REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case Number: 2025-0267 40
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: NO
9 March 2026
DATE
In the matter between:
IMRAN DINATH N.O.
ELIZABETH WILANDA PRINSLOO N.O.
and
MANDLAKA YISE PRINCE NDAMASE
First Applicant
Second Applicant
Respondent
Delivered: this judgment was prepared and authored by the judge whose name is reflected
and is handed down electronically and by circulation to the parties/their legal representatives
by email and by uploading it to the electronic file of his matter on Caselines. The date for
handing down is deemed to be 9 March 2026.
2
ORDER
1. The payments made by Champions Royal Assembly NPC (in liquidation) to the
respondent reflected in Annexures “X1” and “X2” to the notice of motion, in the
total amount of R1 730 898.00, are declared dispositions not made for value and
are set aside in terms of section 26(1)(a) read with section 32 of the Insolvency
Act 24 of 1936 and section 340 of the Companies Act 61 of 1973.
2. The respondent is ordered to pay to the applicants the amount of R1 730 898.00.
3. The respondent is ordered to pay interest on the aforesaid amount at the
applicable prescribed legal rate as contemplated in the Prescribed Rate of
Interest Act, Act 55 of 1975 (as amended), a tempore morae to date of final
payment.
4. The respondent is ordered to pay the cost of this application on scale C, including
the cost of counsel.
JUDGMENT
CARELSE AJ
Introduction
[1] This is an opposed application in terms of section 26(1)(a) read with section 32
of the Insolvency Act 24 of 1936 (the Insolvency Act), as made applicable to
companies by section 339 of the Companies Act 61 of 1973.
[2] The applicants are the duly appointed joint liquidators of Champions Royal
Assembly NPC (in liquidation) (Champions Royal). They seek to set aside certain
payments and withdrawals effected during 2019 in favour of the respondent as
dispositions not made for value.
[3] The impugned transactions comprise:
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(a) Payments into the respondent’s personal bank account totalling R1 109
198.00 (Annexure “X1” to the notice of motion); and
(b) Cash withdrawals effected by the respondent from Champions Royal’s
bank account totalling R621 700.00 (Annexure “X2” to the notice of
motion).
[4] The total amount sought to be recovered is R1 730 898.00 together with interest
and costs.
Background
[5] The applicants bring this application following the liquidation of Champions
Royal, a related entity to Supreme National Stock Holdings (Pty) Ltd (SNS) and
Joshua Iginla Ministries NPC (JIM NPC), both of which are also in liquidation.
[6] SNS was placed in liquidation by the High Court of South Africa, KwaZulu-Natal
Division, Pietermaritzburg, on 24 July 2020. On 30 January 2023, that Court declared
that SNS had, before its winding-up, conducted an illegal and unlawful Ponzi scheme.
The scheme defrauded members of the public of approximately R650 million.
[7] During the liquidation of SNS, Champions Royal and JIM NPC were identified
as related entities that had received substantial funds from SNS. Champions Royal
received payments totalling R6 295 101.31. On 16 August 2022, those payments were
declared voidable dispositions and Champions Royal was ordered to repay the
amount. That order confirmed that Champions Royal was obliged to restore the SNS-
derived funds and thus bore a corresponding liability in respect thereof.
[8] An inspection of Champions Royal’s bank statements reveals that funds
received from SNS were rapidly disbursed. Among the payments were the impugned
transactions reflected in annexures “X1” and “X2” to the notice of motion.
[9] It is common cause that the respondent was at all relevant times, a director of
both Champions Royal and JIM NPC. He does not dispute that the impugned
payments and withdrawals were effected. The annexures (“X1” and “X2” together with
the bank statements which they summarise, “ID9”) are therefore accepted as proving
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what they purport to prove and reflect the dates and amounts of the impugned
transactions.
[10] The respondent was subpoenaed to provide evidence and to testify at an inquiry
held under sections 417 and 418 of the Companies Act 61 of 1973 in relation to SNS.
He was unsuccessful in his attempt to review and set aside that subpoena and has,
notwithstanding this, still failed to provide any records to the liquidators of SNS or
Champions Royal.
The issues
[11] The main issues for determination are:
(a) Whether the impugned transactions constituted dispositions not made
for value within the meaning of section 26(1) of the Insolvency Act; and
(b) Whether the applicants have discharged the onus under section 26(1)(a)
of proving that immediately after the dispositions, the liabilities of
Champions Royal exceeded its assets.
[12] The liquidators allege that the impugned transactions constitute impeachable
transactions and voidable dispositions. It should be noted that Champions Royal did
not appoint auditors, submit financial statements, or provide annual reports, further
complicating the administration of its estate. The respondent does not deny this. The
applicants, therefore, relied on the best evidence at their disposal to prove their case.
[13] The respondent’s position, without admitting or denying the existence of any
financial records or related documents, is that if the applicants required documentation
or information from him, they could have subpoenaed him again to appear at an inquiry
under sections 417 and 418 of the Companies Act during the administration of
Champions Royal’s affairs, which they have failed to do. Counsel for the respondent,
during argument, explained that because the onus rests on the applicants, there was
no obligation on the respondent to assist the applicants in discharging such onus by
providing them with documentation or information. A director of a company in
5
liquidation bears a statutory duty to cooperate with the liquidators and to provide
information relating to the company’s affairs.1
[14] The central issue, as emerged during the hearing, is whether, immediately after
the impugned dispositions, Champions Royal’s liabilities exceeded its assets, as
required by section 26(1)(a) of the Insolvency Act.
The legal framework
[15] Section 26 of the Insolvency Act reads as follows:
"(1) Every disposition of property not made for value may be set aside by
the court if such disposition was made by an insolvent –
(a) more than 2 years before sequestration of his estate, and it is
proved that, immediately after the disposition was made, the
liabilities of the insolvent exceeded his assets;
(b) within two years of the sequestration of his estate, and the
person claiming under or benefited by the disposition is unable
to prove that, immediately after the disposition was made, the
assets of the insolvent exceeded his liabilities:
Provided that if it is proved that the liabilities of the insolvent at any time after
making the disposition exceeded his assets by less than the value of the
property disposed of, it may be set aside only to the extent of such excess.”
[16] It is common cause that the impugned transactions occurred in 2019 and that
Champions Royal was finally wound up on 15 March 2023. The dispositions were
therefore effected more than two years before liquidation. Section 26(1)(a) applies and
the onus rests squarely on the applicants. No statutory presumption operates in their
favour.
[17] Section 26(1) aims to prevent someone from impoverishing their estate by
giving away their assets without receiving any present or future benefit. It therefore
1 Sections 417 and 418 of the Companies Act 61 of 1973.
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applies only to gratuitous dispositions. 2 In Umbongitwini Land and Investment Co
(Pty) Ltd (in Liquidation) v Barclays National Bank Ltd,3 the Court held that the test for
whether a disposition is made for value is whether it forms part of a genuine
commercial transaction, concluded with the expectation of some advantage at the
time. That advantage must be equal to or greater than the risk assumed by the party
providing the security. More recently, the phrase “not made for value” in section 26(1)
was held to mean that no value was received in return for the disposition.
4
[18] The meaning of the phrase “not made for value” in section 26(1) has now been
authoritatively settled by the Supreme Court of Appeal in Strydom N.O. and Another v
Snowball Wealth (Pty) Ltd and Others.5 The Court held that the expression means for
no value at all. It thus does not extend to dispositions made for inadequate, insufficient
or less-than-market value. If some real and substantial value was received in return,
the disposition does not fall within section 26(1), even if the bargain was objectively a
poor one.
[19] The enquiry in the present matter is therefore not whether Champions Royal
received adequate or commensurate value, but whether it received any legally
cognisable value in return for the impugned dispositions. The applicants bear the onus
of establishing that no such value was received.
[20] The enquiry into insolvency under section 26 is one of factual insolvency, not
commercial insolvency. In Ex parte Harmse,
6 the Court confirmed that factual
insolvency exists where, fairly valued, liabilities exceed assets. A formally prepared
balance sheet is not indispensable; insolvency may be established inferentially from
admissible evidence.
[21] The evidentiary approach in motion proceedings is governed by the well-known
principles in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd.
7 Where the
respondent’s version is far-fetched or clearly untenable or consists of bald or
7 Where the
respondent’s version is far-fetched or clearly untenable or consists of bald or
2 Estate Wege v Strauss 1932 AD 76 at 84.
3 Umbongitwini Land and Investment Co (Pty) Ltd (in Liquidation) v Barclays National Bank Ltd 1987
(4) SA 894 (A).
4 Strydom N.O. and Another v Snowball Wealth (Pty) Ltd and Others 2022 (5) SA 438 (SCA) at paras
32 and 36.
5 Id.
6 Ex parte Harmse 2005 (1) SA 323 (N) at paras 8–9; Strydom id at para 27.
7 Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 635C.
7
unsubstantiated denials in circumstances where the facts lie peculiarly within his
knowledge, a court is not bound to accept such assertions.
Dispositions
[22] It is common cause that the payments and withdrawals constituted transfers of
property from Champions Royal to the respondent. They therefore fall within the
statutory definition of “disposition” in the Insolvency Act.
Whether the Dispositions Were Made for Value
[23] Champions Royal paid into the respondent’s personal bank account a total
amount of R1 109 198.00, as shown in annexure “X1”. These payments were made
between 1 March 2019 and 24 December 2019. The cash withdrawals made by the
respondent from Champions Royal’s bank account, totalling R621 700.00 (as appears
from annexure “X2”), occurred during the period of 9 February 2019 to 28 December
2019.
[24] The respondent contends that he acted as a volunteer and that the monies were
utilised for church-related expenses, including municipal accounts, venue bookings
and transport.
[25] No invoices, vouchers, reconciliations, proof of payment, accounting records or
other documentary substantiation are annexed to the answering affidavit. No
contractual entitlement to remuneration or reimbursement regime is identified or
explained. No explanation is given as to why corporate expenses would be channelled
through a director’s personal account when Champions Royal maintained its own bank
account, rendering his explanation far-fetched and clearly untenable.
[26] Champions Royal did not appoint auditors, and as far as the liquidators could
ascertain, also did not keep any accounting books, asset registers, or the like.
[27] A bare and unsubstantiated allegation that funds were utilised for church
purposes does not establish that any value was given to Champions Royal. This is
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particularly so where the applicants have gone to considerable lengths on the papers
to explain why they contend that the dispositions were not made for value.
[28] The respondent, as a director and the direct beneficiary of the transfers, was
uniquely placed to explain the nature and application of the funds, particularly against
the backdrop of an apparent pattern whereby, once SNS paid money into Champions
Royal’s bank account, the funds were dissipated in large amounts within days of such
payment. His failure to provide documentary substantiation justifies the drawing of an
adverse inference. It is trite that where a party fails to testify or produce evidence on
matters peculiarly within his knowledge, a court may draw an adverse inference.
8 In
motion proceedings, bald and unsubstantiated denials do not suffice to create a
genuine dispute of fact.9
[29] On the probabilities, and in the absence of cogent proof of any quid pro quo,
the applicants have established that the dispositions were not made for value within
the meaning of section 26(1).
The insolvency enquiry
[30] The respondent contends that the applicants have failed to prove factual
insolvency in 2019 because they have not produced any balance sheets or formal
financial statements.
[31] That contention misconceives the nature of the enquiry. Factual insolvency is a
question of fact determined by comparing the value of the debtor’s assets with its
liabilities at the relevant time. It may be established inferentially from admissible
evidence. The absence of formal financial statements is not dispositive if the evidence
otherwise demonstrates that liabilities exceeded assets.
[32] The respondent further contends that Champions Royal was solvent at the time
because it received payments from SNS and additional contributions from the church
members.
8 See for example Oosthuizen v Minister of Police, unreported judgment of Gauteng High Court,
8 See for example Oosthuizen v Minister of Police, unreported judgment of Gauteng High Court,
Pretoria, Case No 23993/2016 (11 April 2023) at [11] to [12]; and the authorities cited there.
9 See Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd).
9
[33] Two answers dispose of that contention. First, donations from church members
were negligible compared with funds from SNS. Second - and more fundamentally -
the submission proceeds on the premise that any obligation to repay the SNS funds
arose only upon the subsequent judicial declaration that SNS operated an unlawful
Ponzi scheme.
[34] That premise is legally unsustainable.
[35] The same argument was raised and correctly rejected in Dinath and Another v
Iginla and Another,10 where the liquidators of JIM NPC sought to set aside payments
that were used to purchase a farm, in the name of the first respondent (Joshua Lasisi
Iginla), in terms of section 26 of the Insolvency Act. Nharmuravate AJ found that,
“when the high court in KwaZulu-Natal Pietermaritzburg confirmed that SNS was
engaged in an unlawful Ponzi scheme as rightfully argued by the applicant, that
decision meant that all payments made by SNS to JIM NPO retrospectively became
due and payable”.11 Properly understood, that court did not create a new obligation; it
recognised that the scheme’s unlawfulness rendered the payments repayable from
inception.
[36] I agree. It is trite that an unlawful agreement is void ab initio. A court order
declaring such illegality does not create invalidity; it merely recognises a pre-existing
legal position. The legal consequences flow from the unlawfulness itself, not from the
order recording it.
[37] In the context of a Ponzi scheme, which is inherently illegal and void ab initio,
as the Court found on 30 January 2023, the obligation to restore funds is triggered by
performance rendered pursuant to the unlawful scheme. The subsequent court order
confirming the scheme’s illegality is declaratory, not constitutive. It confirms a liability
that burdened the recipient from the moment of transfer; it does not bring that liability
into existence.
[38] Accordingly, the contention that the SNS payments could be treated as
into existence.
[38] Accordingly, the contention that the SNS payments could be treated as
unencumbered assets for purposes of determining solvency cannot be sustained.
10 Dinath and Another v Iginla and Another, unreported judgment of the Gauteng High Court, Pretoria,
Case No 079671/2023 (22 November 2024).
11 Id at para [35].
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Each receipt carried with it a simultaneous restitutionary liability. The fact that such
liability had not yet been reduced to judgment does not detract from its existence as a
liability for purposes of the balance-sheet enquiry.
[39] To hold otherwise would permit an entity’s factual insolvency to be obscured by
the temporary possession of proceeds derived from an unlawful enterprise. The law
does not recognise as “assets” funds that are immediately burdened by an obligation
of restoration equal in value.
[40] Once those liabilities are recognised, Champions Royal’s financial position
becomes clear:
(a) Its assets consisted primarily of transient bank balances;
(b) It possessed no immovable property;
(c) The only movable asset identified by the liquidators was a tent;
(d) It had no independent income-generating asset base of substance;
(e) It was entirely dependent on SNS-derived funds, which were rapidly
disbursed.
[41] On the uncontested evidence, Champions Royal lacked the asset base
necessary to meet its concurrent restitutionary obligations at the time each impugned
disposition was made. Put simply, once the SNS-derived funds were paid to the
respondent, Champions Royal was left without sufficient assets to discharge the
liability attached to those funds. Its liabilities, therefore, exceeded its assets
immediately upon each such payment. Factual insolvency has accordingly been
established.
[42] No evidence of surplus assets of any nature has been produced. The
respondent, as a former director, was uniquely placed to place evidence of any surplus
assets before the Court. None has been forthcoming. On a balance of probabilities,
and for the reasons already set out, the liabilities of Champions Royal exceeded its
assets immediately after the dispositions were made. Even on the respondent’s
version, the expenditure allegedly incurred through him amounted to approximately
R1 730 898.00 over 11 months. A cursory analysis of Champions Royal’s bank
11
statements demonstrates that, absent the payments from SNS, the account never
reflected funds in excess of that amount.
[43] The applicants have therefore discharged the onus under section 26(1)(a).
Remaining defences
Locus Standi
[44] The respondent maintains that the applicants lack locus standi to bring this
application.
[45] The applicants are duly appointed joint liquidators. Section 32 of the Insolvency
Act, read with section 340 of the Companies Act, empowers them to institute
proceedings to set aside impeachable dispositions. The defence lacks merit.
The application being out of time
[46] The respondent submits in his heads of argument that “ . . . the application must
be brought within a period of more than two years before the sequestration of the
estate, in terms of section 26(1)(a) of the Insolvency Act. . .”.
[47] The submission that section 26 sets a time bar or time period within which
proceedings thereunder should be instituted misconstrues the clear meaning of the
section.
[48] Section 26 regulates the timing of dispositions and the onus that follows, not
time periods for the institution of proceedings.
Failure to disclose Champions Royal’s bank balance when the liquidators took
control
[49] The respondent’s submission on this issue is not altogether clear. The
respondent seems to suggest that the applicants were duty-bound to disclose
12
Champions Royal’s bank balance at the time they took control over it, as that would
have shown whether the entity was solvent or not.
[50] However, the relevant enquiry is insolvency immediately after the dispositions
were made, not the balance at liquidation. This submission is also once again
contingent upon whether the SNS payments can be regarded as assets of Champions
Royal, which have been dealt with above.
[51] The respondent, in any event, also did not produce any evidence that sufficient
assets existed.
Reliance on SNS
[52] The respondent also complains that the applicants rely heavily on information
concerning SNS and are “beating the drum of a fraudulent Ponzi scheme being carried
out by SNS to get sympathy from the courts”, and that this is objectionable.
[53] The objection is without merit. The applicants rely on SNS only to establish the
source and nature of the funds and the existence of restitutionary liabilities.
[54] That reliance is legally relevant and proper.
Dispute of fact
[55] The respondent contends that the court does not know whether his version that
the monies were used for the church is true or not, and that it therefore creates a
dispute of fact that cannot be resolved in motion proceedings.
[56] However, the respondent’s bald and unsubstantiated allegations regarding
what he used the monies for do not raise a real, genuine, and bona fide dispute of fact.
Conclusion
[57] The applicants have established that :
(a) The dispositions were made more than two years before liquidation;
(b) They were not made for value as defined in section 26(1) and clarified
in Strydom;
(c) Immediately after the dispositions, the liabilities of the company
exceeded the value of its assets.
[58] Consequently, the statutory requirements of section 26(1 )(a) have been
satisfied, and the order that follows is granted.
Order
[59] Therefore, I make the following order:
1. The payments made by Champions Royal Assembly NPC (in liquidation)
to the respondent reflected in Annexures "X1" and "X2" to the notice of
motion, in the total amount of R 1 730 898. are declared dispositions not
made for value and are set aside in terms of section 26(1 )(a) read with
section 32 of the Insolvency Act 24 of 1936 and section 340 of the
Companies Act 61 of 1973.
2. The respondent is ordered to pay to the applicants the amount of R 1 730
898.
3. The respondent is ordered to pay interest on the aforesaid amount at the
applicable prescribed legal rate as contemplated in the Prescribed Rate
of Interest Act, Act 55 of 1975 {as amended), a tempore morae to date
of final payment.
4. The respondent is ordered to pay the cost of the application on scale C,
including the cost of counsel.
13
CARELSEAJ
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
14
Date of hearing: 24 February 2026
Judgment delivered: 9 March 2026
For the Applicant: Adv C.G.V.O Sevenster
instructed Vezi & De Beer Inc.
For the Respondent: Adv E Sepheka
instructed by Mahlakoane Attorneys