Berrange NO and others v Master of the High Court Pietermaritzburg and others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Nkosi J
• Judgment Date: 17 August 2023
• Citation: 2023 JDR 3156 (KZD)
• Hearing Date: 03 August 2023
• Docket Number: D4697/2023
• Court: KwaZulu-Natal Local Division, Durban

Nkosi J:

Introduction

[1]

The applicants are the joint provisional liquidators of Misty Blue Investments (Pty) Ltd (“Misty Blue”), Personify Investments (Pty) Ltd (“Personify”) and Huntrex 302 (Pty) Ltd (“Huntrex”) (all in provisional liquidation), respectively. They were appointed by the Master of the High Court, Pietermaritzburg, who is cited as the first interested party in these proceedings, on 21 July 2021. They are seeking leave from this court to launch this application in terms of s 386(5), read with s 386(4)(a) of the Companies Act, 61 of 1973 (“the 1973 Act”), and in terms of s 386(5) read with s 386(4)(h) to sell, by private treaty or public auction, a restricted number of immovable properties owned by Misty Blue and Personify, as well as the movable property owned by Huntrex, and to give transfer of ownership thereof. The application is opposed by the second and third interested parties, who are the co-directors and shareholders of Personify and Huntrex, while the second applicant is the sole shareholder and director of Misty Blue.

Factual background

[2]

The factual background to the matter, briefly stated, is that Misty Blue, Personify and Huntrex are all interrelated companies. Misty Blue and Personify are property owning and development companies, while Huntrex does active trading in the form of leasing immovable properties from Misty Blue and Personify and conducting trading operations in the hospitality industry, apart from some commercial properties in The Square, and a property development component in the development known as Urban Park. Investec Bank Limited, which is cited as the fourth interested party in these proceedings, is the major creditor off all three

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companies and, as a secured creditor, has perfected notarial bonds in respect of movable assets owned by Huntrex.

[3]

On 12 July 2019, Investec had launched winding-up applications against all three companies in this court. The said applications were adjourned from time to time, first, following a resolution adopted by the directors to commence business rescue proceedings and, on other occasions, following settlement agreements concluded between Investec and the companies’ directors to restructure the debts. On 7 August 2020, the directors, who are also shareholders of the three companies, launched applications to place the three companies under business rescue. This resulted in the winding-up applications being suspended in terms of s 133 of the Companies Act, 71 of 2008 (“the 2008 Act”), pending the outcome of the business rescue applications.

[4]

The business rescue applications and the winding-up applications were heard jointly by Ploos van Amstel J, who delivered his judgment on 29 June 2021 dismissing the business rescue applications in respect of all three companies. He also granted the provisional winding-up orders against them in the hands of the Master of the High Court, Pietermaritzburg, who is cited as the first interested party in these proceedings. The three companies applied for leave to appeal against the dismissal of their business rescue applications, but their application was refused by Ploos van Amstel J on 17 August 2021. They then applied for leave to appeal to the Supreme Court of Appeal (SCA), but their application was dismissed by that court on 5 November 2021. They followed up with a reconsideration application to the SCA, which was dismissed by the President of that court on 23 February 2022. The dismissal of their business rescue application by the Constitutional Court (on 21

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October 2022) finally sounded the death knell for their bid to be placed under business rescue.

[5]

What remained was for this court to consider the applications for the final winding-up of the three companies, which were adjourned to 23 February 2023, with the provisional winding-up orders extended to that date. However, on 20 February 2023, which was a mere two days before the return date, a certain Vardraj Munsamy Chetty had brought a fresh business rescue application in respect of the three companies using the long form notice of motion. That application was set down for hearing on 30 May 2023, which resulted in the hearing of the liquidation applications not proceeding as scheduled on 23 February 2023. Believing that Chetty’s intention was to derail the liquidation proceedings, in collusion with the second interested party, the applicants decided to bring this application requesting that they be given power by this court to elicit offers for consideration and to dispose of immovable properties which they contend are over-burdening the estates of the three companies (in provisional liquidation) in avoidable costs.

The relevant provisions of the 1973 Act

[6]

Of particular relevance for the purposes of this application are the provisions of s 386 of the 1973 Act, the relevant portions of which are the following:

‘(3)

The liquidator of a company –

(a)

in a winding-up by the Court, with the authority granted by meetings of creditors and members or contributories or on the directions of the Master given under section 387. . .

shall have the powers mentioned in subsection (4).

(4)

the powers referred to in subsection (3) are –

. . .

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(h)

to sell any movable and immovable...