Van Rooyen NO and Another v Mokwena NO and Another

The appellants were the duly appointed joint liquidators of Tumi Mokwena Incorporated (TMI), a firm of attorneys that had been liquidated for inability to pay its debts. They applied for the sequestration of the Dikwenanyana Trust, alleging that the Trust was indebted to TMI in the amount of R7 497 069, was insolvent, and functioned as the alter ego of Mr Tumi Mokwena, the former director of TMI, who had himself been sequestrated. The appellants alleged that trust and business monies of TMI were unlawfully misappropriated and paid into the Trust, which was used to conceal assets from creditors. A forensic report supported these allegations and was not contested. The High Court dismissed the sequestration application. While an appeal was pending, the parties concluded a settlement agreement in which the Trust acknowledged receipt of misappropriated funds and undertook to repay them. The Trust breached the settlement agreement, triggering a clause allowing the appellants to proceed with the appeal unopposed for the full sequestration claim.

The appeal was upheld. The order of the Limpopo Division of the High Court, Polokwane was set aside and replaced with an order granting provisional sequestration of the Dikwenanyana Trust, issuing a rule nisi returnable on 18 March 2026, directing publication and service of the order, authorising the piercing of the trust veneer, notifying creditors, and ordering that the costs of the application and appeal be costs in the administration of the Trust.

The judgment reinforces the principles governing provisional sequestration under the Insolvency Act and confirms the Supreme Court of Appeal’s willingness to intervene where lower courts incorrectly dismiss sequestration applications despite clear prima facie proof. It is significant for its robust approach to piercing the trust veneer where trusts are abused to conceal assets and defraud creditors, particularly in the context of insolvent attorneys’ practices and misappropriation of trust funds.