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[2023] ZAFSHC 142
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Islandsite Investments 180 (Pty) Ltd and Another v Knoop N.O. and Others (1410/2023) [2023] ZAFSHC 142 (2 May 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
no: 1410/2023
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
In
the matter between:
ISLANDSITE
INVESTMENTS 180 (PTY) LTD First
Applicant
RONICA
RAGAVAN N.O. Second
Applicant
and
KURT
ROBERT KNOOP N.O. First
Respondent
JOHAN
LOUIS KLOPPER N.O. Second
Respondent
DINESH
APPAVOO N.O. Third
Respondent
HUGH
VINCENT COOKE Fourth
Respondent
CORAM:
CRONJÉ,
AJ
HEARD
ON:
20
APRIL 2023
JUDGMENT
BY:
CRONJÉ,
AJ
REASONS
FOR JUDGMENT
The
reasons for my amended order granted on 26 April 2023 are contained
in my written judgment handed down electronically by circulation
to
the parties’ representatives by e-mail and released to SAFLII.
The date and time for handing down was deemed to be
12h00
on 2 May 2023.
[1]
The matter was heard on 20 April 2023 and judgment was reserved. The
Respondents gave an undertaking that
no steps will be taken to
transfer the property on condition that this Court makes an order
whether to grant an interdict pending
the finalisation of the
application under Part B before 28 April 2023. I was not able to give
reasons before 28 April 2023 and
granted relief under Part A on 26
April 2023 with reasons to follow. These are my reasons.
I
THE RELIEF UNDER PART A
[2]
The Applicants brought an urgent application requesting leave, to the
extent necessary, in terms of Section
133(1)(b) of the Companies Act,
71 of 2008 (“the
Companies Act&rdquo
;) to bring the
application. They seek that pending determination of the relief in
Part B, the Respondents be interdicted from,
in any way, selling or
alienating the property situated at Cape Town (the property”).
I granted an interim interdict on 26
April 2023.
II
BACKGROUND
[3]
On 2 June 2021, the National Director of Public Prosecution (“NDPP”)
brought an application in
terms of the Prevention of Organised Crime
Act 121 of 1998 (“POCA”) against a number of
Defendants/Respondents. The
First Applicant (“Islandsite”)
was the Third Defendant whilst the Second Applicant (“Ms
Ragavan”) was cited
in the application before me in her
capacity as director of Islandsite.
[1]
She was not cited in her personal capacity in the NDPP’s
application.
[4]
Islandsite was placed in business rescue in terms of the
Companies
Act before
the POCA order was granted. The First and Second
Respondents are the appointed business rescue practitioners
(“BRP’s”).
The Third Respondent was appointed as
Curator in terms of the POCA order.
[5]
On 21 April 2023, one day after I heard this application, Gusha AJ
discharged the accused against whom the
POCA order was granted in
terms of section 174 of the Criminal Procedure Act,
51
of 1977 (“the
CPA”).
[2]
[6]
The Respondents raised various points
in limine
which I will
address first.
III
URGENCY
[7]
The Second Applicant states that certain news articles were published
on or about 11 January 2023 concerning
the sale of the property
wherein, according to her, a low-listing price as well as an
allegation that the property was in a dilapidated
state appeared.
Upon learning of the articles, VDM Attorneys (“VDM”)
directed a letter to the BRPs stating that the
property was to be
sold below market value and it was proposed that a third party
(“Newco”) immediately take care of,
and pay all expenses
associated with the property.
[8]
The Applicants allege that no reply was received from the BRPs and
VDM followed up for a response on 23 January
2023 and 31 January
2023. Feedback was also sought whether the BRPs communicated the
correspondence with the Curator.
[9]
On 31 January 2023, the BRPs’ replied and
inter alia
stated that the Curator, the NDPP and the BRPs have consented to the
sale of the property and that a mandate was already signed
in
December 2022. The BRPs were of the view that the proposal to keep
the property is not viable or in the best interest of business
rescue
and contrary to the adopted business rescue plan. I pause to state
that the plan is not as clear as averred.
[10]
On 3 February 2023, VDM addressed further correspondence to the BRPs
and copied the Curator therein. It recorded that
the BRPs would be
remiss in their duty to Islandsite, its shareholders, directors and
creditors, not to realize assets at their
full value where possible.
They stated that there can be no prejudice if the Board is allowed to
arrange for immediate security
and have the property maintained from
a structural perspective (repairs and maintenance) and that the
refusal of the request in
the January correspondence was
unreasonable. The pleadings do not indicate that there was further
exchange of correspondence between
3 February 2023 and 21 February
2023 when the BRPs replied stating that an offer of R20 million has
been received and the Curator
and BRPs are of the firm view that this
offer should be accepted. The sale was concluded on 22 February 2023.
[11]
The Applicants state that on 10 March 2023, in an attempt to avoid
issuing this urgent application, VDM again addressed
a letter to the
Curator and BRPs to which a draft urgent application was appended.
The Curator was requested to reconsider alienating
the property,
having regard to the grounds set out in the draft application. It was
stated that everything should at least be held
in abeyance until
judgment has been handed down by Gusha AJ in the criminal matter as,
if the State fails in the prosecution, it
will vitiate the POCA order
and the appointment of the Curator. The Heads of Argument of the
Accused in the criminal matter was
appended to the correspondence.
[12]
VDM also requested that the sale be pended to allow the intended
application to be heard in normal course. On 16 March
2023, the
Curator stated that a cash offer was received and accepted by him and
the BRPs on 22 February 2023. It is recorded that
the Curator and the
BRPs knew of the stance of Islandsite’s Board. From the papers
it is clear that the Curator and BRPs
delayed responding from 3
February 2023 until 21 February 2023. The advertisement for sale
stated that the offers will be accepted
until 17 February 2023. The
Curator and the BRPs accepted an offer for a price predetermined by
one agent in January 2023 without
disclosing on 21 February 2023 that
they will sign an agreement.
[13]
A copy of the sale agreement was provided to VDM on 17 March 2023 and
on the same date, VDM dispatched an e-mail to the
Curator wherein
critical information was sought.
[3]
[14]
The Curator was informed that, should it be his view that Mrs Ragavan
is not entitled to the information and that he
only has a duty to
report to the BRPs, he should confirm it in writing. The Curator was
requested to confirm whether he provided
the BRPs with a statement of
account and if so when it was done. A copy was requested. On 16
March, the Curator dispatched an e-mail
to VDM.
[15]
The Applicant states that they have no means to achieve similar
redress and for this reason the urgent procedure was
adopted.
[16]
They allege that they tried in good faith to resolve the matter
without recourse to litigation and refer to the draft
application.
[17]
The Applicants record that they are in the dark as to what the state
of readiness of transfer of the property is and
that should an
undertaking be provided not to transfer, the Applicants will agree to
any reasonable extension of time and postponement
of the hearing. The
Respondents provided an undertaking until 28 April 2023.
[18]
The mandate to sell the property was clearly only granted until or
before 17 February 2023. It was not sold then and
Mrs Ragavan could
reasonably have accepted that it will not be sold unless new
information about a mandate is communicated.
[19]
In
East
Rock Trading 7 (Pty) Ltd and Another v Eagle Valley Granite (Pty) Ltd
and Others
[4]
,
on which Mr Hellens SC for the Applicants also relied, the Court
stated that it is important in urgent applications, in determining
whether an applicant will not be able to obtain substantial redress
at the proper time, that the facts of each case have to be
considered:
“
[8]
In
my view the delay in instituting proceedings is not, on its own a
ground, for refusing to regard the matter as urgent. A court
is
obliged to consider the circumstances of the case and the explanation
given. The important issue is whether, despite the delay,
the
applicant can or cannot be afforded substantial redress at a hearing
in due course
.
A delay might be an indication that the matter is not as urgent as
the applicant would want the Court to believe.
On
the other hand a delay may have been caused by the fact that the
Applicant was attempting to settle the matter or collect more
facts
with regard thereto
.”
[my emphasis]
[20]
Ex
parte
Minister
of Social Development and Others
[5]
,
on which Mr PJJ Zietsman SC for the Curator relies, is
distinguishable. It appears in that matter that there was a delay of
approximately
18 months. He also referred to
Nelson
Mandela Metropolitan Municipality v Greyvenouw CC
[6]
.
There were attempts to address the dispute between 7 November 2022
and 19 December 2002. The Court held:
“
[37]
It is trite that applicants in urgent applications must give proper
consideration to the degree of urgency and tailor the notice
of
motion to that degree of urgency. It is also true that when
courts are enjoined by rule 6(12) to deal with urgent applications
in
accordance with procedures that follow the rules as far as possible,
this involves the exercise of a judicial discretion by
a court
‘concerning which deviations it will tolerate in a specific
case’.
[38]
Secondly, it is not in every case in which the applicant may have
departed from the rules to an unwarranted extent that the
appropriate
remedy is the dismissal of the application.
Each
case depends on its special facts and circumstances
.”
[my
emphasis]
[21]
Mr Scott, who appeared for the BRPs, referred me to the Order of
Naidoo J, dated 30 March 2023
[7]
where the Respondents reserved their rights, notwithstanding an
agreement that the matter be postponed for hearing of Part A on
20
April 2023, and time frames stipulated for filing of further papers,
to rely on defences raised in their answering affidavits.
He
inter
alia
referred to
Sutherland
Transport (Pty) Ltd v Willard Batteries, a division of Powertech
(Pty) Ltd
[8]
.
It, however, in the same paragraph also provides that an Applicant
has to set out a factual basis for abridgement of the periods:
[15]
…I’m not aware that it is a requirement for establishing
grounds for urgency that an applicant is required to
put up a
substantial body of evidence to substantiate and its allegations of
fact in relation to those grounds of urgency. A claim
for urgent
consideration of a matter is, after all, no more than an appeal to
the court based on substantial and reasonable grounds
to condone the
applicant’s non-compliance with the ordinary rules of procedure
and to permit the presentation of the applicant’s
case, other
than in the ordinary course.
An
applicant is required to set out the basis of its claim for urgency
with sufficient detail to enable the court to assess whether
the
inherent prejudice to a party who is brought to court on truncated or
reduced time periods is justified, having regard to the
general
exigencies of the matter
.
In my view the applicant has indeed set out factual basis upon which
it alleges that there is cause for an appropriate reduction
of the
time periods provided for in the rules.”
[my
emphasis]
[22]
The Respondents knew that judgment in the criminal trial could
probably be delivered on 21 April 2023. They were favoured
with the
Heads of Argument in that matter. The Curator must have anticipated
that there was a chance that it will be the end of
his appointment if
the accused were acquitted or if there was a discharge in terms of
section 174 of the CPA. Islandsite was under
business rescue since
2018. The sudden sale of the property outside the date of mandate,
the lack of timeous engagement by the
BRPs and the Curator with VDM,
and the dispute on the value of the property are important factors
which I took into consideration
in exercising my discretion. The
reservation of rights when the matter was postponed can, in my view,
only relate to the balance
of the points
in limine
as the
matter was removed from the urgent roll, and postponed for argument.
[23]
The result of the removal of the matter by Naidoo J, by agreement
between the parties, in my view regularised the process.
The Court in
Commissioner
for South African Revenue Service v Hawker Air Services (Pty) Ltd;
Commissioner for South African Revenue Service v
Hawker Aviation
Services Partnership and Others the Court
[9]
held:
“
[9]
One of the grounds on which Patel J dismissed the applications was
that at their inception they had lacked urgency. This was
erroneous.
Urgency is a reason that may justify deviation from the times and
forms the rules prescribe. It relates to form, not
substance, and is
not a prerequisite to a claim for substantive relief. Where an
application is brought on the basis of urgency,
the rules of court
permit a court (or a judge in chambers) to dispense with the forms
and service usually required, and to dispose
of it "as to it
seems meet" (rule 6(12)(a)). This in effect permits an urgent
applicant, subject to the court's control,
to forge its own rules
(which must "as far as practicable be in accordance with"
the rules).
Where
the application lacks the requisite element or degree of urgency, the
court can for that reason decline to exercise its powers
under rule
6(12)(a). The matter is then not properly on the court's roll, and it
declines to hear it. The appropriate order is
generally to strike the
application from the roll. This enables the applicant to set the
matter down again, on proper notice and
compliance
.”
[my
emphasis]
[24]
The Fourth Respondent, the purchaser, does not oppose the interim
relief. The BRPs have not shown material prejudice
to them. The
Curator has fiduciary duties and no personal interest in the value of
the property. He stood to get paid, either from
Islandsite or from
the State.
IV
JURISDICTION
[25]
When the matter was heard, I expressed my
prima facie
view
that the application appears to be linked to the POCA order. It
should be common cause that the POCA order is the only
nexus
between the Applicants, the Respondents, the property and this Court.
[26]
Sections 28 and 29 of POCA provide for powers of the Court that made
the POCA order. Where a High Court has made a restraint
order,
that
court
may
at any time appoint a
curator
bonis
subject to the directions of
that
court
. A
High Court which has made a restraint order in respect of immovable
property, may at any time with a view to ensuring the payment
to the
State,
inter
alia
order
the Registrar of Deeds concerned to endorse any one or more of the
restrictions contemplated in subsection (2) on the title
deed of the
immovable property.
[27]
Would the orders of this Court be
effective
outside
the Free State Province? In
Bid
Industrial Holdings v Strang and another
[10]
,
the SCA held that
the
principle of effectiveness, despite its having been described as “the
basic principle of jurisdiction in our law”
is largely for the
Plaintiff to assess and to act accordingly. In
Gallo
Africa Ltd and Others v Sting Music (Pty) Ltd and Others
[11]
,
relied on by Mr Scott, the SCA also held that: “
A
lthough
effectiveness ‘lies at the root of jurisdiction’ and is
the rationale for jurisdiction, ‘it is not necessarily
the
criterion for its existence.’ What is further required is
a ratio jurisdictionis. The ratio, in turn,
may for
instance be domicile, contract, delict and, relevant for present
purposes, ratione rei sitae.
[12]
It
depends on the nature of the right or claim whether the one ground or
the other provides a ground for jurisdiction
.”
[my emphasis] An important factor may be access to the Courts as
guaranteed in section 34 of the Constitution.
[13]
There was no complaint by the Respondents in this regard.
[28]
Although the POCA order referred to other parties as well, Islandsite
was affected and the Curator appointed in terms
of that order. This
Court, on the date of issue of this application, had jurisdiction
which it retains. Although the application
is brought self-standing,
it is in fact linked as it deals with the powers and conduct of the
Curator and the BRPs.
[29]
Section 21 of the Superior Courts Act
[14]
provides that a Division also has jurisdiction over any person
residing or being outside its area of jurisdiction who is joined
as a
party to any cause, in this instance the POCA order, in relation to
which such court has jurisdiction. The location of the
property
(
forum
rei
sitae
)
is not in itself determinative for jurisdiction in this application.
Rule 37(6)(e) of the Uniform Rules of Court makes provision
for
transfer of matters to another Court if the parties agree or so wish.
[30]
Mr Zietsman referred to
Cordiant
Trading CC v Daimler Chrysler Financial Services (Pty) Ltd
[15]
.
The Court held that
‘
causes
arising’
does not refer to causes of action but to all factors giving rise to
jurisdiction under the common law.
[16]
The POCA order clothed the Free State Division with specific
statutory powers over the Curator and the property.
V
NON-JOINDER
[31]
The BRPs and the Curator take the point that the Registrar of Deeds
was not joined. They argue that the property is situated
in Cape Town
and therefore this Court does not have jurisdiction. Reliance is
placed on section 97(1) of the Deeds Registry Act
[17]
.
[32]
The Applicants do not seek relief against the Registrar of Deeds not
to effect registration of the property. I took three
factors in
consideration when I granted the order. The first is that the
purchaser does not object to the order. The second is
that the effect
of the order would prohibit the Respondents to transfer the property
on risk of contempt. The third is that a party
who does not join
another party can hardly later complain if the third party execute
his functions in the absence of restrictions
placed on him. Nothing
stands in the way of the Applicants to join the Registrar under Part
B, which is the substantive part of
the application, if they so wish.
As far as the urgent application is concerned, this was not in my
view a material defect.
[33]
Even
if I am wrong, the facts in
Neves
v Neves N.O
.
[18]
are distinguishable.
The
Applicant,
In
that matter,
seemed
to be ignorant of the fact that for the transfer to be reversed, the
papers will be required to be executed by the Registrar.
The Court
held that any court order directing that the registration of transfer
is to be reversed will necessarily affect or involve
the Registrar
and that as such, the Deeds Office should be part of the
proceedings.
[19]
The
Applicants do not seek a reversal or registration.
[34]
Mr Zietsman argued that over and above the non-joinder of the
Registrar of Deeds, the NDPP was also not joined. Mr Hellens
argued
that the NDPP was provided with the application and refers to an
email dated 22 March 2023.
[20]
A person/entity only becomes a party by formal joinder. The NDPP did
not join or imitate that it will join or has to be joined.
I referred
to the NDPP’s letter
[21]
which referred to the Curator’s correspondence that was not
included in the pleadings. The Curator had specific statutory
duties
and to the extent that he may have failed them, he would be liable.
The relief in Part A is not final and I am not called
upon to express
myself on the merits of Part B. The Applicants did not seek an urgent
review of the decision of the NDPP and as
the papers stood before me,
it did not have a direct and substantial interest.
VI
LACK OF
LOCUS STANDI
[35]
The starting point is
section 133
of the
Companies Act. The
relevant
part reads as follows:
“
133.
General
moratorium
on
legal
proceedings
against
company.
—
(1)
During
business rescue proceedings, no legal proceeding, including
enforcement action,
against
the company
,
or in relation to any property belonging to the company, or lawfully
in its possession, may be commenced or proceeded with in
any forum,
except—
(
a
)
with the written consent of the practitioner;
(
b
)
with the leave of the court and in accordance with any terms the
court considers suitable;”
[36]
The present application is against the BRPs and the Curator. The BRPs
and the Curator states that the section contains
a prohibition and
that neither of the Applicants have standing. What would the position
be if BRPs and a Curator perform functions
that the Board view as
inimical to the interest of the Company? To whom must the Directors
or any other party who has a material
interest in the company’s
affairs complain? Logic dictates that the BRPs will never authorise a
Board to take steps against
them.
[37]
In my view,
section 133
, caters for a situation where litigation is
adverse to the company. One may argue that the present application is
adverse to the
company as it necessitates the BRPs, who are appointed
for the management and control of the company, to expend costs.
Paragraph
10 of the relief under Part B alleges that the BRPs failed
to demonstrate the proper degree of care in the performance of their
duties and that it also be declared that the business rescue
proceedings has terminated.
[38]
Section 139
of the
Companies Act provides
that a BRP may be removed
by a court upon request of an affected person, or on its own motion.
The court may remove a practitioner
from office on the ground that
there is incompetence or failure to perform the duties of a business
rescue practitioner of the
particular company.
[22]
[39]
My reading of the
Companies Act
does
not provide for
an absolute bar against the directors from taking any steps to
protect the company against the BRPs. The Board
continues to exercise
functions, although subject to the express instructions or direction
of the BRPs. The Applicants’ action
on behalf of the company
against the BRPs cannot be void. The BRPs in any event did not state
that they would have authorised the
Applicants to take steps against
them.
[40]
There has to be a safeguard for the company to protect itself against
BRPs that allegedly do not comply with their obligations.
There is no
reason for a company to sit idle and see how it is prejudiced merely
because business rescuers took control and management.
[41]
By way of analogy, the SCA in
Mostert
and Others v Nash and Another
[23]
held:
“
The
issue is the validity of the fee agreement between the curator and
the FSB. There are no trustees to protect the interests of
persons,
such as pensioners, former members or a former principal employer.
The invalidity of the fee agreement is directed at
recovering funds
for the Sable Fund that would in turn form part of a surplus in the
fund available for distribution in accordance
with a surplus
apportionment exercise. That provides a sufficiently direct and
substantial interest in the outcome of the litigation
to confer
standing on Mr Nash and Midmacor.
[23]
At the risk of piling Pelion upon Ossa there is a further ground for
recognising standing on the part of Mr Nash and Midmacor.
It lies in
s 5(8) of the FI Act
[24]
[Financial Institutions Act], which provides that:
‘
Any
person, on good cause shown, may make application to the court to set
aside or alter any decision made, or any action taken,
by the curator
or the registrar with regard to any matter arising out of, or in
connection with, the control and management or
the business of an
institution which has been place under curatorship.’
…
The
conclusion of the fee agreement is an action by the curator and the
FSB in connection with the control and management of the
Sable Fund.
While the section might not permit of a challenge by someone with no
connection whatsoever to a fund that can hardly
be said of Mr Nash
and Midmacor. The claim that they lacked locus standi to
bring these proceedings must be rejected.”
[42]
Bermann J in
Absa
Bank Ltd v Rhebokskloof (Pty) Ltd and Others
[25]
held:
“
To
hold that after the granting of a provisional liquidation order the
directors of the company which has been provisionally liquidated
by
virtue of such order have lost their locus standi in judicio to
oppose the granting of a final order would fly in the face of
the
very object and purpose of the rule nisi and it would, therefore, be
quite wrong to emasculate such object and purpose by finding
that the
directors have lost their residual power to show cause why the
company should not be would up, for that matter to anticipate
the
return day of the rule nisi. It would be quite ludicrous to hold that
a director, or a company acting through its directors,
is not an
interested party when it comes to deciding whether it and/or they
have the right to be heard on the return day of the
rule nisi.”
[43]
In
The
Prudential Authority v 3Sixty Life Limited and Others
[26]
,
albeit on different facts, it was stated:
“
It
would be contrary to the interests of justice and the principle
of audi alteram partem to deprive an entity in the position
of
3Sixty of the right to be heard in order to oppose the granting of a
final curatorship order, where a provisional order had
been granted
on an ex parte basis. To deprive the board of that power
and leave it vested in a curator who acts under
the control of the
Authority under section 5(6) of the FI Act, would render the express
provisions of sections 5(2)(b) and 5(8)(a)
nugatory
.”
[44]
Section 36 of the Constitution of the Republic of South Africa
provides that the rights in the Bill of Rights may be
limited only in
terms of law of general application to the extent that the limitation
is reasonable and justifiable in an open
and democratic society based
on human dignity, equality, and freedom. An interpretation of the
Companies Act that
places an absolute limitation would in my view not
only be an unreasonable limitation but would also make the right of
access to
the Courts nugatory.
[45]
Mr Scott referred to
SA
Airlink v SAA (SOC) Limited and Others
[27]
.
The facts are distinguishable. Airlink was a creditor. The facts are
also distinguishable from the facts in
Ragavan
and Others v Optimum Coal Terminal (Pty) Ltd and Others
[28]
.
The Applicants take issue with the BRPs and the Curator, not the
company. The Companies Act nowhere equate the status of the BRPs
with
that of the legal persona.
[46]
I found that the Applicants have
locus standi
. I do not need
to express myself on the applicability of
section 133
in these
circumstances. Erring on the side of caution, I granted the
Applicants leave in terms of
section 133
of the
Companies Act.
VII
PRIMA FACIE
RIGHT
[47]
I considered a number of facts to determine whether there is a
prima
facie
right. I found that the Applicants had standing to enforce rights in
the best interest of the Company. The respective parties placed
reliance on diverse documents to advance a
fair
price for the property. These ranged from R8.5 million
[29]
to R 30 750 000.00 for property with the same surface.
[30]
The agent suggested R19 million in June 2022
[31]
and the Curator recommended the same price in October 2022. It is
unknown what recommendations were made to the NDPP. It was eventually
advertised 6 months after the initial recommendation for a price
marginally more that determined in June 2022.
[48]
I found one
professional
valuation by Ixabiso Valuation
Service. Hardy Properties did not provide a sworn valuation. Nothing
showed that the market was
properly evaluated.
[49]
It is important to remember that this was a preservation order. There
were offers to preserve the property at no cost
for Islandsite.
[32]
On the papers, the debt and possible repair costs did not exceed
approximately R2 million. Islandsite was placed under business
rescue
in 2018 and it was not apparent from the papers what the BRPs did for
approximately 5 years to maintain the property.
[33]
[50]
Mr Hellens argued that Islandsite was not illiquid
[34]
and that the Curator was therefore not empowered by clause 1.11 of
the POCA order
[35]
to sell the
property. The sale agreement incidentally states that: “
This
offer is subject to the purchaser being satisfied with the outcome of
a due diligence by no later than 28 February 2023
”.
The outcome is unknown.
[51]
The Curator states that the sale was lawful but did not provide any
evidence regarding liquidity.
[36]
The BRPs merely stated that the sale was lawful and that legal
argument will be presented. There appeared to be movable assets
to
the value of R206 431 752.00 (forced sale value).
[37]
[52]
Paragraph 2 of Annexure B to the POCA order provides that the Curator
must
actively
market
the assets and solicit
offers
.
A
single
estate agent was granted a
sole
mandate
for
three
months
at a
fixed
price of R20 million
[38]
,
and the date until when offers would be considered was extended
without the Applicants’ knowledge. The letter from the Curator
to the BRPs contained a host of questions to which I could not find a
reply.
[53]
In
Bengwenyama
Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and
Others
[39]
the Constitutional Court stressed the importance of consultation,
albeit in the context of the Minerals Act. The judgment makes
it
clear that consultation is not merely a formal exercise - although it
does not include reaching an agreement - but nonetheless
involves the
active participating of the landowner in respect of possible
interference with its rights in respect of the property.
The Court
held:
"[65]
One of the purposes of consultation with the landowner must surely be
to see whether some accommodation is possible between
the applicant
for a prospecting right and the landowner insofar as the interference
with the landowner's rights to use the property
is concerned. …
The Act's equivalent is consultation, the purpose of which should be
to ascertain whether an accommodation
of sorts can be reached in
respect of the impact on the landowner's right to use his land. …
another, more general, purpose
of the consultation is to provide
landowners or occupiers with the necessary information on everything
that is to be done, so that
they can make an informed decision in
relation to the representations to be made, whether to use the
internal procedures of the
application goes against them and whether
to take the [administrative] action concerned on review. The
consultation process and
its result are an integral part of the
fairness process because the decision cannot be fair if the
administrator did not have
full regard to precisely what happened
during the consultation process in order to determine whether the
consultation was sufficient
to render the grant of the application
procedurally fair
.” [my emphasis]
VIII
REASONABLE APPREHENSION OF IRREPARABLE HARM
[54]
The Applicants submitted that the property was sold well under market
value with no attempt to realise the full value.
It was to be sold
within the scope of a statutory regime. There were no expenses that
could not have been satisfied through other
liquid assets and no
reason was proffered why they were not consulted. Islandsite was not
illiquid. There was no proper engagement
by the Curator with the
Applicants that may have explained his reasoning. Mrs Ragavan did not
lose her responsibilities as director
merely because of the
appointment of the Curator. It was submitted that all aforesaid
rights will be lost if it is sold for less.
[55]
Would the Applicants suffer irreparable harm? If it is accepted that
the Curator and the BRPs failed to challenge the
averment that the
estate is not illiquid, there would not be objective cause for the
sale. It would be of little, if any assistance
to the Applicants to
sue for damages if the property never had to be sold in the first
place. Islandsite had plans with the property
and if the relief is
not granted, the opportunity, over and above the value, would be
lost.
[56]
The Curator wanted to liquidate the property to fund various
expenses, including his own and the BRPs’ fees. Mr
Hellens
submitted that the Curator can only recover his fees when approved by
the Master of the High Court. There is no proof that
the Master
consented. It is not clear who exactly decided to sell. The Curator
on the one hand states that he resolved to sell
as Islandsite was
illiquid and he need his fees. The BRPs on the other hand said they
had to pay operational expenses of Islandsite
and that the sale was
provided for in the business rescue plan.
[57]
In
Nestor
and Others v Minister of Police and Others
[40]
it was held that an applicant for an interdict is not required to
establish that, on a balance of probabilities flowing from the
undisputed facts, injury will follow. He only has to show that it is
reasonable to apprehend that injury will result. This means
that, on
the basis of the facts presented to him, the Judge must decide
whether there is any basis for the entertainment of a reasonable
apprehension by the applicant.
IX
BALANCE OF CONVENIENCE
[58]
The purchaser does not complain to be inconvenienced. The BRPs does
not state that the estate is illiquid and that the
income from this
sale is the only option available. There was an offer to renovate and
restore the property. The purchaser wants
to flatten the structures.
Rebuilding will be expensive and in my view extremely inconvenient.
X
NO ALTERNATIVE REMEDY
[59]
As stated above, and for purposes of interim relief only, I accept
that the intention was to preserve the property. The
sale, if
continued with, will leave an alternative remedy meaningless.
XI
COSTS
[60]
I ordered that the cost under Part A be costs in the cause. The
outcome of Part B may either be in favour of or adverse
to the
Applicants. I, specifically, do not distinguish between the
Applicants as a Court who hears Part B may be in a better position
to
determine the respective liabilities of the parties to the litigation
as a whole.
P R
CRONJÉ, AJ
On
behalf of the Applicants: Adv
MR Hellens SC
Adv
Ben Prinsloo
Instructed
by: Van
der Merwe & Van der Merwe
Honey
Attorneys
BLOEMFONTEIN
On
behalf of First and Second Respondents: Adv. T Scott
Instructed
by: Smit
Sewgoolam Inc.
McIntyre
Van der Post Attorneys
BLOEMFONTEIN
On
behalf of the Respondents: Adv.
PJJ Zietsman SC
Instructed
by: Werksmans
Attorneys
Symington
& De Kok
BLOEMFONTEIN
[1]
Reported
as NDPP v Sharma and Others (2427/2021) [2021] ZAFSHC 172; 2022 (1)
SACR 289 (FB) (11 August 2021) – not read for
purposes of this
application
[2]
Reported
as S v Thabethe and Others (08/2022) [2023] ZAFSHC 126 (21 April
2023)
[3]
Pleadings, p.
111
[4]
(11/33767)
[2011] ZAGPJHC 196 (23 September 2011). See also: Mogalakwena Local
Municipality v Provincial Executive Council, Limpopo
and Others
(35248/14) [2014] ZAGPPHC 536; 2016 (4) SA 99 (GP) (7 August 2014);
South African Informal Traders Forum and Others
v City of
Johannesburg and Others; South African National Traders Retail
Association v City of Johannesburg and Others (CCT 173/13
; CCT
174/14) [2014] ZACC 8; 2014 (6) BCLR 726 (CC); 2014 (4) SA 371 (CC)
(4 April 2014)
[5]
(CCT14/06)
[2006] ZACC 3
;
2006 (4) SA 309
(CC);
2006 (5) BCLR 604
(CC) (9 March 2006)
[6]
(3263/02)
[2003] ZAECHC 5 (21 February 2003)
[7]
Pleadings, p. 269
[8]
(816/2015)
[2015] ZAECPEHC 21 (31 March 2015)
[9]
(379/05)
[2006] ZASCA 51
;
2006 (4) SA 292
(SCA) ;
[2006] 2 All SA 565
(SCA)
(31 March 2006)
[10]
[2008]
2 All SA 373
(SCA)
at para [57]
[11]
(40/2010)
[2010] ZASCA 96; 2010 (6) SA 329 (SCA) ; [2011] 1 All SA 449 (SCA)
(3 September 2010)
[12]
See also: Els v Weideman and Others 2011 (2) SA 126 (SCA) 135A
[13]
See:
South African Human Rights Commission v Standard Bank of South
Africa Ltd and Others (CCT 291/21) [2022] ZACC 43; 2023 (3)
BCLR 296
(CC) (9 December 2022)
[14]
10
of 2013
[15]
2005 (6) SA 205
(SCA) at para [10] – [11]
[16]
At para [11]
[17]
47 of 1937
[18]
2021 JDR 0716 (MN)
[19]
At para [12]
[20]
Pleadings, p. 381, para 39; p. 407 - 408
[21]
Pleadings, p. 367
[22]
Henochsberg
on the
Companies Act 71 of 2008
, November 2022 –
S1
30
, p. 523
[23]
(604/2017)
[2018] ZASCA 62
;
[2018] 3 All SA 1
(SCA);
2018 (5) SA 409
(SCA) (21 May 2018)
[24]
28
of 2001
[25]
[1993] 2 All SA 534 (C)
[26]
(58950/2021) [2022] ZAGPJHC 732 (30 September 2022)
[27]
(238/2020)
[2020] ZASCA 156
(30 November 2020)
[28]
(136/2022) [2023] ZASCA 34
[29]
Pleadings, p. 342 - 343
[30]
Pleadings, p. 75
[31]
Pleadings, p. 353
[32]
Pleadings, p. 85
[33]
Pleadings, p. 87
[34]
Pleadings, p. 15, para 28
[35]
Pleadings, p. 37, para 1.11
[36]
Pleadings, p. 303, para 61
[37]
Pleadings, p. 193
[38]
Pleadings, p. 332
[39]
(CCT
39/10)
[2010] ZACC 26
;
2011 (4) SA 113
(CC) ;
2011 (3) BCLR 229
(CC)
(30 November 2010)
[40]
1984 (4) SA 230
(SWA) at 244