Eamonn Courtney v Izak Johannes Boshoff NO and Others

Absa Bank Ltd applied for the sequestration of the estate of Mr Eamonn Courtney, who had guaranteed substantial debts of companies he controlled. The application was served on him, but he did not oppose it. On 4 May 2020, the Gauteng Division of the High Court granted a final sequestration order on an unopposed basis, without first granting a provisional sequestration order or issuing a rule nisi under the Insolvency Act 24 of 1936. Trustees were appointed and administered the insolvent estate. Mr Courtney became aware of the final sequestration order by July 2020 but took no steps to challenge it and did not cooperate with the trustees. Nearly two years later, after trustees sought relief in Scotland relating to his assets, Mr Courtney launched an urgent application contending that the final sequestration order was a nullity because it had not been preceded by a provisional order. The High Court dismissed his application but varied the original order to one of provisional sequestration with retrospective effect. Mr Courtney appealed to the Supreme Court of Appeal.

The appeal against the dismissal of Mr Courtney’s application was dismissed with costs, including the costs of two counsel. Paragraphs 4 to 8 of the High Court’s order, which varied the sequestration order and dealt with costs and ancillary relief, were set aside.

The case clarifies that a final sequestration order granted without a prior provisional order is not automatically a nullity in South African insolvency law. It reinforces the principle that even procedurally defective court orders remain valid and binding until set aside, and distinguishes such cases from those where courts act without jurisdiction or contrary to express statutory prohibitions. The judgment underscores the limited scope of rescission and the consequences of deliberate non-participation in litigation.