Maritz t/a Maritz & Kie Rekenmeester v Walters and Another; Maritz t/a Maritz & Kie Rekenmeester v Walters and Another (FirstRand Bank Ltd Intervening); Maritz t/a Maritz & Kie Rekenmeester v Walters and Others

JurisdictionSouth Africa
Citation2002 (1) SA 689 (C)

Maritz t/a Maritz & Kie Rekenmeester v Walters and Another;
Maritz t/a Maritz & Kie Rekenmeester v Walters and Another (FirstRand Bank Ltd Intervening);
Maritz t/a Maritz & Kie Rekenmeester v Walters and Others
2002 (1) SA 689 (C)

2002 (1) SA p689


Citation

2002 (1) SA 689 (C)

Case No

8154/2000, 8104/2000 and 8932/2000

Court

Cape Provincial Division

Judge

Macwilliam AJ

Heard

December 4, 2000; December 6, 2000; December 7, 2000

Judgment

December 15, 2000

Counsel

J N T Louwrens for the applicant.
T Dicker for the intervening creditor.
A S de Villiers for the intervening respondent.

Flynote : Sleutelwoorde B

Insolvency — Sequestration proceedings — Intervention of third parties — Well-established practice entitling certain parties C to intervene in sequestration applications discussed — Common-law powers of Court not curbed by Insolvency Act 24 of 1936 — Intervening D respondent having purchased asset of insolvent at sale in execution held prior to institution of sequestration proceedings — Intervening respondent having claim for transfer of asset against insolvent — In addition, stated purpose of sequestration proceedings to have trustee appointed for him to set sale aside — In such circumstances intervening respondent having direct interest in proceedings and thus required E locus standi to intervene.

Insolvency — Compulsory sequestration — Applications for — 'Friendly sequestrations' — Rationale for Courts' suspicion of such sequestrations being that they may constitute abuse of process and prejudice interest of creditors — Mere co-operation between debtor and creditor not per se objectionable. F

Execution — Sale in execution — Advertisement of — Rule 43(6)(b) of Magistrates' Courts Rules — Purpose of description of property in notice of sale not merely to identify property, but to inform public what is being sold with object of attracting bidders so as to obtain highest possible price — Nature of description required depending on circumstances and particular character and locality of property in question. G

Headnote : Kopnota

The purpose of the description of immovable property in a notice of sale in execution in terms of Rule 43(6)(b) of the Uniform Rules of Court is not merely to identify the property, but to inform the public of what is being sold with the object of attracting bidders H so as to obtain the highest price possible. The description required in each case will depend on the circumstances and the particular character and locality of the property in question. (Paragraphs [41] and [42] at 701F/G - I.)

The first of the present three applications was for the sequestration of the respondents, a couple married in community of property. The application was made by their accountant, who alleged that the I respondents had committed an act of insolvency as intended in s 8(g) of the Insolvency Act 24 of 1936 by informing him in a letter that they were unable to pay their account. The applicant alleged that the respondents were in fact insolvent and that it would be to the advantage of their creditors if their estate were to be sequestrated. The respondents were the owners of a farm which had J

2002 (1) SA p690

been sold at a sale in execution to one S, at a price (R550 000) that was, according to the applicant, well below its market value. A Thereafter a second application was brought by the F Bank for leave to intervene as intervening creditor. The bank associated itself with the allegations regarding the insolvency of the respondents and averred that most of the first respondent's debt to it (some R396 000) was secured by a second mortgage bond over the farm and that the farm had been declared specially executable. A representative of the bank B had attended the sale in execution but did not bid, allegedly because it feared that any bid it may have made would have been substantially less than the amount owing to the first bondholder, a government department. The bank noted 'with concern' that S intended to purchase the applicant's claim so as to effect the withdrawal of the sequestration application against the respondents. The bank concluded that it would be to the advantage of the general body of C creditors for a trustee to be appointed to the respondents' estate so that the sale of the farm to S could be set aside. Thereafter S launched a third application asking the Court to allow him to intervene as respondent. S alleged that he had a direct interest in the sequestration proceedings because he had purchased the respondents' farm at the sale in execution (at a price that, according to him, exceeded the market value). In doing so he had paid a D 10% deposit on the purchase price and incurred additional incidental expenditures (amounting in total to more than R112 000), which interest he intended to protect by opposing the application for sequestration on the ground that it amounted to a 'friendly sequestration'. S also attacked the bank's application to intervene as creditor on the ground that one of its representatives had been E present at the sale in execution but had made no offer. This, alleged S, meant that the bank had consented to the payment of its claim from the remaining proceeds of the sale in execution (ie after payment of the first bondholder) and the transfer of the farm to himself (S). The applicant and the bank in turn contended that S did not have locus standi to intervene in the proceedings because he was not a creditor of the respondents and thus lacked a F direct and substantial interest in the subject-matter before the Court. The Court referred to Fullard v Fullard 1979 (1) SA 368 (T), in which the practice with regard to the intervention of third parties in sequestration proceedings was set out, and

Held, that the fact was that it was the respondents' rights of ownership in the farm which S wished to have transferred to him. While it was so that the sale took G place at the instance of the execution creditor, the rights to be transferred to him pursuant thereto were those of the respondents themselves, and in this respect S had a direct claim against the respondents. There was, moreover, nothing in the Insolvency Act which in any way limited the common-law powers of the Courts in respect of intervention in sequestration proceedings. (Paragraphs [26] and [27] at 699C - E.) H

Held, further, that S's right to transfer of the farm was not a derivative right but one in which the respondents' rights of ownership was to be transferred directly to the intervening respondent. (Paragraph [28] at 699G - G/H.)

Held, further, that it could hardly be said that S lacked an interest in the litigation in circumstances in which the expressly stated purpose thereof was to have a trustee appointed so that he might be able to set aside the transaction which S sought to protect. I (Paragraph [31] at 700C - D.)

Held, further, that the Court's discretion to allow a party to intervene on grounds of convenience had to be exercised in favour of S so as to allow him to join the proceedings. (Paragraph [35] at 700H - I.)

Held, further, that the bank's argument that, because the description of the immovable property in the notice of sale pursuant to Rule 43(6)(b) of the J

2002 (1) SA p691

Magistrates' Courts Rules was defective, the sale itself was void, thus depriving S of locus A standi, was fallacious: it confused a party's right to be heard with the determination of his cause of action. In the present matter neither the applicant nor the bank sought any relief in relation to the sale in execution, which had not yet been set aside, nor had they made any attempt to do so. (Paragraph [44] at 702A - B/C.)

Held, further, that an intervening respondent needed to provide no more than prima facie proof of his interest, B albeit in a sale which could be set aside, which S had done. (Paragraph [45] at 702C.)

Held, further that, in a case such as the present, where the locus standi of the applicant to attack the sale was in itself open to question, he ought not to be allowed to prevent the intervening respondent from appearing in order to try to protect his obvious interest in his own sale. (Paragraph [46] at C 702E/F - F/G.)

Held, further, as to S's attack on the application on the ground that it constituted a 'friendly sequestration', that the rationale for the suspicion with which such sequestrations were treated by the Courts was that they might amount to an abuse of the sequestration process and that the interests of creditors might suffer. In the instant case neither concern was justified: mere co-operation D between debtors and creditors was not per se objectionable, and the fact that the applicant, the bank and the respondents were all making common cause against the intervening respondent (S) did not mean that they were attempting to abuse the process of the Court or that they were not acting in the best interests of the creditors. On the contrary, if they were right and the farm was sold for too little, they were clearly advancing the interests of the creditors. (Paragraphs E [51] - [53] at 703B/C - F.)

Held, further, as to S's attack on the applicant's claim, that it was clear that the applicant was owed a debt by the respondents, that they had committed an act of insolvency as intended in s 8(g) of the Act and that the applicant had established a liquidated claim against the respondents in compliance with s 10(a) of the Act. (Paragraph [58] at 704G/H - I) F

Held, further, as to S's attack on the intervening creditor's claim, that the fact that the bank had agreed to accept the balance of the proceeds of the sale in execution, thereby enabling the transfer of the farm to S, did not constitute a waiver of the bank's right to recover the full amount owed to it from the respondents themselves. Accordingly the bank had...

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5 practice notes
  • Levay and Another v Van den Heever and Others NNO
    • South Africa
    • Invalid date
    ...Ltd v South African Manganese Ltd 1964 (2) SA 185 (W): referred to Maritz t/a Maritz & Kie Rekenmeester v Walters and Others 2002 (1) SA 689 (C): B referred to Minister of Local Government and Land Tenure and Another v Sizwe Development and Others: In re Sizwe Development v Flagstaff Munici......
  • Shapiro v South African Recording Rights Association Ltd (Galeta Intervening)
    • South Africa
    • Invalid date
    ...& Kie Rekenmeester v Walters and Another FirstRand Bank Ltd Intervening; Maritz t/a Maritz & Kie Rekenmeester v Walters and Others 2002 (1) SA 689 (C): referred to Mgobozi and Others v The Administrator of Natal 1963 (3) SA 757 (D): dictum at 760G - H applied J 2008 (4) SA p147 Minister of ......
  • Shapiro v South African Recording Rights Association Ltd (Galeta Intervening)
    • South Africa
    • Witwatersrand Local Division
    • 10 March 2007
    ...& Kie Rekenmeester v Walters and Another FirstRand Bank Ltd Intervening; Maritz t/a Maritz & Kie Rekenmeester v Walters and Others 2002 (1) SA 689 (C): referred to Mgobozi and Others v The Administrator of Natal 1963 (3) SA 757 (D): dictum at 760G - H applied J 2008 (4) SA p147 Minister of ......
  • Abdoola v Patel
    • South Africa
    • Gauteng Local Division, Johannesburg
    • 18 September 2019
    ...(C) at 252; Fullard v Fullard 1979 (1) SA 368 (T) at 371F – 372G. See also Maritz t/a Maritz & Kie Rekenmeester v Walters and Others 2002 (1) SA 689 (C) where it was accepted that the intervening party would have locus standi to oppose the sequestration if it could be found that he was a [3......
  • Request a trial to view additional results
5 cases
  • Levay and Another v Van den Heever and Others NNO
    • South Africa
    • Invalid date
    ...Ltd v South African Manganese Ltd 1964 (2) SA 185 (W): referred to Maritz t/a Maritz & Kie Rekenmeester v Walters and Others 2002 (1) SA 689 (C): B referred to Minister of Local Government and Land Tenure and Another v Sizwe Development and Others: In re Sizwe Development v Flagstaff Munici......
  • Shapiro v South African Recording Rights Association Ltd (Galeta Intervening)
    • South Africa
    • Invalid date
    ...& Kie Rekenmeester v Walters and Another FirstRand Bank Ltd Intervening; Maritz t/a Maritz & Kie Rekenmeester v Walters and Others 2002 (1) SA 689 (C): referred to Mgobozi and Others v The Administrator of Natal 1963 (3) SA 757 (D): dictum at 760G - H applied J 2008 (4) SA p147 Minister of ......
  • Shapiro v South African Recording Rights Association Ltd (Galeta Intervening)
    • South Africa
    • Witwatersrand Local Division
    • 10 March 2007
    ...& Kie Rekenmeester v Walters and Another FirstRand Bank Ltd Intervening; Maritz t/a Maritz & Kie Rekenmeester v Walters and Others 2002 (1) SA 689 (C): referred to Mgobozi and Others v The Administrator of Natal 1963 (3) SA 757 (D): dictum at 760G - H applied J 2008 (4) SA p147 Minister of ......
  • Abdoola v Patel
    • South Africa
    • Gauteng Local Division, Johannesburg
    • 18 September 2019
    ...(C) at 252; Fullard v Fullard 1979 (1) SA 368 (T) at 371F – 372G. See also Maritz t/a Maritz & Kie Rekenmeester v Walters and Others 2002 (1) SA 689 (C) where it was accepted that the intervening party would have locus standi to oppose the sequestration if it could be found that he was a [3......
  • Request a trial to view additional results

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