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[2016] ZAGPPHC 490
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Ex Parte Fuls and Others (28761/16; 36624/16; 36626/16; 36636/16) [2016] ZAGPPHC 490; 2016 (6) SA 128 (GP) (23 June 2016)
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case
No’s: 28761/16
36624/16
36626/16
36636/16
DATE:
23/6/2016
In
the ex parte applications of:
MARIA
CATHARINA
FULS
Applicant
(ID:…)
DIRK
JOHANNES
MALAN
Applicant
(ID:
…)
BAKOALIYE
CHRISTABEL
THULARE
Applicant
(ID:
…)
CARINA-MARI
SCHOLTZ
Applicant
(ID:
…)
JUDGMENT
VAN NIEKERK, AJ
[1]
The remedy available to an insolvent in terms of
sections 3(1)
of the
Insolvency Act 24 of 1936
, referred to as “voluntary surrender
of Estate”, has been the subject of various judgments in
different divisions of
the High Court, and a recurring theme of these
judgments is the one of abuse of that remedy to the detriment of
creditors. In this
regard see
E.P. Erasmus and Another
2015
(1) SA 540
(GP) and the authorities referred to therein.
[2]
In the Erasmus judgment referred to
supra
, Bertelsmann
J extensively quote from other judgments on the same topic, and
highlight the various forms of abuse of the process,
and the
unacceptable features of these applications that have been repeatedly
referred to by the Courts. Generally stated, Courts
are faced with
these applications on a daily basis, and the majority of these
applications leave serious doubt whether the granting
of the relief
sought will be to the benefit of the creditors. In
E.P. Amtzen
2013 (1) SA 49
(KZP) Gorven J referred to these applications as “…..
a fledling cottage industry …”. Suffice it to say
that
the unacceptable features and abuse referred to in the aforementioned
judgments have not disappeared and if anything, the
“fledling
cottage industry” has grown into a profitable one.
[3]
The applications
in casu
are not different to those
referred to in the other judgments referred to
supra
.
In three of the matters
in casu
the founding affidavits
are virtually identical and the same valuator was employed to value
furniture and household goods at values,
which, in my opinion is
unrealistically optimistic, clearly intended to achieve the minimum
dividend requirement of 20 cent in
the rand. It is not surprising to
note that in those applications, the same firm of attorneys represent
the applicants. In all
these matters in casu, the only realisable
assets consists of moveable assets with minimal value. In all these
matters there are
lists of creditors, the nature and extent of which
objectively illustrate that the reason for each of the Applicant’s
financial
woes is the fact that they all to readily availed
themselves of credit on offer, and did not proverbially cut their
cloth according
to their means.
[4]
It is trite law that the Applicants should satisfy the court that the
surrender of their estates will be to the advantage of
their
creditors. I am not satisfied that, on the objective facts as set out
in each of the applications, and having regard to the
remarks of
Bertelsmann J. in paragraph 4 of the Erasmus judgment
supra
,
there is any prospect of an advantage to creditors in these
applications.
[5]
Aside from the aforesaid, I am of the view that the Applicants have
failed to satisfy the requirement of proving an advantage
to
creditors, for the following reasons:
[5.1] Some 80 years after
commencement of the
Insolvency Act, the
National Credit Act 34 of
2005 (“NCA”), with date of commencement being 1 June
2006, was enacted to inter alia promote
a fair marketplace for access
to consumer credit, to generally regulate consumer credit, and to
provide for debt re-organisation
in cases of over-indebtedness.
[
Vide
: pre-amble to Act 34/2005]
[5.2] In terms of the
NCA, a debtor is afforded various remedies when faced with a
situation where the NCA apply and the credit
consumer is unable to
pay his/her debts. A consumer may even be completely relieved from
his/her obligations in terms of a credit
agreement if it is to be
found that the credit was granted recklessly (Section 83 of the NCA).
Most importantly, when a consumer
is unable to comply with his/her
obligations in terms of a credit agreement due to over-indebtedness,
a mechanism is provided for
in the NCA in terms whereof the consumer
may apply for a remedy referred to in the NCA as “debt review”
(Sections 85
and 86 of the NCA). In terms of this procedure, should
it be found that a consumer is indeed over-indebted, a re-arrangement
of
the debtors obligations may be effected, which includes inter-alia
a postponement of obligations in terms of a credit agreement,
a
restructuring of payments, or even an order that a credit agreement
is reckless and thereby exonerating the consumer therefrom.
(Section
83 of the NCA).
[5.3] This procedure in
terms of the NCA is clearly in the interest of the debtor and the
creditor, and to be preferred over the
remedy in terms of
section 3
of the
Insolvency Act, for
the reason that the debtor is relieved
from financial strain, but is still required to meet his/her
contractual obligations, wholly
or in part, and the creditor on the
other hand has a better prospect of receiving at least a substantial
portion of the outstanding
liabilities owed to it by the debtor, if
not all, albeit at a later stage. This is clearly a situation which
is objectively far
more advantageous to a creditor than the situation
referred to in the judgments
supra
, where the creditors
often would not even consider to file a claim against the insolvent
estate for fear of the risk of having
to eventually contribute to
costs.
[6]
In my opinion it is therefore incumbent on an applicant in an
application for voluntary surrender, where it is required to
illustrate advantage to creditors, to make a full disclosure of at
least the following:
[6.1] Whether or not the
Applicant availed himself/herself of the procedures afforded in the
NCA for debt review prior to the application
being proceeded with,
and if not, full reasons for such failure.
[6.2] A comprehensive
report of the debt counsellor involved, explaining what procedures
were followed, and whether or not the Applicant
complied with any
debt restructuring arrangements.
[7]
In my opinion, it is difficult to foresee how an Applicant in an
application for voluntary surrender of his/her estate would
be able
to convince a Court that the proper application and adherence to
arrangements in terms of
sections 86
-
88
of the NCA is not to be
preferred in the interest of creditors, compared to the surrender of
his/her estate.
[8]
Where an application of this nature lacks averments in the respect as
set out
supra
, it does not comply with the requirement
that the Applicant should satisfy the Court that it is in the
interest of his/her creditors
that the estate should be surrendered,
and should accordingly be dismissed.
[9]
In casu
, each of the Applicants listed creditors which
prima facie
appears to have entered into credit
agreements with the respective Applicants which falls under the
provisions of the NCA. No allegations
are made in any of the
applications to convince me that, in the circumstances,
sections 3
of
the
Insolvency Act is
to be preferred to the benefit of the
creditors, instead of a proper application of debt relief in terms of
NCA.
[10]
In the premises the applications are dismissed.
_________________
PA
VAN NIEKERK
ACTING
JUDGE OF THE HIGH COURT