Ramloutan v Kalianujee NO and Another (A5024/2018) [2019] ZAGPJHC 543 (10 June 2019)

Ramloutan v Kalianujee NO and Another (A5024/2018) [2019] ZAGPJHC 543 (10 June 2019)

The court held that the granting of a provisional sequestration order automatically establishes a concursus creditorum, divesting the insolvent and the sheriff of any rights to the property, which then vests in the Master and, upon appointment, the trustees. Section 5 of the Insolvency Act prohibits the sale of attached property of an insolvent, and section 20(1)(b) stays all civil proceedings, including execution and transfer, upon sequestration. The sheriff's authority to transfer the property is extinguished by operation of law, regardless of actual knowledge of the sequestration. The absence of a caveat or notice does not validate the transfer, as the concursus creditorum takes...

Citation
[2019] ZAGPJHC 543
Parties
Appellant: Nishal Mohanlal Ramloutan; Respondent: Shirishkumar Jivan Kalianujee N.O.; Respondent: Moherane William Harry Mathibedi N.O.
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
10 June 2019
Case Number
A5024/2018
Procedural Posture
Civil Appeal / Appeal From Order Setting Aside Transfer of Immovable Property
Outcome
Appeal dismissed with costs.
Judges
Mavundla, Zeenat Carelse, Avrille Maier-Frawley
Legal Topics
Insolvency Act Section 20, Concursus Creditorum, Sale in Execution, Transfer of Immovable Property, Bona Fide Purchaser, Statutory Interpretation
Land and Property Civil Procedure Insolvency Act Section 20 Concursus Creditorum Sale in Execution Transfer of Immovable Property Bona Fide Purchaser Statutory Interpretation

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Parties

Nishal Mohanlal Ramloutan

Appellant

Shirishkumar Jivan Kalianujee N.O.

Respondent

Moherane William Harry Mathibedi N.O.

Respondent

Procedural Posture

Civil Appeal / Appeal From Order Setting Aside Transfer of Immovable Property

Legal Issues

  1. 1 Whether execution against the estate of an insolvent is automatically stayed despite the sheriff not gaining knowledge of the sequestration as contemplated in section 20(1)(c) of the Insolvency Act.
  2. 2 Whether the transfer of immovable property to a bona fide purchaser is lawful when the sheriff was unaware of the sequestration.
  3. 3 Whether the concursus creditorum takes precedence over the lack of notice to the sheriff under section 20(1)(c) of the Insolvency Act.

Ratio Decidendi

The court held that the granting of a provisional sequestration order automatically establishes a concursus creditorum, divesting the insolvent and the sheriff of any rights to the property, which then vests in the Master and, upon appointment, the trustees. Section 5 of the Insolvency Act prohibits the sale of attached property of an insolvent, and section 20(1)(b) stays all civil proceedings, including execution and transfer, upon sequestration. The sheriff's authority to transfer the property is extinguished by operation of law, regardless of actual knowledge of the sequestration. The absence of a caveat or notice does not validate the transfer, as the concursus creditorum takes...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.