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[2012] ZAKZPHC 44
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Green v Amalgamated Brokers CC (7806/2011) [2012] ZAKZPHC 44 (26 June 2012)
IN
THE HIGH COURT OF SOUTH AFRICA, PIETERMARITZBURG
REPUBLIC
OF SOUTH AFRICA
7806/2011
In
the matter between:
ANTHONY
PAUL GREEN
…..........................................................
APPLICANT
v
AMALGAMATED
BROKERS CC
Registration
No.:
….................................................................
RESPONDENT
JUDGMENT
Date of hearing: 15 June
2012
Date of judgment: 26
June 2012
D.
PILLAY J
[1]
In this application for the provisional liquidation of the
respondent, the first issue in dispute is whether the applicant,
now
deceased and represented by his executors, caused a demand for
payment to be served in compliance with s 345(1)(a)(i) or (ii)
of the
Companies Act 61 of 1973 (CA) read with section 69 of the Closed
Corporations Act 69 of 1984 (CCA). The respondent contends
that the
letter of demand was never delivered at the respondent’s
registered office in strict compliance with the requirement
of the CA
or the CCA. As such compliance is a jurisdictional prerequisite, the
application should be dismissed.
[2]
The applicant contends that the letter of demand was sent by
registered mail to the respondent and before it could be delivered
a
member of the respondent collected the letter from the post office.
Mr Harrison for the respondent referred the court to two
lower court
decisions
1
in
support of his submission that the CA and the CCA required strict
compliance. At the end of his argument he also handed up a
recent
judgment of Ndlovu J of this division in
Mouritzen
v Greystone Enterprises (Pty) Ltd and Other
case
number 10442/2011 (unreported)
2
in
which he presented a similar argument. In that case the learned judge
predictably preferred the views of the Appellate Division
in
Odendaalsrus
Municipality v Odendaalsrus Gold, General Investments and Extensions
Ltd
1959
(1) SA 374
(A) at 380B-D in which the AD accepts that there was
sufficient compliance with the requirement of service if the
respondent received
the letter of demand no matter how it was
delivered. Importantly, the notice must reach the person concerned
and must effectually
convey to him or her the information that needs
to be conveyed.
3
I
agree with Ndlovu J that to insist on strict compliance when the
respondent received the letter of demand would be preferring
form
over substance.
[3]
As to whether the respondent received the letter of demand, the
respondent does not deny receiving it. Furthermore, the applicants
adduced evidence in the replying affidavit attaching confirmation
from the post office that the registered mail was collected by
a
person whose signature is identical to that of Brenda de Wet who
signed the respondent’s letters dated 8 October 2009 and
10
November 2009 (Annexures “E” and “F” to the
answering affidavit). In any event, the identity number
of the
recipient of the registered mail is also recorded on the registered
slip which the respondent could easily have checked
if it disputed
receipt of the letter of demand.
[4]
The significance of the service of the letter of demand in this case
is that it is a ground on which the applicant relies to
prove that
the respondent is unable to pay its debts. Section 345(1) (a)(ii)
provides:
‘
A
company or body corporate shall be deemed to be unable to pay its
debt if:
In
the case of any body corporate not incorporated under this act has
served such demand by leaving it at its main office or delivering
it
to the secretary or some director, manager or principal officer of
such body corporate or in such other manner as the court
may direct,
and a company or body corporate has for three weeks thereafter
neglected to pay the sums, or to secure or compound
for it to the
reasonable satisfaction of the creditor.’
The
respondent has not paid the debt demanded in the letter. This fact,
coupled with my finding above that the letter of demand
was served
fulfils the requirements for deeming the respondent to be unable to
pay its debt in terms of s 345(1)(a)(ii).
[5]
The applicant also relies on the minutes of various meetings as proof
that the respondent acknowledged its indebtedness. I cannot
rely on
such minutes because they are brief notes of what each speaker said
and not a verbatim transcription. Furthermore, the
respondent
disputes the accuracy of the minutes. Besides, in the nature of
evidence in the form of minutes, they usually require
explanation to
clarify what the text actually means in the context. Such explanation
is not adequate on the papers before me; it
probably requires
ventilation through oral evidence.
[6]
The next question is whether the respondent is indebted to the
applicants. The transaction giving rise to this claim stems from
a
request by the deceased to the respondent to procure a motor grader.
The respondent sourced the grader from Canada. After receiving
an
invoice from Ontario on 23 August 2009 for $118 000, it invoiced the
applicant for 50% of the purchase price, in the amount
of R524
400.00, including VAT of R64 400 on 31 August 2009. The deceased paid
the respondent on 2 September 2009. The respondent
applied for
foreign exchange through Standard Bank on 15 September 2009. The
respondent paid the supplier US$59 000.00. The applicant
contends
that this transaction amounted to a purchase and sale between the
deceased and the respondent; the respondent contends
that it merely
acted as the deceased’s agent.
Factors
that support a finding that the transaction was a purchase and sale
include the following:
(a)
The seller invoiced the respondent not the applicant.
(b)
The dock receipt was issued to the respondent.
(c)
The respondent was the co-signee.
(d)
The respondent paid the purchase price to the purported supplier of
the grader.
(e)
The respondent undertook to pay the balance when it received a signed
bill of lading from the supplier.
(f)
The respondent levied VAT on the purchase price in addition to
commission.
[8]
Factors the respondent relies on as proof it was the applicant’s
agent are:
(a)
The applicant was a ‘customer’ of the respondent.
(b)
The respondent did ‘not hold stock but buys and sells used
plant, used equipment and parts as and when required’
or
‘source and sell specific parts as and when required’.
(c)
Prior to the transaction in issue the respondent sold a Hyundai 210
excavator for the applicant and received a commission as
broker.
(b)
The applicant pre-paid 50% of the grader in advance.
[9]
The Hyundai transaction was an agency with the deceased being the
seller and the third party the buyer. Weighing all the factors
together the dominant nature of this transaction was a purchase and
sale of the grader. On the respondent’s own version,
it ‘buys
and sells’ or ‘source(s) and sell(s) plant, etc. Another
decisive factor is that the respondent could
not levy VAT unless he
was a vendor. Although the respondent describes the money he would
have received from the transaction as
a commission, it is its
remuneration irrespective of whether it is called a commission or
profit. Similarly, referring to the applicant
as a customer of the
respondent is no indication as to whether the transaction was one of
agency or purchase and sale. The only
buyer the foreign seller would
have known was the respondent. The law pertaining to the passing of
risk in an international sale
of goods transaction would apply
between the respondent and the foreign seller.
[10]
Irrespective of whether the relationship was as buyer and seller or
principal and agent, the respondent had another arrow to
its bow. The
respondent paid the money it received from the applicant to
Mediterranean Chartered Shipping Company (MCSC) which
masqueraded as
Mediterranean Shipping Company (MSC). Did it act negligently in
paying MSCS instead of MSC?
[11]
The respondent alleges that the applicant refused to transact by
means of a letter of credit because there would have been
an
additional cost of R85 000.00. The applicant denies this. In the
respondent’s letter to Standard Bank the respondent records
that the sellers or their agents were not interested in a letter of
credit and the respondent accordingly agreed to pay 50% of
the
purchase price via Standard Bank, the balance to be paid on receiving
a signed bill of lading from the suppliers. The decision
to dispense
with a letter of credit therefore was the respondent’s.
Furthermore, the respondent paid against the invoice
only without
waiting until it received a track shipping report confirming that the
consignment had arrived at the terminal, dock
receipt and bill of
lading from the seller. In those circumstances the respondent was
negligent. He failed to exercise reasonable
care in effecting an
electronic transnational transaction.
[12]
This is an application for the provisional liquidation of the
respondent. In determining whether a company is unable to pay
its
debt the court shall take into account the contingent and prospective
liabilities of the company.
4
If,
following the liquidator’s investigation it transpires the
respondent is able to pay its debts, then the respondent can
avoid
confirmation of this rule
nisi
.
[12]
In the circumstances I grant an order in terms of 1, 2 and 3 with the
return date being ?? HEIDI COMPLETE PLEASE
ALSO
CHEK PARAGRAPHING, ETC APPEARANCE PAGE ETC
1
Phase
Electric Company (Pty) Ltd v Zinman’s Sales (Pty) Ltd
1973 (3) SA 914
(W);
Afric
Oil v Ramadaan Investment CC
2004 (1)
SA 35
(N)
2
At
para 25-33
3
Mouritzen
para 25;
Odendaalsrus
Municipality
para 380B-D*
4
s
345 of the CA