IN THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL LOCAL DIVISION, DURBAN
CASE NO: D3822/2025
In the matter between:
THE TRUSTEES OF THE INKWAZI TRUST FIRST APPLICANT
WARTBURG INCORPORATED SECOND APPLICANT
and
SKEMA HOLDINGS (PTY) LTD FIRST RESPONDENT
THE COMPANIES AND INTELLECTUAL PROPERTY
COMMISSION SECOND RESPONDENT
MACSTEEL SERVICE CENTRES SA (PTY) LTD and
ROBERT FELLNER-FELDEGG THIRD RESPONDENT
(AFFECTED PARTIES)
(Application in terms of s 131 of the Companies Act 71 of 2 008 for the
commencement of business rescue proceedings)
ORDER
The following order is made:
1. The application to place the first respondent under supervision and to
commence business rescue proceedings in terms of s 131 of the Companies Act 71
of 2008 is dismissed.
2. The applicants’ application to strike out is dismissed.
2
3. The applicants are ordered, jointly and severally, the one paying the other to
be absolved, to pay the costs of the application on scale B , including the costs
occasioned by the interlocutory applications and the costs of two counsel where so
employed.
JUDGMENT
Delivered: 13 April 2026
Masipa J
Introduction
[1] This is an application in terms of s 131 of the Companies Act 71 of 2008 (“the
Companies Act”) for an order placing the first respondent, Skema Holdings (Pty) Ltd
(“Skema Holdings”), under supervision and commencing business rescue
proceedings. The application is opposed principally by Macsteel Service Centres SA
(Pty) Ltd (“Macsteel”) and Mr Robert Fellner -Feldegg (“Fellner-Feldegg”), as affected
parties, each of whom holds, or asserts, a substantial claim against Skema Holdings
and each of whom contends that the application is devoid of merit and constitutes an
abuse of the business rescue procedure.
[2] The application did not arise in a neutral setting. By the time it was launched,
winding-up proceedings against Skema Holdings had already been argued and
judgment in those proceedings had been reserved. Against that background, the
applicants seek to invoke the statutory machinery of Chapter 6 of the Companies
Act, contending that Skema Holdings is financially distressed but capable of rescue,
and that the preservation of the enterprise, its assets, and its broader commercial
ecosystem warrants intervention by the court.
[3] The opposing respondents contend, by contrast, that Skema Holdings has no
meaningful business of its own to rescue, that the so -called rescue plan is
speculative, reactive and dependent upon contingencies outside the company’s
control, and that the application was launched when it was because liquidation had
become imminent. On that footing, they submit that the application is not a bona fide
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invocation of the rescue procedure, but a last -minute attempt to avert or delay the
consequences of winding-up.
[4] The matter is further complicated by extensive interlocutory skirmishing.
There were applications to admit further affidavits, including supplementary founding
and answering affidavits; contentions concerning the status of Macsteel and Fellner -
Feldegg as creditors; arguments directed at the structure of the group, the location of
the axle business, the ownership of immovable properties, the identity of the
employer of the relevant workforce, and the practicality of realising property assets to
discharge indebtedness; and an application to strike out allegations that the business
rescue application is mala fide and abusive. In this matter, those interlocutory issues
cannot sensibly be severed from the merits, because they illuminate the very
character and reliability of the rescue case advanced.
[5] After the hearing, the parties drew to my attention a judgment delivered by
Mossop J in A1 Capital (Pty) Ltd v Urban Lifestyle Investment Holdings (Pty) Ltd and
Others1 involving similar issues in which business rescue applications were
dismissed and provisional liquidation relief was granted, as well as the application for
leave to appeal against that judgment. That judgment is not binding upon me, and
each matter must necessarily be decided on its own record. It nevertheless forms
part of the broader factual context because it dealt with materially similar contentions
concerning group structure, the movement of assets, and the asserted viability of
rescue within the Skema corporate environment.
[6] The central question remains whether, on the facts properly established on
these papers, the applicants have shown that Skema Holdings is financially
distressed and that there is a reasonable prospect of rescuing it within the meaning
of s 131(4) (a) of the Companies Act. Closely connected to that enquiry is the
of s 131(4) (a) of the Companies Act. Closely connected to that enquiry is the
question whether the application is, in truth, a bona fide invocation of the statutory
rescue process or whether it is being used to delay or avoid the consequences of
liquidation.
1 A1 Capital (Pty) Ltd v Urban Lifestyle Investment Holdings (Pty) Ltd and Others [2026] ZAKZDHC
21.
4
The factual background
[7] The applicants’ case, broadly stated, is that Skema Holdings forms part of a
long-standing and asset -rich corporate structure involved in manufacturing, mining,
and property -related activities. It is said that the group has generated substantial
revenue over time, that it has a significant asset base, and that, although liquidity
has come under strain because of the immediate enforcement of substantial debts,
the underlying enterprise remains viable. The applicants emphasise that business
rescue is intended by the legislature to permit rehabilitation rather than destruction
where there remains a realistic possibility of preserving the company or yielding a
better return to creditors than liquidation would.
[8] The opposing respondents approach the matter from a different premise.
They emphasise that the application is not for the rescue of the group as a whole,
nor for the rescue of Skema Mining or other subsidiaries, but for the rescue of
Skema Holdings itself. They contend that, when the record is analysed with care,
Skema Holdings is not shown to be carrying on a meaningful operational business of
its own. On their case, the founding papers blurred the distinction between the
holding company and other group entities, relied on assets held elsewhere, invoked
employment considerations that related to subsidiaries rather than to Skema
Holdings, and put forward a rescue strategy that matured only after answering
affidavits exposed deficiencies in the founding case.
[9] One of the recurring themes in the papers and in oral argument was the way
in which the applicants presented the group and the holding company almost
interchangeably. The applicants argued that the collapse of Skema Holdings would
have severe implications for the wider group, including mining operations and
employment. The respondents argued that this was a deliberate or at least
impermissible blurring of corporate personality and that what had to be shown was
impermissible blurring of corporate personality and that what had to be shown was
not that the group had value, but that Skema Holdings itself had a rescuable
business, a workable restructuring pathway, and a factual basis for the contention
that a business rescue practitioner could achieve either rehabilitation or a better
return for affected persons.
5
[10] That criticism is not merely formalistic. The Companies Act recognises
companies as separate juristic persons. A rescue application concerning one
company cannot succeed merely because value, activity, or employment exists
elsewhere in the group. The court must determine whether the company before it is
itself financially distressed and capable of rescue, and whether the statutory
intervention is justified on the evidence relating to that company.
Preliminary issues: further affidavits and the evolving case
[11] Before turning to the substantive merits, it is necessary to deal with the
proliferation of affidavits. A striking feature of the application is the repeated filing of
supplementary affidavits by the applicants. These affidavits were not merely
explanatory in the sense of clarifying some minor ambiguity or providing an
incidental update. Rather, they were filed, repeatedly, in response to concrete
criticisms advanced by the respondents that exposed material deficiencies in the
founding papers. The pattern that emerges is not of a case fully and coherently set
out from the start, but of a case that evolved, and at times materially shifted, as
weaknesses were identified.
[12] The first major difficulty raised by the respondents concerned the existence
and location of the operational business, particularly the so -called axle business.
Macsteel contended in its answering papers that the axle business had been
transferred out of Skema Holdings and was no longer being conducted by it. The
founding affidavit did not adequately explain the relationship between Skema
Holdings and the entity said to be conducting that business, nor did it clearly identify
the legal and commercial basis on which the business was said to remain
attributable to Skema Holdings. In response, the applicants filed supplementary
affidavits in which it was asserted, with greater clarity than before, that the
arrangement was not a transfer of ownership but a lease or intra -group utilisation of
arrangement was not a transfer of ownership but a lease or intra -group utilisation of
assets. No comprehensive documentary foundation for this arrangement was
provided in the founding papers, and the explanation emerged only after the difficulty
had been squarely raised.
[13] The second major difficulty concerned the immovable properties on which the
rescue strategy depended. The respondents pointed out that many of the properties
6
relied upon by the applicants were owned by subsidiaries and were subject to
mortgage bonds. The founding affidavit did not clearly explain how those properties
could lawfully and practically be brought within the control of Skema Holdings or be
made available for the purposes of a rescue plan for that company. In later affidavits,
the applicants sought to introduce further material suggesting that the properties
could be transferred, sold, or otherwise utilised as part of a restructuring exercise.
Those explanations were not part of the original case and did not satisfactorily
engage the legal and practical constraints associated with such transfers, including
the rights of secured creditors and the requirements of s 134(3) of the Companies
Act.
[14] The third major difficulty concerned the identity of the employer and the
number of employees said to be at risk. The applicants relied heavily, in both the
papers and oral argument, upon the preservation of employment as a reason to
prefer business rescue to liquidation. The respondents, however, pointed out that the
employees relied upon by the applicants were not shown to be employees of Skema
Holdings itself, but rather of other entities within the group. In response, the
applicants filed further affidavits addressing the group structure and the
interrelationship between entities. But what remained absent was a clear evidential
basis demonstrating that Skema Holdings itself employed the identified workforce or
that their continued employment depended upon the rescue of that company rather
than of another corporate entity.
[15] The fourth major difficulty concerned the coherence and maturity of the
rescue plan itself. The respondents criticised the founding affidavit for lacking binding
agreements for the sale of properties, firm funding commitments, and a sufficiently
concrete explanation of how the indebtedness would be managed. In reply and
supplementary papers, the applicants sought to bolster the case by attaching or
supplementary papers, the applicants sought to bolster the case by attaching or
referring to expressions of interest, indicative offers, prospective funding
arrangements, and further detail about property sales. Many of these materials were
conditional, incomplete, unsigned, lapsed, or otherwise non -binding. They were also
introduced only after the deficiencies had been identified. That matters because the
court is not asked to assess a hypothetical plan that may one day solidify; it is asked
to grant final relief on motion on the strength of a present factual foundation.
7
[16] The fifth difficulty concerned the true financial position of Skema Holdings,
including the treatment of major debts and the absence of sufficiently reliable and
current financial information. The respondents pointed to what they contended were
inconsistencies in the financial statements, including the classification of judgment
debts as non-current liabilities and the absence of proper reflection of the immediacy
of the indebtedness. In supplementary affidavits, the applicants sought to explain the
financial position and emphasise the company’s asset base and the liquidity nature
of the distress. But the problem remained that the case continued to be shaped and
reshaped in reaction to attack, rather than presented as a fully formed business
rescue case from inception.
[17] The final difficulty concerned timing. The respondents stressed that the
application was launched only after the winding -up proceedings had been argued
and judgment reserved. The applicants responded that business rescue can be
invoked at any stage, even late in the day, and that timing alone cannot render an
application abusive. That proposition is correct as a matter of law. But the
explanation for why business rescue was not pursued earlier, when the debts had
long been due and when the company’s alleged financial distress had already
manifested, did not appear with any force in the founding affidavit. It emerged more
fully only later, including through oral submissions.
[18] It is so that the court retains a discretion to admit further affidavits in the
interests of justice. Given the magnitude of the matter and the fact that the parties
themselves engaged with the expanded record, I am prepared to admit the further
affidavits. But the very fact that the applicants repeatedly sought to patch,
supplement, and elaborate their case after deficiencies had been pointed out has a
direct bearing on the weight to be attached to the alleged rescue prospects. As was
direct bearing on the weight to be attached to the alleged rescue prospects. As was
stated in Director of Hospital Services v Mistry,2 an applicant must stand or fall by its
founding papers. A case constructed incrementally in response to criticism
undermines the claim that there existed, at the time of launch, a coherent factual
foundation for the relief sought.
2 Director of Hospital Services v Mistry 1979 (1) SA 626 (A) at 635H–636A. See also Pountas' Trustee
v Lahanas 1924 WLD 67 at 68.
8
The legal framework
[19] Section 131(4)(a) of the Companies Act provides that a court may make an
order placing a company under supervision and commencing business rescue
proceedings if the court is satisfied that the company is financially distressed and
there is a reasonable prospect for rescuing the company. The section confers a
judicial power, and not a mechanical function. The court is not called upon merely to
defer everything to a future creditors’ meeting; it must perform a gatekeeping role at
the point where a company seeks access to the statutory moratorium and
restructuring machinery.
[20] The meaning of “reasonable prospect” has been considered in several
authorities. In Oakdene Square Properties (Pty) Ltd and Others v Farm
Bothasfontein (Kyalami) (Pty) Ltd and Others ,3 Brand JA explained that the
requirement does not demand proof on a balance of probabilities that rescue will
succeed, but neither is mere speculative optimism enough. At para 29 -31 the
Supreme Court of Appeal (“the SCA”) stated, in essence, that what is required is a
reasonable possibility grounded in objectively ascertainable facts. That formulation is
important because it recognises that business rescue is forward -looking while
simultaneously insisting that the future-looking case be anchored in evidence.
[21] In Southern Palace Investments 265 (Pty) Ltd v Midnight Storm Investments
386 Ltd ,4 Eloff AJ emphasised that it is not enough merely to assert that the
company can be rescued. There must be a factual basis for the contention. The
court held that business rescue is not intended to suspend the ordinary
consequences of commercial failure simply because a company wishes for time, but
only where there is a demonstrable factual platform for believing that the intervention
has some real prospect of utility.
[22] The concern that business rescue may be used improperly to delay liquidation
has also been recognised. In Van Staden NO and Others v Pro -Wiz Group (Pty)
has also been recognised. In Van Staden NO and Others v Pro -Wiz Group (Pty)
3 Oakdene Square Properties (Pty) Ltd and Others v Farm Bothasfontein (Kyalami) (Pty) Ltd and
Others 2013 (4) SA 539 (SCA); [2013] ZASCA 68 (Oakdene Square Properties) para 29.
4 Southern Palace Investments 265 (Pty) Ltd v Midnight Storm Investments 386 Ltd 2012 (2) SA 423
(WCC) (Southern Palace) paras 21-23.
9
Ltd,5 the SCA warned against the abuse of business rescue to postpone the
inevitable demise of a company that cannot be rescued. The purpose of Chapter 6 is
not to create a sanctuary against creditors while a company continues without a
realistic path to rehabilitation.
[23] The applicants argued that the threshold is low and that this Court is not
required to determine the final sustainability of the business rescue plan because
those issues are for a later meeting of creditors and, if necessary, later court
oversight under the Companies Act. That submission is only partly correct. It is true
that a court hearing a s 131 application is not required to approve a final plan or to
insist on certainty. But it is not correct that the court need not examine whether the
proposed route to rescue has an adequate factual basis. If that were so, the statutory
requirement of a reasonable prospect would be deprived of meaningful content.
Macsteel’s status as a creditor
[24] The applicants contended that Macsteel should not be treated as a creditor for
purposes of this application because the judgment obtained by it is under appeal and
because Skema Holdings has a counterclaim against Macsteel which, so it is said,
exceeds Macsteel’s claim. The applicants argued that, in substance, Macsteel is
therefore not a de facto creditor and that its opposition should be viewed through that
lens.
[25] This submission cannot be sustained. The noting of an appeal does not
render a judgment a nullity. It is well established that an appeal suspends the
operation and execution of a judgment but does not affect its existence. In South
Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) Ltd ,6 the
Appellate Division explained that the effect of an appeal is to suspend the execution
of the judgment, not to extinguish it. The judgment accordingly remains extant and
continues to exist in law unless and until it is set aside on appeal.
continues to exist in law unless and until it is set aside on appeal.
5 Van Staden NO and Others v Pro -Wiz Group (Pty) Ltd 2019 (4) SA 532 (SCA); [2019] ZASCA 7
para 22.
6 South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) Ltd 1977 (3) SA 534
(A) at 545H–546A.
10
[26] Section 18(1) of the Superior Courts Act 10 of 2013 suspends the operation
and execution of a decision pending appeal, unless a court orders otherwise, but it
does not extinguish the underlying judgment debt. What is suspended is
enforceability in the execution sense, not the legal existence of the judgment. That
distinction is important because the applicants’ argument tended to conflate the two.
[27] The counterclaim relied upon by the applicants does not alter the position. It
was common cause in argument that the counterclaim was dismissed by the relevant
court and is itself the subject of an appeal. Until that dismissal is set aside, the
counterclaim does not constitute an enforceable claim capable of neutralising
Macsteel’s judgment. In Kalil v Decotex (Pty) Ltd and Another ,7 the Appellate
Division made it clear that a party seeking to rely on a defence or counterclaim must
demonstrate a bona fide and reasonable basis for it. A dismissed claim cannot
simply be elevated into a present offset against an extant judgment debt.
[28] It follows that Macsteel remains, for purposes of this application, a judgment
creditor whose claim must be taken into account in assessing the company’s
financial position, the likely voting dynamics in any rescue process, and the realism
of the alleged rescue prospects. That does not mean Macsteel’s position is beyond
scrutiny; it simply means that the applicants’ attempt to write Macsteel out of the
creditor picture cannot succeed.
Fellner-Feldegg’s status as a creditor
[29] The applicants likewise sought to minimise the significance of Fellner -
Feldegg’s claim, contending that various disputes, defences, and alternative
payment options exist and that his insistence on immediate payment has itself
contributed to the company’s predicament. But it is common cause that Fellner -
Feldegg obtained judgment against Skema Holdings and that the indebtedness
remains unpaid.
Feldegg obtained judgment against Skema Holdings and that the indebtedness
remains unpaid.
[30] The applicants referred to the principles applicable where a creditor seeks
winding-up on a debt that is bona fide disputed on reasonable grounds. Those
principles are well established. In Badenhorst v Northern Construction Enterprises
7 Kalil v Decotex (Pty) Ltd and Another 1988 (1) SA 943 (A) (Kalil) at 979H–980B; 980D–G.
11
(Pty) Ltd,8 it was held that liquidation proceedings are not to be used as a means of
enforcing payment of a debt that is genuinely disputed on reasonable grounds. That
principle was reaffirmed in Kalil at 979H–980B.
[31] But that is not the present situation. This is not a case in which a creditor
seeks winding -up on a debt whose existence is genuinely uncertain. The debt in
question has already been reduced to judgment. The point of present relevance is
not whether Fellner-Feldegg was entitled to sue, but whether his judgment debt is a
material fact in assessing Skema Holdings’ financial distress and the plausibility of
the asserted rescue path. Plainly it is.
[32] To the extent that the applicants have defences, complaints, or criticisms of
his enforcement stance, those do not detract from the fact that Skema Holdings has
failed over an extended period to satisfy substantial indebtedness. That
circumstance weighs heavily in the present enquiry. The further contention that
Fellner-Feldegg’s conduct in enforcing his judgment constitutes an impediment to
rescue must be evaluated against that background. A creditor is entitled to enforce a
valid judgment. The fact that such enforcement creates commercial pressure does
not, without more, convert a speculative restructuring proposal into a viable rescue
plan.
Property realisation and the alleged obstruction by Fellner-Feldegg
[33] A central plank of the applicants’ case was that the property component of the
business is viable and that the company’s financial difficulties are capable of being
addressed through the structured sale of immovable properties. It was submitted that
a number of transactions had already been concluded that further deals were under
negotiation, and that the reason the strategy had not already yielded the intended
result lay largely in the conduct of Fellner -Feldegg. According to the applicants, he
insisted upon full immediate payment of the judgment debt and refused to cooperate
insisted upon full immediate payment of the judgment debt and refused to cooperate
with mechanisms involving releases against specific properties or phased payment
through mortgage-related arrangements.
[34] That argument cannot simply be dismissed, because it was one of the
applicants’ principal substantive answers to the charge that the rescue plan is
8 Badenhorst v Northern Construction Enterprises (Pty) Ltd 1956 (2) SA 346 (T) at 347H–348A.
12
speculative. The applicants’ case was not merely that there are properties of value,
but that there exists a practical route to convert that value into liquidity. They further
argued that business rescue is intended to operate in the collective interests of
affected persons and that a single creditor ought not to be permitted to frustrate a
viable restructuring to the prejudice of the enterprise, other creditors, shareholders,
and employees.
[35] There is some force in the proposition that Chapter 6 of the Companies Act
seeks to balance the rights and interests of all relevant stakeholders. The applicants
relied in argument upon the statutory purpose in s 7 (k) of the Companies Act , which
indeed reflects a legislative preference for rescuing viable distressed companies
where that can be achieved efficiently and fairly. They also argued that the mere
insistence of a creditor upon its own immediate recovery does not, without more,
answer the statutory question whether rescue would better serve the interests of all
affected persons.
[36] But that is not the end of the matter. Fellner -Feldegg is a judgment creditor.
He is legally entitled to insist upon the rights flowing from that judgment. The
Companies Act does not compel a creditor, prior to the adoption of a lawful rescue
plan, to accept a phased arrangement or to release security incrementally simply
because the company considers that commercially preferable. The court must
therefore be careful not to convert the applicants’ complaint about creditor
intransigence into a substitute for proof of rescue prospects.
[37] The real question is not whether Fellner -Feldegg ought, as a matter of
commercial reasonableness, to have been more accommodating. The question is
whether, on the objective facts placed before the court, there exists a reasonable
prospect that the company can be rescued. When the matter is approached in that
way, the difficulty for the applicants becomes apparent. The proposed sales are not
way, the difficulty for the applicants becomes apparent. The proposed sales are not
shown to be uniformly binding, unconditional, immediately executable, or sufficient in
themselves to discharge the debts in the time and manner suggested. In several
instances the material relied upon consists of expressions of interest, indicative
arrangements, or transactions requiring further steps. The implementation of the
13
strategy depends upon contingencies outside the company’s unilateral control,
including releases, transfers, and creditor cooperation.
[38] Oakdene Square Properties makes it plain that a reasonable prospect of
rescue must be founded upon objectively ascertainable facts. A plan that depends
materially upon hoped-for concessions by a creditor, or upon uncertain future events
which are not shown to be sufficiently concrete, does not satisfy that standard merely
because it is commercially imaginable. The applicants’ argument about obstruction
therefore does not ultimately strengthen the case; it exposes its dependence upon
events that the company cannot compel and that are not shown to be sufficiently
secure.
The axle business, assets, and employees
[39] The axle business featured prominently in the papers and oral argument
because it went directly to the question whether Skema Holdings has any real
business to rescue. The applicants’ position was that there had been no true transfer
of the axle business out of Skema Holdings. Rather, so it was said, the assets
remained owned by Skema Holdings and were used within the group pursuant to a
leasing or internal operational arrangement. The applicants sought to use this
contention to answer the charge that Skema Holdings is an empty shell or merely a
passive holding company.
[40] The difficulty for the applicants is that this explanation was neither clearly nor
fully articulated in the founding affidavit. One would have expected that, if the
continued existence of the axle business within Skema Holdings was central to the
rescue case, the founding papers would have set out with precision the ownership of
the assets, the identity of the operating entity, the contractual terms of the alleged
lease or use arrangement, the revenue flow, the employee allocation, and the
practical consequences for rescue. Instead, those matters only came into focus after
the respondents had challenged the applicants on them.
the respondents had challenged the applicants on them.
[41] The respondents, on the other hand, contended that the axle business had
effectively moved to another entity, and that the applicants’ later attempt to
characterise the arrangement as a lease was reactive and inadequately
14
documented. They argued that this was symptomatic of a broader problem in the
applicants’ case: the blending together of the businesses and assets of different
entities as if the group were a single undifferentiated economic unit.
[42] On the papers before me, the respondents’ criticism has force. The
applicants have not provided a sufficiently clear and contemporaneous documentary
foundation for the alleged continued location of the axle business within Skema
Holdings. Nor have they established, with the required clarity, that the revenue -
generating features of that business remain attributable to Skema Holdings as
opposed to another group entity. This uncertainty is not peripheral. It goes to the
core enquiry whether the company sought to be rescued is itself carrying on a viable
business capable of rehabilitation.
[43] The same applies to the asset structure more broadly. The applicants sought
to rely on substantial value said to reside in immovable property. But value
somewhere in a corporate group is not the same as value available to the company
under rescue. The respondents’ contention that many properties are held by
subsidiaries and are encumbered was not convincingly displaced. That matters
because the applicants’ rescue theory depends heavily on using property values to
generate liquidity, yet the practical and legal route for doing so on behalf of Skema
Holdings was never clearly and fully mapped in the founding papers.
[44] Employment considerations also require proper treatment. The applicants
argued that approximately 190 employees would be affected if liquidation occurred
and that Chapter 6 was designed precisely to protect such interests where possible.
That is an important policy consideration. But once again, the question is not
whether jobs in the wider group matter; they plainly do. The question is whether the
employment considerations relied upon establish that Skema Holdings itself has a
employment considerations relied upon establish that Skema Holdings itself has a
rescuable business. The respondents’ challenge, namely that the employees relied
upon are not shown to be employees of Skema Holdings, was not satisfactorily
answered on the papers.
Plascon-Evans and disputes of fact
15
[45] This application is brought on motion for final relief. Where disputes of fact
arise, the principles stated in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty)
Ltd 9 apply. The Appellate Division held:
‘… where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a
final order … may be granted if those facts averred in the applicant’s affidavits which have
been admitted by the respondent, together with the facts alleged by the respondent, justify
such an order...’10
[46] This does not mean that a respondent can defeat final relief by any fanciful
denial. But where the respondent’s version is not far -fetched, clearly untenable, or
demonstrably false, the court is bound to determine the application on that footing. In
this matter, the respondents’ version that Skema Holdings does not conduct a
meaningful operational business of its own, that many of the assets relied upon lie
outside it or are encumbered, and that the alleged rescue plan is speculative and
dependent upon contingencies, cannot be rejected as far -fetched or untenable. On
the contrary, that version is supported by the objective difficulties already discussed.
[47] The Plascon-Evans rule is of particular significance here because the
applicants sought final relief while presenting a case that depended upon contested
assertions regarding the axle business, the location of employees, the availability of
properties, and the workability of the realisation strategy. Where those contested
features are not conclusively established in the applicants’ favour and the
respondents’ contrary account is plausible and supported, the court cannot simply
prefer the applicants’ more hopeful characterisation of matters.
Evaluation
[48] The enquiry into whether there is a reasonable prospect of rescuing the
company must be grounded in the facts as established on the papers. Once one
strips away general references to the strength of the group and focuses on Skema
strips away general references to the strength of the group and focuses on Skema
Holdings itself, the applicants’ case becomes significantly weaker.
9 Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) (Plascon-Evans) at
634E–635C.
10 Ibid at 634H-I.
16
[49] First, the evidence demonstrates that Skema Holdings has failed to satisfy
substantial debts over a prolonged period. The indebtedness to Fellner -Feldegg
remains unpaid notwithstanding judgment. Macsteel likewise holds a judgment
which, although under appeal, remains extant. This state of affairs is indicative of
commercial insolvency. The applicants sought to characterise the problem as one of
liquidity only, but the practical inability to meet major obligations over time is itself the
hallmark of financial distress in the sense relevant to Chapter 6.
[50] Secondly, the existence of a viable business within Skema Holdings has not
been satisfactorily established. The explanation relating to the axle business is
unclear and unsupported by the founding papers. The respondents’ version that the
operational business resides elsewhere in the group is consistent with the objective
facts and with the applicants’ need to supplement their case once the point was
raised. A company whose own operational identity remains uncertain is not easily
shown to be rescuable in the statutory sense.
[51] Thirdly, the reliance on immovable property is problematic. The properties are
not all shown to be owned by Skema Holdings and many are encumbered. The
proposed restructuring is contingent upon events not shown to be achievable as of
right, including the availability of assets held by other entities, the cooperation of
secured creditors, and the orderly completion of transactions that are in several
instances conditional or incomplete. Value in property does not by itself establish
rescue prospects; what matters is the realistic ability of the company to convert that
value into a lawful and workable rescue outcome.
[52] Fourthly, the issue of employees does not materially advance the applicants’
case on the facts. The preservation of employment is an important statutory
consideration, but the employees relied upon are not shown, with the required clarity,
consideration, but the employees relied upon are not shown, with the required clarity,
to be employees of Skema Holdings itself. The applicants’ invocation of employment
consequences therefore demonstrates the broader group significance of the matter
but does not resolve the narrower question whether Skema Holdings itself has a
rescuable enterprise.
17
[53] Fifthly, the proposed rescue plan is speculative. It relies upon contingent
arrangements, hoped -for cooperation, developing property deals, prospective
funding, and assumptions about the availability and deployment of assets. It was
also developed incrementally in response to criticism. That matters not merely as a
procedural point, but because it shows that the factual foundation required by
Oakdene Square Properties and Southern Palace was not present in coherent form
when the application was launched.
[54] Sixthly, the applicants’ submission that this Court need not assess the
sustainability of the plan because that will be determined by creditors at a later stage
is incorrect. It is true that the court is not called upon now to approve a final rescue
plan. But it is very much called upon to decide whether there is a reasonable
prospect of rescue. That jurisdictional requirement cannot be postponed to a future
meeting. To do so would allow the statutory moratorium to be triggered on the basis
of little more than aspiration.
[55] Seventhly, the timing of the application is significant. It was launched after the
winding-up proceedings had been argued and judgment reserved. Timing alone
does not prove abuse, and the law permits business rescue to be invoked late. But
timing is a relevant fact in evaluating bona fides. Here, when the timing is considered
together with the evolving nature of the applicants’ case, the lack of a coherent
founding plan, and the prolonged non -payment of debts, the inference that the
application is at least in part designed to delay liquidation is a compelling one.
[56] When all these considerations are taken together, the applicants have not
established that there is a reasonable prospect of rescuing Skema Holdings. At best
for them, they have shown that there may be value somewhere in the wider group
and that, if a range of favourable contingencies were to materialise, some
and that, if a range of favourable contingencies were to materialise, some
restructuring might be conceived. That is not enough. Chapter 6 requires a factual
foundation for a reasonable possibility of rescue of the company before the court.
That foundation is lacking.
The application to strike out
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[57] The applicants sought to strike out various allegations by the respondents to
the effect that the application was mala fide, self-serving, or an abuse designed to
delay liquidation and prejudice creditors. The applicants argued that such allegations
were scandalous, defamatory, and calculated to poison the court’s view of the
rescue application.
[58] Uniform rule 6(15) permits the court to strike out matter from affidavits that is
scandalous, vexatious, or irrelevant, with an appropriate costs order. The applicable
principles are settled. The mere fact that the matter is unflattering or strongly
expressed does not render it strikable. Relevance is the controlling consideration. In
Vaatz v Law Society of Namibia ,11 the court held, in substance, that relevant matter
ought not to be struck out merely because it is unpleasant or prejudicial in tone.
[59] In the present matter, the allegations sought to be struck out go directly to the
heart of the dispute. Whether the application is a bona fide rescue application or an
abuse intended to delay liquidation is not a side issue; it is integral to the court’s
evaluative task. The facts relied upon by the respondents in support of those
allegations include the timing of the application, the evolving and reactive nature of
the applicants’ case, the lack of a coherent founding plan, and the company’s failure
to satisfy long-standing debts. Those matters are plainly relevant.
[60] It may be accepted that some of the language employed by the respondents
is forceful. But forceful language, where it is directed at a live issue and supported by
factual allegations, does not justify striking out. To excise those allegations would
artificially sanitise the record and prevent the court from considering a material
aspect of the respondents’ opposition. Once the facts are examined, it becomes
clear that the allegations of abuse are not gratuitous rhetoric; they are part of the
clear that the allegations of abuse are not gratuitous rhetoric; they are part of the
substantive case advanced against the grant of business rescue.
[61] For those reasons, the application to strike out cannot succeed. The proper
course is to consider the allegations in context, attach to them such weight as the
facts justifies, and determine the merits accordingly. I have done so. The
11 Vaatz v Law Society of Namibia 1991 (3) SA 563 (NM) at 566H–567C.
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respondents’ allegations were relevant, and, on the facts ultimately established, they
were not unfounded.
Conclusion
[62] The applicants have failed to establish that there is a reasonable prospect of
rescuing Skema Holdings within the meaning of s 131(4) (a) of the Companies Act.
The evidence demonstrates prolonged non -payment of substantial indebtedness,
uncertainty as to the existence and location of the operational business, problematic
reliance on assets held outside the company or subject to encumbrances, unproven
employment consequences so far as Skema Holdings itself is concerned, and a
rescue case that evolved incrementally in response to attack.
[63] The application was also brought at a stage that strongly suggests an attempt
to avert or delay the consequences of winding -up proceedings already ripe for
judgment. While lateness alone is not determinative, in the context of this record it
reinforces the conclusion that the statutory process is being invoked without the
factual foundation required by the authorities.
[64] In the result, the application for business rescue must be dismissed. The
interlocutory attempt to strike out allegations of abuse must likewise fail. There is no
reason, in the circumstances of this case, why costs should not follow the result,
including the costs of two counsel where employed.
Order
[65] The following order is made:
1. The application to place the first respondent under supervision and to
commence business rescue proceedings in terms of s 131 of the Companies Act 71
of 2008 is dismissed.
2. The applicants’ application to strike out is dismissed.
3. The applicants are ordered, jointly and severally, the one paying the other to
be absolved, to pay the costs of the application on scale B , including the costs
occasioned by the interlocutory applications and the costs of two counsel where so
employed.
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___________________
MASIPA J
Details of the matter:
Date of Hearing: 13 March 2026
Date of Judgment: 13 April 2026
Appearances:
For the applicant: Mr GD Harpur SC
Instructed by: Shepstone & Wylie, Umhlanga Rocks
For the Affected Party: Hay & Scott Attorneys, Pietermaritzburg
(ROBERT FELLNER-FELDEGG)
Instructed by: Mr GME Lotz SC
For the Affected Party: Bentley Attorneys, Mount Edgecombe
(MACSTEEL SERVICE
CENTRES SA (PTY) LTD)
Instructed by: Mr IJ Zidel SC with Mr M Mostert