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[2012] ZAFSHC 177
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Engen Petroleum Ltd v Van Loggerenberg NO and Another (1771/2012) [2012] ZAFSHC 177 (20 September 2012)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No: 1771/2012
In
the matter between:
ENGEN
PETROLEUM LIMITED
...............................................
Applicant
and
MR
ROBERT HOWARD
VAN
LOGGERENBERG NO
...........................................
1
st
Respondent
MRS
PETRONELLA FRANCINA
VAN
LOGGERENBERG NO
..........................................
2
nd
Respondent
(HJP TRUST (IT1876/1996)
JUDGEMENT:
MTHEMBU, AJ
HEARD ON
:
16 AUGUST 2012
DELIVERED ON:
20 SEPTEMBER 2012
_____________________________________________________
INTRODUCTION
[1] On 17 May 2012 this
court granted a provisional sequestration order calling upon the
respondents to show cause why a final order
of sequestration should
not be granted winding up the estates of the respondents and placing
them in the hands of the Master of
the High Court, Free State
Province.
[2] The rule
nisi
was issued against the HJP Trust (“the trust”)
(IT1876/1996) as represented by the respondents in their official
capacities
as trustees of the trust.
[3] On 2 August 2012 the
rule
nisi
was by agreement of the parties extended to the 16
August 2012 in order to afford the applicant the opportunity to file
a replying
affidavit with an application for condonation.
[4] On 8 August 2012 the
applicant filed its replying affidavit together with an application
for condonation. The respondents did
not oppose the condonation
application and same was granted by this court at the hearing of this
application.
SERVICE OF THE
APPLICATION
[5] Mr Snyman argued on
service of the rule
nisi
to the respondents that same was only
served by the sheriff of the court only on 15 August 2012, the day
before the hearing of
this matter, as per the supplementary index to
an address different to where the application was served on
respondents.
[6] In respect of the
service thereof, he argued that the applicant in its founding
affidavit makes the averment that the chosen
domicilium
of the
respondents is number 3 Hoop Street, Ferreira, Bloemfontein. However
nowhere in its founding papers is it alleged on what
basis the
applicant avers that this is the chosen
domicilium
of the
respondents.
[7] One can only suspect
that the applicant got the above address from the EDC membership
application (annexure “C”
of the founding papers)
concluded by the applicant and the trust on 1 June 2004.
[8] Mr Snyman argued that
it must be borne in mind that the EDC Agreement was valid for thirty
six (36) months and any amendment
thereto had to be signed by both
the parties. Neither the respondents nor the trust ever rekindled
this agreement with the applicant
on the expiration thereof during
May 2007.
[9] The respondents
therefore on behalf of the trust deny that number 3 Hoop Street,
Ferreira is either their chosen
domicilium
nor that of the
trust. The situation is that right through the respondents were
absent at the alleged
domicilium.
[10] That the respondents
were absent at the alleged
domicilium
is confirmed by the
return of service in that there was no personal service of the
application on the respondents as alleged by
applicant, instead the
sheriff served same by affixing it on the door of the alleged
domicilium
. The supplementary return of service index also
confirms this as the rule
nisi
was served by the sheriff at
number 160 Klaradyn Avenue, Pellisier, Bloemfontein.
[11] As far back as May
2011, the respondents conveyed to the applicant that they intended to
sell the properties situated at number
3 Hoop Street, Ferreira,
Bloemfontein. Therefore at the time of service of the application,
applicant knew that the respondents
will probably not be at this
address as the properties would most likely have been sold.
[12] The applicant
concedes in its replying affidavit that the EDC Agreement ceased
after thirty six (36) months.
[13] Mr Snyman argued
that no proper notice of this application was given to the
respondents and he relied on
T & H SHAPIRO (PTY) LTD v
PRINS
1982 (3) SA 41
(SWA) at 42B and
MCKAY v CAHI
1962 (4) SA 193
(O), where the court held that notice of a
sequestration application must be given to the respondent.
[14] Mr Snyman averred
that he is not sure if the issue of service was mentioned to the
court when the applicant obtained the rule
nisi
, and this
shows the underhand manner in which the applicant obtained the order.
[15] He maintained that
the applicant has not overcome the first hurdle of service of the
papers on the respondents and on this
aspect alone the rule
nisi
should not be confirmed.
WERE THE
RESPONDENTS CREDITORS OF THE APPLICANT?
[16] Mr Snyman argued
that the applicant based the debt owed to it on an acknowledgement of
debt signed by the close corporation
HJP Vervoer during February 2011
and on this acknowledgement of debt the close corporation was
sequestrated. “page 52”
annexure “D” of the
founding papers.
[17] He argued that in
March 2011 the applicant on its own statements of account, (annexure
HJP 14) was dealing and supplying diesel
to a close corporation and
on page 171, paragraph 7 of the founding papers, the applicant admits
it in its statements of account
annexures HJP 1 to HJP 14 addressed
to the close corporation. When the EDC Agreement lapsed in 2007 and
since then the trust did
not do business with the applicant.
[18] Mr Snyman argued
that it is trite law that in terms of the
Insolvency Act, 24 of 1936
,
the applicant must show that it has a liquidated claim of at least
R100,00 against the trust.
[19] However, even if one
were to accept that the trust committed acts of Insolvency, does the
applicant have a liquidated claim
of R100,00 against the trust?
[20] The EDC Agreement
was used to support the certificate of balance, as per paragraph 12
of applicant’s founding affidavit,
it is therefore clear that
applicant’s claim is based on the EDC Agreement (annexure “C”
of the founding affidavit).
[21] He argued that in
terms of the EDC Agreement the approved bank issues cards or tokens
on behalf of the applicant (paragraph
19.2 of applicant’s
founding affidavit) then each month the issuing bank will send to the
trust, one or more statements pertaining
to general transactions
carried out by the trust utilising EDC Cards, the trust will then
make payment to the issuing bank of the
balance reflected in the
statement (paragraph 19.3 of the founding affidavit). How then would
the debt vest in the applicant when
the trust will make payment to
the bank?
[22] Mr Snyman argued
that the applicant has not shown that it is a creditor of the trust.
All that the trust has to do is to show
that it has
bona fide
disputed the applicant’s claim on reasonable grounds. In this
regard he relied on
BADENHORST v NORTHERN CONSTRUCTION
ENTERPRISES (PTY) LTD
1956 (2) SA 346
TPD at 349D – E.
WERE THE
RESPONDENTS CREDITORS OF THE APPLICANT?
[23] Mr Zietsman argued
that there was a dispute as to which entity is indebted to the
applicant. The close corporation is now made
the scapegoat.
[24] On 24 May 2011
annexure “J” of the founding affidavit, the trust’s
attorneys wrote to the applicant and stated
that the trust was
willing to pay R900 000.00, and further that the applicant will
receive the sum of R1,6 million from the sale
of certain immovable
property by the respondents. Why then would the respondents offer to
pay from the proceeds of the immovable
property? The answer is
because they are sureties on behalf of the trust. This further
confirms the settlement proposals made on
4 May 2011.
[25] The memorandum of
agreement for admission of liabilities and breach, page 73 annexure
“K2” of the founding affidavit
was prepared in pursuance
of the above.
[26] If the liability of
the close corporation was limited to the acknowledgement of debt then
the trust is liable for the balance.
The court can therefore reject
the respondent’s disputed liability on the papers alone.
[27] The trust makes no
indication who its debtors for the R900 000,00 are. He says the
onus
is on the trust to prove its solvency and without such proof, the
exercise of the courts discretion on the basis of the trust’s
alleged solvency is precluded. He relied on
DE WAARD v ANDREW &
THIENHAUS LIMITED
1907 TS 727
at 733.
[28] Mr Zietsman argued
that the certificate of balance makes it a liquidated claim and
referred to
METJE & ZIEGLER v CARSTENS
1959 (4) SA
434
(SWA).
[29] He argued that in
terms of the EDC Agreement neither the applicant nor the approved
bank become parties to any of the retail
transactions in respect of
the purchase and delivery of diesel fuel. Instead the approved bank
settles the retailer, the applicant
in turn settles the approved
bank, alternatively, becomes liable to the approved bank and the
trust further in turn becomes liable
to the applicant for having
settled or having become liable to the approved bank.
[30] He argued that the
sequestration of the trust will be to the advantage of creditors.
[31] In reply Mr Snyman
argued that there are three points that the court should consider and
they are the following:
31.1 The first issue is
the interpretation of the EDC contract. In terms of paragraph 19.3 of
the founding affidavit, it is the
trust that makes payment to the
bank;
31.2 The
DE WAARD
matter says that the
onus
is on the respondent to go further
when it says I am not insolvent. The respondents dispute that the
applicant is one of its creditors.
31.3 The respondents’
attorney in an email to the applicant’s attorney dated 3 August
2011 already in paragraph 2 thereof
stated:
“
It
is not clear to whom diesel were supplied to after the signature of
the AOD and how all the parties and/or entities are getting
involved
in each others business.”
Page 92 of the papers.
31.4 On page 70 of the
papers in another letter from the respondents’ attorney to the
applicant’s attorney dated 24
May 2011, in the second last
paragraph thereof it is recorded that:
“
We
confirm this letter should not be regarded as an AOD, we reserve our
client’s right.”
31.5 As per page 143
paragraph 29, the respondents maintain that their intervention as
husband and wife to try and settle the debt
of the close corporation
cannot mean that the petroleum products were delivered by the
applicant to the respondents and/or the
trust and that anyone of the
three or jointly were now the debtors in place of the close
corporation to whom such delivery was
made and which owed money to
the applicant.
31.6 The amount of R900
000,00 that was offered, was offered for the close corporation and
not for the trust. (annexure “F”,
page 63 of the papers).
31.7 He argued that even
the letter on page 59 of the papers from the applicant’s
attorney is addressed to HJP Vervoer and
not HJP Trust. The former is
the close corporation
THE APPLICABLE LAW
[32] The applicant
brought this application in terms of section 10(b) of the Insolvency
Act, 1936 (p8).
[33] Section 10(b)
provides that:
“
If
the court to which the petition for the sequestration of the estate
of a debtor has been presented is of the opinion that
prima
facie –
…
The debtor has committed
an act of insolvency or is insolvent; and
…
It may make an order
sequestrating the estate of the debtor provisionally.”
[34] Section 12 of the
above Act provides that:
“
(1)
If at the hearing pursuant to the aforesaid rule
nisi
the court is satisfied that:
the petitioning creditor
has established against the debtor a claim such as is mentioned in
subsection (1) of section nine; and
the debtor has committed
an act of insolvency or is insolvent; and
there is reason to
believe that it will be to the advantage of creditors of the debtor
if his estate is sequestrated.
It may sequestrate the
estate of the debtor
(2) If at such a hearing
the court is not so satisfied, it shall dismiss the petition for the
sequestration of the estate of the
debtor and set aside the order of
provisional sequestration or require further proof of the matters set
forth in the petition and
postpone the hearing for any reasonable
period but not
sine die
.”
[35] Section 9 of the
above act provides that:
“
(1)
A creditor (or his agent) who has a liquidated claim for not less
than R100,00 or two or more creditors (or their agent) who
in the
aggregate have liquidated claims for not less than R200,00 against
the debtor who has committed an act of insolvency, or
is insolvent,
may petition the court for the sequestration of the estate of the
debtor.
…
…”
[36] I proceed to
consider whether the trust is indebted to the applicant in the
liquidated amount of R2 716 933,13 together with
interest thereon
a
tempore morae
(p9) and that such indebtedness arises out of the
EDC Agreement concluded during June 2004 (p10).
[37] The salient terms of
the EDC Agreement are that it was valid for thirty six (36) months
(p41) and came to an end during May
2007 (p178). Any amendment to
this agreement was to be signed by both parties (p40). The agreement
was never reviewed (p138). Further
hereto the applicant uses the EDC
Agreement to support the certificate of balance (p10). What can be
gleaned from the papers is
that post the lapse of the EDC Agreement
the close corporation “acquired” the business of the
trust. How this was done
is not the subject of this application. What
is clear is that the applicant then supplied diesel fuel to the close
corporation
until March 2011. This is confirmed by a statement from
the applicant to “HJP Vervoer BK” dated 30 September 2011
(p154
– 166). The applicant further signed an acknowledgement
of debt with the close corporation (in terms whereof the latter was
liquidated) on the 3
rd
February 2011. These factors then
confirm the trust’s denial of having done business with the
applicant post 2007 when the
EDC Agreement lapsed. Logically
therefore, the trust could not have been indebted to the applicant
post 2007.
[38] It is trite law that
to succeed the applicant must show that it has a liquidated claim
against the trust of at least R100,00.
[39] Although the
applicant as stated above has submitted that its claim is based on
the EDC Agreement, it relies on an unsigned
admission of liabilities
and breach (p73) to prove acts of insolvency against the trust as
well as an e-mail (p92) from the trust’s
attorneys, wherein the
latter informs the applicant’s attorney that it is his client’s
intention to settle the matter
and are still willing to discuss a way
in which this can be settled. However, it is unclear from this
correspondence on whose behalf
it was written viz the close
corporation or the trust.
[40] Whether the
applicant had a liquid claim against the trust and the trust was its
creditor is further negated by the applicant
itself where it submits
as follows:
40.1. The issuing bank
shall mean the approved bank which issues EDC Cards to the trust on
behalf of the applicant (p13. para 19.2);
40.2. Each month the
issuing bank will send to the trust one ore more statements
pertaining to general transactions carried out
by the trust utilising
EDC Cards (p13, para 19.3);
40.3. The trust will make
payment to the issuing bank of the balance reflected in the above
statement.
[41] Based on the above I
cannot find that the applicant has a liquidated claim against the
trust because the trust was not a creditor
of the applicant, even if
it could have been proven that the trust committed acts of
insolvency.
[42] An application to
sequestrate the estate of a trustee just like in liquidation
proceedings, should not be resorted to enforce
the payment of a debt
which is
bona fide
disputed by the respondent. Compare
BADENHORST v NORTHERN CONSTRUCTION ENTERPRISES (PTY) LTD
1956 (2) SA 346
(T). I am of the opinion that in
casu
the
respondents have
bona fide
disputed the applicant’s
debt.
[43] In the premises, I
am not prepared to confirm the rule
nisi
and make the
following order:
ORDER:
The provisional order of
sequestration is discharged with costs.
_________________
J. B. MTHEMBU, AJ
On behalf of the
applicants: Adv. P J J Zietsman
Instructed by:
Rossouws Attorneys
BLOEMFONTEIN
On behalf of the
respondents: Adv. C Snyman
Instructed by:
Van Deventer &
Thoabala
BLOEMFONTEIN
/eb