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[2017] ZAFSHC 101
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Triegaardt N.O. and Another v Knipe (Noordman and Others Intervening) (4606/2016) [2017] ZAFSHC 101 (22 June 2017)
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Certain
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IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 4606/2016
Reportable:NO
Of
Interest to other Judges: YES
Circulate
to Magistrates: NO
In
the matter between:
JACOBUS
JOHANNES TRIEGAARDT N.O.
1
st
Applicant
RUDOLPH
PHILIP BOTHA
N.O.
2
nd
Applicant
(In
their capacities as the Trustees of the
JJ
TRIEGAARDT FAMILY TRUST IT105/96)
and
ANDRE BAZZETT JANSEN
KNIPE
Respondent
(Unmarried, ID:
[6...] ,
Residing at [...] G. C.,
H.
H., BLOEMFONTEIN, 9301)
OTLLIE ANTON
NOORDMAN
1
st
Intervening Applicant
CHAVONNES BADENHORST
ST CLAIR
COOPER
2
nd
Intervening Applicant
SIMON
MALEBO RAMPOPORO
3
rd
Intervening Applicant
HEARD
ON:
11 MAY 2017
JUDGMENT
BY:
DAFFUE, J
DELIVERED
ON:
22 JUNE 2017
I.
INTRODUCTION
[1]
Before me are five applications, to wit a main application for
the provisional sequestration of the respondent’s
estate;
secondly, an intervening application by the liquidators of two
companies in liquidation, also seeking the provisional sequestration
of respondent’s estate; thirdly, an application for the
extension of the liquidators powers; fourthly, an application in
terms of rule 7(1) of the Uniform Rules of Court; and lastly, a
counter-application by the respondent seeking in essence a
declaratory
order to the effect that the applicants’ and
intervening creditors’ attorneys, Matsepes Inc, were not
validly appointed
by the intervening applicants and also that the
appointment was in contravention of s 384(3) of the Companies Act, 61
of 1973.
[2]
Applications for condonation for failing to file the replying
affidavits in the main and intervening applications timeously
were
granted at the onset of the proceedings, there having been no
opposition.
II.
THE PARTIES
[3]
The applicants in the main application, Jacobus Johannes Triegaardt
and Rudolph Philip Botha, are the trustees of the JJ Triegaardt
Family Trust. It is their case that the trust is a creditor of
the respondent. I shall herein later refer to the applicants
as
the Triegaardt Family Trust to avoid confusion.
[4]
The respondent is Andre Bazzett Jansen Knipe (herein later referred
to as “Knipe” without intending to be derogatory),
an
unmarried businessman residing in
Bloemfontein.
[5]
The applicants in the intervening application is Otllie Anton
Noordman, Chavonnes Badenhorst St Clair Cooper and Simon Malebo
Rampoporo in there capacities as provisional liquidators in the
estates of
Kameelhoek
(Pty) Ltd and Schaapplaats 978 (Pty) Ltd
(in liquidation). I shall refer to them herein as “the
liquidators”.
[6]
Knipe is not only the respondent in the intervening application, but
also the applicant in a counter-application filed in the
intervening
application. The counter-application is not formally opposed,
apparently in the belief that the applicants have
made out such a
strong case for the provisional sequestration of the respondent that
it was not necessary to oppose.
[7]
Adv L Halgryn SC appeared before me for the applicants in the main
and the intervening applications, he having been instructed
by
Matsepes Inc.
[8]
Adv F Janse Van Rensburg appeared on behalf of respondent on
instructions of Stuart Van der Merwe Inc of Pretoria.
III.
HISTORY OF THE LITIGATION
[9]
On 28 September 2016 the Triegaardt Family Trust issued its
application in terms whereof an order for the provisional
sequestration
of respondent’s estate is sought.
[10]
The Triegaardt Family Trust is not an original creditor of
respondent, but obtained cession of the claim of respondent’s
sister, Carol Jessie Kathleen Lotz (later referred to as “Carol
Lotz”). She, both in her personal capacity as
well as in
her capacity as co-executrix in the estate of their late father, Mr
Knipe Snr, ceded her claim for taxed costs to the
Triegaardt Family
Trust. Therefore it is alleged that the respondent is indebted
to the Triegaardt Family Trust as cessionary
the amount of
R562 217.52 (interest excluded) which amount was taxed and
allowed by the Taxing Master of the Northern Cape
High Court in case
number 37/2015. That application was launched by Knipe and his
brother John Douglas Jansen Knipe against
the liquidators, their two
sisters (including Carol Lotz in her aforesaid two capacities), their
other brother, Tobie Myburgh Afslaers
CC and The Master of the High
Court, Bloemfontein. That application was one of a number of
applications brought in the Northern
Cape as well as the Free State
High Court by or against Knipe, involving his family members.
[11]
In terms of a written cession the cedent (Carol Lotz) and the
cessionary (the Triegaardt Family Trust) agreed that in the event
of
payment in respect of the claim not being obtained by 30 September
2016, the cession would lapse with immediate effect.
On 24
September 2016 the parties extended the deadline in writing to 31
March 2017. On 30 March 2017 the deadline was again
extended in
writing to 31 May 2017, i.e. prior to the hearing of this application
which occurred on 11 May 2017.
[12]
I cannot establish from the court file what happened on 20 October
2016, but it is apparent that respondent’s answering
affidavit
was filed on 25 October 2016 only.
[13]
On 4 November 2016 the Triegaardt Family Trust served notices in
terms of sub-rules 35(12) and (14) on respondent to which
he replied
on 11 November 2016.
[14]
The Triegaardt Family Trust’s replying affidavit in the main
application was filed out of time on 12 January 2017.
On 19
January 2017 Rampai, J removed the matter from the roll, costs to
stand over for later adjudication. As mentioned
supra
,
condonation for non-compliance was eventually granted by me.
[15]
On 25 January 2017 the intervening application was issued.
Respondent gave notice of his intention to oppose that application
on
1 February 2017 and duly filed his answering affidavit as well as the
counter-application. The liquidators filed their
replying
affidavit late and had to bring a condonation application. As
mentioned earlier that application was granted by
me at the start of
the proceedings on 11 May 2017.
[16]
On 9 March 2017 Lekale, J made certain orders by agreement and on 16
March 2017 Loubser, AJ made the following orders by agreement:
“
1.
The main application for sequestration is postponed to
11
MAY 2017
.
2.
The respondent will be afforded the opportunity to pay to the
applicants an amount of R562 217.52, together
with interest at
9% per annum, calculated from 17 September 2015, on or before 20
April 2017.
3.
In the event that the respondent fails to pay the amount as contained
in prayer 2 herein above, the applicants
are hereby granted leave to
supplement their papers.
4.
The respondent to pay the wasted costs occasioned by the postponement
of this application on the scale as between
attorney and own client.
5.
The costs of the application are reserved.”
[17]
I note from the court file that two draft orders were issued by
Loubser, AJ on 16 March 2017 although I could not find the
order
postponing the intervening application to 11 May 2017. Nothing
turns on this as all matters were heard by me simultaneously.
IV. THE ISSUES
[18]
The papers filed in these proceedings are prolix, an aspect properly
conceded by Mr Halgryn. The total number of pages is in
excess of 1
200. The
Triegaardt
Family Trust must take responsibility for the fact that over 330
pages were unnecessary added to the papers and didn’t
contribute anything at all to the adjudication of the application.
There are several disputes between the parties, but in
my view the
following are the material disputes to be adjudicated:
1.
The
locus
standi
of the trustees of the Triegaardt Family Trust;
2.
Whether
the Triegaardt Family Trust is a creditor of respondent;
3.
Whether
the Triegaardt Family Trust is entitled to rely on the
nulla
bona
return as a deed of insolvency in accordance with the provisions of s
8(b) of the Insolvency Act, 24 of 1936 (“the
Insolvency Act&rdquo
;).
4.
Whether
the respondent is actually insolvent insofar as his assets are
exceeded by his liabilities;
5.
Whether
sequestration will be to the advantage of creditors;
6.
Whether
the court should in the exercise of its discretion issue an order of
provisional sequestration;
7.
In
the event of the main application being unsuccessful, whether
respondent should be provisionally sequestrated based on the claim
of
the intervening creditors;
8.
Whether
any order should be made as requested in respondent’s
counter-application in the intervening application.
9.
Whether
relief should be granted in respect of the
rule 7
application;
10.
Whether
the liquidators’ powers should be extended;
11.
The
costs of the applications.
V.
RELEVANT PROVISIONS OF THE
INSOLVENCY ACT, 24 OF 1936
[19]
At this stage of the proceedings
s 10
of the
Insolvency Act is
applicable. If the court is
prima facie
of the
opinion that
“
(a)
the petitioning creditor has established against the debtor a claim
such as is mentioned in subsection (1)
of section nine; and
(b)
the debtor has committed an act of insolvency or
is insolvent; and
(c)
there is reason to believe that it will be to the
advantage of creditors of the debtor if his estate is sequestrated,
It
may
make an order sequestrating the estate of the debtor provisionally.”
(emphasis
added).
The
amount of the creditor’s claim shall not be less than R100 and
even if all three above-mentioned requirements have been
met, the
court still has a discretion whether or not to grant an order for
provisional sequestration. Bertelsmann
et
al, Mars:
The
Law
of Insolvency in South Africa
,
9
th
ed at p 141 and further deal with the discretion of the court in
adjudicating applications for sequestration. The authors
inter
alia
state
the following, relying on case law:
“
Where
it is clear that … the creditor has some other ulterior object
in making application and not the benefit of creditors,
the court
will refuse a sequestration order, but the
onus
of establishing that such is the case rests on the person asserting
it.”
The
authors continued at p 143 in submitting that a sequestration order
will also not be granted if the application is made
“
predominantly
to embarrass and harass the debtor and to prevent him from obtaining
judgment of debts due to him, or to put pressure
on him to compromise
a claim then being investigated in arbitration proceedings or if very
special considerations seem to require
such refusal.”
[20]
Section 8(b)
of the
Insolvency Act reads
as follows:
“
A debtor commits
an act of insolvency –
(a)
…
(b)
if a court
has given judgment against him and he fails, upon the demand of the
officer whose duty it is to execute that judgment,
to satisfy it or
to indicate to that officer disposable property sufficient to satisfy
it, or if it appears from the return made
by that officer that he has
not found sufficient disposable property to satisfy the judgment;………
“
The
Insolvency Act provides
for eight deeds of insolvency in
s 8.
Two
further deeds of insolvency are relied upon in the applicants’
papers – in terms of
ss 8
(c) and (d) - and I shall briefly
refer thereto during the evaluation of the evidence.
[21]
Section 97(3)
the
Insolvency Act reads
as follows:
“
(3)
In paragraph (c) of subsection (2) the expression ‘taxed costs
of sequestration’ means the costs
(as taxed by the registrar of
the court) incurred in connection with the petition of the debtor for
acceptance of the surrender
of his estate or of a creditor for the
sequestration of the debtor’s estate, but it does not include
the costs of opposition
to such a petition, unless the court directs
that they shall be included.”
VI. SOME AUTHORITIES
PERTAINING TO
SEQUESTRATION
[22]
One hundred and ten year ago Innes CJ made the following remark in
the well-known case of
De
Waard
v
Andrew and Thienhaus
Ltd
1907 TS
727
at p 733
:
“
Speaking
for myself, I always look with great suspicion upon, and examine very
narrowly, the position of a debtor who says:
“
I
am sorry that I cannot pay my
creditor, 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 critical spirit the
case of
a man who does not pay what he owes.”
[23]
In
Court
v Standard Bank of South Africa
[1995] ZASCA 39
;
1995
(3) SA 123
(AD) at 134C-D and 135 I- 136B Vivier, JA dealt with the
position of a debtor who failed
to
pay her debts notwithstanding several letters of demand and then made
the following remark:
“
The
appellant had had sufficient time to realise her assets and to pay
her creditors. She had not done so and had failed to pay
the interest
on the capital amounts.”
[24]
In addition to the
nulla
bona
return of service relied upon by the Triegaardt Family Trust in
casu
,
the court is also entitled to consider the further averments
pertaining to other creditors of respondent and I quote the following
from
Fedco
Cape (Pty) Ltd v Meyer
1988 (4) SA 207
(ECD) at 212C - F
:
“
In
addition it appears from the evidence that respondent is also heavily
indebted to various other creditors in substantial amounts
and that
also in those instances he had failed to meet his due commitments to
pay his debts in any manner or form. …
In
the final analysis the Court is faced with direct evidence with
regard to respondent's assets and liabilities which is, as I
have
stated, inconclusive either way; it is more or less evenly balanced.
The Court also has before it the indirect and inferential
evidence
concerning the respondent's behaviour and machinations which should,
I believe, be added to and considered in conjunction
with the direct
evidence.
Once
that is done the scales are clearly in my judgment preponderantly
tipped in favour of a finding of respondent's insolvency.”
[25]
In
Realizations
Ltd v Ager
1961
(4) SA 10
(D &CLD) at pp 11C-12G Williamson, JP stated the
following:
“
…
whether in fact
the respondent is insolvent. …. is not a material
consideration in considering an application for sequestration
based
upon an act of insolvency except upon the final approach, …
The question of actual insolvency is not in issue
at the stage of the
enquiry as to whether the petitioner has proved his case. He has to
establish the act of insolvency….
An advantage to
creditors is shown generally when the petitioning creditor
establishes that the debtor has a substantial estate
to sequestrate
and that the creditors cannot get payment except through
sequestration. … In considering whether it
is to the
advantage of creditors the Court does not consider whether other
alternative methods of obtaining payment might not bring
better
results. … The Court in a sequestration matter is not
entitled to give a debtor a moratorium if the result
would be to
deprive the creditors of the prospect of an early dividend. A
discretion, of course, must be exercised in the
light of all the
circumstances and the fact that there may be no prejudice to
creditors if an order is not granted, because there
is a substantial
prospect of early payment, is a matter which is relevant and a matter
which I should and have considered in this
case. …
Prima
facie
,
on papers, this respondent is a man of considerable assets who should
be able to pay his debts but the fact remains that he has
not paid
his debts, and he has considerable debts now which are not being
met.”
Williamson
JP also relied upon the well-known
dictum
of Innes, CJ quoted
supra
.
[26]
The debtor, being the best situated to know what property he has and
the whereabouts thereof, is duty-bound to point out to
the sheriff
presenting him with a writ of execution his disposable property or
indicate its whereabouts and description in order
to demonstrate its
sufficiency to satisfy the judgment. See:
Wilken
and Others NNO v Reichenberg
1999
(1) SA 852
(WLD) at 855E - F and
Nedbank
Ltd v Norton
1987
(3) SA 619
(NPD) at 621I.
[27]
A debtor who has committed a deed of insolvency may be sequestrated
even if he is technically solvent. See:
DP
Du Plessis Prokureurs v Van Aarde
1999
(4) SA 1333
(TPD) at 1335E - G. A debtor confronted with a
sequestration application shall reveal his financial position with
clarity
in the answering affidavit. See:
Absa
Bank Ltd v Rhebokskloof (Pty) Ltd and Others
1993
(4) SA 436
(CPD) at 447B – H. Berman, J commented
as follows pertaining to the inaction of the debtor:
“
He
did not avail himself of the opportunity afforded him to set out
precisely what his asset position was (and is) nor did he state
specifically what his liabilities were (and are). It seems to me that
he was deliberately evasive in regard to providing details
of his
assets … although contending that his assets were worth more
than this amount, he failed to set out precisely what
his assets were
and what their fair value was.”
[28]
A court is entitled to look at the undisputed and unexplained
indications of a debtor’s inability to pay his debts and
his
failure to make an open and honest disclosure of his financial
position. See:
Uys
and Another v Du Plessis
2001
(3) SA 250
(CPD) at 255B - G
.
VII.
THE APPLICANTS’
LOCUS
STANDI
[29]
The
locus
standi
of the Triegaardt Family Trust is derived from a costs order made
against the respondent in favour of Carol Lotz, which claim she
ceded
to the trust. The costs order is not in dispute, but the
cession is attacked on the basis that it constituted champerty
“
which
this Court should not condone.”
Champerty
envisages an illegal agreement in which a person with no previous
interest in a law suit finances it with the view to
sharing the
disputed property if the suit succeeds. It is not clear what
the respondent’s precise submission is insofar
as the cession
is not attacked on the basis of illegality. In his heads of
argument Mr Janse Van Rensburg submitted that
ex
facie
the cession Carol Lotz’ co-executrix did not sign the cession
and she also did not rely on any authority given by the co-executrix
to sign it on her behalf and therefore no valid cession could have
been entered into. I shall deal with this aspect further
during
my evaluation of the evidence
infra.
VIII.
EVALUATION OF THE EVIDENCE IN THE MAIN APPLICATION
[30]
I do not intend to deal with any allegations contained in the
intervening application for the reasons that will appear
infra
.
[31]
On 23 May 2013, more than four years ago, I made the following
remark:
“
These
proceedings, formidable as they are, are but a skirmish in a
full-blown campaign - a family war - being fought
on
several fronts.”
See:
Knipe
and Others v Kameelhoek (Pty) Ltd and Another
2014
(1) SA 52
(FB) at para [7]
.
[32]
The family war did not cease after this judgment. Several
further battles have been fought since then and are even continuing
today. See
inter
alia:
Knipe &
Another v Noordman NO and Others
2015
(4) SA 338
(NCK) wherein Mamosebo, AJ made the following order in
respect of case number 37/2015 from which the claim in this
application
emanates:
“
The
applicants (Andre and John Knipe) are further ordered to pay the
costs of Carol Jesse Kathleen Lotz in her personal and representative
capacities as executrix (respondents 8 and 10) on the scale as
between attorney and client, jointly and severally, the one paying
the other to be absolved.”
Carol
Lotz’ co-executrix in the estate of her late father, Mr Henry
Knipe, being her mother, Mrs Moira Elizabeth Knipe, passed
away in
the meantime and it does not appear from any of the papers that
another co-executrix has been appointed.
[33]
In Carol Lotz’ affidavit in support of the replying affidavit
in the main application she stated the following:
“
3.
I specifically deny being in cahoots with Mr Senekal, the applicant
or its trustees. I have been involved in
litigation against my
siblings for the past 10 years. I have been successful in all
this litigation and my siblings (including
the respondent) owe me
millions of rands in respect of costs orders which I’ve
obtained against them.
4.
They, including the respondent, have not paid any of these costs
orders. The respondent is indebted to me in respect
of costs
orders to the tune of more than R2 million, which he makes no attempt
to pay.
5.
Furthermore it must be noted that the litigation is ongoing and takes
up a lot of my time. However I fully intent
to recover all the
legal costs I have expended in this litigation but I confess that it
has not been priority in my life due to
the present litigation which
requires all my attention.
6.
When I was approached by the applicant, represented by its trustees
and made the offer of purchasing my claim against the
respondent in
respect of the costs order which forms the subject matter of
applicant’s claim, this presented as a welcome
relief and I
agreed to cede my claim to the applicant.
7.
I submit that this transaction is
bona
fide
and
above board and does not
constitute
champerty. I furthermore deny that I colluded with Mr Senekal
or the applicant or its trustees in any manner.”
[34]
I am satisfied that Carol Lotz has given a truthful and satisfying
reason for ceding her claim to the Triegaardt Family Trust.
Mr
Janse Van Rensburg’s argument that the cession was void insofar
as it had not been entered into by Carol Lotz’ co-executrix
does not hold water and is without a factual foundation. As
mentioned, Mrs Moira Knipe, the late Mr Henry Knipe widow, passed
away. It is also apparent from the judgment of Mamosebo, AJ
that Carol Lotz was the only executrix cited in those proceedings.
In the absence of an appointment of another executor or executrix to
substitute Mrs Moira Knipe, Carol Lotz was fully entitled
to cede the
claim for costs obtained in her personal and representative
capacity. For sake of clarity I repeat that the claim
in
respect of the costs order ceded to the Triegaardt Family Trust
emanates from the taxation of the bill of costs in case number
37/2015 referred to
supra
.
[35]
When the matter was postponed on 16 March 2017 to enable respondent
to settle the debt, leave was granted to the Triegaardt
Family Trust
to supplement its papers, obviously in the event of no payment
forthcoming. When the matter was called on 11
May 2017 Mr
Halgryn on behalf of applicant begged leave to hand up from the bar
supplementary affidavits. A written
extension of the
deadline mentioned in clause 10 of the cession agreement referred to
supra,
which extension was agreed upon in writing on 31 March 2017 and in
terms whereof the date of lapsing was extended to 31 May 2017
is
attached to the supplementary affidavits. Therefore, at the
stage when the application was heard, the cession agreement
was in
full force and effect. The court order of 16 March 2017 did not
specify a deadline for the filing of supplementary
affidavits.
Mr Janse van Rensburg objected to the procedure, but did not indicate
whether he wanted time or a postponement
to consider his position.
I regarded the reliance on an extension of the deadline in the
cession agreement as a formality
and accepted the documentation.
Based on the evidence presented to me I am satisfied that the
Triegaardt Family Trust is
a creditor of respondent for purposes of
s
10(a)
read with
s 9(1)
of the
Insolvency Act. The
first
requirement has been met.
[36]
I am also satisfied that respondent not only committed at least one
deed of insolvency, but is factually insolvent as well.
My
reasons appear in the next few paragraphs.
[37]
A sheriff’s return is
prima
facie
proof of its contents by virtue of
s 43(2)
of the
Superior Courts
Act, 10 of 2013
which provides that:
“
the
return of the sheriff or deputy sheriff of what has been done upon
any process of court shall be
prima
facie
evidence of the matters stated therein.”
[38]
Prima
facie
evidence
calls for an answer and places an evidential burden on the
respondent. Therefore, if a respondent seeks to impeach
a
return of the sheriff, it must be done on
“
the
clearest and most satisfactory evidence”
.
See:
Deputy
Sheriff, Witwatersrand District v Goldberg
1905
TS 680
at 684, cited with approval in
Absa
Bank v Collier
2015
(4) SA 364
(WCC) at para [37].
[39]
On 16 March 2016 and prior to the aforesaid cession a writ of
execution was served on respondent at the instance of Carol Lotz.
Respondent informed the sheriff of Bloemfontein West that it was
impossible to pay the amount claimed or any sum. He claimed
not
to own any disposable property in the Bloemfontein district, but that
he owned substantial assets in the Kimberley district,
being a
shareholding in several Eland antelope
roaming
on the farms Kameelhoek and Langberg, Kimberley district. The
writ of execution was re-issued once the claim was ceded
and again
served by the sheriff for Bloemfontein West on 27 July 2016. It
appears from the return of service that the respondent
indicated that
he had no disposable property, money or negotiable property in the
Bloemfontein district to satisfy the said warrant
or a portion
thereof, but that he was the owner of Eland antelope valued at
R757 500 and furniture to the value of R150 000
in the
Kimberley district.
[40]
On 16 August 2016 the sheriff of Bloemfontein West served another
writ of execution issued in case number 4817/2014 on respondent,
claiming payment of the amount of R264 092.20. Again,
respondent responded as above, but also added that he owned 27
Kudu
bulls and 6 more Eland bulls which were roaming on the farm Senegal
on the Botswana border.
[41]
It is the Triegaardt Family Trust’s case that respondent is
aware of the fact that the first-mentioned Eland are the
subject of a
lien in favour of the liquidators and not available to liquidate
unless the administration costs pertaining to them
are being
deducted. There is a dispute pertaining to the values of the
Eland and Kudu. It is the Triegaardt Family
Trust’s case
that respondent greatly exaggerated the values of these antelope, but
although I find respondent’s version
less convincing it is not
necessary to make any finding in this regard.
[42]
Over and above the ceded debt, respondent owes hundreds of thousands
if not millions of rands to various firms of attorneys
in respect of
legal fees. In fact, the Triegaardt Family Trust alleges that
the total liabilities as far as its attorneys
could ascertain amounts
to no less than R4 258 682.67. Respondent’s
response in paragraph 30 of the answering
affidavit is a bare
denial. Some of the taxed bills of costs have been taken on
review, but the end result remains that enormous
amounts are still
due, owing and payable by respondent. In paragraph 309 of the
founding affidavit a summary is provided
of respondent’s
undisputed debts. The total amounts to R3 084 372.67.
The respondent’s assets
are indicated, based on his inflated
values and excluding the aforesaid shareholding to be R3 391 000.00.
Again,
in paragraph 46 of his answer respondent merely rejects the
allegations without explaining why the amounts and or other
allegations
are not correct.
[43]
The respondent told different versions to the sheriff of Bloemfontein
West in respect of the assets available in the Kimberley
district.
It is unnecessary to evaluate these different versions as it cannot
take the matter any further. It appears
from a return of
service pertaining to a writ of execution issued under case number
5081/2014 that the Eland and Kudu bulls were
removed from the farm
Senegal and taken to an unknown destination in the Kimberley
district. If these antelope really existed,
respondent
committed a further deed of insolvency in accordance with
s 8(d).
Under case number 4817/2014 Matsepes issued a writ of execution for
the amount of R504 288.07. Respondent did
not attend at
the farm Langeberg, Kimberley as arranged with the sheriff,
indicating that he was ill. To date hereof respondent
has not
pointed out any of these animals to the sheriff. Not only are
the values placed on the animals by respondent fiercely
contested as
mentioned
supra
,
but irrespective of the inflated values, it is submitted on behalf of
the Triegaardt Family Trust that it is
“
now
clear that these Kudu and Eland do not exist”
.
[44]
The Triegaardt Family Trust indicated that respondent failed to
disclose other assets. Also, respondent’s inability
to
pay small claims from various other creditors is apparent.
Standard Bank has issued summons out of the Northern Cape High
Court
in its capacity as mortgagee over immovable property of which
respondent is a 50% owner. The arrears according to the
summons
as on 17 August 2015 was the amount of R23 643.23, effectively
meaning that respondent and his co-owner were not in a position
to
pay the monthly instalment of R3 940.54 as stated in the
summons. Evidence was also presented that respondent is
in
arrears with the payment of his municipal accounts in the amount of
R35 348.41. According to a deed search done on behalf
of
applicants, respondent is the owner of several immovable properties,
inter
alia
in
Kathu, Bloemfontein, Pretoria and Kei Mouth. He has business
interests in at these two close corporations and two private
companies.
[45]
Respondent has begun selling some of his properties in order to pay
his enormous legal costs. Mr Conradie of Rossouw &
Conradie Inc,
trading as Rossouws Attorneys in Bloemfontein, recorded the following
as long ago as September 2015 (with reference
to respondent):
“
Hy
het bygevoeg dat hy sy vaste eiendomme, “behalwe vir een of
twee” reeds verkoop het om al sy regskostes te delg en
dat daar
ook ander prokureurs is wie se rekening hy nog moet betaal ...
Die rede waarom ons Mnr André Knipe uitgenooi
het om die
teendeel aan te toon, is voor die handliggend, naamlik dat ons van
voorneme is om aansoek te doen vir sy sekwestrasie.”
The
amount owing to Rossouws Attorneys is R389 033.74. If the
version referred to by Mr Conradie is accepted, which I
do not have
to for purposes of my ultimate conclusion, a further deed of
insolvency in accordance with
s 8(c)
has been or is being committed.
[46]
The Triegaardt Family trust has shown
prima
facie
that the total amount of the claims of respondent’s known
creditors is in excess of R3million. Although respondent
insists that he is solvent and that the value of his estate is in
excess of R3.3million, it is applicant’s case that the
values
of respondent’s assets have been grossly inflated.
Respondent was challenged, not only to prove the very existence
of
these assets (the antelope and furniture), but also their values,
which he failed to do. I am satisfied that respondent’s
estate is worth far less then mentioned by him. On all
probabilities he is commercially and factually insolvent.
[47]
Respondent was invited in writing on more than one occasion prior to
the launch of the sequestration proceedings to play open
cards and
inform his creditors of his financial position, but he did not accept
these invitations.
[49]
One such letter addressed to respondent’s attorneys is dated 25
July 2016 and I quote:
“
From
all information handed to the sheriff by your client, it is clear
that your client’s liabilities by far exceed his assets.
If you disagree with this, then this letter serves as an open
invitation for your client to disclose any other assets which he
has. We do not want to bring an application to court if your
client is solvent, but it is clear that your client’s
creditors
is (sic) severely prejudiced by the fact that he is just
incurring further debt and is in no position to honour
this.
From our information your client is insolvent.
”
[50]
Neither respondent, nor his attorneys that acted on his behalf at
that stage (and who are still acting on his behalf) made
any effort
to present a balance sheet stating respondent’s assets and
liabilities. More importantly, notwithstanding
the further
invitation to respondent as set out in the founding affidavit, he
elected not to respond and take the court in his
confidence by
informing us of his present financial position, including his assets
and liabilities. I am satisfied as to
the inherent credibility
of the factual averments made on behalf of the Triegaardt Family
Trust. Respondent’s averments
and denials are far-fetched
and so clearly untenable that they can safely be rejected.
Instead of setting out his financial
position and/or attacking the
veracity of the sheriff’s return of service and/or paying the
debt reflected in the writ of
execution issued at the instance of the
Triegaardt Family Trust as required by the authorities referred to,
he elected to seriously
attack Mr Senekal. Whether or not there
is no love lost between them is, save as mentioned herein, immaterial
to the real
dispute.
[51]
Respondent accuses Mr Senekal of being on a fishing expedition to try
and obtain more information of his assets instead of
executing
against the assets provided which on his version constitutes
sufficient security. I reject respondent’s version
as
untenable. The facts which I accept as indicated
supra
speak
for themselves. Respondent also relies on a value of his
shareholding in the two companies in liquidation in the amount
of
between R8 million and R12 million. According to him that was a
valuation placed on the shareholding by Mr Senekal.
Clearly, he
is wrong in this regard, but respondent is opportunistic to say the
least. Too many costs have been incurred
in the meantime and
the administration costs in the two estates which will have a direct
impact on the value of the shares are
enormous as confirmed under
oath by Mr Cooper, one of the provisional liquidators. I do not
think that any reasonable, logically
sound thinking investor would be
prepared to buy the shares which are worthless, notwithstanding the
value of the farms owned by
the two companies, if the ongoing
litigation is considered. The winding-up process has been
ongoing for five years. No finality
is anticipated. Two
business rescue application were brought, but dismissed. There
might be an appeal against the dismissal
of the second application.
No one knows when the liquidation process will be finalised and all
the time administration costs
are increasing.
[52]
In
considering the respondent’s bare denials it is apposite to
refer to the following
dictum
by Heher JA in
Wightman
t/a JW Construction v Headfour (Pty) Ltd and Another
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA)
,
quoting from para [13]:
“
[13]
A real, genuine and bona fide dispute of fact can exist only where
the court is satisfied that the party who purports
to raise the
dispute has in his affidavit seriously and unambiguously addressed
the fact said to be disputed. There will of course
be instances where
a bare denial meets the requirement because there is no other way
open to the disputing party and nothing more
can therefore be
expected of him. But even that
may
not be sufficient if the fact averred lies purely within the
knowledge of the averring party and no basis is laid for disputing
the veracity or accuracy of the averment. When the facts averred are
such that the disputing party must necessarily possess knowledge
of
them and be able to provide an answer (or countervailing evidence) if
they be not true or accurate but, instead of doing so,
rests his case
on a bare or ambiguous denial the court will generally have
difficulty in finding that the test is satisfied.
I say ‘generally’ because factual averments seldom stand
apart from a broader matrix of circumstances all of which
needs to be
borne in mind when arriving at a decision. A litigant may not
necessarily recognise or understand the nuances of a
bare or general
denial as against a real attempt to grapple with all relevant factual
allegations made by the other party.
But
when he signs the answering affidavit, he commits himself to its
contents, inadequate as they may be, and will only in exceptional
circumstances be permitted to disavow them. There is thus a serious
duty imposed upon a legal adviser who settles an answering
affidavit
to ascertain and engage with facts which his client disputes and to
reflect such disputes fully and accurately in the
answering
affidavit.
If that does not
happen it should come as no surprise that the court takes a robust
view of the matter.”
(emphasis
added.)
Respondent
failed to answer the allegations of the Triegaardt Family Trust in
the manner required by the law as emphatically set
out in
Wightman
supra.
Mr Janse van Rensburg’s submission that there
was no duty on respondent to disclose all his assets is wrong.
He was
supposed to make full and candid disclosure of his assets and
liabilities. I refer to the authorities quoted
supra, inter
alia Absa v Rhebokskloof
and
Uys v De Plessis.
The second
requirement as mentioned in
s 10
has been proven.
[53]
Respondent has already disposed of property and is in the process of
disposing further property
ex
facie
the founding affidavit. He has removed animals in which he
allegedly has an interest to unknown destinations. He is
a
businessman of note and on his own version mentioned in letters to
inter
alia
applicant’s attorneys, he is
solvent
and therefore in possession of sufficient assets to settle his
debts. He has an interest in a piggery just outside
of
Bloemfontein and is known to speculate in cattle, sheep, goats and
pigs. He conducts a funeral parlour under the trade
name Jacks
Funeral, as well as a butchery now known as Pork City and Butchery as
depicted in a photograph attached to the founding
affidavit. It
is in the interest of justice and creditors in particular that
respondent be sequestrated. A trustee
or trustees should be
appointed to take control of his estate and to do the necessary
investigation. There is sufficient
reason to believe that
sequestration will be to the advantage of respondent’s
creditors. The third requirement of
s 10
has been met.
[54]
Although I am
prima
facie
satisfied
– even on a balance of probabilities - that the three
requirements of
s 10
have been met, I must also consider whether I
should exercise my discretion in favour of the Triegaardt Family
Trust. I am
really concerned about the involvement of Mr
Senekal of Matsepes Inc in this matter. He and respondent have
personal vendettas
against each other. I find it strange that
Carol Lotz of the Northern Cape could find willing and able buyers of
her claim
in the Eastern Cape, being the trustees of the Triegaardt
Family Trust. I have reason to believe that it can be
attributed
to the intervention of Mr Senekal. These trustees
are apparently outsiders and knew nothing of the acrimonious
history.
No doubt, Mr Triegaardt’s evidence is to a great
extent hearsay, obviously relying on what Mr Senekal told him.
Mr
Senekal, who is the real driving force behind the present
litigation, is also the attorney for the liquidators, the intervening
creditors, in circumstances which I find highly questionable.
One of them, Mr Noordman, is an employee of Matsepes Inc of
which Mr
Senekal is a director.
[55]
One merely has to read the first twelve pages of the answering
affidavit of respondent and the affidavit of Mr Senekal attached
to
the replying affidavit – which Mr Halgryn conceded was
irrelevant for purposes of the adjudication of the application
–
in order to get some idea of the hatred and lack of respect between
Mr Senekal and respondent. The paper war is so
serious and
despicable that respondent seeks an order that the matter be referred
to the local Law Society and the NDPP. Anyone
considering
criticising my observations is invited to take the trouble of reading
the various accusations made by respondent in
the answering affidavit
and Mr Senekal’s response thereto. The intervening
application was brought unnecessary as I
shall explain
infra
,
but the intention was clearly to ensure that respondent was
sequestrated, come what may.
[56]
Although I have my doubts about the
bona
fides
of
Mr Senekal in the litigation, I am not persuaded of
mala
fides,
an
ulterior object or an abuse of process, particularly not insofar as
Carol Lotz and the Triegaardt Family Trust are concerned.
Respondent mentioned that Mr Senekal orchestrated the application for
a sequestration and I am prepared to accept that to be the
case.
Such acceptance is not sufficient to make an adverse finding against
the Triegaardt Family Trust. The objective
and undisputed facts
illustrate that respondent owes substantial amounts to various firms
of attorneys in respect of taxed bills
of costs. This is an
indication of his
modus
operandi
and
the manner he elected to embark upon frivolous litigation over a
period of several years. His counsel, Mr Janse Van Rensburg,
submitted when I asked why respondent did not pay the amount due to
the applicant bearing in mind the opportunity provided to him
by
order of court, that if that would have been done, the next creditor
in line would have applied for respondent’s sequestration.
Such submission hit the nail on the head, bearing in mind the
enormous amounts due to so many creditors. There is no merit
in
Mr Janse van Rensburg’s further submission that the proceedings
are simply debt collection proceedings and should not
be countenanced
as they are disguised as sequestration proceedings. It is trite
that a creditor may apply for compulsory
sequestration of the
debtor’s estate as a debt collection mechanism. The best
proof of solvency is a man that pays
his debts as they fall due.
See:
De
Waard supra.
[57]
In the final analysis respondent’s criticism of Mr Senekal did
not come to his rescue. He has committed at
least one deed of
insolvency, is hopelessly insolvent and unable to pay his debts
whilst
carrying
on with his life without paying or endeavouring to settle his
enormous debts. Therefore I exercise my
discretion
in favour of granting a provisional sequestration order.
IX.
THE INTERVENING APPLICATION
[58]
The intervening application has been instituted by Messrs Noordman,
Cooper & Rampoporo, provisional liquidators of the
two companies
Kameelhoek (Pty) Ltd en Schaapplaats (Pty) Ltd (in liquidation).
It is their case that the costs order obtained
in application
4817/2014 does not form an asset in the estates of the companies in
liquidation. The order granted by Wright,
AJ in favour of them
in their capacities as provisional liquidators of the two companies
reads as follows:
“
3.
The applicants, jointly and severely, are to pay the costs of the
application, including the costs of
opposition, on the scale as
between attorney and client.”
[59]
It is the case of the liquidators that
“
costs
in the wide sense of the word are the expenses incurred by a litigant
in legal proceedings and they consist of monies due
to an attorney
for his fees and expenses.”
The
costs order falls within
“
this
category and was granted to indemnify the intervening parties from
our attorney’s fees and expenses”.
[60]
Bertelsmann
et
al, loc cit
at
pp 129 and 130 comment as follows regarding intervening applications:
“
If
the application (for the sequestration of a debtor) is withdrawn the
court will usually discharge the provisional order, but
any other
creditor may intervene at any stage. The position has been
summarised as follows: a creditor may intervene in order
to have a
provisional order of sequestration set aside or, where the applicant
fails to proceed, or drags his feet, he may apply
for a fresh
sequestration order in his own right and name. Where the
applicant does not proceed, the existing sequestration
order cannot
be confirmed at the instance of an intervening creditor; it must be
set aside and a fresh order can be issued with
the creditor as
applicant and not as co-applicant. The intervening creditor
thus becomes the
dominus
litis
and
the original applicant drops out altogether. The intervening
creditor must make out a case for sequestration, furnish
security,
etc as though he had originally been the applicant, but he can rely
on facts which appear from the record in the existing
proceedings.
The court further ‘takes a practical view in these matters and
also bears in mind the interest of the
general body of creditors.’
It has been decided that this intervention is not a conventional
intervention; it
is neither a pure intervention nor
substitution of applicants. It is rather an independent application,
differing from the usual
one.”
[61]
There was no need to bring the intervening application. I do
not agree with the averments that it made logical sense
to join issue
with the applicant in the main application in order to avoid a
multiplicity of applications. If that is the
aim of
intervention in these kind of proceedings, other creditors in
sequestration proceedings will as of right seek to intervene
and
thereby causing unnecessary costs. Such an approach is contrary
to what is stated in the passage quoted from
Bertelsmann
et al,
supra and the several authorities relied upon by the authors.
The intervening application may have the effect that the respondent’s
estate is mulcted in costs if an appropriate order is not made.
[62]
The same attorney, Mr Senekal of Matsepes Inc, acts for the
intervening creditors as well as for the applicants in the main
application. Surely he would be the first to know if the
Triegaardt Family Trust decided not to proceed with the main
application
for whatever reason. He could see to it that the
applicant did not drag its feet in getting finality for whatever
reason.
[63]
I accept that the court order granted by Wright, AJ is final and that
the appeal process against that order has been exhausted.
The
bill of costs was taxed; the taxation was taken on review; whereafter
the bill of costs was re-taxed and a final figure has
been arrived
at. The only relevant aspect to establish is whether the
liquidators have
locus
standi
in the proceedings and entitled to claim the taxed costs in their
personal capacities although the order was granted in favour
of them,
cited in their capacities as provisional liquidators.
[64]
In view of my finding that a provisional sequestration order should
be issued, the only order that may possibly be made at
this stage is
to grant the liquidators leave to intervene in the proceedings.
It would be wrong to grant a provisional sequestration
order at the
request of the intervening creditors as well as the further orders as
set out in paragraphs 3 – 8 of the notice
of motion. This
would amount to duplication which cannot be countenanced.
[65]
Bearing in mind the conclusion to which I have arrived, it is
unnecessary to deal with the provisions of s 386(3) of the Companies
Act, 61 of 1973. However I wish to make the following remarks.
Liquidators litigating without the prescribed authority
may find
themselves in a position that the court may refuse to allow them
their costs out of the company’s assets and they
may have to
pay such costs themselves. However, the litigation is not a
nullity. The further issue raised, i.e. whether
the appointment
of Matsepes Inc contravened s 384(3) of the Companies Act must be
addressed briefly. Even if it may be found
that Matsepes Inc
could not have acted as attorneys of record for and on behalf of the
provisional liquidators – an aspect
that does not have to be
decided - the fact of the matter is that that issue was never raised
before Wright, AJ and her orders
were never rescinded. They
need to be complied with until set aside. Furthermore, the
liquidators do not rely on an
entitlement to funds out of the assets
of the companies in liquidation. The Master may consider the
issue afresh if the liquidators
do not succeed in receiving payment
of the taxed costs and then seek to obtain payment from the estates.
As mentioned, this
is a side-issue and not a material issue to be
adjudicated
in
casu.
Therefore
I refrain from making any findings in this regard.
X.
THE COUNTER-APPLICATION
[66]
I have expressed my views pertaining to s 384(3) and the appointment
of Matsepes Inc
supra.
I
have not been persuaded that respondent has made out a case for the
relief contained in prayers 1 and 2. Although I have
strong
views about the conduct of Mr Senekal as a practising attorney as
well as that of respondent and the manner in which they
declared
their personal vendettas against each other, I am not prepared to
make the further orders as set out in the counter-application.
If respondent
and/or
his legal team want to refer the conduct of the intervening
applicants and Mr Senekal to the National Prosecuting Authority
or
the Law Society of the Free State Province, they are free to do so.
XI.
EXTENSION OF PROVISIONAL LIQUIDATORS’ POWERS
[67]
There is also an application by the liquidators for leave to approach
the court in terms of s 386(5) of the Companies Act,
61 of 1973 to
bring the application and for further relief that their powers be
extended to empower them with the powers as set
out in ss 386(4)(a) &
(h) of the aforesaid Act. This application was not fully argued
before me and Mr Halgryn even suggested
that the application was
unnecessary insofar as the liquidators did not claim on behalf of the
companies in liquidation, but in
their personal or representative
capacities. In fact, in reply he was adamant that the costs
order accrued to them personally.
I am not prepared to grant
any orders as sought in the notice of motion. In any event, Mr
Rampoporo neither deposed to an
affidavit in support of the
application, nor did he authorise the other co-liquidators to act on
his behalf. There is also
no proof that the application was
served upon shareholders of the two companies in liquidation and
those creditors that have proved
claims. Messrs Noordman and Cooper
acted without the authority of their co-liquidator, Mr Rampoporo,
notwithstanding Mr Noordman’s
suggestion under oath. Mr
Rampoporo did not depose to a confirmatory affidavit. The costs
should not be recovered from
the companies in liquidation and Messrs
Noordman and Cooper must be held liable
de
bonis propriis
for
the costs of the abortive application.
XII.
THE RULE 7 APPLICATION
[68]
The rule 7 application brought on behalf of respondent in terms
whereof the intervening applicants be ordered to provide written
and
sufficient proof for the authority of Mr Senekal to represent them
and to act as their attorney in the application for intervention
has
become moot insofar as I have decided not to grant relief to the
intervening parties. However it needs to be said that
I am of
the opinion that the application is ill-founded. In the
circumstances it should be dismissed with costs.
XIII.
COSTS OF THE SEQUESTRATION AND INTERVENING APPLICATIONS
[69]
The successful party is as a general rule entitled to his costs.
However, the general rule is subject to the overriding
principle that
a court has a judicial discretion in awarding costs. I am
fully aware of the provisions of
s 97
of the
Insolvency Act quoted
supra.
Moral
and ethical considerations may play a role in the exercise of a
court’s discretion. The conduct of Mr Senekal
referred to
supra
must
be considered in particular. A reasonably uncomplicated
sequestration application was transformed into an eight hundred
and
seventy page application. Over two hundred pages of bills of
costs and unnecessary documents were attached to the founding
affidavit. A further hundred pages were unnecessary attached to
the replying affidavit, although the accusations of respondent
against Mr Senekal may be blamed for this to an extent. Mr
Senekal caused the intervening application and the application
to
extend the powers of the provisional liquidators to be launched in
circumstances where these were not called for. To mark
my
disapproval of the attorney’s conduct I shall allow only 50% of
applicants’ taxed costs to be regarded as costs
of
sequestration for purposes of
ss 97(2)
and (3).
[70]
The question to be answered is who shall be burdened with the costs
of the intervening application. The liquidators are
experienced
practitioners in insolvency law. They cannot hide behind their
positions as provisional liquidators. The
costs of the
application shall not be paid by the estates of these companies and
consequently, the liquidators shall pay such costs
in their personal
capacities
de
bonis propriis.
XIV.
THE ORDERS
[71]
Therefore the following orders are made:
1.
At
the instance of the Triegaardt Family Trust in the main application
the estate of the respondent is placed under a provisional
order of
sequestration in the hands of the Master of the High Court.
2.
A
rule
nisi
is issued calling upon respondent and all interested persons to show
cause on Thursday, 3 August 2017 at 09:30 or as soon thereafter
as
counsel for the Triegaardt Family Trust may be heard as to why the
estate of the respondent should not be placed under a final
order of
sequestration.
3.
The
rule
nisi
shall be served by the sheriff of this court on the respondent
personally.
4.
The
sheriff shall establish whether the employees of the respondent are
represented by a trade union and whether there is a notice
board on
the respondent’s premises and/or farms to which the
respondent’s employees have access.
5.
The
sheriff shall serve a copy of this rule
nisi
on any registered trade union(s) representing the respondent’s
employees.
6.
The
sheriff shall serve a copy of the rule
nisi
on the respondent’s employees by placing a copy of the rule
nisi
on any notice board on the respondent’s premises and/or farms
to which the respondent’s employees have access, or should
such
employees not have access to such premises and/or farms, by attaching
a copy of the rule
nisi
to the main gate, where applicable or otherwise on the front door of
the premises from which the respondent conducts any business
at the
time of such service.
7.
The
sheriff shall serve a copy of the rule
nisi
on the South African Revenues Services.
8.
50%
percent only of the applicants’ costs shall be costs in the
insolvent estate and the costs of opposition shall not form
part of
the sequestration costs in accordance with the provisions of
subsections 97(2) and (3) of the
Insolvency Act, 24 of1936
.
9.
The
intervening application of Messrs Noordman, Cooper and Rampoporo is
dismissed with costs, such costs to be paid by Messrs Noordman,
Cooper and Rampoporo jointly and severally
de
bonis propriis,
the
one to pay the others to be absolved.
10.
The counter-application of respondent filed in the intervening
application proceedings is dismissed with costs.
11.The
application of Messrs Noordman, Cooper and Rampoporo for the
extension of their powers as provisional liquidators is dismissed
with costs, the costs to be paid by Messrs Noordman and Cooper
jointly and severally
de bonis propriis,
the one to pay the
other to be absolved.
12.
Respondent’s
application in terms of Rule 7 of the High Court Rules is dismissed
with costs.
______________
JP
DAFFUE, J
On
behalf of the applicants in the main
and
intervening applications:
Adv L Halgryn SC
Instructed
by:
Matsepes Inc
BLOEMFONTEIN
On
behalf of respondent in the main
and
intervening applications:
Adv F Janse Van Rensburg
Instructed
by:
Stuart Van der Merwe Inc
c/o Horn & Van
Rensburg
BLOEMFONTEIN