THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 1140 /2023

In the matter between:
SUMEIL (PTY) LTD APPELLANT
and
COOGAL FINANCE (PTY) LTD (IN LIQUIDATION) FIRST RESPONDENT
KAREN FORTEIN N O SECOND RESPONDENT
THE MASTER OF THE FREE STATE
HIGH COURT, BLOEMFONTEIN THIRD RESPONDENT

Neutral citation: Sumeil (Pty) Ltd v Coogal Finance (Pty) Ltd (In Liquidation) and
Others (1140 /2023 ) [2025 ] ZASCA 27 (28 M arch 2025 )
Coram: ZONDI AP and KOEN and COPPIN JJA and PHATSHOANE and
BLOEM AJJA
Heard : 25 February 2025
Delivered : 28 March 2025
Summary: Claim for money payment on application – application of Plascon -Evans
rule – Set-off – executory contract – reciprocal obligations – duty of applicant to make
out a case for relief sought.

2

___________________________________________________________________

ORDER
___________________________________________________________________
On appeal from : Free State Division of t he High Court, Bloemfontein (Mbhele DJP,
Reinders and Loubser JJ , sitting as a full court ):
1 The appeal is upheld with costs .
2 The order of the full court, dismissing the appellant ’s appeal , is set aside and is
substituted with the following order:
‘1 The appeal is upheld with costs .
2 Paragraphs 31.4 and 31.5 of the order of the court a quo are set aside
and are replaced with the following order :
“The application against the first respondent for payment to the applicant of the
amount of R944 000 (nine -hundred and forty-four thousand rands) and interest
on that amount , is dismissed ”.’
___________________________________________________________________

JUDGMENT
___________________________________________________________________
Coppin JA (Zondi AP and Koen JA and Phatshoane and Bloem AJJA,
concurring) :
[1] This is a n appeal , with the special leave of this Court in terms of s 17 (3) of the
Superior Courts Act.1 It is against the order of the full court of the Free State High
Court (the full court) which dismissed , with costs, the appellant’s appeal from th e court
of first instance (the high c ourt). At the behest of the first and s econd respondents , the
high court, inter alia, had granted an order in an application (the application) directing
the appellant , Sumeil (Pty) Ltd (Sumeil) , to pay to the first respondent , Coogal Finance
(Pty) Ltd (in liquidation) (Coogal) , an amount of R94 4 000 and interest (the payment
order ) and 30% of the cost of that application .

1 The Superior Courts Act 10 of 2013.
3

[2] The costs order and other orders made by the high court were not appealed
and were not before the full court , or this Court . The second respondent , Ms Karen
Fortein (Ms Fortein) , is cited in her capacity as the liquidator of Coogal . The third
respondent, the Master of the Free State High Court, Bloemfontein, did not participate
in the proceedings at all.

[3] The crisp issue for determination is whether the payment order had been
correctly made , ie was it proved on the papers that Sumeil was indebted to Coogal in
the aforesaid amount , as found by the high court and confirmed by the full court , and
should that order have been granted ?

Background
[4] Mr Willem Andries Maritz Nel (Mr Nel) became and remained the sole director
of Coogal from 6 March 2015 until its liquidation . Mr Nel and his wife are the co-
directors of Sumeil. Coogal’s shareholder is the Maritz Nel Family Trust (the trust ). Mr
Nel, his wife and their auditor are the trustees of the trust. And Mr Nel and his wife
were Sumeil’s shareholders , but following Coogal’s liquidation , they sold their shares
in Sumeil to Minel (Pty) Ltd. Coogal’s main business activity, according to its
registration documents, was ‘ broker and provider of financial services and all related
services and activities ’. But in a subsequent directors’ report for the year ended 28
February 2013 it is stated that Coogal’s primary activity in the preceding twelve months
was to create new market opportunities for entrepreneurship through commercial
transportation and the leasing of heavy -duty vehicles. Sumeil’s main business,
according to its registration documents, is transpo rt.

[5] Over the years Coogal purchased vehicles which were financed by ABSA Bank
(ABSA ) in terms of instalment sales agreements which it would then lease in terms of
‘master rental agreements ’ to transport contractors for short or longer periods. The
contractors would usually use th ose vehicles as replacement vehicles in their fleet
while their own vehicles were being repaired. Coogal mainly derived its income from
this kind of master rental agreement.

[6] In 2012 Coogal concluded a lease -to-buy agreement with a transport contractor
(DP Botes Vervoer) in respect of all its vehicles. Consequently , it had no vehicles
4

available for leasing to its other customers . This shortage prompted Coogal to acquire
four Volvo trucks (the trucks) in terms of four separate instalment sale agreements it
concluded with ABSA . Coogal was to pay to ABSA an instalment of approximately
R30 000 per month per truck as from 2 December 2012 in terms of the respective sale
agreement s. Ownership of the trucks was reserved and vested in ABSA pending full
payment of the purchase price of each truck, whereupon ownership of the fully paid
truck would pass to Coogal.

[7] During March 2016 Coogal leased the four trucks to Sumeil in terms of four
separate master rental agreements . In terms of each agreement Sumeil had to pay 35
instalments of R10 000 (excl uding VAT) per month and a final ball oon payment upon
maturation of R165 000 (excl uding VAT). The agreements were to mature and
terminate on 28 February 2019 . Ownership of the trucks was reserved pending full
payment to Coogal.

[8] Upon maturity of the agreements Sumeil had the option to acquire ownership
of the trucks at no cost . This was also confirmed in four ‘End of Contract / Rental ’
notices dated 1 December 2018 sent to Sumeil by Coogal in respect of each of the
master rental agreements . According to each of those notices , if Sumeil did not notify
Coogal of its election within three months of the termination of the agreement, Sumeil
would be deemed to have elected to acquire ownership of the truck s. In terms of each
of the master rental agreements Coogal was to carry the maintenance and running
costs of the trucks, but (according to Mr Nel) this duty was ultimately assumed by
Sumeil which invoiced Coogal in that regard.

[9] Coogal was provisionally liquidated on 7 March 2019 and finally on 11 April
2019. The application for its liquidation was brought by a nother creditor and was duly
lodged with the Registrar of the high court on 4 February 2019 . Section 348 of the
Companies Act 2 (the Companies Act) provides that a winding -up of a company by the
court shall be deemed to commence at the time of the presentation to the court of the

2 The Companies Act 61 of 1973 (the Companies Act ). Section 348 of the Companies Act applies to
the liquidation of companies after the Companies Act 71 of 2008 came into operation by virtue of the
provisions of paragraph 2 of Item 9 to Schedule 5 to the 2008 Act.
5

application for the winding -up. Thus, in terms of our law , Coogal ’s liquidation is
deemed to have commenced on 4 February 2019 (the deemed date of liquidation) and
the concursus creditorum is deemed to have bee n established on that date .3

[10] During about September 2020 Coogal, at the behest of Ms Fortein , as its
appointed liquidator, brought the application in the high court . In term s of the notice of
motion, as subsequently amended on 8 February 2021 , Coogal and Ms Fortein, cited
as the first and second applicant , respectively, sought an order for the liquidation of
Sumeil, and for orders , effectively , that the corporate veils of Coogal and Sumeil be
pierced , that their separate corporate statuses be ignored and that they be tre ated as
if they were one entity. In the alternative , they sought an order that Sumeil pay to
Coogal the amount of R944 000, plus interest and costs .

[11] In the founding affidavit Ms Fortei n avers that ‘[o]n 4 February 2019, Sumeil
owed Coogal an amount of R185 000 in respect of the master rental agreement ’.
According to her, ‘[t]his was the balance due on the ledger of Sumeil in the financial
records of Coogal ’. In support of th is averment Ms Fortein refer s to a copy of ledger
‘006: Sumeil (E dms) Bpk’, a copy of which is attached to the founding affidavit. She
state s that this ledger ‘clearly recorded the R4 0 000.00 plus VAT monthly invoices. . .
which shows a debit balance of R185 000.00 on 4 February 2019 ’ owing to Coogal .
She also states that the four balloon payments of R165 000 plus VAT (R189 750) in
respect of each of the trucks (giving a total of R759 000) was ‘also due and payable ’.
Accordingly , she alleges , that, in total, Sumeil was indebted to Coogal in the amount
of R944 000 (R185 000 plus R759 000).

[12] In trying to make out a case for the liquidation of Sumeil , Ms Fortein refer s to
the financial records and the ledgers of Coogal; to the ledger accounts of Sumeil and
to the financial records of these entities. She describe s the records as ‘unsanitised’ .
They, inter alia, showed that immediately before the deemed date of liquidation Sumeil
owed Coogal R185 000 and that Sumeil had a credit balance of R1 412 906.83 with
Coogal .

3 Nel NO and Others v The Master of the High Court and Others 2002 (3) SA 354 (SCA) para 6.
6

[13] Sumeil opposed the application . Mr Nel deposed to the answering affidavit . In
addition to raising technical points, Mr Nel on behalf of Sumeil , denie s that Sumeil was
insolvent or that it was just and equitable for it to be wound -up. He explain s how the
agreement s between Sumeil and Coogal in respect of the trucks came about and how
they worked. Mr Nel also deals with the financial records of those entities and explain s
that both used a Pastel bookkeeping system : in Coogal’s records the ‘Supplier’
transactions were recorded in the creditor ledger under account ‘008: Sumeil (Edms)
Bpk’; the ‘Customer trans actions ’ were recorded in the debtor ledger under account
‘006: Sumeil (Edms) Bpk’; loans to and from Sumeil ‘were accounted in the general
ledger under account “5500/004: Sumeil (Edms) Bpk ”’; and that ‘[a]t the end of a
financial year those accounts were reconciled to reflect the financial position between ’
Sumeil and Coogal.

[14] Mr Nel goes on to explain how, even though it was Coogal’s obligation, Sumeil
came to carry the running costs o f the trucks and invoice d Coogal for them. And how
it was necessary to ada pt the books of account because of that agreement . According
to Mr Nel , Sumeil was ‘both, a “Suppl ier” (creditor) as well as a “customer ”’ or debtor
in Coogal’s books of account and the transactions between them were mirrored in
Sumeil’s books of account.

[15] Mr Nel admit s that in terms of ledger ‘006: Sumeil (Edms ) Bpk’ Sumeil owed
Coogal R185 000 on the deemed date of Coogal’s liquidation (ie 4 February 2019 ) but
denies that Sumeil was indebted to Coogal on that date . On 4 February 2019 general
ledger ‘5500/ 004: Sumeil (Edms) Bpk’ reflected ‘a credit balance of R1 412 906.83 in
the books of Coogal and the customer ledger “006: Sumeil (Edms) Bpk ” reflected a
debit balance of R185 000.00 ’. Thus, on the deemed date of liquidation, according to
Mr Nel, Coogal owed Sumeil an amount of R1 227 906.83.

[16] Mr Nel further indicate s that before the order for the liquidation of Coogal was
granted , but after the deemed date of its liquidation, the trust, as shareholder of
Sumeil , ‘settled [Coogal’s ] indebtedness in terms of the instalment sale agreements in
respect of the four (4) Volvo trucks directly with ABSA bank ’. According to Mr Nel , the
payments to ABSA were accounted for in the books of Coogal as is evident from the
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journal entries made after 18 February 2019 in the customer ledger ‘006: Sumeil
(Edms ) Bpk’.

[17] The high cou rt held that the ledgers and financial records which Coogal relied
on, and referred to as ‘unsanitised’, were the same as the ledgers Sumeil relied upon
to dispute its alleged indebtedness to Coogal . The high court further held that Sumeil
was not factually or commercially insolvent and that Sumeil was indeed able to pay its
debts as and when they fell due . Even though the high court held that it was not
convinced that Sumeil was disputing its indebtedness to Coogal on bona fide and
reasonable grounds , because there was no objective evidence in the form of source
documents supporting the entries in the le dger, it nevertheless found that no case had
been made out for the liquidation of Sumeil. Consequent ly, the high court dismissed
Coogal’s application (a) for the provisional liquidation of Sumeil; (b) for an order to
ignore the separate corporate personalities of Sumeil and Coogal and to treat them as
one entity; and (c) for the relief ancillary thereto.

[18] But t he high court upheld Coogal’s claim for payment of the amount of
R944 000 and the interest on that amount and ordered Sumeil to pay 30% of the costs
of the application. The high court found that Sumeil admitted that it owed Coogal the
amount of R185 000, and that it did not dispute that ‘as at the date of [Coogal’s
liquidation] it owed Coogal R189 750.00 (including VAT )’ in respect of ea ch truck as
ballo on payments . It held that even though the balloon payment s had been made
directly to ABSA , it was made by the trust and there was ‘no supporting evidence ’ that
the payment was made on behalf of Sumeil . It also found that since these payments
were made ‘some tw o weeks after the date of the liquidation . . . it does no t fall to be
taken into account ’. The high court found that the payment by the trust to ABSA did
not extinguish Sumeil’s indebtedness to Coogal . Although the high court did not find
that the payment was void or voidable , it mentioned that it was for Ms Fortein to
investigate and pursue that issue further .

[19] Only t he alternative claim for payment was the subject of the appeal before the
full court , and that court confirmed the order of the high court in respect of that claim .
It held that there was no merit in the appeal of Sumeil and that it should therefore fail.
It essent ially, inter alia, accepted the followin g: When an order of liquidation is granted
8

a concursus credito rum is establi shed and no other transactions, apart from those that
are legally sustainable , may thereafter be effected ;4 any disposition which is not
sanctioned by the court is void5 and that ‘ unless a mutuality of respective claims
existed at the time of the liquidation , no set -off can take place ’;6 a mutuality is required
if there are reciprocal debts and they are payable and to be liquidated before the
concursus creditorum .7

[20] The full court essentially held the following. The high court considered Sumeil’s
version and applied the principle established in Plascon -Evans P aints v Van R iebeck
Paints8 for the resolution of real disputes of fact in motion proceedings ( the Plascon -
Evans rule).9 In terms of the Plascon -Evans rule where a final relief is sought the fact s
in dispute are decided on the respondent’s version unless that version is ‘so far-
fetched or so clearly untenable , or so palpably implausible ’ that it can be rejected on
the papers . The full court held that the high court did not err in finding that Sumeil had
placed insufficient evidence before it and the full court was satisfied with the high
court’s conclusions . It held that Coogal succeeded in showing that Sumeil owed it the
judgment amount at the date of Coogal’s deemed liquidation. The full court conclude d
that the fact that the payment s were made by the trust to ABSA after the deemed date,
constituted an ‘insurmountable obstacle ’ to Sumeil’s defence . According to the full
court, ‘[t]here can be no dispute that such payments were void ab initio (and were most
certainly not declared to be valid in the exercise of a court’s discretion) as was held in
Pride Milling ’.10


4 Fairleigh NO v Whitehead and Another 2001 (2) SA 1197 (SCA).
5 Pride Milling Company (Ltd) v Bekker NO and Another [2021] ZASCA 127; 2022 (2) SA 410 (SCA) ;
[2021] 4 All SA 696 (SCA) (Pride Milling ).
6 Thorne and Another NNO v The Government 1973 (4) SA 42 (T) (Thorne ).
7 Richter NO v Riverside Estates (Pty) Ltd 1946 OPD 209 at 223-224.
8 Plascon -Evans Paints (TVL) Ltd v Van Riebeck Paints (Pty) Ltd 1984 (3) SA 623 (A) 634H -635C
(Plascon -Evans ); see also Wightman t/a JW Construction v Headfour (Pty) Ltd [2008] ZASC A 6; 2008
(3) SA 371 (SCA) ; [2008] 2 All SA 512 (SCA) paras 11-12.
9 In terms of the Plascon -Evans rule the fact in dispute is decided on the respondent’s version unless
that version is ‘so far -fetched or implausible, or so clearly untenable, or so palpably unreasonable’ that
its rejection merely on the papers is justified. The order sought will only be granted if the facts stated by
the respondent together with the facts averred by the applicant, that are admitted by the respondent,
justify its grant.
10 Pride Mi lling fn 5 above .
9

[21] The arguments made by the parties in th is Court are, in essence, the same
arguments they advanced before the full court. It was submitted on behalf of Sumeil
that the high court (and by extension the ful l court) did not consistently or correctly
apply the Plascon -Evans rule to the monetary claim . Had they applied the rule
correctly they were bound to conclude the following: that Coogal owed Sumeil
R1 227 906.83 on the deemed date of liquidation (ie 4 Febr uary 2019) ; the four balloon
payments were not due and owing at the deemed dated of liquidation , because they
were only due at maturity , which was on 28 February 2019 ; and that it was never
Sumeil’s case that the pay ments made by the trust to ABSA were made in order to
discharge Sumeil ’s debt to Coogal , but rather, that such payments were made to
discharge Coogal’s obligations to ABSA in order to facilitate the transfer of the trucks
to Sumeil. Lastly , it was submitted on behalf of Sumeil that the payment by the trust to
ABSA did not constitute a ‘disposition’ in terms of s ection 341(2) of the Companies
Act, because the mone y paid was not Coogal ’s, but that of the trust.

[22] The submi ssions made on behalf of Coogal and Ms Fortein were essentially in
support of the approaches and decisions of both the high court and full court . Briefly,
it was submitted that: Sumeil sought to ‘deconstruct’ the Plascon -Evans rule, which
had exceptions , such as when allegations or denials are far-fetched or clearly
untenable ; on the deemed date of liquidation Sumeil was indebted to Coog al in the
amount of R944 000 in respect of the master rental agreement s; the debt arose from
the payments that had to be made by Sumeil to Coogal in respect of the trucks ; ‘no
lawful cession, set -off or repayment occurred or c ould occur after the deemed date ’;
and ‘[a]ny payments and/or resultant adjustments to the general ledgers of either party
through journal entries would have the effect of preferring certain creditors, while
causing prejudice to other creditors ’.

[23] It was further submitted on behalf of C oogal and Ms Fortein that: there was
insufficient evidence upon which to conclude that the payment s made by the trust to
ABSA were made on Sumeil ’s behalf an d for the purpose of releasing Sumeil from the
balloon payment s it owed Coogal ; and that Sumeil cannot rely on accounts containing
journal entries ‘which were drawn up at its own behest after the deemed date , to prove
repayment of amounts to Coogal’ ; the accounts also could not serve to prove that
10

Coogal owed Sumeil ; in th e absence of source documents ‘there is no real evidence’
that Coogal was indebted to Sumeil ; there was no material dispute of fact on the
papers regarding Sumeil’s indebtedness to Coogal ; and Sumeil’s denial of being
indebted to Coogal was ‘not based on bona fide and reasonable grounds ’ but was ‘an
unsubstantiated denial for which insufficient supporting evidence is proffered ’.

Discussion
[24] Ultimately , Sumeil is relying on set -off. In the books of account of Coogal and
Sumeil there are debits and credits , which if ‘set-off’ against each other , produce a
balance at a particular time in favour of one, or the other. ‘Set-off’ is the extinguishing
of debts owed reciprocally between two parties. Generally, i t operates automatically
provided its requirements are met . They are: (a) the parties must be mutuall y indebted
to each other in their personal capacities ; and (b) the mutual debts must be liquidated
and be due and payable.11

[25] Since the spectre of liquidation looms large in this matter, the f ollowing
principles are vital. ‘ Unless mutuality of respective claims existed at the time of
liquidation, no set -off can take place’ .12 The reason for this is apparent. If set-off was
permissible after liquidation , then it may give a particular creditor an undue preference
and undermine the entire rational e of a concursus .13

[26] The essence of Sumeil’s version regarding its indebtedness to Coogal ,
including its indebtedness in respect of the balloon payments for the four trucks , is the
following. In the answering affidavit , in re sponse to an averment that Sumeil is
indebted to Coogal in those amounts , Mr Nel states :
‘36.11 . Before any liquidation order was granted (and thus before any deemed date of
liquidation ) [Sumeil] honoured its contractual obligations in terms of the master rental
agreement to [Coogal] by settling of [Coogal’s] indebtedness in respect of the four Volvo trucks
directly to ABSA Vehicle Finance (ABSA). I append the proof of payments marked “MN 8.1”
to “MN 8.4” .

11 See, inter alia, Siltek Holdings (Pty) Ltd (in Liquidation) t/a Workgroup v Business Connexion
Solutions (Pty) Ltd [2008] ZASCA 136; [2009] 1 All SA 571 (SCA) (Siltek ) para 9.
12 Ibid, see also Thorne .
13 Ibid, see also Administrator, Natal v Magill, Grant and Nell (Pty) Ltd (in liquidation) 1969 (1) SA 660
(AD) (Magill ) at 671.
11

36.12 . The said payments represent the final ball oon payments due by [Coogal ] in respect
of its four instalment sale agreements to ABSA.
36.13 . I point out that the aforementioned payments were made from the account of [the
trust] who made the payment on behalf of [Sumeil] . The payments were accounted in the
books of [Coogal], as is evident from the journal entries made on 18 February 2019 in the
customer ledger – “KF-18”.
36.14 . The total balance due by [Sumeil] in terms of the master rental agreement of
R30 956.28 [R 7 739.12 in respect of each Volvo truck ] was accounted against [Sumeil’s]
credit balance on the general ledger account.
36.15 . I thus respectfully submit that, irrespective of the provisions of section 348, 341 and
340 of the 1973 Act , [Sumeil] discharged its liability to the applicant in terms of the master
rental agreement .’

[27] In light of the c ommon cause facts and the law , traversed above , some of the
averments of Mr Nel do not withstand scrutiny. In paragraph 36.11 of Sumeil’s
answering affidavit, Mr Nel states the exact opposite of what was submitted to us on
behalf of Sumeil, namely that Sumeil was not claiming that the trust’s payment to
ABSA served to extinguish its debts under the master rent al agreements to Coogal.
Here Mr Nel state s that Sumeil honoured those obligations to Coogal ‘by settling’
Coogal’s indebtedness directly with ABSA.

[28] Annexures ‘MN 8.1 to 8.4’ are ABSA online notices of payment . Each of them
reflects that payment of an amount of R182 010.88 was made to ABSA . The total paid
to ABSA was thus R728 043.52 ( R182 010.88 x 4 ). All four notices are dated 18
February 2019 , are addressed to Sumeil and indicate that the payments were made
by the trust . These payments were clearly made after Coogal’s deemed date of
liquidation , that is after 4 February 2019. Mr Nel’s averment that the payments
occurred before the deemed date of Coogal’s liquidation is therefore also wrong. He
appears to have confused the date when the order of liquidation was granted with th e
deemed date of liquidation .

[29] Mr Nel effectively state s that Sumeil’s debt to Coogal in terms of the master
rental agreement s was extinguished by ‘set -off’ without mentioning ‘set-off’ explicitly.
The full court correctly held that ‘[u]nless mutuality of respective claims existed at the
12

time of liquidation, no set -off can take place.14 It is apparent from the customer ledger
‘006: Sumeil (Edms) Bpk’, ‘KF-18’, that these transactions in the ledgers in terms of
which Sumeil is claiming that Coogal now became indebted to it , were only effected
on 18 February 2019 , when the payment was made to ABSA by the trust. Coogal is
deemed to have been in liquidation by then. Set-off could not operate after the deemed
liquidation of Coogal , and after the concursu s was deemed to have been established15
in respect of the balloon payments.

[30] In Siltek this Court quoted with approval what had been stated in Thorne
concerning that aspect, namely:
‘In regard particularly to the question of set -off, the rule is that once a concursus creditorum
has been established, there can be no compensation unless mutuality between the respective
claims existed at the date of the order. . . [t]he mutuality here required is that the reciprocal
debts both existed and that both were liquidated and payable, before the concursus creditorum
was established .’16

[31] In resp ect of the debt of R185 000, Ms Forte in allege s the following:
‘On 4 February 2019, Sumeil owed Coogal an amount of R185 000.00 in respect of the master
rental agreements. This was the balance due on the ledger of Sumeil in the financial records
of Coogal. I respectfully refer the above honourable court to a copy of ledger “006: Sumeil
(Edms) Bpk ” attached as annexure “KF-18” which clearly recorded the R40 000.00 plus VAT
monthly invoices, and which show s a debit balance o f R185 000.00 on 4 February 2019 .’

[32] In Sumeil’s answering affidavit Mr Nel states in response to those averments :
‘I admit that in terms of KF -18 [ledger ‘006: Sumeil (Edms) Bpk’] Sumeil owed [Coogal]
R185 000.00 on 4 Febru ary 2019’. But Mr Nel then goes on to state , in effect, that is
not the complete story, because if you consider the other ledger entries, at that date,
Coogal in fact owed Sumeil. There were mutual debts owed between Sumeil and
Coogal immediately prior to the liquidation of Coogal. Sumeil’s indebtedness to Coogal
of the sum of R185 000 was accordingly extinguished. But s et-off could not operate in

14 Thorne and Siltek .
15 See Siltek .
16 Siltek para 8.
13

respect of the balloon payments because they were only due after the effective date
of liquidation.

[33] Thus, even if the defence of set -off in respect of the balloon payments
(R759 000) for the trucks could not be upheld , the same cannot be said for the claim
of the R185 000. Set-off clearly operated in respect of that claim. On the deemed
liquidation of Coogal it was indebted to Sumeil in the nett amount of R1 227 906.83 ,
ie after set ting-off Sumeil ’s debt to Coo gal of R185 000, against Coogal’s debt to
Sumeil of R 1 412 906.83. However, it does not follow tha t Sumeil should , in those
circumstances have been ordered to at least pay the balloon payment debt (ie the
R759 000). T he question that remain ed, is whether Coogal (and M s For tein) made out
a case on the papers for the payment of th at amount.

[34] At the time of the liquidation of Coogal , performance in terms of the master
rental agreements was still outstanding, ie the master rental agreements were
executory contract s: Sumeil would have to pay the sum of R759 000 against which
Coogal would have to pass ow nership of the trucks to Sumeil . Upon liquidation, i n
terms of the law , Ms Forte in, as liquidator, was to elect whether to abide by those
agreements and complete them , or repudiate them.17 The election was to be made
within a reasonabl e time .18 If a liquidator elects to abide by a contract which has
reciprocal obligations, and attempts to enforce it, the other party may raise the
exceptio non adempleti contractus if the insolvent party has not perform ed or tendered
performance in full.19

[35] Since the master rental agreements contain reciprocal obligations, and are
recipr ocal agreements, Coogal (and Ms Forte in), having elected to abide by the
agreements , could only claim payment of the amounts outstanding, against a tender
by Coogal to perform its reciprocal obligations in terms of those agreemen ts. The latter
obligations certainly would have included , tendering transfer of the ownership of the
trucks to Sumeil against payment . It is a trite principle that a party claiming the

17 Ellerines Brothers (Pty) Ltd v McCarthy Limited [2014] ZASCA 46; 2014 (4) SA 22 (SCA) paras 10 -
12 (and the case is cited there).
18 Glen Anil Finance (Pty) Ltd v Joint Liquidators: Glen Anil D evelopment Corporation Ltd (in L iquidation)
1981 (1) SA 171 (AD) at 182.
19 Frank v Premiere Hangers CC [2007] ZAWCHC 21; 2008 (3) SA 594 (C) at 603A -H.
14

performance of obligations in a reciprocal agreement must not only allege , but to
succeed, must prove that it has performed its contractual obligations , or at least ,
tender performance of those obligations.20

[36] The only inference to be drawn is that Ms Forte in (on behalf of Coogal) had
elected to abide by the master rental agreements and to complete them . But she
sought payment from Sume il without tendering performance of Coogal’s reciprocal
obligations. In the absence of a reciprocal tender of performance of delivery of the
trucks , she (and Coogal) failed to make out a valid case in law for the payment .

[37] Consequently , Coogal (and Ms F ortein) should not have succe eded in their
claim for payment under the master rental agreements with Sumeil and that claim
ought to have been dismissed.

[38] In the result:
1 The appeal is upheld with costs.
2 The order of the full court , dismissing the appellant ’s appeal , is set aside and is
substituted with the following order:
‘1 The appeal is upheld with costs.
2 Paragraphs 31.4 and 31.5 of the order of the court a quo are set aside
and are replaced with the following order:
“The application against the first respondent for payment to the applicant of the
amount of R944 000 (nine -hundred and forty -four thousand rands) and interest
on that amount , is dismissed ”.’


________________
P COPPIN
JUDGE OF APPEAL


20 Thompson v Scholtz 1999 (1) SA 232 (SCA) at 238 D-F.
15

Appearances

For the appellant: P J J Zietsman SC
Instructed by: Muller Gonsior Inc. , Bloemfontein

For the first & second respondent: T P Kruger SC
Instructed by: Jaco Roos Attorneys, Pretoria
Noordmans Inc., Bloemfontein .