REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, JOHANNESBURG)
Case No: 20 23/080710
IN THE MATTER BETWEEN:
SANA DEVELOPERS 1st APPLICANT/ RESPONDENT
(PTY) LTD
MAHOMED MAHIER 2nd APPLICANT/ RESPONDENT
TAYO B N.O
AND
NEDBANK LIMITED RESPONDENT / APPLICANT
JUDGMENT [ LEA VE TO APPEAL]
SIWENDU J
DELETE WHICHEVER IS NOT APPLICABLE
) REPORTABLE: NO
) OF INTEREST TO OTHER JUDGES: NO
) REVISED : NO
10.02.2025
DATE SIGNATURE
[1] The applicant s, Sana Developers (Sana Developers) and the business
rescue practitioner, Mr Tayob (Mr Tayob) were the respondents in the application
a quo . They seek the Court’s leave to appeal against its judgment rendered on 23
October 2024 in favour of Nedbank Limited (Nedbank). Nedbank was the
applicant a quo and is the respondent in this application. The leave to appeal is
brought in terms of section 17(1 )(a)(i) of the Superior Courts Act1.
[2] Section 17(1 )(a)(i) stipulates that a leave to appeal may only be given
where the judge or judges concerned are of the opinion that the appeal would have
a reasonable prospect of success . Courts have repeatedly a ffirmed the import of
the provision l imits the right to appeal cases whether there would be reasonable
prospect of success . The test is “stringent” and the section “raises the bar” for the
criterion for granting leave to appeal.2
[3] In the present case, the Court concluded that Nedbank was entitled to the
order both under section 130(1 )(a)(ii) or (iii ) of the Companies Act3 (the Act) and
on the alternative ground in section 130(5 )(a) (ii) on the basis that it is just and
equitable to set aside the resolution placing Sana Developers in business rescue .
The Court granted a provisional order for the liquidation which included
consequential orders :
i. Setting aside the resolution placing Sana Developers under supervision ;
ii. Terminating the rescue proceedings ;
iii. Finding on the facts that the jurisdictional requirements for reasonable
prospect of successfully rescu ing S ana Develop er have not been met ; and
iv. Directing the filing of further affidavits to oppose the final order .
1 10 of 2013.
2 Erasmus Superior Court Practice at RS 2, 2024, D -101 (see also Matoto v Free State Gambling and Liquor
Authority (unreported, FB case no 4629/2015 dated 8 June 2017) at para [5] ) referred to.
3 71 of 2008.
[4] Counsel for the applicants confirmed that t he application for leave to
appeal is confined to specific orders granted by the court, namely the order :
i. Admitting Nedbank’s supplementary affidavit dated 21 May 2024 into
evidence .
ii. Placing Sana Developers under provisional liquidation .
iii. Terminat ing business rescue proceedings .
iv. Setting aside the resolution taken by the board of directors of Sana
Developers on 17 April 2023, placing it under supervision and in business
rescue, is in terms of sections 130(1 )(a)(ii ) and/or (iii) of the Act.
v. Declaring that the business rescue proceedings of the first applicant have
come to an end in terms of section 132(2 )(a) of the Act.
[5] The complaint is that Nedbank filed a supplementary affidavit without a
formal application , which was admitted by the court. The applicants challenge
the Court’s exercise of the discretion to do so. They complain they were denied
a request to postpone the liquidation proceedings as well as the opportunity t o
address the contents of the supplementary affidavit.
[6] As the judgment appeal ed against s tates, a court will exercise its discretion
in permitting the filing of further affidavits against the backdrop of the
fundamental consideration that a matter should be adjudicated upon all the facts
relevant to the issues in dispute . The qualification to the admission of further
affidavits is that t here should be no prejudice caused to the other party by the
admission of the additional affidavits .4 The circumstance for the admission of the
further affidavit and the exercise of the discretion by the court ha ve relevance ,
and are as follow s below.
4 Ndlebe v Budget Insurance Ltd 2019 JDR 0506 (GJ) at para [7].
[7] Nedbank alleged the commencement of the business rescue proceeding
was a stratagem to avoid the sale of certain properties pursuant to the ir attach ment
on or about 23 March 2023 , following an order obtained on 6 September 2022 .
Mr Tayob was appointed as the business rescue business practitioner on 19 April
2023 .
[8] Mr Tayob purported to suspend the obligations of Sana Developers to
Nedbank in terms of the loan agreements in terms of section 136(2) of the Act .
As said, Nedbank , a secured creditor already had a judgment against Sana
Developers in respect of the properties underpinning its security, which were the
subject of the loan agreement. In addition, Nedbank held security by way of a
cession of book debts over rentals of properties leased by Sana Developers. I was
of the view that t he purported suspension in the face of the jud gment was
irregular .
[9] Mr Tayob convened t he first meeting of creditors, on 2 May 2023 , but
failed to produce a business rescue plan despite an extension granted to him to 5
July 2023 . As at the date of the launch of the liquidation application in August
2023, (the subject of the orders appeal ed against ), Mr Tayob had not published a
business rescue plan nor sought an extension from creditors for the failure to do
so. That conduct is not countenanced by the Act.
[10] Mr Tayob furnished the business rescue plan on 9 October 2023 . The
business rescue plan considered by the court was annexed to his answering
affidavit opposing the liquidation application . As said, it was not published within
the 25 business day period stipu lated in section 150(5) of the Act nor within the
reasonable period after the extension was granted. It was published approximately
two months after Nedbank launched the application for liquidation.
[11] The injunction in the Act contemplates that business rescue proceedings
should be conducted expeditiously. The Court rejected Mr Tayob’s explanation
for the delay and found his explanation implausible .
[12] Nedbank contend ed that on 17 M ay 2024, a few d ays before the hearing of
the application for liquidation, Mr Tayob unilaterally amended , or in the language
employed in section 153 ( 1)(a)(i) “revised the plan” (the business rescue p lan
annexed to his answering his affidavit ) without the approval of the creditors . It is
undisputed that although the revision was unauthorised, Nedbank attended the
meeting out of caution and voted against the plan. It is indeed so that e xtracts of
the revised plan formed part of the supplementary affidavit admitted by the Court .
[13] Rather than accept the rejection of the plan and file a certificate to terminate
the proceedings, Mr Tayob informed the meeting he would avail to section 153
(1) (a) (ii). The section permits him to apply to court to challenge Nedbank’s vote
against the plan as “ in appropriate. ”
[14] It is this unauthorised plan , voted against by Nedbank , a creditor with
93,184% of the voting interest, that the applicants complain I should have granted
the postponement for the applica nts to address. It is on this basis that the
applicant s say the Court relied on “incorrect evidence” – that being “the original
business rescue plan, which was attached to the answering affidavit .”
[15] From the facts before the Court, t he spectre of abuse of business rescue
proceedings which have been decried by the courts in several decisions, and the
prejudice to the major creditor loomed large . The revised plan surfaced on the eve
of the hearing of the liquidation application. Nedbank anticipated Mr Tayob
would seek a postponement to further delay the hearing of the liquidation
application . At the time of the hearing , he had “threatened to challenge ” the
rejection of the plan. I did not understand that the application had been launched .
He was r equired to do so within 5 days of the rejection of the plan .
[16] Significantly for the court , despite the request to investigate the issue the
cession of book debts and the payment of monies due to Nedbank in respect
thereof, Mr Tayob failed to collect monies due . He had no answer to this failure.
It was suggested during argument that Nedbank’s debt had been reduced. This too
is not based on the true reason for the reduction of the debt owing . Nedbank
exercised its rights to the security separately. The reduction of the debt did not
flow from Mr Tayob’s impartial and independent conduct of rescue proceedings
expected of him under the Act.
[17] Accordingly, the discretion to admit the supplementary affidavit was
judicially exercised in the circumstances. As will be apparent below, any
prejudice that the applicants would likely suffer was ameliorated by the import of
the orders granted.
[18] The applicants attack the Court’s conclusion that Nedbank would have
been entitled to the order under section 130(1) (a)(iii) of the Companies Act for a
procedural irregularity . Further they say the Court ought to have found there is a
reasonable prospect of rescuing Sana Developers based on the unilaterally revised
business rescue plan. They say the Court erred in proceeding with the liquidation
application “during the adjourned period contemplated by section 153(2)(a) ”, on
the same day that the business rescue practitioner “had announced the intention ”
to seek a court order to set aside the applicant's vote .
[16] The complaints lack merit . The procedural irregularity in Ms Warren’s
affidavit , supported by correspondence , catalogued the complaint but was not
challenged or disputed . In any event, section 130(1) (a)(iii) was not the sole basis
for reaching the conclusion that Nedbank would be entitle d to an order setting
aside the resolution initiating business rescue and terminating the proceedings .
[17] Here , Nedbank’s liquidation application was launched some months before
the belated unauthorised attempts to revise the business rescue plan. An
announcement of an intention to challenge a vote against the plan is of no
mome nt. Section 153(2 )(a) does not provide an additional moratorium to a rescue
practitioner. It does not a bar an aggrieved affected person from instituting
liquidation proceedings .
[18] I must add that w hen asked about the fate of the challenge to the rejection
of the plan during the hearing of th is appeal, it was clear to the court that there
have been no steps to prosecute it expeditiously .
[19] I turn to whether I should grant leave to appeal . The question is whether
the applicants would have a reasonable prospect of success on appeal. As put to
Counsel for the applicants, I must be satisfied that the decision in respect of which
leave to appeal is sought is appealable. The often cited test in Zweni v Minister of
Law and Order5 makes it plain that the order appealed against must be:
i. final in effect and not open to alteration by the Court of first instance
ii. definitive of the rights of the parties; and
iii. lastly, have the effect of disposing at least a substantial portion of the relief
claimed in the main proceedings .
[20] I accept that the interests of justice have been infused with the above
considerations .6 Fundamentally, the flexible and pragmatic approach propounded
in Health Professions Council of South Africa and Another v Emergency Medical
Supplies and Training CC t/a EMS7 still applies. As stated in Zweni whether the
appeal will lead to a just and reasonably prompt resolution of the real issue
between the parties is an important factor.
[21] Counsel sought to contend that each of the orders should be construed in
discrete parts. I disagree with this segmentation . In my view the granting of the
provisional order for liquidation is linked inextricable with the finding on the
5 1993 (1) SA 523 (A) .
6 Tshwane City v Afriforum 2016 (6) SA 279 (CC) at para [40].
7 2010 (6) SA 469 (SCA) .
prospect of success in rescuing Sana Developers. The same reasons for granting
the provisional order impact whether Sana Developers can be rescued.
Importantly, the provisional order has not been rendered final or discharged.
[22] In this case, the construction of the judgment and order appealed is
material . The often cited decision in Firestone South Africa (Pty) Ltd v Genticuro8
makes it plain that:
“The basic principles applicable to construing documents also apply to the construction of a
court's judgment or order: the court’s intention is to be ascertained primarily from the language
of the judgment or order as construed according to the usual, well -known rules …
Thus, as in the case of a document, the judgment or order and the court's reasons for giving it
must be read as a whole in order to ascertain its intention. If, on such a reading, the meaning
of the judgment or order is clear and unambiguous, no extrinsic fact or evidence is admissible
to contradict, vary, qualify, or supplement it. ”
[23] Although Nedbank sought a final order for liquidation , the Court granted a
provisional order for liquidation to safeguard the interests of all affected persons
including the applicants. Notwithstanding the conduct which is not in keeping
with the objects of business rescue and flagrant disregard of the requirements, the
Court in its Judgment states the f ollowing:
“I am minded that Professors Patrick O'B rien and Juanitta Calitz express the view that the
requirement of a reasonable prospect for rescuing the company is a continuous one that applies
to business rescue from birth to death." By implication Mr Tayob can present facts pointing to
the availability of post commencement finance to answer Nedbank's supplementary affidavit .
Pending that, and without pronouncing on the correctness of the application, under section 153,
or the right of an affected person to bring the business rescue proceedings, that right is not a
bar to the provisional order Nedbank seeks as a security holder nor a legitimate basis for a
postponement of this application .” [ emphasis added]
8 1977 (4) SA 298 (A) at 304 para D -F.
[24] Accordingly, a final word has not been spoken on the fate of Sana
Develop ers. The applicants were not left remediless or prejudice d by the orders .
The Court avail ed them the opportunity to answer the supplementary affidavit
and present any new information before the Court to dispel and rebut the prima
facie view forming the basis for the provisional liquidation order.
[25] In the parlance in Zweni , a leave to appeal will not result if it will not lead
to “a just and reasonably prompt resolution of the real issue between the parties .”
Here, leave to appeal will not dispose of all the issue between the parties. The
court order is not final and definitive of the rights of the applicants . It could hardly
be in the interest of justice to grant the leave to appeal in this case .
[26] In the result, I make the following order
a. The Application for leave to appeal is dismissed .
b. The applicants are ordered to pay the costs of the application jointly and
severally at Scale C .
___ ____
NTY SIWENDU
JUDGE OF THE HIGH COURT
JOHANNESBURG
This Judgment is handed down electronically by circulation to the Plaintiff’s Legal
Representative and the Defendant by email, publication on Case Lines. The date for the handing
down is deemed 10 February 2025
Date of appearance: 29 January 2025
Date Judgment delivered: 10 February 2025
Appearances:
For the Applicant s: Advocate Mathopo
Instructed by: Mayet Attorneys Inc
For the Respondent: Advocate De Oliveira
Instructed by: KWA Attorneys