IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

Case No. 8318/2011

In the matter between:

and

COUNSEL FOR APPLICANTS:	Adv S Olivier SC	
INSTRUCTED BY:	De Klerk & Van Gend (Mr CA Albertyn)	
COUNSEL FOR RESPONDENTS:	Adv RJ Stransham-Ford	
INSTRUCTED BY:	Tarr Spencer Malan Geyer Attorneys
(Mr S Tarr)	

IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

Case No. 8318/2011

In the matter between:

and

JUDGMENT
ROGERS AJ

Introduction
1. This is an opposed application for the final sequestration of the estate of a trust. The applicants are the liquidators of Indo-Atlantic Group Holdings (Pty) Ltd ('Holdings'). The first and second respondents, Mr JE Van Staden ('Van Staden') and his wife, are the current trustees of the Sword Fish Trust ('the Trust'). The Trust's beneficiaries are members of the Van Staden family.
2. The applicants' case in the founding papers is in summary [a] that the Trust owes Holdings at least R8 million in respect of monies lent and advanced [b] that the Trust is insolvent in that its liabilities exceed its assets, ie that it is factually insolvent [c] that because the Trust's assets are the Van Stadens' sole source of funds, the Trust has probably made dispositions to them to the prejudice of creditors and thus committed acts of insolvency in terms of s 8(c) of the Insolvency Act 24 of 1936 ('the Act'). In the replying papers the applicants have added a further alleged act of insolvency in terms of s 8(c), namely a cession by the trust of all its assets to a firm of attorneys, Colin Geoffrey Inc. All these allegations are disputed.
3. Van Staden was the driving force behind a group of companies referred to in the papers as the Indo-Atlantic group and comprising Holdings, Indo-Atlantic Seafoods (Pty) Ltd ('Seafoods') and Indo-Atlantic Shipping Ltd ('Shipping'). Seafoods and Shipping, like Holdings, are in liquidation on the basis of an inability to pay their debts. Seafoods is a wholly-owned subsidiary of Holdings. Shipping is a sister company of Holdings, having identical shareholders. Who those shareholders are is not clearly stated in the papers. It appears that 50% (or possibly more) of the shares in Holdings and Shipping are held either by the Trust or by Van Staden personally.

4. The three Indo-Atlantic companies were placed in provisional liquidation in late 2008 with final orders following shortly thereafter. The petitioning creditor in respect of Holdings, Rollex (Pty) Ltd ('Rollex'), obtained an order in November 2008 for an enquiry into Holdings' affairs in terms of ss 417 and 418 of the Companies Act 61 of 1973. The enquiry began in early December 2008, Rollex being represented in the interrogation by counsel Mr Louis Olivier. Holdings' liquidators later obtained orders for similar enquiries into the affairs of Seafoods and Shipping. For convenience I shall refer to these enquiries collectively as the s 417 enquiry.

6. The existence of the provisional restraint order over the period 12 December 2008 to 9 March 2011 is said by the applicants to explain why the present sequestration application was launched only on 18 April 2011. They say that during the subsistence of the provisional restraint order Mr and Mrs Van Staden were divested of control over the Trust's assets and the recovery of funds or assets by Holdings' liquidators from the Trust was rendered impossible.
7. The provisional order of sequestration was granted by Desai J on 26 May 2011. At that stage the respondents had not filed answering papers.

10.  It is common cause that the accounting records of the Indo-Atlantic group and the Trust were not properly maintained. No audited financial statements of the companies or the Trust were apparently produced for any period relevant to this case. The unsatisfactory state of the accounting information, even if a finger in that regard can be pointed Van Staden (though he says he left this to others), does not justify an approach of accepting whatever construction of the facts is favourable to the applicants and adverse to Van Staden and the Trust.

Holdings' alleged claim

14. In paragraph 43 of the founding affidavit, and with reference to the evidence of a Mr B De Vries ('De Vries') given at the s 417 enquiry, the applicants allege that Holdings has a claim of R 1.8 million against the Trust in respect of monies lent to fund the Trust's purchase of the Baron aircraft.
15. In paragraph 47 of the founding affidavit, and with reference to Newmark's evidence at the s 417 enquiry, the applicants say that R880 000 was paid by Holdings to the Trust since May 2008 by electronic transfers in order to fund the purchase of vehicles and other movables for the farm.
16. If monies were paid by Holdings to the Trust, this should be reflected in Holdings' bank statements. The applicants did not annex any bank statements to their papers in order to provide evidence of the flow of funds. No deeds of sale relating to the farms or other assets of the Trust were adduced.

23. In assessing the evidence it is necessary to bear in mind that the existence of a loan by Holdings to the Trust is not established merely by showing that money flowed directly from Holdings to the Trust or directly to a third party in a way that benefited the Trust. It is a very common occurrence for a loan to be implemented by payment from the lender to a third party nominated by the borrower. The applicants rely on money lent and advanced by Holdings to the Trust at the latter's specific instance and request. The applicants must show on a balance of probability that a loan agreement was concluded between Holdings and the Trust.
24. The trust deed, which the applicants have annexed to their founding affidavit, did not entitle Van Staden to act alone in administering the affairs of the Trust. In order for there to be a quorum at a trustees' meeting the majority of the trustees must be present (clause 4.7). In the event of disagreement the decision of the majority prevails (clause 4.10). Although Van Staden and his wife are the only current trustees it appears from the restraint order granted by Traverso AJP on 12 December 2008 and from the judgment of Blignault J delivered on 9 March 2011 that at some stage after the Trust was established in March 2004 a Mr Marc Schoeman was added as a trustee and that he was still a trustee at the time of the proceedings before Blignault J. To judge by the extracts of the evidence attached to the applicants' affidavits, the question as to what Mrs Van Staden or Schoeman knew and intended in regard to the funding of the Trust was not explored at the enquiry and there is no other evidence in that regard apart from Mrs Van Staden's confirmatory affidavit in which she has affirmed her husband's version (namely that the Trust itself did not borrow any monies from the Indo-Atlantic group). There is also no evidence of any resolutions by the Trust to borrow money from the Indo-Atlantic group.

27. De Vries was asked during the enquiry why the money that was used for the Trust's benefit was not reflected as one of the loan accounts in these balance sheets. His reply appears from the following extract:

31. Newmark did not annex any extracts from board minutes to corroborate his version. Given that Holdings and its records are under the applicants' control, Newmark may not have had access to board minutes for this purpose. Conversely, though, and as I have previously mentioned, the applicants have produced no minutes to suggest that the directors ever intended to lend money to the Trust.

33. In regard to the purchase of the farm Bambata (which seems to have comprised several properties), he was unable to recall the precise price though he put it in the region of R7.5 million to R8 million (record 449). The money was paid into his trust account by electronic transfer (presumably for onward transmission to the seller against transfer). He could not recall whether the money had been transferred into his trust account from Holdings' bank account or from Shipping's bank account - it would have been one or the other (record 450). He said he had raised an objection when Van Staden wanted to use group founds to pay for the farm (this was some time after the Trust had concluded the purchase agreement). He raised these objections verbally with his co-directors, including De Vries (record 462). He did not know who had actually caused the money to be transferred into his trust account but said that any one of Van Staden, De Vries or the financial manager Mr Botha could have accessed the electronic system to make the transfer.
34. There is nothing in Newmark's s 417 evidence to indicate that Holdings lent money to the Trust. Newmark was not asked that question. The evidence that one of the Indo-Atlantic companies transferred money to his trust account in respect of the purchase of the Bambata farm does not in itself justify the conclusion that the said company lent money to the Trust. Newmark has specifically stated under oath that this was not Holdings' intention.

36. There are certainly points of criticism of Van Staden's version. He has not explained how the Trust was administered or when and how the Trust agreed to borrow money from Van Staden. He has also not explained how the Trust was able to generate income and to pay its own way from an operational perspective. However, he was facing allegations of a very bald and vague nature.

40. He was then asked questions about the repayment terms applicable to the Trust's loans from the group (record 367-368). He said that no terms were specifically agreed. The questions were asked on the assumption that the Trust was the borrower because it had received the benefit of the monies. Van Staden may have been brought under the misapprehension that this was indeed the position by the way the questions were put to him by the Commissioner and by Mr Olivier. What was not specifically explored with him was whether it was the Trust or he personally who had concluded a loan agreement with the group. He was later asked, in a different context, about his loan account of R120 million as reflected in 'RE16', for which he had submitted a claim against Holdings' liquidators. He said he did not know how De Vries had arrived at the figure of R120 million (record 371-373). He was not asked why loan accounts were reflected in his name but not in the name of the Trust. If he had been asked, the distinction relevant to the present case might have been brought to light and elucidated.

41. Van Staden said that the price of the Baron aircraft had definitely come from the Holdings bank account - Mr Botha had done the transfer (record 394). The aircraft was used principally for group business. He was asked about repayment terms without specific reference to the identity of the borrower (record 394-398). He said, once again, that no specific repayment terms were agreed.

43. For all these reasons I conclude that the applicants have failed to establish that Holdings has a claim against the Trust for monies lent to the latter. If this conclusion is right, the application must fail.

Factual insolvency
44. In case the above conclusion is wrong I shall deal with the remaining questions of factual insolvency and acts of insolvency.
45. The founding affidavit contains no tabulation of the Trust's assets and liabilities and their respective values. Paragraph 49 simply alleges that it is an inescapable conclusion from the evidence at the s 417 enquiry that the Trust is indebted to Holdings in respect of the price of the assets of the Trust and the expenses incurred by it; and that because the value of the assets, such as the motor vehicles, has decreased and expenses have been incurred and paid without the Trust having generated an income, Holdings' claim exceeds the value of the Trust's assets; and that the Trust is thus factually insolvent.
46. This assertion rests on the s 417 evidence. If that evidence is inadmissible the foundation for the conclusion of insolvency is absent. However I shall again assume in favour of the applicants that the s 417 evidence is admissible.
47. Even on this assumption, the allegation in paragraph 49 of the founding affidavit is hopelessly deficient. It was incumbent on the applicants to set out their version as to what the assets and liabilities were at the time of launching the sequestration application. I invited Mr Olivier to provide me with his best analysis of the assets and liabilities of the Trust as at April 2011 (when the sequestration application was launched), based on such evidence as there was in the record. I should mention that Mr Olivier was not on brief at the time the founding and replying affidavits were prepared. In his written replying submissions he provided the analysis I had requested.

49. Annexure 'RE14' comprises pages 17 to 20 of a longer document. The annexed extract does not bear a date nor is the date of the report stated in the founding or replying affidavit. I infer that annexure 'RE 14' is an extract from the interim report made by Knoetze to court pursuant to paragraph 1.21 of the provisional restraint order of 12 December 2008 ('RE13'). In terms of paragraph 1.21 of the restraint order the said interim report had to be filed by 30 January 2009. It thus appears likely that the information in 'RE 14' predates the launching of thesequestration application by well over two years. This naturally calls into question the relevance of the report as a guide to the value of the Trust's assets in April 2011.
50. Particularly since the respondents have challenged the accuracy of 'RE14', I do not think the court can place reliance thereon in the absence of an affidavit from Knoetze and from the valuers who performed the valuations to which reference is made in Knoetze's report. There is nothing to indicate that the deponent to the founding affidavit has personal knowledge of the matters in question or the expertise to value the assets nor did he purport to confirm the accuracy of Knoetze's report. Furthermore, the extract is even incomplete in respect of the matters with which it deals, in that the pages containing the comments in paragraphs 2.1.5.2 to 2.1.5.4 of the report (as referred to in the table in paragraph 2.1.5) have not been placed before the court.
51. However, and even taking 'RE14' at face value, there is considerable difficulty in deriving from the said document and the other evidence a reliable picture of the value of the Trust's assets and liabilities as at April 2011.

53. Nevertheless, and on the assumptions I was asked to make, the loans would on my analysis comprise [a] R6 340 000 in respect of immovable property [b] R1.55 million in respect of Matikulu movables [c] R397 000 in respect ofgame [d] R2 159 616 in respect of vehicles [e] and R2 340 000 in respect of the Baron aircraft. This gives a total loan indebtedness in respect of the Trust's acquisition of assets of R12 786 616.
54. Mr Olivier's analysis of the loans used to acquire assets differs from mine. His total for liabilities, based on the Knoetze schedule, was only R8.877 million, which would reduce to R8 287 000 after deducting the double-counting of the La Rouge purchase price. The difference of R4 499 616 between my figure of R12 786 616 and his figure of R8 287 000 is attributable to the fact that he omitted to reflect the price of the vehicles or to add the price of the aircraft.
55. To these liabilities Mr Olivier said that I needed to add the following further amounts, namely [a] R400 000 in respect of occupational interest for the farm Matikulu (five months at R80 000 per month until the sale of the said farm fell through) [b] R1.75 million in respect of a claim by Colin Geoffrey Inc in respect of legal fees (as secured by the cession of 9 March 2011) [c] living expenses of R390 000 (R65 000 per month x 6) [d] and payment of operational expenses of the farm of R880 000. This would give total liabilities (based on my earlier analysis) ofR16 206 616.
56. I do not think that the item in respect of the indebtedness to Colin Geoffrey Inc should be included. This figure is derived from the deed of cession which was handed up only during argument. The cession was not annexed to the founding or replying papers nor was there any allegation in the papers of a quantified indebtedness by the Trust to Colin Geoffrey Inc. Furthermore, the claim seems to relate to litigation in which, pursuant to Blignault J's judgment of 9 March 2011, Van Staden has obtained a costs order against the NDPP. The relationship between the Trust's liability to Colin Geoffrey Inc for legal fees and Van Staden's claim for costs against the NDPP has not been ventilated in the evidence (since the issue was not squarely raised in the founding papers) but it does not seem reasonable to include a liability in respect of costs which appears to be recoverable, at least in part, by a related party (Van Staden) under a court order.
57. This reduces the liabilities to R14 456 616. It can hardly be said that this figure is capable of being readily derived from the papers. Apart from the figures in 'RE14', one has to trawl through a not altogether lucid transcript of the s 417 evidence (most of which was annexed only in reply) or make speculative assumptions in order to derive the additional liabilities which Mr Olivier has asked me to add. For example, Mr Olivier's figure of R390 000 for living expenses is based on an assumption that the Trust incurred a liability of R65 000 per month from April to September 2011 to fund the Van Staden's living expenses. The figure of R65 000 he asked me to derive from paragraph 38 of the founding affidavit read with paragraph 47 of the answering affidavit. Most of the six-month period he used for the calculation post-dates the launching of the sequestration application. Furthermore, since the Trust was provisionally sequestrated on 26 May 2011, it is not apparent how the Van Stadens could have caused the Trust to run up liabilities (or realise Trust assets) after that date. Another assumption that has to be made is that the Indo-Atlantic group lent the Trust the money to buy La Rouge. Regarding the purchase prices supposedly reflected in 'RE14', the amount of R2.3 million stated in respect of the Baron aircraft is considerably higher than the amount of R1.8 million referred to in the founding affidavit and in De Vries's 417 evidence.
58. Regarding the assets, the Knoetze extract reflects the following market values, namely [a] R9.735 million for the Bambata farm and game and for the La Rouge sectional title unit [b] R1.565 million for the motor vehicles [c] and R2.2 million for the Baron aircraft. This gives a total of R13.5 million. (Once again, Mr Olivier gives a lower figure, namely R9.735 million, because he has omitted the value of the vehicles and the aircraft.)

59. Mr Knoetze's market value of R13.5 million does not appear to include the Matikulu movables for which the Trust (according to Knoetze) paid R1.55 million. Knoetze's report does not indicate that the value of these movables has been included in his values for the Bambata farm. It is difficult to comprehend how the Trust could have paid R1.55 million for movables (and have a corresponding liability in that amount to the Indo-Atlantic group) without having received any assets in return. Note 2.1.5.1 to Knoetze's report indicated that the circumstances surrounding the various aspects of the Matikulu transaction were under investigation. What became of those investigations has not been revealed. As will appear hereunder when I deal with the affidavit of Mr CP Van Zyl, there do indeed appear to be other movable assets which may not be reflected in the Knoetze extract.

61. There are various confusing factual disputes about what has become of some of the Trust's assets since the provisional restraint order was granted in December 2008. In his answering affidavit Van Staden says that Knoetze disposed of most of the vehicles and has failed to account for them (para 42). He also says that Knoetze rendered the aircraft unairworthy by recklessly lending it contrary to Van Staden's advice (para 42; see also para 2.7.9 of Van Staden's business plan at record 273).

63. In Van Staden's business plan dated 27 March 2011 (which was very shortly before he was contacted by Prinsloo about the impalas) he stated that there should be an abundance of game on the farm worth about R4.33 million, assuming the game to have been properly cared for during Knoetze's curatorship. Van Staden stated in the plan that he would only be able to determine the exact number once he returned to the farm and did a game count (record 266). From this it seems that although the restraint order was discharged on 9 March 2011 the farm was not immediately returned to the respondents' control.
64. The answers to these allegations are contained in the affidavit of Mr CP Van Zyl, one of the provisional trustees of the Trust's insolvent estate. Van Zyl was appointed on 15 June 2011. This affidavit was filed together with the applicants' replying papers.

66. Van Zyl's allegations as to what he was told by Knoetze and as to what vehicles Knoetze supposedly stored and later released to the Van Stadens are of a hearsay nature. Knoetze himself did not depose to an affidavit. Accordingly I cannot find that the disappearance of vehicles occurred after they had been returned to the respondents' control. At best for the applicants there is a dispute of fact on that point. If Van Staden's version is right, the Trust may have claims against Knoetze and Deloittes in respect of missing vehicles.
67. As regards game, Van Zyl avers (para 15) that Knoetze told him that he (Knoetze) had been unable to undertake a proper and accurate count of the game. Apart from the fact that this too is hearsay, there is no explanation as to why Knoetze could not cause a proper game count to be undertaken. From Ranier's affidavit it seems that a game count is something that a person such as Ranier could do by helicopter. According to Ranier, the first occasion on which he was asked to perform a game count was on 4 March 2011, just a few days before the provisional restraint order was discharged. Whether anyone else was requested by Knoetze to do a game count at an earlier time does not appear.
68. In paragraph 29 of his affidavit Van Zyl says that 721 head of game were returned to Van Staden's control after the discharge of the restraint order, in support whereof he annexes a schedule 'E4'. He does not explain the source of the schedule.   The information therein cannot be a matter within Van Zyl's personal knowledge. Presumably it derives, once again, from Knoetze and is of a hearsay nature. Furthermore, and since 'E4' purports to be based on a game count, its contents are difficult to reconcile with Knoetze's report to Van Zyl that he had been unable to do a proper and accurate game count.
69. According to the deputy-sheriff s return (record 506), Van Staden reported that there was not much wild life left on the farm. Van Zyl seems to infer from this that most of the 721 head of game has disappeared (assuming that 721 head had been restored to the Van Stadens by Knoetze, a fact not properly established on the evidence). The deputy-sheriff himself did not do a game count. I do not know whether Van Staden would have regarded 721 head of game as a lot or a little (from his business plan it seems he may have been expecting to find an abundance of game) and I thus cannot know whether one can infer from his remark to the deputy-sheriff in July 2011 that there were more or less than 721 head of game on the farm. Be that as it may, Van Staden's version is that some game disappeared before the release of assets to the respondents.
70. The further information relayed to Van Zyl by Knoetze as set out in paragraph 17 of Van Zyl's affidavit is likewise of a hearsay nature. From Ranier's affidavit it seems that the Trust must have traded during Knoetze's curatorship since game was being sold and hunting was taking place. (If such trading has continued since the release of the farm to the respondents, it is possible that this has provided a source of income for the Trust and the Van Stadens.)
71. I thus do not consider that on the papers I can find that the respondents have done away with the Trust's assets since they were released to them. If any assets are missing, the responsibility for the disappearance is a matter of dispute. Van Zyl's affidavit does not make good the deficiencies in the applicants' case regarding factual insolvency.
72. It will be apparent that Van Staden has made some serious criticisms about Knoetze. Although Knoetze was cited as a respondent he did not oppose the application, and as result he only received the founding papers. He has not had an opportunity of answering the respondents' allegations against him. I express no view whatsoever as to the truth of the respondents' allegations.

Acts of insolvency

75. The other act of insolvency, raised in the replying affidavits, fastens on paragraph 8 of Van Staden's affidavit, where he says that on 9 March 2011 (ie the day on which the restraint order was discharged) the Trust ceded all right, title and interest in its assets and rights to Colin Geoffrey Inc and that the latter should have been joined in the sequestration application. In paragraph 5 of the replying affidavit the applicants say that this was an act of insolvency in terms of s 8(c).
76. It appears from the transcript of the proceedings that took place before Desai J on 26 May 2011 (when the provisional order was granted) that the deed of cession was in the possession of the applicants' legal representatives by that date. If the applicants wished to rely on the cession as a further act of insolvency I think they should have sought leave to supplement their papers on or shortly after 26 May 2011. They should not have waited until filing their replying papers on 16 August 2011. Although the respondents could, in terms of my order of 23 August 2011, have filed a supplementary answering affidavit dealing with this aspect, my order did not have the effect of condoning the inclusion of new matter in the replying papers. I do not think in the circumstances of this case that the applicants should be permitted to rely on this belated allegation, particularly since the facts relating to the alleged act of insolvency are far from clear.

Other grounds of opposition

Respondents' application to adduce further evidence

82. The condonation affidavit itself should properly have explained the essence of the additional evidence and why it was relevant. Based on Mr Stransham-Ford's summary given from the bar, I was firmly of the view that there was no merit in delaying the sequestration application by allowing the respondents to adduce the late affidavit (which would inevitably have entailed a further postponement). The matters which the respondents wished to advance in the new affidavit appeared to me to be either irrelevant or to raise points with no prospects of success. Furthermore, the matters in question were not in response to anything new contained in the applicants' replying papers. If the respondents had wanted to raise these matters, they could have dealt with them in the answering papers filed on 18 July 2011. There was no satisfactory explanation in the condonation affidavit for this failure. I thus refused the condonation application. Any costs associated with that application must be borne by the first and second respondents.

Applicants' application to adduce further evidence
84. On 11 October 2011, after judgment had been reserved, the applicants delivered an application for leave to adduce a further affidavit. In this affidavit the applicants sought to establish [a] that the Trust had committed a further act of insolvency by purporting on 14 September 2011 to sell the Baron aircraft and its engine (which were apparently at separate locations, both under attachment in terms of s 19 of the Insolvency Act - for convenience I shall refer to these items collectively as 'the aircraft') for R200 000; and [b] that, with reference to the question of factual insolvency, the purported sale showed that the aircraft was worth only R200 000 and not the figure of R2.2 million reflected in Knoetze's report. Since the parties could not come to terms on how this application to receive further evidence should be dealt with I gave directions on 8 November 2011 for the filing of papers and ruled that the matter should be argued before me on 25 November 2011.

86. Firstly, for the reasons set out earlier I do not think the applicants have established their status as a creditor. This alone is fatal to their main application, and the new affidavit would not cure that difficulty.
87. Secondly, I consider that the applicants' case on factual insolvency and acts of insolvency in the founding papers is so deficient that it would not be right at this very late stage to allow them to retrieve the situation, particularly since they now seek to rely on conduct which occurred after the sequestration application was launched and indeed after the Trust has been place under provisional sequestration.
88. Thirdly, the additional light that the further evidence casts on the Trust's factual insolvency is far from decisive. Whether the new evidence provides reliable evidence of the aircraft's current value is by no means obvious, given that Van Staden may simply have been trying to raise quick money. And even if one accepts that the aircraft's current value is R200 000, this would only be of assistance in determining the Trust's overall solvency if one had reliable and admissible evidence of the Trust's other assets and liabilities. Such evidence, as explained earlier, is lacking.

90. The material placed before me in the application to adduce further evidence neverthless discloses a very disturbing sequence of events. The Trust was provisionally sequestrated on 26 May 2011 and at that point ownership of the aircraft vested in the Master and then the provisional trustees (s 20(1 )(a) of the Act). The fact of the provisional sequestration was obviously known to Van Staden, his attorney Mr Spencer Tarr and his counsel Mr Stransham-Ford. The vesting of the aircraft in the provisional trustees was not dependent on attachment in terms of s 19. As a fact, though, the aircraft was attached on 22 July 2011 and the engine on 17 August 2011, and the sheriffs returns were served on or emailed to Tarr. Furthermore the attachment of the aircraft was averred in, and the return annexed to, the affidavit of one of the provisional trustees Van Zyl, which affidavit was duly served on the respondents' attorneys on 16 August 2011 as part of the replying affidavits. According to an affidavit made by Van Staden on 18 September 2011 he had read the replying papers, including the affidavit of Van Zyl.

91. From the affidavit ('the condonation affidavit') made by Van Staden on 18 September 2011 in support of the Trust's application for leave to file its late affidavit it appears that Van Staden had personally received the replying papers by 25 August 2011, that an initial consultation with Mr Stransham-Ford in regard to a possible further response by the Trust was held on 6 September 2011 and that a further consultation in that regard took place with Tarr on 8 September 2011. According to another affidavit made by Van Staden on 18 September 2011 (one of the late affidavits that the Trust wanted to file), Mr Stransham-Ford was with Van Staden on the farm where the latter resides on 15 September 2011 for the purpose of finalising the new affidavits.
92. When Van Staden said in his condonation affidavit that the applicants would suffer no prejudice if the return day of the provisional sequestration were further postponed to allow the late affidavit to be received, he and those who drafted the affidavit for him must have meant the court to understand that because the Trust was under provisional sequestration and because the Trust's assets thus vested in the provisional trustees, the interests of the applicants and other possible creditors of the Trust were safeguarded. It will also be recalled in this regard that one of the contentions raised in the late affidavit that the Trust was seeking permission to file was that there should be an indefinite postponement of the return day of the provisional sequestration.
93. Notwithstanding all of the foregoing, Van Staden on 14 September 2011, purporting to act on behalf of the Trust as seller, signed the Trust's acceptance of an offer by Money Aviation (Pty) Ltd (represented by Angus Money - 'Money') to buy the aircraft for R200 000. The sequestration application was argued before me on 19 and 20 September 2011. On the second of these days (20 September 2011) Van Staden by email authorised Money to pay the price of R200 000 into Tarr's trust account, details of which he furnished. Van Staden copied his letter to Tarr and to Mr Stransham-Ford. Van Staden's letter to Money stated that the aircraft had been released from restraint by Blignault J's order of 9 March 2011. Van Staden indemnified Money against any legal consequences that might arise from the Trust's sale of the aircraft to Money's company. The letter did not disclose that the Trust was under provisional sequestration and that the aircraft vested in the provisional trustees.
94. On 21 September 2011 Tarr sent an email to Money confirming what Van Staden had said in his letter of the previous day. He asked Money to fax or email proof of payment. This letter, copied to Van Staden and to Mr Stransaham-Ford, again did not disclose to Money the existence of the provisional sequestration.

98. On the face of it, Van Staden's conduct in attempting to dispose of the aircraft was an attempt to commit the offence defined either in s 132(d) or in s 142(1) of the Act or was an attempt to commit theft, while the non-disclosure to Money was a fraud on the latter. The sale itself was contrary to the proviso in s 23(2). Regrettably it appears that Van Staden's attorney (Tarr) and his counsel (Mr Stransham-Ford) were aware of the Van Staden's conduct and lent their assistance. A question naturally arises as to whether they did so because the sum of R200 000 was earmarked for the payment of their legal fees. It is not possible nor would it be appropriate for me to make any findings in this regard. However I would be failing in my duty if I let matters rest. I thus intend to direct the registrar to furnish a copy of this judgment to the National Prosecuting Authority, to the Law Society of the Northern Province and to the JohannesburgSociety of Advocates for such further investigation and action as they may consider appropriate. (Needless to say, the seriousness of the matter and the possibility that a criminal offence has been committed are not in the least affected by the fact that the provisional sequestration order is now to be discharged. The Trust was under provisional sequestration when the relevant events occurred.)

Concluding matters
99. In assessing whether the applicants have established that Holdings has a claim against the Trust, I have in this judgment confined myself to the two competing contentions put up by the parties, namely that the borrower was the Trust or that the borrower was Van Staden personally. I should perhaps say that these are not the only possibilities (though they are the only ones calling for a decision in this case). Although the application as presented must in my view fail for the reasons I have given, the way in which the affairs of the Indo-Atlantic group and the Trust were conducted appear to do Van Staden no credit. It is far from clear to me that the money that flowed out of the Indo-Atlantic group to fund the purchase of the Trust's assets was the subject of valid loan agreements at all. It is possible (though I express no opinion thereon) that the companies' funds were simply appropriated by those who controlled the companies. It would not be right for me to express any view as to what remedies against what parties would lie if this were to have been the case.

102. My order is thus as follows:

(a) The provisional order of sequestration granted on 26 May 2011 is discharged and the application for the sequestration of the estate of the first and second respondents in their capacities as trustees of the Swordfish Trust is dismissed.
(b) The first and second respondents in their said capacities are directed to pay the applicants' costs associated with the their application of 19 September 2011 to file further affidavits.
(c) The parties shall bear their own costs in respect of the applicants' application dated 11 October 2011 to adduce further evidence, including the costs of the hearing before me on 25 November 2011.
(d) Save as aforesaid, the applicants are directed to pay the costs of the first and second respondents in their said capacities, such costs to include those:

save that in respect of the costs referred to in (ii) either party may, within two weeks of this order, deliver written notice that they wish the court to reconsider the said costs order after receiving further submissions thereon.
(e) The registrar is directed to furnish a copy of this judgement to the National Prosecuting Authority, the Law Society of the Northern Province and the Johannesburg Society of Advocates for such further investigation and action as they may consider appropriate in regard to the matters discussed in paragraphs 89 to 97 of the judgment.

ROGERS AJ
6 DECEMBER 2011