About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2018
>>
[2018] ZAFSHC 149
|
|
Gapp Architects and Urban Designers Proprietary Limited v Environmental Process and Mining Consultants Proprietary Limited (388/2018) [2018] ZAFSHC 149 (11 September 2018)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number:
388/2018
In
the matter between:
GAPP
ARCHITECTS AND URBAN DESIGNERS
PROPRIETARY
LIMITED
Applicant
and
ENVIRONMENTAL PROCESS
AND MINING
CONSULTANTS
PROPRIETARY
LIMITED
Respondent
HEARD
ON:
3
1 MAY 2018
JUDGMENT
BY:
MATHEBULA, J
DELIVERED ON:
11 SEPTEMBER
2018
[1]
This is an application for the winding-up of the respondent on the
basis that it is unable to pay its debts.
[1]
Before me appeared Mr Choate for the applicant and Mr Coetzer for the
respondent.
[2]
The brief narration of the background facts to the matter is as
follows. On 31 January 2017 the applicant represented
by
Kenneth Wood and the respondent by Christopher Mumby entered into a
written architectural services agreement. The crux
of the
agreement was that the applicant would render architectural services
to the respondent in respect of a proposed new university
and
community library development in Kolwezi, Democratic Republic of the
Congo. The total amount payable for the services
to be rendered
on the project was set at R830 155, 83.
[3]
The applicant rendered services and submitted invoices to the
respondent of R179 068. 82 on 31 March 2017 and R227 130, 64 on
30
April 2017 respectively. The respondent did not settle both
invoices despite numerous demands and a letter of demand sent
in
terms of section 345(1)(a)(i) of the Companies Act dated 17 October
2017 from the applicant’s attorneys.
[4]
The respondent is denying liability and maintain that it was only
acting as an agent of an entity named Technobuild of Katanga
based in
Lubumbashi, Democratic Republic of the Congo. The essence of
its case is that it merely created a legal tie between
Technobuild
and the applicant. The services were rendered by the applicant
to this entity not the respondent. Accordingly,
the applicant
was at all times aware of the situation. As a result, the
respondent was under no obligation to respond positively
to the
notice dispatched to it.
[5]
It was argued on behalf of the applicant that the application is
premised on the inability of the respondent to pay the invoices
as
rendered to it. That the signatures appended to the written
agreement are those of the representatives of the parties
to this
matter. No reference is made to any other party(ies). At
no stage when numerous reminders for payment were
made did the
respondent deny liability.
[6]
He argued that this court has jurisdiction to hear this matter.
He submitted that the registered address, even if different
from the
principal place of business contrary to the requirements of section
23 of the Companies Act, is the residence of a company
for
jurisdictional purposes.
[7]
He contended that the respondent is unable to pay its debts. He
pointed out that the respondent has not attached
inter alia
financial statement(s) to demonstrate that it is able to pay its
debts. The failure to do so is an indication that the
respondent
is unable to pay its debts.
[8]
Mr Coetzer on behalf of the respondent relied on the well-known
Badenhorst rule that the application of this nature should not
be
used to collect debt.
[2]
He added that the application for liquidation should not be resorted
to enforce a claim which is
bona
fide
disputed by the respondent.
[3]
He submitted that there was no onus on the respondent to disprove any
element.
[9]
On the issue of the existence of agency, he submitted that the
principal was known to the applicant at all times. Invoices
were initially issued to the respondent but later amended to reflect
the correct party. This is a clear indication that the
applicant was aware of the involvement of Technobuild. He
pointed out the applicant has not made out a case for the granting
of
the relief sought. He raised the issue that the application has
not been served on the employees of the respondent.
Finally he
referred to the factual dispute in existence between the parties and
that the application be dismissed with costs.
[10]
The principal place of business of the respondent is The Arena,
Capital Hill, 67 Morkel Close, Halfway House, Johannesburg.
The
registered address is situated at 33 Murray Street, Harrismith.
Section
23 (3)(a) and (b) of Act 71 of 2008 provides that:-
“
Each company or
external company must-
(a)
continuously maintain at least one office in the Republic; and
(b)
register the address of its office, or its principal office if it has
more than one office-
(i)
initially in the case of-
(aa)
a company, by providing the required information on its Notice of
Incorporation; or
(bb)
an external company, by providing the required information when
filing its registration in terms of subsection (1); and
(ii) subsequently, by
filing a notice of change of registered office, together with the
prescribed fee.”
[11]
It appears that the respondent did not comply with the abovementioned
section by not changing its address. It now seeks
to rely on
its non-compliance with the Act to escape the jurisdiction of this
court.
[12]
However this matter is settled. In
Sibakhulu
Contract (Pty) Ltd v Wedgewood Village Gold Country Estate (Pty)
Ltd
, the court explained this question as follows:-
“
I
consider that it would give effect to the purposes set out in s
7
(k)
and
(l)
to
interpret s 23 of the Act to the effect that a company can reside
only at the place of its registered office (which, as
mentioned, must
also be the place of its only or principal office). The result
would be that there would in respect of every
company be only a
single court in South Africa with jurisdiction in respect of
winding-up and business rescue matters. I think
it admits of no doubt
that winding-up and supervision for business rescue purposes are both
matters going to the status of the
subject company, and that the
power to make a determination on a question of status involves
a
ratio
jurisdictionis
exercisable
only by the court within whose jurisdiction the company 'resides' or
is domiciled (I do not perceive there to
be scope for any distinction
within South Africa between a local company's residence and its
domicile.)
”
[4]
It
is therefore my considered view that the argument advanced in this
respect falls away.
[13]
The next issue relate to whether the applicant is seeking to recover
a debt whose existence is disputed on
bona fide
and reasonable
ground. There is no doubt that the applicant invoiced the
respondent for the combined sum of R406 199. 46.
This amount
remains unpaid the defence is that this amount is owed by a third
party not the respondent.
[14]
The dealings leading to the conclusion of the agreement were
conducted by the duly appointed representatives of the two (2)
entities. The agreement was signed by both of them. In
that regard literal interpretation of the agreement will be
applied
to the document. In their communication with each other, there
was no mention of the existence of the third party.
The
invoices that were sent to the respondent were not queried on the
basis that they are not liable for payment. The issue
of agency
was not raised. This later surfaced in response to the
application. I find the version of the respondent
ingenuous in
this regard.
[15]
Although the respondent does not have to disprove any element, the
details of the aforementioned agency is not disclosed.
It is on
these basis that I consider this version to be rejected. I do
not consider that there are dispute of fact between
the parties as
raised by counsel for the respondent.
[16]
The correct approach to be followed in circumstances where there are
disputes of fact where succinctly elaborated in
Wightman t/a J W
Construction v Headfour.
On paragraph 13 Heher JA
explained himself in the following manner:-
“
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
an 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.
”
[5]
[17]
In the exercise of my discretion I am satisfied that the applicant is
entitled to some kind of relief. However, I would
not grant the
final order of winding-up but a provisional order with a return
date. A proper case has been made out for the
provisional
winding-up of the respondent as contemplated in section 344(f) read
with section 345 (1)(c) of the Companies Act.
The applicant
need only to establish a prima facie case. In this matter it
will be just equitable that the respondent be
placed under
provisional winding-up.
[18]
In the circumstances I make the following order:-
18.1. The respondent is
provisionally wound-up.
18.2. A rule nisi is
issued calling upon all persons to appear and show cause, if any, to
this Court on/or before 9H30 am on Thursday
24 October 2018, why the
respondent should not be finally wound-up, and why the costs of this
application should not be costs in
the winding-up.
18.3. This order,
together with a copy of the Notice of Motion and annexures thereto,
must be served upon the respondents.
18.4. The copy of this
order must be served on:
18.4.1.
Any registered trade union that as far as the Sheriff can reasonably
ascertain represents any of the employees of the respondent;
18.4.2.
The respondents’ employees, if any, by affixing a copy of the
order and the application to any notice board, to which
the employees
have access inside the respondents’ premises, or if there is no
access to the premises by the employees, by
fixing copy to the front
gate, where applicable, failing which, to the front door of the
premises from which the respondents reside
and/or conduct any
business;
18.4.3.
The South African Revenue Service;
18.4.4.
This order shall be published once in the Government Gazette and the
national newspaper.
18.5. The costs of this
application to be costs in the administration of the estate of the
respondents.
_____________
MATHEBULA,
J
On
behalf of Applicant: Adv. L. Choate
Instructed
by: Symington & De Kok
Bloemfontein
On
behalf of
Respondent
: Adv. C. Coetzer
Instructed
by: Honey Attorneys
Bloemfontein
/roosthuizen
[1]
Section
344 of the Companies Act 61 of 1973 provides:- Circumstances
in which company may be wound up by Court. –
A company may be
wound up by the Court if –
a)…..
b)…..
f) the company is
unable to pay its debts as described in
section 345
[2]
Badenhorst
v Northern Construction Enterprises (Pty) Ltd
1956 (2) SA 346
T at
347 H – 348 B.
[3]
Kalil
v Decotex (Pty) Ltd and another
1988 (1) SA 943
(A) at 980 B-D.
[4]
2013
(1) SA 191
(WCC) at 199 F-G.
[5]
[2008] ZASCA 6
;
2008
(3) SA 371
(SCA) at 375 G - 376 B.