Consolidated News Agencies v Mobile Telephone Networks (510/2008) [2009] ZASCA 130; [2010] 2 All SA 9 (SCA) ; 2010 (3) SA 382 (SCA) (29 September 2009)

Consolidated News Agencies v Mobile Telephone Networks (510/2008) [2009] ZASCA 130; [2010] 2 All SA 9 (SCA) ; 2010 (3) SA 382 (SCA) (29 September 2009)

The Supreme Court of Appeal held that MTN and M-Tel, acting in good faith, entered into the Amended Retailer Agreement (ARA) as a holistic commercial transaction intended to secure the viability of CNA and benefit all parties involved. MTN's payment of R85,976,778.08 under guarantees furnished to Wooltru was found to be in return for the impugned dispositions, satisfying the reciprocity requirement of section 33(1) of the Insolvency Act. The evidence established that neither MTN nor M-Tel contemplated CNA's liquidation as a real possibility at the time of the transaction. The court found that the loss of rights by M-Tel, specifically the right to cancel the Retailer Agreement, was not...

Citation
[2009] ZASCA 130
Parties
Appellant: Consolidated News Agencies (Pty) Ltd (in liquidation); Respondent: Mobile Telephone Networks (Pty) Ltd; Respondent: MTN Service Provider (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 September 2009
Case Number
510/2008
Procedural Posture
Civil Appeal / Appeal From the High Court, Johannesburg, After Separation of Issues Under Rule 33(4)
Outcome
The appeal is dismissed with costs, including the costs of two counsel. Both MTN and M-Tel are entitled to rely on section 33(1) of the Insolvency Act and are not obliged to restore any property or benefit received under the impugned dispositions unless indemnified by the liquidators.
Judges
NAVSA, NUGENT, HEHER, MHLANTLA, HURT
Legal Topics
Insolvency Act Section 33, Voidable Dispositions, Good Faith in Commercial Transactions, Corporate Group Liability, Reciprocity in Contracts
Banking and Finance Commercial and Corporate Insolvency Act Section 33 Voidable Dispositions Good Faith in Commercial Transactions Corporate Group Liability Reciprocity in Contracts

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 12 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Consolidated News Agencies (Pty) Ltd (in liquidation)

Appellant

Mobile Telephone Networks (Pty) Ltd

Respondent

MTN Service Provider (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From the High Court, Johannesburg, After Separation of Issues Under Rule 33(4)

Legal Issues

  1. 1 Whether the respondents are entitled to rely on the indemnity provisions of section 33(1) of the Insolvency Act 24 of 1936 to avoid restoration of property or benefits received under impugned dispositions unless indemnified by the liquidators.
  2. 2 Whether the respondents acted in good faith and parted with property or lost rights in return for the impugned dispositions under the Amended Retailer Agreement (ARA).
  3. 3 Whether the loss of rights or parting with property by MTN and M-Tel was reciprocal to the dispositions made by CNA under the ARA.

Ratio Decidendi

The Supreme Court of Appeal held that MTN and M-Tel, acting in good faith, entered into the Amended Retailer Agreement (ARA) as a holistic commercial transaction intended to secure the viability of CNA and benefit all parties involved. MTN's payment of R85,976,778.08 under guarantees furnished to Wooltru was found to be in return for the impugned dispositions, satisfying the reciprocity requirement of section 33(1) of the Insolvency Act. The evidence established that neither MTN nor M-Tel contemplated CNA's liquidation as a real possibility at the time of the transaction. The court found that the loss of rights by M-Tel, specifically the right to cancel the Retailer Agreement, was not...

Court Disposition

The appeal is dismissed with costs, including the costs of two counsel. Both MTN and M-Tel are entitled to rely on section 33(1) of the Insolvency Act and are not obliged to restore any property or benefit received under the impugned dispositions unless indemnified by the liquidators.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.
  • MTN and M-Tel are not obliged to restore any property or benefit received under the impugned dispositions unless indemnified by the liquidators.