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IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
Case number: 2024-109617
In the matter between:
STARBO INVESTMENTS (PTY) LTD Applicant
and
QUINTEN VAN NIEKERK Respondent
JUDGMENT
WINDELL J:
(1) REPORTABLE: YES / NO
(2) OF INTEREST TO OTHER JUDGES: YES / NO
(3) REVISED: YES / NO
19 September 2025 _________________________
DATE SIGNATURE
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Introduction
[1] This is the return date of a rule nisi of a provisional sequestration order granted
over the respondent’s estate on 26 February 2025. The applicant seeks a final
sequestration order. The respondent opposes the application and denies that the
statutory requirements have been satisfied.
[2] Section 12(1) of the Insolvency Act 24 of 1936 (the Act) provides that a court may
confirm a provisional sequestration order if it is satisfied that:
‘(a) the petitioning creditor has established against the debtor a claim such as is
mentioned in subsection (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.’
[3] Once these three elements are shown, the court retains a discretion , but it is a
discretion coupled with a duty: in the absence of special circumstances the order
ordinarily follows. In FirstRand Bank Ltd v Evans,1 Wallis J explained as follows:
‘Once the applicant for provisional sequestration has established on a prima facie basis the
requisites for such an order, the court has a discretion whether to grant the order. There is little
authority on how this discretion should be exercised, which per haps indicates that it is unusual
for a court to exercise it in favour of the debtor. Broadly speaking, it seems to me that the discretion
falls within a class of cases generally described as involving a power combined with a duty. In
other words, where the conditions prescribed for the grant of a provisional order of sequestration
1 2011 (4) SA 597 para 28.
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are satisfied, then in the absence of some special circumstances, the court should ordinarily grant
the order. It is for the respondent to establish the special or unusual circumstances that warrant
the exercise of the court's discretion in his or her favour.’
[4] Against this statutory framework the task of the court is a narrow but important
one. It is not to decide the merits of the underlying contractual dispute in all its detail, nor
to determine the respondent’s ultimate solvency beyond doubt, but to assess whether the
applicant has established the three jurisdictional facts —existence of a liquidated claim,
an act of insolvency or actual insolvency, and a reasonable prospect of advantage to
creditors—and whether any special circumstances justify withholding a final order. It is to
these requirements that I now turn.
Debt Owed
[5] The applicant’s claim arises from a written agreement of sale concluded on 4
March 2024 for three properties at a purchase price of R4.5 million. In terms of the
agreement, the respondent undertook to pay a R400 000 deposit by 30 April 2024 and
monthly instalments of R200 000 until the full price was paid by August 2025. He also
agreed to pay occupational rental of R30 000 per month, pro rata in advance, and to bear
water and electricity charges.
[6] The respondent paid only R260 000 in total and failed to pay the deposit,
instalments, occupational rent and municipal accounts (which by June 2024 already
totalled R49 455.80). The applicant calculates the amount outstanding at R1 599 456.80
as at September 2024. Although the respondent disputes the quantum and claims that
certain charges were inflated or not agreed, he concedes that the R400 000 deposit
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remains unpaid. This constitutes a liquidated claim well above the statutory minimum of
R100 required by section 9(1) of the Insolvency Act. The respondent, however, contends
that the applicant waived its right to demand payment of the R400 000 deposit because
the formal demand was issued after the contractual due date.
[7] Waiver is never presumed and requires clear proof that the creditor, with full
knowledge of the right, unequivocally intended to abandon it. In McGenis v RAF 2 the
court held that waiver must be clearly proved and that the conduct relied upon must be
irreconcilable with the continued existence of the right. The Constitutional Court in Lufuno
Mphaphuli & Associates (Pty) Ltd v Andrews and Another 3 confirmed that waiver is a
matter of intention judged objectively and that persons do not lightly abandon their rights.
The onus rests on the party asserting waiver to show that the other party, with full
knowledge of the right, decided to abandon it, whet her expressly or by conduct plainly
inconsistent with an intention to enforce it.
[8] Measured against these principles, the respondent’s allegation falls far short. The
mere fact that the applicant issued its demand after the payment period had expired does
not establish an intention to abandon the right to the deposit. The defence is ther efore
rejected out of hand.
2 McGenis v Road Accident Fund (4486/2005) [2009] ZAKZDHC 34 (14 September 2009) para [12] and
[13].
3 2009 (4) SA 529 (CC) para [80].
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Act of Insolvency – Section 8(g)
[9] Section 8(g) of the Insolvency Act provides that a debtor commits an act of
insolvency if he gives notice in writing to any creditor that he is unable to pay his debts.
The applicant relies on a series of WhatsApp messages sent by the respondent on 12
August 2024—after repeated demands for payment and once the debt had fallen due —
in which he stated that he was “busy with a bond” and awaiting the bank’s decision.
[10] The respondent admits that payments were delayed but maintains that he made
intermittent payments and was negotiating further arrangements in good faith. He
disputes the applicant’s calculation of occupational rent as excessive and contends that
the munici pal charges are overstated and partly attributable to the applicant or its
subsidiaries. He also asserts that the WhatsApp messages merely reflected ongoing
financing efforts and not an inability to pay.
[11] These protestations do not alter the objective meaning of the communications.
Applying the test in Court v Standard Bank of SA Ltd ,4 the question is not whether the
debtor is in fact insolvent, but how a reasonable creditor would understand the message.
As the court explained:
‘Whether a particular notice is such as to constitute an act of insolvency within the meaning of s
8(g) depends on the construction of its contents, read as a whole. The question … is not whether
the debtor is in fact unable to pay or whether he is solvent or insolvent. Inability to pay must be
4 Court v Standard Bank of South Africa Ltd., Court v Bester NO (133/93, 638/93) [1995] ZASCA 39; 1995
(3) SA 123 (AD); [1995] 2 All SA 440 (A) (30 March 1995) at 134A-C.
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distinguished from unwillingness to pay. If the debtor is merely saying that he is unwilling to pay,
the letter does not constitute an act of insolvency. Construing the written notice involves deciding
how the reasonable person in the position of the credi tor receiving the notice would understand
it.’
[12] Viewed objectively, these communications indicate that the respondent lacked the
funds to meet his obligations and was dependent on securing external finance before
payment could be made.
[13] The respondent also attempted to register a mortgage bond over properties
already subject to the sale agreement. Such conduct, if successful, would have the effect
of preferring one creditor over others and reinforces the inference of financial distress.
[14] Taken together, the WhatsApp messages and the attempt to encumber the
properties reveal more than a mere unwillingness to pay. They depict a debtor who
acknowledges that he does not have the funds to discharge his obligations and who seeks
a period of grace to secure alternative financing. A reasonable creditor would understand
these statements as notice of inability to pay within the meaning of section 8(g).
[15] Although the respondent denies committing any act of insolvency and argues that
he remains asset-rich and in the process of obtaining finance, the objective facts satisfy
the statutory requirement. The communications amount to notice of an inability to pay and
therefore constitute an act of insolvency as contemplated in the Act.
Advantage to Creditors
[16] The applicant need not prove that a substantial dividend will result. The test is
whether there is a reasonable prospect —not too remote—of some pecuniary benefit to
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creditors. In Stratford and Others v Investec Bank Ltd and Another ,5 the Constitutional
Court explained that a sequestration order may be granted if “there is reason to believe
that it will be to the advantage of creditors,” and emphasised that it is enough to show a
reasonable prospect of benefit, even if the debtor appea rs to have no realisable assets.
In Meskin & Co v Friedman ,6 the court likewise held that a reasonable prospect of
discovering assets or recoverable transactions through the enquiry procedures of the Act
is sufficient. The concept of “advantage” is deliberately broad and not limited to a
calculable dividend. As Meskin observes, the relevant reason to believe exists where,
after allowing for the anticipated costs of sequestration, there is a reasonable prospect of
an actual payment —however small—to each creditor, unless some alternative process
would yield a larger return.
[17] The respondent has admitted owning several immovable properties which he
claims are unencumbered. Even if their precise nature or value is uncertain, these
properties, together with any movable assets on them, can be investigated, inventoried
and realised by a trustee. An enquiry into his financial affairs may also reveal further
assets or voidable dispositions for the benefit of creditors. In Lynn & Main Inc v Naidoo
and Another7 it was held that even if no assets are presently known, the prospect that an
investigation may uncover recoverable property is sufficient to satisfy the requirement.
5 (CCT 62/14) [2014] ZACC 38; 2015 (3) BCLR 358 (CC); 2015 (3) SA 1 (CC); (2015) 36 ILJ 583 (CC) (19
December 2014).
6 Meskin & Co v Friedman 1948 (2) SA 555 (W).
7 2006 (1) SA 59 (N) para [40].
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[18] Despite these admitted holdings, the respondent has placed no facts before the
Court to show that sequestration would not advantage creditors. As Hathorn JP observed
in Amod v Khan ,8 a debtor is uniquely positioned to provide information about his own
financial affairs, while a creditor will usually have little knowledge of the debtor’s assets
or liabilities. Recognising this imbalance, the Legislature in 1936 made it easier for a
creditor to establish advantage to creditors, requiring only a modest evidentiary showing.
The respondent, who alone knows the full extent of his estate, has failed to discharge this
evidential burden.
[19] The uncontested facts support the applicant’s case. The respondent’s
indebtedness arises from a written sale agreement, the material terms of which are
common cause. He has defaulted on his obligations, admitted ownership of
unencumbered immovable property adjacent to the applicant’s properties, and offered no
credible explanation why sequestration would not benefit creditors. These circumstances
provide “good reason to believe” that sequestration will yield at least a not -negligible
benefit.
[20] The respondent argues that sequestration would prejudice him by frustrating his
ability to complete the purchase and by complicating his financing arrangements, but
these considerations do not displace the statutory test. They merely underscore that he
does not have the liquid funds to meet his obligations and that only the machinery of
sequestration will ensure an orderly investigation and distribution of any assets for the
benefit of the concursus creditorum.
8 Amod v Khan 1947 (2) SA 432 (N) at 438.
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[21] On the facts, there is a reasonable prospect that creditors will derive a pecuniary
advantage from the respondent’s sequestration. His unsubstantiated claims of personal
wealth and pending financing, offered without concrete proof, cannot overcome the
applicant’s clear prima facie case. The requirement of advantage to creditors has
therefore been met.
Conclusion
[22] The applicant has established all the statutory requirements for a final
sequestration order and the respondent has failed to place any credible facts before the
Court to show why the order should not follow. His admissions regarding ownership of
unencumbered property and inability to pay, coupled with the absence of any special
circumstances, leave the Court with no basis to exercise its discretion in his favour. A
final order of sequestration is therefore warranted.
[23] In the result the following order is made:
1. The estate of the Respondent is placed under final sequestration.
2. The costs of the application are costs in the sequestration.
________________
L. WINDELL
JUDGE OF THE HIGH COURT
GAUTENG LOCAL DIVISION, JOHANNESBURG
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Delivered: This judgement was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation to the Parties/their legal
representatives by email and by uploading it to the electronic file of this matter on
CaseLines. The date for hand-down is deemed to be 19 September 2025.
APPEARANCES
For the Applicant: R Pottas
Instructed by: Jurgens Bekker Attorneys Inc,
For the Respondent: S Swiegers
Instructed by: Paul T. Leisher & Associates
Date of hearing: 1 September 2025
Date of judgment: 19 September 2025