ZNK Investments CC v Luckytso Transport and Construction CC and Others

Luckytso Transport and Construction CC owned immovable property bonded to Absa Bank Ltd. After default judgment was obtained and the property declared executable, the close corporation was deregistered for failure to submit annual returns. While deregistered, the Sheriff sold the property in execution to ZNK Investments CC. The close corporation and its sole member later applied for reinstatement and for the sale in execution to be declared invalid. The High Court ordered reinstatement and set aside the sale, holding that deregistration terminated the corporation’s existence and rendered the property bona vacantia. ZNK Investments appealed against the setting aside of the sale and the costs order.

The appeal was upheld with costs, including the costs of two counsel. Paragraphs setting aside the sale in execution and awarding costs against the appellant were replaced with an order directing the applicants to pay the costs of the application.

The case confirms at Supreme Court of Appeal level that reinstatement of a company or close corporation under s 82(4) of the Companies Act has automatic retrospective effect, validating corporate acts performed during deregistration. It provides certainty for creditors and purchasers at sales in execution and clarifies that earlier contrary authority is no longer applicable.