IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

In the matter between:

and

(Registration number: 1999/024520/07

Judgment delivered on 22 February 2012
SABA, AJ Introduction
[1] This is an opposed application for a provisional winding-up of the respondent company on the grounds that it is unable to pay its debts. The applicant's case is based on the failure of the respondent to make its monthly repayments or to skip its monthly repayments to the bank. Mr Jonker appeared for the applicant and Mr Kantor appeared for the respondent.

[2] The applicant is a registered bank, duly registered as a public company and incorporated with limited liability in accordance with the banking and company laws of the Republic of South Africa. The respondent is a company with limited liability, duly registered in accordance with the laws of the Republic of South Africa.
Factual Backgound

[3] On or about 12 April 1999 and at Cape Town, the Cape of Good Hope Bank Ltd ("Good Hope Bank") and the respondent concluded a written loan agreement. In terms of the agreement Good Hope Bank agreed to grant respondent an access loan facility in the sum of R4 million subject to the terms and conditions contained in their agreement ("JP3"). On or about 16 February 2001, Good Hope Bank and respondent concluded a further loan agreement ("the consolidated agreement") in terms of which Good Hope Bank agreed to grant respondent an additional loan facility of R800 000,00. The latter facility was later incorporated into the first liability, thereby providing a total access loan facility of R4 800 000, 00. In terms of the two loan agreements, and as security for the indebtedness of respondent to Good Hope Bank, respondent registered mortgage bond number B11886/1999 on 1 April for R5 million and mortgage number B6296/2001 on 7 February 2001 for R2,5 million, over Erf 13898 Milnerton.

[4] It is the applicant's case that it acquired the assets and liabilities of Good Hope Bank - including the agreements and the bonds concluded with respondent, with effect from 1 January 2003. In her founding affidavit, Thozama Maneli, on behalf of applicant, alleged that the respondent has been unable to pay its debts and on 1 January it was in arrears of R1 132 650. 76. Respondent, on the other hand, averred that it was ahead of its payments before the applicant unilaterally amended the period of the bond from 15 to 20 years.

4.1. that the applicant has locus standi to bring this application
4.2. that the respondent is indebted to the applicant.
4.3. that the respondent is unable to pay its debts.

[6] The court has to determine whether the applicant has locus standi to bring this application; whether the respondent is indebted to the applicant in the sum of R 4 939 302, 73 and whether the respondent is unable to pay its debts.

[7] When asked to decide an opposed application on the affidavits, the approach to adopt is set out in Plascon Evans Paints v Van Riebeeck Paints (Pty Ltd 1984 (3) SA 623 A at 634H to 635C:
"....where in proceedings on Notice of Motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the Applicant's affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order".

Legal Position

"Winding-up proceedings ought not to be resorted to in order by means thereof to enforce payment of a debt, the existence of which is bona fide disputed by the company on reasonable grounds....

It is submitted that where a debt is disputed, and hence the applicant's locus standi as a creditor, the application will be dismissed...."

"In regard to locus standi as a creditor, it has been held, following certain English authority, that an application for liquidation should not be resorted to in order to enforce a claim which is bona fide disputed by the company.
Consequently, where the respondent shows on a balance of probability that its indebtedness to the applicant is disputed on bona fide and reasonable grounds, the court will refuse the winding-up order. The onus on respondent is not to show that it is not indebted to the applicant: it is merely to show that the indebtedness is disputed on bona fide and reasonable grounds".

[11] Mr Jonker's submission that the applicant obtained the assets and liablities of Good Hope Bank is based on the following facts:
11.1. a consent of the Minister of Finance (as envisaged in section 54 (1) of the Banks Act, 1990 (Act No. 84 of 1990) to the transfer Of assets and liabilities of Good Hope Bank;
11.2. the Chief Registrar's circular evidencing the endorsement registered as BC3/2003 by virtue of section 54 of the Bank's Act 4 of 1990 ("the Act").

[12]   The relevant terms of the Minister's consent are as follows:
"6.1   Consent is granted, with effect from 1 January 2003, in terms of section 54 (1) of the Banks Act, 1990 (Act No. 94 of 1990), for the transfer of all assets and liabilities of Cape of Good Hope Bank Limited to Nedcor Bank Limited.
6.2. Consent is hereby granted, with effect from 1 January 2003, in terms of section 54 (8A) of the Banks Act, 1990 (Act No. 84 of 1990), for the waiver of payment of duties, fees or charges that may be payable in respect of the transfer of all the assets and liabilities of Cape of Good Hope Bank Limited to Nedcor Bank Limited". (My emphasis)

[13]  The relevant portion of the Chief Registrar's circular is as follows:

"TRANSFER OF ASSETS OF CAPE OF GOOD HOPE BANK LIMITED TO NEDBANK LIMITED.

1. All the assets of CAPE OF GOOD HOPE BANK LIMITED (No. 1958/000018/06) have been transferred to NEDBANK LIMITED (No. 1951/000009/06) in terms of section 54 of the Banks Act, 1990 (Act No. 94 of 1990), with effect from 1 January 2003"

[14] Mr Kantor submitted that the documentation from the Registrar of Banks and Registrar of Deeds relates to permission or approval to transfer the assets and has nothing to do with the actual transaction of transfer. That in the absence of a transaction of the actual transfer of assets and liabilities from Good Hope Bank to it, the applicant has no locus standi. He referred this court to Amler's Precedents of Pleadings (Seventh Edition) at page 75 where the following is stated:

"Contract of cession: A party on a cession must allege and prove the contract of cession - that is, a contract in terms of which a personal (and not a real) right against a debtor is transferred from the creditor (cedent) to a new creditor (cessionary)".

Subject: RE: Nedbank bond over Erf 13898 Milnerton ino Zonnekus Mansion Pty Ltd Hi Anthea
I am in the process of updating the financials for Zonnekus which are going to take some time, there are three years to do and the accountant has been requested to complete these ASAP, I will forward them with assets and liability statements as soon as same are in hand, in the interim as per my telephone conversation with you and your request that I communicate my concerns to you in writing I hereby raise the following discrepancies and concerns.
	The Zonnekus bond was originally held by Cape of Good Hope Bank
	The term was approved at 20 years with an access bond up to six million Rand
	The access bond was unilaterally stopped by Nedbank
	The term of payment appears to have been calculated at 15 years and not 20
	Insurance is being debited to our bond account at some R50/60 thousand per year without consent and we are being charged interest on this
	By the incorrect payment term being used and the access bond facility taken into account we are some R2 million in advance with payments and or available funds

Zonnekus therefore respectfully requests the following
	The unauthorized insurance that has been charged on the Zonnekus bond account be refunded from the inception and credited against the bond account.
	A recalculation of the payments be made on the basis of our agreed (sic) to bond and terms take place setting out the true position of the bond
	The R6 million bond be re-instated with immediate effect
	/ am not aware of or have any documentation in my possession signed with Nedbank for the bond, should there exist any please forward to me as a matter of urgency.

Anthea I hope this sets out some concerns, we are not complaining and are sure that these errors are due to an oversight and due to this being an old COGHB bond, we would like to have this rectified and are open to proposals regarding any form of restructuring, we also hope to extend the bond to some R10 million in order to facilitate the renovation of the property for the World Cup Rental purposes.

Please do not hesitate to call me should you wish to have further information or which to discuss any further issues.

Kind Regard
Gary van der Merwe

Evaluation

Conclusion
[18] In the circumstances, I find that the respondent has satisfied me on a balance of probabilities that its indebtedness to the applicant is disputed on bona fide and reasonable grounds.

[20] In the light of the conclusion to which I have come, it is not necessary to deal with other issues raised by the applicant in this application.

[21] In all circumstances of the case, the application for a provisional winding-up is dismissed with costs.

N SABA
Acting Judge of the High Court