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[2017] ZAGPJHC 354
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M v M (82156/14) [2017] ZAGPJHC 354 (20 November 2017)
SAFLII
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Certain
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 82156/14
Reportable
Of
interest to other judges
Revised.
In
the matter between:
M
(BORN K),
K
Applicant
And
M,
T
Respondent
Coram
:
Thompson AJ
Date
of Hearing
: 31 October 2017
Date
of Judgment
: 20 November 2017
Summary
:
Adjustment in terms of Section 15(9)(b) of the Matrimonial Property
Act 88 of 1989 must be pleaded and ventilated in the
pleadings during
a divorce. Adjustment affected by the receiver and liquidator
during modus of dividing joint estate, but
adjust must be ordered by
the Court at the time of granting the decree of divorce.
Principles
regarding powers to be granted by the court to a receiver and
liquidator restated.
JUDGMENT
THOMPSON
AJ
:
[1]
The Applicant and the Respondent are former spouses. The
parties’ in community of property marital union was dissolved
by way of an order by the Honourable Judge Preller, the relevant
portion thereof which reads as follows:
‘
Having heard the
plaintiff/counsel for the plaintiff and having read the documents
filed of record
IT IS ORDERED THAT
1. THAT the bonds of marriage
subsisting between the plaintiff and defendant be and hereby are
dissolved.
2. THAT the joint estate be divided.
. . . .’
The applicant was the
defendant and the respondent was the plaintiff in the divorce
action. The divorce action was undefended.
[2]
Notwithstanding the fact that the decree of divorce had been granted
some two years and ten months ago, effect has not yet been
given to
the order whereby the joint marital estate was divided between the
parties. As a result the applicant launched an
application for
the appointment of a receiver and liquidator in order to attend to
the effecting of the division of the joint estate
order. The
respondent opposed the application, not so much on whether a receiver
and liquidator should be appointed but rather
what powers the
receiver and liquidator should be cloaked with.
[3]
By the time the application was argued before me, much had become
common cause between the parties with the outstanding issues
of
dispute being the following:
[3.1] Whether Advocate
Alan Jordaan, as suggested by the applicant, should be appointed as
receiver and liquidator or whether the
chairman of the South African
Institute of Chartered Accountants, in the absence of agreement
between the parties, should appoint
the receiver and liquidator as
suggested by the respondent.
[3.2] Whether the
receiver and liquidator should be cloaked with the power to sell
assets of the joint estate and whether he should
further be empowered
to collect the debts of the joint estate.
[3.3] Whether the
receiver and liquidator should be cloaked with the power of a trustee
in terms of the provisions of the Insolvency
Act
[1]
.
[3.4] Whether the
receiver and liquidator must be cloaked with the power to locate
assets of the joint estate outside of the Republic
of South Africa,
to proceed overseas to take evidence on commission de bene esse, and,
if needs be, to take control/possession
of such assets of the joint
estate and deal with them in accordance with his powers.
[3.5] Whether the costs
of the divorce action should be paid from the proceeds of the joint
estate.
[3.6] Whether the
receiver and liquidator should be cloaked with the power to effect an
adjustment in favour of either party in
terms of Section 15(9) of the
Matrimonial Property Act
[2]
(‘the MPA’).
[3.7] Whether the parties
should be able to refer objections relating to a provisional
liquidation and distribution account to a
retired judge for
determination.
[3.8] Whether, in
relation to the delivery of a final account, the receiver and
liquidator should refer any disputes regarding objects
to a retired
judge for determination.
[4]
In addition to the aforesaid, the respondent launched a
counter-application whereby the respondent sought relief that the
receiver
and liquidator investigate and determine payments made by
the respondent to and on behalf of the applicant from the date of the
divorce and that the amount so paid and determined be deducted from
the applicant’s share of the joint estate.
[5]
During the hearing of the matter the issues were further narrowed.
[5.1] In relation to the
issues of selling assets and collecting debts, Ms Rosenberg SC,
appearing for the respondent, indicated
that the objection to the
receiver and liquidator collecting the debts of the joint estate was
an error and no objection is raised
in this regard.
Mr Faber SC, appearing
for the applicant, contended that the proposed draft order makes
provision therefore that the parties may
bid on assets to be sold,
however I did not understand him to have any grave difficulty if the
order contains a provision that
prior to offering any assets for sale
to third parties, that the receiver and liquidator must first offer
such asset/s to the parties
for purchasing. This, in my view,
is dealt with the objection in paragraph 3.2 of this judgment.
[5.2] Mr Faber SC readily
conceded that in terms of the judgment by the Supreme Court of Appeal
in the matter of
Morar
NO v Akoo and Another
[3]
that the applicant cannot persist with the relief sought to cloak the
receiver and liquidator with the powers of a trustee
in terms of the
Insolvency Act. My attention was directed towards
GN
v JN
[4]
wherein the Supreme Court of Appeal granted a receiver and liquidator
those very powers. However, as Mr Faber SC correctly
pointed
out, in the GN-matter there is no reference to the
Morar
judgment. To this I would add that the
GN
matter dealt with the interpretation of s 7(7) and (8) of the Divorce
Act
[5]
. The issue of what
powers a receiver and liquidator should be cloaked with was not
argued or even dealt with in the
GN
judgment. This effectively disposes of the issue in para 3.3 of
this judgment.
[5.3] I do not intend to
deal at length with the various arguments raised for or against the
locating of overseas assets.
In essence the respondent denied
that there are assets abroad that are joint estate assets and, having
regard to the dearth of
allegations in this regard by the applicant
in her founding affidavit, the
Plascon-Evans
-rule should
apply. As a fall back the respondent tendered that the receiver
and liquidator may be cloaked with this power,
subject to the proviso
that the investigations relating thereto should be for the
applicant’s account, save in the event
that the receiver and
liquidator locates assets abroad, in which event the costs of the
investigations are to be for each party’s
account, equally.
This, the applicant
understood to mean that she should pay the costs of the investigation
for assets located abroad upfront.
I did not understand the
respondent’s tender to mean such. I understood it to mean
that when the receiver and liquidator
finalises his liquidation and
distribution account, the costs of the investigations abroad should
be allocated solely to the applicant,
subject to the proviso as set
out by the respondent. After Ms Rosenberg SC indicated that my
understanding was correct and
after I clarified that the respondent’s
proviso would take effect upon ‘any asset of any value’
being located
abroad belonging to the joint estate, I understood the
applicant to have no objection thereto. In my view this
disposed of
the objection in para 3.4 of this judgment.
[5.4] It was conceded on
behalf of the applicant that the legal costs relating to the divorce
action should not form part of the
division of the joint estate.
This effectively disposed of the objection in para 3.5 of this
judgment.
[6]
The only issues that remained for determination were therefore the
identity of the appointment of the receiver and liquidator,
the MPA
adjustment issue and whether any objections should be referred to a
retired judge for determination.
IDENTITY
OF THE RECEIVER AND LIQUIDATOR
[7]
The applicant suggested the appointment of Mr Jordaan. Mr
Jordaan gave his written consent to act as receiver and liquidator
in
the matter. He is an admitted advocate of the High Court and
practiced as such for a period of 19 years as the Pretoria
Society of
Advocates between 1973 and 1992. For the period of 1992 to 1998
Mr Jordaan was involved with South African Cricket
on a fulltime
basis. It was during the latter part of this tenure that he
enrolled at the Master’s office and, for
the last 17 years, has
been engaged in only divorce liquidations. Mr Jordaan is
undoubtedly an expert in his field.
[8]
The respondent objected to the appointment of Mr Jordaan on the basis
that he does not know Mr Jordaan. During argument,
Ms Rosenberg
SC submitted that within the matrimonial litigation community the
incidence of experts who will pander towards the
interests of the
party instructing such expert is well known. My difficulty with
this argument, as appreciated by Ms Rosenberg
SC, is that this may be
found within a specific field dealing with a specific portion of
matrimonial litigation where value judgments
based on matters that
are not an exact science is under consideration. In casu, Mr
Jordaan will have to account for his liquidation
and distribution of
the joint estate, duly supported by vouchers.
[9]
It was submitted on behalf of the applicant that it is the duty of
the court to appoint an impartial person who is to effect
the
division
[6]
. This
means, so the submission goes, that the court must appoint a
specifically identified person. I can find
nothing in the
authorities that I have been referred to in support of this
submission. As I understand the authorities the
court must
appoint an impartial person. Where the parties cannot agree to
the identity of a receiver and liquidator and where
valid objections
are raised to the persons suggested by the parties, the submission on
behalf of the applicant will have it that
the court must now embark
on a process to find an impartial person. The immediate
question that arises is who will attend
to obtaining the necessary
consent to act. Surely that cannot be the function of a
judicial officer. In appropriate
circumstances I see no good
reason why the Court cannot order the appointment of an impartial
person the identify of which is to
be determined by someone such as
the chairperson of the South African Institute of Charted
Accountants. This, I understand,
to be the practice in this
division in order to avoid allegations of bias during the course of
effecting the division of the joint
estate.
[10]
This matter is, however, not an appropriate matter to exercise my
discretion where a third party should be requested to identify
the
impartial person. No concerns have been raised on the papers by
the respondent regarding the qualifications, competence
or
impartiality of Mr Jordaan. I see no reasons that vitiate
against the appointment of Mr Jordaan as receiver and liquidator
to
affect the division of the joint estate of the parties
ADJUSTMENT
OF THE ESTATE IN TERMS OF SECTION 15(9)(b) OF THE MPA
[11]
The applicant’s case in this regard, made out for the first
time in her replying affidavit, is two-fold. Firstly,
she
alleges that during December 2014, whilst the parties were still
married, the respondent purchased a residence in Hyde Park
for his
alleged ex-girlfriend. To this end the applicant alleges that
the alleged ex-girlfriend of the respondent tremendously
benefitted
from the joint estate. Secondly, the applicant alleges that the
respondent has, subsequent to the date of the
granting of the decree
of divorce, dissipated the assets of the joint estate by acquiring
certain assets, both movable and immovable,
for his current wife.
The respondent also, so the allegation goes, paid for a 3 day wedding
at Sun City, with all expenses
thereto covered by the respondent. The
respondent submitted that the applicant is not entitled to this
relief. According
to the respondent the joint estate, as at the
date of the divorce, falls to be divided. Incidentally, this is
the very case
that is made out by the applicant in her founding
affidavit. It bears mentioning that there is no attempt by the
applicant,
in her founding affidavit, to substantiate a case for the
adjustment that is loosely contended for in the replying affidavit.
[12]
The applicant does not specifically rely on s 15(9) of the MPA in
either her founding affidavit or replying affidavit.
The
applicant also does not formulate her case in a clear manner so as to
indicate that she is relying on the relevant provisions
of the MPA.
This point is also not addressed with any fervour in the applicant’s
heads of argument
[7]
.
On this basis alone the applicant should fail on this point
[8]
and I should deny the relief sought in this regard. However, as
the respondent did not take the point that he was prejudiced
in the
conduct of his case in this regard I will deal with this issue.
[13]
Subject to what follows, during the course of the hearing this point
was debated at some length. However, save for being
referred to
s 15(9) of the MPA and a loose reference to the now locus classicus
of
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[9]
regarding the interpretation of s 15(9)(b) of the MPA, my attention
was not directed to any authority on the point.
During the
course of preparing this judgment I came upon the judgment of
Prinsloo J in
Pelser
N.O. and Another v Lessing N.O. and Others
[10]
. Quite fortuitously, the applicant’s counsel submitted
additional heads of argument, subsequent to my reading of the
Pelser
judgment, on the
Pelser
judmgent. The respondent’s counsel submitted subsequent
heads of argument to deal with the applicant’s supplementary
heads of argument.
[13]
Although this matter ultimately turns on an interpretation of s
15(9)(b) of the MPA, the appropriate point of departure will
be to
have regard to s 15 of the MPA generally. Section 15 of the MPA
provides as follows:
‘
15 Powers of spouses
(1) Subject to the provisions of
subsections (2), (3) and (7), a spouse in a marriage in community of
property may perform any juristic
act with regard to the joint estate
without the consent of the other spouse.
(2) Such a spouse shall not without
the written consent of the other spouse-
(a) alienate, mortgage, burden with a
servitude or confer any other real right in any immovable property
forming part of the joint
estate;
(b) enter into any contract for the
alienation, mortgaging, burdening with a servitude or conferring of
any other real right in
immovable property forming part of the joint
estate;
(c) alienate, cede or pledge any
shares, stock, debentures, debenture bonds, insurance policies,
mortgage bonds, fixed deposits
or any similar assets, or any
investment by or on behalf of the other spouse in a financial
institution, forming part of the joint
estate;
(d) alienate or pledge any jewellery,
coins, stamps, paintings or any other assets forming part of the
joint estate and held mainly
as investments;
(e) withdraw money held in the name of
the other spouse in any account in a banking institution, a building
society or the Post
Office Savings Bank of the Republic of South
Africa;
(f) enter, as a consumer, into a
credit agreement to which the provisions of the National Credit Act,
2005 (Act 34 of 2005) apply,
as 'consumer' and 'credit agreement' are
respectively defined in that Act, but this paragraph does not require
the written consent
of a spouse before incurring each successive
charge under a credit facility, as defined in that Act;
[Para. (f) substituted by s. 172 (2)
of Act 34 of 2005 (wef 1 June 2006).]
(g) as a purchaser enter into a
contract as defined in the Alienation of Land Act, 1981 (Act 68 of
1981), and to which the provisions
of that Act apply;
(h) bind himself as surety.
(3) A spouse shall not without the
consent of the other spouse-
(a) alienate, pledge or otherwise
burden any furniture or other effects of the common household forming
part of the joint estate;
(b) receive any money due or accruing
to that other spouse or the joint estate by way of-
(i) remuneration, earnings, bonus,
allowance, royalty, pension or gratuity, by virtue of his profession,
trade, business, or services
rendered by him;
(ii) damages for loss of income
contemplated in subparagraph (i);
(iii) inheritance, legacy, donation,
bursary or prize left, bequeathed, made or awarded to the other
spouse;
(iv) income derived from the separate
property of the other spouse;
(v) dividends or interest on or the
proceeds of shares or investments in the name of the other spouse;
(vi) the proceeds of any insurance
policy or annuity in favour of the other spouse;
(c) donate to another person any asset
of the joint estate or alienate such an asset without value,
excluding an asset of which
the donation or alienation does not and
probably will not unreasonably prejudice the interest of the other
spouse in the joint
estate, and which is not contrary to the
provisions of subsection (2) or paragraph (a) of this subsection.
(4) The consent required for the
purposes of paragraphs (b) to (g) of subsection (2), and subsection
(3) may, except where it is
required for the registration of a deed
in a deeds registry, also be given by way of ratification within a
reasonable time after
the act concerned.
(5) The consent required for the
performance of the acts contemplated in paragraphs (a), (b), (f), (g)
and (h) of subsection (2)
shall be given separately in respect of
each act and shall be attested by two competent witnesses.
(6) The provisions of paragraphs (b),
(c), (f), (g) and (h) of subsection (2) do not apply where an act
contemplated in those paragraphs
is performed by a spouse in the
ordinary course of his profession, trade or business.
(7) Notwithstanding the provisions of
subsection (2) (c), a spouse may without the consent of the other
spouse-
(a) sell listed securities on the
stock exchange and cede or pledge listed securities in order to buy
listed securities;
(b) alienate, cede or pledge-
(i) a deposit held in his name at a
building society or banking institution;
(ii) building society shares
registered in his name.
(8) In determining whether a donation
or alienation contemplated in subsection (3) (c) does not or probably
will not unreasonably
prejudice the interest of the other spouse in
the joint estate, the court shall have regard to the value of the
property donated
or alienated, the reason for the donation or
alienation, the financial and social standing of the spouses, their
standard of living
and any other factor which in the opinion of the
court should be taken into account.
(9) When a spouse enters into a
transaction with a person contrary to the provisions of subsection
(2) or (3) of this section, or
an order under section 16 (2), and-
(a) that person does not know and
cannot reasonably know that the transaction is being entered into
contrary to those provisions
or that order, it is deemed that the
transaction concerned has been entered into with the consent required
in terms of the said
subsection (2) or (3), or while the power
concerned of the spouse has not been suspended, as the case may be;
(b) that spouse knows or ought
reasonably to know that he will probably not obtain the consent
required in terms of the said
subsection (2) or (3), or that the
power concerned has been suspended, as the case may be, and the joint
estate suffers a loss
as a result of that transaction, an adjustment
shall be effected in favour of the other spouse upon the division of
the joint estate.’
[14]
Section 15 of the MPA is found under Chapter III of the MPA, headed
‘Marriages in Community of Property’.
It is trite
that ‘[w]ords in a statute must be read in their entire context
and must be given their ordinary grammatical
meaning harmoniously
with the purpose of the statute. The actual words used by the
Legislature are important. Judicial
officers should resist the
temptation
‘
to substitute what they regard
as reasonable, sensible or business like for the words actually
used. To do so in regard to
a statute or statutory instrument
is to cross the divide between interpretation and legislation’
[11]
.
[15]
Subsection (1) of s 15 of the MPA, provides that
‘
a spouse in a marriage in
community of property may perform any juristic act with regard to the
joint estate without the consent
of the other.’
A
‘spouse’ is undefined in the act and the ordinary meaning
accorded to the word spouse should be applied. A spouse
is
either member of a married pair in relation to the other
[12]
.
In turn, ‘joint estate’ is defined in s 1 of the MPA as
‘the joint estate of a husband and a wife
married in community
of property.’ A joint estate, in terms of the MPA, thus
exists between spouses whilst the marriage,
subject to the property
regime of community of property, subsists. I agree with Ms
Rosenberg SC’s submission that s
15 of the MPA generally
operates stante matrimonio.
[16]
I can see no reason why s 15(9)(b) of the MPA should be treated any
differently. The provisions of s 15 of the MPA must
be read in
their entire context within the purpose of Chapter III, dealing
specifically with marriages in community of property,
of the MPA.
My view that s 15 of the MPA, in toto, deals with the situation
stante matrimonio, is fortified if regard is
had to s 15(1) in
conjunction of s 15(9)(b) of the MPA where reference is made in both
subsections to, inter alia, subs (2) and
(3).
[17]
Being of the view that s 15 of the MPA deals with the situation
stante matrimonio, I now turn to deal with s 15(9)(b) of the
MPA as
relied upon by the applicant during argument before me. Section
15(9)(b) of the MPA allows for an adjustment to be
effected upon the
division of the joint estate where a spouse commits an act or acts
contrary to subs 15(2) or (3) of the MPA and
the joint estate suffers
a loss as a result of that transaction. The applicant submits
that the words ‘an adjustment
shall be effected. . .upon the
division of the joint estate’ means that the adjustment must be
made at the time that the
joint estate is actually divided by the
receiver and liquidator. The respondent submits that the court,
upon the granting
of a decree of divorce, only ordered a division of
the joint estate and nothing more. Accordingly, the receiver
and liquidator
cannot make any adjustment as contemplated by s
15(9)(b) of the MPA.
[18]
Upon first blush I was of the view that a judicial exposition of the
meaning of ‘division of the joint estate’
as it appears
in s 15(9)(b) of the MPA is necessary in relation to the common law
understanding of the termination of the community
of property.
No doubt it would have been an interesting and intricate exposition
as, with my initial research into the issue,
there is no clear nor
easy answer. However, upon reflection this is not necessary.
Firstly, the court has a wide discretion
to appoint a receiver and
liquidator
[13]
. However, the
court does not have a discretion to grant wide-ranging powers to a
receiver and liquidator. Section 15(9)(b) of the
MPA requires, in
order to impugn a transaction, a finding on whether a spouse knew or
reasonably ought to have known that he will
probably not obtain the
necessary consent. Reasonableness and probabilities are both
legal terminologies and will require
judicial scrutiny and
pronouncement based on pleaded facts and evidence led.
Secondly, s 15(9)(b) has a further jurisdictional
aspect to it,
namely the estate must have suffered a loss. This will also
require the pleading of facts in relation thereto
and the leading of
evidence to prove the loss. Surely the receiver and liquidator
cannot be expected to receive evidence
on this issue and make a
finding of fact on a balance of probabilities. The first
difficulty that I foresee in this regard
is that the respondent’s
complaint against the appointment of a receiver and liquidator
selected by the applicant may then
not be completely without merit.
The second difficulty that I foresee is much in line with the
difficulties enunciated by
Wallis JA in the
Morar
judgment
[14]
.
Thirdly, and peculiar to this application, the applicant is wholly
silent on whether the joint estate suffered a loss.
The
applicant alleges that the respondent’s alleged ex-girlfriend
benefitted from the joint estate. This is, however,
not the
test. The test is whether the joint-estate suffered a loss.
[19]
It is the duty of the receiver and liquidator to receive the assets
and liabilities of the joint estate, liquidate same and
distribute
the free residue to the parties. What the receiver and
liquidator, in such circumstances do, is to attend to the
modus of
giving effect to the court order of division of the joint estate.
The receiver and liquidator must make the adjustment
when he attends
to the modus of dividing the joint estate, but he cannot decide on
whether such an adjustment must be made or not.
The latter is a
triable issue and therefore the decision in relation thereto is a
judicial function. In my view, whether
a party is entitled to
an adjustment in terms of s 15(9)(b) of the MPA must be properly
ventilated in the pleadings and in evidence
so that the court may
pronounce thereon
[15]
.
It is for the court to order the adjustment and the receiver and
liquidator to do nothing more than give effect to
that order when he
attends to the modus of dividing the joint estate.
[20]
The above is, however, not the end of the matter. The applicant
also seeks an adjustment in relation to events that took
place
subsequent to the granting of the decree of divorce. The
applicant again placed reliance on s 15(9)(b) of the MPA.
In
this regard the applicant’s reliance on the aforesaid section
is misplaced. On the applicant’s own version
the
complaints that she raised occurred subsequent to the decree of
divorce being granted. It recently became settled law
that the
date upon which the value of the joint estate is to be determined is
the date of the divorce
[16]
.
It follows then that the joint estate can only suffer loss prior to
or on the date on which the value of the joint
estate is determined.
In addition, I have earlier in this judgment already held that s
15(9)(b) of the MPA deals with transactions
stante matrimonio that
may be impugned as provided for in terms of s 15 of the MPA. There
can therefore not be an adjustment post-divorce.
[21]
On a proper reading of the relief that the applicant seeks relating
to the complaints post the granting of a decree of divorce,
an
adjustment is in any event not what the applicant seeks. What
the applicant seeks, simply put, is an arithmetical and
accounting
exercise to be undertaken. If the respondent had dissipated any
assets, whether it be cash, investments, movables,
immovables or any
other asset of the joint estate, after the date of divorce that, as
at the date of divorce, formed part of the
former joint estate then
the respondent had merely collected an asset of the joint estate.
I need not deal with the correctness
of such conduct as no
dissipation has been shown by the applicant, presumably on the
thinking that the dissipation will have to
be proven to the receiver
and liquidator. However, the net effect of such action by the
respondent, if same did occur, would
be that the receiver and
liquidator would have to subtract half of the value of such asset
from the distribution to the respondent
and add half of the value of
such asset to the distribution to the applicant. This is so as
the receiver and liquidator will
have to make no finding of fact.
If the asset formed part of the joint estate at the time of the
divorce, a value must be
attributed thereto. If the respondent
had dissipated same then he had already received the full value
thereof and not only
his half-share value. As the respondent
had already received his half-share that he was entitled to, he is
not entitled to
receive it again. The applicant is, however,
entitled to receive her half-share value that the respondent had
appropriated
as his own. There is no need for any adjudication
as to whether the joint estate suffered a loss. If the asset
dissipated
subsequent to the granting of the decree of divorce formed
part of the joint estate as at the date of divorce, the applicant is
entitled to have shared in the value thereof. Nothing more than
an arithmetical and accounting calculation needs to be done
in order
to determine this. This applies vice versa to the respondent.
If either party has an objection as to the manner
in which the
receiver and liquidator applies the above, they can always approach
the court to deal with such objection.
SHOULD
OBJECTIONS BE REFERRED TO A RETIRED JUDGE FOR DETERMINATION
[22]
The respondent, undoubtedly to ensure an expeditious finalisation of
any dispute that arises from the receiver and liquidator’s
liquidation and distribution account seeks an order that any dispute
regarding the liquidation and distribution account be referred
to a
retired judge for consideration. The applicant opposes this
relief sought by the respondent on the basis that referral
of a
dispute to a retired judge for determination is akin to arbitration,
in terms of the Arbitration Act
[17]
(‘the Arbitration Act’). In addition, the applicant
submits that a referral to arbitration must be by agreement
and
cannot be imposed by the court in the absence of an agreement.
Lastly the applicant submits that the court cannot abdicate
its
responsibilities to a third party unless authorised to do so by law.
[23]
As I am of the view that the applicant is correct that a referral to
arbitration must be by agreement, I need not deal with
whether
disputes in relation to the liquidation and distribution account will
qualify as ‘any matrimonial cause or any matter
incidental to
such cause’
[18]
.
[24]
Even if I am wrong in the afore-going, to refer any disputes in
relation to the liquidation and distribution account to a retired
judge for determination would require that I exercise my discretion
in this regard judicially. No case is made out by the
respondent why the court should not deal with any objections to the
liquidation and distribution account. No case is made
out by
the respondent why a retired judge would be a more favourable option
to determine a dispute rather than the court.
I am not inclined
to exercise my discretion in this regard in favour of the respondent.
THE
RESPONDENT’S COUNTER-APPLICATION
[25]
This leaves the respondent’s counter-application whereby the
respondent seeks that the receiver and liquidator may investigate
and
determine the nature of payments made by the respondent to the
applicant after the decree of divorce was granted. The
applicant submitted that a dispute of fact exists in relation to this
issue that cannot be resolved on the papers and that the
counter-application should be dismissed with costs. The
respondent conceded that a dispute of fact existed but submitted
additionally that the costs of the counter-application should be
costs in the division of the joint estate. This submission
by
the respondent is partly based on the life-line the applicant
extended in its proposed draft order regarding this issue as follows:
‘
To adjust his distribution by
taking into the reckoning such payments as he determines were made by
the respondent to the applicant
on account of her share of the joint
estate.’
[26]=
As much as this is a life-line by the applicant to the respondent in
relation to the respondent’s counter-application,
I have grave
difficulty and serious doubts as to the correctness of cloaking the
receiver and liquidator with the power to determine
whether payments
by the respondent to the applicant was made on account of her share
of the joint estate. It is already common
cause that a factual
dispute in this regard exists. The same relevant
considerations, mutatis mutandis, as mentioned in para
18 of this
judgment applies.
[27]==
This does not mean that the receiver and liquidator cannot deal with
the payments the respondent contends has already been
made to the
applicant in lieu of her share of the joint estate. If the
parties agree that a payment had been made in lieu
of the applicant’s
share in the joint estate he can naturally account for such payment
in this final liquidation and distribution
account. If the
parties do not agree that a payment has been made in lieu of the
applicant’s share in the joint estate,
the receiver and
liquidator may approach the court for a determination.
[28]=
The applicant submitted that in light of the concession by the
respondent and the factual dispute, that the respondent should
pay
the costs of the counter-application. Although the applicant
submits that a factual dispute exists regarding payments
made by the
respondent to the applicant, the applicant did concede that there
were payments made by the respondent to the applicant
that should be
taken into account in calculating the division of the joint estate.
This concession, however, does not avail
the respondent. In my
view, para 2.8
[19]
of
the applicant’s notice of motion sufficiently catered for the
very position the respondent sought to protect in
the
counter-application. The counter-application was not only
unnecessary, it sought to provide wide-ranging powers to the
liquidator, the very issue the respondent took issue with on parts of
the applicant’s application.
[29]
In the circumstances I make the following order:
1.
1.1 Mr Alan Jordaan, a
duly admitted advocate of this Court, is appointed as the receiver
and liquidator for the joint estate of
the parties, for the purposes
of giving effect to the order by the Honourable Mr Justice Preller
whereby the division of the joint
estate of the parties was ordered,
with the effective date of determination of the value of the joint
estate being 22 January 2015;
1.2 The receiver and
liquidator shall not be required to lodge security for his
administration of the
joint estate.
2. The receiver and
liquidator shall have the following powers -
2.1 To make all
investigations necessary and in particular to obtain all necessary
information from the parties, from bank managers,
and the managers of
building societies and other financial institutions in relation to
monies of the joint estate which may have
been invested, in accounts
under their control.
2.2 To obtain information
from the auditors of private companies, the business and personal
accountants of both parties and such
other persons with the necessary
knowledge in relation to their personal affairs and tax matters.
2.3 To call for and
obtain balance sheets and other financial statements of all companies
and businesses in which the parties held
an interest.
2.4 To inspect books of
account relating to any company or business in which the parties held
an interest.
2.5 To inspect personal
bank statements, paid cheques, deposit books and personal statements
relating to the affairs and liabilities
of the parties compiled for
tax and other purposes.
2.6 To physically inspect
the assets of the joint estate and to make the necessary inventories
thereof.
2.7 To question the
parties and to obtain all explanations which the receiver and
liquidator may consider necessary for the purposes
of making the
division.
2.8 To locate assets of
the joint estate outside of the Republic of South Africa, to proceed
abroad to take evidence on commission,
de bene esse, for the purposes
of locating such assets and, to the extent necessary, to take control
and possession thereof, provided
that:
2.8.1 should the receiver
and liquidator, in his discretion or at the insistence of the
applicant incur any costs in relation to
the location of assets
abroad and/or to proceed abroad for the purposes of dealing with such
assets as contemplated in this order,
and locate no assets that
formed part of the joint estate as at the date of the divorce, the
costs pertaining to such investigation
and the like shall be paid
solely by the applicant from the applicant’s half-share of the
joint estate;
2.8.2 should the receiver
and liquidator, in his discretion or at the insistence of the
applicant incur any costs in relation to
the location of assets
abroad and/or to proceed abroad for the purposes of dealing with such
assets as contemplated in this order,
and locate any asset of any
value that formed part of the joint estate as at the date of the
divorce, the costs pertaining to such
investigation and the like
shall be paid jointly and in equal shares by the parties from their
respective half-shares in the joint
estate .
2.9 To deal with any
pension interest or accrued / deferred pension benefits which has
accrued or been deferred by any party, and
in particular to allocate
a portion of one party's pension interest, not exceeding 50% thereof,
to the other party as envisaged
by
s 7(7)
and
7
(8) of the
Divorce
Act, 1979
, and to cause the appropriate endorsement to be effected to
the pension records of such party's pension fund.
2.10 To sell the assets,
both movable and immovable, or any part thereof, by public auction or
by private agreement as may seem
most beneficial, with leave to both
parties in the event of a sale by public auction to bid thereat, or,
as opposed thereto, to
award any such assets to the parties by the
distribution thereof in specie, subject to such cash adjustments as
the circumstances
may render necessary, provided that should the
receiver and liquidator wish to sell any asset, he will first offer
same, in writing,
to the parties for purchase which offer shall be
open for 5 (FIVE) days. In the event that either of the parties
wish to
purchase such asset, the necessary cash adjustment as the
circumstances may render necessary must be made. If a cash
adjustment
cannot be made in the circumstances where a party elected
to purchase an asset, the purchase price must either be paid in cash
or secured by a final and unequivocal guarantee from a registered
financial institution within 14 (FOURTEEN) days of the election
to
purchase the asset being made. In the event of either party
only being able to secure a guarantee in principle within
14
(FOURTEEN) days as contemplated aforesaid, the receiver and
liquidator may, in his sole discretion, extend the period of 14
(FOURTEEN) days for up to a maximum of a further 30 (THIRTY) days.
Should any of the time periods in this paragraph not be
adhered to
and/or complied with, the option to purchase any such asset offered
for purchase by the receiver and liquidator shall
automatically lapse
and shall not be capable of revival save by mutual written agreement
between the parties.
2.11 To collect debts due
to the joint estate.
2.12 To pay or allocate
the liabilities of the joint estate.
2.13 To, during the
course of realising the joint estate, deal with the assets in his
discretion, including the freezing of bank
accounts.
2.14 To institute legal
proceedings out of any court with the necessary jurisdiction against
any person for the delivery to him
of such documents as he considers
necessary for the purposes of enabling him to discharge his duties.
2.15 To apply to Court on
notice to the parties for any further directions as he shall or may
consider necessary.
2.16 To deduct his fees
from the amount available for distribution to the parties after the
collection of all assets and the discharge
or allocation of all
liabilities, subject to para 2.8.1 or 2.8.2 above.
2.17 To bring into
calculation and/or reckoning in his distribution the reasonable
market value of any asset or the actual monetary
value of monies
belonging to the joint estate, as at the date of the divorce, that
either party may have disposed of, whether such
party received value
or full value thereof.
2.18 To bring into
calculation and/or reckoning in his distribution such payments as the
parties may agree were made by the respondent
to the applicant on
account of her share of the joint estate. Where the respondent
claims a payment was made as contemplated
in this paragraph and the
applicant disputes same, the receiver and liquidator shall submit
such determination, on application
and on notice to both parties, as
an opposed interlocutory application or such proceedings as he may
deem meet in the circumstances
in the event of a factual dispute, for
decision by this court.
2.19 To thereafter, but
subject to the powers hereinbefore set forth, determine the division
of the assets on behalf of the joint
estate after the payment of its
liabilities.
3.
3.1 The receiver and
liquidator shall, within a reasonable period of time after the
exercise by him of the powers referred to in
paras 2.1 to 2.19
hereof, furnish the parties with a provisional liquidation and
distribution account, to which account the parties
will be entitled
to raise objections within fourteen days from the date of receipt
thereof.
3.2 Should the receiver
and liquidator not receive objections within the period referred to
in para 3.1 hereof, the account shall
be deemed to have been
confirmed by the parties and the receiver and liquidator shall
proceed to make a distribution in accordance
with the tenor thereof.
3.3
3.3.1 Should the receiver
and liquidator, however, receive written objections from either or
both of the parties, after affording
them an opportunity of
submitting representations to him, he shall determine the objection
or objections and amend his account
in accordance with such
determination/ determinations and render a final amended account to
the parties marked “Final amended
account”.
3.3.2 In order to place
him in a position to make such determination / determinations the
receiver and liquidator shall be entitled
to apply to Court, on
notice to the parties, for such directions as he considers
necessary.
3.3.3 In the event of
either parties not being satisfied with the determination made in
terms of para 3.3.1 hereof, the party not
so satisfied shall, within
14 (FOURTEEN) days of the final amended account being provided to
parties, approach this court with
such legal proceedings to this
court as may be deemed meet, failing which the account will become
final and binding on the parties.
4. After the occurrence
of the events referred to in paras 3.2, 3.3.1 and 3.3.3 hereof, the
receiver and liquidator shall make a
distribution in accordance with
the relevant accounts, whereafter he shall be released of his duties
as receiver and liquidator.
In the event of either party acting
in terms of para 3.3.3 hereof, the receiver and liquidator shall make
no distribution until
such time that the contemplated legal
proceedings have been finalised.
5. The receiver and
liquidator shall be entitled to payment of his reasonable fees, which
fees he shall apportion equally between
the parties, subject to
paragraphs 2.8.1 and 2.8.2, and which fees shall be reflected in the
accounts referred to in paras 3.2
and 3.3.1 hereof.
6.
6.1 The costs of the
application (other than those arising from the respondent's
counter-application) shall be paid by the receiver
and liquidator out
of the assets of the joint estate on the basis that they are to be
brought into account in the liquidation thereof.
6.2 The
counter-application of the respondent is dismissed with costs, such
costs to include the costs consequent upon the engagement
of two
counsel.
_______________
CE
THOMPSON
ACTING
JUDGE OF THE HIGH COURT
APPEARANCES
For
the Applicant: Adv G Farber SC and L Segal
Instructed
by: Billy Gundelfinger Attorneys
011 728 7571
Johannesburg
For
the Respondents: Adv R Rosenberg
Instructed
by: Di Siena Attorneys
012 342 3311
[1]
Act 24 of 1936.
[2]
Act 88 of 1989.
[3]
2011 (6) SA 311 (SCA).
[4]
2017 (1) SA 342
(SCA).
[5]
Act 70 of 1979.
[6]
Revill v Revill
1969 (1) SA 325
(C) at 327
[7]
See generally
Yannakou v
Appollo Club
1974 (1) SA
614
(A) at 623G.
[8]
Bayat and Others v Hansa
and Another
1955 (3) SA
547
(A) at 553D – E
;
Betlane v Shelly Court CC
2011 (1) SA 388
(CC) para 29.
[9]
2012 (4) SA 593 (SCA).
[10]
(5034/2013) [2014] ZAGPPHC 521 (25 July 2014).
[11]
Liesching and Others v S
and Another
(CCT245/15)
[2016] ZACC 41
;
2017 (4) BCLR 454
(CC) para 30 and
the
authorities cited therein.
[12]
http://www.dictionary.com/browse/spouse
See
also https://www.collinsdictionary.com/dictionary/english/spouse
where ‘spouse’ is defined as
‘
Someone's
spouse is the person they are married to.’
See
also https://www.merriam-webster.com/dictionary/spouse where
‘spouse’ is defined as a ‘married person’.
[13]
Morar
,
supra para 16.
[14]
See para 23.
[15]
See Niekerk Practical Guide to Patrimonial Litigation in Divorce
Actions [2015] Issue 17 at para 3.3.3 and Appendix 3D thereto.
[16]
Brookstein v Brookstein
2016 (5) SA 210
(SCA) at para 15 to 21
[17]
Act 42 of 1956.
[18]
See, however
, Brookstein
,
supra.
[19]
‘the Liquidator shall afford both parties personally the
opportunity to make such representations to him about any matter
relevant to his duties. . .2.8.1 give due consideration to the
representation of the parties and to make such decisions in respect
thereof as he may deem fit. . . ‘