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[2014] ZASCA 137
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B v B (700/2013) [2014] ZASCA 137 (25 September 2014)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
NOT
REPORTABLE
Case
no: 700/2013
In
the matter between:
D
E
B
...................................................................................................................................
APPELLANT
and
M
G
B
...............................................................................................................................
RESPONDENT
Neutral
citation:
B v B
(700/2013)
[
2014]
ZASCA 137
(25 September 2014)
Coram:
Lewis, Tshiqi and Theron JJA and Mocumie and
Gorven AJJA
Heard
:
3 September 2014
Delivered
:
25 September 2014
Summary:
In an accrual claim under
s 3(1)
of the
Matrimonial Property Act 88 of 1984
, the defendant contended that no
accrual had been proved and the trial court had erred in granting an
order based on such an accrual.
The appeal against that order was
dismissed on the basis that an accrual had been shown to the estate
of the defendant and none
to that of the plaintiff save that the
accrual calculation was calculated differently. Admissibility of
documents discussed.
ORDER
On
appeal from:
KwaZulu-Natal High Court,
Durban (Lopes J sitting as court of first instance):
1 The appeal is
dismissed with costs, save to the extent that the order of the court
a quo is amended as set out below.
2 Paragraphs (a),
(b) and (d) of the order of the trial court are amended to read as
follows:
‘
(a)
The defendant is to pay to the plaintiff the sum of R
6
478 717.75
by no later than 30
November 2014.
(b)
The defendant is directed to transfer to the plaintiff an amount
equal to one-half of the defendant’s loan account in
Full House
Taverns (Pty) Ltd as at the date of divorce.
(d)
(i) The defendant is to pay the plaintiff’s costs of the
action.
(ii)
The plaintiff is to pay the costs of the applications to compel her
to attend on the defendant’s psychologist.
(iii)
The defendant is to pay all reserved orders for costs not dealt with
in paragraph (d)(ii), save that, where those costs relate
to
applications concerning the custody of the minor children, each party
is to pay his or her own costs.’
JUDGMENT
Gorven
AJA
(Lewis, Tshiqi and Theron JJA
and Mocumie AJA concurring)
[1]
This appeal concerns a claim by the respondent (the plaintiff in the
court a quo) for one half of what had accrued to the estate
of the
appellant (the defendant in the court a quo) during just over 14
years of the marriage between the parties. I shall refer
to the
parties as the plaintiff and the defendant respectively.
In
the divorce action all the other issues between the parties were
resolved, including those relating to the minor children of
the
parties which had given rise to a number of pre-trial applications
and conferences. A consent order for a decree of divorce
and the
other settled issues was granted on 7 June 2013 at the end of the
trial. The only contentious issue in the end was whether
or not an
accrual had occurred to the estate of the defendant and, if so, the
extent of that accrual. There had been no accrual
to the estate of
the plaintiff.
[2]
After reserving judgment on the accrual claim, the trial judge
granted the following order:
‘
(a)
The defendant is to pay the plaintiff the sum of R7 324 984.63
by no later than the 31
st
August 2013;
(b)
The plaintiff is declared to be the owner of one half of the
defendant’s loan account in Full House Taverns (Pty) Ltd;
(c) In the interim,
and pending the payment of the amount in (a) above by the defendant
to the plaintiff, the defendant is to continue
paying maintenance to
the plaintiff pursuant to the agreement reached between the parties
in the
Rule 43
proceedings;
(d) The defendant is
to pay the plaintiff’s costs of the action, including all
reserved orders for costs, save those with
regard to the applications
to compel her to attend on the defendant’s psychologist and the
plaintiff is to pay the defendant’s
costs of those
applications;
(e) All costs are to
include the costs of senior counsel, and two counsel, where
applicable.
(f) In any report of
this judgement, no person other than the advocates, the attorneys
instructing them, or persons (other than
the parties, members of the
extended families and their children) identified by name in the
judgement itself, may be identified
by name or location. In
particular the anonymity of the children and the adult members of
their family must be strictly preserved.
If reported, it shall be the
duty of the Law Reporters to carry out this part of the order.’
[3]
With the leave of the trial court, the defendant appeals against
paragraphs (a) to (d) of the order, asking that they be substituted
with an order that:
‘
(a)
The Plaintiff’s claim for payment of any
amount in terms of the accrual system, referred to in Chapter 3 of
the
Matrimonial Property Act, No. 88 of 1984
, be dismissed,
alternatively that there be absolution from the instance.
(b)
The Plaintiff is to pay the Defendant’s costs of the action,
including all reserved orders for costs, and including those
with
regard to the applications to compel her to attend on the Defendant’s
psychologist.’
It
can therefore be seen that the amount awarded is attacked as is the
order declaring the plaintiff the owner of one half of an
asset of
the defendant, namely his loan account in Full House Taverns (Pty)
Ltd (Full House Taverns).
[4]
The
parties
were
married to each other out of community of property with the
application of the accrual system.
The
Matrimonial Property Act
[1
]
introduced
into South African Law the system of accrual which could be made
applicable to marriages contracted out of community
of property and
of profit and loss by way of an antenuptial contract (ANC). In
addition to excluding community of property and
of profit and loss,
under this regime a claim (an accrual claim) arises at the
dissolution of the marriage ‘for an amount
equal to half of the
difference between the accrual of the respective estates of the
spouses’.
[2]
[5]
Since community of property is excluded,
each spouse maintains a separate estate. If a spouse so desires, the
assets which make
up the separate estate are under his or her sole
control. In an accrual claim, therefore, the spouse making the claim
often has
little or no knowledge of the assets which make up the
estate of the other party. It is presumably for this reason that the
legislature
enacted
s 7
of the Act, the relevant parts of which
are as follows:
‘
When
it is necessary to determine the accrual of the estate of a spouse …
that spouse … shall within a reasonable
time at the request of
the other spouse … furnish full particulars of the value of
that estate.’
It
is therefore clear that the legislature requires that a spouse
furnish full particulars if requested. The relevance of the
requirement
to this action will become clear in due course.
[6]
The ANC of the parties deals in paras 7 and 8 with the commencement
values and the approach to calculating the accrual claim.
Paragraph 7
declares the nett value of the estate of the defendant at the
inception of the marriage to be R2 543 939.
This is said to
be made up of two parts, reflected as follows:
‘
(i)
R1 438 000,00 . . . consisting of interest in immovable
property, cash on hand, claims receivable, shares and interest
in
companies and corporations, investments and movable assets.
(ii)
R1 105 939,00 . . . being the value of [the] option to
purchase shares at agreed price in Aristocrat Leisure Limited.’
[7]
Paragraph 8 provides that certain assets (the excluded assets) ‘shall
not be taken into account as part of each party’s
estate at
either the commencement or the dissolution of the marriage’.
[3]
These were said to comprise the following:
‘
1.
The value of all amounts standing to the credit of the following bank
accounts:
Standard Bank,
Sandton City Branch, Account Number […]; and
Investec Bank,
Durban, Account Number […]
as at 1st March
1999.
2. Any balance of
any proceeds of the sale of shares and any other interest or claim in
respect of A L I Gaming Solutions (Pty)
Limited.
3. The value of the
interest in the immovable property situated at 47 R[…], 208
C[…] Road, Durban and the proceeds
of any alienation thereof.
4. Any interest in
Propwell CC and the proceeds of any alienation thereof.
5. The value of
shares held in respect of SISA and the proceeds of any alienation
thereof.
6. The value of all
shares held in the Hamilton Airship Company and the proceeds of any
alienation thereof.
7. The value of any
claim against Propwell CC, or the value of any asset acquired with
the proceeds of such claim.
8.
The value of the rights arising in respect of the option to purchase
shares in Aristocrat Leisure Limited, the value of any shares
purchased in terms thereof, and the value of any proceeds of the
alienation of such shares.’
Admissibility
of documents discovered by the defendant; assertions in
cross-examination
[8]
The only evidence led by either party regarding the accrual was that
of Mr Peter Duncan, a chartered accountant who was called
by the
plaintiff. The defendant neither testified nor called any witnesses
to do so on his behalf.
[9]
On appeal it was contended on behalf of the defendant that Mr
Duncan’s evidence was inadmissible as it was based on hearsay.
When Mr Duncan was called, and before he had given any evidence,
counsel for the defendant indicated that she objected to his being
called on two bases. She summarised the objection as follows, ‘We
have difficulty in understanding how he can testify to
factual
matters and we believe it would, of necessity, venture into opinion
evidence’. The court a quo ruled, ‘We will
deal with that
as it arises’. This quite clearly meant that, if Mr Duncan
ventured into either of those forbidden territories,
the defendant
would need to object at that point. The objection would then be dealt
with. The only objection made by the defendant
during the leading of
his evidence was early on when Mr Duncan produced a schedule to which
he wished to refer. The objection at
that stage was that the schedule
had not been seen until then and that no rights were being waived
‘that arise from late
documentation’. When it emerged
that the schedule simply contained a compilation of amounts reflected
in the documents discovered
under oath by the defendant and used by
his own accountant to compile a similar schedule, no further issue
was made of this. Accordingly,
after the defendant had been given the
opportunity to consider the schedule, it was used without any renewal
of the objection.
No objections were made to the use by Mr Duncan of
the defendant’s discovered documents or to their authenticity.
[10]
At the outset, Mr Duncan was asked ‘[W]ere you given seven
lever arch files containing all of the defendant’s discovered
documents?’ His reply was in the affirmative. This evidence was
never challenged. He indicated that, from the discovered
documents,
he had drawn up a schedule which set out the defendant’s assets
and liabilities at the end of each tax year of
the marriage. Apart
from the 1999 tax year and that ending in February 2013, he had taken
the figures for his schedule from the
defendant’s tax returns
for the years in question. The 1999 information was based on the
defendant’s declaration of
assets and liabilities as at 28
February 1999 to the Gambling Board which was signed by him on each
page. The 2013 figures included
in Mr Duncan’s schedule were
taken from a statement of assets and liabilities as at
28 February 2013 drawn up and
discovered by the defendant.
[11]
During the cross-examination of Mr Duncan, counsel for the defendant
handed in a schedule and posed questions based on it.
In response to
a question by the trial judge, counsel said that this had been drawn
up by an accountant employed by the defendant,
Ms Wright. It had been
compiled from the same discovered documents as those provided to the
plaintiff. In other words, Ms Wright
used the same documents as did
Mr Duncan. These documents resulted in the schedule prepared by her
which, it was asserted during
cross-examination, reflected the assets
and liabilities of the defendant as at 30 April 2013.
[12]
On appeal, the defendant’s counsel submitted that, apart from
the ANC, there ‘was no agreement as to the status
of any other
documents and thus the authenticity of any such documents needed to
be proved’ as regards ‘the value of
the estate of the
[defendant] as at date of divorce’. I have outlined how the
evidence based on the documents emerged. In
the first place, there
was no objection to the statement that Mr Duncan had based his
schedules on all of the discovered documents
of the defendant.
Secondly, there was no objection ‘as it arises’ to Mr
Duncan referring to the discovered documents.
Thirdly, the
defendant’s counsel introduced Ms Wright’s schedule into
evidence, saying that it was based on the very
same documents used by
Mr Duncan on the basis that this schedule accurately reflected the
assets and liabilities of the defendant
as at 30 April 2013. There
was, finally, no challenge to the authenticity of the documents
relied on by both accountants.
[13]
In
S
v W
[4]
this
court held that assertions made during cross-examination could be
regarded as admissions. This was dealt with by Ogilvie Thompson
JA as
follows:
‘
From
all the foregoing it thus becomes abundantly plain that,
while disputing the major issue of intercourse as deposed to
by
F, appellant, through his attorney, at the same time asserted: (i)
that money had been paid by him to F in a total sum exceeding
that
which she herself maintained; and (ii) that he had been in F's
company only on “one night in January, 1961”, when
intercourse might possibly have occurred while he was drunk. Although
advanced only in cross-examination, these assertions
were
specifically and deliberately made: the facts of the case do not
admit of the possibility of any error on the part of the
cross-examining attorney. In the context of F's evidence, these
assertions must, in my view, be regarded as unequivocal admissions
by
appellant of the matters so asserted. Having been made during the
actual hearing in the trial court, the admissions in
question
require, in my judgment, no additional formal proof before they may
be used against appellant’.
[5]
In
the context of civil litigation,
Nkuta
v Santam Assuransie Maatskappy Bpk
[6]
followed this approach, saying:
‘
Hoewel,
soos reeds gemeld, die verweerder sy saak gesluit het sonder om
enige getuie te roep, is hy gebonde aan die saak wat
formeel as 'n
feitlike bewering deur sy raadsman in die ope Hof aangekondig en aan
'n getuie van die teenparty gestel is.’
[7]
[14]
The thrust of these cases cannot be avoided by the defendant in these
circumstances. The assertions of the defendant, as put
by his counsel
during cross-examination, amounted to ‘unequivocal’
admissions. These were at least twofold; an admission
that the
documents used by Mr Duncan and Ms Wright were authentic in that they
were relied on by the defendant to place his financial
position
before the court for the purpose of the accrual claim and an
admission as to the actual amount owed to him by Full House
Taverns.
[8]
[15]
The submission meets a further difficulty when it is made on appeal.
As was mentioned earlier, no objection was raised
to any of the
evidence given by Mr Duncan at the trial. This after the trial court
ruled that objections should be made at the
time that objectionable
evidence was introduced. If no objection is made during a trial, an
appeal court cannot consider an objection
of this nature. In
Transnet
Limited v Newlyn Investments (Pty) Limited
[9]
Cloete JA held:
‘
.
. .
So
far as this court is concerned, it is a salutary principle that an
appeal court will not entertain technical objections to documentary
evidence which were not taken in the court below and which might have
been met by the calling of further evidence . . . It would
be
unfortunate in cases such as the present if a party could claim a
forfeit on appeal.’
[10]
[16]
Counsel for the defendant sought to distinguish this matter
submitting that, because the issue had been raised in heads of
argument before the trial court, the dictum in
Transnet
did not apply and the objection could be dealt with on appeal. At
that stage, the parties had already closed their cases. Without
a
formal application to reopen the case, the objection could not have
been met by calling evidence. We know, too, that all of the
documents
in question were those of the defendant. The plaintiff was hardly
obliged to call him as a witness. Counsel for the defendant
submitted
that use could have been made of Rule 35(10) of the Uniform Rules of
Court.
[11]
It seems to me that
to require the plaintiff to have done so in the circumstances of this
matter would be to adopt an unduly formalistic
approach.
[17]
The approach of counsel for the defendant in this matter differs
markedly from the salutary approach adopted by counsel in
Zungu
.
Counsel for the defendant quite properly alerted counsel for the
plaintiff to the fact that he would take the point in argument
that
there had not been sufficient proof by way of admissions made under
cross-examination. As a result, counsel for the plaintiff
sought a
ruling from the court on this issue before closing his case. In the
present matter, the defendant’s counsel did
not in a similar
way alert that of the plaintiff but raised the issue for the first
time in argument. This despite a specific ruling
by the trial judge
that objections should be raised as the basis for them arose. In the
light of what was said above on the issue
of assertions put on behalf
of the defendant and the dictum in
Transnet Ltd
, I am of the
view that no forfeit can be claimed on appeal and the objection ought
not to be dealt with.
[18]
Counsel for the defendant submitted on appeal that the evidence of Mr
Duncan amounted to expert opinion evidence and should
therefore be
excluded. It is my view that his evidence did not amount to that of
an expert giving an opinion. As Mr Duncan himself
said, ‘This
is purely a compilation engagement. I purely compiled this straight
off the documentation that was there and
put it in a format that
would be more easily understood by everybody, as opposed to having to
go through hundreds of files looking
at different documents.’
[19]
Undeterred, counsel for the defendant submitted that, if this was the
case, the evidence of Mr Duncan was ‘supererogatory
evidence’.
It has been held by this court that, unless an expert witness can
give the court ‘appreciable help’,
evidence which is not
of an expert nature is ‘supererogatory and superfluous’.
[12]
It was clear that the documents discovered were voluminous. Even the
defendant, who is himself a chartered accountant, contracted
Ms
Wright to perform a similar exercise. The work done by Mr Duncan and
his evidence certainly had the effect of saving the time
of the court
and the expense of the parties, and was accordingly of appreciable
help. It was therefore in no way superfluous or
inadmissible. In any
event, similar considerations arise to the other objection since it
was not raised during evidence.
The
estate of the defendant
[20]
What, then, did the evidence disclose? There was agreement on the
following. There were two immovable properties owned by the
defendant. These were reflected in Mr Duncan’s schedule at cost
price plus cost of improvements but were reflected in that
of Ms
Wright as being the market values from figures supplied to her. These
were agreed by the plaintiff. A Landrover vehicle owned
by the
defendant was also reflected in Ms Wright’s schedule at a value
obtained by her and this was also agreed to by the
plaintiff. All of
the balances shown in Ms Wright’s schedule for the defendant’s
overseas investments and bank accounts
were accepted. It was agreed
that a cash payment of R700 000 had been made to the plaintiff
and two vehicles, one valued at
R260 000 and one at R100 000,
had been transferred to her during an attempt to reconcile and that
these amounts should
be deducted from any accrual claim if the
reconciliation failed.
[21]
This left the following differences between the parties. First, the
commencement value which must be used in the accrual calculation.
Secondly, the value of the defendant’s loan account in Full
House Taverns. Thirdly, the amount which the defendant owed a
Family
Trust (the Trust) of which he was a trustee and which shall not be
named in this judgment so as to preserve the anonymity
of the parties
and their children. Fourthly, which of the assets of the defendant at
dissolution, if any, should be excluded from
the accrual calculation.
Finally, the schedule prepared by Ms Wright included liabilities of
approximately R1.37 million for estimated
legal and related fees
which found no expression in any prior schedule discovered by the
defendant. I shall deal with each in turn.
[22]
The commencement value of the defendant’s estate requires the
construction of paras 7 and 8 of the ANC. It will be recalled
that a
commencement value was declared (the declared value). This was said
to comprise certain assets. Paragraph 7 declares that
the
commencement value totalled R2 534 939. The paragraph did
not leave it at that. The assets which made up this amount
were
listed. Paragraph 8 then provided that the excluded assets and assets
which derive from them should not be taken into account
either at the
commencement or the dissolution of the marriage.
[23]
This means that, where an excluded asset forms part of the value
declared in para 7, the declared value must be reduced by
the value
of that asset. What remains after the deduction is the commencement
value (the accrual commencement value) to be used
for the purpose of
the accrual claim.
The
shares option
[24]
Applying this approach to the facts, therefore, the value of the
option to purchase shares in Aristocrat Leisure Limited (the
shares
option) must be subtracted from the declared value. This is because
that asset is an excluded asset as specified in para 8.
This
obtains equally for any other assets which are referred to in both
paras 7 and 8. This is where the evidence of Mr Duncan
was
material. He gave unchallenged evidence linking the other excluded
assets specified in para 8 to those referred to in
the first
part of para 7. He did this by reference to the declaration of
the defendant to the Gambling Board of his assets
and liabilities as
at the end of February 1999. The ANC was executed on 11 March 1999, a
few days later. After Mr Duncan had completed
this exercise, the only
assets not identified as excluded assets had a value of R108 000.
The position regarding unchallenged
evidence was set out in
President
of the Republic of South Africa & others v South African Rugby
Football Union & others
to the following effect:
[13]
‘
The
institution of cross-examination not only constitutes a right, it
also imposes certain obligations. As a general rule it is
essential,
when it is intended to suggest that a witness is not speaking the
truth on a particular point, to direct the witness’s
attention
to the fact by questions put in cross-examination showing that the
imputation is intended to be made and to afford the
witness an
opportunity, while still in the witness-box, of giving any
explanation open to the witness and of defending his or her
character. If a point in dispute is left unchallenged in
cross-examination, the party calling the witness is entitled to
assume
that the unchallenged witness’s testimony is accepted as
correct.’
This
means that the plaintiff proved that the accrual commencement value
of the defendant’s estate, after deducting the excluded
assets
from the declared value, was R108 000.
[25]
The Act requires the application of the Consumer Price Index (the
CPI) to the accrual commencement value so as to achieve a
present day
value (the inflated commencement value). In the circumstances, it is
the figure of R108 000 to which the CPI must
be applied. The
relevant rates of the CPI are contained in another schedule prepared
by Ms Wright and handed in by the defendant.
In that schedule, the
CPI rates were applied to the declared value of R2 543 939.
Because the calculation had not been
done using R1 438 000,
being the declared value less the stated value of the shares option,
or for R108 000, counsel
for the plaintiff was requested at the
hearing to have the calculation performed on these two amounts.
[26]
Such calculations were presented under cover of a letter indicating
that they had been sent to the defendant but that the defendant’s
legal representatives were not in agreement. A subsequent letter was
received from the defendant’s legal representatives
confirming
their disagreement and disputing that the CPI rates referred to in
court had been agreed. In addition, they provided
various accrual
calculations, using the declared value, a value excluding the
declared value of the share option and R108 000
and applying
each of these to Mr Duncan’s schedule as a whole and that of Ms
Wright as a whole. This had not been requested.
As to the denial of
agreement that the CPI rates were accurate, Ms Wright used those
rates to arrive at her inflated value in her
schedule. This schedule
and in particular the inflated value of the declared value arrived at
by the application of those CPI rates,
was asserted by the
defendant’s counsel to accurately represent the accrual
calculation. This contains at least an implicit
admission that the
CPI rates used were correct. As a result, I accept their accuracy.
The plaintiff’s representatives indicated
that, after applying
the CPI rates to R108 000, the figure arrived at is R234 075.00.
I had performed the calculation
myself which resulted in a figure of
R234 077.76. I shall use the higher one as the inflated
commencement value.
The
Full House Taverns loan
[27]
The second asset in dispute was the value of a loan account held by
the defendant in Full House Taverns, of which he was the
sole
shareholder and director. Ms Wright placed a value on this of
R74 000. She did so, it was said by counsel for the defendant,
because it was her opinion that only that much of the loan was
recoverable due to financial difficulties experienced by Full House
Taverns. This evidence was, of course, not led. There is thus no
admissible evidence for the value used by her. Mr Duncan said,
again
without challenge, that no documents were discovered concerning the
financial position of Full House Taverns. As a result
of this
failure, he was unable to comment on the recoverability or otherwise
of that loan. Once again, the defendant inexplicably
failed to
provide the relevant documentation or to testify in support of his
contention on recoverability.
[28]
In the schedule of his assets and liabilities as at 28 February 2013,
the loan was reflected by the defendant as being R7 502 636.
During evidence, Mr Duncan indicated that the defendant’s legal
team had provided a document during the trial showing the
loan
balance as more than R11 million. The defendant’s counsel then
put to him that the correct figure for the loan was in
fact
R11 101 528. Once again, this assertion amounts to an
admission by the defendant and must therefore be accepted
as being
the value of the loan account.
[29]
This asset was not brought into account by the trial court in
arriving at the value of the defendant’s estate at dissolution.
A separate order was made concerning it. This was possibly done out
of caution in the light of the unsupported assertion that it
would
not be recoverable. At the hearing of the appeal, counsel for the
defendant indicated that, if this court found that the
loan account
should be included in the defendant’s assets at the value
asserted by her during cross-examination, the defendant
would abandon
his appeal against para (b) of the order granted by the court a quo.
Counsel for the plaintiff indicated that the
plaintiff was amenable
to this approach. The parties further agreed that, if this was the
outcome, para (b) of the order should
be amended from a declaratory
order to one requiring the defendant to transfer to the plaintiff one
half of the value of his loan
account in Full House Taverns
calculated as at the date of the divorce order.
The
loan from the Trust
[30]
The third material discrepancy between the schedules of Mr Duncan and
Ms Wright relates to a loan reflected as being due by
the defendant
to the Trust. In Mr Duncan’s schedule, based on the schedule
prepared and discovered by the defendant, the
amount owing to the
Trust as at 28 February 2013 was R418 343. In Ms Wright’s
schedule the amount owing as at 30 April
2013 was said to be
R1 418 335.31. When Mr Duncan was asked about this figure,
his response was twofold. First, he said
that there were no
discovered documents for the Trust beyond 28 February 2013.
Secondly, he expressed surprise that the
Trust could have lent the
defendant an additional million or so Rand because the only asset in
the Trust was its loan to the defendant
and he could not see how it
could have obtained monies to advance to him. The figure reflected in
the schedule of Mr Duncan must
accordingly apply, being consistent
with the other documents. This is an aspect which appears to have
been overlooked by the trial
court and was excluded from the accrual
calculation. It must thus be brought into account as a liability.
The
proceeds of the shares option
[31]
The next issue is whether the excluded assets, or those which derived
from them, could be identified with any assets in the
estate of the
defendant. Mr Duncan gave evidence that, after various splits, the
shares option had been finally exercised in June
2001. When he was
asked whether he had been able to identify which assets, if any,
derived from this, he said that he had not been
able to do this as a
result of the failure of the defendant to provide a full schedule of
the requisite bank accounts. The defendant’s
counsel challenged
this evidence, saying that complete sets of ‘the Standard Bank
statements and also Investec Bank statements,
those that our client
had were furnished on 30 May 2013’. The trial commenced on 3
June 2013. It emerged that the statements
referred to by counsel did
not comprise a complete set of bank statements and, in any event, had
not been discovered. Although
it was put to Mr Duncan during
cross-examination that Ms Wright had traced the assets derived from
the exercise of the option,
no evidence to that effect was led. This
kind of assertion stands on a completely different footing to those
dealt with earlier
where the assertion put in cross-examination
amounts to an admission by the defendant. Here, if the assertion is
to be taken into
account, either the plaintiff must agree to it or
evidence must be led in support of it. Neither of these alternatives
materialised.
[32]
The net effect of this is that there was no evidence as to which
assets of the defendant, if any, derived from the excluded
assets. In
response to this, counsel for the defendant submitted that the onus
was on the plaintiff to prove that the exemption
clause was not
enforceable. This is not a correct formulation of the issue. At no
stage did either party claim that the clause
was not enforceable. The
evidence of Mr Duncan that the discovered documents did not show
which of the defendant’s assets,
if any, were derived from the
excluded assets, was contested. Counsel for the defendant then
submitted that, as part of the onus
on the plaintiff to prove the
accrual to the estate of the defendant, she must prove which assets
derive from the excluded assets.
[33]
It is not necessary or desirable to decide the issue of the onus in
the present circumstances and I expressly refrain from
doing so. Here
there is uncontested evidence that no excluded assets can be traced
from the discovered documents. On the evidence,
therefore, the
plaintiff proved that no assets can be identified as deriving from
those excluded by the ANC. If this evidence was
incorrect, no
documentation was shown to Mr Duncan tracing any such assets such as
to cause the trial court to reject this evidence.
Likewise, no
countervailing evidence was led.
The
estimates of the legal fees of the defendant
[34]
The final issue relates to the amounts included in Ms Wright’s
schedule which are said to be estimates of the defendant’s
indebtedness for legal fees and associated costs. There is no such
liability disclosed in any of the documents prepared by the
defendant
on which Mr Duncan based his evidence. This includes the schedule
prepared and put up by the defendant as at 28 February
2013. Since,
once again, neither the defendant nor Ms Wright led evidence as to
this liability, it must be ignored for present
purposes.
The
value of the defendant’s estate
[35]
The value of the defendant’s estate emerges as follows. The
amounts under Lentus Asset Management after deducting liabilities
totalled R13 707 426.13. The three cheque accounts totalled
R115 676.67 and the Investec Money Market account totalled
R126.58. To this must be added the agreed net value of the immovable
properties in the sum of R1 686 433.23 and the Landrover
with a value of R244 000. From this must be deducted the amount
by which the Standard Bank account was overdrawn and amounts
owing
for the credit card. These total R23 806.35. All of the above
figures are taken from Ms Wright’s schedule and
were accepted
by the plaintiff. The liability of the defendant to the Trust in the
sum of R418 343 must be deducted. The inflated
commencement
value of R234 077.76 must be deducted. Since there are no
excluded assets identified, no further deduction takes
place in that
regard.
[36]
If, after this exercise, there is a positive balance, there has been
an accrual. The plaintiff is entitled to one half of any
such accrual
less what she received in advance. As mentioned, this was agreed to
be cash of R700 000 and two vehicles with
agreed values of
R260 000 and R100 000 respectively. From the accrual,
therefore, a sum of R1 060 000 must
be deducted in order to
arrive at an award, if any.
The
calculation of the accrual award
[37]
Excluding the loan account in Full House Taverns, the accrual to the
defendant’s estate and the award to be made to the
plaintiff is
therefore calculated as follows:
Lentus
Asset Management
R
10 802 415.41
Lentus
Asset Management
R
1 199 884.60
Lentus
Asset Management
R
774 208.60
Lentus
Asset Management
R
444 474.44
Lentus
Asset Management
R
223 316.89
Lentus
Asset Management
R
263 126.19
R
13 707 426.13
Landrover
R
244 000.00
R
244 000.00
Citi
Cheque Account
R
55 363.05
Macquarrie
Bank Account
R
54 320.96
Investec
Private Bank
R
5 992.66
R
115 676.67
Investec
Money Market Account
R
126.58
R
126.58
South
Ridge Road
R
36 433.23
Rietvlei
R
1 650 000.00
R
1 686 433.23
less
Standard
Bank o/d
-R
7 287.77
Standard
Bank credit card
-R
16 518.58
-R
23 806.35
The
Trust loan
-R
418 343.00
-R
418 343.00
Inflated
commencement value
-R
234 077.76
-R
234 077.76
Accrual
R
15 077 435.50
Plaintiff's
share
R
7 538 717.75
less
Advance
payment
-R
700 000.00
Vehicle
1
-R
260 000.00
Vehicle
2
-R
100 000.00
-R
1 060 000.00
AWARD
R
6 478 717.75
[38]
Before arriving at the order to be made, it is appropriate to comment
on the manner in which the defendant approached the litigation
on the
accrual claim. As I mentioned, the defendant’s counsel put to
Mr Duncan that Ms Wright had been able to trace assets
which derived
from the exercise of the share option which was an excluded asset. If
this is so, it must mean that Ms Wright was
privy to documentation
that was not shown to Mr Duncan. This must mean, in turn, that
relevant documents exist which the defendant
failed to discover or
furnish. This was also true of the financial statements of Full House
Taverns, a company of which the defendant
was the guiding mind. In
addition, the plaintiff attempted to subpoena
duces
tecum
through the defendant, as
trustee, documents showing the financial position of the Trust. This
provoked a response by the defendant
that he could not provide these
documents without the consent of his co-trustees. When the loan was
shown to have increased by
approximately R1 million between the
end of February 2013 and 30 April 2013, Mr Duncan stated that he had
not seen any financial
documents relating to the trust for the period
after the end of February 2013. It was then put to him that documents
had been provided
to the plaintiff’s attorneys pursuant to a
subpoena
duces tecum
on the Thursday or Friday before the trial commenced. The accuracy of
this assertion was not proved.
[39]
The attitude of many divorce parties, particularly in relation to
money claims where they control the money, can be characterised
as
‘catch me if you can’. These parties set themselves up as
immovable objects in the hopes that they will wear down
the other
party. They use every means to do so. They fail to discover properly,
fail to provide any particulars of assets within
their peculiar
knowledge and generally delay and obfuscate in the hope that they
will not be ‘caught’ and have to disgorge
what is in law
due to the other party.
[40]
The conduct of the trial on the accrual claim appears to have been
run by the defendant on a ‘catch me if you can’
basis. He
clearly failed to comply with the provisions of s 7 of the Act.
He delayed providing what were obviously relevant
documents until the
last minute and then did not discover them. He declined to provide
any documents concerning the financial position
of Full House
Taverns. He did not provide documents which could be used to trace
assets derived from the excluded assets. He did
not prove that
documents relating to the Trust were furnished timeously or at all
pursuant to a subpoena
duces tecum
after initially claiming that he could not furnish these without the
consent of his co-trustees. He inexplicably did not testify
and then
took a technical point concerning documentary proof.
[41]
This approach of the defendant deserves censure. In my view, it may
have warranted a punitive costs order at the trial. There
is no cross
appeal before us on costs so such an order is not competent. Even
though the award has been reduced on appeal and it
may be argued that
the defendant achieved a measure of success, because this attitude
persisted on appeal, the defendant will be
liable for the costs of
the appeal.
[42]
The following order issues:
1 The appeal is
dismissed with costs, save to the extent that the order of the court
a quo is amended as set out below.
2 Paragraphs (a),
(b) and (d) of the order of the trial court are amended to read as
follows:
‘
(a)
The defendant is to pay to the plaintiff the sum of R
6
478 717.75
by no later than 30
November 2014.
(b)
The defendant is directed to transfer to the plaintiff an amount
equal to one-half of the defendant’s loan account in
Full House
Taverns (Pty) Ltd as at the date of divorce.
(d) (i) The
defendant is to pay the plaintiff’s costs of the action.
(ii)
The plaintiff is to pay the costs of the applications to compel her
to attend on the defendant’s psychologist.
(iii)
The defendant is to pay all reserved orders for costs not dealt with
in paragraph (d)(ii), save that, where those costs relate
to
applications concerning the custody of the minor children, each party
is to pay his or her own costs.’
T
R Gorven
Acting
Judge of Appeal
Appearances
For Appellant: J A
Julyan SC, with her S I Humphery
Instructed
by:
Belinda Ardenbaum
Attorneys, Durban
Phatshoane
Henney Attorneys, Bloemfontein
For
Respondent: A Stokes SC
Instructed by:
Roger Knowles
Attorneys, Durban
Webbers Attorneys,
Bloemfontein
[1]
Act
88 of 1984.
[2]
Section 3(1). The dissolution may be by way of death or divorce.
[3]
This
echoes the provisions of s 4(1)(
b
)(ii)
of the Act which reads:
‘
[I]n
the determination of the accrual of the estate of a spouse ─
(ii)
an asset which has been excluded from the accrual system in terms of
the antenuptial contract of spouses, as well as any
other asset
which he acquired by virtue of his possession or former possession
of the first mentioned asset, is not taken into
account as part of
that estate at the commencement or the dissolution of the marriage’.
[4]
S
v W
1963
(3) SA 516 (A).
[5]
A
t
523B-F.
[6]
Nkuta
v Santam Assuransie Maatskappy Bpk
1975 (4) SA 848 (A).
[7]
At
853G-H. ‘However, as already mentioned, since the defendant
closed his case without calling any witness, he is bound
by the case
which was formally advanced by his representative in open court by
way of factual assertions put to a witness of
the opposite party.’
(My translation.)
[8]
See
also
Zungu
NO v Minister of Safety and Security
2003 (4) SA 87
(D) at 91E-93B.
[9]
Transnet
Limited v Newlyn Investments (Pty) Limited
2011 (5) SA 543 (SCA).
[10]
Paragraph
18.
[11]
Rule
35(10) reads:
‘
Any
party may give to any other party who has made discovery of a
document or tape recording notice to produce at the hearing
the
original of such document or tape recording, not being a privileged
document or tape recording, in such party's possession.
Such notice
shall be given not less than five days before the hearing but may,
if the court so allows, be given during the course
of the hearing.
If any such notice is so given, the party giving the same may
require the party to whom notice is given to produce
the said
document or tape recording in court and shall be entitled, without
calling any witness, to hand in the said document,
which shall be
receivable in evidence to the same extent as if it had been produced
in evidence by the party to whom notice is
given.’
[12]
Gentiruco
AG v Firestone SA (Pty) Ltd
1972
(1) SA 589
(A) at 616H.
[13]
President
of the Republic of South Africa & others v South African Rugby
Football Union & others
2000
(1) SA 1
(CC) para 61.