GCC Engineering (Pty) Ltd & others v Lawrence Maroos & others

GCC Engineering (Pty) Ltd experienced serious financial difficulties and was placed under business rescue. The business rescue practitioner later applied for termination of business rescue on the basis that there was no reasonable prospect of rescue, and the company was placed under provisional liquidation by court order. Provisional joint liquidators were appointed and suspended the company’s business. Thereafter, the former director launched an urgent application seeking the appointment of a manager with director-like powers pending a further business rescue application. The High Court granted orders effectively suspending the liquidators’ powers and re-vesting control in a court-appointed manager. The liquidators and other parties appealed to the Supreme Court of Appeal.

The appeal was upheld. Paragraphs 2 to 6 of the High Court’s order were set aside and substituted with an order dismissing the application. The first and second respondents were ordered to pay the costs of the application, the counter-application, and the appeal on an attorney-and-client scale.

The case provides authoritative clarification by the Supreme Court of Appeal on the interpretation of s 131(6) of the Companies Act, confirming that a business rescue application does not terminate or suspend the office and powers of provisional liquidators. It reinforces the separation between liquidation and business rescue regimes and limits judicial innovation in appointing managers outside statutory frameworks.