Pride Milling Company (Pty) Ltd v Bekker NO and Another

Irfan Sohail Trading (Pty) Ltd was placed under provisional winding-up on 29 June 2017 on application by a creditor, with the winding-up deemed to commence on 5 May 2017 when the application was presented. A final winding-up order followed on 14 September 2017. Between 7 June 2017 and 8 August 2017, Irfan made four payments totalling R295 000 to Pride Milling Company (Pty) Ltd for goods sold and delivered. One payment was made before the provisional winding-up order and three thereafter. The joint liquidators contended that all payments constituted void dispositions under s 341(2) read with s 348 of the Companies Act 61 of 1973. Pride Milling resisted repayment and counter-applied for validation of the payments.

The appeal was dismissed with costs, including the costs of two counsel. Pride Milling was ordered to repay the amounts received, and none of the four payments were validated.

The judgment authoritatively clarifies that courts have no discretion under s 341(2) to validate dispositions made after the grant of a provisional winding-up order. It reinforces the principle of concursus creditorum and provides important guidance on the limited scope of judicial discretion to validate pre-provisional winding-up dispositions.