Strutfast (Pty) Ltd v Uys and Another

• Jurisdiction: South Africa
• Judgment Date: 05 July 2017
• Citation: 2017 (6) SA 491 (GJ)

Strutfast (Pty) Ltd v Uys and Another
2017 (6) SA 491 (GJ)

2017 (6) SA p491

Citation	2017 (6) SA 491 (GJ)
Case No	5675/2016
Court	Gauteng Local Division, Johannesburg
Judge	Rome AJ
Heard	July 5, 2017
Judgment	July 5, 2017
Counsel	JF van der Merwe for the applicant.; E Coleman for the respondents.

Flynote : Sleutelwoorde

Insolvency — Compulsory sequestration — Application — Sequestration of two B or more individuals in single application — Impermissible, except where parties married in community of property or where complete identity of interests existing.

Court — Precedent and stare decisis — Court bound by prior decision of its own C unless 'clearly wrong' — Test — Precise test unavailable — But certain that clearly wrong judgment would pertain to type of case where error so profound that it amounted to judicial blunder or resulted in manifest and unsustainable absurdity or injustice.

Headnote : Kopnota

It was an established rule of practice in the Gauteng Local Division that, save D where parties were married in community of property or in the case of a complete identity of interests, one should not seek the sequestration of multiple respondents in a single application. However, recently, and against such practice, a court of the same division in the matter of Maree and Another v Bobroff and Another [2017] ZAGPJHC 116 (Bobroff) allowed a single application for the sequestration of two parties — partners in a law E firm in that case. In doing so, the court declined to follow the authority for the established approach — Ferela (Pty) Ltd v Craigie and Others 1980 (3) SA 167 (W) — on the basis that it was clearly wrong. More particularly, it felt that the suggestion in the matter of Business Partners Ltd v Vecto Trade 87 (Pty) Ltd and Others 2004 (5) SA 296 (SE) — that the qualification for allowing multiple respondents in a single sequestration application should F be, instead of a 'complete identity of interests', a 'substantial coincidence of interests' — was preferable.

In the present matter, the applicant, following Bobroff, sought in a single application the sequestration of two parties who were married, but not in community of property, and where there was no allegation of identity of interests between the parties or their estates. Thus, the question to be G decided was whether the 'established practice' was still good law. According to the rules of stare decisis, the court in Bobroff was only entitled to depart from Ferela, a decision of a court of the same division, if the latter was 'clearly, plainly or palpably wrong'. Had this standard then been met?

Held, that there appeared to be no clearly articulated or precise test as to when a decision was not only wrong but clearly wrong. It was nonetheless clear H that the stare decisis doctrine required something more than a mere conclusion that a previous judgment was incorrectly decided. Whatever the precise test, a clearly or patently wrong judgment would pertain to a type of case where the error was so profound that it amounted to a judicial blunder or resulted in a manifest and unsustainable absurdity or injustice. (See [30].) I

Held, that the reason provided in Bobroff for declining to follow Ferela and preferring the qualification as set out in Business Partners — namely that it was almost impossible to conceive of a situation where there would be a complete identity of interests — did not indicate a palpable error in Ferela. (See [31].) Further, Ferela was not wrong, even less so clearly or palpably wrong. The established approach was appropriate, given, one, that an J

2017 (6) SA p492

application A for sequestration involved a diminution in the status of a particular debtor; and, two, the difficulty of establishing in a single application for the sequestration of multiple respondents whether there was a likelihood of advantage to creditors in respect of each debtor. (See [3], [10] and [32].) Accordingly, the decision in Bobroff to disregard the earlier judgment in Ferela was itself an error of such a nature that it had to be held B to be clearly wrong, and should be departed from (see [32]).

Held, that in the present application there was no rationale for having launched sequestration proceedings against both respondents in one application. Application dismissed. (See [33] – [36].)

Cases cited

Brack C and Another v Front Runner Racks 2000 (Pty) Ltd [2011] ZAGPJHC 34: referred to

Breetveldt and Others v Van Zyl and Others 1972 (1) SA 304 (T): dictum at 314G – H approved

Business Partners Ltd v Vecto Trade 87 (Pty) Ltd and Others 2004 (5) SA 296 (SE): dicta in paras [33] – [34] explained

Camps D Bay Ratepayers' and Residents' Association and Another v Harrison and Another 2011 (4) SA 42 (CC) (2011 (2) BCLR 121; [2010] ZACC 19): dictum in para [28] applied

Chirwa v Transnet Ltd and Others 2008 (4) SA 367 (CC) ((2008) 29 ILJ 73; 2008 (3) BCLR 251; [2008] 2 BLLR 97; [2007] ZACC 23): referred to

Duminij v Prinsloo 1916 OPD 83: referred to

Ferela E (Pty) Ltd v Craigie and Others 1980 (3) SA 167 (W): discussed and approved

Fredericks and Others v MEC for Education and Training, Eastern Cape, and Others 2002 (2) SA 693 (CC) ((2002) 23 ILJ 81; 2002 (2) BCLR 113): referred to

Gcaba v Minister of Safety & Security 2010 (1) SA 238 (CC) (2010 (1) BCLR 35; F [2009] 12 BLLR 1145): discussed and dictum in para [62] applied

Living Hands (Pty) Ltd and Another v Ditz and Others 2013 (2) SA 368 (GSJ): referred to

Maree and Another v Bobroff and Another [2017] ZAGPJHC 116: criticised and not followed

National G Chemsearch (SA) (Pty) Ltd v Borrowman and Another 1979 (3) SA 1092 (T): dictum at 1101B applied

R v Jansen 1937 CPD 294: referred to

S v Tarajka Estates (Edms) Bpk en Andere 1963 (4) SA 467 (T): referred to

Stiller and Dyzenhaus v O'Brien NO 1947 (2) SA 1094 (W): referred to.

Case Information

JF H van der Merwe for the applicant.

E Coleman for the respondents.

An application for the sequestration of two individuals. Application dismissed with costs.

Judgment

Rome AJ:

[1] This is an application for the sequestration of two individuals, the first and second respondents, respectively. The respondents are married, but not in community of property. The applicant's founding affidavit does not contain any averments from which it can be discerned that the J sequestration of two individuals is sought in the same application

2017 (6) SA p493

Rome AJ

because there is an identity of interests between the respondents or their A estates.

[2] The application thus runs contrary to the established practice in the Gauteng courts. It has for many years undoubtedly been a rule of practice here that, save where parties are married in community of property or in the otherwise very unusual circumstance of a complete B identity of interests, one should not seek the sequestration of multiple respondents in a single application.

[3] Apart from the weight of the authorities discussed further below, one underlying reason for limiting a sequestration application to the estate of C one respondent only is that sequestration brings with it the status of diminished legal capacity (capitis diminutio). The relief sought in a sequestration application is directed at diminishing the legal status and capacity of a particular individual debtor. Because of this, similar to an application for the appointment of a curator bonis for a patient, it should pertain to that debtor's circumstances only. D

[4] The authority for the practice against joining multiple respondents in a joint application for their individual sequestration is Ferela (Pty) Ltd v Craigie and Others 1980 (3) SA 167 (W), a decision of a judge (Coetzee J) of this division. Coetzee J's judgment in turn drew upon case law in which a similar rule against joining multiple respondents had been E developed and applied in the context of winding-up applications. Ferela has however recently been departed from in another judgment of this division on the basis that it was wrongly decided.

[5] It is therefore necessary to consider the judgment in Ferela before deciding whether it ought to be consigned to the scrapheap of outmoded F insolvency law and practice on the basis that it is clearly wrong. In Ferela the petitioning applicant launched proceedings against three respondents, seeking the sequestration of each of them. The first two respondents were alleged to be partners in the third respondent, which was cited as a partnership. No case was made out as to why the partnership fell within the purview of an application for its sequestration and thus no G case had been made out for the sequestration of the cited partnership.

[6] The question in Ferela accordingly was whether the first and second respondents (the erstwhile two partners) could be jointly sequestrated in the same application. In that case the applicant, citing several H pre-1948 judgments, argued that it was competent to sequestrate two separate estates in the same application. These earlier decisions, however, as appears from Coetzee J's judgment, contain scant reasons for the principle they were purported to have established. Coetzee J noted (correctly, with respect) that the issue was whether the first and second respondents in that case had been correctly joined per rule 10 and I whether their joinder was appropriate. The issue of joinder was then considered in the context of the requirements for compulsory sequestration set out in ss 9(1) and 10(c) of the Insolvency Act 24 of 1936.

[7] By reference to the specific statutory requirements, Coetzee J determined that it could rarely be the case that the sequestration of more than J

2017 (6) SA p494

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