Levay and Another v Van den Heever and Others NNO

• Jurisdiction: South Africa
• Citation: 2018 (4) SA 473 (GJ)

Levay and Another v Van den Heever and Others NNO
2018 (4) SA 473 (GJ)

2018 (4) SA p473

Citation	2018 (4) SA 473 (GJ)
Case No	42283/2015
Court	Gauteng Local Division, Johannesburg
Judge	Van der Berg AJ
Heard	December 13, 2017
Judgment	December 13, 2017
Counsel	M Reineke for the applicants.; GD Wickins for the respondents.

Flynote : Sleutelwoorde

Company — Winding-up — Application — Intervention — Whether creditor or minority shareholder can intervene to oppose.

Headnote : Kopnota

Mr and Mrs Levay had lent a company a sum of money and in return had been C issued with 150 shares each. A third person was the holder of 600 shares. (See [33], [38] and [51].)

The respondents had later instituted proceedings to liquidate the company, and the Levays applied here to intervene in those proceedings in order to oppose the liquidation.

The issue was whether a creditor or minority shareholder could do so (see [8]). D

Held, that both could. With regard to a minority shareholder, her shareholding in itself was a legal and so sufficient interest to satisfy the interest requirement for intervention. (See [11] – [12], [15] and [28] (on creditors); and [6], [19] – [20] and [28] (on minority shareholders).)

Application ultimately granted (see [62]).

Cases cited

Absa Bank Ltd v Africa's Best Minerals 146 Ltd; In re Sekhukhune NO v Absa E Bank Ltd [2015] 2 All SA 8 (GJ): not followed

Ansari v Barakat [2012] ZAKZDHC 1: referred to

Badenhorst v Northern Construction Enterprises (Pty) Ltd 1956 (2) SA 346 (T): referred to

Ex parte Arntzen (Nedbank Ltd as Intervening Creditor) 2013 (1) SA 49 (KZP): F referred to

Ex parte Clifford Homes Construction (Pty) Ltd 1989 (4) SA 610 (W): referred to

Ex parte Le Grange van den Heever 1961 (4) SA 683 (T): referred to

Ex parte Sudurhavid (Pty) Ltd: In re Namibia Marine Resources (Pty) Ltd v Ferina (Pty) Ltd 1993 (2) SA 737 (Nm): G referred to

F & C Building Construction Co (Pty) Ltd v Macsheil Investments (Pty) Ltd 1959 (3) SA 841 (N): referred to

Fullard v Fullard 1979 (1) SA 368 (T): applied

Gilliatt v Sassin 1954 (2) SA 278 (C): referred to

Helderberg Laboratories CC and Others v Sola Technologies (Pty) Ltd 2008 (2) SA 627 (C): referred to H

Henri Viljoen (Pty) Ltd v Awerbuch Brothers 1953 (2) SA 151 (O): referred to

Herbst v Hessells NO en Andere 1978 (2) SA 105 (T): referred to

Jhatam and Others v Jhatam 1958 (4) SA 36 (N): referred to

Kalil v Decotex (Pty) Ltd and Another 1988 (1) SA 943 (A) ([1987] ZASCA 156): referred to

Letseng Diamonds Ltd v JCI Ltd and Others; Trinity Asset Management (Pty) Ltd I and Others v Investec Bank Ltd and Others 2007 (5) SA 564 (W): referred to

Louw v WP (Koöperatief) Bpk 1998 (2) SA 418 (SCA): referred to

M & V Tractor Implement Agencies BK v Vennootskap DSU Cilliers en Seuns en Andere (Kelrn Landgoed (Edms) Bpk Tussenbeidetredent); M & V Tractor and Implement Agencies BK v Hoogkwartier Landgoed (Edms) Bpk (Kelrn J Vervoer (Edms) Bpk Tussenbeidetredent); M & V Tractor and Implement Agencies BK v Olierivier Landgoed (Edms) Bpk (Kelrn Vervoer (Edms) Bpk Tussenbeidetredent) 2000 (2) SA 571 (NC): referred to

2018 (4) SA p474

A Manganese Corporation Ltd v South African Manganese Ltd 1964 (2) SA 185 (W): referred to

Maritz t/a Maritz & Kie Rekenmeester v Walters and Others 2002 (1) SA 689 (C): B referred to

Minister of Local Government and Land Tenure and Another v Sizwe Development and Others: In re Sizwe Development v Flagstaff Municipality 1991 (1) SA 677 (Tk): referred to

Nel and Others NNO v The Master and Others 2000 (2) SA 728 (W): referred to

Radebe C and Others v Eastern Transvaal Development Board 1988 (2) SA 785 (A): referred to

Registrar of Banks v Regal Treasury Private Bank Ltd (under Curatorship) and Another (Regal Treasury Bank Holdings Ltd Intervening) 2004 (3) SA 560 (W): followed

Schnellen v Rondalia Assurance Corporation of SA Ltd 1969 (1) SA 31 (W): D dictum at 34F applied

Shapiro v South African Recording Rights Association Ltd (Galeta Intervening) 2008 (4) SA 145 (W): referred to

Silwer Heinings (Pty) Ltd v Standard Bank of South Africa Ltd 1984 (2) SA 821 (W): referred to

Standard Bank of South Africa Ltd and Another v Ocean Commodities Inc and Others E 1983 (1) SA 276 (A): referred to

Trinity Asset Management (Pty) Ltd v Grindstone Investments 132 (Pty) Ltd 2018 (1) SA 94 (CC) (2017 (12) BCLR 1562; [2017] ZACC 32): referred to

Uys and Another v Du Plessis (Ferreira Intervening) 2001 (3) SA 250 (C): referred to

Ward F and Another v Smit and Others: In re Gurr v Zambia Airways Corporation Ltd 1998 (3) SA 175 (SCA) ([1998] 2 All SA 479): referred to

Zulu and Others v eThekwini Municipality and Others 2014 (4) SA 590 (CC) (2014 (8) BCLR 971; [2014] ZACC 17): dictum in paras [16] and [21] applied.

Case Information

M G Reineke for the applicants.

GD Wickins for the respondents.

An application to intervene in liquidation proceedings.

Order

1.

H The applicants in the application dated 16 March 2016 are granted leave to intervene in the application for liquidation of Waterfall Trout Properties (Pty) Ltd brought by the liquidators of Choice Decisions 212 (Pty) Ltd (in liquidation).

2.

Costs of the application will be costs in the liquidation application.

Judgment

Van I der Berg AJ:

[1] The joint liquidators ('the liquidators') of Choice Decisions 212 (Pty) Ltd (in liquidation) (Choice Decisions) brought an application ('the liquidation application') for the winding-up of Waterfall Trout J Properties (Pty) Ltd (Waterfall) on the basis that it is unable to pay its

2018 (4) SA p475

Van der Berg AJ

debts. There is an intervention application where the applicants ('the A intervening parties') seek to intervene in the liquidation application in order to oppose it. The intervention application is opposed by the liquidators.

[2] Both applications are before me. The parties agree that should the intervention application fail, I should deal with the liquidation application B on an unopposed basis.

[3] On 30 November 2015 the liquidators issued the liquidation application.

[4] On 14 December 2015 a notice of intention to oppose the liquidation C application was served, purportedly on behalf of Waterfall Properties. The liquidators thereafter successfully brought an application to declare the notice to oppose to be unauthorised. The intervening parties allege that Ms Katharina Christine Peters (Peters), Waterfall's sole director, had instructed attorneys to oppose the liquidation application on behalf of Waterfall, but that she afterwards made an about-turn. The liquidation D application is at this stage unopposed.

[5] The intervening parties launched the intervention application on 17 March 2016.

Test for intervention E

[6] A party seeking to intervene in proceedings can either do so in terms of rule 12 of the Uniform Rules of Court, or in terms of the common law. A party seeking leave to intervene must prove that:

(a)

He or she has a direct and substantial interest in the subject-matter of the litigation which could be prejudiced by the judgment of the court; and F

(b)

the application is made seriously and is not frivolous, and that the allegations made by the applicants constitute a prima facie defence to the relief sought in the main application. [1]

[7] A 'direct and substantial interest' means a legal interest in the G subject-matter of the action which could be prejudicially affected by the judgment of the court. A mere financial interest is only an indirect interest in such litigation and is insufficient. [2]

[8] The question arises whether a creditor or minority shareholder has locus standi to intervene in a liquidation application in order to oppose H it. (Different considerations apply where the intervention is sought in order to support the liquidation application.) [3]

2018 (4) SA p476

Van der Berg AJ

[9] A In Absa Bank Ltd v Africa's Best Minerals 146 Ltd; In re Sekhukhune NO v Absa Bank Ltd [2015] 2 All SA 8 (GJ) (Africa's Minerals) (a decision in this division) Vally J said:

'[10] In order to succeed in the quest to intervene King Sekhukhune must satisfy this Court that he, or the community he represents, has a B direct and substantial interest in the application to wind-up ABM, which could be prejudiced should the Court issue an order winding it up. . . . Furthermore, the direct and substantial interest has to be an interest in the right to challenge the winding-up application and not just a mere financial interest.

. . . C

[17] Apart from asserting the existence of a shareholding (or a loan, if the oral submission is to be accepted), no further factual substratum is provided to show that the intervention, if allowed, is necessary and will affect the outcome of the winding-up application. As mentioned above, the law is settled on this score: a party that wishes to intervene must D demonstrate an interest in the proceeding that is not just a mere financial interest. An application to intervene solely as a shareholder or solely as a creditor is insufficient. The aspirant intervener must demonstrate that he has a legal interest to protect and not just a financial interest in the matter. The legal interest must also be material enough to affect the outcome of the winding-up application. Anything less than that will not E do.' [Own emphasis.]

[10] The learned judge referred to Ex parte Sudurhavid (Pty) Ltd: In re Namibia Marine Resources (Pty) Ltd v Ferina (Pty) Ltd 1993 (2) SA 737 (Nm); and Registrar of Banks v Regal Treasury Private Bank Ltd F (under Curatorship) and Another (Regal Treasury Bank Holdings Ltd Intervening) 2004 (3) SA 560 (W).

Intervening creditor: case law

[11] It is well established that an intervening creditor may be given leave G to intervene at any stage...