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[2013] ZAGPPHC 315
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First Rand Bank Ltd v E Marais Incorporated (67542/13) [2013] ZAGPPHC 315 (1 November 2013)
NOT
REPORTABLE
IN
THE GAUTENG HIGH COURT, PRETORIA [REPUBLIC OF SOUTH AFRICA]
CASE
NUMBER: 67542/13
DATE:01/11/2013
In
the matter between:
FIRST
RAND BANK
LTD
............................................................
APPLICANT
And
E
MARAIS
INCORPORATED
................................................
RESPONDENT
JUDGMENT
MOTHLE
J
[1]
In this matter, the applicant brought an application by way of
urgency in terms of Rule 6 (12) of the uniform Rules of Court,
for
leave to perfect the security of a debt concerning a Notarial
Covering Bond.
[2]
The applicant seeks to attach and take in possession movable property
belonging to the respondent, wherever it may be found
and hold it as
security during the period of indebtedness. The respondent is invited
to show cause on Tuesday 26 November 2013
at 10H00, why the interim
order sought should not be made a final order.
[3]
The application was launched on 24 October 2013 and set down for
hearing on Tuesday 29 October 2013. It was in fact heard on
30
October 2013. The significance of these dates will be apparent later
in this judgment.
[4]
On Monday 28 October 2013, the respondent's sole director, initiated
Business Rescue proceedings in terms of section 129 of
the Companies
Act 71 of 2008 (“
Companies Act&rdquo
;). The director’s
resolution and other documents were allegedly sent to the Commission.
[5]
On Wednesday 30 October 2013, the respondent appeared in court
represented by counsel, and submitted a notice in terms of
Rule 6
(5)
(d) (iii), whereby counsel advised that the respondent intends to
raise and argue a point of law.
[6]
The point of law raised by the respondent is that it has instituted
Business Rescue proceedings and in terms of
section 133
of the
Companies Act, once
rescue proceedings are initiated; there exists a
general moratorium on any legal proceedings contemplated or in
progress.
[7]
Section 133
provides as follows:
“
133
General moratorium on legal proceedings against company-
(1)
During business rescue proceedings, no legal proceedings, 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:
(c)
As a set-off against any claim made by the company in any legal
proceeding, irrespective of whether those proceedings commenced
before or after the business rescue proceeding began;
(d)
Criminal proceedings against the company or any of its Directors or
officers;
(e)
Proceedings concerning any property or right over which the company
exercises the powers of a trustee; or
(f)
Proceedings by a regulatory authority in the execution of its duties
after written notification to the business to the business
rescue
practitioner.
(2)
During business rescue proceedings, a guarantee or surety by a
company in favour of any other person may not be enforced by
any
person against the company expect with leave of the court and in
accordance with any terms the court considers just and equitable
in
the circumstances
(3)
If any right to commence proceedings or otherwise assert a claim
against a company is subject to a time limit, the measurement
of that
time must be suspended during the company's business rescue
proceedings.”
[8]
The general moratorium is in effect or in legal parlance, a stay of
proceedings. As it appears from the text of
section 133
, there are
exceptions and proviso which allow the enforcement of a guarantee,
with the leave of the court and in accordance with
any terms the
court considers just and equitable in the circumstances, see
section
133(1)(b)
and
133
(2).
[9]
In response, the applicant contends that the business rescue
Proceedings were not properly initiated as envisaged by
section 129.
Subsection of
section 129
prescribes that a board of a company may
resolve to initiate business rescue proceedings if it has reasonable
grounds to believe
that the company is in financial distress and
there appears to be a reasonable prospect of rescuing the company.
Subsection 2 thereof
provides further that the resolution may not be
adopted if liquidation proceedings have been initiated by or against
the company.
Most importantly, such resolution has no force and
effect until it has been filed...
[10]
A perusal of copies of proof of registration for business rescue,
which were attached to the
Rule 6(5)
(d) (iii) notice, indicates the
following
10.1
They are dated Monday 28 October 2013, a day before the hearing of
the application;
10.2.
There is no stamp or signature of the commission, which provides
proof of acknowledgement of receipt or filing of the business
rescue
application.
[11]
It seems to me that the business rescue application was initiated to
thwart the
proceedings,
and not necessarily to rescue the business. The timing and the manner
in which it was initiated, raises serious doubts
as to whether the
respondent genuinely intended to institute business rescue
proceedings. The initiative appears to in effect frustrate
the
applicants attempt to perfect the security granted to it by the very
respondent.
[12]
There is no proof that the business rescue proceedings had been filed
with the
Commission,
as at the time of these proceedings.
Section 133
does not apply.
[12] In the premises I make the
following order:
1.
The point of law raised by the respondent in terms of
Rule 6(5)
(d)
(iii) is dismissed
2.
The applicant is granted leave to perfect the security granted to it
by the respondent in accordance with the provisions of the
General
Notarial Covering Bond No BN16179/2011, by attaching all movable
assets which forms the subject matter of the aforementioned
General
Notarial Covering Bond, which assets belong to the respondent
wherever they may be found while the indebtedness to the
applicant
exists;
3.
The sheriff of whichever district where such movable assets may be
found is authorised to attach all such assets.
4.The
respondent, any business rescue practitioner appointed for the
respondent or any other person or entity is prohibited from
alienating, disposing of or encumbering the movable assets under
attachment of this order, without the consent and approval of
the
applicant.
5.
The applicant is granted leave to approach this court, on the same
papers, supplemented as may be necessary, for further leave
to take
possession and sell or otherwise dispose of any of the movable assets
under attachment;
6.
The respondent is ordered to pay the costs of the application.
7.
The above orders 1, 2, 3, 4, 5 and 6 operate as an interim interdict
pending the return date of Tuesday 26 November 2013 at 10H00,
where
the respondent will have to show cause why the interim order should
not be made a final order.
Mothle
S P
Judge
of the high Court Gauteng High Court Pretoria.