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PULLINGER AJ
[1] The applicant applies for an order placing the respondent in final liquidation on
the basis that it is unable to pay its debts as contemplated in section 344(f) read
with 345(1)(c) of the Companies Act, 1973.
[2] The debt which the applicant asserts arises from a written agreement in terms
of which the applicant would provide certain advertising services to the
respondent for the period July to November 2022. There is no dispute that the
agreement was concluded.
[3] The agreed, discounted, fee for those services was R500,000. The importance
of this discount will become apparent shortly.
[4] It is common cause that the respondent has not paid the applicant for the
services it rendered.
[5] In its answering affidavit, the respondent takes two points.
[5.1] The respondent’s first point concerns this court’s jurisdiction. It
contends that this court does not enjoy jurisdiction over the
respondent or over this dispute. It contends that its principal place of
business is in Sunderland Ridge, Centurion, Tshwane and that its
registered address is in Strydom Park in Tshwane . It refers to a
document in support of the latter statement of fact that is not attached
to the answering affidavit.
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[5.1.1] I disagree with the respondent’s contention.
[5.1.2] Section 21(1) of the Superior Courts Act, 2013 provides
that “[a] Division has jurisdiction over all persons residing
or being in, and in relation to all causes arising and all
offences triable within, its ar ea of jurisdiction and all other
matters of which it may according to law take
cognisance…”. The word “Division” is defined as “any
Division of the High Court” and “High Court” means the
“High Court of South Africa referred to in section 6(1)”.
Section 6(1 ) states that the High Court of South Africa
consists of the Divisions listed in sub -paragraphs (a) to (j)
thereof and section 6(3)(c) empowers the minister to
establish one or more local seats of a Division and
determine its area of geographical jurisdiction.
[5.1.3] The High Court , Johannesburg is a local seat of the
Gauteng Division. It is not a separate court from the main
seat of the Division in Pretoria (Murray N.O v African Global
Holdings (Pty) Ltd 2020 (2) SA 93 (SCA) at [18]).
[5.1.4] The Gauteng Division’s area of geographical jurisdiction
was determined in the Minister’s Determination of 15
January 2016 made pursuant to sections (6)(3)(a) and (5)
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of the Superior Courts Act, 2013 and is set out in item 2 of
the schedule to the Determination.
[5.1.5] In terms of th e Determination, t his seat of the Gauteng
Division enjoys concurrent jurisdiction with the main seat in
Pretoria over, inter alia , the magisterial districts of
Johannesburg and Randburg. Johannesburg, ex facie the
LexisNexis report annexed to the founding affidavit, being
the respondent’s registered address and Midrand, being
the place where the written agreement between the parties
was concluded, falls within the Randburg sub-district.
[5.1.6] Notwithstanding the aforegoing, and even if the
respondent’s registere d address is now as alleged , this
court still enjoys jurisdiction by virtue of the Minister’s
Determination aforesaid.
[5.2] The second point concerns the applicant's alleged non -performance
in terms of the written agreement. The version that appears , for the
first time, in the answering affidavit, suggests that, for certain periods,
advertisements were not flighted. This is clearly refuted in the replying
affidavit.
[5.2.1] On 2 March 2023, demand was made on the respondent to
pay an amount of R 575 000.00. The respon dent did not,
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at that time, dispute the indebtedness either in terms of the
amount demanded or assert that the services were not
rendered. It has long been said that, “… a party's failure to
reply to a letter asserting the existence of an obligation
owed by such party to the writer does not always justify an
inference that the assertion was accepted as the truth. But
in general, when according to ordinary commercial practice
and human expectation firm repudiation of such an
assertion would be the norm if it was not accepted as
correct, such party's silence and inaction, unless
satisfactorily explained, may be taken to constitute an
admission by him of the truth of the assertion, or at least
will be an important factor telling against him in the
assessment of the probabilities and in the final
determination of the dispute. And an adverse inference will
the more readily be drawn when the unchallenged
assertion had been preceded by correspondence or
negotiations between the parties relative to the subject -
matter of the assertion. ” (McWiliams v First Consolidated
Holdings (Pty) Ltd 1982 (2) SA 1 (A) at 10 E to H and the
authorities therein cited).
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[5.2.2] The respondent does not address why, in respect of those
advertisements which were flighted, it has not paid for the
services it received.
[5.2.3] In respect of the discount, the respondent suggests, as I
understand it, that it has been overcharged by the
applicant. But ex facie the written agreement, this is not the
case. Moreover, the involvement of the stores at which the
advertisements were flighted has nothing to do with the
applicant; it was a service provider to the respondent.
There is no causal link to the stores , the agreement or the
discounted price for the advertising services apparent from
the answering affidavit.
[5.2.4] There is then no basis for this contention and it is difficult
to understand how any dispute of a factual nature, much
less how the respondent could cogently contend that the
debt is illiquid or overstated can cogently be advanced.
[6] Now, bearing in mind that the applicant applies for the respondent's winding-up
on the basis of it being unable to pay its debts, and the respondent has not
suggested to the contrary, whether it has been satisfactory proved that the
respondent is able to pay its debts.
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[6.1] The principal is that an unanswered demand is prima facie evidence
of an inability to meet obligations, because a trading entity that is not
facing financial difficulties ought to be able to meet its obligations from
current revenue or readily available resources (Rosenbach & Co (Pty)
Ltd v Singh’s Bazaars (Pty) Ltd 1962 (4) SA 593 (D) at 597 D to G)
[6.2] This is an instance where the respondent bears an evidentiary burden
to set out those facts within its knowledge to rebut a prima facie case.
[6.3] In Wright v Wright and Another, 2015(1) SA 262 (SCA) Majiedt JA, at
paragraph 15, says that:
"Litigants are required to seriously engage with the factual allegations they seek
to challenge and to furnish not only an answer but also countervailing evidence,
particularly where the facts are within their personal knowledge."
[6.4] The learned Judge of Appeal referenced the earlier judgment of Heher
JA in Wightman trading as JW Construction v Headfour, (Pty) Ltd and
Another 2008(3) SA 371 (SCA) at paragraph [13] in furtherance of the
principal stated.
[6.5] Here, the respondent has not engaged with the facts it purports to
dispute in any meaningful way. The respondent does not even
contend to be solvent or able to meet its obligations. It must be plain
that these are facts that fall wit hin the respondent's knowledge, and
they ought to have been addressed.
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[6.6] The inference which arises from the respondent’s failure to pay
invoices that are, in terms of the written agreement, payable on 30
days, is that it cannot do so (Rosenbach & Co supra).
[6.7] This inference is strengthened by the respondent’s failure to have
addressed, in any manner, its failure to pay for at least a portion of the
services which it accepts were rendered or to have answered the
demand made on it (McWilliams supra).
[6.8] The respondent’s failures, aforesaid, leads to the conclusion that it is
a company which is unable to pay its debts.
[7] In Legh v Nungu Trading, 353 (Pty) Limited and Another, 2008(2) SA 1 (SCA),
Ponnan JA said, at paragraph [18], that:
"In my view, the appellant established that he is a creditor of the company. Furthermore, it
is undisputed that the company was unable to pay its debts. Generally speaking, an unpaid
creditor has a right ex debito justitiae to a winding-up order against a company unable to
pay its debts."
[8] In this particular case, I cannot see any basis on which to exercise a discretion
in favour of the respondent. The answering affidavit does not engage with the
facts set out in the founding affidavit and does not provide any cogent reason
for the non-payment of at least the undisputed portion and there is a complete
absence of any evidence in the answering affidavit of the respondent’s financial
position much less that it can meet any of its obligations as they fall due.