Notorial Bonds|| Tacid RS by operation of law (Background: refers to…
Notorial Bonds|| Tacid RS by operation of law
: refers to corporeal movable prop of debtor as security for payment of PD & grants creditor LRR to object of security without it having to be delivered. be attested to notary & registered in Deeds Regis.
Gen Notarial Bond
: all movable prop. notary execute agreement betw C&D = register. formal doc witness req. governed by comlaw. no RR confer slight preference on insolvency. proceeds of sale form part of free residue insolvent estate used to settle bond holders claim first & thereafter proceeds used to settle creditors claim.
In order to acquire RR of Security claim be perfected, req pledge fulfilled & creditor take possession of movprop= req perfection clause in bond
Cooper v The Master
losing plot if you give thing before having RS. not the point of notarial bonds
Current Position: Security by means of Movable Prop Act 57 of 1993
Same position whole or RSA. RS if object clearly identified (recognised) & will be object of notorial bond- does not matter if delivered or not. Fiction: "as if- as if object transferred" . Special Notarial Bonds now? can keep object with debtor possession & continue to use while credit has LRR. Still regulated by comlaw.
Special Notarial Bond
select few objects registed bond over, identified in agreement & governed by statute.
Pre 1996 (KZN):
Notarial Bonds Natal Act 18- specific corp/incorp movable assets belonging to notarial bond debtor- create RR in form of fictitious (non-poss) pledge
Pre 1993 (res of RSA)
: governed by comlaw, special incorp/corp movable assets belonging to notarial bond debtor- not create RR or preference on insolvency.
RSR granted without agreement (op of law) only if certain conditions met, protect interest considered important in legal order
1.Hypothec: credit granter & seller
creditor granted retains ownership of movprop sold interms of credit agreement transaction until creditor receives last payment of purchase price
debtor insolvent before last paym?
s84 Insolvency Act
= ownership of insolvent estate transferred to trustee/curator for benefit of all creditors. creditor loses ownership & debtor still owes.
Hypothec to benefit of credit for outstanding amount (autom). RS secures the creditgranters claim against insolvent estate for outstanding payment in terms if credit agreement. Sale in execution: thing sold due to hypothec able claim outstanding amount & residue goes into insolvent estate.
2.Hypothec of lessor
: tacid hypothec of landlord over movprop (on premises) of lessee who is in arrear with rent payment. secures paym of rent in arrears. prop subject to RSR & created by law as soon as lessee in arrears. movables be seized by creditor. outstanding payment made? hypothec extinguished by law
must be brought onto leased premises which is in use by lessee. must be present on prop @ time hypothec enforced.
3rd party prop not subject to hypothec. Need attachment via court order, cant just take & sell + need attachment before sale in execution can take place.
3.Conflict between hypothec of creditor & lessor
s2(1(b) Security by Means of Movable Prop Act 57 of 1993:
Situations when landlord hypothec excluded: "notorial bond in possession of someone other than mortgagee or sale transaction in terms of National Credit Act"
Janse van Rensburg V Mahu Exhaust