IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION , PRETORIA
1. REPORTABLE: YES.
2. OF INTEREST TO OTHER JUDGES: YES.
3. REVISED: NO.
SIGNATURE:
Case number: 65023/2020
In the matter between:
SCAN IA FINANCE SOUTHERN AFRICA (PTY) LTD Applicant
and
MATHAFENG INVESTMENT HOLDINGS (PTY) LTD Respondent
Delivered:
Summary:
This judgment was prepared and authored by the Acting Judge whose name is
reflected and is handed down electronically by circulation to the parties' legal
representatives by email and by uploading it to the electronic file of this matter on
CaseLines. The date and time for hand-down is deemed to be 10:00 on 24 March
2026.
Company Law - Winding-up - Return day of provisional order - Applicant's locus
standi - Debt paid after provisional l iquidation - Whether payment void under
s 341 (2) of Companies Act 61 of 1973 - Effect of creditor's formal admission of
satisfaction of debt.
Insolvency - Section 341(2) of Companies Act 61 of 1973 - Void dispositions -
Requirement that company must be both "being wound-up" and "unable to pay its
debts" - Payment made by respondent company during provisional winding-up -
Whether creditor may rely on voidness despite accepting payment.
Procedure - Application for final winding-up - Badenhorst Rule - Applicant must
prove on return day that it is an unpaid creditor and statutory grounds persist.
2
Held: The respondent paid the full indebtedness in terms of a settlement agreement post
provisional winding-up. Payment was received and acknowledged by the applicant.
Email correspondence from the applicant’s attorneys expressly recording that the
applicant was satisfied that no indebtedness remained constituted a formal
admission under s 15 of the Civil Proceedings Evidence Act 25 of 1965, binding
upon the applicant and relieving the respondent of any burden to prove payment.
Applicant’s subsequent reliance on s 341(2) to contend that the payment was void
could not revive locus standi, nor could the applicant contradict its formal admission.
For section 341(2) to apply, it must be shown not only that the company is “being
wound-up”, but also that it is “unable to pay its debts”. On the admitted facts, the
indebtedness was extinguished and no further evidence of inability to pay existed.
On the return day the applicant must establish that it remains an unpaid creditor.
The Badenhorst Rule applies at the final stage: a winding-up court will not grant a
final order where indebtedness is genuinely disputed on reasonable grounds.
Applicant failed to establish ongoing indebtedness or a statutory basis for final
liquidation. No other creditors or liquidators sought to proceed with the winding-up.
Provisional order discharged.
F.J. LABUSCHAGNE, AJ
[1] This matter came before me on the extended return day of a provisional
winding-up order granted on 14 November 2022.
JUDGMENT
3
[2] In essence a question of onus on the return day for a winding-up order is
raised, coupled with the application of section 341(2) of the Companies Act 61
of 1973 (the 1973 Companies Act).1
[3] The respondent as company in provisional liquidation paid the debt forming
the subject matter of the winding-up application (in terms of a settlement
agreement) and payment was accepted by the applicant, then refused
premised upon a contention that the payment is void viz., the operation of
section 341(2).
[4] The respondent delivered a supplementary affidavit under cover of an
application in terms of Uniform Rule of Court 6(5)(e) on 13 March 2026 and
the applicant opposed the application, but nevertheless delivered a
supplementary replying affidavit on 19 March 2026 (one day prior to the
hearing of this matter).
[5] At the commencement of the hearing the applicant contended that it is not
opposing the interlocutory application by the respondent, with the reservation
that its supplementary replying affidavit should be accepted.
1 For some reason some legal practitioners still refer to the “Old Companies Act” viz., the 1973
Companies Act and the “New Companies Act” viz., the Companies Act 71 of 2008 (despite the
2008 Companies Act having been assented to on 8 April 2009 and commenced on 1 May 2011).
There is thus nothing new about the 2008 Companies Act and reference to the 1973 Companies
Act would suffice as is, or as the “repealed” or “previous” Companies Act.
4
[6] The court may in its discretion permit the filing of further affidavits with the
fundamental consideration that the matter should be determined having
regard to all the relevant facts. The respondent’s further affidavit introduced
factual evidence which occurred only after the delivery of its answering
affidavit.
[7] In the premises, the two sets of further affidavits were accepted and argument
proceeded on the evidence introduced as such. The last minute exchange of
supplementary affidavits narrowed the issues which had to be adjudicated
upon as aforesaid.
Factual conspectus
[8] The factual landscape has materially altered since the provisional order was
granted on 14 November 2022 (with the application for leave to appeal
dismissed on 12 November 2024).
[9] The application was originally instituted on the basis that the applicant was an
unpaid creditor and that the respondent was unable to pay its debts. It was on
that footing that the provisional order was obtained.
[10] On 3 February 2026 the applicant’s attorneys confirmed that the respondent
was indebted in the sum of R1 650 291.59 and recorded that the applicant
would accept payment of that amount in full and final settlement of the matter.
5
[11] On 11 February 2026 the applicant confirmed acceptance of the respondent’s
payment proposal on certain stated terms.
[12] It is common cause that an amount of R620 000.00 was paid on 11 February
2026 and that the balance of R1 030 291.59 was paid on 18 February 2026,
directly into the applicant’s bank account.
[13] Upon receipt of the second payment, the applicant adopted the stance that
the payment was void, contending that it had been made by a company in
provisional liquidation in respect of a pre-liquidation debt and in circumstances
where a concursus creditorum had been established.
[14] The applicant’s attorneys thereafter indicated on 24 February 2026 that it
would hold the funds in trust pending payment by a third party (upon which it
will repay the settlement payment to the respondent) and persisted in seeking
confirmation or extension of the provisional order (with the extension sought
in order for the appointed provisional liquidators to investigate the
respondent).
2
[15] In correspondence dated 16 March 2026, however, the applicant’s attorney
reiterated its stance that the payment was void, recorded that the applicant
was satisfied that it had received payment and that the respondent was no
longer indebted to the applicant.
3
2 Due to its stance to remedy the void payment it contended was made by the respondent.
3 CL054-91.
6
[16] The applicant further contended through its attorneys that it was prepared to
consent to the discharge of the rule subject to proposed conditions relating to
suretyship and costs. Those conditions were not accepted by the respondent.
[17] On 18 March 2026 (some 4 years after their appointment on 23 December
2022), one of the two joint liquidators (Mr. GLS De Wet of Kaap-Vaal Trust)
wrote ostensibly for the first time to the respondent and advised as to his
appointment, attaching the certificate of appointment issued by the Master of
the High Court; indicating that the attorneys for the respondent represents its
director; confirming that he has “recently” been informed that the matter is to
be heard on 20 March 2026 after an extens ion of the rule; and recording his
“understanding” that the application for leave to appeal was dismissed.
[18] I am unable to discern from the court file whether the powers of the joint
liquidators ever were extended and counsel did not know, neither did the
instructing attorneys.
[19] Based on the lack of information as to an extension and the provisional
liquidators’ belated 18 March 2026 correspondence, calling inter alia for a
statement of affairs (which ought to have been delivered 14 days after their
appointment) it is inferred that no extension of powers ever occurred.
[20] The provisional liquidators took no apparent steps for close to four years , until
prompted by the applicant’s attorneys.
7
Legal position
[21] The applicant relies heavily on section 341(2) of the 1973 Companies Act
which provides that every disposition of property by a company being
wound-up after the commencement of the winding-up is void.
[22] In support of the proposition by the applicant, reliance was placed on the
ipsissima verba of the legislative provision and on the decision in Cooper NO
and Others v Blue Label Distribution (Pty) Ltd 2024 JDR 2878 (GJ), where
the court held that payments made after a provisional winding-up order
constituted void dispositions and were recoverable by the liquidators.
[23] Section 341 provides as follows:
341. Dispositions and share transfers after winding-up void.
(1) Every transfer of shares of a company being wound up or alteration in the
status of its members effected after the commencement of the winding-up
without the sanction of the liquidator, shall be void.
(2) Every disposition of its property (including rights of action) by any company
being wound-up and unable to pay its debts made after the commencement
of the winding-up, shall be void unless the Court otherwise orders.
8
[24] The present matter is distinguishable from Cooper in material respects. For
one, Cooper concerned the question of whether or not payments made by the
third applicant (the insolvent company) into the bank account of the
respondent (BlueLabel) after the insolvent company’s provisional winding-up,
constitute dispositions as contemplated in section 341(2) or not.
[25] The present case deals with the return date where a final order is sought.
[26] In Cooper, the first and second applicants were the joint liquidators of the
insolvent company, having been so appointed by the Master on 25 September
2020. They contended that eight payments made by the insolvent company
after the date of its provisional winding-up constitute void dispositions, as
envisaged in section 341(2). They therefore sought orders declaring each of
the eight payments made by the insolvent company to Blue Label to be void
dispositions in terms of section 341(2) of the Act, as well as monetary orders
for the repayment of the various amounts so paid, together with interest
thereon, and an order for costs.
[27] In casu, the joint provisional liquidators are not before court with an application
declaring the payments void and seeking repayment. Before court is the return
day of an extended rule nisi for the provisional winding-up of the respondent
company.
9
[28] On the return day of a rule nisi the court must determine whether to confirm
the order and grant a final winding-up order, or to discharge it and restore the
company to its directors.
[29] The court is tasked with deciding if cause has been shown by the respondent
(the company) or other creditors as to why the provisional order should not be
made final.
[30] No other creditors are before court, nor the provisional liquidators’ report (the
latter which is not surprising having regard to their ostensible lack of interest
in executing their legislative mandate).
[31] In Cooper, the duly appointed liquidators instituted proceedings to recover
payments made after the commencement of winding-up, in order to protect
the concursus creditorum and the interests of the general body of creditors.
The issue before the court in that matter was whether those payments
constituted void dispositions recoverable at the instance of the liquidators.
[32] In the present matter, no application has been brought by the provisional
liquidators to set aside or recover the payment made to the applicant.
[33] The relief sought before me is confirmation or extension of the provisional
winding-up order.
10
[34] The applicant has received payment in full and expressly acknowledged that
no indebtedness remained, only thereafter to adopt the contrary stance.
[35] The question to be determined is whether, in these circumstances, the
applicant retains locus standi to persist in seeking a final winding-up order or
the continuation of the provisional order and what the effect is of section
341(2) on the facts of this matter.
[36] The dispute in the present matter is not factual but legal in nature. The material
facts relating to payment are common cause. The issue is the legal effect of
those payments in the context of section 341(2) and the applicant’s standing
on the return day.
[37] What section 341(2) does as its predominant purpose is to decree that all
dispositions made by a company being wound-up are void. This provision
must of course be read with section 348, which provides that the winding-up
of a company by a court shall be deemed to have commenced at the time of
the presentation of the application for winding-up to the court. The effect is
that the payments are potentially invalid at the moment they are made,
because the grant of a winding-up order will render section 341(2) operative.
11
[38] In Pride Milling Company (Pty) Ltd v Bekker NO and Another, 4 the
Supreme Court of Appeal referred to Lief NO v Western Credit (Africa) (Pty)
Ltd 1966 (3) SA 344 (W) which dealt with section 115 of the 1926 Companies
Act, which was couched in identical terms as section 348.
[39] In Lief NO, it was pointed out that the mischief that the section was designed
to obviate was a possible attempt by a dishonest company, or directors, or
creditors or others, to snatch some unfair advantage during the period
between the presentation of the petition for a winding-up order and the
granting of that order by a Court, by, for example, dissipating the assets of the
company or, as it happened in this case, preferring one creditor above another
to the prejudice of the concursus creditorum.
[40] Pride Milling
5 is authority for the position held that the effect of a winding-up
order is to establish a concursus creditorum, and nothing can thereafter be
allowed to be done by any of the creditors to alter the rights of the other
creditors. In dealing with the effect of dispositions made subsequent to the
grant of a provisional winding-up order the learned authors M S Blackman et
al in their Commentary on the Companies Act (after analysing the judgment
in International Shipping Co (Pty) Ltd v Affinity (Pty) Ltd and
Another 1983 (1) SA 79 (C) (at 680) and other decisions of the Supreme
Court of Appeal), summarised the position when a company is being wound-
up on the grant of a provisional order of liquidation. Once that stage is
4 Pride Milling Company (Pty) Ltd v Bekker NO and Another (393/2020) [2021] ZASCA 127;
[2021] 4 All SA 696 (SCA); 2022 (2) SA 410 (SCA) (30 September 2021) at [14].
5 Pride Milling ibid at [15] and [16].
12
reached, the court (although it can ratify a disposition made before the
winding-up order) no longer has the power in terms of section 341(2) to
authorise a company to make a disposition of its property.
[41] The question is whether the payment is to be considered void or not, and if
so, it is sufficient to be considered to be a defence to a final winding-up order
or not.
[42] More particularly, whether in casu the payment constitutes a dispute to the
applicant’s locus standi or not.
[43] In my view, the email from the applicant’s attorneys of 16 March 2026 to the
respondent’s attorneys is dispositive of the matter.
6 It reads:
Dear Sir
I refer to our discussions regarding the above matter.
As you know, we are of the view that the payment made by the company in
provisional liquidation is void.
Our client is, however, satisfied that it has received payment and that
Mathafeng is no longer indebted to our client. Our client is prepared to consent
to the upliftment of the provisional winding up order on the following
conditions:
6 Annexure JV13 to the applicant’s supplementary replying affidavit at CL054-91.
13
1. That the director of your client binds himself as surety and co-principal
debtor in favour of our client for payment of the amount of R1 030 291.59
in the event that Mathafeng is again placed in liquidation within a period of
24 months from the payment date.
2. That Mathafeng be liable for the costs (if any) of the provisional liquidators.
Please taken an instruction and revert to us at your earlier convenience.
Regards.
[44] The “Badenhorst Rule” provides that winding-up proceedings ought not to be
resorted to in order to enforce payment of a debt, the existence of which is
bona fide disputed by the company on reasonable grounds and the procedure
for winding-up is not designed for the resolution of disputes as to the existence
or non-existence of a debt.
7
[45] In Gap Merchant Recycling CC v Goal Reach Trading 55 CC ,8 Rogers J
held that l iquidation proceedings are not intended as a means of deciding
claims which are genuinely and reasonably disputed with reference to
Badenhorst.
7 Badenhorst v Northern Construction Enterprises (Pty) Ltd 1956 (2) SA 346 (T) at 347H -
348C.
8 Gap Merchant Recycling CC v Goal Reach Trading 55 CC (2480/2014) [2014] ZAWCHC 53;
2016 (1) SA 261 (WCC) (15 April 2014).
14
[46] In Afgri Operations Limited v Hamba Fleet (Pty) Ltd,9 Willis JA referred to
the finding a quo in respect of onus where a final winding up order was sought
and confirmed that the applicant bears the onus of showing that the
respondent was indebted to it and that the respondent bears the onus of
demonstrating that the indebtedness was disputed on bona fide and
reasonable grounds.
[47] It is now well established, following the decisions of the Supreme Court of
Appeal in Afgri Operations Ltd and Freshvest Investments (Pty) Ltd, that
the Badenhorst principle continues to apply at the stage where a final
winding-up order is sought.
[48] Winding-up proceedings are not designed to enforce payment of a debt which
is genuinely disputed on bona fide and reasonable grounds. Although the
applicant may at the provisional stage rely on prima facie proof of
indebtedness, at the final stage it must establish on a balance of probabilities
that it is indeed an unpaid creditor.
[49] In the present matter, the respondent has established that payment of the full
indebtedness was made and received.
9 Afgri Operations Limited v Hamba Fleet (Pty) Limited (542/2016) [2017] ZASCA 24; 2022 (1)
SA 91 (SCA) (24 March 2017) [16].
15
[50] The applicant does not dispute receipt. Its case is that the payment is void in
terms of section 341(2) and that the debt thus remains unpaid in law. That
contention raises, at the very least, a substantial legal dispute concerning the
continued existence of indebtedness.
[51] In these circumstances, the applicant has failed to establish, on a balance of
probabilities, that it remains an unpaid creditor. The Badenhorst principle
therefore finds application, and the application cannot succeed.
[52] In casu the payment of the debt is common cause, what is more, the 16 March
2026 email aforesaid is an admission on the record in respect of the locus
standi of the applicant.
[53] The legal effect of the aforesaid admission is provided for in section 15 of the
Civil Proceedings Evidence Act 25 of 1965, negating the proof of the fact
or facts admitted and prohibiting the applicant from disproving the admitted
fact or facts.
[54] In terms of the Civil Proceedings Evidence Act 25 of 1965, section 15:
It shall not be necessary for any party in any civil proceedings to prove nor
shall it be competent for any such party to disprove any fact admitted on the
record of such proceedings.
16
[55] The consequence of a formal admission is that it becomes unnecessary to
prove the admitted fact and that such fact may not be disproved. 10 A court is
entitled to adjudicate a matter simply on an admitted fact.11
[56] Further, the doctrine of contradictory statements operating through estoppel
and approbation and reprobation further precludes the applicant from
challenging the admission.12
[57] As set out in Badenhorst, once the respondent’s indebtedness has prima
facie been established, the onus is on it to show that this indebtedness is
disputed on bona fide and reasonable grounds and the discretion of a court
not to grant a winding up order upon the application of an unpaid creditor is
narrow and not wide.
[58] Although the respondent was indebted to the applicant, that indebtedness has
been paid. The onus on the respondent to show a dispute as to why a final
order is not to be granted has been satisfied.
10 Civil Proceedings Evidence Act 25 of 1965, section 15. See also Gordon v Tarnow 1947 3 SA
525 (A) 531.
11 Dinath v Breedt 1966 3 SA 712 (T) 717. See also Gordon v Tarnow supra and Van Deventer
v De Villiers 1953 4 SA 72 (C) 75-76.
12 A party who has adopted a particular legal position, and acted upon it, cannot later adopt an
inconsistent position to the prejudice of another.
See Hlatshwayo v Mare & Deas 1912 AD 242 where the Appellate Division (as it then was) held
as follows: “...the doctrine is based upon the application of the principle that no person can be
allowed to take up two positions inconsistent with one another, or as it is commonly expressed to
blow hot and cold, to approbate and reprobate.”
17
[59] When the applicant applies for a final order, and the facts are disputed, the
court is not permitted to determine the balance of probabilities on the affidavits
but must instead apply the Plascon-Evans rule.13
[60] In Wightman t/a JW Construction v Headfour (Pty) Ltd and Another ,14
the Supreme Court of Appeal held that a real, genuine and bona fide dispute
of fact can exist only where the court is satisfied that the party who purports
to raise the dispute has in his affidavit seriously and unambiguously
addressed the fact said to be disputed.
[61] Based on the aforesaid admission, it is not necessary for this court to apply
Plascon-Evans.
[62] Despite the admission, which I view as dispositive, the court is to consider the
effect of the payment vis-à-vis the working of section 341(2).
[63] The applicant contends that, because the payment was made after the
commencement of winding-up and during the subsistence of a concursus
creditorum, it is void ab initio, with the result that the debt remains unpaid in
law and that the applicant retains standing as creditor.
13 Paarwater v South Sahara Investments (Pty) Ltd 2005 4 All SA 185 (SCA) para 4; Golden
Mile Financial Solution CC v Amagen Development (Pty) Ltd [2010] ZAWCHC 339 paras 8-
10; Badge & Others NNO v Midnight Storm Investments 265 Pty Ltd & Another 2012 (2) SA
28 (GSJ) para 14.
14 Wightman t/a JW Construction v Headfour (Pty) Ltd and Another 2008 (3) SA 371 (SCA)
[13].
18
[64] It is correct that section 341(2) decrees that dispositions made by a company
being wound-up are void, but the section goes further than that. In terms of
the section, the company must also be proven to be unable to pay its debts.
[65] The provision is designed to protect the concursus creditorum and to prevent
prejudice to the general body of creditors by post-commencement dispositions
of a company unable to pay its debts. This subsection is used in winding-up
litigation by liquidators to recover void dispositions.
[66] The purpose of the section is protective, not tactical. It is not designed to
enable a creditor who has in fact received payment, and who is content that
no indebtedness remains, to disregard that payment for the sole purpose of
maintaining liquidation proceedings in circumstances where neither it, nor the
joint provisional liquidators have made any attempts to further the liquidation
proceedings after the provisional order.
[67] It is evident that the wording of section 341(2) provides for voidness where it
is proven that a company is unable to pay its debts.
[68] Is the respondent thus deemed to be unable to pay its debts in circumstances
where the admission stands and the causa for the winding-up relief has fallen
away? It has quenched its indebtedness, which is common cause and absent
any other proof of it being unable to pay its debts, the court is unable to make
a finding that section 341(2) applies.
19
[69] The critical element to the interpretation of section 341(2) is that it applies to
any company being wound-up in the first instance, and in the second instance,
that such company must be unable to pay its debts.
[70] Mere winding-up (whether provisional or not in terms of Cooper) is not
sufficient. It must also be proven that the company is unable to pay its debts
prior to section 341(2) being capable of lawfully being invoked.
[71] It is trite that a petitioning creditor must establish, on the return day, that it is
a creditor and that the statutory grounds for liquidation exist. The return day is
not a formality. The Court must be satisfied that the requirements for final
liquidation remain extant.
[72] On the facts before me, the applicant has received the full amount of its claim.
It has not repaid the funds to the respondent. It does not seek to do so.
[73] No recovery proceedings have been instituted by the provisional liquidators.
[74] There is no evidence before the Court of any other creditor who has intervened
or who seeks the continuation of liquidation proceedings on the basis of an
unpaid debt. Nor has an independent application been brought by the
liquidators for final liquidation on other statutory grounds.
20
[75] The applicant further submits that the provisional order should be extended to
enable the provisional liquidators to investigate the affairs of the respondent,
particularly in light of the change of name and the opening of bank accounts
during provisional liquidation.
[76] There can be no doubt that the protection of the concursus creditorum and the
proper administration of insolvent estates are matters of public importance.
[77] However, the winding-up jurisdiction of this Court is a statutory remedy. It is
invoked upon proof of established grounds for liquidation.
[78] It is not a general investigative jurisdiction, nor a mechanism to preserve a
provisional order in the abstract while investigations are undertaken, absent a
proper legal foundation for the continuation of liquidation.
[79] The present application was launched on the footing that the applicant was an
unpaid creditor. That causa has fallen away.
[80] The applicant has been paid and acknowledges that no indebtedness
remains. In the absence of an unpaid creditor pressing its claim, or an
independent statutory basis properly established for final liquidation, the
continuation of the provisional order would extend the winding-up jurisdiction
beyond its proper bounds.
21
[81] The fact that a provisional order was granted does not relieve the applicant of
the obligation, on the return day, to satisfy the court that the grounds for final
liquidation exist.
[82] Once the applicant’s claim was satisfied, the foundation upon which the
application was brought ceased to exist. The existence of a provisional order
does not, in and of itself, justify its confirmation or indefinite extension in the
absence of the statutory requirements.
[83] Nothing in this judgment precludes other creditors if they are so advised to
institute proceedings against the respondent. The present decision concerns
only the relief sought in these proceedings.
[84] In the circumstances, I am not satisfied that the applicant has established a
proper legal foundation for the confirmation of the provisional winding-up order
or for its extension. The rule nisi falls to be discharged.
Costs
[85] As to costs, the matter has taken a complex course. The provisional order was
initially granted on the basis of an unpaid debt.
[86] Subsequent events, including the settlement and the applicant’s stance
regarding the payment, have given rise to further proceedings.
[87] I n the exercise of my discretion, and having regard to all the circumstances, I
consider it appropriate that each party bear its own costs from the date on
which the final payment was effected, and that the costs prior thereto are to
be paid by the respondent to the applicant on scale B.
Order
[88] I n the result the following order is made:
88.1 the rule nisi granted on 14 November 2022 (as extended) is
discharged;
88.2 the liquidation application is dismissed;
88.3 each party to bear its own costs from 18 February 2026;
88.4 the respondent to pay the applicant's costs on scale B up to 18
February 2026.
~lllilill
F.J. LABUSCHAGNE
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
Electronically submitted and signed .
22
23
Date heard: 20 March 2026
Date delivered: 24 March 2026
For the applicant:
Adv. C. Gibson
Instructed by: Senekal Simmonds Inc.
For the respondent:
Adv. T.P. Krüger SC
Instructed by: KMG & Associates Inc.