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IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case number: 2026 - 016174
(1) REPORTABLE: No
(2) OF INTEREST TO OTHER JUDGES: Yes
(3) REVISED: Yes
6 May 2026
SIGNATURE
In the ex parte application of:
P[...] B[...] L[...] R[...] Applicant
[ Identity Number: 7[...] ]
[ Divorced ]
[ For his rehabilitation ito. section 124(2)(a) ]
[ Master’s Reference: T001764/2022 ]
The judgment was prepared and authored by the Judge whose name is reflected
and is handed down electronically by circulation to the parties’ legal representatives
by e-mail and uploading it to the electronic file of this matter on Caselines. The date
and time of hand-down is deemed to be _____ on 6 May 2026.
JUDGMENT
2
J Vorster, AJ
[1] On 5 May 2026, I dismissed the applicant’s application for rehabilitation and
undertook to furnish reasons for doing so. These are my reasons.
[2] The applicant seeks an order for the rehabilitation of his estate in terms of
section 124(2)(a) of the Insolvency Act. In his founding affidavit, the applicant
alleges that an application for the voluntary surrender of his estate was
accepted on 24 August 2022, and that thereafter he surrendered his estate
into the hands of his joint insolvency practitioners, Retha Sto ckhoff N.O. and
Zanet Kajee N.O.
[3] In paragraph 4 of his founding affidavit, the applicant testifies that, at the time
he surrendered his estate , he had unencumbered assets of R40,000, whilst
his liabilities amounted to R161,802.42. It is important to bear in mind that an
application for voluntary surrender is made ex parte, and that an applicant is
accordingly under a duty to make a full and frank disclosure of all relevant
facts and circumstances.
[4] Annexure “C2” to the founding affidavit is the First and Final Liquidation and
Distribution Account (L&D account), which was confirmed by the Master of
the High Court on 13 August 2024.
[5] The L&D a ccount reveals that eight creditors proved claims against the
applicant’s insolvent estate to a total value of R710,231.30. These creditors
are all commercial banks, to wit First National Bank (five claims), Nedbank
(one claim), and Standard Bank (two claims). All these claims are concurrent
in nature. The total amount available for distribution was R27,356.55, with the
result that the proven creditors received only nominal dividends
(approximately 4c/R1).
3
[6] The applicant has made no attempt to explain the considerable difference
between the value of claims disclosed in his voluntary surrender application,
and the claims later proven in his insolvent estate.
[7] A rehabilitation order is discretionary in nature. The onus rests on an applicant
to demonstrate that the discretion should be exercised in his favour by making
a full and frank disclosure of all relevant information, thereby enabling the
Court to properly exercise such discretion.
[8] One of the factors to consider in a rehabilitation application is whether the
applicant is a fit person again to participate in the commercial life of the
community free of the constraints and disabilities affecting an insolvent. This
consideration was described in Ex Parte Harris v (Fairhaven Country
Estate (Pty) Limited Intervening Party),1 as follows:
“In his application for rehabilitation Harris must satisfy the court that he is a fit
and proper person to be permitted to trade with the public on the same basis
as any other honest business person. The test was formulated thus by
Wessels J nearly a century ago, but despite the myriad changes in
commercial practice and business ethics in that time, it remains very much
applicable today –
‘I have to enquire whether the applicant is such a person as ought to
be rehabilitated - is he a person who ought to be allowed to trade with
the public on the same basis as any other honest man? That depends
entirely on how he conducted his trade before he became insolvent. If
he conducted himself in a negligent manner, or so as to deceive
others, he is not a person who ought to be rehabilitated until it is clear
that he intends to adopt better methods. His rehabilitation ought to be
withheld from him, or at any rate it ought to be postponed for such a
time that he will receive a severe lesson as to the necessity of trading
honestly.’ “
1 [2016] 1 All SA 764 (WCC); 2016 JDR 0159 (WCC) at [84].
4
[9] In Ex Parte Purdon,2 the court explained that an application for rehabilitation
is not a formality and that a full and frank disclosure is required. The following
apposite finding was made:
“An application for rehabilitation is not a formality. It requires frankness and a
full disclosure of all relevant facts. At the very least, the applicant has to
satisfy the court of three aspects. First, a full and frank disclosure of the
circumstances that led to his or her sequestration. Second, a demonstration
that he or she had learnt lessons from the insolvency, and third, that he or
she is rehabilitated and ready to re -enter the commercial world and the
economic mainstream. For the latter requirement, it does not suffice that
since sequestration, the insolvent had lived strictly on a cash basis. That is a
forced, natural, and intended, consequence of insolvency, and it is by no
means an indication of prudence on the part of the applicant for which he or
she should be applauded.”
[10] The evidence presented by the applicant falls far short of what is required of
an ex parte applicant in a rehabilitation application. In fact, the founding
affidavit is generic and non -specific. When dealing with his current monthly
expenses, the applicant provides rounded figures, and the list of expenses is
limited, making no provision for, for instance, travelling or any expenses
related to a motor vehicle. The applicant testifies that his monthly income
amounts to R22,734.20, and that the total of his combined expenses is
R15,136.00. According to him, the balance of R7,598.20 is “ saved for
unforeseen expenses”. In practical terms, the applicant rid himself of liabilities
exceeding R710,000 in return for a 4c/R1 dividend, and can now set aside
monthly savings.
[11] A further factor to consider is whether, in the application for voluntary
surrender, the court was misled as to the available assets or the value of the
claims of creditors. For the reasons already advanced, the evidence creates
claims of creditors. For the reasons already advanced, the evidence creates
the strong impression that the Court which granted the voluntary surrender
order was not placed in possession of accurate and complete information
concerning the applicant’s liabilities.
2 2014 JDR 0115 (GNP) at [9].
5
[12] In Ex Parte Mc Bride ,3 the applicant (i.e. Mr Mc Bride) was represented by
the same attorney and counsel involved in this application when he moved an
application for his rehabilitation. Much like in the present matter, the court
concluded that the applicant therein had understated his liabilities when he
surrendered his estate, and ultimately refused the application for
rehabilitation. The facts and circumstances of that judgment are strikingly
similar to those in this application. I find it necessary to quote from paragraphs
[17] and [18] of the judgment:
“[17] I find it extremely difficult to believe that any person could have such
little grasp of his financial affairs. I accept that an applicant may make
an error, but in this case the "error" resulted in the applicant under
reporting his liabilities by a factor of 3.5. In my view it is much more
likely that the applicant's liabilities were purposely understated in order
to create the illusion that there would be an advantage to creditors.
For that reason, I intend to refer this matter to the Director of Public
Prosecutions for investigation.
[18] Even if I am wrong on this finding, at best for the applicant he was
extremely negligent in the manner in which he approached the matter.
It was incumbent on the applicant to ensure that the most accurate
figures possible were provided to the Court. He clearly failed in that
duty.”
[13] Courts have historically refused to grant rehabilitation orders in instances of
fraud, recklessness, and false or overstated information in statements of
affairs.4 I align myself with this approach.
[14] Considering the above, I resolved to dismiss the rehabilitation application.
J VORSTER, AJ.
3 (2024-003235) [2024] ZAGPPHC 1166 (15 August 2024).
4 Ex Parte Friedman 1925 GWL 19.
6
Acting Judge of the High Court
Date heard: 5 May 2026.
Judgment date: 5 May 2026.
Reasons provided: 6 May 2026.
Appearance:
Counsel: RP Loibner
Instructed by: Herman Esterhuizen Smalman Attorneys