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FORM A

FILING SHEET FOR EASTERN CAPE JUDGMENT

ECJ NO : 003/2004

PARTIES: HEATHER OSNER APPLICANT

AND

PAUL FREDERICK MICHAEL OSNER RESPONDENT

REFERENCE NUMBERS -

• Registrar: 499/2004

• Magistrate:

• Supreme Court of Appeal/Constitutional Court:

DATE DELIVERED: 3 JUNE 2004

JUDGE(S): PLASKET J

LEGAL REPRESENTATIVES -

Appearances:

• for the State/Applicant(s)/Appellant(s): SH COLE

• for the accused/respondent(s): RWN BROOKS

Instructing attorneys:

• Applicant(s)/Appellant(s): NETTELTONS

• Respondent(s): WHEELDON, RUSHMERE & COLE

CASE INFORMATION -

• Nature of proceedings : PROHIBITORY INTERDICT

• Topic: PRESERVATION OF ASSET PENDING DIVORCE SETTLEMENT

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE DIVISION)

CASE NO: 499/2004

DATE DELIVERED:3/6/04

In the matter between:

HEATHER OSNER APPLICANT

and

PAUL FREDERICK MICHAEL OSNER RESPONDENT

JUDGMENT

PLASKET J

[A] INTRODUCTION

[1] The applicant brought an ex parte urgent application against the respondent, her husband, in which she sought and was granted a rule nisi calling upon him to show cause why ‘he should not be finally interdicted and restrained from removing the yacht “Ballyhoo” from South African waters, pending the finalisation of the divorce proceedings between the parties’ and why the respondent ‘should only be permitted, pending finalization of the aforesaid divorce proceedings, to undertake charter trips with the yacht “Ballyhoo”, to a distance of no more than 15 nautical miles from the East London harbour, subject to the respondent giving the Harbour Master, East London, 48 hours notice of his intention to embark on any such charter, and the destination of such charter.’

[2] She also sought the usual order that the above orders operate as temporary interdicts pending the return day, and a costs order that differed from the usual, namely, that ‘the cost of this application be and are hereby reserved for determination in the divorce action … between the parties’. An order was granted on 7 May 2004 by Chetty J. By notice dated 17 May 2004, the respondent anticipated the return day, setting the matter down for hearing on 20 May 2004. On that day the matter was postponed further to 24 May 2004 to enable the applicant to file a replying affidavit. The costs of the postponement are still in issue before me.

[3] The applicant and respondent have been married since April 1981. They are in the throes of what appears to be an acrimonious divorce. In the divorce proceedings, the applicant claims, inter alia, a redistribution order in terms of s7(3) of the Divorce Act 70 of 1979. She claims to be confident of succeeding in claiming 50 percent of the respondent’s estate. In a counter-claim, the respondent also claims a redistribution order in terms of s7(3) of the Act, and he too expresses confidence of being awarded 50 percent of his wife’s estate on divorce.

[4] The yacht is the single biggest asset in respondent’s estate. He alleges that its value is in the region of R1 400 000.00. (Whether that is its true value or not is not relevant at this stage.) It is common cause that he plans to sail in it from East London up the east coast of Africa to Mozambique, Tanzania and Kenya. This is at the heart of the applicant’s case.

[5] It is trite law that, in order to establish the requirements for the granting of an interim interdict, an applicant must establish: (a) a prima facie right in the subject matter of the dispute; (b) an apprehension of irreparable harm if the interim relief is not granted and the final relief is granted in due course; (c) the balance of convenience in his or her favour; and (d) the absence of a satisfactory alternative remedy.¹

[6] Whether an application such as this – in which a so-called anti-dissipation interdict² is applied for -- is to be treated differently is an issue to which I shall return in due course.

[B] THE APPLICANT’S CASE: HER FOUNDING PAPERS

[7] The applicant stated that, as the result of her ‘ongoing work within the family over the past 23 years’ and particularly because the marriage ‘has broken down solely and exclusively by reason of the respondent’s gross and ongoing misconduct’ she has a ‘clear right’ to an order in terms of s7(3) of the Divorce Act. Whether she does or not is a matter for the trial court to determine in due course. I accept that she has established the first element of an interim interdict, namely a prima facie right, even if that right is open to some doubt.³

[8] She then turns to the crux of the matter – the reason why this application was brought – when she alleges that, if the application is not granted, she will suffer irreparable harm. She states:

‘I state further that if the respondent is allowed to remove the one significant asset in his estate, to the jurisdiction of a foreign country, or even into international waters, I have a well grounded and overwhelming apprehension of irreparable harm to myself; the respondent will be able to liquidate his smaller assets and leave me with virtually nothing in South Africa with which to satisfy any judgment in my favour on the conclusion of the divorce.’

[9] The build-up to this point in her papers is instructive. She states in this regard:

‘19. During the course of preparations for trial, it came to my attention that it was rumored in the yachting circles in East London that the respondent was going to take the yacht “Ballyhoo” away from East London, out of South African waters and to charter the yacht along the Mozambican coast.

20. Until the present time, the yacht “Ballyhoo” has never been taken by the respondent out of South African waters and has been used exclusively for local charters around the East London harbour mouth, for a distance of approximately 10 nautical miles from East London, on charters that last for a few hours at a time.

21. I was most concerned that the respondent may be planning to take the yacht “Ballyhoo” from South Africa as it is the one true asset of value in his estate, and in respect of which any judgment in my favour in a s7(3) distribution claim, would stand or fall.’

[10] In order to confirm her suspicions that the yacht was to be sailed out of South African waters, the applicant engaged the services of one Darrell Els, a private investigator. He went to the respondent’s restaurant – the Ballyhoo Restaurant – posing as a potential client wishing to hire the yacht for a birthday party. He learnt that the yacht was being refurbished and that there were plans afoot to sail to Bazaruto Island in Mozambique and further up the East African coast where the respondent intended to take charters. Indeed, he learnt from the partner of the respondent at the time, one Bernadine Bush, that the respondent had charter work booked until 2005. (In his affidavit, the respondent said that this was incorrect.)

[11] The applicant contends that the balance of convenience favours her because she does not ‘seek to interdict the respondent from continuing with his nautical activities in the manner in which he has conducted it in the past namely to take short charters in the vicinity of East London for a duration of a few hours at a time; I only requested the respondent be interdicted from removing the yacht “Ballyhoo” from the jurisdiction of this honourable court pending the finalization of the divorce action which can be fully resolved within six months from now’. She states that this will mean that the respondent ‘will merely be required to delay his departure for foreign waters but, in the interim, can continue to charter the yacht in the manner he has done previously to sustain himself financially should he need to do so’. She also says that she requires the order to be supervised by the Harbour Master, East London, ‘to enable me to have some ability to monitor the situation pending the finalization of the divorce action’.

[12] She claims that she has no alternative remedy once the yacht has left South African waters. She states:

‘Even were the respondent were to return to South Africa for finalization of the divorce proceedings, if the yacht was to be left moored somewhere up the African coast this would have the effect of rendering nugatory any judgment in my favour for a redistribution order in respect of respondent’s assets. For this reason the interdict sought in these papers is my only relief. The respondent does not have sufficient assets in South Africa to satisfy any judgment that this court may grant in the divorce action, should the respondent be successful in placing the yacht “Ballyhoo” beyond my grasp.’

[C] THE RESPONDENT’S ANSWERING PAPERS

[13] The respondent does not deny that he intends to sail the yacht out of South African waters to Mozambique and further up the African coast. Indeed, for all intents and purposes it is common cause between the parties that he intends to make the yacht available for charter along the East African Coast. He states:

’19. I confirm that I have been planning to take the yacht “Ballyhoo” away from East London to charter the yacht along the Mozambican coast. This has not been any secretive or covert arrangement on my part, but has been completely open and is in fact general knowledge. I planed to take the yacht for charter to Bazaruto, off the Mozambican coast with effect from the 23rd June, with my leaving East London harbour with effect from the beginning of June. The reasons for this are as follows:

1. I generate my living expenses and the running expenses of the yacht from the chartering of the yacht;

2. The chartering of the yacht during the winter time in East London is very quite and it is far more economical to charter the yacht off the island of Bazaruto during the winter time;

3. A further important complication is the fact that my fare-paying passenger limit has been reduced from 30 to 12 since April 2004, due to the new SAMSA safety rules and regulations which have come into effect over the past several months and which has been enforced upon me since the 5th April 2004. I have anticipated this for several months. …

4. My licenced “skipper” is only entitled to skipper the yacht until the 8th June 2004, thereafter his qualification will be insufficient;

5. There are no similar strict limitations off the island of Bazaruto with regard to the skippering and carrying of paying passengers;

6. The weather conditions will be most unfavourable after the month of June due to the contrary winds that arriving thereafter for yachts moving north up the east coast of Africa.’

[14] The respondent states further that the fact that ‘I might have an asset temporarily in Mozambican waters will not have any effect on the applicant’s claim or judgment against me, should this be granted’. He also says the following in response to the applicant’s allegations that she has met the requirements for the granting of an interim order:

‘26.1 The contents of this paragraph are denied. On the contrary, I submit that the substantial part of the applicant’s estate has been established because of my direct involvement in the construction of the large Mgwalana Mouth beach house. I submit that I am reasonably entitled to a redistribution order in this regard. I furthermore deny that the marriage relationship between the applicant and myself broke down by reason of my alleged gross misconduct. I respectfully submit that the cause of the breakdown of the marriage is as more fully set out in my counter-claim, a copy whereof is attached hereto. In the circumstances, I deny that the applicant has a clear right to a redistribution order in terms of section 7(3). …

2. The contents of this paragraph are denied. I respectfully submit that the applicant has not one shred of evidence to indicate that I intend dealing with my estate in order to cause the applicant harm or to defraud her. The applicant furthermore has not one shred of evidence to indicate that I intend liquidating my assets in order to leave the applicant with virtually nothing in South Africa with which to satisfy any judgment which may be in her favour on the conclusion of the divorce. I respectfully submit that I have at all times been bona fide in my dealings with the applicant both in respect of the issues in the divorce and my attempts to reach a settlement with her.

3. I strongly deny that the balance of convenience favours the applicant in this instance. For the reasons set out above, my ability to earn a living from the chartering of the yacht out of the East London harbour has been severely limited and in fact will cease on 8th June 2004 unless I am able to find and employ a skipper with the necessary qualifications. To the best of my knowledge there are no skippers available with the necessary qualifications for employment by me on a flexitime charter basis in East London. In any event, I am only limited to 12 passengers at a time, which is uneconomical. I have in this past year contributed a substantial amount towards my daughter’s university fees. I will be unable to continue to do so from income unless I leave the East London harbour in order to charter the boat in more lucrative areas such as Bazaruto. The applicant will still be in a position to pursue her alleged claim against me, whether or not my yacht is in Bazaruto or in South Africa.

4. I strongly deny that the applicant is not without an alternative satisfactory remedy. I have no intention of selling the yacht and respectfully submit that I will meet any order against me made by the above honourable court. I furthermore submit that I have sufficient assets in South Africa in the form of immovable property to satisfy any judgment that this court may grant in the divorce action.’

[15] The respondent makes it clear that he has no intention of leaving the yacht permanently beyond the territorial jurisdiction of South African courts or that he intends to alienate it. He state that it is ‘certainly not for sale and I will definitely be returning to South Africa with the yacht. The yacht is my life, livelihood and home and the applicant is well aware of this’. He also states that he never indicated that he might be willing to sell the yacht, that the applicant was well aware of this and that she has ‘made no suggestion that I have such intentions’. Later in his affidavit (where he states, incidentally, that he does not have charter bookings in 2005, as had been stated by Ms Bush, according to the evidence of Mr Els) the respondent says that ‘the intention has always been to return at the end of October 2004’ but that ‘in view of the enforcement of the SAMSA safety regulations now upon me, I may well decide not to bring the yacht back then, unless I am able to obtain the services of a skipper with the necessary qualifications and dependant upon the charter business available after October 2004. I will however fly back during the period away, from time to time to deal with my affairs in East London’.

[D] THE APPLICANT’S REPLY

[16] In her replying affidavit, the applicant makes much of her discovery of additional assets in the estate of her husband: it would appear that, by mistake, a bank statement that indicated that a policy worth R108 000.00 had been surrendered by the respondent and a IT3B form referring to an investment of R169 930.19 were erroneously posted to the applicant’s address. Although they were not meant for her eyes, she opened both. Why she decided to do this is not explained.

[17] The inference that the applicant wants me to draw from her discovery is that the respondent is intent on hiding his assets and will therefore secrete the yacht in foreign waters to defeat her legitimate claim to half of the respondent’s estate. She seeks to add weight to this line of reasoning by attaching an affidavit from Captain PHC Kroon, the Principal Officer of the South African Maritime Safety Authority based in East London. The upshot of Captain Kroon’s evidence, however, is that the yacht may not leave East London harbour until certain matters have been attended to. He also confirms that it may only carry 12 passengers.

[E] FACTUAL CONCLUSIONS ON THE PAPERS

[18] The discovery of the assets mentioned above does not necessarily give rise to the inference that the respondent intends to deal with the yacht in an underhand or dishonest way – to dissipate his estate to the prejudice of the applicant. One does not know what his explanation could be: he may well have an innocent explanation. Similarly, Captain Kroon’s evidence does not go any further than establish that the respondent may not leave the harbour before his yacht meets the necessary standards, even though he was mistaken about the effect of the safety regulations on the ability of the skipper of the yacht to continue with his work. I am unable to see how it assists the applicant.

[19] In any event, it was never the applicant’s case that the respondent was involved in a scheme, actuated by bad faith, to deny her the fruits of the judgment that she claims will be handed down in her favour in due course. Her case, on her founding papers was that the respondent planned to sail the yacht out of South African waters to convey paying passengers around the island of Bazaruto and beyond, and that activity had to be interdicted to safeguard the biggest asset in the respondent’s estate so that it could be available to her on her anticipated victory in the divorce trial.

[20] In my view, there is little in dispute on the papers. While there may be disagreement as to detail and as to effect, it cannot but be accepted by the applicant that the respondent intends to sail the yacht out of South African waters so that he can take advantage of more lucrative opportunities to charter it than those that present themselves in winter in East London. This, after all, is precisely what Mr Els ascertained when he posed as a potential customer.

[F] THE LEGAL CONCLUSIONS TO BE DRAWN

[21] I stated earlier in this judgment that I would return to the issue of what elements have to be established to justify the granting of an anti-dissipation interdict and consequently whether they differ from the usual elements of an interim interdict. From the authorities that I will deal with below, it appears to me that it is still necessary for an applicant to establish those well-known elements, although he or she may, in some instances, be assisted by a presumption that operates in his or her favour.

[22] In Knox D’ Arcy Ltd and others v Jamieson and others⁴ EM Grosskopf JA dealt with whether it was necessary for an applicant to establish that the respondent was, in fact, dissipating his or her assets, or was likely to, with the intention of defeating the applicant’s claim to those assets. He held as follows in this regard:

‘The question which arises from this approach is whether an applicant need show a particular state of mind on the part of the respondent, ie 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.’

[23] In Fedsure Life Assurance Co Ltd v Worldwide African Investment Holdings (Pty) Ltd⁵ Cloete J held, after setting out the requirements for the granting of an interim interdict, that the test was less stringent in some cases:

‘[27] There are two exceptions to the requirements set out in Eriksen. They occur in applications for interim relief pending vindicatory and “quasi-vindicatory” actions. A vindicatory action has been categorised as one in which the plaintiff claims delivery of specific property as owner or lawful possessor; and an action has been categorised as “quasi-vindicatory” when delivery of specific property is claimed under some legal right to obtain possession. I do not wish to be detained by terminology. In all such cases it has been settled law in this Division for over half a century that “(T)he court is entitled to ensure that the thing shall be preserved until the dispute is decided finally”.

[28] The two exceptions are the following: the applicant need not allege irreparable loss inasmuch as there is a presumption, which may be rebutted by the respondent, that the injury is irreparable; nor need the applicant show that it has no other satisfactory remedy.’

[24] In Fey NO v Van Der Westhuizen and others⁶ Meer J held that it was not necessary for the applicant to establish an intention to dissipate because the matter involved a ‘quasi-proprietary or a quasi-vindicatory claim’ in which the applicant ‘claims delivery of specific property under some legal right to possession’.⁷ She held too that the case ‘being under the law of insolvency, and one in which the claim is quasi-vindicatory is, I believe, an exceptional case, in which intention is not required to be shown by the applicant’.⁸

[25] It was argued by Mr Cole, who appeared for the applicant, that I should follow and apply Fey’s case and, in particular, that I should hold that it was not necessary for the applicant to establish that the respondent was acting with the intention to dissipate. He argued, in the alternative, that the necessary intention had, in any event, been established. Mr Brooks, who appeared for the respondent argued that Fey’s case did not properly reflect the law and that I should not follow it: it was necessary in this case for the applicant to allege and prove an intention to dissipate on the part of the respondent, and this she had failed to do.

[26] In my view, Fey’s case is distinguishable. The most important point of distinction is that the acts of dissipation in issue in that case flowed from the unlawful theft of funds and hence there could be no talk of the bona fide utilisation of the funds. In this case there is no sustainable suggestion that the respondent’s use of the yacht is anything but bona fide.

[27] I am also not convinced that Meer J was correct in stating that because the matter was quasi-vindicatory in nature, it was exceptional, and it was not for this reason necessary for an intention to dissipate to be established. If that is what she meant, I am in respectful disagreement with her. I do not believe that Knox D’Arcy can be read this widely. In instances of vindicatory or quasi-vindicatory claims, according to the judgment of Cloete J in the Fedsure case (that I have quoted above), a rebuttable presumption arises that the applicant has suffered irreparable harm, and it is not necessary to establish that no other satisfactory remedy is available to the applicant. Meer J used the quasi-vindicatory nature of the claim to free the applicant from the obligation of establishing the necessary intention and to free him from having to establish irreparable harm and the absence of an alternative remedy was available.⁹

[28] I have my doubts too that the claim of the applicant to half of the estate of the respondent in terms of s7(3) of the Divorce Act can be properly categorized as quasi-vindicatory: if anything, it is analogous to the damages claim in Knox D’Arcy.

[29] The facts of this case cannot be described as exceptional. This, in other words, is not one of those ‘special situations’ contemplated by EM Grosskopf JA in Knox D’ Arcy in which it would be justified to limit and regulate the respondent’s legitimate use of his own property for the possible payment, in due course, of funds to the applicant should her claim in terms of s7(3) of the Divorce Act succeed and the counter-claim of the respondent fail.

[30] The applicant has failed, in my view, to establish that she will, indeed, suffer irreparable injury if the applicant is allowed to sail his yacht out of South African waters: wherever the yacht may be, it remains part of the estate of the respondent and whatever its value, that value will be part of the value of his assets. If the order that the applicant seeks is made in terms of s7(3) of the Divorce Act in due course, that order will bind the respondent wherever his yacht is. Secondly, I am of the view that the balance of convenience favours the respondent. The order that the applicant has applied for in these proceedings would not only limit his right to freedom of movement (through the medium of sailing his yacht) to the territorial waters of South Africa, but also to within a distance of 15 nautical miles from the East London harbour: he could not even sail to Port Elizabeth or Durban. I take the view that to grant the order sought, in these circumstances, would be unduly and unjustifiably oppressive of the respondent.

[31] One further issue remains. That is the question of costs for the postponement of this matter on 20 May 2004, the anticipated return day. The respondent gave notice on 17 May 2004, in terms of rule 6(8), of his intention to anticipate the return day on 20 May 2004. The applicant had two court days to draft and file her reply. She required more time on the anticipated return day and applied for a postponement, which was opposed. The matter was then postponed to 12h00 on 24 May 2004 and the applicant was ordered to file her reply by 09h00 on that day.

[32] I take into account the facts that: the applicant moved this application as one of urgency (and without notice to the respondent); the respondent was entitled to anticipate the return day as he did and could have done so on 24 hours notice; he gave two court days notice, which was reasonable in the circumstances; and his freedom of movement was limited by a temporary interdict that operated against him. In these circumstances, it is, in my view, equitable that the applicant should pay the costs of the postponement.

[33] I make the following order:

1. The application is dismissed with costs.

2. The applicant is directed to pay the costs of the postponement of the matter on 20 May 2004.

_____________________

C PLASKET

JUDGE OF THE HIGH COURT

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