South African Bunkering and Trading (Pty) Ltd and Another v African Union Transport (Pty) Ltd and Others (30720/2015) [2016] ZAGPJHC 309 (15 November 2016)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 30720/2015

DATE OF JUDGMENT: 15/11/2016

Not reportable

Not of interest to other judges

Revised.

In the matter between:

SOUTH AFRICAN BUNKERING AND TRADING PTY LIMITED First

Applicant

SOUTH AFRICAN BUNKERING AND TRADING (INCORPORATED IN THE BRITISH VIRGIN ISLANDS) Second Applicant

and

AFRICAN UNION TRANSPORT (PTY) LTD First Respondent

THOMAS HENDRIK SAMONS Second Respondent

COMPANIES AND INTELLECTUAL PROPERTY COMMISSION Third

Respondent

JUDGMENT

SIKHAKHANE AJ

[1] This application commenced as an application seeking leave in terms of section 133 (1) (b) of the Companies Act, 2008 to launch proceedings and to set aside the resolution to commence business rescue proceedings and placing the first respondent under supervision in terms of section 130 (1) (a) read with section 130 (5) (a) of the Companies Act, 2008 and declaring that the business rescue proceedings had come to an end. This part of the notice of motion was later conceded by the first respondent during the hearing.

[2] What is left to be determined is the remainder of the relief sought in the notice of motion, namely, directing that the second respondent shall not be entitled to charge fees whether as business rescue practitioner or otherwise in the business rescue proceedings in respect of the first respondent. Further, the applicant seeks an order placing the first respondent under final winding-up in the hands of the Master of the High Court.

[3] Only the first respondent has filed opposing papers in this application. Accordingly, the orders sought in respect of the second

respondent remain unchallenged, and to the extent that such relief is permissible, it is granted as unopposed. Although the second

respondent filed his notice of opposition, he never actually filed his opposing affidavit to deal with the allegations that relate to him.

[4] The genesis of the dispute between the applicant and the first respondent is that the first respondent is indebted to the applicants

in the amount of R1,014, 028.07 and R7,753,438.01 which is relates to premium products sold and delivered, as well as bunkering services rendered by the applicants to the first respondent between September 2012 and March 2013. These amounts are indeed reflected in the invoices issued to the first respondent on 31 May 2015 and attached as annexure "FA 8" to the founding affidavit.

[5] There is no dispute as to the fact that the first respondent is indeed indebted to the applicants. The invoices have not been really challenged as inaccurate or fabricated. Some opposition was raised by the first respondent in this regard, but no facts were placed before the court to dispute documentation provided by the applicants, which clearly demonstrates the first respondent's indebtedness to the applicants. The first respondent is required to demonstrate that its dispute is bona fide and is based on reasonable grounds, which means that it must show that its alleged facts constitute a defence in law.

[6] The papers contain various emails exchanged between the parties, showing that the first respondent never challenged the fact that it is indebted to applicant in the specified amounts. Some correspondence shows that the first respondent made undertakings to make payment. For present purposes, therefore, once it is established that the first respondent is indebted to the first respondent, the case is made for the relief sought by the applicants. It is a trite principle that the precise amount owed does not matter once it is acknowledged that it is above the statutory threshold.

[7] It is prudent however, to consider the relevant factual matrix in order to ascertain whether the first respondent is indebted to the applicants. In my view, there is sufficient evidence in the papers, which is not disputed by the first respondent that it indeed owes the applicant the stated amounts.

[8] In an email correspondence of 24 December 2012 addressed to the applicant, the first respondent wrote that: “Many thanks your message noted with your concerns as discussed previously the balance will be settled early 2013 as we are expecting the funds to be in our bank first week January 2013. We would appreciate your understanding and supply accordingly..”

[9] In another email correspondence dated 25 June 2013, the first respondent wrote to the applicant that: "Your email noted, but we are of a view (sic) that this matter can be resolved administratively reason why we have not involved any Lawyer to interact with you. We are going through some financial difficulties and we acknowledge the debt." (my emphasis)

[10] It is not necessary to traverse other correspondence that similarly shows that the first respondent acknowledged its indebtedness to the applicant. The correspondence and documentation contained in the papers show that this fact is, without any doubt, common cause. Accordingly, what remains to be determined is the first respondent's attempts and dealing with this allegation and, for present purposes, the legal consequences thereof.

[11] In its answering affidavit however, the first respondent appears to merely deny its indebtedness despite the trail of documents showing that such indebtedness is common cause. The first respondent does not even provide a contrary version which would suggest a genuine dispute of fact. Instead, it is content to simply state in paragraph 14 of its answering affidavit that ''AUT can at least make some observations that demonstrate that the debt is not due and that the claims of the Applicants are disputed on bona fide and reasonable grounds." This, in my view, does not constitute a bona fide defence. Nor does it purport to give a version contrary to the one alleged by the applicants.

[12] In its answering affidavit (para 27} the first respondent simply states that it paid all its creditors. It merely and vaguely states that "Samons suggested that business rescue would be a suitable option to help AUT through its temporary cash flow issues and accordingly a decision was taken to place AUT in business rescue. AUT then paid all its creditors. AUT did not regard the Applicants as creditors for the amounts they claimed. The Applicants were requested to provide proof of orders sent by AUT for the debts claimed by the Applicants in these proceedings...."

[13] However, the first respondent fails and/or refuses to state who those creditors are. Nor does the first respondent set out any facts to demonstrate that it paid the applicant the amounts owed to it. The inescapable result of the above factual matrix and answers raised by the first respondent is that it is indeed indebted to the applicants. The first respondent clearly refuses to take the court in its confidence and set out in its answering affidavits what the status of its indebtedness is exactly. The applicant correctly states in its replying affidavit that the first respondent has failed to set out any facts stated in paragraph 27 of its answering affidavit. It also alleges that the deponent to the first respondent's answering affidavit, Ndambo, could not have authority to settle amounts owed to creditors while the first respondent remained under business rescue.

[14] Nowhere in its affidavit and argument does the first respondent set out its bona fide defence to the claim of the applicants. Nor does it categorically allege that it paid the said amounts. This is despite the invoices and its own correspondence acknowledging indebtedness as I have identified above. I am not persuaded that the first respondent is being candid with the court in this regard. These, being motion proceedings, nothing prevented the first respondent from setting out in its answers the facts and documentation demonstrating that the version of the applicants is improbable. On the contrary, it is the answering affidavit of the first respondent that fails to even present a contrary version.

[15] The high-water mark of the first respondent's case is to be found in paragraph 13 of its answering affidavit, and even there, it falls short of the standard answer required to contradict a version of an applicant in motion proceedings. Therein the first respondent merely states that ''AUT disputes that it is indebted to the Applicant in the amount claimed or at all. However, it has been adversely prejudiced in dealing with the debt claimed by the Applicant given the inept manner with which it has been pleaded."

[16] It is noteworthy that the first respondent keeps sidestepping its obligation in these proceedings to provide its contrary version. It must be borne in mind that by its own admission, in its previous correspondence, it has admitted its indebtedness to the applicants in the said amounts or some amounts. Rather surprisingly, in these proceedings, the first respondent seems satisfied to oppose by merely stating that it paid all its creditors, without ever wanting to commit whether it actually settled the indebtedness it previously acknowledged. Instead, and in order to strip the applicants of the locus standi to launch these liquidation proceedings, the first respondents simply states in paragraph 27 that ''AUT did not regard the Applicant as creditors for the amounts claimed by them."

[17] I now turn to deal with the first respondent's liability to the applicant. Since the first respondent has failed to demonstrate that the situation changed since it admitted to owing the said amounts to the applicants, the conclusion is inescapable that it owes the amounts as set out in the version present on oath by the applicant. The contents of the letters to which I have referred demonstrate that the first respondent itself acknowledged that it was indebted to the applicant. It pleaded in some of its correspondence that it was unable to pay since it was facing some financial difficulties. Accordingly, the first respondent's acknowledgment of indebtedness is unequivocal, despite its coy approach in its answering affidavit and oral argument.

[18] What therefore remains is the determination of the legal consequences of the above common cause issues and the first respondent's election to merely provide bald denials, even in the face of acknowledgment of its indebtedness. I cannot accept the stance adopted by the first respondent in this regard. It is not sufficient in motion proceedings for a respondent facing claims that are supported by documents, to simply seek refuge in bald denials without any attempt to present a contrary version. In fact, the first respondent has failed to provide the court with its version. The legal principles regarding a respondent's failure to present or substantiate its version are clearly stated in cases like the case of Wightman tla JW Construction v Headfour (Pty) Ltd and Another [2008] ZASCA 6; 2008 (3) SA 371 (SCA), para 12.

[19] Courts should indeed frown upon this approach by any respondent. If a respondent in motion proceedings files an affidavit to contradict the version of an applicant, it must do so candidly and by setting out all the facts that support its version, if any. For present purposes therefore, and in the absence of a contrary version by the first respondent, it must be assumed that it never settled the amounts it admitted to owing to the applicants in its previous correspondence. Had the situation been different, nothing prevented the first respondent to present in its answering affidavit documentation that shows that the amounts owed were indeed settled. Accordingly, it cannot be seriously contended that the applicant is not the first respondent's creditor. It must follow that the applicant has, at least, established on a balance of probabilities, that it is entitled to a provisional winding-up order.

[20] Accordingly, the following order is made:

(a) The applicant is granted leave (by consent) in terms of section 133 (1)(b) of the Companies Act, 2008 to launch these proceedings;

(b) The resolution to commence business rescue proceedings and placing the first respondent under supervision is set aside;

(c) The second respondent shall not be entitled to charge any fees whether as business rescue practitioner or otherwise in the business

rescue proceedings in respect of the first respondent;

(d) The first respondent is placed under provisional winding up in the hands of the Master of the High Court, Johannesburg;

(e) All persons who have a legitimate interest are called upon to put forward on or before 28 November 2016 at 10h00 or so soon thereafter as counsel may be heard their reasons why this court should not order the final winding-up of the first respondent; and

(f) Costs of the application be costs in the winding-up of the first respondent, jointly and severally with the second respondent;

(g) A copy of this order is to be served on the various persons as envisaged in section 346A of the Companies Act 61 of 1973 and be published once in the Government Gazette and once in a newspaper circulating in Gauteng,

(h) A copy of this order is to be furnished to each known creditor and shareholder either per email or per telefax or per registered post.

_________________

M SIKHAKHANE

NAME OF JUDGE AJ ACTING JUDGE OF THE HIGH COURT OFSOUTH AFRICA

GAUTENG LOCAL DIVISION,

JOHANNESBURG

Counsel for the Applicant/ Plaintiff: BM Gilbert and N Dyirakumunda

Instructed by: Shepstone & Wyle Attorneys

Counsel for the Respondent/ Defendant: W B Pye

Instructed by: Shaheed Dollie Incorporated

Date of Hearing:

Date of Judgment: 15 November 2016