A-Team Drankwinkel BK and Another v Botha NO and Another (659/91) [1993] ZASCA 104; 1994 (1) SA 1 (AD); [1994] 1 All SA 284 (A) (30 August 1993)

A-Team Drankwinkel BK and Another v Botha NO and Another (659/91) [1993] ZASCA 104; 1994 (1) SA 1 (AD); [1994] 1 All SA 284 (A) (30 August 1993)

The majority held that the trust, as seller, validly reserved ownership in the business and its assets, excluding the liquor licence, which passed to the buyer by operation of statute. The retention of ownership clause was effective only in respect of the business and its goodwill, not the liquor licence, as statutory provisions governing liquor licences preclude the reservation of ownership in the licence itself. Section 84(1) of the Insolvency Act does not apply to the sale of a business, as it is limited to corporeal movable goods under credit agreements. The trust's rights were limited by agreement to those available under section 84(1), but since the business was sold for less than...

Citation
[1993] ZASCA 104
Parties
Appellant: A-Team Drankwinkel BK; Appellant: T J H Potgieter; Respondent: P D G Botha NO; Respondent: H S Faurie NO
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
30 August 1993
Case Number
659/91
Procedural Posture
Civil Appeal / Appeal From Declaratory Order in the Transvaal Provincial Division
Outcome
Appeal upheld in part; declaratory order amended to exclude the liquor licence from the assets over which the trust retained ownership.
Judges
Harms, Milne, Nienaber, Van Coller, Botha
Legal Topics
Sale of Business, Retention of Ownership, Liquor Licence Transfer, Insolvency of Buyer, Credit Agreements, Statutory Interpretation
Commercial and Corporate Land and Property Sale of Business Retention of Ownership Liquor Licence Transfer Insolvency of Buyer Credit Agreements Statutory Interpretation

Case Brief

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Parties

A-Team Drankwinkel BK

Appellant

T J H Potgieter

Appellant

P D G Botha NO

Respondent

H S Faurie NO

Respondent

Procedural Posture

Civil Appeal / Appeal From Declaratory Order in the Transvaal Provincial Division

Legal Issues

  1. 1 Whether the seller's retention of ownership in a liquor licence as part of a business sale is effective against the liquidator and creditors upon the buyer's insolvency.
  2. 2 Whether section 84(1) of the Insolvency Act applies to the sale of a business including a liquor licence.
  3. 3 Whether the contractual clause reserving ownership in the business and its assets, including the liquor licence, is enforceable in insolvency.

Ratio Decidendi

The majority held that the trust, as seller, validly reserved ownership in the business and its assets, excluding the liquor licence, which passed to the buyer by operation of statute. The retention of ownership clause was effective only in respect of the business and its goodwill, not the liquor licence, as statutory provisions governing liquor licences preclude the reservation of ownership in the licence itself. Section 84(1) of the Insolvency Act does not apply to the sale of a business, as it is limited to corporeal movable goods under credit agreements. The trust's rights were limited by agreement to those available under section 84(1), but since the business was sold for less than...

Court Disposition

Appeal upheld in part; declaratory order amended to exclude the liquor licence from the assets over which the trust retained ownership.

Orders

  • It is declared that upon liquidation of the close corporation, ownership in the business (being the subject of the sale agreement of 28 April 1989), excluding the liquor licence, vested in the applicants in their capacity as trustees.
  • It is declared that by agreement between the parties, a hypothec over the business, excluding the liquor licence, in terms of section 84(1) of the Insolvency Act 24 of 1936, vested in the applicants in their aforesaid capacity.