Court name
High Court
Title

Municipal Council of Windhoek v Awaseb () [2012] NAHC 312 (12 November 2012);

Media neutral citation
[2012] NAHC 312
Coram
Ndauendapo J















REPORTABLE


REPUBLIC
OF NAMIBIA





IN
THE HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK





JUDGMENT





Case
No: (A) 201/2008





In
the matter between:





THE
MUNICIPAL COUNCIL OF WINDHOEK
..................................................APPLICANT





and





ERNST
ENGELHARDT AWASEB
...............................................................RESPONDENT






Neutral
citation:
The Municipal Council of Windhoek v Awaseb (A
201/2008) [2012] NAHCMD 60 (12 November 2012)






CORAM:
NDAUENDAPO J






Heard:
2011


Delivered:
12 November 2012








Flynote:
Insolvency law—Application for provisional sequestration of
respondent—Acts of insolvency relied upon—Failure to
satisfy judgment—Issuance of writ of execution—Return of
service defective—No demand made to satisfy writ or indicate
disposable property—No indication that deputy sheriff did not
find sufficient disposable property—Acts of insolvency not
proven-Application dismissed.





Summary:
Applicant launched an application for the provisional sequestration
of the respondent. The acts of insolvency relied upon are that a
default judgment was granted in favour of applicant and respondent
failed to satisfy judgment and on the ground that a writ of execution
was issued against the respondent.


Respondent
argued that the return of service was defective because it did not
indicate that demand was made to satisfy the judgment nor did it
indicate disposable property. Further the return of service did not
indicate that the Deputy Sheriff did not find sufficient disposable
assets to satisfy judgment. Acts of insolvency not proven.
Application dismissed.


______________________________________________________________________


ORDER


______________________________________________________________________


The
application for the provisional sequestration of the respondent is
dismissed with costs.


______________________________________________________________________


JUDGMENT


______________________________________________________________________





NDAUENDAPO
J





[1]
The applicant launched an application for the provisional
sequestration of the respondents’ estate in terms of the
Insolvency Act 24 of 1936 (as amended).





[2]
The parties





The
Applicant is the Municipal Council of Windhoek, a juristic person
duly established in terms of the provisions of section 6 (2) of the
Local Authorities Act, 1992 (Act 23 of 1992) with its principle place
of business situated at independence Avenue, Windhoek Republic of
Namibia.





The
Respondent is Ernst Engelhardt Awaseb,
a major
male with full legal capacity residing at number Erf 51 situated at
no 81 Hercules Street, Dorado Park, Windhoek Republic of Namibia.





[3]
Background





Ms
De Kock, the corporate legal Advisor of the applicant, deposed to the
founding affidavit. She avers ‘that on 12 August 2004 the above
honourable Court granted default judgment in favour of the applicant
against the respondent for:





1.
Payment of the amount of N$203 9440.88


2.
Interest at the rate of 20% per annum as from the date after service
of summons to date of final payment and


3.
Costs of suit’





[4]
As at 30 may 2007 the outstanding balance owed to applicant was N$90
796.75 that amount constitutes a liquidated claim as contemplated by
section 9 (1) of the Insolvency Act 24 of 1936 (as amended by Act 12
of 2005) because applicants has no security for its claim. A warrant
of execution against the respondent was issued. On the 9 November
2004 the Deputy- Sheriff for the district of Windhoek duly executed
the warrant and attached certain movable property.





No
sale in execution was held in that it was discovered that the
respondent also had a vehicle, which was not attached’. Another
writ was executed. On 3 March 2005 the Deputy-sheriff issued a return
of service in which he certified that:





you
are hereby informed that the motor vehicle is no longer in possession
of the Defendant. The Defendant informed me that he sold the vehicle
during October 2004.’





[5]
Ms De kock further avers that the disposition came after the
applicant obtained judgment against the respondent and after
execution proceedings were initiated against the respondent and
according to her the respondent is in the process of disposing of his
assets to the prejudice of his creditors as contemplated by section 8
(c) of the Insolvency Act 1936.





She
avers that a deed search was conducted and it was established that
the respondent does not own any immovable property.





Based
on the aforesaid, she concludes that the respondent is not only in
the process of disposing of his assets to the prejudice of his
creditors but his liabilities also exceeds his assets and he is
unable to pay his debts, hence the application for his sequestration.
The respondent opposed the application and filed an answering
affidavit. He was not legally represented when he drafted and filed
the answering affidavit and the issues addressed in his answering
affidavit are not relevant to the inquiry whether he must be
provisionally sequestrated or not and therefore I will not consider
his answering affidavit.





[6]
The issues





In
order for the applicant to be successful with its application for
sequestration, it must prove that the respondent committed one or
more acts of insolvency. That is what this court has to consider.





[7]
Applicant’s submissions





Mr
Pickering on behalf of the applicant submitted that the respondent
committed acts of insolvency. The acts of insolvency relied upon by
the applicant is that the respondent failed to satisfy a judgment
granted in favour of the applicant and the fact
that a writ of attachment had been issued against the respondent.





In
his supplementary heads, Mr Pickering submitted, that the Deputy
Sheriff’s return of services is not defective to establish an
act of insolvency and that an Act of Insolvency has been established
by the mere issuance of a writ and or attachment of the respondent’s
assets, that the mere fact that judgment had been obtained against
the respondent is an act of insolvency and that the fact that the
respondent sold his vehicle is also an act of insolvency. Applicant
relies on sections 8 (b) and (c) of the Insolvency Act.





He
further submitted that there is reason to believe that it will be to
the advantage of creditors if the estate is sequestrated.





[8]
Respondent’s submissions





Mr
Tjombe on behalf of the respondent,
submitted
that it was not proven that the respondent committed an act of
insolvency. He further submitted that the return of service of the
Deputy Sheriff is defective in that it does not comply with section 8
(b) of the Insolvency Act.





[9]
The Legal Principles applicable





Section
8 (b) provides that:


8
Failure to
satisfy judgment


(b)
if a court has given judgment against him and he fails, upon the
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 made by
that officer that he has not found sufficient disposable property to
satisfy judgment.


The
section creates two separate acts of insolvency. One where the
debtor, upon demand of the sheriff, fails to satisfy the judgment or
to indicate disposable property sufficient to satisfy it, two, where
the sheriff himself fails to find sufficient disposable property to
satisfy judgment and states this fact in his return. Although the
subsection creates two acts of insolvency, they are not independent
of each other, the second act only applies and can only be committed
where the first cannot be established.





[10]
The return of service of Deputy Sheriff annexed to the founding
affidavit states as follows:





I,
the undersigned,
MARTHINUS
GERHARDUS
FOURIE,
do hereby certify
that I have on the 09
th
day of November, 2004 at
10:35, at
ERF 51,
Hercules Street,
Dorado Park,
Windhoek,
seized and laid under
judicial attachment the goods describe in the undermentioned
Inventory in pursuance of a writ of Execution issued out of the High
Court of Namibia, bearing date 28 September 2004, directing me to
attached the movable goods of the abovenamed Defendant,
ERNST
ENGELHARDT AWASEB
,
and of the same cause to be realized by public auction the sum of
N$103 940.88 together with interest thereon at the rate of 20% per
annum as from June 2004 plus costs plus 15% VAT to be the duly taxed
costs and charges in respect of the writ of execution, and also all
other costs and charges of the Plaintiff in the said case to be
hereafter duly taxed according to law, besides Deputy Sheriff’s
costs’.





The
Writ of Execution was duly served on the Defendant by exhibiting the
original document to him, at the same time handing to him personally
a true copy thereof and explaining to him the nature and the contents
thereof.





DATE
at
WINDHOEK the 9th
day of NOVEMBER, 2004.





INVENTORY:


1x
Defy refrigerator


1x
Defy Tumble Dryer


1x
Television cabinet


1x
Lounge suite”





[11]
In casu, the return of service does not state that there was a demand
from the respondent to satisfy the judgment and the respondent failed
to do that or to indicate disposable property sufficient to satisfy
the judgment or it does also not indicate that the sheriff failed to
find disposable property to satisfy the judgment.





In
Nedbank Ltd v Norton 1987 (3) SA 619 at 621 the Court held
that:





If
it is possible for the execution officer to make the demand he should
do so and he is not entitled to omit to do so and simply to make a
return to the effect that he has not found sufficient disposable
property to satisfy the judgment. The debtor is the person best
situated to know what property he has and the whereabouts thereof and
if the execution officer where to fail to enquire from the debtor,
when it is possible to make such enquiry, what property he has and
where it can be found, then he could hardly be said to have taken all
the appropriate steps to ascertain what property the debtor has’





The
learned author
Sharrock et all
Isolvency Law 6 ed 26 state that:





if
the sheriff, due to oversight, neglects to demand satisfaction of the
writ by the debtor and simply states in his return he was unable to
find sufficient disposable property, no act of insolvency is
committed’.





[12]
The return of service only refers to movable property which was
attached. There is no mention of immovable property. In Amalgamated
Hardware & Timber (Pty) v
Wimmers 1964 (2) SA 542 (T) at
544
it was held that ‘if the deputy Sheriff’s return
only refers to movable property, it does not establish an act of
insolvency’. At 544 D-E the Court further held that:’ I
should add that there is no reason why, after having made enquiries
in regard to movables, with the result indicated in the return, the
Deputy sheriff should also not make the further enquiry whether the
debtor is possessed of immovable property capable of attachment’.





The
writ of execution does also not state that the attached assets are
insufficient to satisfy the judgment.


Accordingly,
I agree with the submission by Mr Tjombe that the writ of execution
is defective and does not comply with the requirements of section 8
(b) of the Insolvency Act. Consequently, no act of insolvency has
been established.





In
respect of the requirements of section 8 (c), the section states
that
: ‘Disposition prejudicing creditors or
preferring one creditor if he makes, or attempts to make, any
disposition of any of his property which has, or would have, the
effect of prejudicing his creditors or of preferring one creditor
above another’.
This section envisages two
sets of circumstances: an actual disposition of property. In this
case there is actual disposition. The applicant avers that
the
disposition comes after the applicant obtained judgment against the
respondent and after execution proceedings were initiated against the
respondent. I respectfully submit that it is apparent that the
respondent is in the process of disposing of his assets to the
prejudice of his creditors’.





Sharrok
et all Insolvency Law
6 ed of 28 state that:





It
is not sufficient for the applicant to state baldy that the
disposition in question has had the effect of prejudicing creditors:
he must explain how it has had this effect’.

In this case that
has not been done by the applicant nor does the applicant state that
the effect of the disposition is such that a reasonable person would
infer that it is prejudicial to creditors.





In
the result,


I
make the following order





The
application for the provisional sequestration of the respondent is
dismissed with costs.






































________________


GN
Ndauendapo


Judge


APPEARANCE











ON
BEHALF OF APPLICANTS: DE KOCK


FOR
SHIKONGO LAW CHAMBERS




















ON
BEHALF OF THE 1ST RESPONDENT: N TJOMBE


FOR
NORMAN TJOMBE LP