AB v JB

• Jurisdiction: South Africa
• Judge: Maya AP, Swain JA, Tsoka AJA, Baartman AJA and Kathree-Setiloane AJA
• Judgment Date: 24 March 2016
• Citation: 2016 (5) SA 211 (SCA)
• Docket Number: 20808/2014 [2016] ZASCA 40
• Hearing Date: 26 February 2016
• Counsel: JG Wasserman SC (with C Woodrow) for the appellant. H Epstein SC (with M Smit) for the respondent.
• Court: Supreme Court of Appeal

Tsoka AJA (Maya AP, Swain JA, Baartman AJA and Kathree-Setiloane AJA E concurring):

[1] The issues for determination in this appeal are twofold. First, whether the respondent's delictual claim for damages is a 'matrimonial cause or matter incidental to such cause', as contemplated in s 2 of the Arbitration Act 42 of 1965 (the Act), and is therefore incapable of F referral to arbitration. Secondly, whether the arbitrators erred in assessing the extent of an accrual in a matrimonial dispute, as at the date of the dissolution of the marriage, and not at the date of litis contestatio. If so, whether this constituted an error of law resulting in the arbitrators misconceiving the whole nature of the enquiry, with the consequence G that the award falls to be set aside in terms of s 33(1) of the Act.

[2] The facts giving rise to the appeal are, briefly, the following. The appellant, Mr AB, and the respondent, Mrs JB, were married out of community of property but subject to the accrual system on 14 February 1987. The antenuptial agreement which governed their marital regime H was entered into before their wedding, on 13 February 1987. The marriage did not survive and, on 30 November 2006, the respondent instituted a divorce action in the Gauteng Local Division of the High Court, Johannesburg. She sought a decree of divorce and ancillary relief, including a claim under s 3 of the Matrimonial Property Act 88 of 1984 (the MPA) for half of the accrual of the latter's estate, as her estate I showed no accrual or a smaller accrual than that of the appellant.

[3] On 5 May 2008, pursuant to a settlement agreement that was made an order of court, a final decree of divorce was granted. The appellant was ordered to pay the respondent the amount of R8 007 340 in instalments, in respect of her portion of the accrual. However, two J months later it became public knowledge that a listed company on the

Tsoka AJA (Maya AP, Swain JA, Baartman AJA and Kathree-Setiloane AJA concurring)

Johannesburg Stock Exchange, Esorfranki Ltd, was interested in purchasing A the shares and claims of the Patula Group of Companies (Patula) in which the appellant had a substantial interest. The respondent got wind of this information. As a result, in 2010, she successfully launched an ex parte application with a view to verify the information. Pursuant to the application, the sheriff attached management accounts B and other documents of Patula which confirmed that, for the period before the granting of the divorce, the appellant's estate had shown a substantial accrual in excess of R167 million.

[4] On 4 February 2010 the respondent instituted a claim for delictual damages in the sum of R83,9 million on the basis that the appellant C falsely or negligently represented that his shares in that company were worth only R20 712 527, when in truth the shares were worth more than R167 million. According to her, had she known the truth, she would not have settled as she did but would have settled for more. In the alternative, she asserted that the appellant knew the true value of the shares but fraudulently or negligently failed to disclose this information D thereby inducing her to settle to her detriment.

[5] The respondent obtained judgment by default against the appellant as he had failed to defend the action. For reasons irrelevant to the appeal, that judgment was thereafter rescinded by the court and the matter E proceeded on an opposed basis. The trial was set down for August 2012 but it did not proceed as the parties, on the eve of the trial, entered into an arbitration agreement referring, on an urgent basis, 'the dispute in the action' to arbitration.

[6] The arbitration proceeded from 20 August 2012 to 21 November 2012 F before the retired Deputy President of the Supreme Court of Appeal, Harms. The main issue for determination in the arbitration was whether the appellant had misrepresented the value of the accrual, ie his interest in Patula. This claim was dismissed on the basis that a misrepresentation had not been established. Also at issue was the non-disclosure by the appellant of his loan account, in respect of which G the respondent alleged that a dividend had been declared for the 2008 financial year, of which R7,8 million had been credited to the appellant's account. This claim was upheld and the respondent was awarded R3,9 million with costs plus interest. Dissatisfied with these findings, the appellant, on 7 December 2012, lodged an appeal before an appeal tribunal, while the respondent cross-appealed. H

[7] On 5 October 2013 the appeal proceeded before the appeal tribunal comprising retired Judges of Appeal, President Howie and Streicher JA, and Mr Van der Linde SC. On 15 October 2013 they upheld the...