IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION , PRETORIA
CASE NO: 2024-008266
DELETE WHICHEVER IS NOT APPLICABLE
( l) REPORT ABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED.
(4)
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Signature:-=-----
In the matter between :
AWESOME DISTRIBUTORS CC
And
UMNOTHOWETHU TRADING ENTERPRISE CC
JUDGMENT
NYATHI J
Applicant
Respondent
Introduction
[1] This is an application for the provisional liquidation of the respondent on the
presumption that the respondent is unable to pay its debts in terms of Section 345(2)
of the Companies Act, Act No 61 of 1973 (hereinafter referred to as "the 1973
Companies Act"). The applicant maintains that it is entitled to the relief claimed in
terms of Section 344(f) read with Section 345(1 )(a) of the 1973 Companies Act.
Background
[2] The application is premised on the provisions of section 344(f), read with section
345(1)(a) of the Companies Act 61 of 1973, on the basis that the respondent is
commercially insolvent and unable to pay its debts as and when they fall due.
[3] The applicant's claim arises from a debt that remains unpaid despite due demand. A
statutory demand in terms of section 345(1)(a) was properly served on the
respondent, which failed to make payment or raise a bona fide dispute within the
prescribed 21-day period. Consequently, the applicant contends that the respondent
is deemed unable to pay its debts and that it is just and equitable for the respondent
to be wound up.
[4] The respondent is opposing the application and has filed their answering affidavit,
alleging that the indebtedness is bona fide disputed on reasonable grounds.
[5] The respondent argues a number of legal points and issues that it hopes will be
dispositive of the claim.
[6] The respondent also argues that the application is an abuse of the winding-up process
and that the company is both factually and commercially solvent.
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[7] Whilst the respondent had initially alleged that the claim which the applicant had
instituted has prescribed, they are no longer persisting with this point.
(8] The respondent is praying that the applicant's claim be dismissed with costs.
(9] The respondent, however, have failed to pay the full amount owing to the applicant.
(1 OJ The respondent made partial payments to the applicant with regard to its
indebtedness on various different dates.
(11] The applicant alleges that the last payment made by the respondent to the
applicant was on 2 January 2022.
(12] The respondent also contends that the papers when issued amount to a nullity and
are contrary to the provisions of the Justice of the Peace and Commissioner of Oaths
Act 16 of 1963 as read with the regulations promulgated thereunder.
Common-cause facts and disputed issues
(13] It is common cause that:
(i) the parties concluded a written supply agreement dated 8 February 2024;
(ii) the Plaintiff delivered goods under 17 i_nvoices between 12 February 2024
and 15 May 2024;
(iii) the Defendant made part payments totaling R 1 120 000; and
(iv) the balance remains unpaid. The dispute centers on four invoices where the
Defendant raised quality complaints and a general defence based on a
clause that (on the Defendant's case) limits or excludes liability where "any
defects are reported within 7 days".
(14] The main issue to be decided is whether the applicant is entitled to the relief sought
in this application, more particularly:
i. Whether a prima facie right in favour of the applicant exists;
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ii. Whether the applicant is entitled to rely on its statutory demand.
iii. Whether the respondent committed an act of insolvency;
iv. Whether the respondent should be provisionally liquidated; and
v. Whether there are any other alternatives for the relief sought.
Discussion
[15] Ms Vorster, the Applicant's erstwhile attorney, directed a notice of demand in
accordance with Section 345(1) of the 1973 Companies Act to the respondent,
demanding payment in the amount of R2 207 866.02 within 21 days from the date of
service.
[16] The applicant obtained a copy of the respondent's financial statements which
indicates that the respondent cannot settle its debts when they become due and the
debt due to the applicant is not indicated on the statements.
[17] The respondent avoided the applicant after the delivery of the notice of demand
and failed to make payment of the debt as per demand within 21 days thereof.
[18] As the respondent failed to respond to the demand, the applicant's erstwhile
attorney instituted liquidation proceedings.
[19] The respondents have complied with the provisions of the 1973 Companies Act
and has provided the Master with Security.
[20] The application has been served on the Master, SARS and the employees and
Trade Unions.
[21] In response, the respondent raises defences based on technicalities and
unsupported by any cogent evidence whatsoever.
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[22) Section 345 of the Companies Act of 1973 is a deeming provision: because the
respondent does not pay its debt after being served with a statutory demand, the
respondent is deemed to be unable to pay its debt. - See Ter Beek v United
Resources CC and Another 1997 (3) SA 315 (C) at 331 and Body Corporate of Fish
Eagle v Group Twelve Investments 2003 (4) SA 414 (W) at 428 B-C.
[23] The requirements for a liquidation under Section 345(1 )(a) read with 344(f) of the
1973 Companies Act are as follows:
i. An amount of more than R 100 must be due by the Respondent to the Applicant;
ii. The Applicant must serve a statutory demand on the Respondent, adding to
the usual terms that unless payment is made within 21 days, an application for
liquidation will be brought.
iii. The Respondent must have failed to make payment in terms of the statutory
demand.
iv. The Applicant must convince the court on application to exercise its discretion
in favour of liquidation. (This is borne by the word "may" in section 344(f)).
The Respondent's opposition:
[24) Prescription: The respondent did not persist with this point of opposition at the
hearing of the application.
[25) Res judicata: The respondent relies on dismissal of similar proceedings in the
Krugersdorp Magistrates' Court. The dismissal was for lack of jurisdiction; the merits
were not adjudicated. There is no final judgment on the merits between the same
parties concerning the same cause of action. The plea of res judicata accordingly fails.
See African Wanderers Football Club v Wanderers Football Club 1977 (2) SA 38 (A).
5
(26] Solvency and ability to pay: The respondent asserts that it is solvent, financially
sound, and has adequate cash flow, based on its financial statements. However,
the applicant obtained statements indicating the company cannot settle its debts
when due, and the respondent's indebtedness to the applicant is not reflected
therein. Non-payment following a statutory demand, coupled with the cessation of
payments since December 2022, evidences commercial insolvency. The court is
concerned with the company's ability to meet current liabilities; balance sheet
solvency does not displace the commercial insolvency test. The respondent's
indication that it will advance further submissions at the hearing is of no assistance
where no factual foundation is laid in the answering affidavit. Liquidation
proceedings are motion proceedings; the affidavits constitute both pleadings and
evidence.
[27] Compliance: The application was served on the Master, SARS, and the
employees/trade unions, and security was furnished to the Master. These factors
weigh in favour of granting relief. The applicant has shown proper compliance with
procedural requirements and has made out a prima facie case for liquidation.
(28] The court's discretion must be exercised judicially, considering whether liquidation
is just and equitable in the circumstances and whether any alternative, such as a bona
fide and reasonable dispute of indebtedness, exists. No such genuine dispute is
established. The respondent's conduct-acknowledgement of debt, part payments,
cessation of payments, and failure to satisfy the statutory demand-points to inability
to pay.
(29] The applicant has established the jurisdictional facts under sections 344(f) and
345(1 )(a). The respondent has not rebutted the statutory presumption of inability to
pay under section 345(2). The defences of prescription, res judicata, and asserted
solvency are without merit on the papers. It is therefore appropriate to grant a
provisional order of liquidation.
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Order:
[30] The following order is made:
The respondent is provisionally liquidated and placed in the hands of the Master of
the High Court, Pretoria. The Draft Order filed under Caselines 015-14 to 015-17
providing for a rule nisi is made an order of Court.
Date of hearing: 12/05/2025
Date of Judgment: 06 February 2026
On behalf of the Applicant: Mr. CJ Liebenberg
J.S. NYATHI
Judge of the High Court
Gauteng Division, Pretoria
Instructed by: Cavanagh & Richards Attorneys, Pretoria
On behalf of the Respondents: Mr. SB Friedland
Instructed by: Beder-Friedland Incorporated., Pretoria.
Delivery : This judgment was handed down electronically by circulation to the parties'
legal representatives by email and uploaded on the Caselines electronic platfonn. The
date for hand-down is deemed to be 06/02/2026.
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IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case No: 2024-008266
BEFORE THE HONOURABLE JUSTICE NYA THI J
On this 06 February 2025.
Court "---
Matter number 41 on the roll
This Order is made an Order of Court by the Judge whose name is reflected herein,
In the matter between:
and
UMNOTHOWETHU TRADING ENTERPRISE CC
(Registration Number: 2009/077866/23)
Respondent
#r couRT ORDER /'/
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THE COURT GRANTS THE FOLLOWING t)J ~A~~'
1.
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That the Respondent be provisionally liquidated a ~ ed in the hands of the
Master of the High Court
2. That a rule nisi be granted for 4 MAY 2026 at 1 0h00 or as soon thereafter as the
matter may be heard on which day the Respondent, or any party - who wishes
to avoid such an Order being made final - to advance reasons, if any, why this
Court should not grant a final Order of Liquidation;
3. A copy of this provisional liquidation Order be served on -
3.1 . The Respondent personally;
3.2. The employees of the Respondent, if any;
3.3. All trade unions of which the employees of the Respondent are
members, if any;
3.4. The Master of the High Court, Pretoria; and
3.5. The South African Revenue Service.
4. That the cost of this application, as between attorney and client, be costs in the
liquidation of the Respondent;
5. Further and/or alternative relief as this Honourable Court may deem appropriate.
DATED at fte)ono
BY ORDER
on this
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FOR THE APPLICANf /4 o v
Cavanagh & Richards ~torn~ys /
Chris Liebenberg V
Cell: 084 561 0853
E-mail: chris@crlawchambers.co.za
day of _ k{j.......;;_J_,;1.,(a:;.;;;..;.j ..J-,_-- 2026 .
FOR THE RESPONDENT : .,,
Beder-Friedland Inc _,:,'
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Cell: 0826039640 • / "l,.l·'~
/ -t"'' Email: sb@bfinc.co.za ~~0
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