Rescinding a Final Sequestration Order in South Africa – Section 149(2) of the Insolvency Act Explained

If your estate has been sequestrated, you may have heard about applying to “rescind” the order. While this is legally possible under Section 149(2) of the Insolvency Act, it’s not an easy route, and it’s often misunderstood.

This article explains what rescission is, when it might apply, and why, in many cases, the better option is rehabilitation.

What is Rescission?

Rescission is when the court sets aside or changes an order it has previously granted. In the context of insolvency, it means asking the court to cancel your sequestration order.

The law allows this, but only in exceptional circumstances. The court must be persuaded that it is fair and just to undo the order. This is not a second chance to argue your case, it’s only for situations where something went seriously wrong in the original process.

When Can You Apply?

You need to show:

• Exceptional circumstances – for example, if the order was obtained in error, there was a serious procedural defect, or there was fraud.

• A valid reason why you didn’t oppose the sequestration in the first place.

• A genuine defence – something that, if it had been presented originally, could have changed the outcome.

Simply saying you can now pay your debts, or that you were unhappy with your lawyer, is rarely enough.

Why Rehabilitation May Be the Better Option

In many cases, especially if some time has passed and the estate has been wound up, the courts will say the correct step is to apply for rehabilitation instead. Rehabilitation ends the sequestration and restores your legal status as if you were never insolvent.

If rehabilitation is possible soon, a rescission application is unlikely to succeed. The court avoids unravelling years of work done by the trustees and the Master of the High Court.

Act Quickly

If rescission is a realistic option, you must act without delay. Waiting months — or years — before applying almost always leads to refusal. You must also notify the trustee, creditors, and the Master before the court will even consider the application.

Practical Tips

1. Get legal advice immediately to decide if rescission or rehabilitation is the right route.

2. Prepare clear evidence of exceptional circumstances.

3. Don’t rely on the application as a way to “re-argue” your case — this is not an appeal.

The Bottom Line

Rescinding a sequestration order is possible, but only in rare cases where the court is convinced it should never have been granted. For most people, rehabilitation is the more practical and achievable solution. If you’re in this position, the most important step is to act quickly and get the right legal guidance.