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[2011] ZAWCHC 395
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Itzeck Incorporated v Schulz (25477/2010) [2011] ZAWCHC 395 (25 August 2011)
REPORTABLE
COVERSHEET
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(CAPE OF GOOD
HOPE PROVINCIAL DIVISION)
CASE
NO.: 25477/2010
In the matter
between:
ITZECK
INCORPORATED
…...............................................................................................
Applicant
(Registration
No: 2000/025619/21)
and
MARTIN
SCHULZ
…............................................................................................................
Respondent
Identity
No : Unknown
Born
on : Unknown
Marital
status: Married to Cathrine Schultz I.D. No.
Judgment by: N Saba,
AJ
For the Applicant:
Adv. T Smit
Instructed by:
Itzeck Incorporated
For the First
Respondent: Adv. D van Reenen
Instructed by:
Scheibert & Associates
Date(s) of Hearing:
08 June 2011
Judgment delivered
on: 25 August 2011
REPORTABLE
Republic
of South Africa
IN THE HIGH
COURT OF SOUTH AFRICA (WESTERN CAPE HIGH COURT, CAPE TOWN)
Case No:
25477/10
In the matter
between:
ITTZECK
INCORPORATED
….............................................................................................
Applicant
and
MARTIN
SCHULZ
…............................................................................................................
Respondent
JUDGMENT:
THURSDAY, 25 AUGUST 2011
SABA, AJ
[1] This is an
application for a provisional sequestration of the respondent on the
ground that he has committed an act of insolvency
as defined in
section 8(b)
of the
Insolvency Act 24 of 1936
as amended ("the
Act").
Section 8
(b) reads:
"A debtor
commits an act of insolvency - if a court has given judgment against
him and he fails, upon the demand of the officer
whose duty it is to
execute that judgment, to satisfy it or to indicate to that officer
disposable property sufficient to satisfy
it, or if it appears from
the return made by that officer that he has not found sufficient
disposable property to satisfy the
judgment".
[2] The following
is a brief summary of the grounds upon which the respondent opposes
this application:
(a)
The debt which is the subject matter of this application was paid in
full on 8 December 2010, therefore, the applicant is
no longer a
creditor of the respondent and does not have
locus
standi
to
bring this application.
(b) Having him
sequestrated would not benefit the creditors as he does not have any
creditors.
(c)
The return of service by the Sheriff is not one of
nulla
bona
[3] The facts
giving rise to this application are briefly as follows: On 3 June
2009 the applicant obtained judgment against the
respondent in Cape
Town Magistrate's Court for an amount of R3, 830-97, interest
thereon at 15.5% from 25 March 2008 and costs
(since taxed at R7,
095.08). On 17 June 2010 the applicant issued a warrant of execution
in the amount of R12, 528.99 against
the movable property of the
respondent. The Sheriff was instructed to execute the writ against
the movable property of the respondent.
On 15 September 2010 the
Sheriff served the warrant of execution at the address located by a
tracing agent. The Sheriff's return
reads as follows:
"Return in
accordance with the provisions of the Magistrate's Court Act 32 of
1944, as amended
On
this 15
th
day
of September 2010 at 10:50 I served the Warrant of Execution against
Property in this matter upon MARTIN SCHULTZ personally
at SUITE 503
STUDIOS, 53 ROSE STREET, CAPE TOWN by handing to the abovementioned
a copy thereof after explaining the nature and
exigency of the said
process, RULE 9 (3) (a) / RULE 64 (3). Further it is hereby
certified that the amount of 12528.99 in satisfaction
of this
warrant has been demanded from MARTIN SCHULTZ.
However, HE
informed me that HE has no money or negotiable property inter alia,
wherewith to satisfy the said warrant or a portion
thereof. Except
property exempted by law in terms of Section 67 of Act 32 of 1944,
as amended, no movable property/disposable
property or assets were
either pointed out, or could be found by me after a diligent search
and enquiry at the given address.
Therefore my return is one of
NULLA BONA.
It is hereby
further certified that MARTIN SCHULTZ has been requested in terms of
section 66 (8) to declare whether HE has any
immovable property
which is executable on which the following answer had been
furnished: "DEFENDANT OWNS NO IMMOVABLE PROPERTY<
DEFENDANT
OWNS PROPERTY AND ASSETS IN KENYA< NGOVE ROAD< SASSON
CRESCENT< MALINDE< GERMAN CITIZEN ID PASSPORT NUMBER:
C48868HRT, Tel: 0827804339 UNEMPLOYED-RETIRED."
[4] It is not in
dispute that after numerous attempts by the respondent to settle the
debt, the respondent transferred a sum of
R12, 528, 99 into the
applicant's bank account on 8 December 2010. This was after the
applicant had brought this application
for the provisional
sequestration of the respondent but before the hearing of the
application.
[5]
In his opposing affidavit the respondent does not dispute the
contents of the Sheriffs return but contends that it is not
one of
nulla
bona.
In
S
v
Van Vuuren v Jansen
1977 (3) SA 1062
it
was stated that a debtor has an onus to show by the clearest and
most satisfactory evidence that the return was impeachable.
The
respondent further contends, in his opposing affidavit, that the
Sheriff did not inform him what constitutes 'immovable property'
and
he thought the word 'immovable property' relates to residential or
commercial property. That had he been informed clearly
what the word
'immovable property' entails, he would have disclosed that he has
parking bays which are not bonded and are in
Cape Town. In support
of this averment, he attached a copy of a deeds search ('MS2'),
showing a new transfer of properties 1
to 10 referred to in the
document as 'exclusive use area'. This document was printed on 19
February 2010. Counsel for the applicant
argued that this document
should be disregarded as it is not an updated document and as such;
no one can confirm that the respondent
still owns the said parking
bays. I agree with counsel for the applicant that I cannot attach
any value to this document ('MS2')
because between February 2010 and
the date this application was launched, the respondent might have
disposed of the parking bays
mentioned therein. In my view 'MS2'
does not prove the facts it seeks to establish.
[6]
I am also not persuaded by the respondents' contention that he was
not informed what 'immovable property' means. Had the respondent
wanted to inform the Sheriff that he has parking bays which are not
bonded in Cape Town, he could have done so even if he did
not
understand the meaning of the words 'immovable property'. In my
view, the legal consequence of the facts mentioned in the
Sheriff's
return is one of
nulla
bona.
[7]
Counsel
for the respondent submitted that the applicant lacks
locus
standi
to
bring this application because payment of the debt was made on 8
December 2010. In support of this submission, the counsel
referred
to the case of
Ex
Parte Bruce
1956 (1) SA 482.
This
case is authority for the proposition that the petitioner loses his
status as the creditor if he accepts the payment made
before the
final order is granted. Counsel for the applicant argued that
Ex
parte Bruce
mentioned
supra is distinguishable from the present matter as in that matter
there was no
nulla
bona
return
and the amount paid was accepted by the applicant, unlike in this
present matter where the money has not been accepted.
In my view at
the time of bringing this application, applicant had
locus
standi
to
do so because payment had not been made. The question is whether the
applicant can still persist with the application after
payment had
been made.
[8]
I turn now to deal with the contention regarding the effect the
payment made by the respondent subsequent to this launch of
this
application has, as well as the
locus
standi
of
the applicant as a creditor.
[9]
Counsel for the applicant argued that the applicant did not accept
the money transferred to the applicant's trust account
but it merely
retained it pending the outcome of the sequestration application. In
response thereto Counsel for the respondent
argued that the basis
upon which applicant kept the money was not communicated to him and
as far as he was concerned, he was
entitled to take the position
that the money was accepted by the applicant. In this regard, it is
appropriate to refer to what
Miller JA said regarding 'silence as
acceptance' in
McWilliams
v First Consolidated Holdings (Pty) Ltd
1982 (2) SA 1
(A) at 10D- G:
"I accept
that 'quiescence is not necessarily acquiescence' (see Collen v
Rietfontein Engineering Works
1948 (1) SA 413
(A) at 422) and that a
party's failure to reply to a letter asserting the existence of an
obligation owed by such a party to
the writer does not always
justify an inference that the assertion was accepted as the truth.
But in general, when according
to ordinary commercial practice and
human expectation firm repudiation of such an assertion would be the
norm if it was not accepted
as correct, such party's silence and
inaction, unless satisfactorily explained, may be taken to
constitute an admission by him
of the truth of the assertion, or at
least will be an important factor telling against him in the
assessment of the probabilities
and in the final determination of
the dispute. And an adverse inference will the more readily be drawn
when the unchallenged
assertion had been preceded by correspondence
or negotiations between the parties relative to the subject-matter
of the assertion".
Having regard to
the principle enunciated in this case, I fully agree with the
submission made by the counsel for the respondent
that the applicant
should have returned the money to the respondent and clearly stated
that it was not accepting it. By keeping
quiet, applicant gave an
impression that the payment was accepted. The submission by Counsel
for the applicant that the respondent's
tendering of payment
indicated that he preferred one creditor above the others is
rejected because it has no factual basis.
[10]
Counsel for the respondent also referred me to a passage in
Hammel
v Radiocity Contact Centre CC (13778/2008)
[2008] ZAWCHC 76
(12
December 2006,) a
judgment
of Dlodlo J of this division, where the following was stated:
"/ agree
with Mr Miller that upon receipt of the payment which constituted
the reason for the application, the applicant
had three (3) choices
open to him, namely: Firstly, the applicant could either have
persisted with the application for purposes
of recovering the costs
it had incurred in bringing the application. In this category, the
applicant's principal argument would
have been that despite having
received payment after the launching of the application, he was
nevertheless justified in launching
the application and was
therefore entitled to his costs. Secondly, the applicant could
tender to withdraw the application on
the basis that each party pays
their own legal costs incurred up to that time. Thirdly and lastly,
the applicant could have tendered
to withdraw the application on the
basis that he pays the respondent's costs incurred up to that time".
I fully endorse the
sentiments of Dlodlo J and in the circumstances I am of view that
the choices mentioned above are the choices
that were open to the
applicant in the present matter after the payment of the debt in
full by the respondent.
[11]
Section
10
of
the Act reads as follows: — If the court to which the petition
for the sequestration of the estate of a debtor has been
presented
is of the opinion that
prima
facie------
(a) the
petitioning creditor has established against the debtor a claim such
as is mentioned in subsection (1) of section nine;
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 the creditors
of the debtor if his estate is sequestrated,
It
may
make
an order sequestrating the estate of the debtor provisionally.
In
Julie
Whyte Dresses (Pty) Ltd v Whitehead
(3)
SA 218 (D) at 219A-B, Muller J said the following:
"It is
clear that
section 10
of the
Insolvency Act vests
the Court with a
discretion to be exercised judicially upon a consideration of all
the facts and circumstances of the case. In
proper circumstances the
Court may refuse to make a provisional sequestration order, although
all the requirements of
section 10
have been prima facie established
by the petitioner. This must be so in view of the serious
consequences that flow from the making
of a provisional
sequestration order".
In my view, the
present matter is a kind of matter that calls for the exercise of
discretion in favour of the respondent.
[12] To sum up, I
am not satisfied that after receiving payment, the applicant
retained his status as a creditor of the respondent.
I also reject
the contention by the applicant that he did not accept the payment
which was made by the respondent. The basis
upon which the applicant
dealt with the payment was never communicated to the respondent and
in my view the respondent was entitled
to take the position that it
was no longer indebted to the applicant.
[13] In the result,
I make the following order:
(1) The application
for a provisional sequestration order against the respondent is
dismissed;
(2) Respondent is
to pay the costs of this application up to the date of payment
(which is 8 December 2010);
(3) Applicant is to
pay the respondent's costs of opposing this application from 9
December 2010 to date.
N
SABA
Acting
Judge of the High Court