Cronje and Another NNO v Hillcrest Village (Pty) Ltd and Another

Waterkloofspruit Projects (Pty) Ltd (WKP) was a property development company placed in liquidation in February 2001. Its main secured creditor was BOE Bank (later Nedbank), which held mortgage bonds over the development property. The provisional liquidators obtained authority from the Master under s 386(2B) of the Companies Act 61 of 1973 to sell the property by public auction. At the auction, no competitive bids were received and BOE purchased the entire development for a nominal amount of R100 000. A liquidation and distribution account was confirmed, WKP was dissolved in June 2004, and BOE recovered part of its losses through later disposals. Several years later Hillcrest Village (Pty) Ltd and the trustees of the CMT Trust (associated with WKP’s former controller, De la Pierre) applied in the High Court under s 420 of the Companies Act to have the dissolution declared void, alleging irregularities, non‑compliance with s 82 of the Insolvency Act, fraud and collusion between the liquidators and BOE, and potential prejudice to shareholders and sureties. The High Court granted the application. The liquidators and Nedbank appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order dismissing the application with costs.

The case clarifies the scope and discretionary nature of s 420 of the Companies Act 61 of 1973, confirming that a court will not lightly set aside the dissolution of a company. It underscores that applicants must show a real and practical interest and a likelihood of benefit, and that delay, waiver of rights, and finality in liquidation proceedings weigh heavily against relief. The judgment also distinguishes the application of Insolvency Act provisions in company liquidations.