The Facts: Divorce, Sequestration and a Web of Trusts and Companies
The matter of M.A.V. NO and Others v E.V (Case No. 8692/2020) [2026] ZAWCHC 167 (14 April 2026) concerns an application for security for costs arising out of protracted divorce proceedings in the Western Cape Division of the High Court. The parties are married out of community of property, and Mrs V seeks redistribution of assets in terms of section 7(3) of the Divorce Act 70 of 1979 as well as maintenance.
As part of the divorce proceedings, Mrs V instituted a joinder application seeking to join three trusts — the Le Casseur Trust, the MV Familie Trust and the V Beleggings Trust — together with three companies, namely Eilandia Plase (Pty) Ltd, Korhaan Hoogte Eiendomme (Pty) Ltd and Rockbelt Ridge Agri (Pty) Ltd, to the divorce action. Mr V holds interests in all these entities, being both a beneficiary and trustee of the trusts and a director of the companies. Mrs V’s case is that the value of these entities ought to be taken into account in her redistribution claim.
Complicating matters significantly, Mrs V was finally sequestrated by the High Court in April 2023. The applicants sought to leverage this sequestration as the primary basis for demanding security for costs in the amount of R350 000.00, contending that she would be unable to satisfy any adverse costs order. Mrs V, in turn, launched a counter application seeking an order that, to the extent she was required to furnish security, Mr V be directed to do so in his personal capacity.
Security for Costs as a Tactical Weapon: The Court’s Discretion and Constitutional Considerations
The legal framework governing the application is found in Rule 47 of the Uniform Rules of Court, which requires a party seeking security to deliver a notice setting out the grounds upon which security is claimed. Welgemoed AJ was at pains to emphasise that an application for security for costs is not a routine procedural step but an exceptional remedy requiring clear factual and legal grounds, to be exercised with judicial restraint.
The applicants advanced three broad grounds: Mrs V’s status as an unrehabilitated insolvent, the alleged vexatious and reckless nature of the joinder application, and her purported lack of prospects of success. The court drew on Fusion Properties 233 CC v Stellenbosch Municipality 2021 ZASCA 10 and Shepstone & Wiley v Geyser 1998 (3) SA 1036 (SCA) in articulating the applicable discretionary framework. The Fusion Properties case reaffirmed that a court retains an unfettered discretion and must balance the potential injustice to a plaintiff prevented from pursuing a legitimate claim against the risk to a defendant who cannot recover costs. The Shepstone & Wiley case added the important qualification that good prospects of success may outweigh impecuniosity.
Mrs V’s opposition carried considerable constitutional weight. She argued that granting security would infringe her right of access to courts under section 34 of the Constitution of the Republic of South Africa, 1996, rendering the remedy in practice a denial of justice to an impoverished litigant. She further contended that the application was deployed tactically — part of a broader pattern of procedural obstruction, non-disclosure and defiance of maintenance orders — specifically designed to financially incapacitate her and shield Mr V’s affairs from scrutiny.
Welgemoed AJ found no merit in the applicants’ submissions, dismissing the security for costs application with costs and granting the counter application, ordering Mr V to furnish security in his personal capacity.
Piercing the Corporate Veil in Divorce Proceedings: Lessons for Section 7(3) Redistribution Claims
What makes this judgment particularly instructive for family law practitioners is the court’s forthright observations regarding the joinder of trusts and companies in redistribution litigation. Welgemoed AJ noted that an organigram of the trusts and companies clearly demonstrated Mr V’s direct interest in all the applicant entities, concluding unequivocally that the corporate veil must be pierced and that Mrs V has a right to insight into the financial realities of those entities.
This approach aligns with the well-established trend in our courts to scrutinise the use of trusts and corporate structures by spouses seeking to place assets beyond the reach of a redistribution claim. Where a spouse exercises effective control over such entities, whether as trustee, beneficiary or director, those entities and their assets become relevant to the enquiry under the Divorce Act. The joinder of such entities is accordingly not vexatious — it is often the only meaningful mechanism available to the claimant spouse to ensure that the full economic picture is placed before the court.
The costs order is equally significant. Welgemoed AJ awarded costs on an attorney and client basis under Scale B, reflecting the court’s displeasure with what it characterised as a tactical and obstructive manoeuvre aimed at closing the courthouse doors to Mrs V. For practitioners advising clients in similar circumstances, this judgment serves as a clear warning that security for costs applications deployed as instruments of delay in redistribution litigation will be met with adverse cost consequences. The judgment reinforces that access to justice in divorce proceedings, particularly where complex trust and corporate structures are involved, cannot be frustrated by procedural engineering.
Questions and Answers
What is the legal basis for an application for security for costs in South African civil proceedings?
Security for costs is governed by Rule 47 of the Uniform Rules of Court. It is an exceptional remedy, not a routine procedural step, and requires clear factual and legal grounds. The court retains a discretion whether to grant or refuse the order, which must be exercised judicially having regard to all the circumstances of the case.
What are the primary grounds upon which a court may be persuaded to order security for costs?
The most common grounds are that the opposing party is an unrehabilitated insolvent or otherwise impecunious, that the litigation is vexatious or reckless, or that the party lacks prospects of success. These grounds are not individually determinative and must be weighed holistically in the exercise of the court’s discretion.
Does sequestration automatically entitle an opposing party to an order for security for costs?
No. While sequestration is a relevant consideration, it does not automatically sound in an order for security. As affirmed in the Shepstone & Wiley case, good prospects of success may outweigh impecuniosity. The court must balance all relevant factors, including the nature and merits of the underlying claim.
Can an insolvent spouse litigate in divorce proceedings without the intervention of a trustee?
Yes, in defined circumstances. Section 23(6) of the Insolvency Act 24 of 1936 permits an insolvent to institute or defend proceedings which relate to status or personal rights, or which concern claims due to or against the insolvent personally. Matrimonial litigation, including joinder applications incidental thereto, falls within this exception as it concerns the insolvent’s status and personal rights.
What constitutional considerations arise in security for costs applications?
Section 34 of the Constitution of the Republic of South Africa, 1996 guarantees every person the right to have justiciable disputes resolved by a court. Where a security for costs order would in practice deprive an impoverished litigant of access to court, it potentially infringes this constitutional right. Courts must accordingly exercise the discretion to grant security with heightened care in such circumstances.
What is the significance of the Fusion Properties case in security for costs applications?
The Fusion Properties case reaffirmed that the court retains an unfettered discretion and must balance the potential injustice to a plaintiff who is prevented from pursuing a legitimate claim against the injustice to a defendant who successfully defends but cannot recover costs. It further confirmed that security for costs must not be used to shut the courthouse door to bona fide litigants.
When will a security for costs application itself be regarded as an abuse of process?
Where the application is deployed tactically to delay proceedings, financially incapacitate an opposing party, or shield a litigant’s affairs from legitimate scrutiny rather than to protect a genuine risk of irrecoverable costs, it constitutes an abuse of process. In such circumstances the court will not only refuse the application but may mark its displeasure through an adverse costs order.
On what basis may trusts and companies be joined to divorce proceedings involving a redistribution claim?
Where a spouse exercises effective control over trusts or companies, whether as trustee, beneficiary or director, those entities become relevant to the redistribution enquiry under section 7(3) of the Divorce Act 70 of 1979. Joinder is competent where the entities have a substantial interest in the outcome of the proceedings and where the court needs insight into the financial realities behind the corporate and trust structures to adjudicate the claim properly.
What is the legal significance of piercing the corporate veil in the context of divorce redistribution claims?
Piercing the corporate veil enables a court to look beyond the formal legal separation between a spouse and entities he controls, so as to determine the true economic benefit those entities confer upon him. This is essential in redistribution claims where assets have been placed into trusts or companies in a manner that artificially diminishes the apparent estate of the spouse against whom the claim is made.
What are the cost implications for a party that brings a security for costs application as a tactical device?
As this judgment illustrates, a court will not hesitate to dismiss such an application with costs and, where the conduct warrants it, to award costs on a punitive scale. In this matter Welgemoed AJ awarded costs on an attorney and client basis under Scale B, reflecting the court’s strong disapproval of what it found to be a deliberate and obstructive procedural manoeuvre designed to deny Mrs V access to the court.
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 and Accrual Calculator.
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