THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 526/2021
In the matter between:
MAZARS RECOVERY & RESTRUCTURING (PTY) LTD
FIRST APPELLANT
FENWICK NEIL MILLER
SECOND APPELLANT
BYRON NORMAN CHEVALIER                                                  THIRD APPELLANT
STUART DANIEL TERBLANCHE                                           FOURTH APPELLANT

and

MONTIC DAIRY (PTY) LTD (IN LIQUIDATION)                               FIRST RESPONDENT
[Registration No. 1949/035587/07]
[Master’s reference T1185/16]
PETER CHARLES BOTHOMLEY N O                                      SECOND RESPONDENT
SALIM ISMAIL GANIE N O                                                       THIRD RESPONDENT

ETHNE MARY VAN WYK N O

FOURTH RESPONDENT

Neutral citation:
Mazars Recovery & Restructuring (Pty) Ltd and Others v Montic
Dairy (Pty) Ltd (in liquidation) and Others (526/2021) [2022] ZASCA 135 (13 October
2022)

Coram:
Ponnan, Makgoka, Gorven and Hughes JJA and Chetty AJA

Heard:
12 September 2022
Delivered:  13 October 2022
Summary:
Company Law – business rescue – whether payments made to the
business rescue practitioners after the conversion of business rescue proceedings to
liquidation proceedings are void in terms of s 341(2) read with s 348 of the Companies
Act 61 of 1973.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from: Western Cape Division of the High Court, Cape Town (Gamble J
sitting as court of first instance):
The appeal is dismissed with costs, including the costs of two counsel.
___________________________________________________________________

JUDGMENT
___________________________________________________________________
Hughes JA:

[1] This appeal addresses the remuneration and fees of business rescue
practitioners, specifically when payments are made to the business rescue
practitioners in respect of their fees and remuneration, after an application to convert
rescue proceedings to liquidation proceedings, but before the final winding-up order
are void in terms of s 341(2) read with s 348 of the Companies Act 61 of 1973 (the
Companies Act 1973).

[2] The Western Cape Division of the High Court, Cape Town (the high court)
answered that question in the affirmative. It accordingly declared void the payments to
the business rescue practitioners (BRPs), and ordered them to pay those amounts to
the liquidators of the first respondent, Montic Dairy (Pty) Ltd. The high court
subsequently granted the BRPs leave to appeal to this Court.

[3] Montic Dairy (Pty) Ltd (in Liquidation) (the company) carried on business as a
dairy. On 2 November 2015 the company was placed under business rescue
proceedings and the second to fourth appellants were appointed as BRPs. The BRPs
were employees and directors of the first appellant, Mazars Recovery & Restructuring
(Pty) Ltd (Mazars). It was through Mazars that they conducted their business as BRPs
and received remuneration for their services.

[4] On 14 April 2016 and in the Gauteng Division of the High Court, Pretoria,
Creighton Dairies (Pty) Ltd, a creditor of the company, together with eleven other
creditors, commenced liquidation proceedings against the company (the Creighton
liquidation application). Even though the BRPs had resolved on 28 April 2016 that there
were no longer any reasonable prospects for the company to be rescued, they
nonetheless, filed a notice of intention to oppose the Creighton liquidation application
on 29 April 2016. Such opposition was later withdrawn on 12 May 2016 and the BRPs
launched their application on an urgent basis on 16 May 2016. They sought an order
to discontinue the business rescue proceedings and convert them to liquidation
proceedings in terms of s 141(2)(a) of the Companies Act 71 of 2008 (the Companies
Act 2008). The basis of their application was that there were no reasonable prospects
for the company to be rescued. Their application for the winding-up of the company
was granted by Tuchten J on 14 June 2016 and the second to fourth respondents were
subsequently appointed as its liquidators (the liquidators). Meanwhile, on 23 May 2016
and 2 June 2016, while the conversion application was pending, the BRPs made two
payments totalling R1,5 million in respect of their fees and expenses to Mazars.

[5] After the liquidators assumed office, they sought, and obtained, an order in the
high court declaring void the payments made to Mazars in terms of s 341(2) and s 348
of the Companies Act 1973. Despite the repeal of that Act, these two sections are
amongst those which remain applicable under the Companies Act 2008 by virtue of
item 9(1) of schedule 5 of the Act.

[6] Section 341(2) provides:
‘Every disposition of its property (including rights of action) by any company being wound-up
and unable to pay its debts made after the commencement of the winding-up, shall be void
unless the Court otherwise orders.’
And s 348 provides that a winding-up is deemed to have commenced at the time of
the presentation of the application for the winding-up to the court.

[7] The payments made by the company to Mazars took place after 16 May 2016,
after the application to liquidate the company was presented to court. They are, by
default void in terms of s 341(2), as no court had ordered otherwise. Thus, the BRPs

have to demonstrate why the payments fall outside the clutches of s 341(2). Before
this Court, they relied on the following submissions. First, that although the payments
were made within the prescribed period, they should not be treated as dispositions of
the company because at that stage, business rescue proceedings had not terminated.
Second, that the payments were not ‘made’ by the company and were therefore not
dispositions of the company, as envisaged by the section. Third, that because the
payments were made for the BRPs services to enable them to discharge their duties
during business rescue proceedings, they should accordingly not be treated as
dispositions for the purposes of s 341(2).

[8] In support of these submissions, they sought that s 341(2) be read with Chapter
6 of the Companies Act 2008, as in a reading together of the provisions of the old and
new Companies Act. A reading together is permissible in terms of s 5(4)(a) of the
Companies Act 2008 in circumstances where there are inconsistencies between the
new Companies Act 2008 and any other national legislation. They argued that such an
interpretational exercise of s 341(2) is desirable, sensible and results in a business-
like interpretation supported by judicial precedent.

[9] The BRPs argued that as they are obliged to continue with their duties, even
during this period after the commencement of liquidation proceedings but before a
winding-up order, they were entitled to be paid for their services. The payments are
thus ‘statutorily mandate[d]’,1 and as such fall outside the ambit of dispositions under
s 341(2). In addition, to the aforesaid, the BRPs argued that these payments should
not be considered as dispositions by the company because they had made the
payments and not the company.

[10] Plasket JA in Eravin Construction CC v Bekker N O pointed out that s 341(2) ‘.
. . states expressly that a disposition in the terms contemplated by it “shall be void”’.2
(My emphasis.) Recently this Court adequately dealt with s 341(2) and dispositions

1 In terms of the Companies Act 2008, reliance was placed on s 143(1) which deals with charging an
amount for remuneration and expenses of a practitioner;
section 135(3) which deals with post-commencement finance situation specifically related to having paid
the remuneration and expenses of the practitioner in terms of s 143; and
section 143(5) which deals with the scenario where the practitioner’ remuneration and fees are not paid
fully.
2 Eravin Construction CC v Bekker N O and Others [2016] ZASCA 30; 2016 (6) SA 589 (SCA) para 21.

made by a company being wound-up in Pride Milling Company (Pty) Ltd v Bekker N O
and Another3 (Pride Milling) holding that:
‘The provisions of s 341(2) could not be clearer. They, in unequivocal terms, decree that every
disposition of its property by a company being wound-up is void. Thus, the default position
ordained by this section is that all such dispositions have no force and effect in the eyes of the
law ie the disposition is regarded as if it had never occurred. The mischief that s 341(2) seeks
to obviate is plain enough. It is to prevent a company being wound-up from dissipating its
assets and thereby frustrating the claims of its creditors.’4

[11] In my view, the BRPs conspicuous failure to refer to the recent decision of this
Court is telling. Petse AP in Pride Milling could not have said it more explicitly that the
‘predominant purpose [of s 341(2)] is to decree that all dispositions made by a company
being wound-up are void.’5 If that is the existing position then these payments are
rendered invalid ex tunc at the time that they are made. Further, had they referred to
Pride Milling they would have appreciated that they had the proviso in s 341(2)
available to them. The BRPs did not dispute this and did not seek to make out such a
case. They reasoned that not engaging the proviso was an issue of inconvenience, as
they would have to go to court to seek such an order. By not engaging the proviso,
they, in essence, sought that this Court grant them special preference without having
a court exercise its discretion to endorse the payments sought, as is provided by s
341(2).

[12] In Pride Milling, Petse AP went on to explain that persons such as the
practitioners are not without a remedy :
‘As to the rider to s 341(2), its manifest purpose is to give a court an unfettered discretion to
decide whether or not to direct otherwise and thus depart from the default position decreed by
the legislature. As already discussed, this discretion is only exercisable in relation to payments
made between the date of lodging of the application for winding-up and the grant of a
provisional order. In exercising this discretion, a court will, amongst other relevant factors,
naturally have regard to the underlying purpose of the provision in the context of winding-up a
company unable to pay its debts, the interests of the creditors and those of the beneficiary of
the disposition. It bears mentioning that the consequences of visiting dispositions of the kind

3 Pride Milling Company (Pty) Ltd v Bekker N O and Another [2021] ZASCA 127; [2021] 4 All SA 696
(SCA); 2022 (2) SA 410 (SCA).
4 Ibid para 30.
5 Ibid para 13.

dealt with in s 341(2) with voidness, will not always be harsh. This is so especially when the
potential countervailing harshness of allowing the disposition, which would invariably denude
the company of its assets in proportion to the value of the disposition to the prejudice of its
creditors, is borne in mind. . . ’. (References omitted)6

[13] This Court and the Constitutional Court had the opportunity to pronounce on the
status of remuneration claims of BRPs. In Diener N O v Minister of Justice and
Correctional Services and Others this Court dealt with the status of a claim for
remuneration and expenses by a practitioner, when business rescue had failed and
was converted into liquidation proceedings. Practitioners’ claims for remuneration were
not given ‘super-preference’ and this Court stated that the preference conferred on a
practitioner’s claim ‘after the conversion of business rescue proceedings into
liquidation proceedings, [was] no more than a preference in respect of his or her
remuneration to claim against the free residue after the costs of liquidation but before
claims of employees for post-commencement wages, of those who have provided
other post-commencement finance, whether those claims were secured or not, and of
any other unsecured creditors.’7 The Constitutional Court confirmed this position8 and
there is thus clear and direct authority on the point.

[14] It must be pointed out that the case argued by the BRPs evolved and was in
total contrast to that set out in their heads of argument. Either way, I am not persuaded
that the BRPs made out a case that the disposition made are not void ex tunc. They
had available to them the proviso in s 341(2) but did not make out a case for such
order. As such, it follows that the high court correctly held that the dispositions were
void and set them aside.

[15] The BRPs, having failed to persuade this Court with their submissions, were
forced to concede that the payments emanated from the company’s bank account and
as with payments of other company expenses by the BRPs, the payments in question

6 Ibid paras 31 & 32.
7 Diener NO v Minister of Justice and Others [2017] ZASCA 180; [2018] 1 All SA 317 (SCA); 2018 (2)
SA 399 (SCA) para 49.
8 Diener N O v Minister of Justice and Correctional Services and Others [2018] ZACC 48; 2019 (4) SA
374 (CC) paras 21, 44, 67 and 68.

were made on behalf of the company and therefore amounted to dispositions of the
company.

[16] Consequently, for the reasons set out above, there is no basis to upset the high
court’s finding and the appeal must fail. There is no reason to depart from the general
rule that the losing party should pay the costs.

[17] In the result the following order is made:
The appeal is dismissed with costs, including the costs of two counsel.

___________________
W HUGHES
JUDGE OF APPEAL

Ponnan JA (Makgoka and Gorven JJA and Chetty AJA concurring):

[18] I have had benefit of reading the judgment of Hughes JA and whilst I agree with
her conclusion that the appeal must fail, I write separately because I see the case
somewhat differently to my learned colleague.

[19] The facts fall within a fairly narrow compass. In chronological sequence they
are: Business rescue proceedings commenced in respect of the first respondent,
Montic Dairy (Pty) Ltd (In Liquidation) (the company) on 2 November 2015. The
business rescue practitioners (the BRPs) (the first, second and third appellants), all of
whom were then in the employ of the first appellant, Mazars Recovery & Restructuring
(Pty) Ltd (Mazars), were appointed with effect from that date. On 14 April 2016, a
number of the company’s creditors commenced liquidation proceedings against the
company.

[20] Those proceedings were opposed by the BRPs, ostensibly because a certain
Cesare Cremona (Cremona) had made an offer in January 2016 to purchase the
business of the company for R10 million. However, nothing came of that offer. In
February 2016, Cremona doubled his offer. Nothing came of that offer either. On 26
April 2016, the BRPs resolved that there was no longer any prospect of the company
being rescued and on 16 May 2016, the BRPs made their own application to convert
the business rescue proceedings into liquidation proceedings on the grounds that there
was no reasonable prospect of the company being rescued.

[21] Thereafter, on 23 May, and again on 2 June 2016, two payments to the tune of
R1 500 000 were made to Mazars, by the BRPs in respect of their fees in the business
rescue. On 14 June 2016, the high court ordered that the business rescue proceedings
be discontinued and the company be placed in liquidation. The second to fourth
respondents were appointed the liquidators of the company.  In October 2018, the
liquidators launched an application in the Western Cape Division of the High Court,
Cape Town, challenging the payments made to Mazars. They sought a declaration that
both payments were void in terms of s 341(2) of the Companies Act 61 of 1973 (the

1973 Act) and an order that the monies be repaid, together with interest, by Mazars,
alternatively the BRPs. The application succeeded with costs before Gamble J. The
appeal is with the leave of the learned judge.

[22] In terms of Item 9(1) of Schedule 5 of the Companies Act 71 of 2008 (the 2008
Act) certain provisions of the 1973 Act are preserved and apply to the winding-up of
commercially insolvent companies.9 These include s 341(2), which provides:
‘Every disposition of its property (including rights of action) by any company being wound-up
and unable to pay its debts made after the commencement of the winding-up, shall be void
unless the Court otherwise orders.’
In terms of s 348 of the 1973 Act:
‘A winding-up of a company by the Court shall be deemed to commence at the time of the
presentation to the Court of the application for the winding-up.’

[23] It was not in dispute that: (i) in view of s 348 of the 1973 Act, the deemed
commencement date of the winding-up of the company was 16 May 2016 (when the
application to convert the business rescue into liquidation proceedings was lodged by
the BRPs); and, (ii) the payments made by the BRPs to Mazars were accordingly made
after the commencement of the winding-up of the company. It thus came to be
accepted by the appellants that the provisions of ss 341(2) and 348, if applied
according to their terms, would render the payments void. That ought to be the end of
the matter because as this Court recently observed in Pride Milling ‘the provisions of s
341(2) could not be clearer’.10 The ‘predominant purpose [of s 341(2)] is to decree that
all dispositions made by a company being wound-up are void’.11  It explained:

9 Item 9(1) provides:
‘Despite the repeal of the previous Act, until the date determined in terms of subitem (4), Chapter 14 of
that Act continues to apply with respect to the winding-up and liquidation of companies under this Act,
as if that Act had not been repealed subject to subitems (2) and (3).’
Subitems (2) and (3) provides:
‘(2) Despite subitem (1), sections 343, 344, 346, and 348 to 353 do not apply to the winding-up of a
solvent company, except to the extent necessary to give full effect to the provisions of Part G of Chapter
2. (3) If there is a conflict between a provision of the previous Act that continues to apply in terms of
subitem (1), and a provision of Part G of Chapter 2 of this Act with respect to a solvent company, the
provision of this Act prevails’.
10 Pride Milling Company (Pty) Ltd v Bekker NO and Another [2021] ZASCA 127; [2021] 4 All SA 696
(SCA); 2022 (2) SA 410 (SCA).
11 Ibid para 13.

‘The effect is that the payments are potentially invalid at the moment they are made, because
the grant of a winding up order will render s 341(2) operative. This is different from saying that
they are rendered invalid retrospectively, or that they were initially lawful and valid. That
suggests that the invalidation of all such payments is presumptively harsh or undesirable,
which is not the case.’12

[24] However, the appellants contend that ‘the two payments do not constitute
dispositions by the company of its property’ and that the interpretation of s 341(2) must
be informed by the more recent provisions in the 2008 Act relating to business rescue,
more particularly those ‘providing for the practitioners’ statutorily recognised
preferential entitlement to be paid their remuneration and expenses during the
business rescue proceedings’. Accordingly, so the contention goes, despite the clear
and unambiguous language of s 341(2), three provisions of the 2008 Act, namely
ss 143(1),13 135(3)14 and 143(5)15 entitle them to payment. What requires
consideration in this matter therefore, is whether these three provisions constitute
something in the nature of a statutory carve-out from the operation of s 341(2) for the
payments in question.

[25] None of the provisions relied upon by the appellants (ss 143(1), 135(3) or 143(5)
of the 2008 Act) support the contention sought to be advanced by the appellants.
Section 143(1) does no more than make provision for a fee, whilst s 143(5) merely
deals with what is to occur if the fee is unpaid. Neither specifies that a BRP is entitled
to payment, nor when. Section 135(3) is concerned with post-commencement finance

12 Ibid.
13 Section 143 is headed ‘Remuneration of Practitioner’. Subsection 1 provides:
‘The practitioner is entitled to charge an amount to the company for the remuneration and expenses of
the practitioner in accordance with the tariff prescribed in terms of subsection (6).’
14 Section 135 is headed ‘Post-commencement finance’. Subsection 3 provides:
‘After payment of the practitioner’s remuneration and costs referred to in section 143, and other claims
arising out of the costs of the business rescue proceedings, all claims contemplated –
(a) in subsection (1) will be treated equally, but will have preference over-
(i) all claims contemplated in subsection (2), irrespective of whether or not they are secured; and
(ii) all unsecured claims against the company; or
(b) in subsection (2) will have preference in the order in which they were incurred over all unsecured
claims against the company.’
15 Section 143(5) provides;
‘To the extent that the practitioner’s remuneration and expenses are not fully paid, the practitioner’s
claim for those amounts will rank in priority before the claims of all other secured and unsecured
creditors.’

(that is in attempting to rescue the business). It too does not state that a BRP is entitled
to payment. It seems to me that to get out of the starting stalls, the appellants had to
contend that it is additionally implicit in ss 143 and 135 that BRPs have a right to be
paid the fee post the commencement of the liquidation. The wording of the sections
plainly do not confer any such right. In short, the argument advanced by the appellants
that ss 143(1), 135(3) and 143(5) continue to apply after the business rescue had
terminated, is inconsistent with the judgments of this Court and the Constitutional Court
in Diener N O v Minister of Justice and Others (Diener).16

[26] As this Court made plain in Diener (para 43):
‘Section 143 is not concerned with liquidation. Instead, it regulates the BRP’s right to
remuneration during business rescue proceedings: it concerns the tariff in terms of which
BRP’s are remunerated; the additional contingency-based remuneration that the BRP may
negotiate, and safeguards in that respect; and the BRP’s claim for unpaid remuneration, which
ranks ‘in priority before the claims of all other secured and unsecured creditors’. The reference
to secured and unsecured creditors in the section must, in my view, be understood to be a
reference back to s 135: to those persons who have, or have been deemed to have, provided
the company with post-commencement finance, both secured and unsecured, and not to the
company’s pre-business rescue creditors. Simply put, the preference operates within this
limited context. . .’.
Similarly, in relation to s 135, this Court noted (para 42) that the section concerned
itself with post-commencement finance, and that it is only in that context – whilst
business rescue proceedings are in place – that it creates a set of preferences.

[27] Payments made to a BRP before the presentation of the application for the
winding-up are unaffected by s 341(2). But, thereafter a BRP is in the same position
as all other creditors. In this Court, counsel for the appellants had some difficulty in
addressing why a BRP’s fees fell to be treated as a special category. What of other
payments made by a BRP in the relevant period? As they stood on a similar footing to
a BRP’s fees, it is unclear why they likewise did not fall to be excluded from the
operation of s 341(2). Counsel was driven to accept that no warrant existed for any

16 Diener N.O. v Minister of Justice and Others [2017] ZASCA 180; 2018 (2) SA 399 (SCA); Diener N.O.
v Minister of Justice and Others [2018] ZACC 48; 2019 (4) SA 374 (CC).

such differentiation. Undaunted, however, he did not shrink from the logical
consequence of his submission; he proceeded to argue that on that footing all
payments made by the BRPs in the relevant period should be excluded. But, in the
acceptance of the unavoidability of excluding all payments, lay the seeds for the
destruction of counsel’s argument.

[28] Section 341(2) dictates that every disposition made after the commencement of
the winding-up is void, unless the court orders otherwise. Thus unless a creditor avails
him or herself of the remedy provided in the proviso in s 341(2) (which the appellants
chose not to do in this case), payments made after the commencement of the winding-
up are void. However, a BRP is not remediless:  First, and most obviously, a BRP may
approach a court in terms of the proviso to s 341(2) to validate a payment. A court
hearing such an application has a wide discretion. Second, and naturally, the BRP
enjoys a preference in the ranking of creditors in the winding-up. That preference was
considered in Diener - a BRP ranks after the costs of the liquidation, but before all other
creditors. A BRP thus enjoys a substantial preference.

[29] These remedies cater entirely for any undue hardship (if such exists) that the
appellants rely upon. The exercise of the court’s discretion under the proviso in s
341(2) serves to balance all relevant interests. Thus, in a situation where a BRP may
have raised excessive fees, a court can either refuse to validate the payments or may
validate them in part. In either event, the BRP still has the remedy of a preference in
the liquidation itself. This approach accords with that of this Court - as also the
Constitutional Court - in Diener, in particular, once a BRP decides that a company can
no longer be saved, the purpose of the business rescue comes to an end. At that point,
all relevant interests need to be considered in the light of the applicable provisions of
the 1973 and 2008 Acts and the Insolvency Act 24 of 1936.

[30] Accepting the argument advanced on behalf of the BRPs, would not only render
nugatory the discretion conferred upon a court by the proviso in s 341(2), but also place
all payments made by BRPs in the relevant period beyond judicial scrutiny. That could
hardly have been the intention of the Legislature. On the other hand, the case of the

respondents is simple and relatively straightforward. It accords with the unambiguous
provisions of the 1973 Act - that the payments are void and must be repaid.

[31] In view of the common cause facts, as well as the clear wording and object of s
341(2) of the 1973 Act, the high court cannot be faulted for having declared the
payments void in terms of that section and ordering Mazars and the BRPs to make
repayment. There is accordingly no merit in the appeal.

_________________
V M Ponnan
Judge of Appeal

APPEARANCES

For the Appellants:
BM Gilbert

Instructed by:
Cox Yeats Attorneys, Johannesburg
Symington Kok Attorneys, Bloemfontein

For the First to Fourth
Respondents:

JC Butler SC (with him M Maddison)

Instructed by:
Reitz Attorneys, Johannesburg

Phatshoane Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL
From:
The Registrar, Supreme Court of Appeal
Date:
13 October 2022
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does
not form part of the judgments of the Supreme Court of Appeal
Mazars Recovery & Restructuring (Pty) Ltd and Others v Montic Dairy (Pty) Ltd (in
liquidation) and Others (526/2021) [2022] ZASCA 135 (13 October 2022)

The Supreme Court of Appeal (SCA) today dismissed an appeal against an order by the
Gauteng Division of the High Court, Pretoria (high court). The appeal addressed the
remuneration of fees of business rescue practitioners in respect of work performed after an
application to convert business rescue proceedings to liquidation proceedings, but before the
final winding-up order.
Business rescue proceedings commenced in respect of the first respondent, Montic Dairy (Pty)
Ltd (In Liquidation) (the company) on 2 November 2015. The business rescue practitioners
(the BRPs) (the first, second and third appellants), all of whom were then in the employ of the
first appellant, Mazars Recovery & Restructuring (Pty) Ltd (Mazars), were appointed with
effect from that date. On 14 April 2016, a number of the company’s creditors commenced
liquidation proceedings against the company. The proceedings were opposed by the BRPs, and
on 26 April 2016, the BRPs resolved that there was no longer any prospect of the company
being rescued. On 16 May 2016, the BRPs made their own application to convert the business
rescue proceedings into liquidation proceedings on the grounds that there was no reasonable
prospect of the company being rescued.

On 23 May, and again on 2 June 2016, two payments to the tune of R1 500 000 were made to
Mazars, by the BRPs in respect of their fees in the business rescue. On 14 June 2016, the high
court ordered that the business rescue proceedings be discontinued and the company be placed
in liquidation while the BRPs were appointed the liquidators of the company. In October 2018,
the liquidators approached the high court, challenging the payments made to Mazars and sought

a declaration that both payments were void in terms of s 341(2) of the Companies Act 61 of
1973 (the 1973 Act). In terms of Item 9(1) of Schedule 5 of the Companies Act 71 of 2008 (the
2008 Act) certain provisions of the 1973 Act remained preserved and applied to the winding-
up of commercially insolvent companies.

In view of s 348 of the 1973 Act, the deemed commencement date of the winding-up of the
company was 16 May 2016. The payments made by the BRPs to Mazars were accordingly
made after the commencement of the winding-up of the company. It thus came to be accepted
by the appellants that the provisions of ss 341(2) and 348, if applied according to their terms,
would have rendered the payments void. The appellants contended that the payments did not
constitute dispositions by the company and that the interpretation of s 341(2) was underpinned
by the more recent provisions in the 2008 Act related to business rescue, particularly those that
made provision for practitioners’ statutorily recognised preferential entitlement to be paid their
remuneration and expenses during the business rescue proceedings. The appellants relied on ss
143(1), 135(3) and 143(5) as the provisions that entitled them to payment. Additionally, the
appellants had to prove that ss 143 and 135 conferred a right to be paid a fee post
commencement of the litigation.

This Court, however, found that none of the provisions relied upon supported such reliance and
the sections concerned did not confer such rights. Payments made to a BRP before the
presentation of the application for the winding-up were unaffected by s 341(2). Thereafter, a
BRP was in the same position as all other creditors. Section 341(2) dictated that every
disposition made after the commencement of the winding-up was void, unless the court had
ordered otherwise. The Court, therefore, confirmed that unless a creditor availed him- or herself
of the remedy provided in the proviso in s 341(2), payments made after the commencement of
the winding-up were void. However, a BRP was not left without a remedy. A BRP could have
approached a court in terms of the proviso to s 341(2) to have a payment validated and a court
that heard such an application would have had a wide discretion. A BRP ranked after the costs
of liquidation and would have enjoyed a preference in the ranking of creditors in the winding-
up. These remedies catered entirely for any undue hardship that the appellants could have relied
upon. The exercise of the court’s discretion under the proviso in s 341(2) served to balance all
relevant interests. The argument that the appellants had advanced would not only have rendered
nugatory the discretion conferred upon a court by the proviso in s 341(2), but would also have
placed all payments made by BRPs in the relevant period beyond judicial scrutiny. This Court
found that that could hardly have been the intention of the Legislature.

The case of the respondents was simple and relatively straightforward. It complied with the
unambiguous provisions of the 1973 Act - the payments were void and should have been
repaid. The appeal accordingly had no merit and was dismissed.

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