Shokkos v Lampert, NO

• Jurisdiction: South Africa
• Court: Witwatersrand Local Division
• Judge: Bekker J
• Judgment Date: 08 November 1962
• Citation: 1963 (3) SA 421 (W)
• Hearing Date: 25 October 1962

Bekker, J.:

The question, simply stated, which I have to decide in the C present matter is whether a trustee in an insolvent estate is privy to the insolvent in the following circumstances:

Plaintiff is the duly appointed trustee in the insolvent estate of one Maouris and sues, as such, having been duly authorised to proceed in that action by a resolution of the creditors in the estate for the recovery of £1,740, as well as other relief.

D On 1st July, 1959, defendant applied in this Court for an order sequestrating the estate of Maouris. In his petition he alleged that Maouris was indebted to him in the sum of £3,260, being the balance of the purchase price of a business sold by him to Maouris. The latter resisted the application on the basis that he owed defendant nothing. He E admitted that he had bought the business from defendant but stated that he and the defendant thereafter entered into a fraudulent scheme under which the sale would be regarded as cancelled and that defendant would be placed in possession of the business and furthermore that all claims due and still to become due against him under the agreement of sale F would then be regarded as cancelled. Maouris stated that in pursuance of this scheme he allowed a judgment to be entered against him after he had, as part of the scheme, deliberately dishonoured a promissory note payable to defendant as an instalment on the purchase price, thereby enabling defendant to take judgment against him. He also deliberately failed to pay his rent for the business premises as a result of which defendant eventually gained possession of the business of the business G as well as the premises.

After having heard counsel WILLIAMSON, J., granted a provisional order for sequestration since, so he decided:

'I am strongly of the opinion that respondent's story is grossly improbable, particularly in the light of the fact that the petitioner took steps to sequestrate the respondent and thereby exposes himself to H the probability that his fraudulent dealing with the respondent would be exposed. I think that prima facie on these papers the respondent is indebted to the petitioner as alleged in the petition; that the respondent is also insolvent, and that it is clearly in the interest, prima, facie, of his creditors that he be placed under sequestration.'

On the return day of the provisional order, i.e. 14th July, 1959, CILLIÉ, J., confirmed the provisional order. Maouris did not then appear or resist the confirmation of the provisional order of sequestration.

Sec. 12 (1) of the Insolvency Act, 24 of 1936, as amended, provides:

If at the hearing pursuant to the aforesaid rule nisi the Court is satisfied that -

Bekker J

(a)

the petitioning creditor has established against the debtor a claim such as is mentioned in sub-sec. (1) of sec. 9;

((b) and (c) are not relevant)

it may sequestrate the estate of the debtor.'

It must accordingly be presumed that the Court was satisfied on the return day that Maouris's defence stood to be rejected and that A defendant had established his claim.

I now turn to consider in so far as is necessary the action which plaintiff, the trustee in Maouris's insolvent estate, brought against defendant. It his declaration he alleged firstly that the deed of sale between defendant and Maouris in respect of the business was cancelled in June, 1959, and at a time when Maouris had already paid £1,740 off B the purchase price. He alleged that defendant accordingly became liable to repay that amount to the insolvent estate and that he, plaintiff, is presently entitled to receive it. It is to be observed that plaintiff does not allege or refer to any fraudulent scheme or fraudulent cancellation of the sale; but in his first alternative claim he sets out the facts on which Maouris relied in resisting the sequestration C proceedings and which, if true, would justify a finding that a collusive scheme was entered into between Maouris and the defendant in terms of which the former waived his claim for £1,740, and which plaintiff alleges constituted, in the premises, a voidable or undue preference or a collusive dealing in terms of the relevant provisions of D the Insolvency Act; accordingly that he as trustee is entitled to claim that amount from the defendant. In his second alternative claim plaintiff alleged that as a result of this fraudulent scheme defendant gained repossession of the business or alternatively of the fixtures and fittings in the premises, which again constituted a disposition of assets and a voidable preference in terms of the provisions of the E Insolvency Act. In this instance plaintiff claims that the disposition should be set aside and that defendant should be ordered to restore to plaintiff the business or, alternatively, the fixtures and fittings, or the value thereof and to pay such penalty as may be ordered in terms of sec. 31 of the Act.

F It is common cause that the agreement presently relied on by plaintiff in his declaration is the same agreement on which Maouris sought to rely, but one...