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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case No: 2025 - 038507
In the matter between:
INVESTEC BANK LTD APPLICANT
And
IZAK PETRUS VAN ZYL RESPONDENT
Coram: YAKE AJ
Argument: 28 January 2026
Delivered: Electronically on 17 February 2026
Summary: Provisional sequestration – compliance with section 8 and 9(1) of the
Insolvency Act 24 of 1936 – onus rest on Investec to satisfy the court that the
statutory requirements have been met.
Sections 80 (1) (a)-(b) and 81 (2) of the National Credit Act 34 of 2005 –
(reckless credit and affordability assessment) are not applicable, as a sequestration
application does not constitute debt-enforcement proceedings.
JUDGMENT
YAKE AJ
Introduction
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[1] In this application, Investec Bank Ltd (“Investec”) seeks an order for
provisional sequestration against the respondent. The application is predicated on
the respondent’s indebtedness to Investec in the amount of R2 601 609.86 together
with interest calculated at a prime rate of 11% per annum calculated daily and
compounded monthly in arrears from 18 March 2025 to date of final payment. The
application is strenuously opposed by the respondent. Investec filed a certificate of
balance purported to confirm the debt owed.
Background
[2] On 7 May 2021, the respondent applied for a Private Bank Account (“PBA”)
with Investec, which was approved on 21 May 2021. Following approval, the parties
concluded a credit agreement in terms of which the respondent was issued with PBA
card and advanced with a n initial credit limit of R50 000 . Both parties signed terms
and conditions governing the credit agreement facility.
[3] Some of the salient features of the PBA terms and conditions are that; the
credit limit means the maximum amount that may be outstanding at any time; the
respondent undertook not to effect transactions in excess of the credit limit, certain
purchases may be processed without pre- authorisation from Investec and the
respondent understood that the credit limit may be exceeded as a result of such
transactions, but agreed to be liable thereto; and any transaction which results in the
credit limit being exceeded would not render Investec liable for any such excess and
would not be construed as the exercise by Investec of its discretion to extend and or
increase the credit limit and or as a waiver of any of Investec’s right.
[4] On 1 February 2025, the respondent submitted a written application to
Investec requesting an increase of his credit limit which stood at R150 000 at the
time. Investec declined the request on 4 February 2025.
[5] On 5 February 2025, Investec implemented a change into its credit card 400
[5] On 5 February 2025, Investec implemented a change into its credit card 400
System (internal system). This deployment disabled the balance-check function for
tokenised transactions, allowing transactions to be processed through a token rather
than directly using card details. As a result, on the evening of 5 February 2025 ,
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Investec made an error of successfully processing all its client tokenised transactions
regardless of whether the client has a sufficient balance or has a limit on their
account.
[6] Upon realising this error, the respondent took advantage of the situation by
making multiple online betting transactions on Hollywood platform for the period
between 5 and 11 February 2025. These transactions result ed in an outstanding
balance of R2 601 609.86 on his PBA. Each time a transaction was processed,
Investec sent SMS notification to the respondent alerting him of the transactions.
[7] On 13 February 2025, Investec instructed its attorneys to place the
respondent in default and demand immediate payment of the full outstanding
balance into his PBA, in order to bring the facility within its approved credit limit of
R150 000.
[8] On 14 February 2025, the respondent did not dispute the debt, instead he
informed Investec’s attorneys that he was unable to comply with the demanded
payment and sent two written proposal letters dated 18 February 2025 and 6 March
2025, requesting Investec to allow him to pay a portion of his debt and settle it by 1
April 2028. Investec rejected both proposals.
[9] Following these rejections, Investec launched the present application based
on the respondent’s alleged insolvency and the commission of acts of insolvency.
Upon recei pt of th e application, the respondent instructed his attorney to file
opposing papers. In his opposition, he denied being indebted to Investec and raised
a defence under the National Credit Act 34 of 2005 (“NCA”), contending that the
dispute concerns a credit agreement a nd that Investec failed to comply with the
provisions of the NCA governing such credit agreements.
Submissions by the parties
[10] Counsel for Investec submitted that all formalities and requirements of
section 8 (e) and (g) ; section 9 (1) of the Insolvency Act 24 of 1936 (“The
section 8 (e) and (g) ; section 9 (1) of the Insolvency Act 24 of 1936 (“The
Insolvency Act”) have been complied with. It was further asserted on Investec ‘s
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behalf that they have the necessary locus standi to bring this application as the
respondent’s debt is not less than R100. It was strongly contended that Investec has
made out a prima facie case that the respondent’s estate is insolvent as his liabilities
exceeds his assets, the respondent committed acts of insolvency by a cknowledging
being indebted to Investec and making payment arrangements. Investec contended
that they have established a prima facie case and the respondent’s dispute of the
debt is not bona fide and on reasonable grounds.
[11] In resisting the application, the respondent denies that he is insolvent or has
committed acts of insolvency. He contends that Investec’s claim falls within the ambit
of the NCA and Investec’s extension of his credit limit was reckless. On this basis,
the respondent submits that t his constitutes a bona fide defence to Investec’s claim
and that the application ought to be dismissed.
Requirements for Provisional Sequestration Application
[12] To obtain an order for provisional sequestration, the court must be satisfied
that Investec has prima facie established that:
(a) they have a liquidated claim that exceeds the required threshold of R100 -
section 9 (1).
(b) the respondent is factually insolvent or has committed an act of insolvency –
section 8(e) and (g); and
(c) there is reason to believe that sequestration will be to the advantage of creditors.
section 10 (c).
[13] It is important to remind ourselves that sequestration proceedings are not civil
proceedings for the enforcement of a debt . Such an application may not be used to
enforce payment where the debt is disputed bona fide and on reasonable grounds.1
In the matter before me, although the debt is founded on a credit agreement,
Investec does not seek payment of outstanding monies but a sequestration order .
1 This is the so- called ‘Badenhorst Rule’. See in this regard Badenhorst v Northern Construction
Enterprise (Pty) Ltd 1956 (2) SA 346 (T).
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Accordingly, the provisions of the NCA 2 do not, at first glance, apply. I will address
the relevant provisions of NCA that have been referred to in the papers later in this
judgment.
[14] Section 9(2) of the Insolvency Act provides that a liquidated claim need not
be due and payable at the time of the hearing, confirming that a claim remains valid
for these proceedings even if it is not yet enforceable.
[15] I n Collet v Priest
3, De Villiers CJ stated the following very significant
statement on the nature of sequestration proceedings:
“The order placing a person's estate under sequestration cannot fittingly be
described as an order for a debt due by the debtor to the creditor. Sequestration
proceedings are instituted by a creditor against a debtor not for the purpose of
claiming something from the latter, but for the purpose of setting the machinery
of the law in motion to have the debtor declared insolvent. No order in the nature
of a declaration of rights or of giving or doing something is given against the
debtor. The order sequestrating his estate affects the civil status of the debtor
and results in vesting his estate in the Master. No doubt before an order so
serious in its consequences to the debtor is given, the court satisfies itself as to
the correctness of the allegations in the petition. It may for example have to
determine whether the debtor owes the money as alleged in the petition. But
while the court has to determine whether the allegations are correct, there is no
claim by the creditor against the debtor to pay him what is due nor is the court
asked to give any judgment, decree or order against the debtor upon any such
claim.”
[16] De Villiers’ views supra were shared by Mc Ewan J in Prudential Shippers
SA Limited v Tempest Clothing Co. (PTY) Limited 4 where he held that an
application for the winding up of a debtor’s estate did not constitute proceedings ‘for
the recovery of a debt’. It is against this background that I turn to evaluate the above
the recovery of a debt’. It is against this background that I turn to evaluate the above
requirements.
2 National Credit Act
3 Collett v Priest3 1931 AD 290 at 299
4 1976 (2) SA 856 (W) at 863D- 865A.
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[17] I now turn to consider whether Investec has established a proper basis for the
court to grant the relief sought.
Locus Standi
[18] The respondent is challenging Investec’s right to bring this application. His
challenge is three- fold, firstly: the respondent disputes that he is liable to pay
R2 601 609.86 and contends that the authorised credit limit of R150 000 is not yet
due under the credit agreement , as such Investec lacks locus standi to bring this
application. Secondly, the respondent denies being insolvent or having committed
any act of insolvency and thirdly , he asserts that there is no reason to believe that
sequestration will be beneficial to creditors.
[19] It is well established that a court may grant the sequestration order if it is
satisfied that the applicant has proved a claim as contemplated in section 9(1) of the
Insolvency Act, that the debtor is insolvent or has committed an act of insolvency
and demonstrated reason to believe that it will be to the advantage of the creditors
that the debtor’s estate is sequestrated.5
[20] For Investec to establish locus standi in these proceedings , it must
demonstrate to the court that the debt owed by the respondent is not less than R100.
In this regard, it is immaterial whether the debt is due and payable at the time the
application is heard. 6 Once Investec shows that the liquidated claim exceeds the
statutory threshold of R100, it possesses the necessary locus standi to bring these
proceedings.
[21] In this matter, as previously mentioned, Investec asserts that the total debt
owed is R2 601 609.86. Therefore, it [the debt] comfortably exceeds the statutory
threshold of R100 required by the Insolvency Act. This figure [ R2 601 609.86]
comprises a R150 000 authorised credit limit alongside roughly R2.4 million in
5 See section 12(1) of the Insolvency Act
6 Section 9 (2) of the Insolvency Act 24 of 1936
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unauthorised charges. As such, Investec has established the necessary locus standi
to institute these proceedings.
[22] E ven if I were to accept that the respondent is not liable for the disputed
amount of R2 601 609.86, he remains liable for the authorised credit limit of
R150 000. His argument that this amount of R150 000 is not yet due under the credit
agreement is untenable under section 9 (2). Section 9 (2) clearly does not preclude
Investec from instituting these proceedings. Accordingly, I am satisfied that Investec
has prima facie established that it has the locus standi to bring this application as its
liquidated claim exceeds the statutory threshold.
Factual Insolvency
[23] Investec s ubmits that the respondent is factually insolvent as his liabilities
exceed his assets. Investec alleges that the respondent’s outstanding debt is
R2 601, 609.86 whil e his assets amount to R468 342.10. Accordingly, Investec
argues that this demonstrates the respondent's factual insolvency.
[24] The respondent disputes his alleged insolvency and contends that his
authorised credit limit of R150 000 does not render him insolvent , as the amount is
not yet due under the credit agreement. He further states that he sold his immovable
property in May 2025, generating the net proceeds of approximately R503 525,
which amount exceeds the authorised credit limit.
[25] The onus is on Investec to satisfy the court that the respondent ’s estate is
insolvent, the respondent has no onus to disprove any element of the claim . Once
Investec demonstrates that the debt prima facie exists, the reverse onus lies on the
respondent to show that he is not insolvent, and that the debt is disputed bona fide
on reasonable grounds. Put differently, to resist sequestration, the respondent is
required to show that the debt on which Investec relies is bona fide disputed on
reasonable ground.
[26] To establish the respondent’s factual insolvency, Investec must demonstrate
[26] To establish the respondent’s factual insolvency, Investec must demonstrate
on a balance of probabilities, that the respondent’s liabilities exceed his assets.
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Investec argues that, even after the sale of the respondent’s immovable property, the
proceeds thereof remained insufficient to discharge the total debt owed.
[27] As pointed out before, I take cognisance of the fact that the respondent
disputes being indebted to Investec in the amount of R2 601, 608, and maintains that
his debt is limited to R150 000. He a sserts that he would be able to settle this
amount from the proceeds of the sale of the immovable property . I have already
addressed the question of debt not yet due under section 9 (2) above and will not
repeat those requirements here.
[28] It is common cause that Investec granted the respondent an authorised credit
limit of R150 000. It is also undisputed that Investec actioned a letter of demand
dated 13 February 2025 demanding payment of the full outstanding balance of R2
601 608.86. In response, the respondent sent an email dated 14 February 2025,
indicating willingness to resolve the matter and requesting confirmation of his
arrears. This was followed by a proposed payment plan, which Investec
subsequently rejected.
[29] Counsel for the respondent argued that because the respondent was not
legally represented at the time he made these arrangements, the court should
disregard them. While I acknowledge that the exchange of correspondence
preceded the court application, and the respondent was not legally represented at
the time, they nonetheless demonstrate that he had knowledge of the debt and failed
to dispute it. Had he genuinely been unaware of the liability , he would presumably
have stated so from the outset. Instead, he went to the length of promising to settle
the amount using the proceeds from the sale of his immovable property. This is
clearly not the conduct of a person who is unaware of a debt. After all, t he
respondent is a financial adviser by profession; he is expected to have vast
knowledge regarding financial matters and his financial obligations , as this is not a
knowledge regarding financial matters and his financial obligations , as this is not a
field foreign to him. Based on the facts presented, I am persuaded and satisfied that
the respondent is indeed factually insolvent, as his liabilities exceed his assets.
Acts of Insolvency
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[30] Section 8 of the Insolvency Act defines what constitutes acts of insolvency .
For purposes of this application, the applicable subsections relied upon by Investec
are subsections 8 (e) and (g). These provisions state that a debtor commits an act
of insolvency if he/she makes or offers to make any arrangements with a creditor to
be released wholly or partially from his /her debts, or if he or she gives notice in
writing to a creditor of his / her inability to pay any of his or her debts. Furthermore,
the court has discretion to grant an application for the sequestration of a debtor's
estate if it is satisfied that the requirements in subsections (e) and (g) have been
met.
[31] Investec argues that the respondent’s conduct constitutes acts of insolvency
as contemplated in the Insolvency Act. Specifically, Investec relies on the
respondent’s correspondence dated 18 February 2025 and 6 March 2025, in which
the respondent acknowledged his inability to satisfy the demanded amount and
proposed a repayment plan. Such written admissions, it is argued, fall squarely
within the ambit of Section 8.
[32] The respondent disputes liability for the R2.4 million exceeding his authorised
credit limit of R1 50 000, contending that these excess amounts arose from the
incorrectly authorised transactions. He relies on Sections 80(1) and 81(2) of the
NCA, alleging that Investec acted recklessly by failing to conduct a proper
assessment or take reasonable steps to evaluate his financial position before
granting the additional funds. Consequently, he maintains that he has a bona fide
defence to the claim . He further contends that, as this arises from a credit
agreement, the matter should be resolved through action proceedings rather than by
way of this application.
[33] Sections 80(1)(a) and (b) of the NCA characterise a credit agreement as
reckless where the credit provider either fails to conduct the statutory – mandated
reckless where the credit provider either fails to conduct the statutory – mandated
assessment contemplated in s ection 81(2), or having conducted such assessment ,
nonetheless elects to approve an increased credit limit in circumstances where the
available information indicates that the consumer does not adequately understands
the risks, costs or obligations arising from the agreement.
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[34] If the court finds that the credit provider failed to comply with section 80 (1)
(a) or (b), it may set aside all or part of the consumer's rights and obligations under
the agreement, as it deems just and reasonable in the circumstances. Alternatively,
the court may suspend the operation of the credit agreement in which case the
provisions of section 83(3(b)(i) will apply.
[35] I am baffled by the respondent ’s reliance on the above NCA provisions. I say
this because such reliance is both misplaced and internally inconsistent. In
paragraph 21 of his answering affidavit, the respondent states that he relied on an
agreement with Investec that his account would not be overdrawn beyond the R150
000 limit. This suggests that, at all material times, he was aware that Investec had
not authorised any credit in excess of the agreed credit limit.
[36] At paragraph 22, he went further to state that , “it appears that even though
Mrs Van Zyl had cottoned onto the fact that the credit limit was not being enforced by
Investec, and unbeknown to me charged approximately R2.4 million to my account
during this time.”
[37] Further at paragraph 24, the respondent claims:
“In respect of the charges to my account, I was at all material times assured
that M rs Van Zyl’s (my wife’s) gambling activities could not result in any
charges exceeding the R150 000 limit, which was enforced by the applicant.”
[38] Notably, these papers were prepared by his legal representatives. It appears
that even after obtaining legal counsel, the respondent remained aware that his
credit limit was capped at R150 000. By his own admission, his wife took advantage
of the error , knowing that it was not authorised by Investec. His contention that the
excess amounts were authorised by Investec appears to be just a ploy to delay the
inevitable. Thus, it is meant to be a mere dilatory tactic. While he portrays himself as
being unaware of these transactions; shifting blame to his wife; he overlooks the fact
being unaware of these transactions; shifting blame to his wife; he overlooks the fact
that his denial of knowledge regarding an extension of credit implies that no such
agreement ever existed between him and Investec . Had there been an extension of
credit, he would undoubtedly have been aware of it. Moreover , he was alerted to
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these transactions through numerous messages, yet he failed to dispute them at the
time, which was expected from an innocent person. His attempt to characterise the
excess transactions as authorised credit under the NCA is therefore contradictory
and unsustainable.
[39] The respondent was fully aware that in order to get any increase in his PBA,
he should submit a formal request to the bank. This is evident in his email dated 1
February 2025, where he requested an increase. If he was under the impression that
the bank would automatically adjust his credit, he would not have submitted this
request. Similarly, it is illogical to suggest that Investec, having declined his request
on 4 February 2025, would then unilaterally extend his credit limit without any
restrictions - two days later (6 February 2025).
[40] Regarding clauses 2.8 and 2.11 of the PBA, terms and conditions, the
respondent contends that the amounts exceeding his credit limit were authorised by
Investec and therefore constitutes extension under the NCA. C lause 2.8 and 2.11 of
the PBA terms and conditions read as follows:
“[2.8] Certain purchases may be processed without pre-authorisation from
Investec. The client understands that the credit limit / guaranteed account
limit /spending limit may be exceeded as a result of such transaction
and agrees to be liable.”
“[2.11] Any transaction which results in the credit limit, guaranteed account credit
limit or spending being exceeded shall not render Investec liable for any such excess
and shall not be construed as the exercise by Investec of its discretion to extend and
/or increase limit, guaranteed account credit limit and/or spending limit and/or as a
waiver of any Investec rights.”
[41] The respondent contends that Investec acted in terms of clause 2.8 and 2.11
in advancing the credit to him without conducting the required assessment. This
according to the respondent constitutes reckless credit as defined in section 80 (1)
according to the respondent constitutes reckless credit as defined in section 80 (1)
of the NCA. However, the respondent fails to disclose the terms and conditions
applicable to the alleged extended credit agreement. He also failed to dispute
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Investec’s averments that whenever he initiated transactions with his PBA card, they
were declined due to insufficient funds . Had Investec authorised the tokenised
transactions, the respondent would have been able to access funds in his PBA card.
In any event , his reliance on these clauses’ is further contradicted by his own
assertion in paragraph 21 and 22 of his answering affidavit.
[42] Investec had already considered and declined the respondent’s request for a
credit increase on 4 February 2025. It is therefore unclear w hat “further assessment”
the respondent suggests was re quired. Moreover, Investec could not have granted
credit that was never applied for. I could not find anything that suggest that Investec
authorised any amounts exceeding the agreed credit limit; and no extended cr edit
agreement was ever entered upon between Investec and the respondent .
Consequently, sections 80 (1) and 81 (2) of the NCA finds no application here. The
respondent’s reliance on these provisions is entirely misplaced.
[43] In the result, I find Investec has satisfied the requirements of section 8 of the
Insolvency Act in that the respondent committed acts of insolvency by informing
Investec in writing that he was unable to pay his debt and proposing payment
arrangement.
Advantage to Creditors
[44] I now turn to consider the question of whether the granting of a provisional
sequestration order w ould be to the advantage of creditors. In addressing this
requirement, it is incumbent upon Investec to demonstrate that there is “reason to
believe” that sequestration will benefit creditors . The court must therefore consider
the facts and surrounding circumstances placed before it . If it is satisfied, on a
balance of probabilities, that there is a reason to believe that creditors will benefit,
the court will be inclined to grant the provisional order of sequestration.
[45] Investec contends that there is reason to believe that sequestration will
[45] Investec contends that there is reason to believe that sequestration will
benefit creditors . The respondent , however, contends that , even if an order is
granted, sequestration will yield no advantage to Investec. The respondent maintains
that there is little to no value to be gained from sequestration and that it i s highly
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probable that Investec will receive no benefit from it. His argument, on a plain
reading, amounts to an acknowledgment that he possesses no assets.
[46] The Constitutional Court in Stratford v Investec 7 warned that the term
“advantage” should not be rigidified as it is broad. Stratford referred with approval to
the dicta of Friedman, where it was held:
“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 remote – that
some pecuniary benefit will result to creditors. It is not necessary to prove that the
insolvent has any assets. Even if there are none at all, but there are reasons for
thinking that as a result of enquiry under the Act some may be revealed or recovered
for the benefits of creditors, that is sufficient.”
[47] Roper J at 558 in Meskin v Friedman 8 in considering the meaning of the
phrase “reason to believe” stated:
“The phrase “reason to believe”, used as it is in both these sections, indicates that it
is not necessary, either at the first or at the final hearing, for the creditor to induce in
the mind of the court a positive view that sequestration will be to the financial
advantage of creditors. At the final hearing, though the court must be “satisfied”, it is
not satisfied that sequestration will be to the advantage of creditors, but only that
there is reason to believe that it will be so.”
[48] In the present matter, the number of the respondent’s creditors is unclear .
However, upon careful studying of papers filed by both parties, one can deduce that
Investec may likely be the only creditor disclosed by the respondent. This conclusion
7 Stratford v Investec Bank Ltd 2015 (3) SA 1 (CC) at para 44 and 45
8 Meskin & Co v Friedman 1948(2) SA 555 (W) at 559
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is supported by paragraph 28 of the respondent’s answering affidavit, where he
states that the proceeds from the sale of his immovable property amounted to
R503 525, less a R156 00 shortfall on his motor vehicle, leaving net proceeds of
R347 525. These proceeds suggest that the motor vehicle has been settled, leaving
Investec a s the sole creditor. Save for the debt of Investec, nothing in the
respondent’s papers indicates the existence of any further creditors . In fact, his
counsel argued that reference to “creditors” in his papers should be read as meaning
“creditor”. Once more, this is a confirmation that Investec is the sole creditor.
[49] Proceeding on the assumption that Investec is the respondent’s sole creditor,
the question that must be answered is whether granting a sequestration order would
benefit them. From what has been presented before me, there is nothing to suggest
that the respondent intends to settle his debt. Despite admitting in his papers that he
received proceeds from the sale of his immovable property, there is nothing that
suggests that he had made any attempt to pay his debt or any evidence that he has
made any attempt to apply those funds toward his indebtedness. While he initially
expressed willingness to make payment arrangements, he has since changed
course and demonstrated an unwillingness to pay.
[50] T he respondent failed to disclose to this court whether he has other assets. In
fact, he could not even explain what he did with the proceeds of the sale of the
immovable property. While I note his statement that the transfer was intended to take
place as far back as April 2025, the respondent has provided no evidence as to
whether this occurred. He has failed to take this court into his confidence.
[51] The respondent seems to be more concerned about his employment than
trying to solve the matter at hand. He argued that if this court were to grant
provisional sequestration, his employer might terminate his employment . He relies
provisional sequestration, his employer might terminate his employment . He relies
on Determination of Fit and Proper Requirements 2017 Act. He however fails to
explain how this will affect him as nothing in the Act refers to termination of
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employment if a sequestration order is granted. Clearly, this is a matter that warrants
an investigation into the respondent’s financial affairs.
[52] Considering all the above, I am satisfied that Investec has demonstrated
reasonable grounds for concluding that, upon a proper investigation of the debtor’s
affairs by a trustee, assets may be discovered and realised for the benefit of
creditors. See Dunlop Tyres (Pty) Ltd v Brewitt9.
Discretion
[53] Section 10 of the Act provides that if t he court is of the opinion that prima
facie, the applicant has established against the debtor a claim mentioned under sub-
section 9(1) , the debtor has committed an act of insolvency or is insolvent and
there is reason to believe that it will be to the advantage of creditors of the debtor ’s
estate that the estate be sequestrated, and the court may make an order
sequestrating the estate of the debtor provisionally.
[54] The court’s discretion to grant provisional sequestration is primarily informed
by whether it will be to the advantage of creditors. This is because advantage of
creditors is central to the court ’s exercise of its discretion. Even if I am satisfied that
the aforesaid requirements have been established, I am still not automatically bound
to grant an order for sequestration. I still have a discretion that must be exercised
judicially and upon a consideration of all the relevant circumstances , t aking into
account the requirement of Section 12(1)(c).
9 Dunlop Tyres (Pty) Ltd v Brewitt 1999(2) SA 580 (W) at 583.
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[55] In FirstRand Bank Ltd v Evans 10 the court observed that there was little
authority on how the court’s discretion should be exercised, ‘which perhaps indicates
that it is unusual for a court to exercise it in favour of the debtor ’. In Evans the court
declined to exercise its discretion in favour of the debtor.
[56] I note that the Evans matter is distinguishable from ours. There, the debtor did
not dispute the creditor’s claim or that sequestration would benefit creditors , he
merely denied committing an act of insolvency. The court nonetheless found that he
had admitted in writing his inability to pay his debts. As a result, the court made a
finding that certain matters needed to be investigated.
[57] In the present matter , the respondent disputes everything; he disputes being
insolvent, disputes having committed an act of insolvency and even disputes that
sequestration will be to the advantage of the creditors. However, I have already
made a finding pertaining to all the above. Understandably , sequestration can be
viewed as a drastic measure, and the court needs to consider whether there are any
alternatives other than granting an order for provisional sequestration. These may
include inter alia, whether the respondent has made any payment towards the debt
or has made repayment plans.
[58] Roper J stated the following in Millward v Glaser ,11 regard the court
discretion:
“So also, where a debtor cannot pay immediately, but is not insolvent,
and if given time will be able to discharge the debt, the Court would be
justified in exercising its discretion against sequestration. The discretion of the
Court is however not to be exercised lightly, and where an act of insolvency
has been proved the onus upon the debtor who wishes to avoid sequestration
is a heavy one.”
10 FirstRand Bank Ltd v Evans10 2011 (4) SA 597 (KZD)
11 Millward v Glaser 1950 (3) SA 547 (W) 553F – 554A
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[59] T he respondent has provided no meaningful information to justify why
sequestration should not be granted. In my view , the respondent has failed to
disclose or establish special or unusual circumstances that warrant the exercise of
this Court’s discretion in his favour. See FirstRand Bank Limited v Evans supra.
[60] Having considered all the evidence placed before me, I am satisfied that
Investec has established a prima facie basis for believing that it would be to the
advantage of creditors if a provisional sequestration order is granted.
[61] In Mercantile Bank Limited, A Division of Capitec Bank Limited v Ross
and Another12 Twala J held as follows in the purposive interpretation of the Act:
“Even if I am wrong in finding that the respondent’s estate should be sequestrated on
the basis of the reasons stated above, it should also be borne in mind that the
purpose of the Insolvency Act is not only for securing the pecuniary benefit to the
creditors, but to protect the general body of the public from people who behave in this
manner. It would be an absurdity to interpret s 12(2) of the act in a way that, even if
the creditor has established and met the requirements of s 12 (a) and (b), but the
debtor does not have any assets which when realised may yield a dividend to the
benefit of the body of creditors, an order sequestrating the estate of the debtor should
not be granted because the sequestration of the estate will not be to the advantage of
the creditors. I say so because that would be a narrow and rigid interpretation of s
12(2) of the Act.”
Conclusion
[62] I align myself with the remarks of Twala J in Ross supra. Even if my findings
on sequestrat ion are incorrect, it remains significant that the purpose of the
12 Mercantile Bank Limited, A Division of Capitec Bank Limited v Ross and Another [2023] ZAGPJHC
435 para 25.
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Insolvency Act extends beyond securing a financial benefit for creditors; it also
serves to protect t he broader public from conduct of this nature. It is clear that the
requirements for the sequestration of the respondent ’s estate have been met. The
respondent’s defence is neither bona fide nor sustainable. It is merely an attempt to
delay and frustrate Investec. I am therefore satisfied that a provisional sequestration
order is warranted.
Costs
[63] C osts be costs in the sequestration.
Order
[64] The following order is accordingly made:
[64.1] The respondent’s estate is hereby placed provisionally sequestrated in the
hands of the Master of the High Court Cape Town.
[64.2] A rule nisi be issued calling upon the r espondent and any other interested
party to appear and show cause, if any, before this court on 25 March 2026 at 10h00
or so soon thereafter as the matter may be heard as to why
(a) the Respondent's estate should not be finally sequestrated; and
(b) the cost of this application should not be costs of the administration in
the sequestration.
[64.3] The Order shall be served on:
(a) The respondent at […] T[…] C[…], Sonkring, Brackenfell.
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(b) The respondent’s employees, if any, situated at […] T[…] C[…] ,
Sonkring, Brackenfell.
(c) The Trade Union(s) representing the respondent’s employees, if any,
situated at […] T[…] C[…] , Sonkring, Brackenfell.
(d) The Master of the High Court, Cape Town.
(e) The South African Revenue Services via email at
liquidations@sars.gov.za
(f) By publication in the Cape Times and Die Burger newspaper.
S YAKE
ACTING JUDGE OF THE HIGH COURT
APPEARANCES
For the Applicant: Adv P G Louw
Instructed by: Werkmans Attorneys
For the Respondents: Adv TI Ferreira
Instructed by: Andre Kirsten Attorneys