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AND
In the matter between:
SOCIAL HOUSING REGULATORY AUTHORITY Applicant
and
EVENING SHADE PROPERTIES 56 (PTY) LIMITED First Respondent
NEDBANK LIMITED Second Respondent
LETS CARE SOUTH AFRICA NPC Third Respondent
Delivered: This judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation to the parties' legal
representatives by email and by uploading it to the electronic file of this matter on
CaseLines. The date and time for hand-down is deemed to be 10:00 on 19 September
2025.
JUDGMENT
VAN EEDEN AJ
[1] Three interlinked opposed applications came before Court:
a. In the first matter, Mr C Gibson appeared on behalf of the applicant,
Evening Shade Properties 56 (Pty) Limited (“Evening Shade”). This is a
winding-up application against Lets Care South Africa NPC (“Lets Care”)
where a provisional winding -up order had been issued by Vally J on
5 August 2024. Shortly thereafter and during August 2024, provisional
liquidators were appointed.
b. In the second matter , Nedbank Limited (“Nedbank”) was represented by
Mr NJ Horn and Ms LV Swandle. On 25 November 2024, Opperman J
granted Nedbank leave to intervene in Evening Shade’s application.
Nedbank also seeks the final winding-up of Evening Shade.
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c. In the third matter, Mr BM Lecoge SC and Mr CI Mokwena represented the
Social Housing Regulatory Authority (“SHRA”) . SHRA launched what it
termed a counter-application for an order in inter alia the following terms:
“1. Declaring that once this Honourable Court has granted an order for the
administration of a social housing institution in terms of section 12 of the Social
Housing Act 16 of 2008, no creditor may bring an application for the provisional
and final liquid ation of the social housing institution in question until the Social
Housing Regulatory Authority (“SHRA”) has completed the administration process,
or without the leave of this Honourable Court.
2. Setting aside the provisional liquidation order in terms of section 149(2) of the
Insolvency Act 24 of 1936 (“the Insolvency Act”).”
[2] I find it convenient to first deal with SHRA’s counter-application and its opposition
to the final winding-up order sought by both Evening Tide and Nedbank. SHRA
seeks the setting aside of the provisional liquidation order granted by Vally J on
5 August 2024. Given the appointment of provisional liquidators and the Master’s
involvement following the provisional winding-up order, it seems obvious that the
Master and the provisional liquidators are necessary parties and that SHRA’s
failure to join them to its counter -application constitutes a material non -joinder.
However, I do not intend to dismiss the counter-application solely on this ground.
[3] The parties have been at loggerheads since the provisional winding-up order was
granted, SHRA claiming that the administration order that it had obtained on
23 June 2023 remained in place. It refused to acknowledge the authority of the
provisional liquidators. The following terms of the administration order SHRA
obtained before Tshombe AJ are relevant to these three applications:
“2. The rights and obligations of the chairperson, members of the board,
managers, executive and/or senior staff of the First Respondent are hereby
managers, executive and/or senior staff of the First Respondent are hereby
suspended, pending the conclusion of the Applicant’s forensic investigations
into the affairs of the First Respondent.
3. The first respondent is hereby placed under administration of the Applicant, in
terms of section 12 of the Social Housing Act, 16 of 2008, with the following
powers and duties:
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3.1 Applicant shall take immediate control of, and be in the place of, the
board of directors of the First Respondent, manage the business and
operations of and concerning the First Respondent, together with all
assets and interests relating to the business of the First Respondent;
3.2 The Applicant shall take control of the cash, cash investments, shares
and other security, as well as other assets owned, held or administered
by or on behalf of the First Respondent; and
3.3 The Applicant is permitted to engage such assistance of a legal,
accounting, actuarial, administrative or other professional as the
Applicant may deem necessary, and to defray reasonable expenses
and charges thus incurred from the assets owned, administered or held
by or on behalf of the First Respondent.
4. The Applicant shall appoint, in its sole discretion, a suitably qualified person to
manage and administer the First Respondent’s affairs as administrator of the
Sondela Village Housing Project, during the abovementioned period.
5. The Applicant’s administrator shall run, at the Applicant’s discretion, the
administrative and managerial affairs of the Sondela Village Housing Project
and shall be the sole representative dealing with third parties, including but not
limited to the First Respondent’s creditors.
6. The Applicant is authorised to take such further steps as may be necessary in
terms of the Act and/or any other applicable law, during the administration of
the First Respondent to achieve the First Respondent’s restoration to viability.”
[4] Mr Lecoge SC argued that because the section 12 administration order that was
granted, no order could issue in respect of the winding -up of Lets Care. In
particular, he relied on section 12(9) of the Housing Act which reads as follows:
“12(9) If the High Court grants an order placing the institution under the administration
of the Regulatory Authority, the Regulatory Authority –
(a) must manage the institution effectively and efficiently;
(a) must manage the institution effectively and efficiently;
(b) may remove the accreditation of the social housing institution;
(c) may transfer the housing stock or rights of the social housing institution to
another social housing institution prepared to accept such transfer on such
terms and conditions as may be agreed at the time; or
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(d) where appropriate, institute legal proceedings for the winding -up of the
institution.”
[5] With reference to section 12(9)(d), Mr Lecoge submitted that only SHRA has the
right to institute winding -up proceedings against an institution under its
administration. Although the founding papers contained a contention that the
effect of the administration order was that SHRA stepped into the shoes of Lets
Care, during argument Mr Lecoge SC correctly conceded that that was not the
case. Lets Care’s assets and liabilities remained vested in it and the effect of the
administration order was limited to vest the management functions described in
the Housing Act in SHRA. SHRA took over the “ rights and obligations” of the
persons highlighted in paragraph 2 of the administration order, namely the
chairperson, members of the board, managers, executive and/or senior staff of
Lets Care. The concession notwithstanding, Mr Lecoge argued th at SHRA’s
exercise of the powers and functions assigned to it in terms of the Housing Act
and administration were being hampered by the provisional order.
[6] The founding papers (paragraph 51) stated that there was uncertainty because
the provisional liquidators insisted on acting in terms of the provisional liquidation
order without regard to the existence of the administration order. It was stated
(paragraph 52) that the administration order and the provisional liquidation order
have conflicting and opposing objectives. On the one hand, the administration
order contemplates the continued existence of Lets Care (or the Sondela Village
Project as a social housin g project), its restoration to financial viability for inter
alia the benefit of creditors and beneficiaries of social housing and protecting the
investment of the state in the underlying social housing stock. In contrast, so the
argument went, a liquidation pursues the disposal of the assets of Lets Care for
the benefit of creditors and culminates in the dissolution of the housing project
the benefit of creditors and culminates in the dissolution of the housing project
itself, leaving the legitimate social housing beneficiaries destitute and again
placing the liability of hou sing those beneficiaries on another state housing
programme.
[7] In this context, SHRA contended that section 12(9)(d) was to the effect that only
it had the right to launch final liquidation proceedings. It contended (replying
affidavit, paragraph 12) that the administration dispensation set out in the
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Housing Act amounts to a special dispensation in terms of special legislation
which finds application in respect of companies which fall under the regulatory
purview of the applicant and the administration order. In consequence, so the
argument went, the process pursued in terms of the regulatory purview must be
given precedence in the circumstances. Finally, it was contended that during the
time period when SHRA was still exercising its powers of administration, a
moratorium was created preventing other creditors from seeking a winding-up of
the entity under administration.
[8] In its express terms, neither the Housing Act nor the administration order
supports SHRA’s argument. No moratorium is created by the Housing Act or the
administration order. T he rights of creditors are not dealt with at all.
Section 12(9)(d) does not give SHRA the monopoly on the institution of
liquidation proceedings contended for. It serves to provide standing to SHRA
should it seek to launch liquidation proceedings. If anything, the scheme of the
Housing Act serves to protect the rights of creditors. Section 12(4), for instance,
requires SHRA to consult “with the providers of any debt finance to the institution”
and then to apply to Court for the administration order.
[9] The rights of creditors are firmly entrenched in insolvency and winding -up
legislation. Both Mr Gibson and Mr Horn provided instructive arguments on the
contention that the Housing Act amends existing statutory rights. In this matter,
Lets Care is a company registered under the Companies Act, 61 of 1973 (the
1973 Act). This is what section 13(5) of the Housing Act requires. The Housing
Act does not provide for Lets Care to be treated differently from any other
company that is indebted to creditors. Section 344(f) of the 1973 Act provides
that a company may be wound-up if it is unable to pay its debts as described in
section 345. The 1973 Act continues to apply with respect to the winding-up and
section 345. The 1973 Act continues to apply with respect to the winding-up and
liquidation of companies by virtue of Item 9 to Schedule 5 of the Companies Act,
71 of 2008 (the 2008 Act). The moratorium created by business rescue comes
with many safeguards relating to creditor participation, strict time periods and the
overarching requirement of the need to demonstrate a reasonable prospect that
the company will be rescued within the statutory framework if it receives some
breathing space.
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[10] The Housing Act does not interfere with the rights of creditors in any manner –
not even when a social housing institution is placed under the administration of
SHRA. Its aim is different. As the preamble states, i ts aim is to establish and
promote a sustainable social housing environment; to define the functions of
national, provincial and local governments in respect of social housing; to provide
for the establishment of the Social Housing Regulatory Authority in order to
regulate all social housing institutions obtaining or having obtained public funds;
to allow for the undertaking of approved projects by other delivery agents with
the benefit of public money; to give statutory recognition to social housing
institutions; and to provide for matters connect ed therewith. It follows that the
counterclaim cannot succeed.
[11] SHRA opposed both applications for winding-up. The essence of the opposition
is the contentions that underpin the counter -application. SHRA contended that
the administration order was granted prior to the provisional order and as such,
that the provisional order should not have been granted by virtue of the existence
of the administration order. It conte nded that the administration order overrides
the provisional liquidation order. It stated that the two orders have conflicting and
opposing objectives and cannot co-exist.
[12] This reasoning is incorrect. The provisional liquidation order superseded the
administration order. After the provisional liquidation order issued, SHRA had no
more powers than the board of directors of any other company placed under
provisional liquidatio n. SHRA was required to cooperate with the provisional
liquidators, it having taken over the rights and obligations of Lets Care’s
chairperson, members of the board, managers, executive and/or senior staff.
[13] SHRA’s opposition to the two winding-up applications did not extend beyond the
contentions in terms of the Housing Act and the relief claimed in the counter -
contentions in terms of the Housing Act and the relief claimed in the counter -
application. In fact, it admitted Lets Care’s indebtedness to Evening Shade and
to Nedbank and there are no further grounds of opposition to a final winding -up
order.
[14] I have dealt with SHRA’s contentions relating to its status in a final winding -up,
as it appeared to me that the stand-off position it had adopted may continue if a
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final winding -up order was issued. This was how I understood Mr Lecoge’s
submissions, and I consequently asked him whether he was inviting me to make
an order that the administration order will be superseded by a final winding -up
order and that SHRA had to render assistance to final liquidators. That prompted
counsel for Evening Shade and Nedbank in reply to request such an order to
provide clarity to the parties. Although an order along these lines do not form part
of the papers, it was debated, and I consequently intend to incorporate orders on
SHRA’s future involvement in the affairs of Lets Care.
[15] I make the following orders:
1. Lets Care South Africa NPC is placed under final winding-up.
2. It is declared that the order granted by Tshombe AJ on 23 June 2023
placing Lets Care in administration was superseded by the provisional
winding-up order granted by Vally J on 5 August 2023.
3. SHRA is directed to render such assistance to the final liquidators as
could have been statutorily demanded of Lets Care’s chairperson,
members of the board, managers, executive and/or senior staff
immediately prior to the order granted by Tshombe AJ on 23 June
2023.
4. The costs of the winding -up applications, including the costs of the
extensions of the rule nisi issued on 5 August 2024 (with the return
date of 18 September 2024, extended to 23 October 2024, then to
25 November 2024, then to 28 July 2025 and finally to 15 September
2025) shall be costs in the winding -up, including the costs of two
counsel where so employed, on scale C.
5. The counter-application instituted by the Social Housing Regulatory
Authority is dismissed and the Social Housing Regulatory Authority is
to pay the costs thereof, including the costs of two counsel where so
employed, on scale C.