Standard Bank of SA Ltd v Memoak No. 6 CC, Memoak NO 7 CC, Wright, Wright (138/10, 139/10, 140/10, 141/10) [2010] ZAECPEHC 27 (14 June 2010)

Standard Bank of SA Ltd v Memoak No. 6 CC, Memoak NO 7 CC, Wright, Wright (138/10, 139/10, 140/10, 141/10) [2010] ZAECPEHC 27 (14 June 2010)

The court found that the applicant had established, at least prima facie, that Memoak No 6 CC and Memoak No 7 CC were factually insolvent and indebted to the applicant, and that the alleged novation and consolidation of debts to the trust was not supported by the evidence. The financial statements, correspondence, and prior litigation by Mrs Wright herself confirmed the existence of the debts and insolvency. The court further held that the debt review and debt re-arrangement orders under the National Credit Act did not preclude the applicant from seeking liquidation and sequestration, as such proceedings are not applications to enforce a credit agreement. The court was satisfied that...

Citation
[2010] ZAECPEHC 27
Parties
Applicant: Standard Bank of SA Limited; Respondent: Memoak No 6 CC; Respondent: Memoak No 7 CC; Respondent: Sheryl Jeanette Wright; Respondent: Sheryl Jeanette Wright N.O.
Court
Eastern Cape High Court, Port Elizabeth
Jurisdiction
South Africa
Judgment Date
14 June 2010
Case Number
138/10, 139/10, 140/10, 141/10
Procedural Posture
Urgent Application / Provisional Liquidation and Sequestration Applications
Outcome
Provisional liquidation of Memoak No 6 CC and Memoak No 7 CC; provisional sequestration of the estates of Mrs Wright and the Capricorn Trust.
Judges
Kroon
Legal Topics
Provisional Liquidation, Provisional Sequestration, Novation, Debt Review, National Credit Act, Creditor Standing
Banking and Finance Civil Procedure Commercial and Corporate Provisional Liquidation Provisional Sequestration Novation Debt Review National Credit Act +1 more

Case Brief

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Parties

Standard Bank of SA Limited

Applicant

Memoak No 6 CC

Respondent

Memoak No 7 CC

Respondent

Sheryl Jeanette Wright

Respondent

Sheryl Jeanette Wright N.O.

Respondent

Procedural Posture

Urgent Application / Provisional Liquidation and Sequestration Applications

Legal Issues

  1. 1 Whether Memoak No 6 CC and Memoak No 7 CC are factually insolvent and liable for provisional liquidation.
  2. 2 Whether Mrs Wright and the Capricorn Trust are factually insolvent and liable for provisional sequestration.
  3. 3 Whether the alleged novation and consolidation of debts from the close corporations to the trust is valid and effective.

Ratio Decidendi

The court found that the applicant had established, at least prima facie, that Memoak No 6 CC and Memoak No 7 CC were factually insolvent and indebted to the applicant, and that the alleged novation and consolidation of debts to the trust was not supported by the evidence. The financial statements, correspondence, and prior litigation by Mrs Wright herself confirmed the existence of the debts and insolvency. The court further held that the debt review and debt re-arrangement orders under the National Credit Act did not preclude the applicant from seeking liquidation and sequestration, as such proceedings are not applications to enforce a credit agreement. The court was satisfied that...

Court Disposition

Provisional liquidation of Memoak No 6 CC and Memoak No 7 CC; provisional sequestration of the estates of Mrs Wright and the Capricorn Trust.

Orders

  • Memoak No 6 CC is placed in provisional liquidation in the hands of the Master of the High Court.
  • Memoak No 7 CC is placed in provisional liquidation in the hands of the Master of the High Court.