About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2010
>>
[2010] ZAWCHC 226
|
|
M v M (8954/10) [2010] ZAWCHC 226 (10 December 2010)
IN
THE HIGH COURT OF SOUTH AFRICA (WESTERN CAPE HIGH COURT, CAPE TOWN)
Case
No 8954/10
In
the matter between:
A
M
…............................................................................................................
Plaintiff
and
JOHANN
(J) M
….....................................................................................
Defendant
Court:
CLOETE,
A
J
Heard:
2,
3, 26, 29, 30 November 2010; 1 and 6 December 2010
Delivered:
10
December 2010
ADV.
FOR PLAINTIFF:
Adv
A E Heese
INSTRUCTED
BY:
Michalowsky,
Geldenhuys Humphries (A Geldenhuys)
ADV.
DEFENDANT:
Adv
F Harmse
INSTRUCTED
BY:
Honey
Attorneys (Mr G de Beer)
IN THE HIGH COURT OF
SOUTH AFRICA
WESTERN CAPE HIGH COURT,
CAPE TOWN
CASE
NO:
8954/10
In the matter between:
A M
…............................................................................................................................
Plaintiff
And
J (J) M
…...................................................................................................................
Defendant
JUDGMENT DELIVERED ON
10 DECEMBER 2010
CLOETE. AJ
[1] This is a divorce
action in terms of which the plaintiff claims (a) a decree of
divorce; (b) an order declaring that the asset
of the J M Family
Trust No IT1281/2005 ('the Trust') forms part of defendants personal
estate for purposes of calculation of
the accrual in accordance with
the provisions of the Matrimonial Property Act. No 88 of 1984 ('the
Act'): (c) an order directing
defendant to pay to plaintiff an
amount equal to 50% of the difference in the accruals of the nett
estates of the parties; (d)
costs; and (e) that any order which this
court makes shall be binding upon the defendant's estate Although
plaintiff initially
claimed rehabilitative maintenance for a period
of 24 months, this claim was abandoned at the commencement of the
trial.
[2] In his counterclaim
filed of record, the defendant admitted that the marriage between
the parties has irretrievably broken
down and counterclaimed against
plaintiff for an order that (a) plaintiff is to forfeit her right to
share in the accrual in
defendant's estate, more particularly with
regard to certain assets of defendant; (b) the values of the
immovable properties
situate at 16 Prins Street, Oranjezicht, Cape
Town and 26 Prins Street, Oranjezicht. Cape Town and/or any assets
acquired by
defendant as a result of his possession or former
possession of such assets, shall not be taken into account in the
calculation
of the accrual in defendant's estate; and (c) costs.
During the course of the trial is became apparent that defendant
also contends
that other immovable properties (over and above 16 and
26 Prins Street) were also acquired by him as a consequence of
assets
which were excluded in terms of the parties' antenuptial
contract and that accordingly these properties and/or the proceeds
thereof
must also not be taken into account in the calculation of
the accrual in defendant's estate.
[3] Although this aspect
was not specifically dealt with on the pleadings, the parties are in
agreement that those assets and/or
values reflected in clause 4 of
the their antenuptial contract, being the commencement values of
their respective estates as
envisaged in terms of s 4{1){a) of the
Act are the same assets as those which were excluded by the parties
in clause 5 of the
antenuptial contract as is envisaged in terms of
s 4(1)(b)(ii) of the Act.
[4] Plaintiff argued
that the provisions of the Act make it clear that assets which are
excluded in accordance with s 4(1)(b)(ii)
cannot be taken into
account as forming part of the estate of a party at the date of
commencement of the marriage by virtue of
the provisions of s
4(1)(b)(ii) itself which read as follows:
•
4.
Accrual of Estate-(1)(a) ...
(b) in 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 assets
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;
'
(my
emphasis)
[5]
Plaintiff accordingly argued that the provisions of clause 4 of the
antenuptial contract (reflecting the commencement values
of the
parties' respective estates) must be regarded as
pro
non schpto.
[6]
In his opening address, defendant's counsel informed the court that
it was not a simple matter of regarding clause 4 of the
antenuptial
contract as being
pro
non schpto
and
requested the court to deal with this issue on the basis of the
evidence presented by the parties during the course of the
trial.
[7] Plaintiffs evidence
was that she understood the antenuptial contract to mean that, in
the event of termination of the marriage,
the assets of each party
reflected in the antenuptial contract would revert to them and the
balance of assets accrued during
the marriage would be divided
between the parties.
[8] Defendant's evidence
on this issue focused entirely on precisely which of his assets were
excluded in terms of clause 5 of
the antenuptial contract. He did
not place any evidence before this court to indicate anything other
than that his understanding
of the antenuptial contract was that
certain assets were excluded from the accrual, as opposed to forming
part of the commencement
value of his estate for purposes of
calculation of the accrual upon termination of the marriage.
Further, defendant's counsel
did not deal at all with plaintiffs
submissions in this regard in his closing argument.
[9]
Accordingly, I am satisfied that the common intention of the parties
was that the provisions of the clause 4 of the antenuptial
contract
should indeed be regarded as
pro
non scripto.
ISSUES AGREED UPON
[10] At the commencement
of the trial the parties informed the court that the following
aspects had been agreed upon between them:
[10.1.] The division of
their household furniture and effects as reflected on the schedule
appearing at pp 41 and 42 of plaintiffs
trial bundle (exhibit "A"),
subject to defendant retaining the desk, chair, book case and single
bed in the plaintiffs
study at the former common home;
[10.2.] The assets,
liabilities and attendant values thereof in the estates of
plaintiff, defendant and the Trust, save and except
that plaintiff
disputes that the defendants investments in Hungary are limited to
the amount of €142.300. (There was some
debate about the amount
of capital gains tax payable in respect of the sale of defendant's
immovable property situated at 17
Scott Street, Gardens, Cape Town
but in her closing argument plaintiffs counsel informed the court
that the plaintiff would accept
that the sum of R60.000 is payable
in respect of capital gains tax on this sale, as claimed by
defendant for purposes of calculating
the accrual in defendant's
estate);
[10.3.] The parties are
further agreed that in the event of this court making an order in
favour of plaintiff for payment to her
by defendant of an amount in
excess of R2.1m in respect of her accrual claim, then plaintiff
shall receive the immovable property
situated at 16 Prins Street
with an agreed value of R2,1m as part payment of her claim, with the
balance to be paid to her in
cash (The parties also agreed that
plaintiff shall pay the costs attendant upon the transfer of the
aforesaid immovable property
into her name).
[11] At the commencement
of the trial defendant made an open tender to pay to plaintiff an
amount of R3m by way of the transfer
of the 16 Prins Street property
to her (at the agreed value of R2,1m), and the balance in cash.
During the course of the trial
and in light of defendant's open
offer, the parties agreed that defendant would pay to plaintiff the
sum of R250.000 as an advance
on her accrual claim. This amount was
duly paid to plaintiff by defendant.
FACTS NOT IN DISPUTE
[12] In addition to the
aspects agreed upon and referred to above, the following facts are
not in dispute:
[12.1.]
The parties were married to each other on 22 February 1985 out of
community of property by antenuptial contract and in
terms of which
the accrual
system
reflected in chapter 1 of the Act was made applicable to their
marriage. This is thus a marriage of almost 26 years;
[12.2.] There are two
children, both daughters, who were born of the marriage, Margit who
was born in 1985 and Lisa who was born
in 1988. Both children have
thus attained the age of majority. Towards the end of her secondary
schooling, Lisa was diagnosed
as suffering from bipolar disorder.
Both parties feel that in all likelihood, Lisa will continue to
require their support from
time to time, including financial
support;
[12.3.] The marriage has
irretrievably broken down;
[12.4.] The assets
inherited by plaintiff during the course of the marriage do not form
part of the accrual in her estate. These
assets are plaintiffs
Marriott Property Income Fund of R241,463.81, Old Mutual Portfolio
(Investors Fund) of R28.201.82 and Citroen
motor vehicle with a
value of R50,000. The motor vehicle is currently registered in
defendant's name and he has agreed that it
will be transferred by
him into plaintiffs name;
[12.5.] The amount of
R310,000 inherited by defendant during the course of the marriage
shall similarly not form part of his estate
for purposes of
calculation of the accrual therein.
ISSUES IN DISPUTE
[13] The issues which
remain in dispute and which must thus be determined by me are the
following:
[13.1.] The extent of
plaintiffs accrual claim, taking into account my findings in respect
of the Trust's asset, the defendant
s investments in Hungary and any
assets which should be excluded from defendant's estate;
[13.2.] Whether the
Trust asset (being an immovable property situate at 11 Elise Way,
Hout Bay) forms part of defendant's assets
and should be taken into
account in the calculation of the accrual in defendant's estate
alternatively, what amount should be
taken into account as
constituting a loan by defendant to the Trust arising out of the
funding of the purchase price thereof
for purposes of the accrual
calculation;
[13.3.] The value of
defendant's investments in Hungary for purposes of the accrual
calculation;
[13.4.] Whether
defendant is entitled to a forfeiture order:
[13.5.] Whether any
assets (other than the inherited sum of R310.000 which has already
been agreed between the parties) should
be excluded from defendant's
estate for purposes of the accrual calculation, on the basis that
such assets were acquired by assets
excluded by defendant in terms
of clause 5 of the antenuptial contract;
[13.6.] Costs.
WHETHER THE TRUST
ASSET FORMS PART OF DEFENDANT'S ESTATE
[14] The unchallenged
evidence of the plaintiff was as follows;
[14.1.] The Trust was
registered when the immovable property situate at 11 Elise Way, Hout
Bay {'the Hout Bay property') was purchased
in 2005. Plaintiff
confirmed that the Trust bears no: IT1281/2005. which would of course
have been the year in which the Trust
was registered;
[14.2.] She, together
with defendant and a third party were appointed as the initial
trustees of the Trust and that, as far as she
can recall, the purpose
of the Trust was to limit estate duty payable by defendant in the
event of his death;
[14.3.] The Hout Bay
property was immediately registered in the name of the Trust upon
registration of transfer of the Hout Bay
property and the Trust has
no ether assets;
[14.4.] She is no longer
a trustee of the Trust since defendant, shortly after plaintiff
believed that the parties had reached an
agreement pertaining to the
divorce, had her sign a document in which she resigned as trustee:
[14.5.] She does not have
any real knowledge as to what a trustee is. or of what the functions
of a trustee are. that trustees meetings
were never held and that the
Trust, as far as she is aware, does not have a bank account (although
there is a mortgage bond registered
over the Hout Bay property);
[14.6.] The Trust has no
financial statements and no resolutions were taken by the trustees,
not even in respect of the purchase
of the Hout Bay property;
[14.7.] The Hout Bay
property is comprised of three separate dwellings/living units The
parties and their family lived in the
main dwelling and rooms were
rented in the other dwetlings/iiving units. There were various
different tenants during the period
in which she resided in the Hout
Bay property;
[14.8] A number of lease
agreements were entered into with the tenants, which lease
agreements were typed by her. She testified
that the document
appearing at page 24 of exhibit 'A' was an example of such a lease
agreement. The heading of this lease agreement
bears the defendant's
name and reflects that the tenant concerned would be contracting
with the defendant personally,
[14.9.] She referred to
a pro forma lease agreement at pages 47 to 51 of exhibit 'A' and
testified that the latter differed from
the lease agreement typed by
her in that the heading of the pro forma lease agreement now refers
to the J M Family Trust and
the defendant as a trustee of the Trust,
which was not the case previously;
[14.10.] When the family
moved to the Hout Bay property they did not enter into a lease
agreement with the Trust in respect of
their occupation of the Hout
Bay property and that she was never approached in her capacity as a
trustee in respect of any lease
agreement for the family;
[14.11.] Defendant paid
the municipal account (including rates and taxes) of the Hout Bay
property;
[14 12] No separate
books or records were kept in respect of rentals paid by the various
tenants of the Hout Bay property and
rentals received in respect of
the other immovable properties leased by defendant personally all
formed part of the same set
of records;
[14.13.] To the best of
her knowledge neither she nor defendant are beneficiaries of the
Trust;
[14.14.] In response to
a question by this court, she confirmed that the bank account
details on the Trust lease agreements' are
the same as the
defendant's personal bank account details.
[15] Defendant's
evidence relating to the Trust was, in essence, limited to the
following:
[15.1] He regarded the
Hout Bay property as being one where he could retire. When he was
diagnosed in 2002 with diabetes he was
informed that his life
expectancy was immediately reduced by ten years. The purpose of the
Trust was to ensure that his assets
would be protected for his
children and grandchildren, not only after his death, but in the
event that South Africa plunged into
financial ruin. The fact that
defendant failed to mention any intention on his part to also make
provision for plaintiff in the
event of his death gave rise to the
clear impression that it was also his intention to protect his
estate against any accrual
claim by the plaintiff in the event of
termination of the marriage, whether by divorce or death;
[15.2.] He clearly
regarded the access bond registered over the Hout Bay property as
his own and made numerous references to 'my
access bond' whilst
being cross examined by plaintiff's counsel regarding whether or not
he had withdrawn any funds from the
access bond. He also confirmed
that he personally had made payments on account of the access bond.
[16] Defendant also
elected not to produce a copy of the Trust Deed despite request by
plaintiff to do so. Similarly, he did not
produce any financial
statements of the Trust, minutes of meetings of the trustees of the
Trust, resolutions by the trustees
of the Trust, any evidence of any
bank account of the Trust (including any bond statements relating to
the access bond over the
Hout Bay property), nor did he produce any
separate books or other records of the Trust.
[17]
The principles relating to whether a Trust has been dealt with at
arms length are set out in
Jordaan
v Jordaan
2001
(3) SA 288
(C) and
Badenhorst
v Badenhorst
2006
(2) SA 255
(SCA) and need not be repeated here. The cumulative
effect of plaintiff's unchallenged evidence, defendant's evidence
and the
absence of any independent evidence to show that the Trust
has been dealt with at arm's length by defendant leads me to the
irresistible
conclusion that, from the time when the Trust was
established, the defendant has always been in sole and absolute
control of
its affairs. In
Pringle
v Pringle,
an
as yet unreported decision of Erasmus J in the Eastern Circuit Local
Division under case nos H36/2006 & 18754/2007, the
learned judge
at paragraph 17 put it thus:
'Having
regard to the fact that one of the considerations giving rise to the
establishment of the trust
was
the
protection which a trust would give the defendant against accrual
claims by the plaintiff in the event of a divorce, and having
regard
to the discretionary nature of the trust, the defendants de facto
sole control of the affairs of the trust and the fact
that the trust
in essence consists of assets accumulated by the defendant, I am of
the view that the nett asset value of the
trust should be taken into
consideration for purpose of determining the accrual of the
defendant's estate.'
[18] Accordingly, I
conclude that the agreed nett asset value of R2,8m must be taken
into consideration in the assessment of the
accrual in the estate of
the defendant for purposes of s 3(1) of the Act.
[19] As I have concluded
that the Trust asset indeed forms part of defendants estate for
purposes of the accrual calculation,
it is not necessary for me to
make any findings regarding defendant's loan to the Trust as this
would result in a partial duplication
of the value of this asset for
purposes of the accrual calculation.
THE VALUE OF
DEFENDANT'S INVESTMENTS IN HUNGARY
[20]
Plaintiff testified that she had made a calculation based on the
documentation available to her that defendant has investments
in
Hungary totalling €286.553. A schedule prepared by plaintiff
setting out how this total amount is calculated and made
up appeared
at page 54 of exhibit 'A' For sake of convenience, the schedule
is
reproduced,
but numbered, hereunder:
(a)
€
20
195.00
(b)
€
77
570.00
(c)
€
30
903.97
(d)
C79
495 00
(e)
€
1
090.00
(f)
€
47
300.00
(g)
€
30
000.00
C286
553.00
[21] Defendant admitted
all of the amounts invested save for the following-
[21.1.] He alleged that
the amounts at (b) of €77 570.00 and (d) of €79 495.00
must relate to the same investment; and
[21.2.] He alleged that
the amount at (g) of €30 000.00 must be included in the amount
at (f) of €47 300.00 (initially
defendant alleged that the
amount at (c) of €30 903.97 must be the same as the amount at
(g) of €30 000.00, but appeared
to abandon this contention
during the course of his evidence and cross examination).
[22] As to defendant's
first contention, this cannot be correct. An e-mail addressed by the
defendant to one Yvonne at Unicredit
Bank dated 29 December 2009
reads as follows:-
'My
Euro investment of €77 570 matures on 29/12/09. Kindly
re-investment this investment plus interest at your highest rate
of
2.75% (as you telephonically informed me) for a period of six
months. Please confirm the reinvestment and new maturity
date
by e-mail to
J(G)live.co.za
.'
[23] An undated letter
addressed by defendant to Yvonne which defendant testified had been
prepared, if not sent (defendant could
not recall) after plaintiff
left the former common home in January 2010. reads as follows:
'My Euro investment
of €79 495 plus interest of €1 090 matures on 2010/01/05
Kindly re-invest the above amounts for
a further six months at 1.5%
interest as telephonically arranged with yourself today. Please
confirm the new capital amount and
new date of maturity via e-mail.'
[24] Defendant was
unable to provide any satisfactory explanations for the following:
[24.1] That the amounts
referred to by him in the two communications to Yvonne differ;
[24.2] That the dates of
maturity of the investments differ, [24.3] That the interest rates
differ:
[24.4.] That if. as
alleged by defendant, the second communication to Yvonne was a
follow-up to his first communication since
she had failed to respond
thereto, why no reference was made in the second communication to
his earlier communication to Yvonne.
[25] Accordingly, the
overwhelming probabilities are that the amounts of €77 570.00
and €79 495.00 are indeed two different
investments. It is also
noted that defendant did not dispute the interest component on the
investment of €79 495.00.
[26]
There is
:
however,
some doubt as to whether the amount at (g) of €30 000.00 is
included in the amount at (f) of €47 300.00. Plaintiff
produced
a written advice from CIB Bank dated 2 December 2009 confirming that
the amount of €47 300.00 had been invested
on that date for a
six month period expiring on 2 June 2010. Plaintiff did not
seriously challenge defendant's evidence that
he arrived in Hungary
on 2 December 2009 with an additional amount of approximately €30
000.00 to invest with the aforesaid
bank. Plaintiff was unable to
produce any independent documentation in respect of the amount at
(g) of €30 000.00 and was
forced to rely on information
provided by defendant in this regard in the pleadings. Whilst it is
so that defendant's evidence
in this regard could best be described
as vague and evasive, and it is clear that defendant himself did not
produce a shred of
documentation in support of his allegation, the
fact of the matter is that plaintiff bears the onus to establish the
extent of
the defendant's investments in Hungary and it is my view
that in respect of the amount of €30 000 00, she has been
unable
to do so. Accordingly, in this regard, this court is obliged
to give defendant the benefit of the doubt.
[27] I accordingly
conclude that the total value of defendants investments in Hungary
is €256 553. In argument plaintiffs
counsel submitted that this
court should apply an exchange rate of R9.18 to the Euro which
submission was not challenged by defendant's
counsel in his
argument. I thus find that the value of defendant's total
investments in Hungary, in rand terms, is R2.355.156.54.
DEFENDANT'S CLAIM
FOR FORFEITURE
[28]
In
June
Sinclair: An Introduction to the
Matrimonial Property Act 1984
the
learned author at p33 describes a marriage according to the accrual
system as follows:
'During marriage the
spouses would be fully independent and there will be complete
separation of property. On dissolution of the
marriage gains made
during its subsistence will be shared unless the accrual system is
expressly excluded in the antenuptial
contract'
At p37 the learned
author states:
'Just as the right to
share in the joint estate and the right to a marriage settlement in
an antenuptial contract can be forfeited,
so also is the right to
share in the accrual subject to the principle of forfeiture of
benefits.'
[29]
In
Cronje
& Heaton: South African Family Law Second Edition
the
learned authors at p97 describe the accrual system as follows:
The accrual system is
... founded on the notion that at the dissolution of a marriage out
of community of property and community
of profit of loss both
spouses ought to share in the growth their estates have shown,
without there having been a joint estate
during the subsistence of
the marriage.'
[30] At p98, the learned
authors describe the accrual system as:
'A type of postponed
community of profit. During the subsistence of the marriage it is
out of community of property and community
of profit and loss. Each
spouse retains and controls his or her own estate but upon
dissolution of the marriage., the spouse
share equally in the
accrual or growth their estates have shown during the subsistence of
the marriage.'
|31]
Accordingly, a marriage according to the accrual system results in
an
automatic
sharing
of nett gains accrued during the marriage, unless (a) the spouse who
has an accrual claim is ordered to forfeit it, either
wholly or in
part, or (b) certain assets are excluded, either entirely or by way
of their value as at the date of the marriage,
in terms of the
antenuptial contract itself. It is a
'system
of deferred sharing of gains':
See
Bouberg's
Law of Persons & the Family (2
nd
Edition)
at
p203.
[32] Section of the Act
provides as follows:
%
Forfeiture of right to accrual sharing
-
The right to share in the accrual of the estate of a spouse in terms
of this Chapter is a patrimonial benefit which may on divorce
be
declared forfeit either wholly or in part.'
[33] It is common cause
between the parties that, provided the assets which defendant seeks
to exclude are not in fact found to
be capable of exclusion by this
court, it is plaintiff who has an accrual claim against defendant.
[34}
Accordingly, as a matter of fact, in the event that defendant does
not succeed in persuading this court that the assets which
he seeks
to exclude should be so excluded, plaintiff will be benefitted by
virtue of her accrual claim. In
Wjjker
v Wijker
1993
(4) SA 720
(A) at 727E the court put it thus:
'It
is obvious from the wording of this section
[and
here the court was referring to
s 9(1)
of the
Divorce Act 70 of
1979
. which applies equally to
s 9
of the Act]
that
the first step is to determine whether or not the party against whom
the order is sought will in fact be benefitted. That
will be purely
a factual issue. Once that has been established the trial court must
determine, having regard to the factors mentioned
in this section,
whether or not that party will in relation to the other be unduly
benefitted if
a
forfeiture
order is not made. Although the second determination is a value
judgment, it is made by the trial court after having
considered the
facts falling within the compass of the three factors mentioned in
the section.'
[35]
Section 9(1)
of the
Divorce Act 70 of 1979
reads as follows:
'When a decree of
divorce is granted on the ground of the irretrievable breakdown
of a marriage the court may make an order
that the patrimonial
benefits of the marriage be forfeited by one party in favour of the
other, either wholly or in part if the
court, having regard to the
duration of the marriage, the circumstances which gave rise to the
breakdown thereof and any substantial
misconduct on the part of
either of the parties, is satisfied that, if the order for
forfeiture is not made, the one party will
in relation to the other
be unduly benefitted.'
[36]
It
is clear from the judgment of the court in
Botha
v Botha
[2006] ZASCA 6
;
2006
(4) SA 144
(SCA)
at
146G-147C
that
a court may not have regard to
any
other factors
in
exercising its value judgment as to whether a forfeiture order
should be granted:
'The three factors
governing the value judgment to be made by the trial court in terms
of
s 9(1)
thus fall within a relatively narrow ambit: they are
limited to (a) the duration of the marriage: (b) the circumstances
which
gave rise to the breakdown thereof: and (c) any substantial
misconduct on the part of either of the parties. Conspicuously
absent
from
s 9
is a catch-all phrase, permitting the court, in
addition to the factors listed, to have regard to any other factor.
(Compare,
in this regard, the wording of
s 7(2)
of the
Divorce Act
dealing
with maintenance orders upon divorce which, apart from the
fact that the list of relevant factors is significantly longer, also
entitles the court to have regard to "any other factor which in
the opinion of the court should be taken into account".
So,
too, in terms ofs 7(5), the list of factors which must be taken into
account by a court in the determination of which assets
should be
transferred by one spouse to the other upon divorce, when the
circumstances set out in
ss 7(3)
and (4) justify the making of such
a ''redistribution order" also expressly includes "any
other factor which should
in the opinion of the court be taken into
account"). The trial court may therefore not have regard to any
factors other
than those listed in
s 9(1)
in determining whether or
not the spouse against whom the forfeiture is claimed will in
relation to the other spouse, be unduly
benefitted if such an order
is not made.'
A
MmaliK / J Mmalik
[37] The three
factors mentioned in the section should not be considered
cumulatively:
See
Wijker
supra
at 729E; and
Too
much
importance should- however, not be attached to misconduct which is
not of a serious nature. In regard to a court's assessment
of a
party's misconduct as a relevant factor under subsections (2) and
(3) of
s 7
of the
Divorce Act... Botha
J A made the following
remarks in Beaumont v Beaumont 1987(1) SA 967(A) at 994...:
'...
(I)n my opinion the
court
is
entitled, in terms of the wide words of para (d) of ss (5) that I
have quoted, to take a party's misconduct into account even
when
only a redistribution order is being considered under ss (3). and
where no maintenance order under ss (2) is made. But I
should add at
once that I am convinced that our courts will adopt a conservative
approach in assessing a party's misconduct as
a relevant factor,
whether under ss (2) or ss (3) ... In many, probably most, cases,
both parties will be to blame, in the sense
of having contributed to
the breakdown of the marriage .. In such cases, where there is no
conspicuous disparity between the
conduct of the one party and that
of the other our courts will not indulge in an exercise to apportion
the fault of the parties,
and thus nullify the advantages of the 'no
fault' system of divorce."
These
remarks apply with equal validity when a court, in considehng the
circumstances which gave rise to the breakdown of the
marhage, also
assesses a party's misconduct as
a
relevant
factor.'
See
Wijker
supra
at 730B-F.
[38] In the instant
matter, the duration of the marriage cannot be a relevant factor, as
it is common cause between the parties
that it is one of almost 26
years.
[39] As to the
circumstances which gave rise to the breakdown of the marriage,
defendant in his claim in reconvention listed 17
grounds therefor.
Of these 17 grounds:
[39.1.] Defendant did
not testify at all regarding plaintiffs alleged intimate
relationships with other women (which comprised
three of such
grounds) and it became clear, during the course of his cross
examination, that this was nothing other than speculation
on his
part:
[39.2.]
Defendant's evidence, despite what can best be described as certain
gratuitously insulting remarks about plaintiff, contradicted,
in the
main, the allegations made by him in his claim in reconvention that
plaintiff was volatile, domineering, manipulative,
critical of
defendant and financially irresponsible (which comprised five of
such grounds). In this regard (a) Plaintiffs largely
unchallenged
evidence was that she worked almost throughout the marriage and made
contributions towards the expenses of the household
in accordance
with her means, both from income and from capital; (b) defendant's
counsel put it to plaintiff during cross examination
that she was
aware that the defendant himself did not wish to divorce when
plaintiff instituted these proceedings against him;
(c) defendant
testified in his evidence-in-chief that prior to the parties moving
to Hout Bay in 2005/2006. the family had a
'baie
sosiaal. baie rustig. goeie familie
/ewe'
although defendant testified that at times plaintiff withdrew from
him to the point where she did not communicate with him
for days at
a time, and that plaintiff became volatile during her monthly
menstrual cycle.
However
he was quick to emphasize that her conduct up until late November
2309 indicated that she was someone 'waf
baie
gelukkig is',
and
that it was only at this stage that it became apparent to him that
plaintiff was unhappy in the marriage;
[39.3.]
Defendant emphasized that what he perceived to be the difficulties
in the marriage really only became apparent in late
November 2009,
i.e., almost 25 years into the marriage (this covered three of
defendant's grounds). Further , one of the grounds
alleged by
defendant was that the marriage broke down as a result of
plaintiff"s conduct
subsequent
to
the institution of proceedings by plaintiff against him, which can
hardly be a relevant factor for purposes of determination
of a
forfeiture claim;
[39.4.]
Although defendant alleged that what also caused the breakdown of
the marriage was plaintiffs conduct towards the children,
particularly the parties daughter, Lisa, defendant himself in his
evidence-in-chief stated that plaintiff
was
'n goeie ma vir Lisa en Margit En self teen my kinders het sy 90%
van die tyd baie korrek opgetree
...'.
Defendant further testified that, in his view. Lisa's conduct (as
opposed to plaintiffs) was the mam cause of the altercations
which
did take piace between plaintiff and Lisa and that he had at times
himself intervened in support of plaintiff. Defendant
did not deny
that he himself had also had confrontations with Lisa. This evidence
dispenses with two of defendant's grounds for
the breakdown of the
marriage;
[39.5.] The only other
grounds advanced by defendant were that the parties no longer lived
together as husband and wife (which
is common cause), that there is
no meaningful communication between them and that defendant has lost
all interest in the continuation
of the marriage.
[40] In my view,
defendant has not come close to persuading this court that, in the
circumstances of the instant matter, plaintiff
should be ordered to
forfeit her accrual claim.
WHETHER ANY OF
DEFENDANT'S ASSETS SHOULD BE EXCLUDED FROM THE ACCRUAL CALCULATION
AS A CONSEQUENCE OF THEM HAVING BEEN ACQUIRED
WITH ASSETS WHICH WERE
EXCLUDED BY HIM IN CLAUSE 5 OF THE ANTENUPTIAL CONTRACT
[41] Defendant's case on
this aspect (although not pleaded as such and despite the fact that
there is no claim for rectification
before this court) boils down to
the following:
[41.1.] The assets which
were excluded by defendant from the accrual system at clause 5 of
the antenuptial contract were:
'Kontant:R22 000.00
Losgoed: R20 000.00'
[41.2.]
Included in the category of
'Losgoed'
of
R20.000 were two Metropolitan Life policies owned by defendant as
well as his pension interest by virtue of his employment
at the
University of Bophuthatswana (although defendant also owned a motor
vehicle with a value of approximately R3.000 to R5.000
and furniture
and household effects including a few Persian carpets);
[41.3.] Virtually
defendant's entire estate has been acquired by him by virtue of his
former possession of the two policies and
his pension interest at
the date of the marriage;
[41.4.] Accordingly,
this court should order that plaintiff has no claim to almost all of
the nett assets in defendant's estate
(the precise extent to which
plaintiff should have no claim was never properly placed before this
court).
[42] In this regard,
defendant relies on the provisions of
s 4(1)(b)(ii)
of the Act
which, for sake of convenience is repeated hereunder;
•
4.
Accrual of Estate - (1)(a)...
(b) in 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 assets 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;'
[43] Although
defendant's counsel argued that plaintiff bears the onus to
establish that defendant's alleged excluded assets should
form part
of the accrual in his estate.
it is clear that
defendant bears the onus to persuade this court that such assets
should indeed be excluded from the accrual.
[44] As to defendant's
pension interest at the date of the marriage, at best for him, the
value of such pension interest was R176.32
plus an equivalent
contribution by his employer, thus R352.64. Indeed, defendants
counsel, whilst cross examining plaintiff,
put it thus:
'En
die verweerder sal getuig by het n pensioen gehad by Bophuthatswana
alhoewel
op
daardie
stadium was dit niks werd nie
.'
(my
emphasis)
[45]
Defendant was unable to explain to this court why no specific
reference was made to his pension interest in clause 5 of the
antenuptial contract As plaintiffs counsel argued, when one looks at
the clear wording of clause 5, the excluded assets are divided
into
two distinct groups, namely.
'Kontant'
en
'Losgoed'.
In
order to successfully contend that the pension interest forms part
of the so-called
'Losgoed'.
it
must be defendants case that
'Losgoed'
is
used as a synonym for
'movable
property'
It
simply cannot be that the defendant's pension interest forms part of
the so-called
'Losgoed'.
If
this was the case, it would not have been necessary for defendant to
draw a distinction between
'Kontant'
and
'Losgoed',
inasmuch
as cash is also regarded as movable property.
[46]
in light of the wording of clause 5 itself, it is clear that the
defendant's argument cannot hold water. If clause 5 had
stipulated
that defendant's 'total movable assets' were excluded, then this
court could possibly have accepted defendant's argument.
I must
emphasize however that defendant made no claim for rectification of
the provisions of clause 5 to amend the wording thereof
and
accordingly he is bound by the clear wording of clause 5 itself. To
my mind, there is no merit whatsoever in defendant's
argument that
his pension interest formed part of the
'Losgoed'
in
clause 5 of the antenuptial contract.
[47]
As to the two policies, the same considerations must apply, and I
similarly find that such policies as defendant might have
had at the
date of the marriage do not form part of the
'Losgoed'
referred
to at clause 5 of the antenuptial contract. Further, and with regard
to these policies, defendant's evidence was less
than satisfactory.
He testified that he was the owner of two such policies. He gave
evidence that he surrendered both policies
subsequent to the
marriage, receiving R100.000 for the first in 1991 and R80.000 for
the second in 1993. He testified that he
had attempted to obtain
documentation from Metropolitan Life in support of his averments but
that he had been informed by the
aforesaid company that it no longer
had any records relating to these policies.
[48]
Under cross examination, defendant was confronted with certain
documentation obtained by plaintiff from Metropolitan Life
under
subpoena
duces tecum.
The
documentation subpoenaed clearly shows the following:
[48.1.] That
Metropolitan Life indeed has the necessary historical records;
[48.2.] The records of
that company show that defendant has only ever been the owner of one
such policy. This was confirmed in
an e-mail dated 30 November 2010
addressed to the plaintiffs attorney by Metropolitan Life, the
content of which reads as follows:
'The entry date of
this policy was November 1969 and the premium at inception was
R10.00 ... We viewed our records on both ID
numbers and and only
found the one policy number 4400913906 linked to J M.'
[48.3.] Policy number
4400913906 was surrendered by defendant on 28 November 1991 and the
nett proceeds of such policy, which
were paid to defendant, amounted
only to R8,887.74, which amount bears no relation to the two amounts
contended by defendant
totalling R180,000.
[49] Defendant's
evidence on this aspect must thus be rejected entirely. Although
defendant's counsel sought to persuade the court
to exclude the
subpoenaed documentation on the ground that it constituted hearsay
evidence, to my mind it clearly does not. particularly
if regard is
had to paragraph 13 of the Minute of the
Rule 37
meeting held on 19
August 2010, in which the parties agreed that:
•
STATUS
VAN BEWYSMATERIAAL
Alle
dokumentasie sal aanvaar word om te wees wat die
[sic]
voorgee
om te wees, tensy spesifiek in twyfel getrek deur die teenkant en in
welke geval die document bewys moet word.'
[50] It is noted that
defendant did not object to the production of the subpoenaed
documents, and accordingly, it was not necessary
for plaintiff to
prove their authenticity.
[51]
During the course of argument, defendant's counsel conceded that
that
the policies are also included in clause
5
was
an idea that manifested itself duhng the proceedings to refer to
them as forming part of the "Losgoed"
in
this regard, he was clearly referring to defendant..
[52]
As pointed out by plaintiffs counsel, if defendant fails to
discharge the onus of proving that his (on his own version)
valueless pension and policy at the date of the marriage formed part
of
'Losgoed
1
in
clause 5 of the antenuptial contract, it is not necessary for this
court to embark on a detailed analysis of how the proceeds
thereof
were utilised by defendant.
[53] Defendant's counsel
also argued that defendant must have meant to include his pension
interest in clause 5 by virtue of the
fact that, as at the date of
the parlies' marriage, the interest which a spouse had in any
pension fund was not deemed to form
part of his or her assets upon
divorce. To my mind, this makes no sense. As a pension interest was
not deemed to form part of
a spouse's assets upon divorce at the
date of the parties' marriage, it would clearly not have been
necessary for defendant to
specifically exclude such a pension
interest from the operation of the accrual as it would, as a matter
of law. have fallen outside
of the accrual had the marriage
terminated prior to 1989 when the relevant amendment to the
Divorce
Act 70 of 1979
came into effect. Defendant's counsel's contention
simply lends credence to plaintiffs argument that defendant could
not have
intended to specifically exclude his pension interest from
the provisions of the accrual.
[54] In any event,
defendant was unable to inform this court with any acceptable degree
of clarity as to how the proceeds of his
Metropolitan Life policy
were appropriated. The same applies to his pension interest, to the
extent that it could ever be regarded
as relevant in light of the
fact that, on his own version, it had 'no value' at the date of the
marriage Indeed, defendant's
evidence on these aspects was so vague
and insubstantial that it placed this court in a position in which
it is well nigh impossible
to determine how such proceeds were in
fact utilised.
[55]
On defendant's own version, the only other
'Losgoed'
which
he owned at the date of the marriage were a 1985 Nissan Exa motor
vehicle with a value of between R3.000 to R5.000, certain
furniture
and household effects which included some Persian carpets, and cash
of R22.000. Defendant testified that he subsequently
donated the
motor vehicle to his son, Peter, and accordingly, that asset can
never be taken into account for purposes of an exclusion
from the
accrual. Insofar as furniture and household effects is concerned,
the parties agreed prior to the commencement of the
trial as to how
such items would be divided between them, and neither requested this
court to place any value on the items so
divided, nor indeed to have
regard to these items at all for purposes of calculation of the
accrual.
[56] As to the cash of
R22.000, defendant attempted to persuade this court that such sum
was utilised towards the purchase of
one of the Prins Street
properties. Defendant however did not adduce any evidence as to how
this specific cash amount was preserved
and appropriated towards the
purchase of any particular immovable property His own evidence was
to the effect that at the date
of the marriage he only had a bank
account at First National Bank which was not an investment account.
He admitted that between
the date of the mamage and the purchase of
the first Prins Street property, he purchased a number of other
assets but did not
satisfactorily explain how these other assets
were financed. He further admitted that he was obliged to repay to
the Fidelity
Fund an amount of approximately R60.000 within a few
years after the marriage. His evidence was insufficient to place
this court
in a position to accept his contention that the specific
amount of R22,000 reflected in clause 5 of the antenuptial contract
(a) increased in value to the extent which he alleged it had; and
(b) was indeed utilised by him towards the purchase of either
the
first or second Prins Street properties.
[57] Accordingly the
defendant has failed to persuade me that any amount, or asset, must
be excluded from the accrual in his estate
by virtue of the
provisions of clause 5 of the antenuptial contract.
[58]
Defendant testified that he received an amount of R50.000 in
1996/1997 as payment of a claim for damages which he had instituted
against the ANC Youth League and SASCO It was not clear from his
evidence what portion of this amount related to damages for
patrimonial loss (he testified that
'Dit
is my kantoor wat aangevai was en so aan, wat ek ook ontvang net'
which
seems to indicate that there may have been a measure of compensation
for patrimonial loss) but later in his evidence testified
that
'Dit
is net oat my gevoelens was seergemaak'.
[59]
It is noted that in terms of s
4
(1)(b)(i)
of the Act, only damages for
non-patrimonial
loss
are left out of account in the calculation of the accrual in a
spouses estate.
[60]
The plaintiff accepted that the defendant had received a payment of
R50.000 in 1996 in respect of a damages claim, but she
was not asked
any details about this payment under cross examination. Further, the
defendant's claims on the pleadings do not
include any reference to
the proceeds of his damages claim being excluded from his estate for
purposes of the accrual calculation.
In argument, defendant's
counsel submitted that the defendant's immovable property at 17
Scott Street, Gardens, Cape Town was
to be excluded from the accrual
in his estate as it had been purchased with the fruits of the two
Prins Street properties as
well as the proceeds of defendant's
damages claim of R50.000. However, this does not accord with the
evidence given by defendant
himself. He testified that the purchase
price of the Scott Street property was funded
'uit
die opbrengs van my huurgeld en my aftree pakket'.
[61] Accordingly, I find
that there is insufficient evidence before me to enable me to
determine what portion, if any, of the
sum of R50.000 should be
excluded from defendant's estate.
CALCULATION OF THE
ACCRUAL
[62] In light of my
findings and conclusions, I calculate the accruals in the respective
estates of the parties to be as follows:
[62.1.] Plaintiff:
Allan
Gray Retirement Annuity Fund
R193
565
The
Amalgan Defined Contribution Provident Fund
R72
403
Total
R265
968
Less
Loan from First National Bank
R50.000
Accrual
in Plaintiffs estate
R215
968
[62.2.] Defendant:
16
Prins Street
R2
100 000
26
Prins Street
R1
530 000
17
Scott Street
R1
930 000
18
Rocklands
R3
150 000
Investments
in Hungary
R2
355 156
Audi
TT motor vehicle
R147
000
Mazda
motor vehicle
R45
000
11
Elise Way, Hout Bay
R2
800 000
Total
14
057 156
Less:
Inheritance
310
000
Accrual
in Defendant's estate
R13
747 156
[63] One half of the
difference in the accruals of the respective estates of the parties
i.e., R 13 747 156 - R215 968, divided
by 2 is R6 765 594.
[64] After deduction of
the value of 16 Pnns Street of R2.1m and the R250.000 advanced on
plaintiffs accrual claim already paid
to her by defendant, I find
that defendant must pay to plaintiff the sum of R4.415.594 in cash.
COSTS
[65] It is clear that
plaintiff has been substantially successful in her claims and I see
no reason why the defendant should not
be ordered to pay her costs,
including the costs of the urgent application launched by plaintiff
under case number 20251/2010.
In this regard, it is clear from the
papers filed of record in that matter that it was only as a result
of the urgent application
that the nett proceeds of the sale of 26
Prins Street were held in trust by defendants attorneys pending
finalisation of the
divorce action between the parties and any
further directions of this court. It is also clear that the
postponement of the divorce
action on 2 September 2010 was
occasioned by defendant terminating the mandate of his legal
representatives at the time and appointing
new representatives. He
should clearly bear the costs of the postponement in these
circumstances.
ORDER
[66] In the result, I
make the following order:
[66.1.] A Decree of
Divorce between the parties is granted;
[66.2.] The value of the
asset of the J M Family Trust must be taken into account in the
assessment of the accrual of the estate
of defendant for purposes of
s 3(1)
of the
Matrimonial Property Act 88 of 1984
;
[66.3.] Defendant shall
pay to plaintiff the sum of R6J65.594 in respect of her accrual
claim, such sum to be paid to plaintiff
as follows:
[66.3.1.] Defendant
shall immediately take all steps necessary to transfer to plaintiff
the immovable property situated at 16
Prins Street Oranjezicht. Cape
Town. The costs of registration of transfer thereof shall be borne
by plaintiff. To this end,
defendant shall sign all documentation
necessary to give effect to the aforementioned transfer within
seven(7) calendar days
of being called upon by plaintiff's attorneys
in writing to do so, failing which the registrar of this court is
hereby authorised
to sign all such documentation on defendant's
behalf;
[66.3.2] Plaintiff shall
retain as her sole property the sum of R250.000 already paid to her
by defendant as an advance on her
accrual claim;
[66.3.3.] The balance of
the sum due to plaintiff, namely. R4.415,594 shall be paid directly
into such bank account as is nominated
in writing by plaintiff
within 60 calendar days from the date of this order, free of
deduction or set off, and to this end. defendant
shall instruct his
attorneys of record to pay to plaintiff on account of the cash sum
payable to her the full amount of the proceeds
of the sale of the
immovable property at 26 Prins Street which are currently held by
them in trust on defendant's behalf;
[66.3.4.] Defendant
shall forthwith sign all documentation necessary to transfer the
Citroen motor vehicle registered in defendants
name but in
plaintiff's possession into the name of plaintiff within seven
calendar days of being called upon by plaintiffs attorneys
to do so
in writing, failing which the registrar of this court is hereby
authorised to sign also such documentation on his behalf
and to
instruct the licensing authorities to make available the relevant
registration documents, alternatively copies thereof,
to plaintiff
in order to enable her to transfer the vehicle into her name;
[66.3.5.] Save as
aforesaid, each party shall retain as his/her sole and exclusive
property those assets currently in his/her
possession and/or under
his/her control.:
[66.4.] Defendant shall
effect payment of plaintiffs costs, including the costs of the
urgent application under case number 20251/2010
and the costs of the
postponement of the divorce action on 2 September 2010 as taxed or
agreed.
[66.5.] The terms of
this order shall be binding upon defendant's estate.
J
CLOETE, AJ