Maseko v Maseko,[1] heard in the Witwatersrand Local Division by Lazarus AJ from 22 to 25 October, 1990, with judgment handed down on 16 November, is an important case in South African contract law, with its stipulation, on the question of legality, that contracts designed to mislead creditors are immoral and against public policy.
The essence of the remedy is that there should be a valid legal transaction from which the court will in certain circumstances grant relief by avoiding it ab initio.
The plaintiff acquired a certificate of occupation of certain property in Soweto, whereafter she signed as surety for two purchasers of motor vehicles.
While there could be no fraudem creditorum without proof of actual prejudice, an agreement designed to mislead creditors was immoral and against public policy, even if it had not yet served its purpose.
As to the remedy of restitution based on the transfer's being void ab initio, the court held that the parties were in pari delicto: If an order in favour of the plaintiff were not made, the defendant would be substantially enriched at the plaintiff's expense; if the order were made, the Court would be enforcing indirectly an illegal contract.
As it could not be said that evidence relevant to the setting aside of the order had been fully canvassed, the court found that it could not grant such relief.