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[2016] ZAGPPHC 49
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Avantech Ltd v Fryer and Another (70750/14) [2016] ZAGPPHC 49 (5 February 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
N0.70750/14
5/2/2016
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
AVANTECH
LIMITED APPLICANT
And
WILLIAM
HENRY CHARLES
FRYER 1
ST
RESPONDENT
CHARMAINE
FRYER 2
nd
RESPONDENT
JUDGEMENT
SEMENYA
AJ
[1]
AVANTECH LIMITED (Applicant) is part of a group of Companies owned by
Zambian Cuturi family, registered and conducting its business
in the
Republic of Zambia. Mr Carlo Cuturi, the deponent in both Applicant's
founding and replying affidavit, is one of its Directors.
[2]
1
st
and 2
nd
Respondents, both of whom South
African citizens, are married to each other out of community of
property. It appears from the papers
filed of record that the order
sought in this application is in respect of 1
st
Respondent
only. It is undisputed that 1
st
Respondent is the owner of
two immovable properties situated within this court's area of
jurisdiction.
[3]
Applicant seeks an order for the compulsory sequestration of 1
st
Respondent's estate in terms of the provisions of the
Insolvency Act
24 of 1936
on the basis that 1st Respondent has, as Applicant's
employee, misappropriated a large sum of money from applicant and
also that
he has committed an act of insolvency.
[4]
It is common cause that during January 2013, Applicant employed 1
st
Respondent as its Chief Financial Officer (CFO). It is further common
cause, albeit for different reasons, that 1
st
Respondent abruptly left his employment during February 2014 and
returned to South Africa with his family.
[5]
The eight claims of misappropriation of funds relied upon by
Applicant are that, as CFO of the Company, 1
st
Respondent
transferred monies to the tune of approximately R5 million from
Applicant's bank account into the accounts of persons
or entities
residing or conducting businesses in South Africa, to whom 1st
Respondent had a connection. That the transactions concerned
were
done without the knowledge and consent of the company's Directors.
[6]
Applicant further alleges that in order to cover his ill dealings,
1
st
Respondent deleted the names of the actual recipient
of the said money and replaced them with names of entities that
Applicant
normally conducted business with, such as Zambian Revenue
Authority (ZAR) or OHL Danzas Air (a courier company). According to
Applicant,
1
st
Respondent was able to transfer this money as he was in possession of
a secret pin code of its ASSA bank account so as to enable
him to
carry out his duties. Respondent's initials appear on the alleged
forged statements.
[7]
During February 2014, Applicant employed the services of a chartered
accountant who, during his investigations of the financial
status of
the Company, raised some issues regarding the manner in which money
were transferred from Applicant's bank accounts to
other entities.
Applicant alleges that the issues and questions that the said
accountant asked Respondent, led to the latter's
sudden departure
from Zambia.
[8]
1
st
Respondent admits that the money referred to in
Applicant's eight claims was indeed transferred to entities he had
some connection
with. However, he alleges that the said money was due
and payable to him as either bonuses, overboard payment or incentives
as
agreed upon between him and Applicant. He denies that he
fraudulently misappropriated Applicant's funds and alleges further
that
all payments were done with the knowledge and consent of
Applicant's Directors.
[9]
In support of his allegations, 1
st
Respondent refers to a
contract he concluded on Applicant's behalf with Bokomo Zambia which
made him entitled to a commission of
R4 million as well as the
collection of money owed to Applicant by Barrick Gold Lumwana, a
mining Company that did business with
Applicant. This happened when
his position in the company changed from CFO to Commercial Manager on
1 July 2013.
[10]
1
st
Respondent
denies that he is the person who forged bank statements with the
purpose of misrepresenting the actual recipient of
the money. He
alleges that other employees of Applicant, including its Directors,
were in the habit of making copies of those statements.
He further
denies that he was provided with a pin code to Applicant's bank
account which he could have used to defraud it.
[11]
According to 1
st
Respondent, his relationship with Applicant
turned sour when he began to raise concerns about the dubious manner
in which it was
doing its business with Barrick Gold Lumwana. The
concerns he raised caused a lot of tension and harassment against him
by Applicant's
Directors, which led to his sudden departure from
Zambia and to return to South Africa. He alleges that he is now
staying in Nigeria.
[12]
Section 9
of
Insolvency Act provide
that-
"(1) A creditor (or
his agent) who has a liquidated claim for not less than fifty pounds,
or two or more creditors (or their
agent) who in the aggregate have
liquidated claims for not less than one hundred pounds against a
debtor who has committed an act
of insolvency, or is insolvent, may
petition the court for the sequestration of the estate of the
debtor"'
[13]
In
Kleinhans v van der Westhuizen NO
1970 (2) SA 742
(A) at G
it
was held that a liquidated claim means a claim whereof the amount is
fixed either by agreement, or an order of court or otherwise.
The
court went further to state on page 745 at H that:
"Although claims for
damages (delictual or contractual) are generally are generally in the
nature of unliquidated claims, this
is so only when (as is usually
the case) the monetary value thereof is not already determined, or
likely to be capable of determination
with ease and expedition. In
every case where the monetary value is determined, or is capable of
easy and expeditious determination,
the claim is (or should be)
regarded as liquidated"
[14]
It appears from Applicant's founding affidavit that the investigation
into the company's financial affairs was still ongoing
as at the time
this application was lodged. I am however satisfied that the claim is
capable of easy determination and is therefore
a liquidated claim
despite the fact that the claim is basically a claim for damages. In
any event, the
locus standi
of Applicant is not in dispute.
[15]
Although Respondent admits that the money referred to in this matter
was received on his behalf by persons or entities nominated
by him,
he disputes the allegations by Applicant that he has misappropriated
the said money. Counsel for 1
st
Respondent argued that this fact creates a dispute of fact between
the parties and that this application should be dealt with according
to the so called
Badenhorst rule-(Badenhorst v Northern
Construction Enterprises (Pty) Ltd
1956 (2) SA 346
(T)
where it
was stated that where a respondent disputes his or her liability on
bona fide
grounds, it is improper for an applicant to seek to
recover a disputed debt by sequestration proceedings rather than by
usual action
procedure.
[16]
It was contended on behalf of Applicant that the fact that Respondent
failed to produce documentary evidence to prove that
he was entitled
to commission in
per se
shows that the dispute raised is not
based on
bona fide
and reasonable grounds ground. It was
further submitted that the dispute consist of bold denials or
absolute refusal to tell the
court the truth regarding what he did
when he initialled the forged statements and why he did so in October
2013, after he was
according to his version, appointed Commercial
Manager.
[17]
This argument is in line with what was said in
Wightman t/a JW
Construction v Headfour (PTY) Ltd and Another
[2008] ZASCA 6
;
2008
(3)
SA 371
SCA at 375
[13] that:
"That 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."
[18]
I however do not concur with the argument that the dispute raised by
1
st
Respondent is
based on bold or absolute denials. I find the argument that the
forgery could have been done by other employees or
Applicant's
Directors, who were in the habit of making copies of bank statements,
to be reasonable. This includes the submission
that the transactions
could not have been done without detection by Directors who also had
access to bank accounts It is also reasonable
that he would not have
been in a position to produce supporting documents in view of the
manner in which he left Zambia. On the
contrary, instead of producing
original bank statements, which could have been easily done,
Applicant elected to rely on copies
despite the fact that 1
st
Respondent denies that he is the person who forged them. I also find
that the dispute raised is
bona fide.
[19]
The onus that rest on 1
st
Respondent is not to show that he is not indebted to Applicant, but
that what he is required to show is that the indebtedness is
disputed
on
bona fide
and reasonable grounds.-Kalil
v Decotex (Pty)
Ltd and Another
1998 (1) SA 943
(A).
I find that Respondent has
succeeded in discharging his onus of showing that his indebtedness is
disputed on bona fide and reasonable
grounds and the application
should therefore fail. In my view, there exist real and substantial
disputes which can only be resolved
by way of action proceedings.
[20]
In line with the decision in
Badenhorst
(supra)
I find
that it is improper for Applicant to try and recover a disputed debt
by way of application proceedings as this is clearly
an abuse of
process
[21]
For this reason I make the following order:
1.
Application for compulsory sequestration against
1
st
and 2
nd
Respondents' estates is dismissed with costs.
2.
In
the event of a need for Applicant to bring sequestration application
after finalization of successful action proceedings, it
might be
necessary to supplement the instant sequestration application papers.
______________________
SEMENYA
M.V.
Acting
Judge of the High
Court
of South Africa, North
Gauteng
Division, Pretoria
APPEARANCES
FOR
THE APPLICANT: GRANT AND SWANEPOEL
INSTRUCTED
BY: BEZUIDENHOUT VAN ZVL & ASSOCIATES INC
FOR
THE 1
st
AND 2
nd
RESPONDENTS: SD WAGNENER SC INSTRUCTED BY: MESSRS GEYSER VAN ROOYEN
ARTTONEYS
DATE
OF HEARING: 20 OCTOBER 2015
DATE
OF JUDGEMENT: