Business Partners Ltd v Yellow Star Properties 1061 (Pty) Ltd (7188/2011) [2012] ZAKZDHC 96 (17 July 2012)

Business Partners Ltd v Yellow Star Properties 1061 (Pty) Ltd (7188/2011) [2012] ZAKZDHC 96 (17 July 2012)

The court found that section 344(f) of the Companies Act 61 of 1973, which provided for winding-up on the ground of inability to pay debts, has been repealed and does not apply to solvent companies under the transitional provisions of the Companies Act 71 of 2008. The respondent was found to be solvent, as its assets exceeded its liabilities and the applicant failed to establish insolvency on a balance of probabilities. The applicant could not rely on section 344(f) for winding-up and did not persist with allegations under section 344(h) ('just and equitable'). The applicant's alternative reliance on section 81(1) of the new Act was not substantiated by the facts. The court condoned the...

Citation
[2012] ZAKZDHC 96
Parties
Applicant: Business Partners Limited; Respondent: Yellow Star Properties 1061 (Pty) Ltd
Court
Kwazulu-Natal High Court, Durban
Jurisdiction
South Africa
Judgment Date
17 July 2012
Case Number
7188/2011
Procedural Posture
Winding Up Application / Final Determination on Point in Limine
Outcome
Application dismissed. Point in limine upheld. Costs awarded against applicant, including costs of senior counsel.
Judges
Radebe
Legal Topics
Winding Up of Companies, Solvency Test, Transitional Provisions, Costs Order
Commercial and Corporate Civil Procedure Winding Up of Companies Solvency Test Transitional Provisions Costs Order

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Parties

Business Partners Limited

Applicant

Yellow Star Properties 1061 (Pty) Ltd

Respondent

Procedural Posture

Winding Up Application / Final Determination on Point in Limine

Legal Issues

  1. 1 Whether the applicant is entitled to rely on section 344(f) of the Companies Act 61 of 1973 for the winding-up of a solvent company.
  2. 2 Whether the transitional provisions of the Companies Act 71 of 2008 permit reliance on section 344(f) of the old Act for solvent companies.
  3. 3 Whether the applicant has established that the respondent is insolvent and unable to pay its debts.

Ratio Decidendi

The court found that section 344(f) of the Companies Act 61 of 1973, which provided for winding-up on the ground of inability to pay debts, has been repealed and does not apply to solvent companies under the transitional provisions of the Companies Act 71 of 2008. The respondent was found to be solvent, as its assets exceeded its liabilities and the applicant failed to establish insolvency on a balance of probabilities. The applicant could not rely on section 344(f) for winding-up and did not persist with allegations under section 344(h) ('just and equitable'). The applicant's alternative reliance on section 81(1) of the new Act was not substantiated by the facts. The court condoned the...

Court Disposition

Application dismissed. Point in limine upheld. Costs awarded against applicant, including costs of senior counsel.

Orders

  • The late filing of the replying affidavits by the applicant is condoned.
  • The point in limine is upheld.