Van Der Merwe and Others v Zonnekus Mansion (Pty) Ltd and Others (4653/2015) [2015] ZAWCHC 90; [2015] 3 All SA 659 (WCC) (10 June 2015)

Van Der Merwe and Others v Zonnekus Mansion (Pty) Ltd and Others (4653/2015) [2015] ZAWCHC 90; [2015] 3 All SA 659 (WCC) (10 June 2015)

The Supreme Court of Appeal in Richter v Absa Bank Ltd [2015] ZASCA 100 held that there is no legal barrier to commencing business rescue proceedings under Section 131(1) of the Companies Act after a final liquidation order has been granted. The SCA reasoned that the legislature did not intend to restrict business...

Source-derived case information.

Citation
[2015] ZAWCHC 90
Parties
Applicant: Gary Walter Van Der Merwe; Applicant: Candice Jean Van Der Merwe; Applicant: The Trustees for the Time Being of the Eagles Trust; Applicant: Bank On Assets Global (Pty) Ltd; Applicant: Helibase Swaziland (Pty) Ltd; Respondent: Zonnekus Mansion (Pty) Ltd (in liquidation); Respondent: The Liquidators of Zonnekus Mansion (Pty) Ltd (in liquidation); Respondent: The Standard Bank of South Africa Ltd; Respondent: ABSA Bank Ltd; Respondent: Bank On Assets Holdings (Pty) Ltd; Respondent: The Commissioner for the South African Revenue Service; Respondent: The Companies and Intellectual Properties Commission
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
10 June 2015
Case Number
4653/2015
Procedural Posture
Urgent Application / Interlocutory Application to Decide a Point of Law Prior to Main Business Rescue Application
Outcome
Application to decide the point of law granted. It is competent to commence business rescue proceedings under Section 131(1) of the Companies Act when a company is in final liquidation. The Third and Sixth Respondents are granted leave to file answering affidavits. Costs awarded to the Applicants.
Judges
Ferreira AJ
Legal Topics
Business Rescue, Final Liquidation, Companies Act Section 131, Stare Decisis
Commercial and Corporate Civil Procedure Business Rescue Final Liquidation Companies Act Section 131 Stare Decisis

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Parties

Gary Walter Van Der Merwe

Applicant

Candice Jean Van Der Merwe

Applicant

The Trustees for the Time Being of the Eagles Trust

Applicant

Bank On Assets Global (Pty) Ltd

Applicant

Helibase Swaziland (Pty) Ltd

Applicant

Zonnekus Mansion (Pty) Ltd (in liquidation)

Respondent

The Liquidators of Zonnekus Mansion (Pty) Ltd (in liquidation)

Respondent

The Standard Bank of South Africa Ltd

Respondent

ABSA Bank Ltd

Respondent

Bank On Assets Holdings (Pty) Ltd

Respondent

The Commissioner for the South African Revenue Service

Respondent

The Companies and Intellectual Properties Commission

Respondent

Procedural Posture

Urgent Application / Interlocutory Application to Decide a Point of Law Prior to Main Business Rescue Application

Legal Issues

  1. 1 Whether it is competent to commence business rescue proceedings in terms of Section 131(1) of the Companies Act when a company is in final liquidation.
  2. 2 Whether the Third and Sixth Respondents should be permitted to file answering affidavits if the point of law is decided against them.
  3. 3 Who should bear the costs of the interlocutory application and the adjudication of the point of law.

Ratio Decidendi

The Supreme Court of Appeal in Richter v Absa Bank Ltd [2015] ZASCA 100 held that there is no legal barrier to commencing business rescue proceedings under Section 131(1) of the Companies Act after a final liquidation order has been granted. The SCA reasoned that the legislature did not intend to restrict business rescue to pre-final liquidation scenarios, and such a restriction would be contrary to the objectives of the Act. The High Court is bound by this decision under the doctrine of stare decisis, regardless of contrary judgments in other divisions. Accordingly, it is competent to commence business rescue proceedings in respect of a company in final liquidation. The Third and Sixth...

Court Disposition

Application to decide the point of law granted. It is competent to commence business rescue proceedings under Section 131(1) of the Companies Act when a company is in final liquidation. The Third and Sixth Respondents are granted leave to file answering affidavits. Costs awarded to the Applicants.

Orders

  • It is declared competent to commence business rescue proceedings in terms of Section 131(1) of the Companies Act, 71 of 2008, when a company is in final liquidation.
  • The Third and Sixth Respondents are granted 15 days to file their answering affidavits, if any, and the Applicants 10 days to file their answering affidavit, if any.