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[2018] ZAGPPHC 130
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RH Plant Hire CC v Toncon 3 Construction (Pty) Ltd ,RH Plant Hire CC v De Caivalho (16411/2017 ,16410/2017) [2018] ZAGPPHC 130 (26 February 2018)

REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case
no. 16411/2017
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between
RH
Plant Hire
CC

Applicant
and
Toncon
3 Construction (Pty)
ltd

Respondent
AND
Case
no. 16410/2017
In
the matter between
RH
Plant Hire
CC

Applicant
and
Arminda
Cabral Neves De Carvalho

Respondent
Judgment
Van
der Linde, J:
Introduction
[1]
In two matters argued together the applicant, a plant hire business,
asks for the liquidation of it s debtor, a construction
company to
which it had rented heavy plant and machinery, and for a money
judgment against a surety for the debt owed by the principal
debtor.
I will refer to the construction company as the principal debtor and
to the surety by that nomenclature
[2]
Counsel both referred indiscriminately to evidence in the one
application as evidence in the other. There was no application
for
consolidation under rule 11, but since there was no objection to
counsel' s approach, I will adopt it here.
[3]
There
was really only one central issue in the two applications, being
whether the principal debtor's disputing of its debt to the
applicant
had been shown by the debtor on a balance of probabilities to be
reasonable and bona fide. Initially there were other
issues too, such
as whether the applicant had complied with s.346(3) of the Companies
Act 61 of 1973
[1]
by furnishing
to the Master of the High Court sufficient security, but this point
was not persisted in after the certificate of
22 September 2017 was
produced.
[2]
[4]
There
was also the issue as to whether the mere fact that the debtor was
not paying its debt meant that the applicant has shown
that it is
unable to pay its debt,
[3]
and
although the point did not appear to be pressed, I will revisit it
below.
[5]
As to the debtor's indebtedness, the applicant founded its
case on
two separate contracts of letting and hiring, referred to
respectively as the Matla and Bandini contracts/projects, but
in the
course of argument the applicant abandoned reliance on the former and
persisted only in the latter. I proceed to deal with
the two issues
to which I have referred.
The
Bandini indebtedness
[6]
The applicant's claim is for R165 014.35. The aggregate of
the
invoices is R168 218.35, but the applicant allowed for a disputed
amount of R3204 in respect of diesel. The seven invoices
on which it
relies are dated from 31 October 2016 to 3 November 2016. The
applicant's case is that the Bandini indebtedness is
back-dropped by
a 22 May 2015 credit application by the debtor, approved by the
applicant, which is a generic that would regulate
the hiring of
plant. The application, which is signed by the surety on behalf of
the debtor, also constitutes the suretyship on
which the applicant
relies.
[7]
The debtor's answering affidavit disputes the indebtedness.
But it
does not dispute that the surety signed the particular credit
application form. It submits that the name of the debtor was
changed
to coincide with the name of the debtor as reflected on the
applicant's invoices. The name on the credit application and
on the
invoices is "Toncon Projects Construction", whereas the
debtor's full name is "Toncon 3 Construction (Pty)
Ltd".
But it makes no further point about this.
[8]
ft does not suggest, in particular, that the originally reflected

creditor was someone other than the applicant. Indeed, it annexes an
earlier credit application form dated 19 January
3
S.345(1)(c) of the Companies Act 1973 states superfluously that a
company is deemed unable to pay its debts if it is proved to
the
satisfaction of the court that the company is unable to pay its
debts. See Commonwealth Shippers Ltd v Mayland Properties {Pty)
Ltd,
1978 (1) SA 70
at 71.
2012
addressed .to and accepted by the applicant, in which the debtor had
spelled out its full name. But the terms of that instrument
and the
later one are for relevant purposes the same; and in particular, the
earlier instrument also incorporates a suretyship
by the same surety
in the same general terms as the later one.
[9]
The debtor also says that the credit application form on which the
applicant
relies here was   in fact intended for a
different contract. The credit application form does not say so; but
more importantly,
however, the suretyships signed by the surety are
in similar terms, and those terms are of sufficiently wide import to
embrace
any subsequent indebtedness howsoever arising. For present
purposes, since the applicant must make out its case in its founding

papers, it is sufficient to point to the 2015 suretyship and its
terms. Accordingly this issue may be put aside, and one may move
on
to consider the defence put up to the Bandini claim.
[10]
Here
the defence is said to be based
"on
a failure to sign off various time sheets and fuel" .
[4]
It
is also said that the Bandini project was to take 1.5 weeks but
because the applicant's operators
"were
derelict in their duties and in their performance"
the
project took 2.5 weeks. But it makes no claim arising from this
assertion. Finally, although not raised in the Bandini context,
the
debtors says that arising from the Matta project, it has a claim for
damages against the applicant for R3 849 604.99.
[5]
[11]
The
relevance of the time sheet assertion is that the debtor says that
the parties' contract required that the hours worked daily
by the
applicant's plant had to be signed off daily by the debtor's foreman,
and by the applicant's operator. And in the application
against the
surety the case is that it is the applicant's representatives that
did not sign off the time sheets.
[6]
There is no assertion of how many hours, on the debtor's version, the
plant had operated; and so there is no assertion by the debtor
of
what amount it admits it owes to the applicant.
[12]
Do
these assertions establish on a balance of probabilities that the
debtor disputes the Bandini indebtedness on reasonable and
bona fide
grounds?
[7]
The debtor relied on
Badenhorst v Northern Construction Enterprises (Pty) Ltd
[8]
for the proposition that the applicat ion for liquidation should be
dismissed because it has shown reasonable and bona fide grounds
for
disputing the claims for payment. The debtor relied, amongst others,
also   on Maharaj v Barclays National Bank Ltd.
[9]
[13]
Two issues arise in the light of these submissions. The first is the
obvious
one: has the debtor on these affidavits shown such a defence
to the Bandini claim? And the second one is this: if no defence
meeting
this threshold is shown on the Bandini project, does the
debtor's assertion of a damages counterclaim of some R3,8m on the
Matla
project serve potentially to extinguish the Bandini claim?
[14]1n
my view the debtor has not met the threshold in respect of the
Bandini project, for these reasons. The time sheets term on
which it
relies, even if it was a term of their contract, cannot serve to
disentitle the applicant to claim what it contends is
owed. The term
would merely serve evidentiary value. After all, the debtor says it
is the applicant who has not signed
off
- but does not say
that the amounts claimed in the invoices are more than would be
justified on the debtor's version of the hours
actually spent by the
plant on site. As already pointed out, the debtor does not take the
court into its confidence by saying what
it accepts is owed by it to
the applicant in this regard.
(15)1
return below to the issue of the counter claim. The reliance by the
debtor and surety on Maharaj does not, in my view, avail.
That case
concerned the threshold for an affidavit resisting summary
judgment, a standard that is very different from that
which applies
to the present context . The relevant sub-rule of rule 32 provides:
"(3)
Upon the hearing of an application for summary judgment the defendant
may­
(a)
...
(b)
satisfy the court by affidavit (which shall be delivered before noon
on the court day but one preceding the day on which the
application
is to be heard) or with the leave of the court by oral evidence of
himself or of any other person who can swear positively
to the fact
that he has a bona fide defence to the action; such affidavit or
evidence shall disclose fully the nature and grounds
of the defence
and the material facts relied upon therefor."
[16]
AII a defendant need do is set out averments which if proved at
trial
would constitute a defence; and the averments must not be too vague
and sketchy, because the court needs to be persuaded
of the bona
tides of the defence. Here, as laid down in Kalil, the averments must
go twofold further: it must additionally disclose
that the
respondent's disputing of the applicant's claim is reasonable; and
further, the respondent must do so on a balance of
probability.
[17]
The debtor and surety also submitted that the liquidation
application
cannot succeed for the presence of irresoluble factual disputes on
affidavit. But the mere presence of factual disputes
is not good
enough. Courts must scrutinise these to establish whether one is
dealing with unmeritorious defences that seek refuge
in the stratagem
of disingenuous factual disputes. Heher JA said in Wightman Wightman
t/a J W Construction v Headfour (Pty)
Ltd
and Anot her:
[10]
"[13]
A real, genuine and bona fide dispute of fact can exist only where
the court is satisfied that the party who purports
to raise the
dispute has in his affidavit seriously and unambiguously addressed
the fact said to be disputed. There will of course
be instances where
a bare denial meets the requirement because there is no other way
open to the disputing party and nothing more
can therefore be
expected of him. But even that may not be sufficient if the fact
averred lies purely within the knowledge of the
averring party and no
basis is laid for disputing the veracity or accuracy of the averment.
When the facts averred are such that
the disputing party must
necessarily possess knowledge of them and be able to
provide an answer (or countervailing evidence) if they
be not true or accurate but, instead of doing so, rests his case on
a
bare or ambiguous denial the court will generally have difficulty in
finding that the test is satisfied. I say 'generally' because
factual
averments seldom stand apart from a broader matrix of circumstances
all of which needs to be borne in mind when arriving
at a decision. A
litigant may not necessarily recognise or understand the nuances of a
bare or general denial as against
a
real attempt to grapple
with all relevant factual allegations made by the other party. But
when he signs the answering affidavit,
he commits himself to its
contents, inadequate as they may be, and will only in exceptional
circumstances be permitted to disavow
them. There is thus a serious
duty imposed upon a legal adviser who settles on answering affidavit
to ascertain and engage with
facts which his client disputes and to
reflect such disputes fully and accurately in the answering
affidavit. If that does not
happen it should come as no surprise that
the court takes a robust view of the matter."
[18]
The fuel aspect of the dispute has been removed from contention by
the applicant's
abandonment of reliance on that part of the claim for
present purposes. And the fact that the project took longer to
complete did
not result, on the debtor's case, in any legally
relevant consequence.
[19]
That
leaves the question concerning the counterclaim. Here the applicant
submitted that the alleged counterclaim is one for damages
and thus
unliquidated; there is accordingly no automatic operation of payment
by set-off. All that there is, is the quest ion of
whether a court
would exercise its common law discretion by permitting a stay of the
claim in convention, pending the determination
of the counterclaim
for damages, which if successful would liquidate the counterclaim and
so allow the claim in convention to be
extinguished by set-off.
[11]
[20]
There are substantive reasons why a court would not, on these facts,
exercise its discretion in favour of the debtor. First, no specific
reasons were put up as to why a court should do so here. Second,
the
al leged claim arises from a different contract; it allegedly arises
from the Matla contract, whereas the indebtedness held
to exist
arises from the Bandini contract . The evidence on the claims in
convention and reconvention will thus not overlap or
converge .
Third, the damages counterclaim on the Mat la project is disputed
whereas the Bandini claim is not bona fide disputed.
And finally,
there is no suggestion that, if the damages counterclaim is good, the
applicant will not be able to pay that indebtedness.
Has
it been shown that the debtor is unable to pay its debts?
[
21]
Caney,
J
famously
said:
"A
concern which is not in financial difficulties ought to be able to
pay its way from current revenue or readily available
resources...
.
The
proper approach in deciding the question whether a company should be
wound up on this ground appears to me ... to be that, if
it is
established that a company is unable to pay its debts, in the sense
of being unable to meet current demands upon it, its
day to day
liabilities in the ordinary course of its business, it is in a state
of commercial insolvency."
[12]
[22]
in this case I have found that there is a debt that is due,
and it is common cause that the debtor is not paying it. This debt is

not an extraordinary item on the debtor's income statement; it is the
very type of current liability that the debtor, given its
business,
is expected and likely to incur. But what adds to the concern of
inability to meet current demands, is the vague, unsubstantiated
and
unparticularised excuse put up for not paying the debt, as I have
pointed out above.
[23]
it
is true that, as has been said, commercial insolvency, another way of
saying that a debtor cannot pay his debts as and when they
fall due
for payment, is no more than an onus­ shifting device, which then
burdens the debtor to show that his assets exceed
his
liabilities.
[13]
But in this
case the debtor has not shown that its assets exceed its liabilities.
The one line certificate from its accountant
takes the matter
nowhere
[14]
[24]
in these circumstances it has been established, I believe,
that the debtor is unable to pay its debts for the purposes of
s.345(1)(c)
of the Companies Act, 1973.
Conclusion
[25]
lt follows that in my view the money claim should be granted and a
provisional liquidation order should issue. In consequence
I make the
orders set out below.
[26]
in the matter of RH Plant Hire CC v Arminda Cabral Neves De Carvalho,
case number 16410/2017, I make an order in the terms
set out in the
draft order which I have initialled, dated, and marked
"X".
[27]
ln the matter of RH Plant Hire CC v Toncon 3 Construction (Pty) Ltd,
case number 164/2017, I issue a provisional liquidation
order
returnable on 28 May 2018 in the terms set out in the draft order
which I have initialled, dated, and marked "X"..'
WHG
van der Linde
Judge,High
Court
Johannesburg
Date
argued: Friday, 23 February 2018
Date
judgment: Monday, 26 February 2018
Appearances
For
the Applicant:
Adv. J. Van Rooyen
lnstructed
by:
Donn
E Bruwer Attorney
c/o
454 Queen's Crescent Lynwood, Pretoria
Tel:
(083) 458 1212
Fax:
0866 710 527
For
the Respondent
Adv. R Blumenthal
Instructed
by:
Spencer Tarr Malan Geyer inc
C/0
Friedland Hart Solomon Nicolson
Monument
Office Park
79
Steenbok Avenue
Monument
Park, Pretoria
Tel:
012 424 0200
Fax:
012 424 0207
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case
Number:-
16411/2017
On
this the 23rd day of FEBRUARY 2018 at PRETORIA
Before
the Honourable Justice Van der Linde
In
the matter between:-
RH
PLANT HIRE
CC
Applicant
-and-
TONCON
3 CONSTRUCTION (PROPRIETARY} LIMITED
Respondent
(Registration
Number:- 2007/009862/07)
Registered
Adress:-
98 Ronald Road, Linbro Park, Sandton, Gauteng
DRAFT
ORDER
Having
read the papers filed of record and having heard counsel for the
parties, it is Ordered that:-
·1.
The respondent is placed under a provisional winding-up order in the
hands
of the Master of the High Court.
2.
A
rule nisi
do issue calling upon all persons concerned to
appear and show cause, if any, on 28 MAY 2018 at 1OhOO as to why a
final winding-up
should not be granted and why the costs of this
application should not be costs of the winding-up.
3.
Service of this Order shall be affected:-
3.1
at the registered address of the respondent;
3.2     by.publication
in a newspaper circulating in Gauteng;
3.3
by publication in the Government Gazette;
3.4
on the Master of this Court;
3.5
on the South African Revenue Service; and
3.6
by registered mail on all known creditors of the respondent with
claims in excess of R20,000
.00.
4.
Costs of this Order be costs in the winding-up of the Respondent.
BY
ORDER
REGISTRAR
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 16411/2017
PRETORIA
26 FEBRUARY 2018
BEFORE
THE HONOURABLE MR JUSTICE VAN DER LINDE
In
the matter of:
RH
PLANT HIRE CC

Applicant
And
TONCON
3 CONSTRUCTION (PTY) LTD
Respondent
Reg
No: 2007/009862/07
Address:
98 RONALD ROAD , LINBRO PARK, SANDTON, GAUTENG.
HAVING
HEARD counsel for the applicant and having read the notice of motion
and other documents filed of record
IT
IS ORDERED THAT
JUDGMENT:
1.
The abovementioned respondent company be and is hereby placed under
provisional winding-up order.
2.
A rule
nisi
be and is hereby issued calling upon all persons
concerned to appear and show cause, if any, to this court at 10:00 on
28 May 2018
why the respondent company should not be placed under
final winding-up order and why the costs of this application should
not be
costs of the winding-up.
3.
Service of this order shall be affected:
3.1
at the registered address of the respondent;
3.2
by publication in a newspaper circulating in Gauteng;
3.3
by publication in the Government Gazette;
3.4
on the Master of this Court;
3.5
on the South African Revenue Service; and
3.6
by registered mail on all known creditors of the respondent with
claims in excess
of R20 000.00.
4.
Costs of this order be costs in the winding-up of the respondent.
BY
THE COURT
REGISTRAR
EM
Attorney:
DONNE BRUWER ATT.
Address:
454 QUEEN'S CRESCENT LYNNWOOD , PRETORIA.
..,
[1]
The provisions of chapter 14 of the Companies Act 61 of 1973
continue to apply to applications for the winding up of companies
by
virtue of item 9(1) of schedule 5 to the
Companies Act 71 of 2008
.
[2]
Court v Standard Bank of South Africa Ltd., Court v Bester NO
(133/93, 638/93)
[1995] ZASCA 39
;
1995 (3) SA 123
(AD); [1995)
2 All
SA 440
(A) (30 March 1995).
[3]
S.345(1)(c) of the Companies Act 1973 states superfluously that a
company is deemed unable to pay its debts if it is proved to
the
satisfaction of the court that the company is unable to pay its
debts. See Commonwealth Shippers Ltd v Mayland Properties
{Pty) Ltd,
1978 (1) SA 70
at 71
[4]
Answering affidavit p88 para 15.42; p98 para 15.70
[5]
Answering affidavit p97.
[6]
Answering affidavit p 77 para 23.34.
[7]
Kali l v Decotex (Pty) Ltd and Another,
1988 (1) SA 943
(A) at 980
B- H.
[8]
1956 (2) SA 346
(T) at 347 - 348.
[9]
1976 (1) SA 418
(A) at 426.
[10]
(66/2007) [2008) ZASCA 6
[2008] ZASCA 6
; ;
(2008) 2 All SA 512
(SCA);
2008 (3) SA
371(SCA)
{10 March 2008) at (13). See also PMG Motors Kyala mi (Pty)
Ltd and Another v FirstRand Bank Ltd, Wesbank Division
2015 (2) SA
634
(SCA); (2015]
1 All SA 437
(SCA);
[2014] ZASCA 228
at
[23);
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA
623
(A) {[1984] ZASCA 51) at 634 in fin; Fakie NO V CCII Systems
(Pty) Ltd (653/04)
[2006] ZASCA 52
;
2006 (4) SA 326
(SCA) at
[SS]
-
[56]
.
[11]
Compare rule 22(4).
[12]
Rosenbach & Co (Pty) Ltd v Singh's Bazaars (Pty) Ltd,
1962 (4)
SA 593
(D) at 597. These passages are quoted in Henochsberg on the
Companies Act, Meskin, Vol 1, at p 709, 710.
[13]
Mars, The Law of Insolvency in South Africa, 9t h Ed, p2, para 1.1.
[14]
Annexure JA 2,
''This
letter serves to confirm that the above is a trading and solvent
entity."