FirstRand Bank Limited v Vecto Trade 68 (Pty) Ltd

• Jurisdiction: South Africa
• Judge: DH Zondi J
• Judgment Date: 04 March 2014
• Docket Number: 17435/2013
• Court: Western Cape High Court, Cape Town
• Hearing Date: 19 February 2014
• Citation: 2014 JDR 0414 (WCC)

Zondi, J:

[1]

This is an application for the provisional winding-up of the respondent on the grounds that it is unable to pay its debts within the meaning of s 345 (1) (a) or is deemed to be unable to pay its debts in terms of subpara (c) as read with s 344 (f) of the Companies Act 61 of 1973 ("the Act") alternatively that the winding-up of the respondent is just and equitable as contemplated in s 344 (h) of the Act.

[2]

In terms of Schedule 5, item 9 (1) of the Companies Act 71 of 2008 (the New Companies Act) the Companies Act of 1973 (the Old Companies Act) continues to apply with respect to the winding-up and liquidation of companies.

2014 JDR 0414 p2

Zondi, J

[3]

The winding-up of the respondent is sought on the basis that the respondent is indebted to the applicant in the amount of R8 453 401.94 plus interest on the said amount at the rate of 7% per annum from 13 September 2013 to the date of payment. It is alleged that such amount is due and payable. The applicant has filed a certificate of indebtedness to prove the amount outstanding.

[4]

It is common cause that on or about 20 March 2008 the parties entered into a written loan agreement (first loan agreement) in terms of which the applicant lent and advanced R12 million to the respondent. When the respondent struggled to repay the loan in accordance with the terms of the first loan agreement the parties concluded a further loan agreement (the second loan agreement) on or about 20 June 2009. The respondent was obliged to repay the loan and interest on it in equal monthly instalments and in the event of the respondent's default the applicant would be entitled to withdraw the first loan agreement and claim immediate repayment of the full outstanding balance, or terminate the first loan agreement without affecting any of its rights. The loan was secured by inter alia, the registration of a covering bond in favour of the applicant over erf 25070 and erf 25071 belonging to the respondent. It is also not disputed that in breach of the agreement the respondent has on numerous occasions failed to make payment to the applicant on the relevant due dates. The respondent's failure to pay the debt in accordance with the terms of the loan prompted the applicant to cause to be served on the respondent a statutory demand in terms of s 345(1) on 1 August 2013 which, it is common cause, the respondent failed to comply with. It is clear from the papers that the respondent does not have liquid assets available with which to meet the applicant's claim and it is for this reason that it decided to sell one of its properties so as to raise the necessary funds.

2014 JDR 0414 p3

Zondi, J

[5]

The applicant launched this application for the winding-up of the respondent, contending that the respondent is unable to repay its debts or that it is just and equitable that the respondent be wound up.

[6]

The respondent opposes the application and has filed an answering affidavit deposed to by Mr Hauptfleisch, who describes himself as a shareholder and the creditor of the respondent. He says he is also a director of Daybreak Properties 68 (Pty) Ltd which is another creditor of the respondent. Essentially the purpose of his affidavit is to show that the other creditors of the respondent do not support the liquidation of the respondent as in their view the liquidation will cause them prejudice. He avers that "in the event of the properties being sold on the open market and in the ordinary course as opposed to being sold upon the winding-up" the respondent's properties will fetch a proper market related price and all the creditors will be paid out of the...