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[2019] ZAFSHC 106
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Moselane v Ikageng Electrical Contractors (Pty) Ltd and Others (2391/2019) [2019] ZAFSHC 106 (18 June 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 2391/2019
In
the matter between:
GOITSEONE
JONAS MOSELANE
Applicant
and
IKAGENG
ELECTRICAL CONTRACTORS (PTY) LTD
1
st
Respondent
VOLTEX
(PTY) LTD T/A
LIGHTING
STRUCTURES AND ATLAS GROUP
2
nd
Respondent
ABSA
BANK (PTY) LIMITED
3
rd
Respondent
CORAM:
MOROBANE,
AJ
JUDGMENT:
MOROBANE,
AJ
HEARD
ON:
13
JUNE 2019
DELIVERED
ON:
18
JUNE 2019
[1]
The
applicant launched an urgent application seeking an order placing the
first respondent under supervision and business rescue
in terms of
section 131 of the Companies Act 71 of 2008 (“the Act”).
The application is opposed by the second respondent.
[2]
At
issue is that the applicant alleges that the first respondent is
financially distressed within the meaning of section 128(1)(f)
of the
Act in that it appears to be reasonably unlikely for it to pay all of
its debts as they become due and payable. The first
respondent is
indebted to the second respondent in the amount of R10 148 241.49 and
to the third respondent in the amount of R16
000 000.00, which
amounts are respectively due, owing and payable. The first
respondent, a large trading enterprise specialising,
among others, in
the installation and maintenance of electrical equipment and wiring,
has two shareholders. That is, the applicant,
who is also the sole
director, with 90% of the shares and his wife with the remaining 10%
of the shares. He also alleges that the
business rescue application
is urgent.
[3]
There
was no appearance for the third respondent, but a “Clarification
Affidavit” was filed on its behalf and abides
the decision of
the Court. The third respondent explained that its exposure to the
first respondent’s business as at 27 May
2019 from a cheque
account with an overdrawn balance of R17 490 595.00 to arrears in
other accounts. The third respondent disputes
the applicant’s
averments that ‘the third respondent is not enforcing its
rights and claims at this stage but prefers
to await the outcome of
this application which it supports before doing so’ and others
as incorrect. It further confirmed
that on 10 May 2019, the third
respondent has issued summons under case number 2052/2019 against the
first respondent with the
applicant as surety on ten instalment sale
agreements regarding which it fell in arrears with the instalment
payments.
[4]
The
third respondent has denied the averments that it is not enforcing
its rights and claims against the first respondent. To the
contrary,
it has already issued summons against the first respondent and
cancelled all the agreements. The return of the financed
items and
other remedies are thereby claimed.
[5]
Prior
to the issuing of this application, the second respondent launched an
application for the winding-up of the first respondent
(“the
liquidation application”) under the case number 2247/2017. On
22 May 2019 the liquidation application was served
on the first
respondent and it filed its opposition. The liquidation application
is pending before the Court.
[6]
The
issue in these proceedings is that of urgency. Counsel for the second
respondent, submitted that these proceedings lacked urgency
as
contemplated in the Uniform Rules.
[7]
An
urgent application must be brought in terms of provisions of Rule
6(12) of the Uniform Rules, which read as follows:
‘
(a)
In urgent applications the court or a judge may dispense with the
forms and service provided for in these rules and may dispose
of such
matter at such time and place and in such manner and in accordance
with such procedure (which shall as far as practicable
be in terms of
these rules) as to it seems meet.
(b)
In every affidavit or petition filed in support of any application
under paragraph (a) of this sub rule, the applicant shall
set forth
explicitly the circumstances which he avers render the matter urgent
and the reasons why he claims that he could not
be afforded
substantial redress at a hearing in due course.’
[8]
The
applicant must demonstrate to the Court that the matter is urgent
and, if not treated as such, he/she would suffer a loss. In
Caledon
Street Restaurant CC v Monica D’ Aviera
[1988] JOL 1832
(SE) at
7-8 the court said:
‘
It
is incumbent on the applicant to persuade the court that the non-
compliance with the rules and the extent thereof were justified
on
the grounds of urgency. The intent of the rules is that a
modification thereof by the applicant is permissible only in the
respects and to the extent that is necessary in the circumstances.
The applicant will have to demonstrate sufficient loss or damage
were
he to be compelled to rely solely or substantially on the normal
procedure. The court is enjoined by rule 6 (12) to dispose
of an
urgent matter by procedures “which shall as far as practicable
be in terms of these rules”. That obligation must
of necessity
be discharged by way of the exercise of a judicial discretion as to
the attitude of the court concerning which deviations
it will
tolerate in a specific case.’
[9]
On
the urgency of the application, the applicant relies on the following
grounds: he was confident that the negotiations with the
second
respondent to enter into a payment plan would result in the first
respondent’s ability to receive money from its trade
debtors;
the third respondent supports these proceedings; he expects the score
rating of the first respondent will be the highest
and that there is
a strong likelihood that it will be awarded the majority of tenders;
the pending liquidation application is potentially
prejudicial to the
first respondent’s prospects of being successful in its bids;
he seeks to suspend the pending liquidation
proceedings in order to
preserve the first respondent’s business; and the relief sought
is the only available remedy to him.
[10]
The
applicant does not give tangible evidence about the harm the first
respondent would suffer if the normal procedure of the Court
were to
be followed. He stated that there is a strong likelihood that the
majority of the tenders ‘will’ be awarded
to the first
respondent. Given the processes involved in the bidding of tenders,
the statement by the applicant is highly speculative.
No evidence to
that effect was placed before me in support of the statement. The
applicant further stated that the second respondent
created the
urgency of these proceedings when it issued the liquidation
application. By launching these proceedings, the applicant
sought to
suspend the liquidation application which is pending before the
Court.
[11]
At
the outset, the applicant failed to set forth the circumstances which
renders his application urgent and the reasons why substantial
redress could not be afforded to him at a hearing in due course. The
matter has long lost any urgency in March 2019 when the first
respondent showed signs of financial distress when it found itself
unable to pay its debts to the second respondent. The liquidation
application was served on 22 May 2019 and these proceedings were
initiated eight days later. He failed to give a satisfactory
explanation as to the delay in launching this application since March
2019. I am of the view that the matter is not urgent to justify
dispensing with the form and service prescribed by the Uniform Rules
of Court. The alternative remedy is available to him by way
of
opposing the liquidation application or the granting of the final
order of liquidation.
[12]
A
proper case for urgency has not been made and the application stands
to be struck off the urgent roll.
[13]
I
accordingly make the following order:
1.
The
application is struck from the roll for lack of urgency, with costs.
V.M.
MOROBANE, AJ
On
behalf of the applicant:
Adv. I Miltz
SC with Adv. RG Cohen
Instructed
by: Blair Attorneys BLOEMFONTEIN
On
behalf of the 2nd respondent:
Adv. CD Pienaar
Instructed
by:
Lovius
Block Attorneys BLOEMFONTEIN
On
behalf of the 3rd respondent:
Symington & De Kok Attorneys
BLOEMFONTEIN