L I Ganes and Another v Telecom Namibia Limited

The appellants, husband and wife married in community of property, appealed against a final sequestration order of their joint estate. The first appellant was employed by the respondent, Telecom Namibia Ltd, as Manager: Procurement. During his employment he received substantial undisclosed payments from various suppliers and contractors (including Dresselhaus Scrap Metal CC, Global Telecom, EPS-related entities, and Temsa) who did business with the respondent. These payments were allegedly made to secure his support in their dealings with the respondent. The respondent alleged that these payments constituted bribes or secret commissions and rendered the appellants insolvent. After a provisional sequestration order, further evidence emerged through an interrogation under s 152 of the Insolvency Act, which the respondent introduced in a replying affidavit. The appellants challenged the authority to institute proceedings, sought to strike out the new matter in reply, and denied insolvency.

The appeal was dismissed with costs, and the final sequestration order against the appellants’ joint estate was upheld.

The case is a leading authority on the treatment of bribes and secret commissions received by employees in South African law, confirming that such payments are recoverable by the employer and are deemed to have been received on the employer’s behalf. It also clarifies procedural aspects of sequestration proceedings, including the discretion to allow new matter in replying affidavits under s 12(2) of the Insolvency Act and the distinction between authority to depose to an affidavit and authority to institute proceedings.