South Africa Case Law

Mashwayi Projects (Pty) Ltd and Others v Wescoal (Pty) Ltd and Others (1157/2023)

Mashwayi Projects (Pty) Ltd and Others v Wescoal (Pty) Ltd and Others (1157/2023) [2025] ZASCA 5; [2025] 2 All SA 57 (SCA); 2025 (3) SA 441 (SCA) (29 January 2025)

Court

Supreme Court of Appeal

Case number

1157/2023

Judges

Makgoka, Smith, Keightley, Hendricks, Dippenaar

The Supreme Court of Appeal held that the Companies Act 71 of 2008 does not exclude post-commencement creditors from voting on a business rescue plan. The Act's language, context, and purpose support a unitary interpretation of 'creditor' that includes both pre- and post-commencement creditors. The absence of express limitation and the requirement to balance stakeholder interests under section 7(k) of the Act mean that all creditors are entitled to vote. The court rejected reliance on foreign law and policy considerations, emphasizing that statutory interpretation must be based on the text an…

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• Business Rescue
• Creditor Voting Rights
• Companies Act 71 Of 2008
• Post Commencement Finance
• Statutory Interpretation
• Stakeholder Rights

Volkar N.O and Others v Big Sky Trading 219 CC and Another (12601/23)

Volkar N.O and Others v Big Sky Trading 219 CC and Another (12601/23) [2024] ZAKZPHC 9; 2025 (3) SA 667 (KZP) (9 February 2024)

Court

Kwazulu-Natal High Court, Pietermaritzburg

Case number

12601/23

Judge

Pietersen AJ

The court found that the non-joinder of other creditors, who have a direct and substantial interest in the business rescue proceedings and the section 151 meeting, was fatal to the application. The applicants failed to join these parties, and any order postponing or staying the meeting would prejudice their statutory rights. Furthermore, the applicants had adequate alternative remedies available under the business rescue plan and the Companies Act, including the right to review the business rescue practitioner's decision and to move for amendments at the section 151 meeting. The requirements…

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• Business Rescue
• Creditor Voting Rights
• Interim Interdict
• Non Joinder
• Adequate Alternative Remedy

Ergomode (Pty) Ltd v Jordaan NO and Others (643/2022)

Ergomode (Pty) Ltd v Jordaan NO and Others (643/2022) [2024] ZASCA 10 (29 January 2024)

Court

Supreme Court of Appeal

Case number

643/2022

Judges

Petse, Mocumie, Weiner, Molefe, Windell

The Supreme Court of Appeal held that the extensions for publication of the business rescue plan were validly granted by majority creditor consent, as permitted by s 150(5)(b) of the Companies Act, and did not require a formal meeting. Ergomode participated in the adoption meeting without objection and its subsequent challenge was unsustainable. The determination of Ergomode as a non-independent creditor was not reviewed within the prescribed five-day period, and no substantive case for condonation was made. The moratorium in s 133 applies to all legal proceedings, including perfection of a l…

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• Business Rescue
• Creditor Voting Rights
• Landlord Hypothec
• Moratorium On Legal Proceedings
• Condonation
• Employee Representation

Standard Bank of South Africa Limited v Franlese Boerdery (Pty) Ltd and Others (3058/2023)

Standard Bank of South Africa Limited v Franlese Boerdery (Pty) Ltd and Others (3058/2023) [2023] ZAFSHC 452 (9 November 2023)

Court

Free State High Court, Bloemfontein

Case number

3058/2023

Judge

J F Hefer

The court found that the business rescue practitioner failed to conduct the process with the required expedition, repeatedly delayed publication of rescue plans, and did not adequately address the applicant's concerns regarding asset preservation and security interests. The revised business rescue plan would require the applicant, a secured creditor with a majority voting right, to wait 12 years for payment, despite a prior settlement agreement and court order for payment. The applicant's vote against the plan was not inappropriate given its interests and the conduct of the practitioner. The…

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• Business Rescue
• Liquidation Proceedings
• Creditor Voting Rights
• Settlement Agreement Enforcement
• Counterapplication Procedure

Wescoal Mining (Pty) Ltd and Another v Mkhambo NO and Others (2023-079991)

Wescoal Mining (Pty) Ltd and Another v Mkhambo NO and Others (2023-079991) [2023] ZAGPJHC 1234 (31 October 2023)

Court

South Gauteng High Court, Johannesburg

Case number

2023-079991

Judge

S D J Wilson

The High Court granted leave to appeal over business rescue voting rights but refused interim execution pending appeal.

• Business Rescue
• Creditor Voting Rights
• Statutory Interpretation
• Interim Execution
• Leave To Appeal
• Business-rescue

Wescoal Mining (Pty) Ltd Another v Mkhombo NO and Other (2023-079991)

Wescoal Mining (Pty) Ltd Another v Mkhombo NO and Other (2023-079991) [2023] ZAGPJHC 1097; 2024 (2) SA 563 (GJ) (2 October 2023)

Court

South Gauteng High Court, Johannesburg

Case number

2023-079991

Judge

S D J Wilson

The court held that the Companies Act, properly interpreted, confers voting rights at a section 152 meeting only on creditors who existed at the commencement of business rescue proceedings. Post-commencement creditors, such as Mashwayi Projects (Pty) Ltd, are not entitled to vote on the adoption of a business rescue plan. The statutory scheme distinguishes between pre- and post-commencement creditors, granting the latter enhanced security but not participatory voting rights. The business rescue plan presented at the 28 July 2023 meeting was validly adopted, as the exclusion of Mashwayi's vote…

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• Business Rescue
• Creditor Voting Rights
• Companies Act Interpretation
• Urgent Application
• Costs Order

Ragavan and Others v Optimum Coal Terminal (Pty) Ltd and Others (136/2022)

Ragavan and Others v Optimum Coal Terminal (Pty) Ltd and Others (136/2022) [2023] ZASCA 34; 2023 (4) SA 78 (SCA) (31 March 2023)

Court

Supreme Court of Appeal

Case number

136/2022

Judges

Van der Merwe, Mothle, Mabindla-Boqwana, Molefe, Unterhalter

The Supreme Court of Appeal held that, under Chapter 6 of the Companies Act 71 of 2008, business rescue practitioners are vested with full management control over the company, including its property and assets, in substitution for the board of directors. This control encompasses the right to vote as a creditor on the business rescue plan of a debtor company. The court found that the ordinary meaning of 'full management control' includes decisions over the company's property, such as voting on a debtor's plan, which directly affects the company's assets and prospects of rescue. The appellants'…

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• Business Rescue
• Creditor Voting Rights
• Companies Act 71 Of 2008
• Management Control
• Interpretation Of Statutes

Ragavan and Others v Optimum Coal Terminal (Pty) Ltd and Others (52832/2021)

Ragavan and Others v Optimum Coal Terminal (Pty) Ltd and Others (52832/2021) [2022] ZAGPJHC 22; 2022 (3) SA 512 (GJ) (18 January 2022)

Court

South Gauteng High Court, Johannesburg

Case number

52832/2021

Judge

Victor

The court held that the Companies Act, specifically Chapter 6, draws a clear distinction between the powers of directors and business rescue practitioners (BRPs) during business rescue proceedings. The Act unequivocally transfers full management control to the BRPs, limiting directors to governance functions that do not extend to external management decisions such as voting at section 151(1) meetings. The BRPs, not the directors, are empowered to vote at such meetings, and there is no statutory requirement for a mandate from an adopted business rescue plan before the BRPs may exercise this ri…

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• Business Rescue
• Director Powers
• Creditor Voting Rights
• Mandate Requirements
• Companies Act Interpretation

Ferrostaal GmbH and Another v Transnet Soc Ltd t/a Transnet National Ports Authority and Another (1194/2019)

Ferrostaal GmbH and Another v Transnet Soc Ltd t/a Transnet National Ports Authority and Another (1194/2019) [2021] ZASCA 62; 2021 (5) SA 493 (SCA); [2021] 4 All SA 330 (SCA) (25 May 2021)

Court

Supreme Court of Appeal

Case number

1194/2019

Judges

Dambuza, Molemela, Mbatha, Gorven, Goosen

The Supreme Court of Appeal held that Transnet's vote against the adoption of the revised business rescue plan was not inappropriate. The plan failed to provide for payment of substantial arrear rental during the lease period, deferred repayment to a future extension that was not guaranteed, and relied on uncertain future events and undisclosed financial details. The plan did not adequately protect Transnet's interests as the major creditor and would have required Transnet to exercise its contractual rights in a predetermined manner, which was unreasonable. The statutory procurement requireme…

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• Business Rescue
• Creditor Voting Rights
• Companies Act 71 Of 2008
• Public Procurement
• Lease Agreement
• Judicial Discretion

Absa Bank Limited v Naude N.O and Another (66088/2012, 66087/2012)

Absa Bank Limited v Naude N.O and Another (66088/2012, 66087/2012) [2014] ZAGPPHC 181 (24 January 2014)

Court

North Gauteng High Court, Pretoria

Case number

66088/2012

Judge

Ismail

High Court dismissed Absa’s challenge to a business rescue plan and related counter-application, finding procedural non-joinder and moratorium defects fatal.

• Business Rescue
• Creditor Voting Rights
• Cross Suretyship
• Non Joinder
• Moratorium Under Companies Act
• Removal Of Business Rescue Practitioner