Ex parte: Mpitsang (2232/2009) [2009] ZAFSHC 65 (28 May 2009)
The court found that the applicant failed to provide sworn valuations for both movable and immovable property, despite the Master of the High Court specifically requesting them. Without sworn valuations, the estimated values of the assets are unreliable and may be overstated, which could negatively affect both the...
Source-derived case information.
- Citation
- [2009] ZAFSHC 65
- Parties
- Applicant: Phenyo Victor Mpitsang
- Court
- Free State High Court, Bloemfontein
- Jurisdiction
- South Africa
- Case Number
- 2232/2009
- Procedural Posture
- Voluntary Surrender Application / Judgment
- Outcome
- Application for voluntary surrender dismissed.
- Judges
- M.B. Molemela
- Legal Topics
- Voluntary Surrender, Advantage to Creditors, Sworn Valuation Requirement, Insolvency Act Section 6
Source-derived case record
Summary, issues, holding and outcome
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Parties
Phenyo Victor Mpitsang
Applicant
Procedural Posture
Voluntary Surrender Application / Judgment
Legal Issues
- 1 Whether the applicant has satisfied the requirements for voluntary surrender under section 6 of the Insolvency Act.
- 2 Whether the sequestration of the applicant's estate will be to the advantage of creditors.
- 3 Whether the absence of sworn valuations of assets precludes the granting of the application.
Ratio Decidendi
The court found that the applicant failed to provide sworn valuations for both movable and immovable property, despite the Master of the High Court specifically requesting them. Without sworn valuations, the estimated values of the assets are unreliable and may be overstated, which could negatively affect both the dividend to creditors and the sufficiency of funds to cover sequestration costs. The lack of itemisation of furniture further undermines the reliability of the figures, as some items may be exempt from realisation under section 82(6) of the Insolvency Act. Consequently, the applicant did not satisfy the requirements of section 6 of the Insolvency Act, and the application for...
Court Disposition
Application for voluntary surrender dismissed.
Orders
- The application for voluntary surrender is dismissed.
Full Case Text
Judgment text and source record
28 paragraphs
FREE STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH AFRICA
Case No. : 2232/2009
In the ex parte application for:-
PHENYO VICTOR MPITSANG Applicant
(Identity Number: )
Unmarried
_______________________________________________________
JUDGMENT BY: MOLEMELA, J
DELIVERED ON: 28 MAY 2009
JUDGMENT
[1] This is an unopposed application for voluntary surrender. It appears from the applicantâs Statement of Affairs that his debts amount to a total of R637 400,00. The annexure that deals with immovable property reflects an amount of R600 000,00 as being the value of the applicantâs house. According to the annexure dealing with movable property, the only movable property that the applicant has is furniture. The furniture has not been itemised and a global figure of R10 000,00 is indicated as being as being the value thereof. According to the âberekeningsbladâ an amount of R3000.00 represents preferent claims and accordingly has to be deducted. No sworn valuations were submitted in respect of any of the assets.
[2] It is trite law that the acid test in determining whether or not to grant an application for any sequestration is: will the sequestration be to the advantage of creditors? Section 6 of the Insolvency Act 24 of 1936 states that âif the court is satisfied that the provisions of section four have been complied with, that the estate of the debtor in question is insolvent, that he owns realisable property of a sufficient value to defray all costs of the sequestration which
will in terms of this Act be payable out of the free residue of his estate and that it will be to the advantage of the creditors of the debtor if his estate is sequestrated, it may accept the surrender of the debtorâs estate and make an order sequestrating that estate.â In EX PARTE MATTYSEN ET UXOR (FIRST RAND BANK LTD INTERVENING) 2003 (2) SA 308 (T) Southwood J stated as follows at p. 311 â 312:
âIt is well settled what an applicant for voluntary surrender must do to prove that his/her sequestration will be to the advantage of creditors. In Nell v Lubbe 1999 (3) SA 109 (W) at 111D - G Leveson J stated the position as follows:
âThe purpose of furnishing a sworn valuation is therefore to establish the price that is likely to be realised from the sale of the property on what is called a forced sale so that it can be determined that there will be a free residue available for creditors and advantage to creditors is thereby established.... In EX PARTE ANTHONY EN 'N ANDER EN SES SOORTGELYKE AANSOEKE 2000 (4) SA 116 (C) at 124 F â I the Full Court of the Cape Provincial Division expressly endorsed the approach of Leveson J in NELL v LUBBE, supra, found it to be equally applicable to applications for voluntary surrenderâ (my underlining).
[3] In TRUST WHOLESALERS AND WOOLLENS (PTY) LTD v MACKAN 1954 (2) SA 109 (N) at 111 the court remarked as follows:
âWhether it is advantages [to the creditor] or not must clearly depend on the circumstance, the value and number of assets available for liquidation, the amount of the claims, the costs of sequestration. â
All the cases mentioned above demonstrate the importance of showing the advantage to creditors.
[4] As stated before, in casu, there is no sworn valuation of any nature in respect of both movables and immovable property. This, despite the fact that the Master of the High Court specifically requested same in her report attached as annexure âEâ to the application. Section 82(6) of the Insolvency Act exempts certain furniture from realisation. To the extent that the applicantâs furniture has not been itemised, there is therefore a good possibility that part of the furniture included under âmovable propertyâ is property that cannot be realised and that is therefore of no benefit to the creditors. The effect thereof would obviously be to even further reduce the current estimated value of R10 000,00 in respect of movable property.
[5] The result of the applicantâs failure to attach sworn valuations means that the estimated values are of no real significance as the current value of those properties could be far less than those estimates. If the values are indeed less, this aspect would negatively impact not only on the dividend but also on the sufficiency of the costs of sequestration as the latter costs are obtainable from the free residue of the estate. In the absence of a sworn valuation, I am not satisfied that the applicant has complied with the requirements of section 6 of the Act.
[6] Accordingly, the following order is made:
The application for voluntary surrender is dismissed.
_________________
M.B. MOLEMELA, J
On behalf of applicant: Etienne Visser Attorneys
BLOEMFONTEIN
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