About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2019
>>
[2019] ZAGPPHC 110
|
|
Dredging Africa (Pty) Ltd v Master Chemicals South Africa (Pty) Ltd (79186/2017) [2019] ZAGPPHC 110 (26 March 2019)
IN THE HIGH COURT OF SOUTH
AFR
I
CA
(GAUTENG DIVISION, PRETORIA)
(1)
REPORTABLE:
YES
/NO
(2)
OF
INTEREST TO OTHER JUDGES:
YES
/NO
(3)
REVISED:NO
Case No. 79186/2017
26/3/2019
In
the matter between:
DREDGING
AFRICA (PTY) LTD
APPLICANT
And
MASTER
CHEMICALS SOUTH AFRICA (PTY) LTD
RESPONDENT
JUDGMENT
MILLAR,AJ
1.
This
is an unusual matter in which there are two different legal
proceedings brought under one case number. Enrolled for hearing
before me was an application for the liquidation of the respondent.
The facts of such an application is ordinarily unremarkable.
What
makes this matter remarkable is that the liquidation proceedings were
instituted simultaneously with action proceedings under
the same case
number.
2.
Civil
litigation may be instituted through either motion proceedings or by
action proceedings. This is commenced by the issue of
process by the
Registrar in terms of Rule 3 of the Uniform Rules of Court ("the
Rules"). In the case of motion proceedings,
the process that is
issued is a notice of motion in terms of Rule 6 and in the case of
action proceedings, a summons in terms of
Rule 17.
3.
Rule
3 refers to the
" issue of
process"-
either by way of
motion or by way of action. The Rule self-evidently contemplates the
birth of a single process and not that of
non-identical twins as
occurred in the present matter.
4.
On
23 November 2017, the applicant in the present matter proceeded to
institute motion proceedings for the liquidation of the respondent.
Simultaneously therewith, the applicant also instituted action
proceedings for the recovery of a debt for which it claimed the
respondent was liable. Inexplicably both of the application for
liquidation as well as the summons were issued bearing the same
case
number.
5.
The
two processes were served on the respondent at the same time. The
respondent gave notice to oppose the liquidation proceedings
and
entered appearance to defend the summons. The respondent filed a
notice in terms of Rule 6(5)(d)(iii) giving notice of its
intention
to argue points of law in the liquidation proceedings but filed no
affidavit in answer. In the action proceedings, a
plea was delivered,
and pleadings closed. Thus,
litis
contestation
was reached in respect
of each of the cases made out in the two different processes.
6.
The
processes issued under the same case number are fundamentally
different. While it is so that the liquidation proceedings may
have
the effect of enforcing the payment of a debt, this is not the
purpose which is to protect the
concursus
creditorum.
The action proceedings
have as their sole purpose, the enforcement of the payment of the
debt.
7.
The
two separate proceedings are irreconcilable under the same case
number having regard to their nature, their purpose and the
different
procedures laid down in the Rules for the adjudication of each. The
applicant cannot claim that the respondent is insolvent
and seek an
order for its liquidation and at the same time engage it in trial
proceedings in which the existence of the very debt,
the non-payment
of which founds the liquidation proceedings is in dispute.
8.
I
raised this anomaly with counsel for the applicant when the matter
was called and after some debate, the applicant withdrew the
action
proceedings and tendered the respondent's costs in respect thereof.
The matter then proceeded in respect of the liquidation.
9.
The
crux of the dispute in this application was whether there was a
"debt" owed by the respondent to the applicant. I
n
anticipation of the award of a tender for the clearing and dredging
of certain sludge dams within the Tshwane Municipal area,
the
respondent had sought, and the applicant had furnished a quotation
for the execution of such work. The quotation was in writing
and was
dated 27 July 2016. There were further negotiations between the
parties and on 30 July 2016, and the respondent delivered
a
counter-offer in which the price quoted was accepted subject to the
exclusion of certain conditions in the original quote. The
applicant
accepted the counter-offer with the exclusion of the specific
conditions in the original quote on 4 August 2016. The
work
progressed and payments were made by the respondent to the applicant.
This was common cause between the parties.
10.
The
dispute between the parties lies in respect of two aspects. Firstly,
the original quote of 30 July 2016 had expressed the price
as R1 436
000,00 (excluding VAT) however the counter offer simply referred to a
price of R1 436 000,00 with no reference to VAT.
Secondly, the
respondent contends that on 19 October 2016, a further oral agreement
was entered into in terms whereof the original
price was reduced to
R1 219 040,00 due to a reduction in the scope of the work from 3 dams
to one and also that this price was
subject to the applicant removing
22 000 cubic metres of silt. If less than this amount of silt was to
be removed the price would
be adjusted downward pro-rata.
11.
The
respondent filed no answering affidavit in the liquidation
application, but its dispute of the debt is set out in the plea filed
in the action proceedings and the Rule 6(5)(d)(iii) notice.
12.
On
29 November 2016, the applicant invoiced the respondent for the
balance it claimed was due. On 10 January 2017, the respondent
wrote
to the applicant and disputed the amount claimed and that 22 000
cubic metres of silt had been removed. The respondent claimed
only 8
200 cubic metres of silt had been removed. Correspondence was
exchanged between the parties, but this did not result in
any
resolution of the dispute. On 10 February 2017, a notice in term of
section 345 of The Companies Act 1973 was dispatched to
the
respondent. Thereafter on 20 November 2017, both the liquidation
application and summons were issued and served on the respondent.
13.
The
founding affidavit in the liquidation is silent on the dispute raised
by the respondent. It refers to the price of R1 436 000,00
but makes
no mention of VAT. It refers to the payments received and indicates
that these were
"(VAT
EXCLUSIVE)".
Furthermore, the
statement summary attached to the founding affidavit and which
reflects the amount of the debt in the sum of R920
404,35 also
provides for unapproved work done as well as VAT on the original
price. It also specifically refers to
"excavation
of 22 000m
3
of sludge and disposal thereof "
The
founding affidavit is silent on the respondent's dispute raised as
early as 10 January 2017.
14.
The
respondent besides raising the dispute in regard to the debt, to
which I shall return, also sought to impeach the founding affidavit.
This was on the basis that the Commissioner had not printed his full
name and business address below his signature
[1]
. In the instant matter the commissioner was a police officer at the
Garsfontein Community Service Centre and the stamp of the
Centre
together with his signature and force number appear below his
signature.
15.
The
respondent referred me to Nkondo v Minister of Police &
Another
[2]
as support for the proposition that the founding affidavit has
consequently not been properly commissioned and should be
disregarded.
I disagree, the complaint in this case is of a technical
nature and does not go to whether the affidavit was in fact
commissioned
or not. If there is a failure to comply with the
regulation, then this was not in respect of the administration of the
oath but
simply in respect of compliance with the regulation once the
oath had been administered. The purpose of the regulation is so that
the commissioner of oaths can be identified and located if necessary.
16.
In
re Malefane v Standard Bank of SA Ltd
[3]
it was held that:
"In Ex Parle Du Toit
1962
(1) SA 445
(E) the usual endorsement that the deponent knows and
understands the contents of the affidavit was wanting from the
affidavit
in question. The Court stigmatized the defect as
a
formal defect and
condoned non-compliance. I agree with the approach of the Court in
that case. In the present case the deponents
have acknowledged that
they knew and understood the contents of the relevant affidavits as
required by reg 4. The only defect is
that reference is made to
Government Notice 35 of 14 March 1980 instead of Government Notice
R1258 of 21 July 1972 as amended.
I am of the view that this is
a
formal defect and
that there has been substantial compliance with reg 4 in respect of
all the impugned affidavits. Non-compliance
with reg 4 is accordingly
condoned. There is no need for a substantive application."
17.
The
defect complained of in the present matter is to my mind for the
reasons set out above, one of a formal nature. I find that
there has
been substantial compliance with regulation 4 and that no substantive
application for condonation thereof is necessary.
18.
In
regard to the disputed debt, in Badenhorst v Northern Construction
Enterprises (Pty) Ltd
[4]
it was stated:
" An application for the
liquidation of
a
company should
not be resorted to to enforce the payment of a debt which is bona
fide disputed by the company. The liquidation of
a company affects
the interests of all creditors and share-holders, and an order for
its liquidation should not be lightly granted
on the application of
a
single creditor."
19.
It
was argued by the respondent that its dispute of the debt was on
bona
fide
and reasonable grounds. The
applicant for its part argued that since the respondent had not filed
any answering affidavit, there
was nothing before the court in regard
to the dispute.
20.
For
this proposition, the applicant relied on Payslip Investment holdings
CC v Y2K Tech Ltd
[5]
where the court held:
"With reference to
disputes regarding the respondent's indebtedness, the test is whether
it appeared on the papers filed of
record that the applicant's claim
is disputed on reasonable and bona fide grounds. In this event it is
not sufficient that the
applicant has made out a case on the
probabilities. The stated exception regarding disputes about an
applicant's claim thus cuts
across the approach to factual disputes
in general."
21.
In
the instant case, the papers filed of record are not limited only to
those specific to the application. The anomalous situation
of both
the application and action proceedings being conducted under the same
case number means that the documents filed in respect
of the action,
are at least insofar as the issue of the debt is concerned "filed
of record". The plea to the summons
and particulars of claim
deals specifically with the allegations relating to the indebtedness
and sets out with sufficient particularity
the respondents defence
thereto.
22.
Even
though the applicant withdrew the action at the hearing of this
application, the documents "filed of record" in regard
to
it are still before the court and merit consideration for the proper
determination of whether the debt is disputed on bona fide
and
reasonable grounds.
23.
The
test to be applied is set out in Hulse-Reutter and Another v Heg
Consulting Enterprises (Pty) Ltd (Lane and Fey NNO lntervening)
[6]
where the court held:
"I think it is important
to bear in mind exactly what the trustees have to establish in order
to resist this application with
success. Apart from the fact that
they dispute the applicants' claims, and do so bona fide,
..
.what they must
establish is no more and no less that the grounds on which they do so
are reasonable. They do not have to establish,
even on the
probabilities, that the company, under their direction, will, as
a
matter of fact,
succeed in any action which might be brought against it by the
applicants to enforce their disputed claim. They
do not,
..
.have to prove
the company's defence in such proceedings. All they have to satisfy
me of is the grounds which they advance for their
and the company's
disputing these claims are not unreasonable
..
.it seems to me
to be sufficient for the trustees in the present application, as long
as they do so bona fide,
...
to allege facts
which, if proved at trial, would constitute
a
good defence to
the claims made against the company."
24.
After
receiving the applicants' invoice at the end of 2016, the respondent
immediately raised a dispute. This was before any formal
demand for
payment was made. Thereafter, a full 10 months before any legal
proceedings were instituted. The dispute was not raised
to impede or
otherwise frustrate the proceedings, predating them. Notwithstanding
the dispute having been raised, the applicant
proceeded and, as is
evident from the application, simply ignored the dispute. In these
circumstances it can hardly be said that
the respondent was not
bona
fide.
25.
The
grounds upon which the dispute is founded were set out in the
respondent's letter of 10 January 2017 and reiterated in the plea
filed in response to the action. If the respondent is able to
establish the oral agreement of 19 October 2016 and its terms, which
I might add were not wholly inconsistent with their prior dealings,
then the question of the specific amount of silt and sludge
removed
is directly relevant to the determination of the debt.
26.
The
applicant argued that I should find that a portion of the debt is due
and that even if an amount of at least R100 is due to
the applicant
by the respondent
[7]
,
then I should find that there is a debt due and grant the order
sought.
27.
I
am not persuaded by this argument. The applicant asserted that the
full amount of the debt was due but having regard to the statement
of
account which it relied upon, notwithstanding the dispute, the amount
of the indebtedness would not be for the amount claimed
having regard
to the items in it relating to the unapproved works as well as the
VAT. The applicant asserted the debt as a whole
as being due and it
follows, that the establishment of a
bona
fide
and reasonable dispute as to
the existence of the debt must be in respect of the whole debt.
[8]
28.
Before
the applicant embarked on any litigation, it knew that the respondent
disputed the debt and the specific grounds upon which
the dispute was
founded. Notwithstanding this, it proceeded with motion proceedings
and furthermore advertently and deliberately
omitted any reference to
the dispute from its founding papers.
[9]
The conduct of the applicant in this regard is to be deprecated. The
respondent argued that the application for liquidation
was,
when considered against the raising
of the dispute 11 months before either the application or action
proceedings were instituted,
an abuse of the process of the court. I
find merit in this argument and intend to make a punitive costs
order.
29.
In
the circumstances, I make the following order:
29.1 The
application is dismissed with costs on the scale as between attorney
and client.
A
MILLAR
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
HEARD
ON:
20 MARCH 2019
JUDGMENT
DELIVERED ON:
26 MARCH 2019
COUNSEL
FOR THE APPLICANT:
ADV. B STEYN
INSTRUCTED
BY:
ROELF NEL INC.
REFERENCE:
MR R NEL
COUNSEL
FOR THE FIRST RESPONDENT: ADV. D HODGE
INSTRUCTED
BY:
TSHABALALA ATTORNEYS
REFERENCE:
MR. R TSHABALALA
[1]
See section 7 read together with regulation 4 promulgated in terms
of section 10 of the Commissioners of Oaths and Justices of
the
Peace Act 16 of 1963.
[2]
1980 (2) SA 362
(0) at 367 and also 369
[3]
2007 (4) SA 461
(fk) at 4658-0
[4]
1956 (2) SA 346
(T) at 346G-H; Kalil v Decotex (Pty) Ltd and Another
1988 (1) SA 943 (A)
[5]
2001 (4) SA 781
(C) at 7831
[6]
1998 (2) SA 208
(C) at 219E- 220A
[7]
Section 344(f) read together with section 345(1)(a) of the Companies
Act 61 of 1973
[8]
Walter McNaughtan (Pty) Ltd v Impala Caravans (Pty) Ltd
1976 (1) SA
189
(W) at 192A
[9]
The position was usefully summarized by Moshidi J in Scania Finance
Southern Africa (Pty) Ltd v Go-Liner Tours (Pty) Ltd (2010/50597)
[2011] ZAGPHC 99
(12 August 2011)-"ln dealing with disputes of
fact in motion proceedings, Conradie J in
Cullen v Haupt
1988
(4) SA 39
(C) at p 40F-H, said: "/
have consulted some of
the better known decisions concerning the referral of applications
to evidence or to trial. The leading
decision in this regard is, of
course, Room Hire
Co
(Pty) Ltd v Jeppe Street Mansions (Pty)
Ltd
1949 (3) SA 1155
(T) at 1162, where Murray AJP said that if
a
dispute cannot properly be determined it may either be referred
to evidence or to trial, or it may be dismissed with costs,
'particularly
when the applicant should have realised when launching
his application that
a
serious dispute of fact was bound to
develop'. The next of better known cases on this topic is that of
Conradie v Kleingeld
1950 (2) SA 594
(0) at 597, where Horwitz J
said that
a
petition may be refused where the applicant at
the commencement of the application should have realised that
a
serious dispute of fact would develop.
" More recently
in
National Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009 (2)
SA 277
(SCA) at para
[26]
, Harms DP said: "Motion
proceedings,
unless concerned with interim relief. are all about the resolution
of legal issues based on common cause facts. Unless
the
circumstances are special they cannot be used to resolve factual
issues because they are not designed to determine probabilities.
It
is well established under the Plascon-Evans rule that where in
motion proceedings disputes of fact arise in the affidavits,
a
final order can be granted only if the facts averred in the
applicant's (Mr Zurna's) affidavits, which have been admitted by the
respondent (NDPP), together with the facts alleged by the latter,
justifies such order. It may be different if the respondent's
version consists of bald or uncreditworthy denials, raises
fictitious disputes of fact, is palpably implausible, far-fetched
or
so clearly untenable that the court is justified in rejecting them
merely on the papers
... "