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[2025] ZAMPMBHC 31
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Janson v Ebundu (Pty) Ltd (In Business Rescue) and Others (5767/2023) [2025] ZAMPMBHC 31 (30 April 2025)
IN
THE HIGH COURT OF SOUTH AFRICA, MPUMALANGA DIVISION,
(MBOMBELA MAIN SEAT)
Case No.: 5767/2023
(1)
REPORTABLE: YES
(2)
OF INTEREST TO OTHER JUDGES: YES
(3)
REVISED YES/NO
DATE
30 April 2025
SIGNATURE
In
the application between:
WILLEM
CONSTANTYN JANSON
APPLICANT
and
EBUNDU
(PTY) LTD (IN BUSINESS RESCUE)
FIRST RESPONDENT
Registration
Number: 2016/195834/07
PHAHLANI
LINCOLN MKHOMBO N.O.
SECOND RESPONDENT
NTOMBIZODWA
KATLEGO TSHABALALA
THIRD RESPONDENT
ALBERT
SIBUSISO TSHABALALA
FOURTH RESPONDENT
THE
COMPANIES AND INTELLECTUAL
FIFTH RESPONDENT
COMMISSION
OF SOUTH AFRICA
INDUSTRIAL
DEVELOPMENT CORPORATION
SIXTH RESPONDENT
OF
SOUTH AFRICA LIMITED
INTERESTED
AND AFFECTED PARTIES:
SEVENTH RESPONDENT
LIST
“A”
JUDGMENT
FOURIE AJ
INTRODUCTION:
[1]
The Applicant, a 33.3% shareholder in the First Respondent, makes
application
to this Court and seeks an order, as per his Notice of
Motion, in the following terms:
[1.1.]
That consent be granted in terms of Section 133(1)(b) of the
Companies Act,
71 of 2008 (“The Act”) to proceed with the
current application against the First Respondent.
[1.2.]
Declaring that the Applicant has a secured claim of R 8 000 000.00
against the First Respondent
[1.3.]
That the resolution of 6 October 2023 accepting the business rescue
plan
be set aside.
[1.4.]
That the meeting of creditors of the First Respondent held on 6
October 2023
be set aside.
[1.5.]
Declaring that the business rescue of the First Respondent has
lapsed.
[1.6.]
That the appointment of the Second Respondent as the business rescue
practitioner
of the First Respondent be set aside.
[1.7.]
Declaring that the appointment of the Second Respondent has lapsed.
[1.8.]
That the Court Order dated 26 October 2022 be set aside.
[1.9.]
That the business rescue of the First Respondent be set aside.
[1.10.]
Placing the First Respondent under final winding up in the hands of
the Master on the grounds that
the First Respondent is unable to pay
its debt, alternatively that its liabilities exceed its assets and
further alternatively
that it would be just and equitable if the
First Respondent is to be wound up.
[1.11.]
Prayers 11 to 14 of the Notice of Motion, seemingly on the same
grounds as Prayer 10, seek as an
alternative that the First
Respondent be placed under provisional liquidation.
[1.12.]
That the costs of the application be costs in the administration of
the winding up of the First
Respondent.
[1.13.]
Further and/or alternative relief.
[2]
The First and Second Respondents grouped together opposed the
application, and
similarly, the Third and Fourth Respondents, grouped
together, opposed the application.
[3]
The respective Respondents seek that the application be dismissed
with costs.
[4]
The Fifth Respondent did not oppose the application, and the Sixth
Respondent
filed a Notice to Abide.
PRELIMINARY
ISSUES:
[5]
At the hearing of the matter, and before the Court was requested to
adjudicate
upon the merits thereof, two preliminary issues needed to
be dealt with:
[4.1.]
The Third and Fourth Respondents’ application
for condonation
for the late filing of the Rule 6(5)(d)(iii) Notice.
[4.1.1.]
The Third and Fourth Respondents have filed a comprehensive
condonation application seeking condonation for the late filing of
their Notice to Oppose the application as well as for the filing
of
their Rule 6(5)(d)(iii) Notice.
[4.1.2.]
The Application remained unopposed as at the hearing of the
matter.
[4.1.3.]
The Court evaluated the application and at the onset of the
hearing
of the matter ordered that condonation for the late filing of the
Third and Fourth Respondent’s Notice of Intention
to Oppose and
its Rule 6(5)(d)(iii) Notice was granted with no order as to costs in
respect of that specific application.
[4.2.]
The late filing of the First and Second Respondents’
Answering
Affidavit.
[4.2.1.]
On 11 December 2023 the current application was brought and served on
the respective
Respondents shortly thereafter.
[4.2.2.]
On 10 January 2024 the First and Second Respondents filed a Notice to
Oppose
the current application.
[4.2.3.]
On 1 March 2024 and outside of the time allowed for same by the
Uniform Rules
of Court, the First and Second Respondents filed an
Answering Affidavit.
[4.2.4.]
Although the Answering Affidavit was filed out of time, the First and
Second
Respondents made no attempt to make either a separate
application in terms of Rule 27 of the Uniform Rules of Court nor to
address
the late filing of the Answering Affidavit in their papers
seeking condonation for the late filing thereof.
[4.2.5.]
On 15 March 2024 the Applicant filed a Conditional Replying
Affidavit, such Conditional
Replying Affidavit being filed on
condition that the court accepts the Answering Affidavit of the First
and Second Respondents.
[4.2.6.]
The matter was ultimately heard on 15 April 2025.
[4.2.7.]
The Applicant, on several occasions raised the issue of the late
filing of the
Answering Affidavit of the First and Second Respondent
as is evident from the record provided to Court. The Applicant
extensively
dealt with this issue in its Conditional Replying
Affidavit and further dedicated a considerable amount of time
addressing the
non-compliance of the First and Second Respondents in
the Applicant’s Heads of Argument.
[4.2.8.]
If, for whatever reason, the First and Second Respondents after
receiving the
Conditional Replying Affidavit, believed that, due to a
lapsation of time their Answering Affidavit would merely be accepted
by
the Applicant, the Applicant’s position in respect of their
non-compliance was made clear when the Applicant’s Heads
of
Argument were filed.
[4.2.9.]
Despite being made aware of the objections raised by the Applicant,
the First
and Second Respondents took absolutely no action in respect
of the late filing of their Answering Affidavit.
[4.2.10.]
Not only would it have been necessary for the First and Second
Respondents to address the late filing
of their Answering Affidavit
and to seek condonation for the late filing of thereof simultaneous
with the late filing of their
Answering Affidavit, the First and
Second Respondents could not be prejudiced by filing, in the
considerable time they had since
the filing of their Answering
Affidavit up until the hearing of the matter, a comprehensive
application seeking condonation for
the late filing of their papers.
[6]
The fact that the First and Second Respondents throughout the
proceedings remained
totally silent on the late filing of their
papers is to be frowned upon by this Court.
[7]
The aspect of the late filing of their papers is not even addressed
at all in
their Heads of Argument.
[8]
The First and Second Respondents not only failed to address their
non-compliance
but similarly failed to address their passive approach
towards seeking condonation when the matter was ultimately heard.
[9]
The Court has taken notice of the fact that the Applicant did not
invoke the
provisions of Rule 30A of the Uniform Rules of Court to
seek compliance by the First and Second Respondents. The Court
has
further evaluated the matter, and can it not be seriously
contended by the Applicant that they had suffered any prejudice
either
in the presentation of their case or the preparation thereof
due to the non-compliance by the First and Second Respondents.
[10]
I say so, resultant from the fact that the Applicant was able to
draft and file a Replying Affidavit,
albeit conditional, more than a
year prior to the hearing of the matter.
[11]
Irrespective however of the fact that the late fling of the First and
Second Respondents’ Answering
Affidavit might not have had any
practical effect on the hearing of the matter, the Court addressed
during the hearing of the matter
with the First and Second
Respondents’ legal representative, Adv Moloi, the fact that
their non-compliance followed by the
absolute silence in the respect
of condonation was not only a flagrant disregard of the Rules of
Court but cannot be seen in any
other way than disrespectful towards
the Applicant and more importantly so the Court.
[12]
Whilst the Court understands that it ought not take a formalistic
approach in litigious matters and
the Court needs to understand that,
under appropriate circumstances, given the fact that hearing dates,
unfortunately so, are obtained
for opposed motions and trials, more
than a year after same has been applied for, strict compliance with
the Rules of Court cannot
be emphasised enough. The rules have
been enacted for a specific purpose and the Court would not want
litigants to, out of
their own accord and without proper reason
therefor attend to litigious processes however they deem fit without
proper reason or
the leave of the Court. The structured manner
in which pleadings are exchanged between parties forms one of the
cornerstones
that protect the legal profession from absolute chaos.
It would be a very sad day if Courts get to the point where the
non-observance
of Rules is, without implication, condoned without a
party even making the effort of seeking condonation for such
non-observance
of Court Rules.
[13]
Given the importance of the issues that have been raised by the
respective parties in the current matter
and the importance of the
legal issues not only to the parties before Court but the possibility
of similar litigants being faced
with the same legal conundrum, and
because the Court has found that the actions of the First and Second
Respondents have not prejudiced
the Applicants in either the
presentation or preparation of their case, the Court shall accept the
Answering Affidavit of the First
and Second Respondent.
[14]
The acceptance of the First and Second Respondents’ affidavit
should however, in no way be regarded
as a condonation of the First
and Second Respondents' non-observance of the Court Rules without any
implication.
[15]
The actions of the First and Second Respondents are to be discouraged
in the strongest terms, and as
such, the Court is of the intention of
making an appropriate cost order in this matter, which shall follow
at the end of this judgment.
ISSUES
TO BE DETERMINED:
[16]
Having found as aforesaid on the preliminary issues the Court is
requested, in essence to pronounce
upon the following issues:
[16.1.]
Whether a case has been made out for the upliftment of the moratorium
placed upon the instituting
of legal proceedings against a company in
business rescue as per
Section 133
of the
Companies Act, 71 of 2008
.
[16.2.]
The definition of a creditor in terms of the
Companies Act, 71 of
2008
and whether the Applicant holds the necessary
locus standi
to bring the current application.
[16.3.]
Whether it would be just and equitable for the company, currently in
business rescue, to be
wound up.
WHETHER
A CASE HAS BEEN MADE OUT FOR THE UPLIFTMENT OF THE MORATORIUM PLACED
UPON THE INSTITUTING OF LEGAL PROCEEDINGS AGAINST A
COMPANY IN
BUSINESS RESCUE AS PER
SECTION 133
OF THE
COMPANIES ACT, 71 OF 2008
.
[17]
Section 133(1)(b)
of the
Companies Act, 71 of 2008
states as follows:
“
133. (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)………
(b) with the leave of
the court and in accordance with any terms the court considers
suitable;
(c) ……….
(d) ………
(e) ………”
[18]
The First and Second Respondents, in their Answering Affidavit, take
issue with the fact that no well-motivated
separate application has
been brought by the Applicant to obtain relief in respect of Section
133(1)(b) of the Act. The First
and Second Respondents have
throughout their opposition in their Heads of Argument persisted with
this line of reasoning.
[19]
The understanding by the First and Second Respondents that a separate
application ought to be brought
to first uplift the moratorium on the
institution of legal proceedings against a company in business rescue
and thereafter for
an application such as the current application to
be brought is simply incorrect.
[20]
The proposed
stratagem
of the First and Second Respondents is
not supported by any legal principles and will lead, if so applied,
to a duplication of
issues serving before the Courts.
[21]
As duplication of issues and the proposed
stratagem
of the
First and Second Respondents would lead to unnecessary time delays
which stands opposite to the purpose of both business
rescue
proceedings, as well as, where applicable, liquidation proceedings.
[22]
Specifically, Section 5 of the Act stipulates that the Act must be
interpreted and applied in a manner
that gives effect to the purposes
as set out in Section 7 thereof. Section 7 and specifically
Subsection 7(k) provides that
it is an express purpose of the Act to
provide for the efficient rescue and recovery of financially
distressed companies, in the
manner that balances the rights and
interests of all relevant stakeholders.
[23]
The specific manner in which an application to uplift the moratorium
as per Section 133(1)(b) is to
be brought is yet to be formulated
either by the legislature or by the Courts, as is the test to be
applied by the Court in deciding
whether or not to grant leave in
terms of Section 133(1)(b) of the Act.
[24]
I align myself with
BORICHOWITZ J
in the matter of
ARENDSE
AND OTHERS v VAN DER MERWE N.O. AND ANOTHER
(2015/40324) [2016]
ZAGPJHC 292 where the Court stated as follows:
“
I am unaware of
any judgment, and none has been referred to me, in which the test to
be applied by a Court in deciding whether to
grant leave in terms of
S 133(1)(b) has been formulated. It is authority for the
proposition that a Court being asked for
leave to proceed against
business rescue must receive “a well-motivated application for
that so that it could apply its mind
to the facts and the law if
necessary and then be in a position to make a ruling in accordance
with any terms it may consider suitable
in peculiar circumstances.”
(See Merchant West
Working Capital Solutions (Pty) Ltd v Advanced Technologies &
Engineering Co (Pty) Ltd 2013 JDR 1019 (GSJ)
para 67) and Redpath
Mining SA (Pty) Ltd v Marsdon NO and Others [2013] ZAGPJHC 148, the
same learned Judge held that:
“
Only in
exceptional circumstances may a Court permit litigation against a
business rescue plan or related thereto.”
[25]
It is to be noted that in neither of these cases did the Court lay
down a general test or pronounce
on what constitutes “a
well-motivated application” or define the minimum threshold
that must be met for an Applicant
to obtain such leave.
[26]
From an evaluation of Section 133(1)(b) it is evident that this Court
has a wide discretion “on
any terms the Court considers
suitable” to deal with an application under Section 133(1)(b)
and to grant an order as the
Court deems just.
[27]
It will accordingly be appropriate for a Court to have knowledge of
what a party is of the intention
to achieve by the upliftment of the
moratorium and to evaluate whether sufficient grounds exist that
justify the moratorium to
be lifted. I believe the Court will
not be in any better position to evaluate whether the moratorium
ought to be lifted than
to evaluate all the facts of the matter and
having regard to the ultimate relief the Applicant seeks to achieve.
[28]
I accordingly find that there is no necessity to make a separate
application for the upliftment of
the moratorium as proposed by the
First and Second Respondents. The upliftment of the moratorium is the
first relief the Applicant
seeks in the current application. If
the Applicant fails to make out its case in the papers in respect of
the relief they
seek, the moratorium will not be lifted.
[29]
In the current matter the Applicant needs to prove its
locus
standi
and that it is just an equitable for the company,
currently in business rescue, to be wound up.
If the
Applicant fails on any of these two scores, the Court cannot apply
its discretion for the upliftment of the moratorium.
The
opposite to this is also true in that, if the Applicant proves its
locus standi
and convinces the Court that it would be just and
equitable for the business rescue process to be converted into a
winding-up process
of the company, the Court will have no other
option but to find that it would be just and to apply its discretion
in favour of
the upliftment of the moratorium as prayed for.
THE
DEFINITION OF A CREDITOR IN TERMS OF THE
COMPANIES ACT, 71 OF 2008
AND WHETHER THE APPLICANT HOLDS THE NECESSARY
LOCUS STANDI
TO
BRING THE CURRENT APPLICATION.
[30]
At the start of the hearing, as well as in his Heads of Argument Adv
Rossouw SC for the Applicant indicated
that the Applicant was not
persisting with prayers 5, 6, and 7 of its Notice of Motion, in
essence being the relief sought in respect
of the lapsing of the
business rescue and the lapsing of the appointment of the Second
Respondent. This concession is well
received by the Court under
the circumstances as the relief as initially prayed for is
unsupported by any legal principles.
[31]
The principles pertaining to these conceded issues have been dealt
with by the Courts on many occasions
and given the concession by the
Applicant I do not believe it necessary to traverse them in the
current judgment.
[32]
The Applicant in the current application seeks declaratory relief to
declare that the Applicant has
a secured claim of R 8 000 000.00
(Eight Million Rand) against the First Respondent.
[33]
The Applicant premised the total of his claim on the fact that the
Applicant, on his version, holds
a secured claim of R 8 000 000.00
(Eight Million Rand) which claim was not recognised by the business
rescue practitioner
and accordingly not incorporated in the business
rescue plan of the company at the moment when same was accepted and
approved.
[34]
It was argued by Adv Rossouw SC for the Applicant that the business
rescue practitioner has never regarded
the Applicant as a creditor of
the company and that, not being regarded as a creditor since the
onset of the business rescue process,
the principles enunciated in
the Act, pertaining to business rescue processes, specifically where
they deal with creditors, do
not find application on the Applicant,
resultant from the notion that the Applicant has never been regarded
as a creditor.
[35]
The Applicant further argues that, by not being recognised as a
creditor, the meeting of creditors
held on 6 October 2023 is to be
set aside and that the resolution of 6 October 2023 is similarly to
be set aside.
[36]
Adv Rossouw SC conceded during argument that, if the Court does not
expressly declare that the Applicant
has a secured claim of R
8 000 000.00 (Eight Million Rand) against the First
Respondent, the necessary relief being granted
for the claim of the
Applicant to be instituted against the company in business rescue and
the Court does not set aside the business
rescue plan so accepted on
6 October 2023 the Applicant holds no
locus standi
in the
current matter.
[37]
The parties are
ad idem
that the Applicant’s claim is
disputed.
[38]
Section 145(1) of the Act gives a “creditor” certain
rights.
“
Participation
by creditors 145.
(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.
(2) In
addition to the rights set out in subsection (1), each creditor has—
(a) the
right to vote to amend, approve or reject a proposed business rescue
plan, in the manner contemplated in section
152; and
(b) if
the proposed business rescue plan is rejected, a further right to—
(i)
propose the development of an alternative plan, in the manner
contemplated in section 153; or
(ii)
present an offer to acquire the interests of any or all of the other
creditors in the manner contemplated in section
153.
(3) The
creditors of a company are entitled to form a creditors’
committee, and through that committee are entitled
to be consulted by
the practitioner during the development of the business rescue plan.
(4) In
respect of any decision contemplated in this Chapter that requires
the support of the holders of creditors’
voting interests—
(a) a
secured or unsecured creditor has a voting interest equal to the
value of the amount owed to that creditor by
the company; and
(b) a
concurrent creditor who would be subordinated in a liquidation has a
voting interest, as independently and expertly
appraised and valued
at the request of the practitioner, equal to the amount, if any, that
the creditor could reasonably expect
to receive in such a liquidation
of the company.
(5)
The practitioner of a company must—
(a)
determine whether a creditor is independent for the purposes of this
Chapter;
(b)
request a suitably qualified person to independently and expertly
appraise and value an interest contemplated
in subsection (4)(b); and
(c)
give a written notice of the determination, or appraisal and
valuation, to the person concerned at
least 15 business days before
the date of the meeting to be convened in terms of section 151.
(6) Within five
business days after receiving a notice of a determination
contemplated in subsection (5), a person may apply to
a court to—
(a)
review the practitioner’s determination that the person is, or
is not, an independent creditor; or
(b)
review, re-appraise and re-value that person’s voting interest,
as determined in terms of subsection (5)(b).”
[39]
The legal representatives by the respective parties seemed to agree
that the fact that the term “creditor”
has not been
defined in the Act might lead to some uncertainty and a proposed
lacuna in the law as the Act seemingly fails to indicate
how a party,
not being regarded as a creditor ought to be dealt with.
[40]
I align myself with what
WILLSON J
stated in the matter of
WESTCOAL MINING (PTY) LTD AND ANOTHER v PHAHLANI LINCOLN MKHONBONO
[2023] ZAGPJHC 1097;
2024 (2) SA 563
(GJ) 2 October 2023, where
he stated at paragraph 17 that:
“
Section 128
of
the
Companies Act defines
a number of terms germane to business
rescue proceedings. It does not, however, define the term
“creditor”. I
cannot say why the drafters of the
Companies Act decided
not to define that term. It seems a bit
like passing a law that governs elections without bothering to say
who is entitled
to vote in them. Creditors are “affected
persons” in
Section 128
, but they are lumped together in that
category with other classes of persons such as employees and
shareholders.”
[41]
The Oxford Dictionary defines the word “creditor” as:
“
a person,
company, etc. that somebody owes money to”
[42]
In evaluating whether the Court could come to a definition of the
term “creditor” by deriving
the same from other
legislation, the Court evaluated the
National Credit Act, 34 of
2005
. The
National Credit Act, 34 of 2005
provides definitions
for the terms “credit”, “credit agent”,
“credit bureau”, “credit
agreement”, “credit
facility”, “credit guarantee”, “credit
insurance”, “credit
life insurance”, “credit
provider”, “credit regulator”, “credit
transaction”, “credit
co-operative” but provides no
specific definition of “creditor”.
[43]
If regard is had to the
Insolvency Act, 24 of 1936
, the Act decided
to define the term “debtor” but elected not to define
“creditor”.
[44]
Having regard to the academic definition of “creditor”,
and the surrounding definitions
of the
National Credit Act, 34 of
2005
, and without attempting to propose to the legislature how it
ought to be bound, this Court believes a creditor to mean: a person
or juristic entity to whom a debt is owed and who, therefore, has a
right to claim payment of a sum of money or an obligation due
to him
or them.
[45]
Whether a person or a company is a creditor of another person or
company can never be a discretionary
evaluation. It is a
position premised upon fact. Either a person or a company is a
creditor of another person or company
premised upon certain facts or
he is not.
[46]
Having regard to business rescue proceedings, a creditor does not
become a creditor because he is recognised
as such by the business
rescue practitioner. Whether a business rescue practitioner
recognises the claim of a creditor or
not is a different proposition
altogether, but one that does not detract from the factual position
on whether or not a person is
a creditor or not.
[47]
The Applicant has set out in its founding papers why it seeks this
Court to declare the Applicant to
have a secured claim of R
8 000 000.00 (Eight Million Rand) against the First
Respondent. The grounds upon which the
Applicant relies for the
relief it seeks are not relevant for purposes of the current
judgment, as will be apparent hereinafter.
[48]
Of relevance for the current judgment is the fact that, on
30 June 2023, a list was published by the business rescue
practitioner indicating the
creditors
of the company, further
indicating whether their claims have been accepted by the business
rescue practitioner or rejected.
I emphasise that the list is a
list of
creditors
because same has been identified as such and
annexed to the Applicant’s application as Annexure “WJ9”.
[49]
Irrespective of the Applicant’s understanding of the
terminology of who or what a creditor is,
it cannot be contested
that, on 30 June 2023 the Applicant received knowledge that he formed
part of the list of creditors and
that the business rescue
practitioner did not recognise his claim.
[50]
Whether the business rescue practitioner was correct in not
recognising the Applicant’s claim
when the list of 30 June 2023
was published is at the current junction for this Court irrelevant.
I say so for the following
reason, and that is that on 30 June 2023
the Applicant knew that his claim was not recognised by the business
rescue practitioner
and that he needed to take certain remedial steps
in order to have his claim recognised by the business rescue
practitioner. I
do not believe that the Applicant could harbour under
any other understanding when the initial list of creditors was
published
by the business rescue practitioner than that the business
rescue practitioner would not give any recognition to Applicant’s
claim.
[51]
For the period between 30 June 2023 and 6 October 2023 the Applicant
did not make an application to
Court to interdict the approval of the
business rescue plan whilst the Applicant attempted an application,
similar in nature to
the current application to have his claim
recognised nor did the Applicant on an urgent basis and before the
meeting of creditors
on 6 October 2023 seek the urgent intervention
by this Court to have his claim as creditor recognised.
[52]
The Applicant, knowing of the implications of the business rescue
plan of the company being adopted
would have, ought to have protected
his interests by making any of the aforesaid applications prior to
the meeting of 6 October
2023 at which the business rescue plan was
adopted. I say that the Applicant ought to have known of the
implications of the
business rescue plan being accepted as the
Applicant was at that time legally represented and if the Applicant
personally did not
know of the consequences, then surely his legal
representatives ought to have informed him of such accordingly.
[53]
Section 152(4)
of the Companies states that:
“
A business
rescue plan that has been adopted is binding on the company, and on
each of the creditors of the company and every holder
of the
company’s securities, whether or not such a person—
(a) was present at the
meeting;
(b) voted in
favour of adoption of the plan; or
(c) in the case of
creditors, had proven their claims against the company.”
[54]
The parties are in agreement that the Applicant was present at the
meeting of
6 October 2023 but, resultant from having no voting
right did not actively partake therein.
[55]
The business rescue plan being adopted on 6 October 2023 binds the
Applicant up until and unless set
aside by this court. On 6
October 2023 the Applicant’s own version was that he was a
creditor of the company which
had not proven his claim against the
company.
[56]
If the Applicant wanted to challenge the position and his recognition
as a creditor with a recognised
claim, he ought to have done so
before the business rescue plan was accepted.
[57]
I pause to mention that the Applicant, being present at the meeting,
at the very least, as an affected
person, did not act in terms of
Section 153(2)
seeking the postponement of the meeting in order to
allow the Applicant to make any sort of application to have his claim
recognised.
[58]
Section 154(2) of the Act states that:
“
(2) If a
business rescue plan has been approved and implemented in accordance
with this Chapter, a creditor is not entitled to enforce
any debt
owed by the company immediately before the beginning of the business
rescue process, except to the extent provided for
in the business
rescue plan.”
[59]
In the current matter the business rescue plan allows for a dispute
resolution mechanism that deals
with how any relevant parties to the
business rescue are to attend to disputes that exist on claims,
quantum of claims, securities
claimed by a creditor, or surrounding
aspects. Save for the aforesaid, Section 154(2) of the Act
finds application, and a
creditor whose claim was not recognised at
the adoption of the business rescue plan would have no right to claim
against the company
at a later stage.
[60]
Read together with the binding nature of a business rescue plan as
per Section 152(4) of the Act, the
Applicant knew alternatively
reasonably ought to have foreseen, that the recognition of his claim
before the adoption of the business
rescue plan was an absolute
necessity, alternatively he could only proceed thereafter in terms of
the mechanism provided to him
as laid out in the business rescue plan
itself.
[61]
The position at the time remained unchallenged, by way of any formal
litigious process, when the resolution
of 6 October 2023 and the
meeting of creditors of 6 October 2023 that was properly constituted,
giving effect to the business rescue
plan that was adopted on that
date was so adopted.
[62]
Having found that the business rescue plan was validly adopted and
that same binds the Applicant, the
Applicant, if it wanted to dispute
the non-recognition of its claim or any aspects relating thereto
needed to act in line with
the dispute resolution clause of the
business rescue plan. I could find no proof that the Applicant
proceeded in line with
the dispute resolution mechanism as offered in
the business rescue plan and the Applicant went as far as to state
that it does
not regard itself to be bound by the business rescue
plan and the dispute resolution clause embedded therein. For
all the
reasons previously stated, the view of the Applicant in this
regard is simply incorrect.
[63]
The current application brought at the time when it is so brought is
neither brought at an opportune
time, being prior to the business
rescue plan being adopted nor is it brought for the purpose of being
recognised as a creditor
to have his claim paid by the business
rescue practitioner. I say so as a result of the relief the
Applicant seeks.
The Applicant has seemingly adopted the
approach that his claim will not find favour with the business rescue
practitioner and
that, if the Applicant is able to persuade the Court
that the company ought to be converted from a position of business
rescue
to being wound up, then the Applicant might find favour in
pressing home its claim with the liquidator of the company.
[64]
The position might have been significantly different if the Applicant
was not informed of or part of
the decision making nor being aware of
the proposed business rescue plan or the dates for the meeting upon
which same would be
adopted in which event the Court might have found
it necessary to embark upon a more lenient approach towards the
Applicant in
order to establish whether justice would dictate the
Court applying its discretion in the lifting of the moratorium and
the entertaining
of the Applicant’s claim.
[65]
In the current application I am not persuaded that the Applicant has
made out a proper case for the
Court to apply its discretion in
favour of that which the Applicant seeks. The current matter is
rather one where the Applicant
has failed to timeously take the
necessary steps to protect its own interest, and upon realising that
he holds no available remedy
to enforce his claim, seeks the
upliftment of the moratorium in order for the business rescue process
to be converted into a winding
up process.
[66]
Given the drastic implications on the other affected parties of the
company the Court does not believe
it to be an appropriate order to
have the company wound up to have the Applicant’s recognised,
which is in essence what the
Applicant seeks herein.
WHETHER
IT WOULD BE JUST AND EQUITABLE FOR THE COMPANY, CURRENTLY IN BUSINESS
RESCUE, TO BE WOUND UP.
[67]
Having found the aforesaid it necessarily follows that the Applicant
has failed to prove the existence
of a recognised claim against the
company in business rescue. As such and resultant from the fact that
the Applicant is barred
from enforcing any claim against the company
in business rescue in the absence of having obtained relief from
Court to do so, the
Court cannot find, as is sought by the Applicant
that the company in business rescue is unable to pay its debts
premised upon a
claim of the Applicant remaining unsatisfied.
[68]
Having been vested with the matter the Court evaluated the total of
the facts presented to me to ensure
that it would not be otherwise
just and equitable if the company is wound up.
[69]
I can find no reason why the Court needs to, on the information
provided to me, change the
status
quo
on the just and
equitable principle to order that the company ought to be converted
from that of being one in business rescue to
that of being one in
liquidation.
[70]
I wish to point out that, even if the Applicant managed to persuade
the Court on all the aspects which
the Court has already found the
Applicant has failed to do, the Applicant would have failed in
seeking the winding up of the company
due to non-compliance with the
provisions of Section 346(4A)(b) of the Act.
[71]
At the hearing of the matter Adv Rossouw SC on behalf of the
Applicant conceded that there has been
non-compliance with Section
346(4A)(b) of the Act.
[72]
In respect of Section 346(4) of the Act, being the old Act,
compliance is peremptory.
[73]
At the hearing of the matter the Applicant tried to explain that an
affidavit titled a Service Affidavit
was indeed filed. It was
conceded however, rightfully so, that the Affidavit did not comply
with the provision of Section
346(4) of the Act.
[74]
The provision of Section 346(4A)(b) of the Companies Act, 1973 is
applicable by virtue of the provisions
of Item 9 of Schedule 5 of the
Companies Act, 2008
.
[75]
The relevant provision states that:
“
(4A) (a) When
an application is presented to the court in terms of this section,
the applicant must furnish a copy of the application-
(i)
to every registered trade union that, as far as the applicant
can reasonably ascertain, represents any of the employees of the
company;
and
(ii)
to the employees themselves-
(aa) by affixing a
copy of the application to any notice board to which the applicant
and the employees have access inside the premises
of the company; or
Page 11 of 55 Prepared by:
(bb) if there is no
access to the premises by the applicant and the employees, by
affixing a copy of the application to the front
gate of the premises,
where applicable, failing which to the front door of the premises
from which the company conducted any business
at the time of the
application;
(iii)
to the South African Revenue Service; and
(iv)
to the company, unless the application is made by the company,
or the court, at its discretion, dispenses with the furnishing of
a
copy where the court is satisfied that it would be in the interests
of the company or of the creditors to dispense with it.
(b)
The applicant must, before or during the hearing, file an affidavit
by the person who furnished
a copy of the application which sets out
the manner in which paragraph (a) was complied with.”
[76]
Specifically, in as far as it relates to service on the employees of
the company, the Applicant fell
well short of what would have been
necessary to prove compliance with the relevant statutory provision.
[77]
I am fortified in my opinion by following the reasoning of the Court
in the matter of
PILOT FREIGHT (PTY) LTD v VON LANDSBERG TRADING
(PTY) LTD
(13/5839) [2014] ZAGPJHC
2003; 2015 (2) SA 55(GJ)
(25
July 2014) the principles of which have now become trite and have
constantly been applied.
[78]
The current matter was not one brought as an urgent application and
there simply exists no reason why
the Applicant could not be kept to
strict compliance with the statutory provisions of the Act to prove
that service was properly
affected.
[79]
The Court will not merely as a “fallback position” grant
a provisional winding up order
because the Applicant has failed to
have its house in order when the application was heard initially.
When a Court
makes an order that affects the status of a company it
affects the rights of all the affected persons of such of company
also.
In the current application, it would have had enormous
ramifications on all affected parties if the Court extended its
discretion
in favour of the Applicant to uplift the moratorium, to
recognise the Applicant’s claim and to convert the business
rescue
process into that of liquidation. To do so under
circumstances where the Applicant’s house was not in order to
ensure
compliance with the Act would simply not make any sense. If
the Applicant were to be afforded the right of a provisional winding
up order to allow the Applicant to get its house in order in respect
of statutory compliance when the non-compliance was neither
addressed
or applied to be condoned, it would not be proper. The ordering
of a provisional order would not only have delayed
the finalisation
of the matter but would have adversely affected the rights of all the
affected parties.
[80]
I hold no doubt that a Court may under certain circumstances condone
non-compliance with the statutory
provision of Section 346(4A)(b)
when the facts of the matter deserve such non-compliance to be
condoned, under which circumstances
it might then be appropriate for
the Court to safeguard the interest of an Applicant by ordering the
provisional winding up of
a company whilst affording protection to
affected parties ordering compliance with the Act before a final
winding up order would
be issued. This is however to be
regarded as the exception to the rule and not the standard to be
applied. When parties,
such as in the current mater had more
than a year to ensure that their papers were properly before Court
and similarly had the
same amount of time to ensure compliance with
each and every aspect which would have been necessary to obtain the
relief they seek,
the Court cannot be expected to grant the
application as a provisional order when their non-compliance is
pointed out by the Court
at the hearing of the matter.
[81]
The non-compliance of the Applicant with the statutory provisions
undermines his own case.
COSTS:
[82]
Ordinarily, the cost of an application ought to follow its result.
[83]
The current application, at least in part, is one that is deserving
of this Court showing its displeasure
with the manner in which a
litigant has conducted himself during the litigious process by
deviating from the norm.
[84]
In coming to the conclusion the Court is doing, the Applicant as the
unsuccessful litigant would ordinarily
be liable to pay the costs of
suit of the First and Second Respondents as well as the Third and
Fourth Respondents.
[85]
Insofar as it relates to the Third and Fourth Respondents, the Court
is satisfied that the Applicant
should pay their costs on a party and
party Scale B. The legal points raised by the Third and Fourth
Respondents have disposed
of the Applicant’s application, and
even if a disregard was to be had of the First and Second
Respondents' Answering Affidavit,
the Applicant would not have
succeeded with the relief it sought in the Notice of Motion.
[86]
Insofar as it relates to the First and Second Respondents, I have
already indicated the Court’s
displeasure and frustration with
the manner in which they dealt with the litigious process. Adv
Moloi, acting for the First
and Second Respondents correctly conceded
that the Court, if the Court allows the Answering Affidavit of the
First and Second Respondents
may make an appropriate order as to
costs which the Court is herewith doing. It would be unfair if the
Court orders the Applicant
to pay the costs of the First and Second
Respondents under these circumstances and as such, insofar as it
relates to the First
and Second Respondents, I do not intend making
any cost order.
[87]
The First and Second Respondents shall accordingly be responsible for
paying their own costs.
CONCLUSION:
[88]
The Applicant has failed to succeed in convincing the Court that the
moratorium against the institution
of legal proceedings against a
company in business rescue ought to be lifted for all the reasons as
stated
supra
. The Applicant has failed to succeed in respect
of each of its underlying prayers sought in its Notice of Motion that
would lead
the Court to find in favour of the upliftment of the
moratorium to substantiate the ultimate relief the Applicant sought
which
was to convert the business rescue process into that of a
liquidation process.
ORDER:
[89]
In the premises, the following Order is made:
1.
The application is dismissed.
2.
The Applicant is to pay the Third and Fourth Respondents’ costs
on a party and party Scale, B.
3.
The First and Second Respondents are ordered to pay their own costs,
and no cost order is made against
the Applicant insofar as it relates
to the costs of the First and Second Respondents.
HF
FOURIE AJ
ACTING
JUDGE OF HIGH COURT, MBOMBELA
Counsel for the
Applicant:
Adv A Rossouw SC
Instructed by:
JACO ROOS
ATTORNEYS
C/O WDT
ATTORNEYS
Counsel
for the First and
Second Respondents:
Adv T Moloi
Instructed by:
RAMS ATTORNEYS
C/O DU TOIT
SMUTS & PARTNERS
Counsel
for the Third and
Fourth Respondents:
Adv De Leeuw
Instructed by:
BARNARD INC
ATTORNEYS
C/O VZLR
ATTORNEYS
Judgment reserved
on:
15 April 2025
Date of delivery:
30 April 2025