Ex parte Oosthuizen

• Jurisdiction: South Africa
• Judge: Landman J
• Judgment Date: 12 July 2012
• Docket Number: 607/2012
• Court: North West High Court, Mafikeng
• Hearing Date: 05 July 2012
• Citation: 2012 JDR 1189 (NWM)

Landman J:

[1]

The applicant, Daniel Johannes Hendrik-Oosthuizen, was sequestrated by order of this Court on 17 September 2009. The applicant now applies for an order that:

(a)

the applicant be rehabilitated;

(b)

the Trustee be ordered to pay

(c)

the costs of the application be payable by the applicant

[2]

In heads of argument filed after judgment was reserved it was pointed out that the applicant would have been entitled to apply for his rehabilitation of his estate after six months from date of sequestration, in terms of section 124(3) as at that stage no claims

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Landman J

had been proven against said estate; the Master still had to appoint the trustee. Such rehabilitation would also have resulted in re-investing the insolvent with his estate in terms of section 129(2) of the Act. But that it water under the bridge. The applicant now applies for his rehabilitation on the basis of section 124(5) of the Insolvency Act 24 of 1936 (the Act). This subsection reads as follows:

"At any time after the confirmation by the Master, of a plan of distribution providing for the payment in full of all claims proved against an insolvent estate, with interest thereon from the date of sequestration, calculated in terms of subsection (2) of section one hundred and three and of all the costs of sequestration, the insolvent concerned may apply to the court for his rehabilitation: Provided that he had not less than three weeks before making the application given notice in writing to the Master and to the trustee of his estate of his intention to make the application."

[3]

Fannin J in Ex parte Driemeyer 1967 (2) SA 546 (N) at 550C-G, after reviewing the provisions of the Act relating to the late proving of claims, says this about the object of the subsection:

"Thus is seems to me, one of the objects of providing that the application contemplated by sec. 124(5) should be made after the confirmation of the plan of distribution referred to was to give unproved creditors an opportunity of proving or seeking to prove their claims before the plan of distribution is confirmed by the Master. To allow an insolvent to take advantage of the provisions of sect. 124(5) where no plan of distribution such as is referred to has ever been filed would in my view open the door to abuse. An insolvent in whose estate there were, at the time of the filing of an earlier plan or earlier plans of distribution, but few free assets might well, by persuading someone, like the present applicant's father, to give or lend him enough money to pay in full, with interest, the few creditors who have proved their claims, obtain his rehabilitation when, in fact, the majority – or even all – his unsecured or non-preferent creditors have received nothing at all, and when under the other portions of sec. 124, he has no right to apply for his rehabilitation. It was to prevent such situations arising that, in my view, that Legislature wisely provided that application could be made after the confirmation by the Master of the plan of distribution referred to. Here there are some unproved creditors and the situation contemplated by the Legislature exists."

[4]

In order to bring his application within the ambit of this subsection, so that this court may exercise its discretion to grant him rehabilitation, the applicant must show that:

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(a)

The Master has confirmed a plan of distribution contemplated by the subsection:

(b)

That the plan provides for-

(i)

the payment in full of all claims proved against an insolvent estate,

(ii)

the payment of interest thereon from the date of sequestration, calculated in terms of section 103(2);

(iii)

the payment of the costs of sequestration.

(c)

The application is made after the above steps have been taken;

(d)

The prescribed procedure has been followed is that the applicant has not less than three weeks before making the application given notice in writing to the Master and to the trustee/s of his estate of his intention to make the application.

Confirmation of the plan

[5]

Has the Master confirmed the liquidation and distribution plan on which the applicant relies? The applicant, after explaining, the circumstances which gave rise to his insolvency, his present position and circumstances refers to an attached, but unsigned, e-mail from the office of J H Botha, Sechaba Trust. The email is written by one Belinda Coetzee to the effect that:

(a)

to the best of their knowledge, no objections were raised against the proposed Liquidation and Distribution Account;

(b)

they have received the Master's query sheet and it contained no objections to the proposed allocation and distribution of the funds as hand; and

(c)

they are not aware of any objection to a future rehabilitation.

[6]

There is no proof that the co-trustee, Mr Botha, authorise this communication but nothing turns on this. No such communication was sought or received from the co-trustee, Mr M L Ledwaba, of Tshwane Trust.

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[7]

The applicant goes on to allege that:

"in the absence of any formal objections by the Master with regards to the distribution plan contained in the aforementioned Liquidation and Distribution Account, I do comply with the requirements of Section 124(5) as stated above."

[8]

The absence of an objection to the Liquidation and Distribution Account does not bring the applicant within the ambit of the subsection. The subsection requires that the Master confirm the plan which provides for the matters set out in the subsection. Nothing less will do. The applicant does not allege this. But the Master's letter addressed to Sechaba Trust, dater stamped 02 April 2012, states that:

"The first and final Liquidation, Distribution and/or Contribution Account in the above-mentioned estate was confirmed on 5 April 2012." (My emphasis)

The Master has filed a report (written by the Assistant Master). He does not say he has confirmed the plan nor does he explain the ambiguity about the dates. It does seem to be a mere mistake. I am satisfied that the Master has confirmed the plan.

Payment in full

[9]

The applicant says that:

"7.5

At the time of my sequestration the total amount of my liabilities amounted to R134, 782.82. I have attached hereto as Annexure "C" a copy of the Liquidation and Contribution Account, which shows that an amount of R13,129,56 was allocated for payment with regards to a single claim of R84,451,13. The dividend paid to creditors of my estate therefore amounts to 15c per Rand.

7.6

However, the relevant creditor limited their exposure for settlement of their claim exclusively to the realizable value of...