THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

CASE NO:  02/03
Reportable

In the matter between

OLD MUTUAL LIFE ASSURANCE COMPANY
(SA) LIMITED
First Appellant

SANLAM LIFE INSURANCE LIMITED                Second Appellant

and

WANDA  SWEMMER                                                          Respondent

CORAM:   Harms, Farlam, Brand, Heher JJA et Van Heerden AJA

HEARD:              27  FEBRUARY 2004

DELIVERED:    18 MARCH 2004

Summary:  Section 7(7) and 7(8) of Divorce Act 70 of 1979 – orders in respect of
‘pension interest’ – correctness and enforceability of order compelling underwriters
and administrators of pension funds to pay proceeds of retirement annuities to non-
member spouse

JUDGMENT

VAN HEERDEN AJA

[1] The main issue in this appeal is the correctness and enforceability
of an order made by the court granting a decree of divorce, in terms of
which the appellants, two life insurance companies, were ordered to pay
the proceeds of certain specified retirement annuities to the respondent
(the plaintiff in the divorce proceedings).

[2] The respondent was married in community of property to Dr Ebbie
Earl Swemmer.  On 20 September 2001 this marriage was dissolved by a
divorce order made by the High Court (TPD) on an undefended basis.
The order made by the trial court (Stafford DJP) included the following
provisions:

‘7
Die Verweerder [Dr Swemmer] verbeur die vermoënsregtelike voordele
voortspruitend uit die huwelik binne gemeenskap van goed tot die volgende
mate:
7.1 Eiseres verkry as haar uitsluitlike eiendom die volgende langtermyn
versekeringspolisse:
Maatskappynaam
Sanlam
Sanlam
Old Mutual
Sanlam
Old Mutual
Sanlam
Old Mutual
Polisnommer
9971255x6
PPS016291
8661813
9047550x0
9523162
7241483x2
9523162
Tipe polis
Uitkeerpolis
Uitkeerpolis
Uittredingsannuïteit
Uittredingsannuïteit
Uittredingsannuïteit
Uitkeerpolis
Uitkeerpolis

Die voormelde versekeringsmaatskappye word gelas om die opbrengs van die
voormelde versekeringspolisse op die vroegste datum wat die voordele
daarvan uitbetaal mag word direk aan die Eiseres uit te betaal.’

[3] Apart from the three specified retirement annuity policies, the other
policies referred to either do not exist or appear to have lapsed or have
been terminated prior to the divorce.  The retirement annuity policies
numbered 8661813 and 9523162 are policies in the name of the South
African Retirement Annuity Fund (‘SARAF’), a duly registered pension
fund in terms of the Pension Funds Act 24 of 1956.  Old Mutual Life
Assurance Company (South Africa) Limited, the first appellant, is the
underwriter and administrator of SARAF.  Dr Swemmer is the assured in
terms of each policy and the member of SARAF in respect of both, while
SARAF is the legal owner of the policies and is registered as such in the
first appellant’s records.  The agreed retirement dates, and thus the dates
on which the benefits under the policies will in the normal course accrue
to the assured, are 1 November 2007 (policy number 8661813) and 1
May 2016 (policy number 9523162), respectively.  In terms of the rules
of SARAF, Dr Swemmer is, however, entitled to change such retirement
dates and the earliest date upon which he could ‘call up’ the benefits
under each policy is upon his reaching the age of 55 years.

[4] Much the same applies to the third retirement annuity policy
referred to in para 7 of the divorce order (policy number 9047550x0).
Sanlam Life Insurance Limited, the second appellant, is the underwriter
and administrator of the Professional Provident Society of South Africa
Retirement Annuity Fund (‘the PPS Fund’), also a duly registered
pension fund in terms of the Pension Funds Act.  The PPS Fund is the
legal owner of the relevant policy, while Dr Swemmer, as the assured, is
a member of the Fund.  The agreed maturity date of the policy is 1
October 2007 but, in terms of the rules of the PPS Fund, Dr Swemmer is
entitled to anticipate the maturity date, the earliest possible anticipated
maturity date being the date of his fifty-fifth birthday.

[5] Dr Swemmer, who has apparently been living at an unknown
address in Australia since before the divorce, turned 55 years of age on 2
December 2001.  In pursuance of the divorce order, the respondent
demanded that the appellants pay the benefits under the retirement
annuity policies to her directly, pointing out that her divorced husband
had reached ‘die minimum ouderdom waarop voordele uitgekeer kan
word’ and stating that, as sole ownership of the policies had been
awarded to her, she had ‘beskikkingsbevoegdheid oor die polisse . . . en
slegs beperk kan word in die handeling van hierdie polisse vir sover dit
kontraktueel of statutêr beperk word’.

[6] For reasons that will be discussed below, both appellants took the
view that they were unable to accede to the respondent’s demands in this
regard.  This gave rise to an application brought by the respondent against
the appellants in the High Court (Pretoria), in which she sought an order
compelling the appellants to pay her the proceeds of the three retirement
annuity policies in compliance with the divorce order.  Dr Swemmer was
not joined as a party to this application.

[7] The appellants opposed the application.  At the same time, they
brought a counter-application for an order setting aside para 8 of the
divorce order or, in the alternative, for an order ‘correcting’ para 8 by
replacing it with the following:

‘8.1
Die Suid-Afrikaanse Uittredingsannuïteitsfonds en die PPS Annuïteitsfonds
word gelas om die 50% pensioenbelang van Eiseres soos op die datum van
egskeiding, waarop sy geregtig is kragtens die verbeuringsbevel hierbo, aan
Eiseres te betaal wanneer die pensioenvoordele ingevolge die toespaslike
polisse vir Verweerder toeval;

8.2
Die voormelde Suid-Afrikaanse Uittredingsannuïteitsfonds en die PPS
Annuïteitsfonds word voorts gelas om ’n aantekening in die rekords van die
toepaslike Fondse te maak dat die 50% pensioenbelang voortspruitend uit die
toepaslike polisse aan Eiseres betaalbaar is.’

[8] The counter-application was made in terms of rule 42(1). The
appellants contended that paras 7 and 8 of the divorce order conflicted
with the provisions of s 7(7) and 7(8) of the Divorce Act 70 of 1979, read
together with s 37A of the Pension Funds Act, and that they were
prohibited by these statutory provisions from giving effect to the order as
framed.  Moreover, as Dr Swemmer had apparently paid all the amounts
owing in respect of the retirement annuity policies concerned, the
forfeiture order made by the trial court was incorrect in that it purported
to deprive him of more than a 50 percent ‘pension interest’ (as defined in
s 1(1) of the Divorce Act) in such policies.

[9] In regard to the forfeiture order, the court below (Botha J) held that

‘. . . die omvang van die verbeuringsbevel net mooi niks met die respondente [the
present appellants] te make het nie. Hulle enigste belang in die bevel is vir sover dit
hulle mag gelas om ’n  uitbetaling te maak wat in stryd met die relevante wetgewing
mag wees.’

[10] Botha J held further that the appellants had no locus standi to bring
the counter-application in terms of rule 42(1) for the setting aside or
variation of para 8 of the divorce order.  In any event, the failure by the
appellants to join Dr Swemmer as a party to the counter-application
appeared to him to be an insurmountable obstacle to the relief sought by
them.

[11] Turning to the effect of para 8 of the divorce order, Botha J was of
the view that the respondent was entitled to immediate payment of the
proceeds of the retirement annuity policies, despite the fact that Dr
Swemmer, the member of the pension funds concerned, had not
anticipated the stipulated retirement (maturity) dates:

‘Na my mening val ’n  pensioenbelang ’n party toe op die vroegste moontlike tydstip
wat dit uitbetaal kan word. Enige ander uitleg sal onbillike en selfs absurde gevolge
meebring. Dit spreek vanself dat as ’n polis uitbetaal kan word, dit moes toegeval het.
Dit maak net sin in die konteks van wetgewing wat die verdeling en toedeling van
bates by ’n egskeiding reël, dat die tydstip wat ’n nie-lid van ’n pensioenfonds
geregtig sou wees op die voordele aan hom toegewys, sou wees die vroegste
moontlike tydstip . . . . Andersins stem ek met mnr Smith [counsel for the applicant,
now the respondent] saam dat die nie-lid gade pro tanto in die skoene van die gade
wat ’n lid is stap en geregtig is om die uitkeerdatum van dit wat hom of haar toekom
te vervroeg of selfs uit te stel, mits die polis dit net toelaat.’

The respondent’s application thus succeeded, with costs, and the
appellants were ordered to pay her the proceeds of the relevant retirement
annuity policies in accordance with the order of the trial court.  The
counter-application was dismissed with costs.  Hence the present appeal
with the leave of the court below.

[12] As indicated above, the owners of the retirement annuity policies
are SARAF and the PPS Fund, respectively, while the appellants
underwrite and administer the said pension funds.  In terms of s 5 of the
Pension Funds Act and the rules of both SARAF and the PPS Fund, the
funds are bodies corporate capable of suing and being sued in their
corporate names.  In my view, it seems clear that the said pension funds
had a direct and substantial interest in the subject matter of the
proceedings in the court a quo and should have been joined as parties to
such proceedings.1  This point was raised by the appellants in the court
below, but was rejected by Botha J.  Before us, however, both funds
indicated in writing that they waived any right they had to be joined in
either the application or the counter-application; that they consented to
the steps taken by the appellants in the court below and in the appeal; and
that they abide the decision of this court.

[13] Section 37A(1) of the Pension Funds Act provides as follows:

‘Save to the extent permitted by this Act, the Income Tax Act, 1962 (Act No. 58 of
1962), and the Maintenance Act, 1998 [Act No. 99 of 1998], no benefit provided for
in the rules of a registered fund (including an annuity purchased or to be purchased by
the said fund from an insurer for a member), or right to such benefit, or right in
respect of contributions made by or on behalf of a member, shall, notwithstanding
anything to the contrary contained in the rules of such a fund, be capable of being

1 Amalgamated Engineering Union v Minister of Labour 1949 (3) SA 637 (A).  See further Herbstein
& Van Winsen: The Civil Practice of the Supreme Court of South Africa 4ed (1997) by Van Winsen,
Cilliers & Loots (edited by Dendy) 170-173 and the other authorities there cited.

reduced, transferred or otherwise ceded, or of being pledged or hypothecated, or be
liable to be attached or subjected to any form of execution under a judgment or order
of a court of law. . . . and in the event of the member or beneficiary concerned
attempting to transfer or otherwise cede, or to pledge or hypothecate, such benefit or
right, the fund concerned may withhold or suspend payment thereof:  Provided that
the fund may pay any such benefit or any benefit in pursuance of such contributions,
or part thereof, to any one or more of the dependants of the member or beneficiary or
to a guardian or trustee for the benefit of such dependant or dependants during such
period as it may determine.’

[14] Since the  enactment  of  the Divorce Amendment Act 7 of 1989,2
s 37A of the Pension Funds Act must, in the context of divorce
proceedings, be read together with s 7(7) and 7(8) of the Divorce Act.
These subsections, both of which were inserted by s 2 of the 1989 Act,
provide that:

‘ (7)
(a) In the determination of the patrimonial benefits to which the parties to any
divorce action may be entitled, the pension interest of a party shall, subject to
paragraphs (b) and (c), be deemed to be part of his assets.

(b) The amount so deemed to be part of a party’s assets, shall be reduced by
any amount of his pension interest which, by virtue of paragraph (a), in a previous
divorce –

(i)
was paid over or awarded to another party; or

2  Date of commencement 1 August 1989. This legislation resulted from recommendations made by the
South African Law Commission (since renamed the South African Law Reform Commission with
effect from 17 January 2003) in its Report on the investigation into the possibility of making provision
for a divorced woman to share in the pension benefits of her former husband Project 41 (October
1986).

(ii)
for the purposes of an agreement contemplated in subsection
(1), was accounted in favour of another party.

(c) Paragraph (a) shall not apply to a divorce action in respect of a marriage
out of community of property entered into on or after 1 November 1984 in terms of an
antenuptial contract by which community of property, community of profit and loss
and the accrual system are excluded.

(8)
Notwithstanding the provisions of any other law or of the rules of any pension
fund ─
(a)  the court granting a decree of divorce in respect of a member of such a
fund, may make an order that –
(i)
any part of the pension interest of that member which, by virtue
of subsection (7), is due or assigned to the other party to the
divorce action concerned, shall be paid by that fund to that
other party when any pension benefits accrue in respect of that
member;
(ii)
an endorsement be made in the records of that fund that that
part of the pension interest concerned is so payable to that other
party;
(b) any law which applies in relation to the reduction, assignment, transfer,
cession, pledge, hypothecation or attachment of the pension benefits, or any
right in respect thereof, in that fund, shall apply mutatis mutandis with regard
to the right of that other party in respect of that part of the pension interest
concerned.’

[15] ‘Pension fund’ and ‘pension interest’ are in turn defined in s 1(1)
of the Divorce Act, as amended by s 1 of the 1989 Act, as follows:

‘ “pension fund” means a pension fund as defined in section 1(1) of the Pension
Funds Act, 1956 (Act No. 24 of 1956), irrespective of whether the provisions of that
Act apply to the pension fund or not’;

‘ “pension interest”, in relation to a party to a divorce action who -
(a) is a member of a pension fund (excluding a retirement annuity fund),
means the benefits to which that party as such a member would have been
entitled in terms of the rules of that fund if his membership of the fund
would have been terminated on the date of the divorce on account of his
resignation from his office;
(b) is a member of a retirement annuity fund which was bona fide established
for the purpose of providing life annuities for the members of the fund, and
which is a pension fund, means the total amount of that party’s
contributions to the fund up to the date of the divorce, together with a total
amount of annual simple interest on those contributions up to that date,
calculated at the same rate as the rate prescribed as at that date by the
Minister of Justice in terms of section 1(2) of the Prescribed Rate of
Interest Act 1975 (Act No. 55 of 1975), for the purposes of that Act’.

[16] These ‘new’ provisions in the Divorce Act have given rise to
difficult problems of interpretation and application, several of which were
foreshadowed right from the outset.3  In argument before us, counsel for
the respondent emphasised some of the anomalies and potential inequities
to which these provisions may give rise.  The ongoing difficulties and

3 See, for example, U Stander ‘Wysigingswet op Egskeiding 7 van 1989: verdeling van
pensioenverwagtinge by egskeiding’ 1989 De Rebus 853; J C Sonnekus ‘Pensioenverwagtings en
onderhoud na egskeiding in versorgingsregtelike in plaas van vermoënsregtelike konteks’ 1989 TSAR
202 and 326; G H Fick ‘Pensioenverrekening tussen gades met egskeiding’ (1990) 15 TRW 57.

uncertainties in this regard, particularly concerns expressed by the Life
Offices Association and the Institute of Retirement Funds regarding the
manner in which the non-member spouse’s portion of a pension interest is
dealt with, resulted in two further investigations by the South African
Law Commission, each culminating in a report and draft Bill.4  None of
the recommendations made by the Commission in this regard has,
however, as yet been taken any further by the legislature.

[17] It would appear that, prior to 1 August 1989, the ‘interest’ which a
spouse who was a member of a pension fund had in respect of pension
benefits which had not yet accrued was generally not regarded as an asset
in his or her estate or, where the marriage was in community of property,
as an asset in the joint estate.5  This meant that, in determining the
patrimonial benefits to which the parties to a divorce action were entitled,
the ‘pension expectations’ of the member spouse were not taken into
account. The legal position was, however, by no means certain6 and the
rationale for the view that, prior to the occurrence of the so-called
‘defreezing contingency’ whereby the member spouse’s pension benefits
accrued to him or her, any interest of the member spouse in respect of
such benefits was not an asset in his or her estate, has (in my view,

4  South African Law Commission Report on the division of pension benefits on divorce Project 41
(March 1995) and Report on sharing of pension benefits Project 112 (June 1999).
5  See South African Law Commission 1986 Report (n 2 above) Chapter 3; also Lesbury van Zyl
‘Sharing of pension interest by spouses on divorce’ 1985 De Rebus 343 and A H van Wyk
‘Pensioenverwagtinge en diskresionêre bateverdeling by egskeiding’ (1988) 51 THRHR 228 at 229-
230.
6  See Fick op cit (n 3) 64-74 and the other authorities there cited.

correctly) been described as ‘complicated and not altogether
satisfactory’.7

[18] As indicated above, s 7(7)(a) of the Divorce Act ‘deems’ a member
spouse’s ‘pension interest’ to be an asset in his or her estate for purposes
of the determination of the patrimonial benefits to which the parties to a
divorce action may be entitled. ‘Pension interest’ is narrowly defined and
simply establishes a method of ascertaining the value of the ‘interest’ of
the member of the pension or retirement annuity fund concerned as
accumulated up to the date of the divorce.8 In the words of the South
African Law Commission:9

‘A pension interest is not a real asset that is open to division. It is the value that, on
the date of divorce, is placed on the interest that a party to those proceedings has in
the pension benefits that will accrue to him or her as a member of a pension fund or
retirement annuity fund at a certain future date or event in accordance with the rules
of the particular fund. The value of the interest is calculated according to a fixed
formula and the amount determined in this manner is deemed to be an asset of the
party concerned. What we are dealing with here is a notional asset that is added to all
the other assets of the party concerned in order to determine the extent of the other
party’s claim to a part of the first-mentioned party’s assets.’

7  Per Labe J in De Kock v Jacobson and Another 1999 (4) SA 346 (W) at 348G-J.
8  See George L Marx & Kobus Hanekom The Manual on South African Retirement Funds and Other
Employee Benefits Vol 1 (2003 ed) 552.
9  South African Law Commission 1995 Report (n 4 above) para 4.1.2.

[19] To my mind, the necessary implication of the ‘deeming
provision’ in s 7(7)(a) of the Divorce Act, read together with the
relatively narrow definition of ‘pension interest’ in s 1(1), is that any
other ‘right’ or ‘interest’ which the member spouse may have in respect
of pension benefits which have not yet accrued is – at least after 1 August
1989 – not to be regarded as an asset in the estate of such member spouse
in determining the patrimonial benefits to which the parties to the divorce
action may be entitled.10

[20] The definition of ‘pension interest’ also has the effect of
circumscribing the powers of the court granting a decree of divorce to
make orders in terms of s 7(8)(a).  Once a part of the pension interest of
the member spouse becomes ‘due’ or ‘is assigned’ to the non-member
spouse in the course of the divorce proceedings, the court may order that
such part of the pension interest must be paid by the pension fund
concerned to the non-member spouse ‘when any pension benefits accrue
in respect of’ the member spouse.  The court may also order that an
endorsement be made in the records of the fund concerned to the effect
that the part of the pension interest thus allocated to the non-member

10  De Kock v Jacobson & Another above (n 7) at 348J–349B. It is interesting to note that courts and
legislatures in other legal systems have gone much further than South Africa in recognising pension
benefits, even if ‘unvested’ or ‘unmatured’, as constituting ‘property’ of the member spouse which is
subject to award or division by the court in settlement of property rights between divorcing spouses:
see, in this regard, Fick op cit (n 3) 74-90; J C Sonnekus ‘Pensioendeling, billikheid én die
egskeidingsreg is onversoenbaar’ 1994 TSAR 48 and 211; South African Law Commission 1986 Report
(n 3 above) Chapter 4, read with the 1999 Report (n 4 above) Chapter 2. See also Charles C Marvel
‘Pension or retirement benefits as subject to award or division by court in settlement of property rights
between spouses’ 94 ALR3d 176, a very detailed and useful annotation on the leading judgment, in this
sphere, of the Supreme Court of California (a community property state) in In re Marriage of Brown
544 P2d 561.

spouse is ‘so payable’ to such spouse.  That portion of the pension
interest allocated to the non-member spouse will thus only be payable by
the fund concerned at some future date when the ‘pension benefits’ in
question accrue to the member spouse.  This date will be determined by
the rules of the pension fund governing the relationship between it and
the member spouse.11 Moreover, there is no provision in the relevant
sections of the Act for the pension fund concerned to be ordered to pay to
the non-member spouse interest or capital growth on the portion of the
pension interest allocated to that spouse from the date of divorce to the
date of eventual payment.12

[21] Counsel for the respondent submitted that para 7 of the divorce
order, in terms of which, in the guise of a partial forfeiture order, Stafford
DJP purported to award to the respondent the ‘sole ownership’ of the
three retirement annuities concerned, was competently made in terms of s
9, read with s 7(7)(a), of the Act.  Para 8 of the divorce order – made,
according  to counsel,  in  terms of s 7(8)(a) of the Act – merely obliged
the appellants to give effect to para 7 by paying to the respondent the full
proceeds of the three retirement annuity policies on the earliest date on

11  Marx & Hanekom op cit (n 8) 553.  See also Fred Paul ‘Egskeiding – hoe raak dit pensioen?’ 2001
De Rebus 26 at 28 and Giselle Gould ‘Divorce orders and pension benefits: an appeal from the Institute
of Retirement Funds’ 2000 De Rebus 33 at 34.
12  The parties to the divorce action may provide in a deed of settlement that the member spouse
himself or herself will pay to the non-member spouse interest at a specified rate in respect of the
portion of the pension interest allocated to the latter, or compensate the latter in some other way for the
loss of interest or capital growth (if any) from the date of divorce to the date of payment.  While such a
provision will be enforceable between the parties themselves, it will not bind the fund concerned.  Cf
Schenk v Schenk 1993 (2) SA 346 (E) at 349D-E where the court (Melunsky J) left open the question
whether the court granting an order in terms of s 7(8)(a) of the Divorce Act may, in the absence of an
agreement between the parties in this regard, order the member spouse to pay interest on the portion of
the pension interest awarded to the non-member spouse.

which the benefits under such policies could accrue.  As the respondent
thus became the owner of the policies in question, she replaced Dr
Swemmer as the member of SARAF and the PPS Fund in respect of these
policies and thus had the right to ‘call up’ the policies on the earliest date
provided for in the rule of these funds, viz the date on which Dr
Swemmer attained the age of 55 years.  It would seem that this argument
was accepted by Botha J in the court below.13

[22] In my view, this line of reasoning is fundamentally flawed.
Section 9 of the Act provides that:
‘(1)  When a decree of divorce is granted on the ground of the irretrievable break-
down of a marriage the court may make an order that the patrimonial benefits of the
marriage be forfeited by one party in favour of the other, either wholly or in part, if
the court, having regard to the duration of the marriage, the circumstances which gave
rise to the break-down thereof and any substantial misconduct on the part of either of
the parties, is satisfied that, if the order for forfeiture is not made, the one party will in
relation to the other be unduly benefited.’

Since the enactment of the 1989 Act, it is clear that, in determining the
nature and ambit of ‘the patrimonial benefits of the marriage’ referred to
in s 9, the ‘pension interest’ of a member spouse, as defined in s 1(1) of
the Act, is deemed to be part of the assets of that spouse (s 7(7)(a)).
However, as pointed out above,14 it would seem that any other ‘right’ or
‘interest’ which that member spouse may have in respect of pension

13  See paras [9] – [11] above.
14  Para [19].

benefits which have not yet accrued under the rules of the relevant
fund, is not to be regarded as an asset in his or her estate and thus cannot
be subject to a forfeiture order in favour of the other spouse.

[23] Provided that the necessary evidentiary basis is laid by the party
seeking a forfeiture order,15  the court may, in  the  exercise  of its
discretion under s 9, order that 100 per cent of the pension interest of the
member spouse in a specified fund or funds be forfeited in favour of the
other spouse.  If such an order is made, the court may further, in terms of
s 7(8)(a), order that 100 per cent of the pension interest concerned must
be paid by the relevant fund or funds to the non-member spouse when the
pension benefits accrue in respect of the member spouse,16 and that an
endorsement to this effect be made in the records of the fund or funds in
question.  Notwithstanding such a ‘100 per cent award’, the pension
interest, as defined in s 1(1), remains fixed with reference to the date of
the divorce, and the future ‘accrual date’ on which it will become payable
to the non-member spouse will still be determined by the rules governing
the relationship between the member spouse and the relevant pension
fund.  The non-member spouse does not become the ‘owner’ of the policy
or of the unaccrued pension benefits, does not replace the member spouse
as a member of the fund, and cannot therefore exercise any right of the

15  See in this regard Engelbrecht v Engelbrecht  1989 (1) SA 597 (C) at 601F-I and Wijker v Wijker
1993 (4) SA 720 (A) at 727E-728C.
16  It could be argued that, as far as the three retirement annuity policies are concerned, this was what
Stafford DJP intended to achieve by paras 7 and 8 of his order of 20 September 2001.  If so, it may
well be open to the respondent to apply for an appropriate variation of this order in terms of  rule 42(1)
upon notice to Dr Swemmer.

member spouse to anticipate (or postpone) the agreed maturity date of
the policy.  Exactly the same applies where the order made by the court in
terms of s 7(8)(a) relates to less than 100 per cent of the pension interest
of the member spouse, irrespective of whether or not such an order is
made pursuant to a forfeiture order in terms of s 9.

[24] It follows from the above that, as submitted by counsel for the
appellants, both paras 7 and 8 of the divorce order were in conflict with
the provisions of s 7(7) and 7(8) of the Act, read together with s 37A of
the Pension Funds Act. The pension benefits under the relevant
retirement annuity policies having not yet accrued to Dr Swemmer, the
pension funds concerned could not at that stage be required to pay
anything to the respondent, let alone the ‘proceeds’ of the retirement
annuity policies, as stipulated in para 8 of the order. As the appellants
were not parties to the proceedings in which this order was made, the
order was a nullity as far as they were concerned and they could
legitimately disregard it without having it set aside.17  To my mind, this
was a complete answer to the application brought by the respondent
against them.

[25] Counsel for the appellants accepted that, if para 8 of the divorce
order could not be enforced against the appellants, the counter-application

17 See, for example, Sliom v Wallach’s Printing & Publishing Co Ltd 1925 TPD 650 at 656 and S v
Absalom 1989 (3) SA 154 (A) at 164E-G.

was unnecessary.  In any event, to the extent that the counter-
application sought to vary the order made in divorce proceedings to
which Dr Swemmer was a party, he should have been joined as a party to
the counter-application or, at the very least, proper notice thereof should
have been given to him in terms of rules 42(2) and 42(3).  I agree with the
view expressed by Botha J in the court below that the failure to join or
notify Dr Swemmer in any way rendered the counter-application
defective.

[26] This case cogently illustrates the importance of deeds of settlement
and divorce orders relating to pension interests being formulated very
carefully indeed in order to ensure that they fall within the ambit of
subsecs 7(7) and 7(8) of the Act.18  If this is done, then all that would be
required of the pension fund in question is to perform administrative
functions to give effect to the order, without the rights of the fund or the
relationship between the fund and the member spouse being affected in
any way, and it would not be necessary to join the fund as a party to the
divorce proceedings.19  As presently formulated, however, the relevant
provisions of the divorce order clearly fall well outside the ambit of the
relevant sections of the Divorce Act and the application brought by the
respondent to enforce this order should not have succeeded, even if the
relevant pension funds (SARAF and the PPS Fund) had been joined as
parties to the application.

18  See, for example, Gould op cit (n 11) and Marx & Hanekom op cit (n 8) 563–564.
19  See Sempapalele v Sempapalele and Another 2001 (2) SA 306 (O) at 312A-D and the South African
Law Commission 1995 Report (n 4 above) paras 2.3.16 – 2.3.18.

[27] The appellants do not seek any cost order against the respondent,
either in respect of this appeal or in respect of the application in the court
below.

[28] The following order is therefore made:
1. The appeal is upheld.
2. The order made by the court a quo is set aside and replaced
with the following order:
‘Both the application and the counter-application are
dismissed.’

B J VAN HEERDEN AJA

Concur:
HARMS JA
FARLAM JA
BRAND JA
HEHER JA