THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
REPORTABLE
Case number: 364/2003
In the matter between:
ANDRÉ BEZUIDENHOUT APPELLANT
and
DORETTE GERARDA BEZUIDENHOUT RESPONDENT
CORAM: HARMS, SCOTT, FARLAM, BRAND et
HEHER JJA
HEARD: 27 AUGUST 2004
DELIVERED: 23 SEPTEMBER 2004
Summary: Divorce – redistribution of asse ts in terms of s 7(3) of Act 70 of
1979 – 'general guide' of equal division ad opted by English courts – not part
of our law – considerati on that traditional role of wives should not be
undervalued inappropriate in matter where wife has not assumed that role.
_____________________________________________________
JUDGMENT
BRAND JA/
2
BRAND JA:
[1] This appeal concerns an asse t redistribution order in terms
of s 7(3) of the Divorce Act 70 of 1979 ('the Act'). The parties to the
appeal were married to each ot her on 25 October 1975 when the
appellant (the husband) was 26 and the respondent (the wife) 20
years of age. The appellant wa s a qualified tool and die maker
while the respondent was a secretar y. They had no assets worthy
of mention. The future propriet ary regime of their marriage was
governed by an antenuptial contra ct in the st andard form. It
excluded both community of prope rty and of profit and loss – and
thus, by implication, any form of accrual sharing – between the
prospective spouses.
[2] A son, William, was born of t he marriage in 1977. He is the
only child of the parties. For about 25 years t he marriage was a
happy one. By all accounts, the parties not only cohabited as
husband and wife, they were also business partners and they
shared their social life. They both succeeded in building up estates
of considerable proportions, though the net value of the appellant's
estate exceeded that of the resp ondent's by a substantial margin.
For reasons that are not entirely clear, this fortunate state of affairs
came to an end in 2001. At t he beginning of 2002, the respondent
3
left the common home and instit uted divorce proceedings against
her husband in the Cape High Court. Apart from a decree of
divorce, the only substantive re lief that she sought was an order
for the redistribution of their asse ts under s 7(3) of the Act, on the
basis that the combined value of their estates be divided in half.
The appellant filed a counterclai m in which he also sought a
redistribution order but, of course , on a basis which was materially
different.
[3] On the pleadings it was common cause that the marriage
could not be saved. In t he light of this the court a quo (Pincus AJ)
granted a decree of divorce. T hat order is not under attack on
appeal. As to the claim and coun terclaim for a redistribution of
assets, the effect of the court's order was that the parties were to
retain the assets in their respective estates, save that the appellant
was directed to pay the respondent an amount of R7,8m. This was
the result of the court esse ntially endorsing the respondent's
contention that the combined net value of the assets in both
estates should be divided on an equal basis. The judgment of
Pincus AJ has since been reported sub nom Bezuidenhout v
Bezuidenhout 2003 (6) SA 691 (C). This appeal against that
judgment is with the leave of the court a quo.
4
[4] Broadly stated the appellant's contentions on appeal were
twofold. First, that the nature and extent of the respondent's
contribution to the appellant's estate did not warrant an equal
distribution of their combined asse ts. Second, that in any event,
the effect of the court a quo's order was that the respondent would
receive more than an equal sha re. In support of the latter
contention it was argued that, while the assets allocated to the
respondent were either in the form of cash or readily realisable, the
assets retained by the appellant consisted largely of shares in
private companies which coul d not easily be sold. A proper
evaluation of these contentions re quires first, an outline of the
nature and the net value of the asse ts of the parties and second, a
truncated version of their marital history.
THE ESTATES OF THE PARTIES
[5] During the course of the tria l, various issues arose regarding
the value of some of the assets in the parties' estates. Notable
amongst these were disputes relati ng to the value of their shares
in three private companies viz Grinding Techniques (Pty) Ltd,
Andor Abrasives (Pty) Lt d and Prosper Propert ies (Pty) Ltd which,
as will presently appear in more de tail, collectively formed the
vehicle for the conduct of the fami ly business. At the end of the
5
proceedings, these issues were , however, for the most part
eliminated by agreement. Insof ar as disputes remained for
determination by the trial court, it was formally conceded by the
appellant in this court that there was no reason to interfere with the
court's findings in para 18 of it s judgment. In the event, it can be
accepted that the assets and liabilit ies in the estates of the parties
were as follows:
The respondent's assets:
40% shareholding in Grinding Techniques R4 614 000
9,98% shareholding in Andor Abrasives R 641 325
27,27% shareholding in Prosper Properties R 37 000
Keurview Share Block R2 000 000
Audi TT motor vehicle R 340 000
Pension or provident benefit R 333 000
Insurance policies - surrender value R 62 754
Standard Bank savings account R 30 000
Old Mutual shares R 3 240
Total R8 061 319
Since the respondent had no liabilities, that was also the net value
of her estate.
6
The appellant's assets:
60% shareholding in Grinding Techniques R8 142 000
80% shareholding in Andor Abrasives R6 036 000
49% shareholding in Prosper Properties R 67 000
Kaboega game farm R6 315 000
Gyroplane R 175 000
Muldersdrift home (in which the appellant resides) R 975 000
Savings account R 295 593
Loan account in Grinding Techniques (No. 1) R1 085 034
Loan account in Grinding Techniques (No. 2) R 423 449
Loan account in Andor Abrasives R 196 819
Life policies - surrender value R 194 819
Provident fund benefit R 635 217
Shares in listed companies R 14 096
Total R24 455 027
The appellant's liabilities
Debit loan account in Prosper Properties R 577 520
Amount owing on gyroplane R 167 400
Total R 744 920
The net value of the assets in the appellant's estate therefore
amounted to R23 710 127 and the combined net value of both
estates to R31 771 446. The di fference between half that amount
7
(ie R15 885 723) and the net value of the respondent's estate (ie
R8 061 319) is the R7,8m which the appellant was ordered to pay
over to her.
THE MARITAL HISTORY
[6] At the time of their marriage in 1975, the parties were living
in Port Elizabeth. The respondent was employ ed as a secretary
while the appellant, though qualif ied as a tool and die maker,
worked as a salesman for a co mpany, Norton Abrasives. The
company was involved in the manufacturing and marketing of what
are known in the trade as 'abrasives', consisting mainly of grinding
wheels and sandpaper p roducts. The appellant was excellent at
his job and in 1976 he was promot ed by Norton Abrasives to the
position of sales supervisor in Johannesburg. T here the parties
moved into a cottage on a sm allholding which the respondent
made habitable. While she cont inued to be employed as a
secretary, she also took responsibility for running their household.
[7] In 1977 their son, Willia m, was born a nd the respondent
stayed at home for three years to look after him. In 1980, when
William went to nursery school, she went back to work on a half
day basis. She did not stay at ho me again for the remainder of her
married life. Though the respo ndent appears to have been the
8
primary caregiver, both parties to ok responsibility for William until
he went to boarding school at the age of about thirteen.
[8] In 1981 the appellant decided, after discussion with the
respondent, to start his own business. He continued to buy and
sell grinding wheels and sandpa per products, but for his own
account. He did so through a company, incorporated for the
purpose, by the name of Grinding Te chniques of which he was the
sole shareholder and director. The parties worked as a team. They
operated from their cottage on the smallholding. The business was
financed by a loan from a bank for which both parties signed
personal surety. For their livi ng expenses, they were largely
dependent on the respondent's salary. In the evenings she also did
the bookkeeping and the administ ration for the new business. The
appellant occupied his time by ca nvassing orders from customers
which he then physically colle cted and delivered. When his
competition sought to prevent him from obtaining local supplies, he
began importing them from abroad . Both worked very hard and
long hours. As a result, they did not have much of a social life.
They had little money and lived frugally.
[9] From these humble beginni ngs, the business grew. In 1985
there was, however, an occurrenc e which might very well have
9
stopped the business in its tracks. It came in the form of a dramatic
devaluation of the rand against other major currencies. Since by
then most of the products sold by Grinding Techniques were
imported from overseas, the com pany's indebtedness to its
suppliers was in foreign currency . Consequently its liabilities
increased overnight in rand terms to an extent that placed it in
financial difficulty. Unlike most ot hers in his position, the appellant
saw this as a business opportunit y. He persuaded his banker to
grant Grinding Techniques a furthe r loan, which he then utilised to
purchase second hand machinery in Europe. With that machinery
the business not only survived but by venturing into the
manufacturing of abra sive products continued to expand. The
respondent resigned from her employment and joined the
company on a fulltime basis. During more or less the same period,
the parties bought a house at Muldersdrift near Johannesburg,
which was registered in the name of the appellant. This became
the matrimonial home where the appellant remai ned resident at
the time of the trial.
[10] The expansion of the bu siness over the years was
remarkable. Grinding Techniques became a formidable force in a
highly competitive market which won over a significant market
10
share from its competitors. At the time of the trial it employed 254
people. According to the res pondent's own evidence, the
extraordinary success of the busi ness was mainly attributable to
the appellant's rare ability to anticipate future trends in the grinding
wheel market, combined with hi s technical expertise in the
manufacturing of these specialised products and his proficiency as
a salesman. The expert accoun tant, who was called on behalf of
the respondent to testif y as to the value of the parties' shares in
the private companies which eventually owned the business, also
ascribed its success to the applicat ion of appellant's talents, which
made him an outstanding businessm an and an exceptionally good
manager.
[11] The respondent continued to devote herself to the business
on a fulltime basis while also ma intaining responsibility for the
household with the aid of a domes tic assistant. Initially she was
directly responsible for the admin istration of the business. Later
she became the financial direct or of Grinding Techniques. She
remained in control of the adminis trative section, which eventually
comprised 26 employees. As part of her responsibilities, the
respondent opened new branches and trained the administrative
staff. She acted as a sounding b oard for the appellant and she
11
entertained friends and customers who had dealings with the
company. In the end there is no reason to doubt the accuracy of
the respondent's own description t hat both parties 'lived, ate and
slept Grinding Techniques' and that she 'worked shoulder to
shoulder with [the appellant] in pulling this cart.'
[12] With the expansion of t he business the company structure
became more sophisticated. In essence, Grinding Techniques
became the 'trading arm' of the bus iness. The movable assets of
the business were held by Andor Abrasives, while the immovable
property from which the business operated was registered in the
name of Prosper Properties. Altho ugh initially the appellant was
the sole shareholder and director of Grinding Techniques, the
respondent later on rec eived shares in a ll three companies. As
already indicated, she also bec ame the financial director of
Grinding Techniques. The positi on regarding the shareholding of
the parties in the three companies, as at the time of the trial,
appears from the list of their assets in para [5] above.
[13] The success of the business brought in it s wake substantial
financial advantages for both partie s. While initially they were
compelled to live modestly, their position improved rather markedly
during the course of the marriage. Eventually the parties, by all
12
accounts, maintained the lifestyle of those with virtually unlimited
funds, including extravagant entertainment and expensive
holidays.
[14] In 1990, when William went to high school, he became a
boarder at the school formerly atte nded by his father in Graaff-
Reinet. He received regular visits from his parents over weekends.
Since Graaff-Reinet and J ohannesburg are about a thousand
kilometres apart, driving up an d down over weekends became
somewhat of an ordeal for the parents. As a result, they decided to
buy an aeroplane. First they bought a small Cessna and then a
bigger one. At the time of the tria l, both these aeroplanes were still
owned by Andor Abrasiv es. In order to fly the aeroplanes both
obtained private pilot's licences. In the end the respondent became
so fond of flying and so accomp lished as a pilot that when she left
the appellant and their busine ss at the beginni ng of 2002, she
decided to take up flying as a career. For that purpose, she
required a commercial pilot's licence. At the time of the trial, that
goal, however, remained unfulfilled.
[15] With the passing of time the parties also succeeded in
accumulating substantial assets in their own estates, apart from
the shares in the companies. In 1992 the appellant was offered a
13
25 per cent shareholding in a milling company called Sebowana
Mills (Pty) Ltd. He was not required to pay any money for the
shares but he had to put up a bank guarantee of R1m. The
transaction turned out to be an excellent investment. The
guarantee was never called up and in 1996 the appellant sold his
shareholding in Sebowana Mills at a profit of R2m. The appellant
also acquired a game farm called Kaboega in the P ort Elizabeth
area. At the trial this farm was valued at R6,3m. About 1998 the
parties purchased shares in a share block company, Keurview
Share Block (Pty) Ltd, which prov ided them with two property units
near Plettenberg Bay upon which they built their holiday house.
These shares, which were held by the respondent, were valued at
R2m.
THE JUDGMENT OF THE COURT A QUO
[16] On behalf of the respondent it was contended that since the
redistribution order grant ed by the court a quo involved the
exercise of the discretionary pow er conferred by s 7(3), the room
for this court to interfere is lim ited. It cannot, so the respondent
contended, substitute its own discret ion for that of the trial court's
simply because it would have pref erred a different result. It can do
so only if the trial court ha d failed, through misdirection or
14
otherwise, to exercise its discreti on properly. It is clear that these
contentions are directly supported in the judgment of Botha JA in
Beaumont v Beaumont 1987 (1) SA 967 (A) 988H-989A; 1002A-E.
[17] The appellant's count er-argument was that Beaumont had
been overtaken by later judgment s of this court, such as, Media
Workers Association of Sout h Africa and others v Press
Corporation of South Afri ca Ltd ('Perskor') 1992 (4) SA 791 (A)
796H-I and 800E-G and Knox D'Arcy Ltd and others v Jamieson
and others 1996 (4) SA 348 (A) 361G-I. In these judgments, both
of EM Grosskopf JA, a distinction is drawn between two categories
of discretionary powers. These two categories can conveniently be
described as 'a discretion in th e broad sense', on the one hand,
and a 'discretion in the narrow or st rict sense' on the other. The
essence of a discretion in the latter sense, so Grosskopf JA
explained, involves a choice bet ween two or more different, but
equally permissible, alternatives , while the former means no more
than a mandate to have regard to a number of disparate and
incommensurable features in arrivi ng at a conclusion. It is only
when the exercise of a discretion is in the strict or narrow sense,
Grosskopf JA said, that an app eal court's powers of interference
are limited, because it is the esse nce of such a discretion that, on
15
the same facts, different minds ma y legitimately arrive at different
conclusions. With regard to the exercise of a discretion in the
broad sense, he said, there is no reason why the powers of an
appeal court should be so restrict ed. Since these matters can be
determined equally appropriately by an appeal court, the latter may
substitute its own discretion for that of the trial court. The mere fact
that a discretion is described as 'wide', Grosskopf JA added, does
not mean that it is necessarily a discretion in the strict sense. It
only means that the trial court is entitled to have regard to a wide
range of disparate and incommensurabl e factors in arriving at its
decision.
[18] In view of these later dec isions, the appellant argued, the
appropriate category fo r the discretion conf erred upon the trial
court in terms of s 7(3) of the Act, is that of discretions in the broad
sense. Consequently, the argum ent went, s 7(3) confers an
equally unfettered discretion on this court to make the
redistribution order that it may deem just and to substitute the
result of that exercise for the order made by the court a quo. I find
this argument attractive in it s logical progression and I have no
doubt that it will be raised again. However, for present purposes it
is unnecessary to decide its validity. In the ligh t of the view that I
16
hold regarding the outcome of this matter, I am prepared to
assume, without deciding, that a mi sdirection by the trial court is a
prerequisite for this court's interf erence with the decision of that
court.
[19] In establishing the legal f oundation for his decision, Pincus
AJ devoted a substantial part of his judgment (paras 23, 24 and
27-39) to a relatively new approach by the English courts, which
was ultimately endorsed by the House of Lords in White v White
[2001] 1 AC 596 (HL (E)); [2001] 1 All ER 1 (HL). This accepts that
as a general guide, or starting po int, the combined assets of the
parties should be divided equally and that this principle should be
departed from only if and to the extent that there is good reason for
doing so (see eg White v White supra 605G-H; 9e-f). Closely
aligned to this approach is the question sometimes posed by the
English courts, which is also referred to by the court a quo (paras
27-29 and 37), namely 'what more the wife could have done to
justify an award of 50%?' If the answer to this is that she had done
her utmost and that therefore s he could not have done more, it is
accepted as a matter of course th at there is no justification to
deviate from the equality principle (see eg Lambert v Lambert
[2003] Fam 103 (CA); [2003] 4 All ER 342 (CA), paras 14 and 53).
17
[20] Though comparative legal stud y obviously has great value,
English cases should be approac hed with circumspection in the
present context. They emanate from the application of statutory
provisions different from ours whic h, in turn, are to be construed
against an entirely different common law system. It is clear that the
English statute (s 25 of the Matrimonial Causes Act 1973 as
substituted by the Matrimonial and Family Proceedings Act 1984)
affords the courts an even wider di scretion than s 7(3) of our Act
(see eg B Clark and B J van H eerden, "Asset Distribution on
Divorce – The Exercise of Judicial Discretion", (1989) 106 SALJ
243 at 247). So, for example, a co ntribution by a claimant spouse
to the estate of the other spouse is not a jurisdictional prerequisite
for redistribution in England as it is in terms of s 7(3).
Consequently, the English courts need not consider the nature and
extent of the claimant's contribut ion to the estate of the other
spouse at all, whereas, in terms of our s 7(3), it is the pre-eminent
consideration (see eg Beaumont v Beaumont supra 989B).
Although I do not understand our legislature to require a
meticulous mathematical calculat ion of each part y's contribution,
the fact remains that our court s are not entitled as a matter of
course to 'divide the joint ne t assets of t he parties equally,
18
regardless of their respective known and unequal contributions'
(per Milne JA in Kritzinger v Kritzinger 1989 (1) SA 67 (A) 77F-G).
[21] As to the different comm on law systems underlying the
different statutory provisions, it is a well known fact that our
common law provides for marriages in community of property as
the norm while the English system does not. The result is that,
unlike in England, a marriage can in our law only be concluded out
of community of property if the parties consciously elect to do so in
terms of an antenuptial agreem ent executed before a notary
public. Of course we know that these contracts often led to great
inequity and unfairness, particul arly towards wives who performed
their traditional role. Th is, after all, was the raison d'etre for the
enactment of s 7(3). Neverthele ss, its formulation reflects a
deliberate choice on the part of t he legislature to limit the courts'
discretion in interfering with the contractual election – good or bad
– made by the parties when they en tered into their marriage. For
instance, the section only applie s to marriages that were entered
into prior to the commencement of the Matrimonial Property Act 88
of 1984 on the basis of an ant enuptial contract. With regard to
marriages entered into subsequent ly, in terms of an antenuptial
contract, the section finds no application at all. (They are governed
19
by Ch 1 of the Matrimonial Property Act 88 of 1984.) Women
whose marriages were entered into later and with the exclusion of
the accrual system may therefor e be in the same disadvantaged
position as before. Some suggest that the legislature was too
conservative and the reasons for it s choice difficult to understand
(see eg June Sinclair, An Introduction to the Matrimonial Property
Act 1984, 49-52). One can sympathise wi th these views. The fact
remains, however, that the cour ts cannot go further than the
legislature allows them to go and that the le gislature does not
allow them to treat all marriages upon divorce as if they were in
community of property and without an antenuptial contract.
[22] Moreover, the acceptance of equal distribution as a starting
point or general guide as part of ou r law would be in direct conflict
with the decisions of this cour t, as appears from the following oft
quoted dictum by Botha JA – with ref erence to the one-third
starting point advocated by Lord Denning MR in Wachtel v
Wachtel [1973] Fam 72 (CA) 94B-95F; [1973] 1 All ER 829 (CA)
839b-840d – in Beaumont v Beaumont supra 998F-G:
'I do not see any real difficulty in star ting with a clean slate, then filling in the
void by looking at all the relevant facts and working through all the relevant
20
considerations, and finally exercising a discretion as to what would be just,
completely unfettered by any starting point.'
[23] I find myself in respectful agreement with this statement. I
also believe that courts should ref rain from putting shackles on a
discretionary power which the legislature has left largely unfettered
through the acceptance of 'start ing points' or 'guidelines' (see
Beaumont 991G-H). Though practition ers may, understandably,
prefer guidelines or formulae which may assist in settlement, the
problem is that there is such 'an infinite vari ety of circumstances
under which s 7(3) falls to be applied' (Beaumont 990G-H) that we
cannot afford to trade the wide discretion of s 7(3), once it is found
to apply, for formulae albeit in t he guise of 'guidelines' or 'starting
points'.
[24] These views with regard to eq ual division as a starting point
are also in accordance with th e approach of the Australian High
Court, as appears f rom the following dictum by Gibbs CJ in Mallet
v Mallet (1984) 156 CLR 605 at 610:
'… Parliament has not prov ided, expressly or by im plication, … that there
should, on divorce, either generally, or in certain circumstances, be an equal
division of property, or that equality of division should be the normal or proper
starting point for the exerci se of the court's discret ion. Even to say that in
21
some circumstances equality should be t he normal starting point is to require
the courts to act on a pr esumption which is unauthorized by the legislation.
The respective values of the contri butions made by the parties must depend
entirely on the facts of the case and the nature of the final order made by the
court must result from a proper exercise of the wide discretionary power …
unfettered by the application of supposed rules for which the Family Law Act
provides no warrant.'
[25] It is not entirely clear what role the court a quo assigned to
the English decisions f rom which it quoted so extensively. On the
one hand Pincus AJ expressly admonished himself (in para 22)
that a starting point of equal divisi on would be in conflict with the
decision of Botha JA in the Beaumont case. He also disavowed
any proposal (in para 23) of a 50/ 50 split as a starting point in our
law. Nevertheless, he referred (i n para 25) with apparent approval
to two unreported judgm ents of the Cape Hi gh Court in which it
was stated, for instance, with reference to the White case that:
'I agree with the approach now adopted in Britain and parts of the
Commonwealth and I find no r eason at all to depart from equality on the facts
of the present case.'
[26] For the reasons given, t he approach 'now adopt ed in Britain'
does not form part of our law and st atements like these can only
lead to confusion of thought su ch as appears to be indicated by
22
the consideration expressed by Pincus AJ (in para 40), that
because the respondent has done her utmost, her contribution
must inevitably be afforded equal weight to that of the appellant.
[27] A thesis which obviously weighed heavily with the court a
quo and to which it also devoted a substantial part of its judgment
(paras 40-48), was that it would be in conflict with the anti-
discrimination provisions in s 9 of our Constitution to undervalue
the role of housewife and mo ther traditionally conferred upon
women by society. In developing th is theme, Pincus AJ referred,
for example (in para 45), to th e following statement by the
Supreme Court of Canada in Moge v Moge [1992] 3 SCR 813:
'Fair distribution does not, however, mandate a minute detailed accounting of
time, energy and dollars spent in the day to day life of t he spouses … . What
the Act requires is a fair and equitable distribution of resources to alleviate the
economic consequences of marriage or marriage breakdown for both
spouses, regardless of gender. The reality, however, is that in many if not
most marriages, the wife still remain s the economically disadvantaged
partner. …
A division of functions between the marriage partners, w here one is a wage-
earner and the other remains at hom e will almost invariably create an
economic need in one spouse during marriage. …
23
Women have tended to suffer economic disadvantages and hardships from
marriage or its breakdown because of the tr aditional division of labour within
that institution.'
[28] I find myself in agreement with the thesis that the traditional
role of housewife, mother and homemaker should not be
undervalued because it is not m easurable in terms of money. The
plain fact is, however, that this consideration has nothing to do with
the facts of this case. The respondent never assumed the
traditional role. She was the fin ancial director of a company. Her
responsibility for William she la rgely shared with the appellant and
although she took responsibility for their household, she never
claimed this to have been her real contribution to his estate. That
much was apparent from her plea dings and was confirmed by her
counsel during oral argument. Her ma jor contribution to his estate
was through her efforts in their joint business where she spent
almost all her time and where she worked, as she said, shoulder to
shoulder with the appellant.
[29] Obviously, the respondent's ad ditional contribution as mother
and homemaker must be afforded due weight. That will be done.
Nevertheless, in the circumstances, the considerations advanced
by the court a quo (in para 49), as part of its reasons for splitting
24
the proceeds of the marriage on a 50/50 basis, that the respondent
was 'a dedicated housewife, moth er and housemak er' and that it
would be unacceptable 'to place greater value on the contribution
of the breadwinner than that of the homemaker', were clearly
inappropriate. The same holds true for the further statement (in
para 40) that 'the traditional ro le played by a South African
housewife in the plaintiff's position cannot be held against her'.
[30] For the reasons given, thes e statements reflect a clear
misdirection on the part of the court a quo in the exercise of its
discretion. But for this misdirec tion, the court would have realised
that in this matter, unlike in most other matters, the contributions of
the parties can in fact be com pared because the efforts of both
were aimed at the promotion of the same business. Had this
comparison been done, the court would have noted two material
differences between the respective contributions of the parties.
First, according to the respondent 's own evidence, it was the
appellant's efforts, not hers, wh ich caused the business to be
exceptionally successful as op posed to just average. Second,
since the success of the whole business was dependent on the
efforts of the appellant, he was also, indirectly, responsible for
whatever resulted from the respondent 's efforts. But for the court's
25
misdirection, it would therefore have realised that its conclusion (in
para 49), that the contributions of the parties were equal, could not
be justified. Since this conc lusion formed the keystone to the
court's ultimate decision, the misdirection was undoubtedly
material.
[31] A further objection raised by the appellant was that the court
a quo had failed to have regard to the nature of the assets in the
respective estates. The argument in support of this objection was
that some adjustment should ha ve been made in his favour for the
fact that the respondent retained her shares in Keurview (which is
in effect a valuable, unbonded property), and would receive
payment in the form of cash, wh ile most of what the appellant
retained is tied up in shares in private companies, which are not
readily realisable. I do not believe this objection to be valid. About
half of the respondent's assets are also tied up in shares in the
same companies. What pl aced her at an even greater
disadvantage, is that she is a minority shareholder in companies
controlled by the appellant, which had never declared any dividend
in the past and were unlikely to do so in the foreseeable future.
[32] What should in my view hav e been of more concern to the
court a quo , was the appellant's objection that if he were
26
compelled to pay an amount as large as that which the court
eventually decided upon, it could place the companies in jeopardy.
The appellant's evidence in this regard was that the companies
had an overdraft facility of R10m of which about R4,5m had been
taken up. According to his further undisputed testimony a business
that operates close to the limit of its ov erdraft runs the risk of
having its overdraft facilities redu ced. In cross-examination,
various suggestions were made to the appellant as to how a
payment to the respondent co uld be funded. It was apparent,
however, that each of these sug gestions would create difficulties
or disadvantages of its own. So , for instance, t he suggestion that
one or both of the aeroplanes owned by Andor Abrasives – which
were valued at about R2,3 and R1 ,4m, respectively – could be
sold, was met by the response that a substantial portion of the
proceeds of the sale would be paya ble to the fiscus, since the sale
would constitute a recoupment of past tax deductions. The
suggestion that Kaboega game farm could be sold as a whole or in
part, raised the difficulty that, si nce the farm formed part of the
bank's security for the overdraft of the companies, the sale of the
farm would probably cause the ov erdraft limit to be reduced. The
court a quo dismissed these problems with the comment (in para
51) that, if the appellant 'wishe s to borrow money, as opposed to
27
selling what the parties called his "toys", then he must "bear the
costs of so doing" '. This in my view amounted to an over
simplification of the undisputed difficulties for the companies raised
by the appellant, which could be to the detriment of both parties.
EXERCISE OF DISCRETION BY THIS COURT
[33] Given the misdirections f ound, this court is obliged to
substitute its own exercise of t he discretion afforde d by s 7(3) for
that of the court a quo. In doing so, the firs t consideration is that
both parties have contributed to the substantial financial success
of the business and that they ha ve both given their all. The
respondent was also th e primary caregiver for William and she
took responsibility for their hous ehold as well. These are obviously
considerations in her favour. On the other hand, while the efforts of
the parties were aimed at the same goal and althoug h their efforts
might have been comparable, t he appellant was much more
influential in achieving this goa l. Without him th e business would,
by all accounts, be no more th an average. Under his management
it became an exceptional success. For the reasons I have given, I
believe that it would be wrong no t to regard this as an important
factor in his favour.
28
[34] Another consideration advanced by counsel for the appellant
was that the respondent had al ready been compensated for her
efforts through the privileges of the affluent lifestyle that the parties
enjoyed during `the later years of their marriage. That, of course, is
true. But, the same holds true of the appellant. I therefore do not
agree that this is a consideration in favour of the appellant at all.
[35] On behalf of the appellant, mu ch was also made of the fact
that the substantial profit of about R2m on the Sebowana Mills
transaction (see para 15 above) was made exclusively through his
efforts. For reasons of both law and fact, I do not agree that this
transaction deserves any special treatment. As a matter of law, s
7(3) does not require a causal link between the claimant's
contribution and every asset in the estate of the other spouse. As a
matter of fact, it is apparent that, but for th e success of the
business, the appellant would not have been able to put up the
R1m bank guarantee required for the transaction. As a
consequence, the transaction wa s made possible through the
success of the busine ss to which the respondent had made her
contribution.
[36] In all the circumstances, the just redistribution contemplated
in s 7(3) will in my view be achi eved if the appella nt is ordered to
29
pay the respondent the sum of R4,5m. This will result in a division
of their joint assets in the ratio of about 60:40 in favour of the
appellant. The reduction in the am ount determined by the court a
quo would also avoid the danger to th e financial survival of the
companies which that determination might have caused.
[37] Pending this appeal, the appellant has made certain
payments in partial performance of the court a quo 's judgment.
The parties were in agreement, however, that we should not
concern ourselves with those payments, nor with the mora interest
that has in the meantime become payable, in the formulation of our
order. In accordance with this agreement, I propose merely to
substitute the sum of R4,5m fo r the R7,8m awarded by the court a
quo and to leave the arithmetical calculation of the exact amount
still owing by the appellant to the parties. The respondent's
counsel also agreed that the app ellant should be afforded a period
of three months from date of this order to make payment of the
amount still owing by him. The order I propose to make should
obviously be understood again st the background of these
agreements.
30
[38] For these reasons, the appeal is upheld with costs, including
the costs of two counsel, and the following order is substituted for
para (b) of the order of the court a quo:
'(b) The defendant is ordered to pay to the plaintiff the sum
of R4,5m.'
……………….
F D J BRAND
JUDGE OF APPEAL
Concur:
HARMS
SCOTT
FARLAM
HEHER JJA