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IN THE HIGH COURT OF SOUTH AFRICA

FREE STATE DIVISION, BLOEMFONTEIN

                                                                                    CASE NO. 31/2020

In the matter between

NEDBANK LIMITED                                                                       APPLICANT

versus

WERNER JACOBUS WEIDEMANN N.O.                                  1^st RESPONDENT

REINETTE WEIDEMANN N.O.                                                     2^nd RESPONDENT

JOSEPH JOHANN SAUNDERS N.O.                                         3^rd RESPONDENT

(in their capacities as the Trustees for the time being of

Rorich’s Hoop Trust IT 2132/98)

CORAM:                       NAIDOO J

HEARD ON:                 Heads of Argument filed for matter to be considered in Chambers

DELIVERED ON:          29 APRIL 2021

JUDGMENT – APPLICATION FOR LEAVE TO APPEAL

[1]        This is an application by the respondents for leave to appeal against the whole of the judgment of this court delivered on 19 November 2020. For convenience and to avoid confusion, I shall refer to the applicants in this matter as the respondent Trust or the Trust and the respondent in this application as Nedbank. The parties filed Heads of Argument for consideration of the application in Chambers. The Trust filed its Heads of Argument four days after the date directed by the court. It transpired that the court’s directive was communicated to a professional assistant in the office of the Trust’s attorneys. The attorney handling this matter only became aware a day after the date set by the court that the Trust’s Heads of Argument were overdue. The intervening festive period also played a part in the late filing of the Trust’s Heads. Nedbank did not raise any prejudice and left the issue of condonation in the court’s discretion. There has been no prejudice suffered and even though Nedbank had less time to consider the Trust’s Heads it, nevertheless, filed its comprehensive Heads on time. To the extent necessary, the Trust’s late filing of its Heads of Argument is condoned. Adv P Zietsman SC is on record as representing the Trust and Adv MP Van Der Merwe SC for Nedbank.

[2]        The judgment was assailed on a number of grounds. The Trust listed seven grounds in its application but, as correctly pointed out by Nedbank, there are in reality six grounds, as grounds 2 and 3 can be regarded as one. The grounds relied upon by the Trust are as follows:

2.1      The court failed to accept the Trust’s version that it did not commit an act of insolvency in terms of section 8(c) and/or 8(d) of the Insolvency Act 24 of 1936;

2.2      Although the Trust admitted its factual insolvency, the court failed to exercise its discretion in favour of the Trust by not taking into account the asset value of the group of entities, including the Welgeval Trust, especially as Nedbank considered the assets of the group when granting finance to the Trust;

2.3      The court erred by not correctly applying the test on the return date, in that it did not satisfy itself, on a balance of probabilities, that the sequestration of the Trust would be to the benefit of the creditors, and whether the Trust had committed an act of insolvency;                           

2.4      The court exercised its discretion wrongly by granting costs to Nedbank on the attorney and client scale and ordering that such costs be costs in the sequestration;

2.5      The court erred in not considering the Trust’s argument that costs of the opposition should also be costs in the sequestration, and ordering that the costs of opposition should not be part of the costs in the sequestration;

2.6      The court “mistakenly” made the costs order in paragraph 2.8 of the judgment, ordering costs of the opposition not to be part of the costs of sequestration.

[3]        With the advent of the Superior Courts Act 10 of 2013 (the Act), section 17 thereof now regulates the test to be applied in an application for leave to appeal. The relevant provisions of section 17(1) provide as follows:

“(1) Leave to appeal may only be given where the judge or judges concerned are of the opinion that

(a)    (i)   the appeal would have a reasonable prospect of success; or

(ii)  there is some other compelling reason why the appeal should be heard, including conflicting judgments on the matter under consideration;”

(my emphasis and underlining)

[4]        Previously, an applicant was merely required to show that there is a reasonable possibility that another court, differently constituted, would find differently to the court against whose judgment leave to appeal is sought. It is clear from section 17(I), set out above, that the situation is now somewhat different, and an applicant for leave to appeal is required to convince the court that there is a reasonable prospect of success and not merely a possibility of success. In the matter of The Mont Chevaux Trust v Tina Goosen + 18 2014 JDR LCC, Bertelsmann J held that:

“It is clear that the threshold for granting leave to appeal against a judgment of a high court has been raised in the new Act. The former test whether leave to appeal should be granted was a reasonable prospect that another court might come to a different conclusion….The use of the word ‘would’ in the new statute indicates a measure of certainty that another court will differ from the court whose judgment is sought to be appealed against.”

[5]        The Mont Chevaux decision was cited with approval in a number of cases, one such matter being Matoto v Free State Gambling and Liquor Authority (4629/2015) [2017] ZAFSHC 80 (8 June 2017), a decision emanating from this Division, where my brother Daffue J echoed the remarks of Bertelsmann J at paragraph 5 and remarked that “There can be no doubt that the bar for granting leave to appeal has been raised…The use by the legislature of the word “only” emphasized supra, is a further indication of a more stringent test.”

The Full Court in Acting National Director of Public Prosecutions and Others v Democratic Alliance (19577/2009) [2016] ZAGPPHC 489 (24 June 2016) also cited Mont Cheveau with approval. The Supreme Court of Appeal in Notshokovu v S (157/2015) [2016] ZASCA 112 (7 September 2016) further reiterated that a more stringent threshold was imposed by the use of the word “would” in section 17(1)(a)(i) of the Superior Courts Act).

[6]        The court dealt in its judgment with each of the points raised as grounds of appeal and applied the law to the facts in making the findings it did. With regard to 2.1 above, paragraphs 11- 14 of the judgment deal with the misrepresentation by the Trust to Nedbank about the purpose of the auction of its movable assets. The Trust’s actions as detailed in the judgment amounted to a disposition of its assets as envisaged in section 8 of the Insolvency Act. The issues raised in paragraph 2.2 are dealt with in paragraph 16 and also in paragraphs 21 and 22 of the judgment. The advantage to creditors (ground 2.3 above) and the factual insolvency of the Trust are dealt with in paragraphs 17 and 18 of the judgment. With regard to grounds 2.3 -2.6 above, it is clear from paragraphs 24 -27 of the judgment that the issue of costs was thoroughly considered.

[7]        The Trust did not set out any circumstances, either in its papers or it arguments before court, to justify the court’s exercising its discretion in favour of the Trust by not granting a final order of sequestration. See paragraph 21 to 23 of the judgment. In my view the Trust has not shown that the appeal would have reasonable prospects of success. It is also my view, that the grounds of appeal raised in this application are without merit.

[8]        In the circumstances the following order is made:

The application for leave to appeal is dismissed, with costs 

________________

S NAIDOO J

On behalf of the Applicants:                       Adv P Zietsman SC

Instructed by:                                              Horn & Van Rensburg Inc

                                                                    4 Nobel Street

                                                                    Brandwag

                                                                    Bloemfontein

                                                                    (Ref: MJVR/Maria/WM0362)

On behalf of the Respondent:                     Adv MP Van Der Merwe SC

Instructed by:                                               Symington De Kok Attorneys

                                                                     169B Nelson Mandela Drive

                                                                     Westdene

                                                                     Bloemfontein

                                                                      (Ref:   D Möller/jjvr/FMR0055

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