Attorney for insolvent company can be its liquidator

Post-winding up attachments cannot give rise to lis pendens objection

CIV. CASE NO. 284/99

In the matter between

SIBONISO CLEMENT DLAMINI N.O. APPLICANT

And

SWAZILAND MANUFACTURING AND

ALLIED WORKERS UNION (S.M.A.W.U) RESPONDENT

Coram S.B. MAPHALALA – J

For Applicant MR. S.C. DLAMINI

For Respondent MR. G. MASUKU

RULING ON POINTS OF LAW

(03/03/99)

Maphalala J:

This matter was called before me in the contested roll of the 19th February 1999, and was informed by counsel for the applicant that this matter will be argued together with case No. 25/99 involving the same parties. Mr. Masuku confirmed this to be so.. The court then proceeded to hear arguments in Case No. 284/99. Briefly put the facts of the dispute is that the applicant in the present case was appointed a liquidator of one company called D.B.Sugar (Pty) Ltd which gone to voluntary liquidation. The respondent and its members in Case No. 25/99 obtained a rule nisi returnable on the 19th February 1999 for the attachment of certain truck which they wanted to hold as security for the payment of their terminal benefits as it was feared the company directors were secretly moving the machinery to South Africa in a bid to evade paying their benefits. The crux of the present application is to allow the liqudator access to the premises in Matsapha so that he can commence his duties as a liquidator. It appears the liquidatoe canot do so as the workers have barracaded the gates and are also sleeping outside the premises and this has caused some nasty incidences which some members of staff who are still working in the premises. The situation was described by Mr. Dlamini as explosive. To avert this Mr. Dlamini has moved an urgent application in the following terms:

The application is founded by the affidavit of Mr. Dlamini the liquidator, a confirmatory affidavit of one Phillipus Johannes De Bruyn and other pertinent annexures.

Mr. Masuku duly filed an answering affidavit of the respondent raised four points in limine. Firstly that the latin maxim of Nemo deret esse judex in causa propria sua of natural justice that no man shall be judged in his own cause is being flouted through having Siboniso Clement Dlamini appointed as liquidator of Dee Bee Sugar (Pty) Limited. In a still pending High Court matter between the respondent and the company, the company in whose interests the applicant in the current case is acting, being Case No. 25/99, Siboniso Dlamini is the attorney of record of Dee Bee Sugar. Therefore, in the interest of fairness, Siboniso C. Dlamini has to relinquish one of the double official duties he has for Dee bee Sugar (pty) Limited in Case No. 25/99 and Case No. 284/99. In the current case argued Mr. Masuku has an interest already and hence that interest may inadvertently influence his impartiality in discharging his mandate as liquidator.

The second point in limine is that Dee Bee Sugar (pty) Limited in whose interest Mr. Dlamini is acting as its liquidator has failed to comply with the provisions of Section 159 (1) and (2) of the Companies Act No. 7 of 1912. Firstly Dee Bee Sugar (Pty) Limited did not and has not advertised in the gazette that it is in voluntary liquidation in accordance with Section 159 (1) of the Companies Act. Further, neither the Master of the High Court nor the Registrar of Deeds has been furnished with the resolution by Dee Bee Sugar (Pty) Ltd of its voluntary liquidation in accordance with Section 159 (2) of the Companies Act.

Thirdly the relief prayer by applicant in its prayer 3 and 5 of its notice is still lis pendens in High Court case no. 25/99 involving Swaziland Manufacturing and Allied Workers Union against the company. In this case an interim order for the attaching and removal of the trucks and trailer was granted by the court and is still pending as therule is returnable on Friday the 19th February 1999, in the contested roll.

Lastly that the application was never served upon all other parties who are creditors of and are interested parties in the matter involving the company, who have inter alia, applied to this court andobtained orders for the attachment of assets belonging to and situated within the premises of Dee Bee Sugar (Pty) Ltd at Matsapha Industrial Sites.

Mr. Masuku’s submissions were substantially the same as the points in limine outlined in his client’s answering affidavit and for the sake of brevity I am not going to repeat them here.

Mr. Dlamini responding on the first point raised contended that the maxim is not relevant and it does not apply in this case. He argued that in terms of Section 156 of the Companies Act the appointment of a liquidator under these circumstances is allowed. To support this proposition he directed the court’s attention to Lawsac Companies) Vol 4 at paragraph 415.

As regards the second point in limine that the applicant has not complied with Section 159 (1) of the Companies Act. Mr Dlamini submitted that annexures “RA1”, “RA2” and “RA3” are self-explanatory. These are a copy of an advertisement in the local paper, letter to the Master of the High Court and a letter to the Registrar of Deeds in terms of the said section. The annexures form part of the applicant’s replying affidavit.

On the third leg of the points raised Mr. Dlamini contended that Mr. Masuku is completely wrong to say that the matter is les pendendes and that he was interfering. An attachment which takes place after winding up is void. In support of this proposition he referred the court to Lawsa (Vol. 4) (supra) at paragraph 436. That attachments and executions put in force after commencement of winding-up void.

These are the issues for determination. It appears to me that Mr. Dlamini is correct. Firstly, the maxim relied upon by the respondent has no application in the instant case. When one follows the proposition stated in Lawsa (supra) paragraph 415 there is no duplicity of roles by Mr. Dlamini is acting as he does in the present proceedings. On the second point in limine I am satisfied that Section 159 (1) of the Companies Act has been complied with as evidenced by annexures “RA1”, “RA2” and “RA3”. On the point raised by Mr. Masuku that notwithstanding the annexures they were sent to the relevant parties long after the decision was taken for the voluntary winding-up of the company, my considered view is that this was done within a reasonable time in conformity with the section. On the third point raised I also agree with Mr. Dlamini on the basis of the proposition enunciated in Lawsa (supra) paragraph 436 that when the court has made an order for the winding-up of a company, or a special resolution for its voluntary winding-up has been registered, an attachment of execution in respect of a pre-liquidation debt (see Milne vs cassim 1962 (1) S.A. 775 (D) and Parity Insurance Co. Ltd vs Hill 1967 (2) S.A. 551 (A)). The facts of the present case are that the union obtained an interim order for the attacment of certain trucks belonging to the company as it was feared that the company was secretly moving its machinery to South Africa at the detriment of its employer. That order was granted by the court on the 13th January 1999. When the court wanted to find out why the order has ot been executed the court was informed that a certain employee of the company refused to accept service. In my view this is not a satisfactory explanation as Mr. Masuku knows perfectly well what course to take when one defies an order of this court. Another bluffing aspect of the matter is that the order specifically stated that the Deputy Sheriff is to be assisted by the members of the Royal Swaziland Police to effect the execution. I refuse to accept that the difficult employee could overpower the might of the police force. For these reason I find that the points raised has no substance. On the fourth point I am in total agreement with Mr. Dlamini and also find that it cannot stand.

In sum, I find that all the points in limine cannot stand and I thus dismiss them and rule that the matter be argued on its merits.

S.B. MAPHALALA

JUDGE

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