This is an application for a declaratory order.
This court is invited to declare that Cosira Communications Global (first respondent) and Cosira South Africa (Pty) Ltd (second respondent) which was previously known as Cosira International (SA) (Pty) Ltd are one and the same entity.
To make such declaration, this court is asked to lift the veil of corporate personality on the grounds that such corporate personality has been used as a device to cover up fraud or improper conduct.
It is contended, on behalf of the applicant, that although the first and second respondents have distinct and separate legal personas, they are in fact one economic entity.
The first and second respondents strenuously resist the order sought and argue that there is no factual or legal basis for an order that the liabilities of one corporate entity be deemed to be liabilities of another.
The first and second respondents aver that the order sought is not legally competent and that where the corporate veil is lifted the court must effectively look behind the corporate veil to establish the shareholders of the corporate entity and then attach such liability to them.
The respondents pray that the application be dismissed for lack of merit.
Background
The facts that are common cause are these:
In November 2012, Intro-wise Catering (Pvt) Ltd (applicant) entered into a contract with Cosira South Africa (Pty) Ltd (second respondent) in terms whereof the applicant was to provide catering, housekeeping, and laundry services to Cosira South Africa (Pty) Ltd (the 2nd respondent) at the mining site of Zimbabwe Platinum Mines (Pvt) Ltd (third respondent).
The said agreement was to run continuously from November 2012 until termination by either party giving the appropriate notice in accordance with the agreement.
As a result of the agreement, the applicant supplied catering, housekeeping, and laundry services to the second respondent up to May 2013.
Invoices were raised regularly and a balance of US$155,144=22 remained outstanding for the period up to the end of May 2013.
It was the belief and understanding of the parties that the applicant was being sub-contracted to provide service to a company which had a running contract with Zimbabwe Platinum Mines (Pvt) Ltd (third respondent).
It later transpired that it was Cosira Communications Global (the first respondent), instead, that had a running contract with Zimbabwe Platinum Mines (Pvt) Ltd.
It was established that Cosira South Africa (Pty) Ltd (second respondent) never had any contract with Zimbabwe Platinum Mines (Pvt) Ltd at all.
It is Cosira Communications Global (the first respondent) that had a contract with Zimbabwe Platinum Mines (Pvt) Ltd and it is Cosira Communications Global which consumed the services which were provided by the applicant.
The applicant argues that Cosira Communications Global and Cosira South Africa (Pty) Ltd (first and second respondents) were aware, at all material times, that it was only Cosira Communications Global (first respondent) and not Cosira South Africa (Pty) Ltd (second respondent) which had a contractual relationship with Zimbabwe Platinum Mines (Pvt) Ltd.
Cosira South Africa (Pty) Ltd (second respondent) has tendered into court authenticated documents which reflect, that, on the 10th July 2013, Cosira South Africa (Pty) Ltd was placed under provisional liquidation by order of the North Gauteng High Court, sitting at Pretoria, South Africa.
Cosira South Africa (Pty) Ltd (second respondent) was placed under final liquidation on the 27th August 2013.
An order of the High Court of South Africa was issued on the 30th July 2013, authorizing the liquidators to sue on behalf of, and to defend proceedings against, Cosira South Africa (Pty) Ltd (second respondent).
Cosira South Africa (Pty) Ltd's liquidators dispute liability of the outstanding amount and further state that the applicant has failed to make out a case for the piercing of the corporate veil as Cosira Communications Global and Cosira South Africa (Pty) Ltd are separate legal personalities.
Point in Limine
The applicant argues that the application is not opposed by Cosira Communications Global (first respondent) and Zimbabwe Platinum Mines (Pvt) Ltd (third respondent). The only opposition before the court is on behalf of Cosira South Africa (Pty) Ltd (second respondent).
The applicant then extends the argument to state that the opposition before the court is a nullity for reasons set out below:
(a) Cross-border insolvency and the recognition of foreign liquidators in Zimbabwe
The applicant contends, that, Zimbabwe has no bilateral cross border insolvency treaty with South Africa. As such, so it is argued, in order to be recognized as such in Zimbabwe, the foreign liquidator must apply to the High Court of Zimbabwe for foreign recognition and assistance.
Local creditors must be notified of such application.
Further, the applicant notes, that, granting recognition to a foreign liquidator is at the court's discretion. This discretion is absolute but recognition is usually granted in the interest of comity or convenience.
My view on the matter is simply that evidence placed before me clearly indicates that Cosira South Africa (Pty) Ltd (second respondent) has been placed under liquidation in South Africa.
There is no legal basis for that order of liquidation to be registered in this court to give recognition to such an order.
There is no merit in the argument in that the order of liquidation granted by the court in South Africa must be recognized in this jurisdiction first before the respondents can be heard: see the remarks of INNES JP in the case of Ex parte BZ Stegmann 1902 TS 40…, where the learned judge comments as follows:
“But, on the other hand, the same court, acting from motives of comity or convenience, is equally justified in allowing the order of the Judge of the domicile to operate within its jurisdiction, and in assisting the execution or enforcement of such order. The matter is entirely one for its own discretion.”
In the circumstances, therefore, and exercising my judicial discretion, I do not consider it necessary for the liquidation order relating to Cosira South Africa (Pty) Ltd (second respondent) to be recognised first in this court formally. I am satisfied that the order is valid and that the issues for determination can be disposed of without considerations of cross-border insolvency and the recognition of foreign liquidators.
I would accordingly dismiss the point in limine.
