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[2020] ZAGPJHC 195
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Petra Nera Body Corporate v Sekgala (2017/8951) [2020] ZAGPJHC 195 (26 August 2020)
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 2017/8951
In
the matter between:
PETRA NERA BODY
CORPORATE
Applicant
and
SEKGALA,
RAMMUTLANA BOELIE
Respondent
JUDGMENT
SPILG,
J:
INTRODUCTION
1.
This is an
application for the provisional sequestration of the respondent’s
estate.
2.
The
respondent is unrepresented. His substantive defence to the case made
out by the applicant is that the debt on which it relies
is not due
and payable. He also contends that the applicant is precluded from
relying on any grounds to support the application
other than those
set out in the initial founding affidavit.
3.
Furthermore
the respondent raised numerous technical or procedural issues
in
limine
and
pursued Rule 30A procedures most which were dealt with during the
hearing and will not be repeated. However I had indicated
that in
respect of others I would give reasons, albeit that it should
have been clear to the respondent during the course
of the hearing
why the lacked merit.
MAIN
IN LIMINE POINTS
Rule
37A arguments
4.
The
respondent challenged the competence of the court to hear the matter
on the grounds that;
a.
it had
received the matter to case manage under rule 37A which, according to
the respondent, was limited to trial matters;
b.
there was
no basis to refer the matter for special treatment;
c.
since the
matter had been referred for case management the judge allocated to
deal with the matter could not, by reason of rule
37A (15), also
determine the matter without the consent of both parties.
5.
During the
hearing the court explained to the respondent why the points raised
were no good. I will do so again.
6.
For ease of
reference the provisions of Rule 37A which require consideration in
light of the respondent’s argument are subrules
(1), (2)(a) and
(b), (5)(a), (11), (13) and (15). They provide:
37A Judicial Case
Management
(1) A judicial case
management system shall apply, at any stage after a notice of
intention to defend is filed—
(a) to such categories
of defended actions as the Judge President of any Division may
determine in a Practice Note or Directive;
and
(b) to any other
proceedings in which judicial case management is determined by the
Judge President, of own accord, or upon the
request of a party, to be
appropriate.
(2) Case management
through judicial intervention—
(a) shall be used in
the interests of justice to alleviate congested trial rolls and to
address the problems which cause delays
in the finalisation of cases;
(b) the nature and
extent of which shall be complemented by the relevant directives or
practices of the Division in which the proceedings
are pending;
…
(5) (a) Notwithstanding
the allocation of a trial date, a case that is subject to judicial
case management shall not proceed
to trial unless the case has been
certified trial-ready by a case management judge after a case
management conference has been
held, as provided for in subrule (7).
…
(11) Without limiting
the scope of judicial engagement at a case management conference, the
case management judge shall—
(a) explore
settlement, on all or some of the issues, including, if appropriate,
enquiring whether the parties have considered voluntary
mediation;
…
(13) The record of the
case management conference, including the minutes submitted by the
parties to the case management judge,
any directions issued by the
judge and the judge’s record of the issues to be tried in the
action, but excluding any settlement
discussions and offers, shall be
included in the court file to be placed before the trial judge.
…
(15) Unless the
parties agree thereto in writing, the case management judge and the
trial judge shall not be the same person.
”
In addition the
respondent referred to the numerous provisions of Rule 37A which are
exclusively directed to trial proceedings.
7.
A
comparison between the wording of subrules (1) (a) and (1) (b)
immediately reveals that the latter covers all other court
proceedings
which are not “
defended
actions”.
All motion proceedings, of which sequestration applications is one,
therefore are covered under sub-rule (1) (b). This disposes
of the
first objection
8.
The
decision of the Judge President or the Acting Judge President (as is
the case in this Division) to allocate a matter to a particular
judge, outside the usual manner in which it is enrolled through the
Registrar’s office, and in the circumstances identified
under
sub-rule 2(a) or (b) is not an administrative decision subject to
challenge by any party. It is a power exercised in relation
to the
internal management of courts which vests in that judge. This
disposes of the second point.
9.
The third
point raised in relation to Rule 37A is that the respondent did not
consent to the matter being disposed of by me.
It is evident from Rule
37A (11) (a) that a judge allocated to case manage a matter will
during the case management conference explore
the possibility of
settlement and in doing so may become privy to matters which could
influence the outcome of the case. It is
for this reason that
sub-rule (13) excludes these discussions from forming part of the
record of the conference which is placed
before the trial judge.
10.
I informed
the respondent during the hearing that on receiving the allocation
from Acting Deputy Judge President Sutherland (“
ADJP”)
to case
manage this matter, and after considering the papers, I had formed
the view that case management was unnecessary. A copy
of the
directive I then issued was forwarded to the ADJP. I received the
go-ahead to deal with the case to finality without the
necessity of a
case management conference.
11.
It is
evident that Rule 37A (15) presupposes that a case management
conference is held in its terms enables the parties to engage
in
frank settlement discussions before the case management judge. If
there is no case management conference, as here, then rule
37A(15)
serves no purpose, irrespective of whether the matter had initially
been allocated for case management and irrespective
of whether the
initial directive was issued pursuant to such an allocation. It
remained within the ADJP’s power relating
to internal
management of cases to decide whether the judge who had been
allocated the matter should proceed with the matter on
any other
basis.
12.
Accordingly
this point too must fail.
The
Directive to proceed with the merits of the case
13.
Much of the
other points taken by the respondent are directed at the consequences
of my directions.
14.
Two matters
need to be mentioned by way of a brief introduction.
Firstly the respondent
had been debarred from arguing one of the interlocutory matters,
because he had failed to file his heads
of argument. He then sought
to set aside this order. These events had the consequence of
diverting the case into side issues. In
the meanwhile the status of
the respondent and the interests of creditors were already impacted,
bearing in mind the timing of
a
concursus
creditorum,
The interests of justice therefor required finality one way or the
other, particularly as the respondent may have been successful
in
opposing the magistrates’ court proceedings and would be
prejudiced if he had any sequestration proceedings still hanging
over
his head.
Secondly the respondent
had never dealt with the merits of the application in his opposing
affidavit and was now precluded from
doing so by reason of the order
referred to earlier. I believed that he should be given an
opportunity to do so, particularly as
he had alleged that the claim
on which the application had been founded of arrear levies had been
the subject of a rescission application
after the applicant had
successfully applied for default judgment in the magistrates’
court. If the applicant’s claim
had subsequently failed, then
caedit
questio
.
15.
The
directive issued read as follows:
“
Judge Spilg has
been allocated to deal with this matter by Acting Deputy Judge
President Sutherland.
Due to the Lockdown
regulations and the Judge President’s Consolidated Directive of
11 May 2020 this matter will be dealt
with by way of e-mail
communications and if necessary by way of either tele- or video-
conference.
To this end the Judge
has directed the following:
1.
Each
party is required to make submissions by way of email addressed in
the same transmission to both Judge Spilg and the other
party so that
the Judge can be satisfied from the addressees appearing on the email
to him that the other party has also received
it simultaneously. The
term “deliver” and “delivered” in this
directive shall mean the simultaneous transmission
to the Judge and
the other party of the email in question by no later than 17:00
on the day in question;
a.
at
the email addresses of the parties as set out herein, being the
addresses which are set out in the papers; and
b.
At
the email address of Judge Spilg’s registrar, Ms Nomaswazi
Mvula, being
nmula@judiciary.org.za
.
2.
The
applicant in the sequestration application, The Body Corporate of
Petra Nera (“Petra Nera”) is to upload onto CaseLine
the
Answering Affidavit of the respondent, Mr Sekgala, in the
sequestration application.
3.
Having
regard to the fact that the main application is one affecting status
and that the last affidavit filed by Petra Nera in the
main
application was in October 2018 , both Petra Nera and Mr Sekgala are
to give reasons by email to be delivered by no later
than Monday 18
May 2020 why the following order should not be made:
a.
That
Petra Nera is to file a supplementary affidavit in the sequestration
application to be delivered by way of email by no later
than Friday
22 May 2020 setting out;
i.
whether
there has been any payments made ,or the incurring of further debt
with the basis thereof being set out, by Mr Sekgala to
Petra Nera
since October 2020;
ii.
the
current amount owing, if any, by Mr Sekgala to Petra Nera and
attaching a current statement of account;
iii.
the
status of any magistrates’ court proceedings in relation to the
alleged debt claimed by Petra Nera to be owed to it by
Mr Sekgala
iv.
whether
Mr Sekgala is still the registered owner of the property within the
Petra Nera complex and if not when it was transferred
out of his name
v.
details
of any further facts of which it is aware that are relevant to
determining whether or not the order sought should
be granted;
b.
That
after delivery of Petra Nera’s affidavit, Mr Sekgala file a
supplementary affidavit in the sequestration application
to be
delivered by way of email by no later than Monday 8 June 2020 dealing
with;
i.
His
response to any matter raised by Petra Nera in its affidavit referred
to in the preceding sub-paragraph (a);
ii.
Any
other matter set out in sub-paragraph (a) not raised by Petra Nera
and which is relevant to determining whether or not the order
sought
by it should be refused
c.
That
Petra Nera, if it intends to deliver a relying affidavit in response
to any supplementary affidavit of Mr Sekgala, shall
do so by
email by no later than Friday 12 June 2020
d.
That
the presentation of argument shall be by way of submissions contained
in an email to be delivered by no later than Thursday
18 June 2020
and that if either party wishes to be heard orally then such hearing
will be by way of video-conferencing, or if not
available, by
tele-conferencing on Monday 22 June at 10:00
e.
That
Petra Nera shall be responsible for;
i.
uploading
all court papers and Judge’s directives, including this
one, onto CaseLine;
ii.
Inviting
Mr Sekgala onto CaseLine;
iii.
Providing
an index and pagination which shall also be delivered by email by no
later than Friday 19 June 2020
f.
In
the event that Mr Sekgala does not accept the invitation or otherwise
does not access CaseLine then delivery of the emails referred
to in
this directive will suffice for the purposes of the hearing.
g.
The
costs of all the interlocutory applications shall also be decided at
the hearing and to that end such arguments as the parties
wish to
make in that regard must be included in the emails referred to in
sub-paragraph (d)
16.
I believe
that some of the terms of the directive were later modified after I
had rejected certain technical points raised by the
respondent.
17.
Of
relevance is that the applicant had previously filed a supplementary
affidavit which explained how it came to rely in its founding
affidavit to the sequestration application on the default judgments
it had obtained against the respondent and the
nulla
bona
return for grounding an act of insolvency under s 8(b) of the
Insolvency Act 24 of 1936 (“
the
Act”)
.
Although still claiming that the debts were owed and that the
respondent was unable to pay then, it explained that the default
judgment and act of insolvency could no longer be relied on as the
respondent had been able to obtain a rescission of those judgments.
18.
The
applicant sought to introduce new matter in the nature of subsequent
events relative to the two magistrates’ court cases,
expanded
on the extent of the applicant’s failure to pay levies which
had allegedly increased considerably, still without
any payment, and
relied on factual and commercial insolvency under s 9 of the Act.
19.
The
applicant contended that it was unaware of an application to strike
out certain allegations in its papers which had been granted
and set
out why. I am satisfied that the applicant was unaware of the
application and it is evident that at best the order was
an
interlocutory one granted because the applicant was unaware of it.
20.
At this
stage I am satisfied, as I indicated to the respondent during the
hearing, that as long as the rights of action remains
the same (as
opposed to the cause of action) there can be no reason why the
contents of the applicant’s first supplementary
affidavit, as
now also contained in the second supplementary affidavit, cannot be
received. Moreover there can be no prejudice
to him since at the time
he never filed an opposing affidavit on the merits and would be out
of time to do so now, yet in terms
of my directive he had been given
a further opportunity to do so without requiring further condonation.
21.
In
consequence of my directive the applicant dealt with the eventual
fate of the original two magistrates’ court actions.
It
appeared that despite obtaining the rescission of judgments the
respondent failed to plead and was barred. For reasons that
are
difficult to appreciate the magistrates’ court has still not
granted default judgment despite the applications lying
with it for a
considerable time.
22.
The
applicant also referred to two subsequent actions where default
judgment had been granted against the respondent for subsequent
arrear levies, and where it was evident that he had failed to point
out any assets which, on his version, could be subject to attachment,
thereby again triggering an s 8(b) act of insolvency.
23.
The
applicant then attached a full statement of arrears which covered all
the amounts claimed in the magistrates’ court cases.
There are
no duplications as respondent initially suggested. It demonstrates
not only that the respondent failed to pay any amounts
whatsoever for
a considerable number of years but that the amounts also included
municipal water and electricity charges which
he has never disputed.
24.
By contrast
the respondent in his affidavit persisted that the applicant was
making out a new case in reply and that none of the
levies were due
since it required a resolution of the body corporate before the
applicant could proceed to claim.
THE
DEFENCES TO THE PROVISIONAL SEQUESTRATION APPLICATION
25.
The first
main defence was that the applicant was pursuing a different case to
that made out in its founding appears.
I had explained to the
applicant that there is a difference between a cause of action and a
right of action. In the founding papers
the applicant was relying on
the respondent’s failure to pay levies and the municipal
charges that had accumulated for a
substantial period and at that
stage had amounted to some R198 000 excluding any interest, and
that this amount had continued
to increase without any payment in
sight. It was evident that the respondent simply never paid his
levies and the municipal charges
for water and electricity he had
consumed. His non-payment for whatever reason obviously affected
every other unit holder as clearly
set out in the papers.
26.
In regard
to the allegation of insolvency the applicant had initially relied on
s 8(b)
of the
Insolvency Act 24 of 1936
which reads:
“
if a court has
given judgment against him and he fails, upon the demand of the
officer whose duty it is to execute that judgment,
to satisfy it or
to indicate to that officer disposable property sufficient to satisfy
it, or if it appears from the return made
by that officer that he has
not found sufficient disposable property to satisfy the judgment;”
27.
While the
applicant initially relied on
s 8(b)
the right of action remained
a claim for arrear levies in excess of the minimum required under s
9(3)(a)(iii) of the Act
and that the respondent was insolvent as
provided for by s 9(3)(a)(v) either because he has committed an “
act
of insolvency
”
under s 8 or was “
in
fact insolvent
”
, a state of affairs which was already foreshadowed by the facts
contained in the founding affidavit.
28.
The fact
that the respondent did not deliver a plea in the magistrates’
court case, did not file an answering affidavit to
deny owing the
levies or contend that he was able to pay it, while persisting in his
failure to pay levies despite the obvious
prejudice to all other
individual unit holders was simply further evidence to support the
initial allegations of insolvency under
s 9(3) (a) (v) of the Act.
29.
I have just
mentioned that the respondent was given ample opportunity to set out
a defence to the claim for payment of the substantial
accumulation of
levies and municipal charges but did not do so when the provisional
sequestration application was launched, nor
when given an opportunity
by the court to do so previously, which was at his express request,
and despite managing to obtain a
rescission of judgment in the
magistrates’ court. These matters were covered in the
applicant’s subsequent affidavit
before me and accordingly it
was unnecessary for it to rely on the initial supplementary
affidavit.
30.
In the most
recent supplementary affidavit, being the one in terms of my
directive, the applicant provided an update which alleged
that the
respondent had been barred from pleading in the initial two
magistrates’ court proceedings. The applicant referred
to two
further applications for default judgment in the magistrates’’
court for subsequent arrear levies totalling
a further R370 000
which had not been paid and writs that had been issued. In all some
R600 000 were now in arrear while
the respondent had been sued
in other matters with judgments against him, while incurring debt to
the applicant month by month
without any expectation of repayment.
31.
This brings
me to the belated defence to the merits; namely that the levies are
not due because no resolution has been passed by
the body corporate
entitling it to raise them.
32.
Leaving
aside the fact that the levies go back many years, the applicant
stated enough in its papers regarding the passing of the
budgets at
the annual general meetings of the body corporate, supported by
relevant minutes which were attached, to demonstrate
that there is no
merit whatsoever in the defence raised. Moreover there were local
authority charges for water and electricity
consumed by the
respondent which were not disputed and which alone far exceeded the
required sum for purposes of bringing a sequestration
application.
ORDER
33.
It is
essentially for these reasons that the provisional sequestration
order was granted returnable on 25 August 2020 with service
and
notice in the usual form, save that in addition the court directed
service by email mail on all known creditors including all
bondholders of property owned in the name of the respondent (to which
reference had been made in the papers). I considered this
to be
necessary as they may have an interest in either assisting the
respondent or in the appointment of a provisional trustee.
(Signed)
SPILG, J
____________________________________
DATES OF HEARING: 22
June, 3 July and 25 and 26 August 2020
DATES
OF DIRECTIVES
AND ORDERS 11 May, 22
June, 25 August 2020
DATES
OF JUDGMENT 25 August 2020
DATE
OF REVISION: 26 August 2020
FOR
APPLICANT: Adv AJJ du Plooy
Richards
Attorneys
FOR
RESPONDENT: In person