Absa Bank Ltd v Hammerle Group

• Jurisdiction: South Africa
• Judge: Brand JA, Maya JA, Cachalia JA, Mbha JA and Mhlantla JA
• Judgment Date: 26 March 2015
• Citation: 2015 (5) SA 215 (SCA)
• Docket Number: 205/14 [2015] ZASCA 43
• Hearing Date: 13 March 2015
• Counsel: FH Terblanche SC (with HR Fourie) for the appellant. SL Joseph SC (with HJ Fisher) for the respondent.
• Court: Supreme Court of Appeal

Mbha JA (Brand JA, Maya JA, Cachalia JA and Mhlantla JA concurring):

D [1] The appellant launched an application in the North Gauteng High Court, Pretoria, for the winding-up of the respondent on the ground, inter alia, that the respondent was commercially insolvent and unable to pay its debts as envisaged in s 345 of the Companies Act 61 of 1973 (the Act). The court a quo (per Mabuse J) dismissed the application on the basis that (a) part of the debt giving rise to the application was E extinguished by prescription; and (b) the remainder thereof was not yet due and payable as it had, by agreement between the parties, been subordinated to the debts of other creditors of the respondent. This appeal against those findings is with leave of the court a quo.

F [2] The relevant background to the dispute can be summarised as follows. Pursuant to a loan agreement concluded between the parties on 6 December 2007 (the loan agreement) the appellant advanced a loan of R4 million which, together with interest thereon, would be repayable in 60 instalments of R96 045,70 from 1 January 2008. The purpose of the loan was to finance the respondent and its business. The indebtedness G arising under this loan agreement was secured by a Special and General Notarial Covering Bond (the bond) which was registered by the Registrar of Deeds in favour of the appellant on 13 December 2007. In terms of clause 2 of the bond, the respondent bound certain of its movable property specially and generally as security for its obligations to the H appellant.

[3] On 19 November 2007 the appellant, the respondent, Mfiso Investments (Pty) Ltd and Uwe Christian Hammerle concluded a Subscription and Shareholders' Agreement (the subscription agreement) in terms of which the appellant loaned and advanced to the respondent the sum I of R10 million. The purpose of this loan, which took on the form of a shareholders' loan, was to enable the respondent to fund the acquisition of the respondent's business and assets. By virtue thereof the appellant acquired a minority shareholding in the respondent. In terms of the subscription agreement the loan was repayable in 60 equal monthly instalments, consisting of the capital repayment amount and interest, J and became repayable immediately under certain circumstances, for

Mbha JA (Brand JA, Maya JA, Cachalia JA and Mhlantla JA concurring)

example, if the respondent breached any material term or condition of A the agreement.

[4] The appellant averred in the founding affidavit that as at 31 May 2011 the respondent was indebted to it in the total amount of R21 005 197,46. This amount comprised (a) R4 693 437,78 owing B under the loan agreement and the notarial bond; and (b) R16 311 759,68 arising from the subscription agreement. The respondent denied in the answering affidavit that it was indebted to the appellant and raised two defences. First, that the appellant's claim under the loan agreement had prescribed and consequently that the debt had become extinguished. Secondly, that the loan advanced to the respondent in C terms of the subscription agreement was, in terms of clause 11.3.3 thereof, subordinated in favour of the respondent's creditors and, as the respondent was indebted to its creditors in the amount of R2 205 657,07, the amount claimed by the appellant was not due and payable.

[5] Insofar as the defence based on the subordination clause is D concerned, reliance was placed on a judgment dated 15 October 2010 under case No 14203/2010 (the first liquidation application). In his judgment Blieden J dismissed the appellant's application to wind up the respondent inter alia, on the basis that the amount claimed under the subscription agreement was not due and payable as it was subordinated to other E creditors to whom the respondent owed R452 513,28 in total at the time. The respondent averred accordingly that, regard being had to the subordination clause in the subscription agreement, the issue as to whether or not any amounts were due and payable under this agreement was res judicata and...