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[2020] ZALMPPHC 5
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M.N v L.F.G (5297/2018) [2020] ZALMPPHC 5 (12 February 2020)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
REPUBLIC OF SOUTH
AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO DIVISION,
POLOKWANE
(1)
REPORTABLE:
YES
/NO
(2)
OF
INTEREST TO THE JUDGES:
YES
/NO
(3)
REVISED.
CASE
NUMBER: 5297/2018
12/2/2020
In
the matter between:
M[….]
N[….]
APPLICANT
AND
L[….]
F[….] G[….]
RESPONDENT
JUDGEMENT
KGANYAGO
J
[1]
The applicant and the respondent both veterinarians by profession,
were initially married
to each other. They were in partnership
operating a veterinary clinic. Their marriage was dissolved by an
order of court of the
High Court of South Africa Northern Cape
Division on the 26
th
July 2016. The divorce order has also
incorporated a settlement agreement which regulated the patrimonial
matters of their marriage.
[2]
In terms of the settlement agreement the respondent agreed to pay the
applicant R13 000 000-00
in four instalments. First payment
was R1 000 000-00 payable within 10 days from date of the order,
second payment R 2 000 000-00
on or before 31
st
October 2016, third payment R5 000 000-00 on or before 31
st
October 2017, and the fourth and final payment R5 000 000-00 on
or before 31
st
October 2018.
[3]
The respondent did not pay the applicant in terms of the
settlement agreement. The
respondent made sporadic payments which
amounted to R2 056 000-00 between the period 25
th
July 2016 and 21
st
December 2017.
[4]
On the 31
st
December 2016, the applicant issued a warrant
of execution against the respondent. The sheriff attempted to execute
the warrant
on the 31
st
January 2017 and also on the 30
th
March 2018. However, the respondent could not satisfy the debt upon
demand by the sheriff, nor could he indicate to the sheriff
disposable property sufficient to satisfy the debt as stated on the
warrant.
[5]
On the 15
th
February 2017 and 12
th
May
2017 the respondent wrote letters to the applicant attempting to
renegotiate the terms of the debt repayments. According to
the
applicant, these letters and the sheriff’s returns constitute
an act of insolvency. That resulted in the applicant instituting
an
application against the respondent, seeking an order that the estate
of the respondent be provisionally sequestrated, and thereafter
finally sequestrated.
[6]
The respondent is opposing the applicant’s application.
The respondent denies
that he is indebted to the applicant in the
amount she is claiming. The respondent has stated that in terms of
the settlement agreement,
he was placed in possession of the assets
of the former partnership which included the debts and loan accounts
owed to the partnership.
According to the respondent, the applicant
was indebted to the partnership for a substantial amount and that
this debt has passed
to him and has been set off against any amount
he may be indebted to the applicant.
[7]
The respondent in his answering affidavit has stated that as at
the time of divorce,
the livestock was valued in excess of
R13 000 000-00 which was a common error preventing
consensus and at worst a misrepresentation
made to him by the
applicant and other persons which induced the settlement agreement.
According to the respondent, the settlement
agreement does not
reflect the true intention of the parties, as the provisions relating
to the settlement of the partnership and
payment to the applicant
were based on what was thought to be the value of the livestock and
the value that could be settled in
sale.
[8]
It is the respondent’s contention that the livestock was
overvalued, the value
of the partnership was incorrect and the value
of the applicant’s share was also incorrect. That resulted in
him undertaking
to pay for assets which were not worth R13 000 000-00
based on an incorrect reflection of the value. As a result of that
he
launched an application which is still pending in the Northern Cape
Division of the High Court for the setting aside of the
relevant
portions of the settlement agreement based on the defence that the
agreement is invalid due to a common error.
[9]
He denies that he is insolvent and has stated that his assets
exceed his liabilities.
He has stated that his personal assets
excluding Medivet Diere Kliniek Wildsdienste is valued at
R9 438 669-00 and has
also attached a copy of his private
financial statements as at 28 February 2018. He states that he is the
sole owner of Medivet
which is a sole proprietor and its total assets
is R 10 338 591-50, and he has attached the financial
statements. He
has also stated that his game is currently valued at
R3 186 500-00 and has attached a valuation certificate. He
owns
immovable property valued at R780 000-00 and has attached a
valuation certificate. That Investgil Fifteen CC owns two
properties, one valued at R980 000-00 and the other at
R3 850 000-00 and has attached the valuation certificate.
According to the respondent, none of the immovable properties or his
interest in Investgil Fifteen CC were ever taken into consideration
by applicant.
[10]
It is the applicant’s argument that she is having a liquidated
claim against the respondent in the
sum of R10 944 000-00
together with interest at the prescribed rate, and that as such, she
has the necessary
locus
standi
to
petition for the sequestration of the respondent’s estate. That
the respondent has committed act of insolvency as envisaged
in
section 8(b), 8(c), and 8(g) of
Insolvency
Act
(“the Act”)
[1]
. That
the estate of the respondent is factually insolvent and it will be to
the advantage of the respondent’s creditors if
his estate is
finally sequestrated. However, at this stage what the applicant is
seeking is for an order for the provisional sequestration
of the
estate of the respondent.
[11]
The respondent has argued that that the applicant’s application
for provisional sequestration of his
estate is an attempt by the
applicant to unfairly and unlawfully exact payment in terms of a
settlement agreement which has been
made an order of court. The
respondent submitted that to the extent, the R13 000 000-00
was to be paid over a period
of time, the very basis of the agreement
was that the respondent would sell livestock from time to time and
pay the periodic payments
from the proceeds of the sale of the
livestock. According to the respondent, the applicant does not
dispute that the undertaking
to pay R13 000 000-00 over a
period of time was entirely predicated on the sale of the
partnership’s assets to
raise sufficient funds to make payment.
The respondent denies that the letters he wrote to the applicant
indicate an inability
to pay, but was bring it to the attention of
the applicant of his intention to pay from the proceeds of certain
animals. With regard
to the sheriff’s returns dated 31
st
January 2017 and 30
th
March 2018 the respondent argues
that both returns of service are unclear and contradictory. The first
return state that it was
handed over to a Ms Elize Kruis, a worker in
charge, whilst the second return state that the game was pointed by a
certain Mr Kobus
the farm manager. It is the respondent’s
contention that the sheriff seems to have attached game that have
already been sold,
and seems also not to be based on what was pointed
out to him or found, but rather on a list that was provided to him.
[12]
It is not in dispute that in terms of the settlement agreement which
has been made an order of court, the
respondent agreed to pay the
applicant the sum of R 13 000 000-00
of which to date he has not
yet paid in full. The applicant is
seeking a provisional winding-up order against the respondent, and
the respondent is opposing
that application. The respondent is
basically disputing that he is insolvent and that he is indebted to
the applicant.
[13]
It is trite that a respondent who dispute indebtedness in a
provisional winding-up application, must
show on a balance of
probabilities that its indebtedness to the applicant is disputed on
bona fide
and reasonable grounds. The onus on the respondent
is not to show that it is not indebted to the applicant, but merely
to show
that the indebtedness is disputed on
bona fide
and
reasonable grounds.
(See Kalil v Decotex (Pty) Ltd and Another
1988 (1) SA 943
(A) at 980 B-C)
[14]
Even
though the settlement agreement has been made an order of court, the
parties are not in agreement in relation to interpretation
of
portions of the agreement. The respondent has submitted that the
agreement must be interpreted to mean that in the event of
events
occurring after conclusion of the settlement agreement materially
affecting the market value of the assets, the market value
of the
relevant partnership assets have to be re-assessed and appropriate
adjustment be made. That will also apply in the event
of material
increase in the value of the assets. The respondent is therefore of
the view that some portions of the agreement are
invalid due to a
common error between the parties. The applicant does not share the
same sentiment with the respondent.
[15]
That resulted in the respondent launching an application in Northern
Cape High Court for the setting aside
of the relevant portions of the
settlement agreement based on the defence that the agreement is
invalid due to a common error.
However, this application was
instituted after the present application was instituted. Though it
may seem to be retaliation to
the applicant’s application, the
court will not simply ignore it. It may have some serious
consequences to the present application.
[16]
In
Hulse-Reutter
v Heg Consulting Enterprises (Pty) Ltd
[2]
Thring J said:
“
I
think it is important to bear in mind exactly what it is the trustees
have to establish in order to resist this application with
success.
Apart from the fact that they dispute the applicants’ claim,
and do so bona fide, which is now common cause, what
they must
establish is no more and no less than that the grounds on which they
do so are reasonable. They do not have to
establish, even on
the probabilities, that the company, under their direction, will, as
a matter of fact, succeed in any action
which might be brought
against it by the applicants to enforce their disputed claims.
They do not, in this matter, have to
prove the company’s
defence in any such proceedings. All that they have to satisfy
me of is that the grounds which
they advance for their and the
company’s disputing these claims are not unreasonable. To
do that, I do not think that
it is necessary for them to adduce on
affidavit, or otherwise, the actual evidence on which they would rely
at such a trial. This
is not an application for summary judgment in
which, in terms of the Supreme Court Rule 32 (3), a defendant who
resists such an
application be delivering an affidavit or affidavits
must not only satisfy the court that he has a bona fide defence to
the action,
but in terms of the Rule must also disclose fully in his
affidavit or affidavits’ the material facts relied upon.”
[17]
The respondent is not still thinking about launching the application
to set aside the portions
of the agreement which he is of the view
that they are invalid due to an alleged common error, but the
application is already pending.
I did not see or had an opportunity
to read the papers filed in the Northern Cape High Court and see his
ground of application.
However, that is not necessary as at this
stage it is immaterial whether he will succeed with his application
or not. That application
should be given an opportunity to run its
course.
[18]
The applicant has submitted that the respondent is factually
insolvent. The respondent has submitted
his private financial
statements and the financial statements of other companies in which
he is having an interest. The personal
assets of the respondent
combined with the interest he is having in the other companies, far
exceed the R13 million and inclusive
of his own personal debts.
[19]
Under the circumstance, the court is satisfied that the respondent is
disputing the applicant’s
indebtedness on reasonable grounds.
The applicant’s provisional winding-up application stand to
fail.
[20]
In the result I make the following order:
20.1 The applicant’s
provisional winding-up application is dismissed with costs on party
and party scale.
MF. KGANYAGO J
JUDGE OF HIGH
COURT OF SOUTH AFRICA, LIMPOPO DIVISION, POLOKWANE
APPEARANCE:
COUNSEL FOR
APPLICANT : ADV L.W. DE BEER
INSTRUCTED BY
:
WESSEL & SMITH INCORPORATED
COUNSEL FOR RESPONDENT
: ADV D.MARAIS
INSTRUCTED BY
:
MARINUS VAN
JAARSVELD ATTORNEYS
DATE OF HEARING
:
11 DECEMBER 2019
DATE OF JUDGEMENT
: 12 FEBRUARY 2020
[1]
Act 24 of 1936
[2]
1988 (2) SA 208
(C) at 219 F-I