About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2015
>>
[2015] ZAGPPHC 525
|
|
Absa Bank Limited v Jordaan and Another (25539/2014) [2015] ZAGPPHC 525 (17 July 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO: 25539/2014
DATE:
17 JULY 2015
In the matter
between:
ABSA BANK
LIMITED
........................................................................................
Intervening
Creditor
And
CHRISTOFFEL
WILHELM
JORDAAN
..................................................................
First
Respondent
SANDRA
JORDAAN
...............................................................................................
Second
Respondent
In the Ex Parte
Application of:
CHRISTOFFEL
WILHELM
JORDAAN
......................................................................
First
Applicant
SANDRA
JORDAAN
...................................................................................................
Second
Applicant
JUDGMENT
TEFFO, J
[1] The applicants
seek an order for the voluntary surrender of their joint estates.
They are married to each other in community
of property.
[2] The application
is complete and the procedural requirements have been met in terms of
section 4 of the Insolvency Act 24 of
1936 (“the Act”).
[3] Absa Bank
Limited whom I will refer to as the “Intervening Creditor”
brought an application for leave to intervene
and opposes the
application on the following grounds: -
3.1 There was a
previous application by the same applicants under case number
45948/2013 which application was on 24 March 2014
struck off the roll
due to the absence of an allegation regarding jurisdiction. The
applicants withdrew the aforesaid application
by notice without
complying with the provisions of section 7(1) of the Act and also
tendering the costs thereof to it.
3.2 According to the
applicants’ version in the application and the statement of
affairs, they are not insolvent.
3.3 The applicants
cannot utilise the same statement of affairs which they used a year
ago for the previous application.
3.4 The applicants
cannot make use of a valuation of property which was at the time,
almost a year old.
3.5 The applicants
in their replying affidavit make a recalculation of the advantage to
creditors in terms of which there would
be advantage to concurrent
creditors in the amount of 8 cent per R1,00.
The application for
leave to intervene is not opposed.
Section 6 of the Act
reads as follows:
“(1) If the
court is satisfied that the provisions of section 4 have been
complied with, that the estate of the debtor in
question is
insolvent, that he owns realisable property of a sufficient value to
defray all costs of sequestration which will in
terms of this Act be
payable out of the free residue of his estate and that it will be to
the advantage of creditors of the debtor
if his estate is
sequestrated, it may accept the surrender of the debtor’s
estate and make an order sequestrating that estate.
(2) If the court
does not accept the surrender, or if the notice of surrender is
withdrawn in terms of section 7, or if the petitioner
fails to make
the application for the acceptance of the surrender of the debtor's
estate before the expiration of a period of 14
days as from the date
specified in the notice of surrender, as the date upon which
application will be made to the court for the
acceptance of the
surrender of the debtor’s estate, the notice of surrender shall
lapse and if a curator bonis was appointed,
the estate shall be
restored to
the debtor as soon
as the Master is satisfied that sufficient provision has been made
for the payment of all costs incurred under
subsection (2) of section
5. ”
[6] Section 7 of the
Act provides as follows: -
“(1) A notice
of surrender published in the Gazette may not be withdrawn without
the written consent of the Master.
(2) A person who has
published a notice of surrender in the Gazette may apply to the
Master for his consent to the withdrawal of
the notice, and if it
appears to the Master that the notice was published in good faith and
that there is good cause for its withdrawal,
he shall give his
written consent thereto. Upon the publication, at the expense of the
applicant, of a notice of withdrawal and
of the Master’s
consent thereto, in the Gazette and in the Newspaper in which the
notice of surrender appeared, the notice
of surrender shall be deemed
to have been withdrawn. ”
[7] In Absa Bank
Limited v Ackerman, in re Ex parte Ackerman, 2014 JDR 1435 (GP) in
order to determine whether the applicant in
a voluntary surrender
application was insolvent, Hiemstra AJ held that in many cases courts
have in the context of voluntary surrender
of estates accepted the
surrender where it appeared from the evidence that the debtor was
unable to pay his debts, in other words,
where he had been found to
have been
commercially
insolvent, as opposed to being actually insolvent [Ex parte Fouche
1956 (2) SA 116
(O), Ex parte Deemter
1962 (2) SA 228
(E)].
[8] In Ohlson’s
Cape Breweries Ltd v Totten
1911 TPD 48
at 50 the court held that the
word “insolvent” must be taken to mean that the
liabilities of the debtor, fairly estimated,
exceed the value of his
assets, fairly valued.
[9] The authors of
Meskin, Insolvency Law para 3.2 made the following remarks: -
“But the mere
fact that the evidence adduced by the debtor disclosed that the value
of his property exceeds the amount of
his liabilities is not decisive
against him where it is established that nevertheless he is without
funds to pay his debts in full
and it is improbable that such
property will realise sufficient for such purpose. A full bench of
the Natal Provincial Division
in Ex Parte Harmse
2005 (1) SA 322
at
324E-G held that this passage correctly states the law. ”
[10] In Schlesinger
v Schlesinger
1979 (4) SA 342
(W) 394 A it was held that due to the
fact that an application for voluntary surrender is brought on an ex
parte basis, that is
reason enough for the applicants to disclose all
material facts which might affect a court in coming to a decision.
[11] At paragraph 7
of its judgment, the court in Ex Parte Bouwer and similar
applications
2010 JOL 26201
(T) the court said the following: “With
regard to non-disclosure of income, it suffices to state the obvious.
Surrender of
an estate involves, among others a financial inquiry. In
my view, for the court to determine whether the acceptance of the
surrender
of the estate would be to the advantage of creditors,
regard should be had to various factors, among which is the current
income
of the applicant. ”
In Fesi and Another
v Absa Bank Ltd
2000 (1) SA 499
(C) it was made clear that the
present situation of the applicant needs to be presented to court. In
paragraph 502H-I the following
was said: -
“The
applicants did not disclose their present salaries. Mr Botha argued
that salaries were not assets and that there was
no duty on the
applicants to disclose them. There can be no merit in Mr Botha’s
argument. It disregards the ‘good faith’
expected of
applicants in the ex parte application ...”
The Nel v Lubbe
1999
(3) SA 109
(W) 112A-B the court stated the following:
“Always
relevant will be the prices of comparable properties in the same area
at similar forced sales held at or about the
same time. Naturally
appropriate descriptions of the improvements will have to be
furnished so that the value can be accessed on
a comparable basis. ”
In response to the
contention by the Intervening Creditor relating to section 7(1) and
(2) of the Act, counsel for the applicant
referred the court to the
judgment of Ex Parte Viviers et UXOR
2001 (3) SA 240
(T) where a
submission was made on behalf of the appellant to the effect that
previous notices of surrender could not be withdrawn
before the
present application was instituted because such “withdrawal”
could not occur since, in terms of the provisions
of section 6(2) of
the Act, such notices have lapsed as a result of the passage of time
as well as the fact that the court did
not accept an earlier
surrender of the applicant’s estate. The court then held that
the Intervening Creditor’s submission
required a proper
understanding of the terms “to withdraw” and “to
lapse”. It further held that the dictionary
meaning of
“withdraw” was “to discontinue, cancel or retract”,
while that of “lapse was “to
become void by non-
fulfilment of a condition.” The court arrived at the conclusion
that it was clear that the previous notices
of surrender became void
because of failure to make the necessary application within the
prescribed time limit. The issue for determination
was whether it was
possible to withdraw a notice which had already lapsed. The court
then answered the question in the negative
concluding that it was not
possible to withdraw a notice that had lapsed. By so saying counsel
for the applicants in the present
matter argued that it was not
possible to withdraw the previous notice of surrender as required by
section 7 of the Act because
it had lapsed. I find merit in this
argument taking into account that after the notice of surrender was
published in the Gazette
and the newspaper, on the day of the hearing
of the application, ABSA bank limited indicated its intention to
intervene in the
application. The matter was then postponed to 24
March 2014 on which date the application was again not heard but
struck off the
roll. At that time the period of fourteen days from
the date specified in the notice of surrender to the date upon which
the application
for surrender was to
be made, lapsed while the applicants failed to make the application
for the acceptance of the surrender of
their estates. The notice for
the surrender of the applicants’ estates that was published in
the Gazette and the newspaper
has therefore lapsed. It would then
have been impossible to withdraw the notice of surrender that has
already lapsed in terms of
section 7.
[15] At paragraphs
4.8 and 4.9 of their founding affidavit, the applicants aver that
both their salaries combined equal to a total
sum of R19 855,99 while
their liabilities equal to R17 938,55. They contend that the
Intervening Creditor has already alluded to
the fact that they owe
costs of the previous application estimated at R30 000,00. It was
submitted that the fact that there is
a surplus of R2 000,00 does not
mean that they are not insolvent. They contrended that they are
commercially insolvent as opposed
to being factually insolvent. In
their application the applicants alleged that they are not in a
position to pay their debts. The
fact that their assets exceed their
liabilities with an amount of R2 000,00 can not be used against them
where it is clear that
they cannot pay their debts. I accept under
the circumstances that they are commercially insolvent as against
being factually insolvent
(Absa Bank Limited v Ackerman supra).
[16] As regards the
use of an old statement of affairs and a valuation of property,
counsel for the applicant referred to the case
of Ex Parte Viviers
supra where the court had to determine whether it was legally
permissible for an applicant to use the same
statement of affairs in
subsequent applications for a voluntary surrender of his estate. The
court held that because there was
no prohibition found in the Act
against reusing the same statement of affairs for a subsequent
application, there was no reason
to prohibit the applicant from using
the same statement of affairs , facts and reasons for the applicant’s
insolvency in
any event alleged to have remained unchanged. In so far
as there is no prohibition in the Act of using the same statement of
affairs
in a subsequent application for the surrender of a party’s
estate, I will accept a statement of affairs that was used within
a
reasonable time in an application where the situation of the
applicant has not changed.
[17] In the present
application there is no allegation that the situation of the
applicants had or had not changed. The statement
of affairs used and
the valuation report are almost a year old. Surely the situation of
the applicants and the value of their properties
could have changed
in a year. Inflation is a factor after a year and the market value of
the immovable property in the area could
have either risen or gone
down. I would accept the use of the valuation report and or a
statement of affairs that are not unreasonably
old. I find a year to
be an unreasonably long period. Case law referred to supra is clear
that recent salary advices and prices
of comparable properties in the
same area at similar forced sales held at or about the same time are
determining factors to enable
the court to arrive at a proper
decision whether the acceptance of the surrender of the estate would
be to the advantage of creditors.
From the information disclosed in
this application I am not satisfied that the applicants own
realisable property of sufficient
value to defray all costs of
sequestration which in terms of the Act will be payable out of the
free residue of their estate. I
am also not satisfied that it will be
to the advantage of their creditors if their estates are
sequestrated. I therefore do not
find it necessary to deal with the
last ground for the opposition of the application by the Intervening
Creditor. I am of the view
that the applicants by failing to
disclose all
material facts which might affect the court in coming to a decision
have failed to make out a case for the voluntary
surrender of their
estate. The application should therefore fail.
[18] In the result I
make the following order:
18.1 The application
is dismissed with costs which costs include the
costs of the
previous application that was withdrawn.
J. TEFFO JUDGE OF THE HIGH COURT
(GAUTENG DIVISION, PRETORIA)
HEARD ON:
FOR THE APPLICANTS: INSTRUCTED BY:
4 November 2014 Adv B Lee
John Walker Attorneys
FOR THE INTERVENING CREDITOR : Adv R
Raubenheimer
INSTRUCTED BY : DATE OF JUDGMENT :
Tim Du Toit & CO Inc 17 July
2015