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[2008] ZAWCHC 308
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HP Bock & Isaacs v Peters (14259/2008) [2008] ZAWCHC 308 (1 December 2008)
JUDGMENT
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL
DIVISION)
CASE
NO
:
14259/2008
DATE
:
1
DECEMBER 2008
In
the matter between:
H
P BOCK & ISAACS
Applicant
and
SUSAN
PETERS
Respondent
JUDGMENT
GAUNTLETT,
AJ
:
In
this matter the applicant firm of attorneys seeks a provisional
sequestration order against the respondent, its former client.
The
claim relates to professional services rendered to the respondent in
the sum of R34 247,65.
In
response to the summons which was issued in this matter the
respondent directed a letter to the applicant in which she stated,
without disputing the amount of the claim, that she could not pay it.
She undertook however to pay it off in payments of R400 per
month.
The
founding affidavit refers also to a subsequent fetter which was
received from the University of Steflenbosch Legaf Aid Clinic,
now
representing the respondent, in which it was again stated that she
was not in a financial position to discharge what was referred
to,
without any debate as regards the quantum owing, "die uitstaande
skuld". She thereupon offered again to pay off a
limited sum per
month.
The
applicant proceeded to obtain a warrant for execution. On 18 August
2008 the Sheriff endeavoured to attach assets of the respondent
but
was informed by her that she had no money or assets which were
capable of conversion in any form. No moveable goods or alienable
assets were indeed pointed out to the sheriff or could be found by
him after a search of the residential address of the respondent,
and
consequently he issued a
nulla
bona
return.
The
case for the applicant is accordingly that the letters to which I
have referred constitute acts of insolvency in terms of
section 8(g)
of the
Insolvency Act, 1936
and that furthermore the
nulla
bona return
constitutes
an act of insolvency in terms of
section 8(b).
On
9 September 2008, when this application first proceeded before court,
an order was made by agreement directing that it be heard
today, and
agreeing times for the filing of an opposing affidavit and a replying
affidavit.
Without
explanation for the course embarked upon the respondent instead has
now launched on one court day's notice an application
for the
postponement of the present application, pending the hearing of the
(indistinct) determination of an application in the
Magistrate's
Court, Somerset West to rescind a default judgment taken in relation
to the fees claimed by the applicant. The new
application does not
address this default in any way, it does not properly address the
implicit urgency with which it has been
brought, and entirely fails
to explain the non-compliance with the agreed court order to which i
have referred. Its contention
however is that the default judgment
was obtained "in bad faith as judgment was taken after I had
made arrangements"
for the payment of a certain sum to avoid
further legal action. Furthermore it contends that at no stage has
the bilf of the plaintiff
been taxed, and "I have been
subsequently advised that I am fully entitled to request such
taxation which would then allow
me to query the amount and details of
the amounts charged
11
.
Furthermore there is the declaration of an intention "to repay
all outstanding amounts", and to do this after taxation
upon
which "I tender payment of such amounts".
Counsel
for the applicant has sought a provisional sequestration order, on
the basis that the trite requirements for such an order
have been
made out. He points to the various acts of insolvency, and
furthermore to the failure by the respondent to file any opposing
affidavit, as she had agreed to do, to set out any viable defence to
the matter. Counsel for the respondent however has sought
a
postponement of the application in order for the determination of the
rescission proceedings to take place. The question which
arises in
these circumstances, there being no material answer to the
provisional sequestration application itself, is whether such
a
deferment is to be granted in all the circumstances of the matter.
Counsel
for the respondent relied for his primary ground on the entitlement
of a person in the position of the respondent to require
taxation of
a bill of costs before - and to secure a postponement of
sequestration proceedings pending - taxation. He has pointed
me in
this regard to the analysis by Meskin at 2-3
Law
of Insolvency
,
where this is stated:
"It
is submitted that an attorney may bring sequestration proceedings
against his client based on his claim for attorney and
client costs
without first taxing a bill in respect of such costs: since he may
sue for such costs without taxation [see
Benson
v Walters
1984(1) SA 74(A) at 86]; however it would be open to the debtor to
demand taxation and it is submitted that such demand would inevitably
involve a postponement of the proceedings pending taxation."
He
further referred me to the authority of Mars
r
Law of Insolvency, 83 to 84 and to
Gillant
1954(2) SA 278 (C).
It
seems to me that the principle indicated by Meskin must be clearly
understood. The departure point (as to which Benson v
Walters
is leading authority), is that an attorney (like another professional
person) may indeed bring sequestration proceedings against
his client
on a claim for costs (even attorney and client costs) without first
taxing a bill in respect of such costs. The point
which is
thereafter made is that the debtor however may answer such a claim,
by first demanding taxation and, in appropriate circumstances,
thereupon procuring a postponement of the proceedings pending
taxation.
The
difficulty however in this matter is as follows. First of all, on at
least three occasions the respondent, having had an opportunity
to
place the amount of the claim in some way in issue, has not done so,
and has, indeed, accepted its correctness. There is no
genuine query
anywhere expressed as regards what is
prima
facie
a modest sum in fees. Secondly, and more importantly, any such
application (such as is posited by Meskin) is one which should have
properly been brought in answer to the application for sequestration.
At the very least it should be the subject of an opposing
affidavit
fifed in this application in compliance with the court order. In my
view, the general circumstances of the matter indicate
that the
defence is belated, opportunistic, and not one which is advanced in
good faith. There is, as I have said, no indication
of any genuine
dispute of the amount of the claim; it is apparent from the affidavit
filed in the postponement application that
it is the product of
belated legal advice that such a claim, even at this stage, is an
appropriate basis on which the application
for sequestration may be
deferred.
I
have been invited In this regard by counsel for the respondent to
exercise my discretion in relation to the full circumstances
of the
matter. That seems to be indeed to be apposite. He points to the
tender to pay whatever may be in fact taxed, the reality
however is
that in the unequivocal language that the respondent has chosen for
herself, it is clear that she is unable to make
any sensible and
bona
fide
tender
of the kind which, the belated legal advice, seems to have persuaded
her to make in her latest affidavit. Then there is the
issue of the
house to which I have been referred, A short answer in that regard is
that when the Sheriff attempted to execute in
respect of the default
judgment, he was unable to find any assets and he was not pointed to
any asset by the respondent herself
such as might meet the claim.
More important, too, is that my overall sense of the matter is that
the respondent is not litigating
in good faith, but is contriving a
delay with a view to putting off the consequences of her earlier acts
of insolvency and failure
to make interim payments. In these
circumstances, it seems to me, there is the significant danger that
any asset which may be held
in the form of the house would be
realised by the respondent and might ultimately resuft in the serious
prejudice of the applicant.
As
I have indicated the application for postponement is brought
inexcusably and inexplicably late. It is not brought on a basis
of
urgency, no case is made out for urgency, it is redolent of an
attempt to procure a delay at any cost - meaning, in particular,
at
the cost of the admitted claim held by the applicant.
In
the circumstances the application for postponement is dismissed with
costs and the application for a provision order of sequestration
against the respondent is granted with costs. There will be the usual
order as to service.
GAUNTLETT,
A J