Ex parte Bruyns, NO: In re Mammoth Construction & Drilling Co (Pty) Ltd (Under Provisional Liquidation)

• Jurisdiction: South Africa
• Judge: Trengove J
• Judgment Date: 28 September 1973
• Court: Transvaal Provincial Division
• Hearing Date: 14 September 1973
• Citation: 1973 (3) SA 721 (T)

Trengove, J.:

The applicant in this matter is the provisional liquidator of Mammoth Construction and Drilling Co. (Pty.) Ltd, a company which was G placed under provisional liquidation by this Court on 15th June, 1971, on the ground that it was unable to pay its debts. Subsequently a director of the company, one Nankin, submitted an offer of compromise with the creditors of the company to the provisional liquidator in terms of the provisions of sec. 103 of the Companies Act, 46 of 1926, as H amended. If this offer is accepted the secured and preferent creditors will be paid the full amount of their claims and the concurrent creditors will receive a dividend of 5 cents in the rand in respect of their claims as proved. The provisional liquidator regards the offer as one suitable for consideration by the creditors and he is of the opinion that it will probably be accepted by the requisite majority of creditors, hence this application. The provisional liquidator seeks an order from the Court directing that a meeting of the creditors of the company be summoned for the purpose of considering

Trengove J

the offer. The petitioning creditor in the winding-up proceedings, one Pienaar, however opposes the application. He wants the Court to reject the provisional liquidator's application so that the winding-up proceedings can take their normal course. I shall presently deal with A the basis of his opposition in more detail.

Thus the issue between the parties is simply whether or not the Court should order a meeting of the creditors of the company to be convened to consider Nankin's offer. The test to be applied by the Court when B considering whether or not to make such an order is by now well established. The Court is primarily interested in what the probable response of the creditors to the offer is likely to be. If the Court, on a consideration of all the information at its disposal, comes to the conclusion that there is a reasonable probability that the requisite majority of the creditors of the company may accept the offer, it will C generally speaking order a meeting of creditors to be convened; on the other hand, if it is not so satisfied, it will refuse to make such an order (Ex parte Turkstra and Others, 1941 T.P.D. 169; Bagus Allie v. Meer-Onia (Pty.) Ltd., 1948 (4) SA 550 (C)). I must, therefore, endeavour to ascertain what the creditors' reaction to the offer made by Nankin will probably be. This depends mainly upon a contrast of what D they may reasonably expect to receive out of the agreement of compromise and what they...