Standard Bank of South Africa Limited v Khewija Engineering and Construction (Pty) Limited (2022/16061) [2025] ZAGPJHC 5 (10 January 2025)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, JOHANNESBURG)

CASE NO: 2022/16061

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED.

10 January 2025

In the matter between:

THE STANDARD BANK OF SOUTH AFRICA LIMITED Applicant and KHEWIJA ENGINEERING & CONSTRUCTION (PTY) LTD (Registration Number: 2009/021544/07) Respondent

This judgment was handed down electronically by circulation to the parties and/or parties’ representatives by email and by upload to CaseLines. The date and time for hand down is deemed to be 10h00 on 10 January 2025

JUDGMENT

S VAN NIEUWENHUIZEN AJ

INTRODUCTION

1 This matter was called before me on 26 November 2024 in the opposed motion court whereafter it became clear that it is in fact unopposed and that only the applicant was represented.

2 The applicant (“the bank”) seeks an order to the effect that the respondent (“the company“) should be placed in final winding-up. The application is based on the company’s inability to pay its debts.

3 In view of certain procedural aspects raised by the bank’s counsel at the outset, there is no need to refer to the merits of the matter.

4 The “joint practice” note filed by the bank’s attorneys is in fact a unilateral practice note in as much as the respondent did not take any further part in the proceedings after filing its answering affidavit and counter-application.

5 The company’s erstwhile attorneys withdrew as attorneys of record on 29 February 2024. The deponent to the answering affidavit of the respondent, Mr. Mabuza, acknowledged receipt of the notice of withdrawal of the company’s attorneys of record.

6 According to the notice of withdrawal of record the company's last known address is Unit […] F[…] O[…] P[…],

Corner Ro[…] and F[…] B[…] F[…] 2[…]. The deponent to the companies answering affidavit acknowledged

receipt of same.

7 On 4 April 2024 the bank’s attorneys attempted to serve a notice of opposition to the counter-application at the aforesaid address, only to find that the address has been vacated. After a Windeed search all subsequent notices and proceedings were served at the company's new address i.e. C[…] O[…] O[…] P[…], P[…] S[…] S[…], Ext 6[…], P[…] 5[…]. of the Farm Drie, Mpumalanga, 2302.

ANALYSIS

8 The procedural problem alluded to by the bank’s counsel pertains to the fact that an application for provisional winding-up has already been granted against the company under Case Number 4803/2023, in the Mpumalanga Division of the High Court of South Africa, Middelburg, on 26 July 2024, returnable on 23 September 2024. On 23 September 2024 the provisional order for winding-up was extended to 22 November 2024.

9 When the matter was called the bank’s counsel pointed out that in response to the most recent inquiries made by the bank's attorneys’, they were informed that the Middelburg High Court has not as yet pronounced as to whether a final liquidation order is granted or not. My understanding of the position is that the applicant in the Middelburg matter is still awaiting the outcome of the application for final liquidation which was sought on 22 November 2024.

10 In the absence of an assurance that the liquidation application in the Middelburg matter has been finally dismissed, I must assume that the provisional order is still in place.

11 I was urged by counsel for the bank to consider whether I am not entitled to grant an application for final winding-up in the present matter.

12 I was specifically referred to the decision in Ex parte W J Upton Transport(Pty)Ltd; Man Truck & Bus (SA) (Pty) Ltd v W J Upton Transport(Pty) Ltd [1] where Flemming J held as follows:

“I believe that there is adequate reason to suspect that the finality achieved on that date was to some extent attributable to my attitude that there should be finality one way or the other in liquidation applications unless a case of adequate strength for the extension of the return date is made out. Undue rigidity in that regard may obviously cause injustice. Injustice should, however, not be caused by a proper scrutiny of the actual existence of true justification of an extension. Such a scrutiny is necessary for various reasons of which two only need be mentioned. Firstly, the existence of a provisional liquidation order creates an inability on the part of creditors to receive payment or to enforce payment by way of execution or other positive conduct. The Court should ensure that there is adequate justification for prolonging in effect, if not in design, a moratorium to the company in provisional liquidation. Secondly, there is no alternative to such scrutiny which is truly effective to protect the general body of creditors against costs of legal fees, administration costs and other financial disadvantages which are run up in the process of granting extensions.” [2]

(my underlining)

13 He also held that:

“There appears to be, to say the least, room for the view that, once a provisional winding-up order has been made, there is no room for a second order to create the same result and that accordingly a second order should be refused. Cf Cohen Brothers and Co v Benjamin; Jagger and Co v Benjamin 1912 WLD 42 and Pat C Cornick and Co (Pty) Ltd v Mimosa Meubels (Edms) Bpk; Bakker & Steyger (1960) (Pty) Ltd v Mimosa Meubels (Edms) Bpk 1961 (4) SA 119 (T) where a "practice" is referred to. Cf also Ex parte De Villiers and Van Niekerk: In re Hill and Son 1918 WLD 15 wherein it was, inter alia, said: "It is the business of attorneys to see that there is not already a provisional order taken out". As this aspect has not been argued, I prefer to leave that question open. Assuming the validity of both orders and accordingly the

presence of that basis for costs, It would appear to be a sound approach, finding some authority in relation to sequestration, to view the knowledge of an existing order or of a competing application as an important consideration affecting the award of costs. Compare, although not directly in point, Butcher and Sons Ltd v Moola & Co; Elephant Trading Co Ltd v Moola & Co 1929 TPD 402; Nunnerley and Co Ltd v Patel 1930 TPD 116 and the general approach to competing applications for sequestration.” [3] (my underlining)

14 Prior to the aforesaid decision the practise in this division was that the court routinely granted provisional liquidation orders and only after the return date of a rule nisi, a final order. In the above decision Flemming J made it clear that it is undesirable that provisional orders be granted and extended from time to time without proper motivation. Thereafter the granting of a provisional order for winding-up became the exception and in appropriate matters a final order, with no intervening rule nisi, the norm

15 I cannot fault this approach especially in circumstances where two competing applications for liquidation are brought and both creditors

are aware of each other's application or could have become aware thereof by making reasonable enquiries.

16 In arriving at the above conclusions Flemming J made no mention of the backdating (at times referred to as ante-dating) of the commencement

of winding-up as referred to in section 348 of the Act which reads as follows:

“The winding-up of a company by the Court shall be deemed to commence at the time of the presentation to the Court of the application for the winding-up.”

17 I was also referred to the decision in Voltex (Pty) Limited v Resilient Rock(Pty) Limited 2023 JDR 2011 (GJ) as well as the numerous decisions referred to in that case.

18 The bank’s counsel (correctly so) made it clear that the Voltex decision (same being an appeal) is not authority that I may rely on to avoid the provisions of section 347(5) of the Act. This section provides as follows:

“The Court shall not grant a final winding-up order in the case of a company or other body corporate which is already being wound up by order of Court within the Republic".

19 The bank’s attorneys could not have foreseen that an application for the winding-up of the company will be launched in Middelburg. They can thus not be blamed for the present state of affairs where two applications for a final winding-up of the company are pending before different divisions of the High Court, and in one of which a provisional order for liquidation has already been granted.

20 The bank’s counsel specifically submitted that the commencement of winding-up in the present matter will predate the commencement of winding-up in the Middelburg matter should I grant any kind of winding-up relief. I accept that this is of great importance to the creditors of the company.

21 Nevertheless I am of the view that I do not have the power to grant any final liquidation order. This is so given that on a plain reading of section 347(5) of the Act, it does not permit me to grant the relief sought. The company is already “being wound up” up due to the provisional order that has been granted in Middelburg. I may either dismiss the present application for winding-up or exercise my discretion to postpone same to a later date which will permit the bank to move the application for final liquidation in the event that the provisional winding-up order in the Middelburg matter is by such date discharged.

22 So as to preserve the potential benefit that may be bestowed on creditors in terms of section 348 of the Act, (should the provisional

order in Middelburg be discharged) I am of the view that this matter should be postponed to 21 July 2025, same being a date having been obtained from the Registrar for use in the event of the above outcome.

23 In the circumstances I make the following orders:

1. The application for winding-up of the respondent is postponed for hearing to the opposed roll of 21 July 2025;

2. The costs of the hearing on 26 November 2024 are reserved for hearing on 21July 2025.

ACTING JUDGE OF THE HIGH COURT

Date Judgment reserved: Date Judgment delivered: 26 November 2024 10 January 2025 Representation for applicant Counsel: Adv S Symon S.C. Instructed by: Martins Weir Smith Inc, Hans Merensky Office Park, Ground Floor, Block D, Bedfordview Tel: 011 450 3054 Fax : 086 591 3424 Email: alexb@mwlaw.co.za REF:MR MARTINS/AP/T489 Representation respondent: Counsel: None Instructing Attorney None Respondent’s Address: Charlie One Office Park, Piper Str Secunda Ext 64, Erf 5[…] Portion 5[…] of F[…] Drie, Mpumalanga 2302 Deponent to Answering Affidavit’s Email Address: Themba.Mabuza@khewija.com

[1] 1985 (1) SA 312 (W)

[2] See p 313 B-F

[3] See p 316B-E.