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IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
JUDGMENT
Not Reportable
Case no: 23826/2024
In the matter between:
BRIAN FRANCIS DALTON APPLICANT
And
POLANOCOL PROPRIETARY LIMITED RESPONDENT
(Registration Number: 2018/533603/07)
Neutral citation:
Coram: Mgengwana; AJ
Heard: 11 March 2026
Delivered: 19 June 2026
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Summary: Insolvency – Section 81(d)(iii) of the Companies Act 71 of 2008
– Rule Nisi – Respondent ordered to show cause why a Final Liquidation
Order should not be granted on just and equitable grounds.
ORDER
[1] In the result, I grant the following order:
[1.1] The rule nisi granted on 14 May 20 25 as extended is made
absolute and the Respondent is placed under final liquidation.
[1.2] The costs of this application are costs in the liquidation ,
including costs of counsel on Scale B.
JUDGMENT
MGENGWANA; AJ
Judgement handed down: The judgement is handed down electronically by
circulating to the parties or legal representatives by email. The date for the
handing down of the judgment is deemed to be 19 June 2026.
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Introduction
[1] This is a n application for this Court to confirm its Provisional
Liquidation Order (Provisional Order) granted on the 14
th day of May 2025.
The application is made primarily based on section 81(1)(c)(ii) of the
Companies Act 71 of 2008 (the New Act) and/or section 344(h) of the
Companies Act 61 of 1973 (the Old Act) read with Item 9 of Schedule 5 of
the New Act , that is , on the basis that it is just and equitable that the
Respondent should be placed under final liquidation.
Background
[2] Subsequent to the granting of the Provisional Order, Rodney Kenneth
Bartman (Mr. Bartman) , a shareholder of the Respondent , deposed to an
affidavit on 11 June 2025 in which he averred as follows:
(a) He is representing the Respondent and various parties who have an interest in
the outcome of these proceedings because they are investors and creditors of the
Respondent. Mr. Bartman went on to aver that th ese interested parties hold a real
right to occupy the property at 3[…] P[…] V[…], Western Cape (the property).
(b) Through the affidavit deposed to by him, he requests that the interested parties
be joined in these liquidation proceedings in terms of Rule 10 of the Uniform Rules
of this Court (Rule 10).
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(c) He also submitted that his affidavit is filed in terms of Rule 6 of the
Uniform Rule s of this Court (Rule 6) and the reason why the interested parties
need to be joined is that they reside on the property, they are investors in the
Respondent and will be affected creditors should the Respondent be placed under
final liquidation. The interested parties stand to lose their initial investments should
the property, which is the primary asset of the Respondent , be sold as part of
liquidation as its full value would not be realized and costs will be incurred to
liquidate the Respondent.
(d) Because the Applicant has averred in his Founding Affidavit that the
Respondent has violated the terms of the Share Block Control Act 59 of 1980 (the
Act) which falls under the custody of the Minister of Agriculture, the Minister of
Agriculture should have been cited by the Applicant in his application and his failure
to do so renders the application defective . The Respondent then went on to submit
that this Court should overturn the provisional order and restore the Respondent
to its previous status and strike the matter of f the rol l for failure of the
Applicant to join the interested parties and cite the Minister of Agriculture.
(e) The Respondent is solvent because it has approximately 380 members of the
public that have invested more than R17 000 000.00 in the Respondent because
they have an objective of self-determination. All the members want to eventually form
part of an independent community, and they do this by signing lease agreements pending
the outcome of the process of self-determination for which the Respondent has
already put in an application with the local municipality . This application is to
develop an agricultural village as part of the concept of striving for self-
determination, a constitutionally recognized substratum.
(f) By approaching the local municipality , the Respondent has shown that they are
(f) By approaching the local municipality , the Respondent has shown that they are
attempting to rectify any potential problems that there might be and are doing all
they can do to comply with any legal requirements. The Respondent however
denied that it is running a share block scheme.
(g) Self-determination, as put forward in section 235 and read in conjunction with
section 31 and section 185 of the Constitution of the Republic of South Africa refers
to collective right of the South African people to determine their political status and
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to pursue their economic, social and cultural development in accordance with the
principles of equality , non- discrimination and free association as defined and
protected by the Constitution.
(h) The Applicant will be the primary beneficiary of the liquidation of the
Respondent in that he is currently a 50% shareholder who has already used
approximately R2 230 607.00 of the funds that were raised for the establishment of the
Respondent. The Applicant was aware and instrumental in establishing and advertising
the initiative of self-determination.
[3] The Applicant responded as follows to the averments made above:
(i) The Respondent had already admitted in its answering affidavit opposing the
provisional liquidation application that the people interested in joining the
Respondent’s farming community would apply, pay a sum of money, and in return
they would be entitled to use an agreed portion of land within the borders of the
farms.
(ii) If regard is had to a document marked Annexure “RA006” dated 21 November
2023 which was auth ored by Mr. Bartman and which was attached to the affidavit
referred to above , it will be noted that Mr. Bartman was addressing a letter to the
“All Zuidland Supporters” wherein he was inviting them to take up shares in the
Respondent in exchange for designated portions of land ranging in size from 1000
square meter to 5000 square meter to erect a house on. According to the Applicant ,
this document is dispositive of this matter as the sale of shares for use of portion of
agricultural land is unlawful as section5(1)(a) of the Act disallows any share block
scheme to be operated in respect of agricultural land as defined by the Subdivi sion
of Agricultural Land Act 70 of 1970.
(ii) The Respondent has now changed tack as it has now entered into lease
agreements with “close to 30 families” to circumvent the Act. This change of tack
underscores Respondent’s contravention of the Act.
underscores Respondent’s contravention of the Act.
(iii) The bare denial of operating a business model which is in violation of the Act by
the Respondent shows lack of bona fides because Mr. Bartman had placed a sale of
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share agreement before the court in his answering affidavit submitted in an attempt
to ward off the provisional order of liquidation.
(iv) Respondent’s reliance on the Constitution is of no relevance.
(v) Respondent’s lack of intention to establish a share block scheme is of no
relevance, so is its attempt to rectify any potential problems that there might be . What
is relevant is whether the Respondent factually contravened the Act or not.
Issues to be determined
[4] This Court is being called upon to decide whether the Respondent has
succeeded in showing that it will not be just and equitable for this Court to
grant a final liquidation order against it as its business is not unlawful and it
has also not lost its substratum.
Applicable Law
[5] The winding up of solvent companies through a Court Order is
governed by section 81 of the New Act. Section 81(1)(c)(ii) of the New Act
states the following:
“
A court may order a solvent company to be wound up if one or more of the company’s
creditors have applied to the court for an order to wind up the company on the grounds that
it is otherwise just and equitable for the company to be wound up.”
[6] Section 81(1)(d)(iii) of the New Act states the following:
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“A court may order a solvent company to be wound up if the company, one or more
directors or one or more shareholders have applied to the court for an order to wind up the
company on the grounds that it is otherwise just and equitable for the company to be
wound up”
[7] The circumstances in which a Court may wind up a company is
governed by section 344 of the Old Act. Section 344(h) of the Old Act states
the following:
“
A company may be wound up by the Court if it appears to the Court that it is just
and equitable that the company should be wound up.”
[8] In Thunder Cats v Nkonjane Economic Prospecting 1 , Malan JA
explained that the phrase “otherwise just and equitable” in section
81(1)(d)(iii) is wide and is not confined to the specific statutory examples of
deadlock.
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[9] The traditional categories remain relevant, including loss of
substratum, illegality or fraud, oppression, deadlock, and cases analogous to
the dissolution of a partnership.3
[10] In Apco Africa (Pty) Ltd and Another v Apco Worldwide Inc. 4 ,
Ponnan JA reiterated that the just and equitable provision is not to be limited
to cases where the substratum of the company has disappeared or where
there has been a complete deadlock . Where there is a partnership, in the
1 Thunder Cats v Nkonjane Economic Prospecting 2014 (5) SA 1 (SCA)
2 Ibid par 14
3 Ibid par 16
4 Apco Africa (Pty) Ltd and Another v Apco Worldwide Inc. 2008 (5) SA 615 (SCA)
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form of a private company, the circumstances which would justify the
dissolution of the partnership would also justify the winding up of the
company based on the just and equitable provision.5
[11] Ponnan JA further stated that actual deadlock is not always essential.
All that is necessary is to satisfy a court that it is impossible for the partners
to place that confidence in each other, which each has a right to expect and
that such impossibility has not been caused by the person seeking to take
advantage of it.
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[12] Malan JA confirmed that a lack of clean hands is not an absolute bar
to seeking winding up on the grounds that it would be just and equitable to
do so. 7 Malan instead stated that the Court must assess the respective
contribution of each party to the breakdown to determine whether it would
be just and equitable to liquidate. But a party’s fault should not necessarily
deter a court from winding up.8
[13] Restrictions on operating a share block scheme are governed by
section 5 of the Act. Section 5(1)(a) of the Act states that no share block
scheme shall be operated in respect of agricultural land as defined in section
1 of the Subdivision of Agricultural Land Act, 1970 (Act No. 70 of 1970),
5 Ibid par 18
6 Ibid par 21
7 Thunder Cats, supra par 27
8 Ibid par 28
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unless consent for the sale or the granting of a right to a portion of such
agricultural land has previously been obtained in writing from the Minister
of Agriculture by either the owner or the prospective buyer of such
agricultural land.
[14] Section 16 of the Act which deals with the formalities that need to be
complied with before a contract relating to a share and a use agreement can
be recognised. This provision states the following:
“A contract for the acquisition of a share and a use agreement entered into, and any
amendment or cession of any such contract or agreement, after the commencement of this
Act, shall be reduced to writing and signed by the parties thereto or by their representatives
acting on their written authority, failing which the contract, agreement, amendment or
cession, as the case may be, shall, subject to the provisions of section 18, be of no force or
effect.”
[15] The contents of the abovementioned contract is dealt with by section
17 of the Act and the consequences of not complying with the formalities of
the contract are set out in section 18 of the Act. Section 21 is clear as it says
that any person who contravenes or fails to comply with the provisions of
this Act shall be guilty of an offence and upon conviction liable to a fine or
imprisonment.
[16] In Cunninghame v First Ready Development 249, Brand JA stated the
following:
“As pointed out in the judgment by the court a quo (para 37) the courts, both in England
and South Africa, have over the years evolved broad categories of circumstances in which
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they would grant a winding -up order on the just and equitable ground (see eg Rand Air
(Pty) Ltd v Ray Bester Investments (Pty) Ltd 1985 (2) SA 345 (W) at 350A -I). Although
these categories do not constitute a complete and closed list, they do serve the purpose of
useful practical guidelines. In the court a quo and in this court, the appellants sought to rely
on three of these categories, namely: (a) illegality of the respondent's business objects; (b)
disappearance of the respondent's substratum; and (c) misconduct in the management of its
affairs. In the event, the court a quo held against the appellant on all three grounds.”9
Application of the law to the facts
[17] With regards to the points in limine raised, Mr. Bartman has already
averred in h is affidavit that he deposed to on 11 June 2025 that he also
deposed to that affidavit on behalf of the interested parties as he has been
authorised to do so by these interested parties and he has attached proof to
that effect . This Court therefore finds that it is unnecessary to join these
interested parties. This Court also sees no reason to join or cite the Minister
of Agriculture in these procee dings as it has not been alleged by the
Respondent that his consent to regularize the alleged share block scheme has
been sought.
[18] In his founding affidavit, the Applicant avers that he is bringing his
winding up application in terms of section 81(1)(c)(iii) of the New Act.
According to this provision, the Applicant may bring a winding up
application on the grounds that it is just and equitable for the court to wind
up the company only if he is a creditor of the company.
9 Cunninghame v First Ready Development 249 2010 (5) SA 325 (SCA) at par 14
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[19] To prove that he is the creditor of the Respondent, the Applicant
averred that he has invested, R3 000 000.00 of his own money which was to
serve as a loan account to the Respondent. The Applicant did not find it
necessary to attach a Loan Agreement to his affidavit to corroborate his
averment. This averment was denied by the Respondent, and this denial was
never contested by the Applicant in reply. This Court therefore finds that the
Applicant has not been able to prove that he is a creditor of the Re spondent,
that having been found, the Applicant can therefore not proceed against the
Respondent in terms of section 81(1)(c)(ii) of the New Act. The Applicant
can however proceed against the Respondent on the basis section
81(1)(d)(iii) of the New Act only as it has not been disputed that he is a
shareholder of the Respondent.
[20] The Applicant will also not be able to proceed against the Respondent
in terms of sections 344(h) and 345(1)(c) of the Old Act as the Applicant has
made no attempt at all to prove to the satisfaction of this Court that the
Respondent is unable to pay its debts. Moreover, the Applicant has admitted
in its second set of heads of argument that the Respondent is solvent.
[21] Having disposed of the above, t his Court has to decide whether it
would be just and equitable to grant a final liquidation order in terms of
section 81(1)(d)(iii) of the New Act herein based on the averments made by
the Applicant that the Respondent is conducting an illegal business in that it
has contravened the terms of section 5(1)(a) of the Act. The current
application stems from the judgement of this Court which was handed down
by Judge Meer on 8 June 2023 under Case No. 6482/2022. In that judgment,
Judge Meer refused to deal with the issue of an alleged contravention of the
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Act read with the definition of agricultural land in the Subdivision of
Agricultural Land Act and that its continu ed functioning will be in
contravention of the law. The refusal of Judge Meer to deal with the issue
was because this point only came up for the first time in Applicant’s
replying affidavit.
[22] Subsequent to the above refusal by Judge Meer, albeit, two years
later, the Applicant resolved to institute the current proceedings, and a
provisional order was granted on 14 May 2025. The Respondent was then
called upon to show cause why this provisional order should not be made
final.
[23] However, in its affidavit dated 11 June 2025, the Respondent failed to
extensively deal with the issue that it was operating a business that was in
contravention of section 5(1)(a) of the Act. It instead spent the bulk of its
time dealing with rights flowing from sections 31, 185 and 235 of the
Constitution and flowing from various continental and international
conventions. It insisted that its substratum remained the section 235 right
guaranteed by the Constitution.
[24] However, the Respondent submitted in its supplementary heads of
argument that initially, the Respondent was created with the intention of
realizing a constitutional right which is contained in section 235 of the
Constitution. However, after been informed by Judge Henney in Case No.
6482/2022 that the substratum of the Respondent could potentially be
unlawful, it took immediate steps to rectify the flaw and looked for
alternatives to the current modus operandi . It changed its modus operandi
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from shares in the business to a guaranteed right of use of the property in
terms of the lease agreement. The Respondent submitted further that it has
also approached the local authority and the Department of Trade and
Industry to look at other potential models that will allow the Respondent to
continue to meet the objectives set out in its Memorandum of Incorporation.
[25] These submissions were also made in court and in addition thereto,
the Respondent also submitted that it terminated its unlawful modus
operandi as soon as the current proceedings were initiated.
[26] The submissions made in paragraphs 22 and 23 are concessions that
the Respondent has indeed contravened section 5(1)(a) by operating a share
block scheme on agricultural land. In Cunninghame v First Ready
Development, Brand JA stated that a finding that the respondent is
conducting an unlawful business should result in the termination of that
business by way of a liquidation order as the finding renders it unnecessary
to consider the further grounds advanced as to why the winding up of the
respondent would be just and equitable.
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In the result, I grant the following order:
[27]
[27.1] The rule nisi granted on 14 May 2025 as extended is made
absolute and the Respondent is placed under final liquidation.
10 Cunninghame supra par35
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[27.2] The costs of this application are costs in the liquidation,
including costs of counsel on Scale B.
______________________________
TJ MGENGWANA
Acting Judge of the High Court
APPEARANCES:
For the Applicant: Mr. van der Meer
Instructed by: Van der Meer & Partners Inc.
For the Respondent: Mr. R. Botha
Instructed by: Geldenhuys Jonkers Inc.
Mr. H. Le Roux
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