THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable
Case No: 251/2019
In the matter between:
VANESSA INGRID MOREAU

FIRST APPELLANT
IPROLOG (PTY) LTD                                               SECOND APPELLANT

and

CLOETE MURRAY N.O.                                               FIRST RESPONDENT
MABATHO SHIRLEY MOTIMELE N.O.          SECOND RESPONDENT
JERRY SEKETE KOKA N.O.                                  THIRD RESPONDENT
Neutral citation: Moreau and Another v Murray and Others (251/2019)
[2020] ZASCA 86 (9 July 2020)
Coram:
PONNAN, DAMBUZA, VAN DER MERWE, MAKGOKA
AND MBATHA JJA
Heard:

18 May 2020

Delivered: This judgment was handed down electronically by circulation to the
parties’ representatives by email, and by publication on the Supreme Court of
Appeal website and release to SAFLII. The time and date for hand down is
deemed to be 10h00 on the 9th day of July 2020.
Summary: Pensions – protection of s 37B of the Pensions Fund Act 24 of 1956
– whether it operates if pension benefit paid before sequestration.
Insolvency – s 31 of the Insolvency Act 24 of 1936 – whether collusion
established.

________________________________________________________________
ORDER
________________________________________________________________
On appeal from: Gauteng Division of the High Court, Pretoria (Holland-Müter
AJ sitting as court of first instance).
1    Save to the extent reflected in the paragraph below, 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.
2    Paragraph 1 of the order of the court a quo is substituted with the following:
‘1   The payments made by the insolvent, Mr Pierrie Andre Leonard Moreau, to
or for the benefit respectively of the first respondent, Vanessa Ingrid Moreau, in
the sum R1 023 867 and the second respondent, Iprolog (Pty) Ltd, in the sum of
R3 500 000, are set aside and the respondents are ordered to repay those monies
forthwith to the applicants.
________________________________________________________________
JUDGMENT
________________________________________________________________
Makgoka JA (Ponnan, Dambuza, Van der Merwe and Mbatha JJA
concurring):
[1] The primary issue in this appeal is whether a pension benefit paid out to
the insolvent, Mr Pierrie Andre Leonard Moreau (Mr Moreau) before his estate
was sequestrated, enjoyed the protection provided in s 37B of the Pensions Fund
Act 24 of 1956 (the Act), which protects pension benefits against attachment by
a trustee of an insolvent estate, subject to certain exceptions. If this is answered
in the negative, a secondary issue arises, namely whether that pension money,
which he disposed of to his then wife, the first appellant, Ms Vanessa Ingrid

Moureau (Mrs Moreau) and the second appellant, Iprolog (Pty) Ltd (Iprolog)
should be set aside in terms of the relevant provisions of the Insolvency Act 24
of 1936 (the Insolvency Act).
[2] Mr Moreau’s estate was finally sequestrated on 1 August 2011. Some two
years before the sequestration, he received a pension payout, which, as already
stated, he disposed of to the appellants.  Iprolog purchased immovable properties
with that money.  After the sequestration, the respondents, the joint trustees of his
insolvent estate, obtained an order in the court a quo, the Gauteng Division of the
High Court, Pretoria, setting aside the dispositions. That court also granted an
order interdicting the appellants from alienating an immovable property indirectly
purchased with the pension money.  Mrs Moreau and Iprolog appeal against those
orders with the leave of this court.
[3] Mr Moreau and Mrs Moreau had been married to each other out of
community of property since 1980. Mr Moreau was a judgment debtor of
Lowveld Cooperative Investments (Lowveld). Its action against Mr Moreau to
recoup the debt failed in February 2006 before the trial court. However, this court
granted Lowveld leave to appeal to the full court. While the appeal was pending,
Iprolog was registered on 6 April 2009, and on 30 April 2009 Mr Moreau became
its sole director. On 5 May 2009, Mr Moreau and Mrs Moreau became trustees
of the Les Baux Family Trust (the Trust), which in due course became the sole
shareholder of Iprolog.
[4] On 18 May 2009 the full court delivered its judgment, and overturned the
order of the trial court dismissing Lowveld’s claim. It ordered Mr Moreau to pay
Lowveld the sum of R726 638.35, interest and costs. Mr Moreau immediately
applied to this court for special leave to appeal. On 31 May 2009 Mr Moreau
requested payment of his provident fund benefit from Mindkey Corporate

Selection Retirement Fund. On 15 June 2009 Mr Moreau received R4 639 000
from the provident fund, which was paid into his banking account.
On 23 June 2009, he transferred R3 500 000 of that amount into an attorney’s
trust account for the credit of Iprolog. This money was used for the purchase of
two farms in Kwazulu-Natal by Iprolog. The balance of R1 023 867 was paid
directly to Mrs Moreau.
[5] The appellants explained the two payments as follows. It was alleged that
Mr and Mrs Moreau had been experiencing marital problems for a number of
years, and that in April 2009, Mrs Moreau finally decided that she wanted a
divorce. Therefore, the pension pay-out was requested specifically to cater for the
proprietary consequences of the marriage at divorce. In particular, it was stated
that Mr Moreau owed Mrs Moreau the sum of R4 746 080.14 made up as follows:
in terms of the parties’ antenuptial contract registered on 6 May 1980, Mr Moreau
was obliged to purchase a property for Mrs Moreau for R100 000. According to
Mr Moreau the equivalent value of that sum in 2009 was R3 722 213.14. The
payment of R3 500 000 referred to above, was meant to cater for this. Mr Moreau
explained that he did not wish to pay this amount to Mrs Moreau until the divorce
was finalised. The balance of R1 023 867 was said to represent a loan amount
comprising unpaid wages when Mrs Moreau worked for Mr Moreau as a
bookkeeper in his business as a financial advisor. The explanation was that during
her employment, he did not pay her an actual salary but a loan account was
created and the amounts owing were credited to such loan account.
[6] It was further alleged that the parties ‘separated’ on 19 July 2009.
On 21 July 2009 Mr Moreau’s application for leave to appeal against the full
court’s order was dismissed by this court. Two days thereafter, on 23 July 2009,
Mrs Moreau issued summons against Mr Moreau, in which she claimed only a
decree of divorce, and no patrimonial relief or maintenance. On 19 August 2009

they signed a settlement agreement in terms of which Mr Moreau undertook to
pay maintenance of R100 000 per month to Mrs Moreau. In addition, Mr Moreau
undertook to pay for various expenses on behalf of Mrs Moreau. It was also
recorded that in terms of the parties’ antenuptial contract, Mr Moreau was obliged
to transfer certain assets, including an immovable property, to Mrs Moreau. In
clause 4.3 of the Settlement Agreement it was recorded that:
‘In settlement of [Mrs Moreau’s] claims . . . and in settlement of the sum of R1 023 867 due
and payable in terms of a loan account held with Moreau and Associates as at
28 February 2008, [Mr Moreau] has liquidated his pension fund and after all statutory
deductions and payment of all taxes are met, he has agreed to pay over the balance of the
proceeds to [Mrs Moreau].
Lastly, the settlement agreement provided that Mrs Moreau would retain
ownership of two farms in Mpumalanga.
[7] The divorce action was finalised on 21 August 2009, when an order was
granted for a decree of divorce incorporating the settlement agreement referred
to above.  On 2 November 2009 Mr Moreau resigned as a director of Iprolog, and
Mrs Moreau replaced him. In May 2010 Lowveld commenced proceedings for
the sequestration of Mr Moreau’s estate. As of August 2010, on Mr Moreau’s
own version, the unsatisfied judgment debt, interest and costs due to Lowveld
amounted to R2 027 587.74.
[8] During October and November 2010 the farms purchased by Iprolog, as
fully set out in para 3 above, were sold and a portion of the net proceeds thereof,
R2 160 000, was used by Iprolog to purchase an immovable property in Edenvale,
Gauteng Province (the Edenvale property) for cash, in December 2010. In
March 2011 Mr Moreau moved into this property. A month later, April 2011,
Mrs Moreau joined him on the property. As at the time when the application was
finalised in the court a quo, the parties lived together on this property. Mr Moreau
explained that this was a purely convenient arrangement because of

Mrs Moreau’s alleged ill-health. According to him, he felt morally obliged to care
for her, though they lived in separate houses on the property. It is common cause
that they continued to occupy this property together, at least until the judgment
was handed down in the court a quo.
[9] On 6 June 2011 Mr Moreau’s estate was provisionally sequestrated, and
the final order of sequestration was granted on 1 August 2011. The respondents
were appointed joint trustees of Mr Moreau’s estate, and in terms of s 20(1)(a) of
the Insolvency Act his estate vested in the respondents as trustees. During
June 2012 Mr Moreau and Mrs Moreau were interrogated before a magistrate in
terms of ss 64 and 65 of the Insolvency Act. Based on the evidence during the
interrogation, the respondents on 1 March 2013 launched the application to which
this appeal relates, to have the payments made by Mr Moreau to Mrs Moreau and
to Iprolog, set aside.
[10] The respondents alleged that there was collusion between Mr and Mrs
Moreau to strip the former of all his assets and income to avoid paying his debt
to Lowveld. In particular, the respondents asserted that: Iprolog was ‘the alter ego
and corporate veil’ of Mrs Moreau and Mr Moreau (paras 3.3 and 10.4);
(paras 2.4 and 6.11.3); by making the Trust the sole shareholder of Iprolog they
sought to distance themselves from the company (para 6.2 ) and ‘create a further
trench which had to be crossed by any creditor seeking to gain access’ to Mr
Moreau’s pension monies (paras 6.2 and 6.11.4); their ‘separation’ occurred only
after the Full Court upheld Lowveld’s appeal (para 6.4); their  divorce was
‘merely a sham’ and a ‘window-dressing’ as it was instituted  a mere two days
after the application for leave to appeal had been dismissed by this court on 21
July 2009 (para 6.5).

[11] In the appellants’ answering affidavit, deposed to by Mr Moreau, it was
averred that the payments which the respondents sought to set aside were pension
monies and  that such monies, including the assets purchased with such monies,
were exempt from attachment by the respondents in terms of s 37B of the Act.
The appellants denied that there was any disposition of money from Mr Moreau
to Iprolog. Instead, they said, Mrs Moreau loaned an amount of R5 372 760 to
the Trust (on an unnamed date in 2009). According to the appellants, on
26 August 2009, the Trust loaned the same amount to Iprolog. This, according to
the appellants, was proof that no disposition was made by Mr Moreau to Iprolog,
and that Mrs Moreau made no loans in 2009 to Iprolog. The loan, they stressed,
was made by Mrs Moreau to the Trust, which in turn, loaned the same amount to
Iprolog. The evidence before the court a quo included the oral evidence of
Mr Moreau in terms of s 32(2) of the Insolvency Act, adduced at the instance of
the appellants pursuant to rule 6(5)(g) of the Uniform Rules of Court.
[12] The matter came before Holland-Müter AJ, who considered the provisions
of s 37B and reasoned that because Mr Moreau had received his pension payout
before his estate was sequestrated, the money no longer enjoyed the protection
provided by s 37B. The learned judge held that ‘[w]hen receiving the payment,
the monies became commixtio with the estate of the now insolvent (although he
was not yet insolvent then)’. The learned judge further found that there was
collusion between Mr and Mrs Moreau to the detriment of Mr Moreau’s creditors.
The learned judge considered, among others, the fact that Mrs Moreau and
Mr Moreau still resided together on the same property as a ‘further indication of
the collusion’ between them to prejudice the former’s creditors. Accordingly, the
court a quo had no difficulty in setting aside the dispositions made to Mrs Moreau.
The court a quo concluded that the dispositions fell within the ambit of s 31 of
the Insolvency Act. Consequently, it issued an order:

‘1. The payment made by Pierre Andre Leonard Moreau (the insolvent) in the amount of
R4 639 000 towards the first respondent [Mrs Moreau] on or about 15 June 2009, alternatively
the payment of the amount of R3 500 000 towards the second respondent [Iprolog] by or on
behalf of the insolvent is set aside the payment of the difference between the amount of
R3 500 000 and the amount of R4 639 000 made by the insolvent to Mrs Moreau and ordering
that said amounts shall be repaid forthwith to the applicants [the respondents].
2. The sale of the immovable property situated at 89 Main Road, Edenvale, Gauteng and
currently occupied by the first respondent and the insolvent is prohibited save in the event of
same being sold at a market related price with the prior knowledge of the sale thereof to the
applicants in which event the nett proceeds of the such sale shall be paid into trust at the
applicants, pending the finalization of the repayment of the amounts referred to in par 1 above.’
[13] In this court, as in the court a quo, it was submitted on behalf of the
appellants that the pension pay-out to Mr Moreau was exempt from attachment
in terms s 37B, and that, in any event, the payments to Mrs Moreau could not be
set aside as they were made in compliance with a court order. With regard to the
Insolvency Act, it was submitted that neither of the provisions of the relevant
sections had been established to justify setting aside the payments. I deal with
these in turn.
[14] Section 37B reads as follows:
‘Disposition of pension benefits upon insolvency
If the estate of any person entitled to a benefit payable in terms of the rules of a registered fund
(including an annuity purchased by the said fund from an insurer for that person) is sequestrated
or surrendered, such benefit or any part thereof which became payable after the commencement
of the Financial Institutions Amendment Act, 1976 (Act No. 101 of 1976), shall. . . .not be
deemed to form part of the assets in the insolvent estate of that person and may not in any way
be attached or appropriated by the trustee in his insolvent estate or by his creditors,
notwithstanding anything to the contrary in any law relating to insolvency.’

[15]  ‘Benefit’ is defined in s 1 of the Act as ‘any amount payable to a member
or beneficiary in terms of the rules of that fund’.1 The reference to ‘payable’,
instead of ‘paid’ clearly envisages a sum to which a member of a pension fund or
a beneficiary is entitled to receive, but has not yet received. So construed, the
amount remains a ‘benefit’ to the extent it has not yet been paid to the member or
beneficiary. Once the benefit is paid to him or her, the beneficiary ceases to be a
‘member’ of the pension fund according to the rules of the fund,2 and the money
ceases to be a ‘benefit’. It loses its character once in the hands of the beneficiary
and ceases to be a benefit. The beneficiary may do as they please with it. Such a
beneficiary can thus hardly complain if creditors lay their hands on the money to
satisfy outstanding debts.
[16] Thus, all that s 37B entails is that, while in the hands of a pension fund, the
insolvent’s pension interest cannot be attached by his or her trustee on the basis
that it forms part of the insolvent’s assets. It protects only the pension benefit of
a person whose estate is sequestrated, which Mr Moreau’s estate was not when
he received his pension pay-out. The effect of a sequestration order is to divest
an insolvent of his or her estate and to vest it in a trustee. Section 37B seeks to
establish an exception to the provisions of s 20(1)(a) of the Insolvency Act. When
Mr Moreau received the payment, his estate had not as yet been sequestrated.
There was thus no insolvent estate or trustees to speak of. Section 37B therefore
could not find application when the payment was effected. For that reason,
Mr Moreau could not bring himself within the exception, and payment could only
have been made into his ‘regular estate’. Having then disposed of those monies
in the manner in which he did, renders them susceptible to attack. This is fortified
by s 23(7) of the Insolvency Act which provides that during the sequestration,

1 ‘Benefit’ was inserted to the Act as a defined term in 2007 by s 1(c) of Act 11 of 2007.
2 Compare Absa Bank Ltd v Burmeister and Others 2004 (5) SA 595 (SCA); [2005] 3 All SA 409
(SCA) para 9 where the court considered s 37D(1)(b) of the Act.

‘the insolvent may for his own benefit recover any pension to which he may be
entitled. . .’.
[17] It follows that if the pension benefit is received before a beneficiary’s estate
is sequestrated, s 37B does not find application. This construction of s 37B finds
support in cases where similarly worded statutory provisions have received
consideration.
[18]  Jones & Co. v Coventry [1909] 2 KB 1029 concerned s 141 of the
Army Act of 1881, which prohibited an assignment or charge on a pension
payable to any officer or soldier. The issue was whether a garnishee order could
attach monies in a bank account into which a soldier’s pension money was paid.
Darling J held that the money did not come within the provisions of s 141. He
explained:
‘Pension, when it has been paid to the person entitled to receive it, ceases any longer to be
pension; it has lost its character of pension, just like dividends which, after payment, lose the
character of dividends. It becomes part of the pensioner’s ordinary money. . . .’
[19] In Gibson v Howard 1918 TPD 185, s 37 of the Miner’s Phthisis Act 44 of
19163 was considered. Section 37 provided:
‘No amount payable as a benefit under this Act or the prior law shall be assignable or
transferable or be capable of being hypothecated or pledged, nor shall any such amount be
liable to be attached or subjected to any form of execution under a judgment or order of
any court of law.’
[20] In that matter, the appellant, who was a judgment debtor of the respondent,
received an amount as compensation from the Miner’s Phthisis Board under the

3 This was in response to a pulmonary tuberculosis called phthisis which affected mine workers in
the Witwatersrand area, Johannesburg, in the early 1900s.

Phthisis Act. The respondent obtained a garnishee order on the bank account into
which the money was deposited. The applicant contended that in terms of s 37
the amount was not attachable or subject to any form of execution, as the object
of the Act was to benefit a person suffering from phthisis, and to prevent creditors
from attaching any compensation paid to him under the Act.
[21] The court rejected this interpretation and held:
‘Section 37 says “no amount payable” etcetera. There is nothing in the Act to justify us in
saying that the Legislature meant that an amount actually paid over shall not be attached. All
the Legislature means is that if money is awarded to a miner’s phthisis patient and still in the
hands of the Board it cannot be assigned, ceded or attached so long as the Board controls
it. When the money is paid over to the patient and is mixed with his ordinary money it has no
longer any different character and therefore according to our common law it can be attached.’
[22] The reasoning in Gibson was followed in Foit v FirstRand Bank Bpk
2002 (5) SA 148 (T), where ss 2(1) and 3 of the General Pensions Act 29 of 1979
(the Pensions Act) were in issue. Section 2(1) provides:
‘No annuity or benefit or right in respect of an annuity or benefit payable under a pension law
shall be capable of being assigned or transferred or otherwise ceded or of being pledged or
hypothecated or, save as is provided in section 11(2) of the Maintenance Act, 1963 (Act No.
23 of 1963), be liable to be attached or subjected to any form of execution under a judgment or
order of a court of law.’
In turn, s 3 provides that ‘[t]he annuity received under any pension law by any
person whose estate is sequestrated, shall not form part of the assets in his
insolvent estate’.
[23] As in this case, it was contended in Foit that the relevant sections had to be
interpreted to mean that ‘pension benefits’ did not form part of the assets in the
insolvent estate of the applicant and her husband. D Basson J was unpersuaded,
and pointed out (at 153H) that the meaning of s 3 was that a ‘benefit received
under any pension law’ indicated a benefit, ie an amount of money received in

terms of a pensions law, in terms of which the beneficiary had a right of action
against the pension fund to receive the money. When the amount was paid out by
the pension fund, the benefit was ‘received’ as provided in s 3 of the Act.
Accordingly, the learned Judge held that the pension benefit paid out and received
on 25 January 2000 became part of the assets of the estate of the applicant and
her husband.
[24] Section 37A(1), which was raised in argument, does not assist the
appellants, either. It protects any benefit or right to any benefit provided for in
the rules of a registered pension fund payable to a member of such fund, against
any reduction, transfer, cession, pledge, hypothecation, attachment or judicial
execution.4 I have already pointed to the definition of ‘benefit’ above. With regard
to s 37A(1) the key is the definition of ‘member’ in s 1 of the Act, which is defined
in relation to two categories of pension fund organisations.5 In the first category,
it means ‘any member or former member of the association by which such fund
has been established’, while in the second category,6 ‘member’ means ‘a person

4 In its redacted form, s 37A(1) reads as follows:
‘(1) Save to the extent permitted by this Act, the Income Tax Act, 1962 (Act 58 of 1962), and the
Maintenance Act, 1998, no benefit provided for in the rules of a registered fund . . . be capable of being
reduced, transferred or otherwise ceded, or of being pledged or hypothecated, or be liable to be attached
or subjected to any form of execution under a judgment or order of a court of law, . . . and in the event
of the member or beneficiary concerned attempting to [do so] the fund concerned may withhold or
suspend payment thereof. . . .’
5 Pension fund organisation in turn is defined as follows:
‘(a) [a]ny association of persons established with the object of providing annuities or lump sum
payments for members or former members of such association upon their reaching retirement dates, or
for the dependants of such members or former members upon the death of such members; or
……..
(c) any association of persons or business carried on under a scheme or arrangement established with
the object of receiving, administering, investing and paying benefits that became payable in terms of
the employment of a member on behalf of beneficiaries, payable on the death of more than one member
of one or more pension funds, and includes any such association or business which in addition to
carrying on business in connection with any of the objects specified in paragraph (a), (b) or (c) also
carries on business in connection with any of the objects for which a friendly society may be established,
as specified in section 2 of the Friendly Societies Act, 1956, or which is or may become liable for the
payment of any benefits provided for in its rules, whether or not it continues to admit, or collect
contributions from or on behalf, of members.

6 (b) any business carried on under a scheme or arrangement established with the object of providing
annuities or lump sum payments for persons who belong or belonged to the class of persons for whose

who belongs or belonged to a class of persons for whose benefit that fund has
been established’. Significantly, in respect of both categories, the definition
excludes ‘any person who has received all the benefits which may be due to that
person from the fund and whose membership has thereafter been terminated in
accordance with the rules of the fund’ (Emphasis added.)
Although s 37B refers to ‘any person entitled to a benefit’ as opposed to a
‘member’, the difference in the terminology does not appear to be of any
significance. Both must be taken to mean a beneficiary of a pension benefit. Thus
the definition of ‘member’ applies with equal force to any construction of s 37B.
It follows that Mr Moreau is excluded from protection under s 37B of the Act by
this definition, as he had ‘received all the benefits’ and his membership of the
provident fund had been terminated thereby.
[25] To conclude on this aspect, I am constrained to comment on the appellants’
reliance on certain remarks made by Rogers J in respect of the protection
provisions of s 37A(1) in Van Heerden and Another v NDPP and Another [2015]
ZAWCHC 96. The learned Judge remarked that since these were meant for the
protection of pension fund members and their dependants, ‘it is legitimate to ask
what the point would be of shielding from execution a member’s right to receive
payment of a benefit but not the benefit once received’. Later (at para 45) the
learned Judge remarked that ‘[t]he restrictive interpretation of “benefit” seems to
render the protection afforded by the section largely hollow’. In this case, the
appellants placed strong reliance on these remarks for their submission that the
protection of s 37B extends to the pension benefit after it is paid out.
[26] These remarks should be seen in their proper context. First, they are not an
authoritative pronouncement on the question whether the provisions of s 37A(1)

benefit that scheme or arrangement has been established, when they reach their retirement dates or for
dependants of such persons upon the death of those persons.’

extends beyond payment of the pension benefit, as that issue did not directly arise
in that case, and did not need to be decided – a fact acknowledged by the learned
Judge (at para 42). Second, the learned Judge acknowledged (at para 41) the
difficulties which would arise if one construed the word ‘benefit’ in s 37A(1) as
meaning the money paid to the member or dependant as distinct from such
person’s right to receive payment thereof at a future date. These included the fact
that a beneficiary could possibly be subject to the prohibition of s 37A(1) and be
precluded from freely dealing with the money in that he would not be permitted
to cede, pledge, hypothecate or transfer it.
[27] In Van Aartsen v Van Aartsen 2006 (4) SA 131 (T) para 23, De Vos J
remarked obiter in relation to s 37A(1) that ‘it could also be argued that once
[the beneficiary] had received his pension payout, it was no longer a pension
benefit as intended in the Act, but rather a sum of money, that is, a movable thing
and not a legal right or claim’. It was suggested in Van Heerden (at paras 38 and
42) that Foit and Van Aartse were wrongly decided. The correctness of those
decisions was endorsed by this court in Sentinel Retirement Fund and Another v
Masoanganye and Others [2018] ZASCA 126 para 16. The appellants’ reliance
on Van Heerden is thus misplaced.
[28] I turn now to the provisions of the Insolvency Act with regard to the setting
aside of dispositions. This may be done in terms of either of s 26 (as dispositions

without value),7 s 29 (as voidable preferences)8 or s 31 (as collusive dealings
before sequestration). The court a quo, correctly in my view, identified s 31 to be
the applicable section on the facts of this case. Section 31 reads as follows:
‘Collusive dealings before sequestration
(1) After the sequestration of a debtor’s estate the court may set aside any transaction entered
into by the debtor before sequestration, whereby he, in collusion with another person, disposed
of property belonging to him in a manner which had the effect of prejudicing his creditors or
of preferring one of his creditors above another.
(2) Any person who was a party to such collusive disposition shall be liable to make good any
loss caused to the insolvent’s estate in question and shall pay for the benefit of the estate, by
way of penalty, such sum as the court may adjudge, not exceeding the amount by which he
would have benefitted by such dealing if it had not been set aside; and if he is a creditor he
shall also forfeit his claim against the estate.
(3) Such compensation and penalty may be recovered in any action to set aside the transaction
in question.’
In terms of s 32(1)(a) proceedings for the recovery of compensation or penalty
under s 31 may be taken by a trustee.

7 ‘(1) Every disposition of property not made for value may be set aside by the court if such disposition
was made by an insolvent –
(a) more than two years before the sequestration of his estate, and it is proved that, immediately after
the disposition was made, the liabilities of the insolvent exceeded his assets.
(b) within two years of the sequestration of his estate, and the person claiming under or benefited by
the disposition is unable to prove that, immediately after the disposition was made, the assets of the
insolvent exceeded his liabilities;
Provided that if it is proved that the liabilities of the insolvent at any time after the making of the
disposition exceeded his assets by less than the value of the property disposed of, it may be set aside
only to the extent of such excess. . . .’
8 ‘(1) Every disposition of his property made by a debtor not more than six months before the
sequestration of his estate or, if he is deceased and his estate is insolvent, before his death, which has
had the effect of preferring one of this creditors above another, may be set aside by the Court if
immediately after the making of such disposition the liabilities of the debtor exceeded the value of his
assets, unless the person in whose favour the disposition was made proves that the disposition was made
in the ordinary course of business and that it was not intended thereby to prefer one creditor above
another. . . .’

[29] It was submitted on behalf of the appellants that absent an application to
impugn the decree of divorce, the payments made in terms thereof cannot be set
aside. A similar contention was correctly rejected in Sackstein en Venter NNO v
Greyling 1990 (2) SA 323 (O) at 327D-E. The appellants also relied on the
exclusionary clause in the definition of ‘disposition’ in s 2 of the Insolvency Act
for the contention that the payments cannot be set aside. The definition of
‘disposition’ in s 2 is as follows:
‘Disposition means any transfer or abandonment of rights to property and includes a sale, lease,
mortgage, pledge, delivery, payment, release, compromise, donation or any contract therefor,
but does not include disposition in compliance with an order of the court; and “dispose” has a
corresponding meaning.’ (Emphasis added.)
[30]  It brooks no debate that the payments made by Mr Moreau to Mrs Moreau
constitute ‘dispositions’ within the meaning of the Insolvency Act. As I have
already stated, there were two of those. The first was for R3 500 000 into an
attorney’s trust account for the credit of Iprolog on 23 June 2009 and used towards
the purchase of property in Iprolog’s name. The second payment was made
shortly after the divorce decree was finalised. It was submitted that despite the
payment date for the R3 500 000 being June 2009, the money only accrued to
Mrs Moreau on 26 August 2009, after the decree of divorce was granted and the
property had been transferred into Iprolog’s name. Thus, it was said that Mrs
Moreau was only ‘paid’ after the divorce order was granted, and ‘in terms’
thereof.
[31] This submission has merely to be stated, to be rejected. It was contrived to
bring the disposition within the ambit of the exclusionary provisions of the
definition of ‘disposition’ in s 2 of the Insolvency Act referred to above. As I
have said, the disposition was to Iprolog and occurred on 23 June 2009 when the
money was paid into the attorney’s trust account. That Iprolog was only free to
use it later is irrelevant. The exclusionary provisions of s 2 did not apply to this

payment, and it was accordingly susceptible to being set aside in terms of one or
other of the three sections of the Insolvency Act referred to above. The payment
of R1 023 867 stands on a different footing, as it was made after the divorce
decree was granted on 21 August 2009, thus notionally protected by the
exclusionary provisions of s 2. However, those provisions do not serve as an
absolute bar.

[32] In Dabelstein and Others v Lane and Fey NNO 2001 (1) SA 1222 (SCA)
(at para 7) this court recognised that in certain instances, a disposition made in
terms of a court order may be set aside. It was pointed out that where that is sought
to be done, it is not sufficient merely to bring the disposition within the ambit of
one or more of the relevant provisions of the Insolvency Act, as was done
in Sackstein. Hefer ADCJ explained, with reference to Swadif (Pty) Ltd v Dyké
NO 1978 (1) SA 928 (A); [1978] 2 All SA 121 (A) at 938B-939H), that under
those circumstances, additional allegations have to be made in order to nullify the
effect of the exclusion in s 2. If either fraud, collusion or any other reprehensible
conduct is relied upon, it must be alleged.
[33] In this case, the respondents’ founding affidavit is replete with allegations
of collusion between Mr and Mrs Moreau. I have referred to some of those
allegations in para 10 above. In fact, the entire premise of the respondents’ case
rests on the existence of such collusion. In my view, the respondents’ assertions
are credible. From the papers filed in the court a quo and the record of the oral
evidence, it is clear that there was a carefully designed plan by Mr Moreau to
keep the pension money from his creditor, Lowveld. Mrs Moreau and Iprolog
were very much part of that plan.
[34] This commenced in April 2009 when Iprolog was incorporated. Both
served as directors of Iprolog, albeit at different times. This was followed by both

becoming trustees of the Trust in May 2009. The Trust became the sole
shareholder of Iprolog. After payment of R3 500 000 was made into the
attorney’s trust account, the money was used by Iprolog to acquire two farms in
Kwa-Zulu Natal. When those farms were sold, part of the profit was used to
enable Iprolog to purchase the Edenvale property, which Mr and Mrs Moreau
continue to jointly occupy.
[35] Furthermore, the divorce between the parties was undoubtedly a sham.
Their continued co-habitation at the Edenvale property serves, among others, as
proof of that. Their explanation for this is unconvincing. Mrs Moreau is the one
who instituted the divorce, significantly, a mere two days after Mr Moreau’s
application for leave to appeal was dismissed by this court. She took an active
part in the settlement agreement, which resulted in her receiving virtually all of
Mr Moreau’s assets and money. Given all these, the conclusion is inescapable
that there was collusion between Mr Moreau and Mrs Moreau in respect of the
disposition of the former’s pension money. Mr Moreau’s receipt – and almost
immediate disposal - of his pension in the manner described herein, had the effect
of his liabilities exceeding his assets.
[36] In sum, I find that neither of the protective provisions in ss 37B or 37A of
the Act apply to Mr Moreau’s pension once paid to him. The dispositions by him
became susceptible to being set aside pursuant to the provisions of s 31 of the
Insolvency Act, which, in my view, have been met: Mr Moreau made a
disposition of his money to Mrs Moreau in collusion with the latter, which had
the effect of prejudicing Mr Moreau’s creditor (Lowveld). The prejudice is
self-evident. Iprolog was not a creditor of Mr Moreau and even if one accepts for
present purposes the appellants’ contention that Mrs Moreau was also
Mr Moreau’s creditor, the disposition had the effect of preferring her above
Lowveld.

[37] The dispositions were correctly set aside by the court a quo. The appeal
falls to fail. The learned judge set aside the payment of the whole amount of
R4 639 000 to Mrs Moreau, alternatively the R3 500 000 to Iprolog, further
alternatively, the difference between the R4 639 000 and R3 500 000 paid to
Mrs Moreau. This needs to be clarified. Both the main and alternative orders
cannot, as framed by the learned Judge, stand. It is clear that R3 500 000 was paid
on 23 June 2009 into the trust account of Venn Nemeth & Hart Attorneys, which
was then transferred to Iprolog, Mrs Moreau retained the balance of R1 023 867,
which became available to her on or about 21 August 2009.
[38] In the result the following order is made:
1    Save to the extent reflected in the paragraph below, the appeal is dismissed
with costs, such costs to be paid by the appellants jointly and severally, the one
paying the others to be absolved;
2    Paragraph 1 of the order of the court a quo is substituted with the following:
‘1   The payments made by the insolvent, Mr Pierrie Andre Leonard Moreau, to
or for the benefit respectively of the first respondent, Vanessa Ingrid Moreau, in
the sum R1 023 867 and the second respondent, Iprolog (Pty) Ltd, in the sum of
R3 500 000, are set aside and the respondents are ordered to repay those monies
forthwith to the applicants.

____________________
T M Makgoka
Judge of Appeal

APPEARANCES:
For Appellants:
J Marks

c/o June Stacey Mark Attorneys, Johannesburg

Claude Reid Attorneys, Bloemfontein

For Respondents:
T A L L Potgieter SC

Instructed by:

Pieter Swanepoel Attorneys, Mbombela

McIntyre Van der Post, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY: JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM:
The Registrar, Supreme Court of Appeal
DATE:
09 July 2020
STATUS:
Immediate
Please note that the media summary is for the benefit of the media and does not form part of the
judgment of the Supreme Court of Appeal.

Moreau and Another v Murray and Others (251/2019) [2020] ZASCA 86 (9 July 2020)

Today, the Supreme Court of Appeal (the SCA) dismissed an appeal brought by the appellants, against
a judgment of the Gauteng Division of the High Court, Pretoria.

The primary issue in the appeal was whether a pension benefit paid out to the insolvent, Mr Pierrie
Moreau in June 2009, some two years before he was finally sequestrated on 1 August 2011, enjoyed
the protection provided in s 37B of the Pensions Fund Act 24 of 1956 (the Act), which protects pension
benefits against attachment by a trustee of an insolvent estate. After receiving the pension pay-out of
R4 746 080.14, he paid R1 023 867 thereof to the first appellant, then his wife, and R3 500 00 thereof
to the second appellant, Iprolog (Pty) Ltd (Iprolog). Iprolog purchased immovable properties with that
money. In August 2009, the insolvent and the first appellant divorced each other. In the settlement
agreement of the parties it was recorded that the insolvent owed the first appellant R3 722 213.14 in
terms of the parties’ antenuptial contract, and R1 023 867 for an alleged loan. According to the
appellants, the payments of the pension money to the first appellant were in compliance with the terms
of the divorce settlement agreement, which was made an order of court. After he was sequestrated, the
respondents, the joint trustees of his insolvent estate, obtained an order in the Gauteng Division of the
High Court, Pretoria, in terms of which the payments were set aside in terms of s 31 of the Insolvency
Act 24 of 1936, and the appellants were interdicted from selling the property indirectly purchased with
the pension money. The appellants appealed against those orders and submitted that the pension pay-
out to the insolvent was exempt from attachment in terms s 37B, and that, in any event, the payments
to the appellants could not be set aside as they were made in compliance with a court order. With regard
to the Insolvency Act, it was submitted that neither of the provisions of the relevant sections had been
established to justify setting aside the payments.

Section 37B provides that if the estate of any person entitled to a benefit payable in terms of the rules
of a pension fund is sequestrated or surrendered, such benefit shall not be deemed to form part of the
assets in the insolvent estate of that person and may not in any way be attached or appropriated by the
trustee in his insolvent estate or by his creditors. In construing the section, the SCA considered, among
others, the definitions of ‘benefit’ and ‘member’ in s 1 in the Act, and concluded that once the pension
benefit is paid to a beneficiary, he or she ceases to be a ‘member’ of the pension fund according to the
rules of the fund, and the money ceases to be a ‘benefit’. It loses its character once in the hands of the
beneficiary and becomes the beneficiary’s ordinary money, which can be attached. Section 37A(1)
could not be of any assistance either, for the same reasons.

Turning to whether the payments to the appellants ought to be set aside, the court considered s 31 of
the Insolvency Act in terms of which the court may set aside any transaction entered into by the debtor
before sequestration, whereby he, in collusion with another person, disposed of property belonging to
him in a manner which had the effect of prejudicing his creditors or of preferring one of his creditors
above another. The court rejected the appellants’ submission that absent an application to impugn the
decree of divorce, the payments made in terms thereof cannot be set aside, and that the payments to the
first appellant could not be set aside based on the exclusionary clause in the definition of ‘disposition’
in s 2 of the Insolvency Act which provides that dispositions in compliance with a court shall not be set
aside. The court pointed out that those provisions do not serve as an absolute bar, and that such payments
could be set aside on the basis of either fraud, collusion or any other reprehensible conduct. In this case,
there was sufficient basis to conclude that there was collusion between the insolvent and the first
appellant, whose divorce was found to be a sham, and part of a scheme to ensure that the insolvent did
not pay his debts. Also, the court found that the parties had used the corporate veil of the second
appellant, for that purpose.

In the circumstances, the Court (per Makgoka JA) with Ponnan, Dambuza, Van der Merwe and Mbatha
JJA concurring, dismissed the appeal with costs.