Ten Years On, and Four Supreme Court of Appeal Decisions Later: The Relevance of a Largely Overlooked Case in Combating Trust-Form Abuse in Divorces Involving the Accrual System –RP v DP 2014 (6) SA 243 (ECP)

This case note considers the merits and demerits of the judgment in RP v DP 2014 (6) SA 243 (ECP) in view of four judgments of the Supreme Court of Appeal (SCA) that have been handed down in the decade since RP was decided. Drawing on these cases - as well as scholarship on the issue - the note highlights three crucial demerits of the RP judgment, namely the court's conflation of the "sham" versus "alter ego" scenarios in South African law; confusion regarding the legal basis of the applicant's claims, spawning the erroneous conclusion that piercing the veil of a trust involves adjudicating whether simulated transactions are at issue; and the fact that the SCA's judgment in Badenhorst v Badenhorst 2006 (2) SA 255 (SCA) might have provided the root of least resistance given the ostensible basis of the applicant's contentions. Drawing on the latter conclusion, it is pointed out that an important merit of the RP case is its correct conclusion that piercing the veil of an abused trust involves the exercising of a common-law power that exists independently of divorce and matrimonial property legislation and that, as an outflow hereof, a divorce court is in fact - contrary to case law to the contrary - entitled to pierce the veil of an abused trust where the accrual system is applicable. However, this merit is somewhat diminished by by the RP court’s failure to appreciate the true significance of the SCA’s ratio in the leading matter of Badenhorst v Badenhorst supra and the relevance of that case’s so-called “control test” to allegations of trust form abuse in the context of marriages involving the accrual system. It is argued that this failure, coupled with a lack of subsequent engagement with the RP case by the SCA – particularly in its judgment in REM v VM 2017 (3) SA 371 (SCA) – would likely have contributed to a more satisfactory contemporary legal position in respect of such marriages, especially in view of two recent conflicting judgments delivered by the SCA on the applicability of the "control test" in the accrual setting. This would have played a meaningful role in combating the use of a trust to engage in "divorce planning". In the final analysis, t is concluded that, its demerits aside, the RP case provides valuable perspectives that should have featured more prominently in our jurisprudence, particularly that which has emerged from the SCA.