New court judgement has massive implications for marriages and divorces in South Africa.
As Family and Divorce Law attorneys we have had countless cases wherein the woman got an unfair deal simply because she married out of community of property, without the accrual. Many women who have been homemakers are stuck in unhappy or abusive marriages simply because they realise that they will walk away with nothing when they divorce. In these kinds of divorces women are not properly compensated, and they are usually deprived from any "return" for investing in and raising the children and allowing the husband to amass a lucrative estate. To put it bluntly, they get a raw deal.
The Matrimonial Regimes
In South Africa the primary matrimonial property system has always been, and still is, in community of property. If the spouses fail to elect their matrimonial property system before they enter into a marriage, the default matrimonial property system applicable to their marriage is in community of property. Our current default property system derives from the Roman-Dutch concept of universal community of property.
Prior to 1984 there were only two regimes:
After 1984:
The Matrimonial Property Act, 88 of 1984 (MPA) was enacted on 1 November 1984 and introduced the so-called “accrual system” and spouses have a choice to either exclude or include the accrual system. Anyone entering into an ANC that excludes community of property and community of profit and loss is automatically married under the accrual system. Spouses as stated above may, however, exclude the accrual system in their ANC, but if they do not do so expressly, the accrual applies. When the accrual is included, a spouse will be entitled to share in the growth of the two estates at divorce. Therefore, since the commencement of the MPA intending spouses can now choose between three matrimonial property systems:
When Parliament enacted the MPA it also had to introduce a new judicial discretion to redistribute assets in marriages out of community of property entered into before 1 November 1984 at the same time as creating the accrual system as the default marriage out of community of property.
Section 7 (3)(a) of the Divorce Act 70 of 1979
A new section 7(3)(a) was introduced into the Divorce Act 70 of 1979 (the “Divorce Act”) to give judges in divorce cases a discretion to distribute the assets of the spouses in marriages out of community of property which had been concluded before 1 November 1984, when the accrual regime did not exist. Section 7(3)(a) of the Divorce Act reads:
“(3) A court granting a decree of divorce in respect of a marriage out of community of property--
(a) 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… 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”.
Thus, where spouses were married out of community of property before 1 November 1984 and divorce thereafter a judge applies his discretion to redistribute the assets by awarding each party a percentage of the assets, based on certain factors.
Parliament’s aim in introducing such a judicial discretion at the time was to make it possible for spouses who did not previously have the option of accrual to ease their position through the reallocation of assets by the court. The provision was only intended to be an outlet valve to ease the unfairness in current marriages that had been made subject to the rigid predetermined matrimonial property systems. The discretion was for that reason only available for those spouses married out of community of property prior to the commencement date of the legislation, on 1 November 1984.
Discretion Expanded
The judicial discretion was expanded to civil marriages out of community of property carried out in terms of the Transkei Marriage Act 21 of 1978, from commencement of the Recognition of Customary Marriages Act to 2000 when the Transkei Marriage Act was repealed. As a result of the case of Holomisa v Holomisa 2019 (2) BCLR 247 (CC) a further type of marriage was added in the discretion to redistribute assets under section 7(3)(c) of the Divorce Act. They are marriages “…entered into in terms of any law applicable in a former homeland, without entering into an antenuptial contract or agreement in terms of such law”. The discretion was exercised if it was equitable and just by reason of the fact that the party in whose favour the order was granted, 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.
In the matter of Gumede v President of the Republic of South Africa 2009 (3) SA 152 (CC), the Constitutional Court introduced an additional judicial discretion which pertains to customary marriages regardless of the date on which they were concluded and regardless of the matrimonial property system in place: “…every divorce court granting a divorce decree relating to a customary marriage has the power to order how the assets of the customary marriage should be divided between the parties, regard being had to what is just and equitable in relation to the facts of each particular case”.
Finally in the matter of President, RSA v Women’s Legal Centre Trust 2021 (2) SA 381 (SCA), the Supreme Court of Appeal ordered that:
“Section 7(3) of the Divorce Act is inconsistent with sections 9, 10 and 34 of the Constitution insofar as it fails to provide for the redistribution of assets, on the dissolution of a Muslim marriage, when such redistribution would be just”.
Even though the declaration of unconstitutionality was suspended for a period of two years to allow Parliament to adopt legislation to cure the constitutional defect, this created yet another category of marriages to which the judicial discretion applied, regardless of the dates of the marriages.
Indeed, there are therefore numerous different dates which determine if the discretion in section 7(3) would be available to a marriage out of community of property and few bear any relation to the original purpose of the legislature. One may argue that these different rules pertaining to the availability of the discretion can be said to discriminate on the basis of marital status, race and religion.
EB (born S) v ER (born B) and Others; KG v Minister of Home Affairs and Others [2023] ZACC 32
The recent judgement by the Constitutional Court of South Africa regarding section 7(3) of the Divorce Act has brought significant changes to the legal landscape surrounding marriages concluded out of community of property without accrual. This judgement has far-reaching implications for asset redistribution, dissolution of marriage by death, and the overall concept of fairness and equality in divorce proceedings. In this comprehensive guide, we will delve into the details of the judgement, its effects on marriages, and the future implications for spouses seeking asset redistribution and equal treatment.
Background: Section 7(3) of the Divorce Act Section 7(3) of the Divorce Act, which was declared inconsistent with the Constitution by the Constitutional Court, previously allowed spouses married out of community of property before 1984 to apply for a redistribution of assets, even though their marital regime was out of community of property. This provision excluded spouses married after 1984 from seeking asset redistribution, creating an imbalance in equal opportunity.
The Constitutional Challenge
The first case, known as CCT 364/21, brought by Mrs. B, challenged the Divorce Act's applicability only to marriages ending in divorce, excluding those dissolved by death. Mrs. B argued that this differentiation was unfair discrimination, particularly against spouses married before November 1, 1984, who were not covered by the accrual system. The High Court agreed and declared section 7(3) unconstitutional. The case was then referred to the Constitutional Court for confirmation.
In the second case, CCT 158/22, Mrs. G challenged the limitation of asset redistribution based on the marriage date. The High Court found the limitation to be rationally connected to a legitimate government purpose but discriminatory and unfair. The Constitutional Court found the differentiation rational but constituting indirect gender discrimination.
Implications for Marriages Concluded After 1 November 1984 The Constitutional Court's judgement has significant implications for marriages concluded after November 1, 1984, which were previously not entitled to any form of asset redistribution upon divorce. The following are the key effects of the judgement on these marriages:
1. Asset Redistribution
The judgement opens the door for asset redistribution upon divorce for marriages concluded after 1 November 1984. This means that a spouse who has contributed, either directly or indirectly, to the increase of the other spouse's estate may now have a claim for a share of those assets. Previously, spouses in these marriages were generally not entitled to any form of asset redistribution upon divorce. This change introduces a new layer of financial considerations for couples contemplating divorce.
2. Interim Measures
Pending legislative amendments, the Court has provided interim measures that effectively extend the scope of subsection 7(3) of the Divorce Act to include marriages concluded after 1 November 1984. This allows for immediate relief and enables courts to order asset redistribution based on what is deemed "just and equitable." Spouses in such marriages can now seek relief through the courts for asset redistribution, providing immediate remedies for those in the process of divorce proceedings or contemplating divorce.
3. Choice and Fairness
The Court addressed the issue of "choice" in entering into marital contracts and emphasized that choices are not always freely made. Various factors such as social pressures, power imbalances, and lack of access to legal advice can influence marital contracts. The Court highlighted that the mere availability of the accrual system at the time of marriage was not a sufficient justification for the existing discrimination. This recognition of the complexities surrounding marital choices and the importance of fairness and equality is a significant step forward.
4. Legal Certainty
While the judgement introduces an element of uncertainty for couples who planned their financial futures based on the previous legal framework, it also brings the law more in line with principles of fairness and gender equality. The Court dismissed arguments that this would create undue uncertainty, noting that similar provisions already exist for other types of marriages, and that the principles of "just and equitable" distribution provide sufficient guidance for courts.
5. International Law Recommendations
The Court referenced South Africa's international law obligations, particularly those related to gender equality, adding another layer of complexity and urgency to the legislative amendments that need to be made. The alignment with international standards further strengthens the case for equality and fairness in asset redistribution.
6. Timeframe for Legislative Action
The Court has given Parliament a 24-month window to amend the relevant laws. This puts pressure on legislative bodies to act promptly to rectify the constitutional defects identified by the Court. Until such amendments are made, the interim measures will apply, providing immediate but potentially temporary relief for affected parties.
Conclusion The Constitutional Court's judgement on section 7(3) of the Divorce Act marks a significant milestone in the pursuit of fairness and equality in divorce proceedings. The judgement ensures that spouses married out of community of property without accrual after November 1, 1984, now have the opportunity to seek asset redistribution upon divorce. This decision brings South African family law closer to constitutional and international standards, emphasizing the principles of fairness, gender equality, and human dignity.
As legislative bodies work towards amending the relevant laws, spouses in these marriages can take immediate action by seeking relief through the courts. It is crucial for couples contemplating divorce or going through divorce proceedings to understand the implications of this judgement and consult with legal professionals to navigate the new legal framework.
The Constitutional Court's judgement sends a clear message that South African law is evolving to better serve the interests and protect the rights of all citizens. It highlights the importance of fairness, equality, and the need to address historical imbalances in marital laws. The journey towards a more just and equitable society continues, and this judgement represents a significant stride in that direction.
Written by Bertus Preller, Family Law and Divorce Law Attorney at Maurice Phillips Wisenberg, Cape Town South Africa
The Matrimonial Regimes
In South Africa the primary matrimonial property system has always been, and still is, in community of property. If the spouses fail to elect their matrimonial property system before they enter into a marriage, the default matrimonial property system applicable to their marriage is in community of property. Our current default property system derives from the Roman-Dutch concept of universal community of property.
Prior to 1984 there were only two regimes:
- In community of property - In this form of marriage, the spouses’ estates (what they own/assets and any debt/liabilities) are joined together, in a joint estate, and each had the right of disposal over the assets; they were equal concurrent managers of the joint estate. Each had an undivided or indivisible half share of the joint or communal estate. Upon divorce the net combined estate of the spouse were divided equally, unless one of the parties claimed a forfeiture.
- Out of community of property - This matrimonial property regime involved an antenuptial contract (ANC), (i.e., an agreement entered into before a Notary and signed before the marriage) where community of property and profit and loss were excluded. There was no joining of the spouses’ estates into one joint estate. Each spouse had his/her own separate estate, consisting of his/her premarital assets and debts, and all the assets and debts he/she acquired during the marriage. They each administered their own separate estates and had full and exclusive control over their own property. Upon divorce, the courts exercised a discretion on what a fair and reasonable distribution would be.
After 1984:
The Matrimonial Property Act, 88 of 1984 (MPA) was enacted on 1 November 1984 and introduced the so-called “accrual system” and spouses have a choice to either exclude or include the accrual system. Anyone entering into an ANC that excludes community of property and community of profit and loss is automatically married under the accrual system. Spouses as stated above may, however, exclude the accrual system in their ANC, but if they do not do so expressly, the accrual applies. When the accrual is included, a spouse will be entitled to share in the growth of the two estates at divorce. Therefore, since the commencement of the MPA intending spouses can now choose between three matrimonial property systems:
- in community of property;
- marriage out of community of property with the exclusion of the accrual system; and
- marriage out of community of property with the accrual system.
When Parliament enacted the MPA it also had to introduce a new judicial discretion to redistribute assets in marriages out of community of property entered into before 1 November 1984 at the same time as creating the accrual system as the default marriage out of community of property.
Section 7 (3)(a) of the Divorce Act 70 of 1979
A new section 7(3)(a) was introduced into the Divorce Act 70 of 1979 (the “Divorce Act”) to give judges in divorce cases a discretion to distribute the assets of the spouses in marriages out of community of property which had been concluded before 1 November 1984, when the accrual regime did not exist. Section 7(3)(a) of the Divorce Act reads:
“(3) A court granting a decree of divorce in respect of a marriage out of community of property--
(a) 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… 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”.
Thus, where spouses were married out of community of property before 1 November 1984 and divorce thereafter a judge applies his discretion to redistribute the assets by awarding each party a percentage of the assets, based on certain factors.
Parliament’s aim in introducing such a judicial discretion at the time was to make it possible for spouses who did not previously have the option of accrual to ease their position through the reallocation of assets by the court. The provision was only intended to be an outlet valve to ease the unfairness in current marriages that had been made subject to the rigid predetermined matrimonial property systems. The discretion was for that reason only available for those spouses married out of community of property prior to the commencement date of the legislation, on 1 November 1984.
Discretion Expanded
The judicial discretion was expanded to civil marriages out of community of property carried out in terms of the Transkei Marriage Act 21 of 1978, from commencement of the Recognition of Customary Marriages Act to 2000 when the Transkei Marriage Act was repealed. As a result of the case of Holomisa v Holomisa 2019 (2) BCLR 247 (CC) a further type of marriage was added in the discretion to redistribute assets under section 7(3)(c) of the Divorce Act. They are marriages “…entered into in terms of any law applicable in a former homeland, without entering into an antenuptial contract or agreement in terms of such law”. The discretion was exercised if it was equitable and just by reason of the fact that the party in whose favour the order was granted, 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.
In the matter of Gumede v President of the Republic of South Africa 2009 (3) SA 152 (CC), the Constitutional Court introduced an additional judicial discretion which pertains to customary marriages regardless of the date on which they were concluded and regardless of the matrimonial property system in place: “…every divorce court granting a divorce decree relating to a customary marriage has the power to order how the assets of the customary marriage should be divided between the parties, regard being had to what is just and equitable in relation to the facts of each particular case”.
Finally in the matter of President, RSA v Women’s Legal Centre Trust 2021 (2) SA 381 (SCA), the Supreme Court of Appeal ordered that:
“Section 7(3) of the Divorce Act is inconsistent with sections 9, 10 and 34 of the Constitution insofar as it fails to provide for the redistribution of assets, on the dissolution of a Muslim marriage, when such redistribution would be just”.
Even though the declaration of unconstitutionality was suspended for a period of two years to allow Parliament to adopt legislation to cure the constitutional defect, this created yet another category of marriages to which the judicial discretion applied, regardless of the dates of the marriages.
Indeed, there are therefore numerous different dates which determine if the discretion in section 7(3) would be available to a marriage out of community of property and few bear any relation to the original purpose of the legislature. One may argue that these different rules pertaining to the availability of the discretion can be said to discriminate on the basis of marital status, race and religion.
EB (born S) v ER (born B) and Others; KG v Minister of Home Affairs and Others [2023] ZACC 32
The recent judgement by the Constitutional Court of South Africa regarding section 7(3) of the Divorce Act has brought significant changes to the legal landscape surrounding marriages concluded out of community of property without accrual. This judgement has far-reaching implications for asset redistribution, dissolution of marriage by death, and the overall concept of fairness and equality in divorce proceedings. In this comprehensive guide, we will delve into the details of the judgement, its effects on marriages, and the future implications for spouses seeking asset redistribution and equal treatment.
Background: Section 7(3) of the Divorce Act Section 7(3) of the Divorce Act, which was declared inconsistent with the Constitution by the Constitutional Court, previously allowed spouses married out of community of property before 1984 to apply for a redistribution of assets, even though their marital regime was out of community of property. This provision excluded spouses married after 1984 from seeking asset redistribution, creating an imbalance in equal opportunity.
The Constitutional Challenge
The first case, known as CCT 364/21, brought by Mrs. B, challenged the Divorce Act's applicability only to marriages ending in divorce, excluding those dissolved by death. Mrs. B argued that this differentiation was unfair discrimination, particularly against spouses married before November 1, 1984, who were not covered by the accrual system. The High Court agreed and declared section 7(3) unconstitutional. The case was then referred to the Constitutional Court for confirmation.
In the second case, CCT 158/22, Mrs. G challenged the limitation of asset redistribution based on the marriage date. The High Court found the limitation to be rationally connected to a legitimate government purpose but discriminatory and unfair. The Constitutional Court found the differentiation rational but constituting indirect gender discrimination.
Implications for Marriages Concluded After 1 November 1984 The Constitutional Court's judgement has significant implications for marriages concluded after November 1, 1984, which were previously not entitled to any form of asset redistribution upon divorce. The following are the key effects of the judgement on these marriages:
1. Asset Redistribution
The judgement opens the door for asset redistribution upon divorce for marriages concluded after 1 November 1984. This means that a spouse who has contributed, either directly or indirectly, to the increase of the other spouse's estate may now have a claim for a share of those assets. Previously, spouses in these marriages were generally not entitled to any form of asset redistribution upon divorce. This change introduces a new layer of financial considerations for couples contemplating divorce.
2. Interim Measures
Pending legislative amendments, the Court has provided interim measures that effectively extend the scope of subsection 7(3) of the Divorce Act to include marriages concluded after 1 November 1984. This allows for immediate relief and enables courts to order asset redistribution based on what is deemed "just and equitable." Spouses in such marriages can now seek relief through the courts for asset redistribution, providing immediate remedies for those in the process of divorce proceedings or contemplating divorce.
3. Choice and Fairness
The Court addressed the issue of "choice" in entering into marital contracts and emphasized that choices are not always freely made. Various factors such as social pressures, power imbalances, and lack of access to legal advice can influence marital contracts. The Court highlighted that the mere availability of the accrual system at the time of marriage was not a sufficient justification for the existing discrimination. This recognition of the complexities surrounding marital choices and the importance of fairness and equality is a significant step forward.
4. Legal Certainty
While the judgement introduces an element of uncertainty for couples who planned their financial futures based on the previous legal framework, it also brings the law more in line with principles of fairness and gender equality. The Court dismissed arguments that this would create undue uncertainty, noting that similar provisions already exist for other types of marriages, and that the principles of "just and equitable" distribution provide sufficient guidance for courts.
5. International Law Recommendations
The Court referenced South Africa's international law obligations, particularly those related to gender equality, adding another layer of complexity and urgency to the legislative amendments that need to be made. The alignment with international standards further strengthens the case for equality and fairness in asset redistribution.
6. Timeframe for Legislative Action
The Court has given Parliament a 24-month window to amend the relevant laws. This puts pressure on legislative bodies to act promptly to rectify the constitutional defects identified by the Court. Until such amendments are made, the interim measures will apply, providing immediate but potentially temporary relief for affected parties.
Conclusion The Constitutional Court's judgement on section 7(3) of the Divorce Act marks a significant milestone in the pursuit of fairness and equality in divorce proceedings. The judgement ensures that spouses married out of community of property without accrual after November 1, 1984, now have the opportunity to seek asset redistribution upon divorce. This decision brings South African family law closer to constitutional and international standards, emphasizing the principles of fairness, gender equality, and human dignity.
As legislative bodies work towards amending the relevant laws, spouses in these marriages can take immediate action by seeking relief through the courts. It is crucial for couples contemplating divorce or going through divorce proceedings to understand the implications of this judgement and consult with legal professionals to navigate the new legal framework.
The Constitutional Court's judgement sends a clear message that South African law is evolving to better serve the interests and protect the rights of all citizens. It highlights the importance of fairness, equality, and the need to address historical imbalances in marital laws. The journey towards a more just and equitable society continues, and this judgement represents a significant stride in that direction.
Written by Bertus Preller, Family Law and Divorce Law Attorney at Maurice Phillips Wisenberg, Cape Town South Africa