PAY UP: Pay R110.7m, or face liquidation — the ultimatum facing WP Rugby Football Union

Dream World Investments 401 (Pty) Ltd, the company that loaned the Western Province Rugby Football Union (WPRFU) more than R100-million in 2020, through its lawyers, has served a formal demand on the union and its trustees.

Hatstone Attorneys, acting on behalf of Dream World, issued the demand on 22 October 2026 under section 345(1)(a) of the Companies Act of 1973.

It requires the union to pay R110,732,462.66 with interest, or to secure or settle the debt to Dream World’s “reasonable satisfaction”.

If the union does none of these, the law will deem it unable to pay its debts. Dream World says it will then apply to have it wound up.

The money is what Dream World paid in August 2020 to settle the union’s debts to Remgro and Investec. That payment was meant to be the first step in a deal with property developer Flyt (Dream World is the financier to Flyt) to redevelop Newlands Stadium.

Within four months, the deal had collapsed and the two sides have been fighting over it in the Western Cape high court since 2021.

That case has not yet gone to trial as the union filed its plea only in August. The new demand does not replace the existing legal action, because Dream World expressly reserves its claims there for interest, fees and damages. But a winding-up application could put the union’s affairs, and Newlands, in the hands of a liquidator long before the damages case is decided.

Dream World argues it is owed the R110.7-million whichever way the contract dispute is decided:

• If Dream World validly cancelled the loan agreement in December 2020, as it says it did, the money must be returned.

• If the agreement never took effect or is void, as the union argues, the money must still come back. That would happen either under the agreement’s own terms or because the union was enriched when its debts were paid.

• If the agreement still stands, the full amount fell due in August 2024, 48 months after it was advanced.

• The union would pay interest at prime, a R1.1-million raising fee and a “development charge” equal to 30% of the loan.

• The loan was repayable after 48 months.

• Once planning approvals were granted, the union would sell Newlands Stadium to the joint development company for a price equal to the loan amount.

• The deal had been negotiated with Flyt as the lender. Late in June 2020, the union was told Dream World would lend the money instead, but the loan agreement was not fully updated.

• One of its conditions was that the term sheet be signed by “both Parties”, which in the loan agreement meant Dream World and the union.

• Flyt signed the term sheet, not Dream World. So, the union argued, the condition was never met by the 31 July 2020 deadline and the loan agreement lapsed.

• The union knew Dream World was the lender, because its council and trustees had resolved to borrow from Dream World. The wording was a shared error that should be corrected.

• Even if the condition had not been met, the agreement provided that because Dream World had paid out the money, it was deemed to have waived the condition.

• The loan agreement’s own schedule valued Newlands Stadium at R176.75-million, and the deal had been negotiated at arm’s length with lawyers on both sides:

• Newlands’ market value of about R380-million in June 2020;

• The court-ordered Remgro deadline;

• A “material inequality of bargaining power” between the parties;

• R113.1-million, the loan plus interest to 10 December 2020;

• R1.3-million for the raising fee, with interest;

• R30.2-million in damages, the current value of the 30% development charge it says it lost;

• Whether the union would pay;

• Whether it accepted that it owed the money regardless of what happened to the contract;

• Whether it disputed that the payments were made; and

• What had become of the Newlands sale.

The union is defending the action and declined to comment.

Where the debt began

The saga’s roots go back a decade. In November and December 2016, WPRFU borrowed about R44-million from Remgro Sport Investments in four loans, after its professional arm, WP Rugby (Pty) Ltd, was placed in liquidation.

On 20 December 2016, Judge Ashley Binns-Ward placed the commercial arm, WP Rugby (Pty) Ltd, into final liquidation.

The money was urgently needed to pay player and staff salaries.

The union fell behind on interest. According to the loan agreement, it owed Remgro about R57.9-million by June 2020.

In late 2019, the union took a R50-million advance from Investec’s property division, tied to a deal to sell the development rights to the Newlands Stadium property portfolio.

The heads of agreement were signed in late November 2019. The union needed the money for mounting cash-flow problems and everyday operating costs.

By June 2020, the Investec deal had failed.

At the time, then WPRFU President Zelt Marais said the deal was “subject to the fulfilment of certain suspensive conditions by 29 May”.

According to Marais, that did not happen and WPRFU decided to “walk away” from the deal.

Because the money had already been spent, the advance became a debt.

The loan agreement put the Investec debt at about R55-million on 30 June 2020.

The pressure was intense. According to the union’s plea, a court order required it to repay Remgro by 30 June 2020. If it did not, Remgro could auction Newlands Stadium to settle the debt. The union did not have the money.

Enter Flyt

Under then president Marais, the union turned to the little-known Flyt Property Group.

A deal, signed on 10 July 2020, had two parts. Under a loan agreement, Dream World would pay off the Remgro and Investec debts. Under a “binding term sheet”, Flyt and the union would set up a joint company to redevelop Newlands Stadium and the nearby Brookside property.

The union’s council, a special general meeting and its trustees all approved the deal, but not without resistance. On 30 June 2020, after the union’s executive committee tried to amend its resolution, Flyt’s attorney Anton Slabbert wrote to the union’s lawyers: “It can accept that deal or it can accept the sale by public auction of its property by Remgro. The choice it has is crisp and clear.”

On 21 August 2020, Dream World paid R52,970,961 to Investec and R57,761,501.66 to Remgro, a total of R110.73-million. The loan has often been reported as R112-million; that was the estimate in the term sheet, not the amount actually paid.

As security, the union’s trustees registered two mortgage bonds of R250-million each in Dream World’s favour. One covers Newlands Stadium and eight other Newlands properties. The other covers Mill House, Brookside and the union’s facility in Oranjezicht.

How it fell apart

The relationship soured within weeks. At the end of October 2020, the union dropped its attorneys, STBB. According to Dream World’s papers, STBB told Dream World and Flyt the matter was heading for litigation. On 17 November, Flyt wrote, asking for “an urgent update on the Union’s position”.

The union’s new attorneys, Korbers Inc, replied on 23 November that the loan agreement had never come into effect. Their argument turned on the paperwork.

Korbers also argued that the term sheet was against public policy. It would have made the union give up Newlands for about R112.9-million, when an independent valuation the union commissioned put the property at R377-million to R390-million.

Dream World’s attorneys replied on 10 December 2020.

Dream World treated the union’s letter as a repudiation of the deal. It cancelled both agreements and asked when the loan would be repaid.

Five years in court

Dream World first sued in March 2021 (case 4889/2021) and later brought the action now before the court (13242/21).

On 12 October 2021, SA Rugby placed the union under administration. The litigation stalled. Dream World told Daily Maverick in March 2025 that it had held back while the union was under administration.

The administrators’ priority was to sell Newlands and settle the debt, but there were several false starts and offers that never materialised. In July 2024, the union’s council approved a sale to an unnamed buyer.

In March 2025, Dream World called up its bonds. That same month the administrator, Peter Jooste, said the buyer had completed due diligence and a deal was close, and SA Rugby moved to end the administration.

Meanwhile, a 75% controlling share in the union’s professional arm, which runs the Stormers, was sold to the Red Disa consortium in 2023.  

The union holds the other 25%.

In 2026, Dream World appointed new attorneys, Hatstone, who amended its claim. The union filed its plea in August.

WPRFU’s case

The union’s plea, drafted by advocate SP Rosenberg SC, argues that the switch of lender matters. It says it was told in June 2020 that Dream World would replace Flyt as lender, but that “this would make no difference” to the terms.

It argued that the loan agreement and term sheet were “interrelated and indispensable components” of one arrangement, so neither could stand without the other.

The union says the loan agreement is void for vagueness. The repayment clauses refer to terms “contemplated in the Term Sheet” that the term sheet does not contain. The 30% development charge is payable to Dream World under one document and to Flyt under the other.

The attorneys claim the whole transaction is contrary to public policy. It cites that:

It says the development charge was payable whether any development happened or not, on top of interest and the raising fee, so the effective interest rate was more than prime plus 30%.

The union also denies that Dream World could waive a condition that protected both parties, or revive a lapsed contract on its own.

The plea says the union has “no knowledge of the amounts advanced by the plaintiff to Investec and to Remgro” and puts Dream World to the proof. That is a standard pleading device that forces the other side to prove a fact; it is not a claim that the payments were never made.

The union has asked for the claim to be dismissed with costs.

Dream World’s case

Dream World asked the court to correct the loan agreement so that the term sheet condition refers to Flyt and the union. It says the conditions were met or are deemed to have been waived.

It claims:

In the alternative, it claims R110.7-million for enrichment, with interest from August 2020. It also asked the court to declare the bonded properties especially executable, which would allow them to be sold to pay the debt.

Together these come to about R144.6-million, before interest since December 2020.

Interest, costs and damages push the final debt to beyond R250-million.

The lawyers respond

Menko Hoeksema of Hatstone said the firm was instructed in 2026 to “move the matter to a speedy resolution and finalisation”, and acknowledged that the case had been “dragging for a while”.

Asked whether the demand was meant to force a settlement or a sale of Newlands, he said: “A settlement can never be forced.”

Asked how a voluntary association could be wound up under the Companies Act, he said the union was “a juristic entity separate from its members, capable of holding property and of suing or being sued in its own name with perpetual succession and a body corporate as meant in section 337 of the 1973 Act and therefore subject to the provisions of Chapter 14 of the 1973 Act”.

Asked why Dream World was seeking liquidation instead of selling the bonded properties, he said: “Our client is not in control and owner of the properties and cannot sell or deal with the properties.”

A bondholder cannot sell mortgaged property without a court order, which is why Dream World’s action asks the court to declare the properties executable.

Asked about the claim that the deal took advantage of a union with nowhere else to turn, Hoeksema said he had acted for Dream World only since 2026. Asked whether Dream World would settle for the capital alone, he said: “If there is any settlement proposals I will have to take instructions from my client.”

Anton Schelhase of BDP Attorneys, for the WPRFU, was asked.

He replied: “We are instructed that the WPRFU does not conduct business in the press.”

The way forward

Hoeksema also added that should the debt not be satisfied by 12 November, a “formal liquidation application” will be issued and served.

“It means the estate and business dealings will be handed to a liquidator/trustee to manage.” DM