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[2015] ZAFSHC 56
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M v M (A231/2014) [2015] ZAFSHC 56; [2015] 2 All SA 495 (FB) (12 March 2015)
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FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Appeal
No. : A231/2014
In
the appeal between:-
M[…]
B[…] M[…]
…...............................................................................................
Appellant
and
K[…]
G[…] M[…]
…...........................................................................................
Respondent
HEARD
ON:
09 March 2015
CORAM:
JORDAAN, J et S.J REINDERS, AJ
JUDGMENT
BY:
JORDAAN, J
DELIVERED
ON:
12 March 2015
[1]
The Appellant was the Defendant in divorce proceedings held in the
Regional Court Free State Division in Welkom. Although the
papers in
that matter are not part of the record in this matter, it appears
that the Appellant as Defendant filed a notice of intention
to defend
after which certain written settlement negotiations were entered into
between the attorneys for the parties. Although
it appears that the
parties were more or less ad idem regarding the settlement proposals,
the attorneys never drafted a settlement
agreement and none was ever
signed. On the contrary, at a certain stage the Plaintiff (Respondent
in this matter) through her attorneys
filed a notice of bar on the
Appellant’s attorneys who withdrew with the end result that the
divorce was heard and a decree
of divorce and ancillary relief
granted in the absence of the Appellant.
[2]
It appears as if the Respondent (Plaintiff in the divorce
proceedings) prayed for division of the joint estate of the parties
with the exception of the house and car. In accordance with that
prayer the court order granted in par d thereof reads as follows:
“
That
the joint estate of the parties be divided with the exception of
house and the car (sic).”
[3]
Although the said order does not specify what is to happen with the
house and car, it appears from the correspondence and evidence
before
this court that the intension was that Appellant forfeits his
interest in those assets and it is awarded to the Respondent
as
Plaintiff. Nothing turns on this.
[4]
The Applicant thereafter brought an application for rescission of par
d of the aforesaid order without any specific prayer as
to what the
order should entail. It appears that the bone of contention mostly
laid in the Appellant’s claim to be entitled
to 50% of the
Respondent’s pension interest as at the time of divorce.
The application for rescission by the Appellant
was opposed by the
Respondent and at some stage the learned Regional Magistrate in
collaboration with the parties ruled that certain
questions should be
decided and would be decisive of the application. Those questions,
which are of relevance of present matter,
are the following:
a.
Whether there was a binding settlement agreement entered into between
the parties before the date of divorce order being granted
which
should have been made an order of court.
b.
Whether a pension interest of a party forms part of the joint estate
of the parties.
c.
Whether it is necessary that a claim in regard to such pension
interest be specifically pleaded.
[5]
After hearing argument the court a quo found in regard to the first
question that no valid and binding settlement agreement
came into
being and as far as the second question is concerned that a pension
interest indeed forms part of the estate to be divided
and as regard
to both the second and third questions above the court found:
“
The
only problem is how the court order is worded. If it is not in
accordance with the Pension’s Fund Act 24/1956 read with
the
divorce Act, it cannot be enforced against the fund.
The
order must therefore clearly state the name of the pension fund, the
number of the fund, the percentage or amount, the period
in which
another party is entitled to benefit and the order that endorsement
is made as it is required by section 7(8).
Where
the order does not specify the above mentioned as required by the
Pension Fund Act and Divorce Act, the party who is entitled
to a
share in another’s pension interest does not necessarily lose
its claim. This party can approach the court for an amendment.
(See
Divorce and Pension interests by Lize De La Horpe; finweek November
20 2013). This in my view is the position in this application.
As
I earlier indicated both parties referred the court to
Sempapalele
v Sempapalele
and also
Maharaj V Maharaj
which
are the Free State and KZN decisions respectively. The cases both
decided the issues of the pension interest, whether it
forms part of
the joint estate.
In
the case Of Sempapalele, Judge Musi said the pension interest must be
dealt with expressly at the time of the divorce as it does
not
automatically fall into the joint estate and this view answers the
third and last question raised by the Applicant which question
the
Applicant required the court to deal with.”
[6]
The court a quo found that it is bound by the decision of this
division in the aforesaid Sempapalele matter and that the third
question should therefore be answered against the Appellant since
there was no specific claim for a pension interest filed in the
matter.
[7]
As far as the issue as to the settlement negotiations is concerned,
it is obvious that the correspondence between the parties
in that
regard consists of settlement negotiations bona fide entered into and
in that regard without prejudice. It is also clear
that both parties
awaited a formal draft agreement to sign if satisfied therewith and
that only then it would form a binding deed
of settlement. That was
also the stance taken by the Respondent in the application in the
court a quo in the opposing affidavits
to which no replying affidavit
was ever filed.
[8]
In the result I am not convinced that the court a quo erred in that
respect and I am therefore in agreement with the court a
quo that the
Appellant was not entitled to an amendement of the decree of divorce
so as to include the so called settlement negotiations
in such order.
[9]
As far as the second and third questions are concerned the two can be
dealt with simultaneously. It should be noted that the
questions
posed, including the first one, were recorded as if the court a quo
were to issue declaratory orders on those questions.
Of course the
court a quo did not have jurisdiction to issue declaratory orders.
However, I accept that the real intention was
to decide those issues
so as to decide whether an order amending the decree of divorce order
should be granted or not and were
not really meant to serve as
declaratory orders but only as reasons for the eventual finding as to
the success or not of the application
for amendment as agreed between
the parties.
[10]
The second and third questions necessitates an investigation into the
correctness of the relevant findings of the court in
the Sempepalale
matter and also, as far as it concurs in those findings, the judgment
in the matter of
DML v LJL
, a judgment of another
single judge of this division in case nr 3981/2010 delivered on the
25
th
of April 2013 and reported as
ML v JL Saflii
2013 ZAFHC 55.
These judgments were correctly held by the
court a quo as binding on it, notwithstanding the dissenting
judgments in other divisions
by single judges of those other
divisions.
[11]
In
Sempapalele v Sempapalele and another 2001(2) SA 306 (O)
the particulars of claim contained a prayer for division of the joint
estate and a separate claim for a proportionate share of
the pension
interest of the other party. The parties however entered into a deed
of settlement. It was agreed that the joint estate
should be divided,
without any particular reference to pension interest. After the
divorce proceedings were finalised, the Applicant
in that matter
applied to court for payment of a specific amount being 50% of the
amount paid to the Respondent in that matter,
after the divorce has
been finalised, by the Respondent’s pension fund.
[12]
At page 309 I the court defined the relevant issue as follows:
“
this
raised the legal question of whether the Respondent’s pension
interest was at the time of dissolution of the marriage
part of the
joint estate so that it automatically fell within the terms of the
blanket order for division or whether the Applicant
needed to obtain
a court order awarding her a share of such interest in terms of
Section 7 of the Divorce Act 70/1979.”
[13]
In the judgment the court had regard to the report of the Law
Commission in project 41 and came to the conclusion that there
were
two cardinal points, namely that, firstly a share of the pension
interest of a member spouse is not to be awarded to the non-member
spouse without more ado. The court found that it entails a
consideration of various factors some of which may only be
established
by evidence and that sufficient facts must be put before
the court to enable it to arrive at a proper decision and to make an
appropriate
award, which not necessarily meant half of the value of
such interest. Secondly the court found that the report showed that,
in
the absence of an agreement between the parties, a court order
must be obtained. The court then comes to the conclusion that section
7 of the Divorce Act supports those views.
[14]
In its reasoning, the court in that matter found some significance in
the fact that Sub section 7(1) of the Divorce Act “pairs”
the issue of division of assets with the issue of the payment of
maintenance. The court then refers to the necessity of evidence
as to
the value of the pension interest for purposes of making the
necessary decision and allocation. It also found that the “pairing”
is of significance and that it indicates that the section requires
the question as to division of assets to be dealt with in the
same
way as an award of maintenance, namely that it should be ordered and
dealt with finally at the time a decree of divorce is
granted and
cannot be revived later.
[15]
In my view the fact that the two issues are dealt with in the same
sub section where provision is made for an agreement between
the
parties to be made an order of court, does not justify an inference
that something special was intended. The following sub
paragraphs 2 –
5 deals with the question of maintenance separately from the division
of assets. Secondly the fact that entitlement
to maintenance
terminates at the dissolution of a marriage unless the court orders,
or the parties agree to, the payment of maintenance
thereafter, stems
from the common law and the nature of the right to maintenance.
Proprietary rights of parties do not lapse at
the termination of the
marriage. The mere fact that both can be agreed upon in terms of sub
section 1 does not justify an inference
that both are to be dealt
with in the same manner when the marriage is terminated by divorce.
Of course, where there is a dispute
about the proprietary rights of
the parties relating to either the division or forfeiture of rights
and the value thereof, the
necessary evidence has to be adduced.
Where however the parties are ad idem that a joint estate should be
divided, which
is in any event the automatic consequence where an
order of divorce in regard to marriage in community of property is
granted and
nothing else is asked for, such evidence is not necessary
at the stage of granting of the decree of divorce. If, after such
dissolution
of a marriage, the parties dispute the division, a court
can be approached to either deal with the matter itself or appoint a
liquidator.
[16]
It regularly happens that a plaintiff sues for divorce and prays for
division of a joint estate and the matter is then not
defended. In
such a matter there is no need for any reference to pension funds or
any evidence in regard thereto. The legal effect
is clear namely that
each of the parties is entitled to half of the joint estate. Sub
section 7(a) is clear and unambiguous in
stating that in the
determination of the benefits, the pension interest of the parties
shall be deemed to be part of the assets.
In
the factual division of the joint estate the parties may agree to any
form of division. Both parties may be entitled to a pension
interest
in his own name and agree to each keeping his own interest. They may
agree that the one party receives a certain asset
in exchange of a
pension interest of the other party etc. It is only when a dispute
arrives as to the division that it is necessary
to either appoint a
liquidator or approach the court. Such dispute can refer to the value
of a pension fund interest at the date
of divorce or to any other
asset and the value of any other asset in the joint estate.
[17]
The matter of
ML v JL (
supra
)
was an opposed divorce matter where, inter alia, forfeiture of
certain benefits were prayed for. The remarks made by the judge
in
that matter should be viewed against that background which
necessitated the necessary evidence to decide upon the forfeiture
issue. Unfortunately some of the findings of the court in that matter
create the impression that it is of general application in
all
matters. Unfortunately the judgment is not an example of clarity and
there are quite a few aspects that I, with respect find
difficult to
concur with. Those aspects however do not all apply to the issues in
this matter and is better left alone at this
stage.
[18]
In paragraph 57 of that judgment it appears that the court concurs
with the findings in the Sempapalele judgment. In particular
the
court found that a pension interest does not automatically fall
within the ambit of a customary division of the joint estate
and it
can only be part of a division if a specific order is made by a court
in that regard. The court found that it has to be
pertinently pleaded
and claimed. I am unfortunately not able to agree.
[19]
In the matter of
Maharaj v Maharaj and others 2002 [2] SA 648
[DCLD]
at page 650 J – 651 E the issue is dealt with,
to my mind, correctly. At page 650 J and with reference to the
Sempapalele
judgment, the learned judge remarked as follows:
“
But,
if the learned judge intended to hold that, if there is no reference
to a spouse’s pension benefit or interest in a divorce
order,
the other party to a marriage in community of property is forever
precluded from claiming to be entitled, as his or her
share of the
joint estate, to a half share thereof, I am, with respect, unable to
agree with that view.”
[20]
In the same vain, the judgment in
Fritz v Fundsatwork Umbrella
Pension Fund and others 2013 [4] SA 492 [ECP]
from page 495
par 15 to 497 par 24, in my view correctly sets out the law. After
discussing the Sempapalele and Maharaj judgments
the learned judge at
page 496 par 21 remarks as follows:
“
The
effect of this passage is that an order may be sort in terms of ss(7)
even if a divorce order has already been granted. There
is however a
very important qualification, as is apparent from the quoted passage
itself. In the Maharaj matter the evidence indicated,
although there
had been an order of divorce, division of the joint estate had, as a
matter of fact, not yet occurred. In other
words, the determination
of constituted the joint estate and its proper division between the
parties, as required by the decree
of divorce, still had to be
undertaken, whether by agreement between the parties or by way of the
appointment of a liquidator.”
In
par 22 on the same page of the same judgment the learned judge
remarks as follows:
“
In
the event that a court orders division of a joint estate and the
parties are not, after such order is made, able to reach agreement
regarding the division of the estate, the dispute may be resolved by
the court itself or by the appointment of a receiver or liquidator
who gives effect to the division of the estate on behalf of the
court.”
The
learned judge in this matter then in par 23 concludes as follows:
“
This,
in my view brings the process of giving effect to an order of
division of the joint estate, by way of a subsequent appointment
of a
receiver or by way of the resolution of a dispute in the relation to
the division by the court, squarely within the ambit
of Section 7(7)
of the Divorce Act, which speaks of determining the patrimonial
benefits in a divorce action.”
[21]
The result of the aforementioned is that, when parties by deed of
settlement agrees to a blanket division of a joint estate
or when an
order of court orders division of a joint estate, the pension
interest of such parties who have such interest automatically
fall to
be divided as part of the joint estate. Such an agreement or order
defines the rights of the parties in regard to the proprietary
rights
in and to the joint estate. One must differentiate between orders
that define the rights of the parties and orders aimed
at giving
effect to such rights. Orders granting division of a joint estate and
orders granting forfeiture to some or other extent
are all orders
defining the rights of the parties. Thereafter, if the parties cannot
agree as to giving effect to such orders defining
their rights, the
court can be approached to grant orders either appointing liquidators
or deciding the issue as to the actual
division of the estate. Those
latter types of orders do not have to be issued at the time of
granting the decree of divorce. (Only
orders defining such rights.)
The orders that a court is authorised (and not obliged) to make in
Sub section 7(8) of the Divorce
Act are orders that are aimed to give
effect to the defined rights of the parties.
[22]
The prescripts of the pension funds Act 24/1956 might necessitate at
least the identity of the relevant pension fund to be
contained in a
court order. Section 37(D)(4)(a) stipulates that a non-member who has
been awarded or are entitled to a part of
a pension interest may
submit the court order to a pension fund who is named in the order or
is identifiable from the decree of
divorce. Such fund then has to
deduct the relevant portion from the pension interest of the member
spouse and (contrary to what
Section 7(8) of the Divorce Act
foresees) may be paid out to the non-member spouse according to his
or her choice. (See Section
37(D)(4)(b).)
Where
a settlement agreement provide for a blanket division of a joint
estate or a court order orders a blanket division of a joint
estate,
all pension funds to which any of the spouses belong and had an
interest in at the date of divorce are involved, in the
sense that
all such pension interests are deemed to be part of the joint estate.
It then appears to be clear that all the pension
funds involved as
aforesaid are identifiable from the decree of divorce since the only
question is whether the spouses were members
of and had a pension
interest at the date of divorce. Strictly speaking it would then not
even be necessary to enter a specific
name of a pension fund in a
court order.
[23]
Although I am convinced that the decisions of the single judges in
this division referred to above and which the trial court
concluded
prevented it from granting relief, are wrong, the question still
remains whether relief could and should have been granted
in any
event.
[24]
As stated above, with reference to the applicability of the order of
division to any pension fund of which the Respondent was
a member at
the time, it was open to the Appellant to submit such order to the
relevant pension fund in terms of Section 37D(4)(a)
of the Pension
Fund Act as aforesaid. There is no allegation that he did that or
even considered doing that. If he did that and
the pension fund
refused to adhere to the order of division and allocate a 50%
interest calculated as at the date of divorce in
his favour, he then
could have approach the court for an order compelling them to do
that. Alternatively and if they required the
name the fund to be
specifically mentioned in the order he should have approached the
court for an amendment to the effect that
the specific pension fund
be named in the order in accordance with Section 7(8) of the Divorce
Act. That would rather entail an
amplification of the order and not
really an amendment. For that purpose at least the name of the
relevant pension fund should
have been mentioned or sufficient
particulars as to be able to identify such fund in the order. That
has not been done.
[25]
Another obstacle in the way of the Appellant is to be found in the
judgment of Goosen J in the matter of
Fritz v Fundsatwork
Umbrella Pension Fund and others (
supra
)
at page 497 para 27 to the effect that, where division of the estate
has been finalised, an application such as the above is not
competent
any more. The question whether the division has been finalised or not
in the present matter has not been explicitly raised
by any of the
parties in the affidavits. It was the duty of the Appellant as
Applicant to convince the court that it was still
possible to grant
the necessary orders, in other words to show that the division of the
joint estate has not been finalised as
yet. That he failed to do.
[26]
In conclusion, the fact that I am convinced that the decisions of the
single judges in this division on which the court a quo
relied and
regarded as prohibiting the granting of the application, are wrong
and should not be followed, does not necessarily
mean that the
Appellant should have succeeded in the court a quo.
His
application was firstly premature and brought before he even tried to
give effect to the order by submitting that to the relevant
pension
fund, and secondly lacked the necessary allegations and information
to enable the court to grant an order in terms of Section
7(8) of the
Divorce Act. He also failed to show that the court would still be
entitled to grant an order by failing to allege and
show that the
division of the estate has not been finalised as yet. For those
reasons the application should have failed in any
event although for
different reasons than those relied on by the court a quo.
[27]
In the result the appeal is dismissed with costs.
_______________
A.F.
JORDAAN, J
I
Concur
_________________
S.
J REINDERS, AJ
On
behalf of the appellant: Adv. I.J Bezuidenhout
Instructed
by:
UFS
Law Clinic
BLOEMFONTEIN
c/o
Maree Gouws Attorneys
WELKOM
On
behalf of the respondent: No appearance