2
Background
[2] The parties were legally married in community of property on 11 December
1989. The marriage remains in effect. Since 2013, the parties have not cohabited as
husband and wife.
[3] Two children were born of the parties' marriage, both of whom have attained
the age of majority and are self-supporting.
[4] The parties are in agreement that the marriage has irretrievably broken down
and that a decree of divorce ought to be granted, subject to the approval of the
Honourable Court. The Plaintiff filed an affidavit of evidence in support of her
application.
[5] The Plaintiff issued a summons for divorce on or about 27 October 2020. In
terms thereof, the Plaintiff claimed, inter alia, division of the joint estate and payment
of one-half of the Defendant's pension interest held in the Government Employees
Pension Fund (GEPF).
[6] The Defendant entered an appearance to defend and delivered a plea and
counterclaim. In his counterclaim, the Defendant sought, inter alia, payment of one -
half of the Plaintiff's pension interest held in the GEPF.
[7] After the close of pleadings, and on 1 April 2022, the Defendant retired. Upon
retirement, the Defendant received a gratuity from the GEPF in the amount of
R 1 088 420.48. The Defendant has retained 50% of the said amount pending the
outcome of the divorce action. In addition, the Defendant currently receives a monthly
pension payment from the GEPF in the amount of R 24 570.50.
[8] Upon becoming aware of the Defendant's retirement, the Plaintiff amended her
particulars of claim. She now seeks half of the monthly pension payments received by
the Defendant from the GEPF, as well as half of the gratuity received by the Defendant
upon retirement in April 2022.
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The facts
[9] At the commencement of the divorce proceedings, the Defendant was a
member of the GEPF and possessed a pension interest as specified in section 7(1) of
the Divorce Act (herein referred to as “the Act”).1
[10] The pension fund in which the Defendant has an interest is a Government
Employees Pension Fund as contemplated in section 1(1) of the Pension Funds
Act
(herein referred to as “the pension fund”).2
[11] In terms of section 7(7)(a) of the Act, the Defendant’s interest in the pension
fund is deemed to form part of the joint estate of the parties at the dissolution of the
marriage.
[12] The Plaintiff’s amended particulars of claim state that, as of 1 April 2022, the
Defendant received R 1 088 420.48 from the GEPF. Consequently, the Plaintiff is
entitled to a 50% share of the joint estate, amounting to R 544 210.24, plus interest at
10.5% from the date of payment from the GEPF.
[13] From the same GEPF, the Defendant currently receives a monthly income of
R 24 570.50; consequently, the Plaintiff is also entitled to a 50% share, amounting to
R 12 285.25 per month.
[14] The Defendant contends that the Plaintiff is not entitled to a share of the
Defendant’s monthly payment in the amount of R 12 285.25 post the divorce .
Furthermore, the Plaintiff should not be granted the payment associated with the
R544 210.24 plus interest at 10.5% without accounting for the tax paid on the gratuity
of R1 088 420.48. The Plaintiff should similarly bear responsibility for the taxes paid.
Oral submissions by the Plaintiff
1 Act 70 of 1979.
2 Act 24 of 1956.
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[15] On behalf of the Plaintiff, Advocate Marx du Plessis contended that a distinction
exists between pension interest and pension benefit. This differentiation is particularly
relevant during divorce proceedings to determine how the pension asset sh ould be
divided, regardless of whether the parties have retired.
[16] The two definitions are described in terms of sect ion 1 of the Pension Funds
Act:
“pension interest”, in relation to a court order granted under section 7(8)(a) of the
Divorce Act, or a court order granted in respect of the division of assets of a marriage
according to the tenets of a religion, means, in relation to a party who is a member of
a fund, that member's individual account or minimum individual reserve, as the case
may be, determined in terms of the rules of that fund, on the date of the court order;
“Pension benefit” in relation to a fund means any amount payable to a member or
beneficiary in terms of the rules of that fund.
[17] Section 1(1)(a) of the Divorce Act defines pension interest in relation to a party
to a divorce action who—
“is a member of a pension fund (excluding a retirement an nuity fund), means the
benefits to which that party as such a member would have been entitled in terms of
the rules of that fund if his membership of the fund would have been terminated on the
date of the divorce on account of his resignation from his office”
[18] The distinction of the two words has also been described in by the Government
Employees Pension Law3 as follows:
“Pension benefit means an annuity or gratuity, or both an annuity and a gratuity, as
the case may be”
“Pension interest, in relation to a member of the Fund who is a party to an action for
divorce or for the dissolution of a customary marriage means the benefits to which that
member would have been entitled in terms of the rules of the Fund if the member's
3 1996 (Proclamation No.21 of 1996).
5
membership of the Fund were to be terminated on the date of the divorce or the
dissolution of a customary marriage on account of the member's resignation from the
service of the employer;"
[19] In terms of section 7(7)(a) of the Divorce Act, a pension interest , before
retirement, forms part of the joint estate of spouses married in the community of
property. In terms of section 7(8) of the Divorce Act, the court is empowered to order
that a portion of a member’s pension interest be assigned to the non-member spouse
upon the divorce.
[20] The Defendant retired and received a pension benefit; therefore, he is no longer
a member of the GEPF. The moment the Defendant received his pension benefits, the
pension interest ceased to exist and was converted into a pension benefit. From their
joint estate, the Plaintiff has a right to claim or receive future income, including half of
gratuities, because sections 7(7) and 7(8) of the Divorce Act are no longer applicable.
[21] It was additionally contended that the Defendant and GEPF's failure to notify
the Plaintiff of the Defendant’s retirement consequently deprived the Plaintiff of the
opportunity to invoke Rule 14 of the GEPF. As a result, the only applicable remedy is
for the court to order the Defendant to make a monthly payment to the Plaintiff
equivalent to half of the annuity payment received.
[22] Both the Plaintiff’s and the Defendant’s legal representatives argued based on
two legal principles during their submissions, which are De Kock v Jacobson and
Another4 and CM v EM.5
[23] Advocate Marx du Plessis argued that in De Kock above:
“In casu, the applicant's right to the pension accrued before the divorce , in that the
right accrued a month after the retirement of the applicant in July 1996 , and section
7(7) of the Divorce Act had no application thereto. In other words, the pension interest
4 1999 (4) SA 346 (W).
5 [2020] 3 All SA 1 (SCA).
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was converted into a right. section 7(7) of the Divorce Act does not apply because it
refers only to a pension interest and not to an accrued right.”6
“The applicant was a member of the pension fund prior to his retirement and ceased
being such a member upon his retirement. The definition of pension interest refers to
a party to a divorce action who is a member of a pension fund. As appears from the
rules referred to above, at the time of the divorce, the applicant was not a member of
a pension fund. Thus, t he provisions of s 7(7) of the Divorce Act have no application
to the facts as stated in the stated case.”7
[24] She argued that if this court considers the meaning of pension interest and the
decision above, the applicant’s right to the pension accrued before the divorce should
form part of the community of property. Therefore, the Plaintiff is also entitled to 50%
of the Defendant’s monthly pension income.
[25] The Plaintiff further argued that the Supreme Cour t of Appeal reaffirmed the
approach and finding in De Kock in the matter of CM v EM8 where in it was held that:
“the court in De Kock concluded that there was no logical or legal reason why both the
cash component and the accrued right to the pension should not form part of the
community of property existing between the parties prior to the divorce. [38] I align
myself fully with this reasoning and see no reason why it cannot extend to the case at
hand..." (footnotes omitted)
[26] In light of this decision, it is clear that the gratuity received by the Defendant
from GEPF upon his retirement constitutes part of the joint estate, and the Plaintiff is
entitled to a 50% share of it. Similarly, the monthly pension payments form part of the
joint estate, and the Plaintiff is entitled to a 50% share of it. Therefore, the Plaintiff is
also entitled to 50% of the Defendant’s monthly pension accrued benefit received from
the GEPF.
Oral submission on behalf of the Defendant
the GEPF.
Oral submission on behalf of the Defendant
6 De Kock above n 4 at 349A-B.
7 De Kock above n 4 at 349F-G.
8 CM v EM above n 5 at para 37-38.
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[27] On behalf of the Defendant, Advocate Raqowa conten ds that the joint estate
be divided in half, including the pension interests of both parties , during the divorce
proceedings.
[28] The court, when determining the division of the estate, should consider the date
of the divorce decree, which terminates the marital partnership, rather than the date
of the Defendant's retirement. The dissolution of the marriage signifies an appropriate
point at which to divide the estate.
[29] The Defendant was aware at the time of his retirement that he was married in
community of property, and the gratuity forms part of the joint estate. He did not commit
any fraud by concealing the Plaintiff's half share; instead, he retained the funds
pending the finalisation of the divorce.
[30] It was argued that the Plaintiff has no authority to stipulate the amount to be
paid to the Plaintiff and the interest. Since the provisions of section 7 of the Divorce
Act are no lo nger applicable in this matter, the Plaintiff is entitled to the benefit from
the division of the joint estate as the marriage is in community of property. The
liquidator might be appointed to distribute the estate equally.
[31] The Plaintiff is not entitled to 50% of the Defendant’s future monthly income
beyond the date of the divorce. The Defendant’s monthly income of R 24 570.50
constitutes part of the joint estate. Therefore, the Plaintiff is entitled to 50% of this
amount, which should be determined as of the date of the divorce, and similarly, should
bear responsibility for the taxes paid.
[32] In contrast, advocate Raqowa contended that the Plaintiff incorrectly relied on
this decision as the court in De Kock did not direct that the non-member spouse was
entitled to 50% of the monthly annuities paid post the date of divorce. The import of
the judgment was simply that the monthly annuity is no different to a spouse's salary,
and if it was due before divorce, then it fell into the joint estate. He further argues that
and if it was due before divorce, then it fell into the joint estate. He further argues that
there is nothing controversial about this conclusion because the amount payable after
the date of divorce would not, on the reading of De Kock, fall into the joint estate.
8
[33] In light of this decision, it is clear that the gratuity r eceived by the Defendant
from GEPF upon his retirement constitutes part of the joint estate, and the Plaintiff is
entitled to a 50% share of it. Similarly, the monthly pension payments form part of the
joint estate, and the Plaintiff is entitled to a 50% share of it.
[34] The Defendant contended that CM v EM is entirely distinguishable from the
current case, as Maya P (at the time) was managing a living annuity, which constitutes
a different form of investment compared to the monthly income payable by the pension
fund. Furthermore, the parties in CM v EM were married out of community of property
with accrual, and the court was considering principles related to the calculation of the
estate's accrual.
[35] The Plaintiff does not have any legal or factual basis to receive half of the
Defendant’s future monthly payme nts after the divorce. The Defendant’s pension
benefit already received has accrued, but the Defendant is no longer a member of a
pension fund; therefore, sections 7(7) and 7(8) of the Act are no longer applicable.
Issues of common cause
[36] The parties agree that their marriage has irretrievably broken down and that a
decree of divorce should be granted. The parties also agree that there should be an
equal share of the joint estate. The Defendant has retained 50% of the pension gratuity
received pending the outcome of the divorce action.
[37] The Plaintiff is currently employed as a nurse and is a member of the GEPF.
There is an endorsement made on the record of her pension fund for the Defendant’s
50% pension benefit.
Issues to be decided
[38] This court must consider whether the Plaintiff is entitled to receive payment in
the amount of R 544 210.24, being half of the gratuity received by the Defendant upon
his retirement, together with interest thereon at 10.5% per annum from 1 April 2022 to
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the date of payment. Further, whether the Plaintiff is entitled to 50% of the Defendant’s
monthly pension income.
The legal principles
[39] Parties married in community of property , and pursuant to the matrimonial
regime of in community of property, the spouses own the assets of the join t estate in
an equal undivided share, meaning that the assets cannot be divided while the
marriage subsists, and no rights can accrue exclusively to one of the spouses while
the marriages subsist. 9 The general rule is that the entirety of the assets of both
spouses, both prior to and during the marriage, form part of the joint estate.10
[40] Section 1(1)(a) of the Divorce Act defines the pension benefit as follows:
“is a member of a pension fund (excluding a retirement annuity fund), means the
benefits to which that party as such a member would have been entitled in terms of
the rules of that fund if his membership of the fund would have been terminated on the
date of the divorce on account of his resignation from his office;”
[41] Section 1 of the Pension Law defines benefit as an annuity or gratuity or both
annuity and gratuity, whichever the case may be. In GN v JN11 the Supreme Court of
Appeal said the following regarding the pension interest: “the language of section
7(7)(a) is clear and unequivocal. It vests in the joint estate the pension interest of the
member spouse for the purpose of determining the patrimonial benefits to which the
parties are entitled as at the date of their divorce.”
[42] In Government Employees Pension Fund v Naidoo and Another ,12 it was held
that:
“Where a pension benefit accrues to a member of the Government Employees Pension
Fund who is married in community of property, the benefit accrues to the joint estate
9 Robinson “Matrimonial Property Regimes and Damages: The Far Reaches of the South African Constitution”
(2007) 3 PER 3.
10 Id at 4.
11 2017 (1) SA 342 (SCA) at para 26.
(2007) 3 PER 3.
10 Id at 4.
11 2017 (1) SA 342 (SCA) at para 26.
12 2006 (6) SA 304 (SCA) at headnote.
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and the non-member spouse acquires an undivided half -share in the benefit. Upon
divorce, the non-member spouse becomes entitled to payment of his or her half-share
of the benefit. . .”
[43] In Eskom Pension and Provident Fund v Krugel ,13 the court held that in the
event that the pension benefit has been paid, at such time the “pension interest”
equates to a “pension benefit” and the provisions of sections 7(7) and 7(8) are no
longer applicable.
[44] With section 7(1) and 7(8) no longer applicable, in De Kock v Jacobson and
Another14 it was held that:
“The question then remains whether the right to the pension is part of the community
of property. There is to my mind no reason in principle why the accrued right to the
pension should not form part of the community of property existing between the parties
prior to the divorce.”
And further, “The right to a pension is a right which rests in the parties to a marriage
in community of property in undivided shares.”15
[45] The Supreme Court of Appeal reaffirmed this approach in CM v EM ,16 where
the following was stated:
“The court cited with approval two judgments. First was Clark v Clark , in which the
court accepted that a spouse’s interest in a pension which had not yet accrued did
indeed form part of the community estate, as did a pension right which had accrued.
The second one was a case of this court, Commissioner for Inland Revenue v Nolan’s
Estate, which reaffirmed that the right to a pension is a right which vests in the parties
to a marriage in community of property in undivided shares. The court in De Kock
concluded that there was no logical or legal reason why both the cash component and
the accrued right to the pension should not form part of the community of property
existing between the parties prior to the divorce.”
13 2012 (6) SA 143 (SCA) at para 11.
14 De Kock above n 4 at 349G-H.
15 Id at 350C.
16 CM v EM above n 5 at para 37.
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[46] It follows then that if a pension benefit is paid before the finalisation of the
divorce proceedings, the pension benefit will form part of the joint estate along with
the other assets of the joint estate , and this is done to determine the patrimonial
benefits to which the parties are entitled as at the date of their divorce.
Evaluation of the application
[47] I find the Plaintiff’s 10.5% interest claim to lack a legal basis and not be sound
in law. The joint estate can only be divided at divorce, and in this case, the gratuity
paid out to the Defendant by the pension fund forms part of the joint estate, and
therefore, no interest can be claimed on it.
[48] As alluded to in B.S.M v N.A.M:17
“… the pension interest is simply a value calculated as of the date of divorce. It is that
“value” which falls into the reckoning of the total value of the basket of assets , along
with all the other assets in the joint estate. The marriage between the two parties still
subsists. The gratuity received by the defendant still forms part of the joint estate;
interest can only be claimed as of the date of the divorce.”
[49] It is thus established that the reciprocal duty of support terminates at divorce as
per the case referenced by the Defendant.18 In that case, the reciprocal duty of support
was determined concerning a spousal maintenance claim, as is the case with other
instances where the reciprocal duty of support applies.19 As correctly put by the
Defendant, in this case, the Plaintiff is not claiming spousal maintenance. Instead,
she’s asserting her right to claim in the joint estate of the parties. Upon dissolution of
a marriage in community of property, both parties have a right to claim their half share
of the joint estate, which is inclusive of all the assets minus liabilities accumulated
during the marriage. Therefore, the reciprocal duty of support finds no application in
this case.
this case.
17 [2016] ZALMPPHC 2 at para 11.
18 Ex Parte Standard bank Ltd and Others 1978 (3) SA 323 (R).
19 See also Strauss v Strauss 1974 (3) SA 79 (A); Schutte v Schutte 1986 (1) SA 872 (A); Zwiegelaar v
Zwiegelaar 2001 (1) SA 1208 (SCA); WB v PB 2024 JDR 4142 (FB) and others.
12
[50] The Defendant concedes that the gratuity amount forms part of the assets of
the joint estate as accrued upon retirement, and he further concedes that this amount
should be shared between the parties, however, the Defendant’s assertion, relying on
Rule 14.2.6 of the Pension Law and GEPF Rules, that the annuity is separate from the
gratuity and should be treated separately, is misplaced. The benefits accrued to the
Defendant at retirement encompass the monthly annuity payments.
[51] Paragraph 17 of the Defendant’s heads or arguments reads thus:
“From the reading of the Pension Law and Rules, it becomes clear that the defendant
is only entitled to the annuity before or on the last day of each month. Before then, the
annuity is not due, with the result that he has no right to claim it.”
Therefore, the term “payable” in Rule 14.2.6 does not equate to when the entitlement
accrues. The right to the annuity accrue s at retirement, not before or on the last day
of each month. This interpretation by the Defendant is incorrect when regard is also
had to section 1 of the Pension Law, which defines a benefit as an annuity, a gratuity,
or both, whichever the case may be. The benefits accrued at retirement, and as per
CNN v NN,20 if the member receives the benefit during the marriage, such benefit will
constitute part of their joint estate if married in community of property or part of the
growth of their estate if married with the accrual system.
[52] It is therefore not the case that the entitlement to the annuity only accrues when
it is payable. There is no legal basis upon which the annuities can be said to accrue
at every month like a monthly salary.
Conclusion
[53] Having concluded that the monthly annuity payments do form part of the joint
estate, I am of the view that the court is not in an informed position to make an
equitable order regarding the division of the joint estate, and is, therefore, in no position
equitable order regarding the division of the joint estate, and is, therefore, in no position
20 2023 (5) SA 199 (GJ) at para 19.
13
to order that the Plaintiff receive 50% of the Defendant’s pension monies (both the
gratuity and the annuity). The order can only be granted in cases where the parties
have reached a settlement, and the court is able to order such. However, in cases
where the parties are not ad idem, I concur with the Defendant’s submission that the
services of a liquidator are warranted.
[54] In M.P v P.G.P ,21 referencing Botha NO v Deetlefs and Another ,22 the court
stated that:
“Where parties cannot agree on how to divide the joint estate, then either one or both
of them may approach the courts for the appointment of a receiver and liquidator.”
At para 21, the court went further and stated:
“However, in exercising its discretion, a Court should also have regard to the nature of
the estate and the extent of the dispute as to division. For instance, in the case of
Schoeman v Rokeby Farming Co (Pty) Ltd 1972 (4) SA 201(N) at 206D-G the Court,
in deciding whether or not the size of the joint estate justified the appoint ment of a
receiver and liquidator, held that:
‘[The Plaintiff] could claim the appointment of a liquidator … In this case,
however, there does not seem to be any practical purpose in doing so. ‘There
are no difficulties with regard to capital contributions, and it is simply a question
of determining the expenses that have been incurred in the farming operations.
The farming activities do not appear to have been particularly complex, nor did
they extend over a long period. The partnership has been of a very restricted
nature. In these circumstances, it appears to me to be unnecessary to go
through the formality of having a liquidator appointed ... .’”
[55] It is my view that the appointment of a liquidator is warranted to ascertain and
realise the assets of the joint estate, as there is not enough information placed before
the court to enable it to make such a determination. On the face of it, the Plaintiff’s
the court to enable it to make such a determination. On the face of it, the Plaintiff’s
calculation is too simplistic. It does not take into account other actuarial factors that
could come into play, such as tax implications (if the income from your annuity exceeds
21 [2023] ZAGPPHC 1845 at para 20.
22 2008 (3) SA 419 (N) at para 15.