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IN THE COMPANIES TRIBUNAL OF SOUTH AFRICA

Case No: CT001JAN2018

In the matter between:

ENOCH VUYO NANTISE                                                                                       APPLICANT

AND

PATRICK MONDE SIMANI                                                                           RESPONDENT

Presiding Member of the Companies Tribunal: ISHARA BODASING

Date of Decision: 26 February 2018

DECISION (Reasons and an Order)

1.    INTRODUCTION

1.1 On or about 20 June 2017, Enoch Vuyo Nantise (Applicant) and Patrick Monde Simani (Respondent) became business partners and equal shareholders in Mpafana Projects (Pty) Ltd. (“MP”), a company duly incorporated in accordance with the company laws of South Africa with registration number 2017/211045/07, having its registered address at 4213 Ndleko Street, Mfuleni Ext. 5
, Cape Town, Western Cape, 7100.

1.2 Applicant seeks the removal of Respondent as Director of MP, presumably in terms of S71 (8) of the Companies Act 71 of 2008 (“the Act”), alleging that Respondent has been neglectful or derelict in the performance of his duties as a Director. The application was made on form CTR142, with Applicant deposing to the founding affidavit.

1.3 On 08 February 2018 Applicant applied for a default order in terms of Regulation 153 of the Companies Regulations[1] (“the Regulations”), in respect of the relief sought in the initial application.

2.    BACKGROUND

2.1 For practical reasons, the parties agreed that Respondent would manage their business banking account that had been opened with FNB. A transaction tracking system was installed on Applicant’s mobile telephone so that he would be alerted in the event of any unusual movement of funds.

2.2 Applicant invested the capital to activate their business, while Respondent was more operational in his contribution.

2.3 What followed, according to Applicant, is that every time a customer deposited a large sum of money into their joint account, Respondent would unilaterally transfer most of it into his personal bank account. Applicant has laid a criminal charge against Respondent.

2.4 As a precaution, Applicant has taken over the management of the bank account, but Respondent will still have access to it because, according to the bank, he is still a director of the company.

2.5 As a result of this situation, Applicant has had to hold back on any further business engagements. He therefore seeks relief from this Tribunal.

3.    ISSUES

3.1 I am compelled at the outset to deal with the fact that Respondent has not participated in these proceedings, and appears to not even be aware thereof.

3.2 Applicant served notice of this application on Respondent via registered post, proof of which was attached to the application for default judgment. On perusal thereof, it is clear that Respondents full address, as stated in the application and other attachments, has not been captured. The name of the town and / or post office is not cited. Furthermore, the handwriting on the registered slip is not clearly legible, leading to some confusion as to the address.

3.3 There is no other proof that Respondent did indeed receive notice of the application.

4.    APPLICABLE LAW

4.1 Companies Regulation 142 of 2011 provides for Applications to the Tribunal in respect of matters other than complaints

…

(2)      The applicant must serve a copy of the application and affidavit on each respondent named in the application, within 5 business days after filing it.

4.2 Companies Regulation 153 provides for default orders:

…

(2)  On an application in terms of sub-regulation (1), the Tribunal may make an appropriate order––

(a)           after it has heard any required evidence concerning the motion; and

(b)          if it is satisfied that the notice or application was adequately served.

4.3 Companies Regulation 7 provides for Delivery of documents:

…

(3)      If, in a particular matter, it proves impossible to deliver a document in any manner provided for in the Act or these regulations––

(a) if any person other than the Tribunal is required to deliver the document, the person may apply to either the Tribunal or the High Court for an order of substituted service;

5.    EVALUATION

5.1 The merit of Applicant’s initial application for relief is over-shadowed by the fact that Respondent is apparently unaware of these proceedings. Therefore I focus this decision on the importance of service.

5.2 In the case of Masetlha v President of the Republic of South Africa and Another[2], Ngcobo J stated:

“The procedural aspect of the rule of law is generally expressed in the maxim audi alteram partem principle ('the audi principle'). This maxim provides that no one should be condemned unheard. It reflects a fundamental principle of fairness that underlies or ought to underlie any just and credible legal order. The maxim expresses a principle of natural justice. What underlies the maxim is the duty on the part of the decision-maker to act fairly. It provides an insurance against arbitrariness...this principle is triggered whenever a statute empowers a public official to make a decision which prejudicially affects the property, liberty or existing right of an individual.”

5.3  The Tribunal has been seized with the issue of proper service. In the case of Growthpoint Properties Ltd v Growth Point Mining (Pty) Ltd[3], it was decided that a matter could not be considered until it has been established that proper service was effected. It was also noted as important that Respondent’s non- participation in the proceedings should not be ascribed to ignorance thereof, due to non-service on it by the Applicant. In the case of Skybridge CC and Another v Skybridge Investments (Pty) Ltd and Another[4] it was emphasised that service of notice is crucial to the rules of natural justice. Both these applications were not successful as the Tribunal found that there had not been proper service of the notice on the Respondent.

5.4 
In a situation such as the one in casu, it is easily rectified by the Applicant either typing out Respondent’s address, or writing more clearly and legibly.

5.5 Furthermore, there are other options that can be explored. If service of an application proves difficult to be effected in terms of the provisions as stipulated legislatively or in terms of the Uniform Rules, the Applicant may apply to the Tribunal for an order of substituted service in terms of regulation 7(3)(a). The Applicant has to show that all information, which can assist in locating the Respondent, has been explored, and must enunciate the actual steps taken to ascertain the location of the Respondent. The Tribunal may then make an order for substituted service as it deems fit, such as publication in a newspaper, Government Gazette or even social media.

5.6 Finally, this Tribunal in Tyris Construction (Pty) Ltd v Tyris Construction Projects (Pty) Ltd[5] granted an order for substituted service by way of publication of the Applicant's intended name dispute application in two local English newspapers circulating in the area in which the Respondent resides or trades, as well as publication in the Government Gazette.

6.    FINDINGS

6.1  As mentioned earlier, the merit of Applicant’s case is moot in the face of non-service on the Respondent.

6.2 In light of the fact that it is not clear on Applicant’s papers whether or not the other Director of MP is aware of this application, so that any gaps of unfairness in the procedure are plugged, the Tribunal is not satisfied that Applicant has exhausted all avenues to notify Respondent.

6.3 There has not been satisfactory compliance with the provisions of Companies Regulation 153(2)(b). The Applicant’s application for default judgment is therefore refused.

7. ORDER

The application is refused.

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ADV. ISHARA BODASING

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