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[2013] ZAGPPHC 119
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Huntrex 337 (Pty) Ltd t/a Huntrex Debt Collection Services v Vosloo and Another (46832/2012) [2013] ZAGPPHC 119; 2014 (1) SA 227 (GNP) (8 January 2013)
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
Case
Number: 46832/2012
Date:08/01/2013
In
the matter between:
HUNTREX
337 (PTY) LTD t/a
HUNTREX
DEBT COLLECTION SERVICES
…..............................................
APPLICANT
and
PETRUS
VOSLOO
..............................................................................
FIRST
RESPONDENT
DALLAS
GAYE
VOSLOO
............................................................
SECOND
RESPONDENT
JUDGMENT
A
A LOUW J
Introduction
[1]
There is something so peculiar to the applicant’s sequestration
applications which appear regularly on the motion rolls
of this
court, that one cannot help but “smell a rat”.
[2]
The plaintiff is Huntrex 337 (Pty) Ltd trading as Huntrex Debt
Collection Services (hereinafter “Huntrex”).
[3]
This is an application for the sequestration of the respondents’
estates in accordance with the provisions of
s 9
of the
Insolvency
Act, 24 of 1936
. This application and others by Huntrex that I have
encountered before in the motion court follow a similar pattern.
Huntrex purchases
and takes cession of debts “from reputable
companies” as it is put in the founding affidavit. Thereafter
Huntrex enters
into an agreement with the debtor that the full amount
of the ceded claim be paid in two instalments.
[4]
Failure to pay invariably leads to a judgment in the Cullinan
Magistrate’s Court. A warrant of execution and nulla bona
return follow which creates the basis for an application such as the
present one.
[5]
This application was first enrolled on 25 September 2012 when it was
postponed by Preller J. On 30 October 2012 Potterill J
granted a
provisional order of sequestration against both respondents. I heard
this matter on the return day i.e. 3 December 2012
when ! ordered,
for reasons as will appear hereunder, that the deponent to the
founding affidavit, a director of Huntrex, Gerbrecht
Maria Roos, be
ordered to give evidence on Friday 7 December about the nature of
Huntrex’s business and certain other concerns
I have with these
application, which concerns I mentioned to mr Z Schoeman who normally
appears for Huntrex in these matters.
[6]
Before the hearing of the 7th, I was informed that Mr M C Erasmus SC
will appear and I communicated with him. During a telephone
call I
pointed out to him the aspects which were of concern to me and which
I expected to be addressed in evidence. On 7 December
another
director of Huntrex mr Paul de Beer, elected to give evidence. I
heard his evidence as well as that of his sister Elzani
Coetzer, who
is the attorney of record. I was also furnished with a bundle of
documents - exhibit “A” pages 1-192.
After the hearing,
Mr Erasmus SC provided me with helpful written argument.
[7]
As a first glance at the papers reveals, two persons were
provisionally sequestrated in the same application. The two
respondents
are married out of community of property. It is not
permissible to join two individuals (not married in community of
property)
in an application for sequestration of their respective
estates.
1
This counsel agrees with in his written argument and proposes that
the rule nisi be discharged. This should obviously happen as
the
provisional sequestration order should not have been made in the
first place. In the interests of justice, and having heard
all the
evidence, it is however necessary to go further.
The nature of the ceded
claim
[8]
Paragraph 6.1 of the founding affidavit reads as follows:
“
The
Applicant is a debt collection services company specializing in the
collection of debtors books (which is purchased from reputable
companies) and the collection of the debtors as a result thereof. ”
What
the applicant does not tell the court is that these “reputable
companies” are debt counsellors and the claims purchased
are
all so- called “termination fees” of these counsellors.
Strikingly the agreement in terms of which these claims
are purchased
and ceded is not annexed to the affidavit.
[9]
Paragraph 6.2 of the affidavit then proceeds to state that on 5
December 2011 and at Pretoria, Huntrex entered into an agreement
with
the first and second respondents. In terms of this agreement, it is
alleged, the respondents admitted their liability for
payment of the
amount of R14 441,80 for debt counselling cancellation fees. This
amount had to be paid on or before 31 January
2012. Once again this
agreement is not annexed to the affidavit, as is required.
[10]
I proceed to deal with the relevant agreements which were put before
me in evidence. The first relevant agreement was entered
into between
Independent Debt Counsellors (“INDC”) and Huntrex as
represented by the witness Paul de Beer on 30 November
2011. In terms
of this agreement Huntrex purchased “the claim” described
as “statutory debt counselling cancellation
fees” in the
amount of R14 441, 80 for R1 500. Clause 4 of this agreement obliges
INDC to deliver its entire file about “the
consumer” (in
this case the respondents) to Huntrex.
[11]
An annexure to this agreement was entered between the same parties on
the same date in terms of which “the said claim”
was
ceded to Huntrex.
[12]
Exhibit “A188-192” is the agreement referred to (but not
annexed) in paragraphs 6.2; 6.2.1; 6.2.1 [sic]; 6.2.3;
6.2.4; and
6.2.5. The only specific reference to a clause of this agreement is
to be found in paragraph 6.2.5. This refers to clause
12 of the
agreement. Such a clause does not exist! The agreement has 9 clauses
only. It is titled “Acknowledgement of Debt”.
[13]
Be that as it may, in terms of this agreement the respondents admit
their indebtedness to Huntrex in the amount R 14 441,80
for debt
counselling cancellation fees, together with all legal costs on a
scale as between attorney and client, incurred until
the date of
signing of that document. Clause 2 of the annexure thereto provides
that the principal debt shall bear interest at
the maximum rate of
interest provided for from time to time under the Usury Act. The
principal debt is to be paid in two instalments
namely two equal
instalments of R7 220,90 on 31 December 2011 and 31 January 2012. In
the light of the fact that we are dealing
with respondents who could
not perform their debt counselling obligations, this payment schedule
seems strangely optimistic.
Domicilium Citandi Et
Executandi
[14]
On the first page of the acknowledgement of debt
2
the respondents are stated to be “of physical address 27 South
Street, Rayton.” They chose that address as their domicile.
This is, to say the least, misleading. As appears from the
application before me
3
this address is the main place of business of Huntrex. The
respondents reside at 125 Kemston Avenue, Benoni.
[15]
The respondents paid nothing. Summons was issued in the Cullinan
Magistrate’s Court on 16 April 2012. This summons was
then
served by the sheriff on Huntrex itself at the so-called domicilium
of the respondents at 27 South Street, Rayton! Default
judgment was
obtained as well as nulla bona returns on the warrant of execution
4
.
[16]
These nulla bona returns form the basis of the present application.
[17]
In evidence, when I asked Huntrex’s attorney about the
absurdity of serving court processes on oneself, the only explanation
she came up with was that “ons het ln ontsaglike problem met
balju's om hul werk te doen”. She was admitted in March
2009.
Her evidence was that since September 2011 she dealt with the Huntrex
cases. Before that her brother, JC de Beer who is also
a director of
the firm dealt with these cases. Apparently she never questioned the
propriety of this practice as she had inherited
this from her
brother.
5
How an attorney can ever believe that such service can be proper is
beyond me. This in itself is a deliberate and serious abuse
of the
legal process and merits the attention of the Law Society.
The nulla bona returns
[18]
These returns are dated 23 June 2012. The warrants were executed at
the residential address in Benoni.
[19]
Paragraph 8 of the founding affidavit reads as follows:
“
The
First and Second Respondents have, to the best of my knowledge and on
their own version, extended movables (sic) assets which
can be used
to procure advantage to the creditors of the Respondents. The
attention of the Honourable Court is specifically drawn
to the fact
that the Respondents are the owner (sic) of a 1996 Model Mercedes
Benz Power Liner 25/28, a 1996 Model Mazda Midgel.31,
a 2007 Model
Chevrolet Spark, a Road Runner Trailer, a Trojan Exercise Bike, a
Trek Hydro Proffessional (sic) Mountain Bike, a
Panasonic Camera and
accessories and a computer to the value of approximately R 3900, 00
as set out in annexure “D”
attached hereto. ” (my
emphasis)
[20]
In the light of the above allegations regarding the assets of the
respondents, I asked mr Paul de Beer whether the attention
of the
sheriff Benoni was specifically drawn to the fact that these assets
exist. He said, no, Huntrex does not do that. A general
business
resolution was made to not specifically ask the sheriff to look for
specified assets which Huntrex well knew were in the
possession of
the respondents. Whilst Huntrex was astute to point out in this
application that those assets exist, it is strange
that they did not
feel it fit to do so when it wanted execution of the judgment.
[21]
His evidence was that he was surprised that nulla bona's were
rendered. He said that Huntrex does not want nulla bona's - the
aim
is to obtain satisfaction of the debt. His further explanation on
this point, namely that debtors sometimes hide their assets
and lie
to the sheriff seems specifically lame in the light of the full
co-operation of the respondents throughout.
[22]
This co-operation is evident from the following: Within one week of
the cession the respondents come to Pretoria to sign the
acknowledgement of debt; they go to the sheriff’s office to
collect this application; they once more attend at the sheriff’s
office to receive the
rule
nisi.
Collusion
[23]
“Co-operation may tend towards collusion. The Courts should be
scrupulous in ensuring that assistance does not conceal
abuse.
Several judgments have scrutinised ‘friendly’
applications for sequestration for signs of collusion ...,)
6
[24]
There are so many sign of collusion that it is difficult to find that
this is a bona fide application for sequestration. To
summarise, the
following features stand out:
1.
Having unsuccessfully tried debt counselling, and shortly after the
cession of the debt, the respondents hasten to the office
of Huntrex
in Pretoria to sign the * acknowledgement of debt;
2.
In this document they choose a domicile which is in fact not theirs
and at which address they knew that they would not receive
any court
processes.
3.
They tell the sheriff that they do not have any assets.
4.
Huntrex does not instruct the sheriff to search for the specific
assets which it at all times knew the respondents should have.
5.
They collect all the documents in this application from the sheriff’s
office.
6.
The business practice of Huntrex is an underhand scheme with ulterior
motives. The motive can either be to benefit the business
of its
related companies (to be dealt with hereunder) or assist debtors, who
so wish, to be sequestrated.
7.
Material information is withheld from this court. This includes the
fact that the agreements referred to in par 8 and 9 above
are not
attached to the papers as well as the further facts which came to
light in oral evidence.
Jurisdiction
of the Cullinan Magistrate’s Court
[25]
In this regard mr Erasmus SC’s written argument reads as
follows.
21
No
case law could be found regarding the election of an address as
domiciiium citandi et executandi but in the work by Van Loggerenberg,
Jones & Buckle
7
,
the learned writer expressed the view that the election of such an
address does not confer jurisdiction upon a Magistrate’s
Court
over the person of a Defendant
22.
The
question arises whether the appointment of 27 South Street, Rayton is
a proper submission to the jurisdiction of the Cullinan
Magistrate’s
Court as contemplated in Section 45 of the Magistrate’s Court
Act. In terms of Section 45 if consent is
given specifically with
reference to particular proceedings already instituted or about to be
instituted in a particular Magistrate’s
Court, that
Magistrate’s Court will have jurisdiction by virtue of such
consent alone
8
”
[26]
I agree that the Cuilinan court did not have jurisdiction. It will
only have jurisdiction in those few cases if any, where
the defendant
resides in that jurisdiction.
[27]
What is shocking to me, and that goes to the professionality of
Huntrex’s attorneys, is that it is always alleged that
the
whole cause of action arose within the jurisdiction of the Cuilinan
court as the plaintiff and defendant entered into their
agreement in
the jurisdiction of that court.
9
In fact it seems to be standard practice that the acknowledgement of
debt is signed by both parties in Pretoria
10
Further relevant evidence
[28]
From Paul de Beer’s evidence it appears that the Huntrex
business commenced during October 2010. Since then it has instituted
approximately 250 sequestration applications. He strongly denies any
collusion.
[29]
He further testified that provided the respondents have complied with
their obligations to repay the aforesaid amount to the
applicant, two
other companies
11
may assist the respondents with:
“
a
consolidation loan whereby the repayment amount by the respondents to
the various creditors may be decreased;
and/or
the
respondents may be able to rent a vehicle with a view to acquire
ownership thereof, provided the monthly rentals are promptly
paid. ”
[30]
The reference in paragraph 6.1 of the founding affidavit to
“reputable companies” is a reference to approximately
15-30 major debt counsellors in Gauteng, Mpumalanga and Limpopo. The
debtors normally co-operate, for example, a debtor from Mbombela
will
travel to Pretoria to sign the acknowledgement of debt.
[31]
He rates Huntrex’s success rate as 80% i.e. debtors who pay the
total debt in the required two instalments.
[32]
When debtors do not perform, judgment is always taken in the Cuflinan
Magistrate’s Court.
Conclusion
[33]
I therefore find that this application has to be dismissed i.e. the
rule nisi discharged, on the following bases: firstly it
is a
collusive friendly sequestration, secondly the application is based
on an invalid warrant of execution and nulla bona as the
Culiinan
judgment is invalid because of the lack of jurisdiction, thirdly two
persons with separate
estates
can not be sequestrated in the same application.
The future
[34]
The following questions need to be investigated further:
1.
The validity of all the judgments in the Culiinan Magistrate’s
Court.
2.
The validity of sequestrations granted on the basis of the nulla bona
returns, which are dependent on the existence of a valid
judgment.
3.
Whether the conduct of any party hereto merits criminal
investigation.
4.
The professional conduct of Huntrex’s legal advisors has to be
investigated by the Law Society of the Northern Provinces.
[35]
Mr Erasmus SC has made a number of sensible proposals in his written
argument, some of which I shall include in my order.
[36]
Once the further information has been furnished on 22 January 2013,
the Deputy Judge President will further deal with the matters
in par
34 above and those arising from my order.
[37]
I therefore order as follows:
1.
The provisional sequestration order granted by Potterill J on 30
October 2012 is discharged.
2.
The Applicant’s attorney shall compile a list of all matters
in
which the Applicant has already obtained default judgment against any
person in the Magistrate’s Court of Cullinan. If
it is
contended that in any of those matters it had jurisdiction, the
ground must be stated.
3.
The list in 2 above must include the case number, particulars of the
defendants and their residential addresses, date of issue
of summons,
date served (and if not served at the plaintiff’s office in
Rayton, where served?), date of judgment, amount
of judgment, date of
service of warrant of execution, address where warrant was served and
whether a nulla bona return was received
or not.
4.
The Applicant’s attorney shall give notice in writing per
registered post to all such persons that the judgment may have
been
incorrectly granted and may be rescinded in terms of section 36 of
the Magistrates’ Court Act;
5.
That a list be compiled by the Applicant’s attorney in respect
of all sequestration orders already obtained by the Applicant
where
the judgment was erroneously granted by the Magistrate’s Court,
Cullinan. The list must also include pending cases
and the present
status thereof.
6.
The list in 5 above must also include in respect of each case the
following:
6.1
each date it was enrolled in the motion courts;
6.2
who heard the matter;
6.3
what order was made on each date;
6.4
if there was any postponement or extension of a rule nisi what was
the reason? In particular, I must be informed of any concerns
raised/queries or further directions given by the particular judge;
6.5
in respect of cases 21821/12 and 13408/12 which I heard on 12 July
2012 copies of the affidavits filed consequent to my enquiries.
7.
That the Applicant’s attorney notify in writing per registered
post all such persons of the fact that the sequestrations
may have
been incorrectly granted and may be set aside;
8.
That the Applicant’s attorney file an affidavit by 22 January
2013 that paragraphs 4 and 7 have been complied with.
9.
The lists and affidavit referred to above shall be delivered to Van
der Merwe DJP no later than 13h00 on 22 January 2013.
AALOUW
JUDGE
OF THE HIGH COURT
1
Ferela (Pty) Ltd
u
Craigie
& Others
1980 (3) SA 167
(W) at 171F-172D; Mars
The Law of Insolvency
,
9th edition (2008) p102 par 5.1
2
Exhibit
“A188”
3
Founding
affidavit p 7 par 1
4
Application
p 20 and 21
5
Huntrex
is a family business as Paul de Beer is a director and shareholder.
In its related companies (see par29 and
footnote
11 hereunder) he, his father Jan du Plessis de Beer and sister
Elzani Coetzer are also shareholders. As already mentioned
J C de
Beer and Elzani Coezer are directors of Huntrex’s firm of
attorneys.
6
Esterhuizen
v Swanepoel
2004 (4) SA 89
(WLD) par 9
7
The
Civil Practice of the Magistrates’ Courts in South Africa, Vol
1, p 95
8
Van
Heerden v Muir
1955 (2) SA 376
(A)
9
Exhibit
“A” p 185 par 4.
10
exhibit
“A” p 189 and 192
11
Dimonex
(Pty) Ltd and Auto Rent-to-own (Pty) Ltd