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[2016] ZAGPPHC 645
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Kleinfontein Boerebelange Koopertief Beperk v Zeevaart (A912/2014) [2016] ZAGPPHC 645 (29 July 2016)
HIGH COURT OF SOUTH
AFRICA (GAUTENG
DIVISION, PRETORIA)
DATE: 29 JULY
2016
Case
no.
A912/2014
In
the matter between:
KLEINFONTEIN
BOEREBELANGE KOOPERATIEF
BEPERK
Appellant
and
A.
J. ZEEVAART
Respondent
JUDGMENT
RABIE
J
1.
This
is an appeal by the appellant against the judgement and order of this
court on 27 October 2014 dismissing the appellant's
application for
the sequestration of the respondent.
2.
The court a quo accepted that the appellant was a creditor of
the respondent and had committed a deed of insolvency but
nevertheless
exercised its discretion to refuse to sequestrate the
respondent. The appellant raised a number of grounds of appeal
which mainly
relate to the exercise of the aforesaid discretion and
the grounds upon which it was based.
Background:
3.
It is necessary to briefly refer to the background of the
matter in order to appreciate the circumstances which led the court
a
quo to exercise its discretion in the manner which it did.
4.
According
to the appellant it is a duly registered co-operative society which
established a settlement on two of its properties
namely the farms
Donkerhoek and Kleinfontein in which its members would reside. The
persons living in this community are, as
members of the appellant,
contractually bound to it and subject to its statutes.
5.
The respondent was a member of the appellant until 11 August
2007 when he was expelled as a member of the appellant. This
decision
was preceded by a suspension of his membership on 20
November 2008. The result of the termination of his membership was,
inter
alia, that he could no longer reside in the settlement.
6.
The respondent objected to, inter alia, the autocratic manner
in which the appellant's business was conducted by its management
and the unjust manner in which he was treated and consequently did
not accept the termination of his membership. On 8 November
2007 he
consequently issued summons out of this court against the appellant
for an order reviewing and setting aside his suspension
as well as
the termination of his membership. The appellant instituted a
counterclaim for the eviction of the respondent.
7.
The matter went on trial and on 4 May 2011 this court, per
Lauw J, dismissed the respondent's claim with costs and granted the
counterclaim with costs. The respondent's applications for leave to
appeal to the trial court as well as the Supreme Court of
Appeal
were dismissed with costs.
8.
Part of the order of Lauw J was to the effect that an
opportunity was granted to the respondent to sell the two fixed
properties
attached to his shareholding in the appellant. In the
event of him being unsuccessful in doing so, the parties were
granted
an opportunity to come to an agreement on what a fair
amount of compensation would be for the two properties which the
appellant
had to pay to the respondent. In the event of the parties
being unable to agree on such an amount a mechanism was put in
place
to determine such an amount which would then be binding upon
the parties. It was further ordered that the respondent had to
leave the community within two months after the compensation
amount had been paid to him and, should he refuse to do so,
the
appellant could execute the eviction order against him.
9.
The
value of the respondent's properties was established through the
aforesaid process to be R820 000,00. It is common cause that
this
amount has not yet been paid by the appellant to the respondent.
1O.
The costs order made by Lauw J against the respondent on 4 May 2011,
reads as follows:
"10.
Vir doeleindes van verhaling van enige kostebevel ten gunste van die
eerste verweerder (appellant) van die eiser (respondent),
sal die
eerste verweerder nie geregtig wees om beslag te le op enige woning
wat die eiser aanskaf met die vergoedingsbedrag nie,
of op daardie
gedeelte van die vergoedingsbedrag wat die eiser benodig vir die
aanskaf van so 'n woning nie."
11.
It is common cause between the parties that the purpose and
effect of the aforesaid cost order were to protect the compensation
awarded to the respondent, at least to the value of alternative
accommodation. It would seem that if this were not done, the
appellant's actions would amount to an arbitrary expropriation
without compensation. It was common cause that the protection
extended not only to alternative accommodation once it was acquired
but also in the interim to the amount of R820 000,00 itself.
12.
It was stated on behalf of the appellant that the taxed costs
in respect of the trial and the application for leave to appeal to
the trial court, amounted to R328 349,26, and the costs in respect
of the application for leave to appeal to the Supreme Court
of
Appeal to R17 750,85.
13.
The appellant tried to execute the aforesaid first cost order
against the respondent but the Sheriff s return was one of nulla
bona.
14.
This prompted the appellant to follow a different course of
action, namely to sequestrate the respondent, in order to attempt to
put its hands on the compensation amount of R820 000,00 which was
otherwise protected against attachment by the aforesaid order
of
Lauw J. The appellant itself stated in its application that in the
event of sequestration, the respondent's compensation for
his shares
in the appellant or in any property which he may purchase for such
amount, would no longer be protected and would
be available for
distribution Aamongst the creditors of his insolvent estate.
The
Application for Sequestration:
In
its application for sequestration the appellant mainly relied on the
nulla bona return of the Sheriff which constituted a
deed of
insolvency. The appellant also referred to affidavits by the
respondent in which he stated that he had sold the contents
of his
house and outbuildings to his wife for R45 000,00. This, according
to the appellant, constituted a transaction which
may be set aside
as preferring one creditor above another. There were also
suggestions by the appellant that the respondent
may have other
creditors to whom he had paid amounts which could suffer the same
consequences.
I
agree with the remarks of the court are quo that the facts
surrounding the two last mentioned aspect are quite vague and not
sufficient to support an order for sequestration of the respondent.
In an opposed affidavit filed by the respondent it is stated
that
he is 80 years old and that he was married to his wife out of
community of property in Holland during 1971. I doubt very
much
whether all of the contents of the common home would be found to
belong to the respondent alone. In fact, I doubt whether
it would
really be possible to establish which of the assets, the value of
which totals R45 000,00, belongs to the respondent
and which to his
wife of 45 years. Whatever the result, it would hardly contribute
anything in respect of an advantage to
creditors.
The
main ground upon which to the appellant could therefore rely for the
sequestration of the respondent is the cost order in
his favour
which could not be satisfied.
It
is important to note that although the cost order in favour of the
appellant could not be satisfied, the court a quo, correctly
in my
view, found that on the papers before the court, the respondent is
not factually insolvent. He has an undisputed claim
of R820 000,00
against the appellant plus interest thereon from the date on which
this amount was established. This far exceeds
the cost orders, even
on the appellant's version thereof, which I should add, is disputed
by the respondent.
The
Discretion:
19.
In exercising its discretion the court are quo referred to the
protection of the compensation amount which would be broken if the
respondent were to be sequestrated. The court referred to the
personal circumstances of the respondent and the fact that he
and
his wife, who have no pension income, would have very little left if
the compensation amount were to be used to satisfy the
cost orders
against him. I agree with his statement that their ability to obtain
alternative housing would be drastically curtailed
in such event.
The court also considered the interests of the appellant in the
event of it not being able to recoup all its costs
and the effect
thereof on its remaining members. These are all relevant factors to
be considered.
20.
The main reason for exercising its discretion in the way it
did, related to the reasons and purpose of protecting the
compensation
award by the trial court. I agree with the court a quo
that if the main reason, or in fact the only reason, for attempting
to
sequestrate the respondent, is to bypass the protection of the
compensation order, such would constitute exceptional grounds for
exercising the court's discretion against ordering the
sequestration of the respondent.
21.
I
agree with the court a quo that the trial court had already decided
the respondent's right to housing and its right to compensation
for
its immovable property. The trial court considered those rights
with reference to the appellant's right to be paid its costs
of
suit. I agree with the court a quo that the trial court's conclusions
and decision in this regard weighs very heavily in favour
of
exercising a discretion against the sequestration of the
respondent.
In
my view the exercise of its discretion by the court a quo cannot be
faulted. The decision by the appellant to sequestrate
the
respondent is nothing other than a deliberate ploy to avoid the
consequences of an order of this court. That weighs heavily
in
favour of exercising a discretion against the granting of a
sequestration order. I cannot but add that it leaves a bad taste
in the mouth when considering that it is the appellant's own
deliberate refusal to pay the amount of R820 000,00 due to the
respondent by order of this court which resulted and still results
in the respondent not being able to pay anything towards
the cost
orders against him. By refusing to pay what is due to the
respondent, the appellant has manufactured the respondent's
deed of
insolvency, knowing full well that the respondent would not be
able to pay anything towards the appellant's costs
without such
payment to him. The appellant was initially extremely keen to
expell the respondent and his wife from the community
on
Kleinfontein but now, by its own refusal to comply with a court
order, it is preventing the respondent from moving away,
and all for
its own financial reasons.
23.
As far as costs are concerned there is no reason why the
costs, if any, should not follow the outcome of this appeal.
24.
Having regard to the aforesaid, the following order is made:
1.The
appeal is dismissed with costs.
C.P.
RABIE
JUDGE OF THE HIGH
COURT
MOLOPA
J
and MABUSE
J
concurred.