Theron v Natal Markagente (Edms) Bpk

• Jurisdiction: South Africa
• Judge: Didcott J
• Judgment Date: 16 August 1978
• Citation: 1978 (4) SA 898 (N)
• Hearing Date: 11 August 1978
• Court: Natal Provincial Division

Didcott J:

Last Friday was the return day of a rule nisi which had

Didcott J

called on those who were interested to show cause why the respondent should not be placed under judicial management. A provisional order with that effect had already been granted, and a provisional judicial manager had been appointed. He was Mr L R Meyer, an attorney.

A It was plain, and indeed common cause, that the respondent was well and truly bankrupt. Its creditors numbered about 140, their claims amounted to some R400 000, and these exceeded its assets by more than R300 000. The sole question in such circumstances was whether judicial management was reasonably likely to transform it into a successful concern and enable it B eventually to pay all its debts.

That issue was canvassed at length and disputed with vigour in the affidavits. Entering the lists, one of the respondent's creditors maintained it was doomed and should be left to its fate, which of course was liquidation. The applicant insisted, on the other hand, that it would recover if given a respite. He added that the opposing creditor was its close trade competitor, with a private reason for objecting to any C quarter. But his personal interest in the respondent's survival was equally strong. He was one of its directors, he held 60 per cent of its shares, and his wife was its only other shareholder.

In this conflict Mr McLaren, who appeared for the applicant, relied D heavily on the report of the provisional judicial manager, which had been compiled in compliance with s 430 (e) of the Companies Act 61 of 1973 and filed for the Court's consideration under s 432 (2) (b). Its appraisal of the respondent's prospects under judicial management was highly optimistic, and it ended with the recommendation that the rule nisi be E confirmed. It had been tabled and adopted at a meeting of creditors held in terms of ss 429 (b) (ii) and 431, but that was largely a formality because the gathering was attended by Mr Meyer alone, armed with proxies. On the other hand, it had also been sent by post to each creditor. Mr McLaren submitted that it carried great weight. It had come from an unbiased source, he said, and was the product of an independent investigation into the respondent's affairs by the Court's own F plenipotentiary. He pointed out that, having presumably received and read it, all the creditors but one had accepted the advice which it contained, or at least had not rejected it with...