International Financial Advisors Kscc v Wood

• Jurisdiction: South Africa
• Judge: Mbatha J
• Judgment Date: 26 November 2013
• Docket Number: 1583/2013
• Court: KwaZulu-Natal High Court, Durban
• Hearing Date: 27 September 2013
• Citation: 2014 JDR 0549 (KZD)

Mbatha, J

[1]

The applicants applied for an order provisionally sequestrating the joint estate of the respondents who are married in community of property. It is common cause on the papers that the respondents either committed an act or acts of insolvency or are in fact insolvent and that the applicants have locus standi as creditors to bring this application. The extent of the debts of the respondents is approximately R8million and the only issue in dispute between the parties is whether or not the

2014 JDR 0549 p2

Mbatha, J

provisional sequestration of the respondents would be to the advantage of creditors like the applicants who are owed approximately R4million by the respondents by way of a judgment in favour of the applicants against the respondents dating back to October 2010.

[2]

The applicants are adamant that the sequestration will benefit creditors while the respondents contend otherwise.

[3]

The test for a provisional sequestration is whether the balance of probabilities prima facie favours the applicants and in this case in particular whether there is reason to believe that the provisional sequestration will benefit not only the applicants but the body of creditors as a whole. I am mindful of the fact that the onus is on the applicants to prove this aspect in order for the application for the provisional sequestration of the respondents to be granted.

[4]

The applicants purported to make out a case that the sequestration of the respondents would benefit creditors by referring to a number of entities and trusts in which particularly the first respondent had and may still have a viable interest and that a duly appointed trustee

2014 JDR 0549 p3

Mbatha, J

armed with the insolvency legislation will uncover assets which will yield a not negligible dividend to the general body of creditors and it is claimed that the prospect of such a result is by no means a remote prospect.

[5]

The respondents and their children emigrated to the United States of America and the respondents are the holders of what was referred to as "green cards" to enable them to secure employment in that country and eventually full citizenship. They deny that they have any tangible assets in the Republic of South Africa capable of being converted into any tangible means of contributing to their admitted debts to creditors. If they had such assets capable of being attached, so they argue, the applicants could have used the process of execution to locate such assets and in that way have sought to recover what was due to them.

[6]

The applicants in both the founding affidavit and further in the replying affidavit itemised various assets in which the first respondent may have a financial interest and to this must be added the fact that these assets were not uncovered with the assistance of the respondents as this...