Kritzinger and Another v Standard Bank of South Africa (3034/2013) [2013] ZAFSHC 215 (19 September 2013)

Kritzinger and Another v Standard Bank of South Africa (3034/2013) [2013] ZAFSHC 215 (19 September 2013)

The court found that the respondent bank was contractually entitled to suspend and withdraw the overdraft facilities without notice upon material deterioration in the applicant company's financial position, as expressly provided in the overdraft agreement. The voluntary commencement of business rescue proceedings by the company constituted such material deterioration and default. The statutory moratorium under section 133 of the Companies Act did not preclude the bank from exercising its contractual rights, as these actions did not amount to enforcement proceedings against the company. The bank, as a secured creditor by virtue of cession of book debts and other collaterals, retained its...

Citation
[2013] ZAFSHC 215
Parties
Applicant: Jacobus Elisa Kritzinger; Applicant: Imesco (Pty) Ltd; Respondent: Standard Bank of South Africa
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
19 September 2013
Case Number
3034/2013
Procedural Posture
Urgent Application / Final Determination of Urgent Application for Interdictory Relief
Outcome
Application dismissed with costs.
Judges
Rampai
Legal Topics
Business Rescue, Overdraft Facility, Cession of Book Debts, Contractual Default, Interdict, Set Off
Commercial and Corporate Banking and Finance Civil Procedure Business Rescue Overdraft Facility Cession of Book Debts Contractual Default Interdict +1 more

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Parties

Jacobus Elisa Kritzinger

Applicant

Imesco (Pty) Ltd

Applicant

Standard Bank of South Africa

Respondent

Procedural Posture

Urgent Application / Final Determination of Urgent Application for Interdictory Relief

Legal Issues

  1. 1 Whether the respondent bank was contractually entitled to suspend or withdraw overdraft facilities without notice due to material deterioration in the applicant company's financial position.
  2. 2 Whether the statutory moratorium under section 133 of the Companies Act precluded the bank from enforcing its contractual rights during business rescue proceedings.
  3. 3 Whether the applicants were entitled to compel the bank to provide post-commencement finance under section 135 of the Companies Act.

Ratio Decidendi

The court found that the respondent bank was contractually entitled to suspend and withdraw the overdraft facilities without notice upon material deterioration in the applicant company's financial position, as expressly provided in the overdraft agreement. The voluntary commencement of business rescue proceedings by the company constituted such material deterioration and default. The statutory moratorium under section 133 of the Companies Act did not preclude the bank from exercising its contractual rights, as these actions did not amount to enforcement proceedings against the company. The bank, as a secured creditor by virtue of cession of book debts and other collaterals, retained its...

Court Disposition

Application dismissed with costs.

Orders

  • The application is dismissed with costs.
  • No interdictory relief is granted to the applicants.