IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO: 56205/2021
(1) REPORTABLE: NO (2) OF INTEREST TO OTHER JUDGES: NO (3) REVISED: YES 31 May 2023 ___________________ Date Signature 
In the matter between:
INHLE BEVERAGES Applicant
And
VIMATRIX (PTY)LTD Respondent
JUDGMENT
SETHUSHA-SHONGWE AJ
1. This is an application for winding up the respondent, which is a private company. The Applicant’s grounds are in terms of section 344 (f) read with section 345 (1) (a) 345 (1) (c) and 344 (h) of the Companies Act “The Act.”
“In that the Respondent should be deemed and be declared to be unable to pay its debts. It is just and equitable that the Respondent be wound up.”
2. Before the main application could proceed, the Respondent brought a point in limine to strike out on certain portions of the Applicant’s replying affidavit on the basis that they are irrelevant.
3. In reply, the Applicant opposed this and stated that Respondent is not stating that the Applicant is raising “new facts.” On that basis the court was not satisfied with the application raised, application to strike out was dismissed.
4. On the main application, the Applicant based its claim on the following;
4.1 “The Applicant duly rendered its service and supplied goods to the Respondent during the period August 2019 and June 2021 and accordingly delivered invoices to the total value of R1 304 571.88 for which the Applicant received partial payment in the sum of R1 185 883.26. The relevant statement date 6 July 2021 indicating aforementioned is attached hereto as Annexure “FA 3” “
4.2 “The Applicant through its attorneys of record (VFV) attorneys served letter in terms of section 345 (1) (a) of The Act on 11 August 2021 through a Sheriff on the Respondent. The relevant letter of demand and Sheriff’s return of service are attached hereto as Annexure FA”4” and FA”5” respectively.”
Further Applicant alleges that Respondent continued to make use of the Applicant’s warehousing service in which the Respondent stored his stock without rental payment despite several demands as per Annexure FA”7”, FA”8” and FA”9”, the Respondent failed, alternatively refused to make payment.
5. The Applicant alleges that in response to the above, on or about 16 March 2021 the Respondent sent an email to the Applicant requesting that it be afforded until 25 March 2021 to make payment as per Annexure FA”10”.
6. As a result of the afore mentioned alleged conduct of the Respondent, the Applicant submit that the only inference to be draw is that the Respondent is unable to meet its obligations as they become due, citing the extension request made by the Respondent as being an indication that Respondent is commercially insolvent. The Respondent is as such, unable to pay its debt as contemplated in section 344 (f) read with section 345 (1) (c) and is therefore liable to be wound up.
7. The Applicant complied with section 346 (3) of the Act by tendering security for costs of this application.
8. The Respondent denies that it is insolvent and indebtedness to the Applicant. Respondent denies that it made undertakings to pay the Applicant an amount of R118 688 62 as well as storage arrear rental. Instead, it states that it entered into a verbal agreement with the Applicant on or about the 4th July 2019 in terms of which the Applicant will mix and dilute the concentrate for the Respondent’s e-max energy drinks, preserve, store, package and load them for distribution.
9. Respondent concede that on or about August 2019, the Applicant produced numerous beverages which were approximately 21 000 (twenty one thousands) and they were stored at the Applicant’s warehouse awaiting dispatch to the Respondent’s clients.
10. Respondent further submits as follows:
“As per parties initial agreement the Applicant charged an amount of R1 151 18524 for the entire mixing, producing, packaging and warehousing. The aforesaid amount was settled on or about the 30th August 2019 by the Respondent as reflected in annexure “FA3” of the founding Affidavit. That alone is a further affirmation to the fact that at all material times the Respondent has never traded insolvent circumstances as alleged by the Applicant”
11. Further, the Respondent alluded that the Applicant charged an amount of R70 241.64 for the re-labelling of the beverages. The Respondent made a payment of R71 241.64 towards the re-labelling of the beverages. The Applicant further demanded a further demand a payment of R43 280 75 towards warehouse services the Respondent tendered full payment to the Applicant on 30th July 2020 as per annexure “MTM 2 to MTM3”
It is the Respondent submission the application by the Applicant constitutes a serious abuse of the court process as the insolvency proceedings cannot be used as means of debt collection. It further denied any alleged indebtedness to the Applicant.
12. The Respondent challenges the procedure through which the Applicant brings an application for liquidation without first bringing an application for interim order. Had this been done and the same is granted, other interested parties would be invited to show cause as to why the liquidation order should not be made final.
13. The issue to be decided is whether or not the Respondent is able to pay its debts.
14. It is trite that unpaid creditor has a right, ex debito justitiae, to a winding up order against the respondent’s company that has not paid its debt. However, it is entirely to the discretion on the court to grant a winding up order or not even though the applicant for such relief has established its case under section 344 (f).
15. See in this regard Standard Bank of South Africa v R Bay Logistics 2013 (2) SA 295 page 300-301 paragraph 27
“There has been judicial debate about whether, for the purpose of section 44 (f) of the old Companies Act, is it possible for the court to conclude up on evidence of actual insolvency that a Company is unable to pay its debts” Certainly proof of actual insolvency of a Respondent company might well provide useful evidence in reaching the conclusion that company is unable to pay its debt but that conclusion does not necessary follow on the other hand if there is evidence that the Respondent company is commercially insolvent that is enough for a court to find that the required case under section 344 (f) has been proved. At that level the possible actual insolvency of the Respondent company is usually only relevant to the exercise of the court’s residual discretion as to whether it should grant a winding up order or not, even though the Applicant for such relief has established its case under section 344 F”
See also Absa Bank Ltd v Rhebok Skloof (pty) Ltd 1993(4) SA 436 page 44
“The concept commercial insolvency as a ground eminently practical and commercially sensible. The primary question called upon to answer in deciding whether or not a company carry on business should be wound up as commercially insolvent is whether or not it has liquid assets or readily realisable assets available to meet its liabilities as they fall due to be met in the ordinary course of business and thereafter to be in a position to trading - In other words, can the company meet current demands on it and remain buoyant? It matters not that the company’s assets fairly valued far exceed its liability, once the court finds that it cannot do this, if follows that and should hold that the company is unable to pay its debts within the meaning within the meaning of section 345(1) (c) it as read with section 344(f) of the Companies Act and is liable to be wounded up.
See also Afrigi Operations Ltd v Hamba Fleet pty (Ltd) 2017 (Jol 375 385) SCA
Where the Supreme Court of Appeal reaffirmed that generally after a creditor’s indebtedness has prima facie been established, the burden of proof where a company debtor seeks to resist an order being made against it then shifts to the company debtor, which must show that the indebtedness was established on bona fide and reasonable grounds.
Discussion
16. The Respondent in discharging its onus, in disputing any indebtedness to the Applicant, referred to several factual disputes of figures and make and explain calculations as reflected in various invoices including “FA3” upon which the Applicant is relying on to seek the order of winding up. Respondent denies indebtedness and showed that he has been mischarged.
17. There is an oral agreement which relates to the terms of the usage of the ware-house by the Respondent. The oral agreement terms and condition thereof can only be proven by oral evidence as it cannot be produced on papers. Respondent successfully proved that the ware house debt raises another material factual dispute.
18. Application of winding up is a drastic and crucial step that needs to be approached with caution in calculating discretionary powers of the court. I find no persuasive grounds that show that the Respondent’s business is no longer in operation, further that its liabilities exceed its assets.
19. On the facts placed before me, I’m unable to say that the Respondent is unable to pay its debt to the Applicant, I have considered the Respondent’s continuous and immediate payment of invoice he received from the Applicant. The facts as they stand they raised material factual dispute of figures on calculation as to how the Applicant is relying on the indebtedness of R118 688 62 as well as warehouse arear rental debt.
20. I find that the Respondent has succeeded in showing material factual disputes showing that the indebtedness established is disputed on bona fide and reasonable grounds. The Applicant therefore failed to make out a case against the respondent for winding up, on the basis that the Respondent is unable to pay its debts.
Order
21. I therefore make the following order;
21.1. Application is dismissed with cost.
____________________________
N.C. SETHUSHA-SHONGWE
Acting Judge of the High Court
Appearances
Counsel for the Applicant : Adv. T.J. JOOSTE
Instructed by : VFT Attorneys
Counsel for the Respondent : Adv. A. RAJAH
Instructed by : Chivizhe Katiyo Attorneys
Date of the hearing : 02 May 2023
Date of judgment : 31 May 2023
Judgment transmitted electronically