First Rand Bank v The Master & Others
07 April 2021
The issue before the SCA was the interpretation of Sections 14(3), 89(2) and 106 of the Insolvency Act which deal with the liability of creditors to pay a contribution in an insolvent estate where there is insufficient alternatively no free residue to meet expenses as set out in Section 97(2)(c) of the Act.
The appeal was upheld and the SCA concluded that, having determined the meaning of the abovementioned sections, it was clear that the Body Corporate as the applicant creditor was solely liable to pay the costs of sequestration. The two secured creditors, having relied on their security, were not liable to contribute.
The High Court Order was replaced and the trustees directed to amend the L&D account to reflect that the Body Corporate is solely liable for the contribution.
This judgment was kindly sent to us by Sybrand Tintinger.