THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case no: 770/2024
In the matter between:
BONATLA PROPERTY HOLDINGS LTD (in liquidation) APPELLANT
and
RUITERSVLEI HOLDINGS (PTY) LTD FIRST RESPONDENT
MERCHANT COMMERCIAL FINANCE 1 (PTY) LTD SECOND RESPONDENT
Neutral citation: Bonatla Property Holdings v Ruitersvlei Holdings & Another
(770/2024) [2026] ZASCA 26 (11 March 2026)
Coram: DAMBUZA, GOOSEN and KATHREE -SETILOANE JJA and
KUBUSHI and OPPERMAN AJJA
Heard: 05 November 2025
Delivered: 11 March 2026
Summary: Company law – liquidation – locus standi to seek winding up – cession in
securitatem debiti – applicant company having ceded its loan account as security
lacking standing as a creditor to seek winding-up – reversionary interest not conferring
creditor status prior to discharge of secured debt – appeal dismissed.
2
__________________________________________________________________
ORDER
___________________________________________________________________
On appeal from: Gauteng Division of the High Court, Johannesburg (Stein AJ, sitting
as a court of first instance):
The appeal is dismissed with costs including costs of two counsel.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
Kubushi AJA (Dambuza, Goosen and Kathree-Setiloane JJA and Opperman AJA
concurring):
[1] The appellant, Bonatla Property Holdings Ltd (in liquidation) (Bonatla) appeals,
with leave of the Gauteng Division of the High Court, Johannesburg (the high court) ,
against the whole judgment and order of the high court dated 3 November 2023. This
was after the high court dismissed with costs an application brought on behalf of
Bonatla by its liquidators in terms of ss 344 (f)1 and 345(1) (a)2 and/or (c) of the
Companies Act 61 of 1973 (the Companies Act) read with the relevant provisions of
1 Section 344(f) of the Companies Act provides: ‘Circumstances in which company may be wound
up by Court
A company may be wound up by the Court if-
…
(f) the company is unable to pay its debts as described in section 345’
2 Section 345 in relevant parts provides: ‘When company deemed unable to pay its debts
(1) A company or body corporate shall be deemed to be unable to pay its debts if-
(a) a creditor, by cession or otherwise, to whom the company is indebted in a sum not less than one
hundred rand then due-
(i) has served on the company, by leaving the same at its registered office, a demand requiring the
company to pay the sum so due; or
(ii) in the case of any body corporate not incorporated under this Act, has served such demand by
leaving it at its main office or delivering it to the secretary or some director, manager or principal officer
of such body corporate or in such other manner as the Court may direct,
and the company or body corporate has for three weeks thereafter neglected to pay the sum, or to
secure or compound for it to the reasonable satisfaction of the creditor; or
(b) …; or
(c) it is proved to the satisfaction of the Court that the company is unable to pay its debts.’
3
the Companies Act 71 of 2008 (the new Companies Act), for the liquidation of the first
respondent, Ruitersvlei Holdings (Pty) Ltd (Ruitersvlei) (the liquidation application).
[2] In the liquidation application , Bonatla’s liquidators alleged that Bonatla was a
creditor of Ruitersvlei in respect of an interest -free loan advanced in the amount of
R49 816 687 (the R49 million loan) and certain fees charged. Ruitersvlei was in turn
indebted to the second respondent, Merchant Commercial Finance 1 (Pty) Ltd
(Merchant), in respect of various advances made to it over time. Bonatla had provided
security for Ruitersvlei’s indebtedness to Merchant by putting up deeds of suretyship
and cross-company guarantees in favour of Merchant. In particular, in 2013 and 2016
Bonatla executed two deeds of suretyship incorporating cessions in favour of
Merchant. The said deeds of suretyship record Bonatla and Ruitersvlei as co-sureties
and cedents in favour of Merchant. In consequence of the said deeds of suretyship,
Bonatla ceded the loan account it had with Ruitersvlei to Merchant for the due and
proper fulfilment of all obligations owed by Ruitersvlei to Merchant. In the liquidation
application Bonatla’s liquidators contended that Ruitersvlei was insolvent, indebted to
Bonatla and in addition, that it was just and equitable for Ruitersvlei’s affairs to be
wound-up as provided in s 344(h) of the Companies Act.
[3] Ruitersvlei and Merchant resisted Bonatla’s application on the basis that
Bonatla had ceded as security to Merchant the debts owed to it by Ruitersvlei. 3 They
contended that Bonatla no longer had any rights in the ceded debts and thus lacked
the locus standi to institute liquidation proceedings against Ruitersvlei. In response,
the liquidators pleaded that the cessions were in the nature of securitatem debiti, in
respect of which Bonatla retained the bare dominium (reversionary interest). They
accordingly argued that they had standing to seek an order that Ruitersvlei be finally
accordingly argued that they had standing to seek an order that Ruitersvlei be finally
wound up even though Bonatla had ceded the debts.
[4] The high court first considered the language used in the cessions and found
that the relevant clause was expressed in the ‘broadest of terms’, pursuant to which
all rights, title and interest were made over to Merchant, ‘including amounts that would,
3 Initially, Merchant was not a party to the liquidation application. Its application to intervene was not
opposed by the other parties.
4
in future, become owing from any form of indebtedness whatsoever. It nevertheless,
found that the cessions were ‘likely considered by the parties to be security cessions
rather than outright cessions’. The high court then dismissed the application on the
basis that contrary to what the liquidators had pleaded, no debt was due and owing to
Bonatla by Ruitersvlei. It held that Bonatla was not a creditor of Ruitersvlei and
therefore the liquidators lacked standing to bring the liquidation application. In addition,
it held that it was not just and equitable to wind-up the affairs of Ruitersvlei.
[5] In the high court and before this Court, the liquidators’ case was argued on the
basis that Bonatla was a creditor of Ruitersvlei on account of the reversionary interest
which it alleged to have retained consequent to its claim against Ruitersvlei that it had
ceded to Merchant. The high court decided the question of the liquidators’ standing on
the basis of the cause of action as pleaded in the founding affidavit. It found that there
was no cause of action advanced, even in the alternative, based on the reversionary
interest which Bonatla may have in the amounts due and owing to Merchant as a
cessionary. Instead, the liquidation application was advanced squarely on the basis of
a debt allegedly due and owing directly to Bonatla. In that regard, the high court
concluded that the pleaded cause of action did not disclose Bonatla as a creditor of
Ruitersvlei and, as such, the liquidators lacked standing to bring the liquidation
application against Ruitersvlei. This finding, in my view, for the reasons that fo llow, is
correct.
[6] In this appeal, the liquidators challenge the high court’s findings on lack of
standing. They maintain that Ruitersvlei is insolvent and, that although Bonatla had
ceded the R49 million loan to Merchant, it retained a residual interest or bare dominium
in the loan account which renders it a ‘contingent’ or ‘prospective’ creditor of
in the loan account which renders it a ‘contingent’ or ‘prospective’ creditor of
Ruitersvlei, hence it is just and equitable that it be liquidated. It is my view that this
appeal can be decided on the question of standing alone. A finding that the liquidators
have no standing, would be dispositive of the appeal.
[7] Section 344(f) provides that a company may be wound up if it is unable to pay
its debt as described in s 345. In terms of s 345(1)(a)(i) a company or body corporate
shall be deemed to be unable to pay its debt if a creditor, by cession or otherwise, to
whom the company is indebted in a sum not less than one hundred rand then due,
5
has served on the company, by leaving the same at its registered office, a demand
requiring the company to pay the sum so due; and the company or body corporate has
for three weeks thereafter neglected to pay the sum, or to secure or compound for it
to the reasonable satisfaction of the creditor. In terms of the said sections, it is a
creditor to whom a company is indebted, who ca n bring an application for the
liquidation of that company. The liquidators, therefore, had to prove that Bonatla was
a creditor of Ruitersvlei in respect of a debt owed and due as pleaded.
[8] It was common cause, as the high court also found, that the liquidation
application was brought on two basis being (a) a debt alleged to be due and owing to
Bonatla and (b) on the basis that it would be just and equitable to gr ant a winding up
order. The cause of action pleaded by the liquidators in the founding affidavit was that
Ruitersvlei was indebted to Bonatla in the sum of R49 819 687 which was due and
payable, and which, despite demand, Ruitersvlei was unable to pay. The reversionary
interest was only raised in the replying affidavit in response to the respondents’
allegation that the debt which Ruitersvlei owed to Bonatla was validly ceded, assigned
and transferred to Merchant by means of the 2013 and 2016 deeds of suretyships.
[9] The liquidators persisted with this cause of action as set out in the founding
affidavit even though they had been aware of the suretyships since at least before
October 2021 and that the respondent was disputing the insolvency allegation. The
suretyships were produced by the liquidators during the course of the insolvency
enquiry in the winding-up of Bonatla – a fact which was not denied by the liquidators.
The reliance by Ruitersvlei on the cessions in denying indebtedness to Bonatla was
also brought to Bonatla’s attention in Ruitersvlei’s response to the s 345 letter of
demand. There was no attempt by the liquidators to amend their first cause of action
demand. There was no attempt by the liquidators to amend their first cause of action
even when the cession was raised by Ruitersvlei in its answering affidavit and in
Merchant’s intervention application.
[10] It is a trite principle of our law that affidavits in motion proceedings serve not
only to define the issues between the parties, but also to place the essential and
necessary evidence before the court. It is, also, a trite principle that the court will n ot
allow the introduction of new matter if the matter sought to be introduced amounts to
an abandonment of the existing claim and the substitution therefor of a fresh and
6
completely different claim based on a different cause of action. Nor will the court permit
an applicant to make a case in reply when no case at all was made in the original
application.4 The application, thus, falls to be decided on the sufficiency or otherwise
of the material contained in the notice of motion and founding affidavit and its
annexures (if any).5
[11] Therefore, the high court’s conclusion that on the case as pleaded, it was
unable to find that Bonatla was a creditor of Ruitersvlei or that a case was made out
for the winding -up of Ruitersvlei, is correct. The appeal should be dismissed on this
point alone.
[12] The high court correctly determined the cessions as such when it stated in its
judgment that ‘in deciding the matter I am bound to adopt the pledge theory in
approaching these security cessions’. This was in reference to this Court’s judgment
in Grobler v Oosthuizen (Grobler),6 where it was decided that where there is ambiguity
in the wording of a cession, as it was in this case, the character of the cession in
securitatem debiti should depend on the intention of the parties,7 with the language of
the cession being the appropriate point of departure to determine such intention. 8 On
this basis, a cession in securitatem debiti is now taken to resemble a pledge, unless
the intention of the parties is different.9
[13] The relevant clause in both cessions provides:
‘As a collateral security for the discharge of the obligations by us [Bonatla together with the
other entities which were also cedents under the deed of suretyship] in terms hereof, each of
us does hereby cede, assign, transfer and make over unto and in favour of the CREDITOR all
of our rights, title and interest (“ceded claims”) and to any amounts which are and any amounts
which may hereafter become owing to any of us by the DEBTORS (or anyone of them) for any
4 See Erasmus: Superior Court Practice vol 2 page D1-65 – D1-66.
4 See Erasmus: Superior Court Practice vol 2 page D1-65 – D1-66.
5 Hart v Pinetown Drive -In Cinema (Pty) Ltd 1972 (1) SA 464 (D) at 469C -E. See also Radebe and
Others v Eastern Transvaal Development Board 1988 (2) SA 785 (A) at 793D; Fischer and Another v
Ramahlele and Others 2014 (4) SA 614 (SCA); [2014] ZASCA 88; [2014] 3 All SA 395 (SCA)
para 13.
6 Grobler v Oosthuizen [2009] ZASCA 51; 2009 (5) SA 500 (SCA) (Grobler).
7 Grobler para 11.
8 Engen Petroleum Limited v Flotank Transport (Pty) Ltd [2022] ZASCA 98;2022 JDR 1745 (SCA) para
12 (Engen).
9 Ibid para 13.
7
cause of indebtedness whatsoever, including any reversionary right or interest which any of
us may acquire after the termination of any prior cession, assignment or transfer, and including
any balance of the said amount which may remain after the transfer, and including any balance
of the said amount which may remain after the discharge by satisfaction or otherwise of any
such prior cession, assignment or transfer, and including any rights of action of such balance
against any cessionary, assignee or transferee. No express or tacit waiver by the CREDITOR
permitting payment by the DEBTORS (or any one of them) to any one of us of any amount or
claim referred to herein shall prejudice or diminish the rights of the CREDITOR in terms hereof
in respect of the remainder of all amounts and claims herein referred to. If any of us holds or
acquires any negotiable instrument or any document as security for or evidence of any claim
herein referred to, he shall forthwith on demand make over all his rights herein, and deli ver
same to the CREDITOR.’10
[14] Clearly, on a simple reading of this clause, Bonatla’s case on appeal which is
premised on it having retained the ‘reversionary interest’ on ceding its right to claim to
Merchant, cannot stand. In this regard Bonatla submits that in respect of a pledge, the
cedent does not lose ownership of their rights in the ceded debt. There is no transfer
of ownership and the cedent merely temporarily relinquishes part of its bundle of
personal rights which are transferred to the cessionary. It is for this reason t hat when
the cedent becomes liquidated, the pledged assets are considered assets of the
cedent, so it is argued.
[15] This Court in Grobler,11 describes ‘reversionary interest’ as follows:
‘As to the real meaning of the cedent's “reversionary interest”, I can do no better than to refer
to the following explanation by Nienaber JA in Development Bank of Southern Africa Ltd v Van
Rensburg supra para 50 with which I respectfully agree:
Rensburg supra para 50 with which I respectfully agree:
“This reversionary interest, properly understood, refers to the cedent's interest in the debtor's
performance (i.e. satisfaction of the principal debt by the debtor) rather than to his interest in
the cessionary’s performance (i.e. re -cession of the princi pal debt on satisfaction of the
secured debt - which is [sc would be] a right ex contractu against the cessionary).”’
The court further stated as follows:
10 The language of clauses 20 of the 2013 suretyship and 21 of the 2016 suretyship was the same in
this regard.
11 Grobler para 16.
8
‘. . . Concomitantly they [critics of the pledge theory] also have difficulty with the description of
the interest retained by the cedent in the personal right against the debtor as that of
“ownership” or “dominium”. This difficulty is well formulated in the following dictum by Broome
JP in Moola v Estate Moola 1957 (2) SA 463 (N) at 464B-D:
“The word ‘dominium’ is therefore out of place, and it does not help much to describe plaintiff
as the ‘owner’ of the ceded rights. Ownership of a right of action would seem to imply the right
to sue, and if the right to sue has passed to the cessionary it is difficult to imagine what can
remain with the cedent. The truth probably is that the cedent by way of security retains only
his ‘reversionary right’, that is to say his right to enforce the ceded right of action after the
[secured debt] . . . has been discharged.”’
[16] It is my view that Bonatla misconstrues the concept of ownership in the context
of reversionary interest. This, understandably so because of its reliance on cases that
predate Grobler.12 However, as demonstrated in the above passages, reversionary
interest is the right to enforce the ceded right of action (the right to sue) after the
secured debt has been discharged. What happens is that once the right of action to a
debt has been ceded, the ceden t can no longer be referred to as a creditor but is a
holder of a reversionary interest which can be exercised only once the debt owed to
the cessionary has been paid.
[17] Bonatla’s contention that the legal consequences of a pledge cession results in
a residual right (reversionary right) vesting in the cedent which is sufficient vinculum
juris to confer locus standi for the purposes of liquidating the principal debtor, in this
case, Ruitersvlei, has no merit. The effect of the cession in securitatem debiti is that
the principal debt is ‘pledged’ to the cessionary while the cedent retains what has
the principal debt is ‘pledged’ to the cessionary while the cedent retains what has
variously been described as the ‘bare dominium’ or a ‘reversionary interest’ in the claim
against the principal debtor.13 This Court in Engen14 held that:
‘On “the pledge theory” the principal debt is “pledged” to the cessionary on the basis that the
cedent retains the “bare dominium” or a “reversionary interest” in the claim against the
principal debtor. On such construction, only the right to enforce the right upon non-payment is
ceded. Since cession ordinarily entails a transfer of a right, it is the retention by the cedent of
12 Millman NO v Twiggs 1995 (3) SA 674 (AD) at 676H-I.
13 Grobler para 15; Land- en Landboubank van Suid -Afrika v Die Meester 1991 (2) SA 761 (A) 771C-
G; Development Bank of Southern Africa Ltd v Van Rensburg 2002 (5) SA 425 (SCA) para 50.
14 Engen para 13.
9
the very substance of the right around which the doctrinal debate regarding the pledge theory
has centred.’ (Own emphasis.)
[18] Therefore, the reversionary interest on the basis of which Bonatla seeks to
claim in this matter can only be enforced upon payment of the debt due and owing by
Ruitersvlei to Merchant. Put differently, the reversionary interest only reverts to the
cedent once the secured debt is extinguished. This is further affirmed in Grobler where
it is stated that
‘. . . In the circumstances I find the conclusive answer to the argument under consideration in the
following succinct statement by P M Nienaber in Lawsa (op cit para 54):
“Once the secured debt has been repaid by the cedent to the cessionary the cession in securitatem
debiti has fulfilled its primary function [of securing the secured debt] and the right [as creditor in terms
of the principal debt] reverts to the cedent. The erstwhile cessionary is no longer the true creditor, but if
the debtor who has been informed of the cess ion in securitatem debiti but not of its termination, pays
him or her, the debtor will enjoy immunity against any further claim by the cedent.”’
[19] It is not in dispute that the claims ceded to Merchant in terms of the 2013 and
2016 deeds of suretyship have not been discharged. There is no evidence on record
to indicate otherwise.
[20] I should also add that the failure to discharge the claims ceded to Merchant
puts to bed the argument by Bonatla that its reversionary interest means that it is a
contingent or prospective creditor of Ruitersvlei which finding feeds into the second
cause of action to which I will turn to shortly . A contingent liability is one which by
reason of an existing vinculum juris (legal bond or obligation) between a creditor and
the debtor may become an enforceable liability on the happening of some future event.
A prospective liability, on the other hand, is one which by reason of an existing
A prospective liability, on the other hand, is one which by reason of an existing
vinculum juris between the creditor and the debtor will become an enforceable liability
on a future date or on a date determinable by reference to future events. 15 In that
instance there can be no vinculum juris until the occurrence of the future event. There
is no vinculum juris between Bonatla and Ruitersvlei. Bonatla has ceded its right to
claim to Merchant. Thus, the vinculum juris between it and Ruitersvlei has been
deferred by the cession. And until such time as the debt that is secured by that cession
15 Henochsberg on When company deemed unable to pay its debts, 4th ed vol 2 at 711.
10
has been extinguished, or the claim has been receded to Bonatla, Bonatla cannot be
considered a creditor of Ruitersvlei whether contingent or prospective. Moreover, the
cedent under a cession in securitatem debiti of a right of action against the debtor is
neither a contingent nor a prospective creditor in respect of such right, notwithstanding
the reversionary right.16 As a result, the ceded claims have not reverted to Bonatla to
give it the necessary locus standi to wind-up Ruitersvlei. Bonatla is not a creditor of
Ruitersvlei based on the revisionary interest and so has no locus standi, qua creditor,
to wind-up Ruitersvlei.
[21] A further argument on behalf of Bonatla is that the liquidators of an insolvent
company are mandated to administer its affairs and liquidate its assets for the benefit
of the concursus creditorium, and amongst these assets is the reversionary interest in
the loan account. The contention is that the fact that the cessionary – Merchant in this
matter, has a preferential status in relation to the collection, does not detract from the
entitlement of the liquidator to administer the insolvent estate. In this regard reliance
was placed in Incorporated General Insurance Ltd v Gush,17 in which it was held that:
“[. . .] the proceeds of the collection of the book debts properly fell into the estate of the
company in liquidation as being an asset of such company. It follows that the first defendant
[the liquidator] was empowered and indeed obliged to collect them.”
[22] The submission is however misplaced. Henochsberg on the Companies Act 61
of 1973 and Commentary para 342, when dealing with the liquidation of assets and
costs of winding-up, states as follows:
‘The weight of authority, however, is to the effect that a cession in security of a right is
analogous to the pledge of a corporeal movable and that a right so ceded by a company in
securitatem debiti prior to its winding-up is under the administration of the liquidator subject to
the rights of the cessionary as a creditor secured by such right. The company’s reversionary
right under such cession (i.e. its right against the cessionary) arising out of agreement, express
or implied between them to receive ces sion back of the ceded right if and when the debt
secured by the cession is discharged or, where the ceded right has been enforced by the
cessionary, to payment of an amount equal to that portion, if any, of the proceeds of the
enforcement which exceeds th e amount required to discharge such debt is also under the
administration of the liquidator subject, if it too has been ceded in security (it is capable of
16 Holzman NO v Knights Engineering & Precision Works (Pty) Ltd 1979 (2) SA 784 (W).
17 Incorporated General Insurances Ltd v Gush 1990 (4) SA 573 (W).
11
being so ceded) to the rights of the cessionary as a creditor secured thereby. But if prior to
winding-up, the company is paid the ceded claim by the debtor thereunder, whether with or
without knowledge of the cession, the cessionary has no rights in respect of the amount paid.’
(Footnotes omitted.)
Henochsberg states further that –
‘Consequently, it is submitted, where at the commencement of its winding-up such cession by
it subsists, the company cannot enforce the right by legal proceedings in the absence of a re-
cession of the right to it, notwithstanding that the right is under the liquidator’s administration:
. . .’ (Footnotes omitted.)
[23] I align myself with the above statements of Henochsberg because a liquidator
cannot exercise the powers it does not have. Liquidators can, also, not acquire greater
rights than the cedent only because the cedent has been liquidated. It is my view that
the liquidator of a company that has ceded its right to a claim and gone into liquidation
is vested with the reversionary right and whatever right the cession confers.
[24] Having found that Bonatla was neither a creditor, nor that it was entitled to rely
on its reversionary interest as it would only have reverted to it on the discharge of the
debt to Merchant, the high court thus correctly held that Bonatla was neither a
contingent or prospective creditor, for purposes of the second cause of action either.
It was, however, still necessary for the high court to explore whether Bonatla had
alleged and proved that it had locus standi for an order based on just and equitable
grounds. Bonatla criticized the High Court for having found standing for the second
cause of action but not for the first, in the following terms in its heads of argument: “By
accepting Bonatla’s locus standi in terms of section 344(h) [second cause of action] it
is illogical to deny standing in terms of section 344(g). [first cause of action]” The high
is illogical to deny standing in terms of section 344(g). [first cause of action]” The high
court did not consider locus standi in respect of the second cause of action and erred
in not doing so. The first port of call of course would have been to establish whether
Ruitersvlei is solvent or not as those who have standing to do so are located in different
acts. Be that as it may, as a fact, no alternative basis was alleged in the founding
papers and it accordingly, in the circumstances of this case, follows that Bonatla, also
has no standing for the second cause of action. The issue of whether this Court should
interfere with the exercise of the high court’s discretion not to wind-up Ruitersvlei on a
just and equitable basis, thus does not come into play. In any event, there is no valid
12
basis on which to interfere with the exercise of the discretion of the high court. The
considerations of the high court in this regard appears valid to me. First, Merchant as
the largest creditor of Ruitersvlei does not allege that the liabilities arising from the
suretyships are due and owing, instead it is opposing the liquidation application.
Second, the suggestion by Bonatla of improper relationship between Ruitersvlei and
Merchant is not apparent from the papers. Lastly, the liquidation application was
issued more than one year after the s 345 letter of demand, and there is no explanation
in the papers for the delay.
[25] On a proper consideration of this appeal, all of Bonatla’s arguments revolve
around the reversionary interest it relies on for its locus standi . Bonatla, however,
misses the point because in order for the reversionary interest to assist it in clothing it
with standing, the secured debt must first be extinguished. The secured debt in this
matter has not been discharged. As a result, Bonatla does n ot have standing to
liquidate Ruitersvlei. The appeal must therefore fail.
[26] Consequently, the following order is made:
The appeal is dismissed with costs including costs of two counsel.
___________________________
E M KUBUSHI
ACTING JUDGE OF APPEAL
13
Appearances
For the appellant: M Tsele (with B Viljoen)
Instructed by: KWA Attorneys, Johannesburg
Hill McHardy & Herbst Inc, Bloemfontein
For the first respondent: A Smalberger SC (with R Fitzgerald)
Instructed by: Rubensteins Attorneys, Cape Town
Webbers Attorneys, Bloemfontein
For the second respondent: J G Dickerson SC (with L V R Van Tonder)
Instructed by: Werksmans Attorneys, Johannesburg
Lovius Block Inc, Bloemfontein.