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[2014] ZAGPPHC 222
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Standard Bank of South Africa Limited v Southern Spirit Properties 8 (Pty) Limited (33193/2013) [2014] ZAGPPHC 222 (12 March 2014)
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IN
THE NORTH GAUTENG HIGH COURT. PRETORIA
(REPUBLIC
OF SOUTH AFRICA
CASE
NO: 33193/2013
DATE:
12 MARCH 2014
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
STANDARD
BANK OF SOUTH AFRICA
LIMITED
.......................................................
Applicant
And
SOUTHERN
SPIRIT PROPERTIES 8 (PTY) LIMITED
(REG.
NO:
2002/026177/07)
............................................................................................
Respondent
JUDGMENT
KGANYAGO
AJ:
[1]
The applicant has brought an application against the respondent in
which they are applying for the final winding-up of the respondent.
Counsel for the applicant submitted in the alternative, that I may
also consider issuing a provisional winding-up order. The respondent
is opposing the application.
[2]
The winding-up application is based on
the grounds that the respondent is unable to pay its debts as
intended by the provisions
of section 344(f) read with sections 345(1
)(c) and 345(2) of the Companies Act no 61 of 1973 (“the old
Act”).
[3]
According to the applicant’s
founding affidavit the respondent is indebted them in amounts arising
from two home loans. The
first home loan was for R2 400 000-00 whilst
the second home loan was for R2 500 000-00.According to the
applicant, the respondent
has been in arrears with their bond
repayments. The respondent has made several unfulfilled undertakings
to settle the arrears.
According to the applicant as at 15
th
April 2013 the arrears for the first home loan amounted to R2322-98
whilst for the second home loan amounted to R1 512 792-44.
[4]
The applicant submitted that the
respondent has failed to put up any balance sheet or cash flow
statements which indicate their
solvency, its liabilities and its
ability to pay its debts as they fall due.
[5]
Counsel for the applicant submitted that
the respondent is unable to pay its debts and that their failure to
submit its financial
statements is an indication that they are
commercially insolvent.
[6]
According to the respondent, the
applicant has failed to proof the amount due to them. The respondent
is disputing that they are
owing the amount as stated in the
applicant’s founding affidavit. The respondent contends that
the failure by the applicant
to attach a certificate of balance
renders them to unable to proof what amount is due to them. The
respondent is of the view that
the applicant did not bring the
application on basis that it is just and equitable that they be
wound-up.
[7]
In a final winding-up
application, the onus is on the applicant to prove the grounds upon
which it relies. The test for commercial
insolvency is whether the
company carrying on business is having liquid assets or readily
realisable assets available to meet its
liabilities as they fall due
to be met in the ordinary course of business and thereafter to be in
a position to carry on normal
trading. It does not matter whether the
company’s assets, fairly valued, far exceed its liabilities.
See ABSA Bank Ltd v
Rhebokskloof (Pty) Ltd and others
1993 (4) SA 436
CPD.
[8]
In Kalil v Decotex (Pty)
Ltd And Another
1988 (1) SA 943
AD at page 980 B-C
the
court said the following:-
“
Consequently
,
where the respondent shows on a balance of probability that its
indebtedness to the applicant is disputed on 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 indebtness is disputed on a bona fide and reasonable
grounds. ”
[9]
It is not in dispute that the respondent
has taken two loans with the applicant through mortgage bonds. Even
though the respondent
is disputing that it is owing the respondent
the amount of arrears as stated in the applicant’s founding
affidavit, there
is overwhelming evidence that the respondent is not
update with its bond repayment. The respondent has made several
undertaking
to settle its arrears, but has failed to honour them.
[10]
There is evidence that the respondent
was given ample opportunity to update its arrears but was unable to
do so. At some point in
time the applicant has threatened to
liquidate the respondent if it continues to fail to honour its
undertaking of updating its
arrears.
[11]
The respondent’s previous attorneys in one of their letter
written to the applicant’s attorneys, stated as follows:
- “It
is still our submission that any legal action at this stage, will not
be benefial to any of the parties involved. It
is doubtful if
creditors will receive a dividend should you proceed with
applications for liquidation and/or sequestration. If
your client is
indeed prepared to take the risk not to receive any dividend, please
advise the percentage of unsecured debt your
client will be prepared
to settle for to enable our clients to consider their respective
positions."
[12]
In my view, this is an admission by the
respondent’s previous attorneys that the respondent was in
financial problems and
was also struggling to pay its debts.
[13]
In Kalil v Decotex (Pty) Ltd and Another
supra, at page 979 B, they court held that where on the affidavits
there is prima facie
case (ie a balance of probabilities) in favour
of the applicant, then in my view, a provisional order of winding-up
should normally
be granted.
[14]
Counsel for the respondent has argued
that the applicant is making a vague allegation of indebtness by the
respondent as they have
failed to attach a certificate of balance
proving the respondent’s alleged indebtness. In an email dated
15/04/13 to the
applicant’s attorneys the following is stated:
“
These
are the current arrears and balances:
Home
Loans
Crause
Home Loan a/c 361874383 Arrears: R1 063 349-01
Balance:
R4 148 077-84
Broadbrush
Investments 60 (Pty) Ltd a/c 363377891
Arrears: R2 393 912-96
Balance:
R8 194 138-91
Southern
Spirit 361545371
Arrears:
R1 512 792-44
Balance:
R7 515
82Í-1
8
Southern
Spirit 212853074
Arrears:
R2 322-98
Balance:
R2 114 914-35
You
will note that the arrears (save for second Southern Spirit account)
are substantial.
My
client requires immediate payments of these amounts.
In
addition, the Crauden Family Trust Account no 4[….] is
indebted to my client in the amount of R7 751 146-53.
My
client also requires payment of this amount.
Unless
all of these amounts are paid by this coming Wednesday April 172013,
my intrucsts are to proceed to wind up the companies
and sequestrate
the Trust and Mr Crause’s estate.
I
am reserving all my client’s right. ”
[15]
There is no email or letter sent to the
applicant’s attorneys informing them that they are disputing
the contents of their
email. However, in their answering affidavit,
the respondent dispute the contents of this email.’
[16]
There is proof that the respondent has
been making some payments in reduction of their arrears even though
it was not regular. The
respondent is disputing that it is owing the
arrears as claimed by the applicant. Clause 6 of the covering
mortgage bond read as
follows:- “ A certificate signed by any
of the Bank’s managers, whose appointment need not be proved,
will, on its
mere production be proof, unless the contrary is proved,
of the following stated in the certificate.
16.1.
the amount due to the Bank at any time
(“debt”);
16.2.
the fact that the debt is due and
payable;
16.3.
the rate of interest payable;
16.4.
the date from which the interest is
calculated; and
16.5.
any other matter relating to the
Mortgagor’s indebtness secured by this bond.”
[17]
The applicant contends that the
certificate of balance is not a requirement to proof the indebtness
of the respondent. However,
in terms of the covering mortgage bond,
that is a contractual requirement and the applicant is bound by it.
[18]
The question is not whether the
respondent is indebted to the applicant or not, but whether the
respondent’s disputed amount
is bona fide and reasonable. In my
view, since the respondent has been making payments, even though not
regular, they acted bona
fide and were also reasonable is disputing
the arrears claimed by applicant as it did not reflect the payments
they have made.
There are two conflicting versions which cannot be
resolved on the affidavits. There was no submission that should I
find that
there is a dispute of fact, I should refer the matter for
hearing of oral evidence.
[19]
The applicant when embarking on this
application should have attached the certificate of balance which on
its mere production would
have proved the indebtness of the
respondent. Now it is not clear how much the respondent is owing if
ever it is owing. It is not
in dispute that the respondent has been
attempting to update its arrears. Therefore in
my view there is a genuine dispute of fact in relation to the
outstanding arrears.
[20]
In the result I make the following
order:
1.
The application is dismissed with costs.
MF
KGANYAGO
ACTING
JUDGE OF THE HIGH COURT