Can a creditor terminate an agreement with a corporate rescue company and what does a corporate rescue paramedic suspend a contract before it is terminated? Boruchowitz J. also indicated that the lifeguard s136 (2) (a) of the law had argued, because of a partial or conditional suspension of Newscafé`s obligations under the lease, whether he had been able to prevent the lessor from terminating the lease or initiating deportation proceedings. Recently, the Supreme Court of Appeal ruled in Cloete Murray NO and another v FirstRand Bank Ltd (20104/2014)  ZASCA 39 (March 26, 2015) on whether termination of an agreement constitutes an “enforcement action” that is prevented by Section 133 (1) of the company. Initially, Fourie AJA argued that it was necessary to decide whether the creditor of a business under corporate rescue could unilaterally terminate an existing agreement with the company before it was placed under the corporate bailout regime. Cloete Murray`s facts put the verdict in context. Skyline Crane Hire (Pty) Ltd (Skyline) was a company that was voluntarily placed as part of a corporate rescue within the meaning of Section 129 of the Companies Act. Prior to the company`s rescue, Skyline had already fallen behind on monthly payments to FirstRand Bank Ltd t/a Wesbank (Wesbank) under a master rate purchase contract (MISA). From the start of the company`s rescue, Wesbank sent a letter to Skyline and resigned from MISA because Skyline had not paid the monthly payments. Skyline`s Enterprise Rescue Plan (BRP) then agreed that Wesbank collect and sell the goods and that the proceeds be credited to its account. Skyline was later liquidated.
The liquidators found that Wesbank`s cancellation of MISA was contrary to the provisions of Section 133, paragraph 1, as it constituted an “enforcement measure” and that the cancellation was unlawful without the BRP`s consent or leave of the court. However, there is a possible counter-argument that is in the common law principle of reciprocity. In its decision by BP Southern Africa (Pty) Ltd/Intertrans Oil SA (Pty) Ltd e.a. a. 2017 (4) SA 592 (GJ), the Tribunal found that the broad wording of Section 136(2)a) includes the suspension of a contractual obligation by the company`s director to have a reciprocal obligation on the creditor. The court also stated that: lawyer Micarle van Heerden of Gillan and Veldhuizen Incorporated, who advise Hobbs Sinclair in many cases of the company`s rescue, advises owners to review their leases and agreements before their tenant participates in the rescue of the business in order to protect themselves from the effects of this lawsuit. “If a landlord is already in a situation where their tenant has entered the rescue of the business, a paramedic should be immediately contacted to advise the landlord on his rights throughout the process.” This section has been the subject of much discussion within the South African Law Brotherhood, with some corporate doctors arguing in the past that if part of a contract with a company terminated an agreement by rescuing, it would amount to “execution action”.