Aslam Moosajee (ZA)

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The perils of rushing into bond foreclosure proceedings

By Aslam Moosajee (ZA) on December 12, 2016 Posted in Banking

Banks should be careful about rushing into bond foreclosure proceedings, when the arrears owed are not significant. Instead, the bank should try to engage with the consumer and see if a settlement can be negotiated to prevent foreclosure and the consumer losing their home. In FirstRand Bank Limited v Makaleng, Mr Makaleng was in arrears … Continue reading

A liquidation application is not appropriate for disputed debts

By Aslam Moosajee (ZA) on December 11, 2016 Posted in General

In November 2016, the Supreme Court of Appeal reiterated that if a respondent in a liquidation application disputes the indebtedness on bona fide and reasonable grounds, the liquidation application should be refused. Liquidation proceedings are not designed for the enforcement of disputed debts. In the case of Freshvest Investments (Pty) Ltd v Marabeng (Pty) Ltd, … Continue reading

Settlement agreements and waiver of right to approach courts

By Aslam Moosajee (ZA) on September 19, 2016 Posted in General

On 15 September 2016, the Constitutional Court in Gbenga-Oluwatoye v Reckitt Benckiser South Africa (Pty) Ltd, held that a full and final settlement clause in an agreement to settle a dispute was lawful, even though the agreement contained a waiver to approach the CCMA or any other court for relief. The court highlighted the importance … Continue reading

Acceleration clauses and prescription

By Aslam Moosajee (ZA) on June 3, 2016 Posted in Banking

If a loan is repayable in instalments and includes an acceleration clause that if the debtor defaults on paying any instalment, the creditor is entitled on notice to terminate the loan agreement and claim the full balance outstanding, the debt ordinarily only prescribes three years after the date of the notice claiming the full outstanding … Continue reading

Failure to join creditors is fatal to an application to set aside business rescue proceedings

By Aslam Moosajee (ZA) on May 30, 2016 Posted in Banking

Creditors of a company have a substantial interest in an application to set aside business rescue proceedings or the adoption of a business rescue plan. A court will dismiss such an application if the creditors are not joined as parties to the application. Giving notice of the application to the creditors does not cure the … Continue reading

Bank held liable for the fraudulent conduct of a former director of its customer

By Aslam Moosajee (ZA) on May 23, 2016 Posted in Banking

A bank needs to ensure that a company has authorised its director to allow the company’s bank account to be debited each month, if the payments settle the director’s personal obligations. This much is clear from the recent SCA judgment in First National Bank and Another v Scenematic One (Pty) Ltd. Mr Naude, a former … Continue reading

New NCA regulations prescribing maximum interest rates and service and initiation fees come into force as court application fails

By Aslam Moosajee (ZA) on May 5, 2016 Posted in Banking

The new regulations prescribing the maximum rates of interest, initiation fees and service fees that credit providers can charge come into effect on 6 May 2016. An urgent application by Micro Finance South Africa (MFSA) to stay the implementation of the new regulations pending the outcome of an application to set aside the Minister of … Continue reading

Failure to disclose business rescue results in setting aside of tender

By Aslam Moosajee (ZA) on April 19, 2016 Posted in General

If tender documents impose an obligation on a bidding party to disclose that it has the necessary financial resources to execute a project, the failure by the bidder to disclose that it was placed under business rescue after the bid was submitted but before the contract was awarded, resulted in the successful award of the … Continue reading

A consumer who gets a section 129 notice cannot rely on fanciful technical points

By Aslam Moosajee (ZA) on March 10, 2016 Posted in Banking

The purpose of s129 of the National Credit Act (NCA) is to ensure that a consumer is notified of the default and of the various options available to the consumer. In Sebola v Standard Bank the Constitutional Court held that a credit provider can normally show compliance with s129 by: proving that the notice was sent … Continue reading

Insist on clear court orders that affect you

By Aslam Moosajee (ZA) on November 30, 2015 Posted in Banking

All laws and court orders must be written in a clear and accessible way. Vague laws or court orders violate the rule of law, which is a founding principle of our Constitution. In Minister of Water and Environmental Affairs v Kloof Conservancy, the Supreme Court of Appeal set aside part of a court order because it … Continue reading

Prescription of debts owed to state owned/controlled entities

By Aslam Moosajee (ZA) on November 28, 2015 Posted in General

While a debt owed to the state only prescribes after 15 years, a debt owed to a state owned enterprise prescribes after 3 years. In the Isibaya Fund v Visser and another case, the Fund sought an order under section 424 of the Companies Act 1973 declaring two respondents, who had been directors of a failed … Continue reading

Proving prejudice not sufficient for surety to escape liability

By Aslam Moosajee (ZA) on November 18, 2015 Posted in Banking

Prejudice to a surety will only release the surety from liability if the prejudice is the result of a breach of a legal duty or obligation owed by the creditor. The primary sources of a creditor’s duties and obligations are the principal agreement and the suretyship. If the prejudice complained of results from conduct falling … Continue reading

A public officer’s function is to inspire confidence that all is well in public life

By Aslam Moosajee (ZA) on October 15, 2015 Posted in General

The Supreme Court of Appeal judgment in SABC v DA is important not only because it emphasises that the office of the Public Protector, like all state institutions set up in Chapter 9 of the Constitution to support constitutional democracy, is a respected one and that remedial action taken by the Public Protector should not … Continue reading

Business rescue: Constitutional Court upholds SCA judgment regarding interpretation of binding offer in Section 153(1b)(ii) of the Companies Act

By Aslam Moosajee (ZA) on August 3, 2015 Posted in Banking

The Constitutional Court refused leave to appeal against the Supreme Court of Appeal decision that a “binding offer” to a creditor in business rescue proceedings, made under s 153(1)(b)(ii) of the 2008 Companies Act, is not automatically binding on the creditor. The appeal had “no prospects of success” which effectively confirms the correctness of the interpretation of … Continue reading

Amendments to Banks Act

By Aslam Moosajee (ZA) on July 1, 2015 Posted in Banking

With effect from 29 June 2015, the Banks Act has been amended. The amendments to the Banks Act enable the provisions in the Companies Act on arrangements and compromises to apply to banks under curatorship and to expand the basis on which a curator of a bank may dispose of all or part of the … Continue reading

Business rescue: binding offer to purchase voting interest is not automatically binding on creditor that votes against the plan

By Aslam Moosajee (ZA) on May 20, 2015 Posted in Banking

In an important judgment delivered by the Supreme Court of Appeal on 20 May 2015 in African Banking Corporation of Botswana Ltd v Kariba Furniture Manufacturers (Pty) Ltd and others, the Supreme Court of Appeal held that a purportedly binding offer made to a creditor, who opposes a business rescue plan, is not automatically binding … Continue reading

Section 163 of Companies Act not wide enough to allow a court to authorise a shareholder to institute action in the name of the company

By Aslam Moosajee (ZA) on March 24, 2015 Posted in General

If the board of directors of a company refuses or is unable to institute legal proceedings to recover any loss suffered by the company from a third party, an aggrieved shareholder or director should not rely on Section 163 of the Companies Act to obtain permission from a court to institute or continue legal proceedings … Continue reading

Serious consequences if you use money mistakenly transferred into your account

By Aslam Moosajee (ZA) on February 11, 2015 Posted in Banking

In the digital age, more and more people are using electronic banking. The risks associated with electronic banking include typing errors which result in money being transferred to an incorrect account or more money being paid than is due. If a person receives money mistakenly transferred to their account and uses that money, knowing that … Continue reading

Business rescue and sureties

By Aslam Moosajee (ZA) on December 1, 2014 Posted in Banking

The latest appeal court decision of New Port Finance Co v Nedbank reinforces our view that every suretyship securing a company’s debts should specifically preserve the creditor’s rights against a surety despite discharge of any part of the principal debt by a business rescue plan and that creditors should ensure that claims against sureties are preserved … Continue reading

Track and trace usually sufficient for section 129 NCA notices – Sebola clarified

By Aslam Moosajee (ZA) on February 20, 2014 Posted in Banking

Section 129 of the National Credit Act does not require a credit provider to prove that a notice by registered post actually came to the attention of the consumer. If a consumer has elected to receive notices by post, a credit provider must prove: (a) the sending of the notice by registered mail; (b) that … Continue reading