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IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA

CASE NO: 2023-131314
(1) REPORTABLE: YES/NO
(2) OF INTEREST TO OTHER JUDGES: YES/NO
(3) REVISED: YES/NO.
Signature:
Date: 07/08/2025

In matter between:

ABSA BANK LIMITED Applicant

and

LOUMARLES LANDGOED (PTY) LTD Respondent


JUDGMENT

STONE AJ

[1] The applicant applies for the provisional winding -up of the respondent. The
applicant contends that the respondent is unable to pay its debts , as
contemplated in section 344(f) read with section 345 of the Companies Act,
61 of 1973 (“the 1973 Act ”). As an alternative ground, the applicant asserts
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that it will be just and equitable to place the respondent under provisional
winding-up, as envisaged in section 344(h) of the 1973 Act.

[2] The respondent initially opposed the application on various grounds .1 At the
inception of his argument, counsel for the respondent , Mr de Leeuw (not a
relation to the deponent to the answering affidavit , Mr CAW de Leeuw, with
the same surname) indicated, with reference to the well -known “Badenhorst
rule”2, that he accepted that it was evident from the respondent’s version
that its indebtedness to the applicant was not in dispute3, but rather the claim
amount. As the existence of the debt was not in dispute, he indicated that he
would not persist with such point of opposition, and that he would only focus
his argument on the following contentions:

2.1 That the respondent is factually solvent, and that it is in a position to
pay its debts;
2.2 That the applicant has an alternative remedy to enforce its debts,
rather than seeking the liquidation of the respondent.

[3] He contended that the court should exercise its discretion to either dismiss
the application, or postpone it, for reasons which I deal with infra.

The respondent’s indebtedness to the applicant

[4] As the indebtedness is common cause, the applicant is a creditor of the
respondent, and it has locus standi in this application.


1 This included that the amount claimed by the applicant was disputed, that the applicant failed to
place the respondent on terms, that the application constitute an abuse of process and was made
for an ulterior motive, that the respondent was solvent and in a position to repay it s debts, and that
the applicant has an alternative remedy to enforce its debts rather than seeking the respond ent’s
liquidation.
2 Which stems from Badenhorst v Northern Construction Enterprises (Pty) Ltd 1956 (2) SA 346 (T) at
347-34H-348B, that liquidation proceedings are not to be resorted to where the existence of a debt

is bona fide disputed by a company on reasonable grounds
3 The Badenhorst rule therefore does not find application. See: Imobrite (Pty) Ltd v DTL Boerdery CC [
(1007/20) ZASCA 67 (13 May 2022); 2022 JDR 1554 (SCA) at para [16].

[5] According to the applicant’s version the respondent is indebted to it in an
aggregate amount of more that R3 6 million, plus further capitalised interests
and costs, as follows:

5.1 An amount of R 389 945.34 plus further capitalised interest thereon,
calculated from 28 November 2023 at a prime linked lending rate,
which was 11,75% at the time of the application , being the ba lance
of amounts lent and advanced to the respondent on an overdrawn
cheque account;
5.2 An amount of R15 217 127.37 plus interest thereon from 28
November 2023, at a prime linked lending rate, which was 15,25%
per annum on such date , consisting of unpaid instalments and
accumulated interest in respect of an amount which was lent and
advanced by the applicant to the respondent in terms of a written
term loan agreement.
5.3 Amounts of R10 624 794.06 and R 9 920 458.01 plus interest on
such amounts from 28 November 2023, at a prime linked rate , which
was 15,25% per annum at such date. Such amounts are claimed to
be due to the applicant by ADL Electrical Contractors (Pty) Ltd (In
liquidation)(ADL), respectively in respect of amount s loaned and
advanced by the applicant to ADL on a term loan and on an
overdrawn cheque account , for which debts the respondent bound
itself as guarantor and as surety and co -principal debtor in favour of
the applicant.

[6] The present application was lodged by the applicant in December 2023,
based on all the debts mentioned in paragraphs 5.1 to 5.3 above.

[7] The applicant also instituted an action in this court under case number 2023-
133651, in December 2023 , against ADL as first defendant , the respondent
as second defendant, and against Web ram 11 (Pty) Ltd and the aforesaid
Mr CAW de Leeuw. In such action the applicant claims against the
respondent on the basis that respondent b ound itself as guarantor for
obligations and the indebtedness of ADL to the applicant in terms of a

guarantee agreement , signed on 7 August 2015, and on the basis of a
suretyship dated 22 February 2022, for obligations of ADL to the applicant, in
amounts of R16 million and R4 million respectively. As appears from the
declaration filed in such action dated 23 July 2024, which was attached to
the answering affidavit, the applicant claims amounts of R10 630 356.46 and
R9 275 842.90 respectively from the respondent in such action. It appears to
be based on the same causes as mentioned in paragraph 5.3 above. The
Applicant did not include the claims mentioned in paragraphs 5.1 and 5.2
above in its summons. The action is still pending.

[8] As indicated, the respondent’s counsel did not persist to dispute the
existence of the applicant’s indebtedness, and he did not advance
arguments in the application disputing the correctness of the claimed
amounts, although it was raised on the respondent’s affidavit.

[9] The applicant relies on certificates of balance, in accordance with the
agreements on which it relies, as prima facie proof of the amounts owing.
Although same do not accord in all respects with the amounts set out in the
founding affidavit, it does show the aggregate of the amounts said to be
owing, to be at least the amounts mentioned above , if the interest
implications are considered.

Applicant’s security

[10] The applicant has security for its claims in the form of four mortgage bonds
registered over the respondent’s immovable property, a farm, for
approximately R20 000.00 plus additional amounts.

[11] The bonds were registered over the immovable property known as Portion
11 of the Farm Rietfontein 513, Registration Division KR Province of
Limpopo, 1419,8812 in extent, held by Deed of Transfer: T[...].

[12] The applicant furthermore has security for the aforesaid debts in the form of
a general notarial bond for an amount of R10 million.

Attempts to sell the respondent’s property

[13] The history of the attempts to sell the immovable property of the respondent
is relevant to the question whether the respondent is solvent, to its ability to
pay its debts, the issue of an alternative remedy, whet her a liquidation order
will be just and equitable, and the exercise of the court’s discretion. I
therefore proceed to deal therewith in some detail.

[14] It is not disputed that the respondent and ADL have been clients of the
applicant for many years . The respondent and ADL were part of a group of
companies, referred to by the applicant as the “ADL Group ”. They have
enjoyed facilities with the applicant for years. The respondent and Mr CAW
de Leeuw, inter alia, have provided securities for the debts. Mr CAW de
Leeuw is the deponent to the answering affidavit . When he deposed to such
affidavit, he was a director of the respondent, and was also involved with
ADL.

[15] During argument the Applicant’s counsel , Mr van der Merwe, made me
aware of a judgment of Vorster AJ dated 11 October 2024 (VoLTE)4 wherein
he order ed the provisional sequestration of the sole shareholder of the
respondent, the Andre de Leeuw Famile Trust, and the provisional
sequestration of Mr CAW de Leeuw (the deponent to the answering affidavit
in the present application) together with his spouse, with whom he is married
in community of property. The Applications were made by VoLTE (Pty) Ltd It
was common ca use in that application that ADL owes such company an
amount of about R18 000 000.00, and that the trust and Mr de Leeuw bound
themselves a s sureties and co -principal debtors to Voltex(Pty) Ltd for the
liabilities of ADL. Some contents of the Voltex judgment are relevant to the
present application. I will refer thereto below.


4 Voltex (Pty) Ltd v Trustees f or the Time Being of the Andre De Leeuw Familie Trust NO and Others
(2023/071111:2023/074271) [2024] ZAGPPHC 1382 (11 October 2024); 2025 JDR 0652 (GP).

[16] It appears from such judgment that ADL fell in arrears with payments , and
Voltex (Pty) Ltd obtained judgment against the sureties on 25 February
2019, after a settlement agreement was not complied with by ADL. Vorster
AJ states that ADL was finally wound up on 23 January 20245.

[17] The applicant’s manager who deposed to the founding affidavit in t he
present application , avers that approximately from 2018 the ADL Group
started to have financial difficulties.

[18] In Voltex Vorster AJ mention ed an affidavit which was filed by the said Mr
CAW de Leeuw, dated 6 June 2023, wherein he inter alia averred that ADL
had always been willing to pay its debts, and that various active and
continuous attempts have been made previously to sell the property of the
respondent, for such proceeds to be utilised to settle the mortgage bond
over the property (in favour of the applicant) , as well as the debts of ADL. It
is also stated in such judgement that Mr de Leeuw submitted in that matter
that the successful sale of the farm was inevitable and in the process of
being finalised.6

[19] Mr de Leeuw also confirms in the answering affidavit in the present
application that the respondent has engaged in various negotiations in an
attempt to sell the property, based on various negotiations between the
parties to settle the applicant’s claim.

[20] Early indications that the sale of the respondent’s farm was considered as a
means to settle debts owing to the applicant by ADL appear from a facility
agreement concluded on 21 June 2017, which is an annexure to the
applicant’s declarati on in the abovementioned acti on (the declaration is
attached to the respond ent’s answering affidavit ). In such agreement the
following was included as a special condition:


5 Id para 3.6.
6 Id para 5.

“ Lou Marles Landgoed (Pty)Ltd will be given time until the end of
September 2017 to dispose the farm or confirm to us that the farming
operation is breaking even, failing which the bank will have no option but to
call up the facilities as the bank cannot justify the lending in this name Lou
Marles Landgoed (Pty) Ltd. The balance sheet is insolvent.”

[21] Vorster AJ recorded in Voltex7 that it was evident from the pap ers in th e
applications that served before him that the respondent has been attempting
to sell the farm since 2018.

[22] It appears from the replying affidavit in the p resent application , and from
correspondence between the parties referred to , that since 2018 the
respondent had repeatedly indicated to the applicant that it would sell its
property, in order to pay what was owing to the applicant . The following
events appear therefrom:

22.1 That the respondent’s then director, Mr de CAW Leeuw, engaged
with the applicant in December 2018, regarding an amount to cancel
the bonds over the respondent’s immovable property.
22.2 An offer to purchase of such property , was provided by email to the
applicant by ADL on 27 August 2019.
22.3 No transfer realised, however, and communications ensued during
2020 and 2021 between the parties inter alia regarding an amount
that would be acceptable to settle the indebtedness full and final.
22.4 By October 2021 the property had not been sold. On 9 March 2022
the respondent confirmed in an email to the applicant that the
property was auctioned on 12 April 2022, bu t that the bids were not
as expected.
22.5 On 31 October 2022 Mr de Leeuw sent an email to the applicant’s
attorney, referring to an offer that was received for the property.


7 Id para 6.1.

[23] In his judgment in Voltex8 Vorster AJ also mentions that an offer to sell the
farm was signed on behalf of the respondent in October 2021 (which , he
indicated, was not signed by the purchaser) for a total purchase price of
R43 000 000.00. R 33 2150 000.00 of this amount was for the land, R
6 000.00 for movable property and R 1 700 000.00 for game. In the founding
affidavit in the present application, the applicant ’s manager also says that
the respondent held out to the applicant that it had sold its property for R43
million. A sale for Such amount evidently did not materialise, as the ADL
Group and the Respondent thereafter held out to the applicant that it would
be paid from a nother transaction in terms of which the property was sold for
R48 million.

[24] A copy of an offer to purchase, signed on 23 March 2023, is attached to the
answering affidavit. The purchaser is indicated as Babanje Trading (Pty) Ltd.
The offer for R48 million included a price of R34 900 000.00 for the farm with
improvements, R8 million for movables such as tractors, farming and feedlot
equipment, and R5,1 million for 300 heifers. It was subject to a suspensive
condition that the purchaser obtains approval of a bond within 45 days.

[25] Vorster AJ9 also refers to a sale in March 2023 for the same amo unt, which
appears to be the same offer. Another offer to purchase, by the same
purchaser, is also included in the papers of the respondent , s igned on 14
July 2023, for the same price. It was subject to a suspensive condition that
the purchaser obtain approval in principle for a loan within 60 days. The
respondent confirms in its answering affidavit that the sale for R48 million did
not proceed. The applicant confirm s that no payments have been
forthcoming.

[26] The last offer referred to in the respondent’s answering affidavit was an offer
for the sale of the shares in the respondent , for an amount of
R44 000 000.00. Such agreement was signed on 31 May 2024. In the

R44 000 000.00. Such agreement was signed on 31 May 2024. In the
answering affidavit the hope is expressed that such sale would succeed, and

8 Id para 6.2.
9 Id para 7.1.

that it would yield a substantial amount of funds from which the applicant’s
claims could be settled. This sale has apparently not succeeded either. The
purchase consideration mentioned in the memorandum of agreement for the
sale of shares shows that it was payable on 31 May 2024.

[27] From proposals made by the respondent’s counsel in argument, regarding a
further process to sell of the property , with which I deal below, it is evident
that such transaction also did not succeed. There is no clear indication on
the pap ers that such offer had succeeded or what transpired with such
transaction.

[28] The applicant contends that the sale was not a bona fide attempt to dispose
with the property.

[29] In the judgment of Vorster AJ, the following is said in respect of the sale of
the shares10:

“On the version put forward by the Respondents the value of the shares
would probably equate to the net asset value of Lou Marles which would
in turn equate to the likely proceeds emanating from the sale of the farm
minus the amount of the mortgage bond. As ABSA has already instituted
proceedings against Lou Marles for a winding-up order, the effective date
of the winding-up has already arrived on the assumption that the winding -
up order will be granted. Any disposition of the property by way of a sale
in execution will accordingly be void in terms of section 341(2) of the
Companies Act 61 of 1973.”

[30] The Applicant criticised the viability of such agreement, saying that it was
unbusinesslike, and that it is questionable whether a prospective buyer with
knowledge of the debts would have proceeded to purchase shares in the
respondent while the company was more than R36 million in debt .
Furthermore, the offer envisaged the release of multiple sureties , and refers

10 Id par 43.

to a compromise or scheme , which the applicant’s manager says she is not
aware of. In any event, the shareholder (the aforesaid trust ), has been
sequestrated. Even if such sale had proceeded, it can be expected that the
liquidator of the shareholder may have a claim to the proceeds.

[31] In summary, there is no indication on the respondent’s pap ers that any
historic sale of the land or shares has been successful , despite repeated
attempts to sell the land, which attempts have been ongoing since at least
2018. The respondent’s papers do not show a clear and successful ongoing
transaction for either the sale of the property nor for the shares. There are
also no indications on the papers that any further offer to purchase the
respondent’s immovable property (which the respondent relies on as the
means to settle its debts towards the applicant) was made after July 2023.

Section 344(f) read with section 345 (1)(a)(i) and 345(1)( c) of the Companies
Act 61 of 1973 (‘The 1973 Act”)

[32] The applicant firstly relies on the provisions of subs ection 344(f) of the
Companies Act, 61 of 1973 (the 1973 Act) , which provides that a company
may be wound up by the court if it is unable to pay its debts as described in
section 345 of such act.

[33] In terms of section 345(1)(a)(i) of the 1973 Act , a company is deemed to be
unable to pay its debts if a creditor with a claim of at least R100 has served
upon the company, at its registered office, a demand requiring the company
to pay the sum so due, and the company has for a period of three weeks
thereafter neglected to pay the sum, or to secure or compound for it to the
reasonable satisfaction of the creditor.

[34] A letter was sent to the respondent by the applicant’s attorneys, dated 21
September 202 2. It was served by the Sheriff at the registered address of
the respondent on 26 September 202 2. In terms thereof the respondent was
called upon to make payment to the applicant of amounts which were then

called upon to make payment to the applicant of amounts which were then
due and owing , within three weeks , failing which an application for the

winding-up of the respondent would be made . In my view this constitutes a
demand in terms of section 345(1)(a)(i).

[35] In Lamprecht v Klipeiland (Pty) Ltd11 the Supreme Court of Appeal held:

“I have already found that the agreement (that) was made an order of court
by Kruger AJ was valid. This leads me to find that the respondent conceded
that the applicant has locus standi, that he was a creditor for a sum of no
less than R100 and further that it was due and payable. There is no
dispute that although the section 345(1)(a) demand was served on the
respondent, it has not paid any amount nor secured or compounded any
amount to the reasonable satisfaction of the appellant. To my mi nd, the
jurisdiction requirements set out in section 345(1)(a) have been met. As
stated by Malan J (as he then was) in Body Corporate of Fish Eagle v
Group Twelve Investments 2003 (5) SA 414 (W) at 428 B – C:
‘The deeming provision of s345(1)(a) of the Co mpanies Act creates a
rebuttable presumption to the effect that the respondent is unable to pay its
debts ( Ter Beek’s case supra at 331F). If the respondent admits a debt
over R100, even though the respondent’s indebtedness is less than the
amount the appl icant demanded in terms of section 345(1)(a) of the
Companies Act, then on the respondent’s own version, the applicant is
entitled to succeed in its liquidation application and the conclusion of law is
that the respondent is unable to pay its debts.”

[36] The respondent has not proved that it paid the debt within three weeks, or at
all, pursuant to such demand, and as indicated above .i The respondent is
deemed to be unable to pay its debts, in terms of section 344(f) read with
section 345(1)(a)(i).12

[37] The applicant also relies in the alternative on section 345(1) (c) of the 1973
Act, which provides that a company is deemed to be unable to pay its debts

11 [2014] 4 All SA 279 (SCA); 2014 JDR 1890 (SCA) at para [16].

11 [2014] 4 All SA 279 (SCA); 2014 JDR 1890 (SCA) at para [16].
12 Electrolux v Rentek Consulting 2023 (6) SA 452 (WCC) at par [31].

if it is proved to the satisfaction of the court that the company is unable to
pay its debts.

[38] It is confirmed in the applicant’s founding affidavits that no payment has
been forthcoming, despite demand. In its replying affidavit it stated that the
last payments made in respect of the causes of action relied on by the
applicant (as mentioned in paragraphs 5.1 to 5.3 above) were respectively
on dates in 2018 and 2020.

[39] It has been held that , when considering whether a respondent company is
unable to pay its debts as contemplated in section 345(1)(c) read with
section 344(f), evidence of a failure by such company to pay on demand a
debt which has become due for payment , is regarded as cogent prima facie
proof that the company is unable to pay its debts.13

[40] In this regard, the following was said in Standard Bank of South Africa Ltd
v R-Bay Logistics CC14:

“There has been judicial debate about whether, for the purpose of Section
344(f) of the Old Companies Act, it is possible for the court to conclude,
upon evidence of actual insolvency, that a company is ‘unable to pay its
debts’. Certainly, proof of the actual insolvency of a respondent might well
provide useful evidence in reaching the c onclusion that such company is
unable to pay its debts, but that conclusion does not necessarily follow. On
the other hand, if there is evidence that the respondent company is
commercially insolvent (i.e. cannot pay its debts when they fall due), that is
enough for a court to find that the required case of section 344(f) has been
proved. At that level, the possible actual solvency of the respondent
company is usually only relevant to the exercise of the court’s residual
discretion as to whether it should gr ant a winding -up order or not, even

13 Absa Bank Limited v Crossmoor Transport (Pty) Ltd [2020] JOL 4781 ( KXP); 2020 JDR 1501 at
para 41.
14 2013 (2) SA 295 (KZD) at para [27]

though the applicant for such relief has established its case under section
344(f).”15

[41] In Boschpoort Ondernemings (Pty) Ltd v Absa Bank 16, the Supreme
Court of Appeal held that a solvent company for the purposes of the
Companies Act, 71 of 2008 (the 2008 Act) is a company that is commercially
solvent, and that commercial insolvency of a company is a ground for its
liquidation. In Murray NO and Others v African Global Holding s (Pty) Ltd
and others 17 the Supreme Court of Appeal held that a commercially
insolvent company is liable to be wound up in terms of the 1973 Act and may
not be wound up in terms of the Companie Act 71 of 2008 (the 2008 Act).

[42] In Murray18, the Supreme Court of Appeal described the test for commercial
insolvency of a company as:

“whether the company ‘is able to meet its current liabilities, including
contingent and prospective liabilities as they come due’.

[43] The Supreme Court of Appeal also referred with approval to Absa Bank v
Rhebokskloof (Pty) Ltd and others 19 where the following was said in
respect of commercial insolvency:

“Turning to the merits of the matter, Mr Gauntlet contended that Absa was
entitled to a final winding -up order on the basis that Rhebokskloof was
‘commercial insolvent’.
The concept of commercial insolvency as a ground for winding up a
company is emine ntly practical and commercially sensible. The primary
question which a Court is called upon to answer in deciding whether or not
a company carrying on business should be wound up as commercially
insolvent is whether or not it has liquid assets or readily r ealisable assets

15 See also Rosenbach & Co v Singh Bazaars (Pty) Ltd 1962 (4) SA 593 (D) at C-G
16 2014 (2) SA 518 (SCA) at paragraph [17].
17 2020 (2) SA 93 (SCA) at paragraph [31]
18 Id
19 1993(4) SA 436 (C) at 440 F-H

available to meet its liabilities as and when they fall due to be met in the
ordinary course of business and thereafter to be in a position to carry on
normal trading -in other words, can the company meet current demands on
it and remain b uoyant? It matters not that the company’s assets , fairly
valued, far exceed its liabilities: once the Court finds that it cannot do this,
it follows that it is entitled to, and should, hold that the company is unable
to pay its debts within the meaning of s 345(1)(c).”

Is the respondent unable to pay its debts?

[44] The respondent’s counsel contended that the applicant is factually solvent .
He relied on the sale values of the abovementioned failed offers, submitting
that the respondent indeed has readily realisable assets with a value of at
least R 48 million at its disposal, from which it would be able to satisfy the
applicant’s debt and thereafter continue in existence. He contended that the
aforesaid offers of sal e of the respondent’s assets demonstrate that the
value of the respondent’s properties exceed the total value of the applicant’s
claims. He submitted that the sale of the respondent’s property is inevitable,
and that the claims of the applicant will then be settled. He submitted that the
respondent is not commercially insolvent and the application against the
respondent should fail on this basis alone. He argued that the respondent
will be able to sell its property , pay all its debts to the applicant, and b e able
to continue with the balance of the proceeds from such a sale to the benefit
of its members and employees.

[45] Referring to the test for commercial insolvency as set out in Rhebokskloof20
and in Rosenbach21, he contended that the respondent ha s readily
realisable assets.

[46] It may or may not be that the assets of the company exceed the value of its
debts, but this has not clearly been proved on the papers. No valuation of

20 Id
21 Supra n15.

the property of the respondent has been provided.22 and when called upon
by the applicant to provide its financial statements, the respondent failed to
provide same, stating in its answering affidavit that the applicant was not
entitled thereto.

[47] The fact that attempts have been made for many ye ars to obtain a selling
price which would cover the claims of the applicant , and the fact that offers
have been received for amounts which may have been sufficient to pay the
debts owing to the applicant, may well be indicative that the respondent’s
property has a high value . The failures of various transactions and attempts
to sell the property , the inability of a purchaser to obtain finance, and the
length of time since the amounts claimed fell due, may on the other hand
rather indicate that the value of the property m ay not be as high as the
amounts of the offers suggest , and that it may not exceed the value of the
applicant’s claims . According to the applicant, such debt was already in
excess of R36 million in November 2023 , with further interest running, if
regard be had to the amounts in paragraphs 5.1 to 5.3 above. Furthermore,
when considering the abovementioned breakdown of the purchase
considerations included in the failed offers to purchase (for the amount s of
R43 million and R 48 million), it appears that the value of the land itself may
well be substantially lower than R48 million, and even lower than the amount
claimed by the applicant.

[48] It is not necessary to make a final finding as to the probable value of the
respondent’s property, and I am not in a position to do so in the absence of
better evidence regarding the value. But even if I accept that the actual value
of the respond ent’s assets exceed s its liabilities, the question remains
whether the respondent is considered to be commercially insolvent, and
unable to pay its debts.

[49] From the aforesaid authorities it follows that, even if the respondents assets

[49] From the aforesaid authorities it follows that, even if the respondents assets
exceed its liabilities, if it is unable to pay its debts when it fall due, and if it

22 FirstRand Bank Ltd v Mahem Verhurings CC 2017 JDR 0192 (GP) at para [21].

does not have liquid or readily realisable assets to meet its current demands,
it will be considered to be commercially insolvent and it will be deemed to be
unable to pay its debts.

[50] Applying the test as set out in the authorities mentioned above, I am of the
view that the available evidence overwhelmingly show that the respondent is
indeed commercially insolvent , and it had been so for some time . Its
outstanding debts have been due and unpaid for years , respectively since
2018 and 2020, or at least since the demand in 2022. There is no evidence
to show the contrary . Respondent’s continuous failure to make payment of
its debts, leave no room for a finding that the respondent is able to pay its
debts.

[51] The “primary question” referred to in Rhebokskloof, whether the respondent
has “readily realisable” assets, available to meet the respondent’s liabilities
“as and when they fell due to be met in the ordinary course of business and
thereafter to be in a position to carry on normal trading ” could evidently not
have been answered in the affirmative for years. The repeated failures to sell
the assets, also do not suggest that same are readily realisable . The
evidence of a sale of shares agreement also cannot assist the respondent ,
as no clear evidence was presented that the conditions of such sale were
met or that it came to fruition. Surely, if it did, one would have expected the
respondents to put such evidence before the court.

[52] I therefore find that , even if it may be factually solvent, the respondent is
commercially insolvent, and that it is deemed to be unable to pay its debts.

[53] I find that the applicant has made out a case that the respondent is unable to
pay its debts, both in terms of subsection 345(1)(a) and subsection 345(1)(c)
read with subsection 344(f) of the 1973 Act.

An unpaid creditor’s right to proceed with winding -up proceedings , and the
court’s discretion

[54] In terms of section 347(1) of the 1973 Act, this court has a discretion to grant
or dismiss any application for liquidation (under section 346) or to adjourn
the hearing of the application conditionally or unconditionally, or to make an
interim order or any other order as it may deem just. As indicated below,
such discretion is however very limited where a creditor company has a debt
which it cannot pay. In such instance, a creditor is entitled to a winding -up
order ex debito justitiae.

[55] In Samuel & Others v President Brand Gold Mining Co Ltd 23, the then
Appellate Division confirmed a creditor’s entitlement to a winding -up order
under circumstances where a company is unable to pay its debts. Trollip JA
said the following:

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

[56] In Rhebokskloof24, Berman J held:

“Notwithstanding this the court has a discretion to refuse a winding -up
order in these circumstances but it is one which is limited where a creditor
has a debt which the company cannot pay; in such case the creditor is
entitled, ex debito justitiae, to a winding-up order.”25
He also held: 26:
“There is, however to my mind no justification for exercising that narrow
discretion open to me in favour of the company, and the suggestion that a
mortgage bond be passed by the company over its property does not
warrant a finding that this would constitute an asset readily available or
even an asset sufficiently available as to justify ta refusal to grant a
winding-up order. Nor is there any obligation on ABSA to execute against
the company’s immovable property or t o institute provisional sentence

23 1969 (3) SA 629 (A) at 662 E-F.
24 Supra n19 at 441F-I, and 440F-H.
25 Berman J referred in this regard to Samuel supra at 662F.
26 At 441G-I

proceedings on the basis of security held; nor can a court insist on ABSA
doing so; nor should the court exercise its limited discretion against Absa
because it chooses to seek a final winding-up order.”

[57] In Rhebokskloof the respondent company was the owner of an extremely
valuable farm valued by a registered valuer at R 25 million. The company
had an overdraft with the applicant in that matter of a substantially lesser
amount than the value. Berman J held tha t the asset was however not to be
regarded as liquid. A final liquidation order was granted.

[58] In Hammel v Radiocity Contact Centre CC 27, the respondent company
contended that the applicant should have proceeded with another remedy,
for example to issue a su mmons to collect debt owed. Dlodlo J however
confirmed that it has been established that a creditor has an unfettered right
to choose his form of execution, one of which is to wind up the debtor, and
that a creditor which has a debt ex debito justitiae is entitled to a winding up
order. Dlodlo J held that such creditor is not bound to give the creditor time
to realise funds.

[59] In Rosenbach28 Caney J held, with reference to a commercially insolvent
company:

“The proper approach is deciding the question whether a company should
be wound-up on this ground appears to me, in light of what I have said, to
be that, if it is established that the company is unable to pay its debts, in
the sense of being unable to meet the current demands upon it, its day -to-
day liabilities in the ordinary course of its business, it is in a state of
commercial insolvency; … If the company is being unable to meet the
current demands upon it, its day -to-day liabilities in the ordinary course of
its business in fact solvent, in the sense of its assets exceeding its
liabilities, this may or may not, depending upon the circumstances, lead to
a refusal of a winding -up order, the circumstances particularly to be taken

a refusal of a winding -up order, the circumstances particularly to be taken

27 (13778/2008) [2008] ZAWCHC 76 (12 December 2008); JDR 1525 (C) at paragraph [15].
28 Supra n15 at 597 at C-G.

into consideration against the making of an order are such as to show that
there are liquid assets or readily realisable assets available out of which
or the proceeds of which, the company is in fact able to pa y its debts.
See F Chandlers Limited v Dealesville Hotel (Pty) ltd 1954 (4) SA 748
(O) at 749.
Nevertheless, in exercising its powers, the court will have regard to the
fact that ‘a creditor who cannot obtain payment of his debt is entitled as
between himself and the company ex debitio justitae to an order if he
brings this case within the act. He is not bound to give time.”

[60] In Absa Bank v Newcity Group (Pty) Ltd 29, a business rescue application,
it was questioned whether, since the introduction of the 2008 Act, it was still
good law to speak of an entitlement ( ex debito justitiae ) to a winding -up
order simply because the applicant is an unpaid creditor. The Court held that
“mere illiquidity, capable of being overcome within a reasonable time, should
be a trump card to resist liquidation”.

[61] Henochsberg30 indicates, with reference to Newcity31 that there appears to
be a movement away from the ex debito justitiae principle in situations where
a company is commercially insolvent but factually solvent.

[62] In Afgri Corporation Limited v Hamba Fleet (Pty) Ltd 32, decided after
Newcity, the Supreme Court of Appeal reaffirmed that, generally speaking,
in liquidation proceedings an unpaid creditor has a right, ex debitio justitiae
to a winding -up order against a company that has not discharged its debt.
The principle was reaffirmed the that the refusal of a winding -up order under
such circumstances entails the exercise of a very narrow discretion “that is
rarely exercised and then in special or unusual circumstances only”.33 It is for
the respondent to have established such specual circumstances.34

29 [2013] 3 All SA 146 (GSJ); 2012 JDR 1413 (GSJ) at para [31].
30 Henochsberg on the Companies Act 71 of 2008, Volume 2, at APPI-42.
31 Supra n29.

30 Henochsberg on the Companies Act 71 of 2008, Volume 2, at APPI-42.
31 Supra n29.
32 2022 (1) SA 91 (SCA) at paras [12]–[13]. See also Business Partners Ltd v Sophia
Property Investments (Pty) Ltd [2021] JOL 50156 (GP); 2021 JDR 0594 at para [12]-[13].
33 Afgri supra n32 at para [12].
34 FirstRand Bank Limited v Evans 2011 (4) SA 597 (KZN) para [27].

[63] The Supreme Court of Appeal in Afgri 35held, with reference to Newcity, that
different considerations may apply where business rescue proceedings are
considered in terms of part A of Ch 6 of the 2008 Act, but that such
considerations d id not apply in the Afgri application , which was an
application for the final winding-up of a company. In the present mater, there
is no business rescue application, nor an indication that such application
would be made.

[64] In considering the court’s discretionary power in the context of winding -up
applications, the court in Imobrite (Pty) Ltd v DTL Boerdery CC 36 referred
to established caselaw, summarising the legal position as follows:

“In Afgri Operations Ltd v Hamba Fleet (Pty) Ltd, this court reaffirmed that
an unpaid creditor has a right, ex debit o justitiae to a winding -up order
against a company that has not discharged its debt. Notably, it also
reaffirmed the trite principle that the refusal of a winding -up order under
circumstances entails the exercise of a narrow discretion. The following
observations in Boschpoort Ondernemings (Pty) Ltd v Absa Bank Ltd ,
appositely illustrate that the mere fact that there may be more value than the
claim is not, without more, sufficient to sw ay a court towards exercising the
discretion in favour of a debtor:
“[17] That a company’s commercial insolvency is a ground that will justify
an order for its liquidation has been a reality of law which has served
us well through the passage of time. T he reasons are not hard to
find: the valuation of assets, other than cash, i s a notoriously elastic
and often highly subjective one; the liquidity of assets is often more
viscous than recalcitrant debtors would have a court believe; more
often than not, creditors do not have knowledge of the assets of a
company that owes them mon ey – and cannot be expected to have;
and courts are more comfortable with readily determinable and

and courts are more comfortable with readily determinable and
objective tests such as whether a company is able to meet its current

35 Afgri supra n32 par [12].
36 Supra n3 at para [20].

liabilities than with the abstruse economic exercises as to the
valuation of a company’s assets.’
In summing up, it bears emphasizing that the exercise of a
discretion in favour of not granting a liquidation order must be based
on a solid factual foundation.” 37

[65] The position is that t he applicant is ent itled to seek execution by way of
liquidation ex debito justitiae. It is not compelled to seek execution by way of
other means. The court only has a very narrow discretion to refuse an order
for the winding-up of the respondent, who has failed to pay its debts , and is
commercially insolvent . If such discretion is exercised it must be on solid
grounds, and it can only be done if it is found that special or unusual
circumstances exist to do so.

Other available means to satisfy the debt

[66] Relying on the legal position as set out in the authorities referred to, that an
unpaid creditor is generally entitled ex debito justitiae to a winding-up order,
and the narrow discretion to refuse a winding -up order, Mr van der Merwe ,
who appeared for the applicant, contended that this court should not
exercise its discretion to refuse or postpone the application.

[67] Respondent’s counsel submitted that, given the discretion that the court
retains in terms of section 347 of the 1973 Act, the winding-up sought should
be refused, on a consideration of the following facts:

67.1 The respondent owns an immovable property with a substantial
value and which value exceeds the claim of the applicant by a
substantial amount;
67.2 The applicant has already commenc ed with action proceedings
against the respondent seeking payment of a debt and the
enforcement thereof; and

37 See also Rosenbach surpra n15.

67.3 The applicant therefore has an alternative remedy it can pursue
which is less invasive and which will allow the payment of the
applicant’s claim, and which is appropriate in the circumstances.

[68] In the alternative , he submitted that, should this court not be inclined to
refuse the winding-up, the matter should be postponed, for the sole purpose
of allowing a sufficient opportunity to finalise the sale of the property, which
he submitted was in progress.

[69] As indicated above, the re is no clear indication on the pa pers that a viable
ongoing sale is in existence, and I am unable to find on the papers that the
property of the respondent is actually in the process of being sold.

[70] Counsel for the respondent submitted that the ex debito justitiae principle
does not detract from the fact that the court still has a discretion, which
discretion should be exercised judicially given the facts before it, in line with
the court’s residual discretion in terms of section 347.

[71] In view of the indication by the respondent’s counsel at the hearing that he
would not proceed to dispute the indebtedness , and that his contentions
would be limited to the arguments referred to above 38, I enquired from him,
for clarification, whether that would mean that the respondent would submit
to judgment in favour of the applicant. The respondent’s counsel then
requested an opportunity to take instructions, and he intimated that the
respondent would indeed consent to judgment. He suggested that this court
could exercise its discretion by postponing the application for a period of 6 to
12 months, and that the court can then make such postponement subject
thereto that the respondent consents to judgment within a period of time and
that the applicant then may take judgment on the basis of such consent. He
furthermore suggested that a public sale of the property can then be
conducted, as may be agreed between the parties by public auction , by an

conducted, as may be agreed between the parties by public auction , by an
auctioneer chosen by the applicant. He also argued that the court could

38 Para 2

impose such, or other less severe conditions, rather than ordering a
provisional liquidation which would be to the benefi t of the company and
employees.

[72] It was however pointed out by counsel on behalf of the applicant that the
instruction to consent to ju dgment emanated from the aforesaid Mr CAW De
Leeuw, who had already been provisionally sequestrated at the time (as is
evident from the Voltex judgment), and that it was therefore doubtful whether
such instructions constituted a proper mandate from a director of the
respondent. He argued that this court is not in a position to grant judgement,
as all relevant facts were not before the court as required in terms of rule
46A which are peremptory when judgment is to be granted for the execution
in respect of immovable property. He insisted that the applicant is entitled to
a liquidation order.

[73] This court is not in a position , and it does not intend to consider granting a
judgment in these proceedings . In the first place, there is no application or
action for judgment before me, and the court is indeed not in a position to
consider, in the absence of all relevant facts, for example the requirements
of rule 46A of the Uniform Rules . The abovementioned existing action also
does not cover all the debts. Furthermore, as is evid ent from the
abovementioned authorities the court cannot force the applicant to proceed
with another way of execution. The court cannot make an agreement for the
parties, nor force them into a process to agree on a n execution process to
sell the property.

[74] What does require consideration is whether this court should still, in the
exercise of its r discretion in terms of Section 357 (1) of the 1973 Act39, make
an order to dismiss or postpone the application , to allow the respondent a
further opportunity to sell its land.


39 Grenco Projects v Hermanus Esplanade 2024(6) SA 500 (WCC) at paras [90]–[91].

[75] Counsel for the respondent submitted that although section 347(2) of the
1973 Act applies to applications launched by members of a company, the
principles th erein should find equal application to an application by a
creditor, which has alternative remedies available, and which remedies it has
indeed commenced with, similar to what the applicant has done in casu.
Subsection 347(2) reads:

“Where the application is presented by members of the company and it
appears to the Court that the applicants are entitled to relief, the Court
shall make a winding -up order, unless it is satisfied that some other
remedy is available to the applicants and that they are acting
unreasonably in seeking to have the company wound up instead of
pursuing that other remedy.”

[76] In my view, the fact that a reference to an alternative remedy is only included
in subsection 347(2) in respect of applications by members of a company,
the specific proviso in such subsection (that a court should make a winding -
up order unless it is satisfied that some alternative remedy exists) should be
interpreted to apply only in respect of applications by members, and not as a
provision that find application to all winding -up applications. To apply section
347(2) in the way propounded by respondent’s counsel, would in my view
not be in accordance with the prevailing case law40, wherein it was held that
the ex debito jusitiae principle finds application, even where applicants who
were creditors of a company had alternative remedies. A plain reading of the
normal wording used in section 347 as a whole, does not support such an
interpretation, and the inclusio unius exclusio alterius maxim of
interpretation41 of statutes would in my view also inform a different
interpretation of subsection 347(2) as contended for by respondent’s
counsel. This, however , does not mean that the court may not, in the
exercise of its discretion, take cognisance of the existence of alternative

exercise of its discretion, take cognisance of the existence of alternative
remedies. It however remains a very limited discretion as indicated, and it is
not subject to the proviso in subsection 347(2).

40 As summarised in Afgri supra n32 and Imobrite supra, n3.
41 2021 (3) SA 1 (CC) at para [50].

[77] Respondent’s counsel submitted that , as the applicant has already
commenced with proceedings to obtain judgment , the applicant will be able
to realise the respondent’s immovable property, and all farming equipment
situated thereon. This, he contended, would be a less invasive remedy at the
applicant’s disposal, which will ensure that the applicant receives payment of
its claims, yet still allow the respondent to retain the surplus from such sale,
and continue in its existence and with other commercial activities.

[78] He relied on three decisions dealing with applications for sequestration ,
where it was considered whether a sequestration will be more to the
advantage of creditors than in a sale in execution. He referred to Gardee v
Dhanmanta Holdings & Other42, which contain the following remarks:

“A feature … which one notices immediately is that, as far as can be
gathered, the applicant is the first respondent’s sole creditor. There is
certainly no hint of any other. These proceedings thus lack resemblance
to the typical sort, in which the debtor has a variety of creditors but
insufficient assets to meet all their competin g claims, and sequestration
seems likely to benefit them as a group by ending the danger that some
may be preferred to others and ensuring instead that the proceeds are
shared fairly. There is, no reason in principle why a debtor with only one
creditor sh ould not have his estate sequestrated. But the potential
advantages of sequestration in that situation are inherently fewer, and the
case for it is correspondently weaker. Then it is really no more than an
elaborate means of execution and, because of its costs, an expensive one
too.”

[79] He referred me to Mamacos v Davis43 where Burger J stated the following:


42 1978 (1) SA 1066 (N) at 1068 H–1069 A.
43 1976 (1) SA 19 (C)

“This (the attached ad sale of the property) would be to his own advantage
in that he does not have to incur the further costs of sequestration,
especially as he already has a judgment of the Court.”

[80] He also relied on Waterkloof Boulevard Homeowners Association
(Association Incorporated under Section 21) v Yusuf and Another 44
where the court held as follows at paragraph [14]:

“The applicant failed to make out a case that sequestration proceedings
would benefit itself more than a sale in execution. Counsel submitted that
it would probably take another year to obtain an order in terms of rule 46
of the Uni form Rules of Court. This is a consequence of the applicant’s
decision to execute its judgment debt through a sequestration
application.”

[81] In my view the last mentioned three decisions are to be distinguished from
the present matter , as it pertained to sequestration proceedings, where an
advantage to creditors is to be considered. As such i t cannot serve as
authority in liquidation proceedings. In applications in terms of section 344 of
the 1973 Act, it is not part of the case an applicant must make out c to show
an advantage to itself or to other creditors.45

[82] Counsel for the respondent still argued that an aspect for consideration in
exercising the court’s discretion, is that the costs to realise the respond ent’s
property in a liquidation will be significantly higher than in a liquidation, as a
liquidator is entitled to 3% and an auctioneer will also in l iquidation
proceedings typically be entitled to 10% commission. He mentioned that
only 3% would be payable in an execution by the Sheriff . He therefore
contended that a saving can be achieved if the property is not sold in
liquidation circumstances, which he submitted would also benefit the
applicant.


44 1976 (1) SA 19 (C)
45 Securefin Ltd v KNA Insurance and Investment Brokers [2001] 3 ALL SA 15 (W) at 27.

[83] Mr van der M erwe on the other hand contended that at an auction in
liquidation, the actual commission payable was speculatory. If an auction is
held by a liquidator, it may well be less. He submitted that the liquidator has
the opportunity to negotiate commission with an auctioneer, and that it may
even be that a purchaser at an auction will be required to pay the
auctioneer’s commission.

[84] Mr van der Merwe also relied thereon that a liquidator is in a far better
position to dispose of an asset of the kind which features in this application ,
as an execution sale by a sheriff has many disadvantages, including:

84.1 The sale is at the sheriff’s offices, and not at the pr emises where
bidders, on site, can be stimulated to make attractive bids.
84.2 The sheriff is not able to allow or assist a prospective bidder to
inspect the property. Prospective bidders must consequently
participate in the bidding process completely blindfold ed, without
knowing what they would purchase, except for a very broad and
basic description of the nature of the property.
84.3 The advertisement process followed by a sheriff is completely
inadequate and ineffective. Advertisement s appear in small print at
the back of newspapers.
84.4 There is a very high frequency in the cancellation of execution sales
conducted by a sheriff. Consequently, prospective bidders are loathe
to attend a sale by the sheriff, as they sometimes have to put in a lot
of effort to attend the sale, only to be informed upon their arrival that
the sale has been cancelled.
84.5 The sheriff cannot deal with occupiers occupying the property and
such occupation can be a significant factor which may influence the
bidding process negatively.

[85] Mr van der Merwe further submitted that a liquidator will be far better
equipped to achieve a better price for the realisation of the property falling
within the winding-up, for the following reasons:

85.1 A liquidator steps in the shoes of the management of the company,
to take charge of the assets of the company, and is in position to
make arrangements to allow respective bidders to enter upon the
land and the property and to equip respective bidders far better to
make informed offers.
85.2 A liquidator can embark upon a far better and more effective
advertisement campaign and can also engage the assistance of
estate agents to sell the property.
85.3 Auctioneers also have an electronic database, where they
electronically send information relating to upcoming auctions to their
client base. By employing an auctioneer as opposed to the Sheriff,
the property could be far better advertised to a far larger group of
perspective purchasers who will gain an interest in the property.
85.4 The liquidator can also deal with recalcitrant occupier s who may
refuse to give prospective bidders access to the premises in order to
view it, or a liquidator may embark upon an investigation or an
enquiry, and summons, on a compulsion of law, for occupiers to
explain their rights relating to the occupancy an d in suitable
circumstances take proceedings to eject occupiers firstly, in order to
give prospective bidders vacant occupation.
85.5 A sheriff’s auction is conducted in terms of more rigid procedure. As
a result, at a sale in execution, the property is sold at the fall of the
hammer and even the recordal of a reserve price does not entitle a
sheriff to keep bids open in order to secure improved offers.
However, a liquidator can design his own unique conditions of sale,
free from the restrictions imposed by law on a sheriff . A liquidator
can for example procure a bid at an action and then allow, within a
7- or 10 -day period after the sale for prospective bidders to make
improved offers. It was submitted (in the replying affidavit) that this is
also a methodology which results in a far better opportunity to
dispose of the properties.

also a methodology which results in a far better opportunity to
dispose of the properties.

[86] Mr van der Merwe submitted that the applicant’s only motive in this matter is
to secure a repayment of its debt, in the most cost -effective manner possible

viewed from a cost and time perspective. The respondent’s counsel did not
persist to rely thereon that the application was an abuse of process.

[87] I deal further with the submissions regarding alternati ve means to obtain
relief, where the exercise of my discretion is discussed below.

Alternative ground for relief: Section 344(h) - Just and Equitable

[88] Should I be wrong in my finding that the applicant is unable to pay its debts ,
as contemplated in section344(f), I am still of the view that a case has been
made out that a proper case has been made out in terms of section 344(h) of
the 1973 Act, which provides that a company may be wound up if it appears
to the court that it is just and equitable that it should be wound up.

[89] I pause to point out that it is not strictly necessary to deal with the alternative
ground for the application in terms of subsection 344(h) 46 in view of my
finding that the applicant has made out a case in terms of subsection 344(f) .
If a company is not able to pay its debts when due, but is factually solvent,
an applicant does not need to prove that it is nevertheless just and equitable
to wind the company up, because section 81(1)(c) of the 2008 (the 2008 Act)
only applies to solvent companies.47

[90] When a court finds that the aforesaid jurisdictional fact envisaged by section
344(h) exists, that it is just and equitable that a company be liquidated, the
court still has a discretion to grant or withhold a winding -up ord er48. A
decision as to what is just and equitable involves a balancing of interest of all
concerned with the interest of good governa nce and the smooth
administration of justice.49 It postulates not facts but a broad conclusion of

46 Crossmoor supra n13 at par [42].
47 Henochsberg supra n30 at APPI-55. ABSA Bank Limited v Africa’s Best Minerals 146 Limited
(Sekhukhune) NO 2014 JDR 2736 (GJ); [2015] 2 All SA 8 (GJ) at paras 20, 21 and 33, wherein the
court referred to Boschpoort, supra.

court referred to Boschpoort, supra.
48 See for example Tjospomie Boerdery (Pty) Ltd v Drake nsberg Botteliers 1989 (4) SA 31 (T) at
42B-
F.
49 Weare and Another v Ndebele NO and 21 & 31 2009 (1) SA 600 (CC) at para 42.

law, justice and equity. The court must weigh all relevant factors. The fact
that a company is not able to pay its debts is not a “catch-all ground” under
“just and equitable” as this is a special ground 50 based on how the company
is being run. The fact that a company is not payin g its debts does not
necessarily make it just and equitable to have it would up. Section 244(h)
postulates not facts but a broad conclusion of law, justice and equity, as a
ground for winding -up.51 A company can inter alia be liquidated on in terms
of sect ion 344(h) if its substratum disappears, where it was found for a
specific purpose and the purpose can no longer be achieved.52

[91] The applicant specifically relies on the following circumstances, which it says
renders it just and equitable that the Court should wind up the respondent:

91.1 It appears that the principal business of the respondent is to earn an
income from the property that it owns , by way of its farming
operations. The applicant is not aware of any other economic
activities conducted by the respondent. The respondent has failed to
provide the applicant with any recent financial statements and as a
result the applicant came to the inescapable conclusion that the
respondent does not pay anything for the privilege of conducing its
farming oper ations on the immovable property bonded to the
applicant. The applicant says that only possible alternative is that
the respondent spirits away the income derived from the property
that it owns. In these circumstances, the applicant contends, it will be
just and equitable to wind-up the respondent.
91.2 The applicant avers that the aforementioned state of affairs is
exacerbated if it is borne in mind that income earned by the
respondent from the property was ceded to the applicant in terms of
the common cause four mortgage bonds registered to the applicant.

50 HBT Construction and Plant Hire v Uniplant Hire CC 2012 (5) SA 197 (FB) at para [14].

50 HBT Construction and Plant Hire v Uniplant Hire CC 2012 (5) SA 197 (FB) at para [14].
51 The discussion in Henochsberg, supra n30 at APPI-60. Thunder Cats Investments 92 (Pty) Ltd and
Another v Nkonjane Economic Prospecting & Investment (Pty) Ltd and Others 201 4 (5) SA 1
(SCA) at p ara [15]; Erasmus v Pentamed Investments (Pty) Ltd 1982 (1) SA 178 (W) at 181;
Moosa NO v Mavjee Bhawan (Pty) Ltd 1967 (3) SA 131 at 136H;
52 See for example Thunder Cats supra at par [16] and Rand Air (Pty) Ltd v Ray Bester Investments
(Pty) Ltd 1985 (2) SA 345 (W) at 350 C-D.

91.3 In this regard, reference was made to the standard mortgage bond
conditions attached to the founding affidavit which contains a
cession of rental and other income emanating from the respondent’s
farm. The relevant part thereof reads as follows:
“7. SESSIE VAN HUURGELD
7.1 Die verbandgewer sedeer hiermee aan die bank al sy regte, titel
en belang in en tot alle huurgeld en ander inkomste wat mag
voortspruit uit die beswaarde eiendom, as bykomende sekuriteit
vir sodanige bedrae wat van tyd tot tyd kragtens die verband
verseker mag word, met die uitdruklike reg ten gunste van die
bank, onherroeplik en in rem suam:
7.1.1 in stappe teen wanpresterende huurders te doen vir die
verhaling van alle huurgeld of vir uitsetting;
7.1.2 om die geheel of ‘n gedeelte van enige beswaarde
eiendom te verhuur, huurkontrakte te kanselleer of te
hernu of aan te gaan op ‘n wyse wat die bank goeddink
en om enige betreder of ander persoon uit te sit;
7.1.3 om namens die v erbandgewer enige geld te verhaal wat
ten opsigte van die verkoop van die beswaarde eiendom
betaalbaar is; met dien verstande egter dat daar nie
volgens die sessie oormaking en oordrag en matigings en
magte wat ingevolge hierdie klousule verleen word,
gehandel sal word nie sonder die toestemming van die
verbandgewer vir solank daar ten volle aan die standaard
verbandvoorwaardes voldoen sal word.
7.2 Daar word hiermee ooreengekom dat die bank geregtig is
om ‘n kommissie te vra van 5% van die bruto bedrae van alle
huurgeld wat hy ingevolge hierdie klousule invorder.”

[92] Mr van der Merwe argued that it is just and equitable for the respondent to
be wound -up in these circumstances. The respondent cannot continue to
retain and/or spirit away the income that has been ceded to the applicant as
part of the applicant’s security.

[93] The applicant further relies thereon hat the respondent has , in recent times,
not made any tangible offers to the applicant, to repay the debt, other than
from the proceeds of a sale of its property bonded to the applicant. This, it
says, leads to the inescapable conclusion that the respondent itself believes
that it will only be able to survive financially, in the event that it manages to
sell its property for mor e than it owes to the applicant. This is indicative of
the fact that the respondent is not in a position to repay the debts owed to
the applicant other than from the proceeds of the only property that it has.

[94] Applicant further submits that the respondent h as lost its substratum as a
trading entity, which itself evidently sees no other option but to sell its only
valuable asset, to enable it to repay its debts.

[95] The respondent answered rather evasively and cryptically in its answering
affidavit, denying the applicant’s allegations, but not providing sufficient
information to show the contrary. It did not deny that the nature of its
business was as set out by the applicant, nor did it provide its financial
statements. I t persisted with its primary contention that if the immovable
property is sold, the applicant would have no claim against the respondent.
The spiriting away of income is denied by the respondent, however it did not
divulge details of how it was or is being used. In respect of the applicant’s
submissions that the applicant is entitled to receive the ceded income, the
respondent answered that the applicant first has to enforce its security ,
which it says the applicant has elected not to do. It did not provide
information to show that it has not lost its substratum, and that it will not lose
it if its assets are sold.

[96] Mr van der Merwe also referred to the judgment in Voltex, from which it is
evident that ADL has already been finally liquidated. ADL owe s an amount

evident that ADL has already been finally liquidated. ADL owe s an amount
of, at least, about R18 million. Sequestration orders have also been issued
against the shareholder of ADL and Mr de Leeuw who deposed to the
answering affidavit in the present application. They are both held responsible
as sureties for debt of ADL. In these circumstances the future viability of the
respondent as a self -standing profitable company is indeed unsure, even if

its property is sold for a substantial amount. If its farm is sold, the question
remains how it will be able to continue with its farming operations.

[97] Respondent’s counsel in argument did submit that the respondent would be
able to continue as a concern with any residual amount which may be
realised if the respondent’s property is sold, but th ere is no clear indication
on the papers what such a business would entail without the land , and that it
would be viable . Although I was assured by respond ent’s counsel that the
respondent still has another director, criticism by van der Merwe that there
exist uncertainties regarding the continued management of the respondent ,
may well be justified.

[98] Taking all these considerations into account would in my view justify a
finding that the require ments of section 344 (h) have been met. In addition,
factors such as the history of indebtedness and unsuccessful attempts to sell
the property, the uncertainties regarding the management of the company,
the insolvency of its director and shareholder , the uncertain value of the
assets and its s aleability, the long standing failure to pay debt, the fact that
a liquidator can take control if the respondent ’s affairs if it is liquidated and
can conduct an investigation into the income and other affairs of the
respondent, lead to the conclusion that the requirements of section 344(h)
have been met.

Exercise of the court’s discretion

[99] Despite my findings that the applicant has made out a case in terms of
section 244(f) and 344(h), the court retains a discretion to refuse or postpone
the application.

[100] As indicated, the narrow discretion is rarely exercised in circumstances such
as exist in the present application, where the company has failed to pay its

debt, and then in special or unusual circumstances only. 53 The respondent
bears the onus of proving the existence of such circumstances.

[101] Do the circumstances of this application con stitute special or unusual
circumstances, and is there a “solid factual foundation”54 for the refusal of an
order to wound up the respondent?

[102] In my view the answer must be in the negative. In my view there is nothing
really special or unusual about the circumstances of the matter. The inability
of a debtor to pay its debts when they fall due , as is the case with the
respondent, is not an unusual circumstance . It is also not unusual for a
company to fall into debt and being unable to realise assets to pay its debts.
It is equally not unusual that a company is commercially insolvent and
therefore unable to pay its debts, even if it is factually solvent. A possible
difference in the cost of a sale of th e property in liquidation proceedings as
opposed to execution is also not a special circumstance.

[103] A circumstance that could possibly have qualified as special, would have
been a clear indication on the papers that the respo ndent’s immovable
property was or would be sold within a reasonable time, for an amount which
would cover the debts owed to the applicant . There exists authority that a
“mere illiquidity capable of being overcome within a reasonable time ” could
serve as a trump card to resist liquidation. Even though it maintains that it
has readily realisable assets available to pay its debts, 55 there is no solid
factual evidence that, despite various attempts over many years since at
least 2018, the respondent’s property will actually be sold within a time of,
say, 6 or even 12 months and for an amount which would be sufficient to
cover all its debts. The history of the attempts to sell the property suggests
that there is no guarantee of a sale within a reasonable time, for an amount
which would cover all its debts. The failure to pay debts, for years, suggests

which would cover all its debts. The failure to pay debts, for years, suggests

53 Afgri supra n32 para [12].
54 Boschpoort supra n15 para [17].
55 Firstrand v Evans supra at [27]; Newcity supra n28 at para 25.1.

that the respondent suffers from more than a mere illiquidity, and that there
is no guarantee that it will be solved as it contends.

[104] The respondent has failed to provide its financial statements, or at least
more particulars of its overall financial position. There is also no independent
valuation of the property. If regard is had to the values contained in the
unsuccessful offers to pu rchase, it is not obvious that the who le of the debt
owed to the applicant would be covered by a sale of the land, even by way of
an auction as suggested by respondent’s counsel . The apportioned values
for the land in such offers, as mentioned above 56, rather appear to be below
the total amount of the applicant’s claims.

[105] My view may also have been different if circumstance such as in Grenco57
existed where the indebtedness was being disputed. The court held58 that a
genuine counterclaim or defence on the merits to a claim underlying the
debt, may sway a court to exercise its discretion in the respond ent’s favour
to refuse a liquidation order 59. The fact that the respondent’s indebtedness
was not disputed in argument leaves little room for the exercise of a
discretion in the respondent’s favour.

[106] I am not convinced that a postponement would result in a better. In my view
the grounds for a postponement would not be solid grounds. The prospects
of success of a sale of the assets for a value that would be sufficient to save
the company are speculative, not proved. In my view there is merit in the
applicant’s contentions that a better price could well be achieved in
liquidation, for the reasons set out above. Even if this is not the case, that
would not without more be a ground to postpone or refuse the application.

[107] I also take into account that sequestration orders have been made against
the director and shareholder of the respondent. The shareholder and the

56 Paragraph [23] to [25].
57 Supra, n32.
58 Id para [96].

56 Paragraph [23] to [25].
57 Supra, n32.
58 Id para [96].
59 Even where a defence or counterclaim is raised, the court will scrutinise it, and its narrow discretion
would only be exercised if it is found that such defence or counterclaim is bona fide , and has
prospects of success. See for example Afgri, supra n32.

director of the respondent , as well as against ADL . This, and the sale of the
respondent’s main asset, used for its business operations, are factors which
strongly indicate that the respondent may already have lost its substratum or
that it will lose it if the property is sold . A liquidator should rather take control
of the affairs of the respondent, and to investigate same.

[108] The applicant remains entitled to proceed with liquidation procedure in the
absence of proof of special and unusual grounds which would justify a
refusal or postponement of the application.

[109] Mindful of these and the other relevant considerations mentioned herein, the
legal position and the relevant facts, I find that there do not exist sufficient
grounds for the exercise of my discretion to refuse to grant an order for the
winding-up of the respondent.

[110] In my discretion I therefore I grant a provisional winding-up order.

An order is made as follows:

1. The Respondent is hereby provisional wound up.
2. A rule nisi is issued , calling upon Respondent and al interested parties to
show cause, if any, to this Court on 28 October 2025, why a final order
should not be granted for the winding-up of the respondent.
3. A copy of this provisional order shall be served as follows:
3.1. By the Sheriff of the Court on the R espondent at its registered
address/office.
3.2. By the Sheriff of this Court on the employees of the Respondent(if it is
ascertained that the Respondent has employees) at the Respondent’s
registered address and principal place of business, by affixing a copy
of the provisional order to a ny notice board to which the employees
have access inside the premises or by affixing a copy of the
provisional order to the front door of the premises from which the
Respondent conducts business.

3.3. By the sheriff on every trade union that, as far as the App licant can
ascertain, represents any of the Respondent’s Employees, if any.
3.4. By serving the provisional court order on the Company and
Intellectual Property Commission.
3.5. By serving the provisional order on the South African Revenue
Services and on the Master of the High Court.
4. This order shall be published in “The Citizen” and the” Pretoria News”
newspapers.
5. The cost of the application shall be cost in the winding -up of the
Respondent and shall include the cost of counsel on scale C.



JS STONE
ACTING JUDGE OF THE HIGH COURT


This judgment is handed down electronically by circulating it to the legal
representative by email and being uploaded on Caselines.

Appearances:

Attorneys on behalf of the applicant: Tim du Toit & Co.
Counsel on behalf of the Applicant: Adv MP van der Merwe SC

Attorneys on behalf of the Respondent: Kololo Magro Inc.
Counsel on behalf of the Respondent: Adv. R de Leeuw

Date of hearing: 6 May 2025
Date delivered: 7 August 2025