GF Wessels NO v CJ de Jager NO and Another

After the sequestration of his estate but before his rehabilitation, an insolvent man’s wife, married to him out of community of property, took out a life insurance policy on her own life and nominated the insolvent as beneficiary. She later died intestate, with the result that the insolvent was also an intestate heir in her deceased estate. The insolvent refused to accept both the insurance proceeds and the inheritance. The curator of the insolvent estate contended that these benefits vested in him in terms of section 20(2)(b) of the Insolvency Act 24 of 1936, giving him the power to accept them on behalf of the insolvent. The court a quo held that they did not so vest, leading to this appeal to the Supreme Court of Appeal.

The appeal was dismissed with costs. A further costs order was made that the appellant’s attorneys may not recover any costs attributable to the unnecessary inclusion of volume 2 of the appeal record.

The case is important in South African insolvency law for clarifying the distinction between enforceable rights and mere competences or powers to accept benefits. It confirms that unaccepted insurance benefits and inheritances accruing during sequestration do not vest in the curator of an insolvent estate, thereby protecting the insolvent’s freedom to accept or reject such benefits.