REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
( 1) REPORT ABLE: NO
(2) OF INTEREST TO O TH ER JUDGES : NO .
(3) REV ISED: NO
Da te: 29 Augus t 2025
In the matter between:
ELIZABETH WILANDA PRINSLOO N.O.
MAHIER MOHAMEND TAYOB N.O.
CORNELIA CAROLINA MIENIE N.O.
LUCAS MBENGENI MUNDALAMO N .O .
ADRIAAN WILLEM VAN ROOYEN N.O .
HLAMALANE JERRY MUSI N.O.
and
THE COMMISSIONER FOR THE SOUTH
AFRICAN REVENUE SERVICE
THE MASTER OF THE HIGH COURT, PRETORIA
CASE NO: 020214-2023
Fir~t Applicant
Second Applicant
Third Applicant
Fourth Applicant
Fifth Applicant
S ixth Applicant
First Respon dent
Second Resp ondent
JUDGMENT "
Van der Schyff J
Introduction
[1] This is an application for declaratory relief under section 21 (1 )(c) of the Superior
Courts Act 1 0 of 2013. The applicants seek an order for this Court to ~nquire into and
determine dispu,ted rights of and obligations b.etween the applicants and the
respondents concerning the interpretation ,of an order of this cqurt handed down by
Baqwa J, on 2 December 2019 ('the order' or the 'Baqwa-order'), and consequential
relief. The consequential relief comprises the review and setting aside of income tax
assessments for the years 2013 -2018, issued by SARS on 12 November 2021, 15
November 2021, and 19 November 2021, respectively, pertaining to QSG Consult
International (Pty) Ltd and Johan A Smit and Associates (Pty) Ltd.
[2] As I will presently deal with, the order declared three separate companies 'a
single entity as conten,plated by section 20(9) of the Companies Act'. These would
forthwith be known as the QSG Investment Scheme (the Scheme) and"were to be
administered as a single comp 'any, in respect of which the winding-up had to be
' pursued.
[3] The applicants contend for an interpretation of the order ha.ving • the effect of
stripping the three erstwhile companies of their legal persor:iality. As a result, so the
argument went, no liabilities or obligations, including obligations arising from taxation,
could be attributed to any of the three subject companies .. SARS , in turn·, assessed
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two of the companies and proved claims, based on the individual' assessments,
I
against the Scheme. These assessments are the subject matter of the review relief ,,
sought in prayer two of the notice of motion.
2
[4] As a result of the opposing views held by the parties on the interpretation of the
order, the applicants informed SARS on 7 March 2022 of their intention to seek a
declaratory order in the appropriate forum, and that sections 91 , 9~, 100 and 104 of
the Tax Administration Act 28 of 2011 ('the Act', or the 'T AA') forms the basis of the
declaratory order. Deliberations between the parties contioued. On 18 March 2022,
the applicants made a tender in terms of section 95(3) of the T AA. Meetings of
creditors proceeded. These meetings are a point of contention, as it is averred that the
meeting of 24 March 2022 took place without SARS having been given notice and
without SARS's claims having been presented.
[5] The applicants issued two notices in terms of section 11 of the T AA , the second
of which was dated 13 January 2023. A special meeting of creditors was postponed
to 28 February 2023 to allow the applicants to bring an application in terms of the
second section 11 notice. -SARS received a third notice in terms of section 11 on 13
February 2023, informing SARS that the applicants would seek .the• relief they
requested in this application. SARS, however, proceeded to pr,ove its ciaim against
QSG Investment Scheme on 28 February 2023, in the abs~nce of the applicants. The
application now before this Court was issued on the s.ame 'day. -C:he applicants
suqsequently issued a review application, under a different case number, to set aside
the Master's decision to proceed with a meeting on 28 February 2023 and to prove the
SARS claims that had arisen from the assessment of the individual companies.
[6] SARS views ·this application as an attempt to have income tax assessments,
which have not been set aside in respect of taxpayers who are not parties before the
court, set aside by means of a declaratory order.
[7] SARS raised two points in limine: firstly, that this Court lacks jurisdiction to
adjudicate this matter; an,d secondly, that the applfcants h~ve no locus s(andi. For a
adjudicate this matter; an,d secondly, that the applfcants h~ve no locus s(andi. For a
better understandin_g of the issues, it is necessary to contextualize the i~sues within
the factual matrix of ·this matter. I accordingly directed the part\es to argue their·
respective cases. I indicated that I wou ld still consider the points in limine first and,
depending on the outcome thereof, further deal with the application.
3
• Factual matrix
[8] It is common 'cause that a Ponzi scheme was perpetrated by the father-and
son, duo Johan and Riaan Smit ('the Smits'). Two compani~s were cr~ated, namely
Johan A Smit and Associates (Pty) Ltd ('JASA') and QSG-Consult International (Pty)
Ltd ('QSG-1'). These entities, herein collectively referred to as the taxpayers, ran a
pseudo-investment scheme in wh ich investors were promised high rates of return on
their 'investments'. They began accepting deposits and making payments to investors
in 2015.
[9] The details of the scheme ran by the Smits are set out in two reports compiled
by Bertelsman J (retired), appointed by the Master after the taxpayers were wound up.
The reports explain how the Smits ~sed a set of companies to conduct their fraudulent
scheme:
a. JASA was the first company created. Both Smits were directors of JASA.
b. JASA controlled QSG-1.
c. These two companies held South African bank ·accounts into which vast
amounts of money were deposited.
d. The invested funds were transferred to another company controlled by the
Smits, QSG Consult (Middle East) Ltd, in Dubai.
e. These funds were returned to another company controlled by the Smits,
Rialis Consultants (Pty) Ltd ('Rialis'), from where the funds would be
distributed to participants.
f. The Dubai company conducted no investment or other commercial .
transactions. It merely retained the funds, and some of these were
transferred back in lump sums by Mr Smit and his :son as and when
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investors had to receive their payments.
g. JASA , QSG-I , and Rialis had the same registere~ business address.
[1 O] The South African Reserve Bank ('the SARB ') established that an aggregate of
R 126, 000, 000 had· been transferred to Dubai from South Africa between February
I.
4
2017 and June 2017. The SARB also found that approximately R33 1000,000 was
transferred back to South Africa.
[11) Consequently, a criminal investigation ensued. The Smits fled the ~ountry, and
in December 2017, the National Director of Public Prosecution obtained a preservation
order against funds in bank accounts held by Rialis and QSG- 1.
[12) QSG-1 was placed in provisional liquidation in September 2018. A final order
was made on 14 May 2019. The first two applicants were appointed as jo_int liquidators
of the insolvent estate of QSG-1. JASA and Rialis were subsequently wound up. The
third and fourth applicants were appointed as the joint liquidators on the insolvent
estate of JASA. The fifth and sixth applicants were appointed as joint liquidators of the
insolvent estate of Rialis.
[13) The winding-up of JASA and Rial is was consequent on the Bertelsman J report,·
wherein Bertelsman J explained that QSG- 1, QSG Consult International (Middle East)
Ltd, and JASA were treated as one operation, and recommended , among others, that:
"In order to do _j+:,JStice to the creditors of all the companies· involved, it is
therefore necessary to lift the corporate veil, to consoJidate the liquidation
' of all the entities, and to treat the available funds as owing and due to the
creditors of all the companies. The liquidators should therefore apply for
' the liquidation of the companies that have not yet had the liand of the law
upon them. At the same time application should be made for an order,
either at common law or in terms of section 20(9) of Act 71 of 2008, to
consolidate the liquidation process as one and to pool w hatever funds or
other assets may be found for the benefit of creditors i~. one liquidation
process."
[14) In November 2019, the liquidators of the respective legal entities launched an
application in terms of section 20(9) of the Compa nies Act 71 of 2008 ('the Companies
Act'), on the basis that the companies had been used in such a manner as to constitute
Act'), on the basis that the companies had been used in such a manner as to constitute
' ' ' an unconscionable abuse of their respective juristic personalities. S'.ARS was not cited
as a party iri this application, although the application was served on it.
5
[15] The concept of a single entity referred to as the 'QSG lnvestm_ent Scheme '
originates from the order. The terms of the order are set out below. JASA and Rialis
were finally wound up on 28 January 2020, after the order underpinning this
application was obtaine_d.
[16] Before liquidation, JASA and QSG-I failed to file ary i,ncome tax or provisional
income tax returns and made no incom~ tax payments to SARS . After liquidation,
likewise, no tax returns were filed. Nothing came of discussions b~tween SARS and
• I •
the liquidators relating to the entities' tax liabilities. SARS initiated an audit into the
taxpayers' affairs on 20 October 2020. On 24 August 2021, SARS issued letters of
audit findings to the respective liquidators of the taxpayers. Income tax assessments
'· were issued.in respect of JASA and QSG-I, respectively.
[17] Notices of objection were filed, but SARS dismissed the objections. SARS 's
reason for declaring the objections invalid was based on section 95(5) of the T AA , and
the requirement that a taxpayer may only lodge an objection to an estimated
assessment if it had submitted returns for the relevant tax period.
[18] The Scheme 's liquidators wrote to SARS stating that they 'cannot be held to
account' for the fact that the original taxpayers failed to keep records, and that their
' .
'involvement was ~x post facto.' On 28 February 2023, SARS proved its plaims against
the QSG Investment Scheme. The applicants launched this c,1pplication on the same
' .
day.
j
[19] The interpretation and implication of the order lie at the heart.of this application.
As the application before Baqwa J was unopposed, no reasons were given for the
order.
The Baqwa Order
[20] The application before Baqwa J was brotJght by wa y' of urgency. Having
' condoned non-compliance with the Uniform Rules of court conc~rning forms, service,
and time periods, it was further ordered:
6
"2. That the fifth to seventh respondents ("the. Subject Companies ') [JASA,
QSG-I and Rialis] are declared a single entity as contemplated by section
20(9) of the Companies Act, 71 of 2008.
3. That the Subject Companies, pursuant to the order granted in. terms of
paragraph 2 above, shall henceforth be known a.s the "QSG Investment
Scheme " and shall in future be administered, in all resp.ects, as one
single company under the Companies Act, 71 of 2008.
4. That the thir_d and fourth respondents [the Master' of the High Court,
Pretoria, and The Companies and Intellectual Property Commission] are
ordered to amend their records to accordingly reflect the cpnsolidation of
the Subject Companies in terms of section 20(9) of the Companies Act,
71 of 2009.
5. That the third respondent is ordered to, within 5 days of this order, urgently
appoint the applicants as liquidators in respec.t of the _QSG Investment
Scheme , to further pursue the winding up of the QSG Investment Scheme .
6. That the costs of [the] application form part .. of the costs in the
administration of the QSG Investment Scheme , save in the event that this
application is opposed, in which event a punitive costs order, on the scale
as between attorney and client. will be sought against such opposing
party.'
Developments in relation to the subject companies and the Scheme subse_quent to the
order
[21] In terms of the order, the Master was required to appoint liquidators for the .
Scheme. The Master appointed the applicants as provisional liquidators of the Scheme
' on 6 December 2019. The Master reduced the bond of security issued to the first two
applicants in relation to the administration of QSG-I to RNil on 21 December 2020.
The applicants submit that this is indicative that their appointments as liquidators of
the 'collapsed companies ' ended.
,
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7
[22] Neither party in argument addressed the relevance of the document issued by
the Master in terms of which the security bond issued in relation t~ QSG- I w~s reduced
to RNil. I am of the view,. however, that it is necessary to reflect that it is only the bond
of security issued in relation to QSG -1 that was reduced. It is al'so necessary to take
cognisance of the exa~t wording of the document:
"The Bond of Security number ~AF520358PTA for R100 000.00 entered into by
SAFIRE INSURANCE COMPANY LIMITED on the 25/07/19 as sureties for Sirs
ELIZABETH WILANDA PRINSLOO & MAHIER MOHAMED TAYOB [in) their
capacity as Liquidators may , as from the date of inception, be reduced to RNil in
respect of future intromissions of the said Liquidators, w ithout derogation from
any liability that there may be on the Principal Debtors, in respect of any act done .
or omission made to the date of reduction".
[23] Up on a plain reading, the appointment of the liquidators was not withdrawn. It
r
is the bond of security that was reduced. The document issued on 21 December 2020
does not refer to section 385 of the Companies Act 61 of 197,3, nor. does it state that
the liquidators' duties have been fully discharged.
[24] In Pieters NO v ABSA Bank Ltd,1 the Supreme Court of Appeal expressed the
view that the issue by the Master of a certificate under section_ 385 permitting the
liquidator to cause the bond of security to be cancelled, in conjunction with the issue
of a certificate under section 419(1) that the company had been completely wound up,
brought the winding Lip process to an end and released the liquidator.,from office. In
the current matter, no section 419(1) certificate was issued in conjunction with the
letter in which the security was reduced. The reduction of the security does not contain
any reference to s 385. It cannot be assumed that the reducti<:>n of the security to nil
confirms the release of the liquidators. The mere reduction of the bond of security is
confirms the release of the liquidators. The mere reduction of the bond of security is
not indicative that the liquidators were released as liquidators of'the three individual
entities.
1 2021 (3) SA 162 (SCA), at para 25.
'
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The declarator sought
[25] In these proceedings, the applicants seek that it be declared that the order
Baqwa-order had the following consequences:
a. QSG-I, JASA and RIALIS were from the date of the order deemed not to
be juristic persons in respect to any right, obligation or liability of the
' Companies, including any obligation in respect of a Tax act as defined
in section 1 of the Tax Adm inistration Act 28 of 2011;
b. SARS no longer had the power to assess the companies for tax.
c. Any representative of the companies (as there may have been prior to
the order) and any office bearer of the companies, such as a director or
liquidator, ceased to occupy such position or office when the order was
issued and no director, liquidator or representative taxpayer could be
appointed for the companies thereafter;
d. The applicants are not representative taxpayers of the companies.
[26] The consequential relief sought is that the income tax assessments for the
years 2013 -2018 issued by SARS on 12 November 2021, 15 November 2021, and
19 November 2021 pertaining to QSG-I and JASA be reviewed and set aside.
I
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Points in limine
[27] SARS raised two points in limine: firstly, that the court lacks jurisdiction, and
secondly, that the applicants lack locus standi because the QSG Investment Scheme
is not a taxpayer .. lt is well established that where a jurisdictional challenge is raised,
this must be decided first.2 For purposes of the first point in limine, it i,s accepted that
the applicants have locus standi, the aspect will only be de~ided when the point is
discussed.
2 Trustees of the CC Share Trust and Others v CSARS (38211 /21) handed down on 24 July 2023 by
Mano im J. https://www.sars.gov.za/legal-counsel/dispute-resolution-judgments/high-court/hc-2025-
2023/ filed at https://www.sars.gov.za/wp-content/uploads/Legal/Judgments/HC/Legal-DRJ -HC -2023-
14-Trustees-of-the-CC-Share-Trust-and-Others-v-CSARS-38211-21-2023-ZAGPPHC -597-24-July-
2023. pdf accessed on 27 July 2025.
9
Does the High Court have jurisdiction to hear the matter?
[28] Regarding jurisdiction, the argument is that it is evident from the second prayer
of the notice of motion that the applicants seek an order setting aside the income tax
assessments raised against the taxpayers.3 SA R S relies on section 105 of the Tax /·
Administration Act, 28 of 2011 ('the TAA'). This section provides as follows:
'A taxpayer may only dispute an assessment or 'decision' as described in section
104 in pro'?eedings under this Chapter, unless a High Court directs otherwise'.
[29] SARS submits that the applicants failed to deal with section 105 of the T AA in
the notice of motion and the founding affidavit, and consequently failed to make out a
case for a direction .as required by the section. SARS contends that the applicants are
endeavoring, under the auspices of a declaratory order in terms of section 21 (1) (c) of
the Superior Courts Act, to circumvent s 105 of the T AA.
[30] SARS relies on the judgment recently handed down by the Constitutional Court
in United Manganese of Kalahari (Pty) Limited v Commissiqner of the South African
Revenue Services and four other cases ('United Manganese ').4 SARS contends that
the applicants failed to req·uest a section 105 direction from this court and that this is
the end of the matter.
[31] The applicants did not seek a section 105 direction in their notice of motion or
in the founding affidavit. In answer to SARS's challenge posed in the answering
I
affidavit, the applicants stated in their replying affidavit that because the judgment in
I •
United Manganese was handed down after the application was launched, they would,
'in an abundance of caution', seek an amendment to the notice of· motion. The
applicants submitted that-
" ... this is a most appropriate matter for the High Court to adjudicate, given the
fact that it turns on points of law .... There is no reason why the appli~ant needs
fact that it turns on points of law .... There is no reason why the appli~ant needs
3 Prayer 2 reads: 'Th!=! income tax assessments for the years 2013-2018 issued by the respondent on
12 November 2021 , 15 November 2021 and 19 November 202·1 pertaining to QSG Consult International
(Pty) Ltd., and Johan A Smit and Associates (Pty) Ltd.) are reviewed and set aside.'
4 [2025) ZACC 22.
10
to be put through the effort and costs of a tax court trial if the more expeditious
motion court proceedings in the High Court can dispose of the matter, as the
applicants contend it should."5
[32] The applicants never sought to amend their notice of motion-. When argument
commenced, counsel for the applicants submitted that a condition application in terms
of section 105 of the T AA is brought as it is the applicants' view that this application
falls outside the purview of section 105. The applicants' position is that the QSG
Investment Scheme ('the Scheme') is not a taxpayer. The Scheme is a new entity
created by the order granted by Baqwa J. The applicants go so far as to state in the
heads of argument that-
"[T]he assessments were made in relation to QSG-1 a!ld JASA. They are the
taxpayers. The taxpayers are not the parties before this court. They do not
dispute their assessments."
As a result, the applicants submit that section 105 does not apply and that the first
point in limine must fail.
Discussion
[33] The chronology filed by the parties, along with the annexures to the respective
affidavits, indicates that after SARS issued notices of assessmert and delivered them
to the liquidators of JASA and QSG-I, as well as the Assistant Master, on 12, 15, and
19 November 2021, respectively. The liquidators of the Scheme objected to the
assessments on 24 January 2022. On 14 February 2022, SARS invalidated the
objections of the liquidators on the basis of sections 95(5) and 100(1 )(a)(i) of the T AA .
No appeal was launched thereafter.
[34] In United Manganese of Kalahari (Pty) Ltd v Commis~ionerof the South African
Revenue Service and four other cases,6 the Constitutional Court dealt with the
interpretation and application of section 105 of the T AA -and. the question of whether
5 Paras 73 and 74 of the replying affidavit.
6 [2025] ZACC 2.
11
taxpayers are entitled to pursue review or declaratory relief in the High Court, having
regard to section 105 of the T AA.
(35] Section 105 applies in matters where a taxpayer disputes an assessment or a
decision as contemplated in section 104 of the TAA. The only ways to dispute
assessments are to have an assessment set aside on review or to seek ·a declaratory
order on the correctness of the assessment.
(36] The facts of this matter, however, render a peculiar result. It is common cause
that assessments were issued for JASA and QSG-1. SARS used these assessments
to prove its claim against the Scheme. It is, however, not JASA and QSG-I that seek
the review and setting aside of the assessments. It is 'the Scheme , an entity both
parties agree is not a taxpayer in the current factual context.
[37] The liquidators challenge SARS ' ability to assess JASA and QSG-I as individual
juristic entities. They aver that the effect of the order granted by Baqwa J was to
extinguish SARS ' ability to assess any of the individual companies. In the founding
affidavit, the liquidators claim that they:
"[D]o not contend that SARS ' right to raise assessments arising from the conduct
of the three companies was extinguished as a result of the Baqwa order. What
was extinguished was SARS' ability to assess any of the three companies by
themselves, and in their previous incarnation. SARS became enti.tled, after the
Baqwa order to assess the QSG Scheme , and to hold it responsible for any tax
delinquency committed by any of the underlying companies."
(38] It is trite that the TAA introduced, among other things, a uniform regime for
objecting to assessments and decisions of the Commissioner for the South African
Revenue Services and appealing such assessments and decisions to the Tax Court.
It is, however, for taxpayers to object to assessments. The issue as to whether the
Scheme would fit the definition of a taxpayer under section 151, and particularly
Scheme would fit the definition of a taxpayer under section 151, and particularly
section 151 (d) of the TAA , was not canvassed. However, both parties agreed that the
Scheme was not a registered taxpayer.
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(39] The novel factual matrix of this matter, wherein an entity that is not the taxpayer
seeks a declarator that might impact the validity of tax assessments, moves the
declarator sought out of the ambit of section 105 of the TAA. Further, the point of law
that needs to be addressed in considering whether to grant the declarator sought is
one of general importance, such that a judgment with precedential value will have
public utility.7
Do the applicants have locus standi in this application?
[40] Due to the impasse between the applicants and SARS, the applicants have an
interest in having the order interpreted for its implications and consequences to be
determined. As a result, they have the necessary locus standi in this application.
Declaratory relief
[41] The next question is whether this court should grant declaratory relief in terms
of section 21 (1 )(c) of the Superior Courts Act 1 0 of 2013. A real controversy exists
between the parties regarding the implications flowing from the order. T~e applicants
have a direct and substa.ntiai interest in having the uncertainty resolved.8
Interpreting the Baqwa-order
I
[42] In interpreting the order, have regard to the founding papers filed in the
application in which the order was sought, the terms of the order read within the
context of section 20(9) of the Companies Act, and the purpose for which the order
was initially sought and consequently granted. The content of the or~er is stated above
and need not be repeated.
(43] The order that is sought to be interpreted was obtained in an application where
SARS was not cited as a respondent. Although the application was served on SARS ,
SARS was not a party to the proceedings. It is trite that any person or entity who has
a direct and substantial interest in the outcome of a matter must be joined as a
7 United Manganese at para [122j.
8 Ex Parte Nell 1963 (1) SA 754 (A).
13
respondent, even if no direct relief is claimed against them. As indicated below, the
application before Baqwa J was brought to facilitate the unified liquidation of the three
subject companies. Where SARS was not cited as a party to the proceedings, the
order cannot, ex post facto, be interpreted_ to affect SARS 's rights in terms of the T AA .
(44]
j
The applicants' counsel submitted that the order operates 'in rem and not in
personam'. This submission does not advance the matter since this court is seized
only with interpreting the order, and not with determining whether any party bound by
it is contravening it or in contempt. For purposes of interpretation, it is irrelevant that
SARS did not appeal the order or failed to apply to be joined to the,earlier proceedings.
If the applicants were of the view that the order would impact SARS ' rights, they ought
to, and would, have cited SARS as a party.
[45] The founding. affidavit in support of the section 20(9) application, however,
reveals that the applicants were of the view that no creditor would be prejudiced or
hampered by the order sought. I find it appropriate to repeat the applicants' own words,
contained in the founding affidavit before Baqwa J:
'As soon as the entire Ponzi scheme has been unraveled and the provisions of
section 20(9) of the 2008 Act applied in respect of all the participants to the Ponzi
scheme , the frozen money must be recovered and distributed amongst the·
creditors who prove claims against the Subject Companies , qua creditors of
QSGA, Rialis and JASA but against the said companies as the newly formed
QSG Investment Scheme - the conglomerate that the constituent entities always
were.' (My emphasis.)
(46] The primary purpose of the application before Baqwa J was to consolidate the
liquidation of the subject companies. The applicants explained in the founding affidavit
that:
'If so, the [liquidators] duly appointed by the Master of the High Court, can then -
that:
'If so, the [liquidators] duly appointed by the Master of the High Court, can then -
in relation to all of the Companies concerned and pursuant to one composite
winding-up process:
administer the winding up process in relation to all three companies in one
process, which would not only save costs but substantial resources.'
14
[47] This, the applicants averred, would benefit 'not only one but all the creditors of
the Subject Companies.' The fact that SARS was not cited as a party supports a finding
that the order must be interpreted so as not to prejudicially affect SARS' rights. This,
however, is only one of the aspects creating the context within which the order is
interpreted.
[48] Adding to the relevant context is JASA and RIALIS's final winding-up
subsequent to the order being granted. If the applicants themselves held the view that
the effect of the order was to terminate the juristic personalities of the three subject
companies, it would not have been necessary to have the individual entities finally
wound up after the Baqwa order was granted.
[49] This brings us to the context of seeking an order in terms of section 20(9) of the
Companies Act. The Baqwa order provides that the subject companies are declared
a 'single entity as contemplated in section 20(9) of the Companies Act'.
[50] Section 20 of the Companies Act 71 of 2008 is titled 'Validity of company
actions.' It falls under Chapter 2 - 'Formation, Administration and Dissolution of
Companies' Part B- 'Incorporation and legal status of companies'. Subsection (9)
provides as follows:
"If, on application by an interested person or in any proceedings in which a
company is involved, a court finds that the incorporation of the company, any
use of the company, or any act by or on behalf of the company, constitutes an
unconscionable abuse of the juristic personality of the company as a separate
entity, the court may-
(a) declare that the company is deemed not to be a juristic person in respect
of any right, obligation or liability of the company or of a shareholder of
the company: or any act by or on behalf of the company or, in the case of
a non-profit company, a member of the comp~ny, ?r of another person
specified in the declaration; and
(b) make any further order the court considers appropriate to give effect to a
(b) make any further order the court considers appropriate to give effect to a
declaration contemplated in paragraph (a)".
15
[51] Section 20(9) is a deeming provision.
[52] In Eastern Cape Parks and Tourism Agency v Medbury (Pty) Ltd, 9 the Supreme
Court of Appeal explained, with reference to 'Bennion Statutory Interpretation 3 ed
1997', that deeming provisions 'often deem things to be what they are not. In
construing a deeming provision, it is necessary to bear in mind the legislative purpose'.
(53] In Mouton v Boland Bank ,10 th~ court was seized with interpreting section 26(7)
of the Close Corporations Act 69 of 1984. Here, the court affirmed the position stated
in Bennion Statutory Interpretation 3rd ed, section 304, p 736, that -
'The intention of a deeming provision, in laying down a hypothesis, is that the
hypothesis sh~II be carried as far as necessary to achieve the legislative purpose,
but no further.'
[54] The purpose qf section 20(9) of the Companies Act is to provide a statutory
basis for piercing the corporate veil, 11 and to empower the court to grant consequential
relief. The hypothesis created through the deeming provision should thus be carried
only as far as necessary to achieve the purpose of the legislator. There is a huge
difference between a c~mpany being 'deemed not to be a juristic person' and a
company 's juristic personality being extinguished or terminated.
[55] As a creature of statute, a juristic person, like a natural person, has. a life cycle.
Its legal existence is regulated by the Companies Act 71 of 2008. From the date and
time that the incorporation of a company is registered, the company is a juristic person
that exists continuously until it is deregistered and its name is removed from the
Companies Register in accordance with the provisions of the ColJ)panies Act.12 A duly
registered company is a distinct legal persona, albeit a persona by a fiction of law. The
fact that a legal persona comes into existence through a fiction of law does not imply
9 2018 (4) SA 206 (SC A). at para (29].
10 2001 (3) SA 877 (SCA ), at para [.13].
9 2018 (4) SA 206 (SC A). at para (29].
10 2001 (3) SA 877 (SCA ), at para [.13].
11 Ex Parte Gore & Others NNO 2013 (3) 382 (WCC) , at para [30).
12 S 19 of the C om panies Act.
16
that it is a figm ent of the imagi!1ation. The fiction is foundational of South African
com pany law. As a result, a duly registered company is a legal entity in its own right,13
limited only by the boundaries of its abstract essence.
[56] The common law principle of 'piercing the corporate veil' permits disregarding
the separate legal personality of companies· in certain instances. Section 20(9) of the
Companies Act statutorily broadened the bases upon which courts may grant relief
that entails disregarding corporate personality.14 Binns-Ward J aptly explained in Gore
that section 20(9)(b) affords the court very wide powers to grant consequential reHef.15
I agree with his view that an order made in terms of section 20(9)(b) -
' ... will always have the effect, however, of fixing the right, obligation or liability in
issue of the company somewhere else.'
[57] In the current case, the 'liability' involved is the subject companies' respective
tax liabilities toward SARS. The liab_iliJy is not extinguished. It did not evaporate. It can
only be determined with reference to the subject companies. It is, however, fixed
somewhere else - in this case, in the.Scheme.
[58] Wepener J explained in Centaur Mining South Africa (Pty) Ltd v C/oete Murray
NO and Others, 16 t~~t ·where two or more entities in iiqLJidation are collapsed, the
separate concursus in. ~a.eh will fall away to become a single concursus in the
liquidated entities. Wepener J. hinted at .a 'myriad of consequences in any case of a
collapse'17 but was not required to ·elaborate on the issue. What is relevant for
purposes of interpretir_ig the Baqwa order, is that the Mc;1ster in Centaur Mining
proceeded to deregister the companies instead of reflecting them as having been
liquidated. To this, Wepener J responded:
13 Dadoo Ltd v Krugersdorp Municipal Coun cil 1920 AD 530.
14 Gore, above n 11 , ~t para (33].
15 Gore, above n 11, at para (34 ].
16 2023 (1) SA 499 (GJ) at para (33].
17 Centaur Mining, above, para [34].
17
'It does not affect the court order. lfthe Master erred, appropriate relief should be
sought against the Master.'
[59] Wepener J's remark supports the view that the 'collapsing' of companies into a
single entity under section 20(9) of the Companies Act does not mean that the . , . .
individual companies cease to exist or that their juristic personality is terminated.
I
[60] The applicants submit that SARS did not lose any rights under the Baqwa order,
but only lost the administrative power to collect taxes from the three subject
companies. They continue, however, to state that the assessments could no longer be
issued against the subject entities because they do not Have legal personality.
According to the applicants, any assessment would have to be directed at the new
entity as represented by the liquidators. I disagree. The tax liability of the su~ject
companies arose within each individual company and had to be assessed accordingly:
The debts became due in the hands of the subject companies, but are, as a result of
the order, payable through the purse of the Scheme. This is so because the subject
companies' resources are pooled in the Scheme.
[61] Despite denying it, the applicants essentially contend for an interpretation of the
Baqwa order that would lead to the extinction of the tax liability of the subject
companies. This contention is untenable, The consequence of the.Baqwa order is only
that the procedure for collection by way of liquidation shifted to the consolidated entity.
(62] As a result, the declaratory relief sought cannot be granted. The application
stands to be dismissed, with costs of two counsel on scale B and C, respectively. No
case has been made for punitive costs.
Order
In the result, the following o~der !!l granted:
1. The applicqtion is dismissed with costs, including costs of two counsel
on scale Band C, respec;;tively.
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..
• ....
-"""""""' .... ··--··
E van der Schyff
Judge of the High Court
Delivered: This judgment is handed down electronically by uploading it to the electronic file of
this matter on Caselines. In the event that there is a discrepancy between the date the
judgment is signed and the date it is uploaded to Caselines, the date the judgment is uploaded
to Caselines is deemed to be the date that the judgment is handed down.
For the applicants:
With:
Instructed by:
For the first respondent:
With:
Instructed by:
Date of the hearing:
Date of judgment:
Adv. PF Louw SC
Adv . R Mastenbroek
Mothilal Attorneys Inc
Adv. L Kilmartin SC
Adv . J Fourie
KEBD Attorneys
5 June 2025
29 August 2025 .
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