Botha NO and Another v Gazit Properties (EDMS) Beperk (6575/08) [2010] ZAGPPHC 116 (15 September 2010)

Botha NO and Another v Gazit Properties (EDMS) Beperk (6575/08) [2010] ZAGPPHC 116 (15 September 2010)

The court found that the payments made by Maiokiba to Gazit Properties were not made in the ordinary course of business. The evidence demonstrated that Maiokiba's operations were unlawful, lacking the documentation and controls expected of legitimate bridging finance transactions, and that funds were solicited and paid out under false pretenses. The respondent failed to discharge the onus of proving that the payments were made in the ordinary course of business as required by section 29(1) of the Insolvency Act. Furthermore, Maiokiba's activities contravened the Banks Act by conducting banking business without registration. The payments constituted voidable preferences and were set aside....

Citation
[2010] ZAGPPHC 116
Parties
Applicant: D M Botha N.O. & Another; Respondent: Gazit Properties (EDMS) Beperk
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
15 September 2010
Case Number
6575/08
Procedural Posture
Civil Trial / Final Judgment
Outcome
The applicants succeeded. The payments made by Maiokiba to the respondent were set aside as voidable preferences under section 29(1) of the Insolvency Act.
Judges
T J Kruger
Legal Topics
Insolvent Estate, Voidable Preference, Ordinary Course of Business, Banking Regulation, Illegal Contract, Return of Payments
Banking and Finance Land and Property Civil Procedure Insolvent Estate Voidable Preference Ordinary Course of Business Banking Regulation Illegal Contract +1 more

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Parties

D M Botha N.O. & Another

Applicant

Gazit Properties (EDMS) Beperk

Respondent

Procedural Posture

Civil Trial / Final Judgment

Legal Issues

  1. 1 Whether the payments made by Maiokiba to Gazit Properties constituted voidable preferences under section 29(1) of the Insolvency Act.
  2. 2 Whether the payments were made in the ordinary course of business.
  3. 3 Whether the loan agreements and payments contravened the Banks Act and were therefore unlawful.

Ratio Decidendi

The court found that the payments made by Maiokiba to Gazit Properties were not made in the ordinary course of business. The evidence demonstrated that Maiokiba's operations were unlawful, lacking the documentation and controls expected of legitimate bridging finance transactions, and that funds were solicited and paid out under false pretenses. The respondent failed to discharge the onus of proving that the payments were made in the ordinary course of business as required by section 29(1) of the Insolvency Act. Furthermore, Maiokiba's activities contravened the Banks Act by conducting banking business without registration. The payments constituted voidable preferences and were set aside....

Court Disposition

The applicants succeeded. The payments made by Maiokiba to the respondent were set aside as voidable preferences under section 29(1) of the Insolvency Act.

Orders

  • The payments of R3,050,355.00 made by Maiokiba to the respondent between 17 April 2007 and 9 May 2007 are set aside in terms of section 29(1) of the Insolvency Act, Act 24 of 1936.
  • The respondent is ordered to repay the amount of R3,050,355.00 to the applicants together with interest at the rate of 15.5% per annum a tempore morae.