IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
JUDGMENT
REPORTABLE
Case no: 22720/2024
In the matter between:
ADRIANUS MERCEIJ Intervening Party
And
THOMAS CHRISTOPHER VAN ZYL N.O. First Applicant
FAZLUL HUQ SULIMAN N.O. Second Applicant
MONICA GEZINA COWIN N.O. Third Applicant
SAFIYAH EBRAHIM COOK N.O. Fourth Applicant
RENEE BERNICE BAILEY N.O. Fifth Applicant
(In their capacities as the duly appointed Final
Liquidators of HGG FINANCIAL GROUP INC.)
And
SQUARE ROCK LIMITED (in liquidation) Respondent
Coram: MANTAME J
Heard: 03 November 2025
Delivered: 29 June 2026
ORDER
1. The separation of issues in terms of Rule 33(4) fails.
2. The point in limine on locus standi raised by the HGG liquidators fails.
3. The Intervening Party, Mr Adrianus Merceij is granted leave to intervene in the
main proceedings (section 29 application)
4. The judgment and order granted by Nuku, J on 23 October 2024 is rescinded.
5. The respondents are ordered to pay the costs including the costs of two
Counsel where so employed on Scale C.
JUDGMENT
Mantame J
Introduction
[1] The Intervening Party in these proceedings , Mr. Adrianus Merceij (Mr. Merceij)
instituted an application f irst: for leave to intervene in the main application where Nuku,
J on 23 October 2024 granted an order in camera that; (i) the payments made by HGG
Financial Group Inc. (HGG ) (In Liquidation) to Square Rock Ltd (SR) ( In Liquidation) in
the amount of €4 739 968, 22 is set aside as voidable preferences in terms of section
29 (1) of the Insolvency Act 24 of 1936 (the Act) (the section 29 application); (ii) that the
applicants, in their capacity as the joint liquidators of HGG Inc are declared, in terms of
section 32 (3) of the Act, to be entitled to recover the amount of €4 739 968,22 from SR;
(iii) that SR pay the amount of €4 739 968, 22 to the applicants with interest calculated
at a rate of 10 percent per annum from the date of the order to the date of payment, on
any outstanding balance from time to time.
[2] Second, if leave to intervene is granted, that the Court further grants a recission
of the order granted by Nuku, J on 23 October 2024. The application for rescission is
sought in terms of Rule 42 (1) (a) of the Uniform Rules of Court (Rule 42) alternatively
the common law.
[3] The liquidators of HGG opposed the application mainly on the basis that Mr.
Merceij lacks locus standi to intervene in these proceedings.
[4] At the commencement of these proceedings Counsel for HGG liquidators
proceeded with an application in terms of Rule 33 (4) that the question of law relating to
the Intervening Party’s locus standi, which co – incides with the application for leave to
intervene first be disposed of , and to have all further proceedings stayed until such
question of law has been disposed of and an order to that effect has been granted.
[5] The parties agreed at the hearing of this application that other aspects that were
raised by the Intervening Party i.e. (i) HGG Inc.’s Insolvency, (ii) HGG (Illegal) Ponzi
Scheme, and (iii) the illegality of the five loans as being non – compliant with the
Reserve Bank requirements need not to be determined by this Court at this stage.
Likewise, the striking out that was previously raised by HGG’s liquidators wa s not
pursued.
[6] Before dealing with the issue of separation and the other points raised , it would
be prudent to first examine the factual matrix leading to the Intervening Party making
himself known in these proceedings.
Background facts
[7] Mr. Merceij, a Dutch citizen has been a successful global businessman for more
than 40 years. The first business which he successfully set up was in the fragrance
industry where he operated as a grey – market trader, purchasing exclusive fragrances
from global suppliers and on -selling them to retailers who otherwise could not gain
direct access to the exclusive fragrance houses. After his achievement s in this
business, he expanded his business operations to include inter alia a private financing
institution. Th is included setting up corporate entities which provided finance to
businesses.
[8] Mr. Merceij divorced in 2010 and decided to move to South Africa in May 2011.
The business affairs were overseen by his adult children in the Netherlands . It was
never his intention to live in South Africa indefinitely . His primary residence, as a now a
retired businessman is in the Netherlands.
[9] SR was incorporated in Mauritius as a private company limited by shares . Mr.
Merceij was the sole director and shareholder of SR . At the same time that SR was
incorporated, Mr. Merceij also set up a trading entity in Mauritius called FOX2TRADE
(F2T). F2T was a Global Business (Category 1) (GBC1) company and a wholly – owned
subsidiary of SR. SR was licensed as a Global Business (Category 2) on 1 June 2011.
Mr. Merceij provided a start-up capital to SR, and SR in turn provided finance to F2T.
F2T generated more and more profits and declared these profits as dividends to SR , in
time, and SR began to expand its private financing business. It not only provided to
F2T, but also expanded and financed other companies in his group of companies and
third parties.
[10] According to Mr. Merceij, the Mauritian companies were primarily set up to take
advantage of the beneficia l tax regime which Mauritius offered at the time, and there
was nothing untoward about this. It was not, as HGG’s liquidators seem to suggest, that
Mr. Merceij’s conduct was improper in this regard as h e merely took advantage of the
beneficial Mauritian tax regime to which he was entitled to, so he said.
[11] In conducting business in Mauritius he used an agency called Vistra (Vistra).
Vistra’s services included inter alia , company formation and management , company
secretarial services, accounting services, tax and regulatory compliance services.
[12] In 2018, Mr. Merceij was introduced by some friends, including Mr Rob Van Veen
(Mr. Van Veen) to Mr. Hendrik Gerryts (now deceased) (Mr Gerryts). Mr. Van Veen told
him that Mr. Gerryts was the corporate controller of a business group called HGG (HGG
Group) and Mr Van Veen suggested that he meets with Mr. Gerryts to explore the
possibility of providing finance to the HGG Group . HGG Group consisted of several
businesses including an accounting business, an insurance business, and a property
development business. Mr. Merceij ’s first contact with the HGG Group was in
September 2018 when he was informed that the property development arm of the HGG
Group was involved in a big development in Paarl (the Bretagna Development).
[13] Further, the HGG Group had access to clients who were registered for Value
Added Tax (VAT) and often required bridging finance while they waited for their VAT
returns from the South African Revenue Services (SARS). In such instances, the HGG
Group would make bridging finance available to the clients who would then repay the
HGG Group with interest once they receive d their VAT refunds from SARS. According
to Mr. Gerryts, the HGG Group required private financing to make these loans available
to its clients.
[14] Based on the aforesaid information from Mr. Gerryts , Mr. Merceij came to the
conclusion that the HGG Group was a financially sound business, and that it would
make financial sense for SR to pr ovide finance to it. Although these discussions
happened in 2018, SR officially became involved as a private financier of the HGG
Group in 2020 . Given SR’s positive previous experience with the Ed u Bond
transactions, Mr. Merceij suggested to Mr. Gerryts that they conclude their business on
the same basis as Ed u Bond deals . However, they are not relevant for purposes of
these proceedings.
[15] On 14 April 2020, SR concluded its first loan agreement with two of the
companies in the HGG Group, namely. HGG Financial Group Inc. and HGG Invest (Pty)
Ltd (HGG Invest). The four loan agreements were concluded between October and
November 2020. The five loans that were made between April and November 2020,
totalled an amount of R97,5 million . All these loans were repaid by HGG to SR on 22
December 2022.
[16] While the above -mentioned events were unfolding , Vistra advised him that the
Mauritian Financial Services Act had been amended to introduce a new type of
company called ‘the Authorised Company ’, and that the GBC 2 companies were being
phased out. The GBC2 companies , which like SR, had been incorporated on or before
16 October 2017, would be ‘grandfathered’ and/ or allowed to continue operating under
the old laws until 30 June 2021. After that date, the GBC2 companies would have the
option to convert into ‘Authorised Companies’ or ‘Global Business Companies ’, or
alternatively be dissolved.
[17] By the time Mr. Merceij received this notice from Vistra in September 2020 , SR
had already concluded its first loan agreement and advanced the funds to HGG. On the
other hand, F2T was a wholly owned subsidiary of SR , and Mr. Merceij was therefore
advised that it would be necessary to first wind up F2T before SR could be liquidated.
Pursuant to that advice, he instructed Vistra to proceed with the process of winding up
in October 2020. This process was long and SR’s GBC 2 license lapsed on 30 June
2021. This meant that it could no longer trade. However, it was still able to accept
repayments of funds, including repayments of the loans it made to HGG and other
entities, and declare dividends to shareholders, which was Mr. Merceij. Ou t of an
abundance of caution , Mr. Merceij requested Vistra to wait for the repayment of all the
loans which SR had made and then t ake steps to liquidate SR. In response, Vistra
advised that such steps would be unlawful and impossible. A nd that a delay in the
liquidation of SR could result in the charging of additional administration fees.
[18] However, after SR had received repayments of all its loans from HGG and its
other debtors, the liquidation of SR was commenced. Resolutions dated 27 December
2021 signed by Mr. Merceij as the sole director and shareholder of SR, to voluntarily
liquidate the company; a solvency assessment document ; and a statement of affairs of
SR signed by Mr. Merceij and depicting a true and faithful account of the books and
financial position were prepared. The requisite documentation was prepared by Vistra
and signed by Mr. Merceij before 31 December 2021 , i.e. the deadline which Vistra had
warned him, if not met, would result in the charging of additional administration fees.
[19] Mr. Gowtamsing Dabee (Mr. Dabee) was the liquidator of SR in Mauritius and did
not have any contact with Mr. Merceij during this process . As this was a voluntary
winding up of a company with no assets and or liabilities, he required no further
documentation to carry out his mandate. Mr Dabee never took custody of any of the
books and records of SR as he was not entitled, under Mauritian Law, to rely on the
state of affairs to execute the mandate. The administration was simple given the fact
that SR had no assets nor liabilities, nor was it tax resident in Mauritius. No assessment
by the Mauritian tax authorities or tax certificate was require d for SR to be finally wound
- up and dissolved. SR was finally dissolved or wound up on 15 October 2022.
[20] On 4 M arch 2022, Mr. Gerryts, the controller of HGG passed away . Shortly
thereafter on 11 March 2022, HGG was provisionally liquidated. Mr. Merceij stated that
until he learnt of HGG’s liquidation, he ha d no idea that HGG experienced financial
problems. The final order of liquidation was issued on 14 April 2022. The applicants
were therefore appointed as liquidators of HGG on 17 November 2022.
[21] The HGG liquidators on discovering inter alia that some payments were made by
HGG to SR before its liquidation, proceeded with section 29 urgent application in
camera before Nuku J and an order setting aside those payments as voidable
preferences was granted on 23 October 2024.
[22] Mr. Merceij on becoming aware of the order and on considering the section 29
application, noted that the liquidator’s powers were extended in terms of section 386 (5)
of Act 61 of 1973, (the 1973 Act) as well as by an order for a commission of inquiry to
be convened in terms of section 417/418 of the 1973 Act but was unsure of when this
extension of powers took place. Also, in paragraph 47 of the Section 29 proceedings, it
appears that the liquidators instituted several court proceedings in Mauritius, including: -
22.1 An application for recognition of HGG liquidators in Mauritius
22.2 An application for leave to institute proceedings to restore SR to the
Mauritian Companies Register;
22.3 An application to restore SR to the Mauritian Companies Register; and
22.4 An application for the SR liquidators (Mr Dabee) resumption of office.
[23] Despite being the sole director and shareholder of SR prior to its liquidation Mr
Merceij complained that he was not made aware of any Mauritian proceedings as stated
above. After the HGG liquidators were successful with the Mauritian proceedings on or
about 18 October 2024 they instituted the section 29 application in this Court before
Nuku J. On the face of it, as stated above it appears that it was instituted simply to set
aside certain payments which HGG had made to SR in the six months leading up to
HGG’s liquidation as voidable dispositions in terms of section 29 . However, it became
clear to him that HGG’s liquidators’ true motive in bringing this application wa s to gain a
tactical advantage in proceedings which they intended to institute against him in the
Netherlands.
[24] As contended, the HGG’s liquidators did not take note that Mr Merceij had direct,
substantial, material and/or residual powers in the section 29 proceedings. He was not
notified nor joined as a party in the proceedings. Curiously, the application was brought
on an urgent, confidential, and on in camera basis. The HGG’s liquidators in proceeding
in this manner, adopted an unu sual process to follow in voidable dispositions
proceedings, more especially where only a final order is sought.
[25] After Nuku, J granted an order on 23 October 2024 , the SR liquidator after re-
instatement confirmed in writing to the HGG liquidators’ attorney that HGG had been
registered as a creditor of SR on 28 October 2024 . Shortly thereafter, on 7 November
2024, HGG liquidators instituted pre – judgment attachment proceedings against Mr.
Merceij in the Netherlands – this was said to be akin to anti – dissipation proceedings in
South Africa . The purpose of these pre – judgment attachment proceedings was to
secure by way of a precautionary attachment of Mr Merceij’s property known as
Helvoirt, sections D5709, D5878 and D5875 and later the recovery of a future claim
which the HGG’s liquidators intended to pursue against him. Mr. Merceij was not given
notice of these proceedings , and merely received a copy of the papers with the order
granted in respect thereof. The HGG ’s liquidators attached the afore -mentioned
immovable properties per the order of 7 November 2024.
[26] On 5 December 2024, the HGG ’s liquidators instituted action proceedings
against Mr. Merceij in the Netherlands. According to him on consideration of the pre –
judgment attachment order and Dutch summons , it became apparent that the true
purpose of the main application (section 29 order) was to gain a tactical advantage
against him in the Dutch proceedings. In addition , the HGG ’s liquidators made several
misrepresentations to the Dutch court in the pre – judgment attachment application, to
create the impression that a finding of moral turpitude on his part has been made in
South African Court.
[27] The HGG liquidators’ claim in the Netherlands is that Mr. Merceij is liable to
repay the amount he (not SR) received within six months before HGG’s bankruptcy
amounting to €4 739 968, 22 in terms of the repayment obligation is section 29 (1 ) of
the Insolvency Act. The South African Court has already held that the payments made
by HGG within six months prior to bankruptcy qualify as voidable preferences “within the
meaning of this article.” In that application, it was said that, under South African law, not
only is SR liable for these payments, but also Mr. Merceij.
Separation of Issues
Locus Standi, Intervening Party, Application and Rescission Application
[28] HGG’ s Counsel submitted that the in limine point of locus standi is a crisp point
which the Court needs to determine upfront in terms of Rule 33 (4) of the Uniform Rules
of Court . In support of this contention , HGG’s liquidators relied on Giant Concerts v
Rinaldo Investments (Pty) Ltd and Others,1 where the Constitutional Court , in dealing
with the issue of locus standi, cross referenced to Hoexter2 and stated the following:
‘As Hoexter explains:
“The issue of standing is divorced from the substance of the case. It is therefore a
question to be decided in limine [at the outset] before the merits are considered.”
[29] Further, it was submitted that Corbet J, in United Watch & Diamond Co (Pty) Ltd
and Others v Disa Hotels Ltd and Another 3, held that the applicant must demonstrate
that he has legal interest in the proceedings. HGG’s liquidators argued that t he interest
in these proceedings that was alleged by the Intervening Party is not enough. The
argument proceeded, for the Intervening Party to establish legal interest as opposed to
financial interest, the Dutch proceedings are utterly irrelevant, so said HGG ’s
liquidators. Friedman, J in Standard General Insurance Co Ltd v Gutman NO and
Others4 held that:
1 (CCT 25/12) [2012] ZACC 28;2013 (3) BCLR 251 (CC) at para 32 – 34.
2 C Hoexter Administrative Law in South Africa 2 ed (Juta & Co, Cape Town 2012) at 488
3 1972 (4) SA 409 (C) at 415H
41981 (2) SA 433 G-H
‘The question of what class of persons has the necessary locus standi to bring an
application for the rescission of a judgement was considered in United Watch and
Diamond Co (Pty) Ltd and Others v Disa Hotels Ltd and Another 1972 (4) SA 409 (C)’
…
“the test and substantial interest in the subject matter of the action is again regarded as
being the decisive criterion…”
[30] The HGG ’s liquidators contended that the Intervening Party , in his founding
affidavit, merely paid lip service to the provisions of Rule 42 (1) of the Uniform Rules of
Court (Rule 42 (1)) and did not provide any factual foundation for the legal conclusion
that he has a direct and material interest in these proceedings. For a party to have locus
standi, he must establish legal, as opposed to financial interest. In De Villiers v GJN
Trust and Others5, the SCA held:
‘[22] In United Watch and Diamond Co (Pty) Ltd and Others v Disa Hotels Ltd and
Another 1972 (4) SA 409 (C) Corbet, J held that , in order to establish locus standi
under rule 42 (1) (a), an applicant must show a direct and substantial interest in the
judgment order that the applicant wishes to have varied or rescinded . This means a
legal interest in the subject matter of the action or application which could be
prejudicially affected by the order in that action or application. This judgment has been
cited with approval on numerous occasions including by this court in, inter alia, Aquatur
(Pty) Ltd v Sacks and Others 1989 (1) SA 56 (A) at 62.”
…
5 2019 (1) SA 120 SCA at paras 220 and 25
[25] In the rescission application the appellants averred that the s420 order adversely
affected their interests in that they were not afforded the opportunity to respond to the
serious allegations of impropriety that had been in the s420 application. This misses
the point. Although the purpose of the s420 application was to enable the liquidators to
claim from the appellants, the subject matter of that application was the restoration of
the dissolved company to a company in liquidation and not the enforceability of the
alleged claims against the appellants . The prosecution of these claims will no doubt
take place by due process , during which the applicants will be afforded the full
opportunity to protect their rights.’
[31] It was therefore argued that the merits of the section 29 application are irrelevant.
For instance, the affidavit filed by Mr. Robert Jan Van Galen (Mr. Van Galen) informing
this Court about the consequences which the order granted by Nuku, J on 23 October
2024 might have in the Dutch proceedings are equally irrelevant. Further, Mr. Van
Galen’s opinion on the Gazprombank Open Joint Stock Company v Bensadon
(Gazprombank)6 concerning the recognition of a foreign judgment in the Dutch
proceedings between the same parties that conducted the foreign proceedings was said
to be irrelevant. There is no foreign judgment which involves Mr. Merceij and he was not
cited as a party in any of the South African proceedings. In fact, it was said that Mr.
Merceij has not proffered any reason why the merits in the main application ( section 29
proceedings) are relevant to his application for intervention as he clearly had no locus
standi.
6 ECLI:NL:HR: 2014:2838 (Supreme Court of the Netherlands)
[32] The Intervening Party asserted that it ought to be admitted in these proceedings
as the section 29 order is now being used or was intended to be used as a springboard
by HGG ’s liquidators to recover personally from Mr. Merceij in the Netherlands . It
needs not prove any locus standi other than that. To expand further on this argument,
the following was stated; first, the HGG liquidators brought this application in secret and
as a matter of urgency. The Intervening Party contended that there was no warrant for
the bringing of the section 29 application in this manner as there was non – compliance
with section 32 of the Superior Courts Act 10 of 2013 which requires proceedings to be
carried on in an open court, unless it is a special case. No special case was alleged in
these proceedings. The manner in which these proceedings was brought was utterly
flawed.
Second, Mr. Merceij opposed the separation of issues on the basis that it would not be
convenient to have the question of legal standing determined separately as the issues
are inextricably linked. In any event, the Rule 33 (4) notice that was delivered by HGG’s
liquidators is misconceived and fatally defective. Rule 33 (4) applies only to actions, and
its invocation is irregular in respect of motion proceedings . This is manifest from the
introductory phrase to Rule 33 (4) which states that ‘[if], in any pending action…” 7. In
light of this peremptory language, it is not surprising that the Supreme Court of Appeal
has determined that the sub – rule does not apply to applications – See Louis Pasteur
Holdings (Pty) Ltd v Absa Bank Ltd and Others8 where it was held:
‘A further issue that requires comment is that the separation question was sought and
granted in terms of rule 33 (4) of the Uniform Rules of Court . Commenting upon this rule,
7 Rule 33 (4) of the Uniform Rules of Court
8 2019 (3) SA 97 (SCA) para 32
D Harms Civil Procedure in the Superior Courts Part B High Court at B33.9 , states the
following:
‘The provision does not apply to applications , but a court may deal with
separate issues in applications in limine and in its inherent power apply a
similar procedure to them.’
In Theron and Another NNO v Loubser NO and Others [2013] ZASCA
195;[2014] 1 All SA 460; 2014 (3) SA 323 (SCA) paras 10 – 16, Ponnan JA,
after an extensive review of the relevant authorities concluded that there was a
body of authority, the correctness of which he left open, as to the
circumstances in which a High Court may in the exercise of its inherent
jurisdiction, separate issues in application proceedings. Wallis, JA writing for
the majority in para 23, expressed the view that it was undesirable to examine
those cases in the High Court, where this procedure had been followed , as to
do so may be taken as implying an endorsement of some, or all of these
cases. Wallis, JA added the following in para 26:
‘In general, however, the desirable course to be followed in application
proceedings, where the affidavits are both the evidence and the
pleadings, is for all the affidavits to be delivered and the entire application
to be disposed of in a single hearing.’ [Emphasis Added]
[33] Mr Merceij submitted that the question of l ocus standi, is not simply a legal one
and must be determined in the light of all the relevant facts. For instanc e, in Firm – O –
Seal CC v Wynand Prinsloo and Van Eeden Inc and Another .9, it was held that the
Court should restrain itself from ordering an issue to be tried separately , as the court a
quo did where it has the result of opening the door to a fractional disposal of
proceedings and the piecemeal hearings, including of appeals on each part to be so
disposed of, thereby causing an unnecessary waste of time and costs. Although these
were action proceedings, the Court a quo determined the question of locus standi
separately and the SCA stated as follows:
‘…In confi ning itself to the single issue [the question of locus standi], as it did, the
approach of the High Court opened the door to a fractional disposal of proceedings and
the piecemeal hearings of appeals on each part so disposed of.’
[34] Mr. Merceij submitted that he is directly affected by the order in the main
application and therefore has legal standing to intervene in the se proceedings. It may
not be that the question of locus standi is only a legal one, but rather both a procedural
and substantive issue. There are no fixed rules as to the standing of a litigant. The test
is the sufficiency and directness of the litigant’s interest in the proceedings which must
perforce be determined with reference to all the relevant facts in the matter 10. In
Jacobs11, the SCA clarified that a litigant does not need a strict financial and proprietary
right to challenge a local government ordina nce and its conduct , and rather a direct
interest in the matter is sufficient. This, therefore, means that a straight-jacket approach
9 2024 (6) SA 52 (SCA) at paras [2] and [10]
10 Sandton Civil Precinct (Pty) Ltd v City of Johannesburg and Another 2009 (1) SA 317 (SCA) at para [19]
11 Jacobs en ‘n Ander v Waks en Andere 1992 (1) SA 521 (A) at 534 D
is not an appropriate manner to deal with a question of locus standi. This issue has to
be determined on a case by case basis.
[35] The authorities recently handed down by the superior courts clearly demonstrate
that courts are astute in identifying the material issues involving locus standi. Obviously,
the sufficiency of the interest depends on the facts of a particular case. Be that as it
may, for the Courts not to stray, it goes without saying that they still ha ve to adhere to
the basic requirements of the access mechanism that is controlled by the court i tself.
The SCA in Rattan12 stated that the adequacy of interest involves the following: (i)
sufficient interest in the subject matter of litigation; (ii) the interest must not be too
remote; (iii) the interest must be actual, not abstract or academic; (iv) the interest must
be current and not a hypothetical one. In these circumstances, the section 29 order was
granted in Mr. Merceij’s absence . Its purpose was to be used as a launch pad by the
liquidators to mount legal proceedings against him personally in the Netherlands . As a
result of the section 29 order , the liquidators obtained a pre – judgment attachment
order in the Netherlands against Mr. Merceij ’s immovable propert ies on 7 November
2024. In the Nertherlands, on 5 December 2024 s ummons were issued against Mr.
Merceij personally for the recovery of €4 739 968, 22. That is the same amount that was
said to be voidable preferences within the meaning of section 29 that was paid to SR.
[36] If such facts are taken into consideration, Mr. Merceij submitted that the
judgment or order granted in section 29 proceedings should be rescinded as he is not
12 Four Wheel Drive Distributors CC v Leshni Rattan NO 2018 JDR 2203 (SCA) at para [7]; DE Van Loggerenberg
and E Bertelsmann Erasmus: Superior Court Practice 2 ed Vol 1 at D1 -186
merely an interested party in these proceedings , but clearly an affected party. In doing
so, reference was made to Stander and Another v Absa Bank,13 where it was stated:
‘It seems to me that the very reference to ‘the absence of any party affected’ is an
indication that what was intended was that such party, who was not present when the
order or judgment was granted, and who was therefore not in a position to place facts
before the Court which would or could have persuaded it not to grant such an order or
judgment, is afforded the opportunity to approach the Court in order to have such order
or judgment rescinded or varied on the basis of facts, of which the Court would initially
have been unaware, which would justify this being done.’
[37] It was always the Intervening Party’s stance that not all the facts were put before
the Court when the order was obtained. In fact, some of the facts were misrepresented.
If that is indeed the case, then t he section 29 order, it was said, was erroneously
granted in that there existed, at the time the order was granted, facts of which the Court
was unaware and which could have induced it not to grant the order. 14 For instance, it
was stated that the liquidator s knew that SR’s business had been conducted solely by
Mr. Merceij prior to its winding up. All the relevant facts regarding its business were
within his exclusive knowledge as a sole director and shareholder. At all times during
these investigations on HGG’s affairs, the liquidators had been in contact with Vistra in
Mauritius regarding the affairs of SR . The liquidators ’ attorneys were advised that Mr.
Dabee had been discharged from his duties as a liquidator and that Mr. Merceij was
13 1997 (4) SA 873 (E) at 822 E-G; See also Absa Bank v Prinsloo Familie Trust and Others 2024 (3) SA 80 (GJ) at
paras [67] and [68]
14 Zuma v Secretary of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud
in the Public Sector Including Organs of State and Others (Council for the Advancement of the South African
Constitution and Another as Amici Curiae 2021 (11) BCLR 1263 (CC) at para 62
agreeable to providing the necessary documentation and information . That indeed
makes sense as this was a voluntary winding up.
[38] Notwithstanding that Mr. Merceij tendered his full co – operation to the
liquidators, this invitation for whatever reason was not taken up by them. The liquidators
were therefore under a duty to make full and proper disclosure to the Court as in the
case of any other ex parte application. Where an order is sought ex parte it is well
established that the utmost good faith must be observed. All material facts which might
influence a court in coming to its decision must be disclosed , and the withholding or
suppression of material facts, by itself, entitles the court to set aside an order . This is
so, even if the non – disclosure or suppression was not wilful or mala fide. In arguing
this point, t he Intervening Part y relied to the principles that were enumerated by the
SCA in Redisa15 as follows:
38.1 The law sometimes allows parties to depart from a fundamental principle of the
administration of justice, namely, audi alteram partem. But in those exceptional
circumstances, the ex parte applicant assumes a heavy responsibility to neutralise the
prejudice that the affected party suffers by his or her absence.
38.2 The applicant must thus be scrupulously fair in presenting their own case. They must
speak for the party by disclosing all relevant facts they know or reasonably expect the
absent party would want to place before the Court. The applicant must disclose and
deal fairly with any defences of which they are aware or which they may reasonably
15 Recycling and Economic Development Initiative of South Africa v Minister of Environmental Affairs of a related
matter [2019] 2 All SA 1 (SCA)
anticipate. They must disclose all relevant adverse material that the absent respondent
might have put up in opposition to the other.16
38.3 The applicant must exercise due care and make such inquiries and conduct such
investigations as are reasonable in the circumstances before seeking ex parte relief.
They may not refrain from disclosing matter asserted by the absent party because they
believe it to be untrue.
38.4 Even where the ex parte applicant has endeavoured in good faith to discharge their
duty,
they will be held to have fallen short if the Court finds that the matter which was
disregarded was sufficiently material to require disclosure. The test is objective 17and ex
parte litigant should not be guided by any notion of doing the bare minimum. The judge
who hears an ex parte application, particularly if urgent and voluminous, is rarely able to
study the papers at length and cannot be expected to trawl through annexures in order
to find material favouring the absent party.18
38.5 Unless there are very cogent practical reasons why an order should not be rescinded,
the
Court will always frown upon an order obtained ex parte on incomplete information and
will set it aside even if relief could be obtained on a subsequent application by the same
applicant19.
38.6 Regard must be had to the extent of the non – disclosure, the question being whether
the
Judge hearing the ex parte application might have been influenced by a proper
disclosure, the reason for the non – disclosure and the consequences of setting aside
the provisional order20.
16 Ibid para [47]
17 Ibid at para [47]
18 Ibid at para [49]
19 Ibid at para [40]; Schlesinger v Schlesinger 1979 (4) SA 342 (W) at 350 B
Discussion and Analysis
[39] The HGG ’s liquidators made an application in terms of Rule 33 (4). At the
hearing of the matter the issue of locus standi and separation of issues were somehow
intertwined. However, I will first deal with the Rule 33(4) application . It is indeed correct
that Rule 33(4), does not apply in motion proceedings. As indicated in Louis Pasteur21 -
since this procedure is not catered for in the application proceedings the Court may
separate issues in applications in limine in exercising its inherent powers.
[40] The HGG’s liquidators have not argued that this Court should invoke section 173
of the Constitution and thus exercise its inherent power s in determining this point in
limine. It appeared as if they are entitled in terms of Rule 33 (4) to be granted a
separation. In my view, separation of issues is not for the taking. In any event, this is
not a matter where separation is warranted, even if this Court would exercise its
inherent power. As the Intervening Party correctly stated, t he Court has all the papers
in front of it, meaning it has considered all the issues that were put before it holistically.
The entire application in this regard is capable of being disposed of in one hearing
without a waste of the Court’s time and valuable resources which are currently
significantly sparse.
20 Ibid at para [52]
21 Supra fn 9 at para 33
[41] As was pointed out earlier, where pleadings and affidavits are before court it is
desirable that the entire application be disposed of in a single hearing 22. A fractional
disposal of proceedings and the piece meal hearings is not warranted.
[42] In addition in Molotlegi v Mokalase23, the SCA held:
‘A court hearing an application for a separation of issues in terms of rule 33(4) has a
duty to satisfy itself that the issues to be tried are clearly circumscribed to avoid any
confusion. It follows that a court seized with such an application has a duty to carefully
consider the application to determine whether it will facilitate the proper, convenient
and expeditious disposal of litigation . The notion of convenience is much broader than
mere facility or ease o r expedience. Such a court should also take due cognisance of
whether separation is appropriate an d fair to all the parties. In addition, the court
considering an application for separation is obliged, in the interest s of fairness, to
consider the advantages and disadvantages which might flow from such separation.
Where there is a likelihood that such separation might cause the other party some
prejudice, the court may, in the exercise of its discretion, refuse to order separation.’
[43] The HGG’s liquidators have referred to a number of judgments in disputing Mr.
Merceij’s locus standi, including De Villiers24 which does not assist HGG ’s liquidators in
that as the Intervening Party aptly pointed out that it dealt with a different factual matrix,
with the Court in that decision considered an application for the avoidance of the
22 Theron and Another NNO v Loubser NO and Others 2014 (3) SA 323 (SCA) para 10-16; Tau v Mashaba and
Others 2020 (5) SA 135 (SCA) at para [15] and Firm – O – Seal supra fn 10 para 10
23 2010 JDR 0360 (SCA) para [20]
24 Supra fn 6
dissolution of a company. So, it is for this reason that each case must be decided on its
own facts.
[44] Notwithstanding, it is trite that separation based on locus standi is not a distinct
separation issue on the pleaded case. For the reasons stated above, t he application for
separation therefore fails.
[45] The Court has a discretion to grant or deny the intervention of a party based on
whether the interest is genuine, direct and/or legally recognizable. This therefore means
that it is not a clear-cut exercise. The Court must determine the matter based on the
available facts and law applicable thereto. The Constitutional Court in SA Riding for the
Disabled Association v Regional Land Claims Commissioner and Others 25 held as
follows:
‘[9] It is now settled that an applicant for intervention must meet the direct and
substantial interest test in order to succeed. What constitute a direct and
substantial interest is the legal interest in the subject -matter of the case which
could be prejudicially affected by the order of the court . This means that the
applicant must show that it has a right adversely affected or likely to be affected
by the order sought.’
[46] In Peermont Global (KZN)(Pty) Ltd v Afrisun (KZN) (Pty) Ltd t/a Sibaya Casino
and Entertainment Kingdom and Others and a related matter,26 the court recognized the
principle that a party is entitled to intervene as a party to the proceedings where:
25 2017 (5) SA 1 (CC) at para [9]
26 [2020] 4 ALL SA 226 (KZP) at para [18]. [Footnotes omitted]
‘18.1 it has a direct and substantial interest in the right that is the subject matter of the
application, which could be prejudiced by the judgment of the court. The interest must be
such that the in tervenor’s joinder is either necessary or convenient. But the possibility
that a legal interest exists is sufficient, and it is not necessary for the court positively to
determine that it exists.
18.2 the allegations made by the intervening applicant constitute a prima facie case or
defence. It is, however, not necessary for the intervenor to satisfy the court that it will
succeed in its case or defence. It is sufficient for the party seeking to intervene to rely on
allegations which if they can be proved in the main a pplication would entitle it to
succeed. In assessing the intervenor’s standing then, the court must assume that the
allegations it advances are true and correct; and
18.3 the application is made seriously and is not frivolous.’ [Emphasis added]
[47] In effect, this principle was endorsed in Minister of Finance v Afribusiness NPC 27
where it was asserted that:
‘A party is entitled to join and intervene in proceedings where they have a direct and
substantial interest in the matter. A person is regarded as having a direct and substantial
interest in an order if that order would directly affect that person’s rights or interests.’
[48] Without a doubt, the section 29 order directly affected Mr Merceij’s rights and
interests as it resulted in the pre -judgment attachment of his properties in the
Netherlands and a subsequent claim of € 4 739 968.22. A party can only be said to
27 2022 (4) SA 362 (CC) at para [23]
have direct and substantial interest in the matter if the relief sought cannot be sustained
and carried into effect without prejudicing their interest 28. The argument that Mr Merceij
was no longer a director and/or shareholder of SR as the company was wound up and
in the hands of a liquidator rings hollow. If he was not a person of interest, it follows that
HGG’s liquidators could not have proceeded against him personally in the Netherlands.
The fact that he had a direct and substantial interest in the section 29 order, is borne out
by the HGG’s liquidators assertions at paragraph 47 of the section 29 application when
the following was stated:
’47. Since we sought to pursue a claim in terms of sections 29 of the Insolvency Act against
Square Rock, coupled with relief against Merceij in his capacity as director and
shareholder of Square Rock , we were compelled to bring the following related and
consecutive applications in the Supreme Court of Mauritius : (i) firstly, an application for
our recognition as HGG Inc.’s liquidators in Mauritius , which application was successful,
(ii) thereafter, we had to apply for leave to bring an application for Square Rock’s
restoration to the Mauritian Register , which was also successful and (iii) only thereafter
could (and did) we apply for Square Rock’s reinstatement. The application was also
successful and, eventually on 20 November 2023, Square Rock was ordered to be
reinstated and restored to the Mauritian Register whereafter Square Rock was formerly
reinstated on the Mauritian Register as a company in liquidation on 13 December 2023
(effective from 7 December 2023).
…
28Amalgamated Engineering Union v Minister of Labour1949 (3) SA 637 (A) 653; Gordon v Department of Health,
KwaZulu – Natal 2008 (6) SA 522 (SCA) at para 9; ABSA Bank Ltd v Naude NO 2016 (6) SA 540 (SCA) at para
[10]
49. Pending the restoration of Square Rock, we sought and obtained legal advice in regard
to the potential recovery of money from Merceij. Reliant on the advice , we were unable
to proceed with recovery steps against Merceij without having first achieved the
restoration of Square Rock and the appointment of a liquidator for Square Rock to
resume such office.
…
52. In the circumstances , it is imperative that we apply for the relief set out herein as a
matter of extreme urgency to enable us to proceed with legal proceedings in the
Netherlands against Merceij immediately after HGG has been admitted by Dabee as
creditor of Square Rock (premised on, amongst others, HGG’s claim in terms of section
29 of the Insolvency Act.
53. I pause to mention that we have to date already been authorised by this Honourable
Court to apply for our recognition and to institute proceedings for the recovery of
dispositions in the Netherlands.
54. Arrangements have been made with attorneys in Amsterdam in the Netherlands to have
consultation and meetings in Amsterdam during the first week 2024. The attorneys have
been advising us since 2022 in regard to HGG’s claims. These consultations and
meetings have been scheduled to enable the HGG liquidators to promptly commence
with proceedings in the Netherlands to recover the above dispositions, should this
Honourable Court be inclined to make such an order, from Merceij as the ultimate
beneficiary of this disposition.’
[49] Clearly, the proceedings in Mauritius and Section 29 order paved the way for the
recovery against Mr Merceij personally. Quite concerningly, Mr. Merceij who was said to
be the ultimate beneficiary of these voidable dispositions , was not notified about these
proceedings, let alone being cited in the m. This is the individual who allegedly owed
€4 739 968, 22 worth of the HGG’s liquidators’ funds after Mr. Dabee had finalised the
liquidation of SR. Mr Merceij from the onset of the liquidators investigations tendered
his full co – operation as SR sole shareholder and director who initiated the voluntary
liquidation. In fact, according to Mr Merciej, he proceeded with the winding up of S R in
order to regularise the status of SR and comply with the amended Mauritian company
legislation. Most importantly, h ad that been placed before Court and other relevant
information, it might have persuaded the Court in not granting the Section 29 order.
Since Mr. Dabee was not in possession of the books and accounts of SR, it then
followed that Mr. Merceij was the individual possessed with this information. Pointedly,
the Court in the main application could not verify these alleged voidable dispositions
from SR’s records.
[50] In my view , Mr. Merceij did not only have direct , substantial, but also financial
interest in the section 29 order . Evidently, the HGG ’s liquidators utilized the section 29
order as the l ynchpin in securing the liquidators claim by obtaining a pre -judgment
attachment order in the Netherlands against Merceij. The fact that Mr. Merceij would be
endowed with any such protection , is because the common law has long recognised
that there is no fixed rule that determines whether a party has standing to bring
litigation, and the Courts have always adopted a flexible and practical approach in these
instances. The right to bring litigation before the courts is restricted for various reasons .
The courts are not there to pronounce upon academic issues ; they are not there to
pronounce upon matters that have no significant consequences for the initiating party;
they are not there for the benefit of busybodies who wish to harass others; and so on 29.
In Peermont Global it was held that the legal interest is not necessary for the court
positively to determine that it exist. For these reasons, Mr Merceij has demonstrated
that he has the requisite legal standing and therefore leave to intervene is granted.
[51] In HR Compute k (Pty) Ltd v Dr WA A Gouws30, Coppin, J recognised that a
former director of a company has legal standing to rescind the final order of liquidation
in line with the principle that a company’s directors have ‘residual powers’ to act on the
company’s behalf in opposing a winding – up order31.
[52] Despite the direct and substantial interest that the dir ectors must demonstrate, i t
appears that the Courts have now moved towards recognising that a director has
residual powers to bring rescission applications against a liquidated company. Binns –
Ward, J in Gary Lawrance Praetor and Geothermal Energy Systems (Pty) Ltd v Aqua
Earth Consulting CC32 , in its re - instatement of what was said i n Storti above,
recognised that it appears to be generally accepted that a company’s directors have
what have been described as ‘residual powers’ to act on the company’s behalf causing
it to oppose the confirmation of the rule in a provisional winding up, or to appeal against
29 Public Protector v Mail and Guardian Ltd and Others 2011 (4) SA 420 (SCA) at para [29]; Cabinet of the
Transitional Government for the Territory of South West Africa v Eins 1988 (3) SA 369 at 388 B – H.
30 2023 (6) SA 268 (GJ) para 12
31 Storti v Nugent and Others 2001 (3) SA 783 (W) at 795G -796 C
31 Storti v Nugent and Others 2001 (3) SA 783 (W) at 795G -796 C
32 (162/2016) [2017] ZAWCHC 8 para 4; HR Computek (Pty) Ltd v Dr WAA Gouws (Johannesburg) (Pty) Ltd &
Others [2023] ZAGPJHC 844; 2023 (6) SA 268 (GJ) at para [17]
a winding – up order. In the recen t SCA decision in Dr WAA Gouws (Johannesburg )
(Pty) Ltd v HR Computek Pty Ltd and Others 33 it was recognised 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 by a company in liquidation in terms of the common
law for obvious reasons. The common law right provides a company with an opportunity
to 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 recission application in this
scenario. It therefore follows that Mr. Merceij as the former director of SR, is possessed
with such residual powers to put facts into perspective and explain those payments
before it can be concluded that they are voidable preferences.
[53] It might be that the position of Mr . Merceij is slightly more unique tha n those
authorities point ed out above . However, since he is the only person who could have
placed all the relevant and countervailing facts in the section 29 application, it then
follows that the acquiring of the judgment in secrecy deprived him from putting that
information before Court. The fact that the alleged voidable disposition s, are claimed
directly from him, makes him “any party affected” and brings him within the confines of
Rule 42 (1) (a).
[54] In conclusion , in granting the section 29 order, Nuku, J had a one-sided
exposition of the facts. This was despite the fact that Mr. Merceij was present and made
33 Dr WAA Gouws (Johannesburg) (Pty) Ltd [2025] ZASCA 103; 2025 (6) SA 89 SCA at para [13]-[14]
himself available for whatever information that was required from him. For instance, he
would have denied that the payments that were made to SR are recoverable from him
personally, and would have disavowed the fraudulent activities that were committed by
HGG and that they were not associated to him. In Redisa Cachalia, JA warned about
bringing an order in secrecy 34. However, the HGG liquidators failed to disclose the full
facts and pertinent information before Court, more especially the books and accounts of
SR which were in possession of Mr. Merceij. Further, complaints were mounted on the
fact that HGG’s liquidators in the section 29 application made some misrepresentations.
If indeed that was the case, such information would need to be corrected. For t hose
reasons, the application for rescission of the Section 29 order granted by Nuku, J on 23
October 2024 succeeds.
[55] In the result, the following order is granted:
55.1 The separation of issues in terms of Rule 33(4) fails.
55.2. The point in limine on locus standi raised by the HGG’s liquidators fails.
56.3. The Intervening Party, Mr Adrianus Merceij is granted leave to intervene in
the main proceedings (section 29 application)
55.4. The judgment and order granted by Nuku, J on 23 October 2024 is
rescinded.
55.5 The respondents are ordered to pay the costs including the costs of two
Counsel where so employed on Scale C.
34 Redisa supra fn 16
_________________________
B P MANTAME
JUDGE OF THE HIGH COURT
Counsel for the Applicants: Adv Roelof Van Riet SC
Adv. Louis Olivier SC
Instructed by: Boshoff Bronn Smit Attorneys
Counsel for the Intervening Party: Adv Gavin Woodland SC
Instructed by: ENS CAPE TOWN