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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case Number: 006278 -2025
(1) REPORTABLE: YES / NO
(2) OF INTEREST TO OTHER JUDGES: YES/NO
(3) REVISED: YES/NO
DATE :16/05/2025
SIGNATURE
In the matter between:
Fleurmax konstruksie (PTY) Ltd Applicant
(Registration number:2008/012/49907)
and
Zacon projects (PTY) Ltd Respondent
(Registration number:2019/295577/07)
Delivered : The judgment was prepared and authored by the judge whose name is
reflected and handed down electronically. It was circulated to the parties and their
legal representatives via email and uploaded to the electronic file of this matter on
Caselines. The date of the judgment is deemed to be 16 May 2025.
JUDGMENT
Moila , AJ
Introduction
[1] This is an unopposed application for the winding up of the Respondent in
terms of sections 344 (f) and 344 (h), read with section 345(1) (c) of the Companies
Act 61 of 1973 as amended (“the Companies Act”) , and the Insolvency Act 24 of
1936 .
[2] The Application papers refer to the Companies Act 71 of 1963; it might be a
typo error.
[3] The Applicant is Fleurmax Konstruksie (Pty) Ltd, a limited liability company
with its principal place of business at Plot 1[...] T[...] Street, Wolmaranspoort,
Pretoria. The Respondent is Zacon Projects (Pty) Ltd , a company with limited liability
incorporated in terms of the company laws of South Africa, with its registered
address at Plot 9[...], H[...] , Centurion, Pretoria.
[4] The Applicant’s grounds for winding up the Respondent is that it is virtually
and commercially insolvent and cannot pay its debts.
Factual background
[5] On or about November 2023, the Applicant rendered goods to the
Respondent for R 87 687.50. The goods were sold and delivered to the Respondent
at the Respondent ’s special instance and request . The Applicant supplied the
Respondent with their respective invoice while delivering the goods. The Applicant
complied with all its obligations regarding the goods delivered to the Respondent.
The Respondent was required to pay the total amount outstanding as per the
invoice. The amount became immediately due and payable by the Respondent , and
despite numerous undertakings by the Respondent to make payments, the
Respondent failed and/ or neglected to pay the outstanding amount .
[6] The Applicant ’s attorney informed or notified the Respondent , in terms of
Section 345 of the Companies Act, that if the Respondent does not pay the
outstanding amount within 21 days , the Applicant will apply for the Respondent's
liquidation.
[7] The Respondent then sent an e -mail on 5 November 2024 to the Applicant ’s
attorney of record requesting for down payment of the amount. The Applicant did not
accept the offer and asked his attorney to make a counteroffer on 6 November 2024.
The Respondent did not respond to the counteroffer and only forwarded the first
proposal to the Applicant’s attorney on 23 December 2024. The Respondent offered
to pay R 5 000 monthly , payable on the 10th of every month starting from January
2025.
Submissions by Applicant’s Counsel
[8] Counsel for the Applicant , Advocate S. Barreiro , submitted that the
Respondent’s company is factually insolvent and commercial . It is unable to pay its
debts. The Applicant supplied the Respondent with steel products. The invoice of
goods sold was delivered with the goods on or about November 2023. The value of
goods amounts to R 87 687.50. Despite numerous undertakings to make payments
by the Respondent , the Respondent failed and/or neglected to pay. Respondent’s
failure to pay the amount due constitutes an act of insolvency. It will be just and
equitable if the Respondent is wound up.
The issue to be determined
[9] Did the Applicant make out a case for a provisional or final order of
liquidation?
Relevant Legal principles and discussions
[10] Section 344(f) and (h) of the Companies Act provides circumstances in which
the Court may wind up company : if the Company is unable to pay its debts as
described in section 345 and it appears to the Court that it is just and equitable that
the company should be wound up.
[11] Section 345 of the Companies Act deals with statutory demands and the
circumstances under which a company can be deemed unable to pay its debts. It
allows a creditor to send a formal letter of demand to a company demanding
payment. If the debts are not paid within 21 days, the company is deemed unable to
pay them.
[12] Virtually insolvent means when the company is on the brink of insolvency,
with liabilities exceeding assets and insufficient resources to pay debts . Commercial
insolvency primarily focuses on a company’s inability to meet its financial obligations
due to cash flow issues , even though its assets may exceed its liabilities .1
[13] The letter in terms of section 345 of the Companies Act was served on the
Respondent on 28 November 2024. On 23 December 2024, the Respondent replied
to the letter, offering to pay R 5 000.00 per month, payable on the 10th of each
month. The Applicant refused the offer and gave a counteroffer of R 10 000. The
purpose of liquidation is to dissolve a business and distribute assets to the creditors
[14] As per the Badenhorst rule, as stated in Badenhorst v Northern Construction
Enterprises (P ty) Ltd,2 Liquidation proceedings shouldn’t be used to enforce payment
of a bona fide and reasonable debt. The court retains the discretion to decide
whether the company is insolvent.
[15] Liquidation is intended to resolve the financial state of a company that cannot
meet its obligations, not to resolve disputes about debts. If that is allowed , it will
amount to an abuse of the court process. Liquidation proceedings should be
carefully considered, as opposed to action proceedings for collecting debts.
[16] Winding up proceedings ought not to be resorted to in order to enforce
payment of a debt, the existence of which is bona fide disputed by the company on
reasonable grounds; the procedure for winding up is not designed for the resolution
of disputes as to the existence or non -existence of a debt.3
[17] It is trite that when the debtor company owes money and is not insolvent, a
creditor must utili se action proceedings and issue summons for payment of a debt.
Section 347(2) of the Companies Act provides that on an application for winding up,
1 Boschpoort Ondernemings (Pty) Ltd v Absa Bank Limited 2014 (2) SA 518 (SCA) at para 16 and the
cases cited therein.
2 1956 (2) SA 346 (T) . See also more recently Imobrite (Pty) Ltd v DTL Boerdery CC [2022] ZASCA
67 (13 May 2022) at para 14.
3 See Meskin Henochsberg on the Companies Act 61 of 1973 5 ed Vol 1 at 693 -694.
the applicants are entitled to be granted the order unless the court is satisfied that
there are some other remedies available to the applicant s and that they are acting
unreasonabl y in seeking to have the company wound up.
[18] In Absa Bank Ltd v New city Group (Pty) Ltd and another related matter,4 the
court stated that :
“Upon application of this approach, it must therefore be asked if liquidation in this
particular case can reasonably be avoided, a question that is independent of the
prospect of a business rescue option , as addressed earlier . In my view, despite some
wrinkles in the substance of what Newcity advances, there is a sufficient body of fact
and rationality in what is on offer to result in a reasonable , pragmatic programme of
payments that could avoid the extinction of Newcity.”
[19] The Respondent made an offer to pay, but the Applicant refused it. There are
many ways of resolving a dispute of this nature. Winding up a company is the most
extreme process. The Applicant did not file proof that the Respondent cannot pay its
debts. In this case , liquidation can be avoided. The Applicant can utilise action
proceedings to issue a summons.
[20] Accordingly, in my view, the Applicant has failed to show that the company is
to be dissolved in terms of Section 344 of the Companies Act or Section 345 of the
Companies Ac t.
[21] It is trite that a winding up order will not be granted where the sole motive or
purpose of seeking the winding up order is something other than the bona fide
bringing about of the company’s liquidation.
Order
[21] In the result ,I make the following order :
The application is dismissed . No order as to cost s.
4 [2013] 3 All SA 146 (GSJ) at para 33.
N L MOILA
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
Appearances:
Counsel for the Applicant: Advocate S Barreiro
Instructed by: Hendrik Haasbroek Attorneys
Date of hearing : 25 March 2025
Delivered: 13 May 2025