Khan NO and Another v Maxprop Holdings (Pty) Ltd and Another (084/2018) [2018] ZASCA 171 (30 November 2018)

Khan NO and Another v Maxprop Holdings (Pty) Ltd and Another (084/2018) [2018] ZASCA 171 (30 November 2018)

The Supreme Court of Appeal held that the appellants' particulars of claim, as amended, remained excipiable as they failed to allege that Cowan had a right of disposal over the funds paid to Maxprop, and thus did not disclose a cause of action under s 26(1) of the Insolvency Act. However, the court found that the High Court erred in dismissing the claim outright, as established practice requires that unsuccessful pleaders be given leave to amend unless it is shown that the pleading cannot be amended. The respondents did not demonstrate that further amendment would be futile. Accordingly, the appeal was upheld to the extent that the appellants were granted leave to amend their particulars...

Citation
[2018] ZASCA 171
Parties
Appellant: Rahim Khan NO; Appellant: Thamsanqa Eugene Mshengu NO; Respondent: Maxprop Holdings (Pty) Ltd; Respondent: Garlicke & Bousfield Incorporated
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
30 November 2018
Case Number
084/2018
Procedural Posture
Civil Appeal / Appeal From Kwa Zulu Natal Local Division of the High Court, Durban
Outcome
Appeal upheld to the extent that leave to amend is granted; order dismissing the claim set aside.
Judges
Cachalia, Mbha, Van der Merwe
Legal Topics
Exception Procedure, Amendment of Pleadings, Insolvency Act Section 26, Disposition Without Value
Civil Procedure Land and Property Exception Procedure Amendment of Pleadings Insolvency Act Section 26 Disposition Without Value

Case Brief

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Parties

Rahim Khan NO

Appellant

Thamsanqa Eugene Mshengu NO

Appellant

Maxprop Holdings (Pty) Ltd

Respondent

Garlicke & Bousfield Incorporated

Respondent

Procedural Posture

Civil Appeal / Appeal From Kwa Zulu Natal Local Division of the High Court, Durban

Legal Issues

  1. 1 Whether the appellants' particulars of claim, as amended, disclose a cause of action under s 26(1) of the Insolvency Act.
  2. 2 Whether the High Court was correct in dismissing the claim instead of granting leave to amend.
  3. 3 Whether the payments made by Cowan to Maxprop constituted dispositions of property from his estate.

Ratio Decidendi

The Supreme Court of Appeal held that the appellants' particulars of claim, as amended, remained excipiable as they failed to allege that Cowan had a right of disposal over the funds paid to Maxprop, and thus did not disclose a cause of action under s 26(1) of the Insolvency Act. However, the court found that the High Court erred in dismissing the claim outright, as established practice requires that unsuccessful pleaders be given leave to amend unless it is shown that the pleading cannot be amended. The respondents did not demonstrate that further amendment would be futile. Accordingly, the appeal was upheld to the extent that the appellants were granted leave to amend their particulars...

Court Disposition

Appeal upheld to the extent that leave to amend is granted; order dismissing the claim set aside.

Orders

  • Paragraphs 2 and 3 of the order of the court a quo are set aside and replaced with an order granting leave to the plaintiffs to amend their particulars of claim in terms of rule 28.
  • The appellants are directed to pay the costs of appeal.