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[2012] ZAGPJHC 227
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DS v DS and Others (43425/11) [2012] ZAGPJHC 227; 2014 (2) SA 511 (GSJ) (15 October 2012)
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REPORTABLE
SOUTH
GAUTENG HIGH COURT, JOHANNESBURG
CASE
NO: 43425/11
DATE:15/10/2012
In
the matter between:-
DS,
R
…................................................................
Applicant
and
DS,
M &
OTHERS
...............................................
Respondents
JUDGMENT
A
J BESTER, AJ:
[1]
In this application the Applicant and the First Respondent, both of
whom are consulting actuaries, are married out of community
in terms
of an anti-nuptial contract.
[2]
The contract stipulates that their marriage would be governed by the
provisions of chapter 1 of the Matrimonial Property Act,
1984 ("the
Act").
[3]
The parties are embroiled in a protracted and an apparently
acrimonious dispute about the patrimonial consequences generally,
and
in particular about the determination of their respective accruals.
[4]
The parties have already agreed that the effective date for the
calculation of their net assets for the purposes of the accrual
calculation would be 28 February 2011.
[5]
The Applicant claims that she is entitled to a significant portion of
the accrual in the First Respondent's estate not only
by virtue of
the provisions the Act, but also because she is entitled to a
forfeiture. She furthermore contends that the greater
portion of the
accrual in the First Respondent's estate comprises monies earned by
her and not by the First Respondent. The Applicant
contends further
that the First Respondent is squandering those assets. The Applicant
therefore seeks, in essence, so called "anti-dissipation'
relief
against the First Respondent pending the finalisation of their
divorce.
[6]
The First Respondent, who has made several attempts to resolve the
dispute with the Applicant, disputes those contentions. He
says,
particularly, that his use of the monies in his estate is not out of
the ordinary or unusual, but is limited to that required
by the
day-to-day conduct of his actuarial consultancy business and to cover
his living expenses and that of their minor daughter
who lives with
him. He shows, for example, that funds withdrawn for business
operational purposes are and have been regularly replenished
as and
when income is generated by his business.
[7]
On 22 March 2012, the Applicant, on an urgent basis, sought, in terms
of Part A of her Notice of Motion, an order comprising
wide-ranging
provisional relief to restrain the First Respondent, among others,
from withdrawing or receiving funds invested in
his name with the
Second, Third and Fourth Respondents pending the resolution of her
application for interim relief sought under
Part B of that Notice. On
that day the parties, however, reached agreement on provisional
relief pending the filing of answering
and replying affidavits and
the hearing of the application for interim relief sought by her under
Part B of the Notice.
[8]
The application for the Part B relief was set down for hearing today.
The Applicant, therefore, now seeks the interim relief
under Part B
of her Notice of Motion pending the final determination of the
divorce action between them. Irrespective of the fact
that she seeks
interim relief only, she nevertheless asks for an award of costs
against the First Respondentjof the application
on a punitive scale.
She does not seek costs from the Second, Third and Fourth Respondents
as they do not oppose the application.
[9]
The First Respondent opposes the relief now sought by the Applicant
and seeks an order dismissing the application with costs.
[10]
Such a dismissal would, of course, have the effect that the Part A
provisional relief obtained by consent, would also fall
away.
[11]
Prima facie, because the parties are not married in community of
property, the Applicant has no vested rights in any of the
assets
invested or registered (as the case may be) in the name of the First
Respondent, be it money, shares, immovable or immovable
property or
indeed in any other item in, or portion of, the his estate.
[12]
Sections 3(1)
and
3
(2) of the
Matrimonial Property Act make
it
abundantly clear that only on the dissolution of the marriage, among
others, by divorce, does a spouse acquire a right to claim
half of
the net accrual of the other spouse's estate.
[13]
Before that dissolution a spouse who has an accrual in his or her
estate that is smaller than the accrual in the estate of
the other
spouse has a only contingent right to claim half of the accrual in
the estate of that other spouse; not a vested right.
The Applicant's
alleged contingent right will therefore become a vested right only
when the contingency materialises. That contingency
may include,
a)
a dissolution of the marriage by divorce or death;
b)
if there is, at the effective date agreed by the parties, an accrual
in the estate of the First Respondent greater than the accrual
in the
Applicant's estate;
c)
a forfeiture in whole or in part of the right to participate in an
accrual.
See:
Reeder v Softline Ltd and Another
2001 (2) SA 844
(W) at 849C-J
[14]
Whatever claim the Applicant therefore might have at this juncture in
respect of the separate property of the Respondent or
a part thereof;
it is not a vested right, but a right contingent upon the divorce
that she seeks. But at this juncture, her claim
of a right is
disputed.
[15]
The Applicant therefore has no general right to prevent the
Respondent from freely dealing with his own separately held property
in respect of which she has no vested right, and neither does she
have a general right to seek to compel the Respondent to regulate
his
bone fide expenditure and use of his property so as to ensure that
funds are available for the settlement of her alleged contingent
right.
[16]
In this regard, therefore, when it is submitted on behalf of the
First Respondent that the Applicant has failed to establish
a prima
facie right to the funds held in the various accounts targeted by the
relief she seeks, I agree. I also agree with the
submission that the
First Respondent will only have a claim for payment of monies if it
is established at the dissolution of the
marriage that there was, at
the effective date agreed by the parties, an accrual in the First
Respondent's estate that is greater
than the accrual in the
Applicant's estate.
[17]
However, it is trite that that even a contingent right to claim half
of the accrual in the estate of the other spouse could
be protectable
by interdict pendente lite, but then an applicant for such relief
must show:-
a)
that the respondent has assets within the jurisdiction of the court;
b)
that the respondent, prima facie, has no bona fide defence against
the applicant's alleged contingent rights;
c)
that the respondent has the intention to defeat the applicant's claim
or to render it hollow by dissipating or secreting assets
away so as
to defeat it.
[18]
But even if these jurisdictional requirements are present, then an
applicant must still show a well-grounded apprehension of
irreparable
loss should the interdict pendent lite not be granted. It is perhaps
apposite here to point out that, because of the
Draconian nature,
invasiveness and conceivably inequitable consequences of such
anti-dissipation relief, the courts have been reluctant
to grant it
except in the clearest of cases.
See
generally in the above regard: Knox D'Arcy Ltd and Others v Jamieson
and Others
[1996] ZASCA 58
;
1996 (4) SA 348
(A), 372C; Mngadi v Beacon Sweets &
Chocolates Provident Fund and Others
2004 (5) SA 388
(D) 396E; Reeder
v Softline Ltd, supra, at 849-851.
[19]
The Applicant generated a mass of paper in this application in an
attempt to show that much of the First Respondent's accrual,
and
approximately two thirds of it, although invested in, and registered
under his name, was in fact generated by her income, not
by his.
That, she attempted to demonstrate, amongst others, by a comparison
of the income supposedly generated by the First Respondent
with
detailed calculations of her own income, the latter supported by
selected documentation. She calculates that her total assets
amount
to approximately R7,500,000.00 and the First Respondent's to
approximately R22,000,000.00. But her calculation of the First
Respondent's income is not supported by any real evidence but is
based, on her own admission, on "certain assumptions".
[20]
The First Respondent reciprocated in his answering affidavit by
putting up detailed evidence relating to the income generated
by him
during their marriage to show that her assumptions are incorrect and
that the assets in his estate were generated by his
own endeavours.
He also says that his total current net asset value amounts to
approximately
R20,000,000.00.
[21]
The Respondent contends that, if successful, she would be entitled to
claim R11,110,246.00 from the First Respondent's estate,
because that
sum represents, in essence, her monies, not his. If that is correct,
and if that sum is deducted from the First Respondent's
estate and
added to hers, then her accrual would of course exceed by far the
accrual in the First Respondent's estate. Simply accepting,
for
arguments' sake that the First Respondent's calculations of the
parties' respective accruals are correct, namely that, as it
the
effective date, her total assets re approximately R7,500,000.00 and
his approximately R22,000,000.00, the effect of such an
adjustment is
obvious: the First Respondent would, at dissolution of the marriage
have a significant claim against the Applicant.
But that, the
Applicant says, does not matter, for she is also entitled to a
forfeiture, an allegation which the First Respondent
denies. However,
even that forfeiture is disputed and certainly not even shown, prima
facie, on the papers before me.
[22]
Both parties therefore base their allegations on assumptions and
inferences drawn from incomplete information and then proceed,
on
these, to make calculations to support their claims and denials.
Undeniably, these attempts raise disputes of fact that are
incapable
of resolution on affidavit and would only be capable of determination
after full discovery and oral evidence at the anticipated
divorce
hearing. That much, counsel for both parties conceded during
argument.
[23]
It is, therefore, in my view not possible, on the basis of such
tenuous affidavit evidence, to make a finding that the First
Respondent prima facie does not have a bona fide defence against the
Applicant's apparently valid contingent rights and claims
based on
them.
[24]
Furthermore, it is not apparent from the papers in the application
that, prima facie, the First Respondent indeed intends to
defeat the
Applicant's claim or to render it hollow by dissipating his assets in
order to defeat her claim. The Applicant contends
that such an
inference could be drawn on, for example, the First Respondent's
withdrawal of funds from certain of his accounts.
However, by virtue
of the nature of the investments so drawn on; the current balances on
those accounts; and the nature and volume
of transactions effected on
them, these withdrawals are by no means so extraordinary that they
warrant an inference of mala fides
or some other conduct with
nefarious intention.
[25]
On the contrary, the First Respondent's evidence is that these
transactions are normal, day-to-day dealings for the purposes
of
conducting his normal business activities and for meeting personal
requirements. As further demonstrated by him, a substantial
part of
his investments can in any case not be drawn on until he reaches age
55; some 13 years hence. Furthermore, the First Respondent
has given,
and repeated in his answering affidavit, a tender made as far back as
29 May 2012, to retain untouched assets of a very
substantial value
of about R9,000,000.00 which he says would more than amply cover any
claim that the Applicant might eventually
prove against him.
[26]
That evidence and tender show anything but mala fides and ought to
have reassured the Applicant of the First Respondent's good
intentions. The application was in my view, therefore, a wasteful
exercise.
[27]
But there is more. As is the case with the Applicant, the Respondent
is a highly qualified and skilled professional with an
enormous
income earning potential. That is demonstrated vividly by the fact
that, between the two of them they were able to amass,
within a very
short working life, a fortune in assets worth well over
R25,000,000.00, despite having maintained a very lavish lifestyle.
Therefore, even if the Applicant is ultimately successful with her
claims, and even if the First Respondent is incapable immediately
to
settle the whole or part of whatever the Applicant might eventually
be found to be entitled to, she will get her relief - there
is no
reason whatsoever to fear that, after the divorce, the First
Respondent would not be capable of settling, within a relatively
short period of time, any balance owed to the Applicant out of his
ordinary income.
[28]
The Applicant has therefore not shown a well-grounded apprehension of
irreparable loss. On the contrary, the First Respondent
has shown
that, should the Applicant be successful with her claim, he would be
able to meet an award of whatever might be found
to due to her, if
not immediately, then certainly soon after such award.
[29]
There is, however, a further ground that militates against the
Applicant. The relief that she seeks in this application is
temporary, pending the resolution of the divorce action. The
Applicant claims that, if the relief is not granted, she would be
"irreparably prejudiced" as the investments in the First
Respondent's name in respect of which she claims she has a right
could, at worst be depleted and at best, that she would not share in
the fruits of the investments earned before the divorce. Those
fears
are exaggerated. The effective accrual date has been set and the
debatement and determination of their respective accruals
at the
divorce will, if she shows an entitlement to anything, compensate
her. As opposed to these concerns, the First Respondent
demonstrated
that, if the relief is granted, it would deprive him of the working
capital that he requires for the conduct of his
business and that the
restraints that the Part B relief would inevitably impose on his
ability to do so, would have significant
prejudicial consequences for
his business and his cash-flow. In response to this evidence, the
Applicant's terse reply is a bald
denial and a contention that, if
the relief places a constraint on the First Respondent's entitlement
to deal with his own assets
in order effectively to run his business,
then the he can simply go and get finance elsewhere or make use of
his "other, undisclosed
income". These bald and rather
callous allegations do not serve to disturb the balance, which in my
view the First Respondent
has shown to be decisively in his favour.
[30]
The Applicant has accordingly not shown that she has met the
jurisdictional requisites for the interim, anti-dissipation interdict
relief sought.
[31]
Finally, it needs to be pointed out that, apparently belatedly
realising that her case for anti-dissipation relief had not
been made
out in the founding affidavit, the Applicant, in argument on her
behalf before this court, changed gear and contented
that her right
to the interim relief sought, was in fact not found in a contingent
right to share in an accrual, but that is was
founded in a "universal
partnership" between the Applicant and the First Respondent.
[32]
That stratagem was apparently intended to facilitate argument that,
because there was a pooling of assets or commonly held
assets, the
Applicant has, as this juncture, a vested right in her share of those
commonly held assets. The submission was also
made in argument that
it is common cause that there was express agreement regarding that
universal partnership but alternatively,
that a tacit universal
partnership existed. The existence, and even the alleged tacit
existence, of such an alleged universal partnership
is, however,
anything but common cause. It is not even mentioned by name in the
application papers before me.
[33]
During argument, I therefore put it to Ms Rosenberg, SC that I have
great difficulty with the notion that one could found an
application
for interim relief, pending the final resolution of an action, on a
cause of action that is not even relied upon in
the action itself.
She argued, however, that there was a claim by the Applicant for
repayment of her income invested in instruments
of the First
Respondent in the Applicant's particulars of claim; therefore there
was, in effect, an indirect reliance on such a
cause of action in the
Applicant's divorce summons. However, perusal of the particulars of
claim in the summons (attached to the
Applicants founding affidavit
as Annexure "RDS24") does not in my view allege anything
that could be said to be a universal
partnership; at best for the
Applicant she there alleges certain oral agreements as to the
deployment of certain of her assets,
but otherwise the allegations
comprise general averments relating to the determination of their
respective accruals; the date upon
which the accrual is to be
determined; and the settlement of what would be due to her. If there
was a reliance on a universal partnership
in the action, one would at
the very least have expected to find an allegation of such
a
partnership (expressly concluded or tacit) and, for example, prayers
for a dissolution of that partnership; a statement and debatement
of
account in respect of the pooled or commonly held assets; a division
of those assets; and payment to the partners in accordance
with their
respective shares.
[34]
I am accordingly of the view that the Applicant's universal
partnership argument was a mere convenient afterthought argued
in an
attempt to circumvent the perceived deficiencies in the
anti-dissipation relief sought in the application.
I
accordingly make the following order
(a)The
application is dismissed with costs.
A
J BESTER
ACTING
JUDGE OF THE SOUTH GAUTENG HIGH COURT, JOHANNESBURG
COUNSEL
FOR THE PLAINTIFF : ADV R ROSENBERG SC
INSTRUCTED
BY :
COUNSEL
FOR THE DEFENDANT : ADV K FAULKES-JONES SC
INSTRUCTED
BY :
DATES
OF HEARING : 15 OCTOBER 2012
EX
TEMPORE JUDGMENT : 15 OCTOBER 2012