Donation of property in Divorce
The article discusses the case of Scholtz v Scholtz (209/2011) [2012] ZASCA 9 (14 March 2012). The parties in this matter had been married
Written agreement of donation
On 18 November 2007 the parties they had entered into a written agreement of donation. In terms of this agreement the husband donated to his wife his undivided share in a certain fixed property.
The agreement stipulated that the Respondent (husband) would sign all documents and take all steps necessary to facilitate the transfer of the donated property to the Appellant as soon as possible.
In her particulars of claim the Appellant alleged that she performed her obligations in terms of the donation by providing her conveyancers with the funds necessary to effect transfer of the donated property into her name. According to the particulars of claim the conveyancers thereupon prepared the transfer documents and presented them to the Respondent for his signature, but the Respondent refused to comply with their request.
The Respondent then argued that the contract of donation was invalid because it did not comply with Section 5 of the General Law Amendment Act 50 of 1956. He argued that there was a mortgage bond on the property at the time of the donation, and that the parties should have expressly agreed on what would happen to the liability for the bond debt.
The Respondent argued further that this was not made a material term of the agreement, and that the deed therefore failed to comply with Section 5, which rendered the donation void. The court a quo and the Respondent relied on a judgement by Myburgh AJ, in Savvides v Savvides 1986 (2) SA 325 (T). The facts in the Savvides case were similar to the facts in this case.
General Law Amendment Act
On appeal in the Scholtz case Brand JA looked at Section 5(1) of the General Law Amendment Act, which reads as follows:
“…[N]o executor contract of donation entered into after the commencement of this Act shall be valid unless the terms thereof are embodied in a written document signed by the donor or by a person acting on his written authority granted by him in the presence of two witnesses.”
Brand JA held that the conclusion in Savvides failed to recognise the possibility that the missing terms relating to liability for the bond could be found in a proper interpretation of the express terms of the agreement or that it might be incorporated by way of a tacit term. In the event of ambiguity, interpretation is not restricted to the wording of the document and reference may be made to the context or the factual matrix of the contract, which includes the background and surrounding circumstances. Tacit terms are by definition not to be found through interpretation of the express terms, they emanate from the common intention of the parties as inferred by the court from the express terms of the contract and the surrounding circumstances.
The court in conclusion refers to the case of Neethling v Klopper 1967 (4) SA 459 (A) at 464E-G where Steyn CJ pointed out that the Legislature’s intention with the prescription of formalities for certain contracts could hardly have been to eliminate all disputes with regard to the terms of these contracts. The court in the Scholtz case concluded that it stands to reason that a subsequent dispute about the terms of the contract, in itself, cannot render the agreement void ab initio.
In the Scholtz case the court found that the Defendant failed to establish the defence raised. The appeal was upheld with costs including the costs of two counsel. The husband’s defence was dismissed.
This article was written by Cape Town divorce expert, Peter M Baker
Info on Divorce & fixed Property
Alongside any pension fund investments; the house or flat being lived in is often the biggest asset in a divorce.
- Should I move out of house prior to divorce?
- How to transfer property from husband to wife (or vice versa); whilst still married (ie not getting divorced).
- "Protection" of fixed property using a trust.
- In-laws:
- When you're living with the in-laws, have developed their property & signed surety for their bond.
- When the in-laws sell property to child at reduced rate - impact on divorce (premature inheritance).
- Property clause in divorce settlement.
- Living together after the divorce.
- How to evict your spouse from the matrimonial home.
- Conveyancers conduct the transfer of property ownership from one spouse to another (or to a third party, if relevant).
- Liquidator to sell property & divide proceeds as part of divorce.