Kevin & Lasia Property Investments CC and Another v Roos NO and Others

The respondents were the liquidators of I J van der Lith Family Holdings (Pty) Ltd, which sold and transferred a shopping centre (OK Sentrum) to the first appellant for R7.7 million. A mortgage bond was registered in favour of the second appellant, Absa Bank Ltd. No notice of the intended transfer was published as required by section 34(1) of the Insolvency Act 24 of 1936. Within five months of the transfer, the company was provisionally and then finally liquidated. The liquidators applied to set aside the transfer and bond as void against creditors under section 34(1). In the court a quo, the appellants formally admitted that the company was a ‘trader’ for purposes of the Act, leaving only the question whether the transfer was in the ordinary course of business. The High Court held that it was not, declared the transfer and bond void, and refused leave to appeal on the ‘trader’ issue, holding the appellants bound by their admission.

The appeal succeeded. Leave to appeal on the ‘trader’ issue was granted. The High Court order declaring the transfer and bond void was set aside, and the matter was remitted to the court a quo for further proceedings, including the possible filing of a replying affidavit by the liquidators. Costs of the appeal were awarded to the appellants; costs in the court below were largely made costs in the cause.

The case is significant for clarifying the interpretation of ‘trader’ under section 2 of the Insolvency Act and confirming that a business consisting solely of owning and letting immovable property does not, without more, fall within that definition. It also provides important guidance on the withdrawal of admissions made in argument, emphasising substance over form and fairness in appellate proceedings.