Griessel and Another v Lizemore and Others (2015/24751) [2015] ZAGPJHC 189; [2015] 4 All SA 433 (GJ); 2016 (6) SA 236 (GJ) (31 August 2015)

Griessel and Another v Lizemore and Others (2015/24751) [2015] ZAGPJHC 189; [2015] 4 All SA 433 (GJ); 2016 (6) SA 236 (GJ) (31 August 2015)

The court found that Lizemore acted in bad faith by passing the business rescue resolution without notice to the majority shareholders and contrary to their wishes. He failed to disclose his refusal to appoint Quintin as director and acted for personal gain. The practitioner was found to be conflicted, having relied solely on Lizemore's version and failed to engage creditors or shareholders independently. The procedural requirements of section 129(4) were not met, and the Commission lacked authority to grant extensions under that subsection. The company was not shown to be financially distressed, as funding was available and suitors were interested. The cumulative effect of Lizemore's...

Citation
[2015] ZAGPJHC 189
Parties
Applicant: Quintin Jaco Griessel; Applicant: Ronald Frank Zeman; Respondent: Edward Henry Lizemore; Respondent: Matheus Johannes Schlechter; Respondent: Mining and Slurry Technologies (Pty) Ltd; Respondent: The Companies and Intellectual Property Commission
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
31 August 2015
Case Number
2015/24751
Procedural Posture
Urgent Application / Final Judgment and Postea Leave to Appeal
Outcome
Application granted. The business rescue resolution is set aside; applicants appointed as directors; return of company property ordered; costs awarded against first and second respondents personally.
Judges
Spilg
Legal Topics
Business Rescue, Companies Act Section 129, Director Fiduciary Duties, Conflict of Interest, Just and Equitable Relief, Return of Company Property
Commercial and Corporate Civil Procedure Business Rescue Companies Act Section 129 Director Fiduciary Duties Conflict of Interest Just and Equitable Relief Return of Company Property

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Parties

Quintin Jaco Griessel

Applicant

Ronald Frank Zeman

Applicant

Edward Henry Lizemore

Respondent

Matheus Johannes Schlechter

Respondent

Mining and Slurry Technologies (Pty) Ltd

Respondent

The Companies and Intellectual Property Commission

Respondent

Procedural Posture

Urgent Application / Final Judgment and Postea Leave to Appeal

Legal Issues

  1. 1 Whether the resolution to place the company under business rescue was valid and in good faith.
  2. 2 Whether the requirements of section 129(4) and section 130 of the Companies Act were complied with.
  3. 3 Whether it is just and equitable to set aside the business rescue resolution.

Ratio Decidendi

The court found that Lizemore acted in bad faith by passing the business rescue resolution without notice to the majority shareholders and contrary to their wishes. He failed to disclose his refusal to appoint Quintin as director and acted for personal gain. The practitioner was found to be conflicted, having relied solely on Lizemore's version and failed to engage creditors or shareholders independently. The procedural requirements of section 129(4) were not met, and the Commission lacked authority to grant extensions under that subsection. The company was not shown to be financially distressed, as funding was available and suitors were interested. The cumulative effect of Lizemore's...

Court Disposition

Application granted. The business rescue resolution is set aside; applicants appointed as directors; return of company property ordered; costs awarded against first and second respondents personally.

Orders

  • It is declared that the resolution to begin business rescue proceedings and place the company under supervision has lapsed and is a nullity.
  • The business rescue resolution is set aside on grounds of non-compliance and it being just and equitable; business rescue proceedings are ended.