South Africa Case Law

Dinath and Another v Iginla and Another (079671/2023)

Dinath and Another v Iginla and Another (079671/2023) [2024] ZAGPPHC 1225 (22 November 2024)

Court

North Gauteng High Court, Pretoria

Case number

079671/2023

Judge

Nharmuravate

The court found that the payments made by Joshua Iginla Ministries NPC to purchase a farm in the First Respondent's name constituted a disposition without value under section 26 of the Insolvency Act. The funds originated from SNS, which operated an unlawful Ponzi scheme and was liquidated, making the payments to JIM NPC impeachable and due for repayment to SNS's liquidators. The Respondents failed to provide any evidence that JIM NPC was solvent at the time of the disposition or that value was received in exchange for the payments. The constitutional argument regarding freedom of religion wa…

Source excerpt

• Insolvency Act Section 26
• Disposition Without Value
• Liquidation Proceedings
• Collusive Transactions
• Church Donations
• Creditor Protection

Bailey N.O. and Another v Enderstein Van Der Merwe Inc (9400/2022)

Bailey N.O. and Another v Enderstein Van Der Merwe Inc (9400/2022) [2023] ZAWCHC 251 (12 October 2023)

Court

Western Cape High Court, Cape Town

Case number

9400/2022

Judge

Mantame

The High Court set aside payments by the insolvent Laumas Trust to attorneys for legal fees incurred by Mr Massyn and related entities under section 26(1)(b).

• Insolvency Act Section 26
• Disposition Without Value
• Trust Liability
• Preferent Creditors
• Ponzi Scheme Liquidation
• Insolvency-act-section-26

Cloete Murray N O and Others v Humansdorp Co-operative Limited (1274/2021)

Cloete Murray N O and Others v Humansdorp Co-operative Limited (1274/2021) [2022] ZASCA 187; 2023 (3) SA 66 (SCA) (30 December 2022)

Court

Supreme Court of Appeal

Case number

1274/2021

Judges

Dambuza, Nicholls, Gorven, Basson, Windell

The Supreme Court of Appeal held that payment to the respondent was made under valid demand guarantees, not as a disposition by the insolvent company.

• Insolvency Act
• Disposition Without Value
• Bank Guarantee
• Pledge And Cession
• Liquidation
• Trust Funds

Strydom N.O. and Another v Snowball Wealth (Pty) Ltd and Others (356/2021)

Strydom N.O. and Another v Snowball Wealth (Pty) Ltd and Others (356/2021) [2022] ZASCA 91; 2022 (5) SA 438 (SCA) (15 June 2022)

Court

Supreme Court of Appeal

Case number

356/2021

Judges

Ponnan, Van der Merwe, Hughes, Musi, Smith

The Supreme Court of Appeal held that the phrase 'not made for value' in section 26(1) of the Insolvency Act 24 of 1936 means for no value at all, not for inadequate or insufficient value. The court found that the appellants' interpretation would require significant reading-in and would lead to absurd results, such as setting aside bona fide sales at discounted prices years after the fact. The statutory context and purpose indicate that section 26(1) is intended to apply only to gratuitous dispositions, not to ordinary commercial transactions. The appeal was dismissed as the sales in question…

Source excerpt

• Insolvency Act Section 26
• Disposition Without Value
• Liquidation
• Company Winding Up
• Adequate Value
• Remedies For Creditors

Eckhoff N.O. and Another v Hartshorne and Another (13640/2020)

Eckhoff N.O. and Another v Hartshorne and Another (13640/2020) [2022] ZAWCHC 68 (29 April 2022)

Court

Western Cape High Court, Cape Town

Case number

13640/2020

Judge

Kusevitsky

Joint liquidators sought to set aside a payment to creditors under sections 26, 29, 30 and 31 of the Insolvency Act, but the High Court dismissed the application.

• Insolvency Act Impeachable Transactions
• Voidable Preference
• Undue Preference
• Collusive Dealing
• Disposition Without Value
• Insolvency-act

Murray NO and Others v Humansdorp Co-Operative (1697/19)

Murray NO and Others v Humansdorp Co-Operative (1697/19) [2021] ZAECGHC 97 (2 November 2021)

Court

Eastern Cape High Court, Grahamstown

Case number

1697/19

Judge

I.T. Stretch

The High Court granted leave to appeal and conditional leave to cross-appeal in a liquidation dispute about whether a payment was a disposition without value under section 26.

• Leave To Appeal
• Insolvency Act Section 26
• Disposition Without Value
• Liquidation
• Costs Orders
• Leave-to-appeal

Murray N.O. and Others v Humansdorp Co-Operative Limited (1697/2019)

Murray N.O. and Others v Humansdorp Co-Operative Limited (1697/2019) [2021] ZAECGHC 70 (26 July 2021)

Court

Eastern Cape High Court, Grahamstown

Case number

1697/2019

Judge

Stretch

Liquidators sought to set aside a payment to Humansdorp Co-operative as a disposition without value. The court held the company received value and dismissed the application.

• Disposition Without Value
• Liquidation
• Production Loan Security
• Bank Guarantees
• Cession Of Claims
• Section 26 Insolvency Act

Baker N.O and Others v Investec Bank Limited and Another (14748/16)

Baker N.O and Others v Investec Bank Limited and Another (14748/16) [2021] ZAGPPHC 298 (20 May 2021)

Court

North Gauteng High Court, Pretoria

Case number

14748/16

Judge

MNGQIBISA-THUSI

The High Court upheld a special plea of prescription in an insolvency-related claim and dismissed the plaintiffs’ action with costs.

• Prescription Act
• Liquidation
• Disposition Without Value
• Trust Account Liability
• Alienation Of Land Act
• Prescription

De Jongh Ontwikkelings (Pty) Ltd and Another v Kilotech Investments (Pty) Ltd and Others (63945/2013)

De Jongh Ontwikkelings (Pty) Ltd and Another v Kilotech Investments (Pty) Ltd and Others (63945/2013) [2021] ZAGPPHC 190; 2021 (4) SA 492 (GP) (25 March 2021)

Court

North Gauteng High Court, Pretoria

Case number

63945/2013

Judge

Davis

The High Court held that DJO’s disposal of a R1.9 million claim to Kilotech was impeachable under the Insolvency Act and ordered repayment with interest.

• Insolvency Act Section 26
• Disposition Without Value
• Collusive Dealing
• Liquidation
• Impeachable Transaction
• Insolvency-act-section-26

Engelbrecht NO and Others v Du Toit (2723/2015)

Engelbrecht NO and Others v Du Toit (2723/2015) [2020] ZAWCHC 119 (19 October 2020)

Court

Western Cape High Court, Cape Town

Case number

2723/2015

Judge

A.G. Binns-Ward

The court found that the loan agreements between Smit and the defendant were void under the National Credit Act, as the defendant was not registered as a credit provider when required. Consequently, the interest payments made under these agreements constituted dispositions without value and were set aside under section 26 of the Insolvency Act. The plaintiffs were entitled to recover these amounts. Regarding the capital repayments, the court held that although Smit was hopelessly insolvent and appreciated that his scheme would inevitably collapse, the dominant intention behind the payments wa…

Source excerpt

• Insolvency Act Section 26
• Insolvency Act Section 30
• National Credit Act
• Unlawful Credit Agreement
• Disposition Without Value
• Ponzi Scheme Liability