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[2026] ZAGPJHC 237
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Paladar Resources (Pty) Ltd v Connaught Mining (Pty) Ltd (2025/125474) [2026] ZAGPJHC 237 (26 February 2026)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
JOHANNESBURG
CASE
NO:
2025-125474
(1)
REPORTABLE: NO/YES
(2)
OF INTEREST TO OTHER JUDGES: NO/YES
(3)
REVISED: NO/YES
DATE
26 February 2026
In the matter between:
PALADAR
RESOURCES (PTY) LTD
Applicant
(Registration number:
2016/325606/07)
and
CONNAUGHT
MINING (PTY) LTD
Respondent
(Registration number:
2020/910735/07)
JUDGMENT
STAIS
AJ:
This judgment is
handed down electronically by circulating it to the parties’
representatives by email and by uploading on
CaseLines.
[1]
This is an application for the provisional
winding up of the respondent in terms of the Companies Act, 2008
(“Act”),
alternatively the Companies Act, 1973 (“1973
Act”).
[2]
During argument, Ms Acker (who appeared for
the applicant) circumscribed the causes for the relief sought under
the 1973 Act to
the respondent’s inability to pay its debts [s
344(f)], alternatively that it is just and equitable that it be wound
up [s
344(h)]. She submitted in the further alternative, in the event
the respondent was not insolvent, that it falls to be wound up in
terms of the Act for the reason that it was just and equitable [s
81(1)(c)(ii) and (d)(iii)], and in this regard the court was
requested to specifically consider factors that would otherwise lend
independent support under the Act for a winding up by reason
of fraud
[s 81(1)(e)(i)] and misapplication or wasting of assets [s
81(1)(e)(ii)]. A further cause, that of deadlock [s 81(1)(d)(i)
and
(ii)], was appropriately abandoned.
[3]
I am specifically asked to determine (a)
whether the applicant is a creditor of the respondent; (b) whether
the respondent is unable
to pay its debts; and (c) whether it is
just and equitable to wind up the respondent? I shall consider each
in turn.
[4]
But before doing so, I must deal with the
concern expressed by Mr Van den Bogert (who appeared with Mr Steyn,
for the respondent)
that the applicant cannot have it both ways by
relying on the solvency alternatively insolvency of the respondent,
and seek relief
under both the Act and the 1973 Act. The main relief
was sought under the Act and therefore, so he argued, the respondent
was entitled
to accept that it was common cause that the respondent
is solvent. To my mind the argument loses sight of the fact that the
applicant
relies alternatively on the solvency or insolvency of the
respondent. I need therefore say no more on the subject than refer to
the approval given to this approach in
Boschpoort
Ondernemings (Pty) Ltd v Absa Bank Ltd
2014 (2) SA 518
(SCA).
[5]
It is common cause that the applicant is a
shareholder of the respondent. It has the necessary standing to bring
the application
for a winding up on the grounds of both an inability
to pay in terms of s 344(f) of the 1973 Act, and also on just and
equitable
grounds in terms of s 81(d)(ii) of the Act and s 344(h) of
the 1973 Act.
Is the applicant a
creditor of the respondent?
[6]
The applicant alleges that the respondent
is indebted to it in the sum of R5,500,000.00 arising from a written
loan agreement (“Loan
Agreement”) concluded on 22
September 2022. The respondent admits the Loan Agreement; admits that
the applicant advanced
it the sum of R2,750,000.00; and admits that
it was agreed that the respondent would repay R5,500,000.00 to the
applicant. However,
it disputes its indebtedness arising from the
Loan Agreement on several grounds, two of which satisfy me that the
debt is disputed
on
bona fide
and reasonable grounds, and either of which would constitute a good
defence to the claim.
[7]
The first is the undisputed fact, on the
papers before me, that the applicant has not complied with the
provisions of a
lex commissoria
contained in the Loan Agreement. Although this dispute may not affect
the applicant’s status as a contingent creditor, the
absence of
lawful demand goes directly to the question whether the debt is due
and payable. It also raises the question whether
the loan was valid
and extant (the respondent alleges that it was fictitious and that no
demand has been made for payment since
inception of the Loan
Agreement). I shall revert to this issue when I deal with the
applicant’s alleged inability to pay
its debts.
[8]
The second is the respondent’s
contention that the claim will likely have prescribed before the
hearing. Irrespective of whether
I consider this to be a question of
law or by applying the Badenhorst principle, it appears from the
affidavits before me that
there may be merit to this defence [see the
first and third judgments in
Trinity
Asset Management (Pty) Ltd v Grindstone Investments 132 (Pty) Ltd
2018 (1) SA 94
(CC)]. There is no suggestion that summons for payment
of the loan has been served on the respondent.
[9]
The Loan Agreement provides that the loan
was to be repaid “
as may be agreed
from time to time … but on or before the termination date.
”
The termination date was defined as the discharge date or 6 months
from the affective date,
i.e.
,
in either event when the advance was made in or about October 2022.
Absent agreement to extend the payment date and absent a lawful
demand, Mr Van den Bogert may be correct in his submission that the
debt has become prescribed. But the submission is not without
certain
concerns that prevent me from making a definitive finding in this
regard.
[10]
In the affidavits before me, the
applicant’s bald allegation that the respondent failed to make
payment pursuant to a proper
demand was met with the answer that the
applicant had “
not demanded any
payments
” under the Loan
Agreement. This response stands factually uncontradicted by the
absence of any supporting facts or of any
particularity adduced in
the replying affidavit. Mr Van den Bogert pointed out that the
applicant failed to establish that it had
complied with the terms of
the
lex commissoria
.
It being trite law that a
lex commissori
requires strict compliance with its terms [
Rautenbach
v Venner
1928 TPD 26
at 30]. But none
of this is decisive of this issue.
[11]
The affidavits before me referred to a
recent judgment by Makume J (as did counsel in their arguments) that
was delivered in an
earlier application brought by the applicant and
its former director (Mr Sharp, who was at the time also a director of
the respondent)
to address certain governance issues and to have the
respondent placed in business rescue. I refer to
Sharp
& Anor v Buthelezi & Others
c/no 2024-088147, in which the applicant herein was the second
applicant and the respondent herein was cited as the fifth respondent
– “Sharp application”. To allow me to consider the
context in which the referenced
dicta
in Makume J’s judgment were made, I requested, and was granted,
access to the Sharp application on CaseLines. I found an
unexplained
anomaly. The affidavits filed of record in the Sharp application
disclosed the undisputed fact that the applicant had
on 25 July 2024
made a demand on the respondent in terms of the
lex
commissoria
contained in the Loan
Agreement [founding affidavit 02-48 para 119, FA23 02-151, answering
affidavit 02-261 para 348]. I hasten
to add that counsel who appeared
before me were not the same counsel who argued the Sharp application
before Makume J. But the
ineluctable conclusion is that I am not in a
position to divine the reasons for the respondent’s emphatic
denial, in its
affidavits before me, that the applicant had made “
any
demand
”. The answering affidavit
in the Sharp application was deposed to by NI Buthelezi (“Ms
Buthelezi”), who deposed
to a confirmatory affidavit in the
present matter. She may have an explanation for the variance in the
respondent’s version.
[12]
The aforementioned raise material disputes
of fact incapable of being resolved without hearing
viva
voce
evidence. In the circumstances, it
is not necessary to consider the other defences to the claim, which I
found unconvincing. Suffice
it to say that the dispute as to the
existence of the debt cannot be resolved on the affidavits and, all
things otherwise being
equal, I may have referred it to evidence
[
Kalil v Decotex (Pty) Ltd & Anor
1988 (1) SA 943
(AD) at 981D-J]. However, for reasons that follow, it
is not necessary to do so.
Inability to pay debts
[13]
I accept Ms Acker’s argument that a
company’s failure to pay on demand a debt that is due and
payable, may be
prima facie
proof of an inability to pay its debts on demand. The question,
though, is whether this is an allegation that can fairly be made
against the respondent on the facts before me.
[14]
An
applicant must make out its case in the founding affidavit [
My
Vote Counts NPC v Speaker of the National Assembly and Others
2016
(1) SA 132 (CC)
at paragraph 177]. The highwater mark as to the
respondent’s inability to pay is the allegation that the
applicant does “
not
know whether the respondent is insolvent
”,
but that there is “
doubt
that it is solvent
”.
No cogent evidence was produced to support this allegation.
[15]
On the evidence before me, I must perforce
accept that the applicant did not make a lawful demand on the
respondent for payment
of the loan or, at best for the applicant,
that there is a material dispute of fact on this issue which cannot
be resolved on the
papers before me. In either event, I cannot take
it as proven that the respondent is unable to pay the loan amount,
which is the
only source of the respondent’s alleged insolvency
relied on by the applicant.
[16]
There are various allegations to the effect
that the respondent has lost, wasted or misspent money. None of these
allegations provide
sufficient reason to find that the respondent is
insolvent. The allegations are disputed by counter allegations, often
with reference
to documentary and other supporting evidence. Despite
the applicant’s allegations of mismanagement and financial
concerns,
there is ample evidence that the respondent continues to
trade. And that it does so successfully and profitably. The founding
affidavit
speaks of anticipated revenue from a specific project of
R16 million which the applicant says contradicts an earlier estimate
of
R50 million, and it criticises a misappropriation of coal stock
sales of R10½ million. Even the allegation that “
theres
a hole of R30m in the project and they need to optimise it to prevent
a loss
(sic)”, drew no more than
a mild reaction from the applicant’s director at the time:
“
Sounds interesting. Can you share
some facts?
”. There is nothing to
gainsay the respondent’s version that R30 million was not lost.
I also cannot ignore the finding
by Makume J that the applicant’s
financial position was healthier than before the governance disputes
and that the respondent
was not financially distressed. The applicant
has not produced evidence to establish that the respondent’s
financial status
has materially deteriorated since Makume J’s
judgment.
[17]
The applicant has failed to establish, even
prima facie
,
that the respondent is factually or commercially insolvent.
Just and equitable
[18]
What remains, is to consider whether it is
just and equitable for the respondent to be wound up. It matters not
whether in terms
of the Act or the 1973 Act.
[19]
The applicant’s complaints are based
on friction between shareholders, an alleged lack of financial
transparency and a fraud
perpetrated on the applicant. These issues
require context.
[20]
In 2020, Mr Sharp was the sole shareholder
of the applicant, and the latter was the sole shareholder of the
respondent. Mr Sharp
was at the time the only director of both the
applicant and the respondent. The respondent acquired a mining right
in 2022. By
March 2023 Muziwen Holdings (Pty) Ltd (“Muziwen”)
had acquired 40% of the applicant’s shareholding in the
respondent
and was represented on the latter’s board by its
sole shareholder and director, Ms Buthelezi. By March 2023
Muziwen
had acquired a further 20% shareholding from the applicant
and became the majority shareholder (60%) of the respondent. The
balance
(40%) remained with the applicant. Mr Sharp was still the
applicant’s sole director and remained on the respondent’s
board, together with Ms Buthelezi. Muziwen subsequently appointed
further directors to the respondent’s board and purported
to
remove Mr Sharp as a director, all of which resulted in a strained
business relationship between Mr Sharp and Muziwen’s
directors
on the respondent’s board.
[21]
These were the prevailing circumstances
when a company owned by Mr Dovey (the deponent to the applicant’s
affidavits herein)
acquired the applicant in mid-2025. Two months
later Mr Sharp (supported by Mr Dovey) launched the Sharp
application. The purpose
of the Sharp application was threefold –
removing Muziwen’s newly-appointed directors, setting aside Mr
Sharp’s
removal and placing the respondent in rescue in terms
of Chapter 6 of the Act. Makube J endorsed the new appointments,
reversed
the removal of Mr Sharp and refused to place the respondent
in rescue.
[22]
Mr Sharp has resigned from the respondent’s
board. He was not substituted by Mr Dovey, who has never served on
the board.
There are no disputes as between the respondent’s
directors that are relevant to the relief sought herein. The disputes
do
not relate to the functioning of the respondent’s board.
[23]
The applicant’s principle complaint
is that the respondent’s board (more specifically Ms Buthelezi,
a director and chief
executive officer) refuses to provide the
applicant with financial information. But it must be borne in mind
that the applicant
is a minority shareholder that is not represented
on the board. Mr Dovey, representing the applicant, is entitled to
the limited
financial (and other) information identified in s 26(1)
of the Act or as provided for in the respondent’s memorandum of
incorporation
(“MOI”). But he sought, and claimed an
entitlement, to be granted immediate and full access to the
respondent’s
bank statements and management accounts,
quantities of coal stock, and details of any sales and potential
sales. At no time was
any reference made to the MOI or to s 26 of the
Act or to any other right that would entitle the applicant to be
granted access
to such detailed information as he sought about the
respondent’s “
financial
affairs
”.
[24]
The respondent does not have recent audited
financial statements. But this fact was not raised specifically in
support of the just
and equitable relief. It is a matter to be
resolved as between shareholders in terms of the MOI. I am not
prepared to wind up the
respondent at the instance of the applicant
merely because the board failed to attend to the preparation of
audited financial statements.
The applicant was until shortly before
this application represented on the board by Mr Sharp and is not
innocent of this failure.
[25]
The applicant also raises an instance of
potential fraud arising from an alleged fraudulent representation
made to the applicant
involving a document from the Department of
Mineral Resources and Energy (“DMRE”). The document
required of the applicant
to transfer 20% of its shares in the
respondent to Muziwen. It is not clear to me who allegedly made the
representation. There
is no evidence supporting the allegation that
Ms Buthelezi was the author of the DMRE document. Further, an expert
report by a
questioned document examiner cautions that the original
wet ink signed document is required to determine the authenticity of
the
document. In any event, and even if I am able to resolve the
dispute around this document, the applicant accepts that it has a
claim against Muziwen arising from the alleged fraud. It is not
suggested that the fraud relates to the running or management of
the
respondent. I am not prepared, in these circumstances, to wind up the
respondent on the basis of an unproven fraud that that
can be
determined in litigation between the two shareholders.
[26]
No further detail was presented of the
alleged “
sinister threats
”
Ms Buthelezi allegedly made to Mr Dovey. Save for the respondent’s
refusal to furnish the information that the applicant
requested,
there is no specific evidence of friction between shareholders.
Certainly, none that would justify a winding up of the
respondent.
[27]
A further aspect that causes me concern, is
the fact that the applicant fears that a final order would put at
risk the mining right
that only expires in four years’ time. As
a consequence, the respondent (or, ironically, the applicant) would
continuously
be required to justify every few weeks on each
consecutive return day, for several years, why the provisional order
should not
be made final. I cannot permit the drastic consequences
that will be brought about over the long term by the respondent’s
changed status,
i.e.
,
loss of control by directors, impact on contracts and the effect on
the respondent’s business and trading ability.
[28]
Mr Van den Bogert submitted that winding up
is a drastic measure not justified by the facts, and, in any event,
that the applicant
has alternative remedies available to it
inter
alia
as provided for in ss 161, 162 and
163 of the Act. I agree.
[29]
Attempting to justify the winding up the
respondent on the grounds of it being just and equitable, was
ill-advised.
[30]
The applicant failed to establish that the
loan debt was due and payable, that the respondent is insolvent
or unable to pay
the loan debt, or that it is just and equitable
that the respondent be provisionally wound up.
[31]
I do not agree with Mr Van den Bogert that
my order calls for a punitive costs award, but I do believe that the
respondent was justified
in appointing two counsel.
[32]
I grant the following order:
1.
The application is dismissed.
2.
The applicant shall pay the respondent’s
costs on scale C, such costs to include the costs of two counsel (one
being a senior
counsel).
P STAIS
Acting Judge of the High
Court
Johannesburg
APPEARANCES
:
Applicant:
L Acker
Instructed
by:
Thomson Wilks Attorneys
Respondents:
D van den Bogert SC, with
JA Steyn
Instructed
by:
Malherbe Roos Attorneys
Date of
hearing:
10 February 2026
Date of
judgment: 26
February 2026