Venbor (Pty) Ltd v Vendaland Development Co (Pty) Ltd t/a Camp Store

• Jurisdiction: South Africa
• Judge: Van der Spuy AJ
• Judgment Date: 25 April 1986
• Hearing Date: 24 April 1986
• Court: Venda Supreme Court

Van der Spuy AJ:

Applicant approached this Court on 7 April 1986 by way of an urgent application for an order placing respondent in provisional liquidation.

In the founding affidavit, one Anton de Leeuw sets out that B applicant is Venbor (Pty) Ltd, a company duly incorporated and registered according to the Laws of the Republic of Venda, and carrying on the business of a bakery at Shayandima, Venda. Respondent is cited as Vendaland Development Co (Pty) Ltd, also incorporated in Venda and carrying on business as Camp Store at Miluwani, Sibasa, Venda. It C is alleged that respondent owed applicant the sum of R13 419,23 and that written demand had been addressed to respondent on 19 February 1986, which demand complied with s 345 of the Companies Act 61 of 1973, hereinafter referred to as 'the Act'. Respondent offered to continue paying the debt at R500 per month. Respondent thereby impliedly D admitted the debt. Applicant, however, claims that, despite the offer to pay off the debt in instalments, respondent had not honoured its undertakings and hence the full amount became due and payable despite a short payment of R200 which applicant had received on 19 March 1986.

When the matter came before me at 10h00 on 7 April 1986, I was E satisfied that the papers had been served on that morning at 08h45, and I issued an order later on that day condoning the abridgement of times in terms of the Rule of Court 6(11), and placing respondent in provisional liquidation. I ordered that a rule nisi be issued calling upon all interested persons to show cause to this Court on 15 May 1986 F at 10h00 why respondent should not be placed in final liquidation and why the costs should not be costs in liquidation.

The rule nisi had, of course, to be published in the Government Gazette by the Master in terms of s 356(1) of the Act, and I did not expressly provide for such publication in my order. I did, however, order that the rule nisi should be served on the registered office of respondent by the Deputy Sheriff and furthermore that interested G parties should be notified thereof by one publication in The Citizen newspaper.

The return day of the rule was thus fixed for 10h00 on 15 May 1986. On 10 April 1986, a notice of opposition was filed by attorneys Madikizela, Netshifhefhe & Partners of Thohoyandou on behalf of respondent, but, since this was not accompanied by any affidavit, nor by the H answering affidavit later signed by Jonathan Budeli and dated 11 April 1986 and tendered to the Court during the hearing on 11 April 1986 of the application to anticipate the return day, I held that the notice of opposition was of no force and effect and I ordered that the papers should be served de novo and then filed in Court.

The wasted costs occasioned by the abortive attempt to anticipate I the return day were ordered against the directors who brought the proceedings, namely Messrs J Budeli and S Munzhedzi, on the attorney and client scale as they appear to me to have acted frivolously and in total disregard of the rights of the applicant. I also found that, in so acting, they did not bind the company in liquidation and they were liable as directors personally and I therefore ordered them to pay J the costs de bonis propriis.

Van der Spuy AJ

A It now appears that the directors of the respondent had in fact abandoned the abortive proceedings, detailed above, for on 22 April 1986 a further notice of opposition 'indicating that the application will be opposed on 24 April 1986 at 14h00' was served on applicant's attorneys. In the certificate of urgency attached to the notice and in the notice of anticipation also attached thereto, applicant is stated to be Vendaland Development Co (Pty) Ltd and the first respondent is cited B as Venbor (Pty) Ltd, whilst the provisional liquidator, Mr Johannes Christoffel Grobler, is cited as second respondent.

At the inception of argument before me, I pointed out to Mr Van Heerden, instructed on behalf of Vendaland Development Co (Pty) (in liquidation), that it was not proper to join the provisional C liquidator in this informal way, or at all, since it is nowhere alleged that he had any interest, direct or substantial, in the matter and cannot have any interest apart, ie separate from the company in liquidation. His name was therefore struck from the papers as second respondent. Counsel by agreement also accepted that, although respondent D was applying for the anticipation of the return day, respondent should not be regarded as a separate applicant in the matter. I therefore continue to refer in this judgment to Venbor as applicant and to Vendaland Development Co as respondent.

Respondent's new notice of opposition/anticipation is supported by the affidavit of Jonathan Budeli, who states that he is a director of respondent (although this is contested by applicant in the E replying affidavit), and that he was duly authorised by respondent by means of a resolution passed at a meeting of the directors of respondent held at Thohoyandou on 10 April 1986, to sign all papers required on behalf of respondent in order to anticipate the return day and to move that the rule nisi be discharged. The resolution appears from an extract F of the minute book of respondent and is certified by respondent's secretary as being a true and correct extract thereof.

The affidavit also sets out, inter alia, that the deponent, De Leeuw, who purported to sign on behalf of applicant, was not authorised to sign the founding affidavit and on the merits he denies that applicant was G a creditor to whom respondent owed a due debt of not less than R100 at the time of the bringing of the application for liquidation. (See in this regard s 345(1)(a) of Act 61 of 1973, amended up to and including Act 115 of 1979, further amendments of the Act in the Republic of South Africa being irrelevant in the Republic of Venda by reason of the provisions of s 61(1) read with Schedule 7 of the Republic of H Venda Constitution Act 9 of 1979.) The opposing affidavit sets out in detail why the alleged debt of R13 419,23 is being contested as a 'due debt', the crux thereof being that the arrangements to pay the R500 per month still subsisted on 21 February 1986, alternatively, at the time of the bringing of the application for liquidation.

I It is submitted in the affidavit that the letter of demand on which reliance is placed, was null and void. There is, furthermore, a denial that respondent is 'factually or commercially' insolvent. It is stated that respondent's gross profit amounts to R8 000 per month and its net profit to R5 500 per month. There are 35 - 40 trade creditors and all creditors' claims have apparently been staved off by means J of arrangements by

Van der Spuy AJ

A respondent. Although respondent has liquidity problems, it is not in the interest of the general body of the creditors that respondent be finally liquidated.

Urgency in regard to the anticipation of the return day is urged on the ground, inter alia, that the stock consists of frozen chickens B and other perishable products which, if left unattended by reason of the closing of the premises after the date of the provisional liquidation order, may lead to these products deteriorating in value.

When first calling the matter on 24 April 1986 at 14h00, as a matter of urgency and deciding to hear it as such during the Court's April recess (15 April to 1 May 1986), I was asked to deal in limine with C the question, argued by Mr Horn on behalf of applicant, as to whether the directors, purportedly acting through...