Cohen NO and Others v SAPHI (Pty) Ltd. (103/94) [1995] ZASCA 122 (29 September 1995)

Cohen NO and Others v SAPHI (Pty) Ltd. (103/94) [1995] ZASCA 122 (29 September 1995)

The court held that for purposes of section 34(1) of the Insolvency Act, the relevant disposition is the conclusion of the contract for sale, not the subsequent delivery of the business. Delivery is merely performance of the seller's obligation under the contract and does not constitute a separate disposition. The contract was signed on 6 December 1989, and as more than six months elapsed before the liquidation proceedings commenced on 15 June 1990, section 34(1) did not render the sale void. The alternative argument that the contract only became binding on the effective date was rejected; the contract was valid upon signature, with 16 December 1989 being merely the time for performance....

Citation
[1995] ZASCA 122
Parties
Appellant: Leslie Cohen NO; Appellant: Reginald Barry Prosch NO; Respondent: S A P H I (Proprietary) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 September 1995
Case Number
103/94
Procedural Posture
Civil Appeal / Appeal From Exception Upheld in the Transvaal Provincial Division
Outcome
Appeal dismissed with costs.
Judges
Vivier, Joubert, Van den Heever, Olivier, Van Coller
Legal Topics
Insolvency Act Section 34, Company Liquidation, Void Disposition, Contract of Sale, Suspensive Condition
Civil Procedure Commercial and Corporate Insolvency Act Section 34 Company Liquidation Void Disposition Contract of Sale Suspensive Condition

Case Brief

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Parties

Leslie Cohen NO

Appellant

Reginald Barry Prosch NO

Appellant

S A P H I (Proprietary) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Exception Upheld in the Transvaal Provincial Division

Legal Issues

  1. 1 When is a disposition for purposes of section 34(1) of the Insolvency Act deemed to have occurred.
  2. 2 Does delivery under a contract of sale constitute a separate disposition under section 34(1) of the Insolvency Act.
  3. 3 Was the sale of the business to the respondent void as against the liquidators under section 34(1) of the Insolvency Act.

Ratio Decidendi

The court held that for purposes of section 34(1) of the Insolvency Act, the relevant disposition is the conclusion of the contract for sale, not the subsequent delivery of the business. Delivery is merely performance of the seller's obligation under the contract and does not constitute a separate disposition. The contract was signed on 6 December 1989, and as more than six months elapsed before the liquidation proceedings commenced on 15 June 1990, section 34(1) did not render the sale void. The alternative argument that the contract only became binding on the effective date was rejected; the contract was valid upon signature, with 16 December 1989 being merely the time for performance....

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.