Commonwealth Shippers Ltd v Mayland Properties (Pty) Ltd (United Dress Fabrics (Pty) Ltd and Another Intervening)

JurisdictionSouth Africa
JudgeMilne J
Judgment Date13 September 1977
Citation1978 (1) SA 70 (D)
Hearing Date05 August 1977
CourtDurban and Coast Local Division

Milne, J.:

This is an application for the winding up of the respondent company. The applicant, in terms of the notice of motion, sought a final winding up order, but Mr. Morris, who appeared for the applicant, asked only for a provisional winding up order in the usual form.

A The application is opposed, not only by the respondent, but also by two intervening creditors of the respondent. The applicant relies upon the provisions of sec. 344 (e) and (f) of the Companies Act, 61 of 1973. A large portion of the papers was devoted to the question as to whether or not the company was, in fact, unable to pay its debts within the meaning B of sec. 345 of the Act. I think, however, that it is quite clear that the company has no funds within which to meet current demands and it is unable to pay its debts,

"... in the sense of being unable to meet the current demands upon it, its day to day liabilities in the ordinary course of its business."

(per CANEY, J., in Rosenbach & Co. (Pty.) Ltd. v Singh's Bazaars (Pty.) C Ltd., 1962 (4) SA 593 (D) at p. 597). Sec. 345 (1) (c) is the rather curious provision to the effect that a company shall be deemed to be unable to pay its debts if it is proved that the company is unable to pay its debts. Sub-sec. (2) however, provides that,

"in determining for the purposes of sub-sec. (1), whether a company is unable to pay its debts... the Court shall also take into account the D contingent and prospective liabilities of the company."

There are some disputes of fact as to the financial position of the respondent but, even taking it at its best for the respondent, the highest figure at which the respondent puts its assets is the figure of R427 000, and it is clear that the respondent's liabilities are in excess of R500 000 if the applicant's claim is included. Thus, in para. 6 (d) of the E affidavit of Ismail Ebrahim Mayat, filed on behalf of the respondent, the following passage occurs:

F "Excluding the applicant's claim against the respondent, and including the bond in the sum of R165 000 which is referred to in para. 7 of Klugman's affidavit, the respondent's liabilities are in the region of R425 000."

The applicant's claim, according to the affidavit of Klugman, is for the sum of R81 372,81. Thus, if the applicant's claim is included, then, on the respondent's own estimation of its liabilities, the total is in the vicinity of R506 000. Indeed, Mr. Friedman, who appeared for the intervening creditors, and who delivered the main argument in opposition to the relief sought by the applicant, confined his argument to one G question, namely that the applicant had failed to establish that it is a creditor of the respondent. Mr. Freemantle, who appeared for the respondent, adopted the argument advanced by Mr. Friedman, but contended somewhat faintly that the applicant had not satisfied the Court that the H respondent was unable to pay. He conceded, however, that, on the balance sheet which was annexed to the applicant's launching affidavit, the company is undeniably insolvent and, although he submitted that the company is not without a source of funds, it seems to me quite clear that its current revenue is wholly insufficient to enable it to pay its debts, nor does it have readily available sources from which it is able to make such payment.

I turn therefore to consider the arguments advanced by Mr. Friedman. It was submitted that the applicant had failed to prove that it is a creditor of the respondent, alternatively, that it...

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29 practice notes
  • Kalil v Decotex (Pty) Ltd and Another
    • South Africa
    • Invalid date
    ...(Pty) Ltd v Transvaal Gold Rolling (Pty) Ltd 1979 (1) SA 265 (W) at 269; Commonwealth Shippers Ltd v I Mayland Properties (Pty) Ltd 1978 (1) SA 70 (D) at 72. Where the company discharges the onus, the application should fail even if it appears that the company is nevertheless unable to pay ......
  • Pilot Freight (Pty) Ltd v Von Landsberg Trading (Pty) Ltd
    • South Africa
    • Gauteng Local Division, Johannesburg
    • 25 July 2014
    ...dictum at 347 applied Commonwealth Shippers Ltd v Mayland Properties (Pty) Ltd (United Dress Fabrics (Pty) Ltd and Another Intervening) 1978 (1) SA 70 (D): referred Corporate Money Managers (Pty) Ltd and Others v Panamo Properties 49 (Pty) Ltd 2013 (1) SA 522 (GNP): referred to F EB Steam C......
  • Pilot Freight (Pty) Ltd v Von Landsberg Trading (Pty) Ltd
    • South Africa
    • Invalid date
    ...dictum at 347 applied Commonwealth Shippers Ltd v Mayland Properties (Pty) Ltd (United Dress Fabrics (Pty) Ltd and Another Intervening) 1978 (1) SA 70 (D): referred Corporate Money Managers (Pty) Ltd and Others v Panamo Properties 49 (Pty) Ltd 2013 (1) SA 522 (GNP): referred to F EB Steam C......
  • Ter Beek v United Resources CC an Another
    • South Africa
    • Invalid date
    ...1978 (2) SA 481 (T) Commonwealth Shippers Ltd v Mayland Properties (Pty) Ltd (United Dress Fabrics (Pty) Ltd and Another Intervening) 1978 (1) SA 70 (D) Dawnford Investments CC and Another v Schuurman 1994 (2) SA 412 (N) Essa v Ritter and Louw 1930 SWA 92 H F & C Building Construction Co (P......
  • Request a trial to view additional results
29 cases
  • Kalil v Decotex (Pty) Ltd and Another
    • South Africa
    • Invalid date
    ...(Pty) Ltd v Transvaal Gold Rolling (Pty) Ltd 1979 (1) SA 265 (W) at 269; Commonwealth Shippers Ltd v I Mayland Properties (Pty) Ltd 1978 (1) SA 70 (D) at 72. Where the company discharges the onus, the application should fail even if it appears that the company is nevertheless unable to pay ......
  • Pilot Freight (Pty) Ltd v Von Landsberg Trading (Pty) Ltd
    • South Africa
    • Gauteng Local Division, Johannesburg
    • 25 July 2014
    ...dictum at 347 applied Commonwealth Shippers Ltd v Mayland Properties (Pty) Ltd (United Dress Fabrics (Pty) Ltd and Another Intervening) 1978 (1) SA 70 (D): referred Corporate Money Managers (Pty) Ltd and Others v Panamo Properties 49 (Pty) Ltd 2013 (1) SA 522 (GNP): referred to F EB Steam C......
  • Pilot Freight (Pty) Ltd v Von Landsberg Trading (Pty) Ltd
    • South Africa
    • Invalid date
    ...dictum at 347 applied Commonwealth Shippers Ltd v Mayland Properties (Pty) Ltd (United Dress Fabrics (Pty) Ltd and Another Intervening) 1978 (1) SA 70 (D): referred Corporate Money Managers (Pty) Ltd and Others v Panamo Properties 49 (Pty) Ltd 2013 (1) SA 522 (GNP): referred to F EB Steam C......
  • Ter Beek v United Resources CC an Another
    • South Africa
    • Invalid date
    ...1978 (2) SA 481 (T) Commonwealth Shippers Ltd v Mayland Properties (Pty) Ltd (United Dress Fabrics (Pty) Ltd and Another Intervening) 1978 (1) SA 70 (D) Dawnford Investments CC and Another v Schuurman 1994 (2) SA 412 (N) Essa v Ritter and Louw 1930 SWA 92 H F & C Building Construction Co (P......
  • Request a trial to view additional results

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