Estate Logie v Priest

• Jurisdiction: South Africa
• Judge: Innes CJ, Solomon JA and Wessels JA
• Judgment Date: 12 April 1926
• Citation: 1926 AD 312
• Hearing Date: 22 March 1926
• Court: Appellate Division

Solomon, J.A.:

This is an appeal from the judgment of a single judge of the Eastern Districts Local Division. The action in the court below was one for damages for wrongfully and maliciously obtaining a provisional order of sequestration of the plaintiffs estate. Sec. 14 of the Insolvency Act 32 of 1916 provides that "whenever it appears to the Court that a petition for the sequestration of an estate is unfounded or vexatious, the Court may allow the debtor forthwith to prove any damage sustained by him by reason of the provisional sequestration, and award him such compensation as it may deem fit; or the debtor may bring an action for damages so sustained by him." This action, however, is admittedly brought not under the statute, but under the common law. It was incumbent, therefore, upon the plaintiff to prove not only that there was no ground for sequestrating his estate, but also that the proceedings were instituted maliciously, and without reasonable and probable cause.

The action is brought against the executrix testamentary of the estate of the late C. W. Logie by reason of her having, through her agent, H. J. Pienaar, the secretary of the Midland Agency & Trust Company Ltd maliciously obtained a provisional order for the sequestration of his estate. No question was raised on behalf of the defendant, either in the court below or on appeal, as to whether the action was properly brought against the executrix, and not against her agent; so that it is unnecessary to say anything upon that point. The facts leading up to the institution of the sequestration proceedings are, shortly, as follows: The plaintiff had been an intimate friend of the late C. W. Logie, and for many years they had had large business transactions with one another. At the death of Logie, in 1920, the plaintiff was indebted to his estate in a large amount, which was fixed by compromise at the sum of £3,500, to be settled by instalments. Great difficulty was experienced by the Midland Agency & Trust Company, which was acting for the executrix, in obtaining payment of these instalments, and this led to constant legal proceedings against the plaintiff. The result of these proceedings, and of other law suits between the secretary Pienaar personally and the plaintiff, led to strained relations between them, so that they had not spoken to one another for eight years prior to this action. In January, 1924, the last instalment of the debt amounting to £2,000 being

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overdue, the estate applied for provisional sentence on an acknowledgment of debt for that account. The Court refused provisional sentence on the ground that an extension of time had been granted in consideration of a cash payment of £300. Thereafter, on 30th May, 1924, provisional sentence was again prayed for, and was granted against the plaintiff for the balance of £1,700. Prior to the application, several attempts at settlement had been made by the plaintiff, but without success. A further attempt was made after the grant of provisional sentence, which delayed the service of a writ until the 16th June. Thereafter negotiations still continued, and on the 26th June the plaintiff made an offer to pay £650 on the 1st July and £550 on the 8th July, and proposed that the estate should raise a loan for the balance on two policies of insurance on the plaintiff's life for £1,000 each, which it held as security. On the same day the offer was accepted by the company with this proviso: "Provided, however, that the sequestration proceedings which have been instituted will only be stayed after payment of your cheque for £650, due on the 1st proximo." Two days thereafter, on the 28th June, the provisional order of sequestration complained of was granted. On the 1st July the provisional order was served upon him, and on the 8th July the second instalment of £550 was duly paid. Thereupon, on the 10th July, the provisional order was superseded at the instance of the defendant, who was condemned to pay the plaintiff's costs of opposition to the final order being made. The present action was then brought in the Graaff-Reinet Circuit Court, resulting in judgment being given for the plaintiff for the sum of £60 with costs of suit, and an appeal is now brought to this Court.

The first question, then, to be considered is whether an act of insolvency had been committed by the plaintiff. If there was none, the plaintiff will have established the first requisite of his case, that there was no good ground for sequestrating his estate. Sec. 8 of the Insolvency Act of 1916 provides that "a debtor commits an act of insolvency if, having against him the sentence of any competent Court, and being thereunto required by the officer charged with the execution of the same, he does not satisfy the same or point out to that officer sufficient disposable property to satisfy the same, or if it appears from the return made by such Officer that he has not found sufficient disposable property." The writ in execution of the judgment of the Court for £1,700 was

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served upon the plaintiff by the officer of the deputy-sheriff of Graaff-Reinet on the 16th June, 1924, and the return endorsed on the writ was as follows: "No goods or chattels of the defendant were either pointed out, nor after diligent search found, whereof the exigency of this writ or any part of it could be made. The debtor will give no further answer than that he has applied to the Midland Company to send his life policy to Cape Town to enable him to raise a loan, and that any balance he would pay in cash."

Now if the first part of the return had stood alone, there could have been no question that an act of insolvency had been committed. For it would be clear that, in the words of sec. 8, the plaintiff having against him the sentence of a...