Bester and Others NNO v Gouws and Others

The RVAF Trust operated as part of a fraudulent Ponzi-style investment scheme masterminded by Herman Pretorius. Investors were promised high returns, which were initially paid using new investments. Brokers (the respondents) introduced investors to the scheme and were paid commissions by the Trust between 2004 and 2012. The scheme collapsed in July 2012 following Pretorius’ suicide, and the Trust was sequestrated. The appellants were appointed as provisional and later final trustees. In November 2015, more than three years after their appointment, the trustees instituted action against the brokers to recover commissions paid, relying on unjust enrichment and statutory avoidance provisions under the Insolvency Act. The brokers raised special pleas of prescription, contending that the trustees’ claims had prescribed under the Prescription Act.

The appeal was dismissed with costs, including the costs of two counsel, subject to a limitation on record preparation costs.

The case provides important guidance on the application of section 12(3) of the Prescription Act, particularly in complex insolvency contexts. It confirms that trustees of insolvent estates cannot delay prescription by prioritising other investigations where the material facts giving rise to claims are reasonably accessible. The judgment underscores that reasonable diligence, not perfect or complete forensic certainty, is the standard for deemed knowledge.