Forfeiture of Assets in a Divorce
Prior to the introduction of the Divorce Act, a forfeiture order was based on the principle that no one ought to benefit financially from a marriage that he/she wrecked. Under our current Divorce Act, conduct of the parties is but one of the factors that a court will consider when deciding to grant a forfeiture order. Our courts have moved away from singling out fault or conduct as the main reason for a forfeiture order. In terms of the Act, the court has discretion when granting a divorce on grounds of irretrievable breakdown for a marriage in community of property to order that the patrimonial benefits of one party be forfeited in favour of the other. A gift received during the marriage does not fall within the assets that a party can forfeit and a spouse cannot forfeit assets that he/she brought into the joint estate. Forfeiture may be either wholly or partially in favour of a party. In order to determine whether to grant a forfeiture order, the court will take into account:
The court’s discretion is restricted to the above criteria alone and no other factor may be taken into account when determining whether or not to grant a forfeiture order. In a reported judgment, the court granted a forfeiture order in favour of a husband where the parties had been married for 22 years and the wife had been away from the matrimonial home overnight on 73 evenings and had been intimate with other men.
A classic example of when a court may decide to grant a forfeiture order is when an 80-year-old man with an estate of R10 million marries a 20-year-old woman with an estate of zero who he met online, and it emerges after a month or two that she is a kleptomaniac who abused him physically before filing for divorce to gain half of his estate. In these circumstances, a court may find that the woman will unduly benefit if she receives half of his estate and may well grant a forfeiture in favour of the husband, based on the length of the marriage, the circumstances that lead to the breakdown, and the misconduct.
When spouses are married in community of property, their assets are tied up in the joint estate and, when a court grants a decree of divorce, the assets must be divided. Where the spouses agree on a division of the joint estate, a settlement agreement may be drafted to be incorporated in the decree of divorce and made an order of the court. Where spouses do not reach an agreement on how to divide their joint estate (as often happens), the court has the power to appoint a receiver or liquidator to realise and divide the assets of the joint estate on its behalf.
In exercising its discretion to appoint a liquidator, the court will look at various factors such as the size, nature and value of the joint estate. The liquidator’s fees are then paid from the joint estate.
There is always a risk that one spouse in a marriage in community of property may jeopardise the other spouse’s interest in the joint estate pending divorce. Our law protects the one spouse against the reckless or intentional behaviour of the other spouse during divorce proceedings. An example would be where a spouse sells a car worth R300 000 for R50 000 without the consent of the other spouse. Such a transaction will be to the detriment of the communal estate. In such a case, upon division of the joint estate at divorce, the so-called innocent spouse will have a claim for half the damages, i.e. R125 000, sustained by the joint estate and the court will normally make an adjustment when the estate is divided.
Where one spouse is acting in a negligent or reckless manner and alienates assets of the joint estate pending divorce, the other spouse may lodge an application to the court to suspend his/her spouse’s capacity over the joint estate. When the court grants such an order, the spouse who brought the application may then control the estate without the other’s consent.
- the duration of the marriage;
- the circumstances leading up to the breakdown; and
- if applicable, any substantial misconduct by one or both of the parties.
The court’s discretion is restricted to the above criteria alone and no other factor may be taken into account when determining whether or not to grant a forfeiture order. In a reported judgment, the court granted a forfeiture order in favour of a husband where the parties had been married for 22 years and the wife had been away from the matrimonial home overnight on 73 evenings and had been intimate with other men.
A classic example of when a court may decide to grant a forfeiture order is when an 80-year-old man with an estate of R10 million marries a 20-year-old woman with an estate of zero who he met online, and it emerges after a month or two that she is a kleptomaniac who abused him physically before filing for divorce to gain half of his estate. In these circumstances, a court may find that the woman will unduly benefit if she receives half of his estate and may well grant a forfeiture in favour of the husband, based on the length of the marriage, the circumstances that lead to the breakdown, and the misconduct.
When spouses are married in community of property, their assets are tied up in the joint estate and, when a court grants a decree of divorce, the assets must be divided. Where the spouses agree on a division of the joint estate, a settlement agreement may be drafted to be incorporated in the decree of divorce and made an order of the court. Where spouses do not reach an agreement on how to divide their joint estate (as often happens), the court has the power to appoint a receiver or liquidator to realise and divide the assets of the joint estate on its behalf.
In exercising its discretion to appoint a liquidator, the court will look at various factors such as the size, nature and value of the joint estate. The liquidator’s fees are then paid from the joint estate.
There is always a risk that one spouse in a marriage in community of property may jeopardise the other spouse’s interest in the joint estate pending divorce. Our law protects the one spouse against the reckless or intentional behaviour of the other spouse during divorce proceedings. An example would be where a spouse sells a car worth R300 000 for R50 000 without the consent of the other spouse. Such a transaction will be to the detriment of the communal estate. In such a case, upon division of the joint estate at divorce, the so-called innocent spouse will have a claim for half the damages, i.e. R125 000, sustained by the joint estate and the court will normally make an adjustment when the estate is divided.
Where one spouse is acting in a negligent or reckless manner and alienates assets of the joint estate pending divorce, the other spouse may lodge an application to the court to suspend his/her spouse’s capacity over the joint estate. When the court grants such an order, the spouse who brought the application may then control the estate without the other’s consent.