Botha v Botha (393/04) [2006] ZASCA 6; 2006 (4) SA 144 (SCA) ; [2006] 2 All SA 221 (SCA) (9 March 2006)

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[2006] ZASCA 6
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Botha v Botha (393/04) [2006] ZASCA 6; 2006 (4) SA 144 (SCA) ; [2006] 2 All SA 221 (SCA) (9 March 2006)

T
HE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
Reportable
CASE
NO: 393/04
In the matter between:
heidi botha
Appellant
and
gabriël
johannes botha
Respondent
Coram
:
Harms,
Brand, Conradie, Lewis et Van Heerden JJA
Heard: 17
February 2006
Delivered: 09
March 2006
Summary: Divorce
– forfeiture of patrimonial benefits of the marriage – proceeds
of two insurance policies taken out by the
defendant (husband) on
the life of his father – application of three factors referred to
in
s 9
of the
Divorce Act 70 of 1979
Neutral
citation: This judgment may be referred to as
Botha v Botha
[2006] SCA 7 (RSA)
JUDGMENT
VAN
HEERDEN JA:
The only
issue in this appeal is whether or not the trial court was correct
in making a partial forfeiture order against the appellant
in terms
of
s 9
of the
Divorce Act 70 of 1979
.
The parties were married to each other on 24
April 1993, the proprietary consequences of their marriage being
regulated by an antenuptial
contract in terms of which community of
property and community of profit and loss were excluded and the
marriage was made subject
to the accrual system specified in Chapter
1 of the
Matrimonial Property Act 88 of 1984
.
In July 2003, the
appellant
(‘plaintiff’
) instituted action against the respondent
(‘defendant’) in the Port Elizabeth High Court, claiming a
decree of divorce and
ancillary relief. In his counterclaim, the
defendant claimed partial forfeiture by the plaintiff of the
patrimonial benefits of
the marriage. On the evidence led at the
trial, it was accepted on behalf of both parties that the plaintiff
was entitled to payment
of R497 300 from the defendant as being half
of what was, at least, the difference between the accruals of their
respective estates.
This payment by the defendant to the plaintiff
formed part of the order made by the trial court immediately after
the conclusion
of the trial. The sole remaining question (which was
reserved for judgment at a later stage) was whether the plaintiff
was entitled
to any further amount in this regard, this issue
revolving around the proceeds of two insurance policies that the
defendant had
taken out on the life of his father who died on 24
July 2001. The respective insurers had paid out an amount of
R500 120 to
the defendant in respect of each policy.
As regards this remaining question, Jennett J
ultimately issued an order directing that the plaintiff forfeit
one-half of the proceeds
of the first policy (the Sanlam policy) and
the full proceeds of the second policy (the Fedsure policy). In
consequence of this
order, he directed the defendant to pay to the
plaintiff a further amount of R125 030 as the balance of her
share of the accrual
of their respective estates. The defendant was
also ordered to pay the plaintiff’s taxed party and party costs.
The appeal, which
comes before us with leave of the High Court, is
directed at the
se
order
s
.
The
counterclaim for forfeiture is governed by the provisions of
s 9(1)
of the
Divorce Act 70 of 1979
, which reads as follows:
‘
When a decree of
divorce is granted on the ground of the irretrievable break-down of a
marriage the Court may make an order that the
patrimonial benefits of
the marriage be forfeited by one party in favour of the other, either
wholly or in part, if the Court, having
regard to the duration of the
marriage, the circumstances which gave rise to the break-down thereof
and any substantial misconduct
on the part of either of the parties,
is satisfied that, if the order for forfeiture is not made, the one
party will in relation
to the other be unduly benefited.’
In
Wijker v
Wijker
,
1
this court considered the question whether proof of ‘substantial
misconduct on the part of either of the parties’ was an essential
requirement for a forfeiture order. It answered this question in the
negative, holding
2
that the context and the subject-matter of
s 9(1)
made it abundantly
clear that the legislature never intended the three factors
mentioned in the section to be considered cumulatively.
As regards
the approach to be followed by a court of appeal when hearing an
appeal in respect of a forfeiture order, Van Coller
AJA stated the
following:
3
‘
It
is obvious from the wording of the section that the first step is to
determine whether or not the party against whom the order
is sought
will in fact be benefited. That will be purely a factual issue. Once
that has been established the trial Court must determine,
having
regard to the factors mentioned in the section
, whether or not
that party will in relation to the other be unduly benefited if a
forfeiture order is not made. Although the second
determination is a
value judgment,
4
it is made by the trial Court after having
considered
the facts falling within the compass of the three factors mentioned
in the section.’
(
E
mphasis
added
.)
In relation to
the trial court’s finding in the
Wijker
case that it would
be unfair to permit the appellant husband to share in the respondent
wife’s estate agency business while he
had made hardly any
contribution towards its management, administration and
profit-making, Van Coller AJA held
5
that --
‘
The
finding that the appellant would
be
unduly benefited if a
forfeiture order was not
made, was therefore based on a
principle of fairness
. It seems to me that the learned trial
Judge, in adopting this approach, lost sight of what a marriage in
community of property
really entails. . . . The fact that the
appellant is entitled to share in the successful business
established by the respondent
is a consequence of their marriage in
community of property.
In making a value judgment this equitable
principle applied by
the Court
a quo
is not justified
.
Not only is it contrary to the basic concept of community of
property, but
there is no provision in the section for the
application of such a principle
. . . . .
The benefit that
will be received cannot be viewed in isolation, but in order to
determine whether a party will be unduly benefited
the Court must
have regard to the factors mentioned in the section
. In my
judgment the approach adopted by the Court
a quo
in
concluding that the appellant would be unduly benefited should a
forfeiture order not be granted was clearly wrong.’
(Emphasis
added.)
The three factors governing the value
judgment to be made by the trial court in term of
s 9(1)
thus fall
within a relatively narrow ambit: they are limited to (a) the
duration of the marriage; (b) the circumstances
which gave rise
to the breakdown thereof; and (c) any substantial misconduct on
the part of either of the parties. Conspicuously
absent from
s 9
is a catch-all phrase, permitting the court, in addition to the
factors listed, to have regard to ‘any other factor’. (Compare
in this regard the wording of
s 7(2)
of the
Divorce Act dealing
with maintenance orders upon divorce which, apart from the fact that
the list of relevant factors is significantly longer, also
entitles
the court to have regard to ‘any other factor which in the opinion
of the court should be taken into account’. So
too, in terms of
s
7(5)
, the list of factors which must be taken into account by a
court in the determination of which assets should be transferred by

one spouse to the other upon divorce, when the circumstances set out
in
ss 7(3)
and (4) justify the making of such a ‘redistribution
order’, also expressly includes ‘any other factor which should
in the
opinion of the court be taken into account.’) The trial
court may therefore not have regard to any factors other than those
listed
in
s 9(1)
in determining whether or not the spouse against
whom the forfeiture order is claimed will, in relation to the other
spouse, be
unduly benefited if such an order is
not
made.
The circumstances under which the two
insurance policies were taken out by the defendant were canvassed in
some detail during the
trial and in the judgment of the High Court.
The defendant’s father (‘Mr Botha’) owned two farms in the
Tarkastad area. He
had two sons, the defendant and his elder
brother, Matthias Gysbert Botha (‘Gys Botha’), and two
daughters. He intended to
bequeath one of his farms to each of his
sons, with the elder son having the choice of which farm he wanted.
However, as the defendant
had no intention of farming, it was
envisaged that Gys Botha, who was also farming in the Tarkastad
area, might buy the defendant
out if and when the sons inherited
their father’s farms. It was apparently suggested that Gys Botha
might take out an insurance
policy on his father’s life in order
to provide him with the finances necessary to fund such a buy-out,
but he was not willing
to do so. Mr Botha then suggested that an
insurance policy be taken out on his life with the proceeds thereof
to be used to ‘compensate’
the defendant for the loss of the
farm which Mr Botha now intended to bequeath to Gys Botha. After
discussing various options in
this regard, it was decided that the
defendant would take out the policy on his father’s life and, in
April 1997, the Sanlam
policy (for R500 000) was taken out in the
defendant’s name. The defendant paid all the premiums due under
the policy.
Because of the increasing price of land, the
defendant and Mr Botha subsequently decided, in late 2000, that a
second insurance
policy for the same amount should be taken out by
the defendant on Mr Botha’s life. The Fedsure policy thus came
into being,
the defendant once again paying all the premiums due
thereunder.
Mr Botha died in July 2001 as a result of
injuries sustained during a motor accident. In terms of his will,
Gys Botha inherited
(inter alia) both Mr Botha’s farms, while the
defendant inherited only a cash amount of R300 000, as did each of
his sisters.
The defendant initially contended that the proceeds of
the policies accrued to him as either an inheritance or a donation
from
his late father and that, in terms of
s 5(1)
of Act 88 of 1984,
these proceeds had to be excluded from the accrual of the
defendant’s estate. This contention was, however,
abandoned at the
end of the trial.
Having dealt
with the factual background, as summarised above, as well as the
relevant statutory provisions and the judgment of
this court in the
Wijker
case, Jennett J came to the following conclusion with
regard to the factual portion of the s 9(1) enquiry:
‘
There is no doubt, in
my view, that, if an order for forfeiture is not made in respect of
the proceeds of the insurance policies,
either wholly or in part,
plaintiff will indeed be benefited in that defendant will have to
make some payment to her in respect thereof.
Before a forfeiture
order can be made, however, I have to be satisfied that plaintiff
will not simply be benefited but that she will
be unduly benefited in
relation to defendant if a forfeiture order is not made, and this is
to be determined “having regard to
the duration of the marriage,
the circumstances which gave rise to the breakdown thereof and any
substantial misconduct on the part
of either of the parties.’’ ’
According to
the trial judge, neither party had been guilty of any substantial
misconduct. He also appeared to have regarded the
duration of the
parties’ marriage (ten years) as a more or less ‘neutral’
factor, stating that –
‘
The
parties were in their early twenties when they married. . . . If
their marriage had endured, the prospects are that they would
have
remained married for a long time and in relation thereto a marriage
of 10 years might be regarded as having been of fairly
short
duration. Nevertheless a marriage of 10 years duration cannot be
regarded as being of very short duration.’
With regard to the circumstances which gave
rise to the breakdown of the marriage, Jennett J referred to the
differences in the
personalities of the parties, concluding that
this factor, as a circumstance giving rise to the breakdown of their
marriage, was
‘of no relevance to the issue that I have to
decide.’
A factor that was, however, held clearly to
have been a circumstance giving rise to the breakdown of the
marriage, was the plaintiff’s
relationship with her mother-in-law.
The plaintiff appeared to feel that her mother-in-law was overly
possessive of her son and
that she interfered unduly in their
married life. According to the plaintiff, the defendant’s family
members frequently visited
and stayed at the parties’ home with
little notice and did not leave the parties to lead their own lives.
Indeed, in early 2000,
matters had reached such a stage for the
plaintiff that she instituted divorce proceedings against the
defendant. Although the
parties reconciled shortly thereafter, one
of the conditions set by the plaintiff for her withdrawing the
divorce summons was an
embargo on her mother-in-law – according to
the defendant, also on his father and siblings – visiting the
parties’ home.
This was the situation which prevailed at the time
the Fedsure policy was taken out.
Jennett J concluded as follows:
‘
Under
the above circumstances it seems to me that plaintiff would indeed be
unduly benefited if a forfeiture order is not made in
respect of the
proceeds of the second insurance policy taken on defendant’s
father’s life [the Fedsure policy]. I have already
mentioned the
motivation behind the taking out of the policy, which was to benefit
defendant, and clearly not plaintiff and defendant
as a unit, and to
order defendant to pay plaintiff half of the proceeds of the policy
taken out at the time in circumstances when
plaintiff was estranged
from defendant’s family would in my view result in plaintiff being
unduly benefited in relation to defendant.
I will therefore order
that plaintiff forfeit any patrimonial benefit resulting from the
payment of the proceeds of the second insurance
policy to defendant.
For much the same reasons
I am also of the view that, if plaintiff were to share in the full
proceeds of the first insurance policy
taken out on the life of
defendant’s late father [the Sanlam policy], she will be unduly
benefited in relation to the defendant.
This insurance policy taken
out during 1997 was, however, taken out at a stage when relations
between plaintiff and defendant’s
family had not deteriorated to
the extent they subsequently did. I am mindful of the fact that in
terms of their marriage contract
plaintiff is entitled to share in
the full accrual of defendant’s estate unless a forfeiture order is
made against her, and in
exercising what may be described as a value
judgment I conclude that plaintiff should forfeit [such] patrimonial
benefit of the marriage
as would result from the payment of one half
of the proceeds of the first insurance policy to defendant.’
In my view, it is quite clear that, while
referring to the approach laid down by this court in the
Wijker
case, the trial judge misdirected himself in that he did
not
,
in the exercise of his value judg
e
ment,
confine himself to the factors mentioned in s 9(1). On the contrary,
it would appear that, at the very least,
one
of the main
reasons for his making the forfeiture order against the plaintiff
was what he accepted to be ‘the motivation behind
the taking out’
of the policies. While the strained relationship between the
plaintiff and the defendant’s family, in particular
his mother,
was taken into account by Jennett J as ‘a circumstance giving rise
to the breakdown of the marriage’, it appears
from his judgment
that neither this strain, nor the duration of the marriage, nor a
combination of both, would have led him to
make the forfeiture order
in question had he not had regard to what he accepted, on the
evidence, to be the reasons motivating
the taking out of the
policies. The trial judge thus cannot be said to have exercised his
value judg
e
ment ‘having
regard to the factors mentioned’ in s 9, as required by the
judgment of this court in the
Wijker
case. It follows that
the appeal must succeed.
Order
In the circumstances, the following order is
made:
1. The appeal is upheld with costs, including the
costs of the application for leave to appeal.
2. Paragraphs (a) and (b) of the order made by
the Port Elizabeth High Court on 10 June 2004 are set aside and
substituted with
the following:
(a) The defendant’s counterclaim is
dismissed.
(b) The defendant is ordered to pay to the
plaintiff an amount of R500 120, in addition to the amount of R497
300 payable
by the defendant to the plaintiff in terms of the order
made on 14 May 2004 by the Port Elizabeth High Court, such amounts
together
representing the plaintiff’s share of the accrual of the
parties’ respective estates.
B J VAN
HEERDEN
JUDGE OF APPEAL
CONCUR:
Harms
JA
Brand
JA
Conradie
JA
Lewis
JA
1
1993 (4) SA 720
(A).
2
At 729E-F.
3
At 727E-F.
4
On the nature of the discretion exercised by the court in this
regard, see
Wijker
at 727F-728C. Cf
Bezuidenhout v
Bezuidenhout
2005 (2) SA 187
(SCA) paras 16-18 and
Kirkland v
Kirkland
[2005] 3 All SA 353
(C) paras 45-51.
5
At 731C-H.