Du Plessis v Majiedt N O and Others

Mr Tobias Du Plessis, a farmer and sole member of Full Circle Projects Twenty CC, leased a farm property from Full Circle in August 2018. The property was subject to a prior registered continuing covering mortgage bond in favour of FNB, which prohibited leasing without the bank’s written consent. No such consent was obtained. Full Circle was liquidated in January 2021, and Mr Du Plessis was provisionally sequestrated in March 2021. Despite this, Mr Du Plessis instituted application proceedings in July 2021 in his personal capacity and as a trustee of the Tafelkop Trust, seeking an interim interdict to prevent the liquidators of Full Circle from transferring the property to the De Klerk Familie Trust. The liquidators had sold the property pursuant to creditor authorisation, free of the alleged lease. The De Klerk trustees counter-applied for a declaration that the lease was void or unenforceable. The High Court dismissed the main application, upheld the counter-application, and declared the lease void and/or unenforceable. Mr Du Plessis appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, and the High Court’s orders dismissing the main application and granting the counter-application were upheld.

The case authoritatively clarifies that an insolvent lacks locus standi to litigate in matters affecting the insolvent estate unless the Insolvency Act expressly permits it, and that the discharge of a provisional sequestration order does not retrospectively validate proceedings instituted without standing. It reinforces the supremacy of trustees in insolvency litigation and confirms the enforceability of mortgage bond restrictions against third parties.