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[2020] ZAGPPHC 163
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DH Construction Technologies CC and Another v Chad Construction CC (45546-17) [2020] ZAGPPHC 163 (19 February 2020)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DI VISION, PRETORIA)
Case
number: 45546/17
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES:YES/NO
REVISED
DATE:19/02/2020
In
the matter between:
DH
CONSTRUCTION TECHNOL OGIES CC FIRST
APPLICANT
HM
& H EIENDOMME
CC INTERVENING
CREDITOR
SECOND
APPLICANT
and
CHAD
CONSTRUCTION
CC RESPONDENT
JUDGMENT
VAN
STADEN, AJ:
INTRODUCTION
[1]
The applicant and the intervening creditor apply for the liquidation
of the respondent. This matter
centers on the question of a bona fide
and reasonable defence in the context of a liquidation application.
What does a bona fide
and reasonable dispute in respect of a
creditor’s claim mean in the circumstances of the matter?
FOUNDING
AFFIDAVIT
[2]
The applicant, a dose corporation which renders quantity surveying
services, applies for the winding
up of the respondent
[3]
The applicant’s application is premised on the provisions of
section 345
[1]
of the repealed
Companies Act, Act 61 of 1973 (the 1973 Companies Act), which has
continued existence by virtue .of the transitional
provisions
contained in the Companies Act 71 of 2008 (the 2008
Companies Act),
The
applicant relies on a notice in terms of
section 345
dated 14
March 2017 served on the respondent’s registered address.
Section 345 of the 1973
Companies Act is
applicable to Close
Corporations-by virtue of
section 66
of the
Close Corporations Act 69
of 1984
.
[4]
The applicant alleges that the respondent is Indebted to it in the
amount of R168,150 In respect of
quantity surveying services
rendered. The amount of R168,150 is made up of three different
invoices, invoice number 1028 dated
8 December 2016 in the
amount of R37,050,invoice number 1029 dated 8 December 2016 in the
amount of R44,460 and Invoice number
1033 dated 7 March 2017 In the
amount of R86,6740.
[5]
Invoice 1028 pertains to quantity surveying services rendered in
respect of the Willowood Park Retail
Development Invoice 1029
pertains to quantity surveying services rendered in respect of the
Black Mountain Gamsberg project Invoice
1033 pertains to quantity
surveying services rendered In respect of tender preparation for 4
different projects.
[6]
Invoices 1028 and 1029 were forwarded to the respondent by way of
email on 8 December 2016. This
was followed up by e-mails dated
respectively 24 January 2017 and 6 February 2017, enquiring about
payment. On 7 March 2017 the
applicant forwarded invoice 1033. On the
same day the respondent alleged that the work done in respect of
invoice 1033 was done
on risk, and as the respondent was unsuccessful
with the tender, the respondent was not liable for payment of the
invoice.
[7]
The respondent’s response to the
section 345
notice dated 25
April 2017, via its attorneys , was to offer payment of invoice
number 1028 (payment was only made on 16 August2017)
and deny its
indebtedness in respect of invoice 1033, as the work had been done
on-a contingency basis. The respondent also denied
its indebtedness
in respect of invoice 1029, and Indicated that it was prepared to
discuss same, with a view to reaching a compromise.
[8]
The applicant contends that as the amount of R168,150 was not paid
within 21 days of service of the
section 345
notice, the respondent
is deemed to be unable to pay Its debts, the respondent deemed to be
commercially insolvent.
ANSWERING
AFFIDAVIT
[9]
The respondent’s defence is that it paid invoice 1028. The
respondent furthermore states that
it utilised the services of the
applicant to prepare tenders. The respondent alleges that during or
about August-2015 the parties
a, greed that in the event of the
respondent being successful with a lender, the applicant would be
paid in respect to its services
so rendered. In the instances where
the respondent was unsuccessful no payment would be effected.
[10]
As far as invoice 1029 is concerned, the total provisional bill of
quantities prepared by the applicant was fora
sum of R121.639.638.12
The said tender was not accepted by the employer, instead a tender in
the amount of R74,449,754 was awarded
to the respondent. Accordingly
the respondent contends the applicant cannot claim fees in respect of
Invoice 1029.
REPLYING
AFFIDAVIT
[11]
In reply the applicant points out that it is not correct that the
tender relating to invoice 1029 was successful
It was in fact a
counter-offer that was made to the respondent which the respondent
accepted.
INTERVENING
CREITOR’S FOUNDING AFFIDAVIT
[12]
After the intervening creditor had applied for leave to Intervene, e
ordered that such leave be granted.
[13]
The intervening creditor, a landlord, also applies for the winding up
of the respondent.Its application is also
premised on the provisions
of section 345 of the 1973
Companies Act. The
Intervening creditor
relies on a notice of terms of
section 345
dated 24 October 2016
served on the respondent’s registered address, read with the
provisions of
section 344.
[14]
The Intervening creditor alleges that the respondent is indebted
to.it in 1he amount of R300,018.09 for arrear
rental. During
September 2011 or May 2012 , the intervening creditor and the
respondent concluded a lease agreement in respect
of immovable
property (the immovable property) situated at Kathu, Northern Cape.
[15]
During October 2012 the Intervening creditor and the respondent
concluded a verbal extension of said lease agreement.
The parties
agreed that the monthly rental would be subject to the 10% annual
increase as determined in in the written lease agreement
[16]
During September 2015 the respondent breached the rental agreement by
failing to pay the monthly rental of R26.620
(this rental increased
to R29 ,282 .01 during January 2016). After a few months. had passed
without any rental payment. the intervening
creditor cancelled the
lease agreement by way of correspondence dated 26 July 2016. Therein
the intervening creditor also requested
payment of all outstanding.
monies, The letter of cancellation was followed up by way of e-mails
dated respectively 1 August 201
6 and 1 September 2016, requesting
payment.
[17]
The
section 345
notice dated 24 October 2016 was answered by way of
the respondent’s attorneys’ correspondence dated 11
November 2016
Therein the respondent's indebtedness Is denied, and a
request is made for an exposition oi the amount claimed.
[18]
Due to the respondent’s failure. to comply with the
section 345
notice the. Intervening creditor submits that the respondent is
deemed to be unable to pay its debts. The Intervening creditor
submits that the respondent is commercially insolvent.
RESPONDENT’S
ANSWERING AFFIDAVIT TO INTER VENING.CREDITORS’ FOUND ING
AFFIDAVIT
[19]
In answer the respondent states that on 30 June. 2016 it concluded a
purchase agreement with the intervening creditor
in respect to the
immovable property for the amount of R2,500,000.The respondent
alleges that it was agreed that the respondent
would build a store on
the immovable property. Improvements to the immovable property were
done during 2014 and 2015. The respondent
alleges that these
improvements amount to R1,400,000. The respondent attaches a
valuation of the immovable property In the amount
of R2.700,000.
[20]
The respondent could not obtain a bond. However, the respondent
alleges it was agreed that it would no longer be
liable to pay
rental, in exchange for the improvements to the immovable property,
Such oral agreement was concluded after 30 June
2016. The respondent
denies being indebted to the intervening creditor in the sum of
approximately R300,000. it having been agreed
that the intervening
creditor would not claim or be entitled to payment of said amount.
INTERVENING
CREDITOR’S REPLYING AFFIDAVIT
[21]
In reply the intervening creditor contends that bearing in mind that
the purchase price for the Immovable property
was R2,500,000 , and
the Immovable property was valued at R2,700,000, the respondents
version that It effected improvements to
the value of R1,400 ,000 is
Implausible . It would mean !hat the respondent paid for the
improvements twice, the first lime when
the Improvements were
effected,and the second time when the respondent was prepared to pay
the Increased value of the Immovable
property as the purchase price.
[22]
Further more, the intervening creditor points out that the respondent
ignored the e-mails demanding payment of
the arrear rental. Only on
11 November 2016 the respondent’s attorneys denied liability on
behalf of the respondent The defences
now raised by the respondent
were not raised by itself or its .a attorneys, while It Is evident
that such a defence already existed
at the time. The respondent never
raised the defence In correspondence with tile intervening§
creditor .
[23]
The Intervening creditor submits that the only reasonable inference
to be drawn is that the respondent’s
defence is a contrived
defence. The intervening creditor submits it can be rejected on the
papers alone.
DISCUSSION
OF APPLICANT’S CASE
[24]
In argument the applicant submits that even on the respondent’s
defence of the agreement in respect of work
done on risk, the
applicant was entitled to payment in respect of invoice 1029 The work
that had to be done remained exactly the
same, notwithstanding the
reduction in the tender price. The tender was granted to the
respondent on the strength of the tender
documents prepared by the
applicant. The applicant contends that the defence of it not being
entitled to any payment due to a reduction
in the tender
price,-stands to be rejected as simply untenable and far-fetched.
[25]
The question I need to determine is whether the applicant’s
claim is disputed on bona fide and reasonable
grounds. I need not
concern myself in this regard with Invoice 1028, it having been paid
. I can also not state that the defence
in respect of invoice 1033.is
not disputed on bona fide and reasonable grounds.The applicant knew
the work in respect of invoice
1033 was done for tender purposes,
that the respondent may not obtain the tender. Under such
circumstances does not appear implausible
that the parties would
agree that payment for services rendered would only occur if the
tender is successful
[26]
However, the same can’t be said in respect at Invoice 1029.The
respondent’s defence Is that the parties
a reed that in the
event of the respondent -being successful with a tender, the
applicant would be paid in respect of its services
so rendered. On
the respondent’s own version the tender was materially
successful. On the respondent’s own version,
the applicant was
entitled to payment in respect of invoice 1029.
[27]
I find it palpably implausible that the parties would agree that in
the event of the tender not being awarded in
the exact amount as
tendered the applicant would not be entitled to any remuneration and
all its work would go up in smoke. This
appears far-fetched.
[28]
The work done by the applicant in respect of invoice 1029 remained
the same, despite the reduction
of the tender price. Even if I were
to accept 1hat this meant a concomitant reduction of the applicant’s
Invoice 1029 (which
seems implausible, bearing In mind that the work
done remained the same), it would have required of the respondent to
at least
make payment of a substantial portion of the invoice. The
lack of response to make part payment of the invoice, further
Indicates
that the respondent’s defence is not bona fide and
reasonable.
[29]
The fact that the respondent did not respond to the demands for
payment in respect of invoice 1029 in the period
December 2016 to
February 2017, also, serves to indicate a lack of bona fides in
respect of the respondent's defence pertaining
to invoice 1029.
Surely the respondent would have indicated then already that it
disputed liability, If that was indeed the case
I must lake
cognisance of such lack of candour , in determining the bona fide and
reasonable nature. of the defence.
[30]
In the matter of Van Wyk Von Ludwig & Hanekom Inc. v Ferguson
[2]
a party’s lack of candour, albeit in the context of an
answering affidavit, is dealt with as follows:
“
In
my view the respondent's lack of candour and respect for the truth
leaves much to be desired. His promises and undertakings carried
very
little weight .His denials and explanations are suspect… ln my
opinion he was not very frank, open and truthful to
the court about
his· financial affairs. On the evidence. before me, I
therefore have serious doubts about the credibility
of the
respondent.”
[31]
Taking into consideration the so-called Badenhorst principle
[3]
. I find that the debt in respect of invoice 1029 is not disputed on
reasonable and bona fide grounds.
DISCUSSION
OF INTERVENING CREDITOR’S CASE
[32]
The respondent’s defence in respect of the intervening
creditor’s claim is an agreement
that it would no longer be
liable lo pay rental, in exchange for the improvements to the
immovable property. that such oral agreement
was concluded after 30
June 2016. I must assess this defence in the light of what happened
In that time period.
[33]
This intervening creditor cancelled the lease agreement on 26 July
2016, and requested payment of all outstanding
monies. This was
followed up by way of e-mails dated respectively 1 August 2016 and 1
September 2016 requesting payment This correspondence
happened in the
time period the respondent says the agreement absolving it -from
rental was concluded.
[34]
I find It palpably implausible that the respondent would after June
2018. during the same period as the intervening
creditor’s
correspondence, conclude an agreement in terms whereof it Is not
liable for rental, but then not mention the agreement
ln response,
when called upon to pay. It makes little sense to conclude an
agreement, but in the same time period then not to rely
thereon. It
is farfetched to allege the conclusion of the agreement under such
circumstances.
[35]
This is further exacerbated by the respondent's attorney’s bold
denial of liability on 11 November 2016·,
and the request for
an exposition of the amount claimed. Such request for an explosion of
the amount claimed conflicts with the
respondent’s version that
the Intervening creditor agreed that -the amount claimed written off.
Had such agreement existed,
there would have been no need for the
respondent’s attorney to request an exposition, as the- amount
had been agreed upon
and written off.
[36]
Accordingly I find that the intervening creditor’s debt is not
disputed on reasonable and bona fide grounds.
I find that the
respondent should be wound up on the basis of
section 345(1)(a)(i)
,
read with section 344(f) of the 1973
Companies Act.
ORDER
Accordingly
I order as follows:
The
intervening creditor be joined as second applicant in the
application;
The
respondent be placed under final winding-up;
Both
the costs of the applicant’s application and that of the
intervening creditor be costs in the winding-up of the respondent
M
VAN STADEN
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
DATE
OF HE ARING: 11 FEBRUARY 2020
DATE
OF JUDGMENT: 19 FEBRUA'RY 2020
ATTORNEY
FOR APPLICANT:
STRYDOM & BREDEN.KAMP INC
ADVOCATE-
FOR APPLICANT:
ADV KLEIN
ATTORNEY
FOR RESPONDENT:
JAN ROSSOUW ATTORNEYS
ADVOCATE
FORRESPONDENT:
ADV NEL
[1]
Section
345
determines:
“
(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
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 any body 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 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; or
(b)
any process issued on a judgment, decree or order of any court in
favour of a creditor
of the company is. returned by the sheriff or
the messenger-with an endorsement that he has not found sufficient
disposable property
to satisfy the judgment decree or order or that
any disposable property found did not upon sale satisfy such
process; or
(c)
It is proved to the satisfaction of the Court that the company is
unable to pay
its debts.
(2)
ln determining for the purpose of subsection (1) whether a company
Is unable to
pay its debts, the Court shall also take into account
the contingent and prospective liabilities of the
company.”
[2]
[2001] 2 AII SA 592 C at 598.
[3]
Badenhorst v northern Construction Enterprises (Pty) Ltd 1956(2) SA
346 (T) at 348A-C.