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REPUBLIC OF SOUTH AFRICA







IN THE HIGH COURT OF SOUTH AFRICA
(LIMPOPO DIVISION, POLOKWANE)

CASE No: 2025/080158
(1) REPORTABLE: YES/NO
(2) OF INTEREST TO THE JUDGES: YES/NO
(3) REVISED.
SIGNATURE: VAN WYK ASL (AJ)
DATE: 24 JUNE 2025

In the matter between:

THE HANS MERENSKY LANDOWNERS APPLICANT
ASSOCIATION (PTY) LTD

and

SOUTHERN SKY RESIDENTIAL RESPONDENT
PROPERTIES (PTY) L TD
(Registration Number: 2006/017584/07)

JUDGMENT

VAN WYK ASL (AJ):

INTRODUCTION

1. The applicant, The Hans Merensky Landowners Association, applied to this
Court, on an urgent basis seeking the compulsory liquidation of the respondent. The
basis for seeking the relief sought is premised thereon that the applicant alleges that
the resp ondent is commercially insolvent and unable to pay its debts as envisaged in
section 344(f) read with section 345 of the Companies Act, 61 of 1973 (“ the Act ”).

2. The applicant furthermore argued that it would be just and equitable to place
the responden t under winding up and for a liquidator to be appointed to ensure that
all creditors are treated fairly and equally and for an investigation into the conduct of
the respondent and its director as envisaged in section 344(h) of the Act.

3. The responden t is the owner of two (2) immovable properties. The first
property is situated at Erf 8 […], Phalaborwa Extension 1. The second property is
situated at Portion 75 of Portion 57, Merensky (“ the Merensky property ”). The
Merensky property is a property which fa lls within the Hans Merensky Golf Estate
and as a result thereof, the respondent, as the owner of this property, is liable to
make payment of monthly levy amounts to the applicant. The obligation to make
payments as such is admitted by the Respondent.

4. The applicant argued that the respondent, at the time of launching its
application, is indebted to it in an amount of R 293 363 -58 and at the time of filing its
replying affidavit increased to an amount of R 309 434 -10 which will increase
monthly.

5. It is trite that where an applicant has established, prima facie , that it has a
claim against the respondent, which is due and owing, but which remains unpaid, the
onus shifts to the respondent to show that its indebtedness to the applicant is bona
fide disputed and on reasonable grounds.1 Further, in determining the claim amount
an applicant can rely on all information before the Court disclosed in the affidavits.2 If
a debt has been partially paid or is partially disputed, a creditor still has locus standi
to bring an application if the unpaid part of the liquid debt that exceeds R100.00.
Considering the facts presented by the applicant and those facts admitted by the
respondent and insofar as it may be relevant to mention herein, I am of the view that
the applicant is a creditor of the respondent, and it established the requisite locus
standi to institute these proceedings which I will deal with in more detail below.

URGENCY

6. The Respondent argued that this application is not urgent and is an abuse of
this Courts process. The applicant in essence argued that the matter is urgent and
remains urgent following the discharge of the provisional liquidation order on 23 April
2025 by my brother, Kganyago J.

7. In Imperial Logistics Advance (Pty) Ltd v Remnant Wealth Holdings (Pty) Ltd3
the Supreme Court of Appeal dealt with a matter where the Court a quo dismissed a
liquidation application for a lack of urgency. In adjudicating upon the appeal, the
Supreme Court of Appeal held as follows at paragraph 30 of its judgment:

“The high court erred. Winding -up applications are, in general by their nature,
urgent.”

8. The Supreme Court of Appeal approved the finding by the Court in the matter
of Van Greunen v Sigma Switchboard Manufacturing CC4 where the Court held as
follows at paragraph 10:

“In recognition of the in -built urgency of liquidation applications, the practice
has developed in this division that it is unnecessary for applicants to

1 Kalil v Decotex (Pty) Ltd 1988 (1) SA (T) at 980B – D; Helderberg Laborotories CC v Sola
Technologies 2008 (2) SA 627 (C) at paras 21 and 22.
2 Stephan v Khan 1917 CPD 24.
3 [2022] Z ASCA 143 (24 October 2022).
4 [2003] ZAECHC 12.
formalistically recite a standard set of allegations to satisfy the terms of rule
6(12) and to seek and obtain a specific order condoning the non -compliance
with provisions of rule 6. The practice sensibly works from the reasonable and
recognised assumption that all liquidation applications are urgent and so
should be treated differently to other applications. Patterns of practice,
expectations and perhaps even rights have developed over the years on the
basis of the practice, and it would, in my v iew, be an unwarranted interference
with these legitimate interests to interfere with the established practice.

9. In Ex parte: Nell N.O. and Others5 the Court, per Tuchten, J, confirmed this
position and held in respect of urgency of insolvency proceedings as follows:

“Another factor supporting the view I have taken is the inherent urgency of
insolvency proceedin gs. In Absa Bank Ltd v De Klerk and Related Cases
1999 4 SA 835 E 838J -839A, the court said:
“There is frequently a large body of creditors whose rights are affected by
sequestration, who may wish to be heard on the return day, and who may be
prejudiced b y delay. This inherent urgency leads Meskin to make the following
recommendations in Insolvency Law at 2.1.7 at 2 -34, a recommendation
which I endorse and which the Courts in this Division have in fact applied.

10. In Fourie and Another v Housezero Cons truction (Pty) Ltd6 the following was
confirmed and held at para 28:

“In our law, commercial urgency has also been accepted as justifying the
launching of an application in the urgent court … It is furtherm ore trite law that
an application for the liquidation of a company carries inherent urgency. That
much was expressed in various cases, in various jurisdictions.”

11. The applicant argued that since the provisional order was discharged on 23
April 2025 there exists a well -founded fear that the respondent under control of Ms
Shamira Rinderknecht, will attempt to transfer the two immovable properties out of

5 2014 (6) SA 545 (GP).
6 2022 JDR 0202 (GP).
the name of the respondent to frustrate creditors, including the applicant. This seems
to be the onl y assets held by the respondent.

12. The applicant substantiated its fears by the fact that the respondent’s director,
Ms Rinderknecht, has over the years embarked on numerous litigious matters solely
to frustrate the rights of creditors.

13. This Court was referred to remarks made by the Supreme Court of Appeal in
Southern Sky Hotel and Leisure (Pty) Ltd and Others v Southern Sky Food
Enterprises (Pty) Ltd7:

“One final comment is necessary regarding the manner in which Rinderknecht
has over the years frustrated the various efforts to wind - up a company that
was clearly financially distressed since at least 2013. I need not restate the
facts. It took the Irish Investors close to eight years of litigation to obtai n a final
liquidation order. The liquidators have the following to say about this latest
attempt to frustrate the liquidation process:
‘Simply put, the business rescue applications have been filed as part of a
clear and unlawful stratagem to abuse the mac hinery of business rescue and
to further frustrate the eventual winding -up of the insolvent estate of [the
company]. [The respondent] acted in concert with the original applicant [Vision]
who issued the first business rescue in December 2020. Both applicat ions
constitute abuse and are nothing but simulated litigation. The aim and motive
are to procure and [sic] ulterior object, namely a suspension of litigation.’

14. It was furthermore argued that this application will only be heard in the
opposed motion roll by June or July 2026, if this matter is brought in the normal
course. In further support of the applicants’ fears the applicant said that the effect will
be that by the time the matter is heard in the normal course, there may be no assets
left that c an be realized and the proceeds be distributed to creditors, resulting in
detrimental prejudice to the creditors of the respondent which includes the applicant.
In consequence the applicant argued that this application is urgent, and an

7 2023 (4) SA 99 (SCA).
imperative need exi sts for a concursus creditorum to be established and for a
liquidator to be appointed.

15. It is a well -established principle in our law that the liquidation of a company’s
estate establishes a concursus creditorum whereafter nothing can be done by any o f
the creditors to alter the rights of other creditors.8 It is trite that the object of an
insolvency order is to ensure ‘a due distribution of assets among creditors in the
order of their preference.’9.

16. The Court in East Rock Trading 7 (Pty) Ltd and Another v Eagle Valley
Granite (Pty) Ltd and Others (11/33767) [2011] ZAGPJHC 196 (23 September 2011)
in paras 6 states as follows:

‘[6] The import thereof is that the procedure set out in rule 6(12) is not there
for taking. An applicant has to set forth explicitly the circumstances which he
avers render the matter urgent. More importantly, the Applicant must state the
reasons why he claims that he cannot be afforded substantial redress at a
hearing in due course. The question of whether a matter is suffi ciently urgent
to be enrolled and heard as an urgent application is underpinned by the issue
of absence of substantial redress in an application in due course. The rules
allow the court to come to the assistance of a litigant because if the latter
were to wait”

17. In the matter of Mogalakwena Municipality v Provincial Executive Council and
others10 the learned Tuchten, J held at paragraph 64 as follows:

“It seems to me that when urgency is in issue the primary investigation should
be to determine whethe r the applicant will be afforded substantial redress at a
hearing in due course. If the applicant cannot establish prejudice in this sense,
the application cannot be urgent.


8 Walker v Syfret N.O. 1911 AD 141 at 160.
9 Walker v Syfret N.O. 1911 AD 141 at 166.
10 2016 (4) SA 99 (GP)
18. In the affidavits filed in this application, reference was made to prior and
never -ending litigatio n involving the Respondents director, Ms Shamira Rinderknecht
and other entities/companies she was involved in. I am of the view that those
proceedings and the facts which gave rise thereto play no determining role in this
application, except for the provi sional order, which was discharged on 23 April 2025,
whether by agreement between those parties or not. The culminating effect thereof is
that the immovable assets of the Respondent are no longer preserved, protected or
under the control of provisional liq uidators. Further, the Respondent admitted that it
is a debtor of the applicant, subject to its defense of set -off which I will deal with later
herein below.

19. Considering the authorities and facts referred to herein supra , I am of the view
that the ap plication is urgent and that the applicant will not be afforded substantial
redress at a hearing in due course.

20. Accordingly, I find that the matter is urgent.

21. The respondent applied for condonation for the later filing of its answering
affidavit. This application is not opposed by the applicant. Considering the reasons
advanced by the respondent and this court’s discretion under these circumstances,
specifically in urgent applications, the late filing of the respondent’s answering
affidavit i s condoned.

22. During argument, the respondents counsel highlighted that the applicant
attempted to make out a case or amplify its cause of action in its replying affidavit
which, according to trite legal principles should not and cannot be allowed. In the
answering affidavit, the respondent raised issues regarding (a) the alleged resolution
taken by the board of the applicant in terms whereof Ms Rinderknecht’ subsidiary
companies decided to provide financial assistance to the applicant and that any
amou nts owing by the respondent to the applicant must be set -off against such
indebtedness, and (b) the statement provided to the applicant as regards to its
alleged indebtedness to Ms Rinderknecht. Upon careful consideration of the
affidavits filed by the par ties, I am satisfied that the applicant pleaded the requisite
primary and legal facts to sustain a cause of action in its founding affidavit,
specifically those facts which are required in applications of this nature. The
applicant pleaded that it is a cre ditor of the Respondent, it is owed more than R 100 -
00, that the respondent is commercially insolvent and it would be otherwise just and
equitable to place the respondent under liquidation. It follows that the allegations
pleaded by the respondent, refer red to in (a) and (b) supra warranted a response
from the applicant in its replying affidavit. After all, the respondent raised the
defence(s) referred to in (a) and (b) supra in its answering affidavit.

23. In eBotswana (Pty) Ltd v Sentech (Pty) Ltd an d Others11 Spilg J in para 28
said the following:

“ … The short answer is that in view of the contents of the answering affidavit
it was well within the ordinary procedural rules for the applicant to respond by
introducing further corroborating facts. Even if certain of the averments could
have been made in the founding affidavit, on its own that is no basis for
excluding it for consideration. It is evident that Sentech would not have been
able to challenge the averment or document produced”12.

MERITS OF THE MATTER

24. I will now deal with the merits and defences of this application. In establishing
whether the applicant is entitled to relief it seeks by placing the respondent under
liquidation it is important for it to establish certain jurisdictional factors such as:

24.1 Whether the applicant is a creditor of the respondent in an amount of
more than R100.00.
24.2 Whether there is a bona fide dispute of indebtedness on reasonable
grounds.
24.3 Whether the respondent is commercially insolvent.
24.4 Whether it would be just and equitable to place the respondent under
liquidation; and

11 2013 (6) SA 327 (GSJ)
12 Hidro -Tech Systems (Pty) Ltd v City of Cape Town and Others 2010(1) SA 483 (C) at para 81 and
Smith v Kwanonqu bela Town Council 1999(4) SA 947 (SCA) at para 15.
24.5 This Court’s discre tion in refusing a winding -up order in these
circumstances.

25. It is undisputed on the affidavits before me that the applicant is a creditor of
the respondent. In a letter by the respondent’s attorneys of record, dated 25 April
2025 it was conceded that the “ levies of her (Rinderknecht) related properties are
due and should be offset and the residue thereon be paid to our client
(Rinderknecht)”. Further, the respondent admitted in paragraph 9 of its answering
affidavit that it is the owner of Portion 75 o f Portion 57, Merensky, which falls within
the Hans Merensky Golf Estate and by virtue of such ownership the respondent is
liable to the applicant for the payment of monthly levies. As mentioned herein supra ,
I am of the view that the applicant is a cred itor of the respondent.

26. It follows that the respondent must dispute the existence of the debt. This was
confirmed by the Supreme Court of Appeal in the matter of Imobrite (Pty) Ltd v DTL
Boerdery CC13 where the Supreme Court of Appeal said at paragraph 14:

“It is trite that, by their very nature, winding -up proceedings are not designed
to resolve disputes pertaining to the existence or non -existence of a debts.
Thus, winding -up proceedings ought not to be resorted to enforce a debt that
is bona fide (genuinely) disputed on re asonable grounds. That approach is
part of the broader principle that the court’s processes should not be abused.”

27. In paragraph 1.13 of the respondents answering affidavit it states that “ a real
dispute exists with regard to the indebtedness of the r espondent towards the
applicant ”.14 I agree, that if the continuous repetitions, denials and irrelevant matter
are stripped from the respondent’s answering affidavit , it is evident that the
respondent relies on an alleged set -off as a basis for not being liable to pay the debt
owing to the applicant.

28. Following the respondents’ argument, and accepting hypothetically that a
valid resolution was adopted by the appl icant’s board on 1 September 2023, the

13 [2022] ZASCA 67 (13 May 2022).
14 Answering affidavit, at para 1.13, page 007 -18.
Respondent’s main defence remains that it owes the applicant amounts for arrear
levies but that such debt should be set off against the debt incurred by Ms
Rinderknecht on behalf of the applicant, i.e. the purported l egal fees which was paid
on behalf of the applicant.

29. The applicant argued that the respondent relies on an invoice issued by Ms
Rinderknecht. The invoice under discussion is a single document which seems to
have been prepared by Rinderknecht hersel f wherein she states that a total amount
of R 4 588 329 -09 was purportedly paid by her in legal fees on behalf of the
applicant. Further, the applicant argued that there is no actual account and invoice
from the attorney that attended the legal work nor an y vouchers for any
disbursements to arrive at the exorbitant amount of R 4 588 329 -09. What is
furthermore absent is any proof that this amount was even paid for by Rinderknecht.
It follows that the applicant disputes the amount owed in legal fees to Rinde rknecht.

30. Even if it is accepted that a valid resolution was adopted by the applicant’s
board on 1 September 2023, the purported claim by Ms Rinderknecht or
hypothetically the Respondent for that matter is for legal fees which existence and
amount i s disputed by the applicant. The applicant, without a doubt and specifically
considering its denial(s), would be entitled to a taxed bill of costs which would only
after such taxation render the purported legal fees liquidated in nature. On the
conspectus of the evidence in casu , the disputed legal fees were not taxed at all,
which renders the claim by Ms Rinderknecht or hypothetically the respondent not
liquidated in nature. On the conspectus of the evidence before me, Ms Rinderknecht
purportedly advanced monies to - and on behalf of the applicant. It follows that Ms
Rinderknecht might have a claim premised on unjustified enrichment against the
applicant if such fees were in fact paid on behalf of the applicant. This purported or
potential claim is in any ev ent not liquidated.

31. In order for a party to successfully rely upon set -off as a defence that party
must allege and prove:

31.1 There is an indebtedness by the one party to the other and vice versa15;
31.2 The debt relied upon in support of the set -off is due and payable16;
31.3 Both debts are liquidated17; and
31.4 The parties are indebted to each other in the same capacity.18

32. On the version of the respondent, the applicant is indebted to Rinderknecht
for the repayment of alleged legal fees. The problem for the respondent is twofold,
firstly , the applicant and the respondent are not mutually indebted to one another
and secondly , the purported claim for legal fees are not liquidated, even if the
applicant was hypothetically indebted to the respondent.

33. The respondent further relied on annexure “AA7”, an annexure to its
answering affidavit, to suggest that the set -off applies between the respondent and
the applicant. If consideration is given thereto, the letter suggests that the erstwhile
attorneys for the respondent acted on behalf of “Ms Rinderknecht, NewInvest (Pty)
Ltd, Golden Quilt Investments 164 CC and Southern Sky Estate (Pty) Ltd, herein
referred to as our clients ”. This letter made no mention of the respondent as their
client and is consequently of no assistance to the respondent.

34. In Capricorn Beach Homeowners Association v H.E.S. Potgieter t/a Nilands
and Another19 the Supreme Court of Appeal dealt with a defence of set -off in
circumstances where the parties were not mutually indebted to one another, similar
as to the facts in casu .

34.1 In dealing with these facts, the Supreme Court of Appeal held as
follows:
“I deal first with the appellant’s defence based on set -off. The appellant’s
claim to set off the client’s debt against the erroneous payment made by the
first respondent is ill -conceived. The appellant and the first respondent are not
mutually indebted to each other. Set -off operates only where two persons

15 Porterstraat 69 Eiendomme (Pty) Ltd v PA Venter Worcester (Pty) Ltd 2000 (4) SA 598 (C).
16 Mahomed v Nagdee [1952] 2 All SA 121 (A), 1952 (1) SA 410 (A).
17 Fatti’s Engineering Co (Pty) Ltd v Vendick Spares (Pty) Ltd [1962] 1 All SA 578 (T), 1962 (1) SA
736 (T).
18 Road Accident Fund v Myhill NO 2013 (5) SA 426 (SCA).
19 2014 (1) SA 46 (SCA).
reciprocally owe each other something in their own right. Wille’s Principles of
South African Law 9 ed (2007) at 1834. In Schierhout v Union Government
(Minister of Justice) 1926 AD 286 at 289, Innes CJ commented as follows with
regard to set -off:
‘The doctrine of set -off with us is not derived from statute and regulated by
rule of court, as in England. It is a recognised principle of our common law.
When two parties are mut ually indebted to each other, both debts being
liquidated and fully due, then the doctrine of compensation comes into
operation. The one debt extinguishes the other pro tanto as effectually as if
payment had been made.’ (Emphasis added.)
In the present m atter the appellant and the first respondent are not mutually
indebted to each other. The appellant knew that the payment was made in
error and was therefore not entitled to appropriate the erroneously transferred
funds. See Nissan South Africa (Pty) Ltd v Marnitz NO & others 2005 (1) SA
441 (SCA) para 24. Even on the appellant’s own version no grounds exist for
set-off to operate against the first respondent.”20

35. The principle that a Respondent is required to dispute the entire debt bona
fide and upo n reasonable grounds has become entrenched and is known as the
Badenhorst rule (after Badenhorst v Northern Construction Enterprises (Pty) Ltd
1956 (2) SA 346 (2) at 347H to 348B ). The rule was recognized in the then Appellate
Division in Kalil v Decotex (Pty) Ltd & Another21.

36. In Kalil v Decotex (Pty) Ltd and Another22, Corbett JA referred with apparent
approval to the earlier decision of Hiemstra AJ (as he then was) in Badenhorst v
Northern Construction Enterprises (Pty) Ltd23, approving a passage from Buckley on
Companies, which included the following statement:

"But, for course, if the debt is not disputed on some substantial ground , the
court may decide it on the petition and make the order". (own emphasis

20 Capricorn Beach Homeowners Association v H.E.S. Potgieter t/a Nilands and Another 2014 (1) SA
46 (SCA) at paragraphs 13 and 14.
21 1988 (1) SA 943 (AD) at 980C - G
22 1988 (1) SA 943 (A) at 979 B -C
23 1956 (2) SA 346 (T) at 348
added). The learned Judge of Appeal went on to add the following at 1165
and said :
“a bare denial of applicant's material averments cannot be regarded as
sufficie nt to defeat applicant's right to secure relief by motion proceedings in
appropriate cases. Enough must be stated by respondent to enable the Court
(as required in Petersen's case (supra) to conduct a preliminary examination
of the position and ascertain w hether the denials are not fictitious, intended
merely to delay the hearing. The respondent's affidavits must at least disclose
that there are material issues in which there is a bona fide dispute of fact
capable of being decided only after viva voce evidence has been heard. "

37. In Meyer No V Bree Holdings (Pty) Ltd24 Margo J, accepted the court's
reasoning in the Room Hire Company case as applying, equally, to winding up
proceedings and the application of the Badenhorst Rule. (a reference to the case of
Badenhorst v Northern Construction Enterprises (Pty) Ltd25 where it was formulated
and adopted)

38. Professor Blackman in "Companies", in Joubert The Law Of South
Africa26describes the meaning of " a bona fide dispute on reasonable grounds " as
follows:

“A debt is not bona fide disputed simply because the respondent company
says that it is disputed. The d ispute must not only be bona fide or genuine but
must be on good, reasonable or substantial grounds. The expression 'genuine
dispute' connotes a plausible contention requiring the same song of
consideration as a 'serious question to be tried'. It is not su fficient for the
company merely to establish that there is a serious question to be tried as to
whether the dispute over the debt is genuine in that the debt is disputed on
the basis that an honestly held belief that it is not payable and is not disputed
merely for the purposes of delay or obstruction. 'Genuine' in this context does
not mean fabricated for the purposes of the proceedings or not just thought up

24 1972 (3) SA 353 (T) at 354 D -H
25 1956 (2) SA 346 (T)
26 Vol 4, Part 3, paragraph 113
or bro ught forward without genuine belief: there can be no genuine dispute if
there are not substantial grounds for disputing the debt."

39. Fourie J held in Helderberg Laboratories CC and Others v Sola Technologies
(Pty) Ltd27 that:

“I am in respectful agre ement with the aforesaid dictum of Milne J, which has
been approved by the Appellate Division in Kalil v Decotex (Pty) Ltd and
Another (supra) at 980E. It therefore appears to me that it would be preferable
to refer to this duty, of a respondent to show th at the alleged debt is disputed
on bona fide and reasonable grounds, as an evidential burden and not an
onus”

40. Considering the legal principles and the facts contained in the affidavits, I am
of the view that the respondent’s reliance on the defence of set -off is misplaced and
incorrect in law for the reasons advanced in paragraph 32 supra . Consequently, I am
of the view that the respondent failed to disclose a bona fide dispute for the
indebtedness on reasonable grounds as regards to the claimed amount it owes the
applicant. The respondents’ defence premised on set -off is furthermore legally and
factually unsustainable. Accordingly, the respondent’s defence premised on set -off
must fail .

41. Considering that there is a clear indebtedness owing by the respondent to the
applicant, which indebtedness are not di sputed on bona fide and reasonable
grounds by the respondent, I turn to consider, on the affidavits before me, whether
the respondent is commercially insolvent. The applicant’s attorneys transmitted 2
(two) notices and demands in terms of section 345 of th e Act to the respondent at its
registered address.28 The aforesaid notices were served by the Sheriff on the
respondent’s registered address on respectively on 7 and 8 April 2025.29
Notwithstanding the lapse of 21 days from the date of serving the section 3 45

27 2008 (2) SA 627 (C) at paragraph [22] and [23]
28 Annexure “FA17” and “FA18” to the applicants founding affidavit, on page 004 -64 to 004 -75.
29 Annexure “FA19” and “FA20” to the applicants founding affidavit, o n page 004 -76 to 004 -77.
notices, the respondent has neglected, refused and/or failed to pay, secure or
compound the indebted amount.

42. Considering the respondents failure to rely successfully on its defence of set -
off, the only conclusion is that the respondent is commer cially insolvent and ought to
be deemed as such. A company’s inability to pay its debts may be proved in any
manner. Evidence that a company has failed on demand to pay a debt of which
payment is due is cogent prima facie proof of its inability to pay debts

“... for a concern which is not in financial difficulties ought to be able to pay its
way from current revenue or readily available resources ”.30

43. In Body Corporate of Fish Eagle v Group Twelve Investments 2003 (5) SA
414 (W) at 428B -C the Court held as follows:

“The deeming provision of s 345(1)(a) of the Compa nies Act creates a
rebuttable presumption to the effect that the respondent is unable to pay its
debts (Ter Beek's case supra at 331F).”

44. Accordingly, with the deeming provision taking effect, the respondent had an
evidentiary burden to satisfy this Court that it is able to pay its debts and that it is
commercially solvent. In my view, a task which the respondent dismally failed to do.
The respondent failed to advance any audited financial statements to prove its
solvency. Considering the respondents failure to satisfy the requirements to
successfully relying on a defence of set -off, there are no primary or secondary facts
placed before this court which disputes the fact that the respondent cannot meet its
day-to-day liabilities. The respondent has accordingly failed to rebut the presumption
that it is commercially insolvent and unable to pay its debts.

45. As stated by Caney J in the case of Rosenbach31:


30 Rosenbach & Co (Pty) Ltd v Singh's Bazaars (Pty) Ltd 1962 (4) SA 593 (D) at 597 per Kany J
31 1962 (4) SA 593 (D) at 597
“the proper approach in deciding the question whether a company should be
wound up on this ground appears to me. to be that, if it is esta blished that a
company is unable to pay its debts, in a sense of being unable to meet current
demands upon it, its day -to-day liabilities in the ordinary course of business, it
is in a state of commercial insolvency”.

46. In Murray and Others NNO v Afric an Global Holdings (Pty) Ltd and Others32
the Supreme Court of Appeal dealt with the test for commercial insolvency and held
as follows at paragraph 31:

“The argument about timing misconceived the nature of commercial
insolvency. It is not something to be measured at a single point in time by
asking whether all debts that are due up to that day have been or are going to
be paid. The test is whether the company “is able to meet its current liabilities,
including contingent and prospective liabilities as the y come
due”…Determining commercial insolvency requires an examination of the
financial position of the company at present and in the immediate future to
determine whether it will be able in the ordi nary course to pay its debts,
existing as well as contingent and prospective, and continue trading”.

47. Furthermore, over a century ago Innes, CJ in the well -known matter of De
Waard v Andrew & Thienhaus Ltd33 made the following apposite remarks:

“The matter is not sprung upon him. . . of course; the court has a large
discretion in regard to making the law absolute; and in exercising that
discretion the condition of a man’s assets and his general financial position
will be important elements to be consi dered. Speaking for myself, I always
look with great suspicion upon and examine very narrowly the position of a
debtor who says: “I am sorry that I cannot pay my creditor, but my assets far
exceed my liability”. To my mind the best proof of solvency is tha t a man

32 2020 (2) SA 93 (SCA).
33 1907 TS 722 quoted with approval in ABSA Bank Limited v Rhebokskloof (Pty) Ltd and Others
1933 (4) SA 436 (C) at 447C -F.
should pay his debts; and therefore, I always examine in a critical spirit the
case of a man who does not pay what he owes.”

48. The aforesaid judgment of Innes CJ, was confirmed by Berman J, in
Rhebokskloof 34, where he held the following:

“The oft repeated and, with respect, eminently commonsensical and practical
statement of Innes CJ in De Waard v Andrews & Thienhans Ltd 1907 TS 727
at 733 is singularly apt in the instant context, viz:
'To my mind the best proof of solvency is that a man should pay his debts;
and therefore, I always examine in a critical spirit the case of a J man who
does not pay what he owes', words which were echoed by Bristowe J in his
judgment in the same case, in which he said at 739:
'After all, the prima fa cie test of whether a man is insolvent or not is whether
he pays his debts; and if he cannot pay them, that goes a long way towards
proof that he is insolvent.'”

49. The applicant argued further that the respondent stands to be wound -up on
the basis tha t it is just and equitable to do so as envisaged in section 344(h) of the
Companies Act. Unlike the other paragraphs of section 344 of the Act, this
paragraph “ postulates not facts but only a broad conclusion of law, justice and equity,
as a ground for win ding-up.”35

50. The expression “ just and equitable ” “is not to be interpreted so as to only
include matters ejusdem gene ris the other grounds specified in ” the section.36


34 ABSA Bank Limited v Rhebokskloof (Pty) Ltd and Others 1933 (4) SA 436 (C) at 447 C-F.
35 Moosa NO v Mavjee Bhawan (Pty) Ltd 1967 (3) SA 131 (T) at 136 per Trollip J (as he then was);
Erasmus v Pentamed Investments (Pty) Ltd 1982 (1) SA 178 (W) at 181; Tjospomie Boerdery (Pty)
Ltd v Drakensberg Botteliers (Pty) Ltd 1989 (4) SA 31 (T) at 42 –43; Cuninghame v First Ready
Development 249 (Association incorporated in terms of section 21) [2010] 1 All SA 473 (SCA) at para
3.
36 Erasmus case supra at 181 per Nestadt J (as he then was); and see Emphy v Pacer Properties
(Pty) Ltd 1979 (3) SA 363 (D) at 365 and cases there cited, especially Loch v John Blackwood Ltd
[1924] AC 783 (PC).
51. It confers upon the Court a wide discretionary power which must be exercised
judicially, considering all relevant circumstances. Justice and equity are those facts
between the competing interests of a ll concerned.37

52. A creditor may apply on this ground38. In the matter of Kyle v Maritz &
Pieterse Inc39 the Court found that the company was indebted to the creditor ex
contractu (at 230) but granted a winding -up order on the ground that it was just and
equitable to d o so.

53. The court in Herman and Another v Set -Mak Civils CC40 specifically agreed
that it would be just and equitable to place a company in liquidation where there is a
total disregard for the rights and claims of its creditors.

54. Berman, J in the decision of Absa Bank Limited v. Rhebokskloof (Pty) Limited
& Others41 said the following:

“Notwithstanding this, the Court has a discretion to refuse the winding up
under these circumstances, but it is one which is limited where a creditor has
a debt which a company cannot pay, in such a case the Creditor is entitled,
ex-debito justitiae to a winding up order.

55. In E Sacks Futeran and Co (Pty) Ltd v Linorama (Pty) Ltd; Ex parte Linorama
(Pty) Ltd 1985 (4) SA 686 (C) at 687 it was held:

It is now well established that while the Court has a discretion whether or not
to wind up a company unable to pay its debts, where an unpaid creditor - and
that is what the applicant is - seeks a winding up, the Court's discretion is very
narrow for an un paid creditor who cannot obtain payment and who brings his

37 Moosa case supra at 136.
38 Sweet v Finbain 1984 (3) SA 44 1 (W) at 444 –445; and see eg Bechuanaland Malt & Milling Co Ltd
v International Seed & Produce Co (Pty) Ltd 1952 (3) SA 863 (W); Simmons NO v Snobberie Cape
(Pty) Ltd 1977 (3) SA 451 (W) where the application failed for lack of [Page 702] prima facie proof that
the applicant was a creditor.
39 2002 3 All SA 223 (T).
40 2013 (1) SA 386 (FB).
41 1993 (4) SA 436 (C) on page 440
claim within the Companies Act, as against the company, is entitled ex debito
justitiae to a winding up order

56. In Sammel v President Brand Gold Mining Co Ltd 1969 (3) SA 629 (A) it was
held at 662:

“Consequently, the loan creditors would probably have insisted upon taking a
compulsory winding -up order against the company, to which they were
entitled ex debito justitiae”

57. This principle was further co nfirmed by the Supreme Court of Appeal in the
matter of Afgri Operations Limited v Hamba Fleet (Pty) Limited42 where it was held:

“Notwithstanding its awareness of the fact that its discretion must be
exercised judicially, the court a quo did not keep in view the specific principle
that, generally speaking, an unpaid creditor has a right, ex debito justitiae, to a
winding -up order against the respondent company that has not discharged
that debt.

58. It is this Court’ view that the applicant complied wi th all the requirements to
obtain a liquidation order against the respondent because:

58.1 The applicant is a creditor of respondent;
58.2 The respondent failed to dispute the indebtedness based on bona fide
and reasonable grounds;
58.3 The respondent is unable to pay its debts; and
58.4 It would be just and equitable to place the respondent under winding -
up.

59. After carefully considering the attempted defence(s) raised by the respondent
and a holistic consideration of all the facts and defence(s) raised in this application, I
find that it will be just and equitable that the respondent company be wound up.

42 2022 (1) SA 91 (SCA) at para 12.
Upon my conclusion as aforesaid, the making of the order for the winding -up does
not involve the exercise of a discretion.43

60. As highlighted in the matter of Business Partners Limited v Montache Villas
(Pty) Ltd44 Vorster AJ in my view correctly stat ed as follows:

60.1 The court retains a discretion to refuse to grant an order sought by an
unpaid creditor. This discretion is a 'very narrow one' and is rarely exercised
and then in special or unusual circumstances only’45
60.2 Two types of judicial discretion emerged in our case law, namely a
discretion in the true sense or a discretion in the loose sense46. A discretion in
the true sense is where the court has a wide range of equally permissible
options available to it47. A discretion in t he loose sense means no more than
that the court is entitled to have regard to several disparate and
incommensurable features in coming to a decision48. To determine whether a
final winding -up order should be granted the discretion to be exercised by the
court is a discretion in the true sense.
60.3 The court will exercise a judicial discretion where it properly directs
itself to all the relevant facts and (legal) principles49, which are neither
disparate nor incommensurable, and where it discharged the to rationalize the
way it exercised its discretion50 In consideration of the aforesaid, the facts
relevant to the exercise of the court’s discretion are:

43 Kyle v Maritz & Pieterse Inc [2002] 3 All SA 223 (T) at 232; and Paarwater v South Sahara
Investments (Pty) Ltd [2005] 4 All SA 185 (SCA) .
44 (62454/2021) [2023] ZAGPPHC 1147.
45 Afgri Operations Ltd v Ha mbs Fleet (Pty) Ltd 2022 (1) SA 91 (SCA) at para 12.
46 Trencon Construction (Pty) Limited v Industrial Development Corporation of South Africa Limited
and another [2016] JOL 33413 (CC) at par 82 – 97. A discretion in the true sense is sometimes
referred to as a discretion in the strict or narrow sense and a discretion in the loose sense is
sometimes referred to as a discretion in the broad or wide sense. I will adopt the same nomenclature
as the Constitutional Court and refer to these two types of di scretion as a discretion in the true sense
and a discretion in the loose sense.
47 Media Workers Association of South Africa and others v Press Corporation of South Africa Limited
1992 (4) SA 791 (A) at 800E.
48 Knox D'Arcy Ltd and others v Jamieson and ot hers [1996] ZASCA 58, 1996 (4) SA 348 (SCA) at
361I.
49 National Coalition for Gay and Lesbian Equality and Others v Minister of Home Affairs and Others
2000 (2) SA 1 (CC) at para [11].
50 Helen Suzman Foundation v Judicial Service Commission 2015 (2) SA 4 98 (WCC) at par 14 – 16.
60.3.1 whether a recognized ground for liquidation of the respondent
company, as provided for in sections 344 & 345 of the old Companies
Act, had been established on the affidavits;
60.3.2 whether the applicant has the requisite locus standi to apply for
the winding -up of the responde nt company;
60.3.3 whether the court has jurisdiction for purposes of winding - up
the respondent company;
60.3.4 whether the application was brought in the prescribed format
(either Form 2 or Form 2(a)), with a founding affidavit);
60.3.5 whether the affi davit in support of the application contains all
necessary averments such as locus standi of applicant, jurisdiction,
insolvency of the respondent, grounds for winding -up, any such facts
as may have a bearing on the exercise of the court's discretion, such
as security held by the applicant for its claim and assets of the
company, security for costs of the application, that service has been
effected as provided in section 346(4) & 346(4A) of the old Companies
Act, etc.;
60.3.6 whether the application was s erved in the prescribed manner
and notice of the application was given in the prescribed manner to the
Master, the South African Revenue Services; the respondent’s
registered address employees of respondent, and trade union of
employees;
60.3.7 whether an affidavit was filed on behalf of the applicant setting
out how section 346(4A)(a) had been complied with.
60.4 The principles relevant to the exercise of the court’s discretion are:
There are different paradigms of legitimacy for the existence of a company,
however, no company exists for its own sake. The existence of a company
should either serve the interests of its shareholders, creditors, employees (or
their representatives), the State, or the community, and these interests should
be balanced. Where a company’s continued existence no longer serves the
interests of these affected people or entities, or the intere sts are materially
unbalanced, its existence is no longer legitimate. What this means is that a
company in financial distress should not be saved for its own sake, but for the
sake of affected people or entities.
60.5 Where a company’s financial position is so dire that it is no longer able
to continue trading because, (i) its liabilities exceed its assets, or (ii) it cannot
pay its debts as and when they fall due, at least prima facie the existence of
the company no longer serves the interests of affec ted persons or entities and
the company should be wound -up to ensure a fair and orderly distribution of
its assets among creditors.
60.6 Neither the old nor the new Companies Act require a final order to be
preceded by a provisional order. The default po sition is therefore that a final
order should be granted51 unless the court is satisfied, on facts properly
established on affidavit, that the interests of all affected or interested parties
will not be adequately safeguarded if a final winding - up order i s granted, in
which case a provisional order should be granted.
60.7 In practical terms this would mean that when it is established on
the affidavits that:
60.7.1 there are affected or interested persons or entities, without
knowledge of the application ;
60.7.2 with a direct and substantial interest in the liquidation of the
company;
60.7.3 whose legal interests in the company will be prejudicially
affected by a final winding -up order, because the liquidation of the
company cannot be sustained or carried into effect without prejudicing
them; a provisional order should be granted, calling on su ch affected or
interested persons or entities to put forward reasons why the court
should not order the final winding -up of the company.
60.8 I’m emboldened in my view by Items 9(1) & (2) of Schedule 5 of the
new Companies Act which retained the applicat ion of section 346A of the old
Companies Act to the winding -up of companies under the new Companies Act,
and which requires, in addition of the provisional order being served on the
company, service of the provisional order on (i) trade unions;52 (ii) employees
of the company;53 (iii) the South African Revenue Services54 (iv)

51 The position is aligned with the Practice Manuals of the GSJ and the GNP which require an
applicant to seek a final winding -up order in the notice of motion.
52 Section 346A(1)(a) of the old Companies Act.
53 Section 346A(1)( b) of the old Companies Act.
54 Section 346A(1)(c) of the old Companies Act
publication in the Government Gazette and a local newspaper; ( v) notice to all
known creditors by registered post.
60.9 The court may also grant a provisional order where an applicant in
unopposed insolvency proceedings only manages to establish a prima facie
case55 i.e., does not strictly satisfy each of the conditions for the winding -up of
the respondent company a priority.
60.10 On the conspectus of the evidence befor e me, the respondent
company, is the registered owner of only two immovable properties, has no
permanent employees, no trade unions are involved, has no other creditors,
at least on the respondent’s version. The applicant complied with all the
formalisti c requirements in support of this application.

61. In exercising its discretion not to grant a final order the merit of legal certainty
and the like treatment of similarly situated litigants should be emphasized by the
court56. It is inimical to the rule of law, which is a foundational value of the democratic
State57 that cases with singularity of facts should have divergent judi cial outcomes.
Specific rules and criteria, precisely formulated, should guide the court in exercising
its discretion. This will provide legal certainty to the parties, curtail litigation, facilitate
the proceedings, and reduce cost. One of the overall objectives of insolvency law is
after all predictability.

62. There is of course another reason why a final, as opposed t o a provisional,
winding -up order should be the default position in liquidation proceedings. In
liquidation proceedings, once successful, the commencement date is retrospective to
the date the application is issued58 as opposed to sequestration proceedin gs which
commence upon the granting of a provisional sequestration order59 In terms of
section 11 of the Insolvency Act a provisional sequestration order is published. The
issuing of a liquidation application is not published. Accordingly, publication of the

55 Kalil v Decotex (Pty) Ltd [1987] ZASCA 156; [1988] 2 All SA 159 (A), 1988 (1) SA 943 (A) at 976A –
B.
56 Van der Walt v Metcash Trading Limited [2002] ZACC 4; 2002 (5) BCLR 454 (CC); 2002 (4) SA 317
(CC) at para 39.
57 Masetlha v President of the Republic of South Africa and Another (CCT 01/07) [200 7] ZACC 20;
2008 (1) SA 566 (CC); 2008 (1) BCLR 1 (3 October 2007) at para [173].
58 Section 348 of the old Companies Act.
59 Section 10 of the Insolvency Act.
commencement date of sequestration proceedings takes place but publication of the
commencement date of liquidation proceedings don’t. There are dire consequences
for creditors and the public at large who deal with a company after the
commencement date of liquidation, and who may be oblivious to the fact that
liquidation proceedings commenced. Section 341 of the o ld Companies Act provides
as follows:

“(1) Every transfer of shares of a company being wound -up or alteration in
the status of its members effected after the commence ment of the winding -up
without the sanction of the liquidator, shall be void.
(2) Every disposition of its property (including rights of action) by any
company being wound -up and unable to pay its debts made after the
commencement of the winding -up, sha ll be void unless the Court otherwise
orders.”

63. It is therefore imperative that a court curtail proceedings and grant a final
winding -up order, as opposed to a provisional order, unless there are good reasons
to grant a provisional order.

64. In summary, unless there are legally relevant facts that militates against it, the
granting of a final liquidation order should be the de fault position.

65. Considering the facts of the matter at hand, I am of the view that there are no
legally relevant facts that militates against the granting of a final liquidation order.
The applicant complied strictly with all the substantial and pro cedural requirements
of the relevant laws for the respondent to be placed under final winding -up. Should I
exercise my discretion against granting a provisional order I would not exercise my
discretion judicially.

66. It follows that the applicant is e ntitled to a final winding -up order.

67. The applicant employed senior and junior counsel. I am of the view that it was
justified under these circumstances. I am of the view that the respondent’s
opposition to the applicant’s application was mala fide which had no prospect of
success in law. As a result, I will allow the costs of both junior and senior counsel.

CONCLUSION

68. There is no legally sustainable defence(s) to the applicant’s claim for a
winding -up order. There are also no legally relevant facts which can persuade me
not to grant a final order.

69. On a conspectus of all the issues raised I make the following o rder:

69.1 the respondent is placed under final winding -up.
69.2 the cost of the application is cost in the liquidation, to be recovered by
the applicant on a scale as between attorney and client which includes the
cost of senior counsel and junior counsel.
69.3 the cost of opposition of the application is disallowed and not cost in
the liquidation.



ASL VAN WYK
Acting Judge of the High Court
Limpopo Division, Polokwane


APPEARANCES:

HEARD ON : 10 JUNE 2025
JUDGMENT DELIVERED ON : 24 JUNE 2025
This judgment was handed down electronically by
circulation to the parties’ representatives by email.
The date and time for hand -down of the
judgment is deemed to be at 10:00

FOR THE APPLICANT : J HERSHENSOHN SC with him
R DE LEEUW
INSTRUCTED BY : BARNARD & PATEL INCORPORATED
C/O LABUSCHAGNE ATTORNEYS
POLOKWANE

FOR THE RESPONDENTS : G J DIAMOND
INSTRUCTED BY : DIAMOND INCORPORATED ATTORNEYS
POLOKWANE