Case Comments: A global view of business, trade, and property under section 34(1) of the Insolvency Act 24 of 1936
| Jurisdiction | South Africa |
| Date | 25 May 2019 |
| Pages | 330-340 |
| Published date | 25 May 2019 |
| Author | Alastair Smith |
Case Comments/Vonnisbesprekings
A Global View of Business, Trade,
and Property Under Section 34(1)
of the Insolvency Act 24 of 1936
ALASTAIR SMITH
University of South Africa
Running a business involves more than daily trading. In
Paterson NO v
Kelvin Park Properties CC
Bank of Lisbon
International Ltd v Western Province Cellars Ltd & another
1998 (3) SA
899 (W), it was argued unsuccessfully that the trader was not required to
advertise the intended sale of the business under s 34(1) of the Insolvency
Act 24 of 1936, because he had stopped daily trading before the intended
date of sale. In
Paterson,
the defendant also failed to convince the court
that the business could in the particular circumstances be distinguished
from the plot of land on which it was conducted.
In
Paterson NO v Kelvin Park Properties CC,
Paterson, the trustee of
Schutte's insolvent estate, sought to set aside two sales by Schutte to
Kelvin Park Properties CC on the ground that neither had been
advertised as required by s 34(1). Under the first sale, Schutte (the sole
proprietor of a butchery business) sold erf 3475 in Stutterheim on which
the Model Butchery was conducted; under the second, movable
equipment for that butchery. Transfer and delivery occurred before his
estate was sequestrated. The corporation then ran its own butchery on
the premises. As the movables had since been resold by the corporation to
Krause, however, the parties agreed during the litigation that the court be
requested, if the movables were found to have formed part of the
business, to grant an order for the payment of their value instead.
The layout of the premises was important for the second part of the
decision. The erf bordered a street corner and had two separate business
premises, one a general dealer's store, the other the butchery. At the back
was a house abutting the butchery but with its own entrance. The store
covered about 10 per cent of the plot; the butchery and house, about 45
per cent each. Besides running the Model Butchery, Schutte employed his
brother in the business and let him live in the house as a perk. Schutte
owned the butchery building. He did not have a stake in the general
dealer's store, and let that part to another person.
The two sales were concluded about a month after the butchery had
been damaged in a fire. The corporation, having performed the necessary
330
(2000) 12 SA Merc LJ 330
© Juta and Company (Pty) Ltd
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