CASE N0:58939/2016 DELETE WHICHEVER IS NOT APPLICABU! (1) REPORTABLE: )rl$/no (2) OF INTEREST TO OTHER$ JUDGES: v}l'!/'no 11..(.~\.?:.~Jj... ~.~.... (3) REVISfO ~ V DATE ltna~ In the matter between: ABSA BANK LIMITED and AYIN TRADING (PROPRIETARY) LIMITED APPLICANT RESPONDENT JUQGMENT RANCHODJ: [1] The applicant seeks the final winding up of the respondent on the basis that It is unable to pay its debts ~nd that it is also just and equitable to do so. The cause of action is founded on an suretyship dated 1 July 2014 furnished by the respondent to the appllcant in which it bound itself as surety for the debts of Seriti Printing (Pty) Ltd (Seriti) which is presently in liquidation. The suretyship is for a limited amount of R1,600,000.00.
2 [2] The applicant claims from the respondent R1,224,680.88 together with interest at the rate of 10.5% per annum capitalised monthly as from 28 May 2016 to date of payment, both days Included. [3] The indebtedness arises from the balance of monies lent and advanced by the applicant to Serlti on an overdrawn cheque account number 4054861844 in terms of a banking faoillty letter. The terms and conditions of the agreement between it and Serltl are set out In a banking facility letter and a schedule thereto. Coples of the documents are attached to the founding affidavit as annexures MB1 " and "S2" and are both dated a October 2015. [4] The applicant provided two further banking facility letters under the same c:he~ue eceour,t number on 2!! Februery 2015 and 12 May 2015 which, It says, ware accepted by Seritl on 2 Mareh 2015 and 19 May 2015 respectively. These facility letter$ were attached to applicant's replying affidavit as snnexures "~EP1 " end "REP2". "REP2" was merely an amendmel'lt of "REP1 by increa$ing the overdraft limit while the repayment date remained tt,e same, l,e. 17 Oeeember 2015. [5] The applicant avers that tht amount claimed is due and payable by the respondent es Serltl felled to repay the balenee owed by it to the applicant by the stipulated payment date, being 17 Oeeember 2015. [6] The respondent counters applicant's reliance in the replying affidavit on "REP1" and "REP2" is In effect, the making out of a new cause of action as it was now relying on two other documents whereas In the founding affidavit it relied on "61 " and "B2" respectively. [7] As I said, the suretyshlp was signed on 1 July 2014. Subsequently, Seriti moved its banking facilities to Nedbank. On 22 October 2014 Nedbank settled in ft,jii Seritl's indebtedness to the applicant up to that date. This Is admitted by tht, applicant. The respondent avers that the suretyshlp accordingly came to an end. Any monies lent to Seritl afterward that date are not covered by the surety$hlp agreement.
3 [81 Applicant concedes that the first debt of 2014 was settled by Nedbank. However, it contends that the second debt as evinced by the facility letters dated 25 February 2015 and 12 May 2015 respectively are covered by the suretyshlp as clauses 3.2.8 in "REP1 " and 3.2.7 in "REP2" provide that it was a condition for the granting of those loans that the suretyship of the respondent remained In place as part of the applicant's security. The respondent $ays It was never Informed by the applicant about these later loans to Seritl by the applicant. [9] However, the applicant relies on sub-paragraph 1.2 of the suretyship which provides that the suretyshlp le not only for debts which Seriti then owed the applicant, but any debt which may even be incurred after the signing of the suretyshlp. Clause 1 provides, Inter a/la,: 'Ek I$ ir,gelig dat ek die kredletooreenkoms waarvoor hierdie borgstelllr,g as sekuritelt toegestaan is te enlger tyd,s hoofskuldenaar kan verefel'i 1.1 Wat die debiteur aan die bank skuld of kan skuld ingevolge n skrlftellke eoreenkom& wet tussen die bank en die deblteur aangegaan is of aaagegaan kan wcrd (aoos van tyd tot tyd gewysig, vernuwe of vervana) in;ev<:>lge waarvan die bank n aanvankllke k,pttaalbedrag v,r, tot R aan die deblteur maak: en 1.2 wet die deblteur om watter rede ookal aan die bank skuld of hlerna l<an skuld.... 'Deur hierdle borg,telllr'lg te onderteken, sal u as die borg(e) aanspreekllk wees vir al die skulde wat die debiteur enge tyd ~an die bank skuld (inslultend skulde wat deur die debiteur aangegaan i$ voordat u hierdie borgstelling onderteken het, skulde wat die debiteur aangegaan het nadat u hlerdie borgstelllng onderteken het en alle tipe skuld wat die debiteur aan die bank skuld....' (Loosely translated: 'I have been informed that I can at any time as principal debtor settle the credit agreement in respect of which this suretyship has been given 1.1 whieh the debtor owes to the bank or may owe in terms of a written agreement which has been entered into between the
4 bank and the debtor or which may be entered Into (as amended, renewed or replaced from time to time) in terms of which the bank advances to the debtor an initial capital amount of up to R ;and 1.2 what the debtor owes ~he bank or may hereafter owe.... By signing this suretyship, you as surety (sureties) you will be liable for all the debts that the debtor at any time owes to the bank (including debts which the debtor incurred before you signed this suretyship, debts which the debtor incurred after you signed this suretyship agreement) and all types of debts which the debtor owes to the bank....') (My italics.) [10) The applicant says it is clear that the respondent bound itself for the future debts of Seriti as well and not only for the debts owed when the suretyship was signed. I agree. [11] What the respondent did not mention in its answering affidavit are the two further faellitles that were procured by Seriti on 2 March 2015 and 19 March 2015 respectively. [12] Seriti only went into busine$s rescue on 31 August 2015 after these facilities were granted. The business rescue practitioner (the BRP) then approached the applicant for a variation of the existing facility. The applicant granted the variation or, 8 October 2015. The applicant says the variation was only to the limited extent that the facility was reopened and reactivated and did not entail an amendment or a change of the conditions under which the facility was granted. The reason why the BRP had applied for a variation of the facility was to enable Seriti to continue with post-business rescue finance as it was necessary for Serlti to continue doing business. [13) The respondent says by signing annexure "B1n to the founding affidavit the applicant in effect lent and advanced monies to Seriti while it was under business rescue. The applicant says the true position is that by the time Seriti was placed under business rescue the facilities had already been utilised to
5 their maximum level but as a result of the business rescue the facility was closed. It was thereafter reopened on application by the BRP. This was necessary in an attempt to rescue Seriti. The reopening of the facility therefore did not affect the position of the sureties. Bank statements attached to the replying affidavit show that the overdraft varies slightly between R2.3 million and R2.7 million between 7 September 2015 and B October 2015. On the latter date, when the BRP requested a variation, the balance stood at R2 605 176.44. [14] Seriti continued trading under the supervision of the BRP and the overdraft was substantially reduced to R1 294 461.21 by 2 February 2016. Applicant says this was to the advantage of the respondent as the amount on 2 February 2016 was less than the maximum of R 1.6 million for which the respondent stood surety. [15] The respondent contends that on payment by Nedbank of the debt due in 2014 the suretyship came to an end. This is so because clause 21 of the suretyship provides - 'BEPERKING Ten spite van enlgiets teenstrydigs in hierdie borgstelling, is die bedrag wat die bank van my/ons ingevolge hierdie borgstelling mag verhaal: al ale aanspreeklikheae wat die aebita'1!r teenaer aie sank het of in die teekoms kan ha; beperk tot n maksimum van R1 600 000.00 (EEN MILJOEN SES HONDERD DUISEND RAND) en saam met sodanige verdere bedrae ten opsigte van die opgelope rente ten aansien van die skulde wat deur hierdie borgstelling gesekureer is....' Freely translated it provides - 'LIMITATION 'Notwithstanding any provisions to the contrary in this suretyship the amount which the bank may recover from me/us in terms of this suretyship:
6 all the eeugat.ions which the deetgr may have to tl=le eank or may ha>je in the fl:lture; limited to a maximum of R1 600 000.00... together with such further amounts in respect of accrued interest in respect of debts that are secured by this suretyship.' [16] The respondent contends that the applicant contradicts what is said in Sub-clauses 1.1 and 1.2 of the suretyship in that where in the latter clauses it is said that the suretyship is for existing as well as future debts in clause 21 the liability for future debts has been deleted. The submission cannot pass muster. The deleted portion refers to existing debts as well as future debts. If the respondent's interpretation is correct then it would mean that the suretyship would not apply to debts existing at the time of signing of the suretyship. That would be absurd. I agree with applicant's submission that what clause 21 is clearly dealing with - as the heading 'BEPERKING' ('LIMITATION') indicates - is that either one of the provisions of the two bullet points was to apply, i.e. that the suretyship Is an unlimited one wal die aanspreeklikhede" (all the liabllitles) or a limited one, i.e."beperk tot 'n maksimum van (limited to a maximum of) R1 600 000.00". [17] There is nothing in respondent's version to indicate that it was released from its obligations as surety by the applicant. [18] Lastly, counsel for the respondent argued that certain 'suspensive conditions' listed in ann~xure "B 1" to the founding affidavit were not stated by the applicant to have been fulfilled. This issue has not been raised in the answering affidavit so the applicant did not have an opportunity to deal with it in its replying affidavit. I need not deal with it any further. [19] The formalities when making an application for liquidation have been complied with by the applicant. In my view a proper case has been made out for the relief sought. However, although a provisional winding up order is sought in the notice of motion, in applicant's heads of argument and during the hearing counsel moved for a final winding up order on the basis that it is
7 clear that the respondent formed part of Seriti and was under the management of substantially the same group of natural persons. This has not been denied by the respondent. An attempt was made to rescue Seriti but it failed and is in final liquidation. A. court has a wide and unfettered discretion to grant a final order for winding up. Of importance is that no attempt was made by the respondent. to refute the allegations in the founding affidavit that the respondent was unable to pay Its debts. Instead, it relied on technical points which, in the circumstances, are proven to be untenable. [20] I make the following order: - 20.1 The respondent be and Is hereby placed under final winding up. 20.2 The co~ts of this application are to be costs In the liquidation of the respondent. ~,-HOD OF THE HIGH COURT App1araoceg: Counsel on behalf of Applicant Instructed by : M.P Van Der Merwe (SC) : Tim Du Toit & Co Incorporated Counsel on behalf of Respondent : J Van Rooyen Instructed by Date heard Date delivered : Donne Bruwer Attorneys : 26 October 2017 : 28 February 2018