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[2014] ZASCA 125
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Lamprecht v Klipeiland (Pty) Limited (753/2013) [2014] ZASCA 125; [2014] 4 All SA 279 (SCA) (19 September 2014)
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THE SUPREME COURT OF
APPEAL OF SOUTH AFRICA
JUDGMENT
Case No:
753/2013
Reportable
In the matter between
COENRAD JOHAN
LAMPRECHT
................................................................................
APPELLANT
and
KLIPEILAND (PTY)
LIMITED
...................................................................................
RESPONDENT
Neutral citation:
Lamprecht v Klipeiland (Pty) Ltd
(753/2013)
[2014] ZASCA 125
(19
September 2014)
Coram:
Cachalia,
Bosielo, Shongwe and Swain JJA and Dambuza AJA
Heard
: 03 September 2014
Delivered: 19
September 2014
Summary
:
Winding-up – Requirements – Section 345(1)(
a
)
of the Companies Act 61 1993 – Agreement by the parties
regarding respondent’s
locus
standi,
indebtedness and whether the
debt is due – the legal effect thereof.
ORDER
On appeal from:
North Gauteng High Court, Pretoria
(Makgoka J sitting as court of first instance):
It is ordered that:
1. The appeal is
upheld.
2. The respondent
is ordered to pay the costs on an attorney and client scale, such
costs to include the costs of two counsel where
so employed.
3. The order of the
high court is set aside and the following order is substituted in its
place:
‘
(a)
The respondent is placed under final winding-up;
(b)
The costs of the application including the costs reserved by
Prinsloo J on 21 February 2012, and the costs of
the appearances
before Preller J on 19, 20 and 28 September
2012, including the costs consequent upon the employment of two
counsel wherever
employed, are to be costs in the
winding up.’
JUDGMENT
Bosielo JA (Cachalia, Shongwe and
Swain JJA and Dambuza AJA concurring):
[1] This is an appeal, with the leave of
the court below, against the judgment by the North Gauteng High
Court, Pretoria (Makgoka
J) in terms whereof he discharged a
provisional winding-up order with costs.
[2] Briefly stated the background facts
to this case are as follows: during March 2003 the appellant and the
respondent, duly represented
by its directors concluded an agreement
in terms whereof the respondent appointed the appellant as its
Project Manager to have
its property, the Remainder of the farm
Klipeiland 524 JR, Gauteng, rezoned and proclaimed a township. This
entailed the planning,
co-ordination and supervision of all the
professionals to be employed in the process of establishing a
township. By September
2007, the appellant had succeeded to obtain
approval for the proposed township from the Kungwini Local
Municipality.
[3] The appellant avers that he was to
be paid R6 million as remuneration for the project under the
agreement. However, during November
2007, the respondent terminated
the agreement with the appellant and appointed Dynadeals Three (Pty)
Ltd in his position. The alleged
reason was that the appellant had
failed to perform in terms of the agreement. The appellant regarded
this as a repudiation of
the agreement, which he accepted.
Alternatively, he regarded it as cancellation of the agreement.
[4] Based on the alleged repudiation or
cancellation of the contract, the appellant demanded the R6 million
from the respondent
as his compensation. When the respondent failed
to pay, the appellant served a formal demand for payment in terms of
s 345(1)
(a
) of the Companies Act 61 of 1973 (the Companies
Act) on the respondent. Despite numerous meetings between the
appellant and Jung-FuTsai,
one of the respondent’s directors,
and his undertaking to pay, no payment materialised. As a result the
appellant instituted
motion proceedings to have the respondent wound
up. The respondent opposed the application and filed an answering
affidavit.
[5] The respondent raised a number of
points
in limine
. Essentially, it denied that s 345(1)(
a
)
was applicable as the appellant had not proved that his claim was
liquid, and, further that the respondent was unable to pay its
debt
as envisaged by s 345(1)(
a
) of the Companies Act. Importantly,
the respondent denied that it had agreed to pay the appellant R6
million for the project as
alleged by the appellant. Its version of
the agreement was that the appellant would be paid in kind, by way of
transfer to him
of 61, 3877 hectares of land, being the remaining
portion of the total extent of the land in issue. This was to be
effected once
the appellant had succeeded in having the land rezoned
from agricultural land, its establishment and proclamation as a
township,
and its subdivision. This had to be followed by a sale of
approximately 192, 11 hectares for R120 million, and the issuing of a
certificate in terms of s 82 of the Town Planning and Townships
Ordinance 15 of 1986.
[6] Johannes Paulus Van Wyk (Van Wyk),
who described himself as a town planner deposed to an affidavit in
support of the appellant.
He confirmed that he was appointed to
undertake the establishment of a township on the respondent’s
property. He was to perform
his duties under the supervision of the
appellant who was the Project Manager. Essentially, he confirmed that
he secured the approval
for the establishment of the township from
Kungwini Local Municipality as well as approval from the Department
of Agriculture in
terms of the subdivision of Agricultural Land Act
70 of 1970. This he accomplished under the supervision of the
appellant as the
Project Manager. Of importance, he explained that
whatever delays were occasioned regarding the approval of the
establishment of
the township could not be attributed to the
appellant. He ascribed these delays to systemic problems. He
confirmed that he was
duly paid by the respondent for the work which
he did.
[7] This application was enrolled on 20
May 2011 before Ranchod J, who, on finding that the matter presented
serious disputes of
fact on numerous issues, declined to grant the
provisional winding up order. Instead, he referred the matter to oral
evidence as
follows:
‘
2.
Oral evidence shall be heard on the following issues whether the
applicant is a creditor of the respondent within the meaning
of
section 345(1)(a) of the Companies Act (61 of 1973) ie “a
creditor…to whom the company is indebted in a sum not
less
than one hundred rand then due…” and thus has locus
standi such that it can rely on section 345(1)(a) of the
Companies
Act?
[8] On 19 March 2012, whilst oral
evidence was being led, the parties interrupted the proceedings and
reached an agreement regarding
the appellant’s
locus standi
.
With the consent of both legal representatives, this agreement was
made an order of court by Kruger AJ on 20 March 2012. The relevant
part of the order reads:
‘
That
by agreement between the parties the respondent admits and concedes
that the applicant is a creditor of the respondent within
the meaning
of section 345 (1)(
a
)
of the Company’s Act, ie, a creditor to whom the respondent is
indebted in a sum not less than R100 then due and thus has
locus
standi
such that it can rely on section
345(1)(
a
)
of the Company’s Act 61 of 1973’.
[9] On 24 April 2012, the matter came
before Davis AJ in the opposed roll who granted the provisional order
with 5 June 2012 being
the return day. On the return day the matter
came before Makgoka J who discharged the provisional winding up order
with costs.
The reasoning underlying the judgment is set out as
follows:
‘
[11]
On a plain reading of the court order, the respondent admits that the
applicant is its creditor of a sum of not less than R100.
There is no
mention of an amount of R6 000 000 or for payment of any
other fixed amount of money. If it was the respondent’s
intention to admit the full amount, it would have done so expressly.
The admission is patently nothing more than an admission of
an
illiquid amount of money.
[12] I therefore do
not agree with the contention that the applicant is entitled to the
R6 000 000. It is common cause
that the applicant never
completed his mandate. He is therefore not entitled to the initially
agreed amount of R6 000 000.
He is entitled to claim
damages, which must still be quantified (
BK Tooling v Scope
Precision Engineering
1979 (1) SA 391
(A).
[13] The fact that
the respondent was not willing to admit that no more than R100 was
due and payable is a clear indication of the
respondent’s
intention to place the balance of the amount claimed in dispute…’
[10] Contrary to the finding by the
court below, the appellant did not claim the R6 million in this
winding-up application. All
he wanted was to assert or establish his
locus standi
under s 345(1)(
a
) of the Act as a creditor
owed an amount of no less than R100 which amount was due and payable.
The dispute as to what is owed
will be settled either by the
liquidator after the appellant has lodged his claim or by court in
the event that the creditor and
liquidator are unable to agree on the
amount payable.
[11] As clearly foreshadowed in his
heads of argument, appellant’s counsel relied primarily on the
order made by Kruger AJ.
He contended that on a simple reading of
this order, the respondent knowingly conceded that he was the
appellant’s debtor
as contemplated by s 345(1)(
a
),
with a claim of no less than R100 and further that the money was due
and payable. Furthermore, he submitted that the respondent’s
failure to satisfy the s 345(1)(
a
) demand is clear proof of
its commercial insolvency. He contended further that the effect of
the concession was that the appellant’s
debt was liquidated,
that the debt was extant at the time when the s 345(1)(
a
)
notice was served on the respondent, and further that the debt was
due and payable. This, he contended, gave the appellant the
right and
locus standi
to liquidate the respondent as it was proved that
it was commercially insolvent as contemplated in ss 344(
f
) and
345(1)(
a
).
[12] On the other hand, the respondent’s
counsel assailed the validity of the agreement concluded by the
parties. The essence
of his contention was that the concession was
made erroneously as the respondent never intended to admit any
indebtedness. However,
he was not able to offer any explanation as to
why no effort had been made to withdraw this concession. In
conclusion he submitted
that the amount claimed by the appellant was
not liquid as there was still a dispute regarding the precise amount
agreed upon as
remuneration for the appellant. He argued further that
as the appellant had not performed fully in terms of the agreement,
his
claim was for damages which still had to be computed, hence it
could not be said to be liquid.
[13] It is common cause that the court
order issued by Kruger AJ is still valid. This order is couched in
exactly the same words
used in s 345(1)(
a
). It is noteworthy
that the agreement that gave birth to this court order was made
precisely to address the vexed dispute around
whether the appellant
is the respondent’s creditor for an amount of not less than
R100 and whether the money was due. The
wording used is clear and
unambiguous. There is in my view no room for any misunderstanding by
an
y
of the parties concerning what they agreed on. As a
result, I am constrained to find that the respondent is either being
disingenuous
in denying that he knew what he signed and agreed to, or
that he was plainly dishonest with the court and the appellant. This
conduct
is reprehensible and deserving of censure. In addition,
counsel for the respondent conceded that the concession made by the
respondent
in consenting to the order made by Kruger AJ was to avoid
the respondent’s representative giving evidence. The terms of
the
order directly contradicted the respondent’s version on
oath that the respondent had never agreed to pay the appellant a sum
of money in whatever amount.
[14] Section 345(1)(
a
) of the
Companies Act provides that:
‘
(1)
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 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;
or
(ii) in the case
of anybody corporate not incorporated under this Act, has served such
demand by leaving it at its main office
or delivering it to the
secretary or some director, manager or principal officer of such body
corporate or in such other manner
as the court may direct,
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.’
[15] To meet the threshold laid down in
s 345(1)(
a
) it is essential that an applicant prove three
essential requirements. These are, first, that he or she is a
creditor of the respondent
for an amount not less than R100,
secondly, which must be due and payable. In other words, the debt
must be liquid. Third, there
must be proof that, notwithstanding
service of the s 345(1)(
a
) notice, the debtor has neither paid
the amount claimed nor secured or compounded it to the
reasonable satisfaction of the
creditor.
[16] I have already found that the
agreement 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
s 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 s 345(1)(
a
) have
been met. As stated by Malan J (as he then was) in Body Corporate of
Fish Eagle v Group Twelve Investments
2003 (5) SA 414
(W) at 428B-C:
‘
The
deeming provision of s 345(1)(
a
)
of the Companies Act creates a rebuttable presumption to the effect
that the respondent is unable to pay its debts (Ter Beek’s
case
supra at 331F). If the respondent admits a debt over R100, even
though the respondent’s indebtedness is less than the
amount
the applicant demanded in terms of s 345(1)(
a
)
of the Companies Act, then on the respondent’s own version, the
applicant is entitled to succeed in its liquidation application
and
the conclusion of law is that the respondent is unable to pay its
debts.’
It follows that the court below erred in
discharging the provisional winding up order.
[17] What remains now is the issue of
costs. The appellant’s counsel asked for a punitive order of
costs. His primary reason
was that the respondent proved itself to be
a mendacious litigant. It made conflicting and mutually contradictory
averments in
its affidavit. Initially, it emphatically denied any
monetary indebtedness to the appellant. Later, as pointed out above,
during
the trial, it performed a
volte face
and admitted a
monetary indebtedness to the appellant in an agreement which was made
an order of court. In its appeal to this Court,
it attacked the
validity of that agreement. The appellant’s counsel submitted
that, given the court order referred to above,
the respondent’s
opposition of the application for its liquidation was both vexatious
and frivolous, and must be visited
with a punitive order of costs.
[18] Respondent’s counsel
countered this by contending that the respondent was entitled to
oppose the application for its
liquidation as the applicant’s
claim is not liquid because the amount claimed by the applicant is
seriously disputed. In
conclusion, he submitted that objectively
speaking, there was nothing untoward in the respondent’s
opposition to the application.
He concluded by submitting that there
is no basis for a punitive cost order.
[19] I have already said that the
respondent behaved in a reprehensible manner. He put up strong
opposition to the appellant’s
claim even in the face of an
order of court made with its consent. This it did without any attempt
to have the court order rescinded,
varied or set aside. It is trite
that every order which has been issued by a competent court remains
valid and enforceable until
it is rescinded, varied or set aside by a
competent court. The respondent could not willy-nilly disregard the
court order made
by Kruger AJ. To my mind, the respondent’s
conduct amounts to an abuse of the court’s process. The
appellant has been
put to unnecessary trouble and litigation costs.
Justice and fairness requires that the respondent be ordered to pay
the costs
of the application on a punitive scale. See
In Re
Alluvial Creek Ltd
1929 CPD 532
at 535.
[20] In the result, the following order
is made:
1. The appeal is
upheld.
2. The respondent
is ordered to pay the costs on an attorney and client scale, such
costs to include the costs of two counsel where
so employed.
3. The order of the
high court is set aside and the following order is substituted in its
place:
‘
(a)
The respondent is placed under final winding-up;
(b)
The costs of the application including the costs reserved by Prinsloo
J on 21 February 2012, and the costs of the appearances
before
Preller J on 19, 20 and 28 September 2012, including the costs
consequent upon the employment of two counsel wherever
employed,
are to be costs in the winding up.’
_________________
L O BOSIELO
JUDGE OF APPEAL
Appearances:
For Appellant : L W De Koning SC
Instructed by:
Gerhard Botha & Partners Inc.;
Pretoria
Phatshoane Henny
Attorneys, Bloemfontein
For Respondent: A B Rossouw SC (with him
F Saint)
Instructed by:
Afzal Lahree
Attorneys; Johannesburg
Azar & Havenga
Inc., Bloemfontein