Koen and Another v Wedgewood Village Golf & Country Estate (Pty) Ltd and Others

• Jurisdiction: South Africa
• Judge: Binns-Ward J
• Judgment Date: 09 December 2011
• Citation: 2012 (2) SA 378 (WCC)
• Docket Number: 24850/11
• Hearing Date: 06 December 2011
• Counsel: B Pretorius for the applicants. A de Villiers for the second respondent. J Muller SC (with L Burger SC) for the third respondent.
• Court: Western Cape High Court, Cape Town

Binns-Ward J: G

[1] On 16 November 2011, after hearing oral submissions from counsel on 24 October and considering written argument subsequently submitted by the parties pursuant to directions given and invitations extended H by the court, I delivered a judgment in the liquidation application (WCC case No 27956/2010), in terms of which, amongst other matters, the winding-up application against Wedgewood Village Golf Country Estate (Pty) Ltd (the company) was postponed so as to enable the second and third intervening parties in that application, Mr and Mrs WG Koen, the I opportunity, if so advised, to transfer the application which they had instituted in the Port Elizabeth High Court (under ECP case No 2448/11) for an order placing the company under supervision for business rescue purposes to this court for adjudication. I indicated in that judgment that if the business rescue application were not so transferred to this court by 28 November 2011, being the date to which J the winding-up application was postponed, an order would be made

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placing the company into provisional liquidation. The business rescue A application was thereafter indeed transferred to this court in terms of an order made by Tshiki J in chambers in the Port Elizabeth High Court. The transfer of the business rescue application to this court (in which it has been allocated WCC case No 24850/11) had the effect of suspending proceedings in the winding-up application — see s 131(6) of the Companies B Act 71 of 2008. Thus, on 28 November, I issued directions to enable the business rescue application to be argued before this court on 6 December 2011.

[2] Pursuant to the directions given on 28 November, the applicants in C the business rescue application delivered lengthy replying affidavits. It should be mentioned in this regard that the time for the filing of these affidavits in terms of the Uniform Rules had already long elapsed before 28 November. (The directions on the delivery of replying affidavits were given because I was advised that the applicants had previously indicated an intention to reply to the answering papers, but had not yet done so.) D The replying affidavits introduced significant new material and also included allegations by the applicants of misconduct by the deponent to the principal affidavits submitted in both the winding-up and the business rescue proceedings by the first intervening party, Nedbank Ltd. The replying affidavit deposed to by Mr Koen furthermore included an express challenge to Nedbank to file responding affidavits. E

[3] The most significant new matter contained in the replying affidavit was the description of the efforts of a Port Elizabeth estate agent, Ms Martin, to obtain an offer from an undisclosed third party which would enable the recapitalisation of the company's business so as to permit the completion of the golf course village development, which had F comprised its sole business activity at all material times. The terms of such an offer, were it to eventuate, and depending on its content, might make out a cogent basis for a rescue of the company's business. It was clear from the evidence put up in the replying affidavits that Ms Martin, supported by certain of the suppliers of professional services to the G company in respect of the development, had assembled quite detailed information as to the feasibility and costing of a rescue of the development in order to solicit the involvement of the unnamed investor. It was apparent that these efforts had been in train for at least several weeks before the hearing on 6 December. So, for example, a detailed costing H sheet had been prepared on or about 11 September by the quantity surveyors who had been employed on the development. The costing was directed at showing (subject to some significant exclusions) the estimated cost as at 30 September 2011 of completing the project.

[4] Hardly surprisingly, in the context of what I have just described, I Nedbank produced a fourth set of affidavits directed mainly at providing a response to the new matter introduced by the applicants in reply, and also at addressing the allegations of improper non-disclosure which had been directed in the reply at the deponent to its principal affidavits. The applicants' counsel opposed the bank's application for the admission of the fourth set of affidavits. He also indicated that, irrespective of the J

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A determination of the issue of the admission of these affidavits, the applicants sought a postponement of the application to the first available date in the first term of 2012.

[5] Because it was apparent from counsel's intimation that the portended B application for postponement would be predicated in part on the admission of the fourth set of affidavits I directed that the issue of the admission of the fourth set be argued and decided before consideration of any application for a postponement of the business rescue application.

[6] In my judgment Nedbank was well advised to file a fourth set of C affidavits rather than seek to address the new matter in the applicants' replying affidavits by way of striking-out. It was apparent that the new matter introduced in reply had not been within the applicants' knowledge when they commenced proceedings. Assuming that a case had been made out for business rescue in the founding papers, it would obviously be in the interests of justice to allow the new matter in the circumstances. D It was convenient to assume for the purposes of the application to introduce a fourth set of affidavits that a case for business rescue had been made out, albeit only prima facie, in the founding papers. Allowing, on that assumption, that it would be in the interests of justice to permit the applicants to rely on the new matter, it would be manifestly unjust to deny E Nedbank the opportunity to deal with it. It similarly would have been unjust to deny the deponent to Nedbank's principal affidavits in the proceedings the opportunity to deal with the serious allegations of impropriety made against her. Moreover, the applicants could hardly be heard to complain about the bank's...