THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 1325/2023
In the matter between:

SELECTIVE EMPOWERMENT INVESTMENTS 1
LIMITED APPELLANT

and

COMPANIES AND INTELLECTUAL PROPERTY
COMMISSION RESPONDENT

Neutral citation: Selective Empowerment Investments 1 Ltd v Companies and
Intellectual Property Commission (1325/2023) [2025]
ZASCA 71 (30 May 2025)
Coram: MOKGOHLOA ADP , MOCUMIE, UNTERHAL TER and KOEN
JJA and NORMAN AJA
Heard : 28 February 2025
Delivered : 29 May 2025
Summary: Public company – grounds for winding -up – failure to comply with
statutory requirements of the Companies Act 71 of 2008 (the Act) alternatively
on the ground that it is just and equitable – section 81 – application for winding -
up of a solvent company – whether the Commission has standing to rely on the
just and equitable rubric where it failed to satisfy the jurisdictional requirements
in section 81 (1)(f) – whether the Commission is an interested party as envisaged

2

in section 79(3) – whether appellant received adequate notice for winding -up as
an insolvent company – whether appellant is insolvent.




























3



ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Snyman AJ
sitting as a court of first instance):
1 The appeal is upheld with costs, such costs to include costs of two Counsel,
where so employed.
2 The order of the high court is set aside and substituted with the following:
‘The application is dismissed with costs, such costs to include costs of two
counsel, where so employed. ’


JUDGMENT

Koen JA ( Unterhalter JA concurring):
Introduction
[1] The appellant, Selective Empowerment Investments 1 Ltd (Selective), has
been placed under a final winding -up order by the Gauteng Division of the High
Court, Pretoria (the high court) at the instance of the respondent, the Companies
and Intellectual Property Commission (the Commission). The high court found
that it was just and equitable to do so. Selective appeals against the order1 with
the leave of this Court.

1 In its heads of argument Selective states that it appeals against the ‘whole judgment and orders’ granted by the
high court, but then confined itself to the two issues listed in paragraph 2 of this judgment. The argument before
this Court however drifted wider than these two issues. In the high court : Selective had also raised lis alibi pendens
as a point in limine, it also sought leave to file a supplementary answering affidavit; and the Commission applied
for certain allegations in Selective’s answering affidavit, describing certain conduct as ‘disingenuous’, that the
deponent ‘verily believe[s]’, and that the app lication was motivated by racism or an attempt to discriminate against
it because it is black owned, to be struck out. Selective’s lis alibi pendens defence and its application for leave to
file a supplementary answering affidavit were dismissed. The Commission’s applications to strike out were
4


[2] Selective correctly maintains that it could be wound up on the basis that it
is just and equitable to do so if it is insolvent. The high court found that it was
insolvent. Selective contends that the high court was not entitled to find that it
was insolvent, because: it was a conclusion arrived at without affording the
parties an opportunity to advance arguments on the issue; and it was a finding of
fact not founded on the e vidence. These were the only issues identified by
Selective in its heads of argument as arising for determination in this appeal.2

[3] All references to statutory provisions hereafter are to sections of the
Companies Act 71 of 2008 (the Act), unless stated otherwise. Where reference is
made to the Companies Act 61 of 1973, it shall be referred to as the 1973 Act.

Background
[4] Selective presents itself to the general public as an investment company
which primarily invests in companies listed on the Johannesburg Stock Exchange
(JSE). It is a public company. It was established to offer small retail investors, of
whom there are approximately 26 000 across diverse groups, with an oppor tunity
to invest in JSE listed shares without incurring large fees. It is said to be owned
by black and previously disadvantaged investors.3 Its raison d’etre and substratum
accordingly was to provide affordable access to the JSE to these previously
disadvantaged individuals who otherwise would not have had an opportunity to
invest in listed shares on their own.


granted. These rulings have not been attacked in Selective’s heads of argument, did not feature during argument
before this Court, and are accordingly not considered in this judgment.
2 The issues in the high court, according to a joint practice notice filed, were: whether the Commission had
complied with the provisions of s 81(1) (f)(i) and (ii) of the 2008 Act and was entitled to a winding -up order in
terms of the provisions, alternatively, whether as regulator it was entitled in terms of s 344 (h) of the Companies
Act 61 of 1973 (the 1973 Act) as read together with the Companies Act 71 of 2008, it was entitled to an order that
Selective be wound up on the ground that it is just and equitable to do so.
3 Selective has not disputed that it has not maintained a proper security register of shareholders for an extended
period. As a result, its shareholders could not trade in their shares. The identities of its shareholders accordingly
remain a matter of some uncertainty.
5

[5] The Commission is the regulatory authority responsible for enforcing
compliance with the provisions of the Act. It is a juristic person established in
terms of s 185. It functions as an organ of State within the public administration,
but as an institution outside the public service. Its objectives, in terms of s 186(1),4
include the promotion of compliance with the Act and any other applicable
legislation, and the efficient, effective and widest possible enforcement of the Act
and any other legislation listed in Schedule 4 thereto.5

[6] The functions of the Commission are various and in terms of s 187(1) to
(4)6 include: monitoring proper compliance with the Act; receiving or initiating

4 Section 186(1) provides:
‘(1) The objectives of the Commission are –
(a) the efficient and effective registration of –
(i) companies, and external companies, in terms of this Act;
(ii) other juristic persons, in terms of any applicable legislation referred to in Schedule 4; and
(iii) intellectual property rights, in terms of any relevant legislation;
(b) the maintenance of accurate, up -to-date and relevant information concerning companies, foreign companies
and other juristic persons contemplated in subsection (1) (a)(ii), and concerning intellectual property rights, and
the provision of that information to the public and to other organs of state;
(c) the promotion of education and awareness of company and intellectual property laws, and related matters;
(d) the promotion of compliance with this Act, and any other applicable legislation; and
(e) the efficient, effective and widest possible enforcement of this Act, and any other legislation listed in
Schedule 4.
(2) To achieve its objectives, the Commission may –
(a) have regard to international developments in the field of company and intellectual property law; or
(b) consult any person, organisation or institution with regard to any matter.’
5 The ‘other legislation ’ listed in schedule 4 is not directly relevant to this judgment but include, for example also,
Part A of chapter 4 of the Consumer Protection Act, 2008 (Act 68 of 2008) .
6 Section 187(1) to (4) provide:
‘(1) In this section, 'this Act' has the meaning set out in section 1, but also includes any legislation listed in
Schedule 4.
(2) Other than with respect to matters within the jurisdiction of the Takeover Regulation Panel, the Commission
must enforce this Act, by, among other things –
(a) promoting voluntary resolution of disputes arising in terms of this Act between a company on the one hand
and a shareholder or director on the other, as contemplated in Part C of Chapter 7, without intervening in, or
adjudicating any such dispute;
(b) monitoring proper compliance with this Act;
(c) receiving or initiating complaints concerning alleged contraventions of this Act, evaluating those complaints,
and initiating investigations into complaints;
(d) receiving directions from the Minister in terms of section 190, concerning investigations to be conducted
into alleged contraventions of this Act, or other circumstances, and conducting any such investigation;
(e) ensuring that contraventions of this Act are promptly and properly investigated;
(f) negotiating and concluding undertakings and consent orders contemplated in section 169(1) (b) and 173;
(g) issuing and enforcing compliance notices;
(h) referring alleged offences in terms of this Act to the National Prosecuting Authority; and
(i) referring matters to a court, and appearing before the court or the Companies Tribunal, as permitted or
required by this Act.
(3) The Commission must promote the reliability of financial statements by, among other things -
(a) monitoring patterns of compliance with, and contraventions of, financial reporting standards; and
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complaints concerning alleged contraventions of the Act; evaluating those
complaints; initiating investigations into complaints; ensuring that contraventions
of the Act are promptly and properly investigated; issuing and enforcing
compliance notices; and r eferring matters to court. Specifically, the Commission,
inter alia, must promote the reliability of financial statements by, amongst others,
monitoring patterns of compliance with, and contraventions of financial reporting
standards, and making recommenda tions to secure better reliability and
compliance. In general terms, the Commission is tasked with providing a
corporate milieu of integrity and a minimum threshold level of responsibility in
respect of corporate entities registered and operating in the Re public of South
Africa .

[7] The Act imposes a plethora of compliance and other requirements on
companies. These include, amongst others: s 24(4),7 which requires that an up t o

(b) making recommendations to the Council for amendments to financial reporting standards, to secure better
reliability and compliance.
(4) The Commission must -
(a) establish and maintain in the prescribed manner and form –
(i) a companies register; and
(ii) any other register contemplated in this Act, or in any other legislation that assigns a registry function to
the Commission;
(b) receive and deposit in the registry any documents required to be filed in terms of this Act;
(c) make the information in those registers efficiently and effectively available to the public, and to other organs
of state;
(d) register and deregister companies, directors, business names and intellectual property rights, in accordance
with relevant legislation; and
(e) perform any related functions assigned to it by legislation, or reasonably necessary to carry out its assigned
registry functions. ’
7 Section 24(4) provides:
‘(4) In addition to the requirements of subsection (3), every company must maintain –
(a) a securities register or its equivalent, as required by section 50, in the case of a profit company, or a member's
register in the case of a non -profit company that has members; and
(b) the records required in terms of section 85, if that section applies to the company.’






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date share register be kept and that it be verified;8 s 30(1),9 which requires the
submission of audited annual financial statements;10 s 33(1) (a), which requires
that a company must file an annual return ;11 s 61(7),12 which requires the holding
of annual general meetings of shareholders; and s 214(1) (d),13 which prohibits

8 Section 50 provides:
‘(1) Every company must –
(a) establish or cause to be established a register of its issued securities in the prescribed form; and
(b) maintain its securities register in accordance with the prescribed standards.
(2) As soon as practicable after issuing any securities a company must enter or cause to be entered in its securities
register, in respect of every class of securities that it has issued –
(a) the total number of those securities that are held in uncertificated form; and
(b) with respect to certificated securities -
(i) the names and addresses of the persons to whom the securities were issued;
(ii) the number of securities issued to each of them;
(iii) the number of, and prescribed circumstances relating to, any securities -
(aa) that have been placed in trust as contemplated in section 40 (6) (d); or
(bb) whose transfer has been restricted;
(iv) in the case of securities contemplated in section 43 –
(aa) the number of those securities issued and outstanding; and
(bb) the names and addresses of the registered owner of the security and any holders of a beneficial interest
in the security; and
(v) any other prescribed information.
(3) If a company has issued uncertificated securities, or has issued securities that have ceased to be certificated,
as contemplated in section 49(5), a record must be administered and maintained by a participant or central
securities depository in the pre scribed form, as the company's uncertificated securities register, which –
(a) forms part of that company's securities register; and
(b) must contain, with respect to all securities contemplated in this subsection, any details -
(i) referred to in subsection (2) (b), read with the changes required by the context; or
(ii) determined by the rules of the central securities depository.
(3A)(a) A company that does not fall within the meaning of an 'affected company' must record in its securities
register prescribed information regarding the natural persons who are the beneficial owners of the company, in
the prescribed form, and must ensure that this information is updated within the prescribed period after any
changes in beneficial ownership have occurred.
(b) The prescribed requirements referred to in paragraph (a) must be prescribed after consultation with the
Minister of Finance and the Financial Intelligence Centre, established by section 2 of the Financial Intelligence
Centre Act, 2001 ( Act 38 of 2001 ).
(4) A securities register, or an uncertificated securities register, maintained in accordance with this Act is sufficient
proof of the facts recorded in it, in the absence of evidence to the contrary.
(5) Unless all the shares of a company rank equally for all purposes, the company's shares, or each class of shares,
and any other securities, must be distinguished by an appropriate numbering system.’
9 Section 30(1) provides:
‘(1) Each year, a company must prepare annual financial statements within six months after the end of its financial
year, or such shorter period as may be appropriate to provide the required notice of an annual general meeting in
terms of section 61(7).’
10 Annual financial statements are of crucial interest to anyone with an interest in a company – Pinfold and Others
v Edge to Edge Global Investments Ltd [2013] ZAKZDHC 52; 2014 (1) SA 206 (KZD) para 11.
11 The annual return must be filed on form CoR 30.1.
12 Section 61(7) provides:
‘(7) A public company must convene an annual general meeting of its shareholders –
(a) initially, no more than 18 months after the company's date of incorporation; and
(b) thereafter, once in every calendar year, but no more than 15 months after the date of the previous annual
general meeting, or within an extended time allowed by the Companies Tribunal, on good cause shown.’
13 Section 214(1) (d) provides:
‘(1) A person is guilty of an offence if the person –
. . .
(d) is a party to the preparation, approval, dissemination or publication of a prospectus or a written statement
contemplated in section 101, that contains an 'untrue statement' as defined and described in section 95.’
8

false statements being prepared and issued. These requirements seek to protect
the interests of shareholders, creditors and members of the public, and promote
good corporate governance.

[8] Section 22(1)14 requires that a company must not c onduct its business
recklessly, with gross negligence, with intent to defraud any person, or for any
fraudulent purpose. If the Commission has reasonable grounds to believe that a
company is engaging in conduct prohibited by s 22(1), or is unable to pay its debts
as they become due and payable in the normal course of business, the
Commission may issue a ‘notice to show cause’ to the company as to why it
should be permitted to continue carrying on business, or to trade, as the case may
be.15

[9] If a company to whom a notice to show cause has been issued fails, within
20 business days, to satisfy the Commission that it is not carrying on its business
recklessly with gross negligence , with intent to defraud , or for any fraudulent
purpose as contemplated in s 22(1), or that it is able to pay its debts as they
become due and payable in the normal course of business, the Commission may
issue a ‘compliance notice’ to the company requiring it to cease carrying on its
business or trading, as the case may be.16 A compliance notice may also be issued
in terms of s 171,17 where there is non -compliance with other provisions of the
Act.

14 Section 22(1) provides:
‘(1) A company must not carry on its business recklessly, with gross negligence, with intent to defraud any person
or for any fraudulent purpose.’
15 Section 22(2) reads:
‘(2) If the Commission has reasonable grounds to believe that a company is engaging in conduct prohibited by
subsection (1), or is unable to pay its debts as they become due and payable in the normal course of business, the
Commission may issue a notice to the company to show cause why the company should be permitted to continue
carrying on its business, or to trade, as the case may be.’
16 Section 22(3) reads:
‘(3) If a company to whom a notice has been issued in terms of subsection (2) fails within 20 business days to
satisfy the Commission that it is not engaging in conduct prohibited by subsection (1), or that it is able to pay its
debts as they become due an d payable in the normal course of business, the Commission may issue a compliance
notice to the company requiring it to cease carrying on its business or trading, as the case may be. ’
17 Section 171(1) and (2) provide:
9

[10] If and when the requirements of a compliance notice have been satisfied
fully, s 171(6) requires the Commission, or the Executive Director to issue a
compliance certificate.18 A compliance notice remains in force until: it is set aside
by the Companies Tribunal; or a court reviews the notice; or it is set aside by the
Takeover Special Committee; or, the Commission, or its Executive Director, as
the case may be, issues a ‘compli ance certificate’, contemplated in s 171(6),19 that
the particular non -compliance identified has been remedied.20

[11] Selective has a long history,21 confirmed by the reports of various vetting
committees, including the Prospectus Vetting Committee dated 11 March 2016,
and investigations of the Commission, inter alia on 17 October 2016 and on
numerous occasions thereafter, of egregious deliberate non -compliance with, and

‘(1) Subject to subsection (3), the Commission, or the Executive Director of the Panel, may issue a compliance
notice in the prescribed form to any person whom the Commission or Executive Director, as the case may be, on
reasonable grounds believes –
(a) has contravened this Act; or
(b) assented to, was implicated in, or directly or indirectly benefited from, a contravention of this Act,
unless the alleged contravention could otherwise be addressed in terms of this Act by an application to a court or
to the Companies Tribunal.
(2) A compliance notice may require the person to whom it is addressed to –
(a) cease, correct or reverse any action in contravention of this Act;
(b) take any action required by this Act;
(c) restore assets or their value to a company or any other person;
(d) provide a community service, in the case of a notice issued by the Commission; or
(e) take any other steps reasonably related to the contravention and designed to rectify its effect.’
18 Section 171(6) reads:
‘(6) If the requirements of a compliance notice issued in terms of subsection (1) have been satisfied, the
Commission or the Executive Director, as the case may be, must issue a compliance certificate.’
19 Section 171(5) provides:
‘(5) A compliance notice issued in terms of this section, or any part of it, remains in force until –
(a) it is set aside by –
(i) the Companies Tribunal, or a court upon a review of the notice, in the case of a notice issued by the
Commission; or
(ii) the Takeover Special Committee, or a court upon a review of the notice, in the case of a notice issued by
the Executive Director; or
(b) the Commission, or Executive Director, as the case may be, issues a compliance certificate contemplated in
subsection (6).’
20 If a compliance notice is not complied with then the Commission or Executive Director may apply to court for
the imposition of an administrative fine or refer the matter to the National Prosecuting Authority for prosecution
as an offence. Section 171(7) reads:
‘(7) If a person to whom a compliance notice has been issued fails to comply with the notice, the Commission or
the Executive Director, as the case may be, may either –
(a) apply to a court for the imposition of an administrative fine; or
(b) refer the matter to the National Prosecuting Authority for prosecution as an offence in terms of section 214
(3),
but may not do both in respect of any particular compliance notice.’
21 The Financial Services Board, as it was then known, already in December 2011 issued an inspection report.
Selective had also reported a 34% loss.
10

transgressions of, various provisions of the Act. These include: s 22(1) – reckless
trading, due to the failure to properly maintain a share register, to comply with
conditions set in prospectuses, and to prepare annual financial statements within
six mont hs after the end of each financial year; s 24(4) – failing to maintain the
securities register as required by s 50; s 30(1) – failing to prepare annual financial
statements on a regular basis, within six months after the end of each financial
year, which f or Selective was 30 June; s 50(1) (b) – failing to maintain an accurate
securities register in accordance with the prescribed standards; s 61(7) – failing
to hold annual general meetings (from 2014 until 2017); s 72(4)22 and regulation
43(2) – failing to constitute a social and ethics committee; s 73(6)23 – failing to
keep minutes of meetings of the audit committee and social committee; s 86(4)24
– failing to fill the vacancy in the office of the company secretary within 60
business days; s 94(6)25 – failing to fill vacancies on the audit committee within
40 business days after the vacancies arose; s 108(6)26 – failing to raise capital in
terms of its prospectus; s 214(1) (d) – making false statements, and reckless
conduct, in failing to provide an alternative trading platform; and failing to submit
a tax return for assessment within 12 months after the end of financial years, as
required in terms of s 66 of the Income Tax Act 58 of 1962 read with s 25 of the

22 Section 72(4) provides:
‘(4) The Minister, by regulation, may prescribe –
(a) a category of companies that must each have a social and ethics committee, if it is desirable in the public
interest, having regard to –
(i) annual turnover;
(ii) workforce size; or
(iii) the nature and extent of the activities of such companies;
(b) the functions to be performed by social and ethics committees required by this subsection; and
(c) rules governing the composition and conduct of social and ethics committees. ’
23 Section 73(6) provides:
‘(6) A company must keep minutes of the meetings of the board, and any of its committees, and include in the
minutes
(a) any declaration given by notice or made by a director as required by section 75; and
(b) every resolution adopted by the board. ’
24 Section 86(4) provides:
‘(4) Within 60 business days after a vacancy arises in the office of company secretary, the board must fill the
vacancy by appointing a person whom the directors consider to have the requisite knowledge and experience. ’
25 Section 94(6) provides:
‘(6) The board of a company contemplated in section 84(1) must appoint a person to fill any vacancy on the audit
committee within 40 business days after the vacancy arises. ’
26 Section 108(6) provides:
‘(6) If the circumstances contemplated in subsection (2) have not been realised within 40 business days after the
issue of the prospectus, all amounts received from applicants must be repaid to them promptly without interest. ’
11

Tax Administration Act 28 of 2011. It also ignored the demand to demonstrate
without delay, that it was not trading in insolvent circumstances.

[12] As a result, Selective was issued with notices to show cause that it was not
trading r eckless ly or under insolvent circumstances, as contemplated in s 22, on
17 October 2016 and 7 December 2017. The notice to show cause dated 17
October 2016 in addition listed contraventions of: s 30, regarding the failure to
file the annual financial statements for the 2014 and 2015 financial years; s
24(4) (a), the failure to raise any capital for prospectuses registered on 23 January
2012, 16 July 2012, 16 October 2012, 1 6 January 2013, 25 April 2013 and 18
November 2013; and the non -negotiability of securities held. The notice to show
cause dated 7 December 2017 detailed contraventions of: s 24(4), failing to
maintain the securities register as required by s 50 which is deemed to be a
contravention of s 24(4); s 30(1), in that the 2017 financial year statements were
not prepared within six months of the financial year end; s 61(7), the failure to
convene annual general meetings after 31 January 2014; and s 214(1) (d), relating
to false statements and reckless conduct.

[13] Both the above notices: recorded that they were issued in terms of s 22(2);
reminded Selective that it could apply to review the notice; confirmed that it was
required to provide the information required to the Commission within 20 days;
and required it to show cause why it should be permitted to carry on business or
to trade. The notices recorded that if Selective failed, within the 20 days, to
respond to the notice or to satisfy the Commission that it is not carrying on
business recklessly, or with intent to defraud,27 and is able to pay its debts as they
become due in the ordinary course of business, the Commission may issue a
compliance notice requiring Selective to cease carrying on business.

27 Being conduct prohibited by s 22(1).
12

[14] Selective does not dispute receiving these notices. Nor did it seek to review
the notices. In its response, dated 5 December 2016, it undertook vaguely to
implement ‘remedial actions.’ Yet , in a further response on 16 January 2018, to
the notice dated 7 December 2017, it conceded that it had still not complied with
various provisions of the Act. Significantly, whilst acknowledging the obligation
to have to apply for a review if it disputed the notices, it elected that it ‘will not,
despite advice to the contrary, seek to review the [n]otice on these grounds at this
stage’. It has also never sought to respond in any one of the ways required by the
Act outlined in paragraph 10 above.

[15] When the notices to show cause were not responded to, compliance notices,
as contemplated in s 171 and s 22(3), were issued on 16 January 2017, 19
September 2017 and 14 February 2018. The compliance notices all advised
Selective that it had the right, with in 15 business days, to apply for an order
confirming, modifying or setting aside all or part of the notices, confirmed that
the notices would remain in force until set aside on review or until a compliance
certificate is issued, and cautioned that the fai lure to file overdue returns may
result in the deregistration of Selective. All three compliance notices recorded, in
particular, that Selective had failed to comply with s 30 (the failure to prepare
annual financial statements).

[16] Selective does not dispute receiving the compliance notices either. None
was ever reviewed and set aside as provided in s 171(5).28 Nor was any

28 The second judgment asserts that the high court ignored that Selective did not remain supine when it was served
with notices and in some instances asked for support and guidance from the Commission, that the Commission
did not tell it that it could not gi ve it guidance or support, and that it is part of its responsibilities to do so. That
respectfully, is not so. The evidence revealed that Selective adopted a supine approach. On its own version, it
deliberately set its mind against responding to some of th e notices. It never, if it had complied fully and timeously
with any of the demands raised, took steps to obtain compliance certificates. But more fundamentally, it ignored
its own responsibilities in law to ensure compliance with what any reasonable busin ess person would understand
is required, namely the timeous preparation of, for example, audited annual financial statements, maintaining a
securities register, preparing minutes of annual general meetings, and the like. It is not the responsibility of the
Commission in law, to attend to these or to ‘support’ the preparation thereof. No ‘guidance’ from the Commission
is required for Selective to prepare annual financial statements, hold annual general meetings and maintain an up -
to-date share register. Wha t the scheme of the Act makes clear is that these basic responsibilities cannot be shirked
by blaming the Commission.
13

compliance certificate ever issued. Consequently, the complaints listed stand. The
instances of non -compliance raised by the Commission were, as a matter of fact,
if not deemed by the Act, not to have been remedied.

[17] The compliance notice dated 16 January 2017 required Selective to: submit
to the Commission copies of the annual financial statements for 2014 and 2015
signed by the registered auditor and approved and signed by the directors; provide
reasons why the annua l financial statements of February 2012 were not timeously
prepared by the directors; submit the minutes of the annual general meetings and
the securities register. Selective provided draft annual financial statements as at
30 June 2015, but these did not comply with the request. Selective conceded that
any attempt to justify not having timeously prepared the 2012 statement would
be untenable, so it provided none. It provided a copy of what purported to be
minutes of the last general meeting, which was held in January 2014, some three
years earlier. Finally, as regards the securities register it said that it had employed
Stakeholder Data Services to assist the directors to rectify the shareholders
register and that this ‘project’ was ‘well underway’. The Com mission points out
that a copy of the register has still not been provided .

[18] The compliance notice dated 19 September 2017 required Selective: to
provide the Commission with its annual financial statements for the 2016
financial year (which ended on 30 June 2016) signed by the registered auditor
and approved and signed by the direc tors; to provide reasons why the annual
financial statements of 30 June 2016 were not timeously prepared by the
directors; to submit the minutes of the annual general meeting; to submit proof of
compliance with s 24(4) (a); and to provide a report on how in stances of non -
compliance detected during an audit would be remedied to avoid a future repeat
of non -compliance.

14

[19] A subsequent report by the inspectors of the Commission dated 7
December 2017 , confirmed that Selective had not remedied its various defaults.
Accordingly, the notice to show cause dated 7 December 2017 , was issued. A
further inspectors’ report dated 14 February 2018 confirmed that Selective
remained in default. It recommended that a compliance notice should be issued
to Selective to demand that it cease carrying on its business or trading.

[20] The compliance notice issued on 14 February 2018 , pursuant to that
recommendation , detailed the history of notices and contraventions, evaluated
Selective’s responses, recorded clearly that the responses were inadequate, and
required Selective to cease carrying on its business or trading until various
conditions were all complied with. These conditions included: providing
certification that the share register was up to date and the verification thereof
completed; submitting the annual financial statements f or the year ended 30 June
2017; submitting the notice, agenda and minutes of legally constituted annual
general meetings; and, as regards false statements and reckless conduct, to
provide proof of the existence of an alternative platform to trade in the se curities
issued by Selective. Failing compliance with any one condition, the Commission
would apply for the winding -up of Selective.

[21] The second judgment maintains that there was proper compliance with
reference to an isolated statement, dated 9 September 2020 (some three months
after the date of the founding affidavit) from the Commissioner CIPC, which
refers to the receipt of ‘annual r eturns’ for Selective for the years 2013, 2014,
2015, 2016, 2017, 2018 and 2019 . It maintains further that this has not been
placed in issue in the Commission’s replying affidavit and must be accepted as
correct and any allegations that at the time the mat ter was heard by the high court
there were outstanding annual financial statements, must be rejected. I
respectfully disagree.

15

[22] Courts decide matters on the allegations in the affidavits. The replying
affidavit, in three instances at the outset, namely in paragraphs 6, 9 and 10 deny
the allegations in the answering affidavit that are in contradiction to what has
been stated in the founding affidavit, or not specifically dealt with, and repeats
that Selective had not overcome the challenges. The statement referred to
accordingly was placed in dispute.

[23] Furthermore, as regards any criticism that the certificate was not responded
to separately, a party to litigation is not required to trawl through annexures to an
affidavit to identify what might or might not possibly be relevant and relied upon.
It was in cumbent on Selective to have specifically raised its alleged compliance,
for example, by having submitted all annual financial statements, in the text of its
answering affidavit.29 Selective failed to do so.

[24] An annual return in terms of s 33 is something different to the requirement
of annual financial statements. What might be meant by the ‘annual return’ and
that it had allegedly been complied with, and if so, what impact that would have,
was not raised with the Commission’s counsel and the Commission accordingly
never had the opportunity to respond thereto during argument.

[25] The same applies to the alleged certification by the company secretary,
except that in addition, the alleged certification constitutes inadmissible hearsay
evidence as it is relied upon for the truth of the contents thereof, although no
confirmatory affida vit was filed from the company secretary. Similarly with
regard to the share register. It is, incorrect that the ‘Commission chose not to deal
with these facts in the replying affidavit’. It denied the allegations in the
answering affidavit insofar as they were in contradiction to the founding affidavit.
There is no other way to dispute that the share register is properly updated, than

29 Minister of Land Affairs and Agriculture and Others v D & F Wevell Trust and others 2008 (2) SA 184 (SCA)
at para 43, approved by the Constitutional Court in Genesis Medical Aid Scheme v Registrar, Medical Schemes
and Another 2017 (6) SA 1 (CC) at para 171.
16

to deny it. Significantly again, Selective never applied for compliance certificates
to be issued if it was of the view that it had complied.

[26] Selecti ve accordingly did not even begin to comply with the obligations,
which it had been called upon repeatedly to comply with. Further, separate and
distinct from any compliance issues, it failed to show that it was not trading
recklessly or fraudulently and that its assets properly valued exceeded its
liabilities.

[27] As the conditions stipulated were not complied with and as the various
instances of non -compliance were not attended to satisfactorily, the Commission
brought an application (the delinquency application) to have some of the directors
of Selective declared delinquent directors. This application is apparently still
pending. The Commission also launched the liquidation application, which is the
subject of this appeal.

[28] In summary, Selective’s answer to the various allegations of non -
compliance, include, inter alia , the following:
(a) It admitted that it and some of its directors failed on numerous occasions
to timeously comply with various statutory duties;
(b) It admitted that annual financial statements were not prepared as required;
(c) It raised, by way of explanation, that a new board appointed in August
2017, consisting of four members and Mr Moses Maja (Mr Maja), the
deponent to the answering affidavit who continued as a director and, it
seems, is its sole executive director:30 was seeking to undo the damage
resulting from self -confessed poor management and litigation; had
prepared and published ‘various annual reports’ (but only one for the year
ended 30 June 2017/2018 was attached); had subsequently complied with

30 According to the 2017/2018 annual report Mr Maja appears to still be the person mainly charged with the
administration of Selective, and its only executive director, the other four being non -executive directors.
17

its tax obligations, annexing what purports to be a tax compliance status
certificate; and that it had entered into an agreement with Singular Systems
(Pty) Ltd (Singular) to ‘clean up’ the share register and provide certain
services, including maintaining the register and providing a trading
platform;
(d) It denied that it was at any time unable to pay its debts as they became due
and payable in the normal course of business; and that it was trading whilst
not able to pay its debts, but without having reviewed any notices or
obtaining a compliance certifica te to that effect and without producing
proof thereof;
(e) The annual financial statements for the year ended 30 June 2018, which
were the only full annual financial statements annexed, were already late.

[29] Selective’s approach in answering the pertinent allegations of non -
compliance made against it was one of vagueness, lacking in detail, failing to
provide proof of proper compliance, and was thus unacceptable. The directors
were in serial default of their duties, variously by reason of indifference,
ignorance or careless disregard. They failed in their duty to Selective to comply
properly and timeously, and in no small measure, at all, with the pro visions of the
Act, and their legal and fiduciary duties and responsibilities. It is not the function
nor responsibility of the Commission to advise on the ‘day to day running’ of
Selective. The Commission is the regulator and must maintain a professional
distance from all the companies it regulates. It would be a m atter of impossibility
and likely overreach for the Commission to help and advise on the day to day
running of all companies and close corporations registered with it. The failure on
the part of Selective, represented by Mr Maja, to recognise and accept Selective’s
most basic general corporate governance responsibility is damning and
disturbing. And very little has changed in Selective after all these notices. Mr
Maja is still the sole executive director, even of the ‘new board’.

18

[30] Save for a few specific responses, some being pregnant denials of non -
compliance but unsupported by documentary proof of compliance, the remaining
allegations of non -compliance were simply met with an omnibus response that
where a factual allegation had b een made in the founding affidavit and it conflicts
with what is set out in the answering affidavit, it should simply be considered to
be denied. Selective did not enjoy the luxury of such an answer. When the facts
averred in an opposed application are suc h that the respondent must necessarily
possesses knowledge of them it must provide proof of compliance . Instead of
providing a substantiated answer, Selective rests its defence on a bare or
ambiguous denial, in which circumstances a court is entitled to adopt a robust
view of the matter31 and infer that there was no proper compliance.

[31] Specifically, Selective denied a contravention of s 30 (annual financial
statements), s 24(4) (a) (failure to maintain a securities register or its equivalent
as required in terms of s 50), failure to raise any capital for prospectuses
registered on 23 January 2012, 16 July 2012, 16 October 2012, 16 January 2013,
25 April 2013 and 18 November 2013, an d denied the non -negotiability of
securities held. Selective had a positive duty, if it denied non -compliance, to
provide proof of proper compliance by annexing copies of these documents, or at
least formally tendering copies thereof in terms of rule 35(12). It failed to do so.

[32] It relied, in its answer, on a Report of an Independent External Auditor. The
contents of this report are not confirmed under oath. That notwithstanding, the
report, which is dated 24 July 2019, records results for the interim period ended
on 31 December 2 018. The interim results were also late in being issued only on
24 July 2019. The breaches of provisions of the Act continue. The new board too,
has failed to ensure full and proper compliance with the provisions of the Act,
notwithstanding a reasonable pe riod having elapsed since its appointment.


31 Wightman t/a JW Construction v Headfour (Pty) Ltd 2008 (3) SA 371 (SCA) para 13.
19

[33] If Selective was not guilty of this egregious disregard of virtually
everything required of it and if it was to properly conduct itself as a public
company, then it should have obtained the necessary compliance certificates. It
failed to do so. The overall picture that emerges on the totality of the evidence is
that Selective blunders along recklessly, without timeous and proper financial
statements, openly in default of many of its obligation s in law, without a proper
shareholders’ register and certainty a s to who its investors are . The only
reasonable inference must be that it is unable to do so despite repeated demands,
to demonstrate that its assets exceed its liabilities and that it is not trading
recklessly.

[34] And the persons who stand to suffer, are the disadvantaged individuals it
has recruited as shareholders with the promise of investment growth. These are
persons who would otherwise not be able to afford to invest on the JSE and who
are likely unable to hold their ‘board’ to account, that is even if properly convened
annual general meetings were convened . The negative impact on the ir rights,
speaks for itself.

The liquidation of companies
[35] The winding -up of companies is regulated by the provisions of the Act. The
1973 Act did not draw a distinction between the winding -up of insolvent and
solvent companies. The Act, however, draws that distinction, but it does not
define what is meant by solv ency or insolvency. This Court, in Boschpoort
Ondernemings (Pty) Ltd v Absa Bank Ltd ,32 recognised the forms of insolvency
as factual insolvency (where a company’s liabilities exceed its assets) and
commercial insolvency (a position in which a company is in such a state of
illiquidity that it is unable to pay its debts, even though its assets may exceed its
liabilities). The test is not as stated in the second judgment whether the company

32 Boschpoort Ondernemings (Pty) Ltd v Absa Bank Limited [2014] 1 All SA 507 (SCA); 2014 (2) SA 518 (SCA)
para 16 ; Ex parte De Villiers and Another NNO: In re Carbon Developments 1993 (1) SA 493 (SCA) 502D .
20

in winding -up, that is after liquidation of all its assets, can pay its debts. It is
sufficient if it cannot pay its debts as they fall due without first liquidating fixed
assets and investments, that is, that it is commercially insolvent. The net asset
value of R145 056 597 ( of Selective ) is not the sole determinant of whether the
company is insolvent .

[36] Nor is the statement of the audit committee that Selective ‘complies in all
respects with the requirements of the Act’ of assistance. This is a conclusion of
unidentified persons, not under oath, and thus inadmissible hearsay, and which,
in any event , was denied in reply. Section 345 is furthermore not, with respect, ‘a
safeguard to avoid liquidating a company without evidence to prove . . . that it
may be insolvent’ . Section 345 assists as pointed out in the second judgment in
establishing commercial insol vency when a creditor seeks the winding -up of a
company. But a company may also be wound up by a variety of other persons ,
other than creditors, for whom s 345 would hold no benefit. Ultimately, the issue
is whether on a conspectus of all the evidence the company is, or, in casu, may be
commercially insolvent. Every case must be decided on its own facts .

[37] Nothing is achieved by drawing comparisons with the actual financial
position of companies in other cases as the second judgment seeks to do with
reference to Boschpoort . Although, at the time of the filing of the answering
affidavit, annual financial statements beyond the 2018 financial year should have
been available and annexed, Selective chose to annex only the 2018 statements
for reasons which remain unexplained, but at the level of inference probably was
because these were the only ones available. And these statements demonstrate
that it is commercially insolvent , as I shall explain below .

[38] The distinction between solvent and insolvent companies is not the only
new aspect of the Act. A company could in the past always also be wound -up on
the grounds that it would be just and equitable to do so, whether it was solvent or
21

insolvent. The 1973 Act also provided that the Trade Minister, who had
Ministerial oversight functions, could apply for the winding -up of any company .
This power of the Minister was removed by the Act and, it can be safely accepted,
was given to the Commission33 which remains responsible to exercise the
oversight function.

[39] The r esponsibilities of the Minister have under the Act been transferred to
the Commission. There is no reason why these powers should be restricted, in the
case of winding -up of a company, and at the instance of the Commission, to only
the instances in s 81(2 )(f).

[40] The present position in respect of insolvent companies is the same as it was
under the 1973 Act. As has been held:
‘It has also long been a construction of interpretation of statutes that, in the absence of express
wording to the contrary, the legislature did not intend to alter the law as it had previously stood
. . ..’34
The context and purpose of the Act are even more supportive of the aforesaid
construction.

The winding -up of solvent companies
[41] Section 79(1) and (2) provide that:
‘(1) A solvent company may be dissolved by –
(a) voluntary winding -up initiated by the company as contemplated in section 80, and
conducted either -
(i) by the company; or
(ii) by the company’s creditors, as determined by the resolution of the company;
or
(b) winding -up and liquidation by court order, as contemplated in section 81.

33 Recycling & Economic Development Initiative of South Africa NPC v Minister of Environmental Affairs 2019
(3) SA 251 (SCA) para 129.
34 Boschpoort Ondernemings (Pty) Ltd v ABSA Bank Ltd 20214 (2) SA 518 (SCA) para 19.
22

(2) The procedures for winding -up and liquidation of a solvent company, whether
voluntary or by court order, are governed by this Part35 and, to the extent applicable, by the
laws referred to or contemplated in item 9 of Schedule 5.’36

[42] As regards the winding -up of a solvent company by a court order, s 81
specifies the grounds on which the company itself; a business rescue practitioner;
one or more of the company’s creditors; the company, directors or shareholders;
a shareholder with the leave of the court; and the Commission or the Takeover
Regulation Panel may apply for a winding -up order. Section 81(1) (f) provides
that:
‘(1) A court may order a solvent company to be wound up if –
. . .
(f) the Commission or Panel has applied to the court for an order to wind up the company
on the grounds that –
(i) the company, its directors or prescribed officers or other persons in control of the
company are acting or have acted in a manner that is fraudulent or otherwise illegal, the
Commission or Panel, as the case may be, has issued a compliance notice in respect of
that conduct, and the company has failed to comply with that compliance notice; and
(ii) within the previous five years, enforcement procedures in terms of this Act or the
Close Corporations Act, 1984 (Act 69 of 1984), were taken against the company, its
directors or prescribed officers, or other persons in control of the company for
substantially the same conduct, resulting in an administrative fine, or conviction for an
offence; . . .’

The winding -up of insolvent companies
[43] Item 9 of schedule 5 to the Act provides for the continued application of
provisions of the 1973 Act in respect of the liquidation of insolvent companies. It
provides:
‘(1) Despite the repeal of the previous Act, until the date determined in terms of sub -item (4),
Chapter 14 of that Act continues to apply with respect to the winding -up and liquidation of
companies under this Act, as if that Act had not been repealed subj ect to sub -items (2) and (3).

35 That is Part G of Chapter 2 of the Act. It comprises sections 79 to 83 of the Act.
36 Item 9 of Schedule 5 is set out in paragraph 29 below.
23

(2) Despite sub -item (1), sections 343, 344, 346, and 348 to 353 do not apply to the winding -
up of a solvent company, except to the extent necessary to give full effect to the provisions of
Part G of Chapter 2.
(3) If there is a conflict between a provision of the previous Act that continues to apply in terms
of sub -item (1), and a provision of Part G of Chapter 2 of this Act with respect to a solvent
company, the provisions of this Act prevail.
(4) The Minister, by notice in the Gazette, may –
(a) determine a date on which this item ceases to have effect, but no such notice may be
given until the Minister is satisfied that alternative legislation has been brought into force
adequately providing for the winding -up and liquidation of insolvent compan ies; and
(b) prescribe ancillary rules as may be necessary to provide for the efficient transition from
the provisions of the repealed Act to the provisions of the alternative legislation
contemplated in paragraph (a).’

[44] Section 344 of the 1973 Act, which continues to apply, provides:
‘A company may be wound up by the Court if –
(a) the company has by special resolution resolved that it be wound up by the Court;
(b) the company commenced business before the Registrar certified that it was entitled to
commence business;
(c) the company has not commenced its business within a year from its incorporation, or has
suspended its business for a whole year;
(d) in the case of a public company, the number of members has been reduced below seven;
(e) seventy -five per cent of the issued share capital of the company has been lost or has
become useless for the business of the company;
(f) the company is unable to pay its debts as described in section 345;
(g) in the case of an external company, that company is dissolved in the country in which it
has been incorporated, or has ceased to carry on business or is carrying on business only for
the purpose of winding -up its affairs;
(h) it appears to the Court that it is just and equitable that the company should be wound up .’
(Emphasis added)

[45] As to what might be ‘just and equitable’, the jurisprudence is well
established and will include: ‘the disappearance of the company’s substratum’;
‘illegality of the objects of the company and fraud committed in connection
24

therewith’; a ‘deadlock which results in the management of the company’s
affairs’; ‘grounds analogous to those for the dissolution of a partnership’; and
‘[where there has been] oppression’.37 This list is not exhaustive. The grounds are
furthermore not confined to instances which are analogous to those in other parts
of the section. No general rule can be laid down as to the nature of the
circumstances that have to be considered to ascertain w hether a case comes within
the phrase.38

[46] Although ‘just and equitable’ is not a catch all ground for winding -up a
company,39 our courts are empowered to exercise their own discretion, to prevent
the continuation of a company if it would be detrimental to its shareholders or the
public interest, on the basis that it is just and equitable that it be wound up.

[47] Section 79(3) makes it clear that the just and equitable criterion is to be
applied also to companies which are insolvent or may be insolvent . It has been
held in the past that s 344 (h) postulates not facts, but only a broad conclusion of
law, ‘justice and equity as a ground for winding -up’.40 This principle,
undoubtedly, also holds true in the determination of what may constitute just and
equitable grounds for the purpose of s 79(3).

[48] What is just and equitable is furthermore constantly undergoing
development as new instances of liquidating a company on that ground develop,
are recognised and are accepted. This flexibility is necessary to cater for changing
business circumstances. It is also consistent with the provisions of s 158 of the
Act. Section 158 provides:

37 These five categories were recogni sed in, for example, Rand Air (Pty) Ltd v Ray Bester Investments (Pty) Ltd
1985 (2) SA 345 (W) (Rand Air ) at 350A -H.
38 Thunder Cats Investments 92 (Pty) Ltd and Another v Nkonjane Economic Prospecting and Investment (Pty)
Ltd and Others [2013] ZASCA 164 ; [2014] 1 All SA 474 (SCA); 2014 (5) SA 1 (SCA) para 15 .
39 Rand Air fn 30 above at 349F.
40 Apco Africa (Pty) Ltd v Apco Worldwide Incorporated [2008] ZASCA 64 ; [2008] 4 All SA 1 (SCA); 2008 (5)
SA 615 (SCA) para 16.
25

‘When determining a matter brought before it in terms of this Act, or making an order
contemplated in this Act –
(a) a court must develop the common law as necessary to improve the realisation and
enjoyment of rights established by this Act; and
(b) the Commission, the Panel, the Companies Tribunal or a court –
(i) must promote the spirit, purpose and objects of this Act; and
(ii) if any provision of this Act, or other document in terms of this Act, read in its
context, can be reasonably construed to have more than one meaning, must prefer the
meaning that best promotes the spirit and purpose of this Act, and will best improve the
realisation and enjoyment of rights.’

Provisional winding -up orders
[49] Ordinarily, following an application for the liquidation of a company and
the exchange of affidavits, the usual procedure41 is to grant a provisional order of
winding -up and a rule nisi calling on all interested persons to show cause why a
final winding -up order should not be granted. This procedure is not laid down in
the Act or any of its predecessors. It is, however, in our law, a well -established
practice.42 Granting an outright final winding -up order might be suggested in
some practice manuals or directives of divisions of our high court, but usually
only where there are good reasons to do so. However, the grant, firstly, of a
provisional winding -up order should be ordinarily preferred, where this is
appropriate and required in the interests of justice.

[50] That is because there is much to commend first granting a provisional
winding -up order. It allows an opportunity for a respondent company to oppose
the final winding -up order on the return day, when the test is different to that
which applies at the provis ional stage. It also affords interested third parties with
notice of the provisional winding -up order, thereby allowing them to participate
in the proceedings. By proceeding directly to the grant of a final order, without

41 Wackrill v Sandton International Removals (Pty) Ltd and Others 1984 (1) SA 282 (W) ( Wackrill ) at 285B -D.
Quoted with approval in Kalil v Decotex (Pty) Ltd and Another 1988 (1) SA 943 (A); [1988] 2 All SA 159 (A)
para 59.
42 P A Delport Henochsberg on the Companies Act 71 of 2008 Vol 3 SI 36 (2024) at 724(3).
26

first granting a provisional order, interested parties are denied the opportunity to
be heard. They are then presented with a final order, as a fait accompli.

[51] The process of a provisional order, where appropriate, preceding the
adjudication of a final winding -up order, is therefore a salutary practice. This is
particularly so in the case of the winding -up of a public company, with its
exposure to the general pub lic and its shareholders often running into many
thousands of persons. It is all the more so where the company’s share register is
incomplete or otherwise inadequate, as is the case with Selective. Third parties
who are in the possession of facts material to the winding -up will become aware
of the provisional winding -up order and can then place their views, whether in
favour or against the liquidation before the court. The court should then be better
informed when it has to decide whether a final order shou ld be granted. That did
not happen in this instance.

In the high court
[52] The factual basis on which the high court was required to make its findings,
and the evidentiary matrix on which this appeal is to be decided, are the facts
alleged in the affidavits. Those were the facts known to the high court when
adjudicating the winding -up application.43

[53] The high court found that the grounds in s 81(1) (f) were not satisfied. The
correctness of that finding has rightly not been disputed, and it has not featured
further. Any reliance on the provisions of s 81(1) for the winding -up of Selective
as a solvent company would, in any event, not have been competent if it were in
fact insolvent.


43 Trencon Construction v Industrial Development Corporation 2015 (5) SA 245 (CC) para 51 and 52.
27

[54] Section 81(1) (f) was not the only basis on which the Commission brought
its application. It relied, in the alternative, on the ground that it would be just and
equitable that Selective should be wound -up.

[55] The high court concluded that Selective was insolvent. Selective had only
placed its 2018 annual financial statements before the high court.44 The high court
found that Selective had made a past operating loss of more than R11 million. It
uses capital raised through the sale of its shares to purchase shares listed on the
JSE, dealing with the investments of its shareholders and making a loss of this
nature. The high court correctly viewed this as of necessity meaning that its
liabilities exceed its assets, its assets being the shares in other companies. Apart
from day -to-day expenses such as rent and salaries, the liability to its shareholders
remains.

[56] The high court however continued by saying that insofar as ‘s 344 (h) does
not only apply to insolvent companies, [the court] need not rely on this finding’
of insolvency only. Presumably what the high court had in mind were the
provisions of s 79(2) that ‘[the] procedures for winding -up and liquidation of a
solvent company ’ are governed by Part G45 to the extent applicable , by the laws
referred to or contemplated in item 9 of Schedule 5. Item 9(2) also provides that
despite s 344 and other provisions not applying to the winding -up of a solvent
company, it does apply, ‘to the extent necessary to give full effect to the
provi sions of Part G of Chapter 2’.46


44 The judgment recorded that despite Selective having claimed that all audited statements had been filed and
uploaded on case lines no such documents were before the court. The issue is however not whether they were
uploaded on case lines. They need to be i ntroduced by affidavit, and insofar as the proposed supplementary
affidavit might have purported to do so, it was disallowed. According to it, it is not evidence before the court.
45 Part G is contained in Chapter 2 of the Act and includes sections 79 to 83.
46 In view of the conclusion to which I have come in this judgment it is not necessary to consider this conclusion
further.
28

[57] The high court concluded that: it being common cause that Selective acted
illegally and did not comply with the compliance notices issued to it or complied
only in certain respects; or complied only much later and long after having
undertaken to do so; its directors, realising that it is insolvent and the value of its
shares ever diminishing, still did not put a motion for voluntary liquidation to the
vote before an annual general meeting of shareholders , that it would be just and
equitable for a winding -up order to be granted. In this respect the high court
invoked the provisions of s 158.47

[58] The second judgment concludes that the processes in s 34648of the 1973
Act were not adhered to. It seems that the complaint relates specifically to the
requirements of s 346 (3) and possibly s 346 (4). It is highly unlikely that the high
court order would have been granted absent compliance with the se provisions of
s 346. Non-compliance was however never raised as a ground of appeal, nor
during argument. It cannot now be found as a proven fact, and for a conclusion
that adequate notice was not given. It is simply unknown when these requirements
might have been complied with. But, in any event, no minimum ‘notice’ period
is prescribed. Section 346 of the 1973 Act simply provides that the certificate
from the Master must not have been issued more than 10 days before the
application is moved. In practice the security is often provided and the certificate
obtained on the day the application is heard. The certific ate, and the Master’s
report, are then handed up by counsel in court when moving for the order of
provisional winding -up.

[59] The high court concluded that as a result of the matter ‘having been argued
fully’, there was no need to grant a provisional order. It granted a final order.

47 The relevant part of s 158 is quoted in paragraph 32 above.
48 Section 346(3) require s that every application to court shall be accompanied by a certificate by the Master ,
issued not more than ten days before the date of the application, to the effect that security has been given for the
payment of all fees and charges necessary for the prosecut ion of the winding -up proceedings and the costs of
administering the company in liquidation until a provisional liquidator has been appointed. Section 346(4)
provides that before an application for the winding -up of a company is presented to a court, a copy thereof shall
be lodged with the Master who may then report to the court.
29

Was Selective taken by surprise?
[60] Whether Selective was taken by surprise regarding the issue whether it is
insolvent or may be insolvent requires an examination of the case which it had to
meet, as set out in the Commission’s founding affidavit. It is trite law that
although specific statutory provisions relied upon in support of a cause of action
are often alleged with reference to number and in terms in affidavits, this is not
an invariable rule. It is sufficient if a respondent is appraised of the basis of the
claim against it in the context of the applicable law , to enable it to respond
meaningfully ther eto.49 This requirement was met on the facts of this appeal.

[61] The Commission sought Selective’s winding -up, in the alternative, to its
application based on s 8(1) (f), on the basis that it would be just and equitable to
do so. Selective correctly recognises that this would require a finding as to its
solvency. Section 79(3), in express terms, requires that a determination be made
as to whether the company is insolvent or may be insolvent. That contemplates,
or at least permits of a determination coming about in the course of proceedings
and after the exchange of affida vits, even if not specifically pleaded. Not
surprising, Selective on its own admission was alive to the fact that its solvency
was in issue.

[62] It would be contrary to the text and purpose of s 79(3) to adopt an
interpretation of the provisions of the Act which would permit an application for
the winding -up of a solvent company, based on one of the grounds in s 81, to be
defeated by the company es tablishing that it is insolvent, thereby escaping its
winding -up notwithstanding its insolvency, unless and until a separate substantive
application based on its insolvency is brought. It would result in a multiplicity of
proceedings, and the possibility o f conflicting judgments on a company’s
solvency.

49 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism and Others [2004] ZACC 15; 2004
(4) SA 490 (CC ); 2004 (7) BCLR 687 (CC) para 27.
30


[63] The provisions of s 79(3), perhaps inelegantly but nevertheless plainly ,
exclude that possibility. They preserve the provisions of the 1973 Act, including
s 344 (h) for the winding -up of a company, inter alia , on the grounds that it would
be just and equitable to do so, on the application by any interested party, when in
an application for the winding -up of a company alleged to be solvent, it turns out
to be insolvent.

[64] The grounds for winding -up in the 1973 Act are, in terms of s 79(3),
available not only where it is determined that a company is insolvent, which
would include de facto and commercial insolvency,50 but also where a court
determines that it ‘may be insolvent’. If determined that it ‘may be insolvent’,
then, provided the other requirements of s 79(3) are satisfied, namely that there
is an application by an ‘interested party’, the court hearing the app lication in terms
of s 81 may proceed and wind -up the company if, it is, just and equitable to do
so. That is what happened in this case .

[65] The founding affidavit provided that the winding -up of Selective was
sought on the basis of s 81(1) (f), and alternatively to s 81(1) (f), on the basis that
it would be just and equitable to do so. Although terse, the founding affidavit also
included specific allegations under a separate heading of ‘Just and Equitable’:
that Selective was carrying on its business recklessly thus evincing a lack of any
genuine concern for the prosperity of Selective; that a director, Mr Maja, himself
was of the opinion that Selective required the assistance of regulatory bodies,
such as the Commission, to ensure that shareholde rs and their monies were
protected; that Selective be placed under curatorship, if deemed necessary under
the circumstances; and that the directors, or at least Mr Maja, had questioned the

50 Standard Bank of South Africa Ltd v R -Bay Logistics CC [2012] ZAKZDHC 69; [2013] 1 All SA 364 (KZD);
2013 (2) SA 295 (KZD) para 29.
31

viability of Selective, expressing the concern that it is doubtful and highly
unlikely that Selective could achieve its raison d’etre .

[66] The founding affidavit did not specifically allege that Selective was
insolvent. That is not surprising.51 It could hardly be expected of the deponent to
the Commission’s founding affidavit to have alleged as a fact under oath, that
Selective was insolvent. Selective had failed to provide its annual financial
statements for many years.

[67] The annual financial statement for the year ended 30 June 2018 found its
way into the proceedings before the high court as an annexure to the answering
affidavit. The deponent to the founding affidavit, paying due regard to the fact
that the Commission is not in the position of a creditor or shareholder of Selective
with knowledge of its liabilities, could not independently positively swear under
oath that Selective was insolvent.

[68] Selective would not have been taken by surprise. Indeed, it annexed its
annual financial statements for the year ended 30 June 2018 to its answering
affidavit, no doubt in an attempt to show that it was compliant . Unfortunately, the
2019 financials were by then already overdue, which demonstrate s that Selective
was still non -compliant.

[69] But the 2018 financials, being presumably the most up to date financials
available at the time of deposing to the answering affidavit, did contain factual
information as to Selective’s insolvency. That would inevitably have to be
assessed for a court to de termine whether s 79(3) would find application. To the
extent that Selective might at the time have under -estimated the importance of the

51 It is not necessary to plead legal conclusions or to label the cause of action in pleadings – Die Dros (Pty) Ltd
and Another v Telefon Beverages CC and Others [2003] 1 All SA (C) para 28 confirmed in Van Heerden v
Bronkhorst 2020 JDR 2363 (SCA) para 26.
32

issue of its insolvency, it only had itself to blame. But it will not have been
irreparably prejudiced in the light of the order that I propose granting below.

[70] The requirements to be considered in determining whether Selective
should have been placed under a winding -up order are whether there was an
application for the winding -up of Selective by any interested person and whether
Selective was or may be insolvent. For convenience I shall deal first with whether
the Commission was ‘an interested person’ as contemplated by s 79(3), then
whether the high court faced an ‘application’, and then whether Selective ‘is or
may be insolvent.’

The Commission as an ‘interested person’
[71] Section 79(3) requires that where it is determined that a company is or may
be insolvent, it can be wound up on the application of an interested person. The
phrase ‘interested person’ is not defined. The provision must be seen in its
historical legislative context. Doing so and having regard to the objectives of the
Commission stated in s 186, the irresistible conclusion is that the Commission
would qualify as an interested person.52

[72] It is incorrect to conclude, as the second judgment does , that an application
for the winding -up of a company which might have been believed to be solvent,

52 Under the 1973 Act , the Minister could bring such an application. It has however been suggested that the
Minister would not qualify as a person under the Act – see Recycling and Economic Development Initiative of
South Africa v Minister of Environmental Affairs; Kusaga Taka Consulting (Pty) Ltd v Minister of Environmental
Affairs [2019] ZASCA 1; [2019] 2 All SA 1 (SCA); 2019 (3) SA 251 (SCA) paras 121 -131. The Commission
however is a ‘person’ . A ‘person’ is defined in s 1 of the Act to include a juristic person. Over and above its
ordinary common law meaning, a ‘juristic person’ is given an extended meaning. Section 185 establishes the
Commission as a juristic person. The Minister had the power to bring applications for the liquidation of companies
under the 1973 Act. The Minister under the Act reports matters for investigation to the Commission. The
legislature, having regard to the text, context and purpose of the Act, would not have left a la cuna that where
following investigations a case exists for the liquidation of a company that has flouted the requirements of the Act
and is or may be insolvent, and has not established, despite being required by the Act to address the issue in a
particular manner, that it is not trading in insolvent circumstances, that it cannot be liquidated at the instance of
the Commission. To the extent that there may be any ambiguity in this regard, the provisions of s 158 (b)(ii) will
find application as best promoting the spirit and purpose of the Act and best improving the realisation and
enjoyment of rights, including the rights of the general public to be protected against public companies who
conduct themselves thus.
33

for the purposes of s 81, but when determined that it is or may be insolvent as
contemplated in s 79(3), c an then only be wound up on the application of those
categories of persons in s 81 in respect of whom the legislature in s 81 expressly
provided where ‘it is otherwise just and equitable for the company to be wound -
up.’ Such a provision appears only in: s 81(1) (c) in a winding -up by one or more
creditors, and s 81(1) (d) in a winding -up by the company, one or more directors,
or one or more shareholders o n the ground stated therein.53 That is not surprising.
The legislature wanted to provide , in respect of those persons , that a court would
have the power to wind -up a company on the grounds of it being just and
equitable to do so, even if solvent . But it does not affect the position of insolvent
companies .

[73] The position is altogether different if during the course of any proceedings
in terms of s 81, that is at the instance of any of the persons listed in s 81(1) (a)
through to (f) it is determined that the company ‘is or may be insolvent’. It may
then be wound -up on the grounds stated in s 79(3) which include undisputedly ,
the ground of it being just and equitable’, on the application of an ‘interested
person’. If the intention of t he legislature was to confine such an application to
the sub -categories of persons listed in the sub -paragraphs of s 81 where express
reference is made to ‘it is otherwise just and e quitable for the company to be
wound -up’, then it would have said so, and referred to the persons in s 81(1) (c),
and (d) rather than an ‘interested person’. It did not do so, but deliberately chose
instead, to confer this right to apply for the winding -up, on any ‘interested
person’.

[74] These sections all appear in the same chapter of the Act. The legislature
must be taken to have in mind the existing law when it passes new legislation and

53 There are no such reference in the case of subparagraphs (a), applications by the company, (b) in the case of
business rescue practitioners, or (e) applications by a shareholder where directors or other persons in control of
the company acted in a fraudulent or otherwise illegal manner or the company’s assets are misplaced or wasted;
and (f) relating to applications by the Commission.
34

frames new legislation with reference to the existing law .54 There is furthermore
also no reason to interpret the meaning of ‘interested person’ with reference to
what is meant by ‘interest’ in the context of deciding on the joinder of parties to
litigation . Joinder might require ‘a direct and substantial interest’ but in s 79(3)
the words ‘interested person’ are used in an unqualified way, for an altogether
different purpose, in an altogether different context and in the widest sense.

[75] Selective has failed to comply with various statutory requirements. It is the
function of the Commission to ensure proper compliance with these requirements.
Not only has Selective failed to comply with these requirements, but it is also
commercially, if n ot actually, insolvent. It is difficult to contemplate a party
having a more real interest than the Commission, as regulator with broad
supervisory powers , to seek the winding -up of a company that is insolvent.

[76] This conclusion is also consistent with s 157 which provides for ‘extending
standing to apply for remedies’. It provides:
‘(1) When, in terms of this Act, an application can be made to, or a matter can be brought before
a court . . . the right to make the application or bring the matter may be exercised by a person –
(a) Directly contemplated55 in the particular provision of this Act;
(b) . . .’ (Emphasis added)
Standing has also received a wider interpretation in our constitutional
dispensation .56


54 Independent Institute of Education (Pty) Ltd v KZN Law Society 2020 (2) SA 325 (CC) para 38.
55 Not expressly referred to in the Act.
56 In Ferreira v Levin NO and Others; Vryenhoek and Others v Powell NO and Others [1995] ZACC 13; 1996
(1) SA 984 (CC); 1996 (1) BCLR 1, the Constitutional Court set out the criteria for evaluating whether an applicant
should be given leave to act in the ‘public interest’. In the context of the matter before this Court, the evaluation
includes considering: (i) the nature of the allegations advanced as to why the public interest is implicated; (ii) the
relevant provisions of the Act, which provide the context of the allegations; (iii) the provisions of the Act for
addressing such allegati ons; (iv) whether there are other reasonable and effective ways in which the challenge
may be brought; and (v) the range of persons or groups who may be directly or indirectly affected by any order
of the court and the opportunity that those persons or gro ups have had to present evidence and argument to the
court.
35

[77] There is no reason why the ‘interested person’ contemplated in s 79(3)
should not include an applicant in an application under s 81. The Commission , as
the official regulator , is a person who would have a very real interest in the
winding -up of Selective. Selective had failed to respond to notices from the
Commission to show that it was not trading in insolvent circumstances, its
administration reveals a dismal failure to compl y with basic statutory
requirements , and notwithstanding undertakings to correct this position also by
the intervention of a newly constituted board, it had not done so. The Commission
had standing to apply for the winding -up of Selective on the alternative basis of
it being just and equitable, as it is an interested party.

The requirement of ‘an application’
[78] Accepting that the Commission would qualify as an interested party,
Selective disputed that there was an application for it to be wound up as an
insolvent company. Selective contended, somewhat weakly , that a separate
substantive application setting out the basis upon which the winding -up would be
sought, for example that it was just and equitable to do so, of which Selective
would have to be given notice, was required.

[79] There is no reason that the application should emanate from a third party,
and why it could not also emanate from the Commission. Any other interpretation
would be absurd.57 It would also fly in the face of the purpose underlying s 79(3),
namely to provide a court with the power to liquidate Selective at the instance of
the Commission, as an applicant in an application in terms of s 81 , if the court
determines that Selective may be insolvent.


57 Just as an application for a deviation in terms of s 105 of the Tax Administration Act may be brought in the
same application that other substantive relief is claimed in a tax appeal, as opposed to it being claimed in a separate
application – see United Manganese of Kalahari (Pty) Ltd v Commissioner for SARS and four other cases [ 2025]
ZACC 2 para 64.
36

[80] There is no need for a separate substantive application. Selective had been
given notice in the application by the Commission that its winding -up would be
sought, in the alternative, on the grounds of it being just and equitable to do so,
which is the basi s for liquidation contemplated in s 79(3). There is absolutely no
reason, in principle, why this could not be done in the same application. Section
79(3) does not require a separate substantive application. The requirement of an
application was accordingly satisfied.

Should a final winding -up order have been granted?
[81] Whether a company should be wound up on the ground of it being just and
equitable to do so , is a wide enquiry that requires to be assessed holistically. This
is all the more so in the case of a public company.

[82] The high court concluded that ‘as a result of the matter having been argued
fully’, there was ‘no need to grant a provisional order’. Potentially interested
parties, including shareholders and creditors were therefore denied the benefits
of the two -stage p rocedure where a provisional order is first granted. In acting
thus, the high court, on the specific facts of this case, erred. The issues in this case
concerned a public company and the interests of many shareholders, in
circumstances where considerable d oubt exists as to the reliability and integrity
of its shareholders’ register.

[83] I am therefore disposed to setting aside the final winding -up order. The
Commission contended that if this Court was disposed to setting aside the final
winding -up order, it should substitute the order of the high court with a
provisional winding -up order. It is through the prism of the test which is to be
applied at the grant of a provisional order that I then consider what relief, if any ,
the Commission had established it was entitled to.

37

Should Selective have been wound up provisionally by the high court as
insolvent?
[84] The test whether a provisional order should be granted is different to that
when a final order is sought. The grant of a provisional order has the result, inter
alia, of securing the assets of the company in the interest of creditors and
shareholders without delay and to avoid a possible dissipation of assets.
Provisional orders are generally granted on the affidavits. Disputes of fact, unless
inconsistent with the pr obabilities, are generally not referred to oral evidence at
the provisional stage.

[85] An applicant for a provisional winding -up order needs to establish a prima
facie case.58 As to what is meant by a prima facie case at the stage of a provisional
order in an opposed sequestration,59 has been accepted as also definitive of the
approach in provisional winding -up applications, Trollip J in the Provincial
Building Society60 said that:
‘My reasons for expressing that view are that, firstly, the whole procedure at this initial stage
is designed to afford the creditor a simple and speedy remedy for preserving the debtor's estate
and enforcing his claim; . . . and if the facility of viva voce evidence was generally to be
accorded to the debtor at this stage, it might well prolong the proceedings unduly and thus
stultify the whole object of the procedure. Secondly, the Act contemplates . . . that at this stage
the matter should ordinarily be disposed of on the petition and affidavits (cf too Daitsch and
Another v Osrin and Another , 1950 (2) SA 343 (C) at p 346). Thirdly, generally the hearing of
oral evidence at an interlocutory or interim stage of any proceedings is inappropriate because
it might involve giving findings on credibility and otherwise prejudging issues which properly
belong to the Co urt of final instance ( Zondo v Union & National & General Assurance Co of
SA Ltd , 1954 (3) SA 541 (W)).
I am not unmindful in arriving at the above conclusions that the granting of a provisional order
can have serious consequences to the debtor, but that consideration is offset by the fact that the

58 Kalil v Decotex (Pty) Ltd and Another 1988 (1) SA 943 (A); [1988] 2 All SA 159 (A) para 59.
59 Provincial Building Society of South Africa v Du Bois 1966 (3) SA 76 (W) ( Provincial Building Society) ;
Prudential Shippers SA Ltd v Tempest Clothing Co Ltd and Others 1976 (2) SA 856 (W) at 867
A-C; Erasmus v Pentamed Investments (Pty) Ltd 1982 (1) SA 178 (W); Wackrill v Sandton International
Removals (Pty) Ltd and Others 1984 (1) SA 282 (W) at 285G.
60 Provincial Building Society fn 44 above at 80B -F.
38

Court must first be satisfied that a prima facie case has been made out; that even then it has a
discretion to grant or refuse an order: and that in any event in exceptional circumstances it can
hear viva voce evidence on any relevant aspect of the matter.’

[86] There are differences between the liquidation of a company and the
sequestration of a debtor’s estate: a winding -up may be obtained on grounds other
than the insolvency of the company; and the 1973 Act and the Act do not contain
wording similar to s 10 of the Insolvency Act 24 of 1936 , which requires merely
a prima facie case when a provisional order is sought. However, similar
approaches are adopted when provisional orders are sought. A court always has
the inherent power to order its own procedures,61 having regard generally, to the
fair and expeditious administration of justice.

[87] In Kalil v Decotex ,62 this Court indicated that in applications for a
provisional order of winding -up, the term ‘ prima facie case’ should continue to
be used, as it has been used for some years in this context, provided that it is
understood as denoting a balance of probabilities on all the affidavits. If on the
affidavits there is a prima facie case in favour of the applicant seeking the
provisional winding -up, then a provisional order of winding -up should normally
be granted. There is no lasting injustice to the respondent, if there is one at all
because, on the return day, it will be given the opportunity to disput e, and in a
proper case even to present oral evidence on disputed issues.63

[88] Section 79(3) requires that it had to be determined whether Selective was
insolvent or that it ‘may be insolvent’. These words must be accorded their
ordinary meaning in the context of the Act and having regard to its purpose.64 The

61 Universal City Studios Inc and Others v Network Video (Pty) Ltd 1986 (2) SA 734 (A) at 754G -H.
62 Fn 44 above.
63 Standard Bank of South Africa Ltd v R-Bay Logistics CC R -Bay Logistics CC [2012] ZAKZDHC 69; [2013] 1
All SA 364 (KZD); 2013 (2) SA 295 (KZD) para 11.
64 Capitec Bank Holdings Limited and Another v Coral Lagoon Investments 194 (Pty) Ltd and Others [2021]
ZASCA 99; [2021] 3 All SA 647 (SCA); 2022 (1) SA 100 (SCA) para 25.
39

question to be answered is whether on the relevant material facts, the
probabilities, on a preponderance, favoured the conclusion that Selective was or
may be insolvent and should be wound up provisionally.

[89] The factual basis on which the winding -up application fell to be decided
was on the allegations contained in the founding affidavit and the answering
affidavit.65 At a minimum, commercial insolvency was required to be established.
Commercial insolvency enquires into whether a company’s liquid asset is
available to meet ongoing and expected obligations in the immediate future.66

[90] The question whether the Commission had established its case clearly
favoured to be answered in favour of the Commission: Selective had suffered a
significant financial loss; it had committed and was still committing various
irregularities which had been reported by regulatory bod ies, which the
Commission had found to exist67 and which, notwithstanding demand, had not
been remedied; it is a public company soliciting investments from the public but
its securities register remained deficient; it had failed for several years to obtain
subscriptions to new shares and did not recei ve investments after publishing
prospectuses; according to the annual financial statements for the period ending
30 June 2018 Selective was, if not de facto insolvent, then at least commercially
insolvent; it was cash strapped, lacked liquidity and had to sell assets to pay
ongoing expenses. It was selling down its equity holdings to pay creditors, lost

65 The second judgment refers to what is said to have a huge bearing on the outcome reached by the high court,
namely a reliance by it that ‘[d]espite claiming in the supplementary affidavit that all audited financial statements
had been filed and uploaded o n case lines no such documents are before court. The only audited financial
statements before court are those for the 2018 financial year’. No adverse credibility finding was made based on
this statement. It simply confirms what was the true evidentiary material before the court, namely that contained
in the affidavits. Even if financial statements had been uploaded on to case lines, they would, in the absence of
some agreement as to their evidentiary status, have had no evidentiary value what soever. The supplementary
affidavit has not been considered in preparing this judgment at all.
66 Murray and Other NNO v African Global Holdings (Pty) Ltd and Others [2019] ZASCA 152; [2020] 1 All SA
64 (SCA); 2020 (2) SA 93 (SCA) para 31.
67 Where a finding is made and reported by a regulator charged with the administration of certain provisions that
it is expedient in the public interest that a company should be wound up, the fact that the regulator has reached
such a conclusion is certain a factor, without it being decisive, that ought to be given weight by the court. Compare
Re Luben, Rosen and Associates Ltd [1975] 1 WLR. 122; [1975] 1 All ER 577 (Ch) at 582.
40

significant capital over the years, failed to produce annual financial statements
for many years, had a negative cash flow and conducted itself in a manner in
serial default of what the Act requires, thereby giving rise to the conclusion that
it may be insolvent. This, having regard to the test which applies at the stage of
the grant of a provisional order, was sufficient to trigger the application of the
provisions of item 9 of Schedule 5 of the Act, as contemplated in s 79(3).

[91] The jurisdictional facts in s 79(3) were satisfied. Section 79(3) was not
created because the legislature sought to provide, as the second judgment
suggests, for the ‘instances where a Commission or shareholder brings an
application for the winding -up of a solvent company in terms of ss 8(1) (f) and
whilst that application is pending, a creditor who has established that the company
is unable to pay its debts (for having failed to meet the s 345 demand) brings an
application based on the insolvent status of t he company. The separate second
application brought by a creditor in those circumstances will be an application in
its own right, to be pursued and dealt with separately by the applicant creditor, as
dominus litis in that application. Indeed, there would be no need for a s 79(3), or
any provision like it in that situation.

[92] Section 79(3) specifically finds application where an application had relied
on the company being solvent. In this instance the Commission did not ‘change
it stance’ and it has certainly not conflate d the grounds for winding -up. It is also
not a case of affording the Commission a ‘second bite at the cherry by changing
the grounds for winding -up from solvent to insolvent without much effort’. It is
the very effect of the ordinary plain meaning of the wo rds employed by the
legislature in s 79(3). That is the purpose of s 79(3). That is the context in which
its clear meaning must be given effect to .

[93] As to whether it was just and equitable that Selective be wound up
provisionally, it was at least commercially insolvent, or it appeared (that is all that
41

is required) that it may be commercially insolvent; it had failed to comply with
some of the most basic statutory formalities; it supposedly sought to improve the
financial position of persons who most require or would benefit from economic
empowerment, ye t it jettisons its most basic accountability responsibilities;
despite being required to show cause that it was not trading under insolvent
circumstances or recklessly, it not only failed to do so, but deliberately elected
not to do so, contrary to the spi rit, purpose and object of the Act, and in what can
only be inferred to be an attempt to defeat the realisation and enjoyment of rights
and the scheme in the Act . It is in the interests of justice that the hand of the law
be laid upon the estate of Selective and that its assets be preserved to ensure an
orderly treatment of all its creditors and all its shareholders whether recorded in
its share register, or not . Selective has not demonstrated in what respects, having
regard to its finances, it was solvent or, at least, commercially solvent.

[94] The only inference to be drawn from Selective’s serial non-compliances
with the provisions of the Act, is that it was trading recklessly and under insolvent
circumstances. There can be no doubt that these considerations require that
Selective should be liquidated to preserve some of the funds for its existing
investors, whoever they all may be . Those are compelling just and equitable
reasons for Selective’s winding -up. Shareholders and their investments must be
protected.

Conclusion
[95] The Commission had established that it was entitled to a provisional
winding -up order in the proceedings before the high court. It is in the interests of
justice that the order of the high court be substituted with a provisional winding -
up order, with the usual attendant directions providing for publication of the order
to interested parties, calling upon them to show cause why a final order should,
or should not, be granted.

42

[96] Public notification is very important. The physical residential locations of
Selective’s shareholders, as a target audience, remain largely uncertain. All we
have been told is that Selective’s shareholders, numbering approximately 26 000,
are black and pre viously disadvantaged investors across all living standard
measure groups. An appropriate form of publication will be in the Sowetan
newspaper circulating in the greater Johannesburg area, to cover the most densely
populated area near Selective’s place of business, and City Press, as a national
newspaper, to cover the rest of the country. This is provided for in the order below .

[97] What impact the order may have on the administration of the estate of
Selective, the status of the liquidators who have been appointed, and what powers
they have, is left to the Master, the liquidators, and any court orders that might be
sought hereafter.

Costs
[98] Although the appeal succeeds partly, it does not result in an order as sought
by Selective. Selective is still in a state of being wound up, save that the order is
now for its provisional winding -up, as opposed to it being under a final winding -
up order. W hether the winding -up order will ultimately be discharged, or whether
a final winding -up order will be granted, can only be determined in due course.
As regards the costs of the respondent, it is appropriate that its costs, including
the costs consequent u pon the employment of two counsel, be paid by Selective
as part of the costs in the administration of Selective in the winding -up.

The order
[99] I would therefore have granted the following order:
1 The appeal is upheld to the extent set out in paragraph 3 below.
2 The respondent’s costs of the appeal, including the costs consequent upon
the employment of two counsel, are directed to be paid by the appellant as part of
the costs of administration in its winding -up.
43

3 The final winding -up order granted by the high court is set aside and
substituted with the following order:
‘(a) The respondent is placed under a provisional winding -up order;
(b) The respondent and all interested parties are called upon to show cause
before this court sitting at Pretoria at 10h00 on 22 July 2025, or as soon thereafter
as the matter may be heard, why a final winding -up order in respect of the
respondent should not be granted;
(c) The applicant is directed to serve a copy of this order on the respondent at
its registered address forthwith;
(d) The applicant is directed to publish a copy of this order in the Government
Gazette, the Sowetan and City Press newspapers on or before 27 June 2025.’



__________________________
P A KOEN
JUDGE OF APPEAL

Norman AJA (Mokgohloa ADP and Mocumie JA concurring ):
[100 ] I have had the pleasure of reading the judgment of my brother Koen JA
(the first judgment). I am grateful to him for the narration of the facts. However,
there are some facts that I wish to record in line with my reasoning. I respectfully
part ways with t he first judgment on the order and the findings upon which it is
based.

[101] In the first judgment it is stated that Selective ‘ presents itself as an
investment company’, however , the Commission in its founding affidavit
described Selective as follows:
‘SEI 1 was established, during or about 2007, to be an investment company for small investors
to invest primarily on the Johannesburg Stock Exchange (“JSE”) and also to take advantage of
Broad - Based Black Economic Empowerment and other investment opportun ities.’
44


[102] It also attached annexure GS1, showing several name changes of Selective.
Annexure GS1 is a company report, from Lexis SA Company, describing the
principal business of Selective as ‘investments’ . It appears from the
documentation attached by the Commission that Selective is indeed an
investment company .

[103] For context, the application that was made by the Commission in terms of
s 81 (1) (f) of the Act, is relevant for the purpose of defining the scope and
standing of the Commission; and in determining whether it should benefit from
the just and equitable standard set out in the Act. That enquiry, in my view, will
have a bearing on the order which I intend to make in the end.

In the high court
[104] The parties agreed that the issues for determination by the high court were:
First, whether the Commission had complied with the provisions of s 81 (1) (f)(i)
and (ii) of the Act and was entitled to a winding -up order. Second, whether the
Commission as a regulator, in terms of s 344 (h) of the 1973 Act read together
with the Act, was entitled to an order under the rubric of just and equitable, in
winding -up Selective.

[105] Selective had raised certain points in limine , such as that the Commission
lacks standing to bring winding -up proceedings under the rubric of just and
equitable; lis alibi pendens , because the Commission had brought an application
seeking to have some directors of Selective declared as delinquent directors; and
that certain documents relied upon by the Commission constituted hearsay
evidence, as they have not been supported by affi davits. All the points in limine
were dismissed. Selective also applied for leave to file a further or supplementary
affidavit and that application was also dismissed.

45

[106] The high court made the following findings: The Commission is an
interested person as contemplated in s 79, read with item 9 of schedule 5 of the
Act, and that those provisions bestow authority on the Commission to launch the
winding -up proceedings. A rel iance on s 344( h) is not only limited to creditors of
a company, nor does the company need to be insolvent. The Commission is not
an entity listed in s 346 that would entitle it to launch the proceedings. The
requirements in s 81(1) (f) are technical a nd not substantial. Those requirements
have not been met and for that reason Selective cannot be liquidated based on the
provisions of s 81(1) (f). In terms of s 262 of the 1973 Act, the Commissioner
could apply to court for the liquidation of the company where it is just and
equitable to do so.

[107] The high court also found that Selective was insolvent. It based this finding
mainly on the audited financial statements for the 2018 financial year, which
according to the high court, revealed that Selective made an operating loss of
more than R11 million ; it used the capital raised through the sale of its shares to
purchase shares; it deals with public money and making a loss of this nature must
of necessity mean that its liabilities exceed its assets; its assets are the shares in
other companies and on t he face of it , it seems clear that Selective is insolvent.

[108] It also relied on the 2011 report issued by the Financial Services Board
which reported that Selective had made a loss of 34% and that, according to the
high court, became clear that Selective was conducting business in insolvent
circumstances; it will be in the interests of the shareholders and would be just and
equitable to wind up Selective; the court is obliged to develop the common law
in terms of s 158 of the Act; and because the matter was argued fully there was
no need to grant a provisional o rder, but a final winding -up order.

In this Court
46

[109] Selective submitted that when the high court made the finding that the
requirements set out in s 81(1)( f)(i) and (ii) of the Act were not met, that ought to
have been the end of the matter. The high court, by winding -up Selective based
on the finding that it was insolvent, in circumstances where the Commission had
accepted that Selective was solvent, erred. That finding was contrary to the
pleaded case that Selective was called to meet and thus constituted a material
misdirection. As a result of the f indings of the high court, not based on the pleaded
case, Selective contends that it could not have pleaded facts dealing with the case
based on insolvency because that was not a case it was called upon to meet.

[110] Selectiv e submitted further, that the high court erred in relying on s 344 ( h)
of the 1973 Act because it (Selective) was solvent. It contended that the
Commission had no standing to liquidate Selective based on the just and equitable
standard. To do so is not in the public interest because Selective does not use
public purse fundi ng. It contended that it was solvent and there has been no
misappropriation of funds. It further submitted that granting a winding -up order
will do more harm to investee companies of Selective, its stakeholders and their
families. It contended that the Com mission was using liquidation proceedings to
enforce compliance with its statutory mandate. The liquidation of a company on
the basis that it is just and equitable can only happen if the company is insolvent
as envisaged in s 79 of the Act.

[111] The Commission conceded that the requirements of s 81(1)( f) of the Act
were not fulfilled and thus the high court was correct in refusing to wind up
Selective on that basis. The Commission relied on the same contraventions upon
which the winding -up application was based, in terms of s 81(1)( f), for the support
of a winding -up order of Selective under the just and equitable standard. It
reiterated its stance, that there were persistent contraventions of ss 22(1); 30(1)
(failure to prepare financial statements for the years 2014, 2015, 2016 and 2017);
24(4) and 50(1)( b) (failure to maintain a securities register); 61(7) (convening of
47

shareholders meeting); 72(4) ( no social or ethics committee); 73(6) (no minutes
of the audit and social committees); 86(4)(filling of a company secretary’s
vacancy); 94(6) (failure to fill vacancies on the audit committee); 108(6) (failure
to raise capita l in terms of its prospectus) and 214(1) (d) (making false statements,
reckless conduct and failure to provide an alternative trading platform) of the Act.
That Selective failed to prepare its financial statements for the 2014 and 2015
years and was accordi ngly not able to apply the objective requirement that the
company will satisfy the solvency and liquidity test.

[112] The Commission further submitted that the shareholders were not
receiving dividends, and, in this regard, reliance was placed by the Commission
on the 2017/2018 annual report. This report, contends the Commission, shows
that Selective is not able to meet its day -to-day liabilities in the ordinary course
of its business. Section 79(3) does not, by implication, contemplate a separate
application by another person. The dysfunction of Selective can only be cured by
a winding -up order and the liquidator to unravel the disorder. The Commission
prayed for the dismissal of the appeal, with costs consequent upon the
employment of two counsel.

Discussion
[113] As a starting point, I deal with a point that may appear to be trivial, yet it
bears heavily on the outcome reached by the high court. Although the high court
had dismissed the application for the admission of a further or supplementary
affidavit, upon an application by Selective, it nevertheless had regard to it in its
judgment. It stated at paragraphs 101 and 102:
‘It is however also clear that the respondent is insolvent. Despite claiming in the supplementary
affidavit that all audited statements had been filed and uploaded on caselines no such
documents are before court.
The only audited financial statements before court are those for the 2018 financial year. In those
statements it is clear that the respondent made an operating loss of more than R11 million.
48

Respondent used the capital raised through the sale of its shares to purchase shares. It deals
with public money and making a loss of this nature clearly must of necessity mean that its
liabilities exceed its assets. Its assets are the shares in other comp anies. Apart from the day-to-
day expenses such as rent and salaries, the liability to its own shareholders still remain.’

[114] There is a fundamental difficulty with the approach adopted by the high
court in this regard. It dismissed the application to receive a further or
supplementary affidavit from Selective. However, as indicated in paragraph 101,
it considered the contents o f the supplementary affidavit, selectively, in its
judgment, in a manner that was prejudicial to Selective. If the supplementary
affidavit had been admitted into evidence, the high court would have raised the
issue of the uploading of the audited fina ncial statements on case lines, with
Selective, instead of raising it in the judgment. In any event, after dismissing the
application for the admission of the further or supplementary affidavit, the high
court, in my view, was barred from considering that affidavit in its judgment, as
it was functus officio in relation to that aspect.68

[115] In Mncwabe v President of the Republic of South Africa and Others;
Mathenjwa v President of the Republic and Others ,69 the Constitutional Court
found that ‘this doctrine entails that once something is done, it cannot be undone,
reversed or otherwise altered by the decision -maker. This is because the decision
maker would have exhausted her authority and relinquished her ju risdiction over
the matter by taking a final decision. The finality of the decision is central to the
doctrine’s operation. The doctrine promotes certainty and stability, and it
ameliorates prejudice and injustice occasioned to those who would rely on

68 Mncwabe v President of the Republic of South Africa and Others; Mathenjwa v President of the Republic of
South Africa and Others [2023] (11) BCLR 1342 (CC); 2024 (1) SACR 447 (CC) (Mncwabe ) para 42. See also
Hulisani Viccel Sithangu v Capricon District Municipality (593/2022) [2023] ZASCA 151 (14 November 2023)
para 18 where this Court applied the functus officio principle and stated inter alia ‘[t]his Court held that it was not
open for the high court to revisit the point it had dismissed earlier, as in relation thereto, it had become functus
officio and that its second order undermined the principle of finality of litigation’. Quoting Thobejane and Others
v Premier of the Limpopo Province and Another [2020] ZASCA 176 para 6.
69 Ibid Mncwabe para 42
49

otherwise wavering decisions’.70 It follows that , in reaching its findings, the high
court revisited the further or supplementary affidavit that it had dismissed, and by
so doing , it erred.

Facts that were ignored by the high court
[116] It is common ground that Selective had received various compliance
notices from the Commission for failure to comply with its statutory obligations
in terms of the Act. Those notices were issued over the years. Selective complied
with some and did not comp ly timeously with others and had conveyed the
difficulties that it was experiencing in complying timeously with the notices to
the Commission. A thorough scrutiny of the notices and correspondence reveals
that Selective did not remain supine when it was se rved with notices. In some
instances, it had asked for support and guidance from the Commission. However,
the Commission did not indicate its ability to provide such guidance or support,
despite it being part of its responsibilities.

[117] The Commission relies, as one of the grounds for winding -up Selective, on
the approximate 34% loss of the invested monies that was incurred by Selective
at some point. That loss is based on a report that was issued by the Financial
Services Board on 28 February 2010. Selective admitted this loss and explained
that an investor may incur such a loss without blame on the part of the directors.
It is an important fact that the loss occurred approximately ten years before the
institution of the winding -up proceedings and 13 years prior to the issuing of the
final winding -up order by the high court. The fact that a company has made losses
ten years ago does not automatically mean that a company is insolvent.


70 Ibid.
50

[118] Selective had attached, to its answering affidavit, an Abridged Certificate
for Annual Returns issued by the Commission on Wednesday, 9 September 2020,
which recorded:
‘CIPC received an annual return filing for SELECTIVE EMPOWERMENT INVESTMENT 1
with enterprise number 2007/033697/06 for the following annual return year (s): 2013 . . . 2014
. . . 2015 . . . 2016 . . . 2017 . . . 2018 . . . [and] . . . 2019.’
It bears the name of Adv. Rory V oller: Commissioner CIPC.

[119] This certificate and its authenticity has not been placed in issue by the
Commission in the replying affidavit. As such, it must be accepted as correct and
any allegations that at the time that the matter was heard by the high court there
were outstanding returns must be rejected.

[120] Selective attached to its answering affidavit a certification by the company
secretary to the effect that:
‘In terms of Section 88(2) (e) of the Companies Act 71 of 2008, as amended, I certify that the
company has lodged with the Commissioner all such returns as are required of a public
company in terms of the Act and that all such returns are true, correct and up to date’.
It must accordingly be accepted that both certificates from the Commission and
the one from South African Revenue Service (SARS) were accepted by the
Commission, otherwise the Commission would have challenged them.

[121] On or about 29 January 2020, the legal representatives of Selective wrote
to the Commission and referred to a meeting that was held between the parties on
8 August 2019. They recorded that the share register had been updated and
attached it as ‘Annexure A ’ to the letter. They also indicated that Selective had
entered into a Service Level Agreement with Singular Systems on 19 November
2019 and mentioned the services that Singular Systems was providing. A status
report from Singular Systems was also attached. They further indicated that it was
not in the interests of the company to be liquidated. The Commission chose not
51

to deal with these facts in its replying affidavit. It follows that they ought to be
accepted in favour of Selective in line with the principle enunciated in Plascon -
Evans Paints Ltd v Van Riebeek Paint (Pty) Ltd .71

[122] Similarly, a certificate issued by SARS reflecting the ‘tax compliance
status’ of Selective, dated 11 September 2020, as being compliant was not
considered by the high court. Selective attached the certificate from SARS to its
answering affidavit. Nothing was said by the Commission about it, in fact the
replying affidavit makes no reference to the relevant paragraph attaching the
SARS document at all. In the first judgment it is suggested that, that certificate
‘purports ’ to be a SARS certificate. There are no allegations made by the
Commission t o support that finding. That certificate too, must be accepted as
evidence in support of Selective’s version.

[123] Selective stated that it was functioning under the hand of a new board. The
independent auditors’ report, Mkiva Incorporated, dated 30 October 2018 stated
that ‘the annual financial statements [were] prepared [in respect of Selective as a
going concern] in accordance with all applicable International Financial
Reporting Standards (IFRS), which includes all applicable IFRSs, International
Accounting St andards (IASs) and Interpretations issued by the IFRS
Interpretations Committee and the requirements o f the . . . Act’. They further
recorded that on a going concern basis, they presumed that funds will be available
to finance future operations and that the realisation of assets and settlement of
liabilities, contingent obligations and commitments will occ ur in the ordinary
course of business. The auditors reflected on the errors that were on the share
register. They further stated that a data analytics firm was appointed, and the
errors were corrected. Those errors were recorded on the financial statements .

71 Refer to Plascon Evans Paints Ltd v Van Riebeek Paints (Pty) Ltd 1984 (3) SA 623 (A), which clarifies the rule
in Stellenbosch Farmers’ Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C).
52

They confirmed that where there were lapses in compliance, Selective had
rectified those.

[124] An investigation report, dated 19 September 2017, filed by the deponent to
the founding affidavit, Mr Gideon Johan Schutte (Mr Schutte), on behalf of the
Commission, confirms the version of Selective that it had complied with the
notices, although it accep ted that compliance was not timeous. For example,
Mr Schutte, in his report, listed numerically the requests made to Selective in the
20 January 2017 compliance notice. Those are:
‘1. To submit to the Commission copies of the Annual Financial Statements for the 2014 and
2015 financial years signed by the registered auditor. Copies of the Annual Financial
Statements must also be approved and signed by the directors of the relevant co rporate entity.
2. Provide reasons to the Commission why the annual financial statements of 28 February 2012
were not timeously prepared by the directors of the company.
3. To submit to the Commission the minutes of the annual general meeting called as per section
61 (7) of the . . . Act . . .
4. To submit to the Commission a copy of a securities register.’

[125] He stated in his report in relation to the above listed requests:
‘The Selective Empowerment Investment 1 Limited complied with requests 1, 2 and 3 . The
Companies Tribunal made an order that the Annual General Meeting should be convened
within six weeks after case 10067/2015 was finalised by the Gauteng Division of the High
Court of South Africa.’ (My emphasis.)

[126] Strangely, although Mr Schutte recorded that there was compliance with
three out of four requests, in the recommendations, he recorded that there must
be submission of the annual financial statements for the 2016 and 2017 financial
years; Selective must p rovide reasons why the financial statements were not
timeously provided and why annual general meetings were not held timeously; to
provide proof that the securities register has been maintained according to
prescribed standards; and provide a report on how the non -compliance identified
during the audit will be remedied to avoid a repeat of the non -compliance .
53

[127] I mention this example because Mr Schutte accepted that there was
compliance with the demand for the 2014 and 2015 financial years. Instead of
issuing a separate notice demanding compliance with the 2016 and 2017 financial
years, he included such demand i n his response to the 20 January 2017
compliance notice. Again, although Mr Schutte had made reference to the
decision of the Tribunal, he continued to demand an explanation on why annual
general meetings were not timeously held. This is just one of t he examples that
show some inconsistencies in the notices and the conduct of the Commission.

[128] All these facts and the documentation referred to in the preceding
paragraphs, considered objectively, do not support the finding in the first
judgment that Selective, inter alia , ‘failed to provide proof of proper compliance’.
The documents referred to, above, demonstrate that even if there were delays in
complying with the notices, by the time the high court heard the application there
were documents that were placed before it t o prove compliance with the
Commission’s notices. Most importantly, the financial statements for the
2017/2018 do not evince any concerns such as that the substratum of the company
has changed or that it may be insolvent.

Was there adequate notice to Selective that it was being wound up based on
insolvent status?
[129] Selective contended that the case it was called upon to meet was based on
it being solvent and not insolvent. It contended that for that reason it was not
heard on the allegations of insolvency. In the first judgment, it is found that
Selective was given notice of the winding -up of the company based on the just
and equitable standard .

[130] In the correspondence exchanged between the parties about the winding -
up of Selective, there is no mention of the just and equitable standard. The
Commission made it clear that it would seek the winding -up of Selective based
54

on s 81(1) (f) of the Act. This meant that the winding -up of Selective would be
based on its solvent status. On 6 March 2020, the Commission in a letter to the
legal representatives of Selective persisted in its stance that there was no
compliance with the notice and indicated, inter alia , that:
‘. . . .
4. CIPC therefor continue with case no 6275/2018 and will file an application to wind up the
company in terms of section 81(1) (f) of the Companies Act 71 of 2008.
. . . .’

[131] Section 346 of the 1973 Act deals with the procedure that must be followed
when there is an application to wind up a company (legal requirements). These
include a certificate that accompanies the application from the Master, issued not
more than ten days before t he date of the application, to the effect that sufficient
security has been given for the payment of all fees and charges necessary for the
prosecution of all winding -up proceedings. Before that application is presented
to the court, a copy of the applicat ion and of every affidavit confirming the facts
stated therein shall be lodged, for example, with the Master of the High Court
(the Master), served on a registered trade union for employees; and on SARS.
Before the hearing, the applicant is required to fil e an affidavit which sets out the
manner in which service of the application as aforementioned was effected. Most
importantly, the affidavit must set out facts upon which it relies for its allegations
that a company is insolvent because it is unable to pay its debts when they become
due and payable .

[132] I mention these processes because none of them have been adhered to in
this matter. The process that I have outlined above is elaborate because the
purpose thereof is to ensure that the company to be wound up is given sufficient
notice and is afforded an opportunity to deal with the facts of the alleged insolvent
status, adequately. The Master is also afforded an opportunity to satisfy himself
or herself that on the facts it appears to him or her that the company may be
55

insolvent. These processes are critical because when a company is being wound
up on the basis that it is commercially insolvent, it, as a respondent, in resisting
the relief sought, bears the onus to prove that it is solvent .

[133] It is for that reason that facts relating to its debts, assets and/or liabilities
must be apparent from the founding affidavit. That is the adequate notice that is
required when a drastic order with serious implications, not only for Selective but
its other companies, such as the winding -up, is sought. Adequate notice is an
essential element of procedural fairness in legal proceedi ngs. It ensures that a
party is given sufficient information and time to prepare their case and respond
to the issues at hand.

[134] There is no evidence at all that has been adduced by the Commission to
support its general sweeping statement that the company may be insolvent.
Selective has about 26 000 investors and holds on behalf of the shareholders,
shares to the value of R110 420 785.26 before the high court or before this Court .
Their rights have not been considered nor mentioned at all prior to the order being
made because none of the s 346 requirements were met .

[135] The Commission relied, for example, on presentations made by Mr Maja
on 4 July 2017, where he was providing information about the status of the
Selective companies and not just Selective in this case. He sought help and
support to ensure that shareholders and their monies are protected; to assist in
obtaining legal opinion and advice on day to day running of the Selective
companies; and to put the companies under curatorship, if deemed necessary. The
Commission relied on what Mr Maja said about curato rship in justifying its
winding -up application. Mr Maja admitted the allegations, but stated that the
presentation that he made had since been overtaken by events including the
appointment of the current board of directors. He sought assistance from the
Commission as a regulator. He denied that he sought the placement of Selective
56

under curatorship in the legal sense. The application for the winding -up of
Selective was brought some three years after the presentation by Mr Maja. This
is the context in which Mr Maja made the statements the Commission now relies
upon for the liquidatio n of Selective, which the high court ignored totally.

[136] The investors have an interest in the monies invested in the company. They
have a right to bring winding -up applications against Selective if they are not
satisfied with the manner in which the company is being run. The Legislature,
when promulgating the Act, was alive to the fact that th e rights of the shareholders
(investors in this case) or directors must be taken into account. Absent adequate
facts based on the inability of a company to pay its debts, as envisaged in s 345
of the 1973 Act, Selecti ve is justified in its complaint that there was no adequate
notice that it would be wound up on the allegations of insolvency.

Is Selective insolvent?
[137] According to Meskin, ‘[t]he test when a company is to be declared
insolvent, is whether the company in winding -up can pay its debts. It requires a
weighing up of assets and liabilities, and not merely a determination of whether
it is commercially solvent ’.72 For instance if one has regard to the very annual
report of 2018 relied upon by the Commission and the high court, the auditors
recorded that the company’s net asset value was about R145 million. The audit
committee recorded that the company complies in a ll material respects with the
requirements of the Act.

[138] The objectives and functions of the Commission are set out in ss 186(1)
and 187(1) to (4), respectively, and have been quoted extensively in the first
judgment. The Act itself provides for its purpose in s 7 as follows : ‘[T]o: promote
compliance with the Bill of Rights as provided for in the Constitution in the

72 P M Meskin Henochsberg on the Companies Act Vol 1 SI 26 (2008) at 670( 2).
57

application of company laws’ (s 7( a)); ‘balance the rights and obligations of
shareholders and directors within companies’ (s 7( i)), ‘encourage the efficient
and responsible management of companies’ (s 7( j)); ‘provide for the efficient
rescue and recovery of financially distressed companies, in a manner that
balances the rights and interests of all relevant stakeholders’ (s 7(k)). This means
that when the objectives and functions of the Commission are consi dered in
relation to companies, including Selective, they must be viewed with the
constitutional lens provided for in s 7.

[139] A reliable determinant of factual or commercial insolvency is a company’s
inability to pay its debts when they become due and payable or where it has more
liabilities than assets on its balance sheet. That is the reason that s 345 of the 1973
Act is utilis ed as a safeguard to avoid liquidating a company without evidence to
prove, even at a prima facie level, that it may be insolvent.73

[140] Section 345 reads:
‘(1) A company or body corporate shall be deemed to be unable to pay its debts if -
(a) a creditor, by cession or otherwise, to whom the company is indebted in a sum
not less than one hundred rand then due -
(i) has served on the company, by leaving the same at its registered office,
a demand requiring the company to pay the sum so due; or
(ii) in the case of anybody corporate not incorporated under this Act, has
served such demand by leaving it at its main office or delivering it to the
secretary or some director, manager or principal officer of such body corporate
or in such other manner as the Court may direct, and the company or body
corporate has for three weeks thereafter neglected to pay the sum, or to secure
or compound for it to the reasonable satisfaction of the creditor; or

73 See Kalil v Decotex (Pty) Ltd and Another 1988 (1) SA 943 (A) 979 at 979B where the court observed that
‘prima facie case ’ entails that the balance of probabilities on all affidavits favour the making of provisional
sequestration or liquidation order. See also Afgri Operations Limited v Hamba Fleet (Pty) Limited [2017] ZASCA
24; 2022 (1) SA 91 (SCA) para 9; Valerio Engineering CC v Designatech (Pty) Ltd para 18. See further E
Bertelsmann et al Mars : The Law of Insolvency 10 ed (2019) at 125.

58

(b) any process issued on a judgment, decree or order of any court in favour of a
creditor of the company is returned by the sheriff or the messenger with an endorsement
that he has not found sufficient disposable property to satisfy the judgment, decree or
order or that any disposable property found did not upon sale satisfy such process; or
(c) it is proved to the satisfaction of the Court that the company is unable to pay its
debts.
(2) In determining for the purpose of subsection (1) whether a company is unable to pay its
debts, the Court shall also take into account the contingent and prospective liabilities of the
company.’ (Emphasis added.)

[141] In this matter there is no question of creditors being involved and therefore
one can accept that the provisions of s 345 have not been invoked. There is no
creditor to whom the company was indebted that has served on it a demand
requiring it to pay the amou nt due. There are no allegations that for three weeks
the company had neglected to pay the sum demanded and there are also no
allegations that the sheriff had returned what is known as the nulla bona return .

[142] Insolvency of a company may not be inferred, unless such inference is
drawn from positive facts relating to the company’s insolvent status due to,
amongst others, the company’s non - compliance with a s 345 demand.
Section 344 deals with instances where a company may be wound up by the court.
It is telling that where a company is deemed to be unable to pay its debts, s 344 (f)
links s 345 to the inability to pay its debts by stating ‘ as described in [s] 345 ’ of
the 1973 Act.

[143] This Court, in Lancelot Stellenbosch Mountain Retreat (Pty) Ltd v Gore
NO and Others ,74 stated that ‘[a]ffidavits in motion proceedings serve to define
not only the issues between the parties, but also to place the essential evidence

74 Lancelot Stellenbosch Mountain Retreat (Pty) Ltd v Gore NO and Others [2015] ZASCA 37 ; [2015] JOL 33031
(SCA) .
59

before the court. They must contain factual averments that are sufficient to
support the relief sought .’75

[144] In the first judgment, reliance is placed on Boschpoort Onderneming (Pty)
Ltd v Absa Bank Ltd (Boschpoort) ,76 which deals with forms of insolvency, being
factual and commercial insolvency. Of importance is that both forms of
insolvency have a bearing on the company’s liabilities and assets. Factual
insolvency occurs where a company’s liabilities exceed its assets, while
commercial insolvency occurs when the company is in such a state of illiquidity
that it is unable to pay its debts even though its assets may exceed its liabilities.
Tritely, there must be facts to support either form of insolvency.

[145] For instance in Boschpoort , the brief factual matrix relating to the
company’s assets and liabilities was that it had been in arrears in respect of its
obligations to pay the bank more than R29 million, it had trade creditors to whom
it was indebted in excess of R11 million, it owe d the First Rand Bank Ltd
approximately R 9 million and owed SARS an amount of about R2 million. It had
been served with a demand in terms of s 345 of the 1973 Act and was in default
in respect thereof. These facts set the Boschpoort decision apart from th e facts of
the case at hand. I say so for the following reasons.

[146] First, in Boschpoort there was a s 345 demand which was not met within
the three weeks, with payment or security to the reasonable satisfaction of the
creditor. The court was therefore furnished with facts which demonstrated that
the company was not able to pay its debts. Second, Part G of chapter 2 of the Act
excludes the a pplication of ss 343, 344, 346 and 348 to 353 of the 1973 Act, where
an application relates to the winding -up of a solvent company.

75 Ibid para 13.
76 Boschpoort Onderneming (Pty) Ltd v Absa Bank Ltd [2013] ZASCA 173 ; [2014] 1 All SA 507 (SCA); 2014 (2)
SA 518 (SCA) .
60

[147] Accordingly, absent the facts relating to the assets of Selective, what its
liabilities are and what are the debts that it has been unable to pay, the winding -
up order was not justified. The Commission sought a final winding -up order and
‘had to establish [its] case on a balance of probabilities rather than on the lower
level of prima facie basis, which is the degree of proof required for a provisional
order’.77 On the facts, it failed to satisfy the onus which it attracted. The high
court should have exercised its discretion in favour of Selective and refused the
relief sought by the Commission.

Does the Commission have standing to bring winding -up proceedings based
on the just and equitable standard ?
[148] Selective raised as a point in limine , squarely and unambiguously, that the
Commission has no standing to seek an order to wind it up based on the rubric of
just and equitable. As aforementioned the high court dismissed the point in limine .

[149] The persons who may bring winding -up proceedings against a company
are provided for in s 344 of the 1973 Act,78 for example, instances where a
company resolves that it be wound up, if it is a public company its members have
been reduced to below seven, or 75% percent of its share capital is lost. Section
344(f) makes reference to the provisions of s 345 of the 1973 Act.


77 Cuninghame and Another v First Ready Development 249 [2009] ZASCA 120; [2010] 1 All SA 473 (SCA );
2010 (5) SA 325 (SCA) para 1.
78 ‘A company may be wound up by the Court if –
(a) the company has by special resolution resolved that it be wound up by the Court;
(b) the company commenced business before the Registrar certified that it was entitled to commence business;
(c) the company has not commenced its business within a year from its incorporation, or has suspended it
business for a whole year;
(d) in the case of a public company, the number of members has been reduced below seven;
(e) seventy -five per cent of the issued share capital of the company has been lost or has become useless for the
business of the company;
(f) the company is unable to pay its debts as described in section 345;
(g) in the case of an external company, that company is dissolved in the country in which it has been incorporated,
or has ceased to carry on business or is carrying on business only for the purpose of winding up its affairs;
(h) it appears to the Court that it is just and equitable that the company should be wound up.’
61

[150] In dealing with this question, one must resort to the provisions of s 81 of
the Act. I refer to it solely for interpretation purposes. The relevant parts of s 81
read as follows :
‘(1) A court may order a solvent company to be wound up if –
. . . .
(c) one or more of the company’s creditors have applied to the court for an order to
wind up the company on the grounds that –
(i) the company’s business rescue proceedings have ended in the manner
contemplated in section 132(2) (b) or (c)(i) and it appears to the court
that it is just and equitable in the circumstances for the company to be
wound up; or
(ii) it is otherwise just and equitable for the company to be wound up;
(d) the company, one or more directors or one or more shareholders have applied
to the court for an order to wind up the company on the grounds that –
(i) the directors are deadlocked in the management of the company, and the
shareholders are unable to break the deadlock, and –
(aa) irreparable injury to the company is resulting, or may result,
from the deadlock; or
(bb) the company’s business cannot be conducted to the advantage of
shareholders generally, as a result of the deadlock;
(ii) the shareholders are deadlocked in voting power, and have failed for a
period that includes at least two consecutive annual general meeting
dates, to elect successors to directors whose terms have expired; or
(iii) it is otherwise just and equitable for the company to be wound up;
. . . .
(f) the Commission or Panel has applied to the court for an order to wind up the
company on the grounds that –
(i) the company, its directors or prescribed officers or other persons in
control of the company are acting or have acted in a manner that is
fraudulent or otherwise illegal, the Commission or Panel, as the case
may be, has issued a compliance notice in re spect of that conduct, and
the company has failed to comply with that compliance notice; and
(ii) within the previous five years, enforcement procedures in terms of this
Act or the Close Corporations Act, 1984 (Act No. 69 of 1984), were
62

taken against the company, its directors or prescribed officers, or other
persons in control of the company for substantially the same conduct,
resulting in an administrative fine, or conviction for an offence .
. . . .’ (Emphasis added.)

[151] In answering the question ‘ what is just and equitable ?, in the context of
winding -up of companies where it is just and equitable to do so D A Smallbone79
states:
‘12. In identifying the cause of action, consideration of the statute is not only vital: it is the
starting point. It is a truism that satisfaction of a condition that something be “just and
equitable” must begin with the terms of the power itself. What is it that the statute confers
power to do? What is it that the statute says must be “just and equitable” before that power can
be exercised?
13. From that starting point, one turns to consider the purpose for which the power was
conferred. Sometimes these objects are expressly stated in the statute. When they are not
expressly stated, or not stated exhaustively, “they must be determined by impl ication from the
subject matter, scope and purpose of the Act.’

[152] In Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Others ,80 Ngcobo J, states the following, when dealing with the interpretation of
statutes in a constitutional context:
‘The Constitution is now the supreme law in our country. It is therefore the starting point in
interpreting any legislation. Indeed, every court “must promote the spirit, purport and objects
of the Bill of Rights” when interpreting any legislation . That is the command of section
39(2). Implicit in this command are two propositions: first, the interpretation that is placed
upon a statute must, where possible, be one that would advance at least an identifiable value
enshrined in the Bill of Rights; and second, the statute must be reasonably capable of such
interpretation. This flows from the fact that the Bill of Rights “is a cornerstone of [our
constitutional] democracy.” It “affirms the democratic values of human dignity, equality and

79 D A Smallbone What is Just and Equitable ? Available at https://fjc.net.au/wp -content/uploads/2018/06/David -
Smallbone -What -is-Just-and-Equitable.pdf [Accessed on 30 April 2025].
80 Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism and Others [2004] ZACC 15; 2004
(4) SA 490 (CC); 2004 (7) BCLR 687 (CC).
63

freedom.” In interpreting section 2 (j), therefore, we must promote the values of our
constitutional democracy. But what are these values?’81

[153] This constitutional context approach to interpretation of the provisions of
the Act is mandated by the Act itself. The foundational principle of the Act is,
inter alia , the transformation of the commercial laws. That is the legislative
scheme. The Commission and its existence are anchored on the Act. It cannot act
outside the ambit of that Act. As a Regulatory body, it is a creature of statute.

[154] The Legislature when formulating s 81, consciously placed the ‘ it is
otherwise just and equitable ’ in instances where the applicant in a winding -up of
a solvent company is: the company itself that has adopted a special resolution to
be wound up voluntarily (subsec (1) (a)); or the business rescue practitioner who
brought the application (subsec (1) (b)); or where one or more of the company’s
creditors (subssec (1) (c)) brought the application; and; by one or more directors
or one or more shareholders where th ere is an unbreakable deadlock of either the
directors or the shareholders (subsec 1 (d)).

[155] Where there is provision for the Commission or Panel to apply for the
winding -up of the company, in s 81(1) (f), the Legislature did not insert , the words
‘it is otherwise just and equitable for the company to be wound up ’, as it did in
s 81(1) (c) and (d) as aforementioned. If the words are not included in s 81(1) (f),
there is accordingly no legal basis for the Commission or the high court to include
them.

[156] The Legislature, by so doing, in my view, wanted to avoid the very
mischief that the Commission committed in this case, being: First, the
Commission failed to take the steps that were legally permissible and available
as enforcement procedures provided fo r in s 171(7) (a) and (b) of the Act. For the

81 Ibid para 72.
64

sake of completeness those options are: to apply to court for the imposition of an
administrative fine (subsec 7 (a)); or refer the matter to the National Prosecuting
Authority for prosecution as an offence in terms of s 214(3), and subsec 7 (b). It
may not do both in respect of any particular compliance notice.82 In other words,
it ignored the remedies available to it. The Commission proffered no explanation
for such failure. Second, despite its failure to act in terms of s 171(1) (a) or (b), it
approached the court for a winding -up of Selective as a solvent company in terms
of s 81(1) (f), when it knew that in order for it to succeed it must have first utilised
the remedies available to it. Notwithstanding its non –compliance with the
remedies available to it, it proceeded with the application.

[157] Absent the jurisdictional facts, as correctly found by the high court, the
Commission did not satisfy the requirements of s 81(1) (f). That ought to have
been the end of the matter because the absence of those jurisdictional facts was
fatal to the Commission’s application. Instead of dismissing the application the
high court threw the Commission a lifeline based on the ‘just and equitable’
standard.

[158] The absence of the words ‘ it is otherwise just and equitable for the
company to be wound up ’ in s 81(1) (f), was deliberate. First, the Legislature must
have been alive to the fact that a regulator such as the Commission may bring
winding -up proceedings against a company prior to it (the Commission)
satisfying or completing all the enforcement processes provide d for in the Act,
hence the pre -requisites of an administrative fine or a conviction. Second, the
Legislature, omitted the words in order to kee p the powers of the Commission
under scrutiny and to minimise prejudice to companies that have disputes with
the Commission. It wanted to avoid conflation of non - compliance infractions in
terms of the company laws with factual or commercial insolvency. Un der the ‘just

82 Section 171(7) (a) and (b).
65

and equitable’ standard there is a risk of the Commission using the term that it is
acting in the public interest whilst causing harm to the company .

[159] That, in fact, is what the Commission has done in this case. It has brought
the winding -up proceedings of a solvent company, but in the same proceedings
relied on the insolvency of the company inferred from its non -compliance with
its notices. It advanced no facts that relate to the insolvency or commercial
insolvency of Selective.

[160] The mischief of the Commission is stated in its founding affidavit as thus:
‘. . . .
B. PURPOSE OF THE APPLICATION
7. This is an application for the winding up of SEI 1 in terms of section 81(1) (f) of the
Companies Act, 2008, alternatively, that it will be just and equitable if SEI 1 is wound up;
. . . .
J2. Just and Equitable
80. Notwithstanding that SEI 1 is liable to be wound up in terms of section 81(1) (f) of
Section 108(6) of Act 71 of 2008, it will be just and equitable if SEI 1 is wound up.
81. SEI 1 is carrying on its business recklessly, constantly transgressing the provisions of
Section 108(6) of Act 71 of 2008, which evinces a lack of any genuine concern for the
prosperity of the respondent.
74. (sic) Mr Maja himself was of the opinion, as set out in his presentation that:
74.1. the regulatory bodies should assist SEI 1 to ensure that shareholders and their monies
are protected;
74.2. the regulatory bodies give an opinion on what needs to be done;
74.3. SEI 1 be placed under curatorship, if deemed necessary, under the current
circumstances;
82. The directors, or at least Mr Maja on behalf of SEI 1, questions the viability of SEI 1
and having regard to the continued dispute with Virtus and lack of staff of SEI 1, after taking
over the responsibilities from Virtus, it is doubtful and highly unl ikely that SE1 can achieve its
raison d’être.
83. I submit that it will, furthermore, be just and equitable if SEI 1 is wound up.
. . . .’ (Emphasis added.)
66

[161] The Commission relied on the exact same alleged transgressions by
Selective which were placed before the high court in support of the s 81(1) (f)
application. The limited powers of the Commission in the winding -up of a
company are consistent with its objectives, which are, amongst others, the
promotion of education and awareness of company and intellectual property laws
and related matters; and the promotion of compliance with the Act and any other
applicable legislation and the efficient effective and widest possible enforcement
of the Act.83

[162] In Recycling and Economic Development Initiative of South Africa NPC v
Minister of Environmental Affairs; Kusaga Taka Consulting (Pty) Ltd v Minister
of Environmental Affairs ,84 this Court had to deal with the question whether
s 157(1) (d) of the Act gave the Minister the power to wind up a solvent company
in the public interest, this Court found:
‘Of course, there may be indications in the statute itself that ‘‘person’’ includes the government
as represented by a minister. But there is no such indication in the . . . Act. It is apparent that
when a minister or regulatory agency established by statute exercises a public power or
performs a public function they do so per se in the public interest. When the lawmaker intends
to give a minister the power to bring proceedings specifically in the public interest, it says so. ’85
(Emphasis added.)
These remarks apply equally in this case .

[163] In the first judgment, at paragraphs 56 and 57, it is found that the
Commission had the power to rely on the past infractions to meet a case of ‘just
and equitable’ as envisaged in the Act. I disagree, with respect, for these reasons:
(a) Section 81(1) (f) makes no provision for the Commission to bring a
winding -up of a solvent company based on a ‘just and equitable’ standard.

83 The provisions of s 186 (1) (c) and (d) are set out fully in the first judgment at paragraph 5 fn 3.
84 Recycling and Economic Development Initiative of South Africa NPC v Minister of Environmental Affairs ;
Kusaga Taka Consulting (Pty) Ltd v Minister of Environmental Affairs [2019] ZASCA 1; [2019] 2 All SA 1 (SCA);
2019 (3) SA 251 (SCA) .
85 Ibid para 131 .
67

(b) As a statutory entity, a winding -up application must be based on it (the
Commission) meeting the jurisdictional facts set out in s 81(1) (f)(i) and (ii) of the
Act and nothing else. Section 81(1) (f) was enacted for that purpose .

[164] The injustice that would result if the Commission were to benefit from the
use of the ‘just and equitable’ standard is that the Commission would simply issue
compliance notices, one after the other, and not pursue those up to the stage where
there are adm inistrative fines or convictions imposed. Thereafter, and when it is
convenient to it, bring winding - up proceedings on the grounds that it is ‘just and
equitable’ to do so.

[165] Having regard to the express language employed in s 81(1) (f) of the Act
and the purpose of the provisions relating to the Commission, the Commission
has no standing to bring winding -up proceedings against a company on the ‘just
and equitable’ standard.

Is the Commission an interested party as envisaged in s 79(3)?
[166] In the first judgment, one of the findings at paragraphs 59 and 60 is that the
Legislature in s 79(3) did not envisage a situation where another application must
be brought by a third party for the winding -up of Selective. To do so, it is stated,
would be ludicrous. It was further found that Selective was wound up on the
ground that ‘it would be just and equitable for Selective to be wound up’ on
application by the Commission as an interested person .

[167] Section 79(1) of the Act provides:
‘(1) A solvent company may be dissolved by –
(a) voluntary winding -up initiated by the company as contemplated in section 80,
and conducted either
(i) by the company; or
(ii) by the company’s creditors, as determined by the resolution of the
company; or
68

(b) winding -up and liquidation by court order, as contemplated in section 81.
(2) The procedures for winding -up and liquidation of a solvent company, whether
voluntary or by court order, are governed by this Part and, to the extent applicable, by the laws
referred to or contemplated in item 9 of Schedule 5.86
(3) If, at any time after a company has adopted a resolution contemplated in section 80, or
after an application has been made to a court as contemplated in section 81, it is determined
that the company to be wound up is or may be insolvent, a court, on application by any
interested person, may order that the company be wound up as an insolvent company in terms
of the laws referred to or contemplated in item 9 of Schedule 5.’ (Emphasis added.)

[168] In Snyders and Others v De Jager (Joinder) , the Constitutional Court,
when dealing with a direct and substantial interest for the purposes of joinder of
a party, stated:
‘A person has a direct and substantial interest in an order that is sought in proceedings if the
order would directly affect such a person’s rights or interest. In that case the person should be
joined in the proceedings. If the person is not joined in cir cumstances in which his or her rights
or interests will be prejudicially affected by the ultimate judgment that may result from the
proceedings, then that will mean that a judgment affecting that person’s rights or interests has
been given without affordin g that person an opportunity to be heard. . .87’

[169] In Absa Bank Ltd v Naude NO and Others ,88 this Court dealt with the test
applicable where there is a non -joinder of creditors in an application to set aside

86 Item 9 of Schedule 5 reads:
‘(1) Despite the repeal of the previous Act, until the date determined in terms of sub -item (4), Chapter 14 of that
Act continues to apply with respect to the winding -up and liquidation of companies under this Act, as if that Act
had not been repealed subject to sub - item (2) and (3).
(2) Despite sub -item (1), sections 343,344,346 and 348 to 353 do not apply to the winding - up of a solvent
company, except to the extent necessary to give full effect to the provisions of Part G of Chapter 2.
(3) If there is a conflict between a provision of the previous Act that continues to apply in terms of sub -item (1),
and a provision of Part G of Chapter 2 of this Act with respect to a solvent company, the provisions of this Act
prevail.
(4) The Minister, by notice in the Gazette, may -
(a) determine a date on which this item ceases to have effect, but bo such notice may be given until the Minister
is satisfied that alternative legislation has been brought into force adequately providing for the winding - up
and liquidation of insolvent companies; and
(b) prescribe ancillary rules as may be necessary to provide for the efficient transition from the provisions of the
repealed Act to the provisions of the alternative legislation contemplated in paragraph (a) .’
87 Snyders and Others v De Jager (Joinder) [2016] ZACC 54; 2017 (5) BCLR 604 (CC) para 9.
88 Absa Bank Ltd v Naude NO and Others [2015] ZASCA 97; 2016 (6) SA 540 (SCA) .
69

a business rescue plan and whether such failure to join them was fatal to the relief
claimed. This Court set out the test thus:
‘The test whether there has been non -joinder is whether a party has a direct and substantial
interest in the subject - matter of the litigation which may prejudice the party that has not been
joined.’89

[170] The enquiry that this Court had to conduct when assessing the creditor’s
interests in the Absa Bank case , above, applies equally herein. That enquiry must
be: ‘Whether the Commission has a direct and substantial interest in the winding -
up of Selective ’. As a regulator, the Commission has no direct and substantial
interest such that it would be prejudiced by the winding -up of Selective. It has a
right to bring winding -up proceedings of a solvent company, if it has met the
jurisdictional facts.

[171] The Legislature realised that there would be instances where a Commission
or shareholder brings an application for the winding -up of a solvent company in
terms of s 81(1) (f) and whilst that application is pending, a creditor who has
established that the company is unable to pay its debts (for having failed to meet
the s 345 demand), such creditor brings an application based on the insolvent
status of the company. That is what is envisaged in the section, otherwise why
would the Legislature have two ‘applica tions’ in one section? Again, how can the
Commission that relied on solvency change its stance in the same proceedings
and rely on insolvency? That is a very controversial approach, which would
conflate the grounds for winding -up as demonstrated above. Con sequently, I find
that the plain text of the section envisages two applications.

[172] The approach I postulate herein is consistent with the limited grounds upon
which the Commission may bring winding -up proceedings against a solvent
company as contemplated in s 81(1) (f). The Legislature clearly intended that the

89 Ibid para 10 .
70

pending first application would be based on the solvent status of the company by
the applicant such as the Commission and the second application by an interested
party, such as a creditor, shareholder or director or even the company itself, would
bring the application based on the company’s insolvent status. The Act does not
authorise the Commission to bring a winding -up of a company based on
insolvency.

[173] The approach contended for in the first judgment would, with respect, lead
to two unconscionable results, namely, that what was initially a s 81(1) (f)
application by the Commission could simultaneously change colour just like a
chameleon into a s 344 application, by the same Commission. Second, it would
absolve the Commission from meeting the jurisdictional facts canvassed above,
and afford it a second bite at the cherry by changing the grounds for winding -up
from solvent to insolvent without much effort. Over and above, the Commission
would bring the application as the applicant in the s 81(1) (f) application but also
without bringing another application, in the same proceedings be an interested
person and rely on insolvency. That would lead to absurdity and unjust results,
which the legislature by no means could have contemplated.

[174] Lastly, the conclusion in the first judgment, in paragraphs 59 and 60 with
respect, does not seem to find support from the findings of this Court in
Boschpoort at paragraphs 12 and 13, where it is stated:
‘Section 80 of the new Act relates to the voluntary winding -up of a ‘‘solvent company’’.
Section 81 of the new Act relates to the winding -up, also of a ‘‘solvent company’’, by a court.
In terms of s 81(1) (c)(ii) of the new Act (upon which the court below based its decision to
liquidate the appellant), a court may order the winding -up of a company where a creditor has
applied for such an order on the grounds that ‘‘it is otherwise just and equitable for the
company to be wound up.’’
There have been discordant views on the circumstances under which a company may be wound
up under the new Act, on the one hand, or the old Act on the other. It is clear, however, that
ss 79 to 81 of the new Act apply to the liquidation of ‘‘solvent’’ compa nies. Section 79(3) of
71

the new Act provides, however, that if it becomes apparent during the liquidation proceedings
of a ‘‘solvent’’ company, that it is or may be ‘‘insolvent’’, the transitional provisions referred
to in item 9 of schedule 5 of the new Act apply: the winding -up of the insolvent company may
take place under the old Act.’90 (Emphasis added.)

[175] I accordingly find that the Commission is not an interested person as
envisaged in s 79(3). In this regard, the high court misdirected itself in the
exercise of its discretion and this Court is at large to interfere with its decision.91

How is the provisional order of winding -up of Selective prejudicial?
[176] Once a provisional order is granted, the company is divested of its assets,
and they are immediately placed in the hands of the Master. The liquidators take
control of the assets. All contracts of employment are automatically terminated.
This applies to all companies irrespective of their size. Therein lies the prejudice.
In Commissioner , South African Revenue Service v Pieters and Others ,92 this
Court held:
‘The company had some 700 employees. Their employment contracts were in terms of s 38(1)
of the Insolvency Act 24 of 1936 (the Act), suspended on the date of the commencement of the
winding -up on 7 December 2012. The contracts came to an automatic end 45 days later by
virtue of the provisions contained in s 38(9) of the Act. At the time of the commencement of
the company’s winding -up, leave pay had accrued to the employees.’93

[177] The fact that the winding -up of Selective was granted by the high court,
without facts supporting that it was insolvent, calls for the immediate setting aside
of that order. A provisional winding -up order that is issued by an appellate court,
in the circumstances of this case, should not be countenanced. It will not be in

90 Ibid para 10.
91 See Trencon Construction (Pty) Limited v Industrial Development Corporation of South Africa Limited and
Another [2015] ZACC 22; 2015 (5) SA 245 (CC); 2015 (10) BCLR 1199 (CC) paras 88 and 89; Hotz and Others
v University of Cape Town [2017] ZACC 10; 2017 (7) BCLR 815 (CC); 20178 (1) SA 369 (CC) para 28.
92 Commissioner for the South African Revenue Service v Pieters and Others [2018] ZASCA 128; 2020 (1) SA 22
(SCA); 82 SATC 12 .
93 Ibid para 2.
72

accordance with the interests of justice. Besides, the Commission sought a final
order and not a provisional order before the high court.

Costs
[178] There is no basis to depart from the normal rule that the successful party is
entitled to its costs .

[179] I make the following order:
1 The appeal is upheld with costs, such costs to include costs of two Counsel,
where so employed.
2 The order of the high court is set aside and substituted with the following:
‘The application is dismissed with costs, such costs to include costs of two
counsel, where so employed. ’


__________________________
T V NORMAN
ACTING JUDGE OF APPEAL














73

Appearances
For the appellant: M R Maphutha and M Matlala
(The heads of argument were prepared by
T Ngcukaitobi SC and M R Maphutha)
Instructed by: Matlala and Associates, Pretoria
Webbers Attorneys, Bloemfontein

For the respondent: H C Janse van Rensburg and P Nyapholi -
Motsie
Instructed by: The State Attorney, Pretoria
The State Attorney, Bloemfontein .