Absa Bank Ltd v Chopdat

• Jurisdiction: South Africa
• Judge: van Schalkwyk J
• Judgment Date: 11 June 1996
• Citation: 2000 (2) SA 1088 (W)
• Docket Number: 21155/95
• Hearing Date: 10 June 1996
• Counsel: A P den Hartog for the applicant. A P Bezuidenhout for the respondent.
• Court: Witwatersrand Local Division

Van Schalkwyk J:

This is the extended return date of a provisional sequestration order which was granted on 26 March 1996. The respondent opposes the confirmation of the Rule. The application was launched in September 1995 but, because of the inability of the applicant to effect service of the papers, service was eventually effected at the respondent's chosen G domicilium only on 15 February 1996.

In its founding affidavit the applicant makes out the case that the respondent is factually insolvent. The applicant relies upon two judgment debts obtained respectively on 21 February 1992 and 17 August 1993 with an aggregate value of approximately R269 000. It is contended that including the accrued interest and costs the current indebtedness exceeds R550 000. H

The applicant also makes reference to an alleged indebtedness to Shell South Africa Ltd of approximately R2 million as well as additional indebtednesses to attorneys, and various acts of insolvency.

The respondent's assets, according to the applicant, amount to I approximately R550 000 and comprise, inter alia, shares in Barlows Ltd valued at R12 000 and various heavy duty vehicles valued at approximately R328 000.

The respondent contends that he was never informed about the judgment of 17 August 1993, of which he learnt only on 29 April 1996 J

Van Schalkwyk J

when he checked the Court file. Although he has not yet done so, he says that he intends to launch an application for the rescission A of the judgment, as well as an application for the condonation of the late filing thereof.

He contends, moreover, that the judgment of 21 February 1992 in the amount of R22 000 has been satisfied as a result of attachments made by the Deputy Sheriff. The respondent denies that he owes Shell an amount of R2 million and says that he has settled his B indebtedness to Shell in terms of an agreement under which he has undertaken to pay an amount of R200 000. He denies his indebtedness to the attorneys and attaches a supporting affidavit to verify his C contention that they have been paid. He denies the applicant's valuation of the heavy duty vehicles and attaches an affidavit of a Mr Mahomed Karim, who values the vehicles at R720 500, although he does not say that he is qualified to give such a valuation.

The respondent has filed a long and argumentative affidavit, much of which is irrelevant to this judgment. Counsel were agreed that the real issue was whether the applicant had demonstrated that the D respondent's liabilities exceed his assets. On the authority of Ohlsson's Cape Breweries Ltd v Totten 1911 TPD 48, Mr Bezuidenhout, for the respondent, emphasised that the onus was upon the applicant to show clearly that this was the case.

The applicant's attorney, Mr Smit, has filed a supporting affidavit, E attached to the replying affidavit, in which he makes reference to a meeting held between the respondent and himself at his offices on 15 February 1996. At the meeting the respondent made a settlement proposal in connection with four judgments, three of which had been entered against him in favour of the applicant and the fourth, in favour of the applicant against a third party for whose performance F the respondent had stood surety.

During the discussions various disclosures were made by the respondent which were recorded by Mr Smit in a handwritten note which has been attached to the replying affidavit as annexure S2. This document reveals that the respondent's liabilities exceed R5 million G and that his only assets are personal clothing valued at R1 000. At the meeting the respondent also wrote out an offer of settlement of the judgments, by way of payment in instalments, in an amount of R165 000. This document, signed by the respondent, is recorded to be without prejudice. Notwithstanding this reservation, the document has been annexed to the replying affidavit as annexure S1. H

The respondent admits this meeting but contends that it occurred on 7 or 8 February 1996. That seems to be improbable in view of the fact that annexure S1 was signed by the respondent at the meeting and the document bears the date 15 February 1996. I

The respondent seeks an order that annexures S1 and S2 and the references thereto be struck out because they offend against the rule against the disclosure of privileged information and because the cause of action sought to be made thereby should have been contained in the founding affidavit. J

Van Schalkwyk J

The first issues to be determined are whether all the information A conveyed by the respondent to Mr Smit at the meeting of 15 February 1996 is privileged and, if so, whether an exceptional principle would permit its disclosure. There is no doubt that annexure S1 is privileged. The document records that fact in unambiguous terms. However, the more relevant document is annexure S2, which records the insolvency of the respondent and the important fact that he disavows the possession of any assets other than his personal clothing. B Prima facie that document would be sufficient to establish the issue now in dispute. The document was drafted at the time when the respondent and Mr Smit were...