Slip Knot Investments 777 (Pty) Ltd v Forlee (3055/2011) [2015] ZAECGHC 58 (15 May 2015)

Slip Knot Investments 777 (Pty) Ltd v Forlee (3055/2011) [2015] ZAECGHC 58 (15 May 2015)

The court held that the defendant, as sole member of Blue Marine Properties CC, became personally liable for the corporation's debt to the plaintiff upon deregistration in terms of section 26(5) of the Close Corporations Act. The defence of prescription was rejected, as deregistration provided the catalyst for the...

Source-derived case information.

Citation
[2015] ZAECGHC 58
Parties
Plaintiff: Slip Knot Investments 777 (Pty) Ltd; Defendant: Patricia Mae Forlee
Court
Eastern Cape High Court, Grahamstown
Jurisdiction
South Africa
Judgment Date
15 May 2015
Case Number
3055/2011
Procedural Posture
Civil Trial / Judgment After Special Case Stated Under Rule 33(1)
Outcome
Plaintiff's claim succeeds; defendant is ordered to pay the principal debt, interest, and costs.
Judges
Chetty
Legal Topics
Close Corporations Act, Personal Liability of Member, Deregistration Effects, Prescription, Suretyship, Acknowledgement of Debt
Commercial and Corporate Close Corporations Act Personal Liability of Member Deregistration Effects Prescription Suretyship Acknowledgement of Debt

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Parties

Slip Knot Investments 777 (Pty) Ltd

Plaintiff

Patricia Mae Forlee

Defendant

Procedural Posture

Civil Trial / Judgment After Special Case Stated Under Rule 33(1)

Legal Issues

  1. 1 Whether the defendant, as sole member of a deregistered close corporation, is personally liable for the corporation's debt under section 26(5) of the Close Corporations Act.
  2. 2 Whether the defence of prescription under section 11(d) of the Prescription Act applies to the plaintiff's claim.
  3. 3 Whether the defendant unequivocally assumed and accepted personal liability for the debt.

Ratio Decidendi

The court held that the defendant, as sole member of Blue Marine Properties CC, became personally liable for the corporation's debt to the plaintiff upon deregistration in terms of section 26(5) of the Close Corporations Act. The defence of prescription was rejected, as deregistration provided the catalyst for the claim and restoration did not extinguish the liability. The court found that the defendant unequivocally assumed and accepted personal liability for the debt, as evidenced by her communications and conduct. The defendant's arguments regarding the limitation of liability and lack of intention to bind herself personally were dismissed as self-serving and unsupported by law or...

Court Disposition

Plaintiff's claim succeeds; defendant is ordered to pay the principal debt, interest, and costs.

Orders

  • The defendant is ordered to pay the plaintiff the sum of R2,830,000.00.
  • The defendant is ordered to pay interest on the said sum at the prime lending rate plus 1% from 24 January 2011 to date of payment.