H Dabelstein and Others v M Lane and E Fey NNO

The case arose from the sequestration of the insolvent estate of Jürgen Harksen. Three German creditors sought to attach South African assets belonging to thirteen other foreign creditors (the Dabelsteins) ad fundandam vel confirmandam jurisdictionem in order to institute action, in the name of the provisional trustees, to set aside two payments made by Harksen to the Dabelsteins prior to sequestration. The payments were alleged to be impeachable dispositions under sections 26, 29 or 30 of the Insolvency Act 24 of 1936. Both payments, however, were made pursuant to settlement agreements that had been made orders of court. The applicants relied on section 32(1)(b) of the Act to act in the name of the trustees after the trustees failed to do so. The court a quo confirmed a rule nisi authorising attachment. The Dabelsteins appealed that order.

The appeal was upheld with costs. The order of the court a quo confirming the rule nisi was set aside and replaced with an order discharging the rule nisi with costs, including the costs of two counsel.

The judgment clarifies the interaction between impeachable dispositions under the Insolvency Act and the statutory exclusion for dispositions made in compliance with court orders. It affirms that consent orders are not automatically excluded from the protection of section 2 and that creditors must specifically allege fraud, collusion or other improper conduct to overcome the exclusion. The case also reinforces the requirement that a prima facie cause of action must be properly pleaded when seeking the extraordinary remedy of attachment to found or confirm jurisdiction.