Appointment of Trustee; Effects of Sequestration

Section 34

Voidable sale of business

(1) If a trader transfers in terms of a contract any business belonging to him, or the goodwill of such business, or any goods or property forming part thereof (except in the ordinary course of that business or for securing the payment of a debt), and such trader has not published a notice of such intended transfer in the Gazette, and in two issues of an Afrikaans and two issues of an English newspaper circulating in the district in which that business is carried on, within a period not less than thirty days and not more than sixty days before the date of such transfer, the said transfer shall be void as against his creditors for a period of six months after such transfer, and shall be void against the trustee of his estate, if his estate is sequestrated at any time within the said period.

[Sub-s. (1) Substituted by s. 12 of Act No. 32 of 1952, by s. 2 (a) of Act No. 27 of 1987 and by s. 1 (a) of Act No. 6 of 1991.]


(2) As soon as any such notice is published, every liquidated liability of the said trader in connection with the said business, which would become due at some future date, shall fall due forthwith, if the creditor concerned demands payment of such liability: Provided that if such liability bears no interest, the amount of such liability which would have been payable at such future date if such demand had not been made, shall be reduced at the rate of eight per cent per annum of that amount, over the period between the date when payment is made and that future date.

[Sub-s. (2) Amended by s. 2 of Act No. 101 of 1983.]


(3)
If any person who has any claim against the said trader in connection with the said business, has before such transfer, for the purpose of enforcing his claim, instituted proceedings against the said trader—

(a)    In any court of law, and the person to whom the said business was transferred knew at the time of the transfer that those proceedings had been instituted; or
(b)    In a Division of the Supreme Court having jurisdiction in the district in which the said business is carried on or in the magistrate’s court of that district,
The transfer shall be void as against him for the purpose of such enforcement.

[Sub-s. (3) Substituted by s. 2 (b) of Act No. 27 of 1987 and by s. 1 (b) of Act No. 6 of 1991.]


(4) For the purposes of this section “transfer”, when used as a noun, includes actual or constructive transfer of possession, and, when used as a verb, has a corresponding meaning.

[Sub-s. (4) Added by s. 1 (c) of Act No. 6 of 1991.]