Newton Global Trading (Pty) Ltd v Da Corte (104/15) [2015] ZASCA 199 (2 December 2015)

Newton Global Trading (Pty) Ltd v Da Corte (104/15) [2015] ZASCA 199 (2 December 2015)

The Supreme Court of Appeal held that non-compliance with the procedural requirements of section 129(3) and (4) of the Companies Act does not, by itself, terminate business rescue proceedings or invalidate the appointment of the business rescue practitioner. Termination only occurs when a competent court sets aside the resolution in terms of section 130(5)(a) read with section 132(2)(a)(i). The respondent, not being an 'affected person' as defined in section 128, cannot challenge the locus standi of the business rescue practitioner on the basis of procedural non-compliance. The Legislature did not intend for non-affected persons to be in a better position than affected persons regarding...

Citation
[2015] ZASCA 199
Parties
Appellant: Newton Global Trading (Pty) Ltd (Under Business Rescue); Respondent: Eddie Da Corte
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
2 December 2015
Case Number
104/15
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal upheld; point in limine dismissed; matter remitted to the High Court for further determination.
Judges
Mpati, Lewis, Cachalia, Saldulker, Dambuza
Legal Topics
Business Rescue, Locus Standi, Companies Act 71 of 2008, Procedural Compliance, Affected Persons
Commercial and Corporate Business Rescue Locus Standi Companies Act 71 of 2008 Procedural Compliance Affected Persons

Case Brief

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Parties

Newton Global Trading (Pty) Ltd (Under Business Rescue)

Appellant

Eddie Da Corte

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether non-compliance with section 129(3) and (4) of the Companies Act 71 of 2008 renders business rescue proceedings and the appointment of the business rescue practitioner a nullity.
  2. 2 Whether a party who is not an 'affected person' may challenge the locus standi of a business rescue practitioner when the business rescue resolution has not been set aside.

Ratio Decidendi

The Supreme Court of Appeal held that non-compliance with the procedural requirements of section 129(3) and (4) of the Companies Act does not, by itself, terminate business rescue proceedings or invalidate the appointment of the business rescue practitioner. Termination only occurs when a competent court sets aside the resolution in terms of section 130(5)(a) read with section 132(2)(a)(i). The respondent, not being an 'affected person' as defined in section 128, cannot challenge the locus standi of the business rescue practitioner on the basis of procedural non-compliance. The Legislature did not intend for non-affected persons to be in a better position than affected persons regarding...

Court Disposition

Appeal upheld; point in limine dismissed; matter remitted to the High Court for further determination.

Orders

  • The appeal succeeds with costs, including the costs of two counsel.
  • The order of the court below is set aside and replaced with: 'The point in limine is dismissed with costs.'