Fey NO and Another v Lala Govan Exporters (Pty) Ltd

• Jurisdiction: South Africa
• Citation: 2011 (6) SA 181 (W)

Fey NO and Another v Lala Govan Exporters (Pty) Ltd
2011 (6) SA 181 (W)

2011 (6) SA p181

Citation	2011 (6) SA 181 (W)
Case No	19643/05 and two other cases
Court	Witwatersrand Local Division
Judge	Epstein AJ
Heard	June 19, 2006
Judgment	August 12, 2011
Counsel	J Muller SC for the applicants.; P Pauw SC for the respondent.

Flynote : Sleutelwoorde B

Company — Winding-up — Liquidator — Proceedings by and against — Proceedings brought by liquidator on behalf of company must be brought in name of company — Companies Act 61 of 1973, s 386(4)(a). C

Headnote : Kopnota

A legal proceeding brought by a liquidator in terms of s 386(4)(a) of the Companies Act 61 of 1973 must be brought in the name of the company. (Paragraphs [20], [21] and [22] at 186H – J and 188B.)

Cases Considered

Annotations: D

Reported cases

Curtis-Setchell & McKie v Koeppen 1948 (3) SA 1017 (W): applied

De Villiers and Others NNO v Electronic Media Network (Pty) Ltd 1991 (2) SA 180 (W): referred to

Devonia Shipping Ltd v MV Luis (Yeoman Shipping Co Ltd Intervening) 1994 (2) SA 363 (C): referred to E

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

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

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

Page v Malcomess & Co 1922 EDL 284: referred to

Sentrakoöp Handelaars Bpk v Lourens and Another 1991 (3) SA 540 (W): applied

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

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

Unreported cases

Airborne Express CC and Another v Van den Heever NO and Others (WLD case No 05/18568): not followed.

Statutes Considered

Statutes H

The Companies Act 61 of 1973, s 386(4)(a): see Juta's Statutes of South Africa 2010/11 vol 2 at 1-288.

Case Information

Application to amend particulars of claim. I

J Muller SC for the applicants.

P Pauw SC for the respondent.

Cur adv vult.

Postea (June 19). J

2011 (6) SA p182

Judgment

Hilton Epstein AJ: A

[1] The issue in all of these applications is whether a liquidator who brings or defends an action or legal proceedings in terms of s 386(4)(a) of the Companies Act 61 of 1973 (the Act) can be cited in his or her official capacity or whether the company in liquidation itself B must be cited.

[2] The plaintiffs are the joint liquidators of Lala Govan (Cape) (Pty) Ltd (Lala Govan Cape) which was provisionally wound up by order of the Cape of Good Hope Provincial Division on 10 June 2004 under case No 4727/04. C A final winding-up order was granted on 20 July 2004.

[3] The plaintiffs have instituted three separate actions in this Division against Lala Govan Exporters (Pty) Ltd (case No 19643/05), Allimpex CC (case No 19642/05) and Mahandrabai Naran Gowan (case No 26624/05). The actions in each of the three cases are similar. An order is sought to set aside dispositions allegedly made by Lala Govan Cape to D the defendants in terms of s 340(1) of the Act read with ss 26, alternatively 29, further alternatively 30 of the Insolvency Act 24 of 1936. An order is also sought in each case that the defendant be ordered to pay the amount of the alleged dispositions to the plaintiffs.

[4] In each of the actions the plaintiffs are cited as follows:

E '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) and is employed by Price Waterhouse Coopers Business Recovery & Insolvency (Pty) Ltd, of 1 Waterhouse Place, Century City, Cape Town.

Nawaal Cloete NO, an adult woman who sues in her capacity as joint F liquidator with the First Plaintiff of Lala Govan and conducts business as Nawaal Cloete & Associates of 38 Langhouse, 60 Kloof Street, Gardens, Cape Town.'

[5] All three applications were heard by me at the same time because the same issue is determinative of each application. It is convenient to deal G with them in one judgment. I will refer specifically to the plaintiffs' action against Lala Govan Exporters (Pty) Ltd although the conclusion in this judgment is the same in all three applications.

[6] The procedural history of the case against Lala Govan Exporters (Pty) Ltd is the following:

(i)

H The defendant filed an exception to the plaintiffs' particulars of claim on the basis that they do not disclose a cause of action. The grounds for the exception are:

(a)

The plaintiffs allege that they are the liquidators of Lala Govan Cape. They cite themselves in their official capacities as liquidators. I

(b)

The claims are based on the provisions of s 340 of the Act read with ss 26 and 30 of the Insolvency Act.

(c)

Section 386(4)(a) of the Act provides that the plaintiffs may bring a claim in the name and on behalf of the company in liquidation. It does not entitle them to bring the claim in their J names as liquidators.

2011 (6) SA p183

Hilton Epstein AJ

(d)

In the circumstances, the plaintiffs should have cited the A company in liquidation as the plaintiff.

(e)

In the premises, the plaintiffs, as liquidators, do not have any standing to bring the claim.

(ii)

The exception was not dealt with but rather the plaintiffs served a notice of intention to amend their summons and particulars of B claim. The effect of the amendment sought would be to cite the first plaintiff as follows:

'The First Plaintiff is Eileen Margaret Fey NO, an adult woman who sues in her capacity as joint liquidator with the Second Plaintiff on behalf of and in the name of Lala Govan Cape (Pty) Ltd (reg No 2002/029247/07), in liquidation. . . .' [My emphasis.] C

The same amendment would be effected, if allowed, in respect of the second plaintiff.

(iii)

The defendant objected to the proposed amendment on the basis that s 386(4)(a) of the Act provides that the plaintiffs as liquidators D may bring the claim in the name and on behalf of the company in liquidation. It does not entitle the plaintiffs to bring the claim in their names as liquidators. The defendant contends that the proposed amendment does not have the effect of the plaintiffs bringing the claim on behalf of the company in liquidation. By such proposed amendment the plaintiffs will still be instituting the claim of the E company in liquidation in their own names, which is contrary to the provisions of s 386(4).

(iv)

In response to the notice of objection the plaintiffs acting in terms of rule 28(4) brought this application to amend their particulars of claim. F

[7] What is therefore before me is the exception (which has not been conceded by the plaintiffs), and the application to amend. The plaintiffs' counsel took the approach that the application to amend would be moved if the exception was upheld. It was, however, agreed that the exception and the application to amend would be dealt with together. G

[8] Mr Muller SC, for the plaintiffs, submitted that where a liquidator institutes proceedings nomine officio, he or she is not acting in his or her personal capacity but in a representative capacity and on behalf of someone else, namely the company in liquidation. Mr Pauw SC, for the H defendant, submitted on the other hand that there are specific references in the Act for a liquidator to sue in...