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Court case: Permission by spouse needed for donation?

Marais NO and Another v Maposa and Others [2020] ZASCA 23

EB and SB were married in community of property for almost 50 years when SB died intestate in 2016.  EB was appointed as executor in SB’s deceased estate and initially brought the application which led to this appeal.  The application was dismissed.  She died, however, before the appeal could be heard and was substituted as appellant by the newly appointed (after her death) executors in SB’s deceased estate.  The joint estate at the time of SB’s death was in excess of R20 million.

More than 20 years after the marriage EB became aware that SB had a relationship with ML and fathered two children by her, KL and CM.  Despite this, EB and SB were never divorced.

The single biggest asset in the joint estate at the time of SB’s death was a 100% membership interest in a close corporation, Seepunt Eiendomme CC (Seepunt), with its biggest asset in turn being a building worth about R20 million.

ML became involved in SB’s business in the 1980’s and later helped him manage a paraffin distribution business.  ML and SB entered into a customary union, which was void as SB was already married to EB.

SB’s health started deteriorating in 2013.  On 12 May 2014, 75% of the membership interest in Seepunt was transferred in portions of 25% each to ML, KL and CM.  ML’s version of events was that SB repeatedly said that he wanted his “two families” to be treated equally and that the transfer should be seen against this background.  ML handled all the paperwork and process to effect the transfer which SB regarded as a donation to the three of them.

EB brought the initial application on the basis that she did not consent to such a donation and that her consent was necessary due to the marriage in community, in the light of the provisions of section 15 of the Matrimonial Property Act, 88 of 1984.  Section 15(1) provides that any of the spouses in a marriage in community of property may perform any juristic act with regard to the joint estate without the consent of the other spouse.  This subsection is, however, subject to section 15(2), (3), and (7).  Section 15(2) requires the written consent of the other spouse before a spouse may enter into “any contract for the alienation, mortgaging, burdening with a servitude or conferring of any other real right in immovable property forming part of the joint estate”.  Section 15(3) requires the consent of the other spouse for any transaction to “donate to another person any asset of the joint estate or alienate such an asset without value, excluding an asset of which the donation or alienation does not and probably will not unreasonably prejudice the interest of the other spouse …” To determine whether a donation will unreasonably prejudice the interest of the other spouse the court must take into consideration the value of the donation, the reason for the donation, the financial and social standing of the spouses, their standard of living and any other factor the court deems relevant.  Section 15(9) provides that any such transaction entered into without the necessary consent is void and unenforceable, unless the other party to the transaction did not know or could not reasonably have known that the transaction was contrary to the provisions of section 15.

The application was dismissed by the Western Cape High Court on the basis that EB was deemed to have consented to the donation.

On appeal to the Supreme Court of Appeals, the court (Plasket JA, with Petse DP, Mbha, Van der Merwe and Nicholls JJA concurring), held that the test whether a person could not reasonably have known that consent was necessary is an objective test based on how a reasonable person would have acted.  ML, on her own version, made no attempt to ascertain the nature of SB’s relationship with EB.  In light of the fact that Seepunt represented the bulk of the value in EB and SB’s joint estate it could also not be said that EB’s interest would not be unreasonably prejudiced.  The appeal was allowed with costs.

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