About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2026
>>
[2026] ZAGPJHC 202
|
|
Naidoo N.O and Another v Nedbank Ltd (Leave to Appeal) (2025/059360) [2026] ZAGPJHC 202 (4 March 2026)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
CASE
NO: 2025-059360
1)
REPORTABLE
2)
OF INTREST TO OTHER JUDGES
3)
REVISED
In
the matter between
KARUNAGAREN
NAIDOO N.O
First
Applicant
EMPEROR
FOODS (PTY) LTD
(IN
BUSINESS RESCUE)
Second
Applicant
and
NEDBANK
LTD
Respondent
JUDGMENT:
LEAVE TO APPEAL
ANDRÉ
GAUTSCHI
AJ
[1]
This is an application for leave to appeal by the applicants, whose
application I dismissed with costs on 10 November
2025. In this
judgment I use the same terminology as in my main judgment.
[2]
The test I am enjoined to apply has been stated as follows:
“…
section
17(1)(a)
of the
Superior Courts Act 10 of 2013
makes it clear that
leave to appeal may only be given when the judge concerned is of the
opinion that the appeal
would
have a reasonable prospect of
success, or there is some other compelling reason why it should be
heard.
An
applicant
for leave to appeal must convince the court on proper grounds that
there is a reasonable prospect or realistic chance
of success on
appeal. A mere possibility of success, an arguable case or one that
is not hopeless, is not enough. There must be
a sound, rational basis
to conclude that there is reasonable prospect of success on
appeal
[1]
.
[3]
The applicants’ case has changed from the founding papers to
the application for leave to appeal. In basic terms,
its case in the
founding papers was that the
respondent had been
entitled to collect the debts sold and purchased under the IDA but
was not entitled to collect any further debts
under the Cession to
pay off the Term Loan or the instalment sale agreements.
[4]
The argument before me in the application for
leave to appeal deviated from and was not entirely covered by the
notice of application
for leave to appeal. I shall nevertheless
engage with the merits of the argument.
[5]
Counsel for the applicants submitted before me that once the IDA was
cancelled, restitution had to take place, and Nedbank
was no longer
the owner of the book debts not yet collected. The reliance on
restitution is misplaced. Clause 18.4 of the IDA provides
that:
“
18.4 In the
event of cancellation, and notwithstanding same, the Seller’s
obligations will continue
in respect of
each Debt
purchased
by Nedbank prior to
such cancellation and remain of full force and effect until all
amounts owing to Nedbank have been paid in
full.”
and clause 24.3 provides
that:
“
24.3 In the
event of any termination the parties’ obligations will continue
in respect of
each Debt
purchase
d
by Nedbank prior to the expiration of such notice and remain of full
force and effect until all amounts to Nedbank have been paid
in
full.”
[6]
These clauses make it clear that a cancellation or termination does
not require restitution, but provides for the parties’
obligations to continue until Nedbank has been settled in full.
[7]
It is also incorrect that Nedbank, after cancellation of the IDA, was
no longer the owner of any book debts which it had
purchased but not
yet collected. The IDA is clear that ownership of debts passed to
Nedbank on delivery, which is effectively the
act of cession, and
given the clauses quoted above which provide for obligations to
continue after cancellation or termination,
Nedbank does not, at
common law, lose ownership of the debts merely because it has
cancelled the IDA.
[8]
Counsel for the
applicants then relied on
section
133
of the
Companies Act, 2008
which provides for a moratorium on
legal proceedings with the advent of business rescue. Regard must
however be had to
sections 134(3)
and
136
(2A)(c), which preserve
security held.
[9]
I had
relied in the main judgment on the cases of
BP
Southern Africa
[2]
and
Kritzinger
[3]
.
The applicants contend that those cases were wrongly decided and that
I erred in relying on those.
[10]
Not only
were those cases followed in
Van
den Heever NO v Van Tonder
[4]
but they are also in line with the SCA decision in
Louis
Pasteur Holdings
[5]
,
where
section 134(3)
of the Act was analysed and the judgment
concluded with the following:
“
Obviously, the
security held by a person in relation to a debt owed by a
company
in business rescue, is not nullified by the business rescue
procedure.”
[6]
[11]
There is therefore no merit in the new approach by the applicants
that Nedbank
had wrongly collected the book debts
under the IDA. The question then still remains, whether
Nedbank
had been entitled to collect further book debts
under the Cession to settle the Term Loan and the instalment sale
agreements.
[12]
The position may be put simply as follows: A cession
in
securitatem debiti,
which is the type of cession at play in the
Cession, allows the cessionary to collect the book debts of the
company (the second
applicant) and precludes the company from
collecting those book debts itself. The authorities are to the effect
that that position
does not change with the advent of business
rescue. The applicants conceded in the main application
(correctly in my view)
that Nedbank had been entitled to collect the
book debts under the IDA, but complained about its collection of book
debts under
the Cession. Nedbank’s rights are however in my
view no different under the Cession from the rights under the IDA. In
each
case it held security in the form of a cession.
[13]
Counsel for the applicants also submitted that Nedbank
ought
to have obtained the BRP’s consent to collect the book debts.
But
section 134(3)
requires the BRP to obtain
Nedbank’
s
consent to dispose of property over which another person (in this
case
Nedbank)
has any security, and not the
other way around.
[14]
Counsel for the applicants also repeated the
submission made in the main application, namely that book debts
collected had been
appropriated to the Term Loan and the two
instalment sale agreements before the outstanding balance on the IDA
had been settled,
and therefore Nedbank was using “its own
money” to settle those debts. I rejected that submission in my
main judgment,
and I am not persuaded that it has any merit, even
after having reconsidered it. The fact is that the respondent was
entitled to
collect the book debts (its security) under both the IDA
and the Cession, and it does not matter in my view in what order
these
were collected.
[15]
Finally, I was implored that there was a need for
certainty for business rescue practitioners, and that my main
judgment allows
for a creditor holding security to be preferred. That
is however exactly what the
Companies Act allows
for a creditor
holding security. In my view there is sufficient certainty regarding
the respective rights of business rescue practitioners
and creditors
holding security.
[16]
I am accordingly not satisfied that there is a reasonable prospect of
another court coming to a different conclusion,
or that there is any
other compelling reason for leave to appeal to be granted.
[17]
The application for leave to appeal is dismissed with costs, the
costs of counsel to be taxed on High Court Scale C.
ANDRÉ
GAUTSCHI
Acting
Judge of the High Court
Date of hearing:
30
January 2026
Date
of judgment:
4
March 2026
Counsel
for the applicants:
Adv
N Nortjé
(Instructed
by Gothe Attorneys Inc)
Counsel
for the respondent:
Adv
M de Oliveira
(Instructed
by Kim Warren Attorneys)
[1]
MEC
for Health, Eastern Cape v Mkhitha
(1221/15)
[2016] ZASCA 176
(25 November 2016) at paragraphs 16 and
17
[2]
BP
Southern
Africa (Pty) Ltd v Intertrans Oil SA (Pty) Ltd and Others
2017 (4) SA 592
(GJ) at para 45
[3]
Kritzinger
v
Standard
Bank of South Africa
[2013] ZAFSHC 215
at para 49
[4]
2021 JDR 2612 (GJ) (a Full
Bench decision)
[5]
Louis
Pasteur Holdings
(Pty)
Ltd
and Others v ABSA Bank Ltd and Others
2019 (3) SA 98
SCA at paras 22 and 23
[6]
Louis
Pasteur Holdings
supra
at para 23