A DURBAN logistics and plant-hire company that reneged on a deal to pay off its debt to a bank could soon have its assets seized.
The Pietermaritzburg High Court ruled last week that Absa bank was entitled to attach a vast array of assets belonging to Crossmoor Transport at its countrywide operations.
This, after Crossmoor brought an urgent High Court application last month to prevent the repossession.
Absa, represented by advocate Dees Ramdhani SC challenged the application which was presided over by Judge Piet Koen.
Judge Koen said the company “has only itself to blame” for the outcome, but Crossmoor’s legal representative, Joshua Greenberg, a director at law firm SWVG Inc Attorneys, said the decision would be appealed.
Crossmoor had over time entered into credit agreements with Absa to secure the purchase of various assets but missed repayments due.
With Crossmoor owing the bank R135 million, Absa brought a liquidation application, which was made final in September 2021.
Crossmoor is owned by the Durban-based Naicker family, whose sister, Sandra Moonsamy, was kidnapped in May 2019 and rescued six months later.
It was previously raised in court that the kidnapping of Moonsamy - the company’s CFO - contributed to the businesses’ cash-flow challenges.
A Media24 article published this week drew attention to other legal battle’s that Crossmoor was locked in regarding mega-business deals with government entities.
In November 2021, Crossmoor entered into a settlement agreement for its debt of R135m plus interest with Absa so that the granted final liquidation application would not take effect.
Accordingly, a consent application was brought before the High Court to make the terms of the settlement agreement an order of the court, which was finalised in December that year.
Some of the terms of the agreement were that Crossmoor pay the stipulated monthly amounts to clear its debt with Absa over a set period.
It was agreed that if Crossmoor failed to make any payment according to the court order, the sheriff of the court was authorised to attach all the relevant assets mentioned in the agreement.
Absa entered the agreement with all its credit terms and conditions over Crossmoor’s respective assets still intact, and that the said items would remain the property of the bank until the full outstanding balance had been settled.
However, Crossmoor defaulted with a payment and Absa made a written demand on October 4, 2022, for the company to remedy the situation by paying an amount of over R5.3m within 5 days, failing which the bank would proceed with execution.
Crossmoor did not fulfil that obligation.
Absa issued a writ to Crossmoor a month later for assets and the company continued to make repayments until June this year, but not in accordance with what was agreed.
In July, the sheriff traced and attached some of Crossmoor’s assets. The company made its urgent bid to stay and suspend the repossession, which came before Judge Koen.
Crossmoor’s application hinged on three issues.
They claimed that Absa failed to deliver documents to effect the transfer of assets that were fully paid-up and this failure excused Crossmoor from making further payments.
Therefore, they were not in default and the suspension of the order compelling the company to hand over assets remained.
Absa, by receiving and retaining payments made by Crossmoor after its default had waived its right to proceed with the execution of repossession.
Crossmoor also believed that they acquired ownership of certain assets because it had made full payment. The company claimed had Absa properly allocated the said payments, this would have amounted to full payments being achieved for some assets and ownership would have passed to Crossmoor.
In response to Crossmoor’s three-pronged points of legal defence, Judge Koen said he afforded them the opportunity to explain how Absa’s failure to deliver documents excused the company from making remaining payments.
In analysing what they raised on this issue in court document, Judge Koen said: “Crossmoor’s contention is without any merit.
“There is no basis in law to find that the failure to deliver documentation in respect of an asset would excuse the withholding of further payment that was due.”
Judge Koen said Crossmoor had to show that Absa had, with full knowledge, decided to abandon its right to enforce the court order for the return of the assets.
He was cognisant that the company continued to make payments after its breach in October 2022. But he said when those payments were being made, the legal position was that the suspension part of the December 2021 court order, which enabled Crossmoor to hold onto its assets, had automatically fallen away.
“Crossmoor was required to deliver the outstanding assets. The fact that Absa kept the payments did not mean Absa elected to abandon its remedy to cancel the credit agreements.”
Judge Koen also noted that correspondence between the parties’ legal teams indicated an intention to secure a return of the assets.
He acknowledged the attempts to trace the whereabouts of the assets after the sheriff could not find them.
“There is simply no substance to the contention that Absa waived its right to enforce the court order for the return of its assets,” he said.
Judge Koen was steadfast that Absa was entitled, following Crossmoor’s breach, to enforce the order for the return of the assets.
“Absa never exhibited an election to the contrary. The repayment arrangement was an indulgence and not a reinstatement of the various credit arrangements.”
Judge Koen said it was Crossmoor’s responsibility to show that it had fully paid for certain assets, and had not done so, while Absa insisted that no assets on the writ had been fully paid for.
“He who alleges must prove.”
Judge Koen said the assets in question were substantial and would leave Crossmoor without the ability to generate an income.
“I have no evidence as to what impact the execution of the court order would have on Crossmoor’s business.”
He said the company had only itself to blame for its predicament, which could have been avoided had it honoured the agreed upon payment arrangement.
Greenberg said: “The judgement will be appealed and, accordingly, the present outcome is thus not final insofar as the matter will be sub judice and in this regard our client will provide no further comment.”
SUNDAY TRIBUNE