KADHANI V HUNYANI PAPER AND PACKAGING LTD & ANOR 1998 (2) ZLR 261 (S)

Flynote

Insolvency — sequestration — application — whether sequestration to advantage of creditors — what must be shown — whether any onus on debtor — c counterclaim by debtor against creditor — when may be regarded as an asset

Headnote

Where sequestration is granted, the court merely has to be satisfied that there is reason to believe that it would be to the advantage of creditors. It is probably incorrect to say that when an act of insolvency has occurred, the onus is on the debtor to show that sequestration is not in the interests of creditors. Once it has been established, as here, that creditors have taken judgments in large amounts and that other sums are owed, there must certainly be reason to believe that it would be in the interests of creditors generally that there be an orderly distribution of assets.

A counterclaim by a debtor against a creditor, his former employer, for salary and wages is not a debt owed by the creditor to the debtor. It is merely a spes. In casu, the counterclaim was made in circumstances which indicated that it had been lodged merely to frustrate the sequestration proceedings.