The Supreme Court of Appeal (SCA) has blocked an attempt by Voltex — an electrical supplier owned by corporate giant Bidvest — to push a smaller Johannesburg-based property developer, Resilient Rock, into liquidation over unpaid debts.
Resilient Rock, appointed as the developer for the Gauteng government’s R11-billion Montrose Mega City Development Project, successfully overturned a final liquidation order the high court had granted to Voltex (trading as Atlas Group).
The SCA decision reaffirms critical protections for financially distressed businesses under South African insolvency law.
When the case went to court, Voltex initially lost but later convinced a higher court to order Resilient Rock’s shutdown.
However, another court had already placed Resilient Rock under temporary bankruptcy protection, which complicated matters.
The appeals court on March 31 delivered a rebuke to the Gauteng High Court’s full bench, ruling that it had no authority to grant a final winding-up order against Resilient Rock while another court had already issued a provisional liquidation order in a separate case.
The judgment, penned by Acting Judge of Appeal Bashier Vally, with four other justices concurring, becomes a crucial safeguard against abusive liquidation tactics by dominant creditors.
The dispute began when Voltex, a major supplier in the construction sector, applied for Resilient Rock’s liquidation, claiming the smaller firm was insolvent and unable to pay its debts.
The high court initially dismissed Voltex’s application, finding that it had failed to prove Resilient Rock was commercially insolvent or that the debt was indisputable.
Argument that Companies Act was violated
Undeterred, Voltex appealed to the full court, which overturned the decision and placed Resilient Rock under final liquidation — despite another creditor, Trencon Construction, having already secured a provisional winding-up order against the same company in a separate case.
Resilient Rock fought back, arguing that the full court had violated the Companies Act, which explicitly prohibits courts from granting a final winding-up order if the company is already under provisional liquidation.
In a strongly worded judgment, the SCA dismantled the lower court’s reasoning, declaring that it had misinterpreted the law and ignored binding precedents.
The second-highest court in the land said the law “expressly prohibits a court from granting a final winding-up order in relation to a company that is already being wound up”.
Vally wrote: “The words used, ‘the court shall not grant a final winding-up order’, make it crystal clear that the prohibition is peremptory.”
Voltex argued that the full court, acting as an appellate body, could disregard the provisional liquidation order due to its later issuance, but the court rejected this argument.
“The full court was required to give effect to the legislative intent by either postponing the appeal or striking it off the roll as moot,” the judgment stated. “By failing to do so, it fell into error.”
How did we get here?
In 2017, the Gauteng department of human settlements and the Rand West City local municipality launched the ambitious Montrose City Mega Development, promising thousands of homes and critical infrastructure.
Backed by then-premier David Makhura, the project was hailed as a beacon of hope — until the municipality failed to deliver essential engineering services, leaving the developer to step in at personal cost.
The Montrose City Mega Development, a visionary housing project meant to uplift Gauteng communities, now hangs in the balance after a brutal six-year battle with Voltex, which pushed for liquidation despite the developer’s desperate efforts to settle.
Records showed the developer invested in the Montrose development, and further, the department made R490-million worth of investment into the project, transforming raw land into a R1.6-billion asset — complete with housing units, infrastructure, and bank-approved property sales worth R61-million.
But without the municipality’s promised services, the dream began to crumble.
By 2021, the human settlements department owed the developer R32-million — money it refused to pay, citing the developer’s liquidation status as an excuse.
Subcontractors, also left unpaid, watched in frustration as completed work went uncompensated.
Final liquidation order
Meanwhile, the developer, through its innovative initiations, had secured R200-million in funding approval from the Development Bank of Southern Africa — only for municipal lack of will and/or municipal incompetence and bureaucratic delays and municipal incompetence to stall progress indefinitely.
Enter Voltex, which had supplied R17.4-million in electrical equipment. Despite the developer’s repeated offers to settle — including a R7.5-million payment proposal — Voltex pushed for liquidation.
In June 2023, Voltex succeeded in securing a final liquidation order, forcing the developer into a desperate SCA appeal.
Despite the developer’s eventual victory in the court, Montrose City’s future now lies in ruins.
While the SCA’s decision sets a critical legal precedent, the real losers are the thousands of families waiting for homes and the small businesses left unpaid.
