Case Law[2023] ZAGPJHC 313South Africa
H.J.K v Swartz and Others (2015/08456) [2023] ZAGPJHC 313; [2023] 2 All SA 764 (GJ); 2023 (6) SA 500 (GJ) (11 April 2023)
Headnotes
SUMMARY
Judgment
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# South Africa: South Gauteng High Court, Johannesburg
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## H.J.K v Swartz and Others (2015/08456) [2023] ZAGPJHC 313; [2023] 2 All SA 764 (GJ); 2023 (6) SA 500 (GJ) (11 April 2023)
H.J.K v Swartz and Others (2015/08456) [2023] ZAGPJHC 313; [2023] 2 All SA 764 (GJ); 2023 (6) SA 500 (GJ) (11 April 2023)
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sino date 11 April 2023
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
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SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
Case
No:
2015/08456
Date 11 April 2023
In the matter between:
K[…]
H[…] J[…]
Applicant
and
SWARTZ
MERVYN ISRAEL
First Respondent
K[…]
S[…] W[…]
Second Respondent
LANG
KEITH HENRY
Third Respondent
####
Coram:
FISHER J
Heard
:
08 February 2023
Delivered
:
11 April 2023
SUMMARY
Subsections
7(7) and (8) of Divorce Act
- Powers of
receiver/liquidator in relation to pension funds in divorce.
contempt
of court
- Without specific authorising
powers as to pension fund benefits in order receiver /liquidator
having no locus standi to liquidate
pension fund assets on behalf of
the joint estate.
Held
- The receiver/liquidator having no general power
to liquidate pension fund benefit of member spouse.
Held
- order of court against liquidator /receiver
implicating liquidation of pension fund interest impossible to comply
with. As such,
no contempt of court proven.
ORDER
1.
The application is dismissed with costs in favour of the first and
third respondents which costs are to be
borne by the joint estate on
the scale as between attorney and client.
JUDGMENT
Fisher J
Introduction:
[1]
This
application is, at its heart, an application by one divorced
spouse,
the applicant against the other spouse, the second respondent (Mr
K[...]) for payment of monies which she contends are
due to her in
terms of the divorce.
[2]
There is
a dispute about payment of this amount between the spouses.
This, in
itself, is not unusual. What is unusual is the manner in which the
applicant has set about seeking payment of the amount
which she
contends is due. This is where the first respondent, Mr Swartz and
his attorney, Mr Keith Lang who is joined as third
respondent enter
the picture.
[3]
Mr
Swartz is the court appointed receiver and liquidator of the
joint
estate. The applicant has looked to Mr Swartz for payment which she
alleges she has been due to her since the final L&D
account was
produced by him on 11 October 2017. She does so now on pain of
seeking an order declaring him to be in contempt of
court and seeking
related relief against him and his attorney.
Relief
sought
[4]
The
applicant seeks the imposition of a penalty for this alleged
contempt
by way of a fine of R500 000.00 and that Mr Swartz be committed to
prison for 90 days if he continues in such alleged
contempt.
[5]
Mr
Swartz has been subjected to constant attacks by the applicant
as to
his carrying out of his functions as receiver. It is here sought that
he be removed as receiver and that he forfeits the
fees earned by him
and the disbursements made by him in carrying out his duties as
receiver.
[6]
He has
already been paid these amounts by Mr K[…] on behalf
of the
joint estate.
[7]
Mr Lang,
who merely holds these amounts in trust for Mr Swartz
as his
attorney, is sought also to be subject to an order that he pays ‘all
monies belonging to the joint estate that were
paid unlawfully into
his trust account by Mr Swartz into the trust account of Ms
Richardson [the applicant’s attorney]’.
[8]
He is
also sought to be subject to an order that he provide a statement
of
account to the applicant in respect of the trust monies.
[9]
To add
further injury to the insults against Mr Swartz, the applicant
also
seeks an order that she be allowed to set off these fees held against
monies payable to her by the second respondent.
[10]
The effect of the order on
Mr Swartz would be a personal loss of in excess of R1
million and
loss of liberty.
[11]
There was furthermore an
order sought relating to the providing of security for
costs for R100
000 in respect of security for the Full Bench appeal in which Mr
Swartz was cited in his personal capacity. This
appeal is dealt with
later. The applicant sought payment of this amount in that she
alleged that Messrs Lang and Swartz had behaved
improperly in that
the security was provided by Mr Lang on the basis of the funds held
in trust which were those of the joint estate
and not those held for
Mr Swartz. This relief is patently without merit and has
fortunately now been withdrawn.
[12]
Punitive costs are sought
against Messrs Swartz and Lang.
[13]
Messrs Swartz and Lang
oppose the application. They have no choice considering the
attacks
made on them personally and professionally and the extensive reach of
the relief.
[14]
Mr Swartz claims
that he is not in contempt because the order as to realization
of
assets and payment are impossible to comply with. Furthermore, he
argues that it is impossible for him to assuage the alleged
contempt
of this court.
[15]
Mr K[…] has come
late to this case and was absent from the proceedings which
resulted
in the order which is the subject of the alleged contempt. He was
absent also from the appeal proceedings relating to
that order before
the Full Bench, save that he deigned to provide a confirmatory
affidavit for Mr Swartz.
[16]
Essentially, Mr K[…]
has left it up to Mr Swartz to fight this battle –
which is, in
reality, not that of Mr Swartz but that of the divorced spouses.
[17]
For the first
time since the divorce, an order for payment is also sought
against
Mr K[…] personally.
[18]
Mr K[…] abides the
relief against Messrs Swartz and Lang, agrees that Mr
Swartz should
be removed (although not on the basis of misconduct) and opposes the
claim for payment by him.
[19]
I turn to deal with the material facts.
Material
facts
:
[20]
The applicant and Mr K[…] were married
to each other in community of property. They divorced on 26 February
2016. The
agreed terms of the divorce included that Mr Swartz
would act as receiver and liquidator of the joint estate with agreed
powers
which were set out in annexure A to the order of divorce.
[21]
Mr Swartz was given
the power under the divorce order to sell and transfer the assets of
the joint estate and recover the proceeds thereof so as to
split them
between the spouses.
[22]
It is central to this case that Mr
Swartz does not have the power to litigate on behalf of the joint
estate, save ‘to obtain
delivery of assets alleged to be vested
in the joint estate’, to collect debts due to the joint estate
and to defend proceedings
brought against the joint estate.
[23]
Pursuant to the divorce
order, Mr Swartz set about the task of liquidating the joint
estate.
[24]
There were
pension fund interests held in the name of Mr K[…] which, in
terms of section 7(8)of the Divorce Act
[1]
read with section 37D(1)(d) of the Pension Funds Act
[2]
,were
deemed to be part of Mr Kader’s assets and thus the joint
estate.
[25]
In terms of
section 7(8) an order could have been granted by the court handing
down the divorce order to the effect that any part
of the pension
interest which was due or assigned to the other party in the divorce
action shall be paid by the fund to the other
party when pension
benefits accrue in respect of that member party. This relief was not
sought as at the date of divorce. It could,
however, be sought
subsequently.
[3]
[26]
After first producing an
initial report including a Liquidation and Distribution
(L&D)
account, Mr Swartz received certain representations from the
applicant as to the report. After having taken these representations
into account he produced his final report – which has been
termed a ‘supplementary report’ but which all accept
is
the final report pertaining to the liquidation and distribution of
the joint estate. The final report incorporated the final
L&D
account relating to the estate.
[27]
It is important that
this is the report which was accepted by the court a
quo and the full
court as the basis for the order in issue.
[28]
The following were
pertinent aspects of the final L&D account produced by Mr
Swartz
on 11October 2017:
·
The report registered a net surplus R 14 167 677,18;
·
Valuation fees, the fees of Mr Swartz and other sundry disbursement
including the conveyancer’s
fees pertaining to cancellation of
the bond over the erstwhile matrimonial property which all totalled R
514 016.51 were deducted
from the net surplus leaving a net
amount for distribution of R13 653 660.67.
·
This net amount was allocated equally between the spouses.
·
On this allocation the applicant was due R2 421 081.05 and
Mr K[…] was due
R 1 216 945.44.
·
The distribution of the amount was determined on the basis that the
applicant would receive
a cash payment of R 1 432 316.75
and a transfer of an amount of R988 764.30
to a pension fund
to be nominated by her
.
[29]
By everyone’s
account, the parties accepted the report in relation to the
calculations of the respective amounts owing to the parties. In fact,
the report reveals that the payment method was as per the
applicant’s
request. The movable and immovable assets had, by that stage, been
liquidated essentially on the basis that the
applicant purchased the
immovable property which was the erstwhile matrimonial home at an
agreed price and the defendant purchased
certain movables.
[30]
The divorce was
acrimonious and the process of liquidation and distribution
was
subject to constant dispute – primarily by the applicant.
[31]
It is common cause and
emerges from its express terms that the final L&D account
and the
accompanying report were drawn on the basis that the R988 764
was to be paid to a pension fund nominated by the applicant
from Mr
K[…]’s
iSelect
Preservation pension fund held
with Investec Bank.
[32]
The fact that the L&D
account was drawn and the amounts due calculated on the
basis of this
premise is central to this case and the processes which have come
before it.
[33]
On 11 October 2017 the
final L&D report was published and initially accepted
by the
applicant. The applicant, subsequent to this acceptance, did a
volte-face.
[34]
Focussing on a part
of the report which indicated a preference of Mr K[…]
not to
liquidate his pension fund benefits but to source the money to pay
her elsewhere, the applicant stated, through her attorney,
that she
‘had now decided that she wanted the outstanding amount to be
paid to her bank account and not to a pension fund’.
[35]
I can only assume that the
applicant had decided that if Mr K[…] had a source
of liquid
cash from which he could pay her, this should benefit her.
[36]
I must emphasize
that there is no evidence of any remaining liquid funds belonging
to
the joint estate or Mr K[…]. He has been resolute that he
requires the facility to pay the monies tax free and that he
will not
agree to an alternative payment method unless the applicant
personally bears the costs of such alternative payment.
[37]
The transfer of
monies from one pension fund to another would not attract
income
taxes, however, if the pension funds or part thereof had to be
withdrawn by Mr K[…] this would attract an income
tax payable
by the joint estate.
[38]
This was pertinently
addressed by Mr K[…]’s attorney, Mr Yosef Shishler.
He
sent an email explaining that the L&D account had been prepared
on the express agreement that the payment would be made
to a pension
fund. This state of affairs, he said, was designed to allow Mr K[…]
the facility to transfer the money to the
applicant tax free as he
could make this payment from his pension fund to that of the
applicant should he wish to do this. He emphasized
that the proposed
change in payment method would mean that this facility was denied Mr
K[…]. Mr K[…] was thus not
prepared to allow for this
amendment to the payment method save on the basis that the applicant
bear the tax which would be occasioned
by a withdrawal of the pension
fund interest.
[39]
Thus, whilst the
final L&D account had been drawn on the agreed position
that the
applicant would receive the payment in issue into a pension fund of
her nomination, there was now an impasse between the
spouses.
Mr K[…]’s position was that if he had to make the
payment in cash this would require a reformulation
of the L&D.
[40]
Mr Swartz duly wrote to
the applicant’s attorney Ms Sian Richardson explaining
patiently that there were implications to the applicant’s
change of mind. He informed Ms Richardson in no uncertain terms,
that
if the monies were not distributed as per the initially accepted L&D
account this would have a tax implication which would
mean that the
final L&D would have to be scrapped.
[41]
By 15 November 2017 and
almost a month after the final L&D account had been
accepted
there was still vacillation on the part of the applicant as to how
the monies due to her would be received.
[42]
At this stage, Mr Swartz
was, despite his best endeavours, in the middle of the
storm which
had blown up as to the payment due to the applicant and the fact that
there was no liquidity in the deceased estate.
[43]
There were some
minor skirmishes as to the delivery of movables to Mr K[…]
and
the taking into account of certain funds generated from these
movables and other minor adjustments which had to be brought
to bear
on the L&D. This is relevant only in that it served to reduce the
final disputed amount to be paid to the applicant
from
R988 764.30 to R940 498.31.
[44]
On 15 November 2017, Ms
Richardson wrote an email to Mr Swartz advising him that
it was his
‘duty and responsibility’ to obtain a court order so as
to allow for the payment of monies from Mr Kader’s
pension fund
to that of the applicant.
[45]
Ms Richardson’s tone
at this point is abrasive. She states that she had previously
offered
to assist with obtaining the necessary court order but that because
of the lack of co-operation and dilatory conduct which
she had
experienced from Mr Shishler acting on behalf of Mr K[…] she
was no longer prepared to assist.
[46]
She informed Mr K[…]
as follows: ‘Obtaining the court order is your
responsibility,
Mr Swartz…,’. She followed up with a threat that, if he
did not take steps to obtain a court order,
she had instructions to
apply to court for relief.
[47]
On 21 November 2017, Mr
Swartz wrote to Ms Richardson in an imploring tone. He said
that he
was not abdicating his responsibilities but that he sought a workable
solution which would allow for the cost-effective
division of the
estate.
[48]
It is clear from the correspondence between Ms Richardson and Messrs
Swartz and
Sishler that it was understood by all that, as at November
2017, the last assets capable of realisation had been dealt with. The
only outstanding amount was the amount of R940 498.31.
[49]
The cash amount payable to
the applicant under the final L&D account had been
paid by Mr
K[…] acting on behalf of the joint estate. This amount was
received without demur. These funds came from a liquidated
pension
fund asset in the name of Mr K[…]. The liquidation of this
pension fund asset also served to pay the amount due
in respect of
the fees and disbursements of Mr Swartz in a total amount of
R540 831.
[50]
The applicant did not
dispute that these fees and disbursements were a first charge
on the
joint estate. She did however raise a dispute as to the manner of the
calculation of the fees. By this stage, the applicant’s
dissatisfaction at not obtaining the payment that she sought, was
mainly directed at Mr Swartz. Instead of attempting to find a
rational way through the impasse, she decided that she would litigate
against Mr Swartz both personally and in his capacity as
receiver.
[51]
On 27
may 2019 the applicant applied to court for a directive on the basis
that she disputed the mechanism employed to calculate
the Mr Swartz’
fees – being a percentage charge in terms of the Insolvency
Act.
[4]
She furthermore asked
for an order that he ‘realise’ assets of the joint estate
from which to pay her R940 498.31
in cash.
[52]
This application came
before Foulkes-Jones AJ who handed down a judgment on 12 December
2019. In terms of this judgment, it was ordered that:
·
Mr Swartz was not entitled to calculate his fees in accordance with
the
insolvency Act but that he was entitled to his reasonable fees
for work performed;
·
Mr Swartz render an account of this work done within 30 days
such
account to be supported by vouchers;
·
The fees as calculated were to be a first charge against the joint
estate;
·
Mr Swartz was obliged, within one month, to realize so many assets of
the
joint estate necessary to effect payment of the amount calculated
as being due in terms of the final report, which at that stage
was
R940 498.24.
·
Such payment was to be adjusted on the basis that it reflected the
applicant’s
50% share of payment of Mr Swartz’s fees as
were then unpaid.
[53]
Mr Swartz was, at
this stage, called on to expend his personal funds on opposing
litigation between the ex-spouses. He was being placed by them in an
intractable position. Although Mr Swartz filed an affidavit,
neither
Mr K[…] nor Mr Swartz appeared at the hearing and the matter
was determined without the court having the benefit
of their
submissions. Mr Swartz understandably sought to keep his costs to a
minimum.
[54]
In fact, the
applicant had misled the court. She did not disclose the
following incontrovertible facts:
·
The only asset in the joint estate was Mr K[…]’s
remaining
pension interest in the
iSelect
pension fund;
·
There were formalities involved in the liquidation of this pension
fund
and Mr Swartz had expressed that he could not obtain the
liquidation of these funds without the co-operation of Mr K[…]
as member of the pension fund;
·
The amount claimed had been determined on the basis of a payment
model
that attracted no tax;
·
The tax implication of the change of payment model was not
immaterial
and was likely to exceeded R700 000.
[55]
It is not clear what the applicant expected Mr Swartz to do
given that he
had, no money to fund litigation, no assets which could
be realised by way of sale and no co-operation from the member of the
pension
fund which was the sole asset. And yet she forged
ahead.
[56]
Mr Swartz was thus faced
with an order which gave him much difficulty.
[57]
He thus sought leave to
appeal the judgment and order on the basis, inter alia,
that the
further information relating to the tax implication of payment was
required to be taken into account. Mr K[…] did
not oppose the
application but he did not enter the fray personally either. The
application was heard on 23 July 2020 and judgment
was handed down
against Mr Swartz on 19 October 2020.
[58]
Mr Swartz then sought
leave to appeal from the Supreme Court of Appeal and leave
was
granted to the Full Court. It seems likely that this leave was
granted due to the anomaly which exists between the order for
payment
and the acceptance of the terms of the final L&D report by the
Court.
[59]
The Full Court, whilst
addressing the fact that there was a need for the tax implications
and the Divorce Act to be considered, made the point that there would
have to be the necessary engagement with these principles
in that
section 7(8) of the Divorce Act had not been invoked. The appeal was
however dismissed.
[60]
Thus, the order stands and
it has led to this application.
Discussion
[61]
The relief sought as set
out above falls into the following four categories:
·
First, the contempt relief against Mr Swartz;
·
Second the removal and forfeiture relief against Mr Swartz;
·
Second, the reporting and transfer of trust funds relief against Mr
Lang;
and
·
Third, the payment relief against Mr K[…].
[62]
I will deal with each
category in turn.
The
contempt relief
[63]
the
applicant has to prove the requisites of contempt (the order, service
or notice, non-compliance and wilfulness and
mala
fides
)
beyond a reasonable doubt. The respondent then has an
evidentiary burden in relation to wilfulness and
mala
fides
.
[5]
[64]
It stands to reason
that Mr Swartz cannot be wilfully in contempt of an order
that is
impossible of compliance. I thus move to consider whether it is
indeed impossible to comply with the order of Foulkes-Jones
AJ as Mr
Swartz alleges.
[65]
In terms of the order Mr
Swartz was obliged, within one month, to realize so many
assets of
the joint estate to effect payment of the amount calculated as being
due in terms of the final report, which at that
stage was
R940 498.24.
[66]
It is not
seriously disputed that there are no assets in the estate capable of
being realised by way of sale. In any event, according
to
Plascon
– Evans
[6]
,
Mr Swartz’ version in this regard must be accepted.
[67]
The applicant argues that
the order, properly construed, enjoins Mr Swartz to take
steps to
achieve liquidity from the pension fund interest of Mr K[…] so
that she can be paid the cash amount due to her
under the order from
this pension withdrawal.
[68]
It seems to me that there
are two bases on which such an order is not competent.
The first is
that Mr swartz’ powers as receiver under the divorce order do
not allow him to bring proceedings on behalf of
either of the
divorced spouses or the estate save for the purposes of vindicating
assets. The second is that Mr Swartz does not
have the locus standi
to obtain relief under sections 7(7) and 7(8) of the Divorce Act.
[69]
I move to deal with each
of these bars to realising the pension funds.
The
powers of Mr Swartz as receiver
[70]
The nature and scope
of Mr Swartz’ powers of receipt and liquidation
in respect of
corporeal and incorporeal assets of the joint estate poses no
problem. He may realise these assets by selling them
to the highest
bidder. But how are pension fund interests to be realised in
the liquidation?
[71]
Pension fund benefits are
a different matter. Such benefits are statutorily regulated.
They may
not be attached reduced or transferred. In terms of the section 37A
of the Pension Fund Act read with section 7(7) of
the Divorce Act the
pension benefit of the spouse is not an actual asset but is ‘deemed’
to be a part of a party’s
assets.
[72]
Thus, to my mind a pension
benefit it is not, in fact, an asset and cannot be dealt
with under
Mr Swartz’ general powers of receivership and liquidation as
set out in the divorce order.
[73]
In a divorce, the only
manner in which one spouse can become a beneficiary under
the pension
fund of the other spouse is by means of the machinery in section 7(7)
and (8) of the Divorce Act.
[74]
A theme which has run
through the demands and threats made against Mr Swartz is
that it is
his duty to approach the court for section 7(7) and (8) relief.
[75]
As I have said, to my mind
such an application is not covered by the express terms
of the order
appointing Mr Swartz. But even if I am wrong on this
construction of his powers under the order, the question
arises
whether, as a matter of course under the legislative scheme created
by sub sections 7(7) and (8) a receiver and liquidator
in a divorce
would have the locus standi to seek on his own behalf relief under
the Divorce Act. I turn to deal with this issue
Locus
standi in respect of pension funds
[76]
Neither Foulkes-Jones AJ
nor the Full Court was addressed on the locus standi and
powers of Mr
Swartz. In fact, it seems to me that these matters were studiously
avoided.
[77]
The applicant’s
argument in this application has proceeded on the assumption
that Mr
Swartz has the power arising out of his office as receiver and
liquidator to approach a court on behalf of one or the other
of the
parties for relief relating to Mr K[…]’s pension fund.
[78]
However,
pension benefits are not reducible, transferable or executable save
to the extent permitted by statute.
[7]
[79]
Sections 7(7) and 7(8) of
the Divorce Act allow for spouses’ pension funds
interests to
be taken into account in determining patrimonial benefits This
is achieved by way of a provision which notionally
treats the benefit
as an asset of the joint estate for the purposes of allowing the
non-member party a right to receive part of
the benefit due to the
member when it is paid out in the normal course of the policy.
[80]
Section 7(8) provides that court may make an order to the effect that
‘any part of the pension interest
of that member which, by virtue of subsection (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’.
[81]
In
my view, a third party such as a receiver and liquidator would not
have the locus standi to bring an application under section
7 unless
this was specifically catered for in the empowering order on the
basis that he was given the power to act on behalf of
the spouses or
either of them. The legislation does not afford such him standing in
his own right.
[82]
However, and in any event, the
applicant does not seek an order in terms of section 7(8). She seeks
an order that the amount due
to her in terms of the order of
Foulkes-Jones AJ be paid to her on the basis that such amount is
withdrawn or liquidated from the
pension fund.
[83]
On any construction of the
Divorce Act, the Pension Fund Act or the order appointing
Mr Swartz,
he does not have the power to force a member of a pension fund to
withdraw funds from his pension fund or to force the
pension fund to
release such funds against the wishes of its member.
[84]
There is no case made out
for any basis on which this pension fund asset can be
realised to pay
the applicant the cash that she demands.
[85]
With the best will
in the world, Mr Swartz is simply unable to comply with
the order of
Foulkes-Jones AJ.
Removal
and forfeiture relief
[86]
On Mr Swartz’
version, which I must accept, the final L&D account was
drawn on
the basis of an agreement between the ex-spouses that there would not
be a cash payment but a benefit transfer. In fact,
in terms of Mr
Swartz’ final report this was at the request of the applicant.
[87]
Quiet why the applicant
has believed that she is entitled to renege on this agreement
is
difficult to understand. It seems to me that the only deficiency in
Mr Swartz service in the divorce has been that he has indulged
the
applicant’s whims and vacillations when he should not have.
[88]
To my mind it is clear
that the R 940 498 should have been paid into a pension
fund
nominated by the applicant. She agreed to this method of payment and
Mr Kader has insisted that if this method is not adhered
to, he will
resist the distribution under the L&D.
[89]
The alternative is a
stalemate. Mr Swartz has no assets to realize and thus cannot
be held
to be in contempt of the order of Foulkes- Jones AJ.
[90]
In my view, Mr Swartz has
complied with his duties as to the liquidation and distribution
of
the estate. His final L&D account provides for the only possible
mechanism of distribution in all the circumstances. And
it was agreed
to in this context.
[91]
Thus, Mr Swartz has performed his function as
best he could under trying circumstances and is
functus
officio
. There is no basis on which
to remove him.
[92]
There is certainly no basis to remove him for
misconduct.
[93]
As to the forfeiture claimed, his fees
and disbursements were paid by Mr K[…] on behalf of the joint
estate and he has accounted
therefor on the basis ordered by
Foulkes-Jones AJ. It seems that the applicant seeks to continue her
opposition to these costs
but she does not here make out any basis
for such opposition. There is certainly no case whatsoever made out
for any forfeiture
of these fees. Indeed, such relief would be
fundamentally unconstitutional.
[94]
Mr K[…] does not dispute
that he paid the fees on behalf of the joint estate and that they are
reasonable.
[95]
The computation of the fees at a
reasonable hourly rate has yielded an amount which exceeds of the
calculation made on the
basis of the percentage charge under the
Insolvency Act.
[96]
The order makes provision for payment of
the fees of Mr Swartz on the basis of the payment already made to him
by Mr K[…]
on behalf of the joint estate. It provides for the
applicant and Mr K[…] to augment the amount paid on
behalf of the
joint estate on a 50/50 basis should this be necessary.
The
reporting and trust monies relief
[97]
Mr Lang as Mr Swartz’ attorney
holds funds which Mr Swartz has deposited into his trust account.
These are Mr Swartz’
fees and disbursements. Whilst there has
been a dispute raised by the applicant as to the computation of fees
the computation under
the order has yielded an amount due in excess
of that paid by Mr K[…] on behalf of the joint estate. There
is no basis for
Mr Lang to release these funds to the applicant’s
attorney.
[98]
A
duty to render an account may arise from a fiduciary relationship, a
contractual relationship or a statutory duty.
[8]
[99]
Mr Lang does not stand in a
fiduciary or contractual relationship to the applicant
and there is no statutory implication.
In fact, Mr Lang’s
duties lie with his client.
[100]
Thus,
no case is made out for an account to be made by Mr Lang.
The
payment by Mr K[…] to the applicant
[101]
Mr K[…]’s failure to join
actively and sensibly in the misguided litigation which has
been
brought by the applicant has allowed this impasse to develop to this
intractable point.
[102]
This notwithstanding and because of the
central difficulty pertaining to the pension fund distribution,
the
applicant has not made out a case for the judgment which she seeks
against Mr K[…].
Costs
[103]
The supine approach of Mr K[…] in
these proceedings is regrettable. It seems that he has attempted
to
gain advantage from the current stalemate. He has latterly made his
defence clear in these proceedings.
[104]
The order of Foulkes-Jones AJ proceeded from
the false premise that there were assets that were capable
of being
liquidated to meet the applicant’s demands. The applicant made
the case and Mr K[…] did not take the requisite
responsibility
for gainsaying it that he should have. Instead, Mr Swartz was called
on to play a role that was beyond the description
of his office and
he has had to expend personal resources to this end.
[105]
It seems to me that Messrs Swartz and Lang
should not be left out of pocket. They have both been
unjustifiably
criticized and have been forced to oppose proceedings personally
under circumstances where they have merely been
doing their work.
Order
I
thus order as follows:
The application is
dismissed with costs in favour of the first and third respondents
which costs are to borne by the joint estate
on the scale as between
attorney and client.
_______________________
D FISHER
JUDGE
OF THE HIGH COURT
APPEARANCES:
For
the Applicant:
Adv V Davel
Instructed
by
:
Sian Richardson Attorneys
For
the 1
st
and 3
rd
Respondent:
Adv
CJ Badenhorst SC
Instructed
by
:
Keith H Lang Attorneys
For
the 2
nd
Respondent:
Adv T Ossin
Instructed
by:
Bosman and Mungul Inc.
[1]
Act 70 of 1979
[2]
Act 24 of 1956
[3]
GN
v JN
2017 (1) SA 342
(SCA)
at
paragraphs [25] and [28].
[4]
Act 24 0f 1936.
[5]
Fakie
NO v CCII Systems (Pty) Ltd
[2006] ZASCA 52
;
2006
(4) SA 326
(SCA) Paragraphs [42] and [63] - [65]
[6]
Plascon
-Evans Paints Ltd v Van Riebeeck Paints (PTY) LTD
1984 (3) SA 623 (A)
[7]
Section 37A(1) of the Pension Fund Act.
[8]
ABSA
Bank Bpk v Van Rensburg
2002 (3) SA701 (SCA)
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