Nedbank Limited v Chance and Others (496/2006) [2008] ZAKZHC 5; [2008] 2 All SA 367 (D); 2008 (4) SA 209 (D) (28 January 2008)

Nedbank Limited v Chance and Others (496/2006) [2008] ZAKZHC 5; [2008] 2 All SA 367 (D); 2008 (4) SA 209 (D) (28 January 2008)

The court held that upon liquidation, the concursus creditorum crystallises the rights and obligations of all creditors as at the date of liquidation. Rectification of the reorganisation agreement post concursus, which would increase Nedbank's claim from R35,000 to R3.5 million, would disturb the fixed rights of other creditors and is therefore impermissible. The acceptance of Nedbank's claim by the liquidators and confirmation of the liquidation and distribution account by the Master do not preclude the defendants from resisting payment, nor do they constitute a final judgment against the defendants. Accordingly, Nedbank's claim for rectification must fail.

Citation
[2008] ZAKZHC 5
Parties
Plaintiff: Nedbank Limited; Defendant: Christopher John Hugh Chance; Defendant: William John Ferguson Chance; Defendant: James William Frederick Chance; Defendant: Richard George Ferguson Chance; Defendant: Louis Vaughan Essery; Defendant: Chance Brothers (Proprietary) Limited (in liquidation)
Court
High Courts - Kwazulu Natal
Jurisdiction
South Africa
Judgment Date
28 January 2008
Case Number
496/2006
Procedural Posture
Civil Trial / Judgment After Trial on Agreed Facts
Outcome
Plaintiff's claim for rectification is dismissed with costs, including costs consequent upon the employment of two counsel.
Judges
Theron
Legal Topics
Rectification of Contract, Suretyship Liability, Liquidation and Distribution Account, Concursus Creditorum, Preference Shares, Finality of Liquidation Account
Commercial and Corporate Civil Procedure Rectification of Contract Suretyship Liability Liquidation and Distribution Account Concursus Creditorum Preference Shares Finality of Liquidation Account

Case Brief

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Parties

Nedbank Limited

Plaintiff

Christopher John Hugh Chance

Defendant

William John Ferguson Chance

Defendant

James William Frederick Chance

Defendant

Richard George Ferguson Chance

Defendant

Louis Vaughan Essery

Defendant

Chance Brothers (Proprietary) Limited (in liquidation)

Defendant

Procedural Posture

Civil Trial / Judgment After Trial on Agreed Facts

Legal Issues

  1. 1 Whether the reorganisation agreement between Nedbank and Chance Brothers can be rectified after the winding-up of Chance Brothers.
  2. 2 Whether rectification of the agreement would prejudice the rights of other creditors post concursus creditorum.
  3. 3 Whether confirmation of the liquidation and distribution account by the Master precludes the defendants from resisting payment.

Ratio Decidendi

The court held that upon liquidation, the concursus creditorum crystallises the rights and obligations of all creditors as at the date of liquidation. Rectification of the reorganisation agreement post concursus, which would increase Nedbank's claim from R35,000 to R3.5 million, would disturb the fixed rights of other creditors and is therefore impermissible. The acceptance of Nedbank's claim by the liquidators and confirmation of the liquidation and distribution account by the Master do not preclude the defendants from resisting payment, nor do they constitute a final judgment against the defendants. Accordingly, Nedbank's claim for rectification must fail.

Court Disposition

Plaintiff's claim for rectification is dismissed with costs, including costs consequent upon the employment of two counsel.

Orders

  • Plaintiff's claim for rectification is dismissed.
  • Plaintiff is ordered to pay the costs of the defendants, including the costs of two counsel.