Janson v Ebundu (Pty) Ltd (in business rescue) & Others, Mpumalanga Division
When a disgruntled 33 percent shareholder asked the High Court to pierce the statutory "force field" that protects companies in business rescue, Barnard's insolvency-litigation team stepped in for the majority shareholders (the third and fourth respondents). The Court dismissed the minority shareholder's bid in its entirety, confirming once again that business-rescue proceedings enjoy robust judicial protection – and that creditors ignore the Companies Act's mechanics at their peril.
What the applicant wanted
The Applicant sought leave under section 133(1)(b) of the Companies Act 71 of 2008 to litigate against the company notwithstanding the statutory moratorium. His ultimate aim was to:
- Have an alleged R8 million "secured" claim recognised.
- Set aside the adopted business-rescue plan and the practitioner's appointment.
- Place the company in liquidation on a "just and equitable" basis.
Barnard's submission – and why it worked
- Moratorium stays unless the Court is persuaded otherwise – The Court accepted that no separate application is needed to seek leave for the moratorium to be lifted, but stressed that the papers must first demonstrate a solid case. The shareholder's affidavit failed to do so and thus the moratorium remained in force.
- Are you really a creditor? – "Creditor" is a matter of fact, not of opinion. Because the practitioner had rejected the claim and the business-rescue plan was subsequently adopted, the applicant was bound by sections 152(4) and 154(2). His failure to pursue the dispute-resolution route in the plan or to act before the vote left him without locus standi.
- Just and equitable liquidation? Not on these facts – The Court found no evidence that winding-up would benefit stakeholders. In any event, the applicant had failed to comply with the statutory and trite provisions of section 346(4A)(b) of the old Companies Act – a fatal procedural defect.
- Costs as a cautionary tale – The applicant was ordered to pay Barnard's clients' costs on the ordinary scale. By contrast, the first and second respondents (who filed their affidavits late and failed to seek condonation) were left to pay their own costs – an explicit rebuke from the bench.
Why this judgment matters
| Issue clarified | Practical takeaway |
| Section 133 leave test | Courts will only lift the moratorium if the applicant's founding papers make a compelling case and after evaluation of the ultimate relief which the applicants seek |
| Creditor status | A rejected claim must be challenged before or through the business-rescue plan's dispute-resolution mechanism – not after adoption. |
| Liquidation of a company in rescue | "Just and equitable" relief demands strict procedural compliance and persuasive evidence that liquidation, not rescue, best serves stakeholders. |
| Costs discipline | Parties who disregard the Uniform Rules (late filings, no condonation) risk adverse cost consequences, even if they ultimately succeed on the merits. |
Lessons for stakeholders
- Move fast or lose your seat. If your claim is omitted from the practitioner's list, act immediately – bring an urgent application or invoke the plan's dispute-resolution clause.
- Statutory Provisions of Section 346(4A)(b). Non-Compliance with Section 346(4A)(b)) can scuttle an otherwise meritorious liquidation bid.
- Business-rescue plans are binding contracts. Once adopted, they bind shareholders and unproven creditors alike – regardless of how loudly a dissenting voice protests.
- Practitioners retain wide discretion. The Court gave weight to the practitioner's decisions and criticised attempts to second-guess them with hindsight.
Barnard's restructuring and litigation specialists, instructed by Koos Benadie and Eloise Cilliers, defended the practitioners against every strand of the minority shareholder's attack.
The ruling:
- Preserves the integrity of the adopted business-rescue plan.
- Confirms the practitioners' approach to disputed claims.
- Sets a clear precedent on the limits of post-plan challenges.
For companies, practitioners and creditors navigating financially-distressed situations, Janson v Ebundu is a reminder that procedure and timing are everything – and that Barnard's team stands ready to defend the hard-won breathing space that business rescue provides.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
