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[2016] ZAGPJHC 244
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Monyetla Preperties Holdings (Pty) Limited v Doubell (01883/2016) [2016] ZAGPJHC 244 (7 September 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO:
01883/2016
DATE:
7 SEPTEMBER 2016
In
the matter between:
MONYETLA
PROPERTY HOLDINGS (PTY)
LIMITED
..................................................
Applicant
And
DOUBELL,
PETER
JOHN
..................................................................................................
Respondent
JUDGMENT
Van der Linde,
J:
[1]
This is the extended return day of a
provisional sequestration order issued by this court. On the papers
the matter appeared opposed
but at the hearing the respondent, who
appeared in person, said that he opposed neither a sequestration
order nor the appointment
of a trustee. He said that he invited an
appointed trustee to conduct investigations into his affairs, because
he has nothing to
hide, and wanted in any event to have his name
cleared of all the allegations of untoward conduct that had been
levelled against
him. His name and reputation were important to him,
he said.
[2]
The
respondent is clearly a businessman of considerable experience and
intelligence. The many ventures in which he has been interested
show
this, and his submissions to the court illustrated that he is astute
and knowledgeable in matters commerce.
[3]
Despite these considerations I have
considered independently of the concession whether the rule nisi
should be confirmed; and I
have concluded that it should. This short
judgment sets out the main reasons for this conclusion.
[4]
The
respondent’s indebtedness to the applicant, that the respondent
had committed an act of insolvency, and that the respondent
was
factually insolvent, are all common cause on the papers. What is
disputed is whether it will be to the advantage of creditors
to
sequestrate him.
[5]
Mr
Shepstone who appeared for the applicant creditor relied particularly
on Stratford and Others v Investec bank Ltd and Others,
2015 (3) SA 1
(CC) at [43] to [46] for the proposition that this requirement is
proved if the applicant shows that there is a reasonable prospect
that some pecuniary benefit will result to creditors.
[6]
In
my view the following considerations show that such a prospect
exists. First, the respondent was generally more forthcoming about
the business activities of the failed corporations in which he had
been involved when making oral submissions to court, than he
had been
on his affidavit. In this regard it is generally accepted that a
respondent in this context must make a clean breast of
how exactly
how his present predicament had come about. He must take the court
into his confidence, and explain fully his present
financial
position.
[7]
That was not done in his two affidavits. It
is still unclear precisely how the respondent’s income and that
of his wife are
generated. That there was and perhaps still is a
business relationship between them is clear; the respondent explained
that he
had signed unlimited suretyships for the corporations, and
his wife limited suretyships. They had sold the fixed properties
referred
to in the affidavits to repay their indebtedness to the
banks. The properties were in fact bonded to the hilt to secure the
loans
advanced to them (he and his wife) by the banks.
[8]
His
wife’s indebtedness as surety has in all instances now, with
the exception of Nedbank, been paid; this was done from the
proceeds
of the sale of the properties. She still owes Nedbank in the region
of R800 000, and this is being repaid at R5000
per month.
[9]
It
seems to me that a trustee would want to investigate whether the
proceeds of the properties were used to pay the debts of the
principal debtor in each instance; or whether in some or all of the
cases the proceeds of the sales were used first to discharge
the
accessory debt of one surety, the respondent’s wife, and not
both of them, each to the extent of his or her aliquot share.
This is
one potential area of investigation that could lead to impeachable
transtions.
[10]
A
second area of investigation is the sale of the respondent’s
one half share in their residential property to his wife. At
least
three questions arise here: Was the sale at market value? What was
the origin of the funds used to pay for the one half share?
And to
what end were the proceeds of the sale applied?
[11]A third area of investigation
concerns the nature of the respondent’s interest, historically
and currently, in a number
of concerns: EP Dental Equip CC which was
liquidated on 14 September 2010; Redlex 277 (Pty) Ltd; The Jireh
Family Trust; Green
Flash Trading 167 (Pty) Ltd; and The Dental
Institute Rivonia (Pty) Ltd, which was liquidated on 18 April 2012.
It appears that
at least the first Close Corporation and Redlex 277
had fixed property.
[12]In oral submissions the
respondent explained the company of which he is currently a director,
Sci-Vision (Pty) Ltd, took over
the business from the ashes of the
Close Corporation. The affidavits did not disclose this; and one does
not know precisely which
assets wound their way into the new company;
nor, for that matter, who the beneficial owner is of the new company.
[13]The papers do not disclose
either what happened to the assets of The Dental Institute Rivonia
(Pty) Ltd; in oral submissions
the respondent says that they were not
subsumed into the new company, but those are his untested verbal
assurances. A trustee may
want to investigate this further.
[14]
A
fourth area of investigation is the true owner of the shares in the
new company, and in particular the relationship between the
company
and the respondent’s family trust. The respondent says the
family trust is the true owner; but the trust deed shows
that the
respondent is an income beneficiary and that the trust is a
discretionary trust. If the shares in the new company truly
belong to
the trust, how did the trust source the wherewithal to pay for those
shares?
[15]In all, this is not a case in
which the respondent’s affidavits have fully explained to the
court how the financial predicament
came about. The applicant was a
landlord of the respondent’s business, and the arrears are
substantial. The respondent’s
explanation in his first
affidavit for his inability to repay the landlord is disquietingly
blasé. In my view the applicant
has made out a sufficient case
for confirmation of the rule.
[16]In the result the following
order issues:
A
final sequestration order issues, and the estate of the respondent is
placed under the control of the
Master of
the High Court.
WHG
van der Linde
Judge, High
Court
Johannesburg
For the
applicant: Adv. Shepstone
Instructed
by: Kokinis Incorporated
Erex House
Cnr
Geneva & Eileen Roads
Blairgowrie
Johannesburg
Tel: 010 201
8600
Ref: Trent
Richmond/edm/c1131
For the first
respondent: In person
Tel: 0836544544
Email:
peterd@scivision.co.za
Date argued: 6 September, 2016
Date of judgment: 7 September,
2016