REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
CASE NO.: 2025-173454
In the matter between:
YANYAN LI First Applicant
GENCHENG ZHOU Second Applicant
and
HELDERZICHT DEVELOPMENT (PTY) LIMITED First Respondent
HYDER PROPERTIES (PTY) LIMITED Second Respondent
__________________________________________________________________
JUDGMENT
__________________________________________________________________
This judgment is deemed to be handed down upon uploading by the Registrar to the
electronic court file.
(1) REPORTABLE: No
(2) OF INTEREST TO OTHER JUDGES: No
______________________ ___
DATE SIGNATURE
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Gilbert AJ:
1. The applicants, describing them as shareholders of the first and second
respondents for a period in excess of six months, seek the winding-up of
each of the respondent companies. The applicants expressly state in their
founding affidavit that they seek the winding-up of each respondent
company in terms of section 344 read together with section 345 of the
Companies Act, 1973 on the basis that the respondents are factually and
commercially insolvent, alternatively that it is just and equitable to wind-
up the respondents.
2. The respondent companies did not deliver an answering affidavit and
instead delivered a notice in terms of Uniform Rule 6(5)(d)(iii) raising three
questions of law. The respondents seek that should any of the three
questions of law be upheld, the application should be dismissed with
costs.
3. The three questions of law, as described by the respondents in their
notice, are that:
3.1. the application is incompetent as it is a single application seeking
the winding-up of two respondent companies;
3.2. the applicants have not proven standing as “ members” under
section 346 of the Companies Act, 1973;
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3.3. the applicants are precluded from seeking a winding-up order on
the basis that the respondents are unable to pay their debts.
4. The respondents seek leave to deliver an answering affidavit in the event
that their questions of law are dismissed. This was opposed by the
applicants, who submitted that the respondents must stand or fall by their
decision to only deliver a Rule 6(5)(d)(iii) notice raising the questions of
law and not to deliver answering affidavits dealing with the remaining
merits of the application.
5. The applicants expressly state in their founding affidavit that one of the
grounds of winding-up relied upon is that the respondents are factually
and commercially insolvent and so are to be wound up in terms of section
344 as read with section 345 of the Companies Act, 1973. Section 346(2)
of the Companies Act, 1973 precludes a member of a company seeking
the winding -up of a company unless the application is on the grounds
referred to in section 344(b), (c), (d), (e) or (h). The winding-up of a
company because of an inability to pay its debts is in terms of
section 344(f) and so this is not one of the specified grounds upon which
a member can seek the winding-up of a company. The question of law
raised by the respondents on this aspect is good.
6. The applicants in their heads of argument, in the joint practice note and
during argument conceded that this is so. The applicants’ counsel
submitted there is an alternate basis for the winding-up of the
respondents, and that is on the grounds that it is just and equitable. The
4
applicants in paragraphs 34 to 36 of the founding affidavit describe the
“oppressive conduct ” towards them in their capacities as minority
shareholders of the respondent companies.
7. I agree that this alternate basis for winding-up is asserted.
8. The question of law on this issue, although conceded by the applicants in
favour of the respondents, is not dispositive of the application.
9. The respondents also sought to strike out various averments in the
founding affidavit insofar as they related to the alleged inability of the
respondent companies to pay their debts in that once it was conceded
that the applicants have no locus standi to seek a winding-up on the basis
of the respondent companies’ inability to pay their debts, these averments
are irrelevant. The applicant’s counsel countered that the averments
nonetheless remained relevant as a factor in determining whether it was
just and equitable to wind-up the respondent companies. I agree that the
averments remain relevant and so I do not grant the striking out relief.
10. As to whether it is incompetent for the applicants to seek in a single
application the winding-up of two respondent companies, the respondents
submit in their heads of argument that “[t]he legal position is that unless
(i) the respondents have consented to a joint application or (ii) there is a
complete or near identity of interests between them, a joint application is
impermissible.” The applicants cite as authority paragraph 17 of the Full
Court decision of this Division of Bidvest Bank Ltd v Waste Partner
Investments (Pty) Ltd [2024] ZAGPJHC 1137 (11 November 2024).
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11. Wilson J writing for the Full Court in that paragraph held “the applicable
law is that such joinder is competent either where there is consent, or
where there is an identity, or near identity, of interest between the
respondents” (my emphasis).
12. As appears from their heads of argument, the applicants, also referring to
the Full Court decision, agree that this is the applicable test.
13. In any event, the Full Court decision is binding upon me. 1 Any doubt that
may have previously existed that a ‘complete’ identity of interests is
required,
2 and that a ‘near identity’ of interests would not suffice, has now
been resolved. A ‘near identity’ of interests will suffice.
14. The parties agreed that there was no consent to the joinder. Nor did the
applicants argue for a ‘complete identity’ of interest. Rather, both parties
argued, effectively, that there was a ‘near’ identity of interests.
15. Wilson J for the Full Court observed in paragraph 9 that:
1 The finding of the Full Court as to the applicable test is a ratio decidendi as it was necessary to have enabled
the Full Court to find that the court a quo per Vally J (2023] ZAGPJHC 1126 (5 October 2023), had not
impermissibly exercised his discretion in relation to costs in refusing costs to the applicant for the winding up of a
respondent debtor . Vally J reasoned the applicant in the matter could, and should, have proceeded for the
winding up of the respondent debtor in the same application that the applicant had brought for the sequestration
of a respondent debtor, where both respondent debtors were liable for the same debt.
2 See, for example, Breetveldt & Others v Van Zyl & Others 1972 (1) SA 304 (T) at 314F/G that: “Such a
proceeding cannot be allowed, except possibly by the consent of all interested persons, or in a case where
there is a complete identity of interests” (my emphasis).
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“The cases on joinder in liquidation and sequestration
proceedings do not seem to explore what counts as an identity of
interests in much detail. There is also equivocation in the cases
about the extent to which a set of debtors’ interests must align
before it is appropriate to join more than one of them in the same
proceedings.”
16. Each case needs to be considered on its own facts as to whether there is
a ‘near’ identity of interests.
17. As the law is now settled as to the applicable test, a close analysis of the
cases, particularly over the last five decades and in this Division
3, to
determine the test is unnecessary.4 Nonetheless there are useful findings
or observations made in various of those cases that assist, in the present
instance, is deciding whether there is a ‘near’ identity of interests.
18. The reasoning of Margo J in Breedveldt above at 314G-H remains
instructive, acknowledging that the context is one of insolvency:
“In the present case, each company has its own separate share
capital, separate shareholders and separate creditors, and the
fusing of the interests of all four companies in one proceeding is
confusing and prejudicial to persons interested in only one such
3 Starting with Breetveldt & Others v Van Zyl & Others 1972 (1) SA 304 (T)
4 As was done, for example, in Strutfast (Pty) Ltd v Uys & Another 2017 (6) SA 491 (GJ).
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company. In the compulsory winding-up of a company, the petition
is an important document. Its purpose, inter alia, is to place before
the Court, for the information of the company, the creditors and
shareholders, a statement of the material facts upon which a
winding-up order is claimed, and it also serves to provide
information to the Master, the Sheriff, the liquidator and other
interested parties. If, for example, creditors in one or other of the
companies in this case should wish to intervene on the return day,
or to suggest a compromise under sec. 103 of the Companies Act,
there is no valid reason why they should have to become involved
in the affairs of three other companies.”
19. Coetzee J in Ferela (Pty) Ltd v Craigie & Others 1980 (3) SA 167 (W)
referred to Breetveldt with approval and reasoned at 172F/G that apart
possibly from issues of convenience and the like that would feature in
joinder applications in terms of the court rules,:
“Of course there is the further very important feature which
exercised my mind. This is not simply a case where either money
or property is claimed from a respondent and where the provisions
of Rule 10 would very easily be applicable mutatis mutandis. This
is a procedure which really achieves a concursus creditorum. That
is the purpose of sequestration proceedings. It is to my mind
inadvisable that two separate estates can be dealt with in this way,
each leading to its own and utterly separate concursus
creditorum.”
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20. It appears to me that when considering whether there is a ‘near identity’
of interests is different to, and requires more than, what may ordinarily
suffice for purposes of a joinder in terms of Uniform Rule 10, such as that
the right to relief in relation to the persons proposed to be joined depends
upon the determination of substantially the same question of law or fact.
5
The nature of the proceedings, which is that they are insolvency
proceedings, and which if granted result in a concursus creditorum in
respect of each respondent, is to be taken into account.
21. Notably those cases that have found, or motivate for, a sufficient identity
of interests to justify joinder in insolvency proceedings are those involving
unpaid applicant creditors where the respondents were liable for the same
debt, usually jointly and severally, and where the applications were based
on the respondents’ inability to pay their debts, or their estates were
insolvent, as the case may be.
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22. This factor in favour of a sufficiently ‘near’ identity of interests is absent in
the present instance. The applicants do not (at least any longer) seek the
5 In support, see Brack v Front Runner Racks 2000 (Pty) Limited and other s [2011] ZAGPJHC 34 (4
May 2011, where Boruchowitz J in para 10 referred with approval to inter alia Ferela above, which
emphasised that the provisions of Uniform Rule 10(3) are not readily applicable to liquidation or
sequestration proceedings.
6 See, for example, Kirkwood Garage (Pty) Limited v Lategan and Another 1 961 (2) SA 75 (E) (sequestration of
respondent’s estates where jointly and severally liable), and which featured prominently in the judgment of Vally
J in Bidvest a quo above; Business Partners Ltd v Vecto Trade 87 (Pty) Ltd and Others 2004 (5) SA 296 (SE)
(involving the liquidation of a respondent company liable as principal debtor and the sequestration of the estates
of spouses married to each other out of community of property who were liable as sureties and co-principal
debtors); Maree and another v Bobroff and another [2018] ZAGPJHC 79 (3 April 2018) (involving the
sequestration of the estates of two respondents who were jointly and severally liable for debts arising from
settlement agreements).
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winding-up of the respondents on the distinct grounds that they are unable
to pay their debts Also, there is no joint and several liability of the two
respondent companies to the applicants.
23. The only case to which I was referred where the issue of joinder of
respondents in the context of liquidation proceedings based on the
grounds of it being just and equitable is that of Boruchowitz J in Brack v
Front Runner Racks 2000 (Pty) Limited above. Although Boruchowitz J
was applying the test of ‘complete’ identity of interests, the following in
paragraphs 11 and 12 of the judgment remains instructive:
“[11] The application is based on the just and equitable ground
contemplated in section 344(h) of the Companies Act. This section
confers upon the Court a wide discretionary power which has to be
exercised judicially with due regard to the justice and equity of the
competing interests of all concerned….
[12] The competing interests involved are of the widest character and
would include the legal, financial, pecuniary and non-pecuniary interests
of those concerned, whether directly or indirectly, in the affairs of the
company sought to be winding-up. Where, as in the present case, two
companies are involved, the Court has to separately determine in respect
of each company whether it is just and equitable that it be wound up. The
field of fact to be covered is extensive as the competing interests involved
are not the same, and the same questions of law and fact do not arise.”
24. Boruchowitz J went on to find that the differences were such in the matter
before him that the joinder of the two respondent companies was not
justified. The differences included the different nature of the two
companies (the one being a trading operation with employees that
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manufactures and distributes accessories for off-road vehicles, and the
other a property-owning company), that presumably each have their own
separate creditors and debtors and that presumably both have their own
separate relationship with SARS and their bankers.
25. Turning to the present matter, the respondents submit, as appears from
their heads of argument and supplementary heads of argument, there is
no near identity of interests where:
25.1. they have different roles and businesses and perform different
functions. The first respondent is a land developer. The second
respondent is the construction arm;
25.2. their capital and funding structures differ. The first respondent has
the large shareholder loan from Hebei of R105 million. The second
respondent reflects inter-company indebtedness (it is the first
respondent that is indebted to the second respondent for some
R151K by way of a loan account, as appears from the balance
sheet annexed as “FA15”);
25.3. their creditor profiles differ. The second respondent as a
construction company has subcontractor retention and supplier
controls. The first respondent as a property developer has
customer deposits, deferred income, and different liabilities;
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25.4. their assets and risks differ. The first respondent holds
development inventory and investment property. The second
respondent holds construction-related assets and obligations;
25.5. their banking facilities and operational cash positions differ;
25.6. each have their own annual financial statements and the like.
26. Why, as described in their heads of argument, the applicants submit that
there is a near identity of interests is:
26.1. there is an interrelation between the two respondents in regard to
their business activities and especially their common shareholding
and the ultimate controlling shareholder, Keji Zheng;
26.2. the conduct underpinning the just and equitable basis for the
winding-up of the respondents is conduct in regard to the
applicants, directors of both respondents, as shareholders:
26.2.1. involving both respondents;
26.2.2. the other two shareholders of the respondents, Zheng and
Hebei, including inter alia (i) the second applicant being
removed as chairman of the respondents; (ii) taking away
the responsibilities of the first applicant, the managing
director of both respondents; and (iii) the attempt to
remove the applicants as directors of the respondents.
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27. The respondents respond that at best for the applicants there is no more
than a potential governance overlap, which relates to the averred
oppressive conduct.
28. I agree with the respondents’ submissions that there is not a sufficiently
near identity of interests. The financial information provided by the
applicants in their founding affidavit, and particularly the balance sheets,
income statements and the like, show that the financial interests of each
respondent are substantially different, including their assets, liabilities,
income and expenses.
29. By way of example the first respondent as a land developer is reflected
as at 31 July 2025 with assets of R157 million (consisting predominantly
of land and buildings (which appears to be developed property) and of
‘work in progress’ (which appears to be property that is still being
developed), with liabilities of R123 million (most of which is the loan from
its majority shareholder Hebei of R105 million that has been recalled),
leaving an equity of some R33 million. In contrast, the second respondent
is reflected as at 31 July 2025 with assets of some R7 million (which
includes a loan to the first respondent of some R156K), liabilities of some
R5,2 million, leaving equity of some R1.7 million. The scale of the assets
and liabilities of each respondent is markedly different.
30. The main creditors for the first respondent and who would have a
particular interest in a concursus of the first respondent, are, other than
the loan from its shareholder Hebei of R105 million, various unspecified
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suppliers for R5.5million, Goldmark Investments for R862K and the
second respondent for R156K. SARS features only for R32K.
31. The main creditors of the second respondent, who would have a particular
interest in a concursus of the second respondent, are various unspecified
subcontractors, as would be expected of a construction company.
Another major creditor is SARS for PAYE, VAT and other taxes.
32. Rome AJ in Strutfast above in paragraph 34 noted that the applicant’s
founding affidavit contained no averments from which, for example it
could be discerned that there is an identical group of joint creditors for
each of the respondents, and, also, that there was a failure to distinguish
or attempt to delineate between the creditors and assets of each of the
respondents. Although in the present instance the applicants have
described the financial position of each respondent company in their
founding affidavit, and as supported by the annexes, this was not done
for purposes of showing a near identity of interests but rather to show the
averred inability of the respondent companies to the pay its debts. As
appears above, the difference in the financial positions of each
respondent militates against, rather than supports, a near identity of
interests.
33. The interests of the general body of creditors in each concursus if
liquidation orders were to be granted is sufficiently different that this
weights significantly against a near identity of interests, particularly given
that these are insolvency proceedings.
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34. The averred oppressive conduct asserted by the respondents is the
majority shareholders Zheng and Hebei exclusion (or at least sidelining),
and further attempted exclusion (or sidelining) of the applicants, and this
in the context of the averments that having done so Zheng is hollowing
out the respondents for his own advantage, including the funnelling of
income received by the respondents to pay back the loan to Hebei. Whilst
I appreciate that there is some overlap in relation to this averred conduct,
the founding affidavit is sparse in detail of this conduct, and distinctly in
respect of each respondent. Much of what is averred is globular,
pertaining to both respondents. It does not appear that much, if anything,
is averred why the applicants as minority shareholders have an
expectation not to be excluded from each respondent company.
7 This
makes it difficult to ascertain whether there is a sufficiently substantial
overlap in the oppressive conduct complained of towards supporting a
near identity of interests.
35. Whilst it may be that a court seized with separate applications may have
to investigate the same or similar conduct resulting in the exclusion (or
sidelining) of the applicants as minority shareholders, it does not follow
that the balance of the enquiry as to whether the conduct complained of
is sufficient to sustain a just and equitable winding up would be the same..
36. It may also be that if the oppressive conduct is established, the relief to
be granted in relation to each respondent may be different. Section 346(2)
7 Compare Thunder Cats Investments 92 (Pty) Ltd and another v Nkonjane Economic Prospecting & Investment
(Pty) Ltd and Others 2014 (5) SA 1 (SCA), para 18.
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of the Companies Act, 1973 provides that where the application is
presented by members of the company and it appears to the court that
the applicants are entitled to relief, the court shall make a winding-up
order, unless it is satisfied that some other remedy is available to the
applicants and that they are acting unreasonably in seeking to have the
company wound up instead of pursuing that other remedy. The financial
profile of each respondent company is sufficiently different that this
consideration also increases the divergence of interests for purpose of
joinder of both respondents in a single application.
37. I find that the question in law raised by the respondents on this issue is
good, and so application stands to be dismissed. The applicants did not
seek any other outcome should the question in law be upheld.
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38. It is therefore unnecessary for me to decide the remaining question of law,
which is whether the applicants have proven their standing as ‘members’
to seek a just and equitable winding-up of the respondent companies in
terms of section 346(1)(c) and (2) of the Companies Act, 1973.
39. Although the respondents sought costs on an attorney and client scale on
the basis that they had forewarned the applicants not to persist with their
application by way of a letter on 13 October 2025 before the delivery of
their notice in terms of Rule 6(5)(d)(iii) in November 2025, in my view this
8 In light of the applicants no longer relying on a winding up of the respondents because of an inability to pay
debts, I did raise with the applicants’ counsel what the applicants’ position would be if I found that the questions
in law were not dispositive of the application, but I refused the respondents leave to file an answering affidavit.
That though is something else, which is irrelevant in light of the decision I have arrived at.
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does not warrant a costs order other than on the usual party and party
scale. I cannot find that the applicants’ persistence with the application in
the usual cut-and-thrust of litigation warrants any form of punitive costs
order.
40. I make the following order:
40.1. the application is dismissed;
40.2. the applicants, jointly and severally, are to pay the costs of the first
and second respondents, including the costs of senior counsel on
scale C and of second counsel on scale B.
______________________
Gilbert AJ
Date of hearing: 17 February 2026
Date of judgment: 24 February 2026
Counsel for the Applicants: L Hollander
Instructed by: Bouwer Cardona Inc
Johannesburg
Counsel for the Respondents: A Subel SC
with J Brewer
Instructed by: Edward Nathan Sonnenbergs Inc.
Sandton