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# South Africa: South Gauteng High Court, Johannesburg
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[2023] ZAGPJHC 541
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## Malvern Trading CC v Absa Bank Ltd (2021/50947)
[2023] ZAGPJHC 541;
2024 (1) SA 478 (GJ) (23 May 2023)
Malvern Trading CC v Absa Bank Ltd (2021/50947)
[2023] ZAGPJHC 541;
2024 (1) SA 478 (GJ) (23 May 2023)
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sino date 23 May 2023
FLYNOTES:
COMPANY
– Close corporation – Jurisdiction – Principle
of dual jurisdiction generally applicable to close
corporations –
Close corporation deemed to be resident at its registered office
or principal place of business –
Service of process on
registered office – No merit in contention that absence of
close corporation from registered
office invalidates otherwise
valid service – Knowledge of absence irrelevant to validity
of service –
Close Corporations Act 69 of 1984
, 25.
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
CASE
NO: 2021/50947
REPORTABLE
OF INTEREST TO OTHER
JUDGES
REVISED
23.05.23
In the matter between:
MALVERN TRADING CC
APPLICANT
and
ABSA BANK LTD
RESPONDENT
Neutral
citation
: Malvern Trading CC V Absa
Bank Ltd (Case No: 2021/50947
[2023] ZAGPJHC 541 (23 May 2023)
JUDGMENT
Summary:
Clo
se Corporations -
Close Corporations Act, Act
69
of 1984
–
principle
of dual jurisdiction generally applicable to close corporations -
close corporation deemed to be resident at its registered
office or
principal place of business – reasoning in Bisonboard Ltd v
K
Braun Woodworking Machinery (Pty) Ltd
[1990] ZASCA 86
;
1991 (1) SA 482
(A) applicable
– legal position regarding jurisdiction over close corporations
unaffected by debate regarding the effect
of the 2008 Companies Act
on the dual jurisdiction principle applicable to companies under the
1973 Companies Act - recognition
of dual jurisdiction in respect of
close corporations a constitutional imperative to protect the right
of access to courts guaranteed
by section 34 of the Constitution of
the Republic of South Africa, 1996.
Close
Corporations Act, Act
69 of 1984,
s 25
– Uniform
Rule
4(1)(a)(v)
- service of process on registered office of close
corporation – no merit in contention that absence of close
corporation
from registered office invalidates otherwise valid
service – knowledge of absence irrelevant to validity of
service.
Domicilium citandi –
choice of domicilium citandi does not in itself exclude other
legitimate forms of service of process.
Question whether parties can
by agreement place limitation on form of service of process not
decided.
D
MARAIS AJ:
INTRODUCTION
[1]
The applicant, Malvern Trading CC (a duly incorporated close
corporation), applies
in this application for the rescission of an
order granted in favour of the respondent by default on 3 March 2022,
for the delivery
of a Mercedes Benz GLS 400d motor vehicle.
[2]
The respondent issued a notice of motion in this court on 26 October
2021 against
the applicant in which the return of the motor vehicle
was claimed. The respondent’s case was that it sold the motor
vehicle
to the applicant in terms of an installment agreement, that
the applicant failed to pay the agreed installments, and that the
agreement
was cancelled because the applicant failed to remedy its
default after proper demand was made.
[3]
The applicant’s citation included an allegation that the
applicant’s
registered address was situated at an address in
Windsor-West, Johannesburg and that the applicant had chosen an
address in Polokwane
as a
domicilium citandi
.
[4]
It appears from the record that the notice of motion was served at
the applicant’s
alleged registered address in Johannesburg, and
that an attempted service at the chosen
domicilium citandi
was
unsuccessful due to a problem with the description of the address.
[5]
An order by default was granted in this matter after the applicant
failed to
give notice of intention to oppose.
NO
DEFENCE ON THE MERITS OF THE CLAIM
[6]
It is admitted by the applicant that it failed to pay the agreed
installments
and that the applicant was in breach of the agreement.
It explained the default, which did not raise any defence, but
confirmed
that the respondent was justified in cancelling the
agreement and issuing the application for the return of the motor
vehicle.
BASIS
OF THE APPLICATION
[7]
The applicant’s complaint against the order is in essence that
the order
was erroneously sought and granted in its absence, and
ought to be rescinded in terms of Rule 42(1)(a) of the Uniform Rules
of
Court.
[8]
The grounds relied upon by the applicant for the contention that the
order was
erroneously sought and granted, were the following:
[8.1] It
was alleged that because the applicant was allegedly no longer
present at the address
where service was effected (its principal
place of business allegedly having moved to Polokwane), that service
at the registered
address was invalid;
[8.2] It
was contended that because the applicant chose an address as a
domicilium citandi
(being an address in Polokwane), the
respondent was not entitled to serve the application at the
applicant’s registered address
in Johannesburg; and
[8.3] It
was contended that as the applicant’s principal place of
business was allegedly
situated in Polokwane, this court did not have
jurisdiction over the person of the applicant as the respondent’s
cause of
action arose in Polokwane. In this regard it was contended
that the location of the applicant’s registered office in
Johannesburg
did not confer jurisdiction on this court.
THE
VALIDITY OF SERVICE ON THE REGISTERED ADDRESS
[9]
Section 25(1)
of the
Close Corporations Act, Act
69 of 1984 (“the
CCA”) requires a close corporation to have in the Republic a
postal address and an office to which
all communications and notices
may be addressed, subject to the provisions of subsection (2).
[10]
Section 25(2)
provides as follows:
“
(2) Any-
(a)
notice, order, communication or other document which is in terms of
this Act required or permitted to be served
upon any corporation or
member thereof, shall be deemed to have been served if it has been
delivered at the registered office,
or has been sent by registered
post to the registered office or postal address, of the corporation;
and
(b)
process which is required to be served upon any corporation or member
thereof shall, subject to applicable provisions
in respect of such
service in any law, be served by so delivering or sending it.
”
[11]
It is, therefore, clear that service by delivery to a close
corporation’s registered office in
principle constitutes valid
service. The fact that the close corporation is no longer present at
its registered office, as is alleged
by the applicant in this matter,
is clearly irrelevant.
[12]
There is indeed no requirement in the CCA that the registered address
must be the same address as its
principal place of business. In this
regard, the position of a close corporation is similar, if not
identical, to the position
of a company under the Companies Act, Act
61 of 1973, which similarly had no such requirement.
[13]
The only further requirement contained in section 25(2) is that
service must be effected otherwise
in accordance with the law, which
brings the provisions of Rule 4(1)(a)(v) of the Uniform Rules of
Court into play. This rule provides
that service can be effected:
“
in
the case of a corporation or company, by delivering a copy to a
responsible employee thereof at its
registered
office
or its principal place of business within the court’s
jurisdiction, or if there be no such employee willing to accept
service, by affixing a copy to the main door of such office or place
of business, or in any manner provided by law.”
[14]
The return of service in this matter reveals that the notice of
motion was served at the registered
address of the applicant, by
affixing it to the principal door, as no other manner of service was
possible. It was recorded by
the sheriff that the premises were
vacant. There was obviously no employee of the applicant present who
could accept service.
[15]
Consequently, valid service was effected in terms Rule 4(1)(a)(v).
[16]
The applicant’s founding affidavit, however, contains a
complaint that the respondent knew that
the applicant was no longer
present at the registered address (the sheriff having reported this
fact in his return) and that the
respondent was, therefore, not
entitled to serve there.
[17]
This complaint has no merit. The
rationale
behind a registered
address is indeed that third parties can with ease communicate with a
company or corporation or serve process
at the registered address.
This is in the context of the fact that it is often difficult for an
outsider to determine the locality
of a company or close
corporation’s principal place of business. Often, with small
companies or close corporations it will
be almost impossible to
determine where its principal place of business is situated. With
large enterprises having various branch
offices, the question arises
as to which office constitutes the principal place of business, a
question which is often difficult
for an outsider to answer. For this
reason, the legislature has deemed it necessary to determine that
service at a company or close
corporation’s registered address
is permitted.
[18]
The present matter illustrates the
rationale
behind these
provisions. The evidence is that the applicant was disarray for
various reasons, including regulatory action having
been taken
against it and its banking accounts having been closed by various
commercial banks. There was a suggestion by the applicant’s
counsel during argument that the applicant at some point ceased
operations. It is common cause that the respondent attempted to
serve
the application at the applicant’s chosen
domicilium citandi
but was unable to do so due to a problem with the address
description.
[19]
There is no
legal principle that service is invalidated because the plaintiff or
applicant has knowledge that the defendant or respondent
is no longer
present at the registered address or a chosen
domicilium
citandi.
To
contrary, the recognition of service on a chosen
domicilium
citandi
or registered address is fundamentally based on the acceptance that
such service is valid despite the absence of the party who
is served,
and despite knowledge on the part of the plaintiff or applicant that
the other party is absent.
[1]
[20]
Consequently, the first complaint raised by the applicant falls to be
rejected.
THE
VALIDITY OF ALTERNATIVE SERVICE WHERE A
DOMICILIUM CITANDI
WAS
CHOSEN
[21]
The applicant’s second point is that the respondent was
constrained to serve the application
at the applicant’s chosen
domicilium citandi
and that any other manner of service was
invalid.
[22]
The
applicant relied in this regard on the decision of a full bench of
this court in
Sheppard
v Emmerich
in
which it was held that if parties to an agreement agreed to a
specific method of service, they will be bound to effect service
in
the agreed manner.
[2]
[23]
The decision in
Sheppard
must be seen in the context of the
facts of that matter. It was held that where a defendant chose a
domicilium citandi
the service must be effected at the address
described in the chosen
domicilium citandi
and if the choice
of an address was accompanied by additional requirements, such
requirements must be met. Thus, where the chosen
address was the
address of a firm of attorneys occupying several floors of a
building, but the chosen address indicated that service
must be
effected on a specific floor, it was held that valid service could
only be effected at the stipulated floor. Furthermore,
to the extent
that the chosen address stipulated that the process must be directed
at a specific person, it was held that valid
service could only be
effected if the service was directed at that person. Mere service at
the attorneys’ office by affixing
it to the main door (situated
on another floor) was held to be invalid. The issue was simply
whether service in that matter was
effected in accordance with the
description of the agreed chosen
domicilium citandi
.
[24]
Given the context, I am not convinced that the
dictum in
Sheppard
was intended to cover a situation where the parties agreed that
service at the chosen address would be the
only
permissible
method, to the exclusion of other lawful methods. Due to the
conclusion that I have reached, it is not necessary to
decide whether
parties can effectively exclude otherwise valid methods of service in
favour of service exclusively on a chosen
domicilium
. This
question was not adequately canvassed before me, for the simple
reason that the applicant’s point was,
simpliciter
, that
the mere fact that a
domicilium citandi
was chosen, prevented
other forms of service.
[25]
The
applicant’s argument, in its simple form, has no merit. In law,
the choice of a
domicilium
citandi
does not prevent the use of other lawful methods of service.
[3]
[26]
Assuming that parties can by agreement limit the lawful methods of
service, the question is whether
the agreement
in casu
contains
such agreed limitation. The applicant, correctly, did not attempt to
develop its argument in this regard, as the relevant
clause in the
agreement clearly provided an option to the respondent to serve
process at the applicant’s chosen
domicilium citandi
, as
opposed to an obligation.
[27]
In the premises, the attack on the service of process in this matter
at the registered address of the
respondent is without merit and is
rejected.
THE
ISSUE OF JURISDICTION
[28]
On the facts before the court, it must be accepted that the applicant
had no actual place of business
in Gauteng at the time legal action
commenced in this matter. It is also clear that the respondent’s
cause of action also
arose outside this court’s jurisdiction.
[29]
Consequently, this application hinges entirely on the question of
whether in law the location of a
registered address of a close
corporation within the court’s jurisdiction confers
jurisdiction on the court. While there
is an abundance of authority
on this issue in relation to companies, there appears to be no
authority on this issue in relation
to close corporations.
[30]
The point of departure is the provisions of section 21 of the
Superior Courts Act, Act 10 of 2013,
which in essence re-enacted
section 19 of the Supreme Court Act 59 of 1959. This section provides
that a Division of the High Court
has jurisdiction over all persons
residing or being in, and in relation to all causes arising and all
offences triable within,
its area of jurisdiction and all other
matters of which it may according to law take cognizance.
[31]
The central question is whether the applicant is deemed to reside
within this court’s jurisdiction
due to the location of its
registered office for purposes of section 21 of the Superior Courts
Act.
[32]
In this
regard I shall embark upon an exercise similar to what was done in
Dairy
Board v John T Rennie & Co (Pty) Ltd
[4]
in relation to the 1973 Companies Act and
analyse
the relevant provisions of the CCA. I am mindful of the fact that the
reasoning in this judgment was only partially followed by
the then
Appellate Division in
Bisonboard
Ltd v K Braun Woodworking Machinery (Pty) Ltd
.
[5]
In this regard I will avoid the English Law notion that jurisdiction
is fixed by the valid service of legal process at a location
within
the jurisdiction of the relevant court, a notion that it not part of
our law.
[33]
The importance of the provisions of the CCA is that they may shed
light on the nature of the connection
between a close corporation and
its registered office, which may or may not support the conclusion
that a close corporation is
deemed to be resident at its registered
office.
[34]
The
preamble to the CCA states that the purpose of the Act is to provide
for the formation, registration, incorporation, management,
control
and liquidation of close corporations; and for matters connected
therewith. The purpose of the Act is important, as courts
are
enjoined to interpret legislation purposively, in accordance with the
following principles, as set out in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[6]
:
“
Interpretation
is the process of attributing meaning to the words used in a
document, be it legislation, some other statutory instrument,
or
contract, having regard to the context provided by reading the
particular provision or provisions in the light of the document
as a
whole and the circumstances attendant upon its coming into existence.
Whatever the nature of the document, consideration must
be given to
the language used in the light of the ordinary rules of grammar and
syntax; the context in which the provision appears;
the apparent
purpose to which it is directed and the material known to those
responsible for its production. Where more than one
meaning is
possible each possibility must be weighed in the light of all these
factors. The process is objective, not subjective.
A sensible meaning
is to be preferred to one that leads to insensible or unbusinesslike
results or undermines the apparent purpose
of the document. Judges
must be alert to, and guard against, the temptation to substitute
what they regard as reasonable, sensible
or businesslike for the
words actually used. To do so in regard to a statute or statutory
instrument is to cross the divide between
interpretation and
legislation; in a contractual context it is to make a contract for
the parties other than the one they in fact
made. The 'inevitable
point of departure is the language of the provision itself', read in
context and having regard to the purpose
of the provision and the
background to the preparation and production of the document.
”
[35]
As indicated above, section 25 of the CCA makes provision for the
registration of a registered office
for a Close Corporation, at which
address communication and notices may be sent or delivered, and where
process can be served.
This section creates a mechanism whereby the
outside world can have certainty regarding the official whereabouts
of a corporation,
where the corporation can be validly communicated
with and even where legal action can be commenced.
[36]
The legislature thereby created a mechanism whereby a corporation is
deemed to be present at its place
of business. The phrase “deemed
to be present” is used in a loose sense, as I am mindful that
the use of the concept
of “being present’ in section 19
of the Supreme Court Act and section 21 of the Superior Courts Act
has a history in
jurisprudence and is subject to further analysis,
which need not be undertaken in this matter. However, the clear
intention on
the part of the legislature that a corporation must be
deemed to be present at its registered office is an important
consideration,
which supports the legal fiction that a corporation
must be deemed to reside at its registered office.
[37]
Section 15(3) of the CCA provides that upon failure to register an
amended founding statement, the
Registrar may send a notice to comply
by registered mail to the corporation, and may upon failure to
comply, impose a monetary
penalty by written notice on the
corporation. Importantly section 13(3)(d) gives the Registrar the
right to transmit the penalty
notice to the clerk of the magistrates’
court in which the corporation’s registered office is situated,
who must record
it. Such recordal has the effect of a civil judgment
against the corporation. The CCA thereby provides territorial
jurisdiction
to the magistrates’ court where its registered
office is situated in this situation.
[38]
Section 15A provides that a corporation must file an annual return,
confirming the information a corporation
is obliged to provide in
terms of the Act, which must be kept at the registered office and
must be open for inspection in accordance
with section 16. Section 16
provides that a copy of the corporation’s founding statement
and proof of registration, which
is open for inspection to the public
during business hours, must be kept at its registered office.
[39]
In terms of section 44(2) of the CCA an association agreement, and in
terms of section 44(3) a minute
book in which resolutions of members
are recorded, must be kept at the registered office. The same
applies, in terms of section
49(4), to any order issued in terms of
that section (providing remedies for unfairly prejudicial conduct).
Section 57(4) obliges
a corporation to keep its accounting records at
either its place of business, or registered office.
[40]
These mandatory provisions enjoin a corporation to house those
instruments, which are fundamental to
its existence and functioning,
being the registered founding statement, the minutes of members’
resolutions and accounting
records (the latter being more flexible)
at the corporations registered office. I am of the view that this is
also strong support
for the notion of deemed residence at the
registered office.
[41]
Section 69 of the CCA provides that if a demand for payment was
delivered to a close corporation’s
registered office, the close
corporation would upon failure to pay, be deemed to be unable to pay
its debts. This can support an
application for the liquidation of a
close corporation.
[42]
In my view
the provisions of the CCA regarding the powers of individual members
also have an important bearing on the issue at hand.
Each member of a
close corporation in principle has the entitlement to take part in
the management of the corporation, has equal
rights regarding the
management of the corporation and has equal rights to represent the
corporation in the carrying on of the
business.
[7]
[43]
The notion of central control in the case of a close corporation is,
therefore, considerably eroded,
with the result that it may be
difficult, if not impossible, for an outsider to determine where the
corporation’s central
control and principal place of business
is situated. This situation may be compounded where the members are
at loggerheads with
each other, which is not uncommon.
[44]
In my view the statutory lessening of central control in the case of
close corporations is an important
consideration in deeming a close
corporation to be resident at its registered office.
[45]
Section 7 of the CCA provides that,
for the purpose of that Act
,
any High Court and any magistrates’ court within whose area of
jurisdiction the registered office or main place of business
of a
close corporation is situated, shall have jurisdiction.
[46]
On a literal interpretation, section 7 seemingly only confers
jurisdiction on a court
for purposes of
the CCA, in other
words, in matters or remedies provided for or regulated by the Act.
The section does not purport to confer territorial
jurisdiction on a
relevant court generally in all causes of action.
[47]
This court is, however, obliged to interpret section 7 purposively in
accordance with the principles
set out above. The language used in
section 7 seems to indicate a limitation to the matters in which a
court is granted territorial
jurisdiction. In the process, the
legislature conferred territorial jurisdiction on the relevant court
over a close corporation
in a variety of matters of far-reaching
consequence, not the least in applications for the liquidation of
close corporations. Clearly
the legislature had intended a close
connection between a close corporation and its registered office.
[48]
Due to the conclusion I have reached in this matter, it is not
necessary to decide whether on a proper
interpretation of section 7
of the CCA, despite the language used in the section, it confers
jurisdiction on the High Court and
magistrates’ court within
whose area a close corporation’s registered office is situated
generally
. However, the closeness of the connection created by
this section is an important consideration to be brought into
account.
[49]
The authors
of
Erasmus:
Superior Court Practice
[8]
is of the opinion that in this regard the same principles apply to
close corporations that applied to companies prior to the
commencement
of the
Companies Act, 2008
.
[50]
The
question in this matter is identical to the issue that had to be
decided by the then Appellate Division in
Bisonboard
Ltd v K Braun Woodworking Machinery (Pty) Ltd
[9]
in relation to companies. In that matter the Appellate Division held
that for jurisdictional purposes a company is deemed to have
dual
residency at its registered office and place of business, where these
locations differ. This gave rise to the dual jurisdiction
principle,
with different courts having jurisdiction over a company at the same
time.
[51]
The notion
of dual jurisdiction became the subject matter of a judicial debate
after the promulgation of the 2008
Companies Act.
[10
]
On the one hand, some judgments held that the 2008 Act abolished the
dual jurisdiction principle and held that only the court where
the
registered office of the company is situated retained jurisdiction.
Other judgments retained the dual jurisdiction principle.
[52]
In my view
the question of jurisdiction over close corporations is entirely
unaffected by the debate regarding the effect of the
2008
Companies
Act on
the jurisdiction over companies. In
Cooper
NO and others v Market Fisheries (Oudtshoorn) CC
[11]
the provisions of the 2008
Companies Act were
peripherally mentioned
in connection with the dual jurisdiction principle in an application
for the liquidation of a close corporation.
[12]
It is important to note that this case did not involve the dual
jurisdiction issue, as both the registered address and the principal
place of business were situated within the court’s
jurisdiction. The issue that was argued was whether the statutory
demand
provided for in
section 69
of the CCA could only have been
delivered to the close corporation’s registered office, or also
had to be delivered to the
principal place of business. The learned
judge succinctly and, with respect, correctly rejected the argument
that the demand of
necessity also had to be delivered to the
principal place of business, relying on
section 69
and relevant
authority.
Cadit
quaestio.
However, it seems that the respondent unjustifiably drew the court
into a dual jurisdiction inquiry, to which the court responded
by way
of an additional opinion, which was clearly
obiter
.
The court ultimately found that the dual jurisdiction principle
applied to applications for the liquidation of close corporations,
due to the fact that applications for liquidation of close
corporations are still regulated by the relevant liquidation
provisions
of the 1973
Companies Act.
[13
]
Whilst I am of the view that the
obiter
finding
that dual jurisdiction is applicable to close corporations in
liquidation proceedings was correct, I am not convinced that
that
dual jurisdiction is derived from the applicability of the
liquidation provisions in the 1973
Companies Act to
close
corporations. Liquidation matters are simply regulated by
section 7
of the CCA which expressly provides for dual jurisdiction. This
section was not referred to by the learned judge, perhaps because
the
matter did not involve the issue of dual jurisdiction as such, but
rather the validity of the demand preceding the liquidation
application. Importantly, the question whether dual jurisdiction
applies to close corporations due to the application of the 1973
Companies Act does
not assist in resolving the issue in this matter,
which is not a liquidation application.
[53]
The learned
judge then made the following remark:
[14]
“
It
is also my respectful view, that sight should not be lost on the
objectives of the New 2008 Act with reference to the registered
office of a company and more specifically to pre-existing companies
that have previously conveniently chosen their registered address
as
that of their auditors for example, and which is not the same address
as that of the administrative office of the company. In
my view, it
is desirable that where such addresses are different, that companies
change their registered address in terms of section
23(3) of the 2008
Companies Act so
that this would give certainty to
transacting
third parties of the company.”
[54]
In the context of the real issue at hand, it would appear to me that
this remark was a side-remark
which was unconnected with both the
ratio decidendi
and the
obiter dictum
of the matter.
The court merely implored companies to ensure that they complied with
section 23(3) of the 2008
Companies Act. The
remark does not seem to
be relevant to close corporations.
[55]
I am of the
view that the provisions of the 2008
Companies Act relating
to the
registered office of a company
[15]
(which are clearly inconsistent with the provisions of the CCA
[16]
)
are not relevant to the present enquiry.
[56]
In the premises I agree with the authors of
Erasmus
that the
dual jurisdiction principle that applied to companies prior of the
2008
Companies Act also
apply to close corporations. Additionally, I
find that the legal position regarding close corporations is
unaffected by the promulgation
of the 2008
Companies Act.
[57
]
In any event, in the present matter the dual jurisdiction debate does
not avail the applicant, as on both
interpretations of the effect of
the 2008
Companies Act, the
location of the registered office confers
jurisdiction on the relevant court.
CONSTITUTIONAL
CONSIDERATIONS
[58]
I am of the view that there is also a constitutional consideration
relevant to this issue. As this
was not raised or argued before me, I
shall deal with this aspect briefly.
[59]
In terms of
section 34 of the Constitution
[17]
litigants are guaranteed access to the courts in the resolution of
disputes. The question of the court’s jurisdiction and
the
process initiating the
lis
(including
the manner of service of process) are fundamental to a litigant’s
access to the courts. The facts of the present
matter illustrate that
if the respondent had to exclusively rely on the location of the
applicant-close corporation’s principal
place of business to
determine which court has jurisdiction, it may well have been denied
access to the courts entirely. As indicated
above, the applicant was
dysfunctional and may well not have had a place of business at the
time legal action commenced herein.
[60]
It would be a startling consequence if a plaintiff or applicant would
effectively be non-suited because
it is unable, through no fault on
its part, to discern the principal place of business of a defendant
or respondent. The situation
can be troublesome where a corporation
has more than one place of business, and the plaintiff or applicant
must divine which of
these places is the “principal place of
business” of the corporation.
[61]
As indicated above, each member of a close corporation in principle
has the entitlement to take part
in the management of the
corporation, has equal rights regarding the management of the
corporation and has equal rights to represent
the corporation in the
carrying on of the business. This eroded the notion of central
control in the case of a close corporation,
making it even more
difficult to determine the location of the corporation’s
principal place of business.
[62]
In my view, to guarantee the access to court a litigant is entitled
to by virtue of section 34 of the
Constitution, it is imperative that
a plaintiff or applicant should be able to rely on the dual
jurisdiction principle in all matters
involving close corporations.
CONCLUSION
ON THE ISSUE OF JURISDICTION
[63]
Consequently, I find that this court had jurisdiction to grant the
order in the present matter.
COSTS
[64]
The applicant has agreed to pay costs on the attorney and client
scale.
[65]
The applicant clearly has no defence to the respondent’s claim
for delivery of the motor vehicle.
Upon learning of the granting of
the order for delivery in this matter, the applicant failed to
deliver the vehicle to the respondent
as he was contractually obliged
to do. Instead, the applicant brought the present application for
rescission of the order.
[66]
This application is clearly a reprehensible delaying tactic,
justifying a special costs order.
ORDER
[67]
In the premises I make the following order:
“
The application is
dismissed with costs on the attorney and client scale.”
DAWID
MARAIS
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
23
MAY 2023
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email and by being uploaded
to CaseLines. The date of this judgment is deemed to be 23 May 2023.
Appearances:
Appearance
for Applicants:
T
M P POOE
Instructed
by:
KGOPE
ATTORNEYS
Appearance
for Respondent:
ADV
C DENISHAUD
Instructed
by:
MOTHIBI
INCORPORATED
Date
of hearing: 9 May 2023
Date
of Judgment: 23 May 2023
[1]
Hollard's
Estate v Kruger
1932 TPD 134
;
United
Building Society v Steinbach
1942 WLD 3
;
Shepard
v Emmerich
2015 (3) SA 309
(GJ) par 6
[2]
Shepard
v Emmerich
(
supra)
par 4
[3]
See
Sandton
Square Finance (Pty) Ltd and Others v Biagi, Bertola and Vasco and
Another
1997
(1) SA 258
(W)
[4]
Dairy
Board v John T Rennie & Co (Pty) Ltd
1976
(3) SA 768 (W) 771B
[5]
Bisonboard
Ltd v K Braun Woodworking Machinery (Pty) Ltd
1991
(1) SA 482 (A)
[6]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) 603 to 604
[7]
See
section 46 of the CCA.
[8]
See
the commentary under section 21 of the Superior Courts Act.
[9]
Bisonboard
Ltd v K Braun Woodworking Machinery (Pty)) Ltd
1991
(1) SA 482 (A)
[10]
See
Sibakhulu
Construction (Pty) Ltd v Wedgewood Village Golf Country Estate (Pty)
Ltd (Nedbank Ltd Intervening)
2013 (1) SA 191
(WCC),
Burmeister
and Another v Spitskop Village Properties and Others
[2015] ZAGPPHC 1094 (21/09/2015),
Lonsdale
Commercial Corporation v Kimberley West Diamond Mining Corporation
[2013] ZANCHC 11
(17/5/2013),
Wild
& Marr (Pty) Ltd v Intratek Properties (Pty) Ltd
2019
(5) SA 310 (GJ).
[11]
Cooper
NO and others v Market Fisheries (Oudtshoorn) CC
2023
JDR 0790 (WCC)
[12]
See
par 20.
[13]
See
par 19. The reasoning being that dual jurisdiction applied to
companies under the 1973
Companies Act.
[14]
Par
20.
[15]
Section
23(3).
[16]
Section
25.
[17]
The
Constitution of the Republic of South Africa, 1996
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