City of Johannesburg v Kaplan NO and Another (111/05)
City of Johannesburg v Kaplan NO and Another (111/05) [2006] ZASCA 39; 2006 (5) SA 10 (SCA); 68 SATC 286 (29 March 2006)
The Supreme Court of Appeal held that section 118(3) of the Municipal Systems Act creates a statutory charge on property for municipal debts, granting the municipality preference over mortgage bonds. However, when the debtor is subject to liquidation or insolvency, section 118(2) makes the operation of section 118 subject to section 89 of the Insolvency Act. Section 89(4) limits the preference for municipal debts that qualify as 'taxes' under section 89(5) to a two-year period prior to liquidation and from that date until transfer. Debts not qualifying as 'taxes' are not subject to this limit…
Source excerpt
- Municipal Debt Preference
- Insolvency Act Section 89
- Municipal Systems Act Section 118
- Mortgage Bond Priority
- Liquidation Distribution
- Secured Claims