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[2018] ZAFSHC 104
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T v T (5231/2016) [2018] ZAFSHC 104 (7 June 2018)
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IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 5231/2016
In
the matter between:
H.
J. T.
Plaintiff
and
M.
J. T.
Defendant
HEARD
ON:
23
MAY 2018
JUDGMENT
BY:
LEFENYA,
AJ
DELIVERED
ON:
7
JUNE 2018
Introduction:
[1]
This is an action for divorce. The plaintiff and the defendant were
married on 01/12/2001 out of community of property with
the exclusion
of the accrual system. There are no children born out of this
marriage. The parties have also entered into
an Ante -Nuptial
Contract (the ANC).
[2]
At the commencement of the trial there was an amendment to prayer 2
of the applicant’s particulars of claim. Initially
the
plaintiff sought payment in the amount of R1 750 000, 00. This was
then amended to an amount of R 975 000, 00. The plaintiff
further abandoned prayer 3 in which she prayed for an order that the
defendant retain her on his medical aid scheme.
[3]
On 23/05/2017 after the case for the defendant was closed, the
parties agreed that the marriage between the plaintiff and the
defendant was irretrievably broken down and that an order may be made
for the dissolution of the marriage and judgment be reserved
in
relation to the remaining disputes. Pursuant to this I made the
following order;
1.
Decree
of divorce is granted
2.
As
per agreement between the parties, judgment in relation to the
plaintiff’s prayer 2 and costs is reserved.
[4]
The plaintiff therefore, now seeks an order that the defendant pay
her the amount of R 975 000 00 being a half share from the
proceeds
of the property situated at Portion 1 of Plot 7, Rayton, Bloemfontein
(the property) or the value thereof. Plaintiff
further prays
for an order that the defendant pay the costs of the action.
[5]
In his opposition the defendant argued that the plaintiff is not
entitled to this amount and that the plaintiff’s claim
be
dismissed with costs.
The
evidence / Facts
[6]
The plaintiff testified and called Mr. Driaan Coetzee (Mr. Coetzee)
to testify on her behalf. The defendant did not testify
nor was any
witness called to testify on his behalf.
[7]
The plaintiff testified that according to clause 4 of their ANC, she
is entitled to an amount of R 975 000 00. This clause reads
as
follows;
“
Dat
indien die huwelik tussen hulle ontbind sou word as gevolg van ‘n
egskeiding die eiendom bekend as Gedeelte 1 van plot
7, Rayton
Bloemfontein, hetsy verkoop of gewaardeer sal word en elke party
geregtig sal wees op een- halwe aandeel
van die opbrengs
van die eiendom, of die waarde daarvan.”
[8]
The clause was loosely translated in exhibit “C”, and
accepted by both parties to read as follows; ‘’
That
in the event the marriage is dissolved as a result of divorce, the
property known as part 1 of plot 7 of Rayton Bloemfontein,
either be
sold or valuated and each party will be entitled to one half share of
the proceeds of the property or the value thereof”.
[9]
The plaintiff’s evidence was that before their marriage, the
defendant proposed that they marry out of community
of
property. She testified that as she was concerned about her future,
she asked the defendant as to what would she be left with
in the
event of a divorce. According to the plaintiff, the defendant told
her not to worry, whereupon an ANC was concluded. In
this contract it
was agreed that the plaintiff would benefit as in the above named
clause 4. The plaintiff further testified that,
at some stage, early
in their marriage, the defendant raised the idea of the property
being sold or transferred to a trust and
that she supported the idea.
She however denied that this was pursued further. She therefore
believed that at all times her interests
were protected by this
clause.
[10]
According to the defendant, in cross examination to the plaintiff,
the property was transferred to MJT Trust (the trust) in
2003 and the
plaintiff had full knowledge thereof. A page 75 of the court bundle
(exhibit D) was submitted as a document purported
to be signed by the
plaintiff. In this document the plaintiff allegedly acknowledged
having knowledge of the sale of the said property
to the trust.
[11]
In her testimony the plaintiff did not dispute that the property was
transferred to the Trust at some stage. She however denied
that she
knew when was this done and which Trust it was. She further testified
that she never saw a copy thereof. She also denied
ever signing any
document, acknowledging that she knew of the sale or transfer of the
property to the trust. She testified that
she started seeing exhibit
D from her attorneys only after the divorce proceedings were
commenced. Counsel for the defendant disputed
this and insisted that
she knew of the transfer. She further denied that she knew that
the property was sold to the trust
to the amount of R 51 850, 00.
According to the plaintiff, when they married the defendant told her
he bought the property for
about R 550 000, 00 and that she could not
have agreed to the sale price of R51 850, 00 as it was not the
correct value of the
property. She also denied that she promised the
defendant that she would not insist on the terms of the ANC.
[12]
Mr. Coetzee testified that he is employed by Equity Property
Professionals as a candidate valuator and that he works under
direct
supervision of a principal valuator. He testified in relation to the
value of the property. His evidence was that he valuated
the property
at the client’s instruction which was for him to determine the
market value of the property at the time. He
then used a comparable
sales method. He explained this as a method whereby he compared the
subject property with the properties
which were more or less the same
in the area. His evidence was that he was not allowed to enter
the property by the defendant
and he was not even allowed to take
pictures of the property. He did not even have access to the title
deed. According to him,
after taking all relevant factors that were
available to him into consideration, he valuated the property to the
amount of R 1
950 000 00 as at February 2018.
[13]
Counsel for the defendant in cross examination of Mr. Coetzee
disputed this value. According to the defendant, the property
was
subject to a usufruct, and his submission was that the value of R 1
950 000 00 could not be the correct one as Mr. Coetzee
did not take
the usufruct into account when valuating the property. Mr. Coetzee
conceded that if there was any usufruct in the
property it could
affect the value. Counsel for the defendant also objected to the
market value determination used by Mr. Coetzee
and argued that he
could have used what is called arms-length method. A further
submission on behalf of the defendant was that
the value of the
property could be an amount of R 1 850 000 00 as contained in the
report that was prepared by a Mr. Konig.
The
Issues.
[14]
The first issue to be determined pertains to the interpretation of
clause 4 of the parties’ ANC and whether under the
prevailing
circumstances this clause can be enforced, and therefore whether the
plaintiff is entitled to her claim or not.
The
second issue is whether the amount of R 1 950 000 00 as determined by
the plaintiff is a correct value of the property or not.
The
Legal Principles:
[15]
An antenuptial contract is a legally binding agreement between the
parties like any other contract. As argued by Counsel for
the
defendant in paragraph 5 of the defendant’s heads
,
“a clause in an antenuptial contract must be interpreted in the
same way as any other contract.
In
Bath
v Bath
[2014] ZASCA 14
the
court said the following;
“
It
is trite that in ascertaining the meaning of a contract a Court must
have regard first to its wording. It must also consider
the context
or factual matrix in which it was concluded. That is so even where
the words on the face of it are clear.”
In
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593
at 603 ( Endumeni case)
the
court said “
Interpretation
is the process of attributing meaning to the words used in a
document, be it legislation, some other statutory instrument
or
contract having regard to the context provided by reading the
particular provision or provisions in the light of a document
as a
whole and the circumstances attendant upon its coming into existence.
Whatever the nature of the document, consideration must
be given to
the language used in the light of the ordinary rules of grammar and
syntax; the context in which the provision appears;
the apparent
purpose to which it is directed and the material known to those
responsible for its production. Where more than one
meaning is
possible each possibility must be weighed in the light of all these
factors. The process is objective, not subjective.
A sensible meaning
is to be preferred to one that leads to insensible or unbusinesslike
results or undermines the apparent purpose
of the document…”
[16]
In Honore’s South African Law of Trusts, 5
th
Edition at page 13, the following is said regarding the duties or
legal relationship between trusts and trustee is that ,
“
a
trustee is a person entrusted with the control of property with which
they are bound to deal with for the benefit of others.”
Therefore,
as alluded to by both parties the trustee may not sell the trust
property.
Reasons
/ Finding
[17]
I will first deal with whether clause 4 in the ANC can be enforced
after the property was transferred to the Trust.
[18]
Clause 4 of the parties’ ANC states that,
“
that
in the event that the marriage between them is dissolved as a result
of a divorce, the property known as Part 1 of Plot 7 Rayton
Bloemfontein either be sold or valuated and each party will be
entitled to one half share of the proceeds of the property, or value
thereof.”
(Exhibit
C)
[19]
The Counsel for the defendant‘s submission, that the house does
not belong to the respondent, but to the trust and therefore
it
cannot be sold is correct. The further argument is that, as the
property cannot be sold, then clause 4 cannot be enforced. The
defendant’s submission, following this, is that the defendant
cannot perform and there can be no one half that the plaintiff
can
claim from the defendant. It should be borne in mind that, when the
defendant transferred the property to the trust in 2003,
he knew very
well that clause 4 existed. Further, in 2007 when he subjected the
property to the usufruct, he knew clause 4 of their
ANC was still
there. He further knew the consequences of the property held in a
trust which is also subject to the usufruct.
[20]
The defendant’s Counsel further argued that the plaintiff
was bringing in the second part of the clause
only
at a later stage after they accepted that the property cannot be sold
as this was never raised in their pleadings. A question
posed
to the plaintiff in cross examination was, where would the
defendant’s half share come from if the property could
not be
sold but if he paid the plaintiff one half share of the value of the
property. As alluded to by the defendant,
a clause
in the ANC should be interpreted in the same way as any other
contract.
(Page
2, para 5, of the defendant’s heads of argument).
[21]
It is therefore correct to read and interpret clause 4 which the
plaintiff relied on in its entirety. In this regard
it is
important to look at the remainder of the clause which clearly
provides that, “
each
party will be entitled to one half share of the proceeds
or
the value thereof
.”
In
my view, reading the entire clause is important and will indeed
assist the Court in “
ascertaining
the meaning of the contract and consider the context or factual
matrix in which it was concluded
”
.
Bath
v Bath
supra.
[22]
The argument by Counsel for the plaintiff was therefore correct
that the last part of the clause should also be read
into the terms
of the clause and be taken into consideration and the property be
valuated.
What
the plaintiff wants at this stage is clearly that the property be
valuated and that the defendant pays her half share of the
value
thereof.
In
BC
v CC
2012 (5) SA 562
ECP,
the court said the following;
“…
the
plaintiff does not seek transfer of the assets held on behalf of the
trust to herself. She only seeks that the value thereof
be considered
in determining the accrual
…’
I
take this to be relevant in this regard even though the case deals
with marriage subject to accrual system and the determination
thereof. Counsel for the plaintiff’s submission was therefore
correct that it does not mean that when the property is transferred
to the trust it cannot be valuated.
[23]
It is also important to note that the defendant does not dispute the
existence and the terms of clause 4. It is common cause
that when the
parties married in 2001 the property belonged to the defendant. The
couple after their marriage stayed in the property
and the defendant
continued to occupy the property after the applicant moved out. The
defendant is one of the trustees. He solely
enjoys the alleged
usufruct. If all these are taken into account, then, the indication
is that, the trust, and the property in
question are closely
interlinked to the defendant. I therefore, cannot find what can
prevent the property that is still there from
being valuated. As
correctly submitted by Counsel for the plaintiff “
it
is either that the property is sold or it is valuated”.
Clause 4 should therefore
be interpreted as such. I am therefore satisfied that clause 4, if
read in its entirety can be enforced
and I disagree with Counsel for
the defendant’s submission that the defendant cannot perform as
the clause is unenforceable.
[24]
The second leg of the first question is whether the plaintiff under
the circumstances is entitled to her claim. It was argued
for the
defendant that the plaintiff as a broker with many years of
experience knew about trusts and that she was aware that the
property
was transferred to the trust. It is indeed correct that the plaintiff
admitted having knowledge of how trusts operate.
She further
testified that she supported the idea of a trust. It is however not
sufficient to say that on this basis the applicant
knew of the
transaction, the amount the property was sold for and that she
approved same.
[25]
Another submission on behalf of the defendant was that at the time
when the agreement was entered into no restrictions were
placed on
the defendant’s right to deal with the property in whichever
way. This is true. Similarly, as Counsel for
the plaintiff
submitted, when the parties signed the ANC it was not said what the
position would be in the event of a property
being transferred to a
trust or if it is a subject to the usufruct. Pursuant to these
arguments, it is appropriate that I look
at the intentions of the
parties or the objective of the ANC at the time of signing the
thereof. This can be ascertained from the
evidence of the plaintiff,
which is the only evidence before the court in this regard. According
to the plaintiff, before they
entered into the marriage, the
defendant suggested that their marriage be out of community of
property. This, according to the
plaintiff, prompted her to want to
know what her security would be in the event of a divorce. She was
assured by the defendant,
and her assurance came in the form of
clause 4 which was drafted by the defendant and which the plaintiff
took for legal advice.
After she was satisfied with its meaning and
content she signed it. At that stage the property belonged to the
defendant and it
was neither a Trust property nor was it subject to a
usufruct.
[26]
The objective of the ANC can also be gleaned from the terms of clause
4. Counsel for the plaintiff argued in this regard in
the plaintiff’s
heads of arguments and referred me to the following paragraph in
Bath
v Bath
[2014] ZASCA 14
;
“
It
is trite that in ascertaining the meaning of a contract a Court must
have regard first to its wording. It must also consider
the context
or factual matrix in which it was concluded. That is so even where
the words on the face of it are clear.”
[27]
The intentions of the parties and the objective of the contract in my
opinion, from clause 4, were very clear that, in the
event of a
divorce, the plaintiff would be protected and will not be left
without anything. The parties’ intentions should
therefore be
given effect to. When interpreting the clause in an antenuptial
contract the following was said in
RP
v PP
2016 (4) SA 226
(KZP)
at
page 244, paragraph 30; “
Clause
6 must therefore be construed within the context of the antenuptial
contract as a whole, the prevailing law relating to the
proprietary
consequences of the marriage when the marriage took place,the
intention of the parties in concluding the antenuptial
contract and
the purpose for which the provisions of clause 6 was included in the
contract
.”
[28]
I agree with Counsel for the defendant that indeed MJT Trust is not a
sham and that there is no evidence adduced to aver that.
In support
of this argument reference was made to
BC
v CC
(supra).
Even
though the Trust is not a sham the defendant transferred the property
into a trust well knowing the terms of ante clause 4
of ANC. It
cannot therefore be argued that when he did this it was to the
advantage of the plaintiff whom he knew had to benefit
in the event
of a divorce.
[29]
Another point to consider is that the property was in the defendant’s
names before the marriage and up until it was transferred
to a trust.
He is the one who came with the idea of a trust. He therefore had the
opportunity to consider all the implications
and consequences of a
property being transferred to a trust. The plaintiff, on the other
hand, even though she had the knowledge
of how trusts operate, the
terms, meaning and implications of MJT Trust in particular, were not
fully discussed with her at the
time the property was transferred.
[30]
Therefore the plaintiff would not have accepted the transfer of
property into a Trust not knowing what potential risks were
there in
the event of a divorce. I therefore accept that the plaintiff was
never involved in the transactions of MJT Trust, and
therefore could
not have known what consequences would be. The plaintiff’s
belief was that her interests were at all times
protected because of
the terms of clause 4.
[31]
It is evident that the plaintiff did not want to be left in the cold
in the event of a divorce. Consequently, she could not
have been
comfortable with a property being subject to a usufruct well knowing
this would affect the value and subsequently her
claim. It does not
make sense. I therefore, under these circumstances, accept her
version that she had no knowledge of the fact
that the property was
subject to a usufruct, as none existed at the time of the
signing of the marriage contract.
[32]
Counsel for the defendant argued that there was no need for the
defendant to testify or call witnesses. I disagree. The plaintiff
testified that she was never involved in the transfer of the property
to the trust. She denied that the defendant involved her
in the
transactions and also denied being aware of the existence of the
usufruct. It was therefore up to the defendant to testify
and rebut
these allegations and explain when it was that the plaintiff was made
aware of this and in what manner.
[33]
It was put to the plaintiff in cross examination that Ms. Swanepoel
would say that the plaintiff was present when exhibit “C”
was signed and that she would testify that it was the plaintiff who
signed this document. The plaintiff denied this, but still
Ms.
Swanepoel was not called to rebut her denial. I am in the
circumstances inclined to agree with Counsel for the applicant’s
argument that a negative inference should be drawn against the
defendant for failure to testify and to call the above-mentioned
witnesses.
[34]
I am therefore not persuaded by the Counsel for the defendant’s
submission that the plaintiff was involved in the transaction
in
relation to the transfer of the property to the Trust. I am also not
persuaded that it is her signature that appears on exhibit
“C”.
[35]
Another argument on behalf of the defendant was that he is still in
love with the plaintiff. It was further argued for the
defendant that
plaintiff had full knowledge of the Trust and that it was impossible
that, being a beneficiary, she would not be
aware of the trust.
[36]
As Counsel for the plaintiff correctly submitted, the Trust does not
name the applicant in her personal capacity as a beneficiary,
but
rather makes whoever that will be the respondent’s legal spouse
a beneficiary.
Taking
all these into account, even though the plaintiff as a spouse was a
beneficiary, I find it hard to believe that, she was
involved in the
formation of the trust and I further find it hard to believe that she
was aware that she was a beneficiary. As
indicated above it is the
defendant, and not the plaintiff who is one of the trustees, and the
defendant solely benefits from the
alleged usufruct. In my opinion,
therefore, when the defendant transferred the property into the trust
name, he did not do this
in good faith and with the plaintiff’s
interest at heart. So to claim the defendant is still in love with
the plaintiff and
that the plaintiff as the beneficiary would know of
the terms of the Trust does not hold water.
[37]
The last aspect to look at is the value of the property. Argument by
Counsel for the defendant is that the plaintiff failed
to prove prima
facie the value of the property. Evidence was adduced for the
plaintiff as to the value of the property. The
defendant queried the
method of valuation which was used by the valuator, Mr. Coetzee and
disputed the amount of R1 950 000 00
as the correct value. The
argument was that there are other methods he could have used. It
is correct as argued by the defendant’s
Counsel that Mr.
Coetzee knew very well what arms- length method is which it was
argued is the method he could have used. Counsel
for the plaintiff
further conceded that Mr. Coetzee’s testimony during cross
examination in this regard was not impressive.
I agree. However, as
far as the valuation that was conducted by Mr. Coetzee is concerned,
in my opinion his evidence could not
be faulted. The defendant failed
to call a witness to testify regarding any other method that could
have rebutted Mr. Coetzee’s.
This could have allowed Counsel
for the plaintiff to challenge or accept such method and the
different value.
[38]
A further argument is that because of the usufruct in the property
the value according to Mr. Coetzee’s finding can be
affected.
The argument might be legitimate, as Mr. Coetzee also conceded
that if there was a usufruct, it could have affected
the value and it
could have been different.
[39]
As submitted by Counsel for the plaintiff, the indication was that
Mr. Konig would be called to testify in relation to the
value of the
property and to dispute Mr. Coetzee’s finding, but he was not
called. It is correct, as argued by the
Counsel for the
defendant ,that information pertaining to this is in the
papers, however, in my opinion, just as Counsel
for the defendant had
had the opportunity to challenge the plaintiff’s version,
equally Counsel for the plaintiff could have
challenged the
defendant’s version. Counsel for the plaintiff was correct in
saying that the court should draw an adverse
inference and conclude
that had Mr. Konig being called, he perhaps, could have testified in
a manner that could not be of benefit
to the defendant as far as the
value of the property was concerned. One should further bear in mind
that it is because of the defendant’s
conduct that Mr. Coetzee
could not access the property to inspect it inside or its title deed.
Mr. Coetzee therefore did not know
and could not have known if there
was a usufruct in the property if the defendant did not tell him.
This, further substantiate
the finding that, the plaintiff had no
knowledge that there was a usufruct in the property, because, if she
knew, she could have
informed Mr. Coetzee before the valuation.
[40]
I therefore agree that it could have been appropriate to call a
witness who would dispute the version of Mr. Coetzee and further
explain to the court what were the terms of the usufruct and what
value could then be attached to the property. The only evidence
therefore regarding the method of valuation and the value determined
thereafter is that of Mr. Coetzee. In the absence of any disputing
evidence I have no choice but to accept Mr. Coetzee’s version.
Be that as it may, I am also in agreement with the Counsel
for the
plaintiff that at the time the parties signed the ante-nuptial
contract, there was no usufruct. There was also no agreement
that the
property would be sold subject to a usufruct and there is therefore
no reason why the value of the property should be
determined subject
to a usufruct. Mr. Coetzee at the end testified that if there
is no usufruct he stood by the value of
R 1 950 000 00. The Counsel
for the plaintiff’s submission that the businesslike
interpretation should also be adopted in
interpreting clause 4, which
is that the property should be valued at market value also carries
more weight. See
Endumeni
supra
.
[41]
I am therefore satisfied that the plaintiff discharged its onus on
the balance of probabilities that clause 4 of the parties’
ante-nuptial contract is enforceable. I am further satisfied that the
amount of R 1 950 000,00 is the correct value of the
property as
determined by Mr. Coetzee. Consequently I am satisfied that the
plaintiff is entitled to her claim in the amount of
R975 000,00
being a half share of the value of the property. The award of costs
is in the discretion of the court unless otherwise
stated, and as a
general rule though with exceptions, the cost must follow the result.
[42]
I accordingly make the following order;
1.
Defendant
to pay the plaintiff the amount of R 975 000,00.
2.
Defendant
to pay costs of this action.
_________________
B.R.
LEFENYA, AJ
On
behalf of the plaintiff: Adv. M.C Louw
Instructed by:
Honey Attorneys
BLOEMFONTEIN
On
behalf of the defendant: Adv. S.J Reinders
Instructed by:
Symington & De Kok
BLOEMFONTEIN