South Africa Case Law

K2013046547/07 (South Africa) (Pty) Ltd and Others v Hyde Construction CC and Another (513/2020)

K2013046547/07 (South Africa) (Pty) Ltd and Others v Hyde Construction CC and Another (513/2020) [2021] ZASCA 82 (17 June 2021)

Court

Supreme Court of Appeal

Case number

513/2020

Judges

Ponnan, Mocumie, Dlodlo, Gorven, Rogers

The SCA held Blue Cloud was not a trader when it sold the property, so s 34(3) of the Insolvency Act did not void the transfer or mortgage bond.

• Insolvency Act Section 34
• Definition Of Trader
• Onus Of Proof
• Mortgage Bond Voidness
• Transfer Of Property
• Enforcement Of Creditors Claims

CJ Pharmaceuticals Enterprises (Pty) Ltd and Others v Main Road Centurion 30201 CC t/a Albermarle Pharmacy and Another (7909/2020)

CJ Pharmaceuticals Enterprises (Pty) Ltd and Others v Main Road Centurion 30201 CC t/a Albermarle Pharmacy and Another (7909/2020) [2020] ZAGPJHC 353; 2021 (5) SA 246 (GJ) (21 December 2020)

Court

South Gauteng High Court, Johannesburg

Case number

7909/2020

Judge

JT BoltAR

The High Court held that a pharmacy business transfer was only relatively void under section 34(1) of the Insolvency Act, and dismissed claims to set it aside.

• Insolvency Act Section 34
• Actio Pauliana
• Business Rescue
• Declaratory Relief
• Fraudulent Collusion
• Insolvency-act-section-34

Hyde Construction CC v K2013046547 (South Africa) (Pty) Ltd and Others (9179/2019)

Hyde Construction CC v K2013046547 (South Africa) (Pty) Ltd and Others (9179/2019) [2020] ZAWCHC 31 (29 April 2020)

Court

Western Cape High Court, Cape Town

Case number

9179/2019

Judge

D.S Kusevitsky

The court held that Blue Cloud was a trader under the Insolvency Act, set aside the property sale and bond registration as against Hyde Construction, and ordered costs.

• Insolvency Act Section 34
• Voidable Dispositions
• Trader Definition
• Property Transfer
• Creditor Protection
• Motion Proceedings

Steloy Castings (Pty)Ltd and Others v B&K Castings (Pty)Ltd. (49326/2015)

Steloy Castings (Pty)Ltd and Others v B&K Castings (Pty)Ltd. (49326/2015) [2016] ZAGPPHC 673 (20 July 2016)

Court

North Gauteng High Court, Pretoria

Case number

49326/2015

Judge

Madima

The court found that the respondent was established for the sole purpose of evading the creditors of Bernades & Kin Foundry CC and fraudulently acquired its assets without payment. The transaction was structured to defeat the rights of creditors and constituted an alienation in fraudem creditorum, satisfying the requirements for the actio Pauliana and the relevant sections of the Insolvency Act. The applicants had locus standi, having properly indemnified the liquidators. The respondent was deemed the alter ego of the insolvent entity, and the corporate veil was pierced to treat the responden…

Source excerpt

• Piercing Corporate Veil
• Actio Pauliana
• Fraudulent Conveyance
• Insolvency Act Section 34
• Locus Standi
• Unlawful Competition

Axal Properties 2 CC v Kotze (712/2012)

Axal Properties 2 CC v Kotze (712/2012) [2013] ZASCA 110 (16 September 2013)

Court

Supreme Court of Appeal

Case number

712/2012

Judges

Mthiyane, Brand, Tshiqi, Majiedt, Swain

The Supreme Court of Appeal held that Mega Super Cement CC remained a 'trader' for the purposes of s 34(3) of the Insolvency Act at the time it disposed of its assets, as the cessation of trading activity does not terminate trader status until all debts are discharged. However, Kotze failed to prove that his claim arose 'in connection with' the business of Mega. The evidence established that his claim was for a brokerage fee relating to the sale of a member's interest, not a claim connected to Mega's primary business activities. The distinction between business and non-business liabilities ap…

Source excerpt

• Insolvency Act Section 34
• Trader Definition
• Creditor Protection
• Close Corporation Liability

Kotze v Axal Properties 2 CC and Others (2011/35866)

Kotze v Axal Properties 2 CC and Others (2011/35866) [2012] ZAGPJHC 119 (14 June 2012)

Court

South Gauteng High Court, Johannesburg

Case number

2011/35866

Judge

Sutherland

The High Court held that Mega Super Cement CC remained a trader under the Insolvency Act and that the applicant’s judgment debt was connected to its business.

• Insolvency Act Section 34
• Definition Of Trader
• Voidable Disposition
• Judgment Creditor Rights
• Corporate Persona Liability
• Insolvency-act-section-34

Roos NO and Another v Kevin & Lasia Property Investment Bk and Another (30533/01)

Roos NO and Another v Kevin & Lasia Property Investment Bk and Another (30533/01) [2005] ZAGPHC 88 (7 September 2005)

Court

High Courts - Gauteng

Case number

30533/01

Judge

E M Patel

The court found that the applicants failed to establish that the insolvent company was a 'trader' as defined in section 2 of the Insolvency Act. The company was a property investment entity holding immovable property for capital investment, not for sale or exchange as stock in trade. Building operations were performed by contractors, not by the company itself as a business activity. The Supreme Court of Appeal had already determined that the letting and hiring of immovable property does not fall within the definition of 'trader' for section 34(1) purposes. The applicants' attempt to introduce…

Source excerpt

• Insolvency Act Section 34
• Definition Of Trader
• Ordinary Course Of Business
• Motion Proceedings
• Burden Of Proof

Kevin & Lasia Property Investments CC and Another v Roos NO and Others (480/2002)

Kevin & Lasia Property Investments CC and Another v Roos NO and Others (480/2002) [2003] ZASCA 149; [2004] 1 All SA 380 (SCA); 2004 (4) SA 103 (SCA) (1 December 2003)

Court

Supreme Court of Appeal

Case number

480/2002

Judges

Howie, Navsa, Mthiyane, Cloete, Lewis

SCA considered whether a withdrawn admission bound appellants and whether s 34(1) of the Insolvency Act applied to a property sale by a company said to be a trader.

• Insolvency Act Section 34
• Definition Of Trader
• Voidable Transfer
• Liquidation Procedure
• Insolvency-act-section-34
• Definition-of-trader

Burley Appliances Limited v Grobbelaar N.O. and Others (3029/2001)

Burley Appliances Limited v Grobbelaar N.O. and Others (3029/2001) [2003] ZAWCHC 31; [2003] 3 All SA 505 (C); 2004 (1) SA 602 (C) (14 July 2003)

Court

Western Cape High Court, Cape Town

Case number

3029/2001

Judges

H C Nel, Potgieter AJ

The High Court held that statutory claims under sections 64 and 65 of the Close Corporation Act are subject to ordinary prescription rules.

• Close Corporation Act Section 64
• Close Corporation Act Section 65
• Prescription Act Section 10 11 12
• Insolvency Act Section 34
• Piercing Corporate Veil
• Reckless Trading

Kelvin Park Properties CC v Paterson NO (558/98)

Kelvin Park Properties CC v Paterson NO (558/98) [2000] ZASCA 58; 2001 (3) SA 31 (SCA) ; [2001] 1 All SA 18 (A) (29 September 2000)

Court

Supreme Court of Appeal

Case number

558/98

Judges

Smalberger, Grosskopf, Scott, Farlam, Mthiyane

The court held that the insolvent was a trader at the time of the transfer because he still had substantial trade debts and the business had not been wound up. The cessation of daily trading activities did not alter his status as a trader for the purposes of section 2 of the Insolvency Act. The property formed part of the business as contemplated in section 34(1), given its adaptation for business use and its integral role in the operation of the butchery. The invoice and VAT treatment further supported this conclusion. The failure to publish notice as required by section 34(1) rendered the t…

Source excerpt

• Insolvency Act Section 34
• Definition Of Trader
• Transfer Of Business Assets
• Creditor Protection
• Onus Of Proof