Nedbank Ltd v Thorpe

• Jurisdiction: South Africa
• Judge: Levinsohn DJP
• Judgment Date: 26 September 2008
• Docket Number: 7392/2007
• Court: Natal Provincial Division
• Hearing Date: 30 May 2008
• Citation: 2008 JDR 1237 (N)

Levinsohn DJP:

[1] In these proceedings the applicant seeks in the first instance an order provisionally sequestrating the estate of the respondent.

[2] The case made out by the applicant's deponent, one Natalie Backman, in its founding affidavit is summarised as follows.

[3] The applicant avers that as at 20th June 2007 the respondent is indebted to the applicant in an amount

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of R6 093 748,50. This debt arises out of various advances made by the applicant's predecessors to a trust represented by the respondent and in respect of which the respondent assumed liability as a surety and co-principal debtor. The judgment in question became final in 2003 when the Supreme Court of Appeal dismissed his appeal. Since that time the respondent has made no effort to discharge this indebtedness.

[4] The applicant makes the case that the respondent has established various family trusts which he effectively uses to insulate his wealth from creditors and thereby to frustrate the efforts of his creditors to recover the debts owed to them.

[5] The applicant accordingly submits that if his estate is sequestrated and a trustee is appointed such trustee will be able to fully investigate the business affairs of the respondent, effectively pierce the veil of trusts and nominees, to locate assets which in reality belong to the respondent personally.

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For that reason the sequestration will be for the benefit of the respondent's creditors.

[6] The deponent proceeds to set out the history of the indebtedness to the applicant's various predecessors in title. It is in my view unnecessary to summarise this save perhaps to focus on the Wentworth Trust case. According to the applicant this case commenced in 1998 and was finalised in September 2003.

[7] The factual background was the following. A company, Eastshore Development (Pty) Ltd, wished to develop certain properties in the St Francis Bay area of the Eastern Cape. NBS Bank Ltd (one of the applicant's predecessors in title) advanced funds by way of separate loans to the three shareholders. One of them was a trust, namely the Wentworth Trust. The respondent stood surety for the debt of the Wentworth Trust in respect of monies that were advanced to it. By October 1997 the Wentworth Trust was in arrears with its instalments. The property development company was subsequently liquidated.

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[8] Action was instituted against both the Wentworth Trust, that is to say, its respective trustees, and the respondent personally in his capacity as a surety and co-principal debtor. Ultimately after unsuccessful appeals to the Natal Provincial Division and to the Supreme Court of Appeal the respondent stood indebted in terms of a judgment of the Court for the amount of R2 816 891,68 together with interest from 7th March 2000 to the date of payment and costs. As at 20th June 2007 the respondent's liability arising from the said judgment amounts to R6 093 738,50. No payments whatsoever have been received from the respondent in respect of this judgment.

[9] The respondent contends that he is possessed of no assets, no income and does not have the means to settle the debt. This carries with it the admission that the respondent is indeed insolvent. The applicant in the year 2004 moved for the provisional sequestration of the respondent. This application came before McCall J and was unsuccessful.

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[10] Following upon this the applicant instituted an inquiry into the respondent's financial position in terms of section 65 of the Magistrates Court Act, No 32 of 1944. The respondent was questioned at some length at this inquiry and as I understand the position it has not been concluded. A transcript has been annexed to the applicant's founding affidavit.

[11] The applicant has ascertained the following facts:-

[11.1]

The Robin Thorpe Family Trust was established in 1985.

[11.2]

This trust changed its name to the Banavie Trust on 4th July 2002.

[11.3]

The income beneficiaries of the trust are the respondent, his wife and two children.

[11.4]

The respondent has no immoveable properties registered in his name.

[11.5]

He resides at 8 Ferndale Avenue, Morningside, Durban. This property was previously owned by the Robin

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Thorpe Family Trust. It was transferred out of the trust into the name of the respondent's wife, Mrs Helen Thorpe.

[11.6]

The respondent had the use of a 2005 Bentley Continental GT sports car valued at R2 500 000. This motor vehicle was purchased by the Banavie Trust for the respondent's personal use. The Banavie trust was the registered owner of the vehicle. It was purchased in February 2005. The said trust paid the monthly instalments on the vehicle in an amount of R20 820 a month. The respondent personally negotiated the acquisition of the vehicle and provided his personal suretyship in favour of the bank which financed the transaction.

[11.7]

A search of the records of the Registrar of Companies revealed that

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the respondent was either a director or member of at least seven companies and close corporations.

[12] The founding affidavit then goes on to traverse certain facts relating to the respondent's occupation.

[13] Up to the end of 1999 the respondent's occupation was that of a short-term insurer broker. His business was Thorpe Insurance Brokers (Pty) Ltd. It appears that the respondent owned shares in Thorpe Insurance Brokers (Pty) Ltd. At some stage the shares in the latter company were transferred to the respondent's family trust, namely, the Banavie Trust. In 1999 the Registrar of Short-Term Insurance sought and obtained an interdict against both the latter company and the respondent personally which prohibited them from continuing to act as short-term insurance brokers. Thereafter Thorpe Insurance Brokers (Pty) Ltd was put into liquidation.

[14] According to the applicant the respondent, notwithstanding the interdict, continues to operate a short-term insurance brokerage. The applicant avers that the subpoena in terms of section 65 was served at

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a short-term broking firm called Insurance on Line at Fourth Floor, Hampdon Court, Hampdon Road, Morningside, Durban. The applicant avers that "Insurance Online" is the trading name of a South African company called County Capital (Pty) Ltd.

[15] In his evidence at the section 65 inquiry the respondent testified that during 1998 or 1999 he had disposed of his shares in County...