Case Law[2023] ZACC 5South Africa
R v R (CCT 337/21) [2023] ZACC 5; 2023 (9) BCLR 1126 (CC) (1 February 2023)
Constitutional Court of South Africa
1 February 2023
Headnotes
Summary: Contempt of Court — rule 42 of the Uniform Rules of Court — variation of court orders
Judgment
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## R v R (CCT 337/21) [2023] ZACC 5; 2023 (9) BCLR 1126 (CC) (1 February 2023)
R v R (CCT 337/21) [2023] ZACC 5; 2023 (9) BCLR 1126 (CC) (1 February 2023)
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CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT 337/21
In
the matter between:
D[…]
J[…]
R[…]
Applicant
and
R[…]
T[…]
R[…]
Respondent
Neutral
citation:
R[…] v R[…]
[2023] ZACC 5
Coram:
Baqwa
AJ, Kollapen J, Madlanga J; Majiedt J, Mathopo J,
Mhlantla
J,
Rogers J and Tshiqi J.
Judgment:
Tshiqi
J (unanimous)
Heard
on:
16 August 2022
Decided
on:
1 February 2023
Summary:
Contempt
of Court — rule 42 of the Uniform Rules of Court —
variation of court orders
ORDER
On
appeal from the High Court of South Africa, Gauteng Division,
Pretoria, the following order is made:
1.
The appeal is upheld.
2.
Paragraphs 3 to 6 of the order of the
High Court of South
Africa, Gauteng Division, Pretoria
are set aside
and is substituted with the following:
“
3.1.
The application to hold the respondent in contempt of the order dated
23 February 2018 is dismissed.
3.2.
Each party is ordered to pay its own costs.”
3.
Each party is ordered to pay its own costs in the Supreme Court of
Appeal and
this Court.
JUDGMENT
TSHIQI
J (Baqwa AJ, Kollapen J, Madlanga J; Majiedt J, Mathopo J,
Mhlantla
J
and Rogers J concurring):
Introduction
[1]
This is an application for leave to appeal against
part of the order
of the High Court of South Africa, Gauteng Division, Pretoria.
The order flowed from an application
by the respondent,
Mrs R[…] T[…] R[…], in terms of which she
sought that the applicant, Mr D[…]
J[…] R[…],
be held in contempt of an earlier High Court order in divorce
proceedings between the parties.
[2]
Mr R[…] is now challenging the contempt
order on two grounds.
The first challenge is aimed at the fact that in paragraph 2.3
of the order in the divorce proceedings,
the High Court had declared
that Mr R[…] and Mrs R[…] remained as the joint
owners of a property known as R[…]
d[…] M[…], in
M[…], Mozambique and were equally entitled to whatever net
rental income the property generated.
In the contempt
proceedings, the High Court held that Mr R[…] was in contempt
of that order because he had failed
to pay over to Mrs R[…]
her share of the net rentals earned from that property.
[3]
The second challenge was aimed at the decision
of the High Court to
vary paragraphs 2.4 and 2.6 of its order in the divorce
proceedings by invoking rule 42(1) of the
Uniform Rules of
Court. In terms of paragraph 2.4 of the order in the divorce
proceedings, Mr R[…] had to transfer
40% of his shareholding
in his business in Mozambique to Mrs R[…] within 60 days of
the order, including the shareholding
in certain specified Mozambican
companies as well as in a specified South African company. In
terms of paragraph 2.6,
the High Court ordered the parties to retain
the movable property in their possession at the time of the order,
including half
of the Dream Vacation Club points. In the
contempt of court proceedings, the Court unilaterally varied the
orders in both
paragraphs 2.4 and 2.6 and made orders that none of
the parties had prayed for. It substituted paragraph 2.4 with
an order
requiring Mr R[…] to pay Mrs R[…] an
amount of $450 000 within 60 days. The High Court
also
varied paragraph 2.6 to the effect that if Mr R[…]
paid Mrs R[…] an amount of R44 000, he would
become
the sole owner of the Dream Vacation Club points.
Factual
background
[4]
Mr and Mrs R[…] were married out of community
of property in
Zimbabwe after the birth of their first born child and then settled
there in a small town. It seems that they
came back to South
Africa for a while before moving back to Zimbabwe. At the time
of their marriage, they both had little
to no assets. Mrs R[…]
had a matric qualification coupled with a six month stable management
course. Mr R[…]
also had a matric qualification and was
in the process of qualifying as an electrician. When they later
moved back to Zimbabwe,
Mrs R[…] worked for a well-known horse
racing entity and thereafter as a bookkeeper, after having undergone
a six month
bookkeeping related training course. She later
joined the successful electrical services company, which Mr R[…]
had opened.
[5]
In its early days the company was small, but it
soon grew into a
business which provided the parties with a comfortable standard of
living. The parties conducted the business
as a partnership and
both held 50% shares of the company. Mrs R[...] dealt with the
administration of the business, and Mr
R[…] focused on the
operations. Later on the company merged with another and at
that point Mrs R[…] discontinued
rendering her services to the
company.
[6]
Owing to the declining economy and other adverse
factors prevailing
in Zimbabwe at the time, Mr R[…] decided to explore business
opportunities in Mozambique. This entailed
frequent travelling and
absence from his family in Zimbabwe. At some stage, the parties
moved to an estate in White River,
South Africa, and also
acquired a house in Maputo, Mozambique, where they stayed for a short
period of time. During
the subsistence of the marriage, it was
Mr R[…] who provided the funds for the acquisition of the
parties’ assets,
movable and immovable, as well as for their
maintenance. There is a dispute as to whether Mrs R[…]
had been encouraged
to become self sufficient or whether Mr R[…]
was content to have Mrs R[…] create and maintain a
comfortable
domestic environment for the sake of the family,
primarily the children.
The
divorce action
[7]
The
marriage relationship eventually broke down and in 2015 Mrs R[…]
instituted a divorce action in the High Court.
Despite the
marriage being solemnised in Zimbabwe and in terms of the laws of
that country, the parties agreed that the High Court
had
jurisdiction to determine the divorce proceedings and also agreed
that the Court would apply the Matrimonial Causes Act of
Zimbabwe
[1]
(the Act). What enjoyed the particular attention of the High
Court, were the patrimonial consequences of the divorce.
The
parties were in agreement that the maintenance claimed by Mrs R[…]
would stand over to be determined by a Maintenance Court
as it
could only be properly adjudicated once the consequences and extent
of a redistribution order had been determined.
Because the
dispute centred around the patrimonial consequences of the divorce,
more particularly, whether a redistribution order
should be granted
and, if so, on what terms, the Court focused on the provisions of
section 7 of the Act.
[8]
Section 7 clothes an appropriate court with the
authority to exercise
its judicial discretion to make an order re allocating
matrimonial property upon granting a decree of
divorce, judicial
separation or nullity of marriage. Section 7, headed “Division
of assets and maintenance orders”,
provides:
“
(1)
Subject to this section, in granting a decree of divorce, judicial
separation or nullity of marriage,
or at any time thereafter, an
appropriate court may make an order with regard to—
(a)
the division, apportionment or distribution of the assets of the
spouses, including
an order that any asset be transferred from one
spouse to the other;
(b)
. . .
(2)
An order made in terms of subsection (1) may contain such
consequential and supplementary
provisions as the appropriate court
thinks necessary or expedient for the purpose of giving effect to the
order or for the purpose
of securing that the order operates fairly
as between the spouses and may in particular, but without prejudice
to the generality
of this subsection—
(a)
order any person who holds any property which forms part of the
property of one or
other of the spouses to make such payment or
transfer of such property as may be specified in the order;
(b)
. . .
(3)
. . .
(4)
In making an order in terms of subsection (1) an appropriate court
shall have regard
to all the circumstances of the case, including the
following—
(a)
the income-earning capacity, assets and other financial resources
which each spouse
and child has or is likely to have in the
foreseeable future;
(b)
the financial needs, obligations and responsibilities which each
spouse and child
has or is likely to have in the foreseeable future;
(c)
the standard of living of the family, including the manner in which
any child was
being educated or trained or expected to be educated or
trained;
(d)
the age and physical and mental condition of each spouse and child;
(e)
the direct or indirect contribution made by each spouse to the
family, including contributions
made by looking after the home and
caring for the family and any other domestic duties;
(f)
the value to either of the spouses or to any child of any benefit,
including a
pension
or gratuity, which such
spouse or child will lose as a result of the dissolution of the
marriage;
(g)
the duration of the marriage;
and
in so doing the court shall endeavour as far as is reasonable and
practicable and, having regard to their conduct, is just to
do so, to
place the spouses and children in the position they would have been
in had a normal marriage relationship continued between
the spouses.”
[9]
Mrs R[…] argued that it would be just if
Mr R[…] were
ordered to transfer to her one half of his assets, or such portion as
the Court deemed just. Alternatively,
if Mr R[…]
were to be ordered to make payment to her, the payment that would be
just would be an amount equal to half
of the net value of his estate.
[10]
The High Court considered the circumstances set out in section 7(4)
of the Act. Regarding the earning capacity of the parties, it took
into account the fact that Mrs R[…] had a limited
income-generating capacity. This was, according to the
High Court, due to the fact that the training courses she
attended
in the early years of their marriage had become outdated and
of little use at the time of the divorce proceedings. It also
considered that she had no recent work experience. It further
took into account that her stable management abilities appeared
to be
limited. The High Court formed the view that even though
Mrs R[…] was doing photographic work for local
businesses, the
nature and extent of those ventures and the income they generated
appeared to be small.
[11]
When dealing with Mr R[…]’s income-earning
capacity,
the High Court noted that he had progressed in his career
and was a director on the board of a holding company in the
engineering
and construction field which had four subsidiaries.
The Court highlighted that although there was a decline in the
Mozambican
economy, and the changes in its political landscape had
led to the companies having to downsize due to loss of government
contracts,
Mr R[…] would still retain an income generating
capacity which far outweighed that of Mrs R[…]. The
Court pointed out that whilst the properties in South Africa were all
in the name of Mrs R[…], they had, save for one,
been
depleted and the only assets of real value were those in Mozambique.
[12]
Regarding the asset position of each party, the Court took into
account
that Mr R[…] held 45% of the shares in the
Mozambican group of companies and the fact that its property was
worth $3
million. The High Court concluded that the group of
companies had a net asset value of around $11 million. Mr R[…]
also held, in joint ownership with Mrs R[…],
Dream Vacation Club points worth R44 000. The
High Court
also considered that he had furniture worth
approximately R70 000. It also took into account that Mr R[…]
owned
15 stands in a prospective development in Mozambique, which
only had a speculative value at the time of the divorce but would
have
real value once a development had taken place. It
estimated that he had a debt of approximately R500 000. The
Court noted that Mr R[…] estimated his net asset value at
somewhere between $750 and $1 million. Mrs R[…]’s
assets on the other hand included a registered immovable property
outside White River which was valued between R1.9 million
and
R2.2 million. The High Court noted that the parties
were the joint owners of the residential property in Maputo,
Mozambique, which according to the Court was worth between $405 000
and $633 000.
[13]
Regarding the parties’ financial needs, obligations and
responsibilities,
the Court formed the view that Mr R[…]
was able to maintain himself and his lifestyle, despite the large
drop in his
monthly income. Mrs R[…] on the other hand
had very little income from which she could maintain herself and the
property
on which she lived, apart from a modest rental income. The
High Court stated that it was clear that the parties’ standard
of living had, to a certain extent, declined compared to the period
when their businesses in Mozambique were flourishing.
It noted
that Mrs R[…]’s lifestyle had diminished primarily due
to the separation, lack of maintenance from Mr R[…],
and also
as a result of Mr R[…]’s business woes.
[14]
The Court found that there was no evidence relating to pensions,
benefits
or gratuities which either of the parties would lose as a
result of the divorce. After taking into account the
circumstances
listed under section 7(4), it concluded that Mrs R[…]
was entitled to an order distributing Mr R[…]’s assets
as envisaged in section 7(1) of the Act. In determining the
nature, extent and mode of the distribution, the Court took
into
account that Mr R[…] would proceed with his life in Mozambique
for the foreseeable future as his businesses were there
and he no
longer had any link to W[…] R[…], Mpumalanga.
[15]
Regarding the maintenance claim and a final redistribution order, the
High Court held that the issue of maintenance and redistribution
were interrelated and that the former could only be assessed
once the
latter had been determined. It was concerned that in this case
there were so many undetermined valuations in respect
of Mr R[…]’s
assets that it could not finally determine the impact of a
redistribution order on Mrs R[…]’s
ability to
maintain herself. It decided to postpone the issue of
maintenance. In regard to Mr R[…]’s
shareholdings, the Court said that it would be “fraught with
danger” to accord a monetary value to the shares. This,
because of the uncertainties surrounding the value of the companies.
Instead, the Court considered that a transfer of 40%
of Mr R[…]’s
shareholding to Mrs R[…] would be appropriate. On
23 February 2018 it granted
the following order:
“
1.
A decree of divorce is granted;
2.
In terms of Section 7(1) of the Matrimonial Cause Act, of Zimbabwe,
Act No. 33 of 1985
(as amended) it is ordered as follows:
2.1.
[Mrs R[…]] shall retain as her sole property the immovable
property known as Plot 5[…],
T[…] Road, W[…]
R[…], Mpumalanga;
2.2.
[Mr R[…]] shall remain liable for the bond over the property
and shall pay the instalments
due in respect thereof;
2.3.
Both parties shall remain joint owners of the property known as 4[…]
R[…] d[…]
M[…], M[…], Mozambique which
may not be sold or encumbered without prior written consent of both
parties and who
shall equally be entitled to whatever net rental
income the property generates;
2.4.
[Mr R[…]] shall transfer 40% (forty per cent) of his
shareholding in his businesses in
Mozambique to [Mrs R[…]]
within 60 days from date of this order, including but not limited to
the shareholding in Engco
Group, Engco Limitada, Engco Electrica
Limitada, Fleetco Limitada, Pierlite Limitada as well as in the
South Africa company
Engco Engineering Services (Pty) Ltd with
registration number 2[…];
2.5.
[Mr R[…]] shall retain as his sole property the 15 vacant
stands in C[…] d[…]
S[…], Maputo;
2.6.
The parties shall each retain the movable property in their
possession at the time of this order
as their own, including half of
the Dream Vacation Club points each;
2.7.
Pending the [finalisation] of the issue of [Mrs R[…]’s]
claim for maintenance, [Mr R[…]]
shall pay the amount of
R10 000 per month with the first payment before or on 7 March
2018 and each successive payment before
or on the 7
th
day
of each month as well as the levies and costs due in respect of the
Dream Vacation Club points of the parties and, if [Mrs
R[…]]
has already made payment for 2018, [Mr R[…]] is to reimburse
her.
3.
[Mrs R[…]’s] claim for maintenance for herself is
postponed
sine die
and may be enrolled in this court or in a
Magistrates or similar court with competent jurisdiction.
4.
[Mr R[…]] shall pay 40% of [Mrs R[…]’s] costs of
the divorce
action including the costs of the Rule 43 application,
the costs of which have previously been ordered to be costs in the
causes.”
Contempt
proceedings
[16]
Mrs R[…] brought an application before the High Court,
seeking
an order declaring Mr R[…] to be in contempt of the
High Court order in the divorce proceedings. She alleged that
Mr R[…] had wilfully failed to comply with the divorce order
in that he failed to: (a) pay her the share of the rental income
derived from the property in Mozambique; (b) transfer to her name 40%
of his shareholding in his businesses in terms of the court
order;
(c) pay her the amount due for the points in the Dream Vacation Club
for 2018; and (d) take any steps to ensure that the
matter regarding
her maintenance claim was set down in a Magistrates’ court with
competent jurisdiction. As a sanction
for the contempt, Mrs
R[…] sought the imposition of a sentence of two months’
imprisonment on Mr R[…], to be
suspended on condition that he
complied with the terms of the divorce order within two weeks of the
order.
[17]
It seems that the contempt application did not initially come to the
personal attention of Mr R[…]. On 10 July 2019, the High
Court (per Mngqibisa-Thusi J) issued a rule nisi calling
on him
to show cause why it should not be finally ordered that he had failed
to comply with the divorce order and why he should
not be ordered to
comply within two weeks, failing which he would be sentenced to two
months’ imprisonment. Subsequently,
the matter became
opposed and the return day was extended.
[18]
In opposing the
contempt
application,
Mr R[…] filed an application for leave to appeal against the
divorce order and an application for condonation
of the late filing
of the application. He also filed a counter application to
vary the divorce order, particularly
paragraphs 2.2, 2.3, and
2.6 and the deletion of paragraph 2.4 in its entirety. Mr R[…]
sought an order to the
effect that the property known as plot 5[…],
T[…] Road, W[…] R[…], Mpumalanga be sold and the
net proceeds be paid to himself. He also sought to retain the
sole ownership of the R[…] d[…] M[…] property
in
Mozambique and Mrs R[…]’s removal as a co owner
of the property. Mr R[…] also sought
to retain as
his sole property all the points in the Dream Vacation Club
subscription and tendered to be solely liable for all
its levies and
expenses. He further sought an order deleting the entire
paragraph relating to the transfer of the shares
in his businesses to
Mrs R[…].
[19]
The matter
was set down for hearing before Davis J on 1 February 2021. Before
the matter was heard, the High Court, through
the CaseLines
platform,
[2]
requested the parties to furnish it with the total value of Mrs
R[…]’s half share of the rental income of the property
in Mozambique, from the date of divorce until the date of its
enquiry. It requested that the amount be set out in South
African as well as Mozambican currency. It also asked for the
details of the account where the rental monies had been paid.
Mr R[…] did not respond but Mrs R[…] did and
indicated that the amount was R489 136.59, or MT2 106 311
(Mozambican meticals).
[20]
All the applications were heard simultaneously and judgment
was handed down on 10 February 2021. Regarding the
application
for condonation and the application for leave to appeal,
the High Court held that Mr R[…] had,
through his conduct, acquiesced in the divorce order for more than
two years but later
wilfully failed to comply with it. The
Court held that Mr R[…]’s conduct through peremption of
the appeal was
inconsistent with an intention to appeal, and that he
was thus precluded from subsequently applying for leave to appeal.
It
held that Mr R[…] had in any event not
satisfactorily explained the lengthy delay in seeking leave to
appeal. It
held further that had the contempt application not
been launched, Mr R[…] would not have launched the application
for leave
to appeal.
[21]
The Court further held that even if Mr R[…]
had not acquiesced in the order, and even if it were inclined to
grant condonation
for the late filing of the application for leave to
appeal, there was another hurdle; the application had no reasonable
prospects
of success. The High Court reasoned that even if leave to
appeal were to be granted, the problem would be that Mr R[…]
had
failed to place evidence before the Court on the monetary value
of his shareholding in the companies. It highlighted that
this
was as a result of the fact that his evidence regarding the value of
the shareholding in the Mozambican companies was vague,
that the
Court, in the divorce proceedings, decided to make an order that Mrs
R[…] was entitled to a percentage shareholding
in the
companies rather than awarding her a certain amount of money.
Furthermore, the application for leave to appeal was
not
accompanied by an application to lead further evidence on appeal and
did not state why the evidence was not adduced during
the divorce
proceedings. The Court highlighted that it was still in the
dark regarding the true value of the shares and that
all it had
before it was the vague evidence led at the divorce proceedings.
It dismissed the application for condonation
and consequentially the
application for leave to appeal and the counter application.
[22]
The Court considered the contempt
application and said that the issues it had to determine concerned:
(a) the rental income due
in respect of the R[…] d[…]
M[…] property, Mozambique; (b) the transfer of shares to Mrs
R[…]; (c)
the Dream Vacation Club points; and (d) the
maintenance to be paid to Mrs R[…].
[23]
Concerning the rental income, Mr R[…]’s
defence was that Mozambican exchange control regulations prohibited
him
from remitting the money to Mrs R[…] in South Africa
and that she had failed to furnish particulars of an operational
Mozambican bank account into which he could pay her share of the
rent. Paying her in South Africa, he said, would enable
her to
avoid her tax liabilities in Mozambique. The High Court
found that nothing had prevented Mr R[…] from
making payment
in South Africa if necessary, out of resources he had in this
country. Moreover,
even though Mr R[…] was
not expressly ordered to make payment of the rental income to Mrs
R[…], it was common
cause that he administered and received
the rental income.
[24]
Concerning the company shares, the High Court held
that although there may have been adverse corporate consequences for
Mr R[…]
if he transferred a portion of his shares to Mrs R[…],
he was not entitled to simply disregard the court order.
The Court
found that his disregard of the court order would have
been ameliorated if he had promptly applied to have the order varied
or
if he had made proposals to pay a fair value to Mrs R[…]
in lieu of the shares, instead of simply disregarding the order.
[25]
Although the High Court had noted that Mr
R[…] did not promptly apply for a variation of the order and
although it lamented
his disregard of the order, it nonetheless
varied its earlier order regarding the shareholding. It
substituted its order
with a monetary amount which it believed would
be equivalent to 40% of the company shares that Mr R[…]
was required
to transfer.
[26]
The High Court granted an order which read in
part
:
“
3.
The rule nisi dated 10 July 2019 is confirmed as follows: [Mr R[…]]
is declared
to be in contempt of the order of this court dated 23
February 2018 and is hereby sentenced to imprisonment of 60 (sixty
days),
which sentence is wholly suspended on condition that he makes
payment, in South Africa, to Mrs R[…], into her bank account
designated by her attorneys on 12 March 2018 of the amount of
R489 136,59, within 30 days of this order.
4.
Should Mr R[…] fail in future to ensure that Mrs R[…]
is quarterly
paid her half share of the net rental income from the
property known as 4[…] R[…] d[…] M[…],
M[…], Mozambique (after adjustment for any taxation payable on
such rental by Mrs R[…]), she shall be entitled
to
approach this court afresh on the same papers as supplemented.
5.
The order of this court dated 23 February 2018 is amended by the
substitution
of paragraphs 2.4 and 2.6 thereof with the following:
2.4.
[Mr R[…]] shall pay [Mrs R[…]] US $450 000,000
within 60 days from the
date of this order, or within such
extension of time as this court may on good cause grant.
2.6.
The parties shall each retain the movable property in their
possession at the time of the order
as their own save that, upon
payment of [Mrs R[…]] R44 000,00 [Mr R[…]] shall
become the sole owner of the Dream
Vacation Club points.
6.
The date of 60 days referred to in the amended paragraph 2.4 of the
initial order
shall, for purposes of the payment mentioned herein, be
calculated from date of this order.
7.
Mr R[…] shall pay Mrs R[…]’s costs of these
applications.”
[27]
Mr R[…] subsequently filed an
application for leave to appeal against the order in the contempt
proceedings. In its
judgment refusing the application for leave
to appeal, the Court stated the following regarding the rental income
and the shareholding
in the companies:
“
In
[Mr R[…]’s] counter-application, he sought an order
amending the redistribution order with the effect that, not
only that
he becomes the exclusive owner of the Masala property and that the
property in which [Mrs R[…]] is residing [the
W[…] R[…]
property] be sold and the proceeds paid to him, but that the order
for the transfer of 40% shares
in the named companies be deleted
in toto
.
I interpose to add that [Mr R[…]] remained silent
as to the current circumstances or values of the 15 ‘development
stands’ in Mozambique, also retained by him in terms of the
distribution order.
As
already aforestated, the counter-application was refused but the
order for transfer of shares was converted to an order for payment
of
a value based on [Mr R[…]’s] evidence in the
trial.”
[28]
The above reasoning by the High Court shows
clearly that it granted a variation of the order on its own terms,
although it had dismissed
Mr R[…]’s
counter application. It varied the order even though it
had reasoned that Mr R[…]
had acquiesced in its divorce
order; that his application for condonation of the late filing of the
application for leave to appeal
and his application for leave to
appeal were meritless; and that the evidence concerning the value of
Mr R[…]’s shareholdings
in the companies was vague.
As will be explored further below, when the High Court varied
the divorce order, it ordered
that Mrs R[…] be paid an amount
of money based on the same evidence it had rejected during the
divorce proceedings on the
basis that it was vague.
[29]
Mr R[…]’s
further application for leave to appeal to the Supreme Court of
Appeal was dismissed by that Court, and so
was an application to the
President of the Supreme Court of Appeal for reconsideration in terms
of section 17(2)(f) of the
Superior Courts Act.
[3]
This
Court
Jurisdiction and leave to
appeal
[30]
The
first issue to be determined is whether this Court has jurisdiction
to entertain this application. The determination of
jurisdiction is based on the parties pleadings.
[4]
Mr R[…]’s pleadings on the issue of jurisdiction
are not a model of clarity. During oral submissions,
Mr R[…]’s
counsel clarified that this Court’s jurisdiction is
engaged on the basis of a breach of
sections 12 and 34 of
the Constitution. He submitted that Mr R[…]’s
right to freedom and security
under section 12 of the
Constitution would be breached if paragraph 3 of the High Court order
in the contempt proceedings
is enforced. This was based on the
fact that paragraph 3 imposed a conditional sentence of imprisonment
if Mr R[…]
failed to comply with it. Regarding
section 34 of the Constitution, Mr R[…]’s
counsel contended that
his constitutional right was breached, because
although the High Court had dismissed Mr R[…]’s
counter application,
it unilaterally amended paragraph 2.4
and 2.6 of the divorce order and substituted it with an order that
contained prayers
that none of the parties had sought.
[31]
Mr R[…]’s counsel further
argued that the High Court should not have relied on rule 42 for
the variation order,
because none of the parties had raised the issue
of a common mistake and there was in any event no evidence to that
effect. Counsel
also submitted that no evidence was adduced
during the contempt proceedings regarding the value of the shares,
and that the Court
should not have valued the shares at the amount of
$450 000 because it had initially rejected this amount during
the divorce
proceedings. Furthermore, the High Court did not
enquire whether Mr R[…] could afford to pay the money in
South
Africa or at all. In doing so, Mr R[…]’s
counsel contended that the High Court had breached the
audi
alteram partem
principle (the duty to
hear the other side), which is a cornerstone of fairness in judicial
proceedings. Mr R[…]
also submitted that this
application raises several arguable points of law of general public
importance which are “cast in
stone but which were entirely
ignored in the Court a quo”. Mrs R[…] did not
seriously challenge the jurisdiction
of this Court. The
focus of her submissions were on leave to appeal.
[32]
In
Tuta
,
[5]
this Court held that the jurisdiction of this Court would be engaged
on the basis of an alleged error of law that is of such a
serious
nature that it implicates an applicant’s right to liberty as
entrenched in section 12(1) of the Constitution.
The Court
held:
“
An
error of this kind, if left uncorrected, would render the applicant’s
trial unfair. It would also condemn the applicant
to suffer a
conviction and sentence of great consequence. . . . [G]reat
prejudice to the applicant would occur if the error
of law is shown
to have been made, and remains uncorrected. In these
circumstances, a constitutional issue arises that engages
our
jurisdiction.”
[6]
[33]
I accept that most of the criticisms
directed at how the High Court dealt with the contempt application
are to a certain extent
errors of established legal principles, but
they implicate sections 12 and 34 of the Constitution and are so
serious that they
need the attention of this Court. A further
issue that arises here is whether it is competent for a court to
unilaterally
substitute its order with terms that neither of the
parties had prayed for. In varying the order, the High Court
placed
reliance on rule 42(1)(c) of the Uniform Rules of Court, which
grants it, of its own accord, or upon application by any affected
party, the power to vary or rescind its earlier order if it was
granted as result of a mistake common to the parties. It
has to
be determined whether there was indeed a common mistake between the
parties or whether the High Court incorrectly invoked
rule 42(1)(c)
simply because it was concerned about the difficulties experienced by
Mrs R[…] in seeking to enforce
the divorce order.
[34]
Mr R[…] submitted that the
misdirection by the High Court deserves this Court’s attention
and that the application
has reasonable prospects of success.
Mrs R[…] denied that the High Court committed any
errors of law in the matter
and submitted that leave to appeal should
be dismissed on the basis that the application had no merit.
[35]
We
know that the High Court in the divorce proceedings made an order
declaring Mr and Mrs R[…] joint owners of the R[…]
d[…] M[…] property in M[…], Mozambique, and that
they are equally entitled to rental income generated from
the
property. Paragraph 3 of the order in the contempt
proceedings holds Mr R[…] in contempt of that order
because he failed to pay the rental income generated from that
property to Mrs R[…]. It effectively sentenced
Mr
R[…] to 60 days’ direct imprisonment, which was
suspended, provided he paid a certain amount of money to Mrs R[…].
It seems that the order of the High Court is not consistent
with the decision of this Court in
Coetzee
where this Court held that imprisonment may not flow from a failure
to pay an amount of money.
[7]
These sentiments were echoed by the Supreme Court of Appeal in
Jayiya
which held that, except in the case of an order for the payment of
maintenance, a money judgment is not enforced by contempt proceedings
but by execution.
[8]
The
same position was confirmed by this Court in
Bannatyne.
[9]
Paragraph 2.3 of the divorce order is not an order for the payment of
maintenance but is concerned with the rights of the
parties as
co owners of the Masala property. It is also necessary to
determine whether an order of contempt of court
may flow from an
order couched in declaratory terms. The application bears
reasonable prospects of success. Leave to
appeal is thus
granted.
Merits
[36]
The issues that have to be determined on
the merits are first, whether Mr R[…] was in contempt of
the order made by
the High Court in the divorce proceedings which
declared Mr and Mrs R[…] to be joint owners of the property in
M[…],
Mozambique. Second, whether, having found Mr R[…]
in contempt of the declaratory order, the High Court could
impose a sentence of direct imprisonment, conditional upon payment of
an amount of money, which according to the High Court
was the
equivalent of the arrear rental income. Third, whether the
High Court could vary its earlier order granted in
the divorce
proceedings regarding the transfer of shares to Mrs R[…].
Here, the question is whether the Court
could substitute its divorce
order (to the effect that Mr R[…] should transfer 40% of
his shareholding in his various
companies listed in the order to
Mrs R[…]) by ordering, in the contempt proceedings, that
Mr R[…] should retain
the shareholding in the companies and
pay to Mrs R[…] $450 000 within 60 days from
the date of the order.
Fourth, whether the High Court could invoke
rule 42(1)(c) in order to vary its earlier order. Related
to this, is whether
there was a common mistake between Mr and
Mrs R[…] regarding Mr R[…]’s
shareholding in the various
companies. Fifth, whether the High
Court could amend its earlier order concerning the Dream Vacation
Club points. In
terms of the divorce order it had ordered that
each party should retain the movable property in their possession at
the time of
the order as their own, including half of the Dream
Vacation Club points. Here the question is whether the High
Court could
amend that order and substitute it with an order which
provided that, once Mr R[…] had paid an amount of R44 000
to
Mrs R[…], he would become the sole owner of the Dream
Vacation Club points.
The Maputo property
rental income
[37]
The first question is whether Mr
R[…] was in contempt of the court order in respect of the
rental income. During the
divorce proceedings, the High Court
made the following order, at paragraph 2.3 of its order, in respect
of the property in M[…]:
“
Both
parties shall remain joint owners of the property known as 4[…]
R[…] d[…] M[…], M[…], Mozambique
which may not be sold or encumbered without prior written consent of
both parties and who shall equally be entitled to whatever net
rental income the property generates
.”
The
High Court order in respect of the property in Maputo was purely
declaratory in nature and did not require Mr R[…] to
do
anything. The High Court itself in its judgment in the contempt
proceedings acknowledged this but seemed to hold the view
that
because Mr R[…] administered and received the rental income,
he ought to have paid Mrs R[…]’s share
to her even
though there was no express order to that effect.
The
High Court said that “[a]lthough Mr R[…] was not
expressly ordered to make such payment, at all relevant times
it was
common cause that he administered and received the rent”.
[38]
The High Court also placed a lot of emphasis on the fact that Mr R[…]
had initially tendered to pay the amount. In argument before
this Court, Mrs R[…]’s counsel made reference
to
correspondence from Mr R[…] where he requested Mrs R[…]
to furnish him with the details of her Mozambican
bank account so
that he could transfer her share of the monthly rental income from
March 2018 onwards. It was argued that
this shows that Mr R[…]
understood that he had to pay the rental income to Mrs R[…].
[39]
First, the fact that Mr R[…] administered the rental income
generated
by the property did not mean that the court order created a
positive obligation on him to transfer and pay the amount to
Mrs R[…].
At most he had the responsibility to
ensure that Mrs R[…]’s share of the rental income was
not utilised by him or
any other person, as he was not entitled to
it. One must distinguish between: (a) an obligation which might
have arisen from
co-ownership and an agreement for him to administer
the property on the one hand; and (b) an obligation imposed by the
Court.
Perhaps it could be argued that he was under a
contractual obligation to account to Mrs R[…] for her
half share of
the rent, but this obligation, if it existed, was
not translated into a court order. Second, the fact that he
acknowledged,
in correspondence, that the rental income was payable
to Mrs R[…], does not mean that he was obliged in terms
of the
court order to effect payment. His failure to make the
payment did not place him in contempt of the court order. The
fact that he could have paid her out of resources he had in
South Africa is also of no consequence in the circumstances.
[40]
Even
if we were to assume, for the moment, that Mr R[…] was
obliged, in terms of the order, to pay the amount to Mrs R[…],
we would still have to find that the evidence before the High Court
established wilfulness and mala fides. This Court in
Matjhabeng
Local Municipality
listed as the fourth element of contempt that it must be established
beyond reasonable doubt that the respondent was wilful and
mala fide
in his failure to comply with the order.
[10]
The High Court would have to be satisfied, beyond a reasonable doubt,
that Mr R[…] wilfully and in bad faith failed
to pay the
amount.
[41]
Mr R[…], in his defence, stated that
he could not pay the amount representing Mrs R[…]’s
share of the net
rental income because Mozambican exchange control
regulations prohibited him from remitting the money to Mrs R[…]
in South
Africa. He also alleged that she had failed to furnish
particulars of an operative Mozambican bank account and that paying
her in South Africa would enable her to avoid her tax liabilities in
Mozambique. He throughout expressed a willingness to
pay her
half share of the net rent to her in Mozambique.
[42]
There was no evidence that Mrs R[…]
had opened the account in Mozambique as requested by Mr R[…]
and that he nonetheless
failed to make payment. Mr R[…]
indicated that paying the rental income into a bank account in
South Africa
would also have tax implications. In order to
convict him, the Court would have to be satisfied beyond a reasonable
doubt
that Mr R[…] could lawfully pay Mrs R[…] in
South Africa and that he knew that this option was available to him.
I accept that he did not state that he could not offset the tax
implications on the rental income due to her and provide
her with a
statement, but the High Court did not enquire about this. It
concluded that Mr R[…] should have considered
paying into
a South African bank account. The High Court also did
not consider the tax implications and which party
would have to bear
them. The fact that there were options that Mr R[…]
could have explored does not prove, beyond
a reasonable doubt, that
there was wilfulness or mala fides on his part.
[43]
One option that could have been
explored by Mrs R[…], instead of asking for a contempt of
court order, was to apply for an
order for Mr R[…] to provide
a statement of account reflecting the rental income received. She
could then claim payment
of the amount in a separate action. When
Mrs R[…]’s counsel was asked, during oral submissions
before this Court,
whether this option was available, he bemoaned the
fact that this would burden Mrs R[…] with legal fees of a
separate action.
I accept that this may be so, but, it does not
seem as if she has many options if Mr R[…] does not pay the
amount
to her voluntarily. I say so because the order as it
stands simply declares her to be a joint owner and to be entitled to
the net rental income. It does not oblige Mr R[…]
to pay the rental income to her.
[44]
The
next enquiry is whether, having found Mr R[…] in contempt of
the declaratory order, a sentence of direct imprisonment,
conditional
upon payment of an amount of money was in any event a competent
order. The conditional sentence of imprisonment
imposed on him
by the High Court contradicts what was said by this Court in
Coetzee
.
There this Court struck out certain provisions of the then
Magistrates’ Court Act
[11]
which provided for imprisonment of judgment debtors. It held
that “to put someone in prison is a limitation of that
person’s
right to freedom. To do so without any criminal charge being
levelled or any trial being held
is
manifestly a radical encroachment upon such right.”
[12]
This Court continued:
“
The
fundamental reason why the means are not reasonable is because the
provisions are overbroad. The sanction of imprisonment
is
ostensibly aimed at the debtor who will not pay. But it is
unreasonable in that it also strikes at those who
cannot
pay and simply fail to prove this at a hearing, often due to negative
circumstances created by the provisions themselves.”
[13]
[45]
It
is thus established that imprisonment for failure to pay a debt is
unconstitutional and that section 12(1) of the Constitution
does not
permit imprisonment of a judgment debtor against whom an order is
made
ad solvendam pecuniam
(payment
of money)
.
However, this is a principle that existed long before the provisions
of the then Magistrates’ Court Act were declared
invalid.
[14]
Furthermore, and on the assumption that paragraph 2.3 of
the divorce order created an implied obligation on the part
of
Mr R[….] to pay the net rent to Mrs R[…], a
failure to satisfy a judgment
ad
solvendam pecuniam
cannot
ordinarily support contempt proceedings, in the same way as would a
judgment
ad
factum praestandum
(performance
of an act, alternatively refraining from performance of a certain
act).
[15]
[46]
The amount which the High Court ordered Mr
R[…] to pay was also not based on evidence led during the
contempt proceedings.
The High Court relied on evidence posted
by Mrs R[…] on the CaseLines platform concerning the value of
the rental
income, after it had asked the parties to provide its
value. In its judgment refusing Mr R[…]’s
application
for leave to appeal the contempt judgment, the High Court
responded to Mr R[…]’s criticism of the High
Court’s
reliance on the amount by stating that:
“
Adv
Geyer argued in this application that I could not have regard to that
amount as it was not presented in evidence and that ‘Caselines
notes have no relevance’. I find this stance, with
respect astounding. Where the extent of withholding of rental
is a relevant fact regarding the extent of breach or a contempt of a
court order, a court is certainly entitled to enquire detail
thereof
from the parties. Such a question could surely have been raised
in open court. The posing of the question on
the electronic
platform as opposed to in open court merely gave the parties advance
warning and notice of the question in order
to prepare or better to
deal with it. Although no separate order was made in this
regard, I find it contemptuous conduct
of a party to ignore a query
put to it by a presiding officer. The respondent can also
hardly be heard to complain when it
is common cause that he has
retained the rental income and, in answer to a query by the court as
to the extent of such retention,
he remains silent when the applicant
from the bar suggests an amount with some particularity, [that is]
R489 136.59, of which
he should himself have particular
knowledge.”
[47]
The reasoning by the High Court shows that
it accepted that the amount was not tendered as evidence, but laments
the fact that Mr
R[…] did not respond to its query regarding
the value of the rental income. The High Court also seems to
have held
the view that because Mr R[…] had not responded, it
was entitled to simply accept the amount specifically because Mr
R[…],
who is the one who received the monthly rentals, decided
not to respond. The High Court also formed an erroneous view
that
the failure to respond to its query was contemptuous, although
it did not make an order requiring compliance with this query. What
the High Court also overlooked was that the amount posted was
not tendered as evidence. It was also not properly assessed
by
it and there was no reasoning in its contempt judgment that explained
why it accepted the amount as a realistic or reasonable
value of the
rental income. No questions were posed to Mrs R[…]
on how she computed the amount and there was
no enquiry by the
High Court directed at Mr R[…] for the reason why he did
not respond to the query. Accordingly,
that evidence was not
properly before the Court and should not have been considered.
Shareholding in the
Mozambican companies and the variation of the divorce order
[48]
Mr R[…] argues that the High Court
unilaterally varied the divorce order initially issued by it
regarding the Mozambican
shares, although it was
functus officio
and lacked jurisdiction to vary or amend the order on its own terms
and of its own accord. Mrs R[…] submits that
the
High Court acted within its jurisdiction and was not
functus officio
when it varied the divorce order in terms of rule 42(1)(c),
alternatively the common law. Mrs R[…] further
submits that the High Court rightfully dismissed the argument
that there was no variation application before the Court because
rule 42(1)(c) allows a court to
mero
motu
vary its own order. This
order was varied because there were third party interests that had to
be taken into account in relation
to the shares and the Court had to
determine the value of the shares. She submits that even though
the applicant is correct
that a court cannot ordinarily vary its own
orders, rule 42(1)(c) as well as the common law provides for
exceptions to this
rule. According to Mrs R[…]
there were exceptional circumstances which justified the variation of
the order so
as to provide for the true intention of the court order
and for its implementation.
[49]
Rule 42(1)(c) regulates the variation and
rescission of orders in the High Court and states that:
“
(1)
The court may, in addition
to
any other
powers it may have,
mero motu
or upon the application of any party affected, rescind or vary—
. . .
(c)
an order or judgment granted as the result of a mistake common to the
parties
.”
[50]
In
Tshivhase
,
[16]
the Supreme Court of Appeal dealt with the requirements that must be
satisfied before rule 42(1)(c) is invoked and said:
“
In
relation to sub-rule (c) thereof,
two
broad requirements must be satisfied
.
One
is that there must have been a ‘mistake common to both
parties’
.
I
conceive the meaning of this expression to be what is termed
,
in the field of contract, a common mistake. This occurs where
both parties are of one mind and share the same mistake; they
are, in
this regard, ad idem . . . . A mistake of fact would be the
usual type relied on. Whether a mistake of law
and of motive
will suffice and whether possibly the mistake must be reasonable are
not questions which, on the facts of our matter,
arise.
Secondly,
there must be a causative link between the mistake and the grant of
the order or judgment
;
the latter must have been ‘as a result of’ the mistake.
This requires . . . that the mistake relate to and be
based on
something relevant to the question to be decided by the Court at the
time. . . . The principle is that cannot subsequently
create a
retrospective mistake by means of fresh evidence which was not
relevant to any issue which had to be determined when the
original
order was made. The reason is obvious: the Court would at that
time have had before it no evidence and thus no wrong
evidence on the
point; hence there would have been no mistake. Contrast
this with the case where the subsequent evidence
is aimed at showing
that the factual material which led the Court to make its
original order was, contrary to the parties’
assumption as to
its correctness, incorrect.”
[17]
[51]
In
Zuma
,
[18]
this Court held that rule 42 operates only in specific and
limited circumstances. Additionally, the interests of justice
require the grounds available for rescission (or variation) to remain
carefully defined.
[19]
The Court reiterated what the Supreme Court of Appeal held in
Colyn
,
[20]
that “the guiding principle of the common law is certainty of
judgments”.
[21]
Therefore, a court should only allow a rescission or variation of an
order in exceptional circumstances. Furthermore,
a court does
not have a discretion to set aside an order in terms of rule 42 where
one of the jurisdictional facts contained in
rule 42(1)(a)-(c) do not
exist.
Was there a common
mistake as envisaged in rule 42(1)(c)?
[52]
The High Court stated that there was a
common mistake between the parties because Mr R[…] had
treated the shareholding
of the various companies as his own.
Even his legal representatives at the divorce proceedings were under
the mistaken belief
that the shareholding could simply be
transferred. The High Court stated further that, at that
stage (that is, during
the divorce hearing), the submission from
Mr R[…]’s counsel was that the transfer must be
limited to 20% of the
shares. This, according to the
High Court, was indicative of the fact that the transfer was
envisaged to be possible,
but that when the counter application
was sought by Mr R[…], he submitted that the transfer of the
shares was no longer
possible.
[53]
The High Court held that, had the parties
and the Court known that the transfer of the shares would not have
been possible, a monetary
judgment equivalent to the value of the
shares would have been granted at inception. This, according to
the Court, would
have been possible under the Act.
[54]
During argument in this Court, Mrs R[…]’s
counsel submitted that another factor that supports a finding that
there
was a common mistake is that initially, during and after the
divorce proceedings, Mr R[…] intended to transfer the
shareholding
to Mrs R[…] but that after a while he had
what counsel referred to as a “change of heart” and did
not make
the transfer. To illustrate this point, we were
referred to an email dated 27 February 2018 from Mr R[…] to
Mrs R[…]
wherein Mr R[…] states that:
“
Israel
[a co shareholder] and I have spoken about the [transfer of the
shares] and both have no objections to the Court Order and
would like
to comply as of the date of the Court Order.”
[55]
The problem with placing reliance on this
correspondence is that it does not show that Mr R[…] was
mistaken about anything.
It only illustrates that at the time
he probably intended to comply with the court order. As
Mrs R[…]’s
counsel argued, the probabilities are
that he changed his mind.
[56]
At the divorce proceedings Mrs R[…]
testified that she did not know the identity of the directors in the
South African company
and did not suggest that Mr R[…]
was a shareholder thereof.
At the commencement of his
evidence, Mr R[…] spoke about there being a holding
company. In respect of the other
companies, reference was made
to him owning 45% “of the company”. Nobody bothered
to probe this. But the
reference to a “holding company”
clearly shows that nobody could have thought that he held shares
directly in each
of the companies. So the “company”
he was referring to in his evidence was almost certainly the holding
company.
[57]
The
evidence in the contempt proceedings dealt more specifically with how
the shares in the various companies were held. This
included
evidence that Mr R[…] personally holds 45% of Engco
Limitada (the holding company) and 10% of Pierlite Mozambique
Limitada. Although Mr R[…] does not hold shares directly
in the other companies, the aforesaid personal shareholding
give him
an indirect shareholding of each of the other companies.
[22]
The divorce order in its original form could notionally have been
implemented by Mr R[…] transferring 40% of his direct
shareholdings to Mrs R[…], which would have given her 40%
of his 45% direct and indirect shareholdings in all the companies.
Of course, if the articles of association of Engco or Pierlite
Mozambique Limitada would entitle the other main shareholder,
Mr Israel França, to “expropriate” Mr R[…]’s
shares or exercise a right of pre-emption
in the event of a proposed
transfer to Mrs R[…], this would have made compliance
with the order unattractive for both
Mr and Mrs R[…],
in which event they could negotiate a variation.
[58]
The companies are registered and
incorporated in Mozambique and they conduct business there.
Prior to the contempt proceedings,
and on 31 July 2018,
Mr R[…]’s previous attorneys notified Mrs R[…]’s
attorneys that in order
to give effect to the transfer of shares, Mrs
R[…] was required to comply with the provisions of the
Mozambican Commercial
Code which, amongst others, required her to
attend in Mozambique to take transfer of any shares before a notary
public. It
is improbable that Mr R[…] was mistaken
or ignorant of the Mozambican Commercial Code. The fact that Mr
R[…]’s
co-shareholder may have been unhappy about how
Mrs R[…] would handle the shares after the transfer does
not establish
any mistake by any of the parties. The fact that
Mr R[…] was also concerned that the transfer would result in
him
being a minority shareholder does not mean he was mistaken about
anything.
[59]
Could
the Court in varying its divorce order
mero
motu
make an order which differs materially from the prayers sought by the
parties? The principle of
functus officio
is interlinked with the principle of
res
judicata.
Once
a judgment has been handed-down, the Judge is
functus
officio
;
he or she has no power to make, alter or amend, in any material
terms, his or her decision or order, except in the exceptional
circumstances envisaged under rule 42. The principal judgment
or order may also be supplemented in respect of accessory or
consequential matters, for example, costs or interest on a judgment
debt, which the Court overlooked or inadvertently omitted to
grant.
The court may clarify its judgment or order if, on a proper
interpretation, its meaning remains obscure, ambiguous
or otherwise
uncertain, so as to give effect to its true intention, provided it
does not thereby alter “the sense and substance”
of the
judgment or order.
[23]
There was no evidence of any of these exceptional circumstances
here, and none of the parties alleged any of the above exceptional
circumstances. As illustrated in his counter-application,
Mr R[…] merely sought leave to appeal and a variation
in
order to allow him to retain the exclusive ownership of the immovable
and movable properties and the shareholding in the companies.
However, the counter application was dismissed.
[60]
Although the High Court dismissed all the
prayers sought by Mr R[…] in the counter application, it
stated that the counter-application
was partially successful.
It is not clear what the High Court meant by this. Mr R[…]
had prayed for an order that he should retain the
sole ownership of
the property in Mozambique and remove Mrs R[…] as a
co owner of the property.
The High
Court instead granted an order holding Mr R[…] in
contempt of its divorce order pertaining to the rental income
from
the property in Mozambique, and sentenced Mr R[…] to a period
of direct imprisonment conditional upon him paying a
certain amount
to Mrs R[…].
[61]
Regarding the shareholding of the Mozambican companies, Mr
R[…] had sought an order deleting the entire paragraph 2.4
relating
to the transfer of the shares in his businesses to Mrs R[…].
The High Court instead amended its earlier divorce order
and
substituted it with an order requiring Mr R[…] to pay Mrs R[…]
an amount of $450 000 within 60 days,
or within such
extension of time as the Court might grant, on good cause shown.
Concerning the Dream Vacation Club points,
Mr R[…]
had sought an order that he retain as his sole property all the
points in the Dream Vacation Club subscription,
and he also tendered
to be solely liable for all its levies and expenses. The
High Court instead ordered that each party
should retain the
movable property in their possession at the time of the order as
their own, save that upon payment to Mrs R[…]
of an
amount of R44 000, Mr R[…] would be the sole owner of the
Dream Vacation Club points.
[62]
The difference between the prayers sought
by Mr R[…] and the order granted in the contempt application
show that there was
no basis for the Court to hold that the
counter application was partially successful. It did not
grant any of the prayers
sought by Mr R[…]. It
appears that the Court thought that because there was a
counter application before
it, it could amend the terms of its
divorce order unilaterally and substitute it with an order on terms
that were not sought by
any of the parties. The High Court’s
unstated premise was that somehow there was a legal entitlement to
vary the
order because Mr R[…] had asked for variation in the
counter application. As stated, this did not follow,
because
Mr R[…] failed to make out any grounds for
variation within the scope of rule 42(1) or the common law, as the
High Court
correctly found.
[63]
Another concerning feature of the High
Court’s variation order in the contempt application is the
value attached by the Court
to the shareholding in the Mozambican
companies. When the High Court ordered Mr R[…] to pay
$450
000 to Mrs R[…] in
lieu of 40% of the shareholding in the companies, it attached a value
to them based on figures the
Court had rejected as vague and
unreliable in the divorce hearing. In varying its divorce
order, the High Court stated that,
at the time of the divorce, its
concern regarding the value of the shareholding in the Mozambican
companies had been whether a
monetary amount determined at that stage
would actually amount to 40% of the value of the shareholding. It
also had the concern
that Mrs R[…] might be short changed
by a monetary award, hence the order to the effect that a certain
percentage
of the shares themselves had to be transferred. The
High Court also highlighted that Mr R[…] had not, as at
that
date of the order in the contempt proceedings, provided any
proper valuations or financial statements of the companies.
[64]
Despite highlighting these shortcomings,
the High Court nonetheless awarded Mrs R[…] a cash amount
based on an assumed
value of the shareholding. During the
divorce proceedings, the net asset value of the companies on paper
was $11.3 million.
This included, as an asset, claims
against the Mozambique government of $17 million. Mr R[…]
doubted the
recoverability of these claims, and his rough estimate of
the net asset value was between $750 000 and $1 million.
The
High Court, in its contempt judgment, said that in the divorce
judgment it had given Mr R[…] a 50/50 impairment on the claims
against the government, thus reducing the net asset value from
$11.3 million to $2.5 million. The High Court
continued
that one could assume, in the absence of evidence to the
contrary, that none of the feared bad debt or impairment had come to
pass,
otherwise one would have expected this to feature in Mr R[…]’s
affidavits. On this basis, the High Court
treated the net asset
value of the companies as $2.5 million, with Mr R[…]’s
45% share being $1.125 million.
The sum the High Court
awarded to Mrs R[…], $450 000, is 40% of this
amount.
[65]
The High Court thus accepted figures which
it had rejected in the divorce proceedings. There was no
evidence led afresh in
the contempt proceedings concerning the value
of the shareholding. The Court took evidence it had rejected
earlier in divorce
proceedings in which it was already
functus
officio,
to vary its own order.
Mr R[…] cannot be criticised for not having dealt with
the value of the shareholding in
his affidavits, because there was no
application before the High Court to substitute paragraph 2.4
of the divorce order
with a monetary amount. There was simply
no justification for the High Court to regard vague and
unsubstantiated figures
bandied about three years earlier as a
reliable guide to the value of the shareholding in February 2021.
One of Mr R[…]’s
central complaints, in his founding
affidavit in this Court, is that he was not given the
opportunity to give evidence about
the current value of the
shareholding or whether he could afford to pay $450 000.
He alleges that he is unable to do
so in view of the impecunious
position of the Mozambican companies.
[66]
In order to illustrate the unacceptable
nature of the High Court’s conduct, Mr R[…]’s
counsel invited this
Court to ask whether what the High Court did
would have occurred if the contempt application had been allocated to
a different
Judge, who was not acquainted with the evidence led at
the divorce proceedings. The question is whether a different
Judge
would have re-opened the divorce proceedings by looking at the
evidence rejected at the divorce proceedings by another Judge and
then relied on it in order to award an amount in a contempt of court
order. The fact that both the divorce proceedings and
the
contempt application were allocated to the same Judge in this matter
did not permit this.
[67]
In
Molaudzi
,
[24]
this Court explained the principle of
res
judicata
as
the legal doctrine that bars continued litigation of the same case,
on the same issues, between the parties.
[25]
It held that:
“
Res
judicata
is the legal doctrine that
bars continued litigation of the same case, on the same issues,
between the same parties.
Claassen
defines res judicata as––
‘
(a)
case or matter is decided. Because of the authority with which
in the public interest, judicial decisions are invested,
effect must
be given to a final judgment, even if it is erroneous. In
regard to res judicata the enquiry is not whether the
judgment is
right or wrong, but simply whether there is a judgment.’”
[26]
One
reason for the rule is that uncertainty is to be eliminated so that
persons whose interests are affected by the decision can
safely rely
or act upon it until or unless it is set aside by a court of appeal.
[68]
The High Court was correct in holding that
it was not open to Mr R[…] to unilaterally decide not to
comply with the
court order, but this did not give the High Court
the competency to unilaterally vary the order materially on terms not
sought
by any of the parties. In any event, there was no
evidence to substantiate a variation order. If the High Court
held
a view that there was a common mistake and was minded to vary
the order
mero motu
,
it should have given the parties an opportunity to address it on what
it considered to be the common mistake. This could
either be in
the form of further affidavits or submissions.
[69]
It is also worth mentioning that rule 42(3)
was also available to the High Court. Rule 42(3)
states that “[t]he
court shall not make any order rescinding or
varying any order or judgment unless satisfied that all parties whose
interests may
be affected have notice of the order proposed”.
When the High Court decided to vary the divorce order, it
did
not give notice of the proposed order to the parties. In
varying its earlier order without affording the parties an
opportunity
to deal with its view, it followed an unfair process.
The Dream Vacation
Club points
[70]
For the same reasons, articulated above,
the Court should not have altered its divorce order regarding the
Dream Vacation Club points.
In holding that once Mr R[…]
had paid an amount of R44 000 to Mrs R[…], he would become the
sole owner of the
Dream Vacation Club points, the Court altered its
earlier order to the effect that each party should retain the movable
property
in their possession, including half of the Dream Vacation
Club points.
[71]
It follows that the appeal should be upheld
and the order of the High Court stands to be set aside.
Costs
[72]
Generally, there would have been no basis
to deviate from the default position that the costs follow the
result. But this
matter has peculiar nuances. Although
Mrs R[…] was legally represented during the divorce
proceedings, it is
clear from the facts that she cannot get her share
of the rental income from the property known as R[…] d[…] M[…],
M[…], Mozambique, unless she either reaches consensus with
Mr R[…] or obtains an order directing Mr R[…]
to
pay it over to her. That is a duplication of legal resources.
The divorce order could have been framed in a way
so as to
enable this to be possible, but the reality is that this did not
happen. Another consideration is that Mr R[…]
had
given her the impression that he would pay the amount, but then
changed his mind. Up until now, Mrs R[…]
has not
received the rental income even though she is entitled to it.
[73]
Regarding the shareholding, Mr R[…]
has not complied with the High Court order. It was not Mrs
R[…] who
sought the substitution of paragraph 2.4 of the
divorce order. This was something done by the High Court
mero
motu
, and one must feel some sympathy
for Mrs R[…] in trying to defend what the High Court had done,
given that she has to date
not received a transfer of any shares.
It is clear from the affidavits filed in the contempt of court
application that Mrs R[…]
is struggling financially,
whilst Mr R[…]’s life has not been materially
affected financially, as a result of
the divorce action. A fair
order of costs in this matter is that each party pays its own costs.
Regarding the costs
order in the High Court, it bears
highlighting again that the High Court order holding Mr R[…]
in contempt was not
competent for the reasons stated above, and that
Mrs R[…] did not prove malice and wilfulness beyond a
reasonable doubt
on Mr R[…]’s part. So, although
the order seems to have favoured Mrs R[…], we know that
the High
Court erred in making such an order. An appropriate
costs order, bearing in mind the inconvenience suffered by Mrs R[…],
is that each party pays its own costs in the High Court as well.
[74]
Paragraphs 1 and 2 of the High Court’s
order in the contempt application were orders dismissing Mr R[…]’s
application
to condone the late lodging of his application for leave
to appeal and dismissing his application for leave to appeal.
These
orders must stand. The remaining orders will be set aside
to give effect to the terms of this judgment.
[75]
I make the following order:
1. The
appeal is upheld.
2. Paragraphs
3 to 6 of the order of the High Court of South Africa, Gauteng
Division,
Pretoria are set aside and substituted with the following:
“
3.1. The
application to hold the respondent in contempt of the order dated 23
February 2018 is dismissed.
3.2. Each
party is ordered to pay its own costs.”
3. Each
party is ordered to pay its own costs in the
Supreme Court of Appeal and this Court
For
the Applicant:
A
R G Mundell SC, H F Geyer and K Magagula
instructed
by Grohovaz Attorneys Incorporated
For
the Respondent:
F
W Botes SC and A M Raymond
instructed
by Macintosh Crossand and Farquharson
[1]
33 of 1985.
[2]
CaseLines
is a digital/electronic evidence management application platform
utilised in the Gauteng Division of the High Court,
Pretoria and
Johannesburg as a case management and litigation system mechanism.
[3]
10 of 2013.
[4]
TM obo
MM v Member of the Executive Council for Health and Social
Development, Gauteng
[2022] ZACC 18
at paras 44-7;
General
Council of the Bar of South Africa v Jiba
[2019]
ZACC 23
;
2019 (8) BCLR 919
(CC) at paras 38-9; and
Gcaba
v Minister for Safety and Security
[2009]
ZACC 26
;
2010 (1) SA 238
(CC);
2010 BCLR 35
(CC) at para 75.
[5]
Tuta v
The State
[2022]
ZACC 19.
[6]
Id at para 53.
[7]
Coetzee
v Government of the Republic of South Africa, Matiso v Commanding
Officer Port Elizabeth Prison
[1995]
ZACC 7
;
1995 (4) SA 631
(CC);
1995 (10) BCLR 1382
(CC) at para 13.
[8]
Compensation
Solutions (Pty) Ltd v The Compensation Commissioner
[2016]
ZASCA 59
;
(2016)
37 ILJ 1625 (SCA)
at
para 13. See also
Jayiya
v Member of the Executive Council for Welfare, Eastern Cape
[2003]
ZASCA 38
;
2004
(2) SA 611
(SCA)
at
para 15.
[9]
Bannatyne
v Bannatyne
[2002]
ZACC 31
;
2003 (2) SA 363
(CC);
2003 (2) BCLR 111
(CC) at para 18,
where Mokgoro J said “[a]lthough money judgments cannot
ordinarily be enforced by contempt proceedings,
it is well
established that maintenance orders are in the special category in
which such relief is competent”.
[10]
Matjhabeng
Local Municipality v Eskom Holdings Limited; Mkhonto v Compensation
Solutions (Pty) Limited
[2017] ZACC 35
;
2018 (1) SA 1
(CC);
2017 (11) BCLR 1408
(CC) at para
73. See also Van Loggerenberg
Erasmus
Superior Court Practice
2 ed (Juta & Co Ltd, Cape Town 2015) Vol 1 at section 41 A2
169-70.
[11]
32 of 1944.
[12]
Coetzee
above
n 7 at para 10.
[13]
Id at para 13.
[14]
See
Hankin
v Hankin
1931
WLD 265
;
Taylor
v Taylor
1928 WLD 215
; and
Swanepoel
v Bovey
1926 TPD 457.
[15]
See
Coetzee
above
n 7 and
Jayiya
above
n 8.
[16]
Tshivhase
Royal Council v Tshivase, Tshivase v Tshivase
[1992]
ZASCA 185; 1992 (4) SA 852 (A).
[17]
Id at 863.
[18]
Zuma v
Secretary of the Judicial Commission of Inquiry into Allegations of
State Capture, Corruption and Fraud in the Public Sector
Including
Organs of State
[2021] ZACC 28; 2021 (5) SA 327; 2021 (11) BCLR 1263 (CC).
[19]
Id at para 98.
[20]
Colyn v
Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape)
[2003] ZASCA 36; 2003 (6) SA 1 (SCA).
[21]
Id at para 4.
[22]
His economic interest in Engco Eléctrica is 44.775%, in
Fleetco Limitada is 36%, in Engco Investments Limitada is 36%,
and
in Pierlite Mozambique Limitada is 4.5%, which in turn holds 80% and
in the South African company.
[23]
See
Thompson
v South African Broadcasting Corporation
[2001] ZASCA 7
;
2001 (3) SA 746
(SCA) at 748H 749C and
S
v Wells
[1989] ZASCA 154
;
1990 (1) SA 816
(A) at 820E and 820B–C.
[24]
Molaudzi
v S
[2015]
ZACC 20
;
2015 (2) SACR 341
(CC);
2015 (8) BCLR 904
(CC).
[25]
Id at
para
14.
[26]
Id at para 16.
sino noindex
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