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Hazendal Wine Estate v Pure Electrical Solutions (2025/123216) [2025] ZAWCHC 494 (27 October 2025)

82 Reportability
Company Law
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Brief Summary

Company Law — Winding-up — Urgent application — Applicant sought a final winding-up order against the respondent due to diversion of large advance payments to personal accounts of shareholders, with no services rendered — Respondent's tender to repay accepted but not honoured — Court found insolvency established and urgency justified due to undisputed diversion of funds and lack of explanation — Shareholder's invocation of right to silence in civil proceedings deemed misplaced, allowing for adverse inferences to be drawn.

Comprehensive Summary

Case Note


Hazendal Wine Estate v Pure Electrical Solutions, High Court of South Africa (Western Cape Division, Cape Town), Case No. 2025-123216 (27 October 2025)


Coram: O’Brien AJ

Date heard: 11 September 2025

Date delivered: 27 October 2025


Reportability


This judgment is reportable because it deals with recurring and important questions in company law and civil procedure: the threshold and evidential burden for urgent winding-up applications, the treatment of a debtor’s tender to repay as an admission of indebtedness, and the extent to which an individual may invoke the constitutional right to silence in civil proceedings to avoid accounting for funds. The case is particularly significant in clarifying that, in civil matters, a party’s reliance on the “right to remain silent” is limited and may justify adverse inferences where unexplained dissipation of funds is alleged.


The court also provides a principled application of Uniform Rule 6(12), cautioning against undue formalism in urgency determinations and reaffirming that the rules exist to facilitate the expeditious resolution of disputes. The analysis ties procedural urgency to undisputed financial facts, including large advance payments, non-performance, an unfulfilled repayment tender, and the risk of asset dissipation.


Further, the judgment canvasses the interface between section 35 of the Constitution and civil proceedings, revisiting classic authorities on managing parallel civil and criminal exposure, and the post-Ferreira v Levin framework for compellability and use immunity under section 417 of the Companies Act 61 of 1973 (as amended). These aspects make the decision a useful reference for practitioners in insolvency, commercial litigation, and constitutional procedure.


Cases Cited




  • Commissioner, South African Revenue Service v Hawker Air Services (Pty) Ltd; Commissioner, South African Revenue Service v Hawker Aviation Partnership and Others 2006 (4) SA 292 (SCA)




  • Federated Trust Ltd v Botha 1978 (3) SA 645 (A)




  • Gratus & Gratus (Pty) Ltd v Jackelo 1930 WLD 226




  • Equisec (Pty) Ltd v Rodriguez and Another 1999 (3) SA 113 (W)




  • Du Toit v Van Rensburg 1967 (4) SA 433 (C)




  • Irvin & Johnson Ltd v Basson 1977 (3) SA 1067 (T)




  • Ferreira v Levin NO and Others; Vryenhoek and Others v Powell NO and Others 1996 (1) SA 984 (CC)




  • Afgri Operations Ltd v Hamba Fleet (Pty) Ltd 2022 (1) SA 91 (SCA)




  • Kalil v Decotex (Pty) Ltd 1988 (1) SA 943 (A)




Legislation Cited




  • Constitution of the Republic of South Africa, 1996, section 35(1)(c), section 35(3), and section 35(3)(j)




  • Companies Act 61 of 1973, sections 344(f), 345(1)(a), 346(4A), and 417(2)(b)–(c) (as amended)




  • Judicial Matters Amendment Act 55 of 2002, section 10 (amending Companies Act s 417)




Rules of Court Cited



  • Uniform Rule 6 and Rule 6(12) of the Uniform Rules of Court


HEADNOTE


Summary


The applicant, Hazendal Wine Estate, brought an urgent application to wind up the respondent, Pure Electrical Solutions, following the payment of a substantial project deposit under a service level agreement to relocate Eskom pylons and to procure electromagnetic field (EMF) reactors. The applicant paid R32,000,000 as an advance deposit for Phase 1 payments to Eskom and Adenco and a further R7,950,000 for EMF reactors. No services were rendered, no reactors were procured, and substantial funds were diverted to the personal bank accounts of a shareholder, Pretorius.


When challenged, the respondent tendered repayment of R39,750,000 by 31 August 2025, which tender the applicant accepted. The tender was not honoured. In the proceedings, Pretorius sought to invoke a “right to silence” to avoid explaining the flow of funds. The court held that such reliance is misplaced in civil litigation and drew adverse inferences from the non-disclosure and the undisputed diversion of funds.


The court held the matter to be urgent within the meaning of Uniform Rule 6(12), granted a provisional winding-up order, and issued a rule nisi with service directions, holding that the admitted indebtedness and failure to pay demonstrated commercial insolvency, and that any speculative counterclaims cannot defeat a liquidation application in the face of an acknowledged debt and inability to meet it.


Key Issues




  • Whether the application was appropriately brought as an urgent matter under Uniform Rule 6(12) in light of the risk of further dissipation of funds and the admitted debt.




  • Whether the constitutional right to remain silent can be invoked by a company shareholder in civil proceedings to avoid accounting for funds, and the permissibility of drawing adverse inferences.




  • Whether the respondent’s tender to repay, accepted but not honoured, constitutes a binding admission of indebtedness, supporting a finding of commercial insolvency for winding-up purposes.




Held


The court held that urgency was justified and condoned non-compliance with the rules, pointing to the undisputed diversion of monies, the respondent’s tender to repay, and the absence of any coherent explanation of the whereabouts of the funds. The purpose of the rules is to facilitate expeditious resolution, not to obstruct access to relief.


On the “right to silence” contention, the court held that section 35 protections are specific to arrested, detained, or accused persons in criminal matters; in civil proceedings, adverse inferences may be drawn from silence or failure to explain matters peculiarly within a party’s knowledge. The court referenced the jurisprudence on compellability and use immunity in corporate insolvency enquiries to demonstrate that disclosure in civil processes does not necessarily prejudice future criminal proceedings.


The court found that the respondent’s accepted tender to repay R39,750,000, coupled with non-payment and unexplained personal transfers exceeding R21 million, disclosed commercial insolvency. There was no bona fide dispute on reasonable grounds. A provisional winding-up order issued, with a rule nisi return date, and with directions for service, including on employees, trade unions, and SARS. Costs were ordered to be costs in the liquidation.


THE FACTS


Hazendal Wine Estate operates from Stellenbosch and sought to relocate several Eskom pylons which detracted from the tranquility and operations of its estate. The respondent, through its principal, Theart, and shareholder Pretorius, represented that they had access to Eskom expertise and could complete the project by year-end. In early January 2024, preliminary work was mooted; on 10 July 2024 the parties concluded a service level agreement with a total project cost of R63,250,000 (including VAT) plus a 2.5% commission. A deposit of R32,000,000 was payable on signature, with further phased payments to follow. On the same day, the applicant also paid R7,950,000 to the respondent for EMF reactors, based on representations made by Pretorius.


Despite repeated follow-ups and assurances during 2024 and into 2025, the project did not commence. No cost estimate letter from Eskom materialised, no EMF reactors were procured, and the respondent failed to attend a key site meeting arranged by the applicant. An investigation by the applicant uncovered irregularities including allegedly fraudulent invoices generated by a former employee, Coetzee, and invoices purportedly implicating Adenco for work predating the project’s commencement. Eskom had not concluded any agreement with the respondent in relation to the project.


Further, a handwritten schedule provided by Theart revealed that project monies were applied to unrelated items such as a SARS liability. Bank records showed that between March 2024 and May 2025, R13,815,000 was paid into Pretorius’s Capitec account, and between July 2024 and May 2025, R7,579,000 was paid into his Discovery account, totalling R21,394,000 in personal transfers. None of these outflows was explained, and the EMF reactors were never delivered.


In response to the applicant’s termination of the service level agreement and the EMF reactor purchase, the respondent tendered to repay R39,750,000 by 31 August 2025. The applicant accepted the tender. The tender was not honoured by the deadline or by the time of the hearing. The respondent offered no substantive accounting for the funds and took refuge in a purported right to remain silent due to alleged potential criminal implications.


THE ISSUES


The primary issue was whether the court should entertain the matter as one of urgency under Uniform Rule 6(12), given that the applicant sought immediate winding-up relief to prevent further dissipation of funds and in light of the respondent’s unfulfilled repayment tender.


A further issue was the respondent’s reliance on a constitutional right to remain silent as a basis for refusing to answer allegations about the flow of funds. The court had to determine whether, in civil proceedings, a litigant could invoke section 35 rights to avoid disclosure and whether adverse inferences could be drawn from such silence.


Finally, the court had to decide whether the jurisdictional prerequisites for a provisional liquidation order had been met: namely, whether there was an admitted or indisputable indebtedness, an inability to pay (commercial insolvency) within the meaning of sections 344(f) and 345(1)(a) of the Companies Act 61 of 1973, and whether any asserted dispute or counterclaim was bona fide and raised on reasonable grounds.


ANALYSIS


On urgency, the court adopted a practical stance aligned with Commissioner, South African Revenue Service v Hawker Air Services and Federated Trust Ltd v Botha, emphasising that the rules are to secure the expeditious completion of litigation and are not an end in themselves. The undisputed deposit, the non-performance, the admitted tender to repay, and the personal diversion of substantial funds created a cogent case for urgent intervention. The respondent suffered no prejudice: the matter had been postponed, enabling the filing of a supplementary answering affidavit and heads. In these circumstances, the court held that the applicant was justified in invoking Rule 6(12).


On the “right to silence”, the court distinguished criminal from civil contexts. Section 35(1) and (3) of the Constitution protect arrested, detained, and accused persons in criminal proceedings. In civil proceedings, however, courts may draw adverse inferences from a litigant’s failure to explain facts within their peculiar knowledge. The court traced the jurisprudence on managing parallel civil and criminal exposure, noting that while courts may guard against compelling self-incrimination, the ordinary remedy is not to stay civil proceedings. Authorities such as Gratus & Gratus v Jackelo, Equisec v Rodriguez, Du Toit v Van Rensburg, and Irvin & Johnson v Basson illustrate judicial approaches that limit prejudice without halting civil processes.


The court also referred to Ferreira v Levin; Vryenhoek v Powell and the legislative response in section 10 of the Judicial Matters Amendment Act 55 of 2002, which amended section 417(2) of the Companies Act 61 of 1973. The current regime permits compulsion to answer in enquiries while conferring use immunity (save for perjury), underscoring that disclosure in civil contexts does not automatically prejudice future criminal proceedings. Against that framework, Pretorius’s blanket invocation of the right to silence in an answering affidavit was untenable, and his failure to account for the funds properly invited adverse inferences.


Turning to insolvency, the court found that the respondent’s accepted tender to repay R39,750,000 was a binding admission of indebtedness. The failure to honour that undertaking indicated commercial insolvency. The suggestion of countervailing claims or damages was speculative and unsupported; relying on Afgri Operations Ltd v Hamba Fleet (Pty) Ltd, the court reiterated that a speculative counterclaim cannot defeat a winding-up application where the debt is admitted and the debtor cannot pay. Applying Kalil v Decotex, the court concluded that there was no bona fide dispute on reasonable grounds.


REMEDY


The court condoned the applicant’s non-compliance with the forms and service provisions under Uniform Rule 6, and directed that the matter be heard as one of urgency in terms of Rule 6(12). Condonation for the respondent’s late filing of a supplementary answering affidavit, which was unopposed, was granted.


A provisional winding-up order was granted, placing the respondent under provisional liquidation in the hands of the Master of the High Court, Cape Town. The court issued a rule nisi calling upon the respondent and interested parties to show cause on 5 December 2025 why a final winding-up order should not be made and why the costs of the application should not be costs in the liquidation.


The court directed comprehensive service measures: service by the Sheriff at the respondent’s registered office; publication in one English and one Afrikaans newspaper circulating in the Western Cape; Sheriff’s service on the respondent’s employees in the manner prescribed by section 346(4A) of the Companies Act 61 of 1973; service on any trade union(s) representing the employees; and service on the South African Revenue Service. Costs were ordered to be costs in the winding-up.


LEGAL PRINCIPLES




  • Urgency and procedural flexibility: Uniform Rule 6(12) permits deviation from ordinary forms and timelines where the facts justify urgency. Courts eschew formalism; the rules exist to facilitate expeditious, inexpensive adjudication. Where undisputed facts show an admitted debt, non-performance, and risk of dissipation, urgency will ordinarily be upheld.




  • Right to silence in civil proceedings: Section 35 rights to silence and non-compulsion apply to arrested, detained, or accused persons in criminal matters. In civil litigation, a party cannot invoke a blanket right to silence to avoid accounting for funds or answering pertinent allegations. Courts may draw adverse inferences from unexplained silence, particularly regarding facts peculiarly within the party’s knowledge.




  • Compellability and use immunity: Following Ferreira v Levin and the statutory amendments, persons may be compelled to answer in s 417 enquiries, with the safeguard that incriminating answers are generally inadmissible in subsequent criminal proceedings (save for perjury). This undercuts the notion of prejudice from civil disclosure and supports the court’s expectation of accountability in civil processes.




  • Commercial insolvency and liquidation thresholds: Under sections 344(f) and 345(1)(a) of the Companies Act 61 of 1973, a company is liable to be wound up where it is unable to pay its debts, including where it fails to satisfy a demand for payment of a sum exceeding R100. An accepted tender to repay that remains unfulfilled is a powerful indicator of indebtedness and inability to pay. A speculative or unparticularised counterclaim cannot defeat a liquidation application where the debt is admitted and the debtor is plainly unable to meet it.




  • Adverse inference from unexplained transfers: Where substantial corporate funds are diverted to a principal’s personal accounts without explanation, and no services are rendered, the court may draw adverse inferences of misappropriation, reinforcing the conclusion that the corporate entity is not operating as a going concern and should be wound up to protect creditors and the public.



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
(WESTERN CAPE DIVISION, CAPE TOWN)

JUDGMENT

Reportable

Case no: 2025-123216


In the matter between:


HAZENDAL WINE ESTATE APPLICANT


and


PURE ELECTRICAL SOLUTIONS RESPONDENT

Coram: O’Brien AJ
Date heard: 11 September 2025
Delivered: 27 October 2025

Summary:

Company Law – Winding-up – Urgent application – Service Level Agreement for
relocation of Eskom pylons – Large advance payments diverted to shareholder’s
personal accounts – No services rendered – Respondent’s tender to repay accepted
but not honoured – Insolvency established.

Urgency – Whether applicant entitled to approach court on urgent basis – Court held
that urgency justified given undisputed diversion of funds, tender of repayment, a nd

absence of explanation – Rules designed to secure expeditious resolution of
disputes, not obstruct relief.
Right to Silence – Shareholder invoked constitutional right to remain silent in civil
proceedings – Court held right applies to accused persons in criminal proceedings –
In civil matters adverse inferences may be drawn – Reliance on silence misplaced.
___________________________________________________________________

JUDGMENT
___________________________________________________________________

O'Brien AJ

Introduction
1. On 30 July 2025, the applicant approached this court for an urgent order
placing the respondent under a final winding -up order in the hands of the
Master of the High Court (Western Cape), Cape Town. Alternatively, placing
the responde nt under a provisional winding -up order in the hands of the
Master of the High Court, Cape Town.
2. If successful with the alternative relief, the applicant sought a rule n isi calling
upon the respondent or any other interested party to appear and to show
cause why the court should not finally liquidate the respondent and why the
cost of the application should not be costs in the liquidation. The parties
agreed to postpone the matter until 11 September 2025, the day the applicant
sought the order.
3. They agree d on a timeline for the filing of answering papers, heads of
argument and costs. The respondent brought an application seeking

condonation for the late filing of the supplementary answering affidavit, which
was not opposed. The court grants condonation.
Factual background
4. The applicant is a private company with its registered address at Hazendal
Wine Estate, B[…] Road, Stellenbosch, Western Cape. The respondent is a
private company having its registered office at 1 […] B[…] Street, Gordon's
Bay, Western Cape. It carries on business from premises at Unit 1[…], C[…]
Way, Brackenfell, Western Cape. In their dealings with the applicant, one
Theart, the sole director and shareholder and Pretorius – a former director
and current shareholder represented the respondent.
5. On the premises of the applicant are multiple large electrical pylons
supporting high-voltage overhead lines. These electric pylons detract from the
tranquillity of the property on which the applicant conducts its business. It
began exploring t he possibility of relocating the electric pylons from their
present position to another position on the property. The respondent, through
Theart and Pretorius, said that they had contacts with senior Eskom officials
who had the expertise to help the applic ant move the electric pylons, and that
the project could be finished by the end of that year.
6. At the beginning of January 2024, acting on these representations, the
applicant agreed to some preliminary work being performed on the pylon

project by the respondent. The respondent issued an invoice for R287 500.00
for work done.
7. From June 2024 until 4 July 2024, the applicant’s attorneys and the
respondent negotiated to formalise an agreement on how to conduct the pylon
project and what the agreed price would eventually be.
8. On 10 July 2024, the applicant, represented by one S hlomi and Theart
representing the respondent concluded a service level agreement in terms
whereof the applicant appoint the respondent to render services described in
a statement of work to begin with the project which services were to
completed on or about 5 December 2024.
9. The service level agreement recorded the total project cost to be
R63,250,000.00, inclusive of VAT, plus the respondent's commission for
rendering the services, being 2.5% of the total cost. In relation to the project
cost, the applicant would pay a deposit of R32,000,000.00 in advance on the
signature date of 10 July 2024, the remaining balance payable in three
separate tranches, being R17,875,012.04 at the start of Phase 2,
R10,636,083.20 at the start of Phase three and R3,011,904.76 at the
completion of Phase four.
10. The respondent would be responsible for the payment of the project costs
regarding phase one to Eskom and a company called Adenco.

11. On 10 July 2024, the signatu re date of the agreement, the applicant paid the
initial deposit of R32,000,000.00. Under a tax invoice received from the
respondent, the applicant paid a further R7 950,000.00 to purchase EMF
reactors to counteract electronic fields on the property. The applicant claims to
have made this payment based on representations from Pretorius.
12. During August 2024, Marvol Development a company that developed adjacent
land raised queries about the EMF reactors, which will affect the pylon project.
The representative of that company raised concerns with Theart regarding the
procurement of the reactors, as the former needed to know the technical
specifications of the reactors and the company that would provide these
reactors.
13. On 29 August 2024, Theart responded by stati ng that Eskom will not take
responsibility for electrical shocks or the experience of an electromagnetic
field on the applicant's property. Theart said t he applicants tu rned down
various options considered in South Africa regarding the purchase of the
reactors. The respondent found another option with which the applicant was
happy, as it will not affect the golf course massively and will relieve the
electromagnetic field experienced.
14. On 16 January 2025, Marv ol Development addressed an email to Theart
requesting him to supply the approved locations or diagrams with the exact
locations of all the new pylons, and also to provide timelines and a
programme for the works to be done. Theart responded on 21 January 2025,

stating that between the distribution and tra nsmission departments, there are
still conversations to be had with Eskom. They are still awaiting their
feedback, which the respondent will follow up on weekly. They concluded that
the planned commencement date of the project would be mid-February 2025.
15. On 26th February 2025, the golf manager of the applicant addressed an email
to one Coetzee, a former employee of the applicant, and questioned whether
they could approve the plans with just two pylon moves, as this would mean
they could start the process. T heart responded to this e -mail on 27 February
2025, stating that the respondent was still waiting for Eskom.
16. On 17 May 2025, Allen Petersen, the newly appointed facilities manager at
the applicant, addressed an urgent e -mail requiring feedback and evidence
regarding the relocation of the Eskom electrical pylons on the applicant's
property. After not receiving a response , he followed up with an email to
Theart and Pretorius on 28 May 2025, requesting a site meeting.
17. On 13 th June 2025, Theart responded, prov ided approximate timelines and
design routes, and attached a document that stated the project would take 14
to 18 months from the day Eskom’s cost estimate letter was received. Theart
stated that he expects the cost estimation letter by the end of June 2025. On 7
July 2025, Petersen requested Theart to advise whether they had received
the letters from Eskom. On 7 July 2025, Petersen had received no feedback.

18. The applicant was unhappy with the pace at which the project was to be
conducted. They requested a s ite meeting with the respondents ’ directors. At
this meeting, the respondent's representatives did not attend, prompting the
applicant to start an investigation.
19. During its investigation, the applicant found that Coetzee issued fraudulent
invoices for work the respondent had not yet completed.
This notwithstanding Eskom had concluded no agreement regarding the
pylon project with the respondent.
20. Similarly, Coetzee issued a tax invoice to a company, Adenco, with the latter
allegedly performing work even bef ore the pylon project began. The applicant
claims that the issued invoices are forged because their layout differs from
other invoices that were issued.
21. The above led the applicant to conclude that the respondent had induced the
applicant to sign a servic e level agreement on fraudulently manufactured
invoices.
22. On 14 July 2205, Theart and Pretorius met the applicant's golf manager. At
this meeting, they informed her about their difficulties with Eskom, because
every time there is a change in the location o f the electrical pylon, they had to
pay an amount of R1.9 million "under the table" to Eskom. She requested
from them a full breakdown, with supporting documentation of the payments
made to the respondent.

23. On 16 July 2025, Theart handed her a handwritten schedule of payments he
had made. The note showed a payment of R10,300,000 for the first set of
pylon structures. Included in the amount was R3,000,000.00 for Sars. In other
words, monies meant for the project was spent on the respondent’s tax
obligations. The respondent also allegedly paid R13,300,000 million,
apparently because of seven design changes and approvals by the applicant.
24. The applicant also established that for the period 19 March 2024 until 3 May
2025, an amount of R 13,815,000 was paid into t he Capitec Bank account of
Pretorius. For the period 11 July 2024 to 31 May 2025, an amount of
R7,579,000 was paid into the Discovery Bank account of Pretorius by the
respondent.
25. The upshot of the above was that the applicant, in terms of the service lev el
agreement, paid a deposit of R32,000,000 which was supposed to be paid to
Eskom and Adenco for the pylon project. Stated differently, the R32,000,000
was not income in the hands of the respondent but a deposit to start the pylon
project. Moreover, the p ayment of R7,950,000 for the EMF reactors never
materialised. Accordingly, the respondent is indebted to the applicant to the
tune of R39,750,000.
26. I pause to mention that the applicant ended both the service level agreement
and reactor purchase because of the respondent’s alleged fraudulent conduct.
In turn, the respondent tendered payment of the amount of R39,750,000 by 31
August 2025. The tender was never honoured. At the time of the hearing of

this matter, the respondent failed to make good on the tender. Also, I have not
been informed that the respondent made the payment while I prepared this
judgment.
Discussion
27. The respondent contends that the application is not urgent, as the applicant
has failed to state facts explaining why it cannot obtain substa ntial redress in
the ordinary course. Mr Van der Merwe, together with Mr Whitcomb, made
much of the fact that the applicant failed to set out the circumstances that
make the matter urgent and why it could not obtain substantial redress in the
ordinary cour se. Mr Manca, for the applicant, countered by referring to
Commissioner, South African Revenue Services v Hawker Air Services (Pty)
Ltd, Commissioner, South African Revenue Services v Hawker Aviation
Partnership and Others and Others 2006 (4) SA 292 (SCA) . In this judgment,
Cameron JA articulated that urgency may justify a deviation from the times
and forms the Rules prescribe. It is a matter of form, not substance, and is not
a prerequisite to a claim for substantive relief. In Federated Trust Ltd v Botha
1978 (3) SA 645 at 654D-F Van Winsen AJA said:
“The court does not encourage formalism in the application of the Rules. The
Rules are not an end in themselves to be observed for their own sake. They
are provided to secure the inexpensive and expeditious c ompletion of
litigation before courts…”

28. I accept courts should not pay mere lip service to urgency. An applicant, in
approaching a court, establishes its own rules regarding urgency. However, in
this instance, the respondent could file its opposing papers and heads of
argument after the court postponed the matter on the set -down date.
The postponement enabled the respondent to file a supplementary
answering affidavit. Here – the undisputed facts – an admitted debt, vanished
funds, and Pretorius’ s ilence demand prompt intervention. Delay would only
embolden abuse and might further dissipate the applicant’s recourse. The
applicant was therefore fully justified in invoking the urgent jurisdiction of this
court.
29. I turn to these facts. The respondent a ccepted the R32,000,000 to realign the
electrical pylons on the applicant’s farm in terms of the service level
agreements, but they failed t o perform the work. Also, an amount of
R7,950,000 was paid to the respondent to purchase EMF reactors. This was
never purchased without explaining why it was never done. An amount of
R21,394,000 was transferred to Pretorius's personal bank accounts. It is also
undisputed that the respondent tendered payment of R39, 959,00 0 to be paid
by 31 August 2025. Pretorius is sile nt about what happened to the money
transferred to his personal accounts. He refers to his right to remain silent as
the reason for his non-disclosure.
30. May Pretorius rely on his right to remain silent in the face of damning
allegations?

31. In his supplemen tary answering affidavit, Pretorious states: "I have been
advised that some of the allegations contained in the applicant's founding
affidavit may have criminal implications for me and the respondent and its
employees. In the premises any allegations left specifically unanswered
should not be deemed to have been admitted.
32. In the premises I invoke my right to silence in the respect of any allegations
left unanswered. (sic)"
33. In Gratus & Gratus (Pty) Ltd v Jackelo 1930 WLD 226 , the respondent
admitted to the m isappropriation of monies. The respondent claimed he had
made the admission unfairly when the sequestration proceedings started.
During the sequestration proceedings, he applied for a stay thereof because
he would suffer prejudice. Tindall J said:
“But this point has been taken on behalf of the respondent - that is, the usual
practice, where civil proceedings and criminal proceedings arising out of the
same circumstances are pending against a person, is to stay the civil
proceedings until the criminal proce edings have been disposed of. The
principle at the root of the practice is, I think, that the accused may be
prejudiced in the criminal proceedings if the civil proceedings were first,
because he might give evidence in the civil proceedings and might be
subjected to cross examination, or he might be compelled to disclose
information in his possession before the criminal proceedings were disposed
of.”

34. In Equisec (Pty) Ltd v Rodriguez and Another 1999 (3) SA 113 (W) at p 116 I -
J Nugent J (as he then was ) drew attention to the fact that our courts have
intervened where the potential exists for the person to be subjected to
compulsion to divulge information, although even then it has not generally
been by suspending the civil proceedings. In Gratus and Gratus supra, the
court granted a provisional sequestration order but directed that, pending the
result of the criminal proceedings, there should be no interrogation of the
respondent. (See: Du Toit v Van Rensburg 1967 (4) SA 433 (C) and Irvin &
Johnson Ltd v Ba sson 1977 (3) SA 1067 (T)) where a similar approach was
adopted.
35. I take cognisance of the fact that the Bill of Rights in our Constitution under
section 35 gives an arrested or detained person who allegedly committed an
offence the right to remain silent, and section 35 (1)(c) provides that every
such person has the right not to be compelled to make any confession or
admission that could be used in evidence against him or her. Section 35 (3)
provides that every accused person has a right to a fair trial, whic h includes
the right to be presumed innocent, to remain silent, and not to testify during
the proceedings. Section 35 (3)(j) gives anyone the right not to be compelled
to give self-incriminatory evidence.
36. In Ferreira v Levine NO and Others; Vryenhoek and O thers v Powell NO and
Others 1996 (1) SA 984 (CC) the court declared section 417 (2)(b) of the
Companies Act unconstitutional because it allowed answers given at an

enquiry to be used as evidence in criminal proceedings against the person on
charges other than those of perjury and related offences.
37. Section 10 of the Judicial Matters Amendment Act 55 of 2002, published in
the Government Gazette 24277 dated 17 January 2003, has amended section
417(2)(b) of the Companies Act. The new amendment reads that any pe rson
summoned to an enquiry may be required to answer any question put to him
or her at the examination, notwithstanding that the answer might incriminate
him or her, and shall, if he or she refuses on such ground, be obliged to
answer at the instance of t he Master or the Court. The Master or the Court
may only compel a person to answer a question after the Master or the Court
has consulted with the Director of Public Prosecutions, who has the requisite
jurisdiction. Section 417 (2)(c) now determines that an y incriminating answer
or information directly obtained or incrementing evidence directly derived from
an examination in terms of this section shall not be admissible as evidence in
criminal proceedings in a court of law against the person concerned, excep t
where the person concerned is charged with perjury or related offences.
38. Pretorius’ invocation of the constitutional right to remain silent betrays either
misunderstanding or deliberate evasion. Pretorius cannot, without more,
refuse to say what happened to the monies that were transferred to his
personal account. His failure to explain why the money was transferred to his
personal accounts other than the business account of the company would not
necessarily open him to self -incriminating conduct or evidence. It depends
whether he has an innocent explanation. Furthermore, the tender the

respondent made, which was accepted by the applicant, is an admission by
the respondent of its indebtedness to the applicant. At this stage of the
proceedings, Pretorius is not an accused person because he was neither
arrested nor detained in connection with any criminal charge. At this stage of
the proceedings, there is no risk of an impending prosecution, it is only
speculation.
39. In any event, the amended section 417 (2)(c) compels Pretorius to answer any
question, even if it incriminates him, as such evidence at an inquiry would not
be admissible against him in subsequent criminal proceedings, except if he
perjured himself. As things are at the moment, there can be no prejud ice if he
stated in the supplementary answering affidavit what happened to the funds.
Stated differently, there is therefore no conceivable prejudice in accounting for
funds entrusted to the respondent. The applicant has a legitimate interest to
quote Nugent J in establishing the whereabouts of the funds that were placed
in the respondent's possession. Pretorius’ silence, in the face of detailed
allegations strengthens the inference that the funds were wilfully
misappropriated.
40. The respondent’s tender to re pay R39,750,000.00 is a judicially binding
admission of indebtedness. Its failure to honour that tender demonstrates
commercial insolvency. The supposed damages claim advanced is
unsubstantiated and incapable of negating a clear monetary obligation. As the
Supreme Court of Appeal said in Afgri Operations Limited v Hamba Fleet (Pty)
Ltd 2022 (1) SA 91 (SCA) par 7, a speculative counterclaim cannot defeat a

liquidation application where indebtedness is admitted and the debtor is
plainly unable to pay.
41. The court cannot ignore what is self -evident: a corporate entity that accepts
vast sums, renders no service, and fails to account for its use of funds has
forfeited the right to continue trading under the protection of limited liability.
42. The applicant’s claim ex ceeds R100.00 (Companies Act 61 of 1973, s 344(f);
the respondent is unable to make good on its tender (s 345(1)(a)); and there
is no bona fide dispute on reasonable grounds. See Kalil v Decotex (Pty) Ltd
1988 (1) SA 943 (A) at 9 76H- I. Each of these requi rements is manifestly
satisfied.
43. I make the following order:
43.1. The applicant’s non-compliance with the forms and service provided for
in Rule 6 of the Uniform Rules of Court be condoned and this matter is
heard as one of urgency in terms of Rule 6(12) of th e Uniform Rules of
Court.
43.2. The respondent is placed under provisional winding -up in the hands of
the Master of the High Court, Cape Town.

43.3. A rule nisi be issued calling upon the respondent and any other
interested party to appear and to show cause, if any, to this Honourable
Court on 5 December 2025 as to:
43.3.1. why the respondent should not be placed under final
liquidation; and
43.3.2. why the costs of this application should not be costs in the
winding-up in the liquidation.
43.4. That service of this order be effected:
43.4.1. by the Sherif of this Court at the registered office of the
respondent;
43.4.2. by publication in one English and one Afrikaans newspaper
circulating in the Western Cape;
43.4.3. by the Sheriff of this Court on the respondent’s employees in
the manner prescribed in Section 346(4)A of the Companies
Act, 61 of 1973, as amended;
43.4.4. by the Sheriff of this Court on every Trade Union, as far as the
applicant can ascertain represents the respondent’s
employees; and

43.4.5. on the South African Revenue Services.


_____________________
S C O’BRIEN
ACTING JUDGE OF THE HIGH COURT




APPEARANCES


For the Applicant: Adv B Manca SC

Instructed by: Assheton-Smith Ginsburg Inc


For the Respondent: Adv J Van der Merwe SC assisted by Adv G Whitcomb

Instructed by: Spamer Triebel Inc

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