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[2009] ZAGPPHC 27
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Prochem (Pty) Ltd v Swart (20675/2006) [2009] ZAGPPHC 27 (17 April 2009)
NOT REPORTABLE
HANDED DOWN: 17
APRIL 2009
IN THE HIGH COURT OF
SOUTH AFRICA
(NORTH GAUTENG
DIVISION, PRETORIA)
CASE NO:
20675/2006
IN
THE MATTER BETWEEN:
PROCHEM
(PTY) LTD APPLICANT
AND
RUDI
SWART RESPONDENT
JUDGMENT
SITHOLE,
AJ
(A)
INTRODUCTION
[1] The Applicant is
PROCHEM (PTY) LTD, a company with limited liability, duly registered
and incorporated in accordance with the
company laws of the Republic
of South Africa with its principal place of business situated at 13
Sloane Street, Epsom Lawns, Bryanston.
The Applicant is legally
represented in the matter by adv. L A Pretorius of Pretoria.
[2] The Respondent
is Mr Rudi Swart (“Swart”), an adult male and director of
companies who is married out of community
of property to Suzanne
Marie Swart by virtue of antenuptual contract H8790/1976 and who
resides at 3 Elysium, 233 Nixon Street,
New Muckleneuk, Pretoria.
The respondent is represented in this application by adv. D J
Blignaut of Pretoria.
[3] On 29 June 2006,
the Applicant filed an application in this court in terms of which he
sought the following orders:
3.1 That the estate
of the Respondent be sequestrated in the hands of the Master of the
High Court;
3.2 That the costs
of this application be costs in the sequestration.
[4] The matter has
had a somewhat long history in that before I could hear it on 24 May
2007, it had served before several Judges,
including my learned
brother Shongwe DJP on 7 December 2006, who granted a provisional
sequestration order with a return date 23
January 2007. After
hearing it I reserved judgment in order to research the authorities I
had been referred to by counsel for
the parties during argument.
[5] What seems to be
a long time has passed since I reserved judgment. This has occurred
on account of circumstances beyond my
control, including poor health
and pressure of work during my stints as Acting Judge on the Bench at
Pretoria and Mafikeng, and
any inconvenience which may have been
occasioned to any party as a result of such delay is deeply
regretted. Suffice it to say
that my judgment in this matter follows
below:
(B)
FACTUAL
BACKGROUND
[6] The factual
backdrop against which the issues between the parties have to be
evaluated is, by and large, common cause. This
obviously implies
that there are some aspects of it in which the parties hold different
points of view. I shall, however, during
the narration of the facts,
indicate the aspects on which the parties differ.
[7] The Applicant
instituted action under case number 8695/2005 in this court against
the Respondent. On 1 July 2005 the Court
per the honourable Justice
Shongwe DJP granted summary judgment in favour of the Applicant
against the Respondent for payment of
the sum of R1 255 460,20, plus
interest on this amount at the rate of 15,5% per annum as from
20/4/05 to date of payment.
[8] The Respondent
subsequently applied for leave to appeal against granting of the
summary judgment order. Leave was refused by
this Court. The
Respondent thereafter launched an application in terms of Rule 6 of
the rules of the Supreme Court of Appeal.
Leave to appeal was also
denied by the Supreme Court of Appeal.
[9] The Applicant,
in consequence of the above, caused to be issued a warrant of
execution which was served on the Respondent on
15 February 2006.
The Sheriff rendered a return of
nulla
bona
to the said warrant.
[10] As a result of
the circumstances as set out above the Applicant brought an
application for sequestration of the estate of the
Respondent on the
ground that Respondent has committed an act of insolvency as
envisaged in terms of
Section 8(b)
of the
Insolvency Act, 24 of 1936
.
[11] On 7 December
2006 a provisional order of sequestration was granted (per Shongwe
DJP) with return date 23 January 2007.
[12] On 13 December
2006 the Respondent served on Applicant’s attorneys of record
an application in terms of
Section 11(3)
of the
Insolvency Act,
whereby
the Respondent gave notice of his intention to anticipate the
return date on 14 December 2006. The matter was enrolled on the
urgent court roll on 14 December 2006. His Lordship Mr. Justice
Motata struck the application in terms of
Section 11(3)
of the
Insolvency Act from
the roll on 14 December 2006 as Judge Motata was
apparently of the view that the application should not have been
placed on the
urgent roll.
[13] In terms of the
provisional order of sequestration dated 7 December 2006, the return
date was originally stated to be 23 January
2007. However, because
the matter is opposed and because 23 January 2007 fell within the
recess period, the return date was extended
by agreement in court on
23 January 2007 to 14 March 2007.
[14] On 17 January
2007 the Respondent’s attorney served on Applicant’s
attorney of record a notice of application in
terms of
rule 6(5)(e)
in terms whereof the Respondent requests the Honourable Court to
grant him leave to file a further affidavit and that the Respondent
be granted leave to supplement the admissions and withdraw certain
admissions in his opposing affidavit filed on 6
th
of September 2006 (the opposing affidavit to the application for
sequestration.)
[15] On 14 March
2007 the
Rule 6(5)(e)
application was argued before His Lordship
Justice Rabie who made an order that leave be granted to the
Respondent to file a further
affidavit on or before 11 April 2004 and
also that leave be granted to the Applicant to answer to the
Respondent’s further
supplementary affidavit on or before 9 May
2007. The return day was extended to Thursday 24 May 2007 with
certain directives given
to the Registrar. The Applicant was ordered
to pay to the Respondent his costs in respect of the
Rule 6(5)(e)
application as well as the costs of appearance on 14 March 2007.
[16] In his
supplementary opposing affidavit filed on 11 April 2007, the
Respondent,
inter
alia,
alleges that the summary judgment referred to in paragraph (7)
supra
,
was obtained fraudulently and that it is factual that International
Source Services (ISS) had no indebtedness to Prochem (Pty)
Ltd,
Registration No 2003/08551/07 at the time that he (Respondent) was
presented with the Deed of Suretyship to sign.
[17] The foregoing
allegations and contentions by Respondent are denied by the Applicant
in its opposing affidavit. In support
of such denial the Applicant
referred the Court to certain invoices attached to the papers as
annexures “JM12” and
“JM18” and dated from 19
April 2004 to 29 May 2004, which were issued by Applicant to ISS
before the Respondent signed
the Deed of Suretyship on 31 May 2004.
In consequence of the above, the Applicant submits that it is clear
that the Respondent
is attempting to mislead the Court by clouding
the real issues and therefore the Respondent’s credibility
should be doubted.
(C)
THE
ISSUE(S) TO BE DECIDED BY THE COURT
[18] The issue to be
decided by the Court is whether, in the light of the foregoing
background as well as the defences raised by
the Respondent, the
Applicant is entitled to a final sequestration order stated
otherwise, whether the provisional sequestration
order should be
confirmed.
(D)
THE
APPLICANT’S CASE
[19] In the head of
argument filed on behalf of the Applicant, it was contended and
submitted by counsel that:
(19.1) The
respondent does not raise any new facts in his supplementary opposing
affidavit. In fact, all the facts raised in that
affidavit are
either fabricated by the Respondent as clearly indicated in the
Applicant’s answering affidavit to the supplementary
opposing
affix-davit or were known to the Respondent long before he deposed to
that affidavit.
(19.2) The court,
when considering whether to allow a party to withdraw admissions
made, should require a satisfactory explanation
both of what the
circumstances were when the admission was originally made and the
reasons why it is now sought to withdraw the
admission.
(19.3) The reason
for seeking the withdrawals by the Respondent is, with respect, very
tactical, does not constitute to be a satisfactory
reason and
therefore should not be allowed by the above Honourable Court.
(19.4) The
Respondent is clearly
mala
fide
and is acting in an attempt to delay the sequestration proceedings
and that the Respondent’s so-called supplementary opposing
affidavit is purely of a tactical nature and does not meet the
requirements which would allow this Honourable Court to exercise
its
discretion in his favour.
(19.5) In regards to
the Respondent’s allegations of fraud per-taining to the
summary judgment that was granted against him
it is admitted that the
Respondent has been aware of these so-called sufficient facts for
some time but does not explain why these
were not raised in summary
judgment proceedings. The Respondent has had more than ample
opportunity to ventilate the issues surrounding
the so-called fraud
and that approximately 19 months to raise the issues of the alleged
fraud that has not done so (action was
instituted in March 2005
already). It is submitted that these allegations pertaining to fraud
is (sic) in any event un-substantiated
and devoid of any merit as
fully discussed in the Applicant’s answering affidavit to the
Respondent’s supplementary
opposing affix-davit and Applicant
in any event furthermore relies on the defences of
res
judicata.
(19.6) The
Respondent is, with respect, transparently en-devouring to postpone
and prolong the sequestration proceedings as much
as possible. It is
further submitted that these attempts are dishonest, disingenuous and
mala
fide
and such conduct should not be tolerated by this Honourable Court.
(19.7) The
Respondent has been aware of the identity of the true creditor, the
Applicant, as far back as the time when the summons
was issued
against Respondent and served on him. It must be remembered that the
registration number of the applicant is clearly
reflected on the
suretyship which forms part of the summons and particulars of claim.
(19.8) It is
reiterated that the Respondent has not furnished a satisfactory
explanation both of the circumstances where-under he
made certain
admissions originally and of the reasons why he now seeks to withdraw
the admissions.
(19.9) An analysis
of defences previously raised by the Respondent indicates that his
previous affidavits are depleted (sic) with
contradictions.
Reference in this regard is made to paragraph 11 of the Applicant’s
answering affix-davit in the application
in terms of
Rule 6(5)(e)
in
which the previous defences raised by the Respondent are analysed on
p77 to 83 of the paginated papers. There is therefore
no merits
(sic) in the so-called investigations done by Mr Hough.
(19.10) With regards
to the Respondent’s financial position is it fully set out in
paragraphs 5.1 to 5.9 of the founding affidavit
in the application
for sequestration on pages 6-8 of the paginated papers. The
financial position of the Respondent as set out
by the Applicant in
his founding affidavit is however denied by the Respondent in his
opposing affidavit.
(19.11) The
Respondent’s wife is the owner of several assets found at the
Respondent’s premises. It is submitted that,
where the
Respondent to be sequestrated, all the Respondent’s wife’s
assets will vest in the Respondent’s trustee
pursuant to the
provisions of
Section 21
of the
Insolvency Act. The
trustee
appointed to the Respondent’s estate would then be in a
position to determine whether the Respondents’ wife
acquired
all her assets by a title separate from the Respondent’s
creditors.
(19.12) The
Respondent’s assertions regarding the assets in his opposing
affidavit must be regarded with extreme caution.
It will certainly
be necessary, and to the advantage of creditors, for the Respondent’s
estate to be sequestrated to enable
a trustee to conduct a full
investigation into all the assets referred to in the opposing
affidavit as well as the assets and income
referred to in the
financial statements being Annexures “JM6” and “JM7”
to the founding affidavit. Additionally,
as already stated, the
Respondent’s wife’s assets will vest in the Respondent’s
trustee in terms of
Section 21
of the
Insolvency Act and
a trustee
will be able to determine whether Respondent’s wife acquired
all her assets by a title separate from the Respondent’s
creditors. Applicant in the event of sequestration order being
granted fully intend to conduct a thorough and extensive
interrogation
in terms of
Section 152
of the
Insolvency Act wi
th a
huge return and precisely what has transpired with the Respondent’s
assets and income.
(19.13) The
Respondent in his opposing affidavit also refers to several
agreements entered into discussed in paragraph 4.1 of his
opposing
affidavits on page 26 of the paginated papers. It is submitted on
behalf of the Applicant that the Applicant was not
privy to any of
these agreements referred to in this paragraph and accordingly
submits that this is not relevant to the application
for
sequestration.
(19.14) The
Respondent’s opposing of this application for sequestration of
his estate is not justified due to the fact that
the Respondent in
his opposing affidavit does not set out any factual or any basis in
law on which he relies.
(19.15) In
conclusion, it is submitted that there is no dispute of facts on the
papers and that the final order of sequestration
should be granted.
It is furthermore submitted that the Respondent’s supplementary
opposing affidavit as already discussed
supra
does not take the matter any further and is in any event devoided
(sic) of any truth and merit as is clearly indicated in the
Applicant’s answering affidavit to the Respondent’s
supplementary opposing affidavit.
(19.16) It is
further submitted that the Applicant has clearly proven on the
balance of probabilities that it is entitled to a final
order of
sequestration in that:
19.16.1 The
applicant has established against the Respondent a claim such as is
mentioned in 9(1) of the
Insolvency Act;
19.16.2 The
Respondent committed an act of insolvency;
19.16.3 There is
reason to believe that it will be to the advantage of creditors of
the Respondent if his estate is sequestrated.
(19.17) It is
accordingly submitted that the estate of the Respondent should be
finally sequestrated. This marked the end of Applicant’s
contentions and submissions.
(E)
THE
RESPONDENT’S CASE
In the heads of
argument filed on behalf of the Respondent, the following,
inter
alia,
is stated that:
[20] In support of
his opposition to the final sequestration of his estate, the
Respondent contends:
(20.1) That the
Applicant is not a creditor of his estate as contemplated by
Section
9(1)
of the said Act and that the Applicant consequently never had
locus
standi
to apply for the provisional sequestration of his estate.
(20.2) That he has
not committed an act of insolvency, as
Section 9(2)
of the said Act
require (sic);
(20.3) That there is
no reason to believe that it will be to the advantage of creditors if
his estate is sequestrated.
[21] The Respondent
alleges that there is
prima
facie
evidence of a fraud having been committed by the Plaintiff under case
number 8695/2005 in obtaining the judgment against him that
underlies
the
nulla
bona
return relied on by the Applicant for the sequestration of his
estate.
[22] The essence of
the defence raised by the Respondent is that there exists strong
prima
facie
evidence of fraud having been committed which, if proved in court,
may result in the judgment under case number 8695/2005 being
set
aside on grounds of fraud under the common law.
[23] The Respondent
states that he had at all material times been under the
bona
fide
impression in opposing the said action that the Plaintiff was Prochem
(Pty) Ltd with Registration No: 2001/003964/07. The Respondent
refers the Court to Prochem (Pty) Ltd with Registration No:
2001/003964/07 in his affidavit as Prochem 1, at page 99 paragraph
35.1 of the paginated papers.
[24] On 3 June 2003
Prochem 1
inter
alia
concluded an agreement with Amenable Investments (Pty) Ltd with
Registration No: 2003/008551/07 to dispose of its businesses,
as
going concerns, to Amenable.
[25] In the circular
to creditors regarding the said transaction and annexed to the papers
as Annexure “RS3”, the registration
number of Amenable is
stated as 2003/008551/07 and the registration number of Prochem )Pty)
Ltd is stated as 2001/003964/07.
[26] Although
Amenable and Prochem1 were clearly two separate companies, Amenable
on 18 May 2004 changed its name to Prochem (Pty)
Ltd, which change of
name was affected (sic) under company registration number
2003/008551/07.
[27] The Respondent
states that following the investigations on his behalf, it turned out
that Prochem1 was in fact not the same
Prochem (Pty) Ltd whose
registration details are inserted on the suretyship namely
Registration No: 2003/008551/07.
[28] The Respondent
then states that ISS had no indebtedness to the said Prochem (Pty)
Ltd with Registration No: 2003/008551/07
at the time that he was
presented with the suretyship to sign.
[29] It has already
been stated that the said Prochem (Pty) Ltd with Registration No:
2003/008551/07 again changed its name to
Protea Chemicals (Pty) Ltd
on 6 June 2005.
[30] Further
evidence of the alleged fraud is to be found in Morrison’s
replying affidavit to the Respondent’s further
affidavit.
Morrison refers to copies of invoices issued by the Applicant to ISS
before the Respondent signed the Deed of Suretyship
on 31
st
May 2004 and annexes copies thereof dated April 2004 to 29 May 2004
as Annexures “JM12” to “JM18”.
[31] Morrison at
p283 par 23.4 of the paginated papers, then states that: “It
is very clear from the invoices that the invoicing
creditor is Protea
Polymers a division of Prochem (Pty) Ltd, Registration Number
2003/008551/07.”
[32] On perusal of
the said invoices it appears from each and every one of them that
they were issued by Protea Polymers, a division
of Protea Chemicals
(Pty) Ltd (Reg No 2003/0008551/07). In view of the fact that
Amendable only changed its name to Prochem (Pty)
Ltd on 18 May 2004
and Prochem (Pty) Ltd changed its name to Protea Chemicals only on
the 6
th
of June 2005, these invoices covering the period 19 April 2004 to 20
May 2004 are clearly a fabrication as Protea Chemicals (Pty)
Ltd did
not exist at that time.
[33] It must be
taken into account that the degree of proof required before a final
order of sequestration will be granted, is higher
than when a
provisional order is sought in that the mater must be proved on a
balance of probabilities. In this regard the Court
is referred to
the case
Braithwaite
v Gilbert (Volkskas Bpk Intervening)
1984
(4) SA 717
(W) at 718B-C as authority.
[34] The Applicant
should therefore prove its case upon a clear balance of probabilities
and where the Respondent disputes the indebtedness,
the onus is on
the Respondent to prove not that it is not indebted to the Applicant,
but that the indebtedness is
bona
fide
disputed on reasonable grounds. In this regard the Honourable court
is respectfully referred to the following cases:
Wackrill v
Sandton International Removals (Pty) Ltd
1984 (1) SA 282
(W) at 286A and further;
Machanick Steel
& Fencing (Pty) Ltd v Wesrhodan (Pty) Ltd
1979 (1) SA 264
(W) at 269;
Badenhorst v
Northern Construction Enterprises (Pty) Ltd
1956
(2) Sa 346
(T) at 347.
[35] The question is
how the court should deal with an opposed application where
affidavits reveal fundamental and crucial disputes
of fact and where
there is not preponderance of probability either way, on the papers.
It is submitted that where affidavits do
not reveal a balance of
probabilities in favour of the Applicant, then clearly no
prima
facie
case is established. In this respect the above Honourable Court is
hereby referred to the case of
Kalil
v Decotex (Pty) Ltd & Another
1988
(1) SA 943
(A) at 975 J, 979E and 979I as authority.
[36] In the premises
it is submitted that the Rule Nisi should be discharged with costs on
an punitive scale. This concluded the
Respondent’s contentions
and submissions.
(F)
ANALYSIS
AND FINDINGS
[37] In order to
cater for a systematic analysis of the issues and contentions raised
by the Respondent to the relief claimed by
the Applicant, it is
necessary to refer to paragraph [20]
supra
as well as to certain allegations in the papers which have been made
by the Respondent in respect of his opposition to the final
sequestration of his estate.
[38] In paragraph
20.1
supra
the Respondent states that the Applicant never had
locus
standi
to apply for the provisional sequestration of his estate because the
Applicant is not a creditor of his estate as contemplated
by section
9(1) of the Insolvency Act no 24 of 1936 (“the Act”).
The above statement on the Applicant’s
locus
standi
sounds contradictory to Respondent’s admissions in his first
affidavit in which he opposed the application. For example,
in such
admitted the identity of the Applicant but also that “the
Applicant holds no security for payment of this debt from
the
Respondent.”
[39] Whatever
prompted the Respondent to change back by raising the issue of
locus
standi
it would appear that this has happened as a result of his discovery
of what he calls new facts. As he himself states in paragraph
5 of
his Rule 6(5)(e) application:
“
In view of
the fact that
I
have become aware of new facts
which was (sic) unknown to me at the time of deposing to the Opposing
Affidavit I respectfully submit that the admissions therein
contained
should be supplemented and I humbly beg leave of this Honourable
Court
to
incorporate such new matter
as contained in my affidavit …” My underlining for
emphasis.] In consequence of the above development the Applicant
argues in sub-paragraphs 19.2, 19.3 and 19.4
supra
that the Respondent’s withdrawal of previous admissions is
mala
fide,
very unsatisfactory and tactical so as to delay the sequestration
proceedings.
[40] To resolve this
impasse one has to read the relevant Rule of court
pari
passu
with applicable case law. The relevant rule is 36 and unfortunately
it gives no guidance in regard to the tests to be applied.
But, as
Hiemstra J (as he then was) aptly put it in
President
Versekeringsmaatskappy Bpk v Moodley
1964 (4) SA 109
(T) at 110H:
“
There are two
guiding rules to be distilled from various authorities:
1. There must have
been a
bona
fide
mistake on the party seeking to amend;
2. The amendment
must not cause prejudice to the other side which cannot be cured by
an appropriate order as to costs. It has been
suggested, especially
in view of the decision in
Rishton
v Rishton,
1912 TPD 718
, that an amendment involving a withdrawal of an
admission is to be put on a different basis. This is not so. The
approach is
the same, but the withdrawal of an admission is usually
more difficult to achieve because (i) it involves a change of
bona
fides
thereof, and (ii) it is more likely to prejudice the other party who
had by the admission been led to believe that he need not
prove the
relevant fact and might, for that reason, have omitted to gather the
necessary evidence.”
[41]
In
casu
the Applicant contends and submits that the Respondent is “clearly
mala
fide,
and is acting in an attempt to delay the sequestration proceedings”
(
vide
sub-paragraph
19.4
supra.)
This means that if the withdrawals of the Respondent are allowed,
this would prejudice the Applicant in the sense that the
sequestration
proceedings would be protracted or might even never
come to a close. Besides, such prejudice does not appear to be one
that can
be cleared by an appropriate order as to costs. It follows
that the finding I arrive at is that the Respondent’s
withdrawal
of his initial admissions cannot be allowed and his
defence based on the Applicant’s
locus
standi
has to fail.
[42] The second
defence raised by the Respondent is that he has not committed an act
of insolvency, as Section 9.2 of the Insolvency
Act requires. (
Vide
sub-paragraph 20.2
supra.)
Section
9.2 of the Act states that a liquidated claim which has accused but
which is not yet due on the date of hearing of the petition,
shall be
reckoned as a liquidated claim for the purposes of section (1).”
In other words, this section is irrelevant here.
What is relevant
is section 8 of the Act which provides for acts of insolvency.
[43] Section 8(b) of
the Act states expressly that:
“
A debtor
commits an act of insolvency –
(b) if a court has
given judgment against him and he fails, upon the demand of the
officer whose duty it is to execute that judgment,
to satisfy it or
to indicate to that officer disposable property sufficient to satisfy
it, or if it appears from the return made
by that officer that he has
not found sufficient disposable property to satisfy the judgment;
In
casu,
the Respondent has admitted that:
(i) The Applicant
caused to be issued a warrant of execution, which was served on him
(Respondent) on 15 February 2006;
(ii) The Sheriff
rendered a return of
nulla
bona
to the warrant of execution. A copy of the return of service is
attached to the papers as Annexure “JMB3”.
(iii) The Applicant
accordingly submits that the Respondent has committed an act of
insolvency as envisaged in terms of
section 8(b)
of the
Insolvency
Act 24 of 1936
.
In the light of the
above, I find that the contents of the annexed Sheriff’s
nulla
bona
return is incontestestable and that it is on all fours with the
provisions of section 8(b) of the Act. I also find that the
Respondent’s
defence in this respect is misconceived.
[44] The third
defence and contention of the Respondent is that there is no reason
to believe that it will be to the advantage of
creditors if his
estate is sequestrated. This contention has been consistently held
by the Respondent in the following terms:
“
I do not own
any movable or immovable assets”. (
Vide
page 27 of the papers).
“
I deny that
to sequestrate my estate will be of any benefit to creditors as the
said assets are the only assets under my control
of which the
ownership has already been set out above. I further humbly put on
record that the liquidators of international Source
Services) (Pty)
Limited, for which company I also signed surety, has already done a
proper investigation into all available assets
and has not brought an
application to sequestrate my personal estate.” (
Vide
p29 of the papers.)
Later on, the
Respondent,
inter
alia,
states: “There will be no advantage for creditors, and I will
have no ability to earn income to provide for my family or
to pay any
debts. I therefore pray that the application by the applicant is
(sic) denied with costs”. (
Vide
page 30 of the papers.)
[45] The Applicant,
on the other hand, maintains and submits that with regards to the
advantage to creditors, it is not necessary
for an applicant to
convince a court that the sequestration would be to the financial
advantage of the creditors, but merely that
there is a reason to
believe that this will in fact be the case.
Furthermore, the
Applicant submits that it is not necessary to prove that the debtor
has any assets, unless it is prudent that
the debtor has either an
income in terms whereof a large portion in terms of section 23(5) of
the Act will most probably be available
to the creditors or that
there is a reasonable prospect that a curator, by relying on the
machinery of the Act, may retrieve or
recover assets which will be to
the financial advantage of the creditors.
[46] In terms of
section 12(1) read together with sections 8 of the Act, the Court may
grant an order for the sequestration of the
estate of a
debtor/respondent if it is convinced and satisfied,
inter
alia
,
that:
(46.1) The
Respondent has committed an act of insolvency or is factually
insolvent;
(46.2) There is
reason to believe that it will be to the advantage of creditors that
Respondent’s estate is sequestrated.
Furthermore, the
onus
is on the Applicant to show advantage to creditors. The law also
requires that in an application for an order of sequestration
the
facts put before the Court must satisfy it that there is a reasonable
prospect – not necessarily a likelihood, but a
prospect which
is not too remote – that some pecuniary benefit will result to
creditors. (
Vide
Meskin & Co v Friedman
1948 (2) SA 555
(WLD) at 558
per
Roper J.)
Having carefully
scrutinised the evidence in this application, I am satisfied that
there is a prospect which is not too remote
that some pecuniary
benefit will accrue to creditors. And, on the facts, I am also
satisfied that a curator, by relying on the
machinery of the
Insolvency Act, may
retrieve or recover assets which will be to the
financial advantage of creditors. (
Vide
BP Southern Africa (Pty) Ltd v Firstenburgh
1966
SA 717
(O) at 720.)
[47] Lastly, as to
the Respondent’s allegation that there is
prima
facie
evidence of a fraud having been committed by the Plaintiff in
obtaining the judgment against him under case number 8695/2005
because
of changes undergone by the Applicant’s name and
identity, as well as the subsequent investigations and revelations of
one
Hough, my considered opinion is that it is sufficient to state
that the papers indicate that:
(47.1) The
Respondent has been aware of these so-called sufficient facts for
some time but does not explain why these were not raised
in the
summary judgment proceedings (if they in fact existed). For example,
the Respondent states that: “I had all along
been of the view
that there was a fraud or (sic) sorts” (
Vide
page
89 of the papers.)
(47.2) Quite a
considerable time (almost nineteen months) passed before the
Respondent could raise his reasons for the alleged fraud.
No
explanation is given by him for the delay.
(47.3) In the papers
the Applicant has raised the defence of
res
judicata
in respect of Respondent’s attack of the summary judgment
proceedings.
(47.4) I find no
disputes of fact in this matter which could call for the matter to be
referred to oral evidence.
[48] Over and above
the foregoing four facts, it has to be stated that in our law a
judgment procured by the fraud of one of the
parties, whether by
forgery, perjury or in any other way such as the fraudulent
withholding of documents, cannot be allowed to
stand. (
Vide
R v
Schiff
1913 AD 224
; also
Schierhout
v Union government
1927 AD 94
at 98.) Any party seeking to set aside a judgment on the
ground of fraudulent evidence must prove the following:
(a) that the
evidence was in fact incorrect;
(b) that it was made
fraudulently and with an intent to mislead; and
(c) that it diverged
to such an extent from the true facts that the Court would, if the
true facts had been placed before it, have
given a judgment other
than what it was induced by the incorrect evidence to give. (
Vide
Swart v Wessels
1924 TPD 187
at 189-190.
In
casu
the Applicant, apart from having attempted twice to appeal the
summary judgment decision against him, dies not seem to have made
an
application to court to have such judgment rescinded or set aside, in
particular, on the above basis.
[49] Lastly,
fraud,
in our law, is defined as the unlawful and intentional making of a
misrepresentation which causes actual prejudice or which is
potentially prejudicial to another. (
Vide
S v Henkes
1941 AD 143
at 161.) Because it is unlawful it is regarded as a
crime punishable at law.
Anyone who has been
defrauded is at liberty to lay a criminal charge of
fraud
against the one who has committed it.
In
casu,
it is merely alleged
in
vacuo
and there is not a single iota of evidence that the Respondent, as
the alleged prejudiced and aggrieved party, has brought such
charges
against the alleged fraudster. Besides, to accused another of having
committed fraud by means of legal proceedings is
not, in my humble
opinion, a trivial matter.
[G]
CONCLUSION
AND ORDER
[50] In the light of
the foregoing analysis and findings, I am constrained to arrive at
the ineluctable conclusion that this application
has to succeed. In
the result I make the following order:
“
Both prayers
1 ands 2 of the relevant notice of motion are hereby granted.”
_____________________
MNS SITHOLE
ACTING JUDGE OF THE
HIGH COURT