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[2016] ZAECELLC 8
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R.L.M v B.G.M (EL139/14, ECD439/14) [2016] ZAECELLC 8; 2017 (2) SA 538 (ECG) (18 October 2016)
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IN
THE HIGH COURT OF SOUTH AFRICA
EAST
LONDON CIRCUIT LOCAL DIVISION
Case
no: EL139/14; ECD 439/14
Dates
heard: 27-28/7/16
Date
delivered: 18/10/16
Reportable
In
the matter between:
R.
L.
M.
Plaintiff
and
B.
G.
M.
Defendant
JUDGMENT
PLASKET,
J:
[1]
The plaintiff, Ms B. M., and the defendant, Mr B. M., were married on
12 December 1998. It is common cause on the pleadings
in the action
for divorce instituted by Ms M. that the marriage has broken down
irretrievably.
[2]
In her particulars of claim, Ms M. stated that the marriage was one
‘purportedly out of community of property and by Antenuptial
Contract, with the application of the accrual system in terms of the
Matrimonial Property Act of 1984’. She made this allegation
because she seeks an order, inter alia, declaring the ante-nuptial
contract (ANC) to be void and her marriage to be one in community
of
property. In the alternative, she seeks the rectification of the ANC.
In his counterclaim, Mr M. seeks an order rectifying the
ANC too,
albeit in a different way, and, in the alternative, an order to the
effect that the ANC ‘be interpreted in accordance
with
Section
4(1)(b)(ii)
of the
Matrimonial Property Act of 1984
to reflect that
all the business interests of the Defendant, as recorded in paragraph
4.1 of the Ante-Nuptial Contract, are excluded
from the commencement
value of the Defendant’s estate’.
[3]
While virtually every issue apart from the irretrievable breakdown of
the marriage is in dispute, I was requested to order the
separation
of the issues that I have outlined in paragraph 2 above. I agreed to
do so because, it seemed to me, they form a discrete
bundle of issues
and their resolution is probably both essential for and a
pre-condition for the resolution of the remaining issues.
[4]
Before turning to the separated issues, it is necessary to sketch the
legislative framework within which the issues must be
decided.
[5]
Section 2
of the
Matrimonial Property Act provides
:
‘
Every
marriage out of community of property in terms of an antenuptial
contract by which community of property and community of
profit and
loss are excluded, which is entered into after the commencement of
this Act, is subject to the accrual system specified
in this Chapter,
except in so far as that system is expressly excluded by the
antenuptial contract.’
[6]
Section 3
outlines how the accrual system functions. It provides:
‘
(1)
At the dissolution of a marriage subject to the accrual system, by
divorce or by the death of one or both of the spouses, the
spouse
whose estate shows no accrual or a smaller accrual than the estate of
the other spouse, or his estate if he is deceased,
acquires a claim
against the other spouse or his estate for an amount equal to half of
the difference between the accrual of the
respective estates of the
spouses.
(2)
Subject to the provisions of
section 8
(1), a claim in terms of
subsection (1) arises at the dissolution of the marriage and the
right of a spouse to share in terms of
this Act in the accrual of the
estate of the other spouse is during the subsistence of the marriage
not transferable or liable
to attachment, and does not form part of
the insolvent estate of a spouse.’
[7]
Section 4
deals with the accrual of a party’s estate. It
states:
‘
(1)
(a) The accrual of the estate of a spouse is the amount by which the
net value of his estate at the dissolution of his marriage
exceeds
the net value of his estate at the commencement of that marriage.
(b)
In the determination of the accrual of the estate of a spouse-
(i)
any amount which accrued to that estate by way of damages, other than
damages for
patrimonial loss, is left out of account;
(ii)
an asset which has been excluded from the accrual system in terms of
the antenuptial
contract of the spouses, as well as any other asset
which he acquired by virtue of his possession or former possession of
the first-mentioned
asset, is not taken into account as part of that
estate at the commencement or the dissolution of his marriage;
(iii)
the net value of that estate at the commencement of his marriage is
calculated with due
allowance for any difference which may exist in
the value of money at the commencement and dissolution of his
marriage, and for
that purpose the weighted average of the consumer
price index as published from time to time in the Gazette serves as
prima facie
proof of any change in the value of money.
(2)
The accrual of the estate of a deceased spouse is determined before
effect is given to any testamentary disposition, donation
mortis
causa or succession out of that estate in terms of the law of
intestate succession.’
The
ANC and its validity
[8]
The relevant provisions of the ANC reads as follows:
‘
And
the Appearers declared that whereas a marriage has been agreed upon
and is intended to be solemnised between them, they have
agreed and
now contract with each other as follows:-
1.
That
there shall be no community of property between them.
2.
That
there shall be no community of profit and loss between them.
3.
That
the marriage shall be subject to the accrual system in terms of the
provisions of Chapter 1 of the Matrimonial Property Act,
1984 (Act
No. 88 of 1984).
4.
That
for the purpose of proof of the net value of their respective estates
at the commencement of the intended marriage the intended
spouses
declared the net value of their respective estates to be as follows:-
4.1
That
of B. G. M. is R810 105.00 consisting of:-
4.1.1
Farm […] M.
R.
480 000.00
4.1.2
Elliot Brothers Loan
Account
100 000.00
4.1.3
Elliot Brothers
Shares
100.00
4.1.4
Tomlinson & Wootton Loan
Account
30 000.00
4.1.5.
Tomlinson & Wootton Shares
5.00
4.1.6
Livestock and
Implements
160 000.00
4.1.7.Motor
Vehicle
40 000.00
810 105.00
4.2
that
of the said R. L. J. is R20 000.00 in respect of cash on hand.
5.
That
the assets of the parties or either of them, which are listed
hereunder, or any other asset acquired by such party by virtue
of
his/her possession or former possession of such assets, shall not be
taken into account as part of such party’s estate
at either the
commencement or the dissolution of the marriage.
The
assets of B. G. M. so to be excluded are:-
(a)
All
business interests presently owned or to be acquired in the future.
The
assets of R. L. J. so to be excluded are NIL.’
[9]
ANCs in this form have been dealt with by the courts before. In
JCK
v RK
,
[1]
Louw J held that where two clauses – clauses 4 and 5 in that
case as well – contradicted each other materially and
irreconcilably, the ANC was void for vagueness.
[2]
The result was that the marriage of the parties was one in community
of property.
[3]
[10]
Louw J had arrived at the same conclusion in
Bath
v Bath
,
[4]
again on similar facts and in respect of an ANC structured in the
same way as the one in this case. In arriving at the conclusion
that
the ANC was void for vagueness, he held:
[5]
‘
Clauses
4 and 5 are clearly contradictory. Clause 4 clearly intends that the
assets of the parties which are listed will be subject
to the accrual
system. Clause 5, on the other hand, clearly states that those same
assets will not be taken into account as part
of such party’s
estate, i.e. will not form part of the accrual of such party’s
estate. The assets cannot at the same
time be included in and
excluded from the accrual of each party’s separate estate. The
clauses cannot both be given effect
to. They are irreconcilable.’
[11]
His judgment was upheld on appeal to the Supreme Court of Appeal. In
Bath
v Bath
.
[6]
Lewis JA, having identified the problem with the ANC as being the
conflict between clauses 4 and 5, held that the ‘wording
makes
no sense on the face of it’ with clause 4 listing assets of
each party for purposes of commencement values while clause
5
excludes those same assets from the accrual.
[7]
She proceeded to hold:
‘
[19]
It is clear to me that the parties did intend to exclude community of
property and profit and loss
and to adopt the system of accrual: but
it is far from clear
how
they intended to do that. If the contract had included only the first
three clauses they would effectively have achieved a contract
out of
community of property, subject to the accrual system regulated by the
Act. But the clauses that followed are so contradictory
and
incoherent that in my view they vitiate the contract as a whole. No
certainty has been achieved as to what the contract meant
–
what the parties intended to achieve. The contract does not embody
terms that enable this court to give effect to what
their intention
might have been.
[20]
And it is trite that a court cannot make a contract for the parties.
This court cannot determine
whether the parties intended to exclude
certain assets from the accrual, or stated values of assets from the
value of the accrued
estate. Nor can it ascertain what was meant by
clause 5 where it stated that particular assets (without any
certainty as to what
they were) would not be taken into account at
the beginning or the dissolution of the marriage. And since they did
not have a common
continuing intention as to what they wished to do,
rectification (one of the alternative claims by Mrs Bath) is also not
possible.
[21]
Accordingly the high court correctly concluded that the antenuptial
contract between the parties
was void for vagueness and the appeal
must be dismissed with costs.’
[12]
There is no material difference between the ANC in the
JCK
case and this matter. In both, clause 4 specified certain property of
the parties and ascribed a value to each item and clause
5 excluded
from the accrual the husband’s property or part of it so listed
and recorded the wife’s property to be excluded
as ‘nil’.
In
Bath
,
the only difference from this case is that no values were ascribed to
the assets listed in clause 4, but the assets referred to
in clause
4, of both husband and wife, were all excluded in clause 5.
[13]
I do not consider that there is any basis for distinguishing this
case from either
JCK
(which I consider to be correctly decided) and
Bath
(by which I am bound). For the reasons set out in those matters, I
arrive at the conclusion that, clauses 4 and 5 of the ANC in
this
matter are contradictory, and irreconcilably so, and, being material,
are incapable of severance from the rest of the ANC.
The result is
that the ANC is void on account of its vagueness. As it was void at
its inception, that means that the parties were
in fact married in
community of property.
[8]
[14]
The interpretation of the ANC contended for by Mr M., as an
alternative to rectification, is simply that the assets listed
in
clause 4.1 were not to be taken into account in the calculation of
the accrual. This is no solution to the problem created by
the
conflict between clauses 4 and 5: it is predicated on wishing clause
4 away and ignoring it. Inconvenient provisions of contracts
cannot
be ignored: the whole document must be interpreted and given meaning
and if that cannot be done, the contract will, subject
to the
possibility of severance, be void. Put differently, the proposed
interpretation does not address the problem identified
in
JCK
and
Bath
,
namely the implacable conflict between clauses 4 and 5 which give
rise to the voidness of the ANC.
The
claims for rectification
[15]
As Ms M.’s claim for rectification was pleaded in the
alternative to her claim for a declarator that the ANC was void,
there is no need to deal with it.
[16]
Mr M.’s claim for rectification is now in its fourth edition,
having been amended from time to time. It now reads:
’
11.1
In all the premises the Defendant pleads that the Ante-Nuptial
Contract falls to be rectified as follows: by the deletion of
paragraph 4.1 in its entirety and the substitution therefor of the
words “
that
of the said Bruce Gordon M. is nil
”.
11.2
The Defendant pleads that the Ante-Nuptial Contract falls to be
further rectified by the insertion of the following list of
excluded
assets, after the words “
presently owned
” where
they appear in paragraph 5(a) of the Ante-Nuptial Contract (and
before the words “
or to be acquired in the future
”):
“
Namely:
5(a)(i)
Farm […] M. R.
5(a)(ii)
Elliot Brothers loan account
5(a)(iii)
Elliot Brothers shares
5(a)(iv)
Tomlinson & Wootton loan account
5(a)(v)
Tomlinson & Wooton shares
5(a)(vi)
livestock and implements
5(a)(vii)
motor vehicle
”
.’
[17]
A party seeking the rectification of a contract bears the onus of
proving that the document that records the terms of the contract
concerned does not reflect the common intention of the parties as a
result of an error in its drafting – and, obviously,
what the
common intention was.
[9]
While the doctrine of rectification ‘generally presupposes . .
. the existence of a term of the real agreement, antecedent
to the
written contract, which has not been properly recorded’
[10]
an antecedent agreement is not an essential element of a claim for
rectification: it may be the ‘best proof of the common
intention which the parties intended to express in their written
contract, and in many cases would be the only proof available,
but
there is no reason in principle why that common intention should not
be proved in some other manner, provided such proof is
clear and
convincing’.
[11]
[18]
There were, probably not surprisingly, given the passage of time,
differences in recollection on the part of the three witnesses
who
testified, namely Ms M., Mr M. and the attorney concerned, Mr Nico
Schultz. By and large, in my view, these differences do
not raise
credibility issues of any importance.
[19]
Ms M. recalls only one meeting with the attorney responsible for the
drafting of the ANC – and she cannot recall his
name. According
to her, Mr M. had told her, shortly before their marriage, to be
ready to consult with an attorney to sign documents.
When they met
the attorney, the ANC was already drafted. The attorney gave them
each a copy and went over the document, along with
a basic
explanation of the accrual system. He asked them to sign the ANC. She
did so without having read it.
[20]
Mr M. testified that he had been dealing with the attorneys firm
Bate, Chubb and Dickson in connection with a business transaction.
He
had mentioned that he intended getting married soon and was placed in
contact with Mr Schutz, an attorney in the firm. Mr Schultz
told him
to draft a list of his and Ms M.’s assets and their values,
pending a consultation with him.
[21]
Mr M. drafted his list of assets and their values one evening at
home. (These appear in clause 4.1 of the ANC.) When he showed
the
list to Ms M., she asked what she could list as she owned nothing. He
suggested that a value of R20 000 be ascribed to
her estate.
(That figure appears in clause 4.2 of the ANC.)
[22]
The parties later consulted with Mr Schultz. In the consultation, he
explained to them the various matrimonial property regimes
that were
available to them. All that appears to have been agreed was that they
would be married in terms of the accrual system
with an ANC.
[23]
They later met with Mr Schultz again. The ANC had been drafted and he
went through it with them. It was, Mr M. testified, in
accordance
with his wishes. He and Ms M. signed the document in front of Mr
Chris Kay, a notary who was an attorney at Bate, Chubb
and Dickson.
[24]
Mr Schultz testified about his usual way of dealing with instructions
from couples who were about to get married. He would
request them to
bring full details of their assets to a consultation. When he
consulted with them, he explained the matrimonial
property options
available to them. He would then obtain a firm instruction as to what
they wanted and would proceed to comply
with their instructions. If
an ANC was to be drafted, that would be done by his secretary who
would arrange a consultation with
the couple and one of the notaries
in the firm for purposes of signing the ANC. If he was available, he
would give the couple a
copy of the ANC to read and he would go over
it for them, answer any questions and escort them to the notary for
signing. While
he had no recollection of this particular case, his
way of doing things had become consistent and he had no reason to
believe he
would have deviated from his usual practice.
[25]
I am of the view that the probabilities favour the version of Mr M.
that, having been introduced to Mr Schultz, he and Ms M.
later
consulted with him, the ANC was drafted, in more or less standard
form on the basis of fairly minimal instructions, and they
returned
to sign the document at a later stage. It is improbable that only one
consultation would have occurred and that the ANC
was signed at that
first and only consultation. That version is also at odds with Mr
Schultz’s evidence, which strikes me
as probable and a rational
way of doing things, that as a matter of course he consulted with
both parties to a proposed marriage
prior to drafting the ANC and
arranging for them to sign it.
[26]
It is clear from the evidence of both parties that prior to the
signing of the ANC there had been no agreement as to its content:
apart from an acceptance that they were to marry in terms of the
accrual system, no further terms were agreed upon. The first time
they were confronted with clauses 4 and 5 was when the ANC was
presented to them for signing.
[27]
Ms M.’s understanding of what was involved was, as she put it,
whatever they ‘built together’ while married
was ‘one
cake’ that would be shared on the dissolution of the marriage.
(This seems to accord with the way in which
Mr Schultz explained the
workings of the accrual system to the parties.)
[28]
Mr M., on the other hand, had consulted, albeit briefly, with Mr
Schultz on his own when they first met. He had told Mr Schultz
that
he wanted to exclude assets from the accrual. He had not, however,
discussed a matrimonial property regime with Ms M.. The
first time
that she was party to a discussion of this nature was when the
parties consulted with Mr Schultz and he advised them
of their
options. After that consultation all that was agreed was that they
would be married by ANC with the accrual system.
[29]
To the extent that Mr M. attempted to establish that he and Ms M. had
agreed about excluding his current business assets, his
evidence is
unconvincing and improbable. He never gave evidence of this in chief
and only sought to introduce it in cross-examination.
It was clearly
an afterthought that he hoped would strengthen his position. More
importantly, however, he had to concede that at
the time this was
supposed to have occurred – before their consultation with Mr
Schultz – Ms M. did not have knowledge
of, and could not have
understood the workings of, the accrual system. She could not
properly have agreed to anything at that stage.
Later in his
cross-examination he conceded that no agreement had been reached.
When he had shown Ms M. his list of assets and their
values, she
never agreed to anything: she ‘never said yes or no’.
[30]
Mr M.’s intention, it would appear, was to exclude his current
business interests from the accrual. There was, however,
no
discussion in either of the consultations with Mr Schultz of the
exclusion of his future business interests. The first time
he became
aware of this was when he read clause 5 of the ANC shortly before
signing it. This had never even been discussed by the
parties and so
no common intention could have been formed in relation to it. When Mr
M. saw that clause 5 purported to exclude
both current and future
business interests, he was happy to sign the ANC.
[31]
The position may be summarised thus. No agreement was reached or
could have been reached between the parties at the time Mr
M. drafted
the list of his assets and their values. No agreement was reached at
the first consultation about the exclusion of assets.
Similarly, no
agreement was reached at any time prior to the signing of the ANC. At
best for Mr M., the common intention of the
parties was no more than
that they would marry by ANC with the accrual system.
[32]
That falls well short of the common intention that was pleaded,
namely ‘that all business interests then owned by the
Defendant, and to be acquired by the Defendant in the future, should
be excluded from the Defendant’s estate, both in respect
of the
commencement value and at the dissolution of the marriage’.
That being so, Mr M. has failed to discharge the onus
that rested on
him to prove his claim for rectification.
[33]
As a result of my finding that the claim for rectification has not
been established, it is not necessary for me to consider
and decide
upon two arguments raised by Mr De La Harpe. They are: first, that as
the invalidity of the ANC had the result that
the parties were
married in community of property, rectification is not competent in
this case as it would have the effect of altering
their matrimonial
property regime, a result that can only be achieved by way of the
specialised process provided for in s 21 of
the Act; and secondly,
that rectification is not possible because of the possible
prejudicial effect it could have on third parties.
Interesting as
these issues are, they will have to wait for another day.
The
order
[34]
I make the following order in respect of the separated issues that
are dealt with in this judgment.
(a)
The ante-nuptial contract signed by the plaintiff and the defendant
and dated 12 December 1998 is declared to be void and, in
consequence, the parties were married in community of property.
(b)
The defendant’s counter-claim for the rectification of the
ante-nuptial contract is dismissed.
(c)
The defendant is directed to pay the plaintiff’s costs in
respect of the determination of the separated issues.
______________________
C
Plasket
Judge
of the High Court
APPEARANCES
For
the plaintiff: D De La Harpe instructed by Bax Kaplan Inc
For
the defendant: S Cole instructed by Cooper, Conroy, Bell &
Richards Inc
[1]
RCK
v RK
[2014] ZAGPHC 242.
[2]
Para
10.
[3]
Para
13.
[4]
Bath
v Bath
GPHC 5 November 2012 (case no. 8681/10) unreported.
[5]
At
6.
[6]
Bath
v Bath
[2014] ZASCA 14
(24 March 2014).
[7]
Para
6.
[8]
Van
Heerden, Cockrell and Keightley
Boberg’s
Law of Persons and the Family
(2 ed) at 182-183; Du Bois (ed)
Wille’s
Principles of South African Law
(9 ed) at 265;
Ex
Parte Minister of Native Affairs; In Re Molefe v Molefe
1946 AD 315
at 318;
JCK
v RK
(note 1), para 13.
[9]
Wadsworth
v Wadsworth
ELCLD 21 August 2012 (case no. EL 376/2008; ECD 776/2008)
unreported, paras 7-9 and the cases cited therein. See too
Spiller
& others v Lawrence
1976 (1) SA 307 (N).
[10]
Kathmer
Investments (Pty) v Woolworths (Pty) Ltd
1970 (2) SA 498
(A) at 503B-C.
[11]
Meyer
v Merchants’ Trust Ltd
1942 AD 244
at 253. See too
Weinerlein
v Goch Buildings Ltd
1925
AD 282
at 288;
Edelson
v Glenfields Estates (Pty) Ltd
1955 (2) SA 527
(E) at 530A-B.