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[1] The applicant is the executor of the deceased estate of Ms M Schaup.Ms Schaup
had lent and advanced R1.1m to the respondent in terms of a written loan agreement
that contains provisions providing for the conversion of the loan into equity. For the
first 24 months the agreement would be a loan unless the conversion had taken place.
[2] On 19 April 2024 I dismissed the applicant’s urgent application for the liquidation
of the respondent on two grounds. The existence of the debt was disputed on bona
fide grounds as the respondent’s director says the loan was converted into shares in
Druid Gardens Holdings at a meeting on 2 April 2020.The share register reflected the
deceased as a shareholder. In a draft agreement with Chrysalis shortly thereafter, for
the acquisition of shares, Ms Schaup was reflected as a 1% shareholder of Druid’s
Garden Holdings.
[3] The second ground for dismissal was for non - compliance with the peremptory
service requirements of sec 346(4A)(a).
[4] An application for leave to appeal was argued on 5 December 2024, the applicant
being represented by senior counsel. A letter was uploaded by the respondent
indicating that it would abide the court’s decision and would not be represented.
[5] T he grounds for leave to appeal include two contentions central to the order
dismissing the main application. The first is in respect of compliance with the
compulsory service on employees and trade unions. In EB Steam Company P/L v
Eskom Holdings SOC Ltd 2015 (2) SA 526 SCA it was found that if a provisional
winding up order had been granted then compliance with sec 346(4A)(a) can be
proven before a final order is granted.
[6] The main application was for a winding up order, not merely for a provisional order.
A provisional order would however be competent, despite the aforesaid. On this
ground there are prospects of success.
[7] The second ground relates to the evidence of the meeting at which a conversion of
[7] The second ground relates to the evidence of the meeting at which a conversion of
shares has taken place. It bears mentioning that the respondent contended that the
loan to the respondent had been converted at the April 2020 meeting into a 1%
shareholding in Druid’s Garden Holdings P/L. The contract envisaged a conversion
into shares in the respondent directly. The evidence of a discharge of the debt to the
respondent by a conversion was supported by the share register of Druid’s Gardn
Holdings P/L.
[8] I am still satisfied that the existence of the debt is disputed. The issue is whether
conflicting statements by the deponent of the respondent both directly and via his
attorney give traction to an argument that the debt is not disputed reasonably on bona
fide grounds. The deponent could not explain why he made reference to interest on
the debt, when it had been extinguished by conversion into shares.
[9] In response to a demand for payment from the applicant’s attorney, the deponent
of the respondent consulted his attorney and instructed him to write a response dated
24 June 2021. In response to the demand for repayment of the loan the attorney of
the respondent meticulously quotes the financial meeting requirement set out in the