Elesang v PPC Lime Limited and Others (1076/2006) [2006] ZANCHC 73; 2007 (6) SA 328 (NC) (15 December 2006)

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[2006] ZANCHC 73
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Elesang v PPC Lime Limited and Others (1076/2006) [2006] ZANCHC 73; 2007 (6) SA 328 (NC) (15 December 2006)

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IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape Division)
Case
Nr: 1076/2006
Case
Heard: 08/12/2006
Date
delivered: 15/12/2006
In
the matter between:
NOMTHETHO
YVONNE ELESANG APPLICANT
and
PPC
LIME LIMITED FIRST RESPONDENT
PPC
LIME EMPLOYEES PROVIDENT FUND SECOND RESPONDENT
MARAPELO
JUSTICE ELESANG THIRD RESPONDENT
STANDARD
BANK OF SOUTH AFRICA FOURTH RESPONDENT
Coram:
Olivier J
JUDGMENT
OLIVIER
J:
PARTIES
AND BACKGROUND
The
applicant, mrs Nomthetho Yvonne Elesang, and the third respondent,
mr Marapelo Justice Elesang, are married to each other in
community
of property. There is one minor child born of their marriage.
The
applicant has instituted divorce proceedings in which she claims,
inter alia
,
one half share of the third respondent’s pension interest as at
the date of divorce, and maintenance in respect of the minor
child.
The
third respondent had been in the employment of PPC Lime Limited (the
first respondent) and he had in such capacity been a member
of PPC
Lime Employees Provident Fund (the second respondent). The third
respondent had, apparently after the issue of summons,
left the
employment of the first respondent and in the process he became
entitled to payment (by the second respondent) of what
was referred
to (by the deponent for the second respondent) as a withdrawal
benefit.
The
applicant then approached this Court for a provisional order to the
effect that, pending the finalisation of the divorce action,
the
second respondent pay half of the amount of the third respondent’s
“pension interest”
into the trust account of the applicant’s attorneys, alternatively
(and in the event that the amount had already been paid to
the third
respondent) that the fourth respondent, the Standard Bank of South
Africa Limited, be ordered to pay half of such amount
into the said
trust account, and that the third respondent, and any other
respondent who opposed the application, be ordered to
pay the costs
jointly and severally.
A
rule
nisi
to that effect was granted. On the return day the application was
opposed by only the second respondent.
The
application was founded upon allegations that the applicant was
entitled to half of the money by virtue of her marriage in community
of property to the third respondent, that the third respondent had
neglected to provide financial assistance in respect of the
minor
child and that the applicant feared that the third respondent would
“not meet his present
of future maintenance commitments and that he
(would)
abuse the monies ….
without making provision for the …. payment of maintenance”
and that he would
“waste
the pension monies and that
(she
would)
be seriously
disadvantaged thereby”
.
OPPOSITION
These
allegations have not been denied by or on behalf of the second
respondent and, as already mentioned, the third respondent
did not
even oppose the application.
In
its opposing papers the second respondent opposed the application on
the grounds, broadly speaking:
that
the concept of
“pension
interest”
, as
envisaged and defined in the
Divorce Act, no 70 of 1979
, could only
be applicable if, at the time of the divorce, the particular party
is still a member of a fund as envisaged in
section 1
of the
Divorce Act and
that, because the third respondent would not be
such a member when their marriage is dissolved, the applicant would
not be entitled
to the relief envisaged in subsections (7) and (8)
of
section 7
of the
Divorce Act; and
that,
in any event, the provisions of
section 37A(1)
of the
Pension Funds
Act, 24 of 1956
, would preclude the second respondent from paying
any part of the amount (to which the third respondent had become
entitled)
“to a party
other than the member spouse (the Third Respondent) and/or the
non-member spouse (the Applicant) and/or dependants
of the member”
.
PENSION INTEREST
It
is so that the applicant, in her notice of motion, referred to the
amount to which the third respondent had become entitled as
his
“pension interest”
.
When regard is had to the definition of this phrase in
section 1
of
the
Divorce Act (with
reference to pension funds) it:
appears
to apply only where one of the spouses
is
a member of a pension fund at the date of the divorce; and
means
“the benefit to which
that party ….
would have been entitled
… if his membership of the fund would have been terminated on the
date of the divorce on account of his resignation from his
office”
.
(My emphasis)
The
third respondent will not be a member of the second respondent if
and when an order of divorce is granted, because he has already
left
the employment of the first respondent.
In
view of the fact that the third respondent has already become
entitled to the benefits and has already left his employment, long
before the date of the divorce, the formula based on benefits to
which he
“would have
been entitled”
in the
event of a resignation, can also strictly speaking no longer apply.
It is clear that the hypothetical event upon which
this formula was
intended to be based is a resignation “
on
the date of the divorce”
and that the calculation was intended to be made on this basis when
the pension benefits eventually accrued to the member at some
time
after the divorce.
Any
other interpretation would mean that the non-member spouse would
also become entitled to pension interest made up of contributions
made by the member spouse after the date of the divorce, which would
be senseless and clearly contrary to the fundamental principle
that
the joint estate is to be divided
“as
it existed at the date of the divorce”
(see
Maharaj v Maharaj
and Others
2002 (2) SA
648
(D) at 649H-I and
Sempapalele
v Sempapalele and Another
2001
(2) SA 306 (OPD)).
Section
7
(7)(a) of the
Divorce Act provides
that a
“pension
interest”
(as defined
in
section 1)
will be deemed to be a part of the assets of a party
and if the amount to which the third respondent has become entitled
could
no longer be seen as a
“pension
interest”
, as
envisaged in the provisions of
section 7
(7)(a) of the
Divorce Act,
it
could not in terms of these provisions be deemed to be part of
the assets of the third respondent.
The
common law position was simply that a party’s pension
interest
did not form part of the assets of a joint estate (see
De
Kock v Jacobson and Another,
1999
(4) SA 346
(W) at 348,
Sempapalele
v Sempapaplele and Another, supra,
and
Maharaj v Maharaj
and Others, supra
, at
651) and this was in all probability the reason for the enactment of
section 7
(7)(a) of the
Divorce Act. It
is therefore only by means
of this deeming provision (and the provisions of subsections (7) and
(8) of
section 7
of the
Divorce Act) that
a non-member spouse would
be able to secure a part of a pension
interest
.
Section
7
(8) of the
Divorce Act provides
for the payment of part of a
“pension interest”
to a non-member spouse
“when
any pension benefits accrue in respect of that member”
.
It seems to be clear that these provisions envisage a future
accrual of benefits (after the date of divorce), which is also no
longer possible in this case.
It
was also submitted on behalf of the second respondent that the
amount being held by the second respondent (who stated that it
had
not yet been paid to the third respondent and that the
“benefit
…. is still pending payment from the Second Respondent”
)
can no longer been seen as a
“pension
interest”
, as
envisaged and defined in the
Divorce Act and
in the sense of
denoting a right to or interest in certain benefits as and when they
accrue at some time in future (after the date
of divorce), and that
the amount now constituted the third respondent’s pension
benefits
.
It
is of interest to note that both the phrases
“pension
interest”
and
“pension
benefits”
are used in
section 7
(8)(a)(i) of the
Divorce Act, apparently
as referring to
the nature of a member’s rights prior to date of the accrual and
subsequent thereto respectively (see
De
Kock v Jacobson and Another, supra,
at 349A-C).
It
was on the basis submitted (on behalf of the second respondent) that
the applicant would not, under these circumstances, be entitled
to
any relief in terms of the provisions of
sections 7
(7) and
7
(8)
of the
Divorce Act. On
the face of it this contention appears to be
correct, as eventually also conceded on behalf of the applicant.
These provisions
quite clearly apply only to a pension
interest
which has not yet accrued as at the date of the divorce and which
belongs to a party who is still a member of the particular fund
as
at the date of divorce (see
De
Kock v Jacobson and Another, supra,
at
349 and
Sempapalele v
Sempapalele and Another, supra
,
at 311-312).
This
does not, however, mean that the applicant will not be entitled, in
the divorce action, to any part of the pension
benefits
which have accrued to the third respondent.
As
already pointed out a pension
interest
does not by common law form part of the assets of a joint estate. A
distinction must, however, be drawn between a pension
interest
which has not yet accrued and one which has accrued and has in the
process been converted into a pension
benefit
(see
Sempapalele v
Sempapalele and Another, supra,
at 311). In the case of a pension
benefit
the accrued right would form part of the joint estate (see
De
Kock v Jacobson and Another, supra,
at
349H,
Sempapalele v
Sempapalele and Another, supra,
at 311C and
Maharaj v
Maharaj and Others, supra,
at
650-651).
It
is therefore not really necessary, at this stage, to decide whether
the applicant will still be able to utilise the provisions
of
section 7
of the
Divorce Act as
a means to claim half of the accrued
right (see
Sempapalele v
Sempapalele and Another, supra
).
The fact is that the accrued right (pension benefit) is in any
event going to be a part of the joint estate and, in principle
at
least, the applicant is going to be entitled to one half of the nett
value of that estate (see
Maharaj
v Maharaj and Others, supra,
at 649I and 652).
Apart
from simply claiming (in the divorce action) a one half share of the
third respondent’s pension interest in terms of the
provisions in
section 7
of the
Divorce Act, the
applicant also claims an order for
the division of the joint estate. The third respondent (who is also
the defendant in the divorce
action) has not opposed this
application and there is therefore no indication before this Court
that, for example, the applicant
might on some or other basis be
ordered to forfeit the patrimonial benefit pertaining to the accrued
pension benefit.
In
heads of argument filed on behalf of the second respondent it was
submitted that it
“may
be found, when the value of the joint estate is determined, that the
applicant is entitled to an amount which is less than
50% of the
pension interest”
.
This might be so, but in the absence of any contrary indication it
must be assumed to be at least equally possible that the applicant
is going to be entitled, as her share in the nett value of the joint
estate, to an amount at least equal to 50% of the accrued
pension
benefits.
It
should be born in mind that the applicant is not at this stage
claiming payment of her half share. The relief she claims in
this
application is aimed at merely securing an amount equal to 50% of
the accrued pension benefits, pending finalisation of the
divorce
action, and, by necessary implication, also pending determination of
her share of the joint estate and its value. Even
if she is not
going to be able, in the divorce action, to claim payment of half of
the pension benefit on the basis of
section 7
(7) of the
Divorce
Act, she
has the right to secure at least half of the pension
benefits (which in any event now form part of the joint estate) to
protect
her interest in the joint estate.
In
fact, in my view the applicant might possibly have been entitled to
move for an order securing the whole of the accrued pension
benefits
pendente lite
.
It is not only half of the pension benefits that now forms part of
the joint estate, but all of it, and if a case was made out
that the
third respondent might squander any part thereof to the detriment of
the joint estate, the applicant would have been entitled
to protect
it pending finalisation of the divorce action (see
The
South African Law of Husband and Wife,
Hahlo,
5
th
edition, pp 197-198 and 256,
Ex
parte Dean
1946 (1) PH
B29 (CPD),
Family Law
Service (Commentary)
,
Schäfer, pp 21-22 and section 20 of the
Matrimonial
Property Act
, 88 of
1984).
The
applicant stated under oath that she is receiving no co-operation
from the third respondent in the divorce action and that she
indeed
fears that the third respondent is going to squander the pension
money. The third respondent and his attorney (who has
in the
meantime withdrawn from record) apparently failed to react to
requests for an undertaking that half of the amount would
be paid
over to be held
“pending
the result of the divorce action”
.
These
averments have not been contradicted and in these circumstances, and
in the absence of any opposition by the third respondent,
the
balance of convenience clearly favours the applicant in her bid to
secure at least half of the pension money payable to the
third
respondent. It appears that it is only one lump sum that is
concerned here.
The
second respondent has chosen not to disclose what the amount of the
“withdrawal benefit”
is going to be, but this would not have rendered the orders in the
rule
nisi
unenforceable. The second respondent would quite clearly know what
the amount (and half thereof) is and the fourth respondent
would in
all probability have been able to identify the source and nature of
such a deposit (had it been paid over into the third
respondent’s
bank account).
In
the second respondent’s heads of argument it was furthermore
submitted that
“the
prayer against the third respondent is not competent as the
applicant has not set out the value of the pension interest”
and he referred to the
dicta
in the
Sempapalele
case at 311G-H and the
Maharaj
case at 650H-I. The facts in the
Sempapalele
case were entirely
different from those in this matter. The applicant in the
Sempapalele
case claimed final payment of a specific amount,
viz
half of the pension benefit paid to the first respondent when he had
resigned more than a year after the date of their divorce.
She
would, however, quite obviously only have been entitled to a part of
the pension interest calculated as if the first respondent
had
resigned on the date of the divorce, and she failed to prove what
the value of the pension interest (and of her half portion)
was at
the date of the divorce.
In
the matter at hand the applicant is not claiming payment of any
amount in these proceedings. She intends doing so in the divorce
action and it will be only then that the value of the pension
benefits might become relevant. Furthermore the pension benefits
in
the present matter accrued before the date of the divorce and not
thereafter (as in the
Sempapalele
case)
,
and the value of such
benefits as at the date of the divorce therefore does not come into
play here.
The
facts in the
Maharaj
case were different from those in the
Sempapalele
case, but insofar as the latter case was approvingly referred to
therein, the clear distinction between the facts in the
Sempapalele
case and the present
matter should not be lost sight of.
It
is so that it was held in the
Sempapalele
case that a
“share of
the pension interest … is not to be awarded … without more ado”
and that there should be sufficient evidence to enable the Court to
decide the extent or
quantum
of the share to be awarded. Once again, however, the applicant is
not at this stage claiming the award of any share.
The
applicant, however, went further in her founding affidavit and also
made out a case to the effect that the third respondent
had been
neglecting his maintenance obligations. These allegations have also
not been denied or disputed and it is trite that
a High Court can
grant an order securing pension benefits to protect children and to
ensure that such funds remain available for
their maintenance (see
Soller v Maintenance
Magistrate, Wynberg, and Others
2006 (2) SA 66
(C),
Mngadi
v Beacon Sweets & Chocolates Provident Fund and Others
2004 (5) SA 388
(D),
Magewu
v Zozo and Others
2004
(4) SA 578
(C) and
Burger
v Burger and Another
2006 (4) SA 414
(D)).
Mr
Coetzee eventually appeared on behalf of the second respondent at
the hearing of this matter. He had not been the author of
the heads
of argument which had been filed on behalf of the second respondent
and, while he did not in so many words abandon or
concede the
submissions therein, he limited his argument to only one submission,
viz
that the applicant had failed to prove an apprehension of
irreparable harm.
I
am afraid that I do not agree. In the first place the applicant has
to my mind made out a strong
prima
facie
case as regards
her rights to the third respondent’s pension benefits (see
Commissioner for Inland
Revenue, Transkei, and Another v JALC Holdings (SA) (Pty) Ltd and
Another
1991 (4) SA 646
(Tk) at 654G).
In
the second instance the requirement of
“a
well-grounded apprehension of irreparable harm if the interim relief
is not granted”
(see
Coalcor (Cape) (Pty) Ltd
and Others v Boiler Efficiency Services CC and Others
1990(4) SA 349 (C) at 353G) entails no more than a
“’reasonable
apprehension’ of injury … one which a reasonable man might
entertain on certain facts”
,
and the applicant was not required
“to
establish that, on a balance of probabilities flowing from the
undisputed facts, injury will result”
(see
Interdicts and
Related Orders
, Meyer, p
70).
Against
the background of the third respondent failing to respond to
requests to secure half of the pension benefits, and not only
neglecting his maintenance obligations towards the minor child, but
even taking steps to deprive the child of medical support,
the
applicant’s apprehension is in my view more than reasonable.
It
was not argued that there would under the circumstances have been
any alternative remedy available to the applicant and in my
view the
requirements for an interlocutory interdict have been satisfied.
SECTION 37 A(1) OF
THE PENSION FUND ACT
In
my view the second respondent’s submissions regarding the
provisions of section 37 A(1) of the
Pension Funds Act is
devoid of
any merit. The relevant provisions of
section 37
A(1) read as
follows:
“…
no
benefit … or right to such benefit … shall … be capable of
being reduced, transferred or otherwise ceded, or of being pledged
or
hypothecated, or be liable to be attached or subjected to any form of
execution under a judgment or order of a court of law, …
:
Provided that the fund may pay any such benefit … or part thereof
to any one or more of the dependants of the member or beneficiary
or
to a guardian or to a trustee for the benefit of such dependant or
dependants ...”
It
is clear that these provisions are intended to render pension
benefits and the right to such benefits incapable of being
“reduced,
transferred or otherwise ceded”
or of being
“pledged or
hypothecated … or subjected to any form of execution under a
judgment or order of a court of law”
,
but subject to the proviso that it may be paid to,
inter
alia
, a dependant or a
guardian
“for the
benefit of such dependants …”
.
Payment
of the benefits into a trust account pending the finalisation of the
divorce action, and possibly an order of that Court
in respect of
such money, could not in my view amount to a contravention of the
provisions of
section 37
A (1). The rule
nisi
can by no stretch of the imagination be seen as having the effect,
at this stage, of reducing, transferring, ceding, pledging,
hypothecating or subjecting the benefits in any way envisaged in
those provisions (compare
Van
Aartsen v Van Aartsen
2006 (4) SA 131
(T)).
It
was common cause that the provisions of
section 37
A(1) would not
prevent payment of such benefits to,
inter
alia,
a non-member
spouse. Any other interpretation of these provisions would have
rendered the provisions of subsections (7) and (8)
of
section 7
of
the
Divorce Act meaningless
. Payment into the trust account of the
applicant’s attorneys would quite clearly have amounted to payment
to her agent. In
any event, the orders in the rule
nisi
are clearly not aimed at final payment of any amount into the hands
of any party, but merely at securing an amount pending another
Court’s ruling on whether the applicant is entitled to payment
thereof on any basis at all.
In
the second respondent’s heads of argument it was also submitted
that, because
section 7
(8)(a) of the
Divorce Act empowers
only a
“court granting a
decree of divorce”
to
order payment of a part of a pension interest or benefit, this Court
is precluded from confirming the rule
nisi
.
In view of what has already been said, this argument can never be
correct. It is, as already mentioned, quite clear that the
effect
of the rule
nisi
was not to order payment as envisaged in
section 7
(8)(a), but
rather to secure part of the benefits to enable the Court which is
going to grant the decree of divorce, to order such
final payment.
COSTS
It
is so that the third respondent failed to agree that half of the
pension benefits be paid into the trust account of the applicant’s
attorneys pending finalisation of the divorce action. In view of
the second respondent’s opposition (and the basis thereof)
it is,
however, unlikely that it would in any event have agreed to honour
such an undertaking by the third respondent. The money
is in fact
still being held by the second respondent and has not even been paid
into the bank account at the fourth respondent.
In argument on
behalf of the applicant it was eventually indicated that a cost
order was no longer sought against the third respondent
The
second respondent chose to oppose the application on grounds which
in my mind are entirely without merit and I can see no reason
why it
should not be ordered to pay the costs of the application.
RELIEF
In
view of the fact that the second respondent has not yet paid the
amount to the third respondent (or into his bank account with
the
fourth respondent) the order contained in paragraph 1.2 of the rule
nisi
(which would have compelled the fourth respondent to pay over the
money into the trust account of the applicant’s attorneys)
can be
discharged at this stage.
Due
to the fact that it was apparently not known to the applicant, when
the application was initiated, whether the second respondent
had
already paid the benefits to the third respondent, paragraph 1.1 of
the rule
nisi
contains the introductory words
“In
the event that the PPC Lime Employees Provident Fund has not yet
paid the pension interest of Marapelo Justice Elesang to
him”
.
The second respondent has now disclosed that it has not yet paid
out the money to the third respondent and these introductory
words
may therefore be deleted.
Furthermore,
and in view of the above, the phrase
“pension
interest”
, in the
remainder of paragraph 1.1 of the rule
nisi
,
should be amended (as requested on behalf of the applicant) to read
“pension benefits”
.
The
following orders are therefore made:
Paragraph
1.1 of the rule nisi issued on 5 September 2006 is amended by
deleting the introductory words
“In
the event that the PPC Lime Employees Provident Fund has not yet
paid the pension interest of Marapelo Justice Elesang to
him”
and by substituting the phrase
“pension
interest”
with
the phrase
“pension
benefits”
.
So
amended paragraph 1.1, as well as paragraph 1.3, of the rule nisi
are confirmed.
The
second respondent is ordered to pay the costs of the application.
________________________
C
J OLIVIER
JUDGE
NORTHERN
CAPE DIVISION
For
the Applicant: Mr V Haddad
On
behalf of: Elliott Maris Wilmans &Hay
KIMBERLEY
For
the 3
rd
Respondent: Adv W Coetzee
On
behalf of Majila & Partners
KIMBERLEY