Louis Case Reports

BUSINESS RESCUE AND DISPOSITIONS

Company Law – Business rescue – Conversion to liquidation proceedings – Whether payments made to the business rescue practitioners after conversion are void in terms of s 341(2) read with s 348 of the Companies Act 61 of 1973.
Mazars Recovery & Restructuring v Montic Dairy (in liquidation) [2022] ZASCA 135 at [22]-[31]

Facts: Montic carried on business as a dairy and, when the company was placed under business rescue proceedings, the second to fourth appellants were appointed as business rescue practitioners (BRPs). They were directors of Mazars and received remuneration for their services through it. While a conversion to liquidation proceedings was pending the BRPs made two payments totalling R1,5 million in respect of their fees and expenses to Mazars. The payments were made after the application to liquidate the company was presented to court.        
Appeal: By the BRPs against the order of the High Court obtained by the liquidators declaring void the payments made to Mazars in terms of s 341(2) and s 348 of the Companies Act 1973.
Discussion: That the deemed commencement date of the winding-up of the company was when the application to convert the business rescue into liquidation proceedings was lodged by the BRPs; and the contentions by the BRPs that the two payments did not constitute dispositions, and that the 2008 Act provided for their statutorily recognised preferential entitlement to be paid their remuneration and expenses during the business rescue proceedings.
Findings: Payments made to a BRP before the presentation of the application for the winding-up are unaffected by s 341(2), but thereafter a BRP is in the same position as all other creditors. Section 341(2) dictates that every disposition made after the commencement of the winding-up is void, unless the court orders otherwise. The High Court cannot be faulted for having declared the payments void and ordering Mazars and the BRPs to make repayment.
Order: The appeal is dismissed.
PONNAN JA (MAKGOKA JA, GORVEN JA and CHETTY AJA concurring.)
HUGHES JA writing separately, with the same conclusion.

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PUBLIC TRANSPORT AND SAFETY

Transport – Safety – Public transport – Violence or unrest instigated by taxi associations – Powers of Minister and MEC to intervene – Failing in their duties – MEC unlawfully requiring bus company to engage with taxi industry – MEC and Minister ordered to take positive steps – Consequential structural relief – Constitution, s 172(1).
Intercape Ferreira Mainliner v MEC for Transport, EC [2022] 2099-2022 (ECM) at [35]-[58]

Facts: lntercape is a long­distance bus operator that has for years been the victim of widespread and ongoing acts of violence and intimidation throughout the country. The violence is part of a deliberate strategy on the part of certain taxi associations to get Intercape to agree to the unlawful demands that lntercape must reduce its prices and the number of buses operating on different routes and must pay levies to operate in certain areas. Intercape’s dogged refusal to agree to those unlawful demands were met with further acts of violence directed at their buses, drivers and passengers.           
Application: Intercape contends that the MEC and the Minister have failed in their constitutional and statutory duties in terms of the National Land Transport Act 5 of 2009 to intervene and put an end to the violence. It seeks relief compelling the Minister and the MEC to take action, including a structural interdict.
Discussion: The demands of the taxi associations and the escalating violence; lntercape’s requests for intervention; the responses from the MEC and the police services; the lack of response from national or provincial government; the government’s lamentable indifference to an ongoing crisis that poses a serious threat to the safety of long-distance bus drivers and passengers; the undisputed evidence of an MEC pandering to rogue taxi associations and acquiescing in their criminal conduct; and that the Transport Act vests in the MEC and the Minister extensive powers to intervene decisively and effectively to ensure the safety of members of the public when there is violence, unrest or instability in any sector of public transport.
Findings: Intercape had made out a case for the relief sought as well as for costs to be awarded on the attorney-and-client scale. The court commends Mr Ferreira for his resolute resistance to unabashed official bullying. His company has paid dearly for this brave stance.
Order: (made earlier) It is declared that the Minister and the MEC have an obligation to take positive steps to ensure that reasonable and effective measures are put in place to provide for the safety and security of long-distance bus drivers and passengers in the Eastern Cape. The order sets out the measures to be taken to achieve this. It is declared that the MEC acted unlawfully in requiring Intercape to engage in negotiations with representatives of the minibus taxi industry.
SMITH J

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MAINTENANCE AND LIFESTYLE

Family – Divorce – Maintenance – Ex-husband’s salary substantial – Prospective means of both parties – Ex-wife not required to use additional property for income – Entitled to enjoy an approximation of the above-average lifestyle during marriage – Including holidays and leisure.
CEF v JFF [2022] A3026-2022 (GJ) at [28]-[60]

Facts: The appellant (husband) and respondent (wife) were married in community of property for many years until their divorce in 2019. A settlement agreement enabled the respondent to exit the marriage with liquid, movable and immovable assets valued at R11 million. The maintenance court made an order directing the appellant to pay maintenance to the respondent of R53,546 per month.
Appeal: Against the maintenance order.
Discussion: Appellant’s contentions that respondent had elected to take on a new property and had chosen not to let out the Cape Town property and instead use it as a holiday home; the contentions that the magistrate had erred in failing to have regard to the respondent’s potentially income-generating assets, and that the respondent had failed to establish that prior to the divorce the parties had enjoyed a luxurious or lavish lifestyle sufficient to warrant the maintenance.
Findings: The appellant earned R400,000 per month, excluding bonuses. The respondent’s monthly expenses were R78,000 while she limited her claim to R53,546. The magistrate was required to consider the prospective means of both parties. The evidence showed that the couple had made full use of the resources available to them to fund an above-average lifestyle. They were accustomed to spending on overseas and local holiday and leisure activities. The magistrate did not err in granting an amount for holidays and leisure. There was no reason why the respondent ought to forgo this aspect of her pre-divorce lifestyle.
Order: The appeal is dismissed.
KEIGHTLEY J (MAIER-FRAWLEY J concurring.)

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ABOUT THE EDITOR

Louis Podbielski spent ten years at Juta working on various law reports and has read many thousands of judgments for case selection. He has considerable experience in writing flynotes and headnotes, compiling case annotations, and in refining subject indexes.​ During his four years at LexisNexis he was involved with legal data, analytics and in developing various legal tech solutions. He now runs his own case law service Louis Case Law

You can read his full CV and more about Louis on his LinkedIn profile where he shares interesting and recent cases.

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