Mabote and Others v Van Der Merwe NO and Another (2015/40324) [2016] ZAGPJHC 185 (8 July 2016)

Mabote and Others v Van Der Merwe NO and Another (2015/40324) [2016] ZAGPJHC 185 (8 July 2016)

The court held that the applicants were justified in seeking leave to institute proceedings against ABIL, EF, and EHL due to uncertainty regarding which entity was liable under the PARIS scheme. The applicants established a prima facie case against one or more of the entities, as required for leave under section 133(1)(b) of the Companies Act. The court rejected the respondents' argument that a higher standard of proof was necessary, confirming that a prima facie case suffices at this stage. The moratorium on proceedings under section 133(1) no longer applied because ABIL was no longer under business rescue, rendering the relief sought moot. The only live issue was costs, and the court...

Citation
[2016] ZAGPJHC 185
Parties
Applicant: Sedick Arendse; Applicant: Geoffrey Obed Mabote; Applicant: Zafar Ahmed Mahomed; Applicant: Charles Hubert Mylburgh; Applicant: Robert Alexander Dodds; Applicant: Ian Child; Applicant: Linda Sithole; Applicant: Susan Mawer; Applicant: Johan Liebenberg; Applicant: Andreas Avrabos; Applicant: Robert Bruce Griffith Sinclair; Applicant: Armando Flores Fernandes Moca; Applicant: Maureen Isobel Beeby Hughes; Applicant: Marc De Villiers; Applicant: Shaun Prithivirajh; Respondent: Liebenberg Dawid Ryk Van Der Merwe NO; Respondent: John Francis Evans NO
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
8 July 2016
Case Number
2015/40324
Procedural Posture
Urgent Application / Application for Leave to Commence Legal Proceedings Against a Company Under Business Rescue
Outcome
Application for leave rendered moot due to termination of business rescue; costs awarded against applicants.
Judges
Boruchowitz
Legal Topics
Business Rescue Moratorium, Leave to Sue Company in Rescue, Joinder of Defendants, Prima Facie Case Requirement, Contractual Interpretation
Commercial and Corporate Civil Procedure Business Rescue Moratorium Leave to Sue Company in Rescue Joinder of Defendants Prima Facie Case Requirement Contractual Interpretation

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Parties

Sedick Arendse

Applicant

Geoffrey Obed Mabote

Applicant

Zafar Ahmed Mahomed

Applicant

Charles Hubert Mylburgh

Applicant

Robert Alexander Dodds

Applicant

Ian Child

Applicant

Linda Sithole

Applicant

Susan Mawer

Applicant

Johan Liebenberg

Applicant

Andreas Avrabos

Applicant

Robert Bruce Griffith Sinclair

Applicant

Armando Flores Fernandes Moca

Applicant

Maureen Isobel Beeby Hughes

Applicant

Marc De Villiers

Applicant

Shaun Prithivirajh

Applicant

Liebenberg Dawid Ryk Van Der Merwe NO

Respondent

John Francis Evans NO

Respondent

Procedural Posture

Urgent Application / Application for Leave to Commence Legal Proceedings Against a Company Under Business Rescue

Legal Issues

  1. 1 Whether the applicants have established a prima facie case for leave to institute legal proceedings against African Bank Investments Limited (ABIL) under section 133(1)(b) of the Companies Act.
  2. 2 Whether the applicants are entitled to join ABIL as a co-defendant given uncertainty as to which entity is liable under the PARIS scheme.
  3. 3 What is the appropriate test for granting leave under section 133(1)(b) of the Companies Act.

Ratio Decidendi

The court held that the applicants were justified in seeking leave to institute proceedings against ABIL, EF, and EHL due to uncertainty regarding which entity was liable under the PARIS scheme. The applicants established a prima facie case against one or more of the entities, as required for leave under section 133(1)(b) of the Companies Act. The court rejected the respondents' argument that a higher standard of proof was necessary, confirming that a prima facie case suffices at this stage. The moratorium on proceedings under section 133(1) no longer applied because ABIL was no longer under business rescue, rendering the relief sought moot. The only live issue was costs, and the court...

Court Disposition

Application for leave rendered moot due to termination of business rescue; costs awarded against applicants.

Orders

  • The costs of the application are to be paid by the applicants jointly and severally, the one paying, the others to be absolved.
  • Such costs are to include the costs incurred by the respondents in opposing the application.