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2012
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[2012] ZAKZDHC 17
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L.D.M v D.P.M (AR 314/11) [2012] ZAKZDHC 17 (1 January 2012)
IN THE KWAZULU-NATAL HIGH COURT,
DURBAN REPUBLIC OF SOUTH AFRICA
CASE NO: AR
314/11
In the matter between;
L
D M
….........................................................................................
Appellant
vs
D P M
….....................................................................................
Respondent
JUDGMENT
K PILLAY J
This is an appeal against a
judgment and order of Magistrate G J Muller of Mooi River
Magistrate's Court granting absolution from
the instance at the close
of Plaintiff's case, with costs.
BACKGROUND FACTS
The Appellant and the Respondent
were previously married to each other. They divorced on 5 May 2004.
On 19 March 2004, prior to
the finalization of divorce proceedings,
the parties concluded a written deed of settlement ("Settlement
Agreement"),
which agreement sets out the terms and conditions
of their divorce, including that relating to the Respondent's pension
interest.
Specifically clause 4.5 of the settlement agreement,
provides as follows:
"David has a pension
with his employer and agrees that Lynne will be entitled to 50% of
the amount thereof, calculated as at
the date of divorce. This
agreement is a formal consent by David that this be noted by his
employer against it's records relating
to his rights to the pension."
At the time the divorce order
was granted, it is not in dispute, that the Respondent's pension fund
was valued at R90 573.91. On
31 August 2006, the Respondent was
medically boarded from his employment and sometime during September
2006, he was paid out his
pension fund proceeds. As absolution was
granted by the Magistrate's Court, only the Appellant's testimony is
on record in this
appeal.
It is clear from her testimony
that the Appellant and the Respondent had minimal communication,
which consisted largely of messages
transmitted through their
children or cell phone text messages. She stated that she was not
informed that the Respondent's pension
proceeds had been paid to him.
She merely learnt around September 2006, from one of her children
that the Respondent was medically
boarded.
She was asked by her legal
representative, whether, upon hearing he was medically boarded, she
made any enquiries with the
Defendant with regard to whether
his pension had been paid to him, her response was as follows:
"I
didn't at that point because I understood that as long as he was
receiving payment from the Municipality, which I understood
he was
}
and until
such date as he actually left the Municipality, that pension would
not fall due. So therefore there was no need forme
to make any
enquiries on that."
During 2008, the Appellant
applied for a maintenance order against the Respondent, which
necessitated an investigation into the
Respondent's financial
affairs, it was this investigation, conducted through the Appellant's
attorney, which led to the discovery
that the Respondent had in fact
been paid out his pension proceeds in September 2006.
As a consequence thereof, the
Appellant issued summons against the Respondent on 28 October 2009,
for her 50% share of the pension
proceeds. The matter was heard on 24
February 2011.
At the close of
the Plaintiff's case, the Respondent applied for absolution from the
instance on
inter
alia
two essential grounds, firstly that the settlement agreement did not
create an obligation on him to do anything in respect
of making
payment to the Appellant. That the effect of Clause 4.5 was merely to
grant permission to the Appellant to take steps
which would result in
"a
recordal of this acknowledgement of the entitlement in the records of
the pension fund".
Secondly, that the claim had
prescribed on the basis that the debt became due in September 2006
when the pension proceeds were paid
out to the Respondent and that
summons was only issued in October 2009 (more than three years
later).
Since the court
a
quo
found
in favour of the Respondent's argument on the construction of clause
4.5 which resulted in the grant of an order of absolution
from the
instance, it determined it unnecessary to consider the defence of
prescription.
The Court
a
quo's
reasoning
in granting absolution on the first ground is as follows:
"Paragraph 4.5's clear
meaning is that it is a formal consent to the effect that steps can
be taken to note the plaintiff's
entitlement to 50% of the
defendant's pension interest in the records of his pension fund."
The Court a
quo
then
made the following observation:
"In terms of Section
7(8)(a)(i)of the
Divorce Act 70 of 1979
a divorce court is empowered
to make an order to the effect that the part of the pension interest
of the member to be assigned
to the other party be paid out to that
other party, and to order further that the registrar of the court
notify the relevant fund
that an endorsement should be made, in terms
of
section 37D(4)(a)(i)(aa)
and (bb) of the
Pension Funds Act 24 of
1956
the pension fund shall then be under anobligation to deduct the
amount awarded to the non-member spouse in terms of the order."
The Court
a
quo
then
went on to find that in the absence of an order in terms of
Section
7(8)(a)(i)
of the
Divorce Act
1
the
Appellant
was under a duty in terms of
Rule 41(4)
to apply for such an order in
terms of the settlement agreement in order to notify the pension fund
of her 50% entitlement to the
pension proceeds. For this reason, the
settlement agreement itself did not create an obligation on the
Respondent to do anything
as regards making payment to the Appellant
of these proceeds.
Consequently the cardinal issues
which fall for consideration are:
(1) Whether the
Court a
quo
was
correct in the interpretation it placed upon Clause 4.5 of the
Divorce Settlement.
(2) Whether the defendant
discharged the onus he bore to prove that the claim had in fact
prescribed.
It is well
established that settlement agreements are to be interpreted
according to the basic principles of interpretation of contracts.
2
The intention
of the parties was to be garnered from the language of the agreement
in its contextual matrix, in the light of background
facts, and in
the light of admissible evidence.
Where parties
enter into settlement agreements, their remedy is to sue on the
agreement, obtain judgment and then execute.
3
An analysis of
clause 4.5, reveals that it consists of two sentences; the first
which records that the Appellant is
"entitled"
to
50% of the pension proceeds, the second is that the Respondent
"consents"
to
this settlement being noted. As correctly submitted by Counsel for
the Appellant, both are severable from the other. The first
grants
the Appellant a right to claim the proceeds while the second provides
her with a mechanism to protect that right.
Indeed, as submitted, each
sentence retains its own discrete meaning whether it is read alone,
or whether it is read in conjunction
with the other sentence.
The first sentence;
"David
has a pension fund with his employer and agrees that Lynn will be
entitled to 50% of the amount thereof, calculated
as at the date of
divorce"
The use of the
word
"will"
clearly
connotes that the Appellant's claim to 50% would become due when the
pension benefit accrued to the Respondent.
The second sentence:
"This agreement is a
formal consent by David that this be noted by his employer against
its records relating to his rights
to the pension"
This merely records that the
Respondent provided a formal consent for his employer to record the
Appellant's entitlement to 50%
of the pension benefit.
It simply enables the Appellant
to safeguard her interest by asking the Pension Fund to record her
50% entitlement, calculated as
at the date of divorce and that, that
amount should be paid to her when it accrues.
In
Maharaj
v Maharaj
4
a similar
argument to that accepted by the Court a
quo
was
argued. Counsel in that case, relying on
Sempapalele
v Sempapalele and Another,
5
argued that if
no order has been obtained in terms of the
Divorce Act when
the
divorce was granted, a non-member spouse in a marriage in community
of property could not claim any of the member spouse's
pension fund
proceeds.
Magld J,
doubting
that this was indeed the
ratio
of
the case, nevertheless was unable to agree with the notion that where
no reference is made to a spouse's pension benefit or interest
in a
divorce order, the non-member spouse in a marriage in community of
property is forever precluded from claiming half of the
pension.
In this case
the Appellant's failure to take steps to protect that right by
getting the Respondent's employer to note
"against
its records",
the
terms of the agreement, does not in my view extinguish her right to
50% of his pension interest.
In fact in
Commissioner
for Inland Revenue v Pretorius
6
the Court held
that the expression
"entitled
thereto"
in
its ordinary sense meant
"having
a
rightful
claim thereto".
Section 7(8)(a)(i)
of the
Divorce Act empowers
the divorce court to order a pension fund to pay
any part of the pension interest which is due to the spouse of a
member of the
fund directly to the non-member spouse when the pension
benefit accrues to the member spouse.
It is common practise for Courts
to direct the Registrar of the Court to notify the pension fund
concerned to make the relevant
endorsement in the funds records.
The fact that no order is made
in terms of
Section 7(8)(a)
of the
Divorce Act at
the time of the
divorce, does not preclude the non-member spouse from later making a
claim against the other former spouse for
a portion of the pension
proceeds,
Therefore, as
correctly, submitted the conclusion reached by the Court
a
quo
that:
,
" there was no
indication that the divorce court made any
order to this effect...
consequently, in terms of rule 41(4) of the Uniform Rules of Court
the duty rested on [the Appellant] to
apply for an order in terms of
the written agreement in order to notify the pension fund of her
entitlement in respect of the pension
interest"
is a complete
non
sequitur.
In addition it
is clear that the Court
a
quo
did
not consider the scope and ambit of Rule 41(4) which provides;
"any
party to
a
settlement
which has been reduced to writing and signed by the parties or their
legal representatives but which has not been carried
out, may apply
for judgment in terms thereof on at least five days' notice to all
interested parties".
It was
correctly asserted that Rule 41(4) contemplates a situation where one
of the parties to the settlement agreement fails to
perform in terms
of the settlement agreement. In that event, the aggrieved party can
apply for judgment in terms of the settlement
agreement. The Pension
Fund was not a party to the settlement agreement. A
fortiori
it
was not a party that failed to perform in terms of a settlement
agreement. There was no relief that the Appellant could have
obtained
against the ' Pension Fund by making an application in terms of Rule
41(4). Even had the Pension Fund notionally been
a party to the
settlement agreement, it could not be ordered to do anything in the
way of
"noting
against its records relating to [the Respondent's rights] to the
pension"... that [the Appellant] would be entitled
to 50% of the
amount thereof calculated as at the date of divorce"
as
contemplated by clause 4.5 of the settlement agreement. Nor could it
be ordered to carry out any of the actions listed in
section
37D(4)(a)
and (b) of the
Pension Funds Act 24 of 1956
, because it
would only be obliged to do so if an order had been made by the
divorce court in terms of
section 7(8)(a)(i)
of the
Divorce Act. The
provisions of
section 37D(4)(a)
and (b) of the
Pension Funds Act 24
of 1956
apply only
"for
the purpose of
section 7(8)(a)(i)
of the
Divorce Act,
that
is, they apply only if an order has been made in terms of
section
7(8)(a)(i)
of the
Divorce Act. Where
no order is made the
Pension
Funds Act has
no application.
The Appellant, being the
aggrieved party could have applied for judgment in terms of the
Settlement Agreement.
In my view, the first sentence
of Clause 4.5 namely:
"David
has a pension fund with his employer and agrees that Lynn will be
entitled to 50% of the amount thereof, calculated
as at the date of
divorce",
created
an obligation on the Respondent to pay over to the Appellant or as
submitted to cause to be paid over to the Appellant an
amount equal
to 50% of the Respondent's interest in the Pension Fund, as at the
date of divorce when the benefit accrued to him.
He failed to do so.
At the hearing of the appeal,
Counsel for the Respondent raised the issue that Appellant's claim as
pleaded does not establish an
obligation on the Respondent to make
payment to her. Given that the Applicant has based her claim on a
breach of contract, it is
asserted that she accordingly bears the
onus of proving the terms of the contract, including terms in the
negative.
Generally,
pleadings in the Magistrate's Court are not required to be drafted
with the same precision as in the High Courts, and
some indulgence is
afforded to litigants in this regard, provided that the particulars
of claim are set out in such a way that
liability nevertheless
follows as a necessary consequence of the allegations therein.
Tuckers
Land Development Corporation (Pty) Ltd v Loots & Nees and Korving
v Louters.
7
Where
appropriate, a Court can also infer an allegation that is not
expressly contained in the summons from an allegation that is
Ruto
Flour Mills (Pty) Ltd v Moriates
8
It is so that the pleadings were
not a model of clarity. However, it is clear from the particulars of
claim that the Plaintiff alleges
that a settlement agreement was
entered into by the parties, in terms whereof she was entitled to 50%
of the Respondent's pension,
and that the Defendant breached this
agreement. In his plea, the Respondent as Defendant does no more than
merely deny the Plaintiff's
allegation of breach, and puts her to the
proof thereof.
This issue was
not raised before the Court a
quo.
The
parties principal argument related to the interpretation of Clause
4.5. It is not open to the Respondent to now take issue with
the
pleadings.
In my view, the Respondent was
not in any way prejudiced by the manner in which the pleadings were
drawn.
Counsel for the
Respondent has urged the Court to decide the issue of prescription on
the available evidence. This issue was raised
as a special plea to
the claim. The Court a
quo
did
not pronounce on this issue.
In terms of the
Prescription Act ('the Act')
9
,
the running of prescription of a debt begins when the debt becomes
due, and in the case of an ordinary debt, the debt becomes
extinguished after a period of 3 years.
Section 12(3) of the Act
provides;
"A debt shall not be
deemed to be due until the creditor has knowledge of the identity of
the debtor and of the facts from
which the debt arises. Provided that
a creditor shall be deemed to have such knowledge if he could.have
acquired it by exercising
reasonable care"
The debtor claiming prescription
in these circumstances, bears the onus not only, to allege but also
to prove such knowledge or
deemed knowledge.
In order to be
regarded as having obtained actual knowledge of the facts for the
purposes of Section 12(3) of the Act, the knowledge
is required to be
more than merely a suspicion, supposition or opinion. As aptly stated
in
Minister
of Finance and Others v Gore NO:
10
It is well established in our
law that:
(a) Knowledge is not confined
to the mental state of awareness of facts that is produced by
personally witnessing or participating
in events, or by being the
direct recipient of first-hand evidence about them.
(b) It extends to. a
conviction or belief that is engendered by or inferred from attendant
circumstances.
(c) On the other hand, mere
suspicion not amounting to conviction or belief justifiably inferred
from attendant circumstances does
not amount to knowledge.
It follows
that belief that Is without apparent warrant is not knowledge, nor is
assertion an unjustified suspicion, however passionately
harboured;
still less, is vehemently controverted allegation or subjective
conviction.
1
The Courts require a creditor
not simply to take a completely passive role in respect of acquiring
knowledge, but to act diligently.
The reason for
this was postulated by
Diemon
JA
in
Gericke
v Sack
11
as follows:
"The act merely requires
the creditor to seek such knowledge by the exercise of reasonable
care; she is not required to issue
summons - she is given a generous
three years in which to institute proceedings. All that she is called
on to do is to ask one
question to establish identity and not to be
content to pay a purely passive role. If she could have acquired this
knowledge by
acting diligently, her inertia, ineptitude or
indifference will not excuse her delay. The creditor who fails to
exercise the reasonable
care prescribed by the Act must pay the
penalty for he is then deemed to have acquired the knowledge
necessary for the debt to
become due and for prescription to begin to
run."
The Appellant in this matter did
not know that the Respondent had received the proceeds of his pension
at the time he did and consequently
could not have known in September
2006, that the debt owing to her had in fact become due.
In fact, the
only evidence before the Court a
quo
was
that the Defendant was medically boarded on 31 August 2006. There is
no evidence on record on as to exactly when the pension
proceeds were
paid out, given that pension proceeds are not usually paid out on an
employees last day of service.
The Appellant's failure to take
steps to ascertain when the pension proceeds were paid out when she
heard about his being boarded
in September 2006, appears to stem from
two incorrect assumptions she made firstly that the Respondent could
not after having been
boarded, continue to receive an ihcome once the
pension proceeds were paid out, (she was aware that he was still
receiving an income)
and secondly she believed that her entitlement
to 50% of the pension proceeds was noted with the Respondent's
pension fund, and
that she would therefore be contacted by the
Pension Fund in respect of her share. As she had not heard from them,
she assumed
he had not received his pension fund proceeds.
The Respondent bears the onus of
proving that the claim had prescribed and at the very least, the
Respondent had to establish from
when the Applicant had a complete
cause of action, from when prescription would have started running
and the actual date on which
the pension proceeds were paid out. This
was not clearly established by the Defendant.
There is very
little on record to justify a conclusion that had she exercised
reasonable care she could have acquired knowledge
of the payout.
In the circumstances the appeal
is upheld with costs.
The decision of
the Court
a
quo
is
substituted with the following;
The application for absolution
from the instance is refused,
The matter is
referred to the Court a
quo
for
the proceedings to be continued to completion.
K
PILLAY J
I
agree
SISHI
J
Counsel
for Plaintiff:
Advocate
Blomkamp
Instructed
by
:
Pitcher
& Fismer Attorney
Appellant's
Attorneys
4 Forest Road
Prestbury
PIETERMARITZBURG
Counsel
for 1
st
Defendant:
Advocate
C Hattingh
Instructed
by
:
Lister
& Lister
Respondent's Attorneys
1
st
Floor, Suite
101
161 Pietermaritz Street
Pietermaritaburg
1
Act
70 of 1979
2
Engelbrecht
and Another NNO v Senwes Ltd 2007(3) SA 29 (SCA)
3
Mansell
v Mansell 1953(3) SA 716 (W) at 712 (B)
4
2002
(2) SA 648
(D)
5
2001
(2) SA 306
(D)
6
1986
(1) SA 238
(A) @248 F-G
7
Tuckers
Land Development Corporation (Pty) Ltd v Loots 1981 (4) S 260 T @
263 G-H
Nees and Korving v
Louters
1950 (4) SA 300
(N) @ 302 C
8
Ruto
Flour Mills (Pty) Ltd v Moriates 1957 (3) SA 113 (T)@ 1176 G-H
9
Act
65 of 1969
10
2007
(1) SA
111
(SCA)
11
1978
(1) SA828 A