Griffin and Others v The Master of the High Court and Others

Cape Trails CC was placed under provisional winding-up in March 1998 and finally wound up in December 1998. At liquidation, the first appellant and the respondents were members of the close corporation. The liquidator convened a first meeting of members and creditors, attended only by the first appellant, at which a resolution was adopted, but no creditor claims were proved. The appellants later tendered three claims which were initially rejected by the presiding officer but subsequently admitted by the liquidator and reflected in the liquidation and distribution account. Following objections by the respondents, the liquidator prepared an amended liquidation and distribution account excluding the appellants’ claims. The appellants objected to the amended account, but the Master refused to sustain the objection. The High Court upheld the Master’s decision, finding that the liquidator lacked authority to admit the claims. The appellants appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs.

The case authoritatively clarifies that the statutory requirements for authorising a liquidator under section 386 of the Companies Act apply equally to close corporations through section 66(1) of the Close Corporations Act. It confirms that a liquidator’s power to admit or compromise claims does not exist without proper statutory authorisation, and that a members’ resolution alone is insufficient. The decision reinforces creditor protection and strict compliance with liquidation procedures in South African insolvency law.