Land and Agricultural Development Bank of South Africa v Buziba (76814/2017) [2020] ZAGPPHC 277 (26 June 2020)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

(1) REPORTABLE: YES / NO

(2) OF INTEREST TO OTHER JUDGES: YES/NO

(3) REVISED.

CASE NO: 76814/2017

In the matter between:

THE LAND & AGRICULTURAL DEVELOPMENT BANK OF

Applicants

SOUTH AFRICA

and

BALAAM NABUTUWA BUZIBA Respondents

JUDGMENT

NKOSI AJ

INTRODUCTION

1. This is an application for a final sequestration for the Respondent

2. It must be held that the amount sought against the Respondent is the amount of R33 211 206.34 (Thirty Three Million Two Hundred and Eleven Thousand Two Hundred and Six Rand and Thirty Four Cent).

3. The amount emanates from a loan and or advance to an entity called Superstrike Investment a (“Superstrike”). The Respondent and a certain Stephan Petrus Erasmus stood as sureties to the amount of R33 211 206.34 as directors of the principal debtor (Superstrike) signed almost two years after the written medium cash account agreement concluded with the Applicant.

4. It must be made clear from the onset that the Respondent had never raised the doctrine of excussion nor renounced with other benefits in sureties agreement as standard principles.

5. The Respondent, further, did not object to the initial application for sequestration based on any technicalities and inability to pay the amount owed to the Applicant.

6. It is further common cause that Applicant had a notarial bond over the property of the Principal Debtor. The Respondent, ex post facto , states that the Applicant could not salvage anything significant or anything at all where the doctrine of excussion would have been raised if it was not renounced.

7. The Applicant is said to have “unjustifiably and against public policy resorted to trying to squeeze water from a dry rock in the form of this application against the Respondent” which is not a defence on matters of sequestration after commission

of an act of insolvency.

8. It is noted that on or about the 8th of August 2018 this court granted a Rule Nisi effectively placing the Respondent under provisional sequestration. Subsequent to this on or about 11th October 2018 provisional trustees were appointed to the estate of the Respondent:

8.1 the provisional sequestration and appointed essentially granted the trustees certain powers to investigate the estate of the Respondent:

“Whether is able to satisfy his debts or is virtually insolvent in accordance with the dictates of an act of insolvency”

8.2 It is incumbent upon the Applicant to show that there is “reason to believe” that sequestration will be to the advantage of creditors (see Meskia & Co vs Friedman 1948 (2) SA 555 (W) at 55.

Roper J at 558 supra considered the meaning of the phrase “reason to believe” and stated “ At the final hearing, though the court “must be satisfied” it is not satisfied that sequestration will be to the advantage of creditors, but only that there is reason to believe that it will be so”.

9. In addition, the Applicant is obliged to demonstrate that there are reasonable grounds for concluding that, upon a proper investigation of the debtor’s affairs, a trustee may discover (or recover) assets which might be realised for the benefit of creditors. This was a view held in Dunlop Tyres (Pty) Ltd vs Brewitt 1999 (2) 580 (W) at 583

10. The Respondent appears to be unable to satisfy his own creditors and only shown an inability to restate any of his companies, said to be in the process of deregistration, nor to disclose his income from other legal sources or directorships where he claims to be an active member. No disclosure of income from the Botswana Project where it was proven that he is part of a consortium building a 150 metres bridge; no disclosure of movable and reliable assets except for the jointly owned primary residence still under mortgage bond with Nedbank. The Respondent appears to have desire to cling to ownership of things that cannot be paid for or properly serviced.

11. The Provisional Trustees Reports dated 9th April 2019 and 6th April 2020 show that the entities to which the Respondent is linked are dormant with no prospect of recovery.

12. The Respondent admitted that he is social government pensioner on old age basis. Even though he is qualified as an engineer no proof of work or consultation work where he could earn a reasonable amount to be able to service his debts. There are no prospects of securing a substantial job or work to enable him to pay the amount owing thusfar.

13. The Sheriff of the court twice failed to raise or attach any realizable assets and return with nulla bona return which is an act of insolvency on its own.

14. It is common cause that the Respondent is facing a debt of R33 211 206.34 (Thirty Three Million Two Hundred and Eleven Thousand Two Hundred and Six Rands and Thirty Four Cents). The amount remains owing over a long period of time.

15. It is common cause that the only realizable property jointly owned with his wife married to him out of community of property and still heavily bounded to Nedbank.

16. The Respondent is evidently indebted South African Revenue Services (SARS) in the amount of R37000.00 where he offered to down pay in the amount of R5000.00 per month. This serves a question mark for the court that as a social old age pensioner getting plus minus R1800.00 per month how is he going to service this debt unless there are further undisclosed sources of income. This leads to a reasonable inference that the Respondent is not bona fide and fair to this court. The Respondent had failed to satisfy a judgment by the court and to satisfy it after a nulla bona return was made of the sheriff of the court.

AD ADVANTAGE TO THE APPLICANT

17. The Applicant averred that amongst numerous and onerous calculation that at best after “a hopeful conclusion of an application that will naturally be brought by the joint bond holder” that the primary residence can achieve a sale value of R462 250.00 on a market value and an amount of R274 750.00 at a forced sale value.

18. The Respondent submitted that an amount of plus minus R1000 000 (One Million) can be realised but no credible evaluation or evaluation report from an evaluator or estate agent was affected to his court papers. There is no credible support to this assertion.

19. The Respondent has not made any payment towards his accounts and remain in higher arrears amounts: Nedbank Home Loan there is R61 247.77 still outstanding on the date of the hearing. No attempt has been made to lessen the burden or the arrear amounts.

20. The Respondent sought to have this application be postponed. No basis was advanced to court, except that he needs a postponement.

21. The Applicant submitted that if the trustees were to sell the property at a market value or by private treaty as trustees might well be authorised to do a free residue of R924 500.00 would remain. This could yield something for the creditors without disadvantage to the Respondent spouse as joint-owner. An amount of R27000.00 would be available at the end of clear calculation to solve the outstanding credit card debt. The Respondent could not argue to the contrary. The Respondent seems to have forgotten that an amount of R33 million plus is huge and needs a miracle to raise but this is highly unlikely to happen.

22. Having considered all submissions from the parties it is quite clear that the Respondent has not been honest with this Honourable Court in filing opposing affidavits and no defence has been raised. If court is satisfied that the secured creditor and/or preferent creditor would be paid, even little as possible, which serves as a reason to believe that there will be a benefit to creditors even if it is not sufficient. His attempt to have this matter postponed is dismissed as baseless.

23. The court notes that the Respondent, from the date of the provisional sequestration order in 2018 to date has done nothing to salvage his image or to make means to settle the debt or to show willingness to settle nor to disclose his earnings from his directorships or from the Botswana bridge building project. It is clear that he has no means at all and the defence raised was to delay this case. The Respondent is de facto unable to pay the amount owing or his debts as his liabilities far exceeds his assets.

24. The Respondent has no defence at all and the court has no option but to dismiss his defence. The court is satisfied that the Respondent has been proven to have committed acts of insolvency in one or many instances. Consequently the court orders as follows:

(1) Respondent is placed under final sequestration;

(2) Respondent is ordered to pay the costs.

VRSN NKOSI (AJ)

ACTING JUDGE OF THE HIGH COURT

OF SOUTH AFRICA, GAUTENG

DIVISION, PRETORIA

Heard on: 15 June 2020

Judgment delivered: _26 June 2020_

Appearances:

For the Applicants: Adv A.P Den Hartog

Instructed by: Struass Daly Inc Attorneys

For the Respondents: Adv C Shongwe

Instructed by: CSM Attorneys