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[2022] ZAFSHC 188
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Vincemus Investments (Pty) Ltd T/A Kempson Finance v Nel (2280/2020) [2022] ZAFSHC 188 (4 August 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
CASE
NO. 2280/2020
In
the matter between
VINCEMUS
INVESTMENTS(PTY) LTD T/A
APPLICANT
KEMPSON
FINANCE
(REG:
1969/004762/07)
versus
WILLEM
ANDRIES MARITZ
NEL RESPONDENT
[Identity
Number: [....]]
JUDGMENT
CORAM:
NAIDOO J
HEARD
ON:
10 MARCH 2022
DELIVERED
ON:
4 AUGUST 2022
[1]
The applicant in this matter sought an order for the sequestration of
the respondent's estate,
with ancillary relief in respect of costs.
In the alternative, the applicant sought orders for the payment of
various sums of money,
with attendant ancillary orders in respect of
interest and costs. Although the Notice of Motion sought a final
order of sequestration,
counsel for the applicant indicated, during
oral address in court, that the applicant seeks a provisional order
of sequestration,
with the claim for the money judgment to be
postponed to the return day of the provisional order of
sequestration. The application
was vigorously opposed by the
respondent. Adv L Meintjes represented the applicant and Adv PJJ
Zietsman SC represented the respondent.
[2]
The terms of the relief sought by the applicant are as follows:
1.
"That the estate of the Respondent be sequestrated and placed in
the hands of
the Master of this Honourable Court:
2.
That the costs of this application be costs in the sequestration of
the Respondent's
insolvent estate;
3.
That further and/or alternative relief be granted to the Applicant;
4.
in the alternative to 1, 2 and 3
supra:-
4.1
That judgment be granted in favour of the Applicant against
the
respondent for:-
4.1.1
Payment of the sum of R3 123 836,15;
4.1.2
Payment of interest on the amount of R3 123 836,15 at the prime
lending rate minus 0,25%
per annum calculated from 22 February 2019
to date of payment, both days inclusive; Payment of the sum of R2 132
850,77;
4.1.3
Payment of interest on the amount of R2 132 850,77 at the prime
lending rate minus 0,25%
per annum calculated from 22 February 2019
to date of payment, both days inclusive;
4.1.4
Payment of the sum of R6 830 566,58;
4.1.5
Payment of interest on the amount of R6 830 566.58 at the prime
lending rate minus 0,25%
per annum calculated from 22 February 2019
to date of payment, both days inclusive;
4.1.6
Payment of the sum of R6 830 566,58;
4.1.7
Payment of interest on the amount of R6 830 566.58 at the prime
lending rate minus 0,25%
per annum calculated from 22 February 2019
to date of payment, both days inclusive;
4.1.8
Payment of the sum of R5 319 184,76;
4.1.9
Payment of interest on the amount of RS 319 184,76 at the prime
lending rate minus 0,25%
per annum calculated from 22 February 2019
to date of payment, both days inclusive;
4.1.10
Payment of the sum of R6 655 572,01;
4.1.11
Payment of interest on the amount of R6 655 572,01 at the prime
lending rate minus 0,25% per annum calculated
from 22 February 2019
to date of payment, both days inclusive;
4.1.12
Payment of the sum of R6 722 999,44;
4.1.13
Payment of interest on the amount of R6 722 999,44 at the prime
lending rate minus 0,25% per annum calculated
from 22 February 2019
to date of payment, both days inclusive;
4.1.14
Payment of the sum of R6 655 570,48;
4.1.15
Payment of interest on the amount of R6 655 570,48 at the prime
lending rate minus 0,25% per annum calculated
from 22 February 2019
to date of payment, both days inclusive".
[3]
The indebtedness in this matter arises from certain credit agreements
entered into between
the applicant and the Prinsloo Familie Trust
(the Trust). During the period August 2016 to November 2016, the
applicant and the
Trust concluded eight Instalment Sale Agreements
(ISA), in terms of which the applicant sold and delivered to the
Trust various
farming vehicles, machinery and equipment. The
applicant was represented by a duly authorized official and the Trust
was represented
by Louis Hendrik Prinsloo, one of the initial
trustees of the Trust, in respect of four of the agreements. He
subsequently passed
away in February 2018. I will refer to him as the
deceased. The Trust was thereafter represented by his son and
co-trustee, Leon
Prinsloo, in concluding the remaining four ISA.
[4]
The Trust was part of the Prinsloo Group, which consisted of several
companies, one such
entity being 3 Skaar Boerdery (Pty) Ltd (3
Skaar). The applicant obtained a written deed of suretyship from 3
Skaar, in favour
of the applicant, for the debts and obligations
owing by the Trust to the applicant. The suretyship was signed on
behalf of 3 Skaar
by Leon Prinsloo, in his capacity as director of 3
Skaar. The applicant also obtained personal deeds of suretyship from
the deceased,
his wife, Nelly Prinsloo, Leon Prinsloo and the
respondent for the debts and obligations of the Trust, owing to the
applicant.
[5]
I pause to mention that the respondent is the son-in-law of the
deceased, Louis Hendrik
Prinsloo, and ran the operations of the
Trust, at the time, in his capacity and Chief Executive
Manager/General Manager of the
Trust. He is also a trustee of the
Maritz Nel Family Trust which is a shareholder of 3 Skaar. The
respondent was also one of the
directors of 3 Skaar. The respondent
appears to have been the chief protagonist in driving the litigation
on behalf of the Trust,
having been the person who gave instructions
to the Trust's legal representatives, ostensibly in accordance with a
resolution taken
by the Trust in September 2013, authorizing him to
act on behalf of the Trust, to take decisions and sign all documents
that may
be necessary.
[6]
The relationship between the applicant and the Trust appears to have
become very acrimonious
and litigation in this matter has been bitter
and protracted, with various applications and interlocutory
applications being brought
by both parties in the course of this
matter. The parties, for instance, went beyond the usual three
affidavits that are filed
in an Opposed Motion matter. The respondent
filed a Rejoinder Affidavit and the applicant filed a Surrejoinder
Affidavit to deal
with additional allegations and evidence raised in
the Answering, Replying and Rejoinder Affidavits. The applicant filed
a comprehensive
chronology, giving a detailed background of this
matter and the history of the relationship and transactions between
the parties
in the various affidavits that it filed. I will mention
such aspects thereof only where necessary. The Trust as well as 3
Skaar
were at different times finally liquidated, prompting the
applicant to pursue the respondent, in terms of the suretyship that
he
signed, for payment of the Trust's debts owing to the applicant.
The latter demanded, from the respondent, payment of the monies
due
to it but received no response. The current application for the
sequestration of the respondent, was launched on 3 July 2020.
[7]
The respondent raised, in his Answering Affidavit, the primary
defence that he signed the
Deed of Suretyship in the mistaken belief
that he was signing as surety for 3 Skaar, of which he was a
director. The reason for
this, he asserts, was that the initial
negotiations in respect of the ISA were between 3 Skaar and the
applicant, but that the
deceased then decided that the ISA should be
in the name of the Trust. As a result of this he was released from
the suretyship
by the applicant, represented at the time by its
Divisional Manager, David Leslie Stephen (Mr Stephen), who signed the
release
letter (and who subsequently passed away in March 2020). In
denying this, the applicant asserts that there was no dispute by the
respondent, until the filing of the Answering Affidavit, that he had
signed the suretyship agreement in the full knowledge that
he was
doing so for the debts of the Trust. The applicant in Reply set out
in detail, support for this contention, which I will
deal with later.
[8]
In support of his version that the negotiations in respect of the ISA
were initially between
3 Skaar and the applicant, the respondent also
alleged that a facility letter was initially sent to 3 Skaar
confirming the purchase
of certain farming equipment, but that
subsequently, on the same day, another facility letter was sent to
the Trust, confirming
the ISA in the name of the Trust. The applicant
vigorously denied that a facility letter was ever issued to 3 Skaar,
and set out
a detailed exposition of the steps taken by its employees
to ascertain and establish that such a letter was not sent by any of
its employees to the respondent.
[9]
As a result of the version tendered by the respondent that he was
released from the suretyship
because he signed it erroneously, the
applicant engaged a professional forensic document examiner (Mr
Snyman) to examine the signature
on the release letter allegedly
signed by the late Mr Stephen, and ascertain if he was indeed the
signatory of that letter. Mr
Snyman examined the known and undisputed
signature of Mr Stephen on twelve documents, eleven of which were
unrelated to the present
matter and which were signed in the course
of Mr Stephen's employment with the applicant. The facility letter
addressed to the
Trust on which Mr Stephen's undisputed signature
appears was the twelfth document that Mr Snyman examined. I mention
that all of
these documents, including the facility letter were copy
documents as the originals were not available.
[10]
Mr Stephen undertook a comprehensive examination of the signature on
each of the known documents and compared that
with the disputed
document (release letter). He compiled a comprehensive report,
explaining the method he used in the examination,
his observations in
respect of the known signature and the one on the disputed document,
and his resultant conclusion. His opinion
was that the signature on
the release letter was copied and transferred from the facility
letter of 23 June 2016, addressed to
the Trust and signed by Mr
Stephen.
[11]
The respondent also engaged an expert (Mr Bester) to examine the
signatures I mentioned above. He had recourse
to the same documents
as Mr Snyman. In essence he agreed with the method employed by Mr
Snyman, and he found that the signature
on the disputed document was
identical to the one on the facility letter dated 23 June 2016, but
he could not say which of the
two is a forgery. I pause to mention
that it is common cause that the signature on the facility letter to
the Trust, dated 23 June
2016 is that of Mr Stephen. Mr Bester
further criticized Mr Snyman for not considering the limitation
caused by the absence of
an original wet ink signed document, and for
opining conclusively that the signature on disputed document is a
copy and transfer
forgery.
[12]
The facility letter allegedly addressed to 3 Skaar was also
subsequently subjected to forensic examination.
The relevant
information on this document was similarly found to be a copy and
transfer from the facility letter addressed to the
Trust. In
addition, there was an investigation into the covering email to which
the facility letter to 3 Skaar was attached. According
to the
applicant, there is no record of the email having been sent from the
applicant to the
respondent.
However, for the purposes of the present application, I am of the
view that it is not necessary for this court to deal
in any great
detail with the issue of the release letter, the forensic
examinations related thereto and the resultant reports.
What is
necessary is for this court to establish if the respondent signed the
deed of suretyship binding himself to repay the debts
of the Trust,
in the full knowledge that he was doing so for the Trust, or whether
he did so in the mistaken belief that he was
signing on behalf of 3
Skaar.
[13]
The applicant sets out, in its Replying Affidavit, the chronology of
how the Trust signed the application
forms for finance. It is very
clear from the surrounding email correspondence between the applicant
and the respondent that the
application form was intended to be
completed by the Trust, as it was indeed done. It is worrisome that
the respondent's denial
of the chronology challenges such aspects as
the date at the top of the finance application document (being
10/14/2020) asserting
that the documents were not sent to him in
2020.lt is clear from the content of the application form filled in
by Leon Prinsloo
and the respondent, that this was done in 2016. The
applicant's explanation of the date and the email address, which is
also challenged
by the respondent, is that the copy attached to its
papers was taken from an email to its counsel on 14 October 2020.
Hence it
is counsel's email address that appears on the document. The
respondent's challenge in these respects is opportunisitic, hollow
and disingenuous. Part of the application form required the personal
details of both Leon Prinsloo and the respondent to be furnished,
which both duly complied with.
[14]
It is noteworthy that it was the respondent who conducted all the
communications with the applicant's employees
in respect of the
application forms and other information required by the applicant.
This lends credence to the applicant's version
there were never any
negotiations for finance with 3 Skaar and that the respondent
approached the applicant for credit facilities
to finance the
purchase of farming equipment and agricultural products (for the
Trust). He then offered as security a deed of suretyship
by 3 Skaar,
as the farm trading side of the Trust's business was transferred to 3
Skaar. Therefore 3 Skaar was the trading entity
while the Trust was
the property-owning entity. The applicant asserts, and I accept, that
it was agreed between the parties that
the trustees and the
respondent would provide personal suretyships for the debts of the
Trust. This is evidenced by the fact that
the personal details of
Leon Prinsloo and the respondent were furnished as part of the
finance application.
[15]
The deed of suretyship was subsequently prepared by the applicant and
sent to the respondent for signature
by the deceased, Nelly Prinsloo,
Leon Prinsloo and the respondent. The deed of suretyship very clearly
and specifically indicates
that the suretyship related to the debts
of the Trust. The applicant's employee, Ms Venske, clearly marked and
indicated where
each party was to sign. Nelly Prinsloo and Leon
Prinsloo were not shareholders of 3 Skaar at the time and logic would
dictate that
it makes no sense to require personal suretyships from
them for the debts of 3 Skaar. It is also informative that it was
Leon Prinsloo
who signed the suretyship on behalf of 3 Skaar as he
(and the respondent) were directors of 3 Skaar at the time.
[16]
It also makes perfect sense that the applicant would require further
details concerning 3 Skaar in order
to assess if it was worth
obtaining a suretyship from that entity. It was as a result of this
query that the respondent furnished
the history of 3 Skaar,
indicating that as a new entity it would not qualify for asset
finance. Logically the application and resultant
finance agreements
would have to be in the name of the Trust. Once again, the respondent
turns the communication relating to 3
Skaar in this context, into
support for his contention that the negotiations for finance were
initially with 3 Skaar. This is disingenuous
as the correspondence
evidences otherwise. It is he who advised the applicant that the
application must be in the name of the Trust
as the assets will be
held by the Trust and leased to 3 Skaar as the trading entity. The
respondent in the Rejoinder Affidavit,
proffers the unconvincing
explanation that the deceased decided that the transaction was to be
concluded in the name of the Trust,
hence his advice to the applicant
to this effect. He knew, therefore that the relevant agreements had
to be in the name of the
Trust, and that there was no resolution or
intention for him to sign on behalf of 3 Skaar, as it was Leon
Prinsloo who was authorized
to do so. His version regarding the
signing of the suretyship is therefore far-fetched and, in my view,
far from the truth.
[17]
A consideration of the extensive history of the applicant's
relationship with the Trust, indicates that the
applicant has had
enormous difficulties in recovering the debts due to it, as a result
of the recalcitrant and devious conduct
of the trustees and the
respondent. The applicant was led up the proverbial garden path on
numerous occasions. Cessions and guarantees
were signed in favour of
the applicant, only to find that the assets which were the subject
matter of such cessions and guarantees
were already ceded to or
encumbered in favour of another entity. In one instance the proceeds
of a harvest were ceded and paid
to applicant. It was later
discovered that the Trust had passed a Continuing Covering Mortgage
Bond over certain assets, including
the same harvest, in favour of
Standard Bank of South Africa. The latter obtained a court order
perfecting the bond. The applicant
was obliged to reverse the credits
for those amounts and transfer the money to a suspense account. Those
amounts are now the subject
of litigation between the applicant and
Standard Bank.
[18]
The papers are replete with numerous other instances of such conduct
by the Trust and its functionaries,
especially the respondent. After
the Trust was liquidated, a meeting of creditors was held, at which
Leon Prinsloo and the respondent
testified. Both admitted that they
have no means to pay the debts of the Trust for which they signed as
sureties. It was was pertinently
put to the respondent that he signed
as surety in favour of the applicant and he was asked whether he had
the financial means to
pay the shortfall (due to the applicant). He
said he did not at that stage have the means to do so, and confirmed
that he was sure
that his liabilities exceeded his assets.
Interestingly, his legal representative objected to the respondent
being questioned about
his personal affairs as that was an enquiry
about the insolvent estate of the Trust and not about someone who
stood surety for
the Trust's debt to one of its creditors.
[19]
Another example of the knowledge and acceptance that the suretyship
signed by the respondent
was,
in fact, for the debts of the
Trust can be found in a letter dated 5 June 2018 by the Trust's legal
represetatives to the applicant's
legal representative, which
followed a meeting between the applicant and the Trust in an attempt
to settle the matter. The applicant,
at the meeting, requested
further security from the Trust and in the letter from the Trust's
legal representatives, Kramer Weihmann
& Joubert, the latter
asserts that the applicant already has sufficient security. The
letter sets out what that "sufficient"
security is and in
para (c) states that if their client (the Trust) is not in a position
to timeously pay the instalment due on
1 November 2018, the applicant
will still retain ownership of the of the tractors (mentioned earlier
in the letter), together with
the
personal
suretvship
agreements
signed by Mr Prinsloo,
Mr Ne/
,
Mrs Prinsloo,
the deceased Mr Prinsloo and 3 Skaar Boerdery. (my emphasis). It is
clear that such information could only have been
relayed to the legal
representative appearing at the insolvency enquiry and the one at the
settlement negotiations, by the respondent.
This in my view, is
indicative of the respondent's knowledge and acceptance that the deed
of suretyship he signed was for the debts
of the Trust.
[20]
On a conspectus of all the evidence presented in the very voluminous
papers of some 2 280 pages ,excluding
extensive Heads of Argument and
"authority bundles" by the respective legal representatives
in this matter, I am satisfied
that the respondent not only
negotiated the finance credit facilities on behalf of the Trust and
completed the necessary agreements
in respect thereof, but he was
eminently aware that the deed of suretyship, to which he and the
trustees of the Trust appended
their signatures, was for the debts of
the Trust and not 3 Skaar Boerdery.
[21]
It is also my view that the introduction of the so-called release
letter and the facility letter allegedly
addressed to 3 Skaar, do not
create the kind of factual dispute which precludes me from granting a
provisional order of sequestration.
The respondent will have his
opportunity to present further evidence on the return day, if he so
wishes, to say why the order should
not be made final. This would
include referring the issue of the questioned documents to oral
evidence in order to finally determine
the veracity of such
documents. The applicant has set out in its founding papers the acts
of insolvency and the advantage to creditors
upon which it relies for
the relief it seeks, and I am satisfied that in that respect, the
applicant has made out a case for such
relief. The respondent has not
indicated in the papers that he is in a financial position to pay the
amounts claimed from him,
should the court not uphold his defence,
nor has he denied the applicant's assertions that he is factually
insolvent. In fact Mr
Zietsman's submission was that if the court is
not with the respondent in respect of the release letter, then the
respondent "has
problems". This fortifies my view that an
order for provisional sequestration would be just and equitable in
this case
[22]
The manner in which the respondent has conducted himself calls for
closer scrutiny, which can well be achieved
by a trustee appointed to
administer the insolvent estate, in terms of the powers conferred
upon him/her by statute. Mr Meintjes
correctly submitted that a
provisional order of sequestration should be granted. He also sought
costs against the respondent, in
spite of seeking, in the Notice of
Motion, an order that the costs of this application be costs in the
sequestration of the respondent's
estate. My view is that the latter
is an equitable order.
[23]
In the circumstances the following order is made:
23.1
The estate of Willem Andries Maritz Nel, identity number [....], is
placed under provisional sequestration
in the hands of the Master of
the Free State High Court, Bloemfontein;
23.2
A
Rule Nisi
is hereby issued calling upon the respondent and
any other interested party to show cause, if any, to this court on
the 8
th
day of September 2022 at 9h30, why the provisional
order of sequestration should not be confirmed and made final;
23.3
A copy of this order must be served on the respondent.
23.4
A copy of this order must be served on:
23.4.1
any registered trade union which the Sheriff can, as far as is
reasonably possible, ascertain,
represents the employees of the
respondent;
23.4.2
the respondent's employees, if any, by affixing a copy of this order
to any notice board
to which the employees have access inside the
respondent's premises, or if there is no access to the premises by
the employees,
by affixing a copy to the front gate, where
applicable, and failing which, to the front door of the premises from
which the respondent
conducted business;
23.4.3
the South African Revenue Service;
23.5
The costs of this application are to be costs in the sequestration of
the respondent's estate.
S
NAIDOO J
On
behalf of the Applicant:
Adv L Meintjes
Instructed
by: Noordmans
Attorneys
4 Seventh Street
Arboretum
Bloemfontein
(Ref:A
Noordman/JDP/KEM1/0001)
On
behalf of the Respondent: Adv PJJ Zietsman
SC
Instructed
by: Kramer
Weihmann Inc
24 Barnes Street Westdene
Bloemfontein
(Ref: D Muller)