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[2020] ZAWCHC 101
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Bohnke NO and Others v JW Blue Construction Management (22866/2019) [2020] ZAWCHC 101 (20 May 2020)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No
.:
22866/2019
In
the matter between:
JOCHEN
BÖHNKE
N.O.
First Applicant
JANA
SABINE CLAUDIA VOGEL N.O.
Second Applicant
TIM
FABIAN BÖHNKE
N.O.
Third Applicant
DUNCAN
REY NEL
N.O.
Fourth Applicant
KATJA
MARIA HERR
N.O.
Fifth Applicant
in
their capacities as trustees for the time being of the Yes Please
Trust
(Number:
IT 2155/2010)
and
JW
BLUE CONSTRUCTION MANAGEMENT
Respondent
Matter
heard on 12 May 2020
JUDGMENT
: HANDED DOWN ELECTRONICALLY ON 20 MAY 2020
HOCKEY,
AJ
[1]
This
application is brought by the trustees of the Yes Please Trust (“the
applicant”) for the provisional winding-up
of the respondent,
JW Blue Construction Management Proprietary Limited (“the
respondent”). In the alternative, the
applicant asks for an
order directing the respondent forthwith to implement and give effect
to the adjudication determination issued
on 21 November 2019 and to
pay the applicant the sum of R869 257.22 (“the claimed
amount”), inclusive of VAT,
together with interest thereon at
the prescribed rate from 21 November 2019.
[2]
The alternative relief was introduced by way of the applicant’s
replying affidavit attached thereto as “KMH 23”.
[3]
The provisional winding-up order is based on a demand issued by the
applicant addressed to the respondent in terms of section
345(1)(a)(i) of the Companies Act 61 of 1973 (“the 1973
Act”), which demand the respondent failed to accede to.
[4]
The claimed amount is part of an award issued by an adjudicator who
was appointed and made his determination under the provisions
of a
JBCC Minor Works Agreement (“the JBCC Agreement”) entered
into by the parties.
[5]
The respondent opposed the relief sought and instead contends that
the bringing of the application for its winding-up is an
abuse of
process and should be dismissed, alternatively it should be postponed
sine
die
,
at least until the finalising of the arbitration proceeding currently
ongoing relating to the dispute which was determined in
the
aforementioned adjudication proceedings. The arbitration process is
being conducted in terms of the dispute resolution provisions
of the
JBCC Agreement.
[6]
At this point, it is apposite to sketch the background leading up to
the present proceedings.
[7]
During February 2018, the parties concluded the JBCC Agreement, in
terms whereof the respondent had to refurbish a property
owned by the
applicant.
[8]
The JBCC Agreement contains typical dispute resolution provisions for
these kinds of construction contracts, providing for a
two-tiered
dispute resolution mechanism, firstly for a dispute to be referred
for adjudication, and thereafter, should a party
give a
Dissatisfaction Notice against the adjudicator’s determination,
for a referral to arbitration.
[9]
During 2019 certain disputes arose between the parties. The first of
these disputes was referred to adjudication which commenced
before
Adv Beyers of the Cape Bar.
[10]
Before the first dispute was determined, on 23 April 2019, the JBCC
Agreement was terminated. This is common cause.
[11]
Adv Beyers issued his determination on 1 July 2019. The applicant was
found to be indebted to the respondent in the amount
of R238 245.32
(“the Beyers Determination”). Despite issuing a
Dissatisfaction Notice against the Beyers
Determination, thereby
initiating arbitration proceedings, the applicant nevertheless
settled the amount as determined therein.
[12]
On 2 July 2019, the respondent issued a second Notice of Adjudication
in respect of a different dispute (“the second
dispute”)
from that which was dealt with by Adv Beyers. The applicant objected
to the referral of the second dispute, and
on 4 July 2019 its
attorneys responded to the new referral stating that “
[G]iven
that the agreement has been terminated, the proper route should be
one of arbitration rather than adjudication”
[13]
The applicant’s contention was rejected by the respondent and
further correspondence ensued regarding the competency
to refer the
dispute for adjudication. No agreement was reached and as a result
the respondent referred the matter to the Association
of Arbitrators,
who on 3 September 2019 directed that “
[T]he
dispute resolution clause of the agreement between the parties
(Clause 22) exists independently of the agreement. There is
a
dispute. In terms of the applicable Rules an Adjudicator must be
appointed. The Association of Arbitrators is the appointing
authority.”
[14]
The adjudication of the second dispute then proceeded before Mr
Daniel van Tonder. The applicant instituted a counterclaim
against
the respondent. Mr Van Tonder issued his determination (“the
Van Tonder Determination”) on 21 November 2019,
directing the
respondent to pay the claimed amount to the applicant. The Van Tonder
Determination included a final account and
a final certificate.
[15]
The award in the Van Tonder Determination contained a typographical
error in paragraph 9 thereof in that it directed the claimant
to pay
“the claimant”, instead of “the respondent”.
This was corrected in a further ruling on 26 November
2019. The
applicant filed an affidavit attaching the further ruling of the
adjudicator correcting the error on 11 May 2020. In
any event, there
can be no doubt that both parties understood the intention of the
ruling, as the respondent issued a Notice of
Dissatisfaction on 22
November 2019, the day following the day that the ruling was issued.
The respondent raised this as an issue
in these proceedings, but in
my view, nothing further turns on this.
[16]
The Van Tonder Determination, as well as the Beyers Determination are
now, as agreed between the parties, subject to a single
combined
arbitration which is yet to be finalised.
[17]
On 22 November 2019, the attorneys for the applicant sent a letter of
demand for settlement of the claimed amount to Mr Terry
Brown who,
although not a legal practitioner, is an alternative dispute
resolution practitioner who at all relevant times of the
disputes
hereto acted on behalf of the respondent.
[18]
In his response to the letter of demand, Mr Brown did not dispute the
debt as per the Van Tonder Determination, but merely
took issue with
the time frame for payment.
[19]
On 29 November 2019 the applicant’s attorneys addressed a
further letter of demand to the respondent but this time in
terms of
section 345 of the 1973 Act in terms of which the respondent was
advised that if the claimed amount was not settled within
three weeks
from the date of delivery of the letter, the respondent would be
deemed to be unable to pay its debts in terms of section
345 of the
1973 Act.
[20]
The respondent failed to make payment as demanded which resulted in
this application being brought.
[21]
The respondent opposes this application on the contentions that the
Van Tonder Determination is not enforceable as the JBCC
Agreement had
been cancelled, that the debt relied on by the applicant is disputed
and has been referred to arbitration, that the
application is an
abuse of process calculated to quell the arbitration proceedings and
furthermore that the application was brought
on the incorrect form,
on short notice in circumstances in which no proper case for urgency
was made out, and for this reason also
it is an abuse of process.
[22]
Let me deal with the contentions that this application is an abuse of
process and was brought in the wrong form first.
[23]
This application was indeed brought as one of urgency with a request
that it be heard as such and for the court to dispense
with the forms
and requirements of the Rules of court in terms of Rule 6(12)(a).
[24]
In relation to sequestrations, Meskin, in
Insolvency Law
at
2-38 comments:
“
It
is submitted that any application for sequestration merely as such
contains an element of urgency: if a case for sequestration
can be
made, ex hypothesi, a removal of his property from the control of the
debtor and a suspension of enforcement of creditors’
rights of
action and execution in the ordinary course should occur as soon as
possible. Accordingly, in all cases the Court,
acting under
Rule 6(12) of the Rules of the Supreme Court, should permit the
making of the application under Rule 6(4)(a) of such
Rules, read with
Form 2 in the First Schedule thereto, subject to the applicant’s
giving informal notice of the application
to the debtor in terms of
section 9(4A)(a)(iv), save in cases where in the exercise of its
discretion in terms of the section the
Court considers it to be in
the interests of the debtor or the creditors to withhold such
notice.”
[25]
It is not unusual for applications of this nature to be brought as
one of urgency on a short form of notice of motion. Where
such an
applications is opposed, the party opposing is given opportunity to
do so either by agreement between the parties or by
the court at the
first appearance. This was indeed so in this case. The matter was
first enrolled on 7 January 2020, on which date
an order was obtained
by agreement for the parties to file further papers within certain
timelines. The matter was accordingly
postponed for hearing on 12 May
2020. No party suffered prejudice.
[26]
In
Commissioner
for SARS v Hawker Aviation Services (Pty) Ltd
[2006] 2 All SA 565
(SCA), the Supreme Court of Appeal held at p 569:
“
Urgency
is a reason that may justify deviation from the times and forms the
rules prescribe. It relates to form, not substance,
and is not
a prerequisite to a claim for substantive relief. Where an
application is brought on the basis of urgency, the
rules of court
permit a court (or a judge in chambers) to dispense with the forms
and service usually required, and to dispose
of it ‘as to it
seems meet’ (Rule 6(12)(a)). This in effect permits an
urgent applicant, subject to the court’s
control, to forge its
own rules (which must ‘as far as practicable be in accordance
with’ the rules). Where the
application lacks the
requisite element or degree of urgency, the court can for that reason
decline to exercise its powers under
Rule 6(12)(a). The matter
is then not properly on the court’s roll, and it declines to
hear it. The appropriate
order is generally to strike the
application from the roll. This enables the applicant to set
the matter down again, on proper
notice and compliance.”
[27]
Because liquidation proceedings are by their very nature urgent, I am
satisfied that the applicant used the correct procedure
in bringing
this application.
[28]
I next deal with the respondent’s contention that the award of
the adjudicator is not enforceable because the JBCC Agreement
had
been cancelled and furthermore that the debt is not enforceable
because it is subject to challenge in ongoing arbitration
proceedings.
[29]
Counsel for the respondent relies on the judgment of Fourie AJA in
Freshvest
Investments (Pty) Ltd v Marabeng (Pty) Ltd
(1030/2015)
[2016] ZASCA 168
(24 November 2016), where it is stated:
“
In
essence, the matter serves as a stark reminder that winding-up
proceedings are not designed for the enforcement of a debt that
the
debtor-company disputes on bona fide and reasonable grounds.
This has become known as the ‘Badenhorst rule' after
Badenhorst
v Northern Construction Enterprises (Pty) Ltd
&
1956 (2) SA 346
(T) at 347-348.
[30]
It is common cause that the JBCC Agreement was terminated on 23 April
2020. The respondent was aware of the cancellation when
it instituted
the adjudication proceedings which resulted in the Van Tonder
Determination. In fact, it was the applicant who initially
objected
to the Van Tonder process being instituted and the respondent who
persisted therewith. After a ruling by the Association
of Arbitrators
on 3 September 2019, both parties submitted to the adjudication
proceedings, even though the applicant raised its
objection to the
referral to adjudication in front of Mr Van Tonder. It was only when
the outcome of the proceedings was unfavourable
to the respondent
that it now wants to reprobate the Van Tonder proceedings. The
applicant argued, and I agree, that in doing so,
is not only legally
bad, but demonstrates a lack of good faith.
[31]
The adjudication proceedings conducted by Adv Beyers (as in the case
with the Van Tonder proceedings) also concluded after
the JBCC
Agreement had been cancelled. The respondent in that instance
insisted on immediate payment of the award in its favour
despite that
fact that the applicant had issued a Notice of Dissatisfaction
against the Beyers Determination thereby initiating
arbitration
proceedings. The respondent relied on the terms of the JBCC Agreement
whereby the determination remains in force and
implementable until
overturned by an arbitration award. The applicant settled the debt
accordingly.
[32]
At this juncture it is apposite to set out the relevant dispute
resolution provisions of the JBCC Agreement:
“
22.4
Where a dispute is referred to adjudication:
22.4.1
The adjudicator, who shall not be eligible for subsequent appointment
as the arbitrator, shall be appointed in accordance
with JBCC
®
Rules
for Adjudication current at the time when the dispute was declared.
The adjudication shall be conducted in terms
of such rules.
22.4.2
A determination given by the adjudicator shall be immediately binding
upon, and implemented by the parties.
22.4.3
Where the adjudicator has given a determination, either party may
give notice of dissatisfaction to the other party and to
the
adjudicator within ten (10) working days of receipt of the
determination. Where the adjudicator has not given a
determination
within the time period allowed or extended time period
provided in the JBCC
®
Rules for Adjudication, either party may give notice to the other
party and to the adjudicator that if such determination is not
received within ten (10) working days of receipt of such notice the
appointment is thereupon automatically terminated and such
dispute is
then referred to arbitration.
22.5
Where the dispute is referred to arbitration:
22.5.1
The resolution of the dispute shall commence anew. The arbitration
shall not be construed as a review or appeal from any
adjudicator’s
determination and that any such determination by the adjudicator
shall remain in force and continue to be implemented
until overturned
by an arbitration award.
22.5.2
Neither party shall be entitled to legal representation unless
otherwise agreed by both parties and the arbitrator.
22.5.3
The arbitrator shall be appointed in accordance with the Rules of
Arbitration current at the time when the dispute was declared
by
agreement between the parties within fifteen (15) working days of
notice by either party inviting the other to do so, falling
which on
application by either party, the Chairman for the time being of the
Association of Arbitrators (Southern Africa).
22.5.4
The arbitrator shall have the power to finally determine the dispute
including the power to make, open up and revise any
certification,
opinion decision, determination, requisition or notice relating the
dispute as if no such certificate, opinion,
decision, determination,
requisition or notice had been issued or give.
22.8
This clause [22.0] shall, to the extent necessary to fulfil its
purpose, exist independently of this agreement [3.2].”
[33]
The query whether it was competent for the dispute to be referred to
adjudication had been dealt with both by the Association
of
Arbitrators as well by Mr Van Tonder. In both these instances it was
the applicant who argued against the referral and the respondent
who
argued in its favour. In both instances it was ruled that it was
competent to have the dispute adjudicated despite the termination
of
the JBCC Agreement. It is not for this court to critique the Van
Tonder Determination in any detail.
[34]
Of importance to note is that the termination clause (clause 21) of
the JBCC Agreement does make provision for either party
to recover
damages from the other post termination. This, together with the
provision in sub clause 28.2, providing that “
[T]his
clause [22.0] shall, to the extent necessary to fulfil its purpose,
exist independently of the agreement.”
Furthermore, this is not a review of, or an appeal against the Van
Tonder determination. For these reasons, I am of the view that
the
termination of the JBCC Agreement had no bearing on the proper
referral to adjudication, and no bearing on its outcome.
[35]
In support of the contention that the adjudication award is not
enforceable as it is under dispute and has been referred to
arbitration, counsel for the respondent relies on the judgement in
Blue
Circle Projects (Pty) Ltd v Klerksdorp Municipality
1990(1) SA 496 (T), where it was held by Coetzee J that “…
.it
cannot be said that the mediator’s award, while arbitration
proceedings are pending is final. It is significant that clause
69(2)
says that the opinion expressed by the mediator is only final and
binding upon the parties ‘unless and until otherwise
ordered in
arbitration proceedings under sub clause (3) of this clause”
[36]
The approach in the
Blue Circle
case, however, was expressly
rejected by Van Dijkhorst J in
Stocks & Stocks v Gordon
1993 (1) SA 156
(T) where it was held:
“
The
scheme of clause 26 of the contract is conducive to finality and
dispute resolution. The last provision of clause 26.3 is included
to
ensure continuation of the work pending arbitration which occurs
generally speaking after the completion of the work and to
obviate
tactical creation of disputes with a view to postponement of
liability. This cuts both ways. The contractor may be dissatisfied
with the opinion of the mediator about the quality of his workmanship
which may lead to that work having to be redone or the rejection
of
his claim for interim compensation which may cause a cash-flow
problem. The employer may be dissatisfied with a mediator award
of
compensation to the contractor. Yet to ensure that the work does not
become bogged down by a dispute about this, this, the contract
provides that effect is to be given to the opinion. Should
arbitration or litigation determine that the mediator’s opinion
was wrong, the matter is rectified and the necessary credits and
debits will have to be passed in the final accounts”
[37]
The position adopted in
Stocks
& Stocks
have now become settled in our law and has been followed in various
cases, including in
Rodon
Projects (Pty) Ltd v NV Properties (Pty) Ltd
and
another
[2013] 3 All SA 615
;
Tabular
Holdings (Pty) Ltd v DBT Technologies (Pty) Ltd
2014 (1) SA 244
(GSJ); the unreported judgment of Spilg J in
Esor
Africa (Pty) Ltd/Franki Africa (Pty) Ltd V Bombela Civils JV
(Pty) Ltd
(GSJ case number 2012/7442); and in the as yet unreported judgment in
this division by Jamie AJ in
Tenova
Mining and Minerals (Pty) Ltd v Stellenbosch Municipality &
Another
(28 February 2019), case number 9816/18.
[38]
In
Rodon
Projects
,
it was held in the Supreme Court of Appeal per Nugent JA in paragraph
4, that:
“
It
has now become common internationally - in some countries by
legislation - for disputes to be resolved provisionally by
adjudication.
In
Macob Civil Engineering Ltd V Morrison Construction Ltd [BLR 93 at
97]
adjudication
was described as:
“…
a
speedy mechanism for settling disputes [under] construction contracts
on a provisional interim basis, and requiring the decision
of
adjudicators to be enforced pending the final determination of
disputes by arbitration, litigation or agreement….But
Parliament has not abolished arbitration and litigation of
construction disputes. It has merely introduced an intervening
provisional
stage in the dispute resolution process.”
[39]
The language in the dispute resolution clause of the JBCC Agreement
is clear and unambiguous. It was correctly interpreted
and
understood by the respondent when it insisted on settlement of the
Beyers Determination and also when it argued in favour of
referral
for adjudication of the second dispute.
[40]
Sub-clause 22.4.2 of the JBCC Agreement provides that “
[A]
determination given by the adjudicator shall be immediately binding
upon, and implemented by the Parties.”
Sub-clause
22.5.1 provides for the scenario where a dispute which had been
adjudicated is referred to arbitration. It states
that “
[T]he
resolution of the dispute shall commence anew. The arbitration shall
not be construed as a review or an appeal from any adjudicator’s
determination
,
and that any such determination by the adjudicator shall remain in
force and continue to be implemented until overturned by an
arbitration award.”
(my
underlining)
[41]
As the law now stands, contractual clauses, such as those of the JBCC
Agreement quoted above, that provide for immediate enforcement
of an
adjudicator’s award, even where the award may be subject to a
further dispute resolution process by way of arbitration
or
litigation, are not inconsistent with the
pacta
sunt servanda
principle. The applicability of this principle in our law was
confirmed by the Constitutional Court in
Barkhuizen
v Napier
[2007] ZACC 5
;
2007
(5) SA 323
, where it was held at paragraph 57 that:
“
...parties
should comply with contractual obligations that have been freely and
voluntary undertaken. This consideration is expressed
in the maxim
pacta
sunt servanda
,
which as the Supreme Court of Appeal has repeatedly noted, gives
effect to the central constitutional values of freedom and dignity.
Self-autonomy, or the ability to regulate owns own affairs, even to
one’s own detriment, is the very essence of freedom and
a vital
part of dignity.”
[42]
The respondent admitted that “
technically”
the
amount determined by Mr Van Tonder is owing but argue that since it
has been referred to arbitration, it is a factor which this
court
should take into account in exercising its discretion to refuse the
provisional winding-up of the respondent. In paragraph
94 of the
answering affidavit, Mr Jon Addy De Roubaix, the sole director and
shareholder of the respondent states;
“
In
the circumstances I respectfully point out that while it may
technically be so that there is an amount of R896 257.22 owing
to the Applicant, this is very much disputed and has been referred to
arbitration. This dispute subsists notwithstanding the fact
that the
Adjudication is binding and enforceable. It is a factor which the
Honourable Court may take into account for the purpose
of exercising
its discretion.”
[43]
This is the opportune time to deal with the court’s discretion
to refuse the provisional winding-up order.
[44]
It is clear that the claimed amount is due and payable. The applicant
has accordingly sent a letter of demand to the respondent
in terms of
section 345 of the 1973 Act. In terms of this section;
“
A
company or body corporate shall be deemed to be unable to pay its
debts if-
(a)
a
creditor by cession or otherwise, to whom the company is indebted in
a sum of not less than one hundred rand then due-
(i)
has
served on the company, by leaving the same at its registered office,
a demand requiring the company to pay the sum so due;…
and
the company or body corporate has for three weeks thereafter
neglected to pay the sum, or to secure or compound for it to the
reasonable satisfaction of the creditor”
[45]
The applicant was entitled to resort to section 345 of the 1973 Act
by sending a letter of demand to the respondent in accordance
with
these provisions. The respondent failed to either settle the
debt or to secure or compound for it.
[46]
The SCA has affirmed that a creditor under these circumstances has a
right
ex
debito justitiae
to
a winding-up order against the company who has failed to discharge
its debt. See
Lamprecht
v Klipeiland (Pty) Ltd
[2014] JOL 32350
(SCA). at paragraph [16] where the following was
stated:
“
[16]
I have already found that the agreement [that] was made an order of
court by Kruger AJ was valid. This leads me to find that
the
respondent conceded that the appellant had locus standi, that he was
a creditor for a sum no less than R100 and further that
it was due
and payable. There is no dispute that although the section 345(1)(a)
demand was served on the respondent, it has not
paid any amount nor
secured or compounded any amount to the reasonable satisfaction of
the appellant. To my mind, the jurisdictional
requirements set out in
section 345(1)(a) have been met.”
[47]
More recently, the SCA held in
Afgri
Operations v Hamba Fleet (Pty) Ltd
[2017] ZASCA (24 March 2017) that,
“
generally
speaking, an unpaid creditor has a right, ex debito justitiae, to a
winding-up order against the respondent company that
has not
discharged that debt”
[48]
The above is not to say that the court does not have discretion to
refuse a winding-up order. Such discretion must be exercised
judicially.
[49]
Counsel for the respondent relies on the so-called “Badenhorst
Rule” in his argument to persuade this court to
exercise its
discretion against the granting of a provisional winding-up order.
Reference is made to the judgement by Fourie AJA
in the SCA, where it
was held;
“
In
essence, the matter serves a stark reminder that winding-up
proceedings are not designed for the enforcement of a debt that the
debtor company disputes on bona fide
and
reasonable grounds. This has become known as the ‘Badenhorst
rule’ after
Badenhorst
v Northern Construction Enterprises (Pty) Ltd
1956
(2) SA 346
(T) at 347 – 348 (see also
Kalil
v Decotex (Pty) Ltd and another
1988
(1) SA 943
(A) at 980 B-D, as well as the authorities referred to in
Kalil
at
980 D-F).”
[50]
In relation to the Badenhorst rule, the SCA held in paragraph 6 in
the
Afgri
matter that;
“
[W]here,
however, the respondent’s indebtedness has, prima facie, been
established, the onus is on it to show that this indebtedness
is
indeed disputed on bona fide and reasonable grounds.”
Later,
in paragraph 13, the court held;
“
As
mentioned above, mere recourse to a counterclaim will not, in itself,
enable a respondent successfully to resist an application
for its
winding-up. Moreover, as set out above, the discretion to refuse a
winding-up order where it is common cause that the respondent
has not
paid an admitted debt is, notwithstanding a counterclaim, a narrow
and not a broad one. In these respects the court a quo
applied ‘the
wrong principle[s]’. There must be no room for any
misunderstanding: the onus is not discharged by the
respondent merely
by claiming the existence of a counterclaim. The principles of which
the court a quo lost sight are: (a) as set
out in Badenhorst and
Kalil, once the respondent’s indebtedness has prima facie been
established, the onus is on it to show
that this indebtedness is
disputed on bona fide and reasonable grounds and (b) the discretion
of a court not to grant a winding-up
order upon the application of an
unpaid creditor is narrow and not wide.”
[51]
Counsel for the applicant raises cogent argument that the respondent
fails at the first hurdle of “bona fides”
and also that
of reasonableness as required by the Badenhorst rule. In advance of
the argument, he states that the respondent had
previously approbated
the adjudication process as provided for in the JBCC Agreement, and
derived the benefit therefrom with the
outcome of the Beyers
Determination, and successfully argued for the competence of the
referral of the second dispute to adjudication,
both with the
Association for Arbitrations and in front of Mr Van Tonder. It cannot
now reprobate precisely the same adjudication
proceedings. In doing
so is not only legally bad, it demonstrates lack of good faith.
[52]
In the exercise of my discretion, I must be mindful that the
discretion is a narrow one, and that once the debt has been
established to exist as in this matter, the applicant has a right
ex
debito justitiae
to
the winding-up order. Despite these factors, it is still required of
this court to exercise its discretion judicially. The
ex
debito justitiae
maxim
is not an inflexible limitation to such discretion. In the words of
Rogers J in Orestisolve (Pty) Ltd t/a Essa Investments
v NDFT
Investment Holdings(Pty) Ltd and another 2015 (4) SA449 (WCC);
“
The
ex
debito justitiae
maxim,
I venture to suggest, conveys no more than that, once a creditor has
satisfied the requirements for a liquidation order,
the court may not
on a whim decline to grant the order (and see Blackman op cit vol 3
at 14 – 91). To borrow another judge’s
memorable phrase,
the court ‘does not sit under a palm tree’. There must be
some particular reason why, despite the
making out of the
requirements for liquidation, an order is withheld.”
[53]
In terms of the JBCC Agreement, the respondent is contractually bound
to satisfy the Van Tonder Determination despite having
referred it to
arbitration. By entering into the JBCC Agreement, it has undertaken
to do so and the
pacta
sunt servanda
principle is applicable to it. I agree with the argument of
counsel for the applicant that the respondent’s contententions
that the enforceability of the debt is negated by its challenge to
the Van Tonder Determination by way of arbitration is not advanced
on
reasonable grounds and is contrary to the respondent’s previous
conduct (ie the demanding and receiving of payment of
the debt owed
by the applicant under the Beyers Determination, despite the
applicant’s challenge to that determination through
arbitration
proceedings).
[54]
I would have expected the respondent to do more in trying to persuade
the court to exercise its discretion in its favour than
to base its
defence on the non-binding argument of the Van Tonder Determination.
In this regard, the respondent’s papers
lack any indication of
its solvency nor that any of its employees would lose their
livelihood in the event of its winding-up. Such
reticence, together
with the fact that the respondent’s failure to have responded
to the section 345 notice, lends itself
to a conclusion that it would
not be in the interest of justice to refuse the provisional
winding-up of the respondent.
[55]
I am satisfied that a
prima
facie
case has been established on a balance of probabilities that a
provisional winding-up should be granted.
[56]
There are other two further issues that I have to deal with. I
do so briefly:
[53.1]
The applicant requested that I condone the late filing of a further
supplementary affidavit dated 11 May 2020, in terms of
which the
error in the Van Tonder Determination was corrected. I already
indicated that the error was an obvious one and both parties
understood it as such. There is no reason not to condone the
late filing of the said affidavit.
[53.2]
The applicant further requested that I grant the amendment of its
notice of motion, as per KMH 23 of its replying affidavit.
The
amendment provides for the alternative relief sought, namely for an
order directing the respondent to forthwith implement and
give effect
to further the Van Tonder Determination. For reasons set forth
herein, it is not necessary to further deal with
the alternative
relief. In any event, the respondent suffered no prejudice, and
there is no reason why the amendment should
not be granted.
In
the result I make the following order:
1.
The
applicants’ request for leave to file the supplementary
affidavit dated 11 May 2020 is granted.
2.
The
applicants’ request to amend their notice of motion in
accordance with annexure KMH 23 to the applicant’s replying
affidavit dated 21 February 2020 is granted.
3.
The
respondent is placed under provisional liquidation.
4.
A
rule
nisi
is hereby issued calling upon all interested parties, to show cause,
if any, on Monday 27 July 2020 why the following order should
not be
made;
4.1
the respondent is placed under final liquidation;
4.2
the costs of this application, including the costs of two counsel,
are to be costs in the liquidation of the respondent.
5.
The provisional winding-up Order is to be served by the Sheriff upon;
5.1
the respondent at its registered office, being 161 Westhoven Street,
Edgemead, Cape Town, Western Cape;
5.2
the employees of the respondent at its principal place of business,
being Unit 3, 9 Montague Garden Drive, Montague Gardens,
Milnerton,
Cape Town, Western Cape;
5.3
every trade union that, as far as the applicants can reasonably
ascertain, represents any of the employees of the respondent;
and
5.4
the South African Revenue Service, Project 166, 22 Hans Strijdom
Street, Cape Town.
6.
The order is to be published one each in each of the Cape Times and
Die Burger newspapers.
_________________________
S
HOCKEY
Acting
Judge of the High Court
APPEARANCES:
For
the Applicant: Adv Matthew Blumberg SC
Adv
Gregory Solik
Instructed
by: Mr Peter Whelan
Bowman
Gilfillan Inc.
For
the Respondent: Adv Paul Tredoux
Instructed
by: Mr Nilssen
N.M.E.
Nilssen & Associates