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[2008] ZAWCHC 127
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Careline Products (Pty) Ltd v Goal Post Investments 1 (Pty) Ltd (3357/2008 & 4149/2008) [2008] ZAWCHC 127 (1 January 2008)
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL
DIVISION)
CASE
NO
:
3357/2008
& 4149/2008
In
the application of:
ABSA
BANK LIMITED
4
th
Intervening Creditor
In
the matter between:
CARELINE
PRODUCTS (PTY) LIMITED
Applicant
and
GOAL-POST
INVESTMENTS 1 (PTY) LTD
Respondent
THE
TRUSTEES FOR THE TIME BEING OF THE KENYON
FAMILY
TRUST
1
st
Intervening Creditor
MARK
ANDREW KENYON
2
nd
Intervening Creditor
FUTURE
INDEFINITE
INVESTMENTS
140 (PTY) LTD
3
rd
Intervening Creditor
JUDGMENT
LOUW.
J
:
[1]
These are three inter-related matters which I heard yesterday
afternoon in the fast Jane of the motion court. I have prepared
a
short judgment which I will now read.
[2]
There are two applications. The first is the application by Careline
Products (Pty) Ltd under case number 3357/2008 wherein
the applicant
seeks the provisional winding up of the company Goal-Post
Investments 1 (Pty) Ltd (to which I shall refer as "Goal-Post").
Goal-Post is the owner of nine erven in the central business
district of Cape Town which has variously been valued at amounts
between R60 minion and R80 million.
[3]
The second application is an application by Absa Bank under case
number 4149/2008 wherein the bank seeks, first to intervene
as a
creditor in the Careline application and then seeks an order for the
provisional winding up Goal-Post of its own accord.
Three creditors
have come forward to intervene and oppose the Careline application.
They dispute the
locus
standi
of
CareEine to apply as a creditor for the winding up of Goal-Post.
[4]
It appears from the application to intervene and the papers in
another pending application before this Court under case number
2271/2008, that the members and controlling entities of Goal-Post
who are the parties in that application, are embroiled in a
bitter
dispute regarding the question to whom and at what price the
properties owned by Goal-Post should be sold. The one faction
supports the sale of the properties to a company controlled by one
Bunch, for R48 million, while the others claim to have an
offer from
a buyer, one Cohen, for R60 million. This dispute is, amongst
others, the subject of the application under case number
2271/2008
and of an envisaged action. Pending the outcome of those
proceedings, the transfer of the properties pursuant to the
Bunch
sale for R48 million have in effect be stayed. It is in this context
that Absa Bank applied on 7 March 2008 to intervene
yesterday as the
major creditor of Goal-Post in the Careline application and to seek
the winding up of Goal-Post.
[5]
Mr
Berqh
.
who appeared on behalf of the intervening creditors in the Careline
application, sought a postponement of both the Careline
and ABSA
Bank applications to allow the intervening creditors in CareEine to
file papers to oppose Absa Bank's application to
intervene and wind
up Goal-Post, ft is common cause that Goal-Post owes Absa some R35
million plus interest on mortgage loans
and bank overdrafts. These
amounts, it is common cause, are due and payable.
[6]
The Absa case is set out in the launching affidavit. It is brought
under section 346(1)(b) read with sections 345 and 344(f)
of the
Companies Act on the basis that Goal-Post is unable to pay its debts
and is commercially insolvent. The case is set out
as follows by the
deponent, a bank official:
"The
shareholders and corporate controllers of the respondent are locked
in various legal battles and they have been unable
to resolve their
disputes. Absa, being respondent's major creditor, is not prepared
to sit back and wait for these disputes to
be determined whilst it
is not being paid the monthly instalments to which it is entitled.
The transfer of respondent's immovable
properties have been stayed
due to the inability of the shareholders and corporate controllers
to arrive at an agreement in this
regard.
It
is submitted that under the circumstances the only practical
soEution is for an independent liquidator to be appointed to take
charge of the assets and affairs of the respondent to the advantage
of the general body of creditors". It is further stated
at
paragraph 11 that:
"Absa
has no desire to become embroiled in the dispute between the
applicant and first to third intervening creditors. The
dispute
cfearEy illustrates that there Is an irretrievable breakdown of the
relationship between the parties. There is no reason
why external
creditors should be prejudiced by these disputes. Respondent's
assets should, with respect, be liquidated and external
creditors
paid where after the various parties would be at tiberty to litigate
to their hearts' content at their expense and
cost for as long as
they see fit. Respondent is a property-owning company and developer,
has no source of income and Is reliant
on external funding.
I
respectfully submit that respondent is currently commercially
insolvent and unable to pay its debts in the normal course of
business".
[7]
These allegations are not disputed. I asked Mr
Bergh
to indicate what defences to the Absa case will be raised in the
papers should the intervening creditors be granted a postponement.
He mentioned two; first the Absa application is fatally defective
for failure to file and serve the Master's report and certificate
of
security together with the application. There is nothing in this
point. The position has been made clear insofar as this Division
is
concerned in the case
First
National Bank v E U Civils
(Ptv)
Ltd
1996(1) SA 924 (C) at 931D-F where the decision of the then
Appellate Division in
(Court
v Standard Bank SA Ltd
1995(3) SA 123 (A) at 130H-131G was applied to section 346(3) of the
Companies Act. In this case the bond of security and the
Master's
reports certifying that security had been found accompanied the
notice of set-down of the Absa application. The ABSA
Bank
application is therefore procedurally in order.
[8]
The second point raised was that the Court has a discretion under
section 346 read with section 344(f) not to wind up a company
which
is not in fact insolvent and that the intervening creditors wish to
consider their position and to put facts before the
Court to show
why the Court should refuse to exercise its discretion to wind up.
What these facts could be I was not told.
[9]
An application for a postponement is an indulgence which is sought
by the party and that party must show good cause. Here
this has not
been done. The intervening creditors were not taken by surprise. The
papers in the ABSA Bank application were served
on them on 6 March
2008. They have not filed a notice of opposition nor have they filed
any affidavits setting out their position.
In any event, Absa's case
is, in my view, unassailable.
Berman,
J
in
Absa
Bank v Rheebokskloof (Pty) Ltd & Others
1993(4) SA 436 (C) at 440F-441A sets out the
LOUW,
J