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[2020] ZAECPEHC 12
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CG v AG and Another (1078/2019) [2020] ZAECPEHC 12; 2020 (6) SA 487 (ECP) (5 May 2020)
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Certain
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IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE LOCAL DIVISION, PORT ELIZABETH
CASE
NO: 1078/2019
DATE
HEARD: 20/02/2020
DELIVERED:05/05/2020
In
the matter between
C[…]
G[…]
APPLICANT
and
A[…]
E[…] G[…]
1
ST
RESPONDENT
ABSA
BANK LIMITED
2
ND
RESPONDENT
JUDGMENT
ROBERSON
J:-
[1]
On 6 December 2013 in the Regional
Court, Port Elizabeth, the applicant and the first respondent (Mr
G[…] and Mrs G[…]),
formerly married in community of
property, were granted a decree of divorce, incorporating the terms
of a settlement agreement
Mrs G[…] was the plaintiff and Mr
G[…] was the defendant in the action.
[2]
There was one minor child born of the
marriage, L[…], who was born on 13 December 1998. Mrs G[…]
was awarded primary
care of L[…], who was to reside primarily
with her, and the parties were to be co-holders of parental
responsibilities and
rights. For the purposes of this judgment, the
further relevant terms of the settlement agreement were the
following:
"8
MAINTENANCE
FOR THE MINOR CHILDREN (sic)
8.1
As and·for maintenance of the
minor _children (sic), the Defendant undertakes .to pay to the
Plaintiff a total of amount
of R1 000.00 per for the minor child
(sic), until 18 Birthday (sic). The said maintenance will be paid out
of the rent of the flat
at the fixed property of the parties (Par
11.3.2). Each party shall have the right to approach the Maintenance
Court with an application
for a variation of the maintenance order
should there be a change in either party’s circumstances.
8.2
The maintenance _payable by
the Defendant shall increase annually on the anniversary date
of the Order of divorce
by a percentage equivalent to the CPIX.
8.3
The Defendant will maintain the minor
child on· his medical aid and will be liable for all excess
amounts not covered by
the medical aid.
''
8.4
The parties agree that the said R1
000.00 will cover all school fees, the
expenses for books, the expenses
for school. clothes and expenses for
extra mural activities."
11
IMMOVABLE PROPERTY
11.1
The parties record that they are the.
joint owners of immovable property situated at 81 L[…]
C[…], Uitenhage,
that consist (sic) of a house and a flat.
11.2
The immovable property will 'stay on the
name of both the parties, until such a time that the parties decide
to sell the property.
If the property is sold , the profit will be
shared 50/50.
11.3
The Plaintiff will reside in the
mentioned house, without paying any rent, subject to the
following:
11.3.1
The Plaintiff shall pay all water , electricity
and municipal fees on the said property;
11.
.3.2 The Plaintiff shall endeavour to rent out the flat to generate
the maximum income from it. The Plaintiff
shall keep the
amount of R1 000.00 (as in par. 8.1) from rent generated for
the maintenance of the minor. child. In the event
that the flat is
not rented out / no income is generated from the flat, the Defendant
will pay the aid amount / difference
in the maintenance to the
Plaintiff. If the flat is rented out f r more than the mentioned
maintenance, the difference in rent
will be shared between the
parties."
[3]
In this application Mr G[…] seeks
an order terminating the joint ownership of the immovable property
mentioned- in clause.
11 (the property) together with other relief
relating to the manner in which the division of the. property is to
take place. Mrs
G[…] opposed the application. Absa Bank did
not appear and according to Mr G[…] the bond on the property
in favour
of Absa has been paid up.
[4]
Mr G[…] has brought his
application utilising the
actio
communi dividundo
(the
actio).
[5]
In
Robson
v Theron
1978 (1) SA 841
(A) the
actio
was
discussed as follows at
855A-F:
"The
basic . notion underlying the.
actio communi dividundo
is that
no co-owner is normally obliged to remain such against his will. Van
Leeuwen, Censura Forensis, 1.4.27.1. Accordingly when
co-owners are
desirous of having their joint property divided and the share of each
allotted to them in severalty , they may agree
to the division among
themselves without having recourse to judicial proceedings.
‘
Where
there are co-owners who have agreed to divide then the only relief
that one can claim from the other is an action for specific
performance in terms of that agreement. Secondly if there is a
refusal on the part of one of the co-owners to divide then the other
co-owner can go to Court and ask the Court to order the other to
partition. Again, if the parties agree that there is to be a
partition but the parties cannot agree as to the method or mode of
partition, the Court is asked to settle the mode in which the
property is to be divided
(Ntuli
v Ntuli ,
1946 T.P.D. 181
at p. 184 , per BARRY , J.P.).
The
Court has a wide equitable discretion in making a division of the
joint property, having regard,
inter alia,
to the
particular circumstances, what is most
to the advantage of all the co-owners and
what· they
prefer. Bort,
Advyssen,
19; Van Leeuwen,
Censura Forensis,
1.4.27.5;
Voet,
10.3.3. It is
interesting to note that the modes of division referred to by the
Roman-Dutch jurists are substantially identical
to the modes of
distribution of partnership assets as described by
Pothier.
Cf.
De Groot,
3.28 6. Thus where it is impossible, impracticable
or inequitable to make a physical division of the joint property,
the
court in exercising. its equitable
"discretion may award the joint property to one of the
co-owners provided that he compensates the
others, or cause the joint property to be
put
up to auction and the proceeds divided among
the co-owners.
Voet ,
10.3.3, read with
Voet
,
10.2,22 - 28;
De Groot,
3.28 8; Van
Leeuwen,
R.H.R.,
· 4.29.3; Van
Zutphen,
Practyke de Nederlantsche
Rechten, sub
voce
scheydinge no. 7; Wassenaar
Practyck Judicieel
cap.
7. no. 45; Pause,
Observationes Tumultuariae
Novae·-,
vol. 1, no. 77. Cf.
Estate Rother v Estate
Sandig,
1943
AD 47
at pp. 53 - 54;
Drummond v Dreyer ,
1954 (1) SA-306 (N)
.
[6]
In hi founding affidavit Mr G[…]
said that the initial motivation for Mrs G[…] continuing to
reside in the property
was to· provide a home for L[..]. It
was envisaged that once he finished school the property would be sold
and the proceeds
would be divided. Since the divorce Mrs G[…]
has continued to reside in the property with L[…] and has paid
her financial
commitments in respect of the property. Mr G[…]
has paid the insurance on the property.
[7]
According· to Mr G[…]
one Ms S[…] d[…] P[…] has resided at the
property with Mrs G[…]
for the last five years, and provides
financial' support for Mrs G[…]. Mr G[…] belives that
Mrs G[…] and Ms
d[…] P[…] are life partners.
[8]
Mr G[…] stated that he.no longer
wishes to be a joint owner of the property. He first requested Mrs
G[…] to agree
to the sale of the property when L[…]
turned 18 years, but Mrs G[…]
refused
the request. During 2018 Mr G[…] attorneys rote to Mrs
G[…] advising her of his wish to sell the property and
provided
her with the option to purchase his half of the property or
to place the property on the open market for sale. Mrs G[…]'
attorneys responded, referring to the settlement agreement and
pointing out that the net profit of a sale could only be shared
if t
e parties decided to sell the property. Mrs G[…], so it was
stated, was currently n twilling to agree to the sale of
the
property.
[9]
Further efforts made by Mr G[…]
through his attorneys, including providing Mrs G[…] with a
written consent to the
sale of the property on the open
market, and warning her of an approach to the High Court for
relief, proved unsuccessful.
[10]
Mr G[…] annexed to his affidavit
various valuations of the property by estate agents, including some
provided by Mrs G[…].
In her attorneys' letter to which the
valuations were attached, it was stated that other than a sale
pursuant to the offer made
through the agency of Mrs G[…]'
brother, Mrs G[…] had no intention of selling the property.
[11]
In Mrs G[…]' answering affidavit
she said that L[…] is now a major but is not self- supporting.
He has employment
but is unable to
afford his own accommodation and resides with
her, rent free.
He does make a small contribution to the cost
of food but is otherwise dependent on her and Mr G[…].
Mr G[…]
has a seven ear old grandson (the child of his son
from a former marriage) and this child also sides with Mrs G[…].
She
has assumed responsibility for his care and maintenance, without
any contribution from his parents, who have effectively abandoned
him, or from Mr G[…].
[12]
Ms d[…] P[…] does live at
the property but Mrs G[…] said she was not her life partner.
Ms d[…] P[…]
pays all the household expenses while Mrs
G[…] attends to household chores and takes care of L[…]
and Mr G[…]'
grandson. Mrs G[…] said that if it were
not for Ms d[…] P[…]' contribution, she (Mrs G[…]),
L[…]
and the grandchild would be in dire straits. Mrs G[…]
receives income from the flat on the property but utilises it to pay
for electricity, water and municipal fees, with nothing left over for
her use.
[13]
According to Mrs G[…], at the
time of the divorce she was traumatised and worried about the
future. She had no
qualifications, no form of support,
nowhere to go and a 5 year old child to support.
The settlement
agreement was prepared by Mr G[…]
attorneys and the wording of clause 11 of the settlement agreement
was carefully
considered by her and Mr G[…]. At the time of
the divorce they were renting a property in Queenstown and Mr G[…]
knew that if she had remained there she would not have afforded the
rent . He further knew that she intended to move to the property
in
Uitenhage, which was fully paid , in order to have security of
tenure.
[14]
Mrs G[…] said she has decided not
to sell the property and maintains that Mr G[…] wants to sell
because it suits him
at present and that he has no regard for the
persons who will be adversely affected if the property is sold. She
relies on clause
11.2 of the settlement agreement and
maintain. s that tile words in clause 11.2 "if the property is
sold the profit
will be shared 50/50" mean that the property may
in fact not be sold. She relies further on Mr G[…]'
responsibility
to maintain L[…] and his grandson.
[15]
With regard to the valuations of the
property, Mrs G[…] said that because of the poor state of the
economy it is likely that
the valuations are generous and unrealistic
[16]
With regard to the relief sought by Mr
G[…], Mrs G[…] said that in terms of the
actio
a
court may order a subdivision of
the property.
[17]
In reply Mr Gouws denied that his
attorneys had prepared the deed of settlemen and said it had been
prepared by Mrs Gouws' counsel
and attorney. He did not di pute the
allegations concerning Lourens' circumstances and his grandson, and
main ained that they were
irrelevant for the purposes of the
application. With regard to ubdivision, Mr Gouws said that it would
be prejudicial to him because
he would be nable to sell a subdivided
share in the property.
[18]
The chief ground of opposition at the
hearing of the application was that the settlement agreement
was made
an order of court. Should the court
order the termination of the joint ownership and division of the
property , such order
would conflict with the existing court order in
relation to clause 11.2 of the settlement agreement. The parties have
not decided
to sell the property and Mrs G[…] has in fact
objected to the sale. Accordingly , so it was submitted, the court
did not
have jurisdiction to entertain the application. Mr G[…]
had proceeded on the wrong cause of action. He should have applied
for a variation of the court order, which until then remains in
existence.
[19]
The approach on behalf of Mr G[…]
was that a co-owner may demand partition of the common property at
any time. Clause 11.2
of the settlement agreement did not, so
it was submitted, change the position and Mr G[…] could not be
forced remain
in perpetual co-ownership against his will.
[20]
I do not think that the existence of the
court order can be ignored. In this regard I refer to the judgment of
van Zyl ADJP (as
he then was) in
Ex
Parte: PJLG and another; In re: PJLG and another
[2013]
4 All SA 41
(ECG) where he said at paragraph [32] (footnotes
omitted):
"What
emerges from this is that the making of an order in terms of an
agreement as envsaged in section 7(1) [of the
Divorce Act 70 of 1979
]
brings about a change in the stat s of the rights and obligations of
the parties to the settlement agreement. The reason
for this
lies in the fact that the terms of the agreement are incorporated in
an order of court. The granting of the consent
judgment
is a judicial act. It vests the settlement agreement with
the authority, force and effect of a judgment.
"When
a consent paper is incorporated in an order of Court by agreement
between the parties in a matrimonial suit it become
part of that
order and its relevant contents then form part of the decision of
that Court ... and must be construed upon that basis.""
[21]
In my view the starting point is the
interpretation of clause 11.2 of the settlement agreement and the
effect of it being made an
order of court. The order should be
interpreted in accordance with the underlying contractual
arrangement. In this regard I refer
to the judgment of Gorven J in
Matadin v Parma and Others
[2010]
ZAKZPHC 8 (7 May 2010) at paragraph [2] as follows (footnotes
omitted):
"The
basis for the application is well recognised in our law. The cause of
action invoked by the applicant is the
actio communi dividundo.
This was recognized by the Id authorities including
Voet
and
van Leeuwen and has been recognized ever sine . The underlying
rationale is that every co-owner of property may insist on a
parti
ion of the property at any time unless there is an agreement between
the co owners not to do so within a certain
period.
Even if there is an agreement to
constitute perpetual joint ownership, the. co-owner
may demand
partition at any time"
[22]
it is so that clause 11.2 of the settlement agreement sets a time
before which may not
sell the property.
That time is when they decide to
sell. However
Mrs G[…]' construction of the clause (and order)
as meaning that the property ay never be sold is not a sensible
interpretation
and is in conflict with a co-owner' right to demand
partition at any time. In other words clause 11.2 cannot mean that
she can
withhold her agreement to sell in perpetuity. That would lead
to the absurd result that Mrs G[…] and the other occupants
of
the property could live there indefinitely while Mr G[…] is
unable to exercise any rights of co-ownership, including
t e
right to utilise the
actio.
I am therefore of the view
that the clause, as incorporated in the order, does not take
away Mr G[…]' right as
a co-owner to invoke the
actio.
In
the absence of any other restriction on the sale of the property, the
court order could not deprive Mr G[…] of his right
as a
co-owner to claim a division. clause 11.2 is unfortunately
worded but in my view it was envisaged that the property
would
be sold at some point in the future and the proceeds divided equally.
[23]
A further consideration was the submission on behalf of Mr G[…]
that Mrs G[…] failed
to exercise the discretion she had to
determine when she would decide to sell the property,
arbitrio
bona viri.
[24]
In
NBS
Boland Bank Ltd v One Berg River Drive
CC
and Others; Deeb and Another v Absa
Bank Ltd; Friedman v Standard Bank of SA Ltd
1999
(4) SA 928
(SCA) at paragraphs [24] and [25] the following was said:
‘
[24]
In sum I am of the view that, save, perhaps, where a party is given
the power to fix is own prestation, or to fix a purchase
price or
rental, a stipulation conferring upon a contractual party the right
to determine a prestation
is unobjectionable.
Second , as has been said above, there is an additional reason for
holding that the clause under discussion
is valid. Of course, in some
cases providing for discretional determinations there may be no
enforceable contract until the determination
is made. But when made
an unconditional contract comes into being.
[25]
All this does not mean that an
exercise of such a contractual discretion is
necessarily unassailable.
It may be voidable at the instance of the
other party. It is, I thin , a rule of our common law that unless a
contractual discretionary
power was clearly intended to
be completely unfettered, an exercise of such a discretion must be
made
arbitrio bona viri
(cf
Dharumpal Transport (Pty) Ltd v
Dharumpal
1956 (1) SA 70
(A) at
707A - B;
Moe Bros
v White
1925 AD
71 at 77;
Holmes v
Goodall
&
Williams
Ltd
1936 CPD 35
at 40;
Bellville-lnry (Edms) Bpk v
Continental China (Pty) Ltd
1976
(3) SA 583
(C) at 591G - H; and
Remini
v
Basson1993 (3) SA 204 (N) at
2101 - J). In his commentary
on the Digest
Windscheid
Lehrbuch
des Pandektenrechts
7th ed vol 2 at
407 maintains that such a rule existed in Roman law. He relies,
inter
alia,
on
D
50.17.22, which certainly
appears to provide analogous sup ort for his view.
It reads (the same translation):
'One
must in general approve of the principle that wherever in
actions of -good faith the condition
of someone is
placed in the power of his master or of his
procurator, then this power is to be regarded
as equivalent to
the power of the decision of a good man.'
[25]
Whether or not the exercise of such a
discretion is made
arbitrio bono viri
"requires a determination of
whether it was exercised both reasonably and honestly." (Per
Swain JA in
Mount Amanzi Share Block
Limited v Body Corporate of Windsor Heights Sectional Title Scheme
and Others
(537/2016)
[2017] ZASCA
38
(29 March 2017) at paragraph [31].)
[26]
In my view Mrs G[…]' effective
failure/refusal to decide to sell the property is unreasonble. She
and Mr G[…] have
been divorced now for more than six years.
She has enjoyed the benefit of residing in the property for all that
time, and seems
to have adjusted her domestic life accordingly,
including allowing Ms d[…] P[…] to live there, life
partner
or not. It is however to her credit that she takes care
of Mr G[…] grandchild.' Her attitude suggests that she intends
to maintain this arrangement indefinitely. There is also
an element of capriciousness in
her
attitude, in that according to her attorneys' letter attaching the
valuations (see paragraph [10] above) she seemed amenable
to the sale
of the property but only through the agency of her brother. Her
attitude in my view clashes with the intention
of the parties
expressed in clause 11.2 of the settlement agreement and is not fair
to Mr G[…] who os effectively deprived
of his rights flowing
from co-ownership. He is entitled to challenge this exercise of her
discretion and in so doing , to seek
to enforce the terms of the
court order, which Mrs G[…] has not honoured. Further at
paragraph [32] of
Ex Parte:
PJLG and another
(supra) van Zyl
ADJP said (footnote omitted):
‘
the
most important benefit which accrues to the parties by reason of this
change in the status of their rights and obligations under
the
settlement agreement, is that the court retains authority over its
own orders to ensure that the terms therof are complied
with. This in
turn gives the parties the right to approach
the court for appropriate
relief in the event of a
failure by one of them to honour the terms of a consent order.
Accordingly, by agreeing·
to their settlement
being made an order of court , both parties effectively
commit themselves to comply
with the terms thereof and be
subjected to sanction by the court should they fail to do so.’
[27]
The relief which Mr Gouws is seeking may
be achieved either in terms of the
actio
or by challenging the exercise of
Mrs Gouws' discretion. The result will be the same. And either way
there will be no conflict
with the court order, properly interpreted.
[28]
The second ground of opposition raised
at the hearing was that clause 11.3 of the settlement agreement, now
incorporated in the
decree of divorce, contains maintenance orders in
favour of Mrs G[…] and L[…]. Mrs G[…]·
right to live
in the property without paying rent, so it was
submitted, was a maintenance order, even if not expressly stated as
such. The keeping
of R1 000 of the rent money from the flat for
maintenance for L[…] was similarly a maintenance order.
In terms of
s 8
of the
Divorce Act a
maintenance order can only be
varied in terms of that section.
[29]
I do not agree that clause 11.3, as
incorporated, is a maintenance order in either respect. Clause 11 was
clearly intended to deal
with the property and its use, until such
time as the property was sold. Mrs G[…]'
entitlement to live
on the property without paying rent was merely an
incident of the agreement regarding the property. This entitlement
was not unencumbered
. She was to pay the municipal charges , which
an owner or occupier is obliged t do. Moreover it would be difficult
to quantify
the benefit of living in the property without paying
rent, and the corresponding obligation of Mr G[…] to pay
maintenance
to Mrs G[..].
Section 7
(1) of the
Divorce Act provides
that a court may make an order with regard to the division of assets
or the payment of maintenance by one party to another. I cannot
see
how an agreement that one party lives in the property rent free can
constitute the payment of maintenance by the other party
, as
envisaged in the section.
[30]
With regard to maintenance for L[…],
clause 8 of the settlement agreement provided r the maintenance
of L[…].
Clause 11.3.2 did not oblige either
parent to pay maintenance for L[…]. It was merely a means by
which the R1 000
per month maintenance would be paid if the flat was
rented out. If no rent
[31]
It follows that Mr G[…] is
entitled to the claim partition of the property. The rest of the
relief claimed related to the
method of division. It provides an
opportunity for the parties to agree on the terms of the division
failing which a liquidator
is to be appointed. Mr Mark Rossouw has
consented to such an appointment. The liquidator's proposed powers
are in my view reasonable
and will be incorporated in the order. The
further terms of the order sought are also in my view reasonable and
were not challenged
in the event of me granting termination of the
joint ownership of the properly. The only counter suggestion was a
subdivision of
the property. I agree that this would not be practical
for the reasons given by Mr G[…]. An order that
one or
other of the parties should buy the other's half share would
also not be feasible a d was not proposed by either party. The
intention
of the parties in any event was that the property be sold
and the profits equally divided.
[32]
In the event of the application
succeeding, Mr G[…] sought costs on the attorney and client
scale. It was submitted
that the
application had been necessitated as a result of Mrs
G[…]' lack of co-operation and further
that she had not raised
any valid grounds for opposing the application. In my view a
punitive costs order is not warranted.
The settlement agreement was
made an order of court by consent when both parties were aware of its
terms. I do not think that Mrs
G[…] was vexatious in opposing
the application and relying on the court order. There was a further
prayer that the taxed
costs should be deducted from Mrs G[…]'
50% share oft e proceeds of the sale of the property. In my
view such
an order would be improper nd in essence would be
tantamount to
parate executie.
[33]
The following order will issue:
[33.1]
It is declared that the joint ownership of the parties in the
immovable property known as Erf 7[…] Uitenhage, in the
area of
the Nelson Mandela Metropolitan Municipality Division of Uitenhage,
Eastern Cape Province situated at 81 L[…] C[…],
Uitenhage (the "Property") is terminated, in terms of the
actio communi dividundo;
[33.2]
Unless the applicant and first respondent reach agreement in writing
within1 (ONE) month from date of this order, on all
aspects related
to the termination of the co-ownership, then and in such event, Mr
Mark Rossouw is appointed as a liquidator;
[33.3]
In the event of a liquidator being appointed, each party shall be
liable in equal shares fort e liquidator's fee;
[33.4]
The liquidator shall be empowered and directed to give oversight and
effect to the following that:
[33.4
1] The Property be valued by an independent valuer, recommended by
the Chairperson of the Institute
of
Estate Agents, in Uitenhage or
Port Elizabeth (unless the parties are able to
agree to the
appointment of a valuer
forthwith);
[33.4
2] Immediately upon receipt of such valuation, that the Property
shall be placed on the open market to be sold at the valuation
price,
by an estate agent or estate agents of the liquidator's choice;
[33.4.3]
That Goldberg & De Villiers Incorporated shall be appointed
as conveyancers for both parties, who will give effect
to the sale as
follows, namely:
[33.4.3.1]
The collection of the full purchase price;
[33.4.3.2]
The cancellation and discharge of the mortgage bond;
[33.4.3.3]
The discharge of any further obligations on the Property in respect
of rates, taxes, estate agent's commission and the
like; and
[33.4.3.4]
The distribution to both parties of the nett residue to be determined
in accordance with the provisions of paragraph
33.4.4 below;
[33.4.4]
Immediately after the registration of the transfer of the Property
into a purchaser’s name and after all costs relating
to the
marketing , sale and transfer of the Property including (but without
limitation) estate agents commission , any amount which
may be owing
to the second respondent (in terms of the Loan Agreement and Mortgage
Bond) and the liquidator’s fees have been
paid-
[33.4.4.1]
A 50% portion of the net proceeds of the sale of the Property is to
be paid to the applicant; and
[33.4.4.2]
A 50% portion of the net proceeds of the sale of the Property is to
be paid to the first respondent.
[33.5]
For so long as the first respondent resides in the Property,
the first respondent is ordered and directed
to pay timeously
all water, electricity and municipal fees in respect of the Property
alternatively
and in the event that the Property is vacant,
that the applicant and first respondent be liable to pay, in equal
portions, all applicable
water, electricity and municipal and other
charges, costs and amounts relating to, or associated with, the
Property until such
time as the Property has been transferred;
[33.6]
The parties are directed to give their full co-operation in order to
facilitate the marketing, sale and/or disposal of the
Property,
including giving the estate agent/s access to the Property for
viewings and signing all documents necessary to give effect
to the
sale and registration of the Property;
[33.7]
The Sheriff is authorised and directed to take any steps and do all
such things that the parties have been directed to take
and/or do in
the parties' stead in the event that any of he parties fail/refuse
and/or neglect to do so themselves. This includes
signing any
documentation in respect of and to give effect to the sale and
registration of the Property;
[33.8]
The first respondent is to pay the costs of the application.
JM
ROBERSON
JUDGE
OF THE HIGH COURT
Appearences
Applicant:
Adv M Morgan, instructed by Adeline Deysel Attorneys, Port Elizabeth.
First
Respondent: Adv S Louw, instructed by Rayno Peo Attorneys, Port
Elizebeth
Judgment
delivered by email by arrangement.