Van Der Walt and Another v Le Roux and Another (3638/2001) [2003] ZAFSHC 10; [2004] 4 All SA 476 (O) (31 July 2003)

Van Der Walt and Another v Le Roux and Another (3638/2001) [2003] ZAFSHC 10; [2004] 4 All SA 476 (O) (31 July 2003)

The court found that, despite the incorrect description of the underlying debt in the notarial bond, the true intention of the parties was to secure the insolvent's suretyship obligation to the trust. The parties were at all times aware that the only liability of the insolvent to the trust was as surety, and the bond was intended to secure this obligation. The error in the bond's wording was due to the drafter's failure to accurately reflect the parties' agreement, but this did not prejudice third parties or affect the creation of a real right. Applying Thienhaus, the court held that the bond was valid and not void ab initio. Consequently, the application to declare the bond void and set...

Citation
[2003] ZAFSHC 10
Parties
Applicant: H.G. Van Der Walt N.O.; Applicant: C.J. Venter N.O.; Respondent: W.J. Le Roux N.O.; Respondent: J. Vos N.O.
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
31 July 2003
Case Number
3638/2001
Procedural Posture
Civil Application / Final Judgment After Agreed Statement of Facts; No Oral Evidence
Outcome
Application dismissed with costs, including costs of senior counsel.
Judges
Lombard, R
Legal Topics
Notarial Bond Validity, Suretyship, Preference in Insolvency, Description of Debt in Security, Section 29 Insolvency Act
Land and Property Civil Procedure Notarial Bond Validity Suretyship Preference in Insolvency Description of Debt in Security Section 29 Insolvency Act

Case Brief

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Parties

H.G. Van Der Walt N.O.

Applicant

C.J. Venter N.O.

Applicant

W.J. Le Roux N.O.

Respondent

J. Vos N.O.

Respondent

Procedural Posture

Civil Application / Final Judgment After Agreed Statement of Facts; No Oral Evidence

Legal Issues

  1. 1 Whether the notarial general bond registered over the insolvent's movable property is null and void due to incorrect description of the underlying debt.
  2. 2 Whether, if the bond is void, the transfer of cattle to the respondents constituted an undue preference under section 29 of the Insolvency Act.
  3. 3 Whether the respondents proved that the transfer of cattle occurred in the ordinary course of business and without intent to prefer them above other creditors.

Ratio Decidendi

The court found that, despite the incorrect description of the underlying debt in the notarial bond, the true intention of the parties was to secure the insolvent's suretyship obligation to the trust. The parties were at all times aware that the only liability of the insolvent to the trust was as surety, and the bond was intended to secure this obligation. The error in the bond's wording was due to the drafter's failure to accurately reflect the parties' agreement, but this did not prejudice third parties or affect the creation of a real right. Applying Thienhaus, the court held that the bond was valid and not void ab initio. Consequently, the application to declare the bond void and set...

Court Disposition

Application dismissed with costs, including costs of senior counsel.

Orders

  • The applicants' application is dismissed with costs, including the costs of a senior advocate.