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[2017] ZANCHC 26
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E.E.V.W v P.J.V.W and Others (627/2016) [2017] ZANCHC 26 (31 January 2017)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape D
i
vision,
Kimberley)
Saakno
/ Case number :
627/
2016
Datum
verhoor/ Date heard:
24
I
01/2017
Datum
gelewer/ Date delivered:
31
I
01/2017
In
the matter between:
E.
E. V.
W.
Applicant
and
P.
J. V.
W.
First Respondent
J.
V. W.
NO
Second
Respondent
I.
H. V. W.
NO
Third
Respondent
P.
J. V. W.
NO
Fourth
Respondent
J.
H. C.
NO
Fifth Respondent
THE
MASTER OF THE H
I
GH
COURT
Sixth Respondent
Coram:
Erasmus AJ
JUDGMENT
ERASMUS
AJ
[1]
The applicant is the plaintiff and the first respondent is the
defendant in a divorce action pending in this court. The parties
in
the divorce action were married out of community of property with
inclusion of the accrual system.
[2]
The applicant lodged an application to join the second to fifth
respondents, in their capacity as the trustees of the V. W.
Family
Trust ("the Trust"), as the second to fifth defendants in
the divorce action. No relief is sought against the
sixth respondent.
[3]
The application is based thereupon that the Trust, in terms of a
proposed amendment to the claim in the divorce action,
will have
particulars of a direct and substantial interest in the outcome of
the divorce action.
[4]
The applicant contended, and so it was alleged in the proposed
amendment, that the Trust is the alter ego of the first respondent,
with all the usual connotations such an allegation in divorce
proceedings enjoins. The applicant specifically seeks a
declaratory
order that the assets, which are purportedly
held in the name of the Trust, are
those of the first respondent and that it forms part of his estate,
subject to the accrual.
[5]
Although the particulars of claim has not been amended to incorporate
the allegations pertaining to the Trust, Adv Grobler,
on behalf of
the applicant and Adv Stanton, on behalf of the Trust, were in
agreement and requested that the joinder application
be adjudicated
as if the amendments had been effected. I shall in this judgment
refer to the amended particulars of claim.
[6]The
issue before me is then whether the Trust has a direct and
substantial interest in the relief sought in the amended particulars
of claim in the divorce action.
[7]
The Trust, and not the first respondent, opposed the joinder
application. The second respondent deposed to the answering affidavit
and the third, fourth and fifth respondents deposed to confirmatory
affidavits.
[8]
It
is
trite
that
it
i
s
open
to a
party
to
join
any party
against
whom he or she believes a cause of action arises. The
test
is
whether
the
party
to
be
joined
has
a
direct
and
substantial
legal
interest
in
the
order
the
court
might
make.
The
interest
will
be
direct
or
substantial
if
such
order
cannot
be
sustained
or
brought
into
effect
without
prejudicing
the
interests
of
the
part
y
.
[1]
[9]
Mr Grobler's argument, in short, is that the Trust's opposition of
the joinder application is premature as the merits of the
applicant's
claim in the divorce action should not be considered at this stage of
the proceedings. He submitted that I am not required
to determine at
this stage of proceedings whether the applicant is correct in her
allegations.
[10]
Ms Stanton advanced several arguments pertaining to the applicants
prospects of success in proving the averments contained
in the
particulars, more specifically that the first respondent had
transferred his personal assets to the trust and/or whether
assets
held in the name of the Trust should be taken into account for
purposes of calculating the accrual of the first respondent's
estate
in terms of
section 3
and
4
of the
Matrimonial Property Act, No. 88
of 1984
.
[
1
1
]
Although
the
arguments
of
Ms
Stanton
are
not
without
merit, given the
facts
of
this
case
and
onerous
burden
the
applicant
will face during the
trial
,
[2]
the issue
of
joinder should not
to
be
conflated
with
the
issue
whether
the
party
seeking
joinder
has
a
good
case
against
the
party
sought
to
be
joined.
[3]
I
am
thus
not
required
to
assess
the merits of the applicant's claim in the divorce
action.
As
long
as
the
relief
may
be
claimed
against
such
a
party,
and
the
latter's
interest
may
be
prejudicially
affecte
d
,
joinder becomes
necessary.
[
1
2]
The approach to be
followed
when adjudicating this application
is
similar
to
the
approach
to
be
followed
when
adjudicating
an
exceptio
n
.
It
entails
that
the
Trust
has
to
satisfy
the
court
that
the
relief,
as
pleaded
in
the amended
particulars
of
claim,
is
bad
in
law
and/or
cannot
be
supported
by
any
reasonable
interpretation
of
the
amended
particulars
of
claim.
[4]
I
must therefore
accept
the
allegations of the plaintiff, as set out in
the
amended particulars
of
claim,
as
correct
and
determine
whether
these
are
capable
of
supporting
a
cause
of
action
in
respect
of
the
assets
of
the
Trust
or,
differently
stated,
whether
in
law it is legally competent
to
grant the
relief.
[5]
[13]
In short, the allegations in the amended particulars of claim are:
13.1
The first respondent is a trustee of the Trust and had full control
over the assets of the Trust at all relevant
times after the
establishment of the Trust;
13.2
The first respondent had bought the assets in the name of the Trust
for his exclusive use and the assets held in
the name of the Trust
are in fact those of the first respondent; and
13.3
The applicant is entitled to a declaratory order to the effect that
the assets purportedly held in the name of
the Trust are the assets
of the first respondent and form part of his estate.
[
1
4]
The
remedy
of
piercing
the
veneer
of
a
trust,
as
p
l
eaded
above,
i
s
well
known
and
constitutes
an
equitable
remedy that
lends
i
tself
to
a
flexible approach
to
fa
i
rly
and
justly
address
the
consequences
of
an
abuse
of
the
trust form when it is used in a dishonest or unconscionable
manner
to evade a dishonest or liability or an
obligation
.
[6]
[
1
5]
The
parties
are married out of
community
of property with the application
of
the
accrual
system. It
will
be
required
of
the
trial
court
to
determine
the
extent
of
the
first
respondent's
estate
for
purposes
of
the
applicant's
accrual
claim
and
further,
whether
the
assets
ostensi
b
ly
held
in
the
name
of
the
Trust
are
in
fact
owned
by
the
first
respondent.
It
is
open
to
the
applicant
to
aver
and
claim relief as set out above.
Such
relief would
be
legally competent,
if
the facts to
substantiate
the
averments
are
proven during
the
trial.
[7]
[16]
As stated earlier, I have to accept the applicant's allegations
contained in the amended particulars of claim, as correct.
Should the
applicant be successful in her claims in the divorce action, she will
have the right to execute against any of the first
respondent's
assets in satisfaction of her accrual award, which could include
assets ostensibly held in the name of the Trust,
which
the court finds to be beneficially owned by the first respondent.
[
1
7]
Although
the
right
to
share
in
the
accrual
only
arises
at
the dissolution
of
the
marriage,
[8]
Mr
Grabler
and
Ms
Stanton
were
in
agreement
that, in
this
instance, the
adjudication
of
the
accrual
cannot
be
conveniently
separated
[9]
from
the
divorce
and
the
applicant
'
s
claim for maintenance.
I
am in agreement
with
counsel.
[18]
There are issues common to both disputes and there is a reasonable
prospect of an overlap of factual issues, should there be
different
trials. Separation in this instance would lead to a duplication
of evidence and will not materially shorten the
proceedings. The
possible inconvenience the Trust might suffer in being a party during
the adjudication of the divorce and maintenance
claims can be
adequately addressed with a suitable cost order, should the applicant
not succeed in proving the claim which affects
the Trust.
[19]
I am satisfied that the Trust has a direct and substantial interest
in the outcome of the divorce action and that the applicant
has made
out a case for the joinder of the Trust in the divorce action under
case no. 627/2016.
[20]
Ms Stanton submitted that, in the event of the application being
granted, the costs of this application should be reserved
for
adjudication during the trial as the merits of the allegations
pertaining to the Trust would only then have been fully canvassed.
Although Mr Grabler, in the heads of argument, submitted that the
Trust's opposition of the application was frivolous and that
the
Trust should be ordered to pay the costs of these proceedings, he
correctly conceded during argument that the costs should
be reserved
to be adjudicated during the divorce action. I agree that the costs
should be reserved.
Wherefore
I make the following order:
1.
THE SECOND, THIRD, FOURTH, FIFTH AND SIXTH RESPONDENTS BE JOINED AS
THE SECOND, THIRD, FOURTH, FIFTH AND SIXTH DEFENDANTS IN
THE DIVORCE
ACTION UNDER CASE NUMBER 627/ 2016, PROVIDED THAT APPL CANT COMPL ES
WITH THE PROVIS ONS OF RULE 28(1) OF THE UNIFORM
RULES OF COURT
WITHIN 15 DAYS OF DATE OF TH S ORDER.
2.
ALL PLEAD NGS FILED OF RECORD SHALL BE SERVED UPON THE PARTIES JOINED
IN TERMS OF PRAYER 1 WITHIN 15 DAYS OF DATE OF TH S ORDER.
3.
THE COSTS OF TH S APPLICATION ARE RESERVED FOR ADJUDICATION DURING
THE DIVORCE ACTION.
___________________
SL
ERASMUS
ACTING
JUDGE
On
behalf of the Applicant:
Adv. S . Grobler (oio Engelsman, Magabane)
On
behalf of the Respondents:
Adv. A. Staton (oio Haarhoffs Inc.)
[1]
SA
Steel Equipment (Pty)
Ltd
and Others v LURELK {Pty) Ltd
1
951
(4) SA
1
67
(T)
[2]
See
Mills
v
Mills
(332/20
1
5)
[20
1
6)
ZASCA 5
(9 March 20
1
7)
[3]
Gordon
v Department
o
f
Health, Kwazulu Natal
2008(6)
SA 522 (SCA);
YB
v SB
supra
paras [
1
8]
and [35]
[4]
Barnard
v Barnard
2000
(3) SA 741
(C)
para [10);
YB
v SB and Others NNO
2016(
1
)
SA (WCC) para [
1
2];[26];
(56)-(60)
[5]
Stewart
and
Another
v
Botha
and
Another
2008(6)
SA 3
1
0
(SCA)
para [4];
YB
v
SB
and Others
NNO
20
1
6(1)
SA (WCC)
para
[60]
[6]
Van
Zyl
&
Another
NNO
v Kaye NO
&
Others
2014(4)
SA 452 (WCC) para [2
1
]-[22]
[7]
WT
&
Others
v KT
&
Others
2015
(3) SA 574 (SCA)
[8]
Brookstein
v
Brookstein
(20808/24)
[20
1
6)
ZASCA 40
(24 March 20
1
6)
para [
1
6]
;
Le
Roux v Le Roux
[2010]
JOL
26003
(N CK)
[9]
Rule 33(4)