THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not Reportable
Case No: 31/2021
In the matter between

ETIENNE JACQUES NAUDE

First Appellant

LOUIS PASTEUR HOSPITAL HOLDINGS
(PTY) LTD

Second Appellant

and
LOUIS PASTEUR MEDICAL INVESTMENTS
(PTY) LTD

First Respondent

FIRST CLINIC PROPERTIES ONE
LIMITED                                                                                    Second Respondent

VARIOUS OTHER PARTIES
3rd to 47th Respondents

In the application of:

LENMED INVESTMENTS LIMITED

Intervening Party
and
EJ NAUDE N.O. & 48 OTHERS

1st to 49th Respondents

Neutral Citation: Naude and Another v Louis Pasteur Medical Investments
(Pty) Ltd and Others (31/2021) [2022] ZASCA 139
(24 October 2022)
Coram:
ZONDI, MOLEMELA and HUGHES JJA and GOOSEN and
SIWENDU AJJA
Heard:
24 August 2022
Delivered:
24 October 2022
Summary: Business rescue ─ appeal against an order granting a shareholder and
a disputed creditor legal standing at meetings of creditors ─ settlement of appeal
between primary litigants ─ removal of appeal ─ opposition to removal of appeal
by intervening party ─ appellants contending the appeal moot ─ intervening party
opposing the declaration of mootness ─ settlement between primary litigants
rendering the appeal moot ─ appeal declared moot ─ intervention application
struck from the roll.

________________________________________________________________
ORDER
________________________________________________________________

On appeal from: Gauteng Division of the High Court, Pretoria (Holland-Müter
AJ, sitting as the court of first instance):
The appeal is declared moot and is removed from the roll.
The intervention application is struck from the roll.
Lenmed Investments (Pty) Ltd is ordered to pay the costs of the
intervention application and the application for declaration of mootness on
an attorney and client scale, such costs to include costs of two counsel
where so employed.
________________________________________________________________
JUDGMENT
________________________________________________________________

Siwendu AJA (Zondi, Molemela and Hughes JJA and Goosen AJA
concurring):

Introduction
[1] The second appellant, Louis Pasteur Hospital Holdings (Pty) (Pasteur
Holdings) (in business rescue), is a well-known healthcare service provider and
operates a standalone hospital in the Pretoria central business district. It
commenced voluntary business rescue proceedings (the proceedings) in
June 2018 and appointed the first appellant, Mr Etienne Jacques Naude (Naude)
as the business rescue practitioner.

[2] The first respondent, Louis Pasteur Medical Investments (Pty) Ltd (Pasteur
Investments) and Bonitas Medical Fund (Bonitas) are joint shareholders in
Pasteur Holdings. Pasteur Investments holds 74 per cent of the issued shares,
while Bonitas holds the balance of 26 per cent. The business of Pasteur Holdings

is organised in a complex group structure with several related and connected
entities, one of which is the second respondent, First Clinic Properties One
Limited (First Clinic).

[3] In August 2016, Bonitas obtained a judgment against Pasteur Holdings,1 as
a result, Bonitas and SARS are the largest creditors and jointly hold more than
92 per cent of the calculated voting interest. Another creditor is Arjohuntleigh
Africa (Pty) Ltd (Arjohuntleigh), cited as the 23rd respondent in the appeal. Its
claim of R42 276 against Pasteur Holdings represents less than 0,17 of the voting
interest.

[4] On 6 June 2019, Naude convened a meeting of creditors and tabled a
business rescue plan for adoption which was rejected. Exercising the election in
s 153(1)(a)(ii)2 of the Companies Act 71 of 2008 (the Act), Naude brought an
application to set aside the vote on the grounds that it was ‘inappropriate’ (the no
vote application). He did not launch the application within the 5 days envisaged
in the Act. On 21 June 2019, Arjohuntleigh applied for the liquidation of Pasteur
Holdings (the liquidation application). In addition, Arjohuntleigh sought an order
compelling Naude to file a notice of the termination of the proceedings as
contemplated by s 132(2)(b) of the Act.3

1 Pasteur Holdings commenced business rescue proceedings after its application for leave to appeal against a
judgment obtained by Bonitas in the sum of R44 245 350.68 was dismissed by this Court on 31 May 2018. By
2019, the value of the claim had increased to approximately R88m.
2 Section 153 (1)(a)(ii) states that if a business rescue plan has been rejected as contemplated in section 152 (3)(a)
or (c)(ii)(bb) the practitioner may advise the meeting that the company will apply to a court to set aside the result
of the vote by the holders of voting interest or shareholders, as the case may be, on the ground that it was
inappropriate.
3 Section 132 (2)(b) states that business rescue proceedings end when the practitioner has filed with the
Commission a notice of the termination of business rescue proceedings.

[5] The no vote and liquidation applications were amongst several
applications4 assigned to Ranchod J as a case manager. On 4 November 2019,
Ranchod J issued a directive authorising a meeting of creditors on
12 November 2019. Pasteur Investments objected to this meeting, as a result,
Ranchod J retracted the directive and convened a case management meeting with
representatives of all affected parties. On 20 November 2019, he issued a second
directive authorising Naude to convene a meeting of creditors and holders of
voting interests. The purpose of the meeting was to obtain approval from creditors
to prepare, publish and vote on a revised business rescue plan.

[6] Pasteur Investments objected to the authorised meeting and, together with
First Clinic, launched an urgent application in the Gauteng Division of the High
Court, Pretoria (the high court) on the 15 January 2020 which served before
Holland-Müter AJ. The learned Acting Judge granted the following order:
‘1. The First and Second Applicants are entitled to proceed with this application against the
First and Second Respondents and the general moratorium on legal proceedings for purposes
of this application is uplifted in terms of section 133(1)(b) of the Companies Act 71 of 2008
(“the Act”)
2. Leave is granted to the First and Second Applicants to intervene in the pending business
rescue of the Second Respondent;
3. This application, including Part B of the application, is subject to case management, together
with all pending applications, which case management is conducted by his Lordship Mr Justice
Ranchod;
4. [deleted] . . .
5. Pending the finalisation of this application,
5.1
the creditors meeting which is being convened for 15 January 2020 is postponed;
5.2
the First and Second Respondents are interdicted and restrained from considering,
publishing or call a meeting to vote and/or adopt a business rescue plan in terms of section 150,

4 At least nine applications including interlocutory applications as wells as two civil actions were pending and
under case management before the Pretoria high court.

151 and/or 152 of the Act subject to the finalisation of the pending no-vote application
instituted by the Business Rescue Practitioner
6. Costs are reserved.’

[7] During the urgent application proceedings, Lenmed Investments (Pty) Ltd
(Lenmed) sought leave to intervene, alternatively to be substituted for
Arjohuntleigh, the petitioning creditor in the liquidation application. Holland-
Müter AJ did not consider the application on the grounds that it was not urgent,
but ruled that Lenmed’s substitution application should be heard in the normal
course. When Naude and Pasteur Holdings applied for leave to appeal the order
of Holland-Müter AJ to this Court, Lenmed applied for leave to intervene in that
application. Holland-Müter AJ confirmed his previous ruling that Lenmed had
not been substituted, and therefore had no standing before him. He emphasised
that Lenmed’s application was to be dealt with as part of a range of applications
pending judicial case management before Ranchod J. He granted Naude and
Pasteur Holdings leave to appeal to this Court.

[8] Holland-Müter AJ’s order pertaining to the substitution application is
characteristically not appealable, and Lenmed did not appeal or cross-appeal the
decision. Lenmed instead filed an application seeking leave to be substituted for
Arjohuntleigh, the 23rd respondent in the appeal and or to be granted leave to
intervene and participate in the appeal in this Court (the intervention application).
Lenmed contends that it is an ‘affected person’ as defined in s 128 (1)(a),5 based
on the claim acquired from Arjohuntleigh. Consequently, it asserts that it has a
right in law to intervene and participate in any proceedings afforded to creditors
in s 145.6 It claims that it has a direct and substantial interest in the appeal.

5 Section 128 (1) provides that ‘In this Chapter- (a) ‘affected person’, in relation to a company, means- (i) a
shareholder or creditor of the company; (ii) any registered trade union representing employees of the company;
and (iii) if any of the employees of the company are not represented by a registered trade union, each of those
employees or their respective representatives;’
6 Section 145 (1) reads: ‘Each creditor is entitled to─

[9] The appeal was scheduled for hearing on 24 August 2022. On
1 August 2022, shortly before the hearing, Naude and Pasteur Holdings filed a
notice of removal of the appeal from the roll on the basis that the dispute with
Pasteur Holdings and First Clinic had been settled. The notice of removal was
preceded by a notice filed by Pasteur Investments in terms of
Uniform Rule 41(2),7 abandoning the order granted in its favour on
15 January 2020 forming the subject of the appeal. Lenmed objected to the
removal as well as the abandonment of the order by Pasteur Investments and First
Clinic, and persisted that its application for intervention and substitution should
be heard by this Court. Consequently, on 18 August 2022, Naude launched a
substantive application to declare the appeal ‘moot.’ Unrelenting, Lenmed
opposed this application.

[10] Arising from the dispute about the removal of the appeal are two
interlocutory applications, namely the intervention application and the
application to declare the appeal moot. (the mootness application). Naude and
Pasteur Holdings seek a postponement and for leave to file opposing papers in
the event that the Court finds there is a live appeal before it. Given that Lenmed’s
intervention application is associated with the dispute about the mootness of the
appeal, it must be accepted that if Naude and Pasteur Holdings succeed, then there
will be no basis for this Court to entertain the intervention application.
Accordingly, the question of mootness must be determined first.

(a) notice of each court proceeding, decision, meeting or other relevant event concerning the business rescue
proceedings;

(b) participate in any court proceedings arising during the business rescue proceedings;

(c) formally participate in a company's business rescue proceedings to the extent provided for in this Chapter; and

(d) informally participate in those proceedings by making proposals for a business rescue plan to the practitioner.
7 (2) ‘Any party in whose favour any decision or judgment has been given, may abandon such decision or judgment
either in whole or in part by delivering notice thereof and such judgment or decision abandoned in part shall have
effect subject to such abandonment. The provisions of subrule (1) relating to costs shall mutatis mutandis apply
in the case of a notice delivered in terms of this subrule.’

Background
[11] A brief background is necessary to give context to the appeal and the two
applications. From the get-go, Naude has been embroiled in litigation involving
several affected parties which threaten to undermine the proceedings. Since
inception, Bonitas favoured the liquidation of Pasteur Holdings because it
believed that the proceedings were a ruse to avoid paying its judgment debt.
Relevant to the appeal is that Naude terminated a sub-lease agreement between
Pasteur Holdings and Frist Clinic, and applied8 to set aside the sub-lease
agreement because of alleged irregularities. This, amongst many other actions,
set him on a collision course with some of the affected parties.

[12]  By the time Naude convened the meeting of creditors, there were divergent
interests associated with several affected parties. In February 2019,
RH Managers, an external entity, made an offer to purchase Pasteur Holdings as
a going concern for R200 million. Soon after this offer, Lenmed presented a
competing offer to acquire Pasteur Holdings for R200 million. Naude rejected
Lenmed’s offer on the basis that its funder, Rand Merchant Bank did not provide
a binding letter of commitment for the purchase price9. He did not present
Lenmed’s offer at the meeting of creditors held on 6 June 2019. During the urgent
application proceedings, Pasteur Investments complained that Naude was partial
towards RH Managers, and withheld pertinent information. Subsequent to the
meeting of creditors, Lenmed revised its offer to R400 million, twice the amount
offered by RH Managers.

[13] On 5 October 2019, after the failed meeting of creditors, Bonitas sold its
judgment debt of R88 million to RH Managers. On 19 December 2019,

8 Case number 85285/2018.
9 The sale of the business is not the primary goal of the rescue proceedings to turn Pasteur Holdings around to
trade, but is, consistent with the secondary goal to realise a better return than would be the case if Pasteur Holdings
were liquidated.

Arjohuntleigh sold its claim of R42 276 to Lenmed. The consequence is that
RH Managers and Lenmed are contenders for the purchase of Pasteur Holdings
and have each acquired pre-existing claims of creditors. The legal effect of a sale
of creditor claims on voting interests is the subject of Lenmed’s substitution
application. It bears mentioning that at the time of the purchase, Naude had made
a tender to settle Arjohuntleigh’s claim with interest and costs. Arjohuntleigh
declined the offer resulting in the formal tender made in terms of Uniform Rule
34, which is amongst matters pending before high court.

[14] The urgent application was to prevent Naude from convening further
meetings of creditors, while the no vote and liquidation applications were
pending. The shared view by Pasteur Investments, Arjohuntleigh and Lenmed is
that Naude cannot lawfully convene a second meeting of creditors as intended by
s 15110 read with s 15211 of the Act, after creditors rejected the first plan or before
a court has determined the no vote and liquidation applications.

[15] However, the dispute on appeal related to the aspects of the order:
(1) uplifting the moratorium against Pasteur Holdings, and (2) conferring Pasteur
Investments and First Clinic legal standing (as a shareholder and a creditor
respectively) to participate at a meeting convened for creditors in terms of
s 14512 of the Act. In addition, the status of the directive issued by Ranchod J
which paved the way for a second meeting of creditors was challenged. In my
view, the crux of the contested questions was of a domestic nature between the
primary litigants.

10 Section 151 provides that within 10 business days after publishing a business rescue plan in terms of section
150, the practitioner must convene and preside over a meeting of creditors and any other holders of a voting
interest, called for the purpose of considering the plan.
11The provisions of section 152 deal with the introduction of the business rescue plan, representations by
stakeholders and voting and approval of the plan.
12 Section 145(1)(b) provides: ‘Each creditor is entitled to participate in any court proceedings arising during the
business rescue proceedings.’

[16] The challenge on appeal was that Holland-Müter AJ granted Pasteur
Investments legal standing even though it had ceded its claims in Pasteur
Holdings to Nedbank Ltd in terms of a cession agreement dated 5 October 2010
and therefore held no voting interests and was not an admitted ‘creditor’ of
Pasteur Holdings. In relation to First Clinic, Naude had terminated a sub-lease
agreement between it and Pasteur Holdings and had rejected First Clinic’s claim
as a ‘creditor.’ First Clinic had not challenged that decision. The interim order
interdicting further meetings is not the subject of the appeal since Naude and
Pasteur Holdings do not challenge it.

Mootness
[17] As a general principle, an appeal is moot when there is no longer ‘an
existing or live controversy.’ However, the qualification is that the court may
exercise its discretionary power and entertain an appeal, even if moot where:
(a) there remains a discrete legal issue of public importance that will affect
matters in future13 or where (b) the interests of justice so require.14

[18]  Counsel for Naude and Pasteur Holdings submitted that the settlement of
the disputed issues between the primary litigants renders the appeal moot in terms
of s 16(2)(a)(i) of the Superior Courts Act 10 of 2013.15 The appeal, they argued,
will have no practical effect or result. In opposition, counsel for Lenmed
submitted that absent a withdrawal, the appeal remains live and Pasteur
Investments and First Clinic cannot merely abandon or remove it. Lenmed urged
this Court to determine whether the rescue proceedings came to an end on
14 June 2019. Lenmed is resolute in its contention that Naude cannot lawfully

13 Kruger v Joint Trustees of the Insolvent Estate of Paulos Bhekinkosi Zulu and Another [2016] ZASCA
163; [2017] 1 All SA 1 (SCA).
14 Normandien Farms (Pty) Limited v South African Agency for Promotion of Petroleum Exportation and
Exploitation (SOC) Limited and Others [2020] ZACC 5; 2020 (6) BCLR 748 (CC).
15 Section 16(2)(a)(i) provides that when at the hearing of an appeal the issues are of such a nature that the decision
sought will have no practical effect or result, the appeal may be dismissed on this ground alone.’

convene a second meeting of creditors after they rejected the first plan or before
a court has determined the no vote application. The insurmountable difficulty
confronting Lenmed is that these questions are not properly before this Court and
are, in any event the subject of the no vote and liquidation applications which are
pending before the high court.

[19] Faced with this, Counsel for Lenmed, relying on Van Staden v Pro- Wiz16,
sought to persuade us that there is a discreet question of law to be determined in
the ‘public interest.’ This, so the argument went, concerned the confirmation of
paragraphs 5.1 and 5.2 of the interim order interdicting further meetings. He
argued that such confirmation will protect the interests of all affected parties.

[20] Uniform Rule 41(2) permits an abandonment of a judgment at any time,
including on appeal17. The abandonment by Pasteur Investments and First Clinic
does not extinguish the existence of the interim order which remains extant until
varied, rescinded or set aside.18 Any ‘public interest’ in the discreet question of
law which underpins the orders is served by the existence of those orders.
Moreover, the interdict preventing further meetings has no immediate or adverse
effect on the rights of Arjohuntleigh or Lenmed. On the contrary, it supports their
desire to prevent further meetings.

[21] However, in so far as Naude, Pasteur Holdings, Pasteur Investments and
First Clinic are concerned, the dispute about legal standing has become settled.
The effect of the removal of the appeal from the roll means it is no longer an issue
for adjudication by this Court. Thus, the appeal is moot and Lenmed’s opposition

16 Van Staden and Others NNO v Pro-Wiz (Pty) Ltd [2019] ZASCA 7; 2019 (4) SA 532.
17 Department, Transport, Province of Kwazulu-Natal v Ramsaran (unreported, SCA case no 1274/2017 dated
23 May 2019) para [6].
18 Coetzer v Wesbank t/a Firstrand Bank Limited 2022 (2) SA 178 (GJ) para 26-27; and Oudekraal Estates (Pty)
Ltd v City of Cape Town and Others [2004] ZASCA 48; [2004] 3 All SA 1 (SCA) para 26.

must fail. It follows that there is no live dispute before this Court in which
Lenmed can intervene and the intervention application falls to be struck from the
roll.

[22] Counsel for Naude and Pasteur Holdings urged this Court, as a mark of its
displeasure, to censure Lenmed by a punitive costs order. Distilled to their
essence, both applications are exclusively fuelled by Lenmed’s desire to protect
its commercial interests. Lenmed was aware that none of the issues raised before
us had been adjudicated by the high court or were appealable. The interim order
preventing further meetings protected the interests of all affected persons. On
removal of the appeal, Lenmed had no cogent reason to persist with its
intervention or opposition to the removal. The conduct deserves censure as an
abuse of the processes of this Court.

[23] In the result, the following order is made:
The appeal is declared moot and is removed from the roll.
The intervention application is struck from the roll.
Lenmed Investments (Pty) Ltd is ordered to pay the costs of the
intervention application and the application for declaration of mootness on
an attorney and client scale, such costs to include the costs of two counsel
where so employed.

________________________
NTY SIWENDU

ACTING JUDGE OF APPEAL

Appearances:

For Appellant:

R du Plessis SC (with MM Boonzaaier)
Instructed by:
Walter Niedinger & Associates, Pretoria
West
FJ Senekal Inc, Bloemfontein

For First and Second Respondent:
MC Louw
Instructed by:

Jaffer Inc, Pretoria West
Free
State
Society
of
Advocates,
Bloemfontein

For Lenmed Investments Ltd:
P Lourens

Werksman Attorneys, Pretoria

Symington & De Kok, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME
COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
24 October 2022
Status:
Immediate

The following Summary is for the benefit of the media in the reporting of this
case and does not form part of the judgments of the Supreme Court of Appeal

Naude and Another v Louis Pasteur Medical Investments (Pty) Ltd and Others
(31/2021) [2022] ZASCA 139 (24 October 2022)

The first appellant, Mr Etienne Jacques Naude (Naude) a business rescue
practitioner of the second appellant, Louis Pasteur Hospital Holdings (Pty) Ltd
(in business rescue) (Pasteur Holdings) sought to appeal an order: (1) uplifting
the moratorium against Pasteur Holdings, and (2) conferring Louis Pasteur
Medical Investments (Pty) Ltd (Pasteur  Investments) and First Clinic Properties
One (Pty) Ltd ( First Clinic), legal standing to participate at a meeting convened
for creditors in terms of s 145 of the Act. Pasteur Investments is a major
shareholder in Pasteur Holdings and the balance of the shareholding is held by
Bonitas Medical Fund. First Clinic had a sub-lease agreement with Pasteur

Holdings. The order by the high court followed an urgent application launched
by Pasteur Investments and First Clinic, the first and second respondents in the
appeal, to interdict Naude from holding further meetings of creditors.

Naude had tabled a business rescue plan for adoption which entailed the sale of
Pasteur Holdings as a going concern to an external entity, RH Managers. Despite
receiving a competing offer from Lenmed Investments (Pty) Ltd, Naude rejected
it without presenting it to creditors. On 6 June 2019, the creditors rejected the
business rescue plan, and Naude launched an application to set aside the vote in
terms of s 153(1)(a)(ii) (the no vote application). One of the creditors,
Arjohuntleigh Africa (Pty) Ltd (Arjohuntleigh), cited as the 23rd respondent in the
appeal, petitioned the high court to liquidate Louis Pasteur Hospital Holdings (the
liquidation application).

The two applications were amongst several disputes pertaining to the business
rescue under case management by a different Judge. Naude obtained a directive
from the case management Judge authorising him to convene a further meeting
of creditors. Pasteur Investments and First Clinic approached the urgent court to
stop Naude from convening a second meeting and the high court duly interdicted
Naude. This aspect of the court order was not challenged and was therefore not
the subject of the appeal.

Preceding the urgent application, Lenmed and RH Managers as the contending
parties for the purchase of Pasteur Holdings, acquired creditor claims of
Arjohuntleigh and Bonitas Medical Fund in Pasteur Holdings. Lenmed sought to
intervene and to be substituted for Arjohuntleigh, in the urgent application. It
contended that it was an ‘affected person’ as defined in s 128 (1)(a) and had the
right to intervene and participate in the urgent court proceedings based on the
acquired claim. At the time, Lenmed had filed an application for substitution

which is opposed and was pending adjudication. The presiding judge did not
entertain Lenmed’s substitution and intervention application on the grounds that
the application was not urgent. He ruled that the application should be dealt with
in conjunction with other pending disputes under case management. During the
application for leave to appeal, Lenmed sought to intervene in that application.
The court confirmed its earlier approach. As a result, Lenmed approached this
Court for leave to intervene in the appeal. The shared view by Arjohuntleigh and
Lenmed is that Naude cannot lawfully convene a second meeting of creditors as
intended by s 151 read with s 152 of the Act, after creditors rejected the first plan.

The appeal was scheduled for hearing on 24 August 2022. On 1 August 2022,
shortly before the hearing, Naude and Louis Pasteur Hospital Holdings filed a
notice of removal of the appeal from the roll on the basis that the dispute had been
settled. Pasteur Investments had filed a notice in terms of Rule 41(2) abandoning
the relief granted in its favour by the high court. Lenmed opposed the removal of
the appeal as well as the abandonment of the relief. It contended that, absent a
withdrawal, the appeal remains live. The opposition prompted Naude and Pasteur
Holdings to launch a substantive application to declare the appeal moot.

Against this background, the Court had to consider the intervention application
and the application to declare the appeal moot. Lenmed contended that it had a
direct and substantial interest in the appeal, urging the Court to determine whether
Naude can lawfully convene a meeting of creditors after the rejection of the
business rescue plan and to rule on whether the rescue proceedings came to an
end on 14 June 2019. These questions were not properly before the Court on
appeal and are the subject of the pending no vote and liquidation applications
before the high court. Confronted with this, Lenmed argued that there is a discreet
question of law to be determined in the ‘public interest’ concerning the

confirmation of paragraphs 5.1 and 5.2 of the interim order interdicting further
meetings, to protect the interests of all affected parties.

The crux of the contested questions on appeal was of a domestic nature between
the primary litigants. The abandonment by Pasteur Investments and First Clinic
did not extinguish the existence of the interim order which remains extant until
varied, rescinded or set aside. Any ‘public interest’ Lenmed sought to protect was
served by the existence of those orders. The interdict preventing further meetings
had no immediate or adverse effect on the rights of Arjohuntleigh or Lenmed. On
the contrary, it supports their desire to prevent further meetings. The appeal was
declared “moot”, and as there was no live dispute before the Court for Lenmed to
intervene, the intervention application was struck from the roll. The Court ordered
Lenmed to pay costs of both applications on an attorney and client scale for the
abuse of the processes of the Court.