THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Case No: 753/2013
Reportable

In the matter between

COENRAD JOHAN LAMPRECHT

APPELLANT

and

KLIPEILAND (PTY) LIMITED

RESPONDENT

Neutral citation: Lamprecht v Klipeiland (Pty) Ltd (753/2013) [2014]
ZASCA 125 (19 September 2014)

Coram:
Cachalia, Bosielo, Shongwe and Swain JJA and Dambuza
AJA

Heard:
03 September 2014

Delivered: 19 September 2014

Summary: Winding-up – Requirements – Section 345(1)(a) of the
Companies Act 61 1993 – Agreement by the parties
regarding respondent‟s locus standi, indebtedness and
whether the debt is due – the legal effect thereof.

___________________________________________________________

ORDER
___________________________________________________________

On appeal from: North Gauteng High Court, Pretoria (Makgoka J sitting
as court of first instance):
It is ordered that:
1. The appeal is upheld.
2. The respondent is ordered to pay the costs on an attorney and client
scale, such costs to include the costs of two counsel where so employed.
3. The order of the high court is set aside and the following order is
substituted in its place:
„(a) The respondent is placed under final winding-up;
(b) The costs of the application including the costs reserved by
Prinsloo J on 21 February 2012, and the costs of the appearances
before Preller J on 19, 20 and 28 September 2012, including the
costs consequent upon the employment of two counsel wherever
employed, are to be costs in the winding up.‟
_______________________________________________________

JUDGMENT
___________________________________________________________

Bosielo JA (Cachalia, Shongwe and Swain JJA and Dambuza AJA
concurring):
[1] This is an appeal, with the leave of the court below, against the
judgment by the North Gauteng High Court, Pretoria (Makgoka J) in
terms whereof he discharged a provisional winding-up order with costs.

[2] Briefly stated the background facts to this case are as follows:
during March 2003 the appellant and the respondent, duly represented by
its directors concluded an agreement in terms whereof the respondent
appointed the appellant as its Project Manager to have its property, the
Remainder of the farm Klipeiland 524 JR, Gauteng, rezoned and
proclaimed a township. This entailed the planning, co-ordination and
supervision of all the professionals to be employed in the process of
establishing a township.  By
September
2007,
the
appellant
had
succeeded to obtain approval for the proposed township from the
Kungwini Local Municipality.

[3] The appellant avers that he was to be paid R6 million as
remuneration for the project under the agreement. However, during
November 2007, the respondent terminated the agreement with the
appellant and appointed Dynadeals Three (Pty) Ltd in his position. The
alleged reason was that the appellant had failed to perform in terms of the
agreement. The appellant regarded this as a repudiation of the agreement,
which he accepted. Alternatively, he regarded it as cancellation of the
agreement.

[4] Based on the alleged repudiation or cancellation of the contract, the
appellant demanded the R6 million from the respondent as his
compensation. When the respondent failed to pay, the appellant served a
formal demand for payment in terms of s 345(1)(a) of the Companies Act
61 of 1973 (the Companies Act) on the respondent. Despite numerous
meetings between the appellant and Jung-FuTsai, one of the respondent‟s
directors, and his undertaking to pay, no payment materialised. As a
result the appellant instituted motion proceedings to have the respondent

wound up. The respondent opposed the application and filed an
answering affidavit.

[5] The respondent raised a number of points in limine. Essentially, it
denied that s 345(1)(a) was applicable as the appellant had not proved
that his claim was liquid, and, further that the respondent was unable to
pay its debt as envisaged by s 345(1)(a) of the Companies Act.
Importantly, the respondent denied that it had agreed to pay the appellant
R6 million for the project as alleged by the appellant. Its version of the
agreement was that the appellant would be paid in kind, by way of
transfer to him of 61, 3877 hectares of land, being the remaining portion
of the total extent of the land in issue. This was to be effected once the
appellant had succeeded in having the land rezoned from agricultural
land, its establishment and proclamation as a township, and its
subdivision. This had to be followed by a sale of approximately 192, 11
hectares for R120 million, and the issuing of a certificate in terms of s 82
of the Town Planning and Townships Ordinance 15 of 1986.

[6] Johannes Paulus Van Wyk (Van Wyk), who described himself as a
town planner deposed to an affidavit in support of the appellant. He
confirmed that he was appointed to undertake the establishment of a
township on the respondent‟s property. He was to perform his duties
under the supervision of the appellant who was the Project Manager.
Essentially, he confirmed that he secured the approval for the
establishment of the township from Kungwini Local Municipality as well
as approval from the Department of Agriculture in terms of the
subdivision of Agricultural Land Act 70 of 1970. This he accomplished
under the supervision of the appellant as the Project Manager. Of

importance, he explained that whatever delays were occasioned regarding
the approval of the establishment of the township could not be attributed
to the appellant. He ascribed these delays to systemic problems. He
confirmed that he was duly paid by the respondent for the work which he
did.

[7] This application was enrolled on 20 May 2011 before Ranchod J,
who, on finding that the matter presented serious disputes of fact on
numerous issues, declined to grant the provisional winding up order.
Instead, he referred the matter to oral evidence as follows:
„2. Oral evidence shall be heard on the following issues whether the applicant is a
creditor of the respondent within the meaning of section 345(1)(a) of the Companies
Act (61 of 1973) ie “a creditor…to whom the company is indebted in a sum not less
than one hundred rand then due…” and thus has locus standi such that it can rely on
section 345(1)(a) of the Companies Act?

[8] On 19 March 2012, whilst oral evidence was being led, the parties
interrupted the proceedings and reached an agreement regarding the
appellant‟s locus standi. With the consent of both legal representatives,
this agreement was made an order of court by Kruger AJ on 20 March
2012. The relevant part of the order reads:
„That by agreement between the parties the respondent admits and concedes that the
applicant is a creditor of the respondent within the meaning of section 345 (1)(a) of
the Company‟s Act, ie, a creditor to whom the respondent is indebted in a sum not
less than R100 then due and thus has locus standi such that it can rely on section
345(1)(a) of the Company‟s Act 61 of 1973‟.

[9] On 24 April 2012, the matter came before Davis AJ in the opposed
roll who granted the provisional order with 5 June 2012 being the return

day. On the return day the matter came before Makgoka J who discharged
the provisional winding up order with costs. The reasoning underlying the
judgment is set out as follows:
„[11] On a plain reading of the court order, the respondent admits that the applicant
is its creditor of a sum of not less than R100. There is no mention of an amount of
R6 000 000 or for payment of any other fixed amount of money. If it was the
respondent‟s intention to admit the full amount, it would have done so expressly. The
admission is patently nothing more than an admission of an illiquid amount of money.
[12] I therefore do not agree with the contention that the applicant is entitled to the
R6 000 000. It is common cause that the applicant never completed his mandate. He is
therefore not entitled to the initially agreed amount of R6 000 000. He is entitled to
claim damages, which must still be quantified (BK Tooling v Scope Precision
Engineering 1979 (1) SA 391 (A).
[13] The fact that the respondent was not willing to admit that no more than R100
was due and payable is a clear indication of the respondent‟s intention to place the
balance of the amount claimed in dispute…‟

[10] Contrary to the finding by the court below, the appellant did not
claim the R6 million in this winding-up application. All he wanted was to
assert or establish his locus standi under s 345(1)(a) of the Act as a
creditor owed an amount of no less than R100 which amount was due and
payable. The dispute as to what is owed will be settled either by the
liquidator after the appellant has lodged his claim or by court in the event
that the creditor and liquidator are unable to agree on the amount payable.

[11] As clearly foreshadowed in his heads of argument, appellant‟s
counsel relied primarily on the order made by Kruger AJ. He contended
that on a simple reading of this order, the respondent knowingly conceded
that he was the appellant‟s debtor as contemplated by s 345(1)(a), with a
claim of no less than R100 and further that the money was due and

payable. Furthermore, he submitted that the respondent‟s failure to satisfy
the s 345(1)(a) demand is clear proof of its commercial insolvency. He
contended further that the effect of the concession was that the appellant‟s
debt was liquidated, that the debt was extant at the time when the s
345(1)(a) notice was served on the respondent, and further that the debt
was due and payable. This, he contended, gave the appellant the right and
locus standi to liquidate the respondent as it was proved that it was
commercially insolvent as contemplated in ss 344(f) and 345(1)(a).

[12] On the other hand, the respondent‟s counsel assailed the validity of
the agreement concluded by the parties. The essence of his contention
was that the concession was made erroneously as the respondent never
intended to admit any indebtedness. However, he was not able to offer
any explanation as to why no effort had been made to withdraw this
concession. In conclusion he submitted that the amount claimed by the
appellant was not liquid as there was still a dispute regarding the precise
amount agreed upon as remuneration for the appellant. He argued further
that as the appellant had not performed fully in terms of the agreement,
his claim was for damages which still had to be computed, hence it could
not be said to be liquid.

[13] It is common cause that the court order issued by Kruger AJ is still
valid. This order is couched in exactly the same words used in s
345(1)(a). It is noteworthy that the agreement that gave birth to this court
order was made precisely to address the vexed dispute around whether the
appellant is the respondent‟s creditor for an amount of not less than R100
and whether the money was due. The wording used is clear and
unambiguous. There is in my view no room for any misunderstanding by
any of the parties concerning what they agreed on. As a result, I am

constrained to find that the respondent is either being disingenuous in
denying that he knew what he signed and agreed to, or that he was plainly
dishonest with the court and the appellant. This conduct is reprehensible
and deserving of censure. In addition, counsel for the respondent
conceded that the concession made by the respondent in consenting to the
order made by Kruger AJ was to avoid the respondent‟s representative
giving evidence. The terms of the order directly contradicted the
respondent‟s version on oath that the respondent had never agreed to pay
the appellant a sum of money in whatever amount.

[14] Section 345(1)(a) of the Companies Act provides that:
„(1) A company or body corporate shall be deemed to be unable to pay its debts if –
(a) a creditor, by cession or otherwise, to whom the company is indebted in a sum not
less than one hundred rand then due −
(i)
has served on the company, by leaving the same at its registered office, a
demand      requiring the company to pay the sum so due; or
(ii)
in the case of anybody corporate not incorporated under this Act, has served
such demand by leaving it at its main office or delivering it to the secretary or
some director, manager or principal officer of such body corporate or in such
other manner as the court may direct,
and the company or body corporate has for three weeks thereafter neglected to pay the
sum, or to secure or compound for it to the reasonable satisfaction of the creditor.‟

[15] To meet the threshold laid down in s 345(1)(a) it is essential that an
applicant prove three essential requirements. These are, first, that he or
she is a creditor of the respondent for an amount not less than R100,
secondly, which must be due and payable. In other words, the debt must
be liquid. Third, there must be proof that, notwithstanding service of the s
345(1)(a) notice, the debtor has neither paid the amount claimed nor
secured or compounded  it to the reasonable satisfaction of the creditor.

[16] I have already found that the agreement was made an order of court
by Kruger AJ was valid. This leads me to find that the respondent
conceded that the appellant had locus standi, that he was a creditor for a
sum no less than R100 and further that it was due and payable. There is
no dispute that although the s 345(1)(a) demand was served on the
respondent, it has not paid any amount nor secured or compounded any
amount to the reasonable satisfaction of the appellant. To my mind, the
jurisdictional requirements set out in s 345(1)(a) have been met. As stated
by Malan J (as he then was) in Body Corporate of Fish Eagle v Group
Twelve Investments 2003 (5) SA 414 (W) at 428B-C:
„The deeming provision of s 345(1)(a) of the Companies Act creates a rebuttable
presumption to the effect that the respondent is unable to pay its debts (Ter Beek‟s
case supra at 331F). If the respondent admits a debt over R100, even though the
respondent‟s indebtedness is less than the amount the applicant demanded in terms of
s 345(1)(a) of the Companies Act, then on the respondent‟s own version, the applicant
is entitled to succeed in its liquidation application and the conclusion of law is that the
respondent is unable to pay its debts.‟
It follows that the court below erred in discharging the provisional
winding up order.

[17] What remains now is the issue of costs. The appellant‟s counsel
asked for a punitive order of costs. His primary reason was that the
respondent proved itself to be a mendacious litigant. It made conflicting
and mutually contradictory averments in its affidavit. Initially, it
emphatically denied any monetary indebtedness to the appellant. Later, as
pointed out above, during the trial, it performed a volte face and admitted
a monetary indebtedness to the appellant in an agreement which was
made an order of court. In its appeal to this Court, it attacked the validity
of that agreement. The appellant‟s counsel submitted that, given the court
order referred to above, the respondent‟s opposition of the application for

its liquidation was both vexatious and frivolous, and must be visited with
a punitive order of costs.

[18] Respondent‟s counsel countered this by contending that the
respondent was entitled to oppose the application for its liquidation as the
applicant‟s claim is not liquid because the amount claimed by the
applicant is seriously disputed. In conclusion, he submitted that
objectively speaking, there was nothing untoward in the respondent‟s
opposition to the application. He concluded by submitting that there is no
basis for a punitive cost order.

[19] I have already said that the respondent behaved in a reprehensible
manner. He put up strong opposition to the appellant‟s claim even in the
face of an order of court made with its consent. This it did without any
attempt to have the court order rescinded, varied or set aside. It is trite
that every order which has been issued by a competent court remains
valid and enforceable until it is rescinded, varied or set aside by a
competent court. The respondent could not willy-nilly disregard the court
order made by Kruger AJ. To my mind, the respondent‟s conduct
amounts to an abuse of the court‟s process. The appellant has been put to
unnecessary trouble and litigation costs. Justice and fairness requires that
the respondent be ordered to pay the costs of the application on a punitive
scale. See In Re Alluvial Creek Ltd 1929 CPD 532 at 535.

[20] In the result, the following order is made:
1. The appeal is upheld.
2. The respondent is ordered to pay the costs on an attorney and client
scale, such costs to include the costs of two counsel where so employed.

3. The order of the high court is set aside and the following order is
substituted in its place:
„(a) The respondent is placed under final winding-up;
(b) The costs of the application including the costs reserved by
Prinsloo J on 21 February 2012, and the costs of the appearances
before Preller J on 19, 20 and 28 September 2012, including the
costs consequent upon the employment of two counsel wherever
employed, are to be costs in the winding up.‟

_________________

L O BOSIELO

JUDGE OF APPEAL

Appearances:
For Appellant
:
L W De Koning SC

Instructed by:
Gerhard Botha & Partners Inc.; Pretoria

Phatshoane Henny Attorneys, Bloemfontein

For Respondent
:
A B Rossouw SC (with him F Saint)

Instructed by:

Afzal Lahree Attorneys; Johannesburg

Azar & Havenga Inc., Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

19 September 2014

STATUS

Immediate

Please note that the media summary is intended for the benefit of the media and does
not form part of the judgment of the Supreme Court of Appeal.

COENRAD JOHAN LAMPRECHT v KLIPEILAND (PTY) LTD (753/13) [2013] ZASCA 125
(19 September 2014)

The Supreme Court of Appeal (SCA) today upheld with costs an appeal by Mr Lamprecht
against a judgment of the North-Gauteng High Court, Pretoria discharging a provisional
winding-up of the respondent with costs.

The high court had found that Mr Lamprecht had not satisfied the jurisdictional requirements
for a winding-up of a company as set out in s 345(1)(a) of the Companies Act 61 of 1973.
Essentially, the high court had found that as the amount claimed by Mr Lamprecht was
disputed by the respondent, the amount owed was not liquid as contemplated by s 345(1)(a)
of the Act.

On appeal, the appellant relied on an order of court in terms whereof the respondent had
virtually admitted all the three jurisdictional requirements for a winding-up as set out in s
345(1)(a) in that it had agreed that the appellant is its creditor, for an amount not less than
R100 and further that the debt was due and payable. Furthermore, it averred that the failure
by the respondent to satisfy the amount claimed justifies the presumption that it was
commercially insolvent.

The SCA held that winding-up proceedings are not a mechanism for the recovery of a debt. It
is a mechanism which an applicant can use to establish its locus standi under s 345(1)(a) of
the Act.

Having found that the appellant had met all the three jurisdictional requirements for a winding-
up order, the SCA set the judgment of the court below aside and replaced with an order that
the respondent is placed under a final winding-up order and that the costs be costs in the
winding-up.

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