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This judgment was handed down electronically by circulation to the parties’ representatives
by email. The date and time for the hand-down of the judgment is deemed to be 7 August
2026 at 12h30
JUDGMENT
MONENE AJ
Introduction
[1] The applicant, a banking institution, brought this motion proceedings against
the respondent, a juristic person duly registered in terms of applicable legal
instruments, seeking to have the latter provisionally wound up.
[2] The application, brought in terms of section 344(f) and 344(g) of the
Companies Act 61 of 1973(“the Act”), is opposed by the respondent.
[3] The basis of the application is the creditor-debtor relationship between the
parties as well as the consequent obtaining of a order by the applicant against
the respondent which judgement remains unsatisfied. The said order per
Mashile J dated 4 October 2022 was for payment of monies totaling
R2 174 117,50 and interest thereon arising from four separate claims which had
been premised on unpaid loans previously granted to the respondent by the
applicant.
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[4] It is posited by the applicant that the respondent is since 2022 unable to
honour the order and pay in terms thereof and is thus factually and commercially
insolvent when assessed through the legal prism of section 344(f) read with
section 345(1)(a) of the Act, be deemed insolvent.
[5] Sales in execution in pursuit of satisfying the judgement debt, which
curiously included Mr Daniel Temba Mabunda (“Mr Mabunda”) , the
respondent’s apparent surety, in his personal capacity and paltry offers far
below a court ordered reserve price had done virtually nothing to defray or
reduce the respondent’s indebtedness to the applicant , it is posited by the
applicant.
[6] In opposition of the application the respondent hoisted being served with the
application at a wrong address , failure to serve the respondent’s directors,
employees and/or trade unions with the application and the founding affidavit
deponent’s lack of authority to act on behalf of the appellant as preliminary
pitfalls fatal to the application. It then while it acknowledged the judgement
against it referred to above, denied insolvency, denied the materiality or
existence of some other judgements not germane to the application per se
although alleged by the applicant as having been obtained by a third party
against the respondent, alleged that it has enough assets which outrun liabilities
and suggested that it had paid some deposits in the sales in execution pursuant
to Mashile J’s judgement.
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The facts in sum
[7] On 4 October 2022 the applicant obtained a money payment order per
Mashile J against the respondent for four separate claims all totaling
R2 174 117,50. That order still standing and remaining in force, the facts
leading thereto are not relevant in the determination of the issue before me.
[8] That order also declared the respondent’s immovable property executable
in terms of uniform rule 46, fixing the reserve price thereof at R612 338.69. The
sheriff was also authorized to execute a writ.
[9] In the wake of the judgement remaining unsatisfied despite demand by the
applicant a sale in execution was held. That sale in execution, according to the
applicant, yielded nothing of value in relation to the debt owed. According to the
respondent some unspecified deposit amounts pursuant to the sale in execution
were paid, ostensibly by its surety, Mr Mabunda.
[10] The applicant then brought this application seeking, as per the notice of
motion, a provisional liquidation order against the respondent.
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Preliminary matters
[11] Atop the respondent’s supra -stated “points in limine”, the applicant has
added its on to the effect that owing to the unexplained late filing of the
respondent’s answering affidavit and manifestly late condonation application
uploaded only a day before the matter served before this court, I should refuse
to factor the answering affidavit into this judgement and essentially treat this
application as unopposed.
[12] I have decided to dismiss all the “in limine” points raised by the parties
some for lack of substance and all in the interests of justice. Without detaining
myself unnecessarily with their unhelpful and dilatory nature, I decline to uphold
neither regard being had to the following considerations:
12.1 The lack of authority to depose to the founding affidavit or “act on behalf
of the applicant” (whatever that means) is a not only clothed in vagueness but
is unnecessarily dilatory and unavailable in la w. The law is trite that what can
lend itself to challenge is authorization to institute proceedings and not per se
act on behalf of as in perhaps deposing to an affidavit. I do not understand the
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respondent’s point, inelegantly pleaded as is. to be attacking authority to
institute proceedings. Beyond that, the balance of all papers before me
conclusively persuades me that there is no way the deponent could be engaging
on a frolic of her own unbekno wn to Investec Bank. This type of clasping of
straws raising by raising technical dilatory clearly unmeritorious points in the
face of clear evidence that they cannot be factually correct has never washed it
with this court.
12.2 The failure to serve the respondent at its “proper” address by sheriff makes
no sense to me when raised by a party who has since opposed the matter
proving that it has indeed become aware of the application. The main purpose
of service is, to me, to make a party or parties having direct and substantial
interest aware of proceedings and give such party or parties adequate
opportunity to formulate and prosecute an approach to the litigation mooted . It
seems to me ludicrous and vexatious for a party to come to the litigation party
fully, duly oppose a matter and then argue that the matter be not heard because
it became aware irregularly or in a manner it dislikes . Why go back to knock
properly when you are already comfortably seated in the room? Why engage in
some dilatory gymnastics or re-invention of the same wheel and unnecessarily
delay the hearing of a matter at grave prejudice to the parties bottlenecking
court rolls when you are already in attendance and ready? Beyond that, the
point taken is defeated by the incontrovertible averment by the applicant that
service was effected at the respondent’s address as appears on the companies
register.
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12.3 The point of no service on other possible interested parties cannot stall this
court from hearing the matter as the relief sought is provisional and whatever
provisional order may be granted would be served on all other possibly
peripherally affected parties whose existence must not be assumed. The
respondent has averred the existence of employees or trade unions in the most
general and unconvincing manner such that justice cannot, where, if they exist,
they can ultimately be made aware to make inputs prior finalization, afford to be
stalled on speculative suppositions of their existence.
12.4 This court is no adherent to muffling any available voice from being heard
in the determination of an issue. While the manifestly late and understandably
not responded to condonation application uploaded a day before the hearing
of this application is virtually not before me, in circumstances where the
answering affidavit was very late, the fact is, beyond the need for compliance
with rules which must never be flippantly discounted and perhaps the often
itching need to be overly pedantic, no prejudice is visited upon anybody in
admitting the answering affidavit filed late. The applicant has been able to reply
adequately to the late answering affidavit, the court has perused the full set of
affidavits, and the defaulting party can be reprimanded with an appropriate
costs order to mitigate non -compliance. In that way our courts, and this court
too, shall obviate unnecessarily appearing to be religiously zealous about
compliance with the rules even where discretionary condonation is patently in
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the interests of justice due regard being h ad to the trite audi alteram partem
rule. At some point the over-technical kicking of the can down the road resulting
from upholding unhelpful points in limine which ultimately strangles court rolls
even of appeal courts on peripheral points must, in my view, come to an end.
12.5 This court has in many other instances expressed its lack of appetite for
upholding non-dispositive dilatory points in limine which although appearing to
make lawyering erudite and interesting do nothing to advance timeous access
to justice and effective use of scarce judicial resources as matters are routinely
removed by the proverbial kicking of the can down the road against the interests
of justice. It stretches incredulity how in most matters’ parties exchange blows
in each arguing for the dismissal of condonation pleas of the other while at the
same time seeking their own condonations to be upheld.
[13] Having thus dismissed all “points in limine” raised, I proceed to identify the
issue, evaluate the parties’ submissions on the issue through the prism of
applicable law and make findings.
The issue and parties’ key contentions thereon
[14] The issue is crisp. It is whether the respondent has committed an act of
insolvency worthy of attracting, at the very least, a provisional winding up order
at this stage.
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[15] In the main, the applicant points to the respondent’s failure to satisfy the
Mashile J order as a basis of its contention for the order it seeks.
[16] As I understand the respondent’s defence , it shields itself from the order
sought on the following propositions:
16.1 That it is commercially solvent and that therefore our current dual
legislative framework to corporate dissolution, ousts the applicability of the old
companies Act of 1973.
16.2 That the applicant’s reference to section 344(g) of the 1973 Act is
misconceived as that section applies to foreign juristic persons registered in
South Africa.
16.3 That the application is an abuse of court process in violation of the
Badenhorst rule in that the applicant is using it to enforce a debt disputed on
substantial grounds.
16.4 That the respondent has tendered an unconditional payment of R1.1
million towards payment of the judgement debt.
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16.5 That the debt amount upon which the application is premised is disputed
as the applicant holds R170 000.00 from the sale in execution debt and holds
covering bonds which may by ordinary execution be used to cover the debt.
Application of relevant legal instruments to the facts
[17] Section 344(f) of the Act, on which the applicant primarily relies in this
application, provides that a court may wind up a company if the company is
unable to pay its debt.
[18] Inability to pay debts is, in terms of section 345(1)(a), deemed, if post a
letter of demand from a creditor for an amount not less than hundred rands, the
debtor company fails to pay the monies demanded or to otherwise satisfy the
debt.
[19] On the facts in casu I find there to be no dispute that the respondent is a
judgement debtor in amounts far more than hundred rands, that payment
thereof is since October 2022 due and duly demanded in terms of section
345(1)(a) of the Act and that the debt remains unsatisfied. What I find to be the
nub of the respondent’s protest, more so in the heads of argument than in the
regrettably scantily glad answering affidavit, is that the judgement debt has to
some extent been reduced(although definitely to nowhere near less than
hundred rands), that it is now intending to pay, that there is property that may
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be realised by the applicant towards satisfying the debt, that the respondent is
commercially solvent and that the application is brought in bad faith as a debt
collection mechanism.
[20] In Standard Bank of South Africa Ltd v Re -Bay Logistics CC 2013(2)
SA 295(KZD)(“Re-Bay Logistics”) at para 27 it was held as follows:
“ There has been judicial debate about whether, for the purposes of section
344(f) of the Old Companies Act, it is possible for the court to conclude, upon
evidence of actual insolvency, that a company is ‘unable to pay its debts’.
Certainly, proof of the ac tual insolvency of a respondent might well provide
useful evidence in reaching the conclusion that such company is unable to pay
its debts, but that conclusion does not necessarily follow. On the other hand, if
there is evidence that the respondent company is commercially insolvent (i.e
cannot pay its debts when they fall due),that is enough for a court to find that
the required case of section 344(f) has been proved. At that level, the possible
actual solvency of the respondent company is usually only relevant to the
exercise of the court’s residual discretion as to whether it shou ld grant a
winding-up order or not, even though the applicant for such relief has
established its case under section 344(f).”
[21] In my view, the exposition of the law in Re-bay Logistics referenced
immediately supra is as legally unassailable as it is most apt in the issue for
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determination in this matter. Proven failure to pay one’s debts when due despite
lawful demand is, in terms of section 344(f) read with 345(1) of the old Act,
incontrovertible proof of insolvency which unmistakably attracts winding up.
That case is, prima facie, adequately met on the facts before me.
[22] The question is whether the respondent has mounted any defence
available in law to persuade this court to use its residual discretionary powers
to refuse to grant a winding up order. Asked differently, the question is whether
the respondent has proven commercial solvency as argued, has proven
violation of the Badenhorst rule and/or has proven lack of indebtedness to the
applicant or reduced liability to any meaningful noteworthy extent. I am not
persuaded that any of the respondent’s protestations offer it sufficient insulation
from a provisional liquidation order regard being had to the following
considerations:
22.1 There is on the facts no bona fide dispute of indebtedness by the
respondent. All there is in the meagre and threadbare answering affidavit is an
unsubstantiated glib suggestion that there are some unspecified assets at the
applicant’s disposal capable of satisfying the debt to some speculative extent.
All that is alleged without substantiation from a position of speaking from both
sides of the mouth as despite saying there is enough to defray the debt there is
a promise or tender to pay the full amount in the future. It is trite dating far back
from authorities such as Meyer NO v Bree Holdings (Pty) Ltd 1972(3) SA
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353(T) that where prima facie indebtedness, as in the judgement debt in casu,
and failure to pay is patent, the respondent bears the onus to show a bona fide
dispute based on reasonable grounds. In Gap Merchant Recycling CC v Goal
Reach Trading 55 CC 2016(1) SA 261(WCC) at para 26 the court correctly
stated the law, germane to the respondent’s attempted defences, inter alia, as
follows:
“ I see no reason for adopting a different approach when considering, in
liquidation proceedings, whether the applicant’s claim is bona fide disputed on
reasonable grounds. Bona fides relate to the Respondent’s subjective state of
mind, while reasonableness h as to do with whether, objectively speaking, the
facts alleged by the respondent constitute a defence in law. Two elements are
nevertheless interrelated, because inadequacies in the statement of the facts
underlying the alleged defence may indicate that the respondent is not bona
fide in asserting those facts…the objective requirements of reasonable grounds
for a defence is not met by bold allegations lacking in particularity…bold
allegations lacking in particularity are unlikely to be sufficient to persuade the
court that the respondent is bona fide.”
22.2 To the respondent’s bold but bald assertion that it remains solvent as it
claims without any substantiation that its assets exceed it liabilities, I can do no
more than throw a statement of law, with which I fully align myself, from Absa
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Bank Ltd v Reebokskloof (Pty) Ltd and Others 1993(4) SA 436(C) at para
440 I which went as follows:
“…It matters not that a company’s assets, fairly valued, far exceeds its liabilities;
once the court finds that it cannot do this, it follows that it is entitled to and
should, hold that the company is unable to pay its debts within the meaning of
section 345(1)(c) as read with section 344(f) of the Companies Act 61 of 1973,
and is accordingly liable to be wound up.”
22.3 Unpersuaded by the respondent’s call for some time out by hoisting the
spectre of a tender of payment in the future, I align myself with a view expressed
a long time ago in F Chandlers Limited v Dealesbil Hotel (Pty) Ltd 1954 (4)
SA 748(O) at 749 to the effect that there needs to be adequate proof that there
are liquid assets or assets readily available for realisation to pay of a debt for a
winding up application to be defeated. That view which is applicable still, in my
view, particularly when only a provisional order is, as in casu, sought, was
expressed in the following words which I deem worthy of restating:
“…in exercising its powers, the court will have regard to the fact that ‘a creditor
who cannot obtain payment of his debt is entitled as between himself and the
company ex debitio iustitae to an order if he brings his case within the Act. He
is not bound to give time.”
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22.4 To the respondent’s unsubstantiated and vague protest that part of the
debt has been paid or is capable of being set off from realisable assets available
to the applicant and further that certificates of balance misstate the extent of its
indebtedness, I can only state that, even if it had substantiated partial payment
such would have been no defence. In that reasoning I am in the good company
of Malan J in Body Corporate of Fish Eagle v Group Twelve Investments
2003(5) SA 414(W) at 428 B-C where he held as follows:
“The deeming provision of s345(1)(a) of the Companies Act creates a rebuttable
presumption to the effect that the respondent is unable to pay its debts…If the
respondent admits a debt over R100 even though the respondent’s
indebtedness is less than the amou nt the applicant demanded in terms of
section 345(1)(a) of the Companies Act, then on the respondent’s own version,
the applicant is entitled to succeed in its liquidation application and the
conclusion of law is that the respondent is unable to pay its debts.”
22.5 While I appreciate and am indebted to counsel for the respondent’s lucid
exposition of the Badenhorst rule as conceived in Badenhorst v Northern
Construction Enterprises (Pty) Ltd 1956(2) SA 346(T) and as consistently
applied and signatured into our law by subsequent decisions of the SCA, I find
there to be no basis for its application in casu given the factually emaciated
answering affidavit of the respondent. As already lamented elsewhere in this
judgement supra, the respondent’s answering affidavit answered nothing. It
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does not provide a bona fide defence and falls woefully short of providing any
facts, let alone proof that the applicant in casu who a judgement creditor since
October 2022 is abusing liquidation proceedings to effect debt collection.
23. I agree with the respondent that the applicant’s reference to section 344(g)
of the Act is misplaced but that, as demonstrated above, in no way subtracts
from the solidity of the applicant’s case made out in terms of sections 344(f) and
345(1) of the old Companies Act.
[24] In its Notice of Motion, the applicant prayed for a provisional order. In
submissions before me counsel for the applicant submitted that the notice of
motion’s prayers do not curb my discretion to order a final order. Given the
earlier finding of this court that non-service of alleged employees and trade
unions (no proof that they actually exist was advanced beyond the respondent’s
bald and bold say so) can be cured in between now and a possible final order,
I am disinclined to make a final order. If such parties exist, they deserve to be
given an ear before a final order is made.
Costs
[25] While I again note and appreciate the well-argued case for the respondent
by counsel for the respondent, I cannot ignore the nothingness of the
respondent’s answering affidavit which is not only an answer in name only but
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was also filed manifestly late as alluded to in condonation of its admission
supra. The answering affidavit is a displeasing document in the extreme and
should ordinarily attract the sternest of frown from this court such that a costs
order with a measure of punishment would, in my view, the order to be granted
being only provisional notwithstanding, have been called for.
[26] The applicant has however proposed that costs of this application be costs
in the application. I shall oblige the successful party.
Order
[27] All the above-stated considered, I make the following order:
27.1 The respondent, D and M Mabunda Inc, is hereby placed under provisional
winding up.
27.2 All persons who have a legitimate interest are called upon to put forward
their reasons why this court should not order the final winding -up of the
respondent on 09 October 2026, at 10h00
27.3 This provisional order of liquidation must:
27.3.1 be served on the respondent by sheriff,
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APPEARANCES
Heard on : 05 May 2026
Judgment delivered on : 07 August 2026
For the Applicant : Adv J Eastes
: Instructed by: Delberg Inc Attorneys
: Tel: 012 361 5001
: Email: liana@delberg.co.za
For the Respondent : Adv. G P Maluleke
Adv. V Chauke
: Instructed by: D M Mabunda Inc
: Tel: 013- 880 2011
: Email: danielmabunda73@gmail.com