Gauteng High Court rules against body corporate in homeowner's R1.4 million levy dispute
A homeowner owed the body corporate R1.4 million.
Image: Freepik
A Johannesburg body corporate’s attempt to seize a homeowner’s property and have her estate sequestrated over unpaid levies has fallen flat.
The Gauteng High Court ruled that the move was legally flawed, misconceived, and an abuse of court process.
Judge L Windell also criticised the body corporate for jumping straight to final sequestration instead of following the mandatory two-stage process under the Insolvency Act
“The availability of existing execution remedies compels the conclusion that the application constitutes an abuse of the process of court and that no basis exists upon which even a provisional sequestration order could be granted,” Judge L Windell said.
Charlemagne’s Body Corporate went to the Gauteng High Court, Johannesburg, seeking the sequestration of Lee-Anne Patricia Drysdale’s estate, arguing she had failed to pay levies and related charges on her sectional title unit for years.
The body corporate said the debt had ballooned to more than R1.4 million, despite limited payments made over time, and asked the court to place Drysdale under final sequestration.
“Her explanation for non-payment, as set out in the pleadings, is that a dispute between the parties regarding the levies has persisted since at least 2011,” the Judge said.
The Judge also explained that Drysdale was ordered to pay levies, but the amount continued to be a matter of dispute.
The judgment dismissed the application in its entirety, with the court finding that the body corporate had ignored the strict statutory framework governing sequestration and had failed to show that such an extreme step was justified.
At the heart of the ruling was the body corporate’s failure to follow the two-stage process required by the Insolvency Act.
Instead of going through with court orders that the body corporate could execute the sale of Drysdale’s house, it asked for sequestration – a process the judge said was legally flawed.
Charlemagne already had a 2017 settlement agreement made an order of court acknowledging debt, and a 2019 judgment declaring the property specially executable with a reserve price set at R1.9 million.
Sequestration proceedings, by contrast, are not intended to function as an alternative debt-collection tool where execution remains available. The body corporate had not shown that execution was ineffective or that sequestration was necessary to protect creditors’ interests.
The court said the body corporate had also sidestepped safeguards designed to protect not only the debtor, but creditors and other affected parties as well.
The application was further undermined by basic omissions. The body corporate failed to disclose Drysdale’s marital status or whether a spouse existed, a requirement under the Act.
It also did not show that the papers had been properly served on the Master of the High Court, the South African Revenue Service or any employees, nor was there an affidavit explaining how service was effected.
While the debt was substantial, the papers were silent on whether the property was bonded, how much was owed to any bondholder, and where such a creditor would rank. Without this information, the court said, it was impossible to determine whether any proceeds would be left for concurrent creditors after secured claims were settled.
The court also took issue with the age of the application.
Although it was launched in October 2022, it was only argued years later, with no explanation for the delay and no updated financial information placed before the court, leaving it unable to assess whether sequestration would be to the advantage of creditors.
The court ultimately dismissed the application with costs.
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