Jagger-Mosenthal Ltd v J M Van der Walt (Pty) Ltd

• Jurisdiction: South Africa
• Citation: 1969 (1) SA 124 (O)

Jagger-Mosenthal Ltd v J M Van der Walt (Pty) Ltd
1969 (1) SA 124 (O)

1969 (1) SA p124

Citation	1969 (1) SA 124 (O)
Court	Orange Free State Provincial Division
Judge	Erasmus J
Heard	October 31, 1968
Judgment	November 14, 1968

Flynote : Sleutelwoorde G

Company — Judicial management — Cancellation of — When granted — Creditors would not be paid in full within a reasonable time — Act 46 of 1926, as H amended, sec. 198 — Judicial manager unreasonably opposing application for cancellation of order — Costs — Not entitled to rank as preferent.

Headnote : Kopnota

In terms of section 198 of the Companies Act, 46 of 1926, as amended, a judicial management order will be cancelled if the Court is satisfied that creditors will not be paid in full within a reasonable time.

Where a judicial manager had acted wholly unreasonably in opposing an application for the cancellation of a judicial management order and for the placing of the respondent in final liquidation, the Court refused an application by the judicial manager that his costs should rank in preference in the liquidation.

1969 (1) SA p125

Case Information

Return day of a rule nisi. Facts not material to this report have been omitted.

H. J. O. van Heerden, for the applicant.

H. P. Viljoen, for the respondent.

Cur adv vult. A

Postea (November 14th).

Judgment

B Erasmus, J.:

This is an opposed application for a rule nisi calling upon all interested parties to show cause why the respondent company, known as J. M. van der Walt (Edms.) Beperk, should not be placed under a final liquidation order and why the judicial management order in respect of it should not be cancelled. The applicant does not ask for costs. The respondent carries on business as wholesale merchants and was placed C under judicial management by an order of this Court on 14th April, 1966 and a Mr. P. J. de Wet was appointed judicial manager. In the petition for the order of judicial management it was submitted that the financial position of the respondent was basically sound and all that it required was a moratorium to sell its assets, to recover debts owing to it and to D pay its creditors in full within the foreseeable future. The present applicant alleges that the respondent owes it R2,740.91 being the total amount of cheques drawn by the respondent in favour of the applicant and which were dishonoured by non-payment. The applicant holds no security for its claim.

It appears from the petition for judicial management that the respondent E on 30th June, 1965 owed creditors approximately R104,951.86 of which R32,419.20 was in respect of bank overdrafts. Stock was valued at R109,551.56, debtors owed respondent R45,000 and its fixed assets were valued at R11,479. It therefore had a credit balance of R61,078.70.

It must therefore be inferred that the Court in granting the judicial F management order felt that, in view of the financial position of the respondent as stated above, the extent and scope of its business activities and the nature of its difficulties, to use the words of sec. 195 (1) of the Companies Act, 46 of 1926,

...