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[2017] ZAFSHC 143
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Botha v Botha (2406/2017) [2017] ZAFSHC 143 (15 June 2017)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case
No.: 2406/2017
In
the application of:
JOHANNES
BOTHA
Applicant
and
MARIUS
BOTHA
Respondent
[Identity
number : [...]
Married
in community of property with
HILETTE
BOTHA
]
CORAM:
HEFER,
AJ
JUDGMENT:
HEFER, AJ
HEARD
ON:
25 MAY 2017
DELIVERED
ON:
15
JUNE 2017
[1]
During September 2016 the applicant , who is the father of the
respondent, applied for the sequestration of the respondent,
in terms
of
Section 8(G)
of the
Insolvency Act, 24 of 1936
. The applicant
alleged that the respondent borrowed an amount of R60 000,00
from him during December 2015. The respondent,
after payment of such
amount had been demanded by the applicant, then in writing indicated
that he is not able to repay the amount
to the applicant. It is
the applicant’s that the respondent committed an act of
insolvency as envisaged in
Section 8(G)
of the
Insolvency Act
referred
to.
[2]
The application also then set out the respondent’s financial
situation with reference to his assets being both immovable
as
movable as well as his liabilities which consisted of preferent- as
well as concurrent creditors.
[3]
A provisional order of sequestration was granted during September
2016. However, on the return date, Daffue J discharged
the
provisional order of sequestration. In his comprehensive reasons for
judgment, Daffue J set out the motivation for discharging
such
provisional order of sequestration and in effect dismissing the
application for sequestration.
[4]
In the present application, the applicant again seeks the
sequestration of the respondent, his son.
[5]
The facts upon which this application are based, are with the
exception of a few, the same as those relied upon by the applicant
during the first application for sequestration.
[6]
At the hearing of the matter, I enquired from counsel appearing on
behalf of the applicant,
Mr
Lubbe
,
to address me in particular in regards to the question of
res
judicata
,
namely that the matter, based on the same facts, between the same
parties had already been adjudicated upon and a judgment had
already
been delivered in regards to such facts.
[7]
Mr Lubbe
referred me to amongst others,
Kerbal
v Kerbal
1987 (2) SA 562 W in support of his proposition that
res
judicata,
similar
to
lis
pendens,
cannot
be raise by a court
mero
moto
.
In the
Kerbal
-
matter, however, the court was concerned with an application for
edictal citation in regards to a divorce action which was instituted
in the Witwatersrand Local Division. Prior to this action, the
applicant has also instituted action in Israel for similar relief.
The court stated the following at 567 D – E:
“
Once
it appears that the court has jurisdiction and it is clear that the
action is not vexatious and is properly brought in this
court, I
would certainly grant such an order as a matter of course in the
belief that it is the applicant’s right to institute
action is
she wishes to do so. Even if the facts given by an applicant might
indicate a possible defence to the action, that in
my view, is
irrelevant. The defendant may or may not take that defence and it is
not for the court mero moto to take at that stage
the equivalent of
either exceptions or defences for the prospective defendant”.
[8]
The court then also confirmed that the
exceptio
lis alibi pendens
is not an absolute bar. The court has a discretion to allow a matter
to proceed notwithstanding that the same issue might be pending
in
another court of competent jurisdiction.
[9]
It has been established that there must be an end to litigation and
from this flows the rule that legal proceedings can be stayed
if it
can be shown that the point at issue has already been adjudicated
upon between the parties.
See:
Erasmus
Superior Court Practice
,
2
nd
Edition, Vol. 2, p. D1 – 283.
[10]
I do consider the defence of
res judicata
on a different
footing than the
exceptio lis alibi pendens
. In the latter
instance there are two or more actions which are pending
simultaneously with each other. In regards to
res judicata
,
however, the court has adjudicated upon the facts brought before it.
I have already referred to the doctrine that there must be
an end to
litigation. If a plea of
res judicata
is upheld, it will
mean the end of the matter and will not result in only staying such
matter.
[11]
In
Owen-Smith
v Owen-Smith
1982 (1) SA 513
ZSC, Lewis JP said that is the essence of the defence
of
res
judicata
that it must be pleaded and referred in this regard to
Vooght
v Winch
106 ER 507
;
(1814-23) ALL ER 270.
The latter judgment, however, did
not specifically contain findings to the effect that a court cannot
raise the defence of
res
judicata mero moto
.
[12]
It is trite law that in regards to the special plea of prescription,
a court cannot on its own motion take notice of prescription.
However, as far as
res
judicata
is concerned, where a court has knowledge of the fact that the matter
has already been adjudicated upon by another court it should
take
cognisance thereof and consider what effect such previous
adjudication of the matter has when it is again brought before Court.
[13]
In the matter of
Boland
Konstruksie Bpk v Petlen Properties Bpk
1974
(4) SA 980
KPA, the court had to consider an application for
condonation for the non-compliance of the rules regarding the
continuation of
appeals. On behalf of the respondent it was alleged
that, because a previous application for condonation had been
refused, the
matter was
res
judicata
and may therefore not be considered. In this regard Burger, J said
the following:
“
Omrede
die aansoek vir kondonasie in die onderhawige geval nie behoorlik
voor die hof geplaas was nie, en die nodige stawende getuienis
nie
voorgelê was nie, is die aansoek van die hand gewys; daar was
egter geen beslissing van enige geskil nie. Na my mening
het die hof
toe hy die aansoek ‘van die hand gewys het’ bedoel om ʼn
bevel te maak wat neerkom op absolusie of
wat ʼn soortgelyke
strekking het.” (
P.
982 D – E).
[14]
Burger J also then came to the conclusion that the objection which
was based on
res
judicata
could not be upheld. What is important is that at p. 98 G – H
the following was said:
“
Onder
die omstandighede van die saak meen ek dat, selfs al was die beswaar
egter gegrond, dit nie in die belang van die reg sal
wees dat die hof
die beswaar mero moto opper.”
[15]
The importance of the latter is that it would appear that a Court may
on its own accord take note of
res judicata
. Furthermore, it
appears that a court will only raise the matter of
res judicata
mero moto
once it has been established that it will be in the
interest of the law and therefore also the interest of justice that
this fact
should be raised by a court of law. I consider it in the
interests of justice that the court should indeed be able to
mero
moro
raise such a plea and not allow a litigant to continue with
litigation after the matter had been adjudicated upon
previously.
[16]
Mr Lubbe
further referred me to the matter of
Smit
v Poritt & Others
2008
(6) SA 303
SCA where the court with reference to
Bertram
v Wood
(1893)
10 SC 177
at 180 held that recognition of the defence of
res
judicata
will require a careful scrutiny. Relevant considerations will include
the question of equity and fairness not only to the parties
themselves but also to others. It was said:
“
Unless
carefully circumscribed, (the defence of res judicata) is capable to
producing great hardship and even positive injustice
to individuals.”
[17]
Upon perusal of Daffue J’s reasons for discharging the
provisional order for sequestration, such reasons can be summarised
as follows:
(a)
The valuer
who valuated the immovable property, according to the written
valuation presented to court did not inspect the property
when the
valuation was done;
(b)
The
outstanding amount in regards to rates and taxes due to the
Mantsopa Local Municipality was not taken into consideration
when calculating the dividend required in the Free State Division as
a rule of practice;
(c)
No
valuation was obtained in regards to the Honda Quad Bike which forms
part of the respondent’s movable assets.
(d)
It was
unacceptable that the applicant did not employ the services of a
valuer in Ladybrand or if such person was not available,
that an
experienced estate agent residing and practising as such in the town
of Ladybrand, should have inspected such property
and valued it
accordingly. Such person’s evidence, given under oath,
referring to comparable sales, would have provided the
court with
detailed information pertaining to the property market in
Ladybrand at the time of his or her reasons for arriving
at a
valuation.
(e)
Major
errors were committed in arriving at the dividend of 30 cent in
the Rand.
(f)
Contrary to
the calculations by the applicant and/or his attorney, the
calculations in regards to the dividend should read different.
[18]
In using his own calculations, Daffue J calculated the dividend
payable to be nil.
[19]
The applicant himself is apparently not the draftsman of the
application. He is represented by an attorney who, in probability,
also prepared the Notice of Motion as well as the founding affidavit
in support of the application before court. The omissions
pointed out
by Daffue J were in all likelihood due to the draftsman of such
application. For that reason, and for that reason alone,
I do
consider it in the interest of the law and of justice that I may
adjudicate upon the matter although I am entitled to raise
the
defence of
res
judicata mero moto.
[20]
In considering the merits of the application, I intend to take into
consideration the degree in which the applicant’s
application
and in particular the omissions as contained in the first application
for sequestration have been improved.
[21]
As far as the valuer of the immovable property is concerned, the
applicant did not deem it necessary to obtain a new valuation
report.
What the application now contains is the same valuation report upon
which the first application for sequestration was founded.
In an
attempt to circumvent the point raised by Daffue J, namely that the
valuer did not inspect the property, the one page referring
to the
fact that there was no inspection of the property is now omitted.
Furthermore there is now an affidavit by the same valuer,
confirming
that he allegedly did inspect the property when evaluating such
property. However, such report still contains a paragraph
4.2
“
Buildings”
where it is again stated that no inspection was done. This report
therefore contradicts the allegations as contained in the
confirmatory
affidavit filed by such valuer. The confirmatory
affidavit furthermore does not state when such inspection was done
and does not
explain why the report refers to the fact that no
inspection was done. I wish to voice my dissatisfaction in the manner
in which
this evidence was placed before court. For the reasons
referred to, I therefore disregard such evidence in totality.
[22]
In regards to Daffue J’s further point raised in regards to the
valuer not being a local resident of Ladybrand, the confirmatory
affidavit by the valuer referred to previously, is also absolutely
silent on this aspect. No explanation is provided at all in
regards
to the basis for such comparable sales as contained in the valuer’s
report. The applicant now, however, also
relies on two
additional letters with accompanying confirmatory affidavits
regarding the valuation of the immovable property with
reference to
certain comparable sales in Ladybrand. No details are, however,
provided in regards to which comparable sales such
valuer then refers
to. Although I am sceptical of the evidence, in favour of the
applicant, I do then accept the evidence of these
two latter valuers,
namely Margaret Hofmeyer as well as Alrie Eiendomme.
[23]
As far as the Honda Quad Bike is concerned, no valuation report in
regards to this asset was before Daffue J with the first
sequestration application. Before me there is now a valuation report
in regards to this vehicle which, according to the report
itself, was
valued on 7 October 2016. Whereas the same valuer in regards to this
asset is the one who allegedly valued the
immovable property, I
am sceptical of such valuer’s allegations pertaining to the
immovable property. I do not, however,
have a reason to reject the
valuation report in regards to the Honda Quad Bike.
[24]
As far as the amount which is due and payable in regards to
outstanding rates and taxes to the relevant local municipality
is
concerned, such amount would, taking into consideration the period of
time since the date of the previous valuation report have
increased.
It is, however, not reflected as part of the respondent’s
liabilities as contained in the founding affidavit by
the applicant.
Again, as far as this point is concerned, I wish to voice my
dissatisfaction towards the draftsman of the application.
I did,
however, in my own calculation of a dividend in the matter, take such
outstanding rates and taxes in the amount of R5 600,00
in
consideration.
[25]
What remains to be considered is the dividend as calculated by the
applicant in comparison with the dividend as calculated
by Daffue J.
The applicant now relies upon an undated final liquidation and
distribution account apparently compiled by the curator
of the
erstwhile provisionally sequestrated estate of the respondent. In
response to Daffue J’s calculation of the dividend
at being
Rnil, the applicant does not go any further than to refer to the said
first and final liquidation account in insolvent
estate of the
respondent.
[26]
The applicant’s contention is that the creditors will receive a
dividend of 10 cent in the Rand. However, this contention
is
completely incorrect. Based on the figures now provided by the
applicant, in particular the increase of the liabilities since
the
previous application for sequestration as well as the administration
costs as contained in the first and final liquidation
account, I
calculated such dividend also to be approximately Rnil.
[27]
It is further trite law that in considering a sequestration
application, that it must be shown that such sequestration
will be to
the advantage of creditors as a whole. In the present instance,
taking into account that the amount of R5 600,00
in regards to
outstanding rates and taxes should be included in the respondent’s
liabilities, the respondent’s concurrent
creditors, excluding
the applicant, amount to R663 523,09. The amount of the assets,
being the balance of the value of the
immovable property, the value
of the motor vehicle as well as the value of the Quad motorbike is
R347 996,07.
[28]
According to the final distribution and liquidation account, the
administration costs in regards to the insolvent estate will
amount
to approximately R127 000,00. The total of the curator’s
fee in terms of this account amounts to R55 998,00.
[29]
If one then considers that according to the liquidation and
distribution account, the only amount available for distribution
is
the amount of approximately R44 500,00, it is difficult to see
how the sequestration of the respondent’s estate can
ever be in
the interests of the creditors as a whole. From the calculations as
contained in the said account, it appears that the
curator will
receive more than the creditors who have claims in excess of
R600 000,00.
[30]
The sequestration of the estate of the respondent will therefore not
be in the interests of respondent’s creditors as
a whole.
ORDER
The
application is dismissed
_______________________
J.J.F.
HEFER, AJ
On behalf of the
applicant: Adv. E G Lubbe
Instructed by Q B
Grimbeeck
65 Second Avenue
Westdene
BLOEMFONTEIN