The Gauteng High Court, Johannesburg, has ordered a wife to return a R1.2 million car which she was allowed to use pending the divorce between her and her husband, but as the vehicle formed part of the corporate assets of a closed corporation now in liquidation, it was ruled that the vehicle belonged to the liquidators.

The woman, who may not be identified as divorce proceedings are pending, was driving the Toyota Land Cruiser while being married. The vehicle belonged to Kanivest 3214 CC, the corporation of which her husband was the managing director.

The vehicle was bought in 2020 by the corporation under an installment sale agreement. Her husband allowed her the use of the vehicle although the corporation was its registered owner.

Last year her husband took steps to put the corporation into voluntary liquidation and the voluntary winding up of the corporation commenced, with liquidators being appointed. The voluntary winding-up occurred after the breakdown of the couple’s marriage.

The wife meanwhile continued to drive the vehicle, but the liquidators wanted it back to settle debts with creditors. It argued that after settlement of the outstanding debt on the vehicle, there will be a substantial excess available for payment to creditors of the corporation.

According to the liquidators they are being prevented from realising the value of the vehicle, because it remains in the possession of the respondent (wife)  and she refuses to surrender it, as she is using it as her personal mode of transport.

The wife in turn said that she relies on an order granted in her favour in this court, during a Rule 43 application for interim maintenance pending the final divorce. During that application the judge ruled that she may exclusively use the vehicle for the time being.

The corporation meanwhile turned to court earlier to get the vehicle back, but it failed as the judge found the wife was entitled to use the car. It now again turned to court to appeal that ruling before three judges.

In the appeal, the court said it was and is the liquidators’ obligation to collect all the assets of the corporation and arrange for the sale of those assets as expeditiously as possible. It is not disputed that the vehicle was acquired by the corporation under an installment sale agreement with FirstRand Bank Ltd (Wesbank). Section 84(1) of the Insolvency Act deals with assets acquired by way of an installment sale agreement.   

Under this section the liquidators are obliged to deliver the vehicle to Wesbank who will then hold it as security for its claim against the corporation under the installment sale agreement. The court concluded that the liquidator’s obligations towards the creditors was in this case more important than a temporary order stemming from divorce proceedings. The wife must thus immediately give the vehicle back.

zelda.venter@inl.co.za

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