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Last Updated: 11 August 2004
THE SUPREME COURT OF APPEAL OF SOUTH
AFRICA
CASE NO: 584/2002
In the matter between:
MUSHAVHANI WILSON MADZIVHANDILA FIRST APPELLANT
NYAMUNDZHEDZI MADZIVHANDILA SECOND APPELLANT
JOYCE
MULAUDZI THIRD APPELLANT
TSHAMUNWE MASINDI
FOURTH APPELLANT
and
THIAMBIWI EUNICE MADZIVHANDILA FIRST
RESPONDENT
MAELE JACKSON MUSHASHA SECOND
RESPONDENT
CORAM: MTHIYANE JA, JONES and VAN HEERDEN AJJA
HEARD: 17 FEBRUARY
2004
DELIVERED: 24 MARCH 2004
Summary: Effect
of agreement to hold property as nominee - whether agreement in violation of s
23 of the Venda Public Service Act
8 of 1986 – interpretation and
application of s 23 of the Act - issue of illegality raised for the first time
on appeal.
JUDGMENT
MTHIYANE JA:
MTHIYANE JA:
[1] This appeal is
concerned with the question whether certain assets which were held in the name
of the second appellant (the second
defendant) fell into the joint estate of the
first respondent (the plaintiff) and the first appellant (the first defendant),
who
were married in community of property. Upon the dissolution of the marriage
between the plaintiff and the first defendant by a decree
of divorce on 25 March
1998 a division of the joint estate was ordered. The second respondent (the
fifth defendant) who was appointed
to receive and liquidate the assets of the
joint estate was unable to do so because of a dispute which arose between the
plaintiff,
on the one hand and the first defendant and his mother, the second
defendant, on the other, as to whether certain assets registered
in the second
defendant’s name formed part of the joint estate or not. The disputed
assets were the following:
1.1 An immovable property described as Portion 2
of Stand 37 situated in Thohoyandou (the Stand) and
1.2 Permission to occupy
a business site at Tshilamba in the district of Mutale, all buildings on this
site as well as all rights
in the business being conducted
thereon (the
Site).
[2] The plaintiff instituted action in the Thohoyandou High
Court for an order declaring that the Stand and the Site were assets in the
joint estate. In her particulars of claim she alleged that during the
subsistence of the marriage she concluded an agreement with
the first and second
defendants in terms of which the Stand and the Site were acquired by the spouses
for the benefit of the joint
estate. It was alleged further that, in terms of
this agreement, the Stand and the Site were registered in the name of the second
defendant because of impediments connected to the plaintiff and the first
defendant’s employment which prohibited them from
having any interest in
any business venture. (They were both civil servants in the employ of the Venda
Government.) In essence the
plaintiff’s case was that the second
defendant was merely holding the assets as nominee.
[3] In their
pleas, the first and second defendants averred that the latter was the owner of
the Stand and the holder of all the rights
and interest in the Site, and that
the joint estate had no rights in respect of these assets. The agreement
alleged by the plaintiff
was denied.
[4] The trial court found
in favour of the plaintiff and made an order declaring that the Stand and the
Site were assets in the joint estate. As the
Stand had already been sold and
transferred to a third party by the time of trial, the court ordered that the
proceeds of the sale
(R250 000) be paid to the fifth defendant to be dealt with
in terms of the order providing for the division of the joint estate.
As
regards the Site, the fifth defendant was authorized to take possession of the
assets constituting the Site and to deal with
them in accordance with the said
order.
[5] The learned trial judge (Makgoba AJ) refused leave to
appeal. This appeal is with the leave of this Court against his judgment and
order. This Court also granted the third and fourth appellants (the third and
fourth defendants) leave to appeal against a ruling
of the court a quo
that there was to be no order as to costs in respect of the
plaintiff’s unsuccessful claims against them in relation to certain
motor
vehicles. The plaintiff had also claimed these vehicles as assets in the joint
estate. The reasons for denying the third and
fourth defendants their costs are
not apparent from the record. Their appeal has, however, now fallen away because
the plaintiff
has (very wisely it must be said) abandoned the judgment and order
in so far as it relates to the third and fourth defendants and
tendered costs.
The abandonment and tender were made in the plaintiff’s papers in
opposition to the petition for leave to
appeal to this Court.
[6] At
the commencement of the appeal counsel for the defendants moved for the
amendment of the Notice of Appeal in order to introduce
the invalidity of the
agreement relied on by the plaintiff as a further ground of appeal. In argument
before us counsel contended
that the alleged agreement (if it existed) was
illegal in that it fell foul of the provisions of (inter alia) s 23 of the Venda
Public
Service Act[1], and that
enforcement of this agreement would be against public policy as this would
defeat the purpose of the relevant statutory
provisions. The alleged violation
was founded on the contention that as public servants the plaintiff and the
defendant were precluded
from ‘having an interest in any business
venture’.
[7] The amendment was opposed on behalf of the
plaintiff on the basis that the illegality and/or unenforceability of the
agreement had
not been raised in the court a quo. Even in the notice of
amendment the point was taken only in relation to the Site and not the Stand.
Counsel for the plaintiff
submitted that if reliance was to be placed on s 23 of
the Act reference should have been made to the statutory provision in the
pleadings or the defence formulated in such a way that it was sufficiently clear
on what statutory provisions reliance was placed.
If the illegality relied on
did not appear ex facie the transaction but from the surrounding
circumstances, the circumstances should have been pleaded. There is a lot to be
said for
this submission. Counsel for the defendants was however allowed to
argue the new ground of appeal as if the amendment had been granted.
What
follows are grounds for that ruling.
[8] The approach to be followed
where a question of illegality is raised was laid down in Yannakou v Apollo
Club.[2] Trollip JA
writing for the majority said:
‘...it is the duty of the court to take
the point of illegality mero motu, even if the defendant does not plead
or raise it; but it can and will only do so if the illegality appears ex
facie the transaction or from the evidence before it, and, in the latter
event, if it is also satisfied that all the necessary and relevant
facts are
before it.’
In the present case it is true that illegality
was not raised pertinently in the plea. It seems to me that even if the point
had
been specifically raised the plaintiff would not have conducted her case any
differently. The question of illegality was raised
by the plaintiff herself.
As I have already stated the plaintiff in her particulars of claim alleged that
the parties agreed that
the Stand and the Site would be registered in the name
of the second defendant because of the ‘impediments connected with the
plaintiff and the defendant’s employment which prohibited them from having
any interest in any business venture’. I do
not consider that on the facts
of the present case there would be any unfairness to the plaintiff if the
amendment is granted[3]. In any event
this court is on the basis of Yannakou v Apollo Club entitled to consider
the point mero motu. For these reasons the amendment was allowed.
[9] I now turn to the merits. Three main submissions were
advanced on behalf of the defendants. The first was that the plaintiff had
failed to prove the agreement
upon which she relied in her particulars of claim,
in terms of which the second defendant would hold the disputed assets as a
nominee
for the joint estate. In this regard, conflicting versions of the
circumstances under which the Stand and the Site were acquired
were put forward
by the plaintiff and the first and second defendants. The trial court made
credibility findings in favour of the
plaintiff and her witnesses and against
the defendants and their witnesses and ultimately accepted the plaintiff’s
version
as set out in her particulars of claim. It has often been stated that,
as a general rule, the trial court is in the best possible
position to decide on
the credibility of witnesses before it and that a court of appeal will not
lightly interfere with its findings
in this
regard.[4] In this case, I am
satisfied that the credibility findings made by the trial court were justified
by the evidence before it. In
my view, it is not necessary to deal with the
argument advanced by counsel for the defendants that, in accepting the
plaintiff’s
version, the trial court incorrectly relied on documents
without proof of the authenticity thereof. Even in the absence of such
documents, the other evidence before the trial court was such that its finding
that the plaintiff had proved her case on a balance
of probabilities cannot be
faulted.
[10] The second submission made by counsel for the defendants
was that the agreement relied on by the plaintiff, if it existed, was invalid
in
that its aim was to defeat the objects of the Act, which precluded civil
servants in the employ of the Venda government from ‘having
an interest in
any business venture’. For this submission reliance was placed on s 23 of
the Act. It reads:
‘23 Unless it is otherwise provided for in his
conditions of employment –
(a) every officer and employee shall place the whole of his time at the disposal of the State;
(b) no officer or employee shall perform or engage himself to perform remunerative work outside his employment in the public service, without permission granted on the recommendation of the Commission by the Minister or an officer authorised by the Minister;
(c) no officer or employee may claim any additional remuneration in respect of any official duty or work which he performs voluntarily or is requested by a competent authority to perform.’
[Emphasis added]
[11] The construction placed by counsel
on s 23 is not justified. On a proper interpretation of the section the
intention of the legislature
was to ensure that civil servants placed the whole
of their time ‘at the disposal of the State’. That much is clear
from the wording of sub-paragraph (a) above. The use of the phrase
‘remunerative work outside his [the employee’s]
employment’ in sub-paragraph (b) relates to work done which
consumes the time of the employee and reinforces the notion that the section
requires
the employee to devote the whole of his time to his employment. The
mere fact that the plaintiff and the first defendant had an
interest in the
Stand and the Site does not necessarily imply that their time was consumed
thereby or that ‘the whole of their
time’ was not placed at the
disposal of the State. On the evidence neither the plaintiff nor the first
defendant physically
participated in the operation of the business on the Site
or performed any other ‘work’ either regarding the Site or
the
Stand, although apparently they received some remuneration from the business run
on the Site. It therefore follows that the mere
acquisition and holding of
rights or interests in the sites in question in this case does not amount to a
contravention of s 23 of
the Act and the agreement entered into between the
spouses, on the one hand, and the second defendant, on the other, cannot be
regarded
as illegal or unenforceable.
[12] The third and final
submission advanced on behalf of the defendants was that the plaintiff and the
first defendant could not have acquired
the disputed Stand and the Site because
they lacked the requisite intention (animus) to acquire the said assets given
that they believed
that, as civil servants, they were precluded by the Act from
doing so. The submission was doomed to fail the moment it was made.
The
question whether or not the plaintiff and the first defendant had the intention
to acquire the property concerned is not in
issue in this case. That question
would have arisen if the plaintiff had been claiming transfer of ownership of
the Stand and of
the permission to occupy the Site. But this is not the case.
All the plaintiff asked for in the action was a declarator that the
Stand and
the Site were assets in the joint estate. The submission is therefore without
merit and falls to be rejected.
[13] In the result the appeal fails
and the following order is made:
1. The appeal is dismissed with costs, such costs to be paid by the first and second appellants jointly and severally, the one paying the other to be absolved.
2. The first respondent is ordered to pay the costs incurred by the third and fourth appellants up to the abandonment of the judgment and order of the trial court in so far as it related to such appellants and the tender made by the first respondent.
__________________
KK MTHIYANE
CONCUR: JUDGE OF
APPEAL
JONES AJA
VAN HEERDEN AJA
[1] Act 8 of 1986. The Act has now
been repealed by s 43 (1) of the Public Service Act, 1994 (Proclamation No 103
of 1994) read with
Schedule 4
thereof.
[2] 1974 (1) SA 614 AD at
623H; see also F & I Advisors (Edms) Bpk en `n ander v Eerste Nasionale
Bank van Suidelike Afrika Bpk [1998] 4 All SA 480 (SCA) at 484d–e;
Herbstein & Van Winsen The Civil Practice of the Supreme Court of South
Africa 4ed (1997) 914.
[3]
Bank of Lisbon and South Africa Ltd v The Master and Others 1987 (1) SA
276 (A) at 290 D–F; see also Herbstein & Van Winsen op cit
912 – 914 and the other authorities there
cited.
[4] Rex v Dhlumayo
1948 (2) SA 677(A) at 705-706.
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.RTF of original document