About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2012
>>
[2012] ZAFSHC 193
|
|
Standard Bank of South Africa Ltd v Strydom and Others (1661/2012, 1662/2012) [2012] ZAFSHC 193 (18 October 2012)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 1661/2012
Case No. : 1662/2012
In the matter between:-
THE
STANDARD BANK OF S A LIMITED
................................................
Applicant
vs
STEPHANUS PETRUS JOHANNES
STRYDOM
...........................
1
st
Respondent
[Born on ,
ID Number: ,
Married out of community of property
with
JOSEPHINE STRYDOM
,
Born on ,
ID Number: ]
and
THE STRYDOM FAMILY TRUST
....................................................
2
nd
Respondent
_____________________________________________________
DELIVERED ON:
18 OCTOBER 2012
_____________________________________________________
JUDGMENT
_____________________________________________________
MOCUMIE, J
[1]
The applicant lodged an application for the sequestration of the
first and second respondents
(“the respondents”)
on
24 April 2012 on the basis that the first respondent is indebted to
it in the total amount of R10 432 149.68 on various agreements
including an Agricultural Production Loan, Business Current Account,
Medium Term Loan Agreement, as well as various Vehicle and
Finance
Accounts. The second respondent is indebted to it on the same basis
as the first respondent in the amount of R9 252, 226,
66. In case
1661/2012 the application is against Mr Stephanus Petrus Johannes
Strydom
(“Mr Strydom”)
in his personal capacity
and in case 1662/2012 against Mr Strydom, Mrs Josephine Strydom (Mr
Strydom’s wife) and a certain
Mr Jacobus Casparus Crause in
their capacity as trustees of Strydom Family Trust, IT 773/2009
(“the
Family Trust”).
The first and second respondents will
hereafter, for convenience, be referred to as the respondents.
[2]
The applicant is Standard Bank of South Africa Limited
(“Standard
bank”)
, a company duly incorporated in accordance with the
company laws of South Africa and registered as a commercial bank
which has
its principal place of business and registered head office
at Standard Bank Centre, 5 Simmons Street, Johannesburg, Gauteng
Province.
[3]
The first respondent is Mr Strydom, a farmer with residential address
at 25 Elizabeth Street, Edenville, Free State Province.
He is married
out of community of property to Josephine Strydom. Second respondent
is the Family Trust. Both applications will
be treated as one as the
facts and their basis are the same.
[4]
In the applicant’s founding affidavit the deponent, Mr Loris
Cappilati, Head: Business Resources, Personal and Business
Banking
Credit Division, submits that:
“
7.1
An Agricultural Loan Agreement was approved for 652 hectares of dry
land maize and 235 hectares dry land soya beans for the
2010/2011
production season on condition that the aforesaid Agricultural
Production Loan facilities were payable in full from the
first crop
proceeds and repayable fully, by 31
st
August 2011. Notwithstanding promises by the Respondent to repay the
aforesaid Agricultural Production Loan by 31
st
August 2011, it was established by Mr Riaan von Wielligh, the
Applicant’s branch manager in Kroonstad, that neither the maize
crops nor the soya bean crops had been received by the Applicant and
no payment had been forthcoming from the aforesaid proceeds
of the
maize and/or soya bean crops. During the aforesaid visit by Mr Riaan
von Wielligh, the Respondent confirmed that he used
the proceeds from
his maize and soya beans crops to pay outstanding debts to other
creditors, in order to enable him to finish
planting his wheat crop.
It is humbly submitted that the aforesaid established an act of
insolvency in terms of Section 8(c), alternatively
Section 8(d) of
the Insolvency Act, Act 24 of 1936;
7.2 On the 2
nd
June 2011 a wheat production loan facility was increased to R1,
300,000.00 as the Respondent indicated that he wishes to plant
329
hectares of wheat. The same conditions applied insofar as the wheat
crop was concerned, which should have been delivered and
paid into
the Applicant’s account during or about December 2011 when the
wheat crops had to be harvested. On the 13
th
January 2012,
Mr Riaan von Wielligh had a meeting with the Respondent in Bethlehem,
and at the said meeting the Respondent confirmed
that he harvested
396 tons of wheat, which he had delivered to VKB, and notwithstanding
promises that he would make sure that payment
be effected to the
Applicant, no such payment was received by the Applicant. Again these
payments were to creditors of the Respondent
without payment to the
Applicant. It is humbly submitted that this also established an act
of insolvency in terms of Section 8(c),
alternatively
Section
8(d) of the Insolvency Act, Act 24 of 1936;
7.3 As will more
fully appear hereunder, the Respondent also made or offered to make
an arrangement to pay his indebtedness to the
Applicant which also
established an act of insolvency in terms of
Section 8(e)
of the
Insolvency Act, 24 of 1936
;
7.4 I am also
aware of the fact that the Respondent in the meantime would again
harvest in the near future, maize as well as soya
beans, and have I
in the meantime established that the Respondent opened a bank account
at FNB, and is obviously currently channelling
his business
activities through his FNB account, and not in any account with the
applicant.”
[5]
The second deponent, Mr Riaan von Wielligh, who is the Branch Manager
Kroonstad, submits that:
“
9.1
The deponent, Mr Von Wielligh (the deponent) visited the Respondent
on his farm on the 13
th
May 2011 at 11:00 in the morning to establish the progress made with
the planting of wheat crops as well as to confirm the maize
and soya
beans progress as confirmed by the Santam Insurance Company. The
Respondent was busy with the harvesting of his soya beans
and
indicated that he was averaging 1.3 ton per hectares and that he
would receive the proceeds on the first 300 ton within a week
or two.
None of the proceeds was ever received on the soya beans by the
Applicant.
9.2 The deponent
had a telephonic conversation with the Respondent on the 27
th
May 2011 when the respondent indicated that he was 60% finished with
the harvesting of the soya beans and would start with the
maize once
he was finished with the soya beans. At that stage silo certificates
were already delivered to EAC but no payments had
been made towards
Standard Bank in reduction of the production loan. The Respondent
indicated that he was struggling with his PIN
at EAC to release the
funds.
9.3 On the 2
nd
June 2011 the wheat production loan facility was increased to R1,
300,000.00 as the Respondent indicated that he planted 329 hectares.
This was confirmed by Santam Insurance and the Respondent also took
out hedging contracts as required by the agreement with the
bank.
9.4 The deponent
was struggling at that stage to get hold of the Respondent
telephonically and again visited the Respondent on his
farm on the
7
th
June 2011 at 12:00. The Respondent was busy harvesting
his maize and indicated that he had flood damage on his crops and
that he
has put in a claim with the insurance company.
9.5 Again after
the deponent, referred to in annexure ‘B’ hereto,
struggled to get hold of the Respondent, visited the
Respondent’s
farm on the 24
th
August 2011 to establish why no payment
on the maize or soya beans has been received by Standard Bank. On
this date the Respondent
confirmed that he used the proceeds from his
maize as well as soya beans to pay outstanding debts and also to
enable him to furnish
planting his wheat crop. He claimed to have
planted 270 hectares and promised to pay the proceeds of the wheat
crop to Standard
Bank. He indicated that he settled all his creditors
which at that stage amounted to approximately R1, 000,000.00.
9.6 On the 19
th
September 2011 the Respondent visited the deponent referred to in
annexure ‘B’ hereto, and provided him with two cash
flow
proposing repayments of his facilities at Standard Bank.
9.7 On 27
September 2011 the Respondent again visited the deponent providing
again cash flow statements of proposed repayments,
which again did
not materialize.
9.8 On 28
November 2011 a letter of demand was hand-delivered to Respondent
regarding his indebtedness as well as the
Strydom Family Trust
,
which I attach hereto as annexure ‘C’.
9.9 The
Respondent again visited the deponent referred to in annexure ‘B’
hereto on the 7
th
December 2011 and provided him with his
own cash flow suggestions as to repayment. The Respondent suggested
that a repayment schedule
would take place by way of the proceeds of
the farms that he indicated he was going to sell, i.e. the farms
‘Syferlaagte’
and ‘Blydskap’.
9.10
Furthermore, a letter of acknowledgement of debt with Standard Bank
was also provided to the Respondent on 27 December 2011,
which he
declined to sign. I attach the draft letter of acknowledgement of
debt, which emanated from the discussions with the Respondent,
hereto
as annexure ‘C2’. It must be noted that a typing error as
to the dates on which there was an arrangement for
the necessary
guarantees to be provided was made insofar as reference is made to
January 2011. It should have been January 2012,
as the Honourable
Court will see from the date of the letter, being 27 December 2011.
9.11 After the
Respondent declined to sign annexure ‘C2’ hereto, an
investigation was started as to where the maize,
soya beans and wheat
were delivered because the Respondent indicated that he would deliver
all his crops to Senwes and he mentioned
that he delivered the wheat
to VKB, but we registered our cession on his commitment with Senwes.
9.12 On 13
January 2012 the deponent, referred to in annexure ‘B’
hereto, had a meeting with the Respondent in Bethlehem.
At this
meeting the Respondent confirmed that he harvested 396 tons of wheat
which he had delivered to VKB and of which the last
load would have
been delivered the same day. He undertook to request for the issue of
the silo certificates to Standard Bank and
make payments towards the
reduction of the production loan at Standard Bank. None of the
payments have been received by Standard
Bank.
9.13 On 10
February 2012 the Applicant received a letter from Respondent’s
attorney E A L MULLER from POTCHEFSTROOM indicating
amongst others
that according to the Respondent the ‘
settlement agreement
’
with reference to the draft letter hereto, annexure ‘C2’,
was totally different, and that Respondent would like
to arrange for
a meeting. I attach the last-mentioned letter hereto as annexure
‘C3’.
9.14 I was
further able to confirm that the Respondent delivered 1206 tons of
maize in 2011 and further that many tons of maize
was delivered to a
feedlot in his proximity, in a figure of approximately 300 tons. This
was never mentioned to the Applicant.
9.15 It was also
established that the Respondent delivered a total of 283,47 tons of
wheat in the silos of VKB, and that there is
approximately 200 tons
of wheat currently lying with EAC.
9.16 It could
not be established where the Respondent delivered the balance of 113
tons of wheat.
9.17 I also
established that no progress has been made towards the sale of the
farms that the Respondent indicated he would sell
in order to make
payments to the Applicant.
9.18 It was also
established that the Respondent opened an account with FNB during
2011.
9.19 I have
since not been able to make any contact with the Respondent
whatsoever, and Respondent is not responding to any messages,
e-mails
or phone calls sent from the branch of the Applicant in KROONSTAD.
ACTS OF
INSOLVENCY:
10.1 As referred
to above, and notwithstanding cessions of all proceeds of crops,
which the Applicant has, or the cession of the
proceeds of insurance
on crops, as referred to above, the Respondent delivered his maize
and soya bean crops between July and August
2011 to other creditors
and thereby preferring some of his creditors above others, being the
Applicant.
10.2
Furthermore, and again notwithstanding the aforesaid cessions
referred to above, Respondent delivered his wheat crop during
December 2011 to other creditors and thereby preferring some of his
creditors above others, being the Applicant.
10.3 It is
therefore humbly submitted that in both of these instances, the
Respondent committed acts of insolvency in terms of
Section 8(c)
,
alternatively
Section 8(d)
of the
Insolvency Act, Act
24 of
1936.
10.4 I
furthermore humbly submit that from annexures ‘C1’, ‘C2’
and ‘C3’ referred to above,
the Respondent also committed
an act of insolvency in terms of
Section 8(e)
of Act 24 of 1936.”
[6]
The applicant’s case is the following. On the respondents’
own admissions, through Mr Strydom, the respondents sold
some of the
crops that were ceded in favour of the applicant to pay off its other
creditors .This showed that the respondents preferred
some creditors
such as VKB and EAC above the others which cannot be to the advantage
of the rest of the
creditorium
concursus,
including the
applicant
;
the respondents’
financial statements for end of 28 February
2010 showed that respondents’ liabilities far exceeded their
assets. Respondents,
through Mr Strydom, negotiated to pay the amount
due in instalments which they later reneged on. On that basis
respondents were
factually insolvent.
[7]
The respondents oppose the application on the following grounds, as
set out in their opposing affidavit:
7.1
They were unable to agree to the amounts allegedly owed in terms of
the contracts as the balance certificates appended to the
papers did
not show how these amounts were calculated;
7.2
The credit granted to the respondents in terms of the respective
agreements amounted to reckless credit granting contrary to
the
National Credit Act, 4 of 2005
(“the NCA”)
since:
-
the applicant failed to comply with the peremptory provision of
inter
alia
section 81(2) of the NCA to conduct an assessment prior to
entering into the credit agreements, alternatively to have entered
into
the said agreements although on a preponderance of available
information, entering into the said credit agreements would render
respondents over indebted as contemplated in section 79 of the NCA.
-
that the applicant did not have the necessary
locus standi
to
apply for respondent’s provisional sequestration on the basis
that the credit agreements entered into were liable to be
set aside.
-
In the alternative, the respondents submitted that they did not owe
the applicant any amount of money because on 2 October 2011
the
applicant and respondents, represented by Mr Strydom, entered into a
verbal agreement in terms of which the applicant afforded
the
respondents an opportunity to settle the entire indebtedness to it by
paying one third thereof on or before 2 October 2012,
the second
third on or before 2 October 2013 and the final third on or before 2
October 2014.
[8]
The respondents deny having committed any acts of insolvency and aver
that their conduct was at all relevant times aimed at
compliance with
the terms of the oral compromise between Mr Strydom, representing
himself and the Family Trust, and the applicant.
The respondents deny
that they are factually insolvent.
[9]
In its replying affidavit the applicant relied on the terms of the
underlying written contracts which set out the following:
9.1
that any amendments to the contracts must be in writing and signed by
both Standard bank and respondents; and
9.2
that a balance certificate signed by one of Standard bank’s
managers will be sufficient proof of any amount due and payable
in
terms of the credit agreements
Over
and above, the applicant submitted that the said credit agreements
could not be regarded as granting of reckless credit as
the
agreements fell to be excluded in terms of the NCA as the
Act
did not apply to any transaction in terms of which the consumer is a
juristic person whose asset value or annual turnover at
the time of
the time of the transaction equaled or exceeded the threshold value
determined by the Minister in terms of section
6 of the NCA.
[10]
Section 10 of the Insolvency Act, 24 of 1936 (“the
Insolvency
Act&rdquo
;), provides:
“
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
-
(a)
the
petitioning creditor has established against the debtor a claim such
as is mentioned in subsection (1) of
section
nine
; and
(b)
the debtor
has committed an act of insolvency or is insolvent; and
(c)
there is
reason to believe that it will be to the advantage of creditors of
the debtor if his estate is sequestrated,
it may make an order sequestrating the
estate of the debtor provisionally.”
[11]
Section 12
of the
same Act provides:
“
(1) If at
the hearing pursuant to the aforesaid rule
nisi
the court is satisfied that-
(a)
the
petitioning creditor has established against the debtor a claim such
as is mentioned in subsection (1) of
section
nine
; and
(b)
the debtor
has committed an act of insolvency or is insolvent; and
(c)
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 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
.”
[12] On 16 Augustus 2012
the application for provisional sequestration, which is the first leg
of an application of this nature
was heard by Jordaan J. Full oral
arguments were presented and Jordaan J granted a provisional order of
sequestration returnable
on 3 September 2012.
[13] I have had sight of
Jordaan J’s
ex tempore
judgment which both counsel were
agreed formed the basis of their argument during the first leg and on
the return date when I heard
the matter on 13 September 2012.
[14] In his judgment
Jordaan J decisively ruled that:
14.1 The respondents
presented no factual background which showed that the applicant had
committed any act that amounted to reckless
credit being granted. In
the result the defence could not be sustained.
14.2 The respondents did
not lay any factual basis why they were of the view that the
applicant did not do an assessment before
granting and or extending
credit facilities to them. To the contrary the applicant had been in
business with the respondents over
a long period to know their exact
financial position thus their ability to repay the debts.
14.3 The issue of the
respondents’ indebtedness. The respondents’ bare denial
of their indebtedness without reference
to what, according to them,
is the correct amount owing or due was not substantiated and
supported by any factual basis and so,
could not stand.
14.4 The defence of a
verbal compromise. The bringing of an application for sequestration
was not a way of claiming payment and
that a
pactum de non petendo
has no direct impact on the application.
[15] Mr Zietsman, on
behalf of the applicant, submitted that although the degree of proof
on the final stage is higher, it was incumbent
on the respondents, on
the return date, to present evidence which could disturb the findings
of this Court in favour of the applicant.
(See
Kalis v Decotex
1988(1) SA 943(A) at 978G.)
[16] Ms Kok, on behalf of
the respondents, submitted that indeed the respondents could not
place any other evidence except that
which was presented at the
provisional sequestration hearing. She however maintained that the
applicant still had to prove all
the requirements as set out in s12
and that the test was more stringent: The applicant had to show that
there was reason to believe
that the sequestration of respondents
will be to the advantage of the creditors of the respondents.
[17] I am in agreement
with the findings of the court during the initial stage of this
application as set out in para [14] above.
In the absence of any
evidence disturbing such findings, I am satisfied that the
respondents have not rebutted the unassailable
evidence presented by
the applicants that respondents are factually insolvent; that there
is reason to believe that to place the
estates of the respondents in
the hands of the Master of this High court and appointing a curator
will be to the advantage of all
creditors not only certain selected
ones. A curator will be able to place the assets under its control;
identify the assets of
first respondent on one hand and those of
second respondent on the other and extricate the assets of each
entity from the other
and thereafter give a full account on the
assets and liabilities of the separate entities.
[18]
In circumstances as the present ones, the application is not what is
generally referred to as a
“
friendly
sequestration”.
Thus
the applicant stands at arms length from the respondents and lacks
detailed knowledge of their affairs due to the interwoven
character
of respondents’ estates to comply with
s10(c)
of the
Insolvency
Act.
1
The
appointment of a curator is the only way the applicant bank will be
placed in a position to prove
inter
alia
that
the sequestration will be to the advantage of all creditors including
itself as well as the respondents’ actual insolvency.
[19] I am satisfied that
the applicant has made out a clear case for a final sequestration of
the respondents’ estate on the
basis of
s8
(c) (d) and (e) as
borne out by the common cause facts as set out in the above
paragraphs which respondents could not refute. The
applicant is
entitled to the relief it sought as set out in the Notice of Motion.
[20] In the circumstances
the following order is granted.
ORDER:
The estates of the
first and second respondent in case No 1661/12 and case No 1662/12
respectively are placed under final sequestration.
Costs to be costs in
the sequestration.
_______________
B.C.
MOCUMIE, J
On behalf of applicant:
Adv P Zietsman SC
Instructed by:
Matsepes Inc
BLOEMFONTEIN
On behalf of respondents:
Adv Kok
Instructed by:
Graham Attorneys
BLOEMFONTEIN
BCM/em
1
MARS,
The Law of Insolvency,
9th ed, 140.