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[2020] ZAWCHC 35
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N.C.O and Another v D.O and Another (A244/2019) [2020] ZAWCHC 35 (12 May 2020)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
no: A244/2019
Court a quo case numbers: 11045/2013
21628/2014
21629/2014
In
the matter between:
N
C
O
First
Appellant
APPLE
TREE GUEST HOUSE
CC
Second
Appellant
v
D
O
First
Respondent/Cross-Appellant
STELLENBOSCH
MUNICIPALITY
Second
Respondent
Coram:
Justice J Cloete, Justice L Nuku
et
Justice E D Wille
Heard:
31 January 2020 – supplementary notes delivered on 14 and 26
February 2020
Delivered
electronically:
13 May 2020
JUDGMENT
CLOETE
J (NUKU
et
WILLE JJ CONCURRING)
:
Introduction
[1]
This appeal and cross-appeal
are before us with leave granted by the trial court on 28 June 2018.
Mrs N C O (as plaintiff) issued
summons against Mr D O (as defendant)
on 12 July 2013 for a decree of divorce and further relief. After
protracted and acrimonious
litigation, including two opposed
applications by Mr D O to evict Mrs N C O from her residence
(‘
the Digteby
property’
) and her
guesthouse business (Apple Tree Guest House CC) from another property
(‘the P Street
property
’)
[1]
,
the trial court handed down judgment, including the following order,
on 15 May 2018:
‘
(i)
a decree of divorce is granted;
(ii)
a property partnership existed between the parties in respect of the
Digteby property.
(iii)
the property partnership in respect of the Digteby property be
liquidated, and that the partnership estate be divided between
the
parties equally.
(iv)
A practicing chartered accountant to be nominated by the chairperson
of the South African Institute of Chartered Accountants
(which person
is hereinafter referred to as “the liquidator”) is hereby
appointed to liquidate the partnership and
who shall:
(a)
Determine the net value of all the partnership assets as at date of
dissolution; and
(b)
To sell or distribute the assets of the partnership between the
parties or pay to either party such money as may be necessary
so that
each party is possessed of assets and/or money equal in value to
his/her 50% share of the partnership estate.
(v)
For the purposes of giving effect to paragraph (iii) above, the
liquidator shall have the powers and duties as set out in Annexure
“A” hereto.
[2]
(vi)
The defendant is ordered to pay the plaintiff R15 000.00 per
month as maintenance until her death, remarriage or until
she
commences living with a romantic partner.
[3]
(vii)
The amount of R15 000.00 shall increase on each anniversary date
of the final order of divorce in accordance with such
increase as may
have occurred in the consumer price index in respect of the Republic
of South Africa, as notified by the Director
of Statistics or his
equivalent for the persons in the middle income group.
(viii)
Until such time as the partnership assets have been wound up by the
liquidator, the plaintiff shall be entitled to remain
in occupation
of the Digteby property provided that the plaintiff shall make
payment of the mortgage bond instalments over the
properties
[sic]
but which will be
credited to the plaintiff’s account and taken into account when
the partnership is liquidated.
(ix)
The eviction application brought under WCHC C/No. 21629/2014
[the Digteby property]
is
dismissed with costs.
(x)
The eviction application in terms of WCHC C/No. 21628/2014
[the
P Street property]
is
postponed sine die. The defendant may reissue the guest house with a
fresh notice of termination of authority to occupy the P
street
property and afford it a reasonable period, not less than 6 calendar
months, to vacate the property.
(xi)
Should the guest house fail to vacate the P street property after
receiving the notice of termination of authority then the
defendant
may approach this court for an eviction order on the same papers,
duly supplemented, if needs be.
(xii)
Costs of this divorce action shall be payable by the defendant on a
party-party scale.’
[2]
On 5 June 2018 the parties
delivered their respective notices for leave to appeal. On the same
date Mrs N C O brought an application
in terms of uniform rule 42, in
which she contended that there were various patent omissions in the
order of 15 May 2018 and thus
sought additional relief. In essence,
she asked for the costs of two opposed interlocutory applications in
the eviction matters
(which the parties agreed in an order granted by
Koen AJ on 23 March 2016 would stand over for determination at
trial)
[4]
;
declaratory orders that she owns the contents of the Digteby property
and that Apple Tree Guest House CC owns those at the P Street
property; and costs of the main action to include those of two
counsel as well as the qualifying fees of the three experts appointed
by her, namely Ms Hofmeyr (clinical and industrial
psychologist), Professor Terblanche (registered professional valuer)
and
Mr Charl Du Plessis of Munro Actuaries.
[5]
[3]
This application was opposed by Mr D O and on 28 June 2018 the trial
court handed down a further judgment in which it varied
its earlier
order to include the costs of two counsel and the qualifying fees of
Ms Hofmeyr and Munro Actuaries. It held that the
declaratory orders
sought in respect of the contents of the two immovable properties
‘…
is an issue best dealt with in an appeal process,
given the decision which the Court has made in respect of its finding
of property
partnerships and the eviction applications’.
The balance of the relief was refused and each party ordered to pay
their own costs of the application.
[4]
For convenience, and unless otherwise indicated, I will refer to Mrs
N C O as ‘
the plaintiff’
, Mr D O as ‘
the
defendant’
and Apple Tree Guest House CC as ‘
the
guest house’.
The Stellenbosch Municipality, which was
cited as second respondent in the eviction applications, elected not
to participate in
any of the proceedings and no further reference
will be made to it given the conclusion reached hereunder.
[5]
The order granting leave to
appeal and cross-appeal purported to limit the grounds of appeal to
those contained in the parties’
respective notices.
[6]
No reasons were provided, but in any event the remarks of Theron JA
(as she then was) in
Quartermark
Investments (Pty) Ltd v Mkhwanazi and Another
[7]
are apposite:
‘
[19]
At the hearing of this appeal, the court raised a ‘new issue’
with counsel, namely, whether Ms Mkhwanazi’s
claim ought to
have been based on the rei vindicatio. It does not appear that this
issue was dealt with by the parties in the high
court. It certainly
was not addressed in the judgment of the high court. After the
hearing of the matter, the parties were invited
to make further
submissions on whether the claim was vindicatory in nature and
whether this ‘new issue’ could be raised
at this stage of
the proceedings.
[20]
In considering the role of the court, it is appropriate to have
regard to the well-known dictum of Curlewis JA in
R
v Hepworth
to the
effect that a criminal trial is not a game and a judge’s
position is not merely that of an umpire to ensure that the
rules of
the game are observed by both sides. The learned judge added that a
‘judge is an administrator of justice’
who has to see
that justice is done. While these remarks were made in the context of
a criminal trial they are equally applicable
in civil proceedings and
in my view, accord with the principle of legality. The essential
function of an appeal court is to determine
whether the court below
came to a correct conclusion. For this reason the raising of a new
point of law on appeal is not precluded,
provided the point is
covered by the pleadings and its consideration on appeal involves no
unfairness to the party against whom
it is directed. In fact, in such
a situation the appeal court is bound to deal with it as to ignore it
may ‘amount to the
confirmation by it of a decision clearly
wrong’, and not performing its essential function. This in turn
would infringe upon
the principle of legality…’
[6]
The ‘new’ issue
which reared its head during the appeal pertains to the entitlement
or otherwise of the defendant to
enforce an accrual claim against the
plaintiff, if the result on appeal means that the plaintiff’s
estate has shown a greater
accrual than his estate. Although the
trial court found that ‘…
the
defendant has not pursued an accrual claim against the plaintiff’s
estate’
,
[8]
it made no order to this effect. In any event, given the legal
position, such an order would not have addressed the salient issue,
namely whether the defendant renounced such a claim as pleaded by the
plaintiff. This is what led to an invitation to counsel to
deliver
supplementary notes, which they duly did. I will return to this
later.
[7]
Apart from that issue, those central to the appeal and cross-appeal
relate to the trial court’s findings in respect of
the
existence or otherwise of a property partnership; the plaintiff’s
personal maintenance entitlement as well as the
dum casta
proviso;
the declarators in respect of the contents of the two immovable
properties; the eviction applications; and aspects pertaining
to
costs.
Relevant
Background
[8]
The parties were married to
each other on 8 December 2001 at Midrand, Gauteng, out of community
of property by antenuptial contract
incorporating the accrual system
specified in Chapter 1 of the
Matrimonial Property Act 88 of 1984
. At
the time the plaintiff, who has years of experience in the
hospitality industry, was 50 years old and already financially
dependent on the defendant who had set her up in a small tourism
business.
[9]
The defendant was 49 years old and a successful attorney and
businessman. No children were born of the marriage.
[9]
In the antenuptial contract the
plaintiff declared the commencement value of her estate to be
R200 000 and the defendant declared
his to be R7.5 million
although during his testimony he was unable to explain in a cogent
manner how he arrived at this figure.
[10]
In addition each party declared various assets to be excluded from
the accrual. Relevant for present purposes is the defendant’s
exclusion of his immovable property at […] P Street,
Stellenbosch (‘
the P
Street property’
).
[10]
In January 2003 the defendant received a windfall from one of his
business deals and a plot was purchased in Sandton and registered
jointly in the parties’ names. A residence was constructed
thereon, and the parties lived in this property as their matrimonial
home until a decision was made for the plaintiff to relocate to
Stellenbosch to run a guesthouse from the P Street property (the
idea
being that the defendant would follow her).
[11]
In January 2008 the plaintiff moved to Stellenbosch. The P Street
property was completely redeveloped and was being run as
a guesthouse
by the plaintiff and her son, M V, since about September 2008.
Although this property has remained registered in the
defendant’s
name, the guesthouse operation itself is conducted through the close
corporation, Apple Tree Guest House CC,
in which the plaintiff holds
a 51% members interest and M V 49%.
[12]
In
November 2008 a further plot was
purchased in Stellenbosch (the Digteby property) and, unbeknown to
the plaintiff, was registered
only in the defendant’s name at
his instance. It is however common cause that the net proceeds of the
sale of the Sandton
property (including the plaintiff’
s 50%
registered share) were later appropriated by the defendant towards
the cost of constructing a residence on the Digteby property.
Construction took place during 2011 and the plaintiff has been the
primary occupant of this property since about October 2011.
It is
these three properties which form the subject matter of the property
partnership dispute.
[13]
In her further amended particulars of claim the plaintiff pleaded as
follows:
‘
8.
During or about January 2003, and at or near Johannesburg, Plaintiff
and Defendant, each acting personally, concluded a tacit
agreement of
partnership with the following terms:
8.1
the parties would collaborate in the development of the properties in
paragraph 9 below with the common object of making a profit;
8.2
the Plaintiff would contribute her skills, labour and services to
such enterprise, and the Defendant would provide the necessary
capital investment; and
8.3
the enterprise would be carried on for the joint and equal benefit of
the Plaintiff and the Defendant who would use profits
to accumulate
assets.
9.
Pursuant to such agreement of partnership –
The
Sandton Property
9.1
The parties built a residential home at 12 Chateaux d’Vieux,
Sandton;
9.2
The Plaintiff contributed her skill, labour and services to the
development of the property;
9.3
The Defendant provided the capital investment and the property was
registered in both of the parties’ names;
9.4
The Sandton Property was sold for a profit in November 2010 and the
capital was reinvested in the development of 22 Digteby
Estate,
referred to below;
The
P Property
9.5
The parties redeveloped the property at P Street, Stellenbosch,
registered in Defendant’s name, from a residential dwelling
into a property for commercial purposes;
9.6
Plaintiff contributed her skill, labour and services to transform the
property;
9.7
The Defendant provided the capital investment for the redevelopment;
9.8
A commercial enterprise is conducted on the property by the Apple
Tree Guest House CC (Registration number: CK1997/048168/23)
of which
the Plaintiff has a 51% member’s interest and her son M V has a
49% member’s interest;
The
Digteby Property
9.9
The parties built a residential home at [...] Digteby Estate,
Vlottenburg Road, Stellenbosch, registered in the name of the
Defendant;
9.10
The Plaintiff contributed her skill, labour and services to the
development of the property;
9.11
The Plaintiff provided capital investment to the development
comprising:
9.11.1
Her proceeds from the sale of the Sandton Property;
9.11.2
her profits/salary from the Apple Tree Guest House;
9.12
The Defendant provided the remaining capital investment for the
development of the property;
10.
The parties developed such properties for their joint and equal
benefit, with the object of making a profit. Plaintiff avers
that the
assets of the partnership include the values of the following
immovable properties registered in the name of the Defendant:
10.1
Erf [...] Stellenbosch, in the Municipality and Division of
Stellenbosch, Western Cape Province (P Street, Dennesig,
Stellenbosch);
and
10.2
Erf [...] Vlottenburg, in the Municipality and Division of
Stellenbosch, Western Cape Province ([...] Digteby Estate,
Vlottenburg
Road, Stellenbosch); …
Forfeiture
12.
In the event that it is found that a property partnership existed
between the parties as contended for by the Plaintiff as referred
to
in paragraphs 8 – 10 above, and in which event the accrual in
the Plaintiff’s estate is greater than the accrual
in the
Defendant’s estate, then the Plaintiff pleads that the
Defendant formally agreed (as recorded in the pre-trial minute
dated
12 September 2016 and signed by both parties), that in his plea he
renounced
any right to claim payment from the Plaintiff of one half of the
difference of the accrual between the respective estates of the
parties, and therefore he will not enforce the terms of the
antenuptial contract…’
[emphasis
supplied]
[14]
In his consequentially amended plea, the defendant denied the
existence of a property partnership and further pleaded as follows:
‘
9.
AD
SUB-PARAGRAPHS 9.1 TO 9.4
[the
Sandton property]
9.1
In and during early 2003 and at Sandton, the parties acting
personally, entered into an oral agreement in terms whereof
the
defendant agreed to fund and acquire an immovable property in Sandton
on which their matrimonial home would be constructed
(“
the
Sandton property agreement
”).
9.2
The material express,
alternatively
implied,
further
alternatively
tacit terms and/or conditions of the Sandton property agreement were
as follows:
9.2.1
The immovable property would be registered in the joint names of the
parties;
9.2.2
The Defendant would pay all amounts in respect of the acquisition of
the immovable property and the development of the matrimonial
home
thereon;
9.2.3
The matrimonial home would be designed and constructed by the
necessary experts in the building industry;
9.2.4
Upon completion of the construction of the matrimonial home, the
parties would take occupation thereof;
9.2.5
In the event of the parties selling the property, the Defendant,
having taken the financial risk, would assume all the proceeds
including all profits, if any, derived therefrom.
9.3
Pursuant to the Sandton property agreement:
9.3.1
the Defendant identified a residential immovable property, namely Erf
623, Beverley Extension 40, situated at 12 Chateaux
d’Vieux,
Sandton, being sold off-plan based on plans and structural drawings
depicting a proposed residential dwelling to
be constructed thereon
by the developer (“
the
Sandton property
”);
9.3.2
on or about 20 May 2003, the Sandton property was registered in the
joint names of the parties;
9.3.3
the Defendant paid a deposit in respect of the Sandton property and
obtained a loan for part of the cost of the construction
of the
matrimonial home thereon, which loan was secured by the registration
of a mortgage bond against the Sandton property;
9.3.4
the developer, DRH Projects (Pty) Limited, constructed the
matrimonial home on the Sandton property;
9.3.5
the Defendant effected payments in respect of the construction of the
matrimonial home and the monthly repayments in respect
of the loan
referred to in paragraph 9.3.3 above;
9.3.6
the Plaintiff selected certain colour schemes, fixtures and fittings,
furniture and effects for the matrimonial home and the
Defendant paid
therefor;
9.3.7
upon completion of the construction and furnishing of the matrimonial
home, the parties took occupation thereof;
9.3.8
on or about 24 September 2010, the matrimonial home was sold and the
Defendant derived the proceeds thereof.
9.4
Save as aforesaid, the Defendant denies each and every remaining
allegation herein contained as if specifically traversed and
puts the
Plaintiff to the proof thereof.
10.
AD
SUB-PARAGRAPHS 9.5 TO 9.8
[the
P Street property]
10.1
The parties are married out of community of property, subject to the
accrual system.
10.2
At the time of the parties’ marriage, the Defendant was the
registered owner of an immovable property, namely Erf [...],
Stellenbosch situated at P Street, Stellenbosch (“
the
P Street property
”).
10.3
In terms of clause 5 of the antenuptial contract entered into between
the parties, a copy whereof is annexed to the Plaintiff’s
Particulars of Claim marked “
A
”,
it was agreed that certain assets owned by the Defendant would be
excluded in determining the accrual of his estate, which
assets
included
inter alia
the P Street property.
10.4
During or about 2007 and at Sandton, the parties, acting personally,
entered into an oral agreement (“
the
guesthouse agreement
”),
the material express,
alternatively
implied,
further
alternatively
tacit terms and/or conditions whereof were:
10.4.1
the Defendant would renovate the P Street property for the purpose of
a guesthouse business being conducted thereon;
10.4.2
the necessary experts in the building industry would be employed to
perform the necessary renovations;
10.4.3
the Plaintiff would select certain finishes, fixtures and fittings
and all furniture, effects and appliances required for
the conduct of
a guesthouse on the P Street property;
10.4.4
the Defendant would pay for the costs of the said renovation,
furniture, effects and appliances;
10.4.5
upon completion of the renovations and furnishing of the property,
the Plaintiff would:
10.4.5.1
rent from the Defendant and conduct the business of a guest house at
the P Street property;
10.4.5.2
pay:
10.4.5.2.1
the Defendant’s monthly mortgage bond instalments;
10.4.5.2.2
rates and taxes;
10.4.5.2.3
municipal costs;
in
respect of the P Street property until such time as the guesthouse
business derived a profit;
10.4.5.3
in addition to the rates and taxes and municipal costs, pay a
market-related rental to the Defendant from the date upon
which the
guesthouse business started deriving a profit;
10.4.5.4
contribute towards the parties’ joint household expenses from
the income derived from the guesthouse business.
10.5
Pursuant to the guesthouse agreement:
10.5.1
the Defendant appointed the necessary experts in the building
industry who duly renovated the P Street property for the purpose
of
a guesthouse business being conducted thereon;
10.5.2
the Plaintiff selected certain finishes, fixtures, fittings,
furniture, effects and appliances of her choice for the P Street
property;
10.5.3
the Defendant paid the costs of the renovations including the
furniture, fittings, effects and appliances selected by the
Plaintiff;
10.5.4
the Plaintiff:
10.5.4.1
as legally structured and as funded by the Defendant, conducted the
guesthouse business using a close corporation as the
vehicle to
conduct such business, namely Apple Tree Guest House CC (“
the
CC
”);
10.5.4.2
at her election, chose to allocate a 49% member’s interest in
the CC to her son Mr M V,
and
the Defendant paid for the acquisition, commercialisation and the
operation of the CC in order to assist the Plaintiff…
11.
AD
SUB-PARAGRAPHS 9.9 TO 9.12
[the
Digteby property]
11.1
The Defendant repeats paragraphs 9.1 to 9.3 above.
11.2
On or about 5 November 2008, the Defendant purchased an immovable
property, namely Erf [...] Vlottenburg, Stellenbosch, situated
at
[...] Digteby Estate, Vlottenburg, (“
the
Digteby property
”)
for the purpose of constructing thereon:
11.2.1
a matrimonial home to be occupied by the parties; and
11.2.2
an office from which the Defendant would conduct his law practice.
11.3
Pursuant to purchasing the Digteby property, the Defendant engaged
the necessary experts in the building industry to design
and
construct the envisaged matrimonial home and office referred to
above.
11.4
In and during 2009:
11.4.1
the Plaintiff had, unbeknown to the Defendant, formed an adulterous
relationship with Mr H J K (“
Mr
K
”),
whose full and further names are unknown to the Defendant, and had no
intention of occupying the Digteby property with
the Defendant;
11.4.2
the Plaintiff, unbeknown to the Defendant, intended to institute
divorce proceedings against the Defendant…
14.
AD PARAGRAPH 12
[Forfeiture]
14.1
At the pre-trial conference held on 7 September 2016 between the
Defendant and the legal representatives of the parties, the
Plaintiff’s legal representatives enquired whether the
Defendant intends to persist with a claim for payment by the
Plaintiff
to the Defendant of one-half of the difference between the
accrual of the respective estates of the parties in the event of the
above Honourable Court finding that a property partnership exists
between the parties (“the Plaintiff’s enquiry”).
14.2
In response to the Plaintiff’s enquiry the Defendant:
14.2.1
referred the Plaintiff to his plea to the Plaintiff’s
Particulars of Claim; and
14.2.2
pointed out that in his plea to the Plaintiff’s Particulars of
Claim he has not claimed payment from the Plaintiff
of one-half of
the difference between the accrual between the respective estates of
the parties,
(“the
Defendant’s response”).
14.3
The Plaintiff’s enquiry and the Defendant’s response are
recorded in paragraph 9.1 of the pre-trial minute dated
12 September
2016. Annexed hereto marked “
DP1
”
is a copy of the relevant page of the pre-trial minute comprising
paragraph 9.1 thereof.
14.4
Save as aforesaid, the Defendant denies each and every allegation
herein contained as if specifically traversed and puts the
Plaintiff
to the proof thereof.’
[15]
To this it must be added that,
in his plea, the defendant disavowed liability for any claim by the
plaintiff to the Digteby property
on the basis of the alleged
“fraudulent non-disclosure” of her relationship with Mr H
K. He also disavowed liability
for any claim by the plaintiff to the
P Street property, on the grounds of what he contended were breaches
of their agreement and
which amounted to a failure by the plaintiff
(and not the guesthouse) to pay expenses such as rental.
[11]
The
trial court’s credibility findings
[16]
In its main judgment the trial court found that neither party
impressed as witnesses, based on its view that the plaintiff
had a
tendency to adapt her version ‘
depending on whom her
audience was’
whereas the defendant ‘
was an
evasive and argumentative witness with some of the answers he
provided being illogical and coming across as contrived’.
The trial court’s finding in relation to the plaintiff appears
to have been based on the following paragraphs of the judgment:
‘
19.
In her unsolicited letter to the Femina magazine, the plaintiff
intimated that it was her decision to relocate to Stellenbosch
and to
open a guest house. In her evidence before me she testified that it
was the defendant’s idea that they open a guest
house and that
she agreed thereto because she was determined to please the
defendant.
20.
Furthermore, when she applied for vehicle financing, she furnished a
different schedule of her income and expenses to that furnished
in
respect of her claim for maintenance before me. The plaintiff
admitted that she was economical with the truth in this regard.
21.
When the plaintiff wanted money for an air-conditioner, she signed
off her letter to the defendant “From your hot family
in
Stellenbosch”. The plaintiff testified that “…I
was then very nice to him, because I wanted the money for
the
air-conditioning.” ’
[17]
Having reached this conclusion, the trial court stated:
‘
23.
Therefore, I relied heavily on the documentation placed at my
disposal and on the probabilities which were supported by common
cause facts in reaching the decisions which I have.’
[18]
It is thus apparent that the
trial court’s factual findings did not depend upon the parties’
credibility but rather
on inferences drawn from other facts. To this
extent it is permissible for us, as a court of appeal, to form a
different view on
credibility without first having to be convinced
that the trial court erred in this regard.
[12]
Assessment
of the relevant evidence against the trial court’s findings
[19]
The trial court refused the
qualifying fees of the plaintiff’s expert, Professor
Terblanche, on the basis that it ‘…
did
not find his evidence particularly helpful…he was clearly
biased…and the court did not depend or rely, nor was
the court
assisted in his evidence in coming to the decision and the orders
which it did’.
[13]
No reasons were given for the finding of bias and it is difficult to
detect any such bias on a reading of Terblanche’s testimony.
[20]
Before us it was undisputed that Terblanche is not only an expert,
but was also the only witness who gave evidence on the values
of the
immovable properties alleged to comprise the property partnership, as
well as the defendant’s farm in Tulbagh (the
latter was also
excluded from the accrual). Both parties adopted these values during
the trial.
[21]
Moreover the trial court must
have had regard to Terblanche’s evidence in reaching its
conclusion that the plaintiff was entitled
to maintenance of R15 000
per month, given its express reference to ‘
the
evidence presented’
and
s 7(2)
of the
Divorce Act 70 of 1979
[14]
which makes it incumbent upon a court, in the absence of a written
agreement between parties, to have regard
inter
alia
to their existing or
prospective means to determine an entitlement to maintenance,
including its quantum and duration. It is trite
that “means”
include not only income but assets.
[22]
With reference to his expert summary, Terblanche testified that the
Digteby property has a value of R5 million (excluding its
contents).
The P Street property, if sold together with the guesthouse (and its
contents) as a going concern, has a value of R7.2
million, whereas
without the guesthouse, its value (as a residential property only) is
R4.2 million. He valued the Tulbagh farm
at R4.3 million.
[23]
According to Terblanche
however, the guesthouse has no independent value if not “linked”
to an immovable property. No
expert evidence was led by the defendant
to refute this, and the defendant’s version that the guesthouse
would retain its
“value”
[15]
if operated from another, unidentified property, was rejected by
Terblanche:
‘…
I
can’t see it… that’s not my speciality but…
as far as I can see… and what I got from the
[financial]
statements,
there’s nothing else of value in the CC.’
[16]
[24]
In this regard, it is common cause that no formal lease was concluded
between the defendant and the guesthouse and therefore
no lease
exists to which a value could be attributed for purposes of selling
it as a going concern separately from the P Street
property.
[25]
Terblanche was cross-examined about whether the guesthouse
nonetheless has an independent goodwill for valuation purposes.
He
agreed that, if properly run, such a business will establish goodwill
and therefore increase in value, but at the same time
explained (and
this was accepted by the defendant’s counsel) that he is not an
expert in this particular field. Given his
admitted lack of
expertise, coupled with the defendant’s failure to call an
expert on goodwill, there is no evidence from
which one can draw a
conclusion on this aspect.
[26]
The materially undisputed evidence of Ms Hofmeyr (including the
contents of her report) was that the plaintiff, who was 66 years
of age at the time of the trial, cannot be considered a candidate for
employment in the formal labour market as she has already
reached
normal retirement age. In the event that she is able to secure
employment in the informal sector, she would have to overcome
perceived bias associated with her age. Depending on her health and
the impact of her osteoarthritis, it may be assumed that the
plaintiff could continue to earn income as a guesthouse operator for
a further four years, until 70 years of age. If the plaintiff
was
unable to continue to operate the guesthouse from the P Street
property (whether as a result of eviction or sale following
upon a
finding of a property partnership), the plaintiff would have to find
alternative employment where, at best, she will be
able to earn a
gross monthly income of between R8 000 and R15 000 per
month. The approach adopted by the plaintiff’s
counsel during
the trial that it would be fair to take the average of these two
amounts and peg the plaintiff’s earning potential
at R11 500
per month is sensible and appropriate.
[27]
Both parties gave extensive evidence. No purpose would be served in
setting it out in detail. Rather, the focus will be on
the
plaintiff’s version, which was materially consistent
throughout, as well as the correspondence emanating from the
defendant
himself and the significant concessions which he eventually
made under cross-examination.
[28]
As far as credibility is concerned, the plaintiff was a far better
witness than the defendant. Although garrulous at times,
she was
honest. She candidly made concessions, for example, in relation to
the Femina magazine article (a marketing exercise for
the guesthouse)
and her application for vehicle finance at a time when the defendant
had cut her off financially. She accepted
that, as she put it, she
had been somewhat economical with the truth by not disclosing all of
her monthly expenses to the financial
institution concerned. These,
along with the “air conditioner incident” relied upon by
the trial court, pertained to
peripheral issues and had no direct
bearing on those before it. At the very least, in my view, they did
not justify its somewhat
damning credibility finding against the
plaintiff. Although she was subjected to cross-examination for almost
three days, she did
not waver on the essential issues, and her
testimony was also largely supported by her affidavit evidence in the
eviction proceedings.
[29]
On the other hand it can safely be said that the defendant, as found
by the trial court, was an extremely poor witness, who
repeatedly
tailored his version, at times to the point of absurdity. He tried in
vain to portray himself as an innocent victim;
he refused to make
obvious concessions; and his behaviour during the litigation as well
as his testimony demonstrated him to be
a vindictive, embittered
individual with limited insight who, when the shoe pinched, had
little hesitation in resorting to downright
dishonesty. Where his
version differed from the plaintiff’s, hers is accepted and his
is rejected.
[30]
The evidence in relation to the alleged property partnership may be
dealt with as follows. During 2003 (about two years after
the
marriage) the defendant was due to receive a payment of R1 million
from a business deal. According to the plaintiff, he
told her that
they would select an immovable property:
‘
So
he said to me, “Let’s pick up the Saturday newspaper”,
where all the properties were advertised in: We’re
going out to
go choose a property. You will build it. I will register 50% of this
in your name. This will be a property partnership
and I want no part
of this. I am going to make the money, I’ve got to work long
hours and all I want to know, the day that
you move you SMS me which
home to come to. I want no part of the moving.’
[17]
[31]
This set the stage for what followed. In her amended particulars of
claim the plaintiff relied on a tacit agreement concluded
in 2003.
Some criticism may be levelled against her, given her evidence
referred to above in respect of the Sandton property. However,
it
became clear during the rest of her testimony that, insofar as the P
Street and Digteby properties were concerned, what transpired
flowed
from the pleaded 2003 agreement. Moreover, it was borne out by the
defendant’s own communications.
[32]
In relation to the Sandton property (which the defendant himself
caused to be registered jointly in their names) the evidence
established that the defendant, who worked long hours in his law
practice, relied on the plaintiff to oversee construction of the
residence. She obtained quotations; was primarily responsible for
liaising with the developer; initiated changes to the standard
building plan including structural alterations and finishes (it was
bought on a plot and plan basis); visited the site almost daily;
co-ordinated construction of the heated pool and landscaping of the
garden; and decorated the finished product. On the other hand
the
defendant covered the all the financial costs, with the plaintiff
ensuring that the costs of the project nonetheless fell within
the
budget stipulated by him.
[33]
Her role is possibly best described by the defendant himself in
regard to his own involvement in property developments prior
to the
marriage:
‘
I
developed them all, but in conjunction… with specialist
experts. You can’t just get up in the morning and build and
develop… But insofar as I could be the developer I developed
all of the properties.’
[18]
[34]
The defendant sought to
persuade the trial court that the Sandton property did not achieve a
profit when it was ultimately sold
in September 2010. To this end he
crafted a schedule of costs and expenses
[19]
which, he maintained, he was entitled to be refunded upon transfer to
the purchaser. Unsurprisingly the total exceeded the full
net
proceeds paid into his bank account by the transferring attorneys of
R1 118 928.49 on 8 December 2010.
[35]
During his cross-examination it was demonstrated that many of the
items on the defendant’s schedule were baseless. More
pertinently however, there was no evidence to suggest that he ever
raised with the plaintiff (or anyone else) his “entitlement”
to such “repayment” at any stage prior to receipt of such
proceeds, nor indeed until well after he appropriated the
plaintiff’s
net half share towards the cost of the Digteby property. The
plaintiff’s evidence that the defendant misrepresented
to her
that the Digteby property would be purchased in their joint names,
and persuaded her to agree that her share should therefore
be paid
into his account (as it too would be a joint investment) was not
engaged with sufficiently and accordingly remains unchallenged.
[36]
The defendant tried to hide behind discussions between the parties
prior to him taking transfer of the Digteby property that
it might
possibly be registered in a trust of which they would be equal
beneficiaries. According to the defendant, his underlying
motivation
for the proposed trust was to shield him from having to pay the
plaintiff anything if she became romantically involved
with someone
else. This of course presupposes that she was entitled to something
in the first place, which is at odds with his
version that she had no
such entitlement. It is also common cause that the trust option did
not materialise. Moreover the defendant’s
purported motivation
is also belied by his own correspondence to which I refer below.
[37]
The evidence also established that the P Street property was
extensively renovated from mid-2007 until about July 2008. The
plaintiff travelled to Stellenbosch on a regular basis to perform the
same role as she had in respect of the Sandton property,
finally
relocating permanently to rented accommodation in Stellenbosch,
funded by the defendant, in January 2008.
[38]
It would seem that M V, who moved to Stellenbosch in October 2007,
was initially more physically hands-on than the plaintiff
before she
also relocated, but it is undisputed that she and M V worked together
as a team in constant contact, and the defendant
himself acknowledged
her expertise as well as M V’s natural talent.
[39]
Other than again funding the actual cost of the project, the
defendant had almost no involvement, although he attempted to
paint a
different picture. This is demonstrated in a letter to him of 20
December 2007 from the builder, Hinkone Property Developments
CC,
requesting an extension of the completion date:
‘…
As
we have not communicated that much directly with you, we just think
that you should know the following… As we are not
certain what
[M
V]
has
communicated to you – in fact we have not received any
communication from you of anything in particular that you were
unhappy about…’
[20]
[40]
It is common cause that it was the defendant’s suggestion
that the guesthouse business be operated through the
vehicle of a
close corporation; that he set this up; and that at no stage did he
object to the plaintiff sharing membership thereof
with M V
,
to his exclusion. In the eviction proceedings the defendant
maintained that he had wanted no part of the business, given that his
relationship with it was to be strictly one of landlord and tenant.
[41]
There are two fundamental difficulties with this version. The first
is that in the same proceedings, which the defendant launched
in
December 2014 (and thus 6 years after the guesthouse commenced
business) he gave a completely contradictory account:
‘
It
is not disputed that the Apple Tree Guest House CC is today a viable
concern. It is also not disputed that I have to date not
taken any
profit whatsoever from
my
investment
,
either by way of
rental
,
profit share or otherwise. Rather, same has been taken entirely by
[the
plaintiff]
and
M V, to my exclusion.’
[21]
[emphasis supplied]
[42]
The second is contained in one of the defendant’s own letters
to the plaintiff dated 31 March 2010 after she informed
him that she
wanted a divorce, and in which he wrote:
‘
Once
the guesthouse is on its feet, and you earn reasonable income, you
can pay a reasonable rental based on 50% of the value of
the
property… With regard to the guesthouse, given its popularity
occasioned by your and M’s input to date, the “status
quo” should continue. I will continue to support you and M in
accordance with my underlying objective, namely to build collective
value, for the long term… As you have requested, I am happy to
conclude an appropriate lease agreement with you…’
[22]
[43]
In its judgment
[23]
the trial court found that the reference to a reasonable rental based
on 50% of the value of the property pertained to a different
property
which the defendant, in the same letter, proposed the parties should
purchase (also in a trust and as equal beneficiaries,
using
inter
alia
their joint proceeds
upon sale of the Sandton property to fund it). On appeal before us it
was common cause that the trial court
erred in this regard and that
the defendant was indeed referring to the P Street property.
[44]
This must surely be the clearest indication that the defendant
himself viewed the plaintiff as a 50% co-owner of the P Street
property, notwithstanding its exclusion from his estate for accrual
purposes as well as remaining registered only in his name.
While an
asset excluded from the accrual remains excluded for that purpose,
there is no logical, rational or lawful reason why,
at that party’s
election, it cannot form part of a property partnership
stante
matrimonio.
[45]
The offer to enter into a lease based on a rental for 50% of the
value of the P Street property also serves to demonstrate
that, on
the defendant’s own thinking, a partnership existed in respect
of that property as well. If the defendant’s
claim that his
relationship with the guesthouse was strictly one of landlord and
tenant is to be believed, the unanswered question
is why he was
content to sit back for 18 months (i.e. September 2008 until March
2010) without insisting on a formal lease, and
without ensuring that
the required payments pleaded by him were made.
[46]
The plaintiff’s version of a very loose arrangement, namely
that the guesthouse would pay the bond instalments, rates
and
utilities, as and when it could, is far more probable. It is also
consistent with her version that the agreed purpose of the
guesthouse
operation was to provide her with an income generating lifestyle for
the ultimate purpose of selling the business and
property together as
a going concern and sharing the profits equally, in furtherance of
the partnership agreement concluded in
2003.
[47]
In its main judgment the trial court found that the P Street property
did not form part of the property partnership. This was
in accordance
with its apparent approach that the plaintiff was required to prove a
separate agreement in respect of each property,
which was not her
case.
[48]
In reaching this finding the trial court also relied on the
defendant’s sole application in 2005 for guesthouse rights;
his
sole applications for a liquor licence for the guesthouse in 2007 and
2013 in which it was reflected that he was the owner
of the property;
and the plaintiff’s concession in cross-examination that ‘…
the
CC occupies P Street and on Duncan’s election’
.
[49]
It appears that the trial court misconstrued this concession. It is
clear from this passage of the evidence that the concession
was made
in the context of the guesthouse business having a value independent
from the P Street property:
‘
Apple
Tree Guest House and P Street go hand in hand together. It is one
business. We cannot say the property or the CC, it is one
business…
the CC is worth nothing, the property is worth nothing, together that
is where the value is.
But
is… the CC a tenant or not, that’s the question…
The CC occupies P Street and on Duncan’s election.’
[24]
[50]
Taken in its proper context, the plaintiff was trying to explain that
the guesthouse occupied P Street because the defendant
wanted it to
do so, in order to achieve the joint ultimate goal and not, as found
by the trial court, that this necessarily implied
that his permission
was required for the guesthouse to occupy the property.
[51]
As far as the applications for guesthouse rights and a liquor licence
are concerned, I also hold a different view. The defendant,
as sole
registered owner, was required to sign the applications and correctly
reflect his legal title to the authorities. This
was merely an
administrative requirement. He was also required to set out the basis
upon which the guesthouse had occupancy. Whether
or not this was as a
“tenant” is a red herring. It was never the plaintiff’s
case that the close corporation
had concluded a property partnership
with the defendant, but rather that she personally had done so.
[52]
The defendant travelled intermittently to Stellenbosch during 2008
and 2009. It is common cause that at the end of 2009 or
early 2010 he
returned permanently to Gauteng. The plaintiff learnt of his
permanent return upon enquiry from his personal assistant.
In March
2010 she consulted an attorney about a divorce. Shortly thereafter
she informed the defendant. He requested her to hold
off for 6 months
so that he could make her a proposal. She agreed and his letter to
her of 31 March 2010 (and subsequent communications)
followed. There
is no mention made in any of these communications of a wish to
reconcile or to work on the marriage, which the
defendant was
ultimately constrained to concede.
[53]
The defendant nonetheless tried
to pin the blame for the breakdown of the marriage on the romantic
relationship which the plaintiff
formed with K. It is however clear
from the evidence that the parties experienced significant marital
difficulties prior thereto.
The defendant himself testified that from
2008 the plaintiff ‘…
used
to complain about the distance relationship and I couldn’t
address the distance relationship’.
[25]
The plaintiff advanced additional reasons, but in my view what is
important for present purposes is the undisputed fact that the
marriage was already in serious trouble, if not already broken down,
by the beginning of 2010. The defendant speculated that the
plaintiff
embarked on her relationship with K in the first half of 2009 (at a
stage he suggested it was mid-2009), but conceded
that he had no
evidence that this was the case. In addition, the probabilities
favour the plaintiff’s version (as well as
K’s) that it
commenced during mid-2010. This fits in with the defendant’s
permanent return to Gauteng in early 2010,
the consultation which the
plaintiff had shortly thereafter with an attorney, the defendant
requesting 6 months to formulate a
proposal, and his email to the
plaintiff of 31 March 2010.
[54]
The first divorce summons was
issued on 25 August 2010
[26]
and served on the defendant. On 30 September 2010 the defendant wrote
again to the plaintiff.
[27]
She referred to it as the ‘
high
road/low road’
letter. He referred to it as his ‘
grovelling’
letter. It commences with the following introduction:
‘
1.
You want a divorce. To this end you have instituted action and
applied for relief in terms of
rule 43.
2.
To avoid litigation, you have requested me to provide you with a
written settlement proposal.
3.
Given the current structure of our affairs a number of options exist.
I will set out the various options, as I see it, and the
underlying
rationale.
4.
As agreed, please suspend the litigation proceedings pending the
outcome of our settlement discussions…’
[55]
Despite his subsequent protestations to the contrary, this letter was
undoubtedly written by the defendant in contemplation
of divorce. It
is too lengthy to set out in full in this judgment. In a nutshell,
the defendant explained that the parties were
in the ‘
investment
phase’
, the first of two stages, with the other being the
‘
profit taking phase’
. He sought to persuade the
plaintiff to stick with their joint plan despite her intention to
divorce, stating that, if she did
so ‘…
by the middle
of 2011, or as and when the Digteby property is completed…
Digteby and P Street will be paid off… we
will have two
substantial investments… once the two properties in question
have been completed and paid off, real decisions
can be made as to
the further commercialisation of the opportunities for our collective
benefit…’
[56]
Part of the proposal was that:
‘
As
you are aware, it was always my intention to include you in the
Digteby investment… I would like you to complete the building
of the residence at Digteby. The funds are available from the sale of
[the Sandton
property]…
In
all cases I am happy to peg the investment and split the proceeds
derived in due course… if you attend to the building
at
Digteby, you will naturally keep the household furniture.’
[57]
It is common cause that the plaintiff accepted the defendant’s
proposal to attend to the building of the residence at
the Digteby
property in accordance with their prior
modus operandi
.
Building commenced in January 2011 and was completed in about October
2011. Upon completion, the plaintiff took occupation and
continues to
reside there. Although the defendant claimed that she and K resided
there together, he was unable to adduce any evidence
to this effect.
A security guard at the Digteby Estate which the defendant threatened
to call in support of this claim did not
testify. Both the plaintiff
and K consistently denied any such arrangement.
[58]
The plaintiff also denied that she chose the ‘
high road’
while at the same time deliberately concealing her relationship with
K:
‘
This
was a total business proposition. Our marriage had fallen apart. He’d
already received the summons. He knew I was getting
divorced and he
was pressurising me to build the Digteby property because he said
let’s put our personal issues aside and
let’s carry on
with our business property partnership. At that stage we were
property partners…’
[28]
[59]
That the defendant shared the
same view is evident from his subsequent letter to the plaintiff’s
attorney of 19 September
2012, after receiving the second
divorce summons, wherein he stated that ‘
whilst
I do not wish to litigate with Nolene, she must accept that I will
not accept an erosion of value, mine or hers, and that
I will take
such steps as may be available to me to protect our collective estate
against the erosion of value through litigation
or other means’.
[29]
[60]
As is apparent from his plea,
the defendant only relied on the so-called fraudulent non-disclosure
of K in relation to the Digteby
property. On his version, he
discovered the relationship in June 2013 and it was confirmed to him
in mediation during April 2014.
[30]
Even if one accepts that he felt betrayed and aggrieved by this
discovery, the defendant must have decided to reconcile himself
to it
in the interests of joint commercial gain, because 8 months
later, on 5 December 2014, he once again wrote to the
plaintiff
and M V to record the content of a discussion the previous day:
‘
2.
My comments are as follows:
2.1
As discussed, I
would wish to reinstate our property development activities i.e. in
conjunction with you and M;
2.2
To this end we
discussed
inter alia
that:
2.2.1
The Guesthouse property could be extended and funded (presumably) by
way of the sale of Digteby and/or appropriate bond finance;
or
2.2.2
That both properties could be sold and the proceeds deployed to fund
new opportunities; or
2.2.3
That the Digteby property be leased out and both properties bonded to
fund the development of new opportunities including
possibly the
extension of the Guesthouse…; or
2.2.4
Some
combination of the above…’
[31]
[61]
The defendant proceeded to propose that both the guesthouse and
Digteby be sold ‘…
and
a proper and professional commercial development be embarked upon,
properly funded by the way of the sales and if necessary,
additional
bonds…’
.
He also proposed how the
reinstated property development could be structured from a commercial
point of view.
[62]
Self-evidently, if there was no prior property partnership, there
would be nothing to ‘
reinstate’
. Significantly,
not a murmur was made by the defendant in that letter about the
plaintiff’s so-called fraudulent non-disclosure
or his reliance
thereupon. The only reasonable inference is that this was an
afterthought raised by the defendant for tactical
purposes to avoid
payment to the plaintiff.
[63]
The materially undisputed
evidence of the plaintiff was that she reasonably requires R64 900
per month
[32]
as personal maintenance (until her death or remarriage, whichever
occurs first). This includes provision for accommodation in a
‘
fairly
small unit’
in
Stellenbosch at R20 000 per month.
[33]
The trial court awarded R15 000 per month in total, although it
is unclear how it arrived at this amount.
[64]
In my view there are no items on the plaintiff’s maintenance
schedule which appear to be extravagant or unreasonable,
save for the
admitted duplication of R3 000 for credit card payments and
clothing, and an allowance of R20 000 per month
to accommodate
herself elsewhere (whether purchased or rented). To my mind, it is
fair and reasonable to allow for a lesser accommodation
component of
R15 000 per month. Accordingly a total sum of R8 000 falls
to be deducted, leaving her claim at R56 900,
rounded off to
R57 000 per month.
[65]
From this must also be deducted the plaintiff’s potential
earnings of R11 500 per month in accordance with Ms Hofmeyr’s
testimony, leaving a net amount of R45 500.
[66]
The trial court correctly recognised that the plaintiff is entitled
to personal maintenance. She has been financially dependent
on the
defendant in one way or another since before their marriage in 2001.
Her age, health and earning capacity militate against
any other
reasonable conclusion.
[67]
The evidence also established
that the plaintiff has no assets which could be invested or
liquidated to contribute towards her financial
support. The report of
Munro Actuaries (which was admitted without objection) reflects that,
given the plaintiff’s age and
life expectancy, she requires a
capital sum of R1 400 700 to enable her to receive R10 000
per month.
[34]
Accordingly, to generate R45 500 per month, the plaintiff
requires a capital sum of R6 303 150 (i.e. R1 400 700
x 4.5).
[68]
Given the evidence pertaining to the property partnership, the
plaintiff discharged the onus of proving her entitlement to
50% of
its net assets. The level of acrimony between the parties makes it
necessary for the partnership to be terminated. It must
be mentioned
that on appeal before us, we were informed by the plaintiff’s
counsel that M V consented to the sale of the
guesthouse as a going
concern, and his written consent was subsequently provided. The
plaintiff will thus receive approximately
R5.2 million on the
values adopted by the parties based on the evidence of Professor
Terblanche, calculated as follows:
Description
Amount
§ Value of P Street
property plus
guesthouse and contents as going
concern
R7 200 000
§ Value of Digteby property
(excluding contents)
R5 000 000
R12 200 000
.
Less
§ 5% agent’s
commission on P
Street
R360 000
§ 5% agent’s
commission on Digteby
R250 000
§ Outstanding bond P
Street
R500 000
§ Outstanding bond on
Digteby
R560 000
§ Additional costs of sale
of the properties
R100 000
.
R10 430 000
.
÷ 2 =
R 5.2 million
[69]
The evidence established that the plaintiff is indebted to Mr K in
the sum of approximately R2 million in respect of loans
advanced
by him to enable her,
inter alia
, to fund the litigation
against the defendant. However, given the costs order to which she is
entitled (as set out below), the
plaintiff should recover a
substantial portion of this amount from the defendant. I will
accordingly (and simply because there
is no evidence to the contrary)
assume that the plaintiff should receive about R5 million, leaving
her with a shortfall of capital
with which to maintain herself of
R1 303 150 (i.e. R6 303 150 –
R5 000 000). Adopting
a robust approach, the plaintiff will
thus have a shortfall in monthly maintenance of about R10 000
per month, which will
need to escalate annually in accordance with
inflation.
[70]
Cross-examination of the
defendant revealed that he indeed does have some sources of income
despite his attempts to conceal this.
For example, he was driven to
concede that he was paid R300 000 for the period June 2016 to
June 2017, and that there was
substantially more standing to the
credit of his Investec account than he claimed.
[35]
Moreover, in addition to his share of the property partnership, the
defendant is the owner of his farm in Tulbagh with a value
of
R4.3 million, and receives rental for a dwelling on the farm of
R9 000 per month. He is thus able to afford payment
of
maintenance of R10 000 per month.
[71]
As far as the contents of the
Digteby property are concerned, they must be awarded to the plaintiff
as a result of her acceptance
of the defendant’s offer in his
letter of 30 September 2010. The contents of the P Street
property are reflected in
the financial statements of the close
corporation as its assets
[36]
,
and although the defendant purchased them, he has no corresponding
loan account in his favour. In any event, given that the property
and
the guesthouse are to be sold as a going concern and the parties are
to benefit equally (there being no suggestion that M V
is to share
therein), there can be no prejudice to the defendant if the
guesthouse is sold together with its contents.
The
dum casta
proviso
[72]
The trial court held that the
plaintiff is entitled to personal maintenance until her death,
remarriage or until she commences living
with a romantic partner.
Although only contained in a footnote
[37]
it further stated that the plaintiff will be deemed to have commenced
living with a romantic partner if the period of cohabitation
exceeds
4 consecutive months. No reasons were given for imposing a
dum
casta
proviso or the period
stipulated.
[73]
In
EH
v SH
[38]
the Supreme Court of Appeal held that:
‘
[11]
Relying upon judgments such as
Dodo
v Dodo
1990 (2) SA 77
(W) at 89G;
Carstens
v Carstens
1985 (2) SA
351
(SE) at 353F; and
SP
v HP
2009 (5) SA 223
(O) para 10, it was argued, both in the high court and in the
appellant’s heads of argument, that it would be against public
policy for a woman to be supported by two men at the same time. While
there are no doubt members of society who would endorse that
view, it
rather speaks of values from times past and I do not think in the
modern, more liberal (some may say more “enlightened”)
age in which we live, public policy demands that a person who
cohabits with another should for that reason alone be barred from
claiming maintenance from his or her spouse. Each case must be
determined by its own facts,…’
[74]
Those in the present matter militate against the making of such an
order. Both the plaintiff and K testified that they have
no intention
of cohabiting and gave acceptable explanations. Both were adamant
that, apart from funding certain holidays, K does
not contribute
towards the plaintiff’s maintenance in any way. The defendant
adduced no evidence of cohabitation, nor that
K maintained the
plaintiff as he alleged.
[75]
This is not to say that
circumstances may change in future. However, even if they do, and the
plaintiff and K decide to live together,
that is not the end of the
matter as the Supreme Court of Appeal has pointed out. In any event,
it is open to either party to approach
a maintenance court in due
course to vary or discharge the plaintiff’s maintenance award
in terms of s 6 of the Maintenance
Act
[39]
on good cause shown.
Whether
the defendant is entitled to institute an accrual claim against the
plaintiff.
[76]
The trial court reasoned that
the defendant had not pursued an accrual claim because firstly, in
his plea it was stated that he
had not done so and secondly, there
was no prayer in his plea to this effect.
[40]
[77]
It is convenient to deal with the second reason first. It is trite
that if a defendant in an action claims positive relief
from a
plaintiff, that relief must be advanced by way of a counterclaim. Any
prayer to this effect in a plea is simply incompetent.
[78]
The first reason does not
accord with the legal position. An accrual claim in terms of
s 3
of the
Matrimonial Property Act
[41
]
comes into existence, and its value is thus determined, at the date
of divorce:
AB v JB.
[42]
Put differently, in terms of
sections 3(1)
and
3
(2) a spouse becomes
vested with a legally enforceable right to the accrual upon the
granting of a divorce order, it being the moment
when the contingent
right becomes perfected.
[43]
The only exception is contained in
s 8
of the Act which permits
a spouse to approach court for immediate division of the accrual
where the right to share in it at dissolution
of the marriage may
well be prejudiced by the other spouse’s conduct or intended
conduct.
Section 8
has no application in the instant matter.
[79]
What was also clarified by the Supreme Court of Appeal in
AB v JB
is that:
‘
[19]
…it is not inappropriate to sue for both a divorce and an
order pursuant to
s 3
of the MPA in a single action, in which
the accrual order is made dependent upon the grant of a divorce
order.’
[80]
As set out above
[44]
the plaintiff pleaded that in the event of a property partnership
being found to exist (in which event the accrual in her estate
would
be greater than the defendant’s), the latter had formally
agreed in a pre-trial minute dated 12 September 2016
that he
renounced any right to claim payment thereof from the plaintiff. She
sought the following order in this regard:
‘
h)
… in the event that the accrual in the Plaintiff’s
estate is greater than the accrual in the Defendant’s estate,
then by agreement between the parties, the Defendant shall not
enforce any claim that he may have in regard thereto.’
[81]
In his plea the defendant referred to paragraph 9.1 of the relevant
pre-trial minute, placing reliance thereon. The balance
of the
plaintiff’s averments were denied.
[82]
Significantly however the defendant failed to refer at all to
paragraphs 9.2 and 9.3 of the same minute. It is appropriate
to set
out paragraph 9 in full:
‘
9.
DIVORCE –
PLAINTIFF’S POSSIBLE AMENDMENT
9.1
The Defendant hereby reverts to the Plaintiff’s enquiry as to
whether or not he intends persisting with an accrual claim
against
the Plaintiff’s estate in the event that the Court finds that a
property partnership exists between the parties.
The Defendant refers
to his plea to the Plaintiff’s Particulars of Claim and points
out that:
9.1.1
he has not claimed payment from the Plaintiff of one half of the
difference of the accrual between the respective estates
of the
parties;
9.1.2
there is no “accrual claim” by the Defendant against the
Plaintiff as suggested by the Plaintiff.
9.2
If the Defendant persists with an accrual claim in circumstances
where the Court finds that a property partnership exists, the
Plaintiff intends amending her particulars of claim to introduce a
forfeiture claim.
9.3
In the Defendant’s view it is unnecessary for the Plaintiff to
amend her particulars of claim as the Defendant does not
have “an
accrual claim” against her.
[83]
It is common cause that the minute was signed by the plaintiff’s
legal representative and the defendant personally (seemingly
at a
stage when he was still representing himself). He was content to both
initial and sign that minute recording his representations
to the
plaintiff. Paragraph 9.2 pertinently drew to his attention that if he
intended persisting with an accrual claim in circumstances
where a
property partnership was found to exist, the plaintiff would amend
her particulars of claim to plead forfeiture. His unequivocal
response to the plaintiff, recorded in paragraph 9.3, was that it was
unnecessary for her to amend her claim because he
did not have
‘
an accrual claim’
against her.
[84]
There can be no doubt that the plaintiff relied on this
representation in good faith, believing the defendant to have
renounced
any claim, because the issue of forfeiture was not
canvassed at all during her testimony and it is most unlikely that it
would
not have been, had the defendant played open cards. This
includes the plaintiff’s cross-examination.
[85]
The first time this issue was raised was during the defendant’s
cross-examination. It is necessary to quote from the
relevant passage
in the record at some length:
‘
MS
BUIKMAN
:
Mr D O, in the event that it is found that there was in fact a
property partnership by this Court, and in the event that
it is found
that Mrs N C O benefited from this partnership to the
tune of some R4-million – R4.5-million nett
of the properties…
Yes. Yes.
…
you
have conceded in your plea that you will not seek any claim thereto
pursuant to your accrual claim. --- I don’t think
that’s
entirely true, but there’s a bit of confusion going down there.
I think that wasn’t to do with the accrual,
as I recall. I
thought you wanted me to waive any back rentals.
Alright,
Mr D O, let’s go there. Have a look at your pleadings. The
pleadings, please. …
So
that is the accrual claim. It’s not any arrears. What are you
referring to today. --- I thought there was a debate about
arrears as
well, but that’s a forfeiture. If I could just …
(intervention)
Do
you see that? --- Yes, I read it here, forfeiture,
ja
.
…
MS
GEORGIOU
: May
I interrupt? This is also a matter for argument. The pleadings we can
argue.
MS
BUIKMAN
:
He’s an attorney.
MS
GEORGIOU
:
That’s been pleaded clearly as to what the plaintiff contends,
what the defendant contends, the relevant page of the
pretrial
conference … has been annexed, and perhaps we should address
that in argument as well. ---
Ja
,
it’s in argument.
The
plaintiff requested and the defendant … (inaudible) to concede
that he would waive… Does he intend to persist
on his accrual
claim? The defendant’s response: There is no accrual
claimed in the plea. And then the plaintiff pleads:
The
defendant, at the conference, waived his right to claim. So, M’Lady,
that is a very clear argument, based on the pleadings.
COURT
:
Perhaps that is legal argument. …
MS
BUIKMAN
:
Well, M’Lady, that’s not entirely correct. Because, at
the end of the day, the forfeiture provisions are in
fact pleaded. I
take my learned friend’s point and I take Your Ladyship’s
point. We can argue that in due course. It’s
just that the
plaintiff does rather change his attitude throughout with regard to
what is on offer and what is not. But, in any
event, be that as it
may, he’s bound by those pleadings.
COURT
:
He is bound by what’s in his pleadings.
MS
BUIKMAN
:
So I’m not going to anymore – any further in that. But
that, M’Lady, is not – that was formally
recorded in the
pretrial, so I’m not going to take that further. But that was,
in fact, resolved, M’Lady. Be that as
it may. So, M’Lady,
I will not press that. …’
[86]
During the appeal we were informed that this issue was argued (it
would seem on the pleadings) at the end of the trial, which
is
presumably why the trial court made the finding that the defendant
had not ‘
pursued’
an accrual claim against the
plaintiff’s estate. Given however that it made no order in this
regard, the defendant remained
at liberty to maintain his silence to
his advantage, because it was consequently not necessary for him to
cross-appeal this “finding”.
It was only during the
appeal, after we pressed his counsel for an unequivocal answer, that
for the first time he disclosed his
intention that he may pursue such
a claim.
[87]
There are two further reasons why the defendant should be barred from
pursuing such a claim. The first is that, as previously
stated,
s 7(2)
of the
Divorce Act requires
a court to have regard to the
factors listed therein to determine,
inter alia
, the quantum
of a maintenance award, which of necessity involves an examination of
the financial resources which will be available
to a claimant
post-divorce. A maintenance award is thus predicated
inter alia
on the value of the capital sum or other assets which the claimant is
to receive as a consequence of the divorce.
[88]
In the context of an
application for the joinder of a trust to a divorce action, the court
in
VW v VW and Others
[45]
agreed that although the right to share in the accrual only arises at
dissolution of the marriage, the adjudication of the accrual
could
not be conveniently separated from the claim for personal
maintenance. In
ST v CT
[46]
the Supreme Court of Appeal adopted the same approach:
‘
[11]
…This necessitates a consideration of the respondent’s
maintenance claim… we find it convenient to deal
first with
the difficult question of the claim for accrual, since that
determination will directly affect the question whether
any
maintenance should be paid to the respondent, and, if so, in what
amount…’
[89]
The second reason is that it is clear from the wording of
s 7
of
the
Divorce Act itself
that it is only the court seized with the
divorce which is empowered to make a personal maintenance order:
‘
7.
Division of assets and maintenance of parties.
---(1)
A court
granting a decree of divorce
may in accordance with a written agreement between the parties make
an order with regard to the division of the assets of the parties
or
the payment of maintenance by one party to the other.
(2)
In the absence of an order made in terms of subsection (1) with
regard to the payment of maintenance by the one party to the
other,
the court may
,
having regard to the existing or prospective means of each of the
parties, their respective earning capacities, financial needs
and
obligations, the age of each of the parties, the duration of the
marriage, the standard of living of the parties prior to the
divorce,
their conduct in so far as it may be relevant to the break-down of
the marriage, an order in terms of subsection (3) and
any other
factor which in the opinion of
the
court
should
be taken into account, make an order which
the
court finds
just in respect of the payment of maintenance by the one party to the
other for any period until the death or re-marriage of the
party in
whose favour the order is given, whichever event may first occur.’
[emphasis supplied]
[90]
This was confirmed by the Supreme Court of Appeal in
ST v CT
:
‘
[174]…
It was pointed out in Schutte that, unlike in England, here a
divorced spouse has no statutory remedy if no order
for maintenance
is granted upon divorce.
Section 7(2)
was enacted (and before it,
s 10 of the Matrimonial Affairs Act) to provide a statutory
right to a spouse to obtain a maintenance
order upon divorce…’
[91]
Moreover, as a matter of logic, it is appropriate for the divorce
court to deal with an accrual claim which either spouse advances
against the other when confronted with a claim for personal
maintenance, since it may well find that the spouse claiming
maintenance
is not entitled to any maintenance at all, given that his
or her means are, or will be, sufficient to maintain him or herself.
However, it could hardly then be open to the other spouse, free of
any maintenance award against him or her, and who did not claim
the
accrual at the time of the divorce, to later institute proceedings
for this purpose.
[92]
This would severely prejudice the other spouse, who in such later
proceedings would be precluded from instituting a counterclaim
for
maintenance. It may also have the unintended consequence of
permitting the separation of an issue (i.e. the determination
of
the accrual) in the absence of any prior notice as well as leave
first being obtained from a court.
The
eviction applications and aspects pertaining to costs
[93]
The papers in the eviction proceedings run to 672 pages, including
those relating to the opposed interlocutory applications.
From the
evidence adduced at the trial, it is clear that the defendant failed
to disclose all of the material facts in his founding
affidavits. In
addition, it was only after being confronted with the plaintiff’s
answering affidavit that he deposed to a
lengthy replying affidavit
(112 pages excluding annexures), replete with new and/or
argumentative material.
[94]
In similar vein the defendant caused the plaintiff to incur
considerable expense in fending off his irregular rule 35(12) notice
and subsequent rule 35(14) application, which included her having to
apply to have the notice set aside as an irregular step.
[95]
Given the proven facts, both eviction applications fall to be
dismissed and, in the particular circumstances, the plaintiff
is
entitled, not only to the costs of the eviction proceedings
themselves, but also to those pertaining to the interlocutory
applications.
[96]
The plaintiff, for the reasons set out earlier, is also entitled to
the qualifying fees of Professor Terblanche. As far as
the costs of
the rule 42 application are concerned, I am not inclined to interfere
with the trial court’s order, since I
am not persuaded that it
failed to exercise its discretion judiciously when it ordered that
each party should pay their own costs.
[97]
The following order is made:
1.
Save for the costs
order in the rule 42 application, the appeal succeeds with costs,
including those of two counsel where employed.
2.
The cross-appeal
is dismissed with costs, including those of two counsel where
employed.
3.
The order of the
court
a quo
is set aside and replaced with the
following:
(i)
The
bonds of marriage subsisting between the plaintiff and the defendant
be and are hereby dissolved.
(ii)
It
is declared that a property partnership exists between the plaintiff
and defendant, the assets of which are the following:
(a)
Erf
[...] Stellenbosch (P Street, Dennesig, Stellenbosch) – “the
P Street property” – as well as the assets
(including all
movables) and goodwill of the guesthouse operated therefrom by Apple
Tree Guest House CC, which shall all together
be regarded as a going
concern; and
(b)
Erf
[...] Vlottenburg ([...] Digteby Estate, Vlottenburg Road,
Stellenbosch) excluding any movables situated thereon (‘the
Digteby property’).
(iii)
The
property partnership is hereby dissolved, and shall be liquidated on
the terms set out below.
(iv)
A
practicing chartered accountant shall, within one month from date of
this order, be nominated by the Chairperson of the South
African
Institute of Chartered Accountants (which person is hereinafter
referred to as “the liquidator”) and is hereby
appointed
to liquidate the partnership and who shall:
(a)
Determine
the net value of all the partnership assets as at date of
dissolution; and
(b)
Sell
or distribute the partnership assets between the plaintiff and
defendant, or pay to either of them such money as may be necessary,
so that each is possessed of assets and/or money equal in value to
his or her 50% share of the net, after deduction of costs, fees
and
expenses stipulated in Annexure “A” hereto as well as any
amounts paid by the plaintiff in terms of paragraph (viii)
below.
(v)
For
the purpose of giving effect to paragraph (iv) above, the liquidator
shall have the powers and duties set out in Annexure “A”
hereto.
(vi)
The
defendant shall pay to the plaintiff the sum of R10 000 (ten
thousand rands) per month as personal maintenance until her
death or
remarriage, whichever occurs first, payable in advance on the first
day of each month following upon this order into a
bank account
nominated by the plaintiff.
(vii)
The
sum of R10 000 (ten thousand rands) aforesaid shall increase on
each anniversary of the date of first payment stipulated
in paragraph
(vi) above in accordance with such increase as may have occurred in
the consumer price index for the Republic of South
Africa, as
notified by the Director of Statistics or his or her equivalent, for
persons in the middle income group.
(viii)
Until
such time as the partnership assets have been wound up by the
liquidator, the plaintiff shall be entitled to remain in occupation
of the Digteby property, and the Apple Tree Guest House CC shall be
entitled to remain in occupation of the P Street property,
provided
that the plaintiff shall make payment of the mortgage bond
instalments over the properties (such mortgage bonds shall
not be
increased by the defendant without the plaintiff’s prior
written consent) but which payments shall be credited to
the
plaintiff and taken into account when the partnership is liquidated.
(ix)
It
is declared that the movable assets situated at the Digteby property
are the sole and exclusive property of the plaintiff.
(x)
The
defendant is precluded from instituting any proceedings against the
plaintiff in terms of section 3 of the Matrimonial Property
Act 88 of
1984.
(xi)
The
eviction applications under case numbers 21628/2014 and 21629/2014
are dismissed with costs, such costs to include the costs
of the
opposed interlocutory applications in terms of rule 35 and rule
30, as well as the costs of two counsel where employed.
(xii)
The
costs of this divorce action shall be paid by the defendant on the
party and party scale, including the costs of two counsel
where
employed as well as the qualifying fees of the plaintiff’s
expert witnesses Ms Hofmeyr, Professor Terblanche and Munro
Actuaries, but excluding the costs of the rule 42 application, in
respect of which each party shall pay their own costs.’
____________________
J
I CLOETE
I
agree.
____________________
L
NUKU
I
agree.
____________________
E
D WILLE
ANNEXURE
“A”
POWERS AND DUTIES OF THE
LIQUIDATOR [AS SUBMITTED BY COUNSEL FOR THE PLAINTIFF WITHOUT ANY
AMENDMENT SOUGHT BY EITHER PARTY]
1.
To determine the
value of the partnership assets;
2.
To call upon
either party to provide any books, documents or other information
which he/she may reasonably require in order to determine
the facts
set out in paragraph 1 above;
3.
To take control of
all assets forming part of the partnership estate;
4.
To engage the
services of any suitably qualified person or persons to assist him in
determining the proper value of any of the partnership
assets and to
pay such person the reasonable fees which may be charged by him.
5.
The liquidator
shall:
a.
Afford both
parties personally the opportunity to make representations to him
about any matter relevant to his duties and to this
order and to the
identity of any purchaser, as well as the purchase price of any
assets, including but not necessarily limited
to –
i.
The time and/or
manner in which any assets should be realised;
ii.
The price for
which any asset should be realised;
iii.
The sequence in
which assets should be realised;
b.
Give due
consideration to the wishes of the parties pursuant to
representations made by them and make such decision in respect
thereof as he may deem fit;
c.
Prepare such
interim and/or final accounts between the parties as he may deem
necessary from time to time;
d.
Be entitled to
realise any asset of the partnership estate either by public auction
or private treaty and on such terms and conditions
as may to him seem
most beneficial;
e.
Be entitled to
sell any asset to either of the parties hereto for a price that he
deems to be the trust market price (sic) of such
asset;
f.
Be entitled to
postpone the realisation of any asset for a period not exceeding six
months from the date when his appointment shall
commence provided
that he shall be entitled to postpone it for a period exceeding six
months with the written consent of both parties;
g.
Be entitled to
sign any documents as may be necessary to effect transfer of any
asset sold from the person in whose name it is registered
to the
purchaser thereof;
h.
Not realise any
asset without giving both parties three weeks’ notice of his
intention so to do;
i.
Be entitled to
apply to this court for any further directions that he shall or may
consider necessary;
j.
Be entitled to
collect debts due to the partnership estate unless the same be
disposed of by sale;
k.
Be entitled to pay
the liabilities of the partnership;
l.
To pay the
reasonable fees of the liquidator and to apportion such fees between
the parties in the same proportion as they are entitled
to the
profits of the partnership;
m.
The liquidator’s
duties shall cease and determine immediately he has either realised
and/or redistributed sufficient assets
to pay to the plaintiff 50% of
her due share, provided that despite the cessation of his duties as
liquidator he shall nevertheless
still be obliged to frame and submit
to the parties the final partnership account;
n.
Be obliged to give
both parties a first right, for a period of 10 days, to purchase any
assets of the partnership on the same terms
and at the same price, as
he is able to obtain from any bona fide third party.
6.
To prepare an
account setting out the facts and circumstances determined by him/her
as contemplated in paragraph 2 above, and setting
out the intended
manner of distribution of the assets of the partnership or the value
thereof;
7.
To engage the
services of any suitably qualified person or persons to assist him in
determining the proper value of any of the partnership
assets and to
pay such person the reasonable fees which may be charged by him.’
___________________________
[1]
The eviction applications were ‘
consolidated’
with the divorce action by agreement in terms of an order of Koen AJ
on 23 March 2016.
[2]
Annexure “A” to the order is not relevant for present
purposes.
[3]
At fn 26 of the judgment, Record Vol 25, p2473, the trial court held
that: ‘
The plaintiff
would be deemed to be living with her romantic partner if she lives
with him for a period longer than 4 consecutive
months’.
[4]
The same order referred to at fn 1 above.
[5]
Mr Du Plessis was erroneously referred to in the trial court and its
rule 42 judgment as Mr Munro.
[6]
The plaintiff also delivered a supplementary notice of application
for leave to appeal on 28 June 2018.
[7]
2014 (3) SA 96
(SCA) at paras [19] to [20].
[8]
Para 92 of its main judgment, Record Vol 25, p2472.
[9]
See, for example, the defendant’s evidence in chief Record Vol
21, p2040.
[10]
Record Vol 24, pp2364-2365.
[11]
The defendant’s plea runs to 26 pages.
[12]
R v Dhlumayo and Another
1948 (2) SA 677
(A) at 706;
Protea
Assurance Co Ltd v Casey
1970 (2) SA 643
(A) at 648.
[13]
Rule 42 judgment, Vol 27, p2634.
[14]
Main judgment, Vol 25, paras 94 and 102, pp2472 and 2473.
[15]
i.e. R3 million, being the difference between R7.2 million and R4.2
million.
[16]
Record Vol 15, p1464.
[17]
Record Vol 15, p1518.
[18]
Record Vol 21, p2036.
[19]
Record Vol 14, pp1382-1404. According to the defendant’s
counsel its total was in excess of R1.75 million.
[20]
Record Vol 12, pp1260-1261.
[21]
Record Vol 3, para 34, pp228-229.
[22]
Record Vol 4, pp337-338.
[23]
Paras [60] to [62], Record Vol 25, pp2464-2465.
[24]
Record Vol 19, p1895.
[25]
Record Vol 21, pp2073-4
[26]
Record Vol 12, p1203.
[27]
Record Vol 9, pp898-908.
[28]
Record Vol 19, p1867.
[29]
Record Vol 9, pp921-923.
[30]
His founding affidavit in the eviction proceedings, para 25, Record
Vol 3, p226.
[31]
Record Vol 4, pp355-360.
[32]
Maintenance schedule and supporting documents, Record Vol 14,
pp1377-1421.
[33]
Record Vol 16, p1602.
[34]
Record Vol 2, p200.
[35]
Record Vol 23, p2323 and Vol 24, pp2397-2399.
[36]
Record Vol 13, p1286.
[37]
See fn 3 above.
[38]
2012 (4) SA 164
(SCA) at para [11].
[39]
No 99 of 1998.
[40]
Main judgment paras [90] – [92], Record Vol 25, pp2471-2472.
[41]
No 88 of 1984.
[42]
2016 (5) SA 211
(SCA) at paras [15] – [20]; see also
ST
v CT
2018 (5) SA 479
(SCA)
at para [17].
[43]
JA v DA
2014 (6) SA 233
(GJ) at para [9]. See also
MB
v NB
2010 (3) SA 220
(GSJ)
at paras [37] to [42].
[44]
Para 12 of the amended particulars of claim, para 13 above.
[45]
(627/2016)
[2017] ZANCHC 26
(31 January 2017) at para [17].
[46]
fn 42 above.