PIC welcomes SCA sequestration judgment of Eamonn Courtney
The Supreme Court of Appeal has ruled that the UK business-person is ‘hopelessly insolvent’
27 June 2024 - 10:27
by Tauriq Moosa
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A business-person, who started a company from whom the Public Investment Company (PIC) wants almost R800m, lost his appeal against personal sequestration.
Eamonn Courtney became indebted to Absa for about R54m, but the Supreme Court of Appeal (SCA) ruled Courtney was “hopelessly insolvent”.
The court also explained processes for sequestrations and set precedent for what people can do to challenge them.
Courtney had set up communications company Allied Mobile Communications. In 2015, Allied Mobile entered into a deal with the PIC. According to an Allied Mobile’s press release, the company “signed a strategic finance and partnership agreement with the [PIC] for debt funding facility of [R800m]”.
However, in 2018, Allied Mobile fell into trouble with various partners, including the PIC, which sought to liquidate Allied Mobile to reclaim R767.5m. An order liquidating Allied Mobile was granted in 2020.
Courtney failed in his obligations to Absa because he had guaranteed payment for the companies that amounted to R54m. Absa began sequestration proceedings against Courtney.
Less than a week after, Courtney and his wife left for Scotland.
This led to a protracted legal battle. In 2020, the Johannesburg high court sequestered his estate, appointing trustees to manage it.
He “ignored” obligations to assist the trustees, who claimed he was avoiding responsibilities by being in Scotland.
The trustees alleged he had taken valuable assets, such as artworks, to Scotland. In 2022, they went to court in Scotland to reclaim these assets.
Courtney launched his own court application in SA. He argued it was wrong for a court in 2020 to grant a “final” sequestration order without first making a “provisional” order. A provisional order allows a person time to show a court they are not bankrupt and can pay their debts. A final order immediately liquidates the estate.
In 2022, acting judge Brad Wanless found that the 2020 final sequestration order was “a mistake” because courts could not grant a final order before a provisional one.
However, Courtney was still not satisfied as he was still being sequestered. He appealed to the SCA.
The SCA ruled against Courtney last week. Writing for a unanimous court, SCA judge Caroline Nicholls said courts “can issue a sequestration order, whether provisional or final”. However, “having chosen not to oppose the application for his sequestration, Mr Courtney was not free to thereafter ignore the [final] order”.
Nicholls criticised Wanless for declaring the final sequestration order a mistake, rendering a “confusing and contradictory” judgment.
Nicholls noted that “even an incorrect [court order] exists … until [another] court sets it aside”. Courtney’s “only option” was to seek a rescission of the final sequestration order.
She ordered Courtney to pay legal costs.
“The PIC welcomes the SCA judgment, which confirms Courtney’s sequestration,” PIC spokesperson Adrian Lackay told Business Day. “The PIC is working with the liquidator to recover as much money as possible from [Allied Mobile] and from related parties. The PIC supports all attempts by the liquidator to recover assets.”
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
PIC welcomes SCA sequestration judgment of Eamonn Courtney
The Supreme Court of Appeal has ruled that the UK business-person is ‘hopelessly insolvent’
A business-person, who started a company from whom the Public Investment Company (PIC) wants almost R800m, lost his appeal against personal sequestration.
Eamonn Courtney became indebted to Absa for about R54m, but the Supreme Court of Appeal (SCA) ruled Courtney was “hopelessly insolvent”.
The court also explained processes for sequestrations and set precedent for what people can do to challenge them.
Courtney had set up communications company Allied Mobile Communications. In 2015, Allied Mobile entered into a deal with the PIC. According to an Allied Mobile’s press release, the company “signed a strategic finance and partnership agreement with the [PIC] for debt funding facility of [R800m]”.
However, in 2018, Allied Mobile fell into trouble with various partners, including the PIC, which sought to liquidate Allied Mobile to reclaim R767.5m. An order liquidating Allied Mobile was granted in 2020.
Courtney failed in his obligations to Absa because he had guaranteed payment for the companies that amounted to R54m. Absa began sequestration proceedings against Courtney.
Less than a week after, Courtney and his wife left for Scotland.
This led to a protracted legal battle. In 2020, the Johannesburg high court sequestered his estate, appointing trustees to manage it.
He “ignored” obligations to assist the trustees, who claimed he was avoiding responsibilities by being in Scotland.
The trustees alleged he had taken valuable assets, such as artworks, to Scotland. In 2022, they went to court in Scotland to reclaim these assets.
Courtney launched his own court application in SA. He argued it was wrong for a court in 2020 to grant a “final” sequestration order without first making a “provisional” order. A provisional order allows a person time to show a court they are not bankrupt and can pay their debts. A final order immediately liquidates the estate.
In 2022, acting judge Brad Wanless found that the 2020 final sequestration order was “a mistake” because courts could not grant a final order before a provisional one.
However, Courtney was still not satisfied as he was still being sequestered. He appealed to the SCA.
The SCA ruled against Courtney last week. Writing for a unanimous court, SCA judge Caroline Nicholls said courts “can issue a sequestration order, whether provisional or final”. However, “having chosen not to oppose the application for his sequestration, Mr Courtney was not free to thereafter ignore the [final] order”.
Nicholls criticised Wanless for declaring the final sequestration order a mistake, rendering a “confusing and contradictory” judgment.
Nicholls noted that “even an incorrect [court order] exists … until [another] court sets it aside”. Courtney’s “only option” was to seek a rescission of the final sequestration order.
She ordered Courtney to pay legal costs.
“The PIC welcomes the SCA judgment, which confirms Courtney’s sequestration,” PIC spokesperson Adrian Lackay told Business Day. “The PIC is working with the liquidator to recover as much money as possible from [Allied Mobile] and from related parties. The PIC supports all attempts by the liquidator to recover assets.”
moosat@businesslive.co.za
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