Absa Bank Ltd v Murray and Another (CA338/2017) [2018] ZAECGHC 75 (28 August 2018)

Absa Bank Ltd v Murray and Another (CA338/2017) [2018] ZAECGHC 75 (28 August 2018)

The court held that Absa Bank Ltd could not rely on the payment made by Murray to Buffalo City Municipality as constituting an act of insolvency under section 8(c) of the Insolvency Act because this was not pleaded in the founding affidavit. The principle is that a party must set out its case fully in its founding papers, and it is fundamentally unfair to raise a new legal point for the first time in heads of argument. The facts relevant to the alleged act of insolvency were not properly canvassed, and Murray was not given an opportunity to address whether the payment prejudiced other creditors or preferred one creditor above others. The requirements for raising a new legal point on...

Citation
[2018] ZAECGHC 75
Parties
Appellant: Absa Bank Ltd; Respondent: Gary David Murray; Respondent: Claudia Stephania Murray
Court
Eastern Cape High Court, Grahamstown
Jurisdiction
South Africa
Judgment Date
28 August 2018
Case Number
CA338/2017
Procedural Posture
Civil Appeal / Appeal Against Discharge of Provisional Sequestration Order
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
C Plasket, J Smith, T Malusi
Legal Topics
Sequestration, Acts of Insolvency, Debt Review, Founding Affidavit Requirements, Preferential Payment
Banking and Finance Civil Procedure Sequestration Acts of Insolvency Debt Review Founding Affidavit Requirements Preferential Payment

Case Brief

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Parties

Absa Bank Ltd

Appellant

Gary David Murray

Respondent

Claudia Stephania Murray

Respondent

Procedural Posture

Civil Appeal / Appeal Against Discharge of Provisional Sequestration Order

Legal Issues

  1. 1 Whether Absa Bank Ltd could rely on the payment made by Murray to Buffalo City Municipality as constituting an act of insolvency under section 8(c) of the Insolvency Act when this was not pleaded in the founding affidavit.
  2. 2 Whether the payment to Buffalo City Municipality prejudiced other creditors or preferred one creditor above others.
  3. 3 Whether the requirements for raising new legal points on appeal were satisfied.

Ratio Decidendi

The court held that Absa Bank Ltd could not rely on the payment made by Murray to Buffalo City Municipality as constituting an act of insolvency under section 8(c) of the Insolvency Act because this was not pleaded in the founding affidavit. The principle is that a party must set out its case fully in its founding papers, and it is fundamentally unfair to raise a new legal point for the first time in heads of argument. The facts relevant to the alleged act of insolvency were not properly canvassed, and Murray was not given an opportunity to address whether the payment prejudiced other creditors or preferred one creditor above others. The requirements for raising a new legal point on...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.