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[2013] ZAGPPHC 212
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LSP Petroleum (Pty) Ltd v Kukhanya Marketing CC (55336/2012) [2013] ZAGPPHC 212 (17 July 2013)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG, PRETORIA)
Case
number: 55336/2012
DATE:17/07/2013
In
the matter between : -
LSP
PETROLEUM (PTY)
LTD
......................................................................................
Applicant
and
KUKHANYA
MARKETING
CC
.................................................................................
Respondent
And
JAMES
NTIMANE
.................................................................................................
First
Applicant
AGNES
THEKISO
..........................................................................................
Second Applicant
MALOBOHANG
MOFOLO
…............................................................................
Third
Applicant
MANDLA
PETER
TIMANA
….........................................................................
Fourth
Applicant
And
LSP
PETROLEUM (PTY)
LTD
...............................................................................
Respondent
In
re:
LSP
PETROLEUM (PTY)
LTD
...................................................................................
Applicant
and
KUKHANYA
MARKETING
CC
...............................................................................
Respondent
JUDGEMENT
JANSE
VAN NIEUWENHUIZEN AJ
[1]
The applicant applies for an order placing the respondent under
provisional liquidation.
INTERVENTION
APPLICA TION
[2]
On 29 May 2013, I postponed the application in order to afford the
applicant an opportunity to comply with the provisions of
section
346(4A) of [Appendix i: Chapter Xiv' of the 1973 Act to the Companies
Act, 71 of 2008] ("1973 Act") the 1973
Act.
[3]
Subsequent to the service of the application on the employees of the
respondent, four of the respondent's employees launched
an
application for leave to intervene in the application.
[4]
In support of their allegation that they have a direct and
substantial interest in the winding-up application, the employees
state the following:
"10.1
we are employees of Kukhanya Marketing CC;
10.2
we depend on the said entity for our job security and livelihood;
10.3
we are breadwinners at our respective households;
10.4
the winding-up of Kukhanya Marketing CC will inevitably result in us
losing our employment;
10.5
there is a high rate of unemployment in the Republic of South Africa;
and
10.6
we have dependants who would equally suffer severe prejudice
should
our employment with Kukhanya Marketing CC, on which we depend for
livelihood, terminate.
[5]
The devastating effect the winding-up of any company will have on its
employees is indeed unfortunate and harsh.
[6]
For this reason the legislator, undoubtedly, retained the provisions
of section 346(4A) of the 1973 Act, in the
Companies Act 71 of 2008
.
[7]
A direct and substantial interest in the subject matter of a an
application is, however, not the only requirement in order to
intervene in such an application.
[8]
A party who seeks leave to join an application as a respondent must
also make allegations which will show:
1)
that he or she has a prima facie defence to the relief sought by the
applicant;
2)
that his or her application is seriously made; and
3)
is not frivolous.
[See:
Erasmus, Superior Court Practice, Main Volume, B1-103 and the
authorities cited therein.]
[9]
At the outset, I must emphasise that I have no doubt that the
application brought by the employees for leave to intervene is
seriously made and not frivolous. That much appear from their plight
set out supra.
[10]
The only question which remains is whether the employees have a bona
fide defence to the winding-up application.
[11]
In support of their defence, the following facts are stated:
"11.
In general, we hold the view that there is no basis for the winding-
up of Kukhanya Marketing CC."
"12.
This viewpoint is based on our intimate knowledge of the financial
position of Kukhanya Marketing CC."
"14.
We respectfully submit that Kukhanya Marketing CC is vibrantly
solvent, both factually and commercially and that its assets
way
exceeds its liabilities."
[12]
The statement that the respondent is commercially solvent is,
however, as will appear infra, not correct.
[13]
On Mr Timana's (Timana), the deponent to the respondent's answering
affidavit, own version, the respondent is indebted to the
applicant
and this debt although due and payable, remains unpaid.
[14]
Mr Snyman, appearing on behalf of the employees, argued that a
solvent company may not, in terms of the
Companies Act, 71 of 2008
,
be woundup. In support of this contention, he referred to the
following judgments: HBT Construction and Plant Hire CC v Uniplant
Hire CC
2012 (2) SA 197
FB; Herman and Another v Set-Mark Civils CC
2013 (1) SA 386
FB and the unreported judgment delivered on 16
November 2012 by Goosen J in the matter of Dereck Cecil Platt v
Umgamanzi Fishing
(Pty) Ltd, Eastern Cape High Court, Port Elizabeth
(case number 3936/2011).
[15]
The judgments supra, examined the provisions of the
Companies Act, 71
of 2008
and concluded that a solvent company may only be wound-up, at
the instance of a creditor, in terms of the provisions of
section
81(1)(c).
Section 81
(1 )(c) specifies two scenarios that would
justify the winding-up of a company within the contemplation of
section 81(1).
[16]
Should the winding-up application not fall within the two categories
envisaged by
section 81
(1)(c), a creditor needs to proof factually
insolvency.
[17]
Mr Joubert, counsel for the applicant, referred me to various
dissenting judgments.In Firstrand Bank Ltd v Lodhi 5 Properties
Investment CC
2013 (3) SA 212
GNP, Van der Byl AJ held, that the
Legislator did not do away with the well established and commercially
sensible approach of commercial
insolvency. In other words, it is not
necessary for a creditor who relies on a company's inability to pay
its debts, to also proof
that the company is factually insolvent. The
deeming provision in section 345 of the 1973 Act, still applies to
applications for
the winding-up of a company.
[18]
The Lodhi 5 judgment was followed in the unreported judgment of Van
Oosten J in Firstrand Bank Ltd v Bunker Hills Investments
499 CC
(32130/11) [2012] ZAGPJHC 84 (4 May 2012).
[19]
Without referring to any of the authorities supra, Dolamo AJ reached
the same conclusion in Edge Geo LCC v Geothermal Energy
Systems (Pty)
Ltd (6883/12) [2012] 2AWCHC 391(14 December 2012).
[20]
Neither counsel referred me to a Supreme Court of Appeal judgment on
the issue, nor could I find one. Until the Supreme Court
of Appeal
has decided on the correct interpretation of the provisions of the
Companies Act, 71 of 2008
, under discussion, I find myself in respect
full agreement with the reasoning followed by Van der Byl AJ in the
Lodhi 5 matter.
[21]
In the premises, I find that the allegations relied upon by the
intervening applicants do not constitute a bona fide defence
to the
relief claimed by the applicant in the liquidation application.
[22]
Consequently, the application for leave to intervene cannot succeed.
APPLICATION
FOR PROVISIONAL WINDING-UP
[23]
The applicant relies on an Acknowledgement of Debt signed on 1 August
2012 by Timana, in his capacity as the sole member of
the respondent,
in support of the relief claimed against the respondent.
[24]
In terms of the Acknowledgement, the respondent admits that it is
indebted to the applicant in an amount of R 691 115, 00,
which amount
was due and payable by no later than 17:00 on 8 August 2012.
[25]
The Acknowledgement and its terms is common cause between the
parties.
[26]
It is furthermore common cause that the respondent has to date not
paid the said amount or any portion thereof.
RESPONDENT'S
DEFENCES:
[27]
In opposition to the relief claimed by the applicant, Timana on
behalf of the respondent, relies on the following defences:
1)
The respondent is not indebted to the applicant and the
Acknowledgement was signed by him under duress;
2)
The respondent is commercially and factually solvent.
BONA
FIDE DISPUTE:
[28]
In denying that the respondent is indebted to the applicant and
alleging that the Acknowledgement was signed under duress,
the
respondent creates a factual dispute which, if bona fide, could proof
to be fatal to the relief claimed by the applicant.
[29]
The veracity of the allegations in support of the respondent's
defences, therefore needs to be scrutinised.
FACTS:
[30]
Both parties are involved in the petroleum industry and it is common
cause that the respondent has an account at Petroleum
Oil and Gas
Corporation of South Africa (Pty) Ltd ("PetroSA"), a
supplier of petroleum products.
[31]
The applicant does not have an account with PetroSA and in order to
obtain petroleum products from PetroSA, the account of
the respondent
is, by agreement between the parties, utilised by the applicant.
[32]
The applicant would deposit funds into the respondent's PetroSA
account, whereupon PetroSA issues a "listing slip"
to the
respondent. It is noteworthy that the applicant did not have control
over the account and that the account was at all relevant
times under
the control of Timana.
[33]
On 25 April 2012, the applicant paid an amount of R 1 232 724, 00
into the respondent's account at PetroSA, in respect of three
loads
of diesel ordered by a customer of the respondent, each load
amounting to R 410 908, 00.
[34]
The fact that the aforesaid payment was made is, inter alia,
confirmed by Timana in an email dated 13 June 2012.
[9]
The transactions with the respondent's customer did not eventuate and
as a result the applicant held R 1 232 724, 00 worth of
credit in the
respondent's PertoSA account.
[10]
Against this credit, the applicant ordered two shipments of Liquid
Petroleum Gas to the value of R 528 542, 76.
[11]
In the premises, the applicant's credit in the respondent's PetroSA
account amounted to R 704 181, 24 on or about 9 May 2012.
[12]
In order to redeem the credit, the respondent had to cancel the
listing slip. Timana was requested to proceed with the cancelation
of
the remaining orders in order for the R 704 181, 24 to be repaid to
the applicant.
[13]
Timana complied with the request on 9 May 2012 via an email sent to
an employee of PetroSA.
[14]
On or about 13 June 2012, an amount of R 85 071, 20 was paid on
behalf of the respondent in reduction of the debt owed to the
applicant, leaving a balance of R 619 110, 04.
[15]
Notwithstanding various promises to pay the amount outstanding, no
payment was forthcoming from the respondent.
[16]
It is against this background that the Acknowledgement of Debt was
signed on 1 August 2012, at the offices of the applicant
in
Stellenbosch.
[17]
Timana's allegation of duress is described by him in the answering
affidavit, as follows:
"The
Applicant, however, refused to take up said offer and, instead, I was
ordered
to sign the acknowledgement of debt."
and
"I
signed aforesaid document under protest and my co-directors were
aware of the fact that I denied that the respondent is
indebted in
the amount claimed by the Applicant. As stated above, I was informed
that I would not be permitted to leave the premises
of the Applicant
until such time as I had signed the acknowledgement of debt. After I
signed the required document I was allowed
to leave."
[18]
This version of events is denied by the applicant. Timana's version
flies in the face of his subsequent conduct. On 13 August
2012, after
the alleged duress exerted on him by his co-directors, Timana sends
the following e-mail to Maritz of the applicant:
"Dear
Maritz,
Trust
this email finds you well.
The
outstanding amount sterms from the Credit from PetroSA and
Lagerskraal.
I
have taken full responsibility on both amounts due to the following
reasons,
PetreoSA,
is my account, this amount is in no way to my company's benefit but
LSP Group, I'm identifying a forensic auditor to get
to the bottom of
this. You saw/ my email which have been ignored thus far Lagerskraal.
is my client and you paid the money to PetroSA
based on my
commitment. I have copied you in all my correspondence with them.
This is my baby and I'm working hard to get the money
back to you. It
will definitely not be later than End August, the full amount will be
settled."
LEGAL
PRINCIPLES
[46]
In terms of section 344 (f) of the 1973 Act, a company may be wound
up by the Court if the company is unable to pay its debts
as defined
in section 345.
[47]
Section 345 (1)(c) of the 1973 Act, provides that a company is deemed
to be unable to pay its debts if it is proved to the
satisfaction of
the Court that the company is unable to pay its debts. One of the
manners in which a creditor may proof that a
company is unable to pay
its debts, is:
"Evidence
that a company has failed on demand to pay a debt payment of which is
due is cogent prima facie proof of inability
to pay its debts: "for
a concern which is not in financial difficulties ought to be able to
pay its way from current revenue
of readily available resources”
(Rosenbach & Co (Pty) Ltd v' Singh's Bazaars (Pty) Ltd
1964 (4)
SA 593
(D)at 597 per Caney J). [Henochsberg on the
Companies Act 71
Of 2008
, Vol 2 at APPI-55]
[48]
In view of the dispute on the papers, it is necessary to determine
whether the applicant has succeeded in proving that the
respondent is
unable to pay its debts.
[49]
The test to be applied in an opposed application for the provisional
winding-up of a company, was set out in Kalil v Decorex
(Pty) Ltd and
Another
1988 (1) SA 943
AD at 979B, as follows:
"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.........................................................................
"
[50]
The factual dispute, the respondent attempted to create in its
answering affidavit, do not impress me. Timana's conduct subsequent
to the signing of the Acknowledgement of Debt is in total
contradiction to the facts underlying his duress defence.
[51]
Furthermore, the facts underlying the respondent's indebtedness to
the applicant, which indebtedness culminated in the signing
of the
Acknowledgement of Debt, is for all intends and purposes, common
cause between the parties.
[52]
On all the evidence before me, I am satisfied that the applicant has
made out a prima facie case that the respondent is unable
to pay its
debts.
ORDER:
1.
The application to intervene is dismissed with costs.
2.
The respondent company is hereby placed under provisional winding -
up.
3.
A rule nisi is issued calling upon persons who have a legitimate
interest to appear on the 21st October 2013 and show cause why
this
Court should not order that:
3.1.
The respondent company be finally wound up,
3.2.
The costs in the application are to be costs in the winding - up.
4.
That a copy of this order be:
4.1.
Served by the sheriff on the respondent company at its registered
office,
4.2.
Published in one edition each of the “Die Beeld” and “The
Citizen”
newspapers,
4.3.
Served by way of prepaid registered mail to all the known creditors
of the
respondent
above R25 000,00,
4.4.
Served by the Sheriff on the South African Revenue Service,
4.5.
Served on the respondent’s employees by affixing a copy thereof
on the
notice
board in which the respondent’s employees have access or inside
the respondents principle place of business, and
4.6.
Served on all known Trade Unions to which the respondent’s
employees
belong
JaVise
van Nieuwenhtilzen Acting Judge of the North Gauteng High Court,
South Africa
Representation
for the Plaintiff/Respondent
Attorney:
Mr Voyi
Instructed
by: Ndumiso Voyi Incorporated Attorneys for the Respondent c/o
Jacobus Attorneys 1st Floor
Building
No. 347
Cnr
Hilda en Arcadia Streets
Pretoria
Representation
for the Defendant/ Applicant
Counsel:
Adv. Joubert
Instructed:
Honey Attorneys
Attorneys
for the Applicant c/o 93 Njala & Elefant Road Monument Park
Pretoria
Representation
for Intervening Party
Counsel:
Adv. Snyman
Instructed:
Mothobi Attorneys
c/o
Mathye Attorneys