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[2014] ZAGPJHC 394
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PC Becket T/A Libertas Boerdery v Old Fashioned Fish And Chips Distribution Center (Pty) Ltd (31745/2014) [2014] ZAGPJHC 394 (5 December 2014)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE NO: 31745/2014
DATE: 05 DECEMBER 2015
In the matter between:
PC BECKET t/a LIBERTAS
BOERDERY
.....................................
Applicant
And
OLD FASHIONED FISH AND CHIPS
DISTRIBUTION CENTRE (PTY)
LTD
.....................................
Respondent
J U D G M E N T
WEINER, J:
1. This application came before this
Court as an application for the winding-up of the respondent. It was
initially brought on
a long form notice of motion but an amended
notice of motion was filed on 6 November 2014 setting the matter down
for 13 November
2014 on the basis that the application for the
winding-up had become urgent. The original application was launched
on 18 August
2014 and was based upon section 344(f) and/or 344(h) of
the Companies Act read with Schedule 9 of the Companies Act 71 of
2008
(“the Act”). The applicant based its claim on the
fact that the respondent was unable to pay its debts and that it
was
just and equitable that the respondent be wound-up. The applicant
also submitted that, in terms of section 81(1)(c) of the
Act, even if
the respondent is solvent, it would be just and equitable for it to
be wound-up.
2. The applicant is in the business of
selling fresh potatoes to various companies one of which was the
respondent. The respondent
is the distribution centre of a company
styled Old Fashioned Fish and Chips (Pty) Ltd, which is the
franchisor of the Old Fashioned
Fish and Chips franchise which
operates approximately 300 franchisees countrywide. The respondent’s
business is the supply
of fish and potatoes to the franchisees of Old
Fashioned Fish and Chips (Pty) Ltd including certain franchise
operations owned
directly by the franchisor.
3. The parties concluded an oral
agreement in terms of which the applicant would supply potatoes to
the respondent; the applicant
would deliver to the respondent’s
principal place of business in Germiston; upon delivery the applicant
would submit a delivery
note to the respondent who would then send
the applicant a supply invoice which evidenced the delivering and
acceptance of the
potatoes; the applicant would then send the
respondent its tax invoices for payment; payment for the applicant
would be made within
14 days from date of invoice; ownership of the
goods remained vested in the applicant until the purchase price had
been paid in
full.
4. From February 2014 until July 2014
the respondent telephonically ordered potatoes on various occasions
from the applicant which
were delivered. The orders were placed
telephonically by one Amelia de Souza (Amelia) of the respondent with
the applicant’s
wife Linda Becker (Linda) who took the orders
telephonically on a daily basis. The applicant attaches the relevant
documents which
relate to the applicant’s claims which are
still outstanding.
5. Prior to February 2014 one Paul
Mendonca (Paul) was the Managing Director of the respondent and the
applicant had corresponded
with him in regard to the ordering and
delivery of the potatoes. The applicant had traded then under the
name and style of Paul
Farrel Boerdery CC trading as Libertas
Boerdery. The applicant conducted business with the respondent from
February 2014 onwards.
The applicant was the only member of Paul
Farrel Boerdery CC and the respondent was under the management of
Mendonca. The applicant’s
invoices were always paid timeously
until February 2014 when Mendonca left the employ of the respondent.
6. When Paul left, the applicant set up
a meeting with the new management and was introduced to Amelia who
held herself out as a
CEO of the respondent. The Director of the
respondent one Nicole de Souza (Nicole) is the daughter of Amelia and
the ex-wife of
Paul and the two businesses being the respondent and
Old Fashioned Fish and Chips (Pty) Ltd are interlinked.
7. On 26 February 2014, Amelia met with
representatives of the applicant and they decided to continue the
relationship on the same
basis as before. The first delivery of
potatoes was made on the same day.
8. The applicant states that it was
specifically agreed that payment terms would be 14 days from date of
the applicant’s invoices
and it was further agreed that when
the potatoes were delivered the price would be agreed depending upon
the price fluctuations.
9. The applicant contends that the
respondent breached the terms of the agreement in failing to make
payments as agreed. A second
meeting was held on 21 May 2014 between
Amelia and the applicant. Amelia promised that the outstanding
amounts owed to the applicant
would be paid in full.
10. No payment was forthcoming and a
letter of demand was sent to the respondent by the applicant’s
legal representatives
in August 2014. The applicant attached the
relevant delivery notes and invoices upon which its claim is based.
The applicant claimed
that the respondent was commercially insolvent
in that it had failed to pay the amount owing which the applicant
alleged was the
sum of R1 415 257,06. The applicant set out how this
was calculated in terms of the documents which it attached.
11. The applicant refers to several
other creditors of the respondent:
11.1 A liquidation application was
launched by Dynamic Labour Solutions (Pty) Ltd who supplied labour
broking services to the respondent
and an amount of R400 364,09 was
outstanding which led to the application for liquidation.
11.2 Another liquidation application
was launched by suppliers of fish fillets who alleged that they were
owed the sum of R1 197
571,73.
12. The respondent filed its opposing
affidavit on 5 September 2014. It was deposed to by Nicole. The
respondent alleged that
the applicant’s attorneys were the ones
who launched the three separate applications for the liquidation of
the respondent
being the applications referred to in 11 above. They
stated that all were being opposed. It is pertinent that the
application
launched by Beadica 219 CC was argued and a judgment was
prepared. However before judgment was handed down, the matter was
settled
and the applicant, in that case, was paid by the respondent.
The respondent intimates that there is something untoward in the
applications
as the attorneys for the applicants also represent the
respondent’s ex-husband representing De Souza’s
ex-husband Paul,
who Nicole alleges is being investigated by SAPS.
The respondent states that there are bona fide and genuine disputes
of fact
in the applicant’s application. It is denied that the
respondent is insolvent.
13. In regard to the sale and delivery
of the potatoes the following is the respondent’s defence:
13.1. In many instances the quantity
ordered was not delivered. Linda was aware of the fact that there
were short deliveries as
Amelia had informed her;
13.2.At least one whole consignment
consisted of rotten potatoes which Linda asked the respondent to dump
and promised to pass a
credit.
14. The respondent sets out a schedule
and alleges that the deliveries between 14 May 2014 to 5 June 2014, a
period of some 23 days
consisted of approximately 44 110 bags of
various grades and sizes of potatoes. Usually the bags of potatoes
that are delivered
are not opened by the respondent but are sent
directly to the franchisees.
15. The respondent contends that from
about 14 May 2014, the franchisees to whom the applicant’s
potatoes were delivered refused
to pay for the potatoes because they
were rotten or unsuitable. According to Nicole, Amelia raised this
problem with Linda who
immediately sent replacement loads. Some of
the replacement bags sent were opened after delivery and those were
also found to
be unsuitable for chips. Amelia offered to return the
potatoes but was told by Linda to dump them. This was done and the
potatoes
were collected by the respondent’s waste disposal
company. The respondent states that they had to buy potatoes from
another
supplier because of this problem and that during the period
14 May 2014 to 5 June 2014 there was obviously something wrong with
the applicant’s goods.
16. The respondent annexes to its
affidavit the latest financial and bank statements of the respondent
to support the allegation
that it is solvent. It is noteworthy that
these bank statements and financial statements relate to the period
ending 28 February
2013 and are only draft statements.
17. Although the respondent stated that
many franchisees complained about the potatoes that were unusable, no
confirmatory affidavits
from any of the franchisees were attached.
18. On 10 October 2014 the applicant
served its replying affidavit.
19. The applicant denies that Paul is
being investigated by the police. _____ states that there is no
connection between this application
and the problems between Paul and
Nicole. The applicant also points out that the bank statements which
the respondent produces
show an income but do not show any of the
liabilities which the respondent is incurring. The applicant points
out that the respondent
appears to raise the same points in
opposition to the other applications referred to in 11 above that is
non-delivery or defective
goods.
20. In dealing with the short
deliveries the applicant points out that there was short delivery on
three occasions in respect of
delivery notes 6444, 6693 and 6716.
Three bags of potatoes were missing from the delivery note 6444.
After an investigation of
the applicant, it appeared that the
applicant’s driver had misappropriated these three bags. On
delivery notes 6693 and
6716 there was a short delivery of one bag
and three bags respectively. The applicant credited the respondent’s
account in
respect of those short deliveries. They amounted to
R263,30. The applicant denies that the entire consignment of
potatoes for
a certain period were rotten and unusable. There are no
emails, confirmatory affidavits or written complaints from the
respondents
or its franchisees.
21. The applicant states that the
respondent was not satisfied with two consignments being 32 bags and
531 bags respectively. Although
there was some dispute as to whether
the goods were unusable, a credit note was provided for those bags.
Other than that, the
applicant says the remaining amounts are
outstanding.
22. The applicant states that despite
the respondent now stating that the goods were unfit for the purpose
for which they were purchased,
the respondent continuing ordering
vast quantities of potatoes on a daily basis and made partial
payments in respect thereof.
The applicant denies that, at any time,
there was any correspondence or telephone calls from the respondent
dealing with the fact
that these potatoes were rotten.
23. The applicant points out that it
has provided all the necessary documentation to show sale and
delivery and failure to pay and
that the respondent has not annexed
any documents or confirmatory affidavits of persons in its employ
(other than Amelia) to confirm
that the potatoes were rotten, were
dumped or that there were short deliveries. The applicant states
further that, in terms of
their invoicing and delivery procedure, a
supply invoice would not have been generated by the respondent and
provided to the applicant
if the goods were not delivered or
unsatisfactory.
24. The applicant contends that on a
balance of probabilities the proper delivery of the potatoes did
occur. Although the respondent
places the amount of the potatoes
delivered in dispute, there is no proof provided by the respondent.
Although it contends that
the potatoes were dumped on the
instructions of Linda, there is no confirmation, or any documentation
provided from the entity
which was utilised to dump the unsuitable
goods. The applicant relies on Section 345(1)(c) and accordingly the
debt owed need not
be due and payable, nor need the precise quantum
thereof be determined.
25. It was not, in essence, disputed by
the respondent, that the goods were delivered (save for certain short
deliveries for which
credits were passed). The issue of the potatoes
being rotten appeared unsubstantiated and was garnered from hearsay.
The applicant
accordingly contends that there is no bona fide and
reasonable dispute on the papers and that a prima facie case has been
shown
by the respondent which the applicant has not bona fide
disputed.
26. The respondent states that as a
result of the potatoes being rotten, the respondent had to purchase
same from another supplier
however, again, the respondent fails to
annex any documentation in this regard.
27. It cannot be disputed on the
applicant’s papers that it is a creditor in an amount in excess
of the amount which is required
in terms of the legislation. The
respondent has certainly not shown that all of the goods which were
delivered were not suitable
for use and cannot disturb the factor of
the applicant’s locus standi as a creditor. In any event the
respondent concedes
that the applicant is a contingent creditor as
set out in Simmonds NO v Cape (Pty) Ltd
1977 (3) SA 451
(W).
28. The respondent alleges that there
is a substantial dispute of fact on the papers dealing with the
delivery of the goods. Reference
is made by the applicant to the
well-known case of Kalil v Decotex (Pty) Ltd
1988 (1) SA 943
(AD) at
976A-I where Corbett JA stated the following:
Where the application for a provisional
order of winding up is not opposed or where, though it is opposed, no
factual disputes are
raised in the opposing affidavits, the concept
of the applicant, upon whom the onus lies, having to establish a
prima facie case
for the liquida-tion of the company seems wholly
appropriate; but not so where the application is opposed and real and
funda-mental
factual issues arise on the affidavits, for it can
hardly be suggested that in such a case the court should decide
whether or not
to grant an order without reference to respondent's
rebutting evidence.”
29. Taking the above into consideration
it is important to point out the following:-
29.1. The amount owed to the Applicant
is R1 415 257,06
29.2. The respondent annexes draft
Annual Financial Statements for the years ended 2012 and ended
February 2013 which shows assets
and liabilities up to February 2013.
The application was launched in August 2014. The respondent annexes
bank statements which
shows a turnover of monies in the respondent’s
bank account. This is irrelevant.
29.3 There is no evidence to suggest
that the respondent has assets or cash at its disposal to settle its
debts even if its assets
do exceed its liabilities. These assets may
be unrealizable to pay its debts as and when they become due.
29.4. It is also important to point out
that the 2013 “Draft Annual Financial Statements” annexed
to the Respondent’s
Affidavit are not complete and in fact
start from page 6. This is telling under the circumstances.
29.5. It is also interesting to note
that the deponent to the respondent’s answering affidavit
doesn’t state that the
respondent is liquid enough to pay the
applicant should the court find that the consignment of potatoes was
in fact delivered.
All the respondent states is that the bank
statement and “old” annual financial statements are
annexed to show the
extent of the respondent’s operation. This
is irrelevant.
29.6. The respondent has simply not
passed the hurdle in respect of evidencing that it can pay the
indebtedness owed to the applicant
or that the indebtedness is even
bona fide disputed.
Urgent application
30.The applicant amended its notice of
motion on 6 November 2014 to apply for the matter to be heard as a
matter of urgency. In
this regard a supplementary affidavit was
filed. The applicant contends that on 5 November 2014 it came to the
attention of the
applicant that the respondent had various creditors
which were owed in the region of R15 550 000,00. This was confirmed
to the
applicant by one Chantel Leech (“Leech”) a former
employee in the respondent’s Accounts Department.
31. It also came to the attention of
the applicant on 4 November 2014 that the respondent was selling and
dissipating assets by
selling 11 of its trucks. The applicant points
out that the respondent is a distribution centre which needs the
trucks to transport
its goods to the various franchises. The trucks
are according to the applicant owned by the respondent or are subject
to a hire
purchase agreement but the amount owing is minimal. This
was confirmed by Leech to the applicant. As a distribution centre,
the
main assets of the company are the trucks. Without same, the
respondent could not trade as a distribution centre.
32. The respondent concedes that it has
sold all of its trucks.
33. The applicant refers to a
confirmatory affidavit from one Altin Lay, who is the sole director
and shareholder of the Truck Wizard
(Pty) Ltd. Law confirms that his
company is owed approximate R400 000 and he supports the application
for liquidation. Lay states
that he used to maintain the trucks of
the respondent which included repairs, tire maintenance, refuelling
and licensing. He further
states that it was at the premises of the
respondent on the 16th of October 2014 and confirms that there was no
stock in the warehouse.
The applicant contends further that on the
4th of November 2014, it came to his attention that an agreement was
concluded with
a company called Jawell No Fine (Pty) Ltd, represented
by an attorney, Fitz Henry. The agreement purports to be a share sale
and
buyback agreement, however it is clear from the document that the
respondent and/or Old Fashioned Fish and Chips (Pty) Ltd were,
in
effect, providing their shareholding or at least, Old Fashioned Fish
and Chips (Pty) Ltd was providing its shareholding in the
respondent
as collateral for the loan amount of some R4,8 million. The buyback
price appears to be more than a “selling price”
which
buyback price increases over a period of time from 30 days to 90 days
(the interest component).
34. A further agreement was concluded
with Waleed Investment Holdings, represented by Zunaid Moti. What
appears from this agreement,
is the following:-
34.1. On the 14th of May 2014, the
respondent represented by Nicole and Waleed Investment (Pty) Ltd,
entered into an agreement whereby
the respondent would lend from
Waleed an amount of R4,3million. This was subject to 40 percent of
the shareholding of the respondent,
being held as security for the
duration fo the indebtedness. The loan had to be repaid within 6
months from the 15th of May 2014.
Accordingly, the repayment date is
the 15th of November 2014.
34.2. In addition, in terms of the
agreement, the respondent has bound itself to pay royalties to Waleed
for period of 10 years
at 1 percent of turnover payable 30 days in
arrears, plus VAT. Alternatively, Waleed is entitled to 10percent of
the gross proceeds
of the respondent plus the capital loaned.
35. It appears from the agreement that
the respondent was obliged to pay Waleed an a amount of R4,8 million
(The R4 300 000,00 loaned
and the interest royalty component of R5
000) in terms of letters between Waleed and Nicole.
36. In addition, the respondent has
closed down its Cape Town, Durban, Bloemfontein and Port Elizabeth
branches of its distribution
centre. Each branch was its own
distribution centre with its own trucks, carsm stocks and other
items. The only distribution centres
that remain open are the
Johannesburg and Polokwane branches. The Polokwane branch is
apparently being closed down during November
2014. All of the above
was relayed to the applicant by Lay, who was told the same by the
respondents and by Leech.
37. Leech approached the applicant’s
attorney on the 5th of November 2014 and informed them of the
following:-
37.1. Over the 3 months that she was
employed by the respondent as an accounts assistance, she made
payments from the respondent’s
bank account to the bank account
of Old Fashioned Fish & Chips (Pty) Ltd which is a separate
entity and for which there were
no invoices or documentary proof of
the reason for such payments.
37.2. She made payments in the amount
of approximately R1million from the respondent to Old Fashioned Fish
& Chips (Pty) Ltd.
These were made in order for Old Fashioned
Fish & Chips (Pty) Ltd to pay salaries and other expenses.
37.3. She was ordered by Nicole, Nelson
De Souza and Emilia to pay amounts from the respondent’s bank
account to the personal
bank accounts of Nelson, Nicholas and Nicole.
On one occasion she paid R50 000,00 to Nicholas’ bank account
while he was
in Italy. On another occasion, monies were paid from the
bank account of the respondent into the bond account of Nicole for
two
houses which she owns in Ballito.The bonds amount payable, R14
000, 00 each.
37.4. She further confirmed that all
cash payments from the franchisees are kept by Emelia and not entered
into the respondent’s
accounting system. Cash payments are made
daily.
37.5. In addition, Emelia told her to
load a payment of part of invoice, but to provide proof of payment to
the client of the full
amount, when there were insufficient funds in
the bank account.
37.6. Leech resigned on the 17th of
October 2014, because Emelia demanded that she sign an affidavit that
Lawy had stolen purchase
orders and other documents from the
respondent. She refused to do so.
38. The applicant submits that the
loans and/or share sale and/or buyback agreements and the interest
components thereof appear
to be wither questionable dispositions,
alternatively, one creditor is being preferred against another and is
a further indication
that the respondent is unable to pay its
creditors.
39. The applicant submits that, in
order to pay the amount of R4,8 million by the 15th of November, the
respondent was obliged
to dissipate it’s assets, including all
of its trucks. This, the applicant contends, would be of huge
detriment and prejudice
to the applicant, and the general body of
creditors.
40. The financial distress of the
respondent, and the way in which the bank account is being conducted,
requires investigation,
as it appears that there are more unsatisfied
creditors, and the income coming into the respondent, is not being
utilised to pay
those creditors.
41. On the 4th of November 2014, the
applicant’s attorney sought an undertaking from the respondent
that the assets would
not be dissipated. The respondent’s
attorney responded by stating that no undertaking would be provided.
The respondent however
did not deny the fact that it was selling its
trucks and also did not deny that it was to pay out the sum of R4,8
million by the
15th of November 2014.
42. The applicant contends that it
appears that the De Souza family are using the income of the
respondent to finance their luxurious
lifestyles at the expense of
the creditors.
43. In the affidavit deposed to by
Nicole opposing the urgent application, she states that the applicant
is advancing a hidden agenda
to destroy the business of the
respondent. She attacks the way in which the applicant came into
possession of the documents, through
Leech, who, according to the
applicant, violated the terms of her confidentiality agreement and
giving the information to Lay,
who in turn passed it on to the
applicant. She accordingly submits that same should not be relied
upon by virtue of the way in
which they came into the possession of
the applicant. This situation was dealt with in the case of
______v______ where the court
held that it was entitled to have
regard to the information, despite the way in which the applicant
came into possession thereof,
if same was relevant to the issue at
hand.
44. In regard to the sale of its
assets, the respondent states that it has been “restructuring
its business since June 2014”
by closing down the
underperforming depots in Cape Town, Durban, Port Elizabeth and
Bloemfontein and by disposing of the redundant
vehicles. It intends
to also vacate the Gosforth Park Warehouse and states that “once
the new supply chain that the respondent
had established to the
franchisees is fully up and running, and existing stock has been
moved to the distributors’ warehouse,
the respondent will also
vacate the Gosforth Park warehouse”. She states that the
restructuring is based on financially sound
business principles, made
with the legitimate aim of cutting unnecessary overheads, thereby
improving the respondent’s bottom-line
profits. The sale of the
vehicle, according to her, all occurred in the normal course of
business.
45. However, as stated above, the major
asset of the respondent in respect of its distribution services are
the trucks which it
had in its possession and, according to the
respondent, it has disposed of all of the trucks which it had in its
Johannesburg premises.
46. In regard to the previous
application by Beadica, which was heard on the 15th of October 2014,
the respondent states that although
it disputed its indebtedness,
after the argument had been concluded and whilst they were awaiting
the judgment, the respondent
was advised to effect payment of the
amount claimed.
47. The respondent also refers to the
fact that the applicant’s attorneys act for the respondent’s
ex-husband and that
he intends to open a business of his own in
competition with the respondent, as his restraint of trade expired on
the 11th of October
2014.
48. Whilst this might be a factor
effecting the bona fides of the application in certain circumstances,
it appears that the application
is based on valid and substantiated
grounds, and that the respondent has failed to provide the court with
sufficient evidence to
serve the prima facie case that it is unable
to pay its debts.
49. In regard to the Waleed agreement,
the respondent states that if the capital amount is not paid within 6
months, that is by
the 15th of November 2014, the respondent will be
liable to pay 1 percent of its monthly turnover as royalties to the
lender, whilst
the capital must then be repaid over a period of 48
months, commencing one year from the expiry of the initial 6 month
period,
that is 14th November 2014.
50. Nicole also states that the loan
was an advance made to Old Fashioned Fish & Chips (Pty) Ltd in
order to pay out the amount
that was due to Paul in terms of the
court order of 13th October 2013. The funds were initially made
available by Joel No Fine
(Pty) Ltd, which was repaid from the loan
which had been made available by Waleed investments.
51. However, the fact remains that if
the debt was not paid by the 15th of November 2014, that is 6 months
from the day that it
was loaned, the respondents finances will be
adversely affected, in that it is liable to pay 1 percent of its
monthly turnover
as royalties to the lender, as well as the capital
over a period of 48 months.
52. The respondent’s explanation
for it closing down various of its debtors and selling all of its
trucks for “sound
economic and commercial reasons” appear
fanciful. The court has to wonder precisely what business the
respondent will conduct
if it closes its depots, and sells all of its
trucks. It operates business as a warehouse and distribution company.
Such business
will obviously not be able to be conducted by the
respondent without the warehouses and the trucks.
PARA TO PUT IN SOMEWHERE (you said on
recording, you would find out where it goes. I’m guessing
around para 10 where mention
is made of the letter of demand?)-
53. The applicant’s attorney sent
a letter of demand to the respondent on the 1st of August 2014.
Demand was made for the
sum of R1 511 905, 90 for goods that had been
sold and delivered. No response was received to that letter and
another letter was
addressed to the respondent on the 14th of August
2014. Similarly, no response was received there too.
54. Although the respondent attempts to
cure the problem with the lack of evidence in the supplementary
answering affidavit it only
attaches certain emails from persons who
are unknown to the applicant. There was no confirmatory affidavit
from any of the franchisees
that the potatoes were totally rotten.
55. The applicant concedes that two
batches were unsuitable and credit notes were passed for them. It
appears therefore that the
applicant has made out a prima facie case
for a provisional winding-up order. In regard to the insolvency of
the respondent reference
is made to Section 345(1)(c) of the Act and
the fact that the applicant is a creditor or at least a contingent
creditor in an amount
of more than R100,00. In Absa Bank v
Reebokskloof (Pty) Ltd
1993 (4) SA 436
(CPD), Berman J held at
440F-441C as follows:
“The concept of commercial
insolvency as a ground for winding up a company is eminently
practical and commercial sensible.
The primary question which a Court
is called upon to answer in deciding whether or not a company
carrying on business should be
would up as commercially insolvent is
whether or not it has liquid assets or readily realisable assets
available to meet its liabilities
as they fall due to be met in the
ordinary course of business and thereafter to be in a position to
carry on normal trading-in
other words, can the company meet current
demands on it and remain buoyant? It matters not that the company’s
assets, fairly
valued,' far exceed its liabilities: once the Court
finds that it cannot do this, it follows that it is entitled to, and
should,
hold that the company is unable to pay its debts within the
meaning of s345(1)(c) as read with s34(f) of the Companies Act 61 of
1973 and is accordingly liable to be would up. As Caney J said in
Rosenbach & Co (Pty) Ltd v Singh’s Bazaar (Pty) Ltd
1962(4)
SA 593 (D) at 597E-F:
‘If the company is in fact
solvent, in the sense of its assets exceeding its liabilities, this
may or may not depending upon
the circumstances, lead to a refusal of
a winding-up order, the circumstances particularly to be taken into
consideration against
the making of an order are such as show that
there are liquid assets or readily realisable assets available out of
which, or the
proceeds of which, the company is in fact able to pay
its debts. ’
Notwithstanding this the Court has a
discretion to refuse a winding-up order in these circumstances but it
is one which is limited
where a creditor has a debt which the company
cannot pay, in such a case the creditor is entitled, ex debito
justitiae, to a winding-up
order (see Henochsberg on the Companies
Act 4th ed vol 2 at 586; Sammel and Others v President Brand Gold
Mining Co Ltd
1969 (3) SA 629
(A) at 662F)”
Berman J held further at 442A as
follows:-
“Winding up is nothing more nor
less than a form of execution to which an unpaid creditor is entitled
in law to resort, and
even if Rhebokskloof possesses an asset worth
R25 m and its liabilities amount to only some R5 m, if it is unable
to meet the demand
by one of it creditors for payment of one of its
liabilities amounting to R31/2 m and its only asset is neither liquid
nor readily
realisable, it is commercially insolvent and liable to be
wound up at the instance of that unpaid creditor on that ground”.
56. The applicant accordingly alleges
that:-
56.1. It is a creditor for an amount of
R1 415 257,06.
56.2. The respondent annexes draft
annual financial statements for the years ending 2012 and 2013 which
show assets and liabilities
only up until February 2013. The
applicant was launched in August 2014. The respondent annexes bank
statements to show that turnover
of monies in its account but no
liabilities or expenses are demonstrated.
57. Having regard to the above factors
as well as the fact that the respondent has dissipated the majority
of its assets at a time
when there are several pending liquidation
applications against the respondent the applicant has made out a case
for the provisional
winding-up of the respondent.
Accordingly there will be an order in
the following terms:
1. The respondent is placed under
provisional winding-up in the hands of the Master of the High Court.
2. The respondent and all other
interested parties must show cause on 2 February 2015 why a final
order should not
WEINER J
Counsel for the Applicant: Adv. B.
Stevens
Applicant’s Attorneys: Jurgens
Bekker Attorneys
Counsel for the Respondent:
Respondent’s Attorneys: Geo
Isserow & TL Friedman Inc.
Date of Hearing: 12 November 2014
Date of Judgment: 05 DECEMBER 2014