De Jongh Ontwikkelings (Pty) Ltd and Another v Kilotech Investments (Pty) Ltd and Others (63945/2013) [2021] ZAGPPHC 190; 2021 (4) SA 492 (GP) (25 March 2021)

De Jongh Ontwikkelings (Pty) Ltd and Another v Kilotech Investments (Pty) Ltd and Others (63945/2013) [2021] ZAGPPHC 190; 2021 (4) SA 492 (GP) (25 March 2021)

The court found that DJO, through Mr De Jongh, disposed of a claim of R 5,5 million in favour of Kilotech, but only received R 3,6 million in value, leaving a shortfall of R 1,9 million for which no value was received. The transaction was a contrivance to satisfy Mr De Jongh's personal divorce obligations and was not made in the ordinary course of business. The disposition was impeachable under section 26(1)(b) of the Insolvency Act as it was not made for value, and the beneficiary failed to discharge the onus of proving solvency. Alternatively, the transaction was collusive and prejudiced DJO's creditors, rendering it impeachable under section 31. The court rejected the argument that...

Citation
[2021] ZAGPPHC 190
Parties
Plaintiff: De Jongh Ontwikkelings (Pty) Ltd; Plaintiff: Elizabeth Wilanda Prinsloo N.O.; Defendant: Kilotech Investments (Pty) Ltd; Defendant: The Trustees for the Time Being of the Mila De Jongh Family Trust
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
25 March 2021
Case Number
63945/2013
Procedural Posture
Civil Judgment / First Instance Judgment
Outcome
Plaintiffs succeed. The disposition by De Jongh Ontwikkelings (Pty) Ltd in favour of Kilotech Investments (Pty) Ltd in the amount of R 1,9 million is set aside. Kilotech is ordered to pay the amount with interest and costs.
Judges
Davis
Legal Topics
Insolvency Act Section 26, Disposition Without Value, Collusive Dealing, Liquidation, Impeachable Transaction
Land and Property Commercial and Corporate Insolvency Act Section 26 Disposition Without Value Collusive Dealing Liquidation Impeachable Transaction

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Parties

De Jongh Ontwikkelings (Pty) Ltd

Plaintiff

Elizabeth Wilanda Prinsloo N.O.

Plaintiff

Kilotech Investments (Pty) Ltd

Defendant

The Trustees for the Time Being of the Mila De Jongh Family Trust

Defendant

Procedural Posture

Civil Judgment / First Instance Judgment

Legal Issues

  1. 1 Whether the disposition by De Jongh Ontwikkelings (Pty) Ltd in favour of Kilotech Investments (Pty) Ltd constituted a disposition without value under section 26 of the Insolvency Act.
  2. 2 Whether the transaction was impeachable under sections 29, 30, or 31 of the Insolvency Act.
  3. 3 Whether the liquidator is entitled to recover the amount of R 1,9 million from Kilotech Investments (Pty) Ltd.

Ratio Decidendi

The court found that DJO, through Mr De Jongh, disposed of a claim of R 5,5 million in favour of Kilotech, but only received R 3,6 million in value, leaving a shortfall of R 1,9 million for which no value was received. The transaction was a contrivance to satisfy Mr De Jongh's personal divorce obligations and was not made in the ordinary course of business. The disposition was impeachable under section 26(1)(b) of the Insolvency Act as it was not made for value, and the beneficiary failed to discharge the onus of proving solvency. Alternatively, the transaction was collusive and prejudiced DJO's creditors, rendering it impeachable under section 31. The court rejected the argument that...

Court Disposition

Plaintiffs succeed. The disposition by De Jongh Ontwikkelings (Pty) Ltd in favour of Kilotech Investments (Pty) Ltd in the amount of R 1,9 million is set aside. Kilotech is ordered to pay the amount with interest and costs.

Orders

  • The disposition by De Jongh Ontwikkelings (Pty) Ltd in favour of Kilotech Investments (Pty) Ltd in the amount of R 1,9 million is hereby set aside.
  • The first defendant is ordered to pay the amount of R 1,9 million together with interest at the prescribed rate from 11 September 2010 to date of payment to the second plaintiff in her capacity as liquidator of De Jongh Ontwikkelings (Pty) Ltd.