that it is unable to pay its debts. The Respondent is indebted to the Applicant (Goosen
Mega Enterprise (Pty) Ltd) in the amount of R 76 265.81 , in respect of services
rendered bet ween the Applicant and the Respondent for the construction job done.
Further , to have a Liquidator appointed in t he Liquid ation of the Respondent to
investigate its financial position and its ability to repay its debts in terms of Section 364
of the Companies Act 61 of 1973 (the 1973 Act).
[2] The C ourt has noted procedural issues raised by the Respondent in its
answering affidavit. However, the C ourt is not going to go further with the issues raised
as it does not take the matter any further and will not ass ist the process. The C ourt will
therefore deal with the primary issue of liq uidation.
Background and facts
[3] On the 11th of November 2022, The Respondent reduced an agreement that
had been discussed between the parties into writing referred to as ‘’Appointment of
Domestic Subcontractor’’ signed on the 11th of November 2022 as per Annexure ‘C’
attached to the pleadings. The agreement between the parties revolves around the
construction where the initial contract was for worth R 2 704 235.65 and R 2 627
969.84 has been paid without any dispute.
[4] The Appli cant attempted to make contact with the Respondent to settle the
amount , due to no avail and the Respondent’s failure to make payment. The Applicant
issued a Notice in terms of section 345 with the intention to l iquidate as per their letter
dated 28th September 2023.
[5] The Respondent in its answering affidavit denies it is unable to pay its debts
instead contends that the Applicant inflated the amounts and failed to submit the
correct invoi ces. Acc ording to the Respondent an amount claimed by the App licant in
the amount of R 76 265.81 is incorrect , the correct amount would the n be R 75 686.5 6.
The Respondent further denied it refused to pay the Applicant.
[6] The Respondent ’s attorneys addressed a letter dated 12 December 2023
suggesting that upon rec eipt of an invoice an amount of R 75 686.56 will be paid into
their Trust account pending the outcome of the litigation. Noted in the same letter that
the difference between the amount claimed and the amount tendered is in fact
R579.25. The Respondent further offered to pay on or before the close of business on
the 22nd of December 2022. It is common cause that this offer was not accepted by
the Applicant .
[7] The dispute regarding the extra R579.25 stems from quantity of building
material used during the c onstruction job. This was never referred to construction
expert for resolution.
The Law
[8] Section 344 of the old Act is the so urce of authority that vests a C ourt with the
power to liquidate a compan y in certain circumstances. S ection 344 (1) read with
section 345 (1)(a) (i) of the 1973 Act provides that :
“a company may be wound -up by a C ourt if it is unable to pay its debts and that the
company will be deemed to be unable to pay its debts if a creditor who is owed not
less than R100 serves on the company a demand requiring the company to pay the
sum due and the company fails to comply.”1
[9] In Imobrite (Pty) Ltd v DTL Boerdery CC2, the Supreme Court of Appeal
summarised the principles to be applied in cases where a debt is disputed, as follows:
“The essence of the principle is that it is wrong to allow the machinery designed for
winding up orders to be used as a means of resolving disputes which ought to be
settled in ordinary litigation. Although the respondent is not disputing the debt, in my
view, the same principle will apply where the applicant is utilising the winding up
proceedings where the debt is secured by a security in the full amount of the debt or
more, rather than call on the security, in the absence of other creditors, … Liquidatio n
proceedings are drastic and accordingly, should be resorted to as a last option ”3
[10] Winding up proceedings ought not to be used to resolve debt disputes or to
enforce payment of a debt that is bona fide. Using such procedure for the purposes of
debt d ispute is an abuse of court process. The Court will not grant a liquidation order
if the sole intention is to enforce a disputed debt. The object to winding up requires an
existing debt obligation, if the debt is disputed and or yet to be enforceable by th e
company then this procedure cannot apply.
[11] In Standard Bank of SA v R -Bay Logistics4, the court said:
1 Van Veluw Beheer Bv v Maxxliving Pty Ltd and Another [2024] ZAGPJHC 505 at para 17. (unreported case).
2 2021 JDR 1536 (NWM)
3 Id para 24 -25.
4 2013 (2) SA 295 (KZD).
“Accordingly, the legislature must have intended that, to wind -up an "insolvent"
company, between the date of commencement of the new Companies Act, and the
implementation of intended new legislation, an applicant would have to establish one
or other of th e grounds for winding -up contemplated by Section 344 , including, in
particular, that the respondent company was unable to pay its debts .”5
Analysis
[12] In this matter the Respondent in principle does not dispute that money is owed
to the Applicant. The dispute revolves around the amount owed and whether the
Applicant failed to submit the correct invoices or not. The issue is whether or not in the
circumst ances of this matter the Respondent is unable to pay its debts and whether if
the Respondent is liquidated it will be to the benefit of creditors. What can be deduced
from the facts of this case is that the Respondent does not refuse to pay the Applicant
save to say there is a dispute of facts with regards to the amount owed. The facts also
do not suggest that the Respondent is unable to pay its debt due to the Applicant.
[13] It is not the duty of the C ourt in the present matter to resolve dispute pertaini ng
to whether there is any debt that exist between t he parties. Neither will the C ourt resort
to enforce a debt that is genuinely disputed by the Respondent in amounts . It is
therefore clear that in this case there is no evidence of the Respondent ’s inabil ity to
pay the debt owed to the Applicant .
[14] There is no evidence that th e Respondent ’s company is commercially insolvent
and cannot pay its debts when they fall due. The C ourt finds that section 344 read with
section 345 of the 1973 Act has not been p roven and there is no solid factual
foundation.
[15] I a m alive to the fact that c osts in normal circumstances follow the successful
party and that costs are discretionary. In the circumstances of t he present matter, th e
Applicant should have followed the normal action procedure so that the correct forum
can make a det ermination on the amount owed. The C ourt is mindfu l of the fact that
the Applicant might have approa ched the C ourt out of frustration. On the other hand,
5 Id at para 24.