1
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
Case Number: 2025-067947
In the matter between:
In the matter between:
MasterCard Foundation Applicant
and
Africa Founders Ventures NPC (in business rescue) First Respondent
Barry Claude Urban N0 Second Respondent
Companies and Intellectual Property Commission Third Respondent
Nedbank Ltd Fourth Respondent
The Standard Bank of south Africa Ltd Fifth Respondent
Investec Bank Ltd Sixth Respondent
___________________________________________________________________
JUDGMENT
Respondents’ application for leave to appeal
(1) REPORTABLE: YES / NO
(2) OF INTEREST TO OTHER JUDGES: YES/NO
(3) REVISED: YES/NO
______________ _________________________
DATE SIGNATURE
2
Johann Gautschi AJ
[1] The First and Second Respondents apply for leave to appeal against the whole
of the judgment and orders which I granted on 4 July 2025 in the above
application a quo. Although they are applicants in this application for leave to
appeal, I shall continue to refer to them as the First and Second Respondents
(also collectively referred to as the Respondents) as I did in my judgment in the
application a quo.
[2] These applications for leave to appeal are opposed by the Applicant on the
grounds that a provisional order of winding up is not appealable and that, in any
event, neither application has any reasonable prospect of success on appeal.
[3] The orders appealed against include orders for the provisional winding up of the
First Respondent, interdicting the First and Second Respondents from disposing
of any assets of the First Respondent and from transacting on various Bank
Accounts pending final determination of disputes declared by the Applicant to be
determined by way of arbitration and that the Second Respondent be ordered to
pay de bonis propriis the costs of the application a quo.
Appealability of the provisional winding up order
[4] I commence with the Applicant’s opening submissions that the provisional order
is not final and accordingly lacks the attributes for appealability. Thereafter I shall
deal with the merits of the grounds of appeal. I am in agreement with the
submissions on appealability as set out in paragraphs 10 to 12 of the Applicant’s
heads of argument as follows:
1
“9 There is no dispute that the company in business rescue is unable to
pay its debts and, accordingly that the provisions of the Insolvency Act, 1936
1 whilst noting that I was notified by email on 6 October 2025 that a final order of liquidation was
granted on that day.
3
apply by virtue of the provisions of s339 of the Companies Act, 1973 which
reads as follows:
“339 Law of Insolvency to be applied mutatis mutandis
In the winding- up of a company unable to pay its debts the
provisions of the law relating to insolvency shall, insofar as they
are applicable, be applied mutatis mutandis in respect of any
matter not specially provided for by this Act.”
10 Section 150(1) of the Insolvency Act provides for an appeal against a
“final order of sequestration or by an order setting aside an order of provisional
sequestration …”. Subsections 150(2) - (4) similarly relate to a final order of
sequestration or order setting aside a provisional sequestration order. Section
150(5) provides:
“(5) There shall be no appeal against any Order made by the court in
terms of this Act, except as provided in this section.”
11 The provisional order is not final and accordingly lacks the attributes for
appealability. In Sana Developers (Pty) Ltd and Another v Nedbank Limited
(Leave to Appeal),2 Siwendu J considered an order that Nedbank was entitled
to an order both under section 130(1)(a)(ii) or (iii) of the Companies Act, 2008
and on the alternative ground in section 130(5)(a)(ii) on the basis that it is just
and equitable to set aside the res olution placing Sana Developers in business
rescue and further granted a provisional order for the liquidation which included
consequential orders setting aside the resolution placing Sana Developers
under supervision, terminating the rescue proceedings, finding on the facts that
the jurisdictional requirements for reasonable prospect of successfully rescuing
Sana Developers have not been met and directing the filing of further affidavits
to oppose the final order.
12 The learned Judge held as follows:
2 2025 JDR 0629 (GJ).
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“[21]3 Counsel sought to contend that each of the orders should be construed
in discrete parts. I disagree with this segmentation. In my view the granting of
the provisional order for liquidation is linked inextricable with the finding on the
prospect of success in rescuing Sana Developers. The same reasons for
granting the provisional order impact whether Sana Developers can be
rescued. Importantly, the provisional order has not been rendered final or
discharged.
[22] In this case, the construction of the judgment and order appealed is
material. The often cited decision in Firestone South Africa (Pty) Ltd v
Genticuro
4 makes it plain that: ‘
The basic principles applicable to construing documents also apply to the
construction of a court’s judgment or order: the court’s intention is to be
ascertained primarily from the language of the judgment or order as construed
according to the usual, well-known rules …
Thus, as in the case of a document, the judgment or order and the court’s
reasons for giving it must be read as a whole in order to ascertain its intention.
If, on such a reading, the meaning of the judgment or order is clear and
unambiguous, no extrinsic fact or evidence is admissible to contradict, vary,
qualify, or supplement it.’
[23] Although Nedbank sought a final order for liquidation, the Court granted a
provisional order for liquidation to safeguard the interests of all affected persons
including the applicants. Notwithstanding the conduct which is not in keeping
with the objects of business rescue and flagrant disregard of the requirements,
the Court in its Judgment states the following:
‘I am minded that Professors Patrick O’Brien and Juanitta Calitz express the
view that the requirement of a reasonable prospect for rescuing the company
is a continuous one that applies to business rescue from birth to death. By
implication Mr Tayob can present facts pointing to the availability of post
commencement finance to answer Nedbank’s supplementary affidavit. Pending
commencement finance to answer Nedbank’s supplementary affidavit. Pending
3 p7.
4 1977 (4) SA 298 (A) at 304 para D-F.
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that, and without pronouncing on the correctness of the application, under
section 153, or the right of an affected person to bring the business rescue
proceedings, that right is not a bar to the provisional order Nedbank seeks as
a security holder nor a legitimate basis for a postponement of this application.’
[emphasis added]
[24] Accordingly, a final word has not been spoken on the fate of Sana
Developers. The applicants were not left remediless or prejudiced by the
orders. The Court availed them the opportunity to answer the supplementary
affidavit and present any new information before the Court to dispel and rebut
the prima facie view forming the basis for the provisional liquidation order.
[25] In the parlance in Zweni, a leave to appeal will not result if it will not lead to
‘a just and reasonable prompt resolution of the real issue between the parties.’
Here, leave to appeal will not dispose of all the issue between the parties. The
court order is not final and definitive of the rights of the applicants. It could hardly
be in the interest of justice to grant the leave to appeal in this case.
[26] In the result, I make the following order
a. The Application for leave to appeal is dismissed.
b. The applicants are ordered to pay the costs of the application jointly and
severally at Scale C.”
[5] Consequently, I find that the provisional order of liquidation is not appealable.
[6] I shall now in any event proceed to address the respondents’ grounds of appeal
on the merits.
Locus standi issue – whether applicant a creditor
[7] The Respondents’ grounds of appeal on the merits focus on the locus standi
issue. They contend that I erred in finding that the applicant was from the outset
a “creditor” in the definition of “affected person” in section 128 (1) (a) (i) of the
Companies Act, 2008 (the Act) “and therefore entitled to the publication of a
notice of the offending resolution together with a sworn statement under Section
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130 (1) (b) (sic) of the Act and had the requisite standing to bring the application
for the setting aside of the resolution under Section 130 (1) of the Act” .5
[8] The application for leave to appeal submits6 that in so finding I “erred in
conferring upon the [applicant] rights as purported prospective creditor of the
[First Respondent], thereby drawing a distinction between different categories
of creditors in business rescue proceedings without express legislative
sanction.”
[9] The application further submits 7 that in making that finding I “ erroneously
conflated the purposes, mechanisms and procedures pertaining to insolvency
and winding-up proceedings with those of business rescue under Chapter 6 of
the Act”.
[10] The allied ground of appeal i s that I erred in finding that the Applicant was a
creditor of the First Respondent by virtue of the applicant’s contractual claim for
rebranding costs which had by notice dated 3 May 2025 been made the subject
matter of a declared dispute in terms of clause 13 of the Grant Agreement. 8
Under this ground of appeal the respondents submit that I should consequently
(presumably because it is the subject matter of a dispute referred to arbitration)
have found that “the rebranding claim was not an unpaid debt which is due” and
that the applicant is therefore “ not a creditor of the [first respondent] in the
business rescue proceedings”.
[11] It is further averred 9 that I erred in finding that the claim for rebranding costs
constituted the Applicant “a prospective creditor of the first respondent and thus
accorded it standing to seek relief under section 130 (1) of the Act”.
[12] In elaboration of the aforegoing the Respondents submitted10 that I should have
found that all of the applicant’s claims “were contingent upon the determinations
consequence upon the dispute resolution process”. They further submitted11 that
5 paragraph 2 of the application for leave to appeal
6 paragraph 6 of the application for leave to appeal
6 paragraph 6 of the application for leave to appeal
7 in paragraph 7 of the application for leave to appeal
8 paragraph 3 of the application for leave to appeal
9 paragraph 5 of the application for leave to appeal
10 paragraph 6 of the application for leave to appeal
11 in paragraph 8 of the application for leave to appeal
7
“The court erred in interpreting section 128(1)(a)(i) of the Act in a manner which
fell foul of the equality provisions of the Constitution and the obligation to interpret
statutes through the prism of the Bill of Rights as required by section 7(a) of the
Act”.
[13] The underlying premise of the aforegoing grounds of appeal is the Respondents’
argument in the application a quo that “none of the applicant’s purported
contractual entitlements became due and owing (in the sense of a complete
cause of action) during the course of business rescue proceedings”.12
[14] That argument also finds expression in the R espondents’ submission that a
contingent or prospective creditor is not a “ creditor” as contemplated by the
definition of “affected person” in Section 128 (1) (a) (i) of the Act.
[15] The Respondents’ reliance on paragraph [21] of the Wescoal judgment in
justification of the aforegoing is misplaced. When read together with succeeding
paragraphs [23], [24] and [27] of that judgment – all as quoted in the applicant’s
heads of argument in the application a quo – it is clear that contingent and
prospective creditors are included as creditors. Those four paragraphs of the
Wescoal judgment read as follows (omitting the applicant’s emphasis):
"[21] The absence of a specific definition of 'creditor' is an indication that
the Legislature did not contemplate a specific meaning other than the
ordinary grammatical meaning of the word; that is a person or entity to
whom an unpaid debt is due. Unless the Act has classified creditors
and given them different or unequal rights, there is no basis to import,
via interpretation, any such different or unequal rights. Any
interpretation which draws distinctions between different categories of
creditors, without express legislative sanction, would fall foul of the
equality provisions of the Constitution and the obligation to interpret
statutes through the prism of the Bill of Rights and the Constitution as
statutes through the prism of the Bill of Rights and the Constitution as
required by s 7(a) of the Act. No absurdity would result if the word
were afforded its ordinary meaning.
12 paragraph 64, first and second respondent's heads of argument in the application of quo
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[23] It is uncontentious that the purpose of business rescue is to save
flailing entities and to avoid liquidation. The purpose of liquidation
proceedings is different. It is to determine an appropriate distribution
of an insolvent entity's assets. The hand of the law is laid upon an
estate and creditors' rights become fixed and immutable in terms of the
relevant provisions of Chapter XIV of the Companies Act 61 of 1973.
The context of a concursus creditorum does not apply to business
rescue proceedings. The differences between pre-commencement and
post-commencement creditors are less pronounced and there is no
need to differentiate between them.
[24] Even in the liquidation context, the word 'creditor' is to be given its
normal grammatical meaning. In Ex Parte Kaplan and Others NNO: In
re Robin Consolidated Industries Ltd, it was held 'the word in the
section is probably limited to persons having pecuniary claims,
whatever the nature of their source may be'. In Body Corporate of
Greenwood Scheme v 75/2 Sandown (Pty) Ltd and Others, it was
concluded that 'a creditor includes a contingent or prospective creditor'.
It is not the word 'creditor', but the other relevant provisions of the
insolvency legislation which provide the context and limits who has
voting interests in an insolvency scenario.
[27] The absence of a specific reference to post-commencement
creditors in s 145 and s 150 does not evidence any intention on the
part of the Legislature to exclude them or to limit their rights. Section
145 regulates the rights and voting interests of creditors. A 'voting
interest' is defined in s 128(j) as 'an interest as recognised, appraised
and valued in terms of s 145(4) to (6)'. It expressly grants 'each creditor'
various rights. There is no limitation placed on which creditors are
afforded those rights. Instead, each creditor is expressly afforded such
rights, including the right to vote in respect of a business rescue plan by
rights, including the right to vote in respect of a business rescue plan by
s 145(2). The value of a voting interest is regulated by s 145(4), which
only draws a distinction between secured and unsecured creditors, but
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not between pre-commencement creditors and post-commencement
creditors"
[16] This is further supported by the judgment in Rogal Holdings (Pty) Ltd v Victor
Turnkey Projects (Pty) Ltd and Others 2022 JDR 1031 (GP) at paragraphs [34]
and [35] – also quoted with emphasis in the applicant’s heads of arguments in
the application a quo – which read as follows:
"[34] However, even (if) I accept that a dispute exists regarding the first
respondent’s liability to compensate the applicant for damages, and
that the first respondent might have a counter claim against the
applicant, the applicant made out a case that a cause of action exists
and that it has a claim that should be tried by a court of law. In this
sense, the applicant is a creditor. It is not only creditors who have
proven claims against the debtor that are to be regarded as affected
parties. The 2008-CA does not require that the creditor must have a
liquidated claim before being recognised as a creditor for purposes of
Chapter 6 of the 2008-CA. Where a party holds a debt that is ‘owing’ in
that a complete cause of action for the recovery of the debt exists, and
that party would be precluded from enforcing its claim because of the
business rescue proceedings except if in accordance with the
provisions of the business rescue plan, that party holds a direct and
substantial interest in the business rescue proceedings and is an
affected party, irrespective as to whether it acquired any voting
interests.
[35] The applicant is an affected person with the required locus standi
to approach the court for an order that the resolution adopted on 6
September 2021 to commence with business rescue proceedings is set
aside". [Underlining added].
[17] The Respondents’ reliance on the words “ debt is due” in paragraph [21] of the
Wescoal judgment is also misplaced for reasons articulated as follows in
paragraph 15 of the applicant’s heads:
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“The applicants confuse the fact that a debt is “disputed” on the one hand
with whether the debt is due. The ADR process does not defer the date
upon which a debt falls due. There is in any event no genuine dispute
about the company’s liability for repayment of rebranding costs - nor
indeed the indebtedness for large amounts owed to the first respondent.
Although the applicants contend that this is not “liquidated”, it is not
necessary for the purposes of the first respondent qualifying as a
creditor/affected person for the claim to be liquidated. In any event, in
this instance the claim is liquidated even if the calculation of what was
spent from the funds and applied towards rebranding costs is required
to be verified. The quantum of those costs is objectiv ely calculable and
is simply subject to identifying the expenditure. There was a debt
presently claimable by the first respondent within the meaning of Singh
v Commissioner, South African Revenue Service (referred to in footnote
13 of the applicants’ heads of argument).”
[18] The Respondents submi tted as follows 13 that the obligations of the F irst
Respondent in terms of the Grant Agreement were suspended by means of the
second respondent’s 8 May 2025 letter:
“16 The Court erred in finding that no obligation arose for the first applicant
under the dispute resolution clause which was capable of being
suspended by the second applicant under Section 136(2)(a) of the Act
despite its wide scope (“any obligation of the Company arising under an
agreement to which the company was a party at the commencement of
the business rescue proceedings”) and the first applicant’s contractual
obligations arising therefrom including but not limited to:
16.1 An obligation to engage in private meetings within 60 days;
16.2 An obligation to appoint one mediator;
16.3 An obligation to submit to arbitration by the International
Centre for Dispute Resolution;
13 in paragraphs 16-18 of the application for leave to appeal
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16.4 An obligation to pay the costs of mediation and arbitration.”
17 The Court erred in not finding that the dispute resolution clause and the
consequent notice of dispute of 3 May 2025 gave rise to obligations
upon its delivery which thereby commenced the dispute resolution
process and that therefore the practitioner acted within his authority
to suspend these under Section 136(2)(a) of the Act.
18 The Court erred in finding that the envisaged arbitration award pursuant
to the envisaged arbitration proceedings would not constitute an
obligation on the part of the first applicant which became due but would
only constitute an obligation upon it becoming enforceable when made
an order of Court. The Court should have found that an arbitration
award once made would give rise to a debt and thus an obligation as
envisaged under Section 136(2)(a) of the Act.”
[19] If Even assuming that I erred in interpreting an “ obligation” as contemplated in
section 136 (2) (a) of the Act as referring to an enforceable obligation to pay
pursuant to an application to enforce an arbitration award – and assuming further
that the R espondents were able to overcome the arguments raised by the
applicant in paragraph 75 of the founding affidavit,14 the respondents, in my view,
would still not have a reasonable prospect of success on appeal by reason of the
lack of merit in the multiple other grounds of appeal dealt with herein.
[20] Moreover, the Applicant is in my view correct in submitting that:
15
“21 – – the suspension of ADR proceedings (even if this were to be the case)
under s136 (2) (a) of the Act does not in any way preclude a winding up.
If anything, I think it indicates the urgent need for the winding up.
22 There is no genuine dispute as to the invalidity of the business rescue
process in the clear basis for the business rescue to be avoided.”
14 quoted on pages 23 and 24 of my judgment
15 applicant's heads of argument in the application a quo, paragraph 21 and 22
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[21] With regard to the Applicant’s claim for the rebranding costs, the application for
leave to appeal further avers that16 “The Court erred in finding on the evidence
before it that the respondent’s did not provide a “credible response” to the
first respondent’s email of 14 February 2025 in circumstances where there was
no obligation on it to do so and in relying thereon for its finding of an alleged
acknowledgment of indebtedness on the part of the first applicant for the
rebranding costs. The Court should have had regard to the version of the
applicants before it namely that the rebranding costs were approved by the first
respondent and envisaged in the Grant Agreement as well as the evidence
reflected in the attached accounting records of the first applicant, the remainder
of correspondence thereanent between the parties and the outcome of
investigations of the second applicant in relation thereto.”
[22] There is no substance in this ground of appeal. The willingness to repay the
rebranding costs referred to in paragraph 42 of my judgment was explicitly
confirmed without qualification in AFV’s 17 February 2025 email17 in response to
the specific statement in response to the 14 February 2025 email from the
applicant’s director, Legal and Compliance, Canada which states that “ AFV is
obligated to repay the grant funds spent on the rebranding campaign”.18
[23] in paragraph 21 of the application for leave to appeal the R espondents
submittted that “The Court erred on the evidence and facts before it in finding
that the business rescue practitioner admitted the status of the first respondent
has creditor at the meeting of 16 April 2025.”
[24] Paragraph 58.1 of the Applicant’s founding affidavit which I quoted in paragraph
[39) of my judgment records that at the 16 April 2025 meeting which the second
respondent, Grinitz and the S econd Respondent’s attorney attended with the
Applicant’s attorneys , the discussions included the following: “Another was to
Applicant’s attorneys , the discussions included the following: “Another was to
take legal advice from senior counsel on whether, based on South African law,
the Foundation is a creditor of a fee (the advice received by BRP was that the
Foundation is a concurrent creditor of AF V)”. The respondents’ answering
16 paragraph 12 of the application for leave to appea
17 annexure FA 8, caselines 001-184
18 quoted in paragraph [27] of my judgment
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affidavit contained no more than a general denial of this paragraph and referred
to what had been stated elsewhere. I could not find anywhere else that this issue
was dealt with, nor was it dealt with in paragraph 56.10 of the R espondent’s
heads of argument in the application a quo where the 16 April 2025 meeting was
addressed. In the result Respondents have not shown why another court would
come to a different conclusion on this issue.
[25] In the result I am of the view that the Respondent’s grounds of appeal relating to
the locus standi issue have no reasonable prospect of success of an appeal
Insolvency of the First Respondent and setting aside the business rescue
resolution
[26] Paragraph 9 of the application for leave to appeal submitted that “The Court erred
in not finding that the [applicant] had made out no case for relief under Section
129 (3) (a) of the Act. The Court moreover should have found that the [applicant]
made out no case why it should be just and equitable to do so in its founding
papers”.
[27] Paragraph 10 of the application for leave to appeal further submits that “ The
Court erred in interpreting Section 130(1)(a)(ii) of the Act in a manner which did
not recognize the secondary object of business rescue proceedings as
articulated in Section 128(1)(b)(iii) and/or in not having due regard to the
secondary object of business rescue proceedings as articulated in section
128(1)(b)(iii), namely where it is not possible for the company to continue in
existence, once approved, would result in a better return for the company’s
creditors (or shareholders) than would result from the immediate liquidation of the
company.”
[28] Paragraph 13 of the application for leave to appeal challenges my findings
relating to the insolvency of the First Respondent as follows:
“The Court erred in finding that the first applicant was undisputedly insolvent
in the face of the uncontroverted evidence put up by the applicants that it was
not
in the face of the uncontroverted evidence put up by the applicants that it was
not
commercially nor factually insolvent. The Court erred in relying for this
finding of insolvency on the premature principal assumption that the first
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respondent had demonstrated prima facie that it had a proprietary (title)
interest in the first applicant’s assets and the materially incorrect inference
that this in and of itself would disentitle the first applicant to settle its current
liabilities from the funds standing in its local bank accounts.”
[29] Paragraphs [56] to [58] of my judgment deals with the F irst Respondent’s
insolvent circumstances and why in my view it is just and equitable for it to be
wound up. Nothing submitted by the respondents has given me any reason to
think that another court would come to a different conclusion on those findings .
Consequently, am of the view that also this ground of appeal has no reasonable
prospect of success on appeal.
[30] Paragraph 11 of the application for leave to appeal submits that:
“The Court erred in not finding that the relief sought by the [applicant] relating to
the winding-up of the first respondent as well as the interdictory relief relevant
to property lawfully in its possession, constituted legal proceedings requiring
its leave under Section 133(1) of the Act. The Court moreover should have
found that the said relief was not concerned with the implementation or
development of the business rescue plan and was a statutory requirement. The
Court erred in not requiring the [applicant] to make out a case for the granting of
such relief as a pre-requisite to its order.”
[31] I dealt with the general moratorium under section 133 of the Act in paragraph
[59] of my judgment where I referenced the judgment in Moodley v On Digital
Media (Pty) Ltd as was referenced by the applicant in paragraph 54 in its heads
of argument in the application a quo.
[32] The Applicant’s amplified submissions in paragraphs 54 to 60 of its heads of
argument in the application a quo provide further reasons why, in my view, it
does not avail the Respondents to rely on the section 133 of the Act. Those
submissions read as follows (footnotes omitted):
submissions read as follows (footnotes omitted):
54 Moodley v On Digital Media (Pty) Ltd and Others62 found that section
133 only requires leave to be obtained in proceedings brought solely
15
against the company – and not in proceedings against the company
and its BRPs. It stated:
“The language of s 133, when read in context with the other
relevant provisions in ch 6 and having regard to its purpose, does
not include within its ambit proceedings relating to the
development, adoption or implementation of a business rescue
plan. It is the business rescue practitioner who must develop a
business rescue plan and implement it if adopted, and the
company, under the direction of the practitioner, must take all
necessary steps to attempt to satisfy any conditions on which
the business rescue is contingent and implement the plan as
adopted. Legal proceedings, such as the present case, which seek
that an adopted business rescue plan be executed and
implemented strictly according to its terms and in accordance with
the applicable provisions of the Companies Act, are legal
proceedings against the business rescue practitioner and the
company in business rescue in connection with the business
rescue plan. They are not legal proceedings against the company
or property belonging to the company or lawfully in its
possession within the meaning of s 133(1).
Section 133, therefore, finds no application in legal proceedings
against a company in business rescue and its business rescue
practitioner in connection with the business rescue plan, including
its interpretation and execution towards implementation. I
respectfully consider the contrary finding in Redpath63 to be
clearly wrong and decline to follow it. The applicant does not
require the leave of this court as contemplated in s 133(1)(b) of
the Companies Act to proceed with the present proceedings.”64
55 The KZN High Court in Resource Washing (Pty) Ltd v Zululand
Coal Reclaimers Proprietary Limited and Others65 quoted these
paragraphs of Moodley, as well as citing Redpath. It then said “I align
16
myself with Moodley in holding that s 133 does not apply to legal
proceedings that are against the company in general or property
belonging to the company or lawfully in its possession”. It found further
that:
“The principle of legality requires that anything done in conflict with
the rule of law shall not enjoy the force of law. Eliminating
illegalities that occur in business rescue proceedings should be
automatic. Consequently, to interpret s 133 as indiscriminately
barring all legal proceedings unless they meet the requirements
of subsections (a) to (f) undermines the principle of legality.”66
56 In Limbouris and Others v Du Toit NO and Others67 application was
made to interdict the BRPs from issuing a certificate of substantial
compliance, pending the outcome of an action to set aside the Plan. The
Court held that the earlier decision in Booysen v Jonkheer
Boerewynmakery (Pty) Ltd68 was obiter and departed from it.69 It
instead held that:
“In my view, the common thread in these authorities is that the
relief sought in which it was held that leave in terms of section
133 was not required is that the relief related to the business
rescue itself or aspects thereof as opposed to aspects of the
ordinary affairs, business or assets of the company in question.
This feeds into the underlying purpose of the moratorium which
is to provide ‘breathing space’ to a company in business rescue.
On the other hand, an invalid business rescue plan, for example,
should not be provided breathing space and, on the contrary,
should rather be set aside.
Therein, I think, the guiding principle ought to lie to determine on
which side of the line a particular case falls: If the proceedings
involving the company relate to the business rescue itself or
aspects thereof, then leave is not required (these may be referred
to as aspects relating to the business rescue itself). If the
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proceedings relates to the ordinary affairs, assets or business
of the Company itself, leave is required (these may be referred
to as aspects relating to the affairs of the Company itself).”70
57 It is submitted that the decision in Limbouris provides the correct
approach.
58 The relief claimed in respect of the invalidity/setting aside of the
business rescue relates to the business rescue itself and is not
subject to the moratorium under s133. The preservation of the assets
on an interim basis is similarly not part of the “ordinary affairs,
business or assets of the company” but rather related to the manner
in which the business rescue practitioner is carrying out his functions.
A consequential winding up is similarly related to the business rescue
and not to the ordinary affairs, assets or business of the company
itself.
59 Section 133(1)(b) in any event provides for leave to be granted by the
Court. The learned authors of Henochsberg on the Companies Act 71
of 200871 expressed the view that the consent required in terms of
subsection (1) is not a jurisdictional fact, i.e. a condition precedent for
the proceedings to commence or proceed, the absence of which carries
with it the implication that a Court has the power or competence to
determine an issue between the parties and if it, nevertheless, proceeds
to determine the matter notwithstanding the absence of jurisdiction
although the consequence that the proceedings are void. Section
133(1) is merely a procedural limitation and not an absolute bar
against institution of proceedings. The learned authors further state:72
“There are conflicting judgments in respect of the question
whether s133 requires a separate application for leave to
commence or proceed with legal proceedings or whether such
leave may be sought in one and the same matter and secondly
if matters ‘pertaining to the implementation of the rescue plan’
(and a meeting of creditors) are included in s133 and also require
18
prior written consent of the business rescue practitioner or the
leave of the court. … It is respectfully doubted that s133 is
intended to operate also in the second category as opposition to
a business plan is not legal proceedings against the company
or property belonging to the company or lawfully in its
possession: see, however, the Booysen case supra para 57. In
this respect Moodley v On Digital Media (Pty) Ltd and Others
2014 (6) SA 279 (GJ) para 11 declined to follow the Redpath
Mining South Africa (Pty) Ltd case supra and decided that s133
finds no application in legal proceedings against the company in
business rescue and its business rescue practitioner in
connection with the business rescue plan including the
interpretation and execution towards implementation, as sub-s(1)
refers only to the company and not to the business rescue
practitioner and the company (para 10). This dictum was followed
in Hlumisa Investment Holdings (RF) Ltd and Another v Van der
Merwe NO and Others [2015] ZAGPPHC 1055 (14 October
2015) (para 17) where the application was by shareholders
against the business rescue practitioners, and which were
primarily aimed at disclosure of documents and information and
also interdicting consideration and adoption of a business plan.”
60 The learned authors further state:73
“The right to approach a Court in terms of s130(5) to set aside
a voluntary business rescue process initiated in terms of s129 but
not yet implemented, is also not subject to leave by the Court
(or written consent of the practitioner), and also not an
application in terms of s132(2)(a): Resource Washing (Pty) Ltd
v Zululand Coal Reclaimers (Pty) Ltd and Others [2015]
ZAKZPHC 21 (20 March 2015) para 13; … If this was the case,
the application for leave would, in itself, also be subject to leave
by the Court, ad infinitum, and in addition, the right to approach
the Court is an essential counterweight to the curtailment of the
19
affected persons’ rights licenced by the (unilateral) action by the
company by way of a board resolution.
…
An application in terms of s130(5)(c) (for a winding up order)
also implies that section 133 is not applicable: Cordeiro Holdings
CC and Others v Market Demand Trading 254 (Pty) Ltd and
Others [2016] ZAGPJHC 284 (6 September 2016) para 13. It is
submitted that this is the correct position, also on general
principles: …
On the issue whether the application to institute legal proceedings
(first application) and the legal proceedings itself (substantive
application) can be done in one application there are, however,
divergent judgments.
…
It is submitted, that it will also depend on the fact to the particular
case. In BP Southern Africa (Pty) Ltd v Intertrans Oil SA (Pty) Ltd
and Others 2017 (4) SA 592 (GJ) the Court said ‘[27] …. Where
the main relief to be sought goes to the very status which
invokes the moratorium protection, it seems overly technical
to insist on two distinct applications as opposed to one
application with two (sets of) prayers: one for permission, and one
for the substantive relief’. Therefore (para 28) if the application is
bad on the merits, the order should be to refuse leave to institute
the proceedings. … Also, business rescue should be a speedy
process, something that would be hampered if a separate
substantive application must be brought. The Court should, in
any case, also have the discretion to deal with exceptional
circumstances, ‘in accordance with any terms the court considers
suitable’ as provided for in sub-s(1)(b): Safari Thatching Lowveld
CC case supra para 28.
20
…”
Interdictory relief
[33] Paragraphs 19 and 20 of the application for leave to appeal set out the grounds
relating to the granting of interdictory relief as follows:
“19 The Court erred in finding that the requirements for interdictory relief
were met and that a case had been made out in respect thereof
20 The Court erred in granting the interdictory relief in the absence of
and non- joinder of interested parties.”
[34] I dealt with the interdictory relief issue in paragraph [60] of my judgment and I
have no reason to think that another court would come to different conclusion.
[35] The submissions contained in paragraph 68 to 82 of the Applicant’s heads of
argument in the application a quo provide amplified reasons why, in my view,
there is no reasonable prospect of success. They read as follows (footnotes
omitted):
“68 In the event that the business rescue is set aside it must follow that the
BRP may not deal any further with the assets of the first respondent nor
transact on the bank accounts identified in paragraph 6.1 of the notice
of motion. This applies a fortiori in respect of a winding up.
69 On the basis that the Grant assets and the consequence of a
Quistclose Trust, vests the rights in the assets in the applicant, the
Remaining Grant does not form part of the general assets of AFV.
The applicant therefore has a direct legal interest in preserving such
assets pending the determination of the disputes between the parties
in relation thereto.
70 The applicant therefore asserts the Foundation’s ownership and claim
to return of the entire fund to the Foundation. This vests in the
Foundation the right to the funds in the bank accounts constituting part
21
of the Remaining Grant and the assets acquired by AFV with the
Granting funding.83
71 The applicant has established at least a prima facie right in relation
to a reasonable apprehension of irreparable harm having regard to the
BRP’s refusal to provide an undertaking not to utilise the Remaining
Grant and his stated intention to pay employees, creditors and himself
before paying the Foundation any amount that remains.84
72 The applicant has further identified potential irreparable prejudicial
consequences both to itself and to underprivileged people in the event
that the Remaining Grant is not dealt with in the manner required of the
Foundation as a registered charity under Canadian Income Tax Law. In
the event that the Foundation’s registered charity status is revoked, the
Foundation would be required to cease operations and transfer all of
its assets to the Government of Canada and/or to another unrelated
registered charity.85
73 There is no effective alternative remedy available to the Foundation but
to seek the relief claimed in this application.
74 The parties have agreed to dispute resolution by arbitration in
accordance with Canadian law.
75 The respondents contend that the dispute resolution provisions of the
Grant Agreement have been suspended by the BRP in terms of s136
of the Act. Section 136(2) provides that subject to subsection (2A), the
practitioner may during business rescue proceedings entirely, partially
or conditionally suspend, for the duration of the business rescue
proceedings, any obligation of the company that arises under an
agreement to which the company was a party at the commencement
of the business rescue proceedings and which would otherwise
become due during those proceedings.
22
76 It is submitted that section 136(2) is not of application to the
dispute resolution provisions of the Grant Agreement. The purpose of a
suspension in terms of s136(2) is to relieve the BRP of an obligation to
perform in terms of the contract. This does not prevent the applicant from
initiating the dispute resolution proceedings which the applicant has
commenced in accordance with the Grant Agreement. In the event that
the proceedings are stayed, this would in any event add to the need to
preserve the Grant assets pendente lite.
77 The balance of convenience clearly favours the grant of relief. Were
the BRP to continue realising the assets this would be irreversible. On
the other hand, the preservation of the assets pendente lite would not
be prejudicial.
78 Since the interdict is directed at preserving property to which the
applicant claims title, a Court should incline to the preservation of the
res.
79 On the other hand it is clear from the BRP’s stated intention that he
intends to proceed with the realisation and utilisation of the assets.
80 There is no dispute therefore that the BRP intends to dispose of the
assets.
81 Having regard to the strength of the applicant’s asserted right,
particularly since the respondents do not contest the Canadian law
position, the balance of convenience should tip the scales in this
instance.
82 In Cerebos Food Corporation Ltd v Diverse Foods SA (Pty) Ltd and
Another86 (cited with approval by Corbett JA as he then was in
Universal City Studios Inc and Others v Network Video (Pty) Ltd87) the
Full Court (per Van Dijkhorst J, Boshoff JP and O’Donovan J concurring)
accepted that an order for the interim attachment for the purpose of
preservation of property in which a real or personal right (including both
23
common law and statutory rights) was claimed by the applicant was
competent.
Punitive costs to be paid de bonis propriis
[36] The order granting costs de bonis propriis was challenged in the grounds set out
in paragraphs 22 to 29 of the application for leave to appeal as follows:
22 The Court erred in awarding a punitive cost order de bonis propriis on the
attorney and client scale against the business rescue practitioner, the
second applicant. As part of this finding the Court erred in relying upon
a wrong view of the facts and solely on the first respondent’s contested
version that the practitioner would have stated that he was not aware of
judicial authority supporting the proposition that business rescue cannot
be utilised to informally wind-down a company.
23 The Court erred in making a finding of mala fides on the part of the
practitioner in circumstances where there was no primary fact evidence
of any wilfulness or deceit on the part of the practitioner in proceeding
with his duties under the business rescue proceedings nor to prejudice
the first respondent or that he had the requisite state of mind which would
give rise to an inference or finding of mala fides on his part.
24.1 the nature of the first applicant’s business and purpose;
24.2 the express terms of the Grant Agreement which provided for the
granting of funds by way of gifts by the first respondent to the first
applicant;
24.3 the first respondent not being recorded as a creditor in the
books and financial statements of the first applicant;
24.4 the spectre of the application of the so-called Quistclose trust
principle to the Grant Agreement having for the first time being
raised in the first respondent’s founding papers in its application
issued on 14 May 2025 when Professor Oosterhoff’s expert
opinion was disclosed and which purports to result in all of the
24
first applicant’s assets being held in trust for the first respondent
from day one of the Grant Agreement (a concept foreign to
South African law).
25 The Court erred in the finding of mala fides on the part of the
practitioner in circumstances where the first respondent itself failed to
and/or was unable to particularise its claims or status under the Grant
Agreement as either that of a creditor or that of the holder of a
proprietary interest and having to await expert opinion on the issue.
26 The Court did not exercise its discretion on costs judicially and erred in not
finding that this latter distinction was material to enable it to consider
whether the conduct of the practitioner was reasonable or not, and
whether or not he executed his duties in good faith to the benefit of
all stakeholders in the business rescue proceedings, in particular
employees and creditors. The Court exercised its discretion in the
absence of legal grounds to do so when awarding an exceptional punitive
cost order against an officer of the Court.
27 The Court erred in relation to the conduct on the part of the practitioner
in not having due regard to the nature and extent of the objective and
impartial enquiries and investigations conducted by him into the affairs
and compliance of the first respondent with due regard to statutory
obligations in this context arising from the Act and Nonprofit
Organisations Act, 71 of 1997, nor of the extensive interactions
between himself and the first respondent and its agents, and the full
disclosure and transparency of such interactions inclusive those made
to Deloitte’s acting on behalf of the first respondent over a lengthy
period of time which directly contradicts any mala fides or deceitful
intent on the part of the practitioner in developing and publishing the
business rescue plan.
28 The Court erred in ascribing dishonest and malicious intent to the
practitioner in circumstances where the offending conduct of the
25
practitioner is not only in dispute on the papers before Court but
contradicted by objective facts.
29 The Court erred in not finding that the first respondent’s accusation of
mala fide conduct in bad faith on the part of the practitioner was
scandalous and unwarranted.”
[37] My reasons for granting the re-cost to be paid de bonis propriis and on a punitive
basis are set out in paragraphs [61] and [62] of my judgment and I have no reason
to think that another court would come to a different conclusion. In the
circumstances the respondents have in my view not shown that they have a
reasonable prospect of success on appeal on the costs issues.
[38] Given that this application for leave to appeal is as devoid of merit of merit as the
opposition of the R espondents to the application a quo, I am of the view that it
would also in the present application for leave to appeal be appropriate for a
punitive costs order to be granted which are to be paid by the S econd
Respondent de bonis propriis.
[39] In the premises I make the following order:
ORDER:
[1] The application for leave to appeal is dismissed.
[2] The Second Respondent is ordered to pay the costs of this application on the
attorney-client scale, including the costs of two counsel on scale C, de bonis
propriis.
________________________
Johann Gautschi AJ
ACTING JUDGE OF THE HIGH COURT
JOHANNESBURG
26
For the Applicant:
Adv A Subel SC
Instructed by: DLA Piper South Africa (RF) Inc
Ref: Ms K Simpson, Kirsty.Simpson@dlapiper.com
Tel: 011 302 0802
For the First and Second Respondents:
Adv JJ Brett SC
Adv JG Smit
Instructed by: Conrad Gothe Attorney
(087 8022013)
Hearing date: 19 September 2025
Judgment date: 12 May 2026