IN THE HIGH COURT OF SOUTH AFRICA

In the matter between:
GIDEON ALBERT DE SWARDT 

HUBERT ALEXANDER BLAESER 

and

JUDGMENT

1] This is an application by first and second applicants for the winding up of respondent. In order to succeed, applicants are required to show the following requirements for a winding up order:
1. Applicants have a right in terms of section 346 of the Companies Act 61 of 1973 ("the Companies Act") to apply for the winding up of respondent on the basis that they are creditors of respondent.

1.	The creditor to whom the company is indebted in a sum of not less than R100 then due has served on the company be leaving the same at its registered office a demand requiring the company to pay the sum so due and the company for three weeks thereafter neglected to pay that sum or to secure or compound it to the reasonable satisfaction of the creditor.
2.	It has proved to the satisfaction of the court that the   company   is   unable   to   pay   its   debts.
[2]    In the founding affidavit, first applicant makes out his case thus:
"The respondent, represented by Mr Omar Fortune, telephonically contacted me and requested my business services as he required vehicles to be utilised at the Nature's Valley, Plettenberg Bay project, which project he was appointed as subcontractor to Murray & Roberts. I accepted his invitation and at the specific order and request of a Mr Michael Alexander, as representative of the Respondent and acting as site manager, the services as and when required were rendered, which orders are reflected and hereinafter referred to in invoices and delivery notes. I attach hereto marked "GAD2" a summary of 12 outstanding invoices in respect of the aforementioned hiring of construction vehicles by myself to respondent totalling an amount of R250192,95. I also attach hereto marked "GAD3(A)-GAD3(L)" each and every one of the 12 invoices and each and every delivery note pertaining to invoice.
Initially all the delivery notes were issued and addressed to Murray & Roberts as I was led to believe by Mr Fortune that my business services would be rendered to them but after several enquiries to Mr Michael Alexander, the site manager, I was informed that the delivery note should be addressed to the respondent company. During approximately the same period, second applicant also hired a number of construction vehicles to respondent in terms of oral agreements of lease entered into between second applicant and respondent duly represented by Mr Omar Fortune. The second applicant was also telephonically contacted and invited to render certain services with his heavy duty vehicles for the Nature's Valley, Plettenberg Bay project, which orders were authorised by Messrs Fortune and Alexander as representatives of the respondent company. I attach hereto marked "GAD4(A)" and "GAD4(B)" two invoices in respect of the aforementioned hiring of construction vehicles by second applicant to respondent totalling an amount of R182 127,82.

To date no response was received, neither telephonically nor in writing".

"Respondent never accepted  liability for the full amount of R250 192,95 but intended to offer in full and final settlement R148 016,74...the balance of the account, R102 176,21 is thus and at all material times disputed". 
Respondent then goes on to say the following: it never accepted liability for the full amount of R250 192, 95 but intended to offer in full and final settlement the sum of R148 016, 74. That sum, in respondent's view, was paid as follows:
25 October 2006 - R49 016,74 
7 December 2006 - R99 000,00 

"was allocated by my accountant to a number of earlier invoices that were issued to Respondent, copies of which, along with their delivery notes, are attached hereto..."

1.	Delivery note 2143 was made out to Murray & Roberts but subsequently seemed to be deleted. The contact person is one Norman who has no connection with the respondent.

3.	Delivery note 2318 was initially made out to Murray & Roberts and thereafter changed to Ballprop. Once more the contact person is one Norman.

[5] So much for background to the first applicant's claim. There is, however, also a claim by second applicant. This is a curious adoption of process in that the claim is set out in the founding affidavit by first applicant without any clear indication as to the relationship between first applicant and second applicant. Second applicant does confirm the contents of the founding affidavit but only for the first time sets out a detailed basis of his case personally in a replying affidavit.

[8] As regards respondent's inability to pay its debts, the following allegations were made in the founding affidavit:
"I furthermore submit, with respect, that it is clear from    the    aforementioned     that    respondent's liabilities in all probability far exceeds its assets. In this regard I wish to confirm that respondent had to lease   the   aforementioned   vehicles   as   well   as equipment   as   it   did   not   have   vehicles   and equipment of its own.   Respondent clearly does not have the necessary cash on hand or current assets with which to pay its creditors, more specifically myself and second applicant.   Respondent is both commercially insolvent in that it is unable to pay its debts, as well as being actually insolvent in that its liabilities exceed its assets". 

[11] In short, even if I assume in favour of applicants that (1} there is no reasonable dispute in respect of either debts to first and second applicant; (2) that a case was not made out in reply, particularly in respect of the quantification of the alleged debts (in particular the affidavit by second applicant in reply which, for the first time, sets out its claim in any detail} the problem persists as to the financial health of the respondent. In my view, there has been no proper case made out that this is a company which rs unable to pay its debts.

[12] Section 345 of the Companies Act does provide deeming provisions sufficient to justify that conclusion but, as I have already stated, the law does not sanction a conclusion on which no factual evidential basis is raised in order to trigger the deeming provision in the first place. Were it to be otherwise, it would mean that liquidation proceedings would be the only legitimate means of enforcing payment.

[13] In my view, there are a number of reasons why this is an unsatisfactory   application.   The   initial   claims   in   the founding affidavit were skeletal at best. Second applicant only came out of the proverbial woodwork at the stage of reply. Much of the dispute as to whether the R148 000 was paid in discharge of the obligation claimed or indeed, was for some previous amount, emerges in reply. There was no satisfactory or clear analysis of the claims in the founding affidavit where the case must be made out.

[14] I should add that an application by the respondent to reply to the replying affidavit was made. I refused that application because of the fact that it appeared to me, after a careful analysis of the papers, that this application could not pass legal muster for the reasons that I have set out. On the existing factual matrix, to make the assumption that there is no reasonable dispute that the case was satisfactorily made out in the founding affidavits, is an assumption that I am not prepared to make.

[15] However, it is not necessary to deal with this is one any further, because this was not a case where a court should exercise its discretion in favour of applicant on the basis that respondent is not in a position to pay its debts.

[16]  For these reasons, the application is dismissed, with costs.

DAVIS, J