South Africa Case Law

Nedbank Limited v Sana Developers (Pty) Ltd and Another (2023/080710)

Nedbank Limited v Sana Developers (Pty) Ltd and Another (2023/080710) [2024] ZAGPJHC 1087 (23 October 2024)

Court

South Gauteng High Court, Johannesburg

Case number

2023/080710

Judge

Siwendu

The court found that Sana Developers failed to meet the jurisdictional requirement of reasonable prospects for rescue. The business rescue plan was generic, lacked detail, and relied on assets over which Nedbank held security. The practitioner failed to comply with statutory timelines and requirements, and the purported suspension of Nedbank's rights was impermissible. Nedbank, as the majority creditor and judgment holder, was entitled to enforce its rights. The only viable means to settle the debt was liquidation, not business rescue. The court dismissed the jurisdictional challenge and foun…

Source excerpt

• Business Rescue
• Companies Act 71 Of 2008
• Secured Creditor Rights
• Liquidation Proceedings
• Condonation Of Late Filing

Main Street 1613 (RF) and Others v Solar Capital Orange (RF) Proprietary Limited and Others (56709/2021)

Main Street 1613 (RF) and Others v Solar Capital Orange (RF) Proprietary Limited and Others (56709/2021) [2023] ZAGPJHC 109 (25 January 2023)

Court

South Gauteng High Court, Johannesburg

Case number

56709/2021

Judge

ML Senyatsi

The court held that an order may be executed pending leave to appeal under section 18, finding exceptional circumstances and no irreparable harm to respondents.

• Execution Pending Appeal
• General Notarial Bond
• Irreparable Harm
• Exceptional Circumstances
• Secured Creditor Rights
• Execution-pending-appeal

Engen Petroleum Ltd v Flotank Transport (Pty) Ltd (876/2020)

Engen Petroleum Ltd v Flotank Transport (Pty) Ltd (876/2020) [2022] ZASCA 98 (21 June 2022)

Court

Supreme Court of Appeal

Case number

876/2020

Judges

Maya, Zondi, Makgoka, Meyer, Savage

The Supreme Court of Appeal held that the 2014 cession was an out-and-out cession, not a pledge, and upheld Engen’s claim against Flotank.

• Cession In Securitatem Debiti
• Out And Out Cession
• Interpretation Of Contracts
• Liquidation Effects
• Secured Creditor Rights
• Cession-in-securitatem-debiti

Alert Steel (Pty) Ltd v Mercantile Bank Ltd (165/21)

Alert Steel (Pty) Ltd v Mercantile Bank Ltd (165/21) [2022] ZASCA 96 (21 June 2022)

Court

Supreme Court of Appeal

Case number

165/21

Judges

Van der Merwe, Molemela, Schippers, Musi, Matojane

The Supreme Court of Appeal dismissed a liquidator’s claim to recover sale proceeds paid to a secured creditor, holding that enrichment was not proved.

• Condictio Indebiti
• Condictio Sine Causa
• Secured Creditor Rights
• Liquidation Distribution
• Unjustified Enrichment
• Unjustified-enrichment

Standard Bank of South Africa Limited v Marais (884/21)

Standard Bank of South Africa Limited v Marais (884/21) [2022] ZAGPPHC 134 (14 March 2022)

Court

North Gauteng High Court, Pretoria

Case number

884/21

Judge

E van der Schyff

Final sequestration was refused because the court was not satisfied that it would be to the advantage of creditors at that stage.

• Final Sequestration
• Advantage To Creditors
• Acts Of Insolvency
• Secured Creditor Rights
• Balance Of Probabilities
• Final-sequestration

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…

Source excerpt

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

Standard Bank of SA Ltd v National Director of Public Prosecutions and Others, In Re: National Director of Public Prosecutions v Mudlauzi and Others (15403/2014)

Standard Bank of SA Ltd v National Director of Public Prosecutions and Others, In Re: National Director of Public Prosecutions v Mudlauzi and Others (15403/2014) [2020] ZAWCHC 5; 2020 (2) SACR 169 (WCC); 2021 (3) SA 228 (WCC) (4 February 2020)

Court

Western Cape High Court, Cape Town

Case number

15403/2014

Judge

Bozalek

The Court held that while Standard Bank has a direct and substantial interest in the assets subject to the restraint order, POCA does not provide a mechanism for the partial discharge of a final restraint order in favour of a creditor. Section 28 of POCA only allows for variation or rescission of surrender orders, not the restraint order itself. The High Court's powers to vary or rescind restraint orders are strictly limited by POCA and do not extend to the relief sought by the applicant. The applicant's reliance on the curator bonis's report and its secured creditor status does not entitle i…

Source excerpt

• Restraint Order
• Intervention Application
• Prevention Of Organised Crime Act
• Secured Creditor Rights

Jackson v Louw N.O and Another (CA&R 149/17)

Jackson v Louw N.O and Another (CA&R 149/17) [2018] ZAECGHC 141; [2019] 2 All SA 145 (ECG) (13 December 2018)

Court

Eastern Cape High Court, Grahamstown

Case number

CA&R 149/17

Judges

D Van Zyl, J E Smith, G H Bloem

The court held that the agreements regarding the livestock and equipment constituted voidable preferences under section 29 of the Insolvency Act. The Trust was the owner of the heifers and younger animals, and the equipment, at the time of disposition. The surrender of these assets to the appellant was not in the ordinary course of business, but rather arose from the Trust's insolvency and inability to meet its obligations. The evidence did not support a finding of collusion or fraudulent intent under section 31. The trial court's order was set aside and replaced with an order setting aside o…

Source excerpt

• Insolvency Act
• Voidable Preference
• Collusive Dealing
• Secured Creditor Rights
• Ordinary Course Of Business
• Statutory Pledge

Absa Bank Limited v Indwe Project Managers CC and Others (CA128/2016)

Absa Bank Limited v Indwe Project Managers CC and Others (CA128/2016) [2017] ZAECGHC 125 (12 December 2017)

Court

Eastern Cape High Court, Grahamstown

Case number

CA128/2016

Judges

J.D. Pickering, N.P. Jaji

The High Court upheld Absa’s appeal, setting aside a magistrate’s stay of execution because Indwe had an alternative remedy and no clear right to an interdict.

• Stay Of Execution
• Interdict
• Liquidation Proceedings
• Secured Creditor Rights
• Stay-of-execution
• Interdicts

Kransfontein Beleggings (Pty) Ltd v Corlink Twenty Five (Pty) Ltd and Others (624/2016)

Kransfontein Beleggings (Pty) Ltd v Corlink Twenty Five (Pty) Ltd and Others (624/2016) [2017] ZASCA 131 (29 September 2017)

Court

Supreme Court of Appeal

Case number

624/2016

Judges

Lewis, Bosielo, Saldulker, Mokgohloa, Rogers

The Supreme Court of Appeal held that the non-joinder of creditors with a direct and substantial interest in the business rescue plan was fatal to the relief sought by the applicant. The relief, even as amended, would affect the rights of all concurrent creditors by reducing the dividend payable to them. The court further held that it has no power to partially set aside and amend an adopted business rescue plan to alter its operation in relation to one or more creditors; such changes must be considered and voted on by all creditors in accordance with the Companies Act. The applicant failed to…

Source excerpt

• Business Rescue
• Non Joinder
• Secured Creditor Rights
• Companies Act
• Creditors Meeting
• Business Rescue Plan