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[2016] ZAGPPHC 1037
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Four Seasons Guesthouse CC v Ovivo Aqua SA (Pty) Ltd (9616/2016) [2016] ZAGPPHC 1037 (15 December 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
15/12/2016
Case
Number: 9616/2016
Reportable:
No
Of
interest to other judges: No
Revised.
FOUR
SEASONS GUESTHOUSE CC
APPLICANT
AND
OVIVO
AQUA SA (PTY) LTD
RESPONDENT
JUDGMENT
MOLEFE
J
[1]
This is an application in which the applicant seeks an order for a
final liquidation of the respondent. The respondent opposes
the
relief sought.
[2]
The applicant conducts a guesthouse business at 12 Gruisweg,
Lephalale. The respondent is an erstwhile customer of the applicant
in that the respondent's employees were accommodated at applicant's
guesthouse from 24 May 2015 to 31 July 2015.
[3]
The applicant alleges that it is the creditor of the respondent and
that the respondent owes the applicant an amount of R210
398, 40 as
an outstanding debt for accommodation, breakfast and dinner rendered
to the respondent's employees for the period 8
July 2015 to 31 July
2015.
[4]
The applicant relies on its alleged status as a creditor of the
respondent and on an allegation that the respondent is deemed
unable
to pay its debts alternatively that it is just and equitable that the
respondent be wound-up.
[5]
Applicant relies on section 344 (f) of the Companies Act 61 of 1973
("the Act") as a ground of insolvency in that
the
respondent is unable to pay its debts after a demand for payment of
the outstanding debt was made to the respondent in terms
of section
345 of the Act on 24 November 2015.
[6]
The respondent opposes this application on the following grounds:
6.1. deponent to
applicant's founding affidavit has no authority to depose to the
affidavit;
6.2. applicant has no
locus standi
as it was in deregistration at the time when the
application was launched;
6.3. applicant has no
valid cause of action as the claim is disputed on
bona fide
and
reasonable grounds.
[7]
An applicant for winding-up must show, on a balance of probabilities
that he is a creditor of the company in order to establish
that he
has
locus
standi
to
bring the application and to show on a balance of probabilities that
he has a valid claim against the company
[1]
.
[8]
A company or other body corporate is deemed to be unable to pay its
debts and may therefore be wound-up if a creditor to whom
the company
owes a due debt of not less than R200, has served a demand on the
company requiring it to pay that amount and the company
has for three
weeks thereafter neglected to pay the sum or to secure or compound it
to the reasonable satisfaction of the creditor
[2]
.
Lack
of Authority by Deponent
[9]
Respondent's counsel, Advocate P Marx submitted that the deponent to
the founding affidavit on behalf of the applicant is one
Martha
Hermina Pieterse ("Pieterse"), who claims to be duly
authorized to depose to the founding affidavit. The member
of the
applicant is however a trust called R&R Pieterse Trust and not
Pieterse. Accordingly, respondent's counsel argued that
Pieterse is
not authorized to bring this application nor to depose to the
founding affidavit and on this basis, the application
should be
dismissed.
[10]
Applicant's counsel Advocate C Richard submitted that the deponent to
the founding affidavit Pieterse, is the only trustee
of the R&R
Trust, which trust is the only member of the close corporation
(applicant). As such, she is acting
nomine officio
and as a
result, she is the only member of the Close Corporation for all
interest and purposes and such, she is the only person
capable of
deposing to the founding affidavit.
[11]
In my view, the authority of Pieterse to depose to the founding
affidavit is beyond reproach. Pieterse is the person who has
a direct
and substantial interest in the matter and has the necessary legal
standing and this defence should fail and is consequently
dismissed.
Applicant's
Locus Standi
[12]
It is contended on behalf of the respondent that the applicant lacks
locus standi
due to the applicant being in the process of
deregistration at the time when the application was launched.
Respondent's counsel
relied on
Juliana and Associates CC v Fikeni
N.O. and Others (25388/2013) [2015] ZAGP PHC 734 (22 May 2015)
that
is trite that corporate entities in deregistration do not have
locus
standi.
In my view, this case is distinguishable from this
application.
[13]
It is common cause
in
casu
that
when the application was launched, applicant was not deregistered but
was in the process of deregistration due to outstanding
annual
returns
[3]
. Applicant's counsel
submitted that although the applicant was listed as being in the
process of deregistration, the CIPC Disclosure
Certificate issued on
15 March 2016 listed the applicant as being
"in
business"
as
the annual returns were subsequently submitted and the deregistration
process terminated. In my opinion, the respondent's defence
in this
regard has no merit and should fail. There is a fundamental
difference between the concepts of
deregistered
and
being in
the
process of deregistration;
the
former denoting the corporate personality ceasing to exist, the
latter denoting where the entity is still vested with corporate
personality. I am satisfied that at no stage was the applicant
deregistered and at all relevant times, applicant was registered
and
in business.
Valid
Cause of Action
[14]
As the status of the debtor is involved in winding-up proceedings,
the applicant creditor must clearly establish his claim.
Consequently, if a Court is left in any doubt as to the validity or
bona
fides
of
the applicant creditor's claim, it will refuse to order the
winding-up of the respondent
[4]
.
[15]
This application is based upon a claim by the applicant seeking
payment of R210 398, 40 from the respondent. The respondent
materially disputes any obligation to pay the debt for the following
reasons:
15.1 respondent has paid
an amount of R35 066, 40 into its attorneys' trust account during
March 2016 and holds same until a valid
tax invoice from the
applicant and a tender to pay the respondent's costs on an attorney
and own client scale are received;
15.2 the remaining amount
outstanding is
bona fide
disputed as there is no basis in
contract or otherwise for the applicant to claim payment for
accommodation as no persons for or
on behalf of the respondent
resided at the applicant's guesthouse for the period in which monies
are levied;
[16]
Respondent's counsel submitted that on 7 December 2015, the
respondent did answer the applicant's letter in terms of section
345
of the Act
[5]
and contended that
the applicant knew of the dispute of fact in advance but
notwithstanding such knowledge, elected to launch the
liquidation
application. The applicant's counsel on the other hand argued that
the alleged dispute was only fabricated after the
statutory letter
was sent to the respondent and is not
bona
fide.
[17]
A creditor who resorts to enforce a claim by way of winding-up
proceedings, which claim is
bona
fide
disputed
by the debtor, lacks the necessary
locus
standi.
(See
Kalil v
Decotex (Pty) Ltd and Another
1988 (1) SA 943
(AD) at 980 A-980
I).
The approach to be adopted by a Court where a provisional or final
order is sought where a claim is disputed was set out by
Fourie J (as
part of a Full Court) in
Helderberg
Laboratories CC v Sola Technologies (Pty) Ltd
[6]
,
where
he stated the following:
"[20] .
. . .
Where an applicant, as in the instant case, relies on section 346
(1)
(b) of the Companies Act, it has to satisfy the court that
it is
a
creditor within the meaning of the said subsection. It
follows that, on the return day of
a
provisional winding-up
order, the onus is on the applicant to prove on
a
balance of
probability that it has the necessary locus standi as
a
creditor.
See Henochsberg on the Companies Act vol. 1 at 728-30 and the
authorities there
cited.
[21] If however,
a
respondent opposes an application for its liquidation on the basis
of
a
dispute as to the existence of the alleged debt,
a
difference in approach is called for. If the alleged debt is
genuinely disputed on reasonable
grounds, the attitude of our
courts is that it would be wrong to allow such dispute to be resolved
by utilizing the machinery designed
for winding-up proceedings,
rather than ordinary litigation. In this event the court ought to
refuse the granting of
a
winding-up order, whether it be
a
provisional or final order which is sought by the applicant. See
Kalil v Decorex (Pty) Ltd and Another
1988 (1) SA 943
(A); Wolhuter
Steel (Welkom) Pty Ltd v Jatu
Construction (Pty) Ltd (in
provisional liquidation)
1983 (3)
SA
815
(O); HO/se
Reutter and Another v Heg Consulting Enterprises (Pty) Ltd (Lane and
Fey NNO Intervening)
1998 (2)
SA
208
(C); and Payslip
Investment Holdings
CC
v Y2K Tee Ltd
2001 (4)
SA
781
(C)".
[18]
This reasoning and approach (concerning the creditor's claim and
other issues) was also followed in
Payslip
Investment Holdings CC v Y2K Tee Ltd
[7]
where
the following was stated:
"With reference
to the disputes regarding the respondent's indebtedness, the test is
whether it appeared on the papers that
the applicant's claim is
disputed by the respondent on reasonable and bona fide grounds. In
this event it is not sufficient that
the applicant has made out
a
case on the probabilities".
[19]
In determining whether a creditor's claim is
bona fide
disputed
on reasonable grounds the following legal principles are relevant:
19.1. The well-known
"Badenhorst role"
viz that where a respondent
disputes liability on
bona fide
grounds, it is improper for an
applicant to seek to recover the disputed debt by way of
sequestration proceedings rather than by
way of the usual action
procedure and was set out by Corbett J (as he then was) in
Kalil v
Decotex supra at 980 B-D
as follows:
"Consequently,
where the respondent shows on
a
balance of probability that
its indebtedness to the applicant is disputed on bona fide and
reasonable grounds, the court will
refuse
a
winding-up order.
The onus on the respondent is
not to show that it is not
indebted to the applicant: it is merely to
show
that the indebtedness is disputed on bona fide and reasonable
grounds"
(own emphasis).
19.2. The test to be
applied was set out by Thring J in
HUise-Reutter and Another v Heg
Consulting Enterprises (Pty) Ltd supra at
219 F 220
B
as follows:
"They do not, in
this matter, have to prove the company's defence in such proceedings.
All that they have to satisfy me of
is that the grounds which they
advance for their and the companies disputing these claims are not
unreasonable".
[20]
In
casu,
I am of the view that the respondent genuinely
disputes the applicant's debt on
bona fide
and reasonable
grounds. In response to the applicant's section 345 letter of demand
dated 24 November 2015, the respondent in a
letter dated 7 December
2015 disputed the debt on the basis that the respondent's employees
never utilized the applicant's guesthouse
during the period claimed.
The applicant therefore knew, or should reasonably have foreseen that
the debt was disputed on
bona fide
and reasonable grounds at
the time of the institution of the winding-up proceedings. The
Badenhorst
rule constitutes a principle that winding up
proceedings are not an appropriate procedure for a creditor to use
when the debt
is
bona fide
disputed otherwise it is an abuse
of the winding-up process.
Failure
to establish grounds of winding-up
[21]
The applicant relies on a statutory demand for its assertion that the
deeming provision contained in the old Companies Act
applies. The
applicant chooses to neglect the response by the respondent dated 7
December 2015. The deeming provisions accordingly
does not find
application as the claim foreshadowed in the statutory demand is
disputed. The applicant argues that the respondent
failed to take the
Court into its confidence and to disclose its financial situation and
is therefore commercially insolvent.
[22]
It was submitted on behalf of the respondent that the respondent has
been actively trading for many years, has approximately
75 employees,
has assets of considerable value and in particular a claim against
Eskom Limited arising from the Medupi Project
which in itself is
worth millions of rand.
[23]
It is not in my view sufficient for an applicant to merely allege
insolvency of the respondent; there must be evidence advanced
in
order to prove the allegation
[8]
.
Essentially, the applicant is asking this Court to wind-up a solvent
Company based on a debt which is disputed on
bona
fide
and
reasonable grounds. This in my view, is the abuse of the winding-up
process.
[24]
The applicant then relies on the ground of just and equitable ground
as if it is some form of
"catch all"
phrase. There
is no grounds to rely on just and equitable and accordingly, no case
whatsoever has been made out in the founding
papers.
Costs
[25]
The applicant, in bringing a final winding-up application where its
claim is disputed on
bona fide
and reasonable grounds and
where no case is made out that the respondent is unable to pay its
debts or that it is just and equitable
that the respondent be wound
up, warrants a costs order.
[26]
In the circumstances, I make the following order:
The application is
dismissed with costs.
__________________
D
S MOLEFE
JUDGE OF THE HIGH
COURT
APPEARANCES:
Counsel
on behalf of Applicant
:
Adv. C
Richard
Instructed
by
: Lewies
& Associates
Counsel
on behalf of Respondent
:
Adv. P
Marx
Instructed
by
: Dewey
Hetzberg Levy Inc.
Date
Heard
: 22
November 2016
Date
Delivered
: 15
December 2016
[1]
Common Wealth Shippers Limited v Meyland Properties {Pty) Ltd
1978
(1) SA 70
D 72
[2]
Section 344 {f) and 345 of the Companies Act
[3]
Bundle page 44, Annexure "AA1"
[4]
Minooden v Ahard 1933 TPD 281
[5]
Bundle page 51Annexure "AA4"
[6]
2008 (2) SA 627
(CPD) at [20] and [21]
[7]
2001 (4) SA 781(C)
[8]
HST Construction and Plant Hire CC v Uniplant Hire CC
2012 (5) SA
197
(FB)