TUHF Properties (Pty) Ltd v Argyle Court Housing Association and Others (26865/2019) [2025] ZAGPJHC 832 (19 August 2025)

Case Note

Applicant v Housing Association of Argyle Court (NPC) and Others
(High Court of South Africa, Gauteng Division, Johannesburg)
19 August 2025, judgment of Kairinos AJ

NB: The official neutral citation was not supplied in the excerpt. It is rendered here in narrative form.

Reportability

This judgment is reportable because it re-states and develops the principles governing liquidation on the grounds of commercial and factual insolvency, clarifies the discretionary “just and equitable” basis for winding-up, and deals squarely with an increasingly frequent constitutional argument that liquidation may amount to an indirect eviction that infringes section 26 of the Constitution. The decision synthesises earlier authority, affirms that insolvency remedies may be granted ex debito justitiae notwithstanding socio-economic concerns, and explains how the PIE Act operates as a safeguard after liquidation, thereby contributing materially to both company-law and constitutional-law jurisprudence.

Cases Cited

Gillis-Mason Construction Co (Pty) Ltd v Overvaal Crushers (Pty) Ltd 1971 (1) SA 524 (T)
Fakie NO v CCII Systems (Pty) Ltd 2006 (4) SA 326 (SCA)
Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T)
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A)
Rosenbach & Co (Pty) Ltd v Singh’s Bazaars (Pty) Ltd 1962 (4) SA 593 (D)
Johnson v Hirotec (Pty) Ltd 2000 (4) SA 930 (SCA)
Chandlers Ltd v Dealesville Hotel (Pty) Ltd 1954 (4) SA 748 (O)
ABSA Bank Ltd v Rhebokskloof (Pty) Ltd and Others 1993 (4) SA 436 (C)
Boschpoort Ondernemings (Pty) Ltd v ABSA Bank Ltd 2014 (2) SA 518 (SCA)
Sweet v Finbain 1984 (3) SA 441 (W)
Jaftha v Schoeman and Others; Van Rooyen v Stolz and Others 2005 (1) BCLR 78 (CC)
Gundwana v Steko Development and Others 2011 (3) SA 608 (CC)
Bestbier and Others v Nedbank Ltd 2024 (4) SA 331 (CC)

Legislation Cited

Companies Act 61 of 1973 (ss 344, 345, 346, 347)
Alienation of Land Act 66 of 1981 (s 27)
Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998
Gauteng Local Government Ordinance 17 of 1939 (s 49)
Insolvency Act 24 of 1936
Constitution of the Republic of South Africa, 1996 (s 26)

Rules of Court Cited

Uniform Rule 46
Uniform Rule 46A

HEADNOTE

Summary

The applicant sought the final liquidation of the Housing Association of Argyle Court (the first respondent) on the grounds that it was unable to pay its debts and that liquidation was just and equitable. The indebtedness arose from a deferred sale agreement, ancillary loans, insurance premiums, municipal charges and a taxed costs order. The respondents—directors and members of the Association—opposed the application, alleging prescription, disputing the quantum, and contending that liquidation would render residents homeless and jeopardise constitutionally protected housing rights.

After an extensive factual enquiry and consideration of an earlier interim order requiring an administrator’s report, the court found that the applicant had established its locus standi as a creditor, that the Association was both commercially and factually insolvent, and that no realistic plan existed to restore solvency. The court rejected the homelessness argument, holding that any future eviction would have to comply with the PIE Act, and therefore homelessness was neither imminent nor a bar to liquidation.

The court consequently ordered the winding-up of the first respondent in the hands of the Master of the High Court, made costs in the liquidation proceedings costs in the winding-up, and dismissed a joinder application brought to join housing authorities, directing each side to bear its own costs on that interlocutory application.

Key Issues

Whether the applicant had proved that it was a creditor of the Association and thus had standing to apply for its liquidation.

Whether the Association was commercially and/or factually insolvent within the meaning of sections 344(f) and 345 of the Companies Act 61 of 1973.

Whether, notwithstanding insolvency, the court should exercise its discretion to refuse liquidation because winding-up might indirectly violate residents’ rights of access to adequate housing (section 26 of the Constitution).

Held

The applicant is a creditor for more than the statutory minimum; locus standi is established.

The first respondent is both commercially and factually insolvent: its liabilities vastly exceed its assets and it cannot meet debts as they fall due.

It is just and equitable to grant a final winding-up order. The potential risk of homelessness is not a sufficient discretionary reason to refuse liquidation because the PIE Act affords procedural and substantive protections at the eviction stage, not the liquidation stage.

THE FACTS

The Housing Association of Argyle Court was formed under a government-supported “Seven Buildings Project” aimed at enabling low-income residents to acquire ownership of inner-city buildings. Initially the scheme operated effectively, and by 2012 the Association owed the applicant a negligible amount. However, internecine factionalism erupted, paralysing decision-making, splintering management, and leading to the appointment of rival managing agents who failed to account for rental income.

To protect its security, the applicant—who had purchased the building from the liquidator of SBC and on-sold it to the Association on deferred terms—paid municipal charges, insured the premises, and advanced ad hoc loans for venue hire, legal fees and reconnection of electricity when services were cut off. The Association’s debts to both the applicant and the City of Johannesburg escalated dramatically, with municipal arrears alone exceeding R 8 million by 2023.

In 2017 the High Court appointed an administrator. His report confirmed persistent non-payment of rentals, hostile resistance to rent increases, lack of financial records, and the impossibility of implementing a recovery plan without additional funding. Despite temporary efforts, the Association remained illiquid, lacked ready assets, and could not service its mounting liabilities.

THE ISSUES

The court had to determine, first, whether the applicant had the requisite standing as a creditor. Second, whether the Association was unable to pay its debts for purposes of sections 344(f) and 345 of the Companies Act. Third, whether it was just and equitable to dissolve the Association given the socio-economic implications. Finally, the court had to rule on a separate application to join governmental housing authorities, premised on the claim that liquidation would trigger widespread homelessness.

ANALYSIS

Kairinos AJ began by examining the applicant’s standing. The deferred sale agreement expressly required the Association to reimburse insurance premiums and service costs; the Association’s board, including many of the opposing respondents, had passed multiple resolutions acknowledging loans from the applicant. In addition, a taxed costs order of R 63 795.56 was outstanding. These uncontested debts comfortably met the Companies Act threshold and rendered the applicant a creditor.

Turning to insolvency, the court marshalled documentary proof: municipal arrears ballooned from R 2.5 million in 2017 to more than R 8 million by 2023; the Association lacked even R 100 000 to reconnect electricity; and no liquid assets or revenue streams existed to satisfy creditors. Applying the authorities in Rosenbach, ABSA Bank v Rhebokskloof and Boschpoort, the court held that insolvency may be proved “in any other way” and that persistent failure to honour undisputed debts is cogent evidence of commercial insolvency.

On the equitable discretion, the respondents invoked Jaftha and Gundwana, arguing that liquidation would culminate in unconstitutional evictions. The court distinguished those cases as dealing with execution against primary residences. Liquidation, by contrast, does not itself displace occupants; any subsequent eviction must comply with PIE, which provides adequate safeguards. Reliance was also placed on Bestbier, where the Constitutional Court observed that tenants’ rights are protected by statute and need not be joined in property-execution proceedings. Consequently, the spectre of homelessness did not justify refusing liquidation or compelling joinder of housing authorities.

REMEDY

The court placed the Housing Association of Argyle Court under final liquidation in the hands of the Master of the High Court. Costs of the main application were made costs in the liquidation. The joinder application was dismissed, each side to bear its own costs.

LEGAL PRINCIPLES

A creditor armed with an undisputed liquidated claim exceeding R 100 enjoys an ex debito justitiae right to a liquidation order where insolvency is proved; the court’s discretion is narrow and will seldom be exercised against a creditor in such circumstances.

Commercial insolvency is established when a company is unable to meet current liabilities from ready or realisable assets, regardless of asset-to-liability balance sheets. Persistent non-payment of undisputed debts, documented acknowledgments of indebtedness and escalating municipal arrears constitute strong evidence of such insolvency.

The “just and equitable” ground in section 344(h) is wide and not confined to situations analogous to those listed elsewhere in section 344. However, socio-economic considerations do not automatically override a creditor’s right to liquidation; statutory eviction safeguards under PIE adequately protect occupants, meaning liquidation does not in itself abridge section 26 rights.

Finally, the judgment re-affirms that joinder of third-party governmental bodies is unnecessary in liquidation proceedings where their direct, formal interests are not immediately affected, and where existing statutory frameworks already secure the constitutional protections alleged to be imperilled.