Lundy v Beck (45027/2014) [2019] ZAGPJHC 191; 2019 (5) SA 503 (GJ) (22 May 2019)

Lundy v Beck (45027/2014) [2019] ZAGPJHC 191; 2019 (5) SA 503 (GJ) (22 May 2019)

The court held that once Beck paid the capital amount of the debt on which the nulla bona return was founded, and unconditionally tendered payment of all accrued interest, Lundy could no longer rely on the act of insolvency under s8(b) of the Insolvency Act to seek sequestration. Only interest accrued up to the date of the nulla bona return could be included in the debt; costs of the sequestration proceedings were not part of the debt for this purpose. The application was found to have been brought for an ulterior purpose, namely to achieve eviction and settlement of property disputes, rather than to secure payment of the cost award. No advantage to creditors was established, as Lundy was...

Citation
[2019] ZAGPJHC 191
Parties
Applicant: Shaun Ryan Lundy; Respondent: Carl Ludwig Beck
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
22 May 2019
Case Number
45027/2014
Procedural Posture
Sequestration Application / Return Day for Final Order Following Provisional Sequestration Order
Outcome
Application dismissed with special costs order against the applicant.
Judges
Snyckers AJ
Legal Topics
Compulsory Sequestration, Act of Insolvency, Nulla Bona Return, Advantage to Creditors, Ulterior Purpose
Civil Procedure Compulsory Sequestration Act of Insolvency Nulla Bona Return Advantage to Creditors Ulterior Purpose

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Parties

Shaun Ryan Lundy

Applicant

Carl Ludwig Beck

Respondent

Procedural Posture

Sequestration Application / Return Day for Final Order Following Provisional Sequestration Order

Legal Issues

  1. 1 Whether payment of the debt after the launch of sequestration proceedings and a provisional order precludes reliance on the act of insolvency under s8(b) of the Insolvency Act.
  2. 2 Whether interest and costs accruing after the date of the nulla bona return can be included in the debt for purposes of the act of insolvency.
  3. 3 Whether the sequestration application was brought for an ulterior purpose and should have been persisted with after payment was tendered.

Ratio Decidendi

The court held that once Beck paid the capital amount of the debt on which the nulla bona return was founded, and unconditionally tendered payment of all accrued interest, Lundy could no longer rely on the act of insolvency under s8(b) of the Insolvency Act to seek sequestration. Only interest accrued up to the date of the nulla bona return could be included in the debt; costs of the sequestration proceedings were not part of the debt for this purpose. The application was found to have been brought for an ulterior purpose, namely to achieve eviction and settlement of property disputes, rather than to secure payment of the cost award. No advantage to creditors was established, as Lundy was...

Court Disposition

Application dismissed with special costs order against the applicant.

Orders

  • The application is dismissed.
  • The provisional order and rule nisi issued on 17 October 2017 are discharged.