Golden Dividend 339 (Pty) Ltd and Another v Absa Bank Limited

Golden Dividend 339 (Pty) Ltd concluded a loan agreement with Absa Bank Ltd for approximately R8 million, secured by a mortgage bond. The company defaulted on repayments, and Absa issued a statutory demand. The company’s board resolved to place it under business rescue in terms of s 129 of the Companies Act 71 of 2008, and Mr Etienne Naude was appointed as business rescue practitioner. A business rescue plan was eventually adopted by 89% of the creditors with voting rights. Absa subsequently applied to court to set aside the adopted business rescue plan, alleging it was unlawful and invalid, but did not join the other creditors who had voted in favour of the plan. The company raised non-joinder of creditors as a preliminary objection.

The appeal was upheld with costs, including the costs of two counsel. The order of the High Court was set aside and replaced with an order dismissing Absa Bank’s application with costs.

The case affirms the importance of joinder principles in business rescue litigation and clarifies that statutory notice to affected persons does not replace the common-law requirement to join parties with a direct and substantial interest. It strengthens procedural protections for creditors in business rescue proceedings and reinforces certainty and finality in adopted business rescue plans.