KSL v AL (356/2023) [2024] ZASCA 96 (13 June 2024)

KSL (the husband) and AL (the wife) were married on 3 April 1992 out of community of property with the inclusion of the accrual system as per the Matrimonial Property Act 88 of 1984. They have two major children. The marriage did not survive, and KSL instituted divorce proceedings in May 2009.
The parties attempted reconciliation but were unsuccessful, leading to the dissolution of the marriage on 14 March 2019. The divorce court granted the decree of divorce but postponed the determination of their proprietary rights (the accrual) to a later stage.

On 19 July 2018, while the divorce was still pending, KSL founded the Lovell Children Educational Trust and donated R1,800,000 to the trust to provide financial support for their children. AL only learned about this in December 2018.
In October 2018, KSL invested R5,114,740.75 in a living annuity with Investec Assets Management Services (Pty) Ltd. On 12 December 2018, KSL presented a "with prejudice tender" under rule 34 of the Uniform Rules of Court, proposing to pay AL R550,000 in full and final settlement of her accrual claim. KSL also proposed that AL's attorneys prepare a power of attorney to investigate his financial position and suggested appointing a referee if AL was not satisfied with the settlement offer. AL rejected this tender.

In May 2021, two years after the divorce, KSL sold his immovable property located in Northwold, Extension 11, Johannesburg. AL became aware of the sale in June 2021 and subsequently instituted an anti-dissipation application in the Gauteng Division of the High Court, Pretoria, on 1 July 2021.

AL sought an order directing KSL's attorneys, as conveyancers, to retain the net proceeds of the property sale in an interest-bearing trust account pending the determination of her accrual claim in the divorce action. She also sought an order for KSL's attorneys to provide a statement of account if the net proceeds had already been paid to KSL or his nominee and for KSL to pay an equivalent amount into the trust account.

AL's founding affidavit claimed that KSL's estate had shown an accrual exceeding hers, based on the tender made by KSL in December 2018. AL expressed concern that KSL would dissipate his assets to frustrate her claim, citing the donation to the trust and the investment in the annuity. KSL opposed the application, arguing that the trust was for their children's benefit, the annuity funds were not dissipated, and his estate had shown a lesser accrual than AL's. He also stated that he sold the property to settle debts, not to dissipate assets.

The High Court granted the anti-dissipation relief, finding that AL had a prima facie right to the accrual claim based on KSL's tender and that there was a well-grounded apprehension of irreparable harm if the proceeds were not preserved.
KSL's application for leave to appeal was dismissed by the High Court, but the appeal proceeded with leave from the Supreme Court of Appeal.

The ratio decidendi, or the core legal principle underlying the decision in this case, revolves around the requirements and legal standards for granting an anti-dissipation interdict. The Supreme Court of Appeal (SCA) focused on several key legal principles:

1. Requirements for an Anti-Dissipation Interdict:
The SCA reaffirmed that an anti-dissipation interdict may be granted where a respondent is believed to be deliberately arranging their affairs to ensure that by the time the applicant is in a position to execute judgment, the respondent will be without assets or sufficient assets on which the applicant expects to execute.
The purpose of such an interdict is to preserve the asset in issue between the parties.

2. Establishing the Necessary Requirements:
The applicant must establish the requirements for an interim interdict, which include:
a. A prima facie right, even if it is open to some doubt.
b. Injury actually committed or reasonably apprehended.
c. The balance of convenience.
d. The absence of similar protection by any other remedy.
Additionally, for an anti-dissipation interdict, the applicant must show:
a. A claim against the respondent.
b. That the respondent is secreting or dissipating assets, or is likely to do so, with the intention of defeating the applicant’s claim.

3. Intention to Defeat the Claim:
The SCA emphasized that the applicant must show that the respondent possessed a particular state of mind, i.e., that the respondent is getting rid of the funds or is likely to do so with the intention of defeating the claims of creditors.
The court rejected the notion that it is sufficient to show that the respondent's conduct is likely to have the effect of frustrating an anticipated judgment without proving the respondent's intention.

4. Incorrect Application of Legal Principles by the High Court:
The SCA found that the High Court erred in its application of the legal principles by relying on a "with prejudice" tender as evidence of a prima facie right to an accrual claim.
The High Court also incorrectly applied the legal standard by not requiring proof of the respondent's intention to dissipate assets to defeat the applicant's claim.

5. Appealability of Interim Orders:
The SCA noted that the interests of justice standard has subsumed the common law test on the appealability of interim orders. The court held that the interim interdict was appealable in this case because the High Court's order had significant implications and was based on incorrect legal principles.

In summary, the ratio decidendi of the case is that for an anti-dissipation interdict to be granted, the applicant must establish a prima facie right and demonstrate that the respondent is intentionally dissipating assets to defeat the applicant's claim. The High Court's failure to apply these principles correctly warranted the appeal and the setting aside of its order.

The Supreme Court of Appeal (SCA) relied on several key cases in its reasoning process. Here are the case laws and their neutral citations:

1. Knox D’Arcy Ltd and Others v Jamieson and Others [1996] ZASCA 58; 1996 (4) SA 348 (SCA); [1996] 3 All SA 669 (A)
This case established the principle that an applicant for an anti-dissipation interdict must show that the respondent is secreting or dissipating assets with the intention of defeating the applicant’s claim. The SCA reaffirmed this requirement in the present case.

2. Bassani Mining (Pty) Ltd v Sebosat (Pty) Ltd and Others [2021] ZASCA 126
This case reaffirmed the jurisdictional facts required for granting anti-dissipatory relief, as established in Knox D’Arcy.

3. Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others [2004] ZACC 20; 2005 (2) SA 359 (CC); 2005 (4) BCLR 301 (CC)
This case was cited regarding the criteria for admitting further evidence on appeal, emphasising that such evidence should be admitted only in exceptional circumstances.

4. O’Shea NO v Van Zyl NO and Others[2011] ZASCA 156; 2012 (1) SA 90 (SCA); [2012] 1 All SA 303 (SCA)
This case was referenced for the criteria that new evidence on appeal must be practically conclusive and final in its effect on the issue to which it is directed.

5. City of Tshwane Metropolitan Municipality v Afriforum and Another [2016] ZACC 19; 2016 (9) BCLR 1133 (CC); 2016 (6) SA 279 (CC)
This case discussed the interests of justice standard for the appealability of interim orders, noting that the common-law test has been subsumed by the constitutional standard.

6. United Democratic Movement and Another v Lebashe Investment Group (Pty) Ltd and Others[2022] ZACC 34; 2022 (12) BCLR 1521 (CC); 2023 (1) SA 353 (CC)
This case further elaborated on the interests of justice standard for the appealability of interim orders, emphasizing that the test is now whether the interests of justice dictate that an interim order is appealable.