Newton Global Trading (Pty) Ltd (Under Business Rescue) v Da Corte

Newton Global Trading (Pty) Ltd, a chrome processing company, resolved on 31 May 2013 to commence voluntary business rescue under s 129(1) of the Companies Act 71 of 2008 due to financial distress and appointed a business rescue practitioner. The company did not strictly comply with the procedural requirements in s 129(3) and (4), including timeous filing and publication of notices. While under business rescue, Newton Global brought an urgent application in the Gauteng Division of the High Court seeking to interdict Eddie Da Corte from entering leased premises and operating or removing materials from its chrome processing plant. Da Corte opposed the application, raising points in limine, including that the business rescue proceedings were a nullity due to non-compliance with s 129, and that the business rescue practitioner therefore lacked locus standi. The High Court upheld this point and dismissed the application. Newton Global appealed to the Supreme Court of Appeal.

The appeal succeeded with costs, including the costs of two counsel. The order of the High Court was set aside and replaced with an order dismissing the point in limine with costs. The matter was remitted to the High Court to determine the remaining defences and/or the merits.

The case authoritatively confirms, following Panamo Properties, that procedural non-compliance with s 129 of the Companies Act does not automatically terminate business rescue proceedings. It clarifies that the standing of a business rescue practitioner cannot be challenged on this basis unless and until a court sets the resolution aside, thereby promoting certainty and stability in business rescue proceedings.