De Villiers NO v Delta Cables (Pty) Ltd (56/1990) [1991] ZASCA 115; 1992 (1) SA 9 (AD); [1992] 1 All SA 192 (A) (23 September 1991)

De Villiers NO v Delta Cables (Pty) Ltd (56/1990) [1991] ZASCA 115; 1992 (1) SA 9 (AD); [1992] 1 All SA 192 (A) (23 September 1991)

The Supreme Court of Appeal held that section 21(1) of the Insolvency Act vests all property of the solvent spouse in the trustee of the insolvent estate as if it were property of the insolvent. This vesting is intended to bring about a concursus creditorum and to freeze the rights and priorities of creditors as at the date of sequestration. Any subsequent disposition or registration, including the registration of a surety mortgage bond based on a power of attorney executed before sequestration, is ineffective against the trustee and does not confer a real right or preference on the creditor. The respondent, therefore, is a concurrent and not a secured or preferent creditor in the...

Citation
[1991] ZASCA 115
Parties
Appellant: Michael Leo De Villiers N O; Respondent: Delta Cables (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
23 September 1991
Case Number
56/1990
Procedural Posture
Civil Appeal / Appeal From the Witwatersrand Local Division
Outcome
Appeal allowed. The respondent is declared a concurrent and not a secured or preferent creditor in the insolvent estate. The respondent is ordered to pay the costs of the application.
Judges
Van Heerden, Nestadt, Goldstone, Nicholas, Van Coller
Legal Topics
Vesting of Property, Concursus Creditorum, Surety Mortgage Bond, Rights of Solvent Spouse, Insolvent Estate Priorities
Insolvency Law Civil Procedure Vesting of Property Concursus Creditorum Surety Mortgage Bond Rights of Solvent Spouse Insolvent Estate Priorities

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Parties

Michael Leo De Villiers N O

Appellant

Delta Cables (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From the Witwatersrand Local Division

Legal Issues

  1. 1 Does the registration of a surety mortgage bond over the property of a solvent spouse after the sequestration of the insolvent spouse's estate confer a secured or preferent status on the creditor?
  2. 2 Does section 21(1) of the Insolvency Act vest dominium of the solvent spouse's property in the trustee of the insolvent estate?
  3. 3 Is the respondent a concurrent or secured creditor in the insolvent estate?

Ratio Decidendi

The Supreme Court of Appeal held that section 21(1) of the Insolvency Act vests all property of the solvent spouse in the trustee of the insolvent estate as if it were property of the insolvent. This vesting is intended to bring about a concursus creditorum and to freeze the rights and priorities of creditors as at the date of sequestration. Any subsequent disposition or registration, including the registration of a surety mortgage bond based on a power of attorney executed before sequestration, is ineffective against the trustee and does not confer a real right or preference on the creditor. The respondent, therefore, is a concurrent and not a secured or preferent creditor in the...

Court Disposition

Appeal allowed. The respondent is declared a concurrent and not a secured or preferent creditor in the insolvent estate. The respondent is ordered to pay the costs of the application.

Orders

  • It is declared that the respondent is a concurrent and not a secured or preferent creditor in the insolvent estate of R A Matthews.
  • The respondent is ordered to pay the costs of the application.