ABSA Bank Ltd v Companies and Intellectual Property Commission of South African and Others (A29/13) [2013] ZAWCHC 57; 2013 (4) SA 194 (WCC); [2013] 3 All SA 34 (WCC) (19 April 2013)

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[2013] ZAWCHC 57
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ABSA Bank Ltd v Companies and Intellectual Property Commission of South African and Others (A29/13) [2013] ZAWCHC 57; 2013 (4) SA 194 (WCC); [2013] 3 All SA 34 (WCC) (19 April 2013)

THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT)
Reportable
Case
No: A29/13
In the matter between:
ABSA BANK LIMITED
APPELLANT
And
THE
COMPANIES & INTELLECTUAL PROPERTY COMMISSION OF SA
FIRST
RESPONDENT
THE
MINISTER OF TRADE & INDUSTRY N.O
THE MINISTER OF FINANCE N.O.
THE MINISTER OF PUBLIC WORKS N.O.
THE
REGISTRAR OF DEEDS, CAPE TOWN
THE
SHERIFF OF THE MAGISTRATE’S COURT, KNYSNA
ANDREW JOHNSTONE
THE KNYSNA MUNICIPALITY
NIKKEL TRADING
(PTY) LTD
SECOND RESPONDENT
THIRD RESPONDENT
FOURTH RESPONDENT
FIFTH RESPONDENT
SIXTH RESPONDENT
SEVENTH RESPONDENT
EIGHTH RESPONDENT
NINETH RESPONDENT
Coram
: YEKISO, ROGERS & CLOETE JJ
Heard: 12 APRIL 2013
Delivered: 19 APRIL 2013
______________________________________________________________
JUDGMENT
______________________________________________________________
ROGERS J:
Introduction
[1] On 30 April 2012 the appellant (‘Absa’)
applied in the court
a quo
for the issuing of a rule nisi
calling upon the respondents and other interested parties to show
cause why an order should not be
granted reinstating the registration
of a close corporation called Voigro Investments 19 CC (‘Voigro’)
in terms of
s 83(4)(a) of the Companies Act 71 of 2008 (‘the
Act’ or ‘the 2008 Act’) read with s 26 of the

Close Corporations Act 69 of 1984 (‘the CC Act’) and why
certain ancillary relief should not be granted.
[2] On 9 May 2012 Gamble J made an order issuing the
requested rule nisi, returnable on 13 June 2012. He also granted,
pending the
return date, an interim interdict preventing the sixth
respondent (the Sheriff of the Magistrate’s Court Knysna –
‘the
Sheriff’), and the fifth respondent (the Registrar
of Deeds Cape Town) from transferring the immovable property known as
Erf 506 Knysna (‘the property’) to Nikkel Trading Pty Ltd
(‘Nikkel’) or to anybody else.
[3] There was no opposition on the return day. However,
after hearing argument Henney J in a reserved judgement dismissed the
application.
Absa now appeals to a full bench with the leave of the
court
a quo
. Although the effect of Henney J’s order was
inter alia
to discharge the interim interdict against the
transfer of the property to Nikkel we were informed by Mr Vivier for
the appellant
that there is an agreement that the property will not
be transferred pending judgment on the appeal.
The facts
[4] On 12 April 2006 the property was registered in
Voigro’s name. At the same time a covering mortgage bond was
registered
in Absa’s favour to secure the loan made by Absa to
Voigro to fund the purchase of the property.
[5] On 1 April 2008 the eighth respondent (the Knysna
Municipality – ‘the Municipality’) obtained default
judgement
against Voigro for R11 704,08 in respect of arrear
rates plus R641,21 in respect of costs.
[6] On 24 February 2011 Voigro was finally deregistered
by the Registrar of Close Corporations in terms of s 26(2) of
the CC
Act as it then read. This was because of Voigro’s
failure to lodge its annual returns in terms of s 15A of the CC
Act.
[7] The 2008
Companies Act came
into force on 1 May
2011. In terms of item 8(1) of schedule 3 to the 2008 Act, s 26
of the CC Act was substituted with effect
from the same date.
[8] On 1 July 2011, nearly three years after obtaining
default judgement against Voigro, the Municipality obtained a writ to
attach
the property in execution of its judgment. The Municipality
did so in ignorance of the deregistration of Voigro. Indeed, it seems

that the Municipality, the Sheriff, Absa and Nikkel were all unaware
of the deregistration until April 2012.
[9] On 26 September 2011 the Sheriff informed Absa’s
Knysna branch that a warrant to attach the property had been issued.
The sale in execution was scheduled for 14 October 2011. On the day
of the auction the Sheriff warned Absa’s Knysna branch
that
Absa needed to take steps to protect its position. The Knysna branch,
apparently being inexperienced in such matters, failed
to do
anything. The result was that on 14 October 2011 the property was
sold in execution to Nikkel for R200 000, well below
the
property’s market value.
[10] On 7 November 2011 Absa obtained default judgement
against Voigro for R1 517 122,09 plus costs together with
an order
declaring the property executable. This summons was issued
through Absa’s head office in ignorance of the sale in
execution
to Nikkel. On 13 December 2011 Absa caused the property to
be attached. It was only towards the end of March 2012 that Absa’s

head office learned that the property had been sold in execution to
Nikkel. In order to prevent transfer to Nikkel, Absa on 3 April
2012
obtained an urgent provisional winding-up order against Voigro,
unaware that Voigro had been deregistered. The fact of deregistration

came to light later in April 2012. This led to the launching of the
application on 30 April 2012 which has given rise to this appeal.
In
his judgment of 14 November 2012 Henney J dismissed the application
and also discharged the provisional liquidation order.
The relief sought
[11] The primary relief sought by Absa pursuant to the
rule
nisi
was: [a] an order reinstating Voigro’s
registration in terms of s 83(4)(a) of the 2008 Act read with s 26
of the CC
Act; [b] an order directing the first respondent (the
Companies and Intellectual Property Commission of South Africa –

‘the CIPC’) to reinstate Voigro on the register of close
corporations; [c] an order directing that upon reinstatement

(i) the assets of Voigro would no longer be
bona vacantia
;
(ii) the assets of Voigro would vest in the corporation with
retrospective effect to 24 February 2011 (the date of final

deregistration) as if Voigro had not been deregistered; (iii) all
liabilities of Voigro would continue and would be enforceable
against
the corporation.
[12] Absa also sought an order that the sale of the
property to Nikkel be declared null and void. Finally, Absa asked for
an order
that its costs be borne by Voigro upon its restoration to
the register.
The applicant’s case in the court
a
quo
[13] The applicant’s case was that a deregistered
close corporation can, in terms of s 26 of the CC Act (as
amended with
effect from 1 May 2011) read with the 2008
Companies
Act, be
revived either by the CIPC in terms of s 82(4) of the
Act or by the court in terms of s 83(4)(a) of the Act.
[14] The applicant contended that revival by the CICP
was not practically available to Absa because an application to the
CIPC for
reinstatement must in terms of s 82(4) be made ‘in
the prescribed manner’. Regulation 40(6) of the regulations

promulgated in terms of s 223 requires in this regard that the
annual returns which the corporation should have lodged be
brought up
to date together with payment of the prescribed fees. This is not
something which can be done by an outsider such as
Absa. Voigro’s
sole member at the time of its deregistration was the seventh
respondent (Andrew Johnstone) but he could not
be compelled to do
what is needed to achieve reinstatement in terms of s 82(4).
[15] It was thus just and equitable, so Absa contended,
for the court to revive Voigro in terms of s 83(4)(a) and to
grant
the ancillary relief sought.
[16] This, in summary, remained the applicant’s
case before us.
The Court
a quo
’s judgment
[17] Henney J found that s 83(4)(a) read with
section 26 of the CC Act was not applicable to the case of a close
corporation
deregistered by the Registrar (prior to 1 May 2011) or by
the CIPC (on or after 1 May 2011) for failure to file annual returns.

The exclusive manner in which a corporation could be revived in such
a case was by reinstatement by the CIPC in terms of s 82(4).
In
reaching this conclusion Henney J had regard to the distinction which
existed in the previous
Companies Act (Act
61 of 1973) between the
restoration of deregistered companies (s 73(6) of the 1973 Act)
and the declaring void of the dissolution
of companies following
liquidation (s 420 of the 1973 Act). He concluded that
s 83(4)(a) had the same scope as the old
s 420.
[18] Henney J recognised that an interested party in
Absa’s position faced certain obstacles in complying with the
procedures
prescribed pursuant to s 82(4) for reinstatement by
the CIPC but was not convinced that it was ‘impossible or that
difficult’
to bring such an application.
The relevant statutory provisions
Prior to 1 May 2011 - companies
[19] The position prior to 1 May 2011 in relation to
companies was the following. Chapter IV of the 1973 Act (ss 32-73)
dealt,
according to its heading, with
‘
FORMATION,
OBJECTS, CAPACITY, POWERS, NAMES, REGISTRATION AND INCORPORATION OF
COMPANIES, MATTERS INCIDENTAL THERETO AND DEREGISTRATION’
.
The last part of Chapter IV (containing only s 73) was headed
‘Deregistration’. In terms of s 73(5) the
Registrar
of Companies could, after following the procedure laid down in
ss 73(1) and (3), deregister a company if the company
had failed
to lodge an annual return or if the Registrar had reasonable cause to
believe that the company was not carrying on business
or was not in
operation. Such a company could have its registration restored by the
court in terms of s 73(6) or by the Registrar
in terms of
s 73(6A). However, the grounds on which the court and the
Registrar respectively could restore the company differed:
[a] A
court could restore the company (regardless of the basis of
deregistration) if satisfied that at the time of deregistration
the
company had been carrying on business or had been in operation or
that it was otherwise just and equitable to do so. [b] The

Registrar could restore the company only if the company had been
deregistered due to failure to lodge an annual return and only
after
the company had lodged the outstanding return and paid the prescribed
fee.
[20] It follows, in the case of a company deregistered
for failure to lodge an annual return, that if the interested party
could
not procure the lodging of the outstanding return and thus
obtain restoration from the Registrar in terms of s 73(6A), he
could approach the court in terms of s 73(6) and obtain
restoration if this was just and equitable.
[21] The stated effect of restoration of registration in
terms of these provisions was that the company would be ‘deemed
to
have continued in existence as if it had not been deregistered’.
It has recently been confirmed by the Supreme Court of Appeal
that
this means that the company’s actions and conduct during the
period of deregistration are deemed to have been undertaken
by an
existing company (
Kadoma Trading (Pty) Ltd v
Noble Crest CC
[2013] ZASCA 52).
[22] The word ‘dissolution’ was not used in
s 73. The event which brought the company’s existence to
an end
(subject to any later restoration) was ‘deregistration’.
[23] Chapter XIV of the 1973 Act (ss 337-426)
dealt, according to its heading, with
‘
WINDING-UP
OF COMPANIES’
. The penultimate part of
Chapter XIV (ss 419-422) dealt, according to its heading, with
‘Dissolution of Companies and
Other Bodies Corporate’. It
applied to all liquidations, voluntary and compulsory. Section 419(1)
stated that in any winding-up
the Master should, when the affairs of
the company had been completely wound up, transmit to the Registrar a
certificate to that
effect and send a copy to the liquidator. In
terms of s 419(2) the Registrar was required to ‘record
the dissolution
of the company’ and to publish a notice thereof
in the prescribed manner. Section 419(3) provided that the date of
dissolution
was the date on which the Registrar recorded the
dissolution in terms of s 419(2).
[24] Section 420 then provided as follows:
‘
When a
company has been dissolved, the Court may at any time on an
application by the liquidator of the company, or by any other
person
who appears to the Court to have an interest, make an order, upon
such terms as the Court thinks fit, declaring the dissolution
to have
been void, and thereupon any proceedings may be taken against the
company as might have been taken if the company had not
been
dissolved.’
[25] The effect of an order declaring a dissolution void
differed from the restoration to the register in terms of s 73.
In
the case of s 420 there was no provision that the company
would be deemed to have remained in existence despite its
dissolution.
It is well established in other Commonwealth
jurisdictions with provisions worded in a similar way to s 420
that upon a declaration
that a dissolution is void the assets and
liabilities which the company had immediately prior to its
dissolution are re-vested
in the company but that during the period
of dissolution any purported acts by the company are of no effect and
no proceedings
can validly be instituted or pursued by or against the
company during that period. Such matters are not revived or validated
by
the order declaring the dissolution void (see, for example,
Morris
v Harris
[1927] AC 252
at 257
per
Lord Sumner and at 268
per
Lord Blanesburgh;
In re CW Dixon Ltd
[1947] Ch 252
;
Smith v White Knight Laundry Ltd
[2001] EWCA Civ 660
; the
authorities on provisions in this form and the contrast with
provisions closer in form to s 73(6) of our 1973
Companies Act
were
fully reviewed in
Peakstone Ltd v Joddrell
[2012] EWCA
Civ 1035
paras 18-29). This view was followed in South Africa in
relation to
s 420
and its antecedents (
Pieterse v Kramer NO
1977 (1) SA 589
(A) at 600A-601H).
[26] The word ‘deregistration’ was not used
in this part of Chapter XIV. The event which brought the liquidated
company’s
existence to an end (subject to any later order under
s 420)
was the Registrar’s recording of the ‘dissolution’.
Prior to 1 May 2011 – close corporations
[27]
Part III
of the CC Act (ss 12-27) dealt,
according to its heading, with
‘
REGISTRATION,
DEREGISTRATION AND CONVERSION’
. Section 26
provided for deregistration. In terms of s 26(2) the Registrar
could deregister a corporation on essentially the
same grounds as he
could deregister a company in terms of s 73(5) of the 1973 Act,
after following the procedure laid down
in s 26(1).
[28] Sections 26(4) and (5) contained provisions
regarding the liability of members of deregistered corporations which
did not have
their counterpart in s 73 of the 1973 Act.
[29] Section 26(6) empowered the Registrar to restore
the registration of a close corporation if he was satisfied that at
the time
of deregistration the corporation had been carrying on
business or had been in operation or that it would otherwise be just
to
do so. It was provided, however, that if the corporation had been
deregistered for failure to lodge an annual return the Registrar

could only restore its registration after the corporation had lodged
the outstanding return and paid the prescribed fee.
[30] There was no provision for the court to restore the
registration of a close corporation. Section 26(6) of the CC Act was
thus
broadly the counterpart of section 73(6A) of the 1973
Companies
Act, save
that in terms of
s 26(6)
the Registrar could restore a
corporation’s registration on the wider grounds which, in the
case of companies, were available
only to a court in terms of
s 73(6).
Nevertheless, and despite the Registrar having the
power to restore a corporation on these wider grounds, there remained
the restriction
that in the case of deregistration for failure to
file an annual return there could only be restoration if the
outstanding annual
return was lodged and the prescribed fee paid. If
an interested party could not procure such lodging, there was no
provision (as
there was with companies) for such party to approach
the court on just and equitable grounds.
[31] The effect of restoration in terms of s 26(6)
of the CC Act was, by virtue of s 26(7), the same as in s 73
of
the 1973
Companies Act: a
corporation was ‘deemed to have
continued in existence as from the date of deregistration as if it
were not deregistered’
(see the
Kadoma
case
supra
,
which dealt specifically with this provision).
[32] Chapter IX of the CC Act (ss 61-81) was headed
‘
WINDING-UP’
.
Section 66(1) made various provisions of the 1973
Companies Act
applicable
to close corporations. Chapter IX dealt both with
voluntary
(s 67)
and compulsory liquidations
(s 68).
Among
the provisions of the 1973 Act made applicable to the winding up of
close corporations were ss 419(1) to (3) and s 420.
It
follows that a corporation’s existence, upon completion of a
winding up (whether voluntary or compulsory), came to an
end upon the
Registrar recording its ‘dissolution’ but that the court
could, as with companies, declare such dissolution
void.
Position as from 1 May 2011 - companies
[33] In terms of item 9 of schedule 5 to the 2008
Companies Act the
provisions of Chapter XIV of the 1973
Companies Act
remain
applicable to the winding up of companies, save that the key
sections in the said Chapter XIV do not apply to solvent companies

and save further that in the case of a conflict between the
provisions of Chapter XIV and those of the new Act in regard to
solvent
companies the provisions of the new Act prevail. At the risk
of over-simplification, therefore, one can say that in general
Chapter
XIV of the old Act applies to the liquidation of companies
unable to pay their debts while the provisions of the new Act in
general
regulate the winding up of solvent companies.
[34] Chapter 2 of the new Act (ss 11-83) deals,
according to its heading, with
‘
FORMATION,
ADMINISTRATION AND DISSOLUTION OF COMPANIES’
.
Part G of that Chapter (ss 79-83) is headed ‘Winding-up of
solvent companies and deregistering companies’.
[35] Section 79(1) states that a solvent company may be
‘dissolved’ voluntarily in terms of s 80 or by the
court
in terms of s 81.
[36] Section 82 is headed ‘Dissolution of
companies and removal from register’ while s 83 is headed
‘Effect
of removal of company from register’. Given the
importance of these provisions in this appeal, it is worth quoting
them in
full:
’
82.
Dissolution
of companies and removal from register.
(1) The Master must file a
certificate of winding up of a company in the prescribed form when
the affairs of the company have been
completely wound up.
(2) Upon receiving a certificate
in terms of subsection (1), the Commission must-
(a) Record the dissolution of
the company in the prescribed manner; and
(b) Remove the company’s
name from the companies register.
(3) In addition to the duty to
deregister a company contemplated in subsection (2)(b), the
Commission may otherwise remove a company
from the companies register
only if-
(a) the company has transferred
its registration to a foreign jurisdiction in terms of subsection
(5), or-
has failed to file an annual
return in terms of section 33 for two or more years in succession;
and
on demand by the Commission,
has failed to-
(aa) give satisfactory reasons
for the failure to file the required            annual

returns; or
(bb) show satisfactory cause for
the company to remain registered;            or
(b) the Commission-
has determined in the
prescribed manner that the company appears to have been inactive for
at least seven years, and no person
has demonstrated a reasonable
interest in, or reason for, its continued existence; or
has received a request in the
prescribed manner and form and has determined that the company-
(aa) has ceased to carry on
business; and
(bb) has no assets or, because
of the inadequacy of its assets, there is no reasonable probability
of the company being liquidated.
(4) If the Commission
deregisters a company as contemplated in subsection (3), any
interested person may apply in the prescribed
manner and form to the
Commission, to reinstate the registration of the company.
(5) A company may apply to be
deregistered upon the transfer of its registration to a foreign
jurisdiction, if-
(a) the shareholders have
adopted a special resolution approving such an application and
transfer of registration; and
(b) the company has satisfied
the prescribed requirements for doing so.
(6) The Minister may prescribe
criteria and procedural requirements that must be satisfied by a
company before it may be de-registered
in terms of subsection (5).
83.
Effect of removal of
company from register.
(1) A company is dissolved as of
the date its name is removed from the companies register unless the
reason for the removal is that
the company’s registration has
been transferred to a foreign jurisdiction, as contemplated in
section 82(5).
(2) The removal of a company’s
name from the companies register does not affect the liability of any
former director or shareholder
of the company or any other person in
respect of any act or omission that took place before the company was
removed from the register.
(3) Any liability contemplated
in subsection (2) continues and may be enforced as if the company had
not been removed from the register.
(4) At any time after a company
has been dissolved-
(a) the liquidator of the
company, or other person with an interest in the company, may apply
to a court for an order declaring
the dissolution to have been void,
or any other order that is just and equitable in the circumstances;
and
(b) if the court declares the
dissolution to have been void, any proceedings may be taken against
the company as might have been
taken if the company had not been
dissolved.
[37] I shall return to the scope and interpretation of
these provisions in due course but the following may be noted at this
stage:
[a] The winding up of solvent companies and the
deregistration of companies for administrative non-compliance or
inactivity are
now dealt with in the same part of the Act.
[b] Two additional bases for deregistration have been
introduced, namely an application by the company itself (i) because
it
has ceased to carry on business and either has no assets or there
is no reasonable probability of its liquidation because of the

inadequacy of its assets; or (ii) because the company has
transferred its registration to a foreign jurisdiction.
[c] On completion of a solvent company’s
winding-up the CIPC must not only record the dissolution but must
remove its name
from the register (s 82(2)).
[d] Removal of a company’s name from the
register is also what occurs when a company is deregistered for
administrative
non-compliance or inactivity or on application by the
company on one of the two new grounds just mentioned (s 82(3)).
[e] The concepts of dissolution and removal from
the register are brought together by the provision in s 83(1)
that a
company is dissolved as of the date its name is removed from
the register (except where the company’s registration is
transferred
to a foreign jurisdiction, in which case the company’s
name is removed from the register but it is not dissolved).
[f] Section 82(4) empowers the CIPC to ‘reinstate’
a company’s registration if its name was removed from the

register on any of the permitted grounds other than pursuant to the
company’s liquidation as a solvent company. The effect
of
‘reinstatement’ is not specified. In particular, it is
not stated that the company will upon reinstatement be deemed
to have
continued in existence as if it had not been deregistered.
[g] Section 83(4) applies to any company which has
been ‘dissolved’ and is in broadly similar terms to the
old
s 420, save that the relief which may be sought and granted
is not confined to an order declaring the dissolution void: the
court
may also grant ‘any other order that is just and equitable in
the circumstances’.
Position as from 1 May 2011 – close corporations
[38] In regard to the winding-up of close corporations,
s 66(1) of the CC Act now makes the laws mentioned in item 9 of
schedule
5 to the new
Companies Act applicable
. This means, generally
speaking, that Chapter XIV of the 1973 Act continues to apply to the
liquidation of close corporations unable
to pay their debts. This
would include ss 419-420 of the 1973 Act.
[39] In the case of the liquidation of solvent close
corporations, the amended s 67 of the CC Act now states that
Part G of
Chapter 2 of the new
Companies Act applies
. This means that
ss 79
,
80
,
81
,
82
(1),
82
(2) and
83
apply to the winding-up of
solvent close corporations.
[40] The provision for the liquidation of close
corporations by the court, previously contained in s 68 of the
CC Act, has
been repealed. Such liquidations are now governed either
by the laws contemplated in item 9 of schedule 5 to the new Act (ie
Chapter
XIV of the 1973 Act) in the case of insolvent corporations or
(via the amended s 67) by s 81 of the 2008
Companies Act.
[41
] Section 26 of the CC Act as amended, headed
‘Deregistration’, makes applicable to close corporations
the provisions
of ss 81(1)(f), 81(3), 82(3), 82(4) and 83 of the
new
Companies Act. The
reference to
ss 81(1)(f)
and
81
(3) is
puzzling since those provisions, which concern the winding up of
solvent companies by the court, have no relevance to administrative

deregistration nor does there seem to be any particular reason for
singling them out – they are in any event made applicable
to
the judicial liquidation of solvent corporations by the more general
terms of s 67 of the CC Act. The other provisions
listed in s 26
refer to the administrative deregistration provisions contained in
ss 82(3) and (4) of the new
Companies Act and
to the dissolution
provisions of
s 83
of the new Act.
[42] The cumulative effect of ss 66(1), 67 and 26
of the amended CC Act is thus that the statutory provisions relevant
to the
liquidation, dissolution, deregistration and revival of
companies apply equally to close corporations in so far as they have
any
bearing on this appeal.
Applicability of s 83(4)
[43] Against this background I now address the main
issue in this appeal, namely whether s 83(4) applies to a
company or close
corporation which has been deregistered in terms of
s 82(3). If one examines the provisions of the new
Companies Act
and
the amended CC Act, untrammelled by views derived from repealed
legislation, there is no difficulty in concluding that s 83(4)

applies as much to a company or corporation dissolved pursuant to
administrative deregistration as to one dissolved pursuant to
its
liquidation as a solvent company. The liquidation of solvent
companies and the administrative deregistration of companies are

dealt with together in Part G of Chapter 2 of the 2008 Act. In all
the cases dealt with in Part G the term used to denote the
termination of the company’s existence is ‘dissolution’,
and in terms of s 83(1) this occurs in all instances
on the date
the company’s name is removed from the register, whether
pursuant to s 82(2)(b) (in the case of liquidation)
or s 82(3)
(in the case of administrative deregistration). Deregistration and
removal of a company’s name from the register
are used
interchangeably in Part G and mean the same thing (see particularly
s 82(1)(b) and the opening words of s 82(3),
where the
removal of the company’s name as contemplated in the former
provision is described in the latter provision as deregistration).
If
s 83(1) applies to all companies dissolved by the removal of
their names from the register, there is no reason that s 83(4),

which forms part of the same section and applies ‘at any time
after a company has been dissolved’, should not apply
to a
company dissolved by the removal of its name from the register
pursuant to s 82(3).
[44] Not only is this the ordinary meaning of Part G but
its correctness is, I consider, conclusively established by two
further
considerations.
[45] Firstly, s 83(1) expressly excludes from
dissolution the case of a company whose name has been removed from
the register
on its own application because it has moved its
registration to a foreign jurisdiction. Now in such a case the
company’s
name is not removed from the register following its
liquidation but is removed in terms of s 82(3) following an
administrative
application in terms of s 82(5). If s 83(1)
applied only to companies dissolved pursuant to liquidation, it would
not
have been necessary for the lawmaker specifically to exclude
s 83(1)’s operation in the case of companies deregistered

in terms of s 82(5). The fact that this special exclusion was
created shows that s 83(1) applies in general to companies
whose
names have been removed from the register, and not only to those
deregistered pursuant to liquidation. If, as is thus clear,
s 83(1)
applies to all cases of removal from the register, the same must be
true of s 83(4).
[46] Second, it is permissible, in interpreting Part G
of Chapter 2 of the 2008 Act, to have regard to the amendments which
the
same Act introduced into the CC Act. In terms of s 67 of the
amended CC Act, Part G of Chapter 2 (including s 83) is made

applicable to the liquidation of solvent close corporations. But
crucially s 26 of the CC Act (as amended), by making ss 82(3)

and 83 applicable to close corporations, also renders s 83
applicable to a close corporation deregistered pursuant to s 82(3)

of the new
Companies Act. Section
26 of the new CC Act could only
sensibly have made s 83 applicable on the premise that s 83
applies to a close corporation
dissolved by deregistration in terms
of s 82(3). And if that is true for close corporations (which is
what this appeal actually
concerns) it must also be true for
companies.
[47] The court
a quo
, as I have already noted,
attached significance to the distinction between deregistration and
dissolution in the 1973
Companies Act. However
, this distinction in
the repealed legislation can be relevant only if there is a basis for
inferring that the provisions of the
new legislation intended to
maintain the distinction. I do not believe there is such a basis. The
2008
Companies Act is
not a codification of the 1973 Act. The new Act
is a complete re-writing of our corporate law. There are many new
provisions and
procedures. While some other provisions are,
unsurprisingly, similar to those in the old Act, there is in many
instances a change
in language. The organisation of the new Act and
the arrangement of its provisions are completely different. These
changes, insofar
as they bear on the present appeal, will be
apparent, I think, from my summary of the relevant provisions of the
old and new legislation.
[48] In enacting provisions relating to deregistration,
dissolution and revival, the lawmaker had various options available
to it.
In terms of the old
Companies Act deregistration
and
dissolution were dealt with separately and in Chapters far removed
from each other. In the case of deregistration, an interested
party
could apply for restoration either to the court or to the Registrar,
on varying grounds. In the case of close corporations
an interested
party could seek restoration only from the Registrar, but on wider
grounds than the Registrar could grant when dealing
with companies.
Thus even in the existing legislation there was no single template.
And, of course, the lawmaker, in drafting the
new Act, could devise a
solution which departed from the differing solutions already
contained in the old
Companies Act and
unamended CC Act. That, in my
view, is precisely what the lawmaker decided to do. The lawmaker
brought the concepts of deregistration
and dissolution together by
establishing dissolution as the juristic effect of deregistration and
by then borrowing and modifying
the provisions of s 420 which
had previously applied to dissolution under the 1973 Act. The
important modification is that
the court is now not confined to
making an order declaring the dissolution void; it may make any other
order that is just and equitable
in the circumstances. (Although the
references in s 83(4)(a) to a declaration of voidness and to any
other order that is just
and equitable are linked by the word ‘or’,
I do not believe that the court can grant only one or the other. An
order
that is just and equitable may entail a declaration that the
dissolution is void together with ancillary relief.)
[49] I should add that the notion that a provision in
the form of the old s 420 applied only to a company dissolved
pursuant
to liquidation and was inapplicable to a company whose
existence had been terminated by administrative deregistration is by
no
means as obvious or self-evidently correct as is sometimes
supposed. In England that view was expressly rejected by Wynn-Parry J

in
Re Belmont & Co Ltd
[1951] 2 All ER 898
(Ch), where he
held that where a company had been deregistered by the Registrar an
interested party had a choice of remedies, namely
an application in
terms of s 352(1) of the 1948
Companies Act (the
equivalent of
our old
s 420)
or an application in terms of
s 353(6)
(the
equivalent of our old
s 73(6)).
This decision was followed by
Megarry J in
Re Test Holdings (Clifton) Ltd
[1969] 3 All ER
517
(Ch) at 521I-522C. It appears from
Test Holdings
that
in the period between
Belmont
and
Test Holdings
there
were many revivals of deregistered companies on this basis. This
practice continued after
Test Holdings
(see, for example,
Re
Thompson & Riches Ltd
[1981] 2 All ER 477
(Ch)). When the
1985 English
Companies Act replaced
the 1948 Act the same view was
maintained, namely that upon administrative deregistration an
interested party seeking the company’s
revival could choose
between s 651 and s 653 (see
Allied Dunbar Assurance plc
v Fowle
[1994] 2 BCLC 197
at 202b-c; see also
Gower and
Davies’ Principles of Modern Company Law
7
th
Ed
at 868-870). In the current English Companies Act of 2006 the two
different judicial avenues have been replaced with [a] an

administrative process for revival in certain circumstances; and
[b] a single judicial procedure for revival applicable to
all
cases where a company has been dissolved, whether by administrative
deregistration or pursuant to a liquidation (
Gower and Davies’
Principles of Modern Company Law
9
th
Ed paras 33-62 to
33-65).
[50] The question whether our old
s 420 could, as in England, be used as an alternative to s 73(6)
never arose for decision
in any reported judgment as far as I am
aware. The leading commentaries opined that s 420 was confined
to dissolution following
upon liquidation, and practice seems to have
followed that view, though there were contrary opinions.
1
The argument in favour of the view
adopted in
Belmont
and
Test
Holdings
was
stronger in England than in South Africa because in s 353(5) of
the English Act of 1948 it was expressly stated that upon
publication
of deregistration in the
Gazette
the company would
be ‘dissolved’
2
whereas the word ‘dissolution’
was not used in our s 73; and of course in the 1948 Act in
England the two forms
of judicial procedure existed side by side in
the same part of the Act. But this very difference shows why the 1973
Act is not
a safe guide to the interpretation of s 83(4) of our
new Act: the word ‘dissolution’
is
now used in relation to the
deregistration of companies in s 83(1); dissolution pursuant to
liquidation and pursuant to administrative
deregistration are now
dealt with together; and there is now a single judicial remedy. The
lawmaker here, as in England, evidently
decided in the new Act to
substitute the differing judicial remedies in ss 73(6) and 420
with a single remedy applicable to
all cases of dissolution, such
remedy existing alongside the administrative remedy in s 82(4).
[51] In
Peninsular
Eye Clinic (Pty) Ltd v Newlands Surgical Clinic Pty Ltd & Others
[2012]
3 All
SA 183
(WCC) Binns-Ward J said in para 6 that the 2008 Act contained
no provision for the restoration of a company to the register by
order of the court. It seems that the judge did not receive
submissions on nor was he called upon to consider the scope of
s 83(4).
To the extent that his statement in para 6 was intended
to convey that s 83(4) does not apply to a company deregistered
by
the CIPC in terms of s 82(3) I am in respectful disagreement.
[52] It follows, in my view, that the court
a quo
erred in concluding that s 83(4) did not apply to a company or
close corporation deregistered for reasons other than liquidation.
In
my opinion, s 83(4) applies in all cases where a company or
corporation’s name has been removed from the register
in terms
of Part G of Chapter 2 and where the company or corporation has as a
result been dissolved. This includes deregistration
on any of the
grounds set out in s 82(3). Where a company or corporation has
been deregistered by the CIPC in terms of s 82(3)
rather than in
terms of s 82(2)(b), an interested party may either apply to the
CIPC for restoration in terms of s 82(4)
or to the court in
terms of s 83(4). Particularly where the interested party finds
it impossible or practically difficult
to comply with the prescribed
requirements relating to restoration in terms of s 82(4), an
application to court in terms of
s 83(4) is available as an
alternative.
[53] The above conclusion accords with that of Muller AJ
in a recent unreported judgment which Mr Vivier drew to our
attention,
Du Rand NO & Another v The Companies and
Intellectual Property Commission of South Africa
Case 71624/2012
NGHC (see paras 6-23). Because of the practical importance of the
issue and because we will be overruling a considered
judgment of a
judge of this division, I have dealt more fully with the matter than
did Muller AJ but his reasoning is ultimately
similar to mine.
The appeal
[54] Having resolved the main issue, I now turn to the
remaining questions relevant to the appeal.
[55] Since Voigro was deregistered in terms of s 26(2)
of the CC Act prior to its amendment and not in terms of s 26 of

the amended CC Act read with s 82(3) of the 2008 Companies Act,
a question arises whether s 83 of the 2008 Companies
Act is
applicable. In
Peninsular Eye Clinic supra
Binns-Ward J had
occasion to consider whether a company deregistered in terms of s 73
of the 1973 Companies Act could be reinstated
to the register by the
CIPC in terms of s 82(4) of the 2008 Act. He held that this was
indeed the case (para 7). He based
this conclusion on the definition
of ‘company’ in para (c) of the 2008 Act, namely ‘a
juristic person that, immediately
before the effective date –…
was deregistered in terms of the Companies Act, 1973 (Act 61 of
1973), and has subsequently
been re-registered in terms of this Act’.
[56] This reasoning is not applicable without more in
the present case for at least two reasons. Firstly, para (c) of the
definition
of ‘company’ refers to a company
‘re-registered’ in terms of the new Act. The notion of
re-registration
is more obviously applicable to the ‘reinstatement’
of a company to the register by the CIPC in terms of s 82(4)

than to a declaration by the court that the company’s
dissolution is void in terms of s 83(4). Second, we are
concerned
in the present case with a close corporation, not a
company. The amended CC Act does not contain a definition of ‘close
corporation”
comparable to the definition of ‘company’
in the new Companies Act.
[57] On the other hand, it could certainly not have been
the intention of the lawmaker that there would, as from 1 May 2011,
be
no means of reviving a close corporation deregistered prior to 1
May 2011. Section 83 does not expressly refer to a dissolution

effected pursuant to s 82. In order to avoid absurd and unjust
results, it is necessary to interpret s 83(4) as applying
inter
alia
to any company whose existence came to an end by
deregistration or dissolution under the 1973 Companies Act (other, of
course,
then a company wound up as insolvent, in which case s 420
of the old Act continues to apply). A company so deregistered or

dissolved under the old Act can properly be described as one which
was ‘dissolved’ for purposes of s 83(4). In

particular, removal from the register in terms of s 73 brought
the company’s existence to an end (
Miller & Others v
Nafcoc Investment Holding Company Ltd & Others
2010 (6) SA
390
(SCA) para 11). The word ‘dissolution’ as applied to
a company conveys in its ordinary meaning the termination of the

company’s existence. The same is true for a corporation by
virtue of s 26 of the amended CC Act read with s 83(4).
[58] The power in s 83(4) to
declare a dissolution void is not a review power to be exercised only
upon proof of some irregularity
or unlawfulness in the act of
removing the company’s name from the register. On the contrary,
where the company’s dissolution
is the result of a reviewable
irregularity the exercise of the s 83(4) power is not needed
since the court’s ordinary
power of review is available (cf
Pieterse NO v The
Master & Another
2004
(3) SA 593
(C) at paras 13-17). Like the new s 83(4), the power
in the old s 420 and similarly worded provisions was not limited

to any particular grounds (see
Ex
Parte Liquidator Natal Milling Co (Pty) Ltd
1934
NPD 312
at 313 ). A common basis for exercising the power was the
discovery of an asset which had not been dealt with (
Goodman
v Suburban Estates Ltd (In Liquidation) & Others
1915
WLD 15
at 25-26;
Ex
Parte Liquidators Lime Products (Pty) Ltd
1942
CPD 402).
The court’s wide discretion was guided by the
interests of justice in all the circumstances (
In
re Spottiswoode Dixon & Hunting Ltd
[1912]
1 Ch 410
at 415-416). Although the new s 83(4) is no longer
confined to dissolution pursuant to liquidation, there is no good
reason
not to be guided by earlier case law in regard to the
circumstances making it appropriate to exercise the power. I have no
doubt
that Voigro’s revival in terms of s 83(4) would be
just and equitable. It was dissolved while still owning a valuable

property. Voigro has at least two unpaid creditors, namely the
Municipality and Absa. The latter held a mortgage bond over the

property at the time of Voigro’s dissolution. Voigro’s
dissolution was not the fault of the Municipality or Absa. Absa

launched the current proceedings promptly after learning of Voigro’s
dissolution.
[59] In its notice of motion Absa did
not (at least expressly) seek an order declaring Voigro’s
dissolution to have been void
(though it did squarely base its
application on s 83(4)). What Absa sought was an order
reinstating Voigro’s registration.
In terms of s 83(4)(a)
the court may grant any order that is just and equitable. I am
inclined to think that if the removal
of a company’s name from
the register is the event bringing about its dissolution, an order
that the dissolution is void
would necessarily imply that the
company’s name must be restored to the register (cf
Belmont
at 901D-E;
Test
Holdings
at
520C-D). If it were otherwise, how could such a revived company
thereafter again be dissolved (since a company can only be dissolved

by the removal of its name from the register)? However, I am
reluctant to use the word ‘reinstate’ (the word used in

s 82(4)) in case it should be thought to imply some effect not
intended by the court order. I would rather use ‘restore’.
[60] I thus consider that the primary
relief to be granted to Absa should be an order declaring Voigro’s
dissolution void
with a consequential direction that the CIPC restore
Voigro’s name to the register of close corporations. Since the
order
is being granted in terms of s 83(4), not s 82(4),
the prescribed requirements relating to reinstatement under s 82(4)

do not have to be met. Indeed, it is precisely because of the
practical difficulty in meeting these requirements that Absa has

approached the court rather than the CIPC. The CIPC will thus be
obliged, by the court order, to restore Voigro’s name to
the
register without compliance with further procedures; in particular,
the CIPC will not be entitled to insist that outstanding
annual
returns be lodged or that prescribed fees are paid. (In
Du
Rand supra
at paras
24-34
Muller AJ
expressed doubts about the validity of regulation 40(6) insofar as it
relates to reinstatement by the CIPC in terms of
s 82(4). He
also said that compliance with regulation 40(6) could not be a
‘condition precedent’ to a court order
under s 83(4)
(para 34). It is not clear to me whether the learned judge expressed
the latter view as a matter of interpretation
or as a reason why in
his view regulation 40(6) was
ultra
vires.
I prefer to
express no opinion on the validity of regulation 40(6). In my view
regulation 40(6) simply does not, on a proper construction
of the
regulations in their statutory context, apply to orders of
reinstatement made under s 83(4), though a court could no
doubt
in an appropriate case make an ancillary order under s 83(4)
requiring returns to be filed if it was just and equitable
to do
so.)
[61] The ancillary declarations sought by Absa concern
the assets and liabilities of Voigro. I have already referred to
authority
concerning the usual effects of a bare order declaring a
dissolution void. The company is re-vested with the assets and
liabilities
it had immediately prior to its dissolution but nothing
done by the company and no action taken against the company during
the
period of dissolution is of any effect and no validity or life is
breathed into such conduct or action by the making of the order.
[62] The declaration sought by Absa
that Voigro’s assets will no longer be
bona
vacantia
accords
with the usual effect of a declaration that the dissolution is void.
It can do no harm to spell this out in the order though
it is
probably unnecessary.
[63] Absa seeks an overlapping
declaration to the effect that the assets will vest in Voigro with
retrospective effect to the date
of deregistration as if Voigro had
not been deregistered. I have no difficulty with an order that the
assets will vest in Voigro
– that is the intended result of
declaring the assets to be no longer
bona
vacantia
. I do not
think, however, that the assets should be stated to vest in Voigro
‘with retrospective effect’ and ‘as
if [Voigro] had
not been deregistered’. I do not know precisely what these
phrases are intended to convey. If they are intended
to mean that
Voigro will be deemed to have had some existence during the period of
its dissolution, that would be contrary to the
ordinary effect of a
declaration that the dissolution is void. While the court has the
power to make any other order which is just
and equitable, and while
this power may perhaps include a power to validate things that
happened during the period of dissolution,
I do not think it has been
shown in this case that there is need for such an order. During the
hearing of the appeal Mr Vivier
indicated, in response to a question
from the court, that Absa did not press for an order which would
validate anything done during
the period of deregistration.
[64] The requested declaration to the effect that the
liabilities of Voigro ‘continue’ and may be enforced is
in principle
a natural consequence of the primary declaration of
voidness of the dissolution but again the word ‘continue’
is apt
to confuse. What will re-vest in Voigro in the ordinary course
are the liabilities it had immediately prior to its deregistration
on
24 February 2011. It does not appear that Voigro purported to assume
any liabilities after that date and it has not been shown
to be just
and equitable to validate purported liabilities which Voigro may have
assumed during the period of dissolution. Again,
Mr Vivier has not
pressed for any validating order.
[65] Absa also sought an order
declaring the sale in execution to Nikkel to have been null and void.
The Sheriff and Nikkel did
not oppose that order on the return day. I
think the sale in execution was indeed null and void. Voigro did not
exist at the time
the Municipality attached the property in July 2011
or at the time the Sheriff purported to sell the property in October
2011.
At the time of the sale in execution the property belonged to
the State as
bona
vacantia
, not to
Voigro. As I have said, the order declaring the dissolution void does
not without more retrospectively validate these actions.
[66] Although no order has been
sought in that regard, I should perhaps make clear that the order to
be granted in this appeal does
not validate the default judgment
which Absa purported to take against the dissolved Voigro or the
liquidation proceedings which
Absa instituted against Voigro in April
2012. Since Voigro did not exist at the time the default judgment was
granted or at the
time the liquidation proceedings were instituted
and the provisional order granted, the default judgment is a nullity
as are the
liquidation proceedings and the provisional order.
3
Mr Vivier accepted that this would be
the position and did not ask for a validating order.
[67] In its notice of motion Absa sought an order that
Voigro should upon its revival be liable for the costs of the
application.
That seems to me to be a just and equitable order in the
circumstances. I do not think, however, that any order should be made
in regard to the costs of the appeal. The fact that an appeal was
necessitated was not the consequence of anything done by Voigro
or
its controller. Mr Vivier, after taking instructions, indicated that
Absa did not seek a costs order in respect of the appeal.
Conclusion
[68] I would thus make the following order:
(a) The appeal succeeds.
(b) The order of the court
a quo
is set aside and
replaced with an order in the following terms:
(i) The dissolution of the close corporation known as
Voigro Investments 19 CC with registration number 2004/055360/23
(‘Voigro’),
which dissolution occurred upon Voigro’s
deregistration as a close corporation on 24 February 2011 in terms of
s 26(2)
of the
Close Corporations Act 69 of 1984
as it then
read, is declared void in terms of
s 26
of the said Act 69 of
1984 as amended read with
s 83(4)
of the
Companies Act 71 of
2008
.
(ii) The first respondent is directed to restore
Voigro’s name to the register of close corporations.
(iii) The assets of Voigro immediately prior to its
dissolution on 24 February 2011 are declared to be no longer
bona
vacantia
and are re-vested in Voigro.
(iv) The liabilities of Voigro immediately prior to its
dissolution on 24 February 2011 are declared to re-vest in Voigro.
(v) The sale in execution on 14 October 2011 of the
immovable property known as Erf 506 Knysna by the Sheriff of the
Magistrate’s
Court Knysna to Nikkel Trading (Pty) Ltd is
declared null and void.
(vi) Voigro shall, upon its restoration to the register,
be liable to pay the costs of the applicant in bringing this
application.
_____________________
ROGERS J
[69] I concur and it is so ordered
_____________________
YEKISO J
[70] I concur.
_____________________
CLOETE J
APPEARANCES
For Appellant: P VIVIER
Instructed by:
Fourie Basson & Veldtman
Cape Town
For Respondents: No appearances
1
See,
for example, RC Williams
Disinterring a
Body Corporate: Sections 73(6) and 420 of the Companies Act 1973
(1990) 107
SALJ
610
at 615-616.
2
Section
353(3) of the 1948 Act is quoted in
Thomson
& Riches supra
at 479b-c.
3
It
appears from the case number on the default judgment that the
summons on which Absa’s default judgment was granted was

issued before Voigro’s deregistration. It is unnecessary in
this judgment to determine whether the effect of declaring
the
dissolution void is that those proceedings may now be continued or
whether Absa is required (if it seeks a judgment) to issue
a fresh
summons. No specific relief in that regard was sought in the notice
of motion and, as noted, Mr Vivier did not seek a
validating order.