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:

and

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:

and

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:

(b) Having him sequestrated would not benefit the creditors as he does not have any creditors.

[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

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.

"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.

"/ 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.

(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 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