Fourie and Another v Housezero Construction Pty (Ltd)
| Jurisdiction | http://justis.com/jurisdiction/166,South Africa |
| Judge | TA Maumela J |
| Judgment Date | 26 January 2022 |
| Court | North Gauteng High Court, Pretoria |
| Hearing Date | 21 December 2021 |
| Docket Number | 43996/2021 |
Maumela J:
This matter came before court in the urgent roll. The Applicant seeks an order:
Declaring that the First, Second, and Sixth Respondents be placed under final liquidation in the hands of the Master of the High Court and a return date be issued, calling upon any interested party to show cause why a final liquidation order should not be made.
That in the alternative, the First, Second, and Sixth Respondents be placed under provisional liquidation in the hands of the Master of the High Court and a return date be issued, calling upon any interested party to show cause why a final liquidation order should not be made.
That costs be costs in the winding up of the First, Second, and Sixth Respondents
The Michelle Bosman deposed on behalf of the Second Applicant, albeit on the strength of a Special Power of Attorney granting her authority to act on behalf of the Second Applicant who currently finds himself abroad.
BACKGROUND.
The Applicants, together with others aver that they fell victim to the unscrupulous business practices of the First, Second, and Sixth Respondents with the Third and the Fourth Respondents at the helm of the companies. Due to the acts of the Respondents, the First Applicant, who was later joined by the Second Applicant sought an interim interdict pending the institution of liquidation proceedings.
On the 16th of September 2021, they launched an application for the liquidation and/or in the alternative, provisional liquidation of the First, Second, and Sixth Respondents based on the facts set out in the initial Founding Affidavit. The Applicants contended that it will be just and equitable to grant the relief sought.
Maumela J
The liquidation of the Respondent companies was previously sought under this case number on the ordinary roll. The Respondents did not file any opposing papers in the matter. The matter was set down on the unopposed roll for 30 November 2021. On the 27th of November 2021, the Respondent sought to oppose the matter and it was removed by agreement before Acting Justice Jordaan on the 30th of November 2021. However, the Respondents still did not file any answering affidavit.
The Applicants contended that the Respondent companies and specifically the 2nd Respondent through the conduct of its director Yehoram Gur Arie, (the 4th Respondent), have falsely represented to the Applicants and various unsuspecting members of the public that they are capable of delivering modular type homes within a very short space of time; twelve weeks to be specific. The prospective purchasers were led to believe that the houses are ready for delivery and is completed and therefore that payment of the purchase price is due and thus demanded. After payment, the houses were not delivered.
This was confirmed during a Carte Blanche Expose aired on the 21st of November 2021. The 4th Respondent once again made similar promises in an undercover operation, and on the same day, the legal representative of House Zero made an offer to the 2nd Applicant. The Applicants argue that this conduct amounts to an act of insolvency in terms of section 8 of the Insolvency Act and that it justifies the liquidation application under section 344 of the Companies Act.
It was submitted that the grounds upon which the liquidation is sought are set out in the papers. On the 29th of November 2021, an enquiry was publicly made to the "House Zero" Instagram page and House Zero still replied, quoting a price for the House. An inference was drawn to the effect that House Zero continued unabated to trade and it portrayed a false narrative in spite of the pending litigation and the serious averments.
The Applicants argue that this rendered the matter urgent as it is in the public interest, (being just and equitable), to provisionally liquidate the Respondent companies and to remove their assets from them and to place them in the hands of a liquidator, and thus preventing them from trading any further.
Maumela J
RE: URGENCY.
The Applicants submitted that given the time line of events as has become crystallised since the airing of a Carte blanche episode of the 21st of November 2021, it has become justified to launch this application on an urgent basis. They made the point that it is trite law that once it has been shown (on a prima facie basis that it would be just and equitable to provisionally liquidate the Respondent companies, the matter is inherently urgent. It could not have been expected of the Applicants to act sooner on urgency since the notion of urgency only eventuated as from the 21st of November 2021.
Initially, the Applicants sought a wide range of reliefs on an urgent basis. In that regard, they sat in order amongst others providing for the following:
Dispensing with the forms, service and time periods prescribed in terms of the Uniform Rules of the High Court of South Africa and directing that the matter be heard as one of extreme urgency in terms of Rule 6(12) of the Rules.
The incorporation of the affidavit deposed to by Michele Bosman under the above stated case number on 26 August 2021.
The final liquidation of the first, second, fifth and sixth Respondents, alternatively its provisional liquidation (coupled with a rule nisi) and the assets of those Respondents be placed in the hands of the Master of this Court.
The piercing of the corporate veil in terms of section 20(9) of the Companies Act, vis a vis the third and fourth Respondents in as far their conduct as directors of the above stated company Respondents renders it just to do so.
That costs be costs in the winding up of the First, Second, Fifth and Sixth Respondents.
The newly uploaded draft order on behalf of the Applicants, which is in accordance with the submissions reflects that the only reliefs persisted with on an urgent basis are-
The positive consideration of the matter as one of urgency and
The provisional liquidation of the first, second, fifth and sixth Respondents.
Maumela J
The issues in this matter can be narrowed down to:
The urgency of the matter.
Whether the Applicants have shown prima facie that the Respondent companies are insolvent.
whether it is just and equitable to provisionally liquidate those Respondents.
The following were presented to be the basis for seeking the provisional liquidation of the First, Second, Fifth and Sixth Respondents:
The Applicants and aggrieved persons are creditors of the Respondents jointly or individually which debts have not been disputed by the Respondents but rather acknowledged.
That it is just and equitable to do so.
That the Respondent is unable to pay its debts, as and when they fall due and
That the Respondent is commercially insolvent.
The Applicants submit that the above can be amplified as follows:
The Respondents have solicited payments from the Applicants and aggrieved persons under false pretences to the tune of R8 638 279.63.
The First to Fourth Respondents contracted with the Applicants and aggrieved persons and the funds were paid into the accounts of the Second, Fifth and Sixth Respondents.
The Respondents have failed dismally to maintain the agreements which were reached and against the backdrop of the versions provided by each Applicant and aggrieved person were evidently aware that they could not and would not deliver as falsely agreed.
It is apparent that not only are the Respondents committing fraud against members of the public but also that the Respondents substratum have fallen away and that they cannot deliver on these existing or new projects.
The Respondents have committed an act and various other acts of insolvency.
Despite the above the Respondents via the Fourth Respondents has still represented to a consumer that they can deliver within 12 weeks and
Despite the above, the Respondents continue to trade and induce members of the public in a fashion similar to that of
Maumela J
the Applicants and aggrieved parties.
Under paragraph 10 of the Implementation of the Judge President's Practice Directive dated 11 June 2021 for the Urgent court of 17th December 2021 (16h00 to 24th December 2021, where the following directive stands noted: " ..urgent court is not intended to hear complex factual and/or legal issues scattered over hundreds of pages and which may take a long time to consider and finalize…Such complex cases may be removed from the roll and the parties may be referred to the Deputy Judge president to be allocated to a special court at some time in future…".
The Applicant conceded that according to the indexed bundles, the papers filed and uploaded by the parties exceed 500 pages. However, they submitted that the issues to be considered by this Court narrow the ambit of the papers to be considered drastically and that Counsel confines his submissions in line with the above. The court may exercise its discretion and remove the matter together with a referral thereof to the Deputy Judge President with a view to be allocated a special court at some time in future. The Applicant further submits that in the event where the matter is removed, the issue of costs should be reserved or that costs be ordered to be costs in the cause.
Nonetheless, the Applicants argue that the court should consider this application on an urgent basis. To that end, heads here in are set out under the following subheadings:
Locus Standi of the Applicants;
Urgency and
The Basis for the Liquidation.
LOCUS STANDI.
The Applicants submit that they...
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