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Bluebook 21st ed.

K. J. Douglas, Backdating of Windings-up, 104 S. AFRICAN L.J. 616 (1987).

ALWD 7th ed.

K. J. Douglas, Backdating of Windings-up, 104 S. African L.J. 616 (1987).

APA 7th ed.

Douglas, K. K. (1987). Backdating of windings-up. South African Law Journal, 104(4),
616-634.

Chicago 17th ed.

K. J. Douglas, "Backdating of Windings-up," South African Law Journal 104, no. 4
(November 1987): 616-634

McGill Guide 9th ed.

K. J. Douglas, "Backdating of Windings-up" (1987) 104:4 S African LJ 616.

AGLC 4th ed.

K. J. Douglas, 'Backdating of Windings-up' (1987) 104(4) South African Law Journal
616

MLA 9th ed.

Douglas, K. J. "Backdating of Windings-up." South African Law Journal, vol. 104, no.
4, November 1987, pp. 616-634. HeinOnline.

OSCOLA 4th ed.

K. J. Douglas, 'Backdating of Windings-up' (1987) 104 S African LJ 616

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 BACKDA TING OF WINDINGS-UP*
K J DOUGLASt
Attorney of the Supreme Court of South Africa

In Rennie NO v South African Sea Products Ltd1 Berman AJ held that

by virtue of s 348 of the Companies Act of 19731 ('the 1973 Act') the
concursus creditorum in a winding-up by the court is deemed to have
been established at the moment the application for winding-up was
filed with the registrar of the court. If this interpretation of s 348 is
correct the consequences will be far-reaching indeed.
The facts were that on 29 August 1984 an application had been filed
by a third party for an order placing Alkar Fishing (Pty) Ltd under
provisional judicial management, alternatively provisional
winding-up, 3 and on 31 August 1984 the company had been placed
under provisional winding-up. Also on 31 August, but before the
grant of the winding-up order, the court had granted the respondent
an order under the Admiralty Jurisdiction Regulation Act of 1983' for
the arrest of a vessel owned by Alkar.
Section 10 of this Act provides that the effect of such an order is
that the arrested vessel does not vest in the liquidator of the owner,
with the result that it is available to the arresting creditor alone. The
issues facing the court were therefore, first, whether an arrest can
validly be made after the commencement of the winding-up of the
owner, and, secondly, whether, if an arrest cannot be made after the
commencement of the winding-up, the arrest must be made before
the grant of the winding-up order or before the presentation of the
winding-up application, being the deemed commencement of the
winding-up in terms of s 348. The court held that an arrest cannot
validly be made after commencement of the winding-up and that
s 348 does apply, so that the arrest was invalid because it had been
made after presentation of the winding-up application, albeit before
the grant of the winding-up order.
* This article is based on chapters 5-7 (pages 227-302) of my PhD thesis The Termination of the
Duty and Authority of a Bank to Honour its Customer's Cheques and Other Instructionsfor Payment,
Including the Broader Implicationsfor a Bank of Sections 341(2) and 348 of the Companies Act 1973
(University of the Witwatersrand 1985), cited below as Thesis.
t B Juris (Unisa) H Dip Tax Law PhD (Witwatersrand).
1986 (2) SA 138 (C).
Act 61 of 1973.
The court held (at 142A-G) that the fact that the application was forjudicial management
alternatively winding-up made no difference to the issues and that the position was the same as if
winding-up alone had been sought.
' Act 105 of 1983.
BACKDATING OF WINDINGS-UP (I /

The court also held 5

that the applicant was entitled to relief under
s 359(l)(b) of the Companies Act, which invalidates any attachment
after the commencement of the winding-up, but it is unnecessary for
present purposes to pursue this aspect.
Section 348 provides:
'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.'
Although not referred to by the court, a further important provision
for present purposes is 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 dealing with the question whether s 348 prevented the arrest of
the vessel after presentation of the winding-up application but before
the grant of the winding-up order, the court held: 6
'It would seem that the "presentation" of the application is to be equated with the
filing at the office of the registrar of the papers constituting the application
(including those called for by s 346(3) and (4)), see Lief NO v Western Credit (Africa)
(Pty) Ltd 1966 (3) SA 344 (W) at 347, so that once a provisional winding-up order
has been made, the winding-up of the company concerned is deemed to have
commenced when the application for that order was filed with the registrar. ...I
hold therefore that ... the winding-up of Alkar commenced on 29 August 1984, ie
before respondent caused the arrest of the vessel to be made .... A concursus
creditorum was thereupon, ie on 29 August 1984, created and the rights of
creditors inter se became fixed, and remained so ... '
Two questions arise: Was the court correct in holding that a
winding-up application is presented when it is filed with the
registrar? And is it correct that the effect of s 348 is that the concursus
creditorum is deemed to have been established at the moment of
presentation of the application?

WHEN IS A WINDING-UP APPLICATION 'PRESENTED'?

The difficulty in seeking to determine when a winding-up
application is presented arises from the fact that 'presentation' in its
ordinary meaning does not refer to a particular time but encompasses
all stages of the making of the application. The difficulty in seeking to
fix the time at which presentation can be said to occur was alluded to
by Graham JP, in a different context, 7 in R v Johnson:'
'Now when is an indictment "presented"? This section does not use the words
"served on the accused", or "lodged with the Registrar", and there is something to
be said in favour of the conclusion that an indictment is only "presented against an
accused after the Court is sitting" and prior to the arraignment ....
Berman AJ relied on Lief NO v Western Credit (Africa) (Pty) Ltd, 9
but this decision related to the Companies Act of 192610 ('the 1926

At 142J-144A. 6 At 141J-142A and 142H-I.

Section 141(1) of the Criminal Procedure and Evidence Act 31 of 1917.
81933 EDL 189 at 190-1.
1966 (3) SA 344 (W).
10Act 46 of 1926.
t1Ist THE SOUTH AFRICAN LAW JOURNAL

Act') and the corresponding section-s 1 15-was differently

w Ul i . . 1_ 1 ILl ladallo tA.nt inn .at LfL~tlO VY a.o

referring expressly to 'die tydstip van indiening van die likwidasie-

versoekskrif'. This eliminated the ambiguity which would have
existed if the English text had stood alone. In addition, rule 3
promulgated" under that Act provided that presentation was to be
effected by filing the petition with the registrar. The Afrikaans text of
thc -1-,.17, Act now r,. s to
-.-. 'Ale , .-..-
5 ; A;-..... oo,-leg,, aan
Hof van die aansoek', bringing it into line with the English text, and
rule 3 was repealed on enactment of the new Act. The words 'to the
Court' and 'aan die Hof' were also added by the 1973 Act.
The only case in which the meaning of 'presentation' has been
considered in any detail was the Rhodesian case of Meaker NO v
Campbell's New Quarries (Pvt) Ltd and others.' 2 In coming to the same
conclusion as in Lief's case in relation to the Rhodesian counterpart of
s 348,"3 Davies J referred both to Lief's case and generally to the
English cases, which all proceed on the basis that presentation refers
to filing. However, no argument was presented to the court against
the applicant's contention that presentation refers to filing, and
Davies J appears to have been unaware that the Afrikaans text of the
1926 Act cleared up the ambiguity in the English text, and,
moreover, that in England there is also no ambiguity, as 'presenta-
tion' is the ordinary word in English law corresponding to 'filing' in
our law. 14 With respect, therefore, the court wrongly relied on the
South African and English cases in seeking to resolve the ambiguity
which existed in the Rhodesian Act (and which exists under the 1973
Act).
Davies J did not, however, rely solely on the South African and
English cases. He also gave the following reason in support of his
conclusion: "
'Giving the words their plain meaning, it seems to me that a petition is
"presented" to the court when it is filed with the registrar in proper form. It is at
that moment that the court is formally requested to consider the matter, and the
fact that delay necessarily occurs before the court can actually adjudicate on the
matter is, in my view, irrelevant.'
With respect, however, the correctness of this statement is
debatable. The court is in fact requested to consider the matter only
when the matter is moved in open court. Until then the court has not
been requested to do so, or at least the request is incomplete and
conditional on the application's being moved in open court, and if the
applicant does no more no order will ensue. 6 In my view, therefore,

" GN 2270 of 10 December 1926, as amended. ,I 1973 (3) SA 157 (R).

13 Section 177(2) of the Companies Act (c 223).
Rule 27 of the Companies (Winding-up) Rules 1949; rule 3(2) of order 9 of RSC 1965 (the
Supreme Court Rules).
At 160B-C.
It may be noted that the notice of motion prescribed in form 2(a) of the First Schedule to the
Uniform Rules of Court states not that 'application is hereby made' but that 'the applicant intends
to make application'.
BACKDATING OF WINDINGS-UP 01I

Davies J's reasoning leads rather to the conclusion that presentation

occurs not on filing but on the moving of the application for a
winding-up order in open court. 17
The meaning of 'presentation' in s 348 has been relevant in several
reported cases"8 since the introduction of the 1973 Act, but in each
case it has simply been assumed that presentation means filing. I
suggest, however, that this assumption needs to be re-examined in
view of the far-reaching consequences the interpretation necessarily
entails-especially, but not only, if the Rennie case is correct in
regard to the effect of s 348-and because there are arguments of
some cogency to the contrary.
Can any inference be drawn from the fact that in enacting the 1973
Act the legislature chose to amend the Afrikaans text so as to replace
the reference to filing with a reference to presentation and added the
words 'to the Court'? It is true that a change of language often
indicates a change of intention, 9 but it would appear that the change
in the Afrikaans text was probably caused not by a change of
intention but by the desirability of uniformity between the English
and Afrikaans texts, and that the addition of 'to the Court' was
probably caused by the draftsman's concern with the graces of style.
Certainly there is no mention of the reason for the changes in the
report of the Van Wyk de Vries Commission of Enquiry which
preceded the enactment of the 1973 Act. The repeal of rule 3 of the
rules promulgated under the 1926 Act similarly would appear not to
result from a change of intention but probably from the approach that
the rule, in so far as it may have sought to define 'presentation', was
necessarily either superfluous or ultra vires. Had there been an
intention to change the meaning of s 348 from that borne by its
predecessor, one would have expected such intention to have been
made clear, and the absence of any such clear indication tends, in my
view, to indicate that the legislature did not intend a change of
meaning.
The Oxford English Dictionary defines the verb 'present' as follows:
'I. To make present to, bring into the presence of. . . 8. Law. To
bring or lay before a court . . . for consideration or trial . .. .'
The definition does not resolve the difficulty of fixing the time at
which presentation can be said to occur where one is compelled to fix
such a time, but it is noteworthy that the basic meaning is 'bringing
17 This approach was expressly rejected by Berman AJ in the Rennie case supra note 1 at
142F-G, but he gave no reasons for doing so.
" Prudential Shippers SA Ltd v Tempest Clothing Co (Pty) Ltd 1976 (4) SA 75 (W) at 83A;
Cessions (Pty) Ltd v Stumrab (Pty) Ltd 1980 (2) SA 361 (W); Herrigel NO v Bon Roads Construction
Co (Pty) Ltd & another 1980 (4) SA 669 (SWA) at 673H; Ruskin NO v Hi-Level Enterprises (Pty) Ltd
1981 (1) SA 315 (W) at 317B-D; International Shipping Co (Pty) Ltd v Affinity (Pry) Ltd & another
1983 (1) SA 79 (C) at 85A-B and 83A; De Wet NO v Mandelie (Edms) Bpk 1983 (1) SA 544 (T) at
545H; and Wolhuter Steel (Welkom) (Pty) Ltd v Jatu Construction (Pty) Ltd (in Provisional
Liquidation) 1983 (3) SA 815 (0) at 816D.
' Minister of the Interior v Machadodorp Investments (Pty) Ltd & another 1957 (2) SA 395 (A) at
404D-E; L C Steyn Die Uitleg van Wette 5 ed by S I E van Tonder et al (1981) 126.
620 THE SOUTH AFRICAN LAW JOURNAL

into the presence of', which, I suggest, tends to favour the

interpretation that the moving of the anlication in open court is
referred to.
'Presentation' and 'present' are also used in several other sections of
the Act-ss 340(2), 346, 347, 358 and 436-but similar difficulties
arise in regard to determining their meaning in these sections, so that
no help is to be had from this source.
qetion A lem o A indingr-up to have commenced on the
presentation of the winding-up application, and it is therefore
appropriate to examine those other sections which expressly or
implicitly refer to the commencement of a winding-up, as this may
indicate what was intended by the reference to presentation in s 348.
There are many such sections-ss 83(3), 85(1), 338(1), 341(2),
354(1), 359(1)(b), 359(2)(a), 363A(1) and (3), 372(i), 395(2)(a),
400(1), 402(e), 414(2)(a), 415(1) 415(2)(a), 421(2) and 425-but,
rather surprisingly, despite s 348, most of these sections clearly or at
least probably refer to the grant of the winding-up order and not the
presentation of the winding-up application.
A question which may validly be asked is whether 'presentation' in
our Act should not, in view of the fact that our Act can be traced back
directly to the English legislation, be given the same meaning as it
had in that legislation.2 " The persuasiveness of this approach
necessarily depends on the similarity in the wording of the statutory
provisions and in their statutory and common-law context,2 and
although the wording is similar there are significant differences in the
contexts.
The most significant difference between the position in England
and the position in this country is that in England the counterpart of
s 348-at present s 129 of the Insolvency Act 1986-has been held to
have no greater effect than that specified in the counterpart of
s 341(2), at present s 127 of the Insolvency Act. Thus in England the
effect of the English counterpart of s 348 is limited to the avoidance
of dispositions of the company's property unless the court otherwise
orders. It does not, for example, invalidate the conclusion of a
contract" or the payment of a debt to the company," because these
are not dispositions.
In this country, on the other hand, both of these transactions will
be void, at least if Rennie's case was correctly decided. Even if it was
not, the conclusion of a contract will apparently be void as a
disposition under our law by virtue of the importation of the
definition of 'disposition' in the Insolvency Act of 193624 into the
20 See generally Thesis 279 and 242-54.
21 Steyn op cit note 19 at 131-2.
12 In re Wiltshire Iron Company, ex parte Pearson (1868) 3 Ch App 443.
23 Mersey Steel and Iron Co Ltd v Naylor, Benzon & Co (1882) 9 QB 648 (CA) and (1884) 9 AC
434 (HL).
14 Act 24 of 1936.
BACKDATING OF WINDINGS-UP 621
25
Companies Act by s 339 of the latter Act. This aspect will be
discussed more fully below.
Sections 348 and 341(2) and their English counterparts must,
moreover, be seen as part of a group of anti-preference provisions
aimed at securing a fair distribution of the company's assets. Section
340 of the South African Act incorporates the extensive provisions of
the Insolvency Act-ss 26, 29, 30 and 31-for the impeachment of
dispositions for no or inadequate value, voidable and undue
preferences, and collusive dealings, and there is in addition the
common-law actio Pauliana. The corresponding position in England
is that the only impeachable transactions are dispositions for no or
inadequate value with the intention of putting assets beyond the reach
of, or27otherwise prejudicing, creditors 6 and fraudulent convey-
ances.
In England the fact that a winding-up petition has been presented
against a company is advertised in the official gazette, 2 8 giving
persons dealing with the company the opportunity of deciding
whether they wish to run the risk of their dealings being invalid or at
least of their having to incur the inconvenience and expense of
applying for a validation order. In this country, on the other hand,
the fact that a winding-up application has been launched receives no
publicity, either official or unofficial, and a person dealing with a
company will in the ordinary course be unaware that an application
has been launched for its winding-up. He may in consequence
unwittingly enter into transactions which, while entirely normal and
proper, will be void in terms of ss 348 and 341(2). On the other hand,
the company itself benefits markedly by the absence of publicity.
In England the court may appoint a provisional liquidator at any
time after the presentation of a winding-up petition, that is, even
before the granting of any order,2 9 whereas in South Africa a
provisional liquidator may only be appointed after a provisional
winding-up order has been granted. If follows that the English
Companies Act provides a simple mechanism for the company to
continue to operate after presentation of a winding-up petition
against it if third parties are not willing to run the risk of invalidity,
whereas in South Africa this could only be achieved by the
cumbersome method of an advance application or two or more
advance applications to court in terms of the proviso to s 341(2) for
validation of the dispositions it wishes to make.
" Herrigel'scase supra note 18 at 674A and the InternationalShipping case supra note 18 at 85E.
It may be asked, however, whether s 339, which applies the provisions of the Insolvency Act to
windings-up, can properly be interpreted as applying a definition in the Insolvency Act for the
purposes of that Act to a provision of the Companies Act which has no counterpart in the
Insolvency Act, although the answer would appear to be in the affirmative- Thesis 325-34.
" Sections 423-5 of the Insolvency Act 1986 (c 45).
" Section 172 of the Law of Property Act 1925 (c 20); Halsbury's Laws of England 4 ed (1977)
vol 18 paras 358ff.
28 Rule 28 of the English Companies (Winding-up) Rules 1949 (SI 330).

2 Rule 32 of the English Companies (Winding-up) Rules.

622 THE SOUTH AFRICAN LAW JOURNAL

The procedure for obtaining a validation order is also markedly

r iffi-rpst 'n, FnrrlntiA frrnm thi nrcny-Piirp , titi r,-nt,-. I,- tbhc
country there are no special rules of court or winding-up rules dealing
with proceedings for validation, and the question of the appropriate
form of proceedings as a result falls to be answered according to
general principles and the general rules of court. In effect this means
that proceedings will take the form of either a trial action or motion
proceedings in the Supreme Court, depending upon whether or not
there is a material dispute of fact between the parties. This may be
contrasted with the position in England, where the proceedings are
heard by a registrar in chambers on a summons requiring the person
against whom an order is sought to attend the hearing.3 °
These differences in context, together with many lesser differ-
ences, 31 are, in my view, sufficiently fundamental to restrict
materially the persuasiveness of any argument that s 348 should be
given an intepretation similar to that given to its English counterpart.
The mischief aimed at by the counterparts of ss 348 and 341(2) in
the 1926 Act was described by Snyman J in Lief's case 32 as
'a possible attempt by a dishonest company, or directors, or creditors or others, to
snatch some unfair advantage during the period between the presentation of the
petition for a winding-up order and the granting of that order by a court.'
Whether the sections in fact contribute to this objective may,
however, be questioned. As already pointed out, the Act makes
extensive provision in s 340 read with ss 26, 29, 30 and 31 of the
Insolvency Act for the setting aside of dispositions for no or
inadequate value, voidable and undue preferences and collusive
dealings; accordingly, any disposition which would constitute, in
Snyman J's words, an attempt 'to snatch some unfair advantage',
would no doubt be impeachable under these other provisions without
the assistance of ss 348 and 341(2). 3 1 What further mischief the
legislature sought to eliminate by ss 348 and 341(2) is therefore
unclear.
It is also noteworthy that it has not been found necessary to include
any similar provisions in the Insolvency Act. 3 4 The sections can, on
the other hand, be the source of considerable hardship both to
persons dealing with the company and to the company itself.
Persons dealing with a company generally have no means of
ascertaining whether a winding-up application has been presented
Rules 2(1), 5(3), 7(1) and 8(2) of the English Companies (Winding-up) Rules.
See generally Thesis 247-53. 3" 1966 (3) SA 344 (W) at 347B-C.
's It may be noted that when the predecessors of these sections were first introduced in the
companies legislation in this country the other impeachment provisions were of much more
limited scope- Thesis 233-5-and, as already pointed out, the same is still true to this day of the
position in England.
3' It may, moreover, be noted that the English counterparts of the sections found no place in
the sweeping reforms of the English bankruptcy and winding-up laws proposed in the Report of
the Insolvency Law and Practice Review Committee (the chairman of the committee being Sir
Kenneth Cork) (Cmnd 8558 (London 1982) § 1280), although this aspect, inter alia, of the
proposals was not adopted in the Insolvency Act 1986 (c 45) which now deals both with personal
bankruptcy and with the winding-up of companies.
BACKDATING OF WINDINGS-UP 623

against the company, with the result that they may learn only later
that an entirely normal and proper transaction is void under ss 348
and 341(2). True, s 341(2) empowers the court to validate any
disposition by the company of its property, but an application for
such an order is costly and cumbersome and, as the cases in other
jurisdictions with similar provisions show, of uncertain prospects of
success; 3 5 moreover, not all transactions constitute a disposition by
the company of its property"6-for example, a payment to the
company-and therefore not all transactions are capable of being
validated.
The uncertainty whether a transaction will be validated is also
potentially prejudicial to the company. It is true, as already pointed
out, that in this country no publicity is given to the presentation of
winding-up applications; however, the fact of such presentation
seldom remains entirely confidential. The effect of the presentation's
becoming known to persons dealing with the company is described
by McPherson 7 as follows:
'Since neither the company, nor any person dealing with it, can be sure that the
petition will be dismissed, or, if it succeeds, that a disposition of property made by
the company will be validated by the courts, the effect is to discourage transactions
with the company for as long as this state of uncertainty exists. This in turn tends to
make the company's position deteriorate even more rapidly.'
Even where the winding-up application is entirely unfounded, the
mere presentation of the application may therefore harm the
company.
The prejudicial consequences of this uncertainty are well illustrated
by two English Court of Appeal cases: In re Clifton Place Garage Ltd"8
and Re Gray's Inn Construction Co Ltd. 9 In the Clifton Place case
Phillimore LJ said in relation to the English counterpart of s 341(2):40
'This is a very harsh section as applied. We are told that the first result of a
petition seeking an order for the winding up of a company by the court is that its
bank refuses to honour its cheque[s], although it will continue to accept receipts in
its favour. 4' It follows that, even in the case of a company where the court
ultimately refuses the order, serious damage may have resulted from the petition.
After all, one of the results of a petition and of such action of the bank is that a
company may have great difficulty in paying its employees, and, if it does pay
them, the payments if derived from the funds of the company are prima facie
void. ... [I]n my judgment, the court should extend indulgence to any disposition
by a company honestly designed to ensure that its employees are paid their wages
or which was made to enable it to carry on its business and perhaps turn the corner;
provided always that it was a reasonable disposition and not dishonest or reckless. I
question also whether this rigid practice of the banks in all cases is right, or
a' Thesis 468-613.
36 See generally Thesis 320-467 in regard to which transactions are dispositions and which are

not.
3 B H McPherson The Law of Company Liquidation 2 ed (1980) 144-5.
[1970] Ch 477 (CA).
' [1980] 1 All ER 814 (CA).
At 494B-E.
40

The Australian banks adopt the same practice-McPherson op cit note 37 at 143-but it
4'
may be questioned whether a bank may freeze the customer's account without committing
breach of contract: Thesis 633-46.
624 THE SOUTH AFRICAN LAW JOURNAL
whether, particularly if they were aware that the court would look with indulgence
on such cases, it would not be possible, after proper inquiry, at any rate in some
cases, to cash cheques for a company, even if only against current receipts on a day
to day basis.'
The Journal of Business Law4 2 commented wryly on this advice:
'It will be interesting to see whether bankers have the courage to follow this advice,
and, if they do, whether the sentiments expressed by Phillimore L.J. will prove to
be shared by all his fellow judges.'
One bank, the National Westminster Bank Ltd, apparently took
the advice, for it allowed company customers to continue to operate
their bank accounts after presentation of a winding-up application
against them, subject to safeguards to ensure that the continued
operation of the account was in the ordinary course of the company's
business. The bank was, however, no doubt to rue its decision when
the Court of Appeal in the Gray's Inn case held these safeguards to be
inadequate in that the bank should also have instituted safeguards to
ensure that the company was only permitted to continue to operate
its account as long as it traded at a profit and to ensure that no
payments were made to pre-presentation creditors.
The company in fact traded at a loss and the court held the bank
liable for the trading loss by refusing to validate transactions on the
bank account up to the amount of the loss. The court also held the
bank to be vulnerable to repay to the liquidator all amounts paid to
pre-presentation creditors in so far as the amounts exceeded the
dividends they would otherwise have received, but that the excess
should primarily be recovered from the creditors to whom it was
paid.
The court did not suggest what safeguards it would have regarded
as adequate, but it did say that it did not think that its approach would
increase the dilemma facing a bank when a company requests the
continuation of banking facilities after the presentation of a
winding-up application against it. Not surprisingly, the bank, it
seems, did not agree, and has now joined the other English banks in
freezing a company's account if a winding-up petition is presented
against the company, unless a validation order is obtained in advance.
To sum up, ss 348 and 341(2) create a blunt instrument which does
not discriminate between tainted and untainted transactions, and
although the court has a discretion to validate transactions, this has
not proved a satisfactory protection against hardship in other
jurisdictions with similar provisions. Were the sections to be
fundamental to the achievement of the object of a fair distribution of
the estate, this would be a cogent reason for placing as wide an
interpretation on the sections as the wording would permit and as
would promote the achievement of this object; but the concept
4 Clive M Schmitthoff & James H Thompson 'Avoidance of Disposition by Receiver After
Commencement of Winding-up' 1970 Journal of Business Law 124 at 125.
BACKDATING OF WINDINGS-UP 625
embodied in the sections contributes little, if anything, to the
achievement of this object in this country, and there is therefore no
reason to give the sections any wider a meaning than necessary. On
the contrary, the capacity inherent in the sections for causing
hardship, both to the company itself and to persons dealing with the
company, is a compelling reason for giving the sections no wider a
meaning than necessary. Snyman J focused on an aspect of this in
Lief's case when he said: 43
'... normally statutes must be interpreted in such a way as to cause a minimum of
interference with, or deprivation of, rights. Sec. 115 on occasion may be an
interference with the rights of people who have legitimately acquired rights after
the presentation of the petition for winding-up but before the order is granted by
the court.' 44
Historically, the counterparts of ss 348 and 341(2) in earlier
legislation had a raison d'Etre in the absence of adequate specific
provisions for the impeachment of improper dispositions,4 5 but with
the enactment of adequate specific impeachment provisions first in
1926 and then in 1973 this raison d'etre fell away and the sections
became an anachronism. However, it is not within the capacity of the
courts to repeal the sections. Nevertheless, the fact that the effect of
the sections has become more harmful than beneficial is a valid reason
for the sections, in the event of ambiguity, to be given no wider an
interpretation than is necessary, and interpreting 'presentation' to
refer to moving in open court would at least minimize, if not
eliminate, the harmful effect of the sections.
What conclusion, then, is to be drawn? If the question were res
nova, the arguments for a restrictive interpretation of s 348 would
surely outweigh the counter-arguments, and therefore 'presentation'
would be held to refer to the moving of the winding-up application in
open court. However, the question is not res nova; there is a
background of earlier legislation and of decided cases which cannot
be disregarded and which, it seems, will carry the day in favour of the
interpretation that 'presentation' refers to the filing of the winding-up
application with the registrar, undesirable as this may be.
DOES SECTION 348 BACKDATE
46
A WINDING-UP FOR ALL
PURPOSES OR SOME ONLY?
The fact that s 348 deems a winding-up to commence on
presentation of the application for winding-up does not mean that as
soon as a winding-up application is presented the company is in
winding-up; it means that if a winding-up order is granted the

4' Supra note 32 at 3498-C.

44Snyman J in fact gave effect to this rule of interpretation by holding that in Lief's case the
sections did not apply, for the winding-up was preceded by a judicial management. (Whether or
not this conclusion is possible under the 1973 Act where the winding-up is preceded by ajudicial
management is not clear: Thesis 300-2.)
4 Thesis 233-5.
4 Thesis 255-73.
b2O THE SOUTH AFRICAN LAW JOURNAL

winding-up will be deemed retrospectively to have commenced on

presentation of the application. In thc w,ords of'1 AMargo jT7..... I.

& another v C C Bauermeister (Edms) Bpk & others: 4 7

'Section 348 refers expressly to a winding-up by the court, and that is the event
which is deemed to commence at an earlier stage. Thus, before the deeming
provision can operate there must be a winding-up by the court. By the deeming
provision, Parliament has antedated the operation of a winding-up by the court,
but without such a winding-up there is nothing to antedate. To hold the contrary

winding-up order, however ill-founded or even vexatious, would ipso jure have
the effect of a winding-up order.'
The question which arises, therefore, is whether, once a
winding-up order has been granted, the concursus creditorum is
deemed retrospectively to have been established on presentation of
the application or, to put it another way, is the commencement of the
winding-up backdated to presentation for all purposes? Or, is the
commencement backdated for certain limited purposes only, for
instance, for the purpose only of those other sections of the Act,
notably s 341(2), which expressly refer to the commencement of the
winding-up?
Taken literally, s 348 would appear to backdate the commence-
ment of a winding-up to the date of presentation for all purposes,
including the establishment of the concursus creditorum. The effect
of this would be that the date of presentation would be the date of
crystallization of the rights and obligations of debtors and creditors,
and the date of cessation of the directors' powers. All acts of the
directors thereafter would be void and all contracts concluded by the
company, all payments made to or by the company, all deliveries of
goods to or by the company etc would be void.4"
It would be surprising, however, if the legislature had intended
such a startling result. In practice, a company against which a
winding-up application is presented may be carrying on business at
the time and may continue- to do so for some time until a winding-up
order is granted on the application. Any attempt to unravel all the
dealings of the company between presentation of the winding-up
application and the grant of the winding-up order would therefore
often be impracticable to implement, and it may be doubted whether
the legislature intended such an absurdity:
'... the degree of absurdity or repugnance is of importance as it bears upon the
intention of the enactment under discussion. If, examining results, you find

1982 (4) SA 159 (T) at 162A-C. See also Prudential Shippers SA Ltd v Tempest Clothing Co
(Pty) Ltd 1976 (4) SA 75 (W) at 83A-B; Du Plooy v Onus (Edms) Bpk 1981 (1) PH E2 (0); In re
Tumacacori Mining Company (1874) 17 Eq 534 at 537.
Cf Henochsberg on the Companies Act 3 ed (1975) by A Milne et al 615:
'In the case of a winding-up by the Court the powers of directors cease....
'The retrospective effect of s. 348 may result in serious consequences but it is submitted that
the Courts will be strongly disposed, in the absence of any specific contrary statutory
provision, to hold that directors will continue to be such until a winding-up order has been
granted, in the case of a winding-up by the Court.'
This statement has been omitted from the fourth edition of 1985.
BACKDATING OF WINDINGS-UP 627
absurdity or repugnance of a kind, which, from a study of the enactment as a
whole, you conclude the legislature never could have intended, then you are
entitled so to interpret the enactment as to remove the absurdity or repugnance and
give effect to the intention of the legislature.' 49
Sections similar to ss 348 and 341(2) are to be found in the
companies legislation of various countries, notably England, 5"
Australia51 and India, 52 and a section broadly similar to s 348 appears
in the Canadian Bankruptcy Act, 53 which applies both to individuals
and to companies."
In England the seal was set at an early stage on the interpretation
that the English counterpart of s 348 does not backdate a winding-up
for all purposes.
In 1868 in In re Wiltshire Iron Company, ex parte Pearson,55 the locus
classicus in relation to the English counterparts of ss 348 and 341(2),
the company had sold and delivered iron to Pearson after a winding-
up petition had been presented against it. On a literal interpretation of
the English counterpart of s 348, both the sale and delivery would
have been invalid. However, the Court of Appeal held, without
discussing the possible broader effect of the English counterpart of
s 348, that only the delivery was avoided by the English counterpart
of s 341(2). 56
In Mersey Steel and Iron Co Ltd v Naylor, Benzon & Company5" the
defendant had agreed to purchase steel from a company, the steel to
be delivered in instalments and payment of the price to be made
within three days of delivery. After delivery of the first instalment,
but before payment, a petition for the winding-up of the company
was presented. The defendant was advised by its solicitor that it could
not safely pay the price to the company pending the petition without
the leave of the court, and asked the company to obtain an order of
court sanctioning the payment. The company treated this as a
repudiation of the contract, and the issue before the court was
whether or not the defendant's action did constitute a repudiation of
the contract. Both the Court of Appeal and the House of Lords held
that there was no repudiation, for the defendant, while willing to
pay, was bona fide under the impression that it could not do so until a
liquidator had been appointed. Although not part of the final ratio
decidendi, several of the judgments in both courts touched upon the
question of whether the solicitor's advice was correct or not.

" Per StratfordJA in Hatch v Koopoomal 1936 AD 190 at 209; see generally Steyn op cit note 19
at 25ff.
" Sections 127 and 129 of the Insolvency Act 1986 (c 45).
" Sections 365(2) and 368 of the Companies Act 1981 (Cth).
"' Sections 441(2) and 536(2) of the Companies Act 1 of 1956.
"a Section 54 of RSC 1970 (c B-3).
"Definition of'person' in s 2.
(1868) 3 Ch App 443.
56 As already pointed out above, our law is different, at least if the Insolvency Act definition of
'disposition' applies to s 341(2)-see note 25.
5 (1882) 9 QB 648 (CA); (1884) 9 AC 434 (HL).
02zs THE SOUTH AFRICAN LAW JOURNAL

In the Court of Appeal Jessel MR"8 and Lindley LJ 9 considered

that payment can vailidly be made to a company against which a
winding-up petition has been presented and that the payment will not
be invalidated by the subsequent grant of an order on the petition.
Lindley LJ's reasoning was that the English counterpart of s 341(2)
did not apply to payments to the company. He did not refer to the
possibility that the English counterpart of s 348 may backdate the
winding-up for all purposes, thus affecting the company's ability,
inter alia, to receive payments, although it is implicit in his judgment
that he assumed that this is not the effect of the English provision.
Jessel MR gave no reasons for his view, although it is again implicit in
his conclusion that the English counterpart of s 348 does not backdate
a winding-up for all purposes. Bowen LJ did not find it necessary to
refer to the question.
In the House of Lords the Earl of Selborne LC dealt expressly with
the question of the extent to which the English counterpart of s 348
backdates the commencement of a winding-up, and took the view
that it only does so in so far as dispositions of the company's property
are concerned:6"
'By the Act of Parliament, in the event of a winding-up order being made, it would
date from the time when the petition was presented; and this clause, which no
doubt, according to its true construction, only deals with alienations of the
property of the company, was supposed by the solicitor of the purchasers to make
it questionable whether the payment of a debt due to the company, to the persons
who if there had been no petition would have had a right to receive it, might not be
held, in the event of a winding-up order being made, to be a payment of the
property of the company to a wrong person and therefore an alienation.'
61
Lord Blackburn, however, was more cautious:
'There was a statement that for reasons which they thought sufficient they were not
willing to pay for the iron at present .... [Ilt was a boni fide statement, and a very
plausible statement. I will not say more. I refrain from weighing its value at this
moment ... '
The remaining law lords found it unnecessary to refer to this aspect.
The many subsequent cases in England, Australia and India have
without further discussion accepted these decisions as definitively
laying down that the counterparts of s 348 in these countries do not
backdate a winding-up for all purposes but only for such purposes as
are expressly provided for in their Acts, being primarily their
counterparts of s 341(2). To name but a few: In re Clifton Place Garage
Ltd6 2 and Re Gray's Inn Construction Co Ltd6" (a company may validly
borrow moneys after presentation), and Albion Reid (SA) (Pty) Ltd v
Baron Holdings (Pty) Ltd6 4 (a company may validly purchase goods
after presentation).5
5s At 659. " At 655. 6o At 440. e' At 443.
62 [1970] Ch 477 (CA). 63 [1980] 1 All ER 814 (CA). 04 (1973) 7 SASR 564.
85 Two cases out of line with the great majority of cases are In re The United Ports and General

Insurance Company, ex patte The Etna Insurance Company (1877) 46 LJ Ch 403 and Indian Overseas
Bank Ltd v Kalinga Industries Ltd (1978) 1 Cut 347, in both of which it was assumed that the
winding-up was backdated for all purposes. Millar v The National Bank of Scotland Ltd & others
 BACKDATING OF WINDINGS-UP 629
It is noteworthy that the question had been settled in England by
1884. The significance of this lies in the fact that the concept
embodied in ss 348 and 341(2) was first introduced into this country
only in 1892."6 This gives rise to the question whether the legislature
in this country should be presumed to have known what interpreta-
tion had been placed on the sections by the English courts and to have
intended the sections in our legislation to have the same. meaning.
This question is similar to the question, discussed above, whether
'presentation' in our legislation should be given the same meaning as
in the English legislation. The conclusion reached was that the
differences in context materially restrict the persuasiveness of any
argument that s 348 should be given a similar interpretation to that
given to its English counterpart.
The question of the extent to which a provision such as s 348
backdates the commencement of a winding-up has been most directly
in issue in Canada (although it should be noted that the context in
which the Canadian counterpart of s 348 appears is significantly
different). Section 54 of the Canadian Bankruptcy Act provides:
'The bankruptcy shall be deemed to have relation back to and to commence at the
time of filing of the petition on which a receiving order is made.'
A similarly worded forerunner of this section 7 was in issue in the
leading case of R 9 v Louis Minden & Mindens Ltd."8 The then Act
6
further provided:
'Any person who has been adjudged bankrupt ... shall in each of the cases following
be guilty of an indictable offence ...
(p) If he is guilty of any false representation or other fraud for the purpose of
obtaining the consent of his creditors or any of them to an agreement with
reference to his affairs or to his bankruptcy.'
(The italics are mine.) The Ontario Court of Appeal held that the
offence could be committed between the filing of the bankruptcy
petition and the grant of the order, Middleton JA saying:7"
'After much anxious consideration I have concluded that the combined effect of
these statutory provisions7 " is to make the bankruptcy begin at the time of the
presentation of the petition for all purposes.'7

(1891) 28 ScLR 884 at 888-9 at first sight also appears to be out of line, but it turned on specific
provisions in the Scottish Act. The question whether prescription is interrupted as at the
commencement of the winding-up or on the grant of the winding-up order has been the subject
of conflicting decisions in India and, in relation to the Australian Bankruptcy Act, in Australia.
See generally Thesis 261-3.
" The Companies Act 25 of 1892 (C). (In a sense it had previously been introduced in Natal
,which applied the English law-s 46 of Winding-up Law 19 of 1866 (N)-but 1892 was the first
time it could have acquired a different meaning from that in English law.)
7 Section 4(11) of the Bankruptcy Act RSC 1927 (c 11).
"(1935) 4 DLR 309 (CA Ont).
" Section 191.
o At 312.
The statutory provisions referred to are, apparently, ss 4(11) and 191 already referred to.
72 The court noted that a narrower interpretation had been placed by the English courts on the
English counterpart of the Canadian section. Leave to appeal to the Supreme Court of Canada
was refused by the Supreme Court on the ground that there was no conflicting decision of
another court of appeal, such a conflict being a condition precedent to the Supreme Court's
having jurisdiction to entertain the appeal-Minden v The King 1935 CLR 609, (1935) 4 DLR 593
(SCt of Can).
0.5u THE SOUTH AFRICAN LAW JOURNAL

The Canadian Act has no equivalent of s 341(2), but this has not
ueerru d te LoULsL nluisa ssuiulls 1lt pays1i-le-is dil Uother tranlfC.rs Of
property," including the granting and perfecting of mortgages,7 4 by
a bankrupt after the filing of the bankruptcy petition are invalid; that
a judgment granted against the bankrupt after the filing of the
bankruptcy petition is invalid because the bankrupt lacked the
capacity after that date to defend;75 that creditors' rights to priority in
payment are determined as at the date of the filing of the petition;R
and that the statutory provision granting a landlord a lien for rent for
the three months preceding, and the three months succeeding,
bankruptcy refers to the filing and not the grant of the order. 77
A major objection to interpreting s 348 as backdating the com-
mencement of a winding-up for all purposes is that s 341(2) would
then be redundant, as all dispositions by the company of its property
would in any event be void under s 348, thus offending against the
presumption against superfluity in statutory interpretation. 7" Section
359(1)(b), providing that any attachment or execution after the
commencement of the winding-up is void, would similarly be
redundant.
A further instance of redundancy would be found in ss 340 and
416, which import the impeachment provisions of the Insolvency Act
into the Companies Act and which in so doing expressly provide that
the date of presentation of the winding-up application is to be taken
as equivalent to the date of sequestration. If s 348 backdates a
winding-up for all purposes, the date of presentation would
" Perras v Parant (1958) Que QB 466 (CA); In re Hansard Spruce Mills Ltd (1953) 33 CBR 217
(BC) at 220; In re Soren Brothers (No 2) (1926) 7 CBR 545 (Ont) at 547.
" Re Del Bianco (1978) 29 CBR (NS) 83 (BC); Re Martin & Harlock Electric Ltd (1960) 33 WWR
410 (BC) at 413.
71 Perras v Parant supra note 73 at 468:
. si l'on accepte la doctrine de la r~troactivit6 sur l'adjudication de la faillite la d~bitrice ne
pouvait plus d~fendre 5 l'action.'
(If one accepts the doctrine of retroactivity of the adjudication of insolvency the debtor was no
longer able to defend the action.) See also Bank of Hamilton v Kramer Irwin Co (1912) 1 DLR 475.
76
In re Shapiro (1954) 34 CBR 205 (Ont).
In re Clayton's Women's Wear Ltd, ex parte Louis K Liggett Company Ltd (1933) 14 CBR 361
(CA Ont); but cf Arthur C Weeks Ltd v CanadianCredit Men's Trust Association (1962) 4 CBR (NS)
182 (CA BC). L Duncan & J D Honsberger Bankruptcy in Canada 3 ed (1961) summarize the
position as follows (at 383):
'After [filing] the bankrupt is deemed to have had no title, and no power to convey or charge
what had been his property, or to give receipts for moneys paid to him, or discharges for debts
due to him. Nor is a trustee, asserting his title by relation back, estopped by any representation
made by the bankrupt after the date to which the title relates back.'
They suggest (at 384), however, that the severity of the doctrine is mitigated by the rule that 'the
Court will not permit its officer to insist on a rule of law or equity in the administration of the
estate where insistence would produce an unjust and dishonest result' (quoted in In re Bertone
Construction Co Ltd; Grobstein v Watson, Jack, Hopkins Ltd & others (1961) 2 CBR (NS) 30 (Que) at
35).
" S v Weinberg 1979 (3) SA 89 (A) at 98E-F; Steyn op cit note 19 at 17ff. Could this
presumption be rebutted in the case of s 348 by arguing that, despite its form, the true intention
of s 341(2) is to give the court the power to validate transactions rendered void by s 348? In my
submission the answer is in the negative. Not only does the wording ofs 341(2) not lend itself to
such an interpretation but also not all transactions involve dispositions-for example, payments
to the company-with the result that the court's power to validate would be incomplete, and it is
unlikely that this would have been the intention of the legislature.
BACKDATING OF WINDINGS-UP 631
automatically be equivalent to the date of sequestration and it would
be unnecessary to expressly so provide.
A further consequence of interpreting s 348 as backdating the
commencement of a winding-up for all purposes would be that a
number of anomalies would arise in applying the provisions of the
Insolvency Act, in accordance with s 339 of the Companies Act, in
respect of any matter not dealt with specifically in the Companies
Act. Two examples may be given."9
Section 37 of the Insolvency Act empowers a trustee to elect
whether to continue or terminate any lease entered into by the
insolvent as tenant prior to his insolvency and provides further that
the rental from the date of sequestration until the trustee makes his
election will be preferent as part of the costs of administration. It
follows that if the date of presentation of a winding-up application is
equated with the date of sequestration, the rental during the period
from presentation until the grant of the order-a period which may
run to several months-will be preferent, despite the fact that before
the grant of the order there could be no liquidator in office with
power to decide whether the lease should be continued or not."0
Section 38 of the Insolvency Act provides that sequestration of an
employer's estate terminates the employment of his employees and
s 100 confers a preference in respect of the employees' claims for their
remuneration and leave pay due up to the date of sequestration. If
sequestration is equated with the presentation of the winding-up
application in the case of a company, the company's employees will
not have a claim at all for their remuneration, much less a preferent
claim, for the period from presentation until the grant of the order.
Further assistance in seeking to ascertain the legislature's intention
in enacting s 348 is, I suggest, to be had from the provisions of
s 342(1) of the Companies Act, which enjoins the application of the
assets of a company under winding-up '. . . as nearly as possible as
they would be applied. . . under the law relating to insolvency...'.
It can be said that the nearest possible application would involve an
adoption of the date of the winding-up order and not of the
presentation of the winding-up application as the equivalent of the
date of the sequestration order, and that this by implication excludes
the interpretation that s 348 backdates the commencement of a
winding-up to the date of presentation for all purposes.
Sections 83(3) and 85(1) also call for consideration, because they
could be construed as indicating that the legislature did in fact intend
to backdate the commencement of a winding-up for all purposes.
Both sections relate not to windings-up but to reductions of capital;
however, they refer to claims which, if the dates referred to in the
sections 'were the commencement of the winding-up of the

9 For further examples, see ss 36(1), 85(2) and 101 of the Insolvency Act.
Cf In re Clayton's Women's Wear Ltd, ex parte Louis K Liggett Company Ltd supra note 77.
632 THE SOUTH AFRICAN LAW JOURNAL

company, would be admissible in proof against the company'. In

other words, the secrions contemplate the proof of claims as at the
commencement of the winding-up, which would only be the case if
s 348 backdates the commencement for all purposes. It may be
doubted, however, whether much weight is to be attached to this
indication. Not only do the sections only indirectly relate to
winding-up, but also, as already pointed out, there are a number of
other sections in the Act which refer to the commencement of the
winding-up but which, despite s 348, clearly refer to the grant of the
order, and it is submitted that ss 83(3) and 85(1) should similarly be
construed as referring to the grant of the order and not to the deemed
commencement under s 348.
Further support for the interpretation that s 348 does not backdate
a winding-up for all purposes is to be had from an examination of the
practice in relation to the commencement of windings-up. In
practice, windings-up are treated as being effective from the date of
the winding-up order and not the date of presentation of the
winding-up application: liquidators do not advise creditors of the
date of presentation; claims are proved as at the date of the winding-
up order, for example including all transactions and interest up to that
date, and liquidators do not treat the acts of the company between
presentation and the order as invalid.
The significance of the interpretation placed in practice on
ambiguous legislation is explained in R v Lloyd:"'
'It was admitted that up to the time of this prosecution the officers of the legal
and police departments had acted for over twenty years upon the construction of
the law for which the appellant contends .... Custom, though said to be the best
interpreter, does not dictate absolutely the construction of statutes; but, where a
statute may fairly be interpreted in either of two ways, custom may well be
invoked to tip the balance.'
The significance of the interpretation placed in practice on
ambiguous legislation is, moreover, much increased where the
legislation is re-enacted without amendment after the practice is well
established, as in the case of s 348, which re-enacts s 115 of the 1926
Act in similar terms. Where this occurs, the legislature may fairly be
presumed to have intended to ratify the interpretation placed on the
old provision in practice. The Earl of Halsbury said: 2
'It is quite true, as observed by Griffith C.J., in the above-mentioned case of
D'Emden v. Pedder [(1904) 1 CLR 91 at 110], that: "when a particular form of
legislative enactment which has received authoritative interpretation, whether by
judicial decision or by a long course of practice, is adopted in the framing of a later
Statute, it is a sound rule of construction to hold that the words so adopted were
intended by the legislature to bear the meaning which has been so put upon
them. "'
A possible counterargument would be that s 348 is being ignored,
rather than interpreted, in practice, S" and while a genuine interpreta-
811920 AD 474 at 485-6; see further Steyn op cit note 19 at 157ff.
82 In Webb v Outrim [1907] AC 81 (PC) at 89.
83 Cfthe position in regard to s 341(2) which, in my view, is ignored rather than interpreted.
BACKDATING OF WINDINGS-UP 6.33
tion in practice of a statutory provision can be persuasive in
interpreting that provision, the same cannot be said for a practice of
ignoring the provision. The effect of recognizing a practice of
ignoring s 348, if that is the true nature of the practice, would be to
allow a provision of a post-Union statute to be abrogated by disuse,
which our law does not permit. 4 However, in this case the practice
does in fact constitute an interpretation of s 348 and not merely the
ignoring of the section.
A further anomaly in interpreting s 348 as backdating windings-up
for all purposes would arise from the fact that s 348, unlike s 341(2),
is not limited to companies which are unable to pay their debts. If,
therefore, it were to be interpreted as backdating windings-up for all
purposes, the winding-up even of a company which is able to pay its
debts would be backdated for all purposes, which would be entirely
anomalous. 85
It should also be borne in mind that the question in issue is
essentially whether s 348 should be extensively or restrictively
interpreted. This question has already been considered above, and the
conclusion reached there was that s 348 should be restrictively
interpreted where other factors are not decisive, inasmuch as it can be
the source of considerable hardship both to the company and to third
parties, while contributing little to the achievement of the object of a
fair distribution of the company's estate. It should further be borne in
mind that, unlike in England and elsewhere, it is not possible under
our Act to appoint a provisional liquidator before the grant of the
winding-up order, and it is unlikely that the legislature would have
intended that a company should be deemed to have been under
winding-up when no steps could be taken for the appointment of a
liquidator to control its affairs.
To sum up, the indications that s 348 was not intended to backdate
a winding-up for all purposes considerably outweigh the contra-
indications. If this is accepted, it follows that s 348 only backdates the
commencement of a winding-up for the limited purpose of those
other sections which expressly refer to the commencement of the
winding-up. On this basis, s 348 is more in the nature of a definition
than a substantive provision and serves as a peg on which the other
sections are hung. True, the view has already been taken that despite
s 348 most of these other sections in fact refer to the grant of the
winding-up order when they refer to the commencement of the
winding-up and that it is probably only ss 341(2) and 359(1)(b) that
refer to the commencement as defined in s 348. The result is that the
" Section 87 of the Republic of South Africa Constitution Act 110 of 1983; H R Hahlo &
Ellison Kahn The South African Legal System and its Background (1968) 174.
"' Cf, however, s 359(1)(b), which provides that any attachment or execution after the
commencement of the winding-up is void and which applies whether or not the company is able
to pay its debts, notwithstanding that it serves a purpose only if the company is unable to pay its
debts.
634 THE SOUTH AFRICAN LAW JOURNAL

only function of s 348 is to define the commencement of a winding-

drafting, especially when the same expression is used in other sections

with a different meaning, but, in my view, this is the proper
interpretation of s 348, and Rennie's case was wrongly decided in so
far as it held that the concursus creditorum was established on
presentation of the winding-up application.
A ilnal word: the real problm is that ss '48 and 341(2) are
anachronisms that should have been eliminated a long time ago. Let
us hope that the legislature does eliminate them in the near future.

THE SANCTITY OF THE JURY

'The common law courts administered the common law of England and did so
with the assistance ofjuries. The Lord High Admiral not only spurned juries (an
unforgivable offence in the eyes of any true blooded Englishman, as readers of
the newspapers of today will know) but he administered a law of his own
derived in part from such outlandish sources, as the common law courts saw it,
as Roman law, the Rolls of Oleron of general average fame and what seemed
appropriate to Mediterranean trading nations. Clearly such pretensions could not
be tolerated and in 1389 an Act was passed entitled "An Act concerning what
things the Admiral and his deputy shall meddle" (13 Ric 2 Stat 1 c 5)': per Sir
John Donaldson MR in The Goring [1987] 2 All ER 246 (CA) at 249.

CONCURRENCES: WHERE UNDESIRABLE AND WHERE

PERMISSIBLE
'The very full argument which we have had in this case has not caused me to
change the views which I held when Rookes v Barnard [19641 AC 1129 was
decided or to disagree with any of Lord Devlin's main conclusions. But it has
convinced me that I and my colleagues made a mistake in simply concurring
with Lord Devlin's speech. With the passage of time I have come more and more
firmly to the conclusion that it is never wise to have only one speech in this
House dealing with an important question of law. My main reason is that
experience has shown that those who have to apply the decision to other cases
and still more those who wish to criticise it seem to find it difficult to avoid
treating sentences and phrases in a single speech as if they were provisions in an
Act of Parliament. They do not seem to realise that it is not the function of noble
and learned Lords or indeed of any judges to frame definitions or to lay down
hard and fast rules. It is their function to enunciate principles and much that they
say is intended to be illustrative or explanatory and not to be definitive. When
there are two or more speeches they must be read together and then it is
generally much easier to see what are the principles involved and what are
merely illustrations of it': per Lord Reid in Broome v Cassell & Co Ltd [1972] AC
1027 at 1084.
'It will be seen that I do not agree with Lord Devlin's view [in Rookes v Barnard
[1964] AC 1129] that in certain classes of case exemplary damages serve a useful
purpose in vindicating the strength of the law. That view did not form an
essential step in his argument. Concurrence with the speech of a colleague does
not mean acceptance of every word which he has said. If it did there would be far
fewer concurrences than there are. So I did not regard disagreement on this side
issue as preventing me from giving my concurrence': per Lord Reid idem at
1085.