REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG

(1)	REPORTABLE: YES / NO
(2)	OF INTEREST TO OTHER JUDGES: YES/NO
(3)	REVISED. 

         ……………………..		………………………...
                   DATE			        SIGNATURE

                                                   					                         CASE NO: 11144/2013

In  the  matter  between :

NOLUTHANDO  MADIMABE                                                                                 Applicant
	 
 and

TRANSDECO  GTMH  (PTY)  LTD  (IN LIQUIDATION)			First  Respondent

HARRY  KAPLAN  NO							Second  Respondent

LUKE  BERNARD  SAFFYY  NO						Third  Respondent

THE  MASTER  OF  THE  HIGH  COURT					Fourth  Respondent

		
    					JUDGMENT
MBONGWE, AJ :

[1]	This  application  was  launched  in  terms  of  the  provisions  of  Section  359(2)(b)  of  the 
companies  Act  of  1973 [ “ the  Act “].  In  terms  of  Section  359(2)(a)  a  party  in  pending  
proceedings  or  who  intends  to  institute  proceedings  against  a  company  in  liquidation  
must,  within  four  weeks  from  the  date  of   appointment  of  liquidators  for  such  
company,  give  the  liquidators  notice,  in  writing,  of  its  intention  to  continue  or  
commence  proceedings  against  the  company,  failing  which  such  party  is  considered  to  
have  is  abandoned  its  claim.  Section  359(2)(b)  provides  an  olive  branch  to  a   party  
who  could  not  give  timeous  notice  by  affording    such  party  an  opportunity  to  apply  
to  court  for  an  order  that  it  has  not  abandoned  its  claim  and  intends  to  continue  
therewith.  This  application  is  being  opposed  by  the  1st,  2nd  and  3rd  respondents. 

[2]	The  granting  of  an  application  in  terms  of   section  359(2)(b)  is  dependent  on  the  
              court  being  persuaded  on  the  evidence   placed  before  it  with  regard  to  the  
              circumstances  relating  to  the  failure  to  give  timeous  notice  to  the  liquidators  as  well  
              those  prevailing  immediately  prior  to  and  at   the  launch  of  the  application.    

[3]	The  applicant  in casu  instituted  proceedings  in  the  Labour  Court  in 2007 against  the
1st  respondent  seeking  compensation  consequent  to  an  alleged  harassment  and  rape
she  had  been  a  victim  of  at  her  place  of  employment  at  the  hands  of  her  co-
worker.  Both  the  applicant  and  her  assailant  were  in  the  employ  of  the  1st 
respondent   at  the  time  of  the  occurrence.  The   pleadings   had   been   closed  and  a  
trial  date  awaited  when  the  1st  respondent  was  placed  in  voluntary  liquidation  in  
October   2008.   In  terms  of  Section  200  of the Act,  all  proceedings  are  suspended  at  
such  stage  pending  the  appointment  of  the  final  liquidators  for  such  company.  The   
liquidators   of   the  1st  respondent  were  appointed  on  6  May  2009.

[4]	It  is  alleged  in  the  founding  affidavit  deposed  to  by  the  attorney  acting  on  behalf  of  
           	the  applicant,  both  in  this  application  and  the  case  pending  in  the  Labour  Court,  that  
           	she  had  not  been  aware  of  the  liquidation  of  the  1st  respondent  until  she  was  so  
           	informed  by  the  attorneys  who  represented  the  1st  respondent  in  that  court   in  a  
           	letter  dated   28  January  2009.  She  was   not  given   the  details  of  the  appointed  
           	liquidators   despite  her  follow  up  letters  requesting  same.  It   was  only  after  she   had  
           	finally  managed  to   establish  the  name  of  the  attorneys  representing  the  liquidators  
              that  she  was  furnished,  in   a  response  letter  dated  15   July  2009 ,  with  details  of  the  
	liquidators   including  their  date  of  appointment.   Details   of   efforts   made  by  the 
applicant’s  attorney  to   establish  the  identities  of  the  appointed  liquidators  are  set  
out  in  the  founding  affidavit  and  supported by   attached  copies  of  the  relevant  
correspondence   with  various   attorneys   and  the  Master’s  office.  

[5]	A  day  after  receiving   the  details  of  the  liquidators,  applicant’s  attorney  filed  a  
          	purported  notification  of   the  applicant’s  intention  to  continue  with  its  claim  against  
          	the  1st  respondent.  It   was  by  then  45  days  since  the  date  of  appointment  of  the  
          	liquidators  -  well  outside  the  period  of  four  weeks  prescribed  in  Section  359(2)(a). 
In   prayer  1    the   applicant  seeks   an  order    that  this  notification  be  considered   to   
               be   due   notice.  

[6]	The   following   are   issues   for   determination   by   this  court:

	6.1	Issue  has  been  taken  with  regard  to  the  founding  affidavit  having  been  
                         	deposed  to  by  the  applicant’s  attorney  and  not  the  applicant  herself  and  the  
                          	absence   of  a  confirmatory  affidavit  by  the  applicant.  It  is  submitted  on  behalf  
                          	of  the  respondents  that  this  being  a  substantial  application,  it  was  imperative  
                          	that  the  applicant  herself  depose  to  the  founding  affidavit  and  that,  in  the  
                          	current  circumstances,  no  proper  application  has  been  brought  before  this  
                          	court.  Counsel   for  the  applicant  argued  otherwise.

	6.2	The  second  issue  to  be  determined  is  whether  the  applicant  had  been   in 
                             wilful   or  negligent  in  failing  to  give  timeous  notice  to  the  liquidators  and  
                             whether   the  steps  that  were  followed  by  the  applicant   to   identify   the
                             liquidators  were  reasonable ;   the  time  it  took  for  the  applicant  to  launch  this  
                             application  to   achieve  compliance  with  the  prescripts  of  Section  359(2)(b)  was
                             also  placed  in  issue.

[7]	In  determining  the  first  issue,  this  Court  takes  into  consideration  the  following:  that 
	the  applicant’s  attorney  had  already  been  involved  in  the  pending  proceedings  in  the  
              Labour  Court   when   the  1st  respondent  was  placed  in   voluntary  liquidation;  she  
              corresponded  with  the  attorneys  who  acted  on  behalf  of  the  1st  respondent    in
              the  Labour  Court ,   the  Master’s   office   and   finally   traced   the  attorneys    
              representing  the    appointed  liquidators  .  As   stated   above,    annexures  of  the
              relevant    correspondence  are  attached  to  the  founding  affidavit  and  are  not  
              disputed.  Through   her   communication,   Mr  Cohen,   an  attorney  representing  
              the  liquidators,  attended  the  Labour  Court  at  some  stage   for  a  scheduled   pre –trial
              conference.   The   applicant,  in  my  view,   could  at  best  have  been  advised  by  her  
              attorney  of  these  developments,   but   would  certainly   not   swear  positively  thereto.  
              Consequently,  I  find  that   there  could  be  no  better  qualified   person  to  depose  to  the  
              founding  in  this  application  than  the  applicant’s  attorney.   A   confirmatory  affidavit  by  
              the  applicant  would   have  served  no   purpose  as  it  would  contained   hearsay  evidence  
               which   is  not  admissible.  The   respondents’   argument   in   this   regard   is  rejected.

[8]	With  regard  to   the  deponent’s  reference,  in  the  founding  affidavit,   to   the  cause  of  
             	action  in  the  labour  court  proceedings,  I  do  not  believe  that   it  correct  to   view  that  
             	as   amounting  to  giving    testimony  on  the  merits  of  that  case.   The   reference   is  
              made   merely   to  informs   this   court   what  the  nature  of  the  applicant’s  claim  is.  
              Consequently,   the   respondents’    assertion   that   hearsay   evidence   is  contained   in  
              the   founding   affidavit    stands  to  be  rejected.

[9]	I  interpose,  prior  to  dealing  with  the  second  issue  raised,  to do  a  brief  overview   of  
	the  purpose  of  Section  359  of  the  Act  as  well  as  some   important  considerations  that  
	inform  the  court  in  arriving  at  a  decision  whether   or   not   to  grant  an  application  of  
              this  nature .  The  purpose  of  this  section  is  to  regulate  and   prescribe  a  manner  by  
              which  a  party  could  have  its  claim  entertained  by  the  liquidators.  The   Act   sets  out  a  
              restrictive,  rather  than  a   prohibitive,   procedure  relating  to  claims   against  a  company  
              in   liquidation.  By   providing   the   liquidators   with   a   defence   in   respect   of   notices  
             given   outside  the  prescribed   period   without   conferring   on  them   the   authority   to  
             condone   a   late  notification,   the  Act   seeks,  in   Section   359 (2)(b),    to   use   the   
             neutrality   the    court    in   its   assessment    and    determination   whether   an   applicant  
             deserves   to  be   afforded   an   opportunity    to   continue   with   or  to   commence   
             proceedings   against  a   company   in   liquidation.  It    is   against   this  background   that   I   
             find   untenable   the   dictum   by  Harms  JA   that    liquidators   are   not   obliged  to  raise  
             the   defence    provided   to  them   in  Section  359(2)(a) -  (See  BARLOW   TRACTOR  Co  
             (Pty)   Ltd  v   TOWNSEND  1996(2)  S.A  869 (A)  at  884F-G).   It   follows   from   this   finding
             that   the   applicant’s   prayer  1   cannot   be   considered.

[10]     In   my  view,   liquidators   are   not   obliged  to  always  oppose   an  application   brought   in   
            terms   of  Section  359(2)(b)   particularly   in   circumstances   where   they   are   aware   that   
            the   applicant   is   actively    involved   in   pending   proceedings   against   the  company   in  
            liquidation  and,    secondly,   because   the  decision  whether   to  grant  or  dismiss  an  
            application  in   terms   of  Section  359(2)(b)  is  discretionary   to  the  court  which   has  to   
            be   persuaded   that   the   applicant   had   not   abandoned   its   claim.

[11]	I   turn   to   consider   the   second   issue   raised   which  I  shall   address   simultaneously   
              as    I   deal   with   some   of   the   relevant    considerations   that  inform   the   court’s   
              decision   in   the   present   case :   

11.1	It   is   importance   to   commence   by   stating   that  the  Act  does  not  prescribe  a  
              period   within  which  an  applicant  has  to  launch  an  application  in  terms  of  
Section 359(2)(b).  Equally  important  is  to  state  that  the  need  for  the  
liquidators  to  finalise  the  liquidation  process  as  soon  as  possible   in  the  
interest   of creditors  and  all  interested  parties  dictates  that  an  unreasonable  
delay  in bringing   an    application  in   terms   of   Section  359(2)(a)   may   
jeopardise   the chances    of    the   application   being    granted    irrespective   of 
the   prospects  of   success   of   the   pending   proceedings    or   the   proceedings 
 sought   to   be   instituted   against   a   company   in   liquidation.   This will  be  the
 situation  where   the   liquidators  have  reached  a  critical  stage  of  finalising  the
  liquidation  process   that   granting   the    application  would  result   in   prejudice  
 being    caused.   The   situation   is   different   in  the  present   case  as   evidenced
   by   the  fact   that   a   similar  application   involving   the  respondents   was
   heard  in  this  court  this  week,  suggesting   that   not   much   by  way   of 
  inconvenience   or  prejudice   is   occasioned    by   this   application.  

11.2	The  station  of  the  applicant  and  the  company  concerned at  the  time  the  
	company  is  placed  in  liquidation   are  also   factors   to   be   considered.   In   the  
               present   case  both  the  applicant  and   the   1st   respondent    are   parties   in    
               pending    proceedings    and   were   awaiting   a  trial   date   when   the   1st  
               respondent    was   placed   in  liquidation.  Until    the   liquidation    intervened,  the  
               applicant   had   done   everything    necessary   to   have   her   case   ventilated   in
               court.   To   this   end     pleadings    were   closed   and   a    pre-trial    conference   
               scheduled    for    the   29   August   2012   was,  due  to  the  applicant’s  
communication,   attended   by   and   postponed   at   the  instance  of  a  Mr 
Cohen,   an   attorney   representing   the   liquidators.

[12]	I  have  considered  all  the  steps  that  were  taken  by  the  applicant  which  I  find  were
           	reasonable  and  persistent    in  trying  to  establish  the  details  of  the  liquidators  for  the  
           	purpose   of  giving  the  required   notice.  I   have   also   noted   the   criticism  of   route  
              followed   by   the   applicant’s   attorney ,  which   criticism  I  find   to  be   subjective   in  
              nature.     I  cannot   find   that  applicant’s   attorney’s    initial   reliance   on  obtaining   non 
              prejudicial    information   from   an   opponent    colleague  in  pending   proceedings   was   
              particularly  unreasonable. 

]13]	The  duty  of  the  court  in  applications  of  this  nature  is  to  assess  and  determine  on  
          	the  evidence  presented  whether  the  conduct  of  the  applicant  in  relation  to  its  claim  
          	has  been  such  that  only  an  abandonment  of  such  claim  can  be   inferred.  I   find   in  
              the   present   case  that  applicant  has  done  all  things   reasonable   and    which   are 
              consistent   with   a   determination   to  pursue   the  claim.  I   find   that   the  omission   to  
              give   timeous   notice   in   terms   of   Rule  359(2)(a)   has  been   satisfactorily   explained.  
              In   the   absence   of   prejudice   to   the  liquidation   process,   the  creditors   and   any  
              other    interested    party,  there   is  no  reason  why  this  application  should   not   be  
              granted  ( See   SOUTH   AFRICAN   TRANSPORT   SERVICES   v   JOUBERT  NO    1986 (2)  SA  
              395 (C)  at  400  -  401).

[14]	In  determining  the  issue  of  costs,  I  take  into  account  the  fact  that  launching  this
          	application  was  the only  route,  in  terms  of  the  Act,  open  to  the  applicant   after  
	failing  to  give  timeous  notice  to  the  liquidators.   On  the  other  hand   I  cannot   find  
              reason  for   opposition   to   this  application,   bearing  in  mind  that  the  liquidators,  
	through  their  attorney,  Mr  Cohen,  became  aware  of  the  pending  proceedings  in  the  
	Labour  Court   to  realise  that  the  applicant  was  determined  to  continue  with  its  
              	claim  against  the  1st  respondent.   I   find,   consequently,  that   the  opposition  of   this  
             	application   was   unreasonable.   I   cannot   think   of   any   reason   why   the   1st  
              	respondent   should   not   be  ordered   to   pay   the   costs   in   these   circumstances.

[15]	Resulting  from  the  findings  in  this  judgment,  the  following  order  is  given :

1.	It  is  declared  that  the  applicant  has  not  abandoned  its    claim   in  the  pending 

proceedings   against   the  1st  respondent   in  the  Labour  Court  and  applicant  is  
	
hereby    granted   leave   to  continue   therewith.

2.	The   1st   respondent    is   ordered   to  pay   the   costs   of   this   application.

                                                               	
M.  MBONGWE, AJ
ACTING   JUDGE   OF   THE   HIGH   COURT  OF  SOUTH   AFRICA
GAUTENG   LOCAL  DIVISION,  JOHANNESBURG
	
DATE OF HEARING        	:			03  MARCH   2014
DATE OF JUDGMENT    	:			01   APRIL   2014
FOR THE APPLICANT     	:			ADV   J.  DANIELS 
INSTRUCTED BY             	:			WEBBER   WENTZEL   ATTORNEYS,
JOHANNESBURG	
FOR THE RESPONDENTS:			ADV   J.  SUTTNER   SC					
INSTRUCTED BY		:			F.  J.  COHEN   ATTORNEYS
						JOHANNESBURG