaintiffs contend that the defendants' objection is ill-conceived I in that, inter alia, the liquidators did not institute the action in their own names but in a representative capacity for and on behalf of Pro Med (in liquidation).

[10] Legal authority is divided as to the correct manner of citation of the plaintiff in proceedings brought by the company or its liquidator. J

2012 (5) SA p544

Weiner J

A [11] In this division [1] I was referred to two judgments:

(a)

In Fey NO and Another v Lala Govan Exporters (Pty) Ltd 2011 (6) SA 181 (W) Epstein AJ held [2] that any action brought by the liquidator pursuant to his powers under s 386(4)(a) must be B brought in the name of the company and not by the liquidator in his representative capacity. On the other hand where proceedings are by the liquidator in his capacity as such, eg for a direction from the court, or where he is exercising a statutory power to bring them, the manner of citation should be in the name of the liquidator and that he is acting in the capacity as such. In the Fey matter the plaintiffs C were cited as —

'Eileen Margaret Fey NO, an adult woman who sues in her capacity as joint liquidator with the Second Plaintiff of Lala Govan Cape (Pty) Ltd (reg No 2002/029247/07), in liquidation (Lala Govan) . . . .'

D And —

'Nawaal Cloete NO, an adult woman who sues in her capacity as joint liquidator with the First Plaintiff of Lala Govan . . . .' [At para 4.]

(b)

In Airborne Express CC v Van den Heever NO [3] Msimeki AJ (as he then was) held [4] that —

E 'it surely is pedantic and unnecessary to draw the distinction between the cases where the liquidator acts in the name of the company in liquidation and where he acts in his capacity as liquidator nomine officio. It is, indeed, a question of form over substance whether the liquidator is cited as plaintiff representing the company or whether the company is cited as the plaintiff.'

F [12] In KwaZulu-Natal, in Shepstone & Wylie and Others v Geyser NO [5] (N), Hugo J stated [6] that, although s 386(4)(a) of the Act empowers the liquidator 'to bring . . . in the name and on behalf of the company' any action, in practice such actions are frequently brought in the name of the liquidator with the letters NO appended. Hugo J held that he had been G unable to find any rule that distinguishes the two forms of citation.

[13] The KwaZulu-Natal court went on to find that, whilst the company in liquidation may have been incorrectly cited, it was not non-suited. The case was overruled in the SCA, [7] but on another point. The question H of citation was not dealt with in the SCA. However, Hefer JA [8] held in

2012 (5) SA p545

Weiner J

relation to s 13, regarding an application for security for costs in legal A proceedings, that —

'express reference in s 13 to a company which is being wound up and to its liquidator indicates that the legislature envisaged cases where the plaintiff or applicant is a company in liquidation. It could not have been unaware of the fact that in such cases the company is always represented by B the liquidator, whether the latter sues nomine officii or not.' [Emphasis added.]

[14] In Janse van Rensburg NO v Ladislav [9] Southwood J dealt with an exception on the basis that the liquidators of a company lacked C locus standi to bring a claim to impeach a transaction because of the provisions of s 386(4)(a) of the Act. Southwood J stated the following in his judgment:

'[2] . . . The excipient relies on the unreported judgment of Epstein AJ in the Witwatersrand Local Division in the matter between D Eileen Margaret Fey NO and Nawaal Cloete NO v Mahandrabai Naran Gowan WLD case No 19644/05 in which the court upheld the point raised in the present exception.

[3] The plaintiff's counsel . . . contends that s 386(4)(a)...