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
(GAUTENG DIVISION, PRETORIA)
Heard on: 17 March 2025
Judgment on: 15 March 2025
CASE NUMBER: 079672/2023
(1) REPORTABLE: YES/NO
(2) OF INTEREST TO OTHER JUDGES: YES/NO
(3) REVISED: NO
DATE: 15 March 2025
SIGNATURE:
In the matter between:
E[...] K[...] Applicant
and
P[...] K[...] Respondent
JUDGMENT
STRIJDOM, J
1. In this matter the Court ordered the provisional sequestration of the
respondent’s estate on 21 October 2024.1
1 Caselines; 0000 -3. Court order
2. The applicant now seeks an order for the final sequestration of the
respondent’s estate. The application is opposed by the respondent.
3. The following issues relevant to the granting of the relief sought are in disute:
3.1 Whether the respondent has committed acts of insolvency;
3.2 Whether there is an advantatge to creditors if the respondent’s estate
is sequestrated.
4. The main contention of the respondent is that no case has been made ou t
that there is an advantage to the creeditors of the respondent, if the
respondent’s estate is sequestrated.
REQUIREMENTS FOR SEQUESTRATION
5. Section 12 of Act 24 of 1936 (The Act) provides that:
“12(1) If at the hearing pursuant to the aforesaid rule nisi the Court is satisfied
that:
(a) The petitioning creditor has established against the debtor a claim such as
is mentioned in sub -section (1) of section 9; and
(b) The debtor has committed an act of insolvency or is insolvent; and
(c) There is reason to believe that it will be to the advantage of creditors of the
debtor if his estate is sequestrated , it may sequestrate the estate of the
debtor.”
6. This application is premised on the fact that the respondent is indebted to the
applicant in the amount of approximate ly R5 439 930,00.
7. The indebtedness arose out of, inter alia, unpaid maintenance payable
towards the applicant and minor childre n in respet of a Court order granted by
this Court on 11 May 2022 under case number 53105/21.
UNDISPUTED FACTS
8. The following facts are admitted, not dealt with by the respondent or merely
noted by him:
8.1 That all the facts contained in the applicamnt’s founding affidavit is true
and correct.2
8.2 A Rule 43 order was granted by this Court on 11 May 2022.3
8.3 A contempt of Court order was sought and granted as a result of the
respondent’s failure to comply with the Rule 43 order.4
8.4 Respondent instituted a Rule 43(6) application which was dismissed
with costs.5
8.5 A second contempt of Court application was filed and the respondent
was again held in contempt of Court on 31 January 2023.6
8.6 Respondent appealed to the SCA and the appeal has subsequently
been dismissed.
8.7 Respondent admitted, in various applications between the applicant
and respondent, that he is completely unable to satisfy all his financial
obligations.7
8.8 Respondent confirmed that he does not own any immovable property
and has very little movable property at his disposal.8
8.9 Respondent admitted that he allegedly only receives a salary of
R50 000,00 per month and that he is unable to satisfy his judgment
debts.9
8.10 Respondent admitted that during the Rule 43(6) proceedings he failed
to provide the Court with and refer to the fact that he had made
payments of R11 912 264,00 (eleven million nine hundred and twelve
thousand two hundred and sixty four Rand) received from the proceeds
of the sale of a property from a company, known as T[...] P[...] [...]
(T[...] [...] ) (the total amount received by T[...] [...] was R13 000 000,00.)
8.11 Respondent further admitted that, despite the order of 11 May 2022, he
preferred to pay various creditors the amounts as disclosed by him in
his replying affidavit in the Rule 43(6) application. 10
2 Caselines: 13 -5; AA para 7
3 Caselines:01 -27; FA Annexure FA1
4 Caselines: 01 -39 FA Annexure FA2
5 Caselines: 01 -43 FA Annexure FA3
6 Caselines: 01 -65 FA Annexure FA4.
7 Caselines: 13 -12 AA para 50
8 Caselines: 13 -13 AA para 56
9 Caseliens: 13 -13 AA para 58
8.12 Respondent in his answering affidavit admitted to being factually
insolvent.11
8.13 Respondent admitted that another creditor viz Cashflow Capital (Pty)
Ltd also obtained a judgment against him in his personal capacity and
when the sheriff attended the premises, the respondent pointed out all
the applicants property to be attached.12
8.14 Applicant obtained a writ of execution attempted to execute – and was
unsuccessful as the applicant received a nulla bona return. 13
ACTS OF INSOLVENCY
9. Section 9(1) gives any creditor of the debgtor the right to apply for
sequestration once the debtor commits an act of insolvency, whether or not
the debtor directed the act at the creditor concerned or intended it to have any
bearing on that creditors affairs.
10. The following are the circumstances under which a debtor commits an act of
insolvency:
10.1 Absence from Republic or dwelling;
10.2 Failure to satisfy judgment debt;
10.3 Prejudicing or preferring creditors;
10.4 Intent to prejudice or prefer;
10.5 Offer of arrangement;
10.6 Failure to apply for surrender;
10.7 Notice of inability to pay
10.8 Inability to pay debts after sale of business.
11. Actual insolvency is found where a dibtor ’s liabilities exceed his assets while
commercial insolvency is found where a debtor is unable to pay his debt due
to a cash flow or other problem, but his assets still exceed his liabilities.
10 Caselines: p13 -14 AA para 67
11 Caselines: p13 -16 AA para 53 and 81
12 Caselines: 02 -10 Supplementary Affidavit para 3 .4 and 13 -24 AA para 141
13 Caselines:p02 -53 Annexure WA11
12. It was argued by the respondent that from the respective affidavits filed of
record, there is a dispute relating to the applicant’s claim and the respondent’s
indebtedness as the respondent alleged that he currently attempted to resolve
the matter in the maintenance Court and that the applicant has compromised
her claim by settling the matter two days after signing her supplementary
affidavit.14
13. There is a pending maintenance Court application between the parties in
order to determine whether the maintenance due and payable is just and
equitable. It was submitted by the respondent that the maintenance
application may result in the maintenance being varied, which may have a
retrospective component. It was further contended that this matter became
settled by virtue of an agreement reached between the applicant and the
respondent’s father.
14. In all the above applications the Courts found that the respondent can afford
the maintenance ordered. This Court has already found that there was no
change in the repondent’s circumstances. The respondent’s c ontention that
the maintenance Court is entitled to retrospectively vary this Court’s orders –
and by virtue thereof the arrear maintenance will be extinguished is
untenable.
15. It was contended by the applicant that the respondent fails to inform this Court
that more than R300 000,00 of the alleged R400 000,00 maintenance payable
relates to the property that the respondent resides in. The respondent
refused to move out of the property and is liable to pay the expenses relating
thereto.
16. The respondent, on his own version was unaware that a maintenance
application was instituted by the applicant against his father. The settlement
reached between the applicant and the respondent’s father related to future
14 Caselines: 13 -7 AA para 13
maintenance of the minor children and had no effect on the arrear
maintenance.
17. The applicant and the respondents’ father settled the matter on 13 November
2023 and it was made an order of Court on 13 December 2023.15
18. The respondent admitted that he is u nable to pay his debts, that various
judgments have been gra nted against hi m, that he owes approximately
R140 000 000,00 and that he has no moveable or immovable property.
19. It is common cause that the respondent committed various acts of insolvency
and that he is factually insolvent. The respondent failed to provide any
evidence regarding his financial position and ability to satisfy the admitted
debts.
ADVANTAGE TO CREDITORS:
20. On behalf of the respondent it was contended that if all the costs be taken in
consideration that forms part of the administration costs of an insolvent estate,
it is doubtful that the re would be any free residue for any concurrent creditors
of the respondent’s estate.
21. It was further contended that in order for there to be an advantage to
creditors, a pecuniary benefit in the form of a divided, which is not immaterial,
mut be anticipated. There must be a reasonable prospect of a not negligible
dividend – not necessarily a likelihood, but a prospect which is not too remote.
22. It was argued on behalf of the respondent that the applicant has failed to aver
any facts that there is a concealment of assets, that assets were dissipated.
No evidence is provided to substantiate that there is any aspect that should
be investigated and which, with the mechanisms of the Insolvency Act, would
yield a benefit to creditors.
23. In Meskin & Co v Friedman16 the following was stated:
15 Caselines: 14 -12 RA para 40
“(a) the ‘advantage’ of investigation follows automatically upon sequestration, the
Legislator must in my opinion, have had some other kind of advantage in my view
when it required that the Court should have “reason to believe” that there would be
advantage to the creditors. The right of investigation is given, as it seems to me, not
as an advantage in itself, but as a possible means of securing ultimate material
benefit for the creditors in the form, for example, of the recovery of property disposed
of by the insolvent or the disallowance of doutful or collus ive claims. 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 remove – that some
pecuniary benefit will result to creditors It is not necessary to prove th at the insolvent
has any assets. Even if ther e are none at all, but there are reasons for thinking that
as a result of inquiry under the Act some may be revealed or recovered for the
benefit of creditors, that is sufficient. ”
24. It was held in Commissioner SARS v Hawker Aviation Partnership and
Others17 that sequestration was to the advantage of creditors if there existed
a prospect not too remote that, as a result of investitation and enquiry, assets
might be unearthed that benefited the creditors.
25. Respondent admitted that during the Rule 43(6) proceedings he failed to
provide the Court with and refer to the fact that he had made payments of
R11 912 264,00 received from the proceeds of the sale of a property from a
company known as T[...] P[...] (T[...] [...] ). The total amount received by T[...]
[...] was R13 000 000,00.18
26. The respondent provided no factual basis to dispute the allegations contained
in the applicant’s founding affidavit relating to advantage to creditors.
27. In my view should the estate of the respondent be sequestrated, the
appointed trustees will be in a position to properly investigate the disposal of
the respondents’ assets and reclaim such assets when it amounts to a
disposition as intended in the Insolvency Act.
16 1948 (2) SA 555 (W) at 558
17 2006 (4) SA 292 (SCA)
18 Caselines: 01 -24 FA para 43; AA 13 -14 paras 67 and 68.
28. Under the circumstances, there is a reasonable prospect that as a result of
inquiry under the Act some assets may be revealed or recovered for the
benefit of creditors.
29. In Nedbank Limited v Johan Hendrik Potgieter19 it was held that the Court
should only exercise its discretion in favour of the respondent if it is satisfied
that the debt will in fact be paid if the sequestration order is not gra nted.
30. The respondent fa iled to place evidence before me that he can settle his
arrears with the applicant and or other creditors.
31. I conclude that the applicant has made out a proper cae for the final
sequestration of the respondent’s estate..
32. In the result, the following order is made:
1. The estate of P[...] K[...] be and is h ereby sequestrated for the benefit of the
creditors as prayed.
2. The costs of the application be costs in the estate.
JJ STRIJDOM
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORI A
COUNSEL FOR THE APPLICANT :
ADV. SCHOEMAN J
INSTRUCTED BY: WALDICK INC
COUNSEL FOR THE RESPONDENT:
ADV R BRITZ
19 2013 J DR 2290 ( GST) AT PAR 19 -20
INSTRUCTED BY: GEYSER VAN ROOYEN ATTORNEYS