Court shuts down Joburg’s R2m legal bid against ‘non-existent’ companies

In a case that sounds almost like legal satire, the Johannesburg High Court has dismissed an application by the City of Johannesburgafter finding it was effectively trying to sue companies that no longer exist.

Yes, you read that right.

The court ruled that the City’s attempt to force two deregistered companies to provide R2 million in legal costs was fundamentally flawed, because those companies had already ceased to exist in the eyes of the law.

A legal battle that started over two decades ago

To understand how things got here, you have to go back to 2001, when property sale agreements were concluded involving land in Alexandraone of Johannesburg’s most historically complex and densely populated areas.

Two years later, in 2003, the sale was declared null and void, with the properties meant to return to the City.

But that wasn’t the end.

The companies involvedCapensis Investments 352 and 322kept the matter alive, at one point pursuing a damages claim of more than R27 million against the City. Over the years, the case twisted through multiple legal turns, abandoned applications, and prolonged disputes.

As the presiding judge noted, the matter carries a “protracted and complex history” stretching back more than 20 years.

When the companies vanished from the legal map

Here’s where things take a strange turn.

The sole director behind the companies passed away in 2021. Around the same time, the companies themselves began the process of deregistration after failing to file annual returns.

Despite attempts by the City to stop this process, the companies were officially deregistered on 30 March 2023.

In simple terms, they became what the law calls a “nullity”entities that no longer exist and therefore cannot act, respond, or be held accountable in legal proceedings.

Yet, the City pressed ahead with its application.

The judge’s key point: you can’t have it both ways

One of the most striking aspects of the ruling was the court’s criticism of the City’s legal stance.

On one hand, the City arguedcorrectlythat deregistered companies cannot take part in legal proceedings and that any actions taken on their behalf are invalid.

On the other hand, it was simultaneously trying to take legal action against those same companies.

The court wasn’t convinced.

In essence, the judge found that the City was attempting to argue two contradictory positions at onceand that simply doesn’t hold up in law.

A bizarre subplot: the “fake lawyer” twist

Adding another layer of intrigue to the case was the appearance of a man who initially introduced himself under one name, then later claimed to be Advocate Ephraim Sepheka.

He stepped into proceedings, saying he was acting for the late director’s estate, and began filing documents and communicating on behalf of the companies.

The City challenged his authority, especially after claims about the companies’ deregistration status proved to be inaccurate.

At one point, legal representation for the companies even changed handsdespite their deregistered status.

For many observers, this part of the case raised serious questions about oversight and accountability within prolonged legal disputes.

Why this ruling matters beyond the courtroom

At first glance, this might seem like just another technical legal decision. But it highlights deeper issues in Johannesburg’s governance and legal processes.

For one, it shows how long-running disputes can spiral into costly and confusing battles, especially when administrative detailslike company registrationfall through the cracks.

Secondly, it reflects a broader frustration many South Africans feel about municipal efficiency. On social media, reactions to the ruling ranged from disbelief to humour:

• “Only in Joburg can you sue ghosts,” one user joked
• Others questioned how public funds were spent pursuing a case with such a fundamental flaw

There’s also a more serious concern: legal costs. The court ordered the City to pay costs, meaning taxpayers ultimately foot the bill for a case that could not succeed.

The bigger legal lesson: what is a “nullity”?

The court made it clear: once a company is deregistered, it no longer exists in law.

That means it cannot:

• Be sued
• Defend itself
• Comply with court orders
• Pay costs or provide guarantees

In legal terms, it’s as if the entity has vanished entirely.

A cautionary tale for the City

This case may be over, but it leaves behind an important lesson.

For the City of Johannesburg, it’s a reminder that legal strategy must align with legal reality. For residents, it’s another example of how complexand sometimes chaoticmunicipal legal battles can become.

And for anyone watching from the sidelines, it’s a story that feels uniquely South African: a mix of history, bureaucracy, and just enough drama to make you shake your head and say, “Only here.”

{Source: IOL}

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