Stride v Castelein

• Jurisdiction: South Africa
• Court: Witwatersrand Local Division
• Judge: Marais J
• Judgment Date: 24 April 2000
• Citation: 2000 (3) SA 662 (W)
• Hearing Date: 24 April 2000
• Docket Number: 0273/2000
• Counsel: Application for provisional sequestration. The facts appear from the reasons for judgment. J Both for the applicant.

Marais J:

The applicant seeks an order provisionally sequestrating the respondent. No notice has been given to the respondent of these proceedings. The applicant justifies this lack of notice on the ground that the application is based upon a recent nulla bona return and what is claimed to be the practice of this Division. D

According to Mars The Law of Insolvency in South Africa 8th ed at \s 5.18 it is the practice of the Transvaal Provincial Division and other Provincial Divisions of the High Court to sequestrate persons without notice on the strength of a nulla bona return. For reasons which I later give this practice has always disturbed me. I therefore required argument after hearing which E I ruled that notice was to be given to the respondent and indicated that I would give reasons later. These reasons now follow.

The relevant paragraphs in Mars read as follows:

'5.18 The procedure to be adopted is not uniform throughout the Republic. In the Transvaal, notice of the application for a provisional order of sequestration is required, unless the applicant relies upon a F nulla bona return. If the return is older than six months, service in the usual manner is required. A Court notice of the Cape Provincial Division requires that notice of intention to apply for a provisional order be given to the respondent prior to the filing of the application, except where the applicant relies on a nulla bona return or an unequivocal notice by the respondent of his inability to pay any of his debts. The Court may at its discretion G dispense with his giving of notice where it would be in the interest of the respondent or the creditors to do so. In Natal, service is not required where the applicant relies upon a nulla bona return or upon documentary evidence of an independent character which confirms the allegations in the founding affidavit; in the Orange Free State service is not required where there is clear documentary proof of an act of insolvency in terms of s 8(c). On the other hand it was decided in South West Africa that even if the sequestrating H creditor relies on a "clear act of insolvency" such as a nulla bona return, there must be proper service on the debtor. A similar view was adopted in the Eastern Cape Division, where it was decided that except perhaps in cases of extreme urgency, notice should be given to the respondent.

In Natal it was decided in one matter that an application for sequestration is an ex parte application in terms of Rule I 6(4) of the Uniform Rules of Court, brought without notice to anyone because no relief of a final nature is sought; it was therefore the practice of that Division not to insist on proper notice to the respondent. This decision was followed in the Orange Free State insofar as it was decided that where an application is based on the fact that the debtor is indeed insolvent, only notice of such application need be given to the debtor; such J

Marais J

notice need not conform with the Uniform A Rules of Court and in particular with Rule 6(5). Even where notice must be given, the application remains an ex parte application.'

In regard to the practice in the (old) Transvaal, the most recent pronouncement that I have been able to find is that of Van Blerk AJ in Ratilal v Dos Santos 1995 (4) SA 117 (W) at 119H - I where he said:

'The problem that has arisen in this matter is that a provisional B order of sequestration has been granted without notice to an interested party. The practice that allows the grant of such an order without notice where a nulla bona return is relied upon. . . . The logic that appears to be behind the grant of a provisional sequestration order without service is the existence of satisfactory proof, in the form of a return of service by a deputy sheriff, that the C respondent, when served with a writ of execution, has already intimated that he has no assets with which to satisfy the judgment.'

That is the only reasoning that I have been able to find in a Transvaal judgment for sequestrating a person without notice. Van Blerk AJ merely noted the apparent existence of such practice and gave his views for the reason underlying it. He neither followed the practice D nor disapproved it.

I want to say immediately that, whatever may be the position in the Transvaal Provincial Division and whatever may have been the position in the past in this Division, there is not today a uniform practice in this Division to sequestrate without notice on a nulla bona return. In an unreported judgment of Mercantile Bank Ltd v E Curtin case No 96/5572 in this Division Flemming DJP concluded his remarks about sequestration on a nulla bona return without notice by saying 'it is therefore clear why there is no longer a practice in this Division which exempts applications based upon nulla bona returns from the need to serve an application for sequestration'.

The late Leveson J also informed me that he was not prepared to so F sequestrate without notice. I have discussed the matter with a number of other Judges and the view of a substantial proportion of them was that one should not provisionally sequestrate a person without notice even where reliance is placed upon a nulla bona return.

Furthermore, there is no reference in the Practice Manual G to such a practice. Any uniform practice in a matter of such importance could be expected to be found in the Manual. I therefore do not accept that it is today the uniform practice in the Witwatersrand Local Division to sequestrate without notice in the case of a nulla bona return.

In an endeavour to trace back this 'practice' and to find out how H and why it originated I have read all the cases referred to at 93 of Mars dealing not only with the practice of the Transvaal Provincial Division but also the practice in other Divisions. In Simross Vintners (Pty) Ltd v Vermeulen; VRG Africa (Pty) Ltd v Walters t/a Trend Litho 1978 (1) SA 779 (T) at 783E Coetzee J says: I

'In this Division it has always been the practice to require that the notice of application for a provisional order of sequestration should be given unless the applicant relies upon a nulla bona return. See Bhyat v Khurishi 1929 TPD 896, particularly the footnote on that page.'

(My emphasis.) Bhyat's case does not decide that it is unnecessary in the J

Marais J

case of a nulla bona return to serve where provisional...