Medbond (Pty) Ltd v de Meyer

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: TA Maumela J
• Judgment Date: 22 April 2021
• Court: North Gauteng High Court, Pretoria
• Hearing Date: 22 April 2021
• Docket Number: 55163/2019

Maumela J:

INTRODUCTION.

1.

In this case, the Applicant, Medbond (PTY) Ltd, applied for the sequestration of the Respondent's estate. It seeks a rule nisi for the provisional sequestration of the Respondent's estate, followed by a return date, (to be determined), for an order confirming the rule nisi. [1]

2.

The Respondent is indebted to the Applicant. The debt is premised on a loan made by the Respondent to the Applicant. The amount of the loan is R 464 907.35. Applicant's application for the sequestration of the Respondent is premised on the contention that the latter has become factually insolvent. It is the contention of the Applicant that it shall be in the interests of creditors if the Respondent is declared to be insolvent.

3.

The Respondent delivered his notice of intention to oppose the sequestration application. He also filed his answering affidavit, whereupon the Applicant in return, filed a subsequent Replying Affidavit. In opposing the application for his sequestration, the Respondent raised the following defences:

3.1

That he, (the Respondent), is not factually insolvent, and

3.2

Although he, (the Respondent), admits that he received money from the Applicant, he denies that the money he received was in the form of a loan.

4.

The Applicant contends the adjudication of this application has to involve a focus on the following issues:

4.1

The undisputed facts relevant to the present application.

4.2

The requirements for relief in terms of section 10 of the Insolvency Act.

4.3

The defences raised by the Respondent and

4.4

The relevant facts as appears from all affidavits filed by the Applicant and the Respondent.

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UNDISPUTED FACTS.

5.

The following facts are admitted; not dealt with by the Respondent, or merely noted by him:

5.1

The amounts as received by the Respondent which were paid over to the Applicant;

5.2

Financial difficulties, which the Respondent experienced when he joined the Applicant;

5.3

The relationship between the Applicant and the Respondent where Respondent worked for the Applicant an as an independent broker;

5.4

That this relationship terminated during the course of January 2019;

5.5

That the Respondent wants to pay back the money he received from the Applicant.

6.

In the background of the above facts, the Court is required to consider granting the relief sought by the Applicant. An applicant who seeks an order for the provisional sequestration of a debtor's estate is required to prima facie establish the following:

6.1

That he/she, it holds a claim against the debtor as intended in Section 9 (1) of the Insolvency Act;

6.2

That the debtor has committed an Act of Insolvency or is factually insolvent;

6.3

That there is reason to believe that it will be to the Advantage of Creditors of the debtor, if the Respondent's estate is sequestrated.

7.

The Applicant submits that through the uncontested facts, it has been established that:

7.1

The Respondent did receive, the amounts set out in paragraph 7.11 of the founding affidavit; from the Applicant.

7.2

That the Respondent, indicated that he wants to pay back the money to the Applicant, (although he denies that the amount he received was in the form of a loan).

7.3

The Respondent was indeed in a position of financial

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difficulty when he joined the brokerage firm of the Applicants; and this became the underlying causa for the loan. (If the Respondent were not in a situation of financial difficulty, there would have been no underlying causa for the loan.

8.

Applicant contends that the "defences" raised by the Respondent are no more than an attempt to delay payment which is in any event inevitable. There is no bona fide, genuine or real dispute of fact or defence disclosed by the Respondent.

9.

"A bona fide dispute" on "reasonable grounds" is described as follows in LAWSA, Vol 4, part 3, par 69: "A debt is not 'bona fide disputed' simply because the respondent company says that it is disputed. The dispute must not only be bona fide or genuine but must be on good reasonable and substantial grounds. The expression 'genuine dispute' connotes a plausible contention requiring the same sort of consideration as a serious question to be tried. It is not sufficient for the company to merely establish that there is a serious question to be tried as to whether the dispute over the debt is genuine in that the debt is disputed on the basis of an honestly held belief that it is not payable and is not disputed merely for the purposes of delay or obstruction. 'Genuine' in this context means not fabricated for purposes of the proceedings or not just thought up or brought forward without genuine belief: There can be no genuine dispute if there are no substantial grounds for disputing the debt." (Own emphasis added)

10.

In the case of Wightman t/a JW Construction v Headfour (Pty) Ltd 2 , the following was stated, in respect of a bona fide dispute: "A real, genuine and bona fide dispute of fact can exist only where the court is satisfied that the party who purports to raise the dispute has in his affidavit seriously and unambiguously addressed the fact said to be disputed."

11.

The Applicant submits that the "disputes" or "defences" raised by the Respondent are not bona fide or genuine. It avers that such defences are not based on good, reasonable and

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substantial grounds. It advances the following substantiation of that assertion.

11.1

The Respondent admits that he received money from the Applicant however, he denies that he received it as a loan.

11.2

He does not advance any rebuttal, save for his contention to the effect that the money which he received was not a loan.

11.3

He says that he wishes to pay back the money which he received.

11.4

It begs the question why a reasonable person would tender to pay money of this magnitude if it is indeed not due owing and payable?

12.

In the case of Wightman t/a J W Construction v Headfour (Pty) [2] , the court stated the following concerning a real, genuine and bona fide dispute of fact: "A real, genuine and a bona fide dispute of fact can exist only where the court is satisfied that parties who purports to raise the dispute have in their affidavits seriously and unambiguous addressed the disputed facts. A bare denial may meet the requirement if there is no other option. But it may not be sufficient if the averment is within the knowledge of the of the averring party and a basis is not set for disputing the veracity or accuracy of the averment."

13.

The prevailing principles, in the assessment of a Respondent's defence, were summarised in the matter of Ter Beeck v United Resources CC and Another [3] , where the court stated the following: "In view of the aforementioned dispute between the applicant and the first respondent, this matter can be decided on a consideration of the probabilities only if I am satisfied that there is no real and genuine dispute of fact; that the first respondent's allegation is so far-fetched or untenable that their rejection merely on the papers is warranted; or that viva voce evidence will not disturb the probabilities appearing from the affidavits. Although it is undesirable to endeavour to resolve disputes of fact on affidavit without the hearing of evidence and

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seeing and hearing witnesses before coming to a conclusion it is equally undesirable to accept disputes of fact at their face value, because if that were done an applicant could be frustrated by the raising of fictitious issues of fact by a respondent. Accordingly, a court should in every case critically examine the alleged issues of fact in order to determine whether in truth there is a dispute of fact that cannot be satisfactorily determined without the aid of oral evidence."

14.

The aforementioned principles were more recently further enunciated in the anonymous judgment of the Supreme Court of Appeal in PMG Motors Kyalami (Pty) Ltd and Another v First Rand Bank Ltd, Wesbank Division [4] . when the Honourable Court stated that: "This court has held that a real and genuine and bona fide dispute of fact can only exist where the court is satisfied that the party who purports to raise the dispute has in his affidavit seriously and unambiguously addressed the fact so to be disputed. It has also held that where a version consists of bald or uncreditworthy denials, raises fictitious disputes of fact, is palpably implausible, far-fetched or ... clearly untenable. The court is justified in rejecting it merely on the papers."

15.

The applicant submits that in casu, the court has to dismiss the Respondent's defences out of hand. If regard is had to the principles mentioned above, it becomes evident that the Respondent's defences simply do not pass muster and they fall to be rejected.

THE RESPONDENT'S FACTUAL INSOLVENCY.

16.

The Applicant submits that actual insolvency denotes that a debtor's liabilities actually exceed the value of his assets. It contends that it is evident from the Respondent's own estimation of its debts that it is most likely that its liabilities indeed exceed his assets. Applicant submits that the Respondent did not properly quantify the liabilities in its answering affidavit and that this is an attempt to mislead the Court and to try and make his balance sheet or current

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financial outlook better than what it is in reality.

17.

In the case of Ex parte Fouchè, it was held that it is only when it is established that it is improbable that the debtor's assets will realise sufficient proceeds to settle the amount of his debts in full that it can truly be said that the Court ought to be satisfied that the estate of the debtor is insolvent.

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