Cohen v Absa Bank Limited (1280/2021) [2024] ZASCA 16 (9 February 2024)

Cohen v Absa Bank Limited (1280/2021) [2024] ZASCA 16 (9 February 2024)

Section 31(2) of the Insolvency Act does not afford a surety the right to avoid liability to a creditor following the liquidation of the principal debtor. The remedies under section 31(2) may only be invoked by the liquidator or a creditor acting in the liquidator's name, and not by a third party such as a surety. The appellant's interpretation is inconsistent with the text and purpose of sections 31 and 32, and is unsupported by authority. The appellant's explanation for the delay in prosecuting the appeal was inadequate and, in any event, his defence under section 31(2) was unmeritorious. Accordingly, condonation and reinstatement of the appeal were refused, and the appeal was struck...

Citation
[2024] ZASCA 16
Parties
Appellant: Chaim Cohen; Respondent: Absa Bank Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
9 February 2024
Case Number
1280/2021
Procedural Posture
Civil Appeal / Application for Condonation and Reinstatement of Appeal; Merits of Appeal
Outcome
Application for condonation and reinstatement of the appeal dismissed; appeal struck from the roll with costs.
Judges
Mocumie, Nicholls, Meyer, Chetty, Keightley
Legal Topics
Suretyship Liability, Insolvency Act Interpretation, Collusive Disposition, Locus Standi, Condonation, Appeal Struck Off Roll
Banking and Finance Civil Procedure Suretyship Liability Insolvency Act Interpretation Collusive Disposition Locus Standi Condonation Appeal Struck Off Roll

Case Brief

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Parties

Chaim Cohen

Appellant

Absa Bank Limited

Respondent

Procedural Posture

Civil Appeal / Application for Condonation and Reinstatement of Appeal; Merits of Appeal

Legal Issues

  1. 1 Whether a surety has locus standi to invoke section 31(2) of the Insolvency Act to avoid liability to a creditor after liquidation of the primary debtor.
  2. 2 Whether section 31(2) of the Insolvency Act provides a defence to a surety sued by a creditor following the liquidation of the principal debtor.
  3. 3 Whether the appellant's explanation for the delay in prosecuting the appeal is adequate to justify condonation and reinstatement.

Ratio Decidendi

Section 31(2) of the Insolvency Act does not afford a surety the right to avoid liability to a creditor following the liquidation of the principal debtor. The remedies under section 31(2) may only be invoked by the liquidator or a creditor acting in the liquidator's name, and not by a third party such as a surety. The appellant's interpretation is inconsistent with the text and purpose of sections 31 and 32, and is unsupported by authority. The appellant's explanation for the delay in prosecuting the appeal was inadequate and, in any event, his defence under section 31(2) was unmeritorious. Accordingly, condonation and reinstatement of the appeal were refused, and the appeal was struck...

Court Disposition

Application for condonation and reinstatement of the appeal dismissed; appeal struck from the roll with costs.

Orders

  • The application for condonation and reinstatement of the appeal is dismissed with costs, including those of two counsel.
  • The appeal is struck from the roll with costs, including those of two counsel.