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[2013] ZAFSHC 45
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Ex parte: Cloete (1097/2013) [2013] ZAFSHC 45 (5 April 2013)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Application No: 1097/2013
The
ex parte
application of:
GEORGE ANTHONY
RADOV CLOETE
............................
APPLICANT
_____________________________________________________
JUDGMENT:
DAFFUE, J
HEARD ON:
28 MARCH 2013
_____________________________________________________
DELIVERED ON:
5 APRIL 2013
_____________________________________________________
INTRODUCTION
[1] On 18 March 2013 the
applicant, a 39-year-old divorced male person residing in Virginia
and employed as an engine driver, lodged
an application for the
acceptance of the surrender of his estate.
[2] The application was
set down for hearing on 28 March 2013 in the unopposed motion court.
Once arguments were advanced on behalf
of applicant I reserved
judgment.
ALLEGATIONS
CONTAINED IN THE FOUNDING AFFIDAVIT AND ANNEXURES THERETO
[3] The following are
evident from applicant’s application:
3.1. He is resident in
Virginia in the Free State Province, whilst his attorney, Mr Cassie
Fourie, practises in Pretoria, Gauteng.
The Bloemfontein attorneys
are Messrs De Lange & Du Plessis.
3.2. There is only one
asset in applicant’s estate, to wit a 2008 Daihatsu Terios
motorvehicle valued in the amount of R130 000,00
by a certain D
J H Kotze of Auctions Extreme in Simonstown, Western Cape.
3.3. Standard Bank of
South Africa Limited is the only creditor. Applicant has four
separate accounts with the bank, three in respect
of monies lent and
advanced and the fourth in respect of an instalment sale agreement
pertaining to the aforesaid vehicle. The
total debt amounts to
R170 560.55, leaving a deficiency of R40 560.55.
3.4. Applicant’s
reasons for insolvency can be summed up as follows: (i) his loss of
employment in 2009 and consequent unemployment
for a certain period
whereafter he obtained new employment, but at a much lower salary;
(ii) he and his wife separated in 2011
and after a hotly contested
legal battle for care over their child, a decree of divorce was
granted; (iii) applicant was forced
to sell all his furniture and
other assets, save for his motor vehicle; (iv) his mother stays with
him and he and his child utilise
her furniture and household
equipment; (v) he applied for debt review, but he could not afford it
any more as his debts increased
instead of decreased.
3.5. On his version and
as calculated under oath by his Pretoria attorney the probable
dividend payable to concurrent creditors
will be 20 cents in the
Rand.
MATERIAL FACTSNOT
CONTAINED IN THE APPLICATION
[4] The following
material facts which should have been included to show utmost good
faith and which are vital for adjudication
of this application are
missing from the papers:
4.1. Full details of
applicant’s employment, especially pertaining to the identity
of his employer, his gross income, deductions
and net income and
whether he is entitled to a thirteenth cheque and overtime;
4.2 Details of
applicant’s monthly expenditure;
4.3. How applicant
financed the contested divorce litigation with specific reference to
the total legal costs and full details in
respect of assets sold as
alleged in order to settle his costs;
4.4. Whether his vehicle
is insured and if so with which insurance company and in particular
whether the vehicle is in safety storage
or used on a daily basis
pending finalisation of this application;
4.5. Why he did not sell
the vehicle by private treaty and use the proceeds to enter into a
compromise with his only creditor, Standard
Bank, and if that being
unsuccessful, why such proceeds could not be paid into the Master’s
Guardian Fund with the launch
of these proceedings;
4.6. What the
relationship is between him (from Virginia in the Free State) and his
Pretoria attorney or between his attorney and
the valuator and why
was it necessary to instruct a Simontown’s valuator to do a
valuation in Virginia, some 1 200km
away, whilst there are many
valuators andexperienced second hand carsalesmen in the Free State
Goldfields that could have been
instructed to perform a valuation to
assist the court;
4.7. Why a proper
calculation was not made of the sequestration costs, particularly
bearing in mind that two firms of attorneys
are employed, as well as
the liquidation and distribution costs with reference to not only the
Master’s and trustee’s
fees, but also costs such as in
respect of security, advertisements,postage and the like;
4.8. Whythe valuator who
undertook a trip of 2400 kilometres(if that was indeed the case)
charged a mere R500 for his valuation;
4.9. On what basis the
valuator’s valuation was undertaken insofar as he allegedly
relied on a“direct comparison approach”,
but did not
provide any details in this regard. Furthermore there is no evidence
pertaining to the condition of for example the
tyres of the vehicle,
the exterior or interior of the vehicle, or of any extras such as
radio and air-conditioning. There is also
no indication that the
valuator has considered the trade-in and retail prices of the
vehicle;
4.10. There is no
indication as to the date on which the balances owing to the creditor
in respect of the four accounts were obtained
and/or whether interest
since then was taken into account;
4.11. It is alleged that
summons was issued against applicant without providing the court with
further information. It is unknown
in respect of which account. It is
possible that the creditor has already taken judgment and attached
the only asset in execution,
but applicant failed to take the court
in his confidence and disclose any further information in this
regard;
4.12. Applicant failed to
explain when was the debt review application made, whether the
magistrates’ court made an order
and if so, when, who the debt
counsellor was, for how long he was under debt review and when was
the debt review terminated.
LEGAL REQUIREMENTS
FOR ACCEPTANCE OF SURRENDER OF AN ESTATE
[5] An applicant for the
acceptance of the surrender of his estate must comply with certain
procedural and substantive requirements.
The procedural requirements
are set out in section 4 of the Insolvency Act, 24 of 1936 (“the
Act”) while the substantive
requirements are found in section 6
of the Act.
[6] The procedural
requirements are the following;
6.1. Before presenting
his application in terms of section 3 of the Act, an applicant shall
cause a notice of surrender in the prescribed
form to be published in
the Government Gazette as well as in a newspaper circulating in the
district in which he resides (or if
he is a trader, in the district
in which his principal place of business is situated);
6.2. This notice shall be
published not more than 30 days and not less van 14 days before the
date upon which application will be
made to the court for acceptance
of the surrender of his estate;
6.2. Within 7 days after
publication for the said notice the applicant must deliver or post a
copy of the notice to every creditor
whose address he knows or can
ascertain;
6.3. The notice must also
be furnished by post to the registered trade union representing any
of the debtor’s employees and
the employees should be notified
byaffixing a copy to any notice board to which the employees have
access inside the applicant’s
premises, alternatively to the
front gate of the premises;
6.4. A similar notice
should also be posted to the South African Revenue Service;
6.5. A statement in
duplicate of the applicant’s affairs in the form set out in the
first schedule to the Act shall be lodged
at the office of the Master
and if the debtor resides or carries on business as a trader in any
district where there is no Master’s
office, the said statement
shall also be lodged at the office of the magistrate of the district
in which he resides or carries
on business;
6.6. In both cases the
statement of affairs shall lie open for inspection of any creditor
for a period of 14 days from the date
mentioned in the notice of
surrender.
[7] The substantive
requirements are the following:
7.1 That the estate of
the applicant is insolvent;
7.2. That the applicant
owns realizable property of a sufficient value to defray all costs of
the sequestration which will in terms
of the Act be payable out of
the residue of his estate; and
7.3. That it will be to
the advantage of the applicant’s creditors if his estate is
sequestrated.
[8] The test to establish
that it is to the advantage of creditors of the estate to be
sequestrated is more stringent in cases of
voluntary surrender than
in sequestration applications. In terms of section 6 the court must
be satisfied that it will be to the
advantage of creditors that the
estate is sequestrated, while in terms of sections 10 and 12 dealing
with provisional and final
sequestration respectively, a court may
make an order sequestrating the estate of the debtor provisionally if
it is
prima facie
of the opinion that there is reason to
believe that it will be to the advantage of creditors if the estate
is sequestrated and
in the case of final sequestration if the court
is satisfied that there is reason to believe that it will be to the
advantage of
creditors.
ABUSE OF PROCESS
[9] Although section 4 of
the Act requires a certain measure of notice to creditors, an
application for voluntary surrender of an
estate is in essence an
ex
parte
application and that being so, an applicant in these
applications should make full and frank disclosure as the utmost good
faith
is required. See
Ex Parte
Arentzen
(Nedbank Limited as intervening creditor)
2013 (1) SA 49
(KZP), para
[5] with referenceto the old established principles and case law
cited in footnotes 3, 4 and 5.
[10] It has become
fashion to launch applications for acceptance of surrender of
debtors’ estates, as is the case with the
so-called “friendly
sequestrations” with the main purpose to be to the advantage of
debtors, but with the unfortunate
disadvantage of creditors. This
could not be what the legislature had in mind. Holmes J, (as he then
was) stated many decades ago:
“
The
machinery of voluntary surrender was primarily designed for the
benefit of creditors, and not for the relief of harassed debtors.”
See
Ex Parte
Pillay; Mayet v Pillay
1955 (2) SA 309
(N) at 311 E.
[11] I have encountered
several similar applications in the unopposed motion courts in the
recent past. In several cases the attorneys
of first instance were
from outside the Free State and particularly from Pretoria. In many
cases the estates consisted of either
one fixed property, or an asset
such as a motor vehicle. Some of these applications I dismissed and
others have been postponed
at the request of the legal
representatives of the applicants in order to supplement the papers,
the eventual outcome of which
is unknown to me as these were
considered by my colleagues doing motion court duty at the time.
[12] In many of these
cases the valuations of the assets were either doubtful, or the
sequestration costs and the administration
costs pertaining to the
liquidation and distribution of the estates were incorrectly
calculated, presenting a false picture of
the actual costs and the
probable dividends payable to concurrent creditors.
[13] Several judgments
from various High Courts in South Africa have warned over the years
against an abuse of process pertaining
to friendly sequestrations as
well as applications for voluntary surrender. I believe that it is
necessary for the Free State High
Court to add its voice to those
voices in the other High Courts trying to prevent debtors from
abusing the system to the detriment
of creditors and especially
concurrent creditors who rely on the courts to ensure that the
requirements of the
Insolvency Act are
met without the necessity of
them intervening and opposing these kinds of applications. It is not
surprising that intervening creditors
are in by far the majority of
cases banks or other secured creditors. Concurrent creditors and
especially creditors with relatively
small claims are not prepared to
enter into a legal battle that may cost them more than the amount of
their claims.
[14] Generally speaking
parties resorted to “friendly sequestrations”in this
division in order to achieve the sequestration
of a debtor and
voluntary surrender procedure was seldom utilised. Recently I have
noted from personal experience an increase in
voluntary surrender
applications in this court. Apparently there is a much greater
concern in KwaZulu Natal and this caused Gorven
J to comment as
follows:
“
[11]
Voluntary
surrender
applications have begun to proliferate in this division. A fledgling
cottage industry has reared its head. As was the
situation with
‘friendly’ sequestrations in
Mthimkhulu
,
many of these take a standard form with almost identical averments
and are drafted by a small set of attorneys who have chosen
to
specialise in such applications. In most cases the estate is small,
as is the case in the present application. In many of them,
confronted by the requirement that all the costs of sequestration
must be defrayed from the estate and it must still be shown that
sequestration would be to the advantage of creditors, a formula has
arisen to reduce these costs. The applicant states that a friend
or
relative has undertaken to pay the costs of the applicant’s
attorney and that the attorney concerned will not look to
the estate
for his or her costs. Just such an averment is made in the present
application.”
[15]
In these applications, “friendly sequestrations”
included, there is often doubt, or an uneasiness, as to the
relationship
between the attorney and valuator or between the debtor
and the valuator. In
casu
the
valuator’s business is located in Simontown, the attorney is
from Pretoria and the debtor is resident in between in the
Goldfields
town of Virginia. Such factors should raise the eyebrows, especially
where the valuator’s fee is alleged to be
R500,00 only and his
report is of no assistance to the court.
[16] I
am in full agreement with the
dicta
of
Gorven J in
Ex
Parte
Arentzen
loc
cit
at
paras [12] and [13] to the effect that voluntary surrender
applications require an even higher level of disclosure than
“friendly
sequestrations” and that it is appropriate at
the very least to require compliance with those guidelines set out in
Mthimkhulu
v Rampersad
(
BOE
Bank Ltd
,
Intervening
Creditor
)
[2000]
3
All SA 512
at 517b-h. Although the court in Mthimkhulu dealt with a
“friendly sequestration”, the guidelines can be applied
in
voluntary surrender applications as well, but also bearing in mind
what is stated
infra.
[17]
In
Craggs
v Dedekind and three similar applications
,
1996 (1) SA 935
(C) at 936 H, Conradie J referred with approval to
the following remarks of Curlewis JP in
Kerbel
v Chames
1925
WLD 72
at 76-77:
“…
and
one has a strong suspicion that in a very large number of
sequestrations in this court, these sequestration proceedings are
not
for the benefit of the creditors, but are entirely for the benefit of
the insolvent and are very often instituted by a friend
to help the
debtor out of his difficulties.”
Conradie
J went on
at
936J to 937A to refer to the fact that courts have warned over many
years against neglecting the interests of creditors, but
notwithstanding that, even then (in 1995) it was still a legitimate
concern which should continue to engage the attention of the
courts.
Although the court dealt with” friendly sequestrations”,
the concerns pertaining to voluntary surrender applications
are
exactly the same.
[18]
In
Ex
Parte
Anthony
en ‘n Ander en 6 soortelyke aansoeke
2000
(4) SA 116
(C) Blignaut J dealt with seven separate applications for
voluntary surrender. In all seven cases each estate consisted of one
mortgaged immovable property and a few movables. The court’s
main concern was the advantage to creditors and Blignaut J, writing
for the full bench, found that notwithstanding valuations obtained by
the applicants in each case, they failed to prove that the
valuations
would be achieved in the event of forced sales. The court relied on
the judgment of Leveson J in
Nel
v Lubbe
1999
(3) SA 109
(W) where the learned Judge was also confronted with a
valuation which was nothing more but “a bold assertion of
value”.
[19] In
Nel v
Lubbe
loc cit
, Leveson J made it clear that a court
will look to the guidance of an expert when it is satisfied that it
is incapable of forming
an opinion without it, but that the court is
not a rubber stamp for the acceptance of the expert’s opinion.
It is important
that evidence must be placed before the court of the
facts relied upon by the expert for his opinion as well as the
reasons upon
which it is based. The learned Judge went further:
“
The court
will not blindly accept the assertion of the expert without full
explanation. If it does so its function will have been
usurped.”
(at
111G)
The
manner in which expert evidence must be placed before the court is
nothing new. Wessels JA put it as follows in
Coopers
(SA) (Pty) Ltd v Deutsche Gesellschaft
1976
(
3
)
SA
352 (A
)
at
371G-H:
“
As I see it,
an expert’s opinion represents his reasoned conclusion based on
certain facts or data, which are either common
cause or established
by his own evidence or that of some other competent witness. Except
possibly where it is not controverted,
an expert’s bald
statement of his opinion is not of any real assistance. Proper
evaluation of the opinion can only be undertaken
if the process of
reasoning which led to the conclusion, including the premises from
which the reasoning proceeds, are disclosed
by the expert.”
[20]
In
Ex
parta
Ogunlaja
and others
[2011]
JOL 27029
(GNP), Bertelsmann J endorsed the approach by Levenson J in
Nel
v Lubbe
and
went further to explain the applicable requirements regarding expert
testimony in paras [15] and [16]. It is apposite to emphasise
the
following warnings in paras [35] to [39]:
“
[35] It is
necessary to add that the nature of the valuation report is such
that, in the absence of a reliable method of calculation
of the value
of the immovable properties, the court is left with the uncomfortable
impression that the valuator and the applicants,
or the applicants’
legal representatives, are too close to one another to allow the
preparation of an independent expert’s
report. The thought is
difficult to dismiss in these applications, and in many others the
court has seen over the past two to three
years, that the valuator is
fully aware of the value that needs to be certified for assets in
every individual insolvent estate
to ensure that the papers reflect
the conclusion that an advantage to creditors is assured if the
surrender is accepted …
[36] If this impression is correct, it
is clear that the process of voluntary surrenders is being abused. …
[37] If the suggestion is allowed to
take hold that certain valuators manipulate the true value of assets
upward to persuade the
court to accept applications such as the
matters under consideration, the result must be a deep suspicion on
the part of the court
of any valuation report prepared by the
valuators concerned.
[38] To prevent such an uncomfortable
situation from arising, valuators should certify under oath that they
prepared every valuation
without any knowledge of the facts of the
relevant application. In addition, proof of physical inspections of
immovable properties
ought to be provided by way of photographs and a
detailed description of the physical condition in which each property
was found,
as well as the effect that the physical appearance of the
property has upon the valuation thereof.
[39] The applicants themselves and the
attorney acting for them should likewise confirm that the valuator
was not made privy to
the value that the assets in the estate must
realise in order to constitute an advantage to creditors.”
Although the learned
Judge referred to valuation of immovable properties only, I am of the
view that photographs and a detailed
description of the physical
condition of movable property and motor vehicles in particular,
property that are used on a daily basis,
should be obtained as well.
[21] In
Smit v Absa
Bank Ltd
[2011] JOL 27973
(GNP), Southwood, J also found that
the applicants’ valuation was completely defective as it did
not comply with the requirements
laid down in the case law. In para
[7] the court also frowned upon the allegation that the applicants’
estate consisted of
one immovable property only and mentioned the
following:
“
It is also
difficult to believe that the applicants own no other assets. The
overall impression is that the applicants have not
taken the court
into their confidence.”
Southwood, J in
Ex
Parte Mattysen
ed uxor
2003 (2) SA 308
(T) adjudicated upon an application for voluntary surrender and made
two relevant observations, one pertaining to the valuation
of the
immovable property and the other pertaining to the failure to make
full disclosure pertaining to the sale of that property.
Regarding
the valuation the court foundat p 316A that the affidavit of the
valuator did not contain relevant facts or reasons,
did not assist
the court in any way and was nothing but “an exercise in
futility”. With reference to the failure to
make full
disclosure the court stated the following at 316E:
“
Here it
appears that there has been a deliberate misrepresentation of the
facts. The probability is overwhelming that this was done
with the
assistance of the applicants’ attorney. By the time the
applicants’ affidavit was made on 3 July the applicants
would
have been served with the summons, the warrant of execution/notice of
attachment would have been served on them and the notice
of sale in
execution would have been published. Without an explanation it is
highly improbable that they would not have known about
this and
informed their attorney accordingly.”
THE COSTS OF
SEQUESTRATION AND ADVANTAGE TO CREDITORS
[22] For several years it
has been accepted as a rule of practice in the Free State High Court
that sequestration and administration
costs as a general rule be
accepted in the amount of R20 000,00 in order to calculate the
concurrent dividend payable to concurrent
creditors. This has to be
reconsidered as I have recently established from the Registrar that
taxed sequestration costs in unopposed
sequestration applications
vary between R18 000 and R21 000,00. Further enquiries
indicated that it can be as high as
R25 000.00 and that the
costs of voluntary surrender applications are in line with these
costs. Obviously if more than one
firm of attorneys is involved,
which is often the case, the costs are higher. In order to establish
the total costs to be paid
out of the free residue of an insolvent
estate, (that is including the costs of administration of the
insolvent estate), the trustee’s
and Master’s fees,
advertising costs, security costs, the auctioneer’s fees and
expenses, postage and diverse items
must be added. The administration
costs of a small estate with unencumbered movable assets of
R200 000.00 can be as high as
R35 000.00 to R40 000.00
if the trustee’s fees of 10% on R200 000.00 plus VAT and
the other costs referred
to above are added. Iftaxed sequestration
costs of R22 000.00 only is added, the total costs to be paid
from the free residue
may be as high as R62 000.00 in this
example which is much higher that the amount accepted as a general
rule in this division.
Obviously, this will have a huge effect on the
dividend payable.
[23]
There has been a further long standing practice in this division
pertaining to advantage to creditors. Once it is established
that a
dividend of 10 cents in the Rand will be payable to concurrent
creditors in so-called “friendly sequestrations”
or
applications for voluntary surrender, an advantage to creditors has
been proven. If the position in the North Gauteng High Court
is
considered it appears as if a dividend of 10 cents in the Rand is too
negligible a dividend. I am fortified in my view if applications
for
rehabilitation are considered. It is too frequently evident from
these applications that no or much smaller dividends than
anticipated
were paid out to concurrent creditors notwithstanding the fact that
many concurrent creditors often do not even prove
claims against
insolvent estates. I am of the view that this division should follow
the guidelines in North Gauteng where the court
has laid down that
advantage to creditors requires a dividend of at least 20 cents in
the Rand. See
Smit
v Absa Bank Ltd
loc
cit
para
[3] and
Ex
Parte
Ogunlaja
and others
loc
cit
at
para [9]. In the last mentioned judgment the minimum dividend of 10
cents in the Rand has been regarded as insufficient and a
dividend of
20 cents in the Rand was regarded as the minimum benefit that would
have to be established before an application for
surrender of an
estate or compulsory sequestration will be granted.
DEBT REVIEW IN
ACCORDANCE WITH THE NATIONAL CREDIT ACT, 34 OF 2005 (NCA)
[24]
Insofar
as the four claims by Standard Bank against the applicant fall within
the ambit of the NCA and applicant averred that he
had referred his
debt for debt review, it was incumbent upon him to provide an
adequate explanation why he failed to properly avail
himself to the
available remedies. He should have informed the court as to when he
applied for debt review, who the debt counsellor
was, what the total
debts were at that stage, whether the application for debt review was
referred to the magistrate’s court
and if so, whether the
application was successful, how many payments were made during the
period of debt review and what the outstanding
balances were when he
decided to walk away from debt review. There is a view point that
debt review under the NCA is not the debtor’s
saviour that many
people, the legislature included, thought it would be. However it was
for applicant to explain in detail with
a sufficient factual
foundation why he was dissatisfied with debt review
in
casu.
This
he failed to do. My view is that all debtors, especially those with
small and medium sized estates, should as a starting point
embrace
the protection of the NCA if the claims against them fall within the
ambit of that Act. See also
Ex
parte Ford and two similar cases
2009
(3) SA 376
(WCC). Insolvency must always be the last resort. As a
general rule it is not acceptable that debtors utilise the expensive
machinery
of the
Insolvency Act to
get rid of creditors to the
disadvantage of the last-mentioned.
ADJUDICATION OF
APPLICANT’S APPLICATION
[25] Applicant’s
failure to disclose his income and expenditure is highly relevant,
particularly insofar as the total of the
concurrent claims is
relatively small. If the income and expenditure were fully disclosed,
it might have had an effect on considerations
pertaining to the
advantage to creditors. If a sufficient amount was available for the
trustee to be appointed to utilise
section 23(5)
of the
Insolvency
Act to
apply such excess income, I might have been persuaded to grant
the application on condition that applicant could also overcome my
difficulties with the other apparently insurmountable problems
referred to herein. However there is a dearth of evidence in this
regard.
[26] I find it highly
improbable that applicant would go so far to sell his and his child’s
beds and other household properties,
but failed to sell the very
asset that is on his version worth much more than the outstanding
balance due to the bank. The circumstances
cry out for frank and
candid disclosure.
[27] As mentioned this is
a typical situation where the applicant should have utilised the
benefits of the NCA in order to settle
his debts in a constructive
manner in accordance with a court order obtained from the
magistrate’s court. In such a way he
would be protected against
harassment by creditors while creditors on the other hand would
eventually receive full payment of their
claims. Contrary to such a
factual scenario, granting of the application for voluntary surrender
will benefit applicant only to
the detriment of his creditors.
[28] Something must be
said about the calculations of the applicant’s attorney
pertaining to the costs and the dividend payable
to concurrent
creditors. The total costs of sequestration is calculated to be just
over R9 000,00. This is less than half
the usual sequestration
costs for applications of this kind where one firm of attorneys is
involved. In
casu
there are two sets of attorneys which will
have a serious negative effect on the sequestration costs. In any
event value added
tax have to be added to several of the costs items.
With reference to the administration costs of the insolvent estate,
the 10%
fee of the trustee together with tax has been taken into
consideration, but no other costs such as in respect of
advertisements,
security, auctioneer’s fees, postage and other
diverse items associated with the administration of an insolvent
estate. My
impression of the attorney’s attitude is that he
manipulated the valuation of the vehicle and the costs in order to
arrive
at a dividend of 20 cents in the Rand which is the minimum
laid down by the North Gauteng High Court in Pretoria where he
practises.
[29] The valuation of Mr
Kotze relied upon is really an exercise in futility. There is
absolutely no reference to Mr Kotze’s
experience and training.
He alleges that he is a member of the SA Institute of Auctioneers,
but if the valuation is considered,
I have serious doubts. The report
and so-called sworn affidavit are riddled with spelling and some
textual mistakes. Mr Kotze tries
to show what the definition of
market value is, i.e. being the estimated amount for which the item
would exchange on the date of
the valuation between a willing buyer
and a willing seller after proper marketing thereof. This might be
so, but he also acknowledges
that he had to consider what the forced
sale value of the vehicle was. He refers to the direct comparison
approach as being the
most suitable valuation method in determining
market value, but then totally neglects to follow his own approach.
There is no indication
that he considered the valuations or sales of
comparable vehicles and in particular, there is no indication that he
has considered
the authoritative booklet used by the motor industry
to establish the trade-in and retail prices of vehicles. I would have
expected
him to take pictures of the vehicle and to show on his
valuation report the condition of the tyres, the interior, the
exterior
and whether or not the vehicle was fitted with extras such
as radio and air-conditioning. There is no evidence that he
established,
for example by studying the registration papers of the
vehicle, that it was indeed a 2008 “model”. To the best
of my
knowledge, and after having studied the latest prices of
vehicles in the Volksblad newspaper of 4 April 2013, the Daihatsu
Terios
comes in nine different models. There is a significant
difference between the cheapest and most expensive model. The
valuator has
not informed us which of the different models he has
valued. The allegation that the vehicle is in a fairly good condition
is of
no assistance whatsoever. Mr Kotze has failed to provide a
proper factual foundation and cogent reasons for his conclusions in
clear and logical terms. The so-called sworn affidavit does not
comply with the statutory requirements for affidavits, but it is
not
even necessary to deal with technical aspects to reject his evidence.
It is clearly untenable.
PROCEDURAL
REQUIREMENTS
[30] The application
should be dismissed as the substantive requirements of
section 6
have
not been met, but it is necessary to mention various procedural
defects. The documents presented to me are riddled with mistakes.
Applicant, a male person, is referred to as a female in prayer 1 of
the Notice of Motion as well as in the notice to creditors.
He is
resident in the well-known suburb Merriespruit in Virginia, but
throughout the application and in the advertisements reference
is
incorrectly made to Medispruit. The notices in the Government Gazette
and the Citizen appeared on 22 February 2013, more than
30 days prior
to the hearing of the application on 28 March 2013. The statement of
affairs is incomplete insofar as his ex-wife’s
particulars are
not contained therein. Furthermore, it is unclear whether applicant
deposed to the document under oath or whether
he merely confirmed the
correctness of the contents thereof. There is no compliance with the
statutory requirements. The certificate
of the Head of the Judiciary
in Virginia is wrong insofar as it is stated therein that the first
liquidation and distribution account
in the estate late GAR Cloete
laid for inspection. Surely Mr Cloete is still well and alive and
secondly no liquidation and distribution
account lied for inspection,
but applicant’s statement of affairs. The notice to creditors
and especially annexure “E”,
which is stated to be a
draft, is notification to Standard Bank with account reference number
040270793. It appears from the statement
of affairs that four
different account numbers have been allocated to applicant by the
Standard Bank in respect of the various
agreements. There is no
indication that the other account numbers have been inserted on the
other notices apparently sent to the
bank. However, insofar as I am
of the view that the application should be dismissed due to
non-compliance with substantive requirements,
it is not necessary to
consider whether these procedural problems might have been condoned
in a suitable case. The application
should be dismissed on the basis
that I am not satisfied that an advantage to creditors has been shown
to exist.
ORDER
[31] The following order
is issued:
31.1. Applicant’s
application for the voluntary surrender of his estate is dismissed.
______________
J.P. DAFFUE, J
Attorney forapplicant:
Cassie Fourie Attorney
c/o De Lange en Du
Plessis Attorneys
90 President Reitz
Avenue,
BLOEMFONTEIN
/eb