Should general damages form part of the joint estate at the dissolution of marriage in community of property?

March 1st, 2023
x
Bookmark

Picture source: Gallo Images/Getty

Section 18(a) of the Matrimonial Property Act 88 of 1984 (the Act), expressly excludes non-patrimonial damages suffered by a spouse during the marriage from forming part of the joint estate. This section provides as follows: ‘Notwithstanding the fact that a spouse is married in community of property –

(a) any amount recovered by him or her by way of damages, other than damages for patrimonial loss, by reason of a delict committed against him or her, does not fall into the joint estate but becomes his or her separate property.’

The problem, however, arises in instances where a spouse recovered general damages from a delict committed against that spouse before the conclusion of the marriage. The question is, do those general damages automatically form part of the joint estate, or are they excluded in terms of s 18(a) of the Act? In Van den Berg v Van den Berg 2003 (6) SA 229 (T) and LH v ZH 2022 (1) SA 384 (SCA), the courts, particularly the Supreme Court of Appeal (SCA), grappled with whether these damages must be excluded at the dissolution of the marriage in community of property. This article revisits these cases and traverses the best approach for courts to follow in dealing with non-patrimonial damages recovered before the conclusion of the marriage at divorce.

Summary of facts

In Van den Berg, the plaintiff and the defendant were married in community of property on 27 June 1992, and had two minor children born of the marriage. The plaintiff (wife) instituted divorce proceedings against the defendant (husband) and sought, among others, a decree of divorce and an order for the equal division of their joint estate. The defendant defended the matter and filed a plea and counterclaim. In his counterclaim, the defendant sought an order declaring all amounts or part thereof he received from insurance companies due to a shooting incident that occurred on 23 February 1998, wherein he was injured not to form part of the joint estate and that the plaintiff should forfeit the benefits arising from the marriage in community of property. Alternatively, the defendant sought an order that the joint estate be equally divided, provided that the proceeds he received as compensation for his injuries be excluded from the joint estate. The damages the defendant sought to exclude from the joint estate arose from a shooting incident on 23 February 1998. The defendant was a member of the Military Police. While on his way to attend a meeting at Swartkop Base Headquarters, he unfortunately, came across a robbery in progress. He was shot and sustained head, shoulder, and back injuries. He had several insurance policies, which paid him certain sums of money as compensation for disablement. The defendant took out some of the insurance policies before his marriage to the plaintiff. During the divorce proceedings, the plaintiff argued that the proceeds received by the defendant from the insurance policies must form part of the joint estate because the causa is contractual and not delictual. On the other hand, the defendant argued that the proceeds arose from the delict and were excluded by s 18(a) of the Act. The court was called on to consider in limine whether money recovered by the defendant from insurance companies arising from a shooting incident wherein he was injured and rendered medically unfit to work forms part of the joint estate or not, considering the provisions of s 18(a) of the Act.

Shongwe J, as he then was, found that it was common cause that the defendant sustained injuries because of a delict as he was shot accidentally. The court found that the damages recovered were not special damages. The compensation recovered, the court found, was for a loss or injury sustained. The court rejected the argument that the causa was contractual and found the same untenable. Furthermore, the court found that the money received by the defendant arose from a delict committed against the defendant and therefore fell outside the joint estate. The court concluded that the non-patrimonial damages the defendant received were personal and did not form part of the joint estate as envisaged by s 18(a) of the Act.

I submitted that the court’s reasoning in this matter was correct and spot on. Unlike special damages, which in truth increases the value of the joint estate, the non-patrimonial damages suffered by the defendant were personal and related to his disfigurement. The damages did not increase the value of the joint estate but instead amounted to a diminution of the defendant’s physicality. It was intended to be used by the defendant for deprivation of what, in truth, could never be restored by money even after the parties were divorced. Therefore, the legislature saw it fit, and quite correctly so, in my view, to exclude these types of damages from the joint estate in s 18(a) of the Act.

While we thought the law was settled on this point, the recent judgment of the SCA in LH v ZH raised more questions than answers. This case was concerned with the interpretation of s 18(a) of the Act. The parties were married in community of property on 22 December 2015. Prior to the conclusion of the marriage, the respondent (wife) was involved in a motor vehicle accident and was awarded non-patrimonial damages in the sum of R 800 000. Of this amount, she invested R 550 000 (the investment) with Standard Bank. In 2018, the appellant (husband) instituted divorce proceedings in the regional court, seeking a decree of divorce and division of the joint estate. In turn, the respondent pleaded in her counterclaim that the investment did not form part of the joint estate and should be excluded as it contained non-patrimonial damages received because of a delict committed against her in terms of s 18(a) of the Act. On conclusion of the trial, the regional court ordered the division of the joint estate but excluded the investment from the division. It found that the investment fell outside the joint estate in terms of s 18(a) of the Act. Aggrieved by this decision, the appellant appealed to the Full Court of the Eastern Cape Division of the High Court. The Full Court was divided on the issue. The majority, per Majiki and Jaji JJ, confirmed the regional court’s order excluding the investment from the joint estate. The majority acknowledged that s 18(a) applied only to a spouse injured after the conclusion of their marriage but further stated that ‘the non-reference to the spouses who were injured and paid before their marriage in community of property … appears to be more of an omission than an exclusion’ (LH v ZH at para 6). In a dissenting judgment, Mbabane AJ reasoned that s 18(a) ‘by its design, applies where there is a joint estate’ and that ‘the concept of joint estate comes into being on the date of the marriage’ (LH v ZH at para 7). Mbabane AJ contended that the respondent had a choice to exclude the investment by marrying out of community of property. He concluded that to the extent that the parties were married in community of property, the investment formed part of the joint estate. The appellant appealed the majority decision to the SCA. At the SCA, the appellant relied on the Van den Berg decision. However, the majority at the SCA found that the decision of Van den Berg was irrelevant as it dealt primarily with ‘the question of whether damages received by a spouse during the course of a marriage in community of property were either contractual or delictual’ (LH v ZH at para 4). The majority found that from the plain reading of s 18(a), it is evident that non-patrimonial damages received by a spouse during a marriage in community of property become the property of the injured spouse and must be excluded from the division of the joint estate on divorce. The court concluded that damages recovered by the respondent, which were received before the marriage, were the property of the respondent before the marriage, and on being married in community of property, the property of each party to the marriage fell into the joint estate inclusive of the damages for non-patrimonial damages. In a dissenting judgment, Mocumie JA invoked s 39(2) of the Constitution and adopted a purposive interpretation of s 18(a) and found that the Regional Court was correct in its approach ‘that the division of the estate must be determined at the … dissolution of the marriage, not when the marriage was entered into’ (LH v ZH at para 20). Mocumie JA relied on the Constitutional Court decision of Van der Merwe v Road Accident Fund and Another (Women’s Legal Centre Trust as Amicus Curiae) 2006 (4) SA 230 (CC) where the apex court found s 18(b) of the Act to be inconsistent with the Constitution to the extent that it did not protect spouses married in community of property in recovering damages as opposed to those who were married out of community of property.

I submit that the interpretation of Mocumie JA is preferable and is to the point. Damages do not change form by the mere conclusion of a marriage. The approach of the SCA in using the conclusion of a marriage in community of property as a determining factor for the payment of non-patrimonial damages is problematic. It is problematic in that, in a broader context, it ignores the purpose of s 18 and the nature and rationale for granting general damages. The court’s reasoning ignores delictual damages arising from domestic violence committed by a guilty spouse before the conclusion of the marriage. The court’s reasoning suggests that those damages recovered before marriage from a guilty spouse would automatically form part of the joint estate on the innocent party marrying the perpetrator. This, view, cannot be correct. I submit that in such a case, the diminution of the innocent spouse’s physicality after the conclusion of the marriage would remain. The rationale for the exclusion of these damages cannot be overtaken by the conclusion of the marriage in community of property.

More importantly, I submit that the decision of the SCA renders s 18(a) unconstitutional in that it draws ‘an impermissible differentiation between spouses married in and out of community of property in respect of the right to recover patrimonial damages suffered from bodily injury’ (Van der Merwe at para 58). Those who are married out of community of property are protected because even after the marriage is concluded, their general damages recovered from a delictual act against them before marriage would not be recovered by the other spouse on divorce. In contrast, it is different to those married in community of property. I submit that the differentiation in s 18(a) of the Act unjustifiably limits the right to equal protection and benefit of the law guaranteed by s 9(1) of our Constitution for spouses married in community of property.

Conclusion

In conclusion, I submit that in an open and democratic society based on human dignity, equality, and freedom, the conclusion of a marriage in community of property cannot be considered as a waiver of the right to a spouse’s general damages acquired before the marriage. Therefore, the general damages paid to the respondent in LH v ZH pursuant to a diminution of her physicality and aimed at placing her in the same position she would have been but, for the accident should have been excluded in the division of the joint estate. As the minority judgment noted, the legislature should urgently address this anomaly by amending s 18(a) and make express provision to exclude general damages from the joint estate recovered before the conclusion of the marriage.

Dr James D Lekhuleni BProc LLB (UL) LLM LLM (UP) LLM LLD (UWC) is a Judge at the Western Cape High Court.

This article was first published in De Rebus in 2023 (March) DR 16.

X