Boschpoort Ondernemings (Pty) Ltd v Absa Bank Limited (936/2012) [2013] ZASCA 173; [2014] 1 All SA 507 (SCA); 2014 (2) SA 518 (SCA) (28 November 2013)

Boschpoort Ondernemings (Pty) Ltd v Absa Bank Limited (936/2012) [2013] ZASCA 173; [2014] 1 All SA 507 (SCA); 2014 (2) SA 518 (SCA) (28 November 2013)

The Supreme Court of Appeal held that commercial insolvency, not factual solvency, is the relevant test for the liquidation of companies under South African law. The court found that the appellant, although its assets exceeded its liabilities, was unable to pay its debts and was therefore commercially insolvent. The transitional provisions of the Companies Act 71 of 2008 retain the application of section 345 of the Companies Act 61 of 1973 for determining insolvency. The court concluded that the high court should have applied section 344(f) read with section 345 of the old Act, and that the appellant was properly liquidated under those provisions. The appeal was dismissed, and the order...

Citation
[2013] ZASCA 173
Parties
Appellant: Boschpoort Ondernemings (Pty) Ltd; Respondent: Absa Bank Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 November 2013
Case Number
936/2012
Procedural Posture
Civil Appeal / Appeal From North Gauteng High Court, Pretoria
Outcome
Appeal dismissed. Liquidation order confirmed.
Judges
Cachalia, Petse, Willis, Swain, Meyer
Legal Topics
Company Liquidation, Commercial Insolvency, Companies Act 1973, Companies Act 2008, Just and Equitable Winding Up
Commercial and Corporate Company Liquidation Commercial Insolvency Companies Act 1973 Companies Act 2008 Just and Equitable Winding Up

Case Brief

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Parties

Boschpoort Ondernemings (Pty) Ltd

Appellant

Absa Bank Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From North Gauteng High Court, Pretoria

Legal Issues

  1. 1 Whether the Companies Act 61 of 1973 or Companies Act 71 of 2008 applies to the liquidation of a company unable to pay its debts.
  2. 2 Whether commercial insolvency, as opposed to factual solvency, justifies liquidation under the old Act.
  3. 3 Whether the appellant, whose assets exceeded its liabilities but was unable to pay its debts, could be liquidated under the old Act.

Ratio Decidendi

The Supreme Court of Appeal held that commercial insolvency, not factual solvency, is the relevant test for the liquidation of companies under South African law. The court found that the appellant, although its assets exceeded its liabilities, was unable to pay its debts and was therefore commercially insolvent. The transitional provisions of the Companies Act 71 of 2008 retain the application of section 345 of the Companies Act 61 of 1973 for determining insolvency. The court concluded that the high court should have applied section 344(f) read with section 345 of the old Act, and that the appellant was properly liquidated under those provisions. The appeal was dismissed, and the order...

Court Disposition

Appeal dismissed. Liquidation order confirmed.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.