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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

Case Number: 12897/2018

NOT REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

REVISED.

13/4/2018

In the matter between:

JOHAN LOUIS KLOPPER N.O                                                                       First Applicant

KURT ROBERT KNOOP N.O                                                                    Second Applicant

JUANITO MARTIN DAMONS N.O                                                                 Third Applicant

KGASHANE CHRISTOPHER MONYELA N.O                                            Fourth Applicant

And

RONICA RAGAVAN                                                                                    First Respondent

RESHMA MOOPANAR                                                                         Second Respondent

VIDYA MUDALIAR                                                                                    Third Respondent

PUSHPAVENI UGESHNI GOVENDER                                                   Fourth Respondent

ASHU CWALA                                                                                            Fifth Respondent

GEORGE PETER VAN DER MERWE                                                       Sixth Respondent

MDUDUZA JOSEPH                                                                            Seventh Respondent

SALIM AZIZ ESSA                                                                                  Eighth Respondent

JUDGMENT

FISHER J:

[1] This matter came before me in the urgent court on Tuesday 10 April 2018. The first applicant is the joint business rescue practitioner of Islandsite investments 80 (Pty)  Ltd (In business rescue) (“Islandsite”); Koornfontein Mines (Pty) Ltd (In business rescue) (“Koornfontein”); Optimum Coal Mines (Pty) Ltd (In business rescue) (“Optimum Mines”); Shiva Uranium (Pty) Ltd (business rescue) (“Shiva”); Tegeta Exploraton and Resources (Pty) Ltd (In business rescue) (“Tegeta”) and VR Laser Services (In business rescue) (“VR Laser”).

[2] The second applicant is the joint business rescue practitioner of Islandsite, Koornfontein, Optimum mines, Shiva, Tegeta, VR Laser and the sole business rescue practitioner of Optimum Coal Terminal (Pty) Ltd (In business rescue) (“Optimum Terminal”) and Confident Concepts (Pty) Ltd (In business rescue) (“Confident Concepts”).

[3] The third and fourth applicants are the joint business practitioners of Optimum Mines and Koornfontein.The fourth applicant is the joint business rescue practitioner of Optimum Mines and Koornfontein.

[4] The respondents are variously those controlling and managing these entities. Some are directors of various of the entities and some are in management roles.  These business rescue entities (“the rescue entities”) are controlled and managed centrally by the respondents operating from shared offices situated at Graystone Ridge Office Park, Block A, Lower Ground at 144 Katherine Street sandton ( “the premises”). This is the head office of all the rescue entities. It is also the head office of Oakbay Investments (Pty) Ltd (“Oakbay”) which is the holding company for a group of companies that include the rescue entities.

[5] The premises is occupied by the pre-existing management of the rescue entities and their business affairs are, to a large extent, interwoven and centrally managed. The applicants have facilitated the intended rehabilitation of the rescue entities from the premises and this has led to the need for them and their agents to spend a large amount of time at the premises.

[6] An impasse has now arisen between the applicants and the respondents in relation to their attendance at the premises.

[7] The applicants claim that they are being frustrated in the carrying out of their duties as business rescue practitioners by the respondents in that they have been refused access to the premises and are thus not properly able to perform their statutory duties and functions. They seek an order:

1. Interdicting and restraining the respondents from obstructing and/or refusing the applicants or their nominated agents access to the premises, situated at Graystone Ridge Office Park, Block A, Lower Ground, 144 Katherine Street, Sandton, Johannesburg, Gauteng (“the premises”).

2. Directing the respondents, forthwith, to provide and to continue providing, the applicants and their nominated agents with unrestricted access to the premises.

3. Directing the respondents forthwith to co-operates with and assist the applicants and their nominated agents in the performance of their duties as the appointed business rescue practitioners of;

3.1. Islandsite investments 80 (Pty) Ltd (In business rescue);

3.2. Koornfontein Mines (Pty) Ltd (In business rescue);

3.3. Optimum Coal Mines (Pty) Ltd (In business rescue);

3.4. Shiva Uranium (Pty) Ltd (business rescue);

3.5. Tegeta Exploraton and Resources (Pty) Ltd (In business rescue);

3.6. VR Laser Services (Pty) Ltd (In business rescue);

3.7. Confident Concepts (Pty) Ltd (In business rescue) and

3.8. Optimum Coal Terminal (Pty) Ltd (In business rescue)

As required by chapter VI of the Companies Act, 2008.

[8] Relevant documentation, including invoices, financial information and management accounts, human resources records (including functions of salaries and wages) are processed by staff and management at the premises and all significant operational and executive decisions are taken at the premises, including prioritizing of critical payments. Meetings between the business rescue practitioners and existing management are required to be held at the premises almost on a daily basis.

[9] Since 06 April 2018, the respondents have refused to allow access to the premises to the applicant save by appointment. Furthermore it is required that they make written requests for documents and the like from management. They tender such access and co-operation only to this extent, which they suggest is reasonable in the circumstances.

[10] The main compliant of the respondents is that associated companies in the Oakbay Group, also run their operations from the premises and that their right to privacy is compromised if the applicants and their agents and representatives have access to the property when they deem it appropriate and without prior arrangement. The point is made that there is litigation pending between the applicants or at least some of them and the respondents or at least some of them – and that this makes the access to the premises without prior arrangement more problematic because there may be privileged discussions undertaken in boardrooms or even corridors which the business rescue practitioners or their agents may overhear.

[11] The point of departure is thus the nature and extent of the access to the business premises which the business rescue practitioner should be allowed to exercise.  The applicants state that they need the level of access which they currently enjoy for the purposes of carrying out their functions. They state further that they are responsible and professional in the manner in which they conduct themselves in the pursuit of their duties and functions at the property and otherwise.

[12] Indeed, aside from the fact that the respondents appear to have formed the view that the applicants presence is invasive and inconvenient to them and to members and affiliates of the Oakbay Group, there is no allegation of any substance that suggests any impropriety in the manner in which the applicants or their agents or representatives have comported themselves when present at the premises.  The respondents have gone as far as to suggest that these members and affiliates of the Oakbay Group should be joined in this dispute. They set themselves up as the purported protectors of the “privacy rights” of these companies. Clearly, no case is made out for the direct and substantial interest which would be needed in relation to a non- joinder defence.

[13] In terms of the Companies Act 71 0f 2008 (“the Act”) the office of business rescue practitioner is a position that is designed by the Act to accommodate professionals that are active in the legal, accounting and business management spheres or are, at least, appropriately qualified and licensed by the Companies and Intellectual Property Commission (see: section 138 of the Act).

[14] Section 140(1) provides the business rescue practitioner has full management control of the company, in substitution of the board and the pre-existing management of the company. In terms of section 140(3), during a company’s business rescue proceedings, the practitioner is an officer of the court, and must report to the court in accordance with any applicable rules of, or orders made by the court and has the responsibilities, duties and liabilities of a director of the company. Although, in terms of s 137 (2) (a), directors are obliged to continue to exercise the functions of director these are subject to the authority of the business practitioner. Thus the practitioner must involve himself in the day-to-day management of the company and the total management power and duties fall to the business rescue practitioner - the directors merely retain their position or office as directors and exercise their functions as such.

[15] The business rescue practitioner is held to a high professional and ethical standard by the courts. (see: African Banking Corporation of Botswana Ltd v Kariba Furniture Manufacturers (Pty) Ltd and Others 2015 (5) SA 192 (SCA) para 37). 

[16] These provisions promote the efficient and expeditious rescue of corporate entities (see: Booysen v Jonkheer Boerewynmakery (Pty) Ltd (in business rescue) and another 2017 (4) SA 51 (WCC); [2017] 1 All SA 862 (WCC); Koen and another v Wedgewood Village Golf & Country Estate (Pty) Limited and others 2012 (2) SA 378 (WCC) at para [10] [also reported at  [2012] JOL 29024 (WCC)])

[17] It is clear from these provisions that the business rescue practitioner is enjoined by the tenets of his office to use his professional discretion to determine the manner in which he will carry out his function. If this involves close and regular attendances at the business premises of the company and even “the setting up of shop” at the business premises to oversee these business operations, then this must be done. He has free rein to adopt any management, oversight, and control functions which he thinks appropriate to the carrying out of his duties under the Act.  If he abuses his office he can be removed by the court on application by an interested person.

[18] Thus the applicants have established that they have a clear right to exercise the powers afforded them in terms of the Act.  They have established, furthermore, that the applicants are interfering with this right; and that they have no other remedy but to seek the relief in terms of the notice of motion.  Indeed they are obliged to take whatever steps necessary to carry out their obligations and powers under the Act.

[19] It was sought on behalf of the applicants that I order costs on a punitive scale.  I agree with counsel for the applicants that the application should not have been necessary. That the respondents have opposed the application suggests a vexatiousness which is such that it should attract the court’s censure in the form of punitive costs.

[20] I thus make the following order:

1. This matter is urgent.

2. The respondents are interdicted from obstructing and/or refusing the applicants or their nominated agents, access to the premises situated at Graystone Ridge Office Park, Block A, Lower Ground, 144 Katherine Street, Sandton, Johannesburg, Gauteng (“the premises”).

3. The respondents are directed to provide and to continue providing the applicants and their nominated agents with unrestricted access to the premises.

4. The respondents are directed to co-operates with and assist the applicants and their nominated agents in the performance of their duties as the appointed business rescue practitioners of:

4.1. Islandsite investments 80 (Pty) Ltd (In business rescue);

4.2. Koornfontein Mines (Pty) Ltd (In business rescue);

4.3. Optimum Coal Mines (Pty) Ltd (In business rescue);

4.4. Shiva Uranium (Pty) Ltd (business rescue);

4.5. Tegeta Exploraton and Resources (Pty) Ltd (In business rescue);

4.6. VR Laser Services (Pty) Ltd (In business rescue);

4.7. Confident Concepts (Pty) Ltd (In business rescue) and

4.8. Optimum Coal Terminal (Pty) Ltd (In business rescue) as required by chapter VI of the Companies Act, 2008.

5. The first to fourth respondents are to pay the costs of this application on the attorney-client scale, jointly and severally the one paying the other to be absolved.

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 FISHER J

HIGH COURT JUDGE

GAUTENG LOCAL DIVISION

 

Date of Hearing:   10 April 2018

Judgment Delivered:  13 April 2018

 

APPEARANCES:

For the Applicants:  Adv P Stais SC Instructed by Smit Sewgoolam Inc Attorneys.

For the Respondents:  Adv J Myburgh Instructed by Gattoo Attorneys.

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