About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2021
>>
[2021] ZAGPJHC 149
|
|
Mercantile Bank (A Division of Capitec Bank Limited) v Ross (2020/19791) [2021] ZAGPJHC 149 (13 August 2021)
REPUBLIC OF SOUTH
AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION,
JOHANNESBURG
CASE
NO: 2020/19791
REPORTABLE
OF
INTEREST TO OTHER JUDGES
NOT
REVISED
13
AUGUST 2021
In the
matter between:
MERCANTILE
BANK
Applicant
A
DIVISION OF CAPITEC BANK LIMITED
and
MICHAEL
MAURICE
ROSS
Respondent
JUDGMENT
WEINER
J
Introduction
[1]
The
applicant applied for the sequestration of the respondent’s
estate. The applicant initially relied on the fact that the
respondent failed to pay the sum of R32 807 774.41 owed to
it. The applicant delivered a letter of demand. In response,
the
respondent denied his indebtedness. The applicant contended that such
failure to pay amounted to an act of insolvency in terms
of s 8(g)
of the Insolvency Act 24 of 1936 (the ‘Act’).
[1]
It abandoned reliance on this section and relied on the fact that the
respondent had committed an act of insolvency in terms of
s 8(c)
of the Act,
[2]
in that he
disposed of his immovable property (the Gallo Manor property) to the
prejudice of his creditors, at a time when he was
insolvent. The
applicant also alleged that the respondent was factually insolvent.
[2]
Section
9 of the Act details the requirements for a sequestration order. It
is not disputed by the respondent that all of the formal
requirements
set out in s 9 have been complied with by the applicant. In
addition, the respondent admitted that he has no
employees, and
therefore there was no need to comply with s 9(4A)(a)(i)-(ii) of
the Act, which relates to service on trade
unions and employees.
[3]
The
application for sequestration is based on the respondent being
indebted to the applicant in the sum of not less than R100, as
contemplated in s 9(1) of the Act, and that the respondent
committed an act of insolvency, and/or is factually insolvent as
contemplated in s 9(3)(a)(v) of the Act.
[3]
Background
[4]
It
is not disputed that the applicant lent and advanced monies to a
company styled QD Cellular (Pty) Ltd (‘QD Cellular’)
throughout the period of 2007 to 2017. Repayment of the debts of QD
Cellular was secured by a cession of its book debts, various
notarial
bonds and suretyship undertakings by three parties, one of whom is
the respondent. The respondent bound himself as surety
and
co-principal debtor unto and in favour of the applicant in terms of
various suretyship agreements concluded over time.
[5]
In
July 2019 the applicant was advised that, due to severe financial
strain, the business of QD Cellular was no longer sustainable
and
that it could no longer service its loan accounts with the applicant.
There is no dispute between the parties that the business of
QD Cellular failed and that an amount of
R32 807 774.41
was owed to the applicant.
The applicant submitted that:
(a)
In
terms of an Authority and Appointment agreement (the ‘Agreement’)
concluded in August 2019, the parties agreed that
the notarial bonds
registered and held in favour of the applicant would be perfected,
and that the respondent would
be appointed to recover the book
debts of QD Cellular and dispose of its cellular stock.
(b)
The
Agreement provided that the respondent would be released from his
liability as surety, if a sum of R12 million was recovered
from the
sale of the stock and recovery of the book debts.
(c)
The
R12 million recovery mark was not reached and the respondent remains
liable to the applicant for the balance of the debts of
QD Cellular.
[6]
As
a result, demand was made to the respondent to make payment of the
amount in terms of his suretyship obligations. The respondent
denied
liability and referred to the Agreement. He contended that in terms
of the Agreement, he was appointed by the applicant
to act as their
agent in order to dispose of the movable assets and collect the Trade
Debtors of the company. He stated that:
‘
Clause
10 of this agreement states that should the Bank realize a net R12
million from the disposal of the stock and collection
of the debtors,
it would release me from my obligation under a suretyship for the
indebtedness of the Company to the Bank. I have
not been made aware
by the Bank as to how much has been realized and collected to date
against the R12 million target and what
the balance outstanding on
Trade Debtors is that still has to be collected by the Bank to be
applied against the target’.
Respondent’s
defences
[7]
The
respondent raises four disputes:
(a)
Firstly,
he denies that he is liable to the applicant at all, because he
should have been released from his liability as surety
in terms of
clause 10 of the Agreement. Had it not been for the applicant’s
repudiation, or breach of that Agreement, the
indebtedness would not
have arisen. He accordingly contended that the order for
sequestration could not be granted because the
applicant does not
have a claim as contemplated in s 12(1)(a) of the Act.
(b
The
respondent further denies that he is insolvent as contemplated in
s 12(1)(b) of the Act. This denial is dependent on whether
the
respondent is in fact liable to the applicant in terms of the
suretyship.
(c)
Further,
he denies that he committed an act of insolvency, as contemplated by
s 12(1)(b) of the Act, when he disposed of his
immovable
property to the prejudice of his creditors (including the applicant).
(d)
Lastly,
he denies that it will be to the advantage of creditors for the
respondent’s estate to be sequestrated as contemplated
in
s 12(1)(c) of the Act.
(e)
In
a subsequent application brought by the respondent, he applied for
certain witnesses to be called to provide oral evidence,
[4]
as he submitted that there were irresoluble disputes of fact in the
application, which could not be resolved on the papers.
Repudiation/breach of
the Agreement
[8]
The
respondent contended that the applicant acted in breach of the
Agreement by interfering with his duties, thereby preventing
him from
executing same. This breach resulted in the respondent having been
unable to realise R12 million for the stock and book
debts of QD
Cellular in order for him be released from any further liability
towards the applicant.
[9]
The
respondent stated that he commenced with his duties, in conjunction
with the staff members of QD Cellular. He began by the processing
of
outstanding credits due to debtors, preparing letters of demand to
outstanding debtors, telephoning outstanding debtors and
commencing
with negotiations with major role players in the industry to
purchase the remaining stock of QD Cellular.
[10]
According
to the respondent, the applicant, in breach of the Agreement,
immediately commenced obstructing him by insisting on authoring
the
letters of demand. This caused a crucial delay in having the letters
issued. The applicant also stated that, for this reason,
he could
reconcile and account to the applicant on a daily basis as per the
provisions of the Agreement. The applicant also received
returns of
equipment from debtors, thereby also short-circuiting the process
agreed upon between himself and the applicant. Whilst
he was still
negotiating with retailers and major role players in the industry for
the purchase of the stock of QD Cellular, representatives
of the
applicant decided during mid-October 2019 (some two months after the
Agreement was concluded) that the process would be
halted and that a
public auction was the quickest and most effective way to dispose of
the stock.
[11]
This
conduct, the respondent submitted, constituted an obstruction to him
completing his duties as duly appointed agent, and constituted
a
repudiation of the Agreement. The respondent thus contended that this
conduct was prejudicial to him, as surety, which flowed
from the
breach of a contractual obligation and which constituted a defence in
law to the indebtedness.
[12]
The
applicant denied these allegations. Instead, it contended that
Ms Reddy, the applicant’s head of collections, assisted
the respondent in recovering the debt from the outstanding debtor’s
book and the sale of stock. On the respondent’s
own version,
the book debts and cellular stock had a value of R7.7 million.
According to the respondent, by October 2019, the book
debts of QD
Cellular totalled around R4.2 million.
[13]
In
November 2019, the hypothecated stock of QD Cellular was set to be
auctioned. This was done in agreement with the respondent,
because he
realised that the stock would not realise the value that he had
previously attached to it.
[14]
According
to the applicant, much effort went into this auction, both from the
applicant’s side and also from the QD Cellular
team. The
auctioneers itemised all QD Cellular stock and, in cooperation with
the respondent, carefully prepared auction lots comprising
of a
number of mixed stock lots, a lot of all stock, a lot of non-stock
items (movables such as furniture and equipment) and a
lot of
shelving. The respondent participated in this auction process. The
auctioneers sent an excel spreadsheet to the respondent
for the
respondent’s consideration and approval. The respondent gave
his approval.
[15]
The
auction was conducted electronically from 30 November 2019 to
9 December 2019, with 20 lots of made-up stock. The aggregate
of
the highest bids received for all stock, non-stock, movables and
shelving amounted to R510 500. As a result of the poor
interest
in the stock, which was fast becoming obsolete, the applicant
revisited engagements with a business associate of the respondent
at
KNR Flatrock, with whom there had been previous negotiations to
procure all stock of QD Cellular (including movables, shelving
and
equipment). Upon viewing the warehouse of QD Cellular, KNR Flatrock
submitted an offer of R2.1 million (exclusive of VAT) for
all stock
and non-stock items.
[16]
As
a result of the low auction offers, the lack of interest of other
parties that had been approached, and the fact that most of
the stock
was slow-moving and becoming obsolete, the applicant accepted the
offer. The respondent was at all relevant times aware
of the
negotiations with KNR Flatrock. He did not procure a better offer.
The stock was subsequently sold to KNR Flatrock, with
the
respondent’s knowledge and approval. The applicant submitted
that the total value recovered by the applicant is not that
dissimilar from the estimate of the value of the stock and book debts
conveyed by the respondent in early August 2019.
[17]
The
applicant contended that this alleged interference and breach of the
Agreement was described in vague and unsubstantiated terms
in the
answering affidavit, without any detail to support the allegations.
The applicant thus submitted that these allegations
were simply an
attempt by the respondent to create a material dispute of fact where
none, in fact, existed.
[18]
The
applicant contended that no act of repudiation was committed by the
applicant. Repudiation is the conclusion by one party to
the
contract, that performance in terms of the contract by the other
party will not be forthcoming.
[5]
That did not occur in this case.
[19]
In
Dominick
v Nedbank Limited
,
[6]
the SCA dealt with the issue of prejudice relating to a surety. The
case concerned the bank extending the date of expiry of overdraft
facilities which resulted in certain payments being met. The
appellant argued that he was prejudiced by the bank extending the
overdraft facilities and that such payments should not have been paid
out of his account. Mpati JA
held
that—
‘
The
principle relating to the release of a surety as a result of
prejudice caused to him or her by the actions of the creditor was
set
out as follows by this court (per Olivier JA) in
Absa Bank Ltd v
Davidson
[1999] ZASCA 94
;
2000 (1) SA 1117
(SCA) para 19:
“
As
a general proposition prejudice caused to the surety can only release
the surety (whether totally or partially) if the prejudice
is the
result of a breach of some or other legal duty or obligation. The
prime sources of a creditor’s rights, duties and
obligations
are the principal agreement and the deed of suretyship. If . . . the
alleged prejudice was caused by conduct falling
within the terms of
the principal agreement or the deed of suretyship, the prejudice
suffered was one which the surety undertook
to suffer . . .” ’
[20]
The
court found in
Dominick
that, ‘[
s]ince
the extensions of the overdraft facilities were authorised by the
suretyships, no breach of any legal duty owed to the appellants,
or
obligation towards them under the two agreements, was committed by
Nedbank when it effected the transfers in question.’
[7]
[21]
Similarly
in the present case, the applicant legitimately exercised its right
in terms of clause 7 of the Agreement to revoke and
cancel the
respondent’s authority to further act as its agent.
[8]
The steps that were taken by it to recover the book debts of QD
Cellular and sell the stock were rightfully exercised. The respondent
was appointed to act on behalf of, and exercise the applicant’s
rights to recover the book debts and sell the stock –
but this
was not to the exclusion of the applicants. The contract does not
express such agreement between the parties. The appointment
of the
respondent as the applicant’s agent did not, in law, deprive
the applicant (as principal) of its rights to recover
the book debts
and sell the stock. Clause 6 of the Agreement is clear that the
applicant did not waive any of its rights and that
it was entitled to
act as it did.
[9]
[22]
In
regard to the respondent’s disposal of the Gallo Manor
property,
the chronology of events relating to the
disposal of this property is of significance:
(a)
An
action for divorce between the respondent and his wife was instituted
on 11 November 2019 – at about the time the
respondent
realised that
R12 million would not be
obtained for the assets of QD Cellular;
(b)
After
the divorce proceedings were instituted, Ms Reddy (not knowing of the
divorce proceedings) advised the respondent that he
should dispose of
the Gallo Manor property in order to pay a portion of his debt to the
applicant. At the time, the respondent
made no mention of the pending
divorce proceedings and/or the settlement agreement. (In the divorce
agreement, the respondent gave
the property to his ex-wife,
apparently in lieu of his maintenance and accrual obligations).
(c)
As
appeared from documentation from TransUnion on the respondent's
credit profile, as at 22 January 2020, the property was still
registered in the name of the respondent.
[10]
(d)
On
28 February 2020, a Deeds Office search report in respect of the
property recorded that the property was still registered in
the
respondent’s name and was bonded to Nedbank Ltd in 1999, 2003
and 2008 for repayment of a total sum of R1 000 000.
(e)
As
at 2 March 2020, a further report showed that the respondent was
still the registered owner of the property. It also appeared
from the
information contained in the report that the Nedbank bond had been
repaid in full.
(f)
The
applicant’s legal team was therefore satisfied that the
sequestration of the respondent's estate would result in an advantage
to creditors.
(g)
The
respondent transferred the property to his ex-wife on 19 March 2020.
The applicant contended that the divorce between the respondent
and
his wife was one of convenience, with the main purpose of disposing
of an unencumbered immovable property to prevent creditors
from
laying claim to it.
[23]
The
respondent disputed these allegations, and contended that he and his
wife were divorced and that the transfer of the property
was done
pursuant to a divorce agreement – with no intention to
prejudice his creditors.
[24]
However,
as the applicant pointed out:
(a)
The
respondent continues to reside at the property, despite the fact that
he and his wife are divorced.
(b)
At
the time when the parties were negotiating a strategy for the QD
Cellular debt, the applicant’s representatives proposed
inter
alia
that a bond be registered over the
Gallo Manor property. The respondent rejected the offer, as he did
not want to expose the property
to the QD Cellular debt.
[25]
The
applicant submitted that it was highly suspicious that the respondent
hid this information, and that the reason was to prevent
the
applicant from obstructing the disposal and transfer of the property
to his ex-wife.
[26]
In
de
Villiers NO v Maursen Properties (Pty) Ltd
,
[11]
it was held that t
he
intention of a respondent in making a payment is irrelevant. The only
question is whether the transfer of the property to the
respondent’s
ex-wife actually preferred his ex-wife to other creditors, or whether
other creditors actually prejudiced. The
court held:
‘
That
the intention of the debtor is irrelevant in s 8 (c) can be deduced
from the wording of the section.
In s 8 (c) “effect”
is related to “disposition” which indicates an objective
test to be applied to the effect
of the disposition.’
[27]
The
disposition of the property obviously caused prejudice to the
respondent’s creditors, because it resulted in the respondent’s
financial position deteriorating, and rendering him insolvent. This
directly affects the creditors and the applicant’s prospects
of
recovering the debt due to it appear minimal.
The application in
terms of Rule 6(5)(g)
[28]
On
12 July 2021, the respondent launched the application for the matter
to be referred for oral evidence and for certain witnesses
to
testify, or for the matter to be referred to trial. Although the
respondent, in his founding affidavit, dealt with the matters
he
contended amounted to disputed issues, he did not, in the Notice of
Motion, define the issues which he wanted to refer to oral
evidence.
[29]
In
the application, t
he respondent contended that there was a
dispute of fact that required a referral to oral evidence on the
disposal of QD Cellular’s
assets, in that a former director of
QD Cellular, Mr de Villiers, confirmed that the value of the stock
and equipment of QD Cellular
was R28 million and it was sold for the
nominal value of R2.7 million to KNR Flatrock.
[30]
The
respondent stated that the offer accepted by the applicant of R2.7
million represented 7.5% of the reasonable market value.
The
respondent also raised queries about the proceeds obtained for
various other assets. He submitted that the applicant has not
explained why it hastened to have the assets sold under circumstances
where the market values could not be achieved. He also wished
to
examine various witnesses who he stated could give evidence on the
alleged repudiation and provide a valuation of the goods
in issue. He
also wished to callas a witness the attorney for his ex-wife, who
represented her during divorce proceedings. The
latter, he contended,
could give evidence disputing the applicant’s case that the
divorce proceedings were specifically instituted
and the settlement
agreement concluded to dispose of the Gallo Manor property to the
prejudice of his creditors.
[31]
The
applicant sought to counter this application on various grounds.
Firstly, it relies on
Law
Society, Northern Provinces v Mogami
,
[12]
where the SCA held that ‘[a]n application for the hearing of
oral evidence must, as a rule, be made
in
limine
and not once it becomes clear that the applicant is failing to
convince the court on the papers or on appeal.’ The applicant
submits that the timing of the respondent’s application is not
explained. He has been aware of the issues he now claims as
disputes
of fact from the inception of this matter.
There
is no explanation as to why this application was launched some nine
months after the sequestration application was launched,
and why it
did not form part of the respondents answering affidavit. It was only
launched a few days
prior
to the hearing of the matter. This alone demonstrates a lack of bona
fides.
[32]
In
regard to whether a genuine dispute of fact exists, reference was
made by the applicant to
Wightman
t/a JW Construction v Headfour (Pty) Ltd
,
[13]
where the SCA held as follows:
‘
A
real, genuine and bona fide dispute of fact can exist only where the
court is satisfied that the party who purports to raise the
dispute
has in his affidavit seriously and unambiguously addressed the fact
said to be disputed ….
…
factual
averments seldom stand apart from a broader matrix of circumstances
all of which needs to be borne in mind when arriving
at a decision…
There is thus a serious duty imposed upon a legal adviser who settles
an answering affidavit to ascertain
and engage with facts which his
client disputes and to reflect such disputes fully and accurately in
the answering affidavit. If
that does not happen it should come as no
surprise that the court takes a robust view of the matter.’
[33]
In
addition, this was dealt with in
Fakie
NO v CCII Systems (Pty) Ltd
,
[14]
wherein the SCA stated—
‘
That
conflicting affidavits are not a suitable means for determining
disputes of fact has been doctrine in this court for more than
80
years. Yet motion proceedings are quicker and cheaper than trial
proceedings and, in the interests of justice, courts have been
at
pains not to permit unvirtuous respondents to shelter behind patently
implausible affidavit versions or bald denials. More than
60 years
ago, this Court determined that a Judge should not allow a respondent
to raise “fictitious” disputes of fact
to delay the
hearing of the matter or to deny the applicant its order. There had
to be “a bona fide dispute of fact on a
material matter”.
This means that an uncreditworthy denial, or a palpably implausible
version, can be rejected out of hand,
without recourse to oral
evidence. In
Plascon-Evans Paints Ltd v
Van Riebeeck Paints (Pty) Ltd
, this
Court extended the ambit of uncreditworthy denials. They now
encompassed not merely those that fail to raise a real, genuine
or
bona fide dispute of fact but also allegations or denials that are so
far-fetched or clearly untenable that the Court is justified
in
rejecting them merely on the papers.’
[34]
It
is common cause that the sum of R12 million was not realised, as
required in terms of clause 10 of the Agreement.
The proceeds
received from the sale of the movable property of QD Cellular were
credited to the total sum owed by QD Cellular to
the applicant, and
QD Cellular remains indebted to the applicant, as at 1 February 2020,
in the total sum of R32 807 774.41. As
set out above, the applicant
legitimately exercised its rights to revoke the respondent’s
authority and was entitled to dispose
of the goods as it did.
[35]
The
allegations relating to the repudiation of the Agreement are vague
and legally untenable. The issues relating to the value of
the assets
are raised at a late stage in the proceedings with no factual or
clear evidentiary proof of such allegations. There
was no explanation
for the delay in launching the application in terms of Rule 6(5)(g).
[36]
The
applicant accordingly submitted that it had demonstrated that the
respondent was indebted to it for a sum not less that R100,
in
compliance with s 12(1)(a) of the Act. It constitutes a
liquidated amount as evidenced by the certificate of balance attached
to the papers.
[37]
The
indebtedness was not disputed on bona fide and reasonable grounds.
The application in terms of Rule 6(5)(g) must accordingly
fail. If
the respondent has further submissions and evidence that he wishes to
introduce, in this regard, he can do so on the return
day. There is
thus no prejudice to him.
Advantage to creditors
[38]
The
respondent apparently has only three concurrent creditors. The
applicant accordingly contended that it will be to the advantage
of
the respondent’s three known creditors to establish a
concursus
creditorum
and participate in a fair
distribution of the assets of the respondent.
[39]
In
regard to the Gallo Manor property, the applicant submitted that if
the respondent’s estate is sequestrated, the appointed
trustee
has the power to investigate the transfer of the property and recover
and realise it in order to distribute the proceeds
amongst the
respondent’s creditors. The trustee can also investigate the
repayment of the bond to Nedbank.
[40]
The
appellant also relied on the fact that the respondent was factually
insolvent. Having found that the indebtedness to the applicant
has
been proven, the respondent has not demonstrated that he is factually
solvent. He did not deal with his financial position
to demonstrate
that his assets exceed his liabilities. Thus the position of factual
insolvency has also been established.
[41]
The
applicant seeks a final order of sequestration. This is not permitted
in terms of the Act.
The
applicant is required to approach the court twice: once to obtain a
provisional order of sequestration in terms of s 10 of the
Act;
[15]
and again to have the
provisional
order
confirmed and made final in terms of s 12 of the Act.
[16]
Although the applicant must establish the same requirements,
the
standard of
proof
differs. At
the provisional stage, the court must be of the opinion that,
prima
facie,
the
requirements
for
a
sequestration
order
have been
satisfied; at the final stage, the court must be satisfied that those
requirements
are proved
on a balance of probabilities.
[17]
A final order cannot be granted without a provisional one first being
made.
[18]
At
this stage, the applicant has provided
prima
facie
evidence of the indebtedness, the act of insolvency and the advantage
to creditors.
Accordingly,
the following order is made:
1.
A
provisional order of sequestration of the respondent’s estate
is granted.
2.
The
respondent is to show cause on the return date being 4 October 2021,
why a final order should not be granted.
3.
Costs
of the application to be costs in the sequestration.
S
E WEINER
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION, JOHANNESBURG
This
judgment was handed down electronically by circulation to the
parties’ and/or parties’ representatives by email
and by
being uploaded to CaseLines. The date and time for hand-down is
deemed to be 10h00 on
13 August 2021.
Date of
hearing: 19
July 2021
Date of
judgment: 13
August 2021
Appearances:
Counsel for the
applicant: I
Oschman
Attorney for the
applicant: Bezuidenhout
van Zyl &
Associates Inc
Counsel for the
respondent: D
Schoeman
Attorney for the
respondent: Schoeman
Borman Inc
[1]
In terms of s 8, ‘A debtor commits an act of insolvency—
(g) if he gives notice in writing to any one of his
creditors that
he is unable to pay any of his debts’.
[2]
In terms of s 8, ‘A debtor commits an act of insolvency—
(c) if he makes or attempts to make any disposition
of any or his
property which has or would have the effect of prejudicing his
creditors or of preferring one creditor above another’
[3]
Section
9(3)(
a
)(v)
of the Act provides: ‘Such a petition shall, subject to the
provisions of paragraph (c), contain the following information,
namely— (v) the debtor’s act of insolvency upon which
the petition is based or otherwise allege that the debtor is
in fact
insolvent.’
[4]
Application
in terms of Rule 6(5)(g) launched on 12 July 2021.
[5]
See
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd
[2000]
ZASCA 81
;
2001
(2) SA 284
(SCA) para 16.
[6]
Dominick
v Nedbank Limited
[2015]
ZASCA 160
para 15.
[7]
Ibid para 20.
[8]
Clause 7 provides: ‘The Bank may revoke this authority at any
time by written notice to the agent.’
[9]
Clause 6 provides: ‘This authority will take effect on date of
signing by the Bank and shall not be construed in any way
whatsoever
that the Bank is obliged to appoint an agent or that the Bank waives
any of its rights in any way whatsoever.’
[10]
TransUnion is a company that supplies credit status reports.
[11]
De
Villiers NO v Maursen Properties (Pty) Ltd
1983 (4) SA 670
(T) at 675G.
[12]
Law
Society, Northern Provinces v Mogami and Others
[2009] ZASCA 107
;
2010 (1) SA 186
(SCA) at 195B-C.
[13]
Wightman
t/a JW Construction v Headfour (Pty) Ltd & Another
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA) paras 12-13 (footnotes
omitted).
[14]
Fakie
NO v CCII Systems (Pty) Ltd
[2006] ZASCA 52
;
2006 (4) SA 326
(SCA) para 55.
[15]
Section
10 of the Act, titled ‘Provisional sequestration’
provides:
‘
If
the court to which the petition for the sequestration of the estate
of a debtor has been presented is of the opinion that prima
facie—
(a)
the
petitioning creditor has established against the debtor a claim such
as is mentioned in subsection (1) of section nine; and
(b)
the
debtor has committed an act of insolvency or is insolvent; and
(c)
there
is reason to believe that it will be to the advantage of creditors
of the debtor if his estate is sequestrated,
it may make an order
sequestrating the estate of the debtor provisionally.’
[16]
See footnote 12 above. Further, s 12(2) provides that, ‘If
at such hearing the court is not so satisfied, it shall
dismiss the
petition for the sequestration of the estate of the debtor and set
aside the order of provisional sequestration or
require further
proof of the matters set forth in the petition and postpone the
hearing for any reasonable period but not
sine
die
.’
[17]
Sacks
Morris (Pty) Ltd v Smith
1951
(3) SA 167
(O) 170;
Lindhaven
Meat Market
CC
v
Reyneke
2001
(1) SA 454 (W) 460.
[18]
R Sharrock et al
Hockley’s
Insolvency Law
9
ed (2012) at 53.