South Africa: South Gauteng High Court, Johannesburg

The use of the term “from date of service” is indicative that the first day is to be excluded and that the one month period would expire one month from the date of the notice (namely on 30 April 2011). See Pivot Point SA (Pty) Ltd v Registrar of Companies and Another 1980 (4) SA 74 (T) at 79B-D. Even if the other method of calculation is used (namely including the day upon which the notice was given the respondent would be entitled until midnight on 29 April 2011 to institute the proceedings referred to in the notice.

[11] On any calculation if the words “make application” constitute issue or issue and service the present proceedings were launched during the one month period available to the respondent to institute proceedings. It was submitted that the words “make application” mean actually move the application in court.

[12] The authorities are set out in the matter of The Government of the Islamic Republic of Iran v Berends 1998 (4) SA 107 (NmHC). The words “make application” are ambiguous. They could mean make application by issuing only; issuing and serving; issuing, serving and setting down for hearing or issuing, serving, setting down for hearing and actually being heard. The words in the Statute must be considered to discover what the appropriate meaning is.

[13] The Act requires the notice to set out that application will be made if the company fails to perform an act within a particular time. If this does not happen a right is then conferred upon the applicant in section 266(2)(b) to make application. Integral to the right to make application is the failure of the company to have performed the act required of it within the period of one month. Upon a simple reading of the statute the applicant would have no right to make application to the court until the one month period had elapsed.

[14] It was submitted that at the time the application is made all that the court needs find is that the company has not instituted the proceedings. The issue and service so it was submitted could take place during the one month period and as long as the hearing (the making of the application) took place after the one month period the court would be able to reach the finding it was required to reach by section 266(3)(a). If this interpretation were the correct interpretation the applicant to make out his cause of action and produce the evidence required to substantiate it in the founding affidavit would need only show delivery of the relevant notice by the time of issue of the proceedings. Immediately after the notice had been delivered the applicant would be able to issue the application under section 266.

[15] The fact that the applicant in the notice would be requiring the company to institute proceedings and that it had afforded the company the full time allowed at the date of institution would not disentitle the applicant from immediately commencing the proceedings. If this interpretation were correct the Act would allow parallel proceedings to exist simultaneously in the sense that the applicant would have instituted proceedings seeking an order against the company to obtain the appointment of a provisional curator while at the same time requiring the company to institute proceedings.

[16] In my view it would be vexatious to allow the applicant to commence proceedings at a time when the company was allowed the opportunity of considering its position and taking steps to implement its decision i.e. during the one month allowed. In my view the right of the applicant to institute proceedings under section 266 is dependent upon the completion of the month period allowed to the company.

[17] If it were not so the company would be obliged to oppose the application and prepare relevant documentation to oppose the application while it was considering its position. The section in my view did not envisage this vexatious situation. It is not simply a matter of costs as it was submitted by the applicant. The company is involved in an expensive and time-consuming activity of opposing litigation brought against it. This very act detracts from its ability to in a settled atmosphere with proper time, consider its position.

[18] I need not consider whether the position is different between issue and issue and serve as there was both issue and service on the same date. In my view the making of the application occurred prior to the lapse of the month allowed the respondent and hence was premature.

[19] It was submitted that as the notice had been issued prior to the coming into force of the new Act the provisions of the new Act would govern in any event. The answer to this submission in my view is to be found in Schedule 5 section 10 of the new Act. I dealt with this previously.

[20] The parties were agreed that the employment of two counsel was warranted.

[21] As the application was brought prematurely the application in my view must fail.

[22] I accordingly make the following order:

The application is dismissed with costs including the costs consequent upon the employ of senior and junior counsel.

_____________________________

C G LAMONT

JUDGE OF THE SOUTH GAUTENG

HIGH COURT, JOHANNESBURG

Attorneys for Applicant : Evershed

Counsel for Applicant : Adv. Subel SC

Adv. Theron

Attorneys for Respondent : Fluxmans Attorneys

Counsel for Respondent : Adv. Van der Linde SC

Adv. Currie

Date of hearing : 21 September 2011

Date of Judgment :