De Jager NO and Others v Zephan (Pty) Limited and Others (35991/2016) [2019] ZAGPPHC 570 (19 November 2019)

De Jager NO and Others v Zephan (Pty) Limited and Others (35991/2016) [2019] ZAGPPHC 570 (19 November 2019)

The court found that neither Pollastrini nor Cohen demonstrated a direct and substantial legal interest in the subject matter of the litigation sufficient to warrant intervention under Rule 12. Pollastrini's interest was found to be merely financial, not legal, and his reliance on the scheme of arrangement was based on a prima facie unlawful and invalid agreement, as the business rescue proceedings had not been terminated and the scheme was not validly entered into. The non-variation clause in the buy-back agreement precluded any alteration except by written agreement and special resolution, which had not occurred. Cohen, as receiver under the scheme of arrangement, did not possess locus...

Citation
[2019] ZAGPPHC 570
Parties
Applicant: Derek Pedoe Cohen NO; Applicant: Gildo Robert Pollastrini; Plaintiff: Carel Pieter De Jager NO; Plaintiff: Pieter Barend Swart NO; Plaintiff: Jacobus Theodorus Breedt; Plaintiff: Johannes Jacobus Erasmus NO; Plaintiff: Gert Frederick Sanders NO; Plaintiff: Johannes Arnoldus Nel NO; Defendant: Zephan (Pty) Limited; Defendant: Nicolas Georgiou NO; Defendant: Maureen Lynette Georgiou NO; Defendant: Joe Chemaly NO; Defendant: N Georgiou; Defendant: Highveld Syndication NO; Defendant: 22 Limited; Defendant: P/C Syndication (Pty) Limited
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
19 November 2019
Case Number
35991/2016
Procedural Posture
Urgent Application / Application for Leave to Intervene in Main Proceedings Seeking Specific Performance and Payment Under Buy Back Agreement.
Outcome
Both applications for leave to intervene are dismissed with costs.
Judges
Strijdom
Legal Topics
Intervention Under Rule 12, Specific Performance, Business Rescue, Scheme of Arrangement, Novation, Non Variation Clause
Civil Procedure Commercial and Corporate Intervention Under Rule 12 Specific Performance Business Rescue Scheme of Arrangement Novation Non Variation Clause

Case Brief

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Parties

Derek Pedoe Cohen NO

Applicant

Gildo Robert Pollastrini

Applicant

Carel Pieter De Jager NO

Plaintiff

Pieter Barend Swart NO

Plaintiff

Jacobus Theodorus Breedt

Plaintiff

Johannes Jacobus Erasmus NO

Plaintiff

Gert Frederick Sanders NO

Plaintiff

Johannes Arnoldus Nel NO

Plaintiff

Zephan (Pty) Limited

Defendant

Nicolas Georgiou NO

Defendant

Maureen Lynette Georgiou NO

Defendant

Joe Chemaly NO

Defendant

N Georgiou

Defendant

Highveld Syndication NO

Defendant

22 Limited

Defendant

P/C Syndication (Pty) Limited

Defendant

Procedural Posture

Urgent Application / Application for Leave to Intervene in Main Proceedings Seeking Specific Performance and Payment Under Buy Back Agreement.

Legal Issues

  1. 1 Whether the applicants have locus standi and a direct and substantial interest to intervene in the main proceedings.
  2. 2 Whether the scheme of arrangement or business rescue proceedings novate or affect the enforceability of the buy-back agreement.
  3. 3 Whether the non-variation clause in the buy-back agreement precludes alteration by the scheme of arrangement or business rescue plan.

Ratio Decidendi

The court found that neither Pollastrini nor Cohen demonstrated a direct and substantial legal interest in the subject matter of the litigation sufficient to warrant intervention under Rule 12. Pollastrini's interest was found to be merely financial, not legal, and his reliance on the scheme of arrangement was based on a prima facie unlawful and invalid agreement, as the business rescue proceedings had not been terminated and the scheme was not validly entered into. The non-variation clause in the buy-back agreement precluded any alteration except by written agreement and special resolution, which had not occurred. Cohen, as receiver under the scheme of arrangement, did not possess locus...

Court Disposition

Both applications for leave to intervene are dismissed with costs.

Orders

  • The application of Pollastrini to intervene is dismissed with costs.
  • The application of Cohen to intervene is dismissed with costs.