IN THE HIGH COURT OF SOUTH AFRICA 
GAUTENG DIVISION, PRETORIA

CASE NO: 17069/2013
DATE: 2017-21-07
Reportable: NO
Of interest to other judges: NO
Revised

In the matter between:

STANDARD BANK OF SOUTH AFRICA LTD                                   APPLICANT
And
BEST CARE MEDICAL SUPPLIES CC                                            DEFENDANT
ALLEN NGWENYA                                                        SECOND RESPONDENT
HENRY NGWENYA                                                            THIRD RESPONDENT
CAIN SIBANDA                                                              FOURTH RESPONDENT
VICTORIA MABUSELA                                                       FIFTH RESPONDENT
NELLIE NGWENYA                                                            SIXTH RESPONDENT

REASONS

TLHAPI J

[1] This application was launched on 13 February 2013 and, the employees consisting of the second to the sixth respondents were joined at their own instance on 1 December 2014.A Rule Nisi issued on 3 December 2014, provisionally winding up the first respondent was made final by me on 30 October 2015 and my reasons are given below. Initially this application was opposed.
[2] This application was heard together with other applications being (i) for the postponement of an application brought by the second to the sixth respondents for the Business Rescue of the first respondent, (Case Number 8368/2015) and, (ii) the application to have the estate of Ms Naomi Ngwenya finally sequestrated (Case Number 52390/14). Having dismissed the application for a postponement I proceeded to hear the application for business rescue which application was dismissed. It is therefore necessary to read my reasons in these applications together with reasons now given.

[3] The application for the winding up of the first respondent was based on the following grounds:
1. An inability to pay its debts as provided for in sections 69(a) and (c) of the Closed Corporations Act 69 of 1984  ('the Act');
2. That it was commercially insolvent; and
3. That it was just and equitable that it be wound up.
Section 69 the Act provides:
"(1) For the purposes of section 68(c) a corporation shall be deemed to be unable to pay its debts if-
(a)	a creditor, by cession or otherwise, to whom the corporation is indebted in a sum of not less that two hundred rand the 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)	any process issued on a judgment, decree or order of any court in favour of a creditor or the corporation is returned by a sheriff, or a messenger of a magistrate's court, with an endorsement that he has not found sufficient disposable property to satisfy the judgment, decree or order, or that any disposable property found did not upon sale satisfy such process; or
(c)	it is proved to the satisfaction of the Court that the corporation is unable to pay its debts"

[4] When the application for Business Rescue was launched, which application was opposed by the applicant, leave to launch the Business Rescue was granted after the parties had concluded an agreement which was made an order of court on 14 August 2013 in the following terms:

"4.The first applicant undertakes to pay the full outstanding arrears in respect of the following accounts ("the mortgage loans") on or before 30 November 2013:
4.1. Account 320437582 (current outstanding amount as at 13 August 2013 R202 992.50)
4.2. Account 211591827 (current outstanding amount as at 13 August 2013 amount R207 769.78);
4.3. Account 210486406 (current outstanding amount as at 13 August 2013 amount R1 363 792.38);
4.4. Account 219502935 (current outstanding amount as at 13 August 2013 amount R108 018.84);
5 For the purpose of quantifying the full outstanding arrears, the Applicants agree that the Respondent may issue certificates of balance on the abovementioned accounts, signed by any manager of the respondent, whose authority it shall not be required to prove.
6. The applicant undertakes to pay the monthly instalments in respect of the accounts referred to in paragraph 4 above monthly after October 2013;
7. The first applicant undertakes to pay the full outstanding amount in respect of the overdraft account in four equal monthly payments, which payment will be made to the respondent on the last business days of October, November, December 2013 and January 2014.
8. For the purpose of quantifying the full outstanding balance on the overdraft account, the applicants agree that the respondent may issue a certificate of balance, signed by any manager of the respondent, whose authority it shall not be required to prove.
9. The applicant undertakes to settle the full outstanding balances in respect of the mortgage loans in respect of the accounts referred to in 4 above on or before 30 April 2014 and for the purpose of quantifying such amounts the respondent may provide a certificate of balance as described above supra;
10. Provided that the first applicant complies with all its obligations in terms of the settlement agreement, the respondent undertakes to withdraw the winding-up application;
11.The parties agree that the winding-up application, currently set down for 14 October 2013 will be removed from the roll and be re-enrolled on the unopposed roll of 10 December 2013;
12. In the event of the applicant complying with its undertaking as at the date referred to supra, the winding up application will be postpone sine die.
13. In the event that the applicant fails to comply with the provisions of the settlement agreement on the due date for payment thereof, the applicants agree to withdraw their opposition and counter application to the respondent's winding up application and the respondent will be entitled to set the winding up application down on the unopposed motion roll."

Furthermore, in terms of this agreement opposition to the main application was withdrawn.

[5] In both the Business Rescue and sequestration applications the indebtedness of the first respondent to the applicant is admitted. Furthermore, in both applications there is admission that there were trade creditors and it is common cause that the first respondent had also defaulted in as far as they were concerned. Some of the creditors had issued summons against the first respondent being the Small Enterprise Agency SOC ltd ("SEFA") under case 64305/2013 in excess of R5 million; Barlow World Logistics in case 12644/2013 with judgment taken against the first respondent in the amount of R160 732.00; South African Receiver of Revenue R58 624.50 and this creditors mentioned in the application launched by the employees totalling R9 896 053.75.

[6] It was common cause that the first respondent failed to comply with its obligations under the agreement mentioned above. It is further common cause that the indebtedness by the first respondent increased further as a result of its default after 31 January 2014 in respect of the overdraft facilities and 30 April 2014 on the mortgage loans. The respondent was given additional indulgences where the application was postponed to enable the answering affidavit to this application. Then there was the launch of the business rescue application and further extensions of the rule. The first respondent made certain payments, however, these did not meet the undertaking as given in the agreement. In consideration of all the above facts and with the first respondent having defaulted, the full amount owing became due and payable. The first respondent had withdrawn its opposition, the Business Rescue Application had been dismissed. In terms of section 69 of the Close Corporations Act, the respondent is deemed to be unable to pay its debts, in other words the first respondent was commercially insolvent, hence the order confirming the rule nisi issued on 3 December 2014.

(JUDGE OF THE HIGH COURT)