Kirchner v Kirchner and Another

• Jurisdiction: South Africa
• Judge: Gildenhuys J
• Judgment Date: 05 November 2008
• Citation: 2009 (4) SA 448 (W)
• Docket Number: 20358/08
• Hearing Date: 05 November 2008
• Counsel: JM Bezuidenhout for the applicant. No appearance for the respondents.
• Court: Witwatersrand Local Division

Kirchner v Kirchner and Another
2009 (4) SA 448 (W)

2009 (4) SA p448

Citation	2009 (4) SA 448 (W)
Case No	20358/08
Court	Witwatersrand Local Division
Judge	Gildenhuys J
Heard	November 5, 2008
Judgment	November 5, 2008
Counsel	JM Bezuidenhout for the applicant.; No appearance for the respondents.

Flynote : Sleutelwoorde B

Husband and wife — Divorce — Proprietary rights — Pension fund benefits — 'Pension interest' — Non-member spouse's share — Entitlement to immediate payment — Non-member spouse entitled to claim immediate cash payment of pension interest allocated to him or her under order of divorce — Provision not applying retrospectively — Pension Funds Act C 24 of 1956, ss 37D(1)(d) and 37D(1)(e).

Headnote : Kopnota

The new ss 37D(1)(d) and 37D(1)(e) of the Pension Funds Act 24 of 1956, in terms of which a non-member spouse is entitled to claim immediate cash payment of a pension interest allocated to her under the order of divorce, do not apply retrospectively. (Paragraph[17] at 453B/C.)

D Annotations

Reported cases

Chairman of the Board of the Sanlam Pensioenfonds (Kantoorpersoneel) v Registrar of Pension Funds 2007 (3) SA 41 (T): dictum at 59D applied

Kruger v President Insurance Co Ltd 1994 (2) SA 495 (D): referred to

E National Iranian Tanker Co v MV Pericles GC 1995 (1) SA 475 (A): dictum at 483H — I applied.

Unreported cases

Cockcroft v Mine Employees Pension Fund (case No PFA/WE/11234/06/L5): not followed.

Statutes Considered

Statutes F

The Pension Funds Act 24 of 1956, ss 37D(1)(d) and 37D(1)(e): see Juta's Statutes of South Africa 2007/8 vol 5 at 4-38.

Case Information

G Application for immediate payment of a pension interest. The facts appear from the judgment of Gildenhuys J.

JM Bezuidenhout for the applicant.

No appearance for the respondents.

Cur adv vult. H

Postea (November 5).

Judgment

Gildenhuys J:

I [1] The applicant and the first respondent were previously married to each other out of community of property. The marriage was subject to the accrual system specified in Ch I of the Matrimonial Property Act 88 of 1984. The first respondent was at all relevant times a member of both the Mine Employees Pension Fund and the Sentinel Mining Industry Retirement Fund. Both funds are administered by the second J respondent.

2009 (4) SA p449

Gildenhuys J

[2] On 7 August 2007 the applicant and the first respondent got A divorced. They entered into a settlement agreement, which was incorporated into the decree of divorce. Paragraph 6.3 of the settlement agreement reads as follows:

'6.3.1

Die eiseres sal geregtig wees op 50% van die verweerder se B pensioenbelang op datum van egskeiding.

6.3.2

Verweerder moet binne 30 (DERTIG) dae na toestaan van die bevel 'n pensioen staat aan die eiseres se prokureur voorsien waarin sy belang op datum van egskeiding aangetoon word sodat die nodige stappe geneem kan word om eiseres se belang te registreer.'

[3] The applicant submits that in terms of recently amended legislation, C she is entitled to claim immediate payment of 50% of the pension interest allocated to her under para 6.3.1 of the settlement agreement. I will revert to the legislation later in my judgment.

[4] The second respondent wrote the applicant's attorney that it is not D prepared to make immediate payment of the pension interest allocated to the applicant without the authority of a new court order, because -

'(a)

the relevant pension fund or funds are not identified in the [existing] order;

(b)

It [the existing order] does not provide that the relevant pension E fund must pay the allocated portion to your client or endorse its records to that effect. This is at best implied in paragraph 6.3.2.'

[5] The applicant by notice of motion dated 10 June 2008 prayed (inter alia) for an order as follows:

'Dat die tweede respondent 50% (vyftig persent) van die eerste respondent F se pensioenfondse te Sentinel Mynindustrie Aftreefonds en Mynwerknemers Pensioenfonds soos op datum van egskeiding, 7 Augustus 2007 soos gelas in die egskeidingsbevel tussen die applikant en eerste respondent gedateer 7 Augustus 2007 in saaknommer 2005/29694, aan die applikant betaal binne 30 (dertig) dae na datum van die bevel.' G

[6] The first respondent indicated that he will not oppose the application. The second respondent did not enter an appearance to defend. The application was therefore unopposed. Ms Bezuidenhout, who appeared on behalf of the applicant, delivered comprehensive and well-researched heads of argument, which were of great assistance to me. H

[7] Prior to 1 August 1989 the interest which a member of a pension fund might have in pension benefits that have not yet accrued was generally not regarded as an asset in his or her estate or, where the marriage was in community of property, as an asset in the joint estate. This meant that, when determining the patrimonial benefits to which I spouses who are getting divorced may become entitled, their 'pension expectations' were not to be taken into account.

[8] An amendment to the Divorce Act 70 of 1979 in 1989 altered this position, in that s 7(7)(a) now 'deems' a member spouse's 'pension interest' to be an asset in his or her estate for purposes of the J

2009 (4) SA p450

Gildenhuys J

A determination of the patrimonial benefits to which the parties to a divorce action may be entitled. The term 'pension interest' is defined in s 1 as follows -

' "pension interest", in relation to a party to a divorce action who -

(a)

is a member of a pension fund (excluding a retirement annuity B fund), means the benefits to which that party as such a member would have been entitled in terms of the rules of that fund if his membership of the fund would have been terminated on the date of the divorce on account of his resignation from his office;

(b)

is a member of a retirement annuity fund which was bona fide C established for the purpose of providing life annuities for the members of the fund, and which is a pension fund, means the total amount of that party's contributions to the fund up to the date of the divorce, together with a total amount of annual simple interest on those contributions up to that date, calculated at the same rate as the rate prescribed as at that date by the Minister of Justice in D terms of section 1(2) of the Prescribed Rate of Interest Act, 1975 (Act 55 of 1975), for the purposes of that Act.'

[9] Section 7(8)(a)(i) of the Divorce Act entitles 'the court granting a decree of divorce' in respect of a member of a pension fund, to make an order that -

E 'any part of the pension interest of that member which, by virtue of subsections (7), is due or assigned to the other party to the divorce action concerned, shall be paid by that fund to that other party when any pension benefits accrue in respect of that member'.

[10] Pension benefits will, in the normal course of events, accrue only when the member party's employment is terminated, or when he goes F into retirement or dies. That may happen many years after the decree of divorce has been granted. In the interim, the...