Ex parte Mattysen et Uxor (First Rand Bank Ltd Intervening)

• Judge: Southwood J
• Judgment Date: 30 September 2002
• Citation: 2003 (2) SA 308 (T)
• Docket Number: 19498/2002
• Hearing Date: 30 September 2002
• Counsel: No appearance for the applicants. F J Erasmus for the intervening creditor.
• Court: Transvaal Provincial Division

Southwood J:

This is an application for voluntary surrender which is opposed by First Rand Bank Ltd, the E intervening creditor. The applicants, who are married in community of property, gave notice that they would apply for the surrender of their estate on 23 July 2002. On that date the application was opposed by the intervening creditor and the application was postponed for hearing as an opposed application on 25 September 2002 and the intervening creditor was given leave to file its application to F intervene within 15 days of 23 July 2002 and to file an answering affidavit within 15 days after filing of the application to intervene. The wasted costs of the day were reserved.

The intervening creditor has filed an application to intervene and an answering affidavit. It did this late but the reasons for this have been explained. The failure to comply with the order made on 23 G July 2002 was therefore condoned.

According to the intervening creditor's affidavits the applicants' attorney has informed the intervening creditor's attorney that the applicants will not proceed with this matter. The applicants have not filed a replying affidavit to answer the intervening creditor's H contentions and they do not appear to be represented. No practice note or heads of argument for the hearing have been filed.

On 19 August 2002 the intervening creditor's attorney called on the applicants' attorney to withdraw the application but the applicants have not delivered a notice of withdrawal. I

In the founding affidavit the applicants averred that they owned an immovable property, erf 225, Geduld, with a value of R85 000 and movable property, all household items, with a value of R9 400. The applicants alleged that their liabilities amounted to R134 969,16 including R91 746,29 owed to the intervening creditor in respect of the mortgage bond registered over the fixed property. In order to satisfy the J

Southwood J

requirements of s 6(1) of the Insolvency Act 24 of 1936, and in particular to show that they owned realisable property of A sufficient value to defray all costs of sequestration, which under the Act are payable out of the free residue of the estate, and that sequestration will be to the advantage of creditors, the applicants annex to their founding affidavit two valuations of Christine Combrink, who practises as a property valuator under the name and style CVM B Valuations. According to Ms Combrink the forced-sale value of the fixed property is R85 000 and the movable property is R9 400. She has furnished a confidential report and affidavit in respect of both forms of property.

In their affidavit the applicants pertinently alleged that as far as they know no steps have been taken by their creditors to sell the fixed property by sale in execution. This is pertinently denied by the C intervening creditor.

While it is common cause that a mortgage bond was registered over the property on or about 15 July 1997, the history thereafter is not. The intervening creditor testifies that after the registration of the D mortgage bond over the property the applicants fell into arrears with their monthly instalments and that the arrears in respect thereof as at 16 July 2002 amounted to R10 950,99 together with interest thereon at the rate of 16% per annum calculated from 1 July 2002 to date of payment. Because of the applicants' failure to make payment to the intervening party of the instalments due under the E mortgage bond promptly on due date the full outstanding amount owing by the applicants to the intervening party became due and payable. On 16 July 2002 the outstanding balance amounted to R99 197,97 together with the interest thereon at 16% per annum calculated from 1 July 2002 to date of payment. F

Because the applicants fell into arrears some time ago, which resulted in the full outstanding amount owing to the intervening creditor becoming due and payable, the intervening creditor foreclosed on the mortgage bond and issued summons against the applicants. Pursuant to this summons the intervening creditor obtained an order against the applicants for the attachment of the immovable property and G after attaching the property pursuant thereto the intervening creditor instructed the sheriff to arrange a public auction. On 26 June 2002 a sale of the applicants' immovable property by way of public auction took place, the property being sold to a third party who purchased the immovable property for R16 000. Before filing the affidavit of the intervening creditor the attorney for the intervening H creditor established that the transfer of the property had not yet taken place but that it was imminent. The applicants have not disputed this and it is borne out by the order made on 23 July 2002 which prohibited the intervening creditor from transferring the property sold in execution into the name of the purchaser. I

It is well settled what an applicant for voluntary surrender must do to prove that his/her sequestration will be to the advantage of creditors. In Nell v Lubbe 1999 (3) SA 109 (W) at 111D - G Leveson J stated the position as follows: J

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'The purpose of furnishing a sworn valuation is therefore to establish the price that is likely to be realised from the sale of the A property on what is called a forced sale so that it can be determined that there will be a free residue available for creditors and advantage to creditors is thereby established. A...