McCarthy Ltd v Gore N.O.

Ramsauer Transport (Pty) Ltd, a transport haulage company, was placed in liquidation. Prior to liquidation it sold 28 vehicles to McCarthy Ltd for R2 052 000 without advertising the sale as required by s 34(1) of the Insolvency Act 24 of 1936. The proceeds were paid to an associated company and not used for Ramsauer’s benefit. The liquidator sought to have the transfer declared void, arguing that Ramsauer was a ‘trader’ under the Act because it regularly sold vehicles and factored book debts as part of its business. McCarthy contended that Ramsauer’s primary business was transport, not the sale of property, and that the sale of vehicles was merely incidental.

The appeal was upheld with costs. The High Court’s judgment was set aside and replaced with an order dismissing the liquidator’s claim with costs.

The case clarifies and narrows the interpretation of ‘trader’ under the Insolvency Act, confirming that only a business’s primary activities are relevant. It limits the scope of s 34(1) and protects third parties from having transactions invalidated where notice requirements were not reasonably foreseeable. The decision reinforces strict statutory interpretation in insolvency matters.