IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
{l) REPORTAB LE: No
{2} OF INTEREST TO OTHER JUDGES: No
{3} REVISED.
DATE 17/06/2025 BRAND AJ
Date: 17 June 2025
In the appeal between:
HOMII LIFESTYLE (PTY) LTD
URBAN LIFESTYLE INVESTMENT
HOLDINGS (PTY) LTD
and
UNEMPLOYMENT INSURANCE FUND
PUBLIC INVESTMENT CORPORATION sac LTD
In re
UNEMPLOYMENT INSURANCE FUND
PUBLIC INVESTMENT CORPORATION sec LTD
and Case number: 134443/2023
First Appellant
Second Appellant
First Respondent
Second Respondent
First Applicant
Second Applicant
2
PATRICIA CATHERINE JOHNSON First Respondent
HOMII LIFESTYLE (PTY) LTD Second Respondent
URBAN LIFESTYLE INVESTMENT Third Respondent
HOLDINGS (PTY) LTD
JUDGMENT
BRAND AJ (with MLAMBO JP and BARNARDT AJ concurring )
Introduction and background
[1] This is an appeal against an order of this court, per Davis J in terms of section
18(3) of the Superior Courts Act 10 of 2013 (‘the Superior Courts Act ’) that an earlier
order of his against which an appeal is currently pending before the Supreme Court of
Appeal (the SCA) , remains in force and may be executed while that appeal is pending.
[2] The first appellant, Homii Lifestyle (‘Homii’) is a property development and
management company . The second appellant, Urban Lifestyle Investment Holdings
(‘Urban’) , is Homii’s holding company .
[3] The first respondent is the Unemployment Insurance Fund (‘the UIF’) , a
statutory body with the main purpose of accepting cont ributions from employers, from
which to pay unemployment insurance to those who lose their jobs. The second
respondent , the Public Investment Corporation (‘the PIC’), is likewise a statutory body
with the mandate to invest public money for a return on behalf of the State.
[4] The genesis of the dispute between the parties is a series of agreements
between them , concluded in 20 19. The first was a loan agreement, referred to as the
‘Mezzanine Agreement ’, in terms of which the UIF, through the PIC, lent a sum of
R410,000,000.00 to Homii . Homii was required to make six -monthly interest payments
on this loan and also to provide the UIF annually with its audited financial statements
and each of its ‘approved budget (s)’ as well as those of its ‘guarantors’.
[5] To secure this loan, the UIF further entered into the second agreement with
3
Urban , styled the ‘Cession and Pledge Agreement’. In terms of this agreement Urban
ceded and pledged all its rights and interest in its shares , shareholders’ claims and
‘related rights’ in Homii , explicitly as security for Homii’s ‘entire indebtedness’ ,
including interest, fees or costs.
[6] The rights that Urban so ‘ceded and pledged’ to the UIF included the right to
attend all shareholders ’ general meetings and cast all votes attached to the ceded
shares . These rights would become operative (in the sense that the UIF could exercise
them) only should Ho mii default on any of its obligations in terms of the Mezzanine
Agreement .
[7] Over a prolonged period Homii failed to pay any o f the six -monthly interest
amounts required. Homii also failed to provide the UIF with any of the information it
was supposed to in terms of the Mezzanine Agreement . When this default persisted
despite repeated demand , the UIF wrote Urban in October 2023 that it perfected the
session and demanded hand -over of all Urban’s shares in Homii and particulars of all
shareholders’ claims a nd related rights.
[8] The perfection of the cession meant that the UIF had replaced Urban as Homii’s
sole shareholder . As such, it demanded from Homii’s sole director, Patricia Catherine
Johnson (‘Johnson’), that a general shareholders’ meeting be convened, among other
things to appoint a new board of directors.
[9] When neither Johnson nor Homii complied with this demand, the UIF and PIC
approached this court with an application for a declar ation that the UIF is entitled to
exercise voting rights c oncerning all Urban’s shares in Homii and an order that a
general shareholders’ meeting be held within 14 days, among other things to appoint
new directors (the ‘main application’) .
[10] This main application was first heard as urgent, before Strijdom J, who struck
the matter from the roll because the necessary facts to establish the jurisdiction of this
Cour t, had not been pleaded .
[11] When the matter was re -enrolled with supplemented papers now pleading facts
concerning jurisdiction, it came before Collis J , who direct ed that it be moved to the
ordinary roll . The matter was finally heard on the ordinary roll before Davis J on 15
May 2024 , who, in a judgment dated 30 July 2024 granted the application.
[12] Davis J dismissed an application for leave to appeal against his 30 July
4
judgment in the main application on 18 September 2024 , whereupon Homii and Urban
approached the SCA. That court granted leave to appeal on 3 December 2024 . This
prompted an urgent approach to this court by the respondents in this appeal, in terms
of section 18(3) of the Superior Courts Act to have Davis J’s 30 July order in the main
application declared enforceable pending the appeal to the SCA.
[13] In a judgment and order dated 13 December 2024, Davis J granted the section
18(3) order sought (the ‘enforcement order’) , rendering the order in the main
application enforceable despite the appeal against it pending before the S CA. The
appellants promptly, on 23 December 2024 and in exercise of their automatic right to
appeal in terms of section 18(4) of the Superior Courts Act , noted an appeal against
the section 18 (3) enforcement order. This is the appeal before us.
[14] In addition and finally , on 24 March 2025, the appellants filed an application for
leave to rely on section 45 of the Companies Act 71 of 2008 (’the Companies Act’) and
to introduce new evidence relating to that in th is appeal against the enforcement order .
Issues
[15] In light of this background there are only two issues for this Court to decide in
this appeal :
[15.1] Whether to grant leave to the appellants to rely on section 45 of the
Companies Act and to introduce new evidence related to that in this appeal;
and
[15.2] whether to uphold or set aside Davis J’s section 18(3) enforcement
order .
We deal with these issues in turn below.
Analysis
Reliance on section 45 and introduction of new evidence
[16] The appellants in this appeal seek to introduce both a new defence against the
respondents ’ claim , not plead ed before, and new evidence to support that new
defence. This is apparent from their notice of motion concerning this , where they pray
for an order for, among other things , leave ‘for purpose of [this] appeal … to rely upon
Section 45 of the Companies Act 71 of 2008 and to introduce the evidence in relation
thereto contained in the Founding Affidavit ’.
5
[17] Section 45 of the Companies Act that they seek to rely on relates to the
provision of financial assistance by one company to another. Summarised in relevant
part it determines that if a company wishes to provide financial assistance to a related
company, such a decision must be approved by its board and a special meeting of
shareholders , and its board must be ‘satisfied that immediately after providing the
financial assistance, the company would satisfy the solvency and liquidity tes t’.1
Failure to comply with these two requirements renders any resultant agreement void
from the outset.2
[17] The defence they wish to raise anew on appeal is that both the Mezzanine and
the Session and Pledge agreements are void from the outset for want of compliance
with section 45 . The evidence they seek to introduce now are share -holders ’
resolutions and a director ’s resolutio n that on their version show non -compliance with
section 45 . In sum the appellants’ position is that the respondents were required by
law to plead compliance with section 45 before the court a quo but failed to do so .
This, they say, rendered their main application excipiable . The appellants wish to raise
this defence now , in the appeal against the section 18(3) enforcement order. They
wish to do so to show that they will suffer irreparable harm in being held to agreements
that are vo id should the enforcement order be upheld on appeal.
[18] Leave to raise a new defence on appeal is not there for the asking – it is given
only in certain circumstances . The reason for this is obvious: An appeal court
considers and must pronounce on the cogency of the judgment of the court a quo .
Logically , it must as a rule do so in light of the case presented to that court . To consider
a different case than that turns the appeal into a re -hearing of the matter rather than
an assessment of the judgm ent of the Court a quo .3
[19] To persuade us to allow them to raise the section 45 defence on appeal, the
appellants placed great stock in the well -known dictum of Jansen JA in Paddock
Motors (Pty) Ltd v Igesund4 that it ‘ would create an intolerable position if a Court were
1 Section 45 (2) and (3).
2 Section 45(6).
3 Cole v Government of the Union of S.A . 1910 AD 263 at 272 (‘Cole’) per Innes JA: '[T]he duty of an
appellate tribunal is to ascertain whether the Court below came to a correct conclusion on the case
submitted to it' .
4 Paddock Motors (Pty) Ltd v Igesund 1976 (3) S A 16 (A) (‘Paddock Motors ’).
6
to be precluded from giving the right decision on accepted facts, merely because a
party failed to raise a legal point, as a result of an error of law on his part ’.5
[19] They were correct to do so. The circumstances under which a new defence
may be raised on appeal are indeed comprehensively described in Paddock Motors ,
drawing on the earlier judgment in Cole v Gover nment of the Union of S.A. where
Innes JA set out the position as follows:6
'If the point is covered by the pleadings, and if its consideration on appeal involves no unfairness
to the party against whom it is directed, the Court is bound to deal with it. And no such
unfairness can exist if the facts upon which the legal point depends are commo n cause, or if
they are clear beyond doubt upon the record, and there is no ground for thinking that further or
other evidence would have been produced had the point been raised at the outset. '
[20] From this arise two requirements that must be met before a new point of law
may be raised on appeal : the point must be ‘covered by the pleadings’ ; and its
consideration on appeal should not cause any unfairness for the party against which
it is directed .
[21] In sum the inquiry is whether it is in the interest of justice to allow the new
defence on appeal, in the sense that ‘a refusal by a Court of Appeal to give effect to a
point of law fatal to one or other of the contentions of the parties would amount to the
confirmation by it of a decision clearly wrong ’.7
[23] As to the first of the two requirements, t he appellants submitted that their
section 45 defence was covered in the pleading s in the negative : The respondents , to
plead existence of valid agreements on which to found their main application, were
required to plead compliance with section 45 . Their failure to do so was evident on the
papers a quo and as such covered by the pleadings.
[24] These submissions are very tenuous . From Barkhuizen v Napier it is clear that
what is meant with the requirement that the point raised on appeal must have been
‘covered in the pleadings’ before the court a quo , is that all the facts required for
5 Paddock Motors (above) at 23F.
6 Cole (above) at 272-273. See also Barkhuizen v Napier [2007] ZACC 5 ; 2007 (5) SA 323 (CC)
(‘Barkhuizen ’) at para [39].
7 Cole (above) at 272; Mokweni and Others v Plaatjies and Others - Appeal (A178/2022) [2023]
ZAWCHC 266 (26 October 2023) (‘Mokweni ’) at para [25].
7
determination of the point of law now raised on appeal must have been on the papers
before the Court a quo .8 In both Barkhuizen and Paddock Motors this was manifestly
the case: both were decided on agreed facts. Indeed, in Paddock the point of law later
raised on appeal was initially raised a quo , with the facts to support it , but then later
abandoned.
[25] In this matter, the o pposite is true . The very fact that the appellants now seek
to introduce new evidence before this Court on appeal to sustain the point of law they
want to raise (evidence that they had in their possession all along) shows that these
facts were not on the papers a quo , so that the section 45 defence is not covered by
the pleadings . In short, there may have been enough facts on the papers a quo to
raise the section 45 point, but not to determine i t.
[26] This conclusion is underscored by the reliance Mr Wasserman SC for the
respondents place d on the matter of Yannakou v Apollo Club .9 This case involved a
contractual dispute in which the party against whom the contract was sought to be
enforced on appeal for the first time raised the defence that the contract in question
was void due to an illegality , as it was in contravention of a statutory prohibition . Trollip
JA held that if a defendant ‘ relies on a particular section of a statute, he must either
state the number of the section and the statute he is relying on or formulate his defence
sufficiently clearly so as to indicate that he is relying on it ’ and that ‘if his defence is
illegality, which does not appear ex facie the transaction sued on but arises from its
surrounding circumstances, such illegality and the circumstances founding it must be
pleaded ’.10
[27] In this light there was in fact a duty on the appellants to raise the provisions of the
Companies Act on which they now seek to rely to establish that the contract s were
void for non -compl iance with section 45, in the Court a quo . There is also nothing on
the record to show that this non -compliance and resultant voidness appeared on the
face of the pleadings before the Court a quo so th at it should have taken cognisance
of it mero motu .
8 Barkhuizen (above) at para [ 41]. See also Yannakou v Apollo Club 1974 (1) SA 614 (A) ( ‘Yannakou ’) at
26H.
9 Yannakou v Apollo Club 1974 (1) SA 614 (A) (‘Yannakou ’).
10 Yannakou (above) at 623F -H.
8
[28] Apart from the fact that in my view the appellants fail to establish that the section
45 defence they now seek to raise was covered by the papers, their raising this
defence now, on appeal, is unfa ir to the respondents. One of the examples that Innes
JA lists in Cole of unfairness to the other party resulting from the raising of a new point
on appeal that was not raised a quo, is if the re are grounds ‘ for thinking that further or
other evidence would have been produced had the point been raised at the outset ’.11
[29] There were two routes through which the appellants could have raised non -
compliance with section 45 in the main application : it could have excepted to the
application on grounds that it failed to disclose a cause of action (in motion
proceedings the more uncommon route) or it could simply have raised this defence in
its answering affidavit . In both cases the appellants’ raising of the defence at that stage
would have afforded the responde nts the opp ortunity to raise evidence up to then not
on the papers to rebut the defence .
[30] If the appellants excepted and the exception was upheld, in the ordinary course
the offending pleading would have been set aside , and the respondents would have
been given leave to amend it within a prescribed period .12 If the section 45 defence
was raised in the answering affidavit , the respondents could have raised evidence to
rebut it in their reply. For the appellants not to raise this defence a quo in the main
application (as it is, following Yannakou , required to do ), precluded the respondents
from raising evidence to rebut it and it is for that reason that it is unfair.13
[31] In addition to this unfairness, i t would in my view also not be in the interest s of
justice for us to allow the appellants to raise this defence anew in this appeal. The
‘intolerable position’ that Jansen JA warns of in Paddock Motors ,14 refers to the
manifest injustice that would arise if a Court on appeal must confirm and uphold a
decision of the Court a quo that is ‘ clearly wrong ’15 in light of a defence that a party is
precluded from raising on appeal simply because it did not raise it at the outset . In
other words, there should be no reasonable dispute on the merits o f the defence raised
11 Cole (above) at 272.
12 Group Five Building Ltd v Government of the Republic of South Africa (Minister of Public Works and
Land Affairs) 1993 (2) SA 593 (A) at 602D.
13 Yannakou (above) at 625H.
14 Paddock Motors (above) at 23F.
15 Per Innes JA in Cole (above) at 272 (emphasis added).
9
on appeal and certainly no need to introduce new evidence on appeal on the basis of
which the defence must be decided.
[32] This is evidently not so with the appellants’ attempted reliance on section 45.
The fact that there was need for the appellant s to apply for leave to introduce new
evidence on appeal on its own already shows that the appellants’ section 45 point is
not clearly right and that the two agreements were not clearly void from the outset . But
quite apart from that , Mr Wasserman for the respondents submitted (persuasively to
my mind ) that the merits of the appellants’ section 45 defence are decidedly thin – at
best arguable.
[33] I emphasise that the purpos e now is not to decide the merits of the appellants’
purported section 45 defence one way or the other . Instead, w e must consider the
merits of that defence only to determine whether it is clearly right or open to reasonable
doubt . If the latter, then it would not be in the interests of j ustice to admit it at this stage.
[34] The respondents to my mind clearly cast considerable doubt on the merits of
the section 45 defence , broadly in two ways. First, Mr Wasserman submitted that
section 45 does not apply to the Mezzanine agreement, so that its requirements need
not have been complied with there .
[35] He poi nts out that section 45 applies only to financial assistance extended by a
company to a ‘director or prescribed officer of the company or of a related or inter -
related company, or to a re lated or inter -related company or corporation, or to a
member of a related or inter -related corporation, or to a person related to any such
company, corporation, director, prescribed officer or member ’. The only part of this
excerpt from the section that c an conceivably appl y to the Mezzanine Agreement
(concluded between the UIF and Homii ) is the reference to a ‘related or inter -related
company or corporation ’. When the Mezzanine Agreement was concluded (an d also
thereafter) the re was no relation or interrelation between the UIF and Homii. It was an
ordinary, arms -length commercial transaction between t wo unrelated companies . For
that reason, so the submission concludes , section 45 does not apply. There is merit in
this submission.
[36] Second, concerning the Cession and Pledge Agreement , the submission was
that even if Section 45 applied to it, the documents that the appellants seek to admit
on appeal show that it was complied with . These are in the first place a shareholders’
10
resolution in which the Cession and Pledge Agreement is approved and a resolution
signed by the sole director of the appellants at the time, Ms Johnson in which she
likewise approves the agreement and confirms her satisfaction that immediate ly after
the provision of the financial assistance concerned, the company would satisfy the
solvency and liquidity test .
[37] To be sure, Mr Harpur SC for the appellants offered cogent rejoinders
particularly to the respondents’ submissions concerning the Cession and P ledge
Agreements (concerning the shareholders’ resolution that it was passed by the
previous sole shareholder in Homii, A1, while the UIF had at that time by agr eement
already been give a 42% share stake in Urban , so that the resolution was invalid due
to the UIF’s non participation in voting, and that it was not properly a special resolution
as required ; and concerning the Board resolution that an ex post facto report on
Urban’s financial position later acquired showed that objectively the solvency and
liquidity test was not satisfied) .
[38] But the point at this stage again is not which of the two is correct – instead it is
simply that there is no clear resolution to the dispute . Reasonably, it will remain in
dispute until fully ventilated and decided on the basis o f relevant facts. As such it
clearly cannot be said that Davis J’s judgment and order in the main application is
clearly wrong so that it would be ‘intolerable’ to confirm it despite a potential cogent
challenge that cannot be raised on appeal simpl y because it was not raised earlier .
[39] For these three reasons then (that the section 45 defence was not covered by
the pleadings ; that admitting it would be unfair to the respondents; and that it would
not offend the interests of justice to exclude it) , taken together and each on its own , I
conclude that the appellants cannot be permitted to rely on section 45 in this appeal .
Accordingly, their application for leave to do so must be dismissed.
[40] This conclusion of course puts paid also to their application for leave to
introduce new evidence on appeal, in support of the section 45 defence – the two parts
of the application are mutually supportive and interrelated. I nonetheless for sake of
completeness proceed briefly to consider also this aspect of the application for leave.
[41] The point of departure in dealing with applications to introduce new evidence
11
on appeal is that it should be allowed only exc eptionally .16 The reason for this is much
the same as applies in th e case of raising a new defence . If the purpose of a Court on
appeal is to assess the judgment of the Court a quo , then it can properly fulfil that
purpose only if it assesses that judgment against the evidence upon which it was
arrived at alone.
[42] In Coleman v Dunbar17 it was held that a party seeking to introduce new
evidence on appeal must a t a minimum provide a cogent explanation for why the
evidence was not introduced in the Court of first instance and show that the evidence
concerned is material to the outcome of the matter and at face value true .18 Below I
consider each of these requirements in turn in relation to the appellants’ case .
[43] The only explanation that the appellan ts offer for their failure to raise the section
45 defence at the outs et is that their legal advice when first faced with the main
application was that the jurisdiction point on which that application was initially struck
from the roll and with which they now persist on appeal was clearly dispositive of the
application so that alternative defences to the application were at that stage not
pursued . The reason why their counsel at the time did not then alert them also to the
section 45 defence, is that he was not ‘alive to’ it. They were only alerted to the section
45 defence when they briefed new counsel for purposes of their opposition to the
application for the section 18(3) enforcement order . He immediately informed them
that the defence was available to them, but by then, of course , the proverbial horse
had bolted.
[44] This is simply no explanation at all, let alone a cogent or persuasive one as
required . It does not say why they didn’t raise the defence at the outset.19 Instead , it
is simply a restatement of the appellants’ predicament : Whether by design or
oversight, they didn’t raise the section 45 defence at the outset and they seek to do
16 Ibex RSA Holdco Ltd & Another v Tiso Blackstar Group (Pty) Ltd & Others [2024] ZASCA 166 (‘Ibex’)
at para [28 ].
17 Coleman v Dunbar 1933 AD 141 (‘Coleman ’) at 162. See also for a more recent affirmation of
Coleman , Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others 2005 (2)
SA 359 (CC) (‘Rail Commuters ’) at para [43].
18 De Aguiar v Real People Housing (Pty) Ltd [2010] ZASCA 67; 2011 (1) SA 16 (SCA) ( ‘De Aguiar ’) at
paras [10] and [11].
19
12
so now . The application to introduce new evidence on appeal thus fa lls at the first
hurdl e.
[45] The second requirement, m ateriality , means that the evidence, if admitted and
shown true for the purpose for which it was admitted, would have a bearing on the
outcome of the matter – could decis ively influence or determine the outcome, that is.
Much of the evidence the appellants seek to introduce also fails this test in that it is
not self -evidently even relevant, let alone material to the outcome of the matter .
Indeed, this can be said about all but the shareholders’ and director ’s resolution s. Both
these latter two documents certainly pass the test of materiality – if they say and show
what the appellants allege they do (that the requirements of section 45 were not
complied with , something the respondents of course dispute ) then they potentially
prove that at least the Cession and Pledge agreement is void , so that the respondents
would not be entitled to the reli ef they seek in the main application .
[46] But herein lies the rub : are the shareholders’ and directors’ resolution s true on
the face of it , in the sense that without more, they show the non -compliance with
section 45 that the appellants say they do ? The answer must be no .
[47] As already traversed in outline above, the respondents submit that these two
documents in fact show exactly the opposite to what the appellants say they do –
compliance instead of non -compliance with section 45 and so validity instead of
voidness of the Cession and Pledge Agreement .
[48] The appellants submit that the shareholders’ resolution w as invalid because the
UIF, which at that time had already acquired a 42% shareholding in Urban , had not
participated in adopting it . The respondents counter this and say that, even after you
have acquired the relevant shares, one becomes a shareholder only once you r name
has been entered in the share register . They argue that the appellants had placed no
evidence before this Court that this had occurred, so that it was unclear whether the
UIF could have voted on the resolution .
[49] The appellants say t hat the director’s resolution is invalid because a
subsequent auditors ’ report shows that despite the sole director ’s satisfaction to the
contrary , Urban did in fact not satisfy the solvency and liquidity test immediately after
conclusion of the Cession an d Pledge Agreement . The respondents reply that the
section 45 requirement is subjective – the Board (in this case the sole director) must
13
be so satisfied – and that Ms Johnson was so satisfied and cannot now attempt to
disavow that .
[50] Also in this context the point now is not to decide who is right and who is wrong
concerning this. Instead, for purposes of determining whether new evidence may be
admitted on appeal it needs only be determined whether the evidence is on its face ,
without more, true. The fact that such level of dispute exists on the meaning, import
and implications of the ev idence shows clearly that it is not.
[51] I conclude from this that the appellants’ application to introduce further evidence
on appeal also on its own terms does not meet all the requirements for leave for such
introduction to be allowed , so that the application concerning this must also be
dismissed.
[52] In sum concerning the appellants’ attempt to rely on section 45 and to introduce
new evidence in support of that reliance in this appeal, I conclude that the appellants
may do neither.
The appeal against the section 18(3) enforcement order
[53] The appellants seek to challenge Davis J’s section 18(3) enforcement order
and judgment on three grounds , namely that he erred in holding that:
[53.1] there were exceptional circumstances that warranted the grant of the
enforcement order;
[53.2] the respondents would suffer irreparable harm should the enforcement
order not be granted; and
[53.3] the appellants would not suffer irreparable harm in the event it were
granted.
[54] Despite the section 18(3) order being an interim order pendente lite there is no
reason for us in this appeal to apply anything other than the usual standard applied by
Courts of appeal, which is to ask simply whether Davis J’s judgment and order was
correct on the law and the facts ,20 or, put differently , whether the respondents’ section
20 Knox D' Arcy Ltd and Others v Jamieson and Others 1996 (4) SA 348 (A) (‘Knox D’Arcy’ at 362G ).
14
18(3) application ‘should have achieved a different outcome’.21
[55] The appellants’ gr ounds of appeal track the requirements for the grant of a
section 18(3) enforcement order that were applied by Davis J in reaching his judgment .
Derived from the text of section 18 itself (section 18(1) read with (3)) these are that an
enforcement order may be granted a) only in exceptional circumstances, if a Court is
persuaded on a balance of probabilities that b) the party applying for the order will
suffer irreparable harm if it is not granted, and c) the party aga inst which it is sought
will not suffer irreparable harm if it is granted.22
Exceptional circumstances
[56] The first arrow in the appellants’ bow concerns the first requirement that an
enforcement order may be granted only in exceptional circumstances . They seize
upon the following excerpt s from Davis J’s judgment concerning this:
‘[T]he relief sought was not ordinary in nature. It was neither a money judgment [n]or the
customary order for execution against property by way of a sale. ’23
and
‘When a debtor fails in its obligations, the UIF as lender needs to secure the debtor’s
indebtedness by taking control thereof. This is done by exercising shareholders’ voting rights
and thereby appointing new directors for the debtor. … [T]he relief secur ing these rights, can
only be described as “exceptional”. ’24
[57] They object to these excerpts that it is not the relief that a party seeks to enforce
through a section 18(3) order that must be exceptional but the circumstances in which
the parties find th emselves ; and that the mere fact of the existence of a debtor/creditor
relationship between the parties and the existence of default in that relationship cannot
constitute exceptional circumstances for purposes of section 18( 1).
[58] As authority for this proposition they rel y on the judgment of the Constitutional
21 Makhado Local Municipality and Another v Makhado and Another (HCAA04/2020; 542/2020) [2020]
ZALMPPHC 45 (3 July 2020) (‘Makhado ’) at para [2].
22 Knoop NO v Gupta ( Tayob intervening ) 2021 (3) SA 135 (SCA) (‘Knoop’) at [45] ; Incubeta Holdings
(Pty) Ltd and Another v Ellis and Another 2014 (3) SA 189 (GJ) (‘Incubeta ’) at para [16].
23 Enforcement judgment at para [16].
24 Enforcement judgment at para [18].
15
Court in S v Liesching , where it was held in a different context25 that the term
‘exceptional circumstances’ is fact -speci fic to individual litigants and ‘should be linked
to either the probability of grave individual injustice … or a situation where, even if
grave individual injustice might not follow, the administration of justice might be
brought into disrepute ’.26
[59] They conclude that the mere fact of default in the debtor /creditor relationship
between the UIF and Homii and the precarious financial position in which Homii (and
Urban) find themselves cannot qualify as the kind of fact-specific grave injustice or
affront to the administration of justice referred to in Liesching – it is nothing different
from the situation that may pertain in any other debtor/creditor relationship. On this
basis they then conclude that Davis J erred in finding that there were exceptional
circumstances.
[60] This criticism of the judgment a quo is misconceived . Simply put, by reducing
Davis J’s judgment in this respect to a finding that the exceptional circumstances exist
because the remedy the respondents wish to enforce is an exceptional one, the
appellants mischaracterise it.
[61] A proper reading of paragraphs [16] to [19] of Davis J’s judgment where the
issue of exceptional circumstances is canvassed, show s that the reference to the
exceptionality of the remedy is simply an entry point for Davis J into a descri ption of
the excepti onality of the UIF as creditor and of the relationship between the UIF and
Homii as a debtor/creditor relationship . That is, the exceptionality of the remedy is an
indication of the exceptionality of the UIF and PIC as lenders , the exceptionality of the
relationship they have with their creditors, the exceptionality of their purpose and the
exceptionality of the nature and scope of the risks that they face if their debtors default .
[62] The UIF and PIC are both public bodies and not private commercial entities.
They participate in commercial activity such as investing money in the private sector
not for any private commercial gain, but to advance public inter ests. The UIF does so
to protect and nurture the funds paid to it by employers to secure against
unemployment on behalf of all employees in South Africa – to protect millions of
25 Liesching concerned the reconsideration by the President of the Supreme Court of Appeal of a
refusal of leave to appeal to that court, in a criminal matter.
26 Liesching at para [138].
16
vulnerable workers . The PIC in turn does so to advance more generally the interests
of the state .
[63] It is these public responsibilities that prompted them in the first place to
conclude the Cession and Pledge agreement on the terms concerning their remedies
in case of default by Homii that they did . And it is the fact of, and the enormity and
urgency of these public responsibilities (more than R600,000,000.00 of these public
funds at risk due to the continuing default by the appellants and the generally
precarious financial position in which they find themselves ) that constitute the
exceptional circumstances that justify their resort to section 18(3) for enforcement of
the order they had obtained.
[63] So understood, Davis J’s finding of exceptional circumstances easily meets the
requirements of context -specificity set in Lieschink and those described in the more
clearly applicable Incubeta decis ion: that exceptional circumstances are those that
depart (to a special degree) from the norm ;27 that they must arise from and be specific
to the case at hand;28 and that they are not a matter of discretion but of fact.29
[64] Accordingly, Davis J’s conclusion that exceptional circumstances exist must be
upheld and the appellants’ challenge to it dismissed.
The respondents ’ irreparable harm
[65] Concerning the second requirement that it must be shown on a balance of
probabilities that, should the enforcement order not be granted, the party seeking it
(here the respondents) will suffer irreparable harm , Davis J held that ‘ if no control is
taken of [the] delinquent debtor, there is a real risk that funds which would be needed
to pay unemployment insu rance claims (and which had been lent to Homii) might
27 Incubeta (above ) at para [17]: ‘[T]he primary meaning is unusual or different ; the secondary meaning
is markedly unusual or specially different ’.
28 Incubeta (above) at para [17]: ‘To be exceptional the circumstances concerned must arise out of, or
be incidental to, the particular case. ’
29 Incubeta (above) at para [17]: ‘Whether or not exceptional circumstances exist is not a decision which
depends upon the exercise of a judicial discretion: their existence or otherwise is a matter of fact which
the Court must decide accordingly. ’
17
never be recovered ’.30
[66] This risk of irreparable harm was for Davis J founded in fact . He list ed the fact
of several years of persistent default on the side of Homii . But he also, and more
importantly referred to the range of unrefuted allegations by the respondents that the
group of companies of which Homii and Urban are part (the A1 Group) are facing
severe financial strain, such that several companies that are part of the group have
appli ed for voluntary liquidation and that public money lent to some of these
companies by the PIC in terms of other loan agreements ha s been diverted from their
intended purpose .
[67] He conclude d that, against this background there was a real and substantial
risk that Homii or Urban will likewise be liquidated or the money lent Homii would be
diverted to other companies in the group . Should that happen, the harm would be
irreparable – the UIF would no longer be able to recover the money that it needed to
pay u nemployment insurance claims .31
[77] The appellants challenge these conclusions on two grounds . The y first point to
the fact that Davis J uses the phrase ‘real risk’ to describe that which he holds is
irreparable harm (‘ …there is a real risk that … funds m ight never be recovered’).
[78] To them the use of this phrase indicates that the harm that is anticipated is not
imminent enough – ie, too remote – to justify the drastic intervention that a section
18(3) enforcement order entails. In support of this point , they submit that the
respondent’s complaint of Homii’s default dates from 2021 , so that it is not open to
them now to argue that the risk of losing their funds is imminent .
[79] Second, the appellants seek to refute the responden ts’ averments concerning
the precarious financial position of the group of companies of which they are part. They
submit that the respondents provide no evidence to back up t hose averments, so that
they cannot withstand scrutiny . This to them renders the respondents’ fears of Homii
being liquidated voluntarily or diverting fund s to other companies in the A1 Grou p so
that th e respondents would be unable to recover their debt, speculative.
[80] Neither of these points can be sustai ned. In Knoop , the S CA describe s the test
30 Enforcement judgment at para [ 20] (emphasis added) .
31 Enforcement judgment at para [ 21] to [25] and [28].
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to determine whether there is irreparable harm for purposes of section 18 as that there
must be a ‘ real and substantial risk of immediate and irreparable harm being suffered
while waiting for the enrolment, hearing and outcome of the appeal ’.32 Davis J was in
this light clearly correct to use the phrase ‘real risk ’; and it could not be otherwise at
the stage of applying for a section 18 enforcement order that there can as yet only be
an apprehension of harm that has not yet realised – a risk of harm rather than already
harm itself .
[81] And although Knoop says that the harm , in addition to being irreparable must
also be immediate , this cannot mean that an applicant for an enforcement order must
be able to fix a date and time to the harm actualising – it simply means that the harm
must indeed be threa tening in the sense that it can occur any day and time .
[82] And this does seem to be the case here : In the context of by now more than
four years of seemingly wilful defa ult on the side of the appe llants, the respondents
have become aware that the A1 Group of companies of which the appellants are part
is crumbling , with several of the appellants’ sister companies opting for voluntary
liquidation and creditable allegations of the syphoning off and redistribution of public
money invested within the group . Given in particular the financial information blackout
the appellants have directed the past four years at the respondents , there clearly is a
‘real and substantial risk ’ that Homii will follow the example of its sister companies .
Should it do so, the loss of the public money that the UIF has investe d with Homii will
be irrevocable.
[83] The appellants’ attempt to refute on appeal the respondents’ averments
concerning the financial position of the A1 Group simply has no wings. To state the
obvious: In motion proceedings an applicant places the facts on which its application
is based before Court in a founding affidavit. The respondent can then attempt to refute
those facts by placing contradicting facts before the Court in its answering affidavit .
Bald denials as the appellants have offered up to now , not undergirded by
documentary or other evidence do not contradict the respondents ’ averments in the
founding and any furthe r affidavits. This is so in particular where, as here, the denying
party (the appellants) has all the information at its exclusive disposal with which , were
it possible, to dispel the averments in the respondents’ affidavits. The only conclusion
32 Knoop (above) at para [47] .
19
that can be drawn from the fact that the appellants have not despite ample opportunity
produced such evidence, is that there is none. In sum, these averments concerning
the A1 group’s financial condition stand, and this appeal must be decided on their
basis, as was the case with Davis J ’s enforcement judgment.
[84] Accordingly, the appellants ’ challenge to Davis J’s conclusion that the
respondents will suffer irreparable harm should the enforcement order not be granted
must be dismissed and the holding in this respect upheld.
The appellants’ irreparable harm
[85] This leaves only the question whether the appellants would suffer irreparable
harm should the enforcement order be allowed to stand .
[86] At the outset in considering this issue I must mention that it is only here that the
appellants’ purported reliance on section 45 of the Companies Act and the further
evidence in that respect that it wished to have admitted would have been relevant had
leave been given. As I understood it, the appellants wished to raise the alleged ab
initio voidness of the agreements due to non -compliance with section 45 as a further
factor indicating their irreparable harm . To them, it woul d be an injustice adding to their
supposed irreparable harm if they were to be held to agreements in the interim, with
serious consequences, that they know are void and will be declared such on appeal .
[87] If I characterise their submissions correctly concerning this, then they add
nothing . That a party subject to a section 18(3) order is held to an earlier order that
may later on appeal be set aside is inherent to the mechanism of an enforcement
order . This is true whatever the grounds of appeal are. W hile it is so that the prospects
of success on appeal may be higher on one ground than another , the prospects of
success on appeal are in the ordinary course not supposed to influence a Court in its
decision whether or not to grant an enforcement order. To do otherwise would
inevitably prefigure the appeal proper. So understood, it is unclear to me how , had we
given leave to the appellants to rely on section 45 and to introduce new evidence, this
would have assisted them in this appeal – how, indeed, this new defence and the
evidence supporting it, eminently relevant to the appeal itself, are at all relevant in this
appeal against the section 18(3) enforcement order.
[88] Turning bac k to the judgment a quo , on the issue of the appellants’ possible
20
irreparable harm should the 18(3) order be allowed to stand , Davis J held that all that
will happen if his order in the main application were enforced pending appeal , is that
the required shareholders’ meeting will be held and a new Board of Directors
appointed . This in itself presents no harm to the appellants: the new directors, as were
the old would be subject to the Companies act and their more general fiduciary duties
and the remedies those entail.
[86] Davis J proceeded to hold that there is nothing in the papers to sustain the
submissions on behalf of the appellants that such newly appointed directors would do
the appellants harm, whether by neglect or intent . On the contrary: Instead of effec ting
a ‘hostile t ake-over’, as the appellants darkly wa rned before us , it would clearly be in
the interest of the respondents once in control to do their best to save Homii rather
than destroy or dissipate it . This would secure the respondents’ investment , which is
the reason why the ‘exceptional remedy’ of a controlled take -over of Homii by the
respondents instead of simply a calling up of debt in the case of Homii’s default was
preferred in the Mezzanine and Cession and Pledge agreements .
[87] In any event, so Davis J concludes , should the appeal to the S CA be successful ,
the situation concerning control of Homii will simply revert to what it was before the
new directors were appointed, with nothing on the papers to show that Homii (and
Urban) would be any wo rse off than before. Accordingly, he concluded that no
irreparable harm in the event of grant of the enforcement order was shown by the
appellants .
[88] Before us, the appellants offered nothing in their challenge to Davis J’s holding
concerning their irreparable harm that had not already been properly canvassed and ,
to my mind correctly, rejected in the Court a quo . There was only one seemingly new
submission: Mr Harpur strongly pressed us to accept the possibility that, should new
directors for Homii be appointed pursuant to the enforcement order , they may direct
that the pending appeal before the S CA be abandone d. In this way, he continued, the
respondents would in this litigation become judges in their own ca use.
[89] Apart from being circular, this warning takes the matter no further. First, as with
all the other warnings of irreparable harm for the appellants should new directors be
appointed, this one is entirely speculative. We simply don’t know , and no evidence is
on the record to show , exactly w hat the new directors will or will not do. What we do
21
know, for which there is ample substantiation on the papers is that the respondents
and any new directors appointed by them have every incentive to act in, rather than
contrary to Homii’s interests . Sho uld they do differently, the speedy remedies afforded
by the Companies Act and by virtue of the directors’ fiduciary duties would be at the
appellants’ disposal .
[90] More importantly and to the point: Even were Mr Harpur’s warning to become
true and newly appointed directors abandoned the appeal to the S CA, this in and of
itself has nothing to do with the question of irreparable harm . It may very well be that
such a decision, other than ending the long trail of litigation between the parties , is in
some way harmful to the appellants’ interests . If that is sufficiently the case, the
appellants’ ordinary remedies for direc torial misconduct remain . But it may equally be
in the appellants’ best interest to abandon the appeal . This Court does not a nd cannot
now know. What is clear is that any decision to abandon the appeal is not inherently
harmful, irreparably or otherwise, to the appellant s.
[91] Accordingly, the appellants’ challenge in this appeal to Davis J’s holding that
they will suffer no irreparable harm should the enforcement order be granted , must be
dismissed. In light of this and my conclusions above concerning exceptional
circumstances and irreparable harm for the respondents , this means that the appeal
itself in its entirety also stands to be dismissed .
Costs
[91] During the hearing of this appeal , before us and in the respondents’ various
sets of heads of argument , at various points oblique references were made to the
possibility that this appeal was tactical and intended only to del ay the process of the
respondents getting and implementing what they said was inevitable relief . In this
sense there were suggestions that the appeal was brough in bad faith.
[92] None of these were taken any further or canvassed before us. In this light there
is no reason that costs should be ordered at anything other than the ordinary scale .
Likewise , there is no reason , both in the appeal and concerning the appellants’ section
45 application , to depart from the general rule that costs follow the result.
[93] This means that the appellants are liable to pay the costs , including the costs
of three counsel (the employment of which the complexity of this matter clearly
warranted) , arising from both the appeal itself and the application to rely on section 45
22
and to introduce new evidence.
[94] In this light we order that:
1. The application for leave to rely on section 45 of the Companies Act 71 of 2008
and to introduce new evidence on appeal, is dismissed.
2. The appeal is dismissed .
3. The appellants are ordered to pay the respondents ' costs, including the costs
of three counsel, on scale C, in the application for leave to rely on section 45 of
the Companies Act and to introduce new evidence, and in the appeal.
COUNSEL FOR THE APPELLANTS :
INSTRUCTED BY:
COUNSEL FOR THE RESPONDENT: GD Harpur SC JFD Brand
Acting Judge of the High Court
Gauteng Division, Pretoria
Mooney Ford Attorneys
J Wasserman SC
23
M Msomi
A Vorster
INSTRUCTED BY: TGR Attorneys
DATE OF THE HEARING: 13 May 2025
DATE OF JUDGMENT: 17 June 2025