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[2018] ZASCA 37
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BS v PS (291/2017) [2018] ZASCA 37; 2018 (4) SA 400 (SCA) (28 March 2018)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 291/2017
In
the matter between:
BS
APPELLANT
and
PS
RESPONDENT
Neutral
citation
:
BS
v PS
(291/2017)
[2018] ZASCA 37
(28 March 2018)
Coram
:
Lewis,
Willis, Swain, Mathopo and Mocumie JJA
Heard
:
9 March 2018
Delivered:
28
March 2018
Summary:
Divorce
Act 70 of 1979
–
s 7(8)
(a)
(i)
–
50
per cent of respondent’s pension interest in
Government Employees Pension Fund assigned to appellant –
Matrimonial Property Act 88 of 1984
–
s 10
– deferral of
payment of pension interest – precluded in terms of
s 24A
of
Government Employees Pension Law, 1966.
ORDER
On
appeal from:
Eastern
Cape Division of the High Court, Grahamstown
(Bloem
J sitting as court of first instance):
1
The appeal succeeds with costs.
2
Paragraphs 28.3 to 28.7 inclusive of the
order of the court a quo are set aside and replaced with
the
following order:
‘
(a)
The defendant is ordered to make payment of the amount of R433
000 to the plaintiff in satisfaction of the plaintiff's
accrual claim
in respect of the matrimonial home.
(b)
The Government Employees Pension Fund (the Fund) is ordered in terms
of
s 7(8)
(a)
(i) of the
Divorce Act 70 of 1979
, read
together with
s 24A
of the Government Employees Pension Law, 1966
(the GEPL) to make payment to the plaintiff in accordance with the
provisions of
the GEPL, of 50 per cent of the defendant’s
pension interest calculated in accordance with the rules of the Fund,
as at the
date of the decree of divorce, being 1 November 2016, which
is assigned to the plaintiff.
(c)
The registrar of the court a quo is directed in terms of
s
7(8)
(a)
(ii) of the
Divorce Act 70 of 1979
, to forthwith notify
the Fund that pending compliance by the Fund with the provisions of
paragraph (ii) above, an endorsement be
made in the records of the
Fund that 50 per cent of the pension interest of the defendant is
payable to the plaintiff, and that
the administrator of the Fund
furnish proof of such endorsement to the registrar, in writing,
within one month of receipt of such
notification.
(d)
The defendant is ordered to pay the plaintiff's costs.’
JUDGMENT
Swain JA (Lewis,
Willis, Mathopo and Mocumie JJA concurring):
[1]
The issues for determination in this appeal are first whether the
Eastern Cape Division of the High Court (Bloem J), correctly
granted
an order for the partial forfeiture of the benefits of a marriage out
of community of property but subject to the accrual
system, against
the appellant, Ms BS, in an action instituted by her against the
respondent, Mr PS, for a decree of divorce and
ancillary relief.
Secondly, whether Bloem J correctly ordered that payment of the
pension benefit to the appellant be deferred.
[2]
It was common cause before the court a quo that:
(a)
The marriage had
irretrievably broken down and a decree of divorce should be granted.
(b)
The parties had declared in their
antenuptial contract that the net values of their
respective estates
at the commencement of their marriage were ‘nil’.
(c)
The estate of the appellant had not
shown any accrual during the marriage.
(d)
The estate of the respondent had shown
an accrual in respect of two assets. First,
the matrimonial property
valued at R1 450 000 with a bond over the property in an amount of
R584 000, produced a net accrual of
R866 000. Second, the pension
interest of the respondent in the Government Employees Pension Fund
(the Fund), was valued at R4
537 231.
[3]
The portions of the order granted by the court a quo, which are
relevant to the appeal, were as follows:
(a)
In terms of s 9 of the
Matrimonial Property Act 88 of 1984 (the Act), that
the appellant
forfeit 80 per cent of her right to share in the accrual of the
estate of the respondent, in respect of these two
assets.
(b)
That the respondent pay the amount of R173 200 to the appellant
within
two months from the date of the order in satisfaction of the
appellant's 20 per cent interest in the matrimonial property.
(c)
That in respect of
the appellant's 20 per cent pension interest in the respondent’s
pension benefits in the Fund, (calculated as at the date of the
decree of divorce), payment to the appellant by the Fund was deferred
in terms of s 10 of the Act, to the date when the pension
benefits of the respondent in the Fund accrued to the respondent.
The
respondent was ordered to pay interest to the appellant, at the legal
rate on the amount payable to the appellant by the Fund,
from the
date of the divorce to the date of payment.
(d)
That the parties pay their own
legal costs.
[4]
The main reasons advanced by the court a quo for the order of partial
forfeiture of the right of the appellant to share in the
accrual of
the estate of the respondent, were as follows:
(a)
The turning point in the breakdown of the
parties’ marriage was when the appellant
informed the
respondent of her relationship with a certain Mr W. The court a quo
concluded that the appellant had breached her
moral obligation to the
respondent and had thereby caused the breakdown in the marriage.
(b)
The respondent had proved that the appellant
would be unduly benefited if a partial
forfeiture order was not
granted. The court a quo reasoned that because the appellant
contributed to a lesser degree in the accrual
of the respondent's
estate during the marriage, and because her conduct led to the
breakdown in the marriage, she should be ordered
to forfeit 80 per
cent of her right to share in the accrual of the estate of the
respondent. The appellant was therefore entitled
to payment of the
sum of R173 200 in respect of the matrimonial property, being 20 per
cent of R866 000 and 20 per cent of
the respondent’s
pension benefit in the Fund, calculated as at the date of divorce.
(c)
Regard being had to the evidence that
the monthly net income of the appellant and
the respondent was
respectively R59 000 and R20 000, and that the appellant owned a
motor vehicle but did not own a house, whereas
the respondent owned a
house but did not own a motor vehicle, deferral of the appellant's
claim to share in the accrual of the
pension benefit should be
granted.
Reasons
for the breakdown in the marriage
[5]
On a conspectus of the evidence this was not a marriage made in
heaven. Within two years of the parties’ marriage on 1
July
1988 and again during 1996, the appellant was unfaithful to the
respondent and left the marital home, but subsequently returned.
The
respondent for his part admitted that he was also unfaithful to the
appellant at this time. The respondent admitted that they
had argued
a lot, that he was jealous of her, had accused her of having affairs
with other men and that they swore and shouted
at each other. He
agreed there was no longer any love or affection between them and
admitted that the appellant had obtained a
protection order
restraining him from verbally abusing her.
[6]
The marriage was placed under considerable stress during 2014 when
the respondent who is a Lieutenant Colonel and head of financial
services in the South African Police Service, stationed at Aliwal
North at the time, was advised that he was transferred to Port
Alfred
in the Eastern Cape. The respondent was excited by this as he wanted
to retire to the coast. A move was however problematic
for the
appellant as she was employed on a yearly contract by First National
Bank (FNB), and would have been obliged to repay R150
000, if she
moved. She was the main breadwinner with a child (whom she supported)
at university and would have had to start from
scratch in Port
Alfred.
[7]
The respondent attempted to prevent his transfer, but was advised in
December 2015 that his salary would be stopped if he did
not accept
the transfer. On 19 January 2016, after making further
representations, he was ordered to give effect to his transfer
within
seven days.
[8]
The respondent advised the appellant of this turn of events and on
the following morning the appellant handed to him a letter.
The
contents of the letter are hotly disputed by the parties and neither
the original nor a copy could be produced in court. The
respondent
maintains the appellant said she had met her soulmate three days
earlier, who it subsequently transpired was Mr W. The
conclusion he
drew from the letter was that the appellant refused to continue with
the marriage. In his view, the appellant's affair
with Mr W ended the
marriage.
[9]
The appellant denied she said this in the letter. She maintained she
had said she wanted her freedom and could not continue
with the
marriage, because he was a tyrant who swore and shouted at her. She
highlighted the problems in their marriage which had
become so
serious it could not be saved. The appellant asked the respondent to
let her start a new life. According to the appellant,
her affair with
Mr W only started on 24 February 2015 and she later left the marital
home at the beginning of April 2015. She denied
this caused the
breakdown of the marriage, maintaining that it was impossible to live
with the respondent.
[10]
The court a quo erred in concluding that the appellant caused the
breakdown of the marriage. To place all the blame on the
appellant
was not justified by the evidence. The marriage was unhappy from an
early stage, with both parties being guilty of infidelity.
Insufficient weight was accorded to the marriage being placed under
considerable strain by the respondent’s impending transfer
and
the justifiable inability of the appellant to accompany him. There
was no evidence that the appellant had commenced an affair
with Mr W
when she handed the letter to the respondent, which was not produced
in court. That the appellant wished to terminate
an obviously unhappy
marriage is not surprising.
The
proprietary consequences of the marriage
[11]
The respondent acknowledged that the appellant was very successful in
her employment. They never spoke of ‘her money’
or ‘my
money’ as they shared expenses. They originally had a joint
account at Absa bank into which their income was
deposited.
According to the appellant they thereafter opened separate accounts
at FNB, with each of them having access to
both accounts. The
respondent acknowledged that the appellant made a large contribution
to the joint expenses of the household
and that shortly before she
left, was paying 80 per cent of their expenses.
[12]
The respondent became a member of the Fund on 28 December 1982, when
he joined the South African Police Service. The respondent's
employer
deducted his pension contributions and the balance of his salary was
used for household expenses. He maintained that the
appellant never
contributed directly to his pension fund.
[13]
As regards the matrimonial home, the bond repayments were deducted
from the respondent’s salary. Although conceding they
could be
viewed as a joint expense, he again maintained that the appellant had
not contributed directly to the bond repayment.
The appellant,
however, pointed out that the income she generated enabled the
respondent to pay an increased bond instalment, and
that they had
agreed the respondent would pay for the medical aid and the house,
and she would pay for the rest of their expenditure.
[14]
The evidence again establishes that the court a quo erred in
concluding that the appellant contributed to a lesser degree in
the
accrual of the respondent's estate. Counsel for the respondent was
constrained to concede that the evidence did not support
this finding
by the court a quo. The respondent was only able to afford the
deductions made from his salary in respect of the bond
repayments on
the matrimonial home, as well as his pension contributions to the
Fund, because the appellant made a far greater
contribution to their
joint expenses.
[15]
When due regard is had to the fact that the court a quo erred in
concluding that the appellant caused the breakdown in the
marriage
and also erred in concluding that the appellant contributed to a
lesser degree in the accrual of the respondent's estate,
it should
not have ordered the appellant to forfeit 80 per cent of her interest
in the accrual of the respondent's estate. No forfeiture
order should
have been granted when sufficient weight is also accorded to the
duration of the marriage of approximately 28 years
and the evidence
that the appellant does not own a home. In addition, no evidence was
led on whether the appellant possesses a
pension for her old age.
Deferral
of the payment to the appellant in terms of
s 10
of the
Matrimonial
Property Act 88 of 1984
, of the portion of the respondent's pension
interest assigned to the appellant, in accordance with
s 24A
of the
Government Employees Pension Law 1996 (GEPL)
[16]
I turn to consider the order granted by the court a quo that payment
to the appellant by the Fund, of the appellant's 20 per
cent pension
interest in the respondent’s pension benefits in the Fund,
(calculated as at the date of the decree of divorce),
was deferred in
terms of s 10 of the Act to the date when the pension benefits of the
respondent in the Fund, accrued to the respondent.
It is necessary to
do so as the respondent supported the order of deferral granted by
the court a quo.
[17]
Whether the court a quo was entitled to grant an order of deferral
requires an interpretation of the provisions of s 24A of
the GEPL,
read together with s 10 of the Act. The relevant portions of s 24A of
the GEPL provide as follows:
‘
24A
Payment of pension interest upon
divorce or dissolution of customary marriage.
(1)
The Board shall direct the Fund to reduce a member's pension interest
by any amount assigned from the member’s pension
interest to
the member's former spouse in terms of a decree of divorce granted
under section 7(8)
(a)
of the Divorce Act, 1979 (Act 70 of
1979), or a decree for the dissolution of a customary marriage.
(2)
(a)
Subject to paragraph
(j)
, for purposes of
section
7(8)
(a)
of the
Divorce Act, 1979
…, the portion of a
member's pension interest assigned to the member's former spouse in
terms of a decree of divorce or
a decree for the dissolution of a
customary marriage is deemed to accrue to the member on the date on
which the decree of divorce
or the decree for the dissolution of a
customary marriage is granted.
(b)
The
amount of the member's pension interest in the Fund shall be
determined and the amount of the member’s pension interest
that
is assigned to the former spouse shall be calculated by the Fund in
accordance with the rules as at the date of the decree
of divorce or
the decree for the dissolution of a customary marriage.
.
. .
.
. .
(e)
The
Fund shall, within 45 days of the submission of the court order by
the former spouse of a member, request the former spouse
to elect
whether the amount to be deducted must be –
(i)
paid directly to the former spouse; or
(ii)
transferred to an approved retirement fund on behalf of the former
spouse.
(f)
The
former spouse shall, within 120 days of being requested to make a
choice-
(i)
inform the Fund of the manner in which the amount referred to in
paragraph
(e)
must be dealt with; and
(ii)
if the former spouse chooses that the amount must be paid to the
former spouse directly, provide the Fund with the details
that are
necessary to effect the payment; or
(iii)
if the former spouse chooses that the amount must be transferred to
an approved pension fund on his or her behalf, provide
the Fund with
the details of that approved retirement fund.
(g)
The
Fund shall pay or transfer the amount within 60 days of being
informed of the manner in which the amount shall be dealt with
in
accordance with the former spouse's choice.
(h)
In
the event that the former spouse fails to make a choice or identify
the approved retirement fund to which the amount should be
transferred within the period referred to in paragraph
(f)
,
the Fund shall pay the amount directly to the former spouse within 30
days of the expiry of that period.’
[18]
In
Wiese v Government Employees Pension Fund & others
[2012] ZACC 5
;
2012 (6) BCLR 599
(CC) paras 5-9, the Constitutional
Court in dealing with the history and object of the amendment,
analysed the legislative enactments
that had preceded it and pointed
out that:
‘
During
1989,
section 7(7)(
a
)
was added by the Divorce Amendment Act to deal with certain problems.
Under the
Divorce Act non-member spouses
were, in certain
circumstances, entitled to payment of part of the pension interest
due, or assigned to, the member of the Government
Pension Fund when
any pension benefit accrued to that member. A pension interest which
had not yet accrued was not considered an
asset in the spouse's
estate. To cure this defect, the amendment, provided that a pension
interest is deemed to be an asset in
the estate for the purpose of
determining patrimonial benefits.’
(Footnotes
omitted.)
[19]
The problem, however, that still remained was:
‘
.
. . the question of when payment of a pension interest should occur.
Generally, this depended on the rules of a specific fund
but usually
took place on retirement, dismissal or some other defined “exit
event”. The problem was that a non-member
spouse would be
severely prejudiced if the value of his or her benefit was frozen at
the date of divorce and the beneficiary would
have had to wait for a
later exit event.’
[20]
The Constitutional Court noted that in order to cure this defect,
various amendments were made to the Pension Funds Act 24
of 1956
(PFA) which introduced the ‘clean-break’ principle. The
result was that:
‘
.
. . the non-member spouse no longer has to wait for an exit event to
occur. This means that a pension benefit awarded to a non-member
spouse in terms of the
Divorce Act is
deemed to have accrued on the
date of the divorce. This demonstrates the interplay between the
Divorce Act and
the PFA.’
[21]
The Constitutional Court noted that there was an oversight in that
these amendments only applied to the PFA and the Government
Pension
Fund could not benefit from the ‘clean-break’ principle
as it was governed by its own statute. The introduction
of
s 24A
of
the GEPL, by way of s 3 of the GEPL Amendment Act 19 of 2011, cured
this oversight and introduced the ‘clean-break’
principle
which:
‘
.
. . authorises the Government Pension Fund to make payment of a
pension interest upon divorce or dissolution of a customary
marriage.’
[22]
The clear object of the amendment is to ensure that the non-member
spouse receives payment of the amount assigned from the
member’s
pension interest in terms of a decree of divorce, without delay and
within the statutorily defined periods, after
the grant of the order.
The peremptory provisions of s 24A(2)
(e)
,
(f)
,
(g)
and
(h)
of the GEPL ensure attainment of this objective in
that:
(a)
The Fund is obliged within 45 days of the
submission of the court order by the former
spouse of a member, to
request the former spouse to elect whether payment is to be made
directly to the former spouse, or to an
approved retirement fund on
behalf of the former spouse.
(b)
The former spouse is obliged, within
120 days of being requested to make this choice,
to inform the Fund
of the manner in which payment must be made.
(c)
The Fund is obliged within 60
days to make payment in accordance with this choice.
In the event
that the former spouse fails to make a choice within 120 days, the
Fund is obliged to make payment directly to the
former spouse within
30 days of the expiry of that period.
[23]
Accordingly, the issue for determination is whether the provisions of
s 24A of the GEPL oust the jurisdiction of a court to
grant deferment
of satisfaction of an accrual claim (in the form of payment of the
amount assigned from the member’s pension
interest in terms of
a decree of divorce) in terms of s 10 of the Act. The section
provides as follows:
‘
10
Deferment of satisfaction of accrual claim
A
court may on the application of a person against whom an accrual
claim lies, order that satisfaction of the claim be deferred
on such
conditions, including conditions relating to the furnishing of
security, the payment of interest, the payment of instalments,
and
the delivery or transfer of specified assets, as the court may deem
just.’
[24]
As stated in
De Wet v Deetlefs
1928 AD 286
at 290:
‘
It
is a well recognised rule in the interpretation of statutes that, in
order to oust the jurisdiction of a court of law, it must
be clear
that such was the intention of the Legislature.’
In
my view, the clear intention of the legislature in enacting s 24A of
the GEPL was to oust the jurisdiction of a court to grant
deferment
of satisfaction of an accrual claim, in the form of payment of the
amount assigned from the member’s pension interest
in terms of
a decree of divorce, for the reasons that follow.
[25]
The deeming provision contained in s 24A(2)
(a)
of the GEPL,
that the portion of a member's pension interest assigned to the
member's former spouse in terms of a decree of divorce,
is deemed to
accrue to the member on the date of the grant of the order, may be
described as ‘conclusive or irrebuttable’
rather than
‘merely prima facie or rebuttable’ (
S v Rosenthal
1980 (1) SA 65
(A) at 75-76). This is because it serves as the basis
for a determination by the Fund in terms of s 24A(2)
(b)
, of
the amount of the member’s pension interest in the Fund, as
well as the amount of the member’s pension interest
that is
assigned to the former spouse, as at the date of the decree of
divorce.
[26]
The provision of peremptory defined periods, commencing on the
presentation of the order to the Fund by the non-member spouse,
to
ensure payment without delay of the amount so determined by the Fund,
which has to be assigned from the member’s pension
interest in
terms of the order, is irreconcilable with the power to defer
payment. Deferral of payment would defeat the object
of the section.
[27]
As pointed out by the Constitutional Court in
Wiese
, the
object of s 24A of the GEPL was to introduce the ‘clean-break’
principle with regard to the payment of the amount
assigned from the
member’s pension interest to the non-member spouse, in a decree
of divorce. A deferral of payment would
also defeat this objective.
[28]
Accordingly, the court a quo erred in ordering that payment to the
appellant by the Fund of the appellant's 20 per cent pension
interest
in the respondent’s pension benefits in the Fund (calculated as
at the date of the decree of divorce), be deferred
in terms of s 10
of the Act to the date when the pension benefits of the respondent in
the Fund, will accrue to the respondent.
[29]
As the only issue before the court a quo was whether the appellant
should forfeit the patrimonial benefits of the marriage
and the
appellant has been successful on this issue, there can be no reason
why the respondent should not be ordered to pay the
costs of the
appellant incurred in the court a quo and on appeal.
[30]
The following order is granted:
1
The appeal succeeds with costs.
2
Paragraphs 28.3 to 28.7 inclusive of the
order of the court a quo are set aside and replaced with
the
following order:
‘
(a)
The defendant is ordered to make payment of the amount of R
433 000 to the plaintiff in satisfaction of the plaintiff's
accrual
claim in respect of the matrimonial home.
(b)
The Government Employees Pension Fund (the Fund) is ordered in terms
of
s 7(8)
(a)
(i) of the
Divorce Act 70 of 1979
, read
together with
s 24A
of the Government Employees Pension Law, 1966
(the GEPL) to make payment to the plaintiff in accordance with the
provisions of
the GEPL, of 50 per cent of the defendant’s
pension interest calculated in accordance with the rules of the Fund,
as at the
date of the decree of divorce, being 1 November 2016, which
is assigned to the plaintiff.
(c)
The registrar of the court a quo is directed in terms of
s
7(8)
(a)
(ii) of the
Divorce Act 70 of 1979
, to forthwith notify
the Fund that pending compliance by the Fund with the provisions of
paragraph (ii) above, an endorsement be
made in the records of the
Fund that 50 per cent of the pension interest of the defendant is
payable to the plaintiff, and that
the administrator of the Fund
furnish proof of such endorsement to the registrar, in writing,
within one month of receipt of such
notification.
(d)
The defendant is ordered to pay the plaintiff's costs.’
K G B Swain
Judge of Appeal
Appearances:
For
the Appellant:
J L Olivier
Instructed by:
McIntyre Van Der Post,
Bloemfontein
For the Respondent:
P Jooste (with T Rossi)
Instructed by:
Honey Attorneys
IncHhONEH, Bloemfontein