About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2008
>>
[2008] ZAWCHC 147
|
|
Gideon Albert de Swardt t/a De Swardt Vervoer and Another v Ballprop 33 (Pty) Ltd (12677/2007) [2008] ZAWCHC 147 (25 February 2008)
JUDGMENT
IN
THE HIGH COURT OF SOUTH AFRICA
(
CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE
NO
:
12677/2007
DATE
:
25
FEBRUARY 2008
In
the matter between:
GIDEON
ALBERT DE SWARDT
t/a
DE SWARDT VERVOER 1
st
Applicant
HUBERT
ALEXANDER BLAESER
t/a
TAMSUI PLANT HIRE 2
nd
Applicant
and
BALLPROP
33 (PTY) LTD
Respondent
JUDGMENT
DAVIS,
J
:
1]
This is an application by first and second applicants for the
winding up of respondent. In order to succeed, applicants are
required to show the following requirements for a winding up order:
1.
Applicants have a right in terms of section 346 of the Companies Act
61 of 1973 ("the Companies Act") to apply for
the winding
up of respondent on the basis that they are creditors of respondent.
2.
There exists a ground for the winding up of respondent as
contemplated in section 344 of the Companies Act. The grounds,
inter
alia,
which
are set out in that section include:
(i)
The
company is unable to pay its debts as in turn defined in section 345
of the Companies Act;
(ii)
it
appears to the Court that it is just and equitable that the company
should be wound up".
Section
345 of the Companies Act contains certain deeming requirements on
the proof of one or more of which the company is deemed
to be unable
to pay its debts,
inter
alia,
these
deeming provisions include the following:
The
creditor to whom the company is indebted in a sum of not less than
R100 then due has served on the company be leaving the
same at its
registered office a demand requiring the company to pay the sum so
due and the company for three weeks thereafter
neglected to pay
that sum or to secure or compound it to the reasonable satisfaction
of the creditor.
It
has proved to the satisfaction of the court that the company is
unable to pay its debts.
[2]
In the founding affidavit, first applicant makes out his case
thus:
"The
respondent, represented by Mr Omar Fortune, telephonically contacted
me and requested my business services as he required
vehicles to be
utilised at the Nature's Valley, Plettenberg Bay project, which
project he was appointed as subcontractor
to Murray &
Roberts. I accepted his invitation and at the specific order and
request of a Mr Michael Alexander, as representative
of the
Respondent and acting as site manager, the services as and when
required were rendered, which orders are reflected and
hereinafter
referred to in invoices and delivery notes. I attach hereto marked
"GAD2" a summary of 12 outstanding invoices
in respect of
the aforementioned hiring of construction vehicles by myself to
respondent totalling an amount of R250192,95. I
also attach hereto
marked "GAD3(A)-GAD3(L)" each and every one of the 12
invoices and each and every delivery note
pertaining to invoice.
Initially
all the delivery notes were issued and addressed to Murray &
Roberts as I was led to believe by Mr Fortune that
my business
services would be rendered to them but after several enquiries to Mr
Michael Alexander, the site manager, I was informed
that the
delivery note should be addressed to the respondent company. During
approximately the same period, second applicant
also hired a number
of construction vehicles to respondent in terms of oral agreements
of lease entered into between second applicant
and respondent duly
represented by Mr Omar Fortune. The second applicant was also
telephonically contacted and invited to render
certain services with
his heavy duty vehicles for the Nature's Valley, Plettenberg Bay
project, which orders were authorised
by Messrs Fortune and
Alexander as representatives of the respondent company. I attach
hereto marked "GAD4(A)" and
"GAD4(B)" two
invoices in respect of the aforementioned hiring of construction
vehicles by second applicant to respondent
totalling an amount of
R182 127,82.
From
approximately January 2007, Wilma Rademan, my accounting officer,
forwarded various requests for payment and requests for
Mr Omar
Fortune to contact her, to the Respondent copies, of which are
attached hereto marked "GAD6(A)
n
to "GAD6(H)".
To
date no response was received, neither telephonically nor in
writing".
[3]
Mr
Engela
,
who appeared on behalf of the applicants submitted, that the
explanation provided by respondent as to why these amounts had
not
been paid did not in his view constituted a
bona
fide
dispute
against first applicant's claim. The explanation was contained in
the opposing affidavit in which respondent stated:
"Respondent
never accepted liability for the full amount of R250 192,95 but
intended to offer in full and final settlement
R148 016,74...the
balance of the account, R102 176,21 is thus and at all material
times disputed".
Respondent
then goes on to say the following: it never accepted liability for
the full amount of R250 192, 95 but intended to
offer in full and
final settlement the sum of R148 016, 74. That sum, in respondent's
view, was paid as follows:
25
October 2006 - R49 016,74
7
December 2006 - R99 000,00
It
is clear that first respondent does admit to having received an
amount of R148 016,74. Mr
Swanepoel
.
who appeared on behalf of first respondent, noted that for the first
time in reply, applicant stated that such payment
"was
allocated by my accountant to a number of earlier invoices that were
issued to Respondent, copies of which, along with
their delivery
notes, are attached hereto..."
[4]
Further, Mr
Swanepoel
submitted that, if an assessment of these annexures was undertaken,
there were no delivery notes substantiating the amounts reflected
on
the invoices forming part of Annexures GAD19(A) and GAD19(B). The
delivery notes purporting to substantiate the invoice forming
part
of Annexure GAD 19(6) are questionable for,
inter
alia,
in
Mr
SwanepoeTs
view the following reasons:
1. Delivery
note 2143 was made out to Murray & Roberts but subsequently
seemed to be deleted. The contact person is one Norman
who has no
connection with the respondent.
2. Delivery
notes 2311, 2057, 2145, 2313, 2315, 2059
r
2147, 2316, 2148, 2060, 2317, 2149, 2150 and 2061 were all made out
to Murray & Roberts and again one Norman is the name
which
appears as the contact person who has no connection with respondent.
3. Delivery
note 2318 was initially made out to Murray & Roberts and
thereafter changed to Ballprop. Once more the contact
person is one
Norman.
4.
All delivery notes supporting Invoice number 0766 (Annexure
GAD19(D)) were made out to respondent. However, the contact person
is one Rihaan who has no connection with respondent. Accordingly, in
Mr
Swanepoet's
view,
respondent could justifiably question these notes as forming the
very basis of invoice number 0766.
[5]
So much for background to the first applicant's claim. There is,
however, also a claim by second applicant. This is a curious
adoption of process in that the claim is set out in the founding
affidavit by first applicant without any clear indication as
to the
relationship between first applicant and second applicant. Second
applicant does confirm the contents of the founding
affidavit but
only for the first time sets out a detailed basis of his case
personally in a replying affidavit.
[6]
It appears, however, that second applicant's claim amounts to the
following: Second applicant's invoices totaling an amount
of R182
127,82 were attached to the application papers. In these
invoices, the registration numbers of the vehicles leased,
as well
as the times worked, were set out in some detail. According to Mr
Engela
,
the claim by second applicant is strengthened by the admission by
respondent that during the period September 2006 to November
2006
certain construction vehicles or equipment was hired from second
applicant. Mr
Engela
also submitted that the claim was strengthened further by the
undisputed evidence that no equipment was hired or services rendered
by second applicant to Murray & Roberts.
[7]
The claims of second applicant were also disputed by respondent. In
the answering affidavit, the various documentation for
the amounts
claimed by second applicant are disputed in some detail, details
which, for reasons which will become apparent, I
do not intend to
traverse in any greater measure of analysis; the reason is that much
of respondent's defence was focused upon
the further requirement of
respondent's inability to pay its debts, both to first and second
applicant. It is this issue which,
in my view,
is
central
to the particular application which was launched.
[8]
As regards respondent's inability to pay its debts, the following
allegations were made in the founding affidavit:
"I
furthermore submit, with respect, that it is clear from the
aforementioned that respondent's liabilities
in all
probability far exceeds its assets. In this regard I wish to confirm
that respondent had to lease the aforementioned
vehicles as
well as equipment as it did not have vehicles and
equipment of its own. Respondent clearly
does not have the
necessary cash on hand or current assets with which to pay its
creditors, more specifically myself and second
applicant.
Respondent is both commercially insolvent in that it is unable to
pay its debts, as well as being actually insolvent
in that its
liabilities exceed its assets".
Mr
Swanepoel
submitted that these allegations were unfounded and extremely
vague. In his view, there was no factual basis to
support these allegations. Respondent, in the answering
affidavit, averred that it was indeed commercially solvent.
The
relevant passage of the answering affidavit reads thus:
"I
wish to state that respondent is a successful entity, commercially
solvent and involved in numerous transactions. At present,
respondent is involved in construction work for the building of
roads in Hexrivier where the contract price is in excess of
R4.2
million which would constitute profits of at least R1.5
million. Not only is respondent involved in numerous contracts,
but
the assets of respondent is worth R500 000 which consists of two
bakkies and six construction trailers, as well as construction
equipment consisting of generators, portable offices, water pumps,
lighting generators which is at present on the sites of Hexrivier,
Vryburg and Rustenberg, as well as normal office equipment.
It
is
common in this industry that companies hire equipment depending on
the needs of the company. The respondent does not buy heavy
trucks
but rents as the maintenance of vehicles does not fall within the
ambit of its work(sic). Respondent does however have
substantial
overdraft facilities available should it be necessary to buy its own
equipment. In addition to the above
r
the respondent is busy with the following contracts: Hexrivier roads
R5 000 000,00; Vryburg road R5 000 000,00; Rustenberg road
R6 000
000,00. Respondent is also concluding a further contract of R160 000
00 for road construction. Profits of these contracts
approximately
30%. Clearly respondent is a strong and viable business entity and
to state without substantiation that respondent
is insolvent does
not take the realities into consideration or even furnish grounds
for an application of this nature".
[9]
In support of his submissions, Mr
Swanepoel
referred to the judgment in
Wiseman
v Uys Table Soccer (Ptv) Ltd
1991(4}
SA (W) 171 at 168 where
Claasen.
AJ
{as he then was) said:
"There
is no allegation of a particular debt which was not paid. Neither
does the applicant state that the applicant is called
upon by any of
its creditors to pay a particular debt and that the respondent
company refused to do so. There is also no evidence
of pending
actions against the respondent which may be detrimental to its state
of insolvency, nor is there any evidence with
regard to any
admissions to creditors that the respondent cannot pay its debts or
any unsatisfied judgment against the respondent".
In this
particular connection, Blackman
et
af:
Commentary
on the Companies Act
state the following:
"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. Something more than a mere admission or allegation
of commercial solvency is needed. A company's
inability to pay its
debts may be proved in any manner; evidence that a company has
failed on demand to pay a debt, the 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 is able to pay its way in current
revenue or
readily available resources..." Something more must be proved
than simply that the company has not paid a debt;
the circumstances
surrounding the non-payment must justify the inference that the
company is unable to pay its debts as they
fall due, e.g. a series
of dishonoured cheques might justify the inference. If part of the
amount claimed or an assertion that
the amount claimed is due and
payable is disputed on substantial grounds, an omission to pay the
total amount claimed will not
give rise to an inference that the
company is unable to pay its debts".
[10]
The fact that a company, as is the case with respondent, resists a
payment is not sufficient ground to justify an application
of this
nature. It is trite law that a winding up application is not a
legitimate means to enforce payment of a debt, a point
made
initially in
Badenhorst
v Northern Construction Enterprises (Ptv) Ltd
1956(2} SA 346 (T) and followed consistently thereafter.
[11]
In short, even if I assume in favour of applicants that (1} there is
no reasonable dispute in respect of either debts to
first and second
applicant; (2) that a case was not made out in reply, particularly
in respect of the quantification of the alleged
debts (in particular
the affidavit by second applicant in reply which, for the first
time, sets out its claim in any detail}
the problem persists as to
the financial health of the respondent. In my view, there has been
no proper case made out that this
is a company which rs unable to
pay its debts.
[12]
Section 345 of the Companies Act does provide deeming provisions
sufficient to justify that conclusion but, as I have already
stated,
the law does not sanction a conclusion on which no factual
evidential basis is raised in order to trigger the deeming
provision
in the first place. Were it to be otherwise, it would mean that
liquidation proceedings would be the only legitimate
means of
enforcing payment.
[13]
In my view, there are a number of reasons why this is an
unsatisfactory application. The initial claims in the
founding affidavit were skeletal at best. Second applicant only came
out of the proverbial woodwork at the stage of reply. Much
of the
dispute as to whether the R148 000 was paid in discharge of the
obligation claimed or indeed, was for some previous amount,
emerges
in reply. There was no satisfactory or clear analysis of the claims
in the founding affidavit where the case must be
made out.
[14]
I should add that an application by the respondent to reply to the
replying affidavit was made. I refused that application
because of
the fact that it appeared to me, after a careful analysis of the
papers, that this application could not pass legal
muster for the
reasons that I have set out. On the existing factual matrix, to make
the assumption that there is no reasonable
dispute that the case was
satisfactorily made out in the founding affidavits, is an assumption
that I am not prepared to make.
[15]
However, it is not necessary to deal with this is one any further,
because this was not a case where a court should exercise
its
discretion in favour of applicant on the basis that respondent is
not in a position to pay its debts.
[16]
For these reasons, the application is dismissed, with costs.
DAVIS, J