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JUDGMENT
FOURIE AJ
INTRODUCTION:
[1] This application is an application for leave to appeal in terms of
Rule 49(1)(b) of the Uniform Rules of Court.
[2] The Applicant seeks leave to appeal to the Supreme Court of Appeal,
alternatively to the full Court of this Division, against the portion of the Judgment,
delivered by me on 30 April 2025, dealing with paragraphs 1 and 2 of the Orders
(but not paragraph 3).
[3] The Application for Leave to Appeal is opposed.
[4] Although phrased under Rule 49 of the Uniform Rules of Court, Section 17(1) of
the Superior Courts Act, 20 of 2013 , finds application , and the Applicant has
confined the Application for Leave to Appeal to Section 17(1)(a)(i) of the Superior
Courts Act.
[5] The argument raised by the Applicant is , accordingly, as I understand it, that
reasonable prospects of success exist for the matter to be ultimately overturned
on Appeal, rather than the existence of some or other compelling reason why the
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appeal ought to be heard under the auspices of Section 17(2) of the Superior
Courts Act.
[6] The Applicant has not, as is generally the norm, set out specific and numbered
grounds of appeal, and an evaluation of the Application for Leave to Appeal
seems to state rather in general terms the reasons why the Applicant is
dissatisfied with the Order that was initially granted. Although certain paragraphs
might resemble grounds of appeal, certain other paragraphs seem merely to
expand upon the grounds of appeal, and it needs to be stated that the Notice of
Application for Leave to Appeal as drawn by th e Applicant seems to have been
drawn as much with the grounds of appeal as with argument on why the grounds
of appeal ought to succeed.
[7] As such, I do not intend to repeat the 32 paragraphs and subparagraphs that
were stated by the Applicant in their Notice of Application for Leave to Appeal,
and I trust the record shall reflect them correctly.
GROUNDS OF APPEAL:
[8] Insofar as I am able to do so, I summarise the grounds of the Applicant’s appeal
under the following sections:
[8.1.] No leave of the Court was necessary in line with Section 133(1) of the
New Companies Act, 71 of 2008 and the Applicant ought to have
partaken, as a right , within the processes under the auspices of
Section 145(1)(b) of the Act.
[8.2.] In not declaring that the Applicant has a secured claim of R 8 000 000.00
(Eight million Rand) against Ebundu.
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[8.3.] In not converting the business rescue proceedings to liquidation
proceedings.
[9] As stated previously, many of the grounds of appeal are elaborated on in the
Notice of Application for Leave to Appeal , but, insofar as I am able to do so, I
trust the aforesaid sets out the main grounds on which the Applicant wishes to
rely.
APPLICABLE LEGAL PRINCIPLES:
[10] The formulation for the test to be applied in applications for leave to appeal has
been accepted and applied by our Courts in multiple judgments [1].
[11] In the matter of JACOBS[2] the full Court held as at paragraph 29 thereof that it
seems that Section 17(1) of the Act construed as a whole is a qualification of the
principles laid down in Sweni v Minister of Law and Order of the Republic of
South Africa [3] assessed in the context of subsequent gloss afforded in
decisions such as S v Western Areas Ltd [4] and Philan-Ma-Afrika v
Mailulu[5]. In these decisions it was held that what is of paramount importance
in deciding whether a judgment is appealable is the interest of justice.
[12] In the matter of Caratco (Pty) Ltd v Independent Advisory (Pty) Ltd [6] the
Court stated that:
“If the Court is unpersuaded of the prospects of success, it must still
enquire whether there is a compelling reason to entertain the appeal. A
compelling reason includes any important question of law or a discreet
issue of public importance that will have an effect on future disputes. But
here too, the merits remain vitally important and are often decisive.”
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[13] Post the amendment of the Act and the caselaw flowing thereafter, and for
purposes of the current Judgment, it is deserving to merely restate that the
position has significantly changed and it ought to be accepted that a general
prospect of success or the belief that some or other Court might for some or other
reason find differently than the Court a quo is not satisfactory for Leave to Appeal
to be granted. Courts are unfortunately flooded with matters, and to
unnecessarily proceed with matters with a view that a litigant might on a different
day encounter a different Judge that might feel different and hold a different view
on the case of a litigant is quite simply not enough. Leave to Appeal proceedings
exist to weed out patent errors that occur when Judgments are handed down and
to ensure that justice is ultimately done. Leave to Appeal ought not to be
regarded as merely for the taking, especially where the matter might at first
glance seem to be of a technical nature.
[14] It unfortunately occurs ever so often that litigants try to persuade the Court, when
an Application for Leave to Appeal is heard, that the technical nature of a matter
is deserving of a re-evaluation of the matter by a different Court, seemingly in an
attempt to have the Judge who dealt with the matter initially doubt his Order, and
in the hopes of phrasing their argument before a different Judge or Judges
differently to find ultimate favour with the m or simply to delay the inevitable
finalisation of the matter.
[15] This Court is of the belief that Leave to Appeal ought to be reserved for when the
Court is, with a degree of certainty, convinced that a different Court will come to
a different conclusion in respect of the legal questions that have been posed by
a litigant. Although I accept the bar ought not to be set unreasonably high , an
order of this nature is not simply designed to cater for speculation.
order of this nature is not simply designed to cater for speculation.
[16] The aforesaid is crucial, specifically under circumstances where a litigant does
not rely on the second portion of the Act, being the portion dealing with some or
other compelling reason why Leave to Appeal ought to be granted. Under certain
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circumstances, it might very well be important for an abstract legal principle or
matters dealing with the general public interest to be tested on appeal in order
for the legal position to be properly tested and captured.
[17] In the current matter, however, as stated previously, the Court is only requested
to evaluate the matter under the auspice that a different Court will come to a
different conclusion.
DISCUSSION ON GROUNDS FOR LEAVE TO APPEAL:
[18] At the hearing of the matter, the Court found it strange that, suddenly in the
Application for Leave to Appeal, it was the case for the Applicant that it is the
Court that acted in error when denying consent in terms of Section 133(1)(b) of
the Companies Act, 71 of 2008 and the Applicant now suddenly states that such
consent was not necessary for the matter to be brought to Court. This line of
reasoning stands directly opposite to the argument advanced by the Applicant
when the matter was initially argued. In the Court a quo, the Applicant at length
relied and tried to persuade the Court on the applicability of Section 133(1)(b) of
the stated Act, as well as to attempt to convince the Court why the relief in respect
of the same ought to be granted.
[19] This Court need not take it any further than to evaluate the Applicant’s own case
in the Court a quo and the relevant provision of the Act.
[20] Section 133(1)(b) of the Companies Act, 71 of 2008 states as follows:
“133. (1) During business rescue proceedings, no legal proceeding,
including enforcement action, against the company, or in relation to any
property belonging to the company, or lawfully in its possession, may be
commenced or proceeded with in any forum, except—
“(a)………
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(b) with the leave of the court and in accordance with any terms the court
considers suitable;
(c) ……….
(d) ………
(e) ………”
[21] In their argument in respect of Leave to Appeal, the Applicant wishes to request
the Court seemingly to have no regard to the relief that they sought in the initial
application and the long line of previous matters dealing with similar questions
such as th e conversion of a Company in business rescue to the liquidation
thereof, and counsel appearing on behalf of the Applicant indicated that the
Applicant’s own reasoning when the matter was initially heard was seemingly
incorrect and the correct position ough t to have been that no relief in terms of
Section 133(1) was necessary.
[22] When the Applicant initially brought the application, it was the Applicant who set
the playing field and the case that the respective Respondents needed to
answer. It is the Applicant that set the threshold the Applicant needed to meet ,
and, seemingly not reaching such a threshold in the Court a quo now during the
appeal processes, seems to attempt to reason away the applicability of Section
133 of the Companies Act, 71 of 2008 in order to improve the Applicant’s position.
If the threshold imposed by Sect ion 133(1) of the Act is not taken into account,
obviously, the case the Applicant needs to present in order to be ultimately
successful becomes easier.
[23] This Court is not persuaded that Section 133(1) of the Companies Act, 71 of
2008, does not find application to the matter at hand, having regard to all the
relief the Applicant ultimately sought. Similarly, this was not the case for the
Applicant when the matter was proceeded with.
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[24] The question accordingly is whether the Court was incorrect , and a different
Court will come to a different conclusion, having been faced with the matter that
was presented to the Court initially. This Court is not persuaded on this point
that it would.
[25] On the question of whether or not the Applicant was regarded as a creditor or
not, and whether the manner in which the Applicant was dealt with by the
business rescue practitioner, ought to lead to the relief the Application sought
when the matter was hear d in the Court a quo, the argument presented by the
Applicant during the application for leave to appeal again differed from the
argument that was presented when the matter was heard in the Court a quo.
Simply put, the argument advanced by the Applicant’s legal representatives in
the Court a quo and the argument advanced in the Application for Leave to
Appeal were not the same.
[26] The statements, argument, and concessions made by the Applicant’s legal
representatives when the matter was initially heard, in the Court a quo represent
a factual position which the Applicant requested on that day the Court to make a
finding on. Once the Court made a finding and ordered a Judgment based on
what the Court was presented with, it cannot be open to the Applicant to then
refine, readjust, and restate their case or even rephrase it in the hope that the
rephrasing of their argument affords them a better opportunity before a different
forum.
[27] To retry and reargue a matter through different arguments, different nuances,
and different statements in different forums would lead to an absolute absurdity.
When the matter was initially heard, the Applicant could have and should have
raised all the ar guments that it wished the Court to take into regard , in order to
either find for or against them. Applications for Leave to Appeal are not designed
to afford any applicant the proverbial second bite of the apple.
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[28] In as far as it relates to the Applicant’s claim, the fact that the Applicant was
regarded as a creditor, which is evident from Annexure “WJ9” to the Applicant’s
own application, the fact that the business rescue plan was adopted under
circumstances where the Applicant had the right to participate in the proceedings
and was thereafter bound to act in respect of the business rescue plan, which
the Applicant in most circumstances failed to do, and irrespective of the argument
raised during the Applicant’s Application for Leave to Appeal fortifies the position
that a different Court would not find differently were the facts presented to them.
[29] Insofar as it relates to the conversion of the company from business rescue to
being finally wound -up and in the Court a quo the Applicant conceded that
statutory compliance had not been met. This Court reiterates the position as per
the Judgment in the Court a quo when it was stated that:
“The Court will not merely as a “fallback position” grant a provisional
winding up order because the Applicant has failed to have its house in
order when the application was heard initially. When a Court makes an
order that affects the status of a compan y it affects the rights of all the
affected persons of such a company also. In the current application, it
would have had enormous ramifications on all affected parties if the Court
extended its discretion in favour of the Applicant to uplift the moratorium,
to recognise the Applicant’s claim and to convert the bus iness rescue
process into that of liquidation. To do so under circumstances where the
Applicant’s house was not in order to ensure compliance with the Act
would simply not make any sense. If the Applicant were to be afforded the
right of a provisional win ding up order to allow the Applicant to get its
house in order in respect of statutory compliance when the non -
compliance was neither addressed or applied to be condoned, it would
compliance was neither addressed or applied to be condoned, it would
not be proper. The ordering of a provisional order would not only have
delayed the finalisation of the matter but would have adversely affected
the rights of all the affected parties.”
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“I hold no doubt that a Court may under certain circumstances condone
non-compliance with the statutory provision of Section 346(4A)(b) when
the facts of the matter deserve such non -compliance to be condoned,
under which circumstances it might then be appro priate for the Court to
safeguard the interest of an Applicant by ordering the provisional winding
up of a company whilst affording protection to affected parties ordering
compliance with the Act before a final winding up order would be issued.
This is h owever to be regarded as the exception to the rule and not the
standard to be applied. When parties, such as in the current mater had
more than a year to ensure that their papers were properly before Court
and similarly had the same amount of time to ensure compliance with each
and every aspect which would have been necessary to obtain the relief
they seek, the Court cannot be expected to grant the application as a
provisional order when their non -compliance is pointed out by the Court
at the hearing of the matter.”
[30] The application was not brought as an urgent application; the application was
brought over a prolonged period of time, and the Applicant had every opportunity
to comply with the statutory obligations imposed on the Applicant. The Applicant
failed to comply with the statutory obligations, conceded that they failed to comply
with their statutory obligations, and, seemingly as an afterthought, requested the
“fallback position” for an interim liquidation to be granted.
[31] I am not persuaded that a different Court will come to a different conclusion on
this point, nor, having regard to the facts of the matter, that it is justified that the
Court comes to the aid of the Applicant or that it would be in the best interest of
the company for the Court to do so.
[32] Insofar as any of the other grounds for leave to appeal have not been expressly
set out in this judgment, same have been evaluated under the headings that the
set out in this judgment, same have been evaluated under the headings that the
Court has dealt with in this Judgment and for all the same reasons as the Court
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Third and
Fourth Respondents: BARNARD INC ATTORNEYS
C/O VZLR ATTORNEYS
Judgment reserved on: 18 July 2025
Date of delivery: 29 September 2025
[1.] Four Wheel Drive Assessory Distributors CC v Rethan N.O. 2019 (3) SA 451
(SCA) at para 34; Pretoria Society of Advocates & Others v Nthai 2020 (1) 267
(LP) at para 5; Vrystaat Munisipale Pensioen Fonds v The Pension Funds
Adjudicator 2019 JDR 0211 (FB) at para 4; Visagie N.O. v MTN Group Limited
2013 JDR 2853 (GSJ) at paragraph 3.
[2.] Jacobs v Beacon Island Shareblock unreported (WCC Case Number A258/2018
dated 6 February 2019
[3.] Sweni v Minister of Law & Order of the Republic of South Africa 1993 (1) SA
523 (A)
[4.] S v Western Area Ltd 2005 (5) SA 214 (SAC)
[5.] Philan-Ma-Afrika v Mailulu 2010 (2) SA 573 (SCA)
[6.] Caratco (Pty) Ltd v Independent Advisory (Pty) Ltd 2020 (5) SA 35 (SCA) at
paragraph 2