IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

CASE NO: 19075/11

In the matter between:

and

WEST CITY PRECINCT PROPERTIES (PTY) LTD

THE COMPANIES & INTELLECTUAL

and

ANGLO IRISH BANK CORPORATION LTD

AND
CASE NO: 15584/11
In the matter between:
ANGLO IRISH BANK CORPORATION LTD

and

WEST CITY PRECINCT PROPERTIES (PTY) LTD

JUDGMENT: 18 APRIL 2012

TRAVERSO, DJP:

3.1. West City is indebted to the Bank in a sum of more than R219 000 000,00.
3.2. The sum is due, owing and unpaid.
3.3. West City, by its own admission is unable to pay its indebtedness from its available resources.
3.4. West City's principle assets are sectional title units which are all mortgaged to the Bank.
3.5. The rental income and revenues from the letting of these properties has been ceded to the Bank as further security for the sum owing.
3.6. Gormley relies on certain valuations of the properties which purportedly show that they exceed the value of the liabilities of West City. On Gormley's own say so these values can only be achieved over a period of 3 to 5 years. The only logical inference of this is that the present day value of its assets is less than its liabilities and that it is therefore insolvent.

Act.

6.3  Financially distressed is defined in Section 128(1 )(f) as follows:

"Application and definitions applicable to Chapter.-
(1) In this Chapter-
(f)   "financially distressed", in reference to a particular company at any particular time, means that -

I will return to this aspect later.

"15 Rents and Additional Security
15.1. Should the mortgagee give his consent to the letting of the properties as additional security for any sum that may be claimable under this bond, the mortgagor hereby cedes and assigns to the mortgagee all rents and revenues which may accrue in respect of the properties and he hereby appoints the mortgagee irrevocably and in rem suam with power of substitution at the mortgagee's option to deal in any way with the letting of the properties and to recover the rents and revenue therefrom and to cancel or renew and enter into new leases in such manner as the mortgagee may deem fit with power to take proceedings against tenants in default or ejectment and for the recovery of any amounts due by them, and to appoint agents and attorneys for this purposes provided always that these powers shall not be exercised so long as all conditions are complied with.
15.2. The mortgagee shall be entitled to charge not exceeding 10% of the gross amount of rent and revenue collected and shall deduct such commission from the amount collected before crediting the account of the mortgagor."

The application for business rescue is dismissed with costs, which costs shall include the costs of two Counsel;

(a)  the respondent is placed under provisional liquidation  in the  hands  of the  Master of Western Cape High Court, who is directed to appoint a provisional liquidator as a matter of urgency;

(c) service of this Order shall be effected:

(v) by service of all known creditors of the respondent by registered mail with claims in excess of R5 000,00.
(d)  the costs of this application shall be costs in the liquidation.

TRAVERSO, DJP