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[2008] ZAWCHC 250
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New L1 Partnership v Executive Helicopters (Pty) Ltd (4392/2008) [2008] ZAWCHC 250 (22 August 2008)
JUDGMENT
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION
)
CASE
NUMBER:
3492/2008
DATE:
22
AUGUST 2008
In
the matter between:
THE
NEW L1 PARTNERSHIP
APPLICANT
and
EXECUTIVE
HELICOPTERS (PTY) LTD
RESPONDENT
JUDGMENT
FOURIE.
J
:
Applicant
seeks an order for the provisional winding up of respondent. The
ground on which the application is brought is that
respondent is
unable to pay its debts as provided in Section 344(F), read with
Section 345(1) of the Companies Act 61/1973. The
application is
opposed and there are two main issues that fall to be decided,
namefy, firstly, applicant's l
ocus
standi
and
in particular whether applicant's claim is disputed by respondent on
bona
fide
and
reasonable grounds, and secondly, respondent's alleged inability to
pay its debts.
In
Baden
horst v Northern Construction Enterprises (Ftv) Limited
1956(2) SA 346 T at 347-348, it was held that winding up proceedings
ought not to be resorted to in order by means thereof to
enforce
payment of a debt, the existence of which is
bona
fide
disputed
by the respondent company on reasonable grounds, as the procedure
for winding up is not designed for the resolution of
disputes as to
the existence or non-existence of a debt. This is commonly referred
to as the Badenhorst Rule, which has consistently
been applied in
numerous subsequent cases. See
Henochsberg
on the Companies Act at 694(1) and the authorities there cited.
It
is trite that a respondent in a liquidation application, who
disputes the applicant's claim, is not saddled with a full blown
onus to prove its defence. As held in
Hulse
Reuter v Hag Consulting
1998(2) SA 208 (C) at 221 F to G, all that such a respondent need do
is to
bona
fide
allege
facts which, if proved at the trial, would constitute a good defence
to the claims made against it. A respondent in this
position is not
required to adduce on affidavit, or otherwise, the actual evidence
on which it relies in disputing the applicant's
claim.
By
contrast, a defendant who resists summary judgment, is required to
discJose fully the material facts relied upon for its defence.
See
also
Porterstraat
69 Eiendomme v P A Venter, Worcester
2000(4) SA 598 C at 606 J to D and
Robson
v Wax Works (Ptv) Limited
2001(3) SA 1117 C at 1122 D to G.
In
its papers applicant alleges that respondent is indebted to it in an
amount of at least R584 581,58, which amount is due and
payable.
This indebtedness is said to arise from an agreement in terms of
which respondent chartered a helicopter from applicant.
In its
opposing papers, respondent admits receipt of invoices from
applicant relating to charges levied by applicant, totalling
R1 098
080,44. It is common cause that respondent only made payment of a
total amount of R361 860,44 to applicant.
However,
respondent claims that it rendered services to applicant in respect
of which amounts became due and payable by applicant
to respondent.
In this regard respondent alleges that the parties maintained a
running account which reflected the amounts respectively
due by the
parties to each other. This account was updated from time to time in
terms of which debits and credits between the
parties were set off
against each other. In terms of this account, respondent contends
that the amount of all its claims against
applicant exceeds the
amount of applicant's claim against respondent.
In
response thereto, the applicant has tn reply denied these
allegations of respondent and calls into question the
bona
fides
of
respondent. Applicant says that the lack of
bona
fides
on
the part of respondent is demonstrated by the late raising of this
defence which, according to applicant, is also based on
fictitious
documentation. In view of this dispute of fact on the papers,
applicant seeks an order referring the matter to evidence.
In this
regard applicant submits that the validity or otherwise of the
respondent's claims against applicant, can only be determined
by
means of oral evidence. Applicant submits that the probabilities
relating to the indebtedness or otherwise of applicant to
respondent, are evenly balanced on the papers and that
viva
voce
evidence
might tip the balance of probabilities in favour of applicant,
should it be held that respondent's claim based on set
off is
baseless.
I
have a fundamental difficulty in principle with this approach of the
applicant. The
ratio
underlying
the Badenhorst Rule is that winding up proceedings are not designed
for the resolution of disputes as to the existence
or not of a debt,
hence if the debt is disputed on
bona
fide
and
reasonable grounds, the application for winding up cannot succeed.
What the applicant is now asking me to do is to involve
the Court in
a forensic investigation to thrash out the validity of the claims
upon which the respondent's defence is based.
The forum designed for
such a thrashing out is a trial action and not an application for
liquidation. My task at this stage of
the proceedings is to decide
whether, on the basis of the affidavits and annexures thereto, filed
by and on behalf of respondent,
respondent has
bona
fide
disclosed
facts which, if proved at the triaE, would constituted a good
defence. If so, the application for liquidation cannot
succeed.
What
I should not do is to refer this very issue to evidence to enable me
to decide whether respondent is disputing the claim
on
bona
fide
and
reasonable grounds. That would, in my view, undermine the whole
ratio
and
purpose of what has become known as the Badenhorst Rule. As I have
mentioned, applicant concedes that on the papers before
me, the
probabilities relating to the indebtedness or otherwise of applicant
to respondent, are evenly balanced. This concession
of necessity
means that there are at least on paper, probabilities in favour of
respondent's version, as well as probabilities
in favour of
applicants version.
As
Mr Spamer for applicant submitted, the scale is evenly balanced and
oral evidence is required to tip it one way or the other.
From this
it follows, in my view, that respondent has succeeded in showing
that the grounds advanced by it in disputing its alleged
indebtedness to applicant, are not unreasonable. I am in any event
satisfied that on the papers before me, respondent has alleged
sufficient facts which, if proved at trial, would constitute a good
defence of set off to applicant's claim. I do not consider
it
necessary to traverse all the evidence in this regard, but it will
suffice to refer to the following.
It
is not disputed by applicant that there was a business relationship
between the parties, in terms of which they would render
services
and hire equipment to and from each other. It is common cause that a
running account was maintained between the parties
during the course
of their relationship. It would, therefore, not be strange, as
alleged by respondent, that such account would
be updated from time
to time by the setting off of debits and credits between the
parties. The services allegedly rendered by
respondent to applicant
cover a wide range of activities and as submitted by Mr Kantor for
respondent, the overwhelming probability
appears to be that same
would not have been rendered free of charge to applicant.
In
its reply, applicant has disputed the veracity of the statement of
account annexed to respondent's papers, stating that it
is a
fabrication including fictitious amounts. However when applicant, in
its replying affidavit, challenged the respondent to
furnish
supporting documentation for certain claims, respondent did respond
by filing additional documentation as part of a supplementary
set of
affidavits.
To
summarise, on the strength of what has been presented to the Court,
I cannot draw the conclusion as suggested by applicant,
that this is
merely a fictitious claim made up by respondent. Also on the
information before me, I am unable to reject the respondent's
defence as
mala
fide.
Clearly
the contention of applicant, that respondent's defence is in essence
fictitious and
mala
fide,
can
only be properly adjudicated upon at a full scale trial where
discovery has been made of all relevant documentation, oral
evidence
is tendered and witnesses can be subjected to cross-examination. The
present forum, is not, in my view, the correct
forum for such an
exercise.
I
accordingly conclude that respondent has shown that applicant's
claim is opposed on
bona
fide
and
reasonable grounds. In view of this finding, it is not necessary for
me to deal with the issue regarding respondent's alleged
inability
to pay its debts. It follows that the application for the winding up
of respondent cannot succeed and in the result
the application is
DISMISSED with costs.
FOURIE, J