Degueldre v Companies and Intellectual Property Commission

The appellant, Jean-Francois Eric Christian Degueldre, was the sole member of Time is Money Finance CC, a close corporation. The close corporation was deregistered on 26 August 2016 for failing to submit annual returns. The close corporation was a proven creditor in the insolvent estate of one Paul Matthew Machin, claiming over R1.27 million, and also had a claim of R583,100 against a firm of attorneys. After deregistration, its assets would have become bona vacantia. The appellant applied under section 83(4) of the Companies Act 71 of 2008 for: (1) a declaration that the dissolution was void; (2) restoration of the close corporation's name to the register; and (3) an order that the assets were no longer bona vacantia and revested in the close corporation. The respondent, the Companies and Intellectual Property Commission (CIPC), did not oppose the application. An intervening party, Mr Renenthren Padayachee (an attorney representing foreign peregrine creditors of the Machin estate), opposed the application. The CIPC administratively restored the close corporation in error. The court a quo (Le Roux AJ) dismissed the main application on the ground that the court lacked jurisdiction. The appellant appealed, and the appeal was limited to the question of jurisdiction and the non-joinder of the Minister of Finance.

• Whether the non-joinder of the Minister of Finance and the Department of Public Works is fatal to an application for restoration of a dissolved close corporation under section 83(4) of the Companies Act 71 of 2008.
• Whether the Western Cape Division of the High Court had the necessary jurisdiction to adjudicate an application for restoration where the CIPC's offices are situated in Gauteng and the close corporation had been dissolved at the time of the application.

1. The appeal against the court a quo's finding on lack of jurisdiction succeeded. 2. The appellant was granted leave to serve the papers on the Minister of Finance within 21 days. 3. The appellant was granted leave to re-enrol the matter on the same papers (duly supplemented) for further consideration before the same court. 4. The appeal against the dismissal order was postponed sine die. 5. No order as to costs was made. 6. The intervening party's condonation application for the late filing of his appeal was dismissed with costs on an attorney and client scale.

When a dissolved company or close corporation seeks restoration under section 83(4) of the Companies Act 71 of 2008, and the company's assets have become bona vacantia to the state, the state (represented by the Minister of Finance and the Department of Public Works) is a necessary party with a direct and substantial interest. The state must be formally joined unless it waives its right to be joined and undertakes to be bound by the court's decision. The requirements for notice to Treasury were not abolished by the new Companies Act but remain extant, as confirmed by CIPC Practice Note 6 of 2012. Additionally, the High Court has jurisdiction under section 21 of the Superior Courts Act read with common law principles where the business of the deregistered entity was situated in its area of jurisdiction and the applicant's rights were affected within that area, and considerations of convenience and common sense support such jurisdiction.

The court observed that Binns-Ward J in the Peninsula Eye Clinic case was referring to a 'curious omission' in the statutory scheme regarding notice to Treasury only in the context of an administrative application under section 82(4), not a court application under section 83(4). The court also noted that in practice, the state ordinarily does not oppose such declarations, because its policy is not to enrich itself at the expense of those interested in a deregistered company.

This case clarifies that: (1) the requirement to join the Minister of Finance/Treasury in court applications under section 83(4) of the Companies Act 71 of 2008 survived the transition from the 1973 Companies Act to the 2008 Act, and is not limited to administrative reinstatements under section 82(4); (2) the Western Cape High Court has jurisdiction over restoration applications even when the CIPC is based in Gauteng, applying common law jurisdictional principles including convenience and the location of the affected business; and (3) the decision provides authoritative guidance on the procedural requirements for restoration of deregistered close corporations and companies in South African law.