Case Law[2025] ZAGPJHC 665South Africa
Sayers v Snaid and Morris Incorporated (130616/2023) [2025] ZAGPJHC 665 (8 July 2025)
Headnotes
himself out to be an experienced legal practitioner who must have been aware that the Applicant and Eckersley were not liable for the legal fees directly to the Respondent. Due to the fraudulent behaviour of the Respondent, the Applicant believes it would be just and equitable to wind up the Respondent.
Judgment
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# South Africa: South Gauteng High Court, Johannesburg
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## Sayers v Snaid and Morris Incorporated (130616/2023) [2025] ZAGPJHC 665 (8 July 2025)
Sayers v Snaid and Morris Incorporated (130616/2023) [2025] ZAGPJHC 665 (8 July 2025)
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sino date 8 July 2025
FLYNOTES:
COMPANY – Winding up –
Just
and equitable
–
Fraudulent
and unlawful conduct regarding payment of legal fees –
Issuing invoices directly to creditors – Lack
of a legal
nexus between parties for direct payment – Failing to
correct erroneous amounts in L&D account despite
knowing
amounts were incorrect – Pursuing a writ of execution for an
inflated sum – Disputed debt arose from
misrepresentations
and unlawful conduct – Disregard for rights of creditors –
Final winding-up order granted
– Companies Act 61 of 1973, s
344(h) –
Companies Act 71 of 2008
,
s 81(1)(c)(ii).
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 130616/2023
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER JUDGES: NO
(3)
REVISED.
8
July 2025
T
ENGELBRECHT
In
the matter between:
SAYERS,
JOHN MEYRICK
WILLIAM
APPLICANT
and
SNAID
& MORRIS
INCORPORATED
RESPONDENT
This order is made an
Order of Court by the Judge whose name is reflected herein, duly
stamped by the Registrar of the Court and
is submitted electronically
to the Parties/their legal representatives by email. The Order
is further uploaded to the electronic
file of this matter on
Caselines by the Judge his/her secretary. The date of this
Order is deemed to be 8 July 2025.
JUDGMENT
ENGELBRECHT,
AJ
Introduction
[1]
This is an application wherein the Applicant applies for the
provisional winding up of the Respondent in terms of Section
344 (h)
of the Companies Act, 61 of 1973, because it is just and equitable.
The Respondent opposes this application and requests
the dismissal of
the application with attorney and client costs. Section 344 ( h) of
the Companies Act 61 of 1973 reads as follows:
“
A company may
be wound up by the Court if:
(
h)
It appears to the Court that it is just and
equitable that the Company should be wound up”.
[2]
During the argument, Advocate Hollander argued correctly so, that the
application should be considered in terms of Section
81(1)(c (ii) of
the new
Companies Act 71 of 2008
as amended, which reads as follows:
“
81.(1)
A court may order a solvent company to be wound up if:
(c )
One or more of the company’s creditors have applied to the
court for an order to wind up the company
on the grounds that’
(ii)
It is otherwise just and equitable for the company to be wound up”.
[3]
In terms of the joint practice note, the following issues are in
dispute:
[3.1]
Whether the Applicant is a creditor of the Respondent.
[3/2]
Whether the Respondent is unable to pay its debt
[3.3]
Whether the winding-up of the Respondent would be just and equitable.
[3.4]
Whether the Respondent is to be wound up provisionally or finally.
[3.5]
Whether the application is to be dismissed.
[4]
As a result of the argument by Advocate Hollander, response by
Advocate Newton and the supplementary heads filed by Advocate
Newton,
I believe that the issues in dispute has now increased also to
determine whether the Applicant is entitled to have this
matter heard
on a section in different legislation and whether this matter is now
a complete new matter placed before court and
should therefore be
dismissed as requested by Advocate Newton.
APPLICANT’S
CASE
[5]
In the Founding Affidavit, the Applicant argues that he and Jackie
Eckersley are creditors in the insolvent estate of
Slick Aircraft
Company (Pty) Ltd(“Slick”) in liquidation, which is
stated to be common cause in the Joint Practice
Note. The
co-liquidators, Johannes Hendrik Du Plessis and Krishna Ruben
Vengadesan, were granted consent by the Master to conduct
an inquiry
in terms of Sections 417 and 418 of the Companies Act 61 of 1973.
[5.1] The
Applicant stated that the Applicant and Eckersley have never
consented to appoint any legal representatives
to act on behalf of
the co-liquidators as required in
Section 73
of the
Insolvency Act,
24 of 1936
to hold this enquiry. This point was not pursued during
argument. Therefore, the Applicant and Eckersley have never consented
to
any legal charges incurred by the co-liquidators and/or Slick, the
company in liquidation, being paid directly by the Applicant
and
Eckersley to such legal representatives. The Respondent started to
send the Applicant’s invoices directly and requested
that the
Applicant make payments. As a layperson, the Applicant accepted that
such payments would be made into the personal account
of the
Respondent, as the legal representatives of the co-liquidators.
[5.2] These
invoices were sent to a total of R 750,179.20, minus a credit note of
R 236,405.50. The Applicant made a
payment of R 377,576.30, which
left a balance of R 136,197.40. The Applicant disputed this amount as
he did not believe the Respondent
provided such services. These
invoices were also made out to Slick, the company in liquidation, but
the bank details were those
of the Respondent's bank account.
[5.3] In
paying towards these invoices, the Applicant believed that as a
creditor, he was liable for the costs of the
enquiry. However, after
receiving legal advice, the Applicant was informed that such expenses
should have been requested from Slick,
the company in liquidation,
and paid by the estate if any funds were available. Only the
shortfall was to be claimed from the Applicant.
[5.4] On 11
and 12 October 2023, letters of demand were issued by the Respondent.
On 20 November 2023, the Director
of the Respondent, Morris, deposed
to an affidavit supporting the issuance of writs against the
Applicant and Jackie Eckersley
claiming the full amount of R
750 179,20. After negotiations with the attorney of record of
the Applicant, Furman, the Respondent
agreed only to have an
attachment order issued by the Sheriff, which is to date not lifted.
[5.5] From
the L&D account attached to the Founding Affidavit, the Applicant
alleges that it is evident that the
Respondent is driving the
process. From the L&D account, the payment of R 377,576.30 is not
reflected; however, an amount of
R 78,389.36 is reflected for certain
services, such as the service of subpoenas, to an entity known as
Corporate Legal Advisers.
When the Applicant contacted them, it was
determined that they are not a legal services provider. Therefore,
the services so indicated,
which were paid for in the amount of R
78 389,36, could not have been provided by the entity.
Furthermore, subpoenas in a
Section 417
proceedings may only be
served by Sheriff. The Applicant is now reviewing the complete L&D
account as a result of these discrepancies.
[5.6] Even
though the correct figures were available, Morris, on behalf of the
Respondent, still issued a warrant with
the full value of the
invoices. This, the Applicant alleges, is fraudulent, intentional and
unlawful behaviour as the Respondent
was well aware of the correct
figures.
[5.7]
Applicant alleges the Respondent also fraudulently misrepresented to
him and Eckersley that they were liable for the
co-liquidators' legal
fees directly to the Respondent. The Applicant alleged that the
Respondent fraudulently misrepresented the
reasoning for the claimed
amount while it was used for the Respondent’s own benefit. The
Respondent has not repaid the amount
despite the Applicant's legal
representative's demand.
[5.8] The
Applicant also argues that the Respondent held himself out to be an
experienced legal practitioner who must
have been aware that the
Applicant and Eckersley were not liable for the legal fees directly
to the Respondent. Due to the fraudulent
behaviour of the Respondent,
the Applicant believes it would be just and equitable to wind up the
Respondent.
[5.9 At
the hearing of this matter, Advocate Hollander argued that this
matter should rather be considered in
terms of
Section 81(1)(
c) (ii)
of the
Companies Act 71 of 2008
and not
section 344
(h) of the old
Companies Act 61 of 1973. The Section in the old Companies Act refers
to insolvent companies, and the section in
the new Companies Act
refers to solvent companies.
[5.10] In
amplifying this argument, the Applicant now requests the Court to
consider the matter in terms of different sections
in another Act.
Advocate Hollander referred me to three new cases that are not on the
Applicant’s heads or appear in the
Applicant’s list of
authorities. I extended an invitation to the Respondent to address
this argument and provide the court
with other case law against these
so provided by Advocate Hollander. The Respondent then filed
supplementary heads uploaded onto
Caselines on 9 April 2025 supported
by a list of authorities.
. [5.11]
Advocate Hollander argued that the winding up of an entity may rely
on any specific legislation and that there is no problem when
reference is made to a different section of different acts in the
pleadings. It is also argued that any objection to the argument that
this matter may now be considered in terms of different legislation
is against the mentioned authorities.
[5.12] During the
argument, Advocate Hollander indicated that it is in the court’s
discretion, although a narrow discretion,
to grant a final order even
though the Applicant only applied for a provisional order. Advocate
Hollander argued that there is
no suggestion of further information
to be provided by the Respondent, no factual basis for a provisional
order, and no reason
to allow the Respondent an additional
opportunity. Advocate Hollander also argued that the Respondent must
convince the court to
grant a provisional order.
[5.13] Advocate
Hollander argued that the court should only have reference to the
Founding Affidavit and Answering Affidavit
and should ignore the
Replying Affidavit, except for the reference to the paragraphs
concerning the other cases against the Respondent
also referred to by
Advocate Newton in his argument. In the Replying Affidavit, reference
is made to an order for
de bonis propriis
costs, which
Advocate Hollander indicated will not be proceeded with.
RESPONDENT’S
CASE
[6]
In the Answering Affidavit, the Respondent alleges that this
application is vexatious and a
mala fide
abuse of the court
process to defame, harass and embarrass the Respondent as a result of
the Respondent levying a contribution
against the applicant in the
insolvent estate of Slick, which the Applicant denies. The Respondent
asked for the application to
be dismissed with costs on the
attorney-client scale.
[6.1] The
Respondent argues that the application is fatally defective as it
does not make out a case in its papers that
the Respondent is
insolvent and cannot pay towards its debts, which is required in
terms of Section 344 (h) of the old Companies
Act.
[6.2]
Respondent denies that the letter of demand was irrelevant or that
the Respondent’s conduct is unlawful.
The Respondent further
alleges that there is no
bona fide
dispute regarding the
Respondent’s fees concerning the letters from the Respondent's
legal representative. When requests
did not work, it resorted to
formally demanding payment and issuing warrants of execution.
[6.3] The
Respondent denies that section 73 is available for this claim for the
winding up of the Respondent.
[6.4] The
Respondent further alleges that the mistake of not setting off the R
377 576,30 in the L&D account was
an unfortunate error on the
part of the Respondent’s cost consultant who drew up the bill
of costs. The Respondent alleges
that this was a
bona fide
error that will be corrected in the second liquidation and
distribution account and is not a fraudulent intent on the
Respondent’s
part.
[6.4.1] The Respondent
alleges that the Applicant is still liable for the payment of R
136,427.40. It is also admitted that
the Applicant has launched
an application to review the liquidation and distribution account.
[6.4.2] The Respondent
denies that the Applicant is a creditor of the Respondent and is
therefore not entitled to the order claimed
in this application.
[6.5] At the
hearing Advocate Newton argued that the specific case made out in the
Founding Affidavit referred to Section
344(h) of the Old Companies
Act and that what was placed before court was a completely new case
with reference to Section 81 (1(c
)(ii) and for a final order
as it was never pleaded in the Founding Affidavit. It was also argued
that the Applicant cannot
be allowed to cherry-pick how he wants to
deal with this matter, as it needs to be restricted to what was
pleaded in the papers.
Advocate Newton also argued that Advocate
Hollander is arguing off the papers, as what he requests is not on
the papers.
[6.6]
Advocate Newton argued that you can ask for less than what was
pleaded for in the papers, not more, and therefore,
the Applicant
cannot ask for a final winding up order. Advocate Newton argued that
the Applicant never made any averments that
the Respondent is
insolvent and that there is no doubt about what the case is placed
before court with reference to the Replying
Affidavit of the
Applicant.
[6.6.1] The
paragraphs referred to three further cases, two defamation cases for
R 10 million, case 16103/2022 where an order
was granted for costs
against the Respondent jointly and severally with their client being
the same liquidators as in the Slick
matter and a counterclaim by Ms.
Cabral against the Respondent for an amount of R 95 000,00 for
legal fees paid to the Respondent
against the same liquidators as in
the present matter where the same conduct was detected and a further
paragraph where the Applicant
states that as a result of these
further cases
“
I reasonably
doubt that the Respondent can make payments of such an amount, or any
ordered substantial payments concerning the abovementioned
claims”
.
[6.6.2] Advocate Newton
argued that the Applicant clearly made out a case of insolvency by
referring to these liabilities of the
Applicant and also argued that
these claims are commercial claims and therefore cannot support the
argument that this matter can
now be considered in terms of the New
Companies Act.
[6.7]
Advocate Newton argued that the Applicant is alleging that the
Respondent did not subtract the amount and included
the full amount
into the L&D account. Still, the Applicant made no efforts to
claim the amount back from the Respondent. As
the issue is only an
error in the L&D account, it will be rectified in the review
application submitted by the Applicant, which
is still pending. The
Respondent denies that this error is dishonesty on the part of the
Respondent. Also, it is argued that the
L&D account was laid open
for inspection during which time the Applicant could object to the
account.
[6.8]
Advocate Newton also argued that it is obvious that the Applicant was
to pay for the authorised enquiry and referred
me to the minutes of
the three proven creditors and argued that those minutes confirm the
obligation of the Applicant to the Respondent.
Advocate Newton also
argued that this is a red herring as there were no funds in the
estate and therefore the Applicant was ultimately
responsible for the
payment of the enquiry.
[6.9] I was
also referred to the Master’s order, which it was argued
indicates that the Applicant must pay for
the costs of the enquiry.
Therefore, the Respondent acted correctly in issuing a letter of
demand and requesting payment; otherwise,
costs would have been
requested from the Applicant.
[6.10] No case
before this court for the winding up of the Respondent, just as a
result of the fact that the paid amount was
not subtracted from the
amount as stated in the L&D account. Advocate Newton argued that
there is no difference in whether
the amount is to be paid to the
Respondent or the Liquidators, as the Respondent was working on
behalf of the Liquidators. The
Applicant indemnified the Liquidators
and, therefore, the Respondent against such costs. In the
correspondence, the Applicant agreed
to pay these costs.
[6.11] Advocate
Newton also referred to the facts that the Applicant first paid and
then objected to the work of the Respondent
when the outstanding
amount was requested after they had agreed to pay as the Applicant
alleged they cannot pay the legal representatives
of the liquidators.
[6.12] Advocate
Newton argued that the bottom line is that the Respondent made a
mistake, with the wrong amount in the L&D
accounts, which will be
rectified. Therefore, it is not fraudulent, as the L&D account is
subject to review.
[6.13] Advocate
Newton then summarised the case of the Respondent by stating that the
Applicant is not a creditor of the Respondent,
that the Applicant did
not pay the Respondent’s debt, did not pay the account sent,
and the Respondent is not responsible
for the costs of the enquiry.
Therefore, the Applicant undoubtedly owes the cost of the enquiry and
must settle it by paying the
amount directly to the Respondent.
[6.14] Matter is to
be dismissed with attorney-client costs.
ANALYSIS
[7]
In amplification of the argument by Advocate Hollander that the court
is allowed to consider a matter in terms of a different
section in a
different Act, the court was referred to the following caselaw:
[7.1]
Minister of Justice, Nationwide Truck Hire (Pty) Ltd 1981(4) SA
826(A) 833G – 834D
“
As to (a) and (b) it is true
that the respondent did not specifically rely on s 171(1) (a) in its
affidavit supporting the application
to the Court a quo. But its
counsel invoked, and the relief claimed in its application was wide
enough to cover the relief granted
under the provision
.
……………..
Hence, provided all the
relevant facts were before the court a quo, the issue whether or not
the vehicle was returnable to respond
under s171(1)(a) was one of law
which the Court a quo could entertain and determine even though it
was not specifically raised
or relied on in the affidavits supporting
respondent’s application. See
Van Rensburg v VVan
Rensburg en Andere 1963(1) SA 505 ( A) and 510 B and Sentrale Kunsmis
Korporasie ( Edms) Bpk v NKP Kunsmisverspreiders
( Edms)
(Bpk) 1970(3) SA 367(A) at 404D – G
The
question is, were all the relevant facts before the Court a quo
.
[7.2]
In the matter
of
Swissborough Diamond Mines (Pty) Ltd and
others v Government of the Republic of South Africa and others
1999(2) SA 279 (T) 324(h)
– 325 ( C )
reference
is made to the
Heckroodt NO v Gamiet
1959(4) SA 244 ( T ) at 246 A – C and Van Rensburg v Van
Rensburg en Andere
1963 (1) SA 505
A at 509 E – 510 B
where it was held that “
a
party in motion proceedings may advance legal argument in support of
the relief or defence claimed by it even where such arguments
are not
specifically mentioned in the papers, provided they arise from the
facts so alleged. As was held in
Cabinet
for the Territory of South West Africa v Chikane and Another 1989(1)
SA 349 (A) at 360G
the principle is
clear but its application is not without difficulty.
In
Minister van
Wet en Orde v Mashoba 1990(1) SA 280 (A) at 285G
it
was held that this principle “word egter gekwalifiseer deur die
voorbehoud dat die Hof alleen so kan optree as daar geen
onbillikheid
teenoor die respondent geskied nie. In die sake word hierdie element
gewoonlik uitgedruk deur te vereis dat alle relevante
feite voor die
Hof moet wees… Hierdeur word die mees voor die hand liggende
bron van moontlike onbillike benadeling van
die respondent
uitgeskakel”.
In determining
whether there is prejudice, regard must be had to the case that has
to be met. It is not permissible to consider
…the affidavit in
isolation. To the extent that the parties' affidavits went
further than may have been necessary
to answer the case as presented,
it cannot be postulated a priori that that party would not be
prejudiced if their affidavits are
relied upon to determine the
nature and ambit of the hearing that took place”.
[7.3]
The Respondent opposed this in his Supplementary Heads and during
argument as he argues that the Respondent met the
case made out by
the Applicant in the Respondent’s Answering Affidavit as the
Respondent denied that he was insolvent, pointing
out that its
conduct in having invoiced for the costs of the enquiry could not
possibly amount to fraud, that the liquidators were
authorised to
hold the enquiry in terms of the resolutions adopted by Slick’s
proven creditor and that the Master has ordered
that the Applicant is
to bear the costs of the enquiry. The argument in terms of Section
344(h) persisted in the Applicant's heads
of argument, although the
entire argument was revised at the hearing of the matter. At the
hearing of the matter, the Replying
Affidavit was abandoned, reliance
on Section 73 was abandoned, any suggestion that the Respondent is
insolvent was abandoned, and
an argument was provided in terms of
section 81(1) (c ) (ii).
[7.3.1] Respondent also
argues that the court should dismiss the approach of Advocate
Hollander on behalf of the Applicant as it
amounts to an
impermissible ambush, as an entirely different case is now placed
before the court as it is a different case not
supported by the
averments made in the Founding Affidavit and that the Answering
Affidavit stands as none of the averments made
by the Respondent were
answered to as Advocate Hollander abandoned the Replying Affidavit.
[7.3.2] In amplification
of this argument, Advocate Newton argues that in civil litigation
parties should be held by the averments
made in their pleadings with
reference to
Fischer and Another v Ramahlele and Others
2014(4)SA 614 ( SCA) and the Constitutional Case of One Movement SA
NPC v President of
the RSA
2024 (2) SA 148
( C C ).
[7.3.3] Concerning the
caselaw so provided by Advocate Hollander as referred to above,
Advocate Newton argues that the same provides
no basis to permit this
court to grant relief not sought by the Applicant in its founding
papers on an entirely different basis
to that relied upon in its
founding papers. Advocate Newton also argues that the court should
notice that whatever was pleaded
by the Respondent in its Answering
Affidavit now stands uncontested as the Applicant abandons the
Replying Affidavit.
[7.4]
Following the caselaw referred to above, the only time that this
court can consider the matter in terms of section
81(1) ( c )(ii) now
is if all the facts in this matter are pleaded in the Founding
Affidavit by the Applicant to ensure that there
is no prejudice
against the Respondent.
[7.5] The
crux of this matter concerns the mistaken belief on the side of the
Applicant and the belief on the side of
the Respondent that the costs
of the enquiry are to be paid to the Respondent directly by the
Applicant and Eckersley. This is
taken from the order of the Master
dated
26 November 2021
which reads as follows:
“
That JOHN
MEYRICK WILLIAM SAYERS AND JACKIE ECKERSLEY be ordered to pay the
costs of the enquiry subject to the right to approach
the Master of
the High Court for an order that the costs of the enquiry be paid as
costs in the administration of SLICK AIRCRAFT
COMPANY ( PTY) LTD ( IN
LIQUIDATION), should the estate as a result of the enquiry recover
assets for the benefit of the general
body of creditors of the
estate
.
[7.5.1] In reading the
order it is clear that the enquiry must be held. Then it must be
determined through the administration of
the estate whether there are
assets found from which the cost of the enquiry may be paid with the
consent of the Master. Then,
only, if there is a shortfall, the costs
can be claimed from the Applicant and Eckersley.
[7.6] From
the facts as pleaded in the Founding Affidavit by the Applicant, the
Master granted consent to the Co-liquidators
to hold an enquiry, the
Applicant alleges that it never gave permission to the Co-Liquidators
to appoint a legal representative
and the Applicant and his legal
representative were under the mistaken belief that it owed the
Respondent.
[7.7] The
invoices were issued from 31/08/2021 to 30/04/2022, totalling R
750 179,20 and payments were made on
08/12/2021, 24/02/2022, and
06/05/2022, totalling R 377 576,30. As a result of this
mistaken belief, an amount of R
377 576,30 was paid directly to
the Respondent.
[7.8] The
Respondent then sent further invoices and requested the remainder of
the alleged amount owed, amounting to
R 136,197.40. The Applicant
disputed this amount, and it was subsequently determined that it had
no direct obligation to the Respondent
for any amount.
[7.9] The
Respondent also relies on the letters exchanged between himself and
the legal representative of the Applicant,
Furham, who was under the
mistaken belief that the Applicant must pay such costs, including the
request for indemnity, although
this alleged indemnity was not
attached to the Answering Affidavit and that these costs must be paid
directly to the Respondent.
[7.10] The
Applicant sets out why the Applicant disputes the alleged remaining
amount and attaches the invoices to the Founding
Affidavit, which
references the Respondent's bank account. These invoices were also
made out to Slick, the company in liquidation.
[7.11] In the
Founding Affidavit, the Applicants attached the Resolution of the
creditors dated
7 June 2021
with specific reference to
paragraph 5 thereof which read as follows:
“
The Liquidator
be and is hereby authorised in his sole and absolute discretion to
employ and engage the services of attorneys and/or
counsel (senior
and/or junior) and /or accountants and/or bookkeepers and/or any
employee of the insolvent and/or recording gents
and/or any other
persons who in the sole discretion of the Liquidator may be of
assistance in the winding up of the company in
relation to any matter
referred to in 4 above and
further
to pay all the costs thereof of whatsoever nature out of the estate
as costs incurred in the liquidation. ( my emphasis)
4.3
Hold any inquiry in the affairs of the company and/or any matter
relating thereto.
[7.12] On
29
September 2021
, the Respondent requested indemnity from the
Applicant for the cost of the enquiry, including costs for the venue
and transcription,
but this indemnity was never attached to the
Answering Affidavit.
[7.13] From the
above, the resolution of the creditors stipulates that the costs of
the enquiry must be paid from the estate,
where the order of the
Master stipulates that the Applicant will be held responsible for
these costs although same can be paid
from the estate on application
to the Master. This defeats any indemnity that might or might
not have been granted, as certain
steps must first be taken by the
Liquidators before any costs could have been claimed from the
Applicants.
[7.14] The
Applicant then sets out the writ of executions that the Respondent
issued for an amount of R 738 752,60 against
Ms Eckersley and an
amount of R 11 480,64 against the Applicant for a total of R
750 233,40 dated
20 November 2023
with no explanation on
why these specific amounts are claimed from the respective parties,
neither is the amount paid reflected
or the amount for which a credit
note was issued. As a result, assets were attached, which attachment
has to date not been lifted.
[7.15] The fact
that a letter of demand was sent to the Applicant and why they
ignored it is explained in the explanation
of the attachment by the
Sheriff. The court is then referred to the L&D account which was
approved on
12 September 2023.
This proves that the invoices
referred to above was issued nearly 2 years before the L& D
account submitted to the Master,
which shows that the majority of the
expenses are in the name of the Respondent, amounting to R 584,148.75
which does reflect the
credit note amount but not the amount so paid
by the Applicant. The Applicant then further explains why they
dispute the
complete L&D account in a letter dated
22 November
2023.
[7.15.1]
The Applicant also raised in the Founding
Affidavit that the
Respondent did not correct the incorrect amounts in the L & D
account and did not explain these invoices.
[7.15.2]
The Applicant also raised the misrepresentation
to the Applicant, the
Master by the submission of the L&D account in the Founding
Affidavit, which the Applicant alleges confirms
that the winding up
of the Respondent will be just and equitable.
[7.16] From the
aforementioned facts, I accept that all applicable facts have been
placed before this court, which granted
the Respondent the right to
answer thereto in his Answering Affidavit and therefore that the
matter can be considered in terms
of Section 81(a)(c)(ii). I am of
the view that there is no prejudice that the Respondent would suffer
if the matter is considered
in terms of section 81(1)(c)(ii) instead
of 344(h).
[8]
In terms of the argument that there is an entirely different case
before this court and that this is an ambush, as the
Applicant is to
be restricted to what is pleaded in the Founding Affidavit. It is
trite that the legal basis for winding up under
Subsection 81(1)( c)
(ii) of the new
Companies Act 71 of 2008
is the same as that
under
section 344
(h) of the old Companies Act 61 of 1973. This
aspect has been dealt with in
Muller v Lilly Valley (Pty)
Ltd [2012]1 ALL SA 187 ( GSJ), Budge NO, Midnight Storm Investments
256 (Pty) Ltd 2012(2) SA 28 ( GSJ
at 34 pars (5) - [12] and
Thunder Cats Investments 92 ( Pty) Ltd and Nkomyane Economics
Prospecting & Investment ( Pty)
Ltd 2014(5) SA ( SCA) at pars
[12]- [20].
[8.1] Both of
these sections in the different legislation refer to winding up when
the court determines that it is just
and equitable.
[8.2] In the
matter of
Budge v Midnight Storm Investments 2012(2) SA 28
,
Judge Meyer refers to the five broad categories under which an
insolvent company under section 344 (h) of the Old Companies Act
and Section 81 (1)(c) (ii) may be considered in an application for
winding up if just and equitable. However, the court is not
restricted thereto. This is stipulated in
Rand Air (Pty) Ltd v
Ray Bester Investments (Pty) Ltd 1985(2) Sa 345 ( W) at 349G –
350H
which includes the illegality of objects of the
Company and fraud committed in connection therewith. Judge Meyer also
refers
to the matter of
Wray v Minister of the Interior and
Another 1973(3) SA 544 (W) at 561 A
where Judge Coetzee
stated that
“
It is trite law
that when the words of an older statute are either incorporated or
made part of a latter statute, this is understood
to be done with the
object of adopting legal interpretation which has been applied to
them by the Courts”.
[8.3] On the
evidence before me, it is clear that a case has not been made out
that the Respondent is insolvent, although
reference is made to the
other three cases and the Applicant doubts that the Respondent would
be able to pay all his liabilities.
That being the case, the winding
up of the Respondent should be considered in terms of section 81(1)(c
)(ii) of the
Companies Act 71 of 2008
and not section 344 (h) of the
Companies Act 61 of 1973. In
Knipe v Kameelhoek 2014(1) SA 52
Judge Daffue stated in par [23] that:
“
Having said
this, the approach in considering whether it is just and equitable to
wind up a company in terms of the
Companies Act 71 of 2008
is, in
essence, not different to what is or was in accordance with the 1973
Act, which still applies to the winding-up of companies
which are not
solvent.
The
legal basis for winding-up remains the same.(my emphasis)
[8.4]
Considering the authorities and facts referred to herein, I cannot
agree with the argument that a completely different
case is now
placed before this court or that this is an ambush.
[9]
In the matter of
Thunder Cats v Nkonjane Economic Prospectus
2014 95) SA 1
at par [15] Judge Malan considered the
application for winding up when it is considered to be just and
equitable and stated:
“
A winding-up on
this basis postulates not facts but only a broad conclusion of law,
justice and equity as a ground of winding-up.
The subsection is not
confined to cases which were analogous to the grounds mentioned in
other parts of the section. Nor can a
general rule be laid down as to
the nature of the circumstances that had to be considered to
ascertain whether a case is within
the phrase. There is no fixed
category of circumstances which may provide a basis for a winding up
on the just and equitable ground.
In Sweet and Finbain 1984(3) SA 441
(W), it was said
“
The
ground is to be widely construed, it confers a wide judicial
discretion and it is not to be interpreted so as to exclude matters
which are not eiusdem generis with the other grounds specified in s
344.
[9.1] In
Herman and another v Set-Mak Civis CC 2013(1) SA 386 FB
the court specifically agree that it would be just and equitable to
place a company in liquidation where there is a total disregard
for
the rights and claims of its creditors.
[9.2] This
principle that a court has a discretion was confirmed in the matter
of
Afgri Operations Limited v Hamba Fleet ( Pty) Ltd Limited
2022(1) SA 91 ( SCA)
at para 12 where it was held that
“
Notwithstanding
its awareness of the fact that its discretion must be exercised
judicially, the court a quo did not keep in view
the specific
principle that, generally speaking, an unpaid creditor has a right,
ex debito justitiae, to a winding up order against
the Respondent
company that has not discharged that debt
.
[9.3] From
the Answering Affidavit and the argument before the court, it is
evident that the justification for the argument
by the Respondent
that the Applicant had an obligation to pay these invoices is taken
from the Master’s orders and the minutes
of the creditors. The
Resolution of the Creditors was issued on
7 June 2021
, and the
Master’s orders were issued on 26 November 2021. These invoices
were sent from 31 August
2021
, prior to the Master’s
order but after the Resolution of Creditors.
[9.4] The Resolutions of
the creditors stipulate that all costs of any legal representatives
were to be paid from the est
ate
. The Master's order indicates
that the Applicant and Eckersley were to pay these costs, subject to
the condition that the Master
may be requested to allow that such
expenses be paid from the estate, if funds are available. This placed
an obligation on the
co-liquidators and/or the Respondent as their
appointed legal representative, that the L&D account was to be
compiled, submitted
to the Master and only when it is found that
there are no funds or a shortfall of the costs in this estate, then
such costs or
the shortfall may be claimed from the Applicant and
Eckersley by the liquidators. I agree with Advocate Hollander that
there is
no obligation on the Applicant to pay these costs directly
to the Respondent and that the
nexus
exists through the
co-liquidators to the estate and the invoices was also made out to
Slick( the company in liquidation) where
these co-liquidators first
had to take specific steps before any such claims could have been
made from the Applicant and Eckersley.
[9.5] It is clear that
the invoices and the writ of execution predate the L&D account;
therefore, the Respondent could not have
had any information when the
writ and invoices were issued that the estate had no funds, the L&D
account was not approved as
yet, the enquiry was not even held when
the first invoices were send and therefore no obligation existed for
the Applicant and
Eckersley to pay.
[9.6] In the Founding
Affidavit, it is also stated that the Applicant is now reviewing the
L&D account. However, the Respondent
indicates in the affidavit
and during argument that they intend to rectify the L&D account
through the review process. The
question remains whether this would
have been remedied if the Applicant had simply proceeded to pay the
amount claimed by the Respondent,
as there is no evidence before this
court that the Respondent has taken any action to rectify this
alleged error.
[9.7] It is also noted
that the Respondent issued a writ in 2023 for the wrong amount
R738 752,60 (to Eckersley) + R11 480,14
(to Applicant)
=
R 750 233,24, allowing the attachment of assets to this amount.
This was done despite the Respondent being aware that the
amount was
incorrect and not even the amount stipulated in the L&D account
(although that amount is also wrong). The attachment
has not been
lifted to date, despite full knowledge that the wrong amount was
attached.
[9.8] There is no
evidence placed before me that the Respondent has done anything to
correct these wrong amounts on the writ or
the L&D account except
to state that it is an error in the L&D account which will be
rectified now that the Applicant has
issued a review application
against the L&D account but at what and whose costs. It is also
evident from the evidence that
the Respondent to date still believes
that he is correct in claiming such funds from the Applicant and that
he bases it on the
Master’s orders or the Resolutions for the
creditors, which does not state that the Respondent is allowed to
claim such funds
directly from the Applicant.
[9.9] The
Applicant alleged that, as a result of the misrepresentation and
fraud by the Respondent to both himself and
Eckersley, they, as
creditors in this winding-up application, were to pay the costs of
the enquiry directly to the Respondent.
Consequently, costs for R
377,576.30 were paid in error.
[9.10] I agree with
the argument of the Applicant that the behaviour of the Respondent
was intentional and unlawful. This
conduct is damaging to the rule of
law, which allows an attorney to proceed to request funds directly
from a creditor in winding-up
proceedings.
[9.11] The
Respondent, as a seasoned practitioner with experience in
liquidations, acted before the Master’s orders
by issuing
invoices directly to the Respondent and after the Resolution of the
Creditors, which stated that the costs of legal
representation are to
be paid from the estate. Despite that, the Respondent represented to
the Applicant that he and Eckersley
is to pay the costs of the
enquiry directly to the Respondent and rely on the Master’s
orders. This misrepresentation of
the facts led to the payment of the
funds to the Respondent.
[9.12] Making
things even worse, a writ of execution was then issued for the total
amount of R750,233.24, and the attachment,
which was issued after
negotiations between the Respondent and Mr. Furham on behalf of the
Applicant and Eckersley, has to date
not been lifted. The Respondent
has also taken no action to amend the amount submitted to the Master
on the L&D account and
is now pleased that the matter is under
review by the Applicant, as the error will be corrected. It would
have been expected that
the Respondent would do everything in its
power to amend the L&D account or at least uplift the attachment
order, but nothing
has been done.
[9.13] There is
also no accounting for these amounts, no attempt to rectify the
invoices, no justification of the fees so
claimed or the fees, which
are all aspects which have been raised in the Founding Affidavit.
The Respondent also alleged
that a formal bill of costs drawn up by
its costs consultant on request from Mr Furham the legal
representatives of the Applicant.
Still, neither this bill nor a
confirmation from the alleged costs consultant is attached to the
Answering Affidavit, nor is an
indication even given that the same is
to be provided in further affidavits.
[10]
Considering the facts in light of the applicable timeline, what
was ordered by the Master and what was decided
by the creditors, I am
of the view that the Applicant is a creditor of the Respondent, as
the Respondent's dispute that such debt
was due is not based on
reasonable grounds. If the denials are stripped off the Respondent’s
answering affidavit, it remains
that these funds were not due to be
paid to the Respondent, as there is no nexus between the Applicant
and the Respondent and therefore
stands to be repaid to the
Applicant.
[11]
Following the joint practice note, the Applicant requested either a
provisional or a final order, which the Respondent
objected to as the
Applicant only applied for a provisional winding-up order in the
Notice of Motion. In the matter of
Johnson v Hirotec (
Pty) Ltd 2000 (
4) SA 930
( SCA) at par 9,
the Supreme Court
of Appeal held that
“
The Act does
not require a final order to be preceded by a provisional order .From
the information given to us by counsel, it would
seem that there is
no longer a uniform practice in this regard throughout the country.
According to the Practice Manual of the
Transvaal Provincial
Division, a judge of that Division appears to have a wide discretion
to grant a provincial order or a final
winding-up order, as the case
may require and is under no constraint to issue a provisional order
as a matter of course.”
[11.1] In the
matter of
Hans Merensky Landowners association (Pty) Ltd v
Southern Sky Residential Properties (Pty) Ltd (2025/080158)[2025]
ZALMPPHC125(24
June 2025)
at par 60 with reference to the
matter of
Business Partners Limited v Montache Villas (Pty) Ltd
(62454/2021)[2023]ZAGPPHC 1147 ( 6 September 2023)
Vorster AJ stated that which Van Wyk AJ held ,as being correct:
60.3
Neither the old nor the new
Companies Act requires
a final order
to be preceded by a provincial order. The default position is
therefore that a final order should be granted. ( This
is in line
with the practice manual of the Gauteng divisions) unless the court
is satisfied, on facts properly established on affidavit,
that the
interests of all affected or interested parties will not be
adequately safeguarded if a final winding up order is granted.
In
which case, a provisional order should be granted.
[11.2] The issues
in this matter have been fully ventilated and the Respondent has put
nothing forward to persuade me that
other relevant facts would come
forward if a
rule nisi
is granted.
CONCLUSION
[12]
Based on the authorities and facts in this matter, I am of the view
that there is no legally sustainable defence to the
Applicant’s
claim for a winding up. There are also no relevant facts which can
persuade me not to grant a final order.
COSTS
[13]
The Applicant requests costs in the estate on Party and Party Scale
C, alternatively that costs be in the final winding
up of the
Respondent. I cannot find any reason why costs should not be granted.
[14]
Therefore, the following order is made.
[14.1] The
Respondent is placed under final winding up in the hands of the
master of the High Court
[14.2] The costs of
the application are costs in the final winding up of the Respondent.
ENGELBRECHT
T
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
LOCAL DIVISION
Delivered:
This judgment and order were prepared and
authored by the Judge whose name is reflected and is handed down
electronically by circulation
to Parties / their legal
representatives by email and by uploading it to the electronic file
of this matter on Case Lines. The
date of the order is deemed to be
the 8July 2025.
Appearances
:
For
the Applicant:
Advocate Hollander
For
the Respondent: Advocate
Newton
Date
of Hearing:
18 March 2025 plus extra heads
received on 9 April 2025
Date
of Judgment:
08 July 2025
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