The Supreme Court of Appeal today set aside an order liquidating Export Harness Supplies (Pty) Limited (EHS). The order was initially refused by the Johannesburg High Court but granted by the majority of the full court on appeal.
In a further appeal the SCA held that because there were fundamental disputes of fact on the papers which had not been resolved by oral evidence, the applicant for the order, Pasdec Automotive Technologies (Pty) Limited, had not made out a case that EHS was not able to pay its debts; nor was it established that it was just and equitable that EHS be wound up. In addition the statutory notice calling upon EHS to pay the debt claimed by Pasdec (some R6m) had been addressed to the wrong company, which meant that Pasdec was not assisted by the statutory presumption in the Companies Act that EHS could not pay its creditors.
The dispute between the companies had its origin in a contract for the supply of S-Car Motronic Harnesses for motor vehicles to Delphi Packard of General Motors Corporation. Pasdec claimed that it was entitled to the proceeds of the contract, but EHS countered that Pasdec was merely a sub-contractor for the manufacturer of the harnesses. The courts were unable to resolve the dispute.
Pasdec was ordered to pay the costs of EHS in all three courts.