IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

CASE NO: 9543/2009

In the matter between:

And

MATOJANE, AJ

Introduction
[1] The applicants, who are employees of Absa Bank Limited, seek an order that:-
1.     The order granted by fourth respondent on 8 April 2009, authorizing the warrants of arrest in respect of the applicants, be set aside;
2.	Any warrant that had been issued in pursuance of such order, be set aside;
3.	First, second and third respondents be interdicted from issuing any warrant of arrest pursuant to such order.

[3] First, second and third respondent do not oppose the relief sought against fourth respondent's order pertaining to the warrants of arrest and abide the decision of the Court, they however oppose the cost order sought and in turn seek a cost order against the applicants. Fourth respondent has also indicated that he will abide the decision of the Court.

[4] The first, second and third respondent are duly appointed joint liquidators of a company called Eveology Network (Proprietary) Limited which was placed under provisional and subsequent final liquidation on 8 June 2005, at the instance of one Sharon Holmes, a director and 50% shareholder of the company.

[5] The undisputed facts, as they appear from the affidavits filed, are shortly as follows. Eveology was indebted to Absa in an amount R2 704 800.21 arising from certain money lending transactions concluded between those two parties. Absa instituted an action against Sharon Holmes and one Linda Remke, in their capacities as sureties in respect of the indebtedness of Eveology towards Absa for the payment of the said amount. Holmes and Remke defended the action, and instituted a counterclaim against Absa. This claim was based on alleged cession by Eveology of a claim for damages against Absa, arising from Absa's alleged breach of contract concluded between Eveology and Absa.

[6] Absa contended that, prima facie, this cession constituted an improper disposition and a collusive transaction, which should be set aside.  The cession had allegedly been effected verbally, one month before the provisional liquidation of Eveology. This view was shared by the liquidators.

[8] At this meeting, an affidavit deposed to by one Barnaschone, an attorney who alleged that he represented certain proved creditors, was placed before the presiding officer and an application was made in support of the closing of the meeting, without the enquiry being conducted, on the basis that, first of all, creditors that Barnaschone represented wished to instruct the liquidators to appoint different attorneys based on Sandenberg Nel Haggard conflict of interest and, secondly, to request the liquidators to convene an enquiry in terms of section 415 of the Company's Act, 1973 to interrogate various applicable Absa Bank employees in relation to Absa contribution to the demise of Eveology.

The authority of the Liquidators to issue subpoena

[11] The magistrate is authorized by Section 414(2)(a) of the Companies Act to subpoena any person:-
(a)    who is known or on reasonable grounds believed to be or to have been in possession of any property which belongs or belonged to the company or to be indebted to the company , or who in the opinion of the Master or such other officer may be able to give material information concerning the company or its affairs, in respect of any time before or after the commencement of the winding-up, to appear at such meeting , including any such meeting which has been adjourned, for the purpose of being interrogated.
[12] It is for the presiding officer to form the opinion that the proposed witness "may be able to give material information concerning the company or its affairs" before he could subpoena any person. In his reasons for his ruling it is clear that the magistrate met the requirements of section 414 of the Companies Act. The magistrate was entirely within his rights to issue a subpoena and based on the return of service, to issue a warrant of arrest in terms of section 66(1) of the Insolvency Act.

[14] In prayer 2 of the notice of motion, applicants seeks an order that any warrant of arrest that had been issued be set aside. As correctly stated by Mr Woodland SC for the respondents, this being a review of the Magistrate, the applicant should have brought himself within the ambit of the Promotion of Administrative Justice Act 3 of 2000 as it was solely the statutory function of the presiding officer.

[15] Counsel for applicant amended prayer 3 in his argument by saying that the liquidators should be ordered not to cause the warrant to be issued. Section 66(1) of the insolvency Act which applies through section 416 of the Companies act provides that if a person summoned under section 64 fails to appear at a meeting of creditors in answer to the summons, the officer presiding at such meeting may issue a warrant authorizing any member of the police force to apprehend the person summoned and bring him before the presiding officer. It follows that the liquidators do not have the statutory power to cause the warrants of arrest to be issued.

[16] In view of my finding that the relief that applicant seeks is not competent against the liquidators, I find no possible basis upon which they can be ordered to pay the special punitive costs order prayed for by the applicants.

[17] In the result the following order is made;