He loves me not – and what was it worth?
Alick Costa of Werksmans Inc, Johannesburg attorneys.

Alick Costa argues that sexist and demeaning attitudes still prevail against women when redistributing assets of a failed marriage.

Section 7(3) of the Divorce Act 70 of 1979 (the Act) empowers a court granting a decree of divorce in respect of a marriage out of community of property entered into before 1 November 1984 in terms of an antenuptial contract by which community of property, community of profit and loss and accrual sharing are excluded to order, subject to subss (4), (5) and (6) a redistribution of assets between the parties as the court may deem just.

Section 7(4) provides that an order in terms of subs (3) shall not be granted unless the court is satisfied that it is equitable and just by reason of the fact that the party in whose favour the order is granted contributed to the maintenance or increase of the estate of the other party during the subsistence of the marriage. Section 7(5) provides that in the determination of the assets to be transferred as contemplated in subs (3), the court shall apart from contributions made by the party concerned also take into account, inter alia, the existing means and obligations of the parties.

Section 7(3) is an enlightened piece of social legislation introduced with retrospective effect to alleviate the iniquitous and unfair consequences of the antenuptial contract on termination of the marriage by divorce. Simply put, it was introduced to redress the financial imbalance invariably suffered by the wife on termination of the marriage by divorce. Thus, the court is enjoined to applyjustice and equity in the exercise of its wide judicial discretion in coming to the assistance of the financially disadvantaged spouse.

Section 7(3) is only applicable to marriages by antenuptial contract ‘entered into before the commencement of the Matrimonial Property Act 88 of 1984’, that is before 1 November 1984. In my view this arbitrary provision is unconstitutional and of no force or effect to the extent of its inconsistency with s 9(1) and/or s 34 of the Constitution, but that is a matter for debate on another occasion. Thus, of necessity s 7(3) cases apply to a different era. It was an era prior to the introduction of our new Constitution and prior to the socio-economic emancipation of women. It was an era in which women were subjected to gender discrimination both in the home environment and the workplace and in which the homemaker was subjected to domestic enshacklement, disempowerment and financial bondage. We have come a long way, but we must guard against complacency because unfortunately gender prejudice is still rife. It follows that although the legislation is not sexist, with a few exceptions, cases involving s 7(3) in the past and in the future will involve the wife as the economically disadvantaged party seeking equitable and just relief from the husband.

Leading cases

Of necessity, the application of s 7(3) has been a fertile field of litigation because of the wide discretion afforded to the court based upon justice and equity. Fairness – like beauty – is in the eye of the beholder.

Beaumont v Beaumont 1987(1) SA 967(A)

The marriage in this case took place on 30 May 1964. There were four children born of the marriage. The court held that there was no starting point in a given percentage for the purposes of a redistribution order. The court made a s 7(3) order in terms of which the plaintiff was obliged to pay the wife R150 000 representing one-third of the combined net assets of the parties, in addition to which he was ordered to pay the wife maintenance.

Katz v Katz 1989 (3) SA 171 (A)

The marriage took place on 9 February 1964. Three children were born of the marriage. The court found that the husband’s net estate was approximately R7,5 million and that of the wife of approximately R400 000, which included a house. The court made a clean break and ordered the husband to pay the wife R1,5 million. The court held that ‘[t]his order is intended, again so far as is practicable, to give the respondent financial security for the rest of her life.’ Thus, the court calculated the wife’s maintenance needs which it capitalised acting as a soothsayer based upon actuarial calculations, so that all things being equal, at the date of her death her estate should be depleted and she should have no assets to bequeath to her loved ones.

I submit that the court misdirected itself. Section 7(3) does not enjoin the court to capitalise the wife’s maintenance needs with a view to giving her lifetime financial security. The court had no regard to s 7(5) which enjoins the court to have regard to the respective means of the parties. Thus adopting the rationale of the court, it would have ordered the husband to pay his wife R1,5 million even if it was found that his net estate was say R50 million. The order was not just. Although the court was at pains to stress that it was not laying down any principle nor even a general guide, theKatz judgment was followed for too many years.

Bezuidenhout v Bezuidenhout [2004] 4 All SA 487 (SCA)

The salient facts and findings are briefly as follows: The parties were married to each other on 25 October 1975. One child was born of the marriage. The combined net estates totalled R32 million. The major asset was the business of the husband in which both parties were involved. This was an appeal from a judgment by Pincus AJ in which he ordered an equal division of the net combined assets of the parties. It was a bold and enlightened break with past judgments. Pincus AJ followed the recent developments in English law which enunciated the laudable philosophies ‘the need to guard against gender discrimination’ and ‘that there must be an end to the sterile assertion that the breadwinner’s contribution weighs heavier than the housemaker’s’.

Dealing with the issue of the contributions of the spouses, Brand JA at 23 held, ‘I find myself in agreement with the thesis that the traditional role of housewife, mother and homemaker should not be undervalued because it is not measurable in terms of money’.

The court then, however, found that the respondent never assumed the traditional role. She was the financial director of the company and she spent almost all her time in the business. However, the court held that the respondent’s additional contribution as mother and homemaker must be afforded due weight. In dealing with the husband’s contributions, the court found that it was his contribution which caused the business to be exceptionally successful. The court accordingly found that Pincus AJ had misdirected himself in that his conclusion that the contributions of the parties were equal could not be justified. The court made an order which resulted in a division of the combined net assets of the parties in a split of 60:40% in favour of the husband.

The court reasoned that the legislature does not allow parties to treat all marriages upon divorce as if they were in community of property and without an antenuptial contract. However, in my view s 7(3) does not preclude in appropriate cases a redistribution order resulting in an equal division of the net combined assets of the parties. In the unreported decision of the Cape High Court inKirkland v Kirkland (case1669/2000, unreported; Motala J 10-10-2002) (referred to by Pincus AJ in his judgment), Motala J found that it would be just and equitable to order that 50% of the net combined assets of the parties be awarded to the defendant husband. On 10 June 2005 Blignault J delivered the judgment of the full bench of the Cape High Court on appeal which confirmed the findings of the trial court that the defendant husband (the appellant) had made the major contribution to the estates of both parties and that he had transferred the major portion thereof to his wife. The court upheld the decision of the trial court that one half of the combined net assets be awarded to the former husband, but because of different values placed on some of the assets, the court found that the wife owned approximately 82% of the combined assets totalling R14,7 million, the estate of the husband had a value of R2,7 million and accordingly ordered Mrs Kirkland to pay R4,6 million to Mr Kirkland to give effect to the equal division which resulted in Mrs Kirkland being obliged to pay an additional R1,7 million to that ordered by the trial court.

Davison v Davison (case 14786/01 unreported; Botha J 7-1-2005) (T)

The case was heard by Botha J who delivered the judgment in January 2005. The parties were married on 7 February 1970. The two children born of the marriage were self-supporting. The plaintiff became a successful businessman and the ‘bulk of the increase of his estate was a result of his exercise of his career options, his acumen, his investment decisions and rewards bestowed on him’.

‘The defendant was a devoted housewife and mother, a competent hostess and a presentable corporate wife, as a result of the plaintiff’s commitment to his career and his frequent absences from home, it was inevitable that she had to bear the brunt of parenting.’ In short, ‘she created the environment in which the plaintiff could allow his talents to flourish’. The defendant was not gainfully employed for the greater part of the marriage. The plaintiff’s net estate was in excess of R65 million. The defendant’s net estate amounted to approximately R3 million of which the major asset was the Sandton home. The plaintiff had tendered and paid R7 million in settlement of the defendant’s claim for maintenance.

Botha J commented that ‘[t]he question is whether the defendant should in this case be confined to a redistribution order that will only satisfy her need for maintenance’. The court found that there was no question that the defendant was entitled to maintenance in full. The court found that it would not be fair to the defendant to confine her to a redistribution order that only catered for maintenance. The court found that ‘without redressment by way of an additional tranche of assets, there would be an unfair imbalance between the plaintiff and the defendant’. Consequently, the court held ‘that the defendant is entitled to a redistribution order that is not confined to the amount required to provide her with an annuity’.

At 87 the court held that ‘before returning to the issue of the redistribution order I must go through the laborious exercise of quantifying defendant’s claim for maintenance, the maintenance must be established in a monthly sum and then be converted into a capitalised amount’. The court then found that the defendant’s reasonable needs amounted to R41 000 per month and having regard to the actuarial calculations that a capital amount of R7,5 million was required as capitalised maintenance. In addition to the aforesaid sum, the court was of the view that the plaintiff should be ordered to transfer a further sum of R4,7 million to the defendant in addition to the R7 million that had already been paid. ‘That would make her truly independent. It would free her from the fearful logic of the Duxbury formula. It would give her leeway in the planning of her financial affairs’ (112).

In essence, Botha J applied the reasoning in the Katz case by determining and capitalising the wife’s maintenance needs and adding an additional sum as a cushion to make the wife ‘truly independent’. What is the difference between giving a spouse ‘financial security for the rest of her life’ and making a spouse ‘truly independent’? It is submitted that the judgment of Botha J is in effect but an extension of the Katz principle by adopting the maintenance approach and ignoring the means of the plaintiff. As such, in my view the case is wrongly decided. It flies in the face of and is in conflict with the judgment in Bezuidenhout.

In Bezuidenhout the court – rightly in my view – did not concern itself with the wife’s maintenance needs. Maintenance was irrelevant in that case because the net asset value of the husband’s estate amounted to approximately R24 million. Likewise, maintenance was irrelevant in this case because of the court’s finding that the plaintiff’s net estate is in excess of R65 million. Section 7(2) of the Act stipulates factors to be taken into account in determining whether the court should make an order which it finds just in respect of the payment of maintenance by one party to the other. Thus, the court is enjoined to, inter alia, have regard to the existing or prospective means of each of the parties and ‘an order in terms of sub-section (3) …’.

Accordingly, s 7(2) of the Act is only triggered (if at all) having regard to and after the terms of a s 7(3) redistribution order is made.

The issue of maintenance in terms of s 7(2) arises only if a redistribution order in terms of s 7(3) is insufficient to provide for the reasonable maintenance needs of a spouse. Since the plaintiff’s net estate is in excess of R65 million, this case has nothing to do with maintenance. Not only was the exercise of determining the defendant’s reasonable living expenses ‘laborious’ in the words of the court, but it must have been time consuming, demeaning and humiliating for the defendant having to debate and justify items of expenditure including the cost of the cats, liquor, cigarettes, clothing, cosmetics and toiletries.

In the exercise of his judicial discretion, Botha J made an additional award of R4,7-million to the defendant and held that a larger additional transfer would not be fair to the plaintiff. Botha J found that the additional R4,7-million would make the defendant ‘truly independent’ and any amount in excess thereof would be unfair to the plaintiff. It is submitted that the approach adopted by Botha J was wrong and that the judge erred in holding that a larger amount would not be fair to the plaintiff.

The court appears to have lost sight of the fact that it is obliged to have regard, inter alia, to the means of the plaintiff and that the plaintiff’s estate was in excess of R65 million. Furthermore, Botha J did not deal with the issue of fairness to the defendant. It is submitted that the award made was unfair to the defendant. The amounts speak for themselves. In terms of the judgment, the plaintiff was left with a net estate in excess of R60 million equating to 80% of the combined net assets of the parties and the defendant’s net estate totalled R15 million. The disparity in the net estates of the parties and the financial imbalance is still stark, inequitable and unfair to the defendant. The inequity is heightened by the plaintiff being in highly remunerative employment and the defendant being unemployable.

I submit that Botha J was bound by and obliged to follow the judgment in Bezuidenhout case which he failed to do. There was no good reason in law, logic, equity or justice why Botha J did not order a 60:40% split in favour of the husband as ordered in Bezuidenhout. The only distinguishing features are that in the Bezuidenhout case the wife’s contributions were predominantly that of a woman who assisted her husband in his business in which he was the driving force, while in theDavison case the wife was the homemaker and the net assets of the husband were much greater than those of the husband in Bezuidenhout. These distinctions are of no importance save that the wealthier the husband, the larger the redistribution order should be in favour of the wife having regard to his means.

I submit that an equitable and just judgment would have been for the court to award to the defendant, if not 40% of the combined net assets of the parties, at least R25 million which equates to 33,3% of the combined net assets of the parties. This would have resulted in the plaintiff having a net estate of R50 million and the defendant R25 million which would have been equitable and just to both parties.

The defendant submitted that she was entitled to a redistribution order of not less than one-third of the combined net assets of the parties. In my opinion, such an order would have been more than just and equitable to both parties. It was a generous submission by the defendant.

Contributions

How does a court fairly quantify in monetary terms the contributions of a wife? In Bezuidenhout’s case the court held that the additional contribution of the respondent as mother and housewife must be afforded due weight. This principle was also accepted by Botha J. Unfortunately the court gave no guidance to determining the weight and placing a monetary value thereon. In Beaumont’s case the court rightly rejected the attempts by the husband to minimalise and trivialise the contributions of the housewife/mother (the homemaker). The same demeaning, offensive and sexist mentality that the wife’s ‘contributions were inconsequential’ was again displayed in Davison’s case and was also rejected by the court. Notwithstanding the liberating and humanising cornerstones of our Constitution including the constitutional imperative of non-discrimination and right to gender equality and to dignity, gender discrimination in our still too patriarchal society is unfortunately taking too long to eradicate. The homemaker’s function is still seen as one of subservience by many unappreciative husbands and selfish demanding children. Simply put, a change of mindset is required and a court should give greater recognition to the financially unrewarding often frustrating, arduous and endless tasks of the homemaker.

In placing a value upon the wife’s contributions during the marriage, justice demands that

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no distinction be drawn between the wife who spent the greater part of her energies in her business or professional life on the one hand and on the other hand the homemaker;

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there is no place for discrimination between husband and wife in their respective roles.

Conclusion

Simply put, ultimately s 7(3) necessitates a philosophic value judgment of the husband’s conscienceon which a fair monetary value must be placed. The concept of fairness is subjective and elastic. A great degree of elasticity should be given to this concept in applying s 7(3). Divorce proceedings relate to the dissolution of what once was a very intimate and loving partnership in which the partners made commitments to each other for life and contributed their respective skills and talents. It is an action in which a husband often is involved in litigation with the woman he once loved and who loved and may still love him, the woman with whom he intimately shared many years on the journey of his life, the woman who was a devoted wife and homemaker and most importantly, the woman who is and remains the mother of his children. The above factors also apply mutatis mutandis in reverse to the wife engaged in the litigation.

The harmful consequences of a divorce are suffered by the parties, family and friends. Thus, in appropriate cases practitioners should at the outset make every effort to encourage a reconciliation, remote as the prospect may be. Litigation is hazardous and traumatic. This is more so with matrimonial litigation. Protracted divorce actions are destructive of family life and seriously prejudicial to the ongoing co-parenting relationship and welfare of the children. There is a professional duty on family law practitioners to cooperate with each other and to make every effort as early as possible to assist the parties in arriving at a settlement in the interests of the family thereby avoiding further acrimony, trauma and unnecessary legal costs.