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in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION,
CAPE TOWN
Case No.: 2503/2020
In the matter between:
N[…]-A[…] K[…] Applicant
and
T[…] P[…] K[…] First Respondent
P[…] D[…] K[…] Second Respondent
In his capacity as trustee in the
MASARD FAMILY TRUST
Registration Number: IT574/2010
K[…] J[…] K[…] Third Respondent
In his capacity as trustee in the
MASARD FAMILY TRUST
Registration Number: IT574/2010
In re:
N[…]-A[…] K[…] Applicant
and
T[…] P[…] K[…] Respondent
JUDGMENT
___________________________________________________________________
ANDREWS, AJ
Introduction
[1] This is an application for the joinder of the Second and Third Respondents
(hereinafter referred to as “the Respondents” or “trustees” interchangeably), in
their capacity as trustees of the Masard Family Trust (“the Trust”) in their official
capacities as parties to the ongoing divorce action instituted by the Applicant
against the First Respondent. The First Respondent has elected not to oppose
the application and has filed a notice to abide by the decision of the Court. The
Respondents opposes the application.
[2] The Applicant and the First Respondent are married out of community of property
with the application of the accrual system. The Applicant instituted divorce action
after discovering the First Respondent’s infidelity on 3 November 2017. The
Applicant averred that the First Respondent has attempted to deprive her of her
share in the accrual by resigning as a director of the company known as Harley
Beauty Wax UK Ltd of which he was a 50% shareholder, and thus causing his
shares to be transferred to the Trust. Furthermore, the Applicant challenges the
assertion that the First Respondent had a loan with the Trust in the amount of
R800 000, which impacts the free residue of the estate for the purposes of the
accrual calculation. The Applicant is desirous to join the Trust and thereafter
apply in terms of Rule 28 to include relief for the transfer of shares back into the
name of the First Respondent and cancellation of the bond.
[3] The Respondents are the trustees of the Masard Family Trust and the parents of
the First Respondent. The Respondents averred that the Trust contributed
towards the purchase of the parties’ immovable property situated 3[…] A[…]
Street, Vermont (the “property”) as well as the renovations in the amount of about
R800 000. This amount was agreed to be a loan by the First Respondent owing
to the Trust. The First Respondent resigned from the company 2 years prior to
the institution of the divorce action. The Respondents deny that the shares were
transferred to the Trust, but asserted that it reverted to the company.
Preliminary Issues
[4] A further affidavit was filed by the Second Respondent after the Applicant filed
her Reply ing Affidavit , without leave being requested to do so. At the
commencement of the hearing, Counsel on behalf of the Applicant submitted that
it was opportunistic for the Respondents to file a further affidavit , which did not
advance the Respondent’s case. The Responden ts contended that the further
affidavit was necessary to defend accusations of perjury, unethical and deceitful
conduct which it viewed as the Applicant having introduced new material in the
form of various annexures.
[5] It is apposite to mention that the c ourt did not condone the irregularity, however,
as there was no strong opposition thereto the matter proceeded.
Applicant’s Principal Submissions
[6] The Applicant contended that the First Respondent was a director and 50%
shareholder in the company known as Harley Beauty Wax UK Ltd (the
“company”). On 4 January 2018, the First Respondent resigned as a director of
the company. On 6 January 2018, the First Respondent caused his shares to be
transferred to the Trust. The property, was subject to a bond which was held by
ABSA and registered to the value of R1 100 000. A valuation of the property was
done by Seef on the instruction of t he First Respondent, in terms of which the
value of the property was placed at R2 600 000 on 25 January 2019 . The First
Respondent caused a further bond to be registered over the property for
R1 529 386 during the cause of August 2020 , without the knowledge of the
Applicant.
[7] The effect of registering the further bond, resulted in the re being no free surplus.
The Applicant would have been entitled to 50% of the accrual, which prior to the
registration of the further bond would have entitled the Applicant to R 800 000 of
the free surplus of R 1 600 000. However, because of the assertion that the F irst
Respondent had a loan with the Trust in the amount of R800 000, which the
Applicant disputed, the Applicant’s portion of the accrual would have amounted to
R400 000.
[8] The Applicant submitted that the alleged proceeds were not due to a loan, but
emanated from monies left to the First Respondent by his grandfather in the
amount of approximately 50 000 British pounds. The First Respondent is not a
trustee but a beneficiary of the Masard Family Trust.
Second and Third Respondent’s Principal Submissions
[9] The Second Respondent explained that the Trust is a family trust which was
initially created during 2010 for the benefit of the Second and Third Respondent’s
children. On 3 July 2012, shortly befo re the Applicant and First Respondent were
married, the First Respondent purchased the property for R1 150 000, which
property was registered on 10 October 2012. The purchase price of the property
and transfer costs were partially funded by way of a loan f rom the Trust in the
sum of R624 111,56. By virtue of the parties’ marriage being out of community of
property with the inclusion of the accrual system, the consent of the Applicant to
register the bond was not required.
[10] The house on the property needed refurbishment which was financed by the
Trust in a further sum of m ore than R800 000, but it was agreed that the amount
of the loan would be stated as R800 000. The Respondents contended that it was
at all times the intention of the trustees to lend the money and not to donate the
money to the First Responde nt as it would have the effect of preferring one
beneficiary above the other.
[11] It was further explained that the Second and Third Respondents have been
involved in the beauty industry for approximately 40 years. When Harley Beauty
Wax UK Ltd was incorporated in September 2012, it was suggested that the First
Respondent, who was resident in the UK at the time, act as one of the directors
and shareholders. In addition, it was contended that the First Respondent never
received any remuneration during this time and t he company did not declare a
dividend. The First Respondent contributed no capital to the company and neither
did he pay for his share. The further affidavit essentially provided an overview of
the different entities which uses the name “Harley” as part of its trading name,
namely Harley Beauty Wax UK Ltd, Harley Beauty Wax SA CC and Harley Body
Wrap UK Ltd.
[12] It was further more contended that t he situation had changed 5 years later in
2017 because the First Respondent was living in South Africa and could no t
really contribute to building the business of the company. The company, was
operating at a loss. These factors, informed the First Respondent’s decision to
resign as a director and shareholder during December 2017. Upon his
resignation, his shares were n ot transferred to the Trust, but reverted to the
company. These events preceded the divorce action.
[13] Furthermore, the Respondents submitted that even if the bond in favour of the
Trust is cancelled, this would only have the effect of taking away the Trust’s
security for the loan, whist the underlying debt previously secured by the bond
would remain intact. They submitted that cancelling the b ond would have no
effect of the accrual calculation.
[14] The Respondents contended that the relief sought by the Applicant is bad in
law as the Applicant has failed to clearly state the grounds upon which she seeks
the joinder of the trustees. In addition, t he Respondents averred that the
Applicant has not set out a legal basis to compel the retransfer of his share to the
First Respondent. Furthermore, the Respondents contended that the Applicant
failed to set out in what way the rights of the Trust may be a ffected by the Order
she will seek at the trial.
Legal Framework
[15] Rule 10(3) of the Uniform Rules of Court provides that ‘[s]everal defendants
may be sued in one action either jointly, jointly and severally, separately or in the
alternative, whenever the question arising between them or any of them and the
plaintiff or any of the plaintiffs depends upon the determination of substantially
the same question of law or fact which, if such defendants were sued separately,
would arise in each separate action.’
[16] An Applicant is required to show a direct and substantial interest in the subject
matter of the proceedings. The Constitutional Court in Snyders and Others v de
Jager1 affirmed the entrenched test for joinder that:
‘The Court confirmed that the test for joinder is that a litigant must have a
direct and substantial legal interest that may be affected prejudicially by
the judgment of the Court in the proceedings concerned.’ 2
Discussion
[17] The Respondents correctly identified the court’s approach in an application for
joinder. In this regard, the Court does not consider the correctness of the facts on
which the Applicant relies as a basis for joinder, but he or she must raise facts
which are necessary in order to constitute the relief the Applicant will be asking
against the party to be joined a nd the way in which the rights of that party will be
affected by the Order sought.
[18] The Applicant argued that the various reasons proffered by the Second
Respondent for the bonds being registered and the transfer of the share s are
1 (CCT186/15)[2016] ZACC 54 at para 6.
2 See also Klaase v van der Merwe N.O. [2016] ZACC 17; 2016 (9) BCLR 1187 (CC).
irrelevant for the purp oses of the joinder application. The Court was referred to
RP v DP 3 where the Applicant made the averment that the Respondent was
using a trust as a vehicle to accumulate personal wealth. The Court held that:
‘it is unnecessary for purposes of this application to make any factual
findings in this regard – this is the function of the trial court and the less
said the better.’
[19] The Respondents however argued that the matter in casu is distinguishable
on the merits. Furthermore, the procedure followed in RP v DP was that the party
who sought the joinder of a Trust to divorce proceedings would prepare a draft
notice of amendment of their pleadings where the relief sought against the Trust
is set out, which was not done in this matter. It was argued that the relief that the
Applicant seeks against the Second and Third Respondents are unclear.
[20] Whilst the Respondents correctly identified the hurdles to overcome, it
misidentified when the hurdle will be overcome as the court is not called upon to
make any fa ctual findings. The merits of the joinder and the merits of the relief
sought at trial, must be kept separately.
Conclusion
[21] It is trite that the test for joinder is whether the party to be joined has a direct
and substantial legal interest in the order the court might make. In this regard, the
interest will be direct or substantial if such order cannot be sustained or brought
into effect without prejudicing the interests of the party. It is incumbent on the
Applicant to show that there is a right a dversely affected or likely to be affected
by the order sought. It is sufficient for the Applicant to make allegations which, if
proved would entitle it to the relief.4
3 2014 (6) SA 243 (ECP)
4 SA Riding for the Disabled Association v Regional Land Claims Commissioner and Others 2017 (5)
SA 1 (CC) at para 9.
[22] This court must be satisfied that the relief being sought against the Second
and Thi rd Respondents is competent relief. The Applicant indicated that the
intention of setting aside the bond registered in favour of the Trust and directing
that the Trust transfer the shares back into the name of the First Respondent
pertain to a substantial interest and therefore warrant the joinder. The question to
be answered is whether the Applicant has raised facts which are necessary in
order to constitute the relief that Applicant will be asking against the party to be
joined and set out the way in which the rights of that party will be affected by the
Order sought.
[23] To my mind, the Applicant’s assertion that the First Respondent is attempting
to move his estate into the Trust, together with the following common cause facts,
are sufficient grounds to warrant the joinder of the Second and Third
Respondents:
(a) that the property became subject to a bond that was registered to the extent
of the free residue and that such bond was registered in favour of the
Masard Family Trust, of which the First Respondent is a beneficiary and
(b) That the First Respondent after having found to have committed adultery
resigned as a Director of one of the entities and purportedly disposed of his
share onto the Trust.
[24] It is trite that the Applicant does not have to pr ove the correctness of these
facts at this stage as this is the hurdle that the Applicant will have to overcome at
the trial. The matter of BC v CC5 crystallised the test and the ultimate finding of
this court where Dambuza J stated –
‘[i]n my view, if the plaintiff's allegations are proved to be correct, the
plaintiff will have succeeded in proving that the assets ostensibly
owned by the trust, or some of them, are de facto the property of the
5 BC v CC and Others 2012 (5) SA 562 (ECP) para 18
first defendant, and that their value ought to be taken into account in
determining the extent of accrual of the estate of the first defendant.’
[25] This approach has been supported by a plethora of case law that affirms the
approach of our courts that the Applicant’s allegations are presumed to be correct
for purpose of joinder, which principle has been applied in the context of divorce
proceedings. In any event, the Second and Third Respondents are not without a
remedy. It will remain open to them to raise an exception if no cause of action is
made out agains t them and/or if the relief sought cannot be supported by any
reasonable interpretation of the amended Particulars of Claim. I am therefore
satisfied that there has been substantial compliance with the requirements for
joinder as envisaged in Rule 10 (3).
Costs
[26] It is an accepted legal principle that costs ordinarily follow the result. The
Applicant initially sought costs in the event of opposition and pursues such an
order. However, in light of the fact that there are many unanswered questions
pertaining to the d isputed loan and the First Respondent’s shares, which are all
aspects that will be fully ventilated in the fulness of time at a hearing in due
course, a costs order will be premature . This court has made no factual findings
and the amendment to the particu lars of claim w ill require consideration in due
course. In my view, t he trial court will be better placed to determine whether the
application for joinder was ultimately meritorious against the Second and Third
Respondents.
Order
[27] In the result, the following order is granted:
1. The Second and Third Respondents are joined in the divorce action
instituted by the Applicant against the First Respondent under case
number 2503/2020.
2. The matter of costs stands over for later determination.
____________________________
P ANDREWS, AJ
Acting Judge of the High Court
Western Cape Division
APPEARANCES
For the Applicant: Advocate L van der Westhuizen
Instructed by: Jukes Malekjee and Associates
For the First Respondent: No Appearance (Notice to abide
filed)
For the Second and Third Respondents: Advocate G C Le Roux
Instructed by: Guthrie & Theron Incorporated
Date of Hearing: 12 September 2024
Date of Judgment: 25 September 2024
NB: The judgment is delivered by electronic submission to the parties and their legal
representatives.