SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in
compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
LIMPOPO DIVISION, POLOKWANE
CASE NO: 5045/2023
(1) REPORTABLE: YES/NO
(2) OF INTEREST TO THE JUDGES: YES/NO
(3) REVISED: YES/NO
DATE: 11/09/2025
SIGNATURE:
In the matter between:
THAW CONSTRUCTION (PTY) LTD APPLICANT
(REG. NO: 2016/272328/07)
AND
LEKOTU ENTERPRISE RESPONDENT
(REG. NO: 2016/530644/07
JUDGMENT
NGOBENI J
[1] The applicant is Thaw Construction (Pty) Ltd , a co mpany registered and
incorporated in terms of the company laws of South Africa, with its registered
address at [...] B[...] Street, Rusternburg, North West, 0300.
[2] The respondent is Lekotu Enterprise, a company duly registered and
incorporated in terms of the company laws of South Africa, with its registered
address situated at 1[...] T[...] Street, Ga-Mampuru, Steelpoort, Limpopo, 1133.
[3] The applicant alleges th at this court has jurisdiction to hear this matter because
the respondent’s registered address is situated within the area of jurisdiction of
this court, and that aspect is not in dispute.
[4] This is an application for the winding -up of the respondent based on the reasons
that on or about 03 February 2021 the applicant and the respondent entered into
a written building contract, where the terms of the contract were that the
applicant rendered certain professional building services to the respondent at t he
request of the respondent. The applicant rendered the building services required
in terms of the building contract. In terms of the building contract the total amount
payable by the respondent was the sum of R28 404 955-55. The respondent paid
only an a mount of R25 737 762-27 to the applicant. The balance of the amount
owing is R2 669 193-22.
[5] The applicant further alleges that a notice in terms of the provisions of section
345(1)(a)(i) of the old Companies Act 61 of 1973(Act 61 of 1973) 1 was delivered
1 “345 When company deemed unable to pay its debts
(1) A company or body corporate shall be deemed to be unable to pay its debts if-
(a) a creditor, by cession or otherwise, to whom the company is indebted in a sum not less than one
hundred rand then due-
(i)has served on the company, by leaving the same at its registered office, a demand requiring the
company to pay the sum so due, or
to the respondent and to its directors. On 06 December 2022 the respondent
sought clarity regarding the claim after acknowledging receipt of the notice. The
attorneys of the respondent responded to the respondent and provided further
details of the cl aim. A period of 21 days has lapsed and the respondent has
failed to pay the amount owed.
[6] The applicant further submits that the respondent is commercially and factually
insolvent because the respondent is unable to pay its debt s, and falls to be
wound up by this court , as provided for in section 346(1)(b) of Act 61 of 1973 ,
read with schedule 5 of the Companies Act 71 of 2008 (new Companies Act or
Act 71 of 2008), which deals with ‘Transitional Arrangements’ and section 9 of
Act 71 of 2008 which deals with continued application of the previous Act, being
Act 61 of 1973, to winding-up and liquidation, and that is despite the repeal of Act
61 of 1973.
[7] The application for the winding -up of the respondent is opposed for the reasons
that will follow. The parties entered into a Joint Building Contracts Committee
(JBCC or the Principal Building Agreement) on a contract value for the amount of
R25 735 762-27. If there were adjustments to be made outside the amount of the
contract value, the parties were to follow the terms of clause s 26.5, and this was
raised as the third point in limine by the respondent.
[8] I will deal with the points in limine in the judgment, but it might not be in the order
that they were raised. The first and second points in limine are related, and I shall
therefore deal with them together. The first point in limine raised is that the
applicant did not comply with the provisions of clause 30.2 of the Joint Building
(ii)…,
(b) any process issued on a judgment, decree or order of any court in favour of a creditor of the
company is returned by the sheriff or the messenger with an endorsement that he has not found
company is returned by the sheriff or the messenger with an endorsement that he has not found
sufficient disposable property to satisfy the judgment, decree or order or that any disposable
property found did not upon sale satisfy such process, or
(c) it is proved to the satisfaction of the Court that the company is unable to pay its debts.
(2) In determining for the purpose of subsection (1) whether a company is unable to pay its debts, the
Court shall also take into account the contingent and prospective liabilities of the company.
Contracts Committee - Principal Agreement (JBCC or Principal Bu ilding
Agreement) in that the parties did not attempt to resolve the disagreement
between them and record a resolution in writing signed by them, and if they could
not resolve the issue between themselves, they were supposed to refer the
matter for arbitra tion in terms of clause 30,7 of the Principal Building Agreement
(Agreement). The second point in limine is that this court lacks jurisdiction to deal
with this matter as clause 30.2, 30. 3 and 30.7 of the Agreement mandates that
arbitration should have been invoked to resolve the dispute between the parties.
[9] In Crompton Street Motors CC vs Bright Idea Projects 2 the Constitutional Court
confirmed that a party who wished to stop legal proceedings and insists on a
dispute being dealt with in terms of an arbitration agreement had two avenues for
achieving that:
(i) a substantive application in terms o f section 6 of the Act to stay the court
proceedings, or
(ii) by way of a special plea in the action requesting a stay of the proceedings
pending the determination of the dispute by arbitration.
[10] One of the reasons for refusing to stay the proceedings fo r referral to arbitration
in the Crompton Street Motors case, supra, was that the relief sought by
Crompton Street Motors was not capable of being decided by an arbitrator. The
proceedings at hand is motion proceedings. Provision is made for motion
proceedings in that section 6(1) of the Arbitration Act 3 states that any party to
the proceedings may after entering appearance but before delivering any
pleadings or taking any further steps in the proceedings, apply to that court for a
stay of such proceedings.
2 2022 (1) SA 317 (CC) (3 September 2021).
3 42 of 1965.
[11] The application that is before this court is for the winding up of the respondent.
This is an application which according to provisions of section 345 and 346 of the
old Companies Act 4, should be brought before a Court which will then give
directives as to what is to happen about the application. It is now well established
that an arbitration agreement does not oust the jurisdiction of the courts 5. The
Supreme Court of Appeal made it very clear in Fleet Africa (Pty) Limited v
Polokwane Local Munic ipality6 that it is now established that parties cannot
completely exclude a court’s jurisdiction through their mutual agreement.
Consequently, the high court do es not have the authority to refuse to hear cases
appropriately brought before them within thei r jurisdiction 7. Therefore, the first
and second points in limine by the respondent to refer the matter for arbitration
and lack of jurisdiction are bound to fail.
[12] The fourth and fifth points in limine raised is that the applicant failed to join the
plant agent who has a direct and substantial interest in any order that this court
may make and the funders of the respondent in the project because they are the
major creditors and sponsors and have a direct and substantial interest in the
outcome of this application. I will deal with the fourth and fifth points in limine
together on joinder because the principle is the same. Mboweni AJ in his
judgment in Accola v Sboro and Another 8 dealt with a joinder application and
quoted the three cases that I refer to hereunder.
[13] Joinder of parties and causes of action in the high court is governed by
provisions of Uniform Rule (Rule/s) 10. The circumstances or te st under which a
party can be joined or not was clearly explained in ABSA Bank Limited v Naude
N.O.9 as follows:
4 61 of 1973.
5 The Rhodesian Railways Limited v Mackintosh 1932 AD 359 AT 375.
6 (720/2022) [2023] ZASCA 142 (30 October 2023).
6 (720/2022) [2023] ZASCA 142 (30 October 2023).
7 Standard Bank of SA Ltd and Others v Thob ejane and Others [2021] 3 All SA 812 (SCA) , South
Paradigm (Pty) Ltd v Mquqo Attorneys and Another (2732/2021) [2022] ZAECGHC 7 (14 April 2022).
8 (024263/2022) [2024] ZAGPPHC 379 (17 April 2024).
9 (20264/14) [2015] ZASCA 97 (1 June 2015) ; It was held in Judicial Service Commission and Another v
Cape Bar Council and Another (Centre for Constitutional Rights as amicus curiae ) (818/11) [2012]
“The test is whether or not a party has a direct and substantial interest in the
subject matter of the action, that is a legal interest in the subject matter of the
litigation which may be affected prejudicially by the judgment of the court.
A mere financial interest is an indirect interest and may not require joinder of a
person having such an interest.
The rule is that any person is a necessar y party and should be joined if such
person has a direct and substantial interest in any order the court might make, or
if such an order cannot be sustained or carried into effect without prejudicing,
that party, unless the court is satisfied that he or sh e has waived his or her right
to be joined”.
[14] In Bowring N.O. v Vrededorp Properties CC10 the Supreme Court of Appeal said
that the mere fact that the party may have an interest in the outcome of the
litigation does not warrant a joinder plea. The right of a party to validly raise the
objection that other parties should be joined to the pro ceedings, has thus been
held to be a limited one.
[15] The proceedings at hand are for the winding up of the respondent for failure to
pay an alleged debt. The Funders of the building project might have funded the
project, but I fail to see as to how are they directly affected by the agreement
between the applicant and the respondent, because there is no role that they
directly have to play to the applicant. The circumstances under which the
Funders funded the project are between the respondent and the Funders and not
the applicant. The terms of the JBCC -Principal Building Agreement is between
the applicant and the respondent. The Funders might of course be in terested in
knowing as to whether the respondent is wound-up or not, but that does not
mean that they have direct interest to an extent that they can be joined.
ZASCA 115 (14 September 2 012) that it has now become settled law that the joinder of a party is only
required as a m atter of necessity as opposed to a matter of convenience. If that party has a direct and
substantial interest which may be affected prejudicially by the judgment of the Court in the proceedings
concerned.
10 2007 (5) SA 239 (SCA) et 21.
[16] The applicant as it appears cannot bring any claim against the Funders , but only
against the respondent. In the ABSA Bank case, supra, it was rightly said that a
mere financial intere st i s an indirect interest and may not require joinder of a
person having an interest. In my view that can be the only interest of the Funders
who are not even c ontracted to the applicant to these proceedings. When one
acts as an agent, the role is exactl y that of an agent. The actions of the agent to
which the agent is mandated to carry out will then bind the principal. The
relationship that is there, if any, i s between the respondent, the Funders and the
agent. The fourth and fifth points in limine are also bound to fail.
[17] I now deal with the third point in limine which was raised as follows:
In terms of clause 26.5 of the Building Agreement:
“The contractor shall give notice to the principal agent within twenty (20) working
days of becoming aware , or ought to reasonably to have become aware of
expense and/or loss for which provision was not required in the contract sum
failing such claim shall be forfeited.”
[18] It is common cause that the accepted or agreed contract sum was R25 836 827-
73, b ut the final cont ract amount as certified by the principal agent was
R28 404 955-55. The submission by the applicant on this aspect is that the
respondent is bou nd by what the principal agent certified as correct and even
signed the final statement of acco unt. On the other hand the respondent argues
that the principal agent approve d something that was outside his mandate and
therefore the respondent cannot be held responsible for that. The reason why I
deal with this point in limine last is because its discussion will automatically delve
into the merits of what th is court has to eventually decide, being whether the
responded must be liquidated for inability to meet or pay its debt to the applicant.
[19] The principal agent of the respondent in the case at hand issued a final
statement of account in which a final contract amount of R28 404 955-55 was
accepted by the principal agent of the respondent, despite the fa ct that the initial
contract amount was R25 735 762-27. Clause 26.5 does allow that during the
performance of duties pertaining to the contract, there might be adjustments.
Those adjustments to the original contract must be brought to the attention of the
principal agent within 20 working days of becoming aware of such.
[20] It is common cause that the principal agent in the case at hand eventually issued
the final statement of account, which I believe that he issued it because he was
satisfied with the work done including the adjustments. The respondent submits
that it is not unable to pay the de bt, but needed details of the debt, as it differs
from the original amount they agreed on.
[21] In my view that is what these proceedings will eventually turn to, being whether
the principal agent acted according to the mandate that was given to him. These
are application proceedings, which in their nature are decided from the papers
and affidavits as filed without the benefit of oral evidence where issues can b e
interrogated. I’m in no way intending to go that route because I do believe that
this matter can be decided on what has been presented before this court.
[22] The view of the court in Orestisolve (Pty) Ltd t/a Essa Investments v NDFT
Investments Hold ings (Pty) Ltd and Another (Namakwaland Diamond Fund
Trust-Intervening)11 is that the applicant must establish its case on a balance of
probabilities, and where the facts are disputed, the court is not permitted to
determine the balance of probabilities on the affidavits but must instead apply
the Plascon-Evans rule, and the applicant w ould then fail, unless if the court is
persuaded to hear oral evidence. In the case at hand I have already stated that it
persuaded to hear oral evidence. In the case at hand I have already stated that it
does not appear to be the route I intend taking.
11 (18414/140) [2015] ZAWHC 71; 2015 (4) SA 449 (WCC) (28 May 2015).
[23] The court again in the Orestisolve case, supra, on the issue of factual disputes
went on to say on paragraph 8 of the judgment th at e ven if the applicant
establishes its claim on a prima facie basis, a court will ordinarily refuse the
application if the claim is bona fide disputed on reasonable grounds . In the case
at hand the respondent was served with a notice in terms of the provisions of
section 345(1)(a)(i) of the old Act 61 of 1973 for the payment of the amount of
R2 669 192-33. The respondent instead of making a payment as demanded,
instead requested through an electronic mail on 06 Dec ember 2022 to be
provided with detailed information regarding the claim of the applicant so that it
could fully understand what the claim was based on.
[24] The applicant responded through an electronic mail as well and replied by stating
that the final contract amount payable to the applicant as certified by the principal
agent amounted to the sum of R28 404 955-55, and as only R25 736 762-67
was paid, the b alance that remain ed was R2 669 192-33.The amount remain
unpaid to date hence the applicant bro ught this application on the basis that the
respondent is unable to pay its debt that is owed to the applicant.
[25] In Badernhorst v Northern Construction En terprises (Pty) Ltd 12, a principle was
established in this case which came to be known as the Badernhorst rule, which
established that winding-up proceedings should not be resorted to as a means of
enforcing payment of a debt the existence of which is bona fide disputed on
reasonable grounds. The respondent in this case submits that it has reasonable
grounds to dispute the claim based on the mandate given to the principal agent ,
because the principal agent approved the final statement of account in
contravention of the Agreement.
12 1956 (2) SA 346 (T).
[26] It is not strange to raise a defence that the agent did not perfo rm as mandated.
An example is in the case of David Trust v Aegis Insurance Co. Ltd13, where the
agent deviated from the terms of his mandate of investing the fund s of the
plaintiffs in certain pre -approved institutions, but the agent instead invested the
money in his own name, and he had no license to invest such money, resulting in
the plaintiffs losing their investments because of theft by another person. The
agent was held liable for the loss because of the breach of his mandate. The
court on paragraph 20 of that judgment went on to say that:
“It is one of the naturalia of each such contract, as it is of contracts of mandate in
general, that the mandator y is obliged, first, to perform his functions faithfully,
honestly, and with care and diligence , and, secondly, to account to his principals
for his actions”
[27] The applicant referred the court to the case of Joob Joob Investments (Pty)Ltd v
Stocks Mavundla Joint Venture14, where the Supreme Court of Appeal, on appeal
upheld the reasoning by Gorven AJ that a final payment certificate is treated as a
liquid document since it is issued by the employer’s agent, with the consequence
that the employer is in the same position it would have been in if it had itself
signed the acknowledgement of d ebt in favour of the contactor. It was further
confirmed that the certificate embodies an obligation on the part of the employer
to pay the amount contained ther ein and gives rise to a new cause of action
subject to the terms of the contract.
[28] The distinction in the proceedings at hand and the case of Joob Joob, supra, is
that the proceedings at hand are for the winding -up of a company, which if the
application for the winding-up the respondent is granted, the respondent will
probably cease to exist. In a summary judgment the court proceedings that lead
probably cease to exist. In a summary judgment the court proceedings that lead
13 [2000] 2 All SA 297 (A), 2000 (3) SA 289 (SCA) , ABSA Bank Ltd v Arif and Another 2014 (2) S A 466
(SCA), where bank was not held liable for the actions of the bank manager who conclud ed illegal
agreements with clients in order to defraud the fiscus.
14 2009 (5) SA 1 (SCA).
to such an order being made against a respondent are proceedings that are just
curtailed or shortened for l ack of a sustainable defence to the claim that is liquid
in form, but that does not affect the existence of an entity. The dire
consequences of the winding -up of a company are evident from the fact that
section 346(4A)(a) of Act 61 of 1973 req uires that an application for the winding-
up of a company must be served:
(i) “to every registered trade union that, as far as the applicant can
reasonably ascertain, represents any of the employees of the company;
and
(ii) to the employees themselves-
(aa) by affixing a copy of the application to any notice board to which the
applicant and the employees have acce ss inside the premises of the
company; or
(bb) if there is no access to the premises by the applicant and the
employees, by affixing a copy of the application to th e front gate of the
premises, where applicable, failing which to the front door of th e premises
from which the company conducted any business at the time of the
application;
(iii) the South African Revenue Service, and
(iv) to the company, unless the appl ication is made by the company, or court
at its discretion, dispenses with th e furnishing of a copy where the court is
satisfied that it would be in the interests of the company or of the creditors
to dispense with it”.
[29] The knowledge about the winding-up by the institutions that are mentioned above
is very imp ortant because the winding -up of a company would likely affect them
negatively. It is therefore important for a court that is called upon to wind up a
company to be vigilant in terms of being cer tain that, winding -up is the only
option remaining. A court t hat is called upon to make such a decision must be
certain that indeed the company is unable to meet its obligations and therefore
should be wound-up so that its assets, if any can be liquidated to satisfy its debts
as much as possible.
[30] In the case at hand the parties initially entered into an agreement that amount ed
to a relatively substantial amount of money of R25 735 762-27, which was paid
by the respondent without any difficulty as the facts of the case point out. The
amount that is the cause of this application is comparatively smaller to the
amount that was paid without difficulty. The submission by the respondent is that
it is not unable to pay the amount, but that the amount shou ld be clearly
accounted for. This court is unfortunately not tasked with that duty of determining
the justification of the alleged amount of debt. In my view though, because of the
adverse consequences that comes with winding -up of a company, it is not a
process that I believe must be resorted to easily, and especia lly in this case
because of some of the reasons that I have already explained.
[31] I am of the view that there are other means in which the amount can be
recovered if that amount is indeed o wed, in line with the Badernhorst rule. I am
rather dissuaded not to act in a manner that will negatively impact on many lives
if there are other means for recovery if justified. I am therefore inclined to accept
that the procedure that was to be followed in terms of clause 26.5 of the
Agreement might have been foll owed, hence the final statement of account was
issued, but be that as it may that in my view does not prevent the employer or the
respondent to know as to how the adjustments came about. There are no other
creditors who came up to claim their dues against the respondent. That is also
another reason why this court will not be quick to dismantle the respondent.
[32] In the result the following order is made:
(i) The application for the final winding-up of the respondent is dismissed,
(ii) The applicant is ordered to pay costs on party and party scale B.
___________________________
J.T. NGOBENI
Judge of the High Court
Appearances
Attorney for the Applicant : Mr. J. Moolman
Instructed by : SLH Incorporated
Counsel for the Respondent : Adv. P.E. Mmutle
Instructed by : M & M Maiwashe Attorneys
Date of hearing : 31 July 2025
Date of judgment : 11 September 2025
Judgment transmitted electronically