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IN T H E HIG H COU RT O F SOUTH A FR ICA
LIMP OPO D IVISION, POLOK WANE
CASE NO: 6560/2023
(1) REPORTABLE: YES/NO
(2) OF INTERES T TO OT HE R JUDGES: YES/NO
(3) REVISED: YES/NO
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D ote Signa ture
In the matter between :
FIRSTRAND BANK LIMITED APPLICANT
AND
SERVILOR 83 CC RESPONDENT
JUDGMENT

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NGOBENIJ
[1] The applicant is FirstRand Bank Limited, a public company with
registration number 1929/001225/06, with limited liability duly registered
and incorporated in terms of the Companies Act 61 of 1973, as amended,
and also a registered commercial bank in terms of the Banks Act 93 of
1990. The registered address of the applicant is 1st Floor, 4 Merchant
Place, Corner Fredman Drive & Rivonia Road, Sandton. The applicant is
an authorized and registered financial services and credit provider duly
registered as such in terms of the National Credit Act 34 of 2005.
[2] The respondent is Servilor 83 CC. with registration number
2011/077935/23, a Close Corporation, duly registered and incorporated
with the Close Corporations Act 69 of 1984, with its registered address at
Simba Safaris, Middelboomspunt Farm, Lephalale, 0555, which is also the
chosen domicilium citandi et executandi.
[3] This is an application for the winding-up of the respondent based on the
reasons that the applicant, which is a creditor of the respondent in a sum
of not less than R200-00 which is then due, has served on the respondent
a demand, which was left at the registered office of the respondent. In
the demand the applicant has requested the respondent to pay the sum

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due, and the respondent has for 21 days, or three weeks thereafter
neglected to pay the sum so due or to secure or compound it to the
reasonable satisfaction of the applicant. The applicant alleges that the
respondent is unable to pay its debts. It will become clearer in the
judgment as to how the respondent is alleged to be indebted to the
applicant.
[ 4] The respondent (Servilor) is surety and co-principal debtor to the principal
debtor being, Exilite 385 CC (Exilite), which initially entered into a loan
agreement with the applicant. The respondent as surety of Exilite has
failed to satisfy the demand, and the applicant for the winding-up
application relies on statutory provisions that the respondent is unable to
pay the debt of Exilite in which it bound itself as surety.
[5] On 06 May 2021 the applicant and Exilite, duly represented by Martha
Magdalena van Staden entered into a written loan agreement for the
amount of R6 000 000-00. The loan amount was to be repaid back in 120
equal instalments of R72 796-56 each. The respondent on 06 May 2021
bound itself as surety and co-principal debtor jointly and severally for the
payment due to the applicant of all monies owing to the applicant
resulting from the said loan agreement . The amount owing as at 26 April
2023 is RS 886 023-26.

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[6] The applicant further submits that when the applicant and Exilite entered
into that loan agreement of R6 000 000-00, it was with the concurrence
of all the creditors and the members of Exilite being Mr. and Mrs. van
Staden, and the court had sanctioned a settlement between the creditors
and the members of Exilite in terms of section 155 of the Companies Act
71 of 2008, for the debt to be due only after the fulfillment of certain
conditions.
[7] In response to the application, one Johannes Petrus van Staden deposed to
the answering affidavit stating that the indebtedness of the respondent to
the applicant is disputed on the basis that the principal debt that the
applicant relies on is void or invalid as Martha Magdalena van Staden
(van Staden) did not have the authority to represent Exilite in concluding
the loan agreement with the applicant. It is alleged that Exilite was in
final liquidation on 06 May 2021. Van Staden applied for the winding up
of Exilite in the Western Cape High Court (WCHC) on 7 November 2019.
Exilite was placed under provisional winding up by the WCHC on 28
November 2019 and placed under final liquidation on 7 January 2020.
[8] The respondent further states that the suretyship of the respondent to the
applicant is accessory to the contractual relationship between the
applicant and Exilite, and in the absence of a valid agreement between

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the applicant and Exilite, no liability arises from suretyship. The
respondent denies any obligation to make payments to the applicant.
[9] The issue between the parties is as to whether the respondent (Servilor)
should be wound up as it acted as surety for Exilite when the applicant
and Exilite entered into a loan agreement of R6 000 000-00, which debt is
not being serviced by the principal debtor, hence the money is now
sought from the respondent who acted as surety, and as at 10 June 2023
the outstanding amount was RS 509 674-10.
[10] Section 69(1) of the Close Corporations Act1(CCA) outlines the
circumstances under which a corporation is deemed unable to pay its
debts, and it states the following:
"69. (1) For the purposes of section 68(c) a corporation shall be deemed to be
unable to pay its debts, if-
( a) a creditor, by cession or otherwise, to whom the corporation is
indebted in a sum not less than two hundred rand then due has served
on the corporation, by delivering it at its registered office, a demand
requiring the corporation to pay the sum so due, and the corporation
has for 21 days thereafter neglected to pay the sum or secure or
compound for it to the reasonable satisfaction of the creditor, ... "
I 69 Of 1984.

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[11] The corresponding provision to section 69 of the CCA is section 345 of the
(old) Companies Act 61 of 1973(Act 61 of 1973)2 . It is common cause
that the debt which the applicant claims remains unsatisfied after 21 days
of demand .
[12] The applicant submits that the operation of the loan agreement was
dependent on the suspensive conditions as outlined in clauses 1.1.1 to
1.4, 1.4.1 to 1.4.4, 2,2.1 and 2.2 of an arrangement between Exilite and
its creditors in terms of section 155 arrangement (Arrangement) of the
(new ) Companies Act 71 of 2008 (Act 71 of 200 8), w hich falls under
chapter 5, part E, and deals with 'Compromise with creditors'. I will quote
just tw o sections from the provisions of section 155 of Act 71 of 2008 , as
those in m y view are the most relevant ones to the issues at hand, and
they read as follow s:
2 "345 When company deemed unable to pay its debts
(I) A company or body corporate shall be deemed to be unable to pay its debts if-
(a) a creditor, by cession or otherwise, to w hom 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
(ii) ... ,
(b) any process issued on a judgment, decree or order of any court in favour of a creditor of the com pany is returned
by the sheriff or the mes senger with an endorsement that he has not found sufficient disposable property to satisfy
the judgmen t, 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 compa ny is unable to pay its debts.
(2) In determining for the purpose of subsection (1) whether a com pany is unable to pay its debts, the Co urt shall also
take into account the contingent and prospective liabilities of the company .

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Part E
155 Compromise between company and creditors
"(1) This section applies to a company, irrespective of whether or not it is
financially distressed as defined in section 128 {l){f), unless it is engaged
in business rescue proceedings in terms of this Chapter.
(2) The board of a company, or the liquidator of such a company if it is being
wound up, may propose an arrangement or a compromise of its financial
obligations to all of its creditors, or to all of the members of any class of
its creditors, by delivering a copy of the proposal, and notice of meeting
to consider the proposal, to-
( a) every creditor of the company, or every member of the relevant class of
creditors whose name or address is known to, or can reasonably be
obtained by, the company; and
(b) the Commission (the Commission means the Companies and
Intellectual Property Commission established by section 185 - my
own emphasis from the definitions)"
(3) - (9) ... ".
[13] It is important to mention that the said Arrangement was annexed to the
answering affidavit of the respondent in this application. It is not the
document upon which the application of the applicant is founded on. The
main document that has been annexed to this application by the applicant

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is the 'Loan Agreement between FirstRand Bank and Exilite 385 CC' ,
dated 6 May 2021.
[14] The submission by the respondent is that the applicant cannot in its reply
rely on the Agreement because if that was the case it should have been
disclosed already by the applicant in its founding papers, because the
respondent will never get an opportunity to answer to that. In that regard
there is a notice filed by the respondent to strike out some sub­
paragraphs of the applicant's replying affidavit on the basis that the
applicant was introducing a new cause of indebtedness in the replying
papers. It is not clear from the papers as to what came out of that notice
of application to strike out, however that issue was again raised again in
the heads of argument of the respondent on paragraph 36.
[15] Whether that notice was pursued or not, of importance is that it shows
that the respondent had concerns about the reply of the applicant. The
raising of the issue in the heads of argument is a clear indication that the
respondent had no opportunity to raise that issue, because the
respondent cannot answer or reply to the replying affidavit. That is, in my
view mainly why an applicant in an application is not permitted to raise
new issues in the replying affidavit, because that will prejudice the
respondent.

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[16] In Motwe/1 Plant Hire (Pty) Ltd v Janse Van Rensburg and Another3, the
following was said on motion proceedings:
"{10) It is trite that in motion proceedings, the affidavits constitute both the
pleadings and the evidence. An applicant must raise the issues upon
which it seeks to rely in its founding affidavit by defining the issues and
by setting out the evidence upon which it relies to discharge the onus of
proof resting on it in respect thereof"
[17] In line with the concerns of the respondent, in Airports Company of South
Africa {SOC) Ltd v Tswelokgotso Trading Enterprise CC 4 the Court held
that a case cannot be entertained on new grounds that are not traversed
in the founding affidavit. There is a plethora of cases that support the fact
that a case of the applicant must be made out in the founding affidavit
not in the replying affidavit. In Director of Hospital Services v Mistry5, it is
simply stated that it is the founding affidavit that the court will turn to, to
determine what the complainant is complaining about. It is in Elegant
Line Trading 257 CC v MEC for Transport, Eastern Cape 6, in which the
principle set forth is that the founding affidavit must in itself contain
sufficient facts upon which a court may find in the applicant's favour.
3 (56155) [2023] ZAG PJHC 939 (21 August 2023).
4 (19548/2015) [2018] ZAGPJHC 476; 2019 (I) SA 204 (GJ) (22 June 2018).
5 1979 (I) SA 626 (A).
6 (104/2022) [2022] ZAECBH C 33 (14 December 2022).

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[18] In this application I believe that the first issue that I must determine is the
documents upon which the claim is founded, or put differently I must
determine the circumstances under which the claim is made so that I can
determine if the loan agreement entered into between the applicant and
Exilite is void ab initio or not, as alleged by the respondent. If I find that
the loan agreement is valid and the respondent is failing to service that
debt, it is only then that I can consider the winding up of the respondent
for being unable to meet the debt that it is bound to service. Rule 18(c)
of the Uniform Rules of Court (Rules) requires a plaintiff (in our case
applicant) to annex a copy of any material written contract or document
to the pleading upon which the claim is founded.
[19] Logic dictates that once the respondent is provided with documents upon
which the claim is founded, the respondent will then be called upon to
answer the case that has been brought against it. It is therefore
necessary that each an every document or allegation upon which the
material facts of the case are based with sufficient particularity be
disclosed in the founding papers so that the respondent gets an
opportunity to answer every allegation. I'm saying this with the full
understanding that failure to annex a copy of an agreement relied upon

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does not erase the cause of action as a litigant who relies on the contract
can adduce secondary evidence of its conclusion and terms7.
[20] The loan agreement upon which the claim against the respondent is based
on is the one that is marked 'FA2' in these proceedings. The agreement
was entered into on 06 May 2021, where the applicant was represented
by one Philistus Selaelo Aphane and the respondent was bound as surety
by its members, and there are two documents with signatures bearing
the names of Martha Magdalena van Staden (paginated page 88 of the
Founding Affidavit) and Johannes Pieter van Staden (paginated page 94
of the Founding Affidavit). The said two documents that I have just
referred to are also dated 06 May 2021, wh ich is the date of the loan
agreement . The claim of the applicant for this application in the founding
affidavit refers to only 'FA2', being the document upon which the
indebtedness by the respondent is founded. The issue pertaining to the
suspensive conditions were only raised in the replying affidavit.
[21] In Van Zyl v Auto Commodities (Pty) Ltd8 , the Supreme Court of Appeal
held that a contract of suretyship is accessory to the contractual
relationship and held that:
"It follows from the accessory nature of the surety's undertaking that the
liability of the surety is dependent on the obligations of the principal
7 ABSA Bank Ltd v Jenzen, Kevin Glynn (2014/877) (GLD); ABSA Bank Ltd v Grobbelaar, Jame s (20214/7728 (GLD).
8 (279/2020) [2021] ZASCA 38 (16 April 2020).

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debtor. A consequence of this is if the principal debtor's debt is
discharged, whether, by payment or release, the surety's obligation is
likewise discharged. If the principal debtor's obligation is reduced by
compromise, the surety's obligation is likewise reduced. If the principal
debtor is afforded time to pay, that ensures the benefit of the surety. If
the claim against the principal debtor prescribes, so does the claim
against the surety. This will be subject to any terms of the deed of
suretyship that preserve the surety's liability notwithstanding the release
or discharge of, or any other benefit or remission afforded to, the
principal debtor".
[22] The position that remains in this case as at 06 May 2021 is that Exilite
was under liquidation, and Rynette Pieters and Daniel Sandile Ndlovu
were the liquidators that were appointed alter the liquidation of Exilite,
and if anything had to be done with or pertaining to Exilite, that had to be
done with them being the appointed liquidators. Ms. van Staden, then
behind the backs of the liquidators went and entered into a loan
agreement with FirstRand Bank, and I qualify my statement that she
went behind the backs of the liquidators to do that, because the
liquidators were not involved in that transaction.
[23] I believe that the liquidators would not have agreed to that loan
agreement but would have agreed to different terms as indicated in the

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section 155 Agreement entered into on 27 October 2021, at least. As to
whether the bank checked the credentials of Exilite before concluding the
loan agreement in question or not, it is something that is not clear before
this court, and anyway I'm not asked to make a finding on that.
[24] A more or less similar situation as explained above in the preceding
paragraph of this judgment as in the Exilite position, was well explained
in PG Group (Pty) Ltd v Amoretti9 , where the court said the following:
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... , the effective date of the winding-up is 16 September 2019, when a third
party filed a winding-up application against the principal debtor. The
consequence of that application was that the powers of the respondent to
act on behalf of the principal debtor were frozen. He no longer had the
authority to act on behalf of the principal debtor, including signing any
agreement on its behalf".
[25] Similarly, in the case at hand, once Exilite was placed under liquidation,
Mr. and Ms. Van Staden had no powers to enter into agreements on
behalf of Exilite. If I then follow the reasoning of the Supreme Court of
Appeal (SCA) decision of Van Zyl v Auto case, supra, it means that the
loan agreement that Firstrand Bank and Exilite entered into is void for the
reason that Exilite was under liquidation at that time, and if that loan
9 (7151/2021) [2023] ZAG PJHC 6 (9 January 2023).

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agreement is void against the principal debtor, it will also be void against
the surety. That has effect on the surety contract by the respondent for
the same reason that I have already mentioned .
[26] Coming back to the case at hand and following the principles laid down in
the cases that I have quoted above, the applicant in the case at hand
should have made out its case in the founding affidavit. The issues of the
settlement agreement that are raised by the applicant in its replying
affidavit, if that is what the application is founded on should have been
stated from the outset. The submission by the respondent that
acceptance of the new facts as contained in the replying affidavit will
prejudice them, has substance.
[27] The prejudice that will be suffered by the respondent due to failure to be
able to respond will be dire. If the issues that are raised by the applicant
from the Arrangement were raised from the outset in the founding
affidavit of the applicant, the court would have had the benefit of the
answer in full, from the respondent. I find it fair to deal w ith this case as
per the initial facts that are raised in the founding affidavit, as the case of
the applicant cannot be made from the replying affidavit.
(28 ] on costs, I do take into consideration that money did exchange hands. The
judgm ent is based on legal principles that are applicable to these types of

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contracts. It cannot therefore be said that the applicant was frivolous in
bringing this application. It is for that reason that I will order that each
party bears its own costs.
[29] In the result the following order is made:
(i) the application for the liquidation of the respondent is dismissed,
(ii) each party is ordered to pay its own costs.
J.T. NGOBENI
JUDGE OF THE HIGH COURT

Appearances
Attorney for the Applicant
Instructed by
Counsel for the Respondent
Instructed by
Date of hearing
Date of judgment
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: Adv. M.A. Badenhorst SC
: RWL Inc.
: Mr. Smit
: De Lange & Smit Attorneys
: 14 August 2025
: 25 November 2025
Judgment transmitted electronically