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[2012] ZAECPEHC 84
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Ex parte: Van Eeden (2015/2012) [2012] ZAECPEHC 84 (29 November 2012)
5
IN THE HIGH COURT OF
SOUTH AFRICA
EASTERN CAPE, PORT
ELIZABETH
Case no: 2015/2012
Date heard: 13.9.2012
Date delivered:
29.11.2012
In the
ex parte
application of:
JOHLI ELIZABETH CAVE
VAN EEDEN
.........................................................
Applicant
Identity number:
and
For the surrender of
her estate:
ABSA BANK
.........................................................................
First
Intervening Creditor
ETIENNE DU TOIT
...........................................................
Second
Intervening Creditor
JUDGMENT
TSHIKI J:
[1] In this matter
applicant filed an application for the voluntary surrender of her
estate on the grounds that due to circumstances
beyond her control
and without any fraud on her part she became insolvent and that she
is still currently insolvent.
[2] The application has
been opposed by two of her creditors Absa bank, as well as Mr Etienne
du Toit both of whom have been granted
leave to intervene.
[3] On the date of
hearing of the application Mr Mullins appeared for the applicant, Mr
Dyke represented Absa, the first intervening
creditor, and Mr du Toit
appeared in person. Initially Mr Gajjar was to appear for the Nedbank
another intervening creditor, however,
before the matter was argued,
he withdrew the intervention by his client.
[4] It is common cause
between all the parties that applicant is unable to pay her debts.
The only relevant issue before me is whether
it would be in the
interests of the applicant’s creditors to grant the applicant’s
request.
[5] Voluntary surrender
was designed to benefit the debtor’s creditors and not to
release the debtor from his or her liabilities
(
Epstein vs
Epstein
1987 (4) SA 606
(C)). It follows, therefore, that the
debtor has to disclose to the Court all the information which is
relevant to enable the Court
to find that the voluntary surrender
will be to the benefit of the creditors. It is imperative that this
information must be disclosed
in the debtor’s founding
affidavit and not in the replying affidavit in response to the
answering affidavit of the intervening
creditors.
[6] The Court can accept
the surrender of the debtor’s estate only if the debtor has
succeeded in showing the following requirements
to the satisfaction
of the Court. Namely:
[6.1] That the prescribed
formalities have been duly observed;
[6.2] That the
applicant’s estate is in fact insolvent.
[6.3] That the applicant
owns realisable property of a sufficient value to defray all costs of
sequestration which will be payable
out of the residue of the estate
(
Mars – The Law of Insolvency in South Africa 9
th
ed
p 72).
[7] The intervening
creditors have attacked the manner in which the applicant has
attempted to comply with the provisions of section
6(1) of the
Insolvency Act 24 of 1936 (the Act). Applicant in her founding
affidavit fails significantly in disclosing the specific
amounts in
figures as to how much of the properties she was involved with Mr du
Toit is due to her either in value or otherwise
and very little
information about the value of the property she keeps or owns jointly
with Mr du Toit is due to her. This information
is important for the
purpose of complying with the provisions of section 6(1) of the Act
in order to comply with the requirements
mentioned in para 6 above.
[8] Mr du Toit has
disclosed, particularly in paragraph 3 of his affidavit, that some of
the properties which applicant claims to
be her property is jointly
owned by them. These properties have not been specifically mentioned
by applicant in her founding affidavit
as she was obliged to do so.
[9] Applicant has also
not disclosed in her founding papers that a judgment was granted
against her in the sum of R561 498.94
and this information is
important to be disclosed in the founding affidavit because it goes
into the roots of the application for
insolvency.
[10] The value of the
properties she allegedly jointly owns with Mr du Toit is being
challenged by the latter. This creates a state
of uncertainty and
inaccuracy as to the value of the property that belongs to her. It is
also important to mention that in 2011
under case no 3062/2011 one
Mathew Adams launched an application for the sequestration of the
applicant herein in respect of which
a provisional order of
sequestration was granted. In my view, applicant should have
disclosed this information in her founding
papers, irrespective of
the reason for the withdrawal of the application. It is also relevant
to,
inter alia
, her status at the time when she was
provisionally sequestrated in respect of such proceedings.
[11] I agree with Mr Dyke
for the first intervening creditor, that the following information
should have been disclosed by the applicant
in her founding papers:
[11.1] Significant debts
and her financial affairs as well as her source of income inclusive
of her monthly income.
[11.2] The judgment debt
of R561 498.94 granted against her in her capacity as surety.
[11.3] The value and
extent of her claims in respect of the second intervening creditor
(Mr du Toit) in respect of the bonds repayments.
[11.4] She has not
disclosed, in specifics as to
quantum
, her indebtedness to Mr
du Toit. This should include her involvement in C Shell (Pty) Ltd of
which she has admittedly a shareholder
and director.
[12] It follows,
therefore, that failure to disclose these significant facts which
include properties and the estate of the applicant
have a bearing on
the applicant’s
bona fides
which affect her genuineness
in her application for voluntary surrender of her estate. In
application proceedings the applicant
stands and falls by his or her
founding affidavit. An applicant cannot make his or her case in the
replying affidavit. In this
case her duty to disclose all the
relevant facts relates to the founding papers. Had there been no
intervening creditors, this
Court would on the face of it, have been
obliged to grant the final order of voluntary surrender of the
applicant’s estate
herein and on the basis of the information
in her founding affidavit. This would have been so because the Court
would not have
had the slightest idea about the valuable and
important information which was only disclosed after further
affidavits by intervening
creditors were filed in Court. The
applicant’s conduct herein cannot be condoned by accepting her
replying affidavit as supporting
her case. The fact that the
applications for voluntary surrender are brought
ex parte
is
reason enough for the applicant to disclose all material facts which
might affect a Court in coming to a [just] decision. (
Ex parte
Bouwer and Similar Applications
2009 (6) SA 382
GNP; see also
Schlesinger v Schlesinger
1979 (4) SA 342
(W) at 349
(A)).
[13] As for the failure
to disclose her salary amount goes to the root of the application for
the financial enquiry which should
be determined by the Court in
insolvency applications. The disclosure of the current income of the
applicant is significant in
this regard. In
Ex Parte Bouwer and
Similar Applications
supra
, Makgoka AJ at 385 para 5
remarked as follows:
“
The attitude
of the applicants seems to be that, once the formal requirements have
been complied with, the Court should grant the
application if the
applicant’s liabilities appear to exceed their assets. I do not
agree with this approach. The Court is
not a rubber stamp. The Court
still has a discretion which must be exercised judiciously. In order
to enable the Court to do so,
the applicant must be candid. See
Ex
Parte Hayes
1970
(4) SA 94
(NC) at 96 A-C.”
[14] For the above
reasons I am not convinced that the applicant herein has complied
with the substantive requirements contained
in
section 6(1)
of the
Insolvency Act. Nor has
she complied with
Rule 6
governing
application proceedings. Applicant has not met those requirements in
a full and frank manner and, therefore, has not
made out a proper
case for the surrender of her estate in her founding affidavit. Those
facts which she ought to have disclosed
in the founding affidavit are
fundamental to the application for surrender of her estate and her
failure to disclose them, even
if she has mentioned some in her
replying affidavit, cannot be condoned.
[15] Therefore, the
application is hereby dismissed with costs.
_________________________
P.W. TSHIKI
JUDGE OF THE HIGH COURT
For the applicant : Adv
Mullins
Instructed by : Theo
Kitshoff Attorneys
PORT ELIZABETH
For the first intervening
creditor : Adv Dyke
Instructed by : Mollenaar
& Griffiths Attorneys
PORT ELIZABETH
For the second
intervening creditor : Mr du Toit
In person