Briefly summarized - The applicant was a State Owned Enterprise^ and owner of the airport premises. The second respondent carried on the business of a restaurant in the departure section of the airport. The restaurant was placed under business rescue following a resolution taken on 4 September 2017 in terms of s 129 of the Companies Act 71 of 2008 ('Act'). The first respondent was appointed as the business rescue practitioner ('practitioner') to the restaurant. The instanter application was brought in terms of s 133(a) and (b) of the Act, requiring leave of the court to institute proceedings despite a moratorium in place pursuant to the second respondent being placed under business rescue. Relief was only sought against the first respondent, while the remaining respondents were the directors of the second respondent, the creditors of the restaurant as well as its employees.
Juridical Termination of Business Rescue Plan
The applicant sought an order pursuant to sections 141(2)(b)(ii) and 152(8) of the Act, compelling the practitioner to comply with his obligations and sought to compel the practitioner to either file a notice of the termination of the business rescue proceedings, alternatively file a notice there had been substantial implementation of the business rescue plan ('plan'). The onus rested with the applicant to persuade the court on the probabilities, that it was entitled to such relief notwithstanding the second respondent still being under business rescue. The main contention of the applicant was that the second respondent had been able to generate a sufficient cash income to settle those debts which had been admitted, and that it was now trading profitably. A lease agreement had been concluded as part of the plan, allowing the second respondent to remain at the premises at the airport until a tender process for the lease of the premises has concluded. That apart, the applicant contended that the protection which the second respondent was afforded under the plan should now come to an end. The applicant's case stated ‘..[h]aving regard to the projected cash flow surplus reflected in the business plan, it must be concluded that the Second Respondent must have, by now, generated sufficient cash income to settle admitted debts due by it as recorded in the business rescue plan.’ The honourable Court stated that whether or not the second respondent was in financial distress had to be ascertained having regard to the actual financial statements.
Cited was Arqomanzi* that stated, although a business rescue plan was substantially implemented, some steps might still need to be implemented.' The threshold the Act provided was substantial implementation. It therefore presupposed that although substantially implemented, 'some steps may still need to be implemented' and the Court should adopt a sensible interpretation. Further cited was one of the first cases regarding Business Rescue in South Africa in re Panamo Properties* and in giving effect to the provisions of s 7 of the Act, ‘promote the development of the South African economy by inter alia encouraging entrepreneurship and enterprise efficiency’ and to ‘provide for the efficient rescue and recovery of financially distressed companies, in a manner that balances the rights and interests of all relevant stakeholders’. The Court was cognizant of the fact there could be no substantial implementation of the plan until finalisation of the tender process. The Court considered the fact that the complaint against the Practitioner was less of a 'substantial implementation' and more of an essential 'hijack' of his client's company and perhaps rather an application to set aside the plan was appropriate.
^ in terms of the Public Finance Management Act 1 of 1999 ('PFMA'); Vide Airports Company South Africa Limited v Spain NO  ZAKZDHC 40; * Arqomanzi Proprietary Limited v Vantage Goldfields (Pty) Limited 2019 JDR 2506 (MN), para 106, Panamo Properties (Pty) Ltd & another v Nel & others NNO 2015 (5) SA 63 (SCA).