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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO.: 2023-070978
In the matter between:
THE LEISURE BAY BODY CORPORATE APPLICANT
And
LESEGO LOVEDELIA MORETLWE RESPONDENT
Delivered: This judgment is handed down electronically by uploading it to the electronic file of this matter on
CaseLines. In the event that there is a discrepancy between the date the judgment is signed and the date it is
uploaded to CaseLines, the date the judgment is uploaded to CaseLines is deemed to be the date that the judgment
is handed down.
JUDGMENT
VAN DER SCHYFF J
Introduction
[1] The applicant seeks the final sequestration of the respondent's estate. The application arises
from arrears levies and related charges owed by the respondent, as the owner of Unit 179 in
the Leisure Bay sectional title scheme.
[2] The respondent fell into arrears. On 30 May 2022 , the applicant obtained judgment in the
Magistrates' Court for R46 150.52, interest, and costs on attorney-and-client scale. In
September 2022 , the parties concluded an acknowledgment of debt for R65 053.97,
incorporating the legal costs then incurred. The respondent undertook to pay R6 938.68
monthly. The applicant avers that she paid twice, in September and November 2022, and
thereafter default ed. The levy statement annexed to the founding affidavit records three
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: NO
Date:18 August 2026 E van der Schyff
omcr.or THEC111£P J l!ST1CF.
R.EP11111.ICOFSOU nt AFRICA
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payments of R6 940 each, in September, November and December 2022. The last was late.
Three instalments had by then fallen due.
[3] Execution followed. The sheriff demanded satisfaction of the judgment and rendered a nulla
bona return. The sequestration application was launched during July 2023, when the arrear s
stood at R73 946.45. It was served personally on the respondent. Ceylon AJ granted a
provisional order on 13 November 2023, with a return date of 14 March 2024.
[4] The return date was extended from time to time. The rule nisi ultimately lapsed when the matter
was removed from the roll without a further extension. On 19 May 2026 , Labuschagne J held
that the rule had been discharged in error. He dismissed the revival application and directed in
terms of s 173 of the Constitution that the sequestration application be enrolled on the opposed
roll for finalisation.
The procedural position
[5] The procedural position should be stated at the outset. No provisional order is presently in force.
The rule nisi lapsed and the revival application was dismissed. Labuschagne J dismissed the
revival application and directed, in terms of s 173 of the Constitution, that the Registrar enrol
the sequestration application on the opposed roll for finalisation. The sequestration application
as a whole is therefore before me. This Court may grant a rule nisi under s 10 of the Insolvency
Act, grant a final order under s 12, or dismiss the application. The applicant asked that the
matter be determined finally on the affidavits already filed. I approach it on that basis. The order
below disposes of the application in both its provisional and final form.
[6] The matter must be determined on the evidence now before th is Court. Under s 12(1) of the
Insolvency Act 24 of 1936, a final sequestration order may be granted only if the Court is
satisfied that the applicant has established the requisite claim, that the debtor has committed
an act of insolvency or is insolvent, and that there is reason to believe that sequestration will be
to the advantage of creditors.
[7] The applicant relies on the historical nulla bona return and on statements by the respondent
concerning her inability to meet all her financial obligations. It also relies on the increase in the
balance reflected on the levy account and contends that the respondent's financial position has
not materially changed.
The act of insolvency
[8] The sheriff's return constituted an act of insolvency under s 8(b) of the Insolvency Act, and it
remains one. The passage of time does not cause such a return to cease establishing an act of
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insolvency. The application was served personally on the respondent, whose case throughout
has been that she cannot meet the amounts demanded of her. The age of the return is, however,
relevant to the exercise of the Court's discretion. I deal with it there.
[9] There have subsequently been material subsequent developments. Most importantly, the
judgment debt in respect of which execution was undertaken has since been paid. The applicant
accepts this in its heads of argument. The respondent has also continued to make payments to
the app licant and remains in salaried employment. The papers contain proof of recurring
payments of approximately R4 000 to R4 300 during 2025 and 2026. The March and June 2026
payment notifications each reflect R4 300. On the estate manager's own advice in August 2024,
the monthly levy contribution for the unit was R2 065. The recurring payments therefore exceed
the current monthly contribution by a substantial margin, leaving an excess available to reduce
accrued arrears. This payment history, however, is met by the submission that the respondent
does not pay enough towards the monthly levy contribution to satisfy the arrears and remain up
to date.
[10] The applicant relies on the increase in the respondent's levy-account balance as evidence that
her financial position has not materially improved. The amount is, however, composite: it
includes levy contributions, interest and substantial legal costs. The application was founded
on a judgment debt of R46 150.52. The arrears stood at R73 946.45 when the application was
launched during July 2023, and at R129 019.47 by May 2024. A final letter of demand dated 19
September 2025 reflected R203 122.42. In its heads of argument the applicant puts the arrears,
costs and interest at the hearing of the revival application at R243 410.39. The revival judgment
described the figure as being in the region of R205 000. Measured against a monthly levy of
described the figure as being in the region of R205 000. Measured against a monthly levy of
some R2 065, unpaid contributions alone cannot explain that increase. Counsel confirmed that
the outstanding amount contains untaxed legal costs and interest.
[11] Prescribed Management Rule 25(4) provides that a member is liable to a body corporate for all
reasonable legal costs and disbursements incurred in the recovery of arrear contributions, as
taxed or agreed by the member . In SS Glen High v Kruger NO 1 it was held that legal costs
already incurred by a body corporate, and therefore standing to be reimbursed to it, constitute
a liquidated amount which need not be taxed before it can be claimed. The Court there also
found that the member had agreed to rei mburse those costs, so that the requirement of
agreement was in any event satisfied. In Mannikin Close Body Corporate v Mrabalala 2 that
1 SS Glen High v Kruger NO (2023/055133) [2024] ZAGPJHC 1059 (10 September 2024) paras [30]-[32].
2 Mannikin Close Body Corporate v Mrabalala and Others (2024/118851) [2025] ZAGPJHC 959 (22 September
2025).
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reasoning was declined. It was held that to treat untaxed attorney invoices as liquidated debts
would expose owners to unverified and potentially inflated charges, and that taxation is an
important safeguard of reasonableness and proportionality where the owner has no visibility of
the work done. It is unnecessary for me to resolve that difference. What is material in this matter
is the manner in which the subsequent legal costs came to be reflected in this respondent's
running account.
[12] The costs incorporated in the September 2022 acknowledgment of debt were agreed within its
meaning. The respondent expressly acknowledged a composite indebtedness that included the
legal costs then incurred. The costs relevant to this judgment are different. They are substantial
legal expenses debited to the running levy account after that date.
[13] The statements show that untaxed legal costs were debited to the same running account as the
respondent's levy indebtedness. Interest was thereafter periodically debited as “Interest on
Arrears” against the running balance. The sequence and amounts indicat e that the interest
calculation included balances to which legal costs had already been added.
[14] Once the costs were incorporated into the running balance, they contributed to the base against
which further interest was calculated. Their inclusion therefore had a compounding effect on the
headline indebtedness.
[15] Before growth in the headline balance can reliably support an inference of continuing inability
to pay, the cause of that growth must be known. The account combines unpaid contributions,
interest and substantial legal costs in a single running balance. Whether or not some or all of
the costs are ultimately recoverable, the escalating composite balance cannot, without a proper
reconciliation, reliably measure either unpaid levy contributions or a deterioration in the
respondent's financial position.
respondent's financial position.
[16] The applicant further contends that the respondent preferred one creditor above another and
relies on s 8(c) of the Insolvency Act. Section 8(c) is concerned with a disposition of property
which has, or would have, the effect of prejudicing creditors or preferring one creditor above
another.3
[17] The factual basis advanced is principally that, while unable to meet all her obligations as they
fell due, the respondent incurred and serviced education -related debt and from time to time
applied her limited income to different obligations. That conduct m ay demonstrate financial
distress. Without more, it does not identify a particular disposition having the effect
3 Standard Bank of South Africa Ltd v Danie Thomas Boerdery CC (4535/2012, 4534/2012) [2013] ZAFSHC
32 (21 February 2013) at para [18].
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contemplated in s 8(c). The papers identify no payment or transfer that placed a particular
creditor in a demonstrably preferential position vis-a-vis the general body of creditors.
[18] Extinguishment of a preferred creditor's claim is not the legal test. A partial payment may, in an
appropriate case, have a preferential effect. In this matter, t he respondent's substantial and
recurring payments to the applicant itself militate against the broader contention that she
persistently preferred other creditors above the applicant.
[19] The applicant also relies on s 8(e), which concerns a debtor who makes or offers to make an
arrangement with any creditor for releasing her wholly or partially from her debts. The reliance
is based on the respondent's repeated attempts to arrange payment. An offer to pay a debt in
instalments is not an offer to be released from it, whether wholly or in part. The correspondence
discloses requests for a reconciled statement and a payment plan. Their tenor is an intention to
discharge the indebtedness, not to be released from any part of it. Her request that legal fees
and interest be removed from the levy account stands on the same footing. Section 8(e) is not
established.
[20] Section 8(g) concerns a debtor who gives written notice to any one of her creditors that she is
unable to pay any of her debts. The applicant relies on the respondent's written statements of
inability to pay. This ground has considerably more substance. In her affidavits and
correspondence the respondent stated in terms that she could not meet the amounts demanded
of her. It is unnecessary to decide whether a written statement of inability to pay a particular
disputed amount, coupled with an offer to pay a stipulated monthly sum, amounts to notice of
the general inability at which the section is directed. I am prepared to assume in the applicant's
favour that s 8(g) is established. The assumption does not affect the outcome. An act of
favour that s 8(g) is established. The assumption does not affect the outcome. An act of
insolvency under s 8(b) has in any event been established, and s 12(1)(b) is thereby satisfied.
[21] One further submission should be recorded. The applicant contends, correctly, that it may rely
on one or more acts of insolvency, including acts coming to its knowledge after commencement
of the proceedings. Nothing in this judgment denies that proposition . The difficulty is not that
the applicant is confined to the act pleaded at the outset. It is that the additional acts relied upon
are, on the evidence, either not established or immaterial to the outcome.
Factual insolvency
[22] The applicant also alleges factual insolvency. Actual insolvency requires that the debtor's
liabilities, fairly estimated, exceed her assets. An applicant need not establish the position in
rands and cents. It discharges the onus if the evidence justifies the inference, as a matter of
probability, that the respondent is insolvent, whereupon it falls to the respondent to show
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sufficient assets to meet her liabilities. An inability to meet current demands is not the same
thing. Commercial insolvency in that sense is a ground for winding up a company; it does not
establish the actual insolvency of a natural person. Here the evide nce goes no further than a
persistent failure to meet payment obligations. That indicates cash -flow difficulty rather than a
balance-sheet deficit, and the respondent owns immovable property of substantial value.
Factual insolvency is not established. Nothing, however, turns on that finding because s 12(1)(b)
is satisfied by the act of insolvency.
Advantage to creditors
[23] The applicant relies principally on the respondent's immovable property to indicate that there is
reason to believe that the respondent’s sequestration will be to the advantage of creditors. The
threshold is not a high one. It suffices that there is a reas onable prospect, not too remote, of
some not-negligible pecuniary benefit to the general body of creditors, or that an investigation
into the debtor's affairs may unearth assets which will benefit them.4
[24] The respondent owns Unit 179. The applicant holds no security in the conventional sense, but
a body corporate is not in the position of an ordinary unsecured creditor. The statutory embargo
on the issue of a clearance certificate operates as an effective preference upon transfer and is
not displaced because the sale occurs in execution or in the administration of an insolvent
estate. The papers disclose a mortgage bond over the unit, registered on 24 June 2016 in the
amount of R1 315 000, but no evidence of what, if anything, remains owing under it. The
applicant states that it does not know. That gap is not fatal. In the revival judgment Labuschagne
J recorded, taking judicial notice of property values within the scheme, that the amount
outstanding is but a fraction of the value of the respondent's property. I am satisfied that s
12(1)(c) is established.
The exercise of the discretion
12(1)(c) is established.
The exercise of the discretion
[25] The applicant has established a liquidated claim well above the statutory minimum, an act of
insolvency under s 8(b), and reason to believe that sequestration will be to the advantage of
creditors. The jurisdictional requirements of s 12(1) are satisfied. The remaining question is
whether the Court should nevertheless decline to grant the order.
[26] The judgment debt underlying the sheriff's return has been paid. The respondent commenced
making monthly payments exceeding her current levy contribution. She remains in salaried
employment. The indebtedness now asserted also includes a substantial legal component
4 Meskin & Co v Friedman 1948 (2) SA 555 (W) at 559.
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which the applicant's own management regarded as requiring separation and quantification
before the account could sensibly be discussed. None of these matters defeats a jurisdictional
requirement. Each bears on whether the order should be granted.
[27] Even where the requirements of s 12(1) are established, the Court retains a discretion whether
to grant a final order. The discretion is judicial and not at large. It has been described as a power
coupled with a duty. Absent special or unusual circumstances, the order should ordinarily follow,
and the respondent must establish circumstances warranting refusal. The respondent appeared
in person and did not frame her opposition in those terms. The material on which such
circumstances would rest is nevertheless squarely before me and must be considered. The
question is whether the circumstances are sufficiently special to justify refusing the order.
[28] In exercising that discretion, I attach considerable weight to the manner in which the
respondent's alleged indebtedness accumulated. The application was founded on a judgment
debt of R46 150.52. That debt has since been paid. The respondent thereafter con tinued to
make payments to the applicant, yet the amount presented as outstanding increased
substantially. The statements show that subsequent legal costs were debited to the running levy
account and that interest was thereafter calculated on balances including those costs.
[29] I have not overlooked the applicant's considerations. A body corporate has no source of income
other than its members' contributions. If one member does not pay, the shortfall is carried by
the remaining owners, who bear a default for which they are not re sponsible. The applicant
made the point squarely in argument and it is weighty. The courts have repeatedly recognised
the importance of effective recovery mechanisms for bodies corporate and the prejudice caused
to a scheme by delinquency in payment of con tributions. Nothing in this judgment diminishes
to a scheme by delinquency in payment of con tributions. Nothing in this judgment diminishes
that consideration or suggests any general reluctance to sequestrate a defaulting member.
[30] I am of the view, however, that sequestration should not follow because a running account has
increased where that increase is materially affected by legal charges whose quantum has not
been separately reconciled , and interest has then been calculated on the enlarged balance.
The effect is not limited to the addition of the legal charges. Once incorporated, they contributed
to the base on which further interest was calculated. The resulting compounding effect
materially weakens the inference that growth in the headline balance demonstrates a
corresponding deterioration in the respondent's financial position.
[31] This does not absolve the respondent from liability for levies properly raised, nor does it finally
determine what legal costs the applicant may recover from her. Those matters may be pursued
and quantified through the appropriate processes. The question h ere is whether the
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respondent's estate should now be sequestrated. In deciding that question, it would be unsafe
to treat the escalating composite balance, without more, as evidence of continuing insolvency.
[32] A further consideration points in the same direction. Sequestration brings about a concursus
creditorum for the benefit of the general body of creditors. It is not a mechanism for the collection
of a single creditor's deb t.5 On the papers before me , the applicant has not sought to execute
against the respondent's unit, an asset in respect of which it enjoys the protection of the
embargo described above. Where a creditor has available to it a less drastic route to satisfaction
of its claim and elects instead to seek the sequestration of a debtor, is a matter the Court is
entitled to weigh. I do not suggest that a creditor must exhaust every other remedy before
applying for sequestration. The ready availability of an obvious alternative nevertheless affects
the question of whether this drastic order should be granted in this case.
[33] Taken together with payment of the judgment debt underlying the sheriff's return, the
respondent's payment history, and the way the balance said to demonstrate deterioration has
been compiled, these considerations persuade me that final sequestration is not warranted.
Although the jurisdictional requirements of s 12(1) are satisfied, they justify declining the order
in the exercise of the discretion conferred by that section.
[34] The application must therefore be dismissed.
Costs
[35] Costs ordinarily follow the result, and the respondent has succeeded. She has, however,
appeared in person throughout and incurred no legal costs. Any award in her favour would
therefore be confined to disbursements, which were neither quantified nor sough t. There is a
further consideration. Each party will bear its own costs.
ORDER
In the result, the following order is made:
1. The application for the sequestration of the respondent's estate is dismissed.
1. The application for the sequestration of the respondent's estate is dismissed.
2. There is no order as to costs.
___________
E VAN DER SCHYFF
5 Standard Bank of South Africa Ltd v Danie Thomas Boerdery CC (4535/2012, 4534/2012) [2013] ZAFSHC
32 (21 February 2013) at para [15].
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JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
For the applicant: Adv J Vorster
Instructed by: Maree Attorneys Inc
For the respondent: In person
Date of the hearing: 11 August 2026
Date of judgment: 17 August 2026