Monty is the owner of a laundromat. Due to loadshedding and the “cost of living” crisis his business is experiencing financial problems. His friend, Kabelo, buys the washing machines in the laundromat from Monty. Kabelo and Monty agree that Monty can still use the washing machines to operate the laundromat and that Kabelo will transfer ownership of the machines to Monty once he (Monty) has paid the full purchase price. After six months, before Monty paid the purchase price to Kabelo, Monty is declared insolvent. Mr Jones, the executor of Monty's insolvent estate wants to sell the washing machines and use the proceeds to pay Monty's creditors. However, Kabelo informs Mr Jones that he has bought the washing machines from Monty and that they now belong to him. Fully discuss the legal relationship between Monty and Kabelo as well as the ownership of the washing machines and Mr Jones’s claim to them
The legal relationship between Monty and Kabelo is that of a seller and buyer. Monty is the original owner of the washing machines and Kabelo has purchased them from Monty. This agreement is evidenced by their agreement that Kabelo will transfer ownership of the machines to Monty once the full purchase price is paid.
However, since Monty has not yet paid the full purchase price to Kabelo, the ownership of the washing machines has not been transferred to Monty. Kabelo remains the legal owner of the machines until the purchase price is fully paid.
In the event of Monty's insolvency, the washing machines become part of Monty's insolvent estate, which is under the control of Mr. Jones as the executor. As the executor, Mr. Jones has the authority to sell the washing machines and use the proceeds to pay Monty's creditors, as per the insolvency laws.
Kabelo's claim that he has bought the washing machines from Monty and that they now belong to him is not valid until the full purchase price has been paid. As the machines are still owned by Kabelo, Mr. Jones can proceed with selling them to pay Monty's creditors.
However, it is important to note that Kabelo may have a claim against Monty for breach of contract or non-payment if Monty's insolvency has prevented him from fulfilling his payment obligations. This would be a separate legal matter and would not affect Mr. Jones's right to sell the machines as part of the insolvent estate.
Overall, Kabelo's claim to ownership of the washing machines is not valid until the full purchase price is paid, and Mr. Jones can proceed with selling the machines to pay Monty's creditors.