Slims (Pty) Ltd. and Another v Morris NO (256/86) [1987] ZASCA 128; [1988] 2 All SA 33 (A) (10 November 1987)

Slims (Pty) Ltd. and Another v Morris NO (256/86) [1987] ZASCA 128; [1988] 2 All SA 33 (A) (10 November 1987)

The Supreme Court of Appeal held that a liquor licence is a statutory privilege granted personally to the licensee and is not a right created by or under the lease. Upon insolvency, the licence vests in the trustee for the benefit of creditors, and the sub-lessor cannot claim specific performance for its retransfer. Section 37(5) of the Insolvency Act applies only to contractual rights under the lease and not to statutory privileges such as liquor licences. The sub-lessor's claim for restoration of the licence, whether based on the lease or section 37(5), fails, and the trustee is entitled to realize the licence for the benefit of creditors. The sub-lessor is limited to a concurrent claim...

Citation
[1987] ZASCA 128
Parties
Appellant: Slims (Proprietary) Limited; Appellant: Rebel Discount Liquor Stores (Eastern Cape) (Proprietary) Limited; Respondent: David Morris NO, in his capacity as Trustee in the Insolvent Estate Juan Ignacio Marsal
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
10 November 1987
Case Number
256/86
Procedural Posture
Civil Appeal / Appeal From Judgment of Lower Court
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Corbett, Botha, Van Heerden, Nestadt, Nicholas
Legal Topics
Liquor Licence Transfer, Insolvency of Lessee, Specific Performance, Rights Under Lease, Statutory Interpretation
Commercial and Corporate Land and Property Civil Procedure Liquor Licence Transfer Insolvency of Lessee Specific Performance Rights Under Lease Statutory Interpretation

Case Brief

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Parties

Slims (Proprietary) Limited

Appellant

Rebel Discount Liquor Stores (Eastern Cape) (Proprietary) Limited

Appellant

David Morris NO, in his capacity as Trustee in the Insolvent Estate Juan Ignacio Marsal

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment of Lower Court

Legal Issues

  1. 1 Whether the sub-lessor is entitled to specific performance for retransfer of a liquor licence upon termination of the sub-lease due to insolvency.
  2. 2 Whether a liquor licence constitutes a 'right under the lease' within the meaning of section 37(5) of the Insolvency Act.
  3. 3 Whether the trustee in insolvency is bound to restore the liquor licence to the sub-lessor or may realize it for the benefit of creditors.

Ratio Decidendi

The Supreme Court of Appeal held that a liquor licence is a statutory privilege granted personally to the licensee and is not a right created by or under the lease. Upon insolvency, the licence vests in the trustee for the benefit of creditors, and the sub-lessor cannot claim specific performance for its retransfer. Section 37(5) of the Insolvency Act applies only to contractual rights under the lease and not to statutory privileges such as liquor licences. The sub-lessor's claim for restoration of the licence, whether based on the lease or section 37(5), fails, and the trustee is entitled to realize the licence for the benefit of creditors. The sub-lessor is limited to a concurrent claim...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

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