Tau Rollermeulle (Pty) Ltd v Murcus M Farming CC
| Jurisdiction | South Africa |
| Judge | TA Maumela J |
| Judgment Date | 19 March 2018 |
| Docket Number | 63226/2018 |
| Hearing Date | 19 March 2018 |
| Court | North Gauteng High Court, Pretoria |
| Citation | 2020 JDR 1803 (GP) |
Maumela J:
This matter came before court on the opposed motion roll. The applicant is Tau Rollermeule (Pty) Ltd, a company incorporated in terms of the Companies Act of the Republic of South Africa with registration number 2015/357344/44 with its registered address situated at 2 Gearge Street, Leeudoringstad, North West Province. The respondent is Murcus M Farming CC, registration number 2008/091707/23, a close corporation duly registered in accordance with the Close Corporation Act 1994: (Act No 69 of 1994) and which enjoys continued existence by virtue of the provisions of the Companies Act, with its 603, Wingerhof, 169 Bourke Street, Pretoria, Gauteng Province.
Before this court, the applicant instituted action against the respondent under case number 84019/2016 for payment of an amount of R 5 395 962-30 in respect of chicken feed sold and delivered by the applicant to the respondent.
BACKGROUND.
On the 15th of August 2016, the parties entered into a written agreement which was made an order of the court before the Honourable Molefe J. When the order was made, the respondent admitted indebtedness to the applicant in the amount indicated under paragraph 2 above, together with interests calculated at the rate of 12% per annum from the 23rd of September 2016. A "pending application" was only served on the 20th of August 2019. This was two years and nine months after the granting of the court order by Molefe J.
The Respondent made six payments in substantial amounts from July 2017, until March 2018. That was subsequent to the court order. Respondent's sole director and its attorneys admitted the debt on various occasions subsequent to the court order.
RESPONDENT'S DEFENCES BASED ON THE NATIONAL
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CREDIT ACT: [1] ("NCA"). THE AGREEMENT SHOULD BE DECLARED RECKLESS.
The respondent argues that the claim by the applicant is predicated on what the court should consider to be reckless credit. Part D of Chapter 4 of the Act deals with reckless credit. This section does not apply to a credit agreement where the consumer is a juristic person [Section 78(1) of the Act]. [2] as a result, such a defence is bad in law.
THE APPLICABILITY OF SECTION 129 OF "THE ACT".
Section 129 of the National Credit Act [3] (NCA), addresses the aspect of applicability or otherwise of the NCA. In that regard, the section provides that section 129 thus not apply:
where the consumer is a juristic person whose asset value or annual turnover exceeds R1 million;
where the principal debt is R250 000 or more – even when the juristic person has an asset value or turnover of less than R1 million [4] .
The agreement in question is a large agreement (over R250 000).
Respondent submits that its immovable property alone is worth R12 million. This property was bought in December 2010. (See Land Bank's bond for R6,414858.00; Annexure "FA8", p.55).
RESCISSION OF COURT ORDER OF 15 NOVEMBER 2016 [5] .
The Respondent raises the issue that the preceding application was not served on it, alternatively that the application was served by hand. The parties agreed that their settlement be made an order of court. [6] The Respondent made various payments and in
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doing so, it admitted liability on various occasions subsequent to the settlement. Based on that, the applicant argues that the Respondent therefore acquiesced in the judgment. Applicant states that a Rule 42(1) application has to be brought within a reasonable time. It is trite that inordinate delay in itself is a good reason for refusing the relief. [7]
WAS THE ORDER ERRONEOUSLY SOUGHT OR GRANTED?
The court has to determine whether the order was erroneously sought or made. It has been shown in paragraph 4 above that the NCA does not apply. The court also has to determine whether or not there has been compliance with section 346 (4A) of the old Companies Act [8] where it regards service on employees.
Applicant submits that it is not a requirement that service be effected upon employees at the commencement of the application. According to the applicant, the application must only be served on the employees, a reasonable time before the hearing. It submits that the test is merely whether persons who are entitled to be furnished with papers had adequate opportunity to consider the application and to decide to intervene. However, it contends that the application was served timeously on the employees, in February 2019. This is reflected in the service Affidavit which is attached as Annexure "SA4" as indicated on page 238 and Annexure "SA6", page 240.
The Applicant makes the point that the fact that Respondent opposed this application renders the aspect of service to be academic. It points out that the application was in any event served both at the principal place of business, much as it was served at the registered address. See Service Affidavit, paragraph 2.3 and 2.7, p.229 and 230.
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SECURITY BOND.
The applicant submits that the Master's Certificate needs not accompany the application when filed with the Registrar or when served on the Respondent. It points out that the Master's Certificate must only accompany the application when it is heard and that it ought not be issued more than ten days before they date of the Notice of Motion. [9]
In motivating for the court to grant its application, Applicant pointed out that the Respondent is unable to pay its debts [10] . This can be proved on the basis of any facts which the court finds to be satisfactory. An unpaid demand or a nulla bona return merely constitutes an alternative means of proving inability to pay debts. [11] In order to obtain an order declaring insolvency against a party, an applicant is not obliged to prove that the defendant committed an "act of insolvency". Inability to satisfy a warrant is merely one factor, coupled with Respondent's own admission that it is unable to pay its debt.
DOES RESPONDENT HAVE SUFFICIENT ASSETS TO SATISFY A WARRANT AND JUDGMENT?
Among others, in order to determine whether to grant or refuse the application for the Winding-up of the Respondent, the court is to determine whether the respondent has sufficient assets with which to satisfy a warrant emanating from the judgment against it. No valuations are attached by the Respondent. The Applicant relies on the simple fact that the Respondent has failed to settle indebtedness since at least November 2016. Respondent's major asset has been sold. The land Bank obtained judgment against
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Respondent for plus or minus R8 million [12] plus interest.
The application was not triggered when Respondent reneged on the article. Article: right promises to pay. Even if it was, the immovable property is the only asset of value. If it gets sold, there will be almost nothing left to execute upon. There is no proof of collusion between Eagles the four core is not with 24 the Applicant. Eagles wants property and the Applicant wants its money. The sale agreement is not confidential. It features in other court papers in the public domain. There is no reason why the Applicant would cut off rental payments in order to sue the Respondent because it was servicing the debt. [13] The Applicant is fully entitled to sue the surety as it is liable jointly and severally in terms of suretyship.
BONA FIDE DEFENCE.
The court has to determine whether the defendant has a bona fide defence, against the claim or not. The Applicant submits that the High Watermark in this case is that the Chicken Feed "may have been contaminated". [14] The Defence never raised this before filing the Answering Affidavit. No letters or emails were sent about this. The test results got known on the 24th of November 2016. [15] It is submitted that the Applicant relies on hearsay evidence. No affidavit from an expert was submitted to prove the results. A question arises about why the Respondent entered into a settlement whereupon he subsequently made six substantial payments if he was unhappy with the quality of the merchandise. The Chicken-Feed was already sold in 2016. Any potential counterclaim has long prescribed. The Applicant contends that the defence the Respondent raised is mala fide and contrived.
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IS RESPONDENT INSOLVENT?
In order to decide whether or not to grant this application, the court has to determine whether the Respondent is still solvent or not. The Respondent states that its property is worth R12 million. But such is only the amount of mandate to sell allowed by the Landbank. There has been no valuation done in order to prove market or forced sale value of the assets. It is submitted that the only yardstick is the sale to Eagles for R9 million. The Applicant points out that on the Respondent's own version, it has debts totalling over R15 million. [16] Pending litigation suspending sale agreement, the proceeds will not materialise shortly.
The court also has to determine whether the Respondent's defence against the claim is bona fide. That defence has to be premised on reasonable grounds. It is trite that the onus is on the Respondent to prove that it has a bona fide dispute against the claim. The Respondent signed a settlement and it paid various amounts. It only raised its "defence" after the liquidation application was served. The application for rescission was only launched on the 20th of August 2019, which was almost three years after the settlement was made an order of the court. In doing so, the Respondent made various admissions of liability.
Respondent admits that it cannot pay the Applicant at the present moment. [17] If the Respondent had liquid or readily realisable assets, it would have realised them in order to extinguish the debt. A liquidation...
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