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[2026] ZAGPJHC 236
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Ruwacon (Pty) Ltd v Lead Engineering and Projects (Pty) Ltd (2025/003963) [2026] ZAGPJHC 236 (2 March 2026)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
JOHANNESBURG
CASE
NO:
2025-003963
(1)
REPORTABLE: NO/YES
(2)
OF INTEREST TO OTHER JUDGES: NO/YES
(3)
REVISED: NO/YES
DATE
2 March 2026
In the matter between:
RUWACON
(PTY)
LTD
Applicant
(Registration number:
2003/017933/07)
and
LEAD
ENGINEERING AND PROJECTS (PTY) LTD
Respondent
(Registration number:
2012/114701/07)
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 a final winding
up order in terms of the Companies Act, 1973 (“1973 Act”),
as read with Item
9 of Schedule 5 to the Companies Act, 2008 (“Act”)
on the grounds of the respondent’s inability to pay its debts
[s 344(f) read with s 345(1)(a) or s 345(1)(c)], alternatively
because it is just and equitable to do so [s 344(h)]. The claim
is
founded on a written acknowledgment of debt. I must also consider
whether the applicant’s refusal to accept a tender for
payment
of the debt constitutes an abuse of court processes. Two further
matters resolved themselves and I am not called upon to
consider the
respondent’s striking out application or whether to admit its
further affidavit; the former was withdrawn and
the latter admitted
by agreement.
[2]
Several affidavits additional to the
customary three affidavits were filed in this matter, some by
agreement and another by order
of court. The applicant’s
replying affidavit was filed on 6 March 2025, whereafter the
applicant agreed to the respondent
filing a fourth affidavit to
respond to new matter in the replying affidavit involving a cession
by the respondent in favour of
Absa Bank Ltd (“Absa”). It
filed the fourth affidavit on 12 May 2025, which caused the applicant
in turn to file a
supplementary replying affidavit on 22 May 2025. On
29 August 2025, on the eve of the intended hearing of this
application on 1
September 2025, the applicant sought leave to file
yet another affidavit, this time dealing with a belated tender that
had been
made to the applicant, on a without prejudice basis, on 12
August 2025 and repeated on 25 August 2025. The main application was
postponed, and the respondent was granted the requested leave by
Order dated 4 October 2025 to file the so-called tender affidavit.
In
terms of the aforesaid Order, the applicant filed a second
supplementary replying affidavit on 21 October 2025 in response to
the tender affidavit. One would reasonably have expected that to be
the close of the pleadings, yet on the eve of the hearing before
me
the respondent on 23 January 2026 attempted a final bite at the
proverbial cherry when it filed an affidavit in excess of 140
pages
(with annexures) “
to deal with new
matter and adverse conclusions raised
”
in the applicant’s last affidavit that had been filed some four
months earlier. I am mindful that there has been a
mid-way
intervention by the Court, but it would be remiss of me not to
caution that a winding up application should not be litigated
through
never-ending sets of affidavits filed over a period of more than a
year (albeit that they were filed by agreement).
[3]
Despite the prolixity of the papers, the
material facts are uncomplicated and largely common cause. Such
disputes as do exist, can
comfortably be decided on the papers.
[4]
The respondent was placed under business
rescue in terms of Chapter 6 of the Act, but those proceedings were
terminated in November
2023 when a notice of substantial
implementation was filed. Apparently, the respondent’s
financial problems were not entirely
resolved because within a few
months it was unable to settle a R2.3 million debt due to the
applicant, causing the parties to conclude
a written acknowledgement
of debt (‘AoD’) in August 2024. The relevant terms of the
AoD required of the respondent
to make timeous instalment payments
towards an aggregate debt of R2,3 million [clause 3] with an
acceleration clause on failure
making the balance immediately due and
payable [clause 4], and further, included a non-variation provision
that prevented any amendment
to the AoD unless by written signed
agreement [clause 8]. The instalments of R575,000.00 were due to be
paid on or before 31 October
2024, 8 November 2024, 8 December 2024
and 8 January 2025.
[5]
The respondent made the first payment of
R575 000.00 on 31 October 2024 and then breached the AoD by failing
to make the next payment,
because its cashflow had been impacted due
to a contractual dispute involving a third party. In terms of the
AoD, the total outstanding
amount
became
immediately due and payable. On 15 November 2024 the respondent
sought a relaxation and extension of the agreed time periods
recorded
in the AoD and also failed to make the next payment due on 8 December
2024. The applicant’s response to the admitted
breaches of the
AoD was to deliver a demand in terms of s 345(1)(a) of the 1973 Act
on 11 December 2024, for the respondent to
pay or secure or compound
for payment the outstanding amount of R1,725,000.00 plus interest (at
a rate of 12% per annum, compounded
monthly and capitalised), for the
stated reason that an extension of the payment terms was prohibited
by clause 8 of the AoD. The
respondent failed to pay or secure or
compound for payment the outstanding amount, and instead proceeded to
pay only R575,000.00
on 7 January 2025. On 10 January 2025 it
requested an indulgence to pay the remaining two instalments on 8
February 2025 and 8 March
2025. The applicant rejected this
request on 13 January 2025 and issued the present application on 15
January 2025.
[6]
On 5 February 2025 the respondent’s
bank account was attached pursuant to a Court Order, and uplifted on
24 February 2025
in terms of a reconsideration Order obtained by the
applicant. There has been no impediment preventing the respondent
from making
payment to the applicant since this date.
[7]
The tender affidavit disclosed that the
respondent had made a without prejudice tender to the applicant on 12
August 2025 to pay
the full capital plus interest owing at the time,
together with the costs of this application up to that date. The
tender was repeated
on a with prejudice basis on 25 August 2025. The
respondent refused to accept the tender. In the affidavit filed late
in January
2025, the respondent introduced further evidence in
respect of the tender. First, a letter dated 29 September 2025, after
the applicant
had filed its heads of argument and other processes in
anticipation of the hearing of this application, in which the
applicant
insisted that the proper course for the applicant was to
accept the tender, which it was ready, willing and able to perform.
Second,
a further letter dated 1 December 2025, with enclosed proof
of payment of R1,293,627.51 to the applicant, comprising the original
tendered amount together with interest accrued on the trust
investment account as at date of payment (and reserving the
respondent’s
rights in respect of costs). The applicant had
rejected the payment in a letter dated 4 December 2025, which
requested the respondent’s
or its attorneys’ bank details
so that the payment could be returned. This was not provided and on
10 December 2025 the applicant
informed the respondent that the
payment, which had not been accepted by the applicant, will be paid
into its attorneys’
trust account and be paid over to the
liquidators.
[8]
Counsel were agreed that I could, and
should, decide the matter finally. The question is whether the
applicant has established its
case for a winding up on a balance of
probabilities [
Kalil v Decotex (Pty) Ltd
1988 (1) SA 943
(A)]. There are three issues to consider: (a) whether
the respondent is unable to pay its debts, either in terms of s
345(1)(a)
or s 345(1)(c); (b) whether it appears to the court that it
is just and equitable that the respondent be would up; and
(c) whether
the applicant’s refusal to accept the tender
of payment or payment constitutes an abuse of the court processes.
For reasons
that shall become apparent, I shall deal with the last
issue when dealing with the first and not deal with the second issue
at
all.
Inability to pay
[9]
The heads of argument filed on behalf of
the respondent did not engage with this issue at all. I hasten to add
that the heads of
argument were not prepared by Mr Bester SC, who
appeared before me and addressed the matter fully in argument. He
submitted that
the respondent suffered at the time from a temporary
cashflow crunch that had improved to the extent that all its
creditors have
been paid and it is now neither commercially nor
factually insolvent. His suggestion that the founding affidavit was
thin on the
necessary facts cannot be taken at face value, as the
answering affidavit contained little more than an admission of the
fact that
its then-current inability to make payments were caused by
external factors. The matter certainly evolved over time, and
particularly
after the respondent’s attempt to explain its
financial position and solvency in the fourth affidavit. I must
therefore consider
the complete narrative of events.
[10]
It is common cause that the respondent was
indebted to the applicant in the sum of R1,725 million and that the
latter duly served
on the respondent a demand in terms of s 345(1)(a)
of the 1973 Act. The latter failed to pay the sum or to secure or
compound for
it to the satisfaction of the applicant. The consequence
of this is that the respondent is deemed to be insolvent. That is the
starting point.
[11]
Save for the issue of the tender and
belated payment (to which I shall revert), the respondent did not
dispute its indebtedness.
[12]
When the respondent did respond to the
demand, it was to seek an extension of the payment terms before it
attempted to excuse its
failure to pay by referring to the external
factors caused by the third-party dispute and attachment of its bank
account. The approaches
would not fill a creditor with confidence as
to the debtor’s financial strength, and it did not do so for
the applicant.
I would venture to suggest that the external factors
faced by the respondent are some of the very reasons that frequently
motivate
creditors to launch winding up applications. As a matter of
law, the required performance (
i.e.
,
payment of the debt) was not of a personal nature and it was not
rendered impossible by the alleged intervening external factors
[
Scoin Trading v Bernstein
2011 (2) SA 118
(SCA) at para 22]. It follows that the applicant is
entitled to a winding up
ex debito
justitiae
and the court's discretion to
refuse an order is a very narrow one, rarely exercised and only if
special or unusual circumstances
prevail
.
[
Afgri
Operations Ltd v Hamba Fleet Management (Pty) Ltd
2022
(1) SA 91
(SCA) para 12].
[13]
The respondent contends that it is neither
nor factually commercially insolvent. It says so despite that fact
that it failed to
pay the applicant until almost a year after this
application had been filed. It also failed to pay R186,000.00 to SA
Container
Park (Pty) Ltd (“SA Container Park”), a trade
creditor that launched an application for the winding up of the
respondent
in mid-2024. This application remains pending despite the
respondent having initially tendered the payment of its claim in full
and paying the money to its attorneys in trust for the sole benefit
of SA Container Park, and (as with the applicant) finally paying
SA
Container Park directly on 1 December 2025. This was confirmed by
affidavit and proof of payment filed by agreement
in
medias res
. The respondent has provided
no correspondence between it and SA Container Park that would explain
whether it unconditionally accepted
the payment, or whether it has
elected not to do so and has kept its winding up application alive
for the same reason the applicant
did. One would reasonably have
expected the respondent to ensure that SA Container Park withdrew its
application before the hearing
of this matter. Whilst I am reluctant
to read too much into these facts and expectations, and whatever the
undisclosed explanation
may be, I agree with Mr Van Tonder (who
appeared for the applicant) that I cannot ignore the fact that there
is another winding
up application pending against the
respondent.
[14]
Despite being called upon to disclose its
annual financial statements for the years ending December 2023 and
December 2024 to dispute
what the applicant referred to as “
its
hopeless financial state
”, the
respondent chose not to do so. Its stated reason was that it had no
obligation “
to produce evidence in
rebuttal of an unsubstantiated allegation.
”
This is a baffling response in light of the admitted facts at the
time. Significantly, the respondent did not say that it
did not have
those financial statements (which it was obligated to furnish to
Absa) but rather that it was not necessary to disclose
them to the
applicant. The obvious corollary of its refusal is the fact that I am
also unable to consider the financials. And despite
the development
of the matter over time and the further relevant questions that were
raised regarding its solvency, it did not
revisit its election:
“
Now,
when a man commits an act of insolvency he must expect his estate to
be sequestrated. The matter is not sprung upon him
. . . . Of
course; the Court has a large discretion in regard to making the rule
absolute; and in exercising that discretion the
condition of a man’s
assets and his general financial position will be important elements
to be considered. Speaking
for myself, I always look with great
suspicion upon, and examine very narrowly, the position of a debtor
who says, ‘I am
sorry that I cannot pay my creditor, but my
assets far exceed my liabilities.’ To my mind the best’
proof of
solvency is that a man should pay his debts; and therefore I
always examine in a critical spirit the case of a man who does not
pay what he owes
”.
[
De Waardt v Andrew
and Thienhaus
1907 TS 727]
[15]
What it did decide to provide, was its July
2025 balance sheet. I heard argument from counsel on the accounting
and auditing inferences
to be drawn from this document, which was
ultimately the only materially relevant document put up by the
respondent to demonstrate
its solvency. That it left much to be
desired, was revealed by counsels’ attempts to extract
information that suited their
client’s respective cases. I do
not criticise counsel, but if I am to cut the Gordion knot (as I
must), I prefer the submissions
by Mr Van Tonder that the balance
sheet confirms that the respondent is factually and commercially
insolvent. As he pointed out,
the document records that the total
liabilities exceed the total assets by R326,324,604.29, and the cash
and cash equivalents of
approximately R1½ million are
insufficient to satisfy the current liabilities in excess of R40
million. It would, in my
view, be wrong when determining factual
solvency, to exclude subordinated claims (as Mr Bester suggested);
the holders of those
claims are prospective creditors who are
entitled to be paid after the claims of all other creditors are
settled. Not all creditors
were paid. There are certainly other
creditors that were not paid during 2025, some of which may have
claims that are due and payable.
SA Container Park was one such
creditor. As the respondent explained, SA Container Park debt fell
under the line item of ‘trade
creditors’ of approximately
R30 million. It would not be correct to include ‘trade and
trade receivables’ for
the purpose of determining commercial
solvency. These are not liquid or ready realisable assets that can be
used to pay debts as
and when they fall due. [
Rosenbach
& Co (Pty) Ltd v Singh’s Bazaars (Pty) Ltd
1962 (4) SA 593
(D&CLD) at 597C-E/F] The balance sheet does not
displace the prima facie inference of insolvency, but rather confirms
it.
[16]
Finally, it appears to be indisputable that
the respondent may have paid as much as R25 million to Absa and R61
million to Merchant
Commercial Finance (Pty) Ltd (“Merchant
Finance”) since this application was issued. The Absa debt of
approximately
R26 million decreased to only R1 363 464.63 as at July
2025, and its debt of approximately R61 million to Merchant Finance
was
discharged during August 2025. I cannot in the circumstances
simply assume that the applicant traded itself out of these debts and
did not incur further loan funding to do so. The respondent did not
make a full disclosure of the facts as to when, how much and
how it
managed to pay these debts in circumstances where it was unable to
pay the relatively small claims of the applicant and
SA Container
Park. It does not follow from the fact that major creditors were
paid, that the respondent is solvent. The respondent’s
situation was well described in the following
dicta
in
Rosenbach supra
at 598B/C-D/E:
“
The prima
facie inference, therefore, is that the respondent was unable to
pay these debts. Had it been able to do
so, but actuated by the
motives spoken of by Singh, it would have paid them in the interval
of time between the 26th June and 8th
July, for I do not believe that
a business man would permit irritation and pique so to influence his
business relations as to deter
him for so long from settling such
debts if he was able to do so.
”
[17]
I am accordingly satisfied that the
respondent is unable to pay its debts.
[18]
Which brings me to the issue of the tenders
that were rejected by the applicant, and the payment that it refuses
to accept.
[19]
The applicant’s reason for doing so,
is explained in correspondence between the parties’ attorneys
and in its affidavits.
Since it established in mid-2025 that the
respondent had made substantial payments to Absa and Merchant
Finance, and that there
was another winding up application pending
due to the failure to pay SA Container Park, it was concerned that
acceptance of the
tenders or payment could be impeached as a void or
voidable disposition. The respondent contends that the concerns are
unfounded
and that the applicant’s conduct constitutes an abuse
of court processes. There is, however, support for the applicant’s
attitude.
[20]
A tender is an undertaking to pay. It does
not constitute payment [
Origo
International (Pty) Ltd v Smeg South Africa (Pty) Ltd
2019
(1) SA 267
(GJ) para 16] and the applicant was not obligated to
accept the tenders or the payment. The
locus
classicus
on the issue is
Salkow
v Reeb: Winter Intervening
1930 WLD
166:
“
The
next point to be considered is whether the tender of payment to
Winter of the amount due under the promissory note is an answer
to
the claim for sequestration. I am prepared to assume in favour
of the respondent that this is an unconditional tender,
but it seems
to me that the creditor is not necessarily compelled to accept
payment of a debt, where payment is offered to him
at a time when he
knows that the debtor is in insolvent circumstances, and that the
payment to him in full will constitute a preference.
”
[at 174]
[See also
Ozinsky NO v
Lloyd
1992 (3) SA 396
(C) at 424D (judgment confirmed on appeal
in
Ozinsky NO v Lloyd
[1995] ZASCA 34
;
1995 (2) SA 915
(AD));
Harvey NO v
Theron & Anor
2023 JDR 2302 (WCC) paras 47 and 48;
Mars
The Law of Insolvency in South Africa
9
th
Ed pp248,
261, 373]
[21]
The facts indicate that the respondent was
at all relevant times insolvent and that the consequences of the
tender and payment would
be to prefer one creditor above others. It
suffices to refer to the fact that the tenders and payment were made
when the respondent
had an outstanding debt to SA Container Park and
there was (and remains) a pending winding up application that hangs
as the sword
of Damocles over these proceedings. Mr Van Tonder
correctly pointed out that once the liquidator has proved the
elements of a void
or voidable transaction, there is no defence
available to the applicant in whose favour the payment was made.
[22]
The respondent’s contention that the
payment to the applicant was made in the ordinary course of business
cannot be accepted
at face value. The same applies to the tender and
payment to SA Container Park. The
onus
will ultimately be on the applicant (in whose favour the disposition
was made) to prove that the tenders and payment were made
in the
ordinary course of business and that it was not intended thereby to
prefer the applicant above other creditors. But the
tenders and
payment were made at times when the respondent (and applicant) knew
that insolvency was actual or imminent and that
the disposition would
have preferred the applicant above other creditors (
i.e.
,
SA Container Park and Absa). I cannot readily accept that the tenders
or the payment was made in the normal course of business.
They were
not made in terms of a valid contract, such as the AoD that was
executed in a manner and on the prescribed date for payment
but were
made under duress and despite the threat of winding up proceedings
that had been launched by two creditors. [See
Mars
supra
at para13.19]
[23]
The applicant was correct in refusing to
accept the tenders and payment made by the respondent.
[24]
Having found that the respondent is unable
to pay its debts, it is not necessary that I consider the alternative
relief for a just
and equitable winding up under s 344(h) of the 1973
Act.
[25]
I grant the following order:
1.
The respondent is placed in final winding
up.
2.
The costs of the application shall be costs
in the winding up.
P STAIS
Acting Judge of the High
Court
Johannesburg
APPEARANCES
:
Applicant:
Mr LvR van Tonder
Instructed by:
SmitSew Attorneys
Respondent:
Mr A Bester
Instructed by:
WJJ Badenhorst Inc
Hearing:
11 February 2026
Judgment:
2 March 2026