04/09/2026
PERSONAL LIABILITY FOR DIRECTOR
South African Alpha SCP, on behalf of Challenger Trade, provided funding to Bonfrut, a fruit exporter. Bonfrut later became indebted to Challenger and was placed in liquidation; the liquidation and distribution account reflected indebtedness of R9,583,692. Alwyn Uys (Uys Junior) was a director of Bonfrut and was involved in financial management, budgeting, creditor payments and administration of the Challenger account. Evidence at a section 417 enquiry showed that funds which should have been applied to Challenger were instead used for suppliers, company expenses and other creditors, while Bonfrut’s financial position deteriorated.
Challenger sought an order under section 424 of the Companies Act 61 of 1973 declaring Uys Junior personally liable for Bonfrut’s debts on the basis that he knowingly participated in carrying on its business recklessly and/or with intent to defraud creditors. The section 417 evidence was admissible in civil proceedings under ordinary evidential principles where the requirements of section 3(1)(c) of the Law of Evidence Amendment Act were satisfied. The enquiry evidence had been given under oath, concerned firsthand knowledge of Bonfrut’s operations, was supported by documentary material and other evidence, and had substantial probative value.
Bonfrut was trading recklessly and Uys Junior knew of and concurred in that conduct. He had access to Bonfrut’s financial systems, could see amounts owing to creditors, was responsible for creditor payments and the Challenger account, calculated and approved payments to Challenger and understood that Challenger was entitled to monies received from offtakers. Financial information demonstrated serious deterioration and payments to preferred creditors while Challenger remained unpaid. A reasonable businessman in Uys Junior’s position would have appreciated that there was no reasonable prospect of Challenger receiving payment when due. His defence that he merely acted on Uys Senior’s instructions was untenable: he was a director in his own right and played a key role in Bonfrut’s financial administration. He remained liable also on the basis of his role as prescribed officer after resigning as director. The requirements for personal liability under section 424 were therefore established. Uys Junior was declared liable for the debts of Bonfrut.
South African Alpha SCP obo Challenger v Uys and Others (20382/2023) [2026] ZAWCHC 459 (31 August 2026)