South Africa Case Law

Prevance Bonds (Pty) Limited v Voltex (Pty) Limited (43914/17)

Prevance Bonds (Pty) Limited v Voltex (Pty) Limited (43914/17) [2021] ZAGPPHC 818 (2 December 2021)

Court

North Gauteng High Court, Pretoria

Case number

43914/17

Judge

E van der Schyff

The court found that rectification of an application for credit incorporating a cession of book debts is allowed in law after the winding-up of the company whose book debts were ceded. The court did not follow the earlier decision in Nedbank v Chance, noting conflicting judgments and the need for legal certainty. The third respondent's arguments regarding misdirection and procedural fairness were rejected, as the audi et alteram partem principle was observed and the factual basis for rectification was addressed in written submissions. The court held that the liquidator is the appropriate part…

Source excerpt

• Rectification Of Contract
• Cession Of Book Debts
• Liquidation Proceedings
• Secured Creditor Status

Voltex (Pty) Limited v First Strut (RF) Limited and Others (43914/17)

Voltex (Pty) Limited v First Strut (RF) Limited and Others (43914/17) [2021] ZAGPJHC 630 (5 October 2021)

Court

South Gauteng High Court, Johannesburg

Case number

43914/17

Judge

E van der Schyff

The court held that rectification of the written agreement is competent post-liquidation where the evidence establishes that a valid cession agreement was concluded prior to liquidation and the error is limited to the misdescription of a party. The applicant's real right of security existed at the time of liquidation, and rectification does not create new rights or alter the status quo. The absence of opposition from the liquidators and the uncontested evidence of the applicant's intention and the parties' dealings supported the grant of rectification. The court distinguished cases where rect…

Source excerpt

• Rectification Of Contract
• Cession Of Book Debts
• Concursus Creditorum
• Secured Creditor Status
• Liquidation Proceedings

Engen Petroleum Limited v Flotank Transport (Pty) Ltd (1049/2017)

Engen Petroleum Limited v Flotank Transport (Pty) Ltd (1049/2017) [2020] ZANCHC 35 (5 June 2020)

Court

Northern Cape High Court, Kimberley

Case number

1049/2017

Judge

Makoti AJ

The court dismissed Engen’s claim against Flotank, holding that after Windsharp’s liquidation Engen’s remedy lay against the insolvent estate, not directly against Flotank.

• Cession In Securitatem Debiti
• Liquidation Effect On Cession
• Locus Standi
• Notice Of Perfection
• Secured Creditor Status
• Insolvency Act Section 44

Development Bank of Southern Africa Ltd. v Van Rensburg NO and Others (490/2000)

Development Bank of Southern Africa Ltd. v Van Rensburg NO and Others (490/2000) [2002] ZASCA 39; [2002] 3 All SA 669 (SCA); 2002 (5) SA 425 (SCA) (14 May 2002)

Court

Supreme Court of Appeal

Case number

490/2000

Judges

Nienaber, Streicher, Navsa

The majority held that the appellant, having obtained possession of Serious Mills' movable property before the commencement of winding-up, acquired the status of a secured creditor as if a pledgee. The interim order authorising possession was properly granted and should have been confirmed to the extent that possession was obtained prior to liquidation. The court found that the phrase 'at the time' in section 348 of the Companies Act refers to a specific point in time, not merely the date, and that the attachment occurred before the winding-up commenced. The cession in securitatem debiti enti…

Source excerpt

• Cession In Securitatem Debiti
• General Notarial Bond
• Perfection Of Security
• Winding Up Proceedings
• Secured Creditor Status
• Attachment Prior To Liquidation

Millman NO v Twiggs and Another (610/93)

Millman NO v Twiggs and Another (610/93) [1995] ZASCA 62; 1995 (3) SA 674 (AD); [1995] 2 All SA 611 (A) (26 May 1995)

Court

Supreme Court of Appeal

Case number

610/93

Judges

Hefer, Vivier, Steyn, F H Grosskopf, Schutz

The Supreme Court of Appeal held that the cession in securitatem debiti created a pledge over the right to receive payment from Tuna Marine, effective for both debts secured—one owed by the cedent and one by an outsider. The court found no logical or legal basis to distinguish between the two clauses of the cession, as the law permits property to be pledged to secure another's obligation. The Insolvency Act does not codify all aspects of insolvency law, and where it is silent, the common law applies. The common law entitles the pledgee to secured creditor status in respect of both debts. The…

Source excerpt

• Cession In Securitatem Debiti
• Pledge Of Rights
• Insolvency Liquidation
• Secured Creditor Status

Bank of Lisbon and South Africa Ltd. v Master of the Supreme Court (Transvaal Provincial Division) (127/86)

Bank of Lisbon and South Africa Ltd. v Master of the Supreme Court (Transvaal Provincial Division) (127/86) [1986] ZASCA 121; [1987] 1 All SA 286 (A) (30 September 1986)

Court

Supreme Court of Appeal

Case number

127/86

Judges

Rabie, Jansen, Corbett, Galgut, Joubert

The court held that Bank of Lisbon was not a secured creditor and had to be treated as concurrent, with liability for costs under the Insolvency Act.

• Secured Creditor Status
• Cession In Securitatem Debiti
• Liquidation And Distribution Account
• Costs Of Realisation
• Concurrent Creditor Liability
• Secured-creditor-status