Sumeil (Pty) Ltd v Coogal Finance (Pty) Ltd (In Liquidation) and Others

Coogal Finance (Pty) Ltd, later placed in liquidation, leased four Volvo trucks to Sumeil (Pty) Ltd under master rental agreements that included monthly rentals and final balloon payments, with ownership to pass to Sumeil upon completion. Prior to Coogal’s deemed date of liquidation (4 February 2019), the parties’ accounting records reflected mutual debits and credits. Coogal’s liquidator alleged that Sumeil owed Coogal R185 000 in rental arrears and R759 000 in balloon payments (total R944 000). Sumeil admitted the ledger debit of R185 000 but contended that, when all ledgers were reconciled, Coogal in fact owed Sumeil a net amount exceeding R1.2 million, so that the R185 000 was extinguished by set-off before liquidation. The balloon payments were paid after the deemed date of liquidation by a related trust directly to ABSA (the financier of the trucks). Coogal nevertheless sought, in motion proceedings, payment of R944 000 from Sumeil. The High Court dismissed liquidation relief but granted the monetary claim; the full court confirmed that order, leading to the appeal to the Supreme Court of Appeal.

The appeal was upheld with costs. The orders of the full court and the High Court granting payment were set aside, and the application against Sumeil for payment of R944 000 and interest was dismissed.

The case clarifies the application of set-off in the context of liquidation, reaffirming that set-off operates only if mutual, liquidated, and due debts exist before the concursus creditorum. It also underscores that a liquidator enforcing an executory reciprocal contract must tender performance and cannot obtain payment merely on accounting entries. The judgment reinforces proper application of the Plascon-Evans rule in motion proceedings involving monetary claims.