IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
Case number: 4425/24
In the application between:
THOMAS CHRISTOPHER VAN ZYL N.O.
First Applicant
DEIDRE BASSON N.O. Second Applicant
In their capacities as duly appointed final liquidators of
Senqu Coal Trading (Pty) Ltd,
Registration No: 2018/043976/07)
and
COMETA TRADING (PTY) LTD
Respondent
(Application seeking disposition in terms of
s 341(2) of the 1973 Companies Act)
Before: The Hon. Mr Acting Justice Montzinger
Hearing: 02 August 2024
Judgment delivered electronically: 14 November 2024
JUDGMENT
Montzinger AJ
Summary Introduction
1. The applicants, in their capacity as the liquidators of Senqu Coal Trading (Pty)
Ltd (“Senqu”), have approached this court seeking an order to recover a
disposition in the amount of R710,763.92. After the commencement of
Senqu’s winding -up t his sum was paid from its bank account to the
respondent, Cometa Trading (Pty) Ltd (“Cometa”).
2. Senqu use to operate a coal mine and in July 2018 entered into an agreement
with Pindulo VDM Proprietary Limited (“Pindulo”) for the sale of coal. In terms
of the agreement, Pindulo was required to make upfront payments for its coal
purchases. By October 2018, despite having received payment Senqu
allegedly default ed on its delivery obligations. This alleged default led to a
dispute between the parties, culmin ating on 23 February 2022 when Pindulo
instituted winding-up proceedings against Senqu for its failure to repay
R6,286,228.90, the balance of the upfront payment . On 1 March 2022 t he
Sheriff served the winding-up application on Senqu at its registered address.
3. Senqu’s provisional winding-up was ordered on 25 March 2022, followed by a
final winding-up order on 6 May 2022. On 13 September 2022, the final
liquidators were appointed and pursuant to their appointment assumed control
of Senqu’s assets, including its bank accounts. The liquidators discovered that
while Senqu had ceased trading as early as 2019 its bank accounts remained
active. They also learned that the se bank accounts were apparently used by
Cometa and other entities controlled by a Mr. Pri tchard as cash holding
accounts.
4. It later surfaced that on the same day the sheriff served the winding-up
application payment of R710,763.92 was transferred from Senqu’s First
National Bank account (the "706-account") to Cometa. This transfer was done
by a representative of Cometa who had access to Senqu’s bank a ccounts.
The liquidators were of the view that since the transfer from Senqu’s 706 -
account to Cometa was after the commencement of the winding -up
proceedings it constituted a disposition in an attempt to place Senqu’s
property beyond the reach of its creditors. It made a demand to Cometa to
repay the funds, which was refused.
5. Consequently, the liquidators s ought this court’s intervention under ss 341(2)
of the Companies Act 68 of 1973 (the “1973 Act”). They request an order that
Cometa repay to the insolvent estate the amount of R710,763.92, including
interest on the aforesaid sum and costs.
The contentions by the liquidators and Cometa
6. The liquidators’ case is straightforward. First, they assert that the funds in the
706-account belonged to Senqu. Second, they a dvance a case that if the
court finds that the funds indeed belonged to Senqu, they are entitled to relief
under ss 341(2) of the 1973 Act. This is because it is common cause that the
winding-up process had already commenced at the time the payment was
made.
7. As noted, Cometa does not dispute that the winding -up process had
commenced at the time the payment was made from Senqu’s 706 -account,
nor does it dispute that Senqu was insolvent at that time. However, Cometa
opposes the application on the basis that the liquidators have failed to satisfy
the remaining requirements of ss 341(2). Cometa argued that the disp osition
was not made by Senqu, as the transfer was executed by a representative of
Cometa who had access to the 706 -account. Cometa further contends that,
although the funds were held in Senqu’s bank account, they did not belong to
Senqu but rather to Cometa. Alternatively, Cometa submits that if the court
finds the disposition should be voided, it should exercise its d iscretion to
validate the transaction, as the payment was made in good faith and under
the belief that the funds were its own.
8. Cometa further relied on the principle that, in motion proceedings seeking final
relief, any material dispute of fact must be resolved in its favour under
the Plascon-Evans rule1. Cometa also argued that the liquidators cannot rely
on evidence obtained during the insolvency inquiry into S enqu’s affairs, as
such evidence is inadmissible in these proceedings.
The evidence in support of the application
9. It is necessary to outline the nature and scope of the undisputed evidence on
which I will decide the application. To that end, I will briefly summari se the
roles of key individuals involved in the operations of both Senqu and Cometa.
10. Brett Pritchard (“Pritchard”) , who deposed to the answering affidavit, is
identified as the sole director and controlling mind beh ind Senqu and is also a
director of Cometa. Then there is Lisa Lourie, also a director of Cometa who
played a role in the financial administration of the group of companies . Lourie
was the person that transferred the R710,763.92 from the 706 -account to
Cometa on 1 March 2022. There is also Mariska de Bruyn who served as
Senqu’s independent bookkeeper.
11. The affidavits filed by both parties disclose several undisputed facts that I
consider material for determining the matter. Consequently, I do not believe
there are any material issues in dispute that would prevent me from deciding
the matter or that would require me to resolve them by applying the Plascon-
Evans rule. Furthermore, to determine this application I have not considered
evidence obtained during the insolvency inquiry and therefore do not need to
address the issue whether such evidence is admissible.
12. The liquidators made the following essential allegations which were confirmed
by the affidavits filed on behalf of Cometa:
12.1 Despite the fact that Senqu ceas ed trading in 2019, its 706 -account
remained active from March 2021 to March 2022. The Bank statements
1 Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634D-635D
showed that most payments from the 706 -account to Cometa were in
rounded sums.
12.2 On 1 March 2022, the sa me day the liquidation application was served
at Senqu’s registered address, an unrounded amount of R710,763.92
was transferred from the 706-account to Cometa.
13. Pritchard confirmed the following facts:
13.1 The amount of R710,763.92 was paid from Senqu’s 706-account, and
the payment was made after the winding-up of Senqu had commenced.
13.2 The 706-ccount was linked to Cometa’s online banking portal and one
of many accounts under its control. Following the start of the winding -
up process and transfer of the funds, Cometa requested the bank to
delink the 706-account from Senqu and transfer it to Cometa. Th e bank
refused the request.
13.3 Cometa’s finance department was generally authorised by P ritchard to
make transfers to and from the 706-account.
14. Lisa Lourie confirmed the following facts:
14.1 Senqu was the first company established by Pritchard, and for
convenience its enterprise banking profile was used to set up banking
profiles for subsequent companies.
14.2 Funds from other companies within the group were deposited into
Senqu’s 706-account.
14.3 As an executive director of Cometa, she had control over the 706 -
account. She made the payment on 1 March 2022 from Senqu’s 706-
account to Cometa.
15. Having regard to these undisputed facts, I will now outline the legal principles
applicable to a n application to set aside a disposition under ss 341(2) of the
1973 Act.
Setting aside a disposition in terms of ss 341(2) of the 1973 Act
16. Subsection 341(2) is triggered at the com mencement of the winding -up
proceedings and must be read with s 348 of the 1973 Act that provides that
the winding-up is deemed to commence at the time of the presentation of the
winding-up application to the court.
17. Once the winding-up has commenced, ss 341(2) of the 1973 Act stipulates as
follows:
‘Dispositions and share transfers after winding up
(1) ….
(2) Every disposition of its property (including rights of action) by any
company being wound -up and unable to pay its debts made after
the commen cement of the winding -up, shall be void unless the
Court otherwise orders.’
18. Upon exam ining this subsection, it is evident that the requirements for
establishing a voidable disposition are relatively straightforward. The
liquidators must demonstrate that : (i) a disposition was made; (ii) by the
company (iii) of property that belong to the c ompany to be wounded -up (iv)
and that it was unable to pay its debts after the commencement of the
winding-up.
19. The SCA in Pride Milling2 has provided a helpful exposition of the principles a
court should have regard to when considering an application by the liquidators
2 Pride Milling Company (Pty) Ltd v Bekker NO and Another (393/2020) [2021] ZASCA 127; [2021] 4
All SA 696 (SCA); 2022 (2) SA 410 (SCA) (“Pride Milling”)
to set aside a disposition that falls foul of ss 341(2). It is thus not necessary
for me to reproduce the principles in this judgment.
20. It s uffices for me to keep in mind , while considering this matter, that the
predominant purpose of ss 341(2) is to decree that all dispositions made by a
company being wound -up are void 3 and the mischief that ss 34 1(2) seeks to
obviate. The mischief is to prevent a company being wound ed-up from
dissipating its assets and thereby frustrating the claims of its creditors 4 as
assets should rather be preserved and made available for distribution among
a company’s creditors on an equal footing 5, which distribution is fundamental
to the integrity of the insolvency regime.6
The status of money in a bank account
21. An important consideration in this matter though is the status of the money
that was held in Senqu’s bank account. Especially, in the context of the facts
of this matter , as Cometa alleged that the funds in the 706 -account was not
Senqu’s but rather belonged to Cometa.
22. S v Kearny 7 confirmed that our law has for long recognised the position that
the relationship between bank and customer is one of debtor and creditor.
When a customer deposits money, it becomes that of the bank, subject to the
bank's obligation to honour cheques validly drawn by the customer.
23. In Whitehead8 the court held that once money was transferred into a bank
account of another person, the transferor’s personal right to the credit in the
account was terminated. Instead, the money became the property of the bank
by the operation of the commixtio rule, regardless of whom made the deposit
3 Pride Milling par 13
4 Pride Milling par 30
5 Herrigel NO v Bon Road Construction Co (Pty) Ltd and Another 1980 (4) SA 669 (SWA) at 678; See
also Lane NO v Oliver Transport 1997 (1) SA 383 [F – G] (“Land v Olivier Transport”)
6 Pride Milling par 19
7 1964 (2) SA 495 (A) at 502H–503A
8 Trustees of the Insolvent Estate of Whitehead v Dumas and Another 2013 (3) SA 331 (SCA)
(“Whitehead”)
and the circumstances in which it has been made9. This means that the bank
becomes accountable to its customer , the holder of the account in which the
money was transferred, and not a third part y. The transferor therefore had no
claim, as a personal right, to the money that had been transferred to the
customer. This position was endorsed , during 2021, by the SCA in South
African Reserve Bank v Leathern N.O. and Others 10. Also, more recently in
Van Wyk Van Heerden Attorneys v Gore N.O and Another 11 the SCA once
again held that:
“Under the banker -customer relationship, the bank is indebted to the
customer. The bank owns the money but is obliged to comply with
instructions of the account holder concerning a positive balance in the
account. Account holders thus have the power of disposal over the
credit balance of funds held by the bank on their behalf.”12
24. I am bound by the aforementioned authorities. Therefore, once funds are
deposited into a bank account, ownership transfers to the bank, who in turn
becomes indebted to the account holder. The law is clear that the depositor
loses ownership, and any claim to the funds by a third party must be pursued
against the account holder, not the bank.
25. There is an exception to the general legal position as foreshadowed. In Joint
Stock Company13 the SCA explained that, where to the knowledge of the
account holder and the bank, the account holder had limited control of the
funds, the right to claim funds standing to the credit of the account did not
accrue to the account holder but to the depositor. The court also confirmed
that if funds held in an account can be identified as having been reserved for
or ‘belonging’ to another by agreement wit h the bank, the account holder is
not entitled to deal with those funds14.
9 Whitehead at para 13
10 2021 (5) SA 543 (SCA) par 17
11 2022] ZASCA 128; [2022] 4 All SA 649 (SCA)
12 at paras 14-16
13 Joint Stock Company Varvarinskoye v ABSA Bank Ltd and Others 2008 (4) SA 287 (SCA) (“Joint
Stock Company”)
14 Joint Stock Company
Evaluation
26. As noted earlier, ss 341(2) sets out four requirements that an applicant must
establish to void a disposition. Thus far, two of these requirements have been
satisfied: (i) a disposition was made, and (ii) it occurred after the
commencement of Senqu’s winding -up, when Senqu wa s unable to pay its
debts. The remaining issues to be determined are whether the funds in
question were the property of Senqu and whether the disposition was in fact
made by Senqu.
27. Considering the applicable legal principles governing the status of fu nds in a
bank account, I am satisfied that the liquidators have met the remaining two
requirements to void the disposition. It is undisputed that the R710,763.92
was held in a bank account registered in Senqu’s name. The fact that Senqu
had ceased trading is immaterial. Until the company is wound up or
deregistered, it remains a juristic entity capable of owning assets and
exercising control over them.
28. Furthermore, there was no agreement with the bank that would allow Cometa
to rely on the exception, as per Joint Stock Company , to claim rights against
the bank relating to the funds in the 706 -account. I endorse the proposition by
Mr. Bothma, who appeared for the liquidators, that while Cometa could have
treated the 706 -account as its own, until such time as the bank had been
informed of the position, the obligations owed by the bank, in respect of the
funds, accrued to Senqu. In fact, the logic of the leg al position is manifested
when it is considered that Cometa attempted to engage with the bank after
the winding -up process have already commenced to delink the 706 -account
and transfer it to Cometa. A request the bank denied, as it was entitled to do
as it s obligation was with Senqu. This finding therefore disposes of the
requirement that what was disposed of did not belong to Senqu.
29. Mr. Jonker, appearing for Cometa, argued that even if the court finds that the
funds in the 706 -account legally belonged to Senqu, the application must still
fail because the liquidators have not proven that the disposition was in fact
made by Senqu. He argued that the transfer was effected by L ourie, a
representative of Cometa, rather than by anyone acting on behalf of Senqu.
Consequently, it was submitted that Senqu exercised no control or
management over the funds in the 706 -account. Therefore, since the
disposition was not initiated by Senqu, this presents, according to Mr. Jonker,
an insurmountable obstacle for the liquidators.
30. However, the legal position appears to support the liquidators’ case. As the
court established in the Whitehead15 judgment, the circumstances under
which the deposit was made are irrelevant. Factually, Lourie’s claim that she
transferred the funds in her capacity as a representative of Cometa, without
any instruction from Pritchard, seems opportunistic. This distinction was
crucial for Lourie to draw, as Pri tchard had admitted that he controlled Senqu.
Even setting aside the suspicion that Lourie’s claim was a calculated attempt
to undermine the liquidators’ case, I do not need to reject her assertion for
purposes of my ultimate conclusion . Having regard to the applicable legal
principles, either Lourie, Pritchard, nor Cometa had present evidence that it
acted as an undisclosed agent on Senqu’s bank account or had some
agreement of which the bank was aware. No evidence of such agreement has
been presented.
31. Consequently, the legal position prevails: the funds in the 706 -account
belonged to Senqu. The fact that the transfer was executed by someone
unauthorised to act on Senqu’s behalf does not alter this conclusion, as the
law attaches no significance to such an action in determining ownership of the
funds.
32. I therefore find that the liquidators have made out a case for all the
requirements of ss 341(2) and are entitle d to an order as per the notice of
motion. What remains is a consideration whether I should exercise my
15 Where the court refers to; Louw NO & others v Coetzee & others 2003 (3) SA 329 (SCA) at 334H-
I; Commissioner of Customs and Excise v Bank of Lisbon International & another 1994 (1) SA 205 (N)
at 208I.
discretion and validate the disposition.
Discretion
33. Subsection 341(2) affords a court a discretion to validate a disposition that did
not comply with its provisions. The nature of a court’s discretion is also set out
in Pride Milling16. This essentially entails that a court ’s discretion to validate a
disposition under ss 341(2) is broad but must be exercised in accordance with
general principles of judicial discretion. The overarching consideration is what
is just and fair in the specific circumstances of the case and arriving at that
conclusion the court must balance the interests of the party seeking validation
against those of the company’s creditors, with particular attention to the good
faith and honest intention of the parties involved. Also, dispositions made in
the ordinary course of the company’s bona fide operations are more likely to
be validated, while those aimed at preferring certain creditors or conferring
undue advantage are typically refused. Ultimately, each case is assessed on
its unique facts, and past cases provide guidance rather than fixed rules17.
34. I also take heed of the warning expressed by the court in Pride Milling18:
‘Suffice it to state that a court confronted with this question is enjoined
to keep at the forefront of its mind that the legislature has ordained that
all dispositions by a company of its property whilst it is being wound up
are void. But at the same time a court must be alive to the fact that in
an appropriate case it may order otherwise. And, I daresay, that when
sanctioning a departure from the statutorily ordained default position, ie
voidness of the disposition, a court must guard against a result that
would undermine the underlying purpose of the provision.’
35. Cometa, with reference to the decision of Land v Olivier Transport 19,
16 par 26
17 With reference to the expositions by the authoris: PM Meskin et al Henochsberg on the Companies
Act 61 of 1973 vol 1 5 ed (1994), p 676 – 81 and MS Blackman et al Commentary on the Companies
Act vol III (OS, 2002)
18 Par 25
contended that it would be just and fair in the particular circumstance s of this
case to validate the disposition having regard inter alia : (i) that it genuinely
believed that all funds held in the 706 -account were its own ; (ii) it always
maintained complete control over the 706-account and conducted
transactions solely for its own benefit ; (iii) a t the time the funds were
transferred, Cometa was unaware of the presentation of the winding-up
application; and lastly (iv) Cometa had no intention of disposing of Senqu’s
assets or showing preference to any of Senqu's creditors over others. On the
contrary, it operated under the belief that it was dealing with its own funds.
36. While Cometa’s grounds for seeking validation of the disposition warrant
consideration, they fall short of justifying why I should exercise my discretion
and depart from the statutorily ordained default position of rather declaring the
disposition void . The starting point is the legislative intent behind the
provision: to protect the concursus creditorum and prevent the dissipation of a
company’s assets once the winding-up process has commenced.
37. Cometa’s claim that it genuinely believed the funds in the 706 -account were
its own may be important in assessing bona fides and good faith, but does not
absolve it of liability. As I have found the account was held in Senqu’ s name
and remained active even after Senqu ceased trading. Regardless of
Cometa’s internal understanding, the legal ownership of the funds remained
with Senqu, and the transaction occurred after the winding -up process had
commenced. The mere belief in own ership, absent any formal arrangement
with the bank to transact on Senqu’s account with its own funds, cannot
override the statutory protections afforded to creditors.
38. Cometa’s argument that it was unaware of the presentation of the winding -up
application at the time of the transfer similarly fails to carry sufficient weight.
The timing of the disposition, occurring on the very day the application was
served together with the fact that an unrounded amount was transferred ,
raises concerns about the prop riety of the transaction. Even if Cometa lacked
19 At 386 D – 387B - provides a useful guide of factors a court can consider giving expression to the
exercise of its discretion
actual knowledge of the winding-up application at that moment, the proximity
of events suggests that t he court should rather intervene. I cannot only
consider Cometa’s state of mind but also the broader impli cations of the
disposition on the insolvent estate.
39. Furthermore, Cometa’s assertion that it had no intention to dispose of Senqu’s
assets or to prefer one creditor over another does not adequately address the
critical issue: the effect of the disposition. The transfer of R710,763.92 had the
inevitable consequence of prejudicing the concursus creditorum, regardless of
Cometa’s intentions.
40. In light of these considerations, I am not persuaded that Cometa has
demonstrated sufficient grounds for this court to exercise its discretion and
validate the disposition.
Conclusion
41. I am therefore satisfied, for the reasons foreshadowed, that the liquidators are
entitled to an order as per the notice of motion. In the circumstances I make
the following order:
1) The respondent to pay to the applicants the sum of R710 763,92.
2) Interest on the aforesaid sum at the prescribed rate from 1 March 2023 to
date of final payment.
3) The respondent to pay the applicant’s costs on a party and party scale,
including the costs of counsel on scale B from 12 April 2024.
____________________________
A MONTZINGER
Acting Judge of the High Court
Appearances:
Applicant’s counsel: Mr. P S Bothma
Applicant’s attorney: Boshoff Bronn & Smit Inc
Respondent’s counsel: Mr. J W Jonker
Respondent’s attorney: Cliffe Dekker Hofmeyr Inc