THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 1109/2024
In the matter between:
JÜRGEN SCHEER APPELLANT
and
RAOUL GREGOR WAGNER N.O. RESPONDENT
(In his capacity as the duly appointed trustee
of the insolvent estate of Jürgen Scheer
in the Republic of Austria, File No: AZ 6 S 77/17s)
In re:
RAOUL GREGOR WAGNER N.O. APPLICANT
(In his capacity as the duly appointed trustee
of the insolvent estate of Jürgen Scheer in the
Republic of Austria, File No: AZ 6 S 77/17s)
and
JOHAN CHRISTIAN GIJSBERS N.O. FIRST RESPONDENT
(In his capacity as duly appointed joint trustee
of the insolvent estate of Jürgen Scheer
Masters Ref No: C82/2018)
NTANGANEDZENI FRANK NEMAKWARANI N.O. SECOND RESPONDENT
(In his capacity as duly appointed joint trustee
of the insolvent estate of Jurgen Scheer
Master Ref No: C82/2018)
2
JÜRGEN SCHEER THIRD RESPONDENT
THE MASTER OF THE WESTERN CAPE HIGH COURT FOURTH RESPONDENT
Neutral citation: Scheer v Wagner N.O. & Others (1109/2024) [2026] ZASCA 32
(23 March 2026)
Coram: SMITH and KOEN JJA and MAMOSEBO AJA
Heard: 27 February 2026
Delivered: 23 March 2026
Summary: Insolvency law – interpretation of ‘surplus’ in s 116 of the Insolvency Act 34
of 1936 (the Act) – recognition of foreign trustee in terms of common law principle of
comity – presumption against alteration of the common law – whether foreign trustee
entitled to claim surplus in South African insolvent estate to settle.
3
ORDER
On appeal from: Western Cape Division of the High Court, Cape Town (De Wet AJ sitting
as court of first instance):
1 The respondent is granted leave to adduce further evidence on appeal. The judgments
of the Vienna Higher Regional Court of Austria, which are attached to the respondent’s
application to adduce further evidence, are admitted into evidence.
2 The respondent is to pay the costs of the application to adduce further evidence.
3 The appeal is dismissed with costs including the costs of two counsel, where so
employed.
JUDGMENT
Smith JA (Koen JA and Mamosebo AJA concurring):
Introduction
[1] This appeal concerns the interpretation of the word ‘surplus’ in s 116 of the
Insolvency Act 24 of 1936 (the Act). Section 116 provides that if any surplus remains in
an in solvent estate, after settling all claims, costs, charges, and interest, the trustee must,
following the confirmation of the final distribution plan, pay th at surplus to the Master of
the High Court. The surplus is then deposited in the Guardians’ Fund and will only be paid
out to the rehabilitated insolvent upon their request.1
[2] The respondent, Mr. Wagner, is the trustee of the insolvent estate of the appellant,
Mr. Scheer , in Austria . Mr Scheer’s estate in South Africa was also subsequently
1 ‘Surplus to be paid into Guardians’ Fund until rehabilitation of insolvent
(1) If after the confirmation of a final plan of distribution there is any surplus in an insolvent estate which is
not required for the payment of claims, costs, charges or interest, the trustee shall, immediately after the
confirmation of that account, pay that surplus over to the Master, who shall deposit it in the Guardians’ Fund
and after the rehabilitation of the insolvent shall pay it out to him at his request.’
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sequestrated. Mr Johan Christian Gijsbers and Mr Ntanganedzeni Frank Nemakwarani
are the duly appointed joint co-trustees of his South African estate.
[3] Mr Wagner applied to the high court for: recognition as the receiver of the insolvent
estate in Austria, within the Republic for the purposes outlined in the notice of motion; a
declaration that the co -trustees to the South African estate remain as the only persons
empowered to administer the South African estate; and the removal of any remaining
surplus funds to Austria, upon conclusion of the distribution of the South African estate,
and the Master of the High Court confirming the amount of surplus fu nds available for
transfer and the details of the Austrian estate into which the surplus funds are to be paid.
Costs were sought only in the event of opposition.
[4] Mr Scheer opposed the application on the ground that s 116 requires any surplus
in his South African estate to be paid into the Guardians Fund and thereafter to him after
his rehabilitation. This provision, Mr Scheer argued, is peremptory and accordingly d oes
not allow South African courts any discretion to deal with the surplus in any other manner.
The high court, however, rejected this argument and granted the relief sought with costs
on a punitive scale. Mr Scheer appeals against that order with the leave of the high court.
[5] At the hearing of the appeal, Mr Wagner applied for an order allowing him to
adduce further evidence. He sought to place before this Court two judgments of the
Vienna Higher Regional Court of Austria, delivered on 25 and 26 November 2025,
respectively. He asserted that he only became aware of the judgments on 5 December
2025. The delay in seeking leave to submit the judgments into evidence is alleged to have
been caused by the need to obtain sworn translations and to confirm their finality under
Austrian law. The judgments arose from Mr Scheer’s appeals against decisions rejecting
Austrian law. The judgments arose from Mr Scheer’s appeals against decisions rejecting
his proposed restructuring plan to settle his Austrian creditors. Mr Wagner contended that
the judgments are ‘highly material’ because they provided definitive findings on the extent
of the deficit in Mr Scheer’s Austrian estate, alleged to be an issue before this Court.
Mr Scheer did not oppose the application and gave notice that he abides by the decision
of this Court.
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[6] The discretion to admit new evidence on appeal is governed by s 19( b) of the
Superior Courts Act 10 of 2013 and guided by principles that ensure fairness, finality, and
the integrity of judicial proceedings. Courts exercise this discretion sparingly, requiring
applicants to demonstrate exceptional circumstances, materiality, and the absence of
prejudice to the opposing party.
[7] The guiding principles include:
(a) It is essential that there should be finality to legal proceedings and a litigant should
not, except in exceptional circumstances, be allowed to adduce further evidence.
(b) The applicant must show that the failure to adduce the evidence was not due to
their negligence and must satisfy the court that they could not have obtained the
evidence through reasonable diligence.
(c) The evidence tendered must be admissible, weighty and material and likely to be
true, and must be such, that if adduced, it would be practically conclusive.2
[8] I am satisfied that Mr Wagner provided a reasonable explanation for the failure to
tender the judgments at the hearing in the high court. The judgments are clearly relevant
to the determination of Mr Scheer ’s contention that Mr Wagner’s application was
premature as the extent of the deficit in his Austrian estate had not yet been determined.
The judgments provide objective and final confirmation of the dismissal of Mr Scheer’s
appeals in respect of his applications to set aside: the sale and transfer of his immovable
property; the determination of costs and the distribution of proceeds from the sale of the
immovable property; the refusal to amend minutes of the distribution meeting ; and the
decision to reject his proposed restructuring pla n to settle his Austrian creditors . The
judgments are therefore relevant insofar as they provide confirmation that all disputes
regarding Mr Scheer’s Austrian debts have been finally adjudicated by a competent
tribunal in Austria. Accordingly, the judgments are admitted into evidence.
tribunal in Austria. Accordingly, the judgments are admitted into evidence.
2 Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail ZACC 20; 2005 (2) SA 359 (CC);
2005 (4) BCLR 301 (CC) at para 43. See also: Prince v President, Cape Law Society and Others [2002]
ZACC 1; 2002 (2) SA 794; 2002 (3) BCLR 231 (CC); 2002 (1) SACR 431 (CC) at para 39; S v Schaik and
Others [2007] ZACC 19; 2008 (2) SA 208 (CC); 2007 (12) BCLR 1360 (CC); 2008 (1) SACR 1 (CC) at para
21; and S v Swanepoel 1983 (1) SA 435 (A).
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Factual background
[9] As the appeal turns on the interpretation of a statutory provision, it is only
necessary for me to provide a summary of those facts required to establish context and
to determine its application to the facts of this appeal . The relevant facts can be stated
briefly.
[10] Mr Scheer’s Austrian estate was sequestrated in 2017 and his South African estate
in 2018. At the time of the sequestration of his Austrian estate, Mr Scheer was domiciled
in Austria. It is also common cause that most of his creditors are in Austria.
[11] Mr Wagner has shown that the shortfall in the Austrian estate is likely to exceed
€4.4 million. There was some dispute over the value of an Austrian situated immovable
property, with Mr. Scheer estimating it at €3.3 million and Mr. Wagner insisting on a
valuation of €1.8 million. Mr. Wagner has, however, demonstrated that Mr. Scheer had
overstated the value of the immovable property, as the sale agreement upon which he
relied related to two properties. Furthermore, the €3.3 million price was conditional upon
the lifting of the insolvency proceedings. In any event, the Austrian Bankruptcy Court
authorised the sale of the immovable property at a purchase price of €1.8 million. This
detail, however, is not important for the purposes of the appeal since Mr Scheer accepts
that the shortfall in his Austrian estate will be substantial . It is undisputed that there will
be a surplus in his South African estate, which could be used for the benefit of Austrian
creditors without prejudice to South African creditors.
Submissions by the parties
[12] Mr Scheer contended that Mr Wagner must be treated as an ordinary creditor and
must lodge a claim against the estate in terms of s 44 of the Act. That provision regulates
the procedure that creditors must follow when submitting claims in an insolvent estate.
[13] He submitted that where an insolvent’s estate had only been sequestrated in a
[13] He submitted that where an insolvent’s estate had only been sequestrated in a
foreign jurisdiction, the common law principles of international comity apply. However,
where the insolvent’s estate was also sequestrated in the Republic of South Africa, the
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position is regulated by s 116 of the Act. The provisions of s 116 are both express and
peremptory. They determine that any surplus in the insolvent estate shall be paid to the
Master and – once rehabilitated – to the insolvent, at his request. Mr Scheer argued that
a court cannot override or circumvent these explicitly peremptory provisions in the
absence of a legislative provision granting such powers.
[14] He further argued that Mr Wagner's notice of motion does not only seek recognition
for the purposes of the administration of his South African estate, but also an order that
he be authorised to remove any surplus funds in that estate. While South African courts
would ordinarily grant requests for recognition based on the principle of international
comity, the order which Mr Wagner seeks regarding the surplus in his estate is not
sanctioned by s 116 of the Act. The reference to ‘claims, charges and costs’ in s 116 is to
those in his South African estate and the relief sought by Mr Wagner can therefore not
encompass the surplus. He further asserted that the effect of the high court's judgment is
that claims by Austrian creditors were allowed without deference to the provisions of s 44
of the Act. Moreover, Mr Scheer argued, the application was speculative an d premature
since the shortfall in the Austrian estate has not yet been fully determined.
[15] Conversely, Mr Wagner contended for an interpretation of s 116 that considers the
broader pool of Mr Scheer’s creditors, encompassing both South African and Austrian
obligations. He asserted that funds remaining in the South African insolvent estate, after
satisfying the claims of South African creditors and covering the associated proceedings’
costs, do not constitute a ‘surplus’ as contemplated by s 116. Although Mr Scheer’s
insolvency spans across two jurisdictions, he possesses only a single estate . Therefore,
Mr. Wagner argued, no ‘surplus’ as envisioned by s 116 should be paid into the Guardian
Mr. Wagner argued, no ‘surplus’ as envisioned by s 116 should be paid into the Guardian
Fund until the claims of all Austrian creditors have been satisfied.
[16] According to Mr Wagner, this interpretation aligns with established common law
principles governing the recognition of foreign trustees, particularly those appointed in the
jurisdiction of the insolvent’s domicile, which apply in this case. He further maintains that
the relief he seeks would not prejudice Mr Scheer, as it is improbable that Mr Scheer will
8
be rehabilitated or that any surplus in South Africa would be returned to him while debts
to his Austrian creditors remain outstanding. Mr Scheer’s entitlement to any surplus would
arise only after the full settlement of all creditors’ claims in both jurisdictions, as well as
all insolvency and bankruptcy costs. Mr Wagner asserts that should such a surplus
eventually exist, Mr. Scheer would be entitled thereto in Austria.
Findings by the high court
[17] The high court was satisfied that Mr Wagner had been properly appointed as
receiver of Mr Scheer’s insolvent estate in Austria. It was Mr Scheer’s place of residence
at the time of the bankruptcy order. Accordingly, the high court was satisfied that
Mr Wagner had the necessary authority to bring the application for recognition.
[18] The high court further found that Mr Wagner had established that the Austrian
creditors’ claims would probably not be satisfied from the proceeds of the Austrian assets
alone, and that the claims process was ongoing. It also considered the impact of s 116 of
the Act. In this regard it found that while s 116 sets out mandatory obligations regarding
surplus funds, courts are not precluded from applying the p rinciple of comity in cases
where a foreign insolvent estate is likely to have a deficit. The significance of this principle
will be discussed in detail below.
[19] The high court ultimately found that funds remaining after the final distribution of
an insolvent estate administered in South Africa do not constitute a surplus as
contemplated by s 116(1). On a purposive interpretation, such a surplus would vest in
Mr Wagner as the recognised receiver of the Austrian estate. The high court further found
that, considering that Mr Scheer cannot lay claim to the surplus until his rehabilitation,
requiring the funds to be paid into the Guardian’s Fund would be impractical, costly, and
inconvenient.
Discussion
9
[20] The principles relating to the recognition of trustees of foreign insolvent estates
were comprehensively explained in Ex Parte Palmer NO: In re Hahn .3 These principles
can be summarised as follows.
[21] First, the recognition of foreign trustees is guided primarily by the principle of
comity, which encourages courts to acknowledge the appointment of foreign trustees,
provided such recognition does not conflict with local laws or public policy. The principle
of comity is a long-established doctrine of private international law through which courts
of one sovereign state, as a matter of judicial policy, extend a measure of recognition and
respect to the laws and judicial acts of another. It is not a rule of law that binds courts, but
a discretionary principle grounded in mutual respect, convenience, and the orderly
administration of justice in matters that transcend national boundaries.
[22] Second, a foreign -appointed trustee may, as a matter of South African private
international law, deal with an insolvent’s movable property located in South Africa
because such assets follow the lex domicilii (law of domicile), and therefore vest in the
trustee upon the foreign sequestration. Although formal recognition is not strictly required
for movables, it remains standard practice to apply for it. In contrast, immovable property
is governed by the lex situs – the law of the country where the immovable property is
situated. A foreign trustee may only administer such property once formally recognised
by a South African court, which exercises an absolute discretion grounded in comity and
convenience. This discretion applies to all aspects of cross-border estate administration,
including convening meetings under the Act. Recognition is available only where the
insolvent was domiciled in the foreign state at the time of sequestration. Recognition
would allow the foreign trustee, after the final distribution of Mr Scheer’s South Afr ican
would allow the foreign trustee, after the final distribution of Mr Scheer’s South Afr ican
insolvent estate under s 113 of the Act, to transfer any surplus funds from the South
African estate to the Austrian estate for the benefit of creditors in Austria.
3 Ex Parte Palmer NO: In re Hahn 1993 (3) SA 359 (C) ; See also: Lagoon Beach Hotel v Lehane [2015]
ZASCA 210; [2016] 1 All SA 660 (SCA); 2016 (3) SA 143 (SCA) para 27.
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[23] Third, recognition is discretionary but will generally be granted if it does not
prejudice the interests of local creditors or contravene mandatory local insolvency rules.
Local courts may impose conditions to protect domestic priorities, such as the ranking of
claims and the rights of secured creditors.
[24] In interpreting s 116 of the Act, the following principles should be borne in mind.
The approach to statutory interpretation in our law is well established. This Court in the
often-cited authority, Natal Joint Municipal Pension Fund v Endumeni Municipality 4
confirmed that interpretation is “a unitary exercise” , which entails attributing meaning to
the words used in a statute by considering (a) the ordinary rules of grammar and syntax;
(b) the context in which the provision appears; (c) the apparent purpose of the provision;
and (d) the material known to those responsible for its production. This Court emphasised
that a sensible construction is to be preferred over one that is insensible or
unbusinesslike.
[25] The Constitutional Court expanded on these principles in Cool Ideas 1186 CC v
Hubbard and Another ,5 where it reaffirmed that statutory interpretation begins with the
words themselves, which must ordinarily be given their plain grammatical meaning. At the
same time, the Constitutional Court stressed that this cannot be done in isolation, and
that in addition to context and purpose, meaning must also be informed by constitutional
values.
[26] Another important interpretative principle of our law is the presumption that
statutes do not alter the common law more than is necessary. Legislation must therefore
be interpreted in the light of the common law; must as far as possible be reconciled with
related precepts of the common law; and must therefore be read to be capable of co -
existing with common law in pari materia (in a similar matter ).6 This presumption
existing with common law in pari materia (in a similar matter ).6 This presumption
4 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; [2012] 2 All SA 262 (SCA);
2012 (4) SA 593 (SCA).
5 Cool Ideas 1186 CC v Hubbard and Another [2014] ZACC 16; 2014 (4) SA 474 (CC); 2014 (8) BCLR 869
(CC) at para 28.
6 S v Leeuw 1980 3 SA 815 (A) 823F-G.
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enhances legal certainty and continuity by discouraging unintended disruption of
established common -law doctrine. It follows that a statute will be taken to modify or
abolish the common law only where the legislature has expressed such intention in clear
and unambiguous terms, or where such alteration follows by necessary implication.
Courts therefore endeavour, as far as the statutory language permits, to construe
legislation in a manner that permits it to coexist harmoniously with the common law.7
[27] The presumption against altering the common law sits alongside the broader
constitutional imperative. Section 39(2) of the Constitution obliges courts, when
interpreting legislation, to promote the spirit, purport and objects of the Bill of Rights.
Where a statutory provision is reasonably capable of more than one meaning, the
interpretation that best aligns with constitutional values must be preferred.
[28] These interpretive principles inform the present matter in two ways. First, s 116 of
the Act must be read against the common -law framework governing cross -border
insolvency and the recognition of foreign trustees. The presumption against altering the
common law, together with the purposive approach, requires that s 116 be reconciled with
the principles of comity and the court’s inherent discretion to recognise and assist foreign
office-holders where local creditors are protected and local mandatory rul es are
respected.
[29] Second, on a purposive and harmonious reading of s 116, the term ‘surplus’ cannot
be understood in isolation from the universal administration of the insolvent’s estate
where the foreign trustee has been recognised and a deficit persists abroad. The high
court’s conclusion, which correctly found that funds remaining after local distributions are
made do not constitute a ‘surplus’ in the sense contemplated by s 116 while the foreign
estate remains in deficit, must be understood in this context.
estate remains in deficit, must be understood in this context.
7 Casserley v Stubbs 1916 TPD 310-312 per Wessels J. See also: Bills of Costs (Pty) Ltd v The Registrar,
Cape 1979 4 All SA 585 (A); 1979 3 SA 925 (A) 942D-E; Law Society of the Cape of Good Hope v C 1986
4 All SA 51 (A); 1986 1 SA 616 (A) 639E.
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[30] The approach to interpreting s 116, as advanced by Mr Scheer, leads to results
that are both impractical and unreasonable. During argument, Mr Scheer’s counsel
acknowledged that even on Mr Scheer’s interpretation, any entitlement to the surplus
would only arise after he had been rehabilitated. Furthermore, it was conceded that
rehabilitation would remain unavailable to him for as long as a deficit persisted in his
Austrian estate. This interpretation thus produces an anomalous outcome: neither
Mr Scheer, Mr Wagner, nor the Austrian creditors could assert a claim to the surplus. The
result will be that the surplus would effectively remain beyond the reach of everybody for
an indefinite period. Counsel for Mr Scheer described this anomaly as representing a
lacuna in the statutory scheme of the Act. In my view this submission is untenable.
[31] It seems to me that the potential anomaly arising from the contended interpretation
of s 116 is avoided by the application of well -established common law principles. These
principles have evolved specifically to prevent such anomalous outcomes and ensure a
coherent approach to cross -border insolvency. Under the common law, when a foreign
trustee is duly appointed to administer the insolvent estate in the country of the insolvent’s
domicile, that trustee is entitled to claim any surplus in the South African estate that is not
required to settle claims of South African creditors.
[32] This approach has significant implications. First, it guarantees that the interests of
South African creditors are prioritised, ensuring that their claims are satisfied before any
surplus is distributed elsewhere. Second, any remaining surplus after local creditors have
been paid is directed towards the settlement of outstanding obligations to Austrian
creditors, thus addressing the cross-border nature of the insolvency. Finally, if there is still
a surplus after all Austrian claims have been settled, Mr Scheer is entit led to claim
a surplus after all Austrian claims have been settled, Mr Scheer is entit led to claim
whatever remains. Accordingly, the surplus in Mr Scheer’s estate, following final
distribution in South Africa, cannot be regarded as a surplus for the purposes of s 116 of
the Act, but is governed by the relevant common law dispensation.
[33] Moreover, it is clearly in Mr Scheer’s best interests that any surplus remaining in
his South African estate , after the satisfaction of local creditors , be applied to the
13
settlement of his outstanding obligations to Austrian creditors. Should this not occur,
Mr Scheer would remain subject to the ongoing consequences of insolvency in Austria,
effectively placing him under the persistent burden of insolvency for an indefinite period.
[34] The argument that there is uncertainty regarding Mr Scheer’s entitlement under
Austrian law to any balance remaining after the satisfaction of his Austrian creditors , is
untenable. The legal position on this issue has been established and clarified by
Mr Wagner, who provided a reasoned explanation of the relevant provisions of Austrian
law. Notably, there was no evidence presented to challenge or contradict Mr Wagner’s
assertions in this regard.
[35] For the above reasons I am of the view that on a plain reading, s 116 does not
provide for the situation which has arisen in this case. The section clearly regulates
circumstances where there is no foreign insolvent estate in which a shortfall exists. The
section neither explicitly states that it is the intention of the legislature to alter the common
law, nor can an inference be drawn that the legislature had such an intention.8
[36] Therefore, s 116 of the Act is not applicable in circumstances where, after the
distribution of assets in a South African insolvent estate, a surplus remains while a
shortfall persists in the insolvent estate in the individual’s country of domicile. In such
situations, the common law principles prevail and provide the applicable legal framework.
The high court correctly concluded that a surplus, as contemplated by s 116, cannot exist
if there is still a deficit in a foreign insolvent estate, particularly where the foreign trustee
has been recognised in South Africa. This interpretation is consistent with the established
common law principles.
[37] In considering whether the application was premature, I agree with the reasoning
adopted by the high court. As I have stated earlier, Mr. Scheer acknowledged the
adopted by the high court. As I have stated earlier, Mr. Scheer acknowledged the
existence of a shortfall in the Austrian estate. Although there is some disagreement
8 Ibid.
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regarding the precise extent of this shortfall, both parties accept that it will be substantial.
In any event, the judgments of the Vienna Regional Court of Austria , which have been
admitted into evidence, are objective confirmation that all outstanding disputes regarding
creditors’ claim have been finally resolved. At the same time, it is also undisputed that
there will be a surplus in the South African estate after the completion of distributions to
local creditors. Against this background, Mr Scheer cannot be heard to complain about
prejudice because the application was brought prior to the final determination of the
Austrian shortfall or the finalisation of the administration of his South African estate.
[38] For all these reasons, the appeal must fail. In the result the following order issues:
1 The respondent is granted leave to adduce further evidence on appeal. The judgments
of the Vienna Higher Regional Court of Austria, which are attached to the respondent’s
application to adduce further evidence, are admitted into evidence.
2 The respondent is to pay the costs of the application to adduce further evidence.
3 The appeal is dismissed with costs including the costs of two counsel, where so
employed.
________________
J E SMITH
JUDGE OF APPEAL
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Appearances:
For the appellant: A Brown and RJ Steyn
Instructed by Goussard & Otto Inc, Somerset West
McIntyre Van der Post, Bloemfontein
For the respondents: S Symon SC and M Maddison
Instructed by: Cox Yeats Attorneys, Johannesburg
Symington De Kok, Bloemfontein.