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[2014] ZAGPPHC 172
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VVM (Pty) Ltd v Automan Auto Trading (Pty) Ltd (31786/2013) [2014] ZAGPPHC 172 (3 April 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE NO: 31786/2013
DATE: 3/4/2014
IN THE MATTER BETWEEN:
VVM
(PTY)
LTD
APPLICANT
AND
AUTOMAN
AUTO TRADING (PTY) LTD
RESPONDENT
JUDGMENT
KOLLAPEN J:
1. This is an application
brought by the applicant in which it seeks the winding up of the
respondent on the basis that it is unable
to pay its debts as
contemplated in Section 344, read with Section 345 of the Companies
Act 61 of 1973 (read together with the
Companies Act 71 of 2008
).
2. The respondent opposes
the relief sought and beyond opposing the application on its merits,
has also raised various points
in limine.
3.
FACTS UNDERPINNING THE RELIEF SOUGHT
3.1
During November 2012 an agreement was concluded in terms of which the
applicant would
send data messages in the form of short messages
services (‘SMS’) to members of the public.
3.2
There is a dispute as to whether this agreement was concluded between
the applicant
and the respondent, as is contended for by the
applicant, or as between the applicant and an entity called Automan
Data Solutions
(Pty) Ltd (as is contended for by the respondent).
3.3
The applicant rendered services in the form of SMS messages during
November and December
2012 and in January 2013 totalling R741 000-46.
3.4
The applicant thereafter issued various invoices to the respondent
and in the name
of Automan Auto Trading and in response thereto there
were various e-mail messages exchanged between the applicant and one
Andre
van Zyl.
3.5
The designation of Mr van Zyl on the e-mail messages was that of ‘CEO
–
Automan Data Solutions (Pty) Ltd’. It appears that Mr
van Zyl is also the CEO of the respondent. In none of the e-mails
which
were written in response to the invoices generated by the
applicant does Mr van Zyl take the stance that the incorrect entity
was
invoiced, and while he is designated as the CEO of Automan Data
Solutions (Pty) Ltd, he responded in those e-mails to invoices
directed to the respondent.
3.6
On the 19
th
of March 2013 an electronic payment of
R200 000-00 was made from the bank account of the respondent to
the applicant in part-payment
of the debt.
3.7
Following various unfulfilled promises of payment made by Mr van Zyl,
the applicant,
through its attorneys, issued a letter of demand to
the respondent on the 19
th
of March 2013.
3.8
On the 22
nd
of March 2013, one Andre van Zyl (of Munnik
Basson & Associates), presumably the same van Zyl referred to
above, responded
and stated that ‘We act on behalf of Automan.’
The reference to ‘Automan’ could only have been a
reference
to the respondent as the letter of the 19
th
of
March 2013 was addressed to the respondent alone and to no other
entity.
4. In opposing the
application, the respondent has raised various defences, including:
4.1
The incorrect citation of the applicant
:
The applicant is cited as
VVM (Pty) Ltd whereas in fact it is ‘Van De Venter Mojapelo
(Pty) Ltd’. In my view this is
not a matter of substance as it
appears that the abbreviated from of the plaintiff was used.
The resolution authorising the
launch of these proceedings contains
the full and proper names of the applicant. While the use of the
abbreviated name of the applicant
may be regarded as shoddy, I am
satisfied that there can be no uncertainty as to whom it relates. To
dismiss the application on
that basis alone would be to elevate form
above substance in the most unacceptable fashion.
4.2
The relief is not competent as the respondent is commercially
solvent
4.3
On the merits the debt on which the application is based is a
debt due by Automan Data Solutions (Pty) Ltd and not by the
respondent.
4.4
The respondent also contends that it is a solvent company and is able
to pay its debts.
In support of this it annexed its annual financial
statement for the year ended June 2012, which demonstrated that its
assets exceeded
its liabilities and in addition gave notice that it
intended prior to the hearing of this application to pay the sum of
R541 000-46
into its attorney’s trust account. That amount
has been paid into the respondent’s attorney’s trust
account as
per the affidavit of its attorney, Mr Henry Brooks, dated
the 12
th
of March 2014.
ANALYSIS
5.
WAS THE CORRECT PARTY CITED?
5.1
The stance that the contract for services was entered into between
the applicant and
Automan Data Solutions (Pty) Ltd must be viewed in
the context of the evidence in its entirety.
5.2
On what is before me, I have little hesitation in concluding that the
respondent was
indeed the contracting party. All invoices were
directed to it as was the letter of demand, and the payment of
R200 000-00
was received from its banking account.
5.3
At no stage whatsoever did the respondent, who had numerous
opportunities as well
as the duty to do so, point out to the
applicant that it was pursuing the wrong party. The fact that Mr van
Zyl was designated
as CEO of Automan Data Solutions (Pty) Ltd on the
e-mails is not determinative of the issue when one has regard to the
evidence
in its totality and to which reference has already been
made.
5.4
On the face of it, what has at first sight complicated the issue is
that the directors
and key personnel of the respondent are
substantially the same as those of Automan Data Solutions (Pty) Ltd.
If this is how the
respondent has elected to conduct its business,
then the applicant cannot be held to the consequences which may arise
therefrom.
5.5
I am accordingly satisfied that the contract of services which
generated the debt
upon which this application is premised, was
entered into between the applicant and the respondent, and that the
respondent is
liable for the payment thereof.
6.
THE RELIEF SOUGHT IS NOT COMPETENT AS THE RESPONDENT IS
COMMERCIALLY SOLVENT
6.1
At the time of the launching of this application, the applicant was
justified in concluding
that the applicant was unable to pay its
debts as contemplated in
Section 344
read with Section 345 of the
Companies Act 61 of 1973. The various responses by the respondent to
the applicant’s demand
for payment reflect a consistent thread
that the respondent was not in possession of the necessary funds to
make payment of the
applicant’s claim.
6.2
That situation however changed over time and at the date of the
hearing of this application,
the Court was satisfied, regard being
had to the balance sheet of the respondent as well as the payment
into trust of the claim
of the applicant, that the respondent was
indeed able to pay its debts.
6.3
From this I am compelled to conclude that the respondent is neither
factually nor
commercially insolvent.
6.4
On what is before me the relief sought in respect of the winding up
of the respondent
is accordingly not competent and should be refused,
although my view is that the applicant was entitled to launch the
application
and seek the relief that it did. The commercial solvency
of the respondent was established only in the days preceding the
hearing
when it paid the amount in dispute into the trust account of
its attorneys. This has a bearing on the costs of the application,
a
matter I will return to later.
7.
OTHER COMPETENT RELIEF
7.1
During argument the Court was urged by the applicant to make a money
order in respect
of the amount in dispute in the event that it
refused the main relief sought. Counsel was requested to prepare
heads of argument
on this aspect and I am grateful to them for their
assistance in this regard.
7.2
In
COLLETT
v PRIEST
1931 AD 290
at 299, DE
VILLIERS CJ explained the nature and purpose of sequestration
proceedings as follows:
‘
The
order placing a person’s estate under sequestration cannot
fittingly be described as an order for a debt due by the debtor
to
the creditor. Sequestration proceedings are instituted by a creditor
against a debtor not for the purpose of claiming something
from the
latter, but for the purpose of setting the machinery of the law in
motion to have the debtor declared insolvent. No order
in the nature
of a declaration of rights or of giving or doing something is given
against the debtor. The order sequestrating his
estate affects the
civil status of the debtor and results in vesting his estate in the
Master. No doubt before an order so serious
in its consequences to
the debtor is given the court satisfies itself as to the correctness
of the allegations in the petition.
It may for example have to
determine whether the debtor owes the money as alleged in the
petition. But while the court has to determine
whether the
allegations are correct, there is no claim by the creditor against
the debtor to pay him what is due nor is the court
asked to give any
judgment against the debtor upon any such claim.’
7.3
TRENGOVE AJ referred to this
extract in
INVESTEC BANK LTD AND
ANOTHER v MUTEMERI AND ANOTHER
2010 (1) SA 265
(GSJ)
at para 29 in considering the purpose and effect of an application
for sequestration. At paragraph 30 he said:
‘
The
purpose and effect of an application for sequestration are merely to
bring about a convergence of the claims in an insolvent
estate to
ensure that it is wound up in an orderly fashion and that creditors
are treated equally. An application for sequestration
must have a
liquidated claim against the respondent, not because the application
is one for the enforcement of the claim, but merely
to ensure that
applications for sequestration are only brought by creditors with a
sufficient interest in the sequestration. Once
the sequestration
order is granted, the enforcement of the sequestrating creditor’s
claim is governed by the same rules that
apply to claims of all the
other creditors in the estate. The order for the sequestration of the
debtor’s estate is thus
not an order for the enforcement of the
sequestrating creditor’s claim.’
7.4
In
COMBUSTION TECHNOLOGY (PTY) LTD v TECHNOBURN (PTY) LTD
2003
(1 265 (C)
the Court in dealing with a similar request as
the one made to this Court concluded as follows:
‘
Not
only is the relief that is now being sought, namely payment (ignoring
the frills and furbelows), substantially dissimilar to
the relief
sought in the notice of motion, but the respondent has not been
apprised that such relief would be sought and furthermore
has not had
an adequate opportunity of considering and dealing with it in the
answering affidavit. In the premises I have come
to the conclusion
that the applicant is not entitled to the order it now seeks under
the prayer for other and/or alternative relief.’
7.5
In my view and on what is before me, it cannot be said that the
respondent was appraised
that such relief would be sought and was
given an adequate opportunity of considering and dealing with it in
the answering affidavit.
7.6
I have accordingly come to the conclusion that the relief the
applicant seeks by way
of payment is not competent for the reasons
given.
8.
COSTS
In considering the matter
of costs, it is clear that when proceedings were launched and until
the payment into trust of the amount
in dispute, the applicants were
both entitled to, and justified in bringing these proceedings. The
defences raised were raised
for the first time in the answering
affidavit even though the applicant had ample opportunity to raise
some of them at an earlier
stage. In addition the ‘ability to
pay’ was only decisively established in the days preceding the
hearing of the matter.
Under those circumstances I am inclined to
exercise the discretion I have with regard to costs in favour of the
applicant.
9.
ORDER
In the circumstances I
make the following order:
i.
The application is dismissed;
ii.
The respondent is ordered to pay the costs of the application.
N KOLLAPEN
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
(GAUTENG DIVISION,
PRETORIA)
31786/2013
HEARD
ON: 17 MARCH 2014
FOR
THE APPLICANTS: ADV K. D. RAMOLEFE
INSTRUCTED
BY: VVM ATTORNEYS (ref: K BOTHA)
FOR
THE RESPONDENT: ADV G. D. WICKINS
INSTRUCTED
BY: BROOKS & BRAND INC (ref: A BROOKS/1743)