About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2011
>>
[2011] ZAFSHC 216
|
|
HBT Construction and Plant Hire CC v Uniplant Hire CC (5083/2011) [2011] ZAFSHC 216 (1 December 2011)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
DATE
: 1 DECEMBER 2011
CASE
NO.: 5083/2011
In
the matter between.
HBT
CONSTRUCTION AND
PLANT
HIRE CC Applicant
and
UNIPLANT
HIRE CC Respondent
JUDGMENT
ZIETSMAN.
A J
:
[
1
]
This
is an application on an urgent basis for the liquidation of the
respondent close corporation, on the basis, that the respondent
is
unable to pay its debts.
[
2
]
Before
the facts of the matter are to be considered, it is necessary to
evaluate the provisions of the new Companies Act, Act
71 of 2008,
and the interrelation with the Close Corporations Act, Act 69 of
1984.
[3]
It
is firstly interesting to note that although the chapter dealing
with liquidation of a company, to wit chapter 14 of Act 61
of 1975,
is still to be applied in respect of winding up of companies under
the 2008 Act in accordance with item 9 of Schedule
5 of Act 71 of
2008, it is made subject amongst others to sub-items 2 and 3 of item
9(1).
[4]
The
relevant part of the aforementioned sub-items is subitem 2
which states as follows:
“
Despite
sub-item 1 Sections 343, 344, 346 and 348 to 353 do not apply to the
winding-up of a solvent company except to the extent
necessary to
give full effect to the provisions of Part G of chapter 2.”
The
last mentioned Part G of chapter 2 in terms of the 2008 Act.
[5]
With
reference to Part G in the present matter, Section 81(1)(c) will be
the relevant section. The last mentioned section entails
that a
court may order a solvent company to be wound up if one or more of
the company’s creditors have applied to the court
for a
winding up order on the grounds that a business rescue have ended as
contemplated by Section 1 32(2)(b) / 132(2)(b) or
(c)(i) and it
appears to the court that it is just and equitable in the
circumstances for the company to be wound up, or it is
otherwise
just and equitable for the company to be wound up.
[
6
]
The
effect of the aforegoing as far as companies are concerned is
therefore in my view as follows:
(i)
Although Section 345 of Act 61 of 1973 is still in place as far as a
solvent or insolvent company is concerned, Section 344
only applies
in the case of an insolvent company.
(ii)
In order to liquidate an applicant should therefore after the 2008
Act came into operation, prove that the company is also
insolvent
notwithstanding for instance the deeming provisions of inability to
pay its debtors as contemplated in Section 345
of Act 61 of 1973.
(iii)
The reason for the aforegoing is that Section 344 of Act 61 of 1973
was the section which provided for the grounds on which
a company
could be wound up.
(iv)
Whereas Section 344 of Act 61 of 1973 now only apply in cases of
insolvent companies, such grounds for liquidation as taken
up in
Section 344 are not available in cases of solvent companies.
(v)
The only grounds for liquidation of a soivent company are those as
provided for in Part G of chapter 2.
(vi)
When a creditor of a company therefore applies fcr liquidation, the
only grounds for liquidation of a solvent company will
be those
referred to in Section 81(1)(c) of Act 71 of 2008.
(vii)
In summary thus the grounds on which a court can grant a liquidation
order will be different depending on whether a company
is solvent or
insolvent.
(viii)
The only mutual ground on which a court can grant a liquidation
order presently is the ground that it is just and equitable
to do
so.
[7]
If
therefore the applicant cannot prove just and equity in an
application for winding up, it shall be imperative for such an
applicant to prove insolvency of the company before the whole
chapter 14 of the 1973 Act will be applicable.
[
8
]
In
the instant matter the respondent is a close corporation and not a
company. However, and in my view, the same principle will
apply
because of the fact that Section 68 of the Close Corporation Act was
repealed by item 7(3) of
Schedule
3 of Act 71 of 2008 and Section 66 of the Close Corporation Act, 69
of 1984, is amended to have the same effect on a
close corporation
as if a company with reference to item 9 of Schedule 7 of Act 71 of
2008.
[9]
It
is also necessary to mention that the words used by the legislature
in Section 81 of Act 71 of 2008, namely “just and
equitable”
is the same as used in Section 344(h) of Act 61 of 1973. Therefore
it must be interpreted in the same way
in which “just and
equitable” was interpreted by our courts through the years.
It is still not a
numerus
clauses
although the new Act now makes more specific mention and reference
to the deadlock situation.
The
aforementioned interpretation also in the light of the
legislature’s intention to emphasize rescue rather than
liquidation.
[
10
]
In
the instant matter the applicant relies on the inability of the
respondent to pay its debts and more specifically the applicant’s
debt as contemplated in Section 68 read with Section 69 of Act 69 of
1984.
[113
As
far as just and equitable is concerned, the mere say- so in
paragraph 13 of the founding affidavit with reference to the history
of the matter, takes the matter no further. The history, according
to the applicant, is that the respondent now for more than
three
years promise and/or negotiate with the applicant to effect payment
of the outstanding amount invoiced by the applicant.
[
12
]
It
must therefore be borne in mind that Section 68 of Act 69 of 1984
has been repealed and that the applicant can therefore only
succeed
if there is proof that the respondent is insolvent or that it is
just and equitable that the respondent be liquidated.
[13]
No
proof of any nature was tendered by the applicant that the
respondent is insolvent which has the effect that it must be taken
that the respondent is indeed still solvent. If solvent, Section 68
is no longer available to the applicant.
[14]
The
only possibility is the ground of just and equitable. The fact that
a close corporation is not paying anyone of its creditors
is not a
ground as being a catch-all ground under just and equitable. It is
rather a special ground under which the way in which
a company is
being run or conducted plays a role. (See
Rand
Air (Pty) Ltd v Ray Bester Investments (Pty) Ltd
1
985 (2) SA 345
(W)).
[15]
In
this instance the mere fact that the respondent is not paying the
applicant’s debt and made promises and/or settlement
proposals
since 2009 (as averred by applicant) is not a ground which makes it
just and equitable to liquidate the respondent.
[16]
Even
if I am wrong with the interpretation of the
Companies Act, 71 of
2008
, read with Act 69 of 1984, and even if it is accepted that the
applicant need not prove insolvency in the present matter, it is
clear from the evidence tendered in this matter that
(i)
The indebtedness relied on being R552 253,90 emanates from a
statement of account 86 to the founding papers in which the last
invoice referred to is dated 16 January 2008.
(ii)
When a point
in
limine
as to prescription is taken in the opposing papers, the applicant
contrary to its own case in the founding papers, replied thereto
as
follows:
“
Suffice
to indicate that seeing that the
quantum
in this matter cannot be ascertained without the cooperation of the
respondent, this matter is not subject to prescription.”
(iii)
The aforementioned must be seen in the light of the respondent’s
opposing papers wherein the indebtedness is disputed
on the basis
that a verification of the hours of the leased equipment should have
taken place on the basis that the number of
hours of each vehicle
utilised should have been recorded on a worksheet and signed and
countersigned by the applicant’s
employee and the respondent’s
foreman. Thereafter the project manager would verify the hours. A
dispute arose which until
date could not be solved.
(iv)
It is thus clear that the applicant is blowing hot and cold at the
same time. It is in any event quite clear that prescription
is a
bona
fide
and arguable defence in this matter which should not be decided on
the papers.
(v)
It is also necessary to refer to the fact that the deeming
provisions of inability to pay in Section 69(1)(a) of Act 69 of
1984
probably did not come into play in this matter as the letter of
demand was posted to the registered address of the respondent
on 7
September 2009 and no proof exists as to when and if this letter was
ever received by the respondent. How would the 21 days
be calculated
and even if it can be guessed, why did the applicant not proceed
with any legal proceedings since September 2009?
[17]
In
the matter of
Kalil
v Decotex (Pty) Ltd & Another
1988 (1) SA 943
A.D. at 980B-D, the Supreme Court of Appeal
confirmed the
Badenhorst
rule that a respondent only have to show on a balance of
probabilities that its indebtedness to the applicant is disputed on
bona
fide
and reasonable grounds.
[18]
In
my view the respondent did just that and that the application can
therefore not succeed.
[19]
Although
I also have serious doubts as to the urgency of this application
with reference to the grounds thereof, I make no finding
in this
regard.
[
20
]
The
application on the aforementioned premises is
DISMISSED
WITH COSTS
.
COURT
ADJOURNS
OORSKRYFSTERSERTIFIKAAT
Ek,
die ondergetekende, sertifiseer hiermee dat in soverre dit hoorbaar
js, die voorafgaande 'n ware en juiste transkripsie van
die oorkonde
is van die oorspronklike verrigtinge wat deur middel van 'n
meganiese opvangtoetel opge- neem is in die saak van:
TRANSCRIBER'S
CERTIFICATE
I,
the undersigned, hereby certify that
insofar as it is audible
,
the aforegoing is a true and correct transcription of the
proceedings recorded by means of a mechanical recorder in the matter
of:
HBT
CONSTRUCTION
and UNIPLANT
HIRE CC
DATE
: 1 DECEMBER 2011
CASE
NO.: 5083/2011
FILING
NO.:
DECEMBER
2011
OORSKRYFSTER/TRANSCRIBER
:
(MEV. MRS)L DE VILLIER
KRINO
TRANSKRIPSIEDIENSTE BK
K
RINO
TRANSCRIPTION SERVICES