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[2016] ZAGPPHC 414
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Mauss v Holiasmenos (82430/2014) [2016] ZAGPPHC 414 (10 June 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NUMBER: 82430/2014
10/6/2016
Reportable:
No
Of
interest to other judges: No
Revised
In
the matter between:
MAUSS
EGON CARL
WALTER APPLICANT
and
HOLIASMENOS
THEODORA RESPONDENT
JUDGMENT
MPHAHLELE,
J:
[1]
This is the return day of a provisional order of sequestration
granted against the respondent by Rabie J on 14 October 2015.
The
applicant seeks confirmation of the rule
nisi.
[2]
The applicant's claim is based on a judgment of the Gauteng Local
Division granted by Victor J on 26 October 2011 in the sum
of £130
000-00. The respondent admits that the applicant has a claim as
contemplated in section 9(1) of Insolvency Act 24
of 1936 ("the
Act"). The respondent further admits that he has committed an
act of insolvency and that he is insolvent.
[3]
By his own admission, the respondent's liabilities amount to R29 304
637-34, R19 S34 972-00 of which is secured by way of bonds
on his
immovable properties. The respondent owns two immovable properties
which are situated in Atholl, Sandton ("Atholl property")
and Athens, Greece ("Athens property").
[4]
The respondent bought the Atholl property on 11 July 1987 for an
amount of R643 500-00. In order to secure the purchase price
for the
property and for additional business loans, ABSA bank advanced him
the sum of R1 530 000-00, which was secured by way of
a mortgage
loan. The said bond was eventually cancelled and replaced with
two bonds as security for advances of RS 000 000-00
and R2 000 000-00
registered in favor of South African Bank of Athens and Credit Smith
respectively. The outstanding bond on the
property is R3 138 454-00.
The property is valued at approximately R5 000 000-00 and if sold at
a forced sale the maximum which
will be obtained is R3 138 454-00.
The respondent has marketed the property for over two years and the
maximum offer received is
R4 800 000-00.
[5]
The Athens property is valued at £250 000-00. A bond is
registered on the property in favor of the National Bank of Greece
in
the sum of £2 200 000-00. The respondent defaulted in his
obligations with the National Bank of Greece and as a result
judgment
was granted in this regard in the sum of £802 579-43, which
amount is said to be still outstanding.
[6]
The respondent claims to own no further assets, movable or otherwise,
other than his cellular phone and clothes.
[7]
The respondent contends that, if not placed in sequestration, he will
be able to generate an income of between R100 000-00 and
R150 000-00
per month by rendering consultancy services in the restaurant
industry which would enable him to substantially reduce
his debt over
a period of a few years, at appreciable sums per month.
[8]
The respondent's son is apparently in a position to pay the South
African Bank of Athens bond instalments on the Atholl property
in
exchange for the respondent allowing him to reside on the property.
His son is apparently already covering all of the running
costs and
utilities.
[9]
The respondent submits that this would be far more advantageous than
the sale under sequestration which would benefit no creditor,
other
than the first bondholder, the South African Bank of Athens. The
respondent maintains that this creditor could be paid by
simple
foreclosure proceedings, instead of sequestration, with no impact on
other creditors.
[10]
As a result, the respondent is opposing the confirmation of the rule
nisi
on the basis that the applicant has been unable to show
an advantage to creditors as required by section 12 of the Act.
[11]
In terms of section 12(1)(c) of the Act a court will only grant a
final order if it is satisfied that advantage to creditors
is shown
in the application.
[12]
In
Meskin
& Co
v Friedman
1948 (2) SA 555
0/V) at
559 it is stated:
'in my opinion, the facts put 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. It is not necessary to prove that the insolvent has any
assets.
Even if there are none at all, but there are reasons
for thinking that
as a
result of enquiry
under the Act
some may be revealed or recovered for the benefit of creditors; that
is sufficient’.
[13]
According to the records of the Companies and Intellectual Property
Commission ('the CIPC"), the respondent is a member
of the
following entities:
· Theodore
Holiasmenos Restaurants (Pty) Ltd;
· THR Development
(Pty) Ltd;
· Char-Trade 171
cc;
· TH Restaurants
(Pty) Ltd;
· Henry J Macbean
Bar and Grill; and
· Ristorante
Italiano Cape CC.
[14]
The respondent contends that he has no interest, of any value, in any
of the above-mentioned entities. The only entity which
trades at all
or has any asset is Char-Trade 171 CC, the other entities are in the
process of deregistration which according to
the respondent is proof
that they are not trading. The respondent contends that he sold his
members' interest in Char-Trade 171
CC to his son initially for R1,5
million which was later reduced to R640 000-00 due to the entity
suffering a serious drop in value.
[15]
In the application before Victor J on 26 October 2011, the respondent
in his affidavit resisting summary judgment stated that
he was the
majority shareholder in, and director of TH Restaurants (Pty) Ltd. He
further stated that this company operates as the
franchisor of the
Ciao Baby Cucina and Karoo Cattle and Land chain of franchised
restaurants. According to the recent records of
the CIPC, this
entity, as well as the other entities mentioned in paragraph 13
above, were in the deregistration process due to
non-submission of
annual returns. The respondent failed to produce any proof that the
entities are no longer trading.
[16]
On 14 October 2015 Rabie J granted leave to intervene and oppose the
main sequestration application to.five persons alleging
to be
employees of the respondent. They are apparently employed in his sole
proprietary business in different capacities, namely
personal
assistant, administrative manager, receptionist
and two data capturers respectively.
The respective
contracts of employment, signed by the respondent in his
capacity as employer, were
submitted to
court as proof of employment. The last appointment
was made on 01 May 2015. The failure
by the respondent to deal with
the allegations of these intervening parties in his affidavit filed
on the return date as well as
during the hearing of the application
begs more questions.
[17]
The applicant is adamant that the respondent's conduct points to
questionable transactions which need to be investigated. These
investigations could well establish that the respondent owns more
assets than the ones put before the court.
[18]
What is outstanding in this matter is the failure of the respondent
to fully deal with his various business interests in evidence
before
this court. His conduct begs questions. He failed to deal with the
status of the various entities in which he has interest.
He should
have at least produced proof from his auditors that the companies are
not in operation, or the last financial statements
of the entities.
There is nothing before me to support his reason for reducing the
purchase price in the sale of his members' interest
to his son. The
alleged serious drop in value of the interest and the reasons
therefor are therefore not accepted. Of most concern
is the failure
of the respondent to deal with allegations by the intervening parties
who claim to be his current employees.
[19]
The circumstances of this matter suggest that the respondent has
something to hide and the investigations into his financial
position
as suggested by the applicant could bring more assets to light. This
seems to be a proper case that falls squarely within
the passage I
quoted in paragraph 12 above in the matter of
Meskin
& Co.
v Friedman.
[20]
I am therefore satisfied that the advantage
to creditors as envisaged in section
12(1)(c)
of the Act has been proved.
[21]
In the end I hereby confirm the rule granted by Rabie J on 14 October
2015.
[22]
In addition to the entities mentioned in paragraph 13 above, the
nature and status of the respondent's sole proprietary business
needs
to be investigated.
__________________________
SS MPHAHLELE
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
Counsel
for Applicant:
Adv. AG South SC
Instructed
by:
Jacobson & Levy Inc., Pretoria
Counsel
for Respondent:
Mr. C Bolio
Instructed
by:
Biccari Bolio mariano Inc , Pretoria
Date
heard:
4 May 2016
Date
of judgment:
10 June 2016