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[2019] ZAGPJHC 347
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U v U (29378/2017) [2019] ZAGPJHC 347 (26 September 2019)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 29378/2017
In
the matter between:
A[…]
U[…]
Applicant
and
C[…]
J[…] U[…]
Respondent
JUDGMENT
MATOJANE J
Introduction
[1]
The applicant brought an urgent application against the respondent,
his
wife, in which he sought, amongst other things, an
anti-dissipation order to interdict the respondent from utilising the
proceeds
from the sale of her immovable property in the manner of her
choice, and further to have such funds frozen, pending the outcome
of
the divorce proceedings.
[2]
The applicant also seeks costs
de bonis propriis
against the
respondent’s attorney, Mr Zimerman.
[3]
The urgent application was brought before Van der Linde J. On 24 July
2019, Van der Linde J made an order which directed that the
respondent’s attorney (Taitz & Skikne Attorneys) retain an
amount of R1 430 000 in an interest-bearing trust account
regulated by the provisions of s 78(2)A of the Attorneys
Act 53
of 1979 (or the equivalent section contained in the
Legal Practice
Act 28 of 2014
). This amount was to be retained until the
finalisation of the present proceedings. The amount of R1 430 000
relates
to a portion of the proceeds from the sale of immovable
property registered in the respondent’s name.
[4]
Taitz & Skikne Attorneys was further ordered to retain the funds
without
deductions of any nature whatsoever, and from whatever cause
arising. The attorney would only be permitted to disburse the funds
in terms of the written agreement signed by the applicant and the
respondent, or in terms of an order of the court.
[5]
The applicant and respondent were married to one another on 9
February
1992. The matrimonial property regime is governed by an
antenuptial contract concluded between the parties and registered at
the
Deeds Registry. Under the antenuptial contract, the parties are
married out of community of property subject to the accrual system
in
terms of Chapter 1 of the Matrimonial Property Act 88 of 1984 (the
‘
Matrimonial Property Act&rsquo
;).
[6]
During the course of the marriage, the parties resided in the
matrimonial
home. This property was registered in the name of the
respondent, but was paid for by the applicant. It is the proceeds
from the
sale of this immovable property that is the subject of the
anti-dissipation application. The matrimonial home is the single
biggest
asset in respondent’s estate and the applicant contends
that it is subject to his accrual claim. In this regard, the
applicant
claims to have disposed of the assets in his estate to
maintain the joint household.
[7]
During February 2017, the respondent issued divorce summons against
the
applicant. The respondent contends that insofar as the applicant
may have a right to a share in the accrual in the respondent’s
estate, given the fact that the respondent’s estate may show a
higher accrual than in applicant’s estate, the respondent
prays
for a forfeiture order in terms of the provisions of s 9 of the
Act.
[8]
The applicant has served and filed a plea and counterclaim to the
respondent's
action, alleging that the respondent would unduly
benefit if an order is not made in terms of which the respondent
forfeits the
benefit of accrual sharing.
Legal
framework
[9]
A spouse
married out of community of property in terms of an antenuptial
contract with accrual has no vested rights in any of the
assets,
investments or properties registered in the name of the other spouse.
The
Matrimonial Property Act makes
it clear that it is only on
dissolution of the marriage that a spouse acquires a right to claim
half of the net accrual of the
other spouse’s estate. Before
that dissolution, a spouse who has an accrual in his or her estate
that is smaller than the
accrual in the other spouse’s estate
has only a contingent right to claim half of the accrual in the
estate of the other
spouse – not a vested right. The
applicant’s claim for a share in the accrual of his spouse will
only become a vested
right when the contingency materialises, which
may include a dissolution of the marriage by divorce or by death.
[1]
[10]
An
application by a spouse married out of community of property for an
anti-dissipation interdict
pendente
lite
to
protect a contingent right of accrual will only be granted in the
clearest of cases.
[2]
The
applicant will have to demonstrate the following: a well-grounded
apprehension of irreparable harm; that the respondent has
no bona
fide defence to the contingent right which is claimed; and that the
respondent intends to defeat the claim or render it
hollow by
dissipating or secreting the assets.
[3]
The
applicant’s case
[11]
The applicant claims that he is entitled to a portion of the accrual
in the respondent’s
estate for two reasons. Firstly, he
contends that he is the spouse showing a lower accrual;
alternatively, that he is the spouse
with no accrual at all.
Accordingly, the applicant claims that he is entitled to share in the
difference in value between the accrual
in his separate estate and
the separate estate of the first respondent. Secondly, the applicant
claims he has a right to a share
in his spouse’s accrual by
virtue of the fact that he is entitled to a forfeiture, particularly
in light of the extent of
his contribution to the estate of the
respondent.
[12]
The applicant submits that he is entitled to protect this contingent
right by applying
to this Court for an interdict
pendente lite
,
to prevent and prohibit the respondent from dissipating the value of
her separate estate, in a manner prejudicial to the applicant’s
contingent right, prior to the determination of the divorce action.
[13]
The applicant further states that he is solely responsible for the
accrual in the respondent’s
estate and that he depleted his own
estate to ensure that the respondent retained the matrimonial home.
He states that he sold
his assets to maintain the respondent and the
children, and to ensure that the matrimonial home registered in the
name of the respondent
is preserved. He states that he is no longer
possessed of any assets.
[14]
He accuses the first respondent of refusing to contribute to the
financial affairs of the
family, conducting extramarital affairs,
being an ‘advantage-taker’ who did not pull her weight
during the marriage,
and who has failed to honour the reciprocal duty
of support which the respondent owes to the children and himself.
[15]
He avers that the first respondent has no bona fide defence to his
claim and that the respondent
intends to defeat his claim or render
it hollow by the dissipation of the proceeds from the sale of the
immovable property.
[16]
The launching of this application was precipitated by the refusal of
the first respondent
to provide the applicant with an undertaking to
the effect that the proceeds from the sale of the matrimonial home be
retained
by the conveyancer in trust, and only to be disbursed in
accordance with the order of the court, alternatively by agreement
between
the applicant and the respondent.
[17]
The crux of the matter, according to the applicant, is the following—
‘
I
respectfully state to the above Honourable Court, regard being had to
particularly the emphasised portions of the above paragraphs
that it
is clear and unambiguous that the respondent does indeed intend to
dissipate the entire net proceeds from the sale of the
matrimonial
home for her own benefit. This contention is exacerbated by the
disingenuous and furtive statements by the respondent
to the effect
that no undertakings will be given until the proceeds from the sale
of the matrimonial home “
are available”
followed
by the contention that I have no reason to believe that the nett
proceeds from the sale of the matrimonial home will “
not to
be spent properly
”. Clearly if this is indeed the case,
then the respondent ought simply to have given the undertaking as
requested. The respondent
cannot be believed’.
[18]
The applicant contends that he has a well-grounded apprehension of
irreparable harm, because
the respondent has contended that once the
funds are available, the respondent will unilaterally decide how the
funds will be spent.
The applicant stated that should he wait for the
funds to be available and for the respondent to exercise a unilateral
discretion,
over which he has no control, then he would effectively
have lost any right to urgently approach the court for the relief
that
he seeks in this application.
[19]
The applicant claims that he has no alternative remedy available to
him, should the respondent
be permitted to unilaterally determine the
fate of the funds derived from the sale of the matrimonial home. He
stated that he would
have effectively lost all rights which he may
have to share in the accrual, given the fact that the matrimonial
home is the respondent’s
only asset. Once the funds derived
from the sale of the matrimonial home have been dissipated, the
respondent has no other assets
of any nature whatsoever which would
enable the respondent to pay to him in the sum found to be due owing
and payable by the divorce
court.
[20]
Lastly, he contends that the balance of convenience favours him,
because the disposal of
the funds derived from the sale of the
matrimonial home which does not take cognizance of his rights will
cause him irretrievable
prejudice as the respondent will not have the
financial wherewithal to make payment of the sum found to be lawfully
due to him.
The
respondent’s case
[21]
The respondent denies that she intends to dissipate the proceeds of
the sale of the immovable
property, as she requires the funds for
day-to-day living and to support the two minor children born from the
marriage. The respondent
states that she would possibly invest in a
cheaper property, or put the money on an investment to earn interest
thereon in order
to supplement her income. She alleges that she does
not earn enough to maintain herself and the children, and that the
applicant
is not maintaining his family.
[22]
The respondent disputes the applicant’s contention that he has
a contingent right
which will become a vested right in due course.
She submits that the applicant fails to take the Court into his
confidence by declaring
his actual asset value, and claims that
certain of his assets have been hidden. She submitted that the issue
of forfeiture might
well be determined against the applicant, having
regard to the allegations of substantial misconduct set out in detail
in the answering
affidavit.
[23]
The respondent stated that she had contributed to the marriage
equally by running the matrimonial
home and raising four children.
She submits that she has sacrificed her career and ability to earn,
while the applicant continued
with his career and made a fortune.
[24]
The respondent avers that applicant put his needs before those of his
children, and has
reneged on his obligations towards his family. She
alleges that he refuses to maintain them properly as a tactic in the
divorce
proceedings. The respondent states that the applicant refuses
to disclose certain and material essential factors necessary in
considering
the value of his estate namely:
24.1
The applicant appears to have funds hidden overseas to the value of
approximately R2 million;
24.2
The applicant has hidden his valuable watch collection which is
estimated to be in excess R1million;
24.3
The applicant is still the owner of two businesses (of which he is
the registered owner) and
has not disclosed the value of such
businesses. The respondent further states that the applicant has not
disclosed the value of
the assets of such businesses, and what
happened to those businesses.
24.4
A valuable art collection belonging to the applicant was stolen in
that it was removed and placed
with the applicant’s friend,
Ashley Karro (‘Karro’);
24.5
That the applicant is involved in illegal and illicit dealings which
includes the running of
a prostitution service, for which he does not
account;
24.6
The applicant does not disclose his actual earnings – which,
according to the respondent,
are substantially higher than what he
has declared.
The
applicant’s reply
[25]
In his replying affidavit, the applicant seeks an adverse order of
costs against both the
respondent and her attorney of record, Mr
Zimerman, jointly and severally, on the attorney and client scale
de
bonis propriis
. The applicant and his attorney contend that Mr
Zimerman is giving the respondent bad legal advice, violating his
duty of care,
and advancing his own agenda. In paragraph 7.2 of the
replying affidavit the applicant states:
‘
The
answering affidavit is an emotional, hysterical and vitriolic body of
diatribe which is mulcted with
inter alia
, inadmissible
hearsay evidence, irrelevant evidence which does not contribute one
way or the other to a decision been made in the
application,
scandalous matter which is worded to be abusive and defamatory and
intentionally so, vexatious matter designed for
maximum effect to
annoy and embarrass and material of an argumentative and superfluous
nature. The respondent’s
modus operanti
in this regard
is to disguise the fact that no defence is set out in the answering
affidavit to the application and to attempt
to side-track the main
issues in the application.’
[26]
The applicant states that the time and place to explain the fate of
his watch collection
will be during the divorce action and
accordingly, the contentions by the respondent are irrelevant to the
issues in the application.
The applicant does not deny that he
removed the art collection and placed them with Karro. He states that
the artwork to which
the respondent refers to was not stolen by him;
it belonged to him and was never given as a gift to the respondent,
which is what
she contends.
Legal
conclusions
[27]
The
respondent’s case throughout the matter has been that she
requires the funds for day-to-day living in order to support
herself
and the children born of the marriage. She requires the funds to be
invested so that she can earn interest which would
supplement her
income. She is also considering purchasing a smaller property to
reside in with her children, or to rent such accommodation
with these
funds. There is no suggestion that the respondent is involved in a
scheme, actuated by bad faith, to dissipate the proceeds
of the sale
of the matrimonial home in order to deny the appellant his potential
share of the accrual. The dictum of the Appellate
Division
Knox
D’Arcy Ltd and Others v Jamieson and Others
[4]
is apposite in this case, wherein Grosskopf JA stated that:
‘…
[T]here would not
normally be any justification to compel a respondent to regulate his
bona fide
expenditure so as to retain funds in his patrimony
for the payment of claims (particularly disputed ones) against him. I
am not,
of course, at the moment dealing with special situations
which might arise, for instance, by contract or under the law of
insolvency.’
[28]
The Court further elaborated on the nature of an anti-dissipation
interdict and stated:
‘
The question which
arises from this approach is whether an applicant need show a
particular state of mind on the part of the respondent,
ie that he is
getting rid of the funds, or is likely to do so, with the intention
of defeating the claims of creditors. Having
regard to the purpose of
this type of interdict, the answer must be, I consider, yes, except
possibly in exceptional cases. As
I have said, the effect of the
interdict is to prevent the respondent from freely dealing with his
own property to which the applicant
lays no claim. Justice may
require this restriction in cases where the respondent is shown to be
acting
mala
fide
with the intent of preventing execution in respect of the applicant's
claim….’
[5]
[29]
In my view, the applicant has failed to establish that he will suffer
irreparable harm
if the respondent is allowed to use the proceeds of
the sale of her house to provide for her living expenses and support
of their
children. There is no evidence that the conduct of the
respondent is actuated by fraudulent intent to prejudice applicant’s
claim or that the respondent was intentionally secreting assets with
a view to frustrating a possible subsequent judgment against
her.
[30]
I am of the view that the balance of convenience favours the
respondent. The order that
the applicant has applied for in these
proceedings is drastic, in that it would limit the respondent’s
right to use her money
to provide for herself and the children in
circumstances where an order for forfeiture of the benefits would
prevent the parties
from participating in the accrual of the other
parties’ estate.
Costs
[31]
The applicant in the replying affidavit and heads of arguments seeks
an order of costs
de bonis propriis
against the respondent’s
attorney of record. He contends that the answering affidavit is
drafted in an unnecessarily objectionable
and abusive manner,
containing defamatory allegations of fraud, lurid conduct and other
incidences of illegality without proof.
The applicants complains that
a series of WhatsApp messages between the applicant and respondent
were unnecessarily annexed to
the answering affidavit.
[32]
The relationship between the parties is acrimonious and there is much
mud-slinging in the
affidavits. Mr Zimerman points out in his Heads
of Argument, that the mud-slinging commenced in the founding
affidavit with scathing
allegations against his client, which
required and warranted a response, and he was obliged to advise his
client to set out the
true facts in relation to the issues in detail
in the answering affidavit.
[33]
In
Multi-Links
Telecommunications v Africa Prepaid Services Nigeria Ltd
,
[6]
the principles relating to costs
de
bonis propriis
were set out as follows:
‘
Costs
are ordinarily ordered on the party and party scale. Only in
exceptional circumstances and pursuant to a discretion judicially
exercised is a party ordered to pay costs on a punitive scale. Even
more exceptional is an order that a legal representative should
be
ordered to pay the costs out of his own pocket. It is quite correct,
as was submitted, that the obvious policy consideration
underlying
the court’s reluctance to order costs against legal
representatives personally, is that attorneys and counsel
are
expected to pursue their client’s rights and interests
fearlessly and vigorously without undue regard for their personal
convenience. In that context they ought not to be intimidated either
by their opponent or even, I may add, by the court. Legal
practitioners must present their case fearlessly and vigorously, but
always within the context of set ethical rules that pertain
to them,
and which are aimed at preventing practitioners from becoming parties
to a deception of the court. It is in this context
that society and
the courts and the professions demand absolute personal integrity and
scrupulous honesty of each practitioner.
…
It is true that legal
representatives sometimes make errors of law, omit to comply fully
with the Rules of Court or err in other
ways related to the conduct
of the proceedings. This is an everyday occurrence. This does not
however per se ordinarily result
in the court showing its displeasure
by ordering the particular legal practitioner to pay the costs from
his own pocket. Such an
order is reserved for conduct which
substantially and materially deviates from the standard expected of
the legal practitioners,
such that their clients, the actual parties
to the litigation, cannot be expected to bear the costs, or because
the court feels
compelled to mark its profound displeasure at the
conduct of an attorney in any particular context. Examples are,
dishonesty, obstruction
of the interests of justice, irresponsible
and grossly negligent conduct, litigating in a reckless manner,
misleading the court,
and gross incompetent and a lack of care.’
[34]
Taking into account the particular circumstances of this case, I am
not persuaded that
the conduct of the respondent’s attorney
complained of is grossly unreasonable and negligent to warrant a
punitive costs
order.
In
the result, I make the following order:
1. The
application is dismissed with costs.
_____________________________
K
E MATOJANE
JUDGE
OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Date of hearing:
14 August 2019
Date of judgment:
26 September 2019
Appearances:
Applicant’s
Attorneys:
Mr Howard S Woolf
Counsel
for the Respondent:
Mr R Zimerman
Respondent’s
Attorneys:
Taitz & Skikne
Counsel
for Mr Zimerman:
Mr L Marks
Attorney
for Mr Zimerman:
Larry Marks Attorneys
[1]
Section 3
of the
Matrimonial Property Act provides
as follows:
(1)
At the dissolution of a marriage subject to the accrual system, by
divorce or by the death of one
or both of the spouses, the spouse
whose estate shows no accrual or a smaller accrual than the estate
of the other spouse, or
his estate if he is deceased, acquires a
claim against the other spouse or his estate for an amount equal to
half of the difference
between the accrual of the respective estates
of the spouses.
(2)
Subject to the provisions of
section 8(1)
, a claim in terms of
subsection (1) arises at the dissolution of the marriage and the
right of a spouse to share in terms of
this Act in the accrual of
the estate of the other spouse is during the subsistence of the
marriage not transferable or liable
to attachment, and does not form
part of the insolvent estate of a spouse.
[2]
See
RS
v MS and Others
2014 (2) SA 511
(GJ) para 18 where the Court stated that, ‘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.’
[3]
RS v MS
and Others
2014 (2) SA 511
(GJ) paras 17-18.
[4]
Knox
D’Arcy Ltd and Others v Jamieson and Others
[1996] ZASCA 58
;
1996 (4) SA 348
(A) at 372H-I.
[5]
Ibid
at 372F-H.
[6]
Multi-links
Telecommunications Ltd v Africa Prepaid Services Nigeria Ltd and
Others, Telkom SA SOC Ltd and Another v Blue Label
Telecoms Ltd and
Others
2014 (3) SA 265
(GP) paras 35-36.