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[2008] ZAWCHC 67
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Hilne v Hilne (10097/2008) [2008] ZAWCHC 67 (27 November 2008)
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE
PROVINCIAL DIVISION)
Case
No: 10097
/2008
In the matter between:
KIM
THERESA KATHLEEN HILNE
APPLICANT
and
PETER
JOHN HILNE RESPONDENT
JUDGMENT
DELIVERED ON : 27 NOVEMBER 2008
ALLIE, J
This
application for provisional sequestration was first brought on
15 July 2008. It was postponed to 22 July 2008
and when
it became opposed it was postponed to 17 November 2008.
Applicant
is the former spouse of respondent. The receiver is an accountant
Mr A. S. Pocock appointed by the parties in their
Consent Paper that
was made an order of court on 22 August 2005.
On
30 January 2007, Traverso AJP made an order
inter
alia,
referring disputes concerning the valuation of assets and acceptance
of liabilities in the receiver’s interim account to
oral
evidence.
On
7 March 2008 the court directed Mr Pocock to allow certain
liabilities, disallow others and place a value on certain immovable
properties. The order also provided that should the parties fail to
pay in accordance with the final account drafted by the
receiver,
the latter could enforce payment in accordance with the terms of the
Consent Paper.
The
right granted to the receiver to effect a redistribution of assets
in terms of the Consent Paper includes inter alia, the
following:
The right
5.1 to
realise any asset in South Africa or elsewhere by public auction,
private treaty or to make a distribution
5.2 to
reduce to cash any portion of a party’s entitlement
5.3 to
sign all documents and take all steps necessary to effect the above
5.4 to
apply to court for further directions
5.5 to
demand payment over and above delivery of any asset.
Clearly
the receiver has the right to enforce a redistribution in accordance
with his final account by taking all the necessary
legal steps
including issuing out a Warrant of Execution.
The
receiver’s authority to enforce a redistribution does not
however oust either party’s right to do so in their
own names
as their respective obligations in terms of the consent paper are
binding on them.
It
is equally open to the applicant to apply for the execution of a
warrant to enforce a judgment compelling either party to give
the
other an amount to be determined by the receiver.
In
applying for a warrant of execution, the applicant in her affidavit
accompanying the writ, relied upon the judgment of 7 March
2008 read
together with the Divorce Order incorporating the Consent Paper.
In
that affidavit, the applicant incorrectly informed the Registrar
that the written notice of the receiver demanding payment
of the
account had the effect of a judgment. Mr Robertson, on behalf of
applicant, correctly conceded that it did not have the
effect of a
judgment.
On
behalf of respondent, it was argued that the Divorce Order and the
order of 7 March 2008, in so far as they relate to the parties
obligation to give effect to a redistribution of their assets, are
orders
ad
factum praestandum
and not orders
ad
pecuniam solvendam.
Following
on that argument, Mr Spamer, for respondent, alleged that the
applicant did not have the type of judgment in her favour
upon which
a warrant of execution could be based in accordance with Rule 45(1)
of the Uniform Rules of this court. A further
basis of respondent’s
attack upon the validity of the writ is the allegation that it
should contain a full description
of the judgment. The writ’s
validity was also challenged because it was alleged that it should
be issued on behalf of the
receiver and it contains an amount in
excess of what applicant is entitled to. The applicant applied for
payment of the full
amount stated in the receiver’s account
which was made up of her entitlement, the fees and disbursement of
the receiver
and of a firm of attorneys and a payment to be made to
respondent’s first wife.
The Validity of the
Warrant of Execution
In
the case of
Du
Preez v Du Preez 1977(2) SA 400 (C) at 403 G,
the court referred to the case of
Perelson
v Druain
1910 TPD 458
with approval where that court found that a writ is not invalid
merely by virtue of it having been issued for an amount in excess
of
that for which it ought to have been issued. It will remain valid
provided it is competent in respect of a portion of the
amount
stated thereon.
In
the case of
Lurlev
(Pty) Ltd v Unifreight General Services (Pty) Ltd
1978(1)
SA 74 (D) at 79 A
it was said a judgment is a command to the party at whom it is
aimed, together with a warrant to the Sheriff to enforce the command
in certain instances.
In
the case of
Butchart
v Butchart 1996(2) SA 581 (W)
a full bench held that a writ could be issued to recover medical and
related expenses based on an order of divorce that compelled
payment
of medical expenses without determining a specific amount. The
court in Butchart cited with approval, the case of
Bennett
v Bennett’s executrix 1959(1) SA 876 (C)
where De Villiers AJ said that:
“…
there
seems to be no reason in practice or principle why a writ cannot be
issued upon submission by the lessor of an affidavit giving
particulars of the amount for which the lessee is in terms of the
judgment liable.”
The
court in Butchart’s case went on to state that in that
specific case the danger of the respondent not knowing that the
amount was due and owing was avoided by the provision in the
judgment of a demand first being made. In
Du
Preez v Du Preez 1977(2) SA 400 (C)
it was said that a conditional judgment is not necessarily
incompetent as a basis for a writ of execution.
Similarly in the present
case, the order of divorce contains a provision that the receiver
should first demand that a redistribution
be effected in accordance
with his final account, which he did. The respondent therefore had
sufficient prior notice that the
amount was due and owing.
Both the order of
divorce and the order of 7 March 2008 command that the final account
rendered by the receiver concerning the
division of the estate
should be given effect to by the parties.
In
the unreported case of
Block
v Block at 46
which
was referred to by Wepener A.J, in Butchart’s case it was held
as follows:
“
Must
the judgment creditor approach the court from time to time for an
order quantifying the medical expenses reasonably incurred
before a
valid writ can be issued. Having regard to the fact that the
judgment debtor’s liability for medical expenses reasonably
incurred has already been established in principle by the judgment of
the court that suggestion is impractical, not
least
on ground of unnecessary expense.”
By
analogy, in the present case the liability of the party who has to
pay a sum determined by the receiver has already been determined,
a
further court order commanding payment of the sum subsequently
determined would be tautologous and cause an undue escalation
in
cost.
The
attitude of the respondent towards the final account of the
receiver, which also included a paragraph demanding payment, is
best
described by the respondent himself in his founding affidavit to the
application he brought to have the writ set aside.
It reads as
follows:
“
In
this time I was also confronted with my preparations for a
long-planned visit to Europe and the United Kingdom which was set
to
run from the middle of April 2008 to 8 June 2008. I decided not to
make any payments to the second respondent until I obtained
finalisation of the legal position which I trusted would be clarified
by my return.”
There
is no doubt that the respondent chose to ignore at least two court
orders commanding him to pay or redistribute in accordance
with the
final account of the receiver. He has to date also not challenged
the validity of the provisions of the Consent Paper
for which he
sought to have the “legal position clarified.”
The unequivocal
nature of the Nulla Bona Return
The
nulla
bona
return relied upon by the applicant reads as follows:
I
served the writ attached hereto upon the first respondent
personally at 9 Quinan Road, Somerset West on 18 June 2008 by
showing him the original and handing a copy to him and
simultaneously explaining the nature and effect to first respondent
and claiming payment of the amount in the abovementioned writ.
The
first respondent answered that he has no money or movable or
alienable and disposable assets to satisfy this writ or a portion
thereof, and I could not find any movable or alienable assets or
money belonging to the first respondent which I could attach
in
order to satisfy this writ or a portion thereof.
First
respondent owns Erf 4301 in Somerset West.
Thus
is my Return one of nulla bona.
In
the case of
Kader
v Haliman 1958(4) SA 31 (NPD), at 32 G-H
the court outlined what a
nulla
bona
return should contain:
In
my view generally speaking a messenger's return to a warrant which is
unsatisfied and in respect of which no attachment has been
possible
(commonly called a nulla bona return) should state, inter alia,
(a) that
he explained the nature and exigency of the warrant, and the person
to whom he explained it;
(b) that
he demanded payment;
(c) that
the defendant failed to satisfy the judgment;
(d) that
the defendant failed, upon being asked to do so, to indicate
disposable property sufficient to satisfy it. (The expression
'disposable property' is preferable to the word 'goods', for the
former include immovable property. Per BROOME, J. (as he then
was),
in Horace Sudar & Co. (Pty.) Ltd v Cassja & Co. and Others,
1950 (1) SA 203
(N) at p. 206);
(e) that
the messenger has not found sufficient disposable property to satisfy
the judgment, despite diligent search and enquiry
.
In
that case, the court further concluded that
prima
facie
it appears that the debtor upon demand by the messenger failed to
satisfy the judgment or to indicate sufficient disposable property
to satisfy it.
In
casu,
the respondent clearly pointed out no disposable property with which
to satisfy the judgment, save for Erf 4301 Somerset West.
In
applicant’s founding affidavit she alleged that the respondent
transferred the said erf from his name into the name
of D Jeffs on
10 December 2007.
In
his opposing affidavit, the respondent admits the transfer although
he goes on to allege that he sold the property to D Jeffs
on 21 July
2003. The alleged date of sale was before the order of divorce was
granted. In the Consent Paper that was incorporated
into the order
of divorce, mention is made of the Somerset West property as one of
the properties that if disposed of, the receiver
may take steps to
set the aside. If the property was indeed sold prior to the order
of divorce, the question that remains unanswered
is why it was
mentioned as a property whose disposition may be set aside. It is
precisely allegations such as this one, which
calls into question
the truthfulness of respondent’s averments concerning this
property. I accordingly conclude just as
Holmes J did in the case
of Kader v Haliman, that the facts stated by the sheriff in the
nulla
bona
return are
prima
facie
proof of what the respondent indicated to the sheriff. The
respondent was accordingly dishonest in stating that he owns Erf
4301 Somerset West at a time when he knew that it had been
transferred off his name. In his papers, he does not indicate that
the property was subsequently transferred back to him. This is
however a possibility that his counsel asked me to consider.
In
effect and in substance the return is one of
nulla
bona
in a much as, the respondent pointed out one immovable property that
did not belong to him.
[27]
Section
8(b)
of the
Insolvency Act 24 of 1936
reads as follows:
“A
debtor commits an act of insolvency
…
.
If
a court has given judgment against him and he
fails
,
upon 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 sufficient disposable property to satisfy the judgment.
(my
emphasis)
[28] It
clearly appears from the return that the respondent has failed to
indicate sufficient disposable property to satisfy the
judgment.
Indicating immovable property that does not belong to him, does not
change the
nulla
bona
nature of the return. There was accordingly no need for the sheriff
to value the immovable property. I am therefore satisfied
that the
applicant has shown that the respondent committed an act of
insolvency as contemplated by
Section 8(b).
Alleged Factual
Solvency
[29] On
behalf of respondent, Mr Spamer contended that it is common cause
that the respondent is factually solvent and it would
be contrary to
public policy and to the intention of the legislature to allow a
sequestration where there was factual solvency.
[30] In
the case of
Estate
Logie v Priest
1926 AD 312
at 321 Solomon J.A. held as follows concerning the motive for an
application for sequestration:
“
However
wealthy a debtor may be, if he has committed an act of insolvency, a
creditor is entitled to sequestrate his estate ……..
Where an act of insolvency has been committed nothing more is
required and it is immaterial what the means of the debtor may be.”
[31] It
has been accepted by the courts that a creditor may use any legal
means at his/her disposal to enforce payment of the debt,
including
sequestration proceedings which are often used as a means to compel
payment by a recalcitrant debtor.
[32] It
is not clear from the papers whether the respondent’s estate is
at present solvent. In the founding affidavit, the
applicant
mentions a disposition of immovable property which a Trustee, in due
course, may wish to set aside. The account of the
receiver reflects
the value of the estate of the respondent as at the date of the
divorce, that being 22 August 2005. At that
date, the respondent’s
estate appeared to be solvent. The applicant does not however rely
on factual insolvency.
Advantage to
Creditors
[33] I
turn now to whether there is reason to believe that a sequestration
will be to the advantage of creditors.
[34] The
applicant is clearly not the only creditor entitled to payment in
accordance with the final account of the receiver who
the respondent
has to date failed to pay. The receiver himself has not received
payment of his fees and disbursements in the sum
of R119 888 nor
has attorneys Buchanan Boyes received payment of their account of
R19 655. I am accordingly persuaded
by applicant’s
allegation in her founding paper that there is reason to believe that
it will be to the advantage of creditors
if the disposal of the
assets of the respondent are regulated by a trustee to ensure payment
to creditors. It is necessary to regulate
the disposal of assets and
the payment of creditors as at least one immovable property in South
Africa has already been disposed
of without the consent of the
receiver.
[35] In
the circumstances, I grant an order of provisional sequestration.
Respondent shall pay the costs including the cost of
the hearing on
22 July 2008.
It is ordered that:
The
estate of the respondent is placed under provisional sequestration
in the hands of the Master of the High Court.
The
respondent shall show cause, if any at 10h00 on Tuesday, 13 January
2009
December 2008 or as soon
thereafter as the matter can be heard why the above Honourable Court
should not order the final sequestration
of the respondent’s
estate.
The
Sheriff of this court shall effect service on the respondent of
this order or service shall be effected in such other manner
as the
parties may agree.
A
copy of this order shall be served by registered post on all known
creditors with a claim in excess of R5 000.
A
copy of this order shall be served on South African Revenue
Service, Cape Town.
The
cost of this application including the cost of the appearance on 22
July 2008 shall be paid from the estate of the respondent.
ALLIE, J