IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, MAKHANDA)
Not reportable
CASE NO. 2818/2024
In the matter between:
S P LENONG CIVIL GROUP 8 (PTY) LTD
Registration number: 2013/159279/07 Applicant
And
ABSA BANK LIMITED First respondent
NEW BIGINNINGS PROJECTS CC
Registration number: 2005/022765/23
(Under provisional liquidation) Second respondent
OTTIE ANTON NOORDMAN N.O. Third respondent
SHUAIB MAHOMED N.O. Fourth respondent
CHARLES PHIRI N.O.
(In his capacity as voluntarily appointed
business rescue practitioner of
New Biginnings Projects CC) Fifth respondent
2
THE COMPANIES AND INTELLECTUAL
PROPERTY COMMISSION OF SOUTH AFRICA Sixth respondent
MASTER OF THE HIGH COURT Seventh respondent
ALL AFFECTED PERSONS Eighth respondent
______________________________________________________________________
JUDGMENT
______________________________________________________________________
LAING J
[1] This is an application that was brought on an urgent basis for the setting aside of
a previous order that, inter alia , placed the second respondent (‘New Biginnings’) under
provisional liquidation. In that regard, the first respondent (‘ABSA’) , as a major creditor,
had applied not only for the provisional winding up of New Biginnings but also the
setting aside of a resolution adopted by the close corporation to place itself under
voluntary business rescue and supervision. A summary of the parties’ respective cases
appears below.
Applicant’s case
[2] The applicant expressly relies on section 354(1) of the Companies Act 61 of
1973 ,1 which permits a court to stay or set aside winding up proceedings. It aver s that it
is a creditor of New Biginnings because the close corporation owe s it the sum of R
15,529,140 for services provided .
1 Despite the repeal of the Companies Act 61 of 1973 (‘the old Act’) , item 9 (1) to Schedule 5 of the
Companies Act 71 of 2008 (‘the new Act’) provides that Chapter 14 of the old Act continues to apply with
respect to the winding -up and liquidation of companies. Section 354(1) of the old Act is in Chapter 14.
3
[3] The basis of the applicant’s challenge is that it was never notified of ABSA’s
application. The bank merely emailed the papers to the applicant’s erstwhile attorneys,
Dlabantu & Associates , wh o did not represent the applicant at the time and never
brought the bank’s application to the applicant’s attention. Consequently, ABSA failed to
notify the applicant, as a creditor or a n affected person ,2 of its intention to apply for the
setting aside of New Biginnings’ resolution to place itself under business rescue, and for
the provisional winding up of the close corporation.
[4] Dealing with the exceptional circumstances that warranted the relief sought, the
applicant averred that the fifth respondent , Mr Charles Phiri , had been the previous
business rescue practitioner. He resigned , alleged the applicant, on 31 May 2024 ;
subsequently, his duties were taken over by Adv GCM Masemola and Mr Thomas
Samons , but the sixth respondent (‘CIPC ’) allegedly failed to record the ir appointment s.
By the time that ABSA instituted its application on 3 July 2024 , New Biginnings was
unrepresented.
[5] The applicant’s managing director, Ms Bongiwe Mbangula, stated that New
Biginnings had secured several contracts after having been placed under business
rescue . The applicant was and remained prepared to provide funding and to make
available its machinery to the close corporation so that the contracts could be
implemented . It had sufficient resources to complete any large construction project. Ms
Mbangula s aid that the two entities had enjoyed a lengthy working relationship and had
successfully collaborated previously. This had continued after the commencement of
business rescue proceedings . She listed the various contracts secured by New
Biginnings , but admitted that the implementation of many of them was subject to the
outcome of the winding up proceedings. If the previous order was set aside, then the
close corporation would, with the applicant’s assistance, be able to undertake the work
required and to secure additional contracts .
2 For purposes of Chapter 6 of the new Act, dea ling with business rescues proceedings, section 128(1)
defines an affected person as, inter alia , a shareholder or a creditor of a company that forms the subject
of a business rescue.
4
[6] Addressing its opposition to the winding up proceedings , the applicant contended
that the erstwhile business rescue practitioner’s failure to fulfil his duties did not mean
that business resc ue was not a viable option for New Biginnings . Existing contracts and
the close corporation’s claim against the Free State provincial government had to be
considered.
[7] Ms Mbangula concluded by dealing with the question of urgen cy. She pointed out
that the close corporation was placed under provisional liquidation on 27 August 2024 ,
but the first time that she became aware of the order to that effect was on 17 October
2024. Upon her instruction, t he applicant’s attorneys investigate d the matter and
commenced with the preparation of the present application. The papers had to be
amended after t he appointment of provisional liquidators on 25 October 2024 , which
only came to Ms Mbangula’s attention on 29 October 2024. The application was
launched on 14 November 2024.
ABSA’s case
[8] In its answering affidavit, ABSA challenged at the outset the alleged urgency of
the matter , observing that it had taken the applicant almost a month to institute
proceedings from the date upon which it first became aware of the order. There was no
proper explanation on the papers for the delay. In contrast, ABSA was afforded five
court days within which to deal with the application and deliver its answering affidavit.
[9] The bank contended that the undisputed fact was that New Biginnings was
‘hopelessly insolvent’ , with its liabilities exceeding its assets by at least R 145,000,000.
The deponent to the answering affidavit, Mr Gerrit Gouws,3 referred to his allegations in
relation to the winding up proceedings and asserted that these remained undisturbed by
any of the admissible evidence presented by the applicant in the present matter. He
3 Mr Gouws described himself as being employed by ABSA as a Specialist B usiness Rescue Manager:
Relationship Banking Recoveries .
5
went on to argue that the applicant’s reliance on section 354(1) of the old Act did not
assist . This was because the provisions dealt exclusively with the winding up of
companies , but not business rescue and supervi sion, which were only addressed under
the new Act. The distinction was fatal to the present application. Furthermore, argued
Mr Gouws , the jurisdictional requirements for reliance on section 354(1) remained
unsatisfied.
[10] Turning directly to the applicant’s submissions, ABSA pointed out that the alleged
value of the contracts secured by New Biginnings had to be distinguished from their
expected profitability . What amount could be anticipated for distribution to creditors, if
the close corporation was placed under business rescue , was simply never disclosed.
The alleged value of the contracts also suggested that they would take a considerable
period to complete, but the bank was no longer prepared to wait . Mr Gouws also
indicated that New Biginnings could only implement the contracts if it had a valid tax
clearance certificate; considering its indebtedness to SARS in the amount of R
74,444,000 , this was highly improbable. ABSA pointed out, too, that the contracts
allegedly secured by the close corporation were of the nature that often attracted costly
and protracted litigation .
[11] ABSA also contended that Ms Mbangula had failed to substantiate her assertion
that the applicant had sufficient resources to tackle, successfully, any major construction
project. There was no information about the scope of works for the contracts in question
or the status of the applicant’s finances to cope with the cash flow requirements . Many
of the contracts , remarked the bank, had yet to materialise.
[12] The appointment of an alternative business rescue practitioner, as suggested by
the applicant, would not assist ; it would not, argued the bank, extricate New Biginnings
from the dire financial straits in which it found itself. Such an appointment would further
delay an already protracted business rescue and the practitioner’s fees would ,
moreover, ultimately be borne by the close corporation’s creditors.
6
[13] In relation to ABSA’ s alleged failure to give notification to the applicant of the
winding up proceedings, Mr Gouws indicated that Dlabantu & Associates had indicated
in correspondence dated 19 September 2023 and 31 October 202 3 that they were the
applicant’s attorneys of record. There was no suggestion that the scope of the ir
mandate was restricted . There was also no information about when the ir mandate was
terminated and whether this was ever conveyed to the bank (which Mr Gouws denies ).
There was, moreover, no supporting or confirmatory affidavit from any representative of
Dlabantu & Associates. It was, argued the bank, improbable that the letter sent to all
affected persons by the business rescue practitioner, Mr Phiri, alerting the recipients to
ABSA’s commencement of winding up proceedings, did not come to the attention of the
applicant.
[14] Dealing with the applicant’s assertion that Mr Phiri had previously resigned ,
ABSA referr ed to his notice to abide regarding the winding up proceedings , various
CIPC records and Lexis WinDeed searches , correspondence sent on 2 and 15 August
2024 in terms of which he confirmed his role as business rescue practitioner , as well as
correspondence to that effect from his attorneys to Adv Masemola. All of this
contradicted the applicant’s assertion.
Issues to be decided
[15] The applicant delivered no rep ly to ABSA’s answering affidavit. Consequently, the
issues can be distilled to the following: (a) whether there was sufficient urgency to
warrant a departure from the timeframes set out in rule 6 of the Uniform Rules of Court
(‘URC’) ; (b) if not, then whether the application should be dismissed for lack of merit,
rather than simply be struck from the roll.
[16] A brief overview of the relevant principles follows.
Legal framework
7
[17] The applicant centres its case on section 354(1) of the old Act . For ease of
reference , the entire section is set out below :
‘354. Court may stay or set aside winding -up.–(1) The Court may at any time
after the commencement of a winding -up, on the applicat ion of any liquidator ,
creditor or member, and on proof to the satisfaction of the Court that all
proceedings in relation to the windin g-up ought to be stayed or set aside , make
an order staying or setting aside the proceedings or for the continuance of any
voluntary winding -up on such terms and conditions as the Court may deem fit.
(2) The Court may, as to all matters relating to a winding -up, have regard to
the wishes of the creditors or members as proved to it by any sufficient evidence.’
[18] In Ward and another v Smit and others, In re: Gurr v Zambia Airways Corporation
Ltd,4 the erstwhile Appellate Division observe d, per Scott JA, that :
‘The language of the section [i.e. section 354(1)] is wide enough to afford the
court a discretion to set aside a winding -up order both on the basis that it ought
not to have been granted at all and on the basis that it falls to be set aside by
reason of subsequent events .’5
[19] The court went on to hold that:
‘It follows that an applicant under the section must not only show that there are
special or exceptional circumstances which justify the setting aside of the
winding -up order ; he or she is ordinarily required to furnish, in addition, a
satisfactory explanation for not having opposed the granting of a final order or
appealed against the order. Other relevant considerations would include the
4 [1998] 2 All SA 479 (A).
5 At 484.
8
delay in bringing the application and the extent to which the winding -up had
progressed.’6
[20] More recently, i n Nyhon yha and others v Venter NO and others ,7 Vally J
reiterat ed that the powers of the court were , within the context of section 354(1), very
wide.8 The learned judge went on to hold that:
‘The court is bound to scrutinise the facts very carefully and to exercise its
discretion in a manner that at the very least does not disadvantage any creditor.
The interests of the creditors weigh heavily with the court for after all, once the
company has been provisionally wound up, a concursus creditorum and no
transaction , whether by one or some of the creditors, can be entered into to the
prejudice of the ge neral body of creditors .’9
[21] Mindful of the above, it can be said that section 354(1) provides the court with a
generous discretion in relation to the making of the order contemplated. Furthermore,
the test for the setting aside of winding up proceedings is strict; an order to that effect is
not to be made lightly. A heavy onus rests on the applicant to demonstrate that, inter
alia, it would be in the interests of the general body of creditors that such an order be
made. As a bare minimum, the applicant would have to demonstrate that the order
would not be to the disadvantage of any creditor. This would need to be pr oved on a
balance of probabilities.
[22] In the present matter, the applicant contended that the previous order should n ot
have been granted because it was never properly notified. Stoop conveniently
summarises the general principles in this regard as follows:
6 Ibid.
7 [2021] 2 All SA 507 (GJ).
8 At paragraph [34].
9 At paragraph [35].
9
‘Where an applicant seeks to have a winding -up order set aside on the ground
that the company should never have been liquidated, he or she is subject to
judicial limits similar to those laid down in respect of an application for rescission
of a judgment at common law . An order setting aside a winding -up order on this
ground is an extraordinary form of relief and one that will be granted only in rare
cases. Although the court’s discretionary power to set aside a winding up -order is
not limited to rescission on the common -law grounds, no less is expected of an
applicant than is expected of an applicant who seeks to have a judgment set
aside at common law. Unusual or special or exceptional grounds must exist in
order to justify the setting aside of the order. The court will not rehear the matter
or sit in appeal on the judgment in the winding -up proceedings as regards its
merits. Special and exceptional circumstances which may result in an order
being set aside are, for example, where the company was not in fact unable to
pay its debts , or had made provision for the payment of its debts in full, and
where, in addition, the applicant laboured u nder some excusable disability or
difficulty as regards contesting the winding -up order.’10
[23] The above principles constitute the basic framework within which the present
matter must be determined. This will be done in relation to the issues that are d iscussed
under the paragraphs that follow.
Urgency
[24] The issue of urgency must be addressed at the outset. The applicant ’s reasons
for its departure from the timeframes envisaged under rule 6 of the URC were
essentially that it only became aware of the previous order some seven weeks after it
was granted, that provisional liquidators were appointed shortly afterwards, and that
New Bigi nnings would be unable to trade despite its having secured numerous
contr acts that would have provided the necessary income streams to have remedied its
10 H Stoop (et al), ‘Winding -up’, in LAWSA (part 3, vol 6(3), 3ed , 30 November 2022), at paragraph 77.
Footnotes omitted.
10
de facto insolvency. ABSA, for its part, asserted that any urgency as might have existed
was self -created ; there was, moreover, in sufficient evidence to warrant the applicant’s
reliance on the contracts as the basis for the close corporation’s financial re covery.
[25] In her founding affidavit, Ms Mbangula indicated that the applicant and New
Biginnings had collaborated closely on various construction projects. This had occurred
over several years. The applicant was, moreover, responsible for the implementation of
various projects on behalf of the close corporation in terms of various written or verbal
agreements conclude d between the parties after the commencement of business
rescue. That New Biginnings’ sole member, Mr Patrick Phuti, never communicated to
the applicant its receipt on 5 July 202411 of ABSA’s papers for the commencement of
winding up proceedings or that he waited for some seven weeks after 27 August 202412
before alerting Ms Mbangula to the previous order is improbable . Considering the
degree to which the close corporation depended on the applicant’s cooperation for the
implementation of the contracts in question, it would have been expected that Mr Phuti
would have drawn Ms Mbangula’s attention to such legal developments at the earliest
opportunity. In the absence of any explanatory or even a confirmatory affidavit from Mr
Phuti, the applicant’s assertion that it only became aware of the previous order on 17
October 2024 is difficult to accept .
[26] Leaving that aside, however, it cannot be denied that the applicant failed to
explain, in detail, why it consequently took four weeks to launch the present application.
Ms Mbangula merely asserted , in the vague st of terms, that it had been necessary to
instruct attorneys to investigate the circumstances of the matter, adjust the applicant’s
legal strategy to accommodate the appointment of provisional liquidators, and thereafter
prepare and serve papers. No indication whatsoever was made of why this had taken
as long as it did.
11 The date appears from the service affidavit of ABSA’s local attorney, Mr Jacobus Coetzee, dated 23
August 2024 and attached to the bank’s papers in the winding up proceedings, as well as the sherif f’s
return of service in that regard.
12 This was the date upon which the previous order was granted .
11
[27] In Caledon Street Restaurants CC v D’ Aviera ,13 Kroon J observed, within the
context of the inappropriate use of rule 6 of the URC , that:
‘…the temptation is to brush the wrong handling of the matter and the applicant’s
presentation thereof as urgent beyond what was justified, under the mat. The
papers had to be read to adjudicate the argument about urgency and it could
come across as such a waste not to decide the merits. A refusal to do so wou ld
entail all the work having to be done de novo . The temptation is enhanced by the
circumstance that an appropriate order for costs against the applicant can be
resorted to… However, the attractiveness of finally disposing of the litigation
should not be allowed to govern. The approach should rather be that there are
times where, by way of non -suiting an applicant, the point must clearly be made
that the rules should be obeyed and that the interest of the other party and his
lawyers should be accorded p roper respect, and the matter must be looked at to
consider whether the case is such a time or not.’14
[28] The court enjoys a discretion, under rule 6(12), to dispose of a matter in such
manner and in accordance with such procedure as it deems fit. The proced ure adopted
must be, as far as practicable, in accordance with the URC. In Caledon , Kroon J made it
clear that if a deviation from the URC was to be permitted then the extent thereof will
depend on the circumstances of the case. The applicant or his or her legal advisors
must analyse the facts to decide whether a greater or lesser degree of relaxation of the
URC was warranted; in each case, the applicant was required to strike a balance
between the duty to comply with rule 6(5)(a) and the entitlement to dev iate therefrom,15
subject to the urgency that prevailed.16
13 1998 JDR 0116 (SE).
14 At 10 -11.
15 The rule in question stipulates that every application, other than one brought ex parte , must be brought
on notice of motion as near as may be in accordance with Form 2(a) of the First Schedule. In that regard,
Form 2(a) provides for, inter alia , a period of 15 days within which a respondent can file his or her
answering affidavits.
16 Caledo n, at 8.
12
[29] Returning to the present matter, for the applicant to have afforded ABSA a week
to deliver its answering affidavit was plainly unfair . Such urgency as might have existed
was clearly self -created . Furthermore, the applicant’s reliance on the contracts secured
by New Biginnings to justify the urgent setting aside of the previous order was, as shall
be explained , misplaced.
[30] The court would , in the circumstances, be entitled to strike the matter from the
roll. This would have the effect, however, of deferring the determination of the dispute
when there was simply no merit to the application itself. This will be discussed in the
paragraphs that follow.
Notice to the applicant
[31] At the heart of the application is the argument that ABSA failed to provide proper
notice to the applicant of the commencement of winding up proceedings. In that regard,
the applicant contended that section 130(3) of the new Act was pertinent. The
provisions there of stipulated that any affected person ,17 such as the bank, who intend ed
to apply for an order setting aside a resolution adopted by a company to place itself
under business rescue, was required to notify other affected persons in the prescribed
manner . Under regulation 124 of the Companies Regulations,18 the bank had to deliver
a copy of the court application , in accordance with regulation 7, to each affected person
known to it. This meant that a copy of the application could have been transmitted
electronically to the applicant .19 Importantly, noted the applicant, section 130(4)
indicated that each affected person has a right to participate in the hearing of the
application.
17 See n 2, above.
18 The Companies Regulations were published under GNR 351 on 26 April 2011.
19 Regulation 7 indicates that a notice or a document may be delivered in any manner contemplated in
terms of , inter alia, section 6(10) of the new Act. T his provides, in turn, for electronic transmission.
13
[32] In Griessel and another v Lizemore and others ,20 Spilg J held that substantial
compliance with the above requirements was acceptable . To that effect, an applicant
was deemed to have provided adequate notice where notice had been given to most
creditors , by number as well as value and importance .21
[33] Regarding the facts of the present matter, it is common cause that ABSA never
notified the applicant directly in the prescribed manner . The bank’s attorneys emailed,
instead, a copy of the application to Dlabantu & Associates. This was, on the face of it,
problematic. For a creditor that was owed R 15,529 ,140 by New Biginnings ,
representing a voting interest of 7.44% ,22 it would have been expected of ABSA to have
transmitted a copy of the application directly to the applicant. The last contact with
Dlabantu & Associates had been more than eight months prior to the bank’s institution
of the winding up proceedings; there was no evidence that they held a mandate to
accept notice on behalf of the applicant or that they continued to represent it.
Considering the relative value and importance of the close corporation’s indebtedness
to the applicant, the emailing of a copy of the application to Dlabantu & Associates did
not amount to substantial compliance with the requirements of section 130(3) . It was
simply insufficient .
[34] As an affected person , the applicant had a statutory right to participate in the
winding up proceedings. Inadequate notice prevented it from ex ercising such right.
Whether there is a basis, however, to grant the relief sought remains to be seen ,
especially considering that it remains open to the applicant to oppose the final winding
up of New Biginnings .
Merits of the application
20 [2015] 4 All SA 433 (GJ).
21 At paragraph [98].
22 The applicant alleged the amount in its founding papers, but it was also reflected as such in the most
recent business rescue plan that was proposed by Mr Phiri, attached to ABSA’s application in the winding
up proceedings. The voting interest appeared the rein, too.
14
[35] Notwithstanding ABSA’s insufficient notification of the applicant , the applicant has
failed to address, either satisfactorily or at all, the issue of how the setting aside of the
previous order would benefit the general body of creditors. At the very least, on the
authority of Nyhonyha , the applicant was required to have demonstrated that the relief
sought would not be to the disadvantage of any creditor.
[36] The applicant based its a pproach on the value of the contracts that New
Biginnings had secured. This aspect requires closer attention. The table, below,
summarises the nature of the contracts disclosed in Ms Mb angula’s founding affidavit:
Project
Client Date Value Status
Installation of bulk
pipeline and
repairs to water
treatment works Amathole
District
Municipality 20 August
2019 R18,911,925 Award of
contract subject
to outcome of
litigation
proceedings.
Maintenance of
road P37/1,
Tweespruit and
Excelsior Free State
provincial
government 23 Jan 2023 R269,903,452 Contract
terminated. New
Biginnings has
alleged claim of
R 80,000,000.
Rehabilitation of
road P6 -3 Kwa-Zulu
Natal
provincial
government 4 March 2023 R319,051,822 Project in
progress . To be
implemented b y
applicant .
Appointment to
panel for Kwa-Zulu
Natal 23 October
2023 To be
determined Further project
anticipated.
15
rehabilitation of
various roads provincial
government
Appointment to
panel for
emergency repairs
to water
infrastructure
Amathole
District
Municipality 30 November
2023 To be
determined Subject to
outcome of
winding up
proceedings.
Appointment to
panel of civil
engineering
contractors
Independent
Development
Trust 3 Jan 2024 To be
determined Subject to
outcome of
winding up
proceedings.
Appointment to
panel for re -
gravelling of roads ,
Senqu Local
Municipality Eastern
Cape
provincial
government 8 May 2024 R 5,000,000
per annum,
for three
years Project
suspended,
subject to
outcome of
winding up
proceedings.
Equipping of
boreholes,
Mnquma and
Mbhashe Amathole
District
Municipality 30 May 2024 R 12 ,000,837 Project
suspended,
subject to
outcome of
winding up
proceedings.
Appointment to
panel of
contractors, bulk Rand West
City Local
Municipality 31 May 2024 To be
determined Subject to
outcome of
winding up
16
sewerage
infrastructure
proceedings.
Appointment to
panel of
contractors , civil
engineering works
Amathole
District
Municipality 10 July 2024 To be
determined Subject to
outcome of
winding up
proceedings.
Upgrading of
gravel streets,
James Calata Walter Sisulu
Local
Municipality 18 July 2024 R 8,312,383 Project in
progress. To be
implemented by
applicant.
Upgrading of road
DR08606 Eastern
Cape
provincial
government 19 August
2024 R
282,841,532 Award of
contract subject
to outcome of
winding up
proceedings.
[37] What emerges from the above is not quite the rosy picture that the applicant
painted in its papers. New Biginnings may well have secured its appointment to
numerous panels but the allocation of any projects in terms there of remains subject to
the outcome o f the winding up proceedings . It should be added that such allocation will,
of course, also be subject to possible adjustments to client priorities and (inevitably) the
availability of fund s.
17
[38] There are only three projects of any significant value , relative to the extent of the
close corporation ’s overall in solven cy.23 Of these, the first project (road P37/1) was
terminated . The applicant alleged that the close corporation had a claim for R
80,000,000 in this regard but the strength thereof and likelihood of recovery in the short -
term are completely unknown. The second project (road P6 -3) is being implemented by
the applicant . The terms and conditions of the verbal agreement allegedly concluded
with New Biginnings in this regard are, similarly, completely unknown, meaning that
there is no evidence of the projected profitability of the project and how much would
accrue to the clo se corporation. The third project (road DR08606) has yet to be
awarded . From the correspondence attached to the applicant’s papers, the appointment
of New Biginnings in this regard is dependent upon the close corporation’s submission
of, inter alia , proof of tax compliance and financial capacity . Considering its
indebtedness to SARS and the state of its finances, it seems highly unlikely that New
Biginnings w ould be successful.
[39] Such operational projects as remain are simply too few and too insignificant in
value to make any dent upon the close corporation’s de facto insolvency. Overall, the
contracts to which the applicant referred raise substantially more questions than
answers. The uncertainties attached thereto fail to advance the applicant’s case and
appear , instead, to demonstrate the contrary, i.e. that the setting aside of the previous
order will most certainly not be to the benefit of the general bod y of creditors. At the
least, it would be to ABSA’s clear disadvantage. The only party that would seem to
derive any benefit at all therefrom, besides possibly the close corporation, is the
applicant itself.
Relief and order
[40] In relation to the remaining arguments, the evidence presented by ABSA refutes
the applicant’s assertion that New Biginnings was unrepresented when winding up
23 It appears to be common cause that New Biginnings’ liabilities exceed its assets by at least R
145,000,000.
18
proceedings commenced. To all intent and purposes, Mr Phiri continued to occupy the
role of busin ess rescue practitioner. His possible replacement would not take the matter
any further, considering the dubious nature of the contracts relied upon by the applicant
to advocate such an approach; it would merely prolong and increase the costs of
business r escue proceedings that held very little, if any, prospect of a positive outcome .
[41] The bank conten ded that section 354(1) was the incorrect basis upon which the
applicant could apply to set aside the previous order . This was because the provisions
thereof dealt only with winding up proceedings and not business rescue (as
contemplated under the new Act). Save to remark that section 354(1) seems to afford a
wide enough discretion to stay or set aside the commencement of winding up
proceedings that were preceded by the setting aside of a resolution by the company to
place itself under business rescue , as is the situation in the present matter, there is no
need to explore this aspect further considering the findings made el sewhere.
[42] The applicant has failed to demonstrate that special or exceptional
circumstances exist to justify the setting aside of the previous order. The court is not
persuaded that there is a proper basis upon which it can exercise the wide discretion
afforded under section 354(1) of the old Act .
[43] The only outstanding issue is that of costs. ABSA , as the successful party, is
entitled to the recover y thereof, but there is no reason to awar d these on a punitive
scale as the bank sought. Mindful of the nature of the matter, ABSA is entitled to the
costs of two counsel where so employed.
[44] In the circumstances, the following order is made:
(a) the application is dismissed; and
(b) the applicant is ordered to pay the first respondent’s costs, including two
counsel where so employed.
19
______________________________
JGA LAING
JUDGE OF THE HIGH COURT
APPEARANCE:
For the applicant: Adv De la Harpe SC
Instructed by: Huxtable Attorneys
26 New Street
MAKHANDA
046 622 2692
Law1@huxattorneys.co.za
Ref: O.Huxtable/cl/02N024002
For the 1st respondent: Adv Leathern SC
Instructed by: Symington De Kok Attorneys
169B Nelson Mandela Drive
BLOEMFONTEIN
dmoller@symkok.co.za
Mia.Germishuys@symkok.co.za
051 505 6600
Ref: D MÖLLER/FMN0233/MG
c/o DE JAGER & LORDAN INC
2 Allen Street
MAKHANDA
marius@djlaw.co.za
046 622 2799
Ref: A304
20
Date heard: 26 November 2024.
Date delivered: 25 February 2025.