Cleanjack SA (Pty) Ltd v Feedom Group (Pty) Ltd (3678/2021) [2022] ZAGPPHC 453 (20 June 2022)

Cleanjack SA (Pty) Ltd v Feedom Group (Pty) Ltd (3678/2021) [2022] ZAGPPHC 453 (20 June 2022)

The applicant failed to establish that the respondent was commercially insolvent as at the end of February 2020. The respondent's cancellation of the agreement due to the Covid-19 lockdown was justified as a force majeure event, and the subsequent amounts claimed by the applicant were bona fide disputed. The applicant was aware of the dispute but proceeded with the winding-up application, which is impermissible under the Badenhorst rule. The respondent's audited financial statements showed assets exceeded debts, and there was no evidence of inability to pay the undisputed amount. The application was brought to enforce payment of a disputed debt, constituting an abuse of process....

Citation
[2022] ZAGPPHC 453
Parties
Applicant: Cleanjack SA (Pty) Ltd; Respondent: Feedom Group (Pty) Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
20 June 2022
Case Number
3678/2021
Procedural Posture
Final Liquidation Application / Judgment on Application for Final Winding Up
Outcome
Application dismissed with costs on an attorney and own client opposed scale.
Judges
M Mbongwe
Legal Topics
Winding Up of Company, Force Majeure, Commercial Insolvency, Bona Fide Dispute, Costs Order
Commercial and Corporate Civil Procedure Winding Up of Company Force Majeure Commercial Insolvency Bona Fide Dispute Costs Order

Case Brief

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Parties

Cleanjack SA (Pty) Ltd

Applicant

Feedom Group (Pty) Ltd

Respondent

Procedural Posture

Final Liquidation Application / Judgment on Application for Final Winding Up

Legal Issues

  1. 1 Whether the respondent is unable to pay its debts as described in section 345 of the Companies Act 61 of 1973.
  2. 2 Whether the respondent's cancellation of the agreement due to force majeure (Covid-19 lockdown) was valid and justified.
  3. 3 Whether the applicant's claim for R247,716.69 is bona fide disputed on reasonable grounds.

Ratio Decidendi

The applicant failed to establish that the respondent was commercially insolvent as at the end of February 2020. The respondent's cancellation of the agreement due to the Covid-19 lockdown was justified as a force majeure event, and the subsequent amounts claimed by the applicant were bona fide disputed. The applicant was aware of the dispute but proceeded with the winding-up application, which is impermissible under the Badenhorst rule. The respondent's audited financial statements showed assets exceeded debts, and there was no evidence of inability to pay the undisputed amount. The application was brought to enforce payment of a disputed debt, constituting an abuse of process....

Court Disposition

Application dismissed with costs on an attorney and own client opposed scale.

Orders

  • The application is dismissed.
  • The applicant is ordered to pay the costs on an attorney and own client opposed scale.