The Commissioner for the South African Revenue Service v Nyhonyha and Others

Regiments Capital (Pty) Ltd was finally wound up on 16 September 2020 at the instance of an unpaid creditor. Following the discharge of a provisional restraint order under the Prevention of Organised Crime Act that had frozen Regiments’ assets, various interested parties applied to the Gauteng Division of the High Court under s 354 of the Companies Act 61 of 1973 to set aside the winding-up. They contended that Regiments was solvent, relying on liquid assets and alleged values of shareholdings in Kgoro Consortium (Pty) Ltd and Little River Trading 191 (Pty) Ltd. SARS opposed the application, pointing to substantial unassessed but existing tax liabilities exceeding R279 million, as well as other creditor claims. The High Court set aside the winding-up and imposed conditions regulating payment to creditors and directing SARS to issue assessments within a fixed period. SARS appealed to the Supreme Court of Appeal.

The appeal was upheld. Paragraphs 1 to 6 and 8 of the High Court’s order were set aside and replaced with an order dismissing the application to set aside the winding-up with costs. The first to eleventh respondents were ordered to pay SARS’s costs of appeal jointly and severally. The liquidators’ appeal costs were ordered to be costs in the liquidation.

The judgment clarifies the proper interpretation and application of s 354 of the Companies Act 61 of 1973, confirming that setting aside a winding-up is not a matter of true discretion. It reinforces the distinction between factual and commercial insolvency, confirms that unassessed tax liabilities are relevant in insolvency enquiries, and limits judicial interference with statutory powers of SARS. The case provides authoritative guidance on when a winding-up may be set aside on the basis of subsequent events.