South Africa Case Law

Van Den Heever N.O and Another v Merchant Commercial Finance 1 (Pty) Ltd t/a Merchant Factors and Another (7595/2024)

Van Den Heever N.O and Another v Merchant Commercial Finance 1 (Pty) Ltd t/a Merchant Factors and Another (7595/2024) [2025] ZAWCHC 317 (29 July 2025)

Court

Western Cape High Court, Cape Town

Case number

7595/2024

Judge

Mangcu-Lockwood

The court held that sections 348 and 341(2) of the Companies Act 1973 apply to winding-up orders granted under section 130(5)(c) of the Companies Act 2008. The deeming provision in section 348 operates to fix the commencement of winding-up at the date of presentation of the application, regardless of whether the application is brought under the 1973 or 2008 Act. The payments made by JPK to Merchant after the presentation of the winding-up application are rendered void by the retrospective effect of section 341(2), as they undermine the concursus creditorum and the rights of other creditors. T…

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• Winding Up Of Companies
• Void Dispositions
• Concursus Creditorum
• Business Rescue Conversion
• Companies Act 1973
• Companies Act 2008

Smith N.O and Another v Magnus N.O and Others (4220/2022; 4221/2022; 4222/2022)

Smith N.O and Another v Magnus N.O and Others (4220/2022; 4221/2022; 4222/2022) [2025] ZAFSHC 109 (20 March 2025)

Court

Free State High Court, Bloemfontein

Case number

4220/2022; 4221/2022; 4222/2022

Judges

Mhlambi, Loubser, Daniso

The court found that the payments made by the business rescue practitioner to the respondents after the commencement of winding-up proceedings were not bona fide, not made in the ordinary course of business, and improperly preferred certain creditors over others. The business rescue practitioner acted outside the scope of the adopted business rescue plan and without proper creditor approval. The respondents were aware of the company's financial distress and the pending liquidation application. The courts a quo misapplied the law by validating the payments under section 341(2) of the Companies…

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• Business Rescue
• Void Dispositions
• Companies Act 1973
• Preferent Creditors
• Liquidation Proceedings
• Judicial Discretion

Macneil Plastics (Pty) Ltd v Van den Heever N O and Others (906/2023)

Macneil Plastics (Pty) Ltd v Van den Heever N O and Others (906/2023) [2024] ZASCA 181 (20 December 2024)

Court

Supreme Court of Appeal

Case number

906/2023

Judges

Zondi DP, Kgoele JA, Gorven AJJA, Makume AJJA, Chili AJJA

The Supreme Court of Appeal held that payments made by a company after the commencement of liquidation are void under s 341(2) of the Companies Act 61 of 1973 and cannot be validated by a subsequent order placing the company in business rescue. The business rescue order under s 131(6)(b) of the Companies Act 71 of 2008 merely suspends liquidation proceedings; it does not terminate or set aside the liquidation order. The concursus creditorum established by liquidation remains unaffected, and the rights of creditors cannot be altered by subsequent business rescue proceedings. There is no statut…

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• Company Liquidation
• Business Rescue
• Void Dispositions
• Concursus Creditorum
• Statutory Interpretation

Cooper N.O and Others v VAB Sales and Distribution (Pty) Ltd (1498/22)

Cooper N.O and Others v VAB Sales and Distribution (Pty) Ltd (1498/22) [2024] ZAWCHC 379; [2025] 1 All SA 178 (WCC) (19 November 2024)

Court

Western Cape High Court, Cape Town

Case number

1498/22

Judge

S Mthimunye

The court found that all four payments made by Cape Basic Products (Pty) Ltd (in liquidation) to VAB Sales and Distribution (Pty) Ltd after the commencement of winding up constitute void dispositions under section 341(2) of the Companies Act. The respondent’s argument that Savers Lane Holdings (Pty) Ltd was a separate entity was rejected, as evidence established that Savers Lane was merely the trading name of the third applicant. The payments were not made in the ordinary course of business but were preferential, giving the respondent an unfair advantage over other creditors. The court determ…

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• Winding Up Of Companies
• Void Dispositions
• Preferential Payments
• Creditor Protection
• Companies Act Section 341
• Liquidation Orders

Hill N.O and Another v Liberty Group Limited and Others (M 653/2022)

Hill N.O and Another v Liberty Group Limited and Others (M 653/2022) [2024] ZANWHC 316 (11 October 2024)

Court

North West High Court, Mafikeng

Case number

M653/2022

Judge

Morgan

The court found that the liquidators failed to establish that the funds from which the impugned payment was made factually and lawfully belonged to Aurita CC. The evidence presented did not refute Makelaars CC's version that the funds were received in error and did not form part of the insolvent estate. The liquidators did not file a replying affidavit to address these averments, nor did they join necessary parties such as Reynecke and de Beer, who had direct and substantial interests in the outcome. The principles of commixtio and mistaken payments dictate that erroneous deposits do not conf…

Source excerpt

• Liquidation Proceedings
• Void Dispositions
• Joinder Of Parties
• Commixtio
• Mistaken Payments

Cooper N.O and Others v Blue Label Distributions (2022/5762)

Cooper N.O and Others v Blue Label Distributions (2022/5762) [2024] ZAGPJHC 615; [2024] 3 All SA 800 (GJ) (2 July 2024)

Court

South Gauteng High Court, Johannesburg

Case number

2022/5762

Judge

Maier-Frawley

The court found that the payments made by CBP to Blue Label after provisional liquidation were not ring-fenced for suppliers and were deposited into Blue Label's general bank account, over which Blue Label had sole disposal rights. Blue Label benefitted from the payments by earning commission and improving its position, thus it was not a mere conduit. The payments constituted void dispositions under section 341(2) of the Companies Act, as they were made after the establishment of the concursus creditorum and preferred Blue Label above other creditors. The court held that the liquidators were…

Source excerpt

• Winding Up Of Company
• Void Dispositions
• Concursus Creditorum
• Preferential Payments
• Companies Act Section 341
• Insolvency Act Interpretation

Smith N.O. and Another v Pinnar Seed (Pty) Ltd and Another (4999/2022)

Smith N.O. and Another v Pinnar Seed (Pty) Ltd and Another (4999/2022) [2023] ZAFSHC 396 (9 October 2023)

Court

Free State High Court, Bloemfontein

Case number

4999/2022

Judge

Van Zyl

The court found that the cession in securitatem debiti was validly concluded and ratified by the business rescue practitioner, with FNB waiving its rights to the crop proceeds. However, the payments made to the first respondent after the deemed date of liquidation fell within the scope of section 341(2) of the Companies Act, 61 of 1973, and were therefore void unless validated by the court. Applying the judicial discretion under the proviso to section 341(2), the court considered the transaction's bona fides, the benefit to the general body of creditors, and the absence of improper preference…

Source excerpt

• Company Liquidation
• Cession In Securitatem Debiti
• Business Rescue
• Void Dispositions
• Judicial Validation Of Payments

Smith N.O and Another v Magnus N.O and Others (4220/2022; 4221/2022)

Smith N.O and Another v Magnus N.O and Others (4220/2022; 4221/2022) [2023] ZAFSHC 307 (4 August 2023)

Court

Free State High Court, Bloemfontein

Case number

4220/2022; 4221/2022

Judge

Reinders

The court found that the payments made by the business rescue practitioner to the respondents after the liquidation application but before the provisional liquidation order fell within the ambit of section 341(2) of the Companies Act 61 of 1973. However, exercising its discretion, the court held that these payments were made bona fide in respect of valid and secured claims under lease agreements, benefiting the creditors as a whole. The respondents had a preferent and secure claim, acknowledged by all parties, and the payments were necessary to obtain the proceeds of the crop. The court concl…

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• Company Liquidation
• Business Rescue
• Void Dispositions
• Preferent Claims
• Ratification Of Payments

Sumeil (Pty) Ltd v Coogal Finance (Pty) Ltd and Another (A120/2022)

Sumeil (Pty) Ltd v Coogal Finance (Pty) Ltd and Another (A120/2022) [2023] ZAFSHC 277 (14 July 2023)

Court

Free State High Court, Bloemfontein

Case number

A120/2022

Judges

MBHELE, REINDERS, LOUBSER

The High Court dismissed an appeal against a monetary judgment, finding no proof that third-party payments discharged the appellant’s debt before liquidation.

• Liquidation Proceedings
• Concursus Creditorium
• Set Off
• Void Dispositions
• Master Rental Agreement
• Liquidation-proceedings

Mazars Recovery & Restructuring (Pty) Ltd and Others v Montic Dairy (Pty) Ltd (in liquidation) and Others (526/2021)

Mazars Recovery & Restructuring (Pty) Ltd and Others v Montic Dairy (Pty) Ltd (in liquidation) and Others (526/2021) [2022] ZASCA 135; 2023 (1) SA 398 (SCA) (13 October 2022)

Court

Supreme Court of Appeal

Case number

526/2021

Judges

Ponnan, Makgoka, Gorven, Hughes, Chetty

The Supreme Court of Appeal held that payments made to business rescue practitioners after the commencement of liquidation proceedings, as defined by the presentation of the application for winding-up, are void under s 341(2) read with s 348 of the Companies Act 61 of 1973 unless validated by a court order. The court rejected the appellants' argument that the Companies Act 71 of 2008 creates a statutory exception for such payments, finding that ss 143(1), 135(3), and 143(5) do not confer a right to payment after business rescue has terminated and liquidation has commenced. The practitioners f…

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• Business Rescue
• Liquidation Proceedings
• Remuneration Of Practitioner
• Void Dispositions
• Creditor Preference