About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2009
>>
[2009] ZAGPPHC 143
|
|
Gainsford and Van Wyk NNO v Joubert (37556/08) [2009] ZAGPPHC 143 (13 November 2009)
IN THE HIGH COURT OF SOUTH
AFRICA
(NORTH
GAUTENG
HIGH COURT, PRETORIA)
Date: 2009-11-13
UNREPORTABLE
Case Number:
37556/08
In the matter between:
GAINSFORD, GAVIN
CECIL N.O.
First
Applicant
VAN WYK, ALTA
N.O.
Second
Applicant
and
JOUBERT, DIANNE
MARYLYNNE
Respondent
JUDGMENT
SOUTHWOOD J
[1]
The
applicants, the liquidators of Quantum Communications (Pty) Ltd
(‘Quantum’) (in liquidation), seek an order in terms
of
section 29 of the Insolvency Act, 24 of 1936 (‘the Act’)
–
(1) setting aside the disposition of
R493 169,18 by Quantum to the respondent;
(2) that the
respondent pay to the applicants R493 169,18 together with interest
thereon
a
tempore morae.
[2] On 22 February
2007 Glocell Service Provider Company (Pty) Ltd (‘Glocell’)
launched an application against Quantum
alleging that
it,
Glocell, was a creditor of Quantum, that Quantum owed it R12 442
394,60 and that Quantum was unable to pay its debts. Quantum
delivered a notice of intention to oppose but, later, after failing
to file an answering affidavit, withdrew its opposition to
the
application. On 2 May 2007 the court made an order placing Quantum
under winding-up. The applicants launched this application
on 8
August 2008. The respondent opposes the application and the parties
have filed answering and replying affidavits.
[3] Section 29 of the Act is made
applicable to liquidations of companies by section 340(1) of the
Companies Act, 61 of 1973, which
provides –
‘
Every
disposition by a company of its property which, if made by an
individual, could for any reason, be set aside in the event
of his
insolvency, may, if made by a company, be set aside in the event of
the company being wound up and unable to pay all its
debts, and the
provisions of the law relating to insolvency shall
mutatis
mutandis
be
applied to any such disposition.’
In
Sackstein
NO v Proudfoot SA (Pty) Ltd
2006
(6) SA 358
(SCA)
paras
8 and 9 the court held that the relevant date at which the inability
(to pay all its debts) is to be determined, is the date
when reliance
is placed thereon. In the instant case that date is 8 August 2008.
Accordingly, the applicants must prove that
as at that date Quantum
was unable to pay all its debts.
[4] The relevant part of section 29 of
the Act provides:
‘
(i) Every
disposition of his property made by a debtor not more than six (6)
months before the sequestration of his estate …
which had the
effect of preferring one of his creditors above another, may be set
aside by the Court if immediately after the making
of such
disposition the liabilities of the debtor exceeded the value of his
assets, unless the person in whose favour the disposition
was made
proves that the disposition was made in the ordinary course of
business and it was not intended thereby to prefer one
creditor above
another’
Accordingly, in order to be entitled
to an order in terms of section 29 of the Act, the applicants must
prove that –
(1) Quantum made a disposition of its
property;
(2) to the respondent;
(3) not more than six months before
22 February 2007;
(4) which had the effect of preferring
the respondent above another creditor; and
(5) immediately
after the disposition, Quantum’s liabilities exceeded the value
of its assets – see
Simon
NO v Coetzee
[2007]
2 All SA 110
(T)
at
112:
Van
Zyl and Others NNO v Turner and Another NNO
1998
(2) SA 236
(C)
para
15.
The respondent can then avoid the
order if she can prove that –
(1) the disposition
was made in the ordinary course of business; and
(2) the disposition
was not intended to prefer the respondent above another creditor –
see
Van
Zyl and Others NNO v Turner and Another NNO supra
para
15.
[5] The applicants
seek final relief on notice of motion. Where there are disputes of
fact a final order can be granted only if
the facts averred in the
applicants’ affidavits, which have been admitted by the
respondent, together with the facts alleged
by the respondent,
justify such order. A final order may also be granted where the
respondent’s version must be rejected
on the papers because it
‘consists of bald or uncreditworthy denials, raises fictitious
disputes of fact, is palpably implausible,
far-fetched or so clearly
untenable that the court is justified in rejecting it on the papers’
- see
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A)
at
634E-635C and
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA)
para
26. Although the applicants’ counsel did not request the court
to reject any of the respondent’s evidence in his
heads of
argument, in argument before the court he contends (somewhat faintly)
that some of her evidence should be rejected. He
also suggested that
if there was a dispute of fact which cannot be resolved on the papers
the court should refer the dispute to
oral evidence. The
respondent’s evidence must be considered in the light of all
the evidence and, if not credible for any
of the reasons referred to,
will be rejected. As far as a referral to evidence is concerned, a
dispute of fact was clearly foreseeable
yet the applicants chose to
approach the court on notice of motion. In these circumstances I am
not disposed to refer any issue
for the hearing of oral evidence.
[6] The transaction
alleged to be a disposition took place on 4 October 2006 when a
number of book entries were made in Quantum’s
books of account.
Immediately before the book entries were made the books of account
reflected that RRI Investments (Pty) Ltd
(‘RRI’) owed
Quantum R493 169,18 on loan account and that Quantum owed the
respondent R450 462,27 on loan account.
On 4 October 2006 the
following book entries were made in Quantum’s books of account
in relation to these two loan accounts:
(1) RRI’s loan account was
credited with R493 169,18, thus extinguishing RRI’s
indebtedness in the books;
(2) the respondent’s loan
account was debited with the sum of R493 169,18, which as a result of
set-off, extinguished the
credit balance in favour of the respondent
and left a debit balance of R42 696,91.
[7] These book
entries on 4 October 2006 were made in the following circumstances.
The respondent, who is a businesswoman, was
at all relevant times the
managing director of Quantum. The Stedi Share Trust was the sole
shareholder of Quantum and the trustees
of the trust were the
respondent and one S.P. Joubert. The respondent and her former
partner, Lionel Boshoff, were the shareholders
of RRI. On 11
December 2002 RRI purchased a vacant erf at Mabalingwe Country Club
for R420 000. Quantum paid the purchase price
on behalf of RRI and
to reflect this payment a loan account in the name of RRI was opened
in Quantum’s books of account in
the sum of R420 000.
Thereafter Quantum paid the monthly levies to Mabalingwe on behalf of
RRI and these amounts were debited
to RRI’s loan account. By 4
October 2006 Quantum’s books of account reflected that RRI’s
loan account was in
debit in the sum of R493 169,18. On the same
date, Quantum’s books reflected that the respondent’s
loan account was
in credit in the sum of R450 462,27. This was the
total of unpaid salary owing to the respondent and the capital she
had contributed
to Quantum. On 4 October 2006 the book entries
referred to were made which had the effect that the books no longer
reflected that
RRI owed Quantum R493 169,18 and that Quantum owed the
respondent R450 462,27. The respondent’s loan account now
reflected
that it was in debit in the sum of R42 696,91 (i.e. that
the respondent owed Quantum R42 696,91). It is not in dispute that
the
book entries on 4 October 2006 were made pursuant to a resolution
taken by Quantum’s shareholder on 14 August 2006 but it
is not
known why the book entries were made only on 4 October 2006. The
question which arises is when did the disposition take
place.
[8] On 14 August
2006 Quantum’s shareholder (represented by the respondent and
S.P. Joubert) resolved that the respondent
would take over the RRI
loan. This obviously included the purchase price of R420 000 and the
levies paid in respect of the property.
The total at that stage is
not known. This resolution was passed with the consent of the
respondent, the new debtor, and RRI,
the original debtor represented
by the respondent. Such an agreement is clearly a novation. The
debt of RRI was extinguished
and a new or additional debt, in the
same amount, owing by the respondent to Quantum was created. Since a
novation can be entered
into orally – there are no formalities
– the agreement on 14 August 2006 had the effect of
transferring the obligation
of RRI to the respondent – see
Froman
v Robertson
1971
(1) SA 115
(A)
at
122E-H;
Brenner
v Hart
1913
TPD 607
at
611-612;
Van
Achterburg v Walters
1950
(3) SA 734
(T)
at
745C-F – which immediately resulted in the set-off of the
respondent’s indebtedness to Quantum and Quantum’s
indebtedness to the respondent, leaving the balance of R42 696,91 –
see
Schierhout
v Union Government
1926
AD 286
at
289-90;
Mahomed
v Nagdee
1952
(1) SA 410
(A)
at
416H;
Christie
The
Law of Contract in South Africa
5
ed 476.
It
seems to me that Quantum gave up nothing as a result of the novation
and set-off and it is questionable whether the transaction
is a
disposition as defined in the Act. Nevertheless, it seems clear that
if this was a disposition it took place on 14 August
2006 which is
more than 6 months before Quantum’s liquidation and section 29
cannot apply. That seems to be the end of the
matter.
[9
] The
applicants’ counsel correctly points out that this point was
not raised by the respondent in her answering affidavit
and was
therefore not fully canvassed in the affidavits – see
Van
Rensburg v Van Rensburg en Andere
1963
(1) SA 505
(A)
at
509H-510B;
Cabinet
for the Territory of South West Africa v Chikane
1989
(1) SA 549
(A)
at
360F-G;
Minister
van Wet & Orde v Matshoba
1990
(1) SA 280
(A)
at
285E-F. He also points out that the parties accepted that the
disposition took place on 4 October 2006 when the entries were
made
in the books. While I agree that the issue was not canvassed in the
affidavits it is clear from the evidence given by the
respondent at
the enquiry (on which this application is based) and the resolution
itself that the disposition took place on 14
August 2006 and this
cannot be ignored. Nevertheless I shall consider the other issues as
there was full argument.
[10] To decide
whether section 29 is applicable and whether the requirements of
section 29 are satisfied the financial position
of Quantum at two
stages must be determined. In terms of section 340(1) of the
Companies Act the court must find that when the
applicants launched
this application on 8 August 2008 Quantum was unable to pay all its
debts and in terms of section 29 of the
Act the court must find that
immediately after the disposition on 4 October 2008 Quantum’s
liabilities exceeded the value
of its assets.
[11] The applicants
rely primarily on the fact that Glocell had a well-founded claim
against Quantum for more than R12 million for
services rendered and
that Quantum did not have assets of sufficient value to meet
Glocell’s claim. The respondent disputes
this indebtedness to
Glocell and contends that Glocell in fact owed far more to Quantum at
all relevant times. The respondent
relies heavily on an unreported
judgment of Ebersohn AJ delivered on 10 September 2009 in
GC
Gainsford NO and Alta van Wyk NO v DM and SP Joubert,
North
Gauteng, Case Number 15404/08. In this case the same issue arose and
the learned judge found that the evidence in that case
showed that at
the commencement of the winding-up on 22 February 2007 Glocell owed
far more to Quantum than Quantum owed to Glocell.
The learned judge
seems to have accepted that it had been established that Glocell owed
Quantum R15 million in respect of credits
for what was called ‘call
sponsor fraud’. The respondent has not incorporated into the
present proceedings her evidence
in case number 15404/08 and these
findings are not binding on me.
[12] As far as
Quantum’s
financial position and Glocell’s claim are concerned the
following evidence is not disputed:
(1) On 14 August
2006 Quantum disposed of all its movable assets (i.e. furniture,
fittings, and office and computer equipment) to
another company
controlled by the respondent, Quantum CST (Pty) Ltd at book value.
The evidence indicates that Quantum received
no value for these
assets;
(2) On 20 October 2006 Glocell sent
Quantum a letter of demand in which Glocell alleged that Quantum was
indebted to Glocell in
the sum of R13 015 985,00 which included an
overdue balance of R7 782 928,00. Glocell demanded payment of the
overdue balance
within 7 days;
(3) Quantum failed to pay Glocell the
sum of R7 782 920,00 or any other amount within 7 days or at all;
(4) On 30 October 2006 Glocell sent a
letter to Quantum referring to a meeting held on 27 October 2006 in
connection with the overdue
balance on Quantum’s account and
recorded that the following points had been agreed –
(i) the balance
overdue on Quantum’s account amounted to R7 782 920,00;
(ii) Quantum had
provided Glocell with a series of 33 monthly post-dated cheques of
R100 000 each (amounting to R3 300 000), the
first to be paid on 31
October 2006 and the last to be paid on 30 June 2009;
(iii) an amount of R453 308,57 (VAT
inclusive) had been identified as attributable to fraudulent call
sponsor usage on Quantum’s
lines and that that amount less
commission would be credited to Quantum’s account with Glocell;
(iv) Quantum
contended that there wa
s
further fraudulent call sponsor usage in excess of the amount of R453
308,57 as set out in (iii) above and to accommodate further
investigation Glocell undertook to facilitate an introduction for
Quantum to the Vodacom Fraud Division in order for the matter
to be
resolved by Quantum;
(v) in the event
that Quantum and the Vodacom Fraud Division conclusively proved
further fraudulent usage and Vodacom agreed to
pass credit to Glocell
for the amount proved; Glocell would pass a credit to the Quantum
account for this amount less the commission
deducted from the charges
originally credited to the Quantum account.
(The other points raised in the
letter are not relevant for present purposes);
(5) On 31 October
2006 the respondent sent a letter to Glocell in answer to Glocell’s
letter dated 30 October 2006 in which
the respondent said
inter
alia
–
(i) that for
purposes of these negotiations they had used the figure of R7 789 928
reflected in Glocell’s letter of demand
dated 19 October 2006
but that there were a number of small amounts which could affect that
amount and that these could amount
to approximately R400 000;
(ii) the monthly
cheques would
service the outstanding debt;
(iii) Quantum believed that the total
fraud was closer to R2 million but that this required further
investigation;
(iv) Quantum had previously requested
information from Glocell as to the computation of R453 308,57 but had
not yet received this
information;
(v) Quantum called upon Glocell to
provide this information so that the issue could be resolved;
(6) as at 4 October
2006 Quantum owned an Audi TT Coupe and a Chrysler Grand Voyager;
(7) as at 4 October 2006 Quantum owed
the respondent R450 462,27 on loan account in respect of salary and
capital brought into the
company and had a claim for R493 169,18
against RRI;
(8) on 22 February
2007 Glocell launched a liquidation application against Quantum in
which it alleged that Quantum was indebted
to it in the sum of R12
442 394,67;
(9) Quantum opposed Glocell’s
liquidation application but failed to file an answering affidavit.
Quantum then withdrew its
opposition to Glocell’s application
and on 2 May 2007 Quantum was placed under final winding-up;
(10) On 19 September 2007 Glocell
proved a claim against Quantum in the sum of R14 407 361,32 for
cellular airtime and contracts.
The statement of account attached to
the claim reflects that up to 30 September 2006 the total sales to
Quantum amounted to R16
297 108,88;
(11) On 18 December 2007 the
applicants signed a report to be submitted to the second meeting of
creditors in which they referred
to Glocell’s claim which, when
taken into account, resulted in Quantum’s liabilities exceeding
its assets by R12 490
000;
(12) Attached to
the applicants’ report dated 18 December 2007 was a statement
made by the respondent in terms of section
363(2) and (4) of the
Companies Act setting out Quantum’s assets and liabilities.
The respondent signed the statement under
oath on 2 May 2007 and she
confirms the contents of the annexures to the statement. On
e
contains a list of creditors (including Glocell, for the sum of R12
422 445,77) totalling R12 613 473,87. Another contains a
list of
creditors which total R376 850,00 but does not include Glocell or any
reference to a claim against Glocell for R15 million
or any other
amount.
[13] It is clear
from the evidence that if Glocell had a claim for R12 million against
Quantum from September 2006 to May 2007 Quantum’s
liabilities
substantially exceeded its assets at all times; that it can be
accepted that when the applicants decided to invoke
the provisions of
section 29 Quantum was unable to pay its debts and that when the
disposition took place on 4 October 2006 Quantum’s
liabilities
already exceeded its assets.
[14] Against the
background of the common cause facts set out above the respondent,
without incorporating affidavits filed in the
liquidation application
or the affidavits filed in the reconnection application or the
affidavits filed in case number 15404/08,
purports to convey to the
court the relevant parts of these affidavits. The respondent states
that the agreement referred to in
Glocell’s letter dated 19
October 2006 was not final and relies on her reply dated 31 October
2006 to support this. Significantly
her letter does not challenge
the statement in Glocell’s letter that it had been agreed that
the arrear balance was R7 782
928,00 which may be subject to
adjustment up to R400 000 and that R3 300 000 would be paid in
respect of the arrear balance by
means of the series of cheques. Nor
does the letter challenge the agreement that Glocell would only give
Quantum credits which
were established by Quantum and Vodacom’s
Fraud Division (i.e. in respect of Call Sponsor Fraud that Glocell
would pass a
credit in favour of Quantum only if Quantum and
Vodacom’s Fraud Division conclusively prove further fraudulent
usage and
Vodacom agreed to pass a credit to Glocell for the amount
proved, in which case Glocell would pass a credit to Quantum less the
amount of commission.) The respondent’s statement that no
finality had been reached in respect of the arrear amount is only
true insofar as there would be a possible reduction of the amount not
exceeding R400 000. The letters do not establish that the
whole
amount was disputed, only that R400 000 was disputed. The respondent
goes on to allege, correctly, that in her letter she
had pointed out
the total of the amounts involved in the fraud would be closer to R2
million. She also alleges that it has subsequently
been established
that the total fraud credit approaches the amount of R15 million.
There is no evidence to support this statement
and in the
circumstances already referred to this allegation cannot be accepted
as the truth.
[15] The last requirement for the
applicants to satisfy is that the disposition had the effect of
preferring the respondent above
another creditor. The nature and
effect of the transaction have already been described. This issue
must be considered from the
respondent’s point of view. It is
clear that the respondent was not paid her claim of R450 462,27. In
fact the disposition
had the opposite effect. Instead of the
respondent receiving payment of the amount of the loan account it was
extinguished because
the respondent accepted liability for RRI’s
debt to Quantum which exceeded the amount owing to her. The
application must
therefore fail on this ground as well.
[16] The respondent
has set out fully why the transaction of 14 August 2006 was
concluded. It was part of the dissolution of her
partnership with
Lionel Boshoff and involved the respondent paying approximately R1
million to Boshoff and the respondent taking
over RRI’s loan
account with Quantum. This dissolution and the associated
transactions were effected in the ordinary course
of business. With
regard to the intention to prefer the respondent above another
creditor, again this must be considered from
the respondent’s
point of view. Clearly the respondent was not going to receive
payment because she was accepting liability
for RRI’s debt
which exceeded the amount owed to her by Quantum. The respondent has
therefore satisfied the requirements
to the proviso to section 29 and
is not liable on this ground either.
Order
[17] The
application is dismissed with costs.
_______________________
B.R.
SOUTHWOOD
JUDGE
OF THE HIGH COURT
CASE NO:
37556/08
HEARD
ON: 16 September 2009
FOR
THE APPLICANTS: ADV. J.E. SMIT
INSTRUCTED
BY: Edward Nathan Sonnenberg
FOR
THE RESPONDENT: ADV. N. DAVIS SC
INSTRUCTED
BY: Routledge Modise Attorneys
DATE
OF JUDGMENT: 13 November 2009