Receiver of Revenue, Port Elizabeth v Jeeva and Others; Klerck and Others NNO v Jeeva and Others
| Jurisdiction | South Africa |
| Judge | Botha JA, Hefer JA, F H Grosskopf JA, Harms JA and Zulman AJA |
| Judgment Date | 29 February 1996 |
| Citation | 1996 (2) SA 573 (A) |
| Hearing Date | 16 February 1996 |
| Counsel | R G Buchanan SC (with him G G Goosen) for the appellant in the first case (the Receiver of Revenue, Port Elizabeth). C Edeling for the appellants in the second case (Klerck and Others NNO). P J de Bruyn SC (with him M P Q Spruyt) for the respondents in both cases. |
| Court | Appellate Division |
B Harms JA:
Two companies, Spirvin Bottling Co (Pty) Ltd ('Spirvin') and Theunsus Transport (Pty) Ltd ('Theunsus'), were liquidated at the instance of the Commissioner for Inland Revenue. The appellants Klerck and Louw were appointed by the Master of the Supreme Court, Grahamstown, as joint liquidators of Spirvin, and the appellants Louw and Cooper of Theunsus. (I shall refer to these three appellants as the 'liquidators'.) At the request of the other appellant, the Receiver of Revenue, Port Elizabeth ('the Receiver'), the liquidators approached the Master for leave to hold a C commission of inquiry in terms of s 418 (read with s 417) of the Companies Act 61 of 1973 into the affairs of the two companies. The Master obliged, appointed a Senior Counsel as Commissioner, circumscribed his powers and duties and ordered provisionally that the costs of the holding of the inquiry be borne by the Receiver.
The ostensible reasons for this costs order, which was made pursuant to s 417(6), were that the Receiver was the only creditor who had proved a claim against either company in liquidation and that the companies had no assets. His claims are preferent D claims for income tax, sales tax, interest and penalties. In the case of Spirvin, they amount to about R50 million and, in the instance of Theunsus, approximately R446 000.
The first respondent had been the managing director of and a shareholder in both E companies and the second, third, fourth and fifth respondents shareholders and/or directors of one or the other company. They all had resigned their directorships and disposed of their shares before the commencement of the liquidation process in somewhat suspicious circumstances. The other respondents consisted of the external auditor, the internal accountant, the maintenance foreman and the transport manager of F Spirvin and, finally, the spouses of the second and fifth respondents. In short and in the words of Jones J (in the Court of first instance):
'They (the respondents) are no longer directors or shareholders of the companies in liquidation, having withdrawn from the companies before commencement of the winding-up proceedings. They are not creditors. They accordingly do not have sufficient interest in the liquidation of the companies to entitle them to object to the way in which the joint liquidators do their job. They G are persons against whom a claim may be made by the joint liquidators in due course. They are potential defendants in legal proceedings which are contemplated by the joint liquidators and a creditor in liquidation.'
All the respondents were subpoenaed by the Commissioner to appear before him and testify concerning all matters relating to the trade, dealings, business affairs, property and assets of the companies. This gave rise to an application by the respondents against the Receiver for an order granting them access to all the information in his possession relating to the companies, and for an order against Spirvin's liquidators interdicting them H from proceeding with the inquiry until such time as the Receiver had complied with the order against him. This application was opposed by the Receiver and the liquidators but it was partially I
Harms JA
A successful. The judgment is reported (Jeeva and Others v Receiver of Revenue, Port Elizabeth, and Others 1995 (2) SA 433 (SE)). The correctness of that judgment is not the subject of the present appeal.
At the opening of the subsequent commission hearing, an application was made on behalf of the former directors and shareholders to the Commissioner to allow their B counsel to sit in during the proceedings and to address questions to witnesses. The request was refused and this ruling has also not been put in issue and stands.
On the following day all the respondents launched an urgent application for an order setting aside all notices and subpoenas issued by the...
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...R v Werner 1939 EDL 41: referred to Receiver of Revenue, Port Elizabeth v Jeeva and Others; Klerck and Others NNO v Jeeva and Others 1996 (2) SA 573 (A): considered S v Beyers 1968 (3) SA 70 (A): considered E S v Carse 1967 (2) SA 659 (C): considered S v Coetzee and Others 1997 (3) SA 527 (......
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