Marriage is one of the greatest joys in life, however, it is a sad inevitability that every marriage comes to an end, either through the death of a spouse or through divorce. Upon the dissolution of a marriage, the property of the spouses in the marriage are distributed according to the marital property regime of the marriage.
Prior to 1984 in South Africa, marriages were entered into either in community of property, or out of community of property. The Marital Property Act 88 of 1984 came into effect on 1 November 1984 and established three marital property regimes that exist in South Africa, namely;
In community of property; which is the default marital property regime in South Africa, wherein the property of each spouse forms part of the joint marital estate, which is distributed evenly amongst the spouses upon the dissolution of the marriage;
Out of community of property; a marital property regime, in terms of which the assets that each spouse brings into the marriage and accumulates during the subsistence of the marriage remain their own and are retained by each spouse upon the dissolution of the marriage; and
Out of community of property with the inclusion of the accrual system; wherein each spouse retains the assets owned by them at the commencement of the marriage, but the assets that the spouses accumulated during the subsistence of the marriage are distributed evenly amongst the spouses, upon the dissolution of the marriage.
The commencement of the Marital Property Act abolished a common law rule that gave a husband marital power over the person and property of his wife. This common law rule was seen as inherently unfair towards women. The Divorce Act 70 of 1979 (“Divorce Act”) was, therefore, amended in order to grant relief to spouses who were married out of community of property, with the exclusion of the accrual system, before the commencement of the Marital Property Act.
Section 7(3)(a) of the Divorce Act provides that upon granting a decree of divorce in respect of a marriage entered into before the commencement of the Marital Property Act, out of community of property, with the exclusion of the accrual system, a court may upon application by one of the parties to the marriage, order that a spouse’s assets be transferred to the other spouse, where the court deems it just.
This provision gave the court the power to hand down a redistribution order, stipulating that the assets of one spouse be transferred to the other spouse. This provision would ordinarily apply to women who did not accumulate substantial financial gains during the subsistence of the marriage, as they were primarily engaged with household work and caregiving. This provision allowed a court to order the transfer of the husband’s assets to the wife, to the financial value that represented the wife’s contribution to the marriage. It provided relief to women who had no say in property regime that governed their marriage, in terms of the above-mentioned common law rule. However, this provision only applied to marriages entered into out of community of property, with the exclusion of the accrual, before the commencement of the Marital Property Act.
In Greyling v Minister of Home Affairs and Others [2022] ZAGPPHC 3, an application was brought before the Court seeking to declare Section 7(3)(a) of the Divorce Act as unconstitutional. The applicant, Mrs Greyling married her husband out of community of property, excluding the accrual system, in March 1988. The court was tasked with determining whether it is unconstitutional to deprive spouses who were married, out of community of property, with the exclusion of the accrual, after 1 November 1984, from being entitled to relief in terms of section 7(3) of the Divorce Act.
The court ordered that Section 7(3)(a) of the Divorce Act be declared inconsistent with the Constitution and invalid to the extent that it limits the relief afforded by the Section, to marriages entered into before the commencement of the Marital Property Act. The court ordered that the words ‘entered into before the commencement of the Marital Property Act, 1984’ be notionally severed from Section 7(3)(a) of the Divorce Act. The court’s order is now referred to the Constitutional Court for confirmation.
The effect of this order, should it be confirmed by the Constitutional Court, would be that a court may, upon granting a decree of divorce, order the redistribution of assets upon application by a party to the marriage. This means that even if a marriage is entered into out of community of property with the exclusion of the accrual system, upon the dissolution of a marriage, a court may still order the assets of one spouse to be transferred to the other spouse, if the court deems it to be just. The court will only make such an order in the absence of a settlement agreement between the parties.
A settlement agreement regarding the redistribution of assets between the parties minimizes the costs that may be incurred by both parties and negates the uncertainty of leaving the redistribution of assets in the hands of a court.
It is advisable to enlist the services of an attorney when seeking to enter into such a settlement agreement.
Naudé Dawson Inc are well-equipped to guide you through the divorce process and assist you in reaching a settlement agreement with your spouse. Should you require our assistance, please email us at xander@ndinc.co.za or at trevor@ndinc.co.za.
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