IN THE HIGH COURT OF SOUTH AFRICA 

						REPORTABLE

					CASE NO. 19940/2009

In the matter between:
FIRST RAND BANK LIMITED			APPLICANT

And

Coram						DLODLO, J 
Judgment by					DLODLO, J 

				3rd Floor, ABSA Building 
				132 Adderley Street 
				CAPE TOWN 
				8001
				Ref. A.Human 

For the Respondents			ADV. JC MARAIS

				C/o Heyns & Partners 
				50 Keerom Street 
				CAPE TOWN 
				8001
				Ref. PF Theron

Date(s) of Hearing				 10 MAY 2010
Judgment delivered on				01 JUNE 2010

IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)
										REPORTABLE
										CASE NO. 19940/2009

In the matter between:
FIRST RAND BANK LIMITED					APPLICANT

And

JUDGMENT DELIVERED ON TUESDAY, 01 JUNE 2010 
DLODLO, J
[1] This is an opposed application for the sequestration of the Trust. The Applicant is Firstrand Bank Limited, a company with limited liability duly incorporated in accordance with the company laws of the Republic of South Africa and having its registered address at 2 First Place, Bank City, Simmon Street, Johannesburg. The latter company is trading as First National Bank of Southern Africa Limited. The First Respondent is Jan Johannes Calitz N.O. in his capacity as trustee for the time being of the Jan Johannes Calitz Family Trust residing at 3 Draai Avenue, Stellenbosch, 7600. The Second Respondent is Johannes Petrus Marais N.O. in his capacity as trustee for the time being of the Jan Johannes Calitz Family Trust residing at 3 Culemborg Crescent, The Boord, Stellenbosch, 7600. Jan Johannes
Caliph Family Trust is duly incorporated in terms of the Trust Property Control Act 57 of 1988. Messrs Olivier and Marais appeared on behalf of the Applicant and the Respondent Family Trust respectively.

[2] It is common cause that the Respondents are indebted to the Applicant in the amount of Fourteen Million One Hundred and Thirty Three Thousand One Hundred and Twenty Five Rand and seventeen cents (R14 133 125.17) as at 2 August 2009 together with interest thereon at prime per annum compounded monthly and calculated from 3 August 2009 to date of payment. This is in respect of monies lent and advanced to The Dunes Partnership at its special instance and request in respect of a commercial property finance loan facility entered into between the Applicant and the Partnership on 26 April 2007. The Applicant is the holder of security in the nature of personal suretyship limited to certain amounts by Deon Van Wyk and Johannes Calitz as well as covering sectional title bonds in the cumulative amount of Fifteen Million Rand (R15 000 000.00) over certain merits of the sectional schemes.

BACKGROUND
[3] On or about 26 April 2007 and at Bellville the Applicant and the Partnership entered into a commercial Property Finance Loan Agreement. The Dunes Partnership consisted of a joint venture between the Respondents and one Deon Van Wyk Familietrust to develop Portion 9 of the farm Matjiesfontein No. 304, Plettenberg Bay as a sectional title development. It is common cause that the development was registered as the Sectional Scheme, The Dunes. In terms of the loan agreement:
(a)	The Applicant advanced Fifteen Million Rand (R15 000 000.00) to the Partnership to be repaid over a period of one hundred and twenty (120) months with an initial instalment of Two Hundred and Twelve Thousand Six Hundred and Fifteen Rand (R 212 615.00).
(b)	
(c)	The Partnership's failure to make punctual payment in terms of the Agreement and to remedy such failure within seven (7) days of Notice having been given to do so, will result in interest being calculated on the outstanding balance on the Standard Default Penalty Rate.

[4]    On or about 9 October 2007 the Partnership dissolved. In terms of the dissolution agreement:
(a)	The Respondents therein referred to as the remaining party, shall have the right to carry on business under the name and style of The Dunes Partnership.
(b)	The Respondents shall purchase and take transfer of the thirty percent (30%) share of the Deon Van Wyk Familietrust for a purchase consideration of Twelve Million Rand (R12 000 000.00)
(c)	The Respondents shall apply to be substituted as Mortgager in respect of the current Mortgage bond in favour of the Applicant.

DISCUSSION

RE: THE DUNES PARTNERSHIP
We are not in a position to service the interest of + Rl2,000 000.00. However, what monies we receive from The Dunes will be paid over to FNB.
1. We cannot service any bond. We need a window period till 1 Feb 2010 (+ R900 000.00 in arrears). No extra penalties or costs.
2. By December 2009 we will know whether March is on board, and if we will be receiving funds from them by June 2010 (approximately R 1.5M).
3. We are busy with a number of options with regards to the management of The Dunes Hotel, Duplexes etc. the moment it is finalized, you will be informed.
4. By the end of January 2010 we will be able to assess the situation. We will possibly be in a position to service the bond or selling of units/hotel, or a combination of the two.
5. We are prepared to surrender more surety. You have a bond over ten units (duplexes). A further bond of R15.0M over the hotel will bring the total to R30.M over 10 duplexes and the hotel.
6. We undertake to sell 16 duplexes. The following door numbers, 1, 4, 57, 66, 76, 99, 116, 12, 98, 100, 107, 121, 122, 123, 133, 11. Number 114 and 115, 14 is sold but not transferred yet. The hotel @ R17. OM.
NB: (All prices excl Vat — vat to be added). The proceeds of these units will be paid to FNB till the bond is
covered	

"(1) A creditor (or his agent) who has a liquidated claim for not less than fifty pounds, or two or more creditors (or their agent) who in the aggregate have liquidated claims for not less than one hundred pounds against a debtor who has committed an act of insolvency, or is insolvent, may petition the Court for the sequestration of the estate of the debtor.
(2) A liquidated claim which has accrued but which is not yet due on the date of hearing of the petition, shall be reckoned as a liquidated claim for purposes of subsection (1)."

"In principle, the doctrine of estoppel does not operate in circumstances where no representation can be attributed to the estoppel denier. Estoppel is thus in principle not to be confused with "vicarious liability". This said, the requirement that, to found an estoppel there must have been a representation, made by the representor to the representee, does not mean that the representor) the person against whom the estoppel is raised) must necessarily have made the representation himself. A person can be estopped from denying the truth of a representation made by someone who was entitled in law to do so on his behalf, for example his agent. In principle a liquidator cannot be held responsible for any unauthorized representations made by the employees of a company that has since been placed under liquidation. The liquidator does not represent the insolvent but the interest of the creditors. One can, in given circumstances, also be estopped from denying that another person had authority to make a representation on one's behalf although no such authority in fact existed. See e.g. Quinn and Co Ltd v Witwatersrand Military Institute 1953 (1) SA 155 (T). As to the question of agency by estoppel see generally Strachan v Blackbeard & Son 1910 AD 282; Monzali v Smith 1929 AD 382; De Wet Lawsa vol 1 ss 136 and 137. "

"Where any person by words or conduct represents or permits it to be represented that another person has authority to act on his behalf, he is bound by the acts of such other person with respect to any one dealing with him as an agent on the faith of any such representation, to the same extent as if such other person had the representation to the same extent as if such other person had the authority which he was so represented to have. "
The Second respondent has not questioned the agency of the First Respondent on all numerous instances the latter having dealt with the

"[37.2] The inference may in appropriate cases be drawn that the trustee who concluded the allegedly unauthorized transaction was in fact authorized to conduct the business in question as the agent of the other trustees. (In Nieuwoudt, the matter was sent back for evidence to be heard on how the farmer there conducted the ordinary business of farming without being authorized thereto by his wife, the other trustee). Such an inference may in a suitable case be drawn from the fact that the other trustees previously permitted the trustee or trustees in effective charge of affairs free rein to conclude contracts. A close identity of interests between trustee-beneficiaries, as in most family trusts, may make it possible for the inference of implied or express authority to be more readily drawn. "

[13] I have already alluded to the fact that since the inception of the financial relationship between the parties the only person who has been acting for and on behalf of the Trust is the First Respondent. It is not denied that the Trust is presently in arrears with regard to the loan agreement. It is once again the same First Respondent who is negotiating with the Applicant on the way forward. In my view, it is only fair to draw an inference that the First Respondent was authorized because clearly previously he was conducting the business of the Trust unhindered. It is only convenient that the Second Respondent now alleges that the First Respondent was not so authorized. It appears the First Respondent has disclosed what was kept as a top secret of the Trust. This has afforded the Applicant a window through which it can now see what obtains in the domestic affairs of the Trust. Mr. Marais complained that the question of estoppel was raised for the first time in reply. If this was so important, the Trust could have asked for leave to deal with it by way of Supplementary Affidavit. This was not done. The contents of

"Where on the affidavits there is a prima facie case (i.e. a balance of probabilities) in favour of the applicant then in my view, a provisional order of winding-up should normally be granted and, save in exceptional circumstances, this Court should not accede to an application by the Respondent that the matter be referred to the hearing of oral evidence. This does no lasting injustice to the Respondent for he will on the return day generally be given the opportunity, in a proper case and where he asks for an order to that effect, to present oral evidence on disputed issues. "

"Artikel 10 (b) van die Insolvensiewet bepaal dat as 'n skuldenaar 'n daad van insolvensie begaan het of insolvent is 'n Hof 'n sekwestrasiebevel kan uitreik, mits die skuldeiser 'n behoorlike eis het en dit tot voordeel van die krediteure sal wees as die skuldenaar se boedel gesekwstreer word. Hy kan dus gesekwstreer word selfs al is hy tegnies solvent. In 'n geval soos hierdie waar die skuldenaar kommersieel insolvent is, is dit duidelik tot voordeel van sy krediteure as daar reeds op hierdie stadium 'n begin gemaak word om sy boedel te likwideer en die bates eweredig onder krediteure te verdeel. Indien daar dew 'n skuldeiser op die los goed beslag gele kan word kan dit maklik daartoe lei dat daar weldra nie meer 'n voordeel sal wees om sy boedel te sekwestreer nie. Kyk ook na Wilkins v Pieterse 1937 CPD 165 op 166 en na Meskin & Co v Friendman 1948 (2) SA 555 (W) op 559."

[15]  In the circumstances, I make the following order:
(a)	The Jan Johannes Calitz Familietrust (IT926/93) is hereby placed under a provisional sequestration order.

(i)    The Jan Johannes Calitz Familietrust (IT926/93) should not be placed under final sequestration; and
(ii)    Why the costs of the application should not be costs in the sequestration.

(c)    Service of the order shall be effected:

DLODLO, J