Elias Mechanicos Building & Civil Engineering Contractors (Pty) Ltd v Stedone Developments (Pty) Ltd and Others

• Jurisdiction: South Africa
• Citation: 2015 (4) SA 485 (KZD)

Elias Mechanicos Building & Civil Engineering Contractors (Pty) Ltd v Stedone Developments (Pty) Ltd and Others
2015 (4) SA 485 (KZD)

2015 (4) SA p485

Citation	2015 (4) SA 485 (KZD)
Case No	7410/2014
Court	KwaZulu-Natal Local Division, Durban
Judge	Ploos van Amstel J
Heard	December 9, 2014
Judgment	December 11, 2014
Counsel	AWM Harcourt SC for the applicant.; GD Harpur SC (with AL Christison) for the respondents.

Flynote : Sleutelwoorde B

Company — Business rescue — Moratorium on legal proceedings against company — Leave to institute proceedings to be obtained before commencement of proceedings and not as part of relief in main application — Companies Act 71 of 2008, s 133(1)(b). C

Headnote : Kopnota

Applicant company sought an order directing first respondent to produce certain documentation regarding a joint venture. First and second respondents (the latter was also a party to the venture) were in business rescue proceedings D at the time. Leave to institute proceedings, as required in terms of s 133(1)(b) of the Companies Act 71 of 2008, was not obtained prior to commencement but incorporated as part of the relief in the main application. Counsel for respondents contended that it should have been obtained before the launch of proceedings. In issue was whether leave could indeed be sought in the same application in which the substantive relief was sought. The court held that, on a proper construction of s 133(1)(b), it could not. E The applicant had therefore commenced the present application when it was not entitled to do so. Such application was not competent and accordingly had to be dismissed. (Paragraphs [10] and [13] at 488D and 489C.)

Cases Considered

Annotations F

Case law

African Bank Corporation of Botswana Ltd v Kariba Furniture Manufacturers (Pty) Ltd and Others 2013 (6) SA 471 (GNP) ([2013] ZAGPPHC 259): referred to

Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk G 2014 (2) SA 494 (SCA): dictum in para [12] applied

Countertrade Establishment (Pty) Ltd v EBN Trading (Pty) Ltd 1995 (1) SA 762 (N): referred to

Doyle and Another v Fleet Motors PE (Pty) Ltd 1971 (3) SA 760 (A): referred to

Moodley v On Digital Media (Pty) Ltd and Others 2014 (6) SA 279 (GSJ): H referred to

Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) ([2012] 2 All SA 262; [2012] ZASCA 13): dictum in para [18] applied

Pinfold and Others v Edge To Edge Global Investments Ltd 2014 (1) SA 206 (KZD): referred to I

Redpath Mining South Africa (Pty) Ltd v Marsden NO and Others (GJ case No 18486/2013, 14 June 2013) ([2013] ZAGPJHC 148): referred to.

Statutes Considered

Statutes

The Companies Act 71 of 2008, s 133(1)(b): see Juta's Statutes of South Africa 2013/14 vol 2 at 1-369. J

2015 (4) SA p486

Case Information

AWM Harcourt SC for the applicant. A

GD Harpur SC (with AL Christison) for the respondents.

An application for leave to institute proceedings in terms of s 133(1)(b) of the Companies Act 71 of 2008 and production of certain information.

Order B

1.

The application is dismissed.

2.

The applicant is ordered to pay the costs of all three respondents, including those consequent on the employment of senior and junior counsel.

Judgment

Ploos van Amstel J: C

[1] The applicant in this matter seeks an order directing the first respondent to provide it with certain documentation pertaining to the Stedone Joint Venture. It contends that the first respondent is obliged to D produce the documents as it has a duty to account to the applicant as a member of the joint venture. Such an account has not been prepared, nor has the applicant claimed one. It contends that it is entitled to the documents on the basis that if the first respondent were to account to it the documents would have to be put up as supporting vouchers.

E [2] The applicant is Elias Mechanicos Building & Civil Engineering Contractors (Pty) Ltd. It concluded a joint-venture agreement with the first and second respondents on 13 September 2010 for the purposes of contracting with the King Sabata Dalindyebo Municipality for the construction of a housing development. The first and second respondents are Stedone Developments (Pty) Ltd and Stedone Civils (Pty) Ltd, F respectively. When the application was launched they were both in business rescue proceedings as contemplated in s 128 of the Companies Act 71 of 2008. The third respondent is the business rescue practitioner who was appointed to oversee them during the business rescue proceedings. The business rescue proceedings in respect of the first respondent ended after the application before me was launched but before it was G argued. The second respondent is still in business rescue proceedings, and the applicant has in argument confined the relief which it seeks to the first respondent.

[3] The first matter which I need to consider is the general moratorium H on legal proceedings against a company during business rescue proceedings. Section 133(1)(b) of the Act provides that during business rescue proceedings no legal proceeding against the company may be commenced or proceeded with in any forum, except with the leave of the court and in accordance with any terms the court considers suitable. The applicant...