IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
Case Number: 2026-032276
In the matter between:
PLOT 432 SAXENBURG PARK CC Applicant
(Registration No.: 1999/069365/23)
and
KALAHARI NAMAQUA KAROO (PTY) LIMITED Respondent
(Registration No.: 2018/048292/07)
Coram: Janisch AJ
Heard: 31 August 2026
Delivered: 9 September 2026
Summary: Provisional liquidation of c ompany – inability to pay debts in terms of
s344(f) read with ss345(a) and (c) of Act 61 of 1973 – test for establishing locus
standi and ground of winding -up at the provisional stage – applicant establishing
these requirements – no basis to exercise discretion against making a winding -up
order – applicant’s non-compliance with Rule 41A on these facts not precluding relief
or warranting a different costs order.
ORDER
The Court makes the following order:
1. The Respondent is placed under provisional liquidation in the hands of
the Master of this Court.
2. A rule nisi is issued calling upon all persons interested to appear and
show cause, if any, to this Court on 20 October 2026 at 10h00 or as
soon thereafter as the matter may be heard, why the following order
should not be granted:
2.1 That the Respondent be placed under final liquidation; and
2.2 That the costs of the application be costs in the liquidation on a
scale as between attorney and client.
3. Service of this provisional order shall be effected:
3.1 By the Sheriff on the Respondent at its registered office;
3.2 By the Sheriff on the South African Revenue Service;
3.3 By the Sheriff on the Respondent’s employees and any trade
union to which such employees may belong; and
3.4 By one publication in each of The Cape Times and Die Burger
newspapers.
___________________________________________________________________
JUDGMENT
JANISCH AJ:
Introduction
[1] The Applicant seeks an order placing the Respondent under provisional
liquidation, together with the usual ancillary relief (i.e. the issue of a rule nisi calling
upon interested parties to show cause inter alia why the Respondent should not be
finally liquidated, and directions for service of the provisional order).
[2] The Applicant is a close corporation known as Plot 432 Saxenb urg Park CC.
Its affidavits are deposed to by its sole member, Mr J Lear (‘Lear’).
[3] The Respondent is a private company which goes by the name of Kalahari
Namaqua Karoo (Pty) Limited. It owns a farming property in the Northern Cape
Province and conducts farming operations there. It has two current directors, Mr W C
le Roux (‘Le Roux’) and Mr B J Botha (‘Botha’).
[4] The application is brought in terms of s344( f) and s346(1)(b) of the
Companies Act 61 of 1973 (‘the old Act’), read with the transitional provisions of Item
9 of Schedule 5 of the Companies Act 71 of 2008 (‘the new Act’).
[5] The Applicant claims that as a creditor of the Respondent , it is entitled to a
winding-up order on the basis , as envisage d in s344( f) of the old Act , that the
Respondent is unable to pay its debts as described in s345 thereof.
[6] The Respondent is deemed to be unable to pay its debts inter alia if a creditor
to whom it is indebted in a sum of not less than R100 then due has served on it a
demand requiring it to pay the sum so due , and it has for three weeks thereafter
neglected to pay the sum or to secure or compound for it to the reasonable
satisfaction of the creditor (s345(1)(a) of the old Act) ; or if it is proved to the
satisfaction of the Court that the Respondent is unable to pay its debts (s345(1)(c) of
the old Act).
[7] The Applicant seeks to establish the requirements of s344(f) of the old Act on
both of the bases referred to above (i.e. both sub-paragraphs (a) and (c) of s345(1)).
An inability to pay debts in this way constitutes a case of commercial insolvency, as
opposed to factual insolvency where the entity’s liabilities exceed its assets.
The factual background
[8] The material factual background to the present application is not in dispute.
[9] The Applicant is a registered credit provider in terms of the National Credit Act
34 of 2005.
[10] On 21 November 2023, 25 November 2023 and 28 November 2023, the
Applicant entered into three separate written loan agreements with the Respondent ,
represented by Le Roux. In terms of those agreements, the Applicant agreed to loan
amounts of R3 000 000, R3 600 000 and R1 900 000 respectively to the Respondent
– a total of R8 500 000.
[11] The primary purpose of the loan was to enable the Respondent to purchase a
farm called Rondekop, on which the Respondent intended to farm Angora goats,
lucerne and wheat. A portion of the loan was also intended to be used to acquire
farming assets and livestock.
[12] In this regard, the Respondent had on 9 November 2023 entered into a
purchase agreement in respect of Rondekop with APC Nieuwoudt & Seun BK (‘the
seller’). The purchase price for the farm was R7 500 000. Of this, the Respondent
was obliged to pay a sum of R3 000 000 on transfer of title , with the remaining
amount being payable in three instalments of R1 500 000 each (plus interest at an
agreed rate) on 15 January of each of the years 2025, 2026 and 2027.
[13] Although not explained in the founding papers, it seems that the reason for
there being three separate agreements was that the security provided for each was
different. The R3 000 000 loan was secured by a mortgage bond over Rondekop,
with each of Le Roux and Botha entering into a deed of suretyship in favour of the
Applicant limited to R3000 000 plus accrued interest and costs ; the R3 600 000 loan
was secured by a bond over a residential property owned by Mr J and Mrs E le
Roux, who entered into a deed of suretyship with the Applicant to the same amount;
and the R1 900 000 loan was secured by a bond over a residential property owned
by Ms O Muller, who also entered into a deed of suretyship with the Applicant to the
same amount.
[14] Over the period from 26 October 2023 to 22 July 2024, the Applicant
advanced the total sum of R9 137 600.35 to the Respondent. This included
payments made to the Respondent directly and to third parties in settlement of
amounts owing by the Respondent to those parties ( in relation to the acquisition of
farming equipment and livestock).
[15] The founding papers do not explain why the total actually advanced to the
Respondent in this way exceeded the total undertaken to be advanced by more than
R600 000. However, there is no dispute that the above amount was in fact advanced
as a loan.
[16] Each of the loan agreements required the loan to be repaid in monthly
instalments over a period of 36 months.
[17] It was an express term of each loan agreement that subject to the provisions
of the National Credit Act, should the Respondent be in default under the agreement,
‘then all amounts whatsoever owing to the Lender shall forthwith be payable in full ,
and the Lender may institute proceedings for the recovery thereof and obtain an
Order declaring the Property executable .’ Failure to pay any amount due in terms of
the loan agreement would for this purpose place the Respondent in default.
[18] Save for an amount of R300 000 (or R150 000) to which I return below, it
appears that the Respondent made no payments of any instalments on the loan
agreement whatsoever. As at January 2026, the total amount owing to the Applicant
(including interest) was calculated by the Applicant to amount to R11 453 049.80.
[19] In the Respondent’s answering affidavit, Le Roux denied that as at 31 January
2026 the Respondent was indebted to the Applicant in the above amount. In
particular, he denied that the alleged balance:
‘accurately reflects:
67.1 all payments made by or on behalf of the Respondent
67.2 proper allocation of payments received;
67.3 the true capital amount outstanding from time to time; and
67.4 the correct contractual interest rate or rates.’
[20] In support of this, the Respondent provided what Le Roux called ‘an example’,
being payments of R250 000 to the Respondent’s erstwhile attorney, Mr Erasmus
and R50 000 to a firm called Boshoff Inc , these amounts having been paid ‘for the
benefit of both the Applicant and the seller of the farm ’. It alleged that some or all of
this amount should be allocated to the Applicant, which would have an impact on the
overall interest calculation.
[21] On this basis, the Respondent contends that ‘in the absence of a proper
debatement and reconciliation of the account, the amount owing remains genuinely
and materially disputed’.
[22] Over and above this ‘example’, t he Respondent however put up no other
concrete evidence of other payments having been made in relation to the loan
indebtedness. Nor was any more detail provided in relation to a dispute about
applicable interest rates.
[23] On 14 October 2025, the Applicant’s attorneys addressed and duly delivered
to the Respondent a letter intended to comprise a notice in terms of s345(1)(a) of the
old Act (“the s345 letter”).
[24] In the s345 letter, it was stated that despite an earlier letter of demand dated 9
September 2025, the Respondent had not made payment of the outstanding
amount, and that in the circumstances, the full amount of R11 047 998.86 inclusive
of interest was due and payable under the ‘Loan Agreement ’ (this should plainly
have referred to ‘Loan Agreements’, but I do not think that anything turns on this).
[25] The Applicant demanded payment or adequate security for payment of the full
amount within three weeks of the date of service thereof, failing which the
Respondent would be deemed to be unable to pay its debts in terms of s345(1)( a)
and the Applicant would immediately institute liquidation proceedings. The
Applicant’s attorneys also advised that they had instructions to institute urgent
proceedings against all sureties in the matter.
[26] Despite the s345 letter, the Respondent does not appear to have made any
further payment to the Applicant within the three-week period or at all . The present
application was launched on 12 February 2026.
[27] The application became opposed and on 24 March 2026 the parties agreed to
postpone the matter for hearing on the semi -urgent roll on 31 August 2026, together
with a timetable for the filing of further papers.
[28] The Respondent delivered its answering affidavit on 30 April 2026.
[29] Despite the agreed order requiring the delivery of any replying affidavit by 22
May 2026, the Applicant’s reply (deposed to by Lear) was only delivered on 24 June
-
2026. It was accompanied by an affidavit from Botha (the other director of the
Respondent) addressing certain allegations made by Le Roux in the answering
affidavit.
[30] After receipt of the reply and Botha’s affidavit, the Respondent indicated that it
would seek leave to file a further affidavit in terms of Uniform Rule 6(5)( e) dealing
with what it regarded as new matter in those affidavits . The Respondent did not
resist this, and a further affidavit of Le Roux was duly delivered on 24 August 2026.
[31] At the hearing of the matter, the parties agreed that it would be appropriate for
me formally to condone the late filing of the replying affidavit and to exercise my
discretion to permit the further affidavit. I made orders to that effect. The Applicant
elected not to file a further replying affidavit.
[32] In relation to procedure, the Respondent raised the fact that the Applicant had
not complied with Uniform Rule 41A (pertaining to mediation as a dispute resolution
mechanism) when launching the liquidation proceedings. I shall deal with that aspect
at the conclusion of this judgment.
Legal Principles
[33] In an application for a provisional winding -up order based upon an alleged
inability to pay debts, it is up to the applicant to establish the requirements for such
an order on a prima facie basis . What this means was set out as follows in
Orestisolve (Pty) Ltd t/a Essa Investments v NDFT Investment Holdings (Pty) Ltd
2015 (4) SA 449 (WCC) (‘Orestisolve’) in paragraph 7:
‘[Proof of an entitlement to a provisional winding -up order on a prima facie basis
means] that the applicant must show that the balance of probabilities on the affidavits
is in its favour (Kalil v Decotex (Pty) L td and Another 1988 (1) SA 943 (A) at 975J -
979F). This would include the existence of the applicant’s claim where such is
disputed’.
[34] In other words, the special meaning of a prima facie case in provisional
winding-up proceedings is not (as would be the case in other contexts) that a case
has been established on the applicant’s papers alone, without regard to any
rebutting evidence, but that the requisite case for provisional winding-up is proven on
a balance of probabilities, having regard to the affidavits as a whole ( Kalil v Decotex
at 976E-977C and at 978J-979C).
[35] In Afgri Operations Limited v Hamba Fleet (Pty) Ltd 2022 (1) SA 91 (SCA)
(‘Afgri Operations’) in paragraph 9, the SCA endorsed this approach:
‘Indeed, it is precisely by reason of the fact that a court may first make a provisional
order of liquidation that, in Kalil v Decotex , a different test was applied from that in
Plascon-Evans when setting out the circumstances that would be sufficient to justify
the making of such an order of liquidation. It is that the affidavits must demonstrate a
prima facie case in favour of the applicant. It may bear repeating that Plascon-Evans
is the locus classicus as to the test in the factual inquiry before a final order can be
made in motion proceedings.’
[36] Corbett JA in Kalil v Decotex (Pty) Ltd and Another 1988 (1) SA 943 (A) (‘Kalil
v Decotex’) at 979B-D also held that where a prima facie case in the above sense
is established, a provisional order of winding-up should usually be granted and, save
in exceptional circumstances, the court should not accede to an application by the
respondent that the matter be referred to oral evidence. This does no lasting injustice
to the respondent, Corbett JA held, for he will generally be given the opportunity on
the return day, in a proper case and where he so asks, to present oral evidence on
disputed issues.
[37] Moreover, a respondent, facing a final order, can seek leave to file further
affidavits addressing the requirements for liquidation, and that application will be
determined using the Plascon-Evans approach (Plascon-Evans Paints Limited v Van
determined using the Plascon-Evans approach (Plascon-Evans Paints Limited v Van
Riebeek Paints (Pty) Limited 1984 (3) SA 623 (A) at 634E-G).
[38] To obtain a provisional order at this stage , the Applicant needs therefore to
establish, prima facie (i.e. on all the affidavits):
(a) Its locus standi (which will exist if the applicant establishes that it is a
creditor of the company , even if contingent or prospective –
see s346(1)(b) of the old Act); and
(b) The existence of a ground of winding -up (in this case, that s345(1)(a) or
(c) is present).
[39] Establishing, on a prima facie basis, that the company is indebted to the
applicant (i.e. that the applicant is a creditor) is however not necessarily the end of
the locus standi enquiry. It is in this sphere that the so-called ‘Badenhorst rule’ may
come into play. In Afgri Operations, it was stated in paragraph 6 that:
‘It is trite that winding -up proceedings are not to be used to enforce payment of a
debt that is disputed on bona fide and reasonable grounds [see Badenhorst v
Northern Construction Enterprises (Pty) Ltd 1956 (2) SA 346 (T) at 347 -348 and Kalil
v Decotex (Pty) Ltd and Another 1988 (1) SA 943 (A) at 980D) ]. This is known as the
so-called “Badenhorst rule”. Where, however, the respondent’s indebtedness has,
prima facie, been established, the onus is on it to show that the indebtedness is
indeed disputed on bona fide and reasonable grounds.’
[40] In Imobrite (Pty) Limited v DTL Boerdery CC [2022] ZASCA 67, the SCA in
paragraph 14 stated as follows:
‘… winding -up proceedings ought not to be resorted [to] to enforce a debt that is
bona fide (genuinely) disputed on reasonable grounds. That approach is part of the
broader principle that the court’s processes should not be abused.’
[41] The Badenhorst rule was also acknowledged in Kalil v Decotex at 980B – F.
Corbett JA pointed out (at 980F-G) that that rule:
‘[W]ould tend to cut across the general approach to applications f or a provisional
order of winding -up … as it is conceivable that the situation might arise that the
order of winding -up … as it is conceivable that the situation might arise that the
applicant could show a balance of probabilities in his favour on the affidavits, while at
the same time the respondent established that its indebtedness to the applicant was
disputed on bona fide and reasonable grounds.’
[42] Rogers J in paragraph 8 of Orestisolve said that the Badenhorst rule is part of
the broader principle that the court’s processes should not be abused, but that it is
now treated as an independent rule, not dependent on proof of actual abuse of
process. He then went on to state as follows:
‘A distinction must thus be drawn between factual disputes relating to the
respondent’s liability to the applicant and disputes relating to the other requirements
for liquidation. At the provisional stage the other requirements must be satisfied on a
balance of probabilities with reference to the affidavits. In relation to the applicant’s
claim, however, the court must consider not only where the balance of probability lies
on the papers but also whether the claim is bona fide disputed on reasonable
grounds. A court may reach this conclusion even though on a balance of probabilities
(based on the papers) the applicant’s claim has been made out ( Payslip Investment
Holdings CC v Y2K Tec Limited 2001 (4) SA 781 (C) at 783 G-I). However, where the
applicant at the provisional stage shows that the debt prima facie exists, the onus is
on the company to show that it is bona fide disputed on reasonable grounds (Hülse-
Reutter and Another v HEG Consulting Enterprises (Pty) Ltd (Lan e and Fey NNO
Intervening) 1998 (2) SA 208 (C) at 218D-219C).’
[43] I shall deal further below with legal aspects pertaining to how an applicant
establishes the existence of a ground of winding-up under sections 345(1)(a) and (c),
having regard to the present facts.
[44] As a general principle, when the undischarged indebtedness has been prima
facie established and the respondent has not show n that it is disputed on bona fide
and reasonable grounds, and when a ground of winding-up is shown prima facie to
and reasonable grounds, and when a ground of winding-up is shown prima facie to
exist, an unpaid creditor has a right ex debito justitiae (i.e. ‘a right arising out of the
justice of the matter ’) to a winding -up order (Afgri Operations in paragraph 12,
including footnote 14).
[45] The ex debito justitiae principle however does not establish an inflexible rule
or limitation on a court’s discretion to make or refuse a winding -up order. It is
recognised that circumstances may exist in which a court will nonetheless exercise a
discretion against granting a winding-up order . The SCA in Afgri Operations
nonetheless stated, as a principle, that:
‘the discretion of a court to refuse to grant a winding -up order when an unpaid
creditor applies therefor is a “very narrow one ” that is rarely exercised and then in
special or unusual circumstances only’.
[46] Whether the c ourt should exercise its discretion to refuse a winding -up must
be considered on the special facts of each case. One example may be where a
commercially insolvent company is shown not to be factually insolvent (i.e. where its
assets exceed its liabilities) . Even then, it is recognised that commercial insolvency
is a more readily determinable and objective justification for winding-up in the face of
factual solvency, inter alia because of the difficulties inherent in valuing assets and
establishing that such assets are suitably liquid to enable it to meet its commercial
obligations (see Boschpoort Ondernemings (Pty) Ltd v Absa Bank Limited 2014 (2)
SA 518 (SCA) in paragraph 17).
[47] Thus the mere fact that an excess of assets over liabilities is established
would not typically be enough to trigger the exception. The nature of the assets is
important. As stated in Rosenbach & Co (Pty) Ltd v Singh’s Bazaars (Pty) Ltd 1962
(4) SA 593 (D) at 597 E-F (endorsed in Absa Bank Ltd v Rhebokskloof (Pty) Limited
1993 (4) SA 436 (C) at 440H):
‘If the company is in fact solvent, in the sense of its assets exceeding its liabilities,
this may or may not, depending upon the circumstances, lead to a refusal of a
winding-up order; the circumstances particularly to be taken into consideration
against the making of an order are such as show that the re are liquid assets or
against the making of an order are such as show that the re are liquid assets or
readily realisable assets available out of which, or the proceeds of which, the
company is in fact able to pay its debts.’
[48] It has also been suggested that the refusal of winding -up may be justified
where it appears that an indebted company could be saved by a particular
transaction, even in the absence of a counter -application for business rescue (e.g.
Dippenaar NO v Business Venture Investments No 134 (Pty) Ltd [2014] 2 All SA 162
(WCC) in paragraphs 45 and 46 and the authorities referred to there).
[49] Ultimately, however, the discretion is a flexible one in relation to which no hard
and fast rules may be set. In paragraph 18 of Orestisolve, it was stated that the ex
debito justitiae maxim:
‘conveys no more than that, once a creditor has satisfied the requirements for a
liquidation order, the court may not on a whim decline to grant the order . … There
must be some particular reason why, despite the making out of the requirements for
liquidation, an order is withheld.’
[50] This finds support in Electrolux South Africa (Pty) Ltd v Remtek Consulting
(Pty) Ltd 2023 (6) SA 452 (WCC) where the court said the following in paragraph 25:
‘It goes without saying that the exercise of a discretion in favour of not granting a
liquidation order in circumstances where a company is commercially insolvent must
be based on a solid factual foundation.’
[51] Against this legal backdrop, I proceed to address the merits of the present
application.
Discussion
[52] Having regard to all the affidavits filed, it is apparent to me that the Applicant
has established its locus standi as a creditor of the Respondent on a prima facie
basis.
[53] It is not disputed that the Applicant entered into loan agreements with the
Respondent and that it duly advanced the loan amount (and more) to the
Respondent. Moreover, the Applicant has averred that it received no repayments ,
although pursuant to the information provided in the first answering affidavit it ha s
conceded that an amount of R150 000 may be regarded as having been paid to it,
being half of the amount of R300 000 paid into the attorneys’ trust accounts in part
settlement of both the Applicant’s and the seller’s claims. The receipt of a single
payment of R150 000 against a loan capital debt of in excess of R9 000 000 plainly
does not assist the Respondent in any material sense.
[54] On my calculation, the monthly repayment under the three loan agreements
for the first 12 months of the loan was R86 770, while for the final 24 months it was
R401 116. Against these sums, p ayment of a single amount of R150 000 pales into
insignificance when one is determining whether the Respondent is in default. It is
therefore self-evident that the Respondent is in breach of its obligations under the
loan agreements . I n accordance with the terms of the loan agreements, the full
amounts of capital and interest became payable immediately.
[55] The Applicant has therefore established that it was, at the time of launching
the application, a creditor of the Respondent. Counsel for the Respondent conceded
as much.
[56] The Respondent nonetheless seeks to rely on the Badenhorst rule. In its
answering affidavit, it denies that the Applicant has established that the amount
claimed was correctly stated or lawfully due. The high-water mark of its complaint is
that the alleged indebtedness ‘is based solely, alternatively primarily, on statements
and schedules generated by or under the control of the Applicant, the correctness,
completeness and reliability of which are disputed. ’ The Respondent goes on to
make the statement set out in paragraph 19 above, and to highlight as an example of
its dispute the non-inclusion of the R300 000 payment.
[57] What is entirely missing from the Respondent’s affidavit is any factual basis
(other than the R300 000 payment) for casting doubt on the correctness of the
Applicant’s contention that the Respondent is liable to it in the sum claimed. Le
Roux, he says in his additional affidavit , was the director of the Respondent
Roux, he says in his additional affidavit , was the director of the Respondent
responsible for the Respondent’s ‘finances and administrative affairs ’. One would
therefore expect him to have knowledge of any payments actually made in
compliance with the loan agreements. Moreover, if there was any dispute about the
amount of interest, he was best placed to explain it. The fact that he has resorted to
the vague, unsubstantiated and formulaic statements as set out above suggests to
me that there is no substance to these contentions. Certainly, the Respondent has
failed to put up nearly sufficient evidence at this stage that the liability to the
Applicant is disputed on bona fide and reasonable grounds , or indeed on any
grounds at all.
[58] For these reasons I do not accept that this is a case in which reliance may be
placed on the Badenhorst rule.
[59] The next question is whether the Applicant has established, on a prima fac ie
basis, one or both grounds for winding-up relied upon by it.
[60] It is common cause that a s345 letter was served on the Respondent and that
payment of the amount demanded was not made or satisfactorily secured within a
three-week period.
[61] The Respondent however argue s that s345(1)(a) was not triggered because
the amount claimed in the letter had not been accurately established as due. The
contention, as I underst and it, is that the mere fact that the R300 000 amount (or an
allotted half of it) has now been accepted to give rise to an adjustment to the
Applicant’s claim, means that the Applicant can no longer rely on the Respondent’s
non-compliance with the s345 letter as an independent ground of winding-up.
[62] The Respondent referred me to the decision of the S upreme Court of Appeal
in Lamprecht v Klipeiland (Pty) Limited [2014] ZASCA 125, in which the application
of s345(1)(a) was discussed. In that matter there had been a s345 letter claiming
payment of R6 000 000. The parties had later taken an order by agreement that the
applicant was a creditor of the respondent in a sum of no less than R100. The Court
concluded that this meant that it was accepted that an amount of R100 was due and
payable. In those circumstances, it held that s345(1)(a) was established.
[63] Of particular importance was the SCA’s endorsement in paragraph 16 of the
finding of Malan J in Body Co rporate of Fish Eagle v Group Twelve Investments
2003 (5) SA 414 (W) at 428B-C, where the Court held that if the respondent admits a
debt of over R100:
‘even though the respondent’s indebtedness is less than the amount
demanded in terms of s345(1)(a) …., then on the respondent’s own version,
the applicant is entitled to succeed in its liquidation application…’
[64] The Respondent, having in its written heads of argument submitted that this
principle applies ‘where a debt exceeding the statutory minimum is admitted or
otherwise established as due and payable ’ (my underlining) , in oral argument
retracted from this position . It now contended that that principle only applies where
the lesser debt is admitted, but that otherwise the Applicant must fail on this ground if
it cannot establish a liability in precisely the same amount as was demanded in the
s345 letter.
[65] I do not agree with this submission. There are many ways in which the
requisite indebtedness can be established. An admission is only one of these. If (as
the courts held in Fish Eagle and Lamprecht) it does not matter for purpose of
compliance with s345(1)( a) that the respondent has only admitted an indebtedness
lower than the amount demanded, it should likewise also not matter that in the
absence of an admission, the applicant has prima facie established an un satisfied
indebtedness in an amount lower than the demand, as long as it exceeds R100 . The
Respondent’s approach is impractical and over -technical and would frustrate the
purpose of s345(1)(a).
[66] I am for the reasons already given above satisfied that the Applicant has
prima facie established that the Respondent is indebted to it in an amount which
exceeds R100 by an order of magnitude . The fact that the Applicant now accepts
that it ought to have allocated a payment of R150 000 to the debt whose payment it
demanded does not alter that conclusion and certainly cannot in my view invalidate
reliance on the s345 letter.
[67] Finally in relation to th e s345(1)( a) requirement, the Respondent sought to
place reliance on my judgment in The Body Corporate of The Decks Sectional Title
Scheme v Prophax Properties 22 CC (Unreported WCHC Case no. 2025-080033, 20
May 2026) (‘The Decks’). The Respondent contents that both in relation to whether a
debt had been prima facie established , and as to whether a bona fide dispute on
reasonable grounds had been shown , the finding in The Decks is relevant. In that
matter I dismissed an application for provisional winding -up for failure to establish
the basis of the debt and because the respondent showed the existence of such a
dispute.
[68] It will be apparent from a reading of the judgment in The Decks that the matter
differed materially from the present one. The applicant there relied upon a debt
relating to levy charges but based its claim on statements that included a range of
other amounts, which were not explained . In the present case, the basis of the debt
(the loan advances) ha s been properly explained and established. Moreover, in The
Decks, the respondent provided concrete substantiation of the various disputes it
wished to pursue, the quantum of which together exceeded the amount claimed. The
Respondent in the present case has not done so.
[69] I therefore do not think that the judgment in The Decks is of any assistance to
the Respondent in the present application.
[70] But even if I am incorrect in my conclusions in relation to s345(1)(a), I am of
the view that on the papers before me, the Applicant has in any event established on
the necessary prima facie basis that the Respondent is unable to pay its debts.
[71] In the first instance, the Applicant has demonstrated that over a period of at
least two years from the time the first loan amount was disbursed, and a year and a
half from the final disbursement, the Respondent made no loan repayments (except
for the R150 000 referred to above).
[72] As already stated, the Respondent has not put up anything approaching an
explanation for its failure to pay the loan instalments . Its vague contentions of there
being a ‘substantive accounting dispute ’ are not borne out or substantiated on the
papers. Despite being the person best placed to inform the Court about the financial
affairs of the Respondent, Le Roux provides no concrete evidence of any bona fide
dispute of the Respondent’s obligation to pay. The very strong inference to be drawn
from this, on a view of the papers, is that there is no explanation other than the fact
that the Respondent is not able to pay.
[73] Moreover, the Respondent’s only business is that of farming on Rondekop. If
the Respondent is able to pay its debts, it must therefore do so from the proceeds of
those farming operations.
[74] Le Roux’s evidence as to how the farm generates income is vague and
unsatisfactory. He mentions the Angora goats and says that ‘this animal husbandry
covers the costs of the farm and is sustainable in the long term ’. However, he
provides no evidence of any actual income having been earned, in what amount, and
how that amount is allocated to farming costs. He certainly does not provide a basis
to conclude that there is sufficient surplus to cover the Respondent’s debts to the
Applicant and/or its obligation to pay the remaining purchase price of the farm. He
says nothing about the viability of the Angora operation or its ability to generate
income in the short or medium term.
[75] Le Roux also says that the farm has capability to generate income from trees
on the property, and that the Respondent is ‘in the process of finali sing procurement
and lease agreements with various entities ’ that ‘will enable the Respondent to
generate sufficient income for profit and settle its debts in the ordinary course ’. No
generate sufficient income for profit and settle its debts in the ordinary course ’. No
concrete information, timelines or budgets for this endeavour are provided, as would
be expected if there were a real and imminent prospect of the Respondent being
able to turn this alleged capital resource to account.
[76] Le Roux goes on to say that ‘the Respondent’s financial difficulties, to the
extent that any have arisen, are temporary cash -flow pressures and not proof of
commercial insolvency’. The fact that the Respondent has been unable to settle any
of its ingoing indebtedness to the Applicant for a number of years (save for
R150 000) speaks in my view to something far more serious than ‘temporary cash
flow pressures’. In the absence of any concrete explanation of this contention, the
natural inference to be drawn is that the Respondent has been, and remains, simply
unable to generate the farming income needed to enable it to pay its debts. There is
also no evidence of any anticipated financial support likely to be forthcoming from
another source.
[77] When the Applicant filed an affidavit by Botha (together with its reply) in which
Botha, who conducts the farming activities, stated that the Respondent needs
financial support and is unable to pay its debts, the Respondent was permitted to file
a further affidavit dealing with what it regarded as new matter , including Botha’s
affidavit. Whether or not I give particular weight to Botha’s evidence, the fact is that
Le Roux had a chance to provide more information as to the Respondent’s ability to
pay its debts from the farming operation s. H is additional affidavit failed to add
anything of value in this regard . On the contrary, he now acknowledged that the
‘biomass opportunity’ (i.e. the exploitation of the trees) was not yet a reality and that
he did not ask the Court to find that the Respondent was commercially solvent on
that basis. M oreover, he now acknowledged that Respondent had experienced
‘serious cash -flow pressure ,’ a step up on the ‘temporary cash -flow pressures ’ to
which he had originally admitted.
[78] In my view, even leaving aside Botha ’s statement , on a view of all the
[78] In my view, even leaving aside Botha ’s statement , on a view of all the
affidavits the Applicant has comfortably established , at least for purposes of a
provisional order, that the Respondent is not able to pay its debts.
[79] The final question is whether I should exercise my discretion to refuse a
winding-up order.
[80] As stated, the power to refuse to grant a winding -up order where the statutory
requirements have been met is a limited one, to be exercised only in special or
unusual circumstances and based on a solid factual foundation.
[81] I do not see that the Respondent has put up any cognizable factual basis to
warrant the exercise of a discretion in its favour. It has not been demonstrated that
the company is factually solvent in that its assets exceed its liabilities. In any event,
its assets (primarily the farm) are not liquid and there is no suggestion that any effort
is being made to dispose of the farm to settle creditors.
[82] The extent of the Respondent’s submissions in relation to the discretion, as I
understood them, was that the circumstances in which Botha came to support the
liquidation application had not been explained. This was against the background that
the Applicant had not pursued Botha under his personal suretyship but had pursued
Le Roux.
[83] I do not think that the above issues have any material bearing on why a
winding-up order should not be granted. A creditor is not required to exhaust some or
all of its security before applying for liquidation. The mere fact that Botha deposed to
a supporting affidavit , and is apparently not being pursued as a surety , does not
mean that the application is somehow an abuse of process or that liquidation is
inappropriate. Le Roux had every opportunity to present rebutting evidence of the
company’s financial position, contrary to Botha’s statements, but could not do so.
[84] In the circumstances, the Applicant is entitled to a provisional liquidation order
ex debito justitiae.
The Rule 41A issue
[85] It remains to deal with the question of the Applicant’s non -compliance with
Rule 41A which deals with mediation as a dispute-resolution mechanism.
[86] It is common cause that the Applicant did not comply with Rule 41A by serving
a notice on the Respondent indicating whether it agrees to or opposes the referral of
the dispute to mediation.
[87] The Respondent however apparently served its own notice under Rule 41A
indicating that it was willing to mediate the matter. The Applicant was not prepared to
agree to a mediation and filed what it called a notice of objection to a referral to
mediation.
[88] It seems to me that it was in principle incumbent upon the Applicant to have
complied with Rule 41A, which applies to every new action or application
proceeding. This includes a liquidation application. The question is what the
consequence of non-compliance is.
[89] Rule 41A imposes no sanction for failure to comply (see Growthpoint
Properties Limited v Africa Master Blockchain Company (Pty) Limited [2022]
ZAGPJHC 836 (‘Growthpoint’) in paragraph 27 ). I am not aware of any case where
relief has been refused merely because the plaintiff or applicant failed to give the
notice. As stated in Growthpoint, with reference to the cases referred to in footnote
22 therein, the Courts have so far been disinclined to uphold technical objections of
non-compliance with Rule 41A. One must also view this in light of the fact that
mediation is not compulsory under the Rules and can only be entered into by
agreement.
[90] At the same time, there may well be cases in which the court elects to compel
the parties to comply with the Rule , and only to proceed to adjudicate the dispute if
that process has not borne fruit.
[91] In the circumstances of th e present case, despite the Applicant’s non -
compliance, I am not inclined to delay the matter or to refuse the provisional order
sought merely because of th is. The Respondent filed its own notice on the issue of
mediation, to which the Applicant responded. The threshold purpose of the Rule,
which is to ensure that the parties at least consider the prospects of mediation, was
therefore achieved, even though no mediation ensued.
[92] I can imagine that there may be circumstances where , although the Court
does not compel compliance, the manner in which the matter unfolds demonstrates
that a useful purpose would in fact have been served by mediation. It may be proper,
in such a case, to mulct the party that did not embrace the possibility of mediation in
costs (i.e. in the exercise of the court’s general discretion as to costs). Th e present
however does not seem to me to be such a case. The Respondent has not put up
any facts on which I could conclude that an alternative resolution of the dispute
should have been pursued or would have succeeded.
[93] In particular, it has not provided a concrete basis to show that it would have
realistically been able to offer the Applicant something that would have rendered a
liquidation application unnecessary or resolved the dispute without litigation . I
therefore cannot criticize the Applicant for its decision to press on with the application
once all the facts were available, such that I might be inclined to deprive it of some or
all of its costs.
[94] The approach I have adopted to this issue should not be read to suggest that
parties may with impunity disregard the requirements of Rule 41A. Litigants and
practitioners must give due regard to the obligations imposed under the Rules, which
serve a valuable purpose. Cases will arise where non -compliance is properly met
with a Court declining to entertain the matter or otherwise penalising a litigant. This
with a Court declining to entertain the matter or otherwise penalising a litigant. This
is, however, not such a case, for the reasons given above.
Costs
[95] Costs orders are not typically made at the provisional stage in winding-up
applications. The relief sought on the return day will include an order as to costs.
This makes sense as on the return day the court will have all the information before it
to make a costs order, which may include information that may demonstrate that the
applicant, despite its success at the provisional stage, should not be entitled to costs,
or facts that may more fully enable it to exercise its discretion in relation to the scale
of costs.
[96] The relief sought in the notice of motion is for a rule nisi to be issued calling
on interested parties to show cause why the costs of the application should not be
costs in the liquidation on an attorney and client scale.
[97] It appears to me that if no further information is placed before the Court at the
return day, there would be grounds to award the Applicant its costs (as costs in the
liquidation) on an attorney and client scale. For the reasons given above, the
Respondent’s opposition to winding up lacks the concrete factual basis that may
have given it a reasonable chance of success. The successful Applicant ought not to
be out of pocket in relation to the costs of an opposed application in those
circumstances.
[98] I am therefore prepared to issue a rule nisi on the basis sought by the
Applicant. It will be for the Court on the return day to decide whether any other
reason has arisen in the meantime to make a costs order on a different scale.
Order
[99] In the premises, I make the following orders:
1. The Respondent is placed under provisional liquidation in the hands of the
Master of this Court.
2. A rule nisi is issued calling upon all persons interested to appear and show
cause, if any, to this Court on 20 October 2026 at 10h00 or as soon
thereafter as the matter may be heard, why the following order should not
be granted:
2.1. That the Respondent be placed under final liquidation; and
2.2. That the costs of the application be costs in the liquidation on a scale
as between attorney and client.
3. Service of this provisional order shall be effected:
3.1. By the Sheriff on the Respondent at its registered office;
3.2. By the Sheriff on the South African Revenue Service;
3.3. By the Sheriff on the Respondent’s employees and any trade union to
which such employees may belong; and
3.4. By one publication in each of The Cape Times and Die Burger
newspapers.
__________________________
M W JANISCH
ACTING JUDGE OF THE HIGH COURT
APPEARANCES:
For the Applicant: R B Engela
Instructed by: VanderSpuy Attorneys
For the Respondent: M van der Berg
Instructed by: SDP Attorneys