''Maseko v Maseko'',1992 (3) SA 190 (W). heard in the

Witwatersrand The Witwatersrand () (locally the Rand or, less commonly, the Reef) is a , north-facing scarp in South Africa. It consists of a hard, erosion-resistant quartzite metamorphic rock, over which several north-flowing rivers form waterfalls, which ...

Local Division by Lazarus AJ from 22 to 25 October,

1990 File:1990 Events Collage.png, From left, clockwise: The 1990 FIFA World Cup is played in Italy; The Human Genome Project is launched; Voyager I takes the famous Pale Blue Dot image- speaking on the fragility of Humankind, humanity on Earth, Astroph ...

, with judgment handed down on 16 November, is an important case in South African contract law, with its stipulation, on the question of

legality Legality, in respect of an act, agreement, or contract is the state of being consistent with the law or of being lawful or unlawful in a given jurisdiction, and the construct of power. According to the Merriam-Webster Dictionary, legality is 1 : ...

, that

contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...

s designed to

mislead Deception or falsehood is an act or statement that misleads, hides the truth, or promotes a belief, concept, or idea that is not true. It is often done for personal gain or advantage. Deception can involve dissimulation, propaganda and sleight o ...

creditor A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...

s are

immoral Immorality is the violation of moral laws, norms or standards. It refers to an agent doing or thinking something they know or believe to be wrong. Immorality is normally applied to people or actions, or in a broader sense, it can be applied to gr ...

and against

public policy Public policy is an institutionalized proposal or a decided set of elements like laws, regulations, guidelines, and actions to solve or address relevant and real-world problems, guided by a conception and often implemented by programs. Public p ...

. The plaintiff in this case, in order to protect her

property Property is a system of rights that gives people legal control of valuable things, and also refers to the valuable things themselves. Depending on the nature of the property, an owner of property may have the right to consume, alter, share, r ...

from possible attachment in execution, had entered into an agreement with the defendant that they would

marry Marriage, also called matrimony or wedlock, is a culturally and often legally recognized union between people called spouses. It establishes rights and obligations between them, as well as between them and their children, and between t ...

, transfer the property to him, thereafter

divorce Divorce (also known as dissolution of marriage) is the process of terminating a marriage or marital union. Divorce usually entails the canceling or reorganizing of the legal duties and responsibilities of marriage, thus dissolving the ...

and then retransfer the property to her once the threat of attachment was over. The purpose of this agreement was to conceal the property from the creditor, and possibly others; as such, it was contrary to public policy. The court also held that, when a contract is void ''ab initio'', the remedy of '' restitutio in integrum'' will not be available. The essence of the remedy is that there should be a valid legal transaction from which the court will in certain circumstances grant relief by avoiding it ''ab initio''.

Facts

The plaintiff acquired a certificate of occupation of certain

Soweto Soweto () is a township of the City of Johannesburg Metropolitan Municipality in Gauteng, South Africa, bordering the city's mining belt in the south. Its name is an English syllabic abbreviation for ''South Western Townships''. Formerly a s ...

, whereafter she signed as

surety In finance, a surety , surety bond or guaranty involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. Usually, a surety bond or surety is a promise by a surety or guarantor to pay ...

for two purchasers of

motor vehicle A motor vehicle, also known as motorized vehicle or automotive vehicle, is a self-propelled land vehicle, commonly wheeled, that does not operate on Track (rail transport), rails (such as trains or trams) and is used for the transportation of pe ...

s. Some time later, when the purchasers

default Default may refer to: Law * Default (law), the failure to do something required by law ** Default (finance), failure to satisfy the terms of a loan obligation or failure to pay back a loan ** Default judgment, a binding judgment in favor of ei ...

ed in their payments on the purchase price of the vehicles, the possibility arose of her being held liable in terms of the suretyships. In order to protect her property—that is, her certificate of occupation—she and defendant entered into an agreement whereby they were to be married and then transfer the property to the defendant. They would later get a divorce and, when there was no longer a threat that the property might be attached in execution, retransfer the property to the plaintiff. The parties were duly married on 9 May 1985. Less than a week later, the plaintiff ceded her property to the defendant. Divorce proceedings were instituted three days later, and an agreement of settlement was reached at the end of May. A divorce order, incorporating the agreement of settlement, was granted on 12 June. One of the terms of the agreement of settlement made an order of court was that the defendant "shall retain as his sole and exclusive property all right, title and interest in certain immovable property," which is to say the property transferred to him by the plaintiff. The defendant refused to retransfer the property to the plaintiff, who sued.

Judgment

In an action for an order directing the defendant to fulfil his end of the agreement, the court held that there was no doubt that the purpose of the agreement had been to conceal the plaintiff's assets from the creditor in whose favour she had signed as surety, and possibly other creditors. While there could be no '' fraudem creditorum'' without proof of actual prejudice, an agreement designed to mislead creditors was immoral and against public policy, even if it had not yet served its purpose. The court also found that the agreement operated to undermine the institution of marriage, in that the parties' overall plan had been inimical to the institution of marriage. Although the marriage and divorce were valid, the agreement itself was not. The transfer of the property was an inseparable part of that agreement. The remedy of ''restitutio in integrum'', furthermore, was not available to the plaintiff, as it was of the essence of that remedy that there should be a valid legal transaction to start with, from which the Court, in certain circumstances, granted relief by avoiding it ''ab initio''. The court held that, as the transfer was ''ab initio'' void, the remedy of ''restitutio in integrum'' was not available to the plaintiff. As to the remedy of restitution based on the transfer's being void ''ab initio'', the court held that the parties were '' in pari delicto'': If an order in favour of the plaintiff were not made, the defendant would be substantially enriched at the plaintiff's expense; if the order were made, the Court would be enforcing indirectly an illegal contract. The ''in pari delicto'' rule ordinarily served to preclude a plaintiff's recovering what was handed over under a contract or transaction which was void for illegality, but there were well-known exceptions to the rule. These were founded on the principles of equity and public policy. Each case had to be decided on its own facts; there was no general rule on the topic. Despite the fact that the relief sought might have an effect similar to enforcement (that is, of an illegal contract), the Court could still grant relief if the equities favoured it. While the plaintiff's conduct was deserving of some censure, the court found that the defendant's conduct approximated theft. Public policy could surely not tolerate that. Accordingly, the ''in pari delicto'' rule was relaxed in this case. If, however, relief were to be granted, it would be in conflict with the divorce order, with its provision that the defendant "shall retain as his sole and exclusive property" the property in issue. That order, although made by consent and in terms of an illegal agreement, was a valid order until set aside; it could not be ignored. As it could not be said that evidence relevant to the setting aside of the order had been fully canvassed, the court found that it could not grant such relief. The action was dismissed.

References

Books

* Du Plessis, Jacques, ''et al''.
The Law of Contract in South Africa
'. Edited by Dale Hutchison, Chris-James Pretorius, Mark Townsend and Helena Janisch.

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Cases

* ''Maseko v Maseko'' 1992 (3) SA 190 (W).

Notes