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[2010] ZAGPPHC 63
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Executcrete Readmix (Pty) Ltd v Africa Powercrete (Pty) Ltd (12040/09) [2010] ZAGPPHC 63 (14 July 2010)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
CASE
NUMBER: 12040/09
DATE:
14/07/2010
In
the matter between:
EXECUTCRETE
READMIX (PTY) LTD
Applicant
And
AFRICA
POWERCRETE (PTY) LTD
Respondent
JUDGMENT
TOKOTA
AJ
[1]
On 5 March 2009 the applicant launched an application for the winding
up of the respondent. This was preceded by the service
of a letter of
demand as envisaged in section 345(1 )(a)(i) of the Companies Act No
61 of 1973. On 8 September 2009 this Court,
per Rabie J, granted a
provisional order for the winding up of the respondent returnable on
6 October 2009. He ordered further
that the said court order be
served on the employees of the respondent at an address in Soweto.
The return date was extended from
time to time.
[2]
The applicant alleges that the respondent is indebted to it in the
amount of R1 141 610.90 being a debt owed as result of a
contract of
sale of ready mix concrete between the parties. It is alleged that
the applicant sold and delivered, at the special
instance of the
respondent, ready mix concrete during September and October 2008.
[3]
This is an application for the confirmation of the provisional order
granted on 8 September 2009. The respondent is opposing
the
confirmation thereof on the basis that;
(a)
when
it received the ready mix concrete it did so acting as an agent of a
company called Proud Afrique Trading 123 (Pty) Ltd;
(b)
the
ready mix concrete was of an inferior quality;
(c)
this application is a debt enforcement and therefore an abuse of
the court process.
[4]
The
applicant contends that the respondent is
de
facto
insolvent
in that it is unable to pay its debts. It was argued orally that if
one has regard to the financial statements of the
respondent it
becomes clear that the respondent is not able to meet its financial
obligations.
[5]
I accept the submission that the applicant has nothing to do with
Proud Afrique company and therefore the defence that the respondent
acted as an agent of Proud Afrique is untenable. However if one has
regard to annexures attached to the papers it becomes clear
that the
respondent was making these orders for and on behalf of Proud
Afrique. In a letter dated 15 October 2008 addressed and
delivered to
the applicant there is a reference to test results. The letter reads
thus: "Our
client
Proud Afrique Trading requested the test results on the concrete
delivered at AnnaBoom Street, Noordwyk, Zone 10. This test
(sic)
results is required A.S.A.P for proof of strength of concrete to
engineers doing site inspection. Without results site can
not be
passed and no payments will be made either way.
PS:
Please find attached letter from customer stating above mentioned."
In
another letter dated same date (15 October 2008) from Proud Afrique
addressed to the respondent the following is stated.
"We
are waiting for the test cube results from the laboratory. Please
advise when these results shall be ready for collection.
We
need these results in order to settle your account."
[6]
It is common cause that the respondent did not pay its debt to the
applicant, in a letter dated 3 February 2009 from its attorneys
the
respondent acknowledged its indebtedness to the applicant and offered
a compromise alleging that it was not in a position to
pay the full
amount and offered to pay R600 000 immediately and make periodic
payments for the balance. It pointed out that its
debtors were making
empty promises to pay it. The offer was rejected by the applicant. It
was argued during the hearing on behalf
of the applicant that this is
a clear indication of
de
facto
insolvency.
[7]
In terms of section 344(f) of the Companies Act a Court may wind up a
company if it is unable to pay its debts as described
in section 345.
In terms of section 347 (2) if in an application for the winding-up
of a company it appears to the Court that the
applicant is entitled
to the relief sought, the Court shall make a winding-up order, unless
it is satisfied that some other remedy
is available to the applicant
and that the applicant is acting unreasonably in seeking to have the
company wound up instead of
pursuing that other remedy.
[8]
In this matter although the respondent has a contract with the
applicant, Proud Afrique is the company that has caused the problem
of the respondent. The applicant does not need the concrete but makes
orders for Proud Afrique. if the applicant had pursued its
claim by
way of issuing summons the possibility exists that the respondent
would have joined Proud Afrique in the proceedings.
If the
provisional order is confirmed the respondent alone will be ruined at
the expense of Proud Afrique. The applicant has another
remedy to
pursue. It chose to apply for the winding up. In my view and in the
exercise of my discretion although the respondent
is unable to pay
the full amount owed I am not persuaded that it is just and equitable
to wind up the respondent.
Accordingly
I am not prepared to confirm the provisional order of of this Court
dated 8 September 2009.
[9]
What remains is a question costs. If I were to find that the
applicant is guilty of abusing the Court process an order of costs
against it would be justified. However I refrain from making any
finding in this regard. Consequently 1 am not prepared to make
any
order of costs against any of the parties. In the result 1 make the
following order.
The
order of this court dated 8 September 2009 placing the respondent
under provisional winding up is discharged. I make no order
as to
costs.
B
R TOKOTA
ACTING
JUDGE OF THE HIGH COURT
DATE
OF HEARING: 9 JUNE 2010.
DATE
OF JUDGMENT:
Appearances
for the applicant: Adv N F De Jager
Instructed
by Dyason Inc
Appearances
for the respondent: Adv J De Beer Instructed by Sher & Scholtz
Attorneys.