REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 18167/2019

In the matter between:

ANDALUSITE RESOURCES (PTY) LTD	Applicant

and

INVESTEC BANK LIMITED	1st Respondent

FIRST RAND BANK LIMITED t/a RAND MERCHANT
BANK (CORPORATE DIVISION)	2nd Respondent

JUDGMENT

KEIGHTLEY, J:
INTRODUCTION
1.	The applicant in this matter, Andalusite Resources (Pty) Ltd (Andalusite), operates a mine in the Northern Province mining andalusite. It employs 247 employees. It is common cause that in December 2011 Andalusite and the respondent, Investec Bank Limited (Investec) entered into a suite of agreements comprising, among others, a loan agreement, a working capital facility agreement; an account cession agreement (the account cession); and a borrower's shareholder's pledge and cession agreement.

2.	Investec avers that it advanced monies to Andalusite under the first two agreements (the loan agreements), and that the amounts advanced became due and payable on 30 April 2017. To date, the amounts remain outstanding. Investec says that as at 4 April 2019 Andalusite was indebted to it in the amounts of R68 864 187.57; R14 415 867.88 and R34 253 780.21, together with costs, interest and penalty interest.

3.	In April 2019 Investec instituted a money judgment application against Andalusite for payment of the amounts alleged to be due to it under the agreements. On 20 May 2019 Investec advised Andalusite that it was exercising its rights under the account cession. In terms of clause 7 of that agreement, this meant that all rights in and to the deposits into Andalusite's bank account (the bank account) held with the second respondent (RMB) vested in Investec, and Andalusite was prohibited from exercising any rights in and to the deposits. Investec also advised RMB on the same date that it had exercised its rights in terms of the account cession, and that Andalusite was no longer entitled to exercise any rights in and to the bank account. RMB complied with Investee's request, and Andalusite's access to its bank account was effectively curtailed.

4.	On 22 May 2019 Andalusite instituted the first of two related urgent applications in this court. It is common cause that the main focus and purpose of the first urgent application was to secure the release of monies from the bank account to pay staff salaries. However, the relief sought was broader than this, being more or less the same as the relief sought in the present application. I deal with the relief in more detail shortly.

5.	The first urgent application was settled between the parties and an order was made by agreement on 23 May 2019. In that order the court postponed the urgent application sine die. In addition, it provided that:
"2. The First Respondent, without prejudice to its rights and without admitting the Applicant's entitlement thereto will provide the Second Respondent with written confirmation that the net salaries of employees for May 2019, excluding directors of the Applicant, and necessary expenses, in the sum of and not exceeding R3,700 ,000 will be released from the operation of the cession in order for payment by the Applicant of the employees and necessary expenses.
3. The Applicant undertakes to only utilise the RMB account and not to open or operate another bank account."

6.	This was not the end of the matter. The following week Andalusite filed another Notice of Motion for the Further Hearing of the Urgent Application. This is the application presently before me. It seeks, in substance, the same relief as was originally sought, but on the extended basis that it has further ongoing financial obligations to its staff, contractors and suppliers and must make payment to them on an ongoing basis. It avers that it cannot conduct business if it is required to approach Investec every time it requires money for its operations. This is not practical or appropriate. If it does not have access to its funds in the bank account, it cannot pay its creditors, and they would cease providing services. It says that if it stops paying its creditors, it will go out of business, which is in no­ one's interests.

7.	In its founding papers in the urgent proceedings Andalusite aired, for the first time, a defence to Investee's claim based on the loan agreements. I will deal with the defence in more detail shortly. In brief, Andalusite contends that Investee's obligation to advance money under the loan agreements was subject to various conditions precedent, one of which was never met. Accordingly, so the defence proceeds, no enforceable rights and obligations ever took effect under the loan agreements. Although Andalusite does not dispute that it received the amounts advanced from Investec, its case is that Investec cannot recover them under the loan agreements. Instead, Investec will have to rely on the appropriate unjustified enrichment remedy in order to recover the amounts due. Further, and of critical importance to the urgent applications, the account cession is inextricably linked to Andalusite's indebtedness to Investec under the loan agreements. Thus, if there is no such indebtedness, the account cession likewise gives rise to no rights of security over the bank account. Subsequent to the launch of the first urgent application, Andalusite filed an answering affidavit in the money judgment application in which it raised the same defence.

8.	The second urgent application was fully opposed by Investec. The first issue in dispute between the parties was whether Andalusite had complied with the necessary procedure in setting down the second application as a matter of extreme urgency. I first heard the parties on the issue of urgency and made a ruling in this regard before hearing them on the merits application. I gave ex tempore reasons for my ruling on urgency, which are unnecessary to repeat here. In essence, although there was some urgency to the matter, Andalusite had abused the urgent court process by proceeding to set the matter down with the degree of urgency that it did.

9.	This judgment deals with the merits of the second urgent application. In addition, it deals with an application by various employees of Andalusite and the trade union, AMCU, to intervene as applicants in the urgent application. I will deal separately with the intervention application at the end of the judgment.

RELIEF SOUGHT
10.	Andalusite seeks the following substantive relief against Investec:
10.1	An interdict restraining Investec from preventing Andalusite access to the bank account in order to receive funds into and withdraw funds from the account and to transact therein in the ordinary course of Andalusite's business.
10.2	An interdict restraining Investec from enforcing the account cession, and from preventing Andalusite to conduct transactions on the bank account in the ordinary course of its business.
10.3	An order that these interdicts operate as interim orders pending the final outcome of the money judgment application instituted by Investec.

PRELIMINARY ISSUE: INTERIM OR FINAL INTERDICT?
11.	Before I deal with the substance of Andalusite's application for an interdict, I need to deal with a preliminary issue raised by Investec which, if found in its favour, will be dispositive of the application. Investec contends that although the interdict sought by Andalusite is in the form of an interim interdict, it is in effect an application for a final interdict. This being the case, Investec says that I should apply the test applicable to final interdicts. In other words, I must consider whether Andalusite has made out a case that it has a clear right worthy of protection by the interdict, not merely a prima facie right though open to some doubt. In addition, it says I should apply the test laid down in Plascon-Evans for determining any material factual disputes that may arise.

12.	If Investec is correct in this regard, that will be the end of the matter. This is so because Andalusite conceded that it relies solely on establishing a prima facie right as the basis for its relief and that if I find that it must instead establish a clear right, Andalusite will not pass that test.

13.	In its formulation, the interdict appears for all intents and purposes to be an interim interdict pending the determination of the main action, being the money judgment sought by Investec arising out of the loan agreements entered into between the parties. However, Investee's case is that this formulation belies the interdict's true legal nature. It is, in essence, final in effect because if the interdict is granted Andalusite will continue to operate, and make payments and withdrawals from the bank account. In fact, the very purpose of the interdict is to enable it to disburse the funds currently standing to the credit of the account, as well as any funds that will be paid into it in the future, unless and until Investec succeeds in establishing in the main application that the loan agreement, and hence the ancillary account cession agreement, took effect and are enforceable.

14.	Investee's contention is that the inevitable effect of the interdict will be that it will irreversibly lose the security it holds over the monies that are now in the bank account. It will not matter, says Investec, if it is ultimately vindicated in overcoming Andalusite's defence in the money judgment application: those monies, which it has actually secured, can never be restored to it because they will have been dissipated as a direct result of the grant of the interdict. As Investec put it in its written heads of argument: "Once the security is lost, this court would have decided the fate of those monies finally and irreversibly."

15.	Not surprisingly, Andalusite argues that the interdict is no more and no less than a common-or-garden interim interdict, designed to operate only until the final determination of the issues in dispute in the main application.

16.	The line between decisions that are "interlocutory" and those that are "final" has been described as being "intrinsically difficult", and "is a question that has vexed the minds of eminent lawyers for many centuries , and the answer has not always been the same." In many cases, the question is raised in the context of appeals, more specifically, whether an order by a court was final in effect, and hence appealable, or whether it was in the nature of an interlocutory, and hence not appealable order. Because of the complexities that may arise on a case to case basis, it is not, understandably, a question any Judge would relish having to try to give a sensible answer to in urgent proceedings where the luxury of the time required for in-depth deliberation is in short supply.

17.	To add to the complexity in this matter are two competing lines of authority emanating from this Division, and involving interdicts for relief pending the finalisation of main proceedings. The cases in question are BHT Water Treatment (Ply) Ltd v Leslie and Another, and Radio Islam v Chairperson, Council of the Independent Broadcasting Authority and Another. Investec relies on BHT. In that case, the applicant sought an interim interdict enforcing a restraint of trade agreement pending the matter finally being determined at trial. Marais J accepted the argument made by the respondent that having regard to the period of the restraint and time periods involved in court proceedings, the period of the restraint, if ordered, would run out before the matter could come to trial and that, for this reason, what in effect (although not in form) was being sought was final, and not interim relief. The court held as follows:
"The Court should look at the substance rather than at the form. The substance is that an interdict is being sought which will run for the full unexpired time of the restraint. In substance therefore final relief is being sought although the form of the order is interim relief."

18.	This approach was expressly rejected in Radio Islam. This matter involved an application for an interdict, or more specifically, a mandamus, pending the finalisation of review proceedings against a decision of the respondent to refuse the applicant's application for a new one-year radio broadcasting licence. The applicant had held an initial one-year licence and had applied for a further one­ year licence after the first one expired. It sought an order directing the respondent to permit it to resume broadcasting, not indefinitely, but for a fixed and specified period commensurate with the balance of a second, one-year licence. In that case the respondent raised the same argument raised in BHT, viz. that if the order was granted, it would probably operate until the specified time period had been exhausted and, therefore, the effect of the mandamus, if granted, would be final. In rejecting the BHT decision, Goldstein J held as follows:
"With great respect to the learned Judge, whose careful dicta demand close consideration, I am of the view that he is clearly wrong. It seems to me that in all cases where an interim interdict or mandamus is granted it necessarily operates for a period in respect of which the interim interdict or mandamus becomes final insofar as that which is physically done cannot be physically undone retrospectively."

19.	To date there has been no finality as to which of these decisions is correct. The most recent authority to give consideration to the issue was the Supreme Court of Appeal in Cipla. Neither the minority nor the majority judgments made a determination on whether the BHT, or the Radio Islam line of authority was correct. The minority judgment assumed, without deciding, that BHT was correct. However, the majority considered that:
"... it (was not) necessary or advisable to express an opinion on the correctness or otherwise of the approach taken by the court of first instance in BHT. That issue may arise for consideration in another matter. It does not arise here. This appeal raises four square the time-honoured criteria as to what is meant by 'final in effect' in distinguishing between interlocutory and final interdicts. It does not implicate the correctness or otherwise of BHT."

20.	As Rogers AJA pointed out in the minority judgment in Cipla: “An interim interdict pending the determination of an action is not final in effect, which is why matters decided for purposes of granting an interim interdict do not become res judicata." This is because the interim order does not finally dispose of the rights between the parties: the /is between them remains to be disposed of in the pending main proceedings. In my view, this explains why the court in BHT found that the effect of the interdict in that case was final. For all practical purposes, in that case the /is between the parties would not be finally resolved before the restraint period ended and the interdict fell away. So, the interim interdict gave full (and final) effect to the applicant's right to restrain the respondent from taking up other employment for the entire restraint period, notwithstanding that the applicant's right to do so was in dispute. It is for this reason that the BHT approach has been applied, in some cases, in circumstances where the rights underpinning the interdict are time-bound as in, for example, restraint of trade cases.

21.	However, it is important in this regard to distinguish between the effect of the interdict on the disputed right itself, on the one hand, and its effect on the object of that right, on the other. In the present case, the grant of the interdict will not have any final effect on the underlying, but disputed right of Investec to enforce its cession over the bank account. This is a matter that will be determined in due course by the court in the money judgment application. What the interdict would have a final effect on is the current object of that right, viz. the monies in respect of which it would otherwise be permitted to enforce its right of cession. If the interdict were to be granted, and Investec were later to be vindicated in its money judgment, its right of cession would be fully effective once again. The difference then would be that it would be exercised over a different object, viz. the monies then standing to the credit of the account. Thus, although it would never be able to exercise its right again over monies paid out while the interdict was in place, it nonetheless could exercise its right over new monies coming in. The important point, in my view, is that the interdict will not have any final effect on Investee's right of cession, but only on the object of Investee's right.

22.	It is not necessary for me to make any finding as to whether the court in BHT was correct. Even if I were to follow BHT, as Investec suggests, the present case does not fall into the same category. The interdict, if granted, will not have final effect on Investee's rights. The rights of the parties in respect of the bank account will be finally determined by the court in the money judgment. What will be affected is Investee's access to, and preservation of, the monies currently standing to the credit of the bank account. In this respect, undoubtedly there will be prejudice to Investec. It will never be able again to assert its rights over the funds disbursed from the account. However, it is not every kind of prejudice that is relevant to determining whether an interdict will have final or only interim effect. As the majority in Cipla noted:
"... it has been consistently held that 'final in effect' means that an issue in the suit has been affected by the order such that the issue cannot be revisited either by the court of first instance or that hearing the action."

23.	And further:
"Prejudice which does not affect the issues in the suit is dealt with under the rubric of balance of convenience in an application for an interim interdict."

24.	The present case seems to me to fit neatly into that category of interdicts where what I decide will not affect the issues in the suit and where the prejudice to Investec ought properly to be considered as part of the balance of convenience inquiry typical of interim interdicts. For these reasons, I find that the interdict sought is not one that is final in effect. It is an interim interdict and the normal test pertaining to interim interdicts should be applied.

THE REQUIREMENTS FOR AN INTERIM INTERDICT
25.	These being urgent proceedings I will not belabour the requirements for an interim interdict. They are well established. An applicant must establish a prima facie right; a well-grounded apprehension of irreparable harm if the interim relief is not granted; the balance of convenience must favour the applicant; and there must be an absence of an alternative remedy.

26.	These requirements are not to be considered in isolation, but in conjunction with one another. In particular, a court will consider the strength of an applicant's case, as against the balance of convenience: the stronger the applicant's prospects of success in respect of the issue to be determined subsequently in the main trial, the less need there will be for it to establish that the balance of convenience favours it, and vice versa. The grant of an interdict is a discretionary remedy, depending on a consideration of all the facts of the case. The court may, as part of its discretion, impose such terms on the grant or refusal of an interdict as it thinks fit, including an order that the applicant provide security for such damages as the respondent may have sustained as a consequence of the grant of the interim interdict.

27.	In the matter before me the two main considerations pertain to whether Andalusite has established a prima facie right, and how the balance of convenience weighs up between the parties. The other two requirements overlap to a large degree with these.

PRIMA FACIE RIGHT
28.	Andalusite's case is that it has a prima facie right to access and utilise the funds in the bank account and that Investee's purported exercise of its rights of cession over that account amount to an unlawful invasion of its right. Investee's actions are unlawful in that, properly interpreted, the loan agreements were suspended until the fulfillment of the conditions precedent. As one of these was not fulfilled, Investec was under no obligation under the agreements to advance monies to Andalusite, and Investec acquired no enforceable right of cession over the bank account as security for monies advanced.

29.	Not surprisingly, Investec says that Andalusite's interpretation of the agreement is flawed and must be rejected, and that it is acting within its rights by prohibiting Andalusite's access to and utilisation of the funds in the bank account. Thus, the main leg of the dispute between the parties turns on the proper interpretation of the relevant provisions of the loan agreements. At issue, in particular, is clause 2, which is headed "Conditions Precedent". It provides, in its introduction that:
"The Lender's (Investee's) obligation to advance the Capital to the Borrower (Andalusite) in terms of this Agreement is subject in all respects to the fulfillment of the following conditions precedent (in each case in form and substance acceptable to the Lender), namely that-"
There then follows a list of 22 conditions, some of which have sub-conditions incorporated into them. Certain of the conditions are specific, for example the condition that each finance document has been signed by the parties, a copy has been delivered to the Lender and each document has become unconditional in accordance with its terms. Others, however, are more general. The condition at issue in the present case is one of the latter. It is contained in clause 2.1.3.7 , which reads as follows:
"The Lender has received-...copies of any consents and approvals (including without limitation, any governmental or regulatory approvals) required by each Transaction Obliger to enter into and perform its obligations under the Finance Documents to which it is a party." (Emphasis added)

30.	As a further form of security, Investec took pledge and cession, of the shares held in Andalusite by the shareholders. Section 11(1) of the Mineral and Petroleum Resources Development Act provides that: " ... a controlling interest in a company ... may not be ceded ... without the written consent of the Minister ...". Andalusite avers that no such Ministerial consent was ever obtained from the Minister in respect of that pledge and cession of shares. Accordingly, so the defence proceeds, the condition contained in clause 2.1.3.7 was never fulfilled: the Minister's approval was a necessary form of "regulatory approval" for purposes of that section, and it was never provided to Investec. The consequence of this failure to comply with one of the conditions precedent is that Investec did not assume any obligation under the loan agreements to advance funds to Andalusite because that obligation was suspended until fulfillment of all of the conditions precedent.

31.	If matters were so simple, it would be easy to conclude that Andalusite has a strong prima facie case. However, as with most matters concerning the interpretation of contracts , it is not so simple. Investec raises a number of what it contends are difficulties with this interpretation. It says that it is not the loan agreements as a whole that were suspended pending the fulfillment of the conditions precedent, but only Investee's obligation to advance the funds. In this regard, it contends that the present case differs from those in the case relied on by Andalusite, viz. De Villiers & Another NNO v BOE Bank Ltd. As a matter of fact, says Investec, it lay within its prerogative under the relevant provisions to advance the funds if it was satisfied as the fulfillment of the condition. It was so satisfied and advanced the funds. The conditions in question were expressed to be for Investee's benefit and it was entitled to advance the funds even in the absence of Ministerial consent. Investec also relied on other clauses in the agreements, including certain warranties made by Andalusite. Clause 3 deals with "Representations and Warranties". It provides, that in deciding to enter into the agreements Investec relies on the representations and warranties made by Andalusite as set out further in that clause, including the representation and warranty contained in clause 3.2.10 viz. that:
"Every consent, authorisation, permit, licence, certificate or approval or, or declaration required by each Obligor in connection with ... the performance by such Obligor of such Obligor's obligations under the ... Documents has been obtained ... prior to the drawdown date will have been obtained ... and is in full force and effect and there has been no default in the observance of the conditions or restrictions (if any) imposed in, or in connection with, any of the same."

32.	Investec also points out that the loan agreements were treated by all parties as having been effective and enforceable since 2011. Provision was made by Andalusite in its annual financial statements of its loan obligations to Investec, signifying that those obligations were enforceable. The loan agreements had been amended and restructured five times since 2011 (as regards the loan agreement) and three times (as regards the working capital facility agreement), with both parties working off the same understanding that the agreements were valued and enforceable between them.

33.	Investec further contended that it had not, in the limited time available, had an opportunity to properly investigate or ascertain what the true factual state of affairs was as regards Ministerial approval. This is something, it contended , that would have to be dealt with when the main application is heard. Accordingly it did not conced that Ministerial approval had never been obtained. Even if its interpretation of the agreement was ultimately rejected, and it transpired that Ministerial approval was required and had never been obtained, Investec said that there were a number of remedies available to it to defeat Andalusite's defence including waiver, estoppel and quasi-estoppel. Andalusite in turn pointed out that there are provisions in the agreements that restrict these remedies which, it submitted, would render them unavailable to Investec.

34.	It is extremely difficult in urgent proceedings where a defence like that relied on by Andalusite is raised out of the blue for the court to gather anything but a superficial sense of whether the defence is likely or not to win the day when the matter eventually comes before a court. It is unlikely that either party has had a full opportunity to consider all the legal complexities involved in the interpretation of the agreements in the relatively short time that the matter has been aired between them. It is certain that they will not have had a proper opportunity to ascertain the true facts pertaining to the Minister's approval: were any of the contracting parties aware of the need to obtain the approval; were both parties so aware and if not why not; was the approval ever sought; was it ever obtained; if so, was it ever provided to Investec; if not why not?

35.	It is so that Andalusite in reply provided an affidavit from Mr Bain, the Financial Director of Andalusite and a director of the two shareholders who's shares were ceded. He states that no Ministerial approval was obtained. Of course, I cannot reject this statement of fact, as I must proceed on the applicant's version in this matter. However, it is a limited statement and does not begin to tell the whole of the story that, undoubtedly, the court will need to know when the matter is finally aired.

36.	I have also had reference to the BOE case relied on by Andalusite. While the principles it lays down support the legal thread of Andalusite's intended defence to the money judgment application, it does seem to me that there may be material differences in the circumstances prevailing in that case as compared with those prevailing in the present. This is particularly pertinent at this stage of proceedings, where the full facts of the matter and a full assessment of each side's interpretation have not yet been adequately ventilated.

37.	Despite these difficulties, I must do the best I can to determine the question of a prima facie right. In my view, it may be arguable that a necessary precondition was not met. However, given the context in which the defence was raised after so many years of the parties being ad idem as to their rights and obligations under the loan agreements, it is not a defence which inspires enormous confidence. It is sufficient, however, to constitute a prima facie right, although open to some doubt. Ultimately, the fate of the application must fall on the balance of convenience and those considerations overlapping with it.

BALANCE OF CONVENIENCE AND RELATED ISSUES
38.	This leg of the inquiry requires a weighing of the prejudice Andalusite is likely to suffer if the interdict is refused against the prejudice to Investec if it is granted. As I indicated earlier, Andalusite's prospects of success may also form part of the inquiry, as may other considerations, such as whether it has any alternative remedies, and if the harm it is likely to suffer is irreparable.

39.	As a general principle, a business that is denied access to its operating bank account is likely to suffer severe prejudice. However, it is important carefully to consider whether this principle holds in the particular circumstances presented in each case.

40.	Andalusite submitted that there were many factors weighing in its favour. It pointed to the fact that its debt to Investec has been outstanding since April 2017, and that, until recently, Investec had deliberately held off on enforcing its cession. Andalusite's point here is that the interdict would simply restore the parties to a situation with which Investec had been content until 20 May 2019. Andalusite also asserts that if the interdict is granted it will go out of business. It says that a negotiated position with Investec to release funding to pay creditors is not a viable alternative: this is impractical, and it will render Andalusite at the mercy of Investec, as the paymaster. Furthermore, Investec made it clear at the hearing of the matter that it could not be party to a selective payment of creditors for fear of attracting some liability if an insolvency situation develops. It also submitted that business rescue was not an option for a number of reasons.

41.	There is an important element to the facts of this case that require particular attention. From inception, Investec has contended that Andalusite is trading in insolvent circumstances. In addition, it has been unable to pay its debt to Investec. Over the years, Investec has granted Andalusite a number of indulgences in an effort to deal with this latter situation. This explains the various amendments to the loan agreements over time. Investec has also supported various attempts by Andalusite to find alternative funding, or a buyer for the business, but none of these efforts have borne fruit. Investec points out that in its affidavits filed in these proceedings, Andalusite fails to set out how it intends to pay the debt due to Investec, whether under the loan agreements, or on the basis of unjustified enrichment. While Andalusite takes issue with Investee's motives on these latter issues, it does not dispute the basic substantial facts averred by Investec.

42.	As to Andalusite's alleged insolvency, Investec asserts that the company is commercially insolvent and thus, that there is no longer any "business as usual" to conduct through the bank account. Andalusite accepts that in terms of its financial statements, it is factually insolvent in that its liabilities exceed its assets. However, it does not accept that it is commercially insolvent. It set out in its supplementary affidavit some details of amounts due to creditors. These include an amount of R23 million to SOB, its freight forwarding agent. It states that had it not been for Investee's enforcement of the cession, it would have paid this creditor R6.1 million by the end of May 2019 in order to bring its facility with SOB under the R20 million limit. It also stated that its exposure to consultants integral to its business was in the region of R850 000 per month. It has legal obligations to remunerate its directors, in the approximate monthly amount of R900 000. Neither of these groups of creditors had been paid in May 2019. It stated that as at 27 May, there should be funds of approximately R6.5 in the bank account, and that a further deposits were expected totaling R5.7 million. Attached to the supplementary affidavit was a list of essential creditors indicating obligations in the amount of R11.4 million.

43.	This outline of Andalusite's current financial situation is telling. It is clear on its own facts that it is unable to meet its present commitments, even though it states in its supplementary affidavit that it is not commercially insolvent. Although it appears to have or to anticipate having roughly available to it enough to pay its essential current creditors, this will not cover all its current debts. Importantly, the list of essential creditors does not include the amount necessary to pay its employees (for which an amount of over R3 million was released by Investec in May), or its indebtedness to SOB. Nor does it appear from the list of essential creditors that the consultants referred to in Andalusite's supplementary affidavit are included on it. While it is so that a company's bank account will fluctuate as monies come in, on Andalusite's own description of its creditors and monies falling due to it, it cannot pay its current creditors. In the CEO's confidential report for March 2019 a more rosy picture of Andalusite's financial position is painted. However, when it comes to the actual cash at hand, on Andalusite's own figures as set out in its supplementary affidavit, it cannot meet its current commitments. Even the CEO's report states that: "The cash situation remains tight, which is directly due to the impact of the Eskom power shedding since November 2018. Management has taken steps to limit the impact of power shedding from mid May 2019, but it will take several months for the cash flows to recover from the past five months of Eskom disrupted supply." (My emphasis).

44.	In Investee's supplementary answering affidavit, it avers, with reference to Andalusite's own exposition of its financial position, that the company "is commercially insolvent and trading in insolvent circumstances", and that on Andalusite's own version, it does not have sufficient to pay its essential creditors, consultants and directors. Andalusite does not deal with this in reply, and it thus stands uncontested.

45.	Andalusite's case for an interim interdict is premised on the assertion that if the account is not released from the cession immediately, it will not be able to pay its creditors and the business will cease to operate. From its financial state, as described above, it seems to me that even if I were to release the account, Andalusite would not be able to pay its current creditors: the release of the bank account will not change this. The interdict would not have its intended positive effect for Andalusite for which it contends. Furthermore, if Andalusite is, indeed, trading in insolvent circumstances, as Investec avers, my release of the account would inevitably place Andalusite in a difficult position: it may well have to embark on a path involving potential preferential payments to some creditors. Again, this is not a factor in Andalusite's favour.

46.	On the other hand, the release of the account pending the final determination of the money judgment application would deprive Investec of any security that it is currently able to effect over the bank account in circumstances where it seems plain that Andalusite is unable to settle its debt, and has substantial liquidity problems. Unless Andalusite's stated defence was very strong, the balance of convenience tips against uplifting the cession. As I have indicated, the merits of the defence are very complicated and it is not possible for me at this stage to find that it has a defence sufficiently strong to outweigh the negative balance of convenience.

47.	Even if, contrary to what the current picture demonstrates, Andalusite is not trading in insolvent circumstances, there should be no reason why it cannot approach Investec to negotiate a mutually acceptable method of managing the account in the interim. This would maximise the prospect of the continued operation of the business (and payment of important liabilities, like wages and salaries), and at the same time provide some security for Investec in the account. If Investec is satisfied as to Andalusite's averred commercial solvency, there should be no reason why it would not be willing to consider a releases of fund, as it did before. This presents an alternative to Andalusite which, at present, it has rejected as being impractical. It is common cause that since agreement between the parties was reached in the first urgent application on 23 May, Andalusite has made no further approaches to Investec to seek a release of further necessary funds.

48.	For these reasons I find that the balance of convenience does not favour Andalusite. Taking into account its current financial state, the release of the account would do no more than assist it in paying some of its creditors. On the facts before me, it will not permit it to pay all of its creditors and so to avoid further financial distress. The real root of the problem seems to go much deeper than Investee's action in exercising what it claims is its right of cession over the bank account. The release of the account will not, as Andalusite proposes, provide the solution. Instead, it will deprive Investec of the security it claims, in respect of a debtor that is demonstrably in financial straits.

49.	It follows that the application must be dismissed.

THE APPLICATION TO INTERVENE
50.	The intervening applicants seek to intervene on the basis that their and/or their members' right to job security will be infringed unless the court suspends the cession and releases the bank account. Investec opposes the joinder on the basis that the applicants have no real and substantial interest in the matter, and thus cannot claim to be a necessary party to the proceedings.

51.	In view of the reasons cited above for my refusal of the interdict, it is not necessary for me to determine whether the intervening applicants have the requisite locus standi to be joined. Even assuming that they do (and I express no finding on this), from a practical point of view the intervening applicants' interests overlap to such an extent with those of Andalusite that they must follow the company 's fate in these proceedings.

CONCLUSION AND ORDER
52.	Andalusite has failed to persuade me that they are entitled to the interdict they seek. Their application must be dismissed with costs, such costs to include the costs of the first urgent application, which were previously reserved in the agreement reached between the parties. The application of the intervening parties is also dismissed. That application was brought at the last minute and did not generate much additional cost on the part of Investec. I make no order as to costs in that regard.

53.	I make the following order:
1.	The application by the Applicant is dismissed with costs, such costs to include the costs of two counsel.
2.	The Applicant is directed to pay the costs reserved in the order of court dated 23 May 2019.
3.	The application by the intervening applicants is dismissed with no order as to costs.

__________________
R M Keightey
Judge of the High Court of South
Africa, Gauteng Local Division
Johannesburg

DATE OF HEARING: 4, 10, 13 June 2019
DATE OF JUDGMENT: 20 June 2019
COUNSEL FOR THE APPLICANT: B Gilbert
M van Kerckhoven
INSTRUCTED BY: Brian Kahn Inc
COUNSEL FOR THE RESPONDENT: A Subel SC
J Smit
INSTRUCTED BY: ENS Afric
COUNSEL FOR INTERVENING APPLICANTS: Adv C Goosen/ Adv D Groenewald INSTRUCTED BY: Corne Wilkens Attorneys