REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA

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

     ______________________	______________________
     DATE			        	SIGNATURE

                                               

Case No:  66282/18
20/6/2019

In the matter between:	

SA RETAIL PROPERTIES (PTY) LTD			           		APPLICANT

and

NICOLA ENGLEZAKIS				             		      RESPONDENT

JUDGMENT

G JACOBS (AJ)
[1]	In this Application the Applicant seeks an order:
	
	“That the estate of the Respondent is placed under provisional sequestration.”

[2]	The Respondent is further called upon to advance reasons on a return date 	(which have since passed, as this Application was opposed by the Respondent) 	why the Court should not order the final sequestration of his estate.

[3]	The Respondent opposed the Application and also moved that certain allegations 	in the Founding Affidavit be struck on the grounds of hearsay. I will deal with the 	the Respondent’s opposition to the relief the Applicant seeks, infra.
[4]	Respondent did not file Heads of Argument and a Practice Note, in accordance 	with the Practice Directive of this Court. The Application was duly set down by 	the Applicant on the opposed roll for the week of 3 June 2019 and was allocated 	(in the week preceding 3 June 2019) for argument on 4 June 2019. On 4 June 	2019 Counsel on behalf of the Respondent, Advocate T Lipshitz requested the 	Court to accept a Practice Note and Heads of Argument from the bar. In order to 	avoid a further delay in the hearing of the matter I asked Advocate GT 	Avvakoumides, who appeared on behalf of the Applicant, if he had any objection. 	No objection 	was raised and I stood the matter down to be argued on 5 June 	2019 and for me to consider the Heads of Argument filed on behalf of 	Respondent. As a result of the aforesaid, the Respondent is liable for the wasted 	costs of 4 June 2019, notwithstanding the outcome of this Application.

[5]	The Application to strike was not persisted with neither in the Heads of Argument 	nor in Argument before this Court.

[6]	The Applicant’s locus standi to bring the Application is based on a “Deed of 	Settlement, Acknowledgement of Debt, and Court Order”, incorporated in a Court 	Order by Prinsloo J, on 6 June 2017 (hereinafter the “June 2019 Order”).

[7]	The relevant part of the June 2017 Order, for purpose of this Application reads as 	follows:

“2.

	On the Applicant’s version, the Respondents are indebted to the Applicant in the 	sum of R2 187 548.27 … [not relevant] … in accordance with the attached 	annexure marked Annexure “A”.

3.

	The Respondents will within 30 days, provide the Applicant with their calculations 	of arrears due and owing by the First Respondent in order that the quantum 	thereof be agreed within the aforementioned 30 day period.

4.

	Should the Respondents fail to do so within the aforementioned period of 30 	days, then it shall be accepted by the parties that the quantum is as set out in 	Annexure “A” hereto.”

[8]	The June 2017 Order, in paragraph 5 and 6 thereof, undertook to make certain 	interim payments, in liquidation of the First Respondent’s (in that Application) 	indebtedness to the Applicant, and payment of future rental on due date. The 	current Respondent was the Second Respondent in that Application. These 	paragraphs (5 and 6) were the subject of an urgent application on 9 March 2018 	(Case No.: 57082/2016) before Tuchten J and is also the subject of a pending 	action in Case No.: 38530/17 in this Court.

[9]	In the pending action in Case No.: 38530/17, the indebtedness, as acknowledged 	by the Respondent and set out in paragraph 11 supra, is not challenged, nor has 	that order (the June 2017 Order) been varied or rescinded. Even if certain 	payments (as Respondent alleges) should have been allocated to the amount of 	R2 187 548.27, the Applicant has shown on the papers that the Respondent is 	indebted to the Applicant, as provided for in Section 9(1) of the Insolvency Act 	(Act 24 of 1936). In this regard see: (as to a disputed claim) Braithwaite v 	Gilbert (Volkskas Bpk Intervening) 1984 (4) SA 717 (W). Therefore, the 	Applicant has the necessary locus standi to ask for the relief it seeks.

[10]	The Applicant further has to either:

	10.1	Show that the Respondent is insolvent; or

	10.2	Show that the Respondent has committed an act of insolvency as defined 			in Section 8 of the Insolvency Act.

[11]	In my view the Respondent, in the Opposing Affidavit, by (and referring to 	paragraph 14 of the Founding Affidavit) not dealing with the alleged indebtedness 	to the Applicant (and other creditors) and stating: 

	“43.	The total alleged liability on the Applicant’s papers amounting to R10 149 			062.89 … and

	44.	The Applicant has reflected no value in my sequestration.”

	Admitted that he is actually insolvent. Therefore, the debate as to whether 	Applicant has complied with Section 10(b) of the Insolvency Act should stop here.

[12]	In the event that I am wrong in the fining that Respondent is insolvent, (or 	admitted that he at least by implication admitted same) I am of the view that 	Respondent 	did commit an act of insolvency, as envisaged in Section 8(b) of the 	Act. The reasons therefore, the following:

	12.1	The alleged hearsay argument have been abandoned.

	12.2	The fact that Applicant relies on a nulla bona return of another creditor is 			of no consequence. See: Abel v Strauss 1973 (2) SA 611(W) at 612 and 			613. See further: Kerbell v Chames 1925 WLD 72 at 75.

	12.3	The allegation of the Respondent that the nulla bona return reflects an 			address other than the Respondent’s place of residence or his place of 			business, also does not assist the Respondent. See: Beira v Raphaely-			Weiner and Others 1997(4) SA 332 (SCA) at 338.

	12.4	The Sheriff’s allegations in the return of nulla bona is prima facie proof of 			the allegations therein. See: Van Vuuren v Jansen 1977 (3) SA 1062 (T) 			and De Wet v Le Riche 2000 (3) SA 1118 (T).
[13]	Therefore, the Applicant has, in my view, complied with Section 10(b) of the 	Insolvency Act.

[14]	The last question that remains is whether the Applicant has shown that there is a 	reason to believe that it will be to the advantage of Respondent’s creditors if his 	estate is sequestrated (See Section 10 (c) of the Insolvency Act).

[15]	In this regard the Applicant has to show at the stage when it seeks the 	provisional sequestration of the Respondent, prima facie that there is reason to 	believe that it (the sequestration) will be to the advantage of creditors. See: 	Amod v Khan 1947(2) SA 432 (N) at 437 as well as Nescum & Co. v 	Freedman 1948 (2) SA 555 (W) at 558.

[16]	The words, “reason to believe” was dealt with in Commissioner, SARS v Hawker 	Aviation Partnerships and Others 2006 (4) SA 292 (SCA) at paragraph [29] …
	
	“The answer seems to lie in those decisions that have held that a court need not 	to be satisfied that there will be an advantage to creditors in the sense of 	immediate financial benefit. The court need be satisfied only that there is reason 	to believe – not necessarily a likelihood, but a prospect not too remote – that as a 	result of investigation and inquiry assets might be unearthed that will benefit 	creditors.”

[17]	In the present case it is undisputed:
	17.1	That there is a trust “Nicola Englezakis Trust (IT14302/06) (hereinafter 			“the Trust”) who owns an immovable property at 33 Peacanwood Estate, 			Hartbeespoort. The Respondent is a Trustee of the Trust as alleged by 			himself, in “Annexure “N” to his Replying Affidavit. This house (33 				Peacanwood) is not where the Respondent allege he resides (24 Fairway 			View, Peacanwood). The latter is his personal property (See paragraph 			17.2 infra).

	17.2	The Respondent is the owner of two immovable properties, Erf 687 				Bryanston and Erf 426 Peacanwood Extension 7. (See paragraph 7.1 of 			the Founding Affidavit read with Annexure “K” thereto). This allegation is 			met with the following reply (see paragraph 37 and 38 of the Opposing 			Affidavit – replying to paragraph 6.10 to 7.6, 9, 10 and 13 of the Founding 			Affidavit):

		“37.	The allegations contained in these paragraphs are not pertinent to 				this matter and we dealt with above,
			[nothing was said with regards to the properties]

		38.	Ms Koning and the Applicant have no personal knowledge of the 				dealings between Hyprop, NFGR and I. This evidence amounts to 				hearsay.” [my comment]

		As the hearsay allegation was not persisted with this does not dispute the 			factual allegation made by the Applicant. Respondent further admits that 			he has two outstanding bonds. (See paragraph 42.1 of the Answering 			Affidavit and Annexure “NE7” thereto).

	17.3	The Respondent is a businessman and Director of at least Coalmans 			Steak Ranch (PTY) Ltd and NFGR Investments (Pty) Ltd.

[18]	The Respondent does not deal with his financial position at all. The values of the 	properties in his name is not disclosed. His interest in the business and the Trust 	are not disclosed, nor does he even attempt to take the Court in his confidence 	and set out his financial position. From this a negative inference can and should 	be drawn.

[19]	The Western Cape High Court in an unreported judgment [Bozalek J], 9 	October 2013 in Vincemus Finance (Pty) Ltd t/a Kempston Finance v DH 	Kaye and B Kaye (Case No.: 20498/2012) dealt with how the Court should 	approach the question of benefit to creditors, inter alia where Trusts are involved.

[20]	Taking into account all the facts of the present case and applying the principles 	set out above, I am of the view that the Applicant satisfied this Court that prima 	facie there is a reason to believe that there will be advantage to creditors, if the 	estate of the Respondent is sequestrated.

[21]	This leaves only the question of costs and the return date for the provisional 	order. A new return date has been obtained by Counsel on behalf of the 	Applicant and included in a draft order handed to me. The costs, of the 	Application, in my view, should be costs in the sequestration, both appearances 	on 4 and 5 June 2019 inclusive.

[22]	In the premises, the following is ordered:

	22.1	The Respondent’s estate is provisionally sequestrated and placed in the 			hands of the Master of the High Court.

	22.2	A rule nisi is hereby issued, returnable on 17 September 2019 at 10h00 or 		as soon thereafter as Counsel may be heard, calling upon the Respondent 		to advance reasons, if any, why the Court should not order final 				sequestration of the said estate.

	22.3	A copy of this order shall be served upon the Master of the High Court, the 		South African Revenue Services and shall be advertised once in the 			Government Gazette and once in the Pretoria News.

	22.4	Costs of the Application shall be costs in the sequestration. These costs 			shall include the costs of the appearances on 4 and 5 June 2019.

__________________________________
G JACOBS
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA

APPEARANCES:

For the plaintiff:		Adv GT Avvakoumides (SC)
			Instructed by Mark Efstratio Attorneys
			PRETORIA

For the defendant:	Adv T Lipshitz
			Instructed by Manong Badenhorst Attorneys
			JOHANNESBURG