Law and Courts III

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According to the Applicant, due to exceptional circumstances** she was duty-bound by legislative prescripts to ascertain company in liquidation assets and to immediately take possession to the benefit of the general body of creditors. Applicant's Founding Affidavit took into account the anticipated asset value of the insolvent estate, claims against the estate and that the dividend available for distribution would be Rand nil without the trucks. Should the trucks be returned to her, the dividend would increase to an estimate of 30c in the Rand. On the other hand, the Respondents could unlawfully, mala fide and intentionally prevent her control of the trucks. She also referred to the transfer of four trucks by the company in liquidation to the First Respondent on 18 February 2019 after settlement of outstanding amounts due by instalment sale agreements concluded with a major bank. During a Magistral enquiry it was ascertained the First Respondent was in possession of the trucks albeit in the process of on-selling them. On 7 February 2020 the Applicant became aware the First Respondent had sold or had transferred the trucks to the Third Respondent. With this background in mind, the Applicant disclosed further disturbing information in her Founding Affidavit. The investigations disclosed that the Second Respondent was sole director however simultaneously he was director and the controlling mind of the First Respondent company. The Third Respondent's close corporation was owned and operated by the brother-in-law of Second Respondent who featured in this application as the Fourth Respondent. On the basis of these findings, the Applicant stated that it had become abundantly clear the Respondents were colluding in an attempt to frustrate her performance of statutory duties plus in an attempt to defraud and prejudice the body of creditors of the company liquidation. The Respondents further pointed out that the trucks were only transferred to the second hand car dealer stock of the Third Respondent to place the annual licensing of the trucks on hold until such time as the trucks are removed from that stock register or registered in a new owner’s name. This was done to avoid the paying of some R 80 000 license fees for the trucks. Mr. Nel also pointed out that he has arranged for the trucks to be stored at a truck stop next to the N3 highway in Johannesburg in anticipation of the further court proceedings of 26 February 2020 and had remained parked there. He submitted that Daniso, J could never have made the order in terms of Section 69 of the Insolvency Act because that Section was only applicable in Magistral proceedings - the High Court therefore lacked jurisdiction to issue a warrant for the search and possession of the trucks, sic. The honourable Court inter alia found i) there was good reason to be found for the Applicant having approached the Court on an ex parte basis due to the history of the trucks changing hands; ii) the Respondents could have set down the matter for reconsideration of the order in terms of Rule 6(12)(c) of the Rules of the High Court; iii) filing the present notice effectually suspended the previous order however it was nevertheless held all the circumstances and background pointed to exceptional circumstances for the Applicant in the event with no irreparable harm to the body of Creditors since the trucks were safe. The Respondents did not own any trucks. Vide *Karein Fortein NO v Sumeil (Pty) Ltd [2020] ZAFSHC 59; **s 18(3) Superior Courts Act 2013 "...the existence of exceptional circumstances and irreparable harm which call for the Court Order to remain operative".
Asset Possession and Control remains to the benefit of the body of Creditors

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The respondent was placed in final liquidation* in April 2019 and the applicant was appointed liquidator. The applicant made allegation the respondents attempted to conceal goods of the company (4x trucks equal in value to around R 2.8m). They approached the Free State High Court on an ex parte urgent basis in February 2020 for an order i) preserving the goods and; ii) directing the handing over of the goods to the applicant. The order was granted by Daniso J. The respondents immediately filed a notice of appeal against the order which effectively suspended the order in terms of section 18(1) of the Superior Courts Act 2013. In the result the respondents were no longer obliged to comply with the terms of the order, which spurred the applicant to approach the court for orders that Daniso J order would remain operative pending outcome of the application for leave to appeal and any further appeals against the order.

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