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The North Gauteng High Court handed down a ground-breaking judgment on the 11th of May 2022 in the case of Greyling v Minister of Home Affairs and others[1].l. The judgment essentially declared section 7(3)(a) of the Divorce Act[2] (“Divorce Act”) to be unconstitutional to the extent that it limits the application of section 7(3)(a) of marriages concluded out of community of property without the accrual entered into before the commencement of the Matrimonial Property Act ( “ MPA”)[3]. Although the High Court has the authority to declare an Act or part thereof unconstitutional, their authority is subject to section 172 of the Constitution of the Republic of South Africa (“the Constitution”)[4], which provides the Constitutional Court with the authority to make the final decision pertaining to any order of invalidity made by the High Court or a court of similar status, before that order has any force and effect.
The enactment of the MPA in the year 1984 introduced the concept of an accrual system. This concept allows spouses to have their own assets and liabilities, however when the marriage dissolves by way of death or divorce, the spouse whose estate shows no growth or a smaller growth in comparison to the other spouse, is entitled to claim half of the difference between the growths of the two estates[5]. Prior to 1984, South Africa only had two marriage regimes namely, in community of property and out of community of property with the exclusion of the accrual.
Section 7(3)(a) of the Divorce Act was declared to be inconsistent with the Constitution as it incorporated a cut-off date for an application of those who are economically disadvantaged parties who were married after 1 November 1984, as such parties could not approach the court to make an order that is just and equitable pertaining to the distribution of assets. The economically disadvantaged parties mostly refer to women who entered into their marriage out of community of property without being informed on the consequences thereof, specifically for those women who raised children and did not generate their own income but contributed to the spouse’s estate in a direct or indirect manner. The section exclusively makes provision for those who were married out of community of property prior to the enactment of the MPA, alternatively prior to 1 November 1984.
The inclusion of the words “entered into before the commencement of the MPA” in 1984 was declared inconsistent with the constitution as it excluded recourse for the spouses married after 1984. The section ultimately grants a court the authority to interfere with a private relationship to avoid injustice relating to marriages concluded out of community of property with the exclusion of the accrual (as it is highly likely that the parties that entered into said marriage regime prior to the enactment of the MPA were unaware that they could change their regime to include the accrual system). Section 7(3)(a) of the Act is subjected to the requirements set out in section 7(4) of the Act, namely that the party in whose favour the order is granted must have contributed directly or indirectly to the maintenance or increase of the estate of the other party during the existence of the marriage. In short, the judgment essentially wants Parliament to remove the exclusionary time-bar in section 7(3)(a) of the Act with the justification that the time-bar excludes parties married after 1984 to apply for recourse by way of an application to court for the redistribution of their assets.
A few concerns pertaining to this order is the fact that such judgment ultimately interfered with the principle of freedom of contract and pacta sunt servanda, which translates to an “agreement that must be kept”, giving the Court discretion to make such binding contractual agreements null and void will most likely become a costly and time consuming litigation process, and might create legal uncertainty as each application would have to be considered on the circumstances of each case regardless of the contract that both signed and wilfully entered into. The applicant would have to prove to the Court that he or she deserves or has a right to the other spouse’s estate as he or she contributed to the estate in an indirect or direct manner. Thus, meaning that the application for a redistribution agreement will not have an automatic effect, the court will have to declare the order valid and binding.
The judgment is not the first to consider the injustice that might stem from contractual agreements pertaining to Antenuptial Contracts concluded out of community of property with the exclusion of the accrual. Discretion was expanded in the matter of President RSA v Women’s Legal Centre Trust 2021[6], where the Supreme Court of Appeal ordered that section 7(3) of the Act was inconsistent with sections 9, 10 and 34 of the Constitution, because it fails to provide for the redistribution of assets at the dissolution of a Muslim marriage. The declaration of unconstitutionality is still subjected to Parliament’s discretion to change the wording; however, it is an example of another category of marriages to which it is ordered that judicial discretion must be applied regardless of the dates of the marriage.
The judgment handed down in the Greyling-case is indicative of the transformation South Africa strives to implement that correlates with the “equity-based approach” implemented in many countries, one of which is the United Kingdom (“UK”). The UK’s starting point for dividing attests in divorce is 50/50, however the financial settlement will differ in each case depending on the parties[7]. In the UK, matrimonial assets or property is property that has been built up during the marriage, excluding inheritance or gifts and is described collectively as the financial product of the parties. The court has the power to order a lump sum payment or other financial payment such as periodical payments which is sometimes referred to as spousal maintenance[8]. In terms of section 25(A) of the Matrimonial Causes Act[9] it states that the court has a duty to consider (to a just and reasonable end) if it would be appropriate that these financial obligations each party has towards the other would be terminated at the time of the decree of divorce; and where the court orders periodical payments in the beforementioned instance, it should be considered if these payments will be sufficient to enable the party in whose favour the order has been made to adjust these payments without undue hardship to the termination of his/her financial independence on the other party.
In terms of the Matrimonial Causes Act of 1973 and the Civil Partnership Act 2004, the Court/s need to take the following issues into consideration when using their discretion to divide assets[10]:
- the income earning capacity of the respective spouses;
- financial needs, obligations and responsibilities of both spouses (those they had during marriage and those they are likely to have in the foreseeable future);
- the standard of living enjoyed by both before the breakdown of the marriage;
- the age of each party and the duration of the marriage;
- any physical or mental disability of either of the spouses;
- the contributions of each party, which would be unfair to disregard;
- any benefit such as a pension that would by dissolution of the marriage be the result of one party losing the chance of acquiring said benefit.
The above-mentioned requirements would most likely also have to be considered in South Africa if the order given in the Greyling-case is declared valid by the Constitutional Court, after considering the unique circumstances of each case.
In conclusion, although the Constitutional Court must make the final decision on the order given in the Greyling-case, it is important for people to make informative decisions, not only for the interim period but in general when entering into binding contracts such as an antenuptial contract. Not only is it important to be aware of your rights provided for in legislation, but it is also important to be aware of the transformative values embedded in the Constitution and the effect that it could have on your rights and subsequently legislation. In this era, change is inescapable and the possibility of evolving legislation must be kept in mind. Ensure that you make an informative decision when choosing a marriage regime, in order to avoid lengthy and costly legal procedures to rectify same in the future, ultimately leaving your fate in the Court’s discretion. Irrespective of the Constitutional Court’s ruling on the order made in the Greyling-case, it will be to your benefit to conclude an antenuptial contract that reflect and protect both spouse’s possible interests and needs for the unforeseeable future.
[1] Greyling v Minister of Home Affairs and Others 940023/21) [2022].
[2] Greyling v Minister of Home Affairs and Others 940023/21) [2022].
[3] The Matrimonial Property Act 88 of 1984.
[4] The Constitution of the Republic of South Africa, 1996.
[5] Section 3(1) of the Matrimonial Property Act 88 of 1984.
[6] Women’s Legal Centre Trust v President of the Republic of South Africa and Others (CCT 24/21) [2022] ZACC 23 (28 June 2022).
[7] British Law: How To Divide Assets in a UK Divorce – Simple (But Complete) Guide – https://bevanevemy.co.uk/how-to-divide-assets-in-a-uk-divorce/
[8] British Law: How To Divide Assets in a UK Divorce – Simple (But Complete) Guide – https://bevanevemy.co.uk/how-to-divide-assets-in-a-uk-divorce/.
[9] The Matrimonial Causes Act of 1973.
[10] British Law: How To Divide Assets in a UK Divorce – Simple (But Complete) Guide – https://bevanevemy.co.uk/how-to-divide-assets-in-a-uk-divorce/
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