Eravin Construction CC v Bekker NO and Others

Ditona Construction (Pty) Ltd was placed under winding-up following an application launched on 20 October 2010, with the winding-up deemed to commence on that date. On 21 October 2010, after the commencement of winding-up, Ditona paid R389 593.49 to Eravin Construction CC. The payment was later discovered by Ditona’s liquidators, who contended that it was a void disposition in terms of s 341(2) of the Companies Act 61 of 1973. In September 2012, Eravin was placed under business rescue in terms of the Companies Act 71 of 2008, and a business rescue plan was later adopted and implemented. The liquidators sought to recover the payment from Eravin, but Eravin argued that recovery was barred by s 154(2) of the 2008 Act because the debt was a pre-business rescue debt rendered unenforceable.

The appeal was upheld with costs. The High Court’s order declaring the payment void and recoverable was set aside and replaced with an order dismissing the liquidators’ application with costs.

The judgment clarifies the interaction between liquidation under the 1973 Companies Act and business rescue under the 2008 Companies Act. It authoritatively interprets the meaning of 'debt owed' in s 154(2), confirming that void dispositions create immediate debts and that such debts, if incurred before business rescue, become unenforceable once a business rescue plan is implemented. The case provides important guidance on the limits of liquidators’ recovery rights where the recipient of a void disposition subsequently enters business rescue.