In terms of section 83 of the Companies Act, No. 71 of 2008 (“Companies Act“), the deregistration of a company does not affect the liability of a director in respect of any act or omission before the deregistration of a company and such liability continues and may be enforced as if the company had not been deregistered. On 24 March 2026, the High Court of South Africa, Western Cape Division, Cape Town (“High Court“), in Lupacchini NO v That Collective (Pty) Ltd and Others (11348/2019) [2026] ZAWCHC 137, decided that, notwithstanding the company deregistration, the directors (including a de facto director) of a deregistered company were in contempt of a court order issued against the deregistered company during the directors’ tenure.

What happened?

The dispute dates back to November 2017. The late Ms Christine Lesley Conradie (“Conradie“), a teacher during her lifetime, concluded a written agreement with That Collective Proprietary Limited (“That Collective“) to develop a mobile application for an educational game called “Bumbledings”. That Collective subcontracted its obligations to Mr Byron Lyndom Smith (“Smith“).

On 17 August 2019, the High Court issued an order (“2019 Order“) compelling Smith to deliver to Conradie a final and complete version of the mobile application relating to the educational game, including various specified components. Although the initial proceeding cited both That Collective and Smith, only That Collective opposed the application. Therefore, the 2019 Order was granted against Smith by default.

Following the hearing of the opposed application, the High Court granted a further order in 2020 (“2020 Order“) against That Collective. The terms of the 2020 Order were similar to the 2019 Order. It directed That Collective to provide Conradie with the complete functional version of the educational game which Smith had been contracted by That Collective to design.

In 2025, and before compliance by the respondents with the 2020 Order and the 2019 Order, Conradie died. Rochelle Lupacchini, (“Lupacchini“), the executrix of the estate of Conradie, initiated a contempt of court application (“Contempt Application“) in the High Court to hold –

• That Collective, together with its registered director Ms Lavina Suzette Bell-Roberts (“Lavina“) and de facto director Mr Brendon John Bell-Roberts (“Brendon“), in contempt of the 2020 Order, on the basis that both Lavina and Brendon (a married couple) were directors of That Collective when the 2020 Order was granted and were responsible for ensuring compliance with the 2020 Order; and

• Smith in contempt of the 2019 Order.

In January 2024, and prior to the institution of the Contempt Application, That Collective was deregistered due to its failure to file annual returns. Brendon and Lavina were neither cited as parties nor joined in the initial proceedings relating to the 2019 Order and the 2020 Order. Lupacchini said she cited Brendon and Lavina because, in terms of section 83(2) of the Companies Act, the removal of That Collective from the companies register “does not affect the liability of any former director or shareholder of the company or any other person in respect of any act or omission that took place before the company was removed from the register”.

Notwithstanding her entitlement to apply for the reinstatement of That Collective in terms of section 82 of the Companies Act or for an order declaring its dissolution void in terms of section 83(4) of the Companies Act, Lupacchini did not seek this recourse.

The Lupacchini judgment provides answers to the following practical questions—

• whether a contempt of court order may be granted against a company that has been deregistered and thus dissolved in terms of the Companies Act; and

• whether a director of a deregistered company may be held personally liable for contempt regarding a court order issued against a company prior to its dissolution, specifically in the absence of a formal joinder application?

What does Section 83 of the Companies Act say?

Section 83 of the Companies Act provides as follows —

What were the arguments raised by Brendon and Lavina?

Brendon and Lavina (the directors of That Collective) contested their personal liability for contempt of court based on the following grounds —

• they were neither cited as parties to, nor joined in, the initial proceedings that resulted in the 2019 Order and the 2020 Order; therefore, it was procedurally incorrect to hold them responsible for non-compliance with the court orders;

• they had acted reasonably because That Collective had subcontracted its obligations to Smith to develop the educational game; therefore, Smith could comply with the 2019 Order; and

• That Collective complied with the 2020 Order insofar as it was capable to do so; it did not have all of the components listed in that court order in its possession but handed over what it did have.

In response, Lupacchini argued that Brendon and Lavina failed to set out steps they took to ensure compliance by That Collective with the 2020 Order, but they laid the compliance burden entirely at the door of Smith, the subcontractor.

What did the court say?

In regard to the question whether a contempt of court order may be granted against That Collective notwithstanding its deregistration, Acting Judge Van Zyl reaffirmed a trite legal principle that upon its deregistration, a company loses its legal status and may neither initiate litigation nor be litigated against. Therefore, the contempt of court order was not granted against That Collective.

In regard to the question whether the directors of That Collective may be held in contempt of court notwithstanding the deregistration of That Collective, the Acting Judge said the following—

• “[37]    The applicant relies on section 83 of the Companies Act. As indicated, section 83(2) provides that deregistration “does not affect the liability of any former director or shareholder of the company or any other person in respect of any act or omission that took place before the company was removed from the register”.

  [38]    Section 83(3) in turn provides that any liability contemplated in section 83(2) continues and may be enforced as if the company had not been removed from the register. Whether or not the second and third respondents [Lavina and Brendon] allowed the company to be deregistered by design, they remain responsible for ensuring that the court order be complied with.“

  39.    The first respondent [That Collective] – prior to its deregistration – could only function through its directors.  It is common cause between the parties that the second respondent [Lavina] was at all relevant times reflected in the relevant CIPC records as the first respondent’s director, while the third respondent [Brendon] was not.  It appears, however, that the third respondent [Brendon] has since the inception of the first respondent’s involvement with the applicant undertaken the role of director…”

  [40]    A de facto director is a person who claims to act and purports to act as a director without having been so appointed either validly or at all. On the particular facts of this matter the third respondent [Brendon] was a de facto director. Apart from being held out as the first respondent’s director, he in fact participated in the running of the business of the first respondent [That Collective] on an equal footing with the second respondent [Lavina], and not in a subordinate role. This is not surprising because it appears that the second and third respondents [Lavina and Brendon] were the only persons involved in managing the first respondent’s [That Collective’s] business. Without them the first respondent [That Collective] would exist in name only, and would not have been able to conducts (sic) its business, including the conclusion of the agreement with the applicant [Conradie].” [Emphasis added]; and

• “45.         The second [Lavina] and third respondents [Brendon] should not be allowed to rely on the deregistration of the first respondent [That Collective] to escape the latter’s liabilities towards the applicant [Conradie] under the 2020 order.  There is, incidentally, no explanation in the answering papers as to why the first respondent’s [That Collective] deregistration was allowed to occur despite its continued non-compliance with the terms of the 2020 order.  One forms the impression that the second and third respondents [Lavina and Brendon] allowed the first respondent [That Collective] to slip away so as to avoid having to fulfil its obligations.“

What does this mean for me?

The following are practical lessons for directors arising from the Lupacchini judgment—

• directors should not view the deregistration of a company as a way to wipe clean the slate of its liabilities that may arise based on the directors’ act or omission prior to deregistration, particularly where such directors had actual knowledge of incidents giving rise to those liabilities; and

• in terms of section 1 of the Companies Act, the definition of “director” includes any person “…occupying the position of a director or alternate director, by whatever name designated”; therefore, a person who has not been formally appointed as a director of a company but conducts himself/herself as a such and exercises powers associated with that office, is a de facto director and will, in terms of the Companies Act, be held liable in the same manner as a director who has formally been appointed.