South Africa Case Law

Ally v Firstrand Bank Limited and Others (1209/2024P)

Ally v Firstrand Bank Limited and Others (1209/2024P) [2024] ZAKZPHC 36 (1 February 2024)

Court

Kwazulu-Natal High Court, Pietermaritzburg

Case number

1209/2024P

Judge

P C Bezuidenhout

The court found that the urgency of the application was justified by the timing of the business rescue practitioner's report, which was only received on 25 January 2024. The evidence presented, including substantial assets, monthly rental income, stock, offers to purchase properties, and employee support, established sufficient grounds for a reasonable prospect of rescuing Fourth Respondent. The court applied the principles from section 131 of the Companies Act and Oakdene Square Properties, noting that a detailed plan is not required but factual grounds must be shown. The court concluded tha…

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• Business Rescue
• Companies Act Section 131
• Urgent Interdict
• Liquidation Vs Business Rescue
• Affected Party Rights

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

Gouws v Eraki Trading 12 CC t/a Timmermans Kitchens and Others (2944/2022)

Gouws v Eraki Trading 12 CC t/a Timmermans Kitchens and Others (2944/2022) [2023] ZAGPJHC 953 (16 August 2023)

Court

South Gauteng High Court, Johannesburg

Case number

2944/2022

Judge

PG Louw

The High Court dismissed a business rescue application, finding the applicant’s evidence about future work and recovery prospects was speculative and uncorroborated.

• Business Rescue
• Reasonable Prospect
• Companies Act Section 131
• Liquidation Vs Business Rescue
• Business-rescue
• Reasonable-prospect

PFC Properties (Pty) Ltd v Commissioner for the South African Revenue Service and Others (10396/21)

PFC Properties (Pty) Ltd v Commissioner for the South African Revenue Service and Others (10396/21) [2021] ZAGPPHC 237 (10 May 2021)

Court

North Gauteng High Court, Pretoria

Case number

10396/21

Judge

E van der Schyff

The High Court granted leave to appeal over the interaction between pending business rescue and liquidation under the Companies Act.

• Business Rescue Proceedings
• Liquidation Vs Business Rescue
• Companies Act Interpretation
• Statutory Suspension Of Proceedings
• Business-rescue
• Liquidation

Zikhulise Auto Recoveries (Pty) Ltd and Others v Zikhulise Auto Restorers (Pty) Ltd and Others (South African Revenue Service Intervening) (36492/2018)

Zikhulise Auto Recoveries (Pty) Ltd and Others v Zikhulise Auto Restorers (Pty) Ltd and Others (South African Revenue Service Intervening) (36492/2018) [2019] ZAGPJHC 531 (13 December 2019)

Court

South Gauteng High Court, Johannesburg

Case number

36492/2018

Judge

EF Dippenaar

The High Court dismissed a business rescue application for a company in liquidation, finding non-compliance with notice requirements, no reasonable prospect of rescue, and abuse of process concerns.

• Business Rescue
• Companies Act 71 Of 2008
• Liquidation Vs Business Rescue
• Affected Person Notification
• Abuse Of Process
• Business-rescue

Employees of Sphynx Trading CC v Sphynx Trading CC and Others (38140/20)

Employees of Sphynx Trading CC v Sphynx Trading CC and Others (38140/20) [2019] ZAGPJHC 173 (9 May 2019)

Court

South Gauteng High Court, Johannesburg

Case number

38140/20

Judge

Maier-Frawley AJ

The High Court dismissed an employee-led business rescue application for Sphynx Trading CC, finding no reasonable prospect of rescue and granting punitive costs.

• Business Rescue
• Companies Act Section 131
• Locus Standi
• Abuse Of Process
• Liquidation Vs Business Rescue
• Affected Persons Notification

Mapalakanye and Others, In Re: Mapakanye and Another v Born-to-Protect Security Services (Pty) Ltd and Others (3437/2018)

Mapalakanye and Others, In Re: Mapakanye and Another v Born-to-Protect Security Services (Pty) Ltd and Others (3437/2018) [2018] ZALMPPHC 28 (29 June 2018)

Court

Limpopo High Court, Polokwane

Case number

3437/2018

Judge

E M Makgoba

The court found that although it is legally possible to place a company in final liquidation under business rescue, the applicants failed to establish a reasonable prospect that business rescue would succeed. The company had suffered extensive mismanagement, fraud, and asset dissipation, with most contracts cancelled and goodwill lost. The evidence indicated that a liquidator was better equipped to recover assets and protect creditors' interests. The application appeared to be motivated by an attempt to regain control of company funds rather than a genuine prospect of rescuing the business. T…

Source excerpt

• Business Rescue
• Companies Act Section 131
• Liquidation Vs Business Rescue
• Reasonable Prospect Requirement
• Creditors Interests
• Gross Mismanagement

Knipe v Kameelhoek (Pty) Ltd and Others (2120/2016)

Knipe v Kameelhoek (Pty) Ltd and Others (2120/2016) [2017] ZAFSHC 116 (22 June 2017)

Court

Free State High Court, Bloemfontein

Case number

2120/2016

Judge

MH Rampai

The High Court refused leave to appeal against dismissal of a business rescue application for two family companies in liquidation, and ordered punitive costs.

• Business Rescue
• Leave To Appeal Test
• Liquidation Vs Business Rescue
• Shareholder Dispute
• Punitive Costs
• Stakeholder Interests

Gqwaru and Another v Magalela Architects CC and Another (19959/2016)

Gqwaru and Another v Magalela Architects CC and Another (19959/2016) [2017] ZAGPJHC 32 (23 February 2017)

Court

South Gauteng High Court, Johannesburg

Case number

19959/2016

Judge

Ratshibvumo

The court found that the first respondent is financially distressed and unable to pay its debts, satisfying the statutory requirements for business rescue. The applicants’ undertakings not to demand payment of substantial debts and the existence of ongoing projects with significant potential income support a reasonable prospect of rescuing the business. The breakdown of trust and allegations of fraud do not preclude business rescue, as the practitioner has statutory powers to investigate and refer any evidence of misconduct. The court rejected the respondents’ argument that liquidation is pre…

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• Business Rescue
• Companies Act 71 Of 2008
• Financial Distress
• Liquidation Vs Business Rescue
• Appointment Of Business Rescue Practitioner

Ndakisa v Dokose Construction CC and Another (2934/2015)

Ndakisa v Dokose Construction CC and Another (2934/2015) [2015] ZAECGHC 79 (25 August 2015)

Court

Eastern Cape High Court, Grahamstown

Case number

2934/2015

Judge

Pickering

The court found that Dokose Construction CC is financially distressed but factually solvent, with assets exceeding liabilities and significant equity in immovable property. The applicant provided a sufficient factual foundation for the existence of a reasonable prospect of rescuing the respondent, as required by s 131 of the Companies Act and the Oakdene and Propspec cases. The business rescue practitioner would have options unavailable to the applicant due to current cash flow problems and the provisional liquidation order. The court was satisfied that the application was not an abuse of pro…

Source excerpt

• Business Rescue
• Companies Act 71 Of 2008
• Liquidation Vs Business Rescue
• Reasonable Prospect Standard