Thomas and Another v Thomas

The appellants and the respondent are brothers involved in longstanding farming disputes. After the respondent sold one of his farms to a company co-owned by the first appellant, disputes arose leading to litigation. The respondent instituted an action in 2003 claiming delivery of livestock or payment of their value. While that action was pending, the respondent’s estate was sequestrated in 2006 at the instance of the first appellant. The right of action vested in the trustees of the insolvent estate. The trustees, authorised by creditors, did not pursue or monetise the action and abandoned it. The respondent was rehabilitated in 2010. In 2018, he applied to the High Court for declaratory relief that the right of action did not form part of his insolvent estate or had been waived by the trustees and creditors, and that he was entitled to pursue it personally. The High Court granted the relief. The appellants appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The order of the High Court was set aside and substituted with an order dismissing the respondent’s application with costs.

The judgment clarifies South African insolvency law by confirming that a right of action is an incorporeal movable asset that vests in trustees upon sequestration and that abandonment of such a right extinguishes it. It draws a clear distinction between the abandonment of incorporeal rights and corporeal property, and limits the scope of rehabilitation under section 129 of the Insolvency Act. The case provides authoritative guidance on the consequences of trustees’ abandonment of claims.