Murgatroyd v Van Den Heerver N.O. and Others (20456/2014) [2014] ZAGPJHC 142; [2014] 4 All SA 89 (GJ); 2015 (2) SA 514 (GJ) (29 July 2014)

Murgatroyd v Van Den Heerver N.O. and Others (20456/2014) [2014] ZAGPJHC 142; [2014] 4 All SA 89 (GJ); 2015 (2) SA 514 (GJ) (29 July 2014)

The court held that the business rescue practitioner is entitled to reimbursement for expenses and disbursements incurred during business rescue proceedings, provided they are reasonably necessary to carry out his functions and facilitate the conduct of the proceedings. The engagement of external professionals such as Nimble Risk Services and Accountants at Law was justified by the dysfunctional management and unreliable internal data at Sanyati, and the magnitude and complexity of the rescue process. The court rejected the liquidators’ argument that the practitioner could not delegate functions to outside professionals, finding that the Companies Act and regulations do not prohibit such...

Citation
[2014] ZAGPJHC 142
Parties
Applicant: Trevor John Murgatroyd; Respondent: Theodor Wilhelm van den Heever N.O.; Respondent: Kgashane Christopher Monyela N.O.; Respondent: Nano Abram Matlala N.O.; Respondent: Nomvuyo Yvonne Seriti N.O.; Respondent: Segopotje Sheila Mphahlele N.O.; Respondent: Nimble Risk Services, a division of Norman Bissett & Associates Group (Pty) Ltd; Respondent: Accountants at Law (Pty) Ltd; Respondent: Rudolph, Bernstein & Associates
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
29 July 2014
Case Number
20456/2014
Procedural Posture
Urgent Application / Application for Declaratory Relief Regarding Entitlement to Reimbursement of Business Rescue Expenses.
Outcome
Application granted. The applicant is entitled to full recovery of remuneration and expenses incurred during business rescue proceedings, with costs awarded against the first to fifth respondents.
Judges
P.A. Meyer
Legal Topics
Business Rescue Proceedings, Companies Act 71 of 2008, Remuneration of Business Rescue Practitioner, Preferential Claims, Delegation of Functions
Commercial and Corporate Civil Procedure Business Rescue Proceedings Companies Act 71 of 2008 Remuneration of Business Rescue Practitioner Preferential Claims Delegation of Functions

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Parties

Trevor John Murgatroyd

Applicant

Theodor Wilhelm van den Heever N.O.

Respondent

Kgashane Christopher Monyela N.O.

Respondent

Nano Abram Matlala N.O.

Respondent

Nomvuyo Yvonne Seriti N.O.

Respondent

Segopotje Sheila Mphahlele N.O.

Respondent

Nimble Risk Services, a division of Norman Bissett & Associates Group (Pty) Ltd

Respondent

Accountants at Law (Pty) Ltd

Respondent

Rudolph, Bernstein & Associates

Respondent

Procedural Posture

Urgent Application / Application for Declaratory Relief Regarding Entitlement to Reimbursement of Business Rescue Expenses.

Legal Issues

  1. 1 Is a business rescue practitioner entitled to reimbursement for expenses and disbursements incurred during business rescue proceedings?
  2. 2 Were the expenses incurred by the practitioner reasonably necessary to carry out his functions and facilitate the conduct of the company's business rescue proceedings as contemplated in section 143(1), (6) and regulation 128(3) of the Companies Act 71 of 2008?
  3. 3 Does the practitioner have the authority to delegate functions to outside professionals and recover those costs as expenses?

Ratio Decidendi

The court held that the business rescue practitioner is entitled to reimbursement for expenses and disbursements incurred during business rescue proceedings, provided they are reasonably necessary to carry out his functions and facilitate the conduct of the proceedings. The engagement of external professionals such as Nimble Risk Services and Accountants at Law was justified by the dysfunctional management and unreliable internal data at Sanyati, and the magnitude and complexity of the rescue process. The court rejected the liquidators’ argument that the practitioner could not delegate functions to outside professionals, finding that the Companies Act and regulations do not prohibit such...

Court Disposition

Application granted. The applicant is entitled to full recovery of remuneration and expenses incurred during business rescue proceedings, with costs awarded against the first to fifth respondents.

Orders

  • The applicant is declared entitled to full recovery from the estate of Sanyati Civil Engineering and Construction (Pty) Ltd (in liquidation), in priority before all other secured and unsecured creditors, of moneys owing for services rendered as business rescue practitioner.
  • The applicant is entitled to recover moneys owing to Nimble Risk Services and Accountants at Law for support and advisory services rendered during the business rescue period, excluding expenses incurred after 4 July 2012 relating to the business rescue plan.