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

Mahomed Mahier Tayob N.O and Another v Standard Bank of South Africa Ltd and Others (078256/2023)

Mahomed Mahier Tayob N.O and Another v Standard Bank of South Africa Ltd and Others (078256/2023) [2024] ZAGPJHC 1158 (14 November 2024)

Court

South Gauteng High Court, Johannesburg

Case number

078256/2023

Judge

Vally

The High Court dismissed an application to set aside creditor votes rejecting a business rescue plan, finding the plan unrealistic, prolonged, and unfair to creditors.

• Business Rescue
• Creditor Voting
• Companies Act 71 Of 2008
• Liquidation Vs Rescue
• Post Commencement Finance
• Business-rescue

Member of the Executive Council: Northern Cape Department of Agriculture, Environmental Affairs, Rural Development and Land Reform v Bester N.O and Others (1793/2022)

Member of the Executive Council: Northern Cape Department of Agriculture, Environmental Affairs, Rural Development and Land Reform v Bester N.O and Others (1793/2022) [2024] ZANCHC 92 (15 April 2024)

Court

Northern Cape High Court, Kimberley

Case number

1793/2022

Judge

Williams

The Department failed to establish on a balance of probabilities that Bester was incompetent or failed to perform his duties as business rescue practitioner under section 139(2)(a) and (b) of the Companies Act. The complaints regarding additional tea supply agreements, prejudicial commercial terms, unaffordable loans, and failure to report were either unsubstantiated, based on hearsay, or adequately explained by Bester. The amended business rescue plan was validly adopted by unanimous creditor vote, as permitted by the plan itself. The failure to report to court and misunderstanding of contra…

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• Business Rescue
• Removal Of Business Rescue Practitioner
• Companies Act
• Costs Order
• Delinquent Director
• Post Commencement Finance

De Wet & Others v Opis Advisory (Pty) Limited & Others (2020-14081)

De Wet & Others v Opis Advisory (Pty) Limited & Others (2020-14081) [2024] ZAGPJHC 174 (27 February 2024)

Court

South Gauteng High Court, Johannesburg

Case number

2020-14081

Judge

Adams

The court found that the payment of R3 million by Bapo Freight after the commencement of liquidation proceedings was a disposition falling squarely within the ambit of section 341(2) of the Companies Act 61 of 1973. The respondents' version that the funds were ring-fenced and not intended to become Bapo Freight's property was rejected as far-fetched and unsupported by evidence. The payment was not made to a creditor but to the business rescue practitioner and his company, and no valid agreement or ring-fencing was established. Even if the payment was considered post-commencement finance, it w…

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• Business Rescue
• Void Disposition
• Companies Act Section 341
• Post Commencement Finance
• Liquidation Proceedings

Pruta Securities (Jersey) Limited v Roper N.O and Others (EL1522/2023)

Pruta Securities (Jersey) Limited v Roper N.O and Others (EL1522/2023) [2023] ZAECELLC 31 (24 October 2023)

Court

Eastern Cape High Court, East London Local Court

Case number

EL1522/2023

Judge

T.V Norman

The court held that a post-commencement financier had standing, but upheld objections on non-joinder and non-service, postponing the business rescue dispute.

• Business Rescue
• Joinder Of Parties
• Urgent Interdict
• Post Commencement Finance
• Service Of Process
• Standing Of Creditors

National Empowerment Fund v Fortress Income (Pty) Ltd and Others (Reasons) (2022-060026)

National Empowerment Fund v Fortress Income (Pty) Ltd and Others (Reasons) (2022-060026) [2023] ZAGPJHC 431 (4 May 2023)

Court

South Gauteng High Court, Johannesburg

Case number

2022-060026

Judge

S Yacoob

The High Court stayed execution pending the third respondent’s business rescue, holding the warrant was issued unlawfully during business rescue and awarding costs against the first respondent.

• Business Rescue
• Post Commencement Finance
• Stay Of Execution
• Locus Standi
• Non Joinder
• Business-rescue

Forty Squares (Pty) Ltd and Another v Noris Fresh Produce (Pty) Ltd t/a Golden Harvest and Others (4200/2023)

Forty Squares (Pty) Ltd and Another v Noris Fresh Produce (Pty) Ltd t/a Golden Harvest and Others (4200/2023) [2023] ZAWCHC 78; 2023 (5) SA 249 (WCC) (20 April 2023)

Court

Western Cape High Court, Cape Town

Case number

4200/2023

Judge

P.A.L. Gamble

The court found that the business rescue application was not supported by the major creditors, who collectively held the majority of the company's debt and had stated under oath they would not vote for any rescue plan. Without creditor support, no plan could be adopted, rendering the application futile. The company had no premises, workforce, or reputation, and the proposed post commencement finance was manifestly insufficient relative to the liabilities. The plan's duration was excessively long, and the projected returns were unrealistic. The application was brought hastily and appeared not…

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• Business Rescue
• Companies Act Section 131
• Liquidation Proceedings
• Creditor Opposition
• Post Commencement Finance
• Attorney And Client Costs

Matshazi v Mezepoli Melrose Arch (Pty) Ltd and Another; Nyoni v Mezepoli Nicolway (Pty) Ltd and Another; Moto v Plaka Eastgate Restaurant and Another; Mohsen and Another v Brand Kitchen Hospitality (Pty) Ltd and Another (2020/10556; 2020/10555; 2020/10955; 2020/10956;)

Matshazi v Mezepoli Melrose Arch (Pty) Ltd and Another; Nyoni v Mezepoli Nicolway (Pty) Ltd and Another; Moto v Plaka Eastgate Restaurant and Another; Mohsen and Another v Brand Kitchen Hospitality (Pty) Ltd and Another (2020/10556; 2020/10555; 2020/10955; 2020/10956;) [2020] ZAGPJHC 136; (2021) 42 ILJ 600 (GJ) (3 June 2020)

Court

South Gauteng High Court, Johannesburg

Case number

2020/10556; 2020/10555; 2020/10955; 2020/10956

Judge

Weiner

The court found that the applicants, as employees and creditors, had locus standi to bring the business rescue applications. The respondent companies' reliance on force majeure was rejected, as there was no contractual or legal basis excusing payment obligations to employees or creditors during the lockdown. The companies were found to be financially distressed, having failed to pay salaries and incurred significant losses, with insufficient evidence of solvency or ability to meet debts. The court accepted that post-commencement finance of R4 million was available to support operations during…

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• Business Rescue
• Financial Distress
• Force Majeure
• Post Commencement Finance
• Employee Rights
• Urgent Interdict

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

C Rock (Pty) v H.C Van Wyk Diamonds Ltd and Others (2355/2018)

C Rock (Pty) v H.C Van Wyk Diamonds Ltd and Others (2355/2018) [2018] ZANCHC 91 (7 December 2018)

Court

Northern Cape High Court, Kimberley

Case number

2355/2018

Judge

Williams

The High Court dismissed C Rock’s business rescue application, finding no reasonable prospect of rescue and awarding costs against the applicant.

• Business Rescue
• Provisional Liquidation
• Locus Standi
• Post Commencement Finance
• Creditor Rights
• Mining Rights Transfer