Jeeva and Another v Tuck NO and Others

• Jurisdiction: South Africa
• Judge: Liebenberg J
• Judgment Date: 05 March 1997
• Citation: 1998 (1) SA 785 (SE)
• Docket Number: 1745/96
• Hearing Date: 12 December 1996
• Counsel: PJ De Bruyn (with him R Wade) for the applicants No appearance for the first and third to sixth respondents RP Van Rooyen (with him JM Scott) for the second respondent
• Court: South Eastern Cape Local Division

Liebenberg J:

This is a review brought in terms of the common law.

The applicants were formerly directors of Spirvin Bottling (Pty) Ltd, a company which was placed under provisional liquidation on 8 December 1993 and final liquidation on 19 January F 1994 by this Court. The first respondent is a magistrate who presided at a special meeting of creditors of Spirvin on 3 June 1996. At this meeting the second respondent proved a claim against Spirvin for an amount of R11 428 849,29. The third and fourth respondents are the G joint liquidators of Spirvin. The fifth respondent has been joined insofar as he may have an interest in these proceedings. The sixth respondent is the only other creditor who has proved a claim against Spirvin and is also joined insofar as he may have an interest in the proceedings.

In essence the relief claimed in this application can be stated as follows:

(a)

That the decision of the first respondent on 3 July 1996 to allow the claim of the H second respondent be reviewed and corrected and/or set aside

(b)

That the second respondent's claim against Spirvin be expunged

(c)

That the second, third and fourth respondents pay the costs of this application I jointly and severally and that the rest of the respondents should be ordered to pay such costs jointly and severally should they oppose this application.

The first respondent filed an affidavit in which she set out the reasons for her decision allowing the claim of the second respondent and she further indicated that she abides the decision of the Court. The third and fourth respondents filed a notice indicating that they will not oppose the J

Liebenberg J

application provided no order as to costs is sought against them and further that they abide the A decision of the Court. They, however, filed answering affidavits. The fifth and sixth respondents also filed notices indicating that they abide the decision of the Court. The second respondent is the only respondent opposing the application and it also brought a conditional counter-application. B

On 19 August 1994 the fifth respondent granted leave to the third and fourth respondents to hold an enquiry in terms of ss 417 and 418 of the Companies Act 61 of 1973 (as amended) into, inter alia, the affairs of Spirvin. The Commissioner appointed to conduct the enquiry was directed to report to the fifth respondent on, inter alia, the following matters: C

1.

The identity of witnesses who gave evidence before him, the nature and purpose of the evidence of each witness, the relevancy thereof and the way in which such witnesses' evidence was of assistance in regard to the matters being investigated. D

2.

What assets or moneys, if any, were or are likely to be recovered for the benefit of the company in consequence of the evidence revealed at the enquiry.

3.

What offences and/or irregularities, if any, were revealed as a result of such enquiry and whether or not there are matters which should be referred to the Attorney-General for his consideration. E

4.

The duration and costs incurred in the holding of the commission of enquiry.

The aforesaid enquiry was set down for hearing during the periods 15--19 July 1996 and 12--16 August 1996. It has not been stated in the papers what the present position is with regard to the enquiry but it can be accepted that it has been postponed and has not F commenced as yet. Because of the acceptance of the second respondent's claim by the first respondent, the former has now, in terms of the Companies Act, acquired the right to be present at the enquiry, to be legally represented thereat, and to interrogate any witness G testifying at the enquiry (s 418(1)(c)). The second respondent through its legal representatives has also expressed its intention to participate in the enquiry.

The basis of the claim by the second respondent against Spirvin is that the amount of the claim represents fraudulent claims made by Spirvin and/or other persons of whom the identities have H not yet been established, in terms of an agreement between Spirvin and the second respondent which existed at the time. The applicants attack the decision of the first respondent to allow the claim of the second respondent on the basis that by 3 June 1996 when the claim was proved it had already prescribed and should have been disallowed. The second, third and fourth respondents deny the allegation that the claim had prescribed. The motivation behind the I application to have the second respondent's claim expunged is to prevent it from taking part in the enquiry and interrogating the applicants.

The locus standi of the applicants to attack the validity of the first respondent's decision to allow the claim of the second respondent is in dispute. In support of their allegation that they have the necessary locus standi the first applicant alleges as follows in his affidavit: J

Liebenberg J

'22. I respectfully submit that both the second applicant and I have locus standi to launch this A application to review the decision of the first respondent in allowing the claim of the second respondent to be proved inasmuch as:

22.1

I am advised that under ss 417 and 418 of the Companies Act I am obliged to answer questions by the liquidators or any creditors with a proven claim. If the first respondent's decision to admit the second respondent's claim were to be set aside, I am advised that the B second respondents would at law be precluded from examining the second applicant and I.

22.2

Although I expressly deny that there is any merit in the second respondent's claim, to permit the second respondent (through its representatives) to interrogate me regarding events commencing some ten years ago could hold considerable potential prejudice. The very nature of proceedings are such that although the transcripts of the ss 417/418 enquiry may C not, I am advised, be used against me in criminal proceedings, there is nothing preventing the information elicited during the course of the enquiry from being conveyed to the Attorney-General and from thereafter forming the basis of a criminal charge. I should mention, however, that the subject-matter of the second respondent's claim as set out in Van Appel's D affidavit was referred to the Attorney-General who declined to prosecute any person in regard thereto. Van Appel's allegations, although unfounded, allege serious improprietary and it is respectfully submitted that I cannot be compelled to expose myself to potential criminal proceedings, however unfounded I may consider the allegations. Both the second applicant and I will also be prejudiced in any civil proceedings relating to the second respondent's claim that may be instituted against us. E

22.3

I am further advised that under chap 3 of the Constitution of the Republic of South Africa Act 200 of 1993, and particularly the provisions dealing with the right to privacy and equality before the law, I cannot be compelled to submit myself to interrogation as permitted by s 417 unless and until the party intending to interrogate me has acquired that statutory right to do so in the manner prescribed by law. F

22.4

Under ss 417 and 418 of the Companies Act, I am advised that both the second applicant and I have the right to be interrogated regarding any matter which is irrelevant or which would prolong the interrogation unnecessarily. I respectfully submit that the commissioner does not have jurisdiction to determine the validity of the second respondent's claim, once proved, and G that consequently for as long as the interrogation is directed at extracting information concerning the trade, dealings, affairs or property of the...