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[2011] ZAECELLC 14
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Potelwa v Potelwa (EL 125/2010, ECD 325/2010) [2011] ZAECELLC 14 (15 March 2011)
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(EAST
LONDON CIRCUIT - LOCAL DIVISION)
CASE
NO: EL 125/2010
CASE
NO. ECD 325/2010
In
the matter between:
PRINCESS
VUYOKAZI POTELWA
(born
MANONA)
…........................................................................................
APPLICANT
and
ROY KHWEZI POTELWA
….....................................................................
RESPONDENT
REASONS FOR JUDGMENT
MAGEZA AJ
This is a second Application for
relief in terms of Rule 43 of the Uniform Rules of Court. The
Applicant seeks an Order that Respondent
make a contribution to costs
in the sum of R630 812.00 towards the Applicant’s costs of
the divorce proceedings between
the parties. These are legal costs
and costs for asset verification, assessment and valuation.
APPLICANT’S CASE:
[1] Applicant, Defendant in the main
action and Respondent were married at Butterworth in June 1984 in
terms of the Marriage Act
of Transkei No. 21 of 1978 (the Transkei
Act). This Act excludes community of property and this is not in
dispute. The Act has
since been repealed.
[2] In August 2008 the Respondent, as
Plaintiff in the main action, instituted an action against Applicant,
defendant therein, for
a decree of divorce. He tendered maintenance
for the 3 (three) minor children as well as reasonable non private
school fees,
expenses and provision for medical aid. No tender for
maintenance is made in the action in respect of the Applicant and she
has
consequently filed a counterclaim for maintenance in terms of s
46 of the Transkei Act for an order that Respondent provides her
with
accommodation, a motor vehicle, personal maintenance and medical
expenses. According to Applicant, Respondent disputes her
entitlement
to these and the issues ‘remain hotly contested’
(Applicant’s averment).
[3] Applicant lives with the children
in Vincent, East London whilst Respondent lives in Idutywa where he
practices as a medical
practitioner and businessman. She is
unemployed, has no income and is dependent on the Respondent.
Following their marriage, she
stopped teaching and assisted the
Respondent in setting up and managing the dry cleaning businesses set
up by Respondent.
[4] She first commenced Rule 43
proceedings on 9 November 2008, before Chetty J and on that date an
Order that the Respondent,
inter alia,
make a contribution
towards costs in the sum of R25 000.00 was made. Following upon
the granting of the aforesaid Order, the
Respondent failed to comply
with the Order necessitating the launch of an Application for the
committal of the Respondent to jail
for Contempt of Court. The
Application for Contempt was commenced in March 2009, Respondent
opposes the same and it has since then
been postponed on at least 7
(seven) occasions at Respondent’s instance and request.
[5] In the interim, the divorce trial
was set down for hearing on the 25
th
of June 2009 and on
this day, settlement negotiations were held for the first time and
these lasted all of two days. At these settlement
negotiations
Respondent, as Plaintiff, was represented by senior counsel.
Applicant avers, ‘a comprehensive deed of settlement
was
drafted which at the eleventh hour, the Respondent refused to sign,
despite indicating agreement in principle throughout the
days of
negotiation’. At present Applicant believes that all settlement
negotiations have been exhausted and it is, in her
view, given the
Respondent’s attitude, unavoidable that the matter will
regrettably proceed to trial.
[6] In order to support her claim for
maintenance in the main action, the quantum thereof and Respondent’s
ability to provide
the same, Applicant believes that she requires
valuations of the numerous properties owned by the Respondent, as
well as valuations
of his businesses, shares, investments and other
assets. According to her, in the earlier Rule 43 Application heard by
Chetty J,
the main defence which the Respondent raised to the costs
of a Sworn Valuator, or expert Accountant was that Respondent argued
the need for such Valuator or Accountant or Forensic Auditor as
premature, with Respondent stating in paragraph 58.2 of his previous
affidavit resisting the contribution towards costs that
“
documentation and valuations will be obtained in the
discovery stages of the trial action and there is no need, at
present, for
unnecessary costs to be incurred as alleged by the
Applicant”
.
[7] Furthermore, Applicant contends
that discovery having now been made in the main action and Respondent
having failed to file
any of these documents and valuations, it is,
self evident from the inadequate discovery affidavit filed by the
Respondent, that
he has not obtained the valuations of any assets
whatsoever. In any event, the discovery stage of the trial has now
dawned, and
she wishes to pursue the valuations as a matter of
urgency.
[8]
The Respondent’s
Assets.
These are:
(i) a well established medical
practice in Idutywa;
(ii) 3 (three) dry cleaning businesses
in Mthatha and Idutywa;
(iii) shares in Idutywa Hotel;
(iv) 2 (two) motor vehicle spare parts
businesses in Mthatha and Idutywa;
(v) shares in a Total garage;
(vi) share portfolio held in JSE
listed companies;
(vii) unit trust and investment
policies held in Liberty, Old Mutual and Sanlam valued conservatively
at R10 000 000.00
(ten million Rand).
In addition, the properties
(residential and commercial) owned by Respondent include the
following:
Erf No.
Description
Estimated Value
76, 257, 324 Dutywa vacant plots R
340 000.00
126, 413 Dutywa dilapidated structures
R 315 000.00
322,
323, etc.
Dutywa & Butt., & Mthatha
Res. Dwellings R12 430 000.00
503 Port St Johns Guest Lodge R
2 800 000.00
27058 Vincent Gardens East London R
3 500 000.00
10283 Vacant site at Bonnie Doon, E L
R 1 500 000.00
1939 Upmarket property in an estate
Fourways Ext 34 Johannesburg
R 4 500 000.00
15366 Office Building Central East
London R10 000 000.00
_____________
TOTAL R35 385 000.00
_____________
[9] Applicant is of the view that
taking into account the immovable properties held by the Respondent,
his movables and other assets,
his estate is conservatively estimated
at R50 000 000.00.
Arising from all the investments,
businesses, rentals and practice, Respondent’s conservative
monthly income is estimated
at R400 000.00 (four hundred
thousand Rand).
[10] Applicant has attached indicative
costs of valuation work that can be done by a reputable
accounting/auditing (KPMG) firm and
this is in the sum of R455 000.00
and a further sum of R50 000.00 in respect of the services of a
forensic investigator.
Applicant has further filed a detailed
legal costs breakdown for trial preparation, consultation with the
use of commensurate counsel
including her attorneys up to and
including the first day of hearing for a total of R98 724.00.
RESPONDENTS CASE.
[11] The gravamen of Respondent’s
reply to Applicant’s claim can be summed up as follows:
11.1 He concedes that on the 25 June
2009 the parties entered into settlement negotiations. These,
according to him, ‘were
scuppered by Applicant’s
excessively extravagant, unjustified and extortionate demands’
paragraph 15 of answering affidavit.
11.2 He states that the present
Application is unnecessary in that the award of Chetty J in November
2008 provides Applicant sufficient
cover to proceed to trial. The
argument from the bar on Respondent’s behalf is that if she did
utilise such funds for the
25 June 2009 trial, then she should have
no need for more contribution to costs. In any event the Respondent,
out of his own goodwill,
tenders an amount of R20 000.00.
11.3 In so far as the valuations
pertaining to his estate, he states at paragraph 37, ‘The
homework referred to by the Applicant
herein is totally unnecessary
and uncalled for since the contents of the estate have absolutely
nothing to do with her, our marriage
being out of community of
property and each of us having a distinct and separate estate’.
[12] Now the starting point in these
matters can be summarized as follows:
This relief (contribution to costs) is
available to a spouse
pendente lite
and is founded on the duty
of support. – See Chamani v Chamani 1979(4) SA 804 (W).
These are costs that are necessary and
as would be adequate for Applicant to prepare for and conduct pending
litigation. –
See Senior v Senior 1999(4) SA 955 (W).
In determining the quantum of the
contribution, the Court will have regard to the circumstances of the
case, the financial ability
of the parties, difficulty of issues
pertinent thereto and the levels at which the manner of litigating is
pitched. In this evaluation,
the court does so bearing in mind that
it has a discretion that it has to exercise judiciously and for sound
reasons.
In Nicholson v Nicholson 1998(1) SA 48
(W), Wunsh J at page 51 I observed, “Whatever the position
may be where spouses
are married in community of property and the
Applicant is claiming access to funds in the joint estate, the
starting point in a
case like this should be the Applicant’s
party and party costs which are subject to adjustment according to
the factors mentioned
in the cases, such as the means of the husband,
the scale upon which he is litigating and the complexity of the
case”.
Further at page 52-B, “I can see
no logical or rational basis for excluding the Applicant’s
attorney’s fees from
the costs to which a contribution must be
made”.
In cases where the Respondent is
litigating through the utilization of the best Counsel the court will
have regard to equality of
arms and means.
[13] In Cary v Cary 1999(3) 615 (C),
Donen AJ, after considering the right to equality enshrined in s 9(1)
of the Constitution of
the Republic of South Africa Act 108 of 1996,
commented at p 621 – D, “By similar reasoning
in this matter,
Applicant is entitled to a contribution towards her
costs which would ensure equality of arms in the divorce action
against her
husband. The Applicant would not be able to present her
case fairly unless she is empowered to investigate Respondent’s
financial
affairs through the forensic accountant appointed by her.
That is, Applicant will not enjoy equal protection unless she is
equally
empowered with ‘the sinews of war’”.
[14] In an unreported Rule 43 judgment
of this Division (Olivier v Olivier – case 1298/04) delivered
by Leach J, (some 6 years
ago) dealing with a contribution to
Applicant’s costs in the proceedings, the Court awarded
Applicant the sum of a R150 000.
It is to be noted that this sum
related only to legal costs. At page 5 para 2 the Court observed,
“Turning to the contribution
towards costs, both parties have
employed senior counsel, which is understandable if one bears in mind
the considerable amount
of money in the matrimonial cake about which
they are fighting. Litigation is an expensive business. It is
impossible to know what
the actual expenses of the parties will be.
When one hears that both sides are hell bent on taking preliminary
issues to the Constitutional
Court, it is clear that lengthy and
protracted litigation lies ahead. Recently, in an opposed divorce
which was not unduly complicated
and which came before me on a review
of taxation, the taxed bill of one side up to and including the first
day of trial (when the
matter settled) exceeded R90 000.00.
Consequently, a substantial contribution would have to be made,
albeit bearing in mind
that a contribution is merely to provide the
“sinews of war” and not payment of all the anticipated
expenses of the
other party. In these circumstances, I was of the
view that, at this stage, a contribution of R150 000.00 was
called for”.
Further at page 6 the learned Judge
went on to say, “While it is so that a contribution towards
costs is often calculated
on the basis that it includes costs up to
and including the first day of trial, where after an application
can be brought
for each succeeding day, I did not attempt to
determine the contribution
in casu
in that way. Instead,
taking into account the fact that the matter would probably run well
beyond the first day, I ordered a contribution
in a large sum towards
what is undoubtedly going to be a substantial fee liability”.
[15] Some 10 (ten) years ago in
Greenspan v Greenspan 2000(2) SA 283 (C), a case much analogous on
the facts with the present, Hlophe
DJP (as he then was) in summing up
at p 290 B – F commented, “The Applicant seeks
an Order that the Respondent
should pay a contribution of R250 000
towards the Applicant’s costs in the divorce action. It is
common cause between
the parties that the Respondent has already paid
about R56 000 as contribution towards the Applicant’s
costs in the
divorce action. The Applicant contends that that is
just not good enough, regard being had,
inter alia,
to complex
factual issues that will arise with regard to the fixed property in
Houghton, coupled with the fact that the Respondent
himself is
conducting litigation on a luxurious scale. It is a fact that the
Respondent’s legal team, save Mr Rogers
,
comes from
Johannesburg. This includes senior counsel and a Johannesburg
Attorney. It is also a fact that the Respondent’s
attitude
throughout has been that his financial circumstances are irrelevant
for purposes of the divorce action. That is obviously
not true, as
the Respondent will soon find out. The Respondent was described by
Lategan J as ‘an enormously wealth man in
any terms …
[who] is worth in the vicinity of R100 million’. This is
not to say the Respondent should be punished
for his wealth. The
Applicant is entitled to litigate on a scale commensurate with the
means of her husband. She is certainly not
expected to litigate upon
the basis that she has to watch every penny that is spent in
litigation. Her husband is clearly conducting
litigation on a
luxurious basis. The Applicant likewise is entitled to conduct
litigation on a similar basis (see
Glazer v Glazer
1959 (3) SA
928
(W) at 932;
Nicholson v Nicholson
1998 (1) SA 48
(W) at
52;
Cary v Cary
[1999] 2 B All SA 71 (C) at 76 – 7.
[16] I have for good reason set out
the aforegoing to highlight not only the right of Applicant to the
relief sought but to provide
a comparative analysis of decisions
apposite the case before me. The Respondent has both in his replying
papers under oath and
in argument before me, not sought to deny the
extent of the estate at his disposal. He steadfastly seeks to repel
Applicant’s
claim fundamentally on the ground that Applicant,
being married out of community, has no right to interrogate his
estate. In his
view, it would appear, her claim for maintenance has
no bearing on his assets. This cannot be so in light of the fact that
the
trial court would, if the right to maintenance is proved, have to
make an assessment of the Respondent/Plaintiff’s ability
and
means to provide the maintenance. From a perusal of the papers I am
of the view that Applicant, as Defendant, could succeed
in its
counterclaim thereby rendering imperative the assessment of his
estate.
[17] The Respondent has been less than
truthful in the manner in which he has conducted litigation to date.
He could have easily
obviated the need to have forensic
investigations and valuations by making good on the undertaking he
made to this Court in the
first Rule 43 hearing of the 9
th
November 2008 by discovering same as undertaken. Not only does he not
do that, he boldly misrepresents how that Court came to the
award of
R25 000.00.
[18] The inexplicable refusal to put
to bed a settlement agreement in June 2009 when the matter had been
set down for trial is starkly
indicative of the probability that
Respondent is prepared to wear out the Applicant utilising the vast
resources at his disposal.
The costs of the two days with senior
counsel in attendance were needless, to say, a tragic dissipation of
resources.
[19] On the papers before me, the
Applicant has shown a
prima facie
case and, being unemployed
and without assets, lacks the means to conduct legal proceedings. In
light of the manner in which this
matter has progressed since the
award of R25 000, it is certain that the same would have been
used up as at the settlement
negotiation stage. Furthermore, I am
quite satisfied that given the scale and luxury with which Respondent
is litigating and the
use of the best legal teams including senior
advocates, Applicant is entitled to commensurate ‘sinews of
war’. This
does not mean that she is entitled to all the costs
set out in her papers. I am in agreement with the aforegoing
authorities on
the expensive nature of litigation and in my view an
amount in the order of R90 000.00 up to the first day and
including all
necessary preparation is eminently reasonable in light
of the facts.
[19] The sinews of war are not limited
to the legal costs. Where parties in a matrimonial dispute are able
to minimise issues by
exercising rationality and reason, they avoid
the unwarranted escalation of costs. Where however, as in the present
instance, one
party in whose favour resources are weighted does not
co operate by providing information relating to assets where the
evaluation
of these are relevant to the determination in the main
action, our Courts will come to the assistance of an Applicant. In so
far
as the complexities of assessing and valuing the vast
multifaceted estate at Respondent’s disposal including the
valuation
thereof, such work would require the services of auditors
and expert valuators. Indicative fee structures have been submitted
by
Applicant. Having been a commercial legal practitioner for years I
am cognisant of how expensive these services are and whilst it
is so
that these services are expensive in light of the globalised nature
of reputable auditing firms, I would think that a sum
in the order of
R190 000.00 would be a useful contribution towards these costs.
In this I include the costs anticipated for
the forensic
investigators.
In the result, I make the following
order:
1. That the Respondent is to make an
interim contribution to costs of preparation to Applicant in the sum
of R280 000.00 inclusive
of experts and associated legal costs.
2. That the Respondent pay the amount
as follows:
2.1 R100 000.00 on or before the
31
st
March 2010
2.2 R100 000.00 on or before the
31
st
May 2010
2.3 R80 000.00 on or before the
30
th
June 2010
3. That the costs be costs in the main
action.
____________________
P.T. MAGEZA
ACTING JUDGE OF THE HIGH COURT
MATTER HEARD ON : 11 MARCH 2010
REASONS DELIVERED ON : 15 MARCH
2010
COUNSEL FOR THE APPLICANT: MR COLE
ATTORNEYS FOR APPLICANT : MAVONYA
MOSHESH & ASSOC
21 KING STREET, SOUTHERNWOOD
EAST LONDON
COUNSEL FOR RESPONDENT : MR ZILWA
ATTORNEYS FOR RESPONDENT
: SMITH TABATA INC
57 WESTERN AVENUE, VINCENT
EAST LONDON