South Africa Case Law

Member of the Executive Council for the Department of Community Safety and Transport Management of the North West Provincial Government v Samons N.O and Others (039123/24)

Member of the Executive Council for the Department of Community Safety and Transport Management of the North West Provincial Government v Samons N.O and Others (039123/24) [2024] ZAGPPHC 1236 (21 November 2024)

Court

North Gauteng High Court, Pretoria

Case number

039123/24

Judge

H Kooverjie

The court found that the business rescue practitioner, Mr Samons, was incompetent and failed to perform his statutory duties with the required degree of care. He did not publish business rescue plans or annual financial statements timeously, failed to verify creditor claims independently, and did not prioritize employee salaries as required by the Companies Act. The BRP also failed to comply with the PFMA and Treasury Regulations, did not keep the MEC informed, and entered into agreements without necessary approvals. The court held that these failures caused actual prejudice to the NTI compan…

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• Business Rescue Practitioner Removal
• Companies Act Section 139
• Public Finance Management Act
• Creditor Claim Verification
• Employee Salary Priority
• Costs Award

Matebesi and Another v Naicker and Others (2024-041410)

Matebesi and Another v Naicker and Others (2024-041410) [2024] ZAGPJHC 424 (3 April 2024)

Court

South Gauteng High Court, Johannesburg

Case number

2024-041410

Judge

Moorcroft

The court found that the first respondent failed to perform her statutory duties as business rescue practitioner, including failing to deliver required reports, prepare a business rescue plan, and communicate with affected parties. Her licence to act as business rescue practitioner was suspended and revoked by the CIPC, which statutorily disqualified her from continuing in office. The first respondent did not provide any substantive response to the allegations or justification for remaining in office. The court held that removal is mandatory under section 139(2) and section 138(1) of the Comp…

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• Business Rescue Practitioner Removal
• Companies Act Section 139
• Failure To Perform Duties
• Revocation Of Licence
• Punitive Costs
• Appointment Of New Practitioner

Tegeta Exploration and Resources (Pty) Ltd and Others v Knoop and Others (035371/2023)

Tegeta Exploration and Resources (Pty) Ltd and Others v Knoop and Others (035371/2023) [2023] ZAGPPHC 1920; 2024 (3) SA 181 (GP) (20 November 2023)

Court

North Gauteng High Court, Pretoria

Case number

035371/2023

Judge

Phooko AJ

The court held that the authority of Van der Merwe and Van der Merwe Attorneys to represent the Second, Fifth, and Sixth Applicants in the removal application was established, as the appointment and removal of business rescue practitioners is a governance function retained by directors and not subject to the authority of BRPs. The Companies Act and relevant case law distinguish between management (under BRP control) and governance (retained by directors). Directors do not require BRP approval to appoint attorneys for governance-related litigation, such as applications for BRP removal. However…

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• Business Rescue
• Director Powers
• Authority To Institute Proceedings
• Removal Of Business Rescue Practitioner
• Companies Act Section 139
• Corporate Governance

Carmody v Kudumela N.O. and Another (2022/17204;2022/2448)

Carmody v Kudumela N.O. and Another (2022/17204;2022/2448) [2022] ZAGPJHC 591 (18 August 2022)

Court

South Gauteng High Court, Johannesburg

Case number

2022/17204;2022/2448

Judge

S Yacoob

The court refused to remove a business rescue practitioner but converted Matsway Steel's business rescue into final liquidation after finding no credible rescue prospect.

• Business Rescue Practitioner Removal
• Conversion To Liquidation
• Companies Act Section 139
• Companies Act Section 141
• Creditor Rights
• Business-rescue

Tayob N.O and Another v Shiva Uranium Proprietary Limited and Others (62989/2021)

Tayob N.O and Another v Shiva Uranium Proprietary Limited and Others (62989/2021) [2022] ZAGPPHC 220 (23 March 2022)

Court

North Gauteng High Court, Pretoria

Case number

62989/2021

Judge

Msimang

The court held that the applicants, Mahomed Mahier Tayob N.O. and Eugene Januarie N.O., are the validly appointed business rescue practitioners of Shiva Uranium Proprietary Limited, as previously determined by the Supreme Court of Appeal and the Constitutional Court. The appointment of Mr Damons as a business rescue practitioner by the directors on 2 September 2021 was set aside as unlawful, since the directors were not entitled to appoint a new practitioner except in accordance with section 139 of the Companies Act. The appointment of Mr Monyela as a junior business rescue practitioner remai…

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• Business Rescue
• Appointment Of Practitioners
• Companies Act Section 129
• Companies Act Section 139
• Urgent Interdict
• Corporate Governance

Oakbay Investments (Pty) Ltd v Tegeta Exploration and Resources (Pty) Ltd and Others (1274/2019)

Oakbay Investments (Pty) Ltd v Tegeta Exploration and Resources (Pty) Ltd and Others (1274/2019) [2021] ZASCA 59 (21 May 2021)

Court

Supreme Court of Appeal

Case number

1274/2019

Judges

Ponnan, Wallis, Saldulker, Goosen, Unterhalter

The court found that Oakbay's application for removal of the BRPs was not supported by evidence of an actual conflict of interest or lack of independence. The alleged conflict was speculative and based on hypothetical future scenarios, not on the BRPs' personal interests or conduct. Both business rescue plans treated the disputed intercompany loans consistently, and statutory mechanisms existed to independently appraise claims. The BRPs' duty was to investigate and act in the interests of all creditors, not to pursue adversarial litigation within the group. The court held that there was no re…

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• Business Rescue
• Conflict Of Interest
• Removal Of Practitioner
• Companies Act Section 139
• Intercompany Loans

Klopper N.O and Another v Gupta (84095/2018)

Klopper N.O and Another v Gupta (84095/2018) [2020] ZAGPPHC 14 (7 February 2020)

Court

North Gauteng High Court, Pretoria

Case number

84095/2018

Judges

A.P. Ledwaba, N. Janse Van Nieuwenhuizen, M.L. Senyatsi

The court found that compelling reasons exist for granting leave to appeal, including the considerable public interest in the matter, a legislative gap in the Companies Act regarding the appointment period for new business rescue practitioners, uncertainty about the status of business rescue proceedings if practitioners are not appointed, and conflicting decisions within the division on the issue of conflict of interest. The court determined that these factors justify the appeal being heard by the Supreme Court of Appeal.

Source excerpt

• Business Rescue Practitioners
• Conflict Of Interest
• Leave To Appeal
• Companies Act Section 139
• Public Interest
• Costs In The Appeal