MG v KG

• Jurisdiction: South Africa
• Judge: Davis AJ
• Judgment Date: 28 June 2013
• Docket Number: 6953/13
• Court: Western Cape High Court, Cape Town
• Hearing Date: 11 June 2013
• Citation: 2013 JDR 1591 (WCC)

Davis AJ:

[1]

On 13 June 2013 I dismissed an urgent application brought by the applicant for the sequestration of the respondent's estate with costs on an attorney and client scale. Due to time constraints I was not able to furnish reasons at the time, and indicated that reasons for judgment would follow. These are the said reasons.

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Davis AJ

[2]

The applicant and the respondent are currently engaged in divorce proceedings in which the applicant claims, inter alia, payment of lifelong maintenance from the respondent. Applicant launched this application on an urgent basis on 6 May 2013 for the provisional sequestration of the respondent's estate, together with interim interdictory relief preventing the respondent from encumbering or disposing of assets in his estate in the event of the application being postponed. When the matter first came before me on 13 May 2013, the respondent opposed the application and sought a postponement so as to afford him time to prepare answering affidavits. The respondent also opposed the interim interdict sought by the applicant. I granted an order on 14 May 2013 postponing the matter and regulating the filing of further papers. I also granted certain interim relief, albeit of a narrower scope than that requested by the applicant, and indicated that I would furnish reasons for so doing at a later stage.

[3]

The respondent opposes the application for the sequestration of his estate on the grounds that the applicant lacks the requisite locus standi as a creditor, that he has not committed and act of insolvency, that he is not insolvent, and that the application has been brought for an ulterior purpose and is an abuse of process.

[4]

The applicant alleges that the respondent is indebted to her in an amount of at least R 289 557.31 in respect of arrear maintenance owing to her in terms of an order in terms of rule 43 of the Uniform Rules of Court, which was granted by this Court on 8 December 2011 ('the order'). More particularly, she alleges that an amount of R 170 500.00 is owing to her in respect of short payment of the monthly cash portion of

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Davis AJ

R 34 000.000 owing in terms of the order, and that the balance is owing to her in respect of various expenses which the respondent was ordered to bear in terms of the order, including, inter alia, monthly bond payments and rates and taxes owing on the matrimonial home, [1] medical aid premiums, reasonable medical expenses, educational expenses for the minor children, reasonable repairs and maintenance to the matrimonial home, and salary and bonus for the full time domestic worker employed in the matrimonial home. It is common cause that the respondent was obliged to pay amounts totaling some R 140 000.00 per month in terms of the rule 43 order.

[5]

The respondent alleges that he complied with the order until and including July 2012, and that in July 2012 he launched an application in terms of rule 43(6) ('the July rule 43(6) application) to vary the order on account of the fact that he could not comply with the terms thereof due to a material change in his circumstances. The applicant challenged his application on the grounds that his supporting affidavit was unduly prolix, whereupon respondent withdrew the July rule 43(6) application and replaced it with a less voluminous application in November 2012 ('the November rule 43(6) application).

[6]

The respondent seeks in the November rule 43(6) application to have the order varied retrospectively with effect from 1 August 2012, inter alia by reducing the monthly cash maintenance payable from R 34 000.00 to R 10 000.00, directing him to pay the wages of a domestic worker employed twice a week rather than full time, placing certain limitations on the medical expenses payable for the applicant and the minor children,

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Davis AJ

and doing away with the obligation to fund the monthly bond payments and various other household expenses in connection with the matrimonial home.

[7]

The respondent alleges that, since August 2012, he has paid reduced maintenance to the applicant in the approximate sum of R 35 000.00 per month, which exceeds the revised amount contemplated in the varied order which he seeks. The respondent contends that, if he is successful in the rule 43(6) application, the effect will be to expunge any claim which the applicant may have against him for arrear maintenance owing in terms of the order. These allegations are not disputed by the applicant.

Locus Standi

[8]

Section 9(1) of the Insolvency Act 24 of 1936 ('the Act') requires that an applicant creditor shall have a liquidated claim against the debtor for not less than R 100.00.

[9]

The respondent argues that the effect of the November rule 43(6) application, which preceded the present application, is that the applicant does not have a liquidated claim against the respondent inasmuch as the quantum of maintenance payable by him with effect from 1 August 2012 is as yet to be determined. He argues that the applicant's alleged claim against him is at best conditional and un-quantified, and does not, therefore, qualify as a liquidated claim for the purposes of section 9(1) of the Act.

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Davis AJ

[10]

The applicant's argument may be summarized thus: the order is valid until such time as it is set aside, and that the applicant's claims based thereon are fixed and unconditional. It is the respondent's right to pay a reduced amount which is conditional upon the retrospective variation of the order in the terms sought by him. Accordingly, as in the case where a creditor relies on a default judgment which a debtor seeks to have rescinded, a provisional order of sequestration ought to be granted and the return day postponed pending determination of the November rule 43(6) application. At best the application ought to be postponed pending the outcome of the said application, with appropriate interim relief granted along with the postponement.

[11]

As a starting point it is necessary to consider the nature and purpose of rule 43, namely to provide for the temporary regulation of relevant matters, including maintenance, pending the final determination of matrimonial proceedings. Rule 43 provides for a speedy, inexpensive and robust assessment of the issues on motion proceedings. [2] Rule 43(6) allows for the Court to vary its decision under rule 43(5) in the event of a material change taking place in the circumstances of either party or a child. The temporary nature of relief under rule 43 is underscored by the fact that orders granted in terms thereof are not subject to appeal.

[12]

The respondent has applied for relief in terms of rule 43(6) with retrospective effect from 1 August 2012. Counsel for both parties accepted that it is competent for the

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Davis AJ

Court to grant retrospective relief in terms of rule 43(6), and I could not find any authority to the contrary. I can see no reason in principle why a Court should be prevented from granting a retrospective variation of an interim maintenance order in terms of rule 43(6), where the interests of justice so require, having regard to the nature and purpose of the sub-rule. Indeed the order, which was granted on 18 December 2011, was made with retrospective effect from 1 October 2011.

[13]

It is common cause that, if the respondent is wholly successful in obtaining the relief which he seeks in terms of the November rule 43(6) application, the respondent will not owe the applicant any amount in respect of arrear maintenance. If he is partially successful in reducing his obligations in terms of the order, the applicant's claim will be reduced to the extent of his success.

[14]

The position, therefore, is that the amount which the respondent owes the applicant, if any, depends on the outcome of the proceedings which are pending in terms of rule 43(6).

[15]

Mr. Studti, who appeared for the respondent, referred me to the case of Gilliatt v Sassin [3] in support of his contention that the applicant's claim is not liquidated. In that case the issue was whether or not the applicant creditor had a liquidated claim in circumstances where she relied on an amount due to her as heir in terms of the first and final liquidation and distribution account in her late mother's estate, which the

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respondent, the executor, had misappropriated out of the estate. The respondent took the point that the estate account had not yet been finally approved by the Master, and that it was possible that the Master might require amendments to the estate account, in which case the amount due to the applicant would be subject to alteration. The court was called upon to determine whether, in these circumstances, the applicant had a liquidated claim entitling her to apply for the sequestration of the respondent's estate. Van Winsen J held that the claim was not liquidated, reasoning as follows: [4]

'To be regarded as a liquidated claim the petitioner's claim must be fixed and determined. This Court, in the case of Stephan v Khan 1917 CPD 24 – a decision which has frequently been followed not only in this Court but in other Courts – held that "liquidated claim", as those words are used in sec. 9(1) of the 1916 Insolvency Act, mean a claim the amount of which has been determined by a judgment of the Court, by agreement or otherwise.

Now, in the present case the amount of the petitioner's claim – and indeed whether she will have a claim at all – is conditional upon whether the account in the estate of the petitioner's late mother is accepted in the form in which it presently stands. The account has, however, still to be advertised and objection may successfully be taken thereto, which might have the effect of reducing her claim or even eliminating it altogether. Mr. Meyerowitz stated that in any event she...