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[2009] ZAGPJHC 64
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Investec Bank Limited and Another v Mutemeri and Another (O9/22247) [2009] ZAGPJHC 64; 2010 (1) SA 265 (GSJ) (25 September 2009)
THE
SOUTH GAUTENG HIGH COURT, JOHANNESBURG
Case
O9/22247
In
the matter between:
INVESTEC
BANK LIMITED First
Applicant
PRIVATE
MORTGAGES 3 (PTY) LIMITED
Second
Applicant
and
MUTEMERI,
GAMA
First
Respondent
MUTEMERI,
NELLIE
Second
Respondent
and
BARRY
KOTZE
Intervening
Applicant
JUDGMENT
Introduction
1.
The
applicants apply for the sequestration of the common estate of the
respondents who are said to be married in community of property.
The
respondents raise a range of defences. Most prominent among them, is
their contention that the applicants' claims against them
are based
on
''credit
agreements"
within
the meaning of the
National Credit Act 34 of 2005
and that the
application for their sequestration is barred under it.
2.
The
respondents applied to a debt counsellor for review of their debts in
terms of
s 86
of the NCA. The Debt Counsellor is Mr Barry Kotze. He
accepted the respondents' application, gave notice to all their
credit providers,
concluded that they appeared to be over-indebted
and applied to the Magistrate's Court for their debts to be
re-structured in terms
of
ss 86
and
87
of the NCA. His application to
the Magistrate's Court was launched on 15 May 2009 but is only
enrolled for hearing on 11 August
2010, that is, almost a year from
now. The respondents' case is that until then, no legal proceedings
may be instituted against
them for enforcement of the applicants'
claims under the credit agreements and that their application for
sequestration constitutes
proceedings of that kind.
3.
When
this application for sequestration first came before this court for
hearing on 25 August 2009, the respondents applied for
a
postponement. Beckerling AJ refused their application but stood the
matter down until 28 August 2009. On that day, the Debt Counsellor
sought and was granted a postponement to enable him to launch an
application for leave to intervene as a party to the proceedings.
He
has since then made such an application. The applicants oppose his
application for joinder. They made it clear however that
they had no
objection to him making submissions as a friend of the court but that
he lacked standing to be admitted as a party
to the proceedings. I
accordingly heard the Debt Counsellor, both on his application for
joinder and on the merits of the application.
4.
Although
logic suggests that I should determine the Debt Counsellor's
application for intervention at the outset, it would make
no
practical difference when I do so because I have already heard him on
his application for intervention and on the merits of
the application
for sequestration. It will in the circumstances be more convenient to
deal with his application for intervention
at the end of this
judgment because the reader will by then be better acquainted with
the subject matter of this case and the Debt
Counsellor's interest in
it.
5.
I
turn to consider the grounds upon which the respondents and the Debt
Counsellor submitted that the application for sequestration
should be
dismissed.
The
respondents' marriage
6.
The
respondents were married in Zimbabwe. The applicants alleged in their
founding affidavit that the respondents were deemed to
be married in
community of property. Their allegation seems to be borne out by
declarations the respondents made in some of their
loan agreements
with the applicants. It is the basis on which they seek the
sequestration of the respondents' joint estate.
7.
The
respondents did not dispute the allegation that they were deemed to
be married in community of property and did not challenge
the
competence of the application for sequestration of their joint estate
in their answering affidavits. Their counsel however
submitted an
argument that, according to the law of Zimbabwe, their marriage is
one out of community of property. But this is not
a contention open
to the respondents in the face of their implied admission on the
papers that they were married in community of
property and in the
absence of any evidence to the contrary.
The
applicants' claims
8.
It
is common cause that the applicants have substantial liquidated
claims against the respondents. In an earlier application of
which I
shall say more later, the respondents admitted their indebtedness to
the applicants in unambiguous terms:
"I
entirely
agree with the Applicant on the following:-
•
That
Second Respondent and I are indebted to the two Applicants,
•
That
our bond account fell into arrears,
•
That
the Applicants are entitled at law to enforce payment by instituting
legal proceedings and that they may seek an order declaring
the
property in question specially executable."
9.
In
this application, the applicants give details of their claims against
the respondents and then
summarise
them as follows:
"As
at 27 August 2008, the respondents were indebted:
52.1
to the second applicant as concerns the loan agreements and as
concerns the mortgage bonds bearing account number 226105/003,
in the
amount of R2 041 506,20 together with interest thereon at the rate of
prime minus 1.65% (prime currently 5.5%) equivalent
to 13.85% from 27
August 2008 to date of payment, calculated daily, compounded
monthly;
52.2
to
the first applicant as concerns the credit card agreement in respect
of account number 10010776829, in the amount of R118
723,47
together
with interest thereon at the rate of prime less one per centum being
14,5% as at 27 August 2008; and
52.3
to
the first applicant as concerns the indebtedness of RAH in the amount
of R500 000 together with interest thereon."
10.
The
respondents did not take issue with any of the details of the
applicants' claims except to deny that the third claim was one
for
R500 000. It is a claim under a suretyship in terms of which the
respondents stood surety for the debts of RAH Products (Pty)
Limited.
It appears from a certificate of indebtedness issued by the first
applicant's Recoveries Manager, that the respondents'
debt under the
suretyship is only R337 503 plus interest from 27 May 2008. Subject
to this qualification however, the applicants'
claims against the
respondents are common cause.
The
respondents' insolvency
11.
In
their founding affidavit, the applicants alleged that the respondents
had committed various acts of insolvency in terms of s
8(g) of the
Insolvency Act 34 of 1936
and, by inference, that their liabilities
in fact exceeded their assets.
12.
This
inference was never seriously denied and has subsequently been fully
borne out by the respondents' application to the Debt
Counsellor
which they had confirmed on oath. They said in that application that
they had assets of only R4 million and liabilities
of R17.8 million.
This evidence more than suffices to establish
prima
facie
at
least, that the respondents are in fact hopelessly insolvent.
Advantage
to creditors
13.
In
their founding affidavit, the applicants contended that the
sequestration of the respondents' estate would be of advantage to
their creditors for a variety of reasons which may be reduced to two
fundamental grounds. First, the respondents are the owners
of
immovable property. The applicants did not adduce any evidence of the
value of this property and did not place any particular
value on it.
The applicants secondly said that a trustee would be able to
determine whether the respondents had disposed of their
assets to
third parties. They advanced some evidence from which it might be
inferred that the respondents might have done so.
14.
This
evidence should also now be seen in the light of the respondents'
statements confirmed on oath in their application to the
Debt
Counsellor, about the assets and liabilities in their estate. As
already mentioned, they claim to have assets of R4 million
and
liabilities of R17.8 million. Their assets include three immovable
properties on which they placed values without substantiating
them.
15.
The
respondents submitted that the applicants have not shown any
advantage to creditors because the property values upon which they
rely, have not been proved by expert evidence. They relied for this
submission on paragraph F4.2 of the Gauteng High Court Practice
Directives Manual which reads as follows:
"If
the existence of adequate advantage to creditors depends on the
extent to which a specific asset will contribute to the
free residue,
evidence of a person with appropriate skill must prove what price can
be expected on an expeditious sale which is
not delayed in order to
obtain a satisfactory negotiated price."
16.
But
this rule of practice must be seen in context. As a matter of law, an
applicant may _ generally rely on an admission by the
respondent, of
any fact upon which the applicant's case is based. But the weight of
such an admission depends entirely on the circumstances
in which it
is made. It may be conclusive in some circumstances and wholly
unpersuasive in others. An example of the latter, is
a self-serving
"admission"
made
by a respondent in a
"friendly"
application
for his or her sequestration. Such an admission made by a respondent,
of the value of his or her property, in order
to show advantage to
creditors, often carries so little weight as to be insufficient to
establish a cause of action for sequestration.
The rule of practice
then comes into play. The court declines to make a sequestration
order unless the applicant produces proper
expert evidence of the
property values in question.
1
1
17.
A
case such as this one on the other hand, is very different. It is not
a friendly sequestration. The parties are at arm's length.
The
respondents actively oppose the application for their sequestration.
They have not given any other evidence of the values of
their
properties as they could easily have done. In these circumstances,
the values they placed on their properties in their application
to
the Debt Counsellor, are not inherently suspect. There is no reason
why the applicants should not be allowed to rely on them
in this
application for their sequestration. Their earlier valuations are at
the very least sufficiently credible to satisfy the
requirements of
s
10(c)
of the
Insolvency Act, that
there must
prima
facie
be
"reason
to believe" that
the
respondents' sequestration will be to the advantage of their
creditors.
The
National Credit Act
18.
It
is common cause that the applicants' claims against the respondents,
are claims in terms of
"credit
agreements",
and
that the applicants are the
"credit
providers"
and
the respondents the
"consumers"
under
those agreements within the meaning of the NCA. The respondents
contend that the applicants are precluded by the NCA from
seeking
their sequestration in this application.
19.
The
respondents rely in the first place on
ss 129(1)
and
130
(1)(b) of the
NCA. These provisions, shorn of their qualifications which are not
relevant to the issues in this case, read as follows:
"
1 29 Required procedures before debt enforcement
on
a plan to bring the payments under the agreement up to date; and
(b)
...
(c)
...
may not commence any legal proceedings to enforce the agreement
before -
(i)
first
providing notice to the consumer, as contemplated in paragraph
(a)....; and
(ii)
meeting
any further requirements set out in
section 130.
"
0cm
; line-height: 200%">
"130
Debt procedures in a Court
(1)
... a credit provider may approach the court for an order to enforce
a credit agreement only if, at that time, the consumer
is in default
and has been in default under that credit agreement for at least 20
business days and -
(a)
...
(b)
in
the case of a notice contemplated in
section 129(1)
, the consumer has
-
(i)
not
responded to that notice; or
(ii)
responded
to the notice by rejecting the credit provider's proposals and
c)...”.
20.
It is common cause that the respondents were in default under their
credit agreements by 7 August 2008. On that date, the applicants
gave
the respondents the prescribed notices of default in terms of
s
129(1)(a).
They proposed to the respondents as required by
s
129(1)(a)
, that the respondents
"refer
the credit agreement to a debt counsellor, alternative dispute
resolution agent, consumer court or ombud with jurisdiction".
21.
The
respondents did not initially adopt any of these proposals. They made
promises instead, to pay their outstanding arrears under
the credit
agreements over time. They proposed a settlement on the basis of
these promises in a letter to the applicants on 22
August 2008. To
the applicants' suggestion that they refer the credit agreements to a
debt counsellor, they responded as follows:
"
You said that we may approach debt counsellors with our credit
agreement. We are able to do so concurrently with our efforts
now to
settle the arrears with the bank. We have already identified a debt
counsellor in Johannesburg who we are visiting in a
week's time to
assist us to consolidate our debts and to get over with the arrears."
22.
This
counter-proposal was not acceptable to the applicants. They launched
an application in this court on 16 October 2008 for payment
of their
claims under the credit agreements. Motlaung AJ however dismissed
their application in a judgment handed down on 13 February
2009. He
held that the applicants were precluded by
s 130(1)
from enforcing
their claims without first considering and either accepting or
rejecting the respondents' counter-proposal. He put
it as follows:
"The
applicants are not entitled to ignore the respondents' response
and/or offer. The (applicants), whilst not obliged to
agree to any
offer, whether made by the respondents themselves or as a result of
the debt counselling process, are obliged to consider
the offer and
either accept or reject it or participate in the debt counselling
process and either accept or reject the offer the
process of debt
counselling has brought forward, before they can be entitled to
proceed to court by way of this application.
I
therefore find that the applicants have failed to comply with the
provisions of the NCA, in particular, with
section 130
of the NCA, by
failing to respond to the response by the respondents regarding the
settlement offer and/or debt counselling process."
23.
The
applicants submitted that Motlaung AJ erred in coming to this
conclusion and informed me that his judgment was being taken on
appeal. They submitted that they had complied with
s 130(1
)(b)
because the respondents' failure to adopt and implement the
applicants' proposals and their counter-proposal, amounted to
a
failure to respond to, or a rejection of, the applicants' proposals
within the meaning of
s 130(1)(b).
0c
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24.
Although
the respondents had not adopted or implemented any of the applicants'
proposals before the previous application was launched,
they did so
while the judgment in that application was pending. They applied to
the Debt Counsellor on 13 January 2009, for review
of their credit
agreements in terms of
s 86
of the NCA. It means that the respondents
had adopted and implemented the applicants' proposals by the time the
applicants launched
the present application on 29 May 2009. The
applicants however submit that the respondents' application to the
Debt Counsellor
for review of their credit agreements in terms of
s
86
, was not competent and should be disregarded because
s 86(2)
provides that an applicant for debt review in terms of
s 86
, may not
be made in respect of a credit agreement once the credit provider
"has
proceeded to take the steps contemplated in
section 129
to enforce
that agreement".
The
applicants argue that their default notices in terms of
s 129(1)(a)
were steps of this kind and that the respondents were consequently
precluded by
s 86(2)
from applying for review of their credit
agreements.
25.
This
argument exposes an anomaly in the applicants' case and indeed in the
NCA itself, if a default notice in terms of
s 129(1)
were to be
regarded as a
"step
contemplated in
s 129
"
to
enforce a credit agreement. It would be anomalous because the credit
provider's default notice in terms of
s 129(1)(a)
must propose to the
consumer
inter
alia
that
he or she
"refer
the credit agreement to a debt counsellor".
But
if the selfsame notice is a
"step
contemplated in
section 129
",
then
it would prevent the consumer from referring the credit agreement to
a debt counsellor in terms of
s 86(2).
In other words, on this
interpretation, a default notice would propose to the consumer that
he or she make application to a debt
counsellor but at the same time
trigger the bar in terms of
s 86(2)
which precludes the consumer from
doing so.
26.
It
is fortunately not necessary for me to resolve this issue. I shall
assume in favour of the respondents, as Motlaung AJ had found,
that
the applicants did not meet the requirements of
s 130(1)
and were
accordingly precluded from approaching the court
"for
an order to enforce a credit agreement".
On
this assumption, the applicants' earlier application for enforcement
of their credit agreements with the respondents, was barred
by
s
130(1)
as Motlaung AJ has found. The question in this application
however, is whether an application for sequestration of a consumer's
estate which is based on the applicant's claim against the consumer
in terms of a credit agreement, is an application
"for
an order to enforce a credit agreement"
within
the meaning of
s 130(1).
0c
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27.
There
is little doubt that a sequestrating creditor's motive in applying
for the sequestration of its debtor, may be and often is,
to obtain
payment of its debt. The Appellate Division made this clear in Estate
Logie v Priest
1926 AD 312
at 319 where Solomon AJ said the
following:
"It
appears to me that it is perfectly legitimate for a creditor to take
insolvency proceedings against a debtor for the purpose
of obtaining
payment of his debt. In truth that is the motive by which persons as
a rule are actuated in claiming sequestration
orders. They are not
influenced by altruistic considerations or regard for the benefit of
other creditors, who are able to look
after themselves. What they
want is payment of their debt, or as much of it as they can get."
28.
But
the question whether an application for sequestration constitutes an
application
"for
an order to enforce a credit agreement"
within
the meaning of
s 130(1)
of the NCA, depends on the nature of the
relief the creditor seeks and not on the sequestrating creditor's
underlying motive in
bringing the application. Whatever a credit
provider's underlying motive, the application is not barred by
s
130(1)
unless it is an application for an order
"to
enforce a credit agreement".
29.
In
Collett v Priest
1931 AD 290
the Appellate Division considered
whether a sequestration order made by the Eastern Districts Local
Division could be taken on
appeal to the Cape Provincial Division of
the Supreme Court. The relevant statute permitted appeals from the
one to the other in
"any
civil suit".
The
Appellate Division held that a civil suit was a
"legal
proceeding in which one party sues for or claims something from
another"
and
that it did not include an application for sequestration. De Villiers
CJ explained at 299 why it could not be said that an application
for
sequestration was a proceeding by which one party sued for or claimed
something from another:
"The
order placing a person's estate under sequestration cannot fittingly
be described as an order for a debt due by the debtor
to the
creditor. Sequestration proceedings are instituted by a creditor
against a debtor not for the purpose of claiming something
from the
latter, but for the purpose of setting the machinery of the law in
motion to have the debtor declared insolvent. No order
in the nature
of a declaration of rights or of giving or doing something is given
against the debtor. The order sequestrating his
estate affects the
civil status of the debtor and results in vesting his estate in the
Master. No doubt before an order so serious
in its consequences to
the debtor is given the court satisfies itself as to the correctness
of the allegations in the petition.
It may for example have to
determine whether the debtor owes the money as alleged in the
petition. But while the court has to determine
whether the
allegations are correct, there is no claim by the creditor against
the debtor to pay him what is due nor is the court
asked to give any
judgment, decree or order against the debtor upon any such claim."
30.
In
Prudential Shippers SA Limited v Tempest Clothing Co (Pty) Limited
1976 (2) SA 856
(W), the applicant applied for the winding-up of the
respondent's estate. The respondent alleged that the debt upon which
the applicant
relied, had arisen from a money-lending transaction
subject to the Limitation and Disclosure of Finance Charges Act 73 of
1968.
It asked that the applicant's officers be examined under s 11
of that Act. The section provided for such an examination in any
proceedings
"for
the recovery of a debt"
in
pursuance of a money-lending transaction. After a full and careful
consideration of the authorities, McEwan J held at 863D to
865A that
an application for the winding-up of a debtor's estate did not
constitute proceedings
"for
the recovery of a debt".
31.
It seems to me that the rationale of these judgments is equally
applicable to the proper interpretation of s 130(1) of the NCA
which
applies only to an application to court
"for
an order to enforce a credit agreement".
It
does not apply to an application by a credit provider for the
sequestration of a consumer's estate based on a claim in terms
of a
credit agreement between them. Such an application is not one for an
order enforcing the credit provider's claim against the
consumer.
Section 9(2)
of the
Insolvency Act indeed
makes it clear that the
sequestrating creditor's claim need not even be due, that is, need
not yet be enforceable. An application
for sequestration may be made
on the strength of a claim which is not yet enforceable, because a
sequestration order is not an
order for enforcement of the claim. Its
purpose and effect are merely to bring about a convergence of the
claims in an insolvent
estate to ensure that it is wound up in an
orderly fashion and that creditors are treated equally. An applicant
for sequestration
must have a liquidated claim against the
respondent, not because the application is one for the enforcement of
the claim, but merely
to ensure that applications for sequestration
are only brought by creditors with a sufficient interest in the
sequestration. Once
the sequestration order is granted, the
enforcement of the sequestrating creditor's claim is governed by the
same rules that apply
to the claims of all the other creditors in the
estate. The order for the sequestration of the debtor's estate is
thus not an order
for the enforcement of the sequestrating creditor's
claim. I conclude that an application for sequestration is not an
application
for enforcement of the sequestrating creditor's claim and
is thus not subject to the requirements of
s 130(1)
of the NCA.
32.
The
respondents however submitted that, whether or not an application for
sequestration is subject to
s 130(1)
, it is in any event subject to
s
130(3)
which is not limited to applications for the enforcement of
credit agreements but extends to
"any
proceedings commenced in a court in respect of a credit agreement".
The
relevant provisions of this section read as follows:
"Despite
any provision of law or contract to the contrary, in any proceedings
commenced in a court in respect of a credit agreement
to which this
Act applies, the court may determine the matter only if the court is
satisfied that -(a) In the case of proceedings
to which sections 127,
129 or 131 apply, the procedures required by those sections have been
complied with."
33.
The
respondents submitted that an application for sequestration is a
proceeding
"in
respect of a credit agreement'
within
the meaning of s 130(3) and that it thus rendered such an application
subject to the requirements of s 129 of the NCA. But
s 130(3) does
not extend the scope of s 129. It merely provides that, in
proceedings (already) subject to the requirements of s
129, the court
must be satisfied that there has been compliance with those
requirements. One accordingly has to turn to s 129 to
determine
whether its requirements apply to applications for sequestration. The
only relevant requirements are those laid down
by s 129(1)(b) but
they also apply only to
"legal
proceedings to enforce"
credit
agreements. I have already concluded that applications for
sequestration are not proceedings of that kind. They are accordingly
not subject to the requirements of s 129(1 )(b) and thus do not have
to comply with those requirements in terms of s 130(3).
34.
The
respondents lastly invoked s 88(3) of the NCA. It provides
inter
alia
that
a credit provider who receives notice of a consumer's application for
debt review in terms of s 86(4)(b)(i),
"may
not exercise or enforce by litigation or other judicial process any
right or security"
under
a credit agreement between the credit provider and the consumer,
until certain conditions have been met. But, for the reasons
already
mentioned, an application by a credit provider for the sequestration
of a consumer, does not constitute litigation or other
judicial
process by which the credit provider exercises or enforces any right
under the credit agreement between itself and the
consumer. The
credit provider may rely on its claim in terms of a credit agreement
to qualify as a creditor with standing to bring
the application for
the sequestration of the consumer. But it does not exercise or
enforce its right under the credit agreement
by doing so. Such an
application is accordingly also not precluded by s 88(3).
35.
1
conclude that the respondents' defences under the NCA cannot be
upheld. None of the provisions upon which they rely precludes
an
application by a credit provider for the sequestration of a consumer
based on a claim under the credit agreement between them.
The
Debt Counsellor's application to intervene
36.
The
Debt Counsellor contended that he had a direct and substantial
interest in the application for the respondents' sequestration
by
virtue of his functions as their debt counsellor in terms of s 86 of
the NCA. He described his interest in his application for
intervention as follows:
"My
direct and substantial interest that stands to be affected by a
judgment of the above Honourable Court is that I serve
a prescribed
function as provided for in the
National Credit Act as
set out in s
8(6) of the Act.
A
debt counsellor's position can be compared to that of a trustee in an
insolvent estate or an executor in a deceased estate or
an
administrator in terms of s 74 of the Magistrate's Court Act
(administration orders) to a function created by statute in respect
of the assets and obligations of the first and second respondents as
consumers.
I
am by statute obliged and entitled to exercise the functions in
respect of the credit agreements of the first and second respondents
as prescribed by section 86 of the Act.
I
furthermore have a direct and substantial interest to ensure that no
enforcement by a credit provider by litigation or other judicial
process takes place against the consumers (first and second
respondents) as provided for in s 88(3) of the Act.
In
terms of section 3 of the Act, the purpose of the Act is, inter alia,
providing for mechanisms for resolving over-indebtedness
based on the
principle of satisfaction by the consumer of all possible financial
obligations, providing for a consistent and accessible
system of
consensual resolution of disputes arising from credit agreements and
providing for a consistent and harmonised system
of debt
restructuring, enforcement and judgment, which places priority on the
eventual satisfaction of all possible consumer obligations
under
credit agreements. To achieve the purposes of the Act, section 8(6)
provides for a procedure which I as debt counsellor must
implement
and it enjoins the applicant to anticipate (sic) in good faith in the
review and in any negotiations designed to result
in responsible debt
re-arrangement."
37.
The role of debt counsellors under the NCA, is confined to the
functions they perform in terms of ss 71 and 86. They are
facilitators and mediators between consumers who have become
over-indebted on the one hand, and their credit providers on the
other.
The purpose of their intervention is ultimately to afford
relief to consumers in distress in appropriate cases. But the debt
counsellor's
role goes no further than that of mediator and
facilitator. He or she does not determine the relief afforded to
over-indebted consumers.
It is determined by agreement between the
consumers and their credit providers or by court order. Debt
counsellors do not take
control of or assume responsibility for
consumers' estates as the Debt Counsellor suggested by his analogy
which compared debt
counsellors with trustees, executors and
administrators. While debt counsellors undoubtedly perform an
important function in the
implementation of the NCA and the
achievement of some of its purposes, their role is not to police the
implementation of the NCA
or to act as guardians of the pursuit of
its purposes.
38.
An applicant for intervention in pending legal proceedings, has to
show a direct and substantial interest in the proceedings
concerned.
2
The applicant's interest in the proceedings must be a legal interest
in the subject-matter of the proceedings which may be prejudicially
affected by the court's judgment in the proceedings concerned. Mlambo
JA put it as follows in Gordon's case:
"The
issue in our matter, as it is in any non-joinder dispute, is whether
the party sought to be joined has a direct and substantial
interest
in the matter. The test is whether a party that is alleged to be a
necessary party, has a legal interest in the subject-matter,
which
may be affected prejudicially by the judgment of the court in the
proceedings concerned. In the Amalgamated
Engineering
Union case (supra) it was found that 'the question of joinder should
... not depend on the nature of the subject-matter
... but, ... on
the manner in which, and the extent to which, the court's order may
affect the interests of third parties'. The
court formulated the
approach as, first, to consider whether the third party would have
locus standi to claim relief concerning
the same subject-matter, and
then to examine whether a situation could arise in which, because the
third party had not been joined,
any order the court might make would
not be res judicata against him, entitling him to approach the courts
again concerning the
same subject-matter and possibly obtain an order
irreconcilable with the order made in the first instance. This has
been found
to mean that the order or judgment sought cannot be
sustained and carried into effect without necessarily prejudicing the
interests'
of a party or parties not joined in the proceedings, then
that party or parties have a legal interest in the matter and must be
joined. '
3
39.
The Debt Counsellor does not have such an interest in the application
for the sequestration of the respondents' estate merely
because he is
acting as their debt counsellor in terms of s 86 of the NCA. He has
no legal interest in the application for their
sequestration which
might be prejudicially affected by its outcome. His role is not to
advance or protect any legal interest of
his own. He also does not
assume control over or responsibility for the respondents' estate.
His role remains one of a mediator
and facilitator.
40.
I
conclude that the Debt Counsellor does not have a direct and
substantial interest in this application and that his application
for
intervention should accordingly fail.
Costs
41.
Counsel
for the Debt Counsellor accepted that, if his application for
intervention failed, there was no reason for the costs of
the
application not to follow its result. These costs include, not only
the costs of the application for intervention itself, but
also the
wasted costs of the postponement of the main application for
sequestration on 28 August 2009.
42.
It
is common cause that the applicants' and respondents' costs in the
main application for sequestration should be costs in the
administration of the respondents' insolvent estate. These costs
include the wasted costs if any, occasioned by the delay in the
application on 25 August 2009. The applicants asked for a further
order that the respondents pay the wasted costs of 25 August
2009 in
the event of a discharge of the order for the sequestration of their
estate for any reason. I am however of the view that
the wasted costs
of 25 August 2009 should follow the result of the application for
sequestration, whatever its outcome.
Order
43.
I
make the following order:
43.1.
The
application for intervention by the Debt Counsellor Mr Barry Kotze,
is dismissed with costs including the wasted costs occasioned
by the
postponement of the application for sequestration on 28 August 2009.
43.2.
The
respondents' joint estate is placed under provisional sequestration.
43.3.
The
respondents are called upon to advance reasons, if any, why the court
should not place their estate under final sequestration
on 20 October
2009 at 10h00 or as soon thereafter as the matter may be heard.
43.4.
The
applicants' and respondents' remaining costs in the application for
sequestration are to form part of the costs of the administration
of
the respondents' estate.
43.5.
The
applicants' costs include the costs of two counsel where applicable.
W
H Trengove
AJ
25
September 2009
1
1
Ex
parte Steenkamp
1996 (3) SA 822
(W) 825 to 830; Nel v Lubbe
1999 (3)
SA 109
(W) 110 to 112; Ex parte Anthony
2000 (4) SA 116
(C) paras 11
to 17; Ex parte Matthysen et uxor
2003 (2) SA 308
(T) 311 to 312
2
United
Watch & Diamond Co v Disa Hotels
1972 (4) SA 409
(C) 415 to 417;
Transvaal Agricultural Union v Minister of Agriculture and Land
Affairs
2005 (4) SA 212
(SCA) paras 64 to 66; Gory v Kolver NO
2007
(4) SA 97
(CC) paras 11 to 13; Gordon v Department of Health,
Kwazulu-Natal
[2008] ZASCA 99
;
2008 (6) SA 522
(SCA) para 9; Independent Newspapers v
Minister for Intelligence Services: In re Matselhla v President of
the RSA
2008 (5) SA 31
(CC) paras 17 to 18; National Director of
Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) para 85
3
Gordon
v Department of Health Kwazulu-Natal
[2008] ZASCA 99
;
2008 (6) SA 522
SCA para 9