Kets Group (Pty) Ltd v Business Partners Limited

Business Partners Limited (BPL) loaned Kets Group (Pty) Ltd (Kets) R1,650,000 in terms of a 2019 loan agreement secured by a mortgage bond and cession of rental. Kets fell into arrears during 2022 and failed to remedy its default despite a statutory demand under s 345(1)(a) of the Companies Act 61 of 1973. BPL launched liquidation proceedings in October 2023, which were properly served on Kets, its employees, trade unions, and its attorneys. A provisional winding-up order was granted on 28 November 2023 and later made final on 5 March 2024, both on an unopposed basis. Kets thereafter applied for rescission of both the provisional and final winding-up orders under s 354 of the Companies Act and the common law, alleging lack of proper service, short notice, procedural irregularities, abuse of process, and that the debt was secured. BPL opposed the application.

The point in limine regarding lack of locus standi was dismissed with costs. The application for rescission of the provisional and final winding-up orders was dismissed with costs.

The judgment affirms that a company in liquidation may, through its directors, apply for rescission of a winding-up order without the cooperation of liquidators. It reinforces the strict requirements for rescission of liquidation orders under both section 354 of the Companies Act and the common law, particularly the need for exceptional circumstances, a reasonable explanation for default, and proof of solvency or a bona fide dispute. It also confirms that the existence of security does not negate commercial insolvency.