Elesang v PPC Lime Ltd and Others

• Jurisdiction: South Africa
• Judge: Olivier J
• Judgment Date: 15 December 2006
• Docket Number: 1076/2006
• Hearing Date: 08 December 2006
• Counsel: V Haddad for the applicant W Coetzee for the second respondent No appearances for the first, third or fourth respondents
• Court: Northern Cape Division

Olivier J:

Parties and background

[1] The applicant, Mrs Nomthetho Yvonne Elesang, and the third respondent, Mr Marapelo Justice Elesang, are married to each other in community of property. There is one minor child born of their marriage. G

[2] The applicant has instituted divorce proceedings in which she claims, inter alia, one half share of the third respondent's pension interest as at the date of divorce, and maintenance in respect of the minor child.

[3] The third respondent had been in the employment of PPC Lime Ltd (the first respondent) and he had in such capacity been a H member of PPC Lime Employees Provident Fund (the second respondent). The third respondent had, apparently after the issue of summons, left the employment of the first respondent and in the process he became entitled to payment (by the second respondent) of what was referred to (by the deponent for the second I respondent) as a withdrawal benefit.

[4] The applicant then approached this Court for a provisional order to the effect that, pending the finalisation of the divorce action, the second respondent pay half of the amount of the third respondent's 'pension interest' into the trust account of the applicant's attorneys, alternatively J

Olivier J

(and in the event that the amount had already been paid to the third respondent) that A the fourth respondent, the Standard Bank of South Africa Ltd, be ordered to pay half of such amount into the said trust account, and that the third respondent, and any other respondent who opposed the application, be ordered to pay the costs jointly and severally.

[5] A rule nisi to that effect was granted. On the return day the application was opposed by only the second B respondent.

[6] The application was founded upon allegations that the applicant was entitled to half of the money by virtue of her marriage in community of property to the third respondent, that the third respondent had neglected to provide financial assistance in respect C of the minor child and that the applicant feared that the third respondent would 'not meet his present or future maintenance commitments and that he (would) abuse the moneys . . . without making provision for the . . . payment of maintenance' and that he would 'waste the pension moneys and that (she would) be seriously disadvantaged thereby'. D

Opposition

[7] These allegations have not been denied by or on behalf of the second respondent and, as already mentioned, the third respondent did not even oppose the application. E

[8] In its opposing papers the second respondent opposed the application on the grounds, broadly speaking:

[8.1]

That the concept of 'pension interest', as envisaged and defined in the Divorce Act 70 of 1979, could only be applicable if, at the time of the divorce, the particular party is still a member of a F fund as envisaged in s 1 of the Divorce Act and that, because the third respondent would not be such a member when their marriage is dissolved, the applicant would not be entitled to the relief envisaged in ss (7) and (8) of s 7 of the Divorce Act; and G

[8.2]

that, in any event, the provisions of s 37A(1) of the Pension Funds Act 24 of 1956, would preclude the second respondent from paying any part of the amount (to which the third respondent had become entitled) 'to a party other than the member spouse (the third respondent) and/or the non-member spouse (the applicant) and/or dependants of the member'. H

Pension interest

[9] It is so that the applicant, in her notice of motion, referred to the amount to which the third respondent had become entitled as his 'pension interest'. When regard is had to the definition of this phrase in s 1 of the Divorce Act (with reference to pension funds) it: I

[9.1]

Appears to apply only where one of the spouses is a member of a pension fund at the date of the divorce; and

[9.2]

means 'the benefit to which that party . . . would have been entitled . . . if his membership of the fund would have been J

Olivier J

terminated on the date of the divorce on account of his resignation from his office'. A

(My emphasis.)

[10] The third respondent will not be a member of the second respondent if and when an order of divorce is granted, because he has already left the employment of the first respondent. B

[11] In view of the fact that the third respondent has already become entitled to the benefits and has already left his employment, long before the date of the divorce, the formula based on benefits to which he 'would have been entitled' in the event of a resignation, can also strictly speaking no longer apply. It is clear C that the hypothetical event upon which this formula was intended to be based is a resignation 'on the date of the divorce' and that the calculation was intended to be made on this basis when the pension benefits eventually accrued to the member at some time after the divorce. D

[12] Any other interpretation would mean that the non-member spouse would also become entitled to pension interest made up of contributions made by the member spouse after the date of the divorce, which would be senseless and clearly contrary to the fundamental principle that the joint estate is to be divided 'as it existed at the date of the divorce' (see Maharaj v Maharaj and Others 2002 E (2) SA 648 (D) ([2002] 2 All SA 34) at 649H - I and Sempapalele v Sempapalele and Another 2001 (2) SA 306 (O)).

[13] Section 7(7)(a) of the Divorce Act provides that a 'pension interest' (as defined in s 1) will be deemed to be a part of the assets of a party and if the amount to which the third F respondent has become entitled could no longer be seen as a 'pension interest', as envisaged in the provisions of s 7(7)(a) of the Divorce Act, it could not in terms of these provisions be deemed to be part of the assets of the third respondent.

[14] The common-law position was simply that a party's pension interest did not form part of the assets of a joint estate (see G De Kock v Jacobson and Another 1999 (4) SA 346 (W) at 348, Sempapalele v Sempapaplele and Another (supra), and Maharaj v Maharaj and Others (supra) at 651) and this was in all probability the reason for the enactment of s 7(7)(a) of the Divorce Act. It is therefore only by means H of this deeming...