NDPP v Sharma and Others (2427/2021) [2021] ZAFSHC 172; 2022 (1) SACR 289 (FB) (11 August 2021)

NDPP v Sharma and Others (2427/2021) [2021] ZAFSHC 172; 2022 (1) SACR 289 (FB) (11 August 2021)

The court held that, as the Supreme Court of Appeal's order reinstating the business rescue practitioners was not suspended by the late application for leave to appeal and condonation, the business rescue practitioners remain in control of the third defendant. In terms of the Companies Act, the practitioners have full management control and any action by the directors, including authorising attorneys to oppose proceedings, is void unless approved by the practitioners. The directors and their attorneys lacked authority to oppose the confirmation of the restraint order, and the purported mandate to BDK Attorneys was invalid. The company may not institute or defend legal proceedings without...

Citation
[2021] ZAFSHC 172
Parties
Applicant: THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS; Defendant: IQBAL MEER SHARMA; Defendant: NULANE INVESTMENTS 204 (PTY) LTD; Defendant: ISLANDSITE INVESTMENTS 180 (PTY) LTD; Defendant: KURT ROBERT KNOOP N.O.; Defendant: JOHAN LOUIS KLOPPER N.O.; Respondent: ISSAR GLOBAL LIMITED; Respondent: ISSAR CAPITAL (PTY) LTD; Respondent: TARINA PATEL-SHARMA
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
11 August 2021
Case Number
2427/2021
Procedural Posture
Civil Application / Determination of Locus Standi and Authority to Oppose Provisional Restraint Order
Outcome
The court found that BDK Attorneys do not have authority to act on behalf of the third defendant, and the directors and shareholders of the third defendant have no standing to oppose the proceedings without approval from the business rescue practitioners.
Judges
C.J. Musi
Legal Topics
Business Rescue, Locus Standi, Authority of Attorney, Restraint Order, Companies Act, Prevention of Organised Crime Act
Civil Procedure Commercial and Corporate Business Rescue Locus Standi Authority of Attorney Restraint Order Companies Act Prevention of Organised Crime Act

Case Brief

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Parties

THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS

Applicant

IQBAL MEER SHARMA

Defendant

NULANE INVESTMENTS 204 (PTY) LTD

Defendant

ISLANDSITE INVESTMENTS 180 (PTY) LTD

Defendant

KURT ROBERT KNOOP N.O.

Defendant

JOHAN LOUIS KLOPPER N.O.

Defendant

ISSAR GLOBAL LIMITED

Respondent

ISSAR CAPITAL (PTY) LTD

Respondent

TARINA PATEL-SHARMA

Respondent

Procedural Posture

Civil Application / Determination of Locus Standi and Authority to Oppose Provisional Restraint Order

Legal Issues

  1. 1 Whether the directors and their attorneys have locus standi to oppose the confirmation of a provisional restraint order issued under section 26 of POCA.
  2. 2 Whether the authority to act on behalf of a company under business rescue resides with the directors or the business rescue practitioners.
  3. 3 Whether the application for leave to appeal and condonation suspends the Supreme Court of Appeal's order reinstating the business rescue practitioners.

Ratio Decidendi

The court held that, as the Supreme Court of Appeal's order reinstating the business rescue practitioners was not suspended by the late application for leave to appeal and condonation, the business rescue practitioners remain in control of the third defendant. In terms of the Companies Act, the practitioners have full management control and any action by the directors, including authorising attorneys to oppose proceedings, is void unless approved by the practitioners. The directors and their attorneys lacked authority to oppose the confirmation of the restraint order, and the purported mandate to BDK Attorneys was invalid. The company may not institute or defend legal proceedings without...

Court Disposition

The court found that BDK Attorneys do not have authority to act on behalf of the third defendant, and the directors and shareholders of the third defendant have no standing to oppose the proceedings without approval from the business rescue practitioners.

Orders

  • BDK Attorneys do not have authority to act on behalf of the third defendant in these proceedings.
  • The directors and/or shareholders of the third defendant have no standing to oppose these proceedings without the approval of the business rescue practitioners.