Mouton v Boland Bank Beperk

Johann Mouton was a member of JNJ Vloerdienste CC, which owed money to Boland Bank on an overdraft facility. The corporation was deregistered on 26 March 1993 while it still had outstanding liabilities to the bank. In terms of section 26(5) of the Close Corporations Act 69 of 1984, the bank sued Mouton personally for the corporation’s debts. After pleadings had closed, Mouton successfully applied for the reregistration of the corporation in April 1995. He then amended his plea, contending that section 26(7) operated to release him from the personal liability that had arisen upon deregistration. The High Court rejected this defence and granted judgment for the bank, whereupon Mouton appealed to the Supreme Court of Appeal.

The appeal and the application for condonation were dismissed with costs. The judgment of the court a quo was supplemented by an order directing the appellant to pay the respondent R200 841.61 plus interest at 20.375% per annum from 31 May 1995 to date of payment.

This case authoritatively clarifies the interaction between sections 26(5) and 26(7) of the Close Corporations Act. It establishes that reregistration of a close corporation does not absolve members of personal liability incurred upon deregistration. The judgment reinforces creditor protection and confirms that statutory deeming provisions restoring corporate existence do not undo accrued personal liabilities, thereby preventing abuse of deregistration procedures.