Latest / Spartan Caselaw Podcast / 19 May 2026 – Piercing corporate veil

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19 May 2026 – Piercing corporate veil · Spartan Caselaw Podcast

• 0:00
  [SPEAKER_00]: Welcome to the case law podcast, this Tuesday, 19th of May.
• 0:04
  [SPEAKER_00]: Two very interesting cases from the Constitutional Court.
• 0:09
  [SPEAKER_00]: First up, sent all mining verses, muddly are.
• 0:13
  [SPEAKER_00]: Now here, sent all mining became embroiled in litigation, arising from the litigation of trillion management consulting.
• 0:20
  [SPEAKER_00]: TMC and related entities now.
• 0:23
  [SPEAKER_00]: The respondents were joint liquidators of TMC and others were companies that were incorporated and used as part of a single economic enterprise with affairs into mingle and controlled by common directors and utilized a channel large sums of state owned entity funds through
• 0:46
  [SPEAKER_00]: Now, following investigations by SARS and forensic auditors, TMC was placed in final liquidation.
• 0:53
  [SPEAKER_00]: The liquidate is then successfully obtained an order under section 20, subsection 9 of the company's act, declaring that Trilion companies were deemed not to be separaturistic purposes.
• 1:06
  [SPEAKER_00]: and perpesting to collapse them into TMC with the liquidation deemed to have commenced on the same date.
• 1:13
  [SPEAKER_00]: Now central mining was not a party to the section 29 proceedings, but was later sued by the liquidators to recover alleged avoidable dispositions.
• 1:23
  [SPEAKER_00]: Now, the High Court dismissed the application and the Supreme Court of Appeal upheld that decision now sent to our mining, then sought leave to appeal to the Concord.
• 1:34
  [SPEAKER_00]: Not challenging the competence of the liquidation aspects of the section 29 order and the refusal to ascend it.
• 1:42
  [SPEAKER_00]: So the Concord really gives us a nice unpacking of the proper scope of section 29 of the company's act, which permits the court on finding a consumable abuse of juristic personality to disregard a company's separate legal existence, the piercing of the corporate veil, and make further orders.
• 2:03
  [SPEAKER_00]: Now, um,
• 2:03
  [SPEAKER_00]: The liquidators, contender that once companies are deemed not to be juristic persons from a company in liquidation, the liquidation necessarily follows, does it, though, the court considered whether central mining had standing as well.
• 2:18
  [SPEAKER_00]: found that it did have direct and substantial legal interest and was prejudicially affected by the section 29 order.
• 2:27
  [SPEAKER_00]: Father the high court order was granted in San Tor mining's absence, and on the interpretation of section 29 the court accepted that the trillions companies and corporation and use.
• 2:37
  [SPEAKER_00]: constituted an unconscionable abuse of juristic personality and that it was competent to deem them not to be separate juristic persons and to relocate their rights obligations and liabilities to the TMC and liquidation.
• 2:51
  [SPEAKER_00]: However, the court held that section 29B does not authorize nor did it require in this case the liquidation of the subject companies.
• 3:00
  [SPEAKER_00]: The prepared liquidation orders went beyond what was appropriate to give effect to the veil piercing
• 3:07
  [SPEAKER_00]: So the order of the SCA was set aside and replaced with an order setting aside the portions of the high court order that prepared it to liquidate the trillion companies.
• 3:18
  [SPEAKER_00]: Now the other case had quite some impact on the media today because of its relation to the NHI.
• 3:25
  [SPEAKER_00]: whole saga going on now.
• 3:27
  [SPEAKER_00]: So solidarity trade union versus Minister of Health.
• 3:31
  [SPEAKER_00]: So the matter concerns an application for confirmation of an order of constitutional invulidity made by the High Court.
• 3:38
  [SPEAKER_00]: In respect of certain sections of the National Health Act,
• 3:42
  [SPEAKER_00]: The applicants comprise solid, derity, professional associations for representing private health care practitioners and individual private health care practitioners and the hospital association.
• 3:54
  [SPEAKER_00]: Now the impuned positions established a certificate of need scheme requiring health establishments, health agencies and health care providers to obtain a certificate from the directed general before establishing operating expanding or continue to provide prescribed health services.
• 4:10
  [SPEAKER_00]: failing which, can you believe this criminal sanctions apply?
• 4:16
  [SPEAKER_00]: So the stated purpose of this scheme is to provide equitable geographic distribution of health services and to enforce norms and standards within the health sector.
• 4:25
  [SPEAKER_00]: So the applicants approached the high court seeking a declaration that these sections of the National Health Care Act are unconstitutional in the high court upheld the challenge.
• 4:35
  [SPEAKER_00]: And other courts first addressed whether the matter constituted an impermissible abstract challenge and applying established constitutional principles.
• 4:43
  [SPEAKER_00]: So, since the challenge was rap, concerned facial constitutional defects and raised a genuine dispute and warranted determination.
• 4:55
  [SPEAKER_00]: Not turning to the merits that court analysed the rationality of this divisive need scheme, emphasizing that all exercises of public power must be rationally connected to a legitimate company government purpose.
• 5:06
  [SPEAKER_00]: While the purpose of addressing an equitable access to health was accepted as legitimate, the court found that no rational connection
• 5:14
  [SPEAKER_00]: Between their purpose and the means adopted, the scheme failed to define its scope left critical matters to ministerial discretion through regulations, and it's found not to advance the enforcement of norms and standards, and the court also considered the impact on the scheme on the constitutional right in section 22.
• 5:32
  [SPEAKER_00]: To choose a trade occupational profession freely, we wouldn't want our doctors any more of them fleeing overseas.
• 5:40
  [SPEAKER_00]: The court concluded that section 36 to 40 of the National Health Act are irrational and inconsistent with the principle of legality.
• 5:48
  [SPEAKER_00]: In addition, the preventables were found to impose severe and unjustifiable limitations on the section 22 arrived to
• 5:57
  [SPEAKER_00]: And the limitations could not be justified under Section 36 of the Constitution, having found an unjustifiable infringement of Section 22.
• 6:07
  [SPEAKER_00]: It was unnecessary to term in the alleged infringement of other constitutional rights, or issues of provincial and local government competence.
• 6:16
  [SPEAKER_00]: So the order of constitutional invalidity made by the High Court is confirmed.
• 6:22
  [SPEAKER_00]: Now, a nice eviction witness here for the occupant at Slongwana versus Meso N.O., but perhaps not so good for the executrix.
• 6:32
  [SPEAKER_00]: The impenant to Mr. Slongwana is a 43-year-old man who is living on the property in Tembisa since birth.
• 6:38
  [SPEAKER_00]: Together with his partner and three children, one of whom suffers from epilepsy, the first respondent, Mr. Meso, act as the executrix of the estates of the deceased registered owners.
• 6:50
  [SPEAKER_00]: Now eviction proceedings were instituted after the deaths of the registered owners and the magistrates caught granted an eviction.
• 6:59
  [SPEAKER_00]: Now the appellant noted an appeal.
• 7:02
  [SPEAKER_00]: So there was condemnation because the delays were not insignificant and a state of execution was warranted because eviction would cause irreparable harm and on the merits the court set out the framework and constitutional principles.
• 7:17
  [SPEAKER_00]: Confirmed that the owners raised throughout on the eviction applicant to place sufficient facts before the court.
• 7:23
  [SPEAKER_00]: The magistrate's court misdirected itself by effectively shifting the burden to the appallant to show why the eviction should not be granted.
• 7:31
  [SPEAKER_00]: Further misdirections arose from the failure to engage properly with a bonafired dispute effect.
• 7:37
  [SPEAKER_00]: Regarding an alleged written sale agreement, the erroneous inference of a valid verbal lease concluded when the apparent was a murder, an inadequate treatment of homelessness alternative company, accommodation, and the role of the municipality.
• 7:51
  [SPEAKER_00]: So the court stressed that long-standing occupation, the presence of minor children and the absence of a meaningful municipal report,
• 7:58
  [SPEAKER_00]: and the lack of meaningful engagement will all central considerations in the just inequitable inquiry.
• 8:04
  [SPEAKER_00]: The high court found that the magistrates court committed a material era of law in fact.
• 8:09
  [SPEAKER_00]: The eviction order was granted an incomplete, evidential record without a proper inquiry into homelessness alternative accommodation or the best interest of the children.
• 8:20
  [SPEAKER_00]: The municipality failed to assist the court with relevant information, and the respondents did not discharge the owners.
• 8:26
  [SPEAKER_00]: Of demonstrating that eviction would be just an equitable, a cumulative effect of these deficiencies meant that eviction could not be constitutionally justified.
• 8:35
  [SPEAKER_00]: The appellants longstanding occupation, vulnerability of minor children, and the real risk of homelessness outweigh the respondents interest in immediate vindication of property rights.
• 8:46
  [SPEAKER_00]: So, the peel is reinstated, the eviction order is set aside and replaced to the order, dismissing the eviction application.
• 8:54
  [SPEAKER_00]: And now, interesting one here on the family side, it's about a maintenance variation.
• 9:00
  [SPEAKER_00]: So, AMB versus JFDB, the parties here were married for 32 years and divorced in 2020, which by order of the high court.
• 9:10
  [SPEAKER_00]: which incorporated the deed of settlement concluded shortly before the divorce now.
• 9:14
  [SPEAKER_00]: In terms of that deed, must to be undertook to pay a life-long, a life-long spousal maintenance to Mrs. B in the amount of 20,000.
• 9:23
  [SPEAKER_00]: Subject only to the dumb Castro condition that the maintenance would terminate, if she remarried or entered into a permanent cohabitation relationship.
• 9:31
  [SPEAKER_00]: And further agreed that the obligation would survive his death and bind his deceased estate, quiet comprehensive and clear that one but in 2024, must be approached the Bethlehem maintenance court seeking to discharge or substitute the high court maintenance order.
• 9:47
  [SPEAKER_00]: So the waitings court did indeed grant an order substituting the monthly maintenance obligation with a one-sour flump pump payment of 350,000 effectively extinguishing the agreed maintenance
• 10:01
  [SPEAKER_00]: This is the appeal against the maintenance court order containing the magistrate misdirected herself.
• 10:08
  [SPEAKER_00]: So this is a really nice case.
• 10:10
  [SPEAKER_00]: It looks at some great previous cases and the good cause under the maintenance act.
• 10:15
  [SPEAKER_00]: So the court considers the interaction between sections 6-1-B and section 16 of the maintenance act and the divorce act.
• 10:23
  [SPEAKER_00]: Now the applicable test was where the good cause had been shown, which generally requires
• 10:31
  [SPEAKER_00]: or unfair.
• 10:33
  [SPEAKER_00]: Now while maintenance courts do have jurisdiction, to vary or discharge high court maintenance orders, the discretion must be exercised bearingly and with due regard to the settlement agreement, particularly where the parties themselves defined the conditions under which maintenance would terminate.
• 10:50
  [SPEAKER_00]: Now Reliance was placed on the case of LDB versus JESB, which held that a maintenance court may not reconsider the party's relative means in a vacuum or impose a new maintenance regime without first identifying good cause to depart from the settlement terms.
• 11:08
  [SPEAKER_00]: So, of course, scrutinized the magistrate's reasoning, noting that the absence of any proper engagement with a dumb castrate condition, and the agreed lifelong nature of maintenance or Mr. B's acknowledgement of Mrs. B's ongoing needs.
• 11:22
  [SPEAKER_00]: So, the magistrate's reliance on the supposed clean break principal and fairness considerations was actually misplaced as no such obligation exists under the Maintenance Act.
• 11:32
  [SPEAKER_00]: It was found that the maintenance court materially misdirected itself a magistrate failed to consider the terms of the deed of settlement, at the starting point for the inquiry, and did not properly assess Mr. B's incoming expenses.
• 11:47
  [SPEAKER_00]: So the substitution of a lifelong maintenance
• 11:49
  [SPEAKER_00]: Obligation with a lump sum payment, constituted the imposition of a new maintenance regime with art lawful justification, this clean break principle applied here was erroneous and the conclusion that Mrs. B should have been financially independent following the division was unsupported by the evidence.
• 12:07
  [SPEAKER_00]: The maintenance court should not have interfered with the existing high court order.
• 12:11
  [SPEAKER_00]: The appeal succeeds in the order of the maintenance court, said aside and replaced
• 12:18
  [SPEAKER_00]: Now, Nullabana returns and sequestration.
• 12:23
  [SPEAKER_00]: Nice case here.
• 12:25
  [SPEAKER_00]: It's clear versus surface by acting judge Greek.
• 12:28
  [SPEAKER_00]: Now, it's an application for the provisional sequestration and the applicant relies on a default judgment granted way back in 2021 for 590,000.
• 12:38
  [SPEAKER_00]: which still remains unpaid.
• 12:40
  [SPEAKER_00]: Now the applicant alleges that the respondent committed an act of insolvency under section 8b of the insolvency act by reason of a nuller baller return.
• 12:50
  [SPEAKER_00]: In alternatively that the respondent as a backup factor was factually insolvent.
• 12:56
  [SPEAKER_00]: So the main objection to the masters except certificate was rejected.
• 13:02
  [SPEAKER_00]: Now, this one's a nice read on these Nullabana returns, and in relation to Section 8B, the core held at a Nullabana return must reflect that no disposable property of any nature was found, not merely movable.
• 13:17
  [SPEAKER_00]: Other sheriffs returned in this matter referred only to movable property, relied on an unsigned to the bigot containing irregular alterations, and was unsupported by an explanatory effort from the sheriff.
• 13:29
  [SPEAKER_00]: Accordingly neither limit section 8b was satisfied and no active insolvency was established.
• 13:35
  [SPEAKER_00]: But there was that backup factor.
• 13:37
  [SPEAKER_00]: The court didn't consider factual insolvency.
• 13:40
  [SPEAKER_00]: So the responded admitted that he owned no immutable property and had failed to satisfy the judgment debt for several years.
• 13:47
  [SPEAKER_00]: His decision application had been dismissed and the bear assertions of earning 150,000 per month, I mean able to pay his debt, who had supported.
• 13:56
  [SPEAKER_00]: So, notwithstanding, that is financial affairs, lay peculiarly within his own knowledge, so on advantage to creditors.
• 14:04
  [SPEAKER_00]: It made clear, the case law, that the test is broad and forward-looking, the respondents involvement as a director of multiple companies and trustee of various trusts, justified the appointment of a trustee with investigative powers and sequestration would provide superior machinery for uncovering assets for impeachable transactions.
• 14:22
  [SPEAKER_00]: The court found, in the end, that no act of insolvency had been established under 8b of the insolvency act due to the defective dollar boner at 10, however.
• 14:34
  [SPEAKER_00]: Factual insolvency was established on a balance of probabilities by a reason of a long-standing unpaid judgment did to failure of a decision-proceedings and the respondents in a ability to re-buck the inference that his liabilities exceeded his assets.
• 14:48
  [SPEAKER_00]: The court also found that there was reason to believe that the sequestration would be to the advantage of the creditors given the respondents' complex financial affairs and the need for investigation by a trustee.
• 15:03
  [SPEAKER_00]: Now, Standard Bank was faced with a most entertaining range of defenses here in a summary judgment application that Standard Bank versus Adams, and the judge here has to go look at foreign jurisdictions to give us guidance now.
• 15:20
  [SPEAKER_00]: It's an interesting one to keep in the records, in case another defendant comes up with these defenses, so it's a fascinating read.
• 15:29
  [SPEAKER_00]: So the respondents raised what was called pseudo-law defenses to stand a bank summary judgment application.
• 15:36
  [SPEAKER_00]: After they defaulted on payments for a home loan, now they must have surfed the internet because they weren't incredibly creative.
• 15:42
  [SPEAKER_00]: They are pre-affered in oral submissions, rest of what is termed in foreign jurisdictions.
• 15:47
  [SPEAKER_00]: The sovereign citizen or organized pseudo-legal commercial arguments, Opka, is actually a abbreviation for it.
• 15:55
  [SPEAKER_00]: So the respondents' arguments are not unique, courts and Canada, Australia and New Zealand have over the last decade had to grapple with several arguments, often in mortgage and foreclosure cases.
• 16:07
  [SPEAKER_00]: I wonder if there's a website providing advice for these people.
• 16:11
  [SPEAKER_00]: Now, these jurisdictions have developed a helpful vocabulary and analytical framework and deserve mentioning.
• 16:17
  [SPEAKER_00]: Foreign courts have described these store-man dairy-all caps argument and this one was incredibly entertaining.
• 16:24
  [SPEAKER_00]: Have a look at this judgment, it's well worth a read with a cup of coffee, standard bank versus atoms.
• 16:29
  [SPEAKER_00]: Now, um, the storeman theory or caps argument is unpacked in some detail and have uniformly rejected it overseas.
• 16:38
  [SPEAKER_00]: And the attempt to invoke Aboriginal or Indigenous rights, free prior and informed consent, f-pick, or the Indigenous Knowledge Act, requiring the plaintiff to entertain authorization before lending against or enforcing a bond owner.
• 16:51
  [SPEAKER_00]: The mortgage property is almost not available to the respondents and
• 16:58
  [SPEAKER_00]: And then on a more serious note, admission of hearsay evidence, and do you have a look at the rest of our cases?
• 17:04
  [SPEAKER_00]: Because we've got some really important landmark cases as well, which were mentioned in this case on hearsay evidence.
• 17:12
  [SPEAKER_00]: Now, it's take versus Kula and some of these cases are very interesting.
• 17:17
  [SPEAKER_00]: One of the landmarks is about a magistrate, actually that killed someone in alleged self-defense with a pistol at his house, and it's really good reading from a nuts and old SCA case.
• 17:28
  [SPEAKER_00]: So in this case, from the high court, it's state versus cooler, and the state charged Mr. Kula with multiple serious offenses, including the murder of his wife.
• 17:37
  [SPEAKER_00]: Now, central to the prosecution case, was with a Mr. Fiza, or a front telephone, they accused on that day to alert him to suspicious persons near the accused home.
• 17:48
  [SPEAKER_00]: So, Fiza made a written statement to the investigating officer, Sergeant Tempuri, addressing this issue.
• 17:54
  [SPEAKER_00]: But before the trial resumed, Fiza died and could not testify, the state sought to rely on his written statement while the defense opposed its submission.
• 18:04
  [SPEAKER_00]: Now, during the trial, Sergeant and Pooody testified and recounted what Caesar had allegedly told him.
• 18:10
  [SPEAKER_00]: Now, Judge Rady gives us a really good judgment explaining the case law and the factors for admission of hearsay evidence.
• 18:17
  [SPEAKER_00]: It's quite lengthy and detailed, and it's a really great one to keep as a reference for hearsay evidence, because it transverses all of the classic cases on the topic.
• 18:27
  [SPEAKER_00]: So, I haven't weighed all the factors cumulatively and in a constantly compliant manner, the court was not persuaded that the interests of justice required the admission of Sweden's statement.
• 18:38
  [SPEAKER_00]: The ambiguity of the statement on the very point for which it was tended, the absence of objective corroboration and the fact that it was commissioned by a witness who testified on the same issue and the unresolved and significant prejudice to the accused,
• 18:52
  [SPEAKER_00]: meant that there was no adequate pointers to the truthfulness for reliability or probative value.
• 18:58
  [SPEAKER_00]: Now here's a evidence is a fascinating topic, especially in labor matters and especially in criminal ones and we'll see you tomorrow for more case law.