SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
FREE STATE DIVISION, BLOEMFONTEIN
Reportable: NO
Of interest to other Judges: YES
Circulate to Magistrates: NO
Case no: 5983/2024
In the ex parte application of :
TIAAN VAN NIEKERK Applicant
Identity number: 86[…] (Unmarried)
For the voluntary surrender of his estate
AND
Case no: 28/2025
In the ex parte application of:
PETER CARL DU PLESSIS 1st Applicant
Identity number: 53[…]
And
SOPHIA MAIRA MAGDALENA DU PLESSIS 2
nd Applicant
Identity number: 58[…]
(Married in community of property )
For the voluntary surrender of their estate
Coram: JP DAFFUE J
Heard: 20 FEBRUARY 202 5
Reasons delivered: 27 FEBRUARY 2025
These reasons w ere handed down electronically by circulation to the parties’
representatives by email and release to SAFLII. The date and time for hand- down is
deemed to be 16 H00 on 27 FEBRUARY 2025.
2
REASONS
DAFFUE J
Introduction
[1] Two applications for voluntary surrender of the respective applicants’ estates
in accordance with s 4 of the Insolvency Act 24 of 1936 (the Insolvency Act) came
before me in the unopposed motion court of 20 February 2025. I dismissed both applications and stated that my reasons would follow in due course. These are my
reasons.
[2] Insofar as I have dealt with several similar applications over the years, I shall
in the course of this judgment refer to some of my judgments as well as those of eminent judges of various divisions of the High Court in this country. Let me by way of introduction refer to the following observations made by the authors of Mars:
1
‘The requirement that all information presented to the court in an application for surrender
must be accurate and that valuations must be exact, arises from the courts’ insistence that a
debtor who is pressed by his creditors does not over -estimate the value of his estate in order
to obtain relief from his financial burdens.
The administration of insolvent estates has over the years developed into a very lucrative
and therefore very competitive profession. The pressure has therefore increased to identify debtors whose sequestration or liquidation may render a lucrative return to lawyers, trustees,
liquidators, valuators and auctioneers. Advertisements in the media canvassing debtors who
are desirous of ridding themselves of their financial burdens have become commonplace.
This has increased the risks for debtors and creditors alike. …
On the other hand, insolvency practitioners are tempted to present a rosy picture of the
debtor’s affairs that bears little semblance to reality, resulting in an estate being declared
insolvent that renders little or no dividend for creditors once the fees of the various
participants in voluntary surrender proceedings have b een deducted and the administration
costs have been paid.’
The parties
1 Bertelsmann et al, Mars: The Law of Insolvency in South Africa, 9th ed p 63.
3
[3] The applicant in application number 5983/2024 is Mr Tiaan Van Niekerk an
unmarried male person residing at Vrede in the North Eastern Free State. He is a
general worker who will be 29 years old in a few days from now.
[4] The applicants in application number 28/2025 are Mr Peter Carl du Plessis
and his wife with whom he is married in community of property , Mrs Sophia Maria
Magdalena du Plessis . They are an elderly couple. Mr Du Plessis is 72 years and his
wife 66 years old. Both of them are still employed and both are managers in the respective companies by whom they are employed. They reside in Frankfort in the Northern Free State.
Similarity in the two applications
[5] Mr Dav id Johann Schoonraad, an attorney prac tising under the name and
style of Schoonraad Attorneys in Arcadia, Pretoria, is the applicants’ attorney of
record. His correspondent in Bloemfontein is Kleingeld Attorneys . The same counsel
appeared before me in both applications. He is relatively new in Bloemfontein,
having completed his pupillage at the local bar in 2024. He was not involved in any of the earlier applications to which I shall refer .
[6] Ms Adele Reyneke, a financial advis or of Senator Counsellors (Pty) Ltd
(Senator) of Centurion, was requested to consider the applicants ’ financial problems.
She found in both instances that there was no evidence that any of the applicants’
creditors provided reckless credit . Her affidavit in both applications read about the
same. She stated in paragraph 3 that all the facts as stated in paragraph 11 of the
applicants’ founding affidavit s, with specific reference t o the applicants’ debt review ,
was unsuccessful as they could not afford the required minimum monthly
instalments . I mention already at this stage that it is obvious ly apparent that the
applicants did not apply to the Magistrate’s Court for appropriate orders in terms of s 87 of the National Credit Act 34 of 2005 (NCA).
[7] The valuator in both applications is Mr Franco Maartens from Worth Authority
in Centurion. I n both instances a Mr Albertus Wilhelm Labuschagne was the
commissioner of oaths . For an unknown reason the affidavits were commissioned in
Bloemfontei n. I shall revert to this strange phenomenon.
4
[8] It is noted that the valuator who had to travel all the way from Centurion to
Frankfort and Vrede respect ively did not provide a statement of account in respect of
his fees and travelling expenses. It is possible that these were paid up front, but in
such a case I would have expected the applicant s to come clean and inform us how
they managed to settle this debt. I find it improbable that a valuator from Centurion
would drive to Bloemfontein for his affidavits to be commissioned here relating to
valuations undertaken in respect of properties in Frankfort and Vrede. Both these
towns are more than 300 km away from Bloemfontein.
[9] There is no indication that the valuator has tested any of the household
appliances to establish whether they were in a working condition. Furthermore, we
have not been informed how old these items are. As strange as it may sound, in both cases the applicants are in possession of a four -piece leather lounge suite. It is not
stated whether the material thereof is genuine or synthetic leather. No photos have been taken of the more expensive items such as the lounge suites . Valuators often
decrease their valuations with 30% in order to obtain the forced sale value of
immovable properties . In casu, the applicants preferred to rely on the market
valuations although t he valuator provided for about a 10% percentage deduction to
arrive at forced sale values.
[10] Mr Schoonraad filed supporting affidavit s. These read word for word the
same. In paragraph 4 he stated the following:
‘I further submit that the dividend calculation explained in the Applicant’s Founding Affidavit
was done strictly in accordance with the prescriptions and provisions of the Insolvency Act,
Act 24 of 1936.’
According to his calculations the trustee is entitled to R2 850 remuneration in both
cases as is apparent from the founding affidavits. This is the very same amount
relied upon in the application to which I shall refer hereunder.
[11] The attorney regards himself as an expert in insolvency matters. I shall refer
later herein to his involvement in similar matters more than a decade ago. He
incorrectly calculated the trustee’s remuneration. He either cannot do maths, or is
5
totally unaware of the tariff applicable to trustee’s remuneration ,2 or he deliberately
elected to present the court with false facts. I do not have to adjudicate this vexed
question. Allow me to put facts on the table. In the Van Niekerk application the trustee’s fee will be R7 113 if the properties are sold at the valuation relied upon.
10% of R50 650 is R5 065. If 15% VAT in the amount of R760 is added, the total fee
is R6 825. 1% on the cash found in the estate – R25 000 deposited in the Guardian
Fund – is R250 . If 15% VAT is added, the total is R288. The total fee in this case
should therefore be R6 825 plus R288 which equals R7 113. The calculation in the
Du Pless is application is as follows: 10% of R65 600 is R6 560. If 1 5% VAT in the
amount of R984 is added, the total fee should be R7 544. There is no explanation
why the attorney arrived at a figure of R2 850 in both instances. Furthermore, the
attorney should have known that the trustee would probably sell the assets on public auction in which case the auctioneers are entitled to 6% of the proceeds plus VAT.
He also failed to consider the Master’s fees . No provision is made for advertisement
costs which nowadays are enormous.
[12] The fees of the two sets of attorneys are calculated at R14 000 plus VAT for
the Pretoria attorney and R8 000 plus VAT for the Bloemfontein attorney. These fees
are ridiculously low. I dealt with legal costs in voluntary surrender applications more
than a decade ago in ex parte Snooke.
3 Since then the fees to which legal
practitioners are entitled have be en increased considerably.
[13] There is no doubt that the person who drafted the documents made use of a
copy and past e process . There is not hing wrong to make use of precedents in
drafting documents. However, the similarity in these applications and also found by
me and other judges in earlier judgments refer red to herein is much more than a
mere coincidence.
Similarity between these applications and an earlier application
[14] On 25 July 2024 application number 3065/2024 for voluntary surrender
served before me in the unopposed motion court. The applicant was one Ms Lizelle
Mare , a female person married out of community of property . The legal practitioner
appearing for the applicant request ed a postponement as the Master’s report was
2 Tariff B of the second schedule of the Insolvency Act 24 of 1936, read with s 63 thereof.
3 2014 (5) SA 426 (FB) paras 17 -23; see also ex parte Cloete 2013 JDR 0854 (FB) a judgment delivered on 5
April 2013 para 22.
6
outstanding. I was prepared to postpone the application to 22 August 2024, but
ordered the applicant to supplement her founding affidavit in the following respects:
‘1. …
2. Leave is granted to the applicant to file a supplementary affidavit dealing with all of
the following:
2.1 several of the applicant’s movable properties fall within the category of properties
usually returned to an insolvent in accordance with section 82(6) of the Insolvency Act 24 of
1936 and the applicant shall provide reasons why the value of all such household properties
should be taken into consideration in determining a possible dividend;
2.2 nowhere is there any mention of the fees and travelling expenses of the valuator and
the applicant shall explain with proof of his account why these expenses are not set out as
part of the disbursements;
2.3 the valuator’s valuation is meaningless insofar as the items valued have not been
identified by make, model, age, purchase price and/or whether these items are still under warranty;
2.4 the lounge suite valued at R20 010 is not properly identified with reference to
paragraph 2.3 above, but more particularly, there is no indication as to the number of pieces
thereof, whether it is a genui ne leather suite, and if not, the kind of material thereof should
be provided;
2.5 it is expected that photographs be provided of the lounge suite in particular, but also
of the most expensive items valued in excess of R 2 000;
2.6 what is meant in annexure IV of the statement of affairs with reference to the alleged
prescription of the claim of the Receiver of Revenue and is it the applicant’s case that no amount is due and payable to the Receiver of Revenue;
2.7 the statement by H Smit is not commissioned and in any event, this person shall
explain in detail why the debt review application was dismissed in terms of section 86 of the National Credit Act 34 of 2005 (NCA) as it is apparent from paragraph 13 of the founding
affidavit that at least R 5 000 per month would be available to distribute amongst creditors;
2.8 the applicant shall explain whether, when and to which court she applied for relief in
terms of section 86 of the NCA;
2.9 the affidavit of attorney Schoonraad is confusing and he should confirm whether he
and his correspondent will insist on their taxed fees and expenses and not the minimal
amounts of R 14 000 and R 8 000 plus VAT used to calculate a dividend, whilst it should be
common cause that the taxed accounts of two sets of attorneys will be much higher than estimated which will have a detrimental effect on the dividend;
7
2.10 why was it necessary to make use of a Gauteng attorney, valuator and debt
counsellor when the applicant is resident in Bloemfontein;
2.11 it is expected that the applicant shall state what her husband earns and what he
contributes to the household expenses.
3. This supplementary affidavit and any annexures thereto shall be served on the
Master to enable him/her to file a supplementary report.’
[15] In preparing these reasons I requested the court file in the aforesaid
application. It appeared from the file that the applicant’s attorney filed a notice to
remove the matter from the roll on 6 August 2024 as the applicant wanted to ‘re-
asses her financial position ’. That application has not been enrolled again. The
documentation in that application is , save for the personal information which
obviously differs, a carbon- copy of the two applications that served before me on 20
February 2025. Mr David Johann Schoonraad is again the Pretoria a ttorney who
made use of the same correspondent in Bloemfontein . Mr Franco Maartens also did
the valuation in that case. Senator was al so involved. A certain Ms Herma Smit, a
financial advisor at this company, signed a document which was not even commissioned before a commissioner of oaths. She made the exact same
allegations which were subsequently made by Ms Reyneke in the matters now before me.
[16] As in the present two applications, the trustee’s fees were calculated to be
R2 875.00, the Pretoria attorney’s fees to be R14 000.00 plus VAT and the
Bloemfontein correspondent’s fees to be R8 000 plus VAT.
[17] The dividend in the Mare application was calculated to be 20.10 cent in the
rand. As strange as it may sound, the dividend in the Du Plessis applicat ion was
calculated to be 20.49 cent in the rand and in the Van Niekerk application a little bit
more , to wit 21.78 cent in the rand. If my memory serves me correct, the Pretoria
High Court insists on d ividends of at least 20 cent in the rand in order to prove a
benefit to creditors.
Evaluation of the applications
[18] The applicants had to satisf y the court that the acceptance of the surrender of
their estates would be to the advantage of their creditors . In these instances where
8
the over-indebtedness is about exclusively relat ed to debt arising from credit
agreements, the applicants should have properly utilised the NCA processes which
provide a wide range of remedial relief . Section 87 of the NCA reads as follows:
‘(1) If a debt counsellor makes a proposal to the Magistrate's Court in terms of section 86
(8) (b), or a consumer applies to the Magistrate's Court in terms of section 86 (9), the
Magistrate's Court must conduct a hearing and, having regard to the proposal and
information before it and the consumer's financial means, prospects and obligations, may -
(a) reject the recommendation or application as the case may be; or
(b) make -
(i) an order declaring any credit agreement to be reckless, and an order contemplated in
section 83 (2) or (3), if the Magistrate's Court concludes that the agreement is reckless;
(ii) an order re -arranging the consumer's obligations in any manner contemplated in section
86 (7) (c) (ii); or
(iii) both orders contemplated in subparagraph (i) and (ii).
(2) The National Credit Regulator may not intervene before the Magistrate's Court in a
matter referred to it in terms of this section.
’
[19] Although I am prepared to accept that no reckless credit was extended as
stated by the financial advis or, the applicants ’ resistance to seek relief provided by
the NCA is frowned upon. I shall show in the next paragraph that the applicants in both applications have a sufficient nett income (if their contractual obligations
towards creditors are deducted) to be utilised in order to settle their debts in
affordable instalments . In my view the applicants have been advised by their
attorney to choose relief in terms of the Insolvency Act to their convenience and in
doing so by mechanically and superficially satisfying the relevant statutory requirements under the Insolvenc y Act. This is a misdirected approach, especially
where the grant of th e selected remedy is discretionary as pointed out many years
ago by Binns -Ward AJ in Ex parte Ford and Two Similar Cases .
4
[20] On his version under oath, Mr Van Niekerk has in excess of R4 500 per
month available to be paid in instalments to his only creditor , the FNB. I accept that
4 2009 (3) SA 376 (WCC) para 19.
9
this amount is much less than his contractual instalments, but no reasons have been
provided why relief was not sought in terms of s 87 of the NCA. The Du Plessis
couple has about R10 000 per month available whilst their contractual instalments
are R17 200. The same applies in their case although they are in a better position
than Mr Van Niekerk to settle their debts .
[21] In the case of Van Niekerk, the only creditor ex facie the statement of affairs is
First National Bank who has lent money to the debtor in respect of several accounts. The statutory notice was apparently sent to FNB via a postal address in Johannesburg. There is no indication that the notices provided for the various account numbers to enable the recipient to allocate the letters to the correct division. [22] In the Du Plessis’ application no proof has been filed that the statement of
affairs lay open for inspection for a period of 14 days in the Magistrate’s office in Vrede and that no objections had been lodged. It is indicated in the Master’s report that the Master received a certificate from the Magistrate relating to the estate late
SMM du Plessis. Obviously, such a certificate is hopelessly wrong and even if it was filed with the court, it would have been rejected. While dealing with the Master’s
report in Du Plessis, reference is made by the Master to the fact that in calculating
the dividend, the Master’s fee of R1 000 as well as the auctioneer’s fees had not been taken into consideration. In the case of Van Niekerk the Master did not make a similar comment which should have been made. I also find it strange that the Master did not notice that the trustee’s remuneration was calculated incorrectly as mentioned above.
[23] I stated as long ago as 2013 in Ex parte Cloete
5 that it is not acceptable that
debtors utilise the expensive machinery of the Insolvency Act to get rid of creditors to the disadvantage of creditors . Insolvency must always be the last resort. In cases
such as the present matters, where we are confronted with small estates, the starting
point should be to embrace the protection of the N CA if the claim s fall within its
ambit . We have seen over the years that debtors are not prepared to continue
paying of f their debts , but rather to get a quick fix to get rid of their debts, either by
way of friendly sequestrations, or the surrender of their estates. In Ex parte Loraine
5 2013 JDR 0854 (FB) a judgment delivered on 5 April 2013, at para 24.
10
Jordaan and three other similar applications6 I discussed in detail the statutory
requirements for voluntary surrender, the abuse of the process by some legal
practitioners and applicants , as well as the similarities in the four applications that
served before me at the time. As in that case, it is debatable whether it is a
coincidence that the concurrent dividend payable to creditors is calculated at about
20 cent in the rand.7 Already then, the law firm, Schoonraad Attorneys , was one of
the role players insofar as the valuator instructed at the time ‘ received written
instructions from Schoonraad Attorneys to estimate the market value in each case.’ I
stated further:
‘There is no indication how Schoonraad Attorneys f it in the picture and it appears as if a third
set of attorneys are involved. This is the case in all the applications, save the Esterhuizen
application , where no valuation was placed before the court.’8
[24] In Ex parte Concato and Similar Cases9 Bozalek J was seized with five similar
voluntary surrender applications . The learned judge concluded as follows:
‘A conclusion of lack of bona fides was also informed by shortcomings in the applications as
a whole, including inter alia their superficiality, the similarity in the averments made and the uncanny coincidence of the projected dividend being either 16 or 17 cents in the rand. There
were also lacunae evident in the particular applications under consideration that led to the
conclusion that the applicants had either not made full and proper disclosure of their affairs, or had not employed, or properly utilised, alternative statutory measures to reach an accommodation with their creditors.’
[25] It is also appropriate to again refer to Ex parte Snooke.10 The judgment dealt
with an application for rehabilitation, but I discussed the legal fees and the
advantage of creditors in some detail . I inter alia mentioned the following:
‘Bertelsmann et al Mars: The Law of Insolvency in South Africa 9 ed at 64 are of the view
that there is a lacuna in our present legislation that no provision is made for judicial oversight
of the actual results of the liquidation process. Judges are not informed whether the dividend
6 Unreported judgment in the Free State High Court delivered on 27 March 2014 under case numbers 386/2014,
266/2014, 268/2014 & 633/2014; see also Botha v Botha (4457/2016) [2016] ZAFSHC 194 (17 November
2016) para 11; Eksteen v Van der Merwe (2710/2018) [2018] ZAFSHC 131 (2 August 2018) .
7 Ibid paras 17.4.
8 Ibid para 17.3.
9 2016 (3) SA 549 (WCC) paras 67 & 69.
10 2014 (5) SA 426 (FB) para 25.
11
that was held up to creditors in the application was in fact realised. I decided some time ago,
when having to consider rehabilitation applications, to arrange for perusal of the applicable
applications for voluntary surrender or sequestration to obtain personal knowledge of the
allegations made under oath, and have no hesitation to state that the averments under oath
in so-called friendly sequestration and voluntary surrender applications in order to prove
advantage to creditors are far from the truth in many instances. My own experience, that
sequestration in the majority of cases eventually turns out not to be to the advantage of
creditors, is no surprise at all. This much is apparent from a survey conducted more than
three decades earlier. See South African Law Commission Review of the Law of Insolvency:
Prerequisites for and Alternatives to Sequestration Working Paper 29 Project 63 (1989);
and Hillhouse v Stott; Freban Inv (Pty) Ltd v Itzkin; Botha v Botha 1990 (4) SA 580 (W) .
Information obtained from the Pretoria office of the master revealed that concurrent creditors
received dividends in only 28,6% of the cases included in the survey, while creditors were
liable to pay contributions in 40,6% of the cases. There is no reason to believe that the
position in the Free State is remarkably different.’
[26] The factual inaccuracies in the affidavits before the court , whether intentional
or negligent , prove the point raised by me many years ago that the Master should
consider the advantage of creditors in each and every application for voluntary
surrender and to report to the court on this issue. The Master is for example
empowered to direct the applicant to obtain a valuation ‘by a sworn appraiser or by
any person designated by the Master for the purpose.’11 Too many applications for
voluntary surrender are nothing but an abuse of court process .
[27] The legal practitioners who are involved in these applications benefit directly
from the debtors’ financial predicament. The same applies to the trustees who are
eventually appointed to liquidate the insolvent estates with no hassles or difficult
issues to be considered. The meetings of creditors are a mere formality as creditors more often than not refuse to file any claims. Much more can be said, but hopefully
this judgment will remind all role players of their responsibilities in order to ensure
that justice is done.
[28] I am satisfied that both applications are not bona fide. I have reason to believe
that if these two applications were to succeed, the applicants would be rid of their
debts to the detriment of creditors who would not even try to file claims, bearing in
11 Section 4(4) of the Insolvency Act 24 of 1936.
12
mind the risk of a contribution payable. The Registrar of the court is directed to send
a copy of this judgment to the Master.
DAFFUE J
Appearances
For applicant : Adv AA Verhoef
Instructed by: Schoonraad Attorneys
c/o Kleingeld Attorneys
Bloemfontein