SALE PROCEEDS WITHHELD FOR THIRD PARTY CREDITOR?
Endeto Engineering CC v Bezuidenhout and Another (59474/2016) [2016] ZAGPPHC 713
(17 August 2016)
A surety squandering away assets at a time when the principal debtor has been declared insolvent raises real concerns on the side of the creditor. Can a creditor successfully apply to court for an order that proceeds of a property sale by such surety be held over (pending finalisation of an action against the surety) in these circumstances, even where the creditor has no claim against the properties per se? The judgment provides insight into how our courts will approach such circumstances.
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The Judgment
Summary of the Judgment
OVER-INDEBTEDNESS & VOLUNTARY SEQUESTRATION: MUST CONSUMER FIRST TRY NCA DEBT COUNSELLING?
Ex Parte Fuls and Others (28761/16; 36624/16; 36626/16; 36636/16) [2016] ZAGPPHC 490
(23 June 2016)
Many people currently find themselves over-indebted to the extent that they can no longer service their credit agreements. Often they are advised that declaring themselves insolvent (voluntary surrender) is the best “debt free solution”. But the Insolvency Act requires such a step to be to the advantage of creditors and where this is not shown, an application will fail. Acknowledging that the NCA’s provisions assisting over-indebted debtors is far more beneficial than the Insolvency Act’s provisions, for both debtors and creditors, can a debtor be obliged first to apply for debt relief before surrendering his estate?
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The Judgment
Summary of the Judgment