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IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case No: 2025-014811
1) REPORTABLE: NO
2) OF INTEREST TO OTHER JUDGES: NO
3) REVISED.
…………..………….. DATE 02 April 2026
SIGNATURE
In the matter between:
PEBBLE ROCK GOLF VILLAGE HOMEOWNERS
ASSOCIATION NPC Applicant
and
TUMELO ROBERT RATLADI Respondent
JUDGMENT
MM MOJAPELO AJ:
INTRODUCTION
[1] This is an application for the provisional sequestration of the respondent’s
estate in terms of ss 9 and 10 of the Insolvency Act 24 of 1936 (“the Act”).
[2] The applicant is a homeowners’ association. The respondent is cited as the
owner of immovable property described as Erf 2[...], Pebble Rock Golf Village,
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Pretoria. The indebtedness relied upon arises from arrear levies and related
charges.
[3] The application is unopposed, but that does not entitle the applicant to relief
as of course. Sequestration is an extraordinary remedy with serious consequences.
The court must be satisfied that the statutory requirements have been met and that
the discretion conferred by the Act should be exercised in favour of the applicant.
THE STATUTORY FRAMEWORK
[4] Section 10 of the Act provides that if the court to which a petition for
sequestration has been presented is of the opinion that, prima facie : (a) the
petitioning creditor has established against the debtor a claim as mentioned in s 9(1);
(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 if the estate is
sequestrated, the court may make an order provisionally sequestrating the debtor’s
estate.
[5] The use of the word “may” in s 10 denotes a discretion. The same is true of s
12(1), which governs the grant of a final order. By contrast, s 12(2) provides that if
the court is not satisfied that the requirements of s 12(1) have been met, it shall
dismiss the petition and set aside the provisional order. See Amod v Khan 1947 (2)
SA 432 (N) at 435.
[6] It follows that the court’s function has two dimensions. First, it must determine
whether the statutory jurisdictional facts have been established. Secondly, even
where they have, it retains a residual discretion whether to grant the order. That
discretion must be exercised judicially and in accordance with established principles.
See Julie Whyte Dresses (Pty) Ltd v Whitehead 1970 (3) SA 218 (D) at 219A -
D; Epstein v Epstein 1987 (4) SA 606 (C) at 612G -J; Firstrand Bank Ltd v
Evans 2011 (4) SA 597 (KZD) para 2 8; and Body Corporate of Old Trafford v
Muronzi 2024 JDR 2823 (GP).
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[7] The authorities also recognise that the requirement of advantage to creditors
itself involves an evaluative discretion. In Gardee v Dhanmanta Holdings and
Others 1978 (1) SA 1066 (N) at 1070 , Didcott J held that sequestration cannot be
said to be to creditors’ advantage unless it suits them better than any feasible and
reasonably available alternative.
[8] In addition, even where the applicant has shown a claim, an act of insolvency
or sequestration, and reason to believe that sequestration will advantage creditors,
the court retains an overall discretion to refuse the order if the circumstances justify
that course. See Amod supra at 439; Julie Whyte Dresses supra at
219; Evans supra para 27; and Old Trafford supra paras 8-12.
[9] It is correct that, where a respondent seeks to persuade the court to refuse a
sequestration order despite compliance with the statutory requirements, the burden
ordinarily rests on that respondent to establish special or unusual circumstances.
See Evans supra para 28 and the authorities there cited. But that principle does not
relieve a court, particularly in an unopposed matter, of the obligation to scrutinise
whether sequestration is truly justified on the facts placed before it.
[10] Sequestration is not a mere debt -collection device. Its purpose is to bring
about a concursus creditorum for the benefit of creditors as a body. It is not intended
to be employed as a private coercive mechanism where ordinary execution is
inconvenient or where the applicant’s real object is simply to secure payment of its
own debt. See Naidoo v Absa Bank Ltd 2010 (4) SA 597 (SCA) para 4.
[11] Finally, the applicant must make out its case in the founding papers. It cannot
rely on conjecture, generic formulae, or bare conclusions in relation to the key
jurisdictional facts.
THE APPLICANT’S CASE
[12] The applicant relies on:
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12.1. A liquidated claim founded upon a Magistrates’ Court judgment in the
amount of R115 981.58;
12.2. A sheriff’s nulla bona return, said to constitute an act of insolvency in
terms of s 8(b) of the Act; and
12.3. An allegation that sequestration will be to the advantage of creditors.
[13] The applicant’s heads of argument focus on the advantage to creditors
requirement, which this court raised as a concern. The applicant submits that there is
reason to believe sequestration will be to creditors’ advantage, relying on the
following key points:
13.1. The applicant’s security is unique and sui generis, and sequestration
will yield a specific advantage to creditors.
13.2. The respondent owns immovable property which can be realised at a
market-related price through the curator’s powers, including private
sale, potentially yielding a better price than execution sales.
13.3. The curator can investigate the respondent’s affairs, identify undue
preferences, and ensure proper distribution among creditors.
13.4. Sequestration will avoid the prolonged and ineffective process of
execution and sale in execution.
13.5. The applicant enjoys a statutory preference in respect of levies, as
transfer of the immovable property cannot occur without a clearance
certificate issued only upon settlement of levies.
13.6. The sequestration will limit further losses from accruing levies and
reduce the risk of the applicant being disadvantaged by other
creditors’ preferent claims.
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13.7. Even if no immediate dividend is paid, sequestration protects the
interests of the general body of creditors and the public from persons
unable to pay their debts.
13.8. The applicant relies on the well -established principle that it is
sufficient to show a reasonable prospect not necessarily a likelihood
of pecuniary benefit to creditors, citing Meskin & Co v Friedman 1948
(2) SA 555 (W) at 558-559, FirstRand Bank Ltd t/a First National Bank
v Naidoo (KZD), London Estates (Pty) Ltd v Nair 1957 (3) SA 591 (D),
and Gardee v Dhanmanta Holdings 1978 (1) SA 1066 (N).
13.9. The applicant also relies on Mercantile Bank Ltd v Ross [2023]
ZAGPJHC 435, which held that the applicant need not prove the
exact dividend payable but only a reasonable belief that sequestration
will be to creditors’ advantage.
13.10. The applicant submits that sequestration is not only for pecuniary
benefit but also to protect the public from insolvent persons who may
continue contracting without recourse.
13.11. The applicant further submits that the investigation and enquiry
powers of the curator may reveal additional assets, benefiting
creditors, citing Stratford and Others v Investec Bank Ltd 2015 (3) SA
1 (CC).
[14] I have considered these submissions carefully and the authorities cited. They
correctly state the law on the advantage to creditors requirement and the court’s
discretion. The principle that a reasonable prospect, not a certainty, of pecuniary
benefit suffices is well established.
[15] However, the applicant’s heads do not address certain critical factual
deficiencies in the founding papers, which remain determinative:
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15.1. The applicant’s own papers disclose the respondent’s ownership of
immovable property but do not provide a current valuation or any
evidence of the bond position or encumbrances. Without this, the
court cannot assess whether any equity exists to benefit creditors.
15.2. The applicant does not explain why execution against the immovable
property was not pursued or why sequestration would be more
advantageous than execution, contrary to the requirement
in Gardee that sequestration must be better than any feasible
alternative.
15.3. The assertion that the curator can sell the property privately and
obtain a better price is speculative and unsupported by evidence.
15.4. The suggestion that investigation may reveal additional assets is
abstract and not supported by any factual basis.
15.5. The applicant’s claim that the applicant enjoys a preference by virtue
of the clearance certificate requirement under the Sectional Titles Act
is correct in principle but does not establish that sequestration will
yield a dividend to concurrent creditors or that the estate has
sufficient assets to cover costs and claims.
15.6. The heads do not address the contradiction between reliance on
the nulla bona return and the known immovable property, a point
emphasised in Body Corporate of San Loren v Chipaga 2025 JDR
5512 (GP).
15.7. The heads do not engage with the court’s overall discretion or the risk
that sequestration is being used as a debt -collection device rather
than a bona fide insolvency remedy.
[16] The authorities cited by the applicant, including Meskin, Gardee, Naidoo,
Stratford, and Mercantile Bank Ltd v Ross , support the legal framework and the
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applicant’s burden. But they do not relieve the applicant of the obligation to place
before the court sufficient factual material to enable a proper assessment of
advantage to creditors and the court’s discretion.
[17] The applicant’s reliance on the public interest in sequestration as a protective
measure is noted. However, that principle does not override the statutory
requirements or justify sequestration where the applicant’s own papers undermine
the inference of insolvency or advantage.
[18] In the absence of evidence of the value and encumbrances of the immovable
property, the absence of any meaningful comparison with execution or other
remedies, and the failure to explain the nulla bona return in light of the known asset,
the applicant has not discharged the onus to show reason to believe sequestration
will be to the creditors’ advantage.
[19] The court’s overall discretion remains a further safeguard. Even if the
jurisdictional facts were established, the discretion would not be exercised in favour
of the applicant on these papers. The application appears motivated primarily by the
desire to recover arrear levies and to halt further accrual, rather than by a
demonstrated benefit to creditors as a body.
[20] The use of sequestration as a debt -collection tool is discouraged by the
courts. See Naidoo, Chipaga, Old Trafford , and Charlemagne. The court must be
vigilant to prevent abuse of the insolvency process.
THE APPLICANT’S CLAIM
[21] The applicant has attached a Magistrates’ Court judgment granted against the
respondent under case number 354/2023 in the sum of R115 981.58, together with
interest and costs.
[22] That judgment debt constitutes a liquidated claim for purposes of s 9(1) of the
Act.
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[23] The first requirement is accordingly satisfied.
WHETHER THE RESPONDENT COMMITTED AN ACT OF INSOLVENCY
[24] The applicant relies on s 8(b) of the Act. In broad terms, that provision is
engaged where the sheriff, acting pursuant to a judgment, demands satisfaction and
the debtor fails to satisfy the writ or to indicate disposable property sufficient to do
so, or where it appears from the sheriff’s return that sufficient disposable property
could not be found.
[25] The applicant alleges that after execution against movables and a sale in
execution, a further warrant was issued for the balance, whereafter the sheriff
returned nulla bona.
[26] Ordinarily, a proper nulla bona return may constitute evidence of an act of
insolvency. But it is not conclusive, and it must be evaluated in the context of the
papers as a whole. That is so because the commission of an act of insolvency and
the existence of an advantage to creditors are distinct enquiries. See London Estates
(Pty) Ltd v Nair 1957 (3) SA 591 (N) at 592.
[27] In the present matter , the applicant’s own founding affidavit states that the
respondent is the owner of Erf 2[...] Pebble Rock Golf Village, Pretoria. A WinDeed
search is attached confirming such ownership.
[28] That allegation creates a material difficulty for the applicant’s reliance on
the nulla bona return. The papers disclose, on the applicant’s own version, the
existence of immovable property owned by the respondent. Yet the return is relied
upon as though it demonstrates an absence of sufficient disposable property.
[29] In Chipaga, the court was confronted with materially similar circumstances
and held, correctly in my view, that an applicant cannot uncritically rely on a nulla
bona return where its own papers disclose known immovable assets. In such a case ,
the return, read with the founding affidavit, may undermine rather than establish the
inference sought to be drawn from it.
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[30] The point is not that immovable property necessarily defeats a nulla
bona return. The point is that where an applicant knows of such an asset, it must
explain its relevance. Is the property executable? Is it bonded? If so, to what extent?
Is there equity? Were steps taken toward execution against the immovable property?
If not, why not? None of this is addressed in the present papers.
[31] There is a further concern. In Nedbank Ltd v Norton 1987 (3) SA 619 (N), it
was held that if it is possible for the sheriff to make the demand contemplated by s
8(b), the sheriff should do so, since the debtor is the person best placed to indicate
what property exists and where it may be found. The papers here do not provide a
sufficiently detailed account to demonstrate proper compliance with the demand
component of s 8(b), particularly in circumstances where the applicant itself knew of
immovable property.
[32] A failed attempt to execute against movables does not, without more,
establish an act of insolvency for sequestration purposes where the same papers
disclose a known immovable asset and remain silent on its value, encumbrances
and executability.
[33] In my view, the applicant has not established, even on a prima facie basis, a
proper act of insolvency in terms of s 8(b).
WHETHER FACTUAL INSOLVENCY HAS BEEN SHOWN
[34] The applicant also suggests that the respondent is insolvent because he has
failed to pay levies, execution against movables has yielded little, and the arrears
have increased.
[35] That is insufficient. Factual insolvency means that a debtor’s liabilities exceed
his assets. An inability or failure to pay a particular debt does not by itself establish
such insolvency.
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[36] The papers contain no valuation of the respondent’s immovable property, no
evidence of any mortgage bond balance, no schedule of total liabilities, and no
balance-sheet type information from which the court can conclude that the
respondent’s liabilities exceed his assets.
[37] The allegation of factual insolvency is accordingly speculative and unproven.
ADVANTAGE TO CREDITORS
[38] The requirement in s 10(c) that there be reason to believe that sequestration
will be to the advantage of creditors is indispensable. It is not a technical afterthought
and cannot be satisfied by rote assertion.
[39] The classic statement remains that of Meskin & Co v Friedman 1948 (2) SA
555 (W) at 559, namely that there must be “a reasonable prospect not necessarily a
likelihood, but a prospect which is not too remote that some pecuniary benefit will
result to creditors.”
[40] The authorities make clear, however, that the right of investigation under the
Act is not itself the advantage. It is merely a means by which material benefit might
possibly be obtained. The applicant must still place sufficient facts before the court to
show that such a benefit is a realistic prospect. See Meskin supra at 559.
[41] The applicant’s case is sparse. It says, in substance, that: (a) the
respondent’s levy indebtedness continues to increase monthly; (b) a curator may
realise the immovable property; (c) other creditors may benefit if there is a residue;
and (d) insolvency proceedings will prevent further prejudice and bring finality.
[42] Those allegations are inadequate for several reasons.
[43] First, there is no current valuation of the respondent’s immovable property.
The papers reflect only the historical purchase price.
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[44] Secondly, there is no disclosure of the bond position. If the property is
bonded, the amount outstanding, the ranking of the secured creditor and the likely
free residue are all highly material. Without such evidence, the court cannot assess
whether any dividend to concurrent creditors is reasonably foreseeable.
[45] Thirdly, there is no evidence regarding the anticipated costs of sequestration
and administration. The courts have long cautioned against deploying the expensive
machinery of sequestration where it will consume the estate or achieve no better
result than ordinary execution. In Ex parte Van den Berg 1950 (1) SA 816 (W) at
817, Ramsbottom J described such use of sequestration as “to use a sledgehammer
to break a nut.”
[46] Fourthly, the applicant does not identify any concrete impeachable
transactions, hidden assets, or other facts suggesting that an enquiry by a trustee is
likely to uncover value for creditors. The reference to investigation is abstract and
formulaic.
[47] Fifthly, the comparative exercise required by Gardee has not been
undertaken. The applicant is already armed with judgment. It does not explain, with
reference to facts, why sequestration would be more advantageous than execution
against the immovable property or some other feasible and less expensive
procedure.
[48] Sixthly, the papers suggest that the applicant’s true concern is to stop the
continuing accrual of levies and to secure a change in ownership so that the property
is held by a paying owner. That may be understandable from the applicant’s
perspective, but it is not the same thing as demonstrating advantage to creditors in
the sense contemplated by the Act.
[49] The reasoning in Old Trafford is apposite. There was a body corporate that
sought sequestration in circumstances where its real grievance was ongoing non -
payment and the prospect of having the debtor’s primary residence sold. The court
payment and the prospect of having the debtor’s primary residence sold. The court
held that the submissions regarding advantage were made in the abstract, did not
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establish that sequestration would be more beneficial than execution, and did not
justify the drastic consequences sought.
[50] Similar caution appears in Body Corporate of Charlemagne v Drysdale
(2022/039556) [2026] ZAGPJHC 68 (4 February 2026) , where the court emphasised
the need for concrete evidence regarding the property, secured liabilities,
administration costs and likely dividend before advantage to creditors can properly
be found.
[51] The recent judgment in Samantha De Jager v Christopher Petrus Kruger and
another, Case no 2025 -146525 (unreported) , likewise underscores that the
“advantage to creditors” requirement is not met by reciting trite principles and
invoking a trustee’s investigative powers without factual material relating to the
debtor’s estate, secured debt, costs and realistic dividend.
[52] On the papers before me, there is no proper factual foundation for a finding
that there is reason to believe that sequestration will be to the advantage of
creditors.
THE COURT’S OVERALL DISCRETION
[53] That finding is dispositive. Once one or more of the jurisdictional requirements
are not established, the application must fail.
[54] It is nevertheless appropriate to address the overall discretion of the court,
because the applicant’s case appears to assume that once a judgment debt and
a nulla bona return exist, a provisional order should ordinarily follow. That
assumption is incorrect.
[55] The court’s overall discretion in sequestration matters is a true discretion to be
exercised judicially upon a consideration of all relevant facts. It is neither unfettered
nor mechanical. See Pelunsky & Co v Beiles 1908 TS 370 at 372; Julie Whyte
Dresses supra at 219A -D; Amod supra at 439; Evans supra para 2 8; Old
Trafford supra paras 8-12.
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[56] In Amod Hathorn, JP made plain that “may” does not mean “must”. In Julie
Whyte, the court recognised that the discretion must be exercised judicially.
In Evans Wallis J confirmed that special or unusual circumstances may justify refusal
even where the statutory requirements have been met. And in Old Trafford Strydom
AJ described the “tale of two discretions”: first, the evaluative judgment inherent in
the advantage enquiry; and secondly, the overall discretion to refuse the order
despite formal compliance.
[57] In exercising that discretion, courts may consider whether the sequestration
application constitutes an abuse of process, whether ordinary execution or another
remedy would better serve creditors, whether the application is being used for an
ulterior purpose, and, where relevant, whether constitutional considerations arise ,
Old Trafford supra paras 42-49.
[58] I do not decide this matter on constitutional grounds. It is unnecessary to do
so. But Old Trafford correctly reminds one that where sequestration will, in practical
terms, result in the forced loss of a home, the court cannot adopt a blinkered or
purely mechanical approach. Judicial oversight remains important where the
practical effect of the order may be severe.
[59] Even if I were wrong in my conclusion that the applicant failed to establish an
act of insolvency and advantage to creditors, I would , in any event , not have
exercised the discretion in favour of granting a provisional order on these papers.
[60] Several considerations lead to that conclusion:
60.1. The applicant seeks to rely on a nulla bona return while
simultaneously alleging that the respondent owns immovable
property;
60.2. It provides no meaningful explanation of the value, encumbrances or
executability of that property;
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60.3. It does not establish, by concrete facts, that sequestration offers any
advantage over execution; and
60.4. The tenor of the founding affidavit suggests that the application is
motivated primarily by debt collection and the desire to halt future levy
prejudice, rather than by a demonstrated benefit to creditors as a
body.
[61] Those features strongly militate against granting sequestration relief. They
point to the use of insolvency proceedings as a coercive substitute for more
conventional remedies. That is not the purpose of the Act.
ORDER
[62] I therefore make the following order:
1. The application for the provisional sequestration of the respondent’s
estate is dismissed.
2. There is no order as to costs.
_________________________
MM MOJAPELO
ACTING JUDGE
HIGH COURT GAUTENG DIVISION, PRETORIA
02 April 2026
APPEARANCES:
Counsel for the Applicant : Adv. D Broodryk
Attorney for the Applicant : Scholtz Attorneys