Rennie NO v South African Sea Products Ltd

• Jurisdiction: South Africa
• Judge: Berman AJ
• Judgment Date: 17 September 1984
• Citation: 1986 (2) SA 138 (C)
• Hearing Date: 13 September 1984
• Court: Cape Provincial Division

Berman AJ:

On 29 August 1984 one Aldarondo lodged with the Registrar of this Court an application in which he sought, as a C matter of urgency, an order placing Alkar Fishing (Pty) Ltd ("Alkar") under provisional judicial management, alternatively under provisional winding-up. This application was accompanied by a report from the Master pursuant to the provisions of s 346 (4) of the Companies Act 61 of 1973. The material portion of D this report, being paras 2 and 3, reads as follows:

"2. I hereby certify that due security has been found for payment of all fees and charges necessary for the prosecution of all winding-up proceedings and of all costs of administering the company in liquidation until a provisional liquidator has been appointed and, if no provisional liquidator is appointed, of all fees and charges necessary for the discharge of the company from E windingup.

3. I know of no facts which would justify the Court in postponing the hearing or dismissing the petition (sic).

The application was heard by the Motion Court Judge late on the same day, viz 29 August 1984, when by consent it was postponed to 31 August 1984 in order to afford an intervening creditor an F opportunity to deliver opposing affidavits. On 31 August 1984 an order was issued by consent in terms whereof Alkar was placed, on the application of Aldarondo and pursuant to his alternative prayer, under a provisional winding-up order, Alkar being unable to pay its debts.

On the same day, viz 31 August 1984, but prior to the grant of G the winding-up order, an urgent application was brought in this Court by South African Sea Products Ltd ("respondent") against the motor vessel "Alkar 1", her owner and any parties interested for an order for the arrest of that vessel (then lying in Hout Bay harbour) in an action in rem pending in this H Court - this Court sitting in the exercise of its admiralty jurisdiction in terms of the Admiralty Jurisdiction Regulation Act 105 of 1983 ("the 1983 Act") - wherein respondent claimed payment for goods supplied and services rendered, as well as consequential relief. An order was there and then granted in respondent's favour against the said vessel (which was owned by Alkar) for the relief claimed, including an order I in the following terms (with further consequential relief):

3.

That the deputy sheriff (acting as Marshall under the Admiralty Rules) be directed to endeavour to see and take possession of the vessel's certificate of registration and the safety equipment certificate and, in the event of his being successful, to hold such certificates until the said vessel is released in J terms of para 4 hereof.

Berman AJ

4.

A That the said vessel be released on security being furnished to the applicant to the satisfaction of the Registrar for any judgment including costs and interest which may be given in the said action in rem.

5.

That there be an order declaring the vessel to be B executable and directing the deputy sheriff of this honourable Court (acting as marshall under the Admiralty Rules), in the event of his being required to sell the vessel in pursuance of a writ of execution (and/or commission of sales as referred to in the Admiralty Rules) issued (pursuant to an order granted C by this Court) by the plaintiff or any other judgment creditor, to sell the vessel and thereafter distribute the proceeds of such sale in accordance with the due order and preference according to s 11 of Act 105 of 1983.

On 4 September 1984, and following the issue of the provisional winding-up order made against Alkar, Mr D J Rennie ("applicant") was appointed provisional liquidator of Alkar, D and in that capacity he launched the instant application against respondent, in which he seeks an order firstly, granting him authority to bring this application and secondly, setting aside the arrest of the motor vessel "Alkar 1", authorising and directing its release, and for costs. Respondent resisted the application and the matter then came E before me as one of urgency, and was argued as such on the afternoon of 13 September 1984, applicant being represented by Mr Hofmeyr (and with him, Mr Blignault) and respondent by Mr Knight (and with him, Mr Sher). Applicant was there and then granted the necessary authority to bring these proceedings, Mr Knight very properly offering no opposition to the grant of F such preliminary relief.

It was common cause that a decision on the application was required as a matter of urgency and, in accordance with a suggestion by counsel at the conclusion of the hearing, I undertook to issue an order on the application with a minimum of delay, with the reasons therefor to follow. In pursuance of G my undertaking I issued an order on 17 September 1984 in the following terms, viz:"The arrest of the motor vessel 'Alkar 1', made pursuant to the order dated 31 August 1984 and granted in case No 8870/84 at the instance of respondent, is set aside, and it is directed that the said vessel be released forthwith.

H Respondent is ordered to pay applicant's costs on the tariff contained in Rule 70 of the Rules prescribed in terms of s 43 (3) of the Supreme Court Act 59 of 1959, such costs to be taxed on the basis that the employment by applicants of two counsel was warranted."

My reasons for making this order now follow.

I Put succinctly, it was Mr Hofmeyr's main contention that, in the light of s 348 of the Companies Act 61 of 1973, the winding-up of Alkar was deemed to have commenced on 29 August 1984 (that being the date of the presentation of the application); a concursus creditorum was thereupon created; the arrest of Alkar's vessel having taken place after that date, it did not render respondent (hitherto an unsecured creditor) a secured creditor and did not disturb the rights of creditors J inter se as fixed by the creation of the concursus creditorum. Mr Hofmeyr further contended that

Berman AJ

the 1983 Act did...