KSL v AL
KSL v AL
KSL v AL
Reportable
Case no: 356/2023
KSL APPELLANT
and
AL RESPONDENT
Neutral citation: KSL v AL (Case no 356/2023) [2024] ZASCA 96 (13 June 2024)
On appeal from: Gauteng Division of the High Court, Pretoria (Van der Schyff J,
sitting as court of first instance):
2. The appeal is upheld with costs, such costs limited to the costs of one counsel.
3. Paragraphs 5 and 6 of the order of the high court are set aside and replaced with
the following:
JUDGMENT
Introduction
[1] The issues for determination in this appeal are threefold. First, whether the
respondent succeeded in establishing the requirements of an interim interdict in her
application for an anti-dissipation order. Second, whether the high court applied the
correct legal principles pertaining to the order granted. Third, whether an interim
interdict order is appealable.
The facts
[2] The facts giving rise to this appeal are briefly the following. The appellant,
KSL (the husband) and the respondent, AL (the wife), were married to each other on
3 April 1992 out of community of property with the inclusion of the accrual system as
envisaged in Chapter 1 of the Matrimonial Property Act 88 of 1984. They have two
major children. Their marriage did not survive and, in May 2009, the appellant
instituted divorce proceedings against the respondent. The parties attempted to
reconcile but were unsuccessful. Ultimately, the marriage was dissolved on 14
March 2019. The divorce court granted the decree of divorce and the issue of their
proprietary rights (the accrual) was postponed to be determined at a later stage.
[3] Whilst the divorce was still pending, on 19 July 2018 the appellant founded a
trust named the L[…] Children Educational Trust and donated an amount of
R1 800 000 to the trust with the objective of providing financial support for the
parties’ children. According to the respondent, she only learnt about this in
December 2018. During October 2018, the appellant caused an amount of
R5 114 740.75 to be invested in a living annuity held with Investec Assets
Management Services (Pty) Ltd.
[5] During May 2021, two years after the parties’ divorce, the appellant sold his
immovable property, [...] C[...] Close, Northwold, Extension 11, Johannesburg (the
property). The respondent became aware of the sale in June 2021. As a result, she
instituted an anti-dissipation application in the Gauteng Division of the High Court,
Pretoria (the high court) on 1 July 2021. In the application, she sought an order
directing the appellant’s attorneys as conveyancers mandated to give effect to the
transfer of the property:
‘1. . . .to retain the total net proceeds of the sale of the Immovable Property being an
amount equivalent to the purchase consideration less the cost of bond cancellation,
estate agents commission, taxes and necessary disbursements and imposts (“the
Net Proceeds”) in an interest-bearing trust account as envisaged by section 86(3) of
the Legal Practice Act 2014, (No. 28 of 2014) pending the determination of the
[respondent’s] accrual claim in the divorce action.
2[I]n the event that the Net Proceeds of the sale of Immovable Property have been
paid to the [appellant], or his nominee, at the time of the hearing of this application:-
2.1. the [appellant’s attorneys] be directed to furnish the [respondent], care of her
attorneys, within 5 (five) days, with a statement of account reflecting the purchase
consideration achieved for the Immovable Property and detailing the disbursement of
expenses including but not restricted to bond cancellation, estate agents
commission, taxes and necessary disbursements and imposts;
2.2. the [appellant] be directed to, within 5 (five) days, pay an amount equivalent to
the Net Proceeds to the [appellant’s attorneys] to be retained in an interest-bearing
trust account as envisaged by section 86(3) of the Legal Practice Act 2014, (No. 28
of 2014) pending the determination of the [respondent’s] accrual claim in the divorce
action.’
The high court granted the relief sought. Thereafter the appellant applied for leave to
appeal. The high court dismissed the application. The appeal is with leave of this
Court.
[7] The appellant opposed the application contending that the respondent had not
made out a case for the relief sought. First, that the trust was created for the benefit
of the parties’ children. Second, the funds invested in the annuity (which amounted
to R5 million at the time of the application) had not been dissipated and he retained
his right to the proceeds thereof. Third, the appellant made a calculation in his
opposing affidavit to show that his estate had shown a lesser accrual to that of the
respondent as at the date of divorce. He denied that he sold the property with the
intention of dissipating his estate. He contended that he had debts to pay and had to
sell his property to settle them.
[8] As to whether a prima facie right to the accrual claim had been established, in
granting the anti-dissipation relief, the high court made the following findings:
‘[46] . . . The defendant [respondent] states that she has an accrual claim against the
plaintiff [appellant] because her estate has shown no accrual and the plaintiff’s estate
has shown an accrual. She does not substantiate this submission with any primary
facts, e.g. referring to the assumed values of the two estates. This blank statement
needs, however, to be considered against the context created in the Rule 34 “with-
prejudice” offer made by the plaintiff. . .
[47] The plaintiff’s with-prejudice tender is substantiating a view that the defendant
has succeeded in proving, albeit prima facie, that the accrual of the plaintiff’s estate
exceeds the accrual of her estate.’
[9] The court based this on these two paragraphs appearing in the rule 34 ‘with
prejudice’ offer:
‘In full and final settlement of the accrual claim of the Defendant against the Plaintiff,
the Plaintiff tenders to the Defendant a sum in the amount of R550 000.00 (five
hundred and fifty thousand rand) (‘the accrual tender’)’
‘if the Defendant believes that the accrual tender is lower than what the Defendant is
entitled to in terms of her accrual claim against the Plaintiff, the defendant may refer
the matter to referee for the referee to establish the quantum of the Defendant's
accrual claim against the Plaintiff. . . ’
‘If the defendant succeeds in her counterclaim, and the plaintiff is allowed to sell the
house without the proceeds being kept in trust, it will significantly frustrate the
enforcement of her claim. The plaintiff, who had several assets at his disposal just
before the divorce order was granted, managed his estate in such a way that
although he still benefits, directly or indirectly, from the value of the assets, the
assets are removed from his direct control. The prejudice that will be suffered by the
defendant if she is successful in her counterclaim and the order is not granted,
meets the requirement of a well-grounded apprehension of irreparable harm.’
(Emphasis added.)
The court ultimately found that the balance of convenience favoured the respondent,
and she had no other remedy.
In this Court
[11] The appellant contended that (a) the respondent failed to establish the prima
facie right for the granting of an anti-dissipation order; and (b) the high court applied
the wrong legal principles in granting the relief sought. He also applied for leave to
submit further evidence on appeal and submitted that he would be prejudiced if the
high court’s order was not upset on appeal. The respondent on the other hand,
submitted that the appellant’s conduct prior to the dissolution of the marriage relating
to money donated to the trust and invested into the annuity, reasonably considered,
amounted to the conduct required for the anti-dissipation interim relief.
[13] Section 19(b) of the Superior Courts Act 10 of 2013, empowers this Court to
receive further evidence on appeal. The criteria as to whether evidence should be
admitted are: the need for finality; the undesirability of permitting a litigant who has
been remiss in bringing forth evidence and to produce it late in the day; and the need
to avoid prejudice.1 In Rail Commuters Action Group and Others v Transnet Ltd t/a
Metrorail and Others,2 the Constitutional Court, referring to s 22 of the repealed
Supreme Court Act 59 of 1959 which is similar to s 19(b) of the Superior Courts Act,
cautioned that the power to receive further evidence on appeal should be exercised
‘sparingly’ and that such evidence should only be admitted in ‘exceptional
circumstances’. Furthermore, in O’Shea NO v Van Zyl NO and Others,3 this Court
held that one of the criteria for the late admission of the new evidence is that such
evidence will be practically conclusive and final in its effect on the issue to which it is
directed.
[14] Against this background I proceed to deal with the appellant’s application to
adduce new evidence. There is no merit in the appellant’s application. I discern no
‘exceptional circumstances’ to move this Court to exercise its power, which, it must
be borne in mind, should be exercised sparingly. The appellant’s answering affidavit
was served on 17 August 2021. According to him, the property was transferred to the
new owners on 3 March 2022. His attorneys received the proceeds of the sale on the
Anti-dissipation interdict
[15] An anti-dissipation interdict may be granted where a respondent is believed to
be deliberately arranging his affairs in such a way so as to ensure that by the time
the applicant is in a position to execute judgment, he will be without assets or
sufficient assets on which the applicant expects to execute. Its purpose is to
preserve the asset which is in issue between the parties. The onus is on the
applicant for such an interdict to establish the necessary requirements for the grant
of the interdict.
4 Setlogelo v Setlogelo 1914 AD 221 at 227; Webster v Mitchell 1948 (1) SA 1186 (W) at 1187.
5 Knox D'Arcy Ltd. and Others v Jamieson and Others [1996] ZASCA 58; 1996 (4) SA 348 (SCA);
[1996] 3 All SA 669 (A) at 31.
6 Ibid at 63.
were re-affirmed by this Court recently in Bassani Mining (Pty) Ltd v Sebosat (Pty)
Ltd and Others.7
[17] Importantly, this Court in Knox D’Arcy asked and stated the following:
‘The question which arises . . . is whether an applicant need show a particular state
of mind on the part of the respondent, i e, that he is getting rid of the funds, or is
likely to do so, with the intention of defeating the claims of creditors. Having regard to
the purpose of this type of interdict the answer must be, I consider, yes, except
possibly in exceptional cases. As I have said, the effect of the interdict is to prevent
the respondent from freely dealing with his own property to which the applicant lays
no claim. Justice may require this restriction in cases where the respondent is shown
to be acting mala fide with the intent of preventing execution in respect of the
applicant’s claim. However, there would not normally be any justification to compel a
respondent to regulate his bona fide expenditure so as to retain funds in his
patrimony for the payment of claims (particularly disputed ones) against him. I am
not, of course, at the moment dealing with special situations which might arise, for
instance, by contract or under the law of insolvency.’8 (Emphasis added.)
[18] Against these principles, the first question to determine is whether a prima
facie right to an accrual claim has been established in this case. The high court
found that the respondent did not substantiate the averment in the founding affidavit
that she has an accrual claim against the appellant by putting any evidence. Despite
that finding, the high court found that the appellant’s ‘tender is substantiating a view
that the defendant has succeeded in proving, albeit prima facie, that the accrual of
the plaintiff’s estate exceeds the accrual of her estate’.
[19] This finding cannot be correct because a tender in terms of rule 34 whether
with or without prejudice, is an offer to settle and does not amount to an
acknowledgment of liability.9 Often offers to settle are made to avoid incurring further
costs and to save time. Most importantly, the appellant stated that he made a ‘with
7 Bassani Mining (Pty) Ltd v Sebosat (Pty) Ltd and Others [2021] ZASCA 126 para 1.
8 Knox D'Arcy fn 5 at 64.
9 Visser v Visser [2012] ZAKZDHC 16; 2012 (4) SA 74 (KZN) para 32.
prejudice’ offer in order to have this matter settled and to save costs. The high
court’s finding has the effect of defeating the whole purpose of rule 34.
[20] An assumption cannot be made that a claim has been admitted simply on the
basis of the offer to settle. The appellant, in his answering affidavit, denied that the
accrual in his estate exceeded that of the respondent. He put up detailed
calculations to demonstrate that his accrual was lesser. The respondent did not
attempt to contest this in her replying affidavit. The first hurdle of whether or not
there was a prima facie right of an accrual claim, has not been overcome by the
respondent. On this point alone, the application ought to have been refused.
[21] The second issue is whether there was any evidence of an intention to render
the respondent’s claim hollow. The only averments in this regard related to the
establishment of the trust and the investment in the annuity. Apart from the fact that
dispositions to the trust and the annuity occurred more than two years prior to the
institution of the application, they were simply not proximate to the sale of the
property. Further, the trust was expressly for the children’s financial support. The
money in the annuity remains invested in the appellant’s name and he has the right
to it. It did not disappear. The respondent was offered an opportunity to forensically
examine the appellant’s financial position in the rule 34 offer, but she declined to do
so.
[22] Further, the reason to sell the property is sound. The appellant was 64 years
old when the application was lodged. It is common cause that he was no longer
employed. The averment that he needed to sell the property to settle his debts does
not show intent to get rid of his funds in order to defeat the respondent’s claim and
render it hollow.
[23] Faced with the difficulty of establishing the jurisdictional requirements for the
granting of the relief sought, the respondent sought to rely on the statement in Knox
D’Arcy that there may be exceptional circumstances in which intention to render an
applicant’s claim hollow by secreting assets, is not required to be shown. Counsel for
the respondent submitted that an anti-dissipation relief in matrimonial matters is such
a situation. He further submitted that the Court in Knox D’Arcy left this issue open.
He referred to several high court judgments, which I discuss below, as support for
the view that it is ‘the likely effect’ and not the intention, which is important.
[24] The respondent attempted to distinguish the facts in Knox D’Arcy from the
present facts by contending that Knox D’Arcy dealt with commercial issues and not
matrimonial issues as is in her matter. She argued that in her case, she had a vested
right to claim against the appellant’s estate because of the dissolution of the
marriage, which was premised upon the ante-nuptial contract. She alleged that she
has an accrual claim against the appellant’s estate; that the appellant has
acknowledged that claim by presenting the tender to her; and that according to her,
fell squarely within the exceptional circumstances referred to in Knox D’Arcy.
[25] The respondent did not base her claim on exceptional circumstances in her
founding affidavit. Neither did she allege that the appellant’s conduct was not bona
fide. In her founding affidavit she alleged that the appellant would dissipate his
assets with the objective of frustrating her claim. These are the grounds on which the
high court granted the relief she sought. She made her case in her founding affidavit
and cannot, at this stage, change the basis of her claim. She must stand or fall by
the allegations she made in her founding papers and cannot seek to make out a new
case in argument and more so on appeal.
[26] Even so, to qualify as exceptional, the circumstances must be out of the
ordinary and of an unusual nature, something which is excepted in the sense that the
general rule does not apply to it; something uncommon, rare or different. 10 I am not
persuaded that enough material was submitted for the respondent’s case to
constitute exceptional circumstances, that would justify the application of a lesser
threshold than the one stated in Knox D’Arcy. Something more than the allegation
that the parties’ marriage was out of community of property with accrual system may
be required. This has however not been shown in this case.
The findings above render it unnecessary to consider whether the other elements to
satisfy an interim interdict had been met.
10MV Ais Mamas Seatrans Maritime v Owners, MV Ais Mamas and Another 2002 (6) SA 150 (C) at
156H-I.
Did the high court apply the correct applicable legal principle?
[27] The high court did not deem it necessary to apply the requirements as stated
in Knox D’Arcy. Instead, it preferred the dictum in JLT v CHT and Another11 (JLT)
which held that:
[28] The dictum in JLT does not reflect the correct legal position. This Court has
made it clear in Knox D’Arcy that an applicant must show that the respondent
possessed a particular state of mind in his conduct. JLT has, unfortunately, found
favour with various divisions of the high court. In Gernetsky v Gernetsky13the high
court held that it is not a requirement for the applicant to show a fraudulent intent for
the relief, in a matter where a spouse sought anti-dissipatory relief relevant to an
accrual claim. The court considered whether such relief between spouses was not
an exceptional circumstance referred to in Knox D’Arcy. It however did not make a
finding on this issue. JLT was recently followed and quoted wrongly in SM v JM and
Another (SM)14 as though it appears in Knox-D’Arcy.
[29] As stated above, JLT and the cases that followed it, do not reflect the correct
legal position. Knox D’Arcy, a decision of this Court, settled the matter on the
requirement of intent in anti-dissipation applications. The high courts were bound to
follow the decision of this Court, which is precedent. Following precedent is not
simply a matter of respect for higher authority, ‘[i]t is a manifestation of the rule of law
itself, which in turn is a founding value of our Constitution’.15
[30] For these reasons, I find that the high court erred in granting the relief sought.
The next issue is whether the relief granted, being an interim interdict, is appealable.
11 J.L.T v C.H.T [2021] ZAECELLC 4.
12 Ibid para 7.
13 Gernetzky v Gernetzky and Others [2007] ZAECHC 17 para 9.
14 S.M v J.M and Another [2023] ZAGPJHC 723 at para 39.
15 Ayres and Another v Minister of Justice and Correctional Services and Another [2022] ZACC 12;
2022 (5) BCLR 523 (CC); 2022 (2) SACR 123 (CC) para 16.
Appealability of an interim interdict
[31] The Constitutional Court has held that the interests of justice standard has
subsumed the common law test on appealability of interim orders. In City of
Tshwane Metropolitan Municipality v Afriforum and Another16 it held:
‘The common-law test for appealability has since been denuded of its somewhat
inflexible nature. Unsurprisingly so because the common law is not on par with but
subservient to the supreme law that prescribes the interests of justice as the only
requirement to be met for the grant of leave to appeal. Unlike before, appealability no
longer depends largely on whether the interim order appealed against has final effect
or is dispositive of a substantial portion of the relief claimed in the main application.
All this is now subsumed under the constitutional interests of justice standard. The
over-arching role of interests of justice considerations has relativised the final effect
of the order or the disposition of the substantial portion of what is pending before the
review court, in determining appealability. The principle was set out in OUTA by
Moseneke DCJ in these terms:
“This Court has granted leave to appeal in relation to interim orders before. It has
made it clear that the operative standard is the ‘interests of justice’. To that end, it
must have regard to and weigh carefully all germane circumstances. Whether an
interim order has a final effect or disposes of a substantial portion of the relief sought
in a pending review is a relevant and important consideration. Yet, it is not the only
or always decisive consideration. It is just as important to assess whether the
temporary restraining order has an immediate and substantial effect, including
whether the harm that flows from it is serious, immediate, ongoing and irreparable”.’
[32] This was reaffirmed in United Democratic Movement and Another v Lebashe
Investment Group (Pty) Ltd and Others17 in which the following was stated:
16 City of Tshwane Metropolitan Municipality v Afriforum and Another [2016] ZACC 19; 2016 (9) BCLR
1133 (CC); 2016 (6) SA 279 (CC) para 40.
17 United Democratic Movement and Another v Lebashe Investment Group (Pty) Ltd and Others
[2022] ZACC 34; 2022 (12) BCLR 1521 (CC); 2023 (1) SA 353 (CC) paras 43 & 45.
‘[43] Whether an interim order has final effect or disposes of a substantial portion of
the relief sought in a pending review is merely one consideration. Under the common
law principle as laid down in Zweni, if none of the requirements set out therein were
met, it was the end of the matter. But now the test of appealability is the interests of
justice, and no longer the common law test as set out in Zweni. . . .
[33] The interests of justice to have the high court’s order appealed against, have
been amply demonstrated in this matter. First, the high court was wrong to regard
the tender in terms of rule 34 as substantiation that the respondent had prima facie
demonstrated that she had an accrual claim against the appellant. The onus was on
the respondent to show that her accrual was less than that of the appellant and she
failed to do so. Second, the high court did not apply the correct legal principle as
enunciated in Knox D’Arcy that the respondent has to show that the appellant was
dissipating his assets with the intention of defeating her claim. Third, it was important
for this Court to decide the matter, in view of the high court judgments that seem to
suggest that intention did not need to be shown, in these kinds of cases. To allow the
order of the high court to stand will, in these circumstances, results in an injustice.
Costs
[34] Counsel for the appellant asked for costs including costs consequent upon the
employment of two counsel. Generally, costs of the appeal, including those of the
application for leave to appeal must follow the result. The basic rule is that costs are
in the discretion of the court. In exercising that discretion, this Court, must consider
whether it was reasonable to employ two counsel. In doing so, it must consider the
importance and the complexity of questions of law involved and the number of
authorities referred to in the matter. In my view, the factual and legal issues argued
were not complex so as to warrant the employment of two counsel. Accordingly, the
appellant’s costs should be limited to costs consequent to the employment of one
counsel.
2. The appeal is upheld with costs, such costs limited to the costs of one counsel.
3. Paragraphs 5 and 6 of the order of the high court are set aside and replaced with
the following:
F E MOKGOHLOA
JUDGE OF APPEAL
APPEARANCES