South Africa Case Law

S E Ventures (Pty) Ltd v Kareeboom Kimberley (Pty) Ltd and Others (6017/2022)

S E Ventures (Pty) Ltd v Kareeboom Kimberley (Pty) Ltd and Others (6017/2022) [2023] ZAFSHC 373 (4 October 2023)

Court

Free State High Court, Bloemfontein

Case number

6017/2022

Judge

PR Cronjé

The court found that SEV's application for business rescue was speculative and lacked a firm factual foundation. The four proposed rescue plans were reliant on uncertain future events, such as the approval and development of a 150 MW solar plant, for which necessary permits, approvals, and financing were not secured. Previous authorisations had lapsed, and there was no evidence of a binding lease agreement or financial capacity of Rodicon or any third-party developer. The asset valuation presented by SEV was unsupported, and the liquidators' valuation indicated that liabilities exceeded asset…

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• Business Rescue
• Companies Act Section 131
• Creditor Priority
• Liquidation Vs Business Rescue
• Valuation Of Assets

Vincemus Investments (Pty) Ltd v Bekker N.O. and Others (12477/2020)

Vincemus Investments (Pty) Ltd v Bekker N.O. and Others (12477/2020) [2023] ZAWCHC 169 (25 July 2023)

Court

Western Cape High Court, Cape Town

Case number

12477/2020

Judge

P.A.L. Gamble

The court held that Vincemus Investments (Pty) Ltd was entitled to recover its wasted costs in the abortive winding-up application as costs in the liquidation of Travea (Pty) Ltd. The court found that Vincemus acted bona fide and that the liquidators and other creditors opposed the claim not on legal principle but due to the quantum of the bill. The court rejected Vital Fleet's argument that only one set of costs could be recovered, finding that the relevant legal authorities and practice did not preclude the court from exercising its discretion to direct payment of such costs. The court furt…

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• Winding Up Proceedings
• Costs In Liquidation
• Insolvency Act Section 97
• Creditor Priority
• Liquidation Distribution Account

Airlink Proprietary Limited v South African Airways SOC Limited and Others (11399/2022)

Airlink Proprietary Limited v South African Airways SOC Limited and Others (11399/2022) [2023] ZAGPJHC 832 (25 July 2023)

Court

South Gauteng High Court, Johannesburg

Case number

11399/2022

Judge

Wepener

The court found that Airlink's claims for flown and unflown ticket revenue are pre-commencement debts, as previously determined by the High Court and Supreme Court of Appeal. Airlink is therefore a concurrent creditor under the SAA business rescue plan and cannot assert its claims against the rescued SAA or receive preferential distributions as an Unsecured PCF Creditor. The court held that the matter is res judicata, as the same parties and issues have already been adjudicated, and the business rescue plan did not alter Airlink's status. The definitions and context of the plan support the co…

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• Business Rescue
• Creditor Priority
• Declaratory Relief
• Res Judicata
• Interpretation Of Business Rescue Plan

Harold N.O. and Another v R and R Wholesalers and Distributors CC and Others (21033/2021)

Harold N.O. and Another v R and R Wholesalers and Distributors CC and Others (21033/2021) [2022] ZAGPJHC 398 (8 June 2022)

Court

South Gauteng High Court, Johannesburg

Case number

21033/2021

Judge

Spilg

The court discontinued business rescue and ordered R&R Wholesalers and Distributors CC into final winding-up, rejecting a stay pending Competition Tribunal proceedings.

• Business Rescue
• Final Winding Up
• Creditor Priority
• Competition Tribunal Referral
• Abuse Of Process
• Business-rescue

Kriel N.O v Rockland Group Holdings (Pty) Ltd and Another; Born Free Investments 247 (Pty) Ltd v Kriel N.O (5417/2014; 9609/2014; 12862/2019)

Kriel N.O v Rockland Group Holdings (Pty) Ltd and Another; Born Free Investments 247 (Pty) Ltd v Kriel N.O (5417/2014; 9609/2014; 12862/2019) [2021] ZAWCHC 243 (24 November 2021)

Court

Western Cape High Court, Cape Town

Case number

5417/2014; 9609/2014; 12862/2019

Judge

Binns-Ward

The court held that Born Free Investments 247 (Pty) Ltd failed to demonstrate sufficient grounds for lifting the suspension of proceedings imposed by the curatorship order under section 5(5)(a) of the Financial Institutions (Protection of Funds) Act. The primary consideration is the effective conduct of the curatorship and the protection of investor interests. RAM's only asset is its loan claim against RGH, and the outcome of that action will determine whether RAM has any assets to satisfy Born Free's claim. Proceeding with the rental claim action now would risk unnecessary legal costs and co…

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• Curatorship Stay Of Proceedings
• Leave To Proceed Against Curatorship
• Consolidation Of Actions
• Financial Institutions Protection Of Funds Act
• Creditor Priority
• Bill Of Rights Limitation

Theresa van der Merwe & another v Ikageng Electrical (2247/2019)

Theresa van der Merwe & another v Ikageng Electrical (2247/2019) [2021] ZAFSHC 118 (22 April 2021)

Court

Free State High Court, Bloemfontein

Case number

2247/2019

Judge

C.J. Musi

The court found that the applicants failed to demonstrate reasonable prospects of success on appeal. The business rescue application was deemed an abuse of process, intended to delay the winding-up of Ikageng Electrical Contractors. The applicants lacked candor regarding the company's indebtedness, particularly to SARS and other creditors, and failed to provide proper asset valuations. The evidence showed that Mr. Moselane was indispensable to the company's operations, and his removal would likely result in the company's collapse. The applicants' arguments regarding the value of attached mova…

Source excerpt

• Business Rescue
• Winding Up
• Leave To Appeal
• Creditor Priority
• Costs Order

Nyhonyha and Others v Venter N.O and Others (35508/20)

Nyhonyha and Others v Venter N.O and Others (35508/20) [2021] ZAGPJHC 20; [2021] 2 All SA 507 (GJ) (22 January 2021)

Court

South Gauteng High Court, Johannesburg

Case number

35508/20

Judge

Vally

The court found that Regiments Capital (Pty) Ltd, after considering all assets including shareholdings in Coral, Kgoro, and Little River, is commercially solvent and able to pay all creditors, including SARS, once its tax assessment is issued. The applicants provided undertakings that related creditors would be paid only after external creditors and SARS are satisfied. The conduct of Regiments' directors and attorneys was criticised for lack of transparency and failure to comply with statutory obligations, but this did not preclude relief. The Tate report was found lacking in detail but, toge…

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• Setting Aside Winding Up
• Companies Act Section 354
• Creditor Priority
• Capital Gains Tax
• Commercial Morality
• Tax Assessment Liability

National Union of Metalworkers of SA and Others v VR Laser Services (Pty) Ltd and Others (19419/19)

National Union of Metalworkers of SA and Others v VR Laser Services (Pty) Ltd and Others (19419/19) [2020] ZAGPJHC 47; [2020] 2 All SA 536 (GJ) (10 March 2020)

Court

South Gauteng High Court, Johannesburg

Case number

19419/19

Judge

Vally

The court held that the PCF claims of employees do not rank ahead of the Bank's secured claim over encumbered assets. Section 134(3) of the Companies Act and the common law protect the rights of secured creditors, and business rescue proceedings do not dilute these rights. The fourth business rescue plan did not lawfully alter the ranking of claims or constitute a waiver of the Bank's security, as the plan was not a genuine rescue proposal and the Bank's vote did not amount to a waiver. The BRPs acted unlawfully by pursuing a 'controlled liquidation' under business rescue and by elevating emp…

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• Business Rescue
• Creditor Priority
• Post Commencement Finance
• Secured Creditor Rights
• Employee Remuneration
• Controlled Liquidation

Firstrand Bank Limited v Normandie Restaurants Investments and Another (189/2016)

Firstrand Bank Limited v Normandie Restaurants Investments and Another (189/2016) [2016] ZASCA 178 (25 November 2016)

Court

Supreme Court of Appeal

Case number

189/2016

Judges

Lewis, Cachalia, Tshiqi, Willis, Dambuza

The Supreme Court of Appeal found that Normandie Restaurants Investments (Pty) Ltd was commercially insolvent and unable to pay its debts, with no reasonable prospect of being rescued through business rescue proceedings. The proposed business rescue plan was inadequate, lacked detail, and depended solely on rental income from a single tenant, which was insufficient to meet the company's obligations. The interests of the creditors, particularly the Bank as the major creditor, outweighed any speculative prospects of rescue. There was no evidence that SARS or other creditors would agree to compr…

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• Business Rescue Proceedings
• Winding Up
• Companies Act 71 Of 2008
• Creditor Priority

Khan v Sprint Logistics SA (Pty) Ltd and Others (5924.2016; 12824.2015; 3167.2016; 78.2016)

Khan v Sprint Logistics SA (Pty) Ltd and Others (5924.2016; 12824.2015; 3167.2016; 78.2016) [2016] ZAKZDHC 43 (4 November 2016)

Court

Kwazulu-Natal High Court, Durban

Case number

5924/2016

Judge

Chetty

The court found that the applicant failed to establish a reasonable prospect of rescuing Sprint Logistics SA (Pty) Ltd. The business rescue application was premised on assets and a lease that were either overvalued or no longer available, as the company had been evicted from its premises and lacked reliable electricity and water supply. The report of the business rescue practitioner was vague and unsupported by concrete evidence of new contracts or investor funding. The intervention by the trustees of the Mohamed Khan Family Trust was allowed to cure the locus standi defect, but this did not…

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• Business Rescue
• Winding Up
• Financial Distress
• Creditor Priority
• Service On Employees
• Intervention By Trustees