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IN THE COMPANIES TRIBUNAL OF SOUTH AFRICA

 

Case No: CT00303/ADJ/2020

 

 

In the matter between:

 

 

Gavin Mc Faden                                                                    Applicant

 

and

 

Commissioner of Companies and Intellectual

Property Commission                                                           Respondent

 

 

Presiding Member of the Tribunal:     P.A. Delport

Date of Decision:                                 1 October 2020

 

 

DECISION

 

 

INTRODUCTION

 

 

[1]     The applicant applies for a default order against the respondent in respect of a “review application after being served with same, failing which the Applicant would be entitled to apply for a default order as provided for in regulation 153(1) of the Regulations Companies Act 71 of 2008 (“Companies Act” / “Act”).”

 

[2]     Regulations 142 and 153 of the Companies Act (GNR 351 of 26 April 2011) (“Companies Act regulations” / “regulations”) inter alia regulate an application to the Companies Tribunal (“Tribunal’) as well as the application for a default order under certain circumstances.

 

[3]     The jurisdiction of the Tribunal in this matter is alleged to be in terms of section 172(1) of the Companies Act.

 

BACKGROUND

 

[4]     The applicant, according to the supporting affidavit of the CTR 142 is Gavin McFaden (apparently the correct surname is McFadyen) “an adult businessman residing at 276 Marine Drive, Oceanview, Bluff, 4052. I am the sole director (sic) of Garlic Man-Durban CC, a close corporation incorporated in terms of the laws of the Republic of South Africa having its registered address at 82 Cluver Crescent, Bluff, 4052.” It is trite that a close corporation does not have director/s.

 

[5]     The respondent is the Commissioner of the Companies and Intellectual Property Commission (“CIPC”), established in terms section 186 with the functions as in section 187 of the Companies Act. The application concerns the powers of the CIPC in terms of s 171 of the Act

 

[6]     The application concerns the powers of the CIPC in terms of s 171 of the Act

 

[7]     The applicant applied (para 59 of the CTR 142 supporting affidavit) on which the default application is based (para 4 of the CTR 142 supporting affidavit):

 

“This is an application to review the compliance notices issued by the Commissioner of the Companies and Intellectual Property Law (sic) Commission ("the Commissioner") pertaining to the reinstatement of a close corporation being, Garlic Man CC with registration number: 1 998/030467/23, with its registered place of business being at 14 Flamboyant Street, Brackendowns, Alberton ("the Close Corporation").”

 

[8]     Garlic Man CC was finally deregistered on 3 February 2018 due to non-submission of annual returns.

 

[9]     Garlic Man CC had previously transferred its “activities, goodwill and reputation” to Garlic Man – Durban CC according to the re-instatement affidavit (para 23).

 

[10] Due to the fact that Garlic man still “held and still holds assets and economic value, including the rights in and to the reputation and goodwill relating to the 'GARLIC MAN' trade mark used In relation to the manufacture and sale of various garlic and ginger products” (para 25 of the re-instatement affidavit) the applicant as interested person applied to the respondent on or about 22 March 2019 in terms of section 82(4) of the Act, presumably complying with the “prescribed manner and form” for an application of this nature as prescribed by reg 40 (7), for re-instatement of (the registration) Garlic Man,

 

[11] This application was refused by the respondent and various COR 40.5 notices, indication deficiencies in the application were sent to the applicant on 25 March 2019, 11 April 2019 and 13 May 2019.

 

[12] An application was launched with the Companies Tribunal on CTR 142 for a review of the purported compliance notices in terms of section 172(1) of the Companies Act.

 

[13] The notice was apparently duly served on the respondent who unsurprisingly did not respond to “the review application” within the 20 business day period as required in reg 143 and hence the application that: “...the Applicant hereby applies in terms of regulation 153(1) of the Regulations for a default order as against the Respondent, and that the Honourable Tribunal orders the Commissioner of the Companies and Intellectual Property Commission to reinstate the close corporation Garlic Man CC of registration number 1998/030467/23 in terms of Section 82(4) of the Companies Act, 2008.”

 

ISSUES and APPLICABLE LAW

 

[14] This is a strange and confusing application.

 

[15] There are two distinct sets of provisions in the Companies Act:

 

15.1     In respect of deregistration, the effect thereof and the administrative re- registration (or re-instatement of registration of a company and a close corporation) the position is regulated by section 82(4), regulation 40 (7) and Practice Note 6 of 2012; and

 

15.2     The CIPC has the power under section 171 of the Act to issue a compliance notice to any person whom the “Commission ...on reasonable grounds believes—

 

(a)      has contravened this Act; or

(b)      assented to, was implicated in, or directly or indirectly benefited from, a contravention of this Act, unless the alleged contravention could otherwise be addressed in terms of this Act by an application to a court or to the Companies Tribunal.”

 

[16] Section 172 (1) determines the jurisdiction of the Tribunal as follows:

 

“Any person issued with a compliance notice in terms of this Act section 171 may apply to the Companies Tribunal in the case of a notice issued by the Commission, or to the Takeover Special Committee in the case of a notice issued by the Executive Director, or to a court in either case, to review the notice within—

 

(a)      15 business days after receiving that notice; or

(b)      such longer period as may be allowed on good cause shown.”

 

[17] The question then would be if the COR40.5 notices issued by the CIPC were compliance notices. If the definition in section 171 is applied, it is clear that a request for further information can by no stretch of the imagination fall within the prescripts of section 171 (a) and/or (b).

 

[18] The Tribunal is a creature of statute and derives its powers from the Act. Specifically, section 195 (1)(a) provides that the Tribunal may –

 

"(a) adjudicate in relation to any application that may be made to it in terms of this Act, and make any order provided for in this Act in respect of such an application.": see also Myeni v CIPC CT006MAR2017 delivered on 29 June 2017.

 

[19] It therefore follows logically that if the COR40.5 notices are not compliance notices, the Tribunal has no jurisdiction to grant the relief applied for.

 

FINDING and ORDER

 

[20] The application for a default order for the Commissioner of the Companies and Intellectual Property Commission to reinstate the close corporation Garlic Man CC of registration number 1998/030467/23 in terms of Section 82(4) of the Companies Act, 2008 is therefore refused.

 

[21] No order is made to costs.

 

 

P.A. DELPORT

COMPANIES TRIBUNAL: MEMBER

 

DATE: 1 October 2020

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