Provincial Building Society of South Africa v Du Bois

• Jurisdiction: South Africa
• Judge: Trollip J
• Judgment Date: 30 March 1965
• Citation: 1966 (3) SA 76 (W)
• Hearing Date: 15 February 1965
• Court: Witwatersrand Local Division

Trollip, J.:

This is an application for a provisional order of sequestration which is opposed.

The respondent is indebted to the applicants in the sum of R28,323 in respect of mortgage bonds over certain immovable properties belonging to the respondent.

G The applicants alleges that the respondent (1) committed an act of insolvency, and (2) is insolvent. It is clear that, if either or both facts are established, the sequestration would be to the advantage of creditors.

H In regard to (1) the facts are as follows. The present application was set down for hearing on 3rd November, 1964. The respondent requested a postponement of two weeks in order to enable a prospective purchaser, J. B. Robinson, to buy his properties which presumably would have enabled him to pay the applicants. The applicants were agreeable to the postponement provided respondent paid R200 towards their costs and signed a letter dictated by the attorneys of the applicants who could then use it as they though fit if the sale did not eventuate. Respondent agreed, paid R200, and signed the letter. Robinson was unable to purchase the properties.

Trollip J

It is appropriate here to mention that at the hearing Mr. Miller, for the respondent, applied for leave to hand in a further affidavit to the effect that another deed for the sale of the properties was signed on 6th January, 1965, with one Filmer. This was opposed by Mr. Brozin, for the applicants, and I refused the application, firstly, because no A explanation was proffered why this information was only disclosed at that late stage of the proceedings, and secondly, its relevance was not made apparent to me.

The applicants relied upon the afore-mentioned letter signed by the respondent as an act of insolvency. It reads as follows:

B 'With reference to the above-mentioned matter I confirm that I am unable to settle my indebtedness forthwith due to financial embarrassment and confirm that I have requested you to postpone the application which is on the roll in the Witwatersrand Local Division for 3rd instant for two weeks to enable the proposed buyer of my properties to endeavour to implement the deed of sale.

I confirm that I will be liable for all costs incurred to date and confirm that I will to-day pay the sum of R200 to you on account of the sequestration costs.'

Prima facie, it constitutes notice in writing of the respondent's inability to pay his debts and is, therefore, an act of insolvency within the meaning of sec. 8 (g) of the Insolvency Act, 24 of 1936. The respondent maintains, however, that he was compelled to sign it as the price of getting the postponement and it should not, therefore, be taken literally as an admission of insolvency if the actual facts show that he D is not insolvent. There is some force in that submission and I think that the correct attitude to adopt is that, although the letter is prima facie an act of insolvency, the Court should not in the exercise of its discretion under sec. 10 order the provisional sequestration of the respondent's estate on that ground alone, but only if it is also of the E opinion that prima facie the respondent is insolvent. C

I therefore turn to (2), that is, the question of respondent's insolvency.

The applicants value respondent's immovable properties that are bonded to them at R27,700 which is less than the amount of their claims F (R28,323), and have put forward many facts showing that for some time respondent has not paid several of his debts. Mr. Brozin has also pointed to certain admissions of inability to pay in the respondent's own affidavit. From all that there is a strong inference that the respondent is insolvent. He, on the other hand, values those properties at R55,000, and, with other properties and assets, he maintains that G there is an appreciable excess in value of his assets over liabilities. There is no need for me to enter upon the details of the parties' respective cases because Mr. Miller conceded, correctly in my view, that the affidavits showed, on a balance of probabilities, that the respondent was insolvent. He argued, however, that the authorities, such as Ohlsson's Cape Breweries Ltd v Totten, 1911 T.P.D. 48 at p. 50, H required that where general insolvency is relied upon

'there must be no doubt about the facts. The Court must not be left to conjecture. . . . The applicant (must show) clearly that the respondent's liabilities exceed his assets;'

and that consequently, as the facts were in dispute, viva voce evidence might disturb that balance of probabilities, and that the issue, therefore, whether there was clear proof of the respondent's insolvency, could not be finally determined on the affidavits. Therefore, relying upon certain

Trollip J

well-known cases presently to be considered, he applied for the matter to be referred to viva voce evidence. Mr. Brozin resisted the application and maintained that at this stage of the proceedings, when applicants were only applying for a provisional order of sequestration, A all that need be shown by them under sec. 10 of the Insolvency Act was that on the affidavits respondent was prima facie insolvent, and that that had been done.

In regard to the requirement of clear proof of insolvency contended for by Mr. Miller, I was referred to Schneider, N.O v Raikin, 1954 (4) SA 449 (W) B , by Mr. Brozin. It was there decided by STEYN, J. (now...