Court dismisses RGS bid against Tongaat rescue plan

2 min read

The Durban High Court has dismissed a fresh application by RGS Group Holdings (RGS) to set aside Tongaat Hulett’s business rescue plan, ruling that because the matter is already before the courts, it cannot be litigated twice.

Court dismisses RGS bid against Tongaat rescue plan
Tongaat Hulett’s business rescue plan remains in force after the Durban High Court dismissed RGS Group Holdings’ latest application to set it aside. Image: Jyothi Laldas
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In a judgment handed down by Judge Rithy Singh on 24 July, the court upheld the legal principle of lis alibi pendens, which prevents parties from pursuing the same dispute in parallel court proceedings.

“The court cannot sanction RGS running parallel litigation,” Singh said, adding that the company should pursue its original November 2024 application to its conclusion rather than initiating new proceedings.

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The judgment represents another legal victory for the Vision Consortium (Vision) and Tongaat Hulett’s business rescue practitioners, whose rescue plan remains in force while the original court challenge continues.

According to court papers, in its latest application, RGS sought an order declaring the business rescue plan unlawful and invalid, requested access to documents relating to Vision Consortium’s funding arrangements and agency agreements, and asked the court to enforce an earlier disclosure order, despite an appeal still being pending.

However, Singh found that the issues raised were substantially the same as those contained in RGS’s original application, which remains before the court.

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“I am satisfied that the relief sought in both applications is substantially the same,” she said.

Singh added that RGS had failed to identify any new facts or a fresh cause of action that would justify launching another application, and that allowing both matters to continue simultaneously would duplicate litigation, waste judicial resources, and create the risk of conflicting judgments.

Disclosure request refused

The court also dismissed RGS’s application to compel the disclosure of agency agreements and other documents linked to Vision’s funding structure, as Singh found that RGS had failed to establish a legal right to the confidential documents.

The judgment also noted that an independent facility agent had already confirmed there was no impediment to implementing the rescue transactions, weakening RGS’s argument that the documents were required.

In addition, RGS sought permission to execute an earlier disclosure order while an appeal was pending.

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The court declined the request, finding that RGS had not demonstrated the “exceptional circumstances” required by law, nor had it shown that it would suffer irreparable harm if execution was refused.

By contrast, Singh held that compelling disclosure could cause irreversible prejudice to Vision because confidential information “could never be ‘undisclosed’” should the appeal later succeed.

In a further setback for RGS, the court ordered it to pay the legal costs of the application.

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Jyothi Laldas
Jyothi Laldas is an accomplished journalist with 15 years of experience in the news media industry. She has established herself as a respected voice in the field, known for her keen insights and passion for storytelling. Jyothi grew up on a farm in rural KwaZulu-Natal, a background that instilled in her a deep appreciation for hard work and the importance of community. Her passion for writing and learning about people has been a driving force throughout her career, enabling her to connect with her audience and bring important stories to light. Jyothi‘s journalistic journey has been marked by her dedication to providing accurate and impactful reporting on a range of topics.