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[2019] ZANCHC 27
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Rajah v Graven Motorsport (1184/2018) [2019] ZANCHC 27 (7 June 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTHERN
CAPE HIGH COURT, KIMBERLEY)
CASE
NO.: 1184/2018
Date
heard: 02-11-2018
Date
delivered: 07-06-2019
In
the matter between:
Muhammad Raziek
Rajah
Applicant
and
Graven
Motorsport (PTY) LTD
Respondent
CORAM:
WILLIAMS J:
JUDGMENT
WILLIAMS
J:
1.
The
Applicant, Mr Muhammed Raziek Rajah, instituted proceedings for the
liquidation of the respondent, Graven Motorsport (Pty) Ltd,
on the
basis that the respondent was unable to pay its debts as described in
sec 345 of the Companies Act 61 of 1973, (the Act).
2.
The applicant alleged in his founding papers four claims which the
respondent refused and/or failed
to pay.
2.1 The
first claim was one of R75 000, 00 which related to the double
payment to the respondent for the
purchase of a V10 Dodge Challenger
engine in the amount of R75 000, 00 on 23 and 29 June 2017.
2.2 The
second claim is one for R90 000,00, being the amount allegedly
paid by the applicant on behalf of
the respondent as its contribution
to a drift racing event/s and which the respondent has not repaid as
undertaken.
2.3 The
third claim relates to the failure by the respondent to pay the
applicant the purchase price of a Razor
GTR custom car kit in the
amount of R65 000 00.
2.4 The
fourth claim relates to the respondent’s failure to pay its
share of R5 000, 00 for the branded
caps made for the drift
events.
3.
The
respondent opposed the liquidation application and in its opposing
affidavit admitted undertakings made between the parties
in relation
to the second to fourth claims, however it denied the amounts claimed
to be due and owing under the second and fourth
claims
inter
alia
since
no proof of payment by the applicant with regard to the second claim
is attached to the founding affidavit and with
regard to claim four
no VAT invoice was supplied to the respondent as proof of the actual
expenses incurred by the applicant.
4.
With regard to the third claim, the respondent stated that the custom
car kit supplied by the applicant
was unusable and that the applicant
was informed thereof and the return of the car kit was tendered.
5.
With
regard to the first claim, the respondent took two points in limine –
that of lack of
locus
standi
and non-joinder. The
locus
standi
point was raised on the basis that not the applicant but Good Hope
Plasterers CC t/a as Good Hope Construction/ Good Hope Construction
Racing, had paid the R75 000, 00 claimed to be due and owing.
The non-joinder issue relates to the fact that the R75 000,
00
claimed was not paid into the account of the respondent but into the
account of an entity named LC and RP Transport CC. The
contention is
thus that LC and RP Transport is the entity which should pay back the
amount claimed and should therefore have been
cited as a party to the
proceedings.
6.
In
addition the respondent contends that the applicant owes it R251 142.
00 for repairs effected to the Dodge vehicle and intended
to issue
summons against applicant or counterclaim for payment of the amount.
7.
Despite
the defences raised, specifically to the first claim, the respondent,
after delivering the opposing papers, in fact paid
the applicant on
21 September 2018 the amount of R75 000,00 in settlement of this
claim.
8.
The
applicant thereafter in its replying affidavit conveyed its intention
not to proceed with the liquidation application since
payment
relating to the first claim had been made to him in the meantime and
the remaining claims have resulted in a dispute of
fact, which
although spurious would best be resolved in action proceedings
against the respondent.
9.
The
only issue thus remaining between the parties in this application is
that of costs.
10.
The
applicant is of the view that the respondent should pay the costs of
the application since; (i) it is the respondent’s
non-response
to the sec 345 demand which resulted in the application being
brought; and (ii) the respondent thereafter opposed
the application
just to turn around and pay a substantial portion of the claim.
The contention is therefore that the application
would not have been
brought had the respondent paid the R75 000,00 which was due to
the applicant, within the three week period
provided for in sec 345
of the Act.
11.
The
respondent on the other hand, holds the view that the application
would in any event have failed due to the applicant’s
lack of
locus standi and the material dispute of facts which the applicant
was aware of before launching the application.
It therefore
contends that the applicant should bear the costs of the application,
on the attorney and client scale.
12.
As
far as the
locus
standi
defence is concerned I do not intend to deal with it in any great
detail, since I am of the view that this is an opportunistic
defence,
just as the
in
limine
point of non-joinder, which quite noticeably has not been pursued
during argument. The respondent in its opposing affidavit
is
quite clearly ambivalent and contradictory in its own view on who the
entity is it had transacted with in connection with the
upgrade of
the Dodge Challenger, the subject matter of the applicant’s
first claim. In one instance the deponent to
the opposing
affidavit, Mr Otto Graven, the shareholder and director of the
respondent, remarks generally that his dealings with
regard to
repairs of drifting motor vehicles were with the applicant and/or
GHCR. He thereafter states that, regarding the
specific Dodge
Challenger transaction, he was under the impression that the
applicant acted on behalf of Good Hope Plasterers CC
t/a GHCR.
He later mentions that the applicant and/or Good Hope Plasterers CC
paid an additional amount of R30 000, 00 towards
the upgrade of the
Dodge Challenger. The only basis for the challenge to the
locus
standi
of the applicant regarding this claim is that the double payment of
R75 000, 00 emanated from the bank account of Good Hope
Plasterers CC. This issue was in any event put to rest when Mr
Graven made payment of the R75 000, 00 to the applicant.
13. The
more cogent argument is that concerning the dispute of facts.
On 11 April 2018, almost one and a
half months before the application
for liquidation was launched, the respondent presented an invoice
relating to the “
Dodge
Build and Storage”
and which forms the basis for its intended counterclaim against the
applicant. The applicant in his founding affidavit refers
to
this invoice as being “
contrived”
as a direct result of the sec 345 demand. He furthermore denies
that he is responsible for payment of the services and repairs
since
the invoice is addressed to Good Hope Construction, seemingly
forgetting that he claims to have entered into the agreement
for the
upgrade of the Dodge in his personal capacity. The applicant
should have foreseen that a material dispute of facts
would arise
from this issue.
14.
Likewise, as appears from an e-mail dated 21 May 2018 emanating from
the applicant himself, he knew before
instituting the application
that the respondent wanted to return the Razor GTR kit which forms
the basis of the third claim referred
to herein-above. The
dispute relating to this issue was thus also known to the applicant
beforehand.
15. An
applicant who brings an application for liquidation after it has
become clear that a debt is disputed,
and such a dispute cannot be
resolved merely on the papers, as the applicant apparently does
appreciate, having withdrawn the application,
is said to abuse the
process of the Court. In
Badenhorst
v Northern Construction Enterprises (Pty) Ltd 1956(2) SA 346 (T) at
347-348,
what has become known as the “
Badenhorst
rule,”
was
formulated and which loosely paraphrased is that,
liquidation
proceedings ought not to be resorted to in order to enforce payment
of a debt, the existence of which is
bona
fide
disputed since the procedure for liquidation is not designed for the
resolution of disputes as to the existence or non-existence
of a
debt.
16. Ms
Snyders who appeared for the respondent is correct in her contention
that the application would have been
dismissed on this basis had it
been pursued and that the respondent should not have to bear the
costs of an abortive application.
17. I
am however not of the view that the respondent should be rewarded for
its lackadaisical approach towards
paying its debts and the attitude
it has taken on the issue of
locus standi
, by ordering the
applicant to pay attorney client costs. A fair costs order in
my view is one where the applicant has to
pay for the costs of the
application on a party and party scale.
The
following order is made:
The
applicant is ordered to pay the respondent’s costs relating to
the withdrawn application on the party and party scale.
CC
WILLIAMS
JUDGE
For
Applicant:
Adv DC Jankowitz
Van de Wall Inc
For
Respondents: Ms J Snyders
Engelsman, Magabane Inc