O'Grady and another v Botha NO and others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Roelofse AJ
• Judgment Date: 19 June 2023
• Citation: 2023 JDR 2156 (MN)
• Hearing Date: 24 May 2023
• Docket Number: 3809/22
• Court: Mpumalanga Division (Main Seat)

Roelofse AJ:

INTRODUCTION:

[1]

North Shore Trading (Pty) Ltd ("North Shore") is in liquidation. The first to third respondents are North Shore's joint liquidators ("the liquidators"). The fourth respondent is Trifert (Pty) Ltd ("Trifert"). Trifert was previously known as Argon Moosrivier (Pty) Ltd) ("Argon"). Trifert is an alleged creditor in North Shore's estate. The first applicant is North Shore's sole member. The second applicant is an proven creditor in North Shore's estate. [1]

[2]

The liquidators accepted Trifert's claim against North Shore's estate. North Shore disputes that North Shore's alleged indebtedness to Trifert and therefore approached court for an order setting aside the liquidators' decision to accept/admit

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Trifert's claim in the amount of R 5 829 000-00 and for an order declaring that Trifert's claim against North Shore in the aforesaid amount has prescribed.

[3]

The applicant set out the nature and purpose of their application as follows: [2]

'14

The purpose of this application is to review and set aside the decision of the liquidators to admit the claim of Argon [Trifert] in the sum of R 5,829,000.00 In terms of section 387 (4) [3] of the Companies Act 61 of 1973 ("the Old Companies Act").

. . .

15

The applicants also seek an order declaring that the Argon [Trifert] claim has prescribed. To this end the applicants rely on section 387(4) of the Old Companies Act and read with, inter alia, section 21 of the Superior Courts Act 10 of 2013.'

DISCUSSION:

[4]

I consider the declaratory order that is sought that Trifert's claim has prescribed first because if it is found that the Trifert claim has prescribed, the liquidators' decision to accept or admit Trifert's claim is of no consequence because Trifert's claim is incapable of proof or enforcement against North Shore's estate.

Prescription

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[5]

I commence under this heading with a short explanation of the concept of prescription and the scrutiny that it has withstood so that the context within which I came to my conclusion is perhaps better understood.

[6]

A debtor is expected to purge his or her debt when it becomes due. A creditor has a recourse against a debtor who fails in this obligation. However, a creditor's right to take recourse is subject to a statutory time limitation. The Statute that imposes a time limitation upon the enforcement of a debt by a creditor is the Prescription Act 68 of 1969 (the "Prescription Act"). The Prescription Act lays down prescription periods depending upon the nature of the debt. [4] If a creditor misses the date of the prescription of the debt, the debt is extinguished and the creditor has no enforceable claim in respect of the prescribed debt. This seems unfair but time limitations for claims have survived Constitutional scrutiny. In Road Accident Fund and Another v Mdeyide 2011 (2) SA 26 (CC) at para. 15, it was held:

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'This Court has repeatedly emphasised the vital role time limits play in bringing certainty and stability to social and legal affairs and maintaining the quality of adjudication. Without prescription periods, legal disputes would have the potential to be drawn out for indefinite periods of time bringing about prolonged uncertainty to the parties to the dispute. The quality of adjudication by courts is likely to suffer as time passes, because evidence may have become lost, witnesses may no longer be available to testify, or their recollection of events may have faded. The quality of adjudication is central to the rule of law. For the law to be respected, decisions of courts must be given as soon as possible after the events giving rise to disputes and must follow from sound reasoning, based on the best available evidence.'

[7]

It is undisputed that Argon [now Trifert] sold and delivered goods to North Shore on credit in terms of a written credit agreement [5] and therefore a debtor of Trifert, albeit that the applicants dispute the amount of the debt.

[8]

The last invoice was issued by Argon [now Trifert] on 31 December 2017. [6] Argon's statement, dated 30 April 2018, records invoices that were issued to North Shore and shows that the amount due to Argon amounted to R 5 687 173.48.

[9]

Clause 9.1 of the credit agreement provides that North Shore was obliged to pay Argon the purchase price of the goods delivered within 30 days of delivery. The last invoice that is recorded on the statement is dated 30 April 2018. Therefore, North Shore had to pay the last invoice on or about 30 May 2018. This North Shore did not do, hence Trifert's guest to prove its claim against North Shore's insolvent estate. North Shore disputes the amount of its liability to Trifert. It alleges that the last

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official and/or recorded delivery of products by Argon [now Trifert] occurred on or about 5 November 2015, alternatively 17 February 2017.

[10]

Trifert persists that North Shore is indebted to it on the basis that Argon's [now Tifert's] indebtedness was admitted by North Shore in its application for business rescue [7] where the first applicant stated that Argon [now Trifert] is amongst . . . "a list of [North Shore's] creditors and approximate amounts of liabilities to such creditors". [8] Furthermore, the first applicant states in this application that she has admitted that Argon [Trifert] is a creditor of North Shore. [9]

[11]

In respect of the admission made by the first applicant over North Shore's indebtedness, the first respondent only alleges that "This is not an admission of the Argon [Trifert] claim amount. The list of creditors simply records what claims the creditors alleged to be owing by North Shore. Nothing more should be read into this. This is clear from what is stated by me [the first applicant] in that paragraph – that is 'a list of [North Shore's] creditors and approximate amounts of liabilities to such creditors'".

[12]

Notwithstanding North Shore alleging that the last product was delivered on 5 November 2015, alternatively 17 February 2017, I find that North Shore has admitted its indebtedness to Argon [Trifert] in the business rescue application. In the applicants' supplementary heads of argument, the date upon which the debt

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was allegedly acknowledged was on 22 October 2018.

[13]

Trifert submitted its claim for proof [10] at the first meeting of North Shore's creditors. The presiding officer rejected the claim because the claim form was not properly attested to. [11] Trifert thereafter presented to the liquidators a proper claim form. [12] It is the same claim as the defective claim. However, this time the claim form was properly attested to.

[14]

Trifert's claim is still in the process of being investigated by the liquidators and was not included in the First Liquidation and Distribution Account of...