Astra Constantine Inc v Jones and Another (25801/2024) [2025] ZAWCHC 238 (3 June 2025)
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IN THE HIGH COURT OF
SOUTH AFRICA
WESTERN CAPE DIVISION,
CAPE TOWN
Case No: 25801/2024
In
the matter between:
ASTRA
CONSTANTINE INC
Applicant
and
ALAN GEORGE
JONES
First Respondent
MAREE
JONES
Second Respondent
JUDGMENT
SIPUNZI
AJ
Introduction
[1]
This is an application for the
provisional sequestration of the estate of the first respondent.
The
applicant seeks an order in the following terms:
1.
‘That the ordinary rules of the above Honourable Court
pertaining to forms, notice and service be condoned
and that this
matter be disposed of as one of urgency in accordance with Uniform
Rule 6(12);
2. That
the estate of the first respondent be placed under a provisional
order of sequestration under the authority
of the Master of the High
Court.
3. That
the rule nisi be issued, calling on the first respondent and
all interested parties to appear and show cause, if any, before this
Honourable
Court, on a date to be determined by this Honourable
Court, as to why an order should not be granted in the following
terms:
3.1
That the estate of the first respondent be placed under final order
of sequestration; and
3.2
That the attorney and client costs of this application be costs in
the administration of the insolvent
estate of the first respondent;
4. That service of
the order is effected as follows:
4.1
By the Sheriff on the first and second respondent personally;
4.2
By the sheriff on the South African Revenue Services, Cape Town;
4.3
By the Sheriff upon the employees of the first respondent (if any)
and any trade unions that
represent the employees;
4.4
By one publication in each of “the Cape Times” and “Die
Burger”
Newspapers; and
4.5
By sending a copy of this order to all known creditors of the first
respondent,
with claims exceeding R20, 000.00 by prepaid registered
mail.
5.
Such further and / or alternative relief as the above Honourable
Court may deem
fit in the circumstances.’
[2]
This application first served
before this Court on 14 January 2025, and an order by agreement
was
obtained. The order disposed of the prayer in paragraph 1 in the
notice of motion, and the application was postponed for hearing
to
the semi-urgent roll. The directives issued regarding the future
conduct of the matter. The costs stood over for later determination.
[3]
Both respondents opposed the
application, arguing that the applicant’s claim was
invalid in
law and that there will be no advantage to creditors should the
estate of the first respondent be provisionally sequestrated.
Condonation
[4]
At the commencement of the oral
submissions, the respondents sought to have the late filing
of their
answering affidavits condoned. The applicant did not oppose the
application in either instance. Having considered
the
submissions, the applications for the late filing of the answering
affidavits was accordingly condoned. It followed that
the
admission of the replying affidavit of the applicant had to be
admitted.
The
parties
[5]
The applicant is Astra
Constantine Incorporated, a private company with a share capital,
duly registered and incorporated in terms of the statutes of the
Republic of South Africa with registration number: 2013/141928/21.
Its registered address and principal place of business is
located at 11 Remhoogte Road, Heldervue, Somerset West, in the
province of the Western Cape.
[6]
The first respondent is Allan
George Jones, an adult male and admitted attorney of the
High Court
of South Africa, with identity number 6[…]. He practices
under the name and style of Allan G Jones Attorneys
and continues to
operate his business from his residence at 1[…] P[…], Still Bay
West.
[7]
The second respondent is Maree
Jones, an adult female with identity number: 6[…], residing
at
[…] A[…] Street, Monte Vista, Western Cape. The second
respondent was married to the first respondent out of community
of
property. The applicant seeks no relief against the second
respondent, she is cited as the former spouse of the first respondent
in compliance with the Consolidated Practice Note 30(1).
Summary
of facts
[8]
On 22 November 2023, the Court
granted a judgment in favour of the applicant and against
the first
respondent. The order was issued under case number 2408/23 for
a total amount of R920 500.00 with an interest
rate of 7.25% per
annum a tempore morae, calculated from 29 June 2022, as well
as costs. On 21 November 2024, this Court dismissed an
application by the first respondent
to have this judgement rescinded,
under case number 2408/23. The applicant was also awarded a
cost order on an attorney and
client scale. These judgments increased
the debt to a sum of R1 108 837. 63 and first respondent
has yet to make payments.
[9]
The first respondent was the
previous owner of an immovable property at Erf 2[…], Parow,
Cape
Town. On 1 December 2023, the first respondent sold this property to
another third party for an amount of R12 000 000.
00
(Twelve Million Rand). The transfer of the aforementioned property
was effected on 14 June 2024. Due to the existence of a mortgage
bond
on the property, an amount of R3 000 000. 00 (Three Million
Rand) was settled with Investec Bank prior to transfer
of ownership
to the purchaser. This transaction resulted in the first
respondent having a surplus of R9 000 000.00
(Nine Million
Rand).
[10]
The first respondent was also the registered owner
of the immovable property located at Erf 3[…], Goodwood.
On 3
August 2023, the first respondent contributed fifty (50) percent of
his value of this immovable property to the second
respondent.
This donation was made without any value to the first respondent.
The first respondent has other existing
debts with various
other creditors that remained unpaid, including approximately
R3 000 000.00
owed to SARS. There is also a Court judgment, taken by consent
under case number 16381/22, requiring
the payment of R161 238.46 to
Pieter Andreas Olivier. Additionally, there is another judgment
in favour of Cronos Capital
(Pty) Ltd under case number 15237/23 for
a sum of R608 778.00.[1]
The first respondent also faced an ongoing claim from Carli Brummer,
under case number 21914/24, for the sum of R2 447 136.00.
[11]
On 16 October 2024, the first respondent provided
a sworn statement in which he declared, that there was
no immovable
property registered in his name, neither within the country or
abroad.[2] On 4 November
2024, the Sheriff of this Court for Riversdale sought to serve the
writ of execution and demanded payment of
the amount of R920 500.00,
along with interest and costs, on the first respondent personally.
The first respondent informed
the Sheriff that he had no money,
property or disposable assets with which he would satisfy the writ or
any portion thereof. Following
a diligent search and enquiry,
the Sheriff discovered no disposable property to satisfy the writ.
Upon receipt of an affidavit
from the first respondent that he had no
immovable property registered to his name either within or outside
the Republic, the Sheriff
filed a nulla
bona return.
Issues
[12]
The above factual overview prompts a multi-layered
inquiry. First and foremost, the court must determine
whether
the applicant has demonstrated that it has locus standi to
prosecute this application in terms of section 9(1) of the Insolvency
Act 24 of 1936 (the “Act”). Second, the question
arises
as to whether the first respondent engaged in an act of insolvency.
Finally, it is important to consider whether granting
a
provisional sequestration of the first respondent would provide any
advantage to the creditors.
Applicable
legal principles
[13]
This application is based on the provisions of
section 9(1) of the Insolvency Act 24 of 1936 (the “Act”),
which provides that,
“(1) A creditor
(or his agent) who has a liquidated claim for not less than R100.00,
or two or more creditors who in the aggregate
have liquidated claims
for not less than R200.00 against the debtor who has committed an act
of insolvency, or is insolvent, may
petition the court for the
sequestration of the estate of the debtor.”
[14]
The specific relief sought by the applicant is
provided for in section 10 of the Act, it reads:
“if the court to
which the petition for the sequestration of the estate of a debtor
has been presented is of the opinion that prima
facie-
(a)
the petitioning creditor has established against the debtor a
claim such as is mentioned in sub section 1 of section 9; 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, it may make
an
order sequestrating the estate of the debtor provisionally.”
[15]
In terms of section 8(b) of the Act:
“a debtor
commits an act of insolvency if a court has given judgment against
him and he fails upon demand of the officer whose duty
it is to
execute that judgment, to satisfy it or to indicate to that officer
disposable property sufficient to satisfy it, or if
it appears from
the return of service
made by
that officer that he has not found sufficient disposable property to
satisfy the judgment.”
Evaluation
Does
the applicant have a liquidated claim?
[16]
On 22 November 2023, this Court granted a
judgement in favour of the applicant and against the first
respondent,
ordering the payment of R920 500.00, along with interest
at the prescribed rate of 7.25% per annum, calculated from 29 June
2022,
in addition to costs. It is further common cause
that the same judgment was a subject of an application for rescission
at the instance of the first respondent. That application was,
however, dismissed with punitive costs. The costs implications
on the rescission judgment resulted in the amount owed being
R1 108 837.63. This amount remains unpaid in full,
and there is no pending litigation that seeks to challenge the
aforementioned judgment.
[17]
However, it was argued on behalf of the
respondents that notwithstanding the judgment that was granted in
favour of the applicant for the sum claimed, the first respondent was
still entitled to ventilate a defence against the said judgment,
including whether it was a liquidated claim or not.
[18]
In Pheko
and Others v Ekurhuleni City[3],
the court addressed the obligations of litigants towards judicial
authority. It held that:
‘as the
foundational value of our Constitution, the rule of law requires that
the dignity and authority of the courts be upheld,
as the capacity of
the courts to carry out their functions depended upon it.
According to the Constitution, orders, and decisions
issued by a
court are binding on all individuals to whom they apply and no one,
may interfere with the functioning of the courts
in any manner.
It follows that disobedience towards court orders or decisions risks
rendering our courts impotent, and judicial
authority a mere
mockery.’
[19]
According to Ms Cawood who represented the respondents, it should be
sufficient for the first
respondent to simply assert that there is a
bona fide defence to the applicant’s claim, without offering
any factual basis
for it. However, she still contended that the
first respondent ought to present the foundation of its allegations
through an affidavit, ensuring sufficient detail is provided.
[20]
According to the Badenhorst
Test,[4]
in instances where the
indebtedness of the respondent has been established on a balance of
probabilities, the onus falls on the
respondent to show that the debt
in question is contested on genuine or bona
fide grounds.
The first respondent fails to provide any substantial response
to the assertion of the applicant that a liquidated
claim exists and
that it was not involved in any pending litigation. Therefore,
the applicant’s claims remained unchallenged.
[21]
Throughout the applicant’s efforts to
enforce the debt, the first respondent has failed to provide
any
plausible explanation for his failure to satisfy the debt, nor has he
demonstrated any attempts in favour of paying the debt.
In the
case of Express model
trading
289 CC v Dolphin Ridge Corporate[5],
the
court held that any application to postpone the granting of the
liquidation judgment in the case of a company debtor could not
be
granted, in the absence of an adequate explanation for the delay in
paying of the debt.
[22]
Similarly, as it is the position in
casu, the
opposition proffered by the first respondent lacks in substance and
legal rationale. The
argument that it should still be open for the first respondent to
pursue some challenge to this judgment is untenable, particularly
in
view of the elapsed time between the default judgment in November
2023, and the issuance of the rescission judgment in November
2024.
‘Court
orders are binding on all individuals to whom they apply, regardless
of whether they were issued correctly or incorrectly.
Compliance
is required unless they are formerly overturned.’ [6]
It follows that, on the strength of the judgments issued in
favour of the applicant regarding the same debt, a liquidated
claim
against the first respondent has been established on a balance of
probabilities, and consequently, the first respondent is
bound by its
force and effect.
Did
the first respondent commit an act of insolvency?
[23]
On 4 November 2024, the first respondent met with the
Sheriff of this Court for Riversdale with the writ of execution,
demanding payment of the amount of R920 500.00, along with
interest and costs, from the first respondent personally. He
informed the Sheriff that he had no money, possessed no property, or
disposable assets with which to satisfy the writ or any portion
thereof. The Sheriff also found no disposable property to
satisfy the writ. Furthermore, in an affidavit dated 16 October
2024, the first respondent declared that there was no immovable
property registered in his name and that he owned no immovable
property. It therefore became common cause that the first
respondent committed an act of insolvency in terms of section 8(b)
of
the Act.
Any
reason to believe that it will be to the advantage of creditors of
the debtor if his estate is sequestrated?
[24]
The first respondent claimed that he is factually
insolvent, with no significant assets and liabilities.
The
affidavit of the first respondent dated 16 October 2024, along with
his answering affidavit, highlights that was no immovable
property
registered in the name of the first respondent. The
respondents persisted that should the provisional sequestration be
granted, there will be no advantage to creditors as there
were no
realisable assets at their disposal. On behalf of the
respondents, it was submitted that the fact that the first
respondent
had made commitments to pay a portion of his debt, should not be
taken to imply that there were any disposable assets
from which other
creditors would gain an unfair preferential advantage.
[25]
Conversely, the applicant insisted that there will be substantial
advantage to the creditors
if an investigation is permitted by means
of a provisional sequestration order. The argument of the applicant
emphasised that,
to the extent that the first respondent made various
transactions, which involved disposing of ownership or material value
from
immovable properties associated with him that sufficed to
warrant an investigation into the circumstances that could result in
substantial advantage to the creditors. The applicant also
highlighted that SARS and Investec Bank, as creditors of the first
respondent, were unduly advantaged through the conduct of the first
respondent. The applicant argued that the first respondent
has
demonstrated through his conduct towards some of his creditors that
should he be provisionally sequestrated it would be to
the advantage
of the wider group of creditors.
[26]
The first respondent is also known to be indebted
to other creditors. These include a judgment of the courts
under case
number 16381/22, wherein an order was agreed upon by consent of the
parties for the payment of R161 238.46 to one
Pieter Andreas
Olivier. Another judgment taken in favour of Cronos Capital
(Pty) Ltd, under case number 15237/23, for a sum
of R608 778.
The first respondent is also indebted to the South African
Revenue Service for an amount in excess of R3 000 000.00.
[27]
The correct approach in determining whether a sequestration may yield
any advantage to creditors
is well established. In Meskin
& Co v Friedman,[7]
it
was held that:
“The
right to investigate is given, as it seems to me, not as an advantage
in itself, but as a possible means of securing ultimate
material
benefit for the creditors in the form, for example, of the recovery
of property disposed of by the insolvent or the disallowance
of
doubtful or collusive claims. In my opinion, the facts put
before the Court must satisfy it that there is a reasonable
prospect-
not necessarily a likelihood, but a prospect which is not too remote-
that some pecuniary benefit will result to creditors.
It is not
necessary to prove that the insolvent has any assets. Even if there
is none at all, but there are reasons for thinking
that as a result
of the enquiry under the Act some may be revealed or recovered for
the benefit of creditors, that is sufficient.”[8]
[28]
In the given circumstances the point of departure
would be to consider whether there are realistic prospects
that
pecuniary benefit will result to creditors.[9]
Against the
disposition that the first respondent was factually insolvent, regard
must also be had to the timing of the donation
of 50% value of
immovable property, at no benefit to him. This donation was
processed in August 2023, following litigation
in pursuit of the
claim by the applicant had already been issued. On 01 December
2023, a week after the default judgment
of the 22 November 2023, the
immovable property of the first respondent was sold to a third party
for R12 000 000.00.
From the mentioned transaction, the
first respondent realised proceeds of about R9 000 000. 00,
which remains unaccounted
for. The payment of R3 000 000.00
to Investec Bank to settle the mortgage bond on the same immovable
property may
suggest that, despite the alleged factual insolvency,
certain creditors are unfairly benefiting as their debts are being
paid.
On the eve of the hearing for this application on 15 May
2025, the first respondent made an offer to reach a compromise in
order
to pay the R3 000 000.00 debt owed to SARS, one of the
creditors.
[29]
The inquiry herein does
not focus
on the purpose or motivation behind the donation of partial ownership
of his immovable property, without the disposal of the
property
itself, and the selective payment of certain creditors.[10]
The focus here is on whether the transactions in question occurred
more than two (2) years prior to the sequestration, and
if granting
provisional sequestration would benefit the creditors.[11]
Much as SARS is accepted as a preferent creditor, the point
remains that it is unlikely that the first respondent may be
without
any assets that, if properly investigated would induce some benefit
to the creditors. Furthermore, the payment of
R3 00 000.00
to Investec Bank, despite the first respondent having other
creditors, serves as another indication of the need
to investigate
how Investec Bank was preferred over other creditors.
[30]
The actions of the first respondent, particularly in his
interactions with certain creditors and the manner in
which he has
disposed of assets potentially linked to him, do not align with those
of a debtor who is factually insolvent. The
conduct of the
first respondent towards some creditors also demonstrated that if a
structured investigation is not permitted, some
creditors may
continue to unduly benefit at the expense of others. Therefore,
the first respondent has demonstrated through his conduct towards
some of his creditors that should he be provisionally
sequestrated,
it would be to the advantage of the larger body of creditors. A
provisional sequestration continues to be the most appropriate
means of ensuring an equitable material benefit for
the entire
body of his creditors.[12]
[31]
Upon consideration of the relevant factors and
applying the legal principles, the applicant has fully discharged
the
onus that rested on it to justify granting of the relief sought in
the its notice of motion. The evidence has shown overwhelmingly
that
the applicant remains a creditor for a liquidated claim; the first
respondent committed an act of insolvency and that a provisional
sequestration of his estate may be to the advantage of the body of
his creditors.
Costs
[32]
The applicant seeks an attorney and client costs
of this application be costs in the administration of the
insolvent
estate of the first respondent.
‘The
scale of attorney and client is an extraordinary one which should be
reserved for cases where it can be found that a litigant
conducted
itself in a clear and indubitably vexatious and reprehensible
conduct. Such an award is exceptional and is intended to
be very
punitive and indicative of extreme opprobrium.’[13]
If regard is had to the nature of the proceedings at hand,
being provisional sequestration, an opportunity may still be
presented to the parties on the return date to have a meaningful
ventilation of relevant issues in determination of costs. Any
determination of punitive cost must have an objective basis as such
costs would be justified where there is an extra-ordinary conduct.
Notwithstanding an invitation that the parties provide supplementary
arguments on the costs order sought by the applicant, this
invite did
not receive a positive response. In the circumstances, I am
convinced that the most equitable approach to costs
at this stage
would be to allow it to stand over for later determination.
Order
[33]
The following order is made:
1. That
the estate of the first respondent be placed under a provisional
sequestration in the hands of the Master
of the High Court.
2. That
the rule nisi is hereby issued calling on the first respondent
and all persons interested to appear and show cause, if any, to this
Honourable
Court, on Tuesday 5 August 2025 (Motion Court) as
to why an order should not be granted in the following terms:
a. That
the estate of the first respondent be placed under final order of
sequestration; and
b. That
the costs stand over for later determination;
3. That
service of the order is effected as follows:
a. By
the Sheriff on the first and second respondent personally;
b. By
the sheriff on the South African Revenue Services Cape Town;
c. By
the Sheriff upon the employees of the first respondent (if any) and
any trade unions which represents the
employees;
d. By
one publication in each of “the Cape Times” and “Die
Burger newspapers; and
4. By sending a
copy of this order to all known creditors of the first respondent,
with claims in excess of R20,000.00 by
prepaid registered mail.
SIPUNZI
AJ
Acting
Judge of the High Court
Appearances
Counsel
for the applicant:
Adv Jean Bence
Instructed
by:
Koegelenberg Attorneys
41 Vasco Boulevard
Goodwood, Cape Town
Counsel
for the respondent:
Adv Claire Cawood
Instructed
by:
Mr Allan Jones – First Respondent
Date
of Hearing:
26
May 2025
Date
of Judgment:
3 June 2025
This
judgment was handed down electronically by circulation to the
parties’ representatives by email.
[1]
Applicant’s
replying affidavit, paragraph 23 to 25
[2]
Affidavit
of Allan George Jones, dated 16 October 2025
[3]
Pheko
and Others v Ekurhuleni City 2015(5) SA 600 (CC) at 1
[5]
Express Model Trading 289 CC vs Dolphin Ridge Corporate 2015
(6) SA 224 (SCA)
[6]
Secretary,
Judicial Commission of Inquiry into allegations of State Capture v
Zuma and Others 2021 (5) SA 327 (CC) at para 59
[8]
Also
followed in Stratford and Others v Investec Bank Ltd & Others
(CCT
62/14) [2014] ZACC 38; 2015 (3) BCLR 358 (CC); 2015 (3) SA 1 CC;
2015 36 ILJ 583 (CC) (19 December 2014) paragraph 45; Braithwaite v
Gilbert (Volkskas Intervening) 1984 (4) SA 717 (W) 718 B; Nutrigrun
(Pty) Ltd v Odendaal & Another (Case No. 5603/2017) HCFS (26
April 2018), paragraph 6.
[9]
Meskin
& Co v Friedman
[12]
Meskin
v Friedman supra
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