Melville v Busane and Another (2067/2011) [2011] ZAECPEHC 45; 2012 (1) SA 233 (ECP); [2012] 1 All SA 675 (ECP) (18 August 2011)

Melville v Busane and Another (2067/2011) [2011] ZAECPEHC 45; 2012 (1) SA 233 (ECP); [2012] 1 All SA 675 (ECP) (18 August 2011)

The court held that, although the Companies Act 71 of 2008 defines a trust as a juristic person, the Act does not define a trust as a 'company' for the purposes of liquidation. Section 9 of Schedule 5 of the Act continues the application of the previous Companies Act only in respect of companies, not trusts. The appropriate remedy for an insolvent trust remains sequestration under the Insolvency Act, not liquidation under company law. The applicant's exclusion from trust affairs and alleged misuse of funds do not alter the legal position. The application for liquidation of the trust in terms of the Companies Act was therefore dismissed.

Citation
[2011] ZAECPEHC 45
Parties
Applicant: Anne Aletta Susanna Melville; Respondent: Mzungezi Nicholas Busane; Respondent: Edner Mfuthi Busane
Court
Eastern Cape High Court, Port Elizabeth
Jurisdiction
South Africa
Judgment Date
18 August 2011
Case Number
2067/2011
Procedural Posture
Urgent Application / Unopposed Application for Winding Up of a Trust
Outcome
Application dismissed.
Judges
Schoeman
Legal Topics
Winding Up, Trust Liquidation, Juristic Person Definition, Sequestration, Companies Act Interpretation
Civil Procedure Winding Up Trust Liquidation Juristic Person Definition Sequestration Companies Act Interpretation

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Parties

Anne Aletta Susanna Melville

Applicant

Mzungezi Nicholas Busane

Respondent

Edner Mfuthi Busane

Respondent

Procedural Posture

Urgent Application / Unopposed Application for Winding Up of a Trust

Legal Issues

  1. 1 Is it legally competent to liquidate a trust in terms of the Companies Act 71 of 2008?
  2. 2 Does the definition of 'juristic person' in the Companies Act include a trust for purposes of liquidation?
  3. 3 Is sequestration or liquidation the appropriate remedy for an insolvent trust?

Ratio Decidendi

The court held that, although the Companies Act 71 of 2008 defines a trust as a juristic person, the Act does not define a trust as a 'company' for the purposes of liquidation. Section 9 of Schedule 5 of the Act continues the application of the previous Companies Act only in respect of companies, not trusts. The appropriate remedy for an insolvent trust remains sequestration under the Insolvency Act, not liquidation under company law. The applicant's exclusion from trust affairs and alleged misuse of funds do not alter the legal position. The application for liquidation of the trust in terms of the Companies Act was therefore dismissed.

Court Disposition

Application dismissed.

Orders

  • The application for liquidation of the BRI Construction Trust is dismissed.