Bezuidenhout v Bezuidenhout 2005 (2) SA 187 (SCA): Most importantly in this matter, the SCA made it clear that the rule of thumb used by the Cape High Court (the trial court in this matter and in the Childs-matter referred to above) when making orders in terms of section 7(3), borrowed from the English law, to order that the defendant pay over half the value of his/her estate to the plaintiff, was not part of South African law. This amounted to a limitation of the very wide judicial discretionary powers afforded by section 7(3), (4) and (5). In this matter, the parties were married in 1975 when the appellant (the husband) was 26 years old and the respondent was 20. He was a tool maker and she a secretary; neither had any assets at the time that they were married. They were obviously married out of community of property with an antenuptial contract. The net value of the respondent’s estate was approximately R8 000 000 and that of the appellant was approximately R23 000 000. The respondent had stayed at home to look after the parties’ son who was born in 1977 for three years and then went back to work again in 1980. She continued working for the rest of their married life. She also ran the household. The respondent started his own business in 1981. At the start of his business, the parties were reliant on the respondent’s income. She also did the bookkeeping and administration of his new business in the evenings. Both parties worked long and hard hours. The business had some ups and downs, but in the long term expanded tremendously. The respondent was at all times full time actively involved in the business in addition to running the household. The business made the parties very rich. The court ordered that the appellant pay the respondent R4 500 000 (instead of the R7 800 000 that the trial court ordered him to pay). It considered the contributions of the respondent in the following manner[28]: “[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 measurable 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 financial director of a company. Her responsibility for William she largely 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 H pleadings and was confirmed by her counsel during oral argument. Her major 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 respondents additional contribution as mother and homemaker must be afforded due weight. That will be done. I Nevertheless, in the circumstances, the considerations advanced by the Court a quo (in para [49]), as part of its reasons for splitting the proceeds of the marriage on a 50:50 basis, that the respondent was a dedicated housewife, mother and homemaker 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 role played by a South African housewife in the plaintiffs position cannot be held against her. [30] For the reasons given, these statements reflect a clear misdirection on the part of the Court a quo in the exercise of its discretion. But for this misdirection, the Court would have realised that in this matter, unlike in most other matters, the contributions of the parties can in fact be compared 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 respondents own evidence, it was the appellants efforts, not hers, which caused the business to be exceptionally successful as opposed to just average. Secondly, 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 respondents efforts. But for the Courts 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 conclusion formed the keystone of the Courts 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 have 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, while 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 respondents assets are also tied up in shares in the same companies. What placed 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, have been of more concern to the Court a quo was the appellants objection that if he were compelled to pay an amount as large as that which the Court eventually decided upon, it could place the companies in jeopardy. The appellants evidence in this regard was that the companies had an overdraft facility of R10 m, of which about R4,5 m had been taken up. According to his further undisputed testimony a business that operates close to the limit of its overdraft runs the risk of having its overdraft facilities reduced. In cross-examination, various suggestions were made to the appellant as to how a payment to the respondent could be funded. It was apparent, however, that each of these suggestions would create difficulties or disadvantages of its own. So, for instance, the suggestion that one or both of the aeroplanes owned by Andor Abrasives - which were valued at about R2,3 m and R1,4 m respectively - could be sold, was met by the response that a substantial portion of the proceeds of the sale would be payable 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, since the farm formed part of the banks security for the overdraft of the companies, the sale of the farm would probably cause the overdraft limit to be reduced. The Court a quo dismissed these problems with the comment (in para [51]) that, if the appellant wishes to borrow money, as opposed to selling what the parties called his toys, then he must bear the costs of so doing. This in my view amounted to an oversimplification of the undisputed difficulties for the companies raised by the appellant, which could be to the detriment of both parties.”
Posted on: Tue, 29 Oct 2013 17:24:47 +0000
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