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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO:  38402/15

REPORTABLE

OF INTEREST TO OTHER JUDGES

18/5/2017

In the matter between:

GREGORY PAUL CUMMING                                                                                  Applicant

and

NUVEST CHEMICALS (PTY) LIMITED                                                              Respondent

Summary - Application for the winding up of a company in terms of section 344(f) - whether section 4 of Act 71 of 2008 (‘the New Act’) has application in assessing solvency of company - whether financial statements used to assess solvency should comply with sections 4, 18 and 19 of the New Act in order to be admissible - held that section 4 of the New Act has no application in assessing solvency for this purpose - that court may have regard to financial statements which do not comply with the provisions of sections 18 and 19 and that non-compliance only has a bearing on weight to be attached to such statements

 

JUDGMENT

 

OPPERMAN J

INTRODUCTION

[1] The Applicant seeks the winding up of the Respondent on the basis that the Respondent is unable to pay its debts in terms of section 344(f) of the Companies Act, 61 of 1973 (‘the Old Act’) read with sections 9 of Schedule 5 of the Companies Act, 71 2008 (‘the New Act’), alternatively, on the basis that the Respondent has failed to secure or compound a debt of R 314 501.12 despite it being due and payable and having received a demand dated 7 September 2015 in terms of section 345 (1)(a) of the Old Act.

 

THE APPLICANT

[2] In terms of a deed of cession dated 2 December 2014, the loan account of The Bambinos Trust (‘the trust’) in the books of account of the Respondent was ceded to Mr Gregory Paul Cumming (‘Mr Cumming’), the applicant and the deponent to the founding affidavit.

[3] The Respondent was incorporated during April 2013 and until June 2014, Mr Arthur Dennis Pretorius (‘Mr Pretorius’) was the only shareholder. Mr Cumming’s loan account (ceded to him by the trust) was generated after dividends were declared but not paid to the shareholders. The loan account allegedly represents the trust’s (now Mr Cumming’s) share of the pro-rata distributable profits earned by the Respondent for the financial year June 2013 to June 2014. These dividends were to be paid to the shareholders, Mr Pretorius, Mr Jooste and the trust.

 

THE DEBT AND LOCUS STANDI

[4] The existence of the loan account is not in dispute. The extent of such loan account is. The loan account of Mr Cumming, as reflected in the audited financial statements of February 2015 (‘the audited financial statements of Feb 2015’), is the amount of R364 501. Mr Pretorius, the deponent to the respondent’s answering affidavit contends that the correct amount is R259 976.12. He has explained that the dividends were credited to the loan accounts of the shareholders but the tax paid thereon was erroneously only debited against his loan account instead of pro rata between the shareholders.

[5] On 13 April 2015, a meeting was held. Mr Pretorius, Mr Cumming and Mr Jooste attended. This much is common cause. Mr Pretorius contends that it was agreed by all those present that no loan accounts or profits were to be paid out due to cash flow constraints. The minutes of the meeting were attached to the answering affidavit and record that: ‘Shareholders and Directors have agreed that no loan account and or profits to be paid out due to cash flow constraints, until further notice’ (‘the 13 April 2015 agreement’). Mr Cumming in his replying affidavit admits being at the meeting but states that he ‘reiterated at the meeting that I required payment of the balance of my loan account….’

[6] Mr Theron SC, representing Mr Cumming, argued that the contents of the minutes do not support the 13 April 2015 agreement, because the minutes reflect that ‘the Shareholders and Directors’ agreed, and Mr Cumming is not a shareholder nor a director. It follows, so the argument goes, that the 13 April 2015 agreement, if concluded by the shareholders and directors, on its own terms, exclude Mr Cumming.

[7] What this argument ignores is that all the deponents to the founding, answering and replying affidavits, laboured under the mistaken impression that Mr Cumming was a shareholder. Mr Cumming stated under oath in his founding affidavit: ’I am a 37% shareholder of the respondent.’  Mr Pretorius admitted this. This was shown to be incorrect as it is the trust that is the shareholder. Mr Pretorius, in a supplementary affidavit, explained that he failed, in his dealings with Mr Cumming, to properly differentiate between the trust and Mr Cumming personally. Mr Cumming had the same difficulty. He too failed to differentiate between the trust and himself - to the extent that he even deposed to an affidavit to say that he was a shareholder when in fact it was the trust. He wants this court to accept that that was a bona fide error. Under these circumstances it hardly lies in his mouth to contend that the minutes do not reflect the conclusion of the 13 April 2015 agreement because it excludes him as a loan account holder. The taker of the minute recorded the presence of Mr Cumming at the meeting, which Mr Cumming admits. It records an agreement between the holders of loan accounts, of whom Mr Cumming is one, not to call up the loan accounts until further notice. On this basis I find that the reference in the minutes to ‘Shareholders and Directors’ includes Mr Cumming as the difference between the trust and Mr Cumming was not appreciated by those present at the time and the argument does not give adequate consideration to this probability, thus erroneously elevating form over substance.

[8] It would appear that Mr Cumming on 8 April 2015 and in preparation of the meeting, which was held on 13 April 2015, requested confirmation by the accounting officer of the extent of the loan account. Even the accounting officer got it wrong and described the subject of the letter as ‘Confirmation of Shareholders Loan Account Balance of Nuvest Chemicals (Pty)Ltd’. (my emphasis)

[9] Mr Theron then argued that if regard is had to the unaudited financial statements of February 2016 (‘unaudited financial statements of February 2016’), it is clear that the loan account of Mr Pretorius was repaid some time after 28 February 2015 but before 1 March 2016. This fact, so the argument ran, confirms Mr Cumming’s contention that the 13 April 2015 agreement was not concluded. This point was not raised in the papers[1], nor in the heads of argument. It was raised for the first time during oral argument in court. There are a number of possible explanations available but as not raised in the papers and as respondent has not had an opportunity to advance any explanations, I need not go into these[2].

[10] Having regard to the 13 April 2015 agreement, I find that, as at the date of demand, 7 September 2015, at the very least, a bona fide dispute existed as to whether the trust’s (now Mr Cumming’s) loan account debt was due and owing to Mr Cumming by the Respondent company.

[11] Although Mr Cumming alleged in his founding affidavit that he was the holder of a loan account in the Respondent, he only revealed in a replying affidavit to a further affidavit by the Respondent, that the trust had ceded the loan account to him by deed of cession, on 2 December 2014. It was not contested that Mr Cumming was the holder of the loan account. However, this confusion has another sting: when the section 345 demand was made, it was made on behalf of the wrong entity, the shareholder, which Mr Cumming was not. It recorded that as a shareholder he had a loan account, which he had not. The letter did accordingly not correctly record the facts underpinning the debt and could accordingly not trigger the deeming provision contained in section 345(1)(a)(i).

[12] It is trite that a contingent creditor (one to whom a debt may become payable on the occurrence of a future uncertain event, for example where the company has stood surety for a principal debtor and it may be that in the future the principal debtor fails to pay, in which event the company, as surety would become liable to the creditor under the terms of the deed of suretyship) or prospective creditor (one to whom the company will have to make payment of a debt payable at some future date) has locus standi to apply to Court for the winding-up of a debtor company but not on the grounds of non-compliance with a demand in terms of the provisions of s 345(a)(1) of the Old Act, which is only available to a creditor whose claim is due and payable on date of the demand.[3]

 

THE RESPONDENT’S SOLVENCY

[13] The application for the winding up of the respondent was launched on 30 October 2015. The answering affidavit of the Respondent deposed to by Mr Pretorius, was deposed to on 2 December 2015. To such affidavit was annexed the respondent’s audited financial statements of February 2015.

[14] On 9 March 2017 Mr Pretorius on behalf of the Respondent filed a further affidavit and attached unaudited financial statements for the year ended 29 February 2016. It bears mentioning that there were quite a number of supplementary affidavits filed which the parties requested the court to receive as evidence and which the Court accepted, albeit that this is a practice not to be encouraged.[4]

[15] Mr Theron submitted that in assessing the Respondent’s solvency regard may only be had to the audited financial statements of February 2015 and not to the unaudited financial statements of February 2016, which he referred to as a ‘document’ because, so he argued, section 4 read with sections 28 and 29 of the New Act obliged the court to only have regard to financial statements which complied with the requirements of such sections. I deal with this argument later in this judgment.

[16] Mr Theron argued that the audited financial statements of February 2015 revealed an accumulated loss with its liabilities exceeding its assets in the amount of R2 140 as opposed to a profit of R 246 708 as at 28 February 2014. The statements also reflected a negative cash flow for 2015 of R114 130, which he argued, is a clear indicator of the difficulties the Respondent was experiencing with its liquidity and cash flow. He also drew attention to the fact that the age analyses revealed that the Respondent owed its creditors R2 741 285.41 in excess of 30 days and its debtors total R 2 440 342.19 in the range in excess of 30 days, casting doubt over the recoverability of these debts. He concluded that on the Respondent’s own balance sheet it could not pay the loan account. This then the position as at February 2015.

[17]  Mr Theron drew attention to the fact that the unaudited financial statements of February 2016 reveal that the immediate creditors (R 5 859 581) exceed the immediate debtors (R 4 976 213).  The fact that no age analysis is available, so the argument ran, is critical as one is unable to assess whether the Respondent is able to pay its debts as and when they fall due.

[18] Mr Coetzee SC, representing the Respondent, argued that the adequacy of the Respondent’s financial statements should be considered against the case the Respondent was called upon to meet. The case the Respondent was called upon to meet relates to a section 345 letter. That case was met more than adequately. Moreover, he argued, it was clear from the unaudited financial statements of February 2016, that there was R 917 529 in the Bank (as opposed to R5 124 in Feb 2015) with which to pay the current debt.

[19] In addition, proof of the Respondent’s ability to pay lay in the fact that on     13 April 2017, the Respondent had paid R359 789.28 (Capital – R314 501.12 plus interest at 9% per annum from 17 September 2015 to 12 April 2017 – R45 288.16) into the trust account of the Respondent’s attorney of record, which amount had been deposited with an undertaking to pay upon final judgment being granted against the respondent, subject to an action being instituted within 30 calendar days from 13 April 2017. 

[20] Further, Mr Pretorius deposed to a further affidavit on 9 March 2017 in which he stated:

‘The Respondent has been trading successfully since the time of delivery of the answering affidavit. Such trading includes that the Respondent has been paying its creditors as and when their claims became payable’

[21] Mr Theron argued that Mr Cumming could not, with the knowledge he has of the financial predicament of the Respondent, accept the belated guarantee and deposit into trust because if Mr Cumming were to accept payment and the Respondent were liquidated, it would be a small step to say that this payment constituted a collusive transaction or the like. He contended that, where the warning lights were so clearly flashing, this was potentially an impeachable transaction and one best avoided.

 

APPLICABILITY OF SECTION 4 OF THE NEW ACT

[22] Mr Theron submitted that in assessing the Respondent’s solvency, regard may only be had to the audited financial statements of February 2015 and not to the unaudited financial statements of February 2016, which he referred to as a ‘document’ as section 4, read with sections 28 and 29, of the New Act obliged the court to only have regard to financial statements which complied with the requirements of such sections. That was so, he submitted, because the New Act has repealed the Old Act in its totality.[5] In terms of Section 224(3), read with Schedule 5, and particularly Section 9(1) of Schedule 5 of the New Act, all companies are now wound up in terms of the New Act.  Section 9(1) of Schedule 5 of the New Act reads as follows:

‘Despite the repeal of the previous Act, until the date determined in terms of sub-item (4), Chapter 14 of that Act continues to apply with respect to the winding-up and liquidation of companies under this Act, as if that Act had not been repealed subject to sub-items (2) and (3).’  (emphasis provided)

[23] The liquidation, so the argument continued, occurs in terms of the New Act.  Section 4(1) of the new Act reads as follows:

“For any purpose of this Act, a company satisfies the solvency and liquidity test at a particular time if, considering all reasonable foreseeable financial circumstances of the company at that time–

(a) the assets of the company, as fairly valued, equal or exceed the liabilities of the company, as fairly valued;  and

(b) it appears that the company will be able to pay its debts as they become due in the ordinary course of business for a period of –

(i) 12 months after the date on which the test is considered;  or

(ii) in the case of a distribution contemplated in paragraph (a) of the definition of “distribution” in section 1, 12 months following that distribution.”

[24] Section 4(2) of the New Act imports the requirements of Sections 28 and 29 of the New Act when accounting information regarding the company is considered. Thus, the argument continued, the Court when faced with an application for the liquidation of a company in terms of the New Act, should determine whether the company is solvent by employing section 4 to do so. If the court determines that it is insolvent, the company may only be wound up in terms of Schedule 5, read with the Old Act, and is enjoined by the New Act, in Section 4, to have regard to accounting records as contemplated in Sections 28 and 29. Once it is shown that the company is commercially insolvent (Section 4(1)(b) of the new Act) by having regard to admissible evidence, i.e. accounting records that comply with Sections 28 and 29 of the new Act, the company should be liquidated, so the argument ran.

[25] I do not agree that section 4 of the New Act has any application in determining whether a company is solvent or not for purposes of the current enquiry.

[26] The concept ‘solvency and liquidity test’ has a particular purpose and application in the New Act. In section 1 of the New Act, the definitions clause, ‘solvency and liquidity test’ is defined as ‘..the test set out in section 4(1)’ (my emphasis). Section 4 provides that ‘For purposes of this Act, a company satisfies the solvency and liquidity test at a particular time if…… ‘ (my emphasis). Such test must be satisfied when for example loans or other financial assistance is to be provided to directors[6], distributions are authorised by the board[7] or the board resolves to offer a cash payment in lieu of awarding a capitalisation share[8]. The test is applied differently depending on the section that puts the test in operation. The provisions of the Old Act that relate to winding up are to be applied as if they had not been repealed[9].

[27] In Firstrand Bank Ltd v Wayrail Investments (Pty) Ltd[10] , Vahed J held at paras [34] and [35] as follows:

“[34] As best as I can make out, the sections of the 2008 Act that refer to and call for the application of the solvency and liquidity test set out in section 4, are those dealt with in paragraphs 24 to 33 above. To my mind, the solvency and liquidity test, as described in section 4, is a device or tool for the purposes of implementing the provisions or satisfying the restrictions imposed in or by those sections.

[35] Significantly, neither section 81 (or for that matter the whole of Part G) nor Item 9 of Schedule 5 of the 2008 Act refers to the solvency and liquidity test. It refers simply to a solvent company.”

[28] In Boschpoort Ondernemings (Pty) Ltd v Absa Bank Ltd[11] Willis, JA commented as follows at para [14]:

“[14] The new Act has not defined the meaning of either a 'solvent' company or its converse, an 'insolvent' company. The case turns on what is meant by the term 'a solvent company' and conversely, the meaning of a company being 'insolvent'.”

The learned Judge then concluded in  paras [21] to [22] as follows:

“[20] I referred earlier to the fact that s 345 of the old Act was retained in terms of subitem 9(1) of sch 5 of the new Act. Subitem 9(2) provides that s 344 of the old Act shall not apply to the liquidation of 'solvent' companies, 'except to the extent necessary to give full effect to the provisions of Part G of Chapter 2'. Part G of ch 2 of the new Act, more particularly ss 79 to 81 thereof, relates to the winding-up of solvent companies. As we have seen, s 344(f) and s 345 of the old Act are fastened together by the clasp in s 344(f) that refers to a company being unable to pay its debts 'as described in section 345'. The seeming anomaly may be resolved if one recognises that s 345 was retained in subitem 9(1) to enable a determination to be made in terms of s 79(3) of the new Act that a company 'is or may be insolvent' — even though the application was made in terms of either s 80 or 81 for its winding-up as a so-called 'solvent' company. The deeming provisions concerning the inability to pay its debts, contained in s 345 of the old Act may be used to establish the insolvency of a company. In this regard, I agree with King AJ in Standard Bank of SA Ltd v R-Bay Logistics CC.

[21] This conclusion is significant in determining what is meant by a 'solvent company'. The retention by the legislature in the context of a winding-up of a solvent company in the new Act, of the deeming provisions as to when a company is unable to pay its debts as contained in s 345 of the old Act, is a clear indication of what is meant by an insolvent company in the new Act. It can only mean a company that is commercially insolvent. It therefore follows that a solvent company must be the converse, namely a company that is commercially solvent.”

[29] Willis JA did not find the answer as posed in para [14] of his judgment i.e. what is meant by a solvent company, in section 4’s solvency test. He found the answer in the ‘long-established and well-settled practice in our courts’[12] and in the presumption that the legislature deliberately refrained from defining ‘solvency’ in the New Act. The learned Judge concluded that: ‘The legislature must have been content that prevailing judicial interpretations of solvency and insolvency respectively should continue to have effect.’[13]

[30] For these reasons I conclude that there is no merit in Mr Theron’s argument that this court is precluded from having regard to the unaudited financial statements of February 2016. What weight is to be attached to them is a different consideration, one not advanced by Mr Theron who argued their receipt on admissibility only on the basis of the statutes discussed.

[31] Another reason why Mr Theron’s application of section 4 of the New Act can not be correct is the following: Mr Cumming brought his application in terms of sections 344 (f) and 345(1)(a)(i) of the Old Act. The court has already found that a bona fide dispute exists in respect of the debt and that in any event, the letter was written on behalf of Mr Cumming quo shareholder, which he never was. Mr Cumming, however, remains, even on Respondent’s version, a contingent creditor for he stands to be paid in the event that the agreement to subordinate loan accounts in favour of other creditors is varied or cancelled, rendering the loan account payable when that occurs and wearing the hat of a contingent creditor he contends: ’I verily believe that the respondent’s liabilities exceed its assets, and that it is insolvent’.

[32] To displace this belief, the respondent, on the argument advanced by Mr Theron, must produce financial statements that comply with sections 28 and 29. This might result in the respondent ‘failing’ the solvency and liquidity test and it would have to be wound up. This argument places an onus on the Respondent to prove that it is able to pay its debts. This is not what the authorities require. What is required is that an Applicant must prove to the satisfaction of the court that the Respondent is unable to pay its debts.

[33] The court has found that there exists a bona fide dispute in respect of the debt being immediately due and payable, and hence reliance on the section 345 letter cannot avail Mr Cumming. Now the enquiry goes into the solvency of the respondent due to Mr Cumming’s undisputed contingent creditor status. This court simply cannot find on the facts presented, that the Respondent is unable to pay its debts. Accepting that the unaudited financial statements of February 2016 should be viewed with caution due to the fact that they were not independently reviewed, that the auditor had not stated that the statements satisfied the International Financial Reporting Standards for Small and Medium Sized Entities, that the auditor had effectively stated that he got all the information in the report from the management of the Respondent and that he cannot verify the accuracy or the completeness of the information, there remains objective facts and safeguards which act as safeguards to the facts underpinning the unaudited financial statements of February 2016.

[34] Such facts support the central proposition being that the respondent is able to pay it’s debts, they include: (a) The application was launched on 10 October 2015, 18 months later the Respondent is still in business with no creditors intervening in this application; (b) Mr Pretorius says that the Respondent has been trading successfully since the delivery of the answering affidavit; (c) The amount of Mr Cumming’s contingent claim has been deposited into the Respondent’s attorney’s trust account with an undertaking that it will be paid out upon him securing a judgment against the respondent.

Factual solvency

[35] The unaudited financial statements of February 2016 reveal that the respondent is factually solvent, its assets exceed its liabilities by R 973 339. As stated in Boschpoort [14], it is a factor in deciding whether the respondent is able to pay its debts.

Commercial insolvency

[36] As referred to previously herein, Mr Theron drew attention to the fact that the unaudited financial statements of February 2016 reveal that the immediate creditors (R 5 859 581) exceed the immediate debtors (R 4 976 213).  The fact that no debtors age analysis is available, so he argued, is critical as one is unable to assess whether the Respondent is able to pay its debts as and when they fall due. Obviously, if the debts due to the creditors by the company are due immediately and the debts due to the company by its customers (debtors) are due to it at some date far into the future then the debtor’s age analysis would reveal this.

[37] The aforegoing disregards the fact that the difference (R5 859 581 – R4 976 213 = R 883 368) can be met by the R 917 529 available in the Bank. There is also the stock in the inventory of R 1 266 405, which would appear to provide an additional potential source of revenue with which the respondent could pay its creditors.

[38] In my view, and based on the facts placed before this court, it has not been shown that the Respondent is commercially insolvent.

[39] The court has an inherent jurisdiction to prevent abuse of its process and therefore, even where a ground for winding-up is established, the Court will not grant the order where the sole or predominant motive or purpose is something other than the bona fide bringing about of the company’s liquidation for its own sake.

 

ABUSE OF PROCESS

[40] The respondent has instituted action against The Pool Team (Pty) Ltd (‘The Pool Team’), Aqua Professional Products (Pty) Ltd (‘Aqua’) and Technical Eminence CC (‘Technical Eminence’) based on the breach of various contracts. At the time of the conclusion of the contracts The Pool Team and Technical Eminence were represented by Mr Cumming and Aqua by Mr Cummings’ brother, Robert Cumming.

[41] Mr Pretorius, the deponent to the answering affidavit in these proceedings, set out in much detail, the facts underpinning these claims, concluding that the motive for this winding up application is an attempt to get rid of these claims. The agreement concluded with the Pool Team was a sole supply agreement. From approximately June 2015, The Pool Team had not ordered any chemical products from the respondent but had been purchasing from another supplier in breach of the sole supply agreement.

[42] Mr Cumming in his replying affidavit stated that such allegations are irrelevant, scurrilous and defamatory. He also stated that the respondent has launched a liquidation application against The Pool Team and that he answered the allegations in such application.

[43] The point however is that this factual matter stands uncontested, with a request by the respondent that the court conclude that the application was brought to frustrate the respondent in pursuing its claims. The law in this regard is set out by Roper J. in Millward v Glazer 1950 (3) SA 547 (WLD) at p 551B as follows:

‘If the facts were such as to justify the inference that the motive of the applicant in filing her petition was not to bring about the respondent’s insolvency for its own sake but to harass or oppress the respondent or (as it was put in King v. Henderson  (1898, A.C. 720)) “fraudulently to defeat her rights” by stifling her action for damages, there is in my view no doubt that the Court would be entitled to discharge the provisional order either in the exercise of the discretion conferred upon it by sec. 12 of the Insolvency Act or by virtue of its inherent jurisdiction to prevent abuse of its process (see, e.g., Ex parte Griffin: in re Adams  (L.R. 12 Ch.D. 480); Berman v. Brimacombe  (1925, T.P.D. 548); Borchers v. Kaehne (1933, S.W.A. 105);  Amod v. Khan  (1947 (1), S.A.L.R. 150 (N.P.D.). It must however appear to the Court that the motive of oppression was either the sole or at least the predominant motive actuating the applicant, …. 

[44] That this entire application may well constitute such an abuse of this court’s process, the applicant having as his predominant motive the defeating of the other claims, is fortified by the facts set out below.

[45] Technical Eminence is a close corporation with its sole member being Mr Cumming’s wife, which owes the Respondent  R 214 853.52. Mr Cumming’s previous attorney advised Mr Cumming that he could receive the R 214 853.52 from Technical Eminence, which he did. He took the money. This then purported to reduce his loan account to R 99 647.60 (R314 501.12 - R214 853.52). The aforegoing was confirmed in his previous’ attorneys’ letter dated 20 May 2015. Mr Cumming deposed to the founding affidavit in which he stated that he had been advised, by his new and current attorneys, that the set-off of amounts, not due between immediate parties was not legally competent and that Technical Eminence was thus still indebted to the Respondent in the amount of R214 853.52 and that his loan account was still R 314 501.12. So far so good, but, Mr Cumming whilst in receipt of the respondent’s R214 853.52, argued that the respondent was factually insolvent in that its liabilities exceeded its assets by R 2140. Mr Cumming after receiving the correct advice form his current attorneys, did not repay the allegedly erroneously set-off amount back to the Respondent which amount, on his own version, he has no entitlement to. If that payment were made it would defeat his claim that Respondent is factually insolvent.

[46] When the Respondent, who experienced cash flow difficulties, by virtue of, inter alia, the withholding of the amount of R214 853.52 applied to the Bank for financing, Mr Pretorius was forwarded emails (dated 2 June 2015) in which Mr Cumming had advised the Bank that he intended applying for the winding up of the Respondent. Needless to say, the application for financial assistance was refused. It is difficult not to conclude that Mr Cumming’s advices to the potential lender were intended to advance his objective of putting the Respondent into liquidation so that it was unlikely to pursue its claims against the entities related to  Mr Cumming and his wife. I must also take account of the long duration of this matter and the many additional affidavits filed.

[47] In addition to finding that there exists a bona fide dispute in respect of the debt, I would also refuse this application on the basis that it constitutes an abuse of the Court’s process.

 

DISCRETION

[48] The facts of this case would, in my view, qualify as exceptional and I would accordingly also exercise my discretion in favour of the Respondent in refusing this application, if it were found that I am wrong and that the Respondent is in fact insolvent. My reasons for so exercising my discretion are that the Respondent has, since the launching of the application in October of 2015 been paying its debts. The winding up order would be effective from October 2015. This fact, in and of itself, might well have sufficient force for this narrow discretion the court has in refusing a winding up order in the face of insolvency, to be exercised in favour of the Respondent. I do, however, need not pronounce on this as I have concluded, on all the other grounds, that the application should be refused.

 

ORDER

[63] I accordingly grant the following order:

‘The application is dismissed with costs’

 

___________________________

I OPPERMAN

Judge of the High Court

Gauteng Local Division, Johannesburg

 

Heard: 20 April 2017

Judgment delivered: 19 May 2017

Appearances:

For Applicant: Adv E Theron SC

Instructed by:  Norton Rose Fulbright SA Inc

For Respondent: Adv JP Coetzee SC

Instructed by: Mills & Groenewald

 

[1] See the discussion by Joffe J of “The Law Relating to the Content of Affidavits Generally” under that sub-heading in Swissborough Diamond Mines (Pty) Ltd and Others v Government of the Republic of South Africa and Others 1999 (2) SA 279 (T)

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