South Africa Case Law

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

Stewart and Another v Prinsloo and Others (1431/2011, 1430/2011, 1824/2011, 2196/2011)

Stewart and Another v Prinsloo and Others (1431/2011, 1430/2011, 1824/2011, 2196/2011) [2012] ZAECPEHC 30 (15 May 2012)

Court

Eastern Cape High Court, Port Elizabeth

Case number

1431/2011, 1430/2011, 1824/2011, 2196/2011

Judge

Revelas

After settlement of an insolvency action arising from an illegal investment scheme, the High Court ordered each party to pay its own costs and allowed expert witness fees.

• Insolvency Act Section 26
• Insolvency Act Section 30
• Illegal Pyramid Scheme
• Unlawful Dispositions
• Costs Award
• Banking Act Contravention

Venter v Sackstein N.O and Others (9229/05)

Venter v Sackstein N.O and Others (9229/05) [2008] ZAECHC 75 (26 May 2008)

Court

High Courts - Eastern Cape

Case number

9229/05

Judge

Revelas

The court found that the Supreme Court of Appeal in Fourie v Edeling NO and Others, although not making an explicit order regarding reinvestments, accepted as a matter of law that book-entry reinvestments ('roll overs') do not constitute impeachable dispositions under the Insolvency Act. The judgment clarified that the repayment of an investor's capital, even if the underlying scheme was illegal, is not a disposition without value and is made in discharge of an obligation to return the illegal payment. The court rejected the defendants' artificial construction that the 'roll over' referred on…

Source excerpt

• Insolvency Act Section 26
• Insolvency Act Section 30
• Illegal Pyramid Scheme
• Settlement Agreement Interpretation
• Disposition Of Property
• Reinvestment Rollover