Born Free Investments 247 (Pty) Ltd v Kriel NO

Rockland Asset Management and Consulting (Pty) Ltd (RAM) and related entities were placed under provisional curatorship in terms of s 5 of the Financial Institutions (Protection of Funds) Act 28 of 2001, with a rule nisi providing that, while the curatorship subsisted, all legal proceedings against the entities were stayed and could not be instituted without leave of court. The rule nisi was confirmed by a final order in December 2012. In May 2014, Born Free Investments 247 (Pty) Ltd instituted action against the curator, Kriel NO, for amounts allegedly due under lease agreements concluded with RAM, without first obtaining leave of court. The curator raised a special plea that the action was a nullity, or alternatively could not proceed, because leave had not been obtained. The High Court dismissed the special plea, but on appeal the full court upheld it and dismissed the action. Born Free Investments appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the full court was altered so that the special plea was upheld and the plaintiff’s action was stayed, pending either the granting of leave by a court to proceed with the action or the termination of the curatorship.

The case clarifies South African law on the interpretation of curatorship orders and rules nisi, confirming that a confirmed rule nisi forms part of the final order unless expressly excluded. Importantly, it establishes that proceedings instituted without required leave during a moratorium are not nullities but must be stayed, thereby protecting access to courts under s 34 of the Constitution and preventing unduly harsh procedural consequences.