Tongaat - Hulett Sugar Limited v Phillips (CIV\APN 202 of 96) [1998] LSCA 9 (26 January 1998)

1 CIV\APN\202\96 IN T HE HIGH C O U RT OF L E S O T HO In the application of: T O N G A AT - H U L E TT S U G AR L I M I T ED Applicant vs M I C H A EL PHILLIPS Respondent J U D G M E NT Filed by the H o n. M L Lehohla on the 26th day of January, 1998 T he Court having heard concluding addresses on this matter on 2th M a y, 1997 gave an order on 6th M a y, 1 9 97 in favour of the respondent in the following terms: " On the basis of a m o re or less comparable case i.e. D u r h am Fancy G o o d s. Ltd vs Michael Jackson (Fancy G o o d s) Ltd. A nd Another ( 1 9 6 8 )2 A L L ER 8 97 to the instant o ne w h e re the English court found that a transgression of the relevant section of the Act (108 of 1948) does not necessarily m e an that the person w ho signs a c o m p a ny cheque which does not reflect or display the full n a me of the c o m p a n y, should be subjected to e n f o r c e m e nt of a claim in t e r ms of the relevant section of the A ct because it w o u ld be inequitable to do so, I am inclined to the v i ew that this is not a proper case w h e re the respondent should be subjected to the full rigour of the sequestration law. C o n s e q u e n t ly the provisional sequestration order is discharged with costs." T he h e a d n o te in the authority cited a b o ve is to the following effect:- " T he plaintiff c o m p a ny d r ew a ninety - d ay bill of e x c h a n ge on a c o m p a ny w h o se correct n a me w as 'Michael J a c k s on ( F a n cy G o o d s ), L t d ', but w h i ch w as referred to in the bill a nd the f o rm of acceptance prepared by the plaintiff c o m p a ny as ' M. J a c k s on ( F a n cy G o o d s ), L t d . , J ., a director a nd secretary of the d r a w ee c o m p a ny at the time, signed the acceptance of the bill without correcting the error in the n a me of his c o m p a n y. T he bill w as dishonoured on maturity, J, having severed his connexion with the d r a w ee c o m p a ny a nd it h a v i ng g o ne into liquidation. In an action in w h i ch it w as sought to m a ke J. personally liable on the bill by virtue of s.108 of the C o m p a ny A c t, 1 9 4 8, H e l d: although the n a me attributed to the d r a w ee c o m p a ny in the bill of e x c h a n ge w as a misdescription a nd J., by signing the bill on behalf of the d r a w ee c o m p a n y, h ad contravened s.108 of the C o m p a n i es A c t, 1948, a nd rendered himself personally liable u n d er that section on the bill, the plaintiff c o m p a ny w as e s t o p p ed f r om enforcing that liability, since t h ey t h e m s e l v es w e re r e s p o n s i b le for the w r o ng description a nd impliedly r e p r e s e n t ed that t h ey w o u ld treat a c c e p t a n ce in that f o rm as b e i ng regular a nd n ot giving rise to p e r s o n al liability a l t h o u gh the plaintiff c o m p a ny w as e s t o p p e d, the civil liability created by s.108 w o u ld h a ve b e en available to a ny other h o l d er w ho w as u n a f f e c t ed by the equitable d e f e n c e" T he petitioner h ad obtained before M o n a p h a t hi J on 1 5 th M ay 1 9 96 an o r d er at p a ge 4 of the r e c o rd in the f o l l o w i ng t e r ms to w i t, that 1.2 R e s p o n d e nt be p l a c ed u n d er provisional w i n d i ng up int he h a n ds of the M a s t er of the H i gh C o u rt of L e s o t h o. 2. A R u le N i si is issued calling u p on the R e s p o n d e nt a nd all other interested parties to s h ow c a u s e, if a n y, to this H o n o u r a b le C o u rt on the 10th J u ne 1 9 96 at 9h 30 am or so s o on thereafter as the m a t t er m ay be h e a r d, w hy a final o r d er of liquidation s h o u ld b ot be granted. 3. T h is o r d er be p u b l i s h ed o n ce in the L e s o t ho T o d a y. 4 T he petition sets out that T o n g a at - Hulett S u g ar L i m i t ed the Petitioner is a c o m p a ny d u ly incorporated a c c o r d i ng to the L aw of the R e p u b l ic of S o u th Africa a nd carries on business as a sugar refiner a nd distributor h a v i ng its h e ad office at 1 0 0 1, U m h l a n ga R o c ks D r i v e, La L u c i a, K w a Z u lu Natal. T he R e s p o n d e nt is a b u s i n e s s m an w ho carries on business in the K i n g d om of L e s o t ho a nd S o u th Africa. He is also said to be the f o r m er m a n a g i ng director of a c o m p a ny k n o wn as A n g l es Enterprises ( P t y) L i m i t ed w h i ch w as registered a nd incorporated in the K i n g d om of L e s o t ho a nd h as b e en p l a c ed u n d er provisional liquidation by m e a ns of the order given by the H i gh C o u rt on 5th M a y, 1 9 9 6. S ee A n n e x u re A at p a ge 4. T he R e s p o n d e nt resides at Leribe in L e s o t ho in a large h o u se n e ar the Petrol Station there. He is m a r r i ed to Thembisile Patricia Phillips but the Petitioner d o e s n 't k n ow w h at l aw g o v e r ns that marriage. T he Petitioner alleges that the R e s p o n d e nt is indebted to it in the following a m o u n t s: 1. An a m o u nt of R 1 58 2 3 7 . 60 b e i ng in respect of a c h e q ue d a t ed 8 M a r ch 1 9 96 ( c o py a n n e x ed a nd m a r k ed " B " ). 2. An a m o u nt of R 3 16 4 7 5 . 20 in respect of a c h e q ue dated 9 M a r ch 1 9 96 ( c o py a n n e x ed a nd m a r k ed " C " ). T he Petitioner alleges that the liability arose u n d er the c i r c u m s t a n c es set out b e l o w, to wit, that: 1. during M a r ch 1 9 96 the Petitioner sold a nd delivered to A n g i es Enterprises (Pty) L i m i t ed ("The C o m p a n y ") four c o n s i g n m e n t s, e a ch consisting of 34 tons of sugar; 2. the c h e q u e s, a n n e x u r es " B" a nd " C" w e re in p a y m e nt of the said c o n s i g n m e n t s, 3. the c h e q u es w e re b o th signed by the R e s p o n d e n t, or alternatively he permitted the said c h e q u es to be signed on b e h a lf of the C o m p a n y, 4. the c h e q u es w e re d r a wn on the S t a n d a rd C h a r t e r ed B a nk L e s o t ho L i m i t ed of M a p u t s oe in L e s o t h o. 5. the Petitioner is a nd w as at all material t i m es the holder of the said c h e q u es for value, 6. the said c h e q u es w e re duly presented for p a y m e nt to the S t a n d a rd C h a r t e r ed B a nk L e s o t h o, M a p u t s oe B r a n c h, w h e re they w e re d i s h o n o u r ed by n o n - p a y m e nt a nd returned m a r k ed "refer to d r a w e r ", 7. the said c h e q u es w e re d r a wn on a c c o u nt 0 47 0 49 4 04 8 81 w h i ch is an a c c o u nt o p e r a t ed by the C o m p a n y; T he Petitioner accordingly stated that the R e s p o n d e nt b r e a c h ed the provisions of Section 86 of the C o m p a n i es A ct 25 of 1 9 67 of the K i n g d om of L e s o t ho ("the A c t ") in that (a) the c h e q u es did n ot h a ve m e n t i o n ed thereon, in legible characters, the C o m p a n y 's n a me as required by Section 86 ( 1) © of the A c t; (b) the c h e q u es w e re d i s h o n o u r ed by n on p a y m e n t, © the R e s p o n d e nt h ad signed the c h e q u e s, or permitted s a m e, to be s i g n ed on b e h a lf of the C o m p a n y, (d) the R e s p o n d e nt w as an officer of the C o m p a n y, i n a s m u ch as he w as the m a n a g i ng director thereof, (e) he is accordingly liable in t e r ms of Section 8 6 ( 4) ( b) of the A ct for the a m o u nt of the said c h e q u e s. A c o py of Section 86 of the A ct is a n n e x ed m a r k ed D at p a ge 2, section 86 (4) ( b) r e a d s; If a ny officer of a c o m p a n y, or a ny p e r s on on its b e h a lf (a) (b) issues or permits the issue of a ny business letter, notice or other official publication of the c o m p a n y, or signs or permits to be s i g n ed on b e h a lf of the c o m p a ny a ny bill of e x c h a n g e, p r o m i s s o ry note, e n d o r s e m e n t, c h e q ue or o r d er for m o n ey or g o o ds w h e r e in its n a me is n ot m e n t i o n ed in m a n n er aforesaid, or he shall be guilty of an offence a nd liable on conviction to a fine not e x c e e d i ng o ne h u n d r ed r a nd a nd shall further be personally liable to the h o l d er of the bill of e x c h a n g e, p r o m i s s o ry n o t e, c h e q ue or o r d er for m o n ey or g o o ds for the a m o u nt thereof, unless it is d u ly p a id by the c o m p a n y ." T he Petitioner states that it h o l ds no security for its c l a im s a ve that: 1. it m ay obtain a dividend f r om the c o m p a ny in liquidation. At this stage it is i m p o s s i b le to s ay w h at that d i v i d e nd will be b ut it is likely to be negligible b e c a u s e: (a) the creditor w ho obtained the w i n d i ng up order against the R e s p o n d e n t, Illovo S u g ar L i m i t ed of D u r b a n, K w a Z u lu N a t al ("Illovo S u g a r ") h as a c l a im against the C o m p a ny in the s um of R 1 7 10 7 5 . 0 6, a nd h as attached A n n e x u re " E" consisting of t wo c h e q u es d r a wn in f a v o ur of Illovo S u g ar L i m i t ed for R 85 0 8 7 . 89 e a c h. B o th c h e q u es w e re referred to " d r a w e r ." In r e s p o n se to the Petitioner's a v e r m e nt at p a ge 8 p a r a g r a ph 6 the r e s p o n d e nt at p a ge 65 d e n i es that the Petitioner w o u ld receive a negligible d i v i d e nd f r om the C o m p a n y 's estate o w i ng to the c l a im by M e s s rs Illovo S u g ar L i m i t ed for R 1 7 10 7 2 5 . 0 6. T he r e a s on he gives for this assertion is that this a m o u nt will be t a k en up w i th the liquidators. He further indicates that the a m o u nt d ue to Illovo S u g ar L i m i t ed is in the region of R 6 00 0 0 0 . 0 0. T he R e s p o n d e nt g o es further to s u b m it that e v en if it is f o u nd that S e c t i on 86 of the C o m p a n i es A ct a b o ve m a k es h im liable for the a m o u nt of the c h e q u es in question, the Petitioner is still not entitled to c l a im f r om h im until it is s h o wn that Angies Enterprises (Pty) Limited in liquidation shall not be able to pay the amount of the cheques. He submits that section 86 above makes it clear that personal liability for the drawer of the cheque only comes into play when same is not duly paid by the company itself, a fact which can only be established once the dividends are paid out. Thus the Respondent submits that liquidation is a form of a payment by the company. The purpose of winding-up the company is to benefit all the creditors. The straw at which the respondent is clutching appears to me to be what the authority of Epstein vs Bell and Another|997 (1) SA 483 at p.489 denounced in regard to the basic principle of actus non facit reum, nisi mens sit rea in the following terms:- " of course, the lawmaker has it within its power to override this fundamental principle of fairness, and to make absolute the duty of compliance with its behests, thus rendering innocent violations punishable. But such an inroad into individual freedom should be made to appear very plainly, so that he who runs may read. Then the Court would not have to grope for the legislative intention as to mens rea amid ambivalent considerations such as purpose, penalty, and the reasonableness of going one way or the other." Having based his submission on the above authority in favour of the Petitioner Mr Fisher rammed the point home by indicating that "The language of the prohibition in section 50 ( 1) (similar to L e s o t h o 's 8 6) of the A ct is plainly p e r e m p t o r y. " S ee E p s t e in p. 4 89 E - F. T he Petitioner a v e rs that the R e s p o n d e nt h as b r e a c h ed the provisions of section 86 a b o ve in the f o l l o w i ng respects, to wit, that (a) the c h e q u es did n ot m e n t i on t h e r e o n, in legible characters, the c o m p a n y 's n a m e, as required by section 86 ( 1) ©. ( b) the c h e q u es w e re d i s h o n o u r ed by n o n - p a y m e nt © the r e s p o n d e nt s i g n ed the c h e q u es ( d) the r e s p o n d e nt w as an officer of the c o m p a ny i n a s m u ch as he w as the m a n a g i ng director thereof; (e) the petitioner h o l ds no security for this claim. In further s u p p o rt of the r e s p o n d e n t 's i n d e b t e d n e ss a nd de facto i n s o l v e n cy the petitioner alleges that the r e s p o n d e nt is i n d e b t ed to Illovo S u g ar L td in the s um R 1 70 7 2 5 . 06 on the s a me g r o u n ds that he is liable to the petitioner. B ut as h as b e en s h o wn the R e s p o n d e nt at p a ge 66 denies a ny p e r s o n al i n d e b t e d n e ss to the Petitioner "in the a m o u nt totalling R 4 74 7 1 3 . 10 or a ny a m o u nt w h a t s o e v e r ." T he R e s p o n d e nt also lays m u ch store by his s t a t e m e nt w i th r e g a rd to Illovo S u g ar that "Illovo S u g ar h as also b e en d o i ng b u s i n e ss w i th the c o m p a ny for quite a f ew y e a rs a nd w as fully a w a re that it is d o i ng b u s i n e ss w i th a limited c o m p a n y. T he Petitioner further alleges that the r e s p o n d e nt is indebted to it a nd to Illovo S u g ar in that a j u d g m e nt w as granted by the H i gh C o u rt on 2 2 nd April, 1 9 96 against the r e s p o n d e nt in respect of arrear rentals in the s um of R 2 03 6 2 5 . 1 2. In r e s p o n se the r e s p o n d e nt a d m i ts that in fact the arrear rental w as d ue to a certain Mr G . T. Surtie. T he R e s p o n d e nt further asserts that an a p p e al h as b e en n o t ed against this d e c i s i on a l t h o u gh an application for stay of the e x e c u t i on thereof h a d n 't yet b e en m o v ed e v en t h o u gh an a p p e al to the C o u rt of A p p e al d o es n ot automatically act as stay. He is h o w e v er h o p e f ul that in the light of the instant application there m i g ht be no n e ed to a p p ly for stay e x e c u t i on of the j u d g m e n t. T he Petitioner alleges that the R e s p o n d e n t 's liabilities far e x c e ed his assets. In r e s p o n se the R e s p o n d e nt at p a ge 67 p a r a g r a ph 8 d e n i es that his liabilities e x c e ed his assets a nd thus d e n i es that he is insolvent. W h at a p p e a rs to be c o m m on c a u se c an be s u m m ed up as follows:- 1. T he R e s p o n d e nt signed all the c h e q u es in q u e s t i on in his capacity as an officer of the c o m p a n y. At p a ge 64 at 5.2 He s a ys "I further a d m it that I s i g n ed these t wo c h e q u es on b e h a lf of A n g l es Enterprises(Pty)Limited." 2. T he petitioner including Illovo S u g ar L td are holders of all the c h e q u es in question. 3. T he c o m p a n y 's n a me w as n ot m e n t i o n ed on the c h e q u es in legible characters. S ee p a ge 64 p a r a g r a ph 5.3. 4. T he c h e q u es in question w e re d i s h o n o u r ed by n o n - p a y m e n t. 5. T he c o m p a ny n a me is not m e n t i o n ed at all in respect of the t wo c h e q u es d r a wn in favour of the petitioner, whilst the c h e q u es d r a wn in favour of Illovo Sugar L td m a ke no reference to the abbreviation " L t d" a nd " P T Y" or the full versions of these abbreviations. T he R e s p o n d e n t 's defence on papers in respect of n o n - c o m p l i a n ce with Section 86 is as follows a nd to wit, that: (a) he w as totally u n a w a re that the c o m p a n y 's n a me h ad to be m e n t i o n ed on its c h e q u e s. At 5.3 on p a ge 64 he says "I w as totally u n a w a re that the c o m p a ny w as required to h a ve its n a me mentioned on its cheques. Neither my l a w y e rs n or my b o o k k e e p e rs at a ny stage i n f o r m ed me that this is required. I, h o w e v er understand that the purpose of the aforesaid e n a c t m e nt is to prevent p e r s o ns f r om being deceived into the belief that they h a ve security with unlimited liability of c o m m on l aw w h en they h a ve the security of a limited c o m p a n y ". (b) the c o m p a ny has b e en d o i ng business with the petitioner for s o me three years a nd petitioner k n ew w ho it w as d o i ng business with at all material times. © the Petitioner should in a ny event e x c u se the c o m p a n y; m e a n i ng should seek p a y m e nt f r om the c o m p a ny before d o i ng so f r om the R e s p o n d e n t. Mr W e s s e ls for the R e s p o n d e nt insisted that the Petitioner bears the o n us of proof that the R e s p o n d e nt is actually insolvent a nd u r g ed the C o u rt not to exercise its discretion in favour of final sequestration. At p a ge 59 of C o r n er Shop(Pty)Ltd vs Moodley 1 9 5 0 ( 4) SA 55 ( T) R o p er J. said : " T he necessity of clear proof of insolvency w h e re no act of insolvency is established, e v en in cases w h e re the creditor h as alleged a state of insolvency as o ne of the g r o u n ds of his petition, h as b e en p o i n t ed o ut repeatedly". It s h o u ld be b o r ne in m i nd that there are no replying affidavits in this application b e c a u se the Petitioner's c o u n s el h ad to w a i ve t h em on a c c o u nt of their h a v i ng b e en filed out of t i me a nd the C o u rt h a v i ng r e f u s ed to grant c o n d o n a t i on for that irregularity. M o r e so b e c a u se t h ey w e re n ot authenticated b ut instead s i g n ed b e f o re a p e r s on w ho h ad p e c u n i a ry interest in the petition. T h us w i t h o ut replying affidavits the C o u rt c a n n ot a c c e pt that the c h e q u es to Illovo S u g ar w e re s i g n ed on b e h a lf of the c o m p a ny in liquidation i.e. A n g l es Enterprises(Pty)Ltd. In t he a b s e n ce of the replying affidavits it s t a n ds u n d i s p u t ed that t he R e s p o n d e n t 's nett assets a m o u nt to a p p r o x i m a t e ly R 5 50 0 0 0 - 0 0; w h i le the i n d e b t e d n e ss of A n g i es Enterprises (Pty)Ltd to the Petitioner a m o u n ts in a p p r o x i m a te t e r ms o n ly to R 6 00 0 0 0 - 0 0. Mr Wessels m a de a strong plea that b e c a u se it is r e c o g n i s ed that the liability c a n n ot be absolute then it stands to r e a s on that a p e r s on c an h a ve a d e f e n ce in t e r ms of section 8 6. I v i ew w i th f a v o ur the s u b m i s s i on that the L e s o t ho a nd S o u th A f r i c an L aw is largely b a s ed on the English L aw w h i ch as earlier s h o wn in D u r h am that in c o m p a r a b le circumstances, the C o u rt f o u nd that a transgression of the relevant section of the A ct (section 1 08 of the 1 9 48 A c t) d o es n ot necessarily m e an that the person w ho signs a c o m p a ny c h e q ue w h i ch d o es not reflect or display the full n a me of the c o m p a n y, should be subjected to the e n f o r c e m e nt of a claim in t e r ms of the relevant section of the relevant A c t, b e c a u se it w o u ld be inequitable to do so. T h us the respondent's defence is b a s ed either on estoppel a nd or equity. B ut e v en if these t wo are rejected it s e e ms to me that the r e s p o n d e nt h as o ne m o re shaft left in his quiver in that there w o u ld be no clear p r o of of insolvency b e c a u se the petitioner's claim is less than the nett balance of the respondent's assets. M o r e o v er the Petitioner h as not s h o wn that A n g l es Enterprises creditor is g o i ng to s ue the respondent a nd require h im to pay. To satisfy the C o u rt of this they w o u ld h a ve got affidavits f r om the c o m p a ny but on the contrary Illovo h as p r o c e e d ed against the c o m p a ny a nd not against the respondent Philips. He o w es t h em R 5 00 0 0 0 - 0 0. It is not k n o wn w h at the Petitioner is g o i ng to derive f r om the dividends paid to creditors. T he a m o u nt they m ay be entitled to claim f r om the r e s p o n d e nt is still uncertain. T h us they don't h a ve liquidated claim at this stage w h i ch is a r e q u i r e m e nt for sequestration. All in all the C o u rt has a discretion b ut I am p e r s u a d ed to the v i ew that w h e re Q u e e ns B e n ch says equity d e m a n ds that a p e r s on in these c i r c u m s t a n c es s h o u ld n ot be s a d d l ed w i th a final o r d er w h i ch is a v e ry drastic act, I feel it w o u ld be t oo r a sh to p r e ss on regardless. In B o w w er vs A n d r e ws 1 9 8 8 ( 4) SA 3 37 ECD at 3 39 H K a n n e m e y er J. in c i r c u m s t a n c es similar to the instant r e s p o n d e n t 's said : " T h u s, in my v i e w, the d e f e n d a nt is liable on the c h e q u e, subject to a ny d e f e n c es available to h i m, n ot b e c a u se he s i g n ed as a g e nt for a non-existent principal but b e c a u se of the operation of s.23(2) of A ct 69 of 1 9 8 4. It s h o u ld be m e n t i o n ed that the fact that the registration n u m b er of the close corporation d o es n ot a p p e ar on the c h e q ue also r e n d e rs d e f e n d a n t, personally signatory, the as liable. E v i d e n ce m ay be led that the signatory s i g n ed on b e h a lf of the close corporation in o r d er to establish the f o r m e r 's B ut e n f o r c e m e nt of s u ch liability by w ay of liability provisional s e n t e n ce p r o c e e d i n gs c an n e v er be c o m p e t e nt since e v i d e n ce of the n a me or correct n a me of the c o m p a n y, as the c a se m ay b e, m u st be a d d u c e d, i.e. liability d o es n ot a p p e ar ex facie the bill o n l y ". I m ay just h a rk b a ck to E p s t e in to indicate that at p . 4 87 M a g id J also a c c e p t e d, in c i r c u m s t a n c es a n a l o g o us to the instant c a s e, that a litigant w ho h as s i g n ed a c h e q ue in contravention of the S o u th A f r i c an equivalent of the L e s o t ho C o m p a n i es A ct section 86 (i.e. section 5 0 ( 3 ) ( b) - "is entitled to raise an estoppel against his o p p o n e nt w h en the latter h as m a de a representation w i th the intention that it be a c t ed on a nd w h i ch h as c a u s ed the litigant to alter his position to his p r e j u d i c e ". To say, as a r g u ed by Mr Fisher, that estoppel d o e s n 't a p p ly "for we didn't p e r s u a de R e s p o n d e nt n ot to p ut the n a me A n g l e s" is to t a ke t oo simplistic a v i ew of the instant matter. In this c o n n e c t i on the act of estoppel on w h i ch t he R e s p o n d e nt s e e ms to rely is that the Petitioner a c c e p t ed the c h e q ue as a c h e q ue d r a wn by the c o m p a ny ( A n g i e s) in respect of a d e bt of that c o m p a n y. T he s u b m i s s i on h as merit therefore that in v i ew of the fact that liability is n ot absolute n o t w i t h s t a n d i ng c o n t e n t i on by the Petitioner to the contrary, e v en if the R e s p o n d e nt is liable, the Petitioner d o es n ot y et h a ve a liquidated c l a im against the R e s p o n d e n t, as its c l a im w o u ld o n ly b e c o me liquidated o n ce it a p p e a rs h ow m u ch w o u ld be o w i ng to it after a d i v i d e nd h as b e en p a id by the c o m p a ny in liquidation. After all it is a r e q u i r e m e nt for a petition for sequestration that the petitioner s h o u ld h a ve a liquidated c l a im against the R e s p o n d e n t. In this r e g a rd M e s k in on I n s o l v e n cy L aw h as this to s ay in the loose-leaf addition at 2-1 : "A liquidated claim, in this c o n t e x t, is a c l a im for an a m o u nt w h i ch is fixed, either by a g r e e m e nt or by an o r d er of the C o u rt or o t h e r w i s e ". It is n ot k n o wn h ow m u ch if a n y t h i ng is g o i ng to be d ue or p a y a b le by the R e s p o n d e nt to the Petitioner. Similarly, E r a s m us ( S u p e r i or C o u rt P r a c t i c e) s a ys in this r e g a rd at B 1 - 10 "A liquidated a m o u nt in m o n ey is an a m o u nt w h i ch is either a g r e ed u p on or w h i ch is c a p a b le of s p e e dy a nd p r o m pt a s c e r t a i n m e n t ". Further at B l - 2 1 2: " T he following h a ve b e en h e ld n ot to be liquidated a m o u n ts in m o n ey : an a c c o u nt containing s o me i t e ms w h i ch the D e f e n d a nt c o n t e n ds to be o v e r c h a r g ed for, a nd other i t e ms for g o o ds sold w h i ch he c o n t e n ds w e re n ot of the quality g u a r a n t e e d; a d i s p u t ed partnership a c c o u nt extending o v er t wo years, determination w h e r e of required e v i d e n ce to be t a k en on c o m m i s s i on in a foreign c o u n t r y; an a c c o u nt g u a r a n t e ed by the D e f e n d a n t, w h e re the D e f e n d a n t 's liability d e p e n d ed u p on the contingency of the principals failing to p a y; a c l a im for interest against the D e f e n d a nt w h e re the D e f e n d a nt h ad n e v er a g r e ed to p ay a ny interest; an u n t a x ed bill of costs, the costs of transfer of a p r o p e r t y, w h e re transfer h ad n ot yet b e en p a s s e d; an uncertain c l a im for m o n ey alleged to h a ve b e en stolen" It is consideration of the a b o ve a nd parallel instances cited by the learned author that this C o u rt is of the v i ew that caution is a d v i s ed h e re w h e re the Petitioner relies on actual insolvency of the R e s p o n d e n t, for fear that after a d i v i d e nd h as b e en p a id it m i g ht v e ry well a p p e ar that insofar as the r e s p o n d e nt m i g ht h a ve b e en insolvent if the alleged d e b ts are t a k en into consideration, he m i g h t, on the other hand, very well be solvent if the Petitioner's alleged claim h ad b e en reduced by the a m o u nt w h i ch it receives as a dividend from the c o m p a ny in liquidation. T he C o u rt is w a ry therefore that w h en deciding whether it should exercise the discretion w h i ch it has to grant a final order, because as stated by M e s k in : Insolvency L aw 2 2 -4 "Notwithstanding that the creditor is able to establish all the elements of the case for sequestration, the C o u rt still has a discretion as to w h e t h er or not to grant sequestration order, w h e t h er provisional or final". In the instant matter w h e re the replying affidavits h a ve b e en w a i v ed the Court is left in an e v en m o re unenviable situation than w h e re it has to decide in an oft- d e n o u n c ed situation b e t w e en w h i ch of the t wo type writers to believe. In the less irksome of the t wo situations a b o ve it is better to err in favour of the R e s p o n d e n t. T h us it w o u ld be m o re justified to do so w h e re a w o r se situation than choosing w h i ch of the t wo type writers to believe, prevails. F or the a b o ve reasons the provisional sequestration order w as discharged w i th costs. J U D GE 26th January, 1 9 98 F or Applicant : Mr Fisher F or R e s p o n d e n t: Mr W e s s e ls