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Supreme Court of Appeal of South Africa
Case no: 02/03
Old Mutual Life Assurance Company (SA) Limited and Sanlam
Life Insurance Limited v Wanda Swemmer
MEDIA SUMMARY – JUDGMENT DELIVERED IN SUPREME
COURT OF APPEAL
From: The Registrar, Supreme Court of Appeal
Date: 18 March 2004
Status: Immediate
Please note that the media summary is intended for the benefit of the
media and does not form part of the judgment of the Supreme Court of
Appeal.
The Supreme Court of Appeal today delivers judgment in a matter which
clarifies the meaning of ‘pension interest’ in the Divorce Act 70 of 1979.
The SCA overturns a judgment of the Pretoria High Court compelling
Old Mutual and Sanlam to pay to the respondent (Mrs Swemmer) the
proceeds of three retirement annuity policies in compliance with a
divorce order dated 20 September 2001, dissolving the marriage in
community of property between Mrs Swemmer and her husband, Dr
Swemmer.
The court granting the divorce order awarded Mrs Swemmer the ‘sole
ownership’ of the three retirement annuity policies in respect of which
Dr Swemmer was the assured. The court also ordered Old Mutual and
Sanlam, the underwriters and administrators of the retirement annuity
funds concerned, to pay the proceeds of these policies directly to Mrs
Swemmer on the earliest date on which the benefits under these policies
could be paid out.
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Mrs Swemmer obtained an order against Old Mutual and Sanlam
compelling them to pay her the proceeds of the three retirement annuity
policies in compliance with the divorce order. The High Court (Pretoria)
held that Mrs Swemmer had effectively replaced Dr Swemmer as the
member of the retirement annuity funds concerned and thus had the
right to ‘call up’ the policies on the earliest date provided for in the rules
of these funds, viz the date on which Dr Swemmer attained the age of 55
years (2 December 2001).
On appeal, the Supreme Court of Appeal
concluded that this was not correct. In terms of sections 7(7) and 7(8) of
the Divorce Act, as amended in 1989, the court granting a decree of
divorce only has the power to order that a specified part of the ‘pension
interest’ of the member spouse must be paid by the pension fund
(including a retirement annuity fund) concerned to the non-member
spouse when the pension benefits accrue in respect of the member
spouse. ‘Pension interest’ is narrowly defined in the Divorce Act 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. There is no provision in the
relevant sections of the Divorce Act for the pension or retirement
annuity fund in question 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. Even if the court orders that 100% of the ‘pension interest’ of
the member spouse in a specified fund or funds be awarded to the other
spouse, the latter 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
member spouse to anticipate (or postpone) the agreed maturity date of
the policy. Exactly the same applies where the order made by the court
relates to less that 100% of the pension interest of the member spouse.
The relevant parts of the divorce order were thus in conflict with the
provisions of sections 7(7) and 7(8) of the Divorce Act and could not be
enforced against the retirement annuity funds in question, let alone
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against the underwriters and administrators of these funds. The appeal
by Old Mutual and Sanlam was accordingly upheld.
This summary forms no part of the court’s judgment.
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