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[2019] ZALMPPHC 45
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Standard Bank of South Africa Ltd v Slippers and Others (4252/2017, 4258/2017) [2019] ZALMPPHC 45 (20 September 2019)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH
AFRICA
(LIMPOPO DIVISION, POLOKWANE)
(1)
REPORTABLE:
YES
/NO
(2)
OF
INTEREST TO OTHER JUDGES:
YES
/NO
(3)
REVISED.
CASE NO: 4252/2017
In
the matter between:
STANDARD
BANK OF SOUTH AFRICA LTD
APPLICANT
And
JAN
WALTER SLIPPERS
RESPONDENT
CASE NO: 4258/2017
In
the matter between:
STANDARD
BANK OF SOUTH AFRICA LTD
APPLICANT
And
JAN WALTER SLIPPERS N.O
FIRST RESPONDENT
BENJAMIN
NICOLAAS REDELINGHUYS N.O
SECOND RESPONDENT
OLGA
DEIRDRE VEENEMANS N.O
THIRD
RESPONDENT
JUDGMENT
MAKGOBA
JP
[1]
The
Applicant applies for the sequestration of the estate of the
Respondent, Jan Walter Slippers. Simultaneously under case number
4258/2017 the Applicant applies for the sequestration of the Walter
Slippers Family Trust. The two applications form part of five
related
matters that include the liquidation of three close corporations of
which the Respondent is the sole member. All these
five related
matters were instituted in this Court.
[2]
The three liquidation applications are:
2.1.
Case
number 4253/2017 between The Standard Bank of South Africa Limited v
lngogo Safaris CC;
2.2.
Case
number 4259/2017 between The Standard Bank of South Africa Limited v
lngogo Wildsplaas CC and
2.3.
Case
number 4270/2017 between The Standard Bank of South Africa Limited v
lngogo Wildlife Studio & Taxidermy CC.
[3]
On
26 April 2019 the High Court of South Africa, Gauteng Division,
Pretoria granted provisional liquidation orders in respect of
the
three close corporation listed aforesaid. In the light of the
provisional liquidation of the three close corporations the Applicant
now only proceeds with the two remaining sequestration applications.
[4]
For
the sake of convenience reference will be made hereinafter to Mr Jan
Walter Slippers as "Respondent", to Walter Slippers
Family
Trust as "the Trust" and to the liquidated close
corporations as "the liquidated close corporations".
[5]
The
contents of the founding affidavits in these applications read
mutatis mutandis
the
same given that the Respondent, the Trust as well as the liquidated
close corporation bound themselves as sureties and co-principal
debtors in respect of the same amounts owed to the Applicant.
[6]
It
needs to be mentioned that while the liquidation applications in
respect of the three close corporations were pending in this
Court,
the Respondent filed applications for business rescue in respect of
the close corporations in the Gauteng Division of the
High Court,
Pretoria. On 26 April 2019 Potterill J dismissed the business rescue
applications. The Court exercised its discretion
in terms of
section
131(4)(b)
of the
Companies Act 71 of 2008
by liquidating the close
corporations instead of authorising the commencement of business
rescue proceedings. A return date of
9 October 2019 was ordered for
the confirmation of the provisional liquidation orders.
Jurisdiction
[7]
In
an interlocutory application heard together with the main
application, the Respondents prayed that the sequestration
proceedings
be removed to the Gauteng Division of the High Court of
South Africa, Pretoria. The application is premised on
section 27(1)
of the
Superior Courts Act 10 of 2013
that the two sequestration
applications be removed to the Gauteng Division, Pretoria to be
enrolled together with the three liquidation
applications on the
return day of the
rule nisi
that
have been issued in each such liquidation applications.
[8]
Section
27(1)
of the
Superior Courts Act, 2013
provides that
"27
Removal of
proceedings from one Division to another or from one seat to another
in same Division
(1)
If any proceedings have been
instituted in a Division or at a seat of a division, and it appears
to the Court that such proceedings
-
(a)
should have
been instituted in another Division or at another seat of that
Division; or
(b)
would be more conveniently or
more appropriately heard or determined-
(i)
at
another seat of that Division; or
(ii)
by
another Division, that Court may, upon application by any party
thereto
and after hearing all
other parties thereto, order such proceedings to be removed to that
other Division or seat, as the case may
be."
Section 149
of the
Insolvency Act
24 of 1936
deals with jurisdiction in sequestration matters and
provides as follows:
"149
Jurisdiction of
the Court.
(1)
The Court shall have jurisdiction
under this Act over every debtor and in regard to the estate of every
debtor who
-
(a)
on the date on which
a
petition for the acceptance of the
surrender or for the sequestration of his estate is lodged with the
Registrar of the Court, is
domiciled or owns or is entitled to
property within the jurisdiction of the Court, or
(b)
at any time within twelve months
immediately preceding the lodging of the petition ordinarily resided
or carried on business within
the jurisdiction of the Court:
provided that when it appears
to the Court equitable or convenient ..... that the estate of
a
person over whom
it has jurisdiction be sequestrated by another Court within the
Republic, the Court may refuse or postpone the
acceptance of the
surrender or the sequestration."
[9]
It
is common cause that the Respondent , the Trust and the liquidated
close corporations own or are entitled to immovable property
situated
within the jurisdiction of Limpopo Division of the High Court, to wit
Farm Alldays, Limpopo Province.
Furthermore the Respondent, the
Trust and the liquidated close corporations carried on business
within the jurisdiction of this
Court. This is irrespective of the
fact that, and for some unknown reasons, the business rescue
proceedings were instituted in
the Gauteng Division of the High
Court, Pretoria where the provisional liquidation orders were
ultimately made.
[10] On
the assumption that the assets in Respondent's personal estate and
also the assets of the Trust
form part of a single business unit, the
Respondent argued that a successful application for sequestration of
either of the estate
of the Trust or Respondent personal estate will
result
that the
property concerned will vest in the Master of High Court Limpopo and
will have to be administered in accordance with the
directives of the
said Master of the High Court, Pretoria. This, so the argument goes,
will simply cause confusion and is not convenient.
[11]
I disagree with the above assumption and
conclusion by the Respondent and for the following reasons:
11.1.
Respondent conducts business through the
Trust and the corporate entities within the area of jurisdiction of
the Limpopo Division
of the High Court;
11.2.
The Trust's assets, which comprise
mostly of immovable properties, are situated within the jurisdiction
area of this Court.
11.3.
It is convenient that the present two
applications be heard by this Court and not the Gauteng Division,
Pretoria.
[12]
In
Goode,
Durrant & Murray (SA) Ltd and Another v Lawrence
1961 SA 329
(WLD)
it was held that where, in an
application for the sequestration of a respondent's estate, there is
competition between the jurisdiction
of two Provinces, the question
of convenience is what happens after the order is granted, not which
Court hears the matter
See
also
Deutsche
Bank AG v Moser and Another 1999 (4) SA 216 (CPD) at 219H-H/I.
[13]
The Respondents' application for the
removal of these matters to Gauteng Division, Pretoria is accordingly
refused.
Respondents'
Indebtedness
[14]
The
Respondent, the Trust and the liquidated close corporations are
financially inter-dependent upon each other. The Applicant contends
that the Trust and the liquidated close corporations conducted
business as a single unit and that it is difficult to distinguish
between the interests of the different legal entities. The Respondent
in his capacity as the sole member of the liquidated close
corporations and a trustee of the Trust was in charge of, managed and
controlled a large game farming business under the name and
style of
lngogo Safaris.
[15]
The
Respondent, the Trust and the liquidated close corporations are
indebted to the Applicant as sureties and co-principal debtors
for
payment of an amount in excess of R 14 637 737.00. As at October 2016
the aggregate indebtedness was R 12 637 737.70 but that
amount
has increased to R 14 637 737.70 as at February 2018. The Respondent
conceded in paragraph 18 of his answering affidavit
that the
Applicant is the creditor of his estate. The Applicant is therefore
vested with the necessary
locus
standi
to bring the present
applications.
[16]
The
Respondent does not dispute his indebtedness to the Applicant. The
Respondent reneged on numerous promises and undertakings
to settle
his indebtedness. Accordingly, the Respondent is factually as well as
commercially insolvent and unable, to repay the
amounts owed to the
Applicant.
[17]
The
Respondent and the Trust relied in opposition of their sequestration
upon the applications for business rescue in respect of
the now
liquidated close corporations. All three applications for business
rescue failed and were dismissed. This has destroyed
all the grounds
of opposition raised by the Respondent and the Trust in respect of
their sequestration.
Respondents'
Insolvency
[18]
In opposition to the sequestration
applications, the Respondent and the Trust allege that the reasonable
market value of lngogo's
assets far exceeds his and the Trust's
liabilities and that he and the Trust are therefore not insolvent.
These allegations of
solvency are disproved by the fact that the
Respondent has been unable to pay the amounts due to the Applicant
for more than eighteen
months. Despite the Respondent's allegations
of solvency, he was and remains unable to realise any assets and use
the proceeds
thereof to settle the Applicant's debt.
[19]
Once the following requirements have
been established
prima facie
the
Court may grant a provisional sequestration order:
19.1.
That
the Applicant has established against the debtor / Trust a liquidated
claim for not less than R 100.00;
19.2.
That
the Respondent / Trust has committed an act of insolvency or his
insolvent; and
19.3.
That
there is reason to believe that it will be to the advantage of
creditors of the debtor if the debtor/ Trust's estate is
sequestrated.
[20]
In the case of
Stratford
and Other v Investec Bank Limited and Others
2015 (3) SA 1
(CC)
it
was authoritatively confirmed that:
"[43]. .. .. .the facts
put before the Court must satisfy it that there is
a
reasonable
prospect
-
not
necessarily
a
likelihood, but
a
prospect which is
not too remote
-
that
some
pecuniary benefit
will result to creditors. It is not necessary to prove that the
insolvent has any assets. Even if there are none
at all, but there
are reasons for thinking that
as
a
result of
enquiry under the [Insolvency] Act some may be revealed or recovered
for the benefit of creditors .
....
"
The concept of commercial
insolvency as a ground for sequestration or winding up postulates the
primary question whether or not
the Respondent's assets value exceeds
its liabilities, once the Court finds that it cannot settle its
concurrent debts.
See
ABSA Bank Limited v
Rhebokskloof (Pty) Ltd and Others
1993 (4) SA 436
(C) 440F - 441C.
[21]
The contention by the Respondent and the
Trust that they are solvent in as much as their assets exceed their
liabilities is neither
here nor there. It is trite that irrespective
of whether an act of insolvency is proved, the Court remains vested
with the discretion
to sequestrate a debtor's estate if satisfied
that the debtor is insolvent. In this regard the well-known words by
Innes CJ in
De Waard v Andrew &
Thienhaus
(1907) TS 727
at 733
is
of importance:
"Speaking for myself I
always look with great suspicion upon, and examine very narrowly, the
position of a debtor who says
"I am sorry but I cannot pay my
creditors, but my assets far exceed my liabilities". To my mind
the best proof of solvency
is that a man should pay his debts; and
therefore I always examine in a critical spirit the case of a man who
does not pay what
he owes".
[22]
In establishing the benefit to creditors
as provided for in
section 12(1)(c)
of the
Insolvency Act, 1936
a
Court need not be satisfied that there will be advantage to
creditors, only that there is reason to believe that will be same.
There need not always be immediate financial benefit. It is
sufficient if it be shown that investigation and enquiry under the
relevant provisions of the Act might unearth assets thereby
benefitting creditors. -
Dunlop Tyres
(Pty) Ltd v Brewitt
1999 (2) SA 580
(W) at 585 C.
In the matter of
Meskin and Co
v Fruitmen
1948 (2) SA 555
(W)
Roper J held that there should
only be a
"reasonable prospect, not necessarily
a
likelihood, but
a
prospect which is not too remote, that
some pecuniary benefit will result to creditors".
Conclusion
[23]
On
the conspectus of evidence before me, I am satisfied that the
Respondent and the Trust are insolvent or have committed an act
of
insolvency and that there is a reasonable prospect that some
pecuniary benefit will result to creditors. There is a substantial
estate in the form of immovable properties to sequestrate given the
fact that the Applicant, as the creditor, cannot obtain payment
of
its debts in the ordinary way. I believe that it will be to the
advantage of creditors that the Respondent's and the Trust's
estate
be sequestrated.
[24]
The
Respondent and the Trust are indebted to the Applicant in their
capacities as sureties and co-principal debtors. The Respondent
and
the Trust attempted to avoid sequestration by applying for business
rescue in respect of the liquidated close corporations.
That attempt
failed and the close corporations were ultimately liquidated.
[25]
The
following orders are granted:
CASE
NUMBER 4252/2017
1.
The
estate of the Respondent, JAN WALTER SLIPPERS (Identity Number [….])
is placed under provisional sequestration.
2.
The
Respondent and any other party who wishes to avoid such an order
being made final, are called upon to advance the reasons, if
any, why
the Court should not grant a final order of sequestration of the said
estate on 26 November 2019 at 10H00 or soon thereafter
as the matter
may be heard.
3.
The
costs reserved in terms of the Court order dated 15 December 2017
together with costs of 11 and 12 September 2019 shall be costs
in the
sequestration including the costs consequent upon the employment of
two Counsel.
CASE
NUMBER 4258/2017
1.
The estate of the WALTER SLIPPERS FAMILY
TRUST (Master's ref: IT3976/09) herein duly represented by the
Respondents in their capacity
as trustees for the time being of the
WALTER SLIPPERS FAMILY TRUST is placed under provisional
sequestration.
2.
The WALTER SLIPPERS FAMILY TRUST and any
other party who wishes to avoid such an order being made final, are
called upon to advance
the reasons, if any, why the Court should not
grant a final order of sequestration of the said estate on 26
November 2019 at 10H00
or soon thereafter as the matter may be heard.
3.
The costs reserved in terms of the Court
order dated 15 December 2017 together with costs of 11 and 12
September 2019 shall be costs
in the sequestration including the
costs consequent upon the employment of two Counsel.
EM MAKGOBA
JUDGE PRESIDENT OF THE
HIGH COURT, LIMPOPO
DIVISION, POLOKWANE
APPEARANCES
Heard
on
12 September 2019
Judgment
delivered on
20 September 2019
For
the Applicant
Adv. B H Swart SC
Adv. J P van den Berg
Instructed
by
Adams & Adams Attorneys
c/o Bosman Attorneys
For
the Respondents
Adv.M H Van Twisk
Instructed
by :
Machobane Kriel Attorneys
c/o Badenhorst Attorneys