THE Supreme Court of Appeal in Bloemfontein has dismissed an appeal concerning whether an insolvent individual can initiate legal proceedings in their own name under the Insolvency Act of 1936.
The case involved Tobias Casparus Du Plessis, the sole member of Full Circle Projects Twenty CC, a company that owned a farm he leased for business operations.
After Full Circle was liquidated in January 2021, Du Plessis was provisionally sequestrated in March 2021.
As part of the liquidation, the farm was sold to the De Klerk Familie Trust by liquidators acting on behalf of creditors, despite a lease agreement Du Plessis claimed to have with Full Circle since 2018.
Seeking to prevent the property transfer, Du Plessis applied for an interim interdict.
However, liquidator Donovan Majiedt challenged his legal standing, arguing that an insolvent person cannot litigate independently.
The Free State High Court dismissed Du Plessis’s application, ruling he lacked legal standing due to his sequestration.
The court also found that the lease agreement was invalid as it required, but did not have, written consent from First National Bank, which held a mortgage over the property.
On appeal, the Supreme Court of Appeal confirmed that under the Insolvency Act, an insolvent’s estate vests in trustees, meaning Du Plessis was not entitled to sue in his own name.
The court ruled that lifting the provisional sequestration did not retroactively restore his legal standing.
The court also upheld the sale of the property, ruling that liquidators were authorised by creditors to sell it and that the transaction prioritised maximising returns for creditors.
The appeal was dismissed with costs. – Staff Reporter