IN THE HIGH COURT OF SOUTH AFRICA
(TRANSVAAL PROVINCIAL DIVISION)
CASE NO: 35240/2006
DATE:11 SEPTEMBER
2007
In the matter between:
ESTATE DEBT COLLECTIONS AND AUCTIONEERS
(EDMS) BPK
APPLICANT
and
THE WILCASS GROUP C
RESPONDENT
JUDGMENT
MAKGOKA(AJ)
[1]
This is an application for liquidation of the respondent close
corporation in terms of Section 68 (c) read with Section 69(1)
(a) of the Close Corporation Act 69 of 1984. The Applicant is a
creditor by cession, of the Respondent for R756 715.00
[2]
As a result, Applicant approached this Court to liquidate the
Respondent on the basis that the Respondent is unable to pay
its debt.
The Applicant relies on the deeming provision of
Section 69(1)(a) of the Close Corporation Act, which reads:
2
“69(1) For the purpose of Section 68(c), a corporation
shall be deemed to be unable to pay its debt, ifa) a creditor, by cession or otherwise, to whom
the corporation is indebted in a sum of not less
than R200.00 then due has served on the
corporation, by delivering it at its registered
office, a demand requiring the corporation to
pay the sum so due, and the corporation has
for twenty one (21) days thereafter, rejected to
pay the sum or to secure or compound for it to
reasonable satisfaction of the creditor, orb) any process issued on a judgment, decree or
order of any court in favour of a creditor of the
corporation is returned by the sheriff, or a
messenger
of
a
Magistrate’s
court,
with
endorsement that he has not found sufficient
disposable property to satisfy the judgment,
decree or order, or that disposable property
found did not upon sale, satisfy such process.
or-
c) it is proved to the satisfaction of the Court that
the corporation is unable to pay its debt.”
[3]
On 10 August 2006 a notice in terms of Section 69(1) of the
Act was served by the Sheriff at 6th Avenue, Industrial Area,
Polokwane. The Sheriff’s return reads:
“Op hierdie 10 Augustus 2006 om 13H00 het ek die
3
Adjunk Balju: PA Bornaman, die brief op die Verweerder
Wilcass Group te 6de laan Industriele gebied Polokwane
beteken deur ‘n ware afskrif daarvan op ‘n volwasse
verantwoordelike persoon , Suzan Sisheng in beheer
van
die
perseel
tydens
betokening
te
oorhandig.
Tydens betokening het ek die aard van die dokument
verduidelik, asook die oorspronklike daarvan getoon.”
[4]
It is now common cause that the said office is not the
registered office of the Respondent.
It is further denied on
behalf of the Respondent, that the Respondent received the
said notice.
Mr. Badenhorst, on behalf of the Applicant
submitted that the true test is whether on the balance of
probabilities the notice came to the knowledge of the
Respondent. He further urged me to find that there had been
“substantial
compliance”.
He
sought
to
rely
for
this
submission, on the interpretation of section accorded in
Nathamiel v
Efthymakis Properties v Hartebeesspruit
Landgoed CC 1996(2) ALL SA 317(T).
[5]
In that judgment of Van Dijkhorst J, after analysing the cases
on a similar section 345 of the Companies Act and its
predecessor held that substantial compliance with section 69
of the Act, would suffice.
The Learned Judge, at 322 E-G stated:
“It is clear that in the case of a body corporate which is not company incorporated in terms of Act 61 of 1973, the demand may also be 4
delivered to an officer or in Any manner directed by the Court. It would seem incongruous that in the case of such body, a wide
range of portions are open to the creditor but in the
case of Section 345(1)(a)(i) strict compliance is required
and substantial compliance is inadequate. There is no
difference in object between subsections (i) and (ii). It
is that the corporate bodies concerned be notified that a
demand is made in order that a conclusion of inability to
pay.
The primary concern in both cases is that the
demand comes to the knowledge of the corporate body.
Generally speaking the best may of effecting that is in
the case of a company, by delivering at its registered
office.
I can however, not see why substantial
compliance would not suffice- provided that there is no
proof that the demand did in fact reach management of
the company for which it was intended.”
[6]
At 322. J the Learned Judge proceeded that:
“ with these conclusions in mind I turn to section 69(1)(a) of the Close Corporation Act of 1984 I find no compelling reason to require strict compliance with the provisions thereof, provided it is clear that the close corporation has in fact received the demand. To hold otherwise would elevate from above substance..”
[7]
In the present case, there is no proof before me that the
Respondent has in fact received the demand. I am therefore
unable to agree with Mr Badenhorst’s submission that the test
is whether on a balance of probabilities the notice came to the
knowledge of the Respondent. The test is more stringent than
that, in that proof is required.
[8]
5
As a result, I find that no proper notice in terms of Section
69(1)(a) has been served.
Consequently the application for
provisional liquidation of the Respondent must fail.
[9]
I need to comment on the content of the Sheriff’s return of
service in this matter. In my view, a Sheriff’s return must ex
facia, indicate the nature and title of the document served- if
it is a notice in terms of Statute, as in his case, the return
must indicate the provisions of the statute as it appears on
that particular notice. In this case the Sheriff’s return simply
states that a “letter” was served.
It further appears that a
copy of the said letter was served instead of the original.
[10] Accordingly, I make the following order;
“The application is dismissed with costs.”
________________________________
T M MAKGOKA
ACTING JUDGE OF THE HIGH
COURT.
Date of hearing: 24 AUGUST 2007
Advocate for the Applicant: MA BADENHORST (SC)
Attorneys of Applicant: STRYDOM & BREDNEKAMP ING
Advocate for Respondent: H R FOURIE
Attorneys for Respondent: KWOWLES HUSIAN LINDSAY INC
Date of Judgment:11 SEPTEMBER 2007