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2025
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[2025] ZANCHC 88
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Firstrand Bank Limited v Omstaan Boerdery CC (976/2024; 912/2024; 913/2024; 914/2024) [2025] ZANCHC 88 (9 September 2025)
IN THE HIGH COURT OF
SOUTH AFRICA
(NORTHERN CAPE
DIVISION, KIMBERLEY)
CASE NO.: 976/2024,
912/2024, 913/2024, 914/2024
Date heard:
06-02-2025
Date delivered:
09-09-2025
Reportable:
Yes/No
Circulate
to Judges:
Yes/No
Circulate
to Magistrates:
Yes/No
In the matter between:
976/2024
FIRSTRAND
BANK LIMITED
Applicant
AND
OMSTAAN
BOERDERY CC
Respondent
And
in the application
between:
912/2024
FIRSTRAND
BANK LIMITED
Applicant
And
THE
TRUSTEES FOR THE TIME BEING OF
SKANSKOP
TRUST, IT
1987/96
Respondent
And
in the application between:
913/2024
FIRSTRAND
BANK LIMITED
Applicant
AND
THE TRUSTEES FOR THE
TIME BEING OF
EMERALD TRUST,
IT198/96
Respondent
And in the application
between:
914/2024
FIRSTRAND BANK
LIMITED
Applicant
AND
THE TRUSTEES FOR THE
TIME BEING OF
MERBINE TRUST,
IT1983/96
Respondent
CORAM: WILLIAMS
J:
JUDGMENT
WILLIAMS J:
1.
On 6 February 2025 I made orders
inter alia
confirming the
provisional liquidation order in matter 976/2024 and the provisional
orders of sequestration in matters 912, 913
and 914/2024 and granted
final orders in the above matters. My reasons now follow:
2.
Omstaan Boerdery CC (Omstaan CC) owes the applicant Firstrand
Bank
Ltd an undisputed amount in excess of R41, 3 million. The
Skanskop Trust, the Emerald Trust and the Merbine Trust (the
Trusts)
in their capacity as sureties and co-principal debtors of Omstaan CC
are indebted to the applicant in the amount of R22
million.
3.
On 6 September 2024 and by agreement between the parties, Omstaan
CC
and the Trusts were placed in provisional liquidation and
sequestration.
4.
Omstaan CC and the Trusts however opposed the confirmation of
the
provisional orders on the basis (i) that the Omstaan Group is not
insolvent, (ii) that it would not be to the advantage of
creditors;
and (iii) that special or unusual circumstances exist for the court
to exercise its discretion in refusing the final
orders sought by the
applicant.
Background
5.
During April 2024 Omstaan CC was indebted to the applicant in
an
amount in excess of R37 million.
6.
After being served with the applications for the provisional
liquidation and sequestrations, the respondents and the applicant
entered into acknowledgement of debt agreements which were made
orders of court on 24 May 2024 and the applications for the
provisional orders were postponed to 6 September 2024.
7.
The acknowledgment of debt orders were to the effect that:
7.1
Omstaan CC admitted its debt to the applicant in the total amount
plus interest
from 1 February 2024 to date of payment;
7.2
Omstaan CC undertook to make full payment of the above amount by
close of business
on 2 September 2024, alternatively have bank
guarantees issued by 2 September 2024 in favour of the applicant,
providing for payment
of its indebtedness in full by 30 September
2024;
7.3
In the event of breach of the acknowledgment of debt order, Omstaan
CC agreed
to be placed in final liquidation;
7.4
The Trusts acknowledged their indebtedness to the applicant in the
amount of
R22 million each (the limit of their suretyship) plus
interest from 1 February 2024 until date of payment;
7.5
The Trusts undertook to make full payment of their indebtedness by
close of
business on 2 September 2024 alternatively provide bank
guarantees for payment by 30 September 2024;
7.6
In the event of breach of the acknowledgement of debt orders the
Trusts agreed
that the applicant be entitled to proceed with
obtaining final sequestration orders against it.
8.
On 30 August 2024, three days before full and final payment
was due
or bank guarantees were issued in terms of the acknowledgment of debt
orders, the respondents provided the applicant with
a new settlement
proposal, which the respondents have incorporated into their
answering affidavit and which proposal is set out
as follows:
8.1
From 30 September 2024 until 31 May 2025 the respondents will make a
minimum
payment of R500, 000.00 per month to be applied towards the
interest incurred monthly;
8.2
The respondents would cede to the applicant and secure payment of the
raisin
and cotton proceeds, to be paid directly to the applicant as a
capital reduction, which would reduce the current outstanding amount,
on the basis that interest is served as per paragraph 8.1 above, by
at least R5 million by end of May 2025;
8.3
The respondents would then require a payment holiday over the winter
months
of June, July and August 2025 as the winter yields are far
less than in summer and it is not envisaged that the interest
payments
of R500, 000. 00 per month will be met. The
respondents will however make payment to the applicant of whatever
they harvest
in respect of lucerne.
8.4
From September 2025 until end of May 2026, the cycle will repeat.
8.5
The above process should reduce the outstanding amount by about R10
million
over a period of two years.
8.6
By end of May 2026 the respondents would pay the balance owing by
being in a
position to get finance elsewhere, alternatively, the
farms can then be sold.
8.7
In the meantime the respondents will consent to a notarial bond being
registered
over the movable assets of the “
group”,
which would increase the applicant’s security by at least R5
million to R7 million.
9.
The above settlement offer is embodied in a letter by the attorney
of
record for the respondents and aside from the settlement proposal,
the letter, which forms part of the respondents’ answering
affidavit in all the matters before me, discloses other pertinent
information regarding the respondents’ financial standing.
10.
The Omstaan Boerdery Group conducts a farming enterprise in the
Northern Cape.
Mr and Mrs Visser Senior are the registered
owners of 14 hectares, Mr AJ Visser (Junior) is the owner of 21
hectares, the Omstaan
Trust is the owner of 46 hectares, the Emerald
Trust is the owner of 14 Hectares, Merbine Trust is the owner of 14
hectares and
Skanskop Trust is the owner of 14 hectares.
11.
Omstaan CC, is the trading/farming entity and owns the movable assets
(tractors,
lorries and farming implements) with which the farming is
conducted, valued between R10 million and R20 million.
12.
The land described above was developed as one farming unit from the
middle seventies,
focusing mainly on grape/raisin production until
about two years ago, when due to
inter alia
flooding, the
Covid 19 pandemic and changing market conditions, the reliance on an
income from raisins alone no longer made commercial
sense. The
Omstaan Boerdery Group then diversified its farming operations to
include the productions of lucerne and cotton.
13.
The letter states that whilst it can be argued that the individual
Trusts and
the CC are factually insolvent, the Omstaan Boerdery Group
is solvent in that the value of its assets exceeds the extent of its
outstanding debt.
14.
Valuation reports for the immovable properties described in paragraph
10 above
were attached to the answering affidavit as well as for a
farm in the Kenhardt region which belongs to the Omstaan Trust and a
holiday property in Port Nolloth which belongs to A J Visser Junior.
The total value of the group’s immovable property
amounts to
about R50 million.
15.
The respondents allege further that they only have one other creditor
of note,
SASFIN, in respect of some of the farming equipment.
16.
The respondents allege further that the Omstaan Group has an income
sufficient
to not only service its debt but also to meaningfully
repay a portion of the outstanding capital annually, continue to farm
and
provide labour opportunities, provide food security locally and
internationally and to provide an opportunity for the next generation
of Vissers to continue the development of the land.
Discussion
17.
Whilst one has empathy for the dilemma of the Visser family, the
stark reality
is as follows:
17.1
The applicant has called up the indebtedness of Omstaan CC as far
back as 7 May 2023. A
notice of demand in terms of s 69(1)(a)
of the Close Corporation Act, 69 of 1984, demanding payment within 3
weeks, was served
on Omstaan CC on 7 March 2024. At the time
Omstaan CC’s indebtedness to the applicant stood at about R35
million plus
interest. At 28 November 2024 Omstaan CC’s
indebtedness towards the applicant stood at R41.2 million plus
interest.
A mere R191, 574, 00 has been paid towards this debt
between July 2023 and 5 December 2024, when the replying affidavit
was deposed
to. In the meantime interests was accruing and
compounding on the indebtedness in the amount of about R430, 000.00
per month.
17.2
The respondent Trusts have failed to make any payment towards the
indebtedness, which in effect
means that over a period of 17 months
the respondents failed to service even one month’s interest on
the indebtedness, notwithstanding
the acknowledgment of debt orders
of 24 May 2024 or the settlement proposal of September 2024.
17.3
The respondents’ allegations that the Omstaan Group is solvent
and that the applicant is
in any event over-secured cannot stand.
The respondents contend that the total value of the immovable
property of the Omstaan
Group is some R50. 25 million. Since
this amount exceeds the admitted debt of R41. 3 million, the argument
is that the Omstaan
Group is solvent.
18.
The above argument is flawed in that it takes into account the total
assets
of the Group, which is not an legal entity, and not that of
the individual entities which have contracted with the applicant.
In addition it involves assets of persons and a trust not before
court, such as Mr and Mrs Visser senior, Mr A.J Visser junior
and the
Omstaan Trust. The argument also does not take into account the
debt to SASFIN, which not surprisingly has not been
fully disclosed,
other than being the only other major creditor.
19.
The Omstaan Boerdery CC itself does not own any immovable property.
Its
debt to the applicant is R41. 3 million and its assets,
consisting of movable property, amount to at best for the CC, some
R20
million.
20.
The Skanskop Trust has known assets to the value of R7. 3 million.
The
Emerald Trust’s assets are valued at R5 million and that of
the Merbine Trust at R4. 95 million. Each of the Trusts
admitted liability to the applicant amounts to R22 million. The
respondents are all factually insolvent.
21.
The respondents’ contention that the applicant is over-secured
likewise
holds no water. The total value of the applicant’s
mortage bonds registered over the imovable properties of the
Omstaan
Group
only totals R34. 85 million. The mortgage bond over
the immovable property of Skanskop Trust provides the applicant with
security in the amount of R4 million. The mortgage bond
registered over the Emerald Trust’s immovable property provides
the applicant with security of R3 million. The mortage bond over the
Merbine Trust’s immovable property provides the applicant
with
security in the amount of R2 million.
22.
As far as Omstaan CC is concerned, it has not in its answering
affidavit disputed
that it is commercially insolvent.
23.
S 69 of the Close Corporation Act sets out the circumstances under
which a close
corporation is deemed unable to pay its debts.
The circumstances relevant to this application are contained in
s69(1)(a)
and (c), which read as follows:
“
If -
69(1)(a)
a creditor, by cession or otherwise, to
whom the corporation is indebted in a sum of not less than two
hundred rand then due
has served on the corporation, by delivering it
at its registered office, a demand requiring the corporation to pay
the sum so
due, and the corporation has for 21 days thereafter
neglected to pay the sum or to secure or compound for it to the
reasonable
satisfaction of the creditor; or
(b)
. . . . . . . . . .
(c)
it is proved to the satisfaction of the
Court that the corporation is unable to pay its debts.”
24.
The applicant, in satisfying the requirements in S69(1)(a) delivered
a demand
upon Omstaan CC on 23 February 2024. Omstaan CC failed
to pay, secure or compound the debt within 21 days of receiving the
demand and it is therefore deemed to be commercially insolvent.
25.
Omstaan CC has only paid a total amount of R4, 175 since the AOD
order of 24
May 2024. Before that and between July 2023 and
April 2024 the Omstaan CC paid only amounts totalling R187, 399.
From
July 2023 to date of hearing the Omstaan CC had paid a total of
only R191, 574 towards its admitted debt of R41.3 million, which
is
less than half the interest accruing monthly.
26.
The applicant has therefore also satisfied the requirement in s 69)
(1) (c),
in that it has shown unequivocally that Omstaan CC is unable
to pay its debts and is commercially insolvent.
27.
Mr Olivier, who appeared for the respondents. argued that it would
not be in
the interest of justice in all the applications if the
respondents be liquidated and sequestrated and in the case of the
Trusts
that it may not be to the advantage of creditors should the
Trusts be sequestrated. The argument is that there are other
reasonable options or alternative means for the applicant to recoup
its monies rather than liquidation and sequestration of the
respondents, which would allow the respondents to continue its
business operations. Considerations such as an extended period
within which to pay off its debt to the applicant whilst the
provisional orders are discharged, alternatively extending the
provisional
orders for the respondents to service the debt. With
lucerne and cotton crops now in place, it was argued that the
respondent
Trusts will now be getting an income from such crops,
further alternatively allowing the respondents an opportunity to
procure
alternative finance to service its debt to the applicants.
28.
In dealing with the submissions on behalf of respondents, it is
important to
note firstly, that Omstaan CC had already approached
ABSA Bank Ltd to take over its debt to the applicant, but that ABSA
would
not consider such an application in the absence of certain
documents and information which the Omstaan CC failed to provide;
secondly
the respondents have already defaulted on previous
agreements and undertakings to make payment to the applicant, on its
very own
terms; thirdly, although the respondents state in their
opposing affidavit that agreements have been entered into with
international
buyers of lucerne and that the Omstaan Group has
contracted with a buyer for the sale of cotton, no such agreements
have been annexed
to their affidavit. Given the past behaviour
of the respondents it is hardly surprising that the applicant is no
longer prepared
to give the respondents a further grace period in
which to make payment, merely on the say so of the respondents.
29.
It is so that a court has a discretion whether or not to order the
winding-up
of a close corporation or company despite the creditor
having satisfied the requirements for such an order. In
Orestisolve (Pty) Ltd t/a Essa Investments v NDFT Investments
Holdings (Pty) Ltd and Another
2015(4) 449 (WCC), Rogers J gave a
few examples of when the
ex debito justitiae
maxim
would not be applied,
inter alia
where the creditors have a
difference of opinion as to the need for a winding-up; where a
company has been deemed to be unable
to pay its debts in terms of s
345(1)(a) of the Companies Act 61 of 1973, but is in fact
commercially solvent; or there are competing
applications for
liquidation and business rescue or the debt is disputed on
bona
fide
and reasonable grounds.
30.
None of the above situations apply
in casu
. Mr Olivier
referred to the matter of
Standard Bank of South Africa limited v
Marais
(884/221) [2022] SAGPPHC 134 (14 March 2022), where Van
der Schyff J refused to confirm a provisional sequestration order
despite
the respondent’s history of not honouring payment
agreements and evading responsibilities agreed to with the applicant,
in
similar vein as the respondents have done
in casu.
In
the
Marais
matter however, the respondent has been shown to be
factually solvent and was in the process of obtaining bridging
finance and of
selling his immovable farming properties in order to
settle the applicant’s claim in full.
31.
The same considerations do not apply here. The respondents have
all been
shown to be factually insolvent in addition to the Omstaan
CC being commercially insolvent.
32.
In my view the applicant has complied with all the requirements for
the granting
of final orders for liquidation and sequestration in
these matters. The Omstaan CC has failed to show any compelling
reason
why a final liquidation order should not be granted. The
respondent Trusts each have immovable property which, if sold, will
provide a substantial dividend to creditors and it can only be to the
advantage of the general body of creditors that the Trusts
be
sequestrated.
Costs
33.
As far as the costs of the various applications are concerned I
ordered that
it be paid on an attorney and client scale in accordance
witht the various financial agreements entered into between the
parties.
The
above are the reasons for the orders made.
CC
WILLIAMS
JUDGE
For
Applicant:
Adv
J Van Niekerk SC
Adv
C Morgan
Werksman
Attorneys
c/o
Sean Squire Attorneys
For
Respondents:
Adv
J Olivier
Stryom
& Bredenkamp Attorneys
c/o
Van de Wall Inc