NCA Plant Hire CC v Blackfield Group Holdings (Pty) Limited [2021] JOL 51810 (GJ)

• Jurisdiction: South Africa
• Date: 01 June 2023
• Pages: 125-132
• Author: A. Boraine,WJC Swart
• Published date: 01 June 2023
• DOI: 10.17159/2225-7160/2023/v56a9

Recent case law 125

NCA Plant Hire CC v Blackfield Group Holdings

(Pty) Limited

[2021] JOL 51810 (GJ)

Some critical observations on the legal effect of a

provisional winding-up order

1 Introduction

The facts and judgment in NCA Plant Hire CC v Blackfield Group Holdings

(Pty) Limited [2021] JOL 51810 (GJ) raises some interesting questions in

relation to the legal effect of a provisional winding-up order on the power

and authority of the board of a company to conclude agreements on

behalf of the company after such an order is made. A company is a

separate juristic person from the date of its registration in terms of the

Companies Act 71 of 2008 (the 2008 Companies Act) (s 19). Unless its

capacity to do so is restricted in its Memorandum of Incorporation, a

company has the capacity to enter into all agreements to which a juristic

person can be a party (s 19 read with s 20 of the 2008 Companies Act;

see also the commentary of Delport et al on s 19 in Henochsberg on the

Companies Act 71 of 2008 (May 2022 – SI 28)). The power to manage

the business and affairs of a company vests in the board of directors (s

66 of the 2008 Companies Act). Because a company cannot act by itself

it must be represented by its board or a duly authorised agent in

agreements that bind the company. Consideration will be given in this

case note specifically to the legal status of agreements concluded by a

company represented by its board in the time between the granting of a

provisional winding-up order and prior to the appointment of a

liquidator. One of the implications of the judgment in NCA Plant Hire CC

v Blackfield Group Holdings is that the board has the authority to enter into

an agreement to settle the claim of one of the company’s creditors after

a provisional winding-up order is granted, but prior to the appointment

of a provisional liquidator. In short, the court found that because the

creditor who brought the application for the provisional winding-up of

the company is dominus litis such creditor may enter a settlement

agreement, which may include a condition that the provisional

liquidation order be discharged, with the company in provisional

liquidation. The approach of the court, in this case, is evaluated against

the general legal principles applicable, namely the power of the board to

manage the business and affairs of a company, the legal effect of a

provisional winding-up order, and the concursus creditorum which begins

as from the moment of liquidation but effectively backdated to the date

of the filing of the application of liquidation by the Registrar of the High

Court (s 348 of the 1973 Companies Act).

How to cite: Boraine & Swart ‘NCA Plant Hire CC v Blackfield Group Holdings (Pty) Limited [2021] JOL 51810 (GJ):

Some critical observations on the legal effect of a provisional winding-up order’ 2023 De Jure Law Journal 125-132

http://dx.doi.org/10.17159/2225-7160/2023/v56a9