IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, JOHANNESBURG)
Case No: 2026-098606
(1) REPORTABLE: No
(2) OF INTEREST TO OTHER JUDGES: Yes
(3) REVISED: Yes
Date: 23 June 2026
In the matter between:
THE STANDARD BANK OF SOUTH AFRICA LIMITED
and
DSCM CONSULTANTS CC (in business rescue)
DILLON JOHN WESSELS N.O.
THE COMPANIES AND INTELLECTUAL
PROPERTY COMMISSION
GITANKUMAR KANTILAL
JUDGMENT
STRIME AJ
Applicant
First Respondent
Second Respondent
Third Respondent
Fourth Respondent
INTRODUCTION
1. This matter was argued as an urgent application in the Specialised Insolvency
Court on 26 May 2026. On 27 May 2026 I handed down my order as follows:
1 .1 This matter is urgent;
1.2 The first Respondent's business rescue proceedings are forthwith
converted into liquidation proceedings in terms of section 132(2)(a)(ii) of
the Companies Act 71 of 2008;
1.3 The first Respondent's estate is hereby placed under final liquidation;
1.4 The fourth Respondent's counterapplication is dismissed;
1.5 Costs of this application and the fourth Respondent's counterapplication
are in the liquidation of the estate of the first Respondent;
2. These are my reasons for my order.
THE PARTIES
3. The applicant, Standard Bank of South Africa Limited ("Standard Bank"),
seeks an order to convert the business rescue proceedings against the first
respondent, DSCM, into liquidation proceedings in terms of Section 132(2)(a)(ii)
of the Companies Act 71 of 20081 ("the Companies Act")
4. There are three additional respondents, Dylan John Wessels N.O. ("the
second BRP"). The second BRP is the recently (and current) appointed
business rescue practitioner of DSCM (second respondent). The third
respondent is the Companies and Intellectual Property Commission ("CIPC")
and the fourth respondent is Gitankumar Kantilal ("Kantilal"). Kantilal is the
1 (2) Business rescue proceedings end when -
(a) the court -
(i)
(ii) has converted the proceedings to liquidation proceedings;
2
sole member of DSCM. Initially no relief was sought against the CIPC or
Kantilal save that in the event of any opposition, then costs were sought
against any opposing party. On 12 May 2026 the second BRP filed his notice
to abide the decision of this court. Until the date of the hearing (on 26 May 2026)
only Kantilal and DSCM opposed the application. At the commencement date
of the hearing in response to my request as to the status of the applicant's Rule
7(1) notice, Kantilal's counsel conceded that both attorney Rudie Mangena
and RM Inc. Attorneys were not authorised to represent DSCM and that he
represented Kantilal only. The application was thus opposed by Kantilal only.
5. The application was opposed on numerous grounds as follows:
5.1 that the application was not urgent and that applicant's claim of urgency
"is largely of its own making";
5.2 that for the relief it sought in its Notice of Motion, Standard Bank first
required the leave of the court in terms of Section 133 of the Companies
Act 71 of 2008 ("the Companies Act");
5.3 that in demanding return of its vehicles from My Next Car (Pty) Ltd t/a
Bolt ("Bolt"), Standard Bank had again acted in breach of Section 133
of the Companies Act contending that for this too Standard Bank
required the leave of the court before acting as it had;
5.4 that the Standard Bank Cession executed by DSCM (on 30 May 2014)
is not valid and binding as against DSCM;
5.5 that DSCM had a reasonable prospect of being rescued and that the
application to convert it to liquidation should be rejected;
3
6. DSCM also brought a counterclaim against Standard Bank for:
6.1 a declaration that, by Standard Bank contacting Bolt demanding return
of the vehicles, this constituted an unlawful enforcement action in breach
of the moratorium provided for in Section 133(1) of the Companies Act;
and
6.2 a declaration that the 2014 cession of book debts did not entitle
Standard Bank to enforce any security or take enforcement action
against DSCM or its debtors without the prior written consent of the
business rescue practitioner or an order of court, pending final
determination of the validity, enforceability and scope of the cession;
6.3 an interdict restraining Standard Bank from taking any further steps to
enforce its security cession for repossessing vehicles forming part of
DSCM's fleet of vehicles and from contacting any DSCM debtors or
counter-parties of DSCM without the prior written consent of the current
business rescue practitioner or order of court;
6.4 the calling of, inter alia, a detailed and comprehensive statement and
debatement of account and other financial information from Standard
Bank.
KANTILAL'S ADDITIONAL SUPPLEMENTARY AFFIDAVIT
7. Kantilal filed a supplementary affidavit during the afternoon of the day
immediately preceding the hearing, to which he attached, inter alia:
7.1 a draft, unaudited, unsigned set of financial statements of DSCM for the
period ending 28 February 2026;
7.2 a cashflow projection for DSCM for the period May 2026 to May 2027.
4
8. No application seeking the leave of the court to admit it accompanied this
supplementary affidavit. There should have been one as one can't just present
to a court after the filing of the replying affidavit another affidavit without first
seeking the court's leave to serve and file it.
9. At the commencement of the hearing Standard Bank's counsel objected to the
affidavit being admitted into evidence this for a number of procedural and
substantive reasons. He also drew to the court's attention that the content of
the affidavit was damaging to DSCM's case. In this regard he quoted extracts
from these annexures which confirmed that DSCM:
9.1 .1
9.1.2
was factually insolvent because its total liabilities exceeded its
total assets by R22,223,661.00; and
was also commercially insolvent as the DSCM unsigned, draft
financials recorded (inter alia) that its ability to continue as a going
concern was dependant on a number of factors, the most
significant being Kantilal's ability to continue to procure funding
for it. It was common cause from the papers Kantilal had not.
10. I did not have to rule on this supplementary affidavit's admissibility as Kantilal's
counsel resultantly withdrew this affidavit.
RULE 7(1) NOTICE
11. Kantilal in his answering affidavit records that he is authorised to represent
DSCM. This was disputed by the applicant. On 22 May 2026 it served a High
Court Rule 7(1) Notice disputing that attorney Rudie Mangena and/or RM Inc.
Attorneys authority to represent DSCM. When this matter was heard I asked
the parties for their views on the notice as it had not been formally responded
to. Kantilal's counsel conceded that he / his instructing attorneys did not
represent DSCM. As already stated, Kantilal then was the only party opposing
this application.
5
HISTORY AND FACTUAL BACKGROUND
12. This was not DSCM's first venture into business rescue. It had previously been
placed into business rescue and had exited rescue approximately four years
back. This earlier rescue formed the basis of Kantilal's challenge on Standard
Bank's cession in securitatem debiti of claims and debts dated 30 May 2014
("the Standard Bank cession"). I deal with this later in my judgment when I
deal with the validity of this cession agreement.
RELEVANT UNDISPUTED BACKGROUND FACTS AND COMMON CAUSE FACTS
ARE THAT:
13. On or about 30 May 2014 DSCM as represented by Kantilal signed a
continuing covering cession in favour of Standard Bank pursuant to which it
ceded to Standard Bank in securitatem debiti its right, title and interest in and
to its book debts, both present and future ("the Standard Bank cession") 2.
This is the same cession I have referred to above.
14. Since about June 2024 DSCM has paid no monies whatsoever to Standard
Bank in reduction of its indebtedness to Standard Bank.
15. On or about 15 September 2025, the Honourable Fisher J. ordered as against
Kantilal in his personal capacity (in respect of two guarantees he had signed
for on behalf of DSCM in favour of Standard Bank) payment as follows:
15.1 R759,682.15 together with interest at the rate of 15. 7% per annum from
25 April to date of final payment;
15.2 R15,281,759.74 together with interest as provided for in the rental
agreements in question;
15.3 R304,055. 7 4 together with interest at the rate of 13. 75% per annum and
costs of the application on the scale as between attorney and client.
2 FA paras 18, 34 and 39. This is the same cession referenced above.
6
16. Kantilal applied for application for leave to appeal this judgment which was
refused. He then petitioned the Supreme Court of Appeals in Bloemfontein for
leave to appeal. That application also failed. Accordingly, this judgment is final
and remains extant as against Kantilal.
17. Following on the Fisher J. judgment referred to above and the other litigation
matter brought by Standard Bank against DSCM, DSCM as represented by
Kantilal on 15 December 2025 placed itself into voluntary business rescue.
This it did by way of a resolution signed by Kantilal in terms of Section 129(1)
of the Companies Act 71 of 2008 ("the Companies Act"). This resolution was
(as provided for further in the Companies Act) accompanied by a sworn
statement attested by Kantilal, also dated 15 December 2025. Three days later
on 18 December 2025 pursuant to Kantilal's nomination, one Zander Hugo
lnsel ("the first BRP") was appointed DSCM's business rescue practitioner.
18. After taking legal advice3 on the validity of the Standard Bank cession and on
20 February 2026 the first BRP in writing confirmed the validity of the
Standard Bank Cession. As the BRP was acting on behalf of DSCM in his
capacity as its business rescue practitioner, his decision is final and binding on
DSCM. This then should put paid to any attack on the validity and enforceability
of the cession made thereafter.
19. The first BRP failed to timeously publish DSCM's business rescue plan4. He
attempted to secure the consent of creditors to an extension to publish it.
Standard Bank refused the extension. Given the quantum of Standard Bank's
claim, the 50% of the value of creditors' claims required to successfully obtain
the extension was not achieved. In March 2026 the first BRP then determined
that DSCM could not be rescued.
20. This left the first BRP in a predicament as to what to do. On 27 March 2026
he addressed a letter to Kantilal inviting Kantilal to demonstrate to him why
3 FA paras 18 and 39
4 Per Section 150(5) of the Companies Act
7
he, Kantilal, thought rescue ought not to be terminated5. He asked for a clear
and implementable proposal, details of any funding and any alternative
proposal that would produce a better return to creditors than on liquidation.
Kantilal did not pertinently respond to this letter. None of what was asked for
was provided by Kantilal in his answering affidavit. Rather as appears from the
record, this letter infuriated him and his response was to seek the removal of
the first BRP and to replace him with the second BRP which he achieved.
21. On 2 April 2026 Standard Bank's attorneys addressed a letter to DSCM's
largest customer, My Next Car (Pty) Ltd t/a Bolt ("Bolt"), with whom DSCM
had entered into lease agreements for 298 of Standard Bank's vehicles
demanding return of all of its vehicles which were at the time in Bolt's
possession. It is this letter which Kantilal refers to when he alleges that
Standard Bank acted and proceeded without first obtaining consent in terms
of Section 133 of the Companies Act.
22. On 14 April 2026 Bolt addressed a notice to DSCM, terminating all of its
agreements with DSCM6. Approximately 100 of these vehicles are currently in
the possession of Standard Bank's auctioneers, Park Village Auctioneers. The
balance of these Standard Bank vehicles are in the possession of DSCM.
Bolt's termination as such had the effect of DSCM losing a substantial portion
of its revenue it previously earned for the lease of these vehicles to Bolt.
23. Bolt's termination took effect on 15 April 2026 from which date DSCM lost all
of Bolt's revenue7.
24. On 22 April 2026 the first BRP in discharge of his duty as DSCM's business
rescue practitioner, launched an application for the liquidation of DSCM. As
already recorded, Kantilal on the same day issued an urgent application to
remove the first BRP as DSCM's business rescue practitioner.
5 FA para 21; annexure FA23
6 FA paras 19,25; 4R AA Annexure AA5
7 FA para 19; 4R AA Annexure AA5
8
25. On 24 April 2026, (according to Kantilal's counsel), the first BRP and Kantilal
''reconciled" resulting in the first BRP resigning as DSCM's business rescue
practitioner, withdrawing his liquidation application and Kantilal withdrawing his
application to remove the first BRP as DSCM's business rescue practitioner.
26. On the same day the second BRP was appointed as DSCM's new business
rescue practitioner. This took place approximately one month prior to this
hearing.
27. Six days later and on 30 April 2026 Standard Bank launched this urgent
application truncating the time period for filing of notice of intention to oppose
to 5 May 2026 and for the filing of answering affidavits to 12 May 2026.
28. After all affidavits had been filed and as already stated, the matter was finally
enrolled for hearing in the urgent court on 26 May 2026.
THE BUSINESS OF DSCM
29. The business of DSCM is that of renting motor vehicles to what it has itself
described are "businesses, individuals and the e-hailing market". It is also
common cause that DSCM operated a fleet of 333 vehicles of which the 298
vehicles with Bolt were financed by Standard Bank (in terms of written lease
agreements and instalment sales agreements). The remaining 35 vehicles were
financed by Absa Bank Limited ("Absa").
STANDARD BANK SECURITY
30. As already stated:
30.1 Standard Bank's security for DSCM's indebtedness (in addition to its
ownership in and to the 298 vehicles) is the Standard Bank cession;
30.2 the validity and enforceability of the cession was placed in issue by
Kantilal.
9
31 . Only one answering affidavit was filed (i.e taking into account the withdrawal of
the supplementary affidavit on the day of the hearing). That is the answering
affidavit of Kantilal.
32. As already stated neither DSCM or the second BRP have opposed this
application and the second BRP has given notice to the court that he abides
the decision of this court. He has not filed any affidavits at all. This is profound
for the following reasons:
32.1 only he can represent DSCM at this time.
32.2 he has given no indication to date whatsoever on whether or not in his
opinion there are any reasonable prospects of DSCM being rescued.
32.3 whatever Kantilal has recorded the second BRP is doing or intends
doing is hearsay evidence and falls to be rejected by the court.
33. On these grounds alone, and there are more, I have as I record below, rejected
Kantilal's counterclaims.
ISSUES THAT FALL TO BE DETERMINED
34. Whether or not his application is urgent.
35. Whether or not Standard Bank was required in terms of Section 133(1)(b) of
the Companies Act to seek the leave of this court to launch not only the
application but in addition, to demand from Bolt as it did on 2 April 2026 return
of its vehicles, and to enforce its rights in terms of the Standard Bank cession.
36. The validity and enforceability of the Standard Bank cession
37. Whether or not DSCM's business rescue proceedings can be converted to
liquidation in terms of Section 132(2)(a)(ii) of the Companies Act.
38. Whether DSCM is commercially insolvent.
10
39. Whether there is any reasonable prospect of DSCM being rescued.
40. The counter-applications.
41 . Costs and the scale thereof.
URGENCY
42. DSCM disputed urgency and allege that urgency was self created by Standard
Bank.
43. To satisfy the court that the application is urgent, Standard Bank is to set out
explicitly circumstances why this matter is urgent and reasons why it cannot be
afforded substantial redress at a hearing in due course.
44. Standard Bank's urgency is based on the fact that many of its vehicles were
being used and were not insured. In this regard it submitted that its vehicles
were depreciating daily, were exposed to loss and risk, were uninsured and that
DSCM had not been paying any monies to it since 2024.
45. Kantilal's counsel referred to certain annexures attached to Kantilal's
answering affidavit in an attempt to provide evidence to the court that Standard
Bank's vehicles were insured with insurance policies that were fully paid up.
46. In reply Standard Bank's counsel argued and correctly pointed out that these
annexures did not evidence this and that at best these documents evidenced
that about 100 vehicles only were insured although as he submitted further,
these annexures did not evidence any insurance premiums being paid up to
date and that these insurance policies were of any force and effect. In the result
he finally submitted that at least two thirds of Standard Bank's fleet were
uninsured.
11
47. With regard to urgency Standard Bank's counsel referred me to two authorities
as follows:
47.1 One of Goldstone J. in Twentieth Century Fox Film Corporation and
Another v Antony Black Films (Pty) Ltcl8 to the effect that "for the purpose
of deciding upon urgency of this matter I assumed, as I have to do, that
the applicant's case was a good one"; and
4 7 .2 Imperial Logistics Advance (Pty) Ltd v Remnant Wealth Holdings (Pty)
Ltd9 where the court held that:
"Winding-up applications are, in general by their nature, urgent ..... .
The dismissal of the application on the basis that it lacked urgency
was therefore not competent. The matter was urgent and should
have been treated as such by the High Court."
48. In the result it was argued that:
48.1 this is a winding-up application in effect; and
48.2 the longer DSCM remains in rescue, the longer its moratorium in Section
133 would prejudice its creditors.
49. In determining urgency, I have to consider whether or not Standard Bank
would be able to obtain substantial redress in due course. I have in this regard
taken into account not only the grounds of urgency it relies on, but in addition,
my findings below that DSCM is commercially insolvent, has little or no revenue
whatsoever to pay any of its debt, has no reasonable prospects of being
rescued and falls to be liquidated at the earliest opportunity. These facts on
their own would justify the matter being heard on an urgent basis, this to avoid
any abuse which operates at present and will continue to operate if DSCM
remains in rescue and is not liquidated. The abuse I refer to is the use of the
8 Goldstone J. in Twentieth Century Fox Film Corporation and Another v Antony Black Films (Pty) Ltd 1982(3) SA
582 W at 586 G-H
9 Imperial Logistics Advance (Pty) Ltd v Remnant Wealth Holdings (Pty) Ltd [2023] ZA SCA 175 (SCA) at paras 30
and 32
12
moratorium unlawfully to fend off an entitled creditor and using the moratorium
to shield a company not needing such protection10. This abuse also extends to
Kantilal's attempts to avoid the inevitable, namely the liquidation of DSCM
which is commercially insolvent, has no reasonable prospects of being rescued
and should be liquidated. I find that there is no evidence which reflects that
Standard Bank's vehicles in DSCM's possession are insured, will in future be
insured and such vehicles are at risk of depreciation, loss and damage. This
risk is real and ongoing. Standard Bank did not delay in launching this
application. It did so approximately six days after the first BRP withdrew his
liquidation application and the appointment of the second BRP. It also did not
unreasonably truncate the time limits afforded to the respondents to oppose it.
On the contrary it gave the respondents reasonable time periods to oppose the
application and file affidavits.
50. I also do not believe that Standard Bank will, if the application is not granted,
secure substantial redress in due course. A hearing in due course will take
many months, if not years, to be finally heard. I thus find on all of the above
grounds that the application is urgent and should be heard as one of urgency.
THE SECTION 133 OF THE COMPANIES ACT DEFENCES
Firstly what I am to determine is whether or not Standard Bank was obliged to
apply to the Court for leave to launch this application.
51. An application for conversion in terms of Section 132(2)(a)(ii) is a statutory
mechanism provided to the courts to bring an end to business rescue
proceedings. It can validly be brought by a creditor11 . Standard Bank had every
right to apply to court for this relief. The question is whether an application for
conversion of a business rescue proceeding to liquidation in terms of Section
132(2)(a)(ii) first requires the leave of the court. In attempting to answer this
132(2)(a)(ii) first requires the leave of the court. In attempting to answer this
10 Booysen v Jonkheer Boerewyn Makery (Pty) Ltd 2017 (4) SA 57 (WCC) at para 53 (per Sher AJ) "the provisions
of S133 are not understood to be a shield behind what a company not needing the protection may take refuge to
fend off legitimate claims"
11 South African Revenue Services v Louis Pasteur Investments (Pty) Ltd (in provisional liquidation) 2022(5) SA 179
13
question one must have regard to the text, context and purpose of Section
133(1).
THE TEXT
52. This section has already received the attention of the Supreme Court of
Appeals12. It comments hereon as follows;
[25] Section 133 must be read as a whole: the different subsections
of a provision dealing with the same subject matter must not be
considered in isolation but read together so as to ascertain the
meaning of the provision. Section 133(1) is a general moratorium
provision that applies in relation to the assets and liabilities of the
company at the stage when business rescue comes into effect.
It protects the company against legal action in respect of claims
in general, save with the written consent of the business rescue
practitioner and failing such consent, with the leave of the court.
This Court has stated the purpose of s 133(1) as follows:
'It is generally accepted that a moratorium on legal
proceedings against a company under business rescue is
of cardinal importance since it provides the crucial
breathing space or a period of respite to enable the
company to restructure its affairs. This allows the
practitioner, in conjunction with the creditors and other
affected parties, to formulate a business rescue plan
designed to achieve the purpose of the process.'
[26] Both Cloete Murray v FirstRand Bank and Chetty v Hart were
concerned with claims existing prior to the commencement of
business rescue. The same is true of the cases in the High Court
involving attempts to recover possession from companies in
business rescue of leased premises or a leased motor vehicle,
the possession of which had been lawful prior to the
commencement of business rescue. So far as we can ascertain,
this is the first occasion on which it has been sought to invoke
the moratorium ins 133(1) in relation to a transaction concluded
after the commencement of business rescue or property coming
into a company's possession after that date. Entirely different
into a company's possession after that date. Entirely different
factors come into play in that situation. A business rescue
practitioner may borrow money, employ people or, as in this
case, sell property, in the course of business rescue. If the
business rescue practitioner does not meet those commitments,
it is not apparent that imposing a moratorium on the enforcement
of those contracts, or the recovery of what is due to third parties,
serves any significant purpose of business rescue. It may
operate to dissuade third parties from entering into transactions
that are necessary to keep the business afloat while attempts are
made to rescue it. We raised with counsel whether properly
12 Timasani (Pty) Ltd & Cawood v Afrimat Iron Ore (Pty) Ltd [2021] ZASCA 43
14
construed s 133(1) is concerned only with transactions
concluded prior to the commencement of business rescue and
the possession or ownership of property acquired or possessed
prior to that date. However, neither was in a position to make any
helpful submissions to us and it would not be appropriate to
decide the point without full argument. Fortunately the case can
be resolved on the assumption that the moratorium mav have
effect in relation to transactions occurrin g after the
commencement of business rescue.
[28] The general moratorium in s 133(1) is a defence in personam: it
is a personal , temporary benefit in favour of a companv
undergoing business rescue that cannot be utilised indefinitel y to
de/av the claims of creditors or result in the extinction of their
claims. Indeed, and as stated, legal proceedings in relation to
those claims may be initiated or continued with the consent of the
BRP or leave of the court.
[29] The section is not easv to construe. The prohibition says that 'no
legal proceeding ... may be commenced or proceeded with in
any forum', save in the circumstances specified in the various
sub-paragraphs. That stark prohibition is then qualified by
inserting the words 'including enforcement action against the
company, or in relation to any property belonging to the
company, or lawfully in its possession'. Enforcement action
appears to relate to contractual or other obligations incurred prior
to the business rescue. It would include any claim for specific
performance , payment of a purchase price, or deliver y of
propert y or goods that had been sold. The second and third
instances involve property that is either owned bv the companv
or in its lawful possession. The insertions must be directed to
some purpose, because they are unnecessary if a blanket
prohibition on legal proceedings of any kind was the aim. But,
prefacing them with the word 'including', suggests that there are
other unspecified situations hit bv the prohibition. On the other
other unspecified situations hit bv the prohibition. On the other
hand, if all claims of whatever type were the target, the insertions
serve no useful purpose. Courts have treated the reference to
property 'belonging to the companv. or in its lawful possession'
as excludin g such propertv from the prohibition of legal
proceedings. It would have been simpler then to refer to it in a
sub-paragraph, as was done with property over which the
company exercised the powers of a trustee. However, we must
take the section as we find it and there seems no other reason
for this insertion. No purpose connected to the process of
business rescue warrants the company under business rescue
being protected against proceedings to recover property that it
neither owns, nor lawfully possesses.
[30] In my view, properly construed s 133(1) provides that during
business rescue proceedings:
(1) no legal proceedings, including enforcement action,
against the company; and
15
(2) no legal proceedings in relation to property belonging to
or in the lawful possession of the company,
may be commenced or proceeded with in any forum. Put
differently, the words 'no legal proceedings' straddle both the
circumstances envisaged in (1) and (2). Thus, in Cloete Murray
v FirstRand Bank, it was stated that the inclusion of the term
'enforcement action' under the generic phrase 'legal
proceedings' seems to indicate that 'enforcement action' is a
species of 'legal proceeding' or meant to have its origin in legal
proceedings.
(the underlining is my own)
53. Since the new Companies Act came into force in May 2011 the general
principles as set out in 133( 1) have been subject to exceptions, e.g claims
against sureties and guarantors for the company, letters for cancellation of
agreements, claims made by creditors against assets which were either not in
the possession of the company or not lawfully in the company's possession 13.
54. Neither parties' counsel could refer me to any reported authority on whether or
not the leave of the court is a necessary pre-requisite for a Section 132(2)(a)(ii)
application. In support of his submissions that the court's leave is necessary
Kantilal's counsel referred me to certain authorities in its heads and referred
in argument to two of these authorities, namely:
54.1 Blue Star Holdings (Pty) Ltd v West Coast Oyster Growers CC14 ;
54.2 Standard Bank of South Africa Limited v Remitto (Pty) Ltd & Others
ZAFSHC25 (unreported).
55. These cases are not completely on point. Those courts in these cases did not
determine whether or not such leave was a necessary pre-requisite as I am
called upon to determine.
13 Investec Bank Limited v Bruyns 2012 (5) SA 430
Kythera Court v Le Rendez-vous Cafe CC 2016 (6) SA 63 (GJ)
Southern Value Consortium v Tresso Trading 102 (Pty) Ltd 2016(6) SA 501 wee - at paragraphs 26 and 30
14 Blue Star Holdings (Pty) Ltd v West Coast Oyster Growers CC 2013 (6) SA 540 (WCC)
16
56. Standard Bank's counsel referred me to one of the authorities referred to in
Kantilal's heads of argument, namely Chetty v Hart15. In this case the Supreme
Court of Appeal confirmed that, inter a/ia:
"[38] The appellant mischaracterises the consent requirement in
s 133(1)(a) as a jurisdictional condition. The arbitrator's
jurisdiction is derived from the arbitration agreement, not from
any provision in the Act. Section 133(1)(a) is more properly
described as a statutory moratorium 16 or procedural bar to the
initiation or continuation of legal proceedings. The important
question is whether, in requiring this condition to be satisfied, the
lawmaker sought to invalidate the proceedings brought without
the condition having been met or simply to give certain
procedural rights to a creditor without nullifying the proceedings
when this drastic consequence is not warranted. This answer to
this question calls for a closer examination of the, provision.
[39] Section 133(1) was enacted to protect a company under
business rescue against claims from creditors. Its object is to
prevent the practitioner being inundated with legal proceedings
without sufficient time within which to consider whether or not the
company should resist them and to prevent the company that is
financially distressed from being dragged through litigation while
it tries to recover from its financial woes. Its effect is to stay legal
proceedings except in those circumstances mentioned in s
133(1 )(a) to (e). The creditor may initiate or continue the
proceedings in terms of s 133(1)(a) with the written consent of
the practitioner.
[40] But s 133(1)(a) is not a shield behind which a company not
needing the protection may take refuge to fend off legitimate
claims. Thuss 133(1)(b), which is to be read disjunctively withs
133(1)(a) because of the use of the word 'or' in exceptions (a) to
(e), permits a creditor to seek the court's imprimatur to initiate or
continue legal proceedings against the company in the event of
continue legal proceedings against the company in the event of
a practitioner's refusal to give consent, or directly, even without
the permission of the practitioner having been sought. So s
133(1)(a) is not an absolute bar to legal proceedings being
instituted or continued against a company under business
rescue. This is a strong indication that non-compliance with the
section is not to be visited with the sanction of a nullity.
[41] Moreover, there is no other indication in the section that non
compliance carries with it the implication that the proceedings are
a nullity. In this regard it is of some relevance that this court
recently said of s 134(1)(c), which prohibits the exercise of any
right over the property in possession of the company during
business rescue proceedings without the practitioner's written
consent, that it was directory rather than peremptorv. So, non
compliance with the condition in this section does not necessarilv
15 Chetty v Hart (2015) (6) SCA424
16 Investec Bank Ltd v Bruyns (19449/11) [2011] ZAWCHC 423; 2012 (5) SA 430 (WCC) para 17.
17
lead to nullit v. 17 Although this was said in an obiter dictum it was
not contended before us that it was wrong and I consider it
persuasive .
[42] One would therefore have expected the section to say that non
compliance with s 133(1)(a) renders the proceedings void - or
use similar language - if that is what it sought to achieve. 18
Significantl y it says so specificall y ins 129(5). That section, which
is also in the chapter dealing with business rescue, says in terms
that any non-compliance with ss 129(3) or (4) pertaining to the
publication of a company resolution to begin business rescue
proceedings and appointment of a practitioner means that the
resolution 'lapses and is a nullity'. But even where this
consequence seemed clear this court considered that when this
provision (s 129(5)) was read withs 130(1), 'lapsing and nullity
arising from such non-compliance may be less than absolute'. 19
So in the treatment of two provisions in the Chapter2° dealing with
business rescue proceedings this court seems to have set itself
against nullifying actions taken under business rescue
proceedin gs in the face of non-com pliance with its provisions.
And, properly construed , I think that non-compliance with s
133(1 )(a) does not in and of itself invalidate legal proceedin gs
either.
[43] But there is more a fundamental obstacle in the way of the
respondent's bid to invalidate the arbitration proceedings.
Section 133(1) in general ands 133(1)(a) in particular , appears
to have been enacted exclusivel v for the benefit of the companv
and the practitioner appointed to oversee its affairs. In this
respect the practitioner's position is akin to that of a liquidator in
s 359 of the 1973 Companies Act.21 In a similar vein, the Western
Cape High Court (Rogers AJ) in Investec Bank Ltd v Bruyns22
characterised the defence afforded to the company by the
statutor y moratorium as a defence in personam - 'a personal
privile ge or benefit in favour of the company'. 23 Once this is
privile ge or benefit in favour of the company'. 23 Once this is
accepted a creditor - a claimant against the company as
described in s 128( 1) - has no locus standi to rel y on non
compliance with the section. Put another way, the defence is not
available to the creditor. Only the practitioner ma y seek its
protection. And only he may waive or consent to dispense with
compliance therewith. 24
[45] While not lacking in ingenuity, this submission is entirely without
merit. It is therefore hardly surprising that counsel for the
appellant was not able to provide any authority to support his
contention. The statutor y moratorium is crafted in a manner that
17 C/oete Murray & another NNO v Firstrand Bank Ltd tla Wesbank 2015 (3) SA 438 (SCA) para 24.
18 Compare Section 359 of the 1973 Companies Act.
19 Panama Properties (Pty) Ltd & another v Ne/ NO & others (35/2014) [2015] ZASCA 76 (27 May 2015) para 14.
2° Chapter 6.
21 Compare s 359 of the 1973 Companies Act.
22 Investec Bank Ltd v Bruyns 2012 (5) SA 430 (WCC).
23 Ibid para 18.
24 Compares 359(2) of the 1973 Companies Act; Bar/ows Tractor Company (Pty) Ltd v Townsend (727/93) [1996]
ZASCA 3; 1996 (2) SA 869 (A) at 884F-G; Henochsberg's Commentary on the Companies Act Vol 1 p 760(3).
18
balances the rights and interests of the company and claimants
against the company. So, as I have pointed out earlier, during the
moratorium there is no absolute bar against legal proceedings. A
creditor may ask for the practitioner's written consent and if
refused, approach the court under s 133(1)(b). In addition a
creditor may approach the court directly under this provision for
leave to institute legal proceedings, without having asked for the
practitioner's consent. The exercise of a creditor's rights are
therefore suspended during the moratorium, but this is balanced
by the other protections afforded it in the section itself
[46} The formal requirement for consent to be sought from the
practitioner and given in writing was obviously inserted to
promote legal certainty and avoid later disputes. 25 But it confers
no rights on a creditor other than those specifically provided for
in s 133. The appellant thus has no legal interest to challenge the
award on the ground she has advanced.
[48} To conclude, the appellant was successful in contending that
arbitration proceedings are legal proceedings for the purposes of
s 133(1). But she has not been able to persuade us that non
compliance with its provisions in and of itself nullifies the legal
proceedings. More fundamentally she has not shown that she
has standing to invoke its provisions in order to invalidate an
arbitration award on the ground that she was not informed of the
business rescue proceedings and therefore deprived of a right to
request and to receive written permission to continue the
proceedings."
[again the underlining is my own]
57. This application is clearly a "legal proceeding". It is however not an
"enforcement action". The question then is whether or not it is a legal
proceeding requiring consent of the Business Rescue Practitioner or the leave
of the courts.
58. As already stated above neither DSCM nor the second BRP as its
representative have opposed this application. Firstly and obviously then in my
representative have opposed this application. Firstly and obviously then in my
view as stated by the SCA above, Kantilal has no standing to invoke the
provisions of Section 133(1) as against Standard Bank as he has. Only the
second BRP and/or DSCM can. They are not before the court. On this ground
25 Compare Spring Forest Trading 599 CC v Wilberry (Pty) Ltd tla Ecowash & another (725/13) [2014]
ZASCA 178; Spring Forest Trading CC v Wilberry (Pty) Ltd tla Ecowash & another 2015 (2) SA 118
(SCA) para 13.
19
alone and there are more (dealt with below), I can and do dismiss Kantilal's
defence based on Section 133.
PURPOSE
59. I am also of the view that, in any event, an application for the conversion of a
company from business rescue to liquidation does not offend the purpose for
which Section 133 was legislated for, because:
59.1 at the time such an application is launched:
59.1.1
59.1.2
the company is no longer capable of being rescued nor has it a
reasonable prospect of being rescued;
a business rescue practitioner is no longer involved in trying to
financially rescue a company or restore it to solvency. He is not
thus then "being inundated with [a] legal proceedings without
sufficient time to consider whether or not the company should
resist [if] them and to prevent the company that is financially
distressed from being dragged through litigation while it tries to
recover from its financial woes".
59.2 as stated, the application is a procedural one. It is one of process. It does
not amount to confrontational litigation, is not "an enforcement action
against the company or in relation to any property belonging to the
company or lawfully in its possession". It also does not relate to
contractual or other obligations incurred prior to the business rescue
claim for specific performance, payment of a purchase price or delivery
of property or goods that had been sold.26 It is an application to change
the status of a company from business rescue to liquidation. It does not
distract the business rescue practitioner from attempting to rescue a
company in the circumstances as described in Chetty v Hart. The BRP
is also no longer attempting to rescue the company. Thus not only does
26 Per Timasani supra
20
CONTEXT
it not offend the purpose for which Section 133( 1) has been created, it
serves the purpose the BRP is obliged to achieve at this time, namely
the placing of a company incapable of being rescued into liquidation.
60. An application in terms of Section 132(2)(a)(ii) is a proceeding launched at a
time which should be a benefit to a business rescue practitioner. I say so
because it is launched at a time when a company is no longer capable of being
rescued or has no reasonable prospect of being rescued. At this time the
business rescue practitioner has a duty then to either launch a Section
132(2)(a)(ii) application, or a liquidation application27 or to file a notice with the
CIPC to terminate the proceedings 28. Thus in my view an application in terms
Section 132(2)(a)(ii) should not trigger as a prerequisite or a requirement a
Section 133(1) bar. In any event if it did this does not per Chetty v Hart render
these proceedings a nullity.
61. I thus find against Kantilal on this point and reject his submission that Standard
Bank had to first either obtain the consent of the second BRP or the leave of
the courts before being able to bring or proceed with its application.
DID STANDARD BANK, IN CLAIMING BACK ITS 398 VEHICLES FROM BOLT, ACT
IN CONTRAVENTION OF SECTION 133(1)
62. I also rule against Kantilal on this point for the following reasons:
62.1 as stated in Chetty v Hart, he has no right (no locus standi) to raise this
defence; and
62.2 Standard Bank addressed a letter to Bolt claiming return of its vehicles.
It did not commence with a legal proceeding and/or an enforcement
action. Letters of demand and not legal proceedings or enforcement
proceedings and do not offend the provisions of Section 133(1 )29 ; and
27 Per Section 141 (2)(a)(i) and (ii)
28 Per Section 132(2)(5)
29 Investec Bank Ltd v Bruyns 2012 (5) SA430;
21
62.3 in proceeding against Bolt it is also common cause then that DSCM was
not lawfully in the possession of the vehicles which Standard Bank
reclaimed from Bolt. A rei vindicatio is also in any event a valid exception
to the Section 133 moratorium or put differently, the moratorium in
Section 133(1) does not preclude vindicatory proceedings 30 because the
assets in question are not the property of the company in business
rescue. Standard Bank's proceedings against Bolt were vindicatory in
nature.
62.4 the 298 vehicles are not the property of DSCM. These are the property
of Standard Bank;
62.5 In the result and for all of these reasons, I find that Standard Bank's
letter addressed to Bolt for the return of its 298 vehicles, and the
subsequent return of these vehicles by Bolt to Standard Bank did not
trigger nor offend the provisions of Section 133( 1 ).
DID STANDARD BANK IN ENFORCING ITS RIGHTS UNDER THE STANDARD
BANK CESSION ALSO IN THIS INSTANCE REQUIRE EITHER THE PRIOR
CONSENT OF THE BUSINESS RESCUE PRACTITIONER OR THE LEAVE OF THE
COURT
63. For many of the reasons set out above, which I repeat, I find against Kantilal.
My findings are based on the following:
63.1 Kantilal does not have the right to raise this defence;
63.2 In proceeding against DSCM's debtors for payment of their debts due to
DSCM, Standard Bank did not institute any enforcement action or legal
proceedings against DSCM. DSCM had no right to claim these debts.
These rights vested in Standard Bank31 exclusively. It issued letters
3° Kythera Court v Le Rende Vouz Cafe CC 2016(6) SA63GJ; [2016] ZAGPHC 172
31 Picardi Holdings Ltd v Thekwini Property (Pty) Ltd 2009(1) SA493 SCA at paras [3] (496D - E) and
[14] (499 A- B).
22
against DSCM's debtors claiming payment of the indebtedness due by
them to DSCM. Standard Bank therefore did not bring any legal or
enforcement proceedings against property lawfully in DSCM's
possession. It enforced a right it exclusively held against DSCM's
debtors.
THE RESPONDENT'S COUNTERCLAIM
64. During Kantilal's counsel's address on his counterclaims, he indicated to me
that Kantilal was only persisting with his counterclaims in respect of prayers 1,
2, 3 and 10. He was not persisting with the remaining prayers in his
counterclaim.
65. Essentially he advised that all that Kantilal was now claiming in the
counterclaim centred around the Section 133 defences / objections. I then
enquired of him that if I found against his client on his client's Section 133
defences / objections, that this was the end of his client's entire counterclaim.
He responded in the affirmative.
66. Only DSCM as represented by the second BRP can bring these counterclaims.
Kantilal does not have the locus standi to do so.
67. On these grounds I dismiss the counterclaims with costs, such costs to be
payable on scale C out of DSCM's insolvent estate.
VALIDITY OF STANDARD BANK'S CESSION
68. To determine whether there is any merit to Kantilal's view that Standard
Bank's cession of debtors is invalid one must take into account the following:
68.1 the fact that this agreement of cession was signed by Kantilal in 2014.
68.2 it is in writing.
68.3 the attack on the cession is founded on a legal opinion based on DSCM's
first venture into business rescue, and that somehow brought the
23
68.3.1
Standard Bank cession to an end. Not only is this disputed by
Standard Bank, but in addition:
if this is correct (and there s no evidence before the court that it
is) the wording of the cession agreement caters for this. Clause 3
thereof under the heading "Continuing Covering Security"
provides as follows:
"3. The claims ceded by the cedent to the bank will be a
continuing covering security for all amounts which the
bank is entitled to recover from the cedent in law
(including interest, collection costs, default
administration fees and legal costs on an attorney
and own client basis) whether the amount:
3. 1 be incurred by the cedent in the cedent's own
name or in the name of any business owned by
the cedent either solely or jointly with others in
partnership or otherwise;
3. 2 arise from money lent and advanced or to be lent
and advanced, or from promissory or bills of
exchange made or to be made, accept or to be
accepted or endorsed or to be endorsed,
suretyships and other obligations assumed or to
be assumed or from any other cause
whatsoever, even if the debts are temporari!v
settled at any time."
[my emphasis added]
68.4 that Kantilal takes the view that until Standard Bank secures a
declarator that its cession is valid and binding it is invalid. This is not
correct. On the contrary I find that it is valid and binding until Kantilal
sets it aside by way of an order of court.
68.5 Finally, as already stated above, DSCM as represented by the first BRP
confirmed the validity of the Standard Bank cession. This confirmation
is binding by DSCM. Kantilal can't change this. This confirmation is on
its own sufficient to find that the Standard Bank cession is valid and
binding.
24
68.6 I, for all of the above reasons, find the Standard Bank cession to be
valid, binding and enforceable.
DSCM's COMMERCIAL INSOLVENCY
69. Having regard to Standard Bank's founding affidavit and annexures, the
common cause facts as admitted by Kantilal in his answering affidavit and
annexures and what is set out in Standard Bank's replying affidavit, the
following is clear:
69.1 DSCM is commercially insolvent. It is unable to pay its debts. I say so
based on, inter alia, the following:
69.1.1
69.1.2
Standard Bank has a liquid claim against DSCM
the bank has proved the quantum of its claims by way of
certificates. Certificates of balance are prima facie proof of
amounts due. Unrebutted prima facie proof becomes sufficient
proof on a balance of probabilities32 . The evidentiary burden of
leading evidence to displace the prima facie proof lies on DSCM.
It has failed to displace the prima facie evidence. In any event,
Kantilal's own sworn statement he deposed to in support of the
business rescue resolution of 15 December 2025 (which I quote
below) records that DSCM "has debt of approximately R45 million
(forty five million Rand) which comprises mainly of monies owed
to investors and financial institutions" and that this includes "a
disputed tax debt of approximately R2,800,000.00 33 ". This clearly
indicates an admission of liability to Standard Bank and Absa in
at least the sum of R45 million;
Absa has withdrawn its facilities and does not intend restoring
them at all;
32 Senekal v Trust Bank of Africa Limited 1978 (3) SA 375 A at 382E-383C (per Miller JA)
33 RA at paras 10 - 11
25
69.1.3
69.1.4
69.1.5
DSCM's loss of its main and/or substantial customer, Bolt. As a
result, all of the revenue it earned from 298 vehicles in Bolt's
possession has totally dried up;
the statements made under oath by the first BRP in his founding
affidavit to the liquidation application to place DSCM in liquidation
quoted in paragraph 73.3 below where he records, and it appears
correctly so, that DSCM is unable to pay its monthly insurance
premiums for the 333 vehicles, and that DSCM has no access to
funds and has not been able to secure new work and income.
There he concludes further that in the absence of any income,
DSCM cannot sustain trading and cannot meet its operational
commitments. Nothing has changed financially and factually for
DSCM since the filing of that liquidation application;
there is also no settlement concluded with Standard Bank; one
of the essential requirements advanced by Kantilal for DSCM's
successful rescue.
69.2 I also have had regard to Kantilal's allegations in his answering affidavit,
namely:
69.2.1
69.2.2
69.3
that notwithstanding the loss of Bolt, and its revenue to DSCM, it
has access to other forms of income and revenue from other
assets it leases, repairs and maintenance and the like;
that DSCM has a funder who is prepared to advance funding to
DSCM.
Kantilal has however provided no facts and thus no evidence to sustain
these allegations. He should have at the very least provided facts
evidencing that:
26
69.3.1
69.3.2
69.3.3
69.4
the identity of the funder( s );
the quantum of this funding;
the quantum of the other sources of revenue, if such sources
genuinely do exist.
Kantilal endeavoured to justify the refusal to disclose the identity of the
new funder/ lender to Standard Bank on the basis that Standard Bank
will somehow communicate with this lender and prejudice DSCM by
persuading this lender to not lend any monies to it. In its replying affidavit,
Standard Bank deal with this allegation. Firstly it draws to the court's
attention the fact that this allegation is not only untrue but also
improbable as it is an irrational one. In addition Standard Bank then
tendered to keep confidential the identity of such funder, not disclose or
use the identity of the funder for any other reason other than for the
purposes of this matter and to return all these details and information
back to DSCM at the conclusion of litigation. At the time of the hearing
Kantilal still did not disclose any of the identities of funders and the like,
notwithstanding having received these Standard Bank undertakings.
69.5 Kantilal in addition tendered to disclose the identity of this funder to the
court on a confidential basis. He did not do so.
70. Lastly, in concluding that DSCM is commercially insolvent, I have also had
regard to what the first BRP has stated in his liquidation application quoted in
paragraph 73.3 below. I am mindful that DSCM and the second BRP have not
opposed this application. There is not one iota of evidence whether in the form
of an affidavit or letter from the second BRP as to whether or not DSCM is
commercially insolvent, is capable of being rescued or has a reasonable
prospect of being rescued. All allegations by Kantilal as to what the second
BRP is busy with to try and rescue DSCM, is as stated, hearsay evidence and
rejected by the court.
27
71. There is no evidence whatsoever provided by Kantilal that DSCM is in any
position whatsoever to service any of its debts or has the ability to do so. All
evidence indicates a non-payment of its due debts, no revenue or cash and no
access to revenue or cash to pay any of its debts.
72. I in the result find that DSCM is unable to pay its debts and is commercially
insolvent.
REASONABLE PROSPECTS OF DSCM BEING RESCUED
73. In determining whether DSCM has a reasonable prospect of being rescued, I
have taken into account the following:
73.1 The following extracts from Kantilal's sworn statement signed on behalf
of DSCM on 15 December 2025:
"8. The CC [a reference to DSCM] has debt of approximately R 45
000 000 (Forty-five million rand ) which comprises mainly of
monies owed to Investors and Financial Institutions. This
includes a disputed tax debt of approximately R 2 800 000 (Two
million eight hundred thousand rand).·
10. The COMPANY[also a reference to DSCM] will be able to settle
the amount owing to creditors ff it is afforded time and opportunit y
to shed considerable costs, restructure the business and recover
mone y from assets.
13. The information contained in this Sworn Statement and the
opinion expressed in this Sworn statement relate to the financial
difficulties the CC [another reference to DSCM] and how the CC
can be rescued and continue as a going concern as an
alternative to liquidation and/or pay a higher dividend its creditors
than that which would become payable to creditors if the CC were
to be liquidated.
17. The CC currently has an annual turnover of approximately R30
million per annum and the CC provides employment lo 22 people.
18. It operates a vehicle fleet of 333 vehicles , of which 282 are
financed by Standard Bank, and the rest by various other banks
on leases.
19. As in similar type of businesses, the CC Is reliant on, inter alia
operating capital, availabilit y of vehicles, including mechanical
workshops and support staff, to effectivel y operate.
28
20. The banks in the past have extended various credit facilities to
the CC. The financial distress was caused due to a vehicle rental
tender that was awarded to the CC from STATS SA, which,
unbeknown to us at that stage, was awarded without STATS SA
following due process. The tender was eventuall y cancelled.
21. To be able to service the tender, the CC had to acquire additional
vehicles. and we had to employ additional staff members.
22. As a result of the cancellation of the tender. we suddenly had to
find additional customers to rent the vehicles to and had to
Increase our marketin g expenditure.
23. Because we sat with newl y acquired fleet that needed new rental
clients. the increased staff and operational costs caused
additional pressure on the cash flow of the business.
24. The CC is involved in legal proceedings with Standard Bank, as
alluded to in the summary prepared by the attorneys of record for
the CC, attached hereto, marked as annexure "C".
REASONABLE PROSPECT OF RESCUE:
25. Notwithstanding the above, I as the member of the CC believe
that there is a reasonable prospect of rescuing the business of
the CC, if action is taken immediatel y and if the CC commences
business rescue. If the CC is placed under supervision. we can
finalize the settlement proposal that was submitted to Standard
Bank in respect of their liabilit y.
26. Initiatives can be taken by the business rescue practitioner, when
duly appointed, to and/or all the following steps;
21.1 (sic) Imposing an immediate moratorium on all legal
proceedings in terms of Section 133 of the Act,
21.2 (sic) Negotiate a reasonable settlement with Standard
bank,
21.3 (sic) Curtail operation expenditure,
21.5 (sic) A restructurin g of the debt of the CC with all Its
creditors.
21.5 (sic) Engaging in discussions with various parties
regarding the provIs10n of post commencement
financin g for the cc.
(the underlining has been added by me)
73.2 As already stated in regard to the above there is no evidence at all
73.2 As already stated in regard to the above there is no evidence at all
sustaining or supporting that:
29
73.2.1
73.2.2
73.2.3
DSCM has "shed considerable costs" and recovered money from
any of its assets. On the contrary, it has lost a substantial portion
of its fleet, recovered no money therefrom and has lost its main
and substantial portion of its revenue;
it can effectively operate without the revenue it received from
Bolt. As stated above, DSCM is reliant on "operating capital,
availability of vehicles including mechanical workshops and
support staff to effectively operate". It appears to now have no
operating capital. It has certainly not provided any proof hereof.
it has not settled with Standard Bank which appears was an
essential requirement for a successful rescue.
73.3 Certain extracts from the founding affidavit to the first BRP's application
to place DSCM in liquidation (Annexure FA28 to Standard Bank's
founding affidavit)34 as follows:
23 The Applicant's assertion of a reasonable prospect to rescue the
First Respondent was based on the proiected return to creditors
if the First Respondent was to be immediately liquidated versus
the proiected dividend to creditors, shareholders, and relevant
stakeholders in the event that a business rescue plan is adopted
and substantially implemented.
24 Subsequent to the Applicant's appointment and the
commencement of the First Respondent's business rescue
proceedings, its biggest customer and source of income, Mv Next
Car (Pty) Ltd, to which it leased approximatelv 300 vehicles,
terminated its agreement with the First Respondent on 15 April
2026.
25 As a result of the above-mentioned termination and loss of its
main source of income, and its inabilitv to access anv of the funds
in its bank accounts or to Collect its debtors, the First
Respondent:
25. 1 Is unable to service any of its debts; and
25.2 Is unable pay salaries to its 22 emplovees.
34 002-263 to 280
30
26 The First Respondent is further unable to pay the monthly
insurance premium for its 333 vehicles resulting therein that the
First Respondent's insurance cover over all of its assets will lapse
at the end of April 2026. Should any of the First Respondent's
vehicles be damaged or stolen after the lapse of its insurance
cover, the First Respondent will not be financially able to repair
or replace such vehicles, to the obvious severe prejudice of the
financiers of those vehicles and to the First Respondent's general
body of creditors.
28 For the reasons set out above, the Applicant has determined that
there is no longer a reasonable prospect of rescuing the First
Respondent, and accordingly, as he is obliged to do by Section
141(2)(a)(ii) of the Act. now applies to this Honourable Court for
an order discontinuing the First Respondent's business rescue
proceedings· and placing it into liquidation.
29 This conclusion of the Applicant is based on legal- and financial
advice, taking into consideration, inter alia, the following factors:
29.1 The First Respondent has no access to its funds and
has lost its biggest customer and source of income
and cannot pay its employees to continue operating
the business of the First Respondent and cannot
insure and safeguard the assets of the First
Respondent and has not been able to secure new
work and income. Despite the protection afforded by
the moratorium and ongoing efforts to identify
suitable opportunities, no new work materialised. The
absence of income means the First Respondent
cannot sustain trading and cannot meet the
operational' commitments needed for a viable
continuation of business rescue.
30 In these circumstances, and considering the heightened risk
profile associated with vehicle theft and accidents in South Africa.
it is the Applicant's view that continuation under business rescue
would be contrary to the interests of creditors and the First
Respondent.
31 The First Respondent's inability to insure its assets presents an
Respondent.
31 The First Respondent's inability to insure its assets presents an
immediate and unacceptable exposure. Liquidation, though not
a desirable outcome. now represents the only mechanism
through which the assets can be placed under the control and
protection of the Master of the High Court and the liquidators.
who will assume responsibility for safeguarding and realising
them.
32 Based on the above I have determined that there is no longer a
reasonable prospect of the First Respondent being rescued. and
that the First Respondent must urgently be liquidated.
31
33 I respectfull y submit that it will be in the best interests of creditors
of the First Respondent for it to be urgently wound-u p and for the
provisions of chapter XIV of the 1973 Act to be available to a
liquidator and creditors in the winding-up of the First Respondent.
(the underlining is still my own)
7 4. There is no evidence in Kantilal's answering affidavit and annexures to gainsay
what is stated with regard to the first BRP's allegations that:
7 4.1 he has determined that DSCM is no longer able to be rescued;
7 4.2 it has no access to funds, having lost its biggest customer and source of
income, cannot pay its employees or continue operating the business,
cannot insure and safeguard assets and has not been able to secure
new work and income resulting in:
74.2.1
74.2.2
74.2.3
DSCM not being able to trade and meet operational commitments
needed for a viable continuation of its business rescue;
its continuation under business rescue would be contrary to the
interests of creditors and DSCM;
that it would be in the best interests of DSCM's creditors that it be
wound-up urgently.
75. All that Kantilal has proffered as evidence in substantiation of his allegations
that DSCM has a reasonable prospect are the following allegations in his
answering affidavit:
75.1
75.1.1
That the new business rescue practitioner, namely the second BRP,
has begun the following steps:
stabilising operations and engaging with remaining clients and
suppliers;
32
75.1.2
75.1.3
75.1.4
75.1.5
assessing all revenue streams including the rent to own portfolio,
workshop income and residual rental contracts;
investigating the validity, enforceability and scope of the 2014
cession;
exploring restructuring options including possible debt
compromise, asset optimisation and engagement with creditors;
the second BRP has established consistent and transparent
communication with DSCM and himself which in his words
"ensures that the company and its members are properly
informed, consulted and involved in the business rescue process,
thereby restoring confidence in the proceedings".
75.2 I repeat what I have stated in this regard above, namely that no facts, no
acceptable primary evidence has been provided to this court in
substantiation of these allegations. They are and remain hearsay
allegations, unsubstantiated by any primary facts or evidence and
rejected.
76. The term "reasonable prospect" has been considered by our courts. Eloff AJ in
Southern Palace Investments 265 (Pty) Ltd v Midnight Storm Investments 386
Limited35 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.
35 Southern Palace Investments 265 (Pty) Ltd v Midnight Storm Investments 386 Limited 2012 (2) SA423 wee -
paragraphs 21 to 23
33
77. Brand JA also stated in 0akdene Square Properties (Pty) Ltd and Others v
Farm Bothasfontein (Kyalami) (Pty) Ltd and others36 that the term "reasonable
prospect" does not demand proof on a balance of probabilities that rescue will
succeed, but neither is mere speculative optimism enough. At paragraphs 29
to 31 the Supreme Court of Appeals state 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.
78. There is clearly no factual basis for any of these allegations, there is no
evidence sustaining a reasonable possibility grounded in objectively
ascertainable facts. All there is, is hearsay speculation, generalised and
unsubstantiated allegations.
79. In terms of Section 147(1)(a)(i) a business rescue practitioner is obliged within
ten business days of his appointment to call a first meeting of creditors and
inform them, inter alia, whether he believes there is a reasonable prospect of
rescuing the company. Notwithstanding that the second BRP is the successor
of the first BRP I respectfully submit it is still his duty to convene such a
meeting and provide to Affected Parties his opinion on whether or not there is
a reasonable prospect of rescuing DSCM. At the very least, one would have
expected the second BRP to file an affidavit setting out or confirming what he
has done, what he is doing (as alleged by Kantilal) and expressing his view on
the reasonable prospects of rescuing DSCM. In the absence of such an affidavit
I can only conclude that there are no facts whatsoever evidencing that DSCM
has reasonable prospects of being rescued and thus that DSCM has no
prospect reasonable or otherwise of being rescued.
80. Finally and of importance in determining whether or not there is a reasonable
80. Finally and of importance in determining whether or not there is a reasonable
prospect of DSCM being rescued is Standard Bank's advices that it would not
36 Oakdene Square Properties (Pty) Ltd and Others v Farm Bothasfontein (Kya/ami) (Pty) Ltd and
others2013 (4) SA 539 (SCA); [2013] ZA SCA 68 at para 29
34
support or approve a business rescue plan in due course. For a business
rescue plan to be successfully adopted, it must be "supported by the holders of
more than 75% of creditors' voting interests that were voted37". This 75% hurdle
can never be achieved if Standard Bank votes against any DSCM business
rescue plan. This is profound. How can DSCM be successfully rescued if it can't
get its business rescue plan approved by 75% of creditors voting interest. I am
mindful of the provisions of Section 153(1 )(a)(ii) of the Companies Act which
entitles a practitioner to " ... apply to a court to set aside the result of the vote
by the holders of voting interests .... on the grounds that it was inappropriate".
This however does not affect my decision and for all the reasons advanced
above.
81. I am satisfied that a clear case for conversion has been made out. The first
BRP has confirmed categorically that DSCM has no reasonable prospect of
being rescued. No business rescue plan has been published and there is no
indication that one will be published. DSCM's main customer and main source
of revenue has gone. The second BRP has correctly abided the decision of
this court. There is no evidence supporting that DSCM has a reasonable
prospect of being rescued.
82. I accordingly find that:
82.1 DSCM is commercially insolvent;
82.2 DSCM has no reasonable prospects of being rescued;
82.3 Standard Bank is entitled to an order converting DSCM's business
rescue into a final liquidation.
37 Section 152(2)(a)
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COSTS
83. Initially Standard Bank sought penalty costs as against Kantilal. At the hearing
Standard Bank's counsel advised that they no longer persisted with such an
order and would be satisfied with an order that costs be in the costs of the
liquidation. Kantilal's counsel was of the same view.
I THUS MAKE THE FOLLOWING ORDERS:
1. That this application is urgent.
2. The business rescue proceedings of DSCM be converted into liquidation in terms
of Section 132(2)(a)(ii) of the Companies Act.
3. The counterclaim is dismissed.
4. DSCM be placed into final liquidation.
5. Costs of this application and the counter application be costs in the liquidation as
calculated on Scale C.
Date of hearing: 26 May 2026
Date of judgment: 27 May 2026
Date of reasons: 23 June 2026
Attorneys for the applicant: Martins Weir-Smith Inc.
Counsel for the applicant: H.A van der Merwe
Attorneys for the first and fourth respondent: RM Inc. Attorneys
Counsel for the first and fourth respondents: M. Luyt
36