SA Neckwear (Pty) Ltd v Dagbreek Kontant Winkel (Edms) Bpk

• Jurisdiction: South Africa
• Judge: Smit J
• Judgment Date: 27 March 1952
• Citation: 1952 (3) SA 697 (O)
• Hearing Date: 06 March 1952
• Court: Orange Free State Provincial Division

D Smit J:

By an order of this Court respondent Company was placed under provisional judicial management subject to the usual conditions and J N Benjamin and Albert Ruskin appointed meanwhile as joint provisional judicial managers A rule nisi was at the same time issued calling upon all persons concerned to show cause if any why an order should not be granted placing the respondent Company under judicial management and E inter alia appointing these two gentlemen as joint judicial managers On the return day the confirmation of the rule was opposed only in so far as it affected the appointment of the judicial managers This opposition came from Sacks Morris (Pty) Ltd trading as Jonathan F Barne a creditor who applied for leave to intervene and Ethel Israelsohn who is the registered holder of 6999 shares in respondent Company all issued and paid up and married out of community of property to Hyman Israelsohn who is the nominal holder of one share of which she is the beneficial holder She and her husband until his insolvency were the directors of the respondent Company The opposition G put forward as their nominees for the appointment of judicial managers Stanley Richard Jones and Isidor Hill As a result of the opposition to the confirmation of their appointment Benjamin and Ruskin appeared through counsel and filed affidavits in reply to the objections raised and the allegations made by the opposition In addition certain other H creditors also intervened in support of the confirmation of the appointment of the provisional judicial managers and to oppose the appointment of Jones and Hill

Mr. Miller, who appeared for Sacks Morris (Pty.), Ltd., and Ethel Israelsohn, took the preliminary point that neither Benjamin nor Ruskin had any locus standi to appear and to be heard in the matter of the appointment of judicial managers, as they were only

Smit J

the provisional judicial managers. His contention was that only the applicant or a creditor or contributory has locus standi to be heard in such a matter. The Court was referred to In re Union Mining Finance and Investment Ltd., 1924 T.P.D. 409, which was followed in Ex parte The Master and Others: In re Loesch & Sons Ltd. (in Liquidation), 1932 A O.P.D. 168. In the former case it was held that a person holding shares in a company, which is the principal shareholder in another company being wound up by the Court, had no locus standi to object to the Court appointing, as liquidator of such other company, a person whose name had been unanimously submitted by meetings of creditors and contributories B held under sec. 128 of Act 31 of 1909. This section provided for the summoning of meetings of creditors and contributories for the purpose, inter alia, of determining the person or persons whose names shall be submitted to the Court in an application to the Court for appointing a liquidator or liquidators. This decision was based entirely C on the terms of sec. 128, and it was stated that the terms of this section imply that the only persons who could claim to be heard on the question of the appointment of liquidators, apart from the Master who reports to the Court, are persons who are either creditors or contributories. In Loesch's case the facts were that, at meetings of D creditors and contributories for the appointment of a liquidator held under sec. 125 of Act 46 of 1926, A had obtained a majority in number of creditors, and B a majority in value and also a unanimous vote of the contributories. On the hearing of an application of the Master for the appointment of a liquidator under sec. 125 (3), a creditor applied for E the appointment of A, and B applied for his own appointment. The Court held that he had no locus standi as he was not a creditor or contributory. Both these cases were decided on the terms of the respective sections...