Ma-Afrika Groepbelange (Pty) Ltd and Another v Millman and Powell NNO and Another

• Jurisdiction: South Africa

Ma-Afrika Groepbelange (Pty) Ltd and Another v Millman and Powell NNO and Another
1997 (1) SA 547 (C)

1997 (1) SA p547

Citation	1997 (1) SA 547 (C)
Case No	12471/95
Court	Cape Provincial Division
Judge	Van Zyl J
Heard	March 13, 1996; March 14, 1996
Judgment	September 5, 1996
Counsel	R S Van Riet SC (with him L M Olivier) for the applicants; J J Gauntlett SC (with him G W Woodland) for the respondents

Flynote : Sleutelwoorde B

Company — Winding-up — The liquidator — Removal of — Application in terms of s 379(2) of Companies Act 61 of 1973 — 'Good cause' — Not C sufficient to show apprehension or perception of bias, partiality, lack of independence or unfairness — Nor sufficient to establish, even prima facie, that liquidator not performing satisfactorily, or having made questionable decisions or committed errors of judgment — Liquidator's conduct to be assessed in its full context with reference to all relevant facts and circumstances — Court to be satisfied that removal of liquidator to D general advantage and benefit of all persons concerned or interested in winding-up — Expense and inconvenience necessitated by appointment of new liquidator a relevant factor — Court less inclined to remove liquidator at late stage of winding-up process.

Headnote : Kopnota

The removal of a liquidator is a radical form of relief which will not be granted unless the Court is satisfied that a E proper case has been made therefor. In this regard, it would not be sufficient merely to show that there is an apprehension or perception of bias, partiality, lack of independence or unfairness on the part of the liquidator. Nor would it suffice to establish, even prima facie, that the liquidator has not performed satisfactorily, has made questionable decisions or committed errors of judgment. F These might well point to a lack of competence or experience, but would not necessarily be regarded as 'good cause' (required by s 379(2) of the Companies Act 61 of 1973) justifying the removal of the liquidator. The Court is obliged to assess the conduct of the liquidator in its full context with reference to all relevant facts and circumstances. It is of cardinal importance that the Court be satisfied that the removal of the liquidator G would be to the general advantage and benefit of all persons concerned or otherwise interested in the winding-up of the company in liquidation. One relevant factor in this regard would be the expense and inconvenience caused by the necessity to appoint a new liquidator for the purpose of completing the work already done by his predecessor. A Court would thus be less inclined to remove a liquidator at a late stage of the winding-up H process than it would be to replace him at an early stage. (At 566A/B-E.)

Cases Considered

Annotations

Reported cases

The Court referred to the following decided cases:

Aboriginal & Torres Strait Island Commission v Jurnkurakurr Aboriginal Resource Centre Aboriginal Corporation (in liq) (1993) 11 ACLC 319

Re Adam Eyton Ltd; Ex parte Charlesworth (1887) 36 ChD 299 (CA)

Berman v Michel 1927 TPD 245 I

Re Biposo Pty Ltd; Condon v Rodgers (1995) 13 ACLC 1 271 (17 ACSR 730)

Boshoff v Boshoff & Walker (Pvt) Ltd 1959 (3) SA 825 (SR)

BTR Industries South Africa (Pty) Ltd and Others v Metal and Allied Workers' Union and Another 1992 (3) SA 673 (A)

Re 67 Budd Street Pty Ltd and Others; The Commonwealth of Australia v O'Reilly (1984) 2 ACLC 190 J

1997 (1) SA p548

Re Chevron Furnishers Pty Ltd (rec and mgr apptd) (in liq); Queensland A Amalgamated Industries Pty Ltd and Others v Harris and Another (1993) 12 ACSR 565

Concorde Leasing Corporation (Rhodesia) Ltd v Pringle-Wood NO and Another 1975 (4) SA 231 (R)

Re Contract Corporation: Gooch's Case (1872) 7 Ch App 207 B

Council of Review, South African Defence Force, and Others v Mönnig and Others 1992 (3) SA 482 (A)

Du Plessis NO and Others v Powell NO and Another (CPD, 20 April 1994, cases Nos 3087/94 and 3089/94, unreported)

Gilbert v Bekker and Another 1984 (3) SA 774 (W)

Goldseller v Hill 1908 TS 822 C

Greenacre's Executors v Kemp 1916 TPD 247

Grobbelaar v Grobbelaar 1959 (4) SA 719 (A)

James v Magistrate, Wynberg, and Others 1995 (1) SA 1 (C)

Re Kal Assay Southern Cross Pty Ltd (in liq) (1992) 10 ACLC 1 627

Re London Flats Ltd [1969] 2 All ER 744 (Ch)

Re Lubin, Rosen and Associates Ltd [1975] 1 All ER 577 (Ch) D

Die Meester v Meyer en Andere 1975 (2) SA 1 (T)

Millman NO v Goosen 1975 (3) SA 141 (O)

Mönnig and Others v Council of Review and Others 1989 (4) SA 866 (C)

Murphy NO and Benjamin NO v Semphill and Others 1954 (3) SA 450 (W)

Re Queensland Stations Pty Ltd (in liq); Re Coutts Finance Pty Ltd; Re Coutts Townsville Pty Ltd (1991) 9 ACLC 1 341 E

Receiver of Revenue, Port Elizabeth v Jeeva and Others; Klerck and Others NNO v Jeeva and Others 1996 (2) SA 573 (A)

Re Rubber and Produce Investment Trust [1915] 1 ChD 382

SA Neckwear (Pty) Ltd v Dagbreek Kontant Winkel (Edms) Bpk 1952 (3) SA 697 (O)

Schulte v Van der Berg and Others NNO 1991 (3) SA 717 (C)

Re Sir John Moore Gold Mining Co (1879) 12 ChD 325 (CA) F

Theron v Natal Markagente (Edms) Bpk 1978 (4) SA 898 (N)

Re P Turner (Wildsen) Ltd (1986) 2 BCC 99, 567 (CA)

Webster v Webster en 'n Ander 1968 (3) SA 386 (T)

Wilken NO and Others v Fancourt Holdings (Pty) Ltd and Another (CPD, 14 May 1993, cases Nos 12863/92 and 12864/92, unreported)

Wilken NO and Others v Fancourt Holdings (Pty) Ltd and Others (CPD, 5 March 1993, case No 17197/92, unreported) G

Wilken NO and Others v Labuschagne NO and Others (CPD, 27 September 1995, case No 6598/94, unreported)

Statutes Considered

Statutes

The Court referred to the following legislation:

The Companies Act 61 of 1973, ss 379(1), (2), 382: see Juta's Statutes of South Africa 1995 vol 2 at 1 - 190 - 1 - 191. H

Case Information

Application in terms of s 379(2) of the Companies Act 61 of 1973 for the removal of one of two co-liquidators. The facts and the nature of the issues appear from the reasons for judgment.

R S van Riet SC (with him L M Olivier) for the applicants. I

J J Gauntlett SC (with him G W Woodland) for the respondents.

Cur adv vult.

Postea (September 5).

Judgment

Van Zyl J:

This is an application to remove the first respondent, one J

1997 (1) SA p549

Van Zyl J

Ralph Millman, as joint liquidator of Fancourt Properties (Pty) Ltd (in A liquidation), hereinafter referred to as 'Fancourt Properties', in terms of the provisions of s 379(2) of the Companies Act 61 of 1973. The second respondent, Oliver Michael Powell, is the joint liquidator, with Millman, of Fancourt Properties, while the Master, as the third respondent, is cited in his official capacity. No relief is sought against Powell or the B Master. Powell does not oppose the application and the Master abides the decision of this Court.

The first and second applicants have brought this application as proven concurrent creditors of Fancourt Properties, of which the second applicant is also a member and the beneficial owner of all the issued C shares therein. The major proven creditors of Fancourt Properties are various companies in the Masterbond group (I shall refer to them jointly and severally as 'Masterbond'), which have proved eight secured claims against Fancourt Properties.

The grounds for the removal of Millman in terms of s 379(2) of the Companies Act are that he has allegedly: D

(a)

failed to perform satisfactorily duties imposed upon him by the said Act;

(b)

acted to the detriment of creditors of Fancourt;

(c)

sided with the secured creditors and failed to display the objectivity required of a liquidator; E

(d)

refused to investigate and/or challenge the claims of the secured creditors.

In his founding affidavit on behalf of the applicants Mr André Pieterse, their chairman, has furnished certain background information relating to events prior to the liquidation of Fancourt Properties. I shall deal with it briefly. F

Since 1981 Pieterse has been engaged in developing his family estate, owned by Fancourt Properties, into a 'country club resort'. The manor house and its gardens were converted into a luxury hotel which was partly financed by means of a R3,9 million loan granted by Masterbond. The loan was secured by a first mortgage bond registered over the G property of Fancourt Properties. Thereafter Fancourt Holdings (Pty) Ltd ('Fancourt Holdings') was registered with a view to developing a golf course. This was a joint venture of the first applicant and Masterbond and was financed by means of 'development bonds' granted by Masterbond. The Manor House Hotel, as it was called, was operated by a subsidiary of Fancourt Holdings, namely Fancourt Hotels (Pty) Ltd H ('Fancourt Hotels'), on the basis of a lease agreement with Fancourt Properties.

During the latter part of 1991 Masterbond experienced financial difficulties and was placed under provisional curatorship. The golf course was, at that stage, incomplete and the builder, Group Five I Construction (Pty) Ltd ('Group Five'), threatened to withdraw.

In an attempt to resolve these difficulties the provisional curators, Fancourt Holdings, Fancourt Properties, Group Five and Pieterse concluded a 'moratorium agreement' in January 1992. The aim of the agreement was to complete the Fancourt development. It provided for, inter alia, a moratorium of five years to Fancourt Holdings and Fancourt J

1997 (1) SA p550

Van Zyl J

Properties in respect of capital repayments on their bonds, waiver of A interest and suretyships by Fancourt Holdings and Fancourt Properties in favour of Masterbond for the payment of all amounts owing to it (at that stage some R83 million).

Thereafter, various disputes arose between the creditors of Fancourt Holdings and Fancourt Properties...