Timasani (Pty) Ltd (in business rescue) and Another v Afrimat Iron Ore (Pty) Ltd

Timasani (Pty) Ltd, a mining company, was placed in business rescue in July 2015, with Mr Werner Cawood appointed as its business rescue practitioner (BRP). In 2017 Afrimat Iron Ore (Pty) Ltd made an offer to purchase Timasani’s farm, mineral rights and mining equipment for R17 million, subject to suspensive conditions including due diligence and board approval. Afrimat paid a deposit of R1.7 million into a separate interest-bearing account, expressly to be held on its behalf pending due diligence and conclusion of final agreements. Disputes arose regarding auctioneer’s commission, advertising costs, and undisclosed encumbrances in favour of a third party (Soliter). The suspensive conditions were not fulfilled, final sale agreements were never concluded, and Afrimat withdrew its offer and demanded repayment of the deposit. When Timasani failed to repay the deposit, Afrimat applied to the High Court for repayment. Timasani and the BRP opposed the application, relying inter alia on the moratorium on legal proceedings in s 133 of the Companies Act 71 of 2008 and alleged non-joinder of creditors and the auctioneer.

The appeal was dismissed with costs. The High Court’s order directing Timasani to repay the deposit with interest remained in force.

The judgment clarifies the scope of the business rescue moratorium in s 133 of the Companies Act, particularly in relation to transactions concluded after the commencement of business rescue. It confirms that funds held provisionally on behalf of a third party do not fall under the moratorium and may be recovered without leave of the court or consent of the BRP. The case also authoritatively explains that s 145(1)(a) does not require joinder of all creditors in proceedings involving a company in business rescue.