Murray N.O. and Another v Firstrand Bank Ltd t/a Wesbank (20104/2014) [2015] ZASCA 39; 2015 (3) SA 438 (SCA) (26 March 2015)

Murray N.O. and Another v Firstrand Bank Ltd t/a Wesbank (20104/2014) [2015] ZASCA 39; 2015 (3) SA 438 (SCA) (26 March 2015)

The Supreme Court of Appeal held that the cancellation of the Master Instalment Sale Agreement by Wesbank during business rescue proceedings did not constitute 'enforcement action' as contemplated by section 133(1) of the Companies Act 71 of 2008. The court reasoned that 'enforcement action' refers to the enforcement of obligations through legal proceedings in a forum, not to unilateral acts of cancellation. The court found that the liquidators' attempt to rely on section 134(1)(c) at the appeal stage was procedurally improper, as it was not raised in the pleadings before the court a quo and would prejudice Wesbank. The court further held that the statutory moratorium under section 133(1)...

Citation
[2015] ZASCA 39
Parties
Appellant: Cloete Murray NO; Appellant: Mabutho Louis Mhlongo NO; Respondent: Firstrand Bank Ltd t/a Wesbank
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
26 March 2015
Case Number
20104/2014
Procedural Posture
Civil Appeal / Appeal From North Gauteng High Court, Pretoria
Outcome
Appeal dismissed with costs, including the costs of two counsel.
Judges
Navsa, Ponnan, Zondi, Schoeman, Fourie
Legal Topics
Business Rescue, Contract Cancellation, Companies Act 71 of 2008, Enforcement Action, Creditor Rights
Commercial and Corporate Business Rescue Contract Cancellation Companies Act 71 of 2008 Enforcement Action Creditor Rights

Case Brief

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Parties

Cloete Murray NO

Appellant

Mabutho Louis Mhlongo NO

Appellant

Firstrand Bank Ltd t/a Wesbank

Respondent

Procedural Posture

Civil Appeal / Appeal From North Gauteng High Court, Pretoria

Legal Issues

  1. 1 Whether the cancellation of a contract by a creditor during business rescue proceedings constitutes 'enforcement action' under section 133(1) of the Companies Act 71 of 2008.
  2. 2 Whether such cancellation is lawful without the consent of the business rescue practitioner or leave of the court.
  3. 3 Whether the liquidators can rely on section 134(1)(c) of the Companies Act at appeal stage.

Ratio Decidendi

The Supreme Court of Appeal held that the cancellation of the Master Instalment Sale Agreement by Wesbank during business rescue proceedings did not constitute 'enforcement action' as contemplated by section 133(1) of the Companies Act 71 of 2008. The court reasoned that 'enforcement action' refers to the enforcement of obligations through legal proceedings in a forum, not to unilateral acts of cancellation. The court found that the liquidators' attempt to rely on section 134(1)(c) at the appeal stage was procedurally improper, as it was not raised in the pleadings before the court a quo and would prejudice Wesbank. The court further held that the statutory moratorium under section 133(1)...

Court Disposition

Appeal dismissed with costs, including the costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.