Firstrand Bank Limited v Van Dyk (77/2020) [2021] ZAFSHC 159 (17 June 2021)

IN

THE HIGH COURT OF SOUTH AFRICA

FREE STATE DIVISION, BLOEMFONTEIN

Case no: 77/2020

In the matter between:

FIRSTRAND

BANK LIMITED Applicant

and

WILLEM MIEKEL VAN

DYK

(Identity number 691118 5064 088)

(Born 18 November 1969)

Married out of community of property excluding

the system of accrual to MARNA VAN DYK

(Identity number 760927 0010 086)

CORAM:

C NEKOSIE AJ

JUDGMENT BY: C

NEKOSIE AJ

HEARD ON: 17 JUNE 2021

DELIVERED ON: The judgment was handed down electronically by circulation to the parties` legal representatives by email and release to SAFLII.__ The date and time for hand down is deemed to be 2__ June 2021 at 09h00.

[1] The is an application for the provisional sequestration of the respondent`s estate.

[2] The applicant's locus standi for the sequestration of the respondent is based upon a judgment granted by the Court under civil case cover number 2834/2017 which amounts to R4 814 596.11 plus further interest from 15 February 2021 to date of payment.

[3] The genesis of the dispute is the respondent`s failure to make payment on the mortgage loan facility provided to him by the applicant who holds as security three mortgage bonds over the farm Houmoed 516 district Brandfort, Province Free State, for the respective amounts of R2 160 000.00, R2 040 000.00 and R1 200 000.00.

[4] In terms of section 10 of the Insolvency Act 24 0f 1936 (the Act), an applicant needs to make out a prima facie case that:

‘(a) The petitioning creditor has established against the debtor a claim such as is mention in subsection (1) of section nine; and

(b) The debtor has committed an act of insolvency or is insolvent; and

(c) There is reason to believe that it will be to the advantage of creditors of the debtor if his estate is sequestrated.’

[5] The applicant has a liquidated claim in the judgment it obtained against the respondent. Furthermore, an acknowledgement of indebtedness was made an order of court on 1 September 2020 under case number 2834/2017.

[6] The applicant relies on the provisions of section 8(g) of the Act in its submission that the respondent committed acts of insolvency. The respondent has acknowledged his indebtedness and inability to pay in the acknowledgement. He has also made an undertaking to pay the debt but failed to do so.

[7] Mr Edeling, on behalf of the respondent, rightly conceded that the respondent committed the acts of insolvency and the application should succeed if the points in limine raised by the respondent, which I shall deal with shortly, is dismissed.

[8] The points in limine raised are as follows:

8.1 The applicant`s Mortgage Bond Loan Agreements (MLAs) and the accompanying bonds was sold to a Third Party iKaya.

8.2 The applicant failed to disclose or attach the true copies, certified as the most current operative MLAs, sourced from the Safe Custody Agent of iKaya that bought Applicant`s MLA as Proof of claim, serving as the applicant`s causa.

8.3 Since the respective loan accounts does not form part of the Bank`s estate, after the perfection of the sale transaction with iKaya the Issuer of the Certificate of Balance, could not certify the quantum of the applicant`s claim.

8.4 The judgment obtained against the respondent was obtained by fraud and is therefore void ab initio. The matter of representation cannot be resolved without hearing of evidence and applicant`s representative being cross-examined.

[9] The securitisation scheme relied upon by the respondent was concluded on 9 March 2007. It is abundantly clear from the agreement that the applicant retain the responsibility to collect payments and to administer and manage the Receivables on an ongoing basis. The applicant has in its capacity as administrator to the Issuer, iKaya, the necessary standing to institute action where there is default in payments. This was the state of affairs when the respondent entered into his MLAs with the applicant some nine years after the conclusion of the securitisation scheme.

[10] The respondent is silent on when he became aware of the scheme. This is unsurprising because it is for the first time that he raised the defences despite being embroiled in litigation on this matter since 2017. It is in my view a futile attempt to delay his inevitable sequestration.

[11] A similar matter came before Daniso J in Firstrand Bank Limited t/a First National Bank v Leon Venter and another[1]. The exact same defences were raised based on the same securitisation scheme. The Court made the following finding with regard to the defences raised:

‘[12] On the facts germane to this matter, the applicant relies on the default judgment and not the credit agreements to establish that it has a liquidated claim against the respondent. The respondent`s defence is ill-founded it does not raise a real dispute of fact as far as the applicant`s locus standi to institute these proceedings is concerned. There are no exceptional circumstances justifying the referral to oral evidence.’

[11] The judgment on which the applicant relies still stand and it is not for this court to make a determination on its validity. I am therefor satisfied that the applicant has made out a prima facie to establish that it has a liquidated claim against the respondent as provided for in section 9(1) of the Act.

[12] In regards whether the sequestration will be to the advantage of other creditors is concerned, section 10(c) of the Act, it is trite that there need only be a reasonable prospect of a dividend, not necessarily a likelihood, but a prospect which is not to remote.[2]

[13] In this application the financial position of the respondent is unknown. Save for the bold and unsubstantiated assertions that he is solvent he does not take the court into him confidence in relation to his finances. Investigation and inquiry into his finances will illuminate his true position and may unearth assets from which other creditors may benefit.

[14] In consequence and having considered all the circumstances I am satisfied that the respondent should be placed under provisional sequestration. I make the following order.

ORDER

1. The application to refer the matter for oral evidence is dismissed.

2. A provisional sequestration order returnable at 9h30 on 22 July 2021 is granted as prayed for in the notice of motion dated 25 March 2021

CNEKOSIE, AJ

For the Applicant:

Adv S. Tsangarakis

Instructed by:

Honey Attorneys

BLOEMFONTEIN

For the Respondent: Adv W Edeling SC

Bekker Attorneys

[1] Firstrand Bank Limited t/a First National Bank v Leon Venter and another, case no 242/2021 dated 10 May 2021

[2] Cyril Smiedt (Pty) Ltd v Lourens 1966(1) SA 150 (O) at 157