Ellis v Saga Wine Farms (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Dlodlo J
• Judgment Date: 04 April 2014
• Docket Number: 4469/2014
• Court: Western Cape High Court, Cape Town
• Hearing Date: 28 March 2014
• Citation: 2014 JDR 0764 (WCC)

Dlodlo, J

INTRODUCTION

[1]

The Applicant in this matter was appointed as financial manager of the First Respondent in terms of various accounting services agreements. These agreements have never been terminated. The First Respondent is a company duly incorporated in accordance with the Company Laws of

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South Africa. The First Respondent had only one shareholder and director by the name of Roza Galimovna Sagazidinov (hereinafter referred to as "Roza"). Roza was a resident in Moscow, Russia and she died on 3 August 2013. Even at the time of Roza's demise, she was still the sole shareholder and director of the First Respondent. At the time of Roza's death, the First Respondent owned an immovable property which operated as a wine estate under the name and style of Lushof Wine Estate. Roza had two children cited as Second and Third Respondents in this application. It does appear though in the Founding papers that the relationship between the Second and third Respondents is estranged and/or that there exist animosity between the two. The Second and Third Respondents are sisters and they are both resident in Moscow, Russia. It seems common cause that Roza died without a Will at least in respect of her shareholding and directorship of the First Respondent. In other words there is no instrument she left that deals with the distribution of her South African assets. For all intents and purposes Roza died intestate in respect of at least her South African assets. According to the Founding papers there is currently nobody acting on behalf of the First Respondent.

[2]

It is, however, common cause that the Fifth Respondent is the manager of the farm owned by the company which is involved in the growing of wine grapes and making of wine. An Executor has apparently been appointed to the deceased's Russian estate. However, in South Africa to date the Master has not yet appointed either the Executor to the South African estate of Roza, nor has an Interim Curator been appointed by the Master to such estate as envisaged in terms of Section 12 (1) of the Administration of Estates Act. The Fourth Respondent applied to the Master on nomination of one of the two interstate heirs (the Second and Third Respondents), for his appointment as Executor. The Master

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required the Fourth Respondent (if appointed) to put up security in terms of the Administration of Estates Act. The Fourth Respondent failed to put up security. Another objectionable aspect is that the Fourth Respondent is also the attorney of record of the Second Respondent (with whom the Third Respondent is in conflict). An objection was thus lodged with the master against the Fourth Respondent's appointment.

[3]

The Third Respondent according to the Answering papers has nominated an independent third party as Interim Curator and who in due course would become the Executor of the deceased's South African estate. I understand that such a request has been submitted to the Master. The proposed appointee is a senior attorney (Mr. Johann Jacobs) who is the director of the established law firm Cliffe Dekker Hofmeyr Inc and he specializes in the administration and winding up of deceased estates. In truth the Administration of Estates Act provides for the manner in which the Master is to proceed in such circumstances. Importantly, any appointment as Executor or Interim Curator is one to be made by the Master in terms of the Act and subject to such person providing security to the satisfaction of the Master. No such appointments are made by Courts of law. The Applicant seeks an order that he be appointed as "Interim Receiver" to the First Respondent. The Third and Fourth Respondents oppose this application and in limine they contend that:

(a)

The application is misconceived and the relief sought cannot and should not be granted;

(b)

The matter lacks urgency and the launch of the application on urgent basis is an abuse of Court process.

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THE RELIEF SOUGHT

[4]

As highlighted supra the Applicant apart from seeking that he be appointed as "Interim Receiver", he also seeks his appointment:

"pending the finalization of the administration of the deceased estate of the late Roza Sagazidinova" and "that such interim receiver be authorized and directed to take control of the business of the company, including but not limited to all assets, sales and finance of the company."

The Applicant further seeks relief that the Receiver (himself) be authorized and directed to:

(a)

Preserve all the assets of the company; (b) Receive all income of the company, and to pay all reasonable expenses and disbursements of the company into the company's banking accounts; (c) Bring or defend any action or legal proceedings on behalf of the company; (d) Compromise any debt of the company; (e) continue with agreements, cancel leases, or employment agreements on behalf of the company; (f) Employ bookkeepers, accountants, auditors or any person on behalf of the company; (g) Exercise the power to borrow money required for the business of the company; and (h) Approach the Court for further directions and powers.

DISCUSSION

[5]

Mr. Montzinger prefixed his submissions by emphasizing the juristic nature of the First Respondent. For this he relied on the provisions of Section 19 (1) (a) and (b) of the Companies Act, 2008 ("the Companies Act"). Section 19 (1) (a) and (b) reads:

"From the date and time that the incorporation of a company is registered, as stated in its registration certificate, the company-

(a)

Is a juristic person, which exist continuously until its name is removed from the companies register in accordance with this Act;

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(b)

Has all the legal powers and capacity of an individual, except to the extent that-

(i)

A juristic person is incapable of exercising any such power, or having any such capacity; or

(ii)

The company's Memorandum of Incorporation provides otherwise."

Mr. Montzinger also placed reliance on the commentary to the above uoted section by writers in Henochsberg (formerly edited by: The late Hon Mr. Justice PM Meskin, Authors being Professor Piet Delport and Professor Quintus Vorster), namely:

"…It is one of the cardinal principles of company law that "[a] registered company is a legal persona distinct from the members who compose it…This conception of the existence of a company as a separate entity distinct from its shareholders is no merely artificial and technical thing…"

I intend dealing with Mr. Montzinger's submission later on in this judgment.

[6]

For present purposes it suffices that I mention that the juristic nature of the First Respondent has not been disputed. I may add as well that this is not an issue that plays a role in the determination of the application brought by the Applicant. Substantiating the application it was submitted on behalf of the Applicant that the concept of appointing a receiver is not a strange concept in South Africa; this is evidenced by Section 311 of the Companies Act 61 of 1973. Section...