Mouton v Park 2000 Development 11 (Pty) Ltd and Others; In Re Stewart NO v Mouton and Others (1070/19; 8488/16; 2535/19) [2019] ZAWCHC 90; [2019] 4 All SA 133 (WCC) ; 2019 (6) SA 105 (WCC) (23 July 2019)

Mouton v Park 2000 Development 11 (Pty) Ltd and Others; In Re Stewart NO v Mouton and Others (1070/19; 8488/16; 2535/19) [2019] ZAWCHC 90; [2019] 4 All SA 133 (WCC) ; 2019 (6) SA 105 (WCC) (23 July 2019)

The court found that the liquidation proceedings against Park 2000 were 'initiated' when the resolution to launch them was adopted, not when the liquidation application was filed at court. The business rescue resolution was adopted after the liquidation resolution and thus in breach of section 129(2)(a) of the Companies Act 71 of 2008. Furthermore, the business rescue resolution was not passed by the requisite majority of directors, rendering it a nullity. The court rejected the respondents' version as unreliable and contrived, noting contradictory affidavits and lack of credibility. The business rescue was found to be a deliberate stratagem to frustrate enforcement of a judgment, not a...

Citation
[2019] ZAWCHC 90
Parties
Applicant: Johan Mouton; Respondent: Park 2000 Development 11 (Pty) Ltd; Respondent: Companies and Intellectual Property Commission; Respondent: Smoken Consulting (Pty) Ltd; Respondent: Kenneth Logan Stewart N.O.; Applicant: Kenneth Logan Stewart N.O.; Respondent: Johan Mouton; Respondent: The Sheriff of the High Court, Riversdale; Respondent: WH Van Schalkwyk Vervoer CC; Respondent: Christian Ernst Olivier; Respondent: The Registrar of Deeds, Cape Town; Applicant: Petrus Jurgens Hanekom; Applicant: Willem Adriaan Hanekom
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
23 July 2019
Case Number
1070/19; 8488/16; 2535/19
Procedural Posture
Review Application / Judgment After Hearing of Three Related Applications: Main Application for Review and Setting Aside of Business Rescue Resolution; Two Interim Interdict Applications.
Outcome
Application to set aside the business rescue resolution granted; business rescue proceedings terminated; sales in execution of properties confirmed; costs awarded against respondents.
Judges
M Sher
Legal Topics
Business Rescue, Companies Act 71 of 2008, Resolution Validity, Liquidation Initiation, Director Authority
Commercial and Corporate Civil Procedure Business Rescue Companies Act 71 of 2008 Resolution Validity Liquidation Initiation Director Authority

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Parties

Johan Mouton

Applicant

Park 2000 Development 11 (Pty) Ltd

Respondent

Companies and Intellectual Property Commission

Respondent

Smoken Consulting (Pty) Ltd

Respondent

Kenneth Logan Stewart N.O.

Respondent

Kenneth Logan Stewart N.O.

Applicant

Johan Mouton

Respondent

The Sheriff of the High Court, Riversdale

Respondent

WH Van Schalkwyk Vervoer CC

Respondent

Christian Ernst Olivier

Respondent

The Registrar of Deeds, Cape Town

Respondent

Petrus Jurgens Hanekom

Applicant

Willem Adriaan Hanekom

Applicant

Procedural Posture

Review Application / Judgment After Hearing of Three Related Applications: Main Application for Review and Setting Aside of Business Rescue Resolution; Two Interim Interdict Applications.

Legal Issues

  1. 1 Whether the business rescue proceedings were defective because they were launched after liquidation proceedings had been initiated against Park 2000.
  2. 2 Whether the resolution to commence business rescue was null and void because it was not taken by the requisite majority of directors.
  3. 3 What is the correct interpretation of 'initiated' in section 129(2)(a) of the Companies Act 71 of 2008.

Ratio Decidendi

The court found that the liquidation proceedings against Park 2000 were 'initiated' when the resolution to launch them was adopted, not when the liquidation application was filed at court. The business rescue resolution was adopted after the liquidation resolution and thus in breach of section 129(2)(a) of the Companies Act 71 of 2008. Furthermore, the business rescue resolution was not passed by the requisite majority of directors, rendering it a nullity. The court rejected the respondents' version as unreliable and contrived, noting contradictory affidavits and lack of credibility. The business rescue was found to be a deliberate stratagem to frustrate enforcement of a judgment, not a...

Court Disposition

Application to set aside the business rescue resolution granted; business rescue proceedings terminated; sales in execution of properties confirmed; costs awarded against respondents.

Orders

  • The resolution adopted to place Park 2000 Development 11 (Pty) Ltd under business rescue is declared invalid and set aside; the company is discharged from business rescue and the appointment of the business rescue practitioner is discharged.
  • The sales in execution on 12 December 2018 of Erf 541, Riversdale and Erf 4513, Stilbaai West are declared valid and enforceable.