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VAN EEDEN AJ
[1] More than a century ago, Innes CJ stated the following in De Waard v Andrew
Thienhaus Ltd:1
“Speaking for myself, I always look with great suspicion upon, and examine very
narrowly, the position of a debtor who says, ‘I am sorry that I cannot pay my creditor,
but my assets far exceed my liabilities’. To my mind the best proof of solvency is that
a man should pay his debts; and therefore I always examine in a critical spirit the case
of a man who does not pay what he owes.”
[2] Innes CJ might as well have written about the respondent in this matter. The
respondent is a member of the applicant homeowners’ association and receives
monthly invoices in respect of levies and similar charges for which homeowners
are responsible. The respondent has been a member of the applicant since
transfer of the relevant immovable property to him during May 2016.
[3] It appears to be common cause that the immovable property is unencumbered
and that it has a value of approximately R4,5 million. But the respondent does
not make payment of the monthly invoices that he receives from the applicant.
Instead, he makes ad hoc payments from time to time when pressured by the
applicant to do so.
[4] And so in 2019 action was instituted against the respondent for payment of the
arrears. The litigation ended in a written settlement agreement concluded
between the parties and signed on 12 April 2023. It reflects that the respondent
was indebted to the applicant in respect of outstanding levies, building levies,
CSOS levies, administration fees, reminder fees, water consumption and interest
due up to and inclusive of January 2023 in an amount of R676 511.88. It also
reflects that the respondent was unable to pay the admitted amount and the
parties agreed that he would immediately pay an amount of R150 000.00. The
balance would be paid in monthly instalments in the amount of R50 000.00.
Interest would be charged on the outstanding balance at 10% per annum from
Interest would be charged on the outstanding balance at 10% per annum from
1 1907 TS 727 at 733.
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date of signature of the settlement agreement until date of payment of the final
instalment, both dates inclusive. If the respondent defaulted on any monthly
instalment, the remaining balance would immediately become due and payable
and the respondent agreed that the applicant could then proceed with a warrant
of execution. Furthermore, the respondent undertook to pay the plaintiff’s wasted
costs on an attorney and client scale as the agreement between the applicant
and its members stipulates.
[5] The respondent , however, failed to adhere to the terms of the settlement
agreement, in consequence of which the applicant returned to court. On
19 September 2023, the settlement agreement was made an order of court.
[6] Once again, the respondent failed to settle the debt contained in the court order.
In the execution process that followed, t he sheriff provided personal service of
the warrant of execution on 23 October 2023. Still, the respondent did not pay.
The sheriff rendered a nulla bona return.
[7] On 27 November 2023, this application was issued. The applicant seeks the
sequestration of the respondent, relying on the sheriff’s return and actual
insolvency. The respondent still did not pay the amount due in terms of the court
order.
[8] The opposed sequestration application came before Fisher J on 26 May 2025,
and she granted a provisional order of sequestration . On the return day o f
24 July 2025, the matter came before Kairinos AJ, who extended the rule nisi
and granted leave to the parties to file supplementary affidavits in support of the
allegations contained in the sheriff’s nulla bona return. This appears to have been
in consequence of the respondent’s contention that he did not fail to point out
sufficient disposable property to the sheriff, but that he pointed to the
unencumbered immovable property. Supplementary affidavits were duly filed
and the sheriff conceded that the return was incorrect for the above -stated
and the sheriff conceded that the return was incorrect for the above -stated
reason. The respondent , however, still did not ma ke payment of the full
outstanding amount of the court order and continued to oppose his
sequestration, contending that there is an abuse of process and that normal
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execution proceedings should rather be instituted against him. This is what
brings the words of Innes CJ to mind.
[9] Advocate Mushet and Advocate A Huhlwane appeared for the applicant. At the
commencement of the hearing on 16 September 2025, Mr Mushet informed me
from the Bar that earlier that morning the capital outstanding amount of
R28 511.88 had been paid by the respondent. The interest on the judgment debt
in the amount of R53 118.45 remained unpaid. Mr T Mahapa appeared on behalf
of the respondent and confirmed that the payment as explained by Mr Mushet
had been made earlier that morning. The interest remains outstanding, as do the
monthly instalments payable which according to the applicant now amounts to
R465 480.50. The respondent’s response to this outstanding amount is that the
amount is not liquidated.
[10] It appears to me that the amount owing is indeed liquidated, certainly at least the
interest portion thereof given that the agreement of settlement was made an
order of court. The monthly levies are capable of easy ascertainment and if the
respondent dispu ted any of the entries on his account with the applicant, he
provided no details thereof in his opposing papers. In fact, it is altogether not
clear why the respondent fails to make the necessary monthly payments, other
than financial inability . Although h e alludes to a dispute between him and the
applicant, he failed to provide any details of the alleged dispute. There is, for
example, no correspondence evidencing attempts to resolve a dispute. The
respondent did not provide any financial information that one would have
expected him to reveal. For instance, he did not state where he is employed,
what he earns, what assets he has ; he has not provided a balance sheet of
assets and liabilities and no details of expenditure that one would expect, such
as in respect of vehicles, credit cards and telephones. At the end of the day, it is
unclear why payment of the court order and monthly invoices were not
unclear why payment of the court order and monthly invoices were not
forthcoming, and he has made no effort to explain his failure to make monthly
payments.
[11] The aforesaid facts demonstrate actual insolvency. It appears to me that he also
committed an act of insolvency in terms of section 8(g) of the Insolvency Act, 24
of 1936, when he gave notice in the agreement of settlement that he is unable to