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ABSA Bank Limited v 93 Quartz Street Hillbrow CC (2024/010203) [2026] ZAGPJHC 36 (21 January 2026)

70 Reportability
Insolvency Law
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Brief Summary

Insolvency Law — Liquidation — Compliance with section 346A of the Companies Act — Applicant seeking liquidation based on alleged insolvency — Court finding that applicant failed to comply with service requirements of section 346A — Importance of proper service on employees emphasized — Application postponed for compliance with statutory requirements.

Comprehensive Summary

Summary of Judgment


1. Introduction


The proceedings concerned an application for the winding-up (liquidation) of a close corporation brought by a creditor (the applicant) against the close corporation (the respondent). The application was framed as a further attempt to procure a liquidation order, following the dismissal of an earlier liquidation application involving the same parties and originating from the same statutory demand.


The procedural history reflected that a statutory demand in terms of section 69(1)(a) of the Close Corporations Act 69 of 1984 was allegedly served on the respondent on 29 October 2021, and that the claimed amount was not paid. The applicant thereafter launched a first liquidation application on 18 March 2022, which was heard and dismissed on 19 October 2023 by Siwendu J. That judgment was reported as ABSA Bank Ltd v 93 Quartz Street Hillbrow CC 2025 2 SA 450 (GJ).


Following the dismissal of the first application, the applicant instituted the present liquidation proceedings, still relying on the October 2021 section 69 notice and adding allegations intended to align the application with the approach indicated in the earlier judgment. The respondent opposed the present application, disputing (among other defences) that the applicant remained entitled to rely on the October 2021 notice and raising issues requiring careful consideration.


When the matter came before the court on 20 January 2026, a preliminary dispute emerged concerning compliance with section 346A of the Companies Act of 1973, specifically the requirement relating to service of the liquidation application on employees. The court treated this as a threshold procedural issue that required resolution before the merits could responsibly be entertained.


2. Material Facts


The court recorded that the applicant’s first liquidation application had been dismissed because it had relied on provisions of the Close Corporations Act that had been repealed, and because the court held that section 69 operated as a deeming provision for proof of an act of insolvency and did not independently empower the granting of a liquidation order. The earlier judgment indicated that the appropriate jurisdictional foundation would have been section 344(f) of the Companies Act of 1973 read with section 69 of the Close Corporations Act.


The present application was launched after the dismissal of the first application and was described as still being based on the October 2021 section 69 notice. The court further recorded that the respondent filed answers raising substantive defences, which the court regarded as potentially significant and not suitable to be dismissed as mere delaying tactics. The merits of those defences were, however, not adjudicated in this decision.


A material factual development for purposes of this judgment was the history of attempts to comply with section 346A(1)(b). The matter had previously been enrolled before Motoa J on 18 August 2025, where the court was not satisfied that there had been compliance with section 346A. The matter was postponed to allow the applicant an opportunity to comply, without the issuing of directives as to the manner of service.


The applicant thereafter filed an affidavit (deposed to on 19 September 2025 by a candidate attorney) stating that on 12 September 2025 he attended at the respondent’s premises, found the principal door locked, could not obtain access, and found no employees. He stated that there was no notice board, and reported that street vendors informed him the premises were hardly open or operating except for occasional entry by an unknown individual. He concluded that the respondent operated no business and had no employees, and therefore that compliance with section 346A(1)(b) was unnecessary or impossible.


The respondent squarely disputed that account. A member of the respondent, Ms Farber, deposed to an affidavit on 9 January 2026 stating that a hotel and bar business known as “Hilton Plaza” was conducted at the premises, owned and operated by the respondent, and open and operating throughout 2025 and on the date of the affidavit. She stated that the respondent had 21 staff members, operated a bank account, and held a paid liquor licence for 2026 issued on 3 November 2025. She annexed photographs and documentary material (including the liquor licence and bank account extracts) and asserted that the candidate attorney’s affidavit was false, contending that he did not attend as alleged. The respondent also furnished affidavits from two hotel managers indicating that the hotel was operating on 19 September.


The applicant responded with an affidavit by its attorney, Mr Baloyi (dated 14 January 2026), describing events on 13 January 2026. He stated that he and the candidate attorney went to the premises to affix the complete application and notice of set-down. He stated that the gate and front door were open, that they entered and encountered persons who said they were employees, and that they were taken to an office where they sought to affix the application to a notice board. He stated they were told there was no notice board, and that an employee named Zandile consulted a superior telephonically; Mr Baloyi stated he spoke to a person identifying himself as Mark, who allegedly said that Mr Baloyi could hand the papers to Zandile for later collection. Mr Baloyi further stated that the absence of a notice board required affixing the application to the principal door and taking photographs.


That account was disputed by Ms Nxumalo (affidavit dated 15 January 2026). She denied that a full set of papers was handed to her on 13 January 2026, stating she received only a three-page notice of set-down. She stated she informed Mr Baloyi that the premises were never closed and were open in September 2025. She admitted that Mr Baloyi affixed a document to the principal door, but stated it was only the four-page notice of motion without attachments, which she removed. She stated that on 14 January 2026 Mr Baloyi returned and handed her a full copy of the application with annexures. She stated she did not distribute the papers to other employees and asserted that other employees were unaware of the application.


A further affidavit from Mr Farber (dated 15 January 2025, as recorded in the judgment) provided a version of a telephonic conversation with Mr Baloyi and annexed material said to demonstrate the hotel’s operation during September 2025, including a rental summary for July to October 2025 and bank statement extracts for 8 to 18 September 2025 showing multiple credit transactions.


Against this factual matrix, the court accepted that there was a sharp, mutually destructive dispute on whether section 346A had been complied with and whether the respondent had employees at the premises during the relevant periods, and that the papers did not permit a confident determination of where the truth lay on the service dispute.


3. Legal Issues


The central legal question determined in this decision was whether the applicant had complied with section 346A(1)(b) of the Companies Act of 1973, which requires that a copy of the winding-up application be furnished to employees in the manner prescribed, as a precondition to the granting of a winding-up order.


A further issue, arising from the manner in which the dispute presented itself, was how the matter ought to proceed procedurally where compliance with section 346A was disputed on the affidavits and where the court was not prepared to determine the merits of the liquidation application while the service issue remained unresolved. This required a value-laden procedural choice between hearing the merits (with potential outcomes including dismissal, or a provisional order with a rule nisi and directions) or postponing the matter with directions aimed at ensuring compliance and procedural fairness.


The dispute concerned the application of law to contested facts, namely whether the statutory service requirement had been met in the circumstances, as well as a procedural fairness and case-management judgment about the appropriate sequencing of issues and the proper exercise of the court’s control over its process.


4. Court’s Reasoning


The court approached section 346A by emphasising that, although the heading of the section refers to service of the winding-up order, section 346A(1)(b) identifies the winding-up application as the document that must be served on employees in the manner prescribed. The court noted that this interpretation was consistent with the interpretation adopted in prior authority, including decisions that stress that a liquidation application must be furnished to employees before a winding-up order may be granted.


The court summarised the structure of section 346A(1)(b) as establishing a descending sequence of methods for service on employees. The primary method is affixing the application to a notice board to which employees have access inside the debtor’s premises. Only if employees have no access to the interior of the premises may the applicant resort to affixing the application to the front gate, failing which to the front door of the premises from which the debtor conducted business at the time the application was presented.


In evaluating the legal effect of this framework, the court relied on the approach articulated in EB Steam Co (Pty) Ltd v Eskom Holdings SOC Ltd 2015 2 SA 526 (SCA). It recorded that Wallis JA adopted a teleological interpretation and concluded that, while the obligation to furnish the application to employees is expressed in peremptory terms, the methods stipulated for furnishing the application are directory. The court understood this authority to address the practical situation where an applicant may have done what it could to comply, but strict compliance is impossible, and it referred to the remedial approach adopted in Eskom where a final winding-up order was replaced with a provisional order and directions were given regarding service.


However, the court did not treat Eskom as establishing a rigid practice rule that a provisional order must invariably be granted (assuming the merits are otherwise satisfied) whenever there has been non-compliance with section 346A. The court identified postponement with a directive as an alternative procedural path, depending on the circumstances.


Turning to the facts, the court observed that the affidavits concerning service and the presence of employees were sharply contradictory and that it could not determine, on those affidavits, where the truth lay. The court also expressed concern about the conduct of representatives on both sides and recognised that a finding that the applicant’s representatives had lied on the service issue could be relevant when later assessing whether to grant provisional or final liquidation relief.


The court considered the maturity of the application and the absence of alleged urgency. It noted that the present application had been issued in 2024 (the court referred to April 2024 in this context), and it remarked that the date of issue would be the date of the concursus creditorum, with the result that the applicant’s rights were protected in that manner. This reduced the procedural pressure to determine the merits immediately notwithstanding unresolved service disputes.


A key strand in the reasoning was the court’s assessment of prejudice and procedural justice. The court recognised the “extreme prejudice” that may flow from the granting of a provisional winding-up order. Given its initial view that the respondent’s case was not without substance, and given the uncertainties created by the disputed service facts, the court considered it preferable for the application to be heard only once the service issue had been finalised. The court also expressed concern that granting a provisional order in the context of “murky” service evidence could generate further service disputes and repeated extensions of a rule nisi, rather than resolving the matter efficiently and fairly.


The court explained that its chosen approach was not dictated by a binding rule of law, but was adopted because it considered it to be the better outcome from the perspective of procedural justice and proper case management.


Finally, the court clarified the juridical basis for issuing directives. It stated that the order it proposed was not an order for substituted service under Uniform Rule of Court 4. It distinguished service under the Rules from the statutory furnishing requirement under section 346A. While acknowledging that section 346A does not on its face expressly confer a power on a court to make service arrangements diverging from the text, the court, relying on the implications recognised in Eskom, held that such power was implicated by section 346A as it concerns court process. The court further reasoned that section 173 of the Constitution (inherent power of superior courts to protect and regulate their own process) permitted the issuing of a directive in the circumstances.


5. Outcome and Relief


The court declined to hear the merits of the liquidation application at that stage and postponed the application sine die, directing that compliance with section 346A be effected in a structured manner designed to resolve the service dispute.


The court ordered that each party bear its own costs relating to the postponement. It further ordered that the costs of the appearance on 20 January 2026 would be costs in the cause.


In addition, the court directed a specific mechanism for service on the respondent’s employees for purposes of section 346A. The order required that the applicant’s attorney (Mr Baloyi) and candidate attorney (Mr Sekgala) attend at the respondent’s premises at 93 Quartz Street, Hillbrow at 10:00 on 3 February 2026, that the manager (Ms Nxumalo) receive them and direct them to a place where the full winding-up application would be placed or affixed for employees’ perusal, and that this would constitute service on employees as contemplated by section 346A. The applicant was further directed to deliver an affidavit confirming compliance with these directives before re-enrolling the application.


The judgment recorded that it was handed down electronically on 21 January 2026 at 15:55, following the hearing on 20 January 2026.


Cases Cited


ABSA Bank Ltd v 93 Quartz Street Hillbrow CC 2025 2 SA 450 (GJ).


Rent a Tank Johannesburg (Pty) Ltd v Fuel Giants (Pty) Ltd 2025 5 SA 527 (GJ).


EB Steam Co (Pty) Ltd v Eskom Holdings SOC Ltd 2015 2 SA 526 (SCA).


Legislation Cited


Close Corporations Act 69 of 1984, section 69(1)(a), with reference to the repeal of section 68(c) and (d).


Companies Act 61 of 1973, section 346A(1)(b), with reference to section 344(f).


Constitution of the Republic of South Africa, 1996, section 173.


The order referred to “Companies Act 71 of 1973” in relation to section 346A.


Rules of Court Cited


Uniform Rules of Court, rule 4.


Held


The court held that the liquidation application should not proceed to argument on the merits until the preliminary statutory requirement concerning employee notice in section 346A(1)(b) had been properly addressed, particularly in light of the materially disputed facts regarding service and the existence and awareness of employees.


It held further that, in the circumstances of this case, postponement with tailored directives for compliance was procedurally fairer than hearing the merits immediately or granting a provisional order that might generate further service disputes and potential prejudice.


The court held that the directive issued was not substituted service under the Uniform Rules, but a measure regulating compliance with a statutory process requirement, supported by the court’s inherent power to regulate its own process.


LEGAL PRINCIPLES


Section 346A(1)(b) of the Companies Act of 1973 requires that a winding-up application be furnished to a company’s employees in the manner contemplated by the section before a winding-up order may be granted, and courts treat compliance with this requirement as important.


On the interpretation described by reference to EB Steam Co (Pty) Ltd v Eskom Holdings SOC Ltd 2015 2 SA 526 (SCA), while the obligation to furnish the application to employees is framed in peremptory terms, the specific methods set out in section 346A(1)(b) for furnishing the application may be approached as directory, allowing adaptation where strict compliance is not feasible.


Where compliance with section 346A is disputed on the papers and the dispute raises concerns of procedural fairness and potential prejudice, a court may elect to postpone the matter and issue directives aimed at ensuring proper furnishing of the application to employees before determining the merits, rather than proceeding directly to merits argument.


Orders regulating compliance with section 346A are distinguishable from substituted service under Uniform Rule of Court 4, because section 346A prescribes a statutory process requirement rather than service as contemplated by the Rules, and the court may rely on its inherent jurisdiction under section 173 of the Constitution to protect and regulate its own process in crafting appropriate procedural directives.

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Close Corporations Act 69 of 1984 had been served on it . The demand was
allegedly served on 29 October 2021. The amount claimed was not paid and on
18 March 2022 the applicant applied for the respondent’s liquidation. For the
reasons that will become apparent, this application is referred to as the first
application. The first application was heard on 19 October 2023 by Siwendu J
who dismissed it. The judgment is reported as ABSA Bank Ltd v 93 Quartz
Street Hillbrow CC 2025 2 SA 450 (GJ). The applicant relied in the first
application on the repealed section 68(c) and (d) of the Close Corporations Act
read with the not-repealed section 69(1)(a) thereof. The court held that section
69 only serves as a deeming provision to facilitate proof of an act of insolvency
and that it does not by itself confer power on the court to grant a liquidation order.
The court found that given the repeal of section 68 of the Close Corporations Act
the applicant ought to have invoked the jurisdiction of the court in terms of section
344(f) of the 1973 Companies Act read with section 69 of the Close Corporations
Act.
[1] The applicant then brought the present proceedings, still based on the October
2021 section 69 notice. The present application was issued on 1 February 2024.
The applicant makes allegations herein to bring the matter in line with the
judgment of Siwendu J. The respondent , however, denies that the applicant is
entitled to rely on the October 2021 notice. The respondent also raises other
defences. I mention this because I had the opportunity to consider the
respondent’s answers to the present application. In my view they require close
consideration and cannot be dismissed out of hand as elements of a stratagem
to postpone the inevitable.
[2] When the matter was called on Tuesday 20 January 2026, I was unaware of a
dispute that had developed about compliance by the applicant with the
requirements of section 346A of the 1973 Companies Act of which sub-section

requirements of section 346A of the 1973 Companies Act of which sub-section
(1)(b) reads as follows:
“1. A copy of a winding-up order must be served on -
(a) ... ;

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(b) the employees of the company by affixing a copy of the
application to any notice board to which the employees have
access inside the debtor’s premises, or if there is no access to the
premises by the employees, by affixing a copy to the front gate,
where applicable, failing which to the front door of the p remises
from which the debtor conducted any business at the time of the
presentation of the application …”.
[3] Although the heading of the section indicates that it deals with the service of the
winding-up order, subsection 1( b) identifies a copy of the application as the
document that must be served in terms of the section in the manner prescribed
thereby. This is also how the section has been interpreted by Gilbert AJ in Rent
a Tank Johannesburg (Pty) Ltd v Fuel Giants (Pty) Ltd 2025 5 SA 527 (GJ)
passim and by Wallis JA in his judgment for the court in EB Steam Co (Pty) Ltd
v Eskom Holdings SOC Ltd 2015 2 SA 526 (SCA). The section in terms
requires that an application for liquidation must be served on the employees of
the company before the court can make an order. In his judgment Gilbert AJ
highlighted the importance of compliance with the requirements of the section
(after having recorded that the local practice had become lax in this regard ). In
his judgment in Eskom, Wallis JA dealt with the situation which may arise when
an applicant has done what it can to comply with the provisions of the section but
strict compliance turns out to be impossible . The section in clear t erms and in
descending order requires service on the employees first by affixing a copy of
the application to any notice board to which the employees have access inside
the debtor’s premises. Only if there is no access to the in terior of the premises
by the employees may the applicant affix a copy of the application to the front
gate (the second form) or to the front door of the premises from which the debtor

gate (the second form) or to the front door of the premises from which the debtor
conducted business at the time of the presentation of the application (the third
form). Wallis JA interpreted the section teleologically and concluded that whilst
the requirement to furnish the application to the employees is couched in
peremptory terms, the methods stipulated in the section for furnishing the
application to employees are directory. (See paragraphs 14, 17 and 22 to 23 of
the judgment). In Eskom’s case the situation was that Tsoka J had issued a final
winding-up order in the court below. The appellant argued that the order could

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not have been granted because there had been non-compliance with the section.
It was common ground that the section had not been complied with. Instead of
setting the order a quo aside and dismissing the application, the Supreme Court
of Appeal upheld the appeal (in part) , set aside the order and replaced it with a
provisional order coupled to a rule nisi. As part of the provisional order, the court
formulated an order directing how service on the applicants in that matter had to
be effected. The Suprem e Court of Appeal did, however, on my reading of the
Eskom judgment not introduce a new rule of practice in the nature of a law of the
Medes and Persians that courts must grant interim orders ( where they are of
course satisfied on the merits) where compliance with section 346A relating to
employees was not possible coupled with directors as to how the service must
be effected. This is a possibility, but so is postponing the hearing together with a
directive.
[4] The facts concerning compliance with the section in the present application may
be summarised as follows. The matter was enrolled for hearing before Moto a J
on 18 August 2025. Motoa J was not satisfied that there ha d been compliance
with section 346A. The case was postponed to afford the applicant the
opportunity to comply with the section, but no directives were issued as to how
to effect such service . On the 19 th of September 2025 a candidate attorney of
the attorneys of record of the applicant deposed to an affidavit in which he alleged
that he attended at the place of business of the respondent on 12 th September
2025 to ascertain whether the respondent had any employees who carry out daily
duties. He testified that when he arrived there, the property’s principal door was
locked and there was no other way to obtain access into the property. No
employees could be found. He then added that there was no notice board t hat
could be found (which is, I may remark, a strange comment as the candidate

could be found (which is, I may remark, a strange comment as the candidate
attorney was on his own say -so not inside the premises ). He was advised by
street vendors that the property “is hardly open or operating but for one unknown
individual who enters the property once in a while”. He then concluded that the
respondent operates no business and has no employees. The upshot of this
affidavit is that the requirements of section 346A(1)(b) need not, nay, cannot be
complied with.

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[5] The respondent did not accept the evidence of the candidate attorney . Ms
Farber, a member of the respondent, deposed to an affidavit on the 9th of January
2026 wherein the following points are made. In the first place, a hotel is
conducted at the premises (sporting the improbable name, Hilton Plaza). The
hotel is owned and operated by the respondent. Ms Farber stated that the hotel
was open and operating as a hotel and bar throughout 2025 and it is open and
operating to the day the affidavit was made. She pointed out that the respondent
has 21 staff members working at the hotel. It operates a bank account. It has a
current paid-for liquor license for 2026 that was issued on 3 November 2025.
She annexed photographs depicting the hotel from the outside and photographs
of the reception and bar areas, a shop adjacent to the entrance of the hotel where
customers play "pool". S he also attached copies of the liquor license and an
extract of the respondent's bank account. She states that the affidavit of the
candidate attorney is a blatant lie and adds: “The only conclusion to be drawn is
that he did not attend the property as alleged. It is submitted that this is serious
misconduct on the part of a representative of the applican t’s attorneys.” She
annexed affidavits by two managers at the hotel from which it would appear that
the hotel was operating on 19 September.
[6] On the 14 th of January 2026 an attorney of the applicant’s attorneys of record,
Mr Baloyi, deposed to an affidavit in which he referred to evens on the 13 th of
January 2026. He stated that he (accompanied by the mentioned candidate
attorney) went to the hotel to affix the complete application and notice of set -
down. The principal gate and front door were open. They entered the premises,
saw two people sitting in the foyer who said they were employees of the
respondent. Mr Baloyi and the candidate were then taken to an office where they

respondent. Mr Baloyi and the candidate were then taken to an office where they
explained that they came to affix the application onto the notice board. One of
the employees said that there is no notice board upon which a copy of the
application was handed to her. She then said that she had to contact her superior
to confirm whether she could accept the application. The employee (identified
as Zandile) spoke to someone on her cellular phone and handed the phone to
Mr Baloyi. He spoke to someone who identified himself as Mark. Mr Baloyi
stated in his affidavit that “Mark then informed me that I could hand a copy of the
application to Zandile and he would collect it at a later stage". Thereafter he had

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a conversation with Zandile who informed him that the hotel had previously been
closed. It was only after the affidavit of the candidate attorney came to hand that
Zandile and her colleagues were instructed to return to the hotel and report for
duty and that she and another employee were instructed to depose to affidavits
confirming that the hotel had been open when this was not the case. Mr Baloyi
then sought further information of the employees, but Zandile and her colleague
became unco-operative and declined to provide further information. His affidavit
ended by a statement that “given the absence of a notice board on site ” they
were required to affix the application to the principal door of the building, which
as open, and to take pictures thereof.
[7] The affidavit of Mr Baloyi was dealt with in an affidavit dated 15 January 2026 by
one Zandile Prescilla Nxumalo. She disputes Mr Baloyi’s evidence on crucial
points. She, for instance, denies that a set of papers was handed to her. All she
got from Mr Baloyi was a three-page document namely the notice of set -down.
She said that she informed Mr Baloyi that the premises “are never closed and
that they were open in September 2025”. She added that Mr Baloyi said in
answer that he (and thus not the candida te attorney) was the person who had
attempted to enter the premises in September 2025 “but he got lost”. She also
denies that she had become unco-operative. She however admits that Mr Baloyi
affixed a document to the principal door , which was the four-page notice of
motion without any further attachments. She removed the document. The next
day, 14 Janu ary 2026, Mr Baloyi returned and handed a full copy of the
application with annexures to her. She had removed the notice of motion that
had been attached to the front door the previous day and she did not give the
application to other employees. She states emphatically that the other
employees are unaware of the application.

employees are unaware of the application.
[8] Mr Farber, an erstwhile member of the respondent and now a representative
thereof, also deposed to an affidavit dated 15 January 2025. He gives his version
of what transpired between him and Mr Baloyi when they spoke on the phone.
According to Mr Farber he asked Mr Baloyi whether he was the person who
signed an affidavit stating that the premises were locked in September 2025. He
confirmed that it was him. Mr Farber then told him that he lied in his affidavit

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because the hotel was open in September 2025. He continued to point out that
the hotel is the only trading entity of the respondent and that the hotel’s finances
are managed by another entity (HCI Inner City Properties). He annexed a rental
summary for the period 1 July 2025 to 31 October 2025 for the Hilton Plaza Hotel
which evidences that throughout the relevant period, including September 2025,
the hotel had been open and operative with tenants in occupation. He also
annexed a copy of the respondent’s bank statement for the period 8 September
to 18 September 2025 to prove that multiple credit transactions were recorded
on the account throughout the period.
[9] The affidavits were handed to me without any debate about the right of the parties
to deliver further sets of affidavits. There was also no structured argument on
the issue of compliance with section 346A of the 1973 Companies Act. Mr Alli,
counsel for the applicant, very properly drew these events to my attention and
identified the preliminary issue that had to be determined to be whether it can be
found that there was compliance with the section and, if not, how the matter
should proceed. Both Mr Alli a nd his colleague for the respondent, Mr Cohen,
made helpful submissions.
[10] After the issues concerning compliance with section 346A had been dealt with
by counsel, I conditionally stood the matter down to Friday the 23 rd of January
2026 for argument on the merits of the matter. The condition was that I would
make a ruling whether the merits should be dealt with on the 23rd or whether the
matter should be postponed together with a directive about how the section
should be complied with in the circumstances that have developed. There would
be two possible outcomes if the matter were to be heard on the merits. The first
being that the application could be dismissed on the merits which would bring an
end to the controversy concerning section 346A. Should, however, the

end to the controversy concerning section 346A. Should, however, the
application be granted the question whether it should be in final form or in the
form of a rule nisi containing directives for compliance with the section would
arise.
[11] In the event I concluded that the application should not proceed on the merits.
The application should be postponed, and an order should be formulated
directing compliance with section 346A. I invited counsel to make

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representations about the directive . The provided a joint proposal and the
directive contained at the end hereof is based on it.
[12] The reasons for my decision not to deal with the merits at this point, to postpone
the application and to issue directives for compliance with the section are the
following. In the first place the application is one of some maturity. No urgency
is alleged. The present application was issued in April 2024, almost two years
ago. That will of course be the date of the concursus creditorum and the
applicant's rights are consequently protected in this manner. Secondly, I have
concerns about the conduct of t he representatives of both the parties. I cannot
determine on the affidavits where the truth lies. The versions are mutually
destructive. Furthermore, a finding that Mr Baloyi and the candidate attorney of
the applicant lied (i.e. the version of the deponents on behalf of the respondent
on the service issue) might very well be considered when weighing up whether
not to grant a provisional or final liquidation order. Justice requires that the
allegations made in the affidavits be considered carefully. Having formed an
initial view that the respondent’s case is not without substance and taking into
account the extreme prejudice which follows from a provisional order and given
the uncertainties in the matter, it would in my view be better for the application to
be heard once the service issue ha d been finalised. In my view this is a matter
where - but for the service issue - there would be no need for a provisional order.
Given the murky evidence on the point of service, it is not beyond the pale that
there could be a further service issue after a provisional order had been given
which may lead to extensions of the rule nisi. I think it is better to get clarity in
the circumstances of this case about the service before the application is dealt
with on the merits. I have come to this conclusion not because of any binding

with on the merits. I have come to this conclusion not because of any binding
rule of law but because I deem it to be a better outcome seen from the procedural
justice perspective.
[13] In conclusion I should mention the obvious. The order that I made herein is not
an order for substituted service in terms of rule 4 of the Uniform Rules of Court.
Section 346A of the 1973 Act does not deal with service as contemplated in the
rules. The Act and not the rules prescribe s that service must be effected and it
sets out the different forms of service. Although the language of section

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346A(1)(b) does not at first blush confer the power on a court to make rules about
service at variance with what is contained in the section, as found by the
Supreme Court of Appeal in Eskom, such power is clearly implicated by the
section. The section essentially deals with the process of the court and it seems
to me that section 173 of the Constitution (which provides for the inherent power
of the superior courts to protect and regulate their own process ) allows for such
an order to be made.
[14] In the light of these remarks I make the following order:
a. The application is postponed sine die;
b. each party will bear its own costs relating to the postponement;
c. the costs of the appearance on 20 January 2026 are costs in the cause;
d. service of the application as required by section 346A of the Companies
Act 71 of 1973 shall be effected in the following manner:
i. the applicant's attorney (Mr Baloyi) and candidate attorney (Mr Sekgala)
shall attend at the respondent's premises at 93 Quartz Street, Hillbrow,
at 10.00 on 3 February 2026;
ii. the manager of the respondent's business at the premises (Ms Nxumalo)
will receive them and direct them to a place where the full winding up
application under the above case number will be placed or affixed for
perusal by the respondent's employees;
iii. the aforesaid will constitute service on the respondent's employees as
contemplated in the said section 346A;
iv. the applicant is directed to deliver an affidavit confirming compliance with
these directives before re-enrolling the application.
This judgment was handed down electronically by circulation to the parties’ legal
representatives via email. The date and time for hand down is deemed to be 21
January 2026 at 15:55

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Date of hearing: 20 January 2026
Date of judgment delivered : 21 January 2026

Appearances:
For the Appellant: Mr N Alli
Instructed by: J Mothobi Inc

For the Respondent: Mr S Cohen
Instructed by: Dempster McKinnon Incorporated

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