Chater Developments v Waterkloof Marina Estates and Another (1025/2013) [2014] ZASCA 198; 2015 (5) SA 138 (SCA) (28 November 2014)

Chater Developments v Waterkloof Marina Estates and Another (1025/2013) [2014] ZASCA 198; 2015 (5) SA 138 (SCA) (28 November 2014)

The Supreme Court of Appeal held that section 339 of the Companies Act 61 of 1973 makes the provisions of the Insolvency Act applicable to companies in liquidation where the Act does not specifically provide for the matter. There is no provision in the Companies Act that validates a purchase in good faith from a liquidator who lacked member authorisation. Section 82(8) of the Insolvency Act therefore applies, and the agreement between Chater Developments and Waterkloof Marina Estates is valid and enforceable. The remedies in sections 386(5) and 387(4) of the Companies Act are discretionary and do not detract from the substantive protection afforded by section 82(8) to bona fide...

Citation
[2014] ZASCA 198
Parties
Appellant: Chater Developments (Pty) Ltd (in liquidation); Respondent: Waterkloof Marina Estates (Pty) Ltd; Respondent: H A Marais
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 November 2014
Case Number
1025/2013
Procedural Posture
Civil Appeal / Appeal From North Gauteng High Court, Pretoria
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Navsa ADP, Theron, Wallis, Mbha JJA, Dambuza AJA
Legal Topics
Liquidation of Companies, Powers of Liquidator, Sale of Assets in Liquidation, Good Faith Purchaser, Application of Insolvency Act
Commercial and Corporate Civil Procedure Liquidation of Companies Powers of Liquidator Sale of Assets in Liquidation Good Faith Purchaser Application of Insolvency Act

Case Brief

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Parties

Chater Developments (Pty) Ltd (in liquidation)

Appellant

Waterkloof Marina Estates (Pty) Ltd

Respondent

H A Marais

Respondent

Procedural Posture

Civil Appeal / Appeal From North Gauteng High Court, Pretoria

Legal Issues

  1. 1 Whether section 82(8) of the Insolvency Act applies to a company in liquidation under section 339 of the Companies Act 61 of 1973.
  2. 2 Whether the sale of assets by a liquidator without member authorisation is valid and enforceable when the purchaser acted in good faith.
  3. 3 Whether the remedies in sections 386(5) and 387(4) of the Companies Act preclude the application of section 82(8) of the Insolvency Act.

Ratio Decidendi

The Supreme Court of Appeal held that section 339 of the Companies Act 61 of 1973 makes the provisions of the Insolvency Act applicable to companies in liquidation where the Act does not specifically provide for the matter. There is no provision in the Companies Act that validates a purchase in good faith from a liquidator who lacked member authorisation. Section 82(8) of the Insolvency Act therefore applies, and the agreement between Chater Developments and Waterkloof Marina Estates is valid and enforceable. The remedies in sections 386(5) and 387(4) of the Companies Act are discretionary and do not detract from the substantive protection afforded by section 82(8) to bona fide...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

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