This case concerns a wife, married out of community of property without accrual, who sought interim preservation orders over assets held by a family trust and a company controlled by her husband, pending her section 7(3) redistribution counterclaim in a divorce. The Gauteng Division, Johannesburg, dismissed the application because her contingent right lay against her husband personally and did not extend to separate legal entities unless and until the divorce court found them to be his alter ego.
The Facts and the Litigation History
The parties married out of community of property without accrual on 14 November 1992 and the marriage still subsists. The husband instituted divorce proceedings in May 2024 and the wife pleaded a counterclaim for redistribution of assets in terms of section 7(3) of the Divorce Act 70 of 1979, relying on the extension of that remedy by the Constitutional Court in EB (born S) v ER (born B) and Others; KG v Minister of Home Affairs and Others [2023] ZACC 32 to marriages concluded after the Matrimonial Property Act came into force. She was a housewife for most of the marriage and alleged that she contributed financially and as homemaker, overseeing renovations and raising the children.
The family assets were administered through the Lee Jane Trust, a discretionary inter vivos trust formed on 20 August 1999 with both spouses as trustees, which held shares in CNG Holdings. The husband also held all the shares in JSCCSJ (Pty) Ltd, a shareholder of LNG Hub (Pty) Ltd of which he was a director, and the family home was owned by Tee Jay Trading (Pty) Ltd, a non-trading entity placed under provisional winding up by Daniels AJ on 10 April 2026 at the husband’s instance.
On 5 December 2024 a Rule 43 order awarded the wife maintenance of R30,000 per month and a contribution towards costs of R150,000, and a day earlier Badenhorst AJ had frozen the Trust’s bank accounts. An independent trustee was appointed on 5 June 2025. On 1 September 2025 Raubenheimer AJ directed the Trust to pay the contribution towards costs and maintenance and ordered that the Trust’s Investec banking mandate require the joint authorisation of both spouses. The husband gave a written undertaking to that effect on 17 September 2025 and a trust resolution followed the next day.
On 17 December 2025 the trustees, including the independent trustee, resolved to pay the husband’s invoices of R1,436,081.20 for services rendered as non-executive director on the board of CNG Holdings between April 2021 and October 2024. The same day the husband transferred the whole amount to his personal Investec account, which the court described as a breach of the court order, his undertaking and the trust resolution. Between 19 and 21 December 2025 he dissipated the entire sum. The wife launched a preservation application on 18 December 2025 and an urgent ex parte freezing application on 5 January 2026. Wentzel J granted an ex parte freezing order with a rule nisi on 14 January 2026. The husband applied for reconsideration and on 23 January 2026 Windell J, by consent, unfroze all accounts save for R270,446.80 held in trust by the husband’s attorneys. The three applications were consolidated and argued together before Ndlokovane AJ on 14 September 2026, with the interlocutory relief, including joinder of the trustees and the company to the divorce action, granted by agreement.
The Competing Arguments on Redistribution and Alter Ego
Adv Boonzaier for the wife argued that a contingent section 7(3) claim is capable of founding an interim order preserving assets that might be the subject of redistribution. He relied on S.M v J.M and Another (2022/218731) [2023] ZAGPJHC 704 (13 June 2023) at paragraph 19, where the court held that a contingent accrual claim is susceptible to preservation by way of an interim interdict provided the applicant demonstrates prima facie, though open to some doubt, that a claim will accrue in his or her favour. He went further and submitted that the case for preservation is stronger in a redistribution claim than in an accrual claim, because redistribution envisages the transfer of actual assets whereas an accrual claim sounds only in money after calculation.
On the requisite state of mind, the wife relied on Knox D’Arcy Ltd and Others v Jamieson and Others (283/95) [1996] ZASCA 58; 1996 (4) SA 348 (SCA); [1996] 3 All SA 669 (A) (29 May 1996), where the Supreme Court of Appeal observed that an applicant need show that the respondent is getting rid of funds, or is likely to do so, with the intention of defeating the claims of creditors, but that it is not essential to establish an intention to frustrate an anticipated judgment if the respondent’s conduct is likely to have that effect. Two grounds were advanced: that the husband was untruthful under oath in his Rule 43 financial disclosure form about the allocation of LNG Hub shares to JSCCSJ, the share register reflecting transfers of 1050 shares on 20 March 2020 and 1000 shares on 9 December 2021 while his disclosure of 20 March 2025 said the shares had not yet been allocated; and the transfer and dissipation of the R1,436,081.26 in breach of the court order and undertaking. A substantial part of the argument was devoted to the contention that JSCCSJ was the husband’s alter ego, used to receive his personal remuneration and to pay personal expenses, relying on Die Dros (Pty) Ltd and Another v Telefon Beverages CC and Others (3413/02) [2002] ZAWCHC 53 at paragraph 26. Counsel accepted, importantly, that the preservation proceedings were not the forum for finally deciding whether the corporate veil should be pierced. A qualified preservation order was proposed, leaving the husband free to dispose of shares for legitimate capital raising, together with an order placing the remaining R270,446.80 in an interest-bearing account and costs on a higher scale.
Adv Williams for the husband submitted that section 7(3) does not create an immediately enforceable vested right comparable to an accrual claim, and that the wife’s assertions about her contributions remained matters to be tested at trial. Because the parties were married out of community of property without accrual, the wife had no vested right in assets registered in the husband’s name, no general right to prevent him from dealing freely with his own property, and no right to compel him to regulate his bona fide expenditure so that funds remain available for her alleged contingent claim. She would have a claim to payment only once a court concluded that the Trust, JSCCSJ and Tee Jay Trading were in fact his alter ego, and a redistribution court could in any event only regard the net assets as at the date of the order. The funds received from the Trust, it was said, had been applied to settle liabilities with which the wife was familiar. The payment was not unilateral dissipation but was made under a trust resolution supported by an independent trustee, and counsel pointed out that no contempt application was pending despite the allegation that a court order had been deliberately breached. As to the statement relief, the wife was not entitled to pre-emptive discovery when discovery and subpoena remained available.
The Court’s Application of the Interim Interdict Requirements
Ndlokovane AJ restated the four requirements for an interim interdict: a prima facie right though open to some doubt, a well-grounded apprehension of irreparable harm, a balance of convenience favouring the relief, and the absence of another satisfactory remedy. The court noted that section 7(3) of the Divorce Act empowers a court granting a decree of divorce to order that such assets of the other party as it deems just be transferred, and that section 7(5) directs the court to consider the existing means and obligations of the parties, donations between them during the marriage, any order under section 9 or under any other law affecting their patrimonial position, and any other relevant factor.
The application failed at the first hurdle. The court accepted that the wife asserts a contingent section 7(3) right, but held at paragraph 56 that “the assets she seeks to preserve are not held by the First Respondent personally. They are held by the Lee Jane Trust and by JSCCSJ (Pty) Ltd. The Applicant’s right to those assets depends on a finding that those entities are the alter egos of the First Respondent — a finding that cannot be made in these proceedings.” At paragraph 57 the court concluded that “her right, such as it is, is a right to claim a redistribution from the First Respondent personally. It does not extend to assets held by third parties unless and until the divorce court pierces the corporate veil.”
On irreparable harm the court held at paragraph 58 that even on the assumption of a prima facie right, the Trust and the company “are separate legal persons. The First Respondent’s conduct in transferring R1,436,081.26 from the Trust to himself is serious, but it does not establish that the Trust or JSC will dissipate their remaining assets to thwart the Applicant’s claim.” The apprehension was characterised at paragraph 59 as speculative, and the court observed that “the fact that the First Respondent breached a court order in respect of one transaction does not establish a general intention to dissipate the assets of separate legal entities.” The balance of convenience favoured the husband because the order sought “would paralyse their legitimate business operations”, while the wife’s interests could be protected by the divorce court’s redistribution power and the existing Rule 43 order. Finally, the court found that alternative remedies existed: the alter ego claim could be pursued in the divorce action, discovery and subpoenas were available, and a preservation order could be sought in the divorce court once the alter ego issue had been determined. The application on the merits was dismissed with costs, including the costs of counsel, with no order as to costs on the interlocutory relief granted by agreement.
A Sharper View: What S.M v J.M Decided and Where the Reasoning Falls Short
The weakness in the judgment lies in how it dealt with the authority it accepted. S.M v J.M was not simply a case about a contingent accrual claim against a spouse personally. The property that Khan AJ preserved was registered in the name of a close corporation, cited as second respondent, of which the husband was the sole member and director. The husband’s answer was precisely the answer given here: the property belonged to a separate juristic person and the wife had no right to it. Khan AJ did not defer that question to the trial court. At paragraph 29 the court reasoned that if the property “was de facto the property of the Second Respondent and not simply a legal fiction, it should not feature in the ANC at all”, and that its inclusion “lends credence to the Applicant’s allegation that the Second Respondent is merely the alter ego of the First Respondent and not in fact a separate juristic entity”. On that prima facie assessment the order interdicted both the husband and the close corporation from selling the property pending the divorce. The principle extracted at paragraph 19, that preservation is available “provided that an applicant can demonstrate prima facie, although open to some doubt, that an accrual claim will accrue in his or her favour”, was therefore applied in S.M v J.M to an asset held by an entity, on the strength of a prima facie alter ego finding made in the preservation application itself.
Measured against that, the statement at paragraph 56 of the present judgment that the alter ego finding is one “that cannot be made in these proceedings” is difficult to reconcile with the authority the court had just cited. A preservation court is not asked to pierce the corporate veil finally. It is asked whether the applicant has shown, prima facie though open to some doubt, that the entity is the spouse’s alter ego, so that a redistribution court could treat its assets as his. The wife placed evidence before the court of trust funds dealt with through personal accounts, personal expenses paid through the company, remuneration routed through the company, a sworn disclosure contradicted by the share register, and a transfer of R1,436,081.26 out of the Trust in breach of a court order. The judgment does not weigh that evidence against the prima facie standard. It treats the separate legal personality of the Trust and the company as an answer in itself, which is the very submission that S.M v J.M rejected on its facts. The concession by the wife’s counsel that the preservation proceedings were not the forum for finally deciding piercing was correct as far as it went, but it should not have been read as a concession that no prima facie assessment could be made.
Fairness to the judgment requires two qualifications. First, the alter ego evidence in S.M v J.M was unusually strong, because the husband had himself listed the property in the commencement value of his estate in the antenuptial contract. Nothing of that kind existed here, and the independent trustee’s participation in the December 2025 resolution cut the other way. A court applying the correct standard might still have found the evidence insufficient. Second, the wife’s own argument that redistribution is stronger than accrual because it transfers actual assets is double-edged. An accrual claim is a money claim against the spouse’s estate as a whole, so preserving any asset protects it. Section 7(3) permits transfer of “such assets of the other party”, so if the asset is not the spouse’s there is nothing to transfer. That makes the alter ego question more central in a redistribution case, not less, and all the more reason for the preservation court to engage with it at the prima facie level rather than to decline it altogether.
The practical consequences follow from that analysis. An applicant seeking to preserve assets held in a trust or company should plead the alter ego case in the founding affidavit with the specificity of S.M v J.M, identifying the conduct from which the inference is to be drawn, and should ask the court expressly to make a prima facie assessment, not to decide the question. Any concession about the forum for final determination should be framed in those terms. Relief against the spouse personally, including his shareholding, loan accounts and rights as beneficiary, should be sought in the alternative so that the application does not stand or fall on the entities. A breach of an existing order regulating trust banking should be met with a contempt application, both for its own sake and because its absence was used here to blunt the inference of dissipation. Where an independent trustee has sanctioned the impugned payment, the papers must engage with what that trustee knew of the joint authorisation order. And the costs order, which included counsel’s fees, is a reminder that an application framed against the wrong respondent carries real financial risk.
Questions and Answers
What was the matrimonial property regime and why did it matter?
The parties were married out of community of property without accrual on 14 November 1992. The husband argued that in consequence the wife had no vested right in any asset registered in his name and no general right to prevent him from dealing freely with his own property, which framed the dispute about whether a contingent redistribution claim could support interim preservation relief.
On what statutory basis did the wife claim a redistribution of assets?
She relied on section 7(3) of the Divorce Act, which empowers a court granting a decree of divorce to order that such assets of the other party as the court deems just be transferred to the first-mentioned party, as extended by the Constitutional Court in EB v ER to marriages concluded after the Matrimonial Property Act came into force.
What factors does section 7(5) of the Divorce Act require the court to consider?
The existing means and obligations of the parties, any donation made by one party to the other during the marriage, any order granted under section 9 of the Divorce Act or under any other law affecting the patrimonial position of the parties, and any other factor which in the opinion of the court should be considered.
What are the requirements for an interim interdict as restated by the court?
A prima facie right though open to some doubt, a well-grounded apprehension of irreparable harm, a balance of convenience favouring the granting of the interim relief, and the absence of another satisfactory remedy.
What did the court hold about the existence of a prima facie right?
The court held that the wife’s right, such as it is, is a right to claim a redistribution from the husband personally and does not extend to assets held by the Lee Jane Trust or JSCCSJ (Pty) Ltd unless and until the divorce court pierces the corporate veil. Because the assets she sought to preserve were held by those entities, no prima facie right to them was established.
Why did the court say the alter ego finding could not be made in these proceedings?
The court treated the question whether the Trust and the company are the husband’s alter ego as a matter for determination in the divorce action, to which the trustees and the company had been joined, and not for a preservation application. Counsel for the wife had also accepted that the preservation proceedings were not the forum for finally deciding whether the corporate veil should be pierced.
What did S.M v J.M decide and how was it used?
In S.M v J.M Khan AJ held at paragraph 19 that a contingent accrual claim is susceptible to preservation by way of an interim interdict preventing the dissipation of assets, provided the applicant demonstrates prima facie, though open to some doubt, that a claim will accrue in his or her favour. The property preserved in that case was registered in a close corporation controlled by the husband, and the court found prima facie that the close corporation was his alter ego and interdicted both of them. In the present case the wife relied on the principle to argue that a contingent redistribution claim is likewise protectable, but the court did not engage with the fact that S.M v J.M had applied it to an entity-held asset on a prima facie alter ego assessment.
What is the test for the respondent’s state of mind under Knox D’Arcy?
In Knox D’Arcy the Supreme Court of Appeal observed that the applicant must show that the respondent is getting rid of the funds, or is likely to do so, with the intention of defeating the claims of creditors, but that it is not essential to establish an intention to frustrate an anticipated judgment if the conduct of the respondent is likely to have that effect.
Did the husband’s transfer of R1,436,081.26 from the Trust establish an intention to dissipate?
No. The court described the transfer, made in breach of a court order, an undertaking and a trust resolution, as serious, but held that a breach in respect of one transaction does not establish a general intention to dissipate the assets of separate legal entities, and that the apprehension of harm was speculative.
What role did the alleged discrepancy in the Rule 43 financial disclosure form play?
The wife contended that the share register showed transfers of LNG Hub shares to JSCCSJ in 2020 and 2021 whereas the husband’s sworn disclosure of 20 March 2025 stated the shares had not yet been allocated, and argued that this inconsistency supported an inference of concealment. The court did not find that this established a prima facie right against the company or an intention on its part to dissipate.
What was the Die Dros case cited for?
Die Dros at paragraph 26 was relied on by the wife for the alter ego principle, in support of her contention that JSCCSJ was used to receive the husband’s personal remuneration, to pay his personal expenses, and to hold assets away from his personal estate.
How did the court assess the balance of convenience?
It found that the balance favoured the husband because the preservation order would prevent the Trust and the company from dealing with their own assets pending the divorce and would paralyse their legitimate business operations, while the wife’s interests could be protected by the divorce court’s power to make a redistribution order and by the existing Rule 43 order.
What alternative remedies did the court identify?
The wife could pursue her alter ego claim in the divorce action, seek discovery and subpoenas, and apply for a preservation order in the divorce court once the alter ego issue had been determined.
What was the significance of the absence of a contempt application?
The husband’s counsel pointed out that although the wife alleged a deliberate breach of a court order, no contempt application was pending. This supported the argument that the payment, made under a trust resolution with the participation of an independent trustee, was not unilateral dissipation, and weakened the inference of an intention to dissipate.
What orders were made?
By agreement, the three applications were consolidated, the trustees and JSCCSJ were joined as defendants to the divorce action, the stay of the Tee Jay Trading liquidation was postponed sine die with leave to approach the court on supplemented papers, the late replying affidavit was condoned, and no costs order was made on the interlocutory relief. The application on the merits was dismissed and the wife was ordered to pay the costs, including the costs of counsel.
Written by Bertus Preller, a Family Law and Divorce Law attorney and Mediator at Maurice Phillips Wisenberg in Cape Town and founder of iDivorce and iANC. A blog, managed by SplashLaw, for more information on Family Law read more here. For free and useful Family Law tech applications visit Maintenance Calculator, Court Day Calculator and Accrual Calculator.
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