M and Another v Murray and Others (251/2019) [2020] ZASCA 86; 2020 (6) SA 55 (SCA) (9 July 2020)

M and Another v Murray and Others (251/2019) [2020] ZASCA 86; 2020 (6) SA 55 (SCA) (9 July 2020)

The Supreme Court of Appeal held that section 37B of the Pensions Fund Act does not protect pension benefits once paid out to the beneficiary prior to sequestration. The money, once received, becomes part of the beneficiary's ordinary estate and is susceptible to attachment by creditors. The court found that the payments made by Mr M[...] to Mrs M[...] and Iprolog (Pty) Ltd were collusive transactions designed to prejudice creditors, particularly Lowveld, and to prefer Mrs M[...] above other creditors. The divorce was found to be a sham, and the arrangements surrounding the disposition of assets were orchestrated to defeat the legitimate claims of creditors. The court clarified that while...

Citation
[2020] ZASCA 86
Parties
Appellant: V[...] I[...] M[...]; Appellant: Iprolog (Pty) Ltd; Respondent: Cloete Murray N.O.; Respondent: Mabatho Shirley Motimele N.O.; Respondent: Jerry Sekete Koka N.O.
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
9 July 2020
Case Number
251/2019
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal dismissed with costs, except as clarified in the substituted order regarding the amounts to be repaid.
Judges
Ponnan, Dambuza, Van der Merwe, Makgoka, Mbatha
Legal Topics
Pension Fund Protection, Sequestration, Collusive Disposition, Insolvency Act Section 31, Disposition in Compliance With Court Order
Banking and Finance Civil Procedure Pension Fund Protection Sequestration Collusive Disposition Insolvency Act Section 31 Disposition in Compliance With Court Order

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Parties

V[...] I[...] M[...]

Appellant

Iprolog (Pty) Ltd

Appellant

Cloete Murray N.O.

Respondent

Mabatho Shirley Motimele N.O.

Respondent

Jerry Sekete Koka N.O.

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether a pension benefit paid out to the insolvent before sequestration is protected from attachment under section 37B of the Pensions Fund Act.
  2. 2 Whether the payments made by the insolvent to his wife and to Iprolog (Pty) Ltd should be set aside under section 31 of the Insolvency Act due to collusion.

Ratio Decidendi

The Supreme Court of Appeal held that section 37B of the Pensions Fund Act does not protect pension benefits once paid out to the beneficiary prior to sequestration. The money, once received, becomes part of the beneficiary's ordinary estate and is susceptible to attachment by creditors. The court found that the payments made by Mr M[...] to Mrs M[...] and Iprolog (Pty) Ltd were collusive transactions designed to prejudice creditors, particularly Lowveld, and to prefer Mrs M[...] above other creditors. The divorce was found to be a sham, and the arrangements surrounding the disposition of assets were orchestrated to defeat the legitimate claims of creditors. The court clarified that while...

Court Disposition

Appeal dismissed with costs, except as clarified in the substituted order regarding the amounts to be repaid.

Orders

  • The appeal is dismissed with costs, such costs to be paid by the appellants jointly and severally, the one paying the other to be absolved.
  • Paragraph 1 of the order of the court a quo is substituted: The payments made by the insolvent, Mr P[...] A[...] L[...] M[...], to or for the benefit of the first respondent, V[...] I[...] M[...], in the sum of R1 023 867 and the second respondent, Iprolog (Pty) Ltd, in the sum of R3 500 000, are set aside and the...