We all know the saying, “what’s mine is mine and what’s yours is yours”, insofar as it relates to the assets acquired by parties during their marriage and when they get divorced. The proverbial boat regarding this principle has now been rocked by the Judgment delivered on 11 May 2022 in the Pretoria High Court.
The court declared Section 7(3)(a) of the Divorce Act, 70 of 1979 inconsistent with the Constitution and invalid to the extent that the provision limits the operation of section 7(3) of the Act to marriages out of community of property entered into before 1 November 1984. The effect will be that all parties married out of community of property without inclusion of the accrual system will be able to ask a court for an order for the redistribution of assets, if the necessary requirements are met, regardless of when the marriage was entered into.
There are three types of matrimonial property regimes in South African Law, being:
- Marriage in community of property, where parties at divorce share equally in the division of the joint estate;
- Marriages out of community of property with the inclusion of the accrual system, where the party whose estate shows a smaller growth/accrual at the date of divorce than the other persons can lay claim to 50% of the difference in the growth since the date of marriage to the date of divorce; and
- Marriages out of community of property without the application of the accrual system, where parties have totally separate estates and neither party can lay claim to any part of the other’s estate at the date of divorce, regardless of the growth thereof during the marriage.
The accrual system was introduced into South African Law by the Matrimonial Property Act of 1984 and before this, marriages could only be entered into in community of property or out of community of property, without the option of electing the application of the accrual system.
The relevant part of section 7(3) of the Divorce Act reads as follows:
A court granting a decree of divorce in respect of a marriage out of community of property,
- entered into before the commencement of the Matrimonial Property Act, 1984, in terms of an antenuptial contract by which community of property, community of profit and loss and accrual sharing in any form are excluded;
may, subject to the provisions of subsections (4), (5) and (6), on application by one of the parties to that marriage, in the absence of any agreement between them regarding the division of their assets, order that such assets, or such part of the assets, of the other party as the court may deem just be transferred to the first-mentioned party.
The above provision is known as a redistribution order and can be relied on when considering, among others, the following factors:
- That the party who wishes to enforce same must prove that he / she (predominantly still) contributed directly or indirectly to the maintenance or increase of the estate of the other party during the subsistence of the marriage, either by the rendering of services, or the saving of expenses which would otherwise have been incurred, or in any other manner;
- any donation made by one party to the other during the subsistence of the marriage, or which is owing and enforceable in terms of the antenuptial contract concerned;
- any other factor which should in the opinion of the court be taken into account.
The aim of section 7(3) is to redress the unfair financial imbalance flowing from the very nature of a marriage being out of community of property in circumstances where one party contributed to the other’s maintenance or the increase of the other’s estate during the existence of the marriage.
To understand the reason why a marriage out of community of property could be of a great disadvantage to one of the spouses in the marriage, I quote from the judgment: "Where both parties to a marriage out of community of property with the exclusion of the accrual system are economically active and support each other to more or less the same degree to be economically successful in their respective endeavours, it is difficult to identify any real disadvantages that this matrimonial property regime has for the parties. Often, however, one party becomes economically inactive, or less active than the other after the conclusion of the marriage. While it was historically the wife who sacrificed her career and exited the labour market, or took up employment with family-compatible hours at a lower salary to run the joint household and take care of the children, occurrences of men fulfilling the traditional role of homemaker while their professional wives pursue their careers are increasing. Both scenarios provide for an economic inactive or less active party ('the economically disadvantaged party'). "
The court dealt in great length with the reasons why it believed section 7(3)(a) of the Divorce Act to be unconstitutional, however the founding of unconstitutionality boils down thereto that the court found that incorporating a cut-off date for the application of section 7(3) (thus the redistribution of assets), prohibits economically disadvantaged parties who were married after 1 November 1984 to approach a court to make an order that is fair and equitable regarding a possible redistribution of assets, even if they meet the requirements as set out above and that no justifiable reason exists for same. The Constitutional Court must now consider if the order is to be confirmed. We will keep you updated.
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