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South Africa Judgment

Eastern Cape High Court, Port Elizabeth

Active Cooling v Lefutshe Electrical and Construction CC (3838/2011) [2012] ZAECPEHC 55 (10 August 2012)

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Source document

01

Holding and result

The court found that the respondent's repeated undertakings to effect payment in settlement of the debt constituted an acknowledgement of liability, which interrupted the running of prescription under section 14(1) of the Prescription Act. The respondent failed to dispute the applicant's factual averments and only raised prescription as a defence. The court held that there was no merit in the submission that the matter should be referred for oral evidence, as the applicant's case remained unanswered. Consequently, the applicant was entitled to a final winding-up order against the respondent.

Court disposition

Final winding-up order granted with costs against the respondent.

Orders

  • A final winding-up order, with costs, is granted.

02

Material facts

Parties

Active Cooling

Applicant Counsel: Adv N. Mullins

Lefutshe Electrical and Construction CC

Respondent Counsel: Adv C. van Rooyen

Amounts and remedies

  • Outstanding Debt Claimed: ZAR 53,408.99
  • Partial Payment Made: ZAR 100,000

03

Procedural history

  1. Posture

    Liquidation Application / Final Order

04

Questions and positions

Legal issues

Party arguments

Applicant
The applicant contended that the respondent was indebted in the amount of R53,408.99 after partial payment, and that repeated undertakings by the respondent's sole member to settle the debt amounted to an admission of liability, thereby interrupting prescription. The applicant relied on supplementary affidavits confirming that the respondent undertook to commence payments in settlement of the debt as from January 2010.
Respondent
The respondent, through its attorney, argued that the applicant's claim had prescribed and denied any tacit or express acknowledgement of liability. The respondent further submitted that the matter involved factual disputes which could not be resolved on affidavit and should be referred for oral evidence.

05

Court’s reasoning

  1. 01

    Prescription Act 68 of 1969, s 14(1)

    An express or implied acknowledgement of liability interrupts the running of prescription as contemplated by section 14(1) of the Prescription Act.

  2. 02

    Active Cooling v Lefutshe Electrical and Construction CC (3838/2011) [2012] ZAECPEHC 55

    Where the respondent does not dispute the applicant's factual averments and only raises prescription as a defence, the court may determine the matter on affidavit without referral for oral evidence.

06

Ratio, limits and disposition

Ratio decidendi

The court found that the respondent's repeated undertakings to effect payment in settlement of the debt constituted an acknowledgement of liability, which interrupted the running of prescription under section 14(1) of the Prescription Act. The respondent failed to dispute the applicant's factual averments and only raised prescription as a defence. The court held that there was no merit in the submission that the matter should be referred for oral evidence, as the applicant's case remained unanswered. Consequently, the applicant was entitled to a final winding-up order against the respondent.

Obiter and limits

  • No purpose would be served in issuing a provisional order where the matter has been fully argued and the applicant has made out a case for final relief.

Court disposition

Final winding-up order granted with costs against the respondent.

  • A final winding-up order, with costs, is granted.

Source and reliance status

Eastern Cape High Court, Port Elizabeth

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Judgment text

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Source document

Eastern Cape High Court, Port Elizabeth

Judgment

[2012] ZAECPEHC 55

NOT

REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE, PORT ELIZABETH)

Case No: 3838/2011

In the matter between:

ACTIVE COOLING ............................................................................................Applicant

And

LEFUTSHE ELECTRICAL AND CONSTRUCTION CC ...............................Respondent

Coram: Chetty, J

Heard: 2 August 2012

Delivered: 10 August 2012

Summary: Close corporation – Liquidation of –Defence raised – Matter prescribed – Prescription Act 68 of 1969 – S 14 (1) – Interruption of prescription – Final order granted

________________

JUDGMENT

Chetty, J

[1] During December 2011, the applicant sought an order for the provisional winding-up of the respondent. In the founding affidavit, the deponent, Jan Hendrik Strydom (Strydom), the applicant’s sole member, alleged that as at 1 March 2009 the respondent was indebted to the applicant in the sum of R153 408.99 in respect of services rendered and goods supplied. It further alleged that on 31 March 2009 the respondent paid the applicant the sum of R100 000.00 leaving a balance of R53 408.99 which was due and payable. He adverted to various attempts, culminating during November 2009, made to the respondent’s sole member, Mr Moeketsi Duiker (Duiker) to extricate the aforesaid amount from the respondent but to no avail. Duiker prevaricated on all undertakings made by him to settle the respondent’s indebtedness which ultimately led to the institution of the present proceedings.

[2] The opposing affidavit filed by the respondent was deposed to by its attorney, Mr Marios Kyriacou (Kyriacou), whence it appears that the opposition to the relief sought is premised upon the prescription of the applicant’s claim. Kyriacou furthermore contends that the respondent neither tacitly nor expressly acknowledged its liability to the applicant. In reply, Strydom states that the various undertakings made by Duiker amounted to an admission of liability and in amplification of this averment filed a supplementary affidavit by the applicant’s erstwhile debt collections clerk, Ms Robyn Coetzee (Coetzee), wherein she echoed the applicant’s sentiments that at the end of 2009 Duiker made an undertaking to commence payments in settlement of the debt as from January 2010.

[3] The critical question which falls for determination is whether the undertakings made by Duiker constituted an express or implied acknowledgement of liability and interrupted prescription as contemplated by section 14 (1) of the Prescription Act1. Counsel for the respondent contended that the papers revealed a factual dispute of such moment that the matter could not be

determined on the affidavits and ought to be referred for the hearing of oral testimony. There is no merit in the submission. The

applicant’s case remains unanswered. The respondent, save for raising a defence premised on prescription, chose not to dispute any of the applicant’s factual averments. There can be no doubt that the various undertakings to effect payment in settlement of the debt amounts to an acknowledgement of liability and as such interrupted the running of prescription.

[4] Although the applicant initially sought an order for the provisional liquidation of the respondent, the matter was fully argued and no purpose would be served in issuing a provisional order. The applicant has made out a case for the grant of final relief and in the circumstances, the following order will issue –

A final winding-up order, with costs, is granted.

________

D.

CHETTY

JUDGE

OF THE HIGH COURT

Obo the Applicant: Adv N. Mullins instructed by Gregory Clark & Associates; 9 Buffelsfontein Road, Mount Pleasant, Port Elizabeth; Tel: 041-367 3489; Ref: G Clark

Obo the Respondent: Adv C. van Rooyen instructed by Brown Braude & Vlok; 317 Cape Road, Newton Park, Port Elizabeth.

1Act No, 68 of 1969

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Prescription Act 68 of 1969

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