IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case number: 2024 - 098106
(1) REPORTABLE: No
(2) OF INTEREST TO OTHER JUDGES: No
(3) REVISED: Yes
5 May 2026
SIGNATURE
In the matter between:
DISPERSION CONSUL TING CC
[ Registration Number: 2003/083040/23]
and
DISCOVERY LIFE LTD
MASTER OF THE HIGH COURT
ST ADENS INTERNATIONAL INSOLVENCY
PRACTITIONERS
Applicant
First Respondent
Second Respondent
Third Respondent
The judgment was prepared and authored by the Judge whose name is reflected and
is handed down electronically by circulation to the parties' legal representatives by e
mail and uploading it to the electronic file of this matter on Caselines. The date and
time of hand-down is deemed to be 17:00 on 5 May 2026.
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JUDGMENT
J Vorster, AJ
[1] The applicant, Dispersion Consulting CC, seeks the rescission of a liquidation
order granted by this Court on 6 December 2024. The deponent to the founding
affidavit, Mr Dinesh Krithillal, is the sole member of the close corporation . The
application is brought in terms of Uniform Rule 42(1)(a), alternatively under the
Court’s inherent jurisdiction, on the basis that the liquidation order was granted
in the absence of the applicant and, it is alleged, in circumstances where the
applicant had no knowledge of the proceedings.
[2] The applicant describes itself as an insurance broking business established in
2003, which has conducted business with a number of well-known financial
institutions, including the first respondent, Discovery Life. It is alleged that, save
for the present dispute, the company has no history of fraud or outstanding
indebtedness. The underlying claim giving rise to the liquidation proceedings is
said to originate from the conduct of a sub-broker, Mr Vishal Dunpath, who was
engaged by the applicant pursuant to contractual arrangements involving
Discovery Life. Mr Dunpath allegedly earned commission on policies which later
lapsed, resulting in a debt to Discovery Life in the approximate amount of
R165,000.00. It is alleged that this indebtedness arose from Mr Dunpath’s
conduct, and that he entered into a personal repayment arrangement with
Discovery Life to settle the debt in instalments.
[3] A central feature of the applicant’s case is that it was not properly notified of the
liquidation proceedings. The deponent explains that service was effected at the
applicant’s domicilium address as reflected in CIPC records, which address
belonged to a former accountant who is now deceased. It is stated that the
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applicant’s current accountant failed to update the registered address, and that
this omission resulted in the applicant not receiving any court process. Although
the applicant does not dispute the formal validity of service at the recorded
address, it contends that, as a matter of fact, no notice of the proceedings came
to its attention. The deponent further states that no statements or updates
regarding the alleged indebtedness were communicated to him or to the
company.
[4] The applicant alleges that it only became aware of the liquidation order after
being contacted by the appointed liquidator. Upon receiving this
communication, the deponent contacted the attorneys acting for Discovery Life
and informed them that he had never received any notice of the proceedings
and had not been afforded an opportunity to present the company’s case. It is
further alleged that the applicant was never informed that Mr Dunpath remained
indebted in an amount of approximately R115,000.00, and that the existence
and extent of any liability remain disputed.
[5] The applicant contends that the liquidation order was granted in its absence
and without proper notice, and is therefore liable to be rescinded as having
been erroneously granted within the meaning of Rule 42(1)(a). In the
alternative, it is contended that the applicant was not in wilful default and that it
has a bona fide defence to the claim, which it would have advanced had it been
aware of the proceedings. The applicant disputes the alleged indebtedness and
maintains that it was deprived of the opportunity to clarify or contest the basis
of the claim in court.
[6] In addition to seeking rescission of the liquidation order, the applicant requests
that all liquidation proceedings be stayed pending the determination of the
rescission application. This part of the proposed relief appears to have become
moot, as the rescission application serves before me.
moot, as the rescission application serves before me.
[7] The first respondent opposes the rescission application on a combination of
procedural objections and substantive defences. As a preliminary matter, it is
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contended that the application is misconceived in law, in that rescission of a
final liquidation order can only be pursued in terms of section 354 of the
Companies Act, alternatively the common law, and not under Uniform Rule 42.
It is further contended that the applicant has failed to allege any fraud,
impropriety or exceptional circumstances warranting rescission, has not made
provision for the costs of the liquidators, and has failed to join the appointed
liquidators, who have a direct and substantial interest in the relief sought. In
addition, the respondent submits that the prayer to stay liquidation proceedings
is incompetent, as a rescission application does not suspend the operation of
a final winding-up order.
[8] On the merits, the first respondent disputes the applicant’s version of the
underlying indebtedness and contends that the applicant is contractually liable
to it. It is alleged that the applicant concluded a life intermediary agreement with
the respondent and that its representative bound himself as surety and co-
principal debtor. A default judgment was obtained as early as July 2016 against
the applicant and its representative, and the indebtedness remains unpaid.
Although a third party (Mr Dunpath) may have acknowledged liability and made
payments, the respondent maintains that the applicant remains jointly and
severally liable. The respondent further relies on admissions made by the
applicant in correspondence during 2025, in which it acknowledged that it, and
not the third party, is liable for the debt.
[9] The first respondent also disputes the applicant’s contention that it lacked
notice of the liquidation proceedings. It is alleged that the winding-up
application, as well as the provisional order, were properly served at the
applicant’s registered address, and that the applicant does not dispute the
validity of such service. The respondent contends that the applicant had
knowledge of the proceedings at least by December 2024, yet failed to take
knowledge of the proceedings at least by December 2024, yet failed to take
appropriate steps. It is further alleged that the applicant has not made full and
frank disclosure and has failed to place material facts before the Court. On this
basis, the respondent maintains that the liquidation order was not erroneously
granted and that the application for rescission falls to be dismissed with costs.
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[10] Section 354(1) of the Companies Act, 61 of 1973 empowers a court, at any time
after the commencement of a winding-up, to stay or set aside the proceedings
upon proof that they ought to be stayed or set aside. The enquiry is not one
involving a true discretion in the strict sense, but rather whether the facts placed
before the court satisfy the statutory standard. The section contemplates that a
winding-up may be set aside on two bases, namely that the order ought not to
have been granted at all, or that subsequent events justify its setting aside.
[11] Where reliance is placed on the contention that the winding-up order ought not
to have been granted, the onus on the applicant is a stringent one. The
application is not a rehearing of the liquidation proceedings, nor an appeal in
disguise. It is generally required of an applicant to demonstrate the existence
of special or exceptional circumstances justifying the setting aside of the order,
together with a satisfactory explanation for the failure to oppose the granting of
the order or to appeal against it. Relevant considerations include any delay in
bringing the application and the extent to which the winding-up has
progressed.
1
[12] This is such an application (i.e. an application suggesting that the liquidation
order should not have been granted).
[13] Section 354 confers locus standi, in defined and limited terms, on a liquidator,
creditor or member of the company in liquidation to apply for the setting aside
of the winding-up proceedings.
[14] In casu, the applicant is the close corporation in liquidation, which is purportedly
being represented by its sole member. In Secretary for Customs and Excise
v Millman NO,
2 Botha, JA found:
1 Ward v Smit and Others” In Re Gurr v Zambia Airways Corp Ltd1998 (3) SA 175 (SCA).
2 1975 (3) SA 544 (A) at 552H; For similar findings, see: GCC Engineering (Pty) Ltd and Others v Maroos
and Others 2019 (2) SA 379 (SCA) at [21]; Ex Parte Nell and Others NNO 2014 (6) SA 545 (GP) at 551
[19] and [20].
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“(u)pon the compulsory winding-up of a company its directors cease to function
as such . . . and they are, therefore, deprived of their control on behalf of the
company of the property of the company which is then deemed to be in the
custody or control of the Mas ter or liquidator'. As stated earlier the order
placing the company under winding -up is still in place and has not been set
aside. On the granting of the winding -up order, the directors of the company
cease to function as directors and the property of the company falls under the
control of the Master or the appointed liquidators. The directors of the company
in liquidation have been stripped of their control and management of the
company placed in winding-up by the court.
”
[15] Against the backdrop of the quoted judgment, it is perhaps not difficult to
understand why section 354 confers locus standi on a limited class of persons.
I therefore find that the applicant lacks locus standi to prosecute the rescission
application in terms of section 354.
[16] This is, however, not the end of the enquiry. As recorded earlier in this
judgment, the applicant relies on Uniform Rule 42 and contends that the
liquidation order was erroneously sought and granted.
[17] Uniform Rule 42 provides for the rescission or variation of orders in limited and
defined circumstances, and is directed at the correction of orders which are
affected by procedural or patent error rather than the reconsideration of the
merits. In terms of rule 42(1)(a), a court may rescind an order erroneously
sought or erroneously granted in the absence of a party; under rule 42(1)(b), it
may correct patent errors or omissions; and under rule 42(1)(c), it may rescind
an order granted as a result of a mistake common to the parties. The rule finds
application where, at the time the order was made, there existed a fact or
procedural irregularity which, had it been brought to the attention of the court,
procedural irregularity which, had it been brought to the attention of the court,
would have precluded the granting of the order. It does not afford a mechanism
to revisit the correctness of the judgment on the merits, nor to introduce new
evidence or defences. An applicant invoking rule 42 is therefore not required to
establish “good cause” in the traditional sense, but must demonstrate that the
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order was erroneously granted within the meaning of the rule.3
[18] For a considerable period, there existed judicial uncertainty as to whether a
company or close corporation could itself apply for the rescission of a liquidation
order outside the ambit of section 354 of the Companies Act. In certain
judgments, it was held that only those parties expressly identified in section 354
possessed the requisite locus standi to seek such relief.
4 In other judgments, it
was held that the residual powers vesting in the board of directors were
sufficient to enable them to act in the name of the liquidated company when
seeking a rescission order.
5
[19] The uncertainty was resolved by the Supreme Court of Appeal in Dr WAA
Gouws (Johannesburg) (Pty) Ltd v HR Computek (Pty) Ltd and Others, 6
where the following findings were made:
“I observe that the language utilised in s 354(1) specifically identifies the role
players. It does not require that we read in parties, including the company or
directors thereof, to reflect the legislative intent or purpose in the
provision. This provision does not expressly, explicitly or implicitly exclude a
company in liquidation or a board of directors from bringing such an application.
I conclude that the drafters of the 1973 Companies Act never envisioned the
exclusion of the residual powers of the directors and company in the context of
the common law. Section 354(1) does not take away the inherent right acquired
in terms of common law for the company in liquidation for obvious reasons. The
common law right provides the company with an opportunity t o challenge its
winding-up, where it should never have been placed in liquidation for a variety
of reasons, including fraudulent conduct. The high court correctly recognised
that there are two distinct legal frameworks that govern the rescission
applications in this scenario.
”7
3 Lodhi 2 Properties Investments CC and Another v Bondev Developments (Pty) Ltd 2007 (6) SA 87
(SCA) at [25] - [27].
(SCA) at [25] - [27].
4 Venbor (Pty) Ltd v Vendaland Development Co (Pty) Ltd t/a Camp Store 1989 (2) SA 619 (V) at 626B-
C; Impac Prop Cc v THF Construction CC [2019] ZAGPJHC 497 paras [4] and [11].
5 Storti v Nugent and Others 2001 (3) SA 873 (W) at 807A-C; WN Attorneys Incorporated v Victor N.O
and Others [2024] ZAGPPHC 74 at para [9].
6 (909/2023) [2025] ZASCA 103; 2025 (6) SA 89 (SCA) (15 July 2025).
7 Para. [17].
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and
“The common law specifically gives the residual power to the company and the
directors. The promulgation of s 354(1) was never intended to divest the
company and the directors of their common law rights.”8
[20] In light of these findings, it is apparent that the applicant has locus standi under
the common law to seek the rescission of the final liquidation order, and may
do so in terms of Rule 42 by relying on procedural errors.
[21] The only possible procedur al error referenced in the founding affidavit concerns
service of the liquidation application at an address described by the applicant
as the applicant’s “domicilium address” listed in the CIPC records. Although the
applicant expressly admits in paragraph 3.5 of its founding affidavit that such
service was proper, the deponent to the founding affidavit states that “I was
never served with court papers … ”, and in paragraph 1.3 of the reply that the
liquidation order was granted without “my knowledge”.
[22] The deponent appears to perhaps disregard the applicant’s separate juristic
personality and instead focuses on his personal knowledge and the issue of
service upon him. It is, moreover, no answer to attribute the failure to update
the applicant’s registered address to the erstwhile accountant, now deceased,
when the responsibility for maintaining the close corporation’s records rested
squarely with its member, being the deponent.
[23] Section 25 of the Close Corporations Act provides as follows:
“
25 Postal address and registered office
(1) Every corporation shall have in the Republic a postal address and an
office to which, subject to subsection (2), all communications and
notices to the corporation may be addressed.
(2) Any-
8 Para. [19].
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(a) notice, order, communication or other document which is in
terms of this Act required or permitted to be served upon any
corporation or member thereof, shall be deemed to have been
served if it has been delivered at the registered office, or has
been sent by registered post to the registered office or postal
address, of the corporation; and
(b) process which is required to be served upon any corporation or
member thereof shall, subject to applicable provisions in respect
of such service in any law, be served by so delivering or sending
it.
”
[24] In terms of Uniform Rule 4(1)(a)(v), service on a company or close corporation
is ordinarily effected by delivering the process to a responsible employee at its
registered office or principal place of business. Where no such employee is
present, service may be effected by affixing a copy of the process to the
principal door of the registered office or place of business. Such service
constitutes proper service in terms of the Rules.
[25] I accordingly find that service of the liquidation application at the respondent’s
registered address was proper.
[26] In respect of costs, the usual order will be made.
[27] The following order is made:
1. The application to rescind the liquidation order is dismissed.
2. The applicant, Dispersion Consulting CC, is ordered to pay the costs of
the application, such costs to be taxed on scale C.
J VORSTER, AJ.
Acting Judge of the High Court
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Date heard: 5 May 2026.
Judgment date: 5 May 2026.
Appearances:
Applicant:
No appearance.
First Respondent:
Counsel: JR Minnaar
Instructed by: Slade Shezi Attorneys