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[2011] ZAWCHC 424
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N.V.D.P (Born E.W) v J.I.D.P (4664/2007) [2011] ZAWCHC 424 (15 November 2011)
IN
THE HIGH COURT OF SOUTH AFRICA (WESTERN CAPE HIGH COURT, CAPE TOWN)
Case
No:
4664/2007
In
the matter between:
N
V D P (BORN
E
W)
…..................................................................................................
Plaintiff
and
J
I D P
…..........................................................................................
Defendant
JUDGMENT
GIVEN ON 15 NOVEMBER 2011
Plaintiff
and Defendant were married to one another out of community of
property by antenuptial contract with the exclusion of the
accrual
system on 4 November 1989. Plaintiff instituted divorce proceedings
by summons dated 28 March 2007.
There
are two minor children born of the marriage, a son Z Marcus born on 6
May 1991 and a daughter T C, born on 2 March 1993. It
was not an
issue between the parties (both of whom testified at trial) that the
marriage relationship between them had irretrievably
broken down and
that a divorce order should be granted. By the time of trial the
parties had been apart for four years and the
level of acrimony which
subsisted between them emerged clearly in the evidence, and there can
be no question that the marriage
relationship between them has
irretrievably broken down.
While
the issues on the pleadings were originally extensive, they had
narrowed down by the time of trial. The parties reached agreement
on
the issues which are reflected in the orders made in 1, 2 and 3
below. All issues save two had been resolved as between the
parties.
The second issue was costs, which largely flowed from a decision on
the first issue. The first issue arose from defendant's
claim in
reconvention, paragraph 5 of which reads as follows:
"In
and during 2003, defendant lent and advanced a sum of R548 000,00 to
Plaintiff for the purposes effecting payment of the
costs of
renovations to her property situated at and known as 25 Park Island
Way, Marina da Gama The aforementioned sum of R548
000,00 was
repayable upon demand."
The
Plaintiffs plea in reconvention was to deny the content of this
paragraph in its entirety.
In
and during May 2009, and at a time when she was still legally
represented (Plaintiff acted in person at trial) her then attorneys
addressed a request for further particulars regarding
inter
alia
this
alleged loan agreement. It elicited the response that the agreement
was oral. In response to a query as to the exact date of
the
agreement, Defendant particularised that the agreement was entered
into
"...during
or about December 2002 to May 2003".
In
particularising the terms of the agreement, Defendant stated that the
sum loaned would be
"repayable
on sale of the plaintiff's immovable property or on separation /
divorce / demand".
Investments
in property characterised the married life of the parties. At the
time of their marriage the parties lived in a house
at St James.
Plaintiff testified that this was the property which he had
undertaken to give Plaintiff as her sole and absolute
property
pursuant to paragraph 4 of their antenuptial contract. This property
was sold in 1992 and no equity was realised in the
sale. The parties
thereafter rented accommodation.
Plaintiffs
mother passed away in September 1995 and - with portion of her
inheritance - Plaintiff purchased a house at 1 Delft Close
which was
registered in her own name. The house was bonded to the extent of
approximately R250 000 and the balance including conveyancing
and
transfer duty paid by Plaintiff out of her inheritance.
Subsequent
hereto and in 2001, Plaintiff (who was by then a successful estate
agent, active in the Marina da Gama area) came across
a house at 25
Park Island, Marina da Gama, being sold at a bargain price. Plaintiff
purchased this property, funding it with a
90% bond and the balance
payable from her inheritance. The parties moved into this dwelling
which became their common home, and
the property at Delft was
tenanted. Defendant in his evidence described this house as being in
a fairly bad state of repair, but
purchased on favourable terms.
Also
in 2001, Defendant inherited a property in Fourth Road, Rondebosch
from his mother, who had passed away. The property was free
of any
encumbrance and was transferred to him.
There
were two further properties which featured in the married lives of
the parties, both in Marina da Gama. Defendant became the
registered
owner of 27 East Lake Drive, Marina da Gama, and Plaintiff the owner
of 42 East Lake Drive, Marina da Gama. Further
detail as to these
properties is not relevant for the purposes of resolving the issues
between the parties.
In
and during 2003, the family home at 25 Park Island Way was
substantially renovated. Their renovations ultimately cost
approximately
R1 -million, having been initially estimated at R900
000. During this time, the parties vacated the house and went to live
with
Plaintiffs sister in Claremont. The renovations were ongoing
until September or October 2003, at which time the parties moved back
into the common home. During this period and in order to assist with
the funding of the renovations, Defendant caused a bond to
be
registered over the Rondebosch property. On 14 March 2003, his bond
account was debited with the sum of R585 000,00 and the
sum of R579
360,62 was simultaneously credited to Plaintiffs home loan account
over the common home at 25 Park Island Way. It is
Defendant's case
that - underpinning this transaction - was an agreement of loan.
Plaintiff admits receipt of the sum of R579 360,62
into her bond
account, but denies that it was a loan.
By
the time of the trial, the parties had been separated for some time.
Plaintiff had requested Defendant to leave the common home
in 2007,
but he refused to do so. Plaintiff and the minor children left the
common home and Defendant continued living there until
the property
was sold on 2 August 2007. Its selling price was R2 950 000,00 and
Plaintiff admitted in her evidence that she had
netted R1.25-million
after payment of the bond of approximately R1.2 million plus unpaid
rates and taxes in the amount of approximately
R50 000.
The
parties are at variance as to whether the receipt by Plaintiff of the
sum of R579 360,62 was a loan or not. Defendant contends
that it was
a loan. It is his case that - given that the property has been sold,
the parties are separated and about to be divorced,
and furthermore
that demand has been made for repayment - this sum is repayable.
Plaintiff denies that the juristic nature of the
transaction was that
it constituted a loan.
Defendant's
evidence in chief had a fairly narrow focus. He testified regarding
the conclusion of the marriage, the birth of the
children, his
acceptance of the order reflected in paragraphs orders made in 1, 2
and 3 below, and the irretrievable breakdown
of the marriage
relationship. He then dealt with the properties to which reference is
made above, and with his contention regarding
the loan in more
detail.
He
testified that he had got a job with Topics at the time when the
parties were living in the Delft house. When he inherited the
property at 9 Fourth Road, Rondebosch, he testified that this placed
the family in a position to do alterations to the common home.
He
caused these to be done by a friend, Mr Dowling, who initially
estimated the cost of the renovations to be R750 000, but counselled
to allow a 10% cushion for escalations and variations. He testified,
when asked what agreement was reached about the financing
of these
renovations, that there were three properties which were available to
be a source of finance. The first of these properties
was the Delft
property in Plaintiffs name, which was to be bonded. The second was
his own Rondebosch property. He testified that
he was not prepared to
bond the property for the full extent of the cost of the renovations.
It was, he stated, totally unencumbered
and he was not prepared to
take a bond for the whole sum. What he was prepared to do to limit
his exposure was to borrow against
the property to the extent that
the rental income from the tenant would service the bond. Thirdly,
and as regards the balance,
Plaintiff was to raise mortgage finance
on the common home to cover the rest of the renovation costs.
Defendant's
evidence about the agreement between himself and Plaintiff requires
scrutiny. He first testified about the agreement
when asked whether
interest was payable on the funds contributed by him from the
Rondebosch property. His answer was that there
was "...no
talk
of interest. I did emphasise that if the property was sold, I
expected the capital sum to be returned to me".
Asked
regarding the Plaintiffs attitude, he testified that she had found
this
"acceptable".
There
is a distinct lack of detail as to the agreement on Defendant's
evidence. Indeed, he conceded as much. In the first instance,
the
amount of the loan is not clear. His counterclaim puts the amount at
R548 000,00. The amount transferred out of his bond account
on the
Rondebosch property is R585 000,00. The amount received into
Plaintiffs bond account at the common home was R579 360,62.
Asked to
explain the differential he conceded that there was confusion, and
testified that he had tried to ascertain the origin
of this confusion
but had been thwarted when the bank had refused to give him
information as the account was in Plaintiffs name.
He stated simply
that he was
"prepared
to forego the differential between the amount received and the
pleaded sum of R548 000,00".
The
differential in rand terms is not, however, the issue. It is the
quality of his evidence on the central issue before Court,
and the
accuracy of his recall, which is material.
Quite
apart from the discrepancy on the amount, Defendant's evidence is
hard to reconcile with the pleaded case. Paragraph 5 of
his claim in
reconvention is to the effect that the loan was
"repayable
on demand'
simpliciter.
Defendant disavowed such an agreement in his evidence, and said the
loan would be repayable on separation or on divorce
or on demand.
This is furthermore in conflict with the particularity furnished by
him in paragraph 1.3.3 of the further particulars,
where the first
alternative relied upon was that it would be repayable on sale of the
immovable property.
Nor,
it must be observed, was Defendant able to isolate an occasion on
which (or even a reasonably accurate time frame within which)
the
loan was entered into. The closest which Defendant could furnish in
his further particulars is a span of six months from December
2002 to
May 2003. He did not improve on this in his oral evidence.
Plaintiff,
conducting her own case, took up this vagueness as her first line of
cross-examination. Asked when and where a loan had
been mentioned,
Defendant answered unhelpfully that it was
"before
the renovations took place".
Asked
further whether he used the word
"loan",
Defendant
avoided what was expressly discussed and resorted to an
"understanding", which was that - if the house was sold
-
he would expect return of the capital amount of money. He did not
testify that the word
"loan"
(or
any derivative of it) had been used in discussions between himself
and Plaintiff.
During
her cross-examination of the Defendant, and during her own testimony,
Plaintiff took the ambit of the evidence wider than
that which had
been traversed by Defendant. She focused to a large extent on
Defendant's poor employment and earning record, and
the fact that her
own family had been compelled to assist the family financially. She
advanced a case that Defendant had a chequered
employment history.
Her more detailed evidence on certain of these issues clarified the
relevance of certain of the questions she
had previously put to
Defendant during cross-examination. I revert to this below.
Plaintiff
testified that Morkels terminated the Defendant's employment shortly
after their marriage, but accepted that he successfully
disputed the
fairness of the termination at the CCMA. Thereafter, Defendant became
involved in two businesses, one of which installed
sunshields on
windows, and the other of which printed T-shirts. In 1991, the year
that Z was born, the T-shirt printing business
was closed down and
the sunshield business failed. The parties moved into a flat in the
same block as Plaintiffs mother, the latter
paying the rent and
feeding the family.
By
1992, Defendant became employed with a Mauritian company. While he
was away on a sales trip, Plaintiff was advised by the bank
that a
large overdraft had been run up during the conduct of the failed
businesses. She attended the bank with her brother-in-law
and
succeeded in negotiating better interest terms on the overdraft. She
testified that this overdraft had simply become a family
debt and was
(largely as a result of her efforts) paid off over a period of time.
A
further incident in occurred in 1992 relating to the sunshield
business. Plaintiff testified that, in Defendant's absence, Mr
Norman
Jarvis - the seller of the business - arrived at Plaintiffs doorstep
demanding unpaid instalments on the sale of the business
totalling
R140 000. (At the time, this was a significant amount of money. One
must bear in mind that the parties had, some short
time earlier, sold
their house at St James for the sum of R177 000). Stating that she
had "no
choice"
in
the matter, Plaintiff approached her mother for an advance on her
inheritance to settle this indebtedness. She testified that,
in her
presence and at the flat next door to her mother, Defendant signed a
document acknowledging this payment, and stating that
when he
inherited his mother's house in Rondebosch it would be made over to
their son, Z and such other children as may be born
to the marriage.
This
evidence gave some content to Plaintiffs cross-examination of
Defendant. Without much contextualisation, the following exchange
took place when Plaintiff cross-examined Defendant:
COURT:
Do you recall that the previous owner of Sunshield made demand for
payment?
Plaintiff:
His mother-in-law paid R140 000,00 for this claim.
Defendant:
I was not aware of this.
Plaintiff:
Are you aware that you signed a Deed ...which was witnessed by your
mother-in-law saying you would let Fourth Road be
inherited by your
children on your gaining this property?
Plaintiff:
Did you sign a document like that?
Defendant:
No.
Plaintiff:
...during a sales trip in this time the previous owner demanded
payment of the balance of R140 000,00.
Defendant:
I do not recall.
Plaintiff:
He was overseas.
COURT:
Do you recall this demand?
Plaintiff:
Are you aware that your mom-in-law paid the amount?
Aware
that you signed a deed across witnessed by your mom-in-law? Did you
sign the document?
Defendant:
I cannot remember ... No.
Defendant's
evidence in this regard stretches the limits of credulity. At one
moment he seems to dispute the assertions made, the
next he seems to
concede that the events may have happened but without his knowledge.
The latter stance is unsustainable. Defendant
must have known that he
was in default of payments in regard to the purchase of the business.
The amount of money was significant.
The impact on Plaintiff, her
mother and the family must have been was significant too, and it is
inherently improbable - if these
events took place - that Defendant
remained in ignorance of them.
Defendant's
counsel addressed extensive cross-examination to Plaintiff on the
same issue. Plaintiff was asked why - if the parties
were married out
of community of property with no accrual - her mother would bail
Defendant out of his financial difficulties.
Plaintiff testified that
the parties were newly married, with a young child. She testified
convincingly that there was no realistic
alternative.
Continuing
with Plaintiffs evidence, she stated that, in 1993, Defendant's
employment with the Mauritian employer was terminated.
He took up
employment for an importer of knitwear, but this employment lasted
only some six months. While he was there, Defendant
became exposed to
the business of bond-origination, and left his employment to start a
bond origination business himself which
became known as Home
Investments. The business was run from the flat next door to
Plaintiffs mother, which was still funded and
paid for by her.
Defendant
had a further stint of employment with a firm called Ellen Arthur
(during which time Plaintiff ran the bond origination
business called
Home Investments) but this employment was terminated in 1995. From
1995 until 2002 Defendant was unemployed, and
contributed to the
financial wellbeing of the family through the bond origination
business, as also attending to the management
of certain rentals of
property as an adjunct to Plaintiffs estate agency business.
Plaintiff
was challenged on her version of the transaction which Defendant
contends is a loan. She was asked why Defendant - having
deliberately
chosen to be married out of community - would impoverish his estate
by simply advancing the funds to improve Plaintiffs
property. As an
answer, Plaintiff relied heavily on Defendant's past financial
problems. She took the attitude that their two children
would
ultimately reap the benefits of the advance by way of inheritance,
and that she did not envisage divorce at the time. She
did not see it
as an impoverishment of Defendant's estate, rather as a plan for the
family to improve its standard of living. It
was, to use her phrase,
"all
money going towards the family.
For
her part, she testified that she treated all available funds as being
in a common pool, which were then spent on expenses for
the family
without differentiation.
Plaintiff
was criticised under cross-examination for the impression of
Defendant which she sought to create in presenting her evidence.
It
was put to her that she had gone out of her way to point out
Defendant's past failures to meet his financial obligations, and
emphasise that he had not been reliable. It was put to her that she
had gone out of her way to portray him as a man who evaded
his
creditors, was fired, should not be trusted and who should be
penalised for this conduct. That Plaintiff indeed thinks this
of
Defendant is evident in her own frank admission - in response to
these questions - that counsel for Defendant cross-examining
her had
"summed
him up pretty well'.
There
is, I must accept, a degree of animosity and hostility which may
affect Plaintiffs perception of Defendant, and which may
colour the
content and presentation of her evidence. I bear this in mind in the
assessment of the evidence. There is, however,
an indisputable
relevance to the evidence which she tendered; it was not simply a
gratuitous denigration of Defendant. Defendant's
business failures
had resulted in a large overdraft which Plaintiff simply accepted as
a debt owed by the family. It was paid off
in the fullness of time
with no claims being made against Defendant in this regard. There was
the further instance (which I accept
on the evidence) that Plaintiffs
mother paid the sum of R140 000 as the outstanding balance on the
purchase of the sunshield business
when Defendant could not. Against
this background, it is not at all unlikely - notwithstanding the
marriage out of community of
property -that Defendant should, in
fairness and in equity, offer up a portion of the equity in the
Rondebosch property towards
his family without requiring it to be
repaid to him as a loan. Indeed, in the light of his past financial
conduct, it may well
be regarded as an impertinence to do so, when
weighed up against the extent to Plaintiff and her family had
tolerated Defendant's
financial woes, without seeking repayment.
Against
this background, what was Plaintiffs evidence regarding the nature of
the transaction? Plaintiff conceded that the renovations
had been
planned with reference to the availability of bond finance from the
three properties. In the inside cover of a book kept
by her relating
to the common home and its renovations she listed the sum of R585 000
as being available from their Rondebosch
property, R215 000 available
from the Delft property and
R200
000 from the common home itself. These amounts total R1-million,
approximating the amount which was spent during the renovation
process.
On
the question as to whether it was a loan, Plaintiff described her
attitude to the funds available for renovation as being different
"pockets"
which
could all be dipped into and provide the renovations to the common
home for the benefit of Plaintiff, Defendant, and their
two children.
She emphasised that, as at 2003, it was the beginning of boom time in
the property industry, and the bonding of property
in order to
renovate the common home was in the nature of a forced saving.
Describing the available funds in the bonds as
"pockets
of money"
she
stated that the parties were happily married, they were young and
they were strong. The discussions between herself and Defendant
were
that they needed R900 000 to do the renovation, and discussions
turned about where they could access those funds. She was
adamant
that there was never a discussion about repayment.
Against
this evaluation of the evidence, it must be observed that Defendant
bears the onus of establishing the agreement. The agreement
must be
established with all its relevant terms including the amount, the
triggers for repayment, and the fact that the transaction
was a loan.
On the quality of the evidence presented, I am unable to make any
findings in this regard. Plaintiffs own pleadings
are vague in the
extreme, and contradictory. The version of the transaction advanced
in the counterclaim (namely that the sum was
repayable on demand) is
relegated - in the further particulars furnished - to being the
fourth alternative. His evidence supporting
the transaction is vague
as to timing, and does not support the primary pleaded case that the
loan was repayable on demand. He
did not testify that the word "loan"
(or any derivative of it) was never used in discussions between him
and Plaintiff.
His
evidence is generally subject to criticism on this ground of
vagueness. It is also subject to criticism in regard to the R140
000
payment made by Plaintiffs mother. Defendant moreover failed to
impress during his evidence with repeated answers that he simply
did
not recall. He did this in regard to matters which one would expect
to remain within his knowledge, notwithstanding the passage
of time.
On the probabilities, I find it extremely unlikely that a
contractually enforceable loan would have been entered into
between
the parties against the background of the financial losses made by
Defendant, and the fact that Plaintiff and her family
had propped him
up financially. Indeed, Plaintiff stated that she was
"gobsmacked'
that
he should suggest that she owes him money in the light of all his
financial delinquencies over the years.
Were
I to choose between the evidence of the Plaintiff and Defendant,
despite valid criticisms on both sides, I would probably prefer
that
of Plaintiff. I do not, however, need to go that far. Defendant bears
the onus of establishing a contract of loan and its
material terms. I
find myself unable to find on the totality of the evidence that he
has established such a contract, and absolution
from the instance
must accordingly result in regard to the claim reflected in prayer 5
of the claim in reconvention.
It
follows that Plaintiff has been successful on the only substantive
issue which, in the final analysis, required determination
by this
Court. She was accordingly successful, and - in principle - entitled
to her costs. She was previously represented by Miller
Du Toit Cloete
Inc, although she was unrepresented by the time of trial. No evidence
was presented, and thing else placed before
me, to justify a
departure from the usual rule that the party who enjoys success at
trial is entitled to an order of costs, and
I intend in this regard
to follow the usual practice.
In
the circumstances, the following order is made:
1.
A decree of divorce is granted.
2.
The parties shall act as co-guardians of their minor child, T C as
provided for in sections 18(2)(c), 18(3), 18(4) and 18(5)
of the
Children's Act, No 38 of 2005 ("the
Children's Act"
;).
3.
The parties shall be co-holders of parental rights and
responsibilities in respect of the child as referred to in
sections
18(2)(a)
and
18
(2)(fo) of the
Children's Act, subject
to the
provisions set out below.
3.1.
The child shall mainly reside with Plaintiff who shall be her primary
carer and Defendant shall retain the right to have reasonable
contact
with her.
3.2.
The parties shall make joint decisions about the following aspects of
the children's lives:
(a)
decisions about her schooling and tertiary education;
(b)
major decisions about her religious mental health care
and
medical care;
(c)
major decisions about her religious and spiritual upbringing;
(d)
decisions about her residence outside the Cape
Peninsula;
(e)
decisions affecting contact between her and the children;
(f)
decisions which are likely to significantly change the children's
living conditions or to have an adverse affect
on
their wellbeing.
3.3.
Decisions effecting the child's everyday care and routine shall be
made by the party in whose care she is at the relevant time.
3.4
In the event of any dispute arising between the parties in their
decision making concerning the child the parties shall appoint
a
facilitator to assist them. The facilitators decision shall bind the
parties subject to any court order to the contrary. The
costs of the
facilitator shall be borne by the parties in equal shares.
Plaintiff
is granted absolution from the instance in regard to prayer 5 of
Defendant's claim in reconvention.
No
orders are made in regard to the balance of the claims in
convention or reconvention.
Defendant
is directed to bear Plaintiffs costs of suit at times when she was
legally represented.
S.C. KIRK-COHEN,
AJ