South Africa Case Law

Southern Sky Hotel and Leisure (Pty) Ltd and Others v Southern Sky Food Enterprises (Pty) Ltd (617/2021)

Southern Sky Hotel and Leisure (Pty) Ltd and Others v Southern Sky Food Enterprises (Pty) Ltd (617/2021) [2022] ZASCA 134; 2023 (4) SA 99 (SCA) (13 October 2022)

Court

Supreme Court of Appeal

Case number

617/2021

Judges

Ponnan, Van der Merwe, Musi, Basson, Masipa

Section 131(6) of the Companies Act suspends the process of liquidation, but does not invalidate agreements concluded by liquidators, provided that such agreements are subject to the outcome of any pending business rescue application. Clause 24 of the sale agreement made the transaction conditional upon the dismissal of the business rescue application, ensuring compliance with the statutory suspension. There is no textual, contextual, or purposive basis in s 131(6) to render such agreements void. The respondent’s application to declare the agreement invalid was therefore unfounded, and the hi…

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• Business Rescue Proceedings
• Liquidation Suspension
• Sale Of Company Assets
• Statutory Interpretation
• Abuse Of Process

Maroos and Others v GCC Engineering (Pty) Ltd and Others (36777/2017)

Maroos and Others v GCC Engineering (Pty) Ltd and Others (36777/2017) [2017] ZAGPPHC 297 (15 June 2017)

Court

North Gauteng High Court, Pretoria

Case number

36777/2017

Judge

H J Fabricius

The court held that the effect of a business rescue application under section 131(6) of the Companies Act 2008 is to suspend liquidation proceedings, including the powers of provisional liquidators. During this suspension, the assets of the company fall under the control of the Master, but the management powers and authority to conduct the company's affairs re-vest in the director. This interpretation aligns with the purpose of business rescue, which is to allow the company to resume trading and potentially be rescued, and avoids leaving the company without management. The court rejected cont…

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• Business Rescue
• Liquidation Suspension
• Director Powers
• Interim Management
• Companies Act Interpretation

Van Zyl v Engelbrecht N.O. (3885/2012)

Van Zyl v Engelbrecht N.O. (3885/2012) [2014] ZAFSHC 17; 2014 (5) SA 312 (FB) (27 February 2014)

Court

Free State High Court, Bloemfontein

Case number

3885/2012

Judge

Lekale

The court held that the suspension of liquidation proceedings under section 131(6) of the Companies Act includes the suspension of the liquidator's office, preventing the collection of assets during the suspension period. All legal proceedings instituted by the liquidator as part of the liquidation process, including claims for damages, are automatically suspended when a business rescue application is made. Any steps taken by the liquidator after the suspension are legally ineffective unless ratified after the suspension ends. The applicant's argument that claims for the company are exempt fr…

Source excerpt

• Business Rescue Proceedings
• Liquidation Suspension
• Costs Award
• Rule 33 4 Separation

Employees of Solar Spectrum Trading 83 (Pty) Limited v Afgri Operation Limited and Another (6418/2011, 18624/2011, 66226/2011, 66226/2011, 66226A/11)

Employees of Solar Spectrum Trading 83 (Pty) Limited v Afgri Operation Limited and Another (6418/2011, 18624/2011, 66226/2011, 66226/2011, 66226A/11) [2012] ZAGPPHC 359 (16 May 2012)

Court

North Gauteng High Court, Pretoria

Case number

6418/2011, 18624/2011, 66226/2011, 66226A/11

Judge

Kollapen

The court granted business rescue for Solar Spectrum Trading 83 (Pty) Ltd, dismissed provisional judicial management, suspended liquidation, and appointed a practitioner.

• Business Rescue
• Companies Act 71 Of 2008
• Judicial Management
• Liquidation Suspension
• Appointment Of Business Rescue Practitioner
• Business-rescue