THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 115/2020

In the matter between:
KURT ROBERT KNOOP NO

FIRST APPELLANT
JOHAN LOUIS KLOPPER NO

SECOND APPELLANT
and
CHETALI GUPTA

RESPONDENT
MAHOMED MAHIER TAYOB

INTERVENING PARTY

Neutral citation: Knoop and Another NNO v Gupta (No 1) (115/2020)
[2020] ZASCA 149 (19 November 2020)
Coram:
WALLIS, MBHA and MOCUMIE JJA and EKSTEEN and
MABINDLA-BOQWANA AJJA
Heard:
6 November 2020
Delivered: The order in this case was delivered orally to the parties on
6 November 2020 and furnished to them electronically that day. This
judgment was handed down electronically by circulation to the parties’
representatives by email, publication on the Supreme Court of Appeal
website and release to SAFLII. The date and time for hand-down of the
judgment is deemed to be 09h45 on 19 November 2020.
Summary:  Suspension of operation of order pending an appeal –
section 18(1) of Superior Courts Act 10 of 2013 – leave to execute on

order in terms of s 18(3) of Act – requirements – urgent appeal in terms
of s 18(4) of Act – suspension of order granting leave to execute in terms
of s 18(4)(iv) of Act – whether court empowered to order that suspension
would not operate – such an order a nullity.

ORDER

On appeal from: Gauteng Division of High Court, Pretoria
(Ledwaba DJP, Janse van Nieuwenhuizen J and Senyatsi AJ concurring,
sitting as court of first instance):

The appeal is upheld with costs, such costs to include those
consequent upon the employment of two counsel.
The order of the full court is set aside and replaced by the
following order:
'The application is dismissed with costs, such costs to include those
consequent upon the employment of two counsel.'
It is declared that pending the finalisation of this appeal:
(a)
The operation and execution of the order of the full court granting
leave to execute in terms of s 18(1), read with s 18(3), of the Superior
Courts Act 10 of 2013 was suspended in terms of s 18(4)(iv) of the
Superior Courts Act 10 of 2013.
(b)
The appellants were not validly removed from office as business
rescue practitioners in respect of Islandsite Investments One Hundred and
Eighty (Pty) Ltd (Islandsite) and Confident Concept (Pty) Ltd (Confident
Concept).
(c)
The directors of  Islandsite and Confident Concept were not
entitled to act on the order for the removal of the appellants as business
rescue practitioners in those two companies by nominating new business
rescue practitioners and the appointments of Mr Tayob in respect of
Islandsite and Mr Naidoo in respect of Confident Concept were invalid.
(d)
The notices of termination of business rescue given by Mr Tayob
in respect of Islandsite and Mr Naidoo in respect of Confident Concept in

terms of s 132(2)(b) of the Companies Act 71 of 2008 were invalid and of
no force and effect.
(e)
Nothing in this order validates or invalidates any other action taken
by Islandsite and Confident Concept since 7 February 2020 with the
authority of Mr Tayob and Mr Naidoo as the case may be.
It is further declared that pending the finalisation of the main
appeal under Case No 116/2020 Islandsite and Confident Concept remain
in business rescue under the supervision of the appellants in accordance
with their original appointments as business rescue practitioners.

JUDGMENT

Wallis
JA
(Mbha
and
Mocumie
JJA
and
Eksteen
and
Mabindla-Boqwana AJJA concurring)

[1] The immediate execution of a court order, when an appeal is
pending and the outcome of the case may change as a result of the appeal,
has the potential to cause enormous harm to the party that is ultimately
successful. That was well-illustrated by the facts in Philani-Ma-Afrika,1
where the judge granted leave to appeal against an eviction order and at
the same time gave leave to execute. Only an urgent application to the
Constitutional Court, made in the mistaken belief that the execution order
was not appealable to this court, forestalled the inevitable and irreparable
harm that would have resulted from giving effect to the execution order.
In giving the judgment of this court, Farlam JA said:2 'The facts of this
case provide a striking illustration of the need for orders of the nature of

1 Philani-Ma-Afrika and Others v Mailula and Others [2009] ZASCA 115; 2010 (2) SA 573 (SCA);
[2010] 1 All SA 459 (SCA).
2 Ibid para 20.

the execution order to be regarded as appealable in the interests of
justice.' There can be little doubt that what occurred in Philani-Ma-Afrika
led to the statutory provisions that now govern the grant of leave to
execute ('execution orders').

[2] At common law, unless the court in the exercise of a discretion
ordered otherwise, an application for leave to appeal and an appeal
pursuant to leave being granted suspended the operation of the order. It
was not open to the successful party to execute on, or otherwise act
pursuant to, that order.3 This common law rule and the power to grant an
execution order is now expressly embodied in s 18(1), read with s 18(3),
of the Superior Courts Act 10 of 2013 (the SC Act). The grant of leave to
execute is constrained by the requirement that it may only be granted if
there are exceptional circumstances; if the applicant will suffer
irreparable harm if it is not granted; and if the grant will not cause the
respondent to suffer irreparable harm. A further safeguard against the risk
of harm being caused by an execution order is the automatic right to an
urgent appeal given by s 18(4). Pending such an appeal the statute
expressly provides in s 18(4)(iv) that the operation of the suspension
order is itself suspended. This case illustrates what can go awry when a
court attempts to override that statutory provision. But first, the
background.

Background
[3] The
shareholders
in
equal
shares
of
two
companies,
Islandsite Investments One Hundred and Eighty (Pty) Ltd (Islandsite) and
Confident Concept (Pty) Ltd (Confident Concept), are the respondent,

3 South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) 1977 (3) SA 534 (A)
(South Cape Corporation) at 544H-545G.

Mrs Gupta, her husband, Mr Atul Gupta, and Mr Gupta's two brothers,
Arti and Rajesh Gupta (hereafter 'the Guptas'). Their business affairs have
come to public attention through media reports, the 'State of Capture'
report by the Public Protector, Ms Thuli Madonsela, and the activities and
daily public hearings of the Commission of Inquiry into Allegations of
State Capture, known eponymously as the Zondo Commission after the
commissioner, Deputy Chief Justice Raymond Zondo. The Commission
was appointed in fulfilment of the remedial action determined by the
Public Protector in her report.

[4] In consequence of allegations made about the Guptas a number of
companies in the group through which the Guptas conducted their
business activities became 'unbanked', because the major banks in South
Africa were not prepared to afford them banking facilities. This precluded
them from continuing with their business operations and very probably
rendered them commercially insolvent.4 In the result Islandsite and
Confident Concept were placed under supervision and went into
voluntary business rescue on 16 February 2018. Six other companies in
the group were placed under business rescue at the same time. These did
not include Oakbay Investments (Pty) Ltd (Oakbay), the company that
controlled the operations of all the other companies in business rescue. It
is convenient to refer to these companies generally as the Oakbay Group.
Forty percent of the shares in Oakbay are owned by Islandsite and the
balance by Mr and Mrs Gupta. Its acting Chief Executive Officer (CEO)
is Ms Ronica Ragavan.

4 Murray NO and Others v African Global Holdings (Pty) Ltd and Others [2019] ZASCA 152; 2020
(2) SA 93 (SCA); [2020] 1 All SA 64 (SCA).

[5] The present appellants, Mr Knoop and Mr Klopper, were appointed
as the business rescue practitioners (BRPs) in respect of Islandsite and
Confident Concept5 and also held appointments as BRPs in respect of
some of the other companies in the Oakbay Group. Although appointed at
the instance of the directors (Ms Ragavan and Mr Ashu Chawla in the
case of Islandsite, and Mr Chawla in the case of Confident Concept) on
the recommendation of the attorneys advising the Guptas, within a short
period disputes arose between the BRPs, Ms Ragavan and other
employees in the Oakbay Group. These need not be described here, but
they led to Mrs Gupta making an application on 28 November 2018, on
the basis of an affidavit by Ms Ragavan, for the removal of the BRPs of
these two companies in terms of s 139(2) of the Companies Act 71 of
2008 (the Act). That application came before a specially constituted full
court of the Gauteng Division of the High Court, Pretoria (Ledwaba DJP,
Janse van Niweuwenhuizen J and Senyatsi AJ) and succeeded. An order
for the removal of the BRPs (the removal order) was granted.

[6] Messrs Knoop and Klopper lodged an application for leave to
appeal against the removal order and were met with an application for
leave to execute, brought on behalf of Mrs Gupta on the strength of an
affidavit deposed to by Ms Ragavan. On 7 February 2020 the application
for leave to appeal to this court against the removal order succeeded. An
execution order was also granted in terms of ss 18(1) and (3) of the
SC Act. On 12 February 2020, as was their right and as was expected,6
Messrs Knoop and Klopper lodged notice of an extremely urgent appeal
to this court. This is the appeal dealt with in this judgment. The following
day they lodged their notice of appeal against the removal order.

5 They were jointly appointed in relation to Islandsite and Mr Knoop was the sole appointee in relation
to Confident Concept.
6 According to counsel for Mrs Gupta.

Subsequent events
[7] After the execution order was granted arrangements were made –
presumably by the boards of directors of the two companies – to have
Mr M M Tayob appointed as the business rescue practitioner in respect of
Islandsite and Mr S M Naidoo appointed as the business rescue
practitioner in respect of Confident Concept. According to an affidavit
filed by Mr Tayob his appointment was made on 10 February 2020 and I
will assume that Mr Naidoo was appointed on about the same date. We
do not know whether notice of that appointment was filed with the
Companies and Intellectual Property Commission (the CIPC) as required
by s 129(4)(a) of the Act, or whether and when notice was given to
affected parties in terms of s 129(4)(b), but I will assume that there was
proper and timeous compliance with these statutory requirements. What
is relevant for present purposes is the steps taken, on the basis of these
appointments, to bring these proceedings and the business rescue of the
two companies, to an end.

[8] On 13 March 2020, Mr Tayob delivered a notice purporting to
withdraw the main appeal insofar as it related to Islandsite. On
17 March 2020, Mr Naidoo purported to do the same insofar as
Confident Concept was concerned. This precipitated a paper war between
the attorneys acting for Messrs Knoop and Klopper and those
representing Mrs Gupta. On 9 April 2020, Mr Krause of BDK Attorneys
wrote to the registrar asserting that Messrs Klopper and Knoop had been
'stripped of their capacity' as BRPs; had no locus standi and no right of
appeal; and asking that the urgent appeal should not be enrolled, but
should be disposed of by the President under Rule 11(1)(b) of the
Supreme Court of Appeal Rules. It is difficult to conceive of a more
misconceived request by a legal practitioner. The rule empowers the

President to give such directions as she may consider just and expedient
'in matters of practice, procedure and the disposal of any appeal'. No
sensible reading of the rule could lead anyone to think that it entitled the
President of this court to dispose of an appeal without placing it before a
bench properly constituted to consider the issues raised by the appeal,
including the question of the entitlement of the appellants to pursue an
appeal.

[9] It is noteworthy that Mrs Gupta's attorneys did not ask for the
appeal to be enrolled as a matter of extreme urgency as provided in
s 18(4)(iii) of the SC Act. Indeed, they asked that it not be enrolled at all.
This is both odd and unexplained. If their client thought that she would
suffer irreparable harm by Messrs Knoop and Klopper remaining in
office, one would have expected them to ask the court to expedite the
urgent appeal to remove any obstacle to their removal. Had that been
done immediately the notice of appeal was lodged on 12 February 2020,
the appeal could have been set down for an urgent hearing in the
February term that was about to commence and disposed of by the end, or
shortly after the end, of that term.

[10] The contention that Messrs Knoop and Klopper, who were cited in
their capacity as business rescue practitioners nomine officio, no longer
had any locus standi to pursue the main appeal, because they had not
sought or obtained leave to appeal in their personal capacities was refuted
by their attorneys. They asked for the urgent appeal to be enrolled. The
outcome of this pointless spat was that the Deputy President quite
properly refused to determine these legal issues on the correspondence
and directed that the urgent appeal and the main appeal be set down for
hearing together. They were both enrolled for hearing before us on

6 November 2020. On 5 October 2020 the attorneys delivered a notice
that the parties wanted a web-based hearing.

[11] Heads of argument were delivered in accordance with the rules.
Counsel for Messrs Knoop and Klopper submitted that the urgent appeal
had been rendered moot by the Deputy President's order, as the outcome
of the main appeal would render it unnecessary to determine the urgent
appeal. However, in making that submission they had counted on there
being no further actions by Mr Tayob in relation to Islandsite and Mr
Naidoo in respect of Confident Concept. In this they fell into error as the
following paragraphs demonstrate.

[12] On 12 October 2020, Mr Tayob lodged an application for leave to
intervene in the main appeal for the sole purpose of placing further
evidence before the court. While his notice of motion and affidavit did
not express any view about the proper disposition of the main appeal – it
will be recalled that he had purported to withdraw it – the terms of the
affidavit were plainly directed at securing the dismissal of that appeal
insofar as it related to Islandsite. On 22 October 2020, the court received
a letter from the attorneys on behalf of the appellants saying that they
would need time to respond to his affidavit and the four lever arch files of
evidence to which it referred and that Mr Tayob might wish to reply to
their answering affidavit. In the circumstances they said the appeals
would need to be adjourned.

[13] All this came only two weeks before the appeals were due to be
heard, when the preparation by the members of the court was well
advanced. Bearing in mind that the appeal against the execution order
was required by the provisions of s 18(4)(iii) to be heard as a matter of

extreme urgency and had already been delayed by nine months, we were
not minded, without first hearing the parties, to agree either to Mr Tayob
being allowed to intervene, or to the postponement of the appeals.

[14] We had started preparing a directive to the parties governing the
further conduct of the proceedings, when our attention was drawn to a
news report that Mr Tayob had purported to terminate the business rescue
and restore Islandsite to its directors. On Monday, 26 October 2020, the
respondent's attorneys confirmed this by delivering a letter to the registrar
attaching a copy of a document from the CIPC reflecting that the business
rescue of Islandsite had been terminated by Mr Tayob and recorded by
CIPC on 16 October 2020. The letter indicated that in the circumstances
Mr Tayob would not be pursuing his application to intervene in the main
appeal and it would not be necessary for the appeals to be adjourned as
suggested by the appellants' attorneys.

[15] The impression given by these actions on the part of Mr Tayob was
that they might have been directed at stultifying the appellants' appeals
both against the execution order and against the removal order. That was
of concern, because our law is clear that if that is done with dolus it may
amount to contempt of court. As long ago as 1906, Mason J in Li Kui Yu7
said:
' …  where a person knows or has reason to believe or ought to know that an
application is being made to the Court for a certain purpose --- where he has that
knowledge, or that suspicion, then, if he takes any action before the Court can be
approached, the Court will regard that as an interference with the administration of
justice, and will exercise its powers to prevent itself being defeated by anything of
that kind.’

7 Li Kui Yu v Superintendent of Labour 1906 TS 181 at 190.

Subsequent cases have stressed the need for there to be an intention to
defeat the ends of justice amounting to dolus.8 In Yamamoto
De Villiers JP gave, as examples of such conduct, procuring the
disappearance of a witness knowing that they had been subpoenaed to
appear or removing goods with the object of defeating a possible order of
court. The question is whether it is 'manifest that there was an ulterior
object – namely to obstruct the due course of justice.9 However, in oral
argument counsel for the appellants said that a finding on this was not
necessary for the determination of the appeal and we have not pursued the
matter further. To do so would require further evidence.

[16] The following directive was issued to the parties and Mr Tayob
concerning the conduct of the appeals:
'The judges have considered the application for an adjournment of the main appeal
under Case No 116/2020 and Mr Tayob’s application for leave to intervene in that
appeal and to tender further evidence. Neither application is granted at this stage.
They will be considered and disposed of together with the appeal in
Case No 115/2020 in the scheduled appeal hearing on 6 November 2020. In addition,
since receiving those applications the attention of the judges was drawn to a media
report that Mr Tayob had purported to terminate the business rescue and restore the
company to its directors. The respondent’s attorneys sent a letter to the Registrar of
this court on 26 October 2020 recording the termination of business rescue in relation
to that company. As these intervening events may affect the conduct of the
proceedings, the court gives the following directive for the hearing on 6 November:
Mr Tayob is to deliver an affidavit by no later than 30 October 2020 in which
he is to inform the court:
(a) when he terminated the business rescue and provide particulars, including copies
of all documents showing the steps taken in terms of s 141(2)(a) or (b) as the case

8 Fein and Cohen v Colonial Government (1906) 23 SC 750; Yamamoto v Athersuch and Another 1919
WLD 105 at 106.
9 Fein and Cohen v Colonial Government at 758.

may be of the Companies Act, 71 of 2008 in seeking the termination of the business
rescue;
(b) when he formed the intention to terminate the business rescue;
(c) the basis upon which he gave notice to the Commission in terms of s 132 (2)(b),
read with s 141 (2) of the Companies Act 71 of 2008.
Mr Tayob is to file heads of argument not exceeding 15 pages in length by no
later than 30 October 2020 dealing with the following matters:
(a)
As the operation of the execution order in terms of ss 18(1) and (3) of the
Superior Courts Act 10 of 2013 (the Act) was automatically suspended in terms of
s 18(4)(iv) of the Act, on what basis does he contend that he has a legal interest in the
outcome of the appeal in Case No 116/2020 and, if he did so, on what basis was he
entitled to terminate the business rescue?
(b)
Given the likelihood that the evidence he now seeks to tender will be disputed,
on what basis is it admissible at the stage of an appeal?
(c)
The delay in bringing the application for leave to intervene.
The parties and Mr Tayob are to be represented at the hearing on
6 November 2020. The hearing will commence at 9.45am by dealing with the urgent
appeal under Case No 115/2020. The appellants will be allocated 35 minutes and the
respondent 35 minutes, with 5 minutes for a reply. Counsel for Mr Tayob will be
entitled to address the court on issue 1(a) above for no more than 15 minutes, subject
to the directions of the court.
Judgment in the urgent appeal under Case No 115/2020 will then be reserved
and the court will adjourn to consider the further disposition of the appeal in
Case 116/2020. When it resumes it will either grant an adjournment and hear
argument on the wasted costs occasioned by the adjournment, or it will proceed to
hear the appeal in accordance with directions to be given at that stage of the hearing.
Pending the hearing on 6 November 2020 Mr Tayob is to take no further steps
to give effect to any purported termination of the business rescue proceedings or in
any way to transfer control, or facilitate the transfer of control, of the company under
business rescue, Islandsite Investments 180 (Pty) Ltd, to its directors.
The local attorneys for Mr Tayob, who are also the local attorneys for
Mrs Gupta in these appeals, are directed forthwith to draw their client’s attention and
that of the principal deponent to the affidavits on her behalf, Ms Ragavan, to the terms
of these directives and in particular paragraph 5 thereof.

7 Any party affected by this directive is given leave to apply to the presiding judge on
notice to the Registrar and the parties to the appeals for a variation of the terms of the
directive.’

[17] Mr Tayob filed an affidavit and heads of argument, and was
represented before us by counsel. In consequence of the directive,
supplementary heads of argument were delivered on behalf of the
appellants dealing with the suspension of the execution order and the
urgent appeal. Mrs Gupta's attorneys wrote to the Registrar objecting to
the supplementary heads of argument and sought a direction in that
regard. We indicated that whether the supplementary heads would be
accepted would be dealt with at the hearing. The attorneys were advised
that if their counsel thought it appropriate to deliver supplementary heads
of argument their reception would likewise be dealt with at the hearing.
On the morning of the appeal they delivered two sets of supplementary
heads of argument, one dealing with mootness and the other with the
merits of the urgent appeal. Neither party suggested that we should
disregard these supplementary heads and we are grateful to counsel on
both sides for the assistance they have provided.

[18] The final development came on 2 November 2020 when the
Registrar received a letter from Mrs Gupta's attorneys informing the court
that on 23 October 2020 Mr Naidoo had, like Mr Tayob, purported to
terminate the business rescue in respect of Confident Concept. That
completed the background against which we dealt with this urgent appeal.
Had it been heard and disposed of as a matter of extreme urgency as
provided in the SC Act the court would simply have had to determine
whether the execution order should have been granted. Instead it was
faced with a number of other issues arising from the basic question of

whether the execution order was enforceable and could validly be acted
upon pending the hearing of the urgent appeal. How that came about is
set out in the next section of this judgment.

Was the execution order enforceable?
[19] Section 18(4) of the SC Act reads as follows:
' 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.’
(My emphasis)

[20] The section provides a safeguard against irreparable prejudice
being occasioned as a result of a court granting an execution order when
it should not have done so. The court must record its reasons immediately
and the aggrieved party has an automatic right of appeal, unlike the
ordinary situation where it is necessary to obtain leave to appeal. An
appeal against an execution order is one of right and the party that
obtained the execution order cannot object to it. If they wish to sustain the
execution order, they must oppose the appeal. If they wish to avoid being
prejudiced by the execution order being suspended, their remedy is to
approach the head of the court to which the appeal lies and take all steps
within their power to secure a hearing of the extremely urgent appeal for
which the section provides. As noted above, Mrs Gupta's attorneys did
nothing of the sort, and at every stage have sought to rely on
technicalities to avoid both appeals being heard on its merits.

[21] As an example of what is envisaged by the section, when Fisher J
granted an execution order on 18 April 2018 against Ms Ragavan and
others at the instance of Messrs Knoop and Klopper, giving the BRPs
access to the premises from which the companies under business rescue
operated, Ms Ragavan's appeal was heard on 23 April and dismissed on
3 May 2018. Appeals under s 18(4) can be disposed of equally
expeditiously by this court. In Ntlemeza10 the execution order was granted
on 12 April 2017; the high court furnished its reasons on 10 May 2017;
the appeal was heard on 2 June 2017; and judgment was delivered on
9 June 2017.11 Had the President been approached shortly after
12 February 2020 for a date for an urgent appeal it could easily have been
accommodated in the first term of this year.

[22] The provisions of s 18(4)(iv) are clear and emphatic. An execution
order is suspended pending an urgent appeal by the aggrieved party.12
The suspension of the original order in terms of s 18(1) of the SC Act
continues until the disposal of the urgent appeal. In those circumstances it
may well be asked on what basis Messrs Tayob and Naidoo were
appointed and on what basis they have acted as BRPs since their
appointment; purported in that capacity to withdraw Messrs Knoop and
Klopper's appeals; and now, as the appeal hearing was looming,
purported to terminate the business rescue in relation to both companies?

10 Ntlemeza v Helen Suzman Foundation and Another [2017] ZASCA 93; 2017 (5) SA 402 (SCA);
[2017] 3 All SA 589 (SCA) (Ntlemeza).
11 In University of the Free State v Afriforum and Another [2016] ZASCA 165; 2018 (3) SA 428
(SCA); [2017] 1 All SA 79 (SCA) (UFS v Afriforum) the execution order was granted on 21 July 2016
and affected the university's lecture arrangements for the ensuing academic year. The appeal was heard
at the beginning of the November term on 3 November and judgment was delivered on 17 November.
In Premier for the Province of Gauteng and Others v Democratic Alliance and Others [2020] ZASCA
136 the execution order was granted on 20 June 2020 and the appeal was heard on 17 August 2020.
12 Minister of Social Development and Others v Justice Alliance of South Africa and Another [2016]
ZAWCHC 34 (Justice Alliance) para 2.

[23] The answer to those questions lies in the following paragraphs of
the judgment granting leave to execute.
'[23]
In terms of section 18(4)(ii) the respondents have an automatic right of appeal
to the next highest court, being the Supreme Court of Appeal.
[24] Section 18(4)(iv) provides that the order will automatically be suspended
pending the outcome of the appeal.
[25] The suspension would in the normal course require a further application for
leave to execute.
[26] The Supreme Court of Appel in Ntlemeza v Helen Suzman Foundation 2017
(5) SA 402 (SCA) was alive to the multiplicity of applications that would follow in
view of the provisions of section 18(4)(iv) and held that a court seized with an
application in terms of sections 18(1) and (3) may order that the order will operate
and be executable despite the noting of any further appeals by any party.
[27] The principle underlying the decision of the Supreme Court of Appeal in
Ntlemeza supra is the inherent right of courts to control its own judgments to prevent
a toing and froing of litigants [See Ntlemeza supra at paragraph [32]].
[28] In executing our inherent right in this regard an order that any present or future
appeals, applications and petitions by any party relating to this judgment shall not
suspend the operation of the order granted on the 13 December 2019 shall follow.'

[24] In the result, apart from granting leave to execute the full court
granted the following order:
'Any present or future appeals, applications and petitions by any party relating to this
judgment shall not suspend the operation of the order granted on the
13 December 2019.'
I will refer to this as the suspension order.

[25] The suspension order was explicitly directed at overriding the
provisions of s 18(4)(iv) and Islandsite and Confident Concept took
advantage of it in the respects set out above. That might not have
mattered practically so far as this appeal and the main appeal are
concerned, had Messrs Tayob and Naidoo done nothing more than

purport ineffectually to withdraw Messrs Knoop and Klopper's appeals.
However, Mr Tayob's application to intervene in the main appeal
necessitated, in the first instance, a consideration of his locus standi to do
so. The subsequent conduct of both Mr Tayob and then Mr Naidoo aimed
at terminating the business rescue of both companies, on which
Mrs Gupta's attorneys relied in contending that the appeals were now
moot, compelled us to consider whether the full court's order was
properly granted. If it was not, the further question would arise of the
validity of the steps taken in reliance upon it.

[26] These issues arose because Mrs Gupta and her attorneys, who
informed us in a letter on 2 November 2020 that they acted also for
Islandsite, presumably on the instructions of the Guptas as a whole,
sought to rely on the validity of the full court's order seeking to override
s 18(4)(iv). They relied on the validity of the actions of the substitute
BRPs in order to advance three contentions. Firstly, they contended that
Messrs Knoop and Klopper had no locus standi to appeal because their
removal and replacement meant that they lacked any official capacity and
standing to pursue the appeal as BRPs. Secondly, they contended that the
substitute BRPs had withdrawn the appeal insofar as they were appeals
by the BRPs of Islandsite and Confident Concept. Thirdly, and most
recently, they claimed that in consequence of the termination of business
rescue in relation to both companies the main appeal had become moot. I
turn then to address these questions commencing with the validity of the
full court's order.

Was the full court's order valid?
[27] The short answer to that question is 'No'. There are four reasons
why this is so. They are:

(a)
No such order was asked for in the application for leave to execute.
We were informed that none of the parties were called upon to address
the court on this specific issue and that the court made the order mero
motu. In the result it was granted without affording Messrs Knoop and
Klopper a hearing on the issue.
(b)
The order flew directly in the face of the statute, that explicitly says
that pending an urgent appeal under s 18(4) the operation of an execution
order is suspended.
(c)
Ntlemeza not only did not provide any authority in favour of the
grant of such an order, but was authority against it.
(d)
The inherent power of a court to regulate its own procedure cannot
be used to override the provisions of a statute directly governing the
issue.

[28] The first reason requires little explanation. Section 34 of the
Constitution guarantees a 'fair public hearing' before a court. In
De Beer,13 Yacoob J said: 'A fair hearing before a court as a prerequisite
to an order being made against anyone is fundamental to a just and
credible legal order.' Where an issue is not raised in the pleadings or
affidavits in a case, and the order granted is one on which neither party
has been heard, there is a breach of a fundamental constitutional right.
Had the court raised the issue with counsel, the fact that it had no power
to grant such an order would have been dealt with. Any misconception in
regard to Ntlemeza and the scope of its inherent power to regulate its own
procedure, could have been dispelled. On that ground alone the
suspension order should not have been granted.

13 De Beer NO v North Central Local Council and South Central Local Council and Others
(Umhlatuzana Civic Association Intervening) [2001] ZACC 9; 2002 (1) SA 429 (CC) para 11.

[29] The language of s 18 (4)(iv) is explicit and allows for no
misunderstanding. The operation of an execution order is suspended
pending the outcome of an urgent appeal against that order. That is the
statutory position and a court can no more grant an order contrary to a
statute, than it can order a party to perform an illegal act.14
Mr Tsatsawane SC, who appeared for Mrs Gupta here, but not in the
full court, quite properly accepted that the correct position is that the high
court could not rely on its inherent jurisdiction to grant an order that was
in direct conflict with the statute. Unless the statutory provision in
question is subject to a constitutional challenge – and none was raised in
this case – it must be applied. Mr Cassim SC, who appeared for Mr
Tayob following the court's directive, conceded from the outset that the
purported override of the statutory suspension of the execution order was
a nullity.

[30] Mr Snijders, junior counsel for Mrs Gupta, advanced an argument
that the wording of s 18(4)(iv) reflected the wording of s 18(1) and
therefore it was open to the court to revert to the latter section in order to
suspend the suspension of the execution order. There is no merit in the
argument. The fundamental difference between the two sections is that
the suspension provision in s 18(1) is qualified by the words 'unless the
court under exceptional circumstances orders otherwise' whereas there is
no such qualification in s 18(4)(iv). To stress the point the suspension of
the execution order under that section is said to be 'automatic'.

[31] The reliance on Ntlemeza was misplaced. That was an urgent
appeal where a preliminary argument was advanced that a pending

14 Hosain v Town Clerk Wynberg 1916 AD 236 at 240; Pottie v Kotze 1954 (3) SA 719 (A) at 726H-
727A.

application for leave to appeal or a pending appeal was a jurisdictional
requirement for the grant of an execution order. Leave to appeal had been
refused and it was submitted that the court was precluded from granting
an execution order because there was then no application for leave
pending, although an application to this court for such leave was highly
likely and duly materialised. The argument was rejected as inconsistent
with the language of s 18(1), which does not make an application for an
execution order dependent on a pending application for leave to appeal or
an appeal at the time the application is made. The court pointed out that
once an application for leave to appeal was lodged with this court,
execution of the high court order would be stayed and it would be open to
the respondents to make an application for an execution order. The court
remarked that courts are guardians of their own process and should avoid
'a to-ing and fro-ing of litigants', but that related solely to the
interpretation of s 18(1). It did not mean that a court could allow
execution to take place in terms of an execution order when the statute
said that order was automatically suspended pending the exercise of the
right to an extremely urgent appeal. Other than the fact that the judgment
set out s 18 as a whole, including s 18(4)(iv), it did not refer to the latter
section and did not question that the effect of the section was to suspend
the execution order pending an appeal against it.

[32] Paragraphs 27 and 28 of the full court's judgment, quoted above in
para 23, suggest that it thought that it could create a right to reverse the
automatic suspension of its execution order on the basis of its inherent
power to protect and regulate its own process. But that power is one to
protect and regulate process in cases properly before it, not to assume
powers that would override the explicit provisions of the statute. That
there was no application before the full court for an order granting leave

to execute on the execution order pending the appellants urgent appeal
has already been dealt with. However, if there had been such an
application, s 18(4)(iv) provided a complete answer to it. The
Constitutional Court pointed out in Molaudzi15 that the inherent power of
courts to regulate their process does not apply to substantive rights, but
rather to procedural or adjectival rights. The position is clear that Messrs
Knoop and Klopper had a right to an urgent appeal and a right not to have
the execution order implemented against them – something that would
have substantive law consequences – until that appeal had been disposed
of. Protecting and regulating the court's process could not be invoked to
deprive them of those rights.16

[33] It follows that the full court's suspension order, purporting to
override the suspension of its execution order, was invalid. It had no
power and no authority to make that order. It is inexplicable that it made
the order without being asked to do so and without having heard
argument. The order was void. In very similar circumstances that was the
conclusion of this court in Motala.17 There a company was placed under
judicial management in terms of the Companies Act 61 of 1973 (the
1973 Act) and the court made an order appointing two named individuals
as joint judicial managers. It had no power to do that because s 429 of the
1973 Act vested the power of appointment exclusively in the Master.18
The Master was caught between Scylla and Charybdis, or in the modern
iteration of that classical allusion, between a rock and a hard place. The

15 Molaudzi v The State [2015] ZACC 20; 2015 (2) SACR 341 (CC) para 33.
16 One cannot alter a statutorily prescribed procedural situation by resort to the court's inherent powers
to regulate process, any more than the inherent power to develop the common law can be invoked to
change the meaning of a statute. See The Minister of Safety and Security v Sekhoto and Another [2010]
ZASCA 141; 2011 (5) SA 367 (SCA) [2011] 2 All SA 157 (SCA) para 22.
17 Master of the High Court Northern Gauteng High Court, Pretoria v Motala NO and Others [2011]
ZASCA 238; 2012 (3) SA 325 (SCA).
18 Ex parte The Master of the High Court South Africa (North Gauteng) 2011 (5) SA 311 (GNP).

unpalatable choices facing him were to act in terms of the court order by
issuing certificates of appointment in disregard of the statute, or to act in
terms of the statute and make appointments as he deemed appropriate, but
disregard the court order. He chose the latter and declined to appoint the
one person named in the court order on the grounds that he was
unqualified for appointment and to do so was in conflict with the
1973 Act. The high court held him to be in contempt of court. That order
was set aside on appeal to this court on the grounds that the court order
was void from inception because it directly contradicted the statute.

[34] I am aware that some of the reasoning in Motala has been
subjected to criticism by the Constitutional Court.19 However, it remains
authority for the proposition that if a court 'is able to conclude that what
the court [that made the original decision] has ordered cannot be done
under the enabling legislation, the order is a nullity and can be
disregarded'.20 This principle can be invoked where the invalidity appears
on the face of the order as in Motala and in this case.21 The suspension
order granted by the full court was therefore a nullity.

The consequences of nullity
[35] The nullity of the suspension order meant that the execution order
was suspended pending this appeal. No lawful steps could be taken to
remove Messrs Knoop and Klopper as BRPs until the urgent appeal had
been heard and dismissed. Substitute BRPs could not be appointed to take
their place, because the order for their removal was not yet effective and

19 Department of Transport and Others v Tasima (Pty) Ltd [2016] ZACC 39; 2017 (2) SA 622
(SCA)(Tasima) paras 188-196.
20 Ibid para 197 relying on Provincial Government North West and Another v Tsoga Developers CC
and Others [2016] ZACC 9; 2016 (5) BCLR 687 (CC) (Tsoga) para 50.
21 See to similar effect City of Johannesburg v Changing Tides 74 (Pty) Ltd and Others [2012] ZASCA
116; 2012 (6) SA 294 (SCA); [2013] 1 All SA 8 (SCA) para 8, referred to in support of this proposition
in Tsoga para 48.

they were still in place. The order directing the appointment of new BRPs
was suspended and could not be acted on.

[36] The consequences of that are perfectly clear. Messrs Tayob and
Naidoo did not become BRPs of Islandsite and Confident Concept.
Messrs Knoop and Klopper remained in office as BRPs of those two
companies. The purported withdrawals of their appeals, by two
individuals who were complete strangers to the dispute between the BRPs
and Mrs Gupta, were invalid and of no effect. To be clear, that would
have been so whether or not Messrs Tayob and Naidoo's appointments
had been valid. The court had ordered that Messrs Knoop and Klopper be
removed as BRPs. They were entitled to appeal against that decision. It
was not for two people, who had no involvement in that dispute and no
authority to represent Messrs Knoop and Klopper, to withdraw their
appeals or in any other way to interfere with their constitutionally
protected right to have their dispute with Mrs Gupta resolved by a court
of law in accordance with the judicial hierarchy established by the
Constitution.

[37] For the same reason, the objection to the continued locus standi of
Mr Knoop and Mr Klopper was without merit. The convoluted argument
advanced on behalf of Mrs Gupta was that they were removed in their
capacity as BRPs and given leave to appeal in that capacity, but not in
their personal capacity. Therefore, when they were replaced as BRPs by
Messrs Tayob and Naidoo, they no longer had locus standi because they
did not have the right in their personal capacity to seek their
reinstatement. This argument went beyond fantasy into the realms of the
surreal. They had been joined in the removal application in their capacity
as BRPs. It was in that capacity that they were removed and it was that

decision that they challenged in the main appeal. Their only involvement
in their personal capacity was the failed attempt to obtain an order for
costs against them as individuals. There was nothing for them to appeal
against in their personal capacity. The effect of the argument was that
they had no right of appeal notwithstanding that the full court granted
leave to appeal to this court. The argument smacks of a desperate
endeavour to avoid the appeal being heard and the high court judgment
ordering their removal being reconsidered.

[38] It was also contended on behalf of Mrs Gupta that Messrs Knoop
and Klopper had accepted the execution order and perempted their appeal
by abiding by it and submitting in their heads of argument that it had
become moot as a result of being set down for hearing simultaneously
with the main appeal. That was clearly incorrect. The heads of argument
merely reflected the sensible view that, once the merits of the main
appeal had been disposed of, the question of leave to execute upon it
would be moot, save in respect of costs, which s 16(2)(a)(ii) of the
SC Act renders an irrelevant consideration. The correspondence made it
clear that, apart from the coincidence of the two appeals being heard on
the same day, Messrs Knoop and Klopper were persisting with the urgent
appeal. The point was rightly not pressed in argument.

[39] Potentially the most difficult issue relates to the purported
termination of the business rescue of the two companies. Reliance was
placed upon the principles in cases such as Tasima22 to contend that there
needed to be an application to set aside the termination. But that was
based upon the misconception that the termination was an official act by
the CIPC. This is not correct. When one is dealing with a company that is

22 Op cit fn 18.

placed in business rescue voluntarily by way of a resolution of the board
of directors, the process of business rescue is conducted on the basis of
the actions of the company; affected persons, that is, shareholders, any
trade union representing employees and employees;23 the BRP; and the
creditors. It is the company, acting through its directors that commences
the process and appoints the BRP.24 The company then gives notice of the
resolution to commence business rescue.25 During the course of the
business rescue the directors of the company remain in office and must
continue to perform their functions as directors26 and perform their
management functions in accordance with the express instructions of the
BRP to the extent that it is reasonable to do so.27 The BRP must
investigate the affairs of the company and develop a business rescue plan
to be considered by affected persons.28 If the plan is adopted the company
is obliged to implement it under the direction of the BRP.29

[40] If it transpires at any stage of the process that the company cannot
be rescued, the BRP is obliged to give notice of this and approach the
court for a liquidation order.30 If the business rescue plan is substantially
implemented, the BRP files a notice with the CIPC31 and the
business rescue terminates when that notice is filed.32 If the business
rescue plan is proposed and rejected and no affected person has acted to
extend it in terms of s 153 (1) of the Act, the business rescue terminates.
The BRP is obliged in that event to file a notice of termination of the

23 Definition of 'affected person' in s 128(1)(a) of the Act.
24 Sections 129(1) and (3)(b) of the Act.
25 Section 129 (4) of the Act.
26 Section 137(2)(a) of the Act.
27 Section 137(2)(b) of the Act.
28 Sections 141(1) and 140(1) of the Act.
29 Section 152(5) of the Act.
30 Section 141(2)(a) of the Act.
31 Section 152(8) of the Act.
32 Section 132(2)(c) of the Act.

business rescue.33 If at the end of the BRPs investigation, they conclude
that there are no longer grounds for thinking that the company is
financially distressed, they must inform the court, the company and all
affected persons of that fact and file a notice of termination of the
business rescue.34 On filing that notice the business rescue proceedings
end.35

[41] That summary of the process that ensues after a company enters
voluntarily into business rescue demonstrates that the CIPC has no role to
play in the process beyond receiving and maintaining in its records the
information about the commencement and termination of business rescue.
There is accordingly no public act by the CIPC that has legal efficacy and
requires to be set aside in accordance with the principles in Tasima.
Instead there is an entirely private process involving the company, the
BRP and all affected persons. The role of the CIPC is simply to hold the
public record of the company's status.

[42] The correct position is therefore that the 'termination' of the
business rescue of these two companies was effected by two people who
were not the BRPs duly appointed and in office at the time. They had no
right or power to terminate the business rescue, however much they may
have believed that they did. The termination was accordingly invalid and
void. As a result, both companies remain in business rescue. That
conclusion means that we are back where we started, with an appeal
against the execution order in this appeal and an appeal against the
removal order in the main appeal.

33 Section 153(5) of the Act.
34 Section 141(2)(b) of the Act.
35 Section 132(2)(b) of the Act.

[43] Before turning to deal with the urgent appeal it is necessary to
make it clear that, save to the extent set out above, these conclusions do
not either validate or invalidate actions by Mr Tayob and Mr Naidoo
while they were acting as the BRPs of these companies. Those actions
may have affected third parties or, for example in the case of their
remuneration, Messrs Tayob and Naidoo themselves. The precise
consequence of those actions in the light of the fact that they were not
validly appointed as BRPs will, if need be, have to be explored in other
litigation where the issues will be properly defined and those third parties
are before the court. The order makes this clear. I can then move on to the
urgent appeal.

The merits of the urgent appeal
[44] This is an appeal against the execution order. Section 18(1) of the
SC Act provides that:
‘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.’
Messrs Knoop and Klopper's removal as BRPs was therefore suspended
by their application for leave to appeal and would have continued to be
suspended after being granted leave to appeal, subject only to the
provisions of s 18(3). That section provides that:
‘A court may only order otherwise as contemplated in subsection (1) . . . 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.’

[45] These provisions have now been considered by this court in three
judgments.36 The effect of these is that an applicant for an execution order
must prove three things, namely, exceptional circumstances; that they
will suffer irreparable harm if the order is not made; and that the party
against whom the order is sought will not suffer irreparable harm if the
order is made.

[46] Courts have always eschewed any attempt to lay down a general
rule as to what constitutes exceptional circumstances.37 The reason is that
the enquiry is a factual one.38 There is a helpful summary in the
MV Ais Mamas39 that has been endorsed both by this court and by the
Constitutional Court.40 In the context of s 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.41 The exceptional circumstances must arise from the facts
and circumstances of the particular case. When dealing with someone’s
removal from office, be it a BRP or a liquidator in relation to a company,
or a trustee or an executor, or some other office bearer, the mere fact that
the court has held that they should no longer fill that office does not, in
and of itself, constitute exceptional circumstances. There must be
something more in the circumstances of the particular case that makes the
immediate implementation of the removal order necessary.

36 UFS v Afriforum op cit fn 10 paras 5-6; Ntlemeza op cit fn 9 paras 19-22; The Premier for the
Province of Gauteng and Others v Democratic Alliance and Others [2020] ZASCA 136.
37 Norwich Union Life Insurance Society v Dobbs 1912 AD 395 at 399.
38 S v Dlamini; S v Dladla and Others; S v Joubert; S v Schietekat 1999 (4) SA 623 (CC) para 75-77.
39 MV Ais Mamas: Seatrans Maritime v Owners MV Ais Mamas and another 2002 (6) SA 150 (C) at
156E-157.
40 Liesching and Others v The State [2018] ZACC 25; 2019 (4) SA 219 (CC).
41 UFS v Afriforum op cit, fn 10 para 13.

[47] The need to establish exceptional circumstances is likely to be
closely linked to the applicant establishing that they will suffer
irreparable harm if the removal order is not implemented immediately.
One can readily imagine that an order for the removal of a dishonest BRP
will provide grounds for the court to order that the removal order should
have immediate operative effect. But unless there is a real and substantial
risk of immediate and irreparable harm being suffered while waiting for
the enrolment, hearing and outcome of the appeal, the foundation for an
execution order will be absent.

[48] Section 18(3) requires the applicant for an execution order to
establish that the respondent will not suffer irreparable harm if the order
is granted. The judgment in UFS v Afriforum42 indicates that the
requirements of irreparable harm to the applicant and no irreparable harm
to the respondent, unlike the common law position, do not involve a
balancing exercise between the two, but must both be established on a
balance of probabilities. If the applicant cannot show that the respondent
will not suffer irreparable harm by the grant of the execution order that is
fatal. It is unnecessary to decide whether in those circumstances the court
would be empowered to grant other relief pending the hearing of the
appeal in order to protect the applicant's position.

[49] In Justice Alliance,43 it was held that the court has a wide
discretion to grant or refuse an execution order once the statutory
requirements are satisfied, and that prospects of success in the appeal
have a role to play in considering the exercise of that discretion. There is

42 Op cit, fn 10, para 10. Incubeta Holdings and Another v Ellis and Another 2014 (3) SA 189
(GSJ)(Incubeta) para 24.
43 Op cit, fn 11, paras 26-29.

a dictum in UFS v Afriforum44 that supports this approach, but in both
that case and Ntlemeza the record in the main appeal was not before this
court and the appeals had perforce to be decided without the full record or
any consideration of the merits of the main appeals.

[50] We had the full record in the main appeal before us and had read it
in anticipation of dealing with the main appeal, but the argument on the
urgent appeal did not include any debate over prospects of success in the
main appeal. Our finding that the three requirements for making an
execution order were not established means that we did not have to
consider whether there is a discretion once they are present and, if so,
whether the prospects of success should affect its exercise. There may be
difficulties if the high court takes the prospects of success into account in
granting an execution order, because it is not clear that the court hearing
an urgent appeal under s 18(4) will always be in a position to assess the
weight of this factor. As I have noted, in both UFS v Afriforum and
Ntlemeza the court disposed of the appeal by disregarding the prospects
of success on appeal. The urgency of the appeal almost inevitably dictates
that in this court and possibly in a full court, the appeal court will not
have the record before it and will be confined to assessing the prospects
of success in the main appeal from the judgment alone. The usual
principle that an appeal court decides the appeal on the record before the
high court cannot apply in those circumstances. If the language of s 18(4)
confers a discretion, is that a full discretion or a power, combined with a
duty to exercise that power on proof of the requirements for its

44 Op cit, fn 10, para 15. It is contrary to the approach in Incubeta that the section codifies the law
completely.

exercise?45 These issues may warrant a reconsideration of the approach in
Justice Alliance on an appropriate occasion.

Exceptional circumstances
[51] Ms Ragavan, who deposed to the founding affidavit in the
application for leave to execute, said that Mrs Gupta's case was
exceptional for the following reasons:
(a)
there had been inordinate delay in completing the business rescue,
during which damage had been caused to certain properties of Islandsite
and Confident Concept, the creditors' debts had not been settled and the
BRPs had continued to generate fees for themselves;
(b)
the business rescue plans could have been implemented by the sale
of a single asset, an aircraft owned by Islandsite that had been allowed to
fall into a state of disrepair;
(c)
this was manifestly prejudicial to the companies and the creditors;
(d)
the BRPs could not be trusted to take decisions for the companies
while the matter was delayed by an appeal 'which is in any event doomed
to predictable failure';
(e)
the BRPs had not adequately responded to certain demands made
on Mrs Gupta's behalf by her attorneys in a letter written the day after the
application for leave to appeal the removal order was served. In particular
Ms Ragavan complained that a full accounting had not been furnished.

[52] In his answering affidavit Mr Knoop dealt with each of these as
follows:
(a)
the delays in completing the business rescue had been occasioned
by the deliberate actions of Ms Ragavan and others in the employ of, or
associated with, companies in the Oakbay Group to frustrate the BRPs in

45 Schwartz v Schwartz 1984 (4) SA 467 (A).

performing their duties. The BRPs had been denied access to premises,
records and information. Properties that should have been sold could not
be sold because they were occupied by employees of the Oakbay Group
and Ms Ragavan refused to instruct these employees to vacate and said
she would oppose any attempt to evict them;
(b) every endeavour to obtain information about the aircraft, which was
owned by Islandsite and not available to be sold to satisfy
Confident Concept's debts, had been blocked. It had been removed from
South Africa and there were attempts to re-register it in the Isle of Man.
The BRPs had reason to believe that it was being used by the Gupta
family for private purposes. When its whereabouts in Dubai were
discovered, the entity having responsibility for it, DC-Aviation, refused to
provide the BRPs with any information concerning it. The potential 'sale'
was in terms of an agreement where the identity of the purchaser was not
disclosed and on terms in regard to the condition of the plane that were
extremely onerous;
(c)
the general allegations of prejudice were unparticularised;
(d)
details of the fees that the BRPs had earned were given and it was
pointed out that it had never been suggested in the removal application
that they were excessive or a ground for their removal;
(e)
the attorneys' letter had been responded to, certain undertakings
had been given and details of information about the progress of the
business rescues had been furnished. Detailed reconciliations of sales
were annexed to the affidavit.

[53] The replying affidavit delivered by Ms Ragavan does little credit to
her or to the legal practitioner or practitioners responsible for drafting it.
Its contents consisted of a number of intemperate, but unsubstantiated
attacks on Mr Knoop; repeated and unnecessary assertions of the lack of

prospects of success in obtaining leave to appeal or in any appeal; and a
joining of issue on many factual assertions thereby compounding the
already apparent dispute of fact on the papers. All in all, there was
nothing exceptional in the circumstances set out in Ms Ragavan's
affidavit. Overwhelmingly they reiterated complaints advanced in the
removal application, some being complaints that had not been dealt with
by the full court in its judgment. All of them had been dealt with
extensively in the answering affidavit and the supplementary affidavit
delivered by Mr Knoop in the removal proceedings. There were disputes
of fact on fundamental issues.

[54] The full court needed to engage with the evidence and set out in
clear terms the facts on which it based a finding that exceptional
circumstances were present, as well as an explanation of why, in its view,
those circumstances were exceptional within the context of s 18(1). This
was required in terms of s 18(4)(i), a provision designed to ensure that,
when a party against whom an execution order has been granted exercises
their right to an extremely urgent appeal, the appeal court will know
precisely why the order was granted.

[55] Regrettably the full court merely stated in para 10 that the applicant
submitted that the BRP's 'failure to meet the required standard expected
of business rescue practitioners as dealt with in the judgment of this court
constitutes exceptional circumstances'. Assuming this was intended as a
summary of Ms Ragavan's complaints set out above in para 51 of this
judgment, the complaints demonstrated that the circumstances were not
exceptional. Were these to constitute exceptional circumstances, an
execution order would have to issue in every case of the removal of a
BRP under s 139(2) of the Act, and indeed in every removal of a

liquidator, trustee, executor or similar office holder. However routine or
mundane the grounds for removal they would always be treated as
exceptional.

[56] The full court said that business rescue was intended to be a speedy
process requiring the BRPs to act in the best interests of all affected
parties, conducting themselves as officers of the court with the duties of a
director. No attempt was made to deal with the evidence of Mr Knoop in
the answering affidavit, and in his affidavits in the main application, that
the problems were caused entirely by the campaign waged by Ms
Ragavan and others to hinder and prevent the BRPs from performing
their duties. That evidence had to be accepted in accordance with the
Plascon-Evans rule.

[57]  The findings in the main judgment were summarised in saying that
the BRPs failed to discharge their duties in good faith, objectively and
impartially; failed to report criminal unlawfulness of the prior board and
shareholders to the authorities; had a conflict of interest by acting as
BRPs in respect of different entities in the Oakbay Group; and failed
properly and timeously to perform their duties. The judgment then
returned to the theme that business rescue must be a speedy process and
that the BRPs needed to adhere to the high standards set out in the Act,
and concluded:
'In our view, the purpose of business rescue proceedings combined with the interests
of all affected and the fact that the respondents failed dismally in their duties
constituted exceptional circumstances.'

[58] There were several errors in these reasons. The alleged failure to
report criminal conduct to the relevant authorities had been introduced by

the full court itself in its removal judgment, without having been raised as
a ground of complaint or dealt with in the papers. The likelihood of it
having been a ground of complaint by Mrs Gupta, speaking through
Ms Ragavan, was nil, inasmuch as any such criminal conduct would have
been by the Guptas and directors and employees of companies in the
Oakbay Group, such as Ms Ragavan and Mr Chawla. Given that it was
raised in the removal judgment, Mr Knoop set the record straight in his
answering affidavit, explaining that the BRPs had reported their
suspicions of potentially criminal conduct to the SAPS, the National
Prosecuting
Authority,
the
Special
Investigations
Unit,
the
Asset Forfeiture Unit, SARS and the Zondo Commission. The full court
was wrong to use the error as a ground for a finding of exceptional
circumstances.

[59] The reliance on the finding of a conflict of interest was also
unfounded and unjustified. In its judgment granting leave to appeal,
delivered on the same day, it had accepted that there was a difference
between its approach and that taken by a single judge in the same court in
a similar application involving the same BRPs and Tegeta, another
company in the Oakbay Group.46 The need to resolve this difference of
view was one of the grounds upon which it granted leave to appeal. A
ground on which there was room for a difference of view could not
render the circumstances exceptional.

[60]  The full court's reasons consisted entirely of generalisations and
there was no specific statement of the facts that made this case different
from other similar cases and provided exceptional grounds for departing

46 Oakbay Investments (Pty) Ltd v Tegeta Exploration and Resources (Pty) Ltd (in business rescue)
[2019] ZAGPHC 411.

from the normal rule that the removal order would be suspended pending
the outcome of the appeal. Making as much allowance as is possible for
the fact that the judgment was delivered a week after argument was
heard, it falls short of providing an explanation for finding that Mrs
Gupta discharged the onus of establishing on a balance of probabilities
that exceptional circumstances existed. Nor does a reading of the
affidavits disclose such a basis. The heads of argument delivered in
regard to the urgent appeal are long on rhetoric and assertions, but bereft
of any analysis of the evidence, or the concept of exceptional
circumstances, that would support the conclusion that such circumstances
were present in this case. The existence of exceptional circumstances was
not established.

Irreparable harm
[61]  The application for leave to execute fell at the first hurdle and the
appeal accordingly had to be upheld. However, it is desirable to point out
that neither of the other two requirements were satisfied. As to
Mrs Gupta's allegations of suffering irreparable harm, Ms Ragavan's
affidavit went off on a tangent to the business rescue in respect of these
two companies and alleged that the BRPs in their dealings with
Optimum Coal Mine (OCM) and Koornfontein had turned OCM from
being a profitable enterprise employing 2000 people to a ruin. She alleged
that assets were being sold at a fraction of their value as part of a sale of
the mine, which was the subject of litigation. She noted that an
application had been brought for the liquidation of OCM.

[62] The relevance of these allegations to Mrs Gupta suffering
irreparable prejudice justifying the immediate implementation of the
removal order in respect of Islandsite and Confident Concept was not

apparent on the papers. In any event they were firmly refuted by
Mr Knoop in his answering affidavit. He said that these companies and
their assets had been virtually destroyed before the commencement of
business rescue and alleged that Ms Ragavan had been a party to this. Ms
Ragavan in reply denied the relevance of these allegations claiming that
they had only been raised to show the poor management of the businesses
by the BRPs.

[63] Without referring to these allegations or the evidence the full court
said:
'The conduct of the respondents thus far, however, establishes a pattern of their failure
to properly conduct the business rescue proceedings. In our view the respondents lack
of insight in their failure to adhere to the high standards expected of business rescue
practitioners establishes at least on a balance or probabilities, that their continued
involvement in the proceedings would cause irreparable harm, not only to the
applicant but to all affected parties.'

[64] It is not apparent to which conduct of the BRPs reference was
being made. There was no mention of the grounds of prejudice relied on
by Mrs Gupta as set out in Ms Ragavan's affidavit. The conclusion had no
basis in the evidence. As to the position of 'all affected parties' the
majority of the affected parties in the two companies, were the three
Gupta brothers, who together own 75% of the shares in the two
companies, and their silence was deafening. They did not, publicly at
least, make common cause with Mrs Gupta in her endeavours to have the
BRPs removed. Did they support her efforts? Were they cheering her on
from the sidelines? Ms Ragavan only holds office as the acting CEO of
Oakbay by virtue of their support. Was she in receipt of instructions from
them? Nothing at all was said in this regard and nothing can or should be

inferred. But in the absence of evidence from them, the full court could
not reach generalised conclusions in regard to their interests.

[65] No irreparable prejudice to Mrs Gupta was established. Nor was
the onus discharged of showing that the BRPs would not suffer
irreparable harm as a result of an execution order being granted. Ms
Ragavan said that the only possible harm was a loss of fees. This theme
had its origins in the judgment granting the removal order, which was
taken up by Ms Ragavan in the execution application and appeared again
in the execution judgment. The full court added, even though Ms
Ragavan had not said this, that they could make up the shortfall by doing
other work as BRPs. These allegations were denied. The issue of
reputational risk as a result of being removed as BRPs in these high-
profile cases of business rescue was not canvassed. Mr Knoop pointed to
the prejudice creditors would suffer if they were removed and new BRPs
appointed with the very real risk of the approved business rescue plans
not being implemented. I am not sure that this was relevant to the
question whether he and Mr Klopper would suffer irreparable harm as a
result of the grant of such an order as that was potential harm to third
parties not the BRPs. Be that as it may, on the tenuous evidence advanced
I do not think that the onus under this head was discharged.

Result
[66] For those reasons the urgent appeal had to succeed and at the
conclusion of the argument on this appeal we granted the order set out at
the head of this judgment and below. The order was granted before we
heard argument in the main appeal and was not affected by any
consideration of the merits of the main appeal.

[67]  It remains to say something about the order. In view of the various
issues that we have had to canvass and determine before reaching the
main appeal, it was desirable that the order should reflect our conclusions
on those issues. It therefore contains declaratory orders in relation to
those issues. That is a proper approach given our power under s 19(d) of
the SC Act to 'render any decision which the circumstances may require'.
Insofar as any costs were occasioned to the appellants by Mr Tayob's
abortive attempt to intervene, while his counsel addressed us during the
argument on this appeal, the application to intervene was in the main
appeal and the costs must be dealt with there.

[68] In the result, after hearing argument in this urgent appeal and
taking the opportunity to consult among ourselves during an adjournment
of the proceedings, the following order was made:
The appeal is upheld with costs, such costs to include those
consequent upon the employment of two counsel.
The order of the full court is set aside and replaced by the
following order:
'The application is dismissed with costs, such costs to include those
consequent upon the employment of two counsel.'
It is declared that pending the finalisation of this appeal:
(a)
The operation and execution of the order of the full court granting
leave to execute in terms of s 18(1), read with s 18(3), of the Superior
Courts Act 10 of 2013 was suspended in terms of s 18(4)(iv) of the
Superior Courts Act 10 of 2013.
(b)
The appellants were not validly removed from office as business
rescue practitioners in respect of Islandsite Investments One Hundred and
Eighty (Pty) Ltd (Islandsite) and Confident Concept (Pty) Ltd (Confident
Concept).

(c)
The directors of  Islandsite and Confident Concept were not
entitled to act on the order for the removal of the appellants as business
rescue practitioners in those two companies by nominating new business
rescue practitioners and the appointments of Mr Tayob in respect of
Islandsite and Mr Naidoo in respect of Confident Concept were invalid.
(d)
The notices of termination of business rescue given by Mr Tayob
in respect of Islandsite and Mr Naidoo in respect of Confident Concept in
terms of s 132(2)(b) of the Companies Act 71 of 2008 were invalid and of
no force and effect.
(e)
Nothing in this order validates or invalidates any other action taken
by Islandsite and Confident Concept since 7 February 2020 with the
authority of Mr Tayob and Mr Naidoo as the case may be.
It is further declared that pending the finalisation of the main
appeal under Case No 116/2020 Islandsite and Confident Concept remain
in business rescue under the supervision of the appellants in accordance
with their original appointments as business rescue practitioners.

_________________
M J D WALLIS
JUDGE OF APPEAL

Appearances

For appellant:

P Stais SC (with him GD Wilkins SC)
Instructed by:

Smit Sewgoolam Inc, Johannesburg;
McIntyre Van der Post, Bloemfontein

For respondent:

NK Tsatsawane SC (with him J-P Snijders)
Instructed by:

BDK Attorneys, Johannesburg;
Honey Attorneys Inc, Bloemfontein.

For Mr M M Tayob:
NA Cassim SC (Heads of Argument by
MA Chohan and L Kutumela)

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 19 November 2020
STATUS Immediate
Please note that the media summary is for the benefit of the media and
does not form part of the judgment.

Knoop and Another NNO v Gupta (1) (115/2020) [2020] ZASCA 149 (19
November 2020)

After the hearing on 6 November 2020, the court made an order upholding the
urgent appeal by Mr Knoop and Mr Klopper against an order authorising their
removal as business rescue practitioners (BRPs) in respect of two companies
Islandsite Investments 180 (Pty) Ltd and Confident Concept (Pty) Ltd. The
companies were owned by the Gupta family, consisting of Mrs Chetali Gupta,
her husband, Mr Atul Gupta, and his brothers, Mr Arti and Mr Rajesh Gupta.
Islandsite controls Oakbay Investments (Pty) Ltd and through it the companies
constituting the Oakbay Group. They and six other companies in the Oakbay
Group had become 'unbanked' as a result of the family being associated with
allegations of 'State capture". Resolutions were passed to place all eight
companies under supervision and business rescue. Mr Knoop and Mr Klopper
were appointed as BRPs in respect of Islandsite and Mr Knoop as BRP in
respect of Confident Concept.
Disputes arose between the BRPs and representatives of the Gupta family and
the Oakbay Group. This led to considerable litigation. In November 2018, Mrs
Gupta applied to have Mr Knoop and Mr Klopper removed as BRPs in respect
of the two companies. The full court of the Gauteng Division of the High Court,
Pretoria upheld the application and granted leave to appeal to the SCA. At the

same time, it granted an execution order permitting Mrs Gupta to act upon the
removal order immediately. However, Mr Knoop and Mr Klopper had a statutory
right to an extremely urgent appeal against that decision. It was that urgent
appeal that the court heard first on 6 November 2020. Pending the hearing of
the urgent appeal the statute provided that the execution order was suspended.
The full court, however, granted an order that the urgent appeal would not
suspend the operation of the execution order and new BRPs were appointed in
respect of the two companies. In the first instance the new BRPs purported to
withdraw Mr Knoop and Mr Klopper's appeals against the removal judgment.
Mrs Gupta contended that this meant they had no legal standing to pursue the
appeal. On 12 October, the new BRP of Islandsite, Mr Mahomed Tayob, applied
for leave to intervene in the main appeal for the purpose of leading further
evidence. Four days later he purported to terminate the business rescue. The
new BRP in respect of Confident Concept, Mr Naidoo, did the same on 23
October 2020. As a result of these actions the court directed that the urgent
appeal would be dealt with at the outset of the hearing on 6 November 2020.
The SCA first dealt with the validity of the full court's order overriding the
suspension of the execution order. It held that this was invalid as it flew in the
face of the express provisions of the statute giving the right of appeal.
Furthermore, it had been granted by the court of its own volition without notice
to the parties and without affording them an opportunity to make submissions
in regard to such an order.
The invalidity of the order meant that pending the outcome of the urgent appeal
Mr Knoop and Mr Klopper remained the duly appointed BRPs in respect of
Islandsite and Confident Concept. The withdrawal of their appeals against their
removal was invalid and ineffective. The appointments of Mr Tayob and Mr
Naidoo were also invalid as were their endeavours to terminate the business
rescue process. Declaratory orders to this effect formed part of the court's
order.
On the merits of the urgent appeal, the SCA pointed out that Mrs Gupta had
been obliged to prove that the circumstances were exceptional, that she would
suffer irreparable harm if the BRPs were not removed immediately and that the
BRPs in turn would not suffer irreparable harm if they were removed
immediately. It analysed the evidence in this regard and pointed out that there

was nothing exceptional in the circumstances of the case that provided a
reason for departing from the norm that pending an appeal the execution of the
judgment appealed against is suspended. The SCA also held that neither
irreparable harm to Mrs Gupta nor the absence of irreparable harm to the BRPs
had been established. In the circumstances the appeal was upheld after
argument for the reasons set out in the judgment delivered today.