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South Africa decisions
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Schwarz and Another v Andre NO and Others (34615/16) [2017] ZAGPJHC 461 (16 August 2017)
The High Court upheld an exception to particulars of claim, finding the second plaintiff had not pleaded enough material facts to sustain a cause of action.
City of Tshwane Metropolitan Municipality v Mitchell (38/2015) [2016] ZASCA 1; [2016] 2 All SA 1 (SCA); 2016 (3) SA 231 (SCA) (29 January 2016)
The majority held that section 118(3) of the Municipal Systems Act creates a statutory hypothec over property for all municipal debts, which survives transfer of the property, including transfers following a sale in execution. There is no indication in the Act that the legislature intended to extinguish the hypothec in such circumstances, nor is there any statutory exception analogous to the common law rule for consensual hypothecs. The municipality retains its security and may perfect it by obtaining a court order and selling the property in execution to recover historical debts. The respond…
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Perregrine v City of Tshwane Metropolitan Municipal Authority (50816/14) [2014] ZAGPPHC 758 (8 September 2014)
The court held that the statutory hypothec created by section 118(3) of the Municipal Systems Act is extinguished when property is sold in execution and transferred to a new owner. The principal debt for historical municipal charges remains with the original debtor and does not transfer to the new owner or successor in title. There is no statutory or contractual basis for imposing joint or several liability for historical debts on successors in title. The municipality is not entitled to refuse the supply of municipal services to the new owner solely because of outstanding historical debts inc…
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City of Tshwane Metropolitan Municipality v Mathabathe and Another (502/12) [2013] ZASCA 60; 2013 (4) SA 319 (SCA); [2013] 3 All SA 227 (SCA) (22 May 2013)
The Supreme Court of Appeal held that section 118(3) creates a separate statutory charge for municipal debts and does not justify demanding an undertaking for historical debt.
Vosal Investments (Pty) Limited v City of Johannesburg and Others (A5023/08) [2009] ZAGPJHC 28; 2010 (1) SA 595 (GSJ) (17 June 2009)
The High Court set aside a default judgment and sale in execution after finding the municipality had improperly bundled rates, refuse and sewerage claims into one unspecific debt.
BOE Bank Ltd v City of Tshwane Metropolitan Municipality (240/2003) [2005] ZASCA 21; 2005 (4) SA 336 (SCA) (29 March 2005)
Section 118(3) of the Local Government: Municipal Systems Act 32 of 2000 creates a statutory charge over property for all municipal debts, regardless of when they became due, and this charge enjoys preference over any mortgage bond registered against the property, including those registered prior to the commencement of the Act. The time limit in section 118(1) applies only to the embargo on transfer and does not limit the scope of the statutory charge in section 118(3). Applying section 118(3) to existing mortgage bonds does not amount to retrospective effect, as the extended security operate…
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Ukubona 2000 Electrical CC and Another v City Power Johannesburg (Pty) Ltd (155/03) [2004] ZASCA 65; 2004 (6) SA 323 (SCA) (1 June 2004)
The court held that section 84(1) of the Insolvency Act creates a statutory hypothec only in favour of a creditor/seller who is the owner of the goods at the time of the debtor's insolvency. The definition of 'instalment sale transaction' in the Credit Agreements Act includes transactions where the purchase price is payable in one lump sum at a future date. However, since the appellants were not owners of the components at the time of Drivecor's liquidation—their suppliers had reserved ownership and had not been paid—they could not benefit from the statutory hypothec. The legislative intent w…
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Potgieter NO v Daewoo Heavy Industries (Pty) Ltd (466/01) [2002] ZASCA 154; [2003] 1 All SA 135 (SCA); 2003 (3) SA 98 (SCA) (29 November 2002)
The Supreme Court of Appeal held that section 84(1) of the Insolvency Act incorporates only the definitional elements of instalment sale transactions from paragraphs (a) and (b) of the Credit Agreements Act, not the Act's substantive application. The court rejected the respondent's restrictive interpretation, finding that the statutory hypothec applies to all qualifying instalment sale transactions, regardless of whether the Credit Agreements Act governs them. The summary judgment for delivery of the front-end loader was set aside, as the asset formed part of the insolvent estate subject to D…
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