R Miller and Others v Nafcoc Investment Holding Company Ltd and Others

Serveco (Pty) Ltd was finally liquidated in May 2006 at the instance of its major shareholder, Nafcoc Investment Holding Company Ltd. In 2008, acting on behalf of Serveco’s joint liquidators, a professional liquidator (Miller) applied ex parte to the Master of the High Court for an enquiry into Serveco’s affairs under sections 417 and 418 of the Companies Act 61 of 1973. The Master authorised the enquiry and appointed a commissioner. Nafcoc and certain former directors/employees of Serveco sought urgent relief in the South Gauteng High Court to prevent their examination, to set aside the Master’s and Commissioner’s decisions, and to interdict Miller from attending the enquiry. The High Court granted the relief and ordered Miller and the joint liquidators to pay costs personally. Miller and the joint liquidators appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order dismissing the application with costs (including urgent application costs and counsel’s fees). The cross-appeal was dismissed with costs.

The case clarifies the scope and operation of enquiries under sections 417 and 418 of the Companies Act 61 of 1973, confirming that the Master may order an enquiry without any formal application and may delegate control of the enquiry to a commissioner. It affirms that liquidators may delegate ministerial functions in the conduct of enquiries, and that deregistration does not retrospectively invalidate steps lawfully taken before deregistration, especially where the company is later restored to the register.