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[2019] ZAGPPHC 36
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Odendaal v Nomoredebt Trust and Others (63675/2018) [2019] ZAGPPHC 36 (8 February 2019)
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Certain
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IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)
(1)
REPORTABLE
(2)
OF INTEREST TO OTHER JUDGES
(3)
REVISED.
CASE
NO:
63675/2018
8/2/2019
In the
matter between:
ESTER
ODENDAAL
(ID:
[….])
APPLICANT
and
NOMOREDEBT
TRUST
REGISTRATION
NUMBER: IT1934/11)
FIRST RESPONDENT
JACQUES
CILLIERS OOENOAAL N.O
(ID:
[….])
(IN
HIS CAPACITY AS TRUSTEE OF THE
NOMOREDEBT
TRUST)
SECOND RESPONDENT
ELRYN
FOUCHE N.O
(ID:
[….])
(IN
HER CAPACITY AS TRUSTEE OF THE
NOMOREDEBT
TRUST)
Third Respondent
JUDGMENT
STOOP
AJ
1.
This
is an application for the sequestration of the Nomoredebt Trust 'the
Trust') who is cited as the First Respondent. The Second
and Third
Respondents are the Trustees of the Trust. The Applicant does not
seek relief against the Second and Third Respondents
and she joined
them as Respondents for the sole purpose of notifying them of the
application.
2.
On
18 October 2018, the Applicant obtained a provisional sequestration
order against the Trust and the Applicant now seeks confirmation
of
that order. The application is unopposed.
3.
The
crisp question that arises in this matter is whether a sequestration
order may be grantee against a trust under circumstances
where the
sequestration order is not sought against the trustees in their
capacities as such rather against the Nomordebt Trust
which is the
registered name of the Trust.
4. In
terms of Section 9(1) of the Insolvency Act, Act 24 of 1936, a
creditor (or
his agent) may apply for the sequestration of a the
estate of the debtor. 'Debtor' is defined as follows in
section 2
of
the
Insolvency Act 24 of 1936
:
"'debtor', in connection with the sequestration of
the debtor's estate, means a person or a partnership or the estate of
a
person or a partnership which is a debtor in the usual sense of the
word, except a body corporate or a company or other association
of
persons which may be placed in liquidation under the law relating to
companies."
5.
The
question is not whether a Trust is a debtor in the usual sense of the
word. That question was answered by the Full Court in
Magnum
Financial Holdings (Pty) Ltd (in Liquidation) v Summerly and Another
NNO
1984 (1) SA 160
(W) at 1638-C
where it was held that a trust is "a debtor in the usual sense
of the word", and accordingly susceptible
of sequestration in
terms of the
Insolvency Act. In
that matter, the sequestration order
was sought against the sole trustees of the Summerly Family Trust and
the issue the Court
had to consider was whether a trust could be
sequestrated or rather be liquidated in terms of the Companies Act 61
of 1973. Nestadt
J followed the reasoning of MURRAY CJ (QUENET J
concurring) in
Ex parte Milton NO
1959 (3) SA 347
(SR) and held that it was competent for the Court to
accept the surrender as insolvent of an administrative trust created
by contract.
6.
In
Ex parte Milton NO
the
trustee of the Milton Children Trust applied for the voluntary
surrender of the estate of the trust. The Court held that even
if the
trust did not, strictly speaking, possess a distinct legal persona,
it fell within the definition of "debtor"
and could be
described as a debtor "in the usual sense of the word". It
could, through its trustee, borrow money and,
as the owner of
property, incur liability, inter alia, for rates and taxes. Creditors
could look to the trust property for satisfaction
of their claims and
it was impossible to secure a concursus creditorum by sequestrating
the estate of either the donor or the beneficiaries
or the personal
estate of the trustee.
7.
In
the present application, the Applicant does not seek the
sequestration of the trustees in their capacities as such. What is
sought, is a sequestration order against the Nomoredebt Trust which
is the name given to the Trust.
In BOE Bank Ltd (formerly NBS
Boland Bank Ltd) v Trustees, Knox Property Trust
[1999]
1 All SA 425
(D), McCall J stated as follows (at 434h - i):
'However, whatever its true legal nature may be, both
our common law and our legislation have recognised the existence of
an arrangement
whereby assets and liabilities are vested in a trustee
or in trustees. This arrangement is, in everyday parlance referred to
as
a trust and individual trusts are often given a name in the deed
conferring the trust property, and the powers to administer it,
on
the trustee or trustees.'
8.
In
BOE Bank
the court
had to determine whether the principal debtor, for which a defendant
had bound himself as surety, was sufficiently identified
when
referred to as a trust. That question was answered in the affirmative
as follows (at 436f - g):
'It may well be that it would have been more correct to
describe the principal debtor as the named Trustees, in their
capacity as
Trustees of the Trust or as the Trustees for the time
being of the Trust. Certainly, as appears from Rosner's case . . .
where
there is litigation against a trust, the trustees in their
representative capacity and not the trust, as such ought to be cited.
That however, is not the end of the matter because it is clear that .
. . the identity of the creditor, the surety and the principal
debtor
must be capable of ascertainment by reference to the provisions of
the Deed of Trust, extrinsic evidence . . . .'
9. BOE
Bank
was expressly approved by
the Supreme Court of Appeal in
Standard Bank of South Africa
Ltd v Swanepoel
NO
2015
(5) SA 77
(SCA).
10.
The
reference to Rosner's case in
BOE Bank,
is a reference to
Rossner v Lydia Swanepoel Trust
1998
(2) SA 127
(W). In that matter, Goldstein J (with whom Malan J
agreed), referred to
Mariola and Others v Kaye-Eddie NO and
Others
1995 (2) SA 728
(W) at
731C-F where the following was stated:
·’a trust is not a
legal persona
but
a legal institution,
sui generis.
The assets and liabilities
of a trust vest in the trustee or trustees. The trustee is the owner
of the trust property for purposes
of administration of the trust,
but
qua
trustee he has no beneficial interest therein....
Unless one of the trustees is authorised by the remaining trustee or
trustees,
all the trustees must be joined in suing and all must be
joined when action is instituted against a trust. ... In legal
proceedings
trustees must act
nomine officii
and cannot act in
their private capacities.'
11.
In
my view, the above also apply in the case of the sequestration of a
trust. Where a trust is sequestrated, the debtor in the usual
sense
of the word is the trust, duly represented by the trustee(s) who
ought to be cited in his/her/their capacity(ies) as such
(also see
Gross and Others v Pentz
[1996] ZASCA 78
;
1996
(4) SA 617
(A) at 625F-G).
12.
In
the
Rosner
-case, the Court
held that the citation of a trust which is not a persona, may be
amended to reflect the trustee. In the present
matter, the Applicant
did not seek to correct the wrong citation of the Trust. Had she done
so, the outcome of this application
might very well have been been
successful.
13.
Applicant
is not entitled to final relief as a result. The provisional order is
discharged. No order is made as to costs.
ORDER:
The provisional sequestration order is discharged. No
order is made as to costs.
BC
STOOP AJ
Acting
Judge of the High Court
Gauteng Division, Pretoria
Date of
Hearing: 12 December 2018
APPEARANCES:
For the
Applicant:
Adv R P Loibner
Instructed
by:
HERMAN ESTERHUIZEN SMALMAN ATTORNEYS
Pretoria