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[2026] ZAGPJHC 598
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Tusk Construction Support Services (Pty) Ltd and Another v Malinga NO and Others (2025/210749) [2026] ZAGPJHC 598 (14 May 2026)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
Number: 2025-210749
(1)
REPORTABLE:
NO
(2)
OF INTEREST TO OTHER JUDGES:
NO
(3)
REVISED:
YES
In
the matter between:
TUSK
CONSTRUCTION SUPPORT SERVICES (PTY)
LTD
First Applicant
MASSMART
RETAIL (PTY) LTD T/S BUILDERS
Second Applicant
and
MUSAWENKOSI
EMMANUEL BENEDICT MALINGA
NO
First Respondent
TSSN
CARRIERS (PTY) LTD (IN BUSINESS
RESCUE)
Second Respondent
COMPANIES
AND INTELLECTUAL PROPERTIES
COMMISSION
Third Respondent
SOUTH
AFRICAN INSTITUTE OF CHARTERED
ACCOUNTANTS
Fourth Respondent
Summary
Business
rescue – termination of business rescue pursuant to
section
141(2)(b)
of the
Companies Act
71 of
2008
– power of the court to set aside – inherent
jurisdiction
JUDGMENT
DANIELS
AJ
Introduction
[1]
When this application was first launched, the applicants sought
the removal of the first respondent as the practitioner
in the
business rescue proceedings of the second respondent (TSSN Carriers
(Pty) Limited), and replacing him with an alternative
practitioner.
[2]
Consequent upon the (disputed) termination of the business
rescue proceedings by the first respondent, which occurred
shortly
before the hearing of the application for the first respondent’s
removal, the applicants now seek, in the first instance,
an order to
set aside the termination of the business rescue.
[3]
On 3 April 2025, the second respondent placed itself in
business rescue and on 23 April 2025 the first respondent was
appointed as the business rescue practitioner.
[4]
On 6 November 2025 the application for the first respondent’s
removal was issued (and with it, an order was sought
for the
appointment of an alternate practitioner).
[5]
A business rescue plan was published on 21 November 2025, and
the application for removal remained unopposed. It was accordingly
set down for hearing, as unopposed. On 19 January 2026, a week before
the (unopposed) hearing date of 26 January 2026, the first
respondent
filed a notice in accordance with Form CoR125.2. This, according to
the first respondent, meant the end of the business
rescue of the
second respondent.
[6]
This notice of termination became the focus of the application
and it prompted the applicants to seek an order for the
Form CoR125.2
to be set aside (effectively as a precursor to the removal of the
first respondent). The applicants contend that
the effect of an order
setting aside the termination will be that the second respondent
remains in business rescue in terms of
section 129(3)
of the
Companies Act, 71 of 2008
, and the removal of the first respondent
can be decided upon. The applicants’ amended notice of motion
sets out the relief
sought, in this sequence.
[7]
The Form CoR125.2 was registered pursuant to the first
respondent’s decision to terminate the business rescue of
the
second respondent in terms of
section 141(2)(b)
of the
Companies Act.
The
relevant part of
section 141(2)
provides, as follows:
(2)
If, at any time during business rescue proceedings, the practitioner
concludes that-
(a)
there
is no reasonable prospect for the company to be rescued, the
practitioner must-
(i) so
inform the court, the company, and all affected persons in the
prescribed manner; and
(ii) apply
to the court for an order discontinuing the business rescue
proceedings and placing the company into
liquidation;
(b)
there
no longer are reasonable grounds to believe that the company is
financially distressed, the practitioner must so inform the
court,
the company, and all affected persons in the prescribed manner, and-
(i) if
the business rescue process was confirmed by a court order in terms
of
section 130
, or initiated by an application to the court in terms
of
section 131
, apply to a court for an order terminating the
business rescue proceedings; or
(ii) otherwise,
file a notice of termination of the business rescue proceedings…
The
issues
[8]
The applicants’ first attack on the validity of the
notice terminating the business rescue, is that the first respondent
did not inform the court that he concluded that there were no longer
reasonable grounds to believe that the second respondent is
financially distressed as required by
section 141(2)(b).
[9]
It is the applicants’ position that
this
requirement – to inform the court – is intended to enable
court oversight
inter alia
over a practitioner who
(according to the
applicants) reached a conclusion on misleading or irrational grounds,
or with a collateral
purpose, that a
company (the second respondent) is no longer financially distressed.
The applicants say that a reasonable belief
is required, and that the
question is whether objectively speaking, based on fact, such a
belief or conclusion holds water.
[10]
Central to the applicants’
difficulty with the validity of the termination of the business
rescue, is the second respondent’s
ostensible transformation
from
a financially distressed entity at the
commencement of the business rescue proceedings and at the date of
publication of the proposed
plan, to a company that is no longer
financially distressed, when the CoR 125.2 notice was filed on 19
January 2026. The applicants
contend that objective facts which would
support such a sudden change of fortunes do not exist, which in turn
suggests carelessness
and incompetence, or a wilful abuse on the part
of the first respondent. In simple terms, the applicants say that the
conclusion
to the effect that the second respondent is no longer
financially distressed (or, at least, that
there
no longer are reasonable grounds to believe that the second
respondent is financially distressed) is irreconcilable
inter
alia
with the picture painted in the
business rescue plan, as it was published in November 2025.
[11]
This supports the applicants’ case to the effect that the
decision to terminate the business rescue by the first
respondent is
not objectively justifiable, and the question of the factual basis on
which the first respondent based decisions
also plays a prominent
part in the order sought for his removal. It is the applicants’
position that the first respondent
based decisions on wrong,
inaccurate information and that this is indicative of
inter alia
the failure to properly investigate the affairs of the second
respondent. It is also contended that the first respondent failed
to
take the applicants’ otherwise undisputed claims into
consideration, favoured certain creditors above others and generally,
conducted the business rescue in a manner that lacked skill and
transparency. This is intended to be no more than a broad summary
of
the applicants’ case for the first respondent’s removal,
and for present purposes it suffices to be stated that
the numerous
failings, mistakes, and omissions as they are listed in the
applicants’ affidavits are relied upon as grounds
for the first
respondent’s removal, as per
section 139
of the
Companies Act.
[12
]
The amended relief is opposed on the
basis of the court lacking jurisdiction to set aside the termination.
Two issues arise for
consideration under this topic.
[13]
First, that because this is said to constitute administrative
action by the CIPC (when it registered the Form CoR125.2
filed by the
first respondent) the respondents contend that a substantive review
under the Promotion of Administrative Justice
Act (“PAJA”)
is required.
[14]
Second, it is the respondents’ position that the court
lacks the inherent power (or, as it was articulated on behalf
of the
respondents,
substantive jurisdiction
) to make the order
setting aside the notice of termination and/or the Form CoR125.2.
[15]
The parties are in principle agreed that, if the first
respondent is right, it would render the application for his removal
moot at this point. If not, the grounds for setting aside the
termination must be considered and if the termination falls to be
set
aside (and if it follows that the second respondent is in fact still
in business rescue) the removal of the first respondent
arises for
consideration.
The
Promotion of Administrative Justice Act 3 of 2000
[16]
The registration of the Form CoR125.2 involved no decision by
the CIPC. It – the CIPC – took no decision
and it is by
the same token unable to provide any reasons for the decision.
[17]
The decision was made by the first respondent and in this
context, the CIPC is no more than a record-keeper. In
Knoop
NO and Another v. Gupta
(Execution)
2021
(3) SA 135
(SCA) it was held that the keeping and maintaining of
records involved no public act, with legal efficacy by the CIPC that
required
to be set aside in the manner suggested by the respondents.
[18]
For these reasons, I do not believe that this point has merit
and this leaves the question of the power of the court
to set aside
the notice of termination.
The
power to make the order setting aside the notice of termination
[19]
It is the applicants’ case that the court has
jurisdiction to set aside the notice, because the court has
statutory
oversight
over business
rescue proceedings
throughout
in
accordance with Chapter 6 of the
Companies Act, and
whilst there may be no express provision for the
setting aside of a termination this would follow from the stated
purpose of Chapter
6. There can, according to the applicants, be no
question of the court having the power to intervene in order to
counter an abuse.
The applicants contend that an applicant is always
entitled approach the court for appropriate relief in the case of an
abuse,
or an irregularity in the context of business rescue, and a
business rescue practitioner is and remains accountable for his
conduct
to the court and to affected parties.
[20]
Oversight
is a somewhat nebulous concept. In
section 128(i)
of the
Companies
Act, reference
is made to
supervision
,
and it is said to mean “
the
oversight imposed on a company during its business rescue
proceedings
”
. In this sense, it
means the oversight by a business rescue practitioner, not the court.
[21]
In
Knoop
NO and Another v. Gupta (Execution)
at
[39] to [41]
[1]
, an overview is
provided of the business rescue process, where it is commenced
voluntarily by a resolution of the directors and
it is held, at [41],
that:
…
Instead,
there is an entirely private process involving the company, the BRP
and all affected persons…
[22]
The fact that business rescue is an entirely private process of
the nature described above, obviously does not mean that
the process
(or the business rescue practitioner) is entirely immune from
judicial scrutiny and Chapter 6 of the
Companies Act provides
a
number of instances where the court may, and should be approached.
[23]
For instance,
in
a voluntary business rescue the practitioner is appointed by the
board of directors of the company, but can only be removed by
a court
order under
section 130
of the
Companies Act, or
under the provisions
of
section 139.
When the court has made an order under
section
130
(1)(b), then, in the language of
section 130(6)(a)
, “
the court must
appoint an alternate practitioner
”.
As further examples, the business practitioner may, under
section
136(2)(b)
a
pply
urgently to court to entirely, partially or conditionally cancel, on
any terms that are just and reasonable in the circumstances,
any
obligation of the company contemplated in paragraph 136(2)(a)
and under
section 137(5)
, the court may remove a director from office
on application by the business rescue practitioner and on specific
grounds. Under
section 153
(b)(i)(bb) the court may set aside –
on the application of an affected person – the result of a vote
against the adoption
of a business rescue plan, on the grounds that
it was inappropriate.
[24]
The manner in which Chapter 6 is structured and organized does
not, to my mind, point to the existence of an inherent
power over
business rescue practitioners, or, for that matter, to a court having
general oversight over the business rescue process
(of a nature that
would enable any disagreement with any decision made by a business
rescue practitioner being effectively reviewable
by the court). It
points in the opposite direction and at least the examples referred
to above indicate that the court may be approached
to intervene under
specific circumstances, for a specific purpose.
[25]
The question of the inherent power of the court should be
approached carefully. In
Molaudzi
v. The State
2015
(2) SACR 341
(CC)
at
[33] it is explained with reference to section 173 of the
Constitution
[2]
that t
he
inherent power (to regulate the process), does not apply to
substantive rights. It pertains to adjectival or procedural
rights. The
court may exercise inherent jurisdiction to regulate
its own process where existing rules and procedures do not provide a
mechanism
to deal with a particular scenario and at [34], it is held
that the court cannot use this power to assume jurisdiction that it
does not otherwise have.
[26]
Subject to this
caveat
, the nature of the enquiry
into the existence of the inherent power of the court is important.
The question is not whether there
is no reason for the court not to
have the power, but rather, whether the court does indeed have the
power to make an order
sought. This is the manner in which the
question of inherent jurisdiction was approached by Wallis JA (in a
minority judgment)
in
General Council of the Bar of South Africa
v. Geach and Others
2013 (2) SA 52
(SCA) at [195]. In
Geach
,
the question concerned the power to order the repayment of fees and
Wallis JA held that “
The power in question is not authorised
by law and does not arise from an inherent disciplinary power that
courts may exercise over
legal practitioners.
”
[27]
In
Cawood NO v. Murray NO and Others
2024 (6) SA 222
(GP) the Full Court considered the question whether it had the power
to order the repayment of a business rescue practitioner’s
fees. It was argued
inter alia
that because business rescue
practitioners are officers of the court and because the court has
inherent power to discipline and
sanction legal practitioners, the
court has (or should have) the power to order repayment of
practitioners’ fees. It was
held, as follows, at [45] and
further:
[45]
I find that the court does not have an inherent power over BRPs. I
say so for the following reasons.
[46]
In the first place Knoop is authority for the proposition that, when
we consider BRPs as officers of the court, this does not
add anything
to their duties and responsibilities. Put differently, the court
limited the meaning of the concept in respect of
BRPs, albeit not
directly on point in respect of the issue of ordering the repayment
of fees.
[47]
But this is not the only source. The language and structure of s
140(3)(a) also suggest a limited meaning should be given.
[48]
First, the section says the BRPs are only officers of the court
'(d)uring a company's business rescue proceeding'. This limited
duration suggests that BRPs are officers of the court only
temporarily, whilst they are appointed in a specific case. Thus, they
are unlike the legal practitioners who are still on the roll, for
whom being an officer of the court is a continuous, uninterrupted
obligation.
[49]
Second, the subsection couples the notion of BRPs being officers of
the court with their reporting duty in terms of 'any applicable
rules
of, or orders made by, the court'. This means that when they report
to the court, they are subject to a higher fiduciary
duty because in
this respect they are officers of the court. But there is no
suggestion that beyond this specified function they
are subject to
further obligations as officers of the court, akin to those of legal
practitioners.
[50]
Third, the structure of the section, which goes on to say that the
BRP has the responsibilities and duties of a director, suggests
that
this is an office holder sui generis, not quite an officer of the
court or a company director in the traditional sense.
…
[56]
I find therefore that the court does not have an inherent power to
order a business rescue practitioner to repay fees for misconduct.
Such an order would be beyond the court's powers in terms of the
principle of legality.
[28]
I am in respectful agreement with the findings in
Cawood
,
and in
Gilbert v. Bekker
1984 (3) SA 774
(W) it was held, with
reference to the
Insolvency Act 24 of 1936
that:
…
it
is quite inaccurate, in the scheme of our insolvency
legislation, to regard the trustee as any kind of officer of the
Court.
After all, he is elected by the creditors and not appointed by
the Court and is furthermore not under the control of the Court but
under that of the Master. Our Courts are not entrusted
with insolvency administration as in England. The Court, when
called
upon to do so, merely applies the law to a given situation. In
England, however, bankruptcy administration is conducted not only
by
the Judges and Registrars of the Courts (which function also as
"bankruptcy Courts") but by certain officers appointed
for
the purpose of bankruptcy administration. They are official receivers
and trustees. They are by statute designated officers
of such
Courts…
[3]
[29] I
appreciate that
Gilbert
was decided with reference to a
different statute, but the same principle, in my view applies in this
case.
Business rescue is a
statutory creation, and the business rescue process is regulated and
organized, by statute (Chapter 6). Absent
an inherent or substantive
jurisdiction, the court has the powers, as conferred by the
Companies
Act, and
for the purposes set out in the
Companies Act.
[30
]
For these reasons, I find that this court does not have the
power to make the order sought by the applicants, for the CoR125.2
notice / the notice of termination to be set aside. This is not a
power extended by any provision of the
Companies Act and
this
application, for these reasons, falls to be dismissed.
The
failure to inform the court
[31]
I consider it necessary to deal with the question of the
business rescue practitioner’s failure to inform the court,
in
accordance with
section 141(2)(b)
of
the
Companies Act.
[32
]
I have some difficulty in seeing how the court is to be
informed.
Section 141(2)(b)
provides that (once the business rescue
practitioner forms the view that
there
no longer are reasonable grounds to believe that the company is
financially distressed) the practitioner must so inform the
court,
the company, and all affected persons in the prescribed manner, and,
in terms of
section 141(2)(b)(i)
– if the business rescue
process was confirmed by a court order in terms of
section 130
, or
initiated by an application to the court in terms of
section 131
–
apply to court for an order terminating the business rescue
proceedings. Thus, in the case of a business rescue process
that was
confirmed by a court order in terms of
section 130
, or initiated by
an application to the court in terms of
section 131
, an application
must be made to court, in any event. If that is so, the purpose of
the court being informed, in addition to an
application being made to
court, is not clear to me at all.
[33]
Section 141(2)
contemplates two scenarios. The first is
that which is described above, where
a
business rescue process that was confirmed by a court order in terms
of
section 130
, or initiated by an application to court in terms of
section 131
is terminated pursuant to
section 141(2)(b)(i).
This must
happen on application to the court. The second is that which is
relevant to this application, and may occur in terms
of
section
141(2)(b)(ii)
, which provides that
otherwise
(in other words, other than where business rescue process was
confirmed by a court order in terms of
section 130
, or initiated by
an application to the court in terms of
section 131)
the business
rescue practitioner is to file a notice of termination of the
business rescue proceedings. In this, second scenario,
the notice
requirement becomes, to my mind, even more problematic.
Section
141(2)(b)(ii)
does not require a court application, or a court order
and if that is so, the purpose of notice to the court, without an
application
to the court, is similarly unclear. I also have some
difficulty in seeing how, practically, the court would (and could) be
notified,
absent an application and there would be no purpose to make
an application, if the leave of the court is not required.
[34]
These issues were considered in
Knoop
NO
and Another
v.
Gupta
and Another
2021 (3)
SA
88
(SCA), which is authority for the proposition
that a reporting obligation, of this nature, does not exist in this
context (of a
voluntary business rescue). It was held as follows:
[32]
Section 141(2)(b)
says that if the BRP concludes that there are no
longer any reasonable grounds for thinking that the company is
financially distressed
they are obliged to inform the court, the
company and all the affected parties in the
prescribed
manner. With a voluntary business rescue, it is unclear how the court
is to be informed or what it is to do with this
information. A judge
faced with an unopposed, and probably ex parte, application in the
motion court, in which no relief was asked
and no order could be
made, would rightly question whether it was properly before the
court. The BRP merely has to file a notice
of termination of business
rescue with the CIPC. This brings the business rescue to an end.
Section 141(2)(b)
seems inapplicable in the case of a voluntary
business rescue. There is no other provision of the Act that requires
them to report
to the court as envisaged in
s 140(3)(a).
In my view,
whatever relevance the description of a BRP as an officer of the
court may have in the context of business rescue ordered
by the court
under
s 131
of the Act, it has no application to a voluntary business
rescue and these provisions should be construed accordingly.
[35]
The more pertinent question for purposes of this application,
is whether the failure to comply with this requirement,
even if it
exists, would address the issue of the power to make the o
rder
sought. I do not believe that it does, and even if I am wrong, and
there is in fact a manner, practically, in which this requirement
can
be complied with, I do not see how the failure to do so will change
the position on jurisdiction. Business rescue ends, not
with a court
order to that effect (in the context of
section 141)
, but with a
notice to that effect and the same considerations and principles, as
discussed above, suggest that even if there is
an obligation to
notify the court, the failure to do so does not provide a basis on
which to grant the order sought in this application.
Order:
I
accordingly make the following order:
The
application is dismissed, with costs (payable on scale C, and to
include the costs of two counsel where two counsel were employed).
J.
DANIELS
Acting
Judge of the High Court
GAUTENG
DIVISION, JOHANNESBURG
This
judgment is handed down electronically by circulation to the parties
or their legal representatives by email, by uploading
to the
electronic file of this matter on Caselines, and by publication of
the judgment to the South African Legal Information Institute.
The
date for hand-down is deemed to be 13 May 2026.
HEARD
ON:
18 March 2026
DELIVERED
ON: 14 May 2026
For
the applicants: Adv. J G
Smit
Instructed
by:
Larson Falconer Hassan
Parsee Inc.
For
the respondents: Adv. H A Van der Merwe and Adv.
Khosi Pama
Instructed
by:
Dempster McKinnon Inc.
[1]
“…
When
one is dealing with a company that is placed in business rescue
voluntarily by way of a resolution of the board of directors,
the
process of business rescue is conducted on the basis of the actions
of the company; affected persons, that is, shareholders,
any trade
union representing employees, and employees;
the
BRP; and the creditors. It is the company, acting through its
directors, that commences the process and appoints the BRP.
The
company then gives notice of the resolution to commence business
rescue. During the course of the business rescue the directors
of
the company remain in office and must continue to perform their
functions as directors
]
and
perform their management functions in accordance with the express
instructions of the BRP to the extent that it is reasonable
to do
so. The BRP must investigate the affairs of the company and
develop a business rescue plan to be considered by affected
persons.
If the plan is adopted, the company is obliged to implement it under
the direction of the BRP. [40] If it transpires
at any stage of the
process that the company cannot be rescued, the BRP is obliged to
give notice of this and approach the court
for a liquidation order.
If the business rescue plan is substantially implemented, the BRP
files a notice with the CIPC and
the business rescue terminates
when that notice is filed. If the business rescue plan is proposed
and rejected and no affected
person has acted to extend it in terms
of
s 153(1)
of the Act, the business rescue terminates. The BRP is
obliged in that event to file a notice of termination of the
business
rescue. If at the end of the BRP's investigation, they
conclude that there are no longer grounds for thinking that the
company
is financially distressed, they must inform the court, the
company and all affected persons of that fact and file a notice of
termination of the business rescue. On filing that notice, the
business rescue proceedings end”
[2]
"The
Constitutional Court, the Supreme Court of Appeal and the High Court
of South Africa each has the inherent power to
protect and regulate
their own process, and to develop the common law, taking into
account the interests o
f
justice."
[3]
See
also
The
Master of the High Court (North Gauteng High Court, Pretoria) v.
Motala NO and Others
2012 (3) SA 325 (SCA) at [5] and further and
Lipschitz
v. Wattrus NO
1980
(1) SA 662 (T)
at
671G