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[2011] ZAFSHC 157
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Rohde v Rohde and Others (4966/09) [2011] ZAFSHC 157 (15 September 2011)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Application No: 4966/09
In
the matter between:-
ELIZABETH
ANTOINETTE ROHDE
….....................................
Applicant
and
HELLMUTH ROBERT
ROHDE
…....................................
1
st
Respondent
HELLMUTH ROBERT
ROHDE N.O.
…..........................
2
nd
Respondent
ELIZABETH CATHARINA
VAN DER LINDE N.O.
…......
3
rd
Respondent
THE REGISTRAR OF
DEEDS, BLOEMFONTEIN
…......
4
th
Respondent
_____________________________________________________
HEARD ON:
21 APRIL 2011
_____________________________________________________
DELIVERED ON:
15
SEPTEMBER 2011
KUBUSHI, AJ
INTRODUCTION
[1] This is an
application for the committal of the first respondent for contempt of
court for failing to comply with the terms
of a Deed of Settlement
which was made an order of the Court. The applicant also sought
certain orders compelling the first to
third respondents (the
respondents), the first respondent in his personal capacity and the
others in their respective capacities
as trustees of the Heardow
Eiendoms Trust (the Trust), to comply with certain terms of the court
order.
[2] The respondents are
opposing the application and have raised a plethora of defences and
in particular three points
in limine
on the procedure and one
point
in limine
on the substantive issues which I intend to
deal with before I consider the application.
[3] It needs to be stated
that the fourth respondent did not oppose the application and no
order is to be made against it as an
order was prayed for against it
only if it opposed the matter.
FACTUAL BACKGROUND
[4] The facts of the case
are that applicant and first respondent were married to each other
until on the 27 March 2007 when the
marriage was dissolved. A Deed of
Settlement (the settlement) regulating amongst other things their
proprietary aspects of the
divorce was concluded between them. The
settlement was made an order of the court. This is the order with
which the applicant alleged
the respondents failed to comply and
sought to have first respondent committed to prison for contempt and
the other respondents
ordered to comply with paragraph 5 of the
settlement.
[5] The salient terms of
the settlement which it was alleged the respondents failed to comply
with are:
“
1.
Ad
para 1
:
Verweerder betaal aan die eiseres die kapitale bedrag van R1 500 000
soos volg:
R600 000 nie later as 31 Julie 2008;
R400 000 nie later as 31 Julie 2009;
R250 000 nie later as 31 Julie 2010;
R250 000 nie later as 31 Julie 2011.
Ad para 4
: Eiseres sal
geregtig wees op 50% van die Verweerder se annuïteite vermeld
in die bylaag hierby aangeheg, gemerk “A”
soos op datum
van egskeiding en Verweerder sal toesien dat die nodige aantekeninge
in die betrokke maatskappye se boeke gemaak
word.
Ad para 5
: As sekuriteit vir
die betaling van die kapitale bedrag vermeld in paragraaf 1 hierbo,
sal ‘n tweede verband oor die plase
tans geregistreer in naam
van die HEARDOW EIENDOMS TRUST, uitgesluit die plaas HOPE wat reeds
verkoop is, ten gunste van Eiseres
geregistreer word nie later as op
31 Julie 2008 nie, met dien verstande dat die huidige verbande oor
voormelde twee plase gekonsolideer
sal word in een eerste verband
ten gunste van ‘n finansiële instelling wat nie die
bedrag van R2 600 000 sal oorskry
nie.
Ad para 9
: Indien die
Verweerder sou versuim om enige van die betalings vermeld in
paragraaf 1 hierbo stiptelik te maak, sal die volle
kapitale bedrag
of balans daarvan opeisbaar wees indien Verweerder nie binne dertig
dae nadat skriftelike kennisgewing gerig
is enige gebrekkige of
nie-stiptelike betaling aansuiwer nie.
Ad para 11
: Eiseres bedank
hiermee as trustee van die DANKBAAR LANDGOED TRUST en die HEARDOW
EIENDOMS TRUST en doen onherroeplik afstand
van haar regte as
trustbegunstigde in voormelde trusts en stem toe dat die Trustaktes
dienooreenkomstig gewysig mag word en/of
enige dokumente wat vereis
mag word te onderteken.”
[6] At the time of the
divorce the applicant and the respondents were trustees of the
Heardow Eiendoms Trust, registration number
IT1313/2001. The
applicant withdrew as a trustee of this trust as per paragraph 11 of
the settlement.
[7] The first respondent
did not pay the first instalment of R600 000 on the 31 July 2008 as
per the settlement. The applicant sent
him the thirty days notice as
required by paragraph 9 of the settlement on the 6 August 2008 and
the first respondent paid this
amount on the 12 September 2008. The
first respondent was to pay a further amount of R400 000 on 31 July
2009 but he paid R250
000 instead. At the time the applicant lodged
this application the first respondent was indebted to her in the
amount of R650 000.
[8] In May 2010 the
trustees of the Heardow Eiendoms Trust sold a portion, portion 9, of
the farm Retreat 327 Ladybrand, which formed
part of the property on
which a mortgage bond was to be registered in terms of the
settlement. This portion was sold with the consent
of the applicant
on condition that the applicant was to be paid the amount owing to
her from the proceeds of the sale. The applicant
was paid only R200
000 from the said proceeds. At the time of the hearing of this
application an amount of R450 000 was still outstanding,
being R200
000 which was payable on the 31 July 2010 and a further R250 000
which was payable on the 31 July 2011. These amounts
were exclusive
of the interest of the 15.5% per annum payable thereon. According to
the applicant the first respondent was in contempt
of court for
failure to comply with this term of the settlement.
[9] At the time of
lodging this application the mortgage bond required to be registered
in terms of paragraph 5 of the settlement
had not been registered.
The applicant alleged that the first respondent in his personal
capacity was as a result in contempt of
the court order and that the
other respondents in their capacities as trustees of the Trust should
be ordered to comply with this
term of the settlement.
[10] On the 5 February
2009 the applicant was granted a further court order as
per
paragraph 4 wherein the insurance companies administering the
annuity funds of the first respondent were ordered to immediately pay
to the applicant the amount due to her from the proceeds of the
annuity. The amount paid by the insurance companies was R63 018,
81.
The applicant alleged that the first respondent failed to act
promptly to inform the insurance companies to pay out the annuity
and
as a result the policy lost value from the date of the divorce to the
date of payment, and that the first respondent was liable
for the
shortfall.
POINTS
IN LIMINE
ON PROCEDURE
[11] The respondents
raised three points
in limine
that they left in the discretion
of the court to decide. The points raised were the following: the
manner in which the papers were
paginated; the filing of the
supplementary notice of motion and supplementary affidavit without
leave of the court; and the failure
to provide reasons for the
condonation of the late filing of the answering affidavit.
PAGINATION OF THE
PLEADINGS
[12] According to the
respondents’ counsel the papers were paginated in a peculiar
fashion in that two indexes were filed.
The opposing papers to the
main application were collated under the supplementary index and this
created an impression that the
replying affidavits were the opposing
papers to the main application. He contended that Rule 62 (4) of the
Uniform Rules of Court,
placed a burden on the Plaintiff to assist
the court but in this case the papers were confusing and of no
assistance to the court.
He raised this point only to bring it to the
attention of the court and was not requesting a postponement.
[13] The applicant’s
counsel in response submitted that it was not the applicant’s
intention to confuse the court but
that the pleadings were paginated
in that way because one set of the replying affidavits, there being
two sets of replying affidavits,
was misplaced and when it was found
an extra bundle had to be prepared.
[14] Save for
acknowledging that pagination of the pleadings was indeed confusing
and that they were in general of no assistance
to me, I found it not
necessary to deal with this aspect any further.
SUPPLEMENTARY
NOTICE OF MOTION AND SUPPLEMENTARY AFFIDAVIT
[15] The respondents
filed their replying affidavit on the 4 November 2009. And on the 20
July 2010, the applicant, instead of filing
an answering affidavit,
filed a ‘supplementary notice of motion’. The
supplementary notice of motion read as follows:
“
GELIEWE
KENNIS TE NEEM dat the Applikant van voorneme is om by die aanhoor
van hierdie aansoek as verdere en/of alternatiewe regshulp
tot die
aanvanklike Kennisgewing van Mosie, aansoek te doen tot die volgende
aanvullende bevele:
Dat dit verklaar word die Dankbaar
Landgoed Trust en die Heardow Eiendoms Trust
alter ego
’s
van Eerste Respondent is;
Dat dit verder verklaar word dat die
Heardow Eiendoms Trust gevolglik n party was tot die Akte van
Dading aangegaan tussen die
Applikant en die Eerste Respondent in
saak nr. 541/2006 welke Akte van Dading n bevel van hierdie hof
gemaak is op 27 Maart
2008.
...
GELIEWE KENNIS TE NEEM dat die
Applikant, bykomstig tot die funderende verklaring reeds afgelewer,
sal steun op die aanvullende
funderende verklaring hierby aangeheg
tesame met die aanhangsels daartoe.”
[16] Attached to the
supplementary notice of motion was a ‘supplementary affidavit’.
This supplementary affidavit purported,
on the reading thereof, to be
an affidavit in support of the supplementary notice of motion.
[17] On the 20 August
2010 the respondents filed a replying affidavit wherein they opposed
the supplementary notice of motion. It
is in this replying affidavit
that the respondents raised some of the points
in limine
on
procedure, namely, that the applicant had failed to follow the proper
procedure set out in Rule 28 of the Uniform Rules of Court
to amend
the notice of motion and that the applicant filed a supplementary
affidavit without the prior consent of the court. According
to the
respondents these pleadings, the supplementary notice of motion and
the supplementary affidavit, were not properly before
the court and
must be regarded as
pro non scripto
.
[18] The other points
in
limine,
namely, the one on the pagination of documents and the
one on the failure to provide reasons for the condonation were raised
in
the respondents’ heads of argument.
[19] Almost a year later
after the filing of the main application, on the 26 January 2011, the
applicant filed her answering affidavit.
This was a reply to both the
respondents’ replying affidavits to the notice of motion and to
the supplementary notice of
motion. In her response, the applicant
undertook to address these points at the hearing of the application.
On the 29 March 2011
the applicant filed an application for
condonation for the late filing of her answering affidavit. This
application was set down
to be heard on the same day as the hearing
of this application.
ARGUMENTS
[20] In their heads of
argument respondents submitted that after filing their replying
affidavit, applicant apparently realised
that there were no merits in
the notice of motion and filed a supplementary notice of motion in
order to rectify the notice of
motion. According to the respondents,
a proper procedure dealing with amendments of this nature, which the
applicant ought to have
followed to amend the notice of motion, was
in terms of rule 28 of the Uniform Rules of Court. The respondents
contended that,
the applicant was not entitled under the “further
and/or alternative relief” prayer to circumvent the rules of
court
to obtain an order sought in paragraphs 11.1 and 11.2 of the
supplementary notice of motion. In this respect I was referred to a
decision in the
JOHANNESBURG CITY COUNCIL v BRUMA 32 (PTY) LTD
1984 (4) 87 TPD case at 92 – 93.
[21] In respect of the
supplementary affidavit the respondents contended that the applicant
did not follow the proper procedure
as well. A proper procedure was
provided for in sub-rule 6 (5) of the Uniform Rules of Court. They
maintained that in terms of
that sub-rule only the court has
discretion to permit the filing of further affidavits and that
a
fortiori
no litigant may take it upon himself or herself to
simply file further affidavits without first having obtained leave of
the court.
Their counsel contended that no leave was sought or was
being sought to have the supplementary notice of motion amended or
the
supplementary affidavit admitted by the court. They prayed that
the supplementary notice of motion and the supplementary affidavit
be
regarded as
pro non scripto
and be scrapped from the record.
[22] The applicant’s
counsel contended that the amendment to the notice of motion was in
order and that the court must grant
it. He argued that the
supplementary notice of motion was delivered to the respondents as
long ago as June 2009 and that there
was enough time for the
respondents to oppose it, but they chose not to. He referred me to
paragraph 5 (the second paragraph 5
– there are two paragraph
5s) of the applicant’s answering affidavit which stated as
follows:
“
In hierdie
vooropstelling word die Agbare Hof eerbiediglik versoek om hierdie
aanvullende Kennisgewing van Mosie en aanvullende
funderende
verklaring te aanvaar en sal ook vir n bevel ingevolge hiervan word.”
[23] This he pointed out
was the paragraph which the applicant used to apply for the admission
of the supplementary notice of motion
and the supplementary affidavit
by the court. He prayed that the evidence should not be excluded and
that the court should deal
with the notice in view of the merits of
the case.
[24] Of concern to me at
this stage was whether the supplementary notice of motion and the
supplementary affidavit had been filed
properly or not. I am of the
view that referring to this pleading as a ‘supplementary notice
of motion and the supplementary
was an unfortunate choice of words by
the applicant. The rules do not provide for a supplementary notice of
motion. My understanding
of this notice was that the applicant wanted
to amend paragraph 8 of the notice of motion. By filling the
supplementary notice
of motion, the intention was to seek an
additional order that would ten amend paragraph 8.
[25] In my view, the
supplementary affidavit must not be dealt with separately from the
supplementary notice of motion. Like I said
earlier, the choice of
words by the applicant was unfortunate. She should have referred to
the affidavit as a supporting affidavit
because it was filed in
support of the supplementary notice of motion. Both my above views
are supported by paragraph 5 of the
applicant’s supplementary
affidavit quoted in paragraph 21 supra. This being so, I conclude
therefore that there was no need
for the applicant to approach the
court before she could file this affidavit.
[26] As a result of this
amendment paragraph 8 would read as follows:
“
1. that it
be ordered that the Dankbaar Landgoed Trust and the Heardow Eiendoms
Trust are alter ego’s of the First respondent.
2. that it further be ordered that the
Heardow Eiendoms Trust is a party to the Deed of Settlement entered
into between the applicant
and the first respondent in case no
541/2006 which was made an order of the court on the 27 March 2008.”
[27] The general approach
to an amendment of a notice of motion is the same as to a summons or
pleadings in an action. The procedure
for the amendment of pleadings
is provided in rule 28 of the Uniform Rules of Court and it provides
as follows:
“
(1) Any
party desiring to amend any pleading or document other than a sworn
statement, filed in connection with any proceedings,
shall notify all
other parties of his/her intention to amend and shall furnish
particulars of the amendment.
(2) the notice referred to in subrule
(1) shall state that unless written objection to the proposed
amendment is delivered within
10 days of delivery of the notice, the
amendment will be effected.
(3) an objection to the proposed
amendment shall clearly and concisely state the grounds upon which
the objection is founded.
(4) …”
THE APPLICATION OF
THE LAW TO THE FACTS
[28] I agree with the
conclusion reached by the court in the
JOHANNESBURG CITY
COUNCIL
decision
supra
, the prayer for alternative
relief has in modern practice become superfluous. In my view a party
who seeks relief must set out
clearly and precisely the order he or
she seeks from the court in his or her pleadings for the other party
to know what case he
or she has to meet. Based on this reasoning my
view is that the applicant, as argued by the respondents, ought to
have followed
the rule 28 procedure in order to have the notice of
motion amended.
[29] The rule 28
procedure requires a party intending to amend a pleading to notify
the other party of its intention to do so and
where there is an
objection he or she may then lodge an application for leave to amend.
In
casu
the applicant approached the court for an amendment
without first notifying the respondents of her intention to do so and
also
to await their response. This, therefore, was an irregular step
that was followed by the applicant and the normal route would have
been for the respondents to proceed in terms of rule 30 of the
Uniform Rules of Court to have this process declared irregular by
the
court. This was not done. Rule 30 (1) provides as follows:
“
A party to a
cause in which an irregular step has been taken by any other party
may apply to court to set it aside.”
[30] The respondents in
this instance, did not follow this rule 30 (1) procedure and chose
instead to respond to the notice by replying
to the supplementary
notice of motion and the supplementary affidavit. In taking a further
step in the cause they abandoned their
right to have the irregular
procedure followed by the applicant set aside by this court. Sub-rule
(2) of rule 30 provides that
an application may be made if the
applicant (respondents in this instance) has not himself or herself
taken a further step in the
cause with the knowledge of the
irregularity. The respondents in this instance knew of the
irregularity. They referred to the irregularity
in their replying
affidavit. To my mind, since the respondent abandoned this process
the issue whether the applicant followed a
proper procedure or not
has become moot. My conclusion is that the amendment to the notice of
motion should be allowed.
CONDONATION FOR THE
LATE FILING OF THE ANSWERING AFFIDAVIT
[31] On the 4 November
2009, more than a year later, the applicant filed her answering
affidavit. And on the 29 March 2011, she
filed an application whereby
she sought condonation for the late filing of the answering
affidavit. Attached to the application
was a supporting affidavit
deposed to by Thomas Walter Rothwell Hepple who appeared from the
record to be the attorney for the
applicant. The affidavit did not
set out the reasons why the applicant was filing her answering
affidavit out of time. It only
stated that the respondents had been
notified of the applicant’s intention to file the application
and that the respondents
had no objection if she did so.
Correspondence was attached to the affidavit as proof of this
interaction between the respective
attorneys. The respondents did not
oppose the application but their counsel at the hearing of the
matter, argued that condonation
was an indulgence and that the
application thereto must fully set out the reasons, step by step, why
the answering affidavit was
not filed in time.
THE APPLICABLE LAW
[32] The procedure for
the application for condonation is set out in rule 27 (1) of the
Uniform Rules of Court and it provides that:
“
In the
absence of agreement between the parties, the court may on
application and on good cause shown, make an order extending or
abridging any time prescribed by these rule…”
THE APPLICATION OF
THE LAW TO THE FACTS
[33] In this instance the
parties have, in my opinion, reached an agreement. My understanding
of this sub-rule is that where the
parties have reached an agreement
it is not necessary for the party seeking to file an affidavit out of
time to approach the court
for condonation. My view is that because
the parties, in this instance, had reached an agreement it was not
necessary for the applicant
to apply for condonation.
POINTS
IN LIMINE
ON THE SUBSTANTIVE ISSUES
[34] I now turn to
determine a further point that was raised by the respondents
in
limine
on the substantive issues, namely, that the order was
ad
pecuniam solvendam
and can therefore not be enforced by a
committal for contempt of court.
ARGUMENTS
[35] The contempt that
the applicant was complaining about emanated from the respondent’s
failure to comply with the terms
of settlement as stated in paragraph
5 of this judgment, in that:
1. the first respondent did not comply
with paragraph 1 read with paragraph of the settlement in that he did
not pay the amounts
due on the date set out in the settlement and
that with the advise of his new attorney he will not be paying the
outstanding amount
of R450 000.
2. the respondents are in contempt for
failing to register a mortgage bond over the Heardow Eiendoms Trust
as required by paragraph
5 of the settlement.
[36] The respondents
contended that for an order to be enforced by a committal for
contempt of court it must be
ad factum praestandum
. The
respondents must not be in contempt for payment of money but the
order must be to do or not to do a specific thing.
[37] In counter argument
the applicant’s counsel stated that the contempt in this
instance, was because of the conduct of
the first respondent and not
because the first respondent had not paid. The conduct the applicant
was complaining about was that
the first respondent had twice
tendered to pay but failed to do so. This was an order
ad factum
praestandum,
he said. He argued that the first respondent was in
fact in a position to pay as ordered by the court, and that his
failure to do
so was deliberate. He was able to pay through the Trust
and in fact he had done so before, he stopped paying only because his
attorney
advised him not to pay. He prayed for an order for committal
of the first respondent to prison based on his contempt of an order
ad factum praestandum
.
THE APPLICABLE LAW
[38] It is now
established law that an order must be one
ad factum praestandum
before it can be enforced by committal for contempt. When an order is
for payment of money
simpliciter
(
ad pecuniam solvendam
)
it cannot be enforced by committal for contempt of court and the
remedy is execution. It is also trite that the issues relating
to the
division of assets in a divorce action, the settlement of the
parties’ property rights and incidental matters arising
from
the dissolution of a marriage do not constitute an order
ad factum
praestandum
.
HOFMEYER v FOURIE, B.J.B.S CONTRACTORS (PTY)
LTD v LATEGAN
1975 (2) SA 590
(CPD) at 599E
;
JIYAYA
v MEC FOR WELFARE, EASTERN CAPE
2004 (2) SA 611
(SCA).
APPLICATION OF THE
LAW TO THE FACTS
[39] My view is that at
the time the deed of settlement was made an order of court, some of
the orders were
ad
factum praestandum
and others were
ad pecuniam solvendam.
Following the rationale used in the
THUTA v THUTA
2008 (3) SA 494
(TKH) judgment I first
had to determine which of the terms of the court order as
incorporated in the settlement, could be enforced
as prayed for by
the applicant.
[40] I dealt with each
salient term of the settlement as set out in paragraph 5
supra
:
40.1 My view is that
paragraph 1 read with paragraph
9, was an order
ad
pecuniam solvendam.
This was an order for payment of money
simpliciter.
The fact that the settlement was for payment in
instalments and that it was made an order of the court did not
convert it to an
order
ad factum praestandum
. This was an
order in respect of the issues relating to the division of assets in
a divorce action and/or the settlement of the
parties’ property
rights and could therefore not be regarded as an order
ad factum
praestandum
.
The issue in this
instance was similar to the one raised in the
HOFMEYER v
FOURIE, B.J.B.S CONTRACTORS (PTY) LTD v LATEGAN
1975 (2) SA
590
(CPD) judgment. And at 591D thereof the court stated as follows:
“
The issue
raised on the papers in this case is whether the court has the power
to imprison a judgment debtor for contempt of Court
by reason of a
failure, when able to do so, to pay a judgment debt of a commercial
nature which the court has ordered him to pay
in specified
instalments, on specified dates, at a specified place, to a specified
person.”
The court held in that
judgment that the Supreme Court had no such power. The court
concluded also that the issues relating to the
division of assets in
a divorce action, the settlement of the parties’ property
rights and incidental matters arising from
the dissolution of a
marriage do not constitute an order
ad factum praestandum
even
if they are made an order of the court.
40.2 Paragraph 5 of the
settlement, in my view, is an order
ad factum praestandum
.
This was an order directing the first respondent to register a
mortgage bond over the Heardow Eiendom Trust. In an order
ad
factum praestandum
a person is ordered to do or not to do
something.
40.3 As regards paragraph
4, the applicant was granted another order of court on the 5 February
2010. The said order read as follows:
“
Na oorweging
van die Kennisgewing van Mosie en die ander dokumente wat ingedien is
en na aanhoor van die Advokaat vir Applikant
WORD DIT GELAS DAT:
Die Addendum tot die Akte van Dading,
onderskeidelik gedateer 23 en 24 Januarie 2009 en wat as aanhangsel
“A” tot
aansoekstukke aangeheg is word ‘n bevel
van die hof gemaak.
Die Sentrale
Uitredingsannuïteitsfonds en Sanlam as administrateur van die
Fonds soos vervat in klousule 4.1 tot 4.3 van
aanhangsel “A”
en Lifestyle Uitredingsannuïteitsfonds en Liberty Life as
administrateur van die Fonds soos vervat
in klousule 4.4 tot 4.6 van
aanhangsel “A”, hiermee die uitbetaling so gou doenlik
te maak aan die applikante te
rekening: Heppie Attorneys Inc, Eerste
Nasionale Bank, Trust Rekening: 62056116778, Takkode: 261550. tak
Centurion.
OP LAS VAN DIE HOF”
[41] My view is that when
a new court order was granted it amended paragraph 4 of the
settlement and the result was that nothing
was now expected of the
first respondent. The order was now directed at Sanlam and Liberty
Life, the insurance companies which
administered the annuity funds.
The first respondent can therefore not be held in contempt for
failure to comply with this order.
The amount that applicant alleged
to be outstanding, if at all, was an order for payment of money
simpliciter
(
ad pecuniam solvendam
) and it cannot be
enforced by committal for contempt. The remedy is through execution.
THE TRUST IS NOT A
PARTY TO THE DIVORCE PROCEEDINGS
[42] The only terms of
settlement that I can deal with in this judgment is the one contained
in paragraph 5 of the settlement because
it is an order
ad factum
praestardum. The applicant prayed for an order compelling the
respondents, in their respective capacities, to immediately upon
service
of the notice on them to take reasonable steps to comply with
the terms of this paragraph, which shall include the signing of all
the documentation attached to the notice of motion as Annexure
“EAR13”, required for the registration of the mortgage
bond.
THE ARGUMENT
[43] The applicant’s
counsel contended that the first respondent failed to register the
bond as
per
the settlement and that at the time of the hearing
of this application he was eight months in breach of this term of the
settlement.
He argued that the second and third respondents as
trustees of the Trust not only knew of the deal but were prepared to
proceed
with it. He further contended that the first respondent had
at all material times acted as the
alter ego
of the Trust and
had in the past not required the approval of the other trustees to
conclude business transactions for the Trust.
The issue of the
alter
ego
was raised during the divorce proceedings but was not
adjudicated on because there was settlement. The first respondent
bound the
other trustees when he entered into the settlement and
promised to register a bond over the Trust, he argued. He referred me
in
this respect to the
BADENHORST v BADENHORST
2006 (2)
SA 255
(SCA) judgment.
[44]
The respondents on the other hand contended that the Trust did not
form part of the divorce proceedings. Their counsel conceded
that the
first respondent did not dispute the amounts outstanding or the court
order against him. He also conceded that the other
trustees were
initially not against the said registration but were advised by their
new attorneys that the agreement by the first
respondent was in
contravention of the provisions of the Deed of Trust of the Trust. He
argued that for the Trust to have been
part of the settlement all the
trustees should have signed on its behalf. And because they did not
sign, the Trust was not bound.
He contended that a trust can only be
bound if all the trustees consented in writing. He went further to
say that a court has already
decided on these issues and that this
court cannot adjudicate the issues afresh. The settlement was final
and there can be no further
claims and the applicant can also not at
this late stage raise the issue of the
alter
ego
. If the applicant wanted the Trust
to be part of the divorce proceedings, she should have joined the
trustees (or the Trust) as
parties to those proceedings. He opined
that the issue of the
alter ego
was indeed canvassed at the divorce proceedings
but was never decided and it cannot now be decided by this court. He
referred me
in this respect to the
LAND
AND AGRICULTURAL BANK OF SOUTH AFRICA v PARKER AND OTHERS
2005
(2) SA 77
(SCA) at 92 -93 and an unreported case of the Eastern Cape,
Grahamstown,
M J FRONEMAN v A
FRONEMAN AND OTHERS
(3074/2009) (delivered on 10
December 2009)
decisions
.
[45] The following issues
are common cause between the parties or are not in dispute: that this
application originated from divorce
proceedings between the applicant
(the plaintiff in the divorce proceedings) and the first respondent
(the defendant in the divorce
proceedings); that the Trust was not a
party to the divorce proceedings nor was it joined as a party prior
to the settlement being
made an order of court; that the settlement
was signed by the applicant and the first respondent in their
capacities as such; the
applicant desired to include the second and
third respondents in complying with the settlement; that the issue of
the
alter ego
was canvassed at the divorce proceedings but was
never decided; that the settlement envisaged the Trust to be a party
to the settlement,
this was indicated by the following terms of the
settlement:
45.1 that the applicant
was to withdraw as a trustee of the Trust;
45.2 that as security for
the amount owed by the first respondent to the applicant, a mortgage
bond be registered over the Trust.
ISSUE TO BE DECIDED
[46] I now have to decide
whether or not the Trust and/or the trustees can be bound by a court
order granted against the first respondent
in his personal capacity
and in a matter in which the Trust and/or the trustees were not cited
as parties to that action.
APPLICABLE LAW
[47]
lt is a fundamental rule of trust law, that in the absence of a
contrary provision in the trust deed the trustees must act
jointly if
the trust estate is to be bound by their acts. A court dealing with a
divorce action is entitled, in its discretion,
to incorporate the
terms of the settlement in a court order, it cannot ,however, thereby
bind a party who was not a party to the
action before it in terms of
such an order. See
NIEUWOUDT
AND ANOTHER NNO v VRYSTAAT MIELIES (EDMS) BPK,
2004
(3) SA 486
(SCA).
[48] The applicant
contended that the two respondents can be bound since they were aware
of the agreement between the parties and
they had the desired
intention to bind the Trust. He further argued that the first
respondent acted as the
alter ego
of the Trust in that during
the whole existence of the marriage between the applicant and the
first respondent both the Trust’s
property and business were
conducted by the first respondent for his personal benefit –
without the decision and handling
by the other trustees. Her counsel
referred me to two experts reports compiled during the divorce
proceedings. He alleged that
the findings of those reports confirmed
that the Trust was indeed the
alter ego
of the first
respondent. It was on the basis of these findings that the settlement
was entered into, he contended.
THE APPLICATION OF
THE LAW TO THE FACTS
[49] I do not agree with
the applicant’s argument. The court order issued in terms of
the divorce proceedings could not bind
the Trust. The Trust was not
cited as a party to the proceedings nor was it joined as such. My
view is that it could not have been
the courts intentions that by
incorporating the settlement into the order of the court to bind
parties who were not parties to
the action before it. The terms the
applicant relied on were not captured in the settlement. The
applicant’s counsel relied
in his argument on the Badenhorst
judgment
supra
to which he had referred me to. This decision,
in my opinion, was of no assistance to the applicant in the present
circumstances.
In that judgment, the appellant sought, by way of a
counterclaim instituted during the course of divorce proceedings
initiated
by the respondent, a redistribution order in terms of
section 7
(3) of the
Divorce Act 70 of 1979
directing the respondent
to transfer half his estate to her. Incorporated in the appellant’s
prayer was a claim that the
assets of the Jubilee Trust and the farm
‘Jubileeskraal’ be regarded as assets in the respondent’s
estate. The
court at 260I – J and 261A held that:
“
The mere
fact that the assets vested in the trustees and did not form part of
the respondent’s estate does not
per
se
exclude them from consideration when determining what must be taken
into consideration when determining what must be taken into
account
when making a redistribution order… To succeed in a claim that
trust assets be included in the estate of one of
the parties to a
marriage there needs to be evidence that such party controlled the
trust and but for the trust would have acquired
and owned the assets
in his own name. Control must be de facto and not necessarily
de
iure
.”
[50] I do agree with the
Badenhorst judgment. But the facts of that case are distinguishable
from the case I am dealing with presently
in that in this instance,
the matter had already been dealt with and finalised whereas in the
Badenhorst judgment the case had
not been finalised. The issue of the
alter ego,
as submitted by both parties was canvassed during
the divorce proceedings but was never decided on. The applicant
argued that it
was because the parties signed the settlement. It
however remains that this issue was never decided by the court at the
divorce
proceedings and that court granted an order without having
decided on the issue.
[51] The
BRUNETTE v
BRUNETTE AND ANOTHER NO
2009 (5) SA 81
(SE) judgment was
another case that was decided along the same reasoning. In that case,
in a divorce action, the applicant intended
to amend her particulars
of claim so as to include a prayer that the assets of two
inter
vivos
trusts be regarded as the assets of two businesses
conducted in partnership by the parties. It was alleged by the
applicant, in
that case, that during the conduct of the businesses no
distinction was made between the partnership assets and those
belonging
to the trusts, and that it would be proper for the
partnership assets and those belonging to the trusts to be dealt with
as partnership
assets in any redistribution order which the trial
court might make. The applicant then sought the joinder of the first
respondent
in his representative capacity as trustee of the trusts
(she being the other) as a party to the divorce action. And on appeal
the
court at 84A – B held that:
“
If the
applicant’s contentions were correct then the manner in which
the trusts had been administered in the past became highly
relevant
in determining whether or not they should be regarded as constituting
partnership assets to be taken into account in any
distribution order
in terms of
section 7
(3) of the
Divorce Act. Any
decision thereanent
can only properly be made by the trial court. At this juncture it is
entirely permissible for the applicant
to rely on the allegations
which, if proved at the trial, would entitle her to succeed.”
[52] And in
M J
FRONEMAN v A FRONEMAN AND OTHERS
decision
supra
, the
applicant applied for an order for the committal of the first and
second respondents for contempt of court for failing to
obey the
terms of a divorce settlement agreement which was made an order of
court and also sought certain directory orders against
the
respondents. The court held that in such circumstances enforcement by
way of committal for contempt whether or not including
a further
order to comply was not possible
[53] It is evidently
clear from the above quoted judgments which I was referred to by both
counsel that for the applicant to succeed
in this instance, the issue
must have been canvassed and proved during the divorce proceedings
and/or the respondents must have
been cited or joined as parties to
that action. This was not done and I hold the same view that they
cannot now be expected to
comply with the settlement.
[54] As the court order
was granted against the first respondent in his personal capacity, he
is in contempt for failure to comply
with this term of the
settlement. However, can it be said that he deliberately failed to
comply?
[55]
The requisites to establish a contempt of court are: the order, the
service or notice, non-compliance and wilfulness and
mala
fide
. The test
is whether or not
the non-compliance was committed ‘deliberately (wilfully) and
mala fide
’. The enforcer has to prove the three
requisites beyond reasonable doubt and the non-enforcer is to bear
the evidential burden
in relation to wilfulness and
mala fides
.
The non-complier is expected to furnish evidence raising a reasonable
doubt whether non-compliance was wilful and
mala fide
, if he
or she fails to do so the contempt will be established beyond
reasonable doubt.
See
CONSOLIDATED
FISH (PTY) LTD v ZIVE AND OTHERS
1968
(2) SA 517
(CPD) at 522B – C;
FAKIE
NO NO v CCII SYSTEMS (PTY) LTD
[2006] ZASCA 52
;
2006
(4) SA 326
(SCA) at 344H – J and 345A and
UNCEDO
TAXI SERVICE ASSOCIATION v MANINJWA
1998 (3) SA 417
(E)
425G-426C.
[56] Based on the above
summations, my opinion is that it cannot be said that the first
respondent deliberately failed to comply
with paragraph 5 of the
settlement. The settlement was doomed for failure from the beginning
there was no way in which the first
respondent was going to be able
to comply with this term of the settlement without the Trust and/or
the trustees being party to
the settlement.
COSTS
[57] The applicant prayed
for a cost order on an attorney and client scale against the
respondents because of the contemptuous manner
in which they failed
to comply with the court order. The respondents on the other hand
prayed for a special order against the applicant,
particularly in
favour of the Trust as the applicant was aware that the Trust was not
a party to the divorce proceedings.
[58] My view is that
because of the
laissez faire
attitude by both parties in the
handling of this matter I am not persuaded that any of them deserves
a special cost order. My view
is that the costs must follow the
event. There is also no cost order against the fourth respondent.
THE ORDER
[59] Accordingly, the
following order is granted:
59.1 the points
in
limine
raised by the respondents on procedure are dismissed.
59.2 the point
in
limine
raised by the respondents on the substantive issues is
upheld.
59.3 the application is
dismissed with costs.
_________________
E. M. KUBUSHI, AJ
On
behalf of the applicant: Adv. N. Davis SC
Instructed by:
Bezuidenhouts Inc.
BLOEMFONTEIN
On
behalf of the respondent: Adv. S. J. Reinders
Instructed
by:
Honey
Attorneys
BLOEMFONTEIN
/EB