Case Law[2023] ZAGPPHC 2014South Africa
Mango Airlines SOC Limited (In Business Rescue) and Others v Minister of Public Enterprises and Others (010700/2023) [2023] ZAGPPHC 2014 (18 December 2023)
Judgment
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# South Africa: North Gauteng High Court, Pretoria
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## Mango Airlines SOC Limited (In Business Rescue) and Others v Minister of Public Enterprises and Others (010700/2023) [2023] ZAGPPHC 2014 (18 December 2023)
Mango Airlines SOC Limited (In Business Rescue) and Others v Minister of Public Enterprises and Others (010700/2023) [2023] ZAGPPHC 2014 (18 December 2023)
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sino date 18 December 2023
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
Case
No: 010700/2023
In the matter between:
MANGO
AIRLINES SOC LIMITED
(
IN BUSINESS
RESCUE
)
First
Applicant
SIPHO
ERIC SONO N.O.
Second
Applicant
NATIONAL
UNION OF METALWORKERS OF SOUTH AFRICA
(INTERVENING)
Third
Applicant
And
THE
MINISTER OF PUBLIC ENTERPRISES
First
Respondent
DEPARTMENT
OF PUBLIC ENTERPRISES
Second
Respondent
SOUTH
AFRICAN AIRWAYS SOC LTD
Third
Respondent
THE
MINISTER OF FINANCE
Fourth
Respondent
NATIONAL
TREASURY
Fifth
Respondent
INTERNATIONAL
AIR SERVICE COUNCIL
Sixth
Respondent
AIR
SERVICE LICENSING COUNCIL
Seventh
Respondent
THE
AFFECTED PERSONS OF MANGO AIRLINES SOC
LIMITED
(
IN BUSINESS RESCUE
)
Eighth
Respondent
Delivered: This judgment
was prepared and authored by the Judge whose name is reflected and is
handed down electronically by circulation
to the Parties/their legal
representatives by email and by uploading it to the electronic file
of this matter on CaseLines. The
date for hand-down is deemed to be
18 December 2023.
SECTION
18(3) JUDGMENT
PHOOKO AJ
INTRODUCTION
[1]
This is an urgent application brought in
terms of Rule (6)12 by the Applicants for the operation and execution
of the order of the
court
a quo
delivered on 6 September 2023. The operation and
execution of the order are sought in terms of section 18(3) of the
Superior Courts
Act 10 of 2013 (“the Act”) pending leave
to appeal (or petition). The order, in part, reads as follows:
(a)
It is declared that the First Respondent’s
failure to take a decision in respect of the application submitted by
the Applicants
and the Third Respondent in terms of section 54(2) of
the PFMA is unlawful and constitutionally invalid.
(b)
The First Respondent’s failure to
determine the section 54(2) PFMA application is reviewed and set
aside.
(c)
The First Respondent is directed within 30
days after the service of the Court order, to take a decision in
respect of the section
54(2) application and communicate the outcome
thereof to the Applicants and the Third Respondent, including
furnishing such reasons
for the decision made, failing which the
Applicants and the Third Respondent may assume that the section 54(2)
application has
been approved by operation of section 54(3) of the
PFMA.
(d)
The First, Second, Fourth, and Fifth
Respondents are ordered to pay the costs of this application,
including the costs of two counsels,
jointly and severally.
[2]
The application
for
the operation and enforcement of the said decision, pending the
outcome of the application for leave to appeal (or petition),
is
opposed by the First, Second, Fourth, and Fifth Respondents.
THE PARTIES
[3]
The
First Applicant is Mango Airlines, a state-owned company currently
undergoing business rescue proceedings, with registration
number
2006/018129/30 incorporated with limited liability in accordance with
the laws of South Africa with a registered address
at Mezzanine
Level, Domestic Departures Terminal, OR Tambo International Airport,
Kempton Park, 1627. As a state-owned entity,
Mango Airlines is
governed in accordance with the prescripts of, amongst others, the
Public Finance Management Act 1 of 1999 (“PFMA”).
[1]
[4]
The Second Applicant is Sipho Eric Sono who
is cited in these proceedings in his capacity as the duly appointed
business rescue
practitioner (“the BRP”) of Mango
Airlines, practicing through his employer, Opis Advisory (Pty) Ltd
with registration
number 2007/012055/07 whose principal place of
business is situated at West Wing, Birchwood Court, 43 Montrose
Street, Midrand.
[5]
The Third Applicant is the National Union
of Metalworkers of South Africa (“NUMSA”), a trade union
registered in terms
of
section 95
of the
Labour Relations Act 66 of
1995
whose place of business is at 153 Bree Street, corner Gerald
Sekoto Street, Newtown, Johannesburg.
[6]
The First Respondent is the Minister of
Public Enterprises (“the PE Minister”) cited in his
official capacity whose
principal place of business is at 80 Hamilton
Street, Arcadia, Pretoria, 0007 C/O the State Attorney, Old Mutual
Centre, 8
th
Floor, 167 Andries Street, Pretoria, 0001.
[7]
The Second Respondent is the Department of
Public Enterprises whose address is at 80 Hamilton Street, Arcadia,
Pretoria, 0007 c/o
the State Attorney, Old Mutual Centre, 8
th
Floor, 167 Andries Street, Pretoria 0001.
[8]
The Third Respondent is the South African
Airways SOC Ltd (“SAA”), a state-owned company with
limited liability duly
incorporated in accordance with the laws of
South Africa with registration number 1997/022444/30 whose registered
address is at
Airways Park, 32 Jones Road, Kempton Park,
Johannesburg, 1627.
[8.1] SAA is the sole
shareholder of Mango Airlines and owns 100% of its shares.
[9]
The Fourth Respondent is the Minister of
Finance who is cited herein in his official capacity and whose
address of service is 40
Church Street, Old Reserve Bank Building,
2
nd
Floor, Pretoria, c/o the State Attorney, Old Mutual Centre, 8
th
Floor, 167 Andries Street, Pretoria, 0001.
[10]
The Fifth Respondent is National Treasury
whose principal place of business is at 40 Church Street, Old Reserve
Bank Building, 2
nd
Floor, Pretoria, c/o the State Attorney, Old Mutual Centre, 8
th
Floor, 167 Andries Street, Pretoria, 0001.
THE ISSUE
[11]
The issue to be determined is whether the
Applicants have met the jurisdictional requirements for the relief
sought.
APPLICABLE LEGAL
PRINCIPLES
[12]
Section 18(1) and (3) of the Act permits
the execution of a final order granted at first instance pending any
appeal against it,
provided that three jurisdictional requirements
have
been met. The full provisions of
section 18 of the Act are as follows:
“
18.
Suspension of decision pending appeal
(1)
Subject to subsections (2) and (3), and unless the court under
exceptional circumstances orders otherwise, the operation and
execution of a decision which is the subject of an application for
leave to appeal or of an appeal, is suspended pending the decision
of
the application or appeal.
(2)
Subject to subsection (3), unless the court under exceptional
circumstances orders otherwise, the operation and execution of
a
decision that is an interlocutory order not having the effect of a
final judgment, which is the subject of an application for
leave to
appeal or of an appeal, is not suspended pending the decision of the
application or appeal.
(3)
A court may only order otherwise as contemplated in subsection(1) or
(2), if the party who applied to the court to order otherwise,
in
addition proves on a balance of probabilities that he or she will
suffer irreparable harm if the court does not so order and
that the
other party will not suffer irreparable harm if the court so orders.
(4)
If a court orders otherwise, as contemplated in subsection (1)—
(i)
the court must immediately record its reasons for doing so;
(ii)
the aggrieved party has an automatic right of appeal to the next
highest court;
(iii)
the court hearing such an appeal must deal with it as a matter of
extreme urgency; and
(iv)
such order will be automatically suspended, pending the outcome of
such appeal.
(5)
For the purposes of subsections (1) and (2), a decision becomes the
subject of an application for leave to appeal or of an appeal,
as
soon as an application for leave to appeal or a notice of appeal is
lodged with the registrar in terms of the rules.”
[13]
Three
observations can be made from the aforesaid provisions for the grant
of the relief sought. There must be exceptional circumstances,
and
the applicant is to show, on a balance of probabilities, that it will
suffer irreparable harm if the court does not order so
and that the
other party will not suffer irreparable harm.
[2]
The
said requirements codify the common law
[3]
position
yet are more onerous
[4]
as
compared to the common law position.
[14]
In
exercising the discretion to enforce a court order pending an
application to the Supreme Court of Appeal for leave to
appeal,
(or a petition),
prospects
of an appeal succeeding in another court play a role in deciding
whether to grant this exceptional relief.
[5]
[15]
In light of the above legal position, I now
turn to consider the circumstances of this case, taking into
consideration the oral
and written submissions of the parties before
this Court, to ascertain whether the Applicants have made out a case
for the relief
sought.
EXCEPTIONAL
CIRCUMSTANCES
[16]
Counsel for the Applicants submitted
various grounds to the effect that this matter was
“
of
an unusual natur
e” and therefore
exceptional.
Urgency
[17]
The
First and Second Applicants relied on various decisions
[6]
to
contend that,
inter
alia,
business
rescue proceedings are in their nature, inherently urgent.
[18]
They further argued that the deeming
provision in section 54(3) of the PFMA recognises the speedy manner
in which the decision-making
process had to be made in respect of
section 5(4) transactions.
[19]
In addition, the First and Second
Applicants contended that the PE Minister was required to act
diligently and without delay as
per the provisions of section 237 of
the Constitution of the Republic of South Africa.
[20]
Counsel for the First and Second
Respondents averred that this matter was not urgent. For one, the
investor who is said, by the
Applicants, to be threatening to
withdraw has confirmed continued commitment to the transaction
without any conditions. In addition,
counsel contented that it was
incorrect for the Applicants to state that by
“
agreement”
they treat this matter as urgent.
[21]
When counsel for the Fourth and Fifth
Respondents was asked about the fact that precedent tells everyone
that the proceedings are
inherently urgent by nature and that the
issue of the investor being on board or not was irrelevant, his
response was in the affirmative.
However, he insisted that it
appeared that the continued commitment of the investor was now
brought into the urgency issue and
invoked as if the investor would
pull out of the transaction.
[22]
Counsel for the First and Second
Respondents aligned themselves with the submissions of the Fourth and
Fifth Respondents in so far
as urgency is concerned.
[23]
In
my view, the urgency was not adequately contested, save to state that
the investor remains committed to the transaction. This
does not put
into dispute the inherent urgency associated with insolvency-related
cases. In
Ex
parte: Nell N.O. and Others
,
[7]
the Court, per Tuchten J held as follows in respect of the urgency of
insolvency proceedings:
“
Another
factor supporting the view I have taken is the inherent urgency of
insolvency proceedings
. In
Absa Bank Ltd v De Klerk and
Related Cases
1999 4 SA 835
E 838J-839A, the court said:
‘
There is
frequently a large body of creditors whose rights are affected by
sequestration
, who may wish to be heard on the return day, and
who may be prejudiced by delay.
This inherent urgency leads Meskin
to make the following recommendation in Insolvency Law at 2.1.7 at
2-34, a recommendation which
I endorse and which the Courts in this
Division have in fact applied:
. . . ‘” (own emphasis
added).
[24]
In my view, precedent informs this Court
that proceedings such as the present, are inherently urgent. I do not
understand the proposition
that seeks to divorce the section 54(2)
application and the business rescue proceedings in the context of
this case. The two are
interconnected. This matter is urgent.
National and Public
Interest
[25]
The Applicants argued that
“
the
fact that a state-owned entity is in business rescue is unusual”
.
They further averred that the matter has attracted public attention
because of its
“
impact on Mango’s
creditors, its former employees and its customers”.
According to counsel, there is going to be
extensive public harm if Mango’s business rescue fails as it
will negatively impact
Mango’s former employees, the un-flown
ticket liability, and job creation.
[26]
The Applicants further contended that an
expert report compiled by Dr Vermooten, which outlines public
interest considerations that
show the importance of rescuing Mango,
was not challenged.
[27]
The Applicants also submitted that the
“
national and public interest in the re-launch of
Mango renders this case an exceptional one”
.
The Significant
Financial Resources Implicated
[28]
The Applicants argued that there were
extensive finances, to the sum of R 819 million from the National
Revenue Fund, allocated
by the government to Mango to reduce its
financial dependence on SAA.
[29]
According to the Applicants,
SAA has
so far only transferred a sum of R 734 million to Mango, and R 430.4
million was allocated “
to settle arrear salaries of Mango
employees and cover retrenchment packages”
. To this end,
the Applicants contended that the allocation of a huge financial
boost to Mango “signals an intention for Mango’s
successful relaunch as a commercially sustainable airline”.
Based on this,
the
Applicants
argued that the financial allocation “
stands out as
exceptional and unconventional”
, and that the Respondents’
actions were against “
the Government’s clear objective
of rehabilitating Mango”.
The Prospects of
Successfully Rescuing Mango
[30]
Counsel for the Applicants argued that
Mango’s affected persons have adopted a business rescue plan
which the BRP believes
can be implemented as he has identified a
buyer, amongst other things.
[31]
Counsel further contended that the absence
of Mango in the market deprives customers of competitive prices that
would be offered
by the airline if it were to return to business.
[32]
According
to the Applicants, the
“
fact
that Mango will be unable to achieve a successful business rescue by
virtue of the delays
occasioned
by the appeals process itself constitutes exceptional circumstances”
,
To this end, Counsel referred this Court to
Incubeta
Holdings (Pty) Ltd and Another v Ellis and Another
[8]
where it was,
inter
alia,
held that exceptional circumstances may arise due to procedural
delays which may negatively impact on the substantive relief.
Consequently, the Applicants averred that the “
prevention
of Mango’s clear prospect of successful rescue by virtue of the
delays inherent in the appeals process alone constitutes
exceptional
circumstances”.
[33]
NUMSA, in support of the Applicants, also contended that
exceptionality was rooted in the fact that if the business rescue
plan
was to fail, it would effectively deprive NUMSA’s members
of the vested right of the guarantee of employment, as outlined
in
the retrenchment agreement.
[34]
The First and Second Respondents contended that the
Applicants’ contention that the matter was out of the ordinary
because
it involved a public entity in business rescue, and that it
attracted a significant amount of public interest, were “
not
sufficient to meet the definitional requirements of exceptional
circumstances”.
To this end, the First and Second averred
that the said factors “
are not unique to the parties in this
application”
and therefore not exceptional.
[35]
Relying
on various cases that have dealt with section 18(3) of the Act,
counsel argued that in
Knoop
NO and Another v Gupta (execution)
[9]
(“Knoop”),
it was held that:
“
In the context of
section 18(3) the exceptional circumstances must be something that is
sufficiently out of the ordinary and of
an unusual nature to warrant
a departure from the ordinary rule that the effect of an application
for leave to appeal or an appeal
is to suspend the operation of the
judgment appealed from. It is a deviation from the norm. The
exceptional circumstances must
arise from the facts and circumstances
of the particular case.”
[36]
Consequently, the First and Second
Respondents contended that the Applicants have failed to provide “any
basis or reasons
in support of their alleged exceptional case and/or
a case that is out of the ordinary.
[37]
The Fourth and Fifth respondents contended
that the Applicants’ proposition that the case was one which
involved business
rescue is incorrect, but the case is one dealing
with section 54 of the PFMA. Consequently, they argued that the
reliance on urgency
was misplaced.
IRREPARABLE HARM
[38]
The Applicants contended that the period of
between 2 to 4 years to finalise the appeal could be too long to keep
the investor waiting,
even though the investor remains committed to
investing in Mango. To this end, the Applicant argued that the loss
of the investor
due to appeal processes will leave the BRP with no
other option but to wind-down Mango as per the Amended Business Plan.
[39]
Counsel for the Applicants further argued
that the inability to implement the amended business plan and winding
down constitutes
irreparable harm because liabilities amounting to R
183 million would remain unpaid, and that there would be no jobs
re-created,
amongst other things.
[40]
NUMSA aligned itself with the submissions
of the Applicants but further highlighted that their members would
suffer “prejudice”
if the order was not granted. The
basis for this was that Mango’s former employees would receive
preferential treatment with
respect to future jobs as an investor has
been found.
[41]
The First and Second Respondents contended
that the threat of the investor withdrawing from the transaction has
been allayed by
the commitment of the investor to continue with the
transaction. According to the First and Second Respondents,
“
the
letter sent by the investor it is apparent that the investor
appreciates the processes involved in this matter including the
pending appeal”.
[42]
The First and Second Respondents submitted that the Applicants
have not raised “other prejudice or harm except for the
misconceived
threat that the investor might withdraw”.
Consequently, they contended that the Applicants will not suffer
harm. The Fourth
and Fifth Respondents supported the aforesaid
submission.
ABSENCE OF IRREPARABLE
HARM TO THE STATE RESPONDENTS
[43]
The Applicants submitted that the State
Respondents would not suffer irreparable harm because there was
evidence before this Court
that the PE Minister’s reason for
pursuing an appeal was to get legal certainty about how section 54(2)
of the PFMA ought
to operate.
[44]
Furthermore, the Applicants contended that
the Minister of Finance also argued that this matter was novel and
involved the proper
interpretation of the Companies Act and the PFMA,
which have implications on the protection of the public purse.
According to the
Applicants, the granting of the relief would not
prevent the State Respondents from proceeding with their appeal for
legal certainty
as per section 17(1)(a)(ii) of the Act.
[45]
The Applicants averred that the court
carefully crafted its relief, and that the PE Minister still retains
the decision of whether
to approve the section 54(2) application.
Consequently, this was the only practical consequence of immediately
executing the order.
[46]
In so far as the
locus
standi
is concerned, the Applicants
argued that the issue of
locus standi
was resolved in the main application and that the
Applicants have an interest in immediately enforcing the decision in
the main
application.
[47]
The First and Second Respondents contended
that
the “interim enforcement will result in irreparable
harm to the section 54(2) transaction and will prejudice the First
Respondent’s
ability, as government shareholder representative
and as the executive authority under the PFMA, to discharge his
duties in accordance
with the Constitution, the PFMA and in ensuring
that governmental policy and priorities are not infringed”.
[48]
The First and Second Respondents further submitted that
pursuing “an appeal after the fact will render some of the
issues
raised in the appeal moot, something impermissible or
undesirable in law.
[49]
The First and Second Respondents argued that there would be
consequences that will flow if the PE Minister was ordered to make a
decision, such as defending a potential review application against
his decision. According to the First and Second Respondents,
this
will take place at the same time as the appeal.
[50] The First and Second
Respondents submitted that a “
true construction of the
relief sought by the applicants is to close the curtain on the
Minister’s entitlement to vindicate
his rights, by having his
dispute adjudicated by the honourable Court”
.
[51]
Relying on,
inter
alia,
Baxter
[10]
,
the First and Second Respondents averred that once an administrator
has made a decision, he/she becomes
functus
officio
and that decision cannot be changed by a decision maker but by a
superior body. They further argued that “
once
a decision has been made, that decision is final and cannot be varied
or revoked”.
To bolster their case, the First and Second Respondents contended
that “
the
section 54(2) process does not accord the first respondent a
corresponding power to reconsider his decision, once made”.
Consequently, the appeal will be moot.
[52]
The Fourth and Fifth Respondents contended that if the
execution order is granted, the appeal will be rendered moot, the PE
Minister
will be forced to make a decision based on an incomplete
application. According to the Fourth and Fifth Respondents, “
this
means that the PE Minister’s decision will not only be
ill-informed but have severe
consequences for the public at
large and the public fiscus”.
To this end, they argued that
the PE Minister will have made a decision in the absence of the
Minister of Finance’s decision
“
despite the government
guarantees that have been granted in Mango’s favour”
.
[53]
The Fourth and Fifth Respondents further
contended that if the relief sought were to be granted, it would
result in
“
disjoint and incoherent
decision-making processes in that the PE Minister will have to decide
an incomplete application”
that
cannot be implemented up until the Minister of Finance grants his
approval. The Fourth and Fifth Respondents averred that the
consequences were irreparable because once a decision has been made
by the PE Minister, he cannot
“
unmake
it”.
[54] The Fourth and Fifth
Respondents averred there would be benefits if the application is
dismissed, and the Respondents are successful
on appeal as the
application process would remain open, and SAA would submit the
required information to enable the relevant authorities
to make an
informed decision, amongst other things.
[55] The Fourth and Fifth
Respondents contended that the investor has placed no time bar on the
interest to invest in Mango and
remains committed, contrary to the
suggestions by the Applicants that the investor would not wait for
too long.
[56] Ultimately, the
Fourth and Fifth Respondents submitted that the delays in finalising
the section 54(2) application have been
caused by the Applicants, who
are not assisting SAA and have brought this application. To a large
extent, the Fourth and Fifth
Respondents’ submissions echoed
those of the First and Second Respondents.
EVALUATION OF
SUBMISSIONS
[57]
Concerning
exceptional circumstances, in
MV
AIS Mamas Seatrans Maritime v Owners, MV AIS
Mamas,
and Another
[11]
,
the court dealt with
the
exceptional circumstances test which requires circumstances to be
considered as exceptional to,
inter
alia,
be
out of the ordinary, unusual or uncommon,
something
which is accepted in the sense that the general does not apply to it.
Their “existence or otherwise is a matter
of fact which the
Court must decide accordingly”.
[12]
There
is no doubt that context is essential in the process of considering
what constitutes exceptional circumstances.
[58] Counsel for the
Applicants submitted that what made this case exceptional included
that it involved State Owned Entities (“SOEs”)
in
business rescue, national and public interest, the significant amount
involved, and prospects of Mango being successfully rescued.
I doubt
that these factors give rise to exceptional circumstances. The
business of airlines by its nature involves the large amounts
referenced in submissions. The same applies to SOEs which generally
must conduct their affairs in the public interest because they
involve the public purse. This Court is cautious of the suggestion
that a matter that has attracted the attention and interest
of a
significant portion of the public at large is necessarily a matter of
national and/or public interest. With what is before
this Court, the
Applicants have not shown that the matter is indeed exceptional. I do
not see how the
Knoop case
supports
or strengthens the Applicants’ case.
[59] In my view, NUMSA
did not save the situation as counsel considered exceptionality to be
something that vested in the rights
of its members to receive
preference in the job creation in the event that Mango was
successfully rescued. This is not out of the
ordinary but occurs in
any given situation where there is an agreement to do so especially
if business rescue proceedings are implemented
successfully.
[60] In light of the
above, this Court is persuaded by the submissions of the Respondents
that the aforesaid factors are not sufficient
to meet the
definitional requirements of exceptional circumstances.
[61]
The
consideration of irreparable harm entails a fact-specific inquiry.
Irreparable harm means something that cannot be remedied
and/or
corrected “
if
the litigant claiming it is ultimately successful in the appeal
pending which interim execution is sought”
.
[13]
In
Zero
Azania (Pty) Ltd v Caterpillar Financial Services SA
,
it was further held that:
“
What
this court is called upon to do is to select a conclusion which seems
to be more natural or plausible a conclusion from amongst
several
conceivable ones having evaluated the probabilities deduced from all
of the affidavits without particularly favouring applicants
or
respondents version.”
[14]
[62]
The
test to be applied is one on the balance of probabilities,
“
an
objective test and is dependent on the value to be given to the facts
insofar as it relates to relative probabilities”
[15]
.
[63] The Applicants’
submissions mainly focused on the fact that the appeal process may
take long, that the investor may eventually
decide to change their
mind as they could not wait forever, and that the BRP would then be
forced to wind down Mango.
My difficulty with this
submission is that it assumes that the section 54(2) application will
be approved, whereas the PE Minister
has the option to approve or
decline. If the PE Minister declines, it follows that the BRP would
have to follow the winding-up
route.
[64]
Again,
NUMSA did not assist the Applicants’ case as they averred that
winding down constitutes irreparable harm because liabilities
amounting to R 183 million would remain unpaid, and that there would
be no jobs re-created, amongst other things. The submissions
are
problematic because it invites this Court to enter into speculation;
something that is beyond its scope. Further, it suggests
that nothing
will come out of the winding-up process if Mango eventually goes that
route.
[65]
The
continued commitment of the investor was brought into the core of the
considerations by the Applicants. A reading of the letter
before the
Court from the investor does not assist the Applicants’ case
much. I agree with the Respondents that the letter
from the investor
does not reveal any signs of withdrawal, but a commitment by the
investor to continue with the transaction. Delays
in any litigation
are somehow unavoidable.
They
are part and parcel of the legal procedure.
[16]
In
my view, this also settles the suggestion that the delays associated
with the appeals process constitute exceptional circumstances
in so
far as Mango’s
“
clear
prospect of successful rescue”
are
concerned.
[66]
The
prospects of Mango being rescued do count in favour of Mango but for
the affirmation letter from the investor, they do not take
the
Applicants’ case further.
[67]
All
these factors point me in one direction, the Applicants have failed
to discharge the onus resting on them on
the facts.
[68]
Concerning
the absence of irreparable harm to the State Respondents,
the
Applicants’ core argument on one hand was
that the State Respondents would not suffer irreparable harm because
the evidence
before this Court showed that the Respondents’
reason for pursuing an appeal was that the case was novel and that
they sought
to get legal certainty about how section 54(2) of the
PFMA ought to operate.
Consequently,
the
granting of the relief would not hinder the State Respondents from
proceeding with their appeal for legal certainty as per section
17(1)(a)(ii) of the Act. On the other hand, the Respondents
maintained that
interim enforcement will result in irreparable
harm to the section 54(2) transaction and will prejudice the First
Respondent’s
ability as a government shareholder representative
and as the executive authority under the PFMA, amongst other laws.
[69] In my view, the
order of the court
a quo
does not tie the hands of the PE
Minister to decide the section 54(2) application in a particular
manner. I agree with the Applicants’
submissions in
that
the PE Minister still retains the discretion to make a decision on
whether to approve the section 54(2) application. Indeed,
once he
decides, that will be the end of the process of the decision and
Mango will have to either go into business or wind up.
One of these
possibilities is unavoidable. I do not think that the issue of
prejudice arises on the part of the State Respondents.
[70]
Furthermore,
the Fourth and Fifth Respondents’ reliance on disjointed and
incoherent decision-making processes suggests that
government
departments operate independently from each other, and that they do
not communicate on issues that cut across their
scope of authority
and/or mutual interests. This is not the case.
[17]
Accordingly,
the issue of disjointed decision does not arise because the PE
Minister is not directed to make a decision in a particular
way but
to consider what is before him, in the light of confirmation that no
additional information will be forthcoming, and make
a decision that
he deems just in the circumstances.
[71]
In
so far as the
locus
standi
is concerned, the BRP’s legal standing emanates from the
amended business rescue plan.
[18]
In
addition, they were the successful parties in the court
a
quo
and
therefore have a direct and substantial interest in seeking the
decision of the court
a
quo
being
enforced. In my view, this settles the issue of
locus
standi
.
[72]
Concerning prospects of success, the
Respondents maintain that they have significant prospects of success.
This Court has carefully
considered the application for leave to
appeal as it was heard on the same day as the current application. In
my view, I do not
think that the Respondents have prospects of
success. Even if this is the position, this does not relieve the
Applicants from making
out a case for the relief that they seek in
this application.
[73]
I similarly find that the Applicants have
failed to meet the requisites, on a balance of probabilities, that
need to be met for
the granting of relief sought as per the notice of
motion. Therefore, their case ought to be dismissed.
[74]
Ultimately, two possibilities await Mango,
either to be saved or liquidated. This demands that finality be
reached. It is incumbent
on all the parties involved to allow the
inherent urgency to inform their conduct and cooperate to the
greatest extent possible
to bring finality to the business rescue
proceedings that are connected to the section 54(2) application.
COSTS
[75]
There
is no basis on which to find that the costs should not follow the
results.
[19]
ORDER
[76]
I, therefore, make
the
following order:
(a)
The
Applicants’ non-compliance with the Rules of Court in respect
of periods and manner of service are condoned to the extent
that is
necessary, the application is heard as urgent application and
enrolled as such.
(b)
The section 18(3) application is dismissed
with costs including the costs occasioned by the employment of two
counsel.
PHOOKO
AJ
ACTING JUDGE OF THE
HIGH COURT,
GAUTENG
DIVISION, PRETORIA
APPEARANCES:
Counsel
for the
First
and Second Applicants:
Adv
IV Maleka SC, and Adv T Scott
Instructed by:
Cliffe Dekker Hofmeyer
Inc
Counsel for the Third
Applicant:
Adv R Tulk SC and Adv NL
Chesi-Buthelezi
Counsel
for the First and Second Respondents:
Adv
Mphaga SC, and Adv D Mtsweni,
Instructed by:
State Attorney, Pretoria
Counsel
for the Fourth and Fifth Respondents:
Adv
K Pillay SC, and Adv N Nyembe
Instructed by: State
Attorney, Pretoria
Counsel
for the Sixth to Eighth Respondents:
n/a
Instructed by:
n/a
Date of Hearing: 28
November 2023
Date of Judgment:
18 December 2023
[1]
This judgment only cites the relevant parties in the present
application to give context. The rest of the respondents have been
omitted.
[2]
Ntlemeza v Helen Suzman Foundation and Another
2017
(5) SA 402
(SCA) at para 35.
3
South
Cape Corporation (Pty) Ltd v Engineering Management Services (Pty)
Ltd
1977 (3) SA 534
at 545C-G.
[4]
See
University
of the Free State v Afriforum and Another
2018 (3) SA 428
(SCA);
Premier
for the Province of Gauteng and Others v Democratic Alliance and
Others,
[2021]
1 ALL SA 60
(SCA);
Johannesburg
Society of Advocates and Another v Nthai and Others,
2021
(2) SA 343 (SCA).
## [5]Zero
Azania (Pty) Ltd v Caterpillar Financial Services SA (Pty) Ltd[2023]
ZAGPJHC 1341 at paras 10 and 41; see alsoUniversity
of the Free State v Afriforum2018
(3) SA 428 (SCA) at para 15.
[5]
Zero
Azania (Pty) Ltd v Caterpillar Financial Services SA (Pty) Ltd
[2023]
ZAGPJHC 1341 at paras 10 and 41; see also
University
of the Free State v Afriforum
2018
(3) SA 428 (SCA) at para 15.
[6]
See
Mhlonipheni
v Mezepoli Melrose Arch (Pty) Ltd
2020
JDR 1033 (GJ) at para 6,
Koen
v Wedgewood Village Golf & Country Estate (Pty) Ltd
2012
(2) SA 378
(WCC) at para 10.
Black
Sheep Capital (Pty) Ltd v H and H Specialised Services (Pty) Ltd
2021
JDR 3091 (GP) at para 21.
[7]
2014 (6) SA 545
(GP) at para 55.
[8]
2014 (3) SA 189
(GJ) at para 27.
[9]
2021 (3) SA 135
(SCA) at para 46.
[10]
L
Baxter
Administrative
Law
(1984) at pages 372-373.
[11]
2002
(6) SA 150
(C) at 156H.
[12]
Ibid.
## [13]Zero
Azania (Pty) Ltd v Caterpillar Financial Services SA (Pty) Ltd[2023]
ZAGPJHC 1341 at para 26.
[13]
Zero
Azania (Pty) Ltd v Caterpillar Financial Services SA (Pty) Ltd
[2023]
ZAGPJHC 1341 at para 26.
[14]
Ibid at para 46.
[15]
Ibid.
[16]
Ibid at para 27.
[17]
See
for example, the
Intergovernmental Relations Framework Act, 13 of
2005
which defines intergovernmental relations as “…
relationships that arise among different governments or among organs
of state from different governments in the conduct of their
affairs”.
## [18]Mango
Airlines SOC Limited and Others v Minister of Public Enterprises and
Others[2023]
4 All SA 475 (GP) at paras 164-166.
[18]
Mango
Airlines SOC Limited and Others v Minister of Public Enterprises and
Others
[2023]
4 All SA 475 (GP) at paras 164-166.
[19]
Neuhoff
v York Timbers Ltd
1981
(4) SA 666
(T).
sino noindex
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