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[2018] ZAWCHC 140
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P.P v M.P (11672/2017) [2018] ZAWCHC 140 (6 November 2018)
SAFLII
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Certain
personal/private details of parties or witnesses have been
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IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
number: 11672/2017
In
the matter between:
P
P
Applicant
and
M
P
Respondent
Coram
:
Justice J Cloete
Heard
:
16 August 2018, judgment reserved on 28 August 2018 after parties
advised settlement negotiations had failed.
Delivered
:
6 November 2018
JUDGMENT
CLOETE
J
:
[1]
The parties were divorced on 26 November 1991. In clause 3 of their
Consent Paper, the applicant undertook to maintain the respondent
until her death or remarriage, whichever occurred first. The cash
portion of the maintenance was agreed at R2 500 per month.
Clause 4 provided that this would increase annually on the
anniversary of the divorce at the fixed rate of 12% per annum but
that
‘
notwithstanding the aforegoing, either party may apply
to vary the said maintenance payable on good cause shown’.
[2]
The applicant has approached
court in terms of s 8 of the Divorce Act
[1]
which reads in relevant part as follows:
‘
8.
Rescission, suspension or variation of orders.-
(1)
A maintenance order… made in terms of this Act, may at any
time be rescinded or varied… if the court finds
that there is
sufficient reason therefor.’
[3]
The applicant does not rely on inability to afford the maintenance or
on a deterioration in his financial circumstances. He
only seeks to
vary the annual escalation fixed at 12% per annum on the cash
component to an annual escalation in accordance with
the Consumer
Price Index (“CPI”).
[4]
When the applicant agreed to
the annual 12% escalation in 1991 the prime lending rate was 21% per
annum and the CPI over the following
year (December 1991 to November
1992) was 9.6% per annum. He alleges that the R2 500 per month
cash maintenance was considered
by the parties as sufficient to cover
the respondent’s reasonable and actual needs in 1991 (excluding
her accommodation and
almost all of her medical expenses which the
applicant also agreed to pay).
[2]
This allegation is admitted by the respondent, who merely contends
that the applicant is an astute businessman who was legally
represented, was fully apprised of the significance of each provision
of the Consent Paper and ‘
went
into the agreement with his eyes open’.
She denies that the applicant, as he alleges, failed to appreciate
the future effect of the annual escalation provision over time.
[5]
The monthly amount currently paid by the applicant (i.e. R2 500
plus the 12% annual escalation) is R47 767.73. This
will
increase to R53 499.86 per month on 26 November 2018. It is
common cause that the respondent has a fully paid home
in Bantry Bay.
The applicant alleges that it is worth in excess of R15 million.
This allegation was met with a bald denial
by the respondent who
elected not to disclose any details of her assets and liabilities or
income and expenses.
[6]
It is the applicant’s case that the annual fixed escalation of
12% (which is of course compounded) has meant that, given
the common
cause fact of the respondent’s reasonable needs at the time of
divorce, the monthly amount paid by him far exceeds
what her current
reasonable needs should be. By comparison, had the cash component
been linked to an annual CPI escalation, the
applicant would
currently pay R12 870 per month. The respondent concedes that
the increases she has received over the years
have exceeded the
inflation rate. Importantly, the applicant only seeks a variation of
the annual escalation as from 26 November
2018 which means that,
if granted, the respondent will continue to receive R47 767.73
per month escalating annually in accordance
with the CPI at her
current age of 67 years.
[7]
The applicant previously
approached the maintenance court in 2016 but the maintenance officer
refused to entertain his application
on the erroneous basis that he
had not supported it with full information concerning his own
financial position, despite the fact
that this was irrelevant, given
that his ability to pay was not in issue. In
Havenga
v Havenga
[3]
it was held that the magistrate’s view that there had to be a
material change in circumstances before he could hear the matter
was
incorrect; the presence or absence of changed circumstances was not a
statutory jurisdictional fact; and parties were therefore
entitled to
agree that this procedural requirement would not be applicable to
them. It also found that the appropriate remedy which
should have
been employed was a review of the magistrate’s decision and not
an appeal. However in the present matter the
parties specifically
agree that neither wishes to approach the maintenance court any
further.
[8]
In the maintenance court the
applicant was provided with the statutory Form J107 E for
completion, which required him to set
out why ‘
good
cause/reason’
exists
for a substitution of the existing maintenance order as contemplated
in s 6(1)(b) of the Maintenance Act
[4]
.
[9]
The explanation he provided was as follows:
‘
The
cash amount payable by the deponent as and for maintenance has for
the past 25 years artificially been increased annually in
terms of
the High Court Order, at 12% per annum, a percentage vastly in excess
of a rate equal to the annual Consumer Price Index,
when the needs of
the said M P have not increased at such a rate over the past 25 years
and will not in future increase annually
at such a rate.
Future
automatic and unsubstantiated increases at 12% per annum, without
good cause being shown for such increases, will be unjust
to the
deponent and it would be unfair to the deponent that the High Court
Order, as granted on 26
th
of November 1991, should be allowed to stand and remain in force in
its original form, thereby enriching the said M P at the expense
of
the deponent.’
[10]
The parties are
ad idem
that there is no precise definition of
‘
sufficient reason’
or ‘
good cause’
and that this depends upon the particular circumstances of each case.
[11]
There is not a single averment in the respondent’s answering
affidavit that she reasonably requires cash maintenance
of R47 767.73
per month as currently paid by the applicant. She simply denies the
applicant’s averment that her current
standard of living is
higher than it was during the marriage because of an artificially
increased cash component.
[12]
The respondent’s case is that the application should be
dismissed because:
12.1 The applicant wishes to have this
court interfere with the bargain struck between them by making ‘
a
new agreement’.
This allegedly entails the variation of one
provision while at the same time retaining all others such as ‘
the
provision that I would have no further claims against him’
;
and
12.2 The increase in the cash
component as a result of the 12% fixed annual escalation cannot be
described as ‘
significant’
. No explanation was
provided by the respondent for this bald assertion other than that
‘
the calculation of an abstract inflation-based increase is
irrelevant to this application… moreover, there is no absolute
right to base a maintenance increase on the Consumer Price Index’
,
although she admits the purpose and nature of the CPI ‘
in
general terms’
.
[13]
The respondent’s counsel correctly submitted that the principle
of
pacta sunt servanda
applies equally to divorce settlement
agreements. For present purposes however it is worth considering the
context in which this
principle was applied in the judicial decisions
relied upon by the respondent.
[14]
In
Claassens
v Claassens
[5]
the Consent Paper provided that the husband was to pay his wife a
fixed amount in cash plus a monthly amount as maintenance. There
was
a further clause which stipulated that the wife ‘
will
not be entitled to apply for an increase’
in the monthly amount. She applied for an increase and it was held
that she was precluded from doing so by virtue of her express
waiver.
[15]
In
Reid
v Reid
[6]
the husband agreed in the Consent Paper to pay a monthly amount of
maintenance to his wife. About two years after the divorce he
applied
for a reduction in the amount payable, contending that he had agreed
to an unjust settlement and that since the divorce
his financial
situation had deteriorated substantially. After the maintenance court
had granted a reduction the appeal court confirmed
the magistrate’s
decision, but on the basis that the husband had indeed established a
deterioration in his financial circumstances
since the divorce.
However it also held that s 8(1) of the Divorce Act should be
construed so as to affect the operation of
the
res
judicata
rule as little as
possible; that to allow an ex-spouse to freely attack the justness of
a divorce order without showing special
circumstances could open the
door to abuse of the court process, and that in respect of his
complaint that he agreed to an unjust
settlement, no special
circumstances had been proven.
[16]
In
Botha
v Botha
[7]
the husband agreed in the Consent Paper to pay the wife R8 500
per month maintenance for an unspecified period. The husband
applied
to the maintenance court for a reduction and the parties settled on a
reduced amount. The husband thereafter applied to
the High Court for
an order limiting the period of his maintenance obligation to 5 years
from the date of first payment, suggesting
that the parties had
intended that he would only pay rehabilitative maintenance to the
wife. The latter disputed this. The court,
following
Cohen
v Cohen
,
[8]
found that the implicit indefinite duration of the maintenance
obligation continued to exist, notwithstanding the reduction in
the
quantum of that obligation. The court also held that:
‘
The
order of the Court obliging the applicant to pay maintenance for the
respondent had its origin in an agreement solemnly entered
into
between the parties in contemplation of their divorce. In this
regard, there is a helpful article directly in point by H R
Hahlo
‘
Pacta
Sunt Servanda’
(1966)
83 SALJ 4.
It is a well-known fact that, depending on a change in
circumstances, the
amount
contained
in an order of this kind may be varied up or down. The parties knew
or ought to have been aware of this fact when they
entered into the
agreement. Quite apart from anything else, the ravages of inflation
always skulk in such matters. The applicant’s
fortunes may
change for the better as may the respondent’s for the worse.
Changes of such a nature may, of course, justify
a further variation
of the order by the maintenance court…’
[9]
[17]
In
Georghiades
v Janse van Rensburg
[10]
the ex-wife sought an extension of the period for which the
ex-husband was to maintain her in their Consent Paper from 3 years
to an indefinite period on the ground of her alleged ill-health.
Clause 7 of their Consent Paper stipulated that the provisions
contained therein were ‘
in
full and final settlement of all present and future property and
financial claims which either of them may have against the other’.
[18]
Dismissing the application, the court held that:
‘
[15]
…Generally speaking, our courts accept that circumstances must
have changed substantially and that it would be unfair
to allow the
order to stand in its original form before rescission, variation or
suspension of an existing maintenance order will
be granted. In
Havenga v Havenga
,
however, Harms J pointed out that, although, in general, there will
not be sufficient reason for the variation or rescission of
a
maintenance order in the absence of a real change in circumstances,
changed circumstances are not a statutory prerequisite and
there may
sometimes be sufficient reason although circumstances have not
changed.
[16]
In considering whether or not sufficient reason for variation of the
present maintenance order has been shown, it is important
to bear in
mind that the order in question is contained in a consent paper,
which was made an order of court at the time of divorce.
The consent
paper deals not only with
“
the
payment of maintenance by the one party to the other”
,
as contemplated by s 7(1) of the Act, but also with,
inter
alia
,
“the
division of the assets of the parties”
.
As such, it constitutes a composite, final agreement entered into by
the parties, purporting to regulate
all
their rights and
obligations
inter se
upon divorce. For the
Court now to interfere in that arrangement by varying one component
of the agreement, while leaving the balance
of the agreement intact,
would fly in the face of the time-hallowed principle that
“(t)he
court cannot make new contracts for parties; it must hold them to
bargains into which they have deliberately entered”.
The
principle of
pacta
sunt servanda
is
equally relevant in this context.’
[19]
As is evident from the above decisions, it was only in those cases
where there was an express agreement that the maintenance
payable,
whether in terms of amount or duration, could not be varied that the
parties were held to the principle of
pacta sunt servanda
.
This makes sense because they agreed to a composite package deal.
[20]
The respondent’s counsel submitted that, read as a whole, the
provisions of the Consent Paper show that the parties intended
a
package deal because clause 10 provides that the settlement is ‘
full
and final’
. However clause 10 itself also contains the
express provision that ‘
save and except as herein provided,
neither party shall enjoy any claim of whatsoever nature against the
other’.
Clearly therefore the package deal was subject to a
variation in the maintenance payable for sufficient reason or on good
cause
shown. Given that the fixed annual 12% escalation forms an
integral part of the maintenance, it follows that this too is subject
to such variation.
[21]
It was also submitted on behalf of the respondent that it was
incumbent on the applicant to show, not only with reference to
his
own financial position but also that of the respondent, that the
variation sought is justified. That it was not required of
the
applicant to rely on a deterioration in his own financial
circumstances was made clear in
Havenga
(
supra
).
Moreover, it is difficult to conceive how the applicant was to have
disclosed full details of the respondent’s financial
position
26 years after their divorce.
[22]
As previously stated, the respondent did not even allege in her
answering affidavit that the amount currently paid by the applicant
is reasonably required for her maintenance needs. Nor did she attempt
in the slightest to deal with the material issue, namely
why a
continuation of the fixed annual 12% escalation is reasonably
necessary for her future maintenance needs.
[23]
The closest one comes to any allegation of this kind is in a letter
from the respondent’s attorneys dated 9 November
2016
where it was stated that:
‘
My
client is not agreeable to any reductions towards her personal
maintenance, of neither the capital monthly amount nor the annual
increase. She reasonably requires the sum payable in terms of the
Consent Paper signed by the parties for her monthly expenses.’
[24]
This letter was annexed to the applicant’s founding affidavit
and the above paragraph expressly quoted therein. In her
answering
affidavit the respondent dealt with this paragraph as follows:
‘
47.
I admit the exchange of correspondence.
48.
Insofar as the contentions raised by Applicant in his correspondence
and in these paragraphs are at odds with the contents of
this
affidavit, such contentions are denied.’
[25]
In
Wightman
t/a JW Construction v Headfour (Pty) Ltd and Another
[11]
the Supreme Court of Appeal, referring to the Plascon-Evans rule,
stated that:
‘
[13]
A real, genuine and bona fide dispute of fact can exist only where
the court is satisfied that the party who purports to raise
the
dispute has in his affidavit seriously and unambiguously addressed
the fact said to be disputed. There will of course be instances
where
a bare denial meets the requirement because there is no other way
open to the disputing party and nothing more can therefore
be
expected of him. But even that may not be sufficient if the fact
averred lies purely within the knowledge of the averring party
and no
basis is laid for disputing the veracity or accuracy of the averment.
When the facts averred are such that the disputing
party must
necessarily possess knowledge of them and be able to provide an
answer (or countervailing evidence) if they be not true
or accurate
but, instead of doing so, rests his case on a bare or ambiguous
denial the court will generally have difficulty
in finding that
the test is satisfied. I say “generally” because factual
averments seldom stand apart from a broader
matrix of circumstances
all of which needs to be borne in mind when arriving at a decision. A
litigant may not necessarily recognise
or understand the nuances of a
bare or general denial as against a real attempt to grapple with all
relevant factual allegations
made by the other party. But when he
signs the answering affidavit, he commits himself to its contents,
inadequate as they may
be, and will only in exceptional circumstances
be permitted to disavow them. There is thus a serious duty imposed
upon a legal
adviser who settles an answering affidavit to ascertain
and engage with facts which his client disputes and to reflect such
disputes
fully and accurately in the answering affidavit. If that
does not happen it should come as no surprise that the court takes a
robust
view of the matter.’
[26]
To my mind, the respondent’s approach to the allegations in the
founding affidavit is of the type referred to in
Wightman
(
supra
).
She has failed to raise a real, genuine and
bona fide
dispute
of fact in circumstances where those facts self-evidently lie purely
within her own knowledge. She has also laid no foundation
for her
bare denials.
[27]
I am persuaded that the applicant is not attempting to evade his
obligation to pay lifelong personal maintenance to the respondent.
He
remains willing to meet the obligation to which he agreed in 1991. He
has maintained the respondent for the past 27 years and
has clearly
indicated that he will continue to do so. He has undertaken to
continue to meet her reasonable living expenses, and
an adjustment to
the annual increase as sought will undoubtedly achieve this. It is
common cause that the 12% fixed annual escalation
has meant that the
maintenance received by the respondent has consistently exceeded
inflation or, put differently, the cost of
living over the past 27
years.
[28]
Having regard to the aforegoing, I am also persuaded that the
applicant has shown sufficient reason for a variation in the
annual
escalation of the maintenance payable to the respondent. I am,
however, mindful of the fact that, although at the time of
divorce in
1991 the prime lending rate was 21% per annum, the CPI for the year
that immediately followed was 9.6% per annum. Adopting
a robust
approach (as foreshadowed in
Wightman
(
supra
)), it
appears to me that a just and equitable escalation should be the CPI
plus 2.4%, which for convenience I will round up to
2.5%, i.e. the
agreed escalation in the Consent Paper of 12% less the CPI of 9.6%
for the year that immediately followed. This
will be subject to a
maximum escalation of 12% in any given year.
[29]
Neither party has been wholly successful. There is no question that
the applicant can pay his own legal costs. The appropriate
costs
order is the one that follows.
[30]
In the result the following order is made:
1.
The Consent Paper
incorporated in the parties’ Final Order of Divorce in the
Supreme Court of South Africa (Cape of Good Hope
Provincial Division)
on 26 November 1991 under case number 12960/1990 is varied as set
forth hereunder.
2.
By the insertion
of the words ‘
subject to clause 4 below’
at the beginning of the first unnumbered paragraph in clause 3.
3.
By the deletion of
clause 4 in its entirety and by replacement thereof with the
following clause:
‘
4.1 The maintenance paid
by Plaintiff to Defendant in the current amount of R47 767.73
shall be adjusted annually with effect
from 1 December 2018 by the
percentage change in the Consumer Price Index plus 2.5%, but subject
to a maximum escalation in any
given year of 12%;
4.2 For purposes hereof, the
Consumer Price Index is the headline Consumer Price Index as notified
by Statistics SA in respect of
the Republic of South Africa for the
preceding 12 months. Such percentage change shall for purposes of
convenience be deemed to
be equal to the latest index available from
Statistics SA on the internet on the date of adjustment.’
4.
There shall be no
order as to costs.
____________________
J
I CLOETE
[1]
Act 70 of 1979.
[2]
Clauses 3 and 6 of the Consent Paper.
[3]
1988 (2) SA 438 (TPD).
[4]
Act 99 of 1998.
[5]
1981 (1) SA 360
(N).
[6]
1992 (1) SA 443 (E).
[7]
2005 (5) SA 228 (W).
[8]
2003 (3) SA 337 (SCA).
[9]
At 234B-D.
[10]
2007 (3) SA 18
(CPD).
[11]
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA).