REPORTABLE
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CIRCUIT LOCAL DIVISION OF THE WESTERN CAPE HIGH COURT, HELD AT GEORGE)

Before the Hon Mr Justice NJ Yekiso

CASE NO: 16625/2011
H200/11
In the matter between:

And

REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CIRCUIT LOCAL DIVISION OF THE WESTERN CAPE HIGH COURT,

HELD AT GEORGE)

CASE NO: 16625/2011

H200/11

In the matter between:

And

Coram:	Yekiso, J
Delivered:	23 January 2012
Summary:

IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CIRCUIT LOCAL DIVISION OF THE WESTERN CAPE HIGH COURT, HELD AT GEORGE)
CASE NO: 16625/2011 H200/11
In the matter between:

And

JUDGMENT DELIVERED ON 23 JANUARY 2012

YEKISO, J

[1] By way of a notice of motion issued out of the Eastern Circuit Local Division of the Western Cape High Court, held at George, the applicant, Hunter Mitchell Projects CC (in liquidation) instituted proceedings against the first and the second respondents for the relief in the following terms:
[1.1.]That the first respondent be ordered to pay an amount of R 133,808.57 to the applicant;
[1.2.] Interest on the aforementioned amount from date of demand to date of final payment thereof at the rate of 15.5% per annum;

[1.4.] That the first respondent be ordered to pay the costs of the application, alternatively, that the first and second respondents be ordered to pay the costs of the application, jointly and severally, the one paying the other to be absolved only in the event of the second respondent opposing the proceedings so instituted.

THE PARTIES

[3] The second respondent is All Aluminium cc, similarly a close corporation incorporated in terms of the provisions of the Close Corporation Act, 69 of 1984, having its registered office and place of business at Sandkraal Road, George Industria, George, in the province of the Western Cape.

[4] The second respondent is Goussard Attorneys, a firm of attorneys practising as such under the name and style of Goussard Attorneys at 33 Victoria Street, George in the province of the Western Cape.

[5] The second respondent is joined in the proceedings by reason of the fact that it represented the first respondent in the application for and the execution of a garnishee order and that the amount of R133,808.57 which forms the subject matter of these proceedings was paid into the trust account of the second respondent. No costs order is sought against the second respondent unless the second respondent were to elect to oppose the relief sought.

FACTUAL BACKGROUND

[7] At the time the first respondent instituted an action and ultimately obtained judgment against the applicant, an entity by the name of Kingswood Golf Estate (Pty) Ltd was indebted to the applicant in an amount of R603,446.67 ostensibly due and payable to the applicant by Kingswood Golf Estate in respect of services rendered and material supplied by the applicant to Kingswood Golf Estate at the latter's special instance and request.

EVALUATION

[15]      Section 359 of the Companies Act provides as follows under the heading "Legal proceedings suspended and attachments void":-"359 . Legal proceedings suspended and attachments void -

(a) all civil proceedings by or against the company concerned shall be suspended until the appointment of a liquidator; and
(b) any attachment or execution put in force against the estate or assets of the company after the commencement of the winding-up shall be void.

(b) If notice is not so given the proceedings shall be considered to be abandoned unless the Court otherwise directs."

[16] In the light of the observations I make in paragraph [13] of this judgment as regards the grating of the interim garnishee order, all that I am required to determine, in my view, is whether steps taken by the first respondent to procure payment of the attached emoluments after the granting of the provisional order of liquidation, constitute execution put in force against the estate or assets of the company after the commencement of winding-up proceedings or, in the alternative, whether the steps so taken can be construed as continuation of legal proceedings in violation of the provisions of s 359(1 )(a) of the Companies Act.

[19] Payment of the attached emoluments by Kingswood Golf Estate to the sheriff on 7 February 2011 was in response to service on it of the final emoluments attachment order. Payment was in response to service on Kingswood Golf Estate of a court process served on it after the commencement of the winding up proceedings. The service of a court process on Kingswood Gold Estate, after the winding -up proceedings had commenced, constitutes continuation of civil proceedings instituted before the commencement of the winding up proceedings. In my view, it also constitutes execution put in force against the estate or the assets of the company after the commencement of the winding-up proceedings. I therefore determine that the service of a court process, in the form of the final emoluments attachment order, on Kingswood Golf Estate, to procure payment in satisfaction of the first respondent's claim, constitutes a continuation of civil proceedings in violation of section 359(1 )(a) of the Companies Act. Furthermore, service of such a process and the ensuing payment, constitutes execution put in force against the estate or the assets of the applicant after the commencement of the winding-up proceedings in violation of the provisions of section 359(1 )(b) of the Companies Act.
[20]       In the result I make the following order:

[20.3.] The first respondent is ordered to pay to the applicant an amount of R133,808.57 together with interest thereon at the rate of 15.5% per annum, from date of demand up to date of payment, within seven(7) days of the granting of this order.

N.J YEKISO J