REPUBLIC OF SOUTH AFRICA

SOUTH GAUTENG HIGH COURT
JOHANNESBURG

(1)	REPORTABLE: YES / NO
(2)	OF INTEREST TO OTHER JUDGES: YES/NO
(3)	REVISED. 

         ……………………..		………………………...
                   DATE			        SIGNATURE

Case Number: 37469/2012
in the matter between: 

KROG: VERNON BRIAN	Applicant
and
BOTES: MARY-ANN	Respondent

JUDGMENT

WEINER J:
[1]	In this application, the applicant has instituted action against the respondent under case number 36735/2012 for payment in the sum of R1 149 401.38 (“the action”). The claim relates to an alleged loan for the purchase of an immovable property. He also claims other amounts allegedly loaned and advanced to the respondent.

[2]	In the present application the applicant seeks, pending the determination of the action, to interdict the respondent from selling, alienating and/or encumbering the immovable property which is situated at 10 Harold Street, Sunnyrock, Primrose (“the Harold Street property”). In the alternative, the applicant seeks an order that the proceeds from the sale of the Harold Street property be retained in a trust account held by Anthony Wilton & Thinane Incorporated, the attorneys for the applicant, alternatively, with Beukes & Sonja Nel Attorneys, the attorneys for the respondent.

THE SURROUNDING CIRCUMSTANCES

[3]	The applicant submits that the amounts claimed are owing to him based on the following:

3.1.	the applicant and respondent became involved in a relationship in October 2008. The respondent was an escort but she informed the applicant that she no longer wanted to be an escort and was concerned for her daughter’s wellbeing. The applicant suggested that he would look after her and support her and would, in effect, become her only client to which the respondent agreed (“the arrangement”).

3.2.	After six to eight months, the respondent informed the applicant that she no longer wanted to remain at the property which she was renting in Primrose. The parties found a home, at 3 Eugenia Road, Wychwood, Primrose (“Eugenia Road property”). The applicant purchased it through a Close corporation, Savanna Plains Investments 17 CC (“the CC”), in which the applicant was the sole member.

3.3.	The purchase price for the Eugenia road property was R860 000.00 to which the respondent made no contribution.

3.4.	The respondent moved in and the arrangement continued as before.

3.5.	During 2010, the respondent felt that the area in which the Eugenia Road property was situated was becoming unsafe. 

3.6.	The applicant found the Harold Street property in an advertisement which was to the respondent’s liking and it was agreed that an offer would be put in for this property. 

3.7.	The respondent suggested that she would like to purchase the Harold Street property with the proceeds from an investment that would be maturing shortly. The applicant was asked to lend her the purchase price and transfer costs, totalling R1 149 401.38, to purchase the Harold Street property and the applicant agreed. 

3.8.	The offer to purchase was signed by the respondent on 22 November 2010 and the purchase consideration paid with the moneys loaned by the applicant. The Harold Street property was then registered in the respondent’s name. According to the applicant, he also loaned money to the respondent to purchase jewellery, a BMW X5 and a VW Caravelle motor vehicle. The respondent made no repayments to the applicants for these amounts advanced

3.9.	The arrangement between the applicant and the respondent came to an end during July 2012 and the respondent then moved out of the Harold Street Property. 

[4]	It came to the applicant’s attention in August 2012 that the respondent had placed the Harold Street property on the market with the intention to sell the property.

[5]	The respondent in her answering affidavit avers that the applicant is seeking an anti-dissipation interdict in that he wants to prevent her from dealing freely with her assets. She submits that his papers do not set out a clear case that she is indeed disposing of and liquidating her assets and doing so in such a manner that would intentionally defeat any alleged claim of the applicant. 

[6]	She denies that he has any right or justification in having the monies from the sale paid into a trust account.

[7]	The respondent deals with her other assets presumably in order to show that she has sufficient means to deal with her alleged debts. With regard to the motor vehicles, the respondent submits that the applicant has taken possession of the Caravelle and of a Kia motor vehicle, even though she submits that she is the owner of the Caravelle as she purchased same from him. She further submits that she is entitled to possession of the Kia as she purchased it through motor finance. She has not instituted proceedings against him for the delivery of the motor vehicles. These issues remain in dispute.

[8]	The respondent admits that the relationship came to an end in July 2012. She states this was as a result of the applicant’s aggressive attitude. She alleges assault and states that this led the respondent to seek a domestic violence interdict against the applicant. Applicant disputes the assault.

[9]	The respondent states that, on 23 July 2012, the applicant, through his employee, changed the locks and effectively dispossessed the respondent of the Harold Street property. This led to a spoliation application which returned possession to her. This was, according to the applicant, by consent.

[10]	The respondent denies that she is still an escort but rather is employed as a nail technician. She does not provide proof of her employment position and income. 

[11]	She sets out further in her answering affidavit that she used to earn in the region of R300 000.00 to R400 000.00 per month and from that income she purchased the Harold Street property. She does not provide bank statements or any other documentation in this regard.

[12]	She admits that the applicant did contribute to some of the costs of refurbishments but stated that the majority of the refurbishments were paid from her own savings.

[13]	As a result, she submits that there was never a loan agreement that was entered into and thus she has no obligation to repay the applicant.

[14]	The respondent agrees that she wishes to sell the property. This is so that she can use the proceeds from that sale to purchase another property that is unknown to the applicant so that we will cease harassing her. 

[15]	The respondent’s version as to the source of the monies to purchase both the Eugenia Road and Harold Street properties is a source of concern. In the founding affidavit in the domestic violence application, the respondent stated that she bought the Eugenia Road property with proceeds from an inheritance from her father. She was advised by the applicant that she should use the money from the proceeds of the sale of the Eugenia Road property to purchase the Harold Street property. However, in her answering affidavit in the present proceedings, she does not give any version as to how the Eugenia Road property was purchased but states that she purchased the Harold Street property with her income from being an escort. 

[16]	The applicant, points out that there is also a dispute between her affidavit in the domestic violence application and her answering affidavit in this application, in regard to both the finding of and the refurbishments of the Harold street property. In her answering affidavit herein, she avers that she alone sourced the property and paid for most of the refurbishments whereas in her domestic violence affidavit she makes no averment that she paid for these refurbishments. In fact, she states that the applicant found the property and refurbished it while she was away.

[17]	The issues in dispute are:

17.1.	who paid for the Eugenia Street property;
17.2.	if the applicant purchased, through his close corporation, the Eugenia Road property, did that property fund the purchase of the Harold Street property and if so;
17.3.	 does the respondent have the right to deal freely with the Harold Street property and;
17.4.	Is there an imminent threat of dissipation of the proceeds from any sale of the Harold street property by the respondent? I will deal with whether this issue needs to form part of Applicant’s case below.
The Purchase of the Eugenia Street property
[18]	The applicant has argued that he will show on a balance of probabilities in the action that the purchase price of the Eugenia Road property was indeed provided by the applicant through the close corporation in which he was the sole member. The applicant’s submission is that the respondent’s version is unreliable in that she alleges, in the founding affidavit of the domestic violence application that she paid for the property with proceeds from an inheritance from her father yet in her answering affidavit to the present application she does not give any version as to how the Eugenia Road property was purchased. Further, she provides no evidence of her paying a purchase price nor of any statements or other documents that show she did receive an inheritance that could have been used to purchase the property What is of relevance is that she allowed the property to be registered in the name of a close corporation wherein the applicant was the sole member.

[19]	The applicant attaches the deed of sale for the Eugenia Street property from which it appears that seller was Savanna Plains Investments 17 CC, the close corporation in which the applicant is the sole member. 

[20]	Prima facie, it appears that the Close corporation, in which the applicant was the sole member, was the purchaser and owner of the Eugenia Street property.

Did the proceeds from the Eugenia Street property fund the purchase of the Harold Street Property?

[21]	Whilst it is common cause that the respondent signed the offer to purchase the Harold Street Property, the issue in dispute is who funded the purchase the price?

[22]	The applicant submits that it was a loan to the respondent and that should she not repay it, the property would be sold and the proceeds used to settle her indebtedness to him.

[23]	The respondent’s version is that she paid the purchase price as is evidenced by the offer to purchase being signed by her, that the property is registered solely in her name and that she earned “vast sums of money” as an escort from which she paid the Harold street property purchase price.

[24]	In her founding affidavit in the domestic violence application, the respondent stated that she used the proceeds from the first house, that being the Eugenia Road property, to pay for the Harold Street property. 

Does the respondent have a right to deal freely with the Harold Street Property?

[25]	The applicant submits he has established a prima facie right to a portion of the proceeds of the Harold Street property to repay the loan of the purchase price and transfer fees. The applicant submits that this property is the only asset in the estate of the respondent that would effectively settle her indebtedness to him should he be able to execute against the property. His right to execution will only be available once it has been confirmed in the main action between the parties. 

[26]	The applicant submits further that he is indeed a creditor of the respondent through a loan agreement that specifically made provision for him to receive the proceeds from the sale of the Harold Street property if the purchase price was not repaid to the applicant. The respondent denies this in her answering affidavit and stated that a plea to this effect is to be filed in due course. 

[27]	The respondent has said that the applicant’s case is based on an anti-dissipation interdict, which would require him to show that the respondent is likely to spirit away the proceeds from a sale of the Harold Street property. In the case of Knox D’Arcy Ltd and others v Jamieson and others, Grosskopf JA discussed the nature and effect of the so-called anti dissipation interdict and found that what is required is for the applicant to show a certain state of mind of the respondent i.e. that the debtor is getting rid of funds or is likely to do so with intention of defeating the claims of creditors. Grosskopf JA goes on to say that this interdict is sought 

“by the petitioners… to prevent the respondents from concealing their assets. The petitioners do not claim any proprietary or quasi-proprietary right in these assets… it is not the usual case where its purpose is to preserve an asset which is in issue between the parties. Here the petitioners lay no claim to the assets in question.”

Grosskopf JA then turns to the effect of the interdict and finds that it is to “prevent the respondent from dealing with his own property to which the applicant lays no claim”

[28]	In my view, the applicant does not need to go that far. What he essentially seeks is an interim interdict to secure the proceeds of the sale pending the determination of his action, which directly involves the asset in question. It is not an interdict as envisaged in the Knox D’Arcy case.

[29]	In the Eriksen Motors (Welkom) Ltd. v. Protea Motors, Warrenton and Another Holmes JA set out the requisites for an interim interdict;

“…the Court’s approach in the matter of an interim interdict was lucidly laid down by Innes, J.A. in Setlogelo v Setlogelo, 1914 A.D. 221 at p.227. In general the requisites are- 
(a)	a right which, “though prima facie established, is open to some doubt”;
(b)	a well grounded apprehension of irreparable injury;
(c)	the absence of ordinary remedy. 
In exercising its discretion the Court weighs, inter alia, the prejudice to the applicant, if the interdict is withheld, against the prejudice to the respondent if it is granted. This is sometimes called the balance of convenience.”

[30]	In my view the applicant has established that:

30.1.	He has a prima facie case that he is entitled to the proceeds of the Harold Street property.

30.2.	He will suffer irreparable harm as the Harold Street property is the respondent’s only asset and his claim for damages in due course would be fruitless. The respondent averred that she is now working but led no evidence as to what her earnings are and whether they could satisfactorily settle her prima facie indebtedness to the applicant. 

30.3.	The applicant also has no other satisfactory remedy against the respondent. In the respondent’s answer to this application, she has not set out any other property or any proof of her earnings that could provide solace to the applicant that his claim in the main action will not amount to nothing. Without an order interdicting the proceeds of the Harold Street property, the applicant will be left with little tangible options to protect his rights and interests.

30.4.	The balance of convenience favours the applicant. The applicant avers that to the best of his knowledge the Harold Street property is being rented out. He further alleges that the respondent is living with her new partner. The respondent however, says the property is to be sold because she does not want to the applicant to know where she lives as he has a habit of assaulting her and that she does not wish to “retain the memories associated with that property”. I have to balance the applicant’s need to have certainty that his claim in the main action will not amount to nought against the respondent’s need to distance herself from the applicant. She withdrew the domestic violence application and if the property is sold, she will have achieved what she sought, even if the proceeds are interdicted.

[31]	In the circumstances, I find that the applicant has set out a prima facie case that the proceeds of the sale should, in the interim, be interdicted until the main action has been resolved and the ownership of the Harold Street property and the entitlement to the proceeds thereof is determined by the trial judge. As such I make the following order;

1.	Upon the sale of the property situate at 10 Harold Street, Sunnyrock, Primrose, the net proceeds are to be paid to the Applicant’s attorneys, Anthony Wilton, Thinane Incorporated to be held in trust, pending the determination of the action under case number 36735/2012.

2.	Costs are to be costs in the cause of the main action. 

SE WEINER

JUDGE OF THE HIGH COURT

Counsel for the Plaintiff:		Adv. H.H. Cowley
Applicant’s Attorneys:		Anthony Wilton, Thinane Inc

Counsel for the Defendant:		Adv. J.W. Kloek
Defendant’s Attorneys:		Beukes & Sonja Nel Attorneys

Date of Hearing:			13 February 2013
Date of Judgment:			06 March 2013