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[2016] ZAGPPHC 101
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AFGRI Operations Limited v Hamba Fleet Proprietary Limited (86600/14) [2016] ZAGPPHC 101 (3 March 2016)
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE NUMBER: 86600/14
DATE: 3 March 2016
Reportable
Not of interest to other
judges
Revised
AFGRI OPERATIONS
LIMITED
Applicant
V
HAMBA FLEET
PROPRIETARY
LIMITED
Respondent
JUDGMENT
MABUSE
J
:
[1] The applicant, a
public company registered with limited liability in accordance with
the company statutes of this country and
having its principal place
of business in Centurion, seeks an order in terms of which the
respondent, also a company with limited
liability registered in
accordance with the company laws of this country, is wound-up.
[2] The applicant’s
cause of action arises from the respondent’s inability to pay
the applicant a sum of R156,796.64
which the respondent owes to the
applicant and which arose from the applicant’s taxed
bills of costs.
[3] The above debt of
R156,796.64 has its origin in the following circumstances. In
the year 2009 the respondent instituted
two actions against the
applicant based on certain agreements concluded between the parties
during 2003 and 2005. During
2013 the defendant filed its
amended particulars of claim under one of the two cases namely case
number 9431/2009. On 25 March
2013, the applicant, which was unhappy
with the formulation of the contemplated pleading, complained about
the improper formulation
of the respondent’s amended
particulars of claim. The applicant then gave the respondent an
opportunity to amend its pleading
but the respondent failed to do
so. So on 6 May 2013, the applicant filed an exception to the
respondent’s amended
particulars of claim.
[4] By agreement between
the parties, the exception was set down for hearing before Claassen
J, on 4 February 2014. On the
said date Claassen J. granted the
following order again by consent between the parties:
“
4.1
the matter was adjourned sine die;
4.2 the respondent was
ordered to pay the applicant’s costs, including the cost of two
counsel; and
4.3 the respondent was
granted leave to apply for the amendment of its particulars of claim
within 21 days.”
A copy
of the relevant court order is attached to the founding affidavit and
marked
‘
PB3’.
[5] Following the said
order of costs the applicant proceeded to prepare its bills of costs.
Copies of same were subsequently
served on the respondent and
the taxation thereof was fixed for 22 July 2014. On the
appointed date and at the taxation of
the applicant’s bills of
costs, the parties were each represented by their tax consultants.
The applicant’s bills
of costs were taxed and allowed in the
sum of R156,796.64.
[6] Despite three
letters, including a letter in terms of s 345(1)(a) and or s
345(1)(c) of the Companies Act 61 of 1973 (“the
Act”),
calling upon the respondent to pay the said amount within twenty-one
(21) days of 5 September 2014 at the pain of
being deemed to be
unable to pay its debts and at the pain furthermore of being wound up
for that reason, the respondent has failed,
or is unable, to pay the
debt. The applicant tried to enforce the court order by issuing
a writ of execution. On 24
August 2014 the sheriff could not
execute the said writ at the respondent’s registered office by
reason of the fact that
the respondent had reportedly abandoned its
registered address and its whereabouts were unknown.
[7] The said demand, in
terms of s 345 of the Act, was prepared on 5 September 2014 and
forwarded to the sheriff for service at
the respondent’s
registered office. Service of the said demand was effected on
the respondent on 15 September 2015
by affixing a copy thereof to the
respondent’s principal door. On 16 September 2014, Zehir
Omar Attorneys, acting for
the respondent, responded to the said
demand and wrote the following letter to the applicant’s
attorneys. The said
letter reads as follows:
“
We
refer to your letter dated 5 September 2014 delivered to our client,
Hamba Fleet (Pty) Ltd. Our client had terminated the
mandate of
Werkmans Attorneys and has (sic) instructed our offices to act as
it’s (sic) attorney of record. A notice
of substitution
will be served and filed shortly.”
A perusal of the bill
of costs that was apparently settled between you and our client’s
former attorney revealed that:
Your client has
claimed the entire cost of the action of 2009 to date. Our
client instructs that your client has not secured
judgment against
our client. In fact on 4 February 2014, the matter was seized
for trial in the South Gauteng High Court.
The matter was
postponed sine die by agreement between the parties with the
plaintiff undertaking to pay the defendant’s
cost, including
the cost of counsels (sic). Please let us have a copy of the
court order that was relied upon to tax the
bill in the manner that
it was taxed.
Our client denies
being liable for the taxed bill. Please provide us with an
explanation for the foregoing. We hold instructions
to review the
decision of the taxing master, and to bring an application to stay
any execution steps or liquidation proceedings
against our client.
Further with regards
to the thrust of liquidating our client’s company, you are
advised to hold off (sic) on such threats.
If your offices had
(sic) acted irregularly in taxing the bill, your winding-up our
client will only exacerbate your wrongdoing.
We await your response
thereto.”
[8] It is clear from the
said letter, in particular by reference to “
your letter
dated 5 September 2014”,
that the respondent had received
the demand in terms of s 345 of the Act. The concerns that the
respondent had raised in its
attorney’s afore going letter were
addressed by the applicant’s attorneys in their letter dated 29
September 2014 which
was forwarded to the respondent’s
attorneys. The said letter reads as follows:
“
1.
We acknowledge receipt of your letter dated 16 September 2014
received on 19 September 2014.
2. There is no trial
pending in the South Gauteng High Court as alleged in your letter.
Presumably you intended to refer to
the action pending in the High
Court of South Africa, Gauteng Division, Pretoria, under case number
9431/09.
3. The bill of costs
does not pertain to “the entire cost of the action from 2009 to
date.” The bill of costs
pertains to an exception taken
by our client to your client’s particulars of claim. On 4
February 2014, the date upon
which the exception was set down for
hearing, your client’s legal representatives conceded the
merits of our client’s
exception. Judge Claassen made the
following order:
3.1 the matter was
postponed sine die;
3.2 your client was
ordered to pay the cost of the exception including the cost of two
counsel;
3.3 your client was
granted leave to apply to amend its particulars of claim within 21
days.
4. We attach hereto a
copy of the bill of costs which was scheduled between our client’s
respective cost consultants.
5. We do not have a
copy of the court order to hand but we will obtain a copy of the
court order and will furnish you with a copy
of same.
6. We are proceeding
to prepare an application to wind-up your client.”
A copy of the said letter
has been attached to the founding papers as annexure ‘PB14’.
[9] Neither the
respondent nor Mr. Omar, the respondent’s attorneys, had
responded to the said letter by 27 November 2014.
The applicant
contends that as it has complied with the requirements of the law
relating to the liquidation of companies it is
entitled
ex
debiti justitiae
and by virtue of the provisions of s 344 of
the Companies Act 61 of 1973 for a final winding up order. Quite
correctly all that
the applicant must do in order to succeed with its
application is to satisfy the Court that it has
locus standi
,
in other words that it is the creditor of the respondent in an amount
of not less than R100.00; secondly that it has complied
with the
provisions of s 345(1) and that the respondent is unable to pay its
debts. This has to be done on a balance of probabilities.
In my
view the applicant has satisfied these essential requirements.
[10] Needless to state
it, the respondent opposes the application for its liquidation and
has for that purpose delivered an opposing
affidavit deposed to by
one Sunnyboy Ndlovu (“Ndlovu”), its managing director.
The respondent has, in the said
opposing or answering affidavit
raised three defences that:
(i) the applicant relies
on the Companies Act 61 of 1973 and not on the provisions of the
Companies Act 71 of 2008;
(ii) that a Court has a
discretion, irrespective of the grounds on which the order for the
winding-up of a company is sought, to
grant the order; and
(iii) that the applicant
has failed to admit or deny and/or confess and avoid the facts
contained in, among others, paragraph 17
of the respondent’s
answering affidavit.
[11]
The applicant
relies on the Companies Act 61 of 1973 instead of the
Companies Act
71 of 2008
.
Relying on the contents
of paragraph 17 of its answering affidavit, the respondent contends
that it has assets of a substantial
value and is for that reason a
solvent company. Because of the fact that it is a solvent
company it is contended on behalf
of the respondent that the
Companies Act 61 of 1973 does not provide for the liquidation of a
solvent company and furthermore that
as the applicant’s
application to wind-up the respondent is based solely on the
Companies Act 61 of 1973 and not on s 81
of Act 71 of 2008, which
provides for the winding-up of solvent companies, the application
must fail.
[12] S 81(i)(c)(ii) of
Act 71 of 2008 provides that a court may order the winding-up of a
company if it is just and equitable for
the company to be wound-up.
It is not clear to this Court why the respondent contends, and why it
is argued by Mr. Omar,
the respondent’s legal representative,
that the applicant may not rely on the provisions of the Companies
Act 61 of 1973
if it seeks the winding-up of the respondent on the
grounds that it was just and equitable for the respondent to be
wound-up.
Nowhere in its affidavit does the applicant seek an
order on the basis of s 81(i)(c)(ii) of Act 71 of 2008, let alone on
an allegation
that “
it was just and equitable”
to
wind-up the respondent. It is crystal clear in paragraph 22 of
its founding affidavit that:
“
The
applicant seeks an order of winding-up the respondent on the grounds
of the respondent’s inability to pay the debts within
the
meaning of s 344(f) read with s 345(i)(c) of the Companies Act 61 of
1973 (“the Act”). It is also clear from
paragraph
36 of the founding affidavit that the application for the winding-up
of the respondent is founded on the provisions of
s 344(f) read with
s 345(i)(a) and s 345(i)(c) of Act 61 of 1973.”
2. I do not think that
this point merits any serious consideration. The inevitable finding
by this Court is that this point must
fail.
[13]
That a Court has
a discretion to grant the winding-up order
The respondent’s
defence that the Court has a discretion, irrespective of the grounds
on which the application for winding-up
is sought, to grant the
order. The respondent contends that it has is a counter claim or
claim against the applicant. In my view,
this point requires earnest
consideration. This defence is connected to whether in motion
proceedings a respondent can raise a
counter-claim or a claim against
the applicant as a defence against an application for its winding-up
and if so how the Court should
deal with such a matter. It is
crucial, in my view, to point out at the outset that although in his
letter dated 16 September 2014,
Mr. Omar had written that:
“
Our
client denies being liable for the taxed bill …”
the
debt is not denied in the answering affidavit. In fact it is now
common cause between the parties that the respondent indeed
is
indebted to the applicant in the sum of R156,796.64 in respect of the
taxed bill of costs and that the respondent company has,
after lawful
demand in terms of s 345 of the Act, to pay the said amount.
[14] I now turn to
investigating whether the Court should exercise its discretion in
favour of the respondent by reason of the fact
that it has a counter
claim or a claim against the applicant. In doing so, a Court must
investigate the counter-claim or claim,
decide whether it is spurious
or genuine and whether there is substance in it. If the Court should
find that the counter-claim
or claim is substantial, genuine and
exceeds the applicant’s debt, the Court should exercise its
discretion by dismissing
the application for liquidation and if the
counter-claim or claim is insubstantial, the Court should grant the
application for
liquidation.
[15] The case made by the
respondent may be summarised as follows. On or about 1 July
2003 and at Centurion the parties, duly
represented therein, entered
into a written Road Transportation Agreement. In terms of this
agreement, the parties agreed that
the respondent would, at an agreed
fee, provide the applicant with transportation services and deliver
the applicant’s monthly
output at Kinross Mill to various
destinations. For purposes of brevity, this agreement may be
referred to as the Kinross
Transportation Agreement. Clause 4.1
thereof provided that:
“
Subject
to the provisions of this Agreement, the price to be charged by Hamba
for Delivery of Feed is R7.95 per kilometre, plus
VAT.”
[16] During 18 June 2004
and at Centurion, the respondent and the applicant, who were duly
represented at all material times thereto,
concluded a written Group
Courier Service Agreement in terms of which the parties agreed that
the respondent would provide the
applicant with transport services,
collect and deliver various items to various destinations and in
terms of which the applicant
undertook to pay the respondent an
agreed fee for services. A copy of this agreement is attached
to the answering affidavit
as Annexure ‘SN3’.
Clause 4.1 thereof provides that:
“
Subject
to the provisions of this Agreement, the price to be charged by Hamba
for the Delivery of the items is R1.89 per kilometre,
plus VAT.”
[17] On or about January
2005, and still at Centurion, the parties herein, who were duly
represented, concluded an oral Road Transportation
Agreement.
In terms of this oral agreement, the parties had agreed that the
respondent would render certain transport services
to the applicant
who would in turn pay the respondent an agreed fee for such services.
The said transportation services consisted
in the respondent
delivering the applicant’s monthly products from the
applicant’s Bethlehem Mill to various destinations.
This
Transportation Agreement may be called the Bethlehem Transportation
Agreement.
[18] On 1 July 2003, the
parties herein, both represented at all material times, entered into
a Management Agreement in terms of
which the respondent agreed to
appoint the applicant to manage its, the respondent’s, business
affairs. A copy of the
written agreement of management has been
attached to the answering affidavit as Annexure ‘SN4’.
In terms of ‘SN4’,
the applicant agreed, on certain terms
and conditions, to act as the administrator of the respondent and to
oversee the business
and operations of the respondent’s various
contracts the respondent had concluded and might conclude.
Following the
said agreement the respondent gave the applicant full
executive and management control of its business. The respondent
agreed to
pay the applicant an agreed fee on a monthly basis for the
applicant’s services.
[19] It was a tacit term,
so it is contended, of the Management Agreement that the applicant
would act honestly in dealing with
the business affairs of the
respondent, including the handling of the respondent’s
financial affairs. During November 2015,
and whilst studying the bank
statements of the respondent, Ndlovu discovered certain unauthorised
transfers in the respondent’s
bank account. His
investigation revealed that an amount of R13,606,574.85 had been
siphoned out of the respondent’s
bank account. Ndlovu and
Sipho Mkhwebane (“Mkhwebane”), the respondent’s
operational director, prepared
a list of amounts that had been
debited from the respondent’s particular account, being account
nr 4058272691. Also
reflected in the said accounts were the
dates on which certain amounts were transferred to certain parties
whose names appeared
in the said document. The document is
attached to the answering affidavit as ‘SN5’. The
list of such unauthorised
transaction commences on 12 November 2003
and ends on 29 October 2005. The amounts transferred vary.
SN5 is dated 9
November 2005. The said document was forwarded to one
Mr. Herthon Smith, the General Manager of the applicant and the
applicant
was requested to respond thereto.
[20] The respondent
contends firstly that it had not authorised the opening of the bank
account from which the respondent’s
monies were paid to
different entities as reflected on Annexure ‘SN5’;
secondly that it had not authorised payment
of the respondent’s
money to the entities reflected in Annexure ‘SN5’; and
thirdly and lastly that none of the
entitites reflected in ‘SN5’
was known to it.
[21] A meeting was
arranged between the parties. This meeting took place on 14
November 2015 at Centurion. Present were
Mkhwebane and Ndlovu
who attended the meeting on behalf of the respondent on one side and
Esli Rall, Frans Delport, Marius Pienaar
and Jaco Burger who all had
attended the meeting as the representatives of the applicant.
At the said meeting the applicant’s
officials simply refused to
provide an explanation for the missing funds. It is contended
by the respondent that Absa Bank
was also unable to explain how the
transactions had been effected without the respondent’s
authorisation.
[22] After the
aforementioned meeting the said Ndlovu went to see the respondent’s
attorneys of record, at the time Werksmans
Attorneys. Their
attorneys informed them that following the steps that Ndlovu had
taken to investigate the banking transactions
relating to the said
bank account, the applicant’s representative had cancelled all
the agreements. The said cancellation
was contained in a letter
dated 14 March 2016 from the applicant’s attorneys to their
attorneys. The respondent contends
that the said cancellations
were unlawful as the applicant was not entitled to cancel any of the
contracts with the respondent.
There was no breach of any
material term of the contract by the respondent. At the time of
the said cancellation, the applicant
retained all the records and
documentation relevant to the respondent’s business affairs
including the bank statements, invoices,
statements, delivery notes,
etc.
[23] On 14 March 2006 and
acting on the contents of a letter from its attorneys, the applicant
ejected the respondent from its,
the applicant’s, offices and
at the same time took possession of numerous assets belonging to the
respondent. Ndlovu has
listed in paragraph 17 of the answering
affidavit, all the assets of the respondent it is contended he
applicant removed. They
are too numerous to be listed in this
judgment. The estimated value of the said assets is R3,035,200.00.
[24] During the period
2005 to 2007 Ndlovu discovered that during the subsistence of the
said Management Agreement, the applicant’s
representatives had
unlawfully and intentionally and without the respondent’s
knowledge transferred funds out of the respondent’s
bank
account; that the applicant had intentionally failed to ensure that
the respondent was remunerated for services rendered by
the
respondent to the applicant, alternatively failed to render invoices
for services rendered by the respondent to the applicant;
that the
applicant had intentionally failed to inform the respondent’s
board of directors of the aforementioned unauthorised
transfers in
the monthly management reports; that more specifically, in the period
12 November 2003 to 22 March 2006, the applicants
failed to disclose
that it had:
1. effected unauthorised
transfers from the respondent’s bank account totalling
R12,308,080.03;
2. effected transfers
totalling R10,523,816.04 to various entities that had no business
relations with the respondents and/or without
lawful cause;
3. annexures ‘SN5’
is a schedule reflecting a breakdown of the amount referred to;
4. as a result of the
aforementioned unlawful transfers the respondent suffered pecuniary
loss of R22,831,896.17.
[25] On 10 March 2009 and
under case no. 13220/09 the respondent issued summons against the
applicant for payment of the amount
of R22,831,896.17 in respect of
claim A; the amount of R3,035,200.00 in respect of claim B; a sum of
R5,857,803,60 in respect of
claim C; R9,329,759.00 in respect of
claim D and lastly, R4,772,536.30 in respect of claim E. It is
this action that was
referred to earlier herein. The said
action is still pending. Although the debt in this matter arose from
the taxation of
the applicant’s bills of costs in matter number
9431/2009, and although the applicant has referred to that matter in
its
founding affidavit, for inexplicable reasons no copy of such a
matter was attached to either party’s papers nor, to exacerbate
matters, did the respondent refer to the said case in its answering
affidavit. Of course the applicant made it clear that for fear
of
making the papers cumbersome, it did not attach copies of either of
the two actions that the respondent has launched against
it. No
explanation was forthcoming from the respondent why it did not refer
to the said case.
[26] In its replying
affidavit the applicant admits that it had concluded written and oral
road transportation, group courier and
management agreements with the
applicant. The applicant disputes though the respondent’s
claims against it. The applicant
denies the allegation that funds
that were transferred from the named bank account were so transferred
without any authorisation
from the respondent. In addition it
contends that any claim with regard to such amounts which had been
transferred would
by now have become prescribed. Finally, the
applicant denies that it ejected the respondent from its premises and
that when
it did so it removed the respondent’s assets from
such premises. Esli Rall, it is so contended by the applicant,
is
said to have no recollection of the meeting that Ndlovu claimed he
attended on 14 November 2005 at Centurion.
[27] The following
important facts are therefore common cause between the parties or not
in dispute:
1. that the parties had
concluded the agreements referred to in the preceding paragraph;
2. that, for a certain
period, the applicant had full control and management of the business
and financial affairs of the respondent;
3. that certain amounts,
rightly or wrongly, were transferred from the named account to the
entities named in annexure ‘SN5’;
4. that a meeting was
held in Centurion on 14 November 2015 between the parties;
5. that the respondent
has issued summons against the applicant in which it claim payment of
a sums referred to in paragraph 25
supra
and that the said
action is still pending before the Court.
[28] The question now is
should the Court stay or dismiss the application on the ground that
the respondent has a genuine and a
serious counter-claim or claim in
an amount exceeding the applicant’s debt? In his heads of
argument, Mr. Omar referred
the court to the English case of
Re:
Bay Oil SA Seawind Tankers Corp v Bay Oil SA 1999(1) All ER 374 (“Re
Bay Oil”)
, where it was held by the Court that:
“
Where
a company had a genuine and serious cross-claim which it had been
unable to litigate, in an amount exceeding the amount of
the
petitioner’s debt, the Court should, in the absence of special
circumstances, dismiss or stay the winding-up petition
in the
exercise of its discretion under section 125(1) of the Insolvency Act
1986.”
In the
Re Bay Oil SA case, the court made reference to another English case
of Re: Portman Provincial Cinemas (Pty)
Ltd (1964) 108 SJ, 581
, which was a
cross-appeal.
[29] The facts of the Re:
Portman Provincial Cinema matter were set out in the Re Bay Oil SA
matter as follows at page 377H:
“…
the
petition was based on an undisputed debt of £40 831 owing
in respect of principal, interest and costs secured by
a mortgage.
In May 1963 the creditor (Baldwins) demanded payment from the
company of that sum. In July 1963 the company
issued a writ
against Baldwins claiming damages for breach of an oral agreement
alleged to have been made in or about 1955.
After the pleadings
in the action were closed, but before it could be tried, Baldwins
presented its petition. Plowan J dismissed
it. On
Baldwins’ appeal to this Court, Lord Denning MR thought that
the company’s cross-claim had no substance
at all. He
would have allowed the appeal. Harman and Russell LJJ, on the
other hand, thought that it could not be said
that there was no
substance in the cross-claim and accordingly dismissed the appeal.”
What is of supreme
importance in the Re Portman matter was the observations made by Lord
Denning MR and Harman LJ with regards to
the test to be applied.
The test is encapsulated in the following remark by Lord Denning MR:
“
(The
company says that) they have a cross-claim which overtops the amount
due to Baldwins. The question is whether the debt of Portman
is a
“disputed” debt. It would be, I think, if there was
real substance in the cross-claim.”
[30] Lord Denning MR
continued as follows after giving the
expose
of the matter:
“
As
I understand the law on the matter, it is this. If this is a
genuine cross-claim with substance in it, then let it be tried
out in
the Queen’s Bench Division: this petition must be
rejected. But if there is no substance in the cross-claim,
then let
the court do justice to the petitioners in this case and not give
heed to so insubstantial a cross-claim. We were
referred to
Re
Welsch Brick Industries Ltd
[1946] 2 All ER, 197
,
where even though the defendant company had put in affidavits and got
leave to defend under RSC Ord 14 (thus showing there was
a triable
issue), nevertheless the court looked into the matter even so; and
held there was no substance in the defence; and therefore
it was not
a ground for refusing a winding-up order.”
Harman LJ was even
clearer in his observation. He had this to say about the
matter:
“
Now
the fact that there is a cross-claim of that sort, not being a
realised claim, is no answer in law to the petitioner’s
claim
under the Act and it quite clearly appears from the case cited by
Lord Denning MR of the Re Welsch Brick Industries Ltd in
1946 that it
is not a bar to a claim, but of course it is a matter for the
discretion of the judge. The judge here rejected
the petition
on the modern practice. You do not now, as you used to do,
stand over the petition to see if the action will
succeed or no.
If you find the action making the cross-claim is on foot and it is a
serious action you reject the petition.
The question is whether
the judge rightly exercised his discretion.”
His final remark was
that:
“
I
think the judge was right to say that the matter ought to go to
trial, and therefore according to modern practice, the petition
should be dismissed, and I would so hold.”
The majority judgment
under the circumstances was that Baldwin’s petition for the
winding-up of the company should be dismissed.
[31] The law regarding a
counter-claim or a claim in the face of an application for winding-up
established in the Re: Portman Provincial
Cinemas Ltd case and
followed in Re: L.H.F. Wools, Ltd
[1969] 3 All E.R. 882
, is a clear
authority for the proposition that the petition ought to be dismissed
in counter-claim or claim cases, except in special
circumstances. The
petition may be dismissed, barring special circumstances:
a. if the counter-claim
or claim is genuine, and
b. if it has substance.
The application for
winding-up should be granted if the counter-claim or claim has no
substance.
[32] Does the law as set
out in Re Portman Provincial Cinemas Ltd
supra
and followed in
Re: L.H.F. Wools Ltd
supra,
apply in this country? Against
this background it must be remembered that our courts have always, as
in other branches of our law,
and where Roman Dutch law provides no
such authority, in the past sought guidance in English law as
illustrated by
inter alia
,
Evans & Co. v Silbert
1911
WLD 216
:
“
Even
where no rule of private international law instructs a South African
court to apply foreign law, foreign law in particular
the judgments
of the courts of other countries often feature in legal argument
before our courts and in judicial decisions.
Extensive reliance
on foreign law as a persuasive source has long been a particularly
notable feature of the practice of South
Africa Superior Courts.”
See
Wille’s Principles of South African Law 9
th
Edition by Francois du Bois et al at page 110. The
reliance of our courts on foreign law is best illustrated by
Copestake v Alexander 2 SC at pages 147
to 148
and
Evans
& Co. v Silbert
supra.
Finally the justification of our Court’s reliance on foreign
law was further emphasized by O’Regan J, when
she made the
following observation in
K v Minister of
Safety and Security 2005(6) SA 419 CC at paragraph 35
:
“
It
will be unduly parochial to consider that no guidance, whether
positive or negative, could be drawn from other legal systems
grappling with issues similar to those with which we are confronted.
Consideration of the responses of other legal systems
may enlighten
us in analysing our own law, and assist us in developing it further.
It is for this very reason that our Constitution
contains an express
provision authorising courts to consider the laws of other countries
when interpreting the Bill of Rights.
It is clear that in
looking to the juris prudence of other countries, all the dangers of
shallow comparitivism must be avoided.
To forbid any
comparative review because of those risks, however, would be to
deprive our legal system of the benefits of
learning and wisdom to be
found in other jurisdictions. Our Courts will look at other
jurisdictions for enlightenment and
assistance in developing our own
law.”
[33] Our Courts too have
adopted the approach that the Court’s power to grant the
winding-up order is, irrespective of the
grounds upon which the order
in sought, a discretionary power which must be exercised on judicial
grounds. See in this regard
FNC Building Construction Co.
(Pty) Ltd v Macsheil Investments (Pty) Ltd 1959(3) SA 841 [D &
C.R.D.] at 844 B-C
. This is what the Court had to say in this
matter:
“
Sec.
111 sets out the various grounds upon which a company may be wound up
by the Court, and it is plain in my view that it was
never intended
that whenever any of the grounds there set out are established, the
Court must grant the order. Not only does
the word “may”
ordinarily indicate a discretion, but a glance at the grounds set out
will show that they could not
all have been intended as founding an
absolute right to a winding up order.”
The
discretion whether or not to grant a winding-up order brought on any
grounds must be exercised on judicial grounds. See
in this
regard
Irvin & Johnson Ltd v.
Oelofse Fisheries Ltd 1954(1) S A 231 (E) at p. 244.
[34] To conclude on this
point I accept that in South African law, as in English law, the
power of the Court to grant a winding-up
order is discretionary,
irrespective of the grounds on which such order is sought. See
in this regard
Ter Beek v United Resources CC and Another 1997(3)
SA 315 CPD at 333I-J
. The Court then continued at page
334A-B and had this to say:
“
Accordingly
there exists, in my opinion, no reason why the same approach should
not be followed in South African law, subject to
the qualification
that, by reason of the fact that the “defence” of a
counter-claim recognises the enforceability of
the obligation on
which the applicant’s locus standi is founded:
(a) there is no room
for an argument that an applicant is seeking to enforce a disputed
debt by means of winding-up proceedings
(compare Kalil v Decotex
(supra) at 982 F); and
(b) as the existence
of the applicant’s claim is not challenged the respondent
should bear the onus of showing why the Court
should exercise its
discretion not to grant a winding-up order in his favour.”
[35]
The duty lies
on the respondent to show the Court why the Court should exercise a
discretion in its favour
The respondent’s
defence of a counter-claim or claim must be seen against the
background that, there is before Court, no such
application for
counter-claim but only reference in both the founding and answering
affidavits that the respondent has indeed sued
out summons against
the applicant. This has also been admitted by the applicant.
The source of such an action has been
fully set out. It is
clear therefore that the respondent’s claim against the
applicant is genuine and substantial.
[36] Quite clearly the
applicant has a number of concerns against the respondent’s
action. I have noted those concerns
but under the circumstances
this Court is not at liberty to deal with them or the respondent’s
claims at this stage and in
these proceedings. If the
application to wind-up the respondent and the respondent’s
claims for payment of the amounts
it has claimed in the action
against the applicant were contained in one application or the same
papers, this Court would have
adopted the approach set forth in
Truter v Degenaar 1990(1) SA 206 TPA at page 210 H
:
“
Die
uitgangspunt sowel as konklusie is dus in ooreenstemming met ons
gemenereg. Eis en teeneis behoort Pari passu bereg te
word maar
die Hof het ‘n onbeperkte diskresie om anders te gelas, welke
diskresie uit die aard van die saak om goeie redes
uitgeoefen sal
word.”
At page 211 D-F the Court
as per Van Dijkhorst continued as follows:
“
Die
regsposisie is dus soos volg: Hoewel Reël 22(4) slegs tot
aksies beperk is, het dit nie die bestaande reg wat van
toepassing
was op sowel aksies as mosies gewysig nie. Daarkragtens was die
uitgangspunt dat eis en teeneis gelyktydig bereg
behoort te word en
dat waar die eis onbetwis is vonnis daarop opgeskort word hangende
afhandeling van die ongelikwideerde teeneis.
Die Hof het ‘n
diskresie om van die Reël af te wyk. Die diskresie is nie
beperk tot gevalle waar die teeneis beuselagtig
of kwelsugtig is en
ingestel word bloot om vonnis op die eis te vertraag nie. Die
diskresie is wyer en die goeie redes wat
‘n Hof daartoe bring
om dit uit te oefen ten gunste van ‘n eiser is nie vooraf
vatbaar vir definisie nie. Trouens,
om as voorvereiste te stel
dat bevind moet word dat die teeneis beuselagtig of kwelsugtig is,
sou die diskresie prakties gesproke
kragteloos maak aangesien ‘n
Hof kwalik die eindbeslissing op die teeneis vooruit sou wou loop en
sonder behoorlike ondersoek
bevind dat die teeneis ongegrond is.
Die uiteenlopende oorwegings wat in die verlede ‘n rol gespeel
het by die uitoefening
van die diskresie blyk onder andere uit die
sake hierbo aangehaal.”
[37] In this matter,
unfortunately, the respondent’s action is not contained in the
same papers as the current application.
It is therefore, apart
from other factors not necessarily mentioned herein, difficult for
this Court to deal with both the application
and the respondent’s
claim against the applicants. Finally the parties did not have the
opportunity to seriously and intensively
ventilate all the ingredient
issues relating to the respondent’s claims. Having considered
the respondent’s claims
against the applicant it is my
considered view that the Court should, for the following reasons,
exercise its discretion in favour
of the respondent:
37.1
the respondent has issued summons against the applicant in which it
has claimed
an amount that in excess of its
debt to the applicant;
37.2
the respondent has set forth the source of its claims against the
applicant and for
that reason the
respondent’s claims against the applicant are not spurious or
are
genuine;
37.3 there is substance
in the respondent’s claims against applicant and accordingly
the claims need to be investigated;
37.4 the respondent’s
cases or claims against the applicant are still pending;
37.5
at the hearing of these proceedings to parties had no opportunity to
deal fully with
the respondent’s
claims; and,
37.6
finally, the respondent is by law entitled to raise its claims
against the respondent
as a defence against
the application to have it wound-up.
[38]
The applicant
has failed to admit or deny and/or confers and void the facts
contained in, among others, paragraph 17 of the respondent’s
answering affidavit
This is the third and
last point that constitutes the respondent’s defence against
the application. In paragraph 17 of its
answering affidavit Ndlovu
has levelled certain allegations against the conduct of the
applicant. Among these allegations
made are that the applicant
ejected the respondent from its premises; that the applicant took
possession of the respondent’s
assets and finally that,
notwithstanding demand, the applicant has failed to return such
assets. And in the same paragraph, Ndlovu
proceeded to list all such
assets it is alleged the applicant took possession of and their
values. It is these allegations
that the respondent contends
that they were not denied or admitted by the applicant.
[39] The contention that
the applicant did not deny or admit or confess and avoid the facts
contained in paragraph 17 of the answering
affidavit is, in my view,
not correct for the applicant has dealt with them in paragraph 31.3.3
of its replying affidavit.
Whether or not it is true, and this
remains an allegation which this Court in this matter is not bound to
investigate, in paragraph
31.3.3 the applicant did not only deny that
the applicant ejected the respondents from its premises but also
contended that there
was no veracity in respect of the allegation
that the applicant obtained possession of any assets belonging to the
respondent.
The applicant also stated that the respondent’s
purported attribution of value of R3,035,200.00 of the said assets
lacked
any foundation.
[40] In the premises it
is clear that the applicant has appropriately dealt with the contents
of paragraph 17 of the respondent’s
answering affidavit.
Any contention to the contrary lacks merit.
[41] In the result I make
the following order:
1. The application for
the winding-up of the respondent is hereby dismissed with costs.
_____________________
P.M. MABUSE
JUDGE OF THE HIGH COURT
Appearances
:
Counsel for the
Applicant: Adv. JP Vorster (SC) & Adv. CP Wesley
Instructed by:
Fluxman’s Attorneys
c/o Friedland Hart
Solomon Nicolson
Counsel for the First
Respondent: Z Omar (Attorney)
Instructed by: Zehir
Omar Attorneys
c/o Liebenberg Malan
Liezel Horn Inc.
Date Heard: August
2015
Date of Judgment:
March 2016