About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2022
>>
[2022] ZAGPPHC 220
|

|

Tayob N.O and Another v Shiva Uranium Proprietary Limited and Others (62989/2021) [2022] ZAGPPHC 220 (23 March 2022)

REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
(1)
REPORTABLE:
YES
/NO
(2)
OF INTEREST TO OTHER JUDGES:
YES
/NO
(3)
REVISED: YES/
NO
18
March  2022
CASE
NO.:  62989/2021
In the matters
between: -
TAYOB, MAHOMED
MAHIER N.O.
First Appellant
EUGENE JANUARIE
N.O.
Second Appellant
and
SHIVA URANIUM
PROPRIETARY LIMITED
First Respondent
(IN BUSINESS
RESCUE)
JUANITO MARTIN
DAMONS
Second Respondent
KGASHANE
CHRISTOPHE MONYELA
Third Respondent
GEORGE VAN DER
MERWE
Fourth Respondent
JOSEPH
MTSHALI
Fifth Respondent
CLOETE
MURRAY

Sixth Respondent
INDUSTRIAL
DEVELOPMENT CORPORATION
Seventh Respondent
OF SOUTH AFRICA
LIMITED
COMPANIES AND
INTELLECTUAL PROPERTY
Eight Respondent
COMMISSION
JUDGMENT
MSIMANG, AJ
INTRODUCTION:
The Applicants have
applied to this Court for an order in the following terms:
[1]
That the Applicant’s non-compliance with the Uniform Rules of Court
relating to service of process and time
frames be condoned and that
the application be heard as one of urgency in accordance with Rule
6(12)(b);
[2]
That it be declared that:
2.1
the first applicant is the only appointed business rescue
practitioner of the first respondent:
2.2
the second applicant has been duly appointed as the first applicant’s
assistant and as junior business
rescue practitioner of the first
respondent;
2.3
the second and third respondents have not been duly appointed as
business rescue practitioners for the
first respondent;
2.4
the second and third respondents are not the business rescue
practitioners of the first respondent;
[3]
That the second and third respondents be interdicted from purporting
to act or to act on behalf of the
first respondent as business rescue
practitioners;
[4]
That the eighth respondent be ordered to reflect the first and second
applicants as the business rescue
practitioners of the first
respondent, and no one else;
[5]
That the second respondent and the third respondent each be ordered
to:
5.1
hand to the applicants all correspondence, communications, memoranda,
determinations and all other documents
in whatsoever format produced
by them or received by them or sent to third parties, including
affected persons of the first respondent
during the period that each
gave out to be a business rescue practitioner of the first
respondent;
5.2
pay over all funds received by them on behalf of the first respondent
and held or controlled by them in
any bank account allocated to the
first respondent;
5.3
provide a written reconciliation detailing all financial transactions
that they entered into on behalf
of the first respondent during the
period 18 September 2018 to date together with all source documents;
5.4
provide a comprehensive and detailed report as contemplated in
section 132(3)(a)
of the
Companies Act 71 of 2008
for the period 18
September 2018 to date detailing all actions that they undertook with
respect of the first respondent;
[6]
That the fourth and fifth respondents be ordered to:
6.1
hand to the applicant all books and records pertaining to the first
respondent whether in hard copy format
or in electronic format;
6.2
in the event that any book or record is no longer in their
possession, to state the whereabouts of such
document by identifying
such document, the date and time on which it was transferred to
another person and the identity of such person;
6.3
deliver a statement of affairs of the first respondent as
contemplated in
section 142(3)
of the
Companies Act 71 of 2008
containing particulars of the items listed in subsections (a) to (f)’
[7]
That the sixth respondent be ordered to:
7.1
pay any and all funds currently held in ABSA Bank account numbers
4094464171 and 4096659166 into the first
applicant’s business bank
account opened in relation to the first applicant under First
National Bank account number 62927243238;
7.2
immediately pay over all and any funds that may be deposited into the
said ABSA account numbers into the
said First National Bank account
number as and when such payments are received;
[8]
That the said second to sixth respondents provide the information,
documents, reports and declarations
set out above to the applicants
at the address of their attorney of record set out below and to the
registrar of this Honourable
Court within ten days of the date of any
order made herein and to confirm on oath that they have complied with
the said obligations;
[9]
That the applicants be authorised to within ten days of the aforesaid
date deliver a supplementary founding
affidavit dealing with the
documents, information and reports aforesaid and authorizing them to
seek further or alternative relief;
[10]
That the second and third respondents be ordered to pay the costs of
this application on the scale of attorney and
own client, the one
paying the other to be absolved and that all other respondents be
ordered to pay the costs of the application
together with the second
and third respondents on the said scale should they oppose the relief
sought;
THE
FACTS
[11]
This matter has a chequered history.  It has its genesis on the
20 February 2018 when the Board of Directors
of the 1
st
Respondent (Shiva
Uranium (Pty) Ltd in Business Rescue) resolved in terms of
Section
129(1)
of the companies Act 71 of 2008 (“the Act”) to place Shiva
under business rescue.  The facts are succinctly set out in the
matter of Tayob and Another v Shiva Uranium (Pty) Ltd and others and
the matter of Shiva Uranium (Pty) Ltd v Tayob and others
[1]
and the matter of Shiva Uranium (Pty) Ltd v Tayob and others
[2]
.
The facts will be repeated in a nutshell for the sake of
completeness.
[12]
These matters related to the appointments of the applicants as
business rescue practitioners of Shiva Uranium by
its Board of
Directors.  The Board initially appointed Messrs Klopper and
Knoop. The appointment of the latter was challenged
by the Industrial
Development Corporation which culminated with a court application for
their removal and for the appointment of
Murray Cloete and Kgashane
Monyela in their stead.
[13]   The
application for the removal of Messrs Klopper and Knoop was heard on
the 31
st
May 2018 by Ranchod J.  At the hearing, and
prior to the matter being called, Messrs Klopper and Knoop resigned
as business
rescue practitioners for Shiva.  The Court Order of
Ranchod J recorded that Messrs Klopper and Knoop had resigned.
The
Court appointed Mr Murray as a senior business rescue
practitioner and directed the Companies and Intellectual Property
Commission
(“The Commission”) to, within 48 hours, appoint an
additional practitioner, subject thereto that the appointment was
acceptable
to the IDC.  Pursuant thereto on the 1
st
June 2018, the Commission appointed Mr Christopher Kgashane Monyela,
the 3
rd
Respondent in this matter.  In terms of
regulation 127, Mr Monyela was appointed as a junior practitioner and
could only act
for a large company as an assistant to a senior
practitioner.
[14]   On
the 18
September 2018 Mr Murray resigned but prior to
doing so and in anticipation of his resignation Messrs Murray and
Monyela resolved
to appoint Mr Juanito Martin Damons who is the
Second Respondent in this matter as a senior business rescue
practitioner.  The
directors of Shiva did not approve the
appointment of Mr Damons.  On the 22 September 2018 the Board of
Shiva passed the following
resolution:
“
WHEREAS
Cloete Murray,
the senior business rescue practitioner of the Company resigned as
business rescue practitioner;
AND
WHEREAS
Mr
Monyela is the remaining business rescue practitioner in the Company.
AND
WHEREAS
Mr
Monyela being a junior business rescue practitioner has no authority
to act as a business rescue practitioner in a Company, the
Company
wishes to appoint two further business rescue practitioners in the
Company.
IT
IS HEREBY RESOLVED THAT:
1.
The Company
shall, in terms of S139(3) appoint Mr Mahomed Mahier Tayob and Mr
Eugene Januarie joint business rescue practitioner in
the Company.
2.
Mr Goerge van der
Merwe is hereby authorised by the Company to sign all documents and
do all things necessary in order to give effect
to the appointments
of Mr Tayob and Mr Januarie”
[15]
Pursuant to the passing of the resolution, the directors of Shiva
filed with the Commission a notice in terms of
section 129(4)(a) for
the appointment of the Applicants as business rescue practitioners
which application was accepted by the Commission.
Similarly,
Messrs Murray and Monyela submitted a notice with the Commission for
the appointment of Mr Damons as the business rescue
practitioner
which application was rejected.
[16]
This caused Monyela, purportedly also acting for Shiva, to urgently
approach the Companies Tribunal to overturn the
decisions of the
Commission.  The Companies Tribunal, on the 27 November 2018,
directed the Commissioner to accept the filing
of the notification in
respect of Mr Damons and in effect, to remove the notification in
respect of the Applicants from its register.
The Applicants, in
turn, approached the court
a quo
on urgent basis for an order
Interdicting the Commission from “implementing, enforcing and/or
adhering to” the aforesaid order
of the Companies Tribunal, pending
the determination of an application where the following order was
sought:
“
1.
to review and set aside the decision of the Tribunal of the 27
November 2018.
2.
a
declaratory order in terms of
section 21(1)(c)
of the
Superior
Court’s Act, 10 of 2013
declaring the Applicants duly and lawfully
appointed Business Rescue
Practitioners of Shiva.”
[17]   The
matter was heard in the High Court Gauteng which dismissed the
Application by Tayob and Januarie.  The Applicants
Appealed to
the Supreme Court of Appeal.  The latter court considered this
matter from inception when the directors took the
decision to place
the company under business rescue through all the appointments of the
Business Rescue Practitioners.  The
Court of Appeal declared
that when Messrs Klopper and Knoop resigned Ranchod J could not order
the appointment of Mr Murray and that
the authority to do so vested
with the directors of Shiva and that the appointment of the
Applicants as the business rescue practitioners
of Shiva was proper
and valid.
[18]   Mr
Monyela was not happy with the outcome and filed an Application for
Leave to Appeal in the Constitutional Court.
The question
before the Constitutional was “
Where there is a case of
voluntary business rescue initiated in terms of
section 129
of the
Companies Act, a
business rescue practitioner appointed by a court in
terms of
section 136(6)(a)
in place of a company appointed
practitioner resigns, who has the power to appoint the
court-appointed practitioner’s replacement?
The answer depends on a
proper interpretation of section 139(3) of the Act
”.
[19]   The
Constitutional Court concurred with the Supreme Court of Appeal’s
conclusion and held that upon Mr Murray’s
resignation the right to
appoint his replacement vested in Shiva’s board of directors and
that Mr Tayob and January were validly
appointed.
THE
ISSUES
[20]   The
Joint Practice Note notes the primary dispute between the Applicants
and the Second and Third Respondents as
to who of them are the
business rescue practitioners of the First Respondent.  The
appointment of Applicants as business rescue
practitioners for the
First Respondent was decisively decided by the Supreme Court of
Appeal and the Constitutional Court.
At the hearing of this
matter all the Respondents represented conceded this fact and the
appointment of the Applicants as business
rescue practitioners is
trite.
[21]   The
secondary dispute between the Applicants and the Seventh Respondent
was settled by agreement in terms of the
Draft Order that I made the
Court Order when the matter was heard on the 18
February
2022.
[22]   The
are two issues that remain in dispute between the parties and they
are:
22.1   the
validity of the appointment of Kgashane Monyela as a business rescue
practitioner in terms of the Court Order
of Ranchod J dated 31 May
2018.
22.2
the appointment of Mr Damons, the Second Respondent as the business
rescue practitioner by the directors of Shiva
on the 2 September 2021
[23]
The Orders of Supreme Court of Appeal and the Constitutional Court
that the Applicants were properly appointed as
business rescue
practitioners for Shiva set aside the appointment of Mr Damons by
Messrs Murray and Monyela.
[24]
The
Appointment of Mr Monyela
Mr
Monyela was appointed in terms of the Court Order of Ranchod J dated
the 31
st
May 2018 which stated the following:
“
3.2.
The
Fourth Respondent is directed within 48 hours of this Order to
appoint an additional business rescue practitioner, subject thereto
that the appointment of such additional business rescue practitioner
is acceptable to the Industrial Development Corporation of South
Africa Limited
”
[25]
Pursuant to this Court Order the Companies and Intellectual Property
Commission appointed Mr Monyela on the 1
st
June
2018 as the business rescue practitioner for Shiva.  Mr Monyela
was appointed in terms of the Regulations
[3]
to
Companies Act and
in particular in terms of
Regulation
127(2)(c)(iii)
as a junior practitioner
[4]
as opposed to the appointment of Applicants who were appointed in
terms of
Regulation 127(2)(c)(i)
[5]
as senior practitioner.
[26]
The distinction is clear that the senior practitioner is in charge of
the business rescue and that the junior practitioner
is only on
assistant.
[27]
It was argued by Mr Louw SC, Counsel for the Applicants that the
appointment of Mr Monyela in terms of the Order
of Ranchod J should
be set aside.  It was pointed out to Mr Louw SC that the
appointment of Mr Monyela was made by the Commissioner
and not the
Court.  The appointment was, however, made as a result of the
Court referral.  He conceded that and argued
that the referral
ought to be set aside.
[28]
The Supreme Court of Appeal did not address whether the appointment
of Mr Monyela was proper as it was not requested
to address this
issue.  The Constitutional Court did address the appointment of
Mr Monyela and stated the following:
“
[9]
Following the resignation of Mr Knoop and Klopper, the company’s
board should have appointed the replacements.  There should
have
been no substantive order in the
section 130
application.  But
the order was made, it has not been set aside, and it was acted
upon.  Pursuant to the order, the CIPC
appointed Mr Monyela as a
junior practitioner to assist Mr Murray, and for several months
Shiva’s business was under their control.
There was no
challenge to their appointment.  The company’s board did not
claim or exercise a right of appointment.
In the circumstances,
and in keeping with the way in which the subsequent litigation was
conducted, the present application should
be approached on the basis
that Messrs Murray and Monyela were appointed by the Court in terms
of
section 130(6)(a)”
[6]
[29]
The directors of Shiva seem to have accepted the appointment of Mr
Monyela.  The resolution passed on the 22
nd
September
2018 which appointed the applicants mentioned Mr Monyela by name as a
junior business rescue practitioner in the company
and that the
appointment of the applicants was in addition to the appointment of
Mr Monyela.
[30]
It was argued by Mr Louw SC that the order of Ranchod J should be a
nullity as when the order was made the court
had no authority to do
so.  He relied on the matter Knoop NO v Gupta (Tayob as
intervening Party)
[7]
where
Wallis stated the following:
“
[
34]
I am aware that some of the reasoning in Motala has been subjected to
criticism by the Constitutional Court.  However, it
remains
authority for the proposition that if a court
“
is
able to conclude that what the court [that made the original
decision] has ordered cannot be done under the enabling legislation,
the order in a nullity and can be disregarded”.
This
principle can be invoked where the invalidity appears on the face of
the order as in Motala and in this case.  The suspension
granted
by the full court was therefore a nullity.”
[31]
The Constitutional Court noted that there should not have been a
substantive order in the
section 130
but that it was made.  The
order has not been set aside and had been acted upon.  The was
no challenge to the appointment
of Mr Monyela and that the
application before that court should be approached as if Messrs
Murray and Monyela were appointed by the
court in terms of
section
130(6)(a).
I am bound by the decision of the Constitutional
Court and cannot gainsay same.
[32]
It was pointed out to Mr Louw SC that Mr Monyela was not appointed by
the Court but by the Commissioner.  The
appointment of Mr
Monyela does not appear
ex facie
the court order of Ranchod
J.  It appears that the principle in the Knoop N.O. v Gupta
matter does not apply.
[33]
The appointment of Mr Monyela as a junior business rescue
practitioner for Shiva is valid until set aside by the
court in terms
of section 130 of the Act.
The
Appointment of Mr Damons 2 September 2021
[34]
It was argued, particularly, on behalf of the 4
th
and 5
th
Respondents that for the re-appointment of Mr Damons on 2
nd
September 2021 by themselves as the directors of Shiva is valid.
[35]
The factual background to this appointment is that it apparently came
to the attention of the 4
th
and 5
th
Respondent
that the business rescue practitioner’s licence of the 1
st
Applicant had expired.  Pursuant thereto the directors of Shiva
passed a resolution on the 2
nd
September 2021 noting that
the licence of Mr Tayob had expired and the directors resolved to
appoint Mr Damons in terms of Section
129(3)(b) of the Act.
[36]
At the hearing the 4
th
and 5
th
Respondents did
not pursue that argument as it was obvious that it was an
administrative error at the offices of the Commissioner.
The
argument was no longer persisted with and the argument that was
proffered at the hearing was that the directors of Shiva are
entitled
to appoint several business rescue practitioners, more so that
section 128(1)(d) made provision for the appointment of a
person or
two or more persons appointed jointly.
[37]
They argued that while section 129(3) makes provision for an
appointment within five days of filing of a resolution,
that is not a
bar to the subsequent appointment of another business rescue
practitioner. Section 129 only contemplates the appointment
of a
business rescue practitioner at the commencement of the business
rescue process. There is no merit in this argument.  The
reasons
for the appointment of Mr Damons appears in the resolution of the 2
nd
September 2021 and that is to replace Mr Tayob as a result of the
lapsing of his licence.
[38]
The Act makes provision for removal and replacement of a practitioner
in terms of the provisions of section 139 which
provides as follows:
“
139
(1)
A
practitioner may be removed only –
(a)
by court order in terms of section 130; or
(b)
as provided for in this section
(2)
Upon
request of an affected person, or on its own motion, the

court may remove a practitioner from
office on any of the

following ground:
(a)
Incompetence or failure to perform duties;
(b)
failure to exercise the proper degree of care in the
performance
of the practitioner’s functions;
(c)
engaging in illegal acts or conduct;
(d)
if the practitioner no longer satisfies the requirements set
out
in section 138(1)
(e)
conflict of interest or lack of independence; or
(f)
the practitioner is incapacitated and unable to perform the

functions of that office, and is unlikely to regain the
capacity               within
a reasonable time.
(3)
The
company, or the creditor who nominated the practitioner, as
the case may be,
must appoint a
new practitioner if a practitioner
dies, resigns
or is removed from
office, subject to the right of an          affected
person to bring a
fresh application in terms of section
130(1)(b) to set aside that new
appointment”
.
[39]
The fourth and the fifth respondents were accordingly not entitled to
appoint a new business rescue practitioner
and the appointment of Mr
Damons on the 2
nd
September 2021 be and is hereby set
aside.
URGENCY
[40]
The respondent argued that there is no urgency in this matter.
I do not share that sentiment as the first respondent
was placed
under business rescue in February 2018, and business rescue
practitioners have not been put in a position to fulfil their
mandate.  It is imperative that they be permitted to do so
urgently.  I accordingly find that this matter is urgent.
[41]
COSTS
41.1
The applicant sought an order for costs against the second and third
respondents on punitive scale.
The second respondent did not oppose the application and filed a
notice to abide with the decision      of the
court.  There should not be an order of cost against him.
41.2
The third respondent was entitled to oppose the application as the
order sought
was that he was not
properly appointed as a business   rescue practitioner which
order is not granted.  He was also not
successful in some of his
opposition to this application.
41.3
The only respondents that unsuccessfully oppose this application are
the fourth and the fifth.
ORDER
Therefore
I made the following order:
1.
The
applicant’s non-compliance with the Uniform Rules of Court relating
to service of process and time frames be condoned and that
the
application be heard as one of urgency in accordance with Rule
6(12)(b);
2.
It
is declared that:
2.1
the
first applicant and the second applicant are the appointed business
rescue practitioners of the first respondent;
2.2
the
third respondent has been duly appointed as the first applicant’s
and the second applicant’s assistant and as junior business
rescue
practitioner of the first respondent;
2.3
the
second respondent has not been duly appointed as business rescue
practitioners for the first respondent;
3.
The
second respondent be and is hereby interdicted from purporting to act
or to act on behalf of the first respondent as business
rescue
practitioners;
4.
The
eight respondent be ordered to reflect the first and the second
applicants  and third respondent as the business rescue
practitioners
of the first respondent.
5.
The
second respondent and the third respondent each is ordered to;
5.1
hand
to the applicants all correspondence, communications, memoranda,
determinations and all other documents in whatsoever format
produced
by them or received by them or sent to third parties, including
affected persons of the first respondent during the period
that each
gave out to be a business rescue practitioner of the first
respondent;
5.2
provide
a written reconciliation detailing all financial transactions that
they entered into on behalf of the first respondent during
the period
18 September 2018 to date together with all source documents;
5.3
provide
a comprehensive and detailed report as contemplated in
section
132(3)(a)
of the
Companies Act 71 of 2008
for the period 18 September
2018 to date detailing all actions that they undertook with respect
to the first respondent;
6.
The
fourth and fifth respondents are ordered to:
6.1
hand
to the applicants all books and records pertaining to the first
respondent whether in hard copy format or in electronic format;
6.2
in
the event that any book or record is no longer in their possession,
to state the whereabouts of such document by identifying such
document, the date and time on which it was transferred to another
person and the identity of such person;
6.3
deliver
a statement of affairs of the first respondent as contemplated in
section 142(3)
of the
Companies Act of 2008
containing particulars of
the items listed in subsections (a) to (f);
7.
The
said second to sixth respondents provide the information, documents,
reports and declarations set out above to the applicants
at the
address of their attorney of record set out below and to the
registrar of this Honourable Court within ten days of the date
of any
order made herein and to confirm on oath that they have complied with
the said obligations;
8.
The
applicants are authorized to within ten days of the aforesaid date
deliver a supplementary founding affidavit dealing with the
documents, information and reports aforesaid and authorizing them to
seek further or alternative relief;
9.
The
fourth and fifth respondents are ordered to pay the costs of this
application on the party and party scale, including the costs
of two
counsel.
MSIMANG J
ACTING JUDGE OF
THE GAUTENG DIVISION, PRETORIA
Heard
on
:
For
the Appellants
:
Instructed
by
:
For the
Respondent
:
Instructed
by
:
Date
of Judgment
:
[1]
[2020] JOL 49101 (SCA)
[2]
[2021] JOL 51531 (CC)
[3]
The Companies Regulations, 2011 were made in
terms of s 223 of the Act and published under GN R351, GG34239, 26
April 2011
[4]
In terms of reg 127(2)(c)(ii) ‘junior
practitioner’ means a person who is qualified to be appointed as a
business rescue practitioner
in terms of s 138(1) and who,
immediately before being appointed as a practitioner for a
particular company, has either not previously
engaged in business
turnaround practice before the effective date of the Act, or acted
as a business rescue practitioner in terms
of the Act, or has
actively engaged in business turnaround practice before the
effective date of the Act, or as a business rescue
practitioner in
terms of the Act, for a combined period of less than 5 years.
[5]
In terms of reg 127(2)(c)(i) ‘senior
practitioner’ means a person who is qualified to be appointed as a
business rescue practitioner
in terms of s138(1)and who, immediately
before being appointed as practitioner for a particular company, has
actively engaged in
business turnaround practice before the
effective date of the Act, or as a business rescue practitioner in
terms of the Act, for
a combined period of at least ten years.
[6]
Shiva Uranium (Pty) Ltd (In Business Rescue) and another
Tayob and
others at Para [9]
[7]
[2020] JOL 49005
(SCA)