Spendiff NO v Kolektor (Pty) Ltd

• Jurisdiction: South Africa
• Citation: 1992 (2) SA 537 (A)

Spendiff NO v Kolektor (Pty) Ltd
1992 (2) SA 537 (A)

1992 (2) SA p537

Citation	1992 (2) SA 537 (A)
Court	Appellate Division
Judge	Hoexter JA, Nestadt JA, Vivier JA, Milne JA and Goldstone JA
Heard	February 20, 1992
Judgment	March 12, 1992

Flynote : Sleutelwoorde

Insolvency — The insolvent — Unlawful alienations and preferences — Disposition not for value as intended in s 26 of Insolvency Act 24 of 1936 — Action for setting aside and recovery of disposition — Jurisdiction — Definition of 'Court' in s 2 of Act — Effect — In C matters falling under s 149 of Act, jurisdictional criteria referred to therein determine which is competent Provincial or Local Division of Supreme Court — Where matter not governed by s 149, definition not operating and ordinary grounds of jurisdiction apply — Section 149 not purporting to deal with question of jurisdiction in proceedings brought by trustee against parties other than insolvent — Jurisdictional D criteria referred to in s 149(1) accordingly not determining what Court has jurisdiction to set aside a disposition not made for value — Jurisdiction in such a case governed by ordinary principles — Where registered office or main place of business of defendant company in such action not within jurisdiction of Court, even though Court was the Court E which granted winding-up order of company which made the disposition, exception to special plea denying jurisdiction correctly dismissed.

Company — Winding up — Unlawful alienations and preferences by company — Action by liquidator against company to which disposition made for setting aside and recovery of disposition — Jurisdiction of Court — F Jurisdiction in s 12(1) of Companies Act 61 of 1973 meaning power or competence of a court to hear and determine an issue between parties and in s 12(1) relates to territorial competence of various Provincial and Local Divisions of Supreme Court to entertain legal proceedings under the Act 'in respect of any company' — Company there referred to the G company

1992 (2) SA p538

A against which relief sought and whose registered office or main place of business is referred to — Not the insolvent company on whose behalf relief sought — Where registered office or main place of business of defendant company in such action not within jurisdiction of Court, even though Court was the Court which granted winding-up order of company B which made the disposition, exception to special plea denying jurisdiction correctly dismissed.

Headnote : Kopnota

The effect of the definition of 'Court' in s 2 of the Insolvency Act 24 of 1936 is the following: In matters falling under s 149 of the Insolvency Act (ie where the legal proceedings under consideration relate to a debtor or his estate), the jurisdictional criteria therein referred to determine which is the competent Provincial or Local C Division of the Supreme Court of South Africa. In matters not governed by s 149 the definition in s 2 does not operate; the ordinary grounds of jurisdiction apply.

Section 149 of the Insolvency Act 'does not purport to deal with the question of jurisdiction in the case of actions or proceedings brought by the trustee against third parties, ie against parties other than the insolvent; for instance actions for voidable preference. In the case of such actions, the ordinary rule of jurisdiction applies, for example, D that the forum of the defendant is to be followed. . . .' The jurisdictional criteria referred to in s 149(1) do not determine what Court has jurisdiction in terms of s 26(1) to set aside a disposition not made for value; jurisdiction in such a case is governed by ordinary principles.

The dictum in Dyter and Tiran v Vorster NO 1922 OPD 218 at 220 approved and applied.

The Court, applying the above principles, held that a Local Division had correctly dismissed an exception to a special plea denying the Court's E jurisdiction to entertain an action by the liquidator of a company in terms of s 26 of the Insolvency Act 24 of 1936 for the setting aside and recovery of a disposition allegedly made by the company not for value where the registered office and main place of business of the defendant company was outside the territorial jurisdiction of the Court, even though the Court had made the order for the winding-up of the company which had made the alleged disposition.

The Court furthermore rejected the further contention made on behalf of F the liquidator that the Local Division in which the action had been instituted had jurisdiction in terms of s 12(1) of the Companies Act 61 of 1973 in that the claim was one under the Companies Act in respect of the company which the liquidator represented, that such company was one within the meaning of 'any company' in s 12(1) and that, as that company had been wound up by the Local Division, it had to be inferred that its registered office or main place of business was within the jurisdiction G of the Local Division and that such Court accordingly had jurisdiction under the section. The Court, in rejecting this contention, held that the word 'jurisdiction' in s 12(1) had been used in the sense of the power or competence of a court to hear and determine an issue between parties and related to the territorial competence of the various Provincial and Local Divisions of the Supreme Court to entertain legal proceedings under the Act 'in respect of any company'. Furthermore, in accordance with principle, such company was the one against which relief H was claimed and whose registered office or main place of business was being referred to, and was not, as contended for by the appellant, the insolvent company on whose behalf relief was sought. Accordingly, the Local Division had, on this ground too, correctly dismissed the exception to the special plea as to jurisdiction.

The decision in the Durban and Coast Local Division Spendiff NO v Kolektor (Pty) Ltd confirmed. I

Case Information

Appeal from a decision in the Durban and Coast Local Division (McCall J). The facts appear from the judgment of Nestadt JA.

P M Meskin SC for the appellant: The appellant's cause of action derives from the provisions of s 340(1) of the Companies Act 61 of 1973, as amended (hereinafter denoted as 'the Companies Act') read with ss J 26(1) and 32(3) of the Insolvency Act 24 of 1936, as amended (hereinafter

1992 (2) SA p539

A denoted as 'the Insolvency Act'). The exception to the respondent's special plea raises the issue as to which Court has jurisdiction to exercise the powers under such provisions. The Court a quo, being the Court which caused the company to be wound up, is the only Court, alternatively is a Court, having such jurisdiction. On a proper interpretation thereof: (a) the provisions of s 340(1) of the Companies B Act render applicable mutatis mutandis all relevant provisions of the law relating to insolvency; (b)(i) such provisions include those relating to matters of procedure as distinct from matters of substantive law: cf Woodley v Guardian Assurance Co of SA Ltd 1976 (1) SA 758 (W) at 762H-764F. Although this case was concerned with s 182 of the Companies Act 46 of 1926 as amended, which was the precursor of s 339 of the C present Companies Act, and the Court declined to express any conclusion as to the effect of the use in s 339 of the expression 'the law relating to insolvency', such expression is wider than the expression 'the law relating to insolvent estates' and the conclusion that the former includes provisions relating to matters of procedure is really a D fortiori; (ii) (subject to what is submitted in the alternative infra) there is nothing in the Companies Act to indicate an intention on the part of the Legislature that, where in the administration of the winding-up a disposition is to be attacked under the insolvency law, only the provisions of such law relating to matters of substance are to be applicable. Under the Insolvency Act, and upon a proper interpretation of the relevant provisions, ie those of s 2 sv 'Court' E and those of ss 149 and 151, the intention of the Legislature was: (a) to indicate which Court would have jurisdiction in relation to any matter arising under the Insolvency Act, including matters arising under ss 26, 29, 30 and 31 (being the sections dealing with impeachable transactions); (b) to indicate that not only the appropriate Supreme F Court, but also a magistrate's court having jurisdiction as such, would be competent to adjudicate upon any matter arising under any of such sections; (c) to regulate the identity of the Supreme Court which would have jurisdiction in any matter arising under the Insolvency Act by means exclusively of the provisions of ss 149 and 151; (d) by means of s 149, to regulate such identity both in relation to a debtor and to the G estate of a debtor, ie in the context, to regulate such identity, not only for the purposes of the sequestration of the estate of a debtor, but also for those of the administration of such debtor's estate after the sequestration thereof; (e) to accord jurisdiction in any matter arising under the Insolvency Act pertaining to the administration of an estate after the sequestration thereof exclusively to the Court which H sequestrated such estate. In relation to s 150 of the Insolvency Act 32 of 1916 (hereinafter denoted as 'the 1916 Act'), it was held that the jurisdiction conferred by such section had relation only to sequestration proceedings: see Ex parte Bobert 1926 WLD 104 at 105; see also Ex parte Human 1927 WLD 286 at 287-8; and see also Ex parte Merchants' Trust Ltd 1929 WLD 196 at 198-9; and this was followed in I relation to s 149 of the current Insolvency Act in Ex parte Coetzee 1940 TPD 35; see also Ex parte Fleishman 1941 WLD 235 at 236. This conclusion was wrong in relation to s 150 of the 1916 Act and it is wrong in relation to s 149 of the...