Swart v Heine and Others

BSA Group Holdings (Pty) Ltd was voluntarily wound up by special resolution after becoming unable to pay its debts. The appellant, Swart, was a director of the company. The first, second and third respondents were creditors owed substantial amounts arising from unpaid salaries, settlement agreements and a loan. As creditors, they brought an ex parte application in the Gauteng Division of the High Court for leave to convene an enquiry into the company’s affairs under sections 417 and 418 of the Companies Act 61 of 1973, read with section 388, which governs court intervention in voluntary liquidations. Ledwaba DJP granted the order in camera. Upon learning of the order, the appellant applied for rescission, arguing that the order was erroneously sought and granted because the notice of motion and founding affidavit did not expressly refer to section 388. The High Court (Pretorius J) dismissed the rescission application, and the appellant appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel.

The case reaffirms that South African courts adopt a substance-over-form approach to pleadings and statutory reliance. It confirms that in voluntary liquidations, creditors may invoke section 388 to obtain leave for enquiries under sections 417 and 418, even if the section is not expressly cited, provided the facts justify the relief. The judgment also underscores judicial disapproval of unmeritorious appeals reaching the Supreme Court of Appeal.