Absa Bank Ltd v Curtain Warehouse Franchise (Pty) Ltd (21743/2010) [2010] ZAWCHC 617 (9 December 2010)

Absa Bank Ltd v Curtain Warehouse Franchise (Pty) Ltd (21743/2010) [2010] ZAWCHC 617 (9 December 2010)

The respondent failed to rebut the statutory presumption of insolvency, having made no payment since the demand and offering only unsubstantiated denials. The sale of the property and the Nedbank guarantee do not provide unconditional security for the applicant's debt and costs, as both are subject to multiple conditions and uncertainties, including unknown amounts owed to other secured creditors and delays in taxation of costs. The applicant, as a secured creditor, is entitled to insist on payment of both capital and costs before consenting to cancellation of its bond. The repeated postponements have not resulted in any certainty of payment, and further delay would prejudice the...

Citation
[2010] ZAWCHC 617
Parties
Applicant: Absa Bank Limited; Respondent: Curtain Warehouse Franchise (Pty) Ltd
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
9 December 2010
Case Number
21743/2010
Procedural Posture
Urgent Application / Application for Provisional Liquidation Order
Outcome
Provisional liquidation order granted against the respondent.
Judges
Louw
Legal Topics
Provisional Liquidation, Statutory Demand, Companies Act 1973, Secured Creditor Rights, Court Discretion in Liquidation
Commercial and Corporate Civil Procedure Provisional Liquidation Statutory Demand Companies Act 1973 Secured Creditor Rights Court Discretion in Liquidation

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Parties

Absa Bank Limited

Applicant

Curtain Warehouse Franchise (Pty) Ltd

Respondent

Procedural Posture

Urgent Application / Application for Provisional Liquidation Order

Legal Issues

  1. 1 Whether the respondent is unable to pay its debts as contemplated by section 345(1)(a)(i) of the Companies Act 61 of 1973.
  2. 2 Whether the respondent has rebutted the presumption of insolvency created by the statutory demand.
  3. 3 Whether the sale of the respondent's property and the Nedbank guarantee provide sufficient certainty of payment to justify postponement instead of liquidation.

Ratio Decidendi

The respondent failed to rebut the statutory presumption of insolvency, having made no payment since the demand and offering only unsubstantiated denials. The sale of the property and the Nedbank guarantee do not provide unconditional security for the applicant's debt and costs, as both are subject to multiple conditions and uncertainties, including unknown amounts owed to other secured creditors and delays in taxation of costs. The applicant, as a secured creditor, is entitled to insist on payment of both capital and costs before consenting to cancellation of its bond. The repeated postponements have not resulted in any certainty of payment, and further delay would prejudice the...

Court Disposition

Provisional liquidation order granted against the respondent.

Orders

  • The respondent is placed under provisional liquidation in the hands of the Master of the High Court, Cape Provincial Division, in terms of Act 61 of 1973 as amended.
  • A rule nisi is issued, calling upon the respondent and all other interested parties to show cause, if any, to this Court on Wednesday 26 January 2011 why the respondent's estate should not be placed under final liquidation and why the cost of this application should not be costs in the liquidation.