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[2019] ZAGPPHC 235
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SA Retail Properties (Pty) Ltd v Englezakis (66282/18) [2019] ZAGPPHC 235 (20 June 2019)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
(1)
REPORTABLE:
YES
/ NO
(2)
OF
INTEREST TO OTHER JUDGES:
YES
/NO
(3)
REVISED.
Case
No: 66282/18
20/6/2019
In
the matter between:
SA
RETAIL PROPERTIES (PTY) LTD
APPLICANT
and
NICOLA
ENGLEZAKIS
RESPONDENT
JUDGMENT
G
JACOBS (AJ)
[1]
In this Application the Applicant seeks an order:
“
That the estate of
the Respondent is placed under provisional sequestration.”
[2]
The Respondent is further called upon to advance reasons on a return
date
(which have
since passed, as this Application was opposed by the Respondent)
why the Court should not order the final sequestration
of his estate.
[3]
The Respondent opposed the Application and also moved that certain
allegations in
the Founding Affidavit be struck on the grounds of
hearsay. I will deal with the the
Respondent’s
opposition to the relief the Applicant seeks,
infra
.
[4]
Respondent did not file Heads of Argument and a Practice Note, in
accordance
with the Practice Directive of this Court.
The Application was duly set down by
the
Applicant on the opposed roll for the week of 3 June 2019 and was
allocated (in the week preceding 3 June 2019) for argument on
4 June
2019. On 4 June 2019 Counsel on behalf of the
Respondent, Advocate T Lipshitz requested the
Court to accept a Practice Note and Heads of Argument from the bar.
In order to
avoid a
further delay in the hearing of the matter I asked Advocate GT
Avvakoumides, who appeared on behalf of the Applicant, if he had any
objection.
No objection was raised and I
stood the matter down to be argued on 5 June
2019 and for me to consider the Heads of Argument filed on behalf of
Respondent. As a result
of the
aforesaid, the Respondent is liable for the wasted
costs of 4 June 2019,
notwithstanding the outcome of this
Application.
[5]
The Application to strike was not persisted with neither in the Heads
of Argument
nor in Argument before this Court.
[6]
The Applicant’s
locus
standi
to bring the Application is based on a “Deed of
Settlement, Acknowledgement
of Debt, and Court Order”,
incorporated in a Court
Order by Prinsloo J,
on 6 June 2017 (hereinafter the “June 2019
Order”).
[7]
The relevant part of the June 2017 Order, for purpose of this
Application reads as
follows:
“
2.
On the Applicant’s
version, the Respondents are indebted to the Applicant in the sum of
R2 187 548.27
…
[not
relevant] …
in
accordance with the attached
annexure marked Annexure “A”.
3.
The Respondents will
within 30 days, provide the Applicant with their calculations of
arrears due and owing by the First Respondent
in order that the
quantum thereof be agreed within the aforementioned 30 day period.
4.
Should the Respondents
fail to do so within the aforementioned period of 30
days, then
it shall be accepted by the parties that the quantum is as
set out in Annexure “A” hereto.”
[8]
The June 2017 Order, in paragraph 5 and 6 thereof, undertook to make
certain
interim payments, in liquidation of the First
Respondent’s (in that Application)
indebtedness to the Applicant, and payment of future rental on due
date. The current Respondent
was
the Second Respondent in that Application. These
paragraphs (5 and 6) were the subject of an urgent application
on 9
March 2018 (Case
No.: 57082/2016) before Tuchten J and is also the subject
of a
pending action in Case No.: 38530/17 in this Court.
[9]
In the pending action in Case No.: 38530/17, the indebtedness, as
acknowledged by
the Respondent and set out in paragraph 11
supra
,
is not challenged, nor has that order (the
June 2017 Order) been varied or rescinded. Even if certain
payments (as Respondent alleges) should have been allocated to the
amount of R2 187 548.27, the
Applicant has shown
on the papers that the Respondent is
indebted to the Applicant, as provided for in
Section 9(1) of the
Insolvency Act (Act 24 of 1936). In this regard see: (as to a
disputed claim)
Braithwaite
v Gilbert (Volkskas Bpk Intervening)
1984 (4) SA
717
(W)
.
Therefore, the Applicant has the necessary
locus
standi
to ask for the relief it seeks.
[10]
The Applicant further has to either:
10.1
Show that the Respondent is insolvent; or
10.2
Show that the Respondent has committed an act of insolvency as
defined
in Section 8 of the
Insolvency Act.
[11]
In my view the Respondent, in the Opposing Affidavit, by (and
referring to paragraph 14 of the
Founding Affidavit) not dealing with
the alleged indebtedness to the Applicant (and
other creditors) and stating:
“
43.
The total alleged liability on the Applicant’s papers amounting
to R10 149
062.89 …
and
44.
The Applicant has reflected no value in my sequestration.”
Admitted that he is
actually insolvent. Therefore, the debate as to whether Applicant
has complied with Section 10(b) of the Insolvency
Act should stop
here.
[12]
In the event that I am wrong in the fining that Respondent is
insolvent, (or admitted that he
at least by implication admitted
same) I am of the view that
Respondent did commit an act
of insolvency, as envisaged in Section
8(b) of the Act. The reasons therefore, the following:
12.1
The alleged hearsay argument have been abandoned.
12.2
The fact that Applicant relies on a
nulla
bona
return of another creditor is
of no consequence. See:
Abel
v Strauss
1973 (2) SA 611(W)
at 612 and
613
.
See further:
Kerbell
v Chames
1925 WLD 72
at 75
.
12.3
The allegation of the Respondent that the
nulla
bona
return reflects an
address other than the Respondent’s
place of residence or his place of
business, also does not assist the Respondent. See:
Beira
v Raphaely-
Weiner and Others 1997(4) SA 332 (SCA) at 338
.
12.4
The Sheriff’s allegations in the return of
nulla
bona
is
prima facie proof of
the allegations
therein. See:
Van
Vuuren v Jansen
1977 (3) SA 1062
(T)
and De Wet v Le Riche
2000 (3) SA 1118
(T)
.
[13]
Therefore, the Applicant has, in my view, complied with Section 10(b)
of the
Insolvency
Act.
[14]
The last question that remains is whether the Applicant has shown
that there is a reason to
believe that it will be to the advantage
of Respondent’s creditors if his estate is sequestrated
(See Section 10 (c)
of the Insolvency Act).
[15]
In this regard the Applicant has to show at the stage when it seeks
the
provisional sequestration of
the Respondent, prima facie that there is reason to
believe that it (the sequestration)
will be to the advantage of
creditors. See:
Amod
v Khan 1947(2) SA 432 (N) at 437
as well as
Nescum
& Co. v Freedman
1948 (2) SA 555
(W) at 558
.
[16]
The words, “reason to believe” was dealt with in
Commissioner,
SARS v Hawker
Aviation Partnerships and Others
[2006] ZASCA 51
;
2006 (4) SA 292
(SCA)
at
paragraph
[29]
…
“
The answer
seems to lie in those decisions that have held that a court need not
to be satisfied that there will be an advantage
to creditors in the
sense of immediate financial benefit. The court need be satisfied
only that there is reason to believe
– not necessarily a
likelihood, but a prospect not too remote – that as a
result of investigation and inquiry
assets might be unearthed that
will benefit creditors.”
[17]
In the present case it is undisputed:
17.1
That there is a trust “Nicola Englezakis Trust (IT14302/06)
(hereinafter “the
Trust”) who
owns an immovable property at 33 Peacanwood Estate,
Hartbeespoort. The Respondent is a Trustee of
the Trust as alleged by
himself, in “Annexure “N” to his Replying
Affidavit. This house (33
Peacanwood) is not where the
Respondent allege he resides (24 Fairway View, Peacanwood). The
latter is his personal property (See
paragraph 17.2
infra
).
17.2
The Respondent is the owner of two immovable properties, Erf 687
Bryanston and Erf 426
Peacanwood Extension 7. (See paragraph 7.1 of
the Founding Affidavit read with Annexure “K” thereto).
This allegation
is met with the following reply (see paragraph
37 and 38 of the Opposing Affidavit – replying to
paragraph
6.10 to 7.6, 9, 10 and 13 of the Founding Affidavit):
“
37.
The allegations contained in these paragraphs are not pertinent to
this matter and we
dealt with above,
[nothing was said with
regards to the properties]
38.
Ms Koning and the Applicant have no personal knowledge of the
dealings between Hyprop, NFGR
and I. This evidence amounts to
hearsay.”
[my comment]
As the hearsay allegation
was not persisted with this does not dispute the
factual allegation made by
the Applicant. Respondent further admits that
he has two outstanding bonds. (See paragraph 42.1 of the Answering
Affidavit and Annexure “NE7” thereto).
17.3
The Respondent is a businessman and Director of at least Coalmans
Steak Ranch (PTY) Ltd and NFGR Investments (Pty) Ltd.
[18]
The Respondent does not deal with his financial position at all. The
values of the properties
in his name is not disclosed. His interest
in the business and the Trust
are not disclosed,
nor does he even attempt to take the Court in his
confidence and set out his financial
position.
From this a negative inference can and should
be drawn.
[19]
The Western Cape High Court in an unreported judgment
[Bozalek
J], 9 October 2013 in Vincemus Finance (Pty) Ltd t/a Kempston
Finance v DH Kaye and B Kaye (Case No.: 20498/2012)
dealt with how the Court should approach the question of
benefit to creditors,
inter
alia
where Trusts are involved.
[20]
Taking into account all the facts of the present case and applying
the principles
set out above, I am of the view that the
Applicant satisfied this Court that
prima
facie
there
is a reason to believe that there will be advantage to creditors, if
the estate of the Respondent is sequestrated.
[21]
This leaves only the question of costs and the return date for the
provisional
order. A new
return date has been obtained by Counsel on behalf of the
Applicant and included
in a draft order handed to me. The costs, of
the Application, in my view, should be costs in
the sequestration,
both appearances on 4 and 5 June 2019 inclusive.
[22]
In the premises, the following is ordered:
22.1
The Respondent’s estate is provisionally sequestrated and
placed in the
hands of the Master of the
High Court.
22.2 A
rule
nisi
is
hereby issued, returnable on 17 September 2019 at 10h00 or
as soon
thereafter as Counsel may be heard, calling upon the Respondent
to advance reasons, if any, why the Court should not order final
sequestration of the said estate.
22.3 A
copy of this order shall be served upon the Master of the High Court,
the
South African
Revenue Services and shall be advertised once in the
Government Gazette and once in the Pretoria News.
22.4
Costs of the Application shall be costs in the sequestration. These
costs
shall include the costs of the
appearances on 4 and 5 June 2019.
G JACOBS
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
APPEARANCES:
For the plaintiff:
Adv GT Avvakoumides (SC)
Instructed by Mark
Efstratio Attorneys
PRETORIA
For the defendant:
Adv T Lipshitz
Instructed by
Manong Badenhorst Attorneys
JOHANNESBURG