COMPANY

Facts and issue: A rule nisi was granted at the instance of Business Partners Limited (BPL), placing the respondent in provisional liquidation. The rule was not made final on the return date because this application, being an application for business rescue in terms of the provisions of s 131(1) of the Companies Act 71 of 2008, was brought by the applicant. The applicant seeks an order placing the respondent in business rescue proceedings and an order that a registered business rescue practitioner be appointed as the business rescue practitioner to the respondent.

Discussion: BPL asserts that the applicant has told a story in support of its application that is fundamentally untrue in all its component parts. There is no prospect of rescue, for there is nothing to rescue. BPL states that the allegation that only 17 of the respondent’s assets were repossessed by Cape Finance is false. All the respondent’s assets were repossessed by Cape Finance, not just 17 of those assets. The respondent agreed to the voluntary surrender of all its assets and signed a written agreement with Cape Finance to that effect. That agreement does what BPL says it does. It identifies 30 assets that includes horses and trailers. All of them are to be voluntarily surrendered to Cape Finance by the respondent. There is no suggestion that only 17 of those assets are to be dealt with in this fashion. The voluntary surrender agreement was not disclosed by the applicant, but by BPL. It ought to have been disclosed by the applicant. The applicant’s version that only 17 assets were repossessed is palpably untrue in the light of the undeniable written agreement to surrender all the assets. The entire basis of the application is thereby undermined, for it is predicated upon a falsehood.

Findings: The suggestion that the respondent is ‘eminently capable’ of being rescued is heavily criticised by BPL. The obvious criticism is that the respondent continues to unlawfully possess assets that it agreed to surrender. Those assets must be surrendered. However, without any assets whatsoever how can the respondent function? What can it use to fulfil the three contracts that it claims to have? The applicant has provided no particularity as to how the respondent will be rescued or how it proposes to repay its debts to its creditors. The applicant is obliged to give notice in terms of s 131(2)(a) and (b) of the Act to the respondent, the Companies and Intellectual Property Commission and to all affected persons. There is no such proof of such notice having been given. The court finds that the application is not genuine and bona fide.

Order: The applicant’s business rescue application is dismissed. The suspension of the liquidation proceedings of the respondent is consequently lifted.

Facts: The Deputy CEO of the NSPCA, Kotze, addressed a letter to Valla (the then Chairperson), Blockley (the then Vice Chairperson), Smit (Treasurer), Storbeck (Secretary), Niemann-Greatorex ( then a Committee member) and Pienaar (Committee member) of the Tshwane Society calling upon such persons to remedy their failure to provide the NSPCA with its audited financial statements for the 2022-2023 financial year within 30 days. During June 2024, the respondent appointed designated members to the Tshwane SPCA Management Committee, assuming control over the affairs and day to day management of the Society. Ever since the designation of the NSPCA, the Board and Meredith’s representatives to the Management Committee, the directors of the Tshwane SPCA, NPC, have been denied access to the premises, stripped of their email access and prevented from performing their oversight functions as directors of the Tshwane SPCA. Smit was removed as Treasurer, effectively making it impossible for him to compile and complete the required financial statements. Niemann-Greatorex was also removed as the Chairperson of the Management Committee and placed in the Fundraising and Events Portfolio, thus preventing her, as one of the directors of the Tshwane SPCA, NPC, from participating in management decisions. By excluding the two directors from key positions, the NSPCA has effectively denied the Tshwane SPCA, NPC the protection afforded to it under the Companies Act.

Application: This is an application brought by the SPCA, Tshwane, a non-profit company (NPC) registered in terms of section 13 of the Companies Act 71 of 2008 and a registered Society in terms of Section 8 of the Societies for the Prevention of Cruelty to Animals Act 169 of 1993 (SPCA Act). The applicants seek an order by way of urgency that the respondents be interdicted against denying the applicant’s directors access to the premises.

Discussion: The placement of designated members on the Management Committee of the Tshwane SPCA has been designed to enable the NSPCA to gain control over the R9 million donation made to the Tshwane SPCA. Amendments to the Tshwane SPCA Constitution may only be allowed if approved by the NSPCA by two-thirds of the members present entitled to vote at either a Special or General Meeting of the NSPCA. Having “purportedly” secured the wide powers under the Constitution, Neumann-Greatorex received correspondence from Peacock informing her that committee members need to notify him in advance in order to access the Tshwane Society’s premises. The applicant describes the respondents’ conduct as a hostile takeover, a coup d’etat and allege that they are acting mala fide and for ulterior motives. The email trail demonstrates that since assuming control of the Tshwane SPCA, the NSPCA has frustrated the attempts made by Smit to ensure that Wright was able to finalise the Audited Financial Statements for the 2023 financial Year. In so acting, the NSPCA has rendered it impossible for Smit to ensure that the Tshwane SPCA NPC complies with its obligations under the Companies Act and the Tshwane Society from complying with its obligations under the SPCA Act and the Rules.

Findings: The NSPCA has acted in bad faith in continuing to rely on the failure by Smit to produce the financial statements as a basis for assuming control over the affairs of the Tshwane Society. The Tshwane SPCA is obliged to produce audited Financial Statements on an annual basis, which requires a company to prepare annual financial statements within six months after the end of its financial year. The financial year of the Tshwane SPCA, NPC, elapsed in July 2024; this notwithstanding neither the 2024 nor the 2022/2023 financial statements have been finalised. The applicant argues that it will not be possible to produce the required audit unless the court orders the respondents and their delegated representatives to grant the directors of the Tshwane SPCA, NPC access to the premises. Without the audited statements, the applicant argues that it will not be able to account to its donors regarding the use of the funds donated. The court finds that the applicant has made out a sufficient case for the relief sought, subject to certain amendments which it deems appropriate.

Order: The respondents are directed to allow the applicant’s directors access to the applicants’ premises. The respondents are directed to allow the directors of the applicant to continue with their oversight roles as directors of the applicant. (See para [146] for the complete order.)

WENTZEL AJ

Facts: The applicant (De Sa Miranda) and the second respondent (De Jesus) acquired the first respondent (True Ruby) as a shelf corporation in 2012 for the purposes of holding a property in Voortrekker Road, Parow (the Property). De Jesus procured a 78% share in True Ruby, with De Sa Miranda holding the remaining members’ interest (22%). The two are related by marriage (the applicant is married to the second respondent’s sister) and at the time had a very friendly relationship, in the course of which De Sa Miranda had sold De Jesus a convenience store and bakery business known as La Ponte Rose, which was the anchor tenant of the Property. For various reasons, their relationship has deteriorated appreciably. De Sa Miranda has also effectively been excluded from, and until recently denied knowledge of, the operations of True Ruby.

Application: After various interactions and ultimatums, the applicant decided to launch an application seeking to wind up True Ruby on just and equitable grounds; alternatively on the basis that the corporation was unable to pay its debts (or, in other words, was insolvent). The alternative winding-up ground, which was only ever tentatively advanced, has not been pursued – correctly so, as it has been shown by De Jesus that True Ruby can, and has, paid its debts. What must thus be considered is whether it would be just and equitable to wind up True Ruby, notwithstanding its solvency.

Discussion: As the winding up application has to be premised on the basis that True Ruby is a solvent corporation, the application is brought in terms of section 67 of the Close Corporations Act 69 of 1984 (the CC Act), read with section 81(1)(d)(iii) of the Companies Act 71 of 2008. The applicant essentially seeks the winding up of True Ruby on the basis that he has justifiably lost all trust and confidence in the second respondent, as a result of inter alia De Jesus’s failure to provide him with necessary information and documentation about True Ruby, or even answer his calls or queries, over an extended period of time; De Jesus’s failure to attend properly to the tax and accounting obligations of True Ruby; De Jesus’s failure to pay the applicant his share of True Ruby’s income for more than a decade; and De Jesus’s recent assertions – repeated in his answering affidavit – that the applicant was no longer entitled to be a member of the close corporation.

Findings and order: The balance of probabilities is strongly in favour of the applicant’s version; or, put differently, the applicant’s version is considerably more plausible than the second respondent’s. On the balance of probabilities, the applicant has made out a case for the just and equitable winding up of True Ruby. True Ruby Trading 1035 CC is placed under a provisional order of winding up in the hands of the Master of the High Court.

Facts and issue: Four applications for liquidations were heard by the High Court. They were launched by Agricultural against each of the first four appellants: Superior, Evergreen, Foods and Barvale. Agricultural founded its application on the provisions of s 344(f) read with s 345(1)(a) of the Companies Act 61 of 1973 (the old Act). It was not seriously disputed that the requisite demand was served on the four appellants nor that they had not paid what was demanded. The only issue, which was and is contested, was whether Agricultural was a creditor of the appellants. The indebtedness of each appellant to Agricultural was said to arise from services provided by it pursuant to service level agreements. Provisional winding up orders were granted against each appellant.

Discussion: There was no basis on which the High Court found that the locus standi of Agricultural to apply for the liquidation of Superior was established. Agricultural bore the onus to prove indebtedness to it by Superior on a balance of probabilities. The High Court erred in requiring proof on a balance of probabilities by Superior that it was not indebted to Agricultural. That was simply wrong in law. That being the case, the deeming provision did not come into effect and the requirements of s 345(1)(a) were not met. This means ineluctably that the prospects of success in the appeal of Superior are overwhelming. In the result, condonation must be granted to Superior and the appeal reinstated. The matter was argued on the basis that, if condonation was granted, the appeal should be dealt with. Since Agricultural had no locus standi to bring the application, the appeal of Superior must succeed with costs. Evergreen did not contest the evidence that it was not trading and that no assets could be located. The CIPC has commenced deregistration of Evergreen as provided for in s 82(3)(a)(i) of the new Act. Since Evergreen is dormant and has no substratum, it is just and equitable that it be finally wound up. The High Court was correct to so order. Evergreen accordingly has no prospects of success.

Findings: In breach of s 363(2) of the old Act, the director of Foods, Mr Battles, failed to provide the provisional liquidators with any information or documents relating to Foods, including the lease. He resides outside South Africa. He testified that Foods had not received any rentals from the lease. This begs the question whether the lease is being enforced. There is no evidence that Foods is trading at all and no indication that it has an office or presence in South Africa from which to do so. It would be just and equitable for Foods to be finally wound up. Accordingly, the final winding up order must stand, despite the erroneous reasoning of the High Court in arriving at such conclusion. Barvale owned an immovable property at the time the liquidation application was launched. Despite this, it purported to sell that property. That constituted a sale during liquidation which is prohibited under the insolvency laws. Not only was there a failure to comply with s 112 of the new Act, but, when the provisional liquidators requested payment of the proceeds of the sale, the director failed to comply or to provide any information at all concerning Barvale. The final winding up order was appropriate and should stand.

Order: The appeal is upheld. The order of the High Court is set aside and substituted with an order discharging the provisional winding up order with the costs to be paid jointly and severally by the first and second applicants.

Facts and issue: The issue in this appeal is whether the void payments which were made by the company (in liquidation) to the appellant, Macneil Plastics, after the commencement of liquidation proceedings were validated by the subsequent order placing the company in business rescue in terms of s 131(6) of the Companies Act 71 of 2008. Macneil Plastics was one of the company’s creditors and the payments in question were void in terms of s 341(2) of the Companies Act 61 of 1973 (the old Companies Act) as they were made after the commencement of the liquidation of the company.

Discussion: The company’s creditor issued an application for the winding-up of the company out of the High Court on the basis that it was unable to pay its creditors. The High Court granted the application placing the company under final winding-up. The first, second and third respondents were appointed by the Master of the High Court as joint liquidators of the company. At a date after it had been finally liquidated, the company paid a total amount of R407,010.30 to Macneil Plastics. The liquidators brought an application in the High Court in which they challenged the lawfulness of the payments in question. Briefly, the liquidators sought an order declaring the relevant payments void in terms of s 341(2) of the old Companies Act and ordering Macneil Plastics to repay the amounts concerned to the liquidators together with interest thereon. The repayment was sought on the basis that the relevant payments were made to Macneil Plastics after the commencement of the winding-up of the company within the meaning of s 348 of the old Companies Act and thus while it was finally wound-up.

Findings: An application for business rescue proceedings does not terminate the office of provisional liquidators, nor does it result in the assets and management of the company in liquidation re-vesting in the directors of the company in provisional liquidation. It is the process of winding-up and not the legal consequences of a winding-up order that is suspended. The winding-up order is still in place. At the time the payments to Macneil Plastics were made, they were void as they were made after the winding-up of the company. Business rescue is dealt with in Chapter 6 of the new Companies Act. There is no provision in that chapter which provides that a void payment is somehow validated once a company in liquidation is placed in business rescue. A subsequent placing of the Company in business rescue does not reverse the voidness of the dispositions.

Order: The appeal is dismissed with costs.

Facts and issue: This is an opposed urgent application by the first applicant (Mr Spanogiannis) and the second applicant (Finsburey) for the winding up of the respondent (Emgeo) in accordance with the provisions of s 344(f), read with s 345(1)(c) and s 345(1)(a)(i), alternatively, s 344(h) of the Companies Act 61 of 1973, as amended.

Discussion: R22 million was lent and advanced by Finsburey to Emgeo in terms of and pursuant to a written loan agreement concluded between them. This loan enabled Emgeo to purchase and acquire the four properties referred to above, which were subsequently transferred to and registered in the name of Emgeo. It is the applicants’ case that from the outset it was clear that the Joint Venture was a disaster and would not achieve its objectives. It was also apparent that Emgeo was going to default on its first capital repayment on 30 June 2023. This resulted in the parties, during April 2023, entering into a written agreement in terms of which the properties would be sold on auction to settle the loan with a 6% commission of the nett proceeds to be paid to Mr Sinovich for his assistance and the remainder of the proceeds were to be paid to Finsburey. In addition, and as per clause 5 of the said agreement, the shareholders, namely Mr Spanogiannis and the Mathamy Trust were required to pledge their shares to Finsburey in securitatem debiti. The Addendum, according to the applicants, have been breached because none of the payments for August, September, October and November 2024, have been made. Moreover, the share certificates and transfer documents have not been handed over to Finsburey. All of the aforegoing, so it is contended on behalf of the applicants, mean that Emgeo is clearly unable to liquidate its indebtedness to Finsburey, which, in turn, means that Emgeo is factually, commercially and legally insolvent.

Findings: Emgeo is unable to pay its debts as contemplated in terms of s 344(f), read with s 345(1)(c) and 345(1)(a)(i) of the Companies Act, and therefore falls to be wound up. What is more is that there is a clear deadlock between Messrs Sinovich and Spanogiannis, who cannot get along with each other as directors and shareholders. It is thus just and equitable that Emgeo be wound up, within the meaning of s 344(h) of the Act. The application is urgent if regard is had to the history of the dispute between the parties and the failed attempts to resolve those issues between them. The applicants have made out a case for the winding up of Emgeo on an urgent basis and an order to that effect should be granted.

Order: The first respondent be and is placed under final winding up in the hands of the Master of the High Court.

Facts and issue: This is an application for intervention in the main application. The two applicants are erstwhile directors and shareholders of a company called Skincon that is now in liquidation. The respondents allege that they are creditors of Skincon. On that basis they brought the main application in terms of section 360 of the Companies Act, 71 of 2008. That section provides for a creditor or member of a company that is being wound up to apply to inspect its documents.

Discussion: In the main application the respondents refer to two separate lawsuits relevant to the present matter. In the first, Gaffner, a director of SDE, is being sued in his personal capacity from debts arising from the FNB project along with the two applicants, and another person, by a firm called Master Power Technologies. In the second matter a judgment was obtained against Skincon and SDE and a firm called Maine Consulting Pty Ltd. The three are jointly and severally liable for the judgment debt of R6 million. In the main application, the respondents allege that they are creditors of Skincon and thus are entitled to inspect the books of the company, now under the control of the liquidators. The requirements for an intervention application are that the party seeking intervention must meet at least two minimum requirements, it has a direct and substantial interest in the main application; and Its rights would be prejudicially affected if it were not allowed to intervene.

Findings: The applicants’ shareholding in Skincon is a financial interest. It does not give rise to a direct and substantial interest in the subject matter of the main matter, otherwise each shareholder would always have such an interest. Nor does the fact that they are the only shareholders of the company; that goes to the quantity of their interest not its legal nature. The fact that they were directors is also of no moment once the company is in the process of being wound up. But even if they were able to contend for such an interest as being direct and substantial, they fail on the second leg. The applicants are not prejudiced by the outcome of the application. The application is for the right to inspect documents of the company. What the applicants are concerned about is that the respondents will uncover some documents during the inspection, which might encourage the respondents to act against them in some later proceedings. But that is not what is meant by prejudice caused by the order. Those documents exist already. The order does not have any transformative effect on them.

Order: The application is dismissed with costs.

Facts and issue: Business Partners (applicant) is a creditor of Don Mo for a combined amount of R1,961,608.60, together with interests and costs. Business Partners is seeking a provisional winding-up order on grounds that Don Mo is unable to pay its debts as envisaged in section 344 of the Companies Act 61 of 1973, as read with section 345(1)(c) thereof, and it is just and equitable for Don Mo to be wound up as envisaged in section 344(h) of the 1973 Companies Act.

Discussion: There existed an onerous duty on the directors of Don Mo, more specifically its directors, to ensure that Don Mo was registered at all times when they engage in commercial transactions and in litigation. As directors, they are obliged to check the ‘status’ of the corporate entities with the CIPC. The inescapable conclusion is that the directors of Don Mo have clearly flouted their responsibilities in this regard. The directors have attempted to minimise the seriousness of its breach as being of a “technical” nature. The respondent’s contention that Don Mo’s ability to service its debt to Business Partners was not affected by its deregistration cannot be sustained as the deregistration ought to have rendered Don Mo inoperative. The fact that they continued to operate as if it was “business as usual” is worrisome and indicative of the fact that the directors did not have their fingers on the pulse proverbially speaking. This conclusion is further underscored by the fact that there is an apparent scuffling to get the financial affairs in order which no doubt would have the effect of shareholders losing confidence in the manner in which the business affairs of Don Mo are being conducted.

Findings: The directors’ misconduct is such as to justify that degree of loss of confidence as the directors have failed to carry out their duties in accordance with the statutory requirements. The cumulative effect of the factors mentioned justifies the contention that the directors breached their fiduciary duties which resulted in a total loss of confidence. Business Partners have demonstrated a justifiable lack of confidence in the conduct and management of Don Mo’s affairs. The loss of confidence is of such a degree that there is no reasonable hope of another remedy which would make possible co-operation in future. The applicant succeeded in showing a prima facie case for a provisional winding-up order to be granted. Don Mo is unable to pay its debts as envisaged in section 344 of the Companies Act, as read with section 345(1)(c) thereof, and it is just and equitable for Don Mo to be wound up as envisaged in section 344(h) of the 1973 Companies Act.

Order: The eighth respondent is placed under provisional liquidation.

Facts and issue: The applicant seeks an order interdicting the respondent from proceeding with an application for its liquidation in terms of section 345 of the Companies Act 71 of 2008, pending the final determination of an action which the applicant has instituted against the respondent for damages. The respondent has opposed the application both on the grounds of urgency and the merits. The respondent was in possession of 3714 batteries at a warehouse. These were goods that the applicant had imported on behalf of a third party and which it had contracted the respondent to clear. 792 of the batteries were stolen from the respondent’s warehouse. Each battery it alleges cost $1000 to replace. Its total loss was R15,170,606.

Discussion: The applicant holds the respondent liable for the above amount both in contract and in delict. The respondent is claiming an amount of R13,503,916 from the applicant for its freight forwarding services which remains unpaid. The applicant does not dispute this claim. Rather it claims that its damages claim, which exceeds this amount, means that it does not owe the respondent but instead is owed by it the difference between the two amounts. Given the negotiations it would have been premature for the applicant to have come to court earlier. Nor did anything immediate happen after the July 2024 letter. The respondent has not acted with alacrity and the applicant could reasonably have considered it was not planning to go ahead yet with a winding up application. There is no suggestion that the respondent has been prejudiced by the time periods. The matter is urgent. If the applicant is correct its claim for damages exceeds the amount the respondent is claiming from it. If that is the case, there are two implications. First that the applicant has at least a bona fide defence to the claim. Second and the more signification implication is that the respondent has no basis to rely on section 345 given that it would not have a claim in excess of R100, a jurisdictional fact for the reliance on that section.

Findings: The applicant was not dilatory in asserting its claim, it started negotiations as soon as theft was known, it has attached its particulars of claim for the damages claim and it is trading and has demonstrated future prospects which are significant. Nor is the claim a classically illiquid claim. At worst applying these factors to the applicant it may be criticised for not establishing that it is solvent. But it has put up evidence, at worst for it, it is just not verifiable, but this must be balanced against its future prospects in the market which are strong. Moreover, there is another factor to take into account, its counter claim if established would exceed the respondent’s claim and hence result in a net credit to the applicant. On this basis the applicant has established a genuine or bona fide claim. The question of the irreparable damage to the applicant because of the way an application under section 345 can be interpreted in practice by the banking sector, satisfies the requirement of irreparable harm. The applicant has no other remedy.

Order: The respondent is interdicted and restrained from instituting proceedings for the winding up of the applicant pending the final determination of the dispute or disputes between the parties.

Facts and issue: This is an opposed urgent application in terms of section 61(12) of the Companies Act 71 of 2008 for an order requiring the board of directors of Capeco to convene a meeting of shareholders to consider a motion to remove the third and fourth respondents as directors. The question is what are the requirements for a statutorily compliant notice calling a shareholders’ meeting pursuant to a demand in terms of section 61(3) of the Act. More specifically whether the affected directors are entitled to be provided with the reasons or grounds for their proposed removal. The applicants are the shareholders of Capeco and the second to fourth respondents its incumbent directors.

Discussion: The position is that the third and fourth respondents, who constitute a majority, is not presently willing to call the meeting. There is accordingly no basis for the shareholders to intervene and assume the power of the board to call a meeting on the basis that the board is not effective or that the directors cannot or will not exercise their powers to call the meeting. The third and fourth respondents accepted that the directors are under a duty to call the meeting but argue that they are not obliged to do so until their requirements have been complied with. The only available avenue for the shareholders is to seek relief in terms of section 61(12) of the Act where they disagree with the position adopted by the third and fourth respondents. Any meeting which is unilaterally convened by them to remove the third and fourth respondents, would be unlawful. There is no merit in the contention that the applicants could have relied upon the right of the shareholders to call a shareholders’ meeting. The application is sufficiently urgent to justify the applicants’ non-compliance with the rules and the application should be entertained on that basis.

Findings: The respondents (who were elected by the applicants) are not entitled to reasons or grounds for the proposed resolutions for their removal as directors. The absence of a statement of reasons or of sufficient information or explanatory material accompanying the resolutions, do not preclude the respondents from issuing a notice or calling the meeting demanded by the applicants. The sufficiency of the resolutions does not arise at this stage. It does not affect the duty of the respondents to call the meeting. As things stand and regardless of whether they are entitled to reasons, the respondents are in a position reasonably to prepare for their presentations at the meeting. The applicants have provided the respondents with sufficiently clear and specified reasons for their intended removal. There has been a fundamental breach of trust between the parties and the respondents no longer enjoy the support of the applicants who constitute the entire body of shareholders of Capeco.

Order: The respondents are directed, within 5 days after receipt of the resolutions, to give notice of a meeting of the shareholders to each of the applicants, to be held at the offices of the first respondent on a date no later than 10 business days after the date of delivery of such notice, for consideration of the resolutions.

Facts: Brick Art Construction (Pty) Ltd (BAC) was placed in business rescue in 2019 but in 2020 the business rescue practitioner commenced proceedings for winding up and a provisional order of liquidation was granted. The provisional liquidators were appointed and the final winding up order was granted. The first meeting of creditors were held later in 2020 on which date the final liquidators were also appointed. In accordance with section 384(2) of the Companies Act 61 of 1973, the Master may reduce or increase the reasonable remuneration that a liquidator should receive for his services, which remuneration is to be taxed on a prescribed tariff.

Application: For the review and setting aside of the decision taken by the Master in terms of section 384(2) of the Companies Act 61 of 1973, to refuse the application to increase the remuneration of the liquidators in a first liquidation and distribution (L&D) account by more than double the prescribed statutory tariff.

Discussion: The applicants assert that the affairs of BAC were complex because: it was a constructor of luxury homes; it held unprofitable yet, uncompleted building contracts that were not profitable to complete; it had at that stage liabilities in excess of R40 million with assets of only approximately R3,6 million; it had about 17 different bank accounts, being one for each building contract as well as separate operational cost related bank accounts. It is alleged that an inordinate amount of time was spent investigating the affairs of BAC from a forensic perspective spanning the pre- and post-business rescue period. The administration of BAC's winding up was undertaken mostly during difficult pandemic lock down conditions. Liquidators, however, cannot do the bidding of major creditors only, and expect to be remunerated with an increased fee for doing so, when that increased fee may operate to the detriment of all creditors, including those that did not make the request for a forensic investigation.

Findings: The Supreme Court of Appeal saw fit to express itself on the nature of applications by liquidators where they challenge their fee and pronounced it to be a self-interest cause. The applicants in casu bring this application in their own personal interests, therefore this application should fail on the ground that they do not have the authority to bring this application, nor the locus standi to do so. Nevertheless, the court proceeds to consider all the grounds upon which the applicants base their challenge. When section 384(2) of the 1973 Companies Act is read with section 151 of the Insolvency Act 24 of 1936, it becomes clear that the court's review powers are limited by the Master's discretion. The court can only interfere with a decision made by the Master if it is "clearly wrong". In applying section 151 of the Insolvency Act, there are no grounds upon which this court can find that the Master's decision was clearly wrong.

Order: The application is dismissed with costs, such costs to be on an attorney and client scale, where scale C is applicable.

ALLIE J

Facts and issue: The applicant is a creditor of Bermine, a company presently in business rescue. The first respondent Barry Urban is its business rescue practitioner (BRP). The applicant states that Urban has taken two years to implement the current business plan which has proved a failure. It is clear from this announcement that the company is no longer trading, has moved from its premises and that Urban is now in a process of winding down the company. Urban apart from defending his actions on the merits also raises several in limine points. The two most pressed in argument were that the application was not urgent and the second that the applicant had failed to get leave of the court in terms of section 133(1) of the Companies Act 71 of 2008, the latter being the section that deals with a moratorium on claims against the company.

Discussion: It is common cause that the applicant has not got the permission of Urban to bring this action nor has it sought the leave of the court. The issue is whether such permission was needed. The applicant argues that it is not enforcing an action against the company nor seeking relief against any property belonging to the company; its relief is against Urban as the BRP. What is common cause is that the company is no longer trading and that in Urban’s own words in the October announcement, is in the process of being wound down. For this reason, the court assumes in the applicant’s favour that the relief it seeks does not implicate the moratorium. If that is so, then prior consent in terms of section 133(1) from either the BRP or the court was not required. Hence the point in limine must fail.

Findings: The BRP states that the immediate liquidation of the company would result in creditors receiving a zero dividend. If the business rescue process continues creditors will stand to get 15 cents in the rand. The BRP makes no claim to be nursing the company back to health. Rather he makes it clear that he relies on the alternative rationale for business rescue provided for in section 128(1)(b)(iii) of the Act, that if it is not possible for the company to continue in existence on a solvent basis, the business rescue nevertheless results in a better return for creditors or shareholders than would result from the immediate liquidation of the company. Nor is there sufficient evidence to suggest that he is selling assets at below market values. Clearly winding down suggests expedition is required and hence the sales are not being concluded under normal market circumstances. The applicant has not established that Urban as the BRP is acting unlawfully. Accordingly, the applicant has not been able to make out a prima facie right for its relief.

Order: The application is dismissed with costs.