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[2012] ZAECPEHC 28
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Adcock v Adcock and Others (3617/09) [2012] ZAECPEHC 28 (26 April 2012)
19
Of Interest
IN THE HIGH COURT OF
SOUTH AFRICA
EASTERN CAPE –
PORT ELIZABETH
Case No: 3617/09
Date Heard: 6/02/2012
Date Delivered:
26/04/2012
In the matter
ANGELIQUE DANIELLE
MICHELLE ADCOCK
…...........................
Plaintiff
and
SCOTT WILTON ADCOCK
…............................................
First
Defendant
W ADCOCK N.O.
….....................................................
Second
Defendant
SCOTT WILTON ADCOCK
N.O.
…...................................
Third
Defendant
ROSEMARY ADCOCK N.O.
...........................................
Fourth
Defendant
JUDGMENT
REVELAS J
Husband and wife –
proprietary rights – plaintiff ex-wife claiming the existence
of universal partnership with former
husband and a family trust and a
division of the assets thereof – main asset being farm bought
by plaintiff’s father-in-law
– animus contrahendi
scrutinized.
[1] The plaintiff and
the first defendant were married to each other out of community of
property in terms of the accrual system
and their marriage was
dissolved during 2010 in the Southern Divorce Court where a decree of
divorce was granted, but no other
relief. The plaintiff had abandoned
the relief initially sought by her in terms of the accrual system,
and she persued the remainder
of her claim against the four
defendants in this court, alleging the existence of a universal
partnership between herself, the
first defendant (her former husband)
and the
Wilton Trust (“the Trust”
) in equal
shares, alternatively in accordance with a ratio to be determined in
this trial. The first defendant, the plaintiff’s
former
husband, is also the third defendant, and cited in his capacity as
trustee of the Trust. The remaining defendants (the second
and fourth
defendants), are also cited as trustees of the Trust. They are the
plaintiff’s parents in law.
[2] Apart from seeking
a declaratory order to the aforesaid effect, the plaintiff also seeks
confirmation of the dissolution of
the universal partnership and the
appointment of a liquidator with stipulated powers and duties to
realize all the assets of the
alleged partnership, its main asset
being the farm Wiltonside, which is registered in the name of Trust.
To this end the plaintiff
had approached an attorney from Free State,
who consented in writing to act as liquidator should the need for
such an appointment
arises.
[3] The plaintiff
alleged in her particulars of claim, that when the universal
partnership came into being between herself, her
former husband and
the Trust, the latter was represented by the second and third
defendants (her father-in-law and husband) and
that the universal
partnership agreement was concluded orally, or tacitly, or impliedly.
The plaintiff contended that she, the
first defendant and the second
defendant contributed equally to the business of the partnership
their labours, service and skill
on the farm Wiltonside, which was
the main business of he partnership and the farm was acquired during
the subsistence of the partnership.
The plaintiff also alleged that a
property, 4 Cyril Street, Mount Pleasant, Port Elizabeth, was also
acquired by the partnership.
[4] The purpose of the
partnership, the plaintiff maintained, would be for the joint benefit
of the plaintiff, her former husband
and the Trust, with the express
purpose of making profits, upon the marriage being terminated it was
an implied term that the partnership
would be terminated and its nett
asset value distributed equally between the partnerships according to
the partnership ratio.
[5] In
Wille’s:
Principles of South African Law
9
th
Ed (Gen Ed
F du
Bois
pp 1004-1005) a partnership is said to be a legal
relationship between at least two persons, but not more than twenty,
in which
the parties agree to carry on a lawful enterprise and common
to which each contributes something of commercial value with the
object
of making and sharing profits.
[6] The four essentials
of a universal partnership as formulated by RJ Pothier in his
A
Treatise on the Contract of Partnership
(as translated by Tudor)
are:
Each of the partners
must bring something into the partnership, or bind themselves to
bring something into it whether it be money,
or labour or skill.
The partnership
business should be carried on for the joint benefit of the parties.
The object should be
to make a profit.
The contract should be
a legitimate one.
The first three
requirements have been recognized and consistently applied in our
courts in matters concerning the existence of
a partnerships, and
more particularly, universal partnerships between spouses and
cohabitees. The fourth element of legitimacy,
being a requirement
common to all contracts, is obviously no longer a stated requirement
of the enquiry into whether a partnership
has been established or
not.
See:
Bester v van
Niekerk
1960 (2) SA 779
A at 783H-784A;
Mühlmann v
Mühlmann
1981 (4) SA 632
(W) at 634C-J; and
1984 (3) SA 102
(A) at 124 C-D;
Pezutto v Dreyer
1992 (3) SA 370
(A) at 390
A-C;
Ponelat v Schrepfer
2012 (1) SA 206.
[7] The most recent
judgment of the Supreme Court of Appeal on the question of universal
partnerships is the majority judgment of
Brand JA in
Butters v
Mncora
(181/2011)
[2012] ZASCA 29
(28 March 2012). In paragraph
[17] thereof the requirements for a partnership as formulated by
Pothier were confirmed, and the
principles regarding universal
partnerships were set out as follows in paragraph [18] of the
judgment:
“
[18]
In this light our courts appear to be supported by good authority
when they held, either expressly or by clear implication
that:
Universal partnerships
of all property which extend beyond commercial undertakings were
part of Roman Dutch law and still form
part of our law.
A universal
partnership of all property does not require an express agreement.
Like any other contract it can also come into existence
by tacit
agreement, that is by an agreement derived from the conduct of the
parties.
The requirements for a
universal partnership of all property, including universal
partnerships between cohabitees, are the same
as those formulated by
Pothier for partnerships in general.
Where the conduct of
the parties is capable of more than one inference, the test for when
a tacit universal partnership can be
held to exist is whether it is
more probable than not that a tacit agreement had been reached”.
What renders this
matter substantially different from the usual situation where one of
the parties claims to be a partner of a universal
partnership, is the
allegation that a trust was one of the partners of the universal
partnership.
The Evidence
[8] The witnesses for
the plaintiff was herself and Professor Staude of the Rhodes Business
School. Only the second defendant testified
on behalf of the
defendants.
[9] The plaintiff and
the first defendant met on the beach at Kenton-On-Sea in 1989. They
married each other on 6 April 1995 in
Phalaborwa, the hometown of the
plaintiff. At the time the first defendant was living in Port
Elizabeth. When the plaintiff and
the first defendant met, the
plaintiff was a student at Rhodes University, studying for a BA
degree and the first defendant was
studying Building Management at
the Technicon in Port Elizabeth. The plaintiff abandoned her studies
just before completing her
course and did not obtain her degree,
something she deeply regretted.
[10] Prior to the
marriage the first defendant worked for a while at Stocks and Stocks,
a civil engineering firm, and at Rockland’s
Chickens, a
commercial chicken farm. For the first two years of the marriage the
couple lived in Phalaborwa. They worked in the
business of the
plaintiff’s father. The main form of business was the sealing
of tanks and reservoirs for the mines in the
area, and also lining
swimming pools. According to the plaintiff, her husband “shadowed”
her father, and she “shadowed”
her mother. Her husband
did not like it much there and saw no future for himself in her
father’s business.
[11] Towards the end of
1996, they moved back to the Eastern Cape where the first defendant
hailed from. Two children, a boy and
a girl were born of the marriage
in 1999 and 2001 respectively. The parents of both parties were
concerned as to how this young
couple would make a living. At the
outset it should be noted that at the time, neither of these young
people in this marriage,
when they started a life together, showed
any signs of making a living without the financial assistance or
otherwise of their parents.
[12] They moved onto
the farm Wiltonside, which was made available to them by the second
defendant. Because of his experience with
chickens at Rocklands
farms, the first defendant tried his hand at chicken farming, on a
small scale at first. Live chickens were
sold to people in the area.
Later, this operation expanded and chickens were sold directly to the
butchers and other purchasers.
The plaintiff recalled how she used to
sell broiler chickens from the boot of her Toyota Corolla motor car
to the butcher in Kenton-On-Sea.
Crocodiles were also introduced to
the farm and were fed the chickens not fit for sale. The plaintiff’s
father bought ten
heifers and for the entire time that the couple
lived on the farm, there had always been cattle and they depended on
the cattle
to supplement their cash income.
[13] The first
defendant’s chosen occupation was that of a professional
hunter. During about 1999, he turned his occupation
into a business
and the chicken business became redundant. The defendant would take
hunting parties or individual hunters on hunting
trips in the area
and in other parts of the country. Many hunters were from abroad.
Later, game was introduced onto the farm, also
for hunting purposes.
The plaintiff acted as an hostess, for the hunters and refurbished
the prefab house on the farm for the visiting
hunters. However, most
of the hunting in which the first defendant was involved in, was
conducted at other locations. The plaintiff’s
duties were to
make tea and coffee for the hunters. During the subsistence of the
marriage the first defendant went to the United
States of America to
market his hunting business and was away from home for almost two
months in total. His work in this field
caused him to be away from
home for periods of a few days or for more than two weeks at a time.
The plaintiff attempted to create
the impression that the first
defendant was away on hunting trips for most of the time, leaving her
to fend for herself and her
children alone on a farm, beset with
dangers and problems with all the responsibilities of the entire farm
on her shoulders alone.
The first defendant did not testify, but the
extent of his absenteeism from the farm was nonetheless in dispute
and appeared to
be exaggerated.
[14] The plaintiff
described life on the farm as an arduous experience. The road to and
from Grahamstown was treacherous in bad
weather. She was alone in the
farm far too often. She carried a pistol with her to ward off snakes.
Two of her dogs were bitten
by snakes. The plaintiff described how
water pumps would break when the defendant was away, and how she was
without hot water for
a week, having to boil water in the stove to
enable her and her children to bath. The particularly recalled with
evident resentment
that when she called her father-in-law when the
water pump broke one night, he advised that she should “get
someone to fix
it”. The water pump broke only once.
[15] The plaintiff gave
several examples of how she assisted on the farm and contributed
towards the farming operations. She testified
that she helped and
supervised digging out a swimming pool, she renovated the old
dilapidated brick farm house (pointed it herself)
and enhanced the
prefab house on the farm, and organized the staff. She also took one
of the farm workers to hospital (once), when
he was attacked and
bitten by the farm dogs. She also liaised with the accountant who was
responsible for keeping the books of
the Trust. She fed the
crocodiles on the farm, and sometimes slaughtered chickens in the
middle of the night, though the latter
activity occurred rarely if I
understood the evidence correctly.
[16] I was somewhat at
a loss to apprehend how some of these facts demonstrated the
existence of a partnership, but they nonetheless
gave one an
impression of the plaintiff’s life on Wiltonside.
[17] Once the children
started attending school, many more demands were made on the
plaintiff’s time, since the children were
day scholars at a
private school in Grahamstown. The plaintiff added somewhat
resentful, that this at the behest of the fourth
respondent (her
mother-in-law) was because a Government School “was not good
enough for her grandchildren”. Given the
fact that the
plaintiff lived on a farm 50 kilometres from Grahamstown, with no
other school any closer, this comment struck me
as somewhat unfair.
But then again, it became apparent during the trial there was a very
strained relationship between the plaintiff
and her parents-in-law.
[18] The plaintiff,
despite her perceived adverse circumstances and the hardships she
believed she was subjected to, did not rest
on her laurels. She
started a business selling foodstuffs, primarily salad dressings,
under the name “The Farmers Wife”.
With the help of her
assistant Thembi (her surname was not given), salad dressings were
made in the former chicken run which was
refurbished for the making
of her products. Her business expanded. In the Western Cape new
products such as jams and other bottled
products were sourced and
then sold in the Eastern Cape under “The Farmers Wife”
label. Despite her husband’s
scepticism, the plaintiff did so
well as an entrepreneur, that retail stores such as Pick ‘n Pay
in Grahamstown bought her
products. Later more retail stores as far
as Port Elizabeth had “The Farmer’s Wife” products
on their shelves.
[19] The plaintiff was
even invited to give a talk at the Rhodes Business School. Professor
Staude, former director of the Rhodes
Business School gave evidence
at the trial that he had invited her for a two hour talk to business
students and it was a huge success.
The students were “eating
out of her hand” he said. Her topic was “Business
Control. Professor Staude attributed
the plaintiff’s success to
her passion for business. During cross-examination, he was asked
whether he knew that no tax returns
were completed for the “The
Farmer’s Wife” enterprise and that was sold for
R50 000.00 that same year. “The
Farmers Wife” was
indeed sold for R50 000.00 to the first defendant when the
parties were in the process of becoming
divorced. The plaintiff
maintained that she was under duress to sell her business for so
little to her husband who insisted that
she sell it to him “because
he said he had nothing”.
[20] The hunting
business of the first defendant and the plaintiff’s “The
Farmers Wife” enterprise, were conducted
separately from the
farming. The cattle seemed to be mainly overseen by the first
defendant or the second defendant in the absence
of the former, and a
farm worker named Thembisile, whose surname was also not given. From
time to time Thembisile’s father
also helped out on the farm.
More than once during her evidence the plaintiff referred to the
apparent invaluable contribution
made by Thembi, her assistant and
Thembisile to the farming operations. She even said that Thembi
should also have been made a
partner and in the business. In her
business correspondence she also praised Thembi. An evaluation of all
the evidence led me to
form the impression that very little would
have been accomplished on the farm without the help of these two
workers due to the
constant absences of the plaintiff and the first
defendant.
[21] All tax returns
relating to the farm Wiltonside were completed by the accountant who
kept the books of the farm. The plaintiff
liaised with the accountant
concerning their finances and the business of the Trust. All finances
pertaining to the hunting business,
the Farmers Wife, the cattle,
chickens and very much all else went through the books of the Trust.
Even the family’s boats
kept at Kenton-On-Sea, were accounted
for on the Trust books.
[22] The plaintiff’s
errands, meetings and deliveries in connection with her business had
to be carefully planned and co-ordinated
around the children’s
school, and particularly their extra-mural activities. This meant
that the plaintiff and her children
would leave the farm often before
sunrise in their car (a Toyota Corolla) packed to the rafters with
“The Farmers Wife”
produce, the children’s sports
clothes etc. Except for school holidays the plaintiff would spend all
her week days in Grahamstown,
mostly waiting for the children. The
children often changed into their sports clothes in the washing rooms
of the Wimpy Restaurant
in Grahamstown.
[23] These long waiting
periods in Grahamstown led to another achievement on the part of the
plaintiff. The plaintiff enrolled as
a full time student to complete
her BA degree. The plaintiff described how she always felt that she
had disappointed her parents
by not completing her studies and at
last she believed she had found the opportunity to demonstrate to
them that she had it in
her to obtain a degree. She passed all her
subjects, some with distinction and even “top of the class”.
She mentioned
that her husband and parents-in-law were absent on the
day of her graduation ceremony, despite her invitation to them. She
was
now a wife, mother, business entrepreneur and a person with a
degree. She was clearly very enterprising and energetic.
[24] The plaintiff’s
enthusiasm for her studies was not shared by the rest of the family.
The fourth defendant, (the plaintiff’s
mother-in-law), in an
attempt to be reconciliatory after a spat between the plaintiff the
second defendant, wrote a letter to the
plaintiff in which she
inter
alia
urged her to give up her studies. It is
clear from the letter that the fourth defendant sought to persuade
the plaintiff that her
responsibilities on the farm and towards her
family did not allow for this new, extra activity. She urged her
daughter-in-law to
make sacrifices in the way Christ did, and the
plaintiff to see her life and responsibilities on the farm as an
adventure. The
plaintiff’s description of her life on the farm
certain did not convey the impression that she saw it as an
adventure. She
rather saw it as an adverse experience, filled with
hardships she did not bargain for when she got married, but that she
tried
to make the most of it. The plaintiff produced this letter in
evidence, as further proof of her substantial contribution to the
partnership and relied on the following paragraph in particular:
“
Your
capacity or ability of fulfilling the demanding duties of being a
mother, a wife, a businessman, running the farm on your own
and being
a student”.
[25] The plaintiff had
many responsibilities, but the evidence does not support the
proposition that the plaintiff ran the farm
on her own. The lion
share of actual farming activities, such as maintenance, looking
after the chickens, and cattle and selling
them and organizing the
game, were performed by Thembisile, the second defendant and the
first defendant. The plaintiff did from
time to time help out with
these activities, but not to the extent that they were here usual
duties.
[26] The second
defendant’s role on the farm was, according to the plaintiff,
more to do with the maintenance on the farm,
such as fixing fences
and the like. When the first defendant was away, the plaintiff said,
there would often be problems which
arose because the instructions
given to the staff by the second defendant would be in conflict with
those given by his son before
he left the farm on a hunting trip. She
said these problems then had to be sorted out by her, apart from all
her other tasks. The
plaintiff and the second defendant clearly did
not get along. That was common cause during the trial.
[27] The defendants
described the plaintiff’s contribution to the farming
activities in their plea as “menial”.
Her counsel, Mr
Jooste, referred me to the literal meaning of the word “menial”.
In the Concise Oxford Dictionary (7
th
Edition) the meaning of the word “menial” in
relation to service, is given as “degrading” or
“servile”.
The plaintiff became visibly upset about the
fact that the defendant had described her contribution to the farming
operations in
these terms, and justifiably so.
[28] To conclude, the
plaintiff and her husband ran businesses from the farm to support
themselves. Their main source of income
was “The Farmer’s
Wife” enterprise which was very successful. The chicken
business later made way for the first
defendant’s hunting
business. The cattle, which also originated from the plaintiff,
through the father, provided them with
extra cash. The plaintiff also
contributed to the farm, through her parents (and once through the
finances of the business) by
providing vehicles which were used on
the farm, and also for ferrying the children to school, or to take
hunters to their destinations.
[29] The defendants
applied for absolution of the instance at the end of the case
presented for the plaintiff. The gist of the application
was that the
plaintiff’s pleadings did not accord with her evidence in
court. In her particulars of claim the plaintiff maintained
the
partnership consisted of herself, the first defendant and the Trust.
When specifically questioned about the partnership’s
members
during cross-examination, and by myself to clarify her position, the
plaintiff stated that the partnership was between
herself and the
Trust only. It was also argued that on the evidence presented it
could not be found that a universal partnership
existed.
[30] No negative
inference could be drawn from the discrepancy between the plaintiff’s
pleadings and her statement in court
about the actual partners in the
alleged universal partnership. She expressed an opinion which, on a
rather technical ground, was
at variance with her pleadings, which
one must emphasize, emanated from the offices of her legal team. In
my view, that did not
constitute a ground for absolution from the
instance. Ordinary caution prevented me from granting absolution on
any of the other
grounds advanced. The defendants had a case to
answer to, particularly since the books of the Trust were intertwined
with the business
ventures of the plaintiff and the first defendant
which were conducted from the farm.
Discussion
[31]
It
was clearly more advantageous to the plaintiff to allege a universal
partnership with the Trust and her husband, than a universal
partnership with her husband alone. Counsel for the plaintiff, Mr
Jooste, relied on the judgment in the
Land and
Agricultural Bank of SA v Parker and Others
2005
(2) SA 77
where criticism was levelled against the abuse of family
trusts in what Cameron JA (as he then was) described as a “battle
about a family trust” (at 81 G-H). The particular, the
paragraphs relied upon by the plaintiff were paragraphs 37 and [37.1]
of the judgment (at 90 D-G) where it was held that:
“
[37]
The courts will themselves in appropriate cases ensure the Trust form
is not abused. The courts have the power and duty to
evolve the law
of trusts by adopting the trust idea to the principles of our law
(
Brown
v Blann, Botha NNO and Another
).
This power may be invoked to ensure that trusts function in
accordance with business efficacy, sound commercial accountability
and the reasonable expectations of outsiders who deal with them. This
could be achieved through methods appropriate to each case.
[37.1] As mentioned
earlier, within its scope the rule that outsiders contracting with an
entity dealing in good faith may assume
that acts performed within
its constitution and powers which have been properly and duly
performed and are not bound to enquire
whether acts of internal
management have been regular, may well in suitable cases have a
useful role to play in safeguarding outsiders
from unwarranted
contestation of liability by trusts that conclude business
transactions.
28
[1984] ZASCA 19
;
1984 (2) SA 850
A
F-G
Per
Joubert JA.”
[32] Mr Jooste invited
me to develop the common law pertaining to trusts, so as to find
application in this matter, and infer the
necessary
animus
contrahendi
on the part of the trustees to
form a universal partnership,
and essentially to
hold that the contestation of liability on the part of the trustees
qua
Trust,
would
be an abuse of the Trust. The extension of a tacit agreement to
include the Trust in this partnership by developing the common-law,
would not be a simple matter.
[33] In the judgment of
the Appellate Division (as it then was) in
Mühlmann v
Mühlmann
(
supra
at 124 A-D), the enquiry into whether
a tacit agreement was concluded to form a partnership was held to be
“
whether it was more probable than not that a tacit
agreement had been reached”.
At 123 H-J of the judgment,
courts are warned to be careful to ensure that there is the
animus
contrahendi
to form a partnership and that the conduct from which
a contract is sought to be inferred is not simply what reflects what
is ordinarily
to be expected of a wife in a given situation. To find
that the second and fourth defendants intended to bind the Trust a
partner
in a partnership of the kind alleged, the normal principles
applicable to the existence of a tacit contract are to be applied.
[34] The plaintiff is
therefore required to establish “conduct in circumstances which
are so unequivocal that the parties
must have been satisfied that
they were in agreement” (See:
Christie, The Law of Contract
in South Africa, at 85
and the
Butters
judgment (
supra
)
at paragraph 18 (d)
.
[35] The plaintiff does
not rely on the existence of a
universorum quae ex quaestu veniunt
where the parties contract a partnership of all that they may acquire
during the continuation thereof from every kind of commerce.
The
plaintiff seeks to establish a
universum bonorum
, where the
parties agree to put in common, all their property, both present and
future. This is very common with couples, (married
to each other or
not), who live with one another and share a relationship of caring
and sharing. The second and fourth respondents
are obviously
outsiders with regard to this relationship, and to find that the
Trust became a third partner in this type of partnership
will require
a finding that the second and fourth defendants had the intention to
bind the Trust in this way. That is something
that cannot be inferred
easily from their conduct since from the onset, the relationship
between the plaintiff and the second defendant
was strained.
[36] All the evidence
suggested that just after the parties were married it did not look as
if they were going to make a living
on their own, and therefore the
second defendant lent them a helping hand in offering to let them
live on the farm. The primary
motive behind this gesture was to
enable them to live cheaply and find their feet. The second defendant
never embarked on any business
venture, with them. Even though he
visited the farm primarily to maintain it, in the course of which he
liased with Thembisile
about the cattle and other matters on the
farm. He never conducted himself in any way which could be construed
as him having aspirations
to earn any profits from the children’s
business ventures. When he visited the farm he conducted himself as
the farmer, a
father figure, and the owner of the farm (even though
the legal position was that the Trust was the owner). The chickens
and cattle
were no longer profit making entities when the parties
decided to divorce each other. The plaintiff did not even know what
breed
of cattle was kept on the farm.
[37] Much was made of
the fact that the first defendant (also cited as the third
defendant), did not testify. The plaintiff’s
version of events,
together with that which was put to her on the third defendant’s
behalf during cross-examination, does
not take the case for a
partnership with the Trust much further. On the evidence presented,
it could arguably be found that there
was tacit agreement between the
plaintiff and her husband to form a universal partnership (which was
never the case for the plaintiff),
but that does not apply to the
Trust. One has to have careful regard, as the case law cautions, to
the question of whether there
was the required
animus
contrahendi
on the part all three the alleged partners to form
a universal partnership.
[38] In my view, the
first defendant could not, as third defendant, in his capacity as
trustee, unilaterally bind the trust to such
a partnership. That
would have been contrary to the prescripts of the Trust Deed. The
conduct of the second defendant is most essential
to this enquiry.
[39] Counsel for the
plaintiff submitted that in all things, the second defendant acted
typically as the main partner of the universal
partnership and had
most of the major decision making powers. I would agree with that
submission, to the extent that he made all
major decisions. On any
issue or suggestion, e.g. to make alterations or erect new structures
on the farm, the second defendant
had the last word. An example
thereof was his refusal to permit additional accommodation for
hunters being built at the river on
the farm. Although the second
defendant lived in Kenton-On-Sea with his wife, and he did not want
keys to the farm house, he did
not visit the farm as a guest. In my
view, his actions were in keeping with that of an owner.
[40] The second
defendant did not see the farm as a partnership asset. He created
trusts, specifically with the purpose of keeping
property such as the
houses and farms he bought, in his family, for the benefit of his two
sons and their biological offspring,
but not for any former daughters
in law, of which he had two. He disliked them. The trust deed of the
Trust was even amended after
the divorce of his other son, so as to
exclude the children of the ex-wife of his other son, from an earlier
marriage. The class
of beneficiaries created the founder are clearly
incompatible with the Trust being a partner in a universal
partnership with only
two members of the family, to the exclusion of
the other beneficiaries.
[41] The farm
Wiltonside was made up of three portions which were bought in 1996
(before the creation of the Trust), 1997 and 1996
respectively, and
registered in the name of the Trust. The second defendant financed
all the purchases. The second defendant’s
financing of the
purchase of the farm Wiltonside is a very significant fact to
consider in this matter as well as the fact that
the purchase of the
first portion took place before the Trust was even established.
[42] The several
control mechanisms built in the Trust Deed to keep the Trust assets
in the family, particularly the stipulation
that if the founder and
his wife (the second and fourth defendants) die, the assets of the
Trust are to be distributed to their
children and grand children,
militate against the notion of the Trust as a partner.
[43] That some of the
cattle on the farm were advanced by the plaintiff’s father and
that the plaintiff and the defendant
made improvements to the
homesteads and other areas around the house during their twelve year
sojourn on the farm, does not give
rise to an inference that a
partnership with the Trust existed. They did not seek to make a
profit for themselves or the Trust.
Perhaps they thought to improve
their future inheritance, but that is a different matter entirely.
[44] The manner in
which the plaintiff and the first defendant came to live on the farm
was, as counsel for the defendants, Mr Nepgen,
put it: “no more
than a family arrangement to provide them with a place to stay and an
opportunity to earn a subsistance”.
The plaintiff and the first
defendant left Wiltonside sometime before the divorce, with the view
to make a better living with the
help of the plaintiff’s father
(once again). He had in the meantime, also moved to Port Elizabeth.
[45] The fact that the
plaintiff liased with the second defendant’s accountant of many
years, Mr Riley, and that the financial
statements concerned were
those of the Trust, does not give rise to an inference that the Trust
was in partnership with the plaintiff
and her husband either. The
second defendant allowed her and the first defendant (his son) to use
the Trust’s status as a
VAT vendor, and to use its VAT number
to reclaim tax in respect of the farming operations. This was another
family arrangement.
The second defendant’s very limited
knowledge of the books does not enhance the probabilities that the
Trust was a partner.
On the contrary, it detracts therefrom because
the second defendant was the founder of the Trust, and he wanted
nothing to do with
the business ventures run from the farm. The
financial statements in question were also not an accurate reflection
of the Trust’s
financial position, because they were so
intertwined with the finances of the other business ventures run from
the farm.
[46]
I
am unable to infer any intention on the part of the trustees of the
Trust that in these family arrangements, legal obligations
would
arise which would bind the Trust as a partner in a universal
partnership with the plaintiff. For obvious considerations,
the
application of the principles of a Trust, who was not a party to the
marriage,
is iniquitous, if not against public
policy.
[47] In my view,
the plaintiff failed to establish that a universal
partnership existed between herself, the Trust and her husband.
Accordingly,
the plaintiffs claim is dismissed with costs.
________________
E REVELAS
Judge of the High Court
Counsel for the
Plaintiff: Adv Jooste & Adv Zietsman
Instructed by:
Greyvensteins Inc
St George’s House
104 Park Drive
Port Elizabeth
Counsel for the
Defendant’s Adv Nepgen
Instructed by: Joyzell
L Obbes
Suite 203-207
AA House
4 Rink Street
Port Elizabeth
Date Heard: 6 February
2012
Date Delivered: 26
April 2012