Contract Forwarding (Pty) Ltd v Chesterfin (Pty) Ltd and Others (17/2002) [2002] ZASCA 143; [2003] 1 All SA 267 (SCA); 2003 (2) SA 253 (SCA) (27 November 2002)

Contract Forwarding (Pty) Ltd v Chesterfin (Pty) Ltd and Others (17/2002) [2002] ZASCA 143; [2003] 1 All SA 267 (SCA); 2003 (2) SA 253 (SCA) (27 November 2002)

The Supreme Court of Appeal held that the intervening liquidation of Eurotile did not prevent confirmation of the rule nisi, as Contract Forwarding perfected its general notarial bond by lawfully taking possession of the movables before the concursus creditorum. The perfection of the bond conferred a real right of security, and symbolic possession, such as the handing over of keys and effective control over the premises, was sufficient to constitute a pledge. The court rejected the argument that earlier bondholders had precedence absent actual possession and found no basis for the exercise of discretion to refuse confirmation where the creditor had a substantive right. The appeal was...

Citation
[2002] ZASCA 143
Parties
Appellant: Contract Forwarding (Pty) Ltd; Respondent: Chesterfin (Pty) Ltd; Respondent: Harry Kaplan NO; Respondent: Norman Klein NO; Respondent: Eurotile CC
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
27 November 2002
Case Number
17/02
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal upheld. Declaratory order granted confirming perfection of the notarial bond prior to concursus creditorum. Costs awarded to appellant, including costs of two counsel.
Judges
Harms, Schutz, Scott, Brand, Heher
Legal Topics
General Notarial Bond, Perfection of Security, Concursus Creditorum, Interim Orders, Liquidation, Priority of Creditors
Commercial and Corporate Civil Procedure General Notarial Bond Perfection of Security Concursus Creditorum Interim Orders Liquidation Priority of Creditors

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Parties

Contract Forwarding (Pty) Ltd

Appellant

Chesterfin (Pty) Ltd

Respondent

Harry Kaplan NO

Respondent

Norman Klein NO

Respondent

Eurotile CC

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 What is the effect of a supervening liquidation on a provisional order permitting a creditor to perfect a general notarial bond over movables?
  2. 2 Does the perfection of a general notarial bond prior to concursus creditorum confer a real right of security on the bondholder?
  3. 3 Is symbolic possession sufficient to perfect a pledge under South African law?

Ratio Decidendi

The Supreme Court of Appeal held that the intervening liquidation of Eurotile did not prevent confirmation of the rule nisi, as Contract Forwarding perfected its general notarial bond by lawfully taking possession of the movables before the concursus creditorum. The perfection of the bond conferred a real right of security, and symbolic possession, such as the handing over of keys and effective control over the premises, was sufficient to constitute a pledge. The court rejected the argument that earlier bondholders had precedence absent actual possession and found no basis for the exercise of discretion to refuse confirmation where the creditor had a substantive right. The appeal was...

Court Disposition

Appeal upheld. Declaratory order granted confirming perfection of the notarial bond prior to concursus creditorum. Costs awarded to appellant, including costs of two counsel.

Orders

  • The appeal is upheld with costs, including the costs of two counsel.
  • The order of the court a quo is set aside and substituted with an order declaring that Contract Forwarding (Pty) Ltd perfected its notarial bond BN 71188/2000 by taking possession of the movables therein mentioned before the advent of a concursus creditorum.