About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: High Court, Northern Cape Division, Kimberley
SAFLII
>>
Databases
>>
South Africa: High Court, Northern Cape Division, Kimberley
>>
2018
>>
[2018] ZANCHC 49
|
|
Hohne v Hohne and Another (603/2017) [2018] ZANCHC 49 (8 June 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
NORTHERN
CAPE DIVISION, KIMBERLEY
CASE
NO: 603/2017
Heard
on: 9 March 2018
Delivered
on: 8 June 2018
NOT
REPORTABLE
NOT
REPORTABLE TO OTHER JUDGES
In
the matter between:
BARRY
LONSDALE HOHNE
APPLICANT
and
DALE
LONSDALE HONHE
RESPONDENT
and
SUPERSTONE
MINING (PTY)
LTD
INTERVENING CREDITOR
JUDGMENT
VUMA,
AJ
INTRODUCTION
[1]
The applicant seeks the provisional sequestration of the estate
of
the respondent alleging that,
prima facie:
1.1
the applicant has a liquidated claim against the respondent, as
contemplated in section 9(1) of the Insolvency
Act 24 of 1936 ("the
Act");
1.2
the respondent has committed an act of insolvency within the meaning
of section 8(g) of the Act and, furthermore,
is in fact, insolvent;
and
1.3
there is reason to believe that it will be to the advantage of
creditors if the respondent's estate is sequestrated.
[2]
The applicant therefore contends that he has satisfied the
requirements
of section 10 of the Act for obtaining a provisional
order for the sequestration of the respondent.
[3]
The respondent does not oppose this application. However, the
intervening
creditor places every issue raised by the applicant in
dispute and seeks an order of dismissal of the application, including
an
order of costs and that the costs of the application to intervene
in these proceedings be paid by the applicant.
[4]
The intervening creditor opposes the application on the following
grounds:
4.1
the application has not been brought with the genuine intention to
seek the sequestration of the estate of
the respondent, but rather
for an ulterior motive, subtly suggesting that there is collusion
between the respondent and the applicant
to achieve the sequestration
of the estate of the respondent to the detriment of the intervening
creditor;
4.2
the applicant has not succeeded in "proving" an advantage
to the creditors of the respondent
if his estate is sequestrated; and
4.3
the act of insolvency relied upon by the applicant was not given at
arm's length and/ or was not given formally,
deliberately and with
the required intention, but is rather indicative of collusion between
the applicant and the respondent.
[5]
The respondent allegedly admitted his liability to the intervening
creditor.
FACTUAL
BACKGROUND
[6]
During the period between February 2009 until January 2010
the
respondent was employed by the intervening creditor, whose manager
was at that time the applicant. After obtaining courses
in evaluating
quality diamonds, he was appointed as the Recovery Manager of the
intervening creditor, at which stage he earned
approximately R45
000-00 per month.
[7]
In 2010 the respondent, upon being accused by the intervening
creditor
of stealing diamonds to the value of
R6, 015, 000-00
(calculated as at 9 March 2018), allegedly admitted in writing to
the alleged theft, which admission he allegedly repeated to the
SAPS.
Subsequent thereto, the respondent was dismissed and the applicant
resigned almost a year thereafter and went to be employed
as a Plant
Manager of Superkolong Holdings for almost 30 months and then as a
Managing Director at Mogale Resources (Pty) Ltd ("Mogale").
The respondent was employed on a contract basis and as a consultant
by Mogale. In September 2016 Mogale was closed due financial
considerations.
[8]
It is not in dispute that the respondent's current indebtedness
to
the intervening creditor, with the accrued interest calculated, is an
additional amount of
R7 993 439-13.
[9]
On December 2011 the Intervening Creditor caused an urgent
anti-dissipation application to be issued and served on the
respondent.
[10]
In January 2012 the intervening creditor instituted damages action
against
the respondent. The respondent defended the action and denied
the liability, which denial led to a protracted litigation at high
legal costs. At the conclusion of the said trial, judgment was
granted against the respondent. The respondent prosecuted an
unsuccessful
appeal against the intervening creditor in the Supreme
Court of Appeal ("SCA") which was dismissed on 30 November
2016.
[11]
The applicant claims that was funding the respondent's legal
expenses
of almost R1 6000 000-00 whilst the respondent was fighting the
intervening creditor's action. The applicant alleges that
the first
advance of money to the respondent towards the latter's legal fees
was made on 27 November 2012.
[12]
Upon the conclusion of the litigation after the SCA's dismissal
of
the respondent's leave to appeal, the Intervening Creditor took its
first step to execute on its judgment.
[13]
On 1 February 2017 the Intervening Creditor's attorney addressed
a
letter to the respondent's attorney in which payment was demanded to
the Intervening Creditor's attorney of the insurance money
which was
paid out to the respondent's attorney after a motor vehicle , which
was listed included as a listed asset in the anti-dissipation
order,
had been written off.
[14]
On 4 February 2017 the applicant sent a letter of demand to
the
respondent for payment of a loan in the amount of R1 629 578-00, to
which the respondent replied on 17 February 2017 stating
that he was
not in a financial position to make payment of the amount claimed nor
to make an offer.
[15]
On 17 March 2017 the respondent was served with this sequestration
application, in terms of which the applicant moved for the
provisional sequestration of the farmer's estate.
[16]
On 8 August 2017 the intervening creditor issued an application for
leave
to intervene in the sequestration application, which was
granted on 22 September 2017.
[17]
Having been granted leave to intervene, the intervening creditor
served and filed its answering affidavit on 24 October 2017 in
opposition to the application
in casu.
[18]
In his founding affidavit, the applicant alleges that the
order he
seeks for the sequestration of the respondent's estate is borne out
of the following facts:
18.1
In January 2012 the Intervening Creditor served summons upon the
respondent for the payment of monies arising
out of the diamonds
allegedly stolen by the respondent.
18.2
The applicant and the respondent then entered into an oral agreement
in the following terms:
16.8.1
The applicant would loan to the respondent the necessary funds to
defend the matter.
16.8.2
The monies loaned and advanced in respect of the costs of the defence
of the respondent, would
become due and payable after the trial was
finalised and on demand by the applicant.
18.3
The trial thereof lasted approximately thirty days and was extremely
expensive. On 15 May 2015,
judgment was granted in favour of the
intervening creditor in the amount of R6 015 000-00 as well as
interest and costs.
18.4
The trial court granted the respondent leave to appeal to the Supreme
Court of Appeal (SCA), which appeal
was dismissed on 30 November
2016.
18.5
Once the matter was finalised, on 14 February 2017 the respondent
then demanded in writing from
the respondent payment in the amount of
R1 629 578-00 which he had paid in respect of the defence of the
respondent.
18.6
Peripheral to the parties' oral agreement appearing in 15.2 above,
they had also agreed to open
a bank account in which the applicant
paid monies in on a monthly basis so as to provide for the payment of
the debit orders from
which the respondent's debit orders for,
inter
alia,
bond repayments, insurance, had been paid. In addition
hereto, the respondent was remunerated on a monthly basis for the
services
he rendered that particular month, which remuneration varied
from approximately R20 000-00.
18.7
The applicant further alleges that the net value of the respondent's
assets is approximately
R2 334 171-05 and that since the amount
payable to the intervening creditor will be in excess off R7 million
and to the applicant
an amount of R1 629 578-00, that such amounts
leave the respondent's estate hopelessly insolvent.
SUBMISSION
BY THE APPLICANT
[19]
The applicant further submits the following:
19.1
that the respondent is indebted to him in the amount of approximately
R1.6 million;
19.2
that the respondent has committed an Act of insolvency as
contemplated in section 8(g) of the Act;
19.3
that the respondent is, in fact, insolvent;
19.4
that it would be to the advantage of his creditors if his estate is
sequestrated; and
19.5
that he has satisfied the requirements of section 1O of the Act and
is as such entitled to the order prayed for.
[20]
Regarding the intervening creditor's contention that the applicant
and the respondent are colluding
in respect of this application, it
is submitted on behalf of the applicant that a friendly sequestration
is not, without more,
collusive. He further contends that since such
a finding amounts to a legal conclusion, then a person making such an
allegation,
in this case the intervening creditor, bears the
substantive onus of proving the facts from which the conclusion can
be derived.
He adds that the intervening creditor must therefore
further prove, on a preponderance of probability, the existence of a
donation
he alleges. The applicant further submits that the
intervening creditor's allegations of collusion are completely
unsubstantiated,
as the latter has failed to allege and to establish
the existence of any agreement between the applicant and the
respondent,
inter alia,
suppress facts with a view to mislead
this court. The applicant submits that there is simply no evidence
which can lead to a conclusion
of collusion.
SUBMISSIONS
ON BEHALF OF THE INTERVENING CREDITOR
[21]
The intervening creditor contends that but for steps it had taken in
execution of the judgment against the respondent, the applicant would
not have instituted this sequestration application.
[22]
Furthermore, it contends that regarding the issue of benefit to the
creditors,
the applicant has failed to discharge the burden of
providing reasons, with sufficient substance, for the court to come
to the
conclusion that the sequestration of the respondent's estate
will be to the benefit of creditors.
[23]
It further contends that the circumstances prevailing before and at
the
time of the application, for example, the applicant's deafening
silence regarding a demand for the repayment of the alleged loan,
show on a balance of probabilities, that the applicant never expected
the alleged loan advanced to fund the respondent's legal
expenses, to
be repaid but that it was rather a donation and/or gratuitous
payment. It submits that thus the applicant cannot be
regarded as a
creditor of the respondent.
[24]
As stated above, the intervening creditor further submits
that the
circumstances further indicate, on the balance of probabilities, that
the applicant and respondent colluded in moving
this application.
[25]
It is further contended that the evidence presented to the
court to
prove an advantage to creditors falls short of the required proof
and/or is inadmissible. The intervening creditor submits
that the
most useful tool to determine same is to compare the forced sale
value of the debtor's assets with his liabilities and
to then
calculate, whether out of the free residue, there is a reasonable
prospect of a not negligible dividend, which prospect
must not be too
remote. It submits that the debtor's forced value
re
his
assets must be proved by cogent, admissible expert evidence. It
further submits that sections 9 provisions are peremptory and
that
without any explanation as to the compliance therewith, the court
cannot condone same since it constitutes a defect and
I
or an
irregularity.
[26]
The intervening creditor further submits that to the extent that the
applicant
alleges that Mogale was the vehicle through which the
respondent's legal costs were paid since the latter had in fact
loaned the
applicant the said amount for purposes of loaning the
respondent, the applicant has failed to prove that it has
locus
standi
to demand the payment of the loan from the respondent
since there is no evidence that the applicant did repay Mogale the
alleged
loaned money. The intervening creditor submits that the
applicant therefore does not have the requisite
locus standi
to
approach the court for the relief sought.
[27]
Lastly the intervening creditor submits that the applicant has failed
to comply with the peremptory section 9 provisions of the Act (the
provisions of which appear in paragraph 25.3 below) and that
this
application stands to be dismissed with costs on a punitive scale.
ISSUES
[28]
Based on the above, this court is called upon to make a determination
in respect of the following issues, namely:
28.1
Whether the applicant has made out a
prima facie
case for the
relief sought.
28.2
Whether the applicant has proved that it has a claim against the
respondent in terms of the provisions of
section 9(1) of the Act;
28.3
Whether the applicant and the respondent colluded to obtain an order
as sought
per
the Notice of Motion.
28.4
Whether the applicant has shown an advantage to creditors in the
event of the respondent's estate being sequestrated.
28.5Whether
the applicant has met the peremptory requirements of the Act.
LEGAL
PRINCIPLES
[29]
In terms of section of the Act a debtor.
inter alia,
commits
an act of insolvency if he:
29.1
makes or attempts to make any disposition of any of his property
which has or would have the effect
of prejudicing his creditors or of
preferring one creditor above another (section 8(c); and
29.2
gives notice in writing to anyone of his creditors that he is unable
to pay any of his debts (section 8(g)).
29.3
Section 9(1) read with section 9(3)(a)(iii) provides that the
applicant must set out in his founding
affidavit that he is a
creditor having a liquidated claim for not less than R100-00, and the
amount, cause and nature of the claim.
[30]
In respect of an act of insolvency envisaged in section 8(c) of the
Act, Meskin
- Insolvency Law, summarizes the position as follows:
30.1
the statutory provision creates two acts of insolvency: the first is
the actual disposition by the debtor of any
of his property, which
has the effect either of prejudicing his creditors or by preferring
one of them above another; and the second
is an attempted disposition
of any of his property by the debtor, which, had it been
accomplished, would have had such effect;
30.2
the intention with which the disposition was made or was attempted to
be made is immateria:l the act of insolvency is committed
where,
objectively judged, the facts show an actual or attempted disposition
of the property and the result or consequence thereof
was, or would
have been, the prejudice or preference, which the statutory
provisions envisage;
30.3
the relevant statutory provisions do not qualify the word
"prejudicing" and, thus, the act of insolvency is committed
whatever form the prejudice to the creditors may take.
[31]
In terms of section 8(g) of the Act, an act of insolvency is
committed
regardless of the motive for which it was given.
[32]
In terms of section 10 of the Act, a court may make an order
sequestrating
the estate of a debtor provisionally if it is of the
opinion that,
prima facie:
32.1
the applicant for a provisional of sequestration has established
against the debtor a claim as is mentioned in section
9(1) and
section 1O(a) of the Act;
32.2
the debtor has committed an act of insolvency or is insolvent
(section 10(b); and
32.3
there is reason to believe that it will be to the advantage of
creditors of the debtor if his estate is sequestrated (section
10(c)).
CASE
LAW
[33]
In
Sevan v Sevan and Ward
1908
TH 193
at 197,
Curlewis J described collusion as follows:
"In
our law, ordinarily speaking, collusion is akin to connivance, and
means an agreement or mutual understanding between the
parties that
the one shall commit or pretend to commit an act in order that the
other may obtain a remedy at law as for a real
injury."
And
In
Kuhn v Karp
1948 (4) SA 825
(T) at 827, Roper J
stated the following:
"In
my view collusion consists in our law in an agreement between the
parties to refute or to suppress facts, or to put false
evidence
before the court, or to manufacture evidence, in order to make it
appear to the court that one of the parties has a cause
of action, or
a ground of defence, which in fact he has not." (see;;
Huntrex
337 (Pty) Ltd v Vosloo and Another
2014 (1) SA 227
GNP.
[34]
Also, in the matter of
Kuhn v Kuhn
1948 (4) SA 825
(T) at 827,
collusion was defined as follows:
"In
my view collusion consists in our law in an agreement between parties
to a suit to suppress facts, or to falsify evidence
before the Court,
or to manufacture evidence, in order to make it appear to the court
that one of the parties has a cause of action,
or a ground of
defence, when in fact he has not".
[35]
With regard to the statutory requirement that there must be reason to
believe,
prima
facie,
that it will be to the advantage of creditors of the
debtor if his estate is sequestrated, in
Meskin
&
Co v Friedman
1948 (1) SA 555
01'1) at 559
it was held that
"the
facts 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. The
abovementioned passage was cited with approval
by the Constitutional
Court in
Stratford and Others v Investec Bank Ltd and Others
2015 (3) SA 1
CC.
[36]
The Constitutional Court held further that:
"The
correct approach in evaluating advantage to creditors is for a court
to exercise its discretion guided by the
dicta
in
Friedman.
For example, it is up to a court to assess whether the
sequestration will result in some payment to the creditors as a body;
that
there is a substantial estate from which the creditors cannot
get payment, except through sequestration; or that some pecuniary
benefit will result to the creditors".
[37]
In the matter of
Beinash
&
Co v Nathan
(Standard Bank of South Africa Limited intervening)
1998 (3)
SA 540
01'1) where at paragraph 542 thereof the court cited a passage
from
Venson
&
Co v Garlick
1926 WLD 53
at 57, the following was held:
"Now
a friendly creditor, seeing other creditors pressing the debtor and,
in that way, obtaining payment of the debts in installments,
may
think it desirable to sequestrate the estate of the debtor; the fact
that one of his motives in doing so may be to assist the
debtor does
not necessarily prove that the application is collusive. If he makes
the application not only with that object but
also with the object of
coming in and sharing
pro rata
in any dividends which may be
obtained by means of sequestration, I do not think that an
application of that kind could be described
as collusive.
[38]
With regard to friendly sequestrations, the Intervening creditor
makes
reference to the description made by Conradie J in the matter
of
Craggs v Dedekind; Baartman v Baartman & Another : Van
Jaarsveld v Roebuck: Van Aard v Borrett
1996 (1) SA 935
(C)
at B where he held the following:
"Friendly
sequestrations seem to have certain characteristics. Although,
like pornography, they may be hard to define,
they are easy to
recognize. The debt... is almost always a loan... very often made in
circumstances where it would have been apparent
to the whole world
that the Respondent was in serious financial difficulty. Despite
this, the loan is customarily made without
security of any sort. It
is seldom evidenced by a written agreement, or even subsequently
recorded in writing. The only writing
that is produced to the Court
is the letter stating, with appropriate expressions of dismay that
the debt cannot be repaid... .Very
often debtor and creditor are
related: fathers commonly sequestrate sons, ...., without, I am sure,
any damaging effect on their
relationship."
[39]
The intervening creditor further makes reference to the matter of
Mthimkulu v Rampersad and Another (BOE Bank Ltd, Intervening
creditor)
[2000] 3 All SA 512
(N)
at 514 where the following was held:
"The
majority of [friendly sequestration] applications are sparked off by
the imminent sale of the respondent's property by
the Bank. The
respondent hurries off to an attorney... and is briefed on the
requirements of a friendly sequestration. He duly
finds a 'creditor'
to whom he is purportedly indebted by virtue of an unsecured
loan....He then supposedly writes a letter to his
'creditor' ... An
application for the sequestration of the debtor is then drafted in
which the friendly creditor makes the necessary
allegations and in
particular expresses his concern for the interest of the body of
creditors....A value of the property on the
open market is then given
and duly supported by a valuer....the debtor waits for the dust to
settle and with his old creditors
off his back carries on business as
normal".
[40]
To the above end, the intervening creditor submits that the court
should adopt the approach in
the matter of
Epstein v Epstein
1987 (4) SA 606
(C) at 611 where it was held that the courts
should scrutinize friendly sequestration applications with particular
care to ensure
that the requirements of the Act are complied with and
that the interests of the creditors are protected and not prejudiced.
ANALYSIS
[41]
The following is common, that:
41.1
The applicant and the respondent are father and son;
41.2
The applicant concedes that this application is indeed a friendly
sequestration.
41.3
Presently, the respondent's estate, estimated by the applicant being
to the value of almost R3 million, is under
attachment at the
instance of the intervening creditor.
[42]
As already stated above, a court to which an application for the
provisional sequestration
of a debtor's estate is presented, may only
grant such an order if it is of the opinion that,
prima facie,
inter alia,
the applicant has established against the respondent
a claim such as is mentioned in section 9(1) of the Act.
[43]
I am of the view that the starting point in approaching the
determination of this application,
is to interrogate the question
which I find to be the most pertinent and key, namely: do the facts
prove that the applicant has
a claim against the respondent. I am of
the further view that in the event this question is answered in the
negative, then every
other question becomes moot. This question must
be juxtaposed against the intervening creditor's contention that the
moneys paid
on behalf of the respondent were never intended to be a
loan but a donation and that the alleged acts of insolvency committed
by
the respondent towards the applicant are just a smoke screen to
frustrate the intervening creditor to execute on the judgment
obtained
against the respondent. As stated above, it is common cause
that the applicant has conceded that indeed this is a friendly
sequestration.
[44]
It is further common cause that the applicant and the respondent did
not formalise
their transaction as it would normally be the case in
the ordinary course of conducting business of this nature, for
example, reducing
the agreement to writing, securing the said loan,
etc.
To the extent that despite the applicant fully knowing
the respondent's financial situation, he did ensure that the loan was
at
least secured, no explanation was proffered by the applicant.
Neither does the applicant explain the respondent's ability to repay
the loan, the anticipated source of the repayment and also the basis
for any confidence that it is a safe risk. Neither does the
applicant
disclose any previous successful financial transaction, if any,
between the parties which could have allayed his fears
to "loan"
the respondent the money.
[45]
In addition to the Authority cited above, Satchwell J also described
in
Huntrex 337 (Pty) Ltd v Vosloo
and Another
2014 (1) SA 227
GNP, the hallmarks of collusive friendly sequestration applications
as where the borrower frequently finds himself in dire financial
straits shortly after the loan was extended and then, with surprising
haste, advises the lender of his unexpected insolvency. The
borrower,
horrified at his own abject financial situation, immediately writes a
letter advising the lender of his inability to
repay the loan.
Therein is stated a bare inability to pay, no requests for extension
of time, no proposals to pay in installments,
no offer to render
services or even a suggestion that the lender initiates another
course of action. (Paraphrase)
[46]
Now taking into account all of the above, including the parties'
submissions, can it be found
that on the balance of probabilities the
applicant has make out a
prima facie
case entitling to the
relief he seeks. Curtly, did the applicant prove that he has a claim
against the respondent?
[47]
It is common cause that a court to which an application for the
provisional sequestration of
a debtor's estate is presented, may only
grant such an order if it is of the opinion that,
prima facie,
the
requirements set out in section 10 of the Act has been met. However,
in an instance where the applicant's averments in the founding
papers
are challenged, a litigant who bears the onus, has to provide proof
sufficient enough to avoid a decree of absolution. Where
an
applicant's case is challenged as to whether a litigant has provided
prima facie
proof, the courts' approach is not to consider the
applicant's evidence in isolation, but by also considering evidence
adduced in
opposition thereof (see
Kalil v Decotex (Pty) Ltd
and Another
1988 (1) SA 943
(AD).
[48]
The intervening's contention is that the applicant has failed to
comply with the peremptory provisions
of the Act in that the
applicant has,
inter alia,
and
prima facie,
failed to
establish against the respondent a claim as mentioned in section 9 of
the Act in that the alleged debt owing to the applicant
by the
respondent was in fact a donation and not a loan as such. Simply put
by the intervening creditor, the respondent does not
owe the
applicant the alleged R1.6 million, the parties are simply colluding
and that this application is for all intents and purposes
a friendly
sequestration.
[49]
With regard to the question of collusion, it is common cause that
during the course of
this litigation between the intervening creditor
and the respondent, over and above paying for the respondent's legal
costs, the
applicant was also paying monies into the respondent's
bank account to cover the latter's debit orders. As pointed out by
the intervening
creditor, the applicant never made any demand in
respect of the monies he paid into the respondent's bank account to
cover for
the latter's debit orders.
[50]
I am of the view that the intervening creditor's contention that the
applicant
never made any demand in respect of the monies he paid into
the respondent's bank account to cover for the latter's debit
orders, on the balance of probabilities, lends support to the
intervening creditor's contention that there was never a loan nor
any
expectation of being repaid.
[51]
As contended by the intervening creditor, I am of the view that the
totality
of the evidence before me gives traction to the collusion
allegations made by the latter for,
inter alia,
the following
reasons:
51.1
The applicant has failed to disclose Mogale's financial statements to
show that a loan account was indeed
created;
51.2
The speed with which and the circumstances under which the
sequestration application was issued;
51.3
The improbability of the averment that the applicant only and for the
first time learnt of the respondent's
inability to repay the loan and
the judgment debt only when he consulted with his attorney and the
respondent.
[52]
The applicant's did not even calculate the advantage to creditors in
his founding affidavit, which
is against the standard practice. The
applicant only filed such a calculation in his supplementary
affidavit filed 3 (three) months
after filing the replying affidavit.
No leave of court was sought in this regard and the said
supplementary affidavit is regarded
as
pro non scripto.
[53]
With regard to the valuation of the assets/ properties, it is
significant to note that the valuer
gave no factual basis for his
averments in respect of the respondent's property in Monument
Heights, situated in Kimberley. At
best all he does is make just bare
averments without providing any evidence thereto. The same goes for
the respondent's vehicles,
the Kruger Rand Gold Coin and the boat. No
evidence of a comparison of respondent's vehicle with other similar
vehicles' market
value or forced sale value has been provided.
[54]
For me the scenario in this matter is best illustrated in the matter
of
Kuhn v Kuhn
supra
where collusion was defined
as consisting
"in our law of an agreement between parties to
a
suit to suppress facts, or to falsify evidence before the
Court, or to manufacture evidence, in order to make it appear to the
court
that one of the parties
has a
cause of action, or
a
ground of defence, when in fact he has nof'.
I am of the view
that Kuhn could not have given a better summation of what probably
happened in casu. Furthermore, the description
made by Conradie J in
the matter of
Craggs v Dedekind; Baartman v Baartman
&
Another ; Van Jaarsveld v Roebuck; Van Aard v Borrett
holds
true in this matter, including the
Mthimkulu
matter
supra.
[55]
In light of all of the above, I am satisfied that the legal fees paid
by the applicant in respect of the respondent's legal costs were
nothing more than a father donating to his son. The reason for
this
finding is because, from the facts, there is nothing indicating that
there was ever an intention or agreement between the
two that the
respondent will have to repay same. I find 'the letter of demand'
from the applicant and the respondent's reply thereto
to be very
opportunistic, given the execution of judgment the intervening
creditor had embarked on. As to why the applicant had
to wait for
period of over five years before issuing a demand has not been
explained by the applicant. I further find that, as
was correctly
submitted by the intervening creditor, the sequestration notice was
issued simply for purposes of frustrating the
intervening creditor's
endeavour to enforce his legal right to recover the damages through
execution based on the judgment it had
obtained against the
respondent.
[56]
Based on the above finding, it I find that the applicant has failed
to discharge his onus
as envisaged in section 9(1) of the Act in
respect of a claim he has against the respondent. No cogent nor
credible evidence was
presented before the court, the absence of
which bolster the donation contention by the intervening creditor and
the court's finding
respectively.
[57]
As already stated above, I am of the further view that the rest of
the issues meant for
determination become moot based on the finding
that,
prima facie,
the applicant does not have a claim against
the respondent.
[58]
I find that this application is a classic case of collusion at its
best and that"
as was held in the matter of
Epstein
supra
'that the courts should scrutinize friendly sequestration
applications with particular care to ensure that the requirements of
the
Act are complied with and that the interests of the creditors are
protected and not prejudiced', this court must adopt the same
approach.
COSTS
[59]
The respondent did not join the applicant in this application.
However, the intervening
creditor submits that a punitive costs order
be made against both the applicant and respondent on a punitive
scale.
[60]
I am of the view that since the respondent did not participate in
this application,
despite him being the subject matter hereof, if a
costs order was to be made against him, it would result in an
unjustifiable injustice
to him. However, based on the level of the
superfluity with which the applicant has dealt with this application,
I am of the view
that a punitive costs order against the applicant is
justifiable.
RESULT
[61]
In the result I am therefore satisfied that the applicant has failed
to make out a
prima facie
case and that this application ought
to be dismissed with costs on an attorney and client scale, including
costs incurred by the
intervening creditor in the application to be
granted leave to intervene in these proceedings.
[62]
In the result the following Order is made:
ORDER
1.
The application is dismissed.
2.
Costs are awarded to the intervening creditor on an attorney and
client scale, including costs
incurred by the intervening creditor in
the application for leave to intervene in these proceedings.
L
Vuma
Acting
Judge
Northern
Cape High Court
Head
on: 9 March 2018
Judgment
delivered: 8 June 2018
Appearances
For
Appellant: Adv. OH Ronaasen
SC
Instructed
by: Roelf Nel Inc.
For
the Intervening Creditor: Adv. JG Gilliland
Instructed
by: Haarhoffs Inc.