Nathan and Another v Nathan and Others (D1322/2021) [2021] ZAKZPHC 39 (30 June 2021)

Nathan and Another v Nathan and Others (D1322/2021) [2021] ZAKZPHC 39 (30 June 2021)

The court found that the applicants lacked locus standi as they were not affected persons under section 128(1)(a) of the Companies Act. Their interest as beneficiaries of a trust holding shares in the company was insufficient to confer standing. The application was further defective for failing to seek leave to institute proceedings in a separate substantive application as required by section 133(1)(b). The applicants did not present a well-motivated application addressing the relevant factors, including the interests of creditors and employees, the impact on the company's financial health, and the purpose of business rescue. The majority of creditors and employees supported the...

Citation
[2021] ZAKZPHC 39
Parties
Applicant: Bryan Nathan; Applicant: Adele Kassuto; Respondent: Aubrey Nathan; Respondent: Devandran Gounder; Respondent: Fishwicks Printers (Pty) Ltd; Respondent: Kenneth Logan Stewart; Respondent: Harry Sidney Spain N.O.; Respondent: David Lionel Levine N.O.; Respondent: Harold Levine N.O.; Respondent: Max Selwyn Nathan N.O.; Respondent: Julian Colin Nathan; Respondent: Harry Sidney Spain; Respondent: David Lionel Levine; Respondent: Harold Levine; Respondent: The Companies and Intellectual Properties Commission; Respondent: The Creditors of Third Respondent as identified on the listing furnished by the Fourth Respondent (Respondents Fourteenth to One Hundred and Sixtieth)
Court
Kwazulu-Natal High Court, Pietermaritzburg
Jurisdiction
South Africa
Judgment Date
30 June 2021
Case Number
D1322/2021
Procedural Posture
Urgent Application / Interlocutory Urgent Application for Interim Interdict Pending Main Application
Outcome
Application dismissed with costs, including costs of two counsel where so employed.
Judges
Bezuidenhout
Legal Topics
Business Rescue, Locus Standi, Interdictory Relief, Affected Persons, Section 133 Companies Act, Creditors Rights
Commercial and Corporate Civil Procedure Business Rescue Locus Standi Interdictory Relief Affected Persons Section 133 Companies Act Creditors Rights

Case Brief

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Parties

Bryan Nathan

Applicant

Adele Kassuto

Applicant

Aubrey Nathan

Respondent

Devandran Gounder

Respondent

Fishwicks Printers (Pty) Ltd

Respondent

Kenneth Logan Stewart

Respondent

Harry Sidney Spain N.O.

Respondent

David Lionel Levine N.O.

Respondent

Harold Levine N.O.

Respondent

Max Selwyn Nathan N.O.

Respondent

Julian Colin Nathan

Respondent

Harry Sidney Spain

Respondent

David Lionel Levine

Respondent

Harold Levine

Respondent

The Companies and Intellectual Properties Commission

Respondent

The Creditors of Third Respondent as identified on the listing furnished by the Fourth Respondent (Respondents Fourteenth to One Hundred and Sixtieth)

Respondent

Procedural Posture

Urgent Application / Interlocutory Urgent Application for Interim Interdict Pending Main Application

Legal Issues

  1. 1 Whether the applicants have locus standi to bring the urgent application for relief under section 133(1)(b) of the Companies Act.
  2. 2 Whether the application for leave to institute proceedings against a company in business rescue can be brought in a combined urgent application or must be a separate substantive application.
  3. 3 Whether the applicants have established a prima facie case for the interdictory relief sought, considering the interests of creditors and employees.

Ratio Decidendi

The court found that the applicants lacked locus standi as they were not affected persons under section 128(1)(a) of the Companies Act. Their interest as beneficiaries of a trust holding shares in the company was insufficient to confer standing. The application was further defective for failing to seek leave to institute proceedings in a separate substantive application as required by section 133(1)(b). The applicants did not present a well-motivated application addressing the relevant factors, including the interests of creditors and employees, the impact on the company's financial health, and the purpose of business rescue. The majority of creditors and employees supported the...

Court Disposition

Application dismissed with costs, including costs of two counsel where so employed.

Orders

  • The urgent application is dismissed.
  • The applicants are ordered to pay the costs of the application, including the costs of two counsel where so employed.