PFC Properties (Pty) Ltd v Commissioner for the South African Revenue Services and Others and Brita De Robillard NO and Another v PFC Properties (Pty) Ltd and Others

PFC Properties (Pty) Ltd (PFC), an asset-holding and property-owning company, incurred substantial VAT and income tax liabilities following SARS audits, amounting to over R57 million. PFC claimed VAT input tax on the construction of a residential property used as the De Robillards’ matrimonial home. Despite undertakings to SARS not to dispose of assets and to hold proceeds in trust, PFC sold all its immovable properties and luxury yachts at grossly undervalued prices, effectively stripping itself of assets. SARS withdrew a suspension of payment and launched winding-up proceedings in February 2021. Shortly before the winding-up hearing, the trustees of PFC’s sole shareholder launched a business rescue application in a different jurisdiction, relying on s 131(6) of the Companies Act to suspend liquidation. The business rescue application was not prosecuted and was accompanied by procedural manoeuvres aimed at delaying liquidation.

Both appeals (Case Nos 543/2021 and 409/2022) were dismissed with costs, including the costs of two counsel where employed. The final winding-up order against PFC Properties (Pty) Ltd remained in force, and the business rescue application stood dismissed.

This judgment reinforces that business rescue proceedings must not be abused as a tactical device to delay liquidation. It affirms the courts’ power to non-suit litigants who abuse court process and clarifies that a business rescue application lacking bona fides and reasonable prospects will not shield a company from winding-up. The case strengthens creditor protection, particularly in the context of tax enforcement by SARS, and underscores judicial intolerance for asset stripping and procedural manipulation.