Agri South Africa NPC v Paulsmeier (20910/2024) [2025] ZAWCHC 530 (17 November 2025)

Key Facts

Issues

• The respondent argued he had settled the costs orders via a joint account and a purported R11.9 billion credit note. The court rejected these claims, noting no evidence of payment, no proof of the settlement agreement's existence, and no credible documentation. The respondent's defenses were deemed conclusory and unsupported by primary facts, leading to the conclusion there was no bona fide dispute under section 9(1) of the Act.
• The court addressed whether the applicant satisfied the legal criteria for provisional sequestration under the Insolvency Act 24 of 1936. The applicant's claims were based on two taxed costs orders (R383,067.29 and R144,434.96) that remained unpaid, supported by two sheriff's nulla bona returns (17 November 2022 and 5 June 2024). The court determined that the applicant had a valid claim, the respondent committed acts of insolvency under sections 8(b) and 8(g) of the Act, and there was a reasonable prospect that sequestration would benefit creditors by uncovering assets. These findings satisfied the requirements under section 9(1) of the Act.
• The court considered the applicant's non-compliance with Practice Direction 30(1), which mandates notifying spouses in out-of-community marriages of sequestration applications. The applicant omitted this step, but the respondent's spouse (Matilda Helena Paulsmeier) submitted an affidavit confirming her awareness of the proceedings and objection to her name being included. The court held that the purpose of the practice direction was achieved as the spouse was informed, and the non-compliance was condoned in the interests of justice.

Holdings

• The court concluded that provisional sequestration would benefit creditors, as a trustee could investigate potential assets beyond the respondent's reach. This included addressing the respondent's ongoing litigation costs and possible asset concealment.
• The court found a prima facie case of factual insolvency, noting the respondent's inability to pay debts despite claims of vast assets. The respondent's uncorroborated SARS declaration and lack of evidence to substantiate his financial position were critical to this determination.
• The court determined that the respondent committed acts of insolvency under sections 8(b) and 8(g) of the Insolvency Act, citing two sheriff's nulla bona returns and a written notice of inability to pay. The respondent's failure to satisfy taxed costs orders and his admission of inability to pay were key factors.
• The court exercised its discretion to grant provisional sequestration, finding no special circumstances to justify refusal. The respondent's arguments, including procedural challenges and self-serving financial claims, were deemed insufficient to warrant discretionary relief.

Remedies

• The Sheriff shall attach all movable property of the insolvent estate and shall immediately after effecting the attachment, report to the Master in writing that the attachment has been effected and submit a copy of the inventory.
• The respondent, and any party with a legitimate interest in the respondent's affairs, is called to show cause on Tuesday, 24 February 2026, at 10:00, or as soon thereafter as the matter may be heard, why an order should not be granted making the provisional sequestration final.
• The costs of this application (excluding costs incurred from 6 November 2025 until 17 November 2025) shall form part of the costs of administration of the respondent's insolvent estate, taxed on a scale as between attorney and client, including senior counsel taxed on scale B.
• This order shall be served by the sheriff on the respondent at Hartenbos, on his spouse Matilda Helena Paulsmeier, on the South African Revenue Service via email, delivered to the Master, and published in the Cape Argus, Burger, and Government Gazette.
• The estate of Mark Erwin Paulsmeier is placed under provisional sequestration in the hands of the Master of the High Court, Cape Town.

Legal Principles

• The court applied the standard of proof required for factual insolvency, noting that a prima facie case of insolvency is established through the respondent's failure to pay debts despite claiming significant assets. The sheriff's 'nulla bona' returns served as prima facie evidence under the Superior Courts Act.
• The court addressed the requirement for provisional sequestration under section 9(1) of the Insolvency Act, emphasizing the need to prove (1) a valid claim, (2) an act of insolvency, and (3) a reasonable prospect of benefit to creditors. These were all satisfied in the applicant's case.
• The court emphasized that costs of the sequestration application, excluding those incurred after 6 November 2025, must be taxed on a scale between attorney and client, including senior counsel on scale B. This aligns with the established legal framework for cost allocation in such proceedings.
• The respondent failed to discharge the burden of proving payment of the taxed costs. The court reiterated that in sequestration proceedings, the onus is on the respondent to establish payment on 'bona fide and reasonable grounds,' which he did not satisfy through evidence or correspondence.

Precedent Name

• Sewpersad and Others v Standard Bank of South Africa (Pty) Ltd and Others
• Ganes and Another v Telecom Namibia Ltd
• Samsudin v Berrange NO
• Eskom v Soweto City Council
• In re BOE Trust Ltd
• Scher & Getz, N.O. v Mader
• Standard Bank v Sewpersadh
• Van Vuuren v Jansen
• De Jager Investments Ltd v Mark
• Port Shepstone Fresh Meat & Fish Co. (Pty.), Ltd. v. Schultz
• De Waard v Andrew & Thienhaus Ltd
• Stratford and Others v Investec Bank Ltd and Others
• Millward v Glaser
• ABSA Bank Limited v Cupido N.O. and Another
• Meskin & Company v Friedman

Cited Statute

• Superior Courts Act 10 of 2013
• Insolvency Act 24 of 1936
• Justices of the Peace and Commissioner of Oaths Act 16 of 1963

Judge Name

Passage Text

• Once the applicant for a provisional order of sequestration has established on a prima facie basis the requisites for such an order, the court has a discretion whether to grant the order. Where the conditions prescribed for the grant of a provisional order of sequestration are satisfied, then, in the absence of some special circumstances, the court should ordinarily grant the order, and it is for the respondent to establish the special or unusual circumstances that warrant the exercise of the court's discretion in his or her favour.
• 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 are none at all, but there are reasons for thinking that as a result of enquiry under the Act some may be revealed or recovered for the benefit of creditors, that is sufficient...
• Now, when a man commits an act of insolvency he must expect his estate to be sequestrated. The matter is not sprung upon him; first, a judgment is obtained against him, then a writ is taken out, and he must expect, if he does not satisfy the claim, that his estate will be sequestrated. Of course, the Court has a large discretion in regard to making the rule absolute; and in exercising that discretion the condition of a man's assets and his general financial position will be important elements to be considered. Speaking for myself, I always look with great suspicion upon, and examine very narrowly, the position of a debtor who says 'I am sorry that I cannot pay my creditor, but my assets far exceed my liabilities.' To my mind the best proof of solvency is that a man should pay his debts; and therefore I always examine in a critical spirit the case of a man who does not pay what he owes.