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[2008] ZAFSHC 94
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De Klerk v Bornman (2393/08) [2008] ZAFSHC 94 (26 June 2008)
IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE FREE STATE
PROVINCIAL DIVISION)
Case
No.:
2393/08
In the
case between:-
JAN
HENDRIK DE KLERK
Applicant
and
CORNELIA
PETRONELLA CATHARINA BORNMAN
Respondent
HEARD:
12 JUNE 2008
_______________________________________________________
DELIVERED:
26
JUNE 2008
_______________________________________________________
JUDGMENT
_______________________________________________________
MOCUMIE, J
[1] On
12 June 2008 applicant
applied to this Court for the provisional sequestration of the
respondent’s estate on the basis that the respondent was unable
to pay her debts. In particular this application is based on an
amount of R1 500,00 which she had borrowed from him and which
has not
been repaid. In addition the respondent had written a letter to the
applicant informing him of her inability to pay him
in the following
words:
“
Hiermee
wil ek u meedeel dat a.g.v my finansiele omstandighede dit nie
moontlik is om die geld wat ek by u geleen het terug te betaal
nie.”
[2]
In
addition the applicant alleges the following paragraph:
“
10.U applikant doen
eerbiediglik aan die hand dat dit in die belang van krediteure van
die respondent sal wees indien die boedel
van die respondent
gesekwestreer word en wel vanweë die volgende rede:
10.1 Verskeie van die krediteure
het reeds kennis gegee dat hulle van voornemens is om dagvaarding uit
te reik aangesien die Respondent
nie in staat is om enige betalings
aan haar krediteure te maak nie in welke geval dit sal ly tot verdere
regsonkostes.
10.2 Daar is ‘n bedrag van
R38 000,00 (AGT EN DERTIG DUISEND RAND) inbetaal by prokureurs Kriek
& Van Wyk, Kerkstraat
17, Parys en sal u applikant toesien dat
hierdie bedrag oorbetaal word aan die voogdyfonds te die Meester van
die Hooggeregshof
Bloemfontein en sal die kwitansie van die Meester
hierby aangeheg word gemerk Bylae “B”.
10.3 Applikant het verneem dat die
respondent oor geen ander bates van watter aard ookal beskik nie en
in geval waarvan die respondent
se boedel gesekwestreer word, kan ‘n
kurator aangestel word ten einde vas te stel wat die werklike posisie
is.
10.4 Die bedrag wat inbetaal is by
die voogdyfonds van die Meester van die Hooggeregshof te Bloemfontein
asook enige ander bates
kan tegelde gemaak word en gelykop tussen die
krediteure verdeel word.”
[
3] From
these bare allegations one can ascertain that the only material asset
the respondent has is a sum of money,
R38 000,00 which
has been deposited into the account of Attorneys Kriek & Van Wyk,
Kerkstraat 17, of Parys, which is to
be paid into the Guardian’s
Fund of the Master of the High Court to cover the administrative
costs of sequestration. Such
costs are estimated to be R20 000,00.
The balance of, R18 000,00, it is alleged, will be
distributed equally amongst
the creditors.
[
4] The
question that arises is whether applicant’s allegations are
sufficient to justify the granting of a provisional order
in this
case. Section 10(c) of the Insolvency Act 24 of 1936 (“the
Insolvency Act&rdquo
;) provides that the Court must in addition be of
the opinion that
prima
facie
there is reason to believe that it will be to the advantage of
creditors of respondent if his or her estate is sequestrated before
a
provisional order can be granted. Self-evidently the onus lies on
the applicant. It is trite that the onus of establishing
the
existence of advantage to creditors remains on the sequestrating
creditor throughout even when it is clear that the debtor
has
committed an act of insolvency. See
Wilkens
v Pieterse
1937 CPD 165. In dealing with this issue in
Paarl
Wine & Brandy Co Ltd v Van As
1955 (3) SA 558 (O) De Villiers J expressed himself as follows at
560:
“
The fact that an act of
insolvency has been committed is in itself not necessarily material
to the question whether sequestration
will be to the advantage of
creditors. While some acts of insolvency, from their nature, tend to
show that sequestration will be
to the advantage of creditors, as,
for instance, where the debtor has given preference and there is
consequently matter for investigation,
other acts of insolvency, such
as a nulla bona return, provide no reinforcement for the contention
that the sequestration will
be to the advantage of creditors.”
[
5] However,
that is not the end of the enquiry. A further and pertinent issue
remains the degree of proof which is necessary to
satisfy the
requirements of the section. This question has been considered in a
number of cases. a discussion of the following
will, to my mind,
prove to be instructive and illuminating:
5.1
In
Meskin
& Co v Friedman
1948 (2) SA 555 (W)
Roper
J
said at 558:
“
Secs. 10
and 12 of the
Insolvency Act, 24 of 1936
, cast upon a petitioning
creditor the onus of showing, not merely that the debtor has
committed an act of insolvency or is insolvent,
but also that there
is 'reason to believe' that sequestration will be to the advantage of
creditors. Under
sec. 10
, which sets out the powers of the Court to
which the petition for sequestration is first presented, it is only
necessary that the
Court shall be of the opinion that prima facie
there is such 'reason to believe'. Under
sec. 12
, which deals with
the position when the rule nisi comes up for confirmation, the Court
may make a final order of sequestration
if it 'is satisfied' that
there is such reason to believe.
The
phrase 'reason to believe', used as it is in both these sections
,
indicates
that it is not necessary, either at the first or at the final
hearing, for the creditor to induce in the mind of the Court
a
positive view that sequestration will be to the financial advantage
of creditors. At the final hearing, though the Court must
be
'satisfied', it is not to be satisfied that sequestration will be to
the advantage of creditors, but only that there is reason
to believe
that it will be so
.”
(My own emphasis).
Later at 559 the learned
Judge said:
“
In my
opinion, 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. It is not necessary to prove that
the insolvent has any
assets. Even if there are none at all, but there are reasons for
thinking that as a result of enquiry under
the Act some may be
revealed or recovered for the benefit of creditors, that is
sufficient...”
5.2
From
the wording of the section it is clear that in applications for
sequestration all that the legislature expects from the petitioner
is
that there is reason to believe that it will be so. In my view if
that is all that is required of a creditor to prove, it shows
that
the proof is less than in instances referred to under
section 12
of
the
Insolvency Act. In
Hillhouse
v Stott; Freban Investments (Pty) Ltd v Itzkin; Botha v Botha
1990 (4) SA 580
(W)
Leveson
J
states at 585 that:
“
...
the
expression 'reason to believe' means 'good reason to believe'. The
belief itself must be rational or reasonable and, in my opinion,
to
come to such a belief, the Court must be furnished with sufficient
facts to support it. Cf London Estates (Pty) Ltd v Nair
1957 (3) SA
591
(D) at 592 - 3; United Democratic Front and Another v Acting
Chief Magistrate, Johannesburg
1987 (1) SA 413
(W) at 421; Minister
of Law and Order and Others v Hurley and Another 1986 (3) SA 568
(A).”
[
6] In
this case the vital averment is that the loan of R1 500,00 was made.
The allegations I have quoted above in paragraph [1]
were ostensibly
made to satisfy
section 9(1)
of the
Insolvency Act and
to save the
debtor from harassment from her creditors. There are no full details
of the loan regarding, when and where it arose,
what circumstances
rendered it necessary for the debtor to be borrowing money from the
creditor; the terms of payment or repayment
as the case may be.
Furthermore, it is not indicated whether it was in cash or with a
cheque manifesting the payment by the creditor
to the debtor. No
receipt for proof of payment is attached, just the bald statement.
For instance, assuming the transaction was
one for sale, one would
have expected that invoices or some sort of proof could have been
furnished. The allegation that some
creditors have indicated an
intention to sue the respondent are unsubstantiated and without
basis. No letter of demand to prove
these threats was attached. Nor
were any summons attached. To compound the problem, there is no
clear indication that the other
listed creditors will benefit and how
except that they will each receive at least 10c from the
R18 000,00. As
far as I could determine that dividend will not
even be 10c but 9,2c which is very negligible to count as a real
benefit to the
creditors taken as a single entity. The respondent is
fully employed by the South African Police Services. Yet there is no
indication
of any contribution from her salary to augment the money
available for the benefit of the creditors. The applicant has not
even
indicated whether he attempted to get his money back in any
other form including approaching the small claims court. It is a
well-known
fact that the small claim court provides a very cheap
process especially for indigent litigants compared to this route. I
mention
just a few of these issues to indicate the paucity of facts
in the papers in this matter which is a peculiar feature of “
friendly
sequestrations
”.
See
Esterhuisen
v Swanepoel and Sixteen Other Cases
2004 (4) SA 89
(W) for an exposition of characteristics of friendly
sequestrations.
[7] In
my view, the present application qualifies as a “
friendly
sequestration
”
for the reasons enumerated above. This enjoins this Court on
authority of what was said by
Nicholas
J
in
Klemrock
(Pty) Ltd v De Klerk and Another
1973 (3) SA 925
(W), to scrutinise the application with particular
care so as to protect the interests of the creditors. The Courts
should not
encourage, condone or countenance collusion between a
creditor and debtor the sole object of which
“
... will be to give the
debtor relief against his creditors.”
See
Wepener
v Ericson
1926 WLD 81.
[
8] On
these facts I am not satisfied that it will be to the advantage of
creditors even were they to receive payment of at least
9.2c or 10c
in the rand, should the respondent’s estate be sequestrated. In
fact there is no other evidence that it will
be to the advantage of
creditors to have the respondent’s estate sequestrated. To my
mind the
nulla
bona
return herein does not change the situation at all. In fact, the
facts of this case suggest that this application is contrived
to
circumvent the ordinary legal mechanisms made available by the law
for debt collection. Such serious chicanery should be decried
or
deprecated with clear and strong terms.
[9] In
the circumstances I make the following order:
Order:
Application for a
provisional order of sequestration is dismissed.
______________
_
B.C. MOCUMIE, J
On
behalf of applicant: Adv. J. Zietsman
Instructed
by:
Naudes
BLOEMFONTEIN