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[2018] ZAKZPHC 13
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L.A v E.A and Another (11046/2014) [2018] ZAKZPHC 13 (9 May 2018)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO: 11046/2014
In
the matter between:
L
A
Applicant
and
E
A
First
Respondent
FRANCES
LEPPAN
Second
Respondent
JUDGMENT
09 May 2018
MBATHA
J
[1]
On 18 April 2018 I made the following order:
‘
(a) The Second
Respondent be and is hereby directed to pay the Applicant, out of
funds forming part of the joint estate between
the Applicant and the
First Respondent, the sum of one million rands (R1 000 000.00).
(b) The Second Respondent
shall, upon payment of the said amount one million rands to the
Applicant, debit the Applicant’s
account for the sum of one
million rands when preparing her final liquidation and distribution
account of the set joint estate.
(c) The First Respondent
and the Second Respondent,
de
bonis propriis
,
are to pay the costs of this application jointly and severally.’
[2]
The Applicant and the First Respondent’s marriage was dissolved
by this court on 14 April 2015. And orders for division
of the joint
estate and the appointment of a liquidator were made. The powers and
functions of the liquidator formed part of the
order. The liquidator
appointed by the court, Mr Pierre de Villiers Berrangé, was as
of 22 May 2015 replaced by Ms Frances
Leppan, the Second Respondent
herein.
[3]
It is common cause that the liquidator was appointed due to the
magnitude and complexity of the joint estate.
[4]
The nub of the Applicant’s case concerns the failure of the
Second Respondent to advance to her funds to obtain expert
evaluations of the assets of the joint estate. She challenges the
correctness of the valuations in respect of various business
interests and assets as provided by the Respondents. The Applicant
has given a history as to how she has tried to engage with the
Second
Respondent regarding her concerns, which I do not intend to repeat
here. However, it is important to note that when the
Applicant did
not get satisfaction from the Second Respondent, she indicated to her
that she wished to approach the court for the
release of a certain
amount of funds to get her own expert valuations.
[5]
In consideration of this application I have confined myself to the
period from when the Applicant intimated to the Second Respondent
that she wished to approach the court for the release of the funds. A
letter dated 14 July 2017 was addressed by the Applicant’s
attorneys of record, Nan Naidoo, to the Second Respondent informing
her of their intention to bring an application for the release
of
funds to the Applicant. This letter elicited a favourable response
from the Second Respondent as she replied as follows:
‘
The writer, in her capacity as
receiver of the joint estate, is sympathetic to your client’s
plight. In this regard we
place
on record that we have no issue with releasing funds to your client
without need for a court order
.
We simply need you to place yourselves on record formally and furnish
us with your trust account details to enable us to comply
with the
rules of court.’
(My
emphasis.)
However,
on 3 August 2017 she reneged on her undertaking on the basis of an
objection raised by the First Respondent, at the same
time assured
the applicant as follows:
‘
The writer will seek
the advice of senior counsel this morning and will, if need be,
approach the court for direction as contemplated
in the court order.’
(My emphasis.)
This
was subsequently followed by the Second Respondent’s letter
dated 7 August 2017 which stated that she consulted with
counsel and
a judge in chambers, whereby they were advised that it would be
negligent on their part to pay out any funds until
such time as the
value of the matrimonial estate has been set. She then re-iterated
that a set of papers will be served upon the
Applicant’s
attorneys, giving them 20 days’ notice to file alternative
valuations to challenge the current valuations.
In
response to this letter the Applicant’s attorneys raised their
concerns in their letter dated 24 August 2017, to the Second
Respondent consulting with a judge in chambers, in their absence,
which conduct they considered to be irregular. They also placed
it on
record that she was not in a position to get valuations without
funds.
[6]
The Second Respondent’s response in her answering affidavit is
that she deemed it a frivolous and luxurious exercise to
engage the
services of any further valuators / appraisers / accountants. The
valuations she had obtained were from professional
persons or
qualified experts. She denied having relied only on the
information obtained from the First Respondent and asserted
that she
had engaged with the Applicant as well. She had also relied on the
entire contents of the files obtained from the Applicant’s
erstwhile divorce attorneys.
[7]
It is my view that the Applicant has raised genuine concerns
regarding the estate and she must be afforded an opportunity to
obtain such expert assistance. I will only mention one issue which
has persuaded this court, that she needs assistance, in this
regard.
It relates to a sale of a unit in one of the property portfolios,
which has been sold for over R997 500, when its
valuation by the
Second Respondent’s experts amounted only to R450 000. The
other concern raised is that the First Respondent
collects all the
rental income from the various property portfolios. The Applicant
asserts that the appointment of the requested
experts will assist her
to get a fair and equitable distribution of the joint estate. It is
also common cause that in terms of
the divorce order the Applicant
was awarded an income of only R4 000 per month and cannot be
said to be in a position to pay
for valuations and other experts.
[8]
This court in an earlier decision in (
Samsudin
v De Villiers Berrange NO & others,
unreported
case 3995/2004, 19 August 2004), held that the assets of both spouses
vests in the trustees and that if the trustees
did not release funds
to the applicant to pursue her legal challenge, she would be
prejudiced. It is apposite to state that this
similarly applies to
the Applicant,
that
she be afforded an opportunity to adequately present her case before
the Second Respondent. The court in
Samsudin
recognised
‘that a claim for a contribution towards costs in a matrimonial
suit is
sui
generis
and
is founded essentially on the duty of support that spouses owe to
each other. It is also aimed at putting her in a position
where she
could adequately put her case before the court.’ The Second
Respondent has a legal duty to assist the Applicant
by providing her
with funds to get the valuations, which the Second Respondent demands
from her despite her indigent state.
[9]
The Second Respondent appears not to appreciate the nature of her
duties, in terms of the court order which amongst others include:
‘
Leave is granted to the
liquidator to approach the court (sic), should the need arise, for
directions as to how to deal with the
joint estate or any particular
issue which may arise with regard to such administration, as well as
for further or other powers.’
The
liquidator occupies a fiduciary position in some respects. He / she
must act impartially. There must be no preference, perceived
or not,
for or against an individual. Therefore the Second Respondent owed a
fiduciary duty to both the Applicant and the First
Respondent.
She
asserts as follows in her answering affidavit:
‘
As contemplated in the court
order I can, in my capacity as liquidator, approach the court.
I
immediately telephoned the High Court and ascertained that the senior
civil judge at that stage was Koen J. I requested an attendance
with
the relevant judge in chambers in order to seek direction, on an
urgent basis. Koen J indicated during my attendance that
it would be
negligent to release any funds prior to the finalization of the value
of the Joint Estate being set
.’
(My emphasis.)
I
have perused the file and the cover thereof, but there is no entry of
such a consultation with the judge in chambers. It is also
trite that
no judge can give advice under the circumstances as stated by the
Second Respondent
[10]
It is common knowledge that where a liquidator is uncertain as to the
course to follow or where the decision will be controversial
he or
she must approach the court. The Second Respondent’s
appointment was made to protect the ownership rights of the Applicant
and the First Respondent where they cannot agree on division of the
joint estate.
[11]
The approach which the Second Respondent made to the ‘court’
as she states, is not the approach meant in the exercise
of her
duties. ‘Court’ in the
Divorce Act 70 of 1979
is defined
as follows:
‘
Court’ means any High
Court as contemplated in section 166 of the Constitution of the
Republic of South Africa, 1996, or a
court for a regional division
contemplated in section 29 (1B) of the Magistrates’ Courts Act,
1944 (Act No. 32 of 1944),
which has jurisdiction with respect to a
divorce action;’
It
does not make reference to the way the Second Respondent approached
the judge.
[12]
I agree with the Applicant that such approach to a judge is irregular
conduct on the part of the Second Respondent. She approached
the
judge in chambers in her capacity as a liquidator to seek legal
advice, without the knowledge of the other party in a manner
where
the other party had indicated that it wishes to seek redress from a
court of law. She deprived the Applicant of her right
of access to
court in breach of s 34 of the Constitution,
[1]
which provides as
follows:
‘
Everyone has the right to have
any dispute that can be resolved by the application of law decided in
a fair public hearing before
a court or, where appropriate, another
independent and impartial tribunal or forum.’
It
is only a court of law that can give directions upon hearing of an
application before it. The Applicant was entitled to a fair
hearing.
In
Hlophe
v Constitutional Court of South Africa & others
,
[2]
Mojapelo DJP in para 20
stated as follows:
‘
The foundation of the right to
be heard is not only constitutional; it is also anchored, in the
common law principle of
audi
alteram partem
that
recognises as part of the rules of natural justice the right of every
person to be consulted or heard before a decision or
step is taken
that affects or may affect such person.’
[13]
The First Respondent’s opposition to the application was on the
basis that he would suffer severe prejudice if a sum
of R1 million is
paid to the Applicant. His opposition to the application is malicious
as he controls all the income that is generated
by the Close
Corporation and the personal property portfolio. The Applicant did
not even request that the interim payment be borne
by the joint
estate, but that it be deducted from her half share of the joint
estate. There will be no prejudice to an estate which
is
conservatively estimated to be worth over R22 million.
[14]
The late filing of the notice to abide by the Second Respondent as of
5 March 2018 will not absolve her of the payment of costs
in this
matter. First, she stopped the Applicant from bringing an application
to court to protect her rights, reneges on her undertaking
to assist
her and failed to approach the court for guidance and directions.
Secondly, when the Applicant brings this application
she opposes it
on grounds which are not sustainable in law. Later on she decides to
abide by the decision of the court. It is my
view that she could
easily have obtained legal opinion on the matter when the First
Respondent objected to the request made by
the applicant, but failed
to do so.
[15]
In general, a party who litigates in a representative capacity cannot
be ordered to pay costs
de
bonis propriis
,
unless if he / she had been guilty of improper conduct.
[3]
However, he / she may be
ordered to pay costs if there is a want of
bona
fides
on
his / her part or if he / she have acted with gross negligence.
[4]
It is my view that the
Respondents have without good cause failed to come to the assistance
of the Applicant.
___________________
MBATHA
J
Date
of hearing: 18 April 2018
Date:
09 May 2018
Appearances
For
the Applicant: G Reddy
Instructed
by NAN NAIDOO ATTORNEYS & CONVEYANCERS
7
Princess Alice Avenue
Glenwood
DURBAN
For
the First Respondent: Mr E A (In person)
[...]
PIETERMARITZBURG
For
the Second Respondent: FRANCES LEPPAN
c/o
LEPPAN ATTORNEYS
Second
Floor, Gresham House
11
Wembley Terrace
Wembley
PIETERMARITZBURG
[1]
The Constitution of the Republic of
South Africa, 1996.
[2]
[2009] 2 All SA 72
(W);
[2008] ZAGPHC
289
(08/22932) (25 September 2008).
[3]
Cooper NO v First National Bank of
SA Ltd
2001 (3) SA 705
(SCA).
[4]
Blou v Lampert and Chipkin, NNO, &
others
1973 (1) SA 1
(A).