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[2021] ZAGPJHC 384
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EBM Project (Pty) Ltd and Another v Barak Fund SPC Ltd In re: The Holland Insurance Company Ltd v The Master of the High Court and Others (2021/18884) [2021] ZAGPJHC 384 (14 June 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
REPORTABLE:
No
OF
INTEREST TO OTHER JUDGES: No
REVISED.
14/06/2021
CASE
NO.: 2021/18884
In
the
ex parte
application of:
EBM
PROJECT (PROPRIETARY) LIMITED
(IN
BUSINESS RESCUE)
First Applicant
VENTER,
KENNETH COLIN N.O
Second Applicant
and
BARAK
FUND SPC LIMITED
First Intervening party/ Respondent
In
re:
THE
HOLLARD INSURANCE COMPANY LIMITED
Applicant/2
nd
Intervening Party
and
The
Master of the High
Court
First
Respondent
The
Companies and Intelectual Property Commission
Second
Respondent
All
Affected Parties listed in Annexure ‘X’
Further
Respondents
EBM
Project (Pty)
Limited
Respondent
(In
business rescue)
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email. The date and time
for
hand-down is deemed to be 10h00 on 14 June 2021
JUDGMENT
INGRID
OPPERMAN J
Introduction
[1]
There are two competing applications before this Court. The first
applicant
EBM Project (Pty) Ltd (‘
EBM
’), and its
business rescue practitioner, the second applicant, (‘
Mr
Venter
’) applied,
ex parte
, for an order, as
contemplated in section 141(2)(a)(ii) of the Companies Act, 2008
(‘
the New
Companies Act’
>) discontinuing the
business rescue of EBM and placing it in provisional liquidation
coupled with an order bestowing certain powers
on the provisional
liquidator, including the appointment of Mr Venter as the provisional
liquidator’s consultant (‘
the Venter Application’
).
[2]
Section 141 of the New
Companies Act is
prescriptive in its
terms, both in relation to the procedure which must be followed by a
business rescue practitioner and the party
or person that has
locus
standi
to invoke the provisions of
section 141.
So,
although, EBM is cited as an applicant, the only party, entitled to
seek the relief, is Mr Venter, in his capacity as EBM’s
business rescue practitioner. Accordingly, the true applicant in
these proceedings is Mr Venter.
[3]
The Hollard Insurance Company Limited (‘
Hollard
’)
applies for an order placing EBM in final liquidation (‘
the
Second Hollard Application
’).
[4]
Barak Fund SPC Ltd (‘
Barak
’) opposes the Venter
Application on the grounds that Mr Venter acted unlawfully in
approaching the Court
ex parte
in circumstances where he
failed to follow the mandatory requirements of both
section 141(2)(a)
and
section 145
, each of which, although somewhat differently
worded, have the same requirement of notice to affected persons in
relation to the
prospects of business rescue succeeding and/or any
other relevant event concerning business rescue proceedings and the
right of
creditors to participate in any court proceedings arising
during the business proceedings.
[5]
The basis for the application and the urgency was that the
appointment
of a provisional liquidator was required as a matter of
urgency and that EBM was required to be traded in liquidation. It was
for
this reason that Mr Venter required that a provisional liquidator
who was appointed in that capacity would have the extended powers
as
provided for in the notice of motion and permission for the
liquidator to trade and incur credit. The criticism to this is that
no legal basis for this relief to be granted exists.
[6]
Barak also takes issue with Mr Venter for failing to join parties
that
have a direct and substantial interest in the outcome of the
Venter Application. These included, at the very least, the parties
to
the earlier litigation before this Court. The failure to join
interested parties is raised by Barak as a separate and discreet
issue, apart from the failure to comply with the requirements of
section 141 and 145 of the New
Companies Act. In
short Barak
argues that Mr Venter knew of the existence of the current
proceedings before me in which judgment had been reserved
and that
the order sought by Mr Venter, if granted, would have rendered those
proceedings nugatory; that Mr Venter knew further
that the effect of
the order sought by him
ex parte
would also effectively put
paid to the course of action that had been proposed by Barak in the
event of business rescue proceedings
and the resolution passed being
set aside; that Mr Venter knew that the relief, if granted, would
effectively have resulted in
EBM continuing to trade, incurring
credit presumably at the instance of a provisional liquidator, who
would be granted powers which
did not fall within the scope or
competency of the Court and would incur liabilities which might or
might not be recoverable applying
ordinary principles of insolvency
law; that Mr Venter knew that part of the relief sought,
ex parte,
involved his appointment in a different guise as ‘consultant’
to the liquidator to be appointed; that Mr Venter knew,
that in the
circumstances, had he given notice of intention to apply for the
relief sought, it would have been opposed by Barak.
They further
argue that, not only have the assertions made by Barak in this regard
not been challenged, it accords with common
sense and the constant
tension between Barak and Mr Venter in relation to his competence,
integrity and efficiency; that the relief
sought would have been
final in effect; that Mr Venter had failed to make proper disclosure
with the degree of frankness and openness
that is required in
ex
parte
applications and that Mr Venter’s four affidavits are
substantially misleading.
[7]
Barak’s position at the hearing was that, in the event
that
the Venter Application is dismissed, the Second Hollard
Application save for paragraph 7 of its notice of motion is not
opposed.
Each of Barak and Hollard have reserved their rights in
relation to certain issues raised in the Second Hollard Application.
Those
issues will be dealt with in the course of the EBM liquidation
proceedings and I am not to concern myself with this.
Proceedings
pending
[8]
There are
two applications pending before this court (heard previously). The
first is the application under case no. 44548/20 brought
by Hollard
in terms of section 131 of the New
Companies Act for
an order placing
Insure Group Managers Ltd (‘
IGM
’)
under supervision and commencing business rescue proceedings.
[1]
Barak opposed the application. This application is referred to as
‘
the
First Hollard Application’
.
[2]
[9]
The second
application is brought under case no. 02092/21 by Barak in terms of
section 130 of the New
Companies Act to
set aside the business rescue
proceedings which commenced on 17 December 2020 when the board of EBM
resolved to place EBM under
supervision and in business rescue.
[3]
It is referred to as ‘
the
Barak Application’
.
[10]
The First Hollard Application and the Barak Application are linked in
that IGM and EBM
are companies in the same group with IGM
historically being EBM’s principal financier and EBM being
IGM’s principal
future source of revenue. Barak claims rights
against IGM that flow from rights it claims against EBM. The
companies’ financial
affairs are inextricably linked and it was
accepted that they had to be dealt with as a unit, this approach was
supported by all
concerned.
[11]
It was not disputed that both IGM and EBM were in financial distress.
The dispute was rather
whether there appeared to be reasonable
prospects of rescuing both the companies and, specifically with
reference to the First
Hollard Application, whether it would
otherwise be just and equitable to place IGM under supervision and to
commence business rescue
proceedings.
[12]
Barak brought a formal intervention application in the First Hollard
Application. Barak’s
entitlement to participate stood
undisputed. IGM did not oppose the intervention application and
joinder of Barak to the First
Hollard Application.
[13]
Lebonix (Pty) Ltd (‘
Lebonix
’) sought leave to
intervene in the Barak Application as an affected person in its
professed capacity as the 100% registered
shareholder and creditor on
loan account of EBM. This application for leave to intervene was
opposed by Barak.
[14]
The First Hollard Application and the Barak Application were
heard from 15 to 17
March 2021. Hollard (supported by Mr Venter in
his capacity as the business rescue practitioner) opposed the Barak
Application
and contended that there existed reasonable prospects to
rescue EBM (and thus also IGM). Judgment was reserved. At the hearing
I directed Mr Venter, in his capacity as the business rescue
practitioner of EBM, to prepare a report on the impact on the
employees
of EBM in the following scenarios: i) if the business
rescue proceedings were to continue; ii) if the business rescue
proceedings
were terminated; iii) if EBM were placed into
liquidation. On 29 March 2021, Mr Venter filed this report (‘
the
Venter Report
’). On 1 April 2021 Barak filed its response
to the Venter Report.
The
Venter Application – the current application
[15]
On 15 April 2021, this
ex parte
application was instituted by
EBM and Mr Venter in his capacity as the business rescue practitioner
in which they sought to convert
the business rescue proceedings of
EBM to provisional liquidation.
[16]
The Venter
Application was enrolled in the urgent court before Madam Justice
Kathree-Setiloane on 21 April 2021. Barak, fortuitously
[4]
,
became aware of Mr Venter’s Application and appeared at court
before Madam Justice Kathree-Setiloane on 21 and 22 April
2021 to
prevent an order as sought by Mr Venter being granted. The matter was
ultimately removed from the roll and the costs were
reserved.
[17]
On 23 April 2021, the applicants approached the Deputy Judge
President of this division
with a request that this application be
allocated a date for hearing as early as possible in May 2021.
[18]
On 28 April 2021 Barak through its attorneys and in a letter to the
Deputy Judge President,
responded to this in some detail, summarised
their defences and opposition to the relief but in the end supported
the request for
a case management judge to be appointed.
[19]
On 29 April 2021, the Deputy Judge President directed that I were to
case manage the Venter
Application.
[20]
I convened a case management meeting for 30 April 2021 and refrained
from reading the papers
in the Venter Application prior to such case
management meeting, other than the correspondence which had been sent
to me, as I
wanted to establish whether there was any prohibition to
me hearing the matter (the Venter Application having been brought
ex
parte
and before another Judge) and if not, whether I should have
regard to the Venter Application in adjudicating the two pending
applications
in which I had reserved judgment. Mr Fine SC,
representing Barak contended that I should not have regard to it
whereas, Mr Van
der Merwe, representing both EBM and Mr Venter in his
representative capacity, said I should. It was accordingly suggested
and
ultimately agreed that this issue be debated at the hearing on 7
and 8 June 2021 and that I would not deliver judgment in the pending
applications until this feature had been argued.
[21]
A further
case management meeting was convened at short notice for Friday, 28
May 2021 to deal with the filing of affidavits in
the Second Hollard
Application at which Mr Louw SC was present representing Hollard and
at which he expressed his surprise for
not having been included in
the case management meeting of 30 April 2021
[5]
.
He stated that Hollard had only learnt that the judgments had been
reserved to after the hearing of the Venter Application, when
the
minutes of the meeting of 30 April 2021 were received which had
occurred on 15 May 2021.
[22]
Hollard applied for leave to intervene and for substantive relief in
the Venter Application
on 19 May 2021.
Developments
post the Second Hollard Application
[23]
On 4 June 2021, Hollard filed a practice note recording that Barak no
longer opposed Hollard’s
intervention application in the Venter
Application nor the liquidation of EBM and that it had been agreed
that a final winding
up order would follow.
[24]
Mr Louw suggested in short heads of argument filed that, given that
all the parties are
agreed that EBM should be liquidated, the Hollard
liquidation be determined at the outset, that EBM be placed under
final liquidation,
whereafter Barak and Mr Venter could prosecute
their disputes, which relate only to costs, without Hollard being a
party to such
debates.
[25]
Barak opposed this approach arguing that it was fundamentally flawed
as a matter of procedure
and substantive law. Barak contended that
the Venter Application was first to be disposed of and, should it
fail, that Hollard
would be entitled to a final liquidation order. Mr
van der Merwe argued that Hollard did not have
locus standi
to
approach the Court for a liquidation order on the basis of section
141 of the New
Companies Act, it
was only the business rescue
practitioner who had approached the court for an order for
liquidation and if such application were
dismissed, that would be the
end of the matter as there would be no application left in which to
intervene.
Correct
approach to applications serving before this court
[26]
The facts giving rise to the Venter Application are: On 15 April 2021
Mr Venter
launched an application in terms of section 141 of the
New
Companies Act. Mr
Venter's
locus standi
derives from
section 141 of the New
Companies Act and
, in order to succeed in
the application, Mr Venter had to comply with the requirements of
sections 141 and 145 of the New
Companies Act and
those
provisions dealing with business rescue. On 17 May 2021
Barak delivered its answering affidavit. Hollard considered
that
Venter's Application was unlikely to succeed. Accordingly, Hollard
launched a substantive application of its own on 19 May
2021 (the
Second Hollard Application).
[27]
The basis for the Second Hollard Application is a totally different
statutory regime, unrelated
to the requirements relating to the
Venter Application.
[28]
Hollard seeks the Court's consent to institute these proceedings and
then leave of the
Court to intervene, one assumes, as an applicant in
Venter's Application, on the basis that it is a creditor of EBM and
accordingly
relies on section 346(1)(b) of the Companies Act,
1973 (‘
the Old Companies Act’
) as its ground for
locus standi
for relief as contemplated in section 344
read with section 345 of the Old Companies Act. Hollard has
addressed the formalities
of the Old Companies Act. Hollard does not
join Mr Venter as a co applicant.
[29]
The Second Hollard Application is a stand alone
application dependent upon the
outcome of the Venter Application. If
the Venter Application succeeds, the Second Hollard Application falls
away. Only if the Venter
Application fails, can Hollard move for the
relief sought in its application.
[30]
The essence of the proposition advanced by Hollard is that, even in
the absence of Venter's
Application being withdrawn or dismissed, it
is proper for its application to be moved by consent. This is
incorrect. The Second
Hollard Application is a self standing
application brought on the basis that it is to be moved in the event
of Venter's Application
not succeeding. Each of the Venter
Application and the Second Hollard Application are premised on
different statutory provisions
and there is accordingly a different
lis
.
[31]
Venter's Application is based on the provisions of section 141
of the New Companies
Act and creates a
lis
between Mr Venter
and Barak.
[32]
The Second Hollard Application is based on the provisions of
sections 344, 345 and
346 of the Old Companies Act. Hollard does
not bring its application to support the
lis
created by the
Venter Application, nor does it "intervene" as an applicant
in the Venter Application.
[33]
The departure point is that this Court is confronted with two
competing applications, brought
under different statutory regimes and
each crystalising creditor's rights at a different date. The
underlying rationale for each
application differs materially.
[34]
Ex facie
Mr Venter's Application, EBM is cited as the first
applicant while Mr Venter,
nomine officio
, is cited as the
second applicant. Barak has intervened as a respondent.
[35]
There is no application before this Court where EBM is cited as a
respondent thus affording
Hollard the opportunity to "step in"
as the liquidating creditor. This necessarily means that the prayer
for "intervention"
must fail.
[36]
Hollard is
in the same position as ABSA in
FirstRand
Bank
.
[6]
ABSA sought leave to intervene on the basis that FirstRand’s
claim for liquidation was bad.
[7]
It turns out that FirstRand’s claim was good. It matters not as
it remains authority for the principle at issue here. Until
the Court
has dismissed the Venter Application, the Second Hollard Application
does not arise. Put differently, if the Venter Application
is
granted, the Second Hollard Application is moot. Hollard approaches
this Court on the basis that, if Mr Venter's case
qua
business rescue practitioner is bad, then it brings its own case
qua
creditor. Hollard's case cannot be determined, therefore, until the
Venter Application is dismissed. In that event, the Second
Hollard
Application is moot or academic.
[37]
Barak's position was therefore that the Venter Application must first
be disposed of and,
should it fail, that Hollard would be entitled to
an order in terms of paragraph 5 of its notice of motion.
[38]
Mr Louw, during argument, conceded that Barak’s exposition of
the legal principles
as set out herein in relation to this issue is
correct.
[39]
For the reasons advanced herein, I disagree with Mr van der Merwe’s
construction
of the law to the facts of this case being that if the
Venter Application is dismissed, there is nothing before the court.
Hollard
will be granted leave to seek relief as envisaged in terms of
section 133(1)(b) of the New Companies Act being the winding up of
EBM as a creditor of EBM.
[40]
I accordingly turn to the Venter Application.
The
Venter Application
Notice
to and joinder of, affected persons
[41]
Upon appointment of a business rescue practitioner, Section 141 of
the New Companies Act
requires that the newly appointed business
rescue practitioner to take certain steps. These are:
‘
(1)
As soon as practicable after being appointed, a practitioner must
investigate the company’s
affairs, business, property, and
financial situation, and after having done so, consider whether there
is any reasonable prospect
of the company being rescued.
(2)
If, at any time during business rescue proceedings, the practitioner
concludes that-
(a)
there is no reasonable prospect for the company to be rescued, the
practitioner
must-
(i)
so inform the court, the company, and all affected persons in the
prescribed
manner; and
(ii)
apply to the court for an order discontinuing the business rescue
proceedings and
placing the company into liquidation;
(b)
there no longer are reasonable grounds to believe that the company is
financially distressed,
the practitioner must so inform the court,
the company, and all affected persons in the prescribed manner, and-
(i)
if the business rescue process was confirmed by a court order in
terms of section 130, or
initiated by an application to the court in
terms of section 131, apply to a court for an order terminating the
business rescue
proceedings; or
(ii)
otherwise, file a notice of termination of the business rescue
proceedings; or
(c)
there is evidence, in the dealings of the company before the business
rescue proceedings
began, of-
(i)
voidable transactions, or the failure by the company or any director
to perform any material
obligation relating to the company, the
practitioner must take any necessary steps to rectify the matter and
may direct the management
to take appropriate steps.
(ii)
reckless trading, fraud or other contravention of any law relating to
the company, the practitioner
must-
(aa)
forward the evidence to the appropriate authority for further
investigation and possible prosecution;
and
(bb)
direct the management to take any necessary steps to rectify the
matter, including recovering any misappropriated
assets of the
company.
(3)
A court to which an application has been made in terms of subsection
(2)(a)(ii) may make the order
applied for, or any other order that
the court considers appropriate in the circumstances.’
[42]
The section obliges a business rescue practitioner to investigate the
affairs of the company
in business rescue, consider whether the
company is financially distressed and, if so, whether it can be
rescued.
[43]
Relevant to the Venter Application is what happens when a business
rescue practitioner
decides that a financially distressed company
cannot be rescued. Subsection 2(a) is prescriptive. It requires a
business rescue
practitioner to take certain steps. Section 145
is equally prescriptive in its terms. Both sections require notice of
each
court proceeding or relevant event concerning business rescue
proceedings to affected persons. Barak is admittedly an affected
person.
[44]
Notice and informing the Court and affected persons is a
jurisdictional fact which must
be satisfied in order to invoke
section 141 and its provisions. First, it is to give notice to
various parties. As an officer
of the Court, the business rescue
practitioner is required to give notice to the Court, the financially
distressed company and
affected persons (as defined in section
128(1)(a) of the New Companies Act). Second, and having given notice
to the identified
parties, to apply to court for an order
discontinuing the business rescue and placing the financially
distressed company in liquidation.
[45]
The issue of notice is a distinct and separate issue but is to some
extent interrelated
to the question of the joinder of parties who
have a real and substantial interest in the outcome of the
proceedings. It follows
that if a party is entitled to notice, it has
a real and substantial interest in the outcome of the proceedings
under consideration
and in respect of which notice should be
furnished.
[46]
This raises the question whether a business rescue practitioner may
elect not to give notice
to the parties identified in sections 141
and 145 of the New Companies Act and whether a business rescue
practitioner may approach
a court
ex parte
for this relief.
[47]
Section 145(1) provides:
‘
(1)
Each creditor is entitled to-
(a)
notice of each court proceeding, decision, meeting or other relevant
event concerning the
business rescue proceedings;
(b)
participate in any court proceedings arising during the business
rescue proceedings;
(c)
formally participate in a company's business rescue proceedings to
the extent provided
for in this Chapter; and
(d)
informally participate in those proceedings by making proposals for a
business rescue plan to
the practitioner.’
[48]
A creditor is an affected person. The New Companies Act therefore
affords the right to
participate in “
any court proceedings
arising during the business rescue proceedings
”. This
necessarily includes any application for the conversion of business
rescue proceedings. Accordingly, any conduct that
has the effect of
preventing participation of affected persons in any litigation is
contrary to the legislative arrangement and
unlawful. This is because
such conduct defeats express statutory rights afforded to,
inter
alia,
affected persons.
[49]
The effect of this conclusion is that it is impermissible for a
business rescue practitioner
to approach a court
ex parte
and
without having followed the prescripts of sections 141 and 145;
to take it upon himself to deprive affected persons/creditors
to not
give them the notice that the New Companies Act requires; to approach
a Court
ex parte
and without joining parties who have a real
and substantial interest in the outcome of those proceedings.
[50]
This
interpretation is supported by various decisions emanating from the
Supreme Court of Appeal
[8]
and
this Division. The notice requirement was expressly considered by the
Supreme Court of Appeal in
Timasani
.
[9]
Timasani
is definitive of the business rescue practitioner’s obligation
to give notice as envisaged in section 141 of the New Companies
Act.
Schippers JA said, after quoting section 145, that:
“
[17]
Two points are required to be made. First, s 145(1) sets out in some
detail the rights and obligations of
creditors when participating in
business rescue proceedings as a whole, in addition to the rights
conferred on creditors as ‘affected
persons’ by specific
provisions of Chapter 6 of the Act. Subsection 1
(a)
is a
general notification requirement to creditors of court proceedings,
decisions and meetings concerning the business rescue
.
It has
nothing to do with the joinder of creditors in legal proceedings
involving a company in business rescue.
Having regard to the
language, context and purpose of s 145, this is underscored by
ss 145(2) and 145(3
). Subsection (2) provides that in
addition to the rights in subsection (1), each creditor has the right
to vote to amend, approve
or reject a proposed business rescue plan
and if that plan is rejected, to propose an alternative plan or make
an offer for the
interests of other creditors. In terms of subsection
(3), creditors are entitled to form a committee to be consulted by a
business
rescue practitioner in the development of a business plan.
[18]
Second, and consistent with the text, context and purpose of s 145,
subsection (1)
(b)
confers on creditors a statutory right to
participate in any legal proceedings that arise during the business
rescue proceedings
of a company. In this respect s 145(1)
(b)
stands on an equal footing with s 131(3) of the Act, in terms of
which each affected person has a right to participate in an
application
to place a company in business rescue. In both cases the
leave of the court to intervene in the proceedings is not required,
but
the court may need to regulate the procedure to be followed if
the affected person or creditor wishes to file affidavits.
[19]
Inasmuch as a company in business rescue must be cited in legal
proceedings against it,
the duty to give notice to creditors in
terms of s 145(1)
(a)
rests on the business
rescue practitioner. Being a general notification requirement, the
purpose of s 145(1)
(a)
is to inform creditors of
court proceedings brought during business rescue:
it does not
require the joinder of every creditor in such proceedings. This is
hardly surprising as the business rescue practitioner
has full
management control of the company during business rescue proceedings;
is obliged under the Act to keep creditors abreast
of developments in
the business rescue, and knows who the creditors are and which of
them may wish to participate in the relevant
legal proceedings. Two
cases were cited in support of the submission that s 145(1)
(a)
required the joinder of all creditors in any legal proceedings
involving the company in business rescue. However, both these cases
involved the fate of the business rescue plan and contentions that
directly affected the financial interests of creditors. They
were not
authority for the submission advanced.” (Emphasis added)
[51]
In
Engen
Petroleum
[10]
Boruchowitz J dealt with the notification requirements in section
131(2) of the New Companies Act. The court found that the use
by the
applicants of the short form notice of motion constituted an
irregularity
[11]
[52]
Section 141(2)(a)(ii) uses the exact same wording, being to ‘
apply
to court,
’ as the wording used and analysed in section
131(2) in the
Engen
matter. Mr Fine argued that the reasoning
of Boruchowitz J has equal application to section 141(2)(a)(ii).
[53]
In my view,
the notice requirements of both sections 141 and 145 are quite clear.
All affected persons are entitled to notice
[12]
and the requirement of giving notice rests with the business rescue
practitioner. It is a jurisdictional pre-requisite. On this
ground
alone, the application must fail.
Mr
Venter not entitled to relief and court not entitled to grant
[54]
The relief
sought by Mr Venter, which is fundamental to the outcome and success
of his application do not fall within the power
and competence of
this Court
[13]
. The powers of
a liquidator are carefully and clearly prescribed in terms of
sections 386 and 387 of the Old Companies Act.
So too the manner
and method in which these powers are conferred upon a liquidator.
There is a carefully structured regime which
must be followed and it
is only after the steps prescribed in the Old Companies Act have been
exhausted, that there is recourse
to the courts.
[55]
Mr Venter asked for the business rescue proceedings of EBM that
commenced on 17 December
2020 to be converted to a provisional
liquidation with the return date being determined by the Court, at
which date all persons
and/or parties interested could show cause why
EBM should not be placed under final liquidation. He also requested
that the powers
of the liquidators be extended and that the
provisional liquidators be granted the power to trade and to appoint
him as a consultant.
[56]
This relief was not competent. This is so because until a
concursus
is created, the assets of the company vest in the
company under the control of the directors and the court has no power
to override
contractual bargains between the parties.
[57]
Only once
liquidation has ensued does the regime in the Old Companies Act and
the Insolvency Act come into play. The strict application
of the Old
Companies Act in relation to the powers of liquidators and the
competence and ability of the court to intervene and
grant powers
outside the scope of the act is endorsed in
Gainsford
.
[14]
[58]
EBM is a company in business rescue. It is a financially distressed
company as contemplated
in section 128(1)(f) of the New Companies
Act. Once a company enters business rescue, either by the passing of
a resolution in
terms of section 129, or by order of Court in terms
of section 131, a business rescue practitioner is appointed to the
financially
distressed company. Upon appointment, the business rescue
practitioner has the powers and duties set out in section 140 of the
New Companies Act. This means, therefore, that the New Companies Act
is the source of a business rescue practitioner's powers when
appointed to supervise a financially distressed company. Put
differently, if the New Companies Act does not afford a particular
power to a business rescue practitioner, the business rescue
practitioner does not, as a matter of law, have such a power.
[59]
Nothing in Chapter 6 of the New Companies Act imports the powers
of a liquidator winding up
a company under Chapter 14 of
the Old Companies Act on a business rescue practitioner with the
result that the business rescue
practitioner is not in a position to
apply for extended powers under the Old Companies Act.
[60]
Conversely, the powers of a liquidator are prescribed and
circumscribed in the Old Companies
Act.
[61]
Mr Venter presented an application that, but for Barak's fortuitous
intervention, may have
resulted in the Court being induced to grant
an order that was not only entirely incompetent but was most
certainly not provisional
in nature. Mr Venter failed to appreciate
that immediately upon EBM being placed in provisional liquidation the
business rescue
process would come to an end. This means, naturally,
that on any hypothetical return date the question before the Court
would not
be one which concerned whether EBM should remain in
business rescue but rather whether a final liquidation order should
be made.
The relief was final in effect the business rescue
proceedings would no longer continue, the regime of liquidation would
immediately
take effect creating an impossible and untenable
situation.
[62]
It is not open to a person such as a business rescue practitioner in
advance and in anticipation
of the appointment of an unnamed
unspecified provisional liquidator applying for an extension of those
powers, particularly in
circumstances where the views and opinions of
creditors are unknown and in particular where it is not known in the
first instance
whether or not the Master has decided to limit the
powers granted to a provisional liquidator.
[63]
The application falls to be dismissed on this basis too.
Duty
of disclosure in ex parte proceedings
[64]
The reason for moving the application
ex parte
was formulated
as follows by Mr Venter:
3.
In line with the nature of business rescue proceedings and the
transparency with which these proceedings are conducted all creditors
are aware of the pending application to set aside the business
rescue
proceedings dealt with hereinbelow and all affected parties will have
the right to participate in these proceedings having
regard to the
relief being provisional with a return date to allow for proper
notice to affected parties.
4.
I therefore confirm that it will serve no purpose to incur costs
pertaining to formal service on creditors and that the granting of an
ex parte order with a return date on which all affected parties
can
give reason why the order should not be made final, represents the
proper manner with which to continue.
[65]
Although section 130(5) of the New Companies Act provides that a
court when considering
the setting aside of a business rescue
resolution may place the company under liquidation, the case argued
on behalf of EBM and
Hollard in the Barak Application was novel and
unprecedented as nobody, including Hollard, Barak, EBM and Mr Venter
had requested
the liquidation of EBM as an alternative to business
rescue. It was either that the resolution was to be set aside or that
the
business rescue was to be continued. All made it perfectly clear
that liquidation was not on the table. An order liquidating EBM
under
such circumstances (where nobody had applied for this relief) would
thus have been unprecedented and would have required
some judicial
creativity.
[66]
The Venter Report was requested for particular reasons and directed
at particular arguments
advanced by Lebonix being that EBM remaining
in business rescue would have a better result for EBM’s
employees than it going
into liquidation or being take out of
business rescue but was also requested to deal with the argument of
Mr Louw, representing
EBM at the time (now being Mr van der Merwe),
that a court must weigh up the interests of 3 sets of rights being
the employee,
shareholder and creditor’s rights before it can
determine that it is just and equitable to place the company in
business
rescue (or take it out). Paragraph 64 of Mr Louw’s
heads of argument (representing both Hollard and EBM at that stage)
submitted:
‘
We consequently submit that as neither party has
sought the liquidation of IGM, the court should not entertain
liquidation at least
without further evidence and argument.’
[67]
In Mr Venter’s founding affidavit he stated that during the
preparation of his report
he came to a realisation that ‘
the
Barak Application, will in all probability not bring finalisation to
the matter. I am therefor duty bound to proceed with this
application
in the best interests of all affected parties
.’ But then Mr
Venter approached another court (not the court seized with the Barak
Application) and he did not notify the
affected persons or the court
as undertaken in his report. This is a most extraordinary state of
affairs. Mr Venter did not apply
to the court seized with the matter,
but launched an independent, fresh application and notified no-one.
This despite saying in
his report that ‘
I do not
yet
give such notice
or proceed to seek the liquidation of
EBM
…
’ as he would await the outcome of
the Barak Application. But when he then does so, two weeks later, he
does not give anyone
notice, not even the court charged with deciding
the Barak Application.
[68]
In
Powell
NO and Others v Van der Merwe NO and Others
[15]
,
Southwood AJA held the following:
“…
These
factors also illustrate the necessity for the rules relating to
proper disclosure of material facts in
ex parte
applications
to be strictly and rigorously applied.
[73] In
National
Director of Public Prosecutions v Basson
2001 (2) SACR 712
(SCA)
(2002 (1) SA 419)
in para [21] this Court expressly approved of the
rules as they are set out in
Schlesinger v Schlesinger
1979
(4) SA 342
(W) at 348E-349B, concluding with the following three
propositions.
‘
(1)
In
ex parte
applications all material facts must be disclosed
which might influence a court in coming to a decision;
(2)
The non-disclosure or suppression of facts need not be wilful or
mala
fide
to incur the penalty of rescission;
(3)
The Court, apprised of the true facts, has a discretion to set aside
the former order
or to preserve it.’
[74] In
Schlesinger
Le Roux J also considered when a court will exercise its
discretion in favour of a party who has been remiss in its duty to
disclose rather to set aside the order obtained by it on incomplete
facts. He concluded (at 350B-C):
‘
It appears to me
that unless there are very cogent practical reasons why an order
should not be rescinded, the court will always
frown on an order
obtained
ex parte
on incomplete information and will set it
aside even if relief could be obtained in a subsequent application by
the same applicant.’
[75]
In my view, this
approach should apply equally to relief obtained on facts which are
incorrect because they have been misstated
or inaccurately set out in
the application for the order (
cf Hall and Another v
Heyns and Others
1991 (1) SA 381
see at
397B-C) or, as
in this case, because they have been insufficiently investigated. And
it should be rigorously applied where a right
in the Bill of Rights
has been violated. That is the only way the courts can ensure that
the right to privacy is vindicated after
the event.” (emphasis
provided)
[69]
More
recently, the principle of disclosure in
ex
parte
proceedings was re-affirmed in
Recycling
and Economic Development Initiative of South Africa NPC
[16]
.
[70]
Mr Fine pointed to a host of facts which had not been disclosed in
the founding affidavit
and which are material and might have
influenced a court deciding the application. These include: Mr Venter
did not explain why
he only annexed and referred to his report when
he knew, that Barak had responded to that report, why he referred
only to Mr West's
affidavit in the knowledge that there were material
facts which had been placed in issue by Barak both in its founding
and replying
affidavit and why, to circumvent the requirement of full
disclosure he referred to the affidavits being made available to the
Court,
in the event the Court so required it. It was only in the
Second Hollard Application that Barak came to learn of the fact that
Hollard had, allegedly, provided funds to EBM, in the form of
post commencement finance, which although in dispute, need not
be resolved in these proceedings. None of these facts were disclosed
by Mr Venter in his founding or supplementary affidavits in
the
Venter Application.
[71]
Mr Venter was obliged to disclose these facts and provide an
explanation why, suddenly,
this funding had dried up. It was
necessary for him to do so given the thesis upon which the approach
to the Court was made: that
being the inevitable environmental
disaster that would shortly befall EBM.
[72]
Mr Venter also did not explain clearly in his founding affidavit that
it was not only Barak
that did not seek the liquidation of EBM in the
event of the resolution being set aside, but that all other
stakeholders too who
participated in the hearing before me. As
explained earlier, it was suggested that I could do so of my own
accord even though there
was no application for the liquidation of
EBM which served before me. (Mr Fine argued that such an order of
liquidation under such
circumstances would not be competent.) The
point though is this: a request for the liquidation of EBM had been
made. This ought
to have featured in the founding affidavit as the
relief sought was to an extent, pending.
[73]
Court orders should only be granted behind a litigant’s back in
exceptional circumstances.
In
South African Airways SOC v BDFM
Publishers (Pty) Ltd and others
,
2016 (2) SA 561
(GJ) at para
[22] Sutherland J summarised this principle as follows:
“
The principle of
audi alteram partem
is sacrosanct in the South Africa legal
system. Although, like all other constitutional values, it is not
absolute, and must be
flexible enough to prevent inadvertent harm,
the only times that a Court shall consider a matter behind a
litigant's back are in exceptional circumstances
. The phrase
"exceptional circumstances' has regrettably through overuse, and
the habits of hyperbole, lost much of its impact.
To do that phrase
justice,
it must mean very rarely, only if a countervailing
interest is so compelling
that a compromise is sensible, and then
a compromise that is parsimonious in the deviation allowed. The law
on the procedure is
well established.”
[74]
More fundamentally, section 34 of the Constitution guarantees a right
to a fair hearing,
which right has been formulated as follows by
Yacoob J in the unanimous judgment of
De Beer NO v North- Central
Local Council Etc
,
[2001] ZACC 9
;
2002 (1) SA 429
(CC) at para
[11]
:
‘
This
section
34
fair hearing right affirms
the rule of law, which is a founding value of our Constitution. The
right to a fair hearing before
a court lies at the heart of the rule
of law. A fair hearing before a court as a prerequisite to an order
being made against anyone
is fundamental to a just and credible legal
order. Courts in our country are obliged to ensure that the
proceedings before them
are always fair. Since procedures that would
render the hearing unfair are inconsistent with the Constitution
courts must interpret
legislation and Rules of Court, where it is
reasonably possible to do so, in a way that would render the
proceedings fair. It is
a crucial aspect of the rule of law that
court orders should not be made without affording the other side a
reasonable opportunity
to state their case. That reasonable
opportunity van usually only be given by ensuring that reasonable
steps are taken to bring
the hearing to the attention of the person
affected’.
[75]
One would have expected Mr Venter to bring the Venter Application to
me and with notice
to all affected persons.
It
is inconceivable for Mr Venter to have formed the view ‘
that
it will serve no purpose to incur costs pertaining to formal service
on creditors’
.
Asked during argument why I had not been approached, no explanation
was proffered.
[76]
The true reason for proceeding
ex
parte
is revealed in
paragraph 14 of the supplementary short heads of argument filed on
behalf of Mr Venter on 7 June 2021 on the eve
of the hearing. It
records:
‘
The
full extent of Barak’s opposition to the conversion application
represents their attack on the BRP. This approach has
prolonged the
finalisation of the application and the granting of a liquidation
order extensively, all at the cost of EBM and its
affected parties.
This was one of the reasons why the BRP proceeded with the conversion
application on an ex parte basis. It is
submitted that the BRP’s
fears in this regard proved to be well-founded.’
[77]
The final
liquidation order would, of course, be operative from the date of
presentation of the application to the Court ie when
it was lodged
with the Registrar of the Court – this is so by operation of
law
[17]
. The anticipation of
opposition and the delay in getting the papers ripe for hearing can
therefore not be a consideration in proceeding
with the liquidation
application
ex
parte
.
Costs
[78]
Mr Venter's application was ill conceived. His conduct in so
doing was unlawful and
at odds with the fiduciary position that he
held. His conduct would warrant attorney/client costs. The question
is whether costs
de bonis propriis
is warranted as sought by
Barak?
[79]
The Supreme
Court of Appeal has stated that a ‘
business
rescue practitioner is to be held to a high professional and ethical
standard.
’
[18]
[80]
In
CSARS
v Louis Pasteur Investments (Pty) Ltd
[19]
,
Mudau J summarised the principles in relation to costs
de
bonis propriis
succinctly as follows:
‘
[50]
It is trite that costs
de bonis propriis
should only be awarded in exceptional circumstances. This kind of
cost order is granted against individuals in their personal
capacities where their conduct showed a gross disregard for their
professional responsibilities, and where they acted inappropriately
and in an egregious manner. The assessment of the gravity of the
conduct is objective and lies within the discretion of the court.
[51]
This court is called upon to mulct Mr Naude with a punitive costs
order
de bonis propiis
given his conduct as the BRP. As an
officer of the court, it is an inflexible requirement that a business
rescue practitioner execute
his or her duties in good faith, bearing
in mind that the benefit of earning fees should never outweigh the
duty to act in good
faith. Good faith implies that the business
rescue practitioner is obligated to execute his/her duties with the
utmost trust, confidence
and loyalty to the benefit of all
stakeholders in the business rescue process. By virtue of their role,
business rescue practitioners
are therefore held to a higher
professional and ethical standard.’
[81]
There exist no exceptional circumstances that would have entitled Mr
Venter not to give
notice to the affected persons. His failure to
have done so constitutes a total infringement of the affected
persons’ rights
to a fair hearing. Mr Venter knew that Barak
was critical of his conduct. Barak criticized him for, amongst other
reasons, not
being independent. This is why he did not give anyone
notice.
[82]
In
Ex
Parte Klopper
[20]
the
Court said:
“
The general rule
in these cases seems to be that a person in a fiduciary position such
as a provisional liquidator should not be
ordered to pay the
costs of unsuccessful litigation
de bonis propriis
unless
it appears that there was a want of
bona fides
on
his part, or that he acted negligently or unreasonably
; et.
In
re Estate Potgieter
,
1908 T.S. 982
;
Grobbelaar v
Grobbelaar
,
1959 (4) SA 719
(AD)” (Emphasis added)
[83]
At best for Mr Venter, his conduct was negligent
at worst
mala fide
.
It is well documented that Mr Venter refused to conduct himself in a
reasonable and appropriate manner. Correspondence has not
been
answered and reasonable requests for information have been refused.
[84]
Barak’s professed purpose was to exercise its contractual
rights under its securities
being the rights to step into the shoes
of Lebonix as EBM’s sole shareholder, replace the board of EBM,
recapitalise it and
lead it out of the financial difficulties it
currently faces. Barak made it clear that it did not seek the
liquidation of EBM.
[85]
Mr
Venter suggested that his hands were tied by
Barak exercising its contractual rights in circumstances where
information pertinent
to any decision on a bail out was deliberately
withheld from it.
[86]
Mr
Venter does not accept that Barak was exercising its rights. As
explained by the Supreme Court of Appeal in
Oakdene
,
[21]
‘
[38]
As I see it, the applicant for business rescue is bound to
establish reasonable grounds for the prospect of rescuing the
company.
If the majority creditors declare that they will oppose
any business rescue scheme based on those grounds, I see no reason
why that
proclaimed opposition should be ignored.
Unless, of
course, that attitude can be said to be unreasonable or mala fide. By
virtue of s 132(2)
(c)
(i) read with s 152 of the Act, rejection
of the proposed rescue plan by the majority of creditors will
normally sound the
death knell of the proceedings. It is true that
such rejection can be revisited by the court in terms of s 153. But
that, of course,
will take time and attract further costs.
Moreover,
the court is unlikely to interfere with the creditors' decision
unless their attitude was unreasonable
.
In these circumstances
I do not believe that the court a quo can be criticised for having
regard to the declared intent of
the major creditors to oppose any
business rescue plan along the lines suggested by the appellants
.’
(Emphasis added)
[87]
Mr Venter approached the Court on the basis that EBM's assets were
under grave threat;
the Eskom power supply had been cut off on
account of non payment of its account and it was only by virtue
of a relationship
between EBM and the security company providing
services to EBM that any security services were on going at
EBM's property.
Mr Venter blamed this entirely on Barak. Mr Venter
suggested that Barak had set about to sabotage the prospects of any
rescue in
EBM. Specific reliance was placed on the NanOreTech project
that would have brought substantial income into the business.
[88]
However, in the Venter Report he explained that
any income that EBM may earn from the NanOreTech project has been
ceded,
in securitatem debiti
,
to Barak. He conceded that EBM has no contractual right to receive or
use these funds. Further, and absent those funds, salaries
could not
be paid at the end of March 2021. It is also apparent from the Venter
Report that the NanOreTech project cannot get off
the ground because
of unresolved regulatory issues. Barak was at pains to point this out
to this Court in its response to the Venter
Report. Mr Venter did not
disclose Barak's response to his report in his founding papers.
[89]
A further indictment of Mr Venter is his conduct
in relation to
Lebonix where he solicited the aid of Mr
Bezuidenhout, a director of Lebonix to a resolution dated
16 April 2021, in circumstances
where both knew that
Lebonix's claim had been ceded to Barak and subordinated. This
resolution was passed on the same date upon
which Barak gave notice
of its intention to exercise its rights under the pledge to it. There
has been no attempt made by Mr Venter
to deal with this serious
allegation.
[90]
The circumstances relating to the passing of the
resolution and the calling in aid of
Lebonix, resonates bad
faith. This is the same date upon which the correspondence referred
to below was generated.
[91]
In the knowledge of what transpired on
16 April 2021 (and being the date after the launch of his
ex parte
application) Mr Venter wrote to Eskom. He said:
‘
As
you may recall, a key part of the rescue plan for EBM to cover its
operating costs in the short term, while the broader plan
is being
implemented, the management have achieved this by letting the plant
to Nanoretech /Glencore for a period of 10 months
.
In order for EBM to begin
processing the Glencore product the addition of the Ion Exchange
plant and regulatory approval from the
National Nuclear Regulator
(NNR) was required.
The plant build is now
complete (at a cost R30 m to Glencore).
NNR approval is
expected today or early next week, after which processing will
commence and cash flow is expected by 30 April 2021.
The outstanding amount
for April 2021 of R1 565 423 80 will accordingly
be paid 30 April 2021.
We are aware that this is
putting strain on your own cash flow, but appreciate your
understanding and support through this difficult
time.’
(Emphasis added)
[92]
There also appeared to be a complete shift in the basis for business
rescue. The basis
for business rescue as supported by Mr Venter was
that EBM could be restored to solvency and that it needed three to
six months
to become operational so as to be in a position to secure
a sale of the asset which would be valueless if it was not
operational.
That was the view persisted in by EBM and Mr Venter
throughout the business rescue proceedings.
[93]
It was not simply a case that EBM required funding for its
operational expenses and that
absent those funds, business rescue
could not succeed. It appears to be incorrect to suggest that
business rescue proceedings cannot
continue on the simple basis that
there are no further funds to finance the day to day
operations of EBM. The tension
between these two positions required
explanation.
[94]
Mr
Venter is an officer of this Court and
represented by attorneys and counsel. There is simply no reasonable
explanation for conduct
of this sort.
This is a case where a
de bonis propriis
costs order is appropriate.
[95]
There is no reason why EBM and its creditors, which include Barak as
a substantial creditor,
should be saddled with the consequences of Mr
Venter's ineptitude and the costs of the Venter Application. As has
already been
pointed out, the true litigant in the Venter Application
is Mr Venter by reason of the provisions of section 141 of the
New
Companies Act, upon which he relies for the relief sought.
[96]
I have a discretion in regard to costs which I exercise in favour of
EBM and its creditors.
Having regard to all the facts and
circumstances of this matter I am driven to conclude that it is only
appropriate in the circumstances
that Mr Venter be directed to pay
the costs of the Venter Application
de bonis propriis
, on the
scale as between attorney and client and to include the costs
consequent on the employment of two counsel where so employed.
[97]
I haven’t disregarded the fact that after Hollard intervened,
Barak conceded to the
relief sought by Mr Venter in final form. This
position was clear after Barak had filed its answering affidavit in
the Second Hollard
Application. Mr Venter ought to have thrown in the
towel at that stage. Instead, he continued to justify the Venter
Application.
To his credit he did not persist with the provisional
relief or the extended powers of the liquidator and acquiesced to the
final
winding up of EBM. This belated shift did not, unfortunately,
obviate the need for the argument on 8 June 2021.
The
Second Hollard Application
[98]
There exists no dispute that the Second Hollard Application entitles
it to a final winding
up order of EBM. All formality requirements
have been met, including the setting of security and notice to other
creditors. All
representatives present at the hearing on 8 June 2021
confirmed that there was no impediment against the granting of the
final
winding up order based on the Second Hollard Application. I am
satisfied that such an order is competent.
Order
[99]
I accordingly grant the following order:
1.
Barak Fund SPC Limited (‘
Barak
’) is granted leave
to intervene as a respondent in the application under case number
21/18884 where EBM Project (Pty) Ltd
(in business rescue)(‘
EBM
’)
and Mr Venter seek the winding up of EBM in terms of section 141 of
the Companies Act, 71 of 2008 (‘
the Venter Application’
);
2.
The Venter Application is dismissed with costs, as between attorney
and client, including the costs consequent upon the employment of two
counsel,
de boniis propriis
as against the second applicant,
Mr Venter, including the costs reserved on 22 April 2021.
3.
The Hollard Insurance Company Limited (‘
Hollard
’)
is authorised to institute proceedings under case number 21/18884 as
an applicant (
qua
creditor) to seek relief against EBM in
accordance with the provisions of
section 133(1)(b)
of the
Companies
Act, 71 of 2008
.
4.
It is declared that the business rescue proceedings commenced
by EBM
on or about 17 December 2020 has come to an end.
5.
EBM is finally wound up in the hands of the Master of the High
Court.
6.
The costs of the liquidation application brought by Hollard,
are
costs in the liquidation of EBM.
I
OPPERMAN
Judge
of the High Court
Gauteng
Local Division, Johannesburg
Counsel
for the applicants in the Venter Application: Adv LK van der Merwe
Instructed
by: Cawood Attorneys Inc
Counsel
for the respondent (first intervening party) in the Venter
Application: Adv DM Fine SC and Adv AW Pullinger
Instructed
by: Webber Wentzel
Counsel
for the second intervening party (Hollard): Adv PF Louw SC and Adv D
Vetten
Instructed
by: Edward S Classen & Kaka
Date
of hearing: 8 June 2021
Date
of Judgment: 14 June 2021
[1]
This application was launched on 22 December 2020.
[2]
The IGM Application includes an intervention application by Barak
that IGM does not oppose: it is IGM’s stance that Barak
is
entitled to participate in the proceedings by virtue of it being an
affected person, as defined in the Act.
[3]
This application commenced with the service of the Notice of Motion
on 20 January 2021.
[4]
Barak learnt of the Venter Application in the following manner:
Naseeha Bham (‘
Ms
Bham’
),
an associate in the employ of Webber Wentzel (‘
WW
’),
the attorneys for Barak, was checking the urgent court roll on 20
April 2021 to ascertain the number on the roll and
judge to whom
another matter in which she was involved with had been allocated. Ms
Bham is a member of the team at WW working
on the Barak matter. Ms
Bham saw the names of Mr Venter and EBM on the roll and immediately
alerted Damian Wright (‘
Mr
Wright’
)
one of the partners at WW dealing with the Barak matters. Mr Wright
then initiated contact with Mr Venter's (new) attorneys
Messrs
Cawood Attorneys. Cawood Attorneys eventually gave WW and its
counsel access to CaseLines in the course of the afternoon
of 20
April 2021. Barak's junior counsel appeared before Madam Justice
Kathree-Setiloane on 21 April 2021 and argued that Barak
was
entitled to leave to intervene in the Venter Application and a
reasonable period of time in which to file an answering affidavit.
This was conceded.
[5]
There
was some confusion as to whether Mr Louw SC was still in the matter
as he previously (from 15 to 17 March 2021) had represented
EBM in
the Barak Application (instructed by Edward S Classen & Kaka
attorneys). EBM was represented by Mr van der Merwe instructed
by
Cawood Attorneys Inc. in the Venter Application. Nothing turns on
this other than to explain the delay in Hollard’s
application.
[6]
FirstRand
Bank Limited v Wallace Pienaar Properties CC (Absa Bank Limited
intervening)
2002 (2) SA 758 (W)
[7]
At
760 E
[8]
In re
Body
Corporate of Caroline Court
[2002]
1 All SA 49
(A) at para [9] and pages 659 to 660
[9]
Timasani
(Pty) Ltd (in business rescue) and another v Afrimat Iron Ore (Pty)
Ltd
[2021] ZASCA 43
(13 April 2021)
[10]
Engen
Petroleum Ltd v Multi Waste (Pty) Ltd and Others
,
2012 (5) SA 596
(GSJ)
[11]
paragraph [17]
[12]
Not being able to get hold of the creditors is quite another thing
(which does not arise in this matter) – that can be
dealt with
in an application to court for substituted service as suggested by
Boruchowitz J in
Engen.
But the notice requirement can not simply be dispensed with at the
election of the business rescue practitioner.
[13]
Morar
N. O v Akoo and Another
,
2011 (6) SA 311
(SCA) at paras [19] and [20] – a court can
only grant orders within its power and competence.
[14]
Gainsford
& Others NNO v Tanzer Transport (Pty) Ltd
2013
(4) SA 394
(GSJ) at [22], [23], [29] and [30]
[15]
2005 (5) SA 62
(SCA) at 89A-G
[16]
Recycling
and Economic Development Initiative of South Africa NPC v Minister
of Environmental Affairs,
2019 (3) SA 251
(SCA) at paras [45] to [52]
[17]
Section
348
[18]
African
Banking Corporation of Botswana Ltd v Kariba Furniture Manufacturers
(Pty) Ltd and Others
,
2015 (5) SA 192
(SCA) at para [35]
[19]
(12194/17) [2021] ZAGPPHC 89 (4 March 2021)
[20]
Ex
parte
Klopper
NO: in re Sogervim SA (Pty) Ltd (in liquidation)
1971 (3) SA 791 (T)
[21]
Oakdene
Square Properties (Pty) Ltd and others v Farm Bothasfontein
(Kyalami) (Pty) Ltd and others
2013 (4) SA 539
(SCA)