IN THE HIGH COURT OF SOUTH AFRICA
(CAPE OF GOOD HOPE PROVINCIAL DIVISION)

JUDGMENT

GAUNTLETT. A J:

fn this matter, the applicant seeks a provisional order of sequestration against the first respondent. The applicant is an attorney practising at Somerset West. The first respondent is a businessman currently married to the second respondent, against whom no order was sought. The respondents are married out of community of property; there are pending divorce proceedings between them.

As regards urgency, my reasons for not sustaining the objection are these. The position is that this application was evidently launched on 3 November 2008, and was due initially to be heard on 10 November 2008. On that date, at the instance of the first respondent himself - a factor not without significance in a respect to which I shall later advert - the application was postponed until today (20 November 2008). The position today before me is that full papers have been filed on both sides, and there is no application (understandably in the circumstances) that the matter stand down for the filing of further affidavits. The parties have, quite properly in the circumstances, elected to argue this application for a provisional order on the papers as they stand.

In the present case urgency, as Mr Kulenkampff for the applicant pointed out, is in any event indicated by a number of transactions such as those indicated in the answering affidavit at page 51 paragraphs 21.8 and 21.15. These are indicative of dispositions having taken place.

Accordingly, there is in my judgment no proper basis to seek to suggest that the matter be struck from the roll for a lack of urgency.

Insolvency Act, 24 of 1936 (as amended)). The applicant contends namely that the first respondent has committed an act of insolvency in this regard. There was some attempt on the papers to suggest that the return of service on which this particular claim relies does not constitute a return of service as envisaged in section 8(b) of the Insolvency Act. The argument was not pressed in oral debate this morning, and it seems to me that this was for good reason. I can see no basis whatsoever for contending that there is no act of insolvency committed as alleged in this first respect.

The third ground of insolvency relied upon entails section 8{c) of the affidavit. This fastens upon paragraph 21 of the answering affidavit, where the first respondent from his own mouth alleges that creditors with claims against him for payment of a sum of R99 898,79 "were taken over by Peregrine Meats, who have undertaken to effect payment".

I agree with Mr Kulenkampff that the inference is inescapable at this stage that Peregrine Meats would not have taken over this counter-obligation and view it only with a Christmas spirit. There would have to have been some counter-prestation. It would seem to follow in my view that the first respondent at the very least has sought to make a disposition of his property (in the form of the counter-performance to Peregrine Meats), which would have the effect of prejudicing his creditors or preferring creditors who now will be settled by Peregrine Meats.

As against this the first respondent asserts assets with a value of R37 997,56. But this, as has been pointed out, must be added to the value of the rights to the trading name "Hunters Choice" which, as Mr Kulenkampff has observed, Is clearly not of inconsiderable value inasmuch as it was part of an arrangement to procure the release from an obligation of R500 000,00. In addition there is the admission by the first respondent that he owns firearms and a crossbow evidently of not insignificant value and that he had to claim for about R80 000,00 against Peregrine. The first respondent in addition alleges that he has a claim against the second respondent in respect of the accrual, but inasmuch as those proceedings are both pending and imminent, a matter to which I shall refer again shortly in a slightly different context, it is not necessary to take that into account.

So for these reasons, it seems to me that a case is made out (on the test applicable at this stage) that the liabilities of the first respondent exceed his assets.

I turn now to consider whether in the circumstances a benefit to creditors has been demonstrated. En this regard, it is evident to me that the assets listed in paragraph 20 of the founding affidavit, to the sum of R37 997,56, first of all can be realised and be to the benefit of creditors. In addition there is the claim against Peregrine Meats in the sum of R80 000,00 to which I have referred, which can also be realised. There is furthermore the question of the release from Peregrine Meats and the sum of R99 898,79 presenting itself as an amount which potentially can be reclaimed and realised for the benefits of the first respondent's creditors in terms of the provisions relating to undue preference and dispositions.

In short, it seems that one is at this stage considering that an overall position appears to be established of cfaims of the order of R800 000,00 against the first respondent with assets which may be of the order of R500 000,00. Whether these amounts are exact, it seems to me, need not be further debated at this stage, given the relatively clear position regarding those assets and liabilities to which I have already made reference, and which establish a benefit to creditors.

I turn finally to the question of an abuse of proceedings. As Mr Robertson for the applicant pointed out to me this terminology is used in paragraph 13 of the opposing affidavit. The exact formulation which the first respondent had in mind, however, is not consistent: it straddles various references to motive,  a  sham and  a  general  strategy of pursuing this application now in the immediate advance of the scheduling of the divorce proceedings. It is stressed in this regard that this application was launched on 3 November and the coincidence of this date and that relating to the divorce proceedings rs a matter which has been stressed in oral argument and which I have taken into consideration.

It seems to me that the matter, however, is disposed of in two ways. First of all, as Mr Kulenkampff pointed out in reply, the factual sub-stratum for the contention of an abuse and an object to pursue these proceedings for an improper purpose is not readily supported by conduct in relation to the securing of the hearing. As I already noted, while it was launched on 3 November, and was initially due to be heard on 10 November, even prior to the filing of the answering affidavit in this matter the applicant readily agreed to the postponement of this matter to 20 November 2008. It seems to me entirely correct to state, as he does (record page 111, para 18.S):

"I state the obvious to emphasise that within the timeframe applicable, it was simply not possible to engineer the result claimed by the first respondent and that I made no endeavour to do so. On the contrary E readily agreed to a postponement beyond 14 November 2008."

"...the answer in my judgment is that he was determined to sequestrate respondents estate, not for the purpose of obtaining payment of his debt, but for the purpose of preventing the respondent from obtaining payment of his claims against the appellant's son. Thus the appellant deliberately abused the process of the court, for I have no doubt whatsoever that he must have known all about the position between is son and the respondent...".

"The real motive of SARS was plainly to collect VAT. No acceptable basis was advanced for impugning this."

For these reasons I am satisfied that a proper order has been made out for a provisional order of sequestration. I intend to grant an order in the usual terms regarding service { unless there is anything that the counsel on either side wishes to say to me in that regard), and furthermore that it be returnable on, if somebody has a diary, I think Tuesday, 26 January is a court day .

COURT:   Yes.

I see, Mr Camptor (?), you are there clutching papers, is there a particular matter you wanted an order to be made in?

The Court will now adjourn.