By Zurayda Mayet | Mayet & Associates
Introduction
In Centaur Mining South Africa (Pty) Ltd v Moodliar N.O. and Others [2026] ZACC 20, the Constitutional Court was asked to decide how far a court may go once it concludes that a company’s separate legal personality has been abused. The answer matters well beyond the facts of this dispute. Section 20(9) of the Companies Act 71 of 2008 (the Companies Act) is the modern statutory home of veil-piercing in South Africa, and liquidators have increasingly treated it as an all-purpose instrument for unwinding fraud. Centaur Mining sets the outer boundary of that instrument.
The case is an offshoot of the broader State Capture litigation arising from the collapse of the Trillian group. Stripped to its essentials, the judgment addresses two questions. The first is procedural: when may a party who was never joined to proceedings have the resulting order rescinded? The second is substantive: does the power to disregard a company’s juristic personality include the power to wind that company up? On the first question, the Court found for the affected creditor. On the second, it held that veil-piercing and liquidation are distinct remedies governed by distinct statutory regimes, and that the one cannot be smuggled in under the other.
What follows is an analysis of the statutory framework, the facts and the route the litigation travelled, the Court’s reasoning on each of the two questions, and the practical consequences for liquidators, creditors and litigators.
The Statutory Framework
Two distinct bodies of law sit at the centre of this judgment, and the Court’s central insight is that they should not be conflated.
Section 20(9). The veil-piercing remedy. Section 20(9) of the Companies Act provides that where a court finds, on application by an interested person or in any proceedings in which a company is involved, that the incorporation of the company, any use of the company, or any act by or on behalf of the company constitutes an unconscionable abuse of the juristic personality of the company as a separate entity, the court may:
- declare that the company is to be deemed not to be a juristic person in respect of any right, obligation or liability of the company, of a shareholder, of a member (in the case of a non-profit company), or of another person specified in the declaration; and
- make any further order the court considers appropriate to give effect to a declaration under paragraph (a).
The provision is the statutory successor to the common-law doctrine of piercing the corporate veil. Its function is corrective and targeted: it allows a court to look past the corporate form in respect of specified rights, obligations or liabilities where the form has been abused. It is concerned with attribution, with reallocating legal consequences so that they attach to the right party, rather than with the dissolution of the company itself.
The winding-up regime. Liquidation is a different exercise altogether. It is governed by a dedicated statutory scheme, with the relevant provisions for the winding-up of insolvent companies still drawn from the Companies Act 61 of 1973 (the 1973 Companies Act), read with the Insolvency Act 24 of 1936. Liquidation does not merely relocate a liability. It terminates the company’s ordinary trading existence, triggers a concursus creditorum, a collective process in which the rights of creditors are frozen and ranked and hands control of the company’s affairs to a liquidator who administers and distributes the estate under court supervision.
The winding-up regime carries its own procedural safeguards. Of particular relevance to Centaur Mining, section 346(4A) of the 1973 Companies Act requires that a copy of a winding-up application be furnished to specified stakeholders, including every registered trade union representing the company’s employees, the employees themselves, and the South African Revenue Service (SARS). These are not optional formalities. They exist to protect parties whose interests are directly engaged when a company is liquidated.
The tension the Court had to resolve was this: section 20(9)(b) is worded broadly enough to tempt a litigant into reading it as a gateway to liquidation, yet liquidation has its own carefully constructed regime that section 20(9) does not displace.
The Facts and the Litigation
The dispute has its origins in the financial implosion of the Trillian group. Investigations by SARS and a forensic auditor established that very substantial sums, including roughly R595 million paid by Eskom to Trillian Management Consulting (Pty) Ltd (TMC), had been moved through a web of related Trillian companies (the subject companies), several of which carried on no genuine business at all. The evidence painted a familiar picture of corporate abuse: the affairs of the subject companies were thoroughly intermingled, money flowed between them without commercial justification, and fictitious invoices were deployed to obscure where the funds had come from and where they had gone.
On that footing, the liquidators of TMC applied to the High Court for relief under section 20(9), contending that the subject companies had been used as instruments of an unconscionable abuse of juristic personality. The High Court agreed. It granted an order, provisional, and later made final, which, in substance:
- deemed the subject companies not to be separate juristic persons in respect of their rights, obligations and liabilities;
- collapsed the subject companies into TMC, which was already in liquidation; and
- treated the subject companies as part of a single, consolidated winding-up, effective from the date on which TMC itself had been placed in liquidation.
The practical effect was that the subject companies were swept into TMC’s liquidation as though they had been wound up alongside it.
One creditor of the subject companies, Centaur Mining South Africa (Pty) Ltd (CMSA), was never cited in the section 20(9) proceedings and knew nothing of the order until it was sued. CMSA had advanced loans to two of the subject companies, Trillian Shared Services (Pty) Ltd and Trillian Financial Advisory (Pty) Ltd and had received partial repayment. The liquidators of TMC instituted action to recover those repayments as voidable dispositions under the Insolvency Act. It was at that point that CMSA appreciated how the section 20(9) order had reshaped its position, and it launched an application to have the order rescinded.
The Two Questions Before the Court
Could CMSA have the order rescinded under Rule 42(1)(a)?
Rule 42(1)(a) of the Uniform Rules of Court permits a court to rescind or vary an order erroneously sought or erroneously granted in the absence of a party affected by it. CMSA’s case was that it satisfied both limbs: the order had been granted without it being before the court, and it had been granted erroneously because the court had no competence to make the order it did.
The liquidators resisted on several fronts. They argued that the order had not been erroneously granted, that CMSA’s complaint was in truth an appeal dressed up as a rescission, and that the consolidated winding-up was by now too far advanced to be unwound.
The Constitutional Court sided with CMSA. It held, first, that CMSA had a direct and substantial legal interest in the order. The order touched CMSA’s ability to enforce its rights under the loan agreements and simultaneously exposed it to recovery claims by TMC’s liquidators that would not have arisen in the same form had the subject companies remained distinct. That interest was current and concrete, not remote or hypothetical.
Second, because CMSA had neither been cited nor been aware of the proceedings, the order had plainly been granted in its absence.
Third, and this is the part of the reasoning with the widest application, the Court held that the order had been erroneously granted. In collapsing the subject companies into a single winding-up, the High Court had, in substance, liquidated them. Yet none of the procedural requirements attaching to a winding-up application had been observed, including the section 346(4A) obligations to notify registered trade unions, employees and SARS. An order that achieves a liquidation while bypassing the statutory machinery for liquidation is, on the Court’s analysis, erroneously granted within the meaning of Rule 42(1)(a). Rescission, in those circumstances, is a competent remedy and not a disguised appeal.
Did section 20(9)(b) authorise the liquidation?
This was the heart of the matter. The liquidators advanced two arguments. Their primary position was that the High Court had never actually liquidated the subject companies; it had simply recognised that they had never been genuinely separate from TMC and had treated their rights, obligations and liabilities as TMC’s. In the alternative, they argued that even if the order did amount to a liquidation, the broad “any further order” language of section 20(9)(b) was wide enough to support it.
The Court rejected both arguments. On the proper construction of section 20(9), it held that paragraph (a) does the substantive work. It permits a court to disregard separate juristic personality in respect of identified rights, obligations or liabilities, while paragraph (b) is purely facilitative. The “further order” power exists only to give effect to a paragraph (a) declaration. However broadly it reads, paragraph (b) is not a free-standing reservoir of remedial authority that a court can draw on to grant whatever relief seems convenient. Any order under paragraph (b) must be appropriate to, and bounded by, the declaration it is meant to implement.
The Court then drew a clear line between veil-piercing and liquidation. The two serve different ends. Veil-piercing reallocates legal consequences. Liquidation winds a company up, creates a concursus creditorum, and governs the administration and distribution of assets under a specialised regime with its own safeguards. On the facts, liquidating the subject companies was simply not necessary to move their rights, obligations and liabilities across to TMC. The relocation could be achieved by the declaration alone. The liquidation component therefore went beyond what section 20(9) permitted.
The Court accordingly set aside the parts of the High Court’s order that purported to liquidate the subject companies, while preserving the relocation of their rights, obligations and liabilities to TMC (in liquidation).
It is worth being precise about the practical outcome, because it is easy to mistake the judgment for a victory that changed nothing. In economic terms, the liquidators ended up in much the same place: all of the contractual rights, claims and obligations of the subject companies were shifted onto TMC, which remained in liquidation, leaving the subject companies as empty shells. The liquidators therefore retained the standing they needed to pursue CMSA. What changed was the legal route by which that result was reached. The Court achieved the reallocation through the veil-piercing declaration that section 20(9) actually authorises, rather than through a liquidation it does not.
The Judgment in Context
Centaur Mining is best understood as part of a broader judicial effort to keep statutory veil-piercing within principled limits, even where the underlying conduct is egregious. The temptation, in cases marked by obvious fraud, is to read remedial provisions expansively so that the wrongdoer does not escape. The Court resisted that temptation, and the resistance is itself the lesson. The breadth of language in section 20(9)(b) is not an invitation to improvise relief; it is a power tethered to the declaration in paragraph (a).
The judgment also reaffirms the continuing relevance of the winding-up provisions of the 1973 Companies Act and the notification safeguards in section 346(4A). Those safeguards are not technicalities to be brushed aside in the interests of expedition. They protect employees, organised labour and the fiscus, and a court cannot achieve a liquidation while leaving them unserved simply because the relief is labelled as something else.
Implications for Practice
Three practical points follow for those who advise insolvency practitioners, creditors and companies caught up in group restructurings.
First, liquidators should not treat section 20(9) as a route to liquidation. Where the objective is to wind up additional companies, the proper course is to invoke the dedicated winding-up regime and to comply with its requirements, including the notification obligations under section 346(4A). A liquidation achieved through a veil-piercing order, without those steps, is vulnerable to rescission. Section 20(9) is a tool for reallocating rights and liabilities; it is not a shortcut around the insolvency statutes.
Second, relief under section 20(9)(b) must be carefully tailored. Even in cases of clear abuse, the further order a court is asked to make must be no wider than is necessary to give effect to the declaration under paragraph (a). Practitioners drafting notices of motion should frame the relief precisely, identify the specific rights, obligations and liabilities to be relocated, and avoid over-reaching prayers that invite a court to grant relief it lacks the power to grant. An over-broad order is not a stronger order; it is a weaker one.
Third, affected parties retain a meaningful remedy where orders are made behind their backs. Rule 42(1)(a) continues to protect a party with a direct and substantial interest who was neither joined nor heard, particularly where the order is tainted by procedural irregularity or by non-compliance with statutory requirements. Creditors and other interested parties who discover, often through subsequent litigation, that their position has been altered by an order to which they were never party should consider rescission promptly, and should not assume that the apparent finality of a winding-up forecloses the remedy.
Concluding Observations
Centaur Mining is a disciplined judgment. It does not let the wrongdoers in the Trillian saga off the hook, the reallocation of liabilities to TMC stands, and the liquidators may proceed against CMSA. What it does is insist that the right result be reached through the right mechanism. Veil-piercing under section 20(9) reassigns legal consequences; it does not dissolve companies. Liquidation dissolves companies, but only through a regime built for that purpose, with the safeguards that regime requires.
For the law of corporate personality, the message is one of restraint. A widely worded remedial power is still a bounded one. For insolvency practice, the message is more concrete: the abuse of a corporate structure, however flagrant, does not license a court to collapse and wind up the offending entities other than in accordance with the statutes that govern winding-up.
How We Can Assist
Mayet & Associates advises liquidators, creditors and companies on corporate and insolvency litigation, including applications under section 20(9) of the Companies Act, business rescue and liquidation proceedings, the recovery of voidable dispositions under the Insolvency Act, and rescission applications under the Uniform Rules of Court. As correspondent attorneys in Bloemfontein, we are also well placed to assist practitioners conducting related appeals before the Supreme Court of Appeal. Should your matter raise any of the issues discussed in this article, please contact the firm.
Mayet & Associates · www.mayet.law
This article is provided for general information only and does not constitute legal advice. Readers should obtain specific advice in respect of their particular circumstances before acting on any of the matters discussed.
