- January 25, 2023
- |Concise Law Reports (CLR), Legislation
Bank WHK v Fair View Properties CC NAHCMD (Registration No. 2022/1575) (25 January 2023) and Bank Windhoek Limited v Rehoboth Properties CC (Registration No. 2000/1028) NAHCMD (25 January 2023)
The applicant (a commercial bank) brought winding-up applications to wind up two sister close corporations, namely, Fair View Properties CC and Rehoboth Properties CC – In case no. 2022/00217 Fair View Properties CC admitted under oath that the respondent had no defence to the applicant’s claim for payment in a rescission application that has a direct bearing on, and relevant to, the instant winding-up application – Rehoboth Properties CC (the respondent in case no. 2022/00219) became indebted to the applicant in virtue of a series of loan agreements whereby the applicant loaned moneys to the respondent and an overdraft facility the applicant had extended to the respondent. Additionally, Rehoboth Properties CC concluded a written suretyship in favour of the applicant for the debts of Fair View Properties CC. The court found in each matter that the respondent failed to pay its debt when it became due and payable and when payment was demanded in terms of Act 26 of 1988. The court found further that the respondents were deemed to be unable to pay their debts in terms of section 69(1) Act 26 of 1988. Consequently, on the facts and in the circumstances of the case, the court concluded that the applicant had made out a case for the final winding-up of both respondents.
By agreement between the parties, the matters were heard simultaneously. PARKER, AJ considered the applications and held that:
- The use of the verb ‘deemed’ in the chapeu of section 69(1) of Act 26 of 1988 lays the intention of the Parliament which is this: If any of the circumstances contained in paras (a), (b) and (c) of s 69(1) existed, it would be ‘deemed’, that is, considered, that the corporation was unable to pay its debt; not that the corporation was in fact unable to pay its debt.
- Held, further, Act 26 of 1988 does not require a nulla bona return to be filed with the court for the purposes of the winding up of a close corporation under the Act.
- Held, further, the ex debito justitiae rule does not apply where the unpaid debt which is relied on is bona fide disputed by the respondent.
As a result, the respondents in each matter were placed under final liquidation in the hands of the Master of the High Court. The applicant was ordered to pay the costs of both applications.